ATTACHMENT A Documents Resolution

ATTACHMENT A

Documents Resolution

4819-9008-6083.2

RESOLUTION NO._________

RESOLUTION OF THE DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA APPROVING AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATED TO THE SUBSTITUTION AND/OR EXTENSION OF THE LETTERS OF CREDIT SUPPORTING THE DEPARTMENT’S COMMERCIAL PAPER PROGRAM (LOS ANGELES INTERNATIONAL AIRPORT), THE EXECUTION OF REIMBURSEMENT AGREEMENTS, FEE LETTERS AND BANK NOTES (INCLUDING AMENDMENTS TO EXISTING REIMBURSEMENT AGREEMENTS, FEE LETTERS AND BANK NOTES), APPROVING THE DISTRIBUTION OF A COMMERCIAL PAPER OFFERING MEMORANDUM AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO

WHEREAS, the Department of Airports of the City of Los Angeles (the “Department”) is a duly constituted department of the City of Los Angeles, California (the “City”), which City is a municipal corporation operating under the provisions of a freeholders’ charter approved by the electorate of the City on January 25, 1925, as amended (the “City Charter”); and

WHEREAS, the Department is authorized under Section 609 of the City Charter and the Procedural Ordinance related thereto (Section 11.28.1 et seq. of the Los Angeles Administrative Code) (the “Procedural Ordinance”), with the consent of the City Council of the City (the “City Council”) and the Mayor of the City, to issue bonds payable from the LAX Revenue Account of the Airport Revenue Fund in accordance with the provisions of the City Charter and the Procedural Ordinance payable either on a parity with the Department’s existing senior lien bonded indebtedness or on a parity with the Department’s existing subordinate lien bonded indebtedness; and

WHEREAS, on June 6, 2001, the Board adopted Resolution No. 21434 (the “Authorizing Resolution”), and on July 17, 2001, the City Council approved the Authorizing Resolution with the Mayor of the City subsequently approving the Authorizing Resolution, which authorizes and establishes a financing program (the “CP Program”) for the purpose of issuing, from time to time, subordinate short-term revenue notes (the “Notes”) to finance all or a portion of the Department’s short-term borrowing needs; and

WHEREAS, the Notes have been and are expected to be issued, from time to time, as commercial paper notes (“CP Notes”) having maturities of 270 days or less; and

WHEREAS, pursuant to the Authorizing Resolution, the maximum principal amount of CP Notes that may be outstanding at any one time under the CP Program is $500,000,000 (the “Authorized CP Amount”); and

WHEREAS, the CP Notes may be issued, from time to time, up to the Authorized CP Amount ($500,000,000), pursuant to the terms and provisions of the Master Subordinate Trust Indenture, dated as of December 1, 2002, as amended (the “Master Subordinate Indenture”), by and between the Department and U.S. Bank National Association (also known as U.S. Bank, N.A.), as trustee (the “Trustee”), and the Seventh Supplemental Subordinate Trust Indenture, dated as of March 1, 2012, as amended (the “Seventh Supplemental Subordinate Indenture,” and together with the Master Subordinate Indenture, the “Subordinate Indenture”), by and between the Department and the Trustee; and

WHEREAS, to provide credit support for the CP Notes, the Department previously entered into (a) a Reimbursement Agreement, dated as of September 1, 2017 (the “Original Barclays Reimbursement Agreement”), by and between the Department and Barclays Bank PLC (“Barclays”), pursuant to which Barclays issued its irrevocable transferable direct-pay letter of credit, (b) a Reimbursement Agreement, dated as of September 1, 2017 (the “Original SMBC Reimbursement Agreement”), by and between the Department and Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”),

Resolution No. _________ -2-

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pursuant to which SMBC issued its irrevocable transferable direct-pay letter of credit, and (c) a Reimbursement Agreement, dated as of September 1, 2017, by and between the Department and Wells Fargo Bank, National Association (“Wells Fargo”), pursuant to which Wells Fargo issued its irrevocable transferable direct-pay letter of credit; and

WHEREAS, the current letters of credit of Barclays, SMBC and Wells Fargo providing credit support for up to $500,000,000 principal amount of CP Notes are set to expire on September 11, 2020; and

WHEREAS, Department staff, in anticipation of the expiration date of the current letters of credit, published a competitive request for proposals (“RFP”) for direct-pay letter of credit proposals; and

WHEREAS, four written proposals were received from financial institutions by May 22, 2020, the response due date; and

WHEREAS, Department staff reviewed the detailed term sheets submitted by the financial institutions; and

WHEREAS, based upon the Department staff evaluations, Bank of America, N.A. (“BANA”), Barclays and SMBC were determined to be the highest ranking respondents; and

WHEREAS, the Department has determined that it is in its best interest to procure credit support for the CP Notes by requesting BANA, Barclays and SMBC to issue separate irrevocable transferable direct-pay letters of credit; and

WHEREAS, the letters of credit to be provided by BANA, Barclays and SMBC will, in the aggregate, provide credit support for up to $500 million principal amount of CP Notes outstanding at any one time; and

WHEREAS, in connection with the issuance of separate irrevocable transferable direct-pay letters of credit to be issued by Barclays, BANA and SMBC, it is necessary for the Department to enter into separate reimbursement agreements and fee letters (or amendments to existing reimbursement agreements and fee letters) with each bank and issue a bank note to each bank; and

WHEREAS, in connection with the replacement of the existing Barclays and Wells Fargo letters of credit with the irrevocable transferable direct-pay letters of credit to be issued by Barclays and BANA, and the extension of the existing SMBC letter of credit, it is also necessary to distribute a new offering memorandum for the CP Notes; and

WHEREAS, the Department previously appointed BofA Securities, Inc., as successor to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofA”), Citigroup Global Markets Inc. (“Citigroup”), J.P. Morgan Securities LLC (“JP Morgan”), Loop Capital Markets LLC (“Loop”), Morgan Stanley & Co. LLC (“Morgan Stanley”), Samuel A Ramirez & Co., Inc. (‘Ramirez”), and Wells Fargo Bank, National Association (“Wells Fargo”), as dealers for the CP Notes; and

WHEREAS, there has been presented to the Board the following documents:

(a) forms of the Reimbursement Agreement (the “BANA Reimbursement Agreement”), by and between the Department and BANA, the Bank Note (the “BANA Bank Note”) included as Exhibit B to the BANA Reimbursement Agreement which will be issued by the Department in order to evidence the Payment Obligations (as hereinafter defined) incurred by the Department with respect to the BANA Reimbursement Agreement, and the Fee Letter (the “BANA Fee Letter”), between the Department and BANA, which will set forth certain fees and expenses payable by the Department to BANA in connection with BANA’s issuance of an irrevocable


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transferable direct-pay letter of credit (the “BANA Letter of Credit”) supporting certain of the CP Notes;

(b) forms of the Amended and Restated Reimbursement Agreement, which amends and restates the Original Barclays Reimbursement Agreement (the “Barclays Reimbursement Agreement”), by and between the Department and Barclays, the Bank Note (the “Barclays Bank Note”) included as Exhibit B to the Barclays Reimbursement Agreement which will be issued by the Department in order to evidence the Payment Obligations incurred by the Department with respect to the Barclays Reimbursement Agreement, and the Amended and Restated Fee Letter (the “Barclays Fee Letter”), between the Department and Barclays, which will set forth certain fees and expenses payable by the Department to Barclays in connection with Barclays’s issuance of an irrevocable transferable direct-pay letter of credit (the “Barclays Letter of Credit”) supporting certain of the CP Notes;

(c) forms of the First Amendment to Reimbursement Agreement, which amends the Original SMBC Reimbursement Agreement (the “SMBC First Amendment,” and together with the SMBC Original Reimbursement Agreement, the “SMBC Reimbursement Agreement”), by and between the Department and SMBC, and the Amended and Restated Fee Letter (the “SMBC Fee Letter”), between the Department and SMBC, which will set forth certain fees and expenses payable by the Department to SMBC in connection with the irrevocable transferable direct-pay letter of credit issued by SMBC (the “SMBC Letter of Credit”) supporting certain of the CP Notes; and

(d) a form of the Commercial Paper Offering Memorandum (the “Commercial Paper Offering Memorandum”); and

WHEREAS, said documents will be modified and amended to reflect the various details applicable to the CP Program and to comply with applicable law (including, but not limited to, federal securities laws); and

NOW, THEREFORE, the Board of Airport Commissioners of the City of Los Angeles hereby resolves as follows:

Section 1. Authorization of Documents. The forms of the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC First Amendment and the SMBC Fee Letter (collectively, the “Documents”) presented to this meeting are hereby approved substantially in the forms now before this meeting. The President of the Board, the Chief Executive Officer (previously known as the Executive Director), the Chief Operating Officer, the Chief Financial Officer or the Director of Finance, including any person serving in an acting or interim capacity or any written designee of the Chief Executive Officer (each a “Designated Officer”), for and in the name and on behalf of the Department, any one or more thereof, are hereby authorized, empowered and directed to execute, acknowledge and deliver the Documents in the name of and on behalf of the Department. The Documents, as executed and delivered, shall be in substantially the forms now before this meeting and hereby approved, or with such changes therein as shall be approved by the Designated Officer executing such Documents, such execution to be conclusive evidence of the Board’s approval of any and all changes or revisions therein from the forms of the Documents now before this meeting. The Board hereby authorizes the delivery and performance of the Documents and from and after the execution and delivery of the Documents, the officers, agents and employees of the Department are hereby authorized, empowered and directed to do all such acts and things and to execute all such documents as may be necessary to carry out and comply with the provisions of the Documents.

Section 2. Obligations Under Reimbursement Agreements and Fee Letters. The Department shall be obligated to reimburse BANA, Barclays and SMBC for all amounts drawn under the BANA Letter of


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Credit, the Barclays Letter of Credit and the SMBC Letter of Credit, respectively, and to pay interest on the amounts drawn under the BANA Letter of Credit, the Barclays Letter of Credit and the SMBC Letter of Credit, as applicable, until such amounts are reimbursed all in accordance with the terms of the BANA Reimbursement Agreement, the BANA Letter of Credit, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Letter of Credit, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Letter of Credit, the Bank Note, dated September 13, 2017, executed by the Department and delivered to SMBC (the “SMBC Bank Note”), and the SMBC Fee Letter. The Department is authorized to incur “Payment Obligations” (as defined in the Seventh Supplemental Subordinate Indenture) which include, without limitation, the obligation to reimburse BANA, Barclays and SMBC for drawings and advances made under or with respect to the BANA Letter of Credit and the BANA Reimbursement Agreement, the Barclays Letter of Credit and the Barclays Reimbursement Agreement, and the SMBC Letter of Credit and the SMBC Reimbursement Agreement, respectively, pursuant to the BANA Reimbursement Agreement, the Barclays Reimbursement Agreement and the SMBC Reimbursement Agreement, respectively, to pay interest thereon, and any other amounts payable to BANA, Barclays and SMBC under the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, respectively. The principal amount of the Payment Obligations shall bear interest at such rates as set forth in the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, as applicable. The Payment Obligations shall be subject to prepayment at any time in accordance with the terms of the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, as applicable. The Board acknowledges that the interest rate payable on the Payment Obligations may exceed the maximum interest rate payable on the CP Notes.

Section 3. Pledge to Secure the Payment Obligations. The Board hereby approves the pledge of and lien on Subordinate Pledged Revenues in accordance with the terms of the Subordinate Indenture to secure the Payment Obligations as set forth in the Subordinate Indenture, the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, as applicable. The Board hereby designates any obligation of the Department to BANA, Barclays and SMBC under the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, as applicable, as a Subordinate Obligation under the Master Subordinate Indenture.

Section 4. Approval of Letter of Credit Banks. The Board hereby approves the selection of BANA, Barclays and SMBC as the Banks under the hereinabove approved BANA Reimbursement Agreement, Barclays Reimbursement Agreement and SMBC Reimbursement Agreement. The Board hereby approves the payment of the annual fees, the drawing fees and such other fees and obligations, as described in the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, to BANA, Barclays and SMBC, respectively, and in the amounts described in the BANA Reimbursement Agreement, the BANA Bank Note, the BANA Fee Letter, the Barclays Reimbursement Agreement, the Barclays Bank Note, the Barclays Fee Letter, the SMBC Reimbursement Agreement, the SMBC Bank Note and the SMBC Fee Letter, as applicable.

Section 5. Approval of Commercial Paper Offering Memorandum. In connection with the sale, from time to time, of the CP Notes, the Board hereby approves the form of the Commercial Paper Offering Memorandum now before this Board with such additions, deletions and changes as a Designated Officer deems to be appropriate (including, but not limited to, any additions, deletions and changes necessary to comply with federal securities laws). BofA, Citigroup, JPMorgan, Loop, Morgan Stanley, Ramirez and Wells


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Fargo, as the dealers of the CP Notes, are hereby authorized to distribute, from time to time (via printed format and/or through electronic means) the Commercial Paper Offering Memorandum. The Board hereby further authorizes, from time to time, the preparation, execution and delivery of one or more additional or supplemental offering memoranda in accordance with the terms of the hereinabove approved Commercial Paper Offering Memorandum, the execution of any such document by a Designated Officer to be conclusive evidence of the Board’s approval of such supplement, additions, deletions and changes. The Commercial Paper Offering Memorandum and any supplements and additions thereto shall be circulated for use in selling the CP Notes at such time or times as a Designated Officer (after consultation with the Department’s financial advisors, bond counsel and/or such other advisors as the Designated Officer believes to be useful) shall determine.

Section 6. Designated Representatives. The President of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Director of Finance or any written designee of the Chief Executive Officer are hereby each appointed to serve as a Designated Representative under the terms of this Resolution, the Subordinate Indenture, the Documents and the SMBC Bank Note. The Designated Representatives are, and each of them is, hereby authorized and are hereby directed to perform those duties set forth in the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture, the Documents and the SMBC Bank Note including, without limitation, the execution of Notices of Issuance and Note Designation Certificates. The Designated Representatives are, and each of them is, also authorized to make representations, certifications and warranties concerning the CP Notes and in connection with the issuance of CP Notes as and when required in the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture, the Documents and the SMBC Bank Note and the certifications and agreements relating to the federal tax exemption with regards to the CP Notes, as applicable.

Section 7. Additional Authorization. The Designated Officers and all officers, agents and employees of the Department, for and on behalf of the Department, are hereby authorized and directed to do any and all things necessary to effect the execution and delivery of the Documents and the Commercial Paper Offering Memorandum and to carry out the terms thereof. The Designated Officers and all other officers, agents and employees of the Department are further authorized and directed, for and on behalf of the Department, to execute and deliver or cause to be delivered all papers, documents, certificates, notices and other instruments that may be required in order to carry out the authority conferred by this Resolution and by the Documents or to evidence said authority and its exercise, including terminating the current CP Note letters of credit.

Section 8. Costs of Issuance. The Board hereby specifically authorizes funds of the Department, together with a portion of the proceeds of the CP Notes, if any, to be used to pay costs incurred in connection with the preparation and execution of the Documents and the Commercial Paper Offering Memorandum, including, but not limited to costs of attorneys, accountants, financial advisors, the costs associated with rating agencies, costs and expenses of the Trustee and the dealers of the CP Notes under the Documents, the Subordinate Indenture, the CP Notes and other documents related to the CP Program, letter of credit bank fees, printing, publication, mailing and other communication expenses and any related filing fees.

Section 9. Electronic Signatures. The Documents and any other document necessary for the consummation of the transactions contemplated by this Resolution and necessary in connection with the CP Program (the “CP Documents”) may be executed in counterparts, including counterparts that are manually executed and counterparts that are in the form of electronic records and are electronically executed. An electronic signature means a signature that is executed by symbol attached to or logically associate with a record and adopted by a party with the intent to sign such record, including facsimile or e-mail signatures. All executed counterparts shall constitute one agreement, and each counterpart shall be deemed an original. The Board hereby acknowledges and agrees that electronic records and electronic signatures, as well as facsimile signatures, may be used in connection with the execution of the CP Documents and electronic signatures, facsimile signatures or signatures transmitted by electronic mail in so-called PDF format shall be legal and binding and shall have the same full force and effect as if a paper


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original of such document had been delivered that had been signed using a handwritten signature. The Board further acknowledges and agrees (i) that an electronic signature, whether digital or encrypted, of a Designated Officer is intended to authenticate the applicable writing and to have the same force and effect as a manual signature; (ii) that it is the intent of the Board and the Department to be bound by the signatures (whether original, faxed, or electronic) on any CP Documents sent or delivered by facsimile or electronic mail or other electronic means; (iii) that it is aware that the other party(ies) to the CP Documents will rely on such signatures; and, (iv) to waive any defenses to the enforcement of the terms of the CP Documents based on the foregoing forms of signature. If a CP Document is executed by electronic signature, the Board hereby acknowledges and agrees that such signature by fax, e-mail, or other electronic means shall constitute an Electronic Signature to an Electronic Record under both United States Federal Electronic Signatures in Global and National Commerce Act of 2000 (“E-SIGN”) and the California Uniform Electronic Transactions Act (“UETA”) (California Civil Code §1633.1 et seq.).

Section 10. Severability. The provisions of this Resolution are hereby declared to be severable, and, if any section, phrase or provision for any reason shall be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions thereof.

Section 11. California Environmental Quality Act. This action, as a continuing administrative activity, is exempt from the requirements of the California Environmental Quality Act (“CEQA”) as provided by Article II, Section 2.f. of the Los Angeles City CEQA Guidelines, as amended.

Section 12. Effective Date. This Resolution shall be effective in the manner and at the time set forth in the Charter.

I hereby certify that the foregoing is a true and correct copy of Resolution No. _________ adopted by the Board of Airport Commissioners at a Regular Meeting held __________, 2020.

Grace Miguel – Secretary BOARD OF AIRPORT COMMISSIONERS

ATTACHMENT B

Reimbursement Agreements (and Amendments), Bank Notes And Fee Letters

Reimbursement Agreement (including Bank Note) (Bank of America)

DRAFT

4329033 4843-6766-9443.3

REIMBURSEMENT AGREEMENT

by and between

DEPARTMENT OF AIRPORTS OF

THE CITY OF LOS ANGELES, CALIFORNIA,

and

BANK OF AMERICA, N.A.

Relating to: Department of Airports of the City of Los Angeles, California

Los Angeles International Airport Subordinate Revenue Commercial Paper Notes

Subseries A-3 (Governmental – Non-AMT) Subseries B-3 (Private Activity – AMT)

Subseries C-3 (Federally Taxable) Subseries D-3 (Private Activity – Non-AMT)

Dated as of September 1, 2020

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TABLE OF CONTENTS

SECTION HEADING PAGE

ARTICLE I DEFINITIONS .................................................................................................3

ARTICLE II LETTER OF CREDIT ......................................................................................14

Section 2.01. Issuance of Letter of Credit..................................................................14Section 2.02. Letter of Credit Drawings ....................................................................14Section 2.03. Reimbursement of Certain Drawings Under the Letter of

Credit; Mandatory Prepayment; Interest ..............................................14Section 2.04. Reimbursement of Drawings Other Than Drawings

Creating Advances Under the Letter of Credit ....................................16Section 2.05. Fees ......................................................................................................16Section 2.06. Method of Payment; Etc ......................................................................16Section 2.07. Termination of Letter of Credit by the Department .............................17Section 2.08. Computation of Interest and Fees ........................................................17Section 2.09. Payment Due on Non-Business Day To Be Made on Next

Business Day ........................................................................................17Section 2.10. Late Payments ......................................................................................17Section 2.11. Source of Funds ...................................................................................17Section 2.12. Extension of Letter of Credit Expiration Date .....................................17Section 2.13. Net of Taxes, Etc..................................................................................18Section 2.14. Increased Costs ....................................................................................19Section 2.15. Maximum Rate; Payment of Fee .........................................................22Section 2.16. Security of Obligations ........................................................................22

ARTICLE III COMMERCIAL PAPER NOTES OPERATIONS ..................................................22

Section 3.01. Issuance Generally ...............................................................................22Section 3.02. Stop Issuance Instructions; Final Drawing Notice...............................23

ARTICLE IV CONDITIONS PRECEDENT ............................................................................24

Section 4.01. Conditions Precedent to Issuance of the Letter of Credit ....................24Section 4.02. Conditions Precedent to Advances ......................................................27Section 4.03. Condition Subsequent ........................ Error! Bookmark not defined.

ARTICLE V REPRESENTATIONS AND WARRANTIES ........................................................27

Section 5.01. Organization; Existence .......................................................................27Section 5.02. Power and Authority ............................................................................28Section 5.03. Due Authorization, Etc ........................................................................28Section 5.04. Necessary Actions Taken .....................................................................28Section 5.05. No Contravention .................................................................................28Section 5.06. Compliance ..........................................................................................29Section 5.07. No Default ............................................................................................29

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Section 5.08. No Public Vote or Referendum............................................................29Section 5.09. No Immunity ........................................................................................29Section 5.10. Litigation ..............................................................................................30Section 5.11. Disclosure ............................................................................................30Section 5.12. Financial Information...........................................................................30Section 5.13. Official Signatures ...............................................................................30Section 5.14. Incorporation of Representations and Warranties by

Reference .............................................................................................31Section 5.15. Environmental Matters.........................................................................31Section 5.16. Security ................................................................................................31Section 5.17. Investment Company Act ....................................................................32Section 5.18. Employee Benefit Plan Compliance ....................................................32Section 5.19. Pending Legislation and Decisions ......................................................32Section 5.20. Usury ....................................................................................................32Section 5.21. Margin Regulations ..............................................................................32Section 5.22. No Incorporation of Waiver of Jury Trial and Judicial

Reference in any Bank Agreements .....................................................32Section 5.23. Trustee; Dealer .....................................................................................33Section 5.24. Tax Status of Interest on Tax-Exempt Commercial Paper

Notes ....................................................................................................33Section 5.25. OFAC ...................................................................................................33Section 5.26. No Set-off Provisions ...........................................................................34

ARTICLE VI COVENANTS ................................................................................................34

Section 6.01. Maintenance of Existence ....................................................................34Section 6.02. Reports, Certificates and Other Information ........................................34Section 6.03. Maintenance of Books and Records ....................................................36Section 6.04. Access to Books and Records ..............................................................36Section 6.05. Compliance With Documents ..............................................................36Section 6.06. Compliance With Law .........................................................................37Section 6.07. Rate Covenant ......................................................................................37Section 6.08. Further Assurances...............................................................................37Section 6.09. No Impairment .....................................................................................38Section 6.10. Application of Note Proceeds ..............................................................38Section 6.11. Application of Drawings ......................................................................38Section 6.12. Trustee and Dealers..............................................................................38Section 6.13. Limitation on Additional Debt .............................................................39Section 6.14. Maintenance of Tax-Exempt Status of Commercial Paper

Notes ....................................................................................................39Section 6.15. Amendments to Senior Lien Trust Indenture and Program

Documents ...........................................................................................40Section 6.16. Ratings .................................................................................................40Section 6.17. Liens .....................................................................................................40Section 6.18. Book-Entry Eligibility .........................................................................41Section 6.19. Substitute Credit Facility or Refinancing ............................................41

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Section 6.20. Incorporation of Waiver of Jury Trial and Judicial Reference from Bank Agreements ...................................................41

Section 6.21. Immunity from Jurisdiction .................................................................42Section 6.22. Swap Contracts ....................................................................................42Section 6.23. Budget and Appropriation....................................................................42Section 6.24. Use of Bank’s Name ............................................................................42Section 6.25. Set-off Provisions in Other Documents ...............................................43Section 6.26. Sanctions ..............................................................................................43Section 6.27. Anti-Corruption Laws ..........................................................................43

ARTICLE VII DEFAULTS ...................................................................................................44

Section 7.01. Events of Default and Remedies ..........................................................44Section 7.02. Remedies ..............................................................................................47Section 7.03. Solely for the Benefit of Bank .............................................................48Section 7.04. Discontinuance of Proceedings ............................................................48

ARTICLE VIII CITY PROVISIONS ........................................................................................48

Section 8.01. Nondiscrimination and Affirmative Action Program. .........................48Section 8.02. Child Support Orders ...........................................................................50Section 8.03. Reserved ...............................................................................................50Section 8.04. Notice of Changes to LA Admin Code Provisions ..............................50Section 8.05. Compliance with Los Angeles City Charter Section

470(c)(12) ............................................................................................50Section 8.06. Adoption or Enaction of Changes, Additions,

Amendments or Modifications Not Applicable to Bank After Delivery of Tier Two Termination Notice. ................................52

ARTICLE IX MISCELLANEOUS ........................................................................................52

Section 9.01. Amendments, Waivers, Etc ..................................................................52Section 9.02. Notices .................................................................................................52Section 9.03. Survival of Covenants; Successors and Assigns ..................................55Section 9.04. Unconditional Obligations ...................................................................56Section 9.05. Liability of Bank: Indemnification ......................................................57Section 9.06. Expenses and Taxes .............................................................................59Section 9.07. No Waiver; Conflict .............................................................................60Section 9.08. Modification, Amendment, Waiver, Etc ..............................................60Section 9.09. Severability ..........................................................................................60Section 9.10. Counterparts .........................................................................................60Section 9.11. Table of Contents; Headings ................................................................61Section 9.12. Entire Agreement .................................................................................61Section 9.13. Governing Law ....................................................................................61Section 9.14. Right of Set-off ....................................................................................61Section 9.15. USA Patriot Act; Government Regulations .........................................61Section 9.16. Dealing with the Department, the Trustee, and/or the

Dealer. ..................................................................................................61

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Section 9.17. No Advisory or Fiduciary Responsibility ............................................61Section 9.18. Reserved ...............................................................................................62Section 9.19. Electronic Execution of Certain Documents........................................62Section 9.20. US QFC Stay Rules .............................................................................62

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APPENDIX I — Form of Irrevocable Transferable Direct-Pay Letter of Credit EXHIBIT A — Form of Tier One Stop Issuance Instruction EXHIBIT B — Form of Bank Note EXHIBIT C — Form of Request For Extension EXHIBIT D — Section 10.8.3 of the Los Angeles Administrative Code EXHIBIT E — Section 10.8.4 of the Los Angeles Administrative Code EXHIBIT F — Section 10.10 of the Los Angeles Administrative Code

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REIMBURSEMENT AGREEMENT

This REIMBURSEMENT AGREEMENT, dated as of September 1, 2020, is made by and between the DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA, a duly constituted department of the City of Los Angeles, organized and existing pursuant to Article VI of the Charter of the City of Los Angeles (the “Department”) and BANK OF AMERICA, N.A., and its successors and assigns (the “Bank”).

W I T N E S S E T H :

WHEREAS, the City of Los Angeles, California (the “City”) is a municipal corporation and chartered city duly organized and existing under and pursuant to the provisions of the Constitution of the State of California (the “State”) and the Charter of the City of Los Angeles (the “Charter”); and

WHEREAS, the Board of Airport Commissioners of the City (the “Board”) has possession, management and control of all airports, airport sites, and all equipment, accommodations and facilities for aerial navigation, flight, instruction and commerce belonging to the City and such other property the City may acquire or which is placed under the control of the City and the Department, including LAX, as herein defined, and other airport facilities, and has power to act for and on behalf of the City with respect to the Department and LAX, all as provided for and defined in Article VI of the Charter; and

WHEREAS, Section 609 of the Charter provides that the Department shall have the power to borrow money, from time to time, for the purposes listed in said Section 609, and further provides that the Department may issue notes, or other forms of debt instruments, payable from the revenues of the Department, for any lawful purpose relating to the Department, including, without limitation, to evidence indebtedness and to refund from time to time, whether at or prior to maturity, any outstanding indebtedness evidenced by bonds, notes or other forms of debt, of the Department; and

WHEREAS, pursuant to the Master Trust Indenture, dated as of April 1, 1995, as amended and supplemented (the “Senior Lien Trust Indenture”), by and between the Department, acting through the Board, and The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A., as successor in interest to BNY Western Trust Company, as successor in interest to U.S. Trust Company of California, N.A., as trustee thereunder (the “Senior Lien Trustee”), the Department is authorized to issue “Bonds” (as defined in the Senior Lien Trust Indenture) secured by and payable from a pledge of Net Pledged Revenues (as hereinafter defined); and

WHEREAS, under the terms of the Senior Lien Trust Indenture, the Board may create a charge or lien on the Net Pledged Revenues ranking junior and subordinate to the charge or lien of the Bonds issued pursuant to the Senior Lien Trust Indenture; and

WHEREAS, pursuant to the Master Subordinate Trust Indenture, dated as of December 1, 2002, as amended (the “Master Subordinate Trust Indenture”), by and between the Department

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and U.S. Bank National Association, as trustee (the “Trustee”), the Department is authorized to issue Subordinate Obligations (as hereinafter defined) payable from and secured by a pledge of and lien on Subordinate Pledged Revenues (as hereinafter defined); and

WHEREAS, the Master Subordinate Trust Indenture provides, in Section 2.09 thereof, for the issuance of Subordinate Obligations and, in Section 10.02 thereof, for the execution and delivery of Supplemental Subordinate Indentures setting forth the terms of such Subordinate Obligations, and the Department and the Trustee have heretofore executed and delivered certain Supplemental Subordinate Indentures pursuant to the terms of the Master Subordinate Trust Indenture; and

WHEREAS, pursuant to Resolution No. 21434, adopted by the Board on June 6, 2001, and approved by the City Council of the City on July 17, 2001, the Board established a continuous short-term financing program for the Department with respect to LAX by providing for the issuance, from time to time, of short-term revenue notes, including commercial paper notes, payable by the Department from the LAX Revenue Account of the Airport Revenue Fund established pursuant to the Charter; and

WHEREAS, in compliance with the terms of the Master Subordinate Trust Indenture, for the purpose of providing money to finance and refinance certain capital improvements to LAX, the Department and the Trustee have executed and delivered that certain Seventh Supplemental Subordinate Indenture dated as of March 1, 2012, as amended (the “Seventh Supplemental Subordinate Trust Indenture”) for the purpose of issuing, from time to time, Subordinate Obligations in the form of commercial paper notes, including, but not limited to, its Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries A-3 (Governmental - Non-AMT), Subseries B-3 (Private Activity - AMT), Subseries C-3 (Federally Taxable) and Subseries D-3 (Private Activity - Non-AMT) (collectively, the “Commercial Paper Notes”); and

WHEREAS, the Department has requested the Bank to issue a letter of credit for the payment by the Trustee, when and as due, of the principal of and interest on the Commercial Paper Notes, and to provide such credit facility in the form of a Drawing (as herein defined) under the Letter of Credit (as herein defined); and

WHEREAS, the Bank is willing to issue such letter of credit and to provide such credit facility upon the terms and conditions provided herein;

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained and in order to induce the Bank to issue the Letter of Credit, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Department and the Bank agree as follows:

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ARTICLE I

DEFINITIONS

As used in this Agreement:

“Advance” has the meaning set forth in Section 2.03(a) hereof.

“Affiliate” means a corporation, partnership, association, agency, authority, instrumentality, joint venture, business trust or similar entity organized under the laws of any state that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the related party. For purposes of this definition, a Person “controls” another Person when the first Person possesses or exercises directly, or indirectly through one or more other Affiliates or related entities, the power to direct the management and policies of the other Person, whether through the ownership of voting rights, membership, the power to appoint members, trustees or directors, by contract, or otherwise.

“Agreement” means this Reimbursement Agreement, as amended, supplemented and otherwise modified from time to time in accordance with the terms hereof.

“Airport Budget” means the executive summary of the annual budget of the Department with respect to LAX.

“Amortization End Date” means, with respect to any Advance, the earliest to occur of: (i) the third (3rd) anniversary of the date on which the related Advance was made, (ii) the date on which a substitute Credit Facility becomes effective in substitution of the Letter of Credit with respect to the Commercial Paper Notes, (iii) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default, and (iv) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

“Authorized Representative” has the meaning set forth in the Master Subordinate Trust Indenture.

“Bank” has the meaning set forth in the introductory paragraph hereof.

“Bank Agreement” ” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase agreement, or other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) to make or provide funds to make payment of, or to purchase (other than in connection with a public offering) or provide credit enhancement for, bonds or notes of the Department secured by or payable from Subordinate Pledged Revenues.

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“Bank Note” has the meaning set forth in Section 2.03(e) hereof.

“Bank Rate” means the rate of interest per annum with respect to an Advance (a) for any day commencing on the date such Advance is made to and including the 90th day next succeeding the date such Advance is made, equal to the Base Rate from time to time in effect; and (b) for any day commencing on the 91st day next succeeding the date such Advance is made, and, at all times thereafter, equal to the sum of the Base Rate from time to time in effect plus 1.00%; provided, however, that immediately and automatically upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuance of such Event of Default, “Bank Rate” shall mean the Default Rate; and provided further that, at no time shall the Bank Rate be less than the applicable rate of interest on any outstanding Commercial Paper Notes.

“Bank’s Counsel” has the meaning set forth in Section 4.01 hereof.

“Base Rate” means, for any day, the rate of interest per annum equal to the highest of(i) the Prime Rate plus one percent (1.00%), (ii) the Federal Funds Rate plus two percent (2.00%), and (iii) seven percent (7.00%). Each determination of the Base Rate by the Bank shall be conclusive and binding on the Department absent manifest error.

“Board” has the meaning set forth in the recitals hereof.

“Bond Counsel” means Kutak Rock LLP or another nationally recognized bond counsel firm selected by the Department.

“Business Day” means any day other than (a) a Saturday, Sunday, or other day on which commercial banks located in the States of New York or California are authorized or required by law or executive order to close, (b) a day on which the presentation office for Drawings under the Letter of Credit is authorized or required by law or executive order to close and (c) a day on which the New York Stock Exchange is closed.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, including, without limitation, Risk Based Capital Guidelines, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United

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States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Charter” has the meaning set forth in the recitals hereof.

“City” has the meaning set forth in the recitals hereof.

“Closing Date” means September [__], 2020, which, subject to the satisfaction or waiver in the sole discretion of the Bank of the conditions precedent set forth in Section 4.01, is the date on which the Letter of Credit shall be issued.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and all rules and regulations from time to time promulgated thereunder.

“Commercial Paper Notes” has the meaning set forth in the recitals hereof.

“Commercial Paper Program” has the meaning set forth in the Master Subordinate Trust Indenture.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Department or any subsidiary, are treated as a single employer under Section 414 of the Code.

“Credit Facility” has the meaning set forth in the Master Subordinate Trust Indenture.

“Dealer” means, as the context requires, [Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, Samuel A. Ramirez & Co., Inc. and Wells Fargo Bank, National Association]1 or their respective successors and assigns.

“Dealer Agreement” means, as the context requires, [(a) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Citigroup Global Markets Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (b) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and J.P. Morgan Securities LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (c) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Loop Capital Markets LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (d) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and BofA Securities, Inc., as successor to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (e) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Morgan Stanley & Co. LLC, as dealer, and any and all modifications, alterations,

1 To be confirmed.

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amendments and supplements thereto; or (f) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Samuel A. Ramirez & Co., Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (g) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Wells Fargo Bank, National Association, as dealer, and any and all modifications, alterations, amendments and supplements thereto.]2

“Debt” of any Person means at any date and without duplication, (i) all obligations of such Person for borrowed money, and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (ii) all direct or contingent obligations of such Person arising under letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (iii) Capital Lease Obligations, (iv) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business (including, without limitation, accounts payable to construction contractors and other professionals for services rendered), (v) all indebtedness of others secured by a lien on any asset of such Person, whether or not such indebtedness is assumed by such Person, (vi) all indebtedness of others guaranteed by, or secured by any of the revenues or assets of, such Person and (vii) payment obligations of such Person under any Swap Contract.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Rate” means a fluctuating interest rate per annum equal to the sum of the Base Rate from time to time in effect plus five percent (5.00%).

“Department” has the meaning set forth in the recitals hereof.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Drawing” has the meaning assigned to that term in the Letter of Credit.

“DTC” means The Depository Trust Company and any successor or replacement thereto as securities depository.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules and regulations from time to time promulgated thereunder, or any successor statute.

2 To be confirmed.

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“Event of Default” has the meaning set forth in Section 7.01 hereof.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to the Bank on such day on such transactions as determined by the Bank.

“Fee Letter” means that certain Fee Letter dated the Closing Date, between the Department and the Bank, as amended, supplemented, modified or restated from time to time in accordance with its terms.

“Final Drawing Notice” means a Tier One Final Drawing Notice or a Tier Two Termination Notice, as applicable.

“Fiscal Year” means the period of time beginning on July 1 of each given year and ending on June 30 of the immediately subsequent year, or such other period designated by the Board as the Department’s fiscal year.

“Fitch” means Fitch Ratings, Inc., and any successor rating agency.

“FRB” means the Board of Governors of the Federal Reserve System of the United States, together with any successors thereof.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time, applied by the Department on a basis consistent with the Department’s most recent financial statements furnished to the Bank pursuant to Section 5.12 hereof.

“Governmental Authority” means national, state or local government (whether domestic or foreign), any state, department, agency or other political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency, bureau, central bank or comparable authority, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government, and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including, without limitation, any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for

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the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Interest Payment Date” means the first Business Day of each calendar month.

“Investment Grade” means a rating of “Baa3” (or its equivalent) or better by Moody’s and “BBB-” (or its equivalent) or better by S&P or Fitch.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“LAX” has the meaning set forth in the Senior Lien Trust Indenture.

“Letter of Credit” means the irrevocable transferable direct-pay letter of credit issued by the Bank for the account of the Department in favor of the Trustee supporting the Commercial Paper Notes, in the form of Appendix I hereto with appropriate insertions, as from time to time amended and supplemented pursuant to its terms.

“Letter of Credit Expiration Date” means September [___], 2021, the date set forth in the Letter of Credit as the date on which the Letter of Credit is stated to expire, as the same may be extended pursuant to Section 2.12 hereof.

“Letter of Credit Fees” has the meaning set forth in the Fee Letter.

“Lien” on any asset means any mortgage, deed of trust, lien, pledge, charge, security interest, hypothecation, assignment, deposit arrangement or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected or effective under applicable law, as well as the interest of a vendor or lessor under any conditional sale agreement, capital or finance lease or other title retention agreement relating to such asset.

“Master Subordinate Trust Indenture” means that certain Master Subordinate Trust Indenture, dated as of December 1, 2002, by and between the Department and U.S. Bank National Association, as trustee, as heretofore amended and as amended from time to time by Supplemental Subordinate Indentures in accordance with the terms thereof and hereof.

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“Material Adverse Change” or “Material Adverse Effect” means the occurrence of any event or change which results in a material and adverse change in the business, condition (financial or otherwise) or operations of the Department or LAX or which materially and adversely affects (a) the enforceability of this Agreement, the Bank Note, the Fee Letter or any of the other Program Documents, (b) the ability of the Department to perform its obligations hereunder or thereunder or (c) the rights, security, interest or remedies available to the Bank under this Agreement or the other Program Documents.

“Maximum CP Rate” means the lesser of (a) 12% per annum, and (b) the maximum rate of interest permitted by applicable law.

“Maximum Rate” means, the lesser of (a) the maximum non-usurious lawful rate of interest permitted by applicable law, and (b) 20%.

“Measure H Ordinance” has the meaning set forth in Section 8.05 hereof.

“Measure H Subcontract” has the meaning set forth in Section 8.05 hereof.

“Moody’s” means Moody’s Investors Service, Inc., and any successor rating agency.

“Net Pledged Revenues” has the meaning set forth in the Senior Lien Trust Indenture.

“New Tier Two Termination Notice” means the written notice, in the form attached as Annex J to the Letter of Credit, given by the Bank to the Department and the Trustee pursuant to Section 3.02(c) hereof.

“Notes” means the Commercial Paper Notes and the Bank Note.

“Obligations” means the Reimbursement Obligations (which includes amounts payable to the Bank evidenced by the Bank Note), the Letter of Credit Fees, the obligations of the Department to pay all fees, charges and expenses payable hereunder, under the Fee Letter and under the Bank Note, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Department of any proceeding under any Debtor Relief Laws naming the Department as the debtor in such proceeding, and all other payment obligations of the Department owed to the Bank arising under or in relation to this Agreement, the Fee Letter and the Bank Note.

“OFAC” has the meaning set forth in Section 5.25(i)(E) hereof.

“Offering Memorandum” means the Commercial Paper Offering Memorandum dated September [___], 2020, relating to the Commercial Paper Notes, among others, and any supplements and amendments thereto.

“Original Stated Amount” has the meaning set forth in Section 2.01 hereof.

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“Participant” has the meaning set forth in Section 9.03(b) hereof.

“Participant/Subcontractor Notice” has the meaning set forth in Section 8.05 hereof.

“Patriot Act” has the meaning set forth in Section 9.15 hereof.

“Payment Office” means Bank of America, N.A., [________________], Attention: [___________], Facsimile: [___________], ABA Number: [___________], Account Number: [___________], Account Name: [___________], Reference: [___________________], or such other office as the Bank may designate from time to time.

“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

“Plan” means, with respect to the Department and each subsidiary at any time, an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group of which the Department or such subsidiary is a part, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group of which the Department or such subsidiary is a part is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

“Pledged Revenues” has the meaning set forth in the Senior Lien Trust Indenture.

“Prime Rate” means on any day, the rate of interest in effect for such day as publicly announced from time to time by the Bank as its “prime rate.” The “prime rate” is a rate set by the Bank based upon various factors including the Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by the Bank shall take effect at the opening of business on the day specified in the public announcement of such change.

“Principal” means, with respect to the Bank or a Participant or a Subcontractor, each of the following: (i) the chairman/chairwoman of the Bank’s or Participant’s or Subcontractor’s (as applicable) Board of Directors; (ii) each of the Bank’s or the Participant’s or Subcontractor’s (as applicable) president, chief executive officer, and chief operating officer (and the functional equivalent of each such position); (iii) any individual who holds an ownership interest in the Bank or the Participant or the Subcontractor (as applicable) of twenty percent or more; (iv) any individual employee of the Bank described in Section 49.7.30.A.8.(c) of the Los Angeles Municipal Code and identified on a disclosure form submitted on the Closing Date pursuant to the Measure H Ordinance, which as of the Closing Date is titled “Bidder Contributions CEC Form 55”; and (v) any individual employee of the Participant or Subcontractor (as applicable) described in Section 49.7.30.A.8.(c) of the Los Angeles Municipal Code and identified on a disclosure form

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submitted by such Participant or Subcontractor (as applicable) pursuant to the Measure H Ordinance.

“Private Activity Notes” means the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries B-3 (Private Activity - AMT), and the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries D-3 (Private Activity – Non-AMT).

“Program Documents” means this Agreement, the Letter of Credit, the Fee Letter, the Bank Note, each Dealer Agreement, the Commercial Paper Notes, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and any documents related to any of the foregoing or executed in connection therewith, and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing permitted hereunder and thereunder.

“Provider” has the meaning set forth in Section 6.20 hereof.

“Rating Agencies” means Fitch, Moody’s and S&P.

“Rating Documentation” has the meaning set forth in Section 4.01(k) hereof.

“Reduction in Amount” has the meaning set forth in Section 2.14 hereof.

“Reimbursement Obligations” means any and all obligations of the Department to reimburse the Bank for any Drawings under the Letter of Credit and all obligations to repay the Bank for any Advance, including in each instance all interest accrued thereon.

“Resolution” means Resolution No. [________], adopted by the Board on [July 30/August 6], 2020.

“Risk-Based Capital Guidelines” means (a) the risk-based capital guidelines in effect in the United States of America, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States of America including transition rules, and any amendment to such regulations.

“Sanction(s)” means any international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

“S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, and any successor rating agency.

“Secured Debt” has the meaning set forth in Section 7.01(d) hereof.

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“Senior Lien Revenue Bonds” has the meaning set forth in the Master Subordinate Trust Indenture.

“Senior Lien Trustee” has the meaning set forth in the recitals hereof.

“Senior Lien Trust Indenture” means that certain Master Trust Indenture dated as of April 1, 1995, by and between the Department, acting through the Board, and the Senior Lien Trustee, as heretofore amended and supplemented and as amended and supplemented from time to time in accordance with the terms thereof and hereof.

“Seventh Supplemental Subordinate Trust Indenture” means that certain Seventh Supplemental Subordinate Trust Indenture, dated as of March 1, 2012, by and between the Department and U.S. Bank National Association, as trustee, as amended and supplemented from time to time in accordance with the terms thereof and hereof.

“State” means the State of California.

“Stated Amount” means, as of any date, the maximum amount which by the terms of the Letter of Credit is available to be drawn under the Letter of Credit as of such date.

“Stop Issuance Instruction” means either a Tier One Stop Issuance Instruction or a Tier Two Termination Notice, as applicable.

“Subcontractor” means a Person, other than the Bank or an employee of the Bank, who is expected to receive at least $100,000 as a result of performing some or all of the Bank’s obligations hereunder.

“Subordinate Obligation” has the meaning as set forth in the Master Subordinate Trust Indenture.

“Subordinate Pledged Revenues” has the meaning set forth in the Master Subordinate Trust Indenture.

“Subordinated Obligations” has the meaning as set forth in the Senior Lien Trust Indenture.

“Supplemental Subordinate Indenture” has the meaning as set forth in the Master Subordinate Trust Indenture.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, total return swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination

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of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Tax-Exempt Commercial Paper Notes” means Commercial Paper Notes for which an opinion of Bond Counsel relating to the exclusion of the interest thereof from gross income for purposes of federal income taxation has been delivered. Tax-Exempt Commercial Paper Notes includes the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries A-3 (Governmental - Non-AMT), Subseries B-3 (Private Activity - AMT), and Subseries D-3 (Private Activity – Non-AMT).

“Termination Date” has the meaning set forth in the Letter of Credit.

“Termination Fee” has the meaning set forth in the Fee Letter.

“Tier One Final Drawing Notice” has the meaning set forth in the Letter of Credit.

“Tier One Stop Issuance Instruction” means the written instruction, in the form attached as Exhibit A hereto, given by the Bank to the Department and the Trustee pursuant to Section 3.02(b) hereof or Section 7.02(b) hereof.

“Tier Two Termination Date” has the meaning set forth in Section 3.02(a) hereof.

“Tier Two Termination Notice” means the written notice, in the form attached as Annex I to the Letter of Credit, given by the Bank to the Department and the Trustee pursuant to Section 3.02(c) hereof.

“Trustee” has the meaning set forth in the recitals hereof.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. Any capitalized terms used herein which are not specifically defined herein shall have the same meanings herein as in the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or the Senior Lien Trust Indenture, as applicable. All references in this Agreement to times of day shall be references to New York City time (daylight or standard, as applicable) unless otherwise expressly provided herein. Unless otherwise inconsistent with the terms of this Agreement, all accounting terms shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Program Document, and either the Department or the Bank shall so request, the Bank and the Department shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (A) such ratio or

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requirement shall continue to be computed in accordance with GAAP prior to such change therein and (B) the Department shall provide to the Bank financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

ARTICLE II

LETTER OF CREDIT

Section 2.01. Issuance of Letter of Credit. Upon fulfillment of all of the conditions precedent set forth in Section 4.01 hereof and on the terms and conditions set forth herein and relying upon the representations and warranties set forth in this Agreement or incorporated herein by reference, the Bank agrees to issue the Letter of Credit (substantially in the form of Appendix I hereto). The Letter of Credit shall be in the original stated amount of $98,100,000 (calculated as the sum of the maximum principal amount of the Commercial Paper Notes supported by the Letter of Credit (i.e., $90,000,000) plus interest thereon at a maximum rate of twelve percent (12%) per annum for a period of two hundred seventy (270) days calculated on the basis of a year of 360 days) (the “Original Stated Amount”).

Section 2.02. Letter of Credit Drawings. The Trustee is authorized to make Drawings under the Letter of Credit in accordance with its terms. The Department hereby directs the Bank to make payments under the Letter of Credit in the manner therein provided. The Department hereby irrevocably approves reductions and reinstatements of the Stated Amount with respect to the Letter of Credit as provided in the Letter of Credit.

Section 2.03. Reimbursement of Certain Drawings Under the Letter of Credit; Mandatory Prepayment; Interest. (a)(i) If the conditions precedent set forth in Section 4.02 hereof are satisfied at the time of payment by the Bank of any Drawing, each Drawing made under the Letter of Credit shall constitute an advance (“Advance”) to the Department.

(ii) The Department promises to pay to the Bank the interest portion of each Advance on the date of the related Drawing.

(iii) The Department promises to pay or cause to be paid to the Bank the principal portion of each Advance on the earliest to occur of (A) the third (3rd) anniversaryof the date on which the related Advance was made, (B) the date on which a substitute Credit Facility becomes effective in substitution of the Letter of Credit with respect to the Commercial Paper Notes, (C) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default and (D) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

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(iv) Subject to Section 2.10 hereof, the Department also promises to pay to the Bank interest on the unpaid principal amount of each Advance from the date such Advance is made until it is paid in full as provided herein, at a rate per annum equal to the Bank Rate from time to time in effect, and such interest shall be payable monthly in arrears on the first Business Day of each calendar month for the immediately preceding calendar month (commencing on the first Interest Payment Date to occur after the making of the related Advance), and on the date that the final principal or interest portion of such Advance is payable as herein provided.

(v) Unless otherwise paid in full on one of the dates provided above, the principal portion of each Advance shall be payable by the Department in equal quarterly installments (“Quarterly Principal Payments”) commencing on the first Business Day of the sixth calendar month immediately succeeding the date such Advance is made, and on the first Business Day of each third calendar month thereafter, with the final installment in an amount equal to the entire then outstanding principal amount of such Advance due and payable on the Amortization End Date (the period commencing on the date such installment is initially payable and ending on the Amortization End Date is referred to as the “Amortization Period”). Each Quarterly Principal Payment shall be that amount of principal which will result in equal (as nearly as possible) aggregate Quarterly Principal Payments over the applicable Amortization Period.

(b) Any Advance may be prepaid in whole or in part on the day such Advance is made. Any Advance created pursuant to paragraph (a)(i) above may be prepaid in whole or in part without premium or penalty on any other Business Day upon one Business Day’s prior written notice to the Bank.

(c) Upon the Bank’s receipt of any payment or prepayment of any Advance, the amount of such Advance shall be reduced by the amount of such payment or prepayment.

(d) All Reimbursement Obligations shall be made against and evidenced by the Department’s promissory note payable to the order of the Bank in the principal amount of the Original Stated Amount, such note to be executed by the Department and delivered by the Department to the Bank on the Closing Date in the form of Exhibit B attached hereto with appropriate insertions (the “Bank Note”). All Reimbursement Obligations due and owing to the Bank and all payments and prepayments on the account of the principal of and interest on each Reimbursement Obligation by or on behalf of the Department shall be recorded by the Bank on its books and records, which books and records shall, absent manifest error, be conclusive as to amounts due and owing by the Department hereunder, under the Fee Letter and under the Bank Note. Any failure to so record or any error in doing so shall not, however, limit, extinguish or in any way modify or otherwise affect the obligation of the Department hereunder to pay any amount owing with respect to the Reimbursement Obligations. The Department shall pay principal and interest on the Bank Note on the dates and at the rates provided for in Sections 2.03 and 2.04 hereof. The Department’s obligations to repay the Reimbursement Obligations and to pay interest thereon as provided herein shall be evidenced and secured by the Bank Note, and the Department shall, without duplication (i) make a principal payment on the Bank Note on each date on which the Department is required to make a principal payment on Reimbursement Obligations in an

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amount equal to the principal payment due on such date and (ii) pay interest on the Bank Note on each date on which the Department is required to make an interest payment with respect to Reimbursement Obligations in an amount equal to the interest payment due on such date. The payment of the principal of and interest on the Bank Note shall constitute payment of the principal of and interest on the related Reimbursement Obligations and the payment of the principal of and interest on the Reimbursement Obligations shall constitute the payment of and principal and interest on the Bank Note and the failure to make any payment on any Reimbursement Obligation when due shall be a failure to make a payment on the Bank Note and the failure to make any payment on the Bank Note when due shall be a failure to make a payment on the related Reimbursement Obligation.

Section 2.04. Reimbursement of Drawings Other Than Drawings Creating Advances Under the Letter of Credit. Unless the conditions precedent contained in Section 4.02 hereof are satisfied on the date of payment by the Bank of a Drawing, the Department agrees to reimburse the Bank for the full amount of such Drawing immediately upon payment by the Bank of such Drawing and on the date of each such payment. If the Department does not make such reimbursement to the Bank with respect to such Drawing on such date, such Reimbursement Obligation shall bear interest at the Default Rate and be payable upon demand.

Section 2.05. Fees. The Department hereby agrees to perform the obligations provided for in the Fee Letter, including, without limitation, the payment of any and all fees, expenses and other amounts provided for therein, on the dates, at the times and in the amounts set forth in the Fee Letter. Without limiting the generality of the foregoing, in the event that the Letter of Credit is terminated or the Stated Amount is reduced and is not subject to reinstatement, the Department shall pay to the Bank the Termination Fee and/or Reduction Fee, if any, at the times and in the amounts set forth in and as required by the Fee Letter. The terms and provisions of the Fee Letter are hereby incorporated herein by reference as if fully set forth herein. The Fee Letter and this Agreement shall be construed as one agreement between the Department and the Bank and any reference to this Agreement shall be deemed to include a reference to the Fee Letter. All references to amounts or obligations due hereunder or in this Agreement shall be deemed to include all amounts and obligations (including without limitation fees and expenses) under the Fee Letter and all obligations under the Fee Letter shall be construed as obligations hereunder. All fees paid under this Agreement and the Fee Letter shall be fully earned when due and nonrefundable when paid.

Section 2.06. Method of Payment; Etc. All payments to be made by the Department under this Agreement and the Fee Letter shall be made in lawful money of the United States and in immediately available funds at the Payment Office of the Bank, not later than 4:00 p.m., New York City time, on the date when due and shall be made by wire transfer in lawful money of the United States of America in freely transferable and immediately available funds. All payments to be made by the Department shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Any payment received by the Bank after 4:00 p.m., New York City time, shall be deemed to have been received by the Bank on the next Business Day and any applicable interest or fee shall continue to accrue.

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Section 2.07. Termination of Letter of Credit by the Department. Notwithstanding any provisions of this Agreement, the Letter of Credit or any Program Document to the contrary, the Department agrees not to terminate the Letter of Credit except upon (i) the payment to the Bank of all fees, expenses and other Obligations payable hereunder and under the Fee Letter, including, without limitation, all principal and accrued interest due and owing on any Drawing or Advances or any amount due under the Bank Note and (ii) the Department providing the Bank with ten (10) days prior written notice of its intent to terminate the Letter of Credit. All payments from the Department to the Bank referred to in this Section 2.07 shall be made with immediately available funds on or before the date of termination.

Section 2.08. Computation of Interest and Fees. Fees payable hereunder and under the Fee Letter shall be calculated on the basis of a year of 360 days and the actual number of days elapsed. All computations of interest payable by the Department under this Agreement shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual number of days elapsed. Interest shall accrue during each period during which interest is computed from and including the first day thereof to but excluding the last day thereof.

Section 2.09. Payment Due on Non-Business Day To Be Made on Next Business Day. If any sum becomes payable pursuant to this Agreement or the Fee Letter on a day which is not a Business Day, the date for payment thereof shall be extended, without penalty, to the next succeeding Business Day, and such extended time shall be included in the computation of interest and fees.

Section 2.10. Late Payments. If any amount of any Obligation is not paid when due or upon the occurrence of any other Event of Default, all Obligations shall bear interest until paid in full at a rate per annum equal to the Default Rate, payable upon demand.

Section 2.11. Source of Funds. All payments made by the Bank pursuant to the Letter of Credit shall be made from funds of the Bank, and not from the funds of any other Person.

Section 2.12. Extension of Letter of Credit Expiration Date. If the Department on any date not earlier than one hundred twenty (120) days and not later than sixty (60) days prior to the then current Letter of Credit Expiration Date, submits to the Bank a written request for an extension of the Letter of Credit Expiration Date in the form of Exhibit C hereto for a period as specified in such written request, the Bank will make reasonable efforts to respond to such request within thirty (30) days after receipt of all information necessary, in the Bank’s reasonable judgment, to permit the Bank to make an informed credit decision. In the event the Bank fails to definitively respond to such request within such period of time, the Bank shall be deemed to have refused to grant the extension requested. The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed extension and no extension shall become effective unless the Bank shall have consented thereto in writing. The consent of the Bank, if granted, shall be conditioned upon the preparation, execution and delivery of documentation in form and substance reasonably satisfactory to the Bank and consistent with this Agreement and the Letter of Credit. If such an extension request is accepted by the Bank in its sole and absolute discretion, the then current Letter of Credit Expiration Date shall be extended to the date agreed to by the Department and the Bank.

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Section 2.13. Net of Taxes, Etc.

(a) Taxes. Any and all payments to the Bank by the Department hereunder and under the Fee Letter shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges, withholdings or liabilities imposed thereon, excluding, however, taxes imposed on or measured by the net income or capital of the Bank by any jurisdiction or any political subdivision or taxing authority thereof or therein solely as a result of a connection between the Bank and such jurisdiction or political subdivision (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Department shall be required by law to withhold or deduct any Taxes imposed by the United States of America or any political subdivision thereof from or in respect of any sum payable hereunder or under the Fee Letter to the Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13), the Bank receives an amount equal to the sum it would have received had no such deductions been made; (ii) the Department shall make such deductions; and (iii) the Department shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. If the Department shall make any payment under this Section 2.13 to or for the benefit of the Bank with respect to Taxes and if the Bank shall claim any credit or deduction for such Taxes against any other taxes payable by the Bank to any taxing jurisdiction in the United States then the Bank shall pay to the Department an amount equal to the amount by which such other taxes are actually reduced; provided that the aggregate amount payable by the Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by the Department with respect to such Taxes. In addition, the Department agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America, the State of New York, the State of California or any other taxing jurisdiction from any payment made hereunder or under the Fee Letter or from the execution or delivery or otherwise with respect to this Agreement (hereinafter referred to as “Other Taxes”). The Bank shall provide to the Department within a reasonable time a copy of any written notification it receives with respect to Taxes or Other Taxes owing by the Department to the Bank hereunder; provided that the Bank’s failure to send such notice shall not relieve the Department of its obligation to pay such amounts hereunder. The Department may conduct a reasonable contest of any such Taxes with the prior written consent of the Bank which consent shall not be unreasonably withheld.

(b) Indemnity. The Department shall, to the fullest extent permitted by law and subject to the provisions hereof, indemnify the Bank for the full amount of Taxes and Other Taxes including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.13 paid by the Bank or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided that the Department shall not be obligated to indemnify the Bank for any penalties, interest or expenses relating to Taxes or Other Taxes arising from the Bank’s gross negligence or willful misconduct. The Bank agrees to give notice to the Department of the assertion of any claim against the Bank relating to such Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided that the Bank’s failure to notify the Department promptly of such assertion shall not relieve the Department of its obligation under this Section 2.13. Payments by the Department pursuant to this indemnification shall be made within

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sixty (60) days from the date the Bank makes written demand therefor, which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof. The Bank agrees to repay to the Department any refund (including that portion of any interest that was included as part of such refund) with respect to Taxes or Other Taxes paid by the Department pursuant to this Section 2.13 received by the Bank for Taxes or Other Taxes that were paid by the Department pursuant to this Section 2.13 and to contest, with the cooperation and at the expense of the Department, any such Taxes or Other Taxes which the Bank or the Department reasonably believes not to have been properly assessed.

(c) Notice. Within thirty (30) days after the date of any payment of Taxes or Other Taxes by the Department, the Department shall furnish to the Bank, the original or a certified copy of a receipt evidencing payment thereof.

(d) Survival of Obligations. The obligations of the Department under this Section 2.13 shall survive the termination of this Agreement.

Section 2.14. Increased Costs. (a) If, after the Closing Date, the Bank or any Participant shall have determined that any Change in Law shall:

(i) change the basis of taxation of payments to the Bank or such Participant of any amounts payable hereunder or under the Fee Letter (except for taxes on the overall net income of the Bank or such Participant); or

(ii) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance premium, fee, financial charge, monetary burden or similar requirement against funding any Drawing under the Letter of Credit or maintaining the Letter of Credit, or complying with any term of this Agreement, or against assets held by, or deposits with or for the account of, the Bank or such Participant, or

(iii) impose on the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any, any other condition, expense or cost regarding this Agreement or the Letter of Credit, and the result of any event referred to in clause (i) or (ii) above shall be to increase the cost to the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any, of funding any Drawing under the Letter of Credit or maintaining the Letter of Credit or complying with any term of this Agreement or the Letter of Credit or to reduce the amount of any sum received or receivable by the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any, or under the Fee Letter (each such instance, referred to individually herein as a “Reduction in Amount” and, collectively as “Reductions in Amount”), then the Department shall pay to the Bank at such time and in such amount as is set forth in paragraph (c) of this Section 2.14, such additional amount or amounts as will compensate the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company for such increased costs or Reductions in Amount.

The Bank or Participant shall use its best efforts to provide to the Department written notice of the expected occurrence of any event referred to in clause (i), (ii) or (iii) above for which it has

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actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased costs or Reductions in Amount (the “Yield Protection Demand Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if, all obligations due and owing under this Agreement and the Fee Letter are paid in full prior to the date on which any increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed upon the Bank or Participant, then the Department will not be obligated to pay the additional amounts set forth in the Yield Protection Demand Notice; provided, however, that if all obligations due and owing under this Agreement and the Fee Letter are not paid prior to the date on which any increased cost or Reduction in Amount are imposed on the Bank or Participant, the Department shall become liable for the additional amount for such increased cost or Reduction in Amount set forth in the Yield Protection Demand Notice on the date on which such increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed on the Bank or Participant. Such amounts will be payable as set forth in Section 2.14(c) hereof.

Notwithstanding the foregoing, a failure by the Bank or any Participant to deliver to the Department a Yield Protection Demand Notice shall in no event relieve the obligation of the Department of any obligation under this Section 2.14(a). Additionally, nothing set forth in this Section 2.14(a) shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i), (ii) or (iii) above.

(b) If, after the Closing Date, the Bank or any Participant shall have determined that any Change in Law shall impose, modify or deem applicable any capital (including but not limited to contingent capital) adequacy, reserve, insurance, liquidity ratio or similar requirement (including, without limitation, a request or requirement that affects the manner in which the Bank or any Participant allocates capital or liquidity resources or reserves to its commitments) that either:

(i) affects or would affect the amount of capital or liquidity or reserves to be maintained by the Bank or such Participant, or the Bank’s such Participant’s parent or holding company, if any, or

(ii) reduces or would reduce the rate of return on the Bank’s or such Participant’s capital or reserves or, without duplication, the capital or reserves of the Bank’s or such Participant’s parent or holding company, if any, to a level below that which the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any, could have achieved but for such circumstances (taking into consideration the policies of the Bank, such Participant, the Bank’s parent or holding company, or such Participant’s parent or holding company, as applicable, with respect to capital adequacy and liquidity or the maintenance of reserves) then,

the Bank or Participant shall use its best efforts to provide the Department written notice of the expected occurrence of any event referred to in clause (i) or (ii) above for which it has actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased cost related to any event referred to in clause (i) or (ii) above (the “Adequacy Demand

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Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if all obligations due and owing to the Bank and any Participant are paid in full prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, then the Department will not be obligated to pay the additional amounts set forth in the Adequacy Demand Notice; provided however that if all obligations due and owing to the Bank and any Participant are not paid prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed upon the Bank or such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, the Department shall become liable for the additional amount set forth in the Adequacy Demand Notice on the date on which such increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable. Such amounts will be payable as set forth in Section 2.14(c) hereof.

Notwithstanding the foregoing, (i) a failure by the Bank or any Participant to deliver to the Department an Adequacy Demand Notice shall in no event relieve the obligation of the Department of any obligation under this Section 2.14(b). Additionally, nothing set forth in this Section 2.14(b) shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i) or (ii) above.

(c) All payments of amounts referred to in this Section 2.14 shall be paid by the Department, subject to Section 2.10 hereof, to the Bank, for its own account, or to the Participant for the account of such Participant, as applicable, within sixty (60) days of the date the Bank or Participant makes demand on the Department. The amounts demanded in the respective Yield Protection Demand Notice or Adequacy Demand Notice or any other written notice from the Bank to the Department making a demand on the Department for the payment of increased costs or Reductions in Amount pursuant to this Section 2.14, as applicable, are intended to compensate the Bank or Participant, as applicable, for such increased costs or Reductions in Amount incurred by the Bank or such Participant as a result of any event referred to in subsections (a) or (b) above. Any Yield Protection Demand Notice or Adequacy Demand Notice or any other written notice from the Bank to the Department making a demand on the Department for the payment of increased costs or Reductions in Amount pursuant to this Section 2.14 submitted by the Bank or any Participant to the Department shall be conclusive as to the amount thereof absent manifest error.

The Department shall not be required to compensate the Bank or any Participant pursuant to this Section 2.14 in respect of a period occurring more than six (6) months prior to the date the above-described written demand is given to the Department with respect thereto (the “Cut‑Off Date”), except where (i) the Bank or Participant, as applicable, had no actual knowledge of the action resulting in such increased costs, increased capital or Reduction in Amount, as applicable, as of the Cut‑Off Date or (ii) such increased costs, increased capital or Reduction in Amount apply to the Bank or Participant retroactively to a date prior to the Cut‑Off Date.

In making the determinations contemplated by any Yield Protection Demand Notice or Adequacy Demand Notice or any other written notice from the Bank to the Department making a demand on the Department for the payment of increased costs or Reductions in Amount pursuant

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to this Section 2.14, the Bank or Participant may make and shall include in such notice such reasonable estimates, assumptions, allocations and the like that the Bank or Participant in good faith determines to be appropriate. For purposes of this Section 2.14, the term “Bank” or “Participant” as applicable, shall also include any entity controlling the Bank or Participant or the holding company thereof. For purposes of the immediately preceding sentence, “controlling” means the power to direct the management and policies of the Bank, directly or indirectly, whether through the ownership of voting rights, membership, the power to appoint members, trustees or directors, by contract or otherwise. The obligations of the Department under this Section 2.14 shall survive the termination of this Agreement, the Letter of Credit and repayment of all Obligations hereunder and under the Fee Letter.

Notwithstanding anything in this Section 2.14 to the contrary, any amounts owed to a Participant are subject to the limitations set forth in Section 9.03(b) hereof.

Section 2.15. Maximum Rate; Payment of Fee. If the rate of interest payable hereunder or under the Fee Letter shall exceed the Maximum Rate for any period for which interest is payable, then (a) interest at the Maximum Rate shall be due and payable with respect to such interest period; and (b) interest at the rate equal to the difference between (i) the rate of interest calculated in accordance with the terms hereof without regard to the Maximum Rate and (ii) the Maximum Rate (the “Excess Interest”), shall be deferred until such date as the rate of interest calculated in accordance with the terms hereof or the Fee Letter, if applicable, ceases to exceed the Maximum Rate, at which time the Department shall pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue interest hereunder or under the Fee Letter, as applicable, such portion of the deferred Excess Interest as will cause the rate of interest then paid to the Bank to equal the Maximum Rate, which payments of deferred Excess Interest shall continue to apply to such unpaid amounts hereunder and under the Fee Letter, as applicable, until all Excess Interest is fully paid to the Bank. Upon the termination of the Letter of Credit, in consideration for the limitation of the rate of interest otherwise payable hereunder and under the Fee Letter, the Department shall pay to the Bank a fee equal to the amount of all unpaid Excess Interest.

Section 2.16. Security of Obligations. The Obligations of the Department hereunder are special obligations secured by a pledge of and lien on the Subordinate Pledged Revenues, on a parity with all Subordinate Obligations issued under the Master Subordinate Trust Indenture, and are subordinate only to the debt service and reserve requirements on Senior Lien Revenue Bonds.

ARTICLE III

COMMERCIAL PAPER NOTES OPERATIONS

Section 3.01. Issuance Generally. The Department may issue Commercial Paper Notes only in accordance with the terms of and subject to the conditions set forth in the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and this Agreement.

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Section 3.02. Stop Issuance Instructions; Final Drawing Notice. (a) Commercial Paper Notes may be issued from time to time prior to the Letter of Credit Expiration Date in accordance herewith and with the terms of and subject to the conditions set forth in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture so long as (i) the Trustee is not in receipt of a Tier One Stop Issuance Instruction then in effect given by the Bank pursuant to this Section 3.02 or Section 7.02(b) hereof and not rescinded and (ii) the Trustee is not in receipt of a Tier One Final Drawing Notice in substantially the form attached to the Letter of Credit as Annex H-1. Upon the Trustee’s receipt of a Tier Two Termination Notice given by the Bank pursuant to this Section 3.02 and not rescinded, no Commercial Paper Notes may be issued thereafter with a maturity later than the sixtieth (60th) day (or such earlier day as may be provided in Section 3.02(c) hereof) following the date of delivery of such Tier Two Termination Notice (the “Tier Two Termination Date”) and on the Tier Two Termination Date, the Trustee shall make the final Drawing under the Letter of Credit to provide for the payment of Commercial Paper Notes issued in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture which are outstanding and are maturing on or after the Tier Two Termination Date.

(b) The Bank may deliver a Tier One Stop Issuance Instruction in the form of Exhibit A attached hereto at any time when: (i) an Event of Default shall have occurred and be continuing; or (ii) the representations and warranties of the Department set forth in Article V hereof shall, in the reasonable opinion of the Bank, no longer be true and correct in any material respect. The Bank may deliver the Tier One Final Drawing Notice at any time when an Event of Default shall have occurred and be continuing. A Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice shall be effective when received by the Trustee; provided, however, that a Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice received by the Trustee after 12:00 noon New York City time, on any day on which Commercial Paper Notes are being issued shall be effective on the next succeeding day. A Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice may be given by facsimile or electronic mail transmission, confirmed in writing within twenty-four (24) hours, but the failure to so confirm such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice in writing shall not render such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice ineffective. The Bank will furnish a copy of any Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice to the Department and the Dealer promptly following delivery thereof to the Trustee, but the failure to furnish any such copy shall not render ineffective such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice.

(c) The Bank may deliver a Tier Two Termination Notice in the form of Annex I attached to the Letter of Credit at any time when it has been determined by the Bank in its sole and absolute discretion that the Bank is unable to comply with any of the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance as a result of any amendment or other change to such Equal Employment Practices, Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date. Notwithstanding the foregoing, in the event any monetary or civil penalties are imposed on the Bank as a result of its inability to comply with one or more provisions of the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance as a result of any amendment or other change to such Equal Employment Practices,

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Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date, then upon the Bank’s delivery of a revised Tier Two Termination Notice (in the form of Annex J attached to the Letter of Credit) setting forth a new Tier Two Termination Date (which may be sooner than the original Tier Two Termination Date, but in any event not sooner than the earliest to occur of (a) the 15th day following receipt of the revised Tier Two Termination Notice, or (b) the original Tier Two Termination Date), the Trustee shall make the final Drawing under the Letter of Credit on such new Tier Two Termination Date to provide for the payment of Commercial Paper Notes issued in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture which are outstanding and are maturing on or after the Tier Two Termination Date. A Tier Two Termination Notice received by the Trustee after 12:00 noon New York City time, on any day on which Commercial Paper Notes are being issued shall be effective on the next succeeding day. A Tier Two Termination Notice may be given by facsimile or electronic mail transmission, confirmed in writing within twenty-four (24) hours, but the failure to so confirm such Tier Two Termination Notice in writing shall not render such Tier Two Termination Notice ineffective. The Bank will furnish a copy of any Tier Two Termination Notice to the Department and the Dealer promptly following delivery thereof to the Trustee, but the failure to furnish any such copy shall not render ineffective such Tier Two Termination Notice. Notwithstanding any provisions of this paragraph to the contrary, in the event (1) the City or the Department provides a waiver or exemption to the Bank which states that the Bank (y) is not required to comply with any amendment or other change to the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance, as applicable, which have become effective after the Closing Date, and/or (z) is not required to satisfy any monetary or civil penalties imposed on the Bank related to such amendments or other changes, and (2) the Bank receives a City Attorney’s opinion or other opinion of counsel satisfactory to the Bank confirming the foregoing, the Bank shall immediately rescind the Tier Two Termination Notice and such Tier Two Termination Notice shall no longer be effective.

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.01. Conditions Precedent to Issuance of the Letter of Credit. As conditions precedent to the obligation of the Bank to issue the Letter of Credit, the Department shall provide to the Bank on the Closing Date, each in form and substance satisfactory to the Bank and the Bank’s counsel, Chapman and Cutler LLP (hereinafter, “Bank’s Counsel”):

(a) Approvals. The Bank shall have received (1) executed originals of this Agreement and the Fee Letter duly executed by the Department and copies of all action taken by the Department (including, without limitation, the Resolution) approving the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note, in each case, certified by an authorized official of the Department as complete and correct as of the date hereof and (2) executed or certified copies, as applicable, of each of the other Program Documents (except the Commercial Paper Notes) to which the Department is a party, together with a certificate of the Secretary of the Board of Airport

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Commissioners of the City of Los Angeles, California, or such other authorized official of the Department or the City, dated the Closing Date, stating that such Program Documents and approvals are in full force and effect on the Closing Date and have not been amended, supplemented, modified or limited (or with respect to the related approvals, amended, modified, supplemented, superseded or repealed) in any manner, except for such amendments made in accordance with the express terms of such Program Documents for which the Department has provided notice to the Bank prior to the Closing Date.

(b) Certificate and Incumbency of Department Officials. The Bank shall have received (1) an incumbency and specimen signature certificate of the Department in respect of each of the officials who is authorized to (i) sign this Agreement, the Fee Letter and the Bank Note on behalf of the Department and (ii) take actions for the Department under this Agreement, the Fee Letter, the Bank Note and the other Program Documents (to which the Department is a party) with respect to the Commercial Paper Notes and (2) a certificate of an Authorized Representative of the Department, dated the Closing Date, certifying that (A) each of the Department’s representations and warranties contained herein and the other Program Documents to which the Department is a party is true and correct on and as of the Closing Date as though made on and as of such date, (B) no Default or Event of Default has occurred and is continuing or will result from the execution and delivery by the Department of this Agreement, the Fee Letter or the issuance of the Letter of Credit, (C) since June 30, 2019, except as disclosed to the Bank in writing, there has been no Material Adverse Change and there has been no material adverse change in the laws, rules or regulations (or their interpretation or administration) and no material litigation is ongoing with respect to the Department, in any case, that may adversely affect the consummation of the transactions contemplated hereby or by any Program Document or result in a Material Adverse Effect, (D) all conditions precedent set forth in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture with respect to issuance of the Commercial Paper Notes shall have been satisfied and (E) the Department has not received notice from the Rating Agencies that the long-term unenhanced ratings of the Senior Lien Revenue Bonds have been withdrawn, reduced or suspended since the dated date of the Rating Documentation.

(c) Opinion of Bond Counsel. The Bank shall have received a written opinion of Bond Counsel, addressed to the Bank, dated the Closing Date to the effect that (i) this Agreement, the Fee Letter and the Bank Note have been duly authorized, executed and delivered by the Department and are the valid and binding obligations of the Department enforceable in accordance with their respective terms, except as may be limited by the valid exercise of judicial discretion and the constitutional powers of the United States of America and to valid bankruptcy, insolvency, reorganization or moratorium or other similar laws applicable to the Department and equitable principles relating to or affecting creditors’ rights generally from time to time; (ii) the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note does not violate the constitution or laws of the State; and (iii) the Board on behalf of the Department has taken all actions, and has obtained any approvals, necessary to the authorization, execution, delivery and performance by the Department of this Agreement, the Fee Letter and the Bank Note. In addition, the Bank shall have received a letter from Bond Counsel authorizing the Bank to

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rely on the final approving opinion of Bond Counsel delivered to the Department in respect of the Commercial Paper Notes.

(d) Opinion of City Attorney. The Bank shall have received a written opinion of the City Attorney, addressed to the Bank, dated the Closing Date in the form and substance agreed to by the City Attorney and the Bank.

(e) Bank Note. The Bank shall have received an executed Bank Note payable to the Bank.

(f) No Default, Etc. No Event of Default shall have occurred and be continuing as of the Closing Date or will result from the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note or the issuance of the Letter of Credit. The representations and warranties and covenants made by the Department in Article V hereof shall be true and correct in all material respects on and as of the Closing Date, as if made on and as of such date.

(g) Reserved.

(h) Legality; Material Adverse Change. The Bank shall have determined (in its sole discretion) that (i) none of the making of any Drawings or Advances, the issuance of the Letter of Credit or the consummation of any of the transactions contemplated by the Resolution, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the Commercial Paper Notes, the Bank Note, this Agreement or the Fee Letter will violate any law, rule, guideline or regulation applicable to the Department, LAX, the Bank, this Agreement or any other Program Document; and (ii) no material adverse change in the ratings, financial condition, business, assets, liabilities or prospects of the Department or LAX shall have occurred since June 30, 2019, except as disclosed in writing to the Bank prior to the Closing Date, which would be reasonably likely to result in a Material Adverse Effect; and (iii) there has been no material adverse change in the laws, rules or regulations (or their interpretation or administration) that, in any case, may adversely affect the consummation of the transactions contemplated hereby or by any Program Document.

(i) Reserved.

(j) Fees, Etc. The Bank shall have received payment of the fees, costs and expenses to be paid on or prior the Closing Date referred to in Section 9.06 hereof and pursuant to the Fee Letter.

(k) Ratings. The Bank shall have received written confirmation that (i) the Commercial Paper Notes have been rated at least “P-1” (or its equivalent) by Moody’s and “A-1” (or its equivalent) by S&P and “F1+” (or its equivalent) by Fitch, (ii) the unenhanced Senior Lien Revenue Bonds have been rated “[___]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch, and (iii) the unenhanced Subordinate Obligations (other than the Commercial Paper Notes and the Bank Note) have been rated

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“[__]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch (collectively referred to herein as the “Rating Documentation”).

(l) Bank Note CUSIP and Rating. The Bank shall have received written confirmation that (i) a CUSIP number (No. [______]) has been obtained from Standard and Poor’s CUSIP Services for the Bank Note and (ii) a long term rating of at least Investment Grade has been obtained for the Bank Note (and its related CUSIP number) from any Rating Agency.

(m) Other Documents. The Bank shall have received such other documents, certificates and opinions as the Bank’s Counsel shall have reasonably requested.

Section 4.02. Conditions Precedent to Advances. Following any payment by the Bank under the Letter of Credit pursuant to a Drawing, an Advance shall be made available to the Department only if, on the date of payment of such Drawing by the Bank, each of the following conditions shall be satisfied:

(a) the representations and warranties contained in Article V of this Agreement (other than those representations and warranties set forth in Section 5.12(a) hereof) are true and correct in all material respects, and deemed made, as of such date; and

(b) no event has occurred and is continuing, or would result from such payment, which constitutes a Default or Event of Default.

Unless the Department shall have previously advised the Bank in writing that (i) any or all of the representations and warranties contained in Article V of this Agreement are not true and correct in all material respects as of the date the Bank honors such Drawing and/or makes such Advance or (ii) any event has occurred and is continuing, or would result from the Bank honoring such Drawing or making such Advance, which constitutes a Default or Event of Default, then the Department shall be deemed to have represented and warranted on the date the Bank honors such Drawing and/or makes such Advance that (i) the representations and warranties contained in Article V of this Agreement are true and correct in all material respects as of such date and (ii) no event has occurred and is continuing, or would result from the Bank honoring such Drawing and/or making such Advance, which constitutes a Default or Event of Default.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

In order to induce the Bank to enter into this Agreement and the Fee Letter and to issue the Letter of Credit, the Department represents and warrants to the Bank as follows:

Section 5.01. Organization; Existence. The Department is duly organized and validly existing as a proprietary department of the City pursuant to Article VI of the Charter.

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Section 5.02. Power and Authority. The Department has (and had at the time of adoption, execution, delivery, issuance, sale or performance) full power, right and authority to (a) execute, deliver and perform its obligations under each of the Program Documents to which it is a party, and any and all instruments and documents required to be executed, adopted or delivered pursuant to or in connection herewith or therewith; (b) issue and sell, from time to time, the Commercial Paper Notes as provided in the Program Documents and make payment of principal and interest, if any, on the Commercial Paper Notes and to pay the Obligations at the times and in the manner set forth herein; (c) possess, manage and operate LAX; and (d) perform each and all of the matters and things herein and therein provided for and the Department has complied in all material respects with the laws of the State in all matters relating to such execution, delivery and performance.

Section 5.03. Due Authorization, Etc. Each of the Program Documents to which the Department is a party have been duly authorized, executed, issued and delivered. This Agreement and each of the other Program Documents to which the Department is a party constitute legal, valid and binding obligations of the Department, enforceable against the Department in accordance with their terms, except as such enforceability may be limited by the valid exercise of judicial discretion and the constitutional powers of the United States of America and to valid bankruptcy, insolvency, reorganization, moratorium, or other similar laws and equitable principles relating to or affecting creditors’ rights generally from time to time in effect. The Obligations are payable from and secured by Subordinate Pledged Revenues as set forth herein and in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture.

Section 5.04. Necessary Actions Taken. The Department has taken all actions necessary to be taken by it (a) for the issuance and sale of the Commercial Paper Notes upon the terms set forth in the Program Documents; (b) for the execution, adoption and delivery by the Department of any and all such other instruments and the taking of all such other actions on the part of the Department as may be necessary or appropriate for the effectuation and consummation of the transactions on the part of the Department contemplated by the Program Documents or in connection herewith or therewith; and (c) to authorize or approve, as appropriate, the execution, issuance and delivery of, and the performance of its obligations under and the transactions contemplated by each of the Program Documents to which it is a party and the payment of the Obligations at the times and in the manner set forth.

Section 5.05. No Contravention. The execution and delivery of each of the Program Documents to which the Department is a party and compliance with the provisions hereof and thereof, will not conflict with or result in a violation of the Constitution of the State or the laws of the State, including any debt limitations or other restrictions or conditions on the debt issuing power of the Department, and will not conflict with or result in a violation of, or breach of, or constitute a default under, any law (including, without limitation, Regulations T, U or X of the FRB, or any successor regulations), judgment, order, decree or administrative regulation or any of the terms, conditions or provisions of the Charter or any ordinance, judgment, decree, contract, loan agreement, note, bond, resolution, indenture, mortgage, deed of trust or other agreement or instrument to which the Department is a party or by which it or any property of the Department is bound and will not, (i) except as expressly provided herein, result in the imposition or creation of any lien, charge, or encumbrance upon or invalidate or adversely affect in any way the Subordinate Pledged Revenues or (ii) materially and adversely affect the ability of the Department to perform

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its obligations hereunder or under the Program Documents or the rights, security, interest or remedies available to the Bank under this Agreement or the other Program Documents. The Department has not received any notice, not subsequently withdrawn, given in accordance with the remedy provisions of any bond resolution or ordinance, trust indenture, guarantee or agreement or State law pertaining to bonds or notes secured by the Subordinate Pledged Revenues, of any default or event of default of the Department which has not been cured, remedied or waived.

Section 5.06. Compliance. The current collection of Pledged Revenues and the management of LAX and the accounting and recordkeeping therefor are in material compliance with all applicable state and federal laws and all applicable resolutions, ordinances and rules of the Department. The Department is in compliance with the terms and conditions of each of the Program Documents to which it is a party, and no breach of the terms hereof or thereof has occurred and is continuing, and no Default or Event of Default has occurred and is continuing. The Department is in compliance with the insurance requirements in the Senior Lien Trust Indenture. The Department is in material compliance with all laws, ordinances, orders, writs, injunctions, decrees, rules and regulations applicable to it (including, without limitation, ERISA and all applicable federal, state or local environmental, health and safety statutes and regulations, and the City’s investment policy guidelines), except to the extent noncompliance could not reasonably be expected to have a Material Adverse Effect.

Section 5.07. No Default. No default by the Department has occurred and is continuing in the payment of the principal of or premium, if any, or interest on any Debt issued by or on behalf of the Department and payable from and/or secured by a pledge of and lien on the Subordinate Pledged Revenues. No bankruptcy, insolvency or other similar proceedings pertaining to the Department or any agency or instrumentality of the Department are pending or presently contemplated. No Default or Event of Default has occurred and is continuing hereunder. No “default” or “event of default” under, and as defined in any of the other Program Documents has occurred and is continuing. The Department is not presently in default under any material agreement to which it is a party which could reasonably be expected to have a Material Adverse Effect. The Department is not in violation of any material term of the Charter applicable to the Department or any material term of any bond indenture or agreement to which it is a party or by which any of its property or assets is bound which could reasonably be expected to have a Material Adverse Effect.

Section 5.08. No Public Vote or Referendum. To the best knowledge of the Department, there is no public vote or referendum pending, proposed or concluded, the results of which could in any way have a Material Adverse Effect.

Section 5.09. No Immunity. Under existing law, the Department is not entitled to raise the defense of immunity from liability or suit in connection with any legal proceedings to enforce or collect upon this Agreement, the Fee Letter or the transactions contemplated hereby or thereby, including the payment of the Obligations; provided, however, that the procedural requirements applicable to commencing an action against the Department differ from those provisions and requirements applicable to individuals and nongovernmental entities.

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Section 5.10. Litigation. There is no action, suit or proceeding pending in any court, any other governmental authority with jurisdiction over the Department or LAX or any arbitration in which service of process has been completed against the Department or LAX or, to the knowledge of the Department, any other action, suit or proceeding pending or threatened in any court, any other governmental authority with jurisdiction over the Department or LAX or any arbitrator, in either case against the Department or LAX or any of their respective properties or revenues, or any of the Program Documents to which it is a party, which if determined adversely to the Department would adversely affect the legality, validity or enforceability of the any of the Program Documents to which it is a party, or the rights and remedies of the Bank under any of the Program Documents or which is reasonably likely to have a Material Adverse Effect, except any action, suit or proceeding which has been brought prior to the Closing Date as to which the Bank have received an opinion of counsel satisfactory to the Bank, in form and substance satisfactory to the Bank and the Bank’s Counsel, to the effect that such action, suit or proceeding is without substantial merit.

Section 5.11. Disclosure. To the best knowledge of the Department, neither the Program Documents to which the Department is a party, the Offering Memorandum nor any other document, certificate or statements of the Department (including the unaudited financial statements, reports, budgets, projections and cash flows of the Department with respect to LAX furnished to the Bank by or on behalf of the Department in connection with the transactions contemplated hereby or thereby) contains any untrue statement of any material fact.

Section 5.12. Financial Information. (a) As of the Closing Date, the Department has delivered to the Bank a copy of the audited financial statements for the Department with respect to LAX for the Fiscal Year ended June 30, 2019. Such audited financial statements together with related notes, fairly present the financial position and results of operation of the Department with respect to LAX as of the date and for the periods therein set forth. All such financial statements have been prepared in accordance with GAAP. As of the Closing Date, there has been no material adverse change in the financial position, results of operations or projections of revenues of the Department with respect to LAX since June 30, 2019, except as disclosed in writing to the Bank prior to the Closing Date, or otherwise disclosed in the Offering Memorandum. The Department has no material contingent liabilities or other material contracts or commitments payable from Subordinate Pledged Revenues which are not reflected in such financial statements previously delivered to the Bank or in the notes thereto or otherwise as disclosed to the Bank in writing.

(b) Subsequent to the Closing Date the audited financial statements for the Department with respect to LAX delivered to the Bank pursuant to Section 6.02(a) hereof, with related notes, fairly present the financial position and results of operation of the Department with respect to LAX as of the date and for the periods therein set forth. All such financial statements have been prepared in accordance with GAAP. The Department has no material contingent liabilities or other material contracts or commitments payable from Subordinate Pledged Revenues which are not reflected in such financial statements delivered to the Bank or in the notes thereto or otherwise as disclosed to the Bank in writing.

Section 5.13. Official Signatures. The Authorized Representative, on behalf of the Department, has and had full power and authority to execute, deliver and perform under each of the Program Documents to which the Department is a party. Any agreement, certificate or request

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signed by or on behalf of any Authorized Representative of the Department and delivered to a Dealer, the Trustee or the Bank shall be deemed a representation and warranty by the Department to the Bank as to the truth, accuracy and completeness of the statements made by the Department therein.

Section 5.14. Incorporation of Representations and Warranties by Reference. The Department hereby makes to the Bank the same representations and warranties made by the Department in each Program Document to which the Department is a party, which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference for the benefit of the Bank with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety. Except as permitted by Section 6.15 hereof, no amendment to such representations and warranties or defined terms made pursuant to any Program Document shall be effective to amend such representations and warranties and defined terms as incorporated by reference herein without the prior written consent of the Bank.

Section 5.15. Environmental Matters. To the best knowledge of the Department, the operations of LAX are in material compliance with all of the requirements of applicable federal, state and local environmental, health and safety statutes and regulations and are not the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, where a failure to comply with any such requirement or the need for any such remedial action would have a Material Adverse Effect.

Section 5.16. Security. The Master Subordinate Trust Indenture creates, for the benefit of the owners of the Commercial Paper Notes and, with respect to the Bank Note and the Obligations, the Bank, the legally valid, binding and irrevocable lien on and pledge of the Subordinate Pledged Revenues. There is no lien on the Subordinate Pledged Revenues other than the lien created by the Master Subordinate Trust Indenture. The Master Subordinate Trust Indenture does not permit the issuance or incurrence of any Debt secured by the Subordinate Pledged Revenues to rank senior to the Commercial Paper Notes, the Bank Note or the Obligations. The payment of the Obligations ranks on a parity with the payment of the principal and purchase price of and interest on the Subordinate Obligations and is not subordinate to any payment secured by a lien on the Subordinate Pledged Revenues or any other claim, and is prior as against all other Persons having claims of any kind in tort, contract or otherwise, whether or not such Persons have notice of such lien. No filing, registration, recording or publication of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other instrument is required to establish the pledge provided for thereunder or to perfect, protect or maintain the lien created thereby on the Subordinate Pledged Revenues to secure the Commercial Paper Notes and the Obligations. The Letter of Credit constitutes a “Credit Facility” under the Master Subordinate Trust Indenture. All Obligations constitute “Subordinate Obligations” under the Master Subordinate Trust Indenture and “Payment Obligations” under the Seventh Supplemental Subordinate Trust Indenture. All Obligations constitute “Repayment Obligations” under the Master Subordinate Trust Indenture.

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Section 5.17. Investment Company Act. The Department is not an “investment company” or a company “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

Section 5.18. Employee Benefit Plan Compliance. The Department has no funding liability or obligation currently due and payable with respect to any employee benefit plan which could reasonably be expected to materially and adversely affect the ability of the Department to perform its obligations hereunder or under any other Program Document. The Department is otherwise in compliance with the terms of any such plan in which the Department participates to the extent any such failure to comply could reasonably be expected to materially and adversely affect the ability of the Department to perform its obligations hereunder or under any other Program Document. Neither the Department nor any employee benefit plan maintained by the Department is subject to ERISA. The Department is not subject to ERISA and maintains no Plans.

Section 5.19. Pending Legislation and Decisions. There is no amendment, or to the knowledge of the Department, proposed amendment to the Constitution of the State or any State law or any administrative interpretation of the Constitution of the State or any State law, or any legislation that has passed either house of the legislature of the State, or any judicial decision interpreting any of the foregoing, the effect of which will materially adversely affect the issuance of any of the Commercial Paper Notes, the security for any of the Commercial Paper Notes, the Bank Note, any Obligations or the Department’s obligations hereunder or under any of the Program Documents, the creation, organization, or existence of the Department or the titles to office of any officers executing this Agreement or any Program Documents to which the Department is a party or the Department’s ability to repay when due its obligations under this Agreement, any of the Commercial Paper Notes, the Bank Note, any Obligations or the Program Documents.

Section 5.20. Usury. There is no limitation under California law on the rate of interest payable by the Department with respect to the Bank Note or the Obligations or with respect to the Department’s obligations to the Bank hereunder or under the Fee Letter.

Section 5.21. Margin Regulations. No portion of the proceeds of any Drawings under the Letter of Credit or Advances hereunder shall be used by the Department (or the Trustee or any other Person on behalf of the Department) for the purpose of “purchasing” or “carrying” any margin stock or used in any manner which might cause the borrowing or the application of such proceeds to violate Regulation G, Regulation U or X of the Board of Governors of the Federal Reserve System or any other regulation of the Department or to violate the Securities Exchange Act of 1934, as amended, in each case as in effect on the date or dates of such Drawings or Advances and such use of proceeds.

Section 5.22. No Incorporation of Waiver of Jury Trial and Judicial Reference in any Bank Agreements. The Department has not waived any right to a trial by jury in any action, suit or proceeding arising under or relating to any Bank Agreement, or consented to the adjudication of any action, suit or proceeding arising under or relating to any Bank Agreement pursuant to judicial reference as provided in California Code of Civil Procedure Section 638.

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Section 5.23. Trustee; Dealer. U.S. Bank National Association is the duly appointed and acting Trustee and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, Samuel A. Ramirez & Co., Inc. and Wells Fargo Bank, National Association are the duly appointed and acting Dealers.

Section 5.24. Tax Status of Interest on Tax-Exempt Commercial Paper Notes. It is the intention of the Department and the Bank that the interest on the Tax-Exempt Commercial Paper Notes (except for interest on any Private Activity Note for any period during which such Private Activity Note is held by a “substantial user” of the facilities financed or refinanced by the Private Activity Notes or a “related person” within the meaning of the Code) be excluded from the gross income of the owners thereof for federal income tax purposes by reason of the provisions of Section 103 of the Code, or any substantially similar successor provision hereafter enacted. To that end, the Department represents to the Bank that it has not taken any action, and knows of no action that any other Person has taken, which would cause interest on such Tax-Exempt Commercial Paper Notes (except for interest on any Private Activity Note for any period during which such Private Activity Note is held by a “substantial user” of the facilities financed or refinanced by the Private Activity Notes or a “related person” within the meaning of the Code) to be includable in the gross income of the recipients thereof for federal income tax purposes.

Section 5.25. OFAC. The Department is not in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Patriot Act;

(i) The Department is not any of the following:

(A) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(B) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(C) a Person with which the Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti Terrorism Law;

(D) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or

(E) a Person that is named as a “specially designated national and blocked person” on the most current list published by the Office of Foreign Asset Control (“OFAC”) or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publication of such list;

(ii) To the best knowledge of the Department, the Department does not (1) conduct any business or engage in making or receiving any contribution of funds, goods or

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services to or for the benefit of any Person described in subsection (i)(A) above, (2) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (3) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti Terrorism Law.

Section 5.26. No Set-off Provisions. The Department has not (i) granted any right of set-off under or relating to any Bank Agreement or (ii) entered into, or otherwise consented to any Bank Agreement, which Bank Agreement fails to prohibit the exercise of the related Provider’s statutory or common law rights of setoff.

ARTICLE VI

COVENANTS

The Department will do the following so long as any amounts may be drawn under the Letter of Credit or any Obligations remain outstanding under this Agreement and/or the Fee Letter, unless the Bank shall otherwise consent in writing:

Section 6.01. Maintenance of Existence. To the fullest extent permitted by law, the Department, with respect to LAX (a) shall maintain its existence pursuant to the Charter and the laws of the State and at all times maintain its ownership of LAX and (b) shall not liquidate or dissolve, or sell or lease or otherwise transfer or dispose of all or any substantial part of its property, assets or business, or combine, merge or consolidate with or into any other entity or change the use of facilities or assets that generate Pledged Revenues.

Section 6.02. Reports, Certificates and Other Information. The Department shall furnish or cause to be furnished to the Bank copies of:

(a) Annual Report. As soon as available, but no later than two hundred and forty (240) days after the end of the Fiscal Year, the annual audited financial statements for the Department with respect to LAX together with (1) the opinion of the Department’s independent accountants and (2) a certificate signed by the Executive Director or any other officer of the Department (x) demonstrating compliance with Section 6.07 hereof and (y) stating that no Event of Default or Default has occurred, or if such Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default.

(b) Unaudited Quarterly Financials. At any time that any of Moody’s, Fitch or S&P shall have downgraded its rating of any (i) Senior Lien Revenue Bonds below “[___]” (or its equivalent), “[___]” (or its equivalent) or “[___]” (or its equivalent), respectively, or (ii) Subordinate Obligations below “[___]” (or its equivalent), “[___]” (or its equivalent) or “[___]” (or its equivalent), respectively, as soon as available, and in any event within sixty (60) days after each of the first three quarters of each Fiscal Year of the

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Department, the unaudited financial statements of the Department with respect to LAX, including the balance sheet as of the end of such quarter and a statement of income and expenses, all in reasonable detail and certified, subject to year-end adjustment, by the Chief Financial Officer or any other officer of the Department.

(c) Budget. As soon as available, but in any event within 30 days following the approval thereof, the Airport Budget (including the provisions of the Annual Budget with respect to annual appropriations).

(d) Trustee Notices. As soon as available all notices, certificates, instruments, letters and written commitments in connection with the Commercial Paper Notes provided to the Trustee other than those notices, certificates, instruments, letters and written commitments that relate solely to the routine issuance and payment of the Commercial Paper Notes.

(e) Notices of Resignation of the Trustee and Dealer. As promptly as practicable, written notice to the Bank of any resignation of any Trustee or Dealer immediately upon receiving notice of the same.

(f) Offering Memorandum and Material Event Notices. (A) Within ten (10) days after the issuance of any securities by the Department with respect to which a final official statement or other offering or disclosure document has been prepared by the Department, (1) provide the Bank with a copy of such official statement or offering circular or (2) provide the Bank with notice that such information has been filed with EMMA and is publicly available; and (B) during any period of time the Department is subject to continuing disclosure requirements under Rule 15c2-12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any successor or similar legal requirement, immediately following any dissemination, distribution or provision thereof to any Person, (1) provide the Bank with a copy of any reportable event notice (as described in b(5)(i)(C) of Rule 15c2-12) disseminated, distributed or provided in satisfaction of or as may be required pursuant to such requirements or (2) provide the Bank with notice that such event notice has been filed with EMMA and is publicly available.

(g) Notice of Default, Event of Default or Adverse Change. (i) Promptly upon obtaining knowledge of any Default or Event of Default, or notice thereof, and within five days thereafter, a certificate signed by an Authorized Representative specifying in reasonable detail the nature and period of existence thereof and what action the Department has taken or proposes to take with respect thereto; (ii) promptly following a written request of the Bank, a certificate of an Authorized Representative as to the existence or absence, as the case may be, of a Default or an Event of Default under this Agreement; and (iii) promptly upon obtaining knowledge of any “default” or “event of default” as defined under any Bank Agreement, notice specifying in reasonable detail the nature and period of existence thereof and what action the Department has taken or proposes to take with respect thereto.

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(h) Litigation. As promptly as practicable, written notice to the Bank of all litigation served against the Department and all proceedings before any court or governmental authority which could reasonably be expected to have a Material Adverse Effect.

(i) Additional Debt. Within ten (10) days after the date of issuance and delivery of any additional Debt payable from and/or secured by Subordinate Pledged Revenues, a copy of any certificate or materials required to be provided pursuant to Section 6.13 hereof.

(j) Note Proceeds Used for Payment of Maintenance and Operation Expenses. Promptly, and in any event within ten (10) days of such use, written notice to the Bank of the use of any proceeds from the sale of the Commercial Paper Notes by the Department for the payment of Maintenance and Operation Expenses of the Airport System.

(k) Other Information. Such other information regarding the business affairs, financial condition and/or operations of the Department with respect to LAX as the Bank may from time to time reasonably request.

The Department will permit the Bank to disclose the information described in this Section 6.02 to any Participants.

Section 6.03. Maintenance of Books and Records. The Department will keep, and cause LAX to keep, proper books of record and account in which full, true and correct entries in accordance with the Department’s and LAX’s budget basis accounting principles and reporting practices will be made of all dealings or transactions in relation to its activities. All financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the financial statements, except as otherwise specifically prescribed herein. Except as provided in the immediately preceding sentence, in preparing any financial data or statements contemplated or referred to in this Agreement, the Department shall not vary or modify the accounting methods or principles from the accounting standards employed in the preparation of its audited financial statements described in Section 5.12 hereof.

Section 6.04. Access to Books and Records. To the extent permitted by law, the Department will permit any Person designated by the Bank (at the expense of the Bank, unless and until a Default or Event of Default has occurred, at which time it shall be at the expense of the Department) to visit any of the offices of the Department to examine the books and financial records (except books and financial records the examination of which by the Bank is prohibited by law or by attorney/client privilege), including minutes of meetings of any relevant governmental committees or agencies, and make copies thereof or extracts therefrom, and to discuss the affairs, finances and accounts of the Department with respect to LAX with their principal officials, all at such reasonable times and as often as the Bank may reasonably request.

Section 6.05. Compliance With Documents. The Department agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by

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it in the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture and each of the other Program Documents to which it is a party, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the Bank and shall be enforceable against the Department. To the extent that any such incorporated provision permits the Department, the holders of one or more Commercial Paper Notes or any other party to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condition be acceptable or satisfactory to the Department, the holders of one or more Commercial Paper Notes or any other party, for purposes of this Agreement, such provision shall be complied with unless it is specifically waived by the Bank in writing and such document, opinion or other instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Bank which shall only be evidenced by the written approval by the Bank of the same. Except as permitted by Section 6.15 hereof, no termination or amendment to such covenants and agreements or defined terms or release of the Department with respect thereto made pursuant to the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or any of the other Program Documents to which the Department is a party, shall be effective to terminate or amend such covenants and agreements and defined terms or release the Department with respect thereto in each case as incorporated by reference herein without the prior written consent of the Bank. Notwithstanding any termination or expiration of the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or any such other Program Document to which the Department is a party, the Department shall, unless the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or such other Program Document, as applicable, has terminated in accordance with its terms and has been replaced by a new Senior Lien Trust Indenture, Master Subordinate Trust Indenture or Program Document, as applicable, continue to observe the covenants therein contained for the benefit of the Bank until the termination of this Agreement. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein.

Section 6.06. Compliance With Law. The Department shall comply with and observe the obligations and requirements set forth in the Constitution of the State and in all statutes and regulations binding upon it relating to LAX, the Senior Lien Trust Indenture and the Program Documents to which the Department is a party.

Section 6.07. Rate Covenant. The Department covenants and agrees that it shall take any and all action necessary such that Pledged Revenues, Net Pledged Revenues, and Subordinate Pledged Revenues in each Fiscal Year shall equal an amount at least sufficient to satisfy the respective provisions of Section 5.04 of the Senior Lien Trust Indenture and Section 5.04 of the Master Subordinate Trust Indenture.

Section 6.08. Further Assurances. From time to time hereafter, the Department will execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Bank may reasonably request for the purposes of implementing or effectuating the provisions of the Program Documents to which the Department is a party or for the purpose of more fully perfecting or renewing the rights of the Bank with respect to the rights, properties or

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assets subject to such documents (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by the Department which may be deemed to be a part thereof). Upon the exercise by the Bank of any power, right, privilege or remedy pursuant to the Program Documents to which the Department is a party which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the Department will, to the fullest extent permitted by law, execute and deliver all necessary applications, certifications, instruments and other documents and papers that the Bank may be required to obtain for such governmental consent, approval, registration, qualification or authorization. At any time, and from time to time, upon request by the Bank, the Department will, at the Department’s expense, correct any defect, error or omission which may be discovered in the form or content of any of the Program Documents to which the Department is a party or protect the Bank’s interests, security, rights and remedies with respect to the Subordinate Pledged Revenues or its security under the Master Subordinate Trust Indenture or hereunder. At all times, the Department will defend, preserve and protect the pledge of certain funds pursuant to the Master Subordinate Trust Indenture and all the rights of the Bank hereunder and under the Master Subordinate Trust Indenture against all claims and demands of all Persons whosoever.

Section 6.09. No Impairment. The Department will neither take any action, nor cause the Trustee or the Senior Lien Trustee to take any action, under the Senior Lien Trust Indenture or any Program Document which would materially adversely affect the rights, interests, remedies or security of the Bank under this Agreement or any other Program Document or which could result in a Material Adverse Effect.

Section 6.10. Application of Note Proceeds. (a) The Department will not take or omit to take any action, which action or omission will in any way result in the proceeds from the sale of the Commercial Paper Notes being applied in a manner other than as provided in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture.

(b) The Department agrees not to authorize, instruct or permit the Trustee to authenticate and deliver Commercial Paper Notes at any time when any Advance is outstanding unless the proceeds of the sale of such Commercial Paper Notes are to be applied on the sale date to repay either (i) such Advance (together with all accrued and unpaid interest thereon), or (ii) principal of and accrued interest on concurrently maturing Commercial Paper Notes.

Section 6.11. Application of Drawings. The Department will not take or omit to take any action, which action or omission will in any way result in the proceeds of the Drawings or the Advances being applied for any purpose other than to pay principal of and interest on Commercial Paper Notes on their respective maturity dates.

Section 6.12. Trustee and Dealers. The Department will not, without the prior written consent of the Bank, which consent shall not be unreasonably withheld, (a) remove, or seek to remove, the Trustee; or (b) appoint or consent to the appointment of any successor Trustee or Dealer thereto. The Department shall at all times maintain a Trustee pursuant to the terms of the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture that is acceptable to the Bank. The Department will at all times maintain a Dealer under the

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Seventh Supplemental Subordinate Trust Indenture and the Dealer Agreement that is acceptable to the Bank. The Department agrees to (x) issue Commercial Paper Notes and (y) cause the applicable Dealers (subject to the terms of the applicable Dealer Agreements) to use their best efforts to sell Commercial Paper Notes, in each case, up to the Maximum CP Rate applicable to the Commercial Paper Notes in order to repay maturing Commercial Paper Notes. If any Advance remains outstanding for a period of thirty (30) consecutive calendar days or any Dealer fails to sell Commercial Paper Notes, the proceeds of which are intended to be used to pay the Advance, after being directed to do so by the Department (subject to the provisions of the applicable Dealer Agreement) at the written direction of the Bank the Department shall cause the related Dealer (that has been unable to sell Commercial Paper Notes or fails to perform its duties) to be replaced with a Dealer satisfactory to the Bank within ninety (90) calendar days of the receipt of such written direction; provided that so long as the remaining Dealers for the Commercial Paper Notes are satisfactory to the Bank, it shall be sufficient for the Department only to remove the Dealer that has been unable to sell rollover Commercial Paper Notes or fails to perform its duties. Each Dealer Agreement shall provide that the related Dealer may not resign until the earlier of (a) the related Dealer providing at least sixty (60) days’ prior written notice to the Department, the Trustee and the Bank, and (b) provided the Department has decided to replace the related Dealer with a new dealer, the date on which a successor dealer has been appointed and accepted its appointment.

Section 6.13. Limitation on Additional Debt. The Department will not issue and/or incur any additional Debt payable from or secured by Subordinate Pledged Revenues, unless the Department provides the Bank with either of the certificates required pursuant to Section 2.11(a) or (b) of the Master Subordinate Trust Indenture, subject however, to the provisions of paragraphs (1), (2) or (3) of the last paragraph of Section 2.11 of the Master Subordinate Trust Indenture. On or prior to the date on which Debt secured by the Subordinate Pledged Revenues is to be issued or incurred, the Bank shall receive certification by an Authorized Representative of the Department as to compliance with all debt service coverage ratios that are required to be satisfied as a condition precedent to the issuance or incurrence of said Debt. Notwithstanding the foregoing, the Department will not issue and/or incur any additional Debt which is to be secured by Subordinate Pledged Revenues while any Advance is outstanding or any other Obligation remains unpaid unless all outstanding Advances and other unpaid Obligations are to be paid in full from the proceeds of such additional Debt or the Department receives the prior written consent of the Bank.

Section 6.14. Maintenance of Tax-Exempt Status of Commercial Paper Notes. The Department will not take any action or omit to take any action which, if taken or omitted, would adversely affect the exclusion of interest on any Commercial Paper Notes which are designated as Tax-Exempt Commercial Paper Notes (subject to the inclusion of any exception contained in the opinion delivered upon the original issuance of such Tax-Exempt Commercial Paper Notes, including, but not limited to, interest payable to a holder of any Private Activity Notes who is a “substantial user” or “related party” within the meaning of Section 147(a) of the Code) under the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture, from gross income for purposes of federal income taxation or the exemption of such interest from State of California personal income taxes; provided, however, that the failure to maintain the tax-exempt status of any Commercial Paper Notes which are designated as Tax-Exempt Commercial Paper Notes (referred to herein as “Adversely Affected Commercial Paper Notes”) shall not constitute an Event of Default hereunder so long as the Department issues taxable Commercial

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Paper Notes (i.e., the interest of which is taxable to the holders thereof) and applies the proceeds thereof to pay principal of and interest on the Adversely Affected Tax-Exempt Commercial Paper Notes on their respective maturity dates, and/or uses other available moneys (except proceeds of Tax-Exempt Commercial Paper Notes) of the Department to pay principal of and interest on the Adversely Affected Tax-Exempt Commercial Paper Notes on their respective maturity dates.

Section 6.15. Amendments to Senior Lien Trust Indenture and Program Documents. The Department will not amend or modify, or permit to be amended or modified in any manner whatsoever (i) Sections 2.09, 2.11, 4.01, 4.04 (excluding clauses Sixth through Ninth), 5.01, 5.03, 5.04, 5.06 or 5.12 of the Senior Lien Trust Indenture, or Sections 2.09, 2.11, 4.01, 5.01, 5.04 or 5.08 of the Master Subordinate Trust Indenture or the maximum rate applicable to the Commercial Paper Notes set forth in the Program Documents, in each case, without the prior written consent of the Bank nor shall it amend, modify or supplement any other provision of the Senior Lien Trust Indenture (other than those set forth above) or the Master Subordinate Trust Indenture (other than those set forth above) in a manner which would have a Material Adverse Effect or adversely affect the Department’s ability to repay Debt that is secured by Net Pledged Revenues or Subordinate Pledged Revenues or which adversely affects the security for the Commercial Paper Notes or the Bank Note or the Department’s ability to repay when due the Obligations or the interests, security, rights or remedies of the Bank under the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the other Program Documents or hereunder; or (ii) any Program Document (except the Master Subordinate Trust Indenture (other than as set forth in clause (i) above)) without the prior written consent of the Bank. In addition to, and not in lieu or limitation of, the foregoing, the Department will not amend or modify, or permit to be amended or modified in any manner whatsoever any provision of the Senior Lien Trust Indenture or the Master Subordinate Trust Indenture the amendment or modification of which requires the consent of any Bondholder (as defined in the Senior Lien Trust Indenture) or Holder (as defined in the Master Subordinate Trust Indenture), in each case, without the prior written consent of the Bank.

Section 6.16. Ratings. (a) The Department covenants and agrees that it shall at all times maintain (i) at least two unenhanced long-term ratings from any of Fitch, Moody’s or S&P on its Senior Lien Revenue Bonds and its Subordinate Obligations (other than the Commercial Paper Notes and the Bank Note) and (ii) at least one short-term rating on the Commercial Paper Notes by any Rating Agency (provided that a withdrawal of any short-term ratings on the Commercial Paper Notes that is solely and directly due to an action or inaction on the part of the Bank shall not, in and of itself, constitute a violation of this Section 6.16(ii)). The Department covenants and agrees that it shall not at any time withdraw any long-term unenhanced rating on either its Senior Lien Revenue Bonds or its Subordinate Obligations (other than the Commercial Paper Notes and the Bank Note) from any of Fitch, Moody’s or S&P if the effect of such withdrawal would be to cure a Default or an Event of Default under this Agreement.

(b) The Department covenants and agrees that it shall maintain at least one long-term rating of at least Investment Grade for the Bank Note from any Rating Agency.

Section 6.17. Liens. The Department shall not, directly or indirectly, incur, create or permit to exist any Lien on all or any part of the security provided by the Senior Lien Trust Indenture and the Master Subordinate Trust Indenture that is senior to or on a parity with the Lien created by the

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Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture for the benefit of the Commercial Paper Notes and the Obligations, other than (i) Liens created under and in accordance with the terms of the Senior Lien Trust Indenture and the Master Subordinate Trust Indenture, respectively; (ii) the Liens created for the benefit of the Commercial Paper Notes, the Obligations, the Senior Lien Revenue Bonds, the Subordinated Obligations, the Subordinate Obligations and reimbursement obligations owed to the provider of credit enhancement supporting Senior Lien Revenue Bonds, Subordinated Obligations or Subordinate Obligations that have heretofore or may hereafter be issued; and (iii) Liens which could not reasonably be expected to materially adversely affect the interests, rights, remedies or security of the Bank under this Agreement and the Bank Note..

Section 6.18. Book-Entry Eligibility. The Department covenants that at all times from and including the Closing Date until and including the Letter of Credit Expiration Date, the Department shall cause the Commercial Paper Notes to be eligible for, and to be registered with, DTC’s book-entry delivery services and that such registration with DTC shall not be discontinued without the Bank’s prior written consent.

Section 6.19. Substitute Credit Facility or Refinancing.

(a) The Department agrees to use its best efforts to obtain a substitute Credit Facility to replace the Letter of Credit or otherwise refinance, redeem or defease the Commercial Paper Notes in the event (i) the Bank decides not to extend the Letter of Credit Expiration Date or if the Department fails to request such an extension (such replacement, refinancing, redemption or defeasance to occur on or before the Letter of Credit Expiration Date), (ii) the Letter of Credit is terminated or (iii) the Department terminates this Agreement in accordance with the terms hereof.

(b) The Department agrees that any substitute Credit Facility will require, as a condition to the effectiveness of the substitute Credit Facility, that the provider of substitute Credit Facility provide funds to the extent necessary, on the date the substitute Credit Facility becomes effective, for payment of all Reimbursement Obligations at par plus interest (at the applicable rate pursuant to the terms hereof) through the date repaid. On the effective date of such substitute Credit Facility or refinancing, redemption or defeasance, as the case may be, the Department shall pay in full all other amounts due under this Agreement, the Fee Letter and the Bank Note (including, without limitation, all Excess Interest and unpaid interest thereon) and the Department shall provide for the surrender (and cancellation) of the Letter of Credit to the Bank.

(c) The Department shall not permit a substitute Credit Facility to become effective with respect to less than all of the Commercial Paper Notes of a Subseries without the prior written consent of the Bank.

Section 6.20. Incorporation of Waiver of Jury Trial and Judicial Reference from Bank Agreements. In the event that the Department has or shall enter into, or otherwise consent to any Bank Agreement which (i) provides that the Department waives any right to a trial by jury in any action, suit or proceeding arising under or relating to such Bank Agreement, or (ii) provides that

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the Department consents to the adjudication of any action, suit or proceeding arising under or relating to such Bank Agreement pursuant to judicial reference as provided in California Code of Civil Procedure Section 638, this Agreement shall be deemed to be amended to include a substantially similar provision for the benefit of the Bank (any such provision described in (i) or (ii) referred to herein as a “Section 6.20 Bank Agreement Provision”). The Department shall promptly notify the Bank of any Bank Agreement which it enters into with any other Person which contains a Section 6.20 Bank Agreement Provision, and the Department shall promptly, and in any event within fifteen (15) Business Days after the effective date of such Bank Agreement provide the Bank with a copy of such Bank Agreement. To evidence the foregoing, upon the reasonable request of the Bank, the Department shall enter into an amendment to this Agreement within sixty (60) days after a request by the Bank to document any Section 6.20 Bank Agreement Provision deemed to be added to this Agreement pursuant to this Section. Notwithstanding the foregoing, that the Bank shall automatically maintain the benefit of any Section 6.20 Bank Agreement Provision, even if the Department fails to provide the Bank with a copy of such Bank Agreement containing the Section 6.20 Bank Agreement Provision or fails to enter into any such amendment to this Agreement with the Bank.

Section 6.21. Immunity from Jurisdiction. To the fullest extent permitted by law, the Department will not assert any immunity it may have as a public entity under the laws of the State of California from lawsuits with respect to this Agreement, the Fee Letter or any other Program Document. Any such suits shall be subject to all substantive and procedural requirements of California law, including California Government Code, Title 1 Division 3.6 and the Charter. However, this provision shall not be construed as a waiver of any immunity applicable to any action brought against an employee of the Department or of the City (including any employee of the city attorney’s office).

Section 6.22. Swap Contracts. The Department will not enter into any Swap Contract relating to Debt (i) wherein any termination payments thereunder are senior to or on parity with the payment of the Commercial Paper Notes or any Reimbursement Obligations or (ii) which requires the Department to post collateral to secure its obligations thereunder (other than a Lien on Pledged Revenues and except to the extent required by any law or regulation not in effect on the Closing Date), in each case, without the prior written consent of the Bank.

Section 6.23. Budget and Appropriation. To the fullest extent permitted and/or required by California law, the Department shall cause the appropriate Department official(s) to take any and all ministerial actions that may be necessary to facilitate the payment of all obligations under this Agreement, the Fee Letter and the Bank Note and to include such obligations in the annual budget with respect to LAX (including any necessary appropriations related thereto).

Section 6.24. Use of Bank’s Name. The Department shall not include in an offering document for the Commercial Paper Notes any information concerning the Bank (other than identifying the Bank as a party to this Agreement and the issuer of the Letter of Credit) that is not supplied in writing, or otherwise consented to in writing, by the Bank expressly for inclusion therein. Except as may be required by law (including, but limited to, federal and state securities laws), the Department shall not use the Bank’s name in any published materials (other than the Department’s staff reports, annual statements, audited financial statements, rating agency

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presentations) without the prior written consent of the Bank (which consent shall not be unreasonably withheld); provided that, without the prior written consent of the Bank, the Department may identify the Bank as a party to this Agreement and as the issuer of the Letter of Credit, the stated amount of the Letter of Credit, the expiration date of the Letter of Credit and that the Department’s obligations under this Agreement are secured by Subordinate Pledged Revenues, in offering documents with respect to the Senior Lien Revenue Bonds and the Subordinate Obligations, so long as no other information relating to the Agreement, the Fee Letter or the Bank is disclosed in such offering documents without the prior written consent of the Bank.

From time to time, the Department expects to publish offering documents with respect to the Commercial Paper Notes, that will require the Department to include therein certain information about the Bank. At the reasonable request of the Department, the Bank will provide the Department with updated information about the Bank of the type included in Appendix A to the Offering Memorandum under the caption [“___________________”] in the Offering Memorandum for inclusion in such offering documents.

Section 6.25. Set-off Provisions in Other Documents. The Department shall not, directly or indirectly, enter into or otherwise consent to any Bank Agreement, which such Bank Agreement (i) provides the counterparty thereto with any right of set-off or (ii) fails to restrict such counterparty’s statutory or common law right of setoff, in each case, without the prior written consent of the Bank. Notwithstanding the foregoing sentence, in the event that the Department directly or indirectly, enters into or otherwise consents to any Bank Agreement which (x) includes the right of set-off or (y) fails to prohibit the exercise of the related Provider’s statutory or common law rights of setoff, then the Bank shall have, as a remedy under Section 7.02 hereof, the right to exercise any set-off with respect to any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies at any time held and other Debt at any time owing by the Bank to or for the account of the Department and constituting Pledged Revenues (irrespective of the currency in which such accounts, monies or Debt may be denominated and the Bank are authorized to convert such accounts, monies and Debt into U.S. dollars) against any and all of the obligations of the Department under this Agreement, the Fee Letter and the Bank Note, whether or not the Bank shall have made any demand with respect thereto.

Section 6.26. Sanctions. The Department will not directly or indirectly, use any proceeds of the Commercial Paper Notes, or lend, contribute or otherwise make available such proceeds to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person of Sanctions.

Section 6.27. Anti-Corruption Laws. The Department will not directly or indirectly, use any proceeds of the Commercial Paper Notes for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions.

Section 6.28. No Preferential Treatment. In the event that the Department shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement which Bank Agreement includes the right, upon the occurrence of an “event of default” or “event of termination” under such Bank

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Agreement, to accelerate the payment of the principal of or interest on any Secured Debt or to otherwise cause the principal of and interest on any Secured Debt to become immediately due and payable, then the Bank shall have the right, upon the occurrence of an Event of Default, to declare all Obligations payable hereunder to be, and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Department; provided that upon the occurrence of an Event of Default under Section 7.01(i) hereof, such prepayment obligation or acceleration shall automatically become due and payable or automatically occur, as applicable, and without any notice.

ARTICLE VII

DEFAULTS

Section 7.01. Events of Default and Remedies. If any of the following events shall occur, each such event shall be an “Event of Default”:

(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing or any Advance, (ii) any Letter of Credit Fee within ten (10) calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (other than the Obligations described in clause (i) or (ii) of this Section 7.01(a)) within ten (10) calendar days of the date such Obligation is due; provided that, for the avoidance of doubt, no written notice from the Bank shall be required for any such failure to constitute an “Event of Default” hereunder;

(b) any representation, warranty or statement made by or on behalf of the Department herein or in any Program Document to which the Department is a party or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made;

or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to the Bank by or on behalf of the Department in connection with the transactions contemplated hereby(the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to the Bank it is discovered by the Department or the Bank that such Department Information contained an inaccuracy, such inaccuracy shall not be considered an Event of Default if (i) at the time the Department furnished such Department Information to the Bank, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five (5) calendar days of the Department receiving notice of such discovery of the inaccuracy it provides the Bank with corrected Department Information;

(c) (i) the Department fails to perform or observe any term, covenant or agreement contained in Sections 6.01, 6.07, 6.09, 6.10(b), 6.11, 6.12, 6.13, 6.14, 6.15, 6.16,

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6.17, 6.19(b), 6.19(c), 6.21 and 6.22 hereof; or (ii) the Department fails to perform or observe any other term, covenant or agreement contained in this Agreement (other than those referred to in Sections 7.01(a) and 7.01(c)(i)) and any such failure cannot be cured or, if curable, remains uncured for sixty (60) days after the earlier of (A) written notice thereof to the Department or (B) an Authorized Representative having actual knowledge thereof;

(d) the Department shall (i) default in any payment of any Debt, (other than the Commercial Paper Notes, the Drawings or the Advances) secured by a charge, lien or encumbrance on the Net Pledged Revenues or the Subordinate Pledged Revenues with a lien on, pledge of, security interest in or priority of payment from the Net Pledged Revenues or the Subordinate Pledged Revenues that is senior to, or on a parity with, the Commercial Paper Notes, the Drawings or the Advances, including, without limitation, Senior Lien Revenue Bonds, Subordinate Obligations and Subordinated Obligations (“Secured Debt”), beyond the period of grace, if any, provided in the instrument or agreement under which such Secured Debt was created; or (ii) default in the observance or performance of any agreement or condition relating to any Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Secured Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Secured Debt to become due prior to its stated maturity (whether by acceleration, redemption, mandatory tender or otherwise);

(e) (i) a court or other Governmental Authority with jurisdiction to rule on the validity of this Agreement, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other Program Document to which the Department is a party shall find, announce or rule that (A) any material provision of this Agreement or any other Program Document to which the Department is a party; or (B) any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the rights and remedies of the Bank, is not a valid and binding agreement of the Department or; (ii) the Department shall contest the validity or enforceability of this Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies of the Bank or the pledge of, lien on or security interest in the Subordinate Pledged Revenues, or shall seek an adjudication that this Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies

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of the Bank, is not valid and binding on the Department or the Department shall repudiate its obligations under this Agreement or any other Program Document; or (iii) the validity, effectiveness or enforceability of the pledge of, lien on or security interest in the Subordinate Pledged Revenues granted to the Commercial Paper Notes under the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture and the Obligations hereunder and under the Fee Letter and the Bank Note shall at any time for any reason cease to be valid, effective or binding as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or shall be declared, in a final non-appealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable;

(f) (A) any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies of the Bank shall at any time for any reason cease to be in full force or effect, (B) any Program Document to which the Department is a party, except for any Dealer Agreement which has been terminated due to a substitution of a Dealer, or any material provision of any of the foregoing documents, shall at any time for any reason cease to be in full force or effect, or (C) the Department or any Person acting by or on behalf of the Department shall deny or disaffirm the Department’s obligations under the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture or any other Program Document to which the Department is a party;

(g) a final judgment or order for the payment of money in excess of $25,000,000 (in excess of the amount of proceeds of applicable insurance actually paid in satisfaction of such judgment) shall have been rendered against the Department and such judgment or order shall not have been satisfied, stayed, vacated, discharged or bonded pending appeal within a period of ninety (90) days from the date on which it was first so rendered;

(h) (i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (including, without limitation, amounts due under any Bank Agreement) secured by a lien, charge or encumbrance upon the Subordinate Pledged Revenues; (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the Department seeks to have an order for relief entered with respect to it or LAX or seeking to adjudicate it or LAX insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, termination, composition or other relief with respect to it or LAX or its debts or those of LAX (or the existence of the Department or LAX is dissolved or terminated by any other means); (iii) the Department seeks appointment of a receiver, trustee, custodian or other similar official for itself or LAX or for any substantial part of the Department’s property, or the Department shall make a general assignment for the benefit of its creditors; (iv) there shall be commenced against the Department or LAX any case, proceeding or other action of a nature referred to in clause (ii) above and the same shall remain undismissed; (v) there

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shall be commenced against the Department or LAX any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal, within 60 days from the entry thereof; (vi) a financial control board, or its equivalent, shall be imposed upon the Department by a Governmental Authority; (vii) the Department takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) or (vi) above; or (viii) the Department or LAX shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;

(i) any of Fitch, Moody’s or S&P shall have downgraded its rating of any Subordinate Obligation below “BBB-” (or its equivalent), “Baa3” (or its equivalent), or “BBB-” (or its equivalent), respectively, or suspended or withdrawn its rating of the same for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency);

(j) any provision of the Charter relating to the Department is repealed, reenacted, amended or otherwise modified (including, without limitation, by legislative or judicial action but excluding any such action pursuant to Charter amendments approved by the voters prior to the date of this Agreement) or any other legislation is enacted, repealed, reenacted, amended or otherwise modified, and in the event of a repeal, reenactment, amendment, modification or enactment, such repeal, reenactment, amendment, modification or enactment, in the sole judgment of the Bank, has a material adverse effect on any right, interest, security or remedy of the Bank under this Agreement or the other Program Documents; or the Department’s existence as a department of the City under the Charter shall terminate;

(k) (i) any “event of default” shall have occurred and be continuing under any Program Document beyond the expiration of any applicable grace period or (ii) any “event of default” under any Bank Agreement with respect to any Secured Debt shall have occurred and be continuing beyond the expiration of any applicable grace period; or

(l) any funds or accounts or investments on deposit in, or otherwise to the credit of, any of the funds or accounts established pursuant to the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or the other Program Documents, that have been pledged to or a lien granted thereon to secure the Commercial Paper Notes, the Bank Note or the Obligations, shall become subject to any writ, judgment, warrant or attachment, execution or similar process which shall not have been vacated, discharged, or stayed or bonded pending appeal within fifteen (15) days from the entry thereof.

Section 7.02. Remedies. Upon the occurrence of any Event of Default, all Obligations shall bear interest at the Default Rate and the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:

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(a) by notice of the occurrence of any Event of Default to the Trustee (which notice shall constitute a “Tier One Stop Issuance Instruction” for purposes of the Seventh Supplemental Subordinate Trust Indenture) prohibit, until such time, if any, as the Bank shall withdraw (in writing) such notice, the issuance of additional Commercial Paper Notes, reduce the Stated Amount of the Letter of Credit to the amount of the then Outstanding Commercial Paper Notes supported by the Letter of Credit and interest payable thereon at maturity of such Commercial Paper Notes and/or terminate and/or permanently reduce such Stated Amount as the then Outstanding Commercial Paper Notes are paid;

(b) issue the Tier One Final Drawing Notice (the effect of which shall be to cause the Termination Date of the Letter of Credit to occur on the 15th day after the date of receipt thereof by the Trustee);

(c) pursue any rights and remedies it may have under the Program Documents, including, without limitation, pursuant to Section 6.25 hereof, if applicable; or

(d) pursue any other action available at law or in equity.

Section 7.03. Solely for the Benefit of Bank. The rights and remedies of the Bank specified herein are for the sole and exclusive benefit, use and protection of the Bank, and the Bank is entitled, but shall have no duty or obligation to the Department or any other Person or otherwise, to exercise or to refrain from exercising any right or remedy reserved to the Bank hereunder or under any of the other Program Documents.

Section 7.04. Discontinuance of Proceedings. In case the Bank shall proceed to invoke any right, remedy or recourse permitted hereunder or under the Program Documents and shall thereafter elect to discontinue or abandon the same for any reason, the Bank shall have the unqualified right so to do and, in such event, the Department and the Bank shall be restored to their former positions with respect to the Obligations, the Program Documents and otherwise, and the rights, remedies, recourse and powers of the Bank hereunder shall continue as if the same had never been invoked.

ARTICLE VIII

CITY PROVISIONS

Section 8.01. Nondiscrimination and Affirmative Action Program.

(a) Reserved.

(b) Non-Discrimination In Employment. To the extent the Bank is subject to and required by the hereinafter defined LA Admin Code, during the term of this Agreement, the Bank agrees and obligates itself in the performance of this Agreement not to discriminate against any employee or applicant for employment because of the employee’s or applicant’s race, religion, national

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origin, ancestry, sex, sexual orientation, age, physical handicap, marital status, domestic partner status, or medical condition. To the extent the Bank is subject to and required by the LA Admin Code, the Bank shall take affirmative action to insure that applicants for employment are treated, during the term of this Agreement, without regard to the aforementioned factors and shall comply with the affirmative action requirements of the Los Angeles Administrative Code (the “LA Admin Code”), Sections 10.8, et seq.

(c) Equal Employment Practices. To the extent required by the hereinafter defined Equal Employment Practices, if the total payments made under this Agreement are One Thousand Dollars ($1,000) or more, this provision shall apply. To the extent the Bank is subject to and required by the Equal Employment Practices, during the performance of this Agreement, the Bank agrees to comply with Section 10.8.3 of the LA Admin Code (“Equal Employment Practices”), which is incorporated herein by this reference to the extent required by the Equal Employment Practices. A copy of Section 10.8.3 of the LA Admin Code in effect on the Closing Date has been attached to this Agreement for the convenience of the parties as Exhibit D hereto. By way of specification but not limitation, pursuant to Sections 10.8.3.E and 10.8.3.F of the LA Admin Code, the failure of the Bank to comply with the Equal Employment Practices provisions of this Agreement could be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except pursuant to the Equal Employment Practices and upon a full and fair hearing after notice and an opportunity to be heard have been given to the Bank. Upon a finding duly made that the Bank has failed to comply with the Equal Employment Practices provisions of this Agreement, this Agreement could be forthwith terminated, cancelled, or suspended to the extent required by the Equal Employment Practices. Any such termination of this Agreement pursuant to the Equal Employment Practices shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.

(d) Affirmative Action Program. To the extent required by the hereinafter defined Affirmative Action Program, if the total payments made under this Agreement are One Hundred Thousand Dollars ($100,000) or more, this provision shall apply. To the extent the Bank is subject to and required by the Affirmative Action Program, during the performance of this Agreement, the Bank agrees to comply with Section 10.8.4 of the LA Admin Code (“Affirmative Action Program”), which is incorporated herein by this reference to the extent required by the Affirmative Action Program. A copy of Section 10.8.4 of the LA Admin Code in effect on the Closing Date has been attached to this Agreement for the convenience of the parties as Exhibit E hereto. By way of specification but not limitation, pursuant to Sections 10.8.4.E and 10.8.4.F of the LA Admin Code, the failure of the Bank to comply with the Affirmative Action Program provisions of this Agreement could be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard have been given to the Bank. Upon a finding duly made that the Bank has failed to comply with the Affirmative Action Program provisions of this Agreement, this Agreement could be forthwith terminated, cancelled, or suspended to the extent required by theAffirmative Action Program provisions. Any such termination of this Agreement pursuant to the Affirmative Action Program shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.

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Section 8.02. Child Support Orders. To the extent required by the hereinafter defined Child Support Provisions, this Agreement is subject to Section 10.10, Article I, Chapter 1, Division 10 of the LA Admin Code related to Child Support Assignment Orders (“Child Support Provisions”), which is incorporated herein by this reference to the extent required by the Child Support Provisions. A copy of the Child Support Provisions in effect on the Closing Date has been attached to this Agreement for the convenience of the parties as Exhibit F hereto. To the extent the Bank is subject to and required by the Child Support Provisions, pursuant to this section, the Bank (and any subcontractor of the Bank providing services to the Department under this Agreement) shall (1) fully comply with all State and Federal employment reporting requirements for the Bank’s or the Bank’s subcontractor’s employees applicable to Child Support Assignment Orders; (2) certify that the principal owner(s) of the Bank and applicable subcontractors are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally; (3) fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignment in accordance with California Family Code Section 5230, et seq.; and (4) maintain such compliance throughout the term of this Agreement. To the extent the Bank is subject to and required by Section 10.10(b) of the LA Admin Code, failure of the Bank or an applicable subcontractor to comply with all applicable reporting requirements or to implement lawfully served Wage and Earnings Assignment Orders and Notices of Assignment or the failure of any principal owner(s) of the Bank or applicable subcontractors to comply with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally, shall (only to the extent required by the Child Support Provisions) constitute a default of this Agreement subjecting (only to the extent required by the Child Support Provisions) this Agreement to termination where such failure shall continue for more than ninety (90) days after notice of such failure to the Bank or such applicable subcontractor by the Department (in lieu of any time for cure provided elsewhere in this Agreement). Any such termination of this Agreement pursuant to the Child Support Provisions shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.

Section 8.03. Reserved.

Section 8.04. Notice of Changes to LA Admin Code Provisions. During the term of this Agreement, the Department shall provide the Bank with notice of any adopted or enacted changes, additions, amendments or modifications to the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, promptly but in no event later than seven (7) Business Days after the adoption or enactment thereof.

Section 8.05. Compliance with Los Angeles City Charter Section 470(c)(12). The Bank, the Participants, the Subcontractors and their Principals are obligated to fully comply with Charter Section 470(c)(12), Ordinance No. 181972 and other applicable ordinances related to Charter Section 470(c)(12) (the “Measure H Ordinance”) for such period as is required by the Measure H Ordinance, regarding limitations on campaign contributions and fundraising for the City Attorney and the Controller of the City, candidates for these offices, and the City committees they control to the extent such provisions are applicable to this Agreement. Additionally, the Bank is required, for as long as required by the Measure H Ordinance, to provide and update certain information required by the Measure H Ordinance to the Department within the timeframe required by the Measure H Ordinance; in turn, the Department will electronically submit the information to the

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City Ethics Commission as required by the Measure H Ordinance. The Bank shall include the following notice (each a “Participant/Subcontractor Notice”) in any contract with a Participant or a Subcontractor expected to receive at least $100,000 (each a “Measure H Subcontract”) in connection with its participation in this Agreement:

Notice Regarding Los Angeles Campaign Contribution and Fundraising Restrictions.

As provided in Los Angeles City Charter Section 470(c)(12), Ordinance No. 181972 and other applicable ordinances related to Charter Section 470(c)(12) (the “Measure H Ordinance”), you are considered a subcontractor in connection with the Reimbursement Agreement dated as of September 1, 2020, by and between the Department of Airports of the City of Los Angeles (the “Department”) and Bank of America, N.A., as Bank. Pursuant to the Los Angeles City Charter Section 470(c)(12), you and your Principals are prohibited from making campaign contributions and fundraising for the City Attorney and the Controller of the City, candidates for these offices, and the City committees they control, as provided in the Measure H Ordinance. You are required to provide to Bank of America, N.A. the information required by the Measure H Ordinance with respect to your Principals and contact information within the timeframe required by the Measure H Ordinance and to update that information if it changes during the timeframe required by the Measure H Ordinance. Failure to comply may result in termination of this Participation Agreement or any other available legal remedies, including fines. Information about the restrictions may be found at the City Ethics Commission’s website at http://ethics.lacity.org/ or by calling (213) 978-1960.

The Bank, the Participants, the Subcontractors and their Principals shall comply with these requirements and limitations. Any failure of the Bank to include a Participant/Subcontractor Notice in an applicable Measure H Subcontract pursuant to the foregoing provision and any violation of Section 470(c)(12) of the Charter or the Measure H Ordinance by the Bank or a Principal of the Bank shall entitle the City to terminate this Agreement in accordance with the terms of the Measure H Ordinance and pursue any and all applicable legal remedies that may be available to the City. Any such termination of this Agreement pursuant to the Measure H Ordinance shall be subject to the termination provisions set forth in Section 2.07 of this Agreement. Any violation of Section 470(c)(12) of the Charter or the Measure H Ordinance by a Participant or Subcontractor or their respective Principals may subject the Participant or Subcontractor or such respective Principal to penalties under Section 470(c)(12) of the Charter or the Measure H Ordinance.

The Bank represents and warrants that the individuals identified on Bidder Contributions CEC Form 55 submitted in connection with this Agreement on the Closing Date, other than those described clauses (i), (ii), (iii) or (v) of the definition of “Principal” herein, are the individual employees authorized to represent the Bank before the City in connection with this Agreement.

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During the term of this Agreement, the Department shall use its commercially reasonable efforts to provide the Bank with notice of any adopted or enacted changes, additions, amendments or modifications to campaign contribution or fundraising restrictions applicable to the Bank that relate to this Agreement (including, without limitation, any amendments or modifications to the Charter or the Measure H Ordinance), within seven (7) Business Days after the adoption or enactment thereof; provided that the Bank acknowledges that it is solely responsible for complying with the provisions of this Section and the Department’s failure to provide such information shall not constitute an Event of Default. The Bank may obtain information about the Measure H Ordinance at the City Ethics Commission’s website at http://ethics.lacity.org/ or by calling 213/978-1960.

Section 8.06. Adoption or Enaction of Changes, Additions, Amendments or Modifications Not Applicable to Bank After Delivery of Tier Two Termination Notice. Any changes, additions, amendments or modifications to the Equal Employment Practices, Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date, shall not apply to the Bank on and after the date of receipt by the Department of a Tier Two Termination Notice.

Section 8.07. Anti-trust Claims. The Bank understands that it may be subject to California Government Code Sections 4550–4554. If applicable, the Bank offers and agrees that it will assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act or under the Cartwright Act, arising from purchases of goods, services, or materials by the Bank. Such assignment is made and becomes effective at the time the City tenders final payment to the Bank.

ARTICLE IX

MISCELLANEOUS

Section 9.01. Amendments, Waivers, Etc. No modification, amendment or waiver of any provision of this Agreement or the Bank Note, or consent to any departure by the Department therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by the Bank, affect the rights or duties of the Bank under this Agreement or any other Program Document.

Section 9.02. Notices. All notices and other communications provided for hereunder shall be in writing (including required copies) and sent by receipted hand delivery (including Federal Express or other receipted courier service), facsimile transmission, or regular mail, as follows:

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to the Department: Board of Airport Commissioners Department of Airports The City of Los Angeles One World Way Los Angeles, California 90045 Telephone: (424) 646-5251 Facsimile: (424) 646-9223 Attention: Chief Financial Officer

with a copy to: Los Angeles City Attorney One World Way Los Angeles, California 90045

to the Bank with respect to credit matters:

Bank of America, N.A. 555 California Street, Suite 1160 Mailcode CA5-705-11-00 San Francisco, California 94104 Telephone: (415) 913-2325 Facsimile: (213) 984-4051 Attention: Grace Barvin Email: [email protected]

with copy to:

Bank of America, N.A. 800 5th Avenue, 35th Floor Mailcode WA1-501-35-11 Seattle, WA 98104 Attention: Satinder Parwana Telephone: (206) 358-6055 Email: [email protected]

to the Bank, with respect to Drawings under the Letter of Credit:

Bank of America, N.A. 1 Fleet Way, PA6-580-02-30 Scranton, PA 18507 Attention: Standby Letter of Credit Department Telephone: (800) 370-7519 OPT 1 Facsimile: (800) 755-8743

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to the Trustee: U.S. Bank National Association 100 Wall Street, 16th Floor New York, New York 10005 Telephone: (212) 361-2892 Facsimile: (212) 514-6841 Attention: Corporate Trust Services

to the Dealers: Citigroup Global Markets Inc. Public Finance Department 390 Greenwich Street, 2nd Floor New York, New York 10013 Telephone: (212) 723-5594 Facsimile: (212) 723-8939 Attention: Manager, Short-Term Finance Group

J.P. Morgan Securities LLC 383 Madison Avenue, 8th Floor New York, New York 10179 Telephone: (212) 834-7224 Facsimile: (917) 456-3541 Attention: [email protected] E-mail: Peter McCarthy

Loop Capital Markets LLC Fixed Income Division 111 West Jackson Blvd., Suite 1901 Chicago, Illinois 60604 Telephone: (312) 913-2274 Facsimile: (312) 913-4928 Attention: Short Term Desk E-mail: [email protected]

With a Copy to:

Loop Capital Markets LLC Investment Banking Division – Public Finance 12100 Wilshire Blvd., Suite 430 Los Angeles, California 90025 Telephone: (310) 442-1200, ext. 24 Facsimile: (310) 442-1208 Attention: [____] E-mail: [__________]

BofA Securities, Inc. One Bryant Park

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Ninth Floor New York, New York 10036 Telephone: (212) 449-5101 Facsimile: (646) 736-6960 Attention: Municipal Markets Department

Morgan Stanley & Co. LLC 1585 Broadway New York, New York 10036 Telephone: (212) 761-9093 Facsimile: (212) 507-2103 Attention: Municipal Short Term Products E-mail: [email protected]

Samuel A. Ramirez & Co., Inc. 61 Broadway, Suite 2924 New York, New York 10006 Telephone: (212) 378-7122 Facsimile: (212) 248-0528 Attention: Short-Term Desk

Wells Fargo Bank, National Association 50 S Tryon St, 4th Floor Charlotte, North Carolina 28202 Telephone: (704) 410-4091 Facsimile: (704) 383-0065 Attention: Rick White, Director E-mail: [email protected]

or, as to each Person named above, at such other address as shall be designated by such Person in a written notice to the parties hereto. All such notices and other communications shall, when delivered or sent by facsimile transmission or mailed, be effective when deposited with the courier, sent by facsimile transmission or mailed respectively, addressed as aforesaid, except that Drawing certificates submitted to the Bank shall not be effective until received by the Bank.

Section 9.03. Survival of Covenants; Successors and Assigns. (a) All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making of any Drawing or Advance hereunder and shall continue in full force and effect and until all Obligations hereunder, under the Fee Letter and under the Bank Note shall have been paid in full. Such representations and warranties have been or will be relied upon by the Bank, regardless of any investigation made by the Bank or on its behalf and notwithstanding that the Bank may have had notice or knowledge of any Default or Event of Default at the time of honoring a Drawing. Whenever in this Agreement and the Fee Letter any of the parties hereto and thereto is referred to, such reference shall, subject to the last sentence of this Section, be deemed to include the successors and assigns of such party, and all covenants, promises and agreements

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by or on behalf of the Department which are contained in this Agreement, the Fee Letter and the Bank Note shall inure to the benefit of the successors and assigns of the Bank. The Department may not transfer its rights or obligations under this Agreement, the Fee Letter or the Bank Note without the prior written consent of the Bank. The Bank may transfer some or all of its rights and obligations under this Agreement and/or the Letter of Credit with the prior written consent of the Department (which consent shall not be withheld unreasonably); provided that (i) the Department has received written notice from each Rating Agency that the transfer shall not cause the lowering, withdrawal or suspension of any ratings then existing on the Commercial Paper Notes; and (ii) the Bank shall be responsible for all costs resulting from the transfer. This Agreement, the Fee Letter and the Bank Note are made solely for the benefit of the Department, the Bank, and no other Person (including, without limitation, the Trustee, any Dealer or any holder of Commercial Paper Notes) shall have any right, benefit or interest under or because of the existence of this Agreement, the Fee Letter or the Bank Note; provided further that the Department’s liability to any Participant shall not in any event exceed that liability which the Department would owe to the Bank but for such participation.

(b) Notwithstanding the foregoing, the Bank shall be permitted to grant to one or more financial institutions (each a “Participant”) a participation or participations in all or any part of the Bank’s rights and benefits under this Agreement, the Fee Letter and the Bank Note on a participating basis but not as a party to this Agreement, the Fee Letter or the Bank Note (a “Participation”) without the consent of the Department. The Bank shall provide the Department with written notice of any Participation not more than five (5) Business Days after the date of entering into such Participation. In the event of any such grant by the Bank of a Participation to a Participant, the Bank shall remain responsible for the performance of its obligations hereunder, and the Department shall continue to deal solely and directly with the Bank in connection with the Bank’s rights and obligations under this Agreement and the Bank Note. The Department agrees that each Participant shall, to the extent of its Participation, be entitled to the benefits of this Agreement, the Fee Letter and the Bank Note as if such Participant were the Bank; provided that no Participant shall have the right to declare, or to take actions in response to, an Event of Default under Section 7.01 hereof; and provided further that no such Participant shall be entitled to receive payment pursuant to Section 2.14 hereof in an amount greater than the amount which would have been payable had the Bank not granted a Participation to such Participant.

(c) Certain Pledges. In addition to the rights of the Bank set forth above, the Bank may at any time pledge or assign a security interest in all or any portion of its rights or interests under this Agreement, the Bank Note and the other Program Documents to secure obligations of the Bank or an Affiliate of the Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank or to any state or local governmental entity or with respect to public deposits; provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or substitute any such pledgee or assignee for the Bank as a party hereto.

Section 9.04. Unconditional Obligations. The obligations of the Department under this Agreement, the Fee Letter and the Bank Note shall be absolute, unconditional, irrevocable and performed and payable strictly in accordance with the terms of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, this Agreement, the Fee Letter

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and the Bank Note, under all circumstances whatsoever, including, without limitation, the following:

(a) any lack of validity or enforceability of this Agreement, the Fee Letter, the Letter of Credit, the Bank Note or, to the extent permitted by law, the Commercial Paper Notes, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other Program Document;

(b) any amendment or waiver of or any consent to departure from the terms of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or all or any of the other Program Documents to which the Bank have not consented in writing;

(c) the existence of any claim, counterclaim, set off, recoupment, defense, or other right which any Person may have at any time against the Bank, the Department, the Trustee, any Dealer, or any other Person, whether in connection with this Agreement, the Fee Letter, the Bank Note, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the other Program Documents, or any other transaction related thereto;

(d) any statement or any other document presented pursuant hereto or pursuant to the Letter of Credit which the Bank in good faith determines to be valid, sufficient or genuine and which subsequently proves to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

(e) payment by the Bank of a Drawing or an Advance against presentation of a request which the Bank in good faith determines to be valid, sufficient or genuine and which subsequently is found not to comply with the terms of this Agreement; and

(f) any other circumstances or happening whatsoever whether or not similar to any of the foregoing.

SECTION 9.05. LIABILITY OF BANK: INDEMNIFICATION. (a) TO THE FULLEST EXTENT

PERMITTED BY THE LAWS OF THE STATE, THE DEPARTMENT ASSUMES ALL RISKS OF THE ACTS OR

OMISSIONS OF THE TRUSTEE WITH RESPECT TO THE USE OF THE LETTER OF CREDIT AND THE USE OF

PROCEEDS THEREUNDER; PROVIDED THAT THIS ASSUMPTION WITH RESPECT TO THE BANK IS NOT

INTENDED TO AND SHALL NOT PRECLUDE THE DEPARTMENT FROM PURSUING SUCH RIGHTS AND

REMEDIES AS IT MAY HAVE AGAINST THE TRUSTEE UNDER ANY OTHER AGREEMENTS. NEITHER THE

BANK NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS SHALL BE LIABLE OR

RESPONSIBLE FOR (I) THE USE OF THE LETTER OF CREDIT, THE DRAWINGS OR ADVANCES

THEREUNDER OR HEREUNDER, THE PROCEEDS OF THE COMMERCIAL PAPER NOTES OR THE

TRANSACTIONS CONTEMPLATED HEREBY AND BY THE PROGRAM DOCUMENTS OR FOR ANY ACTS OR

OMISSIONS OF THE TRUSTEE OR ANY DEALER; (II) THE VALIDITY, SUFFICIENCY OR GENUINENESS OF

ANY DOCUMENTS DETERMINED IN GOOD FAITH BY THE BANK TO BE VALID, SUFFICIENT OR GENUINE,EVEN IF SUCH DOCUMENTS SHALL, IN FACT, PROVE TO BE IN ANY OR ALL RESPECTS INVALID,FRAUDULENT, FORGED OR INSUFFICIENT; (III) PAYMENTS BY THE BANK AGAINST PRESENTATION OF

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REQUESTS FOR DRAWINGS OR REQUESTS FOR WHICH THE BANK IN GOOD FAITH HAS DETERMINED TO

BE VALID, SUFFICIENT OR GENUINE AND WHICH SUBSEQUENTLY ARE FOUND NOT TO COMPLY WITH

THE TERMS OF THIS AGREEMENT OR THE LETTER OF CREDIT; OR (IV) ANY OTHER CIRCUMSTANCES

WHATSOEVER IN MAKING OR FAILING IN GOOD FAITH TO MAKE PAYMENT HEREUNDER OR UNDER THE

LETTER OF CREDIT; PROVIDED THAT THE DEPARTMENT SHALL NOT BE REQUIRED TO INDEMNIFY THE

BANK FOR ANY CLAIMS, LOSSES, LIABILITIES, COSTS OR EXPENSES TO THE EXTENT, BUT ONLY TO THE

EXTENT, SOLELY AND DIRECTLY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF

THE BANK.

(b) TO THE EXTENT PERMITTED BY THE LAWS OF THE STATE, THE DEPARTMENT HEREBY

INDEMNIFIES AND HOLDS HARMLESS THE BANK AND ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES

OR AGENTS (EACH AN “INDEMNITEE”) FROM AND AGAINST ANY AND ALL DIRECT, AS OPPOSED TO

CONSEQUENTIAL OR PUNITIVE CLAIMS, DAMAGES (THE RIGHT TO RECEIVE CONSEQUENTIAL OR

PUNITIVE DAMAGES BEING HEREBY WAIVED), LOSSES, LIABILITIES, COSTS OR EXPENSES (INCLUDING

SPECIFICALLY REASONABLE ATTORNEYS’ FEES) WHICH THE BANK MAY INCUR (OR WHICH MAY BE

CLAIMED AGAINST THE BANK BY ANY PERSON WHATSOEVER) (COLLECTIVELY, THE “LIABILITIES”)BY REASON OF OR IN CONNECTION WITH (I) THE EXECUTION AND DELIVERY OF THIS AGREEMENT,THE FEE LETTER, THE LETTER OF CREDIT AND THE BANK NOTE AND THE TRANSACTIONS

CONTEMPLATED HEREBY OR THEREBY; AND (II) THE STATEMENTS CONTAINED IN THE OFFERING

MEMORANDUM PREPARED AND DISTRIBUTED IN CONNECTION WITH THE COMMERCIAL PAPER NOTES;PROVIDED, HOWEVER, THAT THE DEPARTMENT SHALL NOT BE REQUIRED TO INDEMNIFY THE BANK

FOR (A) ANY CLAIMS, DAMAGES (THE RIGHT TO RECEIVE CONSEQUENTIAL OR PUNITIVE DAMAGES

BEING HEREBY WAIVED), LOSSES, LIABILITIES, COSTS OR EXPENSES (1) TO THE EXTENT, BUT ONLY

TO THE EXTENT, SOLELY AND DIRECTLY CAUSED BY (X) THE BANK’S WILLFUL MISCONDUCT OR

GROSS NEGLIGENCE IN DETERMINING WHETHER THE DOCUMENTS PRESENTED UNDER THE LETTER OF

CREDIT COMPLY WITH THE TERMS OF THE LETTER OF CREDIT; OR (Y) THE BANK’S WILLFUL OR

GROSSLY NEGLIGENT FAILURE TO MAKE LAWFUL PAYMENT UNDER THE LETTER OF CREDIT AFTER

THE PROPER PRESENTATION TO THE BANK BY THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE

SEVENTH SUPPLEMENTAL SUBORDINATE TRUST INDENTURE OF A DRAWING STRICTLY COMPLYING

WITH THE TERMS AND CONDITIONS OF THE LETTER OF CREDIT; OR (2) INCURRED IN CONNECTION

WITH THE STATEMENTS CONTAINED IN APPENDIX A TO THE OFFERING MEMORANDUM UNDER THE

CAPTION [“_________________________”] AS SET FORTH IN THE OFFERING MEMORANDUM; OR

(B) DISPUTES SOLELY BETWEEN THE DEPARTMENT AND AN INDEMNITEE, WHICH DISPUTES ARE

SUBJECT TO THE TERMS OF SECTION 9.05(C), 9.05(D) AND 9.05(E) HEREOF. The Bank is hereby expressly authorized and directed to honor any demand for payment which is made under the Letter of Credit without regard to, and without any duty on its part to inquire into the existence of, any disputes or controversies between the Department, any Dealer, the Trustee or any other person or the respective rights, duties or liabilities of any of them, or whether any facts or occurrences represented in any of the documents presented under the Letter of Credit are true and correct.

(c) Notwithstanding anything to the contrary contained in this Section 9.05, the Department shall have a claim against an Indemnitee and such Indemnitee shall be liable to the Department, to the extent of any direct, as opposed to special, indirect, consequential or punitive damages (the right to receive special, indirect, consequential or punitive damages being hereby waived) suffered by the Department which the Department proves were caused solely by such

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Indemnitee’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction.

(d) In addition to any and all rights of reimbursement, indemnification, subrogation or any other rights pursuant to this Section 9.05, solely with respect to disputes between the Department and an Indemnitee, the Department hereby agrees to pay to each Indemnitee only those Liabilities incurred by reason of or in connection with any such dispute only if the applicable court of competent jurisdiction determines that such Indemnitee did not act with gross negligence or willful misconduct with respect to such dispute.

(e) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the Department shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Program Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Letter of Credit or the use of the proceeds of Drawings thereunder. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Program Documents or the transactions contemplated hereby or thereby.

(f) Payments. All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.

(g) Survival. The agreements in this Section survive the termination of the Letter of Credit and the repayment, satisfaction or discharge of all the other Obligations.

Section 9.06. Expenses and Taxes. The Department will promptly pay (a) the reasonable fees and expenses of legal counsel to the Bank incurred in connection with the preparation, execution and delivery of this Agreement, the Fee Letter and the Letter of Credit as set forth in the Fee Letter; (b) the reasonable fees and disbursements of counsel to the Bank with respect to advising the Bank as to the rights and responsibilities under this Agreement and the Fee Letter after the occurrence of an Event of Default; and (c) all reasonable costs and expenses, if any, in connection with the enforcement of this Agreement and the Fee Letter and any other documents which may be delivered in connection herewith or therewith, including in each case the fees and disbursements of counsel to the Bank. In addition, the Department shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement and the Fee Letter and the security contemplated by the Program Documents and any related documents and agrees to hold the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. In addition, the Department agrees to pay, after the occurrence of an Event of Default, all costs and expenses (including attorneys’ fees and costs of settlement) incurred by the Bank in enforcing any obligations or in collecting any payments due from the Department hereunder or under the Fee Letter by reason of such Event of Default or in connection with any

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refinancing or restructuring of the credit arrangements provided under this Agreement or the Fee Letter in the nature of a “workout” or of any insolvency or bankruptcy proceedings.

Section 9.07. No Waiver; Conflict. Neither any failure nor any delay on the part of the Bank in exercising any right, power or privilege hereunder, nor any course of dealing with respect to any of the same, shall operate as a waiver thereof, preclude any other or further exercise thereof nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies herein provided are cumulative, and not exclusive of any remedies provided by law. To the extent of any conflict between this Agreement, the Letter of Credit, the Senior Lien Trust Indenture and any other Program Documents, this Agreement shall control solely as between the Department and the Bank.

Section 9.08. Modification, Amendment, Waiver, Etc. No modification, amendment or waiver of any provision of this Agreement, the Fee Letter or the Bank Note shall be effective unless the same shall be in writing and signed by the parties hereto.

Section 9.09. Severability. Any provision of this Agreement or the other Program Documents which is prohibited or illegal, invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction, and all other remaining provisions hereof will be construed to render them enforceable to the fullest extent permitted by law. The parties hereto shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.

Section 9.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but when taken together shall constitute but one agreement and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement, the other Program Documents, and any separate letter agreements with respect to fees payable to the Bank, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Bank and when the Bank shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other Program Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement or such other Program Document or certificate. Such paper copies or “printouts,” if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Program Document,

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upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

Section 9.11. Table of Contents; Headings. The table of contents and the section and subsection headings used herein have been inserted for convenience of reference only and do not constitute matters to be considered in interpreting this Agreement.

Section 9.12. ENTIRE AGREEMENT. THIS AGREEMENT AND THE FEE LETTER, TOGETHER

WITH THE BANK NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND

MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL

AGREEMENTS OF THE PARTIES HERETO.

Section 9.13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, provided that, the obligations of the Department shall be governed by and construed in accordance with the laws of the State.

Section 9.14. Right of Set-off. Notwithstanding anything to the contrary contained herein, except to the extent otherwise provided in Section 6.25 hereof, the Bank and any Participant each hereby agree that it will not assert any of its statutory or common law rights of setoff as the depository bank of the Department or the City in connection with the collection or repayment of any of the Obligations or any other obligation of the Department owing to the Bank or a Participant under this Agreement, the Fee Letter or any other Program Document.

Section 9.15. USA Patriot Act; Government Regulations. The Bank hereby notifies the Department that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that identifies the Department, which information includes the name and address of the Department and other information that will allow the Bank to identify the Department in accordance with the Patriot Act. The Department agrees to, promptly following a request by the Bank, provide all such other documentation and information reasonably requested by Bank for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act.

Section 9.16. Dealing with the Department, the Trustee, and/or the Dealer. The Bank and its affiliates may accept deposits from, extend credit to and generally engage in any kind of banking, trust or other business with the Department, the Trustee, and/or any Dealer regardless of the capacity of the Bank hereunder.

Section 9.17. No Advisory or Fiduciary Responsibility. The Department acknowledges and agrees that (i) the transaction contemplated by this Agreement is an arm’s-length commercial transaction between the Department and the Bank, (ii) in connection with such transaction, the Bank is acting solely as a principal and not as a financial advisor of the Department, (iii) the Bank has not assumed a financial advisory responsibility in favor of the Department with respect to the transaction contemplated hereby or the process leading thereto (whether or not the Bank, or any affiliate of the Bank, has advised or is currently advising the Department on other matters) or any other obligation to the Department except the obligations expressly set forth in this Agreement;

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provided, however, that for both subsections (ii) and (iii) herein, it is the Department’s understanding that a financial advisory relationship shall not be deemed to exist when, in the course of acting as a purchaser, an underwriter, a broker, dealer or municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities, and (iv) the Department has consulted with its own legal, accounting, tax and financial advisors to the extent it deemed appropriate in connection with the transaction contemplated hereby. The Bank hereby notifies the Department it is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended), it is not an agent of the Department, and it does not have a fiduciary duty to the Department in connection with the matters contemplated by this Agreement.


Section 9.19. Electronic Execution of Certain Documents. This Agreement and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Agreement (each a “Communication”), including Communications required to be in writing, may, if agreed by the Bank, be in the form of an Electronic Record and may be executed using Electronic Signatures, including, without limitation, facsimile and/or .pdf. The Department agrees that any Electronic Signature (including, without limitation, facsimile or .pdf) on or associated with any Communication shall be valid and binding on the Department to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of the Department enforceable against the Department in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered to the Bank. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Bank may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Bank’s business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary, the Bank is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Bank pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Bank has agreed to accept such Electronic Signature, the Bank shall be entitled to rely on any such Electronic Signature without further verification and (b) upon the request of the Bank any Electronic Signature shall be promptly followed by a manually executed, original counterpart. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

Section 9.20. US QFC Stay Rules.

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(a) Recognition of U.S. Resolution Regimes. In the event that any party that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of this Agreement (and any interest and obligation in or under this Agreement and any property securing this Agreement) from such Covered Entity will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement (and any such interest, obligation and property) were governed by the laws of the United States or a state of the United States. In the event that any party that is a Covered Entity or a BHC Act Affiliate of such party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights against such party with respect to this Agreement are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States. The requirements of this paragraph (a) apply notwithstanding the provisions of paragraph (b).

(b) Limitation on the Exercise of Certain Rights Related to Affiliate Insolvency Proceedings. Notwithstanding anything to the contrary in this Agreement or any related agreement, but subject to the requirements of paragraph (a), no party to this Agreement shall be permitted to exercise any Default Right against a party that is a Covered Entity with respect to this Agreement that is related, directly or indirectly, to a BHC Act Affiliate of such Covered Entity becoming subject to Insolvency Proceedings, except to the extent the exercise of such Default Right would be permitted under 12 C.F.R. § 252.84, 12 C.F.R. § 47.5, or 12 C.F.R. § 382.4, as applicable. After a BHC Act Affiliate of a party that is a Covered Entity has become subject to Insolvency Proceedings, any party that seeks to exercise a Default Right against such Covered Entity with respect to this Agreement shall have the burden of proof, by clear and convincing evidence, that the exercise of such Default Right is permitted hereunder.

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

(a) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(b) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or

(c) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“Insolvency Proceeding” means a receivership, insolvency, liquidation, resolution, or similar proceeding.

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“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

[Remainder of page intentionally left blank; signature page follows]

Signature Page to Reimbursement Agreement 4843-6766-9443.3

IN WITNESS WHEREOF, the Department and the Bank have duly executed this Agreement as of the date first above written.

DEPARTMENT OF AIRPORTS OF THE CITY OF LOS

ANGELES, CALIFORNIA

By: ____________________________________ Tatiana Starostina, Chief Financial Officer

APPROVED AS TO FORM: Michael N. Feuer, City Attorney

Date: September [__], 2020

By _______________________________________ Deputy/Assistant City Attorney


By: ____________________________________ Name: Grace L. Barvin Title: Senior Vice President

4843-6766-9443.3

APPENDIX I

[FORM OF IRREVOCABLE TRANSFERABLE DIRECT-PAY LETTER OF CREDIT] BANK OF AMERICA, N.A.

[To be provided]

EXHIBIT A (to Reimbursement Agreement)

4843-6766-9443.3

EXHIBIT A

[FORM OF TIER ONE STOP ISSUANCE INSTRUCTION]

[Dated Date]

Board of Airport Commissioners Department of Airports The City of Los Angeles One World Way Los Angeles, CA 90045 Attention: Finance and Budget Division/

Chief Financial Officer

U.S. Bank National Association, as Trustee 100 Wall Street, Suite 1600 New York, NY 10005 Attention: Commercial Paper Administration

Re: Department of Airports of the City of Los Angeles, California Los Angeles International Airport

Subordinate Revenue Commercial Paper Notes Subseries A-3 (Governmental – Non-AMT)

Subseries B-3 (Private Activity – AMT) Subseries C-3 (Federally Taxable)

Subseries D-3 (Private Activity – Non-AMT)

Ladies and Gentlemen:

Pursuant to Sections 3.02(b) and 7.02(b) of that certain Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Reimbursement Agreement”), by and between the Department of Airports of the City of Los Angeles (the “Department”) and the undersigned, as Bank, you are hereby notified that (a) either (1) an “Event of Default” under Section 7.01(_) of the Reimbursement Agreement has occurred and is now continuing or (2) one or more of the representations and warranties of the Department set forth in the Reimbursement Agreement, are in the reasonable opinion of the Bank, no longer true and correct in all material respects and; (b) upon receipt of this notice, (i) no new Commercial Paper Notes, as defined in the Reimbursement Agreement, shall be issued or authenticated (ii) the Stated Amount of the Letter of Credit shall be permanently reduced to $_____________, representing the principal amount of Commercial Paper Notes currently outstanding and interest thereon, and shall be further permanently reduced following the maturity of any such Commercial

A-2 4843-6766-9443.3

Paper Notes, and (iii) the Stated Amount shall no longer be reinstated following payment by the Bank of any Drawings.

This Tier One Stop Issuance Instruction shall remain in effect unless you have received written notification from us that this Tier One Stop Issuance Instruction has been rescinded.

Very truly yours,

BANK OF AMERICA, N.A., as Bank

By: ____________________________________ Name: ______________________________ Title: _______________________________

cc: [DEALER] [RATING AGENCIES]

EXHIBIT B (to Reimbursement Agreement)

4843-6766-9443.3

EXHIBIT B

[FORM OF BANK NOTE]

$98,100,000 Initial Maximum Principal Amount [___________], 2020

FOR VALUE RECEIVED, the undersigned, DEPARTMENT OF AIRPORTS OF THE CITY OF LOS

ANGELES, CALIFORNIA (the “Department”), hereby promises to pay to the order of BANK OF

AMERICA, N.A. (the “Bank”) at its principal office at [__________________________], in the manner and on the dates provided in the hereinafter defined Agreement in lawful money of the United States of America and in immediately available funds, the principal amount equal to the aggregate unreimbursed amount of the Advances made by the Bank pursuant to the Agreement not to exceed Ninety Eight Million One Hundred Thousand Dollars ($98,100,000). Terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Agreement”) by and between the Department and the Bank, as from time to time in effect.

The Department further promises to pay interest from the date hereof on the outstanding principal amount hereof and unpaid interest hereon from time to time on the dates, in the manner, at the rates and times and in all cases in accordance with the terms of the Agreement. The Bank may endorse its records relating to this Bank Note with appropriate notations evidencing the Advances under the Agreement and payments of principal hereunder as contemplated by the Agreement.

This Bank Note is issued pursuant to, is entitled to the benefits of, and is subject to, the provisions of the Agreement and that certain Master Subordinate Trust Indenture, dated as of December 1, 2002, as supplemented and amended, including as supplemented and amended by that certain Seventh Supplemental Subordinate Trust Indenture dated as of March 1, 2012, as amended, each by and between the Department and U.S. Bank National Association, as Trustee. The principal of this Bank Note is subject to prepayment in whole or in part in accordance with the terms of the Agreement.

The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Bank Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

This Bank Note and the obligations of the Department hereunder shall for all purposes be governed by and interpreted and determined in accordance with the laws of the State of California (excluding the laws applicable to conflicts or choice of law).

NEITHER THE FAITH AND THE CREDIT NOR THE TAXING POWER OF THE CITY OF LOS ANGELES,THE STATE OF CALIFORNIA OR ANY PUBLIC AGENCY, OTHER THAN THE DEPARTMENT TO THE EXTENT

OF THE SUBORDINATE PLEDGED REVENUES, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR

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INTEREST ON THIS BANK NOTE. NONE OF THE PROPERTIES OF THE AIRPORT SYSTEM ARE SUBJECT TO

ANY MORTGAGE OR OTHER LIEN FOR THE BENEFIT OF THE BANK. THE DEPARTMENT HAS NO POWER

OF TAXATION.

THIS BANK NOTE AND THE INTEREST THEREON IS JUNIOR AND SUBORDINATE IN ALL

RESPECTS TO THE SENIOR LIEN REVENUE BONDS AS TO LIEN ON AND SOURCE AND SECURITY FOR

PAYMENT FROM THE NET PLEDGED REVENUES.

Signature Page to Bank Note 4843-6766-9443.3

IN WITNESS WHEREOF, the Department has caused this Bank Note to be signed in its name as an instrument by its duly authorized officer on the date and in the year first above written.

DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA

By Chief Financial Officer

Attest:

By Secretary of the Board of Airport Commissioners of the City of Los Angeles, California

EXHIBIT C (to Reimbursement Agreement)

4843-6766-9443.3

EXHIBIT C

[FORM OF REQUEST FOR EXTENSION]

Bank of America, N.A., as Bank _________________________ _________________________ Attention: ________________

cc: Via Facsimile to ________________

Re: Request for Extension of Irrevocable Transferable Direct-Pay Letter of Credit No. [____________]


Pursuant to Section 2.12 of that certain Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Reimbursement Agreement”), by and between the Department of Airports of the City of Los Angeles, California (the “Department”) and Bank of America, N.A. (the “Bank”), the Department hereby requests that the Letter of Credit Expiration Date be extended for a one-year extension. All capitalized terms contained herein which are not specifically defined herein shall be deemed to have the definition set forth in the Reimbursement Agreement.

The Bank is requested to notify the Department of its decision with respect to this request for extension within thirty (30) days of the date of receipt of all information necessary, in the Bank’s reasonable judgment, to permit the Bank to make an informed credit decision. If the Bank fails to notify the Department of its decision within such 30-day period, the Bank shall be deemed to have rejected such request.

Very truly yours,


ANGELES, CALIFORNIA

By: ____________________________________ Name: ______________________________ Title: _______________________________

cc: U.S. Bank National Association, as Trustee

4843-6766-9443.3

EXHIBIT D

SECTION 10.8.3 OF THE LOS ANGELES ADMINISTRATIVE CODE

Sec. 10.8.3. Equal Employment Practices Provisions.

Every non-construction contract with or on behalf of the City of Los Angeles for which the consideration is $1,000 or more, and every construction contract for which the consideration is $1,000 or more, shall contain the following provisions, which shall be designated as the EQUAL EMPLOYMENT PRACTICES provision of such contract:

A. During the performance of this contract, the contractor agrees and represents that it will provide equal employment practices and the contractor and each subcontractor hereunder will ensure that in his or her employment practices persons are employed and employees are treated equally and without regard to or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition. 1. This provision applies to work or service performed or materials manufactured or assembled in the United States. 2. Nothing in this section shall require or prohibit the establishment of new classifications of employees in any given craft, work or service category. 3. The contractor agrees to post a copy of Paragraph A hereof in conspicuous places at its place of business available to employees and applicants for employment.

B. The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to their race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition.

C. As part of the City’s supplier registration process, and/or at the request of the awarding authority, or the Board of Public Works, Office of Contract Compliance, the contractor shall certify in the specified format that he or she has not discriminated in the performance of City contracts against any employee or applicant for employment on the basis or because of race, religion, national origin, ancestry, sex, sexual orientation, age, disability, marital status or medical condition.

D. The contractor shall permit access to and may be required to provide certified copies of all of his or her records pertaining to employment and to employment practices by the awarding authority or the Office of Contract Compliance for the purpose of investigation to ascertain compliance with the Equal Employment Practices provisions of City contracts. On their or either of their request the contractor shall provide evidence that he or she has or will comply therewith.

E. The failure of any contractor to comply with the Equal Employment Practices provisions of this contract may be deemed to be a material breach of City contracts. Such failure shall only be established upon a finding to that effect by the awarding authority, on the basis of its own investigation or that of the Board of Public Works, Office of Contract Compliance. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard has been given to the contractor.

F. Upon a finding duly made that the contractor has failed to comply with the Equal Employment Practices provisions of a City contract, the contract may be forthwith canceled, terminated or suspended, in whole or in part, by the awarding authority, and all monies due or to become due hereunder may be forwarded to and retained by the City of Los Angeles. In addition thereto, such failure to comply may be the basis for a determination by the awarding authority or the Board of Public Works that the said contractor is an irresponsible bidder or proposer pursuant to the provisions of Section 371 of the Charter of the City of Los Angeles. In the event of such a determination, such contractor shall be disqualified from being awarded a contract with the City of Los Angeles for a period of two years, or until the contractor shall establish and carry out a program in conformance with the provisions hereof.

G. Notwithstanding any other provision of this contract, the City of Los Angeles shall have any and all other remedies at law or in equity for any breach hereof.

H. The Board of Public Works shall promulgate rules and regulations through the Office of Contract Compliance, and provide necessary forms and required language to the awarding authorities to be included in City Request for Bids or Request for Proposal packages or in supplier registration requirements for the implementation of the Equal Employment Practices provisions of this contract, and such rules and regulations and forms shall, so far as practicable, be similar to those adopted in applicable Federal Executive orders. No other rules, regulations or forms may be used by an awarding authority of the City to accomplish the contract compliance program.

D-2 4843-6766-9443.3

I. Nothing contained in this contract shall be construed in any manner so as to require or permit any act which is prohibited by law.

J. At the time a supplier registers to do business with the City, or when an individual bid or proposal is submitted, the contractor shall agree to adhere to the Equal Employment Practices specified herein during the performance or conduct of City Contracts.

K. Equal Employment Practices shall, without limitation as to the subject or nature of employment activity, be concerned with such employment practices as: 1. Hiring practices; 2. Apprenticeships where such approved programs are functioning, and other on-the-job training for non-apprenticeable occupations; 3. Training and promotional opportunities; and 4. Reasonable accommodations for persons with disabilities.

L. All contractors subject to the provisions of this section shall include a like provision in all subcontracts awarded for work to be performed under the contract with the City and shall impose the same obligations, including but not limited to filing and reporting obligations, on the subcontractors as are applicable to the contractor. Failure of the contractor to comply with this requirement or to obtain the compliance of its subcontractors with all such obligations shall subject the contractor to the imposition of any and all sanctions allowed by law, including but not limited to termination of the contractor’s contract with the City. SECTION HISTORY Amended by: Ord. No. 147,030, Eff. 4-28-75; Paragraphs A., B., C., Ord. No. 164,516, Eff. 4-13-89; Paragraphs C., Ord. No. 168,244, Eff. 10-18-92; Ord. No. 173,186, Eff. 5-22-00; Subsec. F Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00.

4843-6766-9443.3

EXHIBIT E


Sec. 10.8.4. Affirmative Action Program Provisions

Every non-construction contract with or on behalf of the City of Los Angeles for which the consideration is $100,000 or more and every construction contract with or on behalf of the City of Los Angeles for which the consideration is $5,000 or more shall contain the following provisions which shall be designated as the AFFIRMATIVE ACTION PROGRAM provisions of such contract:

A. During the performance of a City contract, the contractor certifies and represents that the contractor and each subcontractor hereunder will adhere to an affirmative action program to ensure that in its employment practices, persons are employed and employees are treated equally and without regard to or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition. 1. This provision applies to work or services performed or materials manufactured or assembled in the United States. 2. Nothing in this section shall require or prohibit the establishment of new classifications of employees in any given craft, work or service category. 3. The contractor shall post a copy of Paragraph A hereof in conspicuous places at its place of business available to employees and applicants for employment.


C. As part of the City’s supplier registration process, and/or at the request of the awarding authority or the Office of Contract Compliance, the contractor shall certify on an electronic or hard copy form to be supplied, that the contractor has not discriminated in the performance of City contracts against any employee or applicant for employment on the basis or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition.

D. The contractor shall permit access to and may be required to provide certified copies of all of its records pertaining to employment and to its employment practices by the awarding authority or the Office of Contract Compliance, for the purpose of investigation to ascertain compliance with the Affirmative Action Program provisions of City contracts, and on their or either of their request to provide evidence that it has or will comply therewith.

E. The failure of any contractor to comply with the Affirmative Action Program provisions of City contracts may be deemed to be a material breach of contract. Such failure shall only be established upon a finding to that effect by the awarding authority, on the basis of its own investigation or that of the Board of Public Works, Office of Contract Compliance. No such finding shall be made except upon a full and fair hearing after notice and an opportunity to be heard has been given to the contractor.

F. Upon a finding duly made that the contractor has breached the Affirmative Action Program provisions of a City contract, the contract may be forthwith cancelled, terminated or suspended, in whole or in part, by the awarding authority, and all monies due or to become due hereunder may be forwarded to and retained by the City of Los Angeles. In addition thereto, such breach may be the basis for a determination by the awarding authority or the Board of Public Works that the said contractor is an irresponsible bidder or proposer pursuant to the provisions of Section 371 of the Los Angeles City Charter. In the event of such determination, such contractor shall be disqualified from being awarded a contract with the City of Los Angeles for a period of two years, or until he or she shall establish and carry out a program in conformance with the provisions hereof.

G. In the event of a finding by the Fair Employment and Housing Commission of the State of California, or the Board of Public Works of the City of Los Angeles, or any court of competent jurisdiction, that the contractor has been guilty of a willful violation of the California Fair Employment and Housing Act, or the Affirmative Action Program provisions of a City contract, there may be deducted from the amount payable to the contractor by the City of Los Angeles under the contract, a penalty of TEN DOLLARS ($10.00) for each person for each calendar day on which such person was discriminated against in violation of the provisions of a City contract.

H. Notwithstanding any other provisions of a City contract, the City of Los Angeles shall have any and all other remedies at law or in equity for any breach hereof.

E-2 4843-6766-9443.3

I. The Public Works Board of Commissioners shall promulgate rules and regulations through the Office of Contract Compliance and provide to the awarding authorities electronic and hard copy forms for the implementation of the Affirmative Action Program provisions of City contracts, and rules and regulations and forms shall, so far as practicable, be similar to those adopted in applicable Federal Executive Orders. No other rules, regulations or forms may be used by an awarding authority of the City to accomplish this contract compliance program.

J. Nothing contained in City contracts shall be construed in any manner so as to require or permit any act which is prohibited by law.

K. The contractor shall submit an Affirmative Action Plan which shall meet the requirements of this chapter at the time it submits its bid or proposal or at the time it registers to do business with the City. The plan shall be subject to approval by the Office of Contract Compliance prior to award of the contract. The awarding authority may also require contractors and suppliers to take part in a pre-registration, pre-bid, pre-proposal, or pre-award conference in order to develop, improve or implement a qualifying Affirmative Action Plan. Affirmative Action Programs developed pursuant to this section shall be effective for a period of twelve months from the date of approval by the Office of Contract Compliance. In case of prior submission of a plan, the contractor may submit documentation that it has an Affirmative Action Plan approved by the Office of Contract Compliance within the previous twelve months. If the approval is 30 days or less from expiration, the contractor must submit a new Plan to the Office of Contract Compliance and that Plan must be approved before the contract is awarded. (1) Every contract of $5,000 or more which may provide construction, demolition, renovation, conservation or major maintenance of any kind shall in addition comply with the requirements of Section 10.13 of the Los Angeles Administrative Code. (2) A contractor may establish and adopt as its own Affirmative Action Plan, by affixing his or her signature thereto, an Affirmative Action Plan prepared and furnished by the Office of Contract Compliance, or it may prepare and submit its own Plan for approval.

L. The Office of Contract Compliance shall annually supply the awarding authorities of the City with a list of contractors and suppliers who have developed Affirmative Action Programs. For each contractor and supplier the Office of Contract Compliance shall state the date the approval expires. The Office of Contract Compliance shall not withdraw its approval for any Affirmative Action Plan or change the Affirmative Action Plan after the date of contract award for the entire contract term without the mutual agreement of the awarding authority and the contractor.

M. The Affirmative Action Plan required to be submitted hereunder and the pre-registration, pre-bid, pre-proposal or pre-award conference which may be required by the Board of Public Works, Office of Contract Compliance or the awarding authority shall, without limitation as to the subject or nature of employment activity, be concerned with such employment practices as: 1. Apprenticeship where approved programs are functioning, and other on-the-job training for non-apprenticeable occupations; 2. Classroom preparation for the job when not apprenticeable; 3. Pre-apprenticeship education and preparation; 4. Upgrading training and opportunities; 5. Encouraging the use of contractors, subcontractors and suppliers of all racial and ethnic groups, provided, however, that any contract subject to this ordinance shall require the contractor, subcontractor or supplier to provide not less than the prevailing wage, working conditions and practices generally observed in private industries in the contractor’s, subcontractor’s or supplier’s geographical area for such work; 6. The entry of qualified women, minority and all other journeymen into the industry; and 7. The provision of needed supplies or job conditions to permit persons with disabilities to be employed, and minimize the impact of any disability.

N. Any adjustments which may be made in the contractor’s or supplier’s work force to achieve the requirements of the City’s Affirmative Action Contract Compliance Program in purchasing and construction shall be accomplished by either an increase in the size of the work force or replacement of those employees who leave the work force by reason of resignation, retirement or death and not by termination, layoff, demotion or change in grade.

O. Affirmative Action Agreements resulting from the proposed Affirmative Action Plan or the pre-registration, pre-bid, pre-proposal or pre-award conferences shall not be confidential and may be publicized by the contractor at his or her discretion. Approved Affirmative Action Agreements become the property of the City and may be used at the discretion of the City in its Contract Compliance Affirmative Action Program.

P. This ordinance shall not confer upon the City of Los Angeles or any Agency, Board or Commission thereof any power not otherwise provided by law to determine the legality of any existing collective bargaining agreement

E-3 4843-6766-9443.3

and shall have application only to discriminatory employment practices by contractors or suppliers engaged in the performance of City contracts.

Q. All contractors subject to the provisions of this section shall include a like provision in all subcontracts awarded for work to be performed under the contract with the City and shall impose the same obligations, including but not limited to filing and reporting obligations, on the subcontractors as are applicable to the contractor. Failure of the contractor to comply with this requirement or to obtain the compliance of its subcontractors with all such obligations shall subject the contractor to the imposition of any and all sanctions allowed by law, including but not limited to termination of the contractor’s contract with the City. SECTION HISTORY Amended by Ord. No. 147,030, Eff. 4-28-75; Paragraphs A., B., C., Ord. No. 164,516, Eff. 4-13-89; Paragraphs B. and C., Ord. No. 168,244, Eff. 10-18-92; Title and Section, Ord. No. 173,186, Eff. 5-22-00; Subsec. F, Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00.

4843-6766-9443.3

EXHIBIT F

SECTION 10.10 OF THE LOS ANGELES ADMINISTRATIVE CODE

Sec. 10.10 Child Support Assignment Orders

a. Definitions. 1. Awarding Authority means a subordinate or component entity or person of the City (such as a City department or Board of Commissioners) that has the authority to enter into a contract or agreement for the provision of goods or services on behalf of the City of Los Angeles. 2. Contract means any agreement, franchise, lease or concession including an agreement for any occasional professional or technical personal services, the performance of any work or service, the provision of any materials or supplies, or the rendering of any service to the City of Los Angeles or to the public which is let, awarded or entered into with, or on behalf of, the City of Los Angeles or any awarding authority thereof. 3. Contractor means any person, firm, corporation, partnership or any combination thereof which submits a bid or proposal or enters into a contract with any awarding authority of the City of Los Angeles. 4. Subcontractor means any person, firm, corporation, partnership or any combination thereof who enters into a contract with a contractor to perform or provide a portion of any contract with the City. 5. Principal Owner means any person who owns an interest of 10 percent or more in a contractor or subcontractor as defined herein. b. Mandatory Contract Provisions. Every contract that is let, awarded or entered into with or on behalf of the City of Los Angeles shall contain a provision obligating the contractor or subcontractor to fully comply with all applicable State and Federal employment reporting requirements for the contractor or subcontractor’s employees. The contractor or subcontractor will also be required to certify that the principal owner(s) thereof are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally, that the contractor or subcontractor will fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments in accordance with California Family Code §§5230 et seq. and that the contractor or subcontractor will maintain such compliance throughout the term of the contract. Failure of a contractor or subcontractor to comply with all applicable reporting requirements or to implement lawfully served Wage and Earnings Assignments or Notices of Assignment or failure of the principal owner(s) to comply with any Wage and Earnings Assignments or Notices of Assignment applicable to them personally shall constitute a default under the contract. Failure of the contractor or subcontractor or principal owner thereof to cure the default within 90 days of notice of such default by the City shall subject the contract to termination. c. Notice to Bidders. Each awarding authority shall be responsible for giving notice of the provisions of this ordinance to those who bid on, or submit proposals for, prospective contracts with the City. d. Current Contractor Compliance. Within 30 days of the operative date of this ordinance, the City, through its operating departments, shall serve upon existing contractors a written request that they and their subcontractors (if any) comply with all applicable State and Federal employment reporting requirements for the contractor and subcontractor’s employees, that they certify that the principal owner(s) of the contractor and any subcontractor are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally, that the contractor and subcontractor will fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments in accordance with California Family Code §§5230 et seq. and that the contractor and subcontractor will maintain such compliance throughout the term of the contract. e. City’s Compliance with California Family Code. The City shall maintain its compliance with the provisions of California Family Code §§5230 et seq. and all other applicable law regarding its obligations as an employer to implement lawfully served Wage and Earnings Assignments and Notices of Assignment. f. Report of Employees’ Names to District Attorney. 1. The City shall maintain its current practice of assisting the District Attorney’s support enforcement activities by annually reporting to the Los Angeles County District Attorney the names of all of its employees and retirees so that the District Attorney may identify those employees and retirees subject to Wage and Earnings Assignment Orders and Notices of Assignment and may establish court orders for support, where appropriate. Should the District Attorney so request it, the City will provide such information on a more frequent basis. 2. All applicants for employment with the City of Los Angeles will be asked to acknowledge their responsibility to comply with any court-ordered support obligations and will be advised of the City’s practice of assisting the District Attorney as described in the provisions of Subsection f.1., above. SECTION HISTORY Added by Ord. No. 172,401, Eff.2-13-99

Fee Letter (Bank of America)

DRAFT

4329033

FEE LETTER

DATED SEPTEMBER [__], 2020

Reference is hereby made to that (i) certain Reimbursement Agreement dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Agreement”), by and between the DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES,CALIFORNIA (the “Department”) and BANK OF AMERICA, N.A. (the “Bank”) relating to the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes Subseries A-3 (Governmental - Non-AMT), Subseries B-3 (Private Activity - AMT), Subseries C-3 (Federally Taxable) and Subseries D-3 (Private Activity – Non-AMT) (collectively, the “Commercial Paper Notes”) and (ii) that certain Irrevocable Transferable Direct-Pay Letter of Credit dated the date hereof, issued by the Bank pursuant to the Agreement, supporting the Commercial Paper Notes (as amended, supplemented, modified or restated from time to time, the “Letter of Credit”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

The purpose of this Fee Letter is to confirm the agreement between the Bank and the Department with respect to certain fees and expenses payable by the Department to the Bank pursuant to the Agreement. This Fee Letter is the Fee Letter referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement. This Fee Letter and the Agreement are to be construed as one agreement between the Authority and the Bank, and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Agreement will be deemed to include all amounts, fees and expenses payable under this Fee Letter.

ARTICLE I. FEES.

Section 1.1. Letter of Credit Fees. The Department agrees to pay or cause to be paid to the Bank, on October 1, 2020, for the period commencing on the Closing Date, and ending on September 30, 2020, and in arrears on the first Business Day of each January, April, July and October occurring thereafter to the Letter of Credit Expiration Date, and on the Letter of Credit Expiration Date, a non-refundable facility fee (the “Letter of Credit Fee”) for each quarterly fee period, commencing on the first calendar day of such quarterly fee period and ending on the last calendar day of such quarterly fee period, in an amount equal to the product of the applicable rate per annum corresponding to the Level specified below in the pricing matrix associated with the Rating (as defined below) as specified below (the “Letter of Credit Fee Rate”) for each day during each related quarterly fee period multiplied by the Stated Amount of the Letter of Credit (without regard to any temporary reductions thereof that may be subject to reinstatement) for each day during each related quarterly fee period:

LEVEL MOODY’S RATING S&P RATING FITCH RATING

LETTER OF CREDIT

FEE RATE

Level 1: Aa3 or above AA- or above AA- or above 0.80%

Level 2: A1 A+ A+ 1.00%

Level 3: A2 A A 1.20%

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LEVEL MOODY’S RATING S&P RATING FITCH RATING

LETTER OF CREDIT

FEE RATE

Level 4: A3 A- A- 1.40%

Level 5: Baa1 BBB+ BBB+ 1.60%

Level 6: Baa2 BBB BBB 1.80%

Level 7: Baa3 BBB- BBB- 2.00%

The term “Rating” as used above shall mean the long-term unenhanced debt rating assigned by any of Moody’s, S&P or Fitch to Senior Lien Revenue Bonds or any bonds or notes of the Department secured by a senior lien on the Net Pledged Revenues and (i) if the ratings on such obligations are assigned by all three Rating Agencies, and two of such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the two equivalent ratings appear; (ii) if such ratings are assigned by all three Rating Agencies and no two such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the middle such rating appears; and (iii) if such ratings are assigned by only two Rating Agencies and such ratings are not equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the lower such rating appears (for the avoidance of doubt, Level 7 is the lowest Level, and Level 1 is the highest Level for purposes of the above pricing grid). In the event that any relevant rating is withdrawn, suspended or otherwise unavailable from any of Moody’s, S&P or Fitch for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency) or if any such rating falls below “Baa3” (or its equivalent) by Moody’s or “BBB-” (or its equivalent) by S&P or Fitch, in each such case, the Letter of Credit Fee Rate shall equal the Letter of Credit Fee Rate set forth in Level 7 plus 1.50% per annum, immediately and automatically and without notice to the Department. Upon the occurrence and during the continuance of any Event of Default (whether or not the Bank declares an Event of Default in connection therewith), the Letter of Credit Fee Rate shall equal the Letter of Credit Fee Rate then in effect plus 1.50% per annum, immediately and automatically and without notice to the Department. Any change in the Letter of Credit Fee Rate resulting from a reduction, withdrawal, suspension or unavailability of a relevant rating shall be and become effective as of and on the date of the announcement of the reduction, withdrawal, suspension or unavailability of such rating. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. The Department acknowledges that as of the Closing Date the Letter of Credit Fee Rate is that specified above for Level 1. In the event that the Letter of Credit Fees are not paid when due, interest shall accrue on the Letter of Credit Fees from the date payment is due until payment in full at the Default Rate, such interest to be payable on demand. Such Letter of Credit Fee shall be payable in immediately available funds and computed on the basis of a 360-day year and the actual number of days elapsed.

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Section 1.2. Draw Fee. The Department agrees to pay to the Bank in connection with each Drawing under the Letter of Credit, a non-refundable drawing fee in the amount of $295, payable on the date each such Drawing without notice or invoice to the Department.

Section 1.3. Amendment, Transfer, Waiver Fees and Other Fees and Expenses. Upon each transfer of the Letter of Credit in accordance with its terms or the appointment of a successor Trustee under the Master Subordinate Trust Indenture, the Department agrees to pay the Bank a non-refundable transfer fee in an amount equal to $2,500, and to reimburse the Bank for its actual costs and expenses associated with such transfer or appointment (including, without limitation, the reasonable fees and expenses of counsel to the Bank), payable on the date of such transfer or appointment.

The Department agrees to pay to the Bank on the date of each amendment, modification, or supplement of the Agreement, this Fee Letter, the Bank Note or the Letter of Credit or any amendment, modification, or supplement to any Program Document which requires the waiver or consent of the Bank, a non-refundable amendment, modification, supplement, waiver or consent fee in an amount equal to $2,500, and to reimburse the Bank for its actual costs and expenses associated with such amendment, modification, supplement, waiver or consent (including, without limitation, the reasonable fees and expenses of counsel to the Bank).

Section 1.4. Termination. Notwithstanding the foregoing or any other provision of the Agreement or this Fee Letter to the contrary, the Department agrees not to terminate, permanently reduce or replace the Agreement or the Letter of Credit prior to the Letter of Credit Expiration Date, except upon (i) the payment by the Department to the Bank of all Obligations payable under the Agreement and this Fee Letter and (ii) the Department providing the Bank with ten (10) days prior written notice of its intent to terminate the Agreement and the Letter of Credit; provided, that any such termination of the Agreement or the Letter of Credit shall be in compliance with the terms and conditions of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and the Agreement.

The Department agrees that all payments to the Bank referred to in the preceding paragraph shall be made in immediately available funds.

ARTICLE II. MISCELLANEOUS.

Section 2.1. Expenses. The Department shall pay the reasonable legal fees and expenses of the Bank incurred in connection with the preparation and negotiation of the Agreement, the Letter of Credit, this Fee Letter and certain other Related Documents in an amount not to exceed $45,000 (in each case plus disbursements). Legal fees shall be paid directly to the Bank’s counsel, Chapman and Cutler LLP, in accordance with the instructions provided by Chapman and Cutler LLP.

Section 2.2. Amendments. No amendment to this Fee Letter shall become effective without the prior written consent of the Department and the Bank.

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Section 2.3. Governing Law. This Fee Letter shall be governed by and construed in accordance with the internal laws of the State of New York; provided that, the Department’s obligations under this Fee Letter shall be governed by and construed in accordance with the internal laws of the State of California.

Section 2.4. Counterparts. This Fee Letter may be executed in two or more counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument; and any of the parties hereto may execute this Fee Letter by signing such counterpart. This Fee Letter may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.

Section 2.5. Severability. Any provision of this Fee Letter which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

Section 2.6. No Disclosure. Unless required by law, the Department shall not deliver or permit, authorize or consent to the delivery of this Fee Letter to any Dealer or any other Person unless the Bank provides its prior written consent.

[SIGNATURE PAGES FOLLOW]

Signature Page to Bank of America, N.A. Fee Letter

IN WITNESS WHEREOF, the parties hereto have caused this Fee Letter to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.


ANGELES, CALIFORNIA



Date: ____________, 2020

By Deputy/Assistant City Attorney

Signature Page to Bank of America, N.A. Fee Letter


By: ____________________________________ Name: Grace L. Barvin Title: Senior Vice President

Amended and Restated Reimbursement Agreement (including Bank Note) (Barclays)

DRAFT

1975291 4828-6752-2499.2

AMENDED AND RESTATED REIMBURSEMENT AGREEMENT

by and between

DEPARTMENT OF AIRPORTS OF

THE CITY OF LOS ANGELES, CALIFORNIA,

and

BARCLAYS BANK PLC

Relating to: Department of Airports of the City of Los Angeles, California

Los Angeles International Airport Subordinate Revenue Commercial Paper Notes

Subseries A-2 (Governmental – Non-AMT)Subseries B-2 (Private Activity – AMT)

Subseries C-2 (Federally Taxable) Subseries D-2 (Private Activity – Non-AMT) [fine to leave in]

Dated as of September 1, 2020

-i- 4828-6752-2499.2

TABLE OF CONTENTS

SECTION HEADING PAGE

ARTICLE I DEFINITIONS .................................................................................................3

ARTICLE II LETTER OF CREDIT ......................................................................................14

Section 2.01. Issuance of Letter of Credit..................................................................14Section 2.02. Letter of Credit Drawings ....................................................................15Section 2.03. Reimbursement of Certain Drawings Under the Letter of

Credit; Mandatory Prepayment; Interest ..............................................15Section 2.04. Reimbursement of Drawings Other Than Drawings

Creating Advances Under the Letter of Credit ....................................16Section 2.05. Fees ......................................................................................................16Section 2.06. Method of Payment; Etc ......................................................................17Section 2.07. Termination of Letter of Credit by the Department .............................17Section 2.08. Computation of Interest and Fees ........................................................17Section 2.09. Payment Due on Non-Business Day To Be Made on Next

Business Day ........................................................................................17Section 2.10. Late Payments ......................................................................................18Section 2.11. Source of Funds ...................................................................................18Section 2.12. Extension of Letter of Credit Expiration Date .....................................18Section 2.13. Net of Taxes, Etc..................................................................................18Section 2.14. Increased Costs ....................................................................................19Section 2.15. Maximum Rate; Payment of Fee .........................................................22Section 2.16. Security of Obligations ........................................................................23

ARTICLE III COMMERCIAL PAPER NOTES OPERATIONS ..................................................23

Section 3.01. Issuance Generally ...............................................................................23Section 3.02. Stop Issuance Instructions; Final Drawing Notice...............................23

ARTICLE IV CONDITIONS PRECEDENT ............................................................................25

Section 4.01. Conditions Precedent to Issuance of the Letter of Credit ....................25Section 4.02. Conditions Precedent to Advances ......................................................27

ARTICLE V REPRESENTATIONS AND WARRANTIES ........................................................28

Section 5.01. Organization; Existence .......................................................................28Section 5.02. Power and Authority ............................................................................28Section 5.03. Due Authorization, Etc ........................................................................28Section 5.04. Necessary Actions Taken .....................................................................29Section 5.05. No Contravention .................................................................................29Section 5.06. Compliance ..........................................................................................29Section 5.07. No Default ............................................................................................30Section 5.08. No Public Vote or Referendum............................................................30

-ii- 4828-6752-2499.2

Section 5.09. No Immunity ........................................................................................30Section 5.10. Litigation ..............................................................................................30Section 5.11. Disclosure ............................................................................................31Section 5.12. Financial Information...........................................................................31Section 5.13. Official Signatures ...............................................................................31Section 5.14. Incorporation of Representations and Warranties by

Reference .............................................................................................31Section 5.15. Environmental Matters.........................................................................32Section 5.16. Security ................................................................................................32Section 5.17. Investment Company Act ....................................................................32Section 5.18. Employee Benefit Plan Compliance ....................................................32Section 5.19. Pending Legislation and Decisions ......................................................33Section 5.20. Usury ....................................................................................................33Section 5.21. Margin Regulations ..............................................................................33Section 5.22. No Incorporation of Waiver of Jury Trial and Judicial

Reference in any Bank Agreements .....................................................33Section 5.23. Trustee; Dealer .....................................................................................33Section 5.24. Tax Status of Interest on Tax-Exempt Commercial Paper

Notes ....................................................................................................33Section 5.26. No Set-off Provisions ...........................................................................34

ARTICLE VI COVENANTS ................................................................................................35

Section 6.01. Maintenance of Existence ....................................................................35Section 6.02. Reports, Certificates and Other Information ........................................35Section 6.03. Maintenance of Books and Records ....................................................37Section 6.04. Access to Books and Records ..............................................................37Section 6.05. Compliance With Documents ..............................................................37Section 6.06. Compliance With Law .........................................................................38Section 6.07. Rate Covenant ......................................................................................38Section 6.08. Further Assurances...............................................................................38Section 6.09. No Impairment .....................................................................................39Section 6.10. Application of Note Proceeds ..............................................................39Section 6.11. Application of Drawings ......................................................................39Section 6.12. Trustee and Dealers..............................................................................39Section 6.13. Limitation on Additional Debt .............................................................40Section 6.14. Maintenance of Tax-Exempt Status of Commercial Paper

Notes ....................................................................................................40Section 6.15. Amendments to Senior Lien Trust Indenture and Program

Documents ...........................................................................................40Section 6.16. Ratings .................................................................................................41Section 6.17. Liens .....................................................................................................41Section 6.18. Book-Entry Eligibility .........................................................................41Section 6.19. Substitute Credit Facility or Refinancing ............................................42Section 6.20. Incorporation of Waiver of Jury Trial and Judicial

Reference from Bank Agreements .......................................................42

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Section 6.21. Immunity from Jurisdiction .................................................................43Section 6.22. Swap Contracts ....................................................................................43Section 6.23. Budget and Appropriation....................................................................43Section 6.24. Use of Bank’s Name ............................................................................43Section 6.25. Set-off Provisions in Other Documents ...............................................44Section 6.26. No Preferential Treatment....................................................................44Section 6.28. Outstanding Commercial Paper Notes .................................................44

ARTICLE VII DEFAULTS ...................................................................................................44

Section 7.01. Events of Default and Remedies ..........................................................44Section 7.02. Remedies ..............................................................................................48Section 7.03. Solely for the Benefit of Bank .............................................................49Section 7.04. Discontinuance of Proceedings ............................................................49

ARTICLE VIII CITY PROVISIONS ........................................................................................49

Section 8.01. Nondiscrimination and Affirmative Action Program. .........................49Section 8.02. Child Support Orders ...........................................................................50Section 8.03. Reserved ...............................................................................................51Section 8.04. Notice of Changes to LA Admin Code Provisions ..............................51Section 8.05. Compliance with Los Angeles City Charter Section

470(c)(12) ............................................................................................51Section 8.06. Adoption or Enaction of Changes, Additions,

Amendments or Modifications Not Applicable to Bank After Delivery of Tier Two Termination Notice. ................................52

ARTICLE IX MISCELLANEOUS ........................................................................................53

Section 9.01. Amendments, Waivers, Etc ..................................................................53Section 9.02. Notices .................................................................................................53Section 9.03. Survival of Covenants; Successors and Assigns ..................................55Section 9.04. Unconditional Obligations ...................................................................57Section 9.05. Liability of Bank: Indemnification ......................................................57Section 9.06. Expenses and Taxes .............................................................................59Section 9.07. No Waiver; Conflict .............................................................................60Section 9.08. Modification, Amendment, Waiver, Etc ..............................................60Section 9.09. Severability ..........................................................................................60Section 9.10. Counterparts .........................................................................................60Section 9.11. Table of Contents; Headings ................................................................61Section 9.12. Entire Agreement .................................................................................61Section 9.13. Governing Law ....................................................................................61Section 9.14. Right of Set-off ....................................................................................61Section 9.15. USA Patriot Act; Government Regulations .........................................61Section 9.16. Dealing with the Department, the Trustee, and/or the

Dealer. ..................................................................................................62Section 9.17. No Advisory or Fiduciary Responsibility ............................................62

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Section 9.18. Acknowledgement and Consent to Bail-in of EEA Financial Institutions ............................................................................62

Section 9.19. Electronic Execution of Certain Documents........................................63Section 9.20. Amendment and Restatement ..............................................................63

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APPENDIX I — Form of Irrevocable Transferable Direct-Pay Letter of Credit EXHIBIT A — Form of Tier One Stop Issuance Instruction EXHIBIT B — Form of Bank Note EXHIBIT C — Form of Request For Extension EXHIBIT D — Section 10.8.3 of the Los Angeles Administrative Code EXHIBIT E — Section 10.8.4 of the Los Angeles Administrative Code EXHIBIT F — Section 10.10 of the Los Angeles Administrative Code

4828-6752-2499.2

AMENDED AND RESTATED REIMBURSEMENT AGREEMENT

THIS AMENDED AND RESTATED REIMBURSEMENT AGREEMENT, dated as of September 1, 2020, is made by and between the DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES,CALIFORNIA, a duly constituted department of the City of Los Angeles, organized and existing pursuant to Article VI of the Charter of the City of Los Angeles (the “Department”) and BARCLAYS BANK PLC, and its successors and assigns (the “Bank”).

W I T N E S S E T H :

WHEREAS, the City of Los Angeles, California (the “City”) is a municipal corporation and chartered city duly organized and existing under and pursuant to the provisions of the Constitution of the State of California (the “State”) and the Charter of the City of Los Angeles (the “Charter”); and

WHEREAS, the Board of Airport Commissioners of the City (the “Board”) has possession, management and control of all airports, airport sites, and all equipment, accommodations and facilities for aerial navigation, flight, instruction and commerce belonging to the City and such other property the City may acquire or which is placed under the control of the City and the Department, including LAX, as herein defined, and other airport facilities, and has power to act for and on behalf of the City with respect to the Department and LAX, all as provided for and defined in Article VI of the Charter; and

WHEREAS, Section 609 of the Charter provides that the Department shall have the power to borrow money, from time to time, for the purposes listed in said Section 609, and further provides that the Department may issue notes, or other forms of debt instruments, payable from the revenues of the Department, for any lawful purpose relating to the Department, including, without limitation, to evidence indebtedness and to refund from time to time, whether at or prior to maturity, any outstanding indebtedness evidenced by bonds, notes or other forms of debt, of the Department; and

WHEREAS, pursuant to the Master Trust Indenture, dated as of April 1, 1995, as amended and supplemented (the “Senior Lien Trust Indenture”), by and between the Department, acting through the Board, and The Bank of New York Mellon Trust Company, N.A., formerly known as The Bank of New York Trust Company, N.A., as successor in interest to BNY Western Trust Company, as successor in interest to U.S. Trust Company of California, N.A., as trustee thereunder (the “Senior Lien Trustee”), the Department is authorized to issue “Bonds” (as defined in the Senior Lien Trust Indenture) secured by and payable from a pledge of Net Pledged Revenues (as hereinafter defined); and

WHEREAS, under the terms of the Senior Lien Trust Indenture, the Board may create a charge or lien on the Net Pledged Revenues ranking junior and subordinate to the charge or lien of the Bonds issued pursuant to the Senior Lien Trust Indenture; and

WHEREAS, pursuant to the Master Subordinate Trust Indenture, dated as of December 1, 2002, as amended (the “Master Subordinate Trust Indenture”), by and between the Department

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and U.S. Bank National Association, as trustee (the “Trustee”), the Department is authorized to issue Subordinate Obligations (as hereinafter defined) payable from and secured by a pledge of and lien on Subordinate Pledged Revenues (as hereinafter defined); and

WHEREAS, the Master Subordinate Trust Indenture provides, in Section 2.09 thereof, for the issuance of Subordinate Obligations and, in Section 10.02 thereof, for the execution and delivery of Supplemental Subordinate Indentures setting forth the terms of such Subordinate Obligations, and the Department and the Trustee have heretofore executed and delivered certain Supplemental Subordinate Indentures pursuant to the terms of the Master Subordinate Trust Indenture; and

WHEREAS, pursuant to Resolution No. 21434, adopted by the Board on June 6, 2001, and approved by the City Council of the City on July 17, 2001, the Board established a continuous short-term financing program for the Department with respect to LAX by providing for the issuance, from time to time, of short-term revenue notes, including commercial paper notes, payable by the Department from the LAX Revenue Account of the Airport Revenue Fund established pursuant to the Charter; and

WHEREAS, in compliance with the terms of the Master Subordinate Trust Indenture, for the purpose of providing money to finance and refinance certain capital improvements to LAX, the Department and the Trustee have executed and delivered that certain Seventh Supplemental Subordinate Indenture dated as of March 1, 2012, as amended (the “Seventh Supplemental Subordinate Trust Indenture”) for the purpose of issuing, from time to time, Subordinate Obligations in the form of commercial paper notes, including, but not limited to, its Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries A-2 (Governmental - Non-AMT), Subseries B-2 (Private Activity - AMT), Subseries C-2 (Federally Taxable), and Subseries D-2 (Private Activity - Non-AMT) (collectively, the “Commercial Paper Notes”); and

WHEREAS, the Department has requested the Bank to issue a letter of credit for the payment by the Trustee, when and as due, of the principal of and interest on the Commercial Paper Notes, and to provide such credit facility in the form of a Drawing (as herein defined) under the Letter of Credit (as herein defined); and

WHEREAS, the Bank is willing to issue such letter of credit and to provide such credit facility upon the terms and conditions provided herein;

NOW THEREFORE, in consideration of the premises and the mutual agreements herein contained and in order to induce the Bank to issue the Letter of Credit, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Department and the Bank agree as follows:

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ARTICLE I

DEFINITIONS

As used in this Agreement:

“Advance” has the meaning set forth in Section 2.03(a) hereof.


“Agreement” means this Reimbursement Agreement, as amended, supplemented and otherwise modified from time to time in accordance with the terms hereof.

“Amortization End Date” means, with respect to any Advance, the earliest to occur of: (i) the third (3rd) anniversary of the date on which the related Advance was made, (ii) the date on which a substitute Credit Facility becomes effective in substitution of the Letter of Credit with respect to the Commercial Paper Notes, (iii) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default, and (iv) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

“Authorized Representative” has the meaning set forth in the Master Subordinate Trust Indenture.

“Bail-In Action” means the exercise by a resolution authority of any write-down or conversion power existing from time to time (including, without limitation, any power to amend or alter the maturity of eligible liabilities of an institution under resolution or amend the amount of interest payable under such eligible liabilities or the date on which interest becomes payable, including by suspending payment for a temporary period and together with any power to terminate and value transactions) under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom relating to the transposition of the Bank Recovery and Resolution Directive, as amended from time to time, including but not limited to, the Banking Act 2009 as amended from time to time, and the instruments, rules and standards created thereunder, pursuant to which the Bank’s obligations (or those of its Affiliates) can be reduced (including to zero), cancelled or converted into shares, other securities, or other obligations of the Bank or any other person.

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“Bank” has the meaning set forth in the introductory paragraph hereof.

“Bank Agreement” means any credit agreement, liquidity agreement, standby bond purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase agreement, or other agreement or instrument (or any amendment, supplement or other modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) to make or provide funds to make payment of, or to purchase (other than in connection with a public offering) or provide credit enhancement for, bonds or notes of the Department secured by or payable from Subordinate Pledged Revenues.

“Bank Note” has the meaning set forth in Section 2.03(d) hereof.

“Bank Rate” means the rate of interest per annum with respect to an Advance (a) for any day commencing on the date such Advance is made to and including the 60th day next succeeding the date such Advance is made, equal to the Base Rate; (b) for any day commencing on the 61st

day next succeeding the date such Advance is made to and including the 180th day next succeeding the date such Advance is made, equal to the sum of the Base Rate from time to time in effect plus one percent (1.00%) (provided that component (iii) of the Base Rate shall not be subject to the one percent (1.00%) increase); and (c) for any day commencing on the 181st day next succeeding the date such Advance is made and thereafter, equal to the sum of the Base Rate from time to time in effect plus two percent (2.00%) (provided that component (iii) of the Base Rate shall not be subject to the two percent (2.00%) increase); provided, however, that immediately and automatically upon the occurrence of an Event of Default (and without any notice given with respect thereto) and during the continuance of such Event of Default, “Bank Rate” shall mean the Default Rate; and provided further that, at no time shall the Bank Rate be less than the applicable rate of interest on any outstanding Commercial Paper Notes.

“Bank’s Counsel” has the meaning set forth in Section 4.01 hereof.

“Base Rate” means, for any day, the rate of interest per annum equal to the highest of(i) the Prime Rate plus two and one-half of one percent (2.50%), (ii) the Federal Funds Rate plustwo and one-half of one percent (2.50%), (iii) one hundred fifty percent (150%) of the yield on the 30-Year United States Treasury bond, and (iv) eight percent (8.00%). Each determination of the Base Rate by the Bank shall be conclusive and binding on the Department absent manifest error.

“Board” has the meaning set forth in the recitals hereof.

“Bond Counsel” means Kutak Rock LLP or another nationally recognized bond counsel firm selected by the Department.

“Business Day” means any day other than (a) a Saturday, Sunday, or other day on which commercial banks located in the States of New York or California are authorized or required by law or executive order to close, (b) a day on which the presentation office for Drawings under the Letter of Credit is authorized or required by law or executive order to close and (c) a day on which the New York Stock Exchange is closed.

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“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, including, without limitation, Risk Based Capital Guidelines, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, if enacted, adopted, issued or promulgated after the Closing Date.

“Charter” has the meaning set forth in the recitals hereof.

“City” has the meaning set forth in the recitals hereof.

“Closing Date” means the later of September 13, 2017, and the date on which all of the conditions precedent to the issuance of the Letter of Credit set forth in Section 4.01 hereof are satisfied or waived in the Bank’s sole discretion.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and all rules and regulations from time to time promulgated thereunder.

“Commercial Paper Notes” has the meaning set forth in the recitals hereof.

“Commercial Paper Program” has the meaning set forth in the Master Subordinate Trust Indenture.

“Controlled Group” means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Department or any subsidiary, are treated as a single employer under Section 414 of the Code.

“Credit Facility” has the meaning set forth in the Master Subordinate Trust Indenture.

“Dealer” means, as the context requires, [Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, BofA Securities, Inc., Morgan Stanley & Co.

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LLC, Samuel A. Ramirez & Co., Inc. and Wells Fargo Bank, National Association or their respective successors and assigns.]1

“Dealer Agreement” means, as the context requires, [(a) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Citigroup Global Markets Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (b) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and J.P. Morgan Securities LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (c) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Loop Capital Markets LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (d) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and BofA Securities, Inc., as successor to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (e) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Morgan Stanley & Co. LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (f) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Samuel A. Ramirez & Co., Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (g) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Wells Fargo Bank, National Association, as dealer, and any and all modifications, alterations, amendments and supplements thereto.]2

“Debt” of any Person means at any date and without duplication, (i) all obligations of such Person for borrowed money, and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (ii) all direct or contingent obligations of such Person arising under letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar instruments, (iii) Capital Lease Obligations, (iv) all obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable arising in the ordinary course of business (including, without limitation, accounts payable to construction contractors and other professionals for services rendered), (v) all indebtedness of others secured by a lien on any asset of such Person, whether or not such indebtedness is assumed by such Person, (vi) all indebtedness of others guaranteed by, or secured by any of the revenues or assets of, such Person and (vii) payment obligations of such Person under any Swap Contract.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

1 To be confirmed.

2 To be confirmed.

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“Default” means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Default Rate” means a fluctuating interest rate per annum equal to the sum of the Base Rate from time to time in effect plus four percent (4.00%).

“Department” has the meaning set forth in the recitals hereof.


“Drawing” has the meaning assigned to that term in the Letter of Credit.

“DTC” means The Depository Trust Company and any successor or replacement thereto as securities depository.

“Effective Date” means September [__], 2020.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and all rules and regulations from time to time promulgated thereunder, or any successor statute.

“Event of Default” has the meaning set forth in Section 7.01 hereof.

“Existing Bank Note” means that certain Bank Note dated September 13, 2017, delivered by the Department to the Bank in connection with the issuance of the Existing Letter of Credit.

“Existing Letter of Credit” means that certain Irrevocable Transferable Direct-Pay Letter of Credit No. SB-03279 dated September 13, 2017, issued by the Bank, pursuant to the Existing Reimbursement Agreement.

“Existing Reimbursement Agreement” means that certain Reimbursement Agreement dated as of September 1, 2017, as amended and restated pursuant to this Agreement.

“Federal Funds Rate” means for any day the rate of interest per annum as determined by the Bank at which overnight Federal Funds are offered to the Bank for such day by major banks in the interbank market, with any change in such rate to become effective as to the Department on the date of any change in such rate. Each determination of the Federal Funds Rate by the Bank shall be deemed conclusive and binding on the Department absent manifest error. Notwithstanding anything herein to the contrary, if the Federal Funds Rate as determined as provided above would be less than zero percent (0.0%) on any day, then the Federal Funds Rate shall be deemed to be zero percent (0.0%) for such day.

“Fee Letter” means that certain Amended and Restated Fee Letter dated the Effective Date, between the Department and the Bank, as amended, supplemented, modified or restated from time to time in accordance with its terms.

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“Final Drawing Notice” means a Tier One Final Drawing Notice or a Tier Two Termination Notice, as applicable.

“Fiscal Year” means the period of time beginning on July 1 of each given year and ending on June 30 of the immediately subsequent year, or such other period designated by the Board as the Department’s fiscal year.

“Fitch” means Fitch Ratings, Inc., and any successor rating agency.

“FRB” means the Board of Governors of the Federal Reserve System of the United States, together with any successors thereof.

“GAAP” means generally accepted accounting principles in the United States as in effect from time to time, applied by the Department on a basis consistent with the Department’s most recent financial statements furnished to the Bank pursuant to Section 5.12 hereof.

“Governmental Authority” means any national, supranational, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasigovernmental, judicial, administrative, public or statutory instrumentality, authority, body, agency, department, commission, bureau, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative powers or functions of or pertaining to government, or any arbitrator, mediator or other Person with authority to bind a party at law.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Debt or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including, without limitation, any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Debt or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Interest Payment Date” means the first Business Day of each calendar month.

“Investment Grade” means a rating of “Baa3” (or its equivalent) or better by Moody’s and “BBB-” (or its equivalent) or better by S&P or Fitch.

“LAX” has the meaning set forth in the Senior Lien Trust Indenture.

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“Letter of Credit” means the amended and restated irrevocable transferable direct-pay letter of credit issued by the Bank for the account of the Department in favor of the Trustee supporting the Commercial Paper Notes, in the form of Appendix I hereto with appropriate insertions, which amends and restates the Existing Letter of Credit, as from time to time amended and supplemented pursuant to its terms.

“Letter of Credit Expiration Date” means September [___], 2023, the date set forth in the Letter of Credit as the date on which the Letter of Credit is stated to expire, as the same may be extended pursuant to Section 2.12 hereof.

“Letter of Credit Fees” has the meaning set forth in the Fee Letter.

“Lien” on any asset means any mortgage, deed of trust, lien, pledge, charge, security interest, hypothecation, assignment, deposit arrangement or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected or effective under applicable law, as well as the interest of a vendor or lessor under any conditional sale agreement, capital or finance lease or other title retention agreement relating to such asset.

“Master Subordinate Trust Indenture” means that certain Master Subordinate Trust Indenture, dated as of December 1, 2002, by and between the Department and U.S. Bank National Association, as trustee, as heretofore amended and as amended from time to time by Supplemental Subordinate Indentures in accordance with the terms thereof and hereof.

“Material Adverse Change” or “Material Adverse Effect” means the occurrence of any event or change which results in a material and adverse change in the business, condition (financial or otherwise) or operations of the Department or LAX or which materially and adversely affects (a) the enforceability of this Agreement, the Bank Note, the Fee Letter or any of the other Program Documents, (b) the ability of the Department to perform its obligations hereunder or thereunder or (c) the rights, security, interest or remedies available to the Bank under this Agreement or the other Program Documents.

“Maximum CP Rate” means the lesser of (a) 12% per annum, and (b) the maximum rate of interest permitted by applicable law.

“Maximum Rate” means, the lesser of (a) the maximum non-usurious lawful rate of interest permitted by applicable law, and (b) 20%.

“Measure H Ordinance” has the meaning set forth in Section 8.05 hereof.

“Measure H Subcontract” has the meaning set forth in Section 8.05 hereof.

“Moody’s” means Moody’s Investors Service, Inc., and any successor rating agency.

“Net Pledged Revenues” has the meaning set forth in the Senior Lien Trust Indenture.

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“New Tier Two Termination Notice” means the written notice, in the form attached as Annex J to the Letter of Credit, given by the Bank to the Department and the Trustee pursuant to Section 3.02(c) hereof.

“Notes” means the Commercial Paper Notes and the Bank Note.

“Obligations” means the Reimbursement Obligations (which includes amounts payable to the Bank evidenced by the Bank Note), the Letter of Credit Fees, the obligations of the Department to pay all fees, charges and expenses payable hereunder, under the Fee Letter and under the Bank Note, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Department of any proceeding under any Debtor Relief Laws naming the Department as the debtor in such proceeding, and all other payment obligations of the Department owed to the Bank arising under or in relation to this Agreement, the Fee Letter and the Bank Note.


“Offering Memorandum” means the Commercial Paper Offering Memorandum dated September [__], 2020, relating to the Commercial Paper Notes, among others, and any supplements and amendments thereto.

“Original Stated Amount” has the meaning set forth in Section 2.01 hereof.

“Participant” has the meaning set forth in Section 9.03(b) hereof.

“Participant/Subcontractor Notice” has the meaning set forth in Section 8.05 hereof.

“Patriot Act” has the meaning set forth in Section 9.15 hereof.

“Payment Office” means Barclays Bank PLC, 745 Seventh Avenue, New York, New York 10019, Attention: Letter of Credit, Facsimile: (212) 412-5011, ABA Number: 026002574, Account Number: 050019104, Account Name: CLAD Account, Reference: City of Los Angeles Dept. of Airports Letter of Credit No. SB-02040, or such other office as the Bank may designate from time to time.

“Person” means an individual, a corporation, a partnership, an association, a limited liability company, a trust or any other entity or organization, including a government or political subdivision or any agency or instrumentality thereof.

“Plan” means, with respect to the Department and each subsidiary at any time, an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group of which the Department or such subsidiary is a part, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a

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member of the Controlled Group of which the Department or such subsidiary is a part is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

“Pledged Revenues” has the meaning set forth in the Senior Lien Trust Indenture.

“Prime Rate” means, for any day, the rate per annum established by the Bank from time to time as its “prime rate” for U.S. dollar loans, or its equivalent, as is in effect on such day, any change in such rate to be effective on the date such change is effective for the Bank’s purposes, it being understood that such rate shall not necessarily be the best or lowest rate of interest available to the Bank’s best or most preferred prime, large commercial customers. Each determination of the Prime Rate by the Bank shall be conclusive and binding on the Department absent manifest error. The Prime Rate is a reference rate only, and the Bank may make loans from time to time at interest rates above, equal to or below the Prime Rate. Notwithstanding anything herein to the contrary, if the Prime Rate as determined as provided above would be less than zero percent (0.0%) on any day, then the Prime Rate shall be deemed to be zero percent (0.0%) for such day.

“Principal” means, with respect to the Bank or a Participant or a Subcontractor, each of the following: (i) the chairman/chairwoman of the Bank’s or Participant’s or Subcontractor’s (as applicable) Board of Directors; (ii) each of the Bank’s or the Participant’s or Subcontractor’s (as applicable) president, chief executive officer, and chief operating officer (and the functional equivalent of each such position); (iii) any individual who holds an ownership interest in the Bank or the Participant or the Subcontractor (as applicable) of twenty percent or more; (iv) any individual employee of the Bank described in Section 49.7.30.A.8.(c) of the Los Angeles Municipal Code and identified on a disclosure form submitted on the Closing Date pursuant to the Measure H Ordinance, which as of the Closing Date is titled “Bidder Contributions CEC Form 55”; and (v) any individual employee of the Participant or Subcontractor (as applicable) described in Section 49.7.30.A.8.(c) of the Los Angeles Municipal Code and identified on a disclosure form submitted by such Participant or Subcontractor (as applicable) pursuant to the Measure H Ordinance.

“Private Activity Notes” means the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries B-2 (Private Activity - AMT), and the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries D-2 (Private Activity – Non-AMT).

“Program Documents” means this Agreement, the Letter of Credit, the Fee Letter, the Bank Note, each Dealer Agreement, the Commercial Paper Notes, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and any documents related to any of the foregoing or executed in connection therewith, and any and all future renewals and extensions or restatements of, or amendments or supplements to, any of the foregoing permitted hereunder and thereunder.

“Provider” has the meaning set forth in Section 6.20 hereof.

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“Rating Agencies” means Fitch, Moody’s and S&P.

“Rating Documentation” has the meaning set forth in Section 4.01(k) hereof.

“Reduction Fee” has the meaning set forth in the Fee Letter.

“Reduction in Amount” has the meaning set forth in Section 2.14 hereof.

“Reimbursement Obligations” means any and all obligations of the Department to reimburse the Bank for any Drawings under the Letter of Credit and all obligations to repay the Bank for any Advance, including in each instance all interest accrued thereon.

“Resolution” means Resolution No. [___________], adopted by the Board on [July 30/August 6], 2020.

“Sanctions” means any international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

“S&P” means S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC, and any successor rating agency.

“Secured Debt” has the meaning set forth in Section 7.01(d) hereof.

“Senior Lien Revenue Bonds” has the meaning set forth in the Master Subordinate Trust Indenture.

“Senior Lien Trustee” has the meaning set forth in the recitals hereof.

“Senior Lien Trust Indenture” means that certain Master Trust Indenture dated as of April 1, 1995, by and between the Department, acting through the Board, and the Senior Lien Trustee, as heretofore amended and supplemented and as amended and supplemented from time to time in accordance with the terms thereof and hereof.

“Seventh Supplemental Subordinate Trust Indenture” means that certain Seventh Supplemental Subordinate Trust Indenture, dated as of March 1, 2012, by and between the Department and U.S. Bank National Association, as trustee, as amended and supplemented from time to time in accordance with the terms thereof and hereof.

“State” means the State of California.

“Stated Amount” means, as of any date, the maximum amount which by the terms of the Letter of Credit is available to be drawn under the Letter of Credit as of such date.

“Stop Issuance Instruction” means either a Tier One Stop Issuance Instruction or a Tier Two Termination Notice, as applicable.

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“Subcontractor” means a Person, other than the Bank or an employee of the Bank, who is expected to receive at least $100,000 as a result of performing some or all of the Bank’s obligations hereunder.

“Subordinate Obligation” has the meaning as set forth in the Master Subordinate Trust Indenture.

“Subordinate Pledged Revenues” has the meaning set forth in the Master Subordinate Trust Indenture.

“Subordinated Obligations” has the meaning as set forth in the Senior Lien Trust Indenture.

“Supplemental Subordinate Indenture” has the meaning as set forth in the Master Subordinate Trust Indenture.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, total return swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Tax-Exempt Commercial Paper Notes” means Commercial Paper Notes for which an opinion of Bond Counsel relating to the exclusion of the interest thereof from gross income for purposes of federal income taxation has been delivered. Tax-Exempt Commercial Paper Notes includes the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, and Subordinate Revenue Commercial Paper Notes, Subseries A-2 (Governmental - Non-AMT), Subseries B-2 (Private Activity - AMT), and Subseries D-2 (Private Activity – Non-AMT).

“Termination Date” has the meaning set forth in the Letter of Credit.

“Termination Fee” has the meaning set forth in the Fee Letter.

“Tier One Final Drawing Notice” has the meaning set forth in the Letter of Credit.

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“Tier One Stop Issuance Instruction” means the written instruction, in the form attached as Exhibit A hereto, given by the Bank to the Department and the Trustee pursuant to Section 3.02(b) hereof or Section 7.02(b) hereof.

“Tier Two Termination Date” has the meaning set forth in Section 3.02(a) hereof.

“Tier Two Termination Notice” means the written notice, in the form attached as Annex I to the Letter of Credit, given by the Bank to the Department and the Trustee pursuant to Section 3.02(c) hereof.

“Trustee” has the meaning set forth in the recitals hereof.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms. Any capitalized terms used herein which are not specifically defined herein shall have the same meanings herein as in the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or the Senior Lien Trust Indenture, as applicable. All references in this Agreement to times of day shall be references to New York City time (daylight or standard, as applicable) unless otherwise expressly provided herein. Unless otherwise inconsistent with the terms of this Agreement, all accounting terms shall be interpreted and all accounting determinations hereunder shall be made in accordance with GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Program Document, and either the Department or the Bank shall so request, the Bank and the Department shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (A) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (B) the Department shall provide to the Bank financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

ARTICLE II

LETTER OF CREDIT

Section 2.01. Amendment and Restatement of Letter of Credit. Upon fulfillment of all of the conditions precedent set forth in Section 4.01 hereof and on the terms and conditions set forth herein and relying upon the representations and warranties set forth in this Agreement or incorporated herein by reference, the Bank agrees to amend and restate the Existing Letter of Credit by issuing the Letter of Credit in substantially the form of Appendix I hereto. Upon the effectiveness of such amendment and restatement, the Letter of Credit shall be in the original stated amount of $228,900,000) (calculated as the sum of the maximum principal amount of the Commercial Paper Notes supported by the Letter of Credit (i.e., $210,000,000) plus interest thereon at a maximum rate of twelve percent (12%) per annum for a period of two hundred seventy (270) days calculated on the basis of a year of 360 days) (the “Original Stated Amount”).

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Section 2.02. Letter of Credit Drawings. The Trustee is authorized to make Drawings under the Letter of Credit in accordance with its terms. The Department hereby directs the Bank to make payments under the Letter of Credit in the manner therein provided. The Department hereby irrevocably approves reductions and reinstatements of the Stated Amount with respect to the Letter of Credit as provided in the Letter of Credit.

Section 2.03. Reimbursement of Certain Drawings Under the Letter of Credit; Mandatory Prepayment; Interest. (a)(i) If the conditions precedent set forth in Section 4.02 hereof are satisfied at the time of payment by the Bank of any Drawing, such Drawing made under the Letter of Credit shall constitute an advance (“Advance”) to the Department.

(ii) The Department promises to pay to the Bank the interest portion of each Advance on the date of the related Drawing.

(iii) The Department promises to pay or cause to be paid to the Bank the principal portion of each Advance on the earliest to occur of (A) the third (3rd) anniversary of the date on which the related Advance was made, (B) the date on which a substitute Credit Facility becomes effective in substitution of the Letter of Credit with respect to the Commercial Paper Notes, (C) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default and (D) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

(iv) Subject to Section 2.10 hereof, the Department also promises to pay to the Bank interest on the unpaid principal amount of each Advance from the date such Advance is made until it is paid in full as provided herein, at a rate per annum equal to the Bank Rate from time to time in effect, and such interest shall be payable monthly in arrears on the first Business Day of each calendar month for the immediately preceding calendar month (commencing on the first Interest Payment Date to occur after the making of the related Advance), and on the date that the final principal or interest portion of such Advance is payable as herein provided.

(v) Unless otherwise paid in full on one of the dates provided above, the principal portion of each Advance shall be payable by the Department in equal quarterly installments (“Quarterly Principal Payments”) commencing on the first Business Day of the sixth calendar month immediately succeeding the date such Advance is made, and on the first Business Day of each third calendar month thereafter, with the final installment in an amount equal to the entire then outstanding principal amount of such Advance due and payable on the Amortization End Date (the period commencing on the date such installment is initially payable and ending on the Amortization End Date is referred to as the “Amortization Period”). Each Quarterly Principal Payment shall be that amount of principal which will result in equal (as nearly as possible) aggregate Quarterly Principal Payments over the applicable Amortization Period.

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(b) Any Advance may be prepaid in whole or in part on the day such Advance is made. Any Advance created pursuant to paragraph (a)(i) above may be prepaid in whole or in part without premium or penalty on any other Business Day upon one Business Day’s prior written notice to the Bank.

(c) Upon the Bank’s receipt of any payment or prepayment of any Advance, the amount of such Advance shall be reduced by the amount of such payment or prepayment.

(d) All Reimbursement Obligations shall be made against and evidenced by the Department’s promissory note payable to the order of the Bank in the principal amount of the Original Stated Amount, such note to be executed by the Department and delivered by the Department to the Bank on the Effective Date in the form of Exhibit B attached hereto with appropriate insertions (the “Bank Note”). All Reimbursement Obligations due and owing to the Bank and all payments and prepayments on the account of the principal of and interest on each Reimbursement Obligation by or on behalf of the Department shall be recorded by the Bank on its books and records, which books and records shall, absent manifest error, be conclusive as to amounts due and owing by the Department hereunder, under the Fee Letter and under the Bank Note. Any failure to so record or any error in doing so shall not, however, limit, extinguish or in any way modify or otherwise affect the obligation of the Department hereunder to pay any amount owing with respect to the Reimbursement Obligations. The Department shall pay principal and interest on the Bank Note on the dates and at the rates provided for in Sections 2.03 and 2.04 hereof. The Department’s obligations to repay the Reimbursement Obligations and to pay interest thereon as provided herein shall be evidenced and secured by the Bank Note, and the Department shall, without duplication (i) make a principal payment on the Bank Note on each date on which the Department is required to make a principal payment on Reimbursement Obligations in an amount equal to the principal payment due on such date and (ii) pay interest on the Bank Note on each date on which the Department is required to make an interest payment with respect to Reimbursement Obligations in an amount equal to the interest payment due on such date. The payment of the principal of and interest on the Bank Note shall constitute payment of the principal of and interest on the related Reimbursement Obligations and the payment of the principal of and interest on the Reimbursement Obligations shall constitute the payment of and principal and interest on the Bank Note and the failure to make any payment on any Reimbursement Obligation when due shall be a failure to make a payment on the Bank Note and the failure to make any payment on the Bank Note when due shall be a failure to make a payment on the related Reimbursement Obligation.

Section 2.04. Reimbursement of Drawings Other Than Drawings Creating Advances Under the Letter of Credit. Unless the conditions precedent contained in Section 4.02 hereof are satisfied on the date of payment by the Bank of a Drawing, the Department agrees to reimburse the Bank for the full amount of such Drawing immediately upon payment by the Bank of such Drawing and on the date of each such payment. If the Department does not make such reimbursement to the Bank with respect to such Drawing on such date, such Reimbursement Obligation shall bear interest at the Default Rate and be payable upon demand.

Section 2.05. Fees. The Department hereby agrees to perform the obligations provided for in the Fee Letter, including, without limitation, the payment of any and all fees, expenses and other

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amounts provided for therein, on the dates, at the times and in the amounts set forth in the Fee Letter. Without limiting the generality of the foregoing, in the event that the Letter of Credit is terminated or the Stated Amount is reduced and is not subject to reinstatement, the Department shall pay to the Bank the Termination Fee and/or Reduction Fee, if any, at the times and in the amounts set forth in and as required by the Fee Letter. The terms and provisions of the Fee Letter are hereby incorporated herein by reference as if fully set forth herein. The Fee Letter and this Agreement shall be construed as one agreement between the Department and the Bank and any reference to this Agreement shall be deemed to include a reference to the Fee Letter. All references to amounts or obligations due hereunder or in this Agreement shall be deemed to include all amounts and obligations (including without limitation fees and expenses) under the Fee Letter and all obligations under the Fee Letter shall be construed as obligations hereunder. All fees paid under this Agreement and the Fee Letter shall be fully earned when due and nonrefundable when paid.

Section 2.06. Method of Payment; Etc. All payments to be made by the Department under this Agreement and the Fee Letter shall be made in lawful money of the United States and in immediately available funds at the Payment Office of the Bank, not later than 4:00 p.m., New York City time, on the date when due and shall be made by wire transfer in lawful money of the United States of America in freely transferable and immediately available funds. All payments to be made by the Department shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Any payment received by the Bank after 4:00 p.m., New York City time, shall be deemed to have been received by the Bank on the next Business Day and any applicable interest or fee shall continue to accrue.

Section 2.07. Termination of Letter of Credit by the Department. Notwithstanding any provisions of this Agreement, the Letter of Credit or any Program Document to the contrary, the Department agrees not to terminate the Letter of Credit except upon (i) the payment by the Department to the Bank of the Termination Fee or Reduction Fee, if any, in the amount set forth in the Fee Letter, (ii) the payment to the Bank of all fees, expenses and other Obligations payable hereunder and under the Fee Letter, including, without limitation, all principal and accrued interest due and owing on any Drawing or Advances or any amount due under the Bank Note and (iii) the Department providing the Bank with thirty (30) days prior written notice of its intent to terminate the Letter of Credit. All payments from the Department to the Bank referred to in this Section 2.07 shall be made with immediately available funds on or before the date of termination.

Section 2.08. Computation of Interest and Fees. Fees payable hereunder and under the Fee Letter shall be calculated on the basis of a year of 360 days and the actual number of days elapsed. All computations of interest payable by the Department under this Agreement shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual number of days elapsed. Interest shall accrue during each period during which interest is computed from and including the first day thereof to but excluding the last day thereof.

Section 2.09. Payment Due on Non-Business Day To Be Made on Next Business Day. If any sum becomes payable pursuant to this Agreement or the Fee Letter on a day which is not a Business Day, the date for payment thereof shall be extended, without penalty, to the next

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succeeding Business Day, and such extended time shall be included in the computation of interest and fees.

Section 2.10. Late Payments. If any amount of any Obligation is not paid when due or upon the occurrence of any other Event of Default, all Obligations shall bear interest until paid in full at a rate per annum equal to the Default Rate, payable upon demand.

Section 2.11. Source of Funds. All payments made by the Bank pursuant to the Letter of Credit shall be made from funds of the Bank, and not from the funds of any other Person.

Section 2.12. Extension of Letter of Credit Expiration Date. If the Department on any date not earlier than one hundred twenty (120) days and not later than sixty (60) days prior to the then current Letter of Credit Expiration Date, submits to the Bank a written request for an extension of the Letter of Credit Expiration Date in the form of Exhibit C hereto for a period as specified in such written request, the Bank will make reasonable efforts to respond to such request within thirty (30) days after receipt of all information necessary, in the Bank’s reasonable judgment, to permit the Bank to make an informed credit decision. In the event the Bank fails to definitively respond to such request within such period of time, the Bank shall be deemed to have refused to grant the extension requested. The Bank may, in its sole and absolute discretion, decide to accept or reject any such proposed extension and no extension shall become effective unless the Bank shall have consented thereto in writing. The consent of the Bank, if granted, shall be conditioned upon the preparation, execution and delivery of documentation in form and substance reasonably satisfactory to the Bank and consistent with this Agreement and the Letter of Credit. If such an extension request is accepted by the Bank in its sole and absolute discretion, the then current Letter of Credit Expiration Date shall be extended to the date agreed to by the Department and the Bank.

Section 2.13. Net of Taxes, Etc.

(a) Taxes. Any and all payments to the Bank by the Department hereunder and under the Fee Letter shall be made free and clear of and without deduction for any and all taxes, levies, imposts, deductions, charges, withholdings or liabilities imposed thereon, excluding, however, taxes imposed on or measured by the net income or capital of the Bank by any jurisdiction or any political subdivision or taxing authority thereof or therein solely as a result of a connection between the Bank and such jurisdiction or political subdivision (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “Taxes”). If the Department shall be required by law to withhold or deduct any Taxes imposed by the United States of America or any political subdivision thereof from or in respect of any sum payable hereunder or under the Fee Letter to the Bank, (i) the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13), the Bank receives an amount equal to the sum it would have received had no such deductions been made; (ii) the Department shall make such deductions; and (iii) the Department shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. If the Department shall make any payment under this Section 2.13 to or for the benefit of the Bank with respect to Taxes and if the Bank shall claim any credit or deduction for such Taxes against any other taxes payable by the Bank to any taxing jurisdiction in the United States then the Bank shall pay to the Department an

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amount equal to the amount by which such other taxes are actually reduced; provided that the aggregate amount payable by the Bank pursuant to this sentence shall not exceed the aggregate amount previously paid by the Department with respect to such Taxes. In addition, the Department agrees to pay any present or future stamp, recording or documentary taxes and any other excise or property taxes, charges or similar levies that arise under the laws of the United States of America, the State of New York, the State of California or any other taxing jurisdiction from any payment made hereunder or under the Fee Letter or from the execution or delivery or otherwise with respect to this Agreement (hereinafter referred to as “Other Taxes”). The Bank shall provide to the Department within a reasonable time a copy of any written notification it receives with respect to Taxes or Other Taxes owing by the Department to the Bank hereunder; provided that the Bank’s failure to send such notice shall not relieve the Department of its obligation to pay such amounts hereunder. The Department may conduct a reasonable contest of any such Taxes with the prior written consent of the Bank which consent shall not be unreasonably withheld.

(b) Indemnity. The Department shall, to the fullest extent permitted by law and subject to the provisions hereof, indemnify the Bank for the full amount of Taxes and Other Taxes including any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.13 paid by the Bank or any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted; provided that the Department shall not be obligated to indemnify the Bank for any penalties, interest or expenses relating to Taxes or Other Taxes arising from the Bank’s gross negligence or willful misconduct. The Bank agrees to give notice to the Department of the assertion of any claim against the Bank relating to such Taxes or Other Taxes as promptly as is practicable after being notified of such assertion; provided that the Bank’s failure to notify the Department promptly of such assertion shall not relieve the Department of its obligation under this Section 2.13. Payments by the Department pursuant to this indemnification shall be made within sixty (60) days from the date the Bank makes written demand therefor, which demand shall be accompanied by a certificate describing in reasonable detail the basis thereof. The Bank agrees to repay to the Department any refund (including that portion of any interest that was included as part of such refund) with respect to Taxes or Other Taxes paid by the Department pursuant to this Section 2.13 received by the Bank for Taxes or Other Taxes that were paid by the Department pursuant to this Section 2.13 and to contest, with the cooperation and at the expense of the Department, any such Taxes or Other Taxes which the Bank or the Department reasonably believes not to have been properly assessed.

(c) Notice. Within thirty (30) days after the date of any payment of Taxes or Other Taxes by the Department, the Department shall furnish to the Bank, the original or a certified copy of a receipt evidencing payment thereof.

(d) Survival of Obligations. The obligations of the Department under this Section 2.13 shall survive the termination of this Agreement.

Section 2.14. Increased Costs. (a) If, after the Closing Date, the Bank or any Participant shall have determined that a Change in Law shall:

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(ii) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance premium, fee, financial charge, monetary burden or similar requirement against funding any Drawing under the Letter of Credit or maintaining the Letter of Credit, or complying with any term of this Agreement, or against assets held by, or deposits with or for the account of, the Bank or such Participant, [or the Bank’s or such Participant’s parent or holding company, if any; or


The Bank or Participant shall use its best efforts to provide to the Department written notice of the expected occurrence of any event referred to in clause (i), (ii) or (iii) above for which it has actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased costs or Reductions in Amount (the “Yield Protection Demand Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if, all obligations due and owing under this Agreement and the Fee Letter are paid in full prior to the date on which any increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed upon the Bank or Participant, then the Department will not be obligated to pay the additional amounts set forth in the Yield Protection Demand Notice; provided, however, that if all obligations due and owing under this Agreement and the Fee Letter are not paid prior to the date on which any increased cost or Reduction in Amount are imposed on the Bank or Participant, the Department shall become liable for the additional amount for such increased cost or Reduction in Amount set forth in the Yield Protection Demand Notice on the date on which such increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed on the Bank or Participant. Such amounts will be payable as set forth in Section 2.14(c) hereof.

Notwithstanding the foregoing, a failure by the Bank or any Participant to deliver to the Department a Yield Protection Demand Notice shall in no event relieve the obligation of the

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Department of any obligation under this Section 2.14(a). Additionally, nothing set forth in this Section 2.14(a) shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i), (ii) or (iii) above.


(i) affects or would affect the amount of capital or liquidity or reserves to be maintained by the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any, or


the Bank or Participant shall use its best efforts to provide the Department written notice of the expected occurrence of any event referred to in clause (i) or (ii) above for which it has actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased cost related to any event referred to in clause (i) or (ii) above (the “Adequacy Demand Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if all obligations due and owing to the Bank and any Participant are paid in full prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, then the Department will not be obligated to pay the additional amounts set forth in the Adequacy Demand Notice; provided however that if all obligations due and owing to the Bank and any Participant are not paid prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed upon the Bank or such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, the Department shall become liable for the additional amount set forth in the Adequacy Demand Notice on the date on which such increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable. Such amounts will be payable as set forth in Section 2.14(c) hereof.

Notwithstanding the foregoing, (i) a failure by the Bank or any Participant to deliver to the Department an Adequacy Demand Notice shall in no event relieve the obligation of the Department of any obligation under this Section 2.14(b). Additionally, nothing set forth in this Section 2.14(b)

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shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i) or (ii) above.



In making the determinations contemplated by any Yield Protection Demand Notice or Adequacy Demand Notice or any other written notice from the Bank to the Department making a demand on the Department for the payment of increased costs or Reductions in Amount pursuant to this Section 2.14, the Bank or Participant may make and shall include in such notice such reasonable estimates, assumptions, allocations and the like that the Bank or Participant in good faith determines to be appropriate. For purposes of this Section 2.14, the term “Bank” or “Participant” as applicable, shall also include any entity controlling the Bank or Participant or the holding company thereof. For purposes of the immediately preceding sentence, “controlling” means the power to direct the management and policies of the Bank, directly or indirectly, whether through the ownership of voting rights, membership, the power to appoint members, trustees or directors, by contract or otherwise. The obligations of the Department under this Section 2.14 shall survive the termination of this Agreement, the Letter of Credit and repayment of all Obligations hereunder and under the Fee Letter.


Section 2.15. Maximum Rate; Payment of Fee. If the rate of interest payable hereunder or under the Fee Letter shall exceed the Maximum Rate for any period for which interest is payable, then (a) interest at the Maximum Rate shall be due and payable with respect to such interest period; and (b) interest at the rate equal to the difference between (i) the rate of interest calculated in

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accordance with the terms hereof without regard to the Maximum Rate and (ii) the Maximum Rate (the “Excess Interest”), shall be deferred until such date as the rate of interest calculated in accordance with the terms hereof or the Fee Letter, if applicable, ceases to exceed the Maximum Rate, at which time the Department shall pay to the Bank, with respect to amounts then payable to the Bank that are required to accrue interest hereunder or under the Fee Letter, as applicable, such portion of the deferred Excess Interest as will cause the rate of interest then paid to the Bank to equal the Maximum Rate, which payments of deferred Excess Interest shall continue to apply to such unpaid amounts hereunder and under the Fee Letter, as applicable, until all Excess Interest is fully paid to the Bank. Upon the termination of the Letter of Credit, in consideration for the limitation of the rate of interest otherwise payable hereunder and under the Fee Letter, the Department shall pay to the Bank a fee equal to the amount of all unpaid Excess Interest.

Section 2.16. Security of Obligations. The Obligations of the Department hereunder are special obligations secured by a pledge of and lien on the Subordinate Pledged Revenues, on a parity with all Subordinate Obligations issued under the Master Subordinate Trust Indenture, and are subordinate only to the debt service and reserve requirements on Senior Lien Revenue Bonds.

ARTICLE III

COMMERCIAL PAPER NOTES OPERATIONS

Section 3.01. Issuance Generally. The Department may issue Commercial Paper Notes only in accordance with the terms of and subject to the conditions set forth in the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and this Agreement.

Section 3.02. Stop Issuance Instructions; Final Drawing Notice. (a) Commercial Paper Notes may be issued from time to time prior to the Letter of Credit Expiration Date in accordance herewith and with the terms of and subject to the conditions set forth in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture so long as (i) the Trustee is not in receipt of a Tier One Stop Issuance Instruction then in effect given by the Bank pursuant to this Section 3.02 or Section 7.02(b) hereof and not rescinded and (ii) the Trustee is not in receipt of a Tier One Final Drawing Notice in substantially the form attached to the Letter of Credit as Annex H-1. Upon the Trustee’s receipt of a Tier Two Termination Notice given by the Bank pursuant to this Section 3.02 and not rescinded, no Commercial Paper Notes may be issued thereafter with a maturity later than the sixtieth (60th) day (or such earlier day as may be provided in Section 3.02(c) hereof) following the date of delivery of such Tier Two Termination Notice (the “Tier Two Termination Date”) and on the Tier Two Termination Date, the Trustee shall make the final Drawing under the Letter of Credit to provide for the payment of Commercial Paper Notes issued in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture which are outstanding and are maturing on or after the Tier Two Termination Date.

(b) The Bank may deliver a Tier One Stop Issuance Instruction in the form of Exhibit A attached hereto at any time when: (i) an Event of Default shall have occurred and be continuing;

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or (ii) the representations and warranties of the Department set forth in Article V hereof shall, in the reasonable opinion of the Bank, no longer be true and correct in any material respect. The Bank may deliver the Tier One Final Drawing Notice at any time when an Event of Default shall have occurred and be continuing. A Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice shall be effective when received by the Trustee; provided, however, that a Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice received by the Trustee after 12:00 noon New York City time, on any day on which Commercial Paper Notes are being issued shall be effective on the next succeeding day. A Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice may be given by facsimile or electronic mail transmission, confirmed in writing within twenty-four (24) hours, but the failure to so confirm such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice in writing shall not render such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice ineffective. The Bank will furnish a copy of any Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice to the Department and the Dealer promptly following delivery thereof to the Trustee, but the failure to furnish any such copy shall not render ineffective such Tier One Stop Issuance Instruction or the Tier One Final Drawing Notice.

(c) The Bank may deliver a Tier Two Termination Notice in the form of Annex I attached to the Letter of Credit at any time when it has been determined by the Bank in its sole and absolute discretion that the Bank is unable to comply with any of the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance as a result of any amendment or other change to such Equal Employment Practices, Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date. Notwithstanding the foregoing, in the event any monetary or civil penalties are imposed on the Bank as a result of its inability to comply with one or more provisions of the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance as a result of any amendment or other change to such Equal Employment Practices, Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date, then upon the Bank’s delivery of a revised Tier Two Termination Notice (in the form of Annex J attached to the Letter of Credit) setting forth a new Tier Two Termination Date (which may be sooner than the original Tier Two Termination Date, but in any event not sooner than the earliest to occur of (a) the 15th day following receipt of the revised Tier Two Termination Notice, or (b) the original Tier Two Termination Date), the Trustee shall make the final Drawing under the Letter of Credit on such new Tier Two Termination Date to provide for the payment of Commercial Paper Notes issued in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture which are outstanding and are maturing on or after the Tier Two Termination Date. A Tier Two Termination Notice received by the Trustee after 12:00 noon New York City time, on any day on which Commercial Paper Notes are being issued shall be effective on the next succeeding day. A Tier Two Termination Notice may be given by facsimile or electronic mail transmission, confirmed in writing within twenty-four (24) hours, but the failure to so confirm such Tier Two Termination Notice in writing shall not render such Tier Two Termination Notice ineffective. The Bank will furnish a copy of any Tier Two Termination Notice to the Department and the Dealer promptly following delivery thereof to the Trustee, but the failure to furnish any such copy shall not render ineffective such Tier Two Termination Notice. Notwithstanding any provisions of this paragraph to the contrary, in the event (1) the City or the Department provides a waiver or exemption to the Bank which

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states that the Bank (y) is not required to comply with any amendment or other change to the Equal Employment Practices, the Affirmative Action Program, the Child Support Provisions or the Measure H Ordinance, as applicable, which have become effective after the Closing Date, and/or (z) is not required to satisfy any monetary or civil penalties imposed on the Bank related to such amendments or other changes, and (2) the Bank receives a City Attorney’s opinion or other opinion of counsel satisfactory to the Bank confirming the foregoing, the Bank shall immediately rescind the Tier Two Termination Notice and such Tier Two Termination Notice shall no longer be effective.

ARTICLE IV

CONDITIONS PRECEDENT

Section 4.01. Conditions Precedent to Issuance of the Letter of Credit. As conditions precedent to the obligation of the Bank to amend and restate the Exiting Letter of Credit as contemplated by Section 2.01 hereof, the Department shall provide to the Bank, on the Effective Date, each in form and substance satisfactory to the Bank and the Bank’s counsel, Chapman and Cutler LLP (hereinafter, “Bank’s Counsel”):

(a) Approvals. The Bank shall have received (1) executed originals of this Agreement and the Fee Letter duly executed by the Department and copies of all action taken by the Department (including, without limitation, the Resolution) approving the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note, in each case, certified by an authorized official of the Department as complete and correct as of the date hereof and (2) executed or certified copies, as applicable, of each of the other Program Documents (except the Commercial Paper Notes) to which the Department is a party, together with a certificate of the Secretary of the Board of Airport Commissioners of the City of Los Angeles, California, or such other authorized official of the Department or the City, dated the Effective Date, stating that such Program Documents and approvals are in full force and effect on the Effective Date and have not been amended, supplemented, modified or limited (or with respect to the related approvals, amended, modified, supplemented, superseded or repealed) in any manner, except for such amendments made in accordance with the express terms of such Program Documents for which the Department has provided notice to the Bank prior to the Effective Date.

(b) Certificate and Incumbency of Department Officials. The Bank shall have received (1) an incumbency and specimen signature certificate of the Department in respect of each of the officials who is authorized to (i) sign this Agreement, the Fee Letter and the Bank Note on behalf of the Department and (ii) take actions for the Department under this Agreement, the Fee Letter, the Bank Note and the other Program Documents (to which the Department is a party) with respect to the Commercial Paper Notes and (2) a certificate of an Authorized Representative of the Department, dated the Effective Date, certifying that (A) each of the Department’s representations and warranties contained herein and the other Program Documents to which the Department is a party is true and correct on and as of the Effective Date as though made on and as of such date, (B) no Default or Event of Default

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has occurred and is continuing or will result from the execution and delivery by the Department of this Agreement, the Fee Letter or the issuance of the Letter of Credit, (C) since June 30, 2019, except as disclosed in writing to the Bank prior to the Effective Date, or otherwise disclosed in the Offering Memorandum, there has been no Material Adverse Change and there has been no material adverse change in the laws, rules or regulations (or their interpretation or administration) and no material litigation is ongoing with respect to the Department, in any case, that may adversely affect the consummation of the transactions contemplated hereby or by any Program Document or result in a Material Adverse Effect, (D) all conditions precedent set forth in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture with respect to issuance of the Commercial Paper Notes shall have been satisfied and (E) the Department has not received notice from the Rating Agencies that the long-term unenhanced ratings of the Senior Lien Revenue Bonds have been withdrawn, reduced or suspended since the dated date of the Rating Documentation.

(c) Opinion of Bond Counsel. The Bank shall have received a written opinion of Bond Counsel, addressed to the Bank, dated the Effective Date, to the effect that (i) this Agreement, the Fee Letter and the Bank Note have been duly authorized, executed and delivered by the Department and are the valid and binding obligations of the Department enforceable in accordance with their respective terms, except as may be limited by the valid exercise of judicial discretion and the constitutional powers of the United States of America and to valid bankruptcy, insolvency, reorganization or moratorium or other similar laws applicable to the Department and equitable principles relating to or affecting creditors’ rights generally from time to time; (ii) the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note does not violate the constitution or laws of the State; and (iii) the Board on behalf of the Department has taken all actions, and has obtained any approvals, necessary to the authorization, execution, delivery and performance by the Department of this Agreement, the Fee Letter and the Bank Note. In addition, the Bank shall have received a letter from Bond Counsel authorizing the Bank to rely on the final approving opinion of Bond Counsel delivered to the Department in respect of the Commercial Paper Notes.

(d) Opinion of City Attorney. The Bank shall have received a written opinion of the City Attorney, addressed to the Bank, dated the Effective Date, in the form and substance agreed to by the City Attorney and the Bank.

(e) Bank Note. The Bank shall have received an executed Bank Note payable to the Bank, and upon receipt of such Bank Note, the Bank shall return the Existing Bank Note to the Department for cancellation.

(f) No Default, Etc. No Event of Default shall have occurred and be continuing as of the Effective Date or will result from the execution and delivery by the Department of this Agreement, the Fee Letter and the Bank Note or the issuance of the Letter of Credit. The representations and warranties and covenants made by the Department in Article V hereof shall be true and correct in all material respects on and as of the Effective Date, as if made on and as of such date.

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(g) Reserved.

(h) Legality; Material Adverse Change. The Bank shall have determined (in its sole discretion) that (i) none of the making of any Drawings or Advances, the issuance of the Letter of Credit or the consummation of any of the transactions contemplated by the Resolution, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the Commercial Paper Notes, the Bank Note, this Agreement or the Fee Letter will violate any law, rule, guideline or regulation applicable to the Department, LAX, the Bank, this Agreement or any other Program Document; and (ii) no material adverse change in the ratings, financial condition, business, assets, liabilities or prospects of the Department or LAX shall have occurred since June 30, 2019, except as disclosed in writing to the Bank prior to the Effective Date, which would be reasonably likely to result in a Material Adverse Effect; and (iii) there has been no material adverse change in the laws, rules or regulations (or their interpretation or administration) that, in any case, may adversely affect the consummation of the transactions contemplated hereby or by any Program Document.

(i) Reserved.

(j) Fees, Etc. The Bank shall have received payment of the fees, costs and expenses to be paid on or prior the Effective Date referred to in Section 9.06 hereof and pursuant to the Fee Letter.

(k) Ratings. The Bank shall have received written confirmation that (i) the Commercial Paper Notes have been rated at least “P-1” (or its equivalent) by Moody’s and “A-2” (or its equivalent) by S&P and “F1” (or its equivalent) by Fitch, (ii) the unenhanced Senior Lien Revenue Bonds have been rated “[___]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch, and (iii) the unenhanced Subordinate Obligations (other than the Commercial Paper Notes and the Bank Note) have been rated “[__]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch (collectively referred to herein as the “Rating Documentation”).

(l) Bank Note CUSIP and Rating. The Bank shall have received written confirmation that (i) a CUSIP number (No. 54445A AA5)3 has been obtained from Standard and Poor’s CUSIP Services for the Bank Note and (ii) a long term rating of at least Investment Grade has been obtained for the Bank Note (and its related CUSIP number) from any Rating Agency.

(m) Other Documents. The Bank shall have received such other documents, certificates and opinions as the Bank’s Counsel shall have reasonably requested.

Section 4.02. Conditions Precedent to Advances. Following any payment by the Bank under the Letter of Credit pursuant to a Drawing, an Advance shall be made available to the

3 Presumably a new CUSIP will be needed.

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Department only if on the date of payment of such Drawing by the Bank, each of the following conditions shall be satisfied:

(a) the representations and warranties contained in Article V of this Agreement (other than those representations and warranties set forth in Section 5.12(a) hereof) are true and correct in all material respects, and deemed made, as of such date; and

(b) no event has occurred and is continuing, or would result from such payment, which constitutes a Default or Event of Default.

Unless the Department shall have previously advised the Bank in writing that (i) any or all of the representations and warranties contained in Article V of this Agreement are not true and correct in all material respects as of the date the Bank honors such Drawing and/or makes such Advance or (ii) any event has occurred and is continuing, or would result from the Bank honoring such Drawing or making such Advance, which constitutes a Default or Event of Default, then the Department shall be deemed to have represented and warranted on the date the Bank honors such Drawing and/or makes such Advance that (i) the representations and warranties contained in Article V of this Agreement are true and correct in all material respects as of such date and (ii) no event has occurred and is continuing, or would result from the Bank honoring such Drawing and/or making such Advance, which constitutes a Default or Event of Default.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

In order to induce the Bank to enter into this Agreement and the Fee Letter and to issue the Letter of Credit, the Department represents and warrants to the Bank as follows:

Section 5.01. Organization; Existence. The Department is duly organized and validly existing as a proprietary department of the City pursuant to Article VI of the Charter.

Section 5.02. Power and Authority. The Department has (and had at the time of adoption, execution, delivery, issuance, sale or performance) full power, right and authority to (a) execute, deliver and perform its obligations under each of the Program Documents to which it is a party, and any and all instruments and documents required to be executed, adopted or delivered pursuant to or in connection herewith or therewith; (b) issue and sell, from time to time, the Commercial Paper Notes as provided in the Program Documents and make payment of principal and interest, if any, on the Commercial Paper Notes and to pay the Obligations at the times and in the manner set forth herein; (c) possess, manage and operate LAX; and (d) perform each and all of the matters and things herein and therein provided for and the Department has complied in all material respects with the laws of the State in all matters relating to such execution, delivery and performance.

Section 5.03. Due Authorization, Etc. Each of the Program Documents to which the Department is a party have been duly authorized, executed, issued and delivered. This Agreement and each of the other Program Documents to which the Department is a party constitute legal,

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valid and binding obligations of the Department, enforceable against the Department in accordance with their terms, except as such enforceability may be limited by the valid exercise of judicial discretion and the constitutional powers of the United States of America and to valid bankruptcy, insolvency, reorganization, moratorium, or other similar laws and equitable principles relating to or affecting creditors’ rights generally from time to time in effect. The Obligations are payable from and secured by Subordinate Pledged Revenues as set forth herein and in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture.

Section 5.04. Necessary Actions Taken. The Department has taken all actions necessary to be taken by it (a) for the issuance and sale of the Commercial Paper Notes upon the terms set forth in the Program Documents; (b) for the execution, adoption and delivery by the Department of any and all such other instruments and the taking of all such other actions on the part of the Department as may be necessary or appropriate for the effectuation and consummation of the transactions on the part of the Department contemplated by the Program Documents or in connection herewith or therewith; and (c) to authorize or approve, as appropriate, the execution, issuance and delivery of, and the performance of its obligations under and the transactions contemplated by each of the Program Documents to which it is a party and the payment of the Obligations at the times and in the manner set forth.

Section 5.05. No Contravention. The execution and delivery of each of the Program Documents to which the Department is a party and compliance with the provisions hereof and thereof, will not conflict with or result in a violation of the Constitution of the State or the laws of the State, including any debt limitations or other restrictions or conditions on the debt issuing power of the Department, and will not conflict with or result in a violation of, or breach of, or constitute a default under, any law (including, without limitation, Regulations T, U or X of the FRB, or any successor regulations), judgment, order, decree or administrative regulation or any of the terms, conditions or provisions of the Charter or any ordinance, judgment, decree, contract, loan agreement, note, bond, resolution, indenture, mortgage, deed of trust or other agreement or instrument to which the Department is a party or by which it or any property of the Department is bound and will not, (i) except as expressly provided herein, result in the imposition or creation of any lien, charge, or encumbrance upon or invalidate or adversely affect in any way the Subordinate Pledged Revenues or (ii) materially and adversely affect the ability of the Department to perform its obligations hereunder or under the Program Documents or the rights, security, interest or remedies available to the Bank under this Agreement or the other Program Documents. The Department has not received any notice, not subsequently withdrawn, given in accordance with the remedy provisions of any bond resolution or ordinance, trust indenture, guarantee or agreement or State law pertaining to bonds or notes secured by the Subordinate Pledged Revenues, of any default or event of default of the Department which has not been cured, remedied or waived.

Section 5.06. Compliance. The current collection of Pledged Revenues and the management of LAX and the accounting and recordkeeping therefor are in material compliance with all applicable state and federal laws and all applicable resolutions, ordinances and rules of the Department. The Department is in compliance with the terms and conditions of each of the Program Documents to which it is a party, and no breach of the terms hereof or thereof has occurred and is continuing, and no Default or Event of Default has occurred and is continuing. The Department is in compliance with the insurance requirements in the Senior Lien Trust Indenture.

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The Department is in material compliance with all laws, ordinances, orders, writs, injunctions, decrees, rules and regulations applicable to it (including, without limitation, ERISA and all applicable federal, state or local environmental, health and safety statutes and regulations, and the City’s investment policy guidelines), except to the extent noncompliance could not reasonably be expected to have a Material Adverse Effect.

Section 5.07. No Default. No default by the Department has occurred and is continuing in the payment of the principal of or premium, if any, or interest on any Debt issued by or on behalf of the Department and payable from and/or secured by a pledge of and lien on the Subordinate Pledged Revenues. No bankruptcy, insolvency or other similar proceedings pertaining to the Department or any agency or instrumentality of the Department are pending or presently contemplated. No Default or Event of Default has occurred and is continuing hereunder. No “default” or “event of default” under, and as defined in any of the other Program Documents has occurred and is continuing. The Department is not presently in default under any material agreement to which it is a party which could reasonably be expected to have a Material Adverse Effect. The Department is not in violation of any material term of the Charter applicable to the Department or any material term of any bond indenture or agreement to which it is a party or by which any of its property or assets is bound which could reasonably be expected to have a Material Adverse Effect.

Section 5.08. No Public Vote or Referendum. To the best knowledge of the Department, there is no public vote or referendum pending, proposed or concluded, the results of which could in any way have a Material Adverse Effect.

Section 5.09. No Immunity. Under existing law, the Department is not entitled to raise the defense of immunity from liability or suit in connection with any legal proceedings to enforce or collect upon this Agreement, the Fee Letter or the transactions contemplated hereby or thereby, including the payment of the Obligations; provided, however, that the procedural requirements applicable to commencing an action against the Department differ from those provisions and requirements applicable to individuals and nongovernmental entities.

Section 5.10. Litigation. There is no action, suit or proceeding pending in any court, any other governmental authority with jurisdiction over the Department or LAX or any arbitration in which service of process has been completed against the Department or LAX or, to the knowledge of the Department, any other action, suit or proceeding pending or threatened in any court, any other governmental authority with jurisdiction over the Department or LAX or any arbitrator, in either case against the Department or LAX or any of their respective properties or revenues, or any of the Program Documents to which it is a party, which if determined adversely to the Department would adversely affect the legality, validity or enforceability of the any of the Program Documents to which it is a party, or the rights and remedies of the Bank under any of the Program Documents or which is reasonably likely to have a Material Adverse Effect, except any action, suit or proceeding which has been brought prior to the Effective Date as to which the Bank have received an opinion of counsel satisfactory to the Bank, in form and substance satisfactory to the Bank and the Bank’s Counsel, to the effect that such action, suit or proceeding is without substantial merit.

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Section 5.11. Disclosure. To the best knowledge of the Department, neither the Program Documents to which the Department is a party, the Offering Memorandum nor any other document, certificate or statements of the Department (including the unaudited financial statements, reports, budgets, projections and cash flows of the Department with respect to LAX furnished to the Bank by or on behalf of the Department in connection with the transactions contemplated hereby or thereby) contains any untrue statement of any material fact.

Section 5.12. Financial Information. (a) As of the Effective Date, the Department has delivered to the Bank a copy of the audited financial statements for the Department with respect to LAX for the Fiscal Year ended June 30, 2019. Such audited financial statements together with related notes, fairly present the financial position and results of operation of the Department with respect to LAX as of the date and for the periods therein set forth. All such financial statements have been prepared in accordance with GAAP. As of the Effective Date, there has been no material adverse change in the financial position, results of operations or projections of revenues of the Department with respect to LAX since June 30, 2019, except as disclosed in writing to the Bank prior to the Effective Date, or otherwise disclosed in the Offering Memorandum. The Department has no material contingent liabilities or other material contracts or commitments payable from Subordinate Pledged Revenues which are not reflected in such financial statements previously delivered to the Bank or in the notes thereto or otherwise as disclosed to the Bank in writing.

(b) Subsequent to the Effective Date the audited financial statements for the Department with respect to LAX delivered to the Bank pursuant to Section 6.02(a) hereof, with related notes, fairly present the financial position and results of operation of the Department with respect to LAX as of the date and for the periods therein set forth. All such financial statements have been prepared in accordance with GAAP. The Department has no material contingent liabilities or other material contracts or commitments payable from Subordinate Pledged Revenues which are not reflected in such financial statements delivered to the Bank or in the notes thereto or otherwise as disclosed to the Bank in writing.

Section 5.13. Official Signatures. The Authorized Representative, on behalf of the Department, has and had full power and authority to execute, deliver and perform under each of the Program Documents to which the Department is a party. Any agreement, certificate or request signed by or on behalf of any Authorized Representative of the Department and delivered to a Dealer, the Trustee or the Bank shall be deemed a representation and warranty by the Department to the Bank as to the truth, accuracy and completeness of the statements made by the Department therein.

Section 5.14. Incorporation of Representations and Warranties by Reference. The Department hereby makes to the Bank the same representations and warranties made by the Department in each Program Document to which the Department is a party, which representations and warranties, as well as the related defined terms contained therein, are hereby incorporated by reference for the benefit of the Bank with the same effect as if each and every such representation and warranty and defined term were set forth herein in its entirety. Except as permitted by Section 6.15 hereof, no amendment to such representations and warranties or defined terms made pursuant to any Program Document shall be effective to amend such representations and warranties

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and defined terms as incorporated by reference herein without the prior written consent of the Bank.

Section 5.15. Environmental Matters. To the best knowledge of the Department, the operations of LAX are in material compliance with all of the requirements of applicable federal, state and local environmental, health and safety statutes and regulations and are not the subject of any governmental investigation evaluating whether any remedial action is needed to respond to a release of any toxic or hazardous waste or substance into the environment, where a failure to comply with any such requirement or the need for any such remedial action would have a Material Adverse Effect.

Section 5.16. Security. The Master Subordinate Trust Indenture creates, for the benefit of the owners of the Commercial Paper Notes and, with respect to the Bank Note and the Obligations, the Bank, the legally valid, binding and irrevocable lien on and pledge of the Subordinate Pledged Revenues. There is no lien on the Subordinate Pledged Revenues other than the lien created by the Master Subordinate Trust Indenture. The Master Subordinate Trust Indenture does not permit the issuance or incurrence of any Debt secured by the Subordinate Pledged Revenues to rank senior to the Commercial Paper Notes, the Bank Note or the Obligations. The payment of the Obligations ranks on a parity with the payment of the principal and purchase price of and interest on the Subordinate Obligations and is not subordinate to any payment secured by a lien on the Subordinate Pledged Revenues or any other claim, and is prior as against all other Persons having claims of any kind in tort, contract or otherwise, whether or not such Persons have notice of such lien. No filing, registration, recording or publication of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other instrument is required to establish the pledge provided for thereunder or to perfect, protect or maintain the lien created thereby on the Subordinate Pledged Revenues to secure the Commercial Paper Notes and the Obligations. The Letter of Credit constitutes a “Credit Facility” under the Master Subordinate Trust Indenture. All Obligations constitute “Subordinate Obligations” under the Master Subordinate Trust Indenture and “Payment Obligations” under the Seventh Supplemental Subordinate Trust Indenture. All Obligations constitute “Repayment Obligations” under the Master Subordinate Trust Indenture.

Section 5.17. Investment Company Act. The Department is not an “investment company” or a company “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

Section 5.18. Employee Benefit Plan Compliance. The Department has no funding liability or obligation currently due and payable with respect to any employee benefit plan which could reasonably be expected to materially and adversely affect the ability of the Department to perform its obligations hereunder or under any other Program Document. The Department is otherwise in compliance with the terms of any such plan in which the Department participates to the extent any such failure to comply could reasonably be expected to materially and adversely affect the ability of the Department to perform its obligations hereunder or under any other Program Document. Neither the Department nor any employee benefit plan maintained by the Department is subject to ERISA. The Department is not subject to ERISA and maintains no Plans.

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Section 5.19. Pending Legislation and Decisions. There is no amendment, or to the knowledge of the Department, proposed amendment to the Constitution of the State or any State law or any administrative interpretation of the Constitution of the State or any State law, or any legislation that has passed either house of the legislature of the State, or any judicial decision interpreting any of the foregoing, the effect of which will materially adversely affect the issuance of any of the Commercial Paper Notes, the security for any of the Commercial Paper Notes, the Bank Note, any Obligations or the Department’s obligations hereunder or under any of the Program Documents, the creation, organization, or existence of the Department or the titles to office of any officers executing this Agreement or any Program Documents to which the Department is a party or the Department’s ability to repay when due its obligations under this Agreement, any of the Commercial Paper Notes, the Bank Note, any Obligations or the Program Documents.

Section 5.20. Usury. There is no limitation under California law on the rate of interest payable by the Department with respect to the Bank Note or the Obligations or with respect to the Department’s obligations to the Bank hereunder or under the Fee Letter.

Section 5.21. Margin Regulations. No portion of the proceeds of any Drawings under the Letter of Credit or Advances hereunder shall be used by the Department (or the Trustee or any other Person on behalf of the Department) for the purpose of “purchasing” or “carrying” any margin stock or used in any manner which might cause the borrowing or the application of such proceeds to violate Regulation G, Regulation U or X of the Board of Governors of the Federal Reserve System or any other regulation of the Department or to violate the Securities Exchange Act of 1934, as amended, in each case as in effect on the date or dates of such Drawings or Advances and such use of proceeds.

Section 5.22. No Incorporation of Waiver of Jury Trial and Judicial Reference in any Bank Agreements. The Department has not waived any right to a trial by jury in any action, suit or proceeding arising under or relating to any Bank Agreement, or consented to the adjudication of any action, suit or proceeding arising under or relating to any Bank Agreement pursuant to judicial reference as provided in California Code of Civil Procedure Section 638.

Section 5.23. Trustee; Dealer. U.S. Bank National Association is the duly appointed and acting Trustee and Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, Samuel A. Ramirez & Co., Inc. and Wells Fargo Bank, National Association are the duly appointed and acting Dealers.

Section 5.24. Tax Status of Interest on Tax-Exempt Commercial Paper Notes. It is the intention of the Department and the Bank that the interest on the Tax-Exempt Commercial Paper Notes (except for interest on any Private Activity Note for any period during which such Private Activity Note is held by a “substantial user” of the facilities financed or refinanced by the Private Activity Notes or a “related person” within the meaning of the Code) be excluded from the gross income of the owners thereof for federal income tax purposes by reason of the provisions of Section 103 of the Code, or any substantially similar successor provision hereafter enacted. To that end, the Department represents to the Bank that it has not taken any action, and knows of no action that any other Person has taken, which would cause interest on such Tax-Exempt

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Commercial Paper Notes (except for interest on any Private Activity Note for any period during which such Private Activity Note is held by a “substantial user” of the facilities financed or refinanced by the Private Activity Notes or a “related person” within the meaning of the Code) to be includable in the gross income of the recipients thereof for federal income tax purposes.

Section 5.25. OFAC. The Department is not in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Patriot Act;

(i) The Department is not any of the following:

(A) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(B) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;

(C) a Person with which the Bank is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

(D) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; or

(E) a Person that is named as a “specially designated national and blocked person” on the most current list published by the Office of Foreign Asset Control (“OFAC”) or any list of Persons issued by OFAC pursuant to the Executive Order at its official website or any replacement website or other replacement official publication of such list;

(ii) To the best knowledge of the Department, the Department does not (1) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Person described in subsection (i)(A) above, (2) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or (3) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.


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ARTICLE VI

COVENANTS

The Department will do the following so long as any amounts may be drawn under the Letter of Credit or any Obligations remain outstanding under this Agreement and/or the Fee Letter, unless the Bank shall otherwise consent in writing:

Section 6.01. Maintenance of Existence. To the fullest extent permitted by law, the Department, with respect to LAX (a) shall maintain its existence pursuant to the Charter and the laws of the State and at all times maintain its ownership of LAX and (b) shall not liquidate or dissolve, or sell or lease or otherwise transfer or dispose of all or any substantial part of its property, assets or business, or combine, merge or consolidate with or into any other entity or change the use of facilities or assets that generate Pledged Revenues.

Section 6.02. Reports, Certificates and Other Information. The Department shall furnish or cause to be furnished to the Bank copies of:

(a) Annual Report. As soon as available, but no later than two hundred and forty (240) days after the end of the Fiscal Year, the annual audited financial statements for the Department with respect to LAX together with (1) the opinion of the Department’s independent accountants and (2) a certificate signed by the Executive Director or any other officer of the Department (x) demonstrating compliance with Section 6.07 hereof and (y) stating that no Event of Default or Default has occurred, or if such Event of Default or Default has occurred, specifying the nature of such Event of Default or Default, the period of its existence, the nature and status thereof and any remedial steps taken or proposed to correct such Event of Default or Default.

(b) Unaudited Quarterly Financials. At any time that any of Moody’s, Fitch or S&P shall have downgraded its rating of any (i) Senior Lien Revenue Bonds below “A1” (or its equivalent), “A+” (or its equivalent) or “A+” (or its equivalent), respectively, or (ii) Subordinate Obligations below “A2” (or its equivalent), “A” (or its equivalent) or “A” (or its equivalent), respectively, as soon as available, and in any event within sixty (60) days after each of the first three quarters of each Fiscal Year of the Department, the unaudited financial statements of the Department with respect to LAX, including the balance sheet as of the end of such quarter and a statement of income and expenses, all in reasonable detail and certified, subject to year-end adjustment, by the Chief Financial Officer or any other officer of the Department.

(c) Trustee Notices. As soon as available all notices, certificates, instruments, letters and written commitments in connection with the Commercial Paper Notes provided to the Trustee other than those notices, certificates, instruments, letters and written commitments that relate solely to the routine issuance and payment of the Commercial Paper Notes.

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(d) Notices of Resignation of the Trustee and Dealer. As promptly as practicable, written notice to the Bank of any resignation of any Trustee or Dealer immediately upon receiving notice of the same.

(e) Offering Memorandum and Material Event Notices. (A) Within ten (10) days after the issuance of any securities by the Department with respect to which a final official statement or other offering or disclosure document has been prepared by the Department, (1) provide the Bank with a copy of such official statement or offering circular or (2) provide the Bank with notice that such information has been filed with EMMA and is publicly available; and (B) during any period of time the Department is subject to continuing disclosure requirements under Rule 15c2-12 promulgated pursuant to the Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any successor or similar legal requirement, immediately following any dissemination, distribution or provision thereof to any Person, (1) provide the Bank with a copy of any reportable event notice (as described in b(5)(i)(C) of Rule 15c2-12) disseminated, distributed or provided in satisfaction of or as may be required pursuant to such requirements or (2) provide the Bank with notice that such event notice has been filed with EMMA and is publicly available.

(f) Notice of Default, Event of Default or Adverse Change. (i) Promptly upon obtaining knowledge of any Default or Event of Default, or notice thereof, and within five days thereafter, a certificate signed by an Authorized Representative specifying in reasonable detail the nature and period of existence thereof and what action the Department has taken or proposes to take with respect thereto; (ii) promptly following a written request of the Bank, a certificate of an Authorized Representative as to the existence or absence, as the case may be, of a Default or an Event of Default under this Agreement; and (iii) promptly upon obtaining knowledge of any “default” or “event of default” as defined under any Bank Agreement, notice specifying in reasonable detail the nature and period of existence thereof and what action the Department has taken or proposes to take with respect thereto.

(g) Litigation. As promptly as practicable, written notice to the Bank of all litigation served against the Department and all proceedings before any court or governmental authority which could reasonably be expected to have a Material Adverse Effect.

(h) Additional Debt. Within ten (10) days after the date of issuance and delivery of any additional Debt payable from and/or secured by Subordinate Pledged Revenues, a copy of any certificate or materials required to be provided pursuant to Section 6.13 hereof.

(i) Note Proceeds Used for Payment of Maintenance and Operation Expenses. Promptly, and in any event within ten (10) days of such use, written notice to the Bank of the use of any proceeds from the sale of the Commercial Paper Notes by the Department for the payment of Maintenance and Operation Expenses of the Airport System.

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(j) Other Information. Such other information regarding the business affairs, financial condition and/or operations of the Department with respect to LAX as the Bank may from time to time reasonably request.

The Department will permit the Bank to disclose the information described in this Section 6.02 to any Participants.

Section 6.03. Maintenance of Books and Records. The Department will keep, and cause LAX to keep, proper books of record and account in which full, true and correct entries in accordance with the Department’s and LAX’s budget basis accounting principles and reporting practices will be made of all dealings or transactions in relation to its activities. All financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the financial statements, except as otherwise specifically prescribed herein. Except as provided in the immediately preceding sentence, in preparing any financial data or statements contemplated or referred to in this Agreement, the Department shall not vary or modify the accounting methods or principles from the accounting standards employed in the preparation of its audited financial statements described in Section 5.12 hereof.

Section 6.04. Access to Books and Records. To the extent permitted by law, the Department will permit any Person designated by the Bank (at the expense of the Bank, unless and until a Default or Event of Default has occurred, at which time it shall be at the expense of the Department) to visit any of the offices of the Department to examine the books and financial records (except books and financial records the examination of which by the Bank is prohibited by law or by attorney/client privilege), including minutes of meetings of any relevant governmental committees or agencies, and make copies thereof or extracts therefrom, and to discuss the affairs, finances and accounts of the Department with respect to LAX with their principal officials, all at such reasonable times and as often as the Bank may reasonably request.

Section 6.05. Compliance With Documents. The Department agrees that it will perform and comply with each and every covenant and agreement required to be performed or observed by it in the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture and each of the other Program Documents to which it is a party, which provisions, as well as related defined terms contained therein, are hereby incorporated by reference herein with the same effect as if each and every such provision were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the Bank and shall be enforceable against the Department. To the extent that any such incorporated provision permits the Department, the holders of one or more Commercial Paper Notes or any other party to waive compliance with such provision or requires that a document, opinion or other instrument or any event or condition be acceptable or satisfactory to the Department, the holders of one or more Commercial Paper Notes or any other party, for purposes of this Agreement, such provision shall be complied with unless it is specifically waived by the Bank in writing and such document, opinion or other instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable or satisfactory to the Bank which shall only be evidenced by the written approval by the Bank of the same. Except as permitted by Section 6.15 hereof, no termination or amendment to such covenants and agreements or defined terms or release

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of the Department with respect thereto made pursuant to the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or any of the other Program Documents to which the Department is a party, shall be effective to terminate or amend such covenants and agreements and defined terms or release the Department with respect thereto in each case as incorporated by reference herein without the prior written consent of the Bank. Notwithstanding any termination or expiration of the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or any such other Program Document to which the Department is a party, the Department shall, unless the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture or such other Program Document, as applicable, has terminated in accordance with its terms and has been replaced by a new Senior Lien Trust Indenture, Master Subordinate Trust Indenture or Program Document, as applicable, continue to observe the covenants therein contained for the benefit of the Bank until the termination of this Agreement. All such incorporated covenants shall be in addition to the express covenants contained herein and shall not be limited by the express covenants contained herein nor shall such incorporated covenants be a limitation on the express covenants contained herein.

Section 6.06. Compliance With Law. The Department shall comply with and observe the obligations and requirements set forth in the Constitution of the State and in all statutes and regulations binding upon it relating to LAX, the Senior Lien Trust Indenture and the Program Documents to which the Department is a party.

Section 6.07. Rate Covenant. The Department covenants and agrees that it shall take any and all action necessary such that Pledged Revenues, Net Pledged Revenues, and Subordinate Pledged Revenues in each Fiscal Year shall equal an amount at least sufficient to satisfy the respective provisions of Section 5.04 of the Senior Lien Trust Indenture and Section 5.04 of the Master Subordinate Trust Indenture.

Section 6.08. Further Assurances. From time to time hereafter, the Department will execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Bank may reasonably request for the purposes of implementing or effectuating the provisions of the Program Documents to which the Department is a party or for the purpose of more fully perfecting or renewing the rights of the Bank with respect to the rights, properties or assets subject to such documents (or with respect to any additions thereto or replacements or proceeds thereof or with respect to any other property or assets hereafter acquired by the Department which may be deemed to be a part thereof). Upon the exercise by the Bank of any power, right, privilege or remedy pursuant to the Program Documents to which the Department is a party which requires any consent, approval, registration, qualification or authorization of any governmental authority or instrumentality, the Department will, to the fullest extent permitted by law, execute and deliver all necessary applications, certifications, instruments and other documents and papers that the Bank may be required to obtain for such governmental consent, approval, registration, qualification or authorization. At any time, and from time to time, upon request by the Bank, the Department will, at the Department’s expense, correct any defect, error or omission which may be discovered in the form or content of any of the Program Documents to which the Department is a party or protect the Bank’s interests, security, rights and remedies with respect to the Subordinate Pledged Revenues or its security under the Master Subordinate Trust Indenture or hereunder. At all times, the Department will defend, preserve and protect the pledge of certain

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funds pursuant to the Master Subordinate Trust Indenture and all the rights of the Bank hereunder and under the Master Subordinate Trust Indenture against all claims and demands of all Persons whosoever.

Section 6.09. No Impairment. The Department will neither take any action, nor cause the Trustee or the Senior Lien Trustee to take any action, under the Senior Lien Trust Indenture or any Program Document which would materially adversely affect the rights, interests, remedies or security of the Bank under this Agreement or any other Program Document or which could result in a Material Adverse Effect.

Section 6.10. Application of Note Proceeds. (a) The Department will not take or omit to take any action, which action or omission will in any way result in the proceeds from the sale of the Commercial Paper Notes being applied in a manner other than as provided in the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture.

(b) The Department agrees not to authorize, instruct or permit the Trustee to authenticate and deliver Commercial Paper Notes at any time when any Advance is outstanding unless the proceeds of the sale of such Commercial Paper Notes are to be applied on the sale date to repay either (i) such Advance (together with all accrued and unpaid interest thereon), or (ii) principal of and accrued interest on concurrently maturing Commercial Paper Notes.

Section 6.11. Application of Drawings. The Department will not take or omit to take any action, which action or omission will in any way result in the proceeds of the Drawings or the Advances being applied for any purpose other than to pay principal of and interest on Commercial Paper Notes on their respective maturity dates.

Section 6.12. Trustee and Dealers. The Department will not, without the prior written consent of the Bank, which consent shall not be unreasonably withheld, (a) remove, or seek to remove, the Trustee; or (b) appoint or consent to the appointment of any successor Trustee or Dealer thereto. The Department shall at all times maintain a Trustee pursuant to the terms of the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture that is acceptable to the Bank. The Department will at all times maintain a Dealer under the Seventh Supplemental Subordinate Trust Indenture and the Dealer Agreement that is acceptable to the Bank. The Department agrees to (x) issue Commercial Paper Notes and (y) cause the applicable Dealers (subject to the terms of the applicable Dealer Agreements) to use their best efforts to sell Commercial Paper Notes, in each case, up to the Maximum CP Rate applicable to the Commercial Paper Notes in order to repay maturing Commercial Paper Notes. If any Advance remains outstanding for a period of thirty (30) consecutive calendar days or any Dealer fails to sell Commercial Paper Notes, the proceeds of which are intended to be used to pay the Advance, after being directed to do so by the Department (subject to the provisions of the applicable Dealer Agreement) at the written direction of the Bank the Department shall cause the related Dealer (that has been unable to sell Commercial Paper Notes or fails to perform its duties) to be replaced with a Dealer satisfactory to the Bank within ninety (90) calendar days of the receipt of such written direction; provided that so long as the remaining Dealers for the Commercial Paper Notes are satisfactory to the Bank, it shall be sufficient for the Department only to remove the Dealer that has been unable to sell rollover Commercial Paper Notes or fails to perform its duties. Each Dealer

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Agreement shall provide that the related Dealer may not resign until the earlier of (a) the related Dealer providing at least sixty (60) days’ prior written notice to the Department, the Trustee and the Bank, and (b) provided the Department has decided to replace the related Dealer with a new dealer, the date on which a successor dealer has been appointed and accepted its appointment.

Section 6.13. Limitation on Additional Debt. The Department will not issue and/or incur any additional Debt payable from or secured by Subordinate Pledged Revenues, unless the Department provides the Bank with either of the certificates required pursuant to Section 2.11(a) or (b) of the Master Subordinate Trust Indenture, subject however, to the provisions of paragraphs (1), (2) or (3) of the last paragraph of Section 2.11 of the Master Subordinate Trust Indenture. On or prior to the date on which Debt secured by the Subordinate Pledged Revenues is to be issued or incurred, the Bank shall receive certification by an Authorized Representative of the Department as to compliance with all debt service coverage ratios that are required to be satisfied as a condition precedent to the issuance or incurrence of said Debt. Notwithstanding the foregoing, the Department will not issue and/or incur any additional Debt which is to be secured by Subordinate Pledged Revenues while any Advance is outstanding or any other Obligation remains unpaid unless all outstanding Advances and other unpaid Obligations are to be paid in full from the proceeds of such additional Debt or the Department receives the prior written consent of the Bank.

Section 6.14. Maintenance of Tax-Exempt Status of Commercial Paper Notes. The Department will not take any action or omit to take any action which, if taken or omitted, would adversely affect the exclusion of interest on any Commercial Paper Notes which are designated as Tax-Exempt Commercial Paper Notes (subject to the inclusion of any exception contained in the opinion delivered upon the original issuance of such Tax-Exempt Commercial Paper Notes, including, but not limited to, interest payable to a holder of any Private Activity Notes who is a “substantial user” or “related party” within the meaning of Section 147(a) of the Code) under the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture, from gross income for purposes of federal income taxation or the exemption of such interest from State of California personal income taxes; provided, however, that the failure to maintain the tax-exempt status of any Commercial Paper Notes which are designated as Tax-Exempt Commercial Paper Notes (referred to herein as “Adversely Affected Commercial Paper Notes”) shall not constitute an Event of Default hereunder so long as the Department issues taxable Commercial Paper Notes (i.e., the interest of which is taxable to the holders thereof) and applies the proceeds thereof to pay principal of and interest on the Adversely Affected Tax-Exempt Commercial Paper Notes on their respective maturity dates, and/or uses other available moneys (except proceeds of Tax-Exempt Commercial Paper Notes) of the Department to pay principal of and interest on the Adversely Affected Tax-Exempt Commercial Paper Notes on their respective maturity dates.

Section 6.15. Amendments to Senior Lien Trust Indenture and Program Documents. The Department will not amend or modify, or permit to be amended or modified in any manner whatsoever (i) Sections 2.09, 2.11, 4.01, 4.04 (excluding clauses Sixth through Ninth), 5.01, 5.03, 5.04, 5.06 or 5.12 of the Senior Lien Trust Indenture, or Sections 2.09, 2.11, 4.01, 5.01, 5.04 or 5.08 of the Master Subordinate Trust Indenture or the maximum rate applicable to the Commercial Paper Notes set forth in the Program Documents, in each case, without the prior written consent of the Bank nor shall it amend, modify or supplement any other provision of the Senior Lien Trust Indenture (other than those set forth above) or the Master Subordinate Trust Indenture (other than

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those set forth above) in a manner which would have a Material Adverse Effect or adversely affect the Department’s ability to repay Debt that is secured by Net Pledged Revenues or Subordinate Pledged Revenues or which adversely affects the security for the Commercial Paper Notes or the Bank Note or the Department’s ability to repay when due the Obligations or the interests, security, rights or remedies of the Bank under the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the other Program Documents or hereunder; or (ii) any Program Document (except the Master Subordinate Trust Indenture (other than as set forth in clause (i) above)) without the prior written consent of the Bank. In addition to, and not in lieu or limitation of, the foregoing, the Department will not amend or modify, or permit to be amended or modified in any manner whatsoever any provision of the Senior Lien Trust Indenture or the Master Subordinate Trust Indenture the amendment or modification of which requires the consent of any Bondholder (as defined in the Senior Lien Trust Indenture) or Holder (as defined in the Master Subordinate Trust Indenture), in each case, without the prior written consent of the Bank.



Section 6.17. Liens. The Department shall not, directly or indirectly, incur, create or permit to exist any Lien on all or any part of the security provided by the Senior Lien Trust Indenture and the Master Subordinate Trust Indenture that is senior to or on a parity with the Lien created by the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture for the benefit of the Commercial Paper Notes and the Obligations, other than (i) Liens created under and in accordance with the terms of the Senior Lien Trust Indenture and the Master Subordinate Trust Indenture, respectively; (ii) the Liens created for the benefit of the Commercial Paper Notes, the Obligations, the Senior Lien Revenue Bonds, the Subordinated Obligations, the Subordinate Obligations and reimbursement obligations owed to the provider of credit enhancement supporting Senior Lien Revenue Bonds, Subordinated Obligations or Subordinate Obligations that have heretofore or may hereafter be issued; and (iii) Liens which could not reasonably be expected to materially adversely affect the interests, rights, remedies or security of the Bank under this Agreement and the Bank Note..

Section 6.18. Book-Entry Eligibility. The Department covenants that at all times from and including the Closing Date until and including the Letter of Credit Expiration Date, the Department shall cause the Commercial Paper Notes to be eligible for, and to be registered with, DTC’s

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book-entry delivery services and that such registration with DTC shall not be discontinued without the Bank’s prior written consent.

Section 6.19. Substitute Credit Facility or Refinancing.

(a) The Department agrees to use its best efforts to obtain a substitute Credit Facility to replace the Letter of Credit or otherwise refinance, redeem or defease the Commercial Paper Notes in the event (i) the Bank decides not to extend the Letter of Credit Expiration Date or if the Department fails to request such an extension (such replacement, refinancing, redemption or defeasance to occur on or before the Letter of Credit Expiration Date), (ii) the Letter of Credit is terminated or (iii) the Department terminates this Agreement in accordance with the terms hereof.

(b) The Department agrees that any substitute Credit Facility will require, as a condition to the effectiveness of the substitute Credit Facility, that the provider of substitute Credit Facility provide funds to the extent necessary, on the date the substitute Credit Facility becomes effective, for payment of all Reimbursement Obligations at par plus interest (at the applicable rate pursuant to the terms hereof) through the date repaid. On the effective date of such substitute Credit Facility or refinancing, redemption or defeasance, as the case may be, the Department shall pay in full all other amounts due under this Agreement, the Fee Letter and the Bank Note (including, without limitation, all Excess Interest and unpaid interest thereon) and the Department shall provide for the surrender (and cancellation) of the Letter of Credit to the Bank.

(c) The Department shall not permit a substitute Credit Facility to become effective with respect to less than all of the Commercial Paper Notes of a Subseries without the prior written consent of the Bank.

Section 6.20. Incorporation of Waiver of Jury Trial and Judicial Reference from Bank Agreements. In the event that the Department has or shall enter into, or otherwise consent to any Bank Agreement which (i) provides that the Department waives any right to a trial by jury in any action, suit or proceeding arising under or relating to such Bank Agreement, or (ii) provides that the Department consents to the adjudication of any action, suit or proceeding arising under or relating to such Bank Agreement pursuant to judicial reference as provided in California Code of Civil Procedure Section 638, this Agreement shall be deemed to be amended to include a substantially similar provision for the benefit of the Bank (any such provision described in (i) or (ii) referred to herein as a “Section 6.20 Bank Agreement Provision”). The Department shall promptly notify the Bank of any Bank Agreement which it enters into with any other Person which contains a Section 6.20 Bank Agreement Provision, and the Department shall promptly, and in any event within fifteen (15) Business Days after the effective date of such Bank Agreement provide the Bank with a copy of such Bank Agreement. To evidence the foregoing, upon the reasonable request of the Bank, the Department shall enter into an amendment to this Agreement within sixty (60) days after a request by the Bank to document any Section 6.20 Bank Agreement Provision deemed to be added to this Agreement pursuant to this Section. Notwithstanding the foregoing, that the Bank shall automatically maintain the benefit of any Section 6.20 Bank Agreement Provision, even if the Department fails to provide the Bank with a copy of such Bank Agreement

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containing the Section 6.20 Bank Agreement Provision or fails to enter into any such amendment to this Agreement with the Bank.

Section 6.21. Immunity from Jurisdiction. To the fullest extent permitted by law, the Department will not assert any immunity it may have as a public entity under the laws of the State of California from lawsuits with respect to this Agreement, the Fee Letter or any other Program Document. Any such suits shall be subject to all substantive and procedural requirements of California law, including California Government Code, Title 1 Division 3.6 and the Charter. However, this provision shall not be construed as a waiver of any immunity applicable to any action brought against an employee of the Department or of the City (including any employee of the city attorney’s office).

Section 6.22. Swap Contracts. The Department will not enter into any Swap Contract relating to Debt (i) wherein any termination payments thereunder are senior to or on parity with the payment of the Commercial Paper Notes or any Reimbursement Obligations or (ii) which requires the Department to post collateral to secure its obligations thereunder (other than a Lien on Pledged Revenues and except to the extent required by any law or regulation not in effect on the Effective Date), in each case, without the prior written consent of the Bank.

Section 6.23. Budget and Appropriation. To the fullest extent permitted and/or required by California law, the Department shall cause the appropriate Department official(s) to take any and all ministerial actions that may be necessary to facilitate the payment of all obligations under this Agreement, the Fee Letter and the Bank Note and to include such obligations in the annual budget with respect to LAX (including any necessary appropriations related thereto).

Section 6.24. Use of Bank’s Name. The Department shall not include in an offering document for the Commercial Paper Notes any information concerning the Bank (other than identifying the Bank as a party to this Agreement and the issuer of the Letter of Credit) that is not supplied in writing, or otherwise consented to in writing, by the Bank expressly for inclusion therein. Except as may be required by law (including, but limited to, federal and state securities laws), the Department shall not use the Bank’s name in any published materials (other than the Department’s staff reports, annual statements, audited financial statements, rating agency presentations) without the prior written consent of the Bank (which consent shall not be unreasonably withheld); provided that, without the prior written consent of the Bank, the Department may identify the Bank as a party to this Agreement and as the issuer of the Letter of Credit, the stated amount of the Letter of Credit, the expiration date of the Letter of Credit and that the Department’s obligations under this Agreement are secured by Subordinate Pledged Revenues, in offering documents with respect to the Senior Lien Revenue Bonds and the Subordinate Obligations, so long as no other information relating to the Agreement, the Fee Letter or the Bank is disclosed in such offering documents without the prior written consent of the Bank.

From time to time, the Department expects to publish offering documents with respect to the Commercial Paper Notes, that will require the Department to include therein certain information about the Bank. At the reasonable request of the Department, the Bank will provide the Department with updated information about the Bank of the type included in Appendix A to

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the Offering Memorandum under the caption [“__________________”] in the Offering Memorandum for inclusion in such offering documents.

Section 6.25. Set-off Provisions in Other Documents. The Department shall not, directly or indirectly, enter into or otherwise consent to any Bank Agreement, which such Bank Agreement (i) provides the counterparty thereto with any right of set-off or (ii) fails to restrict such counterparty’s statutory or common law right of setoff, in each case, without the prior written consent of the Bank. Notwithstanding the foregoing sentence, in the event that the Department directly or indirectly, enters into or otherwise consents to any Bank Agreement which (x) includes the right of set-off or (y) fails to prohibit the exercise of the related Provider’s statutory or common law rights of setoff, then the Bank shall have, as a remedy under Section 7.02 hereof, the right to exercise any set-off with respect to any and all balances, credits, deposits (general or special, time or demand, provisional or final), accounts or monies at any time held and other Debt at any time owing by the Bank to or for the account of the Department and constituting Pledged Revenues (irrespective of the currency in which such accounts, monies or Debt may be denominated and the Bank are authorized to convert such accounts, monies and Debt into U.S. dollars) against any and all of the obligations of the Department under this Agreement, the Fee Letter and the Bank Note, whether or not the Bank shall have made any demand with respect thereto.

Section 6.26. No Preferential Treatment. In the event that the Department shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement which Bank Agreement includes the right, upon the occurrence of an “event of default” or “event of termination” under such Bank Agreement, to accelerate the payment of the principal of or interest on any Secured Debt or to otherwise cause the principal of and interest on any Secured Debt to become immediately due and payable, then the Bank shall have the right, upon the occurrence of an Event of Default, to declare all Obligations payable hereunder to be, and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Department; provided that upon the occurrence of an Event of Default under Section 7.01(i) hereof, such prepayment obligation or acceleration shall automatically become due and payable or automatically occur, as applicable, and without any notice.

Section 6.27. Outstanding Commercial Paper Notes. The Department shall provide, or shall cause the Trustee to provide to the Bank a statement listing all outstanding Commercial Paper Notes and the principal amount and maturity on or about the last day of each calendar month, or on such other dates, or at such other frequency, as the Department and the Bank may agree in writing.

ARTICLE VII

DEFAULTS

Section 7.01. Events of Default and Remedies. If any of the following events shall occur, each such event shall be an “Event of Default”:

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(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing or any Advance, (ii) any Letter of Credit Fee within ten (10) calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (other than the Obligations described in clause (i) or (ii) of this Section 7.01(a)) within ten (10) calendar days of the date such Obligation is due;

(b) any representation, warranty or statement made by or on behalf of the Department herein or in any Program Document to which the Department is a party or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made;

or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to the Bank by or on behalf of the Department in connection with the transactions contemplated hereby (the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to the Bank it is discovered by the Department or the Bank that such Department Information contained an inaccuracy, such inaccuracy shall not be considered an Event of Default if (i) at the time the Department furnished such Department Information to the Bank, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five (5) calendar days of the Department receiving notice of such discovery of the inaccuracy it provides the Bank with corrected Department Information;

(c) (i) the Department fails to perform or observe any term, covenant or agreement contained in Sections 6.01, 6.07, 6.09, 6.10(b), 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.19(b), 6.19(c), 6.21 and 6.22 hereof; or (ii) the Department fails to perform or observe any other term, covenant or agreement contained in this Agreement (other than those referred to in Sections 7.01(a) and 7.01(c)(i)) and any such failure cannot be cured or, if curable, remains uncured for sixty (60) days after the earlier of (A) written notice thereof to the Department or (B) an Authorized Representative having actual knowledge thereof;

(d) the Department shall (i) default in any payment of any Debt, (other than the Commercial Paper Notes, the Drawings or the Advances) secured by a charge, lien or encumbrance on the Net Pledged Revenues or the Subordinate Pledged Revenues with a lien on, pledge of, security interest in or priority of payment from the Net Pledged Revenues or the Subordinate Pledged Revenues that is senior to, or on a parity with, the Commercial Paper Notes, the Drawings or the Advances, including, without limitation, Senior Lien Revenue Bonds, Subordinate Obligations and Subordinated Obligations (“Secured Debt”), beyond the period of grace, if any, provided in the instrument or agreement under which such Secured Debt was created; or (ii) default in the observance or performance of any agreement or condition relating to any Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to

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cause, or to permit the holder or holders of such Secured Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Secured Debt to become due prior to its stated maturity (whether by acceleration, redemption, mandatory tender or otherwise);

(e) (i) a court or other Governmental Authority with jurisdiction to rule on the validity of this Agreement, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other Program Document to which the Department is a party shall find, announce or rule that (A) any material provision of this Agreement or any other Program Document to which the Department is a party; or (B) any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the rights and remedies of the Bank, is not a valid and binding agreement of the Department or; (ii) the Department shall contest the validity or enforceability of this Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies of the Bank or the pledge of, lien on or security interest in the Subordinate Pledged Revenues, or shall seek an adjudication that this Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies of the Bank, is not valid and binding on the Department or the Department shall repudiate its obligations under this Agreement or any other Program Document; or (iii) the validity, effectiveness or enforceability of the pledge of, lien on or security interest in the Subordinate Pledged Revenues granted to the Commercial Paper Notes under the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture and the Obligations hereunder and under the Fee Letter and the Bank Note shall at any time for any reason cease to be valid, effective or binding as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or shall be declared, in a final non-appealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable;

(f) (A) any provision of the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations hereunder or under the Fee Letter or the interests, security, rights or remedies of the Bank shall at any time for any reason cease to be in full force or effect, (B) any Program Document to which the Department is a party, except for any Dealer Agreement which has been terminated due to a substitution of a Dealer, or any material provision of any of the foregoing documents, shall at any time for any reason cease

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to be in full force or effect, or (C) the Department or any Person acting by or on behalf of the Department shall deny or disaffirm the Department’s obligations under the Master Subordinate Trust Indenture or the Seventh Supplemental Subordinate Trust Indenture or any other Program Document to which the Department is a party;

(g) a final judgment or order for the payment of money in excess of $25,000,000 (in excess of the amount of proceeds of applicable insurance actually paid in satisfaction of such judgment) shall have been rendered against the Department and such judgment or order shall not have been satisfied, stayed, vacated, discharged or bonded pending appeal within a period of ninety (90) days from the date on which it was first so rendered;

(h) (i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (including, without limitation, amounts due under any Bank Agreement) secured by a lien, charge or encumbrance upon the Subordinate Pledged Revenues; (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the Department seeks to have an order for relief entered with respect to it or LAX or seeking to adjudicate it or LAX insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, termination, composition or other relief with respect to it or LAX or its debts or those of LAX (or the existence of the Department or LAX is dissolved or terminated by any other means); (iii) the Department seeks appointment of a receiver, trustee, custodian or other similar official for itself or LAX or for any substantial part of the Department’s property, or the Department shall make a general assignment for the benefit of its creditors; (iv) there shall be commenced against the Department or LAX any case, proceeding or other action of a nature referred to in clause (ii) above and the same shall remain undismissed; (v) there shall be commenced against the Department or LAX any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal, within 60 days from the entry thereof; (vi) a financial control board, or its equivalent, shall be imposed upon the Department by a Governmental Authority; (vii) the Department takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) or (vi) above; or (viii) the Department or LAX shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due;


(j) any provision of the Charter relating to the Department is repealed, reenacted, amended or otherwise modified (including, without limitation, by legislative or

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judicial action but excluding any such action pursuant to Charter amendments approved by the voters prior to the date of this Agreement) or any other legislation is enacted, repealed, reenacted, amended or otherwise modified, and in the event of a repeal, reenactment, amendment, modification or enactment, such repeal, reenactment, amendment, modification or enactment, in the sole judgment of the Bank, has a material adverse effect on any right, interest, security or remedy of the Bank under this Agreement or the other Program Documents; or the Department’s existence as a department of the City under the Charter shall terminate;

(k) (i) any “event of default” shall have occurred and be continuing under any Program Document beyond the expiration of any applicable grace period or (ii) any “event of default” under any Bank Agreement with respect to any Secured Debt shall have occurred and be continuing beyond the expiration of any applicable grace period; or

(l) any funds or accounts or investments on deposit in, or otherwise to the credit of, any of the funds or accounts established pursuant to the Senior Lien Trust Indenture, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or the other Program Documents, that have been pledged to or a lien granted thereon to secure the Commercial Paper Notes, the Bank Note or the Obligations, shall become subject to any writ, judgment, warrant or attachment, execution or similar process which shall not have been vacated, discharged, or stayed or bonded pending appeal within fifteen (15) days from the entry thereof.

Section 7.02. Remedies. Upon the occurrence of any Event of Default, all Obligations shall bear interest at the Default Rate and the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:





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Section 7.03. Solely for the Benefit of Bank. The rights and remedies of the Bank specified herein are for the sole and exclusive benefit, use and protection of the Bank, and the Bank is entitled, but shall have no duty or obligation to the Department or any other Person or otherwise, to exercise or to refrain from exercising any right or remedy reserved to the Bank hereunder or under any of the other Program Documents.

Section 7.04. Discontinuance of Proceedings. In case the Bank shall proceed to invoke any right, remedy or recourse permitted hereunder or under the Program Documents and shall thereafter elect to discontinue or abandon the same for any reason, the Bank shall have the unqualified right so to do and, in such event, the Department and the Bank shall be restored to their former positions with respect to the Obligations, the Program Documents and otherwise, and the rights, remedies, recourse and powers of the Bank hereunder shall continue as if the same had never been invoked.

ARTICLE VIII

CITY PROVISIONS

Section 8.01.Nondiscrimination and Affirmative Action Program.

(a) Reserved.

(b) Non-Discrimination In Employment. To the extent the Bank is subject to and required by the hereinafter defined LA Admin Code, during the term of this Agreement, the Bank agrees and obligates itself in the performance of this Agreement not to discriminate against any employee or applicant for employment because of the employee’s or applicant’s race, religion, national origin, ancestry, sex, sexual orientation, age, physical handicap, marital status, domestic partner status, or medical condition. To the extent the Bank is subject to and required by the LA Admin Code, the Bank shall take affirmative action to insure that applicants for employment are treated, during the term of this Agreement, without regard to the aforementioned factors and shall comply with the affirmative action requirements of the Los Angeles Administrative Code (the “LA Admin Code”), Sections 10.8, et seq.

(c) Equal Employment Practices. To the extent required by the hereinafter defined Equal Employment Practices, if the total payments made under this Agreement are One Thousand Dollars ($1,000) or more, this provision shall apply. To the extent the Bank is subject to and required by the Equal Employment Practices, during the performance of this Agreement, the Bank agrees to comply with Section 10.8.3 of the LA Admin Code (“Equal Employment Practices”), which is incorporated herein by this reference to the extent required by the Equal Employment Practices. A copy of Section 10.8.3 of the LA Admin Code in effect on the Effective Date has been attached to this Agreement for the convenience of the parties as Exhibit D hereto. By way of specification but not limitation, pursuant to Sections 10.8.3.E and 10.8.3.F of the LA Admin Code, the failure of the Bank to comply with the Equal Employment Practices provisions of this Agreement could be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except pursuant to the Equal Employment Practices and upon a full and

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fair hearing after notice and an opportunity to be heard have been given to the Bank. Upon a finding duly made that the Bank has failed to comply with the Equal Employment Practices provisions of this Agreement, this Agreement could be forthwith terminated, cancelled, or suspended to the extent required by the Equal Employment Practices. Any such termination of this Agreement pursuant to the Equal Employment Practices shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.

(d) Affirmative Action Program. To the extent required by the hereinafter defined Affirmative Action Program, if the total payments made under this Agreement are One Hundred Thousand Dollars ($100,000) or more, this provision shall apply. To the extent the Bank is subject to and required by the Affirmative Action Program, during the performance of this Agreement, the Bank agrees to comply with Section 10.8.4 of the LA Admin Code (“Affirmative Action Program”), which is incorporated herein by this reference to the extent required by the Affirmative Action Program. A copy of Section 10.8.4 of the LA Admin Code in effect on the Effective Date has been attached to this Agreement for the convenience of the parties as Exhibit E hereto. By way of specification but not limitation, pursuant to Sections 10.8.4.E and 10.8.4.F of the LA Admin Code, the failure of the Bank to comply with the Affirmative Action Program provisions of this Agreement could be deemed to be a material breach of this Agreement. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard have been given to the Bank. Upon a finding duly made that the Bank has failed to comply with the Affirmative Action Program provisions of this Agreement, this Agreement could be forthwith terminated, cancelled, or suspended to the extent required by theAffirmative Action Program provisions. Any such termination of this Agreement pursuant to the Affirmative Action Program shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.

Section 8.02. Child Support Orders. To the extent required by the hereinafter defined Child Support Provisions, this Agreement is subject to Section 10.10, Article I, Chapter 1, Division 10 of the LA Admin Code related to Child Support Assignment Orders (“Child Support Provisions”), which is incorporated herein by this reference to the extent required by the Child Support Provisions. A copy of the Child Support Provisions in effect on the Closing Date has been attached to this Agreement for the convenience of the parties as Exhibit F hereto. To the extent the Bank is subject to and required by the Child Support Provisions, pursuant to this section, the Bank (and any subcontractor of the Bank providing services to the Department under this Agreement) shall (1) fully comply with all State and Federal employment reporting requirements for the Bank’s or the Bank’s subcontractor’s employees applicable to Child Support Assignment Orders; (2) certify that the principal owner(s) of the Bank and applicable subcontractors are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally; (3) fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignment in accordance with California Family Code Section 5230, et seq.; and (4) maintain such compliance throughout the term of this Agreement. To the extent the Bank is subject to and required by Section 10.10(b) of the LA Admin Code, failure of the Bank or an applicable subcontractor to comply with all applicable reporting requirements or to implement lawfully served Wage and Earnings Assignment Orders and Notices of Assignment or the failure of any principal owner(s) of the Bank or applicable subcontractors to comply with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally,

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shall (only to the extent required by the Child Support Provisions) constitute a default of this Agreement subjecting (only to the extent required by the Child Support Provisions) this Agreement to termination where such failure shall continue for more than ninety (90) days after notice of such failure to the Bank or such applicable subcontractor by the Department (in lieu of any time for cure provided elsewhere in this Agreement). Any such termination of this Agreement pursuant to the Child Support Provisions shall be subject to the termination provisions set forth in Section 2.07 of this Agreement.


Section 8.04. Notice of Changes to LA Admin Code Provisions. During the term of this Agreement, the Department shall provide the Bank with notice of any adopted or enacted changes, additions, amendments or modifications to the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, promptly but in no event later than seven (7) Business Days after the adoption or enactment thereof.

Section 8.05. Compliance with Los Angeles City Charter Section 470(c)(12). The Bank, the Participants, the Subcontractors and their Principals are obligated to fully comply with Charter Section 470(c)(12), Ordinance No. 181972 and other applicable ordinances related to Charter Section 470(c)(12) (the “Measure H Ordinance”) for such period as is required by the Measure H Ordinance, regarding limitations on campaign contributions and fundraising for the City Attorney and the Controller of the City, candidates for these offices, and the City committees they control to the extent such provisions are applicable to this Agreement. Additionally, the Bank is required, for as long as required by the Measure H Ordinance, to provide and update certain information required by the Measure H Ordinance to the Department within the timeframe required by the Measure H Ordinance; in turn, the Department will electronically submit the information to the City Ethics Commission as required by the Measure H Ordinance. The Bank shall include the following notice (each a “Participant/Subcontractor Notice”) in any contract with a Participant or a Subcontractor expected to receive at least $100,000 (each a “Measure H Subcontract”) in connection with its participation in this Agreement:

Notice Regarding Los Angeles Campaign Contribution and Fundraising Restrictions.

As provided in Los Angeles City Charter Section 470(c)(12), Ordinance No. 181972 and other applicable ordinances related to Charter Section 470(c)(12) (the “Measure H Ordinance”), you are considered a subcontractor in connection with the Amended and Restated Reimbursement Agreement dated as of September 1, 2020, by and between the Department of Airports of the City of Los Angeles (the “Department”) and Barclays Bank PLC, as Bank. Pursuant to the Los Angeles City Charter Section 470(c)(12), you and your Principals are prohibited from making campaign contributions and fundraising for the City Attorney and the Controller of the City, candidates for these offices, and the City committees they control, as provided in the Measure H Ordinance. You are required to provide to Barclays Bank PLC the information

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required by the Measure H Ordinance with respect to your Principals and contact information within the timeframe required by the Measure H Ordinance and to update that information if it changes during the timeframe required by the Measure H Ordinance. Failure to comply may result in termination of this Participation Agreement or any other available legal remedies, including fines. Information about the restrictions may be found at the City Ethics Commission’s website at http://ethics.lacity.org/ or by calling (213) 978-1960.

The Bank, the Participants, the Subcontractors and their Principals shall comply with these requirements and limitations. Any failure of the Bank to include a Participant/Subcontractor Notice in an applicable Measure H Subcontract pursuant to the foregoing provision and any violation of Section 470(c)(12) of the Charter or the Measure H Ordinance by the Bank or a Principal of the Bank shall entitle the City to terminate this Agreement in accordance with the terms of the Measure H Ordinance and pursue any and all applicable legal remedies that may be available to the City. Any such termination of this Agreement pursuant to the Measure H Ordinance shall be subject to the termination provisions set forth in Section 2.07 of this Agreement. Any violation of Section 470(c)(12) of the Charter or the Measure H Ordinance by a Participant or Subcontractor or their respective Principals may subject the Participant or Subcontractor or such respective Principal to penalties under Section 470(c)(12) of the Charter or the Measure H Ordinance.

The Bank represents and warrants that the individuals identified on Bidder Contributions CEC Form 55 submitted in connection with this Agreement on the Closing Date, other than those described clauses (i), (ii), (iii) or (v) of the definition of “Principal” herein, are the individual employees authorized to represent the Bank before the City in connection with this Agreement.

During the term of this Agreement, the Department shall use its commercially reasonable efforts to provide the Bank with notice of any adopted or enacted changes, additions, amendments or modifications to campaign contribution or fundraising restrictions applicable to the Bank that relate to this Agreement (including, without limitation, any amendments or modifications to the Charter or the Measure H Ordinance), within seven (7) Business Days after the adoption or enactment thereof; provided that the Bank acknowledges that it is solely responsible for complying with the provisions of this Section and the Department’s failure to provide such information shall not constitute an Event of Default. The Bank may obtain information about the Measure H Ordinance at the City Ethics Commission’s website at http://ethics.lacity.org/ or by calling 213/978-1960.

Section 8.06. Adoption or Enaction of Changes, Additions, Amendments or Modifications Not Applicable to Bank After Delivery of Tier Two Termination Notice. Any changes, additions, amendments or modifications to the Equal Employment Practices, Affirmative Action Program, Child Support Provisions or Measure H Ordinance, as applicable, after the Closing Date, shall not apply to the Bank on and after the date of receipt by the Department of a Tier Two Termination Notice.

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ARTICLE IX

MISCELLANEOUS

Section 9.01. Amendments, Waivers, Etc. No modification, amendment or waiver of any provision of this Agreement or the Bank Note, or consent to any departure by the Department therefrom, shall in any event be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no amendment, waiver or consent shall, unless in writing and signed by the Bank, affect the rights or duties of the Bank under this Agreement or any other Program Document.

Section 9.02. Notices. All notices and other communications provided for hereunder shall be in writing (including required copies) and sent by receipted hand delivery (including Federal Express or other receipted courier service), facsimile transmission, or regular mail, as follows:

to the Department: Board of Airport Commissioners Department of Airports The City of Los Angeles One World Way Los Angeles, California 90045 Telephone: (424) 646-5251 Facsimile: (424) 646-9223 Attention: Chief Financial Officer

with a copy to: Los Angeles City Attorney One World Way Los Angeles, California 90045

to the Bank with respect to credit matters:

Barclays Bank PLC 745 Seventh Avenue, 19th Floor New York, New York 10019 Telephone: (212) 528-1053 Facsimile: (917) 254-1353 Attention: James Saakvitne Email: [email protected]

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to the Bank, with respect to Drawings under the Letter of Credit:

Barclays Bank PLC 745 Seventh Avenue New York, New York 10019 Telephone: (212) 526-2961 or

(212) 320-7534 Facsimile: (212) 412-5011 Attention: Letter of Credit Department

to the Trustee: U.S. Bank National Association 100 Wall Street, 16th Floor New York, New York 10005 Telephone: (212) 361-2892 Facsimile: (212) 514-6841 Attention: Corporate Trust Services

to the Dealers: Citigroup Global Markets Inc. Public Finance Department 390 Greenwich Street, 2nd Floor New York, New York 10013 Telephone: (212) 723-5594 Facsimile: (212) 723-8939 Attention: Manager, Short-Term Finance Group

J.P. Morgan Securities LLC 383 Madison Avenue, 8th Floor New York, New York 10179 Telephone: (212) 834-7224 Facsimile: (917) 456-3541 Attention: [email protected] E-mail: Peter McCarthy

Loop Capital Markets LLC Fixed Income Division 111 West Jackson Blvd., Suite 1901 Chicago, Illinois 60604 Telephone: (312) 913-2274 Facsimile: (312) 913-4928 Attention: Short Term Desk E-mail: [email protected]

With a Copy to:

Loop Capital Markets LLC Investment Banking Division – Public Finance 12100 Wilshire Blvd., Suite 430

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Los Angeles, California 90025 Telephone: (310) 442-1200, ext. 24 Facsimile: (310) 442-1208 Attention: [___________] E-mail: [___________]

BofA Securities, Inc. One Bryant Park Ninth Floor New York, New York 10036 Telephone: (212) 449-5101 Facsimile: (646) 736-6960 Attention: Municipal Markets Department

Morgan Stanley & Co. LLC 1585 Broadway New York, New York 10036 Telephone: (212) 761-9093 Facsimile: (212) 507-2103 Attention: Municipal Short Term Products E-mail: [email protected]

Samuel A. Ramirez & Co., Inc. 61 Broadway, Suite 2924 New York, New York 10006 Telephone: (212) 378-7122 Facsimile: (212) 248-0528 Attention: Short-Term Desk

Wells Fargo Bank, National Association 50 S Tryon St, 4th Floor Charlotte, North Carolina 28202 Telephone: (704) 410-4091 Facsimile: (704) 383-0065 Attention: Rick White, Director E-mail: [email protected]

or, as to each Person named above, at such other address as shall be designated by such Person in a written notice to the parties hereto. All such notices and other communications shall, when delivered or sent by facsimile transmission or mailed, be effective when deposited with the courier, sent by facsimile transmission or mailed respectively, addressed as aforesaid, except that Drawing certificates submitted to the Bank shall not be effective until received by the Bank.

Section 9.03. Survival of Covenants; Successors and Assigns. (a) All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant

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hereto shall survive the making of any Drawing or Advance hereunder and shall continue in full force and effect and until all Obligations hereunder, under the Fee Letter and under the Bank Note shall have been paid in full. Such representations and warranties have been or will be relied upon by the Bank, regardless of any investigation made by the Bank or on its behalf and notwithstanding that the Bank may have had notice or knowledge of any Default or Event of Default at the time of honoring a Drawing. Whenever in this Agreement and the Fee Letter any of the parties hereto and thereto is referred to, such reference shall, subject to the last sentence of this Section, be deemed to include the successors and assigns of such party, and all covenants, promises and agreements by or on behalf of the Department which are contained in this Agreement, the Fee Letter and the Bank Note shall inure to the benefit of the successors and assigns of the Bank. The Department may not transfer its rights or obligations under this Agreement, the Fee Letter or the Bank Note without the prior written consent of the Bank. The Bank may transfer some or all of its rights and obligations under this Agreement and/or the Letter of Credit with the prior written consent of the Department (which consent shall not be withheld unreasonably); provided that (i) the Department has received written notice from each Rating Agency that the transfer shall not cause the lowering, withdrawal or suspension of any ratings then existing on the Commercial Paper Notes; and (ii) the Bank shall be responsible for all costs resulting from the transfer. This Agreement, the Fee Letter and the Bank Note are made solely for the benefit of the Department, the Bank, and no other Person (including, without limitation, the Trustee, any Dealer or any holder of Commercial Paper Notes) shall have any right, benefit or interest under or because of the existence of this Agreement, the Fee Letter or the Bank Note; provided further that the Department’s liability to any Participant shall not in any event exceed that liability which the Department would owe to the Bank but for such participation.

(b) Notwithstanding the foregoing, the Bank shall be permitted to grant to one or more financial institutions (each a “Participant”) a participation or participations in all or any part of the Bank’s rights and benefits under this Agreement, the Fee Letter and the Bank Note on a participating basis but not as a party to this Agreement, the Fee Letter or the Bank Note (a “Participation”) without the consent of the Department. The Bank shall provide the Department with written notice of any Participation not more than five (5) Business Days after the date of entering into such Participation. In the event of any such grant by the Bank of a Participation to a Participant, the Bank shall remain responsible for the performance of its obligations hereunder, and the Department shall continue to deal solely and directly with the Bank in connection with the Bank’s rights and obligations under this Agreement and the Bank Note. The Department agrees that each Participant shall, to the extent of its Participation, be entitled to the benefits of this Agreement, the Fee Letter and the Bank Note as if such Participant were the Bank; provided that no Participant shall have the right to declare, or to take actions in response to, an Event of Default under Section 7.01 hereof; and provided further that no such Participant shall be entitled to receive payment pursuant to Section 2.14 hereof in an amount greater than the amount which would have been payable had the Bank not granted a Participation to such Participant.

(c) Certain Pledges. In addition to the rights of the Bank set forth above, the Bank may at any time pledge or assign a security interest in all or any portion of its rights or interests under this Agreement, the Bank Note and the other Program Documents to secure obligations of the Bank or an Affiliate of the Bank, including any pledge or assignment to secure obligations to a Federal Reserve Bank or to any state or local governmental entity or with respect to public deposits;

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provided that no such pledge or assignment shall release the Bank from any of its obligations hereunder or substitute any such pledgee or assignee for the Bank as a party hereto.

Section 9.04. Unconditional Obligations. The obligations of the Department under this Agreement, the Fee Letter and the Bank Note shall be absolute, unconditional, irrevocable and performed and payable strictly in accordance with the terms of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, this Agreement, the Fee Letter and the Bank Note, under all circumstances whatsoever, including, without limitation, the following:

(a) any lack of validity or enforceability of this Agreement, the Fee Letter, the Letter of Credit, the Bank Note or, to the extent permitted by law, the Commercial Paper Notes, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or any other Program Document;

(b) any amendment or waiver of or any consent to departure from the terms of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture or all or any of the other Program Documents to which the Bank have not consented in writing;

(c) the existence of any claim, counterclaim, set off, recoupment, defense, or other right which any Person may have at any time against the Bank, the Department, the Trustee, any Dealer, or any other Person, whether in connection with this Agreement, the Fee Letter, the Bank Note, the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture, the other Program Documents, or any other transaction related thereto;

(d) any statement or any other document presented pursuant hereto or pursuant to the Letter of Credit which the Bank in good faith determines to be valid, sufficient or genuine and which subsequently proves to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

(e) payment by the Bank of a Drawing or an Advance against presentation of a request which the Bank in good faith determines to be valid, sufficient or genuine and which subsequently is found not to comply with the terms of this Agreement; and

(f) any other circumstances or happening whatsoever whether or not similar to any of the foregoing.

SECTION 9.05. LIABILITY OF BANK: INDEMNIFICATION. (a) TO THE FULLEST EXTENT

PERMITTED BY THE LAWS OF THE STATE, THE DEPARTMENT ASSUMES ALL RISKS OF THE ACTS OR

OMISSIONS OF THE TRUSTEE WITH RESPECT TO THE USE OF THE LETTER OF CREDIT AND THE USE OF

PROCEEDS THEREUNDER; PROVIDED THAT THIS ASSUMPTION WITH RESPECT TO THE BANK IS NOT

INTENDED TO AND SHALL NOT PRECLUDE THE DEPARTMENT FROM PURSUING SUCH RIGHTS AND

REMEDIES AS IT MAY HAVE AGAINST THE TRUSTEE UNDER ANY OTHER AGREEMENTS. NEITHER THE

BANK NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS SHALL BE LIABLE OR

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RESPONSIBLE FOR (I) THE USE OF THE LETTER OF CREDIT, THE DRAWINGS OR ADVANCES

THEREUNDER OR HEREUNDER, THE PROCEEDS OF THE COMMERCIAL PAPER NOTES OR THE

TRANSACTIONS CONTEMPLATED HEREBY AND BY THE PROGRAM DOCUMENTS OR FOR ANY ACTS OR

OMISSIONS OF THE TRUSTEE OR ANY DEALER; (II) THE VALIDITY, SUFFICIENCY OR GENUINENESS OF

ANY DOCUMENTS DETERMINED IN GOOD FAITH BY THE BANK TO BE VALID, SUFFICIENT OR GENUINE,EVEN IF SUCH DOCUMENTS SHALL, IN FACT, PROVE TO BE IN ANY OR ALL RESPECTS INVALID,FRAUDULENT, FORGED OR INSUFFICIENT; (III) PAYMENTS BY THE BANK AGAINST PRESENTATION OF

REQUESTS FOR DRAWINGS OR REQUESTS FOR WHICH THE BANK IN GOOD FAITH HAS DETERMINED TO

BE VALID, SUFFICIENT OR GENUINE AND WHICH SUBSEQUENTLY ARE FOUND NOT TO COMPLY WITH

THE TERMS OF THIS AGREEMENT OR THE LETTER OF CREDIT; OR (IV) ANY OTHER CIRCUMSTANCES

WHATSOEVER IN MAKING OR FAILING IN GOOD FAITH TO MAKE PAYMENT HEREUNDER OR UNDER THE

LETTER OF CREDIT; PROVIDED THAT THE DEPARTMENT SHALL NOT BE REQUIRED TO INDEMNIFY THE

BANK FOR ANY CLAIMS, LOSSES, LIABILITIES, COSTS OR EXPENSES TO THE EXTENT, BUT ONLY TO THE

EXTENT, SOLELY AND DIRECTLY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF

THE BANK.

(b) TO THE EXTENT PERMITTED BY THE LAWS OF THE STATE, THE DEPARTMENT HEREBY

INDEMNIFIES AND HOLDS HARMLESS THE BANK AND ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES

OR AGENTS (EACH AN “INDEMNITEE”) FROM AND AGAINST ANY AND ALL DIRECT, AS OPPOSED TO

CONSEQUENTIAL OR PUNITIVE CLAIMS, DAMAGES (THE RIGHT TO RECEIVE CONSEQUENTIAL OR

PUNITIVE DAMAGES BEING HEREBY WAIVED), LOSSES, LIABILITIES, COSTS OR EXPENSES (INCLUDING

SPECIFICALLY REASONABLE ATTORNEYS’ FEES) WHICH THE BANK MAY INCUR (OR WHICH MAY BE

CLAIMED AGAINST THE BANK BY ANY PERSON WHATSOEVER) (COLLECTIVELY, THE “LIABILITIES”)BY REASON OF OR IN CONNECTION WITH (I) THE EXECUTION AND DELIVERY OF THIS AGREEMENT,THE FEE LETTER, THE LETTER OF CREDIT AND THE BANK NOTE AND THE TRANSACTIONS

CONTEMPLATED HEREBY OR THEREBY; AND (II) THE STATEMENTS CONTAINED IN THE OFFERING

MEMORANDUM PREPARED AND DISTRIBUTED IN CONNECTION WITH THE COMMERCIAL PAPER NOTES;PROVIDED, HOWEVER, THAT THE DEPARTMENT SHALL NOT BE REQUIRED TO INDEMNIFY THE BANK

FOR (A) ANY CLAIMS, DAMAGES (THE RIGHT TO RECEIVE CONSEQUENTIAL OR PUNITIVE DAMAGES

BEING HEREBY WAIVED), LOSSES, LIABILITIES, COSTS OR EXPENSES (1) TO THE EXTENT, BUT ONLY

TO THE EXTENT, SOLELY AND DIRECTLY CAUSED BY (X) THE BANK’S WILLFUL MISCONDUCT OR

GROSS NEGLIGENCE IN DETERMINING WHETHER THE DOCUMENTS PRESENTED UNDER THE LETTER OF

CREDIT COMPLY WITH THE TERMS OF THE LETTER OF CREDIT; OR (Y) THE BANK’S WILLFUL OR

GROSSLY NEGLIGENT FAILURE TO MAKE LAWFUL PAYMENT UNDER THE LETTER OF CREDIT AFTER

THE PROPER PRESENTATION TO THE BANK BY THE TRUSTEE OR A SUCCESSOR TRUSTEE UNDER THE

SEVENTH SUPPLEMENTAL SUBORDINATE TRUST INDENTURE OF A DRAWING STRICTLY COMPLYING

WITH THE TERMS AND CONDITIONS OF THE LETTER OF CREDIT; OR (2) INCURRED IN CONNECTION

WITH THE STATEMENTS CONTAINED IN APPENDIX A TO THE OFFERING MEMORANDUM UNDER THE

CAPTION [“_________________________”] AS SET FORTH IN THE OFFERING MEMORANDUM; OR

(B) DISPUTES SOLELY BETWEEN THE DEPARTMENT AND AN INDEMNITEE, WHICH DISPUTES ARE

SUBJECT TO THE TERMS OF SECTION 9.05(C), 9.05(D) AND 9.05(E) HEREOF. The Bank is hereby expressly authorized and directed to honor any demand for payment which is made under the Letter of Credit without regard to, and without any duty on its part to inquire into the existence of, any disputes or controversies between the Department, any Dealer, the Trustee or any other person or the respective rights, duties or liabilities of any of them, or whether any facts or occurrences represented in any of the documents presented under the Letter of Credit are true and correct.

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(c) Notwithstanding anything to the contrary contained in this Section 9.05, the Department shall have a claim against an Indemnitee and such Indemnitee shall be liable to the Department, to the extent of any direct, as opposed to special, indirect, consequential or punitive damages (the right to receive special, indirect, consequential or punitive damages being hereby waived) suffered by the Department which the Department proves were caused solely by such Indemnitee’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction.

(d) In addition to any and all rights of reimbursement, indemnification, subrogation or any other rights pursuant to this Section 9.05, solely with respect to disputes between the Department and an Indemnitee, the Department hereby agrees to pay to each Indemnitee only those Liabilities incurred by reason of or in connection with any such dispute only if the applicable court of competent jurisdiction determines that such Indemnitee did not act with gross negligence or willful misconduct with respect to such dispute.

(e) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, the Department shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Program Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, the Letter of Credit or the use of the proceeds of Drawings thereunder. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Program Documents or the transactions contemplated hereby or thereby.

(f) Payments. All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.

(g) Survival. The agreements in this Section survive the termination of the Letter of Credit and the repayment, satisfaction or discharge of all the other Obligations.

Section 9.06. Expenses and Taxes. The Department will promptly pay (a) the reasonable fees and expenses of domestic counsel to the Bank incurred in connection with the preparation, execution and delivery of this Agreement, the Fee Letter and the Letter of Credit and the reasonable fees and expenses of foreign counsel to the Bank incurred in connection with the preparation, execution and delivery of this Agreement, the Fee Letter and the Letter of Credit as set forth in the Fee Letter; (b) the reasonable fees and disbursements of counsel to the Bank with respect to advising the Bank as to the rights and responsibilities under this Agreement and the Fee Letter after the occurrence of an Event of Default; and (c) all reasonable costs and expenses, if any, in connection with the enforcement of this Agreement and the Fee Letter and any other documents which may be delivered in connection herewith or therewith, including in each case the fees and disbursements of counsel to the Bank. In addition, the Department shall pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the

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execution, delivery, filing and recording of this Agreement and the Fee Letter and the security contemplated by the Program Documents and any related documents and agrees to hold the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. In addition, the Department agrees to pay, after the occurrence of an Event of Default, all costs and expenses (including attorneys’ fees and costs of settlement) incurred by the Bank in enforcing any obligations or in collecting any payments due from the Department hereunder or under the Fee Letter by reason of such Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement or the Fee Letter in the nature of a “workout” or of any insolvency or bankruptcy proceedings.

Section 9.07. No Waiver; Conflict. Neither any failure nor any delay on the part of the Bank in exercising any right, power or privilege hereunder, nor any course of dealing with respect to any of the same, shall operate as a waiver thereof, preclude any other or further exercise thereof nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies herein provided are cumulative, and not exclusive of any remedies provided by law. To the extent of any conflict between this Agreement, the Letter of Credit, the Senior Lien Trust Indenture and any other Program Documents, this Agreement shall control solely as between the Department and the Bank.

Section 9.08. Modification, Amendment, Waiver, Etc. No modification, amendment or waiver of any provision of this Agreement, the Fee Letter or the Bank Note shall be effective unless the same shall be in writing and signed by the parties hereto.

Section 9.09. Severability. Any provision of this Agreement or the other Program Documents which is prohibited or illegal, invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction, and all other remaining provisions hereof will be construed to render them enforceable to the fullest extent permitted by law. The parties hereto shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.

Section 9.10. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but when taken together shall constitute but one agreement and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement, the other Program Documents, and any separate letter agreements with respect to fees payable to the Bank, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Bank and when the Bank shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement or any other Program Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually

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executed counterpart of this Agreement or such other Program Document or certificate. Such paper copies or “printouts,” if introduced as evidence in any judicial, arbitral, mediation or administrative proceeding, will be admissible as between the parties to the same extent and under the same conditions as other original business records created and maintained in documentary form. Neither party shall contest the admissibility of true and accurate copies of electronically signed documents on the basis of the best evidence rule or as not satisfying the business records exception to the hearsay rule. Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Program Document, upon the request of any party, such fax transmission or e-mail transmission shall be promptly followed by such manually executed counterpart.

Section 9.11. Table of Contents; Headings. The table of contents and the section and subsection headings used herein have been inserted for convenience of reference only and do not constitute matters to be considered in interpreting this Agreement.

Section 9.12. ENTIRE AGREEMENT. THIS AGREEMENT AND THE FEE LETTER, TOGETHER

WITH THE BANK NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND

MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL

AGREEMENTS OF THE PARTIES HERETO.

Section 9.13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, provided that, the obligations of the Department shall be governed by and construed in accordance with the laws of the State.

Section 9.14. Right of Set-off. Notwithstanding anything to the contrary contained herein, except to the extent otherwise provided in Section 6.25 hereof, the Bank and any Participant each hereby agree that it will not assert any of its statutory or common law rights of setoff as the depository bank of the Department or the City in connection with the collection or repayment of any of the Obligations or any other obligation of the Department owing to the Bank or a Participant under this Agreement, the Fee Letter or any other Program Document.

Section 9.15. USA Patriot Act; Government Regulations. The Bank hereby notifies the Department that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), the Bank is required to obtain, verify and record information that identifies the Department, which information includes the name and address of the Department and other information that will allow the Bank to identify the Department in accordance with the Patriot Act. The Department hereby agrees that it shall promptly provide such information upon request by the Bank and provide all documentation and other information that the Bank reasonably requests in order to comply with its ongoing obligations under applicable law or regulation, including, without limitation, “know your customer” and anti-money laundering rules and regulations.

The Department hereby represents and warrants and covenants and agrees (a) that it is not and shall not be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the OFAC, the Department of the Treasury or included in any Executive Orders, that prohibits or limits the Bank from making any advance or extension of credit to the

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Department or from otherwise conducting business with the Department and (b) to ensure that the proceeds of Drawings shall not be used to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto.

Section 9.16. Dealing with the Department, the Trustee, and/or the Dealer. The Bank and its affiliates may accept deposits from, extend credit to and generally engage in any kind of banking, trust or other business with the Department, the Trustee, and/or any Dealer regardless of the capacity of the Bank hereunder.

Section 9.17. No Advisory or Fiduciary Responsibility. In connection with all aspects of the transactions contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Program Document), the Department acknowledges and agrees that: (i) (A) the transactions are arm’s-length commercial transactions among the Department, for its part, and the Bank and its respective affiliates, for their part, (B) the Department has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Department is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Program Documents; (ii) (A) the Bank and each of its affiliates is and has been acting solely as a principal and has not been, is not, and will not be acting as an advisor (municipal, financial or otherwise), agent or fiduciary for the Department, or any other Person and the Bank is not recommending that the Department take an action with respect to the transaction described in this Agreement and the other Program Document and (B) neither the Bank nor any of its affiliates has any obligation to the Department, except those obligations expressly set forth herein; (iii) the Bank and each of its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Department, and neither the Bank nor any of its affiliates has any obligation to disclose any of such interests to the Department and (iv) the Bank has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the Department with respect to this transaction and the discussions, undertakings and procedures leading thereto (irrespective of whether the Bank or any of its affiliates has provided other services or is currently providing other services to the Department on other matters). To the fullest extent permitted by applicable law, the Department hereby waives and releases any claims that it may have against the Bank and each of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

Section 9.18. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. The Department acknowledges and accepts that notwithstanding any other term of this Agreement or any other agreement, arrangement or understanding with the Bank, any liability arising under or in connection with this Agreement (including, without limitation, any liability arising out of or in connection with the Letter of Credit) may be subject to Bail-In Action and the Department accepts to be bound by the effect of:

(a) any Bail-In Action in relation to such liability, including (without limitation):

(i) a reduction, in full or in part, of any amount due in respect of any such liability;

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(ii) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, the Department; and

(iii) a cancellation of any such liability; and

(b) a variation of any term of this Agreement or the Letter of Credit to the extent necessary to give effect to Bail-In Action in relation to any such liability.

Section 9.19. Electronic Execution of Certain Documents. This Agreement and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Agreement (each a “Communication”), including Communications required to be in writing, may, if agreed by the Bank, be in the form of an Electronic Record and may be executed using Electronic Signatures, including, without limitation, facsimile and/or .pdf. The Department agrees that any Electronic Signature (including, without limitation, facsimile or .pdf) on or associated with any Communication shall be valid and binding on the Department to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of the Department enforceable against the Department in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered to the Bank. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Bank may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Bank’s business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary, the Bank is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Bank pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Bank has agreed to accept such Electronic Signature, the Bank shall be entitled to rely on any such Electronic Signature without further verification and (b) upon the request of the Bank any Electronic Signature shall be promptly followed by a manually executed, original counterpart. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

Section 9.20. Amendment and Restatement. This Agreement amends and restates in its entirety the Existing Reimbursement Agreement and from and after the Effective Date all references made to the Existing Reimbursement Agreement in any other instrument or document shall without more, be deemed to refer to this Agreement. This Agreement shall become effective and supersede all provisions of the Existing Reimbursement Agreement upon the execution of this Agreement by each of the parties hereto and the fulfillment of all conditions precedent hereof but

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is not intended to be or operate as a novation or an accord and satisfaction of the Existing Reimbursement Agreement or the indebtedness, obligations and liabilities of the Department evidenced or provided for thereunder.

[Remainder of page intentionally left blank; signature page follows]

Signature Page to Reimbursement Agreement 4828-6752-2499.2

IN WITNESS WHEREOF, the Department and the Bank have duly executed this Agreement as of the date first above written.


ANGELES, CALIFORNIA



Date: September [__], 2020

By _______________________________________ Deputy/Assistant City Attorney

BARCLAYS BANK PLC

By: ____________________________________ James Saakvitne Authorized Signatory for and on behalf of

Barclays Bank PLC

4828-6752-2499.2

APPENDIX I

FORM OF IRREVOCABLE TRANSFERABLE DIRECT-PAY LETTER OF CREDIT

BARCLAYS BANK PLC

[To be provided]

EXHIBIT A (to Reimbursement Agreement)

4828-6752-2499.2

EXHIBIT A

[FORM OF TIER ONE STOP ISSUANCE INSTRUCTION]

[Dated Date]

Board of Airport Commissioners Department of Airports The City of Los Angeles One World Way Los Angeles, CA 90045 Attention: Finance and Budget Division/

Chief Financial Officer

U.S. Bank National Association, as Trustee 100 Wall Street, Suite 1600 New York, NY 10005 Attention: Commercial Paper Administration

Re: Department of Airports of the City of Los Angeles, California Los Angeles International Airport

Subordinate Revenue Commercial Paper Notes Subseries A-2 (Governmental – Non-AMT)

Subseries B-2 (Private Activity – AMT)Subseries C-2 (Federally Taxable)

[Subseries D-2 (Private Activity – Non-AMT)]


Pursuant to Sections 3.02(b) and 7.02(b) of that certain Amended and Restated Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Reimbursement Agreement”), by and between the Department of Airports of the City of Los Angeles (the “Department”) and the undersigned, as Bank, you are hereby notified that (a) either (1) an “Event of Default” under Section 7.01(_) of the Reimbursement Agreement has occurred and is now continuing or (2) one or more of the representations and warranties of the Department set forth in the Reimbursement Agreement, are in the reasonable opinion of the Bank, no longer true and correct in all material respects and; (b) upon receipt of this notice, (i) no new Commercial Paper Notes, as defined in the Reimbursement Agreement, shall be issued or authenticated (ii) the Stated Amount of the Letter of Credit shall be permanently reduced to $_____________, representing the principal amount of Commercial Paper Notes currently outstanding and interest thereon, and shall be further

A-2 4828-6752-2499.2

permanently reduced following the maturity of any such Commercial Paper Notes, and (iii) the Stated Amount shall no longer be reinstated following payment by the Bank of any Drawings.

This Tier One Stop Issuance Instruction shall remain in effect unless you have received written notification from us that this Tier One Stop Issuance Instruction has been rescinded.

Very truly yours,

BARCLAYS BANK PLC, as Bank

By: ____________________________________ Name: ______________________________ Title: _______________________________

cc: [DEALER] [RATING AGENCIES]

EXHIBIT B (to Reimbursement Agreement)

4828-6752-2499.2

EXHIBIT B

[FORM OF BANK NOTE]

$228,900,000 Initial Maximum Principal Amount September [__], 2020

FOR VALUE RECEIVED, the undersigned, DEPARTMENT OF AIRPORTS OF THE CITY OF LOS

ANGELES, CALIFORNIA (the “Department”), hereby promises to pay to the order of BARCLAYS

BANK PLC (the “Bank”) at its principal office at 200 Park Avenue, New York, New York 10166, in the manner and on the dates provided in the hereinafter defined Agreement in lawful money of the United States of America and in immediately available funds, the principal amount equal to the aggregate unreimbursed amount of the Advances made by the Bank pursuant to the Agreement not to exceed Two Hundred and Twenty Eight Million Six Hundred and Forty One Thousand and Ninety Six Dollars ($228,900,000). Terms used herein and not otherwise defined herein shall have the meanings assigned to them in the Amended and Restated Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Agreement”) by and between the Department and the Bank, as from time to time in effect.

The Department further promises to pay interest from the date hereof on the outstanding principal amount hereof and unpaid interest hereon from time to time on the dates, in the manner, at the rates and times and in all cases in accordance with the terms of the Agreement. The Bank may endorse its records relating to this Bank Note with appropriate notations evidencing the Advances under the Agreement and payments of principal hereunder as contemplated by the Agreement.

This Bank Note is issued pursuant to, is entitled to the benefits of, and is subject to, the provisions of the Agreement and that certain Master Subordinate Trust Indenture, dated as of December 1, 2002, as supplemented and amended, including as supplemented and amended by that certain Seventh Supplemental Subordinate Trust Indenture dated as of March 1, 2012, as amended, each by and between the Department and U.S. Bank National Association, as Trustee. The principal of this Bank Note is subject to prepayment in whole or in part in accordance with the terms of the Agreement.

The parties hereto, including the undersigned maker and all guarantors, endorsers and pledgors that may exist at any time with respect hereto, hereby waive presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Bank Note and assent to the extensions of the time of payment or forbearance or other indulgence without notice.

This Bank Note and the obligations of the Department hereunder shall for all purposes be governed by and interpreted and determined in accordance with the laws of the State of California (excluding the laws applicable to conflicts or choice of law).

NEITHER THE FAITH AND THE CREDIT NOR THE TAXING POWER OF THE CITY OF LOS ANGELES,THE STATE OF CALIFORNIA OR ANY PUBLIC AGENCY, OTHER THAN THE DEPARTMENT TO THE EXTENT

OF THE SUBORDINATE PLEDGED REVENUES, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR

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INTEREST ON THIS BANK NOTE. NONE OF THE PROPERTIES OF THE AIRPORT SYSTEM ARE SUBJECT TO

ANY MORTGAGE OR OTHER LIEN FOR THE BENEFIT OF THE BANK. THE DEPARTMENT HAS NO POWER

OF TAXATION.

THIS BANK NOTE AND THE INTEREST THEREON IS JUNIOR AND SUBORDINATE IN ALL

RESPECTS TO THE SENIOR LIEN REVENUE BONDS AS TO LIEN ON AND SOURCE AND SECURITY FOR

PAYMENT FROM THE NET PLEDGED REVENUES.

Signature Page to Bank Note 4828-6752-2499.2

IN WITNESS WHEREOF, the Department has caused this Bank Note to be signed in its name as an instrument by its duly authorized officer on the date and in the year first above written.


By Chief Financial Officer

Attest:

By Secretary of the Board of Airport Commissioners of the City of Los Angeles, California

EXHIBIT C (to Reimbursement Agreement)

4828-6752-2499.2

EXHIBIT C

[FORM OF REQUEST FOR EXTENSION]

Barclays Bank PLC, as Bank 745 Seventh Avenue, 19th Floor New York, New York 10019 Attention: James Saakvitne

cc: Via Facsimile to (917) 254-1353

Re: Request for Extension of Irrevocable Transferable Direct-Pay Letter of Credit No. [______]


Pursuant to Section 2.12 of that certain Amended and Restated Reimbursement Agreement, dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Reimbursement Agreement”), by and between the Department of Airports of the City of Los Angeles, California (the “Department”) and Barclays Bank PLC (the “Bank”), the Department hereby requests that the Letter of Credit Expiration Date be extended for a one-year extension. All capitalized terms contained herein which are not specifically defined herein shall be deemed to have the definition set forth in the Reimbursement Agreement.

The Bank is requested to notify the Department of its decision with respect to this request for extension within thirty (30) days of the date of receipt of all information necessary, in the Bank’s reasonable judgment, to permit the Bank to make an informed credit decision. If the Bank fails to notify the Department of its decision within such 30-day period, the Bank shall be deemed to have rejected such request.

Very truly yours,


ANGELES, CALIFORNIA

By: ____________________________________ Name: ______________________________ Title: _______________________________

cc: U.S. Bank National Association, as Trustee

4828-6752-2499.2

EXHIBIT D


Sec. 10.8.3. Equal Employment Practices Provisions.

Every non-construction contract with or on behalf of the City of Los Angeles for which the consideration is $1,000 or more, and every construction contract for which the consideration is $1,000 or more, shall contain the following provisions, which shall be designated as the EQUAL EMPLOYMENT PRACTICES provision of such contract:

A. During the performance of this contract, the contractor agrees and represents that it will provide equal employment practices and the contractor and each subcontractor hereunder will ensure that in his or her employment practices persons are employed and employees are treated equally and without regard to or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition. 1. This provision applies to work or service performed or materials manufactured or assembled in the United States. 2. Nothing in this section shall require or prohibit the establishment of new classifications of employees in any given craft, work or service category. 3. The contractor agrees to post a copy of Paragraph A hereof in conspicuous places at its place of business available to employees and applicants for employment.


C. As part of the City’s supplier registration process, and/or at the request of the awarding authority, or the Board of Public Works, Office of Contract Compliance, the contractor shall certify in the specified format that he or she has not discriminated in the performance of City contracts against any employee or applicant for employment on the basis or because of race, religion, national origin, ancestry, sex, sexual orientation, age, disability, marital status or medical condition.

D. The contractor shall permit access to and may be required to provide certified copies of all of his or her records pertaining to employment and to employment practices by the awarding authority or the Office of Contract Compliance for the purpose of investigation to ascertain compliance with the Equal Employment Practices provisions of City contracts. On their or either of their request the contractor shall provide evidence that he or she has or will comply therewith.

E. The failure of any contractor to comply with the Equal Employment Practices provisions of this contract may be deemed to be a material breach of City contracts. Such failure shall only be established upon a finding to that effect by the awarding authority, on the basis of its own investigation or that of the Board of Public Works, Office of Contract Compliance. No such finding shall be made or penalties assessed except upon a full and fair hearing after notice and an opportunity to be heard has been given to the contractor.

F. Upon a finding duly made that the contractor has failed to comply with the Equal Employment Practices provisions of a City contract, the contract may be forthwith canceled, terminated or suspended, in whole or in part, by the awarding authority, and all monies due or to become due hereunder may be forwarded to and retained by the City of Los Angeles. In addition thereto, such failure to comply may be the basis for a determination by the awarding authority or the Board of Public Works that the said contractor is an irresponsible bidder or proposer pursuant to the provisions of Section 371 of the Charter of the City of Los Angeles. In the event of such a determination, such contractor shall be disqualified from being awarded a contract with the City of Los Angeles for a period of two years, or until the contractor shall establish and carry out a program in conformance with the provisions hereof.

G. Notwithstanding any other provision of this contract, the City of Los Angeles shall have any and all other remedies at law or in equity for any breach hereof.

H. The Board of Public Works shall promulgate rules and regulations through the Office of Contract Compliance, and provide necessary forms and required language to the awarding authorities to be included in City Request for Bids or Request for Proposal packages or in supplier registration requirements for the implementation of the Equal Employment Practices provisions of this contract, and such rules and regulations and forms shall, so far as practicable, be similar to those adopted in applicable Federal Executive orders. No other rules, regulations or forms may be used by an awarding authority of the City to accomplish the contract compliance program.

D-2 4828-6752-2499.2

I. Nothing contained in this contract shall be construed in any manner so as to require or permit any act which is prohibited by law.

J. At the time a supplier registers to do business with the City, or when an individual bid or proposal is submitted, the contractor shall agree to adhere to the Equal Employment Practices specified herein during the performance or conduct of City Contracts.

K. Equal Employment Practices shall, without limitation as to the subject or nature of employment activity, be concerned with such employment practices as: 1. Hiring practices; 2. Apprenticeships where such approved programs are functioning, and other on-the-job training for non-apprenticeable occupations; 3. Training and promotional opportunities; and 4. Reasonable accommodations for persons with disabilities.

L. All contractors subject to the provisions of this section shall include a like provision in all subcontracts awarded for work to be performed under the contract with the City and shall impose the same obligations, including but not limited to filing and reporting obligations, on the subcontractors as are applicable to the contractor. Failure of the contractor to comply with this requirement or to obtain the compliance of its subcontractors with all such obligations shall subject the contractor to the imposition of any and all sanctions allowed by law, including but not limited to termination of the contractor’s contract with the City. SECTION HISTORY Amended by: Ord. No. 147,030, Eff. 4-28-75; Paragraphs A., B., C., Ord. No. 164,516, Eff. 4-13-89; Paragraphs C., Ord. No. 168,244, Eff. 10-18-92; Ord. No. 173,186, Eff. 5-22-00; Subsec. F Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00.

4828-6752-2499.2

EXHIBIT E


Sec. 10.8.4. Affirmative Action Program Provisions

Every non-construction contract with or on behalf of the City of Los Angeles for which the consideration is $100,000 or more and every construction contract with or on behalf of the City of Los Angeles for which the consideration is $5,000 or more shall contain the following provisions which shall be designated as the AFFIRMATIVE ACTION PROGRAM provisions of such contract:

A. During the performance of a City contract, the contractor certifies and represents that the contractor and each subcontractor hereunder will adhere to an affirmative action program to ensure that in its employment practices, persons are employed and employees are treated equally and without regard to or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition. 1. This provision applies to work or services performed or materials manufactured or assembled in the United States. 2. Nothing in this section shall require or prohibit the establishment of new classifications of employees in any given craft, work or service category. 3. The contractor shall post a copy of Paragraph A hereof in conspicuous places at its place of business available to employees and applicants for employment.


C. As part of the City’s supplier registration process, and/or at the request of the awarding authority or the Office of Contract Compliance, the contractor shall certify on an electronic or hard copy form to be supplied, that the contractor has not discriminated in the performance of City contracts against any employee or applicant for employment on the basis or because of race, religion, ancestry, national origin, sex, sexual orientation, age, disability, marital status or medical condition.

D. The contractor shall permit access to and may be required to provide certified copies of all of its records pertaining to employment and to its employment practices by the awarding authority or the Office of Contract Compliance, for the purpose of investigation to ascertain compliance with the Affirmative Action Program provisions of City contracts, and on their or either of their request to provide evidence that it has or will comply therewith.

E. The failure of any contractor to comply with the Affirmative Action Program provisions of City contracts may be deemed to be a material breach of contract. Such failure shall only be established upon a finding to that effect by the awarding authority, on the basis of its own investigation or that of the Board of Public Works, Office of Contract Compliance. No such finding shall be made except upon a full and fair hearing after notice and an opportunity to be heard has been given to the contractor.

F. Upon a finding duly made that the contractor has breached the Affirmative Action Program provisions of a City contract, the contract may be forthwith cancelled, terminated or suspended, in whole or in part, by the awarding authority, and all monies due or to become due hereunder may be forwarded to and retained by the City of Los Angeles. In addition thereto, such breach may be the basis for a determination by the awarding authority or the Board of Public Works that the said contractor is an irresponsible bidder or proposer pursuant to the provisions of Section 371 of the Los Angeles City Charter. In the event of such determination, such contractor shall be disqualified from being awarded a contract with the City of Los Angeles for a period of two years, or until he or she shall establish and carry out a program in conformance with the provisions hereof.

G. In the event of a finding by the Fair Employment and Housing Commission of the State of California, or the Board of Public Works of the City of Los Angeles, or any court of competent jurisdiction, that the contractor has been guilty of a willful violation of the California Fair Employment and Housing Act, or the Affirmative Action Program provisions of a City contract, there may be deducted from the amount payable to the contractor by the City of Los Angeles under the contract, a penalty of TEN DOLLARS ($10.00) for each person for each calendar day on which such person was discriminated against in violation of the provisions of a City contract.

H. Notwithstanding any other provisions of a City contract, the City of Los Angeles shall have any and all other remedies at law or in equity for any breach hereof.

E-2 4828-6752-2499.2

I. The Public Works Board of Commissioners shall promulgate rules and regulations through the Office of Contract Compliance and provide to the awarding authorities electronic and hard copy forms for the implementation of the Affirmative Action Program provisions of City contracts, and rules and regulations and forms shall, so far as practicable, be similar to those adopted in applicable Federal Executive Orders. No other rules, regulations or forms may be used by an awarding authority of the City to accomplish this contract compliance program.

J. Nothing contained in City contracts shall be construed in any manner so as to require or permit any act which is prohibited by law.

K. The contractor shall submit an Affirmative Action Plan which shall meet the requirements of this chapter at the time it submits its bid or proposal or at the time it registers to do business with the City. The plan shall be subject to approval by the Office of Contract Compliance prior to award of the contract. The awarding authority may also require contractors and suppliers to take part in a pre-registration, pre-bid, pre-proposal, or pre-award conference in order to develop, improve or implement a qualifying Affirmative Action Plan. Affirmative Action Programs developed pursuant to this section shall be effective for a period of twelve months from the date of approval by the Office of Contract Compliance. In case of prior submission of a plan, the contractor may submit documentation that it has an Affirmative Action Plan approved by the Office of Contract Compliance within the previous twelve months. If the approval is 30 days or less from expiration, the contractor must submit a new Plan to the Office of Contract Compliance and that Plan must be approved before the contract is awarded. (1) Every contract of $5,000 or more which may provide construction, demolition, renovation, conservation or major maintenance of any kind shall in addition comply with the requirements of Section 10.13 of the Los Angeles Administrative Code. (2) A contractor may establish and adopt as its own Affirmative Action Plan, by affixing his or her signature thereto, an Affirmative Action Plan prepared and furnished by the Office of Contract Compliance, or it may prepare and submit its own Plan for approval.

L. The Office of Contract Compliance shall annually supply the awarding authorities of the City with a list of contractors and suppliers who have developed Affirmative Action Programs. For each contractor and supplier the Office of Contract Compliance shall state the date the approval expires. The Office of Contract Compliance shall not withdraw its approval for any Affirmative Action Plan or change the Affirmative Action Plan after the date of contract award for the entire contract term without the mutual agreement of the awarding authority and the contractor.

M. The Affirmative Action Plan required to be submitted hereunder and the pre-registration, pre-bid, pre-proposal or pre-award conference which may be required by the Board of Public Works, Office of Contract Compliance or the awarding authority shall, without limitation as to the subject or nature of employment activity, be concerned with such employment practices as: 1. Apprenticeship where approved programs are functioning, and other on-the-job training for non-apprenticeable occupations; 2. Classroom preparation for the job when not apprenticeable; 3. Pre-apprenticeship education and preparation; 4. Upgrading training and opportunities; 5. Encouraging the use of contractors, subcontractors and suppliers of all racial and ethnic groups, provided, however, that any contract subject to this ordinance shall require the contractor, subcontractor or supplier to provide not less than the prevailing wage, working conditions and practices generally observed in private industries in the contractor’s, subcontractor’s or supplier’s geographical area for such work; 6. The entry of qualified women, minority and all other journeymen into the industry; and 7. The provision of needed supplies or job conditions to permit persons with disabilities to be employed, and minimize the impact of any disability.

N. Any adjustments which may be made in the contractor’s or supplier’s work force to achieve the requirements of the City’s Affirmative Action Contract Compliance Program in purchasing and construction shall be accomplished by either an increase in the size of the work force or replacement of those employees who leave the work force by reason of resignation, retirement or death and not by termination, layoff, demotion or change in grade.

O. Affirmative Action Agreements resulting from the proposed Affirmative Action Plan or the pre-registration, pre-bid, pre-proposal or pre-award conferences shall not be confidential and may be publicized by the contractor at his or her discretion. Approved Affirmative Action Agreements become the property of the City and may be used at the discretion of the City in its Contract Compliance Affirmative Action Program.

P. This ordinance shall not confer upon the City of Los Angeles or any Agency, Board or Commission thereof any power not otherwise provided by law to determine the legality of any existing collective bargaining agreement

E-3 4828-6752-2499.2

and shall have application only to discriminatory employment practices by contractors or suppliers engaged in the performance of City contracts.

Q. All contractors subject to the provisions of this section shall include a like provision in all subcontracts awarded for work to be performed under the contract with the City and shall impose the same obligations, including but not limited to filing and reporting obligations, on the subcontractors as are applicable to the contractor. Failure of the contractor to comply with this requirement or to obtain the compliance of its subcontractors with all such obligations shall subject the contractor to the imposition of any and all sanctions allowed by law, including but not limited to termination of the contractor’s contract with the City. SECTION HISTORY Amended by Ord. No. 147,030, Eff. 4-28-75; Paragraphs A., B., C., Ord. No. 164,516, Eff. 4-13-89; Paragraphs B. and C., Ord. No. 168,244, Eff. 10-18-92; Title and Section, Ord. No. 173,186, Eff. 5-22-00; Subsec. F, Ord. No. 173,285, Eff. 6-26-00, Oper. 7-1-00.

4828-6752-2499.2

EXHIBIT F

SECTION 10.10 OF THE LOS ANGELES ADMINISTRATIVE CODE

Sec. 10.10 Child Support Assignment Orders

a. Definitions. 1. Awarding Authority means a subordinate or component entity or person of the City (such as a City department or Board of Commissioners) that has the authority to enter into a contract or agreement for the provision of goods or services on behalf of the City of Los Angeles. 2. Contract means any agreement, franchise, lease or concession including an agreement for any occasional professional or technical personal services, the performance of any work or service, the provision of any materials or supplies, or the rendering of any service to the City of Los Angeles or to the public which is let, awarded or entered into with, or on behalf of, the City of Los Angeles or any awarding authority thereof. 3. Contractor means any person, firm, corporation, partnership or any combination thereof which submits a bid or proposal or enters into a contract with any awarding authority of the City of Los Angeles. 4. Subcontractor means any person, firm, corporation, partnership or any combination thereof who enters into a contract with a contractor to perform or provide a portion of any contract with the City. 5. Principal Owner means any person who owns an interest of 10 percent or more in a contractor or subcontractor as defined herein. b. Mandatory Contract Provisions. Every contract that is let, awarded or entered into with or on behalf of the City of Los Angeles shall contain a provision obligating the contractor or subcontractor to fully comply with all applicable State and Federal employment reporting requirements for the contractor or subcontractor’s employees. The contractor or subcontractor will also be required to certify that the principal owner(s) thereof are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally, that the contractor or subcontractor will fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments in accordance with California Family Code §§5230 et seq. and that the contractor or subcontractor will maintain such compliance throughout the term of the contract. Failure of a contractor or subcontractor to comply with all applicable reporting requirements or to implement lawfully served Wage and Earnings Assignments or Notices of Assignment or failure of the principal owner(s) to comply with any Wage and Earnings Assignments or Notices of Assignment applicable to them personally shall constitute a default under the contract. Failure of the contractor or subcontractor or principal owner thereof to cure the default within 90 days of notice of such default by the City shall subject the contract to termination. c. Notice to Bidders. Each awarding authority shall be responsible for giving notice of the provisions of this ordinance to those who bid on, or submit proposals for, prospective contracts with the City. d. Current Contractor Compliance. Within 30 days of the operative date of this ordinance, the City, through its operating departments, shall serve upon existing contractors a written request that they and their subcontractors (if any) comply with all applicable State and Federal employment reporting requirements for the contractor and subcontractor’s employees, that they certify that the principal owner(s) of the contractor and any subcontractor are in compliance with any Wage and Earnings Assignment Orders and Notices of Assignment applicable to them personally, that the contractor and subcontractor will fully comply with all lawfully served Wage and Earnings Assignment Orders and Notices of Assignments in accordance with California Family Code §§5230 et seq. and that the contractor and subcontractor will maintain such compliance throughout the term of the contract. e. City’s Compliance with California Family Code. The City shall maintain its compliance with the provisions of California Family Code §§5230 et seq. and all other applicable law regarding its obligations as an employer to implement lawfully served Wage and Earnings Assignments and Notices of Assignment. f. Report of Employees’ Names to District Attorney. 1. The City shall maintain its current practice of assisting the District Attorney’s support enforcement activities by annually reporting to the Los Angeles County District Attorney the names of all of its employees and retirees so that the District Attorney may identify those employees and retirees subject to Wage and Earnings Assignment Orders and Notices of Assignment and may establish court orders for support, where appropriate. Should the District Attorney so request it, the City will provide such information on a more frequent basis. 2. All applicants for employment with the City of Los Angeles will be asked to acknowledge their responsibility to comply with any court-ordered support obligations and will be advised of the City’s practice of assisting the District Attorney as described in the provisions of Subsection f.1., above. SECTION HISTORY Added by Ord. No. 172,401, Eff.2-13-99

Amended and Restated Fee Letter (Barclays)

DRAFT

1975291 4838-7980-0003.3

AMENDED AND RESTATED FEE LETTER

DATED SEPTEMBER [__], 2020

Reference is hereby made to that (i) certain Amended and Restated Reimbursement Agreement dated as of September 1, 2020 (as amended, supplemented, modified or restated from time to time, the “Agreement”), by and between the DEPARTMENT OF AIRPORTS OF THE CITY OF

LOS ANGELES, CALIFORNIA (the “Department”) and Barclays Bank PLC (the “Bank”) relating to the Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes Subseries A-2 (Governmental - Non-AMT), Subseries B-2 (Private Activity - AMT), Subseries C-2 (Federally Taxable) and Subseries D-2 (Private Activity – Non-AMT) (collectively, the “Commercial Paper Notes”), (ii) that certain Amended and Restated Irrevocable Transferable Direct-Pay Letter of Credit dated the date hereof, issued by the Bank pursuant to the Agreement, supporting the Commercial Paper Notes (as amended, supplemented, modified or restated from time to time, the “Letter of Credit”), and (iii) that certain Fee Letter dated September 13, 2017 (the “Original Fee Letter”) between the Department and the Bank. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement.

The Department has requested that the Bank make certain modifications to the Original Fee Letter, and, for the sake of clarity and convenience, the Bank and the Department wish to amend and restate the Original Fee Letter as set forth herein. The purpose of this Amended and Restated Fee Letter dated September [__], 2020 (the “Fee Letter”) is to confirm the agreement between the Bank and the Department with respect to certain fees and expenses payable by the Department to the Bank pursuant to the Agreement. This Fee Letter is the Fee Letter referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement. This Fee Letter and the Agreement are to be construed as one agreement between the Authority and the Bank, and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Agreement will be deemed to include all amounts, fees and expenses payable under this Fee Letter.

ARTICLE I. FEES.

Section 1.1. Letter of Credit Fees. The Department agrees to pay or cause to be paid to the Bank, on October 1, 2020, for the period commencing on July 1, 2020, and ending on September 30, 2020, and in arrears on the first Business Day of each January, April, July and October occurring thereafter to the Letter of Credit Expiration Date, and on the Letter of Credit Expiration Date, a non-refundable facility fee (the “Letter of Credit Fee”) for each quarterly fee period, commencing on the first calendar day of such quarterly fee period and ending on the last calendar day of such quarterly fee period, in an amount equal to the product of the applicable rate per annum corresponding to the Level specified below in the pricing matrix associated with the Rating (as defined below) as specified below (the “Letter of Credit Fee Rate”) for each day during each related quarterly fee period multiplied by the applicable Stated Amount of the Letter of Credit (without regard to any temporary reductions thereof that may be subject to reinstatement) for each day during each related quarterly fee period:

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(i) for the period commencing on July 1, 2020, to but not including the Effective Date, the Letter of Credit Fee Rate for such period shall be determined in accordance with the applicable Level and corresponding Rating set forth below:

LEVEL

MOODY’S

RATING S&P RATING FITCH RATING

LETTER OF CREDIT

FEE RATE


Level 2: A1 A+ A+ 0.55%

Level 3: A2 A A 0.80%

Level 4: A3 A- A- 1.05%




(ii) for the period commencing on and including the Effective Date, and at all times thereafter, the Letter of Credit Fee Rate for such period shall be determined in accordance with the applicable Level and corresponding Rating set forth below:

LEVEL

MOODY’S


LETTER OF CREDIT

FEE RATE


Level 2: A1 A+ A+ 1.10%

Level 3: A2 A A 1.35%

Level 4: A3 A- A- 1.60%




The term “Rating” as used above shall mean the long-term unenhanced debt rating assigned by any of Moody’s, S&P or Fitch to Senior Lien Revenue Bonds or any bonds or notes of the Department secured by a senior lien on the Net Pledged Revenues and (i) if the ratings on such obligations are assigned by all three Rating Agencies, and two of such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the two equivalent ratings appear; (ii) if such ratings are assigned by all three Rating Agencies and no two such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the middle such rating appears; and (iii) if such ratings are assigned by only two Rating Agencies and such ratings are not equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the lower such rating appears (for the avoidance of doubt, Level 7 is the lowest Level, and Level 1 is the highest Level for purposes of the above pricing grid). In the event that any relevant rating is withdrawn, suspended or otherwise unavailable from any of Moody’s, S&P or Fitch for any credit-related

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reason (and such suspension or withdrawal is initiated by the respective rating agency) or if any such rating falls below “Baa3” (or its equivalent) by Moody’s or “BBB-” (or its equivalent) by S&P or Fitch, in each such case, the Letter of Credit Fee Rate shall equal the Letter of Credit Fee Rate set forth in Level 7 plus 2.00% per annum, immediately and automatically and without notice to the Department. Upon the occurrence and during the continuance of any Event of Default (whether or not the Bank declares an Event of Default in connection therewith), the Letter of Credit Fee Rate shall equal the Letter of Credit Fee Rate then in effect plus 2.00% per annum, immediately and automatically and without notice to the Department. Any change in the Letter of Credit Fee Rate resulting from a reduction, withdrawal, suspension or unavailability of a relevant rating shall be and become effective as of and on the date of the announcement of the reduction, withdrawal, suspension or unavailability of such rating. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system by any such Rating Agency, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system which most closely approximates the applicable rating category as currently in effect. The Department acknowledges that as of the Effective Date the Letter of Credit Fee Rate is that specified above for Level 1. In the event that the Letter of Credit Fees are not paid when due, interest shall accrue on the Letter of Credit Fees from the date payment is due until payment in full at the Default Rate, such interest to be payable on demand. Such Letter of Credit Fee shall be payable in immediately available funds and computed on the basis of a 360-day year and the actual number of days elapsed.


Section 1.3. Amendment, Transfer, Waiver Fees and Other Fees and Expenses. Upon each transfer of the Letter of Credit in accordance with its terms or the appointment of a successor Trustee under the Master Subordinate Trust Indenture, the Department agrees to pay the Bank a non-refundable transfer fee in an amount equal to $2,500, and to reimburse the Bank for its actual costs and expenses associated with such transfer or appointment (including, without limitation, the reasonable fees and expenses of counsel to the Bank), payable on the date of such transfer or appointment.

The Department agrees to pay to the Bank on the date of each amendment, modification, or supplement of the Agreement, this Fee Letter, the Bank Note or the Letter of Credit or any amendment, modification, or supplement to any Program Document which requires the waiver or consent of the Bank, a non-refundable amendment, modification, supplement, waiver or consent fee, as applicable, to be mutually agreed upon by the Department and the Bank and determined at the time of such amendment, modification, or supplement plus the reasonable fees of any legal counsel retained by the Bank in connection therewith.

Section 1.4. Termination Fee; Reduction Fee. (a) Notwithstanding the foregoing or any other provision of the Agreement or this Fee Letter to the contrary, the Department agrees not to terminate, permanently reduce or replace the Agreement or the Letter of Credit prior to the Letter of Credit Expiration Date, except upon (i) the payment by the Department to the Bank of the

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Termination Fee or a Reduction Fee, as described below, (ii) the payment by the Department to the Bank of all Obligations payable under the Agreement and this Fee Letter and (iii) the Department providing the Bank with thirty (30) days prior written notice of its intent to terminate the Agreement and the Letter of Credit; provided, that any such termination of the Agreement or the Letter of Credit shall be in compliance with the terms and conditions of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and the Agreement;provided, further, that (A) no Termination Fee shall become payable if the Letter of Credit is terminated or replaced as a result of (1) a reduction of any two of the Bank’s senior unsecured short-term ratings below “P-1” by Moody’s, “A-1” by S&P or “F1” by Fitch, (2) the Bank imposing increased costs on the Department in accordance with Section 2.14 of the Agreement, (3) a finding by the Department, pursuant to the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, as applicable, on the basis of its own investigation or that of the Board of Public Works-Office of Contract Compliance, following a full and fair hearing after notice and an opportunity to be heard has been given to the Bank, that the Bank has failed to comply (subject to any applicable cure period) with the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, as applicable, each as in effect on the Effective Date, and such failure is' determined to be a material breach of the Agreement, (4) the Bank is identified in a debarment notice from the City Ethics Commission in connection with a violation of the Measure H Ordinance and the Department determines in writing and at a public meeting that it is in the best interests of the City to terminate the Agreement, or (5) the Department’s ability to issue Commercial Paper Notes being terminated or the Commercial Paper Program implemented pursuant to the Seventh Supplemental Subordinate Trust Indenture being permanently retired, so long as no portion of the source of funds for such termination or permanent retirement is derived from proceeds of commercial paper or other indebtedness supported by a letter of credit, liquidity facility or another form of liquidity support or credit enhancement or is directly purchased by a bank or other financial institution, (B) no Reduction Fee shall become payable with respect to a permanent reduction of the Commercial Paper Program, so long as no portion of the source of funds for such permanent reduction represents proceeds of commercial paper, variable rate demand bonds or other indebtedness supported by a letter of credit, liquidity facility or another form of liquidity support or credit enhancement or a direct purchase of securities by a bank or similar financial institution (referred to herein as “Permitted Reductions”), (C) no Termination Fee shall become payable if the Letter of Credit is terminated or replaced after the second anniversary of the Effective Date and (D) no Reduction Fee shall become payable with respect to a permanent reduction of the Stated Amount of the Letter of Credit that occurs after the second anniversary of the Effective Date.


(b) Except as provided in clauses (A) and (C) of Section 1.4(a) hereof, the Department hereby agrees to pay to the Bank a Termination Fee in connection with the termination or replacement of the Letter of Credit by the Department as set forth in Section 1.4(a) hereof in an amount equal to the product of (A) the Letter of Credit Fee Rate in effect pursuant to Section 1.1 hereof on the date of termination, (B) the Stated Amount (less Permitted Reductions but without regard to any reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) in effect on the date of

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the termination, and (C) a fraction, the numerator of which is equal to the number of days from and including the date of such termination to and including the second anniversary of the Effective Date and the denominator of which is 360 (the “Termination Fee”), payable on the date the Letter of Credit is terminated or replaced.

(c) Except as provided in clauses (B) and (D) of Section 1.4(a) hereof, the Department hereby agrees to pay to the Bank a reduction fee in connection with each and every permanent reduction of the Letter of Credit by the Department as set forth in Section 1.4(a) hereof in an amount equal to the product of (A) the Letter of Credit Fee Rate in effect pursuant to Section 1.1 hereof on the date of such permanent reduction, (B) the difference between the Stated Amount (without regard to any reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) prior to such permanent reduction and the Stated Amount (without regard to any reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) after such permanent reduction, and (C) a fraction, the numerator of which is equal to the number of days from and including the date of such permanent reduction to and including the second anniversary of the Effective Date and the denominator of which is 360 (the “Reduction Fee”), payable on the date the Stated Amount of the Letter of Credit is permanently reduced.


Section 2.1. Expenses. The Department shall pay the reasonable legal fees and expenses of the Bank incurred in connection with the preparation and negotiation of the Agreement, the Letter of Credit, this Fee Letter and certain other Related Documents in an amount not to exceed $10,000 for domestic counsel and $5,000 for foreign counsel (in each case plus disbursements). Legal fees shall be paid directly to the Bank’s domestic counsel, Chapman and Cutler LLP, in accordance with the instructions provided by Chapman and Cutler LLP, and to the Bank with respect to the Bank’s foreign counsel, McDermott Will & Emery LLP, in accordance with the instructions provided by the Bank.

Section 2.2. Amendments. No amendment to this Fee Letter shall become effective without the prior written consent of the Department and the Bank.

Section 2.3. Governing Law. This Fee Letter shall be governed by and construed in accordance with the internal laws of the State of New York; provided that, the Department’s obligations under this Fee Letter shall be governed by and construed in accordance with the internal laws of the State of California.

Section 2.4. Counterparts. This Fee Letter may be executed in two or more counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument; and any of the parties hereto may execute this Fee Letter by signing such counterpart. This Fee Letter may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.

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Section 2.5. Severability. Any provision of this Fee Letter which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

Section 2.6. No Disclosure. Unless required by law, the Department shall not deliver or permit, authorize or consent to the delivery of this Fee Letter to any Dealer or any other Person unless the Bank provides its prior written consent.

Section 2.7. Amendment and Restatement. This Fee Letter amends and restates in its entirety the Original Fee Letter but is not intended to be or operate as a novation or an accord and satisfaction of the Original Fee Letter or the indebtedness, obligations and liabilities of the Borrower evidenced or provided for thereunder. Reference to this specific Fee Letter need not be made in any agreement, document, instrument, letter, certificate, the Original Fee Letter itself, or any communication issued or made pursuant to or with respect to the Original Fee Letter, any reference to the Original Fee Letter being sufficient to refer to the Original Fee Letter as amended and restated hereby, and more specifically, any and all references to the Fee Letter in the Agreement shall mean this Fee Letter.


Signature Page to Barclays Fee Letter 4838-7980-0003.3

IN WITNESS WHEREOF, the parties hereto have caused this Fee Letter to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.


ANGELES, CALIFORNIA



Date: [_______], 2020


Signature Page to Barclays Fee Letter 4838-7980-0003.3

BARCLAYS BANK PLC

By: ____________________________________ James Saakvitne Authorized signatory for and on behalf of

Barclays Bank PLC

First Amendment to Reimbursement Agreement (Sumitomo Mitsui)

DRAFT

4150439 4811-7545-9011.3

FIRST AMENDMENT TO REIMBURSEMENT AGREEMENT

This First Amendment to Reimbursement Agreement (this “Amendment”) dated [September ___], 2020 (the “First Amendment Effective Date”), is between the DEPARTMENT OF

AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA, a duly constituted department of the City of Los Angeles, organized and existing pursuant to Article VI of the Charter of the City of Los Angeles (the “Department”) and SUMITOMO MITSUI BANKING CORPORATION, acting through its New York Branch, and its successors and assigns (the “Bank”). All capitalized terms used herein and not defined herein shall have the meanings set forth in the hereinafter defined Agreement.

W I T N E S S E T H

WHEREAS, the Department and the Bank have previously entered into that certain Reimbursement Agreement dated as of September 1, 2017 (as amended, restated, supplemented or otherwise modified to date, the “Agreement”), pursuant to which the Bank issued that certain Irrevocable Transferable Direct-Pay Letter of Credit No. LG/MIS/NY-116006 dated September 13, 2017 (the “Letter of Credit”), supporting the Department’s Los Angeles International Airport Subordinate Revenue Commercial Paper Notes Subseries A-1 (Governmental - Non-AMT), Subseries B-1 (Private Activity – AMT), Subseries C-1 (Federally Taxable) and Subseries D-1 (Private Activity – Non-AMT);

WHEREAS, pursuant to Section 9.01 of the Agreement, the Agreement may be amended by a written amendment thereto, executed by the Department and the Bank; and

WHEREAS, the Department has requested that the Bank extend the Letter of Credit Expiration Date and make certain other amendments to the Agreement, and the Bank has agreed to extend the Letter of Credit Expiration Date and make such other amendments to the Agreement subject to the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the premises, the parties hereto hereby agree as follows:

SECTION 1. AMENDMENTS.

Upon satisfaction of the conditions precedent set forth in Section 3 hereof, the Agreement shall be amended as follows:

1.01. The definition of the defined terms “Amortization End Date,” “Base Rate,” “Dealer,” Dealer Agreement” and “Letter of Credit Expiration Date” set forth in Article I of the Agreement are hereby amended in their entireties and as so amended shall be restated to read as follows:

“Amortization End Date” means, with respect to any Advance, the earliest to occur of: (i) the third (3rd) anniversary of the date on which the related Advance was made, (ii) the date on which a substitute Credit Facility becomes effective in

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substitution of the Letter of Credit with respect to the Commercial Paper Notes, (iii) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default and (iv) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

“Base Rate” means, for any day, the rate of interest per annum equal to the greatest of (i) the Prime Rate plus two percent (2.00%), (ii) the Federal Funds Rate plus three percent (3.00%), (iii) the SIFMA Rate in effect at such time plus three percent (3.00%) and (iv) seven percent (7.00%). Each determination of the Base Rate by the Bank shall be conclusive and binding on the Department absent manifest error.

“Dealer” means, as the context requires, Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, BofA Securities, Inc., Morgan Stanley & Co. LLC, Samuel A. Ramirez & Co., Inc. and Wells Fargo Bank, National Association or their respective successors and assigns.

“Dealer Agreement” means, as the context requires, (a) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Citigroup Global Markets Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (b) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and J.P. Morgan Securities LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (c) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Loop Capital Markets LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (d) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and BofA Securities, Inc., as successor to Merrill Lynch, Pierce, Fenner & Smith Incorporated, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (e) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Morgan Stanley & Co. LLC, as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (f) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Samuel A. Ramirez & Co., Inc., as dealer, and any and all modifications, alterations, amendments and supplements thereto; or (g) the Dealer Agreement, dated as of October 3, 2014, by and between the Department and Wells Fargo Bank, National Association, as dealer, and any and all modifications, alterations, amendments and supplements thereto.

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“Letter of Credit Expiration Date” means [September ___], 2022, the date set forth in the Letter of Credit as the date on which the Letter of Credit is stated to expire, as the same may be extended pursuant to Section 2.12 hereof.

1.02. Article I of the Agreement is hereby amended by the addition of the new defined terms “Affiliate,” “Change in Law,” “Designated Jurisdiction,” “First Amendment Effective Date,” “Laws,” “OFAC,” “Risk Based Capital Guidelines” and “Sanctions” to be inserted in their appropriate places in the alphabetical sequence and to read as follows:


“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, including, without limitation, Risk Based Capital Guidelines, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.


“First Amendment Effective Date” means [September ___], 2020.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits

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of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.


“Risk-Based Capital Guidelines” means (a) the risk-based capital guidelines in effect in the United States of America, including transition rules, and (b) the corresponding capital regulations promulgated by regulatory authorities outside the United States of America including transition rules, and any amendment to such regulations.

“Sanction(s)” means any international economic sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

1.03. Article I of the Agreement is hereby amended by the deletion of the defined terms “One Month USD LIBOR Rate” and “Prior Agreements” in their entireties.

1.04. Section 2.03(a)(iii) of the Agreement is hereby amended and restated in its entirety to read as follows:

(iii) The Department promises to pay or cause to be paid to the Bank the principal portion of each Advance on the earliest to occur of (A) the third (3rd) anniversary of the date on which the related Advance was made, (B) the date on which a substitute Credit Facility becomes effective in substitution of the Letter of Credit with respect to the Commercial Paper Notes, (C) the date on which the Stated Amount is permanently reduced to zero or the Letter of Credit is otherwise terminated in accordance with its terms (other than as a result of the Letter of Credit terminating on the Letter of Credit Expiration Date), including as a result of the occurrence of an Event of Default and (D) the end of the term of the Commercial Paper Program in respect of the Commercial Paper Notes as determined in accordance with the Master Subordinate Trust Indenture and the Seventh Supplemental Subordinate Trust Indenture or any resolution of the Board.

1.05. Section 2.14 of the Agreement is hereby amended and restated in its entirety to read as follows:

Section 2.14. Increased Costs. (a) If, after the Closing Date, the Bank or any Participant shall have determined that any Change in Law shall:


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(ii) impose, modify or deem applicable any reserve, liquidity ratio, special deposit, compulsory loan, insurance premium, fee, financial charge, monetary burden or similar requirement against funding any Drawing under the Letter of Credit or maintaining the Letter of Credit, or complying with any term of this Agreement, or against assets held by, or deposits with or for the account of, the Bank or such Participant, or the Bank’s or such Participant’s parent or holding company, if any; or


The Bank or Participant shall use its best efforts to provide to the Department written notice of the expected occurrence of any event referred to in clause (i), (ii) or (iii) above for which it has actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased costs or Reductions in Amount (the “Yield Protection Demand Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if, all obligations due and owing under this Agreement and the Fee Letter are paid in full prior to the date on which any increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed upon the Bank or Participant, then the Department will not be obligated to pay the additional amounts set forth in the Yield Protection Demand Notice; provided, however, that if all obligations due and owing under this Agreement and the Fee Letter are not paid prior to the date on which any increased cost or Reduction in Amount are imposed on the Bank or Participant, the Department shall become liable for the additional amount for such increased cost or Reduction in Amount set forth in the Yield Protection Demand Notice on the date on which such increased cost or Reduction in Amount related to any event referred to in clause (i), (ii) or (iii) above are imposed on the Bank or Participant. Such amounts will be payable as set forth in Section 2.14(c) hereof.

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Notwithstanding the foregoing, a failure by the Bank or any Participant to deliver to the Department a Yield Protection Demand Notice shall in no event relieve the obligation of the Department of any obligation under this Section 2.14(a). Additionally, nothing set forth in this Section 2.14(a) shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i), (ii) or (iii) above.


(i) affects or would affect the amount of capital or liquidity or reserves to be maintained by the Bank or such Participant, or the Bank’s such Participant’s parent or holding company, if any, or


the Bank or Participant shall use its best efforts to provide the Department written notice of the expected occurrence of any event referred to in clause (i) or (ii) above for which it has actual knowledge, setting forth in reasonable detail the anticipated additional amount or amounts that the Bank or Participant expects to demand from the Department as additional compensation for such increased cost related to any event referred to in clause (i) or (ii) above (the “Adequacy Demand Notice”) and the anticipated date upon which the Bank or Participant would make such demand upon the Department, and, if all obligations due and owing the Bank and any Participant are paid in full prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, then the Department will not be obligated to pay the additional amounts set forth in the Adequacy Demand Notice; provided however that if all obligations due and owing to the Bank and any Participant are not paid prior to the date on which any increased cost related to any event referred to in clause (i) or (ii) above are imposed upon the Bank or such Participant or the Bank’s or such Participant’s parent or holding company, as applicable, the Department shall become liable for the additional amount set forth in the Adequacy Demand Notice on the date on

- 7 - 4811-7545-9011.3

which such increased cost related to any event referred to in clause (i) or (ii) above are imposed on the Bank, such Participant or the Bank’s or such Participant’s parent or holding company, as applicable. Such amounts will be payable as set forth in Section 2.14(c) hereof.

Notwithstanding the foregoing, (i) a failure by the Bank or any Participant to deliver to the Department an Adequacy Demand Notice shall in no event relieve the obligation of the Department of any obligation under this Section 2.14(b). Additionally, nothing set forth in this Section 2.14(b) shall limit the obligation of the Department to pay to the Bank any increased cost imposed upon the Bank related to any event referred to in clause (i) or (ii) above.



In making the determinations contemplated by any Yield Protection Demand Notice or Adequacy Demand Notice or any other written notice from the Bank to the Department making a demand on the Department for the payment of increased costs or Reductions in Amount pursuant to this Section 2.14, the Bank or Participant may make and shall include in such notice such reasonable estimates, assumptions, allocations and the like that the Bank or Participant in good faith determines to be appropriate. For purposes of this Section 2.14, the term “Bank” or “Participant” as applicable, shall also include any entity controlling the Bank or

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Participant or the holding company thereof. For purposes of the immediately preceding sentence, “controlling” means the power to direct the management and policies of the Bank, directly or indirectly, whether through the ownership of voting rights, membership, the power to appoint members, trustees or directors, by contract or otherwise. The obligations of the Department under this Section 2.14 shall survive the termination of this Agreement, the Letter of Credit and repayment of all Obligations hereunder and under the Fee Letter.




1.07. Section 6.02(i) of the Agreement is hereby amended and restated in its entirety to read as follows:

(i) Additional Debt. Within ten (10) days after the date of issuance and delivery of any additional Debt payable from and/or secured by Subordinate Pledged Revenues, a copy of any certificate or materials required to be provided pursuant to Section 6.13 hereof.



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1.09. Article VI of the Agreement is hereby amended by adding thereto new Sections 6.27, 6.28 and 6.29 to appear in the appropriate numerical sequence and to read as follows:

Section 6.27. Sanctions. The Department will not directly or indirectly, use any of the proceeds of the Commercial Paper Notes, or lend, contribute or otherwise make available such proceeds to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person of Sanctions.

Section 6.28. Anti-Corruption Laws. The Department will not directly or indirectly, use any proceeds of the Commercial Paper Notes for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions.

Section. 6.29 No Preferential Treatment. In the event that the Department shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement which Bank Agreement includes the right, upon the occurrence of an “event of default” or “event of termination” under such Bank Agreement, to accelerate the payment of the principal of or interest on any Secured Debt or to otherwise cause the principal of and interest on any Secured Debt to become immediately due and payable, then the Bank shall have the right, upon the occurrence of an Event of Default, to declare all Obligations payable hereunder to be, and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Department; provided that upon the occurrence of an Event of Default under Section 7.01(i) hereof, such prepayment obligation or acceleration shall automatically become due and payable or automatically occur, as applicable, and without any notice.

1.10. Sections 7.01(a), (b) and (i) of the Agreement are hereby amended and restated in their entireties to read as follows:

(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing or any Advance, (ii) any Letter of Credit Fee within ten (10) calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (other than the Obligations described in clause (i) or (ii) of this Section 7.01(a)) within ten (10) calendar days of the date such Obligation is due; provided that, for the avoidance of doubt, no written notice from the Bank shall be required for any such failure to constitute an “Event of Default” hereunder;

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(b) any representation, warranty or statement made by or on behalf of the Department herein or in any Program Document to which the Department is a party or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to the Bank by or on behalf of the Department in connection with the transactions contemplated hereby (the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to the Bank it is discovered by the Department or the Bank that such Department Information contained an inaccuracy, such inaccuracy shall not be considered an Event of Default if (i) at the time the Department furnished such Department Information to the Bank, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five (5) calendar days of the Department receiving notice of such discovery of the inaccuracy it provides the Bank with corrected Department Information;



7.02 Remedies. Upon the occurrence of any Event of Default, all Obligations shall bear interest at the Default Rate and the Bank may exercise any one or more of the following rights and remedies in addition to any other remedies herein or by law provided:


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1.12. Article VIII of the Agreement is hereby amended by adding thereto new Section 8.07 to appear in the appropriate numerical sequence and to read as follows:


11.3. Article IX of the Agreement is hereby amended by adding thereto new Section 9.18 to appear in the appropriate numerical sequence and to read as follows:

Section 9.18. Electronic Execution of Certain Documents.This Agreement and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Agreement (each, a “Communication”), including Communications required to be in writing, may, if agreed by the Bank, be in the form of an Electronic Record and may be executed using Electronic Signatures, including, without limitation, facsimile and/or .pdf. The Department agrees that any Electronic Signature (including, without limitation, facsimile or .pdf) on or associated with any Communication shall be valid and binding on the Department to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will constitute the legal, valid and binding obligation of the Department enforceable against the Department in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered to the Bank. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Bank of a manually signed paper Communication which has been converted

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into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Bank may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of the Bank’s business, and destroy the original paper document. All Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record. Notwithstanding anything contained herein to the contrary, the Bank is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Bank pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Bank has agreed to accept such Electronic Signature, the Bank shall be entitled to rely on any such Electronic Signature without further verification and (b) upon the request of the Bank any Electronic Signature shall be promptly followed by a manually executed, original counterpart. For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.

SECTION 2. REQUEST FOR EXTENSION OF STATED EXPIRATION DATE.

The Department hereby requests that the Bank extend the Stated Expiration Date to [September ___], 2022, and the Bank agrees to such request and will deliver to the Trustee an Extension Amendment to the Letter of Credit substantially in the form attached hereto as Exhibit A to effectuate such extension.

SECTION 3. CONDITIONS PRECEDENT.

This Amendment shall become effective on the First Amendment Effective Date subject to the satisfaction of or waiver by the Bank of all of the following conditions precedent (such satisfaction to be evidenced by the Bank’s execution and delivery of this Amendment):

3.01. Delivery by the Department to the Bank of an executed counterpart of (i) this Amendment and (ii) the Amended and Restated Fee Letter by and between the Department and the Bank dated as of the date hereof (the “Amended and Restated Fee Letter”).

3.02. Receipt by the Bank of a certified copy of the authorizing resolution of the Department approving the execution and delivery and performance of its obligations under the Agreement, as amended hereby, and the Amended and Restated Fee Letter.

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3.03. Receipt by the Bank of (i) a closing certificate of the Department and (ii) a certificate of the Department, certifying the names and true signatures of the officers of the Department authorized to sign this Amendment and the Amended and Restated Fee Letter.

3.04 Delivery to the Bank of an opinion of counsel to the Department, addressed to the Bank and in form and substance satisfactory to the Bank and its counsel.

3.05. The Bank shall have received written confirmation that (i) the Commercial Paper Notes have been rated at least “[__]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and “[___]” (or its equivalent) by Fitch, (ii) the unenhanced Senior Lien Revenue Bonds have been rated “[___]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch, and (iii) the unenhanced Subordinate Obligations (other than the Commercial Paper Notes and the Bank Note) have been rated “[__]” (or its equivalent) by Moody’s and “[__]” (or its equivalent) by S&P and Fitch (collectively referred to herein as the “Rating Documentation”).

3.06 Payment directly to Chapman and Cutler LLP, legal counsel to the Bank within thirty (30) days of receipt of an invoice therefrom, of its reasonable legal fees and expenses in an amount not to exceed $10,000.

3.07. All other legal matters pertaining to the execution and delivery of this Amendment shall be satisfactory to the Bank and its counsel.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE DEPARTMENT.

4.01. The Department hereby represents and warrants that the following statements shall be true and correct as of the date hereof:

(a) the representations and warranties of the Department contained in Article V of the Agreement and in each of the Program Documents are true and correct on and as of the date hereof as though made on and as of such date (except to the extent the same expressly relate to an earlier date and except that the representations contained in Section 5.12 of the Agreement shall be deemed to refer to the most recent financial statements of the Borrower delivered to the Bank pursuant to Section 6.02(a) of the Agreement); and

(b) no Default or Event of Default has occurred and is continuing or would result from the execution of this Amendment.

4.02. In addition to the representations given in Article V of the Agreement, the Department hereby represents and warrants as follows:

(a) The execution, delivery and performance by the Department of the Amended and Restated Fee Letter, this Amendment and the performance by the Department of the Agreement, as amended hereby, are within its powers, have been duly authorized by all necessary action and do not contravene any law, rule or regulation, any

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judgment, order or decree or any contractual restriction binding on or affecting the Department.

(b) No further authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by the Department of the Amended and Restated Fee Letter, this Amendment or the performance by the Department of the Agreement, as amended hereby.

(c) The Amended and Restated Fee Letter, this Amendment and the Agreement, as amended hereby, constitute legal, valid and binding obligations of the Department enforceable against the Department in accordance with their respective terms, except that (i) the enforcement thereof may be limited by bankruptcy, reorganization, insolvency, liquidation, moratorium and other laws relating to or affecting the enforcement of creditors’ rights and remedies generally, as the same may be applied in the event of the bankruptcy, reorganization, insolvency, liquidation or similar situation of the Department, and (ii) no representation or warranty is expressed as to the availability of equitable remedies.

SECTION 5. MISCELLANEOUS.

Except as specifically amended herein, the Agreement shall continue in full force and effect in accordance with its original terms. Reference to this specific Amendment need not be made in any note, document, agreement, letter, certificate, the Agreement or any communication issued or made subsequent to or with respect to the Agreement, it being hereby agreed that any reference to the Agreement shall be sufficient to refer to the Agreement, as hereby amended. In case any one or more of the provisions contained herein should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired hereby. THIS AMENDMENT SHALL BE DEEMED TO BE A

CONTRACT UNDER, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK; PROVIDED THAT, THE OBLIGATIONS OF

THE DEPARTMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF

THE STATE OF CALIFORNIA.

This Amendment may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. This Amendment may be delivered by the exchange of signed signature pages by facsimile transmission or by e-mail with a pdf copy or other replicating image attached, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.

[SIGNATURE PAGE TO FOLLOW]

[Signature Page to First Amendment to Reimbursement Agreement] 4811-7545-9011.3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective officers hereunto duly authorized as of the First Amendment Effective Date.


ANGELES, CALIFORNIA



Date: [September ___], 2020


[Signature Page to First Amendment to Reimbursement Agreement] 4811-7545-9011.3

SUMITOMO MITSUI BANKING CORPORATION, acting through its New York Branch

By: ____________________________________ Name: Juan Kreutz Title: Managing Director

4811-7545-9011.3

EXHIBIT A

[September ___], 2020

U.S. Bank National Association as Trustee 100 Wall Street Suite 1600 New York, NY 10005 Attention: Commercial Paper Administration

Re: Notice of Extension


We refer to the Irrevocable Transferable Direct-Pay Letter of Credit No. LG/MIS/NY-116006 (the “Letter of Credit”) of Sumitomo Mitsui Banking Corporation, acting through its New York Branch. Any capitalized term used herein and not defined herein shall have its respective meaning as set forth in the Letter of Credit.

The Letter of Credit Expiration Date is extended from September 11, 2020 to [September ___], 2022.

This Notice of Extension shall be attached to the Letter of Credit and made a part thereof.

Very truly yours,

SUMITOMO MITSUI BANKING CORPORATION, acting through its New York Branch, as Bank

By ____________________________________ Name ________________________________ Title _________________________________

cc: Department of Airports of the City of Los Angeles, California One World Way Los Angeles, CA 90045 Attention: Chief Financial Officer

Amended and Restated Fee Letter (Sumitomo Mitsui)

DRAFT

4150439 4833-1691-3603.4

AMENDED AND RESTATED FEE LETTER

DATED [SEPTEMBER ___], 2020

Reference is hereby made to that (i) certain Reimbursement Agreement dated as of September 1, 2017 (as amended, supplemented, modified or restated from time to time, the “Agreement”), as amended by that certain First Amendment to Reimbursement Agreement dated as of the date hereof (the “First Amendment”), each by and between the DEPARTMENT OF

AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA (the “Department”) and SUMITOMO MITSUI

BANKING CORPORATION, acting through its New York Branch (the “Bank”), relating to the Department’s Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes Subseries A-1 (Governmental - Non-AMT), Subseries B-1 (Private Activity – AMT), Subseries C-1 (Federally Taxable) and Subseries D-1 (Private Activity – Non-AMT) (collectively, the “Commercial Paper Notes”), (ii) certain Irrevocable Transferable Direct-Pay Letter of Credit dated September 13, 2017, issued by the Bank pursuant to the Agreement, supporting the Commercial Paper Notes (as amended, supplemented, modified or restated from time to time, the “Letter of Credit”) and (iii) certain Fee Letter dated September 13, 2017 (the “Existing Fee Letter”), between the Department and the Bank. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Agreement or the Letter of Credit, as applicable.

The Bank and the Department have agreed to make certain modifications to the Existing Fee Letter and, for the sake of clarity and convenience, the Department and the Bank wish to amend and restate the Existing Fee Letter in its entirety. The purpose of this Amended and Restated Fee Letter (this “Amended and Restated Fee Letter”) is to confirm the agreement between the Bank and the Department with respect to the Letter of Credit Fees (as defined below) and certain other fees and expenses payable by the Department to the Bank pursuant to the Agreement. This Amended and Restated Fee Letter is the Fee Letter referenced in the Agreement, and the terms hereof are incorporated by reference into the Agreement. This Amended and Restated Fee Letter and the Agreement are to be construed as one agreement between the Authority and the Bank, and all obligations hereunder are to be construed as obligations thereunder. All references to amounts due and payable under the Agreement will be deemed to include all amounts, fees and expenses payable under this Amended and Restated Fee Letter.

ARTICLE I. FEES.

Section 1.1. Letter of Credit Fees. The Department agrees to pay or cause to be paid to the Bank, on October 1, 2020, for the period commencing on July 1, 2020, and ending on September 30, 2020, and in arrears on the first Business Day of each January, April, July and October occurring thereafter to the Letter of Credit Expiration Date, and on the Letter of Credit Expiration Date, a non-refundable facility fee (the “Letter of Credit Fee”) for each quarterly fee period, commencing on the first calendar day of such quarterly fee period and ending on the last calendar day of such quarterly fee period, in an amount equal to the product of the applicable rate per annum corresponding to the Level specified below in the pricing matrix associated with the Rating (as defined below) as specified below (the “Letter of Credit Fee Rate”) for each day during each related quarterly fee period multiplied by the Stated Amount of the Letter of Credit (without regard to any temporary reductions thereof that may be subject to reinstatement):

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(i) for the period commencing on July 1, 2020, to but not including [September ___], 2020, the Facility Fee Rate for such period shall be determined in accordance with the applicable Level and corresponding Rating set forth below:

LEVEL

MOODY’S


LETTER OF CREDIT

FEE RATE


Level 2: A1 A+ A+ 0.52%

Level 3: A2 A A 0.77%

Level 4: A3 A- A- 1.00%



Level 7: Baa3 or below BBB- or below BBB- or below 3.00%

(ii) for the period commencing on and including [September ___], 2020, the Facility Fee Rate for such period shall be determined in accordance with the applicable Level and corresponding Rating set forth below:

LEVEL

MOODY’S


LETTER OF CREDIT

FEE RATE

Level 1: Aa2 or above AA or above AA or above 0.82%

Level 2: Aa3 AA- AA- 0.92%

Level 3: A1 A+ A+ 1.07%

Level 4: A2 A A 1.25%

Level 5: A3 A- A- 1.50%


Level 7: Baa2 or below BBB or below BBB or below 2.50%

The term “Rating” as used above shall mean the long-term unenhanced debt rating assigned by any of Moody’s, S&P or Fitch to Senior Lien Revenue Bonds or any bonds or notes of the Department secured by a senior lien on the Net Pledged Revenues and (i) if the ratings on such obligations are assigned by all three Rating Agencies, and two of such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the two equivalent ratings appear; (ii) if such ratings are assigned by all three Rating Agencies and no two such ratings are equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the middle such rating appears; and (iii) if such ratings are assigned by only two Rating Agencies and such ratings are not equivalent, the Letter of Credit Fee Rate shall be based upon the Level in which the lower such rating appears (for the avoidance of doubt, Level 7 is the lowest Level, and Level 1 is the highest Level for purposes of the above pricing grid). In the event (a) any relevant rating is withdrawn, suspended or otherwise unavailable from any of Moody’s, S&P or Fitch for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency) or (b) upon the occurrence and during the continuance of any Event of Default (whether or not the Bank declares an Event of Default in connection therewith), or (c) if any such rating falls to or below

-3- 4833-1691-3603.4

“Baa2” (or its equivalent) by Moody’s or “BBB” (or its equivalent) by S&P or Fitch, in each such case, the Letter of Credit Fee Rate shall equal 3.00% per annum, immediately and automatically and without notice to the Department. Any change in the Letter of Credit Fee Rate resulting from a reduction, withdrawal, suspension or unavailability of a relevant rating shall be and become effective as of and on the date of the announcement of the reduction, withdrawal, suspension or unavailability of such rating. References to ratings above are references to rating categories as presently determined by the Rating Agencies and in the event of adoption of any new or changed rating system or the adoption of a “global” rating scale by any such Rating Agency, the ratings from the Rating Agency in question referred to above shall be deemed to refer to the rating category under the new rating system or, in the event of the adoption of a “global” rating scale by any Rating Agency, the recalibrated or realigned rating category under such “global” rating scale, which most closely approximates the applicable rating category as currently in effect. The Department acknowledges that as of the date hereof, the Letter of Credit Fee Rate is that specified above for Level 1 for the first pricing matrix in paragraph (ii) of this Section 1.1. In the event that the Letter of Credit Fees are not paid when due, interest shall accrue on the Letter of Credit Fees from the date payment is due until payment in full at the Default Rate, such interest to be payable on demand. Such Letter of Credit Fee shall be payable in immediately available funds and computed on the basis of a 360-day year and the actual number of days elapsed.


Section 1.3. Amendment, Transfer, Waiver Fees and Other Fees and Expenses. Upon each transfer of the Letter of Credit in accordance with its terms or the appointment of a successor Trustee under the Master Subordinate Trust Indenture, the Department agrees to pay the Bank a non-refundable transfer fee of $5,000, and to reimburse the Bank for its actual costs and expenses associated with such transfer or appointment (including, without limitation, the reasonable fees and expenses of counsel to the Bank), payable on the date of such transfer or appointment.

The Department agrees to pay to the Bank on the date of each amendment, modification, or supplement of the Agreement, this Amended and Restated Fee Letter, the Bank Note or the Letter of Credit or any amendment, modification, or supplement to any Program Document which requires the waiver or consent of the Bank, a non-refundable amendment, modification, supplement, waiver or consent fee, as applicable, of $5,000, plus the reasonable fees of any legal counsel retained by the Bank in connection therewith.

Section 1.4. Termination Fee; Reduction Fee. (a) Notwithstanding the foregoing or any other provision of the Agreement or this Amended and Restated Fee Letter to the contrary, the Department agrees not to terminate, permanently reduce or replace the Agreement or the Letter of Credit prior to the Letter of Credit Expiration Date, except upon (i) the payment by the Department to the Bank of the Termination Fee or a Reduction Fee, as described below, (ii) the payment by the Department to the Bank of all Obligations payable under the Agreement and this Amended and Restated Fee Letter and (iii) the Department providing the Bank with thirty (30) days prior written notice of its intent to terminate the Agreement and the Letter of Credit; provided, that any such termination of the Agreement or the Letter of Credit shall be in compliance with the terms and

-4- 4833-1691-3603.4

conditions of the Master Subordinate Trust Indenture, the Seventh Supplemental Subordinate Trust Indenture and the Agreement; provided, further, that (A) no Termination Fee shall become payable if the Letter of Credit is terminated or replaced as a result of (1) a reduction of the Bank’s senior unsecured short-term ratings below “P-1” by Moody’s, “A-1” by S&P or “F1” by Fitch, (2) the Bank imposing increased costs on the Department in accordance with Section 2.14 of the Agreement, (3) a finding by the Department, pursuant to the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, as applicable, on the basis of its own investigation or that of the Board of Public Works, Office of Contract Compliance, following a full and fair hearing after notice and an opportunity to be heard has been given to the Bank, that the Bank has failed to comply (subject to any applicable cure period) with the Equal Employment Practices, the Affirmative Action Program or the Child Support Provisions, as applicable, each as in effect on the Closing Date, and such failure is determined to be a material breach of the Agreement, or (4) the Bank is identified in a debarment notice from the City Ethics Commission in connection with a violation of the Measure H Ordinance and the Department determines in writing and at a public meeting that it is in the best interests of the City to terminate the Agreement,and (B) no Termination Fee or Reduction Fee shall become payable with respect to a permanent reduction of the Stated Amount of the Letter of Credit, so long as no portion of the source of funds for such permanent reduction represents proceeds of commercial paper, variable rate demand bonds or other indebtedness supported by a letter of credit, liquidity facility or another form of liquidity support or credit enhancement or a direct purchase of securities by a bank or similar financial institution (referred to herein as “Permitted Reductions”).


(b) To the extent the Department terminates the Letter of Credit prior to [December ___, 2021], the Department hereby agrees to pay to the Bank a Termination Fee in connection with the termination or replacement of the Letter of Credit by the Department as set forth in Section 1.4(a) hereof in an amount equal to the product of (A) the Letter of Credit Fee Rate in effect pursuant to Section 1.1 hereof on the date of termination, (B) the Stated Amount (without regard to any reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) in effect on the date of the termination, and (C) a fraction, the numerator of which is equal to the number of days from and including the date of such termination to and including [December ___, 2021], and the denominator of which is 360 (the “Termination Fee”), payable on the date the Letter of Credit is terminated or replaced.

(c) To the extent the Department permanently reduces the Stated Amount of the Letter of Credit (without regard to any temporary reductions thereof subject to reinstatement) pursuant to the Seventh Supplemental Subordinate Trust Indenture and the Agreement prior to [December ___, 2021], the Department hereby agrees to pay to the Bank a reduction fee in connection with each and every permanent reduction of the Letter of Credit by the Department as set forth in Section 1.4(a) hereof in an amount equal to the product of (A) the Letter of Credit Fee Rate in effect pursuant to Section 1.1 hereof on the date of such permanent reduction, (B) the difference between the Stated Amount (without regard to any reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) prior to such permanent reduction and the Stated Amount (without regard to any

-5- 4833-1691-3603.4

reductions thereof, including without limitation, any Drawing under the Letter of Credit that may be reinstated pursuant to the terms of the Letter of Credit) after such permanent reduction, and (C) a fraction, the numerator of which is equal to the number of days from and including the date of such permanent reduction to and including [December ___, 2021], and the denominator of which is 360 (the “Reduction Fee”), payable on the date the Stated Amount of the Letter of Credit is permanently reduced.


Section 2.1. Expenses. The Department shall pay the reasonable legal fees and expenses of the Bank incurred in connection with the preparation and negotiation of the Agreement, the First Amendment, the Letter of Credit, this Amended and Restated Fee Letter and certain other Related Documents in an amount not to exceed $10,000 for domestic counsel in the aggregate and $5,000 for foreign counsel (in each case plus disbursements). Legal fees shall be paid directly to the Bank’s domestic counsel, Chapman and Cutler LLP, in accordance with the instructions provided by Chapman and Cutler LLP, and to the Bank with respect to the Bank’s foreign counsel, Yumoto, Ota & Miyazaki, in accordance with the instructions provided by the Bank.

Section 2.2. Amendments. No amendment to this Amended and Restated Fee Letter shall become effective without the prior written consent of the Department and the Bank.

Section 2.3. Governing Law. This Amended and Restated Fee Letter shall be governed by and construed in accordance with the internal laws of the State of New York; provided that, the Department’s obligations under this Amended and Restated Fee Letter shall be governed by and construed in accordance with the internal laws of the State of California.

Section 2.4. Counterparts. This Amended and Restated Fee Letter may be executed in two or more counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument; and any of the parties hereto may execute this Amended and Restated Fee Letter by signing such counterpart. This Amended and Restated Fee Letter may be delivered by the exchange of signed signature pages by facsimile transmission or by attaching a pdf copy to an email, and any printed or copied version of any signature page so delivered shall have the same force and effect as an originally signed version of such signature page.

Section 2.5. Severability. Any provision of this Amended and Restated Fee Letter which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

Section 2.6. No Disclosure. Unless required by law, the Department shall not deliver or permit, authorize or consent to the delivery of this Amended and Restated Fee Letter to any Dealer or any other Person or delivery to the Municipal Securities Rulemaking Board unless the Bank provides its prior written consent.

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Section 2.7. Existing Fee Letter. This Amended and Restated Fee Letter amends and restates in its entirety the Existing Fee Letter but is not intended to operate as a novation or an accord and satisfaction of the Existing Fee Letter or the indebtedness, obligations and liabilities of the Department evidenced or provided for thereunder. The parties hereto agree that this Amended and Restated Fee Letter does not extinguish or discharge the obligations of the Department or the Bank under the Existing Fee Letter. Reference to this specific Amended and Restated Fee Letter need not be made in any agreement, document, instrument, letter, certificate, the Existing Fee Letter itself, or any communication issued or made pursuant to or with respect to the Existing Fee Letter, any reference to the Existing Fee Letter being sufficient to refer to the Existing Fee Letter as amended and restated hereby, and more specifically, any and all references to the Amended and Restated Fee Letter in the Agreement shall mean this Amended and Restated Fee Letter.


[Signature Page to SMBC - LAX Subordinate Revenue CP Notes A&R Fee Letter] 4833-1691-3603.4

IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Fee Letter to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.


ANGELES, CALIFORNIA



Date: [September ___], 2020


[Signature Page to SMBC - LAX Subordinate Revenue CP Notes A&R Fee Letter] 4833-1691-3603.4

SUMITOMO MITSUI BANKING CORPORATION, acting through its New York Branch

By: ____________________________________ Name: Juan Kreutz Title: Managing Director

ATTACHMENT C

Offering Memorandum

DRAFT

4839-9780-8067.1

COMMERCIAL PAPER OFFERING MEMORANDUM

BOOK-ENTRY ONLY Ratings: See Inside Front Cover and “RATINGS” herein.

In the opinion of Kutak Rock LLP, Bond Counsel to the Department, based on existing laws, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations of the Department and continuing compliance by the Department with certain covenants, interest on the Series A Notes and the Series B Notes, when issued in accordance with the Subordinate Indenture and the Tax Compliance Certificate, will be excluded from gross income for federal income tax purposes, except interest on any Series B Note for any period during which such Series B Note is held by a “substantial user” of the facilities financed or refinanced by the Series B Notes or by a “related person” within the meaning of Section 147(a) of the Internal Revenue Code of 1986, as amended. Bond Counsel is further of the opinion that (a) interest on the Series A Notes, when issued in accordance with the Subordinate Indenture and the Tax Compliance Certificate, will not be an item of tax preference for purposes of the federal alternative minimum tax, and (b) interest on the Series B Notes, when issued in accordance with the Subordinate Indenture and the Tax Compliance Certificate, will constitute an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. Interest on the Series C Notes is not excluded from gross income for federal income tax purposes. Bond Counsel is further of the opinion that interest on the Commercial Paper Notes, when issued in accordance with the Subordinate Indenture, will be exempt from State of California personal income taxes. See “TAX MATTERS” herein.]


LOS ANGELES INTERNATIONAL AIRPORT Subordinate Revenue Commercial Paper Notes

Subseries A-1, Subseries A-2 and Subseries A-3 (Governmental – Non-AMT) Subseries B-1, Subseries B-2 and Subseries B-3 (Private Activity – AMT)

Subseries C-1, Subseries C-2 and Subseries C-3 (Federally Taxable)

The Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries A-1, Subseries A-2 and Subseries A-3 (Governmental – Non-AMT) (collectively, the “Series A Notes”), Subseries B-1, Subseries B-2 and Subseries B-3 (Private Activity - AMT) (collectively, the “Series B Notes”) and Subseries C-1, Subseries C-2 and Subseries C-3 (Federally Taxable) (collectively, the “Series C Notes” and, collectively with the Series A Notes and the Series B Notes, the “Commercial Paper Notes”) will be issued from time to time by the Department of Airports of the City of Los Angeles, California (the “Department”) in accordance with the terms and provisions of certain resolutions adopted by the Board of Airport Commissioners (the “Board”), the Master Subordinate Trust Indenture, dated as of December 1, 2002, as amended (the “Master Subordinate Indenture”), by and between the Department and U.S. Bank National Association, as trustee (the “Trustee”), and the Seventh Supplemental Subordinate Trust Indenture, dated as of March 1, 2012, as amended (the “Seventh Supplemental Subordinate Indenture,” and together with the Master Subordinate Indenture, the “Subordinate Indenture”), by and between the Department and the Trustee.

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF A SUBSERIES OF COMMERCIAL PAPER NOTES, PROSPECTIVE PURCHASERS OF SUCH SUBSERIES OF COMMERCIAL PAPER NOTES SHOULD RELY SOLELY ON THE CREDIT OF THE APPLICABLE BANK (AS DESCRIBED HEREIN) PROVIDING THE RELATED LETTER OF CREDIT SUPPORTING SUCH SUBSERIES OF COMMERCIAL PAPER NOTES AND NOT ON THE CREDIT OF THE DEPARTMENT OR LOS ANGELES INTERNATIONAL AIRPORT.

Credit support for the timely payment of each Subseries of Commercial Paper Notes will be provided by the applicable Bank pursuant to the related irrevocable transferable direct-pay letter of credit as identified in the table “SUMMARY OF THE BANKS, THE LETTERS OF CREDIT AND THE RATINGS” set forth on the inside front cover of this Offering Memorandum, in each case subject to the terms thereof. See “SECURITY AND SOURCES OF PAYMENT FOR THE COMMERCIAL PAPER NOTES—The Letters of Credit,” “THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS” and “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS.”

The Commercial Paper Notes will be issued only as fully registered notes in denominations of $100,000 and integral multiples of $1,000 above $100,000. When issued, the Commercial Paper Notes will be registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”). Purchases of beneficial interests in the Commercial Paper Notes will be made in book entry only form. Purchasers of beneficial interests in the Commercial Paper Notes will not receive physical delivery of certificates representing their interests in the Commercial Paper Notes. So long as the Commercial Paper Notes are held by DTC, the principal of and interest on the Commercial Paper Notes will be payable by wire transfer to DTC, which in turn will be required to remit such principal and interest to the DTC participants for subsequent disbursement to the beneficial owners of the Commercial Paper Notes. See “APPENDIX C—BOOK-ENTRY-ONLY SYSTEM.”

The Commercial Paper Notes are limited obligations of the Department, payable solely from and secured by (a) advances made under the applicable Letter of Credit, (b) proceeds from the sale of the Commercial Paper Notes, and (c) Subordinate Pledged Revenues and certain funds and accounts established pursuant to the Subordinate Indenture. The Commercial Paper Notes do not constitute or evidence an indebtedness of the City of Los Angeles (the “City”) or a lien or charge on any property or the general revenues of the City. Neither the faith and the credit nor the taxing power of the City, the State of California or any public agency, other than the Department, to the extent of the Subordinate Pledged Revenues, is pledged to the payment of the principal of or interest on the Commercial Paper Notes. The Department has no power of taxation. The Commercial Paper Notes shall constitute and evidence an obligation of the Department payable only in accordance with Section 609(b) of the Charter of the City and any other applicable provision thereof. None of the properties of the Airport System is subject to any mortgage or other lien for the benefit of the owners of the Commercial Paper Notes. The Department is under no obligation to pay the Commercial Paper Notes, except from the funds in the LAX Revenue Account of the Airport Revenue Fund and as further specifically provided in the Subordinate Indenture.

This cover page is not intended to be a summary of the terms of, or the security for, the Commercial Paper Notes. Investors are advised to read this Offering Memorandum in its entirety to obtain information essential to the making of an informed investment decision. Capitalized terms not defined on the cover of this Offering Memorandum will have the meanings ascribed to them in this Offering Memorandum. This Offering Memorandum is intended to apply to prospective purchasers of the Commercial Paper Notes on and after September [], 2020.

BofA Securities Citigroup J.P. Morgan

Loop Capital Markets Morgan Stanley Ramirez & Co., Inc.

Wells Fargo Securities

Date of Commercial Paper Offering Memorandum: September [], 2020.

LA.WA LOS ANGE U S WORLD AIRPORTS

4839-9780-8067.1

SUMMARY OF THE BANKS, THE LETTERS OF CREDIT AND THE RATINGS

Ratings*

Subseries Letter of Credit Provider Letter of Credit Expiration Date Moody’s S&P Fitch

Governmental-Non-AMT

Notes

A-11 Sumitomo Mitsui Banking Corporation, acting through its

New York Branch

September [__], 2022 [__] [__] [__]

A-22 Barclays Bank PLC September [__], 2023 [__] [__] [__]

A-33 Bank of America, N.A. September [__], 2021 [__] [__] [__]

Private Activity -

AMT Notes

B-11 Sumitomo Mitsui Banking Corporation, acting through its

New York Branch

September [__], 2022 [__] [__] [__]

B-22 Barclays Bank PLC September [__], 2023 [__] [__] [__]

B-33 Bank of America, N.A. September [__], 2021 [__] [__] [__]

Federally Taxable Notes

C-11 Sumitomo Mitsui Banking Corporation, acting through its

New York Branch

September [__], 2022 [__] [__] [__]

C-22 Barclays Bank PLC September [__], 2023 [__] [__] [__]

C-33 Bank of America, N.A. September [__], 2021 [__] [__] [__]

* Expected ratings; to be released upon delivery of the applicable Letter of Credit. Ratings are based on the applicable Letter of Credit to be issued by the related Bank. Such ratings will expire upon the expiration of the related Letter of Credit. See “RATINGS” herein for additional information.

1 The Series A-1 Notes, the Series B-1 Notes and the Series C-1 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $218,000,000 (the initial stated amount of the SMBC Letter of Credit (as defined herein)).

2 The Series A-2 Notes, the Series B-2 Notes and the Series C-2 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $228,900,000 (the initial stated amount of the Barclays Letter of Credit (as defined herein)).

3 The Series A-3 Notes, the Series B-3 Notes and the Series C-3 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $98,100,000 (the initial stated amount of the Bank of America Letter of Credit (as defined herein)).

4839-9780-8067.1

The information in this Offering Memorandum has been obtained from the Department, the Trustee, the Banks, DTC, and other sources believed to be reliable. The references herein to the Subordinate Indenture, the Commercial Paper Notes, the Letters of Credit and the Reimbursement Agreements do not purport to be complete or definitive, do not constitute summaries thereof and are qualified in their entirety by reference to the provisions thereof.

No dealer, salesperson, or other person has been authorized to give any information or to make any representation other than those contained herein and, if given or made, such other information or representation should not be relied upon as having been authorized by the Department or any other person.

The Dealers have provided the following sentence for inclusion in this Offering Memorandum. The Dealers have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances of the transaction, but the Dealers do not guarantee the accuracy or completeness of such information.

The information and expressions of opinion in this Offering Memorandum are subject to change without notice and neither the delivery of this Offering Memorandum nor any sale hereunder shall under any circumstances create the implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof.

This Offering Memorandum is not to be construed as a contract between the City or the Department and the purchasers of the Commercial Paper Notes. This Offering Memorandum does not constitute an offer to sell securities in any jurisdiction to any person to whom it is unlawful to make such offers. Prospective purchasers of the Commercial Paper Notes are expected to conduct their own review and analysis before making an investment decision.

The Commercial Paper Notes are exempt from the requirements of Rule 15c2-12 adopted by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. The Commercial Paper Notes have not been registered under the Securities Act of 1933, as amended, in reliance upon an exemption contained therein, and have not been registered or qualified under the securities laws of any state. The Subordinate Indenture has not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon an exemption contained therein. The Commercial Paper Notes have not been recommended by any federal or state securities commission or regulatory commission. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this Offering Memorandum.

References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such web sites and the information or links contained therein have not been incorporated into, and are not part of, this Offering Memorandum and should not be relied upon in deciding whether to invest in the Commercial Paper Notes.

No Bank has any responsibility for the form and content of this Offering Memorandum, other than solely with respect to the information describing itself in “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS,” and has not independently verified, did not participate in the preparation of, makes no representation or warranty regarding, and does not accept any responsibility for the accuracy or completeness of this Offering Memorandum or any information or disclosure contained herein or omitted herefrom, other than solely with respect to the information describing itself in “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS.”

TABLE OF CONTENTS

Page

ii4839-9780-8067.1

INTRODUCTION ....................................................................................................................................... 1 THE COMMERCIAL PAPER NOTES ...................................................................................................... 1

Authorization and Purpose .............................................................................................................. 1 Description of the Commercial Paper Notes................................................................................... 2

SECURITY AND SOURCES OF PAYMENT FOR THE COMMERCIAL PAPER NOTES .................. 3 Security for the Commercial Paper Notes....................................................................................... 3 Letters of Credit .............................................................................................................................. 3 Subordinate Pledged Revenues ....................................................................................................... 4 Rate Covenant ................................................................................................................................. 6

THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS ..................................... 6 SMBC Letter of Credit and Reimbursement Agreement ................................................................ 7 Barclays Letter of Credit and Reimbursement Agreement ........................................................... 12 Bank of America Letter of Credit and Reimbursement Agreement ............................................. 17

THE DEPARTMENT OF AIRPORTS ...................................................................................................... 22 General Description ...................................................................................................................... 22

LOS ANGELES INTERNATIONAL AIRPORT ..................................................................................... 22 Introduction ................................................................................................................................... 22 Facilities ........................................................................................................................................ 22 Passenger Traffic and Market Share ............................................................................................. 23 Agreements with Airlines ............................................................................................................. 24 Indebtedness .................................................................................................................................. 25 Capital Program ............................................................................................................................ 25 Miscellaneous ............................................................................................................................... 26

INVESTMENT CONSIDERATION ......................................................................................................... 26 TAX MATTERS ........................................................................................................................................ 26

Tax-Exempt Notes (Series A Notes and Series B Notes) ............................................................. 26 Federal Tax Matters of the Series C Notes ................................................................................... 28 State Tax Matters of the Series C Notes ....................................................................................... 30

ERISA CONSIDERATIONS .................................................................................................................... 30 THE DEALERS ......................................................................................................................................... 31 RATINGS .................................................................................................................................................. 32 LEGAL MATTERS ................................................................................................................................... 32 NO CONTINUING DISCLOSURE OBLIGATION ................................................................................ 32 ADDITIONAL INFORMATION .............................................................................................................. 32 AUTHORIZATION ................................................................................................................................... 33

APPENDIX A CERTAIN INFORMATION REGARDING THE BANKS APPENDIX B FORM OF BOND COUNSEL’S OPINION APPENDIX C BOOK-ENTRY-ONLY SYSTEM

---

4839-9780-8067.1

COMMERCIAL PAPER OFFERING MEMORANDUM

DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES, CALIFORNIA LOS ANGELES INTERNATIONAL AIRPORT Subordinate Revenue Commercial Paper Notes

Subseries A-1, Subseries A-2 and Subseries A-3 (Governmental – Non-AMT) Subseries B-1, Subseries B-2 and Subseries B-3 (Private Activity – AMT)

Subseries C-1, Subseries C-2 and Subseries C-3 (Federally Taxable)

INTRODUCTION

This Commercial Paper Offering Memorandum (this “Offering Memorandum”), which includes the cover page and appendices, provides general information in connection with the issuance and sale, from time to time, by the Department of Airports of the City of Los Angeles, California (the “Department”) of its (a) Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries A-1 (Governmental – Non-AMT) (the “Subseries A-1 Notes”), Subseries A-2 (Governmental – Non-AMT) (the “Subseries A-2 Notes”), and Subseries A-3 (Governmental – Non-AMT) (the “Subseries A-3 Notes,” and collectively with the Subseries A-1 Notes and the Subseries A-2 Notes, the “Series A Notes”); (b) Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries B-1 (Private Activity – AMT) (the “Subseries B-1 Notes”), Subseries B-2 (Private Activity – AMT) (the “Subseries B-2 Notes”), and Subseries B-3 (Private Activity – AMT) (the “Subseries B-3 Notes,” and collectively with the Subseries B-1 Notes and the Subseries B-2 Notes, the “Series B Notes”); and (c) Department of Airports of the City of Los Angeles, California, Los Angeles International Airport, Subordinate Revenue Commercial Paper Notes, Subseries C-1 (Federally Taxable) (the “Subseries C-1 Notes”), Subseries C-2 (Federally Taxable) (the “Subseries C-2 Notes”), and Subseries C-3 (Federally Taxable) (the “Subseries C-3 Notes”, and collectively with the Subseries C-1 Notes and the Subseries C-2 Notes, the “Series C Notes”). The Series A Notes, the Series B Notes and the Series C Notes shall be collectively referred to herein as the “Commercial Paper Notes.” All references to documents and other materials herein are qualified in their entirety by reference to the complete provisions of those documents and other materials. The information and expressions of opinion in this Offering Memorandum are subject to change without notice after September [__], 2020, and future use of this Offering Memorandum will not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since September [__], 2020.

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF A SUBSERIES OF COMMERCIAL PAPER NOTES, PROSPECTIVE PURCHASERS OF SUCH SUBSERIES OF COMMERCIAL PAPER NOTES SHOULD RELY SOLELY ON THE CREDIT OF THE APPLICABLE BANK (AS DESCRIBED HEREIN) PROVIDING THE RELATED LETTER OF CREDIT (AS DEFINED HEREIN) SUPPORTING SUCH SUBSERIES OF COMMERCIAL PAPER NOTES AND NOT ON THE CREDIT OF THE DEPARTMENT OR LOS ANGELES INTERNATIONAL AIRPORT.

THE COMMERCIAL PAPER NOTES

Authorization and Purpose

The Commercial Paper Notes are authorized to be issued under and pursuant to Section 609 of the Charter of the City of Los Angeles, relevant ordinances of the City of Los Angeles, California (the

2 4839-9780-8067.1

“City”) and Sections 11.28.1 et seq. of the Los Angeles Administrative Code (collectively, the “Charter”); Resolution No. 21434 adopted by the Board of Airport Commissioners of the City (the “Board”) on June 6, 2001 and approved by the City Council of the City (the “City Council”) on July 17, 2001, and Resolution No. 24710 adopted by the Board on February 13, 2012 (collectively, the “Resolutions”); and the Master Subordinate Trust Indenture, dated as of December 1, 2002, as amended (the “Master Subordinate Indenture”), by and between the Department and U.S. Bank National Association, as trustee (the “Trustee”), and the Seventh Supplemental Subordinate Trust Indenture, dated as of March 1, 2012, as amended (the “Seventh Supplemental Subordinate Indenture,” and together with the Master Subordinate Indenture, the “Subordinate Indenture”), by and between the Department and Trustee. Capitalized terms used but not defined herein shall have the meanings set forth in the Subordinate Indenture and the Reimbursement Agreements (as defined herein).

Pursuant to the Resolutions and the Subordinate Indenture, the Department is authorized to issue and have outstanding, at any one time, Commercial Paper Notes in a maximum aggregate principal amount not exceeding $500,000,000 (subject to certain conditions set forth in the Resolutions and the Subordinate Indenture). The Subseries A-1 Notes, the Subseries B-1 Notes and the Subseries C-1 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $218,000,000 (the initial stated amount of the SMBC Letter of Credit (as defined herein)). The Subseries A-2 Notes, the Subseries B-2 Notes and the Subseries C-2 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $228,900,000 (the initial stated amount of the Barclays Letter of Credit (as defined herein)). The Subseries A-3 Notes, the Subseries B-3 Notes and the Subseries C-3 Notes may be outstanding, from time to time, in a combined amount of principal of and interest thereon not to exceed $98,100,000 (the initial stated amount of the Bank of America Letter of Credit (as defined herein)).

The Commercial Paper Notes may be issued, from time to time, pursuant to the Charter, the Resolutions and the Subordinate Indenture to, among other things: (a) finance and refinance capital projects at Los Angeles International Airport (“LAX”), (b) pay all or a portion of the principal of and interest on the Commercial Paper Notes when due, (c) reimburse the Banks for any authorized draws under the related Letter of Credit, and (d) finance costs of issuance of the Commercial Paper Notes.

Description of the Commercial Paper Notes

The Series A Notes and the Series B Notes will be issued in denominations of $100,000 or integral multiples of $1,000 in excess thereof, and will be payable on such dates as the applicable Dealer determines at the time of sale of such Commercial Paper Notes. The Series A Notes and the Series B Notes will mature not more than 270 days after their respective dates of issuance, but, except as provided in the Subordinate Indenture, in no event later than one Business Day prior to the expiration date of the applicable Letter of Credit. The Series A Notes and the Series B Notes will be sold at a price of not less than 100% of the principal amount thereof and may bear interest at rates not in excess of 12% per annum, payable at maturity, calculated on the basis of a 365/366 day year and actual days elapsed.

The Series C Notes will be issued in denominations of $100,000 or integral multiples of $1,000 in excess thereof. The Series C Notes may be issued and sold either as interest bearing notes or at a discount, as determined by the applicable Dealer and approved by a Designated Representative at the time such Series C Notes are issued. Interest, if any, payable on Series C Notes will accrue from their respective dates, payable upon maturity, at a rate to be determined upon the issuance thereof calculated on the basis of a 360 day year and actual number of days elapsed. The Series C may bear interest at rates not in excess of 12% per annum. The Series C Notes will mature not more than 270 days after their respective dates of issuance, but, except as provided in the Subordinate Indenture, in no event later than one Business Day prior to the expiration date of the applicable Letter of Credit.

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The Commercial Paper Notes will be issued as fully registered notes and registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. Beneficial ownership interests in the Commercial Paper Notes will be available in book-entry-form only, and purchasers of the Commercial Paper Notes will not receive certificates representing their interests in the Commercial Paper Notes. While held in book-entry-only form, all payments of principal of and interest on the Commercial Paper Notes will be made by wire transfer to DTC or its nominee as the sole registered owner of the Commercial Paper Notes. Payments to the beneficial owners are the responsibility of DTC and its participants. See “APPENDIX C—BOOK-ENTRY-ONLY SYSTEM.”

SECURITY AND SOURCES OF PAYMENT FOR THE COMMERCIAL PAPER NOTES

Security for the Commercial Paper Notes

Each Subseries of the Commercial Paper Notes are limited obligations of the Department, payable solely from and secured by (a) advances made under the applicable Letter of Credit, (b) proceeds from the sale of such Subseries of Commercial Paper Notes, and (c) Subordinate Pledged Revenues (as defined herein) and certain funds and accounts established pursuant to the Subordinate Indenture.

The Commercial Paper Notes do not constitute or evidence an indebtedness of the City or a lien or charge on any property or the general revenues of the City. Neither the faith and the credit nor the taxing power of the City, the State of California (the “State”) or any public agency, other than the Department, to the extent of the Subordinate Pledged Revenues, is pledged to the payment of the principal of or interest on the Commercial Paper Notes. The Department has no power of taxation. The Commercial Paper Notes will constitute and evidence an obligation of the Department payable only in accordance with Section 609(b) of the Charter and any other applicable provision thereof. None of the properties of the Airport System (as defined herein) is subject to any mortgage or other lien for the benefit of the owners of the Commercial Paper Notes. The Department is under no obligation to pay the Commercial Paper Notes, except from the funds in the LAX Revenue Account of the Airport Revenue Fund and as further specifically provided in the Subordinate Indenture.

IN MAKING AN INVESTMENT DECISION REGARDING A POSSIBLE PURCHASE OF A SUBSERIES OF COMMERCIAL PAPER NOTES, PROSPECTIVE PURCHASERS OF SUCH SUBSERIES OF COMMERCIAL PAPER NOTES SHOULD RELY SOLELY ON THE CREDIT OF THE APPLICABLE BANK PROVIDING THE RELATED LETTER OF CREDIT SUPPORTING SUCH SUBSERIES OF COMMERCIAL PAPER NOTES AND NOT ON THE CREDIT OF THE DEPARTMENT OR LAX.

Letters of Credit

On September 13, 2017, Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”) issued an irrevocable transferable direct-pay letter of credit (the “SMBC Letter of Credit”) to provide credit support for the timely payment of the principal of and interest on the Subseries A-1 Notes, the Subseries B-1 Notes and the Subseries C-1 Notes (collectively, the “SMBC Covered Notes”). The SMBC Letter of Credit was issued in an initial stated amount of $218,000,000 (to support principal of $200,000,000 and interest on the SMBC Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year), On September [__], 2020, the expiration date of the SMBC Letter of Credit will be extended to September [__], 2022, unless extended or terminated sooner in accordance with its terms. See “THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS—SMBC Letter of Credit and Reimbursement Agreement” and “APPENDIX A—

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CERTAIN INFORMATION REGARDING THE BANKS—SUMITOMO MITSUI BANKING CORPORATION.”

On September [__], 2020, Barclays Bank PLC (“Barclays”) will issue an amended and restated irrevocable transferable direct-pay letter of credit (the “Barclays Letter of Credit”) to provide credit support for the timely payment of the principal of and interest on the Subseries A-2 Notes, the Subseries B-2 Notes and the Subseries C-2 (collectively, the “Barclays Covered Notes”). The Barclays Letter of Credit will be issued in an initial stated amount of $228,900,000 (to support principal of $210,000,000 and interest on the Barclays Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year), and will expire on September [__], 2023, unless extended or terminated sooner in accordance with its terms. See “THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS—Barclays Letter of Credit and Reimbursement Agreement” and “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS—BARCLAYS BANK PLC.”

On September [__], 2020, Bank of America, N.A. (“Bank of America,” and collectively with SMBC and Barclays, the “Banks”) will issue an irrevocable transferable direct-pay letter of credit (the “Bank of America Letter of Credit,” and collectively with the SMBC Letter of Credit and the Barclays Letter of Credit, the “Letters of Credit”) to provide credit support for the timely payment of the principal of and interest on the Subseries A-3 Notes, the Subseries B-3 Notes and the Subseries C-3 Notes (collectively, the “Bank of America Covered Notes”). The Bank of America Letter of Credit will be issued in an initial stated amount of $98,100,000 (to support principal of $90,000,000 and interest on the Bank of America Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year), and will expire on September [__], 2021, unless extended or terminated sooner in accordance with its terms. See “THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS—Bank of America Letter of Credit and Reimbursement Agreement” and “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS—BANK OF AMERICA, N.A.”

Upon satisfaction of certain conditions, the Department may obtain one or more substitute letters of credit to replace one or more of the Letters of Credit then in effect so long as said substitute letter(s) of credit go into effect at least one Business Day prior to the termination of the Letter(s) of Credit then in effect, and the respective expiration date(s) with respect to such substitute letter(s) of credit are no earlier than one year after its effective date. The Department will deliver written notice of the proposed substitution to the Trustee, the Bank that is being replaced, the Holders of the Commercial Paper Notes supported by the Letter of Credit that is being replaced and the Dealers not less than fifteen days prior to the substitution date. All Outstanding Commercial Paper Notes supported by the Letter of Credit that is being replaced will mature on or prior to the date such substitute letter of credit is delivered to the Trustee and becomes effective pursuant to its terms.

Subordinate Pledged Revenues

The Commercial Paper Notes are secured by a pledge of and first lien on Subordinate Pledged Revenues, which includes Pledged Revenues (as defined herein) less LAX Maintenance and Operation Expenses (as defined herein), less all amounts necessary to pay debt service and reserve requirements on the Senior Obligations (as defined herein). The Commercial Paper Notes are secured by a pledge of and lien on Subordinate Pledged Revenues on a parity with the payment obligations of the Department under the Reimbursement Agreements, the Existing Subordinate Bonds, and any additional bonds or other obligations issued on a parity with respect to Subordinate Pledged Revenues pursuant to the Master Subordinate Indenture. For purposes of this Offering Memorandum, the Commercial Paper Notes, the payment obligations of the Department under the Reimbursement Agreements, the Existing Subordinate Bonds, and any other bonds or obligations issued or incurred on parity with respect to Subordinate Pledged Revenues pursuant to the Subordinate Indenture are herein referred to as “Subordinate

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Obligations.” See “LOS ANGELES INTERNATIONAL AIRPORT—Indebtedness—Subordinate Obligations.”

“Subordinate Pledged Revenues” include for any given period, the Pledged Revenues for such period less, for such period, the LAX Maintenance and Operation Expenses, less, for such period, the debt service and reserve requirements on the Senior Obligations.

“Pledged Revenues” include, except to the extent specifically excluded in the Master Senior Indenture or under the terms of any indenture supplemental to the Master Senior Indenture, LAX Revenues. Pledged Revenues also include any additional revenues designated as Pledged Revenues pursuant to any indenture supplemental to the Master Senior Indenture. To date the Department has not designated any additional revenues as Pledged Revenues. The following, including any investment earnings thereon, are specifically excluded from Pledged Revenues: (i) any amounts received by the Department from the imposition of ad valorem taxes, (ii) gifts, grants and other income (including any investment earnings thereon) otherwise included in the definition of LAX Revenues which are restricted by their terms to purposes inconsistent with the payment of debt service on the Senior Obligations and the Subordinate Obligations, (iii) insurance proceeds received as a result of damage or destruction of LAX facilities or any condemnation award or amounts received by the Department from the sale of LAX facilities under the threat of condemnation, to the extent the use of such proceeds is restricted by the terms of the policy under which they are paid to a use inconsistent with the payment of Senior Obligations and Subordinate Obligations, (iv) any Transfer (as defined in the Master Senior Indenture) and (v) LAX Special Facilities Revenue (as defined in the Master Senior Indenture). In addition, the following, including any investment earnings thereon, are specifically excluded from Pledged Revenues, unless designated as Pledged Revenues under the terms of a supplemental indenture: (a) any swap termination payments received by the Department, (b) facilities construction credits, (c) Passenger Facility Charges unless otherwise so pledged under the terms of any supplemental indenture (provided that only Passenger Facility Charges in respect of LAX may be so pledged), (d) Customer Facility Charges unless otherwise so pledged under the terms of any supplemental indenture (provided that only Customer Facility Charges in respect of LAX may be so pledged), (e) unless otherwise so pledged, all revenues of the Airport System not related to LAX, and (f) Released LAX Revenues (as defined in the Master Senior Indenture). No swap termination payments, facilities construction credits, Passenger Facility Charges, Customer Facility Charges, revenues of the Airport System not related to LAX or Released LAX Revenues have been designated as Pledged Revenues by the Department.

“LAX Revenues” include, except to the extent specifically excluded therefrom, all income, receipts, earnings and revenues received by the Department from LAX, for any given period, as determined in accordance with generally accepted accounting principles, as modified from time to time, including, but not limited to, (1) rates, tolls, fees, rentals, charges and other payments made to or owed to the Department for the use or availability of property or facilities at LAX, (2) amounts received or owed from the sale or provision of supplies, materials, goods and services provided by or made available by the Department at LAX, including facilities construction credits, and (3) rental or business interruption insurance proceeds, received by, held by, accrued to or entitled to be received by the Department or any successor thereto from the possession, management, charge, superintendence and control of LAX (or any LAX facilities or activities and undertakings related thereto) or from any other facilities wherever located with respect to which the Department receives payments which are attributable to LAX facilities or activities or undertakings related thereto, all of which is required to be deposited in the Airport Revenue Fund pursuant to the Charter and the LAX Revenue Account pursuant to the Master Senior Indenture. LAX Revenues include all income, receipts and earnings from the investment amounts held in the LAX Revenue Account, any construction fund allowed to be pledged by the terms of a supplemental indenture, the senior reserve fund, any debt service reserve fund and allocated earnings on the LAX Maintenance and Operation Reserve Fund.

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“Airport System” means all airports, airport sites, and all equipment, accommodations and facilities for aerial navigation, flight, instruction and commerce belonging to or pertaining to the City and under the jurisdiction and control of the Department, including LAX, the Ontario International Airport, the Van Nuys Airport and Palmdale Regional Airport and any successor entities thereto; and including or excluding, as the case may be, such property as the Department may either acquire or which is placed under its control, or divest or have removed from its control.

“Master Senior Indenture” means the Master Trust Indenture, dated as of April 1, 1995, as amended, by and between the Department and The Bank of New York Mellon Trust Company, N.A., as successor trustee.

“Senior Obligations” include all obligations of the Department with a senior lien on Net Pledged Revenues, including debt service and reserve requirements on the Existing Senior Bonds (as defined herein) and any additional senior obligations issued under the Master Senior Indenture. See “LOS ANGELES INTERNATIONAL AIRPORT—Indebtedness—Senior Obligations.”

“LAX Maintenance and Operation Expenses” are, for any given period, the total operation and maintenance expenses of LAX as determined in accordance with generally accepted accounting principles as in effect from time to time, excluding depreciation expense and any operation and maintenance expenses of LAX payable from moneys other than Pledged Revenues.

“Net Pledged Revenues” are, for any given period, the Pledged Revenues for such period less, for such period, the LAX Maintenance and Operation Expenses.

Rate Covenant

Under the Master Subordinate Indenture, the Department has covenanted that, while any of the Commercial Paper Notes remain Outstanding, it shall establish, fix, prescribe and collect rates, tolls, fees, rentals and charges in connection with LAX and for services rendered in connection therewith, so that Pledged Revenues in each Fiscal Year will be at least equal to the payment of debt service and reserve requirements on the Senior Obligations and the Subordinate Obligations and the payment of LAX Maintenance and Operation Expenses for such Fiscal Year. The Department has further covenanted that it will establish, fix, prescribe and collect rates, tolls, fees, rentals and charges in connection with LAX and for services rendered in connection therewith, so that during each Fiscal Year Subordinate Pledged Revenues, together with any Transfer, will be equal to at least 115% of the annual debt service on the Subordinate Obligations for that Fiscal Year.

THE LETTERS OF CREDIT AND THE REIMBURSEMENT AGREEMENTS

The following summary of the Letters of Credit and the Reimbursement Agreements does not purport to be comprehensive or definitive and is subject in all respects to all of the terms and provisions of the respective Letters of Credit and Reimbursement Agreements, to which reference is made hereby. Investors are urged to obtain and review a copy of the respective Letters of Credit and Reimbursement Agreements in order to understand all of their respective terms. Unless otherwise defined in the following summary, capitalized terms used in the following summary are defined in this Offering Memorandum or the Reimbursement Agreements and reference thereto is made for full understanding of their import. In the event of any conflict between a definition set forth under this summary and the corresponding definition set forth in the respective Letters of Credit and Reimbursement Agreements, the definition set forth in the respective Letters of Credit and Reimbursement Agreements shall control for purposes of this summary.

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SMBC Letter of Credit and Reimbursement Agreement

General. The Department and SMBC entered into a Reimbursement Agreement, dated as of September 1, 2017, as amended by a First Amendment to Reimbursement Agreement, to be dated as of September [__], 2020 (collectively, the “SMBC Reimbursement Agreement”), pursuant to which SMBC issued the SMBC Letter of Credit to provide credit support for the timely payment of the principal of and interest on the SMBC Covered Notes (the Subseries A-1 Notes, the Subseries B-1 Notes and the Subseries C-1 Notes). See “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS—SUMITOMO MITSUI BANKING CORPORATION.” The SMBC Letter of Credit is not pledged to and does not support the payment of the principal of or interest on the Subseries A-2 Notes, the Subseries A-3 Notes, the Subseries B-2 Notes, the Subseries B-3 Notes, the Subseries C-2 Notes or the Subseries C-3 Notes.

In order to ensure timely payment of the principal of and interest on the SMBC Covered Notes, at the Department’s request, SMBC issued the SMBC Letter of Credit to the Trustee as beneficiary pursuant to, and upon the terms and conditions stated in, the SMBC Reimbursement Agreement. On or before the date of maturity of any SMBC Covered Note, the Trustee will draw on the SMBC Letter of Credit an amount equal to the principal and interest due on the SMBC Covered Notes maturing on such date. Pursuant to the Seventh Supplemental Subordinate Indenture, all amounts received from any drawing on the SMBC Letter of Credit are required to be deposited in the related account of the Commercial Paper Debt Service Fund established thereunder and held in trust and set aside exclusively for the payment of the principal of and interest on the SMBC Covered Notes for which such drawing was made, and the Trustee is required to apply such amounts to the payment of the principal of and interest on such SMBC Covered Notes on the applicable maturity date.

Certain Provisions of SMBC Letter of Credit and Reimbursement Agreement.

Certain Provisions of SMBC Letter of Credit. On September 13, 2017, in accordance with the SMBC Reimbursement Agreement, SMBC issued the SMBC Letter of Credit in an initial stated amount of $218,000,000 (to support principal of $200,000,000 and interest on the SMBC Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year). The stated amount of the SMBC Letter of Credit may be reduced and reinstated from time to time pursuant to the provisions of the SMBC Letter of Credit. All payments made by SMBC under the SMBC Letter of Credit will be made with SMBC’s own funds in immediately available funds.

The SMBC Letter of Credit will expire at 5:00 p.m., New York City time, on the date which is the earliest to occur of (the “SMBC Letter of Credit Termination Date”): (a) September [__], 2022, as such date may be extended by SMBC upon delivery of a notice of extension of the SMBC Letter of Credit to the Trustee and the Department, (b) the date of payment of a Drawing (as defined in the SMBC Letter of Credit), not subject to reinstatement, which when added to all other Drawings honored under the SMBC Letter of Credit which were not subject to reinstatement as provided therein, in the aggregate equals the Stated Amount (as defined in the SMBC Letter of Credit) of the SMBC Letter of Credit on the date of issuance thereof, as adjusted pursuant to the terms and conditions of the SMBC Letter of Credit, (c) the date on which SMBC receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that the Trustee has accepted an alternate Credit Facility (as defined in the SMBC Letter of Credit) in compliance with the Subordinate Indenture and the SMBC Reimbursement Agreement (after SMBC honors any properly presented and conforming Drawing, if any, on such date), (d) the date on which SMBC receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that all of the SMBC Covered Notes have been wholly defeased or no SMBC Covered Notes remain outstanding under the Subordinate Indenture and the Department has notified the Trustee that it does not intend to issue any additional SMBC Covered Notes and that it desires to

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terminate the SMBC Letter of Credit in accordance with the terms of the SMBC Reimbursement Agreement, (e) the earlier of (i) the 15th calendar day (or if such date is not a Business Day (as defined in the SMBC Letter of Credit), the immediately succeeding Business Day) after the date on which the Trustee receives notice from SMBC that a SMBC Event of Default (as defined below) has occurred and is continuing under the SMBC Reimbursement Agreement (a “Tier One Final Drawing Notice”), and (ii) the date on which the Drawing resulting from the delivery of the Tier One Final Drawing Notice is honored under the SMBC Letter of Credit, or (f) the earlier of (i) the 60th day after the date on which the Trustee receives a Tier Two Termination Notice (as defined in the SMBC Letter of Credit) from SMBC that SMBC has determined that it is unable to comply with one or more certain City administrative provisions set forth in the SMBC Reimbursement Agreement (the “City Administrative Provisions”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a Tier Two Termination Notice that has not been rescinded and has not been superseded by a subsequent Tier Two Termination Notice relating to a New Tier Two Termination Date (as defined below) (after SMBC honors any properly presented and conforming Drawing, if any, on such date) and (ii) the date specified by SMBC in a New Tier Two Termination Notice which the Trustee has received from SMBC stating that SMBC has been subjected to monetary and/or civil penalties as a result of SMBC’s inability to comply with one or more of the City Administrative Provisions (a “New Tier Two Termination Notice”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a New Tier Two Termination Notice that has not been rescinded or superseded (after SMBC honors any properly presented and conforming Drawing, if any, on such date).

Events of Default and Remedies Under the SMBC Reimbursement Agreement.

Events of Default. If any of the following events occur, each such event will be a “SMBC Event of Default ” under the SMBC Reimbursement Agreement:

(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing (as defined in the SMBC Reimbursement Agreement) or any Advance (as defined in the SMBC Reimbursement Agreement), (ii) any Letter of Credit Fee (as defined in the SMBC Reimbursement Agreement) within ten calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (as defined in the SMBC Reimbursement Agreement) (other than the Obligations described in clause (i) or (ii) of this paragraph (a)) within ten calendar days of the date such Obligation is due; provided that, for the avoidance of doubt, no written notice from the Bank shall be required for any such failure to constitute a “SMBC Event of Default;”

(b) any representation, warranty or statement made by or on behalf of the Department in the SMBC Reimbursement Agreement or in any Program Document (as defined in the SMBC Reimbursement Agreement) to which the Department is a party or in any certificate delivered pursuant to the SMBC Reimbursement Agreement or thereto proves to be untrue in any material respect on the date as of which made or deemed made; or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to SMBC by or on behalf of the Department in connection with the transactions contemplated by the SMBC Reimbursement Agreement (the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to SMBC it is discovered by the Department or SMBC that such Department Information contained an inaccuracy, such inaccuracy shall not be considered an SMBC Event of Default if (i) at the time the Department furnished such Department Information to SMBC, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five calendar days of the Department receiving notice of such discovery of the inaccuracy it provides SMBC with corrected Department Information;

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(c) (i) the Department fails to perform or observe any term, covenant or agreement contained in any of the certain specified sections of the SMBC Reimbursement Agreement; or (ii) the Department fails to perform or observe any other term, covenant or agreement contained in the SMBC Reimbursement Agreement (other than those referred to in paragraphs (a) and (c)(i) above) and any such failure cannot be cured or, if curable, remains uncured for 60 days after the earlier of (A) written notice thereof to the Department or (B) an Authorized Representative having actual knowledge thereof;

(d) the Department (i) defaults in any payment of any Debt (as defined in the SMBC Reimbursement Agreement), (other than the Commercial Paper Notes, the Drawings or the Advances) secured by a charge, lien or encumbrance on the Net Pledged Revenues or the Subordinate Pledged Revenues with a lien on, pledge of, security interest in or priority of payment from Net Pledged Revenues or Subordinate Pledged Revenues that is senior to, or on a parity with, the Commercial Paper Notes, the Drawings or the Advances, including, without limitation, Senior Lien Revenue Bonds, Subordinate Obligations and Subordinated Obligations (“Secured Debt”), beyond the period of grace, if any, provided in the instrument or agreement under which such Secured Debt was created; or (ii) defaults in the observance or performance of any agreement or condition relating to any Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Secured Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Secured Debt to become due prior to its stated maturity (whether by acceleration, redemption, tender or otherwise);

(e) (i) a court or other Governmental Authority (as defined in the SMBC Reimbursement Agreement) with jurisdiction to rule on the validity of the SMBC Reimbursement Agreement, the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party finds, announces or rules that (A) any material provision of the SMBC Reimbursement Agreement or any other Program Document to which the Department is a party; or (B) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note (as defined in the SMBC Reimbursement Agreement) or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the SMBC Reimbursement Agreement or under the Fee Letter (as defined in the SMBC Reimbursement Agreement) or the rights and remedies of SMBC, is not a valid and binding agreement of the Department or; (ii) the Department contests the validity or enforceability of the SMBC Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the SMBC Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of SMBC or the pledge of, lien on or security interest in the Subordinate Pledged Revenues, or seeks an adjudication that the SMBC Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the SMBC Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of SMBC, is not valid and binding on the Department or the Department repudiates its obligations under the SMBC Reimbursement Agreement or any other Program Document; or (iii) the validity, effectiveness or enforceability of the pledge of, lien on or security interest in the Subordinate Pledged Revenues granted to the Commercial Paper Notes under the Master Subordinate Indenture and the Seventh Supplemental Subordinate Indenture and the Obligations under the SMBC Reimbursement Agreement and under the Fee Letter and the Bank Note at any time for any reason ceases to be valid, effective or binding as a result of a finding or

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ruling by a court or Governmental Authority with competent jurisdiction, or is declared, in a final non-appealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable;

(f) (A) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the SMBC Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of SMBC shall at any time for any reason cease to be in full force or effect, (B) any Program Document to which the Department is a party, except for any Dealer Agreement (as defined in the SMBC Reimbursement Agreement) which has been terminated due to a substitution of a Dealer, or any material provision of any of the foregoing documents shall at any time for any reason cease to be in full force or effect, or (C) the Department or any Person (as defined in the SMBC Reimbursement Agreement) acting by or on behalf of the Department denies or disaffirms the Department’s obligations under the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party;

(g) a final judgment or order for the payment of money in excess of $25,000,000 (in excess of the amount of proceeds of applicable insurance actually paid in satisfaction of such judgment) is rendered against the Department and such judgment or order is not satisfied, stayed, vacated, discharged or bonded pending appeal within a period of 90 days from the date on which it was first so rendered;

(h) (i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (including, without limitation, amounts due under any Bank Agreement (as defined in the SMBC Reimbursement Agreement)) secured by a lien, charge or encumbrance upon the Subordinate Pledged Revenues; (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the Department seeks to have an order for relief entered with respect to it or LAX or seeking to adjudicate it or LAX insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, termination, composition or other relief with respect to it or LAX or its debts or those of LAX (or the existence of the Department or LAX is dissolved or terminated by any other means); (iii) the Department seeks appointment of a receiver, trustee, custodian or other similar official for itself or LAX or for any substantial part of the Department’s property, or the Department makes a general assignment for the benefit of its creditors; (iv) there is commenced against the Department or LAX any case, proceeding or other action of a nature referred to in clause (ii) above and the same remains undismissed; (v) there is commenced against the Department or LAX any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which is not vacated, discharged, or stayed or bonded pending appeal, within 60 days from the entry thereof; (vi) a financial control board, or its equivalent, is imposed upon the Department by a Governmental Authority; (vii) the Department takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) or (vi) of this paragraph (h); or (viii) the Department or LAX generally is not, or is unable to, or admits in writing its inability to, pay its debts as they become due;

(i) any of Fitch, Moody’s or S&P have downgraded its rating of any Subordinate Obligation below “BBB-” (or its equivalent), “Baa3” (or its equivalent), or “BBB-” (or its equivalent), respectively, or suspended or withdrawn its rating of the same for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency);

(j) any provision of the Charter relating to the Department is repealed, reenacted, amended or otherwise modified (including, without limitation, by legislative or judicial action but excluding any

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such action pursuant to Charter amendments approved by the voters prior to the date of the SMBC Reimbursement Agreement) or any other legislation is enacted, repealed, reenacted, amended or otherwise modified, and in the event of a repeal, reenactment, amendment, modification or enactment, such repeal, reenactment, amendment, modification or enactment, in the sole judgment of SMBC, has a material adverse effect on any right, interest, security or remedy of SMBC under the SMBC Reimbursement Agreement or the other Program Documents; or the Department’s existence as a department of the City under the Charter terminates;

(k) (i) any “event of default” has occurred and is continuing under any Program Document beyond the expiration of any applicable grace period or (ii) any “event of default” under any Bank Agreement with respect to any Secured Debt has occurred and is continuing beyond the expiration of any applicable grace period; or

(l) any funds or accounts or investments on deposit in, or otherwise to the credit of, any of the funds or accounts established pursuant to the Master Senior Indenture, the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture or the other Program Documents, that have been pledged to or a lien granted thereon to secure the Commercial Paper Notes, the Bank Note or the Obligations, becomes subject to any writ, judgment, warrant or attachment, execution or similar process which is not vacated, discharged, or stayed or bonded pending appeal within fifteen days from the entry thereof.

Remedies. Upon the occurrence of any SMBC Event of Default, all Obligations will bear interest at the Default Rate (as defined in the SMBC Reimbursement Agreement) and SMBC may exercise any one or more of the following rights and remedies in addition to any other remedies set forth in the SMBC Reimbursement Agreement or by law provided:

(a) by notice of the occurrence of any SMBC Event of Default to the Trustee (which notice constitutes a “Tier One Stop Issuance Instruction” for purposes of the Seventh Supplemental Subordinate Indenture) prohibit, until such time, if any, as SMBC withdraws (in writing) such notice, the issuance of additional Commercial Paper Notes, reduce the stated amount of the SMBC Letter of Credit to the amount of the then Outstanding Commercial Paper Notes supported by the SMBC Letter of Credit and interest payable thereon at maturity of such Commercial Paper Notes and/or terminate and/or permanently reduce such stated amount as the then Outstanding Commercial Paper Notes are paid;

(c) issue a Tier One Final Drawing Notice (the effect of which will cause the Termination Date of the SMBC Letter of Credit to occur on the 15th day after the date of receipt thereof by the Trustee);

(d) pursue any rights and remedies it may have under the Program Documents, including, without limitation, pursuant to the certain specified terms of the SMBC Reimbursement Agreement; or

(e) pursue any other action available at law or in equity.

Any Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice given by SMBC will not affect the obligation of SMBC to honor drawings under the SMBC Letter of Credit, if properly presented and made in strict conformity with the terms of the SMBC Letter of Credit, with respect to SMBC Covered Notes outstanding at the time such Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice is effective.

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Barclays Letter of Credit and Reimbursement Agreement

General. The Department and Barclays will enter into an Amended and Restated Reimbursement Agreement, to be dated as of September 1, 2020 (the “Barclays Reimbursement Agreement”), pursuant to which Barclays will issue the Barclays Letter of Credit to provide credit support for the timely payment of the principal of and interest on the Barclays Covered Notes (the Subseries A-2 Notes, the Subseries B-2 Notes and the Subseries C-2 Notes). See “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS—BARCLAYS BANK PLC.” The Barclays Letter of Credit will not be pledged to and will not support the payment of the principal of or interest on the Subseries A-1 Notes, the Subseries A-3 Notes, the Subseries B-1 Notes, the Subseries B-3 Notes, the Subseries C-1 Notes or the Subseries C-3 Notes.

In order to ensure timely payment of the principal of and interest on the Barclays Covered Notes, at the Department’s request, Barclays will issue the Barclays Letter of Credit to the Trustee as beneficiary pursuant to, and upon the terms and conditions stated in, the Barclays Reimbursement Agreement. On or before the date of maturity of any Barclays Covered Note, the Trustee will draw on the Barclays Letter of Credit an amount equal to the principal and interest due on the Barclays Covered Notes maturing on such date. Pursuant to the Seventh Supplemental Subordinate Indenture, all amounts received from any drawing on the Barclays Letter of Credit are required to be deposited in the related account of the Commercial Paper Debt Service Fund established thereunder and held in trust and set aside exclusively for the payment of the principal of and interest on the Barclays Covered Notes for which such drawing was made, and the Trustee is required to apply such amounts to the payment of the principal of and interest on such Barclays Covered Notes on the applicable maturity date.

Certain Provisions of Barclays Letter of Credit and Reimbursement Agreement.

Certain Provisions of Barclays Letter of Credit. On September [__], 2020, in accordance with the Barclays Reimbursement Agreement, Barclays will issue the Barclays Letter of Credit in an initial stated amount of $228,900,000 (to support principal of $210,000,000 and interest on the Barclays Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year). The stated amount of the Barclays Letter of Credit may be reduced and reinstated from time to time pursuant to the provisions of the Barclays Letter of Credit. All payments made by Barclays under the Barclays Letter of Credit will be made with Barclays’s own funds in immediately available funds.

The Barclays Letter of Credit will expire at 5:00 p.m., New York City time, on the date which is the earliest to occur of (the “Barclays Letter of Credit Termination Date”): (a) September [__], 2023, as such date may be extended by Barclays upon delivery of a notice of extension of the Barclays Letter of Credit to the Trustee and the Department, (b) the date of payment of a Drawing (as defined in the Barclays Letter of Credit), not subject to reinstatement, which when added to all other Drawings honored under the Barclays Letter of Credit which were not subject to reinstatement as provided therein, in the aggregate equals the Stated Amount (as defined in the Barclays Letter of Credit) of the Barclays Letter of Credit on the date of issuance thereof, as adjusted pursuant to the terms and conditions of the Barclays Letter of Credit, (c) the date on which Barclays receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that the Trustee has accepted an alternate Credit Facility (as defined in the Barclays Letter of Credit) in compliance with the Subordinate Indenture and the Barclays Reimbursement Agreement (after Barclays honors any properly presented and conforming Drawing, if any, on such date), (d) the date on which Barclays receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that all of the Barclays Covered Notes have been wholly defeased or no Barclays Covered Notes remain outstanding under the Subordinate Indenture and the Department has notified the Trustee that it does not intend to issue any additional Barclays Covered Notes and that it desires to terminate the Barclays Letter of Credit in accordance with the terms of the Barclays

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Reimbursement Agreement, (e) the earlier of (i) the 15th calendar day (or if such date is not a Business Day (as defined in the Barclays Letter of Credit), the immediately succeeding Business Day) after the date on which the Trustee receives notice from Barclays that a Barclays Event of Default (as defined below) has occurred and is continuing under the Barclays Reimbursement Agreement (a “Tier One Final Drawing Notice”), and (ii) the date on which the Drawing resulting from the delivery of the Tier One Final Drawing Notice is honored under the Barclays Letter of Credit, or (f) the earlier of (i) the 60th day after the date on which the Trustee receives a Tier Two Termination Notice (as defined in the Barclays Letter of Credit) from Barclays that Barclays has determined that it is unable to comply with one or more certain City administrative provisions set forth in the Barclays Reimbursement Agreement (the “City Administrative Provisions”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a Tier Two Termination Notice that has not been rescinded and has not been superseded by a subsequent Tier Two Termination Notice relating to a New Tier Two Termination Date (as defined below) (after Barclays honors any properly presented and conforming Drawing, if any, on such date) and (ii) the date specified by Barclays in a New Tier Two Termination Notice which the Trustee has received from Barclays stating that Barclays has been subjected to monetary and/or civil penalties as a result of Barclays’s inability to comply with one or more of the City Administrative Provisions (a “New Tier Two Termination Notice”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a New Tier Two Termination Notice that has not been rescinded or superseded (after Barclays honors any properly presented and conforming Drawing, if any, on such date).

Events of Default and Remedies Under the Barclays Reimbursement Agreement.

Events of Default. If any of the following events occur, each such event will be a “Barclays Event of Default ” under the Barclays Reimbursement Agreement:

(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing (as defined in the Barclays Reimbursement Agreement) or any Advance (as defined in the Barclays Reimbursement Agreement), (ii) any Letter of Credit Fee (as defined in the Barclays Reimbursement Agreement) within ten calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (as defined in the Barclays Reimbursement Agreement) (other than the Obligations described in clause (i) or (ii) of this paragraph (a)) within ten calendar days of the date such Obligation is due;

(b) any representation, warranty or statement made by or on behalf of the Department in the Barclays Reimbursement Agreement or in any Program Document (as defined in the Barclays Reimbursement Agreement) to which the Department is a party or in any certificate delivered pursuant to the Barclays Reimbursement Agreement or thereto proves to be untrue in any material respect on the date as of which made or deemed made; or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to Barclays by or on behalf of the Department in connection with the transactions contemplated by the Barclays Reimbursement Agreement (the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to Barclays it is discovered by the Department or Barclays that such Department Information contained an inaccuracy, such inaccuracy shall not be considered an Barclays Event of Default if (i) at the time the Department furnished such Department Information to Barclays, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five calendar days of the Department receiving notice of such discovery of the inaccuracy it provides Barclays with corrected Department Information;

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(c) (i) the Department fails to perform or observe any term, covenant or agreement contained in any of the certain specified sections of the Barclays Reimbursement Agreement; or (ii) the Department fails to perform or observe any other term, covenant or agreement contained in the Barclays Reimbursement Agreement (other than those referred to in paragraphs (a) and (c)(i) above) and any such failure cannot be cured or, if curable, remains uncured for 60 days after the earlier of (A) written notice thereof to the Department or (B) an Authorized Representative having actual knowledge thereof;

(d) the Department (i) defaults in any payment of any Debt (as defined in the Barclays Reimbursement Agreement), (other than the Commercial Paper Notes, the Drawings or the Advances) secured by a charge, lien or encumbrance on the Net Pledged Revenues or the Subordinate Pledged Revenues with a lien on, pledge of, security interest in or priority of payment from Net Pledged Revenues or Subordinate Pledged Revenues that is senior to, or on a parity with, the Commercial Paper Notes, the Drawings or the Advances, including, without limitation, Senior Lien Revenue Bonds, Subordinate Obligations and Subordinated Obligations (“Secured Debt”), beyond the period of grace, if any, provided in the instrument or agreement under which such Secured Debt was created; or (ii) defaults in the observance or performance of any agreement or condition relating to any Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Secured Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Secured Debt to become due prior to its stated maturity (whether by acceleration, redemption, mandatory tender or otherwise);

(e) (i) a court or other Governmental Authority (as defined in the Barclays Reimbursement Agreement) with jurisdiction to rule on the validity of the Barclays Reimbursement Agreement, the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party finds, announces or rules that (A) any material provision of the Barclays Reimbursement Agreement or any other Program Document to which the Department is a party; or (B) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note (as defined in the Barclays Reimbursement Agreement) or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Barclays Reimbursement Agreement or under the Fee Letter (as defined in the Barclays Reimbursement Agreement) or the rights and remedies of Barclays, is not a valid and binding agreement of the Department or; (ii) the Department contests the validity or enforceability of the Barclays Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Barclays Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of Barclays or the pledge of, lien on or security interest in the Subordinate Pledged Revenues, or seeks an adjudication that the Barclays Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Barclays Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of Barclays, is not valid and binding on the Department or the Department repudiates its obligations under the Barclays Reimbursement Agreement or any other Program Document; or (iii) the validity, effectiveness or enforceability of the pledge of, lien on or security interest in the Subordinate Pledged Revenues granted to the Commercial Paper Notes under the Master Subordinate Indenture and the Seventh Supplemental Subordinate Indenture and the Obligations under the Barclays Reimbursement Agreement and under the Fee Letter and the Bank Note at any time for any reason ceases to be valid, effective or binding as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or is declared, in

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a final non-appealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable;

(f) (A) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Barclays Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of Barclays shall at any time for any reason cease to be in full force or effect, (B) any Program Document to which the Department is a party, except for any Dealer Agreement (as defined in the Barclays Reimbursement Agreement) which has been terminated due to a substitution of a Dealer, or any material provision of any of the foregoing documents shall at any time for any reason cease to be in full force or effect, or (C) the Department or any Person (as defined in the Barclays Reimbursement Agreement) acting by or on behalf of the Department denies or disaffirms the Department’s obligations under the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party;


(h) (i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (including, without limitation, amounts due under any Bank Agreement (as defined in the Barclays Reimbursement Agreement)) secured by a lien, charge or encumbrance upon the Subordinate Pledged Revenues; (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the Department seeks to have an order for relief entered with respect to it or LAX or seeking to adjudicate it or LAX insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, termination, composition or other relief with respect to it or LAX or its debts or those of LAX (or the existence of the Department or LAX is dissolved or terminated by any other means); (iii) the Department seeks appointment of a receiver, trustee, custodian or other similar official for itself or LAX or for any substantial part of the Department’s property, or the Department makes a general assignment for the benefit of its creditors; (iv) there is commenced against the Department or LAX any case, proceeding or other action of a nature referred to in clause (ii) above and the same remains undismissed; (v) there is commenced against the Department or LAX any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which is not vacated, discharged, or stayed or bonded pending appeal, within 60 days from the entry thereof; (vi) a financial control board, or its equivalent, is imposed upon the Department by a Governmental Authority; (vii) the Department takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) or (vi) of this paragraph (h); or (viii) the Department or LAX generally is not, or is unable to, or admits in writing its inability to, pay its debts as they become due;

(i) any of Fitch, Moody’s or S&P have downgraded its rating of any Subordinate Obligations below “BBB-” (or its equivalent), “Baa3” (or its equivalent), or “BBB-” (or its equivalent), respectively, or suspended or withdrawn its rating of the same for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency);

(j) any provision of the Charter relating to the Department is repealed, reenacted, amended or otherwise modified (including, without limitation, by legislative or judicial action but excluding any

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such action pursuant to Charter amendments approved by the voters prior to the date of the Barclays Reimbursement Agreement) or any other legislation is enacted, repealed, reenacted, amended or otherwise modified, and in the event of a repeal, reenactment, amendment, modification or enactment, such repeal, reenactment, amendment, modification or enactment, in the sole judgment of Barclays, has a material adverse effect on any right, interest, security or remedy of Barclays under the Barclays Reimbursement Agreement or the other Program Documents; or the Department’s existence as a department of the City under the Charter terminates;



Remedies. Upon the occurrence of any Barclays Event of Default, all Obligations will bear interest at the Default Rate (as defined in the Barclays Reimbursement Agreement) and Barclays may exercise any one or more of the following rights and remedies in addition to any other remedies set forth in the Barclays Reimbursement Agreement or by law provided:

(a) by notice of the occurrence of any Barclays Event of Default to the Trustee (which notice constitutes a “Tier One Stop Issuance Instruction” for purposes of the Seventh Supplemental Subordinate Indenture) prohibit, until such time, if any, as Barclays withdraws (in writing) such notice, the issuance of additional Commercial Paper Notes, reduce the stated amount of the Barclays Letter of Credit to the amount of the then Outstanding Commercial Paper Notes supported by the Barclays Letter of Credit and interest payable thereon at maturity of such Commercial Paper Notes and/or terminate and/or permanently reduce such stated amount as the then Outstanding Commercial Paper Notes are paid;

(b) issue a Tier One Final Drawing Notice (the effect of which will cause the Termination Date of the Barclays Letter of Credit to occur on the 15th day after the date of receipt thereof by the Trustee);

(c) pursue any rights and remedies it may have under the Program Documents, including, without limitation, pursuant to the certain specified terms of the Barclays Reimbursement Agreement; or


Any Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice given by Barclays will not affect the obligation of Barclays to honor drawings under the Barclays Letter of Credit, if properly presented and made in strict conformity with the terms of the Barclays Letter of Credit, with respect to Barclays Covered Notes outstanding at the time such Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice is effective.

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Bank of America Letter of Credit and Reimbursement Agreement

General. The Department and Bank of America will enter into a Reimbursement Agreement, to be dated as of September 1, 2020 (the “Bank of America Reimbursement Agreement”), pursuant to which Bank of America will issue the Bank of America Letter of Credit to provide credit support for the timely payment of the principal of and interest on the Bank of America Covered Notes (the Subseries A-3 Notes, the Subseries B-3 Notes and the Subseries C-3 Notes). See “APPENDIX A—CERTAIN INFORMATION REGARDING THE BANKS—BANK OF AMERICA, N.A.” The Bank of America Letter of Credit will not be pledged to and will not support the payment of the principal of or interest on the Subseries A-1 Notes, the Subseries A-2 Notes, the Subseries B-1 Notes, the Subseries B-2 Notes, the Subseries C-1 Notes or the Subseries C-2 Notes.

In order to ensure timely payment of the principal of and interest on the Bank of America Covered Notes, at the Department’s request, Bank of America will issue the Bank of America Letter of Credit to the Trustee as beneficiary pursuant to, and upon the terms and conditions stated in, the Bank of America Reimbursement Agreement. On or before the date of maturity of any Bank of America Covered Note, the Trustee will draw on the Bank of America Letter of Credit an amount equal to the principal and interest due on the Bank of America Covered Notes maturing on such date. Pursuant to the Seventh Supplemental Subordinate Indenture, all amounts received from any drawing on the Bank of America Letter of Credit are required to be deposited in the related account of the Commercial Paper Debt Service Fund established thereunder and held in trust and set aside exclusively for the payment of the principal of and interest on the Bank of America Covered Notes for which such drawing was made, and the Trustee is required to apply such amounts to the payment of the principal of and interest on such Bank of America Covered Notes on the applicable maturity date.

Certain Provisions of Bank of America Letter of Credit and Reimbursement Agreement.

Certain Provisions of Bank of America Letter of Credit. On September [__], 2020, in accordance with the Bank of America Reimbursement Agreement, Bank of America will issue the Bank of America Letter of Credit in an initial stated amount of $98,100,000 (to support principal of $90,000,000 and interest on the Bank of America Covered Notes accruing at a maximum rate of 12% for a period of 270 days based on a 360-day year). The stated amount of the Bank of America Letter of Credit may be reduced and reinstated from time to time pursuant to the provisions of the Bank of America Letter of Credit. All payments made by Bank of America under the Bank of America Letter of Credit will be made with Bank of America’s own funds in immediately available funds.

The Bank of America Letter of Credit will expire at 5:00 p.m., New York City time, on the date which is the earliest to occur of (the “Bank of America Letter of Credit Termination Date”): (a) September [__], 2021, as such date may be extended by Bank of America upon delivery of a notice of extension of the Bank of America Letter of Credit to the Trustee and the Department, (b) the date of payment of a Drawing (as defined in the Bank of America Letter of Credit), not subject to reinstatement, which when added to all other Drawings honored under the Bank of America Letter of Credit which were not subject to reinstatement as provided therein, in the aggregate equals the Stated Amount (as defined in the Bank of America Letter of Credit) of the Bank of America Letter of Credit on the date of issuance thereof, as adjusted pursuant to the terms and conditions of the Bank of America Letter of Credit, (c) the date on which Bank of America receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that the Trustee has accepted an alternate Credit Facility (as defined in the Bank of America Letter of Credit) in compliance with the Subordinate Indenture and the Bank of America Reimbursement Agreement (after Bank of America honors any properly presented and conforming Drawing, if any, on such date), (d) the date on which Bank of America receives a termination certificate signed by a duly authorized officer of the Trustee to the effect that all of the Bank of America Covered

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Notes have been wholly defeased or no Bank of America Covered Notes remain outstanding under the Subordinate Indenture and the Department has notified the Trustee that it does not intend to issue any additional Bank of America Covered Notes and that it desires to terminate the Bank of America Letter of Credit in accordance with the terms of the Bank of America Reimbursement Agreement, (e) the earlier of (i) the 15th calendar day (or if such date is not a Business Day (as defined in the Bank of America Letter of Credit), the immediately succeeding Business Day) after the date on which the Trustee receives notice from Bank of America that a Bank of America Event of Default (as defined below) has occurred and is continuing under the Bank of America Reimbursement Agreement (a “Tier One Final Drawing Notice”), and (ii) the date on which the Drawing resulting from the delivery of the Tier One Final Drawing Notice is honored under the Bank of America Letter of Credit, or (f) the earlier of (i) the 60th day after the date on which the Trustee receives a Tier Two Termination Notice (as defined in the Bank of America Letter of Credit) from Bank of America that Bank of America has determined that it is unable to comply with one or more certain City administrative provisions set forth in the Bank of America Reimbursement Agreement (the “City Administrative Provisions”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a Tier Two Termination Notice (as defined in the Bank of America Letter of Credit) that has not been rescinded and has not been superseded by a subsequent Tier Two Termination Notice relating to a New Tier Two Termination Date (as defined below) (after Bank of America honors any properly presented and conforming Drawing, if any, on such date) and (ii) the date specified by Bank of America in a New Tier Two Termination Notice which the Trustee has received from Bank of America stating that Bank of America has been subjected to monetary and/or civil penalties as a result of Bank of America’s inability to comply with one or more of the City Administrative Provisions (a “New Tier Two Termination Notice”) (or if such date is not a Business Day, the immediately succeeding Business Day) in respect of a New Tier Two Termination Notice that has not been rescinded or superseded (after Bank of America honors any properly presented and conforming Drawing, if any, on such date).

Events of Default and Remedies Under the Bank of America Reimbursement Agreement.

Events of Default. If any of the following events occur, each such event will be a “Bank of America Event of Default ” under the Bank of America Reimbursement Agreement:

(a) the Department fails to pay, or cause to be paid, when due (i) any principal of or interest on any Drawing (as defined in the Bank of America Reimbursement Agreement) or any Advance (as defined in the Bank of America Reimbursement Agreement), (ii) any Letter of Credit Fee (as defined in the Bank of America Reimbursement Agreement) within ten calendar days of the date such Letter of Credit Fee is due or (iii) any other Obligation (as defined in the Bank of America Reimbursement Agreement) (other than the Obligations described in clause (i) or (ii) of this paragraph (a)) within ten calendar days of the date such Obligation is due;

(b) any representation, warranty or statement made by or on behalf of the Department in the Bank of America Reimbursement Agreement or in any Program Document (as defined in the Bank of America Reimbursement Agreement) to which the Department is a party or in any certificate delivered pursuant to the Bank of America Reimbursement Agreement or thereto proves to be untrue in any material respect on the date as of which made or deemed made; or the documents, certificates or statements of the Department (including unaudited financial reports, budgets, projections and cash flows of the Department with respect to LAX) furnished to Bank of America by or on behalf of the Department in connection with the transactions contemplated by the Bank of America Reimbursement Agreement (the “Department Information”), when taken as a whole, are materially inaccurate in light of the circumstances under which they were made and as of the date on which they were made, provided, however, if after the date such Department Information is furnished to Bank of America it is discovered by the Department or Bank of America that such Department Information contained an inaccuracy, such

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inaccuracy shall not be considered an Bank of America Event of Default if (i) at the time the Department furnished such Department Information to Bank of America, the Department believed, to the best of its knowledge, that such Department Information was accurate in all material respects, and (ii) within five calendar days of the Department receiving notice of such discovery of the inaccuracy it provides Bank of America with corrected Department Information;

(c) (i) the Department fails to perform or observe any term, covenant or agreement contained in any of the certain specified sections of the Bank of America Reimbursement Agreement; or (ii) the Department fails to perform or observe any other term, covenant or agreement contained in the Bank of America Reimbursement Agreement (other than those referred to in paragraphs (a) and (c)(i) above) and any such failure cannot be cured or, if curable, remains uncured for 60 days after the earlier of (A) written notice thereof to the Department or (B) an Authorized Representative having actual knowledge thereof;

(d) the Department (i) defaults in any payment of any Debt (as defined in the Bank of America Reimbursement Agreement), (other than the Commercial Paper Notes, the Drawings or the Advances) secured by a charge, lien or encumbrance on the Net Pledged Revenues or the Subordinate Pledged Revenues with a lien on, pledge of, security interest in or priority of payment from Net Pledged Revenues or Subordinate Pledged Revenues that is senior to, or on a parity with, the Commercial Paper Notes, the Drawings or the Advances, including, without limitation, Senior Lien Revenue Bonds, Subordinate Obligations and Subordinated Obligations (“Secured Debt”), beyond the period of grace, if any, provided in the instrument or agreement under which such Secured Debt was created; or (ii) defaults in the observance or performance of any agreement or condition relating to any Secured Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Secured Debt (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Secured Debt to become due prior to its stated maturity (whether by acceleration, redemption, tender or otherwise);

(e) (i) a court or other Governmental Authority (as defined in the Bank of America Reimbursement Agreement) with jurisdiction to rule on the validity of the Bank of America Reimbursement Agreement, the Master Subordinate Indenture, the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party finds, announces or rules that (A) any material provision of the Bank of America Reimbursement Agreement or any other Program Document to which the Department is a party; or (B) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note (as defined in the Bank of America Reimbursement Agreement) or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Bank of America Reimbursement Agreement or under the Fee Letter (as defined in the Bank of America Reimbursement Agreement) or the rights and remedies of Bank of America, is not a valid and binding agreement of the Department or; (ii) the Department contests the validity or enforceability of the Bank of America Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Bank of America Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of Bank of America or the pledge of, lien on or security interest in the Subordinate Pledged Revenues, or seeks an adjudication that the Bank of America Reimbursement Agreement, any other Program Document to which the Department is a party or any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Bank of America Reimbursement Agreement or under the Fee Letter or the interests, security, rights

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or remedies of Bank of America, is not valid and binding on the Department or the Department repudiates its obligations under the Bank of America Reimbursement Agreement or any other Program Document; or (iii) the validity, effectiveness or enforceability of the pledge of, lien on or security interest in the Subordinate Pledged Revenues granted to the Commercial Paper Notes under the Master Subordinate Indenture and the Seventh Supplemental Subordinate Indenture and the Obligations under the Bank of America Reimbursement Agreement and under the Fee Letter and the Bank Note at any time for any reason ceases to be valid, effective or binding as a result of a finding or ruling by a court or Governmental Authority with competent jurisdiction, or is declared, in a final non-appealable judgment by any court of competent jurisdiction, to be null and void, invalid or unenforceable;

(f) (A) any provision of the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture relating to the security for the Commercial Paper Notes, the Bank Note or the Obligations, the Department’s ability to pay the Obligations or perform its obligations under the Bank of America Reimbursement Agreement or under the Fee Letter or the interests, security, rights or remedies of Bank of America shall at any time for any reason cease to be in full force or effect, (B) any Program Document to which the Department is a party, except for any Dealer Agreement (as defined in the Bank of America Reimbursement Agreement) which has been terminated due to a substitution of a Dealer, or any material provision of any of the foregoing documents shall at any time for any reason cease to be in full force or effect, or (C) the Department or any Person (as defined in the Bank of America Reimbursement Agreement) acting by or on behalf of the Department denies or disaffirms the Department’s obligations under the Master Subordinate Indenture or the Seventh Supplemental Subordinate Indenture or any other Program Document to which the Department is a party;


(h) (i) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt (including, without limitation, amounts due under any Bank Agreement (as defined in the Bank of America Reimbursement Agreement)) secured by a lien, charge or encumbrance upon the Subordinate Pledged Revenues; (ii) under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, the Department seeks to have an order for relief entered with respect to it or LAX or seeking to adjudicate it or LAX insolvent or bankrupt or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, termination, composition or other relief with respect to it or LAX or its debts or those of LAX (or the existence of the Department or LAX is dissolved or terminated by any other means); (iii) the Department seeks appointment of a receiver, trustee, custodian or other similar official for itself or LAX or for any substantial part of the Department’s property, or the Department makes a general assignment for the benefit of its creditors; (iv) there is commenced against the Department or LAX any case, proceeding or other action of a nature referred to in clause (ii) above and the same remains undismissed; (v) there is commenced against the Department or LAX any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property which results in the entry of an order for any such relief which is not vacated, discharged, or stayed or bonded pending appeal, within 60 days from the entry thereof; (vi) a financial control board, or its equivalent, is imposed upon the Department by a Governmental Authority; (vii) the Department takes action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), (iii), (iv), (v) or (vi) of this paragraph (h); or (viii) the Department or LAX generally is not, or is unable to, or admits in writing its inability to, pay its debts as they become due;

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(i) any of Fitch, Moody’s or S&P have downgraded its rating of any Subordinate Obligations below “BBB-” (or its equivalent), “Baa3” (or its equivalent), or “BBB-” (or its equivalent), respectively, or suspended or withdrawn its rating of the same for any credit-related reason (and such suspension or withdrawal is initiated by the respective rating agency);

(j) any provision of the Charter relating to the Department is repealed, reenacted, amended or otherwise modified (including, without limitation, by legislative or judicial action but excluding any such action pursuant to Charter amendments approved by the voters prior to the date of the Bank of America Reimbursement Agreement) or any other legislation is enacted, repealed, reenacted, amended or otherwise modified, and in the event of a repeal, reenactment, amendment, modification or enactment, such repeal, reenactment, amendment, modification or enactment, in the sole judgment of Bank of America, has a material adverse effect on any right, interest, security or remedy of Bank of America under the Bank of America Reimbursement Agreement or the other Program Documents; or the Department’s existence as a department of the City under the Charter terminates;



Remedies. Upon the occurrence of any Bank of America Event of Default, all Obligations will bear interest at the Default Rate (as defined in the Bank of America Reimbursement Agreement) and Bank of America may exercise any one or more of the following rights and remedies in addition to any other remedies set forth in the Bank of America Reimbursement Agreement or by law provided:

(a) by notice to the Department, declare all Obligations to be, and such amounts will thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are waived by the Department under the Bank of America Reimbursement Agreement; provided that upon the occurrence of an Event of Default described under (h) above such acceleration will automatically occur (unless such automatic acceleration is waived by Bank of America in writing);

(b) by notice of the occurrence of any Bank of America Event of Default to the Trustee (which notice constitutes a “Tier One Stop Issuance Instruction” for purposes of the Seventh Supplemental Subordinate Indenture) prohibit, until such time, if any, as Bank of America withdraws (in writing) such notice, the issuance of additional Commercial Paper Notes, reduce the stated amount of the Bank of America Letter of Credit to the amount of the then Outstanding Commercial Paper Notes supported by the Bank of America Letter of Credit and interest payable thereon at maturity of such Commercial Paper Notes and/or terminate and/or permanently reduce such stated amount as the then Outstanding Commercial Paper Notes are paid;

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(c) issue a Tier One Final Drawing Notice (the effect of which will cause the Termination Date of the Bank of America Letter of Credit to occur on the 15th day after the date of receipt thereof by the Trustee);

(d) pursue any rights and remedies it may have under the Program Documents, including, without limitation, pursuant to the certain specified terms of the Bank of America Reimbursement Agreement; or

(e) pursue any other action available at law or in equity.

Any Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice given by Bank of America will not affect the obligation of Bank of America to honor drawings under the Bank of America Letter of Credit, if properly presented and made in strict conformity with the terms of the Bank of America Letter of Credit, with respect to Bank of America Covered Notes outstanding at the time such Tier One Stop Issuance Instruction, Tier One Final Drawing Notice, Tier Two Termination Notice or New Tier Two Termination Notice is effective.

THE DEPARTMENT OF AIRPORTS

General Description

The City, acting through the Department, currently operates two airports in the Los Angeles area, including LAX and Van Nuys Airport. In addition, the Department maintains LA/Palmdale Regional Airport, although LA/Palmdale Regional Airport is not currently certificated by the Federal Aviation Administration (“FAA”). LAX, Van Nuys Airport and LA/Palmdale Regional Airport are operated as a financially self-sufficient enterprise, without support from the general fund of the City. The Department is governed by the seven-member Board, which is in possession, management and control of the Airport System.

LOS ANGELES INTERNATIONAL AIRPORT

Introduction

LAX is located approximately 15 miles from downtown Los Angeles on the western boundary of the City. LAX occupies approximately 3,800 acres in an area generally bounded on the north by Manchester Avenue, on the east by La Cienega Boulevard, on the south by Imperial Highway and on the west by Vista Del Mar. LAX offers commercial air service to every major city in the United States and to virtually every major international destination, and is classified by the FAA as a large hub airport. According to Airports Council International (“ACI”) statistics, in calendar year 2019, LAX ranked as the 3rd busiest airport in the world, and the 2nd busiest airport in North America in terms of total number of enplaned passengers, and 13th busiest airport in the world and 5th busiest airport in North America in terms of total cargo.. In calendar year 2019, LAX had approximately 87.9 million arriving and departing passengers, the majority of which were originating and destination passengers (that is, passengers beginning or ending their trips at LAX).

Facilities

The Department maintains facilities occupying approximately 3,800 acres at LAX. The central terminal complex features a decentralized design concept with nine individual terminals constructed on two levels lining a U-shaped two-level roadway (the “Central Terminal Area”). The total terminal area is approximately 6.2 million square feet. Although many of the terminals are physically connected, they

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function largely as independent terminals with separate ticketing, baggage, security screening checkpoints and passenger processing systems.

Passenger terminal facilities include ticketing and baggage check-in on the upper departure level and baggage claim on the ground level, fronting on the lower-level roadway. Passenger terminal facilities provide access to and from aircraft arrival/departure areas. LAX currently has a total of 115 contact gates in the Central Terminal Area along with a number of remote gate positions for a total of 134 gates. Several of the jet gates accommodate propeller driven aircraft.

The existing airfield consists of four parallel east-west runways configured in two pairs. The north airfield complex includes Runway 6L-24R (8,926 feet) and Runway 6R-24L (10,285 feet). The south airfield complex includes Runway 7R-25L (11,095 feet) and Runway 7L-25R (12,091 feet). All runways are 150 feet wide, except for Runway 7R-25L, which is 200 feet wide. For approaches during Instrument Flight Rules conditions, instrument landing systems are installed on all eight runway ends. The current runway system at LAX can accommodate arrivals and departures of all commercial aircraft currently in service, including the Airbus A380.

[Approximately 10,652 public parking spaces are available at LAX in parking lots owned by the Department, including approximately (i) 7,941 parking spaces in eight parking garages in the Central Terminal Area, (ii) 2,690 public parking spaces in parking Lot E, and (iii) 21 public parking spaces in a cell phone waiting lot.]

Cargo facilities at LAX provide approximately 2.2 million square feet of building space in 26 buildings on 166 acres of land devoted exclusively to cargo. Rental car company facilities, major commercial airline maintenance hangars and office buildings, a 12-story administration building, a control tower, a central utility plant, two flight kitchens, a fuel farm and FAA and TSA facilities are also located at LAX.

See “—Capital Program” below.

Passenger Traffic and Market Share

For the Fiscal Year ended June 30, 2020 (“Fiscal Year 2020”), total domestic passengers (enplaned and deplaned) were [____] and total international passengers (enplaned and deplaned) were [___] for a total of [_____] passengers (enplaned and deplaned). In the Fiscal Year ended June 30, 2019 (“Fiscal Year 2019”), total domestic passengers (enplaned and deplaned) were 61,983,392 and total international passengers (enplaned and deplaned) were 25,922,076 for a total of 87,905,468 passengers (enplaned and deplaned). Passenger traffic decreased approximately [__]% from Fiscal Year 2019 to Fiscal Year 2020. [COVID-19 information to come]

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LAX is served by a diverse group of airlines. The market shares of the top ten airlines, based upon the number of enplaned commercial passengers, at LAX for Fiscal Year 2020 are set forth in the following table.

DEPARTMENT OF AIRPORTS OF THE CITY OF LOS ANGELES LOS ANGELES INTERNATIONAL AIRPORT

AIRLINE MARKET SHARE FISCAL YEAR ENDED JUNE 30, 2020

Airline Market Share

American1

Delta2

United3

SouthwestAlaska4

Spirit AirlinesJetBlue AirwaysAir CanadaQantas AirwaysHawaiian AirlinesTotal

1 Includes SkyWest, Envoy, American Eagle and Compass Airlines as American Airlines.

2 Includes Skywest and Compass Airlines as Delta.3 Includes Skywest Airlines as United. 4 Includes Virgin America as Alaska. Source: Department of Airports of the City of Los Angeles.

Agreements with Airlines

The Department permits airlines and other parties to use facilities at LAX, and receives payment for the use of facilities at LAX, pursuant to a variety of arrangements, all of which are intended to fulfill the Department’s goal of recovering all costs allocable to areas used from the users of such facilities (including, but not limited to, costs for capital, debt service, maintenance and operations, certain airline equipment and infrastructure). Generally these arrangements consist of: air carrier operating permits; the Airport Terminal Tariff and the Rate Agreement (as defined below); terminal leases; facilities use terms and conditions; concession and parking agreements; non-exclusive licensing agreements; and various other building and miscellaneous leases including for cargo and hangar facilities.

The Department has entered into separate operating permits covering the use of landing and apron facilities with air carriers serving LAX. These operating permits grant operating rights to each airline typically for the same ten-year term. The Department is currently authorized to issue operating permits that expire on June 30, 2022, with an option to extend each operating permit for another 10-year term. The operating permits generally require each airline to pay a landing and apron fee to the Department for each aircraft that uses the landing and apron facilities at LAX. The landing and apron fee rates to be charged during each Fiscal Year are based upon the Department’s then-current budget and are adjusted at the end of each Fiscal Year to reflect the actual expenses incurred. All adjustments for deficiencies are billed when determined and overages are credited to the affected airlines

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Airlines use terminal space at LAX under the terms of the LAX Passenger Terminal Tariff (the “Tariff”). Terminal rates under the Tariff are designed to recover all costs, including administrative and access costs, allocable to terminal space used by the airlines. The Tariff has no term or expiration date but is subject to change from time to time by the Board.

All airlines operating at LAX also have entered into a Rate Agreement (the “Rate Agreement”). The Rate Agreement permits the Department to charge the airlines for, among other things, the recovery of certain types of capital costs or operations and maintenance expenses, including those costs related to ground access for vehicles and pedestrians, such as airside and landside access, and Airport access generally. Through annual updates to the rates and charges under the Rate Agreement the Department is entitled to collect from the airlines a significant portion of the capital costs and operation and maintenance expenses related to the Capital Program.

Indebtedness

Senior Obligations. Pursuant to the Master Senior Indenture and several supplemental indentures, the Department has previously issued and, as of September 1, 2020, had outstanding $[____] aggregate principal amount of its Senior Revenue Bonds, 2012 Series A, 2012 Series B, 2013 Series A, 2015 Series A, 2015 Series B, 2015 Series D, 2015 Series E, 2016 Series C, 2018 Series B, 2020 Series A, 2020 Series B, 2020 Series C, and 2020 Series D (collectively, the “Existing Senior Bonds”). Other than the Existing Senior Bonds, the Department has no additional Senior Obligations outstanding. The Senior Obligations (including the Existing Senior Bonds) are secured by a senior pledge and lien on Net Pledged Revenues. The Department’s obligation to repay the Senior Obligations has priority over its obligation to repay the Commercial Paper Notes. Pursuant to the terms and conditions of the Master Senior Indenture, the Department may issue additional Senior Obligations payable from a senior pledge and lien on Net Pledged Revenues.

Subordinate Obligations. Pursuant to the Master Subordinate Indenture and several supplemental subordinate indentures, the Department has previously issued and, as of September 1, 2020, had outstanding $[4,291,270,000] aggregate principal amount of its Subordinate Revenue Bonds, 2009 Series C, 2010 Series C, 2013 Series B, 2015 Series C, 2016 Series A, 2016 Series B, 2017 Series A, 2017 Series B, 2018 Series A, 2018 Series B, 2018 Series C, 2018 Series D, 2018 Series E, 2019 Series A, 2019 Series B, 2019 Series C, 2019 Series D, 2019 Series E and 2019 Series F (collectively, the “Existing Subordinate Bonds”). In addition to the Existing Subordinate Bonds, as of the date of this Offering Memorandum, the Department has Series A Notes and Series C Notes outstanding with a maturity value of $[63,197,000].

The Commercial Paper Notes and the Existing Subordinate Bonds are secured by a pledge of and lien on Subordinate Pledged Revenues. The Department also has granted to the Banks a lien on Subordinate Pledged Revenues on parity with the Commercial Paper Notes and the Existing Subordinate Bonds with respect to certain obligations owed by the Department to the Banks under the respective Reimbursement Agreements.

Pursuant to the terms and conditions of the Master Subordinate Indenture, the Department may issue additional Subordinate Obligations payable from a pledge and lien on Subordinate Pledged Revenues.

Capital Program

The Department is undertaking a multi-billion dollar development program at LAX. Projects in the Department’s current capital program are forecasted to cost approximately $12.3 billion and are

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expected to be financed with a combination of grants, passenger facility charges, Department and other funds and additional Senior Obligations and/or additional Subordinate Obligations (including Commercial Paper Notes). Projects in the capital program include, among others, general infrastructure and utility improvements, improvements at various LAX terminals, construction of various concessions in the LAX terminals, an automated people mover, a consolidated rental car facility, noise mitigation and residential land acquisition programs, replacement of elevators and escalators within the Central Terminal Area, a new midfield satellite concourse, and number of other airfield, apron, roadway and parking projects.

Miscellaneous

The Department maintains a website at www.lawa.org. Information on such website is not part of this Offering Memorandum nor has such information been incorporated by reference herein, and such website should not be relied upon in deciding whether to invest in the Commercial Paper Notes.

INVESTMENT CONSIDERATION


THE PURCHASE AND OWNERSHIP OF THE COMMERCIAL PAPER NOTES INVOLVE INVESTMENT RISK. PROSPECTIVE PURCHASERS OF THE COMMERCIAL PAPER NOTES ARE URGED TO READ THIS OFFERING MEMORANDUM IN ITS ENTIRETY.

TAX MATTERS

Tax-Exempt Notes (Series A Notes and Series B Notes)

General. In the opinion of Kutak Rock LLP, Bond Counsel to the Department (“Bond Counsel”), based on existing laws, regulations, rulings and judicial decisions, interest on the Series A Notes, when issued in accordance with the Subordinate Indenture and the Tax Compliance Certificate, dated March 8, 2012, as amended from time to time (the “Tax Compliance Certificate”) by the Department, will be excluded from gross income for federal income tax purposes and will not be an item of tax preference for purposes of the federal alternative minimum tax. The opinion described in the preceding sentence assumes the accuracy of certain representations of the Department and compliance by the Department with covenants designed to satisfy the requirements of the Internal Revenue Code of 1986, as amended (the “Code”) that must be met subsequent to the issuance of the Series A Notes. Failure to comply with such requirements could cause interest on the Series A Notes to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series A Notes. The Department has covenanted to comply with such requirements. Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Series A Notes.

In the opinion of Bond Counsel, based on existing laws, regulations, rulings and judicial decisions, interest on the Series B Notes, when issued in accordance with the Subordinate Indenture and the Tax Compliance Certificate, will be excluded from gross income for federal income tax purposes, except for interest on any Series B Note for any period during which such Series B Note is held by a

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“substantial user” of the facilities financed or refinanced by the Series B Notes or by a “related person” within the meaning of Section 147(a) of the Code. Bond Counsel is further of the opinion that interest on the Series B Notes will constitute an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. The opinions described in the preceding sentences assume the accuracy of certain representations of the Department and compliance by the Department with covenants designed to satisfy the requirements of the Code that must be met subsequent to the issuance of the Series B Notes. Failure to comply with such requirements could cause interest on the Series B Notes to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series B Notes. The Department has covenanted to comply with such requirements. Bond Counsel expresses no opinion regarding other federal tax consequences arising with respect to the Series B Notes.

In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series A Notes and the Series B Notes (the “Tax-Exempt Notes”), when issued in accordance with the Subordinate Indenture, will be exempt from State of California personal income taxes.

The accrual or receipt of interest on the Tax-Exempt Notes may otherwise affect the federal income tax liability of the owners of the Tax-Exempt Notes. The extent of these other tax consequences will depend upon such owner’s particular tax status and other items of income or deduction. Bond Counsel expresses no opinion regarding any such consequences. Purchasers of the Tax-Exempt Notes, particularly purchasers that are corporations (including S corporations and foreign corporations operating branches in the United States), property or casualty insurance companies, banks, thrifts or other financial institutions, certain recipients of social security or railroad retirement benefits, taxpayers otherwise entitled to claim the earned income credit, or taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations, should consult their tax advisors as to the tax consequences of purchasing or owning the Tax-Exempt Notes.

Backup Withholding. As a result of the enactment of the Tax Increase Prevention and Reconciliation Act of 2005, interest on tax-exempt obligations such as the Tax-Exempt Notes is subject to information reporting in a manner similar to interest paid on taxable obligations. Backup withholding may be imposed on payments made after March 31, 2007 to any bondholder who fails to provide certain required information including an accurate taxpayer identification number to any person required to collect such information pursuant to Section 6049 of the Code. The new reporting requirement does not in and of itself affect or alter the excludability of interest on the Tax-Exempt Notes from gross income for federal income tax purposes or any other federal tax consequence of purchasing, holding or selling tax-exempt obligations.

Changes to Federal and State Tax Laws. From time to time, there are legislative proposals in the Congress and in the various state legislatures that, if enacted, could alter or amend the federal and state tax matters referred to above or adversely affect the market value of the Tax-Exempt Notes. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value of the Tax-Exempt Notes. It cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Tax-Exempt Notes or the market value thereof would be impacted thereby. Purchasers of the Tax-Exempt Notes should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel were based upon then existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of Bond Counsel’s final opinion with respect to the Tax-Exempt Notes (a form of which is attached to this Offering Memorandum as Appendix B) and Bond Counsel has

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expressed no opinion as of any date subsequent to the date of its final opinion with respect to the Tax-Exempt Notes or with respect to any pending legislation, regulatory initiatives or litigation.

Federal Tax Matters of the Series C Notes

Holders of the Series C Notes should be aware that: (a) the discussion in this Offering Memorandum with respect to U.S. federal income tax consequences of owning the Series C Notes is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer; (b) such discussion was written in connection with the promotion or marketing (within the meaning of IRS Circular 230) of the transactions or matters addressed by such discussion; and (c) each taxpayer should seek advice based on its particular circumstances from an independent tax advisor.

General. The following is a general discussion of certain federal income tax consequences of the purchase, ownership and disposition of the Series C Notes. This discussion is based on the Code, as well as final, temporary and proposed Treasury Regulations (the “Regulations”) and administrative and judicial decisions as of the date of this Offering Memorandum, all of which are subject to change or possible differing interpretation. This summary does not purport to address all aspects of federal income taxation that may affect particular investors in light of their individual circumstances including certain types of investors subject to special treatment under the federal income tax laws. Moreover, except as expressly indicated, this summary addresses initial purchasers of the Series C Notes that (a) purchase at a price equal to the first price to the public at which a substantial amount of the Series C Notes is sold; and (b) hold their Series C Notes as capital assets within the meaning of Section 1221 of the Code. This summary does not address owners that may be subject to special tax rules, such as banks, insurance companies, dealers in securities or currencies, purchasers that hold Series C Notes (or foreign currency) as a hedge against currency risks or as part of a straddle with other investments or as part of a “synthetic security” or other integrated investment (including a “conversion transaction”) comprised of a Series C Note and one or more other investments, or purchasers that have a “functional currency” other than the U.S. dollar. Except to the extent discussed below under “—Non-United States Holders,” this summary is not applicable to non-United States persons not subject to federal income tax on their worldwide income. Investors should consult their own tax advisors to determine the federal, state, local and other tax consequences of the purchase, ownership and disposition of the Series C Notes. Prospective investors should note that no rulings have been or will be sought from the Internal Revenue Service (the “Service”) with respect to any of the federal income tax consequences discussed below, and no assurance can be given that the Service will not take contrary positions. The following discussion assumes that the Series C Notes are characterized as short-term obligation under Section 1283(a) of the Code.

Persons considering the purchase of Series C Notes should consult their own tax advisors concerning the Federal income tax consequences to them in light of their particular situations as well as any consequences to them under the laws of any other taxing jurisdiction.

United States Holders.

(a) Payments of Interest. In general, interest on a Series C Note (including any acquisition discount properly allocable to certain of the Series C Notes) will be taxable to an owner who or which is (i) a citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States or any state (including the District of Columbia) or (iii) a person otherwise subject to federal income taxation on its worldwide income (a “United States holder”) as ordinary income at the time it is received or accrued, depending on the holder’s method of accounting for tax purposes. For cash basis owners, such payments will be included in income when received (or when made available for

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receipt, if earlier). For accrual basis owners, such payments will be included in income when all events necessary to establish the right to receive such payments have occurred.

(b) Series C Notes Purchased with Acquisition Discount. A Series C Note will be subject to the “acquisition discount” rules. In general, acquisition discount is the excess of the stated redemption price at maturity of a Series C Note less the holder’s basis in a Series C Note. Thus, acquisition discount generally will occur where a holder acquires a Series C Note for an amount that is less than the Series C Note’s principal amount.

If acquisition discount exists, then, in general, the owner of a Series C Note using the accrual method of accounting, and certain owners of partnerships, S corporations, trusts and other pass-through entities, will be required to include such discount in gross income as it accrues in advance of the receipt of the cash attributable to such discount income. Acquisition discount accrues on a straight line basis based on the number of days to maturity unless the United States holder elects to accrue such discount on a constant interest accrual method using daily compounding. That election is applicable only to the acquisition discount obligation with respect to which it is made and is irrevocable. A United States holder of an acquisition discount note that is not required to include acquisition discount in income currently generally may be required to defer deductions for interest on borrowings allocable to the note in an amount not exceeding the accrued acquisition discount on such note until the maturity or disposition of the note.

(c) Purchase, Sale, Exchange and Retirement of the Series C Notes. A United States holder’s tax basis in a Series C Note generally will equal its cost, increased by any acquisition discount included in the United States holder’s income with respect to the Series C Note. A United States holder generally will recognize gain or loss on the sale, exchange or retirement of a Series C Note equal to the difference between the amount realized on the sale or retirement, except to the extent attributable to accrued but unpaid stated interest, and the United States holder’s tax basis in the Series C Note. Except to the extent that a United States holder of an acquisition discount note is not required to include acquisition discount in income currently, see above under “—Series C Notes Purchased with Acquisition Discount,” gain or loss recognized on the sale, exchange or retirement of a Series C Note will be short-term capital gain or loss, respectively. To the extent that a United States holder of an acquisition discount note is not required to include acquisition discount in current income, gain recognized on the sale, exchange or retirement of a Series C Note will be treated as ordinary income to the extent that such gain does not exceed the amount that would have accrued as acquisition discount on such note had the accrual rules applied.

Non-United States Holders. The following is a general discussion of certain United States federal income tax consequences resulting from the beneficial ownership of Series C Notes by a person other than a United States holder (a “non-United States holder”).

An owner of a Series C Note that is a non-United States holder and is not subject to federal income tax as a result of any direct or indirect connection to the United States of America in addition to its ownership of a Series C Note will generally not be subject to United States income or withholding tax in respect of a payment on a Series C Note, provided such income is treated as portfolio interest. Interest will be treated as portfolio interest if (a) the owner complies to the extent necessary with certain identification requirements (including delivery of a statement, signed by the owner under penalties of perjury, certifying that such owner is not a United States person and providing the name and address of such owner); (b) such interest is treated as not effectively connected with the owner’s United States trade or business; (c) interest payments are not made to a person within a foreign country which the Service has included on a list of countries having provisions inadequate to prevent United States tax evasion; (d) interest payable with respect to the Series C Notes is not deemed contingent interest within the meaning

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of the portfolio debt provision; and (e) the owner claiming the portfolio interest exemption is not deemed to be a foreign bank that acquired the Series C Notes pursuant to an extension of credit entered into in the ordinary course of its banking business.

Except as explained in the preceding paragraph and subject to the provisions of any applicable tax treaty, a United States withholding tax, at the applicable rate determined by statute, will apply to interest paid and acquisition discount accruing with respect to Series C Notes owned by non-United States holders. In those instances in which payments of interest with respect to the Series C Notes continue to be subject to withholding, special rules apply with respect to the withholding of tax on payments of interest with respect to, or the sale or exchange of Series C Notes having acquisition discount and held by non-United States holders.

Purchasers of Series C Notes that are non-United States holders should consult their own tax advisors with respect to the possible applicability of United States withholding and other taxes upon income realized in respect of the Series C Notes.

Backup Withholding. Payments of interest (including acquisition discount) with respect to the Series C Notes may be subject to the “backup withholding tax” under Section 3406 of the Code, at the applicable rate determined by statute, if a recipient of such payments: (a) fails to furnish to the payer its taxpayer identification number; (b) furnishes an incorrect taxpayer identification number; (c) fails to report properly interest, dividends or other “reportable payments” as defined in the Code; or (d) under certain circumstances, fails to provide a certified statement, signed under penalty of perjury, that the taxpayer identification number provided is its correct number and that the holder is not subject to backup withholding. Backup withholding will not apply, however, with respect to certain payments made to Series C Note owners, including payments to certain exempt recipients (such as certain exempt organizations) and to non-United States holders, provided they establish their entitlement to this exemption. Any amounts deducted and withheld from a payment to a recipient would be allowed as a credit against the federal income tax of such recipient. Owners of the Series C Notes should consult their tax advisors regarding their qualification for such exemption from withholding and the procedure for obtaining such an exemption.

State Tax Matters of the Series C Notes

In the opinion of Bond Counsel, under existing laws, regulations, rulings and judicial decisions, interest on the Series C Notes, when issued in accordance with the Subordinate Indenture, will be exempt from State of California personal income taxes.

Bond Counsel has expressed no opinion regarding any other state tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the Series C Notes.

ERISA CONSIDERATIONS

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”), imposes certain requirements on “employee benefit plans” (as defined in Section 3(3) of ERISA) subject to Title I of ERISA, including entities such as collective investment funds and separate accounts whose underlying assets include the assets of such plans (collectively, “ERISA Plans”) and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements, including the requirement of investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in accordance with the documents governing the ERISA Plan. The prudence of any investment by an ERISA Plan in the Series C Notes must be determined by the responsible fiduciary of the ERISA Plan by taking into account the ERISA Plan’s

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particular circumstances and all of the facts and circumstances of the investment. Government and non-electing church plans are generally not subject to Title I of ERISA. However, such plans may be subject to similar or other restrictions under state or local law.

In addition, ERISA and Section 4975 of the Code generally prohibit certain transactions between an ERISA Plan or “plan” as defined in and subject to Section 4975 of the Code and persons who, with respect to that plan, are fiduciaries or other “parties in interest” within the meaning of ERISA or “disqualified persons” within the meaning of Section 4975 of the Code. In the absence of an applicable statutory, class or administrative exemption, transactions between an ERISA Plan and a party in interest with respect to an ERISA Plan, including the acquisition by one from the other of a Series C Note could be viewed as violating those prohibitions. In addition, Section 4975 of the Code prohibits transactions between certain tax-favored vehicles such as individual retirement accounts and disqualified persons. Section 503 of the Code includes similar restrictions with respect to governmental and church plans. In this regard, the Department or any broker dealer of the Series C Notes might be considered or might become a “party in interest” within the meaning of ERISA or a “disqualified person” within the meaning of Section 4975 of the Code, with respect to an ERISA Plan or a plan or arrangement subject to Section 4975 of the Code or Section 503 of the Code. Prohibited transactions within the meaning of ERISA and Section 4975 of the Code or Section 503 of the Code may arise if the Series C Notes are acquired by such plans or arrangements with respect to which the Department or any broker dealer is a party in interest or disqualified person.

In all events, fiduciaries of ERISA Plans and plans or arrangements subject to the above Code sections, in consultation with their advisors, should carefully consider the impact of ERISA and the Code on an investment in the Series C Notes. The sale of the Series C Notes to a plan is in no respect a representation by the Department or the dealers of the Series C Notes that such an investment meets the relevant legal requirements with respect to benefit plans generally or any particular plan. Any plan proposing to invest in the Series C Notes should consult with its counsel to confirm that such investment is permitted under the plan documents and will not result in a non-exempt prohibited transaction and will satisfy the other requirements of ERISA, the Code and other applicable law.

By its acceptance of a Series C Note, each purchaser will be deemed to have represented and warranted that either (i) no “plan assets” of any plan have been used to purchase such Series C Note, or (ii) the dealers are not a party in interest with respect to the “plan assets” of any plan used to purchase such Series C Notes, or (iii) the purchase and holding of such Series C Notes is exempt from the prohibited transaction restrictions of ERISA and Section 4975 of the Code pursuant to a statutory exemption or an administrative class exemption.

THE DEALERS

The Board has appointed BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Loop Capital Markets LLC, Morgan Stanley & Co. LLC, Samuel A Ramirez & Company, Inc., and Wells Fargo Bank, National Association, as dealers with respect to the offering and sale of the Commercial Paper Notes (the “Dealers”). Under the respective dealer agreements, by and between the Department and each of the respective Dealers, the Dealers have no commitment to purchase any of the Commercial Paper Notes, but are obligated only to use their best efforts as agent of the Department to solicit and arrange sales of the Commercial Paper Notes on behalf of the Department.

In addition, certain of the Dealers have entered into distribution agreements with other broker-dealers that are not Dealers for the distribution of Commercial Paper Notes at the initial public offering prices. Such agreements generally provide that the relevant Dealer will share a portion of its selling concession with the relevant broker-dealer.

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RATINGS

See “SUMMARY OF THE BANKS, THE LETTERS OF CREDIT AND THE RATINGS” on the inside front cover of this Offering Memorandum for the ratings on the Commercial Paper Notes.The ratings on the Commercial Paper Notes provided by the respective rating agencies are based, in part, on information provided by the Department and the Banks. Such ratings reflect only the respective views of such rating agencies, and an explanation of the significance of such ratings may be obtained from the rating agency furnishing the same. There is no assurance that a rating will continue for any given period of time or that a rating will not be revised or withdrawn entirely by the rating agency which issued that rating, if, in its judgment, circumstances so warrant. Any downward revision or withdrawal of a rating could have an adverse effect on the market prices of the Commercial Paper Notes. Additional information can be obtained directly from the rating agencies at:

Moody’s Investors Service 7 World Trade Center 250 Greenwich Street New York, NY 10007

Telephone: (212) 553-0300

Standard & Poor’s 55 Water Street

New York, NY 10041 Telephone: (212) 438-2124

Fitch Ratings One State Street Plaza New York, NY 10004

Telephone: (212) 908-0500

LEGAL MATTERS

The opinion to be delivered by Bond Counsel, with respect to the validity of the Commercial Paper Notes, and certain other legal matters, is set forth in Appendix A hereto.

NO CONTINUING DISCLOSURE OBLIGATION

The Commercial Paper Notes are exempt from the continuing disclosure requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended.

ADDITIONAL INFORMATION

The purpose of this Offering Memorandum is to provide information to purchasers of the Commercial Paper Notes. The information contained herein has been obtained from the Department, the Trustee, the Banks, DTC, and other sources believed to be reliable. No attempt is made herein to summarize the Subordinate Indenture, the Reimbursement Agreements, the terms and provisions of the Commercial Paper Notes or other matters which may be material to a decision to purchase the Commercial Paper Notes. Purchasers of Commercial Paper Notes are expected to conduct their own due diligence and analysis prior to making an investment decision.

The references herein to the Subordinate Indenture, the Commercial Paper Notes, the Letters of Credit and the Reimbursement Agreements do not purport to be complete or definitive, do not constitute summaries thereof and are qualified in their entirety by reference to the provisions thereof. Copies of the Subordinate Indenture, the Letters of Credit and the Reimbursement Agreements are on file with the Trustee.

Requests for any of the foregoing should be directed to:

U.S. Bank National Association 100 Wall Street, Suite 1600 New York, NY 10005 Telephone: (212) 361-2892

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Facsimile: (212) 514-6841 Attention: Corporate Trust Services

This Offering Memorandum is submitted in connection with the issuance and sale of the Commercial Paper Notes and may not be reproduced or used, in whole or in part, for any other purpose. The information contained herein and in the Appendices hereto is subject to change without notice and neither the delivery hereof nor any sale made hereunder will create any implication that there has been no change in the affairs of the Department, LAX or the Banks since the date hereof.

Any statements in this Offering Memorandum involving matters of opinion, projections or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No representation is made that any of such statements will be realized. Neither any advertisement of the Commercial Paper Notes nor this Offering Memorandum is to be construed as constituting a contract or agreement between the Department and the purchasers or owners of the Commercial Paper Notes.

AUTHORIZATION

The Board has authorized the distribution of this Offering Memorandum. This Offering Memorandum has been duly executed and delivered by the Deputy Executive Director, Chief Financial Officer on behalf of the Department.


By /s/ Tatiana Starostina Chief Financial Officer

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APPENDIX A

CERTAIN INFORMATION REGARDING THE BANKS


The following information relates to and has been furnished by the respective Bank for inclusion herein. No other party has independently verified or assumes any responsibility for such information, and each of the Department and the Dealers cannot and do not make any representation as to the accuracy or completeness of such information or the absence of material adverse changes in such information subsequent to the date hereof. The delivery of this Offering Memorandum shall not create any implication that there has been no change in the affairs of any of the Banks since the date hereof or that the information contained or referred to in this section is correct as of any time subsequent to the date hereof.

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SUMITOMO MITSUI BANKING CORPORATION

[Sumitomo to provide]

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BARCLAYS BANK PLC

[Barclays to provide]

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[Bank of America to provide]

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APPENDIX B

FORM OF BOND COUNSEL’S OPINION

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APPENDIX C

BOOK-ENTRY-ONLY SYSTEM

Introduction

Unless otherwise noted, the information contained under the caption “—General” below has been provided by The Depository Trust Company (“DTC”). The Department, the Trustee and the Dealers make no representation as to the accuracy or the completeness of such information. The Beneficial Owners (as defined below) of the Commercial Paper Notes should confirm the following information with DTC, the Direct Participants (as defined below) or the Indirect Participants (as defined below).

NEITHER THE DEPARTMENT NOR THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DIRECT PARTICIPANTS, TO INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (A) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DIRECT PARTICIPANT, OR ANY INDIRECT PARTICIPANT; (B) ANY NOTICE THAT IS PERMITTED OR REQUIRED TO BE GIVEN TO THE OWNERS OF NOTES UNDER THE SUBORDINATE INDENTURE, (C) THE PAYMENT BY DTC OR ANY DIRECT PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE OWNERS OF THE COMMERCIAL PAPER NOTES; (D) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE OWNERS OF NOTES; OR (E) ANY OTHER MATTER REGARDING DTC.

General

DTC will act as securities depository for the Commercial Paper Notes. The Commercial Paper Notes will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Master Note Certificate will been issued for each Subseries of the Commercial Paper Notes, each such Master Note Certificates being in the aggregate principal amount of $500,000,000, and is on deposit with DTC.

DTC is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s rating of

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“AA+.” The DTC Rules applicable to Direct Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org. The Department has not undertaken any responsibility for and make no representations as to the accuracy or the completeness of the content of such material contained on the websites described in the preceding sentence including, but not limited to, updates of such information or links to other Internet sites accessed through the aforementioned websites.

Purchases of the Commercial Paper Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the Commercial Paper Notes on DTC’s records. The ownership interest of each actual purchaser of each Note (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Commercial Paper Notes are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Commercial Paper Notes, except in the event that use of the book-entry system for the Commercial Paper Notes is discontinued.

To facilitate subsequent transfers, all Notes deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Notes with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Commercial Paper Notes; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the Commercial Paper Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Commercial Paper Notes, such as defaults and proposed amendments to the Commercial Paper Note documents. For example, Beneficial Owners of the Commercial Paper Notes may wish to ascertain that the nominee holding the Commercial Paper Notes for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Commercial Paper Notes unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Department or the Trustee as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Commercial Paper Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on the Commercial Paper Notes will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Department or the Trustee, on the payment date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing

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instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Department or the Trustee, subject to any statutory or regulatory requirements as may be in effect from time-to-time. Payment of principal and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Department or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the Commercial Paper Notes at any time by giving reasonable notice to the Department or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, certificates representing the Commercial Paper Notes are required to be printed and delivered.

The Department may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, certificates representing the Commercial Paper Notes will be printed and delivered to DTC.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Department believes to be reliable, but the Department takes no responsibility for the accuracy thereof.

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ATTACHMENT A Documents Resolution

Documents

Transcript of ATTACHMENT A Documents Resolution