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SR-203-002 (3) Z tJ 3,-002. JONES HALL HILL & \VHlTE, A PROFESSfOSAL LAW GORPORATI01ll ATTORXEYS AT LAW CHARLES F ADAMS STEPHEN R CASALEGG10 ANDREW C HALL. JR KE~SETH 1 JO~ES PHILIP KELSON LEE WILLIA:>f H :!oIADISOlS' BRI~"l D QUI]\,'T PAUL J THIMMIO SHARO::' STA.-';TOX WHITE FODR EMBARC_UlERO CENTER SUITE 1950 SA.... FRANCISCO 94111 (415) 391-5780 March 31, 1988 ACTOM......TIG TELEGOPIER (415) 391-5784 (415) 956-6308 To All Transcnpt ReCIpIents Re 52.915,000 Certificates of Participation, California CIties Fmanclng Corporation, 1985 Serles E, EVidenCIng Proportionate Interests of the Owners Thereof In Lease Payments to be Made by the CIties of Delano, Fontana, Santa Monica and Thousand Oaks to the California CitieS Fmancmg CorporatIon To document the prOject substitution by the City of Thousand Oaks In connectIon WIth the subject flnancmg, we have added Section l to the Transcnpt The enClosed documents are to be Inserted IOta the Transcnpt of the captioned as follows (a) two caples of the Schedule of Transcnpt Documents, to replace the eXlstmg Schedule of Transcnpt Documents In the front of each volume (I and II) of the Transcnpt, (b) Index Tabs L 1 through L 12, includIng the documents listed on the enclosed Schedule of Transcnpt Documents for the correspondmg tabs Please IOsert these tabs documents behmd Index Tab K3 In Volume II of your Transcnpt The ongmally recorded SIte Lease TermInatIon Agreement, Lease Termrnatlon Agreement. Amended and Restated SIte Lease, Amended and Restated Lease Agreement and ongmal btle Insurance polley are bemg dehvered. by copy of this letter, to Mr. Todd Duncan. First Interstate Bank of California, as trustee Very truly yours. /! enda F 8ell Project Coordmator Enclosure GFBa CITY OF SANTA MONICA ,.-~ r~ ~~ c~:, ~:: INTER-DEPARTMENT MEMO - '. , DATE: April 4, 1988 TO: Donna Betancourt, Acting City Clerk Mike Dennis, Director of Finance~ Additional Documentation Re: COP's, California Cities Financing Corporation (1985) FROM: SUBJECT: Please insert the attached documents into the official city Clerk file copy of the referenced materials. CMD:aksjmemcops '-- DATE: TO: FROM: SUBJECT: --"*"" ' '" I~ CITY OF SANTA MONICA INTER-DEPARTMENT MEMO December 9, 1985 Nike Dennis, Director of F~nance Joan L. Jensen, Staff Assistant III, City Clerk's Offlce Contract Nos. 4616 (CCS) and 4617(CCS) CITYOF<;,~"~Tr\...t:T'W:t\ enV CON.Tfl01 It" , rFt:"/CE On November 26, 1985, the City Council ~aw~cl9 P3~31 Contract No. 4616(CCS) to First Interst~e ~MnK and Callfornia Citles Financing Corporation for Trust agreement for lease-purchase of aerial ladder flre truck and Contract No. 4617(CCS) to California Cltles Flnancing Corporation for Lease Agree~ent for lease-purchase of aerial ladder flre truck. Please provide the City Clerk's office with fully executed c09ies of the above contracts. Thank you for your assistance. JJ cc: Toby Menin - Finance ., , l JONES HALL HILL & WHITE, A PROFESSIONAI~ I,AWCORPORATIO~ A'rTOR.........EYSAT LAW KE:->....ETH I JOI"ES A~DREWC HALL J1< SHAROX STA:-'TON WHITE CHARLES F ADAMS STEPHE'" R CASAl-EOOIO WILLIA..'>I H MADISO:'\ PHILIP NEL~O~ LEE EDSBL.L M EADY. JR PACLJ THI!\iMIG BRIA~ D Q I.:I~T JORGEN I.. XIELSE;S TRACY E CO~~ER JOHN PA1:L THO:\Lo\.S FOGREMBARCADEROCE~TER SUITE 1950 SAN FRANCISCO 94111 (4151391-57BO ACTOMATIC TELECOPIER (415) 391 5784 January 28. 1986 ROBERTJ HILL OFCOL'XSEL To: All Transcript Reclplents Re: $2,915.000 Certlflcates of Partlcipatlon Cal1fornia Cltles Flnanclng Corporatlon, 1985 Series E. The Certlflcates Evidence Proportlonate Interests of the Owners Thereof In Lease Payments to be Made by One or More of the Clties of Delano, Fontana, Santa Monlca and Thousand Oaks, Callfornia to the Callfornia Cltles Flnanclng Corporation Enclosed are the followlng documents for lnsertlon lnto the Transcript of the captloned flnanclng as lndlcated below: (a) Title Insurance Policy issued by First American Title Insurance Company, to be lnserted unde~ lndex tab G15; - (b) Trusteels Certlficate of Cancellation of Temporary Certiflcates of Particlpation, to be inserted under lndex tab Kl; and (c) Receipt of DefinltlVe Certificates of Partlcipation in Exchange for Temporary Cert,flcates of Partlcipatlon, to be inserted under lndex tab K2. Very truly yours, I~~ enda F. Be 1 ProJect Coordlnator Enclosure ! ~ . I INTERDEPARTMENT MEMO Date: January 30, 1986 To: ANN SHORE, CITY CLERK v From: Mike Dennis, Director of Finance Subject: OFFICIAL RECORDS OF CERTIFICATE OF PARTICIPATION ISSUE TO FINANCE FIRE TRUCK On 1/29/86, I brought to you two volumns of official records concerning this subject. On 1/30/86, I received the attached from Jones, Hall, Hill & White (bond counsel for the issue). Please insert the attached documents into the two volumns of records you already have per instructions set forth in the attached letter of 1/28/86. Thanks. CMD/lh:orcop Attachments - 1 - "'-- ZtJ'S ..tJ4fNEs HALL JiTT,;~ & WHITE, . KENNe:THI.JONES ANDRl!:WC HALL.JR. SHARON STANTON WHITE CHARLB:S F. ADAMS STEPHEN R. CASALEOOIO WILLIAM H. MADISON PHILIl"N1tLSON LEE EDSELL M. EADY..fRo PAULJ THUOUO SlUAN D. QUINT JORGEN 1... NIELSEN TRAcY E. CONNER JOHN" PAUL THOMAS A PROll'ESSIONAL LAW CORPORATION ATTORNEYS AT LAW FOUR EMBARCADERO CENTER SUITE 1950 SAN FRANCISCO 94111 (410) 391-:5780 January 16, 1986 AUTOMATIC TELECOPlER (415l391-5784 ROBERT J HILL OF COUNSEL To: All Original Transcript Recipients Re: $2,915,000 Certificates of Participation California Cities Financing Corporation, 1985 Series E; The Certificates Evidence Proportionate Interests of the Owners Thereof in lease Payments to be Made by One of More of the C i ties of Delano t Fontana t Santa Monica and Thousand Oakst California to the California Cities Financing Corporation I Enclosed is an original Transcrlpt of the captioned financing. Forthcoming will be a post-closing package containing the following: (a) Title Insurance Policy (Schedule of Transcript Documents Item GIS); (b) Trustee's Certificate of Cancellation of Temporary Certificates of Participation (SChedule of Documents Item Kl); and (c) Receipt of Definitive Certificates of Participation in Exchange for Temporary Certificates of Participation (Schedule of Documents Item K2). .. Very truly yours, ~ ~..~. Glenda F. Be 11 /,Project Coord1nator Enclos-ur.e . J 1305(Hl5 JHt .~tIDQ G!-'6 Z~099 y . ... . " $2,915,000 CERTIFICATES OF PARTICIPATION CALIFORNIA CITIES FINANCING CORPORATION, 1985 SERIES E Evidencing Proportionate Interests of the Owners Thereof in lease Payments to be Made by the CITIES OF DELANO, FONTANA. SANTA MONICA AND THOUSAND OAKS to the CALIFORNIA CITIES FINANCING CORPORATION -j " . (~,.' of. ' ...-.'..... SCHEDULE OF TRANSCRIPT DOCUMENTS :. - , t ~- 0- , -- .. . .r"'" A BASE LEGAL DOCUMENTS " - ., 1. California CIties Financing Corporation ("CorporatIon") Resolution No 85- 10, "A Resolution Approving, Authorizing and Dlrectmg Execution of Certain Lease Fmancmg Documents and Dlrectmg Certam Actions with Respect Thereto", adopted December 9, 1985 ,:10-' ~ ~ ;~ 2 - City of Delano ("Delano") Resolution No 1985-129, "A Resolution Approvmg, Authorizing and Directing ExecutIon of Certain Lease Financing Documents, Authonzlng and Dlrectmg Execution of Purchase Agreement, Approving 'a Prehminary Official Statement and Authorizing and Directing Certam Actions with Respect Thereto", adopted December 2, 1985 - -Of 3 City of Fontana ("Fontana") Resolution No 85-235. "A ResolutIon ApprOVing. Authorrzlng and Directing Execution of Certam Lease Fmanclng Documents, Authorizing and Dlrectrng Execution of Purchase Agreement, Approvmg a Preliminary OffiCial Statement and Author/zmg and Dlrectmg Certam Actions with Respect Thereto". adopted December 3, 1985 4 City of Santa Monica ("Santa MOnica") Resolution No. 7122(CCS), "A Resolution Approvmg, Authorizing and DIrecting Execution ;)f Certam Lease Fmancmg Documents. Authoflzmg and Directing Execution of Purchase Agreement. ApprOVing a Prellmmary OffiCial Statement and Authonzmg and Dlrectmg Certam Actions wIth Respect Thereto", adopted December 26. 1985 5 City of Thousand Oaks ("Thousand Oaks") Resolution No 85-240. "A Resolution of the City of Thousand Oaks Authorizing the Issuance of Bonds for the Purpose Of Fmanclng the AcqUiSItion and Construction of Commumty Faclhtles by the Canejo Valley Chamber of Commerce and Provldrng Other . Matters Properly Relating Thereto (Community InformatIon Center ProJect), adopted September 24, 1985 6 Proof of Pubhcation of Notice of (TEFRA) Public Hearing held by Thousand Oaks 7 Thousand Oaks ResolutIon No B5~316, "ResolutIon of the City CouncIl of the City of Thousand Oaks Relating to the Execution of a Lease Agreement ProvIding for the ConstructIon of a Chamber of Commerce FacIlity and Relating to a Public Hearing 10 Connection TherewIth", adopted December 26. 1985. ..~ '" . . ... 8 Thousand Oaks ResolutIon No 85-292, "A ResolutIon Approvmg, Authorizing and DIrecting ExecutIon of Certain Lease Fmanclng Documents, Authorizing and DIrecting Execution of Purchase Agreement, Approving a PrehmlOary OfficIal Statement and AuthorizIng and DIrecting Certam Actions with Respect Thereto", adopted December 3, 1985 9 CertifIcate of MaIling Report of Proposed Debt Issuance, together wIth Report 10 Prehmmary Official Statement 11 CertIfIcate Purchase Agreement by and among Memll Lynch Capital Markets and Stone & Youngberg (collectively, the "Underwriters"), Delano, Fontana, Santa MOnica and Thousand Oaks, as acknowledged by FIrst Interstate Bank of Callfornta ("Trustee") and approved by the Corporation . 12 Trust Agreement. dated as of November 1, 1985 (the "Trust Agreement"), by and among'the Trustee. the Corporation and the Cities of Delano, Fontana, Santa MOnica and Thousand Oaks. 13 Lease Agreement, by and between the Corporation and Delano 14 Lease Agreement. by and between Corporation and Fontana 15 Lease Agreement, by and between Corporation and Santa MOnica 16 Lease Agreement, by and between Corporation and Thousand Oaks (recorded) See Index Tab L 11 for Amended and Restated Lease Agreement. 17 Site lease. by and between the Corporation and Thousand Oaks. (recorded) See Index Tab l10 for Amended and Restated Site lease. 18 Assignment Agreement, by and between the CorporatIon and the Trustee (recorded) 19 Final OfficIal Statement .2. . . . 20 Certificate of Malhng Report of Final Sale, together with Report B USF&G CLOSING DOCUMENTS 1 Commitment ("Commitment") for FinancIal Guaranty Bond from United States Fidelity and Guaranty Company ("USF&G") 2 FinanCial Guaranty Bond issued by USF&G 3 Opinion of General Counsel to USF&G, pursuant to Section 6(d)(13) of the Purchase Agreement, as to validity and enforceability of the Fmanclal Guaranty Bond 4 Power of Attorney, pursuant to Exhibit C of Commitment C CORPORATION CLOSING DOCUMENTS 1 CertifIcate of Status ~ DomestIc CorporatIon, Issued by the California Secretary of State 2 CertifIcate Regarding Effectiveness of Articles of Incorporation, together wIth Articles of Incorporation and any and all amendments thereto as filed with and certified by the California Secretary of State, pursuant to Section 6(d)(12) of Purchase Agreement 3 Certificate Regarding Effectiveness of Bylaws. together with Bylaws and any and all anJendments thereto, pursuant to Section 6(d)(12) of Purchase Agreement 4 Signature Certificate of Corporation 5 Officer's Certificate pursuant to Section 6(d)(7) of Purchase Agreement 6 Certificate Requestmg Disbursements from Costs of Issuance Account pursuant to Section 304 of the Trust Agreement 7 Opinion of McDonough, Holland & Allen. Counsel to the CorporatIon. pursuant to Section 6{d){14) of the Purchase Agreement and ExhIbit C of CommItment D. DELANO CLOSING DOCUMENTS 1 Incumbency and Signature Certificate 2 Officer's Certificate pertammg to effectiveness of resolutIons and documents and reaffirmation of representattons and warranties -3- . . . 3 CertifIcate of CIty Attorney pertammg to no Iitlgatlon pursuant to Section 6(d)(5) of the Purchase Agreement 4 Certificate of Finance Director pertaining to the OffIcIal Statement pursuant to Section 6(d)(6) of the Purchase Agreement 5 Agreement Concerning Financial Statements, pursuant to Commitment 6 Certificate as to Arbitrage 7 Certificate of Essential Use 8 Evidence of, or commitment to provIde, Insurance pusuant to SectIon 503 - 505 of the Lease Agreement and In the form required pursuant to Article V of the lease Agreement and ExhIbit D( 10) to CommItment. together with letter of Insurance representatIve stating that such requIrements have been met 9 Opinion of City Attorney pursuant to Section 6(d)(2) of the Purchase Agreement and ExhibIt C to CommItment. E FONTANA CLOSING DOCUMENTS 1 tncumbency and Signature Certificate 2 Officer's Cert!ftcate pertaining to effectIveness of resolutIons and documents and reaffirmatIon of representations and warranties 3 Certificate Of CIty Attorney pertammg to no litigation pursuant to Section 6(d)(5) of ttre Purchase Agreement 4 Certificate of Finance Director pertainIng to the OffICial Statement pursuant to Section 6(d)(6) of the Purchase Agreement 5 Agreement Concerning Financial Statements. pursuant to Commitment 6 Certificate as to ArbItrage 7 CertIficate of Essential Use. 8 EVidence of, or commItment to provIde, Insurance pusuant to SectIon 503 - 505 of the Lease Agreement and In the form reqUIred pursuant to ArtIcle V of the Lease Agreement and Exhibit 0(10) to CommItment, together with letter of Insurance representative stating that such requirements have been met 9 Opinion of CIty Attorney pursuant to Section 6(d)(2) of the Purchase Agreement and ExhibIt C to Commitment -4- . F SANTA MONICA CLOSING DOCUMENTS Incumbency and Signature Certificate 1 2 OffIcer's Certificate pertaining to effectiveness of resolutions and documents and reaffirmation of representatIons and warranties 3 Certificate of City Attorney pertaIning to no litigation pursuant to Section 6(d)(5) of the Purchase Agreement 4 CertIficate of Finance Director pertaining to the Official Statement pursuant to Section 6(d)(6) of the Purchase Agreement 5 Agreement Concerning FinanCIal Statements, pursuant to Commitment 6 CertIficate as to ArbItrage 7 Certificate of Essential Use 8 Letter of Santa MOnica pertaining to Insurance required pusuant to SectIon 503 - 505 of the Lease Agreement and In the form reqUired pursuant to Article V of the Lease Agreement and Exhibit 0(10) to CommItment. together With letter of Insurance representative statIng that such reqUirements have been met . 9 Opinion of CIty Attorney pursuant to SectIon 6(d)(2) of the Purchase Agreement and ExhIbit C to CommItment G THOUSAND OAKS CLOSING DOCUMENTS 1 Incumbency and Signature CertIfIcate 2 Officer's Certificate pertalnmg to effectIVeness of resolutIons and documents and reaffirmation at representations and warranties 3 CertIfIcate of City Attorney pertamlng to no litigatIon pursuant to SectIon 6(d)(5) of the PUrchase Agreement 4 CertifIcate of Fmance DIrector pertaining to the OffIcial Statement pursuant to Section 6(d)(6) of the Purchase Agreement 5 Agreement Concernmg Financial Statements, pursuant to Commitment 6 Certificate as to Arbitrage 7 CertIficate of Essential Use 8 EVIdence of, or commitment to provIde, Insurance pusuant to Section 503 - 505 01 the Lease Agreement and In the form requIred pursuant to ArtIcle V of -5 . . -- the Lease Agreement and ExhibIt D(10) to Commitment. together wIth letter of Insurance representative stating that such requirements have been met 9 Opinion of City Attorney pursuant to Section 6{d)(2) of the Purchase Agreement and ExhibIt C to Commitment 10. CertIfIcate Regarding Use of Proceeds, together wIth accountant's letter pertaining thereto 11 Certificate of Mailing Informataon Return Form 8038, together with Form 8038 12 Certificate Relatmg to Assignment of Pnvate ActiVity Bond limit Allocation 13 Recordation InstructIOns to First Amencan TItle Insurance Company 14 Report of ActIon Taken wIth respect to pnvate activIty bonds, together with Certificate of Mailing same 15 Title Insurance Policy H TRUSTEE CLOSING DOCUMENTS 1 AuthentIcation and Incumbency Certificate, together wIth general slgnmg!authorlzlng resolution, pursuant to Section 6(d)(10) of the Purchase Agreement 2 Trustee's Receipt of Funds 3 OpJnlon of' MacDonald, Halsted & Laybourne, Counsel to the Trustee, pursuant to Section 6(d){3) of the Purchase Agreement and Exhibit G of Commitment UNDERWRITERS CLOSING DOCUMENTS EVidence of "AM" rating by Standard & Poor's Corporation, pursuant to Section 6(d)(17} of the Purchase Agreement 2 ReceIpt of Temporary Certificates of ParticIpation 3 Specimen Temporary CertIficate of ParticipatIon 4 CertIficates of Underwriters regardmg Reserve Fund 5 Prellmmary Blue Sky Survey prepared by Buchalter, Nemer, Fields, Chrystle & Younger, A ProfeSSIonal Corporation, pursuant to Section 6(d)(16) of the Purchase Agreement -6- . . . 6 Opinion of Buchalter 0- Nemer, Fields. Chryst1e & Younger, A Professional Corporation, counsel to Underwriters, pursuant to Section 6(d)(4} of the Purchase Contract 7. Reliance Letter to USF&G pursuant Exhibit C of Commitment. J SPECIAL COUNSEL CLOSING DOCUMENTS 1. Final Approving legal Opinion of Jones Hall HIli & White. A Professional Law Corporation, pursuant to Section 6(d)(1) of the Purchase Agreement 2 Supplemental Opinion of Jones Hall Hilt & White, A Professional Law Corporation. pursuant to Section 6(d){1) of the Purchase Contract. 3 Reliance Letter to the Trustee Regarding Final Approving Legal Opmion and Supplemental Opinion of Jones Hall Hill & WhIte, A ProfeSSional Law Corporation 4. Reliance Letter to USF&G Regarding Final Approving Legal OpiOlon and Supplemental Opinion of Jones Hall Hilt & White, A ProfeSSional law Corporation, pursuant to Exhibit C of Commitment. K POST.ClOSING DOCUMENTS 1. Trustee Certificate of Cancellation of Temporary Certificates of Participation 2. Receipt of Definitive Certificates of Participation in Exchange for Temporary Certificates of Participation 3 Specimen Definitive Certificates of Participatlon. L THOUSAND OAKS PROJECT SUBSTITUTION DOCUMENTS 1. Thousand Oaks Resolution No. 87.279, "A Resolution Requesting Approval by the Thousand Oaks Civic Center Authority of a Site Lease Between the City of Thousand Oaks and the California CitIes Financing Corporation Relating to a Portion of the Site Which is the Subject of That Certain Library Project Lease, Dated as of February 1. 1981. Between the Authority and the City and Authorizing and Directing Certain Actions With Respect Thereto". adopted November 24,1987. 2. Thousand Oaks Civic Center Authonty ("Civic Center Authority") Resolution No 87.35, "A Resolubon ApprovJOg a Site Lease Between the City of Thousand Oaks and the Cahfornia Cities Financing Corporation Relatmg to a Portion of the Site Which IS the Subject of that Certain Library Project Lease. Dated As Of February 1, 1981, Between the Thousand Oaks Civic Center .7- . . Authority and the City and Authorizing and Directing Certain Acbons WIth Respect Thereto", adopted November 24, 1987 3 Consent of Thousand Oaks CiVIC Center Authonty Regardmg Sublease Affecting That Certain Library Project Lease, Dated As Of February 1, 1981 4 Consent of United States Fidelity & Guaranty Company Regardmg Amendment and Restatement of That Certam Lease Agreement. Dated As Of December 1, 1985, As Amended As Of October 1, 1986, Between the California Gltles Fmanclng CorporatIon and the City at Thousand Oaks. 5 Consent of First Interstate Bank of Callf90rnla Regardmg Amendment and Restatement of That Certam Lease Agreement, Dated As Of December 1, 1985, As Amended As Of October 1, 1986, Between the California CItIes Fmanclng Corporation and the CIty of Thousand Oaks, together with letter of Trustee, dated January 27, 1988, regardmg funds established under Trust Agreement 6 Thousand Oaks Resolution No 87-280, "A ResolutIon Approvmg, Authorlzmg and Dlrectmg Execution of a Site Lease Termrnatlon Agreement, a Lease Termination Agreement and Amended and Restated lease Agreement, Each Between the CalifornIa Cities Fmancmg Corporation and The City, and Authorlzrng and Dlrectmg Certain Actions With Respect Thereto", adopted November 24, 1987 7 CCFC Resolution No 88-1, "A Resolution of the Callforma Cities Fmancmg Corporation Approvmg, Authorizing and Dlrectmg Execution of a Site Lease Termmatlon Agreement. A Lease Termmatlon Agreement. An Amended and Restated Site Lease and An Amended and Restated Lease Agreement. Each BetWeen the Corporation and the City of Thousand Oaks, And AuthorizIng And Directing Certain ActIOns WIth Respect Thereto", adopted February 5, 1988 8 S,te Lease Termrnatlon Agreement, dated as of November 1, 1987. by and between Thousand Oaks and Corporation (recorded) 9 Lease Termmatlon Agreement, dated as of November 1, 1987, by and between Corporation and City (recorded) 10 Site lease, dated as of December 1. 1985, Amended and Restated as of November 1, 1987, by and between Thousand Oaks and Corporation (recorded) 11 Lease Agreement dated as of December 1, 1985, Amended as of October 1, 1986. Amended and Restated as Of November 1, 1987, by and between Corporation and Thousand Oaks (recorded) 12 AL TA Owner's Policy of Title Insurance Issued by FIrst Amencan Title Insurance Company -8- '. . . 13050-5 JHHW:BDQ:rms 12/04/85 Zl714 RESOLUTION NO. 85-10 A RESOLUTION APPROVING. AUTHORIZ1NG AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO WHEREAS. the California Cities Financing Corporation (the "Corporation") is empowered under its Articles of Incorporation to assist the cities of the State of California. as well as other political subdivisions of the State of California, in the acquisition of real and personal property convenient or necessary for the operatlon of such clties or other political subdivisions by entering into such financing agreements as ne necessary to accomp 1 ish the poo 1 i ng and common market i ng of such agreements or certificates of participation in payments to be made under such agreements in order to reduce the cost to such cities or other political subdivisions of the acquisition of such real or personal property; and WHEREAS. the Cities of Carpinteria. Delano. Fontana, Kerman, Santa Monica and Thousand Oaks and the Town of Mammoth Lakes. California (the II Lessees II) . are proposing to proceed with the lease financing of certain property (the "Projectsll) and it is in the public: interest and for the pUblic benefit and the benefit of the Lessees that the Corporation authorize and direct execution of certain flnancing documents in connection therewith; and WHEREAS, the documents below specified have been filed with the Corporation which, with the aid of its staff. has reviewed said documents; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CALIFORNIA CITIES FINANCING CORPORATION, AS FOllOWS: SECTION L The forms of the below-enumerated documents be and the same are hereby approved, and the President, Vice President or Financ1al Officer of the Corporation is hereby authorized and directed to execute said agreements. with such changes, insertions and omissions as may be approved by such officer. and the Secretary of the Corporation is hereby authorized and directed to attest to such officer1s signature: (a) separate site leases or site and facility leases relating to each of the Projects. between each of the lessees. as lessor J and the Corporatlon, as lessee; and (b) separate lease agreements relating to each of the Projects, between the Corporation, as lessor. and each of the Lessees, as lessee (the "Lease Agreements"); (c) a trust agreement relating to the financing of the acquisition of the ProJects and the execution and delivery of certificates of participation in the lease payments to be made by one or more of the lessees under the Lease Agreements (the "Certificates"), among first . . Interstate Bank of Cal ifornia, as trustee (the "Trustee"). the Corporation and the Lessees. SECTION 2. The form of Certificate Purchase Agreement relating to the purchase of the Certificates by Merrill Lynch Capital Markets and Stone & Youngberg, as underwriters, as presented to this meeting. be and the same is hereby approved, and the President. Vice President or Financial Officer of the Corporation is hereby authorized and directed to approve and execute said agreement, with such changes, insertions and omissions as may be approved by any such officer. SECTION 3. The President, Vice President, Financial Officer, Secretary and other appropriate officers of the Corporation are hereby authorized and directed to execute such other documents and certificates as may be necessary to effect the purposes of this resolution and the lease financing herein authorized. SECTION 4. This resolution shall take effect immediately. ***************......***** I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the Cal ifornia Cities Financing Corporation at a meeting thereof duly held on the 9th day of December, 1985, by the following vote of the Directors thereof: AYES, Directors Sm1th. Lindsay, Foucault, Ingraham, Tanner. NOES, None ABSTAIN, Director B1ery ABSENT, Directors wright, Bulman, Peterson. ~~Iv~ Secretary -2- . ../ . . . 13050-5 I ~ ;; Z1644 JHHW:BOQ:rms 11/19/85 CITY OF DELANO RESOLUTION NO. 1985-129 A RESOLUTION APPROVING~ AUTHORIZING AND OIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS~ AUTHORIZING AND DIRECTING EXECUTION OF A PURCHASE AGREEMENT, APPROVING A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO RESOLVED, by the City Council of the City of Delano: WHEREAS, the City of Delano (the "City") ~ working together with the Cities of Carpinteria, Fontana, Kerman~ Santa Monica and Thousand Oaks and the Town of Mammoth Lakes, Cal Hernia (collectively referred to herein as the "Lessees"), and the California Cities Financing Corporation (the uCorporationll), is proposing to proceed with a joint lease financing; and WHEREAS, in connection therewith, the City proposes to finance certain property described in Exhibit C to the Lease Agreement (as hereinbeiow referred to) (the "Project") and it is in the pUblic interest and for the publ ic benefit that the City authorize and direct execution of the Lease Agreement and certain other financing documents in connection therewith; and WHEREAS, pursuant to the City's authorization, Merrill Lyneh Capital Markets and Stone & Youngberg (the "Underwriters") propose to underwrite the financing and.have prepared and presented to the City a form of prellminary official statement containing information material to the offering and sale of the Certificates of Participation described below (the "Preliminary Official Statement"); and WHEREAS, the documents below specified have been filed with the City. and the members of the City Counei 1, with the aid of its staff, have reviewed said documents; NOW, THEREFORE. it is hereby ORDERED and DETERMINED, as follows: SECTION 1. The below-enumerated documents be and are hereby approved, and the Mayor~ City Manager or F,nance Oirector is hereby authorized a.nd directed to execute said documents, with such changes, insertions and omisslons as may be approved by such official, and the Clty Clerk is hereby authorized and directed to attest to such offic1al1s signature: (a) a lease agreement, relating to the Project, between the Corporation, as lessor, and the City, as lessee (the "lease Agreement"), so long as the term of the lease Agreement does not exceed 6 years, so long as the pri nc, pa 1 amount of the Lease Agreement does not exceed 4 . $ 240,000 and so long as the lease Payments payable by the City under the Lease Agreement in any twelve-month period do not exceed $60,000 ; -~" and (b) a trust agreement, by and among the Corporation, the Lessees and First Interstate Bank of Cal ifornia, Los Angeles, Cal Hornia, as trustee (the "Trustee"), relating to the financing of the acquisition of the Project, and the execution and delivery of certificates of participation evidencing the proportionate interests of the owners thereof in lease payments to be made by the City under the Lease Agreement and in the lease payments to be made by the other Lessees under separate lease agreements (the UCertificates of Participation"). SECTION 2. A purchase agreement by and among the Underwriters_and the Lessees relating to the purchase by the Underwriters of the Certificates of Participation, be and ;s hereby approved, and the Mayor, City Manager or Finance Director is hereby authorized and directed to execute said agreement, with such changes, insertions and omissions as may be approved by such official, so long as the interest rate with respect to the Certificates of Participation will not produce annual lease payments payable under the Lease Agreement in any twelve-month period in excess of $ 60,000 , so long as the principal amount of the Certificates of Participation attributable to the City will not exceed $ 240.000 and so long as the Underwri ters' discount wi th respect to the Cert if i ca tes does not exceed ,... 4 %. SECTION 3. The Mayor, City Manager, Finance Director, City Clerk and other officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates as may be necessary to . effect the purposes of this resolution and the lease financing herein authorized including, but not limited to, a site lease, a site and facility lease, an encroachment permit, an easement, a license, or such other document as may be appropriate to transfer to the Corporation a legal interest in the real property upon with the Project will be constructed or located, if the Project includes a real property component, or to transfer to the Corporation"a legal interest in such portions of the Project that include personal property. . SECTION 4. To the best of the City's knowledge, information and belief, the Preliminary Official Statement contains no untrue statement of a material fact with respect to the City or omits to state a material fact with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances un~er which 1t was made. SECTION 5. The Preliminary Official Statement is approved for distribution in connection with the offering and sale of the Certificates of Participation. SECTION 6. The Mayor, City Manager or Finance Director is authorized to approve corrections and additions to the Prellminary Official Statement by supplement or amendment thereto, or otherwise as appropriate, provided that any such corrections or additions shall be necessary to cause the information contained therein to conform with facts material to the . -2- . . . Certificates of Participation. or to the proceedings of the City or such corrections or additions are in form rather than in substance. SECTION 6. The Mayor, City Manager or Finance Director 1s authorized and directed to cause the Preliminary Official Statement to be brought into the form of a final official statement (the "Final Official Statementfl) and to execute said Final Official Statement. dated as of the date of the sale of the Certificates of Participation, and a statement that the facts contained in the Final Official Statement. and any supplement or amendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were, at the time of sale of the Certificates of Participation, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Certificates of Participation, and does not, as of the date of delivery of the Certificates of Participation, contain any untrue statement of a material fact with respect to the City or omit to state material facts with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The Mayor, City Manager or Finance Director shall take such further actions prior to the signing of the Final Official Statement as are deemed necessary or appropriate to verify the accuracy thereof. ************ I hereby certify that the foregoing resolution was duly adopted at a meeting of the City Council of the City of Delano duly held on the ?nli day of. DPcN>mh@r . 1985, by the following vote: AYES, and in favor of, Councilmembers:Fukawa. Mata, Matera, Munoz and Mayor Velasco HOES. Councilmembers: ABSENT, Councilmembers: J ;' -3- RES01.U1'rON NO. .\ ~~FI.~~~,~p~/ --IU "',. I /t I"~."/ OEPUncirt - . 1../ ~~f ~ U (",j _ ~ 85-235 CLiAK, QlY OF FONTANA / . A RESOLUTION OF THE CITY COUNCIL OF THE CITY OP FONTANA APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS, AUTHORIZING AND DIRECTING EXECUTION OF A PURCHAsE AGREEMENT. APPROVING A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO RESOLVED. by tns City Council of tne City of Fontana; VBE..A~. the City of Fontana (the "City.), working together with the Cities of Carpinterla, Delano, Santa Monica, and Tbousand Oaks and the Town of Ha.moth Lakes, California (collectively referred to herein as the .Lessees"), and the California Cities Financ1tlg Corporation (the "Corporation"). is proposing to proeeed with a joint lease financing; and ~.R~A~. in eODnection therewith. the City proposes to finance certain property described in ~hibit C to the Lease Agreement (as hereinbelow referred to the ''pl'ojeetH) aud it is ill t.he public In1:ereat and for the public benefit that the City authorize and direct execution of the Lease Agre..ent and certain other financing docUllUluts in COMeotion therewith; and. VB&~~~~, pursuant to the City's authorization, Merrill Lynch Capital Markets and Stone r.. Youugberg (the '"Underwriters") propose to underwrite the financirlg and have prepared and presented to the City a form of preliminary offieial stateaent containing information material to the offering and sale of the Certificates of Participation described beLow (the .Prelt.inary Official Statement"); and inII.RA~. the documents below specified have been filed with the City. and the meabers of the City Council, with the aid of its staff, have reviewed said documenl:s; lIOW, 'NDR"OD. it is hereby OII)RIIJm and DE'J'RRMnnm, a8 follows: . SBCTIQII 1. The below-enUlleratad documents be aDd are hereby approved. and the Ma~r, City Manager, or Finance Director is hereby authorized and directed to execute said documents. with such changes, insertions and oaissions as may be approved by Quch official. and the City Clerk is hereby authorized and directed to attesc to such officialts signature: (a) a lease a&reeaent, relating to the Project, between the Corporation. as lessor, and the C1ty, .a lesaee (the "Lease Agreeaenc.). so long as the tera of the Lease Agreement does not esceed five years, BO long as the principal amount of the Lease Agree.ent does not uceed $1,865.000 and so long aa the Leaae Payments payable by the City under the Lease Agreement in any twelve-month period do not exceed $460,000; and (b) a trust agreement, by and among the Corporation. rbe Leasees and First Interstate Bank of California, Los Angeles, California. aa trustee (the "Trustee"). relat1ug to the financing of the acquisition of the Project, IUld th.e execution and delivery of certificatea of participation evidencing the proportionate interests of the owners thereof ill lease payments to be made by the City lUlder the Lease AgreemeDt and in the lease payments to be made by the other Leasees under separate lease agreelllents (the HCertificates of Participatlon~). SEerIOR Z. A purcPase agreement by and a.ong the Underwriters and the Lessees relating to the purchase by tbe Undervriters of tbe Certificates of Participation, be and is hereby app~oved. and the Mayor. City H~n~~er or Finance Director is hereby authorized and directed to execute said agreement, with such changes. insertions and oa1.8ions as may be approved by sucb official, 90 long as the interest rate With ~e8pect to the Certificates of Participation will not produce annual leaae payaents payable under the Lease Agreement in a.ny twelve-1llonth period in exeess of $460,000. so long as the principal amount of the Certificates of Participation attributable to the City will not exceed $1.865.000 and so long aa the Underwriters' discount With respect to the Certificates does not exceed four percent (4%). SECTION 3. The Mayor. City Manager. Finance Director. City Clerk and other officials of tne City are hereby authorized and directed to execute such otber agreements. documents and certificates as may be necessary to effect the purposes of this reso1ut1on and the lease financing herein authorized including. but not limited . to, a site lease, a site and facility lease, an encroachqent per.it, an easement, a license, or sueh other document as .ay be appropr1ate to transfer to the Corporation a legal interest in the real property upon with the Project will be constructed or located, if the Project includes a real property component, or to transfer to the Corporation a legal interest in such portions of the Project that include personal property. SECTIOH 4. To the best of the City's knowledge, information and belief. the Preliminary Official Statement c6ntains no untrue statement of a material fact with respect to the City or omits to state a material fact with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under wbich it was made. SlCTIOB So The Preliminary Official Statement i8 approved for di8tribution in connection with the offering and sale of tbe Certificates of Participation. SKC'rIOK 6. The Ma'01:, City Manager 01' Finance Director is autho-rized to approve corrections and additions to the Preliminary Official Statement by supplement or amendment thereto, or otherwise as appropriate, provided thet aoy such corrections or additions shall be neeessary to cause the information contained therein to conform with facts material to the Certificates of PartIcipation. or to the proceedings of the City or such correctIons or additioDs are in form rather than in substallce. . SECTIOR 7. Tb.e Mayor, Cl ty Manager or Finance Direc tor is authorized and directed to cause the Preliminary Official Statement to be brought into the form of II, final official stat.ellent (the ~F1nal Official State.ent") and to execute said Pinal Official Statement. dated as of the date of the sale of the Certificates of Participation, and a statement that the facts contained in the Final OffiCial Statellent, and a!;lY supplement or aaendment thereto (which shall be deemed an original part thereof for the purpose of such statement) were. at the time of sale 01 the Certificates of Participation, true and correct in all material respects and that the Fillal Offieial Statement did not, on the d.ate of Bale of the Certif1eates of Participation. and does not, a8 of the date of delivery of the CertificateB of Participation. contain any untrue statement of a material fact with respect to the City of omit to state material facts with respect to the City required to be stated where tleeeeear, to mak.e an, atatement made therein not mislead1ns 1n the light of the circUlllltances under which it was made. The Mayor, City Manager or Finance Director shall take such further actiOns prior to the signing of the Final Official Statement as are deelled neceBeary 01: appropriate to verif,. the accuracy thereof. APPIOVED MD ADOPTED this 3rd day of Oecember , 1985. Isl ~athan A. S,mon Mayor of tbe City of Tontana ATTEST: /s/ Patr1Cla M. Murray City Clerk I. Patricia M. Murray. CIty Clerk of the City of Fontana. do hereby certify that the foregoing resolution was duly and regularly adopted by the City Council of the City of Foutana at a regular llIeetlng thereof. held on the 3rd day of December. 1985. by the following vote. to-wit: A!BS: Mayor Simon, Councl1men Boyles, Day. Koehler, Kragness ROES: None ABSEN'l: None 1st Patrl~la M. Murray City Clerk of the City of Fontana - APPIOVID AS t'O rolM: --- Isl John H. Rager City Attorney CITY OF SANTA MONICA CALIFORNIA ANN M. SHORE CITY CLERK' 1685 Main Street, Santa Monica, California 90401.3295 I (213) 458-8211 CITY OF SANTA MONICA ) COUNTY OF LOS ANGELES ) ss. STATE OF CALIFORNIA I. Ann M. Shore, C1ty Clerk in and for the City of Santa Mcnlca. hereby certify that the attached document 15 a true and correct copy of: Resolut~on No. 7l22(CCS) relating to lease f~nancing documents and a purchase agreement, adopted by the city Council at the~r meeting held November 26, 1985 . The original document is on file in the Off~ce of the Clty Clerk of said City. DATE:~--<!. :2t:, /1J'S- ~~~~ Ann ~. Shore . City Clerk . . . . CA:RMM:gp:lpa1ft CJty CouncJl Meeting of 11/26/85 Santa MonJca, CalifornJa RESOLUTION NUMBER 7122(CCS) (Clty Counc~l Series) A RESOLUTION O? T~E CITY COUNCIL OF THE CITY OF SANTA MONICA APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAI~ LEASE FINANCING DOCUMENTS, AUTHORIZING fu~D DIRECTING EXECUTION OF A PURCHASE AGREEMENT, APPROVING A PRELI~ISARY OF2ICIAL STATEME~T AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITg RESPECT THERETO WHEREAS, the C1. ty of Santa ~1oru ca (the "eJ ty" ), wor~o ng together wlth the Cltles of Ca~pJnterJa, Delano, Fontana, Ke~man, and Thousand Oaks and the ~own of Ma~moth Lakes, CallfornJa (collect1.vely referreG. to hereJ n as the "Lessees"), and t.he Cal J forn:: a C1. t.J.es ?J nanCJ ng CorporatJ on (the "Corpora tJ on" }, 1.5 propOS1.ng to proceed w1.th a ]oJnt lease f1.nanclng: and WHEREAS, 1.n connectJOr. therewl~h, the CJty p~oposes to f) nance certaJ n property descr 1.bed 1.n =:xhJ 01. t C to the Leas e Agreement (as hereJ_uoelow referred t.o) (t:"1.e "Pro J ect") a:1d J t 15 In the publJC Jnte~es~ ane :cr the pUblJC benefJt ~hat ~~e CJ~y authorJze a~d d~rec~ exec~t~c~ 8f ~~e Lease Ag=ee~e~~ a~d ce~ta)~ othe~ ~JnancJng doc~me~ts Jr. ~or.~eC~Jon ~herewJ~h; and WHEREAS, pur5uan~ to ~~e Cl~Y'S authorlzatJor., ~e=~Jl: ~ynch CapJtal ~ar<ets ane Stene & ~c~ngbe~s ( the "Tjnder'Nr~ -:.er s tl ) propose to underwrJte ~he fl~anclng and have prepa~ed a~d presented to the CJ ,:y a ::or7 or prell mJ nary off] Cl al state~ent - 5 - . containlng JnfOrmatlon materlal to the offerJng and sale of the CertJ fJ cates of Partl CJ patlan descr1.bed below (the "Prell mJ nary OffJcJal Statement"}: and WHEREAS, the documents below speclfied have been flied with the Cl ty, and the members of the C 1 ty Counci 1, Wl th the aJ d of Jts staff, have rev1.ewed sajd documents. NOW, THEREFORE, THE CITY COU~CIL OF THE CITY OF SANTA MONICA RESOLVES AS FOLLOWS; SECT!:ON 1. The below-enumerated documents be and are hereby approved, and the Clty Manager lS hereby authorjzed and cJrected t~ execute sald documents, w1.th suc~ changes, )nser~)ons and . om1.SS1.0ns as ~ay be app~oved by such off1.cjal, and the C1ty Clerk 1.5 hereby author1.zed and dJ rected to attest to such offl Cl aI' 5 S1.gnat'..lre: (a) A lease agreement, relat1ng to the ProJect, between the CorporatJ on. as lessor, and the Ci. ty. as lessee (the "Lease Agree~ent"), so long as the terM of the Lease Agreement does not exceed nlne years, so long as t~e pr~nclpal amount of the Lease Ag~eene~~ does not exceed $380,000 and so long as the Lease Payrr.e'1t5 payaole by the CJ::'Y under the Lease Agreement J n any ~~elve-Top.~h gerJOC do net exceed 585,000. (bj ;. t=ust as;=eemeot, 'cy ana arrong the CorporatJon, the :"essees end ?J~St. ~:1'C.e~5ta.te Ba::i< eal J forr)) a, Los Angeles, Callfo=n1.a, as tr~stee (the "~=~stee"l, re~atlng to the fJnanclng ~ of ~he acqUJSJtlon cf t~e ?ro:ec~1 and the executJon and dell very - 6 - of certJfJcates of partJClpatJOn evjdencJng the proportJonate . lnterests of the owners thereof 5n lease payments to be made by the CJty under the Lease Agreement and ln the lease payments to be made by the other Lessees under separate lease agreements (the "CertJfJcates of PartJcJpatJon"). SECTION 2 . A purchase agreement by and among the Underwr:L ters and the Lessees relatJ ng to the purchase by the Underwr j ters of the CertS fj ca tes of Pard CJ pat) on, be and J.S hereby approved, and City Manager LS hereby authorized and d~rected to execute sald agreement, WJth such changes, Lnsertjons and OmJSS10nS as my be approved by such offlcJal, so long as the ~nterest rate wi th respect to the CertJ fJ cates of PartJ CJ patJ on wlll not produce annual lease paynents payable under the Leas e . Agreement J.n any twel ve-rrlonth pen ad 1 n excess of $85,000, so long as the prJnJcJ.pal amount of the CertJflcates of PartJCJ.patlon attrJbutable to the CJty WJll not exceed $380,000 so long as the UnderwrJters' d~scount WJth respec~ to t~e Ce~~JfJcates does not exceed 4.0%. SECTION 3. The CJty Manager and Clty Clerk and ot~er of=lClals of the CJty are hereby authorlzed and dJrectec ~o execute such other agreements, documents and certJflcates as may be :'1ecessary to effect the purposes of thi s resolutJ on and the lease fLnanclng hereJn authorJ.zed JncludJng, but not lJmJted te, transfer to the Corporatlon of a legal Lnterest In ProJect. SECTiON 4. To the best of the CJty's knowledge, lnfor~atJon . and belJef, the P~elJmJnary OffJ.c1al Statement contalDS ~o untr~e - 7 - statement of a materJal fact WJth respect to the CJty or omits to . 3tate a ma ten al fact Wl th respect to the Cl ty requi red to be stated where necessary to make any statement made thereJ n not mlslead~ng In-the llght of the c~rcumstances under WhlCh It was made. SECTION 5. The Preli mj nary Of::J c~al Statement j 5 approved for dJstrlbutJon JD connectJon WJ~~ the offerlng and sale of the CertJfJcates of Part~cJpatJon. SECTION 6. The C)ty Manager )5 authorlzed to approve correct] ons and addl. tJ ons ~o the ?rel)!T') nary Off) C) al St.atement by s"o.1ppler"['lent or anend;pent thereto, or other-w)_se as appropn ate I pr-ovldec. that any S<lC:C correctlons or add:LtJons shall be . necessary to cause .." _ne Jnformat1.0~ ccnta1.ned there1.n to conforro wlth facts ~aterJal -1-,-'1;_ --v the CertJfJcates of PartJCJpatJon, or to the proceed)ngs of the CJty or such correct1.ons or add1tJOnS are In form ~ather than In substance. SEC':'ION 7. The Clty Manage~ lS author~zed and dJrected to cause the PrelLmlnary OiflC1.al State~e~t to be brought Jnto the form of a fJna: offJC1al statement (the "FJnal Off1.clal Stat.e'Tler.t") and to exec~te sa; d FJ na::" Off] c] a1 St.atement I dated as of the date of t~e sale or t~e Ce=~jf]cates of ?art1CJ?a~JQr., a~d a state'-'ent tha-:: i:.he facts cant.a] ned ~ n the F~nal Of:::) C1 al St.ate~er.t., and any s~P91e~ent ~~ '........ anend"TIent t.he~eto (whJch shal: be deemed an orlgJna: part the=ecf =or the purpose of such . stat.e'";'e~t) were, at. the t.Jme of sale 0= the Ce:::-tJfJcates of Part.lC1.pat1on, tr~e and correct In a:1 ~aterlal respect.s ahd t~at. - 8 - the Flnal OfflcJal Statement dJd not, on the date of sale of the . Cert)fJcates of PartJcJpatJon, and does not, as of the date of del)ve~y of the CertJfJcates of PartJcjpatjon, contaln any untrue statement of a materJal fact WJth respect to the CJty or omJt to state material facts wj th respect to the Cj ty requJ.red to be stated where necessary to make any statement made thereJ n not m)slead~ng ln the light of the CJrcumstances under whJch Jt was made. The city manager shall take such further actjons prl0r to the slgnlng of the FJ.nal Offlc1al Statement as are deemed necessary or approprJ.ate to verjfy the accuracy thereof. SECTION 8. The CJty Clerk shall certify to the adoptJon of tnJS resol~tJon, and henceforth and thereafter the same shall be l~ =~ll =orce and effect. . AP?ROVE~ AS TO FOR~: ~~''--K- RCBZR~ ~. ~YERS - Cl.t.y Attorney ~ ...... - 9 - . . . Adopted and approved thlS 26th day of November, 1985. /) (- I ---; i" 0 r7 L' . (~ _~_ . /{ fo.:'...-L,,-~,( .\., , , \ -t.....-.. .' . '--. I Mayor I hereby certify that the foregoing Resolutlon No. 7122(CCS) was duly adopted by the Clty Councll of the CIty of Santa MonIca at a meetlng thereof held on November 26, 1985 by the followlng Council vote: Ayes: Councllmembers: Conn, Epstein, JennIngs, A. Katz, H. Katz, Zane and ~ayor Reed Noes: Councllmembers: None Absta:~: Councll~e~bers: None ~~sent: Councll~embers: None ATTEST: /'"' r ,I Iu~~ 7J; ~~~ Clty Clerk . RESOLUTION NO 85-240 A RESOLUTION OF THE CITY OF THOUSAND OAKS AUTHORIZING THE ISSUANCE OF BONDS FOR THE PURPOSE OF FINANCING THE ACQUIS1TlON AND CONSTRUCTION OF COMMUNITY FACILlTIES BY TI-'E CONEJO VALLEY CHAMBER OF CmN.1ERCE AND PROVIDING UHlER .'vIATTERS PROPERLY RELATING THERETO (COMtv',UNITY INFORMATION CENTER PROJECT) WHEREAS, the City of Thousand Oaks {CITY] pursuant to applicable lawS" IS authorized to Issue certIficates of particIpatIon, enter mto fmanClng leases, Installment sale agreements or other appropnate financing arrangement to provide financing for community faCIlities within the CITY on the terms and conditions therein provided. WHEREAS, ConelO Valley Chamber of Commerce, a Ca'lfornla non-profit CorporatIOn, (the "CHAMBER") has requested the CITY to Issue certificates of partiCIpation, enter Into fmancmg leases, Installment sale agreements. or other appropnate flnancmg <lrrangements. for the purpose of prOViding fmanclng to the CHAMBER for the acquIsition of land and construction of approximately 3.900 square feet of community facilIties, rndudmg parkl11g and other appurtenances and Improvements located on approxImately 1 5 acres of land located on the northwest corner of Hillcrest Drlve and Lynn Road wJthJJ1 the CIty of Thousand Oaks, California and all bell1g hereinafter referred to as the "PROJECT", and . WHEREAS, It IS m the publiC 1l1terest and for the public benefit and III furtherance of the publiC purposes of the CiTY that the CITY authOrize such fmanclng for the PROJECT, NOW, THEREFORE. BE IT RESOLVED BY THE City CounCil of the CI~y of Thousand Oaks. as follows I The CITY hereby <luthonzes finanCing pursuant to applicable laws of not to exceed $IlOO ,000 for the purpose of provldmg fmancmg to the CHAMBER for the ProJect. 2. Such fmancmg shall be upon such terms and conditIOns as may be mutually agreed upon by the CITY, the CHAMBER and the purchaser of certificates of participatIon or other oblIgations and shaf! be authOrized by or pursuant to resolutIon of the CITY at a meeting duly held and conducted for such purpose. All proceedmgs shall be completed to the s<ltlsfactlon of the CI TY In Its sole discretion In addition, the adoptIon of thiS resolutIon shall not be deemed or construed to be approval of any other matter relatmg to the PROJECT which the City CounCil of the City of Thousand Oaks must otherWIse approve or disapprove 3. The proceeds of the fmancmg shall rnc!ude such related and necessary Issuance expenses, administrative costs. debt service reserves and mterest payments as may be requIred to accomplish successfully the fmancmg" ll. The CITY does hereby flfld that the adoptIon of thiS Resofutlon constitutes a substantlill mducement to the CHAMBER. Its successors or <155191""15, to undertake the acquIsItion and construction of the PR.OJECT. . Res ".b a:: -24J . 5. This Resolu tlon shall take effect Immediately upon Its passage and adoptIon * *- 'f( * * -It' PASSED AND ADOPTED THIS 24th day of SePte..be~ 1985 ~(~ Uhvrence E Horner. Mayor CIty of Thousand Oaks, Callforma ATTEST. N~D?'!.~~ City of Thousand Oaks. Carlfornla APPROVED AS TO FORM i I/U h C~ /Jc.J ~~ I\-Iark G. Sellers, CIty Attorney . I .".....-:>- - --: :C-Z:":;::: ~i~ APPROVED AS TO ADMINISTRATION: ~s ~ ~ ~:.i. C:? r~:::': C~ ~ - = ~J~~ Grant R - Brimhall. Cil)) ~er "ERTlFlCATlOl'l c.... :- - - - - _t""';' STATE OF CALI>ORNIA COUNTY OF ~E~TURA 55. CITY OF THOUSAND OAkS T<_~ "._.~ ;;.~ -""'''' ~-- TIlLE ~ .J . I, NANCY A. DILLON, G1ty Clerk of the Clty of Thousand Oaks, DO ~EREBY CERTIFY that the foregolng lS a full, true, and correct copy of ~esolut1o~ No. B5-24~ Wh1Ch was duly and regularly passed and aoopted by sald C1ty Councll at a regular meetIng held September 24, 1985, by the follOWIng vote AYES Counc11members SChIllo, Schaefer, Laxdal, Flore, and ~ayor Ho~rer IjOES None ABS!:NT None IN WITNESS WHEREOF, I have hereunto set ~y hand ~nd affIxed the off1C131 seal of the Clty of Thousand Oaks, Californla. 7Lw: J({b~A"XJ Nandy ;dD11l or., CHjC1 erK Clty of Thousand OaKS, Cal1for~la . 2 Q~es No 3S -:~\) IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF VENTURA . CERTIFICATE OF PUBLICATION No. Dv1-343369-0-8 . . . . . . . . . . . ~ . . . . . . . . . . . . . . . . . . . . . (Above space for fIllIng stamp) STATE OF CALIFORNIA) (ss COUNTY OF VENTURA ) I. Albe~ta FIorlta. hereby cert1fy that the News Chron1cle 1S a newspaper of general c1rculatIon wIthIn th. prOVIS10ns of the Governm.nt Code of the State of Callforn1a. pr1nted and pub11shed wIthin the County of Ventu~~. State of Ca11- fornla; that I am the prIncIPal clerk of the pr1nte~ of saId newspape~ and that the text below 15 a true pr1nted COPY that was pub11shed 1n saId newspape~ on the folloWlng dates. to-wIt: December 11. 24. 1985. I certIfy under penalty of pe~JurY that the foreSOlng 1S true and correct at Thousand Oaks. Ventura County. Ca11forn1a. on the 27th day of December 1985. ......~..~*~....... . (SIgnature) . NOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that the C1ty of Thousand Oaks. Ca11- fo~nla. at a spec1al meet1ng on December 26. 1985. w111 hold a pub11c hear1ng and cons1der approval of the execut10n and delIVery by the CIty of ThOUsand Oaks of a lease agreement w1th the Ca11fornIa CIt1es Financlng CorporatIon 1n an ag- gregate pr1nc1pal amount not to exceed $530.000 for the pu~- pose of fInancing the construction and development of a Ch~mbe~ of Commerce facI11ty 1n the C1ty of Thous~nd Oaks. The p~oJect proPosed to be const~ucted ~1l1 be loc~ted at the northwest corner of the 1nte~sectlon of Lynn Road and HIllcrest DrIve 1n the C1ty of Thousand Oaks. Callfo~n1a. The facl11ty w1l1 be constructed on CIty-owned land and w111 be leased by the C1ty to the ConeJo Valley Chambe~ of Com- merce. a Ca11fo~n1a nonprof1t corporat10n. All those 1nterested 1n matters related to e1ther the exe- cut10n by the C1ty of sa1d lease aBreement or th. locat1on or OPQratlon of the pro4ect are 1nvlted to attend and be heard at the meetIng wh1ch w1l1 commence at 8:00 o~cloc~ a.m.. and w1ll be held In the CIty CounCIl chambers. located 1n the CIty HaJl at 401 West HIllcrest DrIve In Thousand Oaks. CalIfornIa. If you have any ~ue5tIons. please call Robert Ble~y at (805) 497-8611. Is/ Nancy A. D1110n Cltv Clerk Dated: Dec. 10. 1985 PUBLISH: Dec. 11. 24. 1985. DVl-343369-0-8 13050- 5 JHHW:BDQ;rms 12/09/85 ZZ1731 . .- HOTICE OF PUBLIC HEARING NOTICE IS HEREBY GIVEN that the City of Thousand Oaks, California, at a special meeting on December 26, 1985, will hold a public hearing and conS1der approva] of the execution and delivery by the City of Thousand Oaks of a lease agreement with the Californla Cities Financlng Carporatlon in an aggregate principal amount not to exceed $5l0,COa for the purpose of financlng the construction and development of a Chamber of Commerce rae11 ity in the City of Thousand Oaks. The proJect proposed to be constructed wi 11 be located at the northwest corner of the intersection of Lynn Road and Hillcrest DrlVe 1n the City of Thousand Oaks, Ca11farnia. The facility will be constructed on City-owned land and will be leased by the C1ty to the Conejo Valley Chamber of Commerce, a Californla nonprofit corpora~ion. . All those interested in matters related to either the execution by the City of said lease agreement or the location or operation af the project are i nvi ted to attend and be heard at the meeting wh 1 ch w111 cornmence at S: Q.Q a/clock ~.m. and will be held in the City Council chambers, located in the City Hall at 401 West Hillcrest Drive in Thousand Oaks, California. If you have any questions, please call Robert Biery at (805) 497-8611. ~tUr# 70~~ , ( ~ City Clerk Dated: 1.~/;c/16 I I Publish 12-11-85 and 12-24-85 I c::':-,": -- ~~- " IS . -T'I"...... :--.....___ -"Ij T"lT" ...l,j -..... ~ - -~ -- OJ. ;;..... - .J ;--' ----~ .............. - -..J" ~~ -....... ............ BY T II'LE' . . . . RESOLUTION NO. 85-316 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THOUSAND OAKS RELATING TO THE EXECUTION OF A LEASE AGREEMENT PROVIDING FOR THE CONSTRUCTION OF A CHAMBER OF COMMERCE FACILITY AND RELATING TO A PUBLIC HEARING IN CONNECTION THEREWITH WHEREAS. the C1ty of Thousand Oaks (the "City") is authorized by the Government Code of the State of Cal1forn1a (the "Law"). to purchase. lease. rece1ve. hold and enJoy real and personal property. and control and d1spose of it for the common beneflt; and WHEREAS. the ConeJo Valley Chamber of Commerce. a Cal1forn1a nonprof1t corporatlOn (the "Chamber of Commerce") has requested the C1ty to enter 1nto a lease agreement w1th the Cal1forn1a C1tles Financ1ng Corporation (the "lease") under the Law for the construct1on and development of a facll1ty to be on C1ty-owned land wlthln the Clty at the northwest corner of the lntersectlon of Lynn and H1llcrest Drive (the "ProJect") to be leased by the C1ty to the Chamber of Commerce to be used to provide consumer complalnt med1ation and community lnformation; and WHEREAS, the Lease will be considered to be an "lndustrlal development bond" under Section l03(b) of the Internal Revenue Code of 1954, as amended - {the "Code"}, and Section l03(k) of the Code requires that the "applicable elected representative" with respect to the C1ty hold a publlC hear1ng on the executlon of the Lease; and WHEREAS, the C1ty Counc1l of the C1ty of Thousand Oaks is the "appl1cable elected representat1ve" to hold sa1d publ1C hearlng; and WHEREAS, not1ce of sa1d publlC hearing has been duly given as requ1red by the Code, and the C1ty Council of the C1ty of Thosuand Oaks has heretofore held such publlC hearing at which all interested persons were given an opportunlty to be heard on all matters relattve to the location and financ1ng of the Project and the C1ty.S execut10n of the Lease therefor; and WHEREAS, the City Council of the C1ty of Thousand Oaks, as the "appllcable elected representat1ve," approves the execution of the Lease as 1n the publ1C lnterests of the Clty. NOW. THEREFORE, BE IT RESOLVED by the City Councll of the City of Thousand Oaks, as follows: 1. The C1ty Council of the City of Thousand Oaks hereby finds and determ1nes that the foregoing rec1tals are true and correct. 2. The Clty Council of the City of Thousand Oaks hereby approves the executlon of the Lease under the Law for the purpose of provld1ng funds to flnance the acquisltlon, construct1on and development of the ProJect. Res. No. 85-316 . . . 3. This resolution shall tak~ effect immediately. PASSED AND ADOPTED thls 26th day of December. 1985. Alex Fiore, Mayor APPROVED AS TO FORM: H!~r:. M~ Ci ty Attorney APPROVED AS TO ADMINISTRATION: hV~~ Grant R. Brimha;Tl cJ Ci ty Manager PL:mk N4/B I E:~::~ C:~~~~y ~-.~ 1:3 FO~~~JING IS L :- ? _ - - ,- - -- ~ ~ : -=-: = =' ::::;::: - - --........ C=--'--_ _, :., _ _ I __ h~ 0: =-::: _ ". _. .... --= .L':: 0? "'"7~ .... '- _ _ ..J _ .: '_ . ~=;;------/~I8?;k~~ , BY -a41At~y.:!IA;ii{Id~ i ~ r,,"C1'-E it lt~d~~~ ~"- , - IT () 0 Res. No. 85-316 " 1:/ - . . RESOLUTION NO. 85-292 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF THOUSAND OAKS APPROVING~ AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS~ AUTHORIZING AND DIRECTING EXECUTION OF A PURCHASE AGREEMENT, APPROVING A PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO " WHEREAS, the City of Thousand Oaks (the "City"), working together with the Cities of Carpinteria, Delano, Fontana, Kerman, and Santa Monica and the Town of Mammoth Lakes, Callfornia (collectively referred to herein as the "Lessees"), and the California Cities Financing Corporation (the "Corporation"), is proposing to proceed with a Joint lease financing; and WHEREAS, in connection therewith, the Clty proposes to finance certain property described in Exhibit C to the Lease Agreement (as herelnbelow referred to) (the "Projectll) and it is in the public lnterest and for the public beneflt that the city authorize and dlrect executlon of the Lease Agreement and certain other financing documents in connection therewith; and . WHEREAS, pursuant to the City's authorization, Merrl11 Lynch Capital Markets and Stone & Youngberg (the "Underwriters") propose to underwrite the financing and have prepared and presented to the City a form of preliminary officlal statement containing lnformation material to the offering and sale of the Certificates of Partlcipatlon described below (the uPrellminary Official Statementll); and WHEREAS, the documents below specified have been filed with the City, and the members of the City Council, with the aid of its staff, have reviewed said documents: NOW, THEREFORE, IT IS HEREBY ORDERED AND DETERMINED AS FOLLOWS: SECTION 1. The below-enumerated documents be and are hereby approved, and the Mayor, City Manager or Finance Director is hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such officlal, and the Clty Clerk is hereby authorized and directed to attest to such official's signature: . (a) a lease agreement, relating to the Project, between the Corporation, as lessor, and the City, as lessee (the llLease Agreementll)7 so long as the term of the Lease Agreement does not exceed 21 years, so long as the prlncipal amount of the Lease Agreement does not exceed $530,000 and so long as the Lease Payments payable by the City under the Lease Agreement in any twelve-month period do not exceed $65,000; and (b) a trust agreement, by and among the Corporation, the Lessees and Flrst Interstate Bank of California, Los Angeles, Ca1ifornla, as Res. No. 85- 292 . trustee (the "Trustee"). relatlng to the flnancing of the acquisition of the Project. and the execution and delivery of certificates of participation evidencing the proportionate interests of the owners thereof in lease payments to be made by the City under the Lease Agreement and in the lease payments to be made by the other lessees under separate lease agreements (the "Cert ifi cates of Parti ci pat; onll). . SECTION 2. A purchase agreement by and among the Underwriters and the Lessees relating to the purchase by the Underwriters of the Certificates of Participation, be and ;s hereby approved, and the Mayor, City Manager or Finance 01 rector is hereby authorized and directed to execute said agreement, with such changes, insertions and omissions as may be approved by such official, so long as the interest rate with respect to the Certificates of Participation will not produce annual lease payments payable under the Lease Agreement in any twelve-month period in excess of $65,000, so long as the principal amount of the Certificates of Participation attributable to the City will not eceed $530,000 and so long as the Underwriters. d1scount with respect to the Certificates does not exceed 4%. SECTION 3. The Mayor, City Manager, Finance Director, City Clerk and other officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates _ as may be necessary to effect the purposes of this resolution and the lease financing herein authorized including, but not limited to, a site lease, a site and facility lease, an encroachment permit, an easement, a license, or such other document as may be appropriate to transfer to the Corporation a legal interest in the real property upon with the Project includes a real property component, or to transfer to the Corporation a legal interest in such port1ons of the Project that include personal property. SECTION 4. To the best of the City's knowledge, information and belief, the Preliminary Official Statement contains no untrue statement of a material fact with respect to the City or omits to state a materlal fact with respect to the City required to be stated where necessary to make any statement made therein no misleading in the light of the circumstances under which it was made. SECTION 5. The Preliminary Official Statement ;s approved for distribution 1n connection with the offering and sale of the Certificates of Participation. SECTION 6. The Mayor, City Manager or Finance Director is authorized to approve corrections and additions to the Preliminary Officldl Statement by supplement or amendment thereto, or otherwise as appropriate. provided that any such corrections or additions shall be necessary to cause the lnformation contained therein to conform with facts material to the Certificates of Participation, or to the proceedings of the City or such corrections or additions are in form rather than in substance. . SECTION 7. The Mayor, City Manager or Finance Director is authorized and directed to cause the Preliminary Official Statement to be brought into the form of a final official statement (the "Final Official Statementll) and to execute said Final Official Statement, dated as of the date of the sale of the Certificates of Participation, and a statement that the facts contained in the Final Official Statement, and any supplement or amendment thereto (which shall be deemed an or; gi na 1 part thereof for the purpose of such statement) Res. No. 85- 292 '-- ...... r "-- . . . were, at the time of sale of the Certificates of Particlpation, true and correct in all material respects and that the Final Official Statement did not, on the date of sale of the Certificates of Partlc;pation. and does not as of the date of delivery of the Certificates of Participation. contain any untrue statement of a material fact with respect to the City or omit to state material facts with respect to the City required to be stated where necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. The Mayor. City Manager or Finance Director shall take such further actions prior to the signing of the Final Official Statement as are deemed necessary or appropriate to verify the accuracy thereof. ***** PASSED AND ADOPTED THIS 3rd day of December, 1985. " . Attest: 7hftUr-cjj y()~~ ) Narlcy A6iDlllon. City Clerk APPROVED AS TO FORM: r16M- ~~ Mark G. Sellers, City Attorney CITY OF THOUSAND OAKS uL~o -Alex Fidre-, Mayor ' Grant R. Brlmhall ~ 'Q.j~Manger Pc4 CMO: ap Res. No. 85- 292 . . . I..t.K 111" 1l..f\ I J.UI't STATE OF CALIFORNIA ) COUNTY OF VENTURA ) SSe CITY OF THOUSAND OAKS ) /, " "-~ I, NANCY A. DILLON, City Clerk of the City of Thousand Oaks, DO HEREBY CERTIFY that the foregoing is a full, true, and correct copy of Resolution No. 85-292, which was duly and regularly passed and adopted by said City Councll at a regular meeting held December 3, 1985, by the following vote: AYES: Councilmembers Schillo, Laxdal, Schaefer, Horner, and Mayor Fiore NOES: None ABSENT: None IN WITNESS WHEREOF, I have hereunto set my hand and afflxed the officlal seal of the City of Thousand Oaks, California. . '7 ~/.I",r9't. yO dLnJ N~n9Y A. ~illont City Clerk City of thousand Oaks, California ~-;;- '. . .~ - ----...... - - - ~ , . .....~... -....--..... - ---..... __~ ..:r ~ , . :;~-~;;7/P&J L.__ __ ~ _ 0L/ :7 .- ,'">'< - ", ll'- . . . 12/30/85 JHHW:BDQ:GFB Z3189 $2,915,000 CERTIFICATES OF PARTICIPATION CALIFORNIA CITIES FINANCING CORPORATION. 1985 SERIES E Evidencing Proportionate Interests of the Owners Thereof in Lease Payments to be Made by the CITIES OF DELANO. FONTANA, SANTA MONICA AND THOUSAND OAKS to the CALIFORNIA CITIES FINANCING CORPORATION CERTIFICATE OF MAI~ING I. Brian D. Quint, certify as follows: That for and on behalf of the Cities of Delano, Fontana, Santa Monica and Thousand Oaks, and on December 16, 1985. I caused to be mai led a Report of Proposed Debt Issuance relating to the captioned, postage prepaid, to the California Debt Advisory Commission, P.O. Box 1919, Sacramento, California 95809, a copy of which Report is attached hereto. Dated: December 3D, 1985 By ~iJ { Bri . O. Quint Jones H 1 Hill & White. A Professional Law Corporation REPORT OF PROPOSED DEBT ISSUANCE . California Debt Advisory Commission P.O. Bos 1919, Saer~ento, CA 95809 (916)324-2585 Com~letion and timel! submittal or Advisory Commission (CDAC) at the abo~e ~Ith existIn5 California State law. and complete data base. Thank you for your thIS form to the California Debt address will assure your com?lianoe will assist in the maintenance of a coopera.tion. KAME OF ISSUER: ADDRESS OF ISSUER: California Cities Financing Corporation See Exhibit A attached hereto for names and addresses of particlpating c1lf e::. COUNTY : PROPOSED SALE DATE: TYPE OF SALE: Competitive PROPOSED PRINCIPAL TO BE SOLD: $ 3,000,000 TYPE OF TAX-EXFMPT DEBT INSTRDMEN'I' ( ) .No t e Tax anticipation Tax and revenue anticipation Revenue anticipation Bond anticipatIon Grant anticipation December 19. 1985 xx Negotiated ( ) Bond General obligation Limited tax obli~ation Revenue (Public enterprise) Conduit revenue (Private obI i go r ) Special assessment Tax allocation Public lease revenue . ( ) Tax-Exempt Lease ) Commercial Paper (X~ Certificates of Participation ( ) Other (Please specIfy.) IS DEBT FOR RErurIDING? XX No SOURCE(S) OF REPA~ Public enterprise revenues Private obligor payments Bond proceeds Grants Inter60veramental transfers other than irants Otller+ Yes pa r t i a I $ Tax-increment Special assessments Special tax revenues+ Property tax revenues General fund of Issuing jurlsdlotion Xx. + Please sj?ecl fy: .ectlon 8855(g) of the California Government Code requires the Issuer of 'i ;>roj,losed new debt issue of State or local lovernment to live ;lIdtten notice of the proposed sale to the CDAC no later than 10 days prior to the Solie. 5/14/84 ~DAC: Report of Proposed Debt Issuance PURPOSE (S) OF FINA...'CING Cash-flow Single-family housing MuitlCamtly housing+ Hospital Otaer health care facillties+ Airport Ports and marinas Recreation and sports facilities Power ~eneration+ Power transmission Parking Convention center K-12 school Cacilitj College/university facility + Redevelopment +Please specify type/name of facility: BOND COUNSEL: Jones Hall Hlll & White FINANCIAL ADVISOR: None Paie 2 xx Pollution control . Solid waste recovery Cad li ties Equipment Flood control/storm drainage Water supply and dIstribution Wastewater collection and treatment Public transit Bridles and h16hways PUblic building Otner ca~ital Impr~vement3 and public works Commercial development+ Indu5trial development+ Otner+ xx L~ ~ERInlITER: Merrill Lynch Capital Markets (or PORCRASER, If private placement.) . Name or individual (representing XX Bond Counsel, Lead Underwriter) who has campleted tRis form TUFtber information: Brlan D. Quint Name: Firm/ Ale n c y : Jones ha 11 Hi 11 & White Address: 4 Embarcader Center, Suite 1950 ~an ~ranclsco, LA ~4111 Phone: (415) 391-5780 Date of Completion: 12/16/85 Issuer, or and may be contacted for Contact person at issuing juriSdiction, if dffferent from above: Name: See Exhiblt A attached hereto. Ti tl e: Address: Phone: 5/14/84 . . . . 13050-5 EXHIBIT A JHHW:SDQ:rms 12/17/85 ZZl775 CALIFORNIA CITIES FINANCING CORPORATION 1985 SERIES E Mr. Michael Corn Finance Director C,ty of DelaTio 1015 11th Avenue Delano, CA 93215 (805) 725-1315 Mr. Edwin E. Luckemeyer Dlrector of Flnance City of Fontana 8353 Sierra Avenue Fontana, CA 92335 (714) 350-7666 Mr. Mlke DennlS Dlrector of Flnance Clty of Santa Monicd 1685 Mal" Street Santa Monica, CA 90401 (2l3) 458-8281 Mr. Robert Biery City of Thousand Oaks 401 West Hillcrest Drive, Thousand Oaks, CA 91360' (805) 497-8611 Mr. Danlel B. Harrison California Cities Financing Corporation 1400 K Street, Suite 400 Sacramento, CA 95814 (916) 444-5790 . $2,915,000 CERTIFICATES OF PARTICIPATION CALIFORNIA CITIES FINANCING CORPORATION 1985 SERIES E (The C~t~es of Delano, Fontana, Santa Mon~ca, and Thousand Oaks, Cal~forn~a) CERTIFICATE PURCHASE AGREEMENT . This Certificate Purchase Agreement (the "Purchase Agreement,r) ~s made th~s 19th day of December, 1985, by and among Merrill Lynch Cap~tal Markets and Stone & Youngberg as the Underwrlters for the w~thin-descr1bed 1ssue (collect1vely, the "Underwr~ters"), the Clties of Delano, Fontana, Santa Mon~ca, and Thousand Oaks, Cal1forn1a (collect1vely, the "Part~c~pants"), and is acknowledged and approved by the Cal~forn1a Cit1es F~nanc~ng Corporat1on, a nonprof1t publ~c benef~t corporat~on duly orqan1zed and eXlst~nq under the laws of the State of Callforn~a (the 'I CorporatJ. on" ) i and rece~pt hereof is acknowledged by First Interstate Bank of Cal1forn~a, as trustee (the "Trustee") under the Trust Agreement (descr1bed below) by and among various of the PartlcJ.pants, the Corporatlon and the Trustee, dated as of December I, 1985 (the "Trust Agreement'I), pursuant to wh~ch the Certificates descr1bed below are executed and del~vered. Upon acceptance by the part~es at or pr10r to 11:59 o'clock, p.m., Ca11forn~a t1me, on the date hereof, th1S Purchase Agreement shall be ln full force and effect in accordance W1tb ~ts terms and shall be b1nd1ng upon the part~es hereto. 1. Upon the terms and cond1t10ns and upon the bas1s of the representations set forth here~n, the Underwr1ters hereby agree to purchase, and the part1es he~eto hereby agree to cause to be del~vered to the Underwrlters, all (but not less than all) of the $2,915,000 aggregate pr1n=~pal amount of the Certlflcates of Partlc1patlon, Ca11torn~a C~t~es Flnanclng Corporat~on, 1985 Series E (The Cltles of Delano, Fontana, Santa Monica, and Thousand Oaks, Cal~fornla) (the "Cert1flcates"), dated December I, 1985 (the Cert~flcates belng more fully descrlbed in the Offlclal Statement herelnafter descrlbed), each eVldenclng proportlonate lnterests of the owners thereof in the lease payments (the "Lease Payments") to . SWM16-A 1 . . . be pa1d by one or more of the Partlc1pants pursuant to the several Lease Agreements, each dated as of December 1, 1985 (collect1vely, the 11Lease Agreements") by and between each of the Particlpants and the Corporation, at an aggregate purchase price of $2,805,687.50, being 96.25% of the prlnclpal amount of Certlflcates, plus lnterest accrued thereon from December 1, 1985, to the date of the Closlng referred to in Section 5 hereof. The Lease Payments wlll be aS61qned to the Trustee pursuant to the Asslgnment Agreement dated as of December 1, 1985, by and between the Corporation and the Trustee (the "Asslqnment Agreement"). The Certificates shall be as authorized in, and shall be executed, delivered and secured under and pursuant to the Trust Agreement. The Certlficates shall represent principal components of the Lease Payments, shall mature on the dates and in the amounts set forth in Exhibit B hereto, and shall represent interest components of the Lease Payments, W1th lnterest payable from December 1, 1985, at the rates set forth in Exhlbit B hereto, such lnterest to be pald June 1, 1986, and semlannually thereafter on each December 1 and June 1, through and ~nclud~ng December 1, 2005. The Underwr~ters aqree to make a public offer~nq of the Cert~flcates at the ~n1tial offerlnq prlces as set forth in the Offlc~al Statement herelnafter descrlbed, which prices may be changed from tlme to time by, and 1n the sole dlscretlon of, the Underwriters. 2. The Particlpants and the Corporatlon shall dellver or cause to be dellvered to the Underwriters, promptly after thelr acceptance hereof, an executed copy of the Off1clal Statement re1atlng to the Certlficates, substantlally in the form of the Prellmlnary Offlc1al Statement dated December 4, 1985 (the nprel~mlnary Offic~al Statement"), wlth only such chanqes thereln as shall have been accepted by the Underwrlters (the Offlclal Statement dated December 19, 1985, to be dellvered before the Closlnq referred to in Sectlon 5 hereof, 1nclud1nq the cover page and all append1ces thereto, belng hereln referred to as the 1I0fficla1 Statement, II except that l.f the Offlcial Statement shall have been amended between the date hereof and the date of Closing, the term "Officlal Statement" shall refer to the Offlclal Statement as so amended), and approved for distributlon by respectlve resolut~ons of each Part~c~pant and the Corporation. The Corporation and the Part1cipants each authorize the use of copies of the Official Statement, the Trust Agreement, the Lease Agreements, the Asslqnment Agreement [and references to the insurance P011CY to be issued by United SWM16-A 2 . States F~del~ty & Guaranty Company (the "Insurer") secur2nq payments of princ2pal and ~nterest due W2th respect to the Certif~cates (the "POllCY") ln connect2on w~th the publ~c offerlng and sale of the Certlflcates]. The parties hereto hereby ratlfy the pr20r dlstrlbutlon of the Prellm2nary Official Statement by the Underwr1ters. The Trust Agreement and each of the Lease Agreements shall be executed and delivered substant~ally ln the forms heretofore reviewed by the Underwr~ters, w~th only such changes therein as shall be mutually agreed upon by the part1es thereto and the Underwriters. 3. Each Particlpant represents and warrants to the Underwriters that: . (a) Such Partlc1pant is a mun~cipal corporat2on and general law or chartered C2ty duly organized and eXlstlng pursuant to the Const1tut~on and laws of the State of Callforn1a and has all necessary power and author~ty to enter into and perform ~ts duties under 1ts Lease Agreement, the Trust Agreement and this Purchase Agreement, and, when executed and del~vered by the respectlve parties thereto, 1ts Lease Agreement, the Trust Agreement and thlS Purchase Agreement wll1 constitute legal, val~d and blnd~nq obl1gatlons of such Partlc1pant enforceable in accordance Wlth the1r respect~ve terms. (b) The executlon and delivery of th~s Purchase Agreement, such Partlcipant's Lease Agreement and the Trust Agreement, and compllance w~th the varlOUS prov1s1ons thereof, will not conflict with, or const~tute a breach of or default under, such Partlc1pant's dutles under sa~d documents or any mater1al law, adm1n~strat~ve requlat~on, court decree, resolut1on, charter, by-laws or other agreement to wh~ch such Part~c~pant 15 subJect or by Wh1Ch lt is bound. (c) Except as may be required under the secur2ties or blue sky laws of any state, there lS no consent, approval, authorlzatlon or other order of, f1l~ng wlth, or cert1f1catlon by, any regulatory author1ty havlng Jur~sd~ctlon over such Partlclpant requ~red for the consummat~on by such Partic1pant of the other transact10ns contemplated by this Purchase Agreement. (d) There 16 no act1on, su~t, proceed~nq or lnvest~qat~on at law or 1n equ~ty before or by any court . SWMl6-A 3 . or governmental agency or body pend1ng or, to the best knowledge of such Partic1pant, threatened, aga1nst such Participant, nor to the best knowledge of such Part1cipant is there any bas1s therefor, to restra1n or enJ01n the collection of the Lease Payments to be made pursuant to its Lease Agreement or 1n any way contesting or affect1ng the valid1ty of th1S Purchase Agreement, the Trust Agreement, the Assignment Agreement, the Certificates, the Policy or such Part~clpantls Lease Agreement or contest1ng the powers of such Part1c1pant to enter J.nto or perform its obliqatJ.ons under any of the foreqolng. . (e) The informatlon under the headings "Estimated Use of Proceeds," "DescrlptJ.on of the ProJects," "The Partlcipants," "Absence of Li'tJ.gat~on," "Partic~pant Financial Information" and, as appropr1.ate, the head1ng relatlng to such ParticJ.pant contalned in the Prelim1nary Off1c1al Statement was, and 1n the Offlc1al Statement 1S, true and correct in all materlal respects and such J.nformatlon does not contaln any untrue or m1sleadlng statement of a material fact or om1t to state any materJ.al fact necessary to make the s'tatements thereln, 1n the light of the circumstances under Wh1Ch they were made, not misleadinq, except that no Particlpant shall be deemed to have made such representatJ.on concernlng Participants other than itself or concernlng ProJects other than J.ts Project. (f) Each Participant aqrees to cooperate w~th the Underwrit~rs 1.n endeavor~ng to qualify the Cert~ficates for offerlnq and sale under the securltJ.es or blue sky laws of such JurJ.sdict1.ons of the UnJ.ted States as the UnderwrJ.ters may request; provJ.ded, however, that In no event shall any Part~c1.pant be requJ.red to take any actlon whJ.ch would subJect it to general or unllmited serV1.ce of process in any JurJ.sd~ct~on in WhlCh 1t is not now so subject. 4. The Underwr1ters' ob11qatlons under th1S Purchase Aqreement are and shall be subJect to the receJ.pt on or prior to the date of the Off1cial Statement of cop1es of the audlted f1nancJ.al statements for each of the Part1clpants for theJ.r most recently completed f1scal years, together W1th such J.nterim unaud1ted flnanc1al informatlon as may be reasonably requested by the UnderwrJ.ters. . SWM16-A 4 . . 5. At 10:00 o'clock a.m., Cal~fornia tlme, on December 19, 1985, or at such other time, or on such earl~er or later date upon which the parties may mutually agree (the "Closlng"), the Corporatlon wlll deliver or cause to be dellvered to the Underwriters, at the offlces of Jones Hall Hill & White, A Professional Law Corporatlon, Four Embarcadero Center, San Franclsco, Callfornla 94111, or at such other place as the partles may mutually agree upon, the Certiflcates ln definltlve form (all of the Certificates to be lithographed Wlth steel engraved borders), bearlng CUSIP numbers, duly executed and authentlcated by the Trustee, reg~stered ln such names as the Underwrlters shall provlde to the Trustee not less than flve buslness days prlor to the Closlng, together Wlth the other documents mentioned hereln. All expenses 1n relatlon to the prlntlng of CUSIP numbers on said Certificates and the CUSIP Service Bureau charge for the assignment of sald numbers ahall be paid from proceeds of the sale of the Certlflcates. The Underwrlters will accept such de11very and pay the purchase price thereof as set forth 1n Sect10n 1 hereof by cert1fled or offlclal bank check or checks 1n lrnmedlately avallable funds to the order of the Trustee, lD an amount equal to the purchase prlce. The Certiflcates or temporary Certlflcates wlll be made avallable for checklng and packaglng one buslness day prlor to the Clos~ng at an office upon WhlCh the partles may mutually agree. 6. The Underwrlters hereby enter lnto thlS Purchase Agreement in reliance upon the representatlons and warrantles of each of the Partlclpants contalned herein and In rellance upon the representatlons and warranties to be contalned 1n the Qocuments and lnstruments to be del~vered at the Clos1nq and upon the performance by the Corporation and the Partlclpants of thelr respective obllgatlons hereunder, both on the date hereof and as of the date of the Clos~ng. Accord~ngly, the Underwr1ters' obllqatlons under thlS Purchase Agreement to purchase, to accept dellvery of and to pay for the Certlflcates shall be condit1oned upon the performance by the Corporation and the Partic1pants of thelr respectlve obl~gatlons to be performed hereunder and under such documents and lnstruments at or pr10r to the Clos1ng, and shall also be subJect to the followlng addltlona1 condit1ons: {a} the representat10ns and warrant~es of each of the Part1clpants contalned here1n shall be true, complete and correct on the date of the Closlng, as 1f made on and at the Closing; . SWM16-A 5 . (b) at the Clos~ng, the Trust Agreement, the Ass2qnment Agreement, the Lease Agreements and the Off2c1al Statement shall have been executed and del2vered, shall be in full force and effect and anall not have been amended, mod1fied or supplemented except as may have been agreed to 1n writing by the Underwritersi and there shall be in full force and effect such resolut10ns as, 1n the op1n10n of Jones Hall H1ll & Wh1te, A Profess1onal Law Corporat1on, San Franc1sco, Cal1forn1a (flSpec1al Counsel"), shall be necessary 1n connect1on W1th the transactions contemplated hereby; . (c) the Underwriters shall have the right to cancel the1r obl1gatlon to purchase the Certlflcates If between the date hereof and the Closing, (i) legislation shall have been enacted by the Congress of the United States or the legislature of the State of Californla or shall have been reported out of committee of elther body or be pendlnq in comm1ttee of either body, or a deC1Slon shall have been rendered by a court of the Un1ted States or of the State of Callfornla or the Tax Court of the Unlted States, or a ru11ng shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the Unlted States or the Internal Revenue Service or by the Cal1fornia Franchlse Tax Board or by any other State of Ca11fornia agency or department, with respect to federal or Callfornla taxatlon upon revenues or other 1ncome of the general character to be derlved by the Corporatlon or upon interest received on obligat2ons of the general character of the Certificates, which 2n the reasonable Judgment of the Underwr1ters, mater1ally and adversely affects the market for the Cert1flcates, or (11) there shall exist any event wh1ch, 2n the reasonable Judgment of the Underwriters, either (a) makes untrue or 2ncorrect 1n any mater1al respect as of such t2me any statement or 1nformation conta1ned in the Off~c1al Statement or (b) 1S not reflected ~n the Offic2al Statement but should be reflected there1n 1n order to make the statements and ~nformat1on contained there~n not m~slead1ng 1n any material respect, or (i1~) there shall have occurred any outbreak of host11~ties or other nat10nal or 1nternat1onal calam2ty or cr2s1s, the effect of such outbreak, calamlty or cr1S1S on the f2nanc~al markets of the Un1ted States being such as, in the reasonable Judgment of the Under- wr1ters, would make 2t ~mpractlcable for the Underwr~ters . SWM16-A 6 . . to market or enforce contracts for the sale of the Cert~ficates, or (~v) there shall be in force a general suspens~on of trading on the New York Stock Exchange or m~n~mum or max~mum pr~ces for trad~ng shall have Deen f~xed and be in force, or max~mum ranges for pr~ces for secur~ties shall have been requ~red and be 10 force on the New York Stock Exchange, whether by v1rtue of a determ~na- t10n by that Exchange or by order of the Secur~t1es and Exchange Comm~ss~on or any other governmental authority having jur1sd~ct~on, or (v) a general banking moratorium shall have been declared by e~ther federal, Ca11forn1a or New York authorit~es havlng jur~sd1ct~on thereover, or (vi) there shall be any mater1al adverse change in the affairs of any of the Particlpants or the Corporatlon, or (vli) there shall be established any new restr1ct1on on transact10ns 1n securities materially affect1ng the free market for securities (~ncludlng the lmposltion of any limitation on lnterest rates) or the extension of credit by, or the charge to the net capltal requirements of, underwriters established by the New York Stock Exchange, the Securities and Exchange Commlss1on, any other federal agency of the Congress of the Un1ted States, or by Execu- tive Order, or any agency of the State of Cal1fornla having Jur~sd1ctlon thereover, or (Vlli) an adverse event affecting any of the Projects (as def~ned 1n the Off1c~al Statement), the Corporatlon, or any of the Part~c2pants occurs WhlCh, in the reasonable Judgement of the Under- writers, requires or has required a supplement or amendment to the Off1c~al Statement; Cd) at or pr20r to the Clos2nq, the Underwriters shall rece~ve the follow~nq documents, ~n each case satlsfactory in form and substance to the Underwr1ters and Underwr~tersl counsel: (1) the unqual~fled approvlng op~n~on, dated the date of Closing, of Spec1al Counsel, accompanled by a supplementary Op10100 of Special Counsel, dated the date of Closing, substant1ally to the effect that (1) the Purchase Agreement has been duly approved by each of the Part2clpants; (li) the statements contalned 1n the Offic1al Statement 1n the sect10ns thereof ent1tled: liThe Certlficates," IILease Agreements, II "Trust Agreement" and IITax Exemptlonll (1nsofar as such statements purport to summarJ.ze certaln prov1s1ons of the legal documents and the Certificates) present an accurate summary of such prOV1S1onSi and (111) the Cert1flcates are exempt from . SWM16-A 7 . registrat~on pursuant to the Secur~t~es Act of 1933, as amended, and the Trust Agreement ~s exempt from qualif~cat~on as an ~ndenture pursuant to the Trust Indenture Act of 1939, as amended; . (2) the oplnions of the counsel for each of the Partic~pants, dated the date of Clos1ng, to the effect that (1) the Particlpant lS a mun1clpal corporat1on and general law or chartered city, as the case may be, duly orqanlzed and val~dly eX1stlng under the laws of the State of California; (ii) the OfflClal Statement has been duly author~zed, executed and dellvered by the Partlc1pant and the information therein as to the Partic1pant and the Participant's obligations under the Trust Agreement and its Lease Agreement is correct and does not omit any statement which, in such counsel's op1n1on, should be ~ncluded or referred to there1n; (111) the resolut1on of the Part1cipant approving and authoriz1nq the executlon and del~very of the Officlal Statement, the Trust Agreement, 1ts Lease Agreement and approv1ng th~s Purchase Agreement was duly adopted at one or more meetings of the C1ty counc11, town councll or other govern1ng body of the Part~c~pant (the "Govern~ng Body") wh1ch were called and held pursuant to law and Wlth all public notlce requlred by law and at WhlCh a quorum was present and act1ng throughout; (iv) the execut10n and dellvery of the Trust Agreement and its Lease Agreement or the approval of thlS Purchase Agreement, and compllance with the provls1ons thereof, under the clrcumstances contemplated thereby, do not and w1ll not 1n any mater1al respect conflict W1th or const1tute on the part of the Partic1pant a breach of or default under any materlal agreement or other lnstrument to wh1ch the Partic~pant ~s a party or by WhlCh 1t ~s bound or any exist1ng law, regulation, court order or consent decree to wh~ch the Part1c1pant lS subJecti (v) the Trust Agreement, ~ts Lease Agreement and this Purchase Contract have been duly author1zed, executed and del1vered by the Partlcipant, and const~tute legal, va11d and b1nd1ng agreements of the Part1c1pant enforceable 1n accordance wlth the1r respect~ve terms, except as the enforcement thereof may be 11m1ted by bankruptcy, lnsolvency, the appl~cat~on of equltable prlnc1ples where appropr~ate or other laws affect~ng the enforcement of cred~torsf r1ghts generallYi and (V1) no author1zatlon, approval, consent, or other order of the State of Cal1forn1a or any other governmental author1ty or agency w1th~n the State of Cal~forn1a 1S requlred for the va11d . SWM16-A 8 . author~zat1on, execut~on and del~very of the Trust Agreement, ~ts Lease Agreement, the Off~c~al Statement and th~s Purchase Agreement; except that no op~n~on regard~ng the f~nanc~al condition of the Participant shall be rendered by such counsel. The counsel for each Part~c~pant in render~ng such op~n~ons as referred to ~n sections (2)(11) and (~v) hereof, may reasonably rely upon such representations, statements, and where appropr1ate, certif1cates, as may be furnished by offic1als of such Part~c1pant hav~nq respons1b111t1es w~th regard to the activ1t1es referred to in the aforement1oned sect10ns. . (3) the opinion of counsel to the Trustee, dated the date of Closing, to the effect that (1) the Trustee is a banking corporat1on duly orqan1zed and va11dly eX1st1nq under the laws of the State of Cal1forn~a; (ii) the general s1qnature resolution of the Trustee approv1ng and author1z1nq the execution and del1very of certa1n documents by certain off1cers of the Trustee, wh1ch resolut~on authorizes the execut10n and de11very of the Cert~ficates, the Trust Agreement, the Assignment Agreement and the acknowledgement of th1S Purchase Agreement, was duly adopted at meet1ngs of the governing body of the Trustee; (1i~) there is no aet~onl SU1t, proceed1nq or 1nvest1gat1on at law or 1n equ~ty before or by any court, public board or body, pend1ng or, to the best of their knowledge, threatened aga~nst or affectlng the Trustee to restraln or enJo1n the executlon or dellvery of the Certif1cates or the collection of revenues pledged under the Ass1qnment Agreement or the asslqnment of the Lease Payments under the Ass~qnment Agreement, 1n any way eontest1ng or affect1nq any author~ty for the execut10n and delivery of the Cert~fi- cates or the valid~ty of the Certlficates, the Trust Agreement, the ASSlgnment Agreement, the Lease Agreements or thlS Purchase Aqreement, or in any way contest1ng the eXlstence or powers of the Trustee W1th respect to the sale of the Certlficates or the secur1ty therefor whereln an unfavorable decls1on, rul~ng or f~ndlng would adversely affect the transact10ns contemplated by the Trust Agreement, the Ass~qnment Agreement or the Lease Agreements or the validlty of the Certlficates; (1V) the executlon and dellvery of the Certlf1cates, the Ass1gnment Agreement and the Trust Agreement and compliance wlth the prov1s1ons thereof, under the c1rcumstances contemplated therebYI do not and wlll not 1n any material respect confllct Wlth or constltute on the part of the Trustee a . SWM16-A 9 . breach of or default under any agreement or other ~nstrument to Wh1Ch the Trustee 15 a party or by wh~ch 1t is bound or any ex~stinq law, regulation, court order or consent decree to wh1ch the Trustee is subJect; (v) the Trust Aqreement and the Ass~qnment Agreement have been duly author1zed, executed and de11vered by the Trustee and constitute the val~d and binding agreements of the Trustee, enforceable ~n accordance W1th their terms, except as the enforcement thereof may be l1m1ted by bankruptcy, 1nsolvency, or other .laws affectlnq the enforcement of creditors' rights generally; provided that, 10 g1v~ng such opinions, no opinion need be expressed as to the ava1lab1l1ty of equ1table remed1es, if any are sought; and no opin1on need be expressed concern1nq the appl1cat10n of or compliance with federal or state blue sky or secur1ties laws in connection W1th the execut10n and delivery of the Cert1f1cates and the Trust Agreement; . (4) the op1nlon of Buchalter, Nemer, Fields, Chryst1e & Younger, a Profess1onal Corporation, Los Anqeles, Cal1forn1a, counsel for the Underwr1ters, dated the date of C1os1nq, to the effect that (a) the Cert1ficates are exempt from reg1strat1on under the Secur~t1es Act of 1933, as amended, and the Trust Agreement is exempt from qua11fication under the Trust Indenture Act of 1939, as amended; and (b) nothing has come to the1r attent10n Wh1Ch would lead them to belleve that the Off1C1al Statement (excludlnq therefrom the f~nanc~al statements and the statlstlcal data lncluded in the Offlcial Statement, as to which no op1nion need be expressed) contalns an untrue statement of a materlal fact or omits to state a mater1al fact requ1red to be stated therein or necessary to make the statements thereln, in the light of the clrcumstances under WhlCh they were made, not mlsleadinq; (S) a certificate or certlf~cates, dated the date of Closing, signed by the counsel for each of the Particlpants 1n form and substance satlsfactory to the Underwrlters, to the effect that to the best of h1S or her knowledge, as based on and llmited by the representat10ns, statements, and where approprlate, cert1flcates, as may be furn1shed by offlclals of the Part1clpant hav1nq respons~- bi11t1es wlth regard to the follow1ng: (a) no I1tlgatlon is pending or threatened (1) to restraln or enJ01n the payment of Lease Payments pledged under the Trust Agreement, (i1) 1n any way contest1ng or affectlnq the . SWM16-A 10 . val~dlty of the Cert1flcates, such Partic1pant1s Lease Aqreement, thls Purchase Aqreement, the Asslqnment Agreement or the Trust Agreement, or (111) 1n any way contesting the eX1stence or powers of the Partlcipant; and (b) no event affectlnq the Part~clpant has occurred Slnce the date of the Offlclal Statement which either makes untrue or 1ncorrect 1n any material respect as of the date of Clos1ng any statement or lnformat1on concern1ng the Partlclpant contalned in the Offl~lal Statement or 1S not reflected 1n the Offic1al Statement but should be reflected therein 1n order to make the statements and informatlon therein concerning the Partlcipant not mlslead1ng in any mater1al respect; . (6) a certificate of the finance director or slm1lar officlal of each of the Partlc1pants, dated the date of the Closing, substantially to the effect that noth1ng has come to hlS or her attent10n Wh1Ch would lead sald offlclal to belleve that, as to the flnanclal informat1on and statlstlcal data relating to such Part1cipant included 1n the Offlc1al Statement, the materlal contained there1n relat1nq to such Partlclpant conta1ns any untrue statement of materlal fact or omlts to state any materlal fact requlred to be stated thereln or necessary to make the statements therein, in 11ght of the c1rcumstances under WhlCh they were made, not mlslead1nq, sald certlflcate otherwlse being 1n form and substance acceptable to Special Counsel and counsel to the Underwriters; (7) a certificate of an author~zed off1cer of the Corporatlon, dated the date of Closlng, substan- tla11y to the effect that: (a) the Corporatlon lS a nonproflt publiC benefit corporation duly organized and eXlstlnq under the laws of the State of Cal~forn~a, w~th the full power and authority (1) to enter ~nto and perform the Trust Agreement, the Asslgnment Agreement and the Lease Agreements and to approve th1s Purchase Agreement, (11) to cause del1very of the Cert1ficates pursuant to the Trust Aqreement and th~s Purchase Aqreement and (l~l) to carry out and consummate the transactions contemplated by th1S Purchase Agreement, the Trust Agreement, the Ass1qnment Agreement, the Lease Agreements and the Off1c~al Statementi (b) to the best knowledge of the Corporatlon, after reasonable lnvestlgatlon, the execut~on and dellvery of the Trust Agreement, the Lease Agreements, the Assiqnment Agreement, the Certlf1cates and the . SWM16-A 11 . . approval of this Purchase Agreement, and compliance on the Corporat~on's part conta1ned with the provis1ons there1n, w1ll not conflict w~th or const1tute a breach of or default under any law, adm1n1strative requlat1on, Judgment, decree, loan agreement, indenture, bond, note, resolut1on, agreement or other 1nstrument to wh1ch the Corporat1on is a party or is otherw1se subJect, nor w1ll any such execut1on, delivery, adoptlon or compliance result in the creation or 1mpos1tion of any lien, charge or other secur1ty interest or encumbrance of any nature whatsoever upon any of the propert1es or assets of the Corporation under the terms of any such law, adm1n1strative requlat1on, )udqment, decree, loan agreement, indenture, bond, note, resolut1on, agreement or other 1nstrument, except as provided by the Trust Agreement and the Lease Agreements; (c) to the best knowledge of the Corporatlon, there is no action, sU1t, proceeding, inquiry or invest1gatlon, at law or 1n equity, before or by any court, governmental agency, publlC board or body, pend1ng or threatened against the Corporatlon affecting the eXlstence of the Corporation or the t1tles of its officers to thelr respective offlces or 1n any way contest1ng or affecting the val~dlty or enforceab1lity of the Trust Agreement, the Lease Agreements, the Asslgnment Agreement, the Cert1ficates or th1s Purchase Agreement, or contest1ng the powers of the Corporat1on or its author1ty to ~ssue, enter into, adopt or perform its obl1qat~ons under any of the forego1ng, where1n an unfavorable dec1s1on, rulinq or f1nd~nq would materlally and adversely affect the valid1ty or enforceability of the Trust Agreement, the Lease Agreements, the Ass~qnment Agreement, the Cert~f~cates or th~s Purchase Aqreement; and (d) the Corporat1on w11l fUrn1sh such informat1on, execute such ~nstruments and take such other act10n 1n cooperat~on w~th the Underwr~ters as the Underwr~ters may reasonably request ~n order (1) to qualify the Cert~f1cates for offer and sale under the blue sky or other secur1ties laws and requlat10ns of such states and other )urisd~ct1ons of the Un1ted States as the Underwr~ters may des1qnate and (2) to determ1ne the e11g1b~lity of the Cert~f~cates for 1nvestment under the laws of such states and other Jur~sd1ctions, and w1ll use its best efforts to cont~nue such qual1ficat1on in effect so long as required for d1str1bution of the Cert~ficates; prov1ded, however, that ~n no event shall the Corporation be requ1red to take any act~on wh1ch would subJect It to general or unl1m1ted . SWM16-A 12 . service of process 10 aoy )ur1sd1ct1oo 1n which it 1S not now so SubJect. (8) cop1es of the Trust Agreement, the Ass1gnment Agreement and each Lease Agreement, 1n each case duly executed by the part1es thereto; (9) def1n1tive cop1es of the Offic1al Statement, executed on the behalf of the Part1clpants by the des1qnated author1zed representat1ve of each Part1cipant; (10) certified cop1es of the general resolution of the Trustee authorizing the execut10n and delivery of certa10 documents by certa1n off1cers of the Trustee, wh1ch resolut1on author1zes the execut10n and delivery of the Cert1f1cates, the Ass1qnment Agreement and the Trust Aqreement and the acknowledgment of th1S Purchase Agreement; . (ll) cert1fied cop1es of the resolut1on of the Gover01ng Body of each of the Part1c1pants author1z1ng the execut10n and del1very of the Trust Agreement, lts Lease Agreement, the Offic1al Statement and approv1ng th1S Purchase Agreement; (12) coples of the Art1cles of Incorporat1on of the Corporat1on and certlf1ed cop1es of the Corporation.s by-laws and resolut1ons of 1tS Board of D1rectors author1zing the execut10n and del1very of the Trust Agreement, the Lease Agreements, the Ass1qnment Agreement and approv1ng the Off1clal Statement and th1S Purchase Agreement; (13) cop1es of the Policy, executed by the author1zed representat1ve of the Insurer, together W1th evidence sat1sfactory to the Underwr1ters, WhlCh may be 1n the form of an opln10n of counsel to the Insurer, that the POllCY 1S the valld, legal and b1nding obl1gat1oo of the Insurer, enforceable 10 accordance W1th 1ts terms, except to the extent that enforcement thereof may be llm1ted by bankruptcy, reorqan1zat1on, 1nsolvency, morator1um or other laws or equltable prlnclples affect1ng the enforcement of cred1tors. rlqhts generally, sa1d eVldence otherw1se being 1n form and substance acceptable to Spec1al Counsel and to counsel for the Underwr1tersi . SWM16-A 13 . (14) the op~n1on of counsel to the Corporat1on, dated the date of the Clos~nq, as to the due author~zation, execution and delivery by the Corporat1on of the Lease Agreements, the Ass1gnment Agreement and the Trust Agreement, as to the legal, val~d and bind1ng nature thereof and as to the enforceab~l~ty thereof in accordance Wlth the~r terms, except to the extent that enforcement thereof may be l~m~ted by bankruptcy, reorganization, insolvency, morator1um or other laws or equ~table prlnc~ples affecting the enforcement of creditors' rIghts generally, sa1d opin~on otherwise be1ng in form and substance acceptable to Spec~al Counsel and to counsel for the Underwr1ters; . (15) eV1dence sat~sfactory to the Underwriters of various Project invoices and contracts with respect to the ProJects as descr1bed 1n the Off1c~a1 Statement, accompanled by a certificate of an authorized off1cer of the affected Part~cipant to the effect that the copies are true and accurate copies, that the same are 1n full force and effect and prov1de for the acquislt~on and 1nstallatlon of the Projects as descrlbed 1n the Off1c~al Statement at the pr1ces set forth in the Off~c1al Statement; (16) coples of the Blue Sky Survey, dated as of December 17, 1985, prepared by counsel to the Underwr~ters; (17) eVldence (whether wr1tten or telephonlc) sat1sfactory to the Underwriters that the Certiflcates have been rated "AAA" by Standard & Poor's Corporat~on; and (18) such add1t1onal legal op~n10ns, certlf1cates, proceed1ngs, 1nstruments and other documents as the Underwr1ters, Underwr1ters' counselor SpeCIal Counsel may reasonably request to eV1dence comp11ance by the Trustee, the Part~c1pants and the Corporat1on w1th legal requ1rements, the truth and accuracy, as of the t1me of Closing, of the representat10ns of the Part~c~pants and the Corporatlon herelD and 1n the Offic~al Statement and the due performance or satlsfaction by the Trustee, the Partic1pants and the Corporat1on at or prlor to such t~me of all aqreements then to be performed and all cond2tlons then to be sat1sf1ed by the Trustee, the Part1c1pants and the Corporat~on. . SWM16-A 14 . If the Part1c~pants shall be unable to satisfy the cond1tions to the Underwr2terst obl~9at~ons conta2ned lD th~s Purchase Agreement or if the Underwr~terst ob11qat2ons shall be ter.m1nated for any reason permitted herelD, this Purchase Agreement shall term2nate and nelther the Underwr2ters nor the Participants shall have any further obliqat2on hereunder. . 7. All reasonable expenses and costs of the Partic1pants and the Corporation lnc1dent to the performance of 1tS obl~gatlons in connectlon Wlth the execut1on, dellvery and sale of the Certificates to the Underwr1ters, includ~ng the cost of pr1nting of the Cert1f1cates (and full execut10n thereof), the Preliminary Official Statement, the Off~cial Statement and the Blue Sky Survey, in reasonable quantit~es, fees of consultants, fees of rating agencies, CUSIP Servlce Bureau eharges and of Spec1al Counsel, and fees and expenses of the Trustee, the Clty Attorneys and Counsel for the Corporatlon, shall be pald by the Part2cipants. All expenses to be pa1d by the Part1c1pants pursuant to th1S Purchase Agreement may be pa1d from Cert1flcate proceeds to the extent permltted by the Trust Agreement. Except as lndlcated above, all other out-of-pocket expenses of the Underwriters, lncludlnq travel~n9 and other expenses and the fees and expenses of the~r counsel shall be pald by the Underwriters. 8. Any not1ce or other commun1cation to be glven to the Underwriters may be given by de11vering the same 1n writ~ng to Merr1ll Lynch Cap~tal Markets, 400 South Hope Street, SUlte 2020, Los Angeles, Ca11fornla 90071, Attn: John F1tzgerald, Manag1ng D1rector. Notlce to the other partles hereto shall be as shown on Exh1b1t A attached hereto and made a part hereof by reference. The approval of the Underwr1ters when requlred hereunder or the determ1nat~on of the1r sat1sfact10n as to any document referred to here2n shall be In wr1ting s1gned on behalf of Merr1l1 Lynch Capital Markets and del~vered to you. 9. The Underwr1ters, Merr1l1 Lynch Cap1tal Markets and Stone & Youngberg, agree between themselves W1th respect to the Cert2f1cates and th1S Purchase Agreement as follows: (a) Stone & Youngberg des~qnate Merrl11 Lynch Capltal Markets to act as thelr agents 1n fact In consummatlng the transact~ons contemplated by the Purchase Agreement, ~n accordance w~th the terms and condltlons thereof. . SWMl6-A 15 . (b) The Certif1cates may be init1ally offered when the Underwr1ters and the Part1cipants shall have executed and the Corporation shall have approved th1s Purchase Agreement. (c) Merrill Lynch Capital Markets may allow a dealer concession on sales to (i) securities dealers, (ii) dealer banks or divisions or departments of banks, (iii) foreign banks or broker-dealers which (a) are registered as broker-dealers under the Secur1ties Exchange Act of 1934 and agree in making sales of the Certificates in the United States of America that they will comply Wlth the rules of the Municipal Securities RUlemakinq Board, or (2) if not 80 registered, agree that they will not sell any Certificates in the United States of America, its territories or posseSS10ns, or to persons who are c1tizens thereof or residents therein, and in mak~ng other sales agree to comply with the Rules of Fair Practice of the National Association of Securities Dealers. (d) Merrill Lynch Capital Markets may change the public offering price and, in general, or 1n such specif1c cases as it may determine, any concession, commissions, allowances or reallowances. . (e) Merrill Lynch Capital Markets agrees to mail or deliver an Offic~al Statement to each person who purchases Certificates W1th or prior to final wr1tten confir.mat1on of the sale to such person. (f) Each of the Underwriters represents to the other that it is registered as a broker-dealer or a mun1c1pal secur1ties dealer under the Seeur1ties Exchanqe Act of 1934. (g) Neither of the Underwriters shall be liable to the other with respect to (i) the issue, form, qenuineness, validity, leqal1ty, enforceability or value of, or title to, the Certiflcates, (~i) the va1ldity of any 1nstrument under or pursuant to which the Cert1ficates may be issued, (i11) any representations 1n the Purchase Agreement, (iv) the accuracy or completeness of the Pre11minary Official Statement or the Offic1al Statement, any memorandum, brochure or agreement, or any statements, reports or letters of others in connect1on w~th the Certificates, (v) the delivery of the Certificates or the performance by 81ther of the Partic1pants or others of any . SWM16-A 16 . agreement on 1ts or the1r part, or (V1) the qual~f1cat1on or registrat10n of the Certlf1cates for sale, or the leqa11ty of the Cert1ficates for investment under the laws of any )ur~sdict1on. Ne1ther Underwriter shall be 11able to the other, nor shall elther (except for such llab111ty as it may have as an underwriter) be 11able under any obligat10ns, elther express or imp11ed, WhlCh are not hereln expressly assumed. 10. This Purchase Agreement lS made solely for the benefit of the Trustee, the Part1clpants, the Corporatlon and the Underwriters (includlng the successors or ass1gns of the Underwrlters) and no other persons, partnershlp, aSsoclat1on or corporatlon shall acqulre or have any rlght hereunder or by vlrtue hereof. All covenants and representatlons of the Partic1pants ln this Purchase Agreement shall remain operat1ve and 1n full force and effect regardless of any lnvest1gat10n made by or on behalf of the Underwrlters and shall surv1ve the de11very of and payment for the Cert1ficates. 11. Th1s Purchase Agreement shall be governed by the laws of the State of Callfornia app11cable to contracts made and performed in such State. . 12. Th1S Purchase Agreement may be executed in several counterparts, each of wh1ch shall be an orlg1nal and all of Wh1Ch shall constltute but one and the same lnstrument. 7 STONE & YOUNGBERG By: CITY OF DELANO By: Flnance D1rectorjClty Treasurer . SWM16-A 17 ~ ",..... agreement on 1t6 or their part, or (V1} the qual1f1cat1on or reglstrat10n of the Cert1ficates for sale, or the legality of the Cert1f1cates for 1nvestment under the laws of any jurisdict1on. Ne1ther Underwr1ter shall be 11able to the other, nor shall e2ther (except for such l1ab111ty as it may have as an underwr1ter) be 12able under any obliqat1ons, either express or 2mp11ed, wh1ch are not here1n expressly assumed. 10. Th1S Purchase Agreement 16 made solely for the benef1t of the Trustee, the Part1cipants, the Corporat1on and the Underwriters (includ1nq the successors or ass1qns of the Underwr1ters) and no other persons, partnership, aSSOc1at1on or corporation shall acqu1re or have any rlqht hereunder or by v1rtue hereof. All covenants and representat20ns of the Part1cipants in th1s Purchase Agreement shall remain operat1ve and in full force and effect regardless of any invest2qat10n made by or on behalf of the Underwr1ters and shall surv1ve the delivery of and payment for the Certificates. 11. Th1s Purchase Agreement shall be governed by the laws of the State of Cal~forn1a appllcable to contracts made and performed ~n such State. . 12. Th1s Purchase Agreement may be executed 1n several counterparts, each of Wh1Ch shall be an or1g1nal and all of Wh1Ch shall const1tute but one and the same 2nstrument. MERRILL LYNCH CAP I TAL MARKETS By: STONE &~O _BERG \. ~ \.rr BY=~ '(:Ir.~~/L-~ ~" ,~ ~ crTY OF DELANO By: F1nance D1rector/C1ty Treasurer . SWM16-A 17 . agreement on ~ts or the~r part, or (v~) the qual~f~cat~on or reg1strat~on of the Certificates for sale, or the legality of the Certificates for investment under the laws of any jur1sdict1on. Neither Underwr~ter shall be l~able to the otherl nor shall e1ther (except for such 1~ab~11ty as it may have as an underwr~ter) be l1able under any obligat~ons, e1ther express or implied, wh1ch are not here1n expressly assumed. 10. This Purchase Agreement 15 made solely for the benefit of the Trustee, the Part1c~pantsl the Corporat~on and the Underwriters (~ncludinq the successors or ass1gns of the Underwrlters) and no other persons, partnership, aSSOc2atlon or corporation shall acqu1re or have any r1ght hereunder or by v~rtue hereof. All covenants and representations of the Part1c1pants 10 this Purchase Agreement shall rema1n operative and 1n full force and effect regardless of any invest1gat2on made by or on behalf of the Underwr~ters and shall surv1ve the del~very of and payment for the Cert1f1cates. 11. This Purchase Agreement shall be governed by the laws of the State of Cal~forn1a appl1cable to contracts made and performed 1n such State. . 12. This Purchase Agreement may be executed ln several counterparts, each of Wh1Ch shall be an or1g1nal and all of wh~ch shall constltute but one and the same 1nstrument. MERRI LL LYNCH CAP I TAL MARKETS By: STONE & YOUNGBERG By: CITY OF DELANO By: f)j~L/P~ F1nance D1rectorjC1ty Treasurer . SWM16-A 17 ..... ,.,. CITY OF ~ANA -/ fi ~Lf~~ D1-rector of finance / By: C!TY OF SANTA MONICA By: CJ.ty Manager CITY OF THOUSAND OAKS By: Mayor ReceJ.pt of th15 Purchase Agreement J.s acknowledged: FIRST !NTERSTATE BANK OF CALIFORNIA, as Trustee . By: Trust Off1cer Approved: CALIFORNIA CITIES FINANCING CORPORATION By: PresJ.dent . SWM16-A 18 . Rece1pt of ~s Purchase Agreement lS acknowledged: CITY OF FONTANA By: D1rector of E'1nance CITY OF SANTA MONIC^ .,.. .' ;- L-C- By: ~ \.J-4../ .... C1.ty M~nager CITY OF THOUSAND OAKS By: Mayor FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee . By: Trust Off1cer Approved: CALIFORNIA CITIES FINANCING CORPORATION By: Pres1dent . SWM16-A 18 . Receipt of this Purchase Agreement 1S acknowledged: CITY OF FONTANA By: D1rector of F1nance CITY OF SANTA MONICA By: Clty Manager CITY OF ~s~s By: n.. 01# R""ayor r ~ t...7'" - - - FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee . By: Trust Off1cer Approved: CALIFORNIA CITIES FINANCING CORPORATION By: Pres1dent . SWM16-A 18 . Rece~pt of this Purchase Agreement 1S acknowledged: CITY OF FONTANA By: D1rector of Finance CITY OF SANTA MONICA By: City Manager CITY OF !'HOUSAND OAKS By: Mayor FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee . By: \.!?L((~'7;-- TrustOffJ.cer - Approved: CALIFORNIA CITIES FINANCING CORPORATION By: Pres~dent . SWM16-A 18 - ~ CITY OF FONTANA By: D1rector of F1nance crTY OE' SANTA MONICA By: Clty Manager CITY OF THOUSAND OAKS By: Mayor Rece1pt of this Purchase Agreement ~s acknowledged: FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee . By: Trust Officer Approved: FINANCING By: (/ . SWM16-A 18 . EXHIBIT A NOTICES Mr. Daniel B. Harr1son Executive Secretary Cal~fornia C~ties Financinq Corporation Suite 400 1400 K Street Sacramento, California 95814 Mr. Allan R. Coates, Jr. City Manager City of Carpinteria 5775 Carpinteria Avenue Carpinteria, California 93013 Mr. Michael Corn Finance Director City of Delano 1015 11th Avenue Delano, California 93215 . Mr. Edw~n E. Luckemeyer Director of Finance City of Fontana 8353 Sierra Fontana, Cal1forn1a 92335 Mr. Daniel F. Ayala C1ty Administrator C1 ty of Kerman 850 South Madera Avenue Kerman, California 93630 Mr. Mike Denn1S City ControllerjDirector of Finance City of Santa Monica 1685 Ma1n Street Santa Monica, California 90401 Mr. Robert Biery F1nance Director/City Treasurer City of Thousand Oaks 401 w. Hillcrest Drive Thousand Oaks, California 91360 . Mr. Ray Windsor Town Manager The Town of Mammoth Lake 437 Old Mammoth Road, SU1te R Mammoth Lake, Ca11fornia 93546 SWM16-A 19 . ~~IT! ~ 1986 1987 1988 1989 1990 1.99l. 1992. 1993 1994 1995 1996 1991 1998 1999 2000 2001 2002 2003 2004 1.005 . 'to'tAL: SWMl6-A E1UlIBl'! B PRINCIPAL ~ $ 405,000,00 435,000.00 465,000.00 490,000.00 525,000.00 15,000.00 85,000.00 20,000.00 2.0,000.00 25,000.00 25,000.00 25,000.00 30,000.00 30,000.00 35,000.00 35,000.00 40,000.00 45,000.00 SO,OOO.OO 55,000.00 $2,915,000.00 20 IN't'EttES'! ~ 5.15 % 6.25 6.50 6.75 ,.00 7.25 .,.50 7.75 a.OO 8.20 8.40 8.50 8.60 8.70 8.75 8.75 8.80 8.ao 8.85 a.8S . . . 13050-5 JHHW:BDQ:rms 11/19/85 12/17 /85 :mds 12/22/85 :rms 12/24/85 :rms 12/27/85 Z1658 TRUST AGREEMENT dated as of December 1, 1985 among FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee, the Cities of Delano, Fontana, Santa Monica and Thousand Oaks and the California Cities Financing Corporation CALIFORNIA CITIES FINANCING CORPORATION POOLED FIHANCIHG, 1985 SERIES E . . . TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 1.1. Definitions...................................................... 2 1.2. Rules of Construction............................................ 2 1.. 3 .. Terms and Cond it ions. .. .. .. .. . ... .. . . .. .,. .. . .. . . . . .. . .II . . .. . II .. . .. .. . . . .. .. .. .. .. . .. .. .. . 2 ARTICLE II APPOINTMENT Of TRUSTEE; DEPOSIT Of MONIES; ESTABLISHMENT OF FUNDS AND OF ACCOUNTS 2.1. Appointment of Trustee........................................... 3 2.2. Acceptance of Appointment........................................ 3 2 .. 3 .. Depo sit of Mon i e s . .. . . . . . .. ., . .. .. . . . .. . . . .. .. . . . . . . . .. . . .. . . .. . . . .. .. ... ... .. . .. .. .. .. 3 2.4. Project Trust Fund.......~.................a.................~... 3 2.5. Establishment of Acquisition Account............................. 3 2.6. Establishment of Certificate Payment Account..................... 4 2.7. Establishment Of Lease Payment Account; Capitalized Interest Subaccount............................... 4 2.8. Establishment of Costs of Issuance Account....................... 4 2.9. Establishment of Insurance and Condemnation Fund................. 5 2.10. Establishment of the Reserve Fund; Reserve Accounts.............. 5 ARTICLE III THE CERTIFICATES OF PARTICIPATION 3.1. Delivery of Certificates......................................... 6 3~2. Date of Certificates............................................. 6 3.3. Payment of Prlncipal and Interest with Respect to Cert if; Cd tes. ... . . .. . . . . . . . . . . ... . . . . . . . .. . . . ... . . . . .. .. . . . . . . . . .. . ... . . 6 3.. 4... Opt; ana 1 Redempt ion. . . . . . . . . . . . . . . ... . ... . . . ... . .- . . ... . III- . III . . .. . ... *' . . ... . ... . . ... . . 6 3.5. Extraordinary Mandatory Redemption................................ 7 -i- ~ ~ . . Exhibit A - Definitions Exhibit B - Form of Certificate Exhibit C - Trust Terms and Conditions Article I - Recitals and Representations Article II - Deflnitions and Rules of Construction Article IIr - Administration of Funds and Accounts Investments Article IV - The Trustee Article V - Terms and Provisions of the Certificates Article VI - Covenants; llmitation of Liability; Assignment Artlcle VII - Amendment; Defeasance; Administrative Provisions Exhibit 0 - Addresses for Notice Purposes -ii- .-.. ~ . . TRUST AGREEMENT THIS TRUST AGREEMENT, made and entered into as of December 1, 1985, by and among First Interstate Bank. of California, a state banking corporation having a corporate trust office in the City of Los Angeles, Cal1fornla (the "Trustee"); the Cities of Delano, Fontana, Santa Monica and Thousand Oaks, California (collectively, the "Lessees") t and the California Cities Financing Corporatlon, a California nonprofit public benefit corporatlon (the "Corporation"); WIT N E SSE T H: ---------- In consideration of the mutual covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows: ..... ~ . . ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 1.1. Definitions. The terms used in this Trust Agreement WhlCh are capitalized herein shall, for the purposes of thlS Trust Agreement, have the meanings ascribed to them in Exhibit A attached to this Trust Agreement and by this reference incorporated herein, unless the context clearly requires some other meaning. 1.2. Rules of Construction. Words of the rnascullne gender shall be deemed and construed to include correlative words of the feminine and neuter genders. Unless the context otherwise indicates~ words importing the singular number shall include the plural number and Vlee versa, and words importing persons shall include corporations and associations, lncluding pUblic bodies, as well as natural persons. 1.3. Terms and Conditions. This Trust Agreement 1S subject to the Trust Terms and Conditions attached hereto as Exhibit C, all of the pro....isions of which are herein incorporated, as though fully set forth herein. The terms "hereby", II hereof II , II hereto II , Ilherei nit, uhereunderu and any similar terms, as used in this agreement~ refer to this agreement. -2- . . . ARTICLE II APPOINTMENT OF TRUSTEE; DEPOSIT OF MONIES; ESTABLISHMENT OF FUNDS AND OF ACCOUNTS 2.1. Appointment of Trustee. The Corporation and the Lessees agree to appoint the Trustee to receive, hold, invest and disburse the monies to be paid to it for the Certificates and pursuant to the Lease Agreements for credit to the various funds and accounts established by this Trust Agreement; to execute and deliver the Certificates; and to apply and disburse the lease Payments received from or an behalf of the Lessees to the Owners of Certificates; and to perform certain other functions; all as hereinafter provided and sUbject to the terms and conditions of thls Trust Agreement. 2.2. Acceptance of Appointment. In consideration of the compensation hereinafter provided for, the Trustee accepts the appointment above referred to, subject to the terms and conditions of this agreement. 2.3. Deposit of Monies. The Corporation shall cause to be deposited with the Trustee on the Closing Date an amount equal to $2,821,786.53. 2.4. Project Trust Fund. There is hereby estab 1 i shed wi th the Trustee a special trust fund to be designated the Ileal iforma Cities Financing Corporation Projects Trust Fund, Pooled Financing V" (herein referred to as the nprojects Trust Fundn). The Trustee shall keep such fund as a trust fund separate and apart from all other funds and accounts held by it. Within the Projects Trust Fund, there are hereby established the Acquisition Accounts, more particularly described in Section 2.5 hereof, the Certificate Payment Account, more partlcularly described in Section 2.6 hereof, the Lease Payment Accounts, more particularly described in Section 2.7 hereof, and the Costs of Issuance Account, more partiCUlarly described in Section 2.8 hereof. 2.5. Establishment of Acquisition Accounts. (a) Within the Projects Trust Fund, there are hereby established Acquisition Accounts for each of the Lessees, and the Trustee shall keep 3uch accounts separate and apart from all other funds and account held by it, and shall administer such accounts as provided in Section 301 of the Trust Terms and Condltlons. (b) The Trustee shall, on the Closing Date, deposit to the Acquisltion Accounts of the Lessees listed below, the amount listed opposite the name of such Lessee: -3- . . . Lessee Amount Deposited to Acquisition Account Delano Fontana Santa Monica Thousand Oaks $ 170,463.21 1,369,218.16 282,582.88 373,070.58 2.6. Establishment of Certificate ,Payment Account. W,thin the Projects Trust Fund, there is hereby established a separate account to be designated the IICertificate Payment AccounLII The Trustee shall maintain the Certificate Payment Account until the Lease Payments are paid in full pursuant to the terms of the Lease Agreements. The Trustee shall administer the Certificate Payment Account as provided in Section 302 of the Trust Tenms and Conditions. 2.7. Estab 1 i shment of Lease Payment Accounts; Capitalized Interest $ubaccounts. (a) Within the Projects Trust Fund there are hereby established Lease Payment Accounts for each Lessee des 1 gnated as the II Lease Payment Accountll (inserting therein the name of each Lessee with respect to its lease Payment Account) (collectively referred to herein as the IILease Payment Accountsll). The Trustee shall keep such accounts separate and apart from all other funds~ and accounts held by it, and shall administer such accounts as provided in Section 303 of the Trust Terms and Conditions. (b) Within each of the Lease Payment Accounts, there is hereby established a Capitalized Interest Subaccount. All references herein and in the Lease Agreement to amounts in a Lesseel s Lease Payment Account are deemed to include amounts in such Lessee's Capitallzed Interest Subaccount. (c) The Trustee shall, on the Closing Date, deposit to the Capitalized Interest Subaccounts of the Lessees listed below, the amounts specified below, representing the Lease Payment obligat,on of the 11sted lessee from the date hereof to the date 11sted opposite the name of such Lessee: Amount of Deposit to Lessee's Capitalized Interest Subaccount Name of Lessee Date to Ylhich Interest 's Capitalized Delano Fontana Santa Monica Thousand Oaks $ 3,484.38 58,368.75 6,275.00 47,747.92 March 1, 1986 June 1, 1986 March I, 1986 January 1, 1987 2.8. Establishment of Costs of Issuance Account. Within the Projects Trust Fund there ;s hereby established a separate account to be designated IICosts of Issuance Account.1I The Trustee shall, on the Closing Date, deposit $152,583.15 in the Costs of Issuance Account, and shall maintain such account until all Costs of Issuance are paid 1n full. -4- ..... ...... . . The Trustee shall administer the Costs of Issuance Account as specified in Section 304 of the Trust Te~ms and Conditions. 2.9. Establishment of Insurance and Condemnation Fund. There is hereby established a separate fund to be designated the IIInsurance and Condemnation Fund.u which shall be maintained and applied pursuant to Section 305 of the Trust Terms and Conditions. 2.10. Establishment of the Reserve fund; Reserve Accounts. (a) There is hereby estab 1 i shed a separate fund designated as the uReserve Fundu. The Trustee shall keep such Fund separate and apart from all other funds and accounts held by it; and shall admlnister such fund as provided in Section 306 of the Trust Terms and Conditions. (b) There shall be deposited in the Reserve Fund from the monies deposited with the Trustee pursuant to Section 2.3 hereof. an amount which in the aggregate will be equal to $357~992.50. Such monies shall be held in trust as reserves for the payment when due of the lease Payments to be paid by the respective Lessees. and shall be applied only as hereinafter provided. (e) Within the Reserve Fund there are hereby established separate Reserve Accounts for each of the Lessees designated as the " Reserve Accountll (inserting therein the name of each Lessee with respect to its Reserve Account) (collectively referred to herein as the "Reserve Accounts"). The Trustee shall keep such accounts separate and apart fram all other funds and accounts held by ft. and shall administer such accounts as provided in Section 306 of the Trust Terms and Conditions. Cd) The Trustee shall. on the Closing Date, deposit to the Reserve Account of each of the lessees listed below, the amounts specified below. representing the "Reserve Requirementn of each such Lessee: lessee Amount Deposited to Reserve Account Delano Fontana Santa Monica Thousand Oaks $ 26,875.00 225,000.00 46~250.00 59,867.50 -5- . ARTICLE I I I THE CERTIFICATES OF PARTICIPATION 3.1. Delivery of Certificates. The Trustee is hereby directed to execute and deliver, to the original purchaser thereof Certificates in an aggregate pri nci pa 1 amount of two mi 11 ion ni ne hundred fi fteen thousand dollars ($2,915,000) evidencing proportionate interests in the Lease Payments to be paid by one or more of the Lessees under the Lease Agreements. 3.2. Date of Certificates. Each Certificate shall be dated as of December 1, 1985. The owners of the Certificates shall be entitled to receive interest from the dates provided in the form of Certificate set forth in Exhibit B hereto. 3.3. Payment of Principal and lnterest With Respect to Certificates. (a) Dates and Principal Amounts of Maturing Certificates. The Certificates shall mature on December 1 in the years and in the principal amounts and interest with respect thereto shall be computed at the rates set forth below: Principal Interest Principal Interest Year Amount Rate Year Amount Rate 1986 $405,000 5.75% 1996 $25,000 8.40% 1987 435,000 6.25 1997 25,000 8.50 . 1988 465,000 6.50 1998 30,000 8.60 1989 490,000 6.75 1999 30,000 8.70 1990 525,000 7.00 2000 35,000 8.75 1991 75,000 7.25 2001 35,000 8.75 1992 85,000 7.50 2002 40,000 8.80 1993 20,000 7.75 2003 45,000 8.80 1994 20,000 8.00 2004 50,000 8.85 1995 25,000 8.20 2005 55,000 8.B5 (b) Payments With Respect to Cert,ficates Equal to Total Lease ~ayments . The total principal and interest due with respect to all Certlficates shall not exceed the total Lease Payments due under the Lease Agreements. (c) Proportionate Amount of Each Lessee I s Payments. The Certificates represent interests of the Owners thereof in Lease Payments to be made by the Lessees. The total amount of each payment of principal or interest made to the Owners af the Certifi cates maturing in a given year is compri sed af interests in Lease Payments from the several Lessees in the percentages listed opposite the maturity of such Certiflcates, as set forth below: . -6- Lessee . Year Delano Fontana Santa Monica Thousand Oaks Total 1986 8.92% 72.21% 11. 59% 7 . 29% 100% 1987 8.44 70.86 11.04 9.66 100 1988 8.00 71.19 11.34 9.46 100 1989 8.46 71. 25 10.91 9.38 100 1990 8.76 70.92 11.14 9.19 100 1991 55.68 44.32 100 1992 54.21 45.79 100 1993 100.00 100 1994 100.00 100 1995 100.00 100 1996 100.00 100 1997 100.00 100 1998 100.00 100 1999 100.00 100 2000 100.00 100 2001 100.00 100 2002 100.00 100 2003 100.00 100 2004 100.00 100 2005 100.00 100 . 3.4. Optional Redemption. The Certificates maturing on or after December 1, 1996, are subject to redemption in whole or in part (but not 1n an amount of less than $20,000) on any Payment Date on or after December 1, 1995, from moneys deposited in the Lease Payment Account from moneys available therefor as a result of the exercise by a Lessee of its option to purchase its Project or to prepay its lease Payments, as provided in the Lessee I s Lease Agreement, at the pri nc i pa 1 amount thereof, together wi th a premium set forth below (expressed as a percentage of the principal amount of Certificates to be redeemed), and accrued interest to the date flXed for redemption: Redemption Date Premium December I. 1995 and June 1, 1996..............2 % December I. 1996 and June 1, 1997..............1-1/2 December 1, 1997 and June I. 1998..............1 December I. 1998 and June 1, 1999..............1/2 December I. 1999 and each June 1 and December 1 thereafter....................O 3.5 Mandatory Redemption. The Certificates are subject to mandatory redemptlon prior to maturity in the amounts and to the extent described in Sections 512(a) and 512(b) of the Trust Terms and Conditions. . -7- ~ ~ . . IN WITNESS WHEREOF, the parties have executed this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. (5 E A l) Attest: (5 E A L) Attest: (5 E A L) Attest: (5 E A L) Attest: FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee ~W~- By: Vice President By: L{! L!2ahntl1JA1Jt- Trust Officer CALIfORNIA CITIES FINANCING CORPORATION By: Secretary President CITY OF DELANO By: City Clerk. Mayor CITY OF FONTANA By: City Clerk Mayor CITY OF SANTA MONICA By: City Clerk Mayor -8- . IN WITNESS WHEREOF, the parties have executed this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee By: Vice President By: Trust Officer CALIFORNIA CITIES FINANCING CORPORATION (5 E A l) Attest: &~~ ';'1cretary By:,-QA~lIU -::> . ~pf-eert C!TV OF DE LANO (5 E A l) . Attest: By: City Clerk Mayor CITY OF FONTANA (5 E A l) Attest: By: City Clerk Mayor CITY OF SANTA MONICA (S E A l) Attest: By: City Clerk Mayor - ~ -8- ..... IN WITNESS WHEREOF, the parties have executed this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. ~ FIRST INTERSTATE BANK Of CALIFORNIA, as Trustee By: Vice President By: Trust Officer CALIFORNIA CITIES FINANCING CORPORATION ($ E A L) Attest: By: Secretary President CITY OF DELANO . ~~~J.J V~ l-....- By: ." Mayor CITY OF FONT ANA (S E A L) Attest: By: City Clerk Mayor CITY OF SANTA MONICA (5 E A L) Attest: By: City Clerk Mayor . -8- . IN WITNESS WHEREOF, the parties have executed this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. (5 E A L) Attest: Secretary (S E A L) . Attest: City Clerk {S E A L} Attest: () --... /' r ---P" fJx.t." f II )1/) l . r 1,__II(j)f't;'-.?(;[/tLJ. /J~f~j!u (2) " Deputy City Cle.rt::> .....~ (S E A l) Attest: City Clerk . fIRST INTERSTATE BANK OF CALIFORNIA, as Trustee By: By: Vice President Trust Officer CALIFORNIA CITIES FINANCING CORPORATION By: CITY OF DELANO By: , CITY OF FONTANA President Mayor CITY OF SANTA MONICA By: -8- Mayor . IN WITNESS WHEREOF, the parties have executed this Trust Agreement by their officers thereunto duly authorized as of the date and year first written above. FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee By: Vice President By: Trust Offlcer CALIFORNIA CITIES FINANCING CORPORATION ($ E A L) Attest: . By: ) Secretary - .~ President CITY OF DELANO (5 E A L) . Attest: By: City Clerk Mayor CITY Of FONT AHA (5 E A L) Attest: By: City Clerk Mayor CITY OF SANTA MONICA (5 E A l) Attest: ~ C4-.~ / /-t. ~4k< City Clerk . By: ~~~1__ . C~ty Manager . -8- . . . CITY OF THOUSAND OAKS (S E A L) At;.;St: ~~~d~;;JtM M~itY Clerk /l/1_~ By: L~ ~ r-~' -Mayor- -9- . . . 13050-5 JHHW:BDQ:rms 11/19/85 12117 /85 :mds 12/22/85 :rms 12/24/85 12/27/85 FINAL Z1639 EXHIBIT A DEFINITlONS Acquisition Accounts. The term "Acquisition Accounts" means the accounts of that name establlshed under. and held by the Trustee pursuant to Section 2.5 of the Trust Agreement. Acquisition Costs. The term "Acquisition CostsU with respect to each Project--means the contract price paid or to be paid to the Contractors therefor upon acquisition. construction or delivery of any portion of such Project and related equipment, in accordance with the purchase order or contract therefor. Acquisition Costs include the costs of site preparation necessary for the installation of the ProJect. Acquisition Costs also include administrative, engineering. legal. financial. title insurance and other costs incurred by the Lessees. the Corporation and the Contractors in connectlOn with the acquisition. delivery and installation by the Corporation of the Projects. ~.9!"eements. The term "Agreements" means, collectively, the Lease Agreement and the Trust Agreement. Arbitrage Consultant. The term "Arbitrage Consultant" means a person or firm with knowledge of or experience in advlsing with respect to the provisions of Section l03{c) of the Code. selected by Thousand Oaks in its sole judgment and discretion, to consult with. advise and assist the Trustee and Thousand Oaks as to matters relating to Section 103{c) of the Code. Assignment Agreement. The term "Assignment Agreement II means that certaln Assignment Agreementt dated as of December 1. 1985. by and between the Corporation and the Trustee. Authorized Officer. The term "Authorized Officer." when used with respect to the Corporation, means the President. Vice Presidentt Financial Officer or Secretary of the Corporation or any other officer of the Corporation designated by the Corporation as an Authorized Officer for purposes of the Agreements. The term 11 Authori zed Off 1 cer, II when used with respect to the Lessees. means the Lessee Representative specified in the Les see I s Lease Agreement. The term II Authori zed Off i cer. II when used with respect to the Trustee. means any Vice Presldent, any Corporate Trust Officert any Trust Officer, any Assistant Trust Officer or any other officer of the Trustee designated by the Trustee as an Authorized Officer for purposes of the Agreements. Exh,bit A Page 1 . . . BUSlness Day. The term "Business Dayll means any day of the year other than a Saturday, a Sunday, a day on whi ch the New York Stock Exchange is closed or any day on which the Trustee is not open for business. Certiflcate Payment Account. The term "Certificate Payment Account" means the account by that name established under, and held by the Trustee pursuant to, Section 2.6 of the Trust Agreement. Certificates of Completion. The term "Certificates of Completion" or IlCertlficate of Completionll means the certificate of an Authorized Officer of a lessee certifying that its Project has been constructed, acquired, installed and accepted by that Lessee, and that all Acquisition Costs for that lessee1s Project have been paid. Certlficates. The terms "Certificatesll or "Certificates of Participation" mean the certificates of participation executed and del1vered by the Trustee pursuant to the Trust Agreement. Closing Date. The term 1ICloS1ng Date" means the date when the Certif1cates of Participation, duly executed by the Trustee, are in1tially delivered to the original purchaser(s) thereof. Code. The term "Code" means the Internal Revenue Code of 1954, as amende0ncluding regulations, rulings and judicial decisions promulgated thereunder. Completion Date. The term "Completion Date" means, with respect to each Project, the date of complet1on of construction, acquisition and installation of such Project as evidenced by the filing with the Trustee of a Certificate of Complet1on. Costs of Issuance. The term "Costs of Issuance" means all items of expense directly or indirectly payable by or reimbursable to the Lessees or the Corporation relating to the financing of the Projects, including but not limited to filing costs, settlement costs, printing costs, reproduction and binding costs, initial fees and charges of the Trustee, financing discounts, Certlficate insurance premiums and outside legal fees of the Insurer relating thereto, if any, legal fees and charges~ financial and other professional consultant fees, costs of rating agencies for credit ratings, fees for execution, transportation and safekeeping ~f Certificates and charges and fees in connection with the foregoing. Dated Date. The term IIDated Oatell means December 1, 1985. Due Date. The term "Due Date II means May 15 and November 15, commencing May 15, 1986. Excess Investment Earnings. The term "Excess Investment Earnings" has the meaning ascribed to it in Section 310(a) of the Trust Terms and Conditions. Federal Securlties. The term II Federal Securities" means direct Obligations of (includ1ng obligatlons issued or held in book entry form on the books of the Department of the Treasury of the United States), or Exhlbit A Page 2 . . . obligations the principal of and interest on which are unconditionally guaranteed by the United States of America; provided, however, that if the Trustee invests in book entry securities, it must have an account with the Federal Reserve Bank or an account with a clearing corporation or chain of clearing corporations which has an account wlth the Federal Reserve Bank. Governing Body. The term Governing Body means the City Council of a lessee. Gross Proceeds. The term IIGross Proceeds II means the sum of the following amounts: (i} original proceeds, being net amounts (after payment of all expenses of execution and delivery of the Thousand Oaks Lease Agreement) received by the Thousand Oaks or the Trustee as a result of the sale of the Certificates relatlng to Thousand Oaks; (ii) investment proceeds, being amounts received at any time by Thousand Oaks or the Trustee, such as interest and dividends, resulting from the investment of proceeds of the Certificates relating to Thousand Oaks, including profits and less losses received on such investments; (lii) amounts, other than original proceeds and investment proceeds, held in any fund (including a reserve fund) reasonably expected to be used to pay principal or interest with respect to the Thousand Oaks Lease Agreement; (iv) securlties or obligations pledged as securlty for the payment of Payment Requirements by an ultimate obligor (or a related person) or Thousand Oaks; (v) Lease Payments made by Thousand Oaks; and (vi) amounts received as a result of investing the amounts listed in clauses (i) through (v). Insurance and Condernnatlon Fund. The term uInsurance and Condemnation Fundll means the fund by that name established under, and held by the Trustee pursuant to, Section 2.9 of the Trust Agreement. Insurance Policy. The term "Insurance POlicytl or "Policy" means Financial Guaranty Bond No. 99-0110-00022-86 issued by the Insurer guaranteeing the payment of principal and interest when Due for Payment (as defined in the Policy) with respect to the Certificates. Insurer. The term "Insurer" means United States Fidelity and Guaranty Company, and its successors and assigns. Lease Payments. The term II Lease Payments II means the Lease Payments payable by each Lessee under its Lease Agreement. lease Agreements. The term II Lease Agreements II means those several agreements for the lease of the Projects by the Corporation to the Lessees, each dated as of the date of the Trust Agreement. Lease Terms and Conditions. The term "Lease Terms and Conditions" means those certain Lease Terms and Conditions attached to the Lease Agreements as Exhibit D. Lessees. The term "Lesseesll means the Cities of Delano, Fontana, Santa Monica and Thousand Oaks, California. Net Proceeds. The term "Net Proceeds,lI when used with respect to any insurance proceeds or condemnat i on award, means the net proceeds from the Exhlb1t A Page 3 - lnsurance or eminent domain award with respect to which that term is used after deduct i on far payment of any expenses ; ncurred ; n the co 11 ect i on of such net proceeds. ~ Nonpurpose Dbl igation. The term "Nonpurpose Obl igation" means any security or ob1igatlon (other than an obligation on which interest ;s excludable from gross income for federal income tax purposes under Section l03(a) of the Code) in which Gross Proceeds of the Cert,ficates relating to Thousand Oaks are invested and which is not acquired to carry out the governmental purpose of the Certificates relating to Thousand Oaks. Outstanding. The term "Outstanding" when used with reference to the Certiflcates, and as of any particular date, means all Certificates theretofore delivered except: (a) any Certificate cancelled by the Trustee at or before said date and (b) any Certlflcate in lieu of or in subst,tution for which another Certificate shall have been delivered pursuant to the Trust Agreement. . Owner. The term II Owner II or IlCertificate Owner II or 11 Owner of Certificates!! or any similar term, when used with respect to the Certificates, means any person who shall be the registered owner of any Outstanding Certificate. Payment Oates. The term "Payment Oates" means June 1 and December 1 of each year, commencing June 1, 1986, and terminating on December 1, 2005. Payment Period. The term t1payment Period" means the twelve month periOd beginning on December 30 of each year and ending on December 29 of the following year. Permitted Encumbrances. The term lIPernlltted Encumbrances" means, with respect to the Projects, as of any particular time: (i) liens far general ad valorem taxes and assessments, if any, not then delinquent, or which the lessees maYt pursuant to provisions of Article V of the Lease Terms and Conditions, permit to remain unpaid; (ii) the Trust Agreement; and (ili) the Lease Agreements. Permitted Investments. The term IIPermitted Investments" means: (1) Federal Securities; (i i) bonds, debentures or nates or other evidence of indebtedness payable in cash issued by anyone or a combination of any of the following federal agencies whose obligations represent full faith and credit of the United States of Amer1ca: Export Import Bank of the United States, Federal Financing Bank, Federal Housing Administration, Maritime Administration, Public Housing Authority or the Government National Mortgage Associatlon; (iii) certificates of deposit properly secured at all times by collateral security described in (i) and (ii) above. Such certiflcates of deposit are only acceptable with commercial banks, savings and loans associat,ons and mutual savings banks; . Exhibit A Page 4 .- .. . . (iv) the following investments fully insured by the Federal Deposit Insurance Corporation or the Federal Savlngs and loan Insurance Corporatlon: (a) certlflcates of deposit~ (b) savings accounts or (c) deposlt accounts of a bank, savings and loan associations, or mutual savings banks; (v) investment agreements approved by the Insurer; and (vi) obligations described in Section 103(a) of the Code which have been rated Aaa by Moody I 5 Investors Servi ce or AAA by Standard & Poor IS Corporation. Principal Amount. The term uPrineipal Amount~" when used with respect to Lease Payments due under the Lease Agreements, means the total prlnc;pal component of Lease Payments then unpaid. Principal Office. The term "Principal Office" means the main or principal office of the Trustee in Los Angeles, California, for the conduct of its corporate trust business, presently located at 707 Wilshire Boulevard. Projects. The term "Projects II means the vari ous pub 1 i c improvements of the Lessees descrlbed in Exhibit C to each Lease Agreement. Projects Trust Fund. The term UProjects Trust Fund" means the fund by that name established under, and held by the Trustee pursuant to. Section 2.4 of the Trust Agreement. Redemption Fund. The term "Redemption Fund" means the fund by that name established under, and held by the Trustee pursuant to, Section 513 of the Trust Terms and Conditions. Record Date. The term "Record Date" means the close of buslness on the fifteenth day of the month preceding each Payment Date, whether or not such fifteenth day is a Business Day. Reduced Reserve Requirement. The term "Reduced Reserve Requirement" has the meaning given to such term in Section 306(e) of the Trust Terms and Conditions. Regulations. The term "Regulations" means temporary and permanent regulations promulgated under Section 103 of the Code. Requisitions. The term "Requisitions" means certificates executed by Authorized Offlcers of any of the Lessees and filed with the Trustee requesting disbursement from the Acquisition Accounts or the Insurance and Condemnation Fund. Reserve Fund. The term "Reserve Fund" means the fund by that name establ ished under and held by the Trustee pursuant to Sectlon 2.10 of the Trust Agreement. Thousand Oaks. The term uThousand Oaksu means the City of Thousand Oaks, California. Exhibit A Page 5 . . . Trust Agreement. The term IITrust Agreement II means the Trust Agreement, dated as of the Dated Date, by and among Trustee, the Corporation and the Lessees, pursuant to which Trustee agrees to execute and deliver the Certlflcates, to admlnister funds and to exercise rights and remedies assigned to Trustee. Trustee. The term "TrusteeU means First Interstate Bank of California, or its successor in interest acting as Trustee under the Trust Agreement. Trust Terms and Conditions. The term IITrust Terms and Conditionsll means the Trust Terms and Cond; t ions attached to the Trust Agreement as Exhibit C. Exhlbit A Page 6 ~ -.-.. . . 13050-5 JHHW:BOQ:~ms 11/19/85 12/17/85 :mds 12/21/85 :rms 12124/85 Z1640 EXHIBIT B (Form of Certificate of Participation) CERTIFICATE OF PARTICIPATION CALIFORNIA CITIES fINANCING CQRPORATION 1985 SERIES E Evidencing a P~oportionate Interest of the Owner Hereof in Lease Payments to be Made by One or More of the Cities of Delano, Fontana, Santa Monica and Thousand Oaks, California to the California Cities Financing Corporation Number R- $ Interest Rate Certificate Payment Date CUSIP Dated Date December 1, 1985 REGISTERED OWNER: PRINCIPAL AMOUNT: THIS IS TO CERTIFY THAT the regi stered owner ldentl fied above, or registered asslgns (the "Ownerll) is the registered owner of this Certlficate of Partic1pation evidencing a proportlonate interest in the right to receive certain lease payments (the "lease Payments") to be paid by one or more of the Cities of Delano, Fontana, Santa Monica and Thousand Oaks, California (collectively, the "lessees" and lndlVidual1y, a JJLesseeIJ), pursuant to those certain Lease Agreements, by and between the California Cities Flnancing Corporation (the "Corporation") and each of the Lessees, dated as . . of December 1, 1985 (the uLease Agreements"), the Lease Payments to be made thereunder having been assigned to First Interstate Bank of California, as trustee (the IlTrustee"), having an office at which it conducts its corporate trust business in Los Angeles, Callfornia (said off1ce being herein referred to as the uPrincipal OfficeU). The Owner is ent 1t 1 ed to recei ve. subject to the terms of the Lease Agreements. on the Cert1ficate Payment Date stated above, the Pnnclpal Amount stated above, representmg an or a portion of the Lease Payments designated as prlnclpal coming due on the fifteenth day of the month preceding such Certificate Payment Date and to receive on each Interest Payment Date (as hereinafter defined), from the Interest Payment Date next preced1ng the date of execution of this Certlficate (unless this Certificate is executed after the fifteenth day of the month preceding an Interest Payment Date but before the close of business on such Interest Payment Date, in which event the Owner shall receive interest from such Interest Payment Date; or unless this Certificate is executed prior to June 1, 1986, in which event the Owner shan receive interest from December 1, 1985; provided, however, that if. at the time of execution of this Certificate interest is in defau1t with respect to this Certificate, the Owner shall receive interest from the Interest Payment Date to which interest with respect hereto has been paid or made available for payment), until the Certificate Payment Date or the date of redemption in whole, whichever is earlier, the Owner's proportionate share of the Lease Payments designated as interest coming due on the fifteenth day of the Mayor November (the lIDue Datell) next preceding each of the Interest Payment Dates and the Cert1ficate Payment Date. II Interest Payment Date" means June I, 1986, and each December 1 and June 1 thereafter until the prlncipal amount of this Certif1cate has been paid in full. Sa1d proportionate share of the lease Payments des1gnated as interest is the result of the multip11cation of the Principal Amount stated above by the Interest Rate per annum stated above. The amount representing pr1ncipal with respect to th1S Certificate is payable 1n lawful money of the Unlted States of America~ which at the time of payment is legal tender for the payment of public and private debts, upon presentation and surrender hereof at the Principal Office of the Trustee. Amounts representing interest with respect to this Certificate are payable by check or draft of the Trustee mailed to the Owner at the address of such Owner contained in the Certificate register maintained by the Trustee or at such other address as the Owner may have ft led with the Trustee for that purpose. The total amount of each payment of prinClpal or 1nterest made to the Owner of this Certiflcate is comprised of interests in Lease Payments made by one or more of the Lessees In the years and 1n the percentages 11sted in the following table: Exh1bit 8 Page 2 .-. Lessee Year Delano Fontana Santa Monica Thousand Oaks Total -.-.- - 1986 8.92% 72.21% 11. 59% 7.29% 100% 1987 8.44 70.86 11.04 9.66 100 1988 8.00 71.19 11. 34 9.46 100 1989 8.46 71.25 10.91 9.38 100 1990 8.76 70.92 11.14 9.19 100 1991 55.68 44.32 100 1992 54.21 45.79 100 1993 100.00 100 1994 100.00 100 1995 100.00 100 1996 100.00 100 1997 100.00 100 1998 100.00 100 1999 100.00 100 2000 100.00 100 2001 100.00 100 2002 100 .00 100 2003 100.00 100 2004 100.00 100 2005 100.00 100 [REVERSE SIDE OF CERTIFICATE] . The Lessees are authorized to enter into the Lease Agreements by the laws of the State of California. The Lessees are entering into the Lease Agreements in order to lease from the Corporation certa1n property necessary or convenient for the governmental operations of the Lessees (the UProjectsll). The Corporat1on has assigned its rights to receive Lease Payments to the Trustee pursuant to an Assignment Agreement by and between the Corporat10n and the Trustee. dated as of December 1. 1985, and a Trust Agreement. by and among the Trustee, the Corporat1on and the Lessees, dated as of Oecember 1, 1985 (the lITrust Agreementll). All certificates of part1cipation executed and delivered under the Trust Agreement are hereinafter referred to as IlCert1ficates.1I The obligations of the Lessees to make Lease Payments under the Lease Agreements are obligatlons payable from each Lessee's general fund or any other source of funds 1 ega 11y ava 11 ab le to such Lessee for the payment of Lease Payments. The obligations of the Lessees to pay Lease Payments do not constitute obligations of the Lessees for WhlCh the Lessees are obligated to levy or pledge any form of taxat10n or for which the Lessees have lev1ed or pledged any form of taxation. The obligat10ns of the Lessees to pay Lease Payments under the Lease Agreements do not const,tute debts or indebtedness of the Lessees, the State of California or any of its po11tical subdivisions within the meaning of any constltutional or statutory debt limitation or restriction. The Reserve Accounts wh; ch have been establ 1 shed under the Trust . Agreement for each of the Lessees are he 1 d by the Trustee in segregated . Exhiblt B Page 3 - - . . accounts, and one Lessee's Reserve Account 15 not available to make up the deficiency 1n the payment of Certiflcates caused by another Lesseels failure to pay its Lease Payments. In addition, the Lessees have not covenanted to pay any other lessee I S unpald Lease Payments or to make up any deficit 10 the payment to Owners which occurs by reason of another Lessee's nonpayment of its Lease Payments. For this reason, one lessee's default in the payment of its Lease Payments (after such lesseels Reserve Account has been depleted), will cause a partial default on the Cert1ficate5 then outstandlng WhlCh evidence interests 10 Lease Payment obligatlons of such Lessee, even though the remaining Lessees continue to pay their Lease Payments in a timely manner. The Certlficates are subject to redemption in whole or in part, without premium. at the principal amount to be redeemed. plus accrued interest to the date of redemption, as follows: (a) in the event the Trustee receives net proceeds of any insurance award resulting from damage or destruction to all or a portion of a LesseeJs Project and such Lessee certlfies to the Trustee that repair, replacement or improvement of all or specified components of the damaged or destroyed part of such Project is not economically feasible or in the best interest of such Lessee, then the net proceeds related to such specified components will be used to redeem that portion of the Certlficates representing interests 1n such Lessee's Lease Payments on the earllest possible lnterest Payment Date; provided that no redemption will occur unless such net proceeds, together with funds then on hand ln such Lesseels Acquisition Account, Lease Payment Account and Reserve Account (as such accounts are described in the Trust Agreement) are sufflcient to redeem all of that portion of the Certificates representlng interests in such lesseers Lease Payments; (b) in the event the Trustee receives net proceeds from any eminent domain proceed1ng relating to all or a portion of a Project, such net proceeds will be used to redeem. on the earl1est possible Interest Payment Date, all or part of the Certificates representing interests 1n the Lease Agreement relating to such Project. In the event the affected lessee cert if1es to the Trustee that its Project has been taken in part pursuant to such em1nent domain proceedings and that t~e remaining portion of its Project is still useful for the purposes orlginally intendedy the net proceeds from such eminent domaln proceed1ngs (except to the extent that such proceeds are used to repa1r or replace such Project in the manner described in such Lesseets Lease Agreement) will be used to redeem the Certificates in an amount equal to the amount of such net proceeds. In such event, the Lesseels Lease Payment obligations wi11 be proportionately abated under its Lease Agreement, provlded that the resulting Lease Payments will be sufficient to pay all of that portion of principal and interest on the remaining outstanding Certificates. In the eve~t such Lessee certifies to the Trustee that its Project has been taken 1n whole pursuant to such eminent domain proceedings or has been taken in part to such extent that the remalning portlon of such Project is no longer useful for the purposes intended, the remaining Lease Payment obligations of such Lessee w111 be abated in full under its Lease Exh1blt B Page 4 . Agreement. In such event. there can be no assurance made that the amount of eminent domaln net proceeds and other moneys avallable wl11 be sufficient to redeem all of the Certificates which are called for redemption; or (c) in the event a Lessee has not accepted all portions of its Project on or prior to the Project Completion Date (as defined in the Trust Agreement). then all or part of that portion of the Certificates representing interests in such Lessee1s Lease Payments relating to the portion of the Project which such Lessee has not yet accepted shall be redeemed on the first day of the calendar month immedlately follow1ng such Project Completion Date, from amounts 1n such Lessee's Acquisitlon Account. Lease Payment Account and Reserve Account. The Certificates maturing on or after December I, 1996. are SUbject to redemption in whole or in part, from moneys available therefor (but not in an amount less than $20,000) on any Interest Payment Date on or after December 1. 1995, from moneys deposited in a Lessee's Lease Payment Account as a result of the exerClse by a Lessee of its option to purchase ltS Project or to prepay its Lease Payments as provided in its Lease Agreement, at the redempti on prl ce set forth be 1 ow (expressed as a percentage of the principal amount of Certificates to be redeemed) and accrued interest to the date fixed for redemption: Redemption Redemption Date Price . December 1, 1995 and June 1, 1996............102 % December 1, 1996 and June 1, 1997............101-1/2 December 1. 1997 and June 1, 1998. . . . . . . . . . . .101 December 1. 1998 and June 1, 1999............100-1/2 December 1, 1999 and each June 1 and December 1 thereafter..................l00 This Certificate is not subject to redemptlon except as provided above. In the event that part, but not all, of the Certificates representing lnterests in a Lessee's Lease Payments is to be redeemed, the Certificates to be redeemed shall be selected by the Trustee in the following manner: the Trustee shall ident1fy those Certlficates which represent interests in the Lease Payments of the Lessee causlng such redemption. and shall select from su ch Cert, f i cates part i cu 1 ar Cert i f i cates to be redeemed in the inverse order of the,r maturity. When more than one Certificate of a maturity is to be redeemed. Certiflcates of such matur1ty shall be redeemed pro rata. For the purpose af the selection described in this paragraph, all Certificates registered in the name of the same Owner shall be aggregated and treated as a single Certificate held by such Owner. Notwithstanding any of the foregolng, in any such partial redemption the Trustee shall, according to such method as it shall deem proper in lts discretion, make such adjustments by increasing or decreasing by not more than $5,000 the amount which would be allowable to anyone or more Certlficate Owner, as may be necessary to the end that the principal amount allocable to all but one such Owner shall be an integral multiple of $5,000. No Certiflcate selected for redemption . Exhibit B Page 5 . . . shall be redeemed in a principal amount WhlCh exceeds that portlon of the prl nc i pa 1 amount of such Cert i fi cate represent i n9 ; nterests in the Lease Payments of the Lessee causing such redemption. A notice of redemption shall be given to the Owners of any Certificates which are to be redeemed in whole or in part in the manner described in the Trust Agreement. Thi s Cert if i cate has been executed by the Trustee pursuant to the terms of the Trust Agreement. Copies of the Trust Agreement are on flle at the office of the Corporation and at the Prlncipal Office of the Trustee, and reference to the Trust Agreement and any and all amendments thereto 1S made for a description of the nghts and remedles of the Owners of the Certificates and the terms and conditions upon which the Certlficates are de 1 i vered thereunder. To the extent and in the manner permi tted by the terms of the Trust Agreementt the provislons of the Trust Agreement may be amended by the parties thereto with the written consent of the Insurer (as defined in the Trust Agreement) and the Owners of at least a majority In principal amount of the Certlficates then outstanding, or without consent of the Owners but with the prior written consent of the Insurer to cure ambiguities and otherwise in a manner which does not adversely affect the interest of the Owners of the Certificates. The registration of this Certificate shall be transferable only upon the Certificate reglstert which shall be kept for that purpose at the Principal Office of the Trustee, upon surrender hereof together with a written instrument of transfer satisfactory to the Trustee duly executed by the Owner or his duly authorized attorney. Upon the registration of the transfer and the surrender of this Certificate, the Trustee shall provlde 1n the name of the transferee a new fully registered Certificate or Certificates, of the same aggregate princlpal amountt interest rate and maturity as the surrendered Certificate. The Certificates are delivered in the form of fully reglstered Certificates without coupons in the denomlnations of $5,000 each or any integral multlple thereof. Subsequent to a redemption affecting all or a portion of the Certificatest the Owner of any Certificate WhlCh has been redeemed in part may be issued one or more Certificates not evenly divlsible by $5,000. Certificates, upon surrender thereof at the Principal Office of the Trustee wlth a written request of exchange satisfactory to the Trustee duly executed by the Owner or his attorney duly authorized in writing, may, at the option of the Owner thereof, be exchanged for an equal aggregate principal amount of Certificates of any other authorlzed denomlnatlons, of the same maturity. The Tru stee has no ob 1 i gat 1 ons or 1 i abi 1 it i es to the Owners for the sufficiency of the Policy (as defined in the Trust Agreement) or for the payment of Lease Payments by the Lessees when due; the Trustee I s sole obligations are to administer, for the benefit of the Lesseest the Carp or-at i ant and the Cert ifi cate Owners t the varlOUS funds and accounts established in the Trust Agreement. THE LESSEES HAVE CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required by the Constitution and statutes of the State Exhiblt B Page 6 . . . of Californla and the provlslons of the Trust Agreement to exist, to have happened and to have been performed precedent to and in the execution and delivery of this Certificate, do exist, have happened and have been performed in due time, form and manner as required by law. IN WITNESS WHEREOF, this Certiflcate has been executed by the manual signature of the Trustee and delivered on the date of execution set forth below. FIRST INTERSTATE BANK OF CALIFORNIA, as Trustee By Authorlzed Signatory Date of Execution: Exhibit B Page 7 ..-.. - . . value received the do(es) hereby sell, assign and transfer unto , whose Social Security or other tax identifying , the within registered Certificate and constitute{s) and appoint(s} attorney. to transfer the same on the Certificate register of the Trustee wlth full power of substitution in the premises. For undersigned number is hereby irrevocably Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by a member fi rm of the New York Stock Exchange or a commerclal bank, or trust company. ASSIGNMENT Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered Certificate in every particular wlthout alteration or enlargement or any change whatsoever. Exhiblt B Page 8 . . 13050-5 JHHW:BDQ:rms 11/19/85 :mds 12122185 :rms 12/24/85 12127/85 Zl641 FI HAL EXHIBIT C TRUST TERMS AND CONDITIONS . . 10l. 102. 201. 202. 203. 204. 205. TABLE Of CONTENTS ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION Definitions ...... Rules of Construction . . . . . " ART! elE II RECITALS AND REPRESENTATIONS Lease Agreements Deposit of Moneys. . . . . . . . Lease Payments . Assignment Agreement . . . . . . . . Conditions .... . . . . . . . . . . . . . " . II . . . .. . " . . . . " . . . ARTICLE III ADMINISTRATION OF FUNDS AND ACCOUNTS; INVESTMENTS 301. Disbursement fram Acquisition Accounts ... 302. Application of Certificate Payment Account. 303. App11cation of Lease Payment Accounts; Capitalized Interest Subaccounts . . . . . . . . . . . 304. Applicatlon of Costs of Issuance Account . . 305. Application of Insurance Fund. . . . . . . . . , 306. Application of Reserve Fund. . . . . . . . . . . . . . 307. Deposit and Investment of Moneys in funds; Statements. 308. Valuation and Disposit1on of Investments .... . . . 309. Investment Yield Limitations ..... . . . . . . . . 310. Rebate of Excess Investment Earnings to United States . . 311. Arbitrage Consultant ..... . . . . . . . . . . ARTICLE IV THE TRUSTEE 401. Trustee; Duties, Removal and Reslgnation . . . . . 402. Compensation of the Trustee . . . . . . . . . . 403. Protection to Trustee .... . . . . . . . . . . -i- Page . . .C-1 . .C-1 . . .C-2 . 'to ... . .C-2 . .C-2 . .C-2 . . C-2 .C-3 . .C-4 .C-5 . . C-5 . .. ... . .C-5 .C-7 . . . . . . C-8 . . .C-9 . . (-8 . . C-11 . . .C-ll . . .(-11 . . .C-11 . . .C-12 ...... - SOL 502. 503. 504. 505. 506. 507. 508. 509. 510. 511. 512. 513. 514. 515. 516. . 60l. 602. 603. 604. 605. 606. 607. 608. 609. 610. 61!. 612. G13. 614. 615. 616. 617. 618. 619. . ARTICLE V TERMS AND PROVISIONS OF THE CERTIFICATES Page Medium of Payment; Form . . . . . . . . . . . . Legends .......... 6 . _ . . . . . . . . . . Execution . . . . . . . . . . . . . . . . . . . * Negotiability~ Transfer and Registry. . . . . . . . . . Transfer of Registered Certificates . . . . . . Regulation with Respect to Exchange and Transfers Certificate Register. . . . . . . . . . . . . . . . . Temporary Certificates . . . . . . . . . . . . . . . Certificates Mutilatedt Lostt Destroyed or Stolen Place of Payment . . . . . . . . . . . . . . Evidence of Signatures of Certificate Owners and Ownership of Certificates ........ Redemption . . . . . . . . . . . . . . Redemption Fund ............. Notice of Redemption. . . . . . . . . . . Payment of Certificates on Redemption . . . . Partial Redemption of Certificate .. ARTICLE VI COVENANTS; LIMITATION OF LIABILITY; ASSIGNMENT Corporation to Perform Lease Agreements ....... Assignment by Corporation . . . . . . . . . . . . . . Action In the Event of Non-Payment of lease Payments . No Obligation by Lessees to Owners. . . . . . . . No Obligation for Performance by Trustee. . . . . . No Liability to Owners for Payment. . . . No Responsibility for Sufficiency . . . . Trustee May Require Opinion of Counsel . . Indemnification to Trustee and Corporation . Agreement to Pay Attorneys I Fees and Expenses ... Power of Trustee to Control Proceedings ... Limitation on Certificate Owners' Right to Sue. . . . . Owners as Third Party Beneficiaries . . . . . Institution of Legal Proceedings . . . . . Non-Waiver . . . . . . . Remedies Not Exclusive . Applicat10n of Funds. . . . . . . . . . . . . . . Rights of the Insurer .... The Insurance Policy. . -ii- .C-14 .C-14 .C-14 . .C-15 .(-15 . . . . . .C-15 .C-16 . .C-16 . C-16 . .C-17 . . (-17 .C-18 .C-20 . . C-20 . .C-20 .C-21 . .C-22 . .C-22 . . .. . . .C-22 . . . .C-22 . .C-22 . . (-23 . . C-23 . .C-23 . .C-23 . .C-24 .C-24 . .C-24 . .(-25 . .C-25 . .C-25 . . C-25 III . . . . .C-25 .C-26 . . . . . .C-27 ....... ~ . . 70l. 702. 703. 704. 705. 706. 707. 708. Page ARTICLE V I I AMENDMENT; DEFEASANCE; ADMINISTRATIVE PROVISIONS Amendments . . . .. . .. . Defeasance .. . . . . . . . Trustee to Keep Records California Law. .. . . . .. Severability.. . . . . . . Binding on Successors .. Execution in Counterparts Headings . . .. . . . . . . . .. . .C-29 . .. . . . .C-29 .C-30 .. .C-30 .. . . .C-30 .C-30 III .. . . .. .C-30 .. ..C-30 ............ . .. -i;;- ~ ... . . ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION 101. Definitions. Capitalized terms used herein shall, for the purposes hereof. have the meanings ascribed to them in Exhibit A attached to the Trust Agreement and by this reference incorporated herein. unless the context clearly requires some other meaning. 102. Rules of Construction. Words of the masculme gender shall be deemed and construed to include correlatlve words of the feminlne and neuter genders. Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa, and words importing persons shall include corporations and associations, including public bodies, as well as natural persons. Exhibit C Page 1 . . ~ "filii' ARTICLE II RECITALS AND REPRESENTATIONS 201. Lease Agreements. The Corporation and the Lessees have entered into the Lease Agreements whereby the Corporation has agreed to lease the Projects to the Lessees and the Lessees have agreed to lease the Projects from the Corporation. 202. Depos i t of Moneys. Under the Tru st Agreement, in order to provide for acquisitlon of the Projects and to assure the lessees that the Acquisitlon Costs of the Projects will be paid without delay and that the Projects will be available for lease without delay, the Corporation is required to deposit with the Trustee, or cause to be deposited with the Trustee on its behalf, certain moneys. 203. Lease Payments. Under the Lease Agreements, the Lessees are obligated to pay to the Corporation or its asslgnee~ Lease Payments, for the lease of the Projects. 204. Assignment. For the purpose of obtainlng the moneys required to be deposited by it with the Trustee. the Corporation has, pursuant to the Assignment Agreement, assigned and transferred all of its rights and interests under the Lease Agreements to the Trustee; and in consideratlon of such assignment and the execution hereof, the Trustee has agreed to execute ana deliver Certificates of Participation, each evidencing a proportionate interest in the Lease Payments payable under the Lease Agreements. 205. ~onditions Precedent Satisfied. All acts, conditions and things required by law to exist, happen and be performed precedent to and in connection with the execution and entenng into hereof, have happened and have been performed 1n regular and due time, form and manner as required by law. and the parties to the Trust Agreement are now duly empowered to execute and enter into the Trust Agreement. Exhibit C Page 2 . ARTICLE III ADMINISTRATION OF FUNDS AND ACCOUNTS 301. Disbursements from Acquisition Accounts. (a) Amounts on deposit in the Acquisition Accounts shall be disbursed for Acquisition Costs in accordance with the procedures described in the Trust Terms and Conditions. (b) Disbursements from the Acquisition Accounts shall be made by the Trustee upon receipt of Requisitions complying with the requirements of thlS Section 301. (c) Each such Requisitlon shall: (i) set forth the amounts of Acquisition Costs to be disbursed~ the person or persons to whom said amounts are to be disbursed; (ii) state that the amounts to be disbursed constitute Acquisition Costs~ that said amounts are required to be disbursed pursuant to a contract entered into therefor by or on beha 1 f of the Lessee requesting disbursement, or were necessari ly and reasonably incurred; and that said amounts are not being paid in advance of the time, if any, fixed for payment; . (i1i) in the case of each payment made under any contract for installation or construction~ state that. insofar as such obligatlon was incurred for work, materials, equipment or supplies, such work was actually performed, or such mater1als~ equipment or supplies were actually installed in furtherance of the Project or dellvered at the site for that purpose or delivered for storage or fabrication at a place or places approved by such Lessee; {iv} state that no amount set forth in the Requisition was included in any Requisition previously filed with, and paid by, the Trustee pursuant to this Section 301; {v} state that the amount remaining in the Acquisition Account from which such disbursement is to be made, together with interest earnings on such amount, plus investment earnings on other funds that will be transferred into such Acqulsition Account, wlll, after payment of the amount set forth in the Requisition~ be sufficient to pay all remaining AcquiSition Costs for that Lessee's Project as then estimated, or, if not, that the requesting Lessee has set aSlde other available moneys to provide for any shortfall, which moneys may be paid by the Lessee directly for any Acquisition Costs; (vi) in the case of increased Acquisition Costs~ state that the amount of such increase has been or is thereupon being deposited wlth the Trustee, or otherwise made available by the Lessee; and (vi i) in the case of di sbursement of fi na 1 payment of that Lessee's Acquisition Costs, state that all such Acqu;s1t;on Costs have . Exhlbit C Page 3 . . . then been, or are thereupon being, paid and that the entire Projects has been finally accepted by such Lessee and that all Lease Payments shown on Exhibit B to such Lessee' s Lease Agreement represent fa1r rental value for such Lessee's Project. (d) Upon receipt of a Certificate of Completion, the Trustee shall transfer any amounts remaining in that Lessee's Acquisition Account into such Lesseefs Lease Payment Account and shall close such Lessee's Acquisition Account. Upon transfer of said amounts to such Lease Payment Account, said amounts shall be applied as a credit against the Lease Payments due by that lessee on the Oue Dates following the date of such transfer 1n successive order until full disbursement of said amounts. Upon such transfer, the Trustee shall provide written not1ce to the affected Lessee of the amount of such transfer. (e) In the event of a default by a Lessee under the Lease Agreements to which such Lessee is a party and the termination of such Lease Agreement by the Corporation or the Trustee, the Trustee shall not make any further disbursements from such Lessee's Acquisition Account and shall transfer amounts then on hand in such Lessee1s Acquisition Account, if any, to such Lessee I s Lease Payment Account to be credited against such Lessee I s Lease Payment obligations or to the Redemption Fund, to be applied to the redemption of Certificates pursuant to Section 512 of these Trust Terms and Conditions. 302. Application of Certificate Payment Account. (a) The Trustee shall withdraw from the Certificate Payment Account. on each Payment Date, an amount equal to the Lease Payments due on the Due Date, and shall cause the same to be applied to the payment of principal and interest payments due with respect to the Certificates on such Payment Date. (b) If on any Payment Date amounts on hand in the Cert1ficate Payment Account are insufficient to pay the full amount of principal and interest then due and payable with respect to the Certificates, the Trustee shall app ly such amounts to the payment of interests in Lease Payments of the Lessees from whose Lease Payment Accounts such moneys were withdrawn (but on 1 y to the extent of such wi thdrawa 1 s) and, wi th respect to each su ch Lessee's Lease Payments, first to the payment of interest past due, pro rata if necessary, and second to the payment of pr1nc;pal past due, pro rata, if necessary. 303. Application of Lease Payment Accounts; Capita1ized Interest $ubaccounts. (a) The Trustee shall deposit any moneys received pursuant to Section 2.7 of the Trust Agreement into the respective Lessees' Capitallzed Interest Subaccounts. (b) The Lease Payment Accounts shall be maintained by the Trustee until all Lease Payments due under the Lease Agreements have been paid. Lease Payments paid by each Lessee to the Trustee as assignee of the Corporation pursuant to the Lease Agreements and hereunder. as well as proceeds of rental interruption insurance and any other amounts required by Exhl bit C Page 4 ...... ,... . . the lease Agreements shall be deposited by the Trustee in such Lessee's Lease Payment Account. {c} The Trustee shall withdraw moneys from each Lesseels Lease Payment Account on each Payment Date in amounts equal to the Lease Payment due, after giving effect to the provisions of Sections 306 and 307 of the Trust Terms and Conditions. from that Lessee on the Due Date next preceding such Payment Date. (d) The Trustee shall cause all sums withdrawn from the Lease Payment Accounts to be deposited in the Certificate Payment Account. 304. Application of Costs of Issuance Account. (a) The Trustee shall disburse funds from the Costs of Issuance Account upon receipt of a signed invoice approved by the Authorized Officer of the Corporation. (b) Upon payment of all Costs of Issuance, which shall be determined by a certificate to that effect by an Authorized Officer of the Carporation9 or upon the date occurring one year after the Closing Date. whichever occurs first. the Trustee shall transfer all funds remaining in the Costs of Issuance Account to the lease Payment Accounts of the lessees, in the same proportion as the principal portion of Lease Payments payable under each Lessee 1 s Lease Agreement bears to the tota 1 pri nc; pa 1 port i on of Lease Payments represented by the Certif1cates when originally executed and delivered. and the Costs of Issuance Account shall thereupon be closed. 305. Application of Insurance a~d Condemnation Fund. All Net Proceeds of insurance or eminent doma1" proceedings w1th respect to any of the Projects which are received by the Trustee shall be deposited in the Insurance and Condemnation Fund, with the exception of any proceeds of rental interruption insurance, which shall be deposited in the appropriate Lease Payment Account. The Trustee shall promptly give notice of the receipt of Net Proceeds to the affected Lessee and the Insurer. A. Application of Proceeds of Insurance. The Net Proceeds of any insurance or award paid with respect to a Project resulting from any damage or destruction to such Project shall be deposited with the Trustee in the Insurance and Condemnation Fund. Within 120 days of such deposit, the affected Lessee shall certify to the Trustee (a) as to whether the Project has been damaged or destroyed in whole or in part, (b) as to whether Net Proceeds are to be ut i1 ized for the repair, replacement or improvement of all or specified components (the "Repairable ComponentsU) of the damaged or destroyed portion of the Project and, if S09 that sufficient funds, together with the Net Proceeds related to the Repalrable Components, have been appropriated to pay the total cost of such repair9 replacement or improvement 9 and (c) as to whether repair, replacement or improvement of all or specified components (the "Unrepairab1e Components") of the damaged or destroyed portion of the Project is not economically feasible or in the best interest of the affected lessee; provlded that if the Project has been damaged or destroyed in whole, the affected Lessee shall not certify that repair, replacement or improvement of Exhibit C Page 5 . . .-. - all of the Project is not economically feasible or in the best interest of the Lessee unless the Net Proceeds, together with funds then on hand in such Lessee's Acquisition Accountt Lease Payment Account and Reserve Account are sufficient to prepay all of such Lessee's Lease Payments. If such certification is to the effect that Net Proceeds are to be utilized for the repairt replacement or improvement of Repairable Components and that sufficient funds, together with the Net Proceeds related to such Repairable Components t have been appropri ated to pay the total cost of such repair, replacement or improvement, the Trustee will disburse the Net Proceeds related to the Repairable Components to the affected Lessee in order for such Lessee to cause the Repairable Components to be repaired, replaced or improved to at least the same good order, repair and condition as they were in prior to the damage or destructiont insofar as the same may be accompl ished with said Net Proceedst and the Trustee shall transfer any excess Net Proceeds related to the Repairable Components to such Lessee's Lease Payment Account to be credited against such Lessee's next lease Payment. If such certification is also, 01" alternatively, as the case may be, to the effect that repair, replacement or improvement of the Unrepairable Components is not economically feasible or in the best interest of such Lessee, the Trustee wi 11 transfer the Net Proceeds related to the Unrepalrable Components to the Redemption Fund to be applied to the redemption of Certificates representing interests in such Lessee's Lease Payments. B. Application of Proceeds of Condemnation Award (i) If any part of a Project is taken by eminent domain proceedings, the Net Proceeds therefrom shall be deposited in the Insurance and Condemnation Fund. Within 120 days of such deposit the affected Lessee shall certify to the Trustee and the Insurer (a) as to whether the Project has been taken in whole or in part pursuant to such proceedingst {b} as to whether the remaining portion of the Project is still useful for the purposes originally intended and (c) as to whether lt desires that any available Net Proceeds from such eminent domain proceedlngs be applied for repair or replacement of the Project and, if so, that sufficient funds~ together with such Net Proceeds, have been appropri ated to pay the total cost of such repair and replacement. If such certification is to the effect that such Project has been taken in whole pursuant to such eminent domain proceedings or has been taken in part to such extent that the remaining portion af the Project is no lorger useful for the purposes originally intendedt the Trustee shall transfer all of such Net Proceeds to the Redemption Fund to be applied to the redemption of Certlficates representing interests in such lessee' s lease Payments. If such certification is to the effect that such Project has been taken in part pursuant to such emi nent domain proceedings and that the remalning portion of such Project is stlll useful for the purposes originally intendedt the Trustee shall transfer such Net Proceeds to the Redemption Fund to be appl ied to the redemption of Certificates representing interests in such lessee1s Lease Payments; provided thatt if such certification is also to the effect that the lessee desires that any available Net Proceeds be applied for repair or replacement of the Project. and that sufficient fundst together with such Net Proceeds, have been appropriated to pay the total cost of such repair and replacement, the Trustee will disburse such Net Proceeds to the Lessee in accordance with the Trust Agreement in order for the Lessee to cause the Project to be Exhiblt C Page 6 ..... ~ . . repaired, replaced or improved to at least the same good order, repair and condition as it was in prior to the eminent domain proceedings, insofar as the same may be accomplished with said Net Proceeds, and the Trustee shall transfer any excess Net Proceeds to such Lessee's lease Payment Account to be credited against the Lessee's next Lease Payment. (i i) The Trustee may obtain, at the affected Lessee I s expense, the report of an independent engineer or other independent consultant in order to concur with and verify the conclusions of a Authorized Officer stated in any Net Proceeds Cert i fi cate submi tted to the Trustee, or to make any determination with respect to the application of such Net Proceeds. 306. Application of Reserve Fund. (a) If on any Due Date there is not on deposit in a Lessee's Lease Payment Account an amount (excluding earnings prior to such Lessee's Completion Date) equal to the lease Payment required to be deposited with the Trustee on such Due Date by such lessee, the Trustee shall transfer from such lessee's Reserve Account to such Lessee I s Lease Payment Account an amount equal to such deficiency in such Lessee's Lease Payment Account. Upon receipt of any delinquent lease Payment with respect to which moneys have previously been paid from a Lessee's Reserve Account, such Lease Payment shall be deposited in such lessee1s Reserve Account to the extent of such payment. (b) Prior to recelpt of a Lessee's Certificate of Completion, the Trustee shall, not less than monthly, transfer any moneys on hand in such Lessee's Reserve Account in excess of such lessee's Reserve Requirement to such Lessee's Acquisition Account. (c) The Trustee shall, on or prior to each Due Date followlng receipt of a Lessee's Certificate of Completion, transfer any moneys on hand in a Lessee's Reserve Account in excess of such Lessee's Reserve Requirement to such lesseels Lease Payment Account. (d) If the moneys on hand in a Lessee's Reserve Account and such Lessee's Lease Payment Account are equal to all Lease Payments due by such lessee during the entire remainder of the term of such Lessee's Lease Agreement, the Trustee shall transfer all amounts then an hand in such Lessee's Reserve Account to such Lessee's lease Payment Account to be app 1 ied to the payment of slJch Lease Payments as they become due and such Lessee shall be deemed to have paid all Lease Payments due under such Lease Agreements. {e} In the event that Lease Payments of a Lessee are to be prepaid in part in order to effect partial redemption of Certificates pursuant to Section 512 of the Trust Terms and Conditions, the amount on hand in suCh Lessee's Reserve Account shall be reduced to an amount equal to the maximum annua 1 amount of lease Payments due by such Lessee as revi sed pursuant to Section 512(d) of the Trust Terms and Conditions. or a "mlnor portion" of the Principal Amount of such Lessee's Lease Agreement (as determined according to Section l03(c) of the Code), whichever is less (the "Reduced Exhibit C Page 7 Reserve Requirement"), and shall transfer amounts in excess of the Reduced ~ Reserve Requirement to such Lessee's Lease Payment Account to be applied to ~ redemption of the Certificates pursuant to the provisions of Section 512 of the Trust Terms and Conditions. 307. Qeposit and Investment of Moneys in Funds; Statements. (a) All moneys held by the Trustee in any of the funds or accounts established pursuant hereto shall be deposited in time or demand accounts (including accounts Of the Trustee) or certificates of deposits pertaining to said accounts which accounts shall be fully collateralized at all times as trust accounts or invested in Permitted Investments so as to obtain the hlghest yield which Trustee deems practicable, having due regard for the safety of such funds and for the date upon which such funds will be required for uses and purposes specified in the Trust Agreement, provided, however, that if the Trustee receives written instructions from a Lessee for investment of funds ar accounts related to its Project in specified Permitted Investments, Trustee shall invest pursuant to said instructions. . (b) Prior to the Completion Date with respect to each Lessee's Project, interest or income on the Lease Payment Account estab 1 i shed for such Lessee shall be deposited in the Acquisition Account establlshed for such Lessee. Thereafter, all interest or income rece1ved on investment of such Lease Payment Account s ha 11 be app 1 i ed as a cred i t aga ins t the Lease Payments due by such Lessee under the Lease Agreement to whi ch it is a party. Fall owi ng such Camp 1 et i on Date, the Trustee sha 11 report at 1 east seven (7) business days prior to Due Dates the amount af such interest or income to the Corporation and such Lessee, and the amount of the Lease Payments payable by such Lessee on the next following Due Date shall be reduced by an amount equal to said interest or income. In the event that such interest or income exceeds the Lease Payment due on said Due Date, the amount of such excess shall be applied as a credit against the next following Lease Payment. All interest or income earned on the Acquisition Accounts shall be retained in the Acquisition Accounts unt1l such Accounts are closed pursuant to Section 301(d) of the Trust Terms and Conditions. (c) The Trustee may act as agent in mak i ng or d i spas i n9 of any investment. The Trustee shall not be liable for any loss resulting from any investment pursuant to this Section, except as specifically provided herein. (d) The Trustee shall mail monthly statements of account to the Lessees and to the Corporation. (e) The Trustee may, in its discretion, and upon the written request of the Lessees shall, commingle any of the funds held by it pursuant hereto lnto a separate fund or funds for investment purposes only; provided, however, that all funds or accounts held by the Trustee under the Trust Agreement sha 11 be accounted for separate 1 y, notwithstand i ng such commingling by the Trustee. (f) The funds an deposit in the Acquisition Accounts and the Cert1ficate Payment Account shall be invested in Permitted Investments maturing on or before the earlier of the next occurring Payment Date or the . Exhibit C Page 8 . . . date occurring one hundred eighty (180) days from the purchase of such Permltted Investment. (g) The funds on deposit in the Lease Payment Accounts (other than funds on deposit in the Capitalized Interest Subaccounts, which shall be invested as provided in subsection (h) below) ~ the Insurance and Condemnation Fund and the Redemption Fund shall be invested only in Permi tted Investments rated in the highest category by Standard & Poor 's Corporation or Moody's Investors Service which mature not more than one hundred eighty (180) days from their purchase date or the date upon which the moneys so invested are expected to be needed, whichever is earlier. (h) The funds on deposit in the Capitalized Interest Subaccounts, pending application of such amounts to the payment of interest wlth respect to the Certificates~ shall be invested solely in Federal Securities maturing on or before the earlier of (A) the next occurrlng Payment Date or (B) the date occurring one hundred eighty (lBO) days from the purchase of such Federal Securities. 308. Valuation and Disposition of Investments. For the purpose of determining the amount in any fund, all Permitted Investments credited to such fund shall be valued as follows: (a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; (b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times): the average bid price at such time of determination for such investments by any two natlonally recognized government securities dealers (selected by the Trustee in its absolute dlscretion) at the time maklng a market in such investments; (c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; and (d) as to any investment not specified above: the value thereof established by prior agreement between the Lessees, the Trustee and the Insurer. If more than one provision of this definition of tlvalue" shall apply at any tlme to any particular lnvestment, the value thereof at such time shall be determined in accordance with the provision establishing the lowest value for such investment. 309. Investment Yield Limitations. (a) Except as provided in subsection (b), Thousand Oaks shall instruct~ or cause to be instructed~ the Trustee not to permit~ during any Payment Period, the aggregate amount of Gross Proceeds of the Certlficates relating to Thousand Oaks invested in Nonpurpose Obl igatlons with a yield Exhibit C Page 9 . . . higher than the yield with respect to the Thousand Oaks Lease Agreement to exceed 150 percent of the Lease Payments to be made by Thousand Oaks for such Payment Period. In addition, the Thousand Oaks shall assure that, beginning with the Payment Period following completion of the Thousand Oaks Project, but in no event later than the fourth Payment Period, said aggregate amount of Gross Proceeds of the Certificates relating to Thousand Oaks invested in Nonpurpose Obligations with a yield h1gher than the yield on the Thousand Oaks Lease Agreement is promptly and appropriately reduced as the principal amount of the Thousand Oaks Lease Agreement is reduced. In order to comply with the preceding sentence, Thousand Oaks shall instruct the Trustee to reduce said investment in Nonpurpose Obligations with a yield higher than the yield on the Thousand Oaks Lease Agreement w1thin not to exceed thlrty (30) days fol10wlng the payment of princ1pal of the Thousand Oaks lease Agreement (by maturity, prepayment or otherwise), provided, however, that said reduction need not be made if the failure to make said reduction will not violate the 150 percent requirement set forth in the first sentence of this Section. (b) Subsection (a) hereof shall not apply to Gross Proceeds which: (i) are original proceeds or investment proceeds (as defined in clause (i) and (ii) of the definition of Gross Proceeds) invested untll needed for accrued interest with respect to the Cert if i cates re 1 at i ng to Thousand Oaks or for the governmental purpose of the Thousand Oaks lease Agreement; (ii) are held in a fund which is used primarily to achieve a proper matchi ng of revenues and Lease Payments made by Thousand Oaks wi thi n each Payment Period and which is depleted at least once a year except for a reasonable carryover amount not in excess of the greater of one year's earnings on the fund or one-twelfth of annual Lease Payments made by Thousand Oaks and are invested for a periOd not 1n excess of thirteen (13) months; {iii} are invested for a period not in excess of thirty (30) days in a fund reasonably expected to be used to pay principal, interest or prem1um with respect to the Thousand Oaks Lease Agreement; (;v) are invested for a period not in excess of one year and are received from the investment of amounts deposited in a fund reasonably expected to be used to pay principal, interest or premium with respect to the Thousand Oaks lease Agreement; or (v) are invested for a period not in excess of one year beglnning on the date of receipt and constitute investment proceeds (as defined in clause (ii) of the definition of Gross Proceeds). (c) For the purposes of subsection (a), in determining the aggregate amount of Gross Proceeds with respect to the Certif1cates relating to Thousand Oaks invested in Nonpurpose Obligations, Thousand Oaks shall instruct or cause the Trustee to be instructed to value each Nonpurpose Obligation 1n which Gross Proceeds are invested (inclUding an obligation or security that was to a Nonpurpose Obligation when acquired but that becomes a Nonpurpose Obligation with respect to the Certif1cates relating to Exhibit C Page 10 - ~ . . Thousand Oaks~ for example~ obligations pledged as security for the Certificates relating to Thousand Oaks} as if the Nonpurpose Obligatlon was acquired for its fair market value at the time such obligation or security becomes a Nonpurpose Obl igat;on of the Certificates relating to Thousand Oaks. Thousand Oaks shall instruct the Trustee to value Nonpurpose Obligations on the date of acquisition and the Trustee need not revalue such Nonpurpose Obligations unless otherwise required in this Trust Agreement. (d) For the purposes of subsection (a) ~ the yield of the Thousand Oaks Lease Agreement and the yield of Nonpurpose Obligations shall be computed in accordance w1th Section 1.103-13(c) of the Regulations~ except that the yield of the Thousand Oaks Lease Agreement shall be determined on the basis of the initial offering price of the Certificates relating to Thousand Oaks to the public (not including bond houses and brokers~ or similar persons or organizations acting in the capacity of underwriters or wholesalers) at which price a substantial amount of the Certificates relating to Thousand Oaks were sold~ or if privately placed, the prlce pald by the first buyer of the Certificates relating to Thousand Oaks or the acquisition cost of the first buyer of the Certlficates relating to Thousand Oaks. In addition~ the yield of each Nonpurpose Obligation shall be computed based on the fair market value thereof on the date of acquisition thereof or on the date the obl igation or security in question becomes a Nonpurpose Obligation of the Certificates relating to Thousand Oaks. In the case of vdnable rate Nonpurpose Obligat;ons~ the Trustee shall determine the yield thereof on the date the Nonpurpose Obligation is acquired and on the first day of each Payment Period by assuming that the rate of interest on the Nonpurpose Obligation will be the weighted average rate of interest for such Nonpurpose Obligation during the preceding one year periOd (or portion thereof in which the Nonpurpose Obligation was outstanding). For a Nonpurpose Obllgation purchased on ltS date of issue~ the yield thereof shall be determined for the first Payment Period by assuming that the rate of interest will be the initial rate of interest for such obligation as determined under the prescribed formula for the variable rate of interest on the date of issue of the Nonpurpose Obllgation (without regard to any fixed rate initially applicable to such Nonpurpose Obligation). 310. Rebate of Excess Investment EarninHs to United States. (a) Thousand Oaks shall calculate or cause to be calculated Excess Investment Earnings in accordance with subsection (b) and shall notify the Trustee of the amount so calculated. The Trustee shall pay Excess Investment Earnings to the United States in accordance with subsection (c). The term "Excess Investment Earnings" means an amount equal to the sum of: (i) the excess of (A) the aggregate amount earned from the date of delivery of the Certlficates relating to Thousand Oaks on all Nonpurpose Obligations in which Gross Proceeds of the Certificates relatlng to Thousand Oaks are invested {other than amounts attributable to an excess described in this paragraph (1)), over (8) the amount that would have been earned if the yield on such Nonpurpose Obligations {other than amounts attrlbutable Exhlbit C Page 11 . . . to an excess described in this paragraph (i)) had been equal to the yield on the Thousand Oaks Lease Agreement, plus (ii) any income attributable to the excess described in paragraph (i). (b) Prior to the last day of the first Payment Period , Thousand Oaks shall calculate or cause to be calculated the Excess Investment Earnings referenced in paragraph (i) of subsection (a). Thereafter, prior to the 1 ast day of each Payment Perl od and on the date of the payment of the Certifl cates relating to Thousand Oaks, Thousand Oaks shall cal culate or cause to be calculated the amount of Excess Investment Earnings referenced in paragraphs (i) and (ii) of subsectlon (a). Said calculations shall be made by the Trustee in accordance with the following: (1) Except as provlded in (2), in determining the amount described in paragraph (i)(A) of subsection (a), the aggregate amount earned on Nonpurpose Obligations shall include (i) all income realized under federal income tax accounting principles (whether or not the person earning such income is subject to federal income tax) with respect to such Nonpurpose Obligations and with respect to the reinvestment of investment receipts from such Nonpurpose Obllgations (without regard to the transaction costs incurred in acquiring. carrying, selllng or redeeming such Nonpurpose Obligatlons), including, but not limited to. gain or loss realized on the disposition of such Nonpurpose Obligations (without regard to when such gains are taken into account under Sect i on 453 of the Code relating to taxable year of inclusion of gross income), and income under Section 1272 of the Code (relating to original issue discount) and (ii) any unrealized gain or loss as of the date of retirement of the Bonds in the event that any Nonpurpose Obligation is retained after such date. (2) In determl ni ng the amount descri bed in paragraph (i) of subsection (a), an obligation or security shall be treated as acquired for its fair market value at the time it becomes a Nonpurpose Obligation, so that gain or loss on the disposltion of such an obligation or security shall be computed wlth reference to such fair market value as its adjusted basis. (3) In determining the amount described in paragraph (i)(8) of subsection (a), the yield on the Thousand Oaks Lease Agreement shall be determined based on the actual yield of the Thousand Oaks Lease Agreement during the period between the date of the Thousand Oaks Lease Agreement and the date the computation is made (with adjustments for discount or premium). (4) In determi n i ng the amount descri bed in paragraph (i i) of subsection (a), all income attnbutable to the excess described in paragraph (i) of subsection (a) must be taken into account, whether or not that income exceeds the yield on the Thousand Oaks Lease Agreement, and no amount may be treated as "negative arbitrage". Exhlbit C Page 12 . (5) In determining the amount described in subsection (a), there shall be excluded any amount earned on any fund or account which is used primarily to achieve a proper matching of revenues and Lease Payments to be made by Thousand Oaks within each Payment Period and which is depleted at least once a year except for a reasonable carryover amount not in excess of the greater of one year's earnings on such fund or account or one-twelfth of annual Lease Payments to be made by Thousand Oaks as well as amounts earned on said earnings if the gross earnings on all such funds and accounts for the Payment Period ;s less than $100,000. . (c) The Trustee shall pay Excess Investment Earnings identified in any notice from Thousand Oaks to the United States in installments with the first payment to be made not later than thirty (30) days after the end of the fifth Payment Period and with SUbsequent payments to be made not later than five (5) years after the preceding payment was due. The Trustee shall assure than each installment is in an amount equal to at least 90 percent of the Excess Investment Earnings wlth respect to the Bonds as of the close of the computation period. Not later than thirty (30) days after the payment of the Certificates rel ating to Thousand Oaks, the Trustee shall pay 100 percent of the theretofore unpaid Excess Investment Earnings of the Thousand Oaks Lease Agreement. The Trustee shall remit such payments to the Unlted States at the address prescribed by the Regulatlons as the same may be in time to time in effect with such reports and statements as may be prescribed by such Regulations. (d) In order to assure that Excess Investments Earnings are paid to the United States rather than to a third party, Thousand Oaks shalo instruct the Trustee to invest in certificates of deposit and in investment contracts in accordance with the Regulations therefor as from tlme to tlme in effect. (e) The Trustee shall keep! and retain for a period of six (6) years following the payment of the Certificates relating to Thousand Oaks, records of the determinations made pursuant to this Section 310. . 311. Arbitrage Consultant. Thousand Oaks shall, on a periodic basis, engage an Arbitrage Consultant to consult with, advise and assist Thousand Oaks in complying with its obllgations under Sections 309 and 310 of the Trust Terms and Conditions and with any applicable provislons of Section 103(c} of the Code. Thousand Oaks and the Trustee shall unconditionally be entitled to accept and rely upon the recommendations, advise, calculations and opinions of an Arbitrage Consultant as to actions required or not required to be taken by the Trustee and Thousand Oaks to comply with the provisions of Sections 309 and 310 of the Trust Terms and Conditlons and of Section 103(c) of the Code. The Trustee agrees to act in accordance with the recommendations, advice and opinions of an Arbitrage Consultant for the purpose of complying with any applicable provisions of Sections 309 and 310 of the Trust Terms and Conditions and of Section 103{c) of the Code~ provided, however, that to the extent the Trustee is unable to act due to the inability or fallure of Thousand Oaks to comply with the recommendations of an Arbitrage Consultant, the Trustee sha1l be relieved of any obllgatlon to comply with the provisions of Sections 309 and 310 of the Trust Terms and Conditions and of Sectlon 103(c) of the Code. Exhibit C Page 13 . . ARTICLE IV THE TRUSTEE 401. Trustee; Duties, Removal and Resignati~n. By executing and delivering the Trust Agreement, the Trustee accepts the duties and obligations of the Trustee provided in the Trust Agreement, including but not limited to certain insurance-related functions specified in Section 619 of the Trust Terms and Conditions, but only upon the terms and conditions set forth in the Trust Agreement. The Corporatlon, the Insurer or the Lessees may, or the Owners of a majority in aggregate principal amount of all Certificates Outstanding may, by written request, remove the Trustee initially a party hereto, and any successor thereto, and in such event, or in the event the Trustee resigns, the Corporation, with the pri or wrl tten consent of the Insurer, sha 11 appoint a successor Trustee, but any such successor shall be a bank or trust company in good standing doing business and having an office in los Angeles or San Francisco, California, having a combined capital (exclus1ve of borrowed capital) and surplus of at least Seventy-five Million Dollars ($75,OOO,OOO) and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section the comblned capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of conditions so published. The Trustee may at any time resign by giving written notice to the Corporation, the Insurer and the Lessees and by giving to the Certificate Owners notice by mailing a notice of such resignation to their addresses appearing in the Certificate Register. Upon receiving any such notice of resignation, the Corporation shall promptly appoint a successor Trustee by an instrument in writing; provided, however. that in the event that the Corporation does not appoint a successor Trustee within thirty (30) days following receipt of such notlce of resignation, the resigning Trustee may petition an appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or removal of the Trustee shall not become effective until written acceptance of appointment by the successor Trustee under the Trust Agreement. 402. Compensation of the Trustee. The Lessees or the Corporation shall from time to time, on demand, pay to the Trustee, or the Corporation shall cause the Lessees to pay pursuant to the Lease Agreements, reasonable compensation for the Trustee's services and shall reimburse the Trustee for all its advances and expenditures, including but not limited to advances to and fees and expenses of independent appraisers, accountants~ consultantss counsel, agents and attorneys-at-law or other experts employed by it in the exercise and performance of its powers and duties under the Trust Agreement. Such compensation and reimbursement shall be paid by the lessees or the Corporation. Under no circumstances shall the Insurer be liable for payment of the Trustee's fees or expenses. The right of the Trustee to receive each perlodic payment representing its ordinary compensation (In the form of its normal administration fee) for its services rendered under the Trust Exhibit C Page 14 . . ..... ,.,. Agreement shall be subordinate to the rights of the Certificate Owners to receive scheduled payments of principal and lnterest with respect to their Certificates. 403. Protection to Trustee. The Trustee shall be protected in acting upon any notice~ resolution~ consent~ order~ certlficate~ report~ or other paper or document reasonably believed by it to be genulne and to have been signed or presented by the proper party or parties. The Trustee~ in its discretion, may consult with counsel~ who may be counsel to the Lessees or the Carporatian~ with regard to legal Questions ~ and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it under the Trust Agreement in good falth in accordance therewith. Whenever in the administration of its duties under the Trust Agreement, the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under the Trust Agreement~ such matter (unless other evidence in respect thereof be specifically prescribed in the Trust Agreement) may~ in the absence of bad faith on the part of the Trustee~ be deemed to be conclusively proved and established by the certificate of an Authorized Officer of the Corporation or the Lessees and such certificate shall be full warranty to the Trustee for any action taken or suffered under the provisions of the Trust Agreement upon the faith thereof, but in its discretion the Trustee may, in l1eu thereof (but shall not be obl igated to), accept other evidence of such matter. The Trustee may in good faith buy~ sell, own~ hold and deal in any of the Certificates issued pursuant to the Trust Agreement~ and may join in any action which any Owner may be entitled to take with l1ke effect as if the Trustee were not a party to the Trust Agreement. The Trustee, either as principal or agent, may also engage in or be interested in any financial or other transaction Wl th the Carporat i on or the Lessees ~ and may act as depository, trustee~ or agent for any committee or body Of Owners of Certificates or other obligations of the Lessees as freely as if it were not Trustee under the Trust Agreement. The recitals, statements and representations in the Trust Agreement or in the Certificates contained, save only the Trustee I s execution of the Certif;cates~ shall be taken and construed as made by and on the part of the Lessees, and not by the Trustee~ and the Trustee does not assume~ and shall not have~ any responsibility or obligation for the correctness of any thereof. The Trustee may execute any of the trusts or powers hereof and perform the duties required of it under the Trust Agreement by or through attorneys~ agents~ or receivers~ and shall be entitled to advice of counsel concerning all matters of trust and its duty under the Trust Agreement~ and the Trustee shall not be answerable for the default or misconduct of any such attorney~ agent~ or receiver selected by it with reasonable care. The Trustee shall be reimbursed by the Lessees for' expenses incurred in hiring attorneys, agents or receivers in connection with the performance of its obl igations under the Trust Agreement. The Trustee shall not be answerable for the exerClse of any discretion or power under the Trust Agreement or for Exhibit C Page 15 . . anything whatever in connectlon with the trust, except only for lts own willful misconduct or negligence. Exhi bit C Page 16 ..-.. ...... . . ART! elE V TERMS AND PROVISIONS OF THE CERTIFICATES 501. Medium of Payment; Form. The Certifi cates will be executed and del ivered in fully regi stered form without coupons, in the denomination of $5,000 each or any integral multiple thereof. The Certificates shall be in substantially the form set forth in Exhibit B to the Trust Agreement. Subsequent to a mandatory redempt i on pursuant to Section 512 of the Trust Terms and Conditions affecting all or a portion of the Certificates, the Owner of any Certificate which has been redeemed in part may be issued one or more Certificate not evenly divisible by $5,000 (an "Irregular Denomination"). Principal and premium, if any, with respect to the Certificates wlll be payable at the Principal Office of the Trustee& Interest paid w,th respect to the fully registered Certificates shall be paid on Payment Dates of each year, commencing on the first Payment Date to and including the date of principal payment or redemption, whichever is earlier, by check Dr draft of the Trusteema11 ed to the reg 'f stered Owners of the Cert i fi cates at the address shown on the Certiflcate registration books maintained by the Trustee for such purposes as of the Record Date (or at such other address as the Owner may have filed with the Trustee for that purpose) on the Payment Date with regard to which such payment is made. Interest w; th respect to each Cert if; cate sha 11 be payable from the Payment Date next preceding the date of execution thereof, unless (i) such Certificate ;s executed as of a Payment Date, in which event it shall bear interest from the date thereof, or (ii) such Certificate is executed prior to the first Due Date, in which event it shall bear interest from the Dated Date; provided, however, that if, at the time of execution of any Certlficate, interest is in default thereon, such Certificate shall bear interest from the Payment Date to which interest has previously been paid or made available for payment thereon. 80th the principal of and interest on the Certificates shall be payable in lawful money of the United States of America. Interest on the Cert,ficates shall be calculated on the basis of a 360-day year of twelve 3D-day months. 502, legends. The Certificates may contain or have endorsed thereon such provisions, specifications and descriptive words not inconsistent with the provisions hereof as may be necessary or desH'able to comply with custom, or otherwise, as may be determined by the lessees prior to the delivery thereof. 503. Execution. The Certificates shall be executed in the name of, and by, the Trustee by the manual signature of an Authorized Officer of the Trustee. 504. Negotiability, Transfer and Reglstry. All the Certificates executed and delivered pursuant hereto shall be negotiable as provided by Exhiblt C Page 17 . . . law sUbject to the provlslons for registration and transfer contained in this Article and in the Certificates. 505. Transfer of Registered Certificates. (a) Each Certificate shall be transferable only upon a register of the names of each certlficate owner (the lICertificate Register"), which shall be kept for that purpose at the Principal Office of the Trustee, by the Owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof together with a wrltten instrument of transfer satisfactory to the Trustee duly executed by the Owner or his duly authorized attorney. Upon the transfer of any such Certificate, the Trustee shall provide in the name of the transferee, a new Certificate or Cert i fi cates, of the same aggregate pri nci pa 1 amount and maturity as the surrendered Certificates (unless there has occurred a partial redemption of such Certificate pursuant to Section 512 of the Trust Terms and Conditions, in which case the principal amount of the new Certificate shall be equal to the unredeemed principal portion of the Certificate submitted for transfer). (b) The Trustee shall deem and treat the person in whose name any Outstanding Certificate shall be reglstered upon the Certificate Register as the absolute owner of such Certificate, whether such Certificate shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on such Certificate and for all other purposes, and all such payments so made to any such Owner or upon his order shall be valid and effectual to satisfy and discharge the liabillty upon such Certlficate to the extent of the sum or sums so paid, and neither the Les sees nor the Trustee sha 11 be affected by any not ice to the contrary. The Lessees agree to indemnify and save the Trustee harmless from and against any and all loss. cost, charge, expense, judgment or liability incurred by it, acting in good faith and without gross negligence or willful misconduct under the Trust Agreement, in so treating such Owner. 506. Regulation with Respect to Exchange and Transfers. In all cases in which the privilege of exchanging or transferring Certificates is exercised. the Trustee shall execute and deliver Certificates in accordance with the provislons of this Article. All Certificates surrendered in any such exchanges or transfers shall forthwith be cancelled by the Trustee. For every such exchange or transfer of Certificates, whether temporary or definitive, the Lessees and the Tr1Jstee may make a charge sufficlent to reimburse any of them for any tax, fee or other governmental charge, other than one imposed by the Lessees, required to be paid with respect to such exchange or transfer, which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. Notwithstanding any other provision hereof, the cost of preparing each new Certificate and any other expenses of the Lessees or the Trustee incurred in connection therewith (except any appllcable tax, fee or other governmental charge other than one imposed by the Lessees) shall be paid by the Lessees. The Trustee shall not be obliged to effect exchange or transfer of any Certificate during the period after the mailing of notice calling such Certificate or a portion thereof for redemption, nor during the fifteen days preceding the giving of such notlee of redemption. Exhibit C Page 18 .... ....... . . 507. Certificate Register. The Trustee shall keep or cause to be kept at its Principal Office a Certificate Register, which shall at all tlmes be open to lnspection by the Lessees, the Insurer and the Corporation; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations consistent herewith as it may prescribe, register or transfer or cause to be registered or transferred, on the Cert,ficate Register, Certificates as herein before provided. 508. Temporary Certificates. Pending preparation of the definitive Certificates, any Certificates delivered under the Trust Agreement may be initially delivered in temporary form exchangeable for definltive Certiflcates when ready for del ivery. The temporary Certlficates may be printed, llthographed or typewritten, shall be of such denominations as may be determined by the Corporation, shall be without coupons and may contain such reference to any of the provisions hereof as may be appropriate. Every temporary Certificate shall be executed by the Trustee and be delivered by the Trustee upon the same conditions and in substantially the same manner as definitive Certificates. If the Trustee delivers temporary Certificates, it shall execute and furnish defin1tive Certificates without delay and, thereupon, the temporary Certificates shall be surrendered for cancellation at the Principal Office of the Trustee and the Trustee snall deliver in exchange for such temporary Certificates an equal aggregate principal amount of definitive Certificates of authorized denominations of the same interest rate or rates and maturity or maturities. Until so exchanged, the temporary Certificates shall be entitled to the same benefits under the Trust Agreement as definitive Certificates delivered pursuant hereto. 509. Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall became mutilated, the Trustee, at the expense of the Owner of said Certificate, shall execute and del iver a new Certificate of 1 ike tenor and number in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certiflcate so mutilated. Every mutilated Certiflcate so surrendered to the Trustee shall be canceled by it and redelivered to, or upon the order of, the Corporation. If any Certiflcate shall be lost, destroyed or stolen, eVldence of such loss, destruction or theft may be submitted to the Trustee, and, ,f such evidence is satisfactory to the Trustee and, if an indemnity satlsfactory to the Trustee shall be given, the Trustee, at the expense of the Certificate Owner, shall execute and deliver, a new Certificate of like tenor and numbered as the Trustee shall determine in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment of a reasonable fee for each new Certif1cate delivered under this Section and of the reasonable expenses which may be incurred by the Trustee in carrying out the duties under this Section 509. Any Certificate lssued under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all other Certlficates secured by the Trust Agreement. The Trustee shall not be requ 1 red to treat both the or1 9 i na 1 Certificate and any duplicate Certificate as being Outstanding for the purpose of determimng the principal amount of Cert,ficates which may be issued under the Trust Agreement or for the purpose of determining any percentage of Certificates Outstanding under the Trust Agreement, but both the original and dupllcate Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section 509, in lieu of Exhlbit C Page 19 . . . del ivering a new Certificate for a Certificate which has been mutilated, lost, destroyed or stolen and which has matured, the Trustee may make payment of such Certificate6 510. Place of Payment. The Trustee is hereby appointed as paying agent for the Certificates. The principal of the Certificates shall be payable at the Principal Office of the Trustee. Interest on Certificates shall be payab 1 e by check or draft of the Trustee mail ed to the Owner of record on the Payment Date therefor of such Certificates at the address shown on the Certificate Register, or at such other address as the Owner may have filed with the Trustee. 511. Evidence of Siq-natures of Certificate Owners and Ownership of Certificates. Any request. direction. consent. revocation of consent. or other instrument in wrltinq required or permitted by the Trust Agreement to be signed or executed by Certificate Owners may be in any number of concurrent instruments of similar tenor, and may be signed or executed by such Certificate Owners in person or by their attorneys or agents appointed by an instrument in writing for that purpose. Proof of the execution of any such lnstrument, or of any instrument apPOinting any such attorney or agent, and of the holding and ownership of Certificates shall be sufficient for any purpose hereof (except as otherwise herein provided), if made in the following manner: The fact and date of the execution by any Certificate Owner or his attorney or agent of any such instrument and of any instrument appointing any such attorney or agent. may be proved by a certificate, which need not be acknowledged or verified. of an officer of any bank or trust company located within the United States of America, or of any notary public, or other officer authorized to take acknowledgments of deeds to be recorded in such jurisdictions that the persons signing such instruments acknowledged before him the execution thereof. Where any such instrument is executed by an officer of a corporatlon or association or a member of a partnership on behalf of such corporation. association or partnership. such certificate shall also constitute sufficlent proof of his authority. Nothing contained in this Article shall be construed as limiting the Trustee to such proof. it bei ng intended that the Trustee may accept any other evidence of the matters herein stated which to the Trustee may seem sufficient. Any request or consent of the Owner of any Certificate shall bind every future Owner of the same Certificate in respect of anything done or suffered to be done by the Corporation or the Trustee in pursuance of such request or consent6 512. Redemption. (a) Damage or Destruction; Insurance Prcceeds6 The Certificates are subject to redemption in whole or in part, without premium. at the principal amount to be redeemed, plus accrued interest to the date of redemption, in the event the Trustee receives Net Proceeds of any insurance award resulting from damage or destruction to all or a portion of a lesseels Project and such Lessee certifies to the Trustee that repair, replacement or improvement of all or specified components (the "Unrepairable ComponentsU) of the damaged or destroyed part of such Project is not economically feasible or in Exhiblt C Page 20 . . . the best interest of such Lessee, then such Net Proceeds related to the Unrepa1rable Components will be used to redeem, on the earliest possible Interest Payment Date, all or part of Certlficates representing interest 1n such lessee I s Lease Payments equal to the amount of such Net Proceeds related to the Unrepairable Components; provlded that if such Lessee certifies to the Trustee that such Project has been damaged or destroyed in whole and that repair, replacement and improvement of all of such Project is not economically feasible or in the best interest of such Lessee, no Certificates will be redeemed unless such Net Proceeds, together with funds then on hand in such Lessee's Acqu1sition Account, Lease Payment Account and Reserve Account are sufficient to redeem all of the Certificates representing interests in such Lessee's Lease Payments. (b) Eminent Domain; Condemnation Award. The Certificates are also subject to redemption in whole or in part, without premium at the principal amount to be redeemed, together with accrued interest to the date fixed for redemption, in the event the Trustee receives Net Proceeds from any eminent domain proceedings relating to all or a portion of a Project, such Net Proceeds to be used in such event to redeem, on the earl iest possi bl e Payment Date, all or part of the Certificates representing interests in the affected Lessee's Lease Payments. In the event such Lessee certifies to the Trustee that such Project has been taken in part pursuant to such emlnent domain proceedings and that the remalning portion of such Project is still useful for the purposes originally intended, the Net Proceeds from such em1nent domain proceedings (except to the extent that such proceeds are used to repair or rep 1 ace such Project pursuant to Sect i on 305 (b) (i i) of the Trust Terms and Condltions) will be used to redeem the Certificates representing interests in such Lessee's Lease Payments 1n an amount equal to the amount of such Net Proceeds. In such event, the lessee's Lease Payment obligations will be proportionately abated under its lease Agreement, provided that the resulting Lease Payments wl,l be sufficient to pay all of that portion of principal and lnterest on the remaining Outstanding Certificates representing interests in such Lessee's lease Payments. In the event such Lessee certifies to the Trustee that such Project has been taken in whole pursuant to such eminent domain proceedings or has been taken in part to such extent that the remaining portion of such Project is no longer useful for the purposes originally intended, all Net Proceeds, together with funds then on hand in such Lessee's Acquisition Account, Lease Payment Account and Reserve Account, shall be applied to the redemption of the Certificates and the remaining lease Payment obligations will be abated in full under such Lease Agreement. (e) Speclal Redemption. The Certificates are subject to redemption in whole or in part, without premium, at the principal amount to be redeemed, plus accrued interest to the date of redemption, in the event a Lessee has not accepted all portions of its Project on or pri or to the Acquisition Date (as defined in the Lease Agreement), then all or part of the Certificates relating to the portion of the Project which such Lessee has not yet accepted shall be redeemed on the Payment Date immediately following the Acquisition Date, from amounts transferred to such Lessee's lease Payment Account as provided 1n Section 302 of the Lease Terms and Conditions and applled to the prepayment of the Lease Payments. Exhibit C Page 21 ...... ...... . . (d) Optional Redemption. The Certificates are subject to optional redemptlon prior to maturity on the dates and at the redemption prices specified in Section 3.4 of the Trust Agreement. (e) Amount Paid to Certificate Owners. In the event that part~ but not all, of that portion of the Certificates is to be redeemed, the Certificates to be redeemed shall be selected by the Trustee in the following manner: the Trustee shall identify those Certificates which represent interest in the lease Payments of the lessee causing such redemption, and shall select from such Certificates particular Certificates to be redeemed in the inverse order of their maturity. Where more than one Certificate of a maturity is to be redeemed, such Certificates of such maturity shall be redeemed pro rata. For the purpose of the selection described in this paragraph, all Certificates registered in the name of the same Owner shall be aggregated and treated as a single Certiflcate held by such Owner. Notwithstandlng any of the foregoing, in any such partial redemption the Trustee shall, according to such method as it shall deem proper in its discretion, make such adjustments by increasing or decreasing by not more than $5,000 the amount which would be allowable to anyone or more Certificate Ownert as may be necessary to the end that the principal amount allocable to only one such Owner shall be an Irregular Denomination. No Certificate selected for redemption as described above shall be redeemed in a principal amount which exceeds that portlon of the principal amount of such Certiflcate representing interests in the Lease Payments of the Lessee causing such redemption. (f) ~evised Lease Payment Schedule. Upon redemption in part, the Trustee shall provide the Lessee causing such redemption with a revised schedu 1 e of Lease Payments, wh i ch schedu 1 e shall take into account such redemption and shall be and become for all purposes thereafter Exhibit B to such Lease Agreement. 513. Red~mption Fund. Moneys to be used for redemption of Certificates shall be deposited in a Redemption Fund, which shall be a special fund to be held in trust by the Trustee, separate and apart from all other funds and accounts. Said moneys shall be set aside in the Redemption Fund solely for the purpose of redeeming the Certificates in advance of their maturity and shall be appl ied on or after the date designated for redemption to the payment of principal and interest with respect to the Certificates to be redeemed upon presentation and surrender of such Certificates. 514. Notice of Redemption. When redemption is authorized or required pursuant to the provisions of the Trust Agreement, the Trustee shall glve to the affected Certificate Owners and the Insurer written notice of the redemption of the Certificates at the expense of the lessees causing such redemption. Such notice shall specify: (a) that the whole or a designated portion of the Certificates is to be redeemed, (b) the date of redernptiont and {c} the place or places where the redemption will be made. Such notlce shall further state that on the speCified redemption date there shall become due and payable upon each Certifl cate to be redeemed, the principal (or portion) with respect thereto, together with interest accrued to said redemption date, and that from and after such redemption date interest w1th respect thereto shall cease to accrue and be payable. Exhibit C Page 22 . . . Notice of such redemption shall be given by mailing, postage prepaid, not more than sixty (60) days nor less than twenty-five (25) days prior to said redemption date, copies thereof to the Insurer and the Owners of any Certificates whose Certificates or a portion thereof are to be redeemed. Any defect in the mailing of such notice shall not affect the validity of the proceedings for the redemption of the Certificates or portion thereof. 515. Payment of Certificates on Redemption. Notice having been given as aforesaid, and the moneys for the redemption, including interest to the appl icable redemption date. having been set aside in the Redemption Fund, the portion of Certificates to be redeemed shall become due and payable on said redemption date and, upon presentation and surrender thereof at the office or offices specified in said notice, said Certificates shall be paid at the unpaid prlncipal amount and premium, if any, with respect thereto. plus any unpaid and accrued interest to said redemption date. If, on said redemption date, moneys for the redemption of a 11 the Certificates to be redeemed, together with interest to said redemption date, shall be held by the Trustee so as to be available therefor on such redemption date, and, if notice of redemption thereof shall have been given as aforesa i d, then, from and after said redempt i on date, interest Wl th respect to the portion of Certificates to be redeemed shall cease to accrue and become payable. If said moneys shall not be so available on said redemption date, interest with respect to such portion of Certificates shall continue to be payable interest until paid at the same rates as they would have been payable had they not been called for redemption. All moneys held by or on behalf of the Trustee for the redemption of particular Certificates shall be held in trust for the account of the Owners of the Certificates so to be redeemed for six years. Subject to any applicable escheat laws, after six years, the Trustee will pay over to each Lessee the unclaimed money in the same proportion that the Principal Amount of Certificates originally executed and delivered for the years to which such money applies, if any. 516. Par~ia 1 Redemption of Certificate. Upon surrender of any Certlficate redeemed in part only, the Trustee shall execute. and deliver to the Owner thereof, at the expense of the Lessee causing such redemption, a new Certificate or Certificates (one of which may be in an Irregular Denomination) 1n an amount equal in aggregate principal amount to the unredeemed portion of the Certificate surrendered and of the same interest rate and the same principal Payment Date. Such partial redemption shall be valid upon payment of the amount thereby required to be paid to such Owner. and Lessees, the Corporation and the Trustee shall be released and discharged from all liability to the extent of such payment irrespective of whether an endorsement shall or shall not have been made upon the reverse of such Certlficate by such Owner and irrespective of any error or omission in such endorsement. If redemption results in any change in the proportionate interest in the total principal and lnterest payments to be made on such Certificate or Certificates which is related to each Lessee, the Trustee shall endorse the new Certiflcate or Certificates in such manner as will reflect such change thereon. Exhiblt C Page 23 . . . ARTICLE VI COVENANTS; LIMITATION OF LIABILITY; ASSIGNMENT 601. Corporation to Perform Lease Agreements. The Corporation covenants and agrees with the Owners of the Certificates. to perform all obligations and duties imposed on it under the Lea.se Agreements and to enforce the Lease Agreements against the Lessees in accordance with their terms. 602. AssiHnment by Corporation. The Corporation hereby agrees to assign to the Trustee pursuant to the Assignment Agreement. for the benefit of the Owners of the Certificates. all of the Corporation's rights and remedies under the Lease Agreements. including its rights to receive Lease Payments under the lease Agreements. except certa1n rights to indemnification and to the payment of fees and expenses as provided 1n Sections 507. 512 and 804 of the lease Terms and Conditions. The Corporation1s obligations and duties referred to in Section 602 of the Trust Terms and Conditions are not delegated to the Trustee. 603. Action In the Event of Non-Payment of Lease Payments. Upon failure by any Lessee to pay any Lease Payment in an amount equal to the Lease Payment so due on or prior to the Oue Date pertaining to such Lease Payment. Trustee shall transfer the unpaid amount of such lease Payment from the Reserve Account of the Lessee which fa1led to make a Lease Payment to the lease Payment Account of such Lessee and thence to the Certifi cate Payment Account. as provided in Sections 306(a) and 302(a) of the Trust Terms and Conditions. and if necessary. the Trustee may exercise the Corporat i on r S remed i es under the lease Agreement. and any other remed i es whi ch Trustee may have by contract or by law. If. after making such transfer from such lessee's Reserve Account there remains a deficiency in the amount of the Lease Payment due on such Due Date. the Trustee shall take the actions provided in Section 619 of the Trust Terms and Conditions. The Trustee shall terminate a lessee's Lease Agreement in accordance with Section 402 of the Lease Terms and Conditions. 604. No Obligation by lessees to Owners. Except for the payment of Lease Payments when due in accordance w1th the Lease Agreements and the performance of the other covenants and agreements of the Lessees contained 1" the Lease Agreements and the Trust Agreement, the Lessees shall have no obligation or liability to any of the other parties or to the Owners of the Certificates with respect hereto or the terms. execution. delivery or transfer of the Certificates. or the distribution of Lease Payments to the Owners by the Trustee. 605. No Obli~ation for Performance by Trustee. Ne1ther the Corporation nor Lessees shall have any obligation or liabillty to any of the other parties or to the Owners of the Certificates with respect to the performance by the Trustee of any duty imposed upon it under the Trust Agreement. Exhibit C Page 24 ... Wi' . . 606. No Liability to Owners for Payment. Except as provided in the Trust Agreement. neither the Corporation nor the Trustee shall have any obligation or liability to the Owners of the Certificates with respect to the payment of the Lease Payments by the Lessees when due, or with respect to the performance by the Lessees of any other covenant made by them in the Lease Agreements. 607. No ResponSlbilit,y for Sufficiency. The Trustee shall not be responsible for the sUfficiency or validity of the Lease Agreements or for the sUfficiency of the Trust Agreement or the Certificates; the assignment made to it of rights to receive moneys pursuant to said Agreement; or the value of or title to the Projects. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it under the terms of and in accordance with the Trust Agreement. 608. Trustee May Require Opinion of Counsel. Before being required to take any discretlonary action under the Trust Agreement, the Trustee may require an opinion of counsel acceptable to Trustee, which counsel may be counsel to any of the parties hereto. or a verified certificate of any party hereto. or both. concerning the proposed action. If it does so in good faith, Trustee shall be absolutely protected in relying thereon. 609. Indemnification to Trustee and Corporation. The Lessees shall and hereby agree to indemnify and save the Trustee, its officers, directors, agents, employees. successors or assigns harmless from and against all clalms, losses and damages, including legal fees and expenses. arising out of (i) the use. malntenance, condition or management of. or from any work or thing done on. the Projects by the Lessees (ii) any breach or default on the part of the Lessees in t~e performance of any of the obligations under the Trust Agreement. (iii) any act of negligence of the Lessees or of any of ltS contractors, servants! employees or licensees with respect to the Projects (iv) any act of negligence of any assignee or sublessees of the Lesseest ar of any agents, contractors, servants. employees or licensees of any assignee or sublessees of the Lessees with respect to the Projects, or (v) the construction and acquisition of a Projects or the authorization of payment of the Acquisition Costs to the extent permitted by law. Indemnification for any tort mentioned in this Section shall be limited to the extent and in the amounts provided for by California law. No indemnification is made by the Lessees under th, s Section or elsewhere in the Trust Agreement for willful misconduct, negligence, or breach of duty under the Trust Agreement by the Trustee. its officers! agents, employees, successors or assigns. The lessees further covenant and agree to indemnify and save the Trustee and the Corporation harmless against any claim, loss, expense, advancet and liabilities which they may incur ansing out of or in the exercise and performance of their powers and duties under the Trust Agreement. including the costs and expenses (including reasonable attorneys fees and disbursements) of defending against any claim of liability, and which are not due to their negl igence or default. The lessees further covenant and agree to advance to the Trustee and the Corporatlon all amounts requested as the costs and expenses of such defense. Any and all special obligations of the lessees under this Section 609 shall be and remain valid and binding special obligations of the Lessees notwithstanding the payment 1n full of lease Payments. Exhibit C Page 25 . . . 610. Agreement to Pay Attorneyst Fees and Expenses. In the event any party hereto should default under any of the provlsions the Trust Agreement and the nondefaulting party should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred by the nondefaulting party. 611. Power of Trustee to Control Proceedings. In the event that the Trustee, upon the happening of an event of default under Section 801 of the lease Terms and Conditions (an IlEvent of Default"), with the pnor written consent of the Insurer, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties under the Trust Agreement, whether upon its own d i scret i on or upon the request of the Owners of a majori ty in principal amount of the Certificates then Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the Owners of the Certiflcates with respect to the contlnuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwlse dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Insurer or the Owners of at least a majority in principal amount of the Certiflcates then Outstanding, with the prior written consent of the Insurer, opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation. 612. Limitation on Certificate Owners' Right to Sue. No Owner of any Certlficate executed and dellvered under the Trust Agreement shall have the right to institute any suit, action or proceedlng at law or in equity, for any remedy under or upon the Trust Agreement as thl rd party benef i ci ary under and pursuant to the terms of the Lease Agreements, unless (a) such Owner shall have previously given to the Trustee written notlce of the occurrence of an Event of Default under the Trust Agreement; (b) the Owners of at least a majority in aggregate principal amount of all the Certificates then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such written request shall have been received by, and said tender of indemnlty shall have been made to, the Trustee. Such notification, request, tender of indemnity and refusal or omlssion are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of Certificates of any remedy under the Trust Agreement; it bei ng understood and intended that no one or more Owners of Certificates shall have any right in any manner whatever by his or their action to enforce any right under the Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity with respect to an Event of Default shall be instituted, had and maintalned in the manner Exhibit C Page 26 . . . herein provided and for the equal benefit of all Owners of the Outstanding Certificates. The right of any Owner of any Certificate to receive payment of said Owner's proportionate interest in the Lease Payments as the same become due, or to institute suit for the enforcement of such payment, shal1 not be impaired or affected without the consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision hereof. 613. Owners as Third Party Beneficiaries. It is acknowledged by the parties hereto that the Owners, from time to time, of the Certificates are and shall be deemed to be third party beneficiaries of the right of the Corporation to receive lease Payments under and pursuant to the Lease Agreements. 614. Institution of Legal Proceedings. If one or more events of default under the Lease Agreements or under the Trust Agreement shall happen and be continuing, the Trustee in ,ts discretion may, with the prior written consent of the Insurer, and upon the wri tten request of the Owners of a majority in principal amount of the Certificates then Outstanding, and upon belng indemnified to its satisfaction therefor, shall, proceed to protect or enforce lts rights or the rights of the Owners of Certificates by a SUlt in equity or action at law, either for the specific performance of any covenant or agreement contained here;n9 or in aid of the execution of any power herein granted, or by mandamus or other appropriate proceedlng for the enforcement of any other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its rlghts or duties hereunder. 615. Non-waiver. Nothing in this Article VI or in any other provision of this Agreement or in the Certificates shall affect or impair the obligation of the lessees or the Corporation WhlCh is absolute and unconditional, to pay the Lease Payments as provided in the Lease Agreements. No delay or omission of the Trustee or of any Owner of any of the Certificates to exercise any right or power arising upon the happening of any event of default shall impair any such right or power or shall be construed to be a waiver of any such event of default or an acquiescence therein, and every power and remedy given by this Article VI to the Trustee or to the Owners of Certificates may be exercised from time to time and as often as shall be deemed expedient by the Trustee or the Certificate Owners. 616. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee or to the Certiflcate Owners is intended to be exclusive of any other remedy, and every SuCh remedy shall be cumulative and shall be in addition to every ather remedy given hereunder or now or hereafter existing, at law or in equity or by statute or otherwlse. 617. Application of Funds. All moneys received by the Trustee pursuant to any right given or action taken under elther the provisions of this Article VI or of Article VIII of the Lease Terms and Conditions upon an event of def au 1 t under the Lease Agreements 9 shall be depos ited into the Lease Payment Account and be applied by the Trustee in the following order upon presentation of the several Certificates, and the stamplng thereon of the payment if only partially paid, or upon the surrender thereof if fully paid. Exhibit C Page 27 . . . - First, to the payment of the costs and expenses of the Trustee and of the Certificate Owners in investigating and declaring such event of default and ln enforclng the terms of this Agreement, the lease Agreements and/or other agreements relating hereto or thereto, including reasonable compensation to it or their agents, attorneys and counsel; Second, to the payment to the persons entitled thereto of all installments of interest then due in the order of the maturity of such installment, and, if the amount available shall not be sufflcient to pay in full any installment or installments maturing on the same date, then to the payment thereof ratably, according to the amounts due thereon, to the persons entitled thereto, without any discrimination or preference; and Third, to the payment to the persons entitled thereto of the unpaid principal of any Certificates which shall have become due, whether at maturity or by call for redemption, in the order of thelr due dates, with interest on the over due principal and interest at a rate equal to the interest rate paid with respect to such Certificates and, if the amount available shall not be sufficient to pay in full all the amounts due wlth respect to the Certificates on any date, together with such interest, then to the payment thereof ratably, according to the amounts of principal due on such date to the persons entitled thereto, without any discrimination or preference. 618. Rlghts of the Insurer. (a) Anything in the Trust Agreement to the contrary notwithstanding, the Insurer shall, subJect to the provlsions of paragraph (b) of this Section 618, be deemed to be the Owner of the Certificates insured by the Insurer (1) at all times for the purpose of the execution of any amendment, change or modification of the Lease Agreements or the Trust Agreement or the initiation by Owners of any action to be undertaken by the Trustee at the Owner's request, which under the Trust Agreement or the lease Agreements requires the written approval or consent of or can be initiated by the Owners of a majority in aggregate principal amount of the Certificates at the tlme Outstanding and (ii) following an Event of Default under the lease Agreements for all other purposes; (b) all rights of the Insurer under the Trust Agreement shall cease and determlne lf (i) the Insurer has failed to make any payment under the POllCY when due, (ii) the Policy shall at any time for any reason cease to be valid and binding on the Insurer or shall be declared to be null and void, or the va 1 idity or enforceabil ity of any provi sian thereof is being contested by the Insurer or the Insurer is denying liability or obligation under the Insurance Policy, (iii) a petition has been filed and is pending against the Insurer under any bankruptcy~ rearganization~ arrangement, insolvency, readjustment of debt, dlssolution or liquidation law of any jurisdictlan, whether now or hereafter in effect, and has not been dismissed within 60 days after such filing, (iv) the Insurer has filed a petition, which 15 still pending, in voluntary bankruptcy or is seeking relief under any provision of any bankruptcy, reorganlzation, arrangement, insolve~cy. readjustment of debt, dissolution or liquidation law of any Jurisdiction, whether now or hereafter in effect, or has consented to the filing of any petition against it under any such law, or (v) a receiver has been appointed for the Insurer under the lnsurance laws of any state. - Exhiblt C Page 28 . . . 619. The Insurance Policy. As long as the Insurance Policy shall be in full force and effect, the Lessees, the Corporation and the Trustee agree to comply with the following provisions: (a) If on any Due Date the Trustee determines that there wi 11 be insufficient available funds in the Lease Payment Accounts (after the transfer of any available funds from the Reserve Account pursuant to Section 306 of the Trust Terms and Conditions) to pay the principal or interest with respect to the Certificates on the next succeeding Payment Date, the Trustee shall immediately notify the Insurer by telephone (or by telex, telecopier or other electronic device as may be requested by the Insurer) to be followed by written notice by registered or certified mail. Such notice shall specify the amount of the anticipated deficiency, the Certificates to which such deficiency is appl icable and whether such Certificates wi 11 be deflcient as to principal or interest, or both. (b) The Trustee shall, after givlng notice to the Insurer as provided in (a) above. make available to the Insurer and its insurer' s disbursing agent (the "Disbursing Agent"), the Certificate Register, and all records relating to the funds and accounts maintained under the Trust Agreement. (c) The Trustee shall provide the Insurer and the Disbursing Agent with a list of Owners of Certificates entitled to receive principal or interest payments from the Insurer under the terms of the Insurance Policy~ and shall make arrangements with the Disbursing Agent (i) to mail checks or drafts to the Owners of Certificates entitled to recelVe full or partial interest payments from the Insurer, and (ii) to pay prlncipal upon Certificates surrendered to the Disbursing Agent by the Owners of Certificates entitled to receive full or part1al principal payments from the Insurer. (d) The Trustee shall, at the time it provides notice to the Insurer pursuant to (a) above~ notify Owners of Certificates entitled to receive the payment of princlpal or interest thereon from the Insurer (i) as to the fact of such entitlement, (ii) that the Insurer will remit to them all or a part of the interest payments next coming due, (iii) that should they be entitled to receive full payment of pnncipal from the Insurer, they must tender their Certificates (along with a form of transfer of title thereto) for payment to the Insurance Trustee, and not the Trustee, and (iv) that should they be entitled to receive partial payment of principal from the Insurer they must tender their Certificates for payment thereon first to the Trustee, who shall note on such Certificates the portlon of the prlncipal paid by the Trustee, and then, along wlth a form of transfer of title thereto, to the Insurer, which will then pay the unpaid portion of principal and assignment of Owners' rights. (e) The Insurer shall, to the extent it makes payment of prlncipal or interest with respect to Certiflcates, become subrogated to the rlghts of the recipients of such payments in accordance with the terms of the Insurance Policy, and to evidence such subrogation (i) in the case of subrogation as to claims for past due lnterest, the Trustee shall note the Insurer's rights as subrogee on the Certificate Register upon receipt from the Insurer of proof of the payment of interest thereon to the Owners of the Certificates, and (ii) in the case of subrogation as to clalms for past due Exhibit C Page 29 ~ ~ . . principal~ the Trustee shall note the Insurer's rights as subrogee on the Certificate Reglster upon surrender of the Certificates by the Owners thereof together with proof of the payment of principal thereof. Exh1bit C Page 30 . ARTICLE VII AMENDMENT; DEFEASANCE; ADMINISTRATIVE PROVISIONS 701. Amendments. The Trust Agreement may be amended in writing by agreement among all of the parties, but no such amendment (except as provided below) shall become effective as to the Insurer or the Owners of the Certificates then Outstanding, unless and until approved by the Insurer and the Owners of a maJorlty in aggregate principal amount of Certificates Outstanding; provided that no such amendment shall impair the right of any Owner to rece1ve his proportionate share of any Lease Payments in accordance with his Certiflcate of Parti cipation. Notwithstanding the foregoi ng, the Trust Agreement and the rights and obligations provided thereby may also be modified or amended at any time without the consent of any Owners of the Certificates, but with the prior written consent of the Insurer, but only (l) for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Trust Agreement, or (2) in regard to questions arising under the Trust Agreement which the Lessees may deem necessary or desirable and not inconslstent with the Trust Agreement and which shall not adversely affect the interests of the Owners; provided that the Corporation, the Lessees and the Trustee may rely in entering into any such amendment of the Trust Agreement upon the opinion of bond counsel whose opinion is acceptable by underwriters in the marketing of tax-exempt obligations of political subd1visions stating that the requirements of this sentence shall have been met with respect to such amendment. . Standard & Poorls Corporation shall be glven prompt written notice of any amendment of the Tru st Agreement or of the Po 1 icy. A copy of such amendment shall be sent to the Insurer. 702. Defeasance. If all Outstanding Certificates shall be paid and discharged in anyone or more of the following ways: (a) by well and truly paying or causing to be paid the princlpal of and interest with respect to all Certificates Outstanding, as and when the same become due and payable; (b) by depositing with the Trustee, in t~ust, before maturity, money which, together with the amounts which are then on deposit in the Certificate Payment Account, the Lease Payment Account and the Reserve Fund, is fUlly sufficient to pay all Certificates Outstandlng, including all principal and interest; . (c) by depositing with the Trustee, 1n trust, Federal Securities in such amount as the Trustee shall determine will, together with the interest to accrue thereon and moneys then on depos i tin the Cert if i cate Payment Account together with the interest to accrue thereon, be fully sufficient to pay and discharge all Certificates (including all principal and interest) at or before their respective maturity dates; (d) by depositing with the Trustee, under an escrow deposit and trust agreement, security for the payment of Lease Payments as more particularly Exhi blt C Page 31 - described in Section 406 of the Lease Terms and Conditions. said security to be held by the Trustee. as agent for Lessees and to be appl ied by the Trustee to Lease Payments representing the obligat1on of the Lessees under the lease Agreements. as described in Section 406 of the Lease Terms and Conditions; notwithstanding that some Certificates may not have been surrendered for payment. all obligations of the Corporatlon. the Trustee and the Lessees under the Trust Agreement with respect to all Outstanding Certificates shall cease and terminate. except only the obligation of the Trustee to payor cause to be paid to the Owners of the Certificates all sums due thereon and the ob 1 i ga t i on of the Lessees to pay the Trustee the amounts owing to the Trustee under Sections 402 and 610 of the Trust Terms and Conditions. - In the event that the prinCipal and redemption price. if applicable~ and interest due with respect to the Certificates shall be paid by Insurer pursuant to the Insurance Policy. the asslgnment made by the Corporation to the Trustee under the Trust Agreement, and all covenants. agreements and other obligatfons of the Lessees under the Lease Agreements~ shall continue in full force and effect. and the Insurer shall be subrogated to the rights of the Certificate Owners and the Trustee. as assignee of the Corporation under the Lease Agreements. Any funds held by the Trustee, at the time of one of the events described above in subsections (a), (b). (c) or (d), which are not required for the payment to be made to Owners. or for payments to be made to the Trustee by the lessees. sha 11 be pa f d over to the Lessees pursuant to written instruction from an Authorized Officer of the Corporation. . 703. records of which shall Corporation Trust~e to Keep Records. The Trustee shall keep books and all moneys received and disbursed under the Trust Agreement. be available for inspection by the Lesseest the Insurer and the at any time during regular business hours. 704. California Law. The Trust Agreement shall be construed and governed in accordance with the laws of the State of California. 705. Sever~bility. Any provision hereof found to be prohib,ted by law shall be ineffective only to the extent of such prohlbition. and shall not invalidate the remainder hereof. 706. Binding on Successors. The Trust Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. 707. ~~~c~tion in Counterparts. The Trust Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same agreement. 708. Heading~. Headings preceding the text of the several Articles and Sections the Trust Agreement, and the table of contents, are solely for convenience or reference and shall not constitute a part hereof or affect its meaning. construction or effect. . Exhibit C Page 32 ~- . . . 13050- JHHW:BDQ:rms 09/11/85 12/17/85 :mds 12/21/85 :rms 12/24/85 Z1642 EXHIBIT 0 NOTICES All notices to be given under the Trust Agreement shall be in writing and shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. If to the Corporation: California Cities Financing Corporation 1400 K Street, Suite 400 Sacramento, California 95814 Attn: Secretary City of Delano 1015 11th Avenue Delano, California 93215 Attn: Finance Director If to the Lessees: City of Fontana 8353 Sierra Avenue Fontana, California 92335 Attn: Director of Finance City of Santa Monica 1685 Main Street Santa Monlca, California 90401 Attn: Director of Finance City of Thousand Oaks 4011 West Hillcrest Drive Thousand Oaks, California 91360 Attn: Finance Director If to Trustee: First Interstate Bank of California 707 Wilshire Boulevard Los Angeles, California 90017 Attn: Corporate Trust Dept. (W10-2) USF&G Financial Security Company 601 Montgomery Street San Francisco, California 94111 Attn: General Counsel If to the Insurer: . . . ... W' 13050-5 JHHW:BDQ:rms 04/21/86 05/01/86 Z1904 SECOND LEASE AMENDMENT dated as of April 1, 1986 by and between the CALIFORNIA CITIES FINANCING CORPORATION and the CITY OF DELANO, CALIFORNIA Amending that certain Lease Agreement dated as of December 1, 1985 as amended by that certain Lease Amendment dated as of February 1, 1986 by and between the California Cities Financing Corporation and the City of Delano, California . '\ . . . SECOND LEASE AMENDMENT THIS SECOND LEASE AMENDMFNT, dated as of April 1, 1986, by and between the CALIFORNIA CITIES FINANCING CORPORATION, a nonprofit publ ic benef1t corporation duly organized and existing under the laws of the State of California, as lessor (the "Corporation"), and the CITV OF DELANO, a general law city organized and existing under the laws of the State of California (the "City"), amendlng that certain Lease Agreement, dated as of December 1, 1985, as amended by the Lease Amendment thereto, dated as of February 1, 1986, between the Corporation and the City (the "Lease Agreementll}; WIT N E SSE T H: WHEREAS, the City has, pursuant to the Lease Agreement agreed to lease that certain equipment described in Exhibit C to the Lease Agreement (the "Project II) from the Corporation and pursuant to the Lease Agreement the Corporation has agreed to lease the Project to the City; and WHEREAS, the Lease Agreement provides that all components of the Project are to be acquired on or before May 1, 1986 (the "Acquisition Datell) and that ift on the Acquisition Date, any moneys remain on deposit in the Acquisition Account established for the City under and pursuant to that certain Trust Agreement, dated as of December 1, 1985, among the City, the Corporation and First Interstate Bank of California, as trustee (the IlTrusteell) (the IITrust Agreement"), such moneys are to be used for the prepayment of lease Payments (as defined in the Lease Agreement) and for the redemption of Certificates (as defined in the Trust Ag~eement)t and WHEREAS, the City has determlned that, due to circumstances beyond its control, all components of the Project can not be acquired on or before the Acqulsltion Date; and WHEREAS, the C1ty desires to extend the Acquisition Date to a date which will permit the acquisition of the Project and will not cause a prepayment of the Lease Payments and a redemptlon of the Certificates; and WHEREAS, the City is wllling to deposit with the Trustee such moneys as are necessary to provide additional capltalized interest with respect to the Certificates for the period from May 1, 1986 to July 1, 1986; and WHEREAS, the Section 1004 of the Lease Terms and Conditions (as defined in the Lease Agreement) provides that the Lease Agreement may be amended or any of its terms modified with the written consent of the C,ty and the Corporation, provided that no such amendment shall become effective unless approved by the Trustee and the Insurer (as def,ned in the Trust Agreement); and ~ow, THEREFORE, in consideration of the above premises and of the mutual covenants herei nafter contai ned and for other good and val uab 1e consideration, the parties hereto agree as follows: - - . . SECTION 1. A~endment of the Lease Agreement. The definition of the term "Acquisition Date" as stated in Exhibit A to the Lease Agreement is hereby amended to read as follows: "Acquisition Date" means July 1, 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee, or acknowledges such prior deposit, of $2,322.92, representing additional capitalized interest with respect to the Certiflcates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from May I, 1986 to July 1, 1986. SECTION 3. ~.xecutlon in Counterparts. This Lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable Law. This lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHfREOFy the Corporation has caused this lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this Lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. Attest: ,6['l~..(.c,(l}(jvu-o<-__.... , Secretary By: CITY OF DELANO Attest: City Clerk By: . Mayor Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Tit Ie: FIRST INTERSTATE BANK OF CALIFORNIA By: Assistant Vice President -2- \,. . . _ _._......--...a-"..............~ __..... __ SECTION 1. Amendment of the Lease Agreement. The definition of the term IIAcquisition Date" as stated in Exhibit A to the Lease Agreement is hereby amended to read as follows: "Acqulsit}on Oaten means July 19 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee, or acknowledges such prior deposit, of $2,322.92, representing additional capitalized interest with respect to the Certificates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement9 for the period from May Is 1986 to July 1, 1986. SECTION 3. Execution in Counterparts. This Lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable Law. This Lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Corporation has caused this lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this Lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: By: Secretary President A~~J~ Ci ty,tClerk CITY OF DELANO By: Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Titie: fIRST INTERSTATE BANK OF CALIFORNIA By: Assistant Vice President -2- ...... ,.. . . _ ..~ -"-....L... ~ ..-.........J -~~"""""-~......~L<......_......_~_~ . - ""- ~.""-.!o_ ~-~ .....~r-~ . SECTION 1. Amendment of the lease Agreement. The definition of the term IIACQuisition Date" as stated in Exhibit A to the lease Agreement is hereby amended to read as follows: "Acquisition ,Date" means July 1, 1986. SECTION 2. Additional Capitalized Inter~st. The City hereby deposits with the Trustee, or acknowledges such prior deposit, of $2,322.92, representing additional capitalized interest with respect to the Certificates for deposit to the lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from May 1, 1986 to July 1, 1986. SECTION 3. ~~ecution in Counterparts. This lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable law. This lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOFt the Corporation has caused this Lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this Lease Amendment to be executed and attested in its name by its duly Authorized Offlcers and sealed with its corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: By: Secretary President CITY OF DELANO Attest: By: City Clerk Mayor Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: ~~ .<:C/-It<..A ~e: Attorne)'~lnAFKt FIRST INTERSTATE BANK OF CALIFORNIA By: Assistant Vice President -2- v. . SECTION 1. Amendment of the lease Agreement. The definitlon of the term "Acquisition Date" as stated in Exhibit A to the Lease Agreement is hereby amended to read as.follo~s: "~cguisition Date" means July 1. 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee. or acknowledges such prior depositt of $2,322.92, representing additional capitalized interest with respect to the Certificates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from May i, i986 to July i, 1986. SECTION 3. ~xecution in Counterparts. This lease Amendment may be executed in several counterpartst each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable Law. This lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Corporation has caused this lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this Lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with lts corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: By: Secretary President C!TY OF DELANO Attest: By: City Clerk Mayor Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Ti~ Ie: FIRST INTERSTATE BANK OF CALIfORNIA By: "../!JICrJJd ,/.}~--e.(.: /!r- Assistinr Vic~-President -2- ~ ~ . . f 13050-5 JHHW:BDQ:rms 02/26/86 Z1834 LEASE AMENDMENT dated as of February 1, 1986 by and between the CALIFORNIA CITIES FINANCING CORPORATION and the CITY OF DELANO, CALIFORNIA Amending that C€rtaln Lease Agreement dated as of December 1, 1985 by and between the California Cities Financing Corporation and the City of Delano, Californla , .. . . LEASE AMENDMENT THIS LEASE AMENDMENT, dated as of February 1, 1986, by and between the CALIfORNIA CITIES fINANCING CORPORATION, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California, as lessor (the "Corporation"), and the CIrV OF DELANO, a general law city organized and existing under the laws of the State of California (the "City"), amending that certain Lease Agreement, dated as of December 1, 1985, between the Corporation and the City (the "Lease Agreement"); WIT N E SSE T H: WHEREAS, the City has, pursuant to the Lease Agreement agreed to lease that certain equipment described in Exhibit C to the Lease Agreement (the "Project") from the Corporation and pursuant to the tease Agreement the Corporation has agreed to lease the Project to the City; and WHEREAS, the Lease Agreement provides that all components of the Project are to be acquired on or before February 25. 1986 (the "Acquisition Datell) and that if, on the Acquisition Date, any moneys remain on deposit in the Acquisition Account established for the City under and pursuant to that certain Trust Agreement, dated as of December 1. 1985. among the City. the Corporation and Flrst Interstate Bank of California, as trustee (the "Trustee") (the 'ITrust Agreement"), such moneys are to be used for the prepayment of lease Payments (as defined in the Lease Agreement) and for the redemption of Certificates (as defined in the Trust Agreement; and WHEREAS, the City has determined that, due to circumstances beyond its control, all components of the Project can not be acquired on or before the Acquisition Date; and WHEREAS. the City desires to extend the Acquisition Date to a date wh i ch wi 11 permi t the acqu; s ~ t i on of the Project and wi 11 not cause a prepayment of the Lease Payments and a redemption of the Certificates; and WHEREAS, the City is willing to deposit with the Trustee such moneys as are necessary to provlde additional capitalized interest wlth respect to the Certificates for the period from March 1~ 1986 to May 1. 1986; and WHEREAS, the Section 1004 of the lease Terms and Conditions (as def; ned in the Lease Agreement) prov; des that the Lease Agreement may be amended or any of its terms modified with the written consent of the City and the Corporation, provided that no such amendment shall become effective unless approved by the Trustee and the Insurer (as defined in the Trust Agreement); and NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration. the parties hereto agree as follows: . . . SECTION 1. Amendment of the Lease Agreement. The definition of t~e term UAcquisition Date 'I as stated in Exhibit A to the Lease Agreement 1S hereby amended to read as follows: Il~cquisition Dat~" means May 1, 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee, or aCknowledges such prior deposit, of $2,322.92, representing additional capital1zed interest with respect to the Certificates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from March 1, 1986 to May 1, 1986. SECTION 3. Execution in Counterparts. This Lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable Law. This Lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Corporation has caused this Lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. Attest: /~c~(fl-t~,- Secretary CALIFORNI~ITIES ~[N:::L~ATION By: &uW!I/t-A. '1 . pre~nf. 'V CITY OF DELANO Attest: By: City Clerk Mayor Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Title: FIRST INTERSTATE BANK OF CALIFORNIA By: Assistant Vice President -2- . . . ~ SECTION 1. Amendment of the Lease Agreement. The definition of the term l'Acqu i s it ion Date II as stated in Exh i bit A to the Lease Agreement is hereby amended to read as follows: "Acquisitiot:l Daten means May 1, 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee~ or acknowledges such prior deposit, of $2,322.92, representing additional cap1tal1zed interest with respect to the Certificates for deposit to the lease Payment Account relating to the City estab 1 i shed pursuant to the Trust Agreement, for the period from March I, 1986 to May 1, 1986. SECTION 3. Execution in Counterparts. This Lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable law. This lease Amendment shall be governed by and construed in accordance w1th the laws of the State of California. IN WITNESS WHEREOF, the Corporation has caused this lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: By: Secretary President A"~J 4~ By: ~~~rk CITY OF DELANO Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Title: FIRST INTERSTATE BANK Of CAlIFORNrA By: Assistant Vlce President -2- ~J. . . SECTION 1. Amendment of the Lease Agreement. The definition of the term "Acquisition Oatelt as stated in Exhibit A to the lease Agreement is hereby amended to read as follows: lIAcquisition Datell means May 1, 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee, or acknowledges such prior deposit, of $2,322.92, representing additional capitalized interest with respect to the Certificates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from March 1, 1986 to May 1, 1986. SECTION 3. Execution in Counterparts. This Lease Amendment may be executed in several counterparts, each of which shall be an original and all of whicn shall constitute but one and the same instrument. SECTION 4. Applicable Law. This Lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF, the Corporation has caused this Lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: By: Secretary President CITY OF DELANO Attest: By: City Clerk Mayor Approved: UNITED STATES fIDELITY & GUARANTY COMPANY h~ -y" , ~' By:, ,( . Title: \1 \ ~ ~(,~\ 1.e..~~ FIRST INTERSTATE BANK OF CALIFORNIA By: Asslstant Vice President -2- .-... ~ . . .... SECTION 1. Amendment of the lease Agreement. The definition of the term IIAcqui sit ion Datell as stated in Exhi bit A to the lease Agreement is hereby amended to read as follows: "Acquisition Date" means May 1, 1986. SECTION 2. Additional Capitalized Interest. The City hereby deposits with the Trustee~ or acknowledges such prior deposit, of $2,322.92. representing additional capitalized interest with respect to the Certificates for deposit to the Lease Payment Account relating to the City established pursuant to the Trust Agreement, for the period from March 1, 1986 to May 1, 1986. SECTION 3. Execution in Counterparts. This lease Amendment may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4. Applicable law. This lease Amendment shall be governed by and construed in accordance with the laws of the State of California. IN WITNESS WHEREOF. the Corporation has caused this Lease Amendment to be executed in its corporate name by its duly Authorized Officer; and the City has caused this lease Amendment to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal, as of the date hereinabove stated. CALIFORNIA CITIES FINANCING CORPORATION Attest: Secretary By: President CITY OF DELANO Attest: By: City Clerk Mayor Approved: UNITED STATES FIDELITY & GUARANTY COMPANY By: Title: FIRST INTERSTATE BANK OF CALIFORNIA By: _ _ lR~ /lIkJ:t- ASslstar.tfV~ce/PreSldent -2- . . .....,..,,/..Jv-~ JHHW:BDQ:rms 11/19/85 12/17/85 :mds 12/22/85 :rms 12/24/85 Z1632 LEASE AGREEMENT Dated as of December 1, 1985 by and between CALIFORNIA CITIES FINANCING CORPORATION and the CITY OF DELANO, CALIFORNIA CALIFORNIA CITIES FINANCING CORPORATION POOLED FINANCING, 1985 SERIES E . . . TABLE OF CONTENTS SECTION 1.1 Definitions............~........4....................... SECTION 1.2 Exhibits.._...................................*......... SECTION 1.3 Agreement to Lease...................................... SECTION 1.4 Lease Payments.......................................... SECTION 1.5 Not1ces................................................. SECTION 1.6 Terms and Conditions.................................... Exhibit A - Definitions Exhibit B - Schedule of Lease Payments Exhibit C - Description of Project Exhibit D - Lease Terms and Conditions Article I - Definitions Article II - Representations~ Covenants and Warranties Article III - Deposit of Monies; Acquisition of the Project Article IV - Agreement to Lease; Termination of Lease Agreement; Lease Payments; Title to the Project Article V - Maintenance; Taxes; Insurance; and ather Matters Article VI - Disclaimer of Warranties; Access Article VIr - Assignment, Subleasing and Indemnification Article VIII - Events of Default and Remedies Article IX - Miscellaneous Exhibit E - Addresses for Notice Purposes Exhibit f - Contracts Assigned to Corporation Exhibit G - Description of Previously Acquired Portion of Project (i) Page 2 2 2 2 2 2 . . . LEASE AGREEMENT THIS LEASE AGREEMENT, dated as of the Oated Date, by and between the CALIFORNIA CITIES FINANCING CORPORATION, a nonprofit public benefit corporation duly organized and existing under the laws of the State of California, as lessor (the IlCorporation"), and the CITY OF DELANO, a Political Subdivision, duly organized and existing under the laws of the State of California (the "Lessee"); WIT N E SSE T H: WHEREAS, the Lessee wishes to acquire that certain property described in Exhibit C hereto (the "Project") and the Lessee is authorized pursuant to the laws of the State of California to enter into leasehold agreements for such purposes; and WHEREAS, the Governing Body of the Lessee has determined that, in order to accomplish such purposes, it ;s necessary and desirable to acquire the Project by leasing the same pursuant to this Lease Agreement; and WHEREAS, the Corporation will cause to be deposited with the Trustee funds for the acquisition of the Project to be leased pursuant to this Lease Agreement; NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: ..-... ..... . . DEFINITIONS AND EXHIBITS SECTION L 1. Definitions. Unl ess the contex.t atherw1 se requires, capitalized terms used herein and in the Lease Terms and Conditions, have the meanings specified in Exhibit A. All terms not defined herein shall have the meanings ascribed to them in the Trust Agreement. SECTION 1.2. Exhibits. The following Exhibits are attached to, and by reference made a part of, this Agreement: Exhibit A: Definitions. Exhibit B: Schedule of Lease Payments to be paid by the Lessee to the Trustee, as assignee of the Corporation, showing the Due Date and amount of each Lease Payment. Exhibit C: Description of the Project. Exhibit 0: Lease Terms and Conditions. Exhibit E: Addresses far Notices. Exhibit F: Contracts Assigned to Corporation. Exhibit G: Description of Previously Acquired Portion of Project. SECTION L3. Agreement to Lease. The Corporation hereby agrees to lease the Project to the Lessee and the Lessee hereby agrees to lease the Project from the Corporation. SECTION 1.4 ~ease Payments. As rental for the Project, the Lessee agrees to pay to the Corporation or its assigns, on the Due Dates, the Lease Payments in the amounts shown on Exhibit B. SECTION 1. 5. Term of Agreement. The Term of thi s Lease Agreement shall commence as of the Dated Date and shall end on the Tenminatlon Date, unless on such date any Certiflcates of Participation remain outstanding, in which case this Lease Agreement shall remain in full force and effect while any Certificates of Participation are outstanding or unless terminated prior thereto in accordance with Section 402 of the lease Terms and Conditions. SECTION 1.6. Terms and Conditions. The parties hereto agree that this Lease Agreement is expressly subject to the provisions of the lease Terms and Conditions attached hereto as Exhibit 0, the provisions of which are herein incorporated as though fully set forth herein. -2- . . . IN WITNESS WHEREOF. the Corporation has caused this Lease Agreement to be executed in its corporate name by its duly Authorized Officer; and the Lessee has caused thi s Lease Agreement to be executed and attested in its name by its duly Authorized Officers and sealed with its corporate seal. as of the Dated Date. CALIFORNIA CITIES FINANCING CORPORATION (5 E A L) Attest: ~.v~t?if:6~ -~ecretary Q-;eR~ tfL-;f/ -- , - pr~nt By: CITY OF DELANO (S E A L) Attest: By: City Clerk Mayor -3- IN WITNESS WHEREOF. the Corporation has caused this Lease Agreement to be executed in its corporate name by its duly Authorized Officer; and the lessee has caused this Lease Agreement to be executed and attested 1n its name by its duly Authorized Officers and sealed with its corporate seal. as of the Dated Date. . CALIFORNIA CITIES FINANCING CORPORATION (5 E A L) Attest: By: Secretary President ~ 1 CITY Of DELANO Attest: J" 8y: )f~~f 1;d4.;L~ v --=- Mayor - . -3- . . . EXHIBIT A DEFINITIONS - CITY OF DELANO JlAcquisition Costs" meanS9 with respect to the Project9 the contract pri ce pa i d or to be paid to the Contractors therefor upon acqu is it i on, construction, lnstallation or delivery of any portion of the Project and related equipment, if any, in accordance with the purchase order or contract therefor. Acquisition Costs include the costs of site preparation necessary for the installation of the Project, as well as the administratlve, engineering, legal, financial, title insurance and other costs lncurred by the Lessee, the Corporation and the Contractors in connection wlth the acqulsition9 construction, delivery and installation by the Corporation of the Project. IlAcqulsition Date" means February 259 1986. "Business Day" means any day of the year other than a Saturday, a Sunday, a day on which the New York Stock Exchange is closed or any day on which the Trustee is not open for business. "Code" means the Internal Revenue Code of 1954 as amended. Any citation to a provislon of the Code shall be deemed to include the applicable regulations of the United States Department of the Treasury promulgated with respect to such provislon. "Corporation Representative" means the President of the Corporation or hlS designee9 or any other person authorized to act on behalf of the Corporation with respect to the Lease Agreement. IICertificate of Completion" means a certificate of the Lessee Representat i ve cert i fyi ng that all equ 1 pment and other persona 1 property const Hut i ng a portion of the Project has been acqui red, ; nsta 11 ed and accepted by the Lessee, and that all Acqulsition Costs have been paid. "Certiflcates of ParticipationJl or "Certlficates" means the Certificates of Participatlon to be executed and delivered pursuant to the Trust Agreement and which evidence a right to receive a proportlonate share of Lease Payments and proceeds received on account of the Lease Agreements. "Closing Date" means the date when the Certificates of Participation, duly executed by the Trustee, are delivered to the original purchaser thereof. "Contractors" means the contractors or vendors from whom the Corporation or the Lessee on behalf of the Corporation has ordered or caused to be ordered or with whom the Corporation or the Lessee on behalf of the Corporation has contracted or caused to be contracted for the acqu1s1tion~ construction and installation of the Project. "CorporationU means the California Citles Flnanclng Corporat10n9 a nonprofit public benefit corporation duly organlzed and existing under the laws of the State of Californla. Exhiblt A Page 1 . . . "Dated Date" means December 1, 1985. "Due Datesl1 means May 15 and November 15t commencing May 15t 1986. "Federal Securities" means direct obligations of (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States), or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America. JlGoverning Body" means the City Council of the Lessee. "Independent Counse111 means an attorney duly admitted to the practice of law before the highest court of the State of California and who is not an employee of the Corporation, the Trustee or the Lessee. "Insurance Consultantll means any person or firm knowledgable with respect to insura.nce carried by, required for and available to Political Subdivisions. "Insurance and Condemnation Fundll means the fund by that name established and held by the Trustee pursuant to Section 4.6 of the Trust Agreement. lJlnsurance Policyll or IJpolicyll means Financial Guaranty Bond No. 99- 0110-00022-86 issued by the Insurer gUdranteei ng the payment of princi pa 1 and interest when Due for Payment (as defined in the POlicy) with respect to the Certificates. "Insurer" means United States Fidelity & Guaranty Company, and its successors and assigns. I1Lease Agreementl1 or II Agreement" means this Lease Agreement, and any duly authorized and executed amendment hereto. II Lease Agreements" means the several Lease Agreements, each dated as of the Oated Date, between the Corporation and the Cities of Delan09 Fontana, Santa Monica and Thousand Oaks, respectively. ULease Payment II means any payment due from the Lessee to the Corporatlon under Section 1.4 of the Lease Agreement and Section 403 of the Lease Terms and Conditions. lfLease Terms and Conditionsfl means those certain Lease Terms and Conditions attached to the Lease Agreement as Exhiblt D. "Lesseeu means the City of Delano, Ca1ifornla, a general law city, duly organlzed and existing under the laws of the State of California. II Lessee Representat i veil means the Mayor, City Manager or F; nance Director, or an assistant designated by the Governing Body of the Lessee to act on behalf of the Lessee under or with respect to the Lease Agreement. Exhl bit A Page 2 - IILessee's Acquisition Accountll means the Acquisition Account established and held by the Trustee for the Lessee pursuant to Section 2.5 of the Trust Agreement. ~ 'r~essee r S Lease Payment Accountrr means the Lease Payment Account established and held by the Trustee for the Lessee pursuant to Section 2.7 of the Trust Agreement. "Lessee's Reserve Account" means the account by that name established and held by the Trustee pursuant to Section 2.10 of the Trust Agreement. "Net Proceeds'l means any property or casualty insurance proceeds pald wlth respect to the Projectt remaining after payment therefrom of all expenses incurred ln the collection thereof. UOwner" or UCertificate Ownerll or "Owner of a Certificate,rr or any simi1ar~m, when used with respect to the Certificatest means the registered owner of any Certificate. IIpayment Oates" means June 1 and December 1, commencing August 1, 1986. UPermitted Encumbrancesll means, as of any particular time: (i) liens for general ad valorem taxes and assessmentst if anYt not then delinquentt or which the Lessee may, pursuant to provisions of Article V hereof, permit to remain unpaid; (ii) the Lease Agreement; and (iii) the Trust Agreement. . npolitical Subdivisionll means a public agency deemed to be a Upolitical subdivision" of the State of Califorma, as that term is used in Section 103 of the Code. "Principal Amount" means the total unpaid principal portion of the Lease Payments due under the Lease Agreement. nproJectll means that certain equipment to be acquired from the proceeds of the Certificates deposlted in the Lesseefs Acquisition Account, as shown on Exhibit C. "Reserve Fund" means the fund by that name established and held by the Trustee pursuant to Section 2.10 of the Trust Agreement. I1Term of the Agreement 11 or II Term" means the time during which the Lease Agreement is in effect, as provided for in Section 1.5 of the Lease Agreement. "Termination Oaten means December 1, 1990. IITrust Agreement" means the Trust Agreement 9 dated as of the Oated Datet by and among the Trustee9 the Lessees and the Corporatlon, and any duly authorized and executed amendment thereto. . UTrustee" means First Interstate Bank of California, as trustee, appointed under the terms of the Trust Agreement. Exhibit A Page 3 - - . . EXHIBIT B CITY OF DELANO SCHEDULE OF LEASE PAYMENTS Principal Interest Total Due Date Component Component Lease Payment May 15, 1986 $6,968.75 $ 6,968.75 November 15, 1986 $40,000 6,968.75 459968.75 May 159 1987 5,818.75 5,818.75 November 15, 1987 40,000 59818.75 45,818.75 May 15, 1988 4,568.75 49568.75 November 15, 1988 40,000 4,568.75 44,568.75 May 15, 1989 3,268.75 3,268.75 November 15, 1989 45,000 3,268.75 48,268.75 May 159 1990 19750.00 1,750.00 November 15, 1990 50,000 19750.00 51,750.00 Exhiblt B Page 1 . . . EXHIBIT C DESCRIPTION OF PROJECT Two (2) new 24 cubic yard capacity refuse disposal trucks. The combined cost of the two trucks is $171,716, with delivery expected on or about March 19 1986. Exhlblt C Page 1 . . . 13050-5 JHHW:BDQ:rms 11/19/85 12/22/85 12/27/85 Z1638 EXHIBIT 0 LEASE TERMS AND CONDITIONS . . . EXHIBIT D TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Oef i nit i ens.. . . . . . . . . ... . ... . . .. . . . . . . .. . .. . oil .. .. . . . .. . .. . .. ... . ... . .. .. .. . ... . .. . . . . . . . . . . . . .. D-1 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 201 Representations, Covenants and Warranties of the Lessee.......................................... 0-2 SECTION 202 Representations, Covenants and Warranties of the Corporation..................................... 0-2 SECTION 301 SECTION 302 SECT ION 303 SECTION 401 SECTION 402 SECTION 403 SECTION 404 SECTION 405 SECTION 406 SECTION 407 ARTICLE I II DEPOSIT OF MONIES; ACQUISITION OF THE PROJECT Deposit of Monies....................................... D-4 Acquisition of the Project.............................. 0-4 Payment of Acquisitlon Costs............................ 0-5 ARTICLE IV AGREEMENT TO LEASE; TERMINATION OF THE LEASE AGREEMENT; LEASE PAYMENTS; TITLE TO THE PROJECT Agreement to Lease...................................... D-6 Termination of the Lease Agreement...................... 0-6 Lease Payments.................. III . ... . ... ... .. . . .. . . . . . . " . .. .. .. .. . .. . ... .... 0-6 Possession and EnJoyment................................ 0-7 Title to the Project.................................... 0-7 Security Deposit........................................ 0-8 Abatement of Rental in the Event of Failure to Have Use and Possession of the ProJect................ 0-8 (i) ... ~ . . SECTION 501 SECTION 502 SECTION 503 SECTION 504 SECTION 505 SECTION 506 SECTION 507 SECTION 508 SECTION 509 SECTION 510 SECTION 511 SECT ION 512 SECTION 601 SECTION 602 SECTION 603 SECTION 701 SECTION 702 SECTION 703 SECTION 801 SECTION 802 SECTION 803 SECTION 804 SECTION 805 Page ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS Ma i ntenance and Taxes................................... 0-10 Modification of Project................................. 0-10 Public Liability and Property Damage Insurance. .. . . . .. .. . . .. If, . . . .. . .. .. . .. . .. .. .. . . . . . .. .. .. . . .. .. .. . .. . . .. . .. D-11 Fire and Extended Coverage Insurance.................... D-l1 Rental Interruption Insurance........................... 0-12 Insurance Net Proceeds; Form of Policies................ 0-12 Advances................................................. 0-13 liens... .. .. .. . .. III " III .. . . . . .. . .. . . . .. . .. .. .. . .. . .. . . .. . .. .. .. .. . .. . .. .. III . . . .. . . ... 0-13 Eminent Domain."...... oj....................................,.............. 0-13 Application of Net Proceeds............................. 0-14 Title Insurance.......~~.w~...w.......~................. 0-14 Agreement to Pay Trustee1s Fees......................... 0-14 ARTICLE V I DISCLAIMER OF WARRANTIES; ACCESS Disclaimer of Warranties................................ 0-15 Lessee's Right to Enforce Warranties.................... 0-15 Corporation and Insurer Access to the PrOJect........... 0-15 ARTICLE VI I ASSIGNMENT, SUBLEASING AND INDEMNIFICATION Assignment by the Corporation........................... 0-16 Assignment and Subleaslng by the Lessee................. 0-16 Release and Indemnification Covenants................... 0-15 ARTICLE VI I I EVENTS OF DEFAULT AND REMEDIES Events of Default Defined............................... 0-18 Remedies on Default..................................... 0-18 No Remedy Exclusive..................................... 0-19 Agreement to Pay Attorneys I Fees and Expenses........... 0-19 No Addltional Waiver Implied by One Waiver.............. 0-19 ( i i) ........ ~ . . Page ARTICLE XI OPTION TO PURCHASE; OPTION TO PREPAY SECTION 901 SECTION 902 SECTION 903 SECTION 904 Purchase Option...............................~.......... 0-20 Exercise of Option.....6................................. 0-20 Transfer of Title and Release of Corporation's Interest................................. 0-20 Opt1on to Prepay...................6..................... 0-20 ARTI CLE X MISCELLANEOUS SECTION 1001 Notices...~~...........................................~ 0-22 SECTION 1002 Binding Effect.......................................... 0-22 SECTION 1003 Severabllity............................................ 0-22 SECTION 1004 Amendments, Changes and Modlfications................... 0-22 SECTION 1005 Net-net-net Lease....................................... 0-22 SECTION 1006 Further Assurances and Corrective Instruments........... 0-22 SECTION 1007 Execution in Counterparts............................... 0-22 SECTION 1008 Applicable Law.......................................... D-22 SECTION 1009 Corporation and Lessee Representatives.................. 0-22 SECTION 1010 Captions................................................ 0-23 (ill) . . . ARTICLE I DEFINITIONS Definitions. Unless the context otherwise requires9 capitalized terms used herein shall have the meanings ascribed to them in Exhiblt A to the Lease Agreement. Exhiblt 0 Page 1 . ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 201. Representations, Covenants and Warranties of the Lessee. The Lessee represents, covenants and warrants to the Corporation as follows: {a} The Lessee is a dUly organized and val idly existing Pol itical Subdivision of the State of California. (b) The constitution and the laws of the State of California authorize the Lessee to enter into the Lease Agreement and the Trust Agreement and to enter into the transactlons contemplated by and to carry out its obligations under each of the aforesaid Agreements, and the Lessee has duly authorized and executed each of the aforesaid Agreements 1n accordance with the laws of the State of California. . (c) Neither the execution and delivery of the Lease Agreement or the Trust Agreement nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results 1n a breach of the terms, conditions or provisions of any restrict10n or any agreement or 1 nstrument to wh; ch the Les see is now a party or by wh i ch the Lessee 1 s bound, or constitutes a default under either of the foregoing, or results 1n the creation or imposition of any 1 ien. charge or encumbrance whatsoever upon any of the property or assets of the Lessee, or upon the Project, except Permitted Encumbrances. SECTION 202. Representations, Covenants and Warranties of the Corporation. The Corporation represents, covenants and warrants to the Lessee as follows: . (a) The Corporation lS a nonprofit public benef1t corporation duly organized9 existlng and in good standing under and by virtue of the laws of the State of Ca1ifornla; has power to enter into the Lease Agreement and the Trust Agreement; is possessed of full power to own and hold real and persona 1 property and to 1 ease and se 11 the same; and has du 1 y author i zed the execution and delivery of all of the aforesaid Agreements. (b) The Corporation will not pledge the Lease Payments or other amounts derived from the Project and from its other rights unde~ the Lease Agreement9 and will not encumber the Project, except as provided under the terms of the Lease Agreement and the Trust Agreement. (c) Neither the execution and delivery of the Lease Agreement or the Trust Agreement. nor the fulfillment of or compl i ance with the terms and conditions hereof or thereof. nor the consummation of the transactions contemplated hereby or therebY9 conflicts with or results in a breach of the terms. conditions or provisions of any restriction or any agreement or instrument to which the Corporation is now a party or by Wh1Ch the Corporation is bound, or constitutes a default under either of the foregoing9 or results in the creation or 1mposition of any lien, charge or Exh1bit 0 Page 2 . . . encumbrance whatsoever upon any of the property or assets of the Corporation9 or upon the Project, except Permitted Encumbrances. (d) Except as provided in the Lease Agreement and in the Trust Agreement, the Corporation will not assign the Lease Agreernent9 its right to receive lease Payments from the Lessee, or its duties and obligations under the Lease Agreement to any other person, firm or corporation so as to lmpair or violate the representations, covenants and warranties contained in this Section 202. Exhlbit D Page 3 . . . ARTICLE II I DEPOSIT OF MONIES; ACQUISITION OF THE PROJECT SECTION 301. Deposit of_Monies. On the Closing Date, the Corporation shall cause to be deposlted with the Trustee the amount specified in Section 2.3 of the Trust Agreement. Pursuant to the Trust Agreement, there shall be deposited in the Lessee's Acquisition Account funds which, together with investment earnings thereon, will be sufficient to pay Acquisition Costs. SECTION 302. Acquisition of the Project. The Lessee will, as agent of the Corporat ion, enter into purchase orders and contracts, and wi 11 supervise and provide for, or cause to be supervised and provided for, as agent for the Corporation, the complete construction, acquisitlon and installation of the Project. The Lessee agrees that it will cause the work under sald contracts to be diligently performed after the deposit of funds with the Trustee pursuant to Section 2.3 of the Trust Agreement, and that the Project will be acquired and lnstalled in accordance wlth the specifications approved by the Lessee on or prior to the Acquisition Date. The Lessee may change the speciflcations of the Project 9 so long as such change does not reduce the value of the Project or substantially alter the nature of the ProJect, and that any increase in Acquisition Costs shall not result from such change9 unless the Lessee deposlts in the Lessee1s Acquisition Account an amount sufficient to pay such increase. In addition, in the event that the costs of acquiring the Project are greater than the amount of money deposited in or transferred to the Lessee's Acquisition Account, together with investment earm ngs thereon, the Lessee agrees to deposit into the lessee's Acqulsition Account an amount of money necessary to pay such increased Acquisition Costs, but only from funds arising in the fiscal year in which the Lessee has entered into the lease Agreement. The Lessee agrees that upon substantial construction, acquls1tlon and installation of any discrete portion of the Project, it will take possess1on of that portion of the Project under the terms and provisions of the Lease Agreement and agrees to make the payments specified herein. The lessee does hereby se 11, ass; gn dnd transfer to the Corporat; on a 11 of its ri ghts under the contracts Wl th respect to the port ion of the Project for which the Lessee has contracted prior to the Closing Date, if any, which contracts are attached to the Lease Agreement as Exhibit F. The lessee hereby agrees to transfer and convey to the Corporation tltle to the portion of the Project acquired prlor to the Closing Oate9 which portion of the Project is more partlcularly described in Exhibit G to the Lease Agreement. Upon completion of acquisition and installation of the ProJect reasonably satisfactory to the Lessee9 but in any event not later than the Acquisition Date, the lessee shall deliver to the Trustee a Certificate of Completion. If, on the Acquisition Date, moneys are remalning on deposit in the Acquisltion Account, such moneys shall be transferred to the Lessee1s lease Payment Account and shall be applied, on the next succeeding Due Date, as a Exhi bit 0 Page 4 ~ ...... . . prepayment of lease Payments and on the next succeeding Payment Date to the redemption of Certificates pursuant to the provisions of Section 512(c) of the Trust Terms and Conditions. The part i es agree that the Lease Agreement shall be deemed to be effective as to each component of the Project as it is canstructed9 acquired or installed, and upon acceptance of a discrete portion of the Project, the lessee agrees to del iver to the Trustee a certificate of acceptance (a PCertificate of Acceptance") which Certificate of Acceptance shall indlcate the proportionate amount of the Lessee's Project sa accepted and agrees that a portion of the Lease Payments shown on Exhibit B to the Lease Agreement (which Lease Payments include amounts allocable to the lessee1s proportionate share of Costs of Issuance and the discount taken by the original purchaser(s) of the Certificates} (in an amount proportionate to the discrete portion of the Project accepted and as indicated in the Certificate of Acceptance) represent valid rental value for such discrete portion of the Project. SECTION 303. Payment of Acquisition Costs. Payment to the Contractors of the cost of constructing, acquiring and installing the ProJect shall be made from the monies deposited in the Lesseels Acquisition Account as provided in Section 2.5 of the Trust Agreement, which shall be disbursed only for this purpose in accordance and upon compliance with Section 301 of the Trust Terms and Conditlons. Exhi bit 0 Page 5 . . . ARTICLE IV AGREEMENT TO LEASE; TERMINATION OF LEASE AGREEMENT; LEASE PAYMENTS; TITLE TO THE PROJECT SECTION 401. Agreement to Lease. The 1 ease of the Project by the Corporation to the Lessee is made expressly subject to the terms and cond,tions set forth herein. SECTION 402. T~r~ination of Lease Agreement. The Term of the Lease Agreement will terminate upon the earliest of any of the following events: (a) the payment or prepayment by the Lessee of all Lease Payments due during the Term of the Agreement; (b) the occurrence of an event of default under the Lease Agreement, and the termination of the lease Agreement by the Corporation or its assignee pursuant to Section 802(iii) of the Lease Terms and Conditions. (c) the Project ;s taken in whole pursuant to the power of eminent domain and termination of the Lease Agreement pursuant to Section 509 of the Lease Terms and Condltions; or Upon occurrence of an event wh1ch will result in termination of the Lease Agreement, the Trustee will not make any further disbursements fro~ the Lessee's Acquisition Account and all amounts at the time in such Acquisition Account will be transferred. as provided in the Trust Agreement, to the Lessee's Lease Payment Account to be credited against the lessee's Lease Payment obligations or to the Lessee's Redemption Account to be appl1ed to redemption of the Certificates. SECTION 403. lease Payments. The Lessee agrees to pay to the Corporation or its successors and assigns9 as rental for the use and pas ses s i on of the Project J the Lease Payments on the Due Dates 1 n the amounts specified in Exhibit B to the Lease Agreement, provided that the Lessee shall receive a credit for any amounts on hand in the Lessee's Lease Payment Account at the time any lease Payment is due. and that at such tlme as the monies on hand in the Lessee's lease Payment Account and the Lessee1s Reserve Account are eQua 1 to a 11 Lease Payments rerna i n i ng unpa i d, su ch monies shall be applied by the Trustee9 pursuant to Section 306(d) of the Trust Terms and Conditions, to such Lease Payments on behalf of the Lessee, and the Lessee shall not be required to make any further Lease Payments under the Lease Agreement. A Lease Payment payab le on a Due Date is in consideration for use and possession of the Project to the next occurring Payment Date. Lease Payments for each annual rental period duri ng the Term of the Agreement shall constitute the total rental for said rental period and shall be paid by the Lessee in each rental period for and in consideration of the right of the use and possess10n of, and the continued quiet use and enjoyment of, the Project durlng each such period for which said rental 15 to be paid. The parties hereto have agreed and determined that such total Exh,bit 0 Page 5 ..-.. "... . . rental represents the fair rental value of the Project. In maklng such determinat1on, consideration has been gwen to the costs of acquisition, construction9 delivery, installation and flnancing of the Project, other obligations of the parties under the Lease Agreement~ the uses and purposes which may be served by the Project and the benefits therefrom which wi 11 accrue to the Lessee and the general public. Each Lease Payment shall be paid in lawful money of the United States of America to or upon the order of the Corporation at the corporate trust office of the Trustee. Any such installment of rental accruing under the Lease Agreement which shall not be paid when due shall bear interest at the rate of ten percent (lO%) per annum from the date when the same is due under the Lease Agreement until the same shall be paid. Lease Payments shall be paid from any source of legally available funds of the lessee and so long as the Project is available for the Lessee's use, the Lessee covenants to take such action as may be necessary to include all Lease Payments due under the lease Agreement in its budgets, and to make the necessary appropriations for all such lease Payments; which covenants of the Lessee shall be deemed to be, and shall be, ministerial dutles imposed by law, and it shall be the duty of each and every public official of the Lessee to take such action and do such things as are required by law in the performance of the official duty of such offlcials to enable the Lessee to carry out and perform the covenants made by the Lessee in the Lease Agreement. During the Term of the Agreement, the Lessee will furnish to the Trustee9 no later than 20 days following adoptlon of the budget for any fiscal period, a Certificate of the Lessee Representative to the effect that the Lease Payments due in that fiscal period have been included in the budget approved by the Governing Body for such fiscal perlod. To the extent that monies are available in the Lessee1s Lease Payment Account. the Lessee's Reserve Account and the Lessee1s Acquisition Account for such purpose, the Lessee agrees to pay lease Payments from such sources regardless of whether or not it has acqulred the Project. SECTION 404. Possession and Enjoyment. During the Term of the Agreement, the Corporation shall provide the lessee with qUlet use and enjoyment of the Project, and the Lessee shall, during such Term, peaceably and qui et ly have and hold and enjoy the Project, wi thout 5U it, troub 1 e or hindrance from the Corporation, except as expressly set forth in the Lease Agreement. The Corporation wil19 at the request of the Lessee and at the Lessee1s cost, join 1n any legal action in which the Lessee asserts its right to such possession and enJoyment to the extent the Corporat ion may lawfully do so. Notwithstanding the foregoing, the Corporation shall have the right to inspect the Project as provided in Section 603 of the lease Terms and Conditions. SECTION 405. Title to the Project. During the Term of the Agreement9 title to the Project and any and all additions, replacements or modifications thereto will be retained by the Corporation, except as provided below and except for those modifications which are added to the Project by the lessee and which may be removed without damaglng the ProJect. The lessee shall not have any right, title or interest in the Project or 1n Exhlbit D Page 7 . . . dny additions9 repairs, replacements or modifications thereto except as expressly provided in the Lease Agreement. If the Lessee has paid all Lease Payments during the Term of the Agreement. or upon deposit of the security deposit as provided in Section 406 of the Lease Terms and Conditions, all right9 title and interest of the Corporation in and to the Project shall be transferred to and vest in the Lessee. Additionally, if necessary, the Corporation shall authorize. execute and deliver to the Lessee a bill of sale in order to release any and all liens created under the provisions of the Lease Agreement and the Trust Agreement, and any other documents required to terminate the Lease Agreement and consummate such transfer of title and release of llens. The Corporat10n agrees to defend and eliminate any claims adverse to the title to the Project, and to save and hold the Lessee harmless therefrom; provided9 that the Corporation's obligations under this sentence shall not extend to claims ar1sing out of actions by the Lessee or persons asserting claims under it; provided that the Lessee shall reimburse the Corporat ion for any costs incurred by the Corporation 1n defending or eliminating such c1aims9 including reasonable attorneys' fees. SECTION 406. Security Deposit. Notwithstanding any other provision of the Lease Agreement, the Lessee may, on any date9 secure the payment of Lease Payments by a deposit with the Trustee of: (i) an amount which9 together with amounts on deposit 1n the Lessee's Lease Payment Account and the Lesseets Reserve Account, is suffic1ent to pay all unpaid Lease Payments, including the principal and interest components thereof. in accordance with the Lease Payment schedule set forth in Exhlbit B to the Lease Agreement, or (ii) Federal Securit1es, valued in accordance with Section 308 of the Trust Terms and Conditions, together with cash, if required, in such amount as will, in the opinion of an independent certified public accountant, together with interest to accrue thereon and, if required, all or a portion of monles or Permitted Investments of such type then on deposit in the lessee's Lease Payment Account and lessee's Reserve Account9 be fully sufficient to pay all unpaid Lease Payments on their Due Date. In the event of a deposit pursuant to this Section, all obligations of the Lessee under the Lease Agreement, and all security provlded by the Lease Agreement for said obligations, shall cease and terminate, excepting only the obligatlon of the Lessee to make, or cause to be made, Lease Payments from the deposit made by the Lessee pursuant to this Section, and title to the Project shall vest in the Lessee on the date of said deposit automatlcally and without further action by the Lessee or the Corporation, provided that title shall be subject to the subsequent payment of Lease Payments from said deposit in accordance with the provisions of the Lease Agreement. Said deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments 1n accordance with the provisions of the Lease Agreement. SECTION 407. Abatement of Rental in the Event of Failure to Have Use and Possession of the Project. The Lease Payments shall be abated in whole or in part during any period during which by reason of damage or destruction (other than by eminent domain which is provided for in Section 5.9 of the Lease Terms and Conditions) there is substantial interference with the use and possession of the Project by the Lessee. If damage or destructlon results in a redemption of a portion of Certif1cates representing interests Exhibit 0 Page 8 . . . in the Lessee's Lease Payment9 the extent of such abatement shall be agreed upon by the Lessee and the Trustee, as assignee of the Corporation, such that the resulting Lease Payments represent fair conslderatlon for the use and possession of the portions of the Project not damaged or destroyed; provided, however9 that in the event such damage or destruction results 1n redemption of Certificates, the resulting Lease Payments will be suff1cient to pay all of that portion of principal and interest on the remain1ng Outstanding Certlficates which represent interests in the Lessee's Lease Payments. Such abatement shall not result so long as moneys in the Lessee's Lease Payment Account and the Lessee1s Reserve Account and Net Proceeds of insurance and rental interruption insurance are suffi ci ent to make Lease Payments when and as due, it being hereby declared that such moneys and Net Proceeds constitute special funds for the payment of Lease Payments. Such abatement or adjustment, if any. shall continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repa i r or reconstruct ion, if any. I n the event of any such damage or destruction, this Agreement shall continue in full force and effect and the Lessee walves any right to terminate this Agreement by virtue of any such damage and destruct1on. There shall be no abatement of Lease Payments to the extent that moneys deri ved from any person as a result of any defect or delay in the acquisition or construction of the Lesseers Project are available therefor. The amount of Lease Payments shall al so be abated to the extent9 if any, required by operation of law resulting from the Lessee's failure to have use and possession of the Project. Exh,b1t 0 Page 9 . . . ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS SECTION 501. Ma i ntenance and Taxes. Throughout the Term of the Agreement, as part of the consideration for the rental of the Project, all improvement, repa i rand maintenance of the Project shall be the responsibility of the lessee, and the lessee shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Project resulting from ordinary wear and tear or want of care on the part of the Lessee thereof. The Lessee shall maintaln the Project in good worklng order and shall comply with manufacturer or vendor requirements with respect to proper maintenance of the Project, if any. I n exchange for the Lease Payments herein provided9 the Corporat1on agrees to provide only the Project, as hereinbefore more specifically set forth. The Lessee shall also payor cause to be paid to the Corporation all taxes of any type or nature charged to the Corporatlon or affectlng the Project or the respective interests or estates therein, including, but not limited to, any sales tax, or affecting the amount available to the Corporation from Lease Payments received under the Lease Agreement for the retirement of the Certificates (including taxes or assessments assessed or levled by any governmental agency or district having power to levy taxes or assessments); provided, that with respect to governmental charges that may lawfully be paid in installments over a periOd of years, the Lessee shall be obllgated to pay only such installments as are requlred to be pald dur1ng the Term of the Agreement as and when the same shall become due. The Lessee, at the Lessee's expense and in its name, may 1n good faith contest and diligently pursue to conclusion any such taxes and other charges and9 in the event of any such contest, may permit the taxes or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Corporat1on shall notify the Lessee that, in the opinion of Independent Counsel, by nonpayment of any such items, the lnterest of the Corporatlon in the Project will be materially endangered or the PrOJect or any part thereof will be subject to loss or forfelture, in Wh1Ch event the Lessee shall promptly pay such taxes or charges or provide the Corporation with full security agalnst dny loss WhlCh may result from nonpayment, in form satisfactory to the Corporation. SECTION 502. Modification of Project. The Lessee shall, at its own expense, have the right to remodel the ProJect or to make additions dnd modifications thereto. All such additions and modifications shall thereafter comprise part of the Project and be subject to the proviSions of the Lease Agreement. Such additions and modifications shall not in any way damage the Project, substantially alter its nature or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Project, upon completion of any additions and modifications made pursuant to thlS Section9 shall be of a value which is equal to or greater than the value of the ProJect immediately prior to the making of such additlons or modifications. The Lessee shall make no modificat10ns to the Project that jeapordize any warranties relat1ng thereto. The Lessee wl11 not permit any mechan i c J s or other 1 i en to be Exhibit 0 Page 10 . . . established or remain against the Project for labor or materials furn1shed in connection with any remodeling, additions, modifications, repairs, renewals or replacements made by the lessee pursuant to this Section; provided, that if any such lien is established and the Lessee shall first notify the Corporation Of the lessee's intention to do so, the lessee may, in good faith, contest and diligently pursue to conclusion any lien filed or established against the Project and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom, and shall, at the time of commencement of such contest, provlde the Corporation with full security against any loss or forfeiture which might arise from the nonpayment of any such item9 in form satisfactory to the Corporation. The Corporation will cooperate fully in any such contest, upon the request and at the expense of the Lessee. SECTION 503. Public Liability and Property Damage Insurance. The Lessee shall maintain or cause to be maintained. throughout the Term of the Agreement (but during the period of dellvery and installation of the Project only if and to the extent such insurance is not provided by the Contractors), a standard comprehenslve general insurance policy or policies in protection of the Trustee, the Corporation and the Lessee and their members, offi cers, agents and emp 1 oyees. Sa i d po 1; cy or po 1 i c; es shall provide for indemnification of said parties against dlrect or contlngent loss or 1 iabi 1 ity for damages for bodily and personal inJury, death or property damage occasioned by reason of the acquisition or operatlon of the Project. Said pol icy or pol icies shall provide coverage in the minimum liability limits of $1,0009000 for personal injury or death of each person and $3,OOOtOOO for personal inJury or deaths of two or more persons in each accident or event. and ln a minimum amount of $100,000 (SUbject to a deductible clause of not to exceed $59000) for damage to property resulting from each accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $39000,000 covering all such risks. Such liability 1nsurance may be maintained as part of or in conjunction with any other liab1lity insurance coverage carried or required to be carried by the Lessee andt with the approval of the Insurer9 may be maintained in the form of self- insurance. Such self-insurance, if approved, must provide for amounts to be segregated in a special insurance reserve meeting the requirements of th1S Section, must be restricted specifically to the Project and must consist of Permitted Investments. SECTION 504. Fire and Extended Coverage Insurance. (a) The Lessee shall procuret or cause to be procured9 and maintain throughout the Term of the Agreement (but during the period of delivery and installation of the Project only if and to the extent such insurance 15 not provided by the Contractors), insurance against loss or damage to any part of the Project by fire and lightningt with extended coverage and vandal1sm and ma11cious mischief insurance. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm9 riot9 aircraft. vehicle damage9 smoke9 sprinkler damage, boiler explosion9 theft and such other hazards as are normally covered by such insurance. Such insurance shall be in an amount equal to 100% of the replacement cost of the Project or the prlncipal amount of the Certlficates then Outstanding relating to the Project, whichever is greater. Such insurance may be Exhibit 0 Page 11 maintained as part of or in conjunction with any other fire and extended coverage insurance carried or required to be carried by the Lessee and, wlth ~ the approval of the Insurer, may be maintained in the form of self- ~ insurance. Such self-insurance, if approved9 must provide for amounts to be segregated in a special insurance reserve meeting the requirements of th1S Section9 must be restricted specifically to the Project and must consist of Permltted Investments. . . The lessee shall also procure, or cause to be procured, and maintained throughout the Term of the Agreement, unless the Insurer agrees to waive such requirement, insurance against loss or damage to any part of the Project by earthquake in an amount equal to 100~ of the replacement cost of the Project or the principal amount of Certificates then Outstanding relating to the Project, whichever is greater. SECTION 505. R~ntal Interruption Insur~nce. The Lessee shall procure, and maintain throughout the Term of the Agreement, rental interruption insurance to cover loss, total or partial, of the use of any part of the Project as the result of any of the hazards covered in the insurance required by Section 504 of the Lease Terms and Conditions, in an amount sufficient to pay the maximum annual amount of Lease Payments due under the Lease Agreement in any year or to pay such lesser amount of Lease Payments as shall be agreed to by the Insurer. In lieu of obtaining insurance coverage as requ i red by th is Sect ion 505, su ch coverage may be maintained by the Lessee 1n the form of self-insurance so long as the Lessee provides evidence to the Trustee, the Insurer and the Corporation that the Lessee has segregated amounts in a speci a 1 insurance reserve meet i ng the requirements of this Section 505, restricted specifically to the Project, that such reserve shall consist of Permitted Investments and that such reserve shall be assigned or be payable to the Trustee. The Net Proceeds of such insurance shall be paid to the Trustee for deposit in the lessee IS Lease Payment Account, and shall be credited towards the payment of the Lease Payments in the order in which such Lease Payments come due and payable. SECTION 506. Insurance Net Proceeds; Form of Policies. The policies of insurance required by Section 503 and 504 of the Lease Terms and Conditions shall provide that all proceeds thereunder shall be payable to the Trustee pursuant to a lender's loss payable endorsement substantially 1n accordance with the form approved by the Insurance Services Office and the California Bankers Association. The Net Proceeds of such insurance shall be paid to the Trustee to be applied as provided in Section 305 of the Trust Terms and Conditions or Section 505 of the Lease Terms and Conditions, as the case may be. In 1 i eu of obta i n i ng insurance coverage as requ i red by Section 504 of the Lease Terms and Conditions, such coverage may be maintained by the lessee in the form of self-insurance so long as the Lessee provides evidence to the Trustee and the Corporation that (i) the Lessee has segregated amounts in a special insurance reserve meeting the requirements of Section 504 and restricted specifically to the Project9 or (ii) an Insurance Consultant certifies to the Trustee and the Corporation that the Lessee's general insurance reserves are adequate to provide the necessary coverage. All policies of insurance requlred by the Lease Agreement, and any statements of self-insurance, shall be delivered to the Trustee and the Insurer and shall be in form satisfactory to the Trustee and the Insurer. Exhi bit 0 Page 12 . . . The Les see shall payor cau se to be pa i d when due the premi urns for all insurance po11cies required by the Lease Agreement, and shall promptly furni sh or cause to be furni shed evidence of such payments to the Trustee and the Insurer. All such policies shall provide that the Trustee shall be given thirty (30) days' notice of each expiration, any intended cancellat10n thereof or reduction of the coverage provided thereby. The Trustee shall not be responsible for the sUfficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adJustment, compromise or settlement of any loss agreed to in good faith by the Trustee. The Lessee shall cause to be delivered to the Trustee annually evidence that the insurance coverage required by the Lease Agreement are in full force and effect. SECTION 507. Advances. If the Lessee shall fail to perform any of its obligations under this Article9 the Corporation may, but shall not be obligated to, take such action as may be necessary to cure such failure9 including the advancement of money to the Lessee, and the Lessee shall be obligated to repay all such advances as soon as possible, with interest at the rate of 10% per annum from the date of the advance to the date of repaymentt but in no event shall such rate exceed the maximum legal rate of interest. SECTION 508. Liens. The Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any pledge. lien, charge, encumbrance or claim on or with respect to the Project, other than the respective rights of the Corporation and the lessee as herein provided and Permitted Encumbrances. Except as expressly provided in this Article, the les see sha 11 prompt 1 y, d tits own expense, take such act i on as may be necessary to duly discharge or remove any such mortgage9 pledge9 1 ien9 charge, encumbrance or claim for which it is responsible9 lf the same shall arise at any time. The Lessee shall reimburse the Corporation for any expense incurred by it 1 n order to d; scharge or remove any su ch p 1 edg e , lien, charge9 encumbrance or claim. SECTION 509. Eminent Domain. If all or part of the Project is taken under the power of eminent domain9 the Net Proceeds from any award resulting therefrom shall be deposited with the Trustee pursuant to Section 5.10(b) of the Lease Terms and Conditions and the Lessee RepresentatlVe shall file a certificate with the Trustee as provided in Section 305 of the Trust Terms and Conditions. If the Project is taken in whole pursuant to such eminent domain proceedings or is taken in part to such extent that the remaining port i on of the Project is no 1 anger u sefu 1 for the purposes ori g i na 11 y intended, the remaining Lease Payment obligations of the Lessee win be abated in full and this Agreement shall thereupon be terminated. Otherwise, (I) this Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benef1t of any law to the contrarY9 and (2) there shall be a proportionate abatement of Lease Payments such that the resulting Lease Payments will be sufficient to pay all of that portion of principal and interest with respect to the remain1ng Certificates which represent interests in the Lessee's Lease Payments. Exhibit 0 Page 13 SECTION 510. Application of Net Proceeds. ~ (a) From Insurance Award. The Net Proceeds of any insurance award ,.., resulting from any damage to or destruction of the Project by fire or other casualty shall be deposited in the Insurance and Condemnation Fund to be held and applied by the Trustee pursuant to Section 2.9 of the Trust Agreement and Section 305 of the Trust Terms and Conditions. Upon such deposit the Lessee Representative shall file a certif1cate with the Trustee as provided in such Section and such Net Proceeds shall be applied by the Trustee as provided in such Section. (b) From Eminent Domain Award. The Net Proceeds of any eminent domain award resulting from any event described in Section 509 of the Lease Terms and Conditions shall be deposited in the Insurance and Condemnation Fund to be held and app1 ied by the Trustee pursuant to Section 2.9 of the Trust Agreement and Section 305 of the Trust Terms and Conditions. SECTION 511. Title Insurance. If the Lessee's Project includes a real property component, the Lessee shallt on the Closing Date9 deliver to the Trustee a title insurance policy insuring the Lessee's fee title estate in the site relating to the Project, if anY9 and the Corporation's leasehold estate in the site relating to the Project and the Project in an amount equal to the total prlnc;pal amount of Lease Payments due hereunder. . SECTION 512. Agreement to Pay Trustee's Fees. The Lessee agrees to pay to the Corporation the Lessee I s share of fees and expenses charged to the Corporation by the Trustee for the performance by the Trustee of its duties under the Trust Agreement9 such share to be calculated according to the same proportion as the Principal Amount bears to the total principal amount of the Certificates of Participation. The Lessee shall not be obligated to pay any portion of the fees or expenses of the Trustee readily attributable to another Lessee. . Exhibit 0 Page 14 . . . ARTICLE VI DISCLAIMER OF WARRANTIES; ACCESS SECTION 601. Di scl a;mer of Warranties. THE CORPORATION MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN9 CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE LESSEE OF THE PROJECT OR ANY ITEM THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROJECT OR ANY ITEM THEREOF. IN NO EVENT SHALL THE CORPORATION BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, IN CONNECTION WITH OR ARISING OUT OF THE LEASE AGREEMENT, FOR THE EXISTENCE, FURNISHING9 FUNCTIONING OR THE LESSEE'S USE OF THE PROJECT. SECTION 602. Lessee's Right to Enforce Warranties. The Lessee shall have all rights with respect to the warranties of the Contractors with respect to the Project, and the right to enforce such warranties against the Contractors. If the Corporation is ever required or requested by the Lessee to enforce any warranty with respect to the Project on behalf of the Lessee, the Lessee shall reimburse the Corporation for any costs incurred by the Corporation 1n the enforcement of such warranty, including reasonable attorneys' fees. SECTION 603. Corporat1on and Insurer Access to the Project. The Lessee agrees that the Corporat; on, the Insurer, any Corporation Representative and the CorporationJs successors or assigns9 shall have the right at all reasonable t1mes to examine and inspect the Project. The Lessee further agrees that the Insurer, Corporation, any authorized representative or elther, and the Corporation's successors or asslgns shall have such rights of access to the Project as may be reasonably necessary to cause the proper maintenance of the Project in the event of failure by the Lessee to perform its obligations under the Lease Agreement. Exhlbit D Page 15 ~ .., ARTICLE VI I ASSIGNMENT, SUBLEASING AND INDEMNIFICATION SECTION 701. Assignment by Corporation. The Corporation's rights under the Lease Agreement, including, but not limited t09 the right to receive and enforce payment of the Lease Payments to be made by the Lessee under the Lease Agreement and title to the Project, have been assigned to the Trustee pursuant to the Trust Agreement. SECTION 702. Assignment and Subleasing by the Lessee. The Lease Agreement may be assigned or subleased by the Lessee upon the prior approval of the Insurer, prov;ded9 that any sublease or assignment shall be subject to all of the following conditions: (1) The Lease Agreement and the obligation of the Lessee to make lease Payments under the Lease Agreement shall remain obligations of the Lessee; and (ii) The sublessee or assignee shall assume the obligations of the Lessee under the Lease Agreement to the extent of the interest subleased or assigned; and . {ili} The Lessee shall, wlthin thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Corporation, the Insurer and the Trustee a true and complete copy of such sublease or assignment; and (iv) No such sublease or assignment by the lessee shall cause the Project to be used for a purpose other than a governmental or proprietary function authorized under the provisions of the Constitution and laws of the State of California; and (v) The Lessee shall have delivered to the Trustee and the Insurer an opinlon of nationally recognized bond counsel to the effect that such sublease or assignment shall not cause the 1nterest component of the lease Payments due with respect to the Project to become subject to federal income taxes or State of California income taxes. . SECTION 703. Release and Indemnification Covenants. The Lessee shall and hereby agrees to indemnify and save the Corporation harmless from and against all claims9 losses and damages, including legal fees and expenses, arising out of (i) the use9 maintenance, cond1tion or management of, or from any work or thing done on the Project by the Lessee, (ii) any breach or default on the part of the Lessee in the performance of any of its obllgations under the Lease Agreement, (iii) any act or negligence of the Lessee or of any of 1ts agents, contractors, servants, employees or 1 i censees wi th respect to the Project, (i v) any act or negl i gence of any ass1gnee or sublessee of the Lessee, or of any agents9 contractors, servants, employees or licensees of any assignee or sublessee of the Lessee w1th respect to the Project. or (v) the delivery, installatlon and acquisition of the Project or the authorization of payment of the Acquisition Costs by the Lessee. No indemnification is made by the Lessee Exhibit 0 Page 16 . . . under this Section or elsewhere in the Lease Agreement for willful misconducty negligence, or breach of duty under this Lease by the Corporation9 its officers, agents, employees9 successors or assigns. Exh1bit 0 Page 17 . ARTICLE VII I EVENTS OF DEFAULT AND REMEDIES SECTION 801. Events of Default Defined. The following shall be lIevents of defaul t" under the Lease Agreement and the terms "events of defaultll and IIdefault" shall mean9 whenever they are used in the Lease Agreement, with respect to the Project, anyone or more of the following events: (i) Failure by the Lessee to pay any Lease Payment or other payment required to be paid under the Lease Agreement at the time specified therein. . (ii) Failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in clause (i) of this Sect1on, for a period of thirty (30) days after written not1ce specifying such failure and requesting that it be remedied has been given to the Lessee by the Corporation9 the Insurer, the Trustee, or the Owners of not less than twenty-five percent (25%) in aggregate principal amount of Certificates then outstanding; prov1ded9 however, lf the failure stated in the notice cannot be corrected within the appl1cable per1od, the Corporation, the Trustee9 the Insurer and such Owners w1ll not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected. (iii) The filing by the Lessee of a voluntary petition 1n bankruptcy, or failure by the Lessee promptly to lift any execution9 garnishment or attachment9 or the filing of an involuntary petltion in bankruptcy against the Lessee WhlCh petition shall not have been withdrawn within Slxty (60) days, or assignment by the Lessee for the benefit of creditors9 or the entry by the Lessee into an agreement of composition with creditors9 or the approval by a court of competent jurisdiction of a petition applicable to the Lessee 1n any proceedings ins t i tuted under the provi s ions of the federal bankruptcy 1 aw, or under any similar acts which may hereafter be enacted. SECTION 802. Remedies on Default. Upon the occurrence and cont1nuance of any event of default spec1fied in Sectlon 80l(i} or 801(i1i) of the Lease Terms and Conditions9 the Trustee9 as ass1gnee of the Corporat1on, shall proceed at the direction of the Insurer, or upon the occurrence of an event of default specified in Section 801 (i1)of the Lease Terms and Conditions at the direction of the Insurer, may proceed, and upon wr1tten request of the Insurer and the Owners of not less than a major1ty in aggregate principal amount of Certificates then Outstanding shall proceed, to: . (i) Protect and enforce the Lease Agreement by su ch jud i cia 1 proceeding as the Corporation or its assignee shall deem most effectual, elther by suit in equlty or by action at law, whether for the specific performance of any covenant or agreement contained ln the Exhib1t 0 Page 18 . . . Lease Agreement, or in aid of the exercise of any power granted 1n the lease Agreement, or to enforce any other 1 ega 1 or equ itab 1 e ri ght vested in the Corporat1on or its assignee by the Lease Agreement or by law; or (ii) Take possession of the Project and exclude the Lessee from using it until the default ;s cured, holding the Lessee liable for the Lease Payments and other amounts payable by the Lessee pr10r to such taking of the Project under and pursuant to the Lease Agreement and the curing of such default; or (i 1 i) I f the Project cons i sts of real property, to re 1 et the Project for a period equal to the greater of (a) the remaining Term of the Lease Agreement or (b) ten years; or (iv) If the PrOject consists of personal property, to take and se 11 such property and apply the proceeds of such sale to the Lease Payment obligations of the Lessee; or (v) Take whatever action at law or in equity may appear necessary or desirab1e to enforce the Corporationls rights as the owner of the Project, including termination of the Lease Agreement; provided the Trustee shall not terminate the Lease Agreement so long as the Insurance Policy is in effect. SECTION 803. No Re~edy Exclusive. No remedy herein conferred upon or reserved to the Corporation ; s 1 ntended to be exc1 us i ve and every such remedy shall be cumulative and shall be in addition to every other remedy given under the lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exerC1se any right or power accruing upon any default shall impair any such r1ght or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed exped i ent. I n order to ent it 1 e the Corporation to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice9 other than such notice as may be requlred in this Article or by law. SECTION 804. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to the Lease Agreement should default under any of the provisions thereof and the nondefauHing party should employ attorneys 01" incur other expenses for the collection of monies or the enforcement or performance or observance of any obligat1on or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred by the nondefau 1 t i ng party. SECTION 805. No Additional Waiver Implied by One Waiver. In the event any covenant canta 1 ned in the Lease Agreement shou 1 d be breached by either party and thereafter waived by the other partY9 such wa1ver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach under the Lease Agreement. Exhibit 0 Page 19 . ARTICLE IX OPTION TO PURCHASE; OPTION TO PREPAY . SECTION 901. Purchase Option. If the Termination Date of the Lease Agreement is on or after December 1, 1996, the Lessee shall have the option to purchase the Project on or after December 1, 1995. but only if it is not then in default under Section 801(i) or (iii) of the lease Terms and Conditions, and only in the manner provided 1n this Article. SECTION 902. Exercise of Option. The Lessee may exercise its option to purchase the Project on any June 1 or December 1, commencing December 1, 1995, by paying a purchase price equal to the amount necessary to prepay the unpaid principal portion of Lease Payments in whole, plus premium. if any (as set forth in Section 904 of the Lease Terms and Cond1tions)9 plus accrued interest on such principal portion to the appl icable June 1 or December 1 set for redemption of the Certificates. Such purchase pnce shall be deposited by the Trustee in the Lessee1s Lease Payment Account to be applied to the redemption of Certificates pursuant to Section 512 of the Trust Terms and Conditions. The Lessee shall give the Authority and the Trustee notice of its intention to exercise its option not less than sixty (60) days in advance of the date of exercise, and shall deposit with the Trustee on the date which is three bus1ness days or more prior to said June 1 or December 1, an amount equal to the unpa1d principal amount of Lease Payments, plus premium, if any. plus accrued interest on such pnncipal port ion of lease Payments to such June 1 or December 1. If the Lessee exercises its option to purchase the ProJect pursuant to this Section9 any amount then on hand in the Lessee I s Reserve Account 9 the Lessee I s Lease Payment Account (excluding amounts required for payment of past due principal or interest with respect to Certificates not presented for payment), and the Lessee's account in the Insurance and Condemnation Fund shall be applied towards the payment of the appllcab1e purchase price to be pa1d by the Lessee. If the Lessee shall have given notice to the Trustee of its intention to purchase the Project, but shall not have deposited the purchase price with the Trustee on the date specified in such notice, the Lessee shall continue to pay Lease Payments as if no such notice had been given. SECTION 903. Transfer of Title and Release of Corporation's Interest. Upon exercise by the Lessee of its option to purchase the Project, all right. title and interest of the Authority in and to the Project shall be transferred to the Lessee. SECTION 904. Option to Prepay. (i) The Lessee shall have the option to prepay in whole or in part (but not in an amount of less than $209000) the principal component of Lease Payments relating to Certificates maturing in the years identified below9 on the following dates and in the following amounts, together with the premiums set forth below (expressed as a percentage of the princ1pal amount prepaid): . Exhibit 0 Page 20 Prepayment Option Date pr~payment Premium ....... December 1, 1995 and June 1, 1996........ 2 % ...... December 1, 1996 and June 1, 1997........ 1-1/2 December 1, 1997 and June 1, 1998........ 1 December 1, 1998 and June 19 1999 ....... 1/2 December 1, 1999 and each June 1 and December 1 thereafter............... 0 The lessee shall give the Authority and the Trustee notice of its intention to exercise its option not less than sixty (60) days in advance of the date of exercise and shall deposlt with the Trustee on or prior to three business days prior to said June 1 or December 1, dn amount equal to the principal component of lease Payments being prepaid, plus the applicable premlum plus accrued interest to the date of redemption. In the event of the lessee's exercise of its option to prepay in part the principal component of lease Payments, the amount of lease Payments to be paid by the Lessee over the remaining term of the Lease Agreement shall be adjusted so as to reflect such prepayment of the principal component of lease Payments. . . Exhibit 0 Page 21 . . . ARTICLE X MISCELLANEOUS SECTION 1001. Notices. All notices, certificates or other communications hereunder shall be sufficiently glven and shall be deemed to have been received 48 hours after deposit in the United States mail in registered or certified form with postage fully prepald when sent to the addresses shown on Exhibit E to the Lease Agreement. The Trustee, the Insurer, the Corporatlon and the Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent. SECTION 1002. Binding Effect. The Lease Agreement shall 1nure to the benef it of and shall be bi nd i ng upon the Corporation and the Lessee and their respective successors and assigns. SECTION 1003. Severability. In the event any provision of the Lease Agreement shall be held invalid or unenforceable by any court of competent juriSdiction, such holding shall not 1nvalldate or render unenforceable any other provision thereof. SECTION 1004. Amendments, Changes and Modificat1ons. The Lease Agreement may be amended or any of its terms modified with the written consent of the Lessee and the Corporation; prov;ded9 that no such amendment shall become effective unless approved by the Trustee and the Insurer. SECTION 1005. Net-net-net Lease. The Lease Agreement shall be deemed and construed to be a I1net-net-net leasell and the Lessee hereby agrees that the Lease Payments shall be an absolute net return to the Corporatlon, free and clear of any expenses, charges or set-offs whatsoever. SECTION 1006. Further Assurances and Corrective Instruments. The Corporation and the Lessee agree that they wlll, from time to t1me9 execute, acknowledge and deliver, or cause to be executed, acknowledged and de1ivered~ such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project hereby leased or intended so to be or for carrying out the expressed intention of the lease Agreement. SECTION 1007. ~xecut)on in Counterparts. The Lease Agreement may be executed in several counterparts, each of which shall be an origlnal and all of which shall constltute but one and the same instrument. SECTION 100B. Applicable Law. The Lease Agreement shall be governed by and construed in accordance with the laws of the State of California. SECTION 10.9. Corporation and Lessee Representat1ves. Whenever under the provisions of the-Lease Agreement the approval of the Corporation or the Lessee is required9 or the Corporation or the Lessee is required to take some action at the request of the other, such approval or such request shall be gi ven for the Corporat; on by a Corporat 1 on Representat i ve and for the Exhibit D Page 22 ..... ~ . . lessee by a Lessee Representative, and any party hereto shall be authorized to rely upon any such approval or request. SECTION 10.10. Captions. The captions or headings in the Lease Agreement dre for convenlence on1y and in no way define, limit or describe the scope or intent of any provisions or Section of the Lease Agreement. Exhibit 0 Page 23 . EXHIBIT E ADDRESSES FOR NOTICE PURPOSES If to the Corporation: If to the Lessee: If to Trustee: If to the Insurer: . . California Cities F1nancing Corporation 1400 K Street, Suite 400 Sacramento, California 95814 Attn: Secretary City of Delano 1015 11th Avenue Delan09 California 93215 Attn: Finance Director First Interstate Bank of California 707 Wilshire Boulevard Los Angeles, California 90017 Attn: Corporate Trust Dept. (W10-2) USF&G Financial Security Company 601 Montgomery Street San Francisco, Ca11fornia 94111 Attn: General Counsel Exh; bit E Page 1 EXHIBIT F . CONTRACTS ASSIGNED TO CORPORATION NONE . . Exhibit F Page 1 EXHIBIT G . DESCRIPTION OF PREVIOUSLY ACQUIRED PORTION OF THE PROJECT NONE . . Exhiblt G Page 1