SR-203-002 (5)
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13050-5
JHHW:BDQ:rms 11/19/85
12/17/85
:mds 12122/85
:rms 12/24/85
Z1633
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LEASE AGREEMENT
Dated as of December It 1985
by and between
CALIFORNIA CITIES FINANCING CORPORATION
and the
CITY OF FONTANAt CALIFORNIA
CALIFORNIA CITIES FINANCING CORPORATION
POOLED FINANCINGt 1985 SERIES E
TABLE OF CONTENTS
~ ~age
SECTION 1.1 Definitions............................................. 2
SECTION 1.2 Exhibits....................................._.......... 2
SECTION 1.3 Agreement to Lease....................................j. 2
SECTION 1.4 Lease Payments.......................................... 2
SECTION 1.5 Notices............................................................ 2
SECTION 1.6 Terms and Conditions.................................... 2
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Exhibit A - Definitions
Exhibit B - Schedule of lease Payments
Exhibit C - Description of Project
Exhibit 0 - 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
Other Matters
Article VI - Disclaimer of Warranties; Access
Article VII - 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
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LEASE AGREEMENT
THIS LEASE AGREEMENT, dated as of the Dated Date, by and between the
CALIFORNIA CITIES FINANCING CORPORATION, a nonprofit public benefi t
corporation duly organized and existing under the laws of the State of
California, as lessor (the "Corporation"), and the CITY OF FONTANA, 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 is 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:
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DEFINITIONS AND EXHIBITS
SECTION 1.1. Definitions. Unless the context otherwise requires,
capita 1 ized 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 attachfd 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 for Notices.
Exhibit F: Contracts Assigned to Corporation.
Exhibit G: Description of Previously Acquired Portion of Project.
SECTION 1.3. 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 Lease 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 Termination Date,
unless on such date any Certificates 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.
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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
(S E A L)
.Attest:
L~I-~ t/j7(u~~ L~h;1'v__
'Sec'\""i..-'t;n~y
By:
9r7tlgL(j~/
r ~ pry.rit l
C ITV OF FONTANA
(5 E A L)
Attest:
By:
City Clerk
Mayor
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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 th; s Lease Agreement to be executed and attested ; n ; ts
name by its duly Authorized Officers and sealed with its corporate seal, as
of the Dated Date.
CALIFORNIA CITIES FINANCING CORPORATION
(S E A L)
Attest:
By:
Secretary
President
CITY OF FONTANA
(5 E A L)
r-- I At~7ft: /}. !. -7 f
~!i,g'lEk 0 /f1dE;;((4!/7
v Deputy' City C'lerk 0 "' /
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EXHIBIT A
DEFINITIONS - CITY OF FONTANA
"Acquisition Costs" means, with respect to the Project, the contract
pri ce pal d or to be pa i d to the Contractors therefor upon acqu i sit ion,
construction, installation 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,
englneerlng, legal, financial, title insurance and other costs lncurred by
the Lessee, the Corporation and the Contractors in connection with the
acquisition, construction, delivery and installation by the Corporation of
the Project.
ItAcquisition Date" means May 25, 1986.
uSus i ness 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 provision of the Code shall be deemed to include the
applicable regulations of the United States Department of the Treasury
promulgated wlth respect to such prOV1Slon.
"Corporation Representative" means the President of the Corporation or
his designee, or any other person authorized to act on behalf of the
Corporation with respect to the Lease Agreement.
"Certlficate of Completion" means a certificate of the Lessee
Representative certifYlng that all equipment and other personal property
constitutlng a portion of the ProJect has been acquired, installed and
accepted by the Lessee, and that all AcquiSition Costs have been paid.
"Certificates of Participation" or "Certificates" means the
Certificates of Participation to be executed and delivered pursuant to the
Trust Agreement and which evidence a right to receive a proportionate 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
Corporatlon or the Lessee on behalf of the Corporatlon 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 acquisition,
construction and installation of the ProJect.
"Corporation" means the California Cities Financing Corporatlon, a
nonprofit public benefit corporation duly organized and existing under the
laws of the State of California.
Exhiblt A
Page 1
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IIDated Date" means December 1, 1985.
"Due Datesll means May 15 and November 15, commencing May 15, 1986.
II Federal Securitiesll means direct obligatlans of (including
obligatlons issued or held in book entry form on the books of the Department
of the Treasury of the United States), or obligations the prlncipal of and
interest on wh i ch are uncond i t i ana lly guaranteed by the United States of
America.
"Governing Bodyll means the City Council of the Lessee.
IIIndependent Counselll 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.
IIInsurance Consultant" means any person or firm knowledgable with
respect to insurance carried by, required for and available to Political
Subdivisions.
II Insurance and Condemnation Fund" means the fund by that name
established and held by the Trustee pursuant to Section 4.6 of the Trust
Agreement.
"Insurance Polley" or IIpolicyll means Financial Guaranty Bond No. 99-
0110-00022-86 issued by the Insurer guaranteei ng the payment of pI"'; nel pa 1
and lnterest when Due for Payment (as defined in the Policy) with respect to
the Certificates.
II Insurer" means United States Fidelity & Guaranty Company, and its
successors and assigns.
II Lease Agreement II or II Agreement II means th is Lease Agreement, and any
duly authorized and executed amendment hereto.
"Lease Agreements" means the several Lease Agreements, each dated as
of the Dated Date, between the Corporation and the Cit,es of Delano,
Fontana, Santa Monica and Thousand Oaks, respectively.
"Lease Payment II means any payment due from the Lessee to the
Corporation under Section 1.4 of the Lease Agreement and Section 403 of the
Lease Terms and Conditions.
II Lease Terms and Gond it; ons II means those certa 1 n Lease Terms and
Conditions attached to the Lease Agreement as Exhibit D.
II Lesseell means the City of Fontana, California, a general law city,
duly organized and existing under the laws of the State of Californla.
"Lessee Representative" means the Mayor, City Manager or Finance
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.
Exhiblt A
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"Lessee's Acquisition Account" means the Acquisition Account
established and held by the Trustee for the Lessee pursuant to Section 2.5
of the Trust Agreement.
"Lessee's Lease Payment Account" means the Lease Payment Account
establlshed and held by the Trustee for the Lessee pursuant to Sectlon 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" means any property or casualty insurance proceeds paid
with respect to the Project, remaining after payment therefrom of all
expenses incurred in the collection thereof.
"Ownertl or "Certificate Owner" or "Owner of a Certlficate," or any
similar term, when used with respect to the Certificates, means the
registered owner of any Certiflcate.
IIPayment Datestl means June 1 and December 1, commencing June 1, 1986.
II Perm Hted Encumbrances" means, as of any part i cu 1 ar time: (i) 1 i ens
for general ad valorem taxes and assessments, if any, not then delinquent,
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.
"Polltical Subdivision" means a pUblic agency deemed to be a
"political subdiv1sion" of the State of California, as that term 1S used 1n
Section 103 of the Code.
"Principal Amount" means the total unpaid principal portion of the
Lease Payments due under the Lease Agreement.
"Project" means that certain equipment to be acquired from the
proceeds of the Certiflcates deposited in the Lessee's Acquisition Account,
as shown on Exhib1t C.
"Reserve Fund" means the fund by that name established and held by the
Trustee pursuant to Section 2.10 of the Trust Agreement.
"Term of the Agreement" or "Term II means the time during whi ch the
Lease Agreement is in effect, as provided for in Section 1.5 of the Lease
Agreement.
lITerrninat10n Date" means December 1, 1990.
lITrust Agreement II means the Trust Agreement, dated as of the Dated
Date, by and among the Trustee, the Lessees and the Corporation, and any
duly authorlzed and executed amendment thereto.
IITrusteell means First Interstate Bank of California, as trustee,
appointed under the terms of the Trust Agreement.
Exhib1t A
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EXHIBIT B
CITY OF FONTANA
SCHEDULE OF LEASE PAYMENTS
Pl"i nc; pa , Interest Total
Due Date Component Comoonent Lease Payment
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May 15, 1986 $58,368.75 $ 58,368.75
November 15, 1986 $320,000 58,368.75 378,368.75
May 15, 1987 49,168.75 49,168.75
November 15, 1987 335,000 49,168.75 384,168.75
May 15, 1988 38,700.00 38,700.00
November 15, 1988 360,000 38,700.00 398,700.00
May 15, 1989 27,000.00 27,000.00
November 15, 1989 380,000 27,000.00 407,000.00
May 15, 1990 14,175.00 14,175.00
November 15, 1990 405,000 14,175.00 419,175.00
Exhibit B
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EXHIBIT C
DESCRIPTION OF PROJECT
A new Police Information System at an estimated cost of $500,000
with del ivery expected by June, 1986; and a new BUSlness Informat1on
System at an estlmated cost of $1,000,000 with delivery expected by June,
1986. The total value of both systems is $1,500,000.
Exhibit C
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13050- 5
JHHW:BDQ:rms 11/19/85
12/22/85
12/27/85
21638
EXHIBIT 0
LEASE TERMS AND CONDITIONS
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EXHIBIT 0
TABLE OF CONTENTS
Page
ARTICLE I
Def; n; t; on 5 . . . " . . . . " . . .. .. . . .. .. . . iIII .- . . . . . . . . .. . .. . .. .. .. . . . . .. . . .. ... .. .. .. . .. .. .. ... .. .. .. ... .. .. ... 0-1
DEFINITIONS
ARTICLE II
REPRESENTATIONS. COVENANTS AND WARRANTIES
SECTION 201 Representations, Covenants and Warranties
of the Lessee.................................~........ 0-2
SECTION 202 Representations, Covenants and Warrantles
of the Corporation..................................... 0-2
SECTION 301
SECTION 302
SECTION 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.............................. D-4
Payment of Acquisition Costs............................ D-5
ARTI ClE 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
lea 5 e P ayme n t 5 .. .. .. .. .. .. .. .. .. .. II .. .. .. .. .. .. . .. .. . .. . . . .. ... .. .. .. .. .. .. .. .. . . . ... . .. 0 - 6
Possession and EnJoyment................................ 0-7
Title to the Project.................................... 0-7
Security Deposit........................................ 0-8
Abatement of Rental ln the Event of Failure to
Have Use and Possesslon of the Project................ 0-8
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SECTION 501
SECTION 502
SECTION 503
SECTION 504
SECTION 505
SECTION 506
SECTION 507
SECTION 508
SECTION 509
SECTION 510
SECTION 511
SECTION 512
SECTION 601
SECTION 602
SECTION 603
SECTION 701
SECTION 702
SECTION 703
SECTION 801
SECTION 802
SECTION 803
SECTION 804
SECTION 805
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Maintenance and Taxes........................................ 0-10
Modiflcation of ProJect................................. 0-10
Public Liabllity and Property Damage
Insurance. .. . .. . .. " " .. .. .. .. .. .. .. . . . " .. . .. ... " ... III .. .. .. .. .. . .. .. . .. . .. . .. .. .. .. .... 0-11
Fire and Extended Coverage Insurance.................... 0-11
Rental Interruption Insurance........................... 0-12
Insurance Net Proceeds; Form of Policies................ 0-12
Advances..............................~................. 0-13
L; ens" . .. . III .. .. . .. .. .. .. .. .. . .. . . .. .. .. ... .. .. .. . ... .. .. .. . . . .. .. .. .. . ... .. ... " .. .. .. .. " .. .. .... D-13
Eminent Domain.......................................... 0-13
Application of Net Proceeds............................. 0-14
Title Insurance......................................... 0-14
Agreement to Pay Trustee's Fees......................... 0-14
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
Disclaimer of Warrantles................................ 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 Subleasing by the Lessee................. 0-16
Release and Indemnification Covenants................... 0-16
ARTICLE VI II
EVENTS OF DEFAULT AND REMEDIES
Events of Default Defined............................... 0-18
Remedies on Default..................................... D-18
No Remedy Exclusive.......................~............. 0-19
Agreement to Pay Attorneys I Fees and Expenses........... 0-19
No Additional Waiver Implied by One Waiver.............. 0-19
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ARTICLE XI
OPTION TO PURCHASE; OPTION TO PREPAY
SECTION 901
SECTION 902
SECTION 903
SECTION 904
Purchase Option.......................................... D-20
Exercise of Option....................................... 0-20
Transfer of T,tle and Release of
Corporat,on's Interest................................. 0-20
Option to Prepay......................................... 0-20
ARTICLE X
MISCELLANEOUS
SECTION 1001 Notices................................................. 0-22
SECTION 1002 Binding Effect.......................................... 0-22
SECTION 1003 Severabil'ty............................................ 0-22
SECTION 1004 Amendments, Changes and Mod1fications................... 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.......................................... 0-22
SECTION 1009 Corporation and Lessee Representatives.................. 0-22
SECTION 1010 Captions................................................ 0-23
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ARTICLE I
DEFINITIONS
Deflnitions. Unless the context otherwise requires, capitalized terms
used herein shall have the meanings ascribed to them in Exhibit A to the
Lease Agreement.
Exhibit 0
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ARTICLE II
REPRESENTATIONS! COVENANTS AND ~ARRANTIES
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 validly existlng Politlcal
Subdivision of the State of California.
(b) The constitution and the laws of the State of Californ1a
authorize the Lessee to enter into the Lease Agreement and the Trust
Agreement and to enter into the transact10ns 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 in
accordance with the laws of the State of Callfornia.
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(c) Neither the execution and delivery of the Lease Agreement or the
Trust Agreement nor the fulfillment of or compl iance with the terms dnd
conditions hereof or thereof! nor the consummation of the transactions
contemplated hereby or thereby, conflicts with or results in a breach of the
terms, conditions or provisions of any restriction or any agreement or
instrument to WhlCh the Lessee lS now a party or by WhlCh the Lessee 1S
bound! or constitutes a default under either of the foregoing, or results in
the creation or imposition of any llen, charge or encumbrance whatsoever
upon any of the property or assets of the Lessee! or upon the Project!
except Permltted Encumbrances.
SECTION 202. Representations, Covenants and Warranties of the
Corporat i on. The Corporat 10n represents, covenants and warrants to the
Lessee as follows:
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(a) The Corporation 15 a nonprofit public benefit corporation duly
organized, eX1sting and in good standing under and by virtue of the laws of
the State of California; has power to enter into the Lease Agreement and the
Trust Agreement; is possessed of full power to own and hold real and
personal property and to lease and sell the same; and has duly authorized
the execution and delivery of all of the aforesaid Agreements.
(b) The Corporat i on wi 11 not pledge the Lease Payments or other
amounts derived from the Project and from its other rights under the Lease
Agreement, 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 fulfi llment of or compl lance with the terms and
conditlons hereof or thereof, nor the consummation of the transactions
contemplated hereby or thereby, confl1cts wlth or results in a breach of the
terms, conditions or provisions of any restrictlon or any agreement or
instrument to which the Corporat1on is now a party or by which the
Corporation is bound, or constltutes a default under either of the
foregolng, or results in the creation or imposltlon of any lien, charge or
Exhlbit 0
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encumbrance whatsoever upon any of the property or assets of the
Corporatlon, or upon the Project, except Permltted Encumbrances.
(d) Except as provided in the Lease Agree'J1ent and in the Trust
Agreement, the Corporatlon wlll not assign the Lease Agreement, its right to
receive Lease Payments from the Lessee, or lts duties and obllgations under
the Lease Agreement to any other person, flrm or corporation so as to impair
or violate the representations, covenants and warranties contained in this
Section 202.
Exhiblt 0
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ARTICLE III
DEPOSIT OF MONIES; ACQUISITION OF THE PROJECT
SECTION 301. Deposit of Monies. On the Closing Date, the Corporation
shall cause to be deposited wlth the Trustee the amount specified in Sectlon
2.3 of the Trust Agreement. Pursuant to the Trust Agreement, there shall be
deposited in the lessee's Acquisltion Account funds which, together with
investment earnings thereon, will be sufficient to pay Acqulsition Costs.
SECT! ON 302. Acqu is i t i on of the Project. The Lessee wi 11, as agent
of the Corpora t i on, ente r 1 nto purchase orders and contract s, and wl11
supervlse and provide for, or cause to be supervised and provlded for. as
agent for the Corporation, the complete constructlon, acquisition and
installation of the ProJect. The Lessee agrees that it wlll cause the work
under said contracts to be di1lgently 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 installed in accordance with the
specifications approved by the Lessee on or prior to the Acquisition Date.
The Lessee may change the specifications of the Project, 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 Acquisitlon Costs shall not
result from such change. unless the Lessee deposlts in the Lessee's
Acquisition Account an amount sufficient to pay such increase. In addltlon,
in the event that the costs of acquiring the Project are greater than the
amount of money deposited in or transferred to the Lessee1s Acquisitlon
Account, together with investment earnings thereon. the Lessee agrees to
deposit into the Lessee's Acquisition 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 constructlon, acquisitlon and
installation of any discrete portion of the Project, it will take possesslon
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 sell, assign and transfer to the Corporation
all of its rights under the contracts with respect to the portion of the
Project for which the Lessee has contracted prior to the Closing Date, lf
any, which contracts are attached to the lease Agreement as Exhibit F.
The Lessee hereby agrees to transfer and convey to the Corporation
title to the portion of the ProJect acquired prlor to the C10s1ng Date,
WhlCh portion of the Project is more particularly described 1n Exhiblt G to
the Lease Agreement.
Upon completlon of acquisltion and installation of the Project
reasonably satisfactory to the Lessee, but in any event not later than the
Acquisition Date, the Lessee shall deliver to the Trustee a Certificate of
Completlon.
If, on the Acqu;slt;on Date, moneys are remaining on deposit in the
Acqulsltion Account, such moneys shall be transferred to the Lessee's Lease
Payment Account and shall be applied, on the next succeeding Due Date. as a
Exhlbit D
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prepayment of Lease Payments and on the next succeeding Payment Date to the
redemption of Certlflcates pursuant to the provisions of Section 512(c) of
the Trust Terms and Conditions.
The parties agree that the Lease Agreement shall be deemed to be
effective as to each component of the Project as it is constructed, acquired
or installed, dnd upon dcceptance of a discrete portion af the Project, the
Lessee agrees to deliver to the Trustee a certificate of acceptance (a
aCertificate of Acceptance") which Certiflcate of Acceptance shall indicate
the proportionate amount of the Lessee's Project so 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 Lessee's
proport ionate share of Costs of Issuance and the di sCQunt taken by the
origlnal purchaser(s) of the Certiflcates) (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 Lessee's 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 Condltions.
Exhlblt D
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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
conditions set forth hereln.
SECTION 402. Termination 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
durlng 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 lts
assignee pursuant to Section 802(iii) of the Lease Terms and Conditlons.
(c) the Project is taken in whole pursuant to the power of eminent
domain and termination of the Lease Agreement pursuant to Sectlon 509 of the
Lease Terms and Conditions; or
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Upon occurrence of an event which will result in termlnation of the
Lease Agreement t the Trustee will not make any further dl sbursements from
the Lessee1s Acqulsition 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
applied to redemption of the Certificates.
SECTION 403. Lease Payments. The Lessee agrees to pay to the
Corporation or its successors and assigns~ as rental for the use and
possession of the Project, the Lease Payments on the Due Dates in the
amounts specified in Exhibit B to the Lease Agreement, provided that the
Lessee shall receive a credit for any amounts on hand ln 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 Lessee's
Reserve Account are equal to all Lease Payments remaining unpaid, such
monies shall be applied by the Trustee, 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 Payme"ts
under the Lease Agreement. A Lease Payment payab 1 e on a Due Date is 1 n
consideration for use and possession of the Project to the next occurring
Payment Date.
.
Lease Payments for each annual rental period during 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 possesslon of, and the contlnued qUlet use and
enjoyment of, the ProJect during each such period for which said rertal 1S
to be paid. The partles hereto have agreed and determined that such totai
Exhlblt 0
Page 6
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rental represents the fair rental value of the Project. In making such
determlnatlOn, consideration has been given to the costs of acquisition,
construction. delivery, ;nstallatlon and flnancing of the ProJect, other
obligations of the parties under the Lease Agreement, the uses and purposes
wh i ch may be served by the Project and the benefi ts therefrom wh i ch wlll
accrue to the Lessee and the general pUblic.
Each Lease Payment shall be paid in lawful money of the United States
of Amerlca to or upon the order of the Corporation at the corporate trust
offlce of the Trustee. Any such installment of rental accruing under the
Lease Agreement which shall not be pald when due shall bear interest at the
rate of ten percent (10%) per annum from the date when the same is due under
the Lease Agreement until the same shall be paid.
Lease Payments shall be pal d from any source of 1 ega lly avai 1 ab 1 e
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 duties imposed
by lawt 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 offielal 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 wlll furnish to the
Trustee, no later than 20 days following adoption 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 period.
To the extent that monies are available in the Lessee's Lease Payment
Account, the lessee's Reserve Account and the Lesseels Acquisition Account
for such purpose. the Lessee agrees to pay Lease Payments from such sources
regardless of whether or not it has acquired the ProJect.
SECTION 404. Possession and Enjoyment. During the Term of the
Agreement, the Corporat 1 on sha 11 prov i de the Lessee with qu 1 et use and
enjoyment of the Project, and the Lessee shall, during such Term, peaceably
and quietly have and hold and enjoy the Project, without suit, trouble or
hindrance from the Corporation, except as expressly set forth in the Lease
Agreement. The Corporation will, at the request of the Lessee and at the
Lessee's cost, join in any legal action in WhlCh the Lessee asserts its
right to such possession and enjoyment to the extent the CorporatlOn 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 Agreement.
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 damaging the Project.
The Lessee shall not have any rlghtt title or interest in the Project or ln
Exhibit D
Page 7
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.
.
any additions, repairs, replacements or modifications thereto except as
expressly provlded in the Lease Agreement.
If the lessee has paid all Lease Payments during the Term of the
Agreement, or upon deposit of the securlty deposlt as provided in Section
406 of the Lease Terms and Conditions, all rlght, 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 liens. The Corporatlon
agrees to defend and eliminate any claims adverse to the title to the
Project. and to save and hold the Lessee harmless therefrom; provided, that
the Corporatlon's obligations under this sentence shall not extend to claims
arising out of actions by the Lessee or persons asserting clalms under it;
provided that the Lessee shall reimburse the Corporation for any costs
incurred by the Corporatlon in defending or eliminatlng such claims,
includlng reasonable attorneys I fees.
SECTION 406. Securlty Deposit. Notwithstandlng any other provision
of the Lease Agreement, the Lessee may, on any date, secure the payment of
Lease Payments by a deposit with the Trustee of: (1) an amount WhlCh,
together with amounts on deposit 1n the Lessee's Lease Payment Account and
the Lessee's Reserve Account, is sufficlent to pay all unpaid Lease
Payments, including the principal and interest components thereof, in
accordance with the Lease Payment schedule set forth in Exhibit B to the
Lease Agreement. or (ii) Federal Securities, valued in accordance with
Section 308 of the Trust Terms and Condltions, together wlth cash, If
required, in such amount as will, in the oplnion of an independent certlfied
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
Account, 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
on ly the ob 11 gat i on of the Les see to make, or cause to be made, Lease
Payments from the deposit made by the Lessee pursuant to th1S Sectlon, and
title to the Project shall vest in the Lessee on the date of said deposit
automatically and without further action by the Lessee or the Corporation,
provided that t4tle shall be subject to the subsequent payment of Lease
Payments from said deposit in accordance with the provlsions of the Lease
Agreement. Said deposit shall be deemed to be and shall constitute a
speci a 1 fund for the payment of Lease Payments in accordance with the
provislons of the Lease Agreement.
SECTION 407. Abatement of Rental in the Event of Failure to Have Use
~~d 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 destruction
results in a redemptlon of a portlon of Certificates representlng interests
Exhib,t D
Page 8
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in the Lessee's lease Payment, the extent of such abatement shall be agreed
upon by the lessee and the Trustee, as assignee of the Corporatlon, such
that the resulting Lease Payments represent fair consideration for the use
and possession of the port ions of the Project not damaged or destroyed;
provided, however, that in the event such damage or destruct10n results 1n
redemption of Certificates, the resulting Lease Payments will be sufficient
to pay an of that portion of principal and interest on the rema1mng
Outstanding Cert ifi cates which represent interests in the lessee I s Lease
Payments. Such abatement shall not result so long as moneys in the Lessee's
Lease Payment Account and the Lessee's Reserve Account and Net Proceeds of
insurance and rental interruption insurance are sufficient to make Lease
Payments when and as due, 1t being hereby declared that such moneys and Net
Proceeds constltute special funds for the payment of Lease Payments. Such
abatement or adjustment, if any, shall continue for the period commenc1ng
with such damage or destruction and ending with the substantial completlon
of the work of repair or reconstruction, if any. In the event of any such
damage or destruction, this Agreement shall continue in full force and
effect and the Lessee waives any right to terminate this Agreement by vlrtue
of any such damage and destruction.
There shall be no abatement of Lease Payments to the extent that
moneys deri ved from any person as a resu 1 t of any defect or de lay in the
acqu1s1tlon or construction of the Lessee's Project are available therefor.
The amount of lease Payment s sha 1 1 a 1 so be aba ted to the extent, 1 f
any, requwed by operat1on of law resulting from the Lessee's failure to
have use and possession of the ProJect.
Exhiblt 0
Page 9
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
SECTION SOL Maintenance and Taxes. Throughout the Term of the
Agreement, as part of the consideratlon for the rental of the Project, all
improvement. repa i rand maintenance of the Proj ect sha 11 be the
responsibll ity of the Lessee, and the Lessee shall pay for or otherWlSe
arrange for the payment of the cost of the repa i rand replacement of the
Project resulting from ordinary wear and tear or want of care on the part of
the Lessee thereof. The Lessee shall maintain the Project in good working
order and shall comply with manufacturer or vendor requlrements with respect
to proper maintenance of the Project. if any. In exchange for the Lease
Payments hereln provided. the Corporation agrees to provide only the
ProJect, as hereinbefore more speclfically set forth.
The lessee shall also payor cause to be paid to the Corporation all
taxes of any type or nature charged to the Corp or at i on or affecting the
Project or the respective interests or estates therein, including, but not
llmited to. any sales tax. or affecting the amount available to the
Corporation from Lease Payments rece1ved under the Lease Agreement for the
retirement of the Certificates (including taxes or assessments assessed or
levied by any governmental agency or district having power to levy taxes or
assessments); provided, that w1th respect to governmental charges that may
lawfully be paid in installments over a perlod of years, the Lessee shall be
obligated to pay only such installments as are requ1red to be pald dunng
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 d1ligently pursue to conclusion any such taxes and other charges
and, in the event of any such contest, may permlt the taxes or other charges
so contested to remain unpaid dUr1ng the period of such contest and any
appeal therefrom unless the Corporation shall notify the Lessee that, in the
opinion of Independent Counsel. by nonpayment of any such items. the
interest of the Corporation in the Project will be materially endangered or
the Project or any part thereof will be subject to loss or forfeiture, ln
which event the lessee shall promptly pay such taxes or charges or provide
the Corporation with full security against any loss which 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 additlons and
mod1fications thereto. All such additions and modificat10ns shall
thereafter compr1se part of the Project and be subject to the provlsions of
the Lease Agreement. Such addltions 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 Section. shall be of a value WhlCh lS
equal to or greater than the value of the Project immed1ately prlor to the
making of such add1tions or modifications. The Lessee shall make no
modif1cations to the Project that jeapordize any warranties relatlng
thereto. The Lessee wi 11 not permit any mechanl c's or other 11 en to be
Exhibit 0
Page 10
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.
establlshed or remain against the Project for labor or materials furnlshed
ln connection wlth any remodellng, additions, modlflcations, repairs.
renewals or replacements made by the Lessee pursuant to thlS Section;
provided, that if any such lien is established and the Lessee shall flrst
notify the Corporation of the Lessee's lntention to do so, the Lessee may,
in good faith, contest and diligently pursue to conclusion any lien flled or
established against the Project and in such event may permit the items so
contested to remain undischarged and unsatisfied during the perlod of such
contest and any appeal therefrom. and shall. at the time of commencement of
such contest. provide the Corporation wlth full security against any loss or
forfeiture which might arise from the nonpayment of any such item, in form
sat i sf actory to the Corpora t i on. The Corporation wi 11 cooperate fu 11 y 1 n
any such contest. upon the request and at the expense of the Lessee.
SECTION 503. Pub 1 i c L 1 ab i 1 ity and Property Damage Insurance. The
lessee shall maintain or cause to be maintained, 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 is not provided by the
Contractors), a standard comprehenslve general fnsurance policy or policles
in protection of the Trustee, the Corporation and the Lessee and thelr
members. officers. agents and employees. Said policy or policies shall
provide for indemnification of said parties against direct or contingent
loss or 11ability for damages for bodily and personal injury, death or
property damage occasioned by reason of the acqulsition or operation of the
Project. Said policy or policies shall provide coverage in the minimum
liability limits of $1,000.000 for personal inJury or death of each person
and $3,000,000 for personal injury or deaths of two Dr more persons 1n each
accident or event. and in a mlnimum amount of $100,000 (subject to a
deductible clause of not to exceed $5.000) for damage to property resulting
from each accident or event. Such public liabillty and property damage
insurance may, however, be in the form of a single limit policy in the
amount of $3.000,000 covering all such risks. Such liability insurance may
be maintained as part of or in conjunctlon with any other liabi11ty
insurance coverage carried or required to be carried by the Lessee and, wlth
the approval of the Insurer, may be maintained in the form of self-
lnsurance. 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 dnd must consist of
Permitted Investments.
SECTION 504. fire a~d Extended Coverage Insurance.
(a) The Lessee shall procure, or cause to be procured, and mainta1n
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 is not
provided by the Contractors), lnsurance against loss or damage to any part
of the Project by fire and lightning! with extended coverage and vanda11sm
and mallcious mischief insurance. Said extended coverage insurance shall,
as nearly as practicable, cover loss or damage by explosion, wlndstorm.
riot. aircraft! vehicle damage. smoke. sprinkler damage, boiler explosion,
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 principal amount of the Certlficates then Outstandlng
relating to the Project, whichever is greater. Such insurance may be
Exhi bit 0
Page 11
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.
maintained as part of or in conjunction with any other fire and extended
coverage lnsurance 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 approved, must provide for amounts to be
segregated in a special insurance reserve meeting the requirements of this
Section, must be restricted specifically to the ProJect and must consist of
Permitted Investments.
The Lessee shall also procure, or cause to be procured, and maintained
throughout the Term of the Agreement, unless the Insurer agrees to wa1Ve
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 Outstandlng
relating to the ProJect, whichever is greater.
SECTION 505. Rental Interruption Insurance. 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 sufficlent 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
1 nsurance coverage as requ i red by th i 5 Sect i on 505, such coverage may be
maintained by the lessee in the form of self-insurance so long as the lessee
provldes evidence to the Trustee, the Insurer and the Corporation that the
Lessee has segregated amounts in a special lnsurance reserve meeting the
requirements of this Section 505, restricted speciflcally 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's
Lease Payment Account, and shall be cred ited toward s the payment of the
lease Payment sin the order in wh i ch such lease Payments come due and
payable.
SECTION 506. Insurance Net Proceeds; Form of Policies. The po11cles
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 lender1s loss payable endorsement substantlally in
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 Condltions or Section 505 of the Lease Terms and Conditions, as
the case may be. In 1 i eu of obta 1 n1 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 50 long as the Lessee
provldes evidence to the Trustee and the Corporation that (i) the Lessee has
segregated amounts in a special insurance reserve meeting the requirements
of Sectlon 504 and restricted specifically to the Project, or (ii) an
Insurance Consultant certifies to the Trustee and the Corporation that the
Lessee I s general 1 nsurance reserves are adequate to provi de the necessary
coverage. A 11 pol i ci es of i n5urance requ i red 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.
Exhlbit 0
Page 12
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The Lessee shall payor cause to be paid when due the premlums for all
insurance policies requlred by the Lease Agreement, and shall promptly
furnlsh or cause to be furnished evidence of such payments to the Trustee
and the Insurer. All such policies shall provide that the Trustee shall be
given thlrty (30) days' notlce of each expiration, any intended cancellation
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, compromlse 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 sha 11 fail to perform any of
its Obligations under this Article, the Corporation may, but shall not be
obligated to, take such action as may be necessary to cure such failure,
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
repayment, 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 Articlet the
Les see sha 11 prompt 1 y , at its own expense, take such act i on as may be
necessary to duly discharge or remove any such mortgage, pledge, lien,
charge, encumbrance Dr claim for ~hich it is responsible, if the same shall
arise at any time. The Lessee shall reimburse the Corporation for any
expense incurred by it in order to di scharge or remove any such pledge t
lien, charge, encumbrance or claim.
SECTION 509. Eminent Domain. If all or part of the Project is taken
under the power of eminent domaln, the Net Proceeds from any award resulting
therefrom shall be deposited ~ith the Trustee pursuant to Section 5.10{b) of
the Lease Terms and Conditions and the Lessee Representative shall file a
certificate wlth the Trustee as provlded 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
portion of the Project is no longer useful for the purposes originally
intended, the remaining Lease Payment obligations of the Lessee will be
abated in full and this Agreement shall thereupon be terminated. Otherwlse,
(I) thlS Agreement shall continue in full force and effect and shall not be
termlnated by virtue of such taking and the parties waive the benefit of any
1 aw to the contrary, and (2) there sha 11 be a proport i onate abatement of
Lease Payments such that the resulting Lease Payments ~ill be sufficient to
pay all of that portion of principal and interest with respect to the
remaining Certificates whiCh represent interests in the Lessee's Lease
Payments.
.
Exhiblt 0
Page 13
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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 certiflcate 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 Emi nent Domai n Award. The Net Proceeds of any eml nent
domain award resulting from any event described in Section 509 of the Lease
Terms and Cond it ions s ha 11 be depos ited in the I nsurance and Condemna t i on
Fund to be held and applied by the Trustee pursuant to Sectlon 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 shall, on the C10s1ng Date, deliver to
the Trustee a title insurance pOlicy insuring the Lessee's fee title estate
in the site relating to the Project, if any, and the Corporation's leasehold
estate in the site relating to the Project and the Project in an amount
equal to the total principal 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 Corporat i on by the Trustee for the performance by the Trustee of its
duties under the Trust Agreement, 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.
Exh1blt D
Page 14
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ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
SECTION 601. Disclaimer of Warranties. THE CORPORATION MAKES NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, 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, FURNISHING,
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 in the enforcement of such warranty, including reasonable
attorneys' fees.
SECTION 603. Corporation and Insurer Access to the Project. The
Lessee agrees that the Corporation, the Insurer, any Corporation
Representative and the Corporation's successors or asslgns, shall have the
nght at all reasonable times to examlne and inspect the Project. The
Lessee further agrees that the Insurer, Corporation, any authorized
representative or either, and the Corporation's successors or assigns 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.
Exhibit D
Page 15
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ARTICLE VI I
ASSIGNMENT, SUBLEASING AND INDEMNIFICATION
SECTION 701. Assifjnment by Corporation. The Corporation1s rights
under the Lease Agreement, including, but not limlted to, the nght 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 Subleasin!i by the Lessee. The Lease
Agreement may be assigned or subleased by the Lessee upon the prior approval
of the Insurer, provided, that any sublease or assignment shall be subject
to all of the following conditions:
{i} The Lease Agreement and the ob 1 i gat i on 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
{iii} The Lessee shall, within thirty (30) days after the
dellvery thereof, furnish or cause to be furnlshed 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 proviSlons of the
Constltution and laws of the State of California; and
(v) The Lessee shall have del ivered to the Trustee and the
Insurer an opinion of nationally recognized bond counsel to the effect
that such sublease or assignment shall not cause the interest
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 Corporatlon harmless from and
against all claims, losses and damages, including legal fees and expenses,
arising out of (i) the use, maintenance, condition or management of, or from
any work or thing done on the Project by the Lessee, (i i) any breach or
default on the part of the Lessee in the performance of any of its
obligations under the Lease Agreement, (iii) any act or negllgence of the
Lessee or of any of its agents, contractors, servants, employees or
1 icensees with respect to the Project, (iv) any act or negligence of any
assignee or sublessee of the Lessee, or of any agents, contractors.
servants, employees or licensees of any assignee or sublessee of the Lessee
wlth respect to the ProJect, or (v) the delivery, lnstallation and
acqulsition of the Project or the authorizatlon of payment of the
AcqUisition Costs by the Lessee. No indemniflcation is made by the Lessee
Exhiblt D
Page 16
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.
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under this Section or elsewhere in the Lease Agreement for willful
misconduct, negllgence, or breach of duty under this lease by the
Corporation, its officers, agents, employees, successors or assigns.
Exhibit 0
Page 17
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ARTICLE VII I
EVENTS OF DEFAULT AND REMEDIES
SECTION 801. Events of Default Def1ned. The following shall be
"events of default" under the Lease Agreement and the terms lIevents of
defaultll and IIdefaultll shall mean. whenever they are used in the Lease
Agreement. wi th respect to the Project. anyone or more of the fa 11 owi ng
events:
(i) Fal1ure by the Lessee to pay any Lease Payment or other
payment requ i red 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 Section. far a periOd of
thirty (30) days after written notice specifying such fa11ure and
requesting that it be remedied has been given to the Lessee by the
Corporation. the Insurer. the Trustee. or the Owners of not less than
twenty-five percent (25%) in aggregate principal amount of
Certificates then outstanding; provided. however. if the failure
stated in the notice cannot be corrected within the applicable period.
the Corporation. the Trustee. the Insurer and such Owners will not
unreasonably withhold their consent to an extension of such time 1f
correct we action is instituted by the Lessee w1thin the appllcable
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 execution.
garnishment or attachment, or the filing of an involuntary pet1tion in
bankruptcy agalnst the Lessee which petition shall not have been
withdrawn within sixty (60) days. or assignment by the Lessee for the
benefit of creditors, or the entry by the Lessee into an agreement of
camposit ion with creditors, or the approval by a court of competent
juriSdiction of a petition applicable to the Lessee in any proceedings
instituted under the provi sions 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
contlnuance of any event of default specif1ed in Section 80l{i) or 80l(iii)
of the Lease Terms and Conditions, the Trustee. as ass1gnee of the
Corporat lOn, sha 11 proceed at the direct i on of the Insurer, or upon the
occurrence of an event of default specified in Section 801 (1i)of the Lease
Terms and Conditions at the direction of the Insurer, may proceed. and upon
written request of the Insurer and the Owners of not less than a majority in
aggregate prlncipal amount of Certificates then Outstanding shall proceed,
to:
(i) Protect and enforce the Lease Agreement by such jUd i C1 a 1
proceeding as the Corporation or its assignee shall deem most
effectual. either by SUlt in equity or by action at law. whether for
the specific performance of any covenant or agreement conta1ned in the
Exhibit D
Page 18
.
.
.
Lease Agreement, or in aid of the exercise of any power granted in the
Lease Agreement, or to enforce any other 1 ega' or equ i tab 1 e ri ght
vested in the Corporat10n or lts assignee by the Lease Agreement or by
1 aw; or
(ii) Take possession of the Project and exclude the Lessee from
using it until the default is cured, holding the Lessee liable for the
Lease Payments and other amounts payable by the Lessee prior to such
taki ng of the Project under and pursuant to the Lease Agreement and
the curing of such default; or
(iii) If the Project consists of real property, to relet the
ProJect for a period equal to the greater of (a) the remainlng 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 app 1 y the proceed s of SU ch sale to the Lease
Payment obligations of the lessee; or
(v) Take whatever action at law or in equity may appear
necessary or desirable to enforce the Corporation's rights as the
owner of the PrOJect, i nc 1 ud i ng termi nat i on 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 Remedy Exclusive. No remedy herein conferred upon or
reserved to the Corporation is intended to be exclusive 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
equ1ty. No delay or om1ssion to exercise any rlght or power accruing upon
any default shall impair any such right or power or shall be construed to be
a waiver thereoft but any such right and power may be exercised from time to
time and as often as may be deemed exped i ent. In 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 noticet other than such notice as may be
required in th1S 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 nondefaulting party should employ attorneys or
incur other expenses for the collection of monies or the enforcement or
performance or observance of any obligation or agreement on the part of the
defaulting party here1n containedt 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 Impl1ed by One Waiver. In the
event any covenant contained 1n the Lease Agreement should be breached by
either party and thereafter waived by the other party, such wa1ver shall be
limited to the particular breach so wa1ved and shall not be deemed to wa1ve
any other breach under the Lease Agreement.
Exhib1t 0
Page 19
.
.
.
ARTICLE IX
OPTION TO PURCHASE; OPTION TO PREPAY
SECTION 901. Purchase Opt10n. 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 def au 1 t under Sect i on SOl (i) or ( i i i ) of the Lease Terms and
Conditions, and only in the manner provided 1n this Article.
SECTION 902. Exerc1se of Optlon. 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 pnncipal portion of Lease Payments in whole, plus premium, if any
(as set forth in Section 904 of the Lease Terms and Conditions), plus
accrued interest on such principal port10n to the applicable June 1 or
December 1 set for redemption of the Certificates. Such purchase price
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 exerC1se 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 business days or more prior to said June
1 or December 1, an amount equal to the unpaid princlpal amount of Lease
Payments, plus premium, if any, plus accrued interest on such princlpal
port i on of Lease Payments to such June 1 or December L If the Lessee
exercises its option to purchase the Project pursuant to this Section, any
amount then on hand 1 n the Lessee's Reserve Account, the Lessee's Lease
Payment Account (excluding amounts required for payment of past due
princlpal 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 applicable purchase price to be
paid by the lessee. If the Lessee shall have given notice to the Trustee of
its intention to purchase the Project, but sha 11 not have depos i ted the
purchase pri ce wi th the Tru stee on the date spec if i ed in such not ice, 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 lts 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 opt10n
to prepay in whole or in part (but not in an amount of less than $20,000)
the principal component of Lease Payments relatlng to Certificates maturing
in the years identified below, on the following dates and in the following
amounts, together with the premiums set forth below (expressed as a
percentage of the principal amount prepald):
Exhlb1t 0
Page 20
Prepayment Option Date Prepayment Prem1um
. 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 1, 1999 ... eo . . 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 Slxty (60) days in advance of
the date of exercise and shall depos1t with the Trustee on or prior to three
business days prior to said June lor December 1, an amount equal to the
principal component of Lease Payments belng prepaid. plus the appllcable
premium plus accrued interest to the date of redemption.
rn the event of the Lessee1s 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.
.
.
Exhl bit 0
Page 21
.
.
.
ARTICLE X
MISCELLANEOUS
SECTION 1001. Notices. All notices, certificates or other
communications hereunder shall be sufficiently g1ven and shall be deemed to
have been received 48 hours after deposit in the United States mall in
registered or certified form with postage fully prepaid when sent to the
addresses shown on Exhibit E to the Lease Agreement.
The Trustee, the Insurer, the Corporation 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 inure to the
benefit of and shall be binding 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 invalidate or render unenforceable any
other provlsion thereof.
SECTION 1004. Amendments t Changes and Modi fications. The Lease
Agreement may be amended or any of lts terms mod1fled with the written
consent of the lessee and the Corporation; provided, 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 "net-net-net lease" and the Lessee hereby agrees that
the Lease Payments shall be an absolute net return to the Corporation, 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 will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknow1edged and
delivered, such supplements hereto and such further instruments as may
reasonably be requ1red 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. Execut i on 1 n Counterparts. The Lease Agreement may be
executed in several counterparts, each of which shall be an original and all
of WhlCh shall constitute but one and the same instrument.
SECTION 1008. Applicable Law. The Lease Agreement shall be governed
by and construed ln accordance with the laws of the State of Californ1a.
SECTION 10.9. Corporation and Lessee Representatives. Whenever under
the provisions of the Lease Agreement the approval of the Corporation or the
les see is requ ired, or the Corporat i on or the Les see is requ i red to take
some action at the request of the other, such approval or such request shall
be gi ven for the Corporation by a Corporation Representat i ve and for the
Exhibit 0
Page 22
.
.
.
Lessee by a Lessee Representat1ve, and any party hereto shall be authorized
to rely upon any such approva1 or request.
SECTION 10.10. Captions. The captions or headings in the Lease
Agreement are for convenlence only and in no way define, limit or describe
the scope or intent of any provisions or Section of the Lease Agreement.
Exhlbit D
Page 23
.
EXHIBIT E
ADDRESSES FOR NOTICE PURPOSES
If to the Corporation:
If to the Lessee:
If to Trustee:
If to the Insurer:
.
.
Callfornia Cities F1nancing Corporation
1400 K Street, Suite 400
Sacramento, California 95814
Attn: Secretary
City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attn: Dlrector of Finance
First Interstate Bank of Californ1a
707 Wilshire Boulevard
Los Angeles, California 90017
Attn: Corporate Trust Dept. (WIO-2)
USF&G Financial Security Company
601 Montgomery Street
San Francisco, California 94111
Attn: General Counsel
Exhlbit 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
.
.
Exhibit G
Page 1
,
:-
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13050-5
JHHW:BOQ:rms 02/26/86
Z1835
,
lEASE AMENDMENT
dated as of February 1, 1986
by and between the
CALIFORNIA CITIES FINANCING CORPORATION
and the
CITY OF SANTA MONICA, CALIFORNIA
Amending that certain Lease Agreement
dated as of December 1, 1985
by and between the
California Cities Financ1ng Corporation
and the
City of Santa Monica, California
"e
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 CITY OF SANTA MONICA, 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
Agreernentl1);
WIT N E SSE T H:
e
WHEREAS, the City has, pursuant to the Lease Agreement agreed to lease
that certain equipment described in Exhibit C to the Lease Agreement (the
II Project II) from the Corporat i on 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 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
certa1n Trust Agreement, dated as of December 1, 1985, among the C1ty, the
Corporation and First Interstate Bank of California, as trustee (the
"Trusteell) (the "Trust Agreementll), 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 determlned that, due to circumstances beyond 1tS
control, all components of the Project can not be acquired on or before the
Acquisltion Date; and
WHER.EAS, the City desires to extend the Acqulsition Date to a date
which w111 permit the acquis1tion of the Project and wl11 not cause a
prepayment of the Lease Payments and a redemption of the Certificates; and
e
WHEREAS, the City is w1lling to deposit with the Trustee such moneys
as are necessary to provide additional capitalized interest with respect to
the Certificates for the period from March 1, 1986 to Apr1l 15, 1986; and
WHEREAS, the Section 1004 of the lease Terms and Conditions (as
def i ned in the Lease Agreement) prov i de s that the Lease Agreement may be
amended or any of lts terms modified wlth the wr1tten consent of the City
and the Corporation, provided that no such amendment shall become effective
unless approved by the Trustee and the Insurer (as def1ned in the Trust
Agreement); and
NOW, THEREFORE, in consideration of the above prem1ses and of the
mutual covenants herelnafter contained and for other good and valuable
consideration, the parties hereto agree as follows:
"e
e
e
SECTION 1. Amendment of the lease Agreement. The definition of the
term IIAcquisition Daten as stated in Exhibit A to the Lease Agreement is
hereby amended to read as follows:
nAcquisition Daten means April 15, 1986.
SECTION 2. Additional Capitalized Interest. The City hereby deposits
with the Trustee, or acknowledges such prior deposit, of $3,137.50,
representing additional capitalized interest with respect to the
Certificates for deposit to the Lease Payment Account relating to the City
establ ished pursuant to the Trust Agreement, for the period from March 1,
1986 to April 15, 1986.
SECTION 3. Execution in Counterparts. This Lease Amendment may be
executed in several counterparts, each of which shall be an original and all
of which shall constitute but one and the same instrument.
SECTION 4. Applicable Law. This Lease Amendment shall be governed by
and construed in accordance w1th the laws of the State of Californla.
IN WITNESS WHEREOF, the Corporation has caused this Lease Amendment to
be executed in its corporate name by its duly Authorized Officer; and the
City has caused this Lease Amendment to be executed and attested in its name
by its duly Authorized Offlcers and sealed with its corporate seal, as of
the date hereinabove stated.
Attest:
~fti-.-~'-<<Y-llk-1, ~
Secretary
CAllFORNI~I~IES ~:NANjCING CORPOR~::
By: )'/;idlb!ll ,~,I-$
pre~~:~.
CITY OF SANTA MONICA
Attest:
By:
City Clerk
Clty Manager
Approved:
UNITED STATES FIDELITY & GUARANTY COMPANY
By:
Title:
FIRST INTERSTATE BANK OF CALIFORNIA
By:
Asslstant Vice President
-2-
,
,
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..
SECTION 1. ~~ndment of the Lease Agreement. The definition of the
term lIAcquisition Date II as stated in Exhibit A to the Lease Agreement is
hereby amended to read as follows:
"Acquisition Date" means April 15, 1986.
SECTION 2. Additional Capitalized Interest. The City hereby deposits
with the Trustee, or acknowledges such prior deposit, of $3,137.50,
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 April 15, 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 Off1cer; and the
City has caused this Lease Amendment to be executed and attested in its name
by its duly Author1zed Officers and sealed with its corporate seal, as of
the date hereinabove stated.
CALIFORNIA CITIES FINANCING CORPORATION
Attest:
By:
Secretary
President
CITY OF SANTA MONICA
Att~:
(f J, ~ ,I
V--:4~ If? ~
City Clerk
By:
. .
~ ~--C~,
City Manager
Approved:
APPROVED AS TO FORM
~ "-. \..----
. .. ---.-, - ~ <-;-\' ~
UNITED STATES FIDELITY & GUARANTY COMPANY
By:
Tit le:
FIRST INTERSTATE BANK OF CALIFORNIA
By:
Assistant Vlce Pres1dent
-2-
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SECTION 1. Amendment of the Lease Agreement. The definition of the
term IlAcquisition Date" as stated in Exhiblt A to the Lease Agreement is
hereby amended to read as follows:
IlAcquisition Datell means April 15. 1986.
SECTION 2. Additional Capitalized Interest. The City hereby deposits
with the Trustee, or acknowledges such prior deposit. of $3,137.50,
representing additional capitalized 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 1,
1986 to April 15, 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 Californla.
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 w1th its corporate seal, as of
the date hereinabove stated.
CALIFORNIA CITIES FINANCING CORPORATION
Attest:
By:
Secretary
President
CITY OF SANTA MONICA
Attest:
By:
City Clerk
City Manager
Approved:
UNITED STATES FIDELITY & GUARANTY COMPANY
~j I \ . - . a..J:J.d:' ,. -
. ---T " .
~ ~ ;
Title: \I \ 1....<- \~'\/d..~ 4e.~
FIRST INTERSTATE BANK OF CALIFORNIA
By:
By:
Assistant Vlce President
-2-
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..
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SECTION 1. Amendment of the Lease Agreement. The definition of the
term "Acquisition Date" as stated in Exhib1t A to the Lease Agreement is
hereby amended to read as follows:
"Acquisition Date" means Aprll 15, 1986.
SECTION 2. Additional Capitalized Interest. The City hereby deposits
with the Trustee! or acknowledges such prior deposit, of $3,137.50,
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 I!
1986 to April 15, 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
CITY OF SANTA MONICA
Attest:
By:
City Clerk
City Manager
Approved:
UNITED STATES FIDELITY & GUARANTY COMPANY
By:
Title:
FIRST INTERSTATE BANK OF CALIFORNIA
By: l.cJe.CJJ~/~Jt---
Asslstant V1ce Pfesident
-2-
.
.
.
13050-5
JHHW:BDQ:rms 11/19/85
12/17/85
12/22/85
:rms 12{24/85
Zl635
LEASE AGREEMENT
Dated as of December 1, 1985
by and between
CALIFORNIA CITIES FINANCING CORPORATION
and the
CITY OF SANTA MONICA, CALIFORNIA
CALIFORNIA CITIES FINANCING CORPORATION
POOLED FINANCINGt 1985 SERIES E
TABLE OF CONTENTS
. Page
SECTION 1.1 Deflnitions............................................. 2
SECTION 1.2 Exhibits................................................ 2
SECTION 1.3 Agreement to Lease...................................... 2
SECTION 1.4 Lease Payments.......................................... 2
SECTION 1.5 Notlces............................................~.... 2
SECTION 1.6 Terms and Conditlons.................................... 2
.
Exhibit A - Definitions
Exhibit B - Schedule of Lease Payments
Exhibit C - Description of Project
Exhibit D - Lease Terms and Conditions
Article I - Defin1tions
Artlcle II - Representations, Covenants and
Warranties
Article III - Deposit of Mon1es; Acquisition of
the Project
Art1cle IV - Agreement to Lease; Termination of
Lease Agreement; Lease Payments; Title to the
ProJect
Article V - Maintenance; Taxes; Insurance; and
Other Matters
Artlcle VI - Disclaimer of Warranties; Access
Article VII - Assignment, Subleas1ng and
Indemnifi cat i on
Art1cle VIII - Events of Default and Remedies
Art1cle IX - Miscellaneous
Exhibit E - Addresses for Notice Purposes
Exhibit F - Contracts Assigned to Corporatlon
Exhlbit G - Descr1pt1on of Previously Acquired Portion of Project
.
( i )
.
.
.
LEASE AGREEMENT
THIS LEASE AGREEMENTt dated as of the Dated Date, by and between the
CALIFORNIA CITIES FINANCING CORPORATION, a nonprofit publlC benefit
corporation duly organized and existing under the laws of the State of
California, as lessor (the "Corporation")t and the CITY OF SANTA MONICA! a
Political Subdivision, duly organized and existlng under the laws of the
State of Ca11fornia (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 Californla to enter into leasehold agreements for
such purposes; and
WHEREAS! the Governi ng Body of the Lessee has determl ned that, in
order to accomplish such purposes, it is necessary and desirable to acquire
the ProJect by leasing the same pursuant to this Lease Agreement; and
WHEREAS! the Corporation wll1 cause to be deposited with the Trustee
funds for the acquis1tion of the Project to be leased pursuant to thlS Lease
Agreement;
NOW, THEREFORE, in consideratlon of the above premises and of the
mutual covenants hereinafter contained and for other good and valuable
cons1deration, the partles hereto agree as follows:
.
.
.
DEFINITIONS AND EXHIBITS
SECTION 1.1. Definitions. Unless the context otherwise requires,
capitalized terms used herein and in the Lease Terms and Conditions, have
the mean 1 ngs spec if i ed in Exh i bit A. A 11 terms not defl ned here 1 n sha"
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:
Exhlbit 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: Descriptlon of the Project.
Exhibit 0: Lease Terms and Conditions.
Exhibit E: Addresses for Notices.
Exhibit F: Contracts Assigned to Corporation.
Exhibit G: Description of Prevlously Acquired Portlon of Project.
SECTION 1. 3. Agreement to Lease. The Corporat i on hereby agrees to
1 ease the Project to the Lessee and the Lessee hereby agrees to 1 ease the
Project from the Corporatlon.
SECTION 1.4 Lease Payments. As rental for the Project, the Lessee
agrees to pay to the Corporation or lts assigns, on the Due Dates, the Lease
Payments 1n the amounts shown on Exhlbit B.
SECTION 1.5. Term of Agreement. The Term of this Lease Agreement
shall commence as of the Dated Date and shall end on the Termination Date,
unless on such date any Certificates of Participat10n remain outstandlng, in
which case this Lease Agreement shall remain in full force and effect while
any Certificates of Participation are outstanding or unless term1nated prlor
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 here1n 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 ; nits
name by its duly Authorized Officers and sealed with its corporate seal, as
of the Dated Date.
CALIFORNIA CITIES FINANCING CORPORATION
(S EAt.)
Attest:
,&cz-.-~J~~
SfH~ rs tary
By:
CITY OF SANTA MONICA
(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 du 1 y Author i zed Off i cer; and the
Lessee has caused this 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
(S E A L) .
Attest:
By:
Secretary
President
CITY OF SANTA MONICA
(S E A L)
Ata- /0~.
City C1erk
-Q
By: -
~ .Jz-~~L
City Manaqer
-3-
.
.
.
EXHIBIT A
DEFINITIONS - CITY OF SANTA MONICA
"Acqu1sition Costs" means, with respect to the Project, the contract
pri ce pa i d or to be pa i d to the Contractors therefor upon acqu 1 sit i an,
construction, installation or delivery of any portion of the Project and
related equipmentt if any, in accordance with the purchase order or contract
therefor. Acquisition Costs lnclude the costs of site preparation necessary
for the 1nstallation af the Project, as well as the administrative,
engineering, legal, f1nanc1al, tltle insurance and other costs incurred by
the Lessee, the Corporation and the Contractors 1n connection with the
acquisitiont construction, delivery and installation by the Corporation of
the ProJect.
"Acquis1tlon Date" means February 25, 1986.
IIBusiness Day II 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 buslness.
IICodell means the Internal Revenue Code of 1954 as amended. Any
citat10n to a provision of the Code shall be deemed to include the
applicable regulat10ns of the United States Department of the Treasury
promulgated with respect to such provis1on.
"Corporat1on Representat1vell means the Presldent of the Corporation or
his des1gnee, or any other person authorized to act on behalf of the
Corporation with respect to the Lease Agreement.
"Certificate of Completionll means a certificate of the Lessee
Representat1Ye certifying that all equlpment and other personal property
constituting a portion of the Project has been acquired, installed and
accepted by the Lessee, and that all Acquisition Costs have been pa1d.
"Cert1ficates of Participationll or "Certificates" means the
Certificates of Partic1pation to be executed and dellvered pursuant to the
Trust Agreement and which evidence a right to receive a proportionate share
of Lease Payments and proceeds received on account of the Lease Agreements.
"Closing Date" means the date when the Certlficates of Participation,
duly executed by the Trustee, are de11vered to the original purchaser
thereaf.
"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 wlth whom the Corporation or the Lessee on behalf of the
Corporation has contracted or caused to be contracted for the acquiS1tion,
construct1on and installation of the Project.
"Corporatlon' means the California Cities Flnancing Corporation, a
nonprof1t publlC benefit corporat10n duly organ1zed and eX1sting under the
laws of the State of Callfornla.
Exhibit A
Pas=:; :
.
.
.
tlDated Datetl means December 1, 1985.
tlDue Datestl means May 15 and November 15, commencing May 15, 1986.
II Federal Securitiesll means direct obligations of (includlng
obligations issued or held in book entry form on the books of the Department
of the Treasury of the Un1ted States)~ or obligations the principal of and
interest on which are unconditionally guaranteed by the United States of
America.
tlGoverning Body" means the City Council of the Lessee.
"Independent Counsel" means an attorney duly admitted to the practice
of law before the highest court of the State of California and who 1S not an
employee of the Corporation, the Trustee or the lessee.
Il Insurance Consultant" means any person or firm knowl edgabl e with
respect to insurance carried by, required for and avallable to Political
Subdivis1ons.
IlInsurance and Condemnation Fund" means the fund by that name
established and held by the Trustee pursuant to Section 4.6 of the Trust
Agreement.
IlInsurance Policyll or "policyll means FinanClal 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) w1th respect to
the Certificates.
"Insurer" means United States Fldelity & Guaranty Company~ and its
successors and asslgns.
II Lease A~reement II or Il Agreement Il means th 1 S Lea se Agreement, and any
duly authorized and executed amendment hereto.
IILease Agreements II means the several Lease Agreements, each dated as
of the Dated Date~ between the Corporation and the Cities of Delano~
Fontana, Santa Monlca and Thousand Oaks, respectively.
IILease Payment II means any payment due from the Lessee to the
Corporation under Section 1.4 of the Lease Agreement and Section 403 of the
Lease Terms and Condit1ons.
"Lease Terms and Conditions" means those certain Lease Terms and
Conditlons attached to the Lease Agreement as Exhibit D.
IILessee" means the City of Santa Mon1ca~ Californla, a chartered C1ty,
duly organized and existing under the laws of the State of California.
"Lessee Representative" means the Mayor~ City Manager or Finance
D1rector, 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.
Exhlblt A
Pase 2
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.
.
IIlessee's Acquisition Account" means the Acquis1tion Account
establlshed and held by the Trustee for the Lessee pursuant to Section 2.5
of the Trust Agreement.
II Lessee I s Lease Payment Account U means the Lease Payment Account
established and held by the Trustee for the Lessee pursuant to Section 2.7
of the Trust Agreement.
"Lesseels Reserve Accountll means the account by that name established
and held by the Trustee pursuant to Section 2.10 of the Trust Agreement.
"Net Proceeds" means any property or casualty insurance proceeds paid
wlth respect to the Project, remaining after payment therefrom of all
expenses incurred in the collectlon thereof.
ItOwnerU or "Certificate Owner" or uOwner of a Certif1cate," or any
similar~m, when used with respect to the Certlf1cates, means the
registered owner of any Certificate.
"Payment Dates" means June 1 and December 1, commencing June 1, 1986.
"Permitted Encumbrances" means, as of any particular tlme: (i) liens
for general ad valorem taxes and assessments, If any, not then delinquentt
or which the Lessee may, pursuant to provisions of Article V hereof, perm1t
to remain unpaid; (il) the Lease Agreement; and (iii) the Trust Agreement.
"Political Subdwislon" means a public agency deemed to be a
"political subdivision" of the State of California, as that term lS used 1n
Sect10n 103 of the Code.
uPrincipal Amount" means the total unpald principal portlon of the
Lease Payments due under the Lease Agreement.
II Project 11 means that certa; n equ i pment to be acqu i red from the
proceeds of the Certificates deposited 1n the Lessee's Acqulsition Account,
as shown on Exhibit C.
IlReserve Fundu means the fund by that name establlshed and held by the
Trustee pursuant to Section 2.10 of the Trust Agreement.
IlTerm of the AgreementU or uTerm" means the time during which the
Lease Agreement is in effect, as provided for in Section 1.5 of the Lease
Agreement.
IITermination Date" means December 1, 1992.
"Trust Agreement II means the Trust Agreement, dated as of the Dated
Date, by and among the Trustee, the Lessees and the Corporation, and any
duly authorized and executed amendment thereto.
"Trusteell means First Interstate Bank of Californla, as trustee,
apPolnted under the terms of the Trust Agreement.
Exhlblt A
Page 3
EXHIBIT B
.
CITY OF SANTA MONICA
SCHEDULE OF LEASE PAYMENTS
Principal Interest Tota 1
Due Date Component Component Lease Payment
May 15, 1986 $12 , 550 .00 $12,550.00
November 15, 1986 $45,000 12,550.00 57,550.00
May 15, 1987 11,256.25 11,256.25
November 15, 1987 45,000 11,256.25 56,256.25
May 15, 1988 9,850.00 9,850.00
November 15, 1988 50,000 9,850.00 59,850.00
May 15, 1989 8,225.00 8,225.00
November 15, 1989 50,000 8,225.00 58,225.00
May 15, 1990 6,537.50 6,537.50
November 15, 1990 55,000 6,537.50 61,537.50
May 15, 1991 4,612.50 4,612.50
November 15, 1991 60,000 4,612.50 64,612.50
May 15, 1992 2,437.50 2,437.50
November 15, 1992 65,000 2,437.50 67,437.50
.
.
Exhibit B
Pase 1
.
.
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EXHIBIT C
DESCRIPTION OF PROJECT
A new Seagrave 100 ft. tractor/trailer aerial ladder f1re truck.
The cost of the truck is $285,896.58.
Exhlbit C
Page 1
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13050-5
JHHW:BDQ:rms 11/19/85
12/22/85
12/27/85
Zl638
EXHIB IT D
LEASE TERMS AND CONDITIONS
.
.
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EXHIBIT 0
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Def, nl t, ons. . . . . . . . . . . . . .. . . . .. . . .. .. .. .. .. . e .. .. .. .. .. .. .. .. . .. . .. .. . .. .. .. .. .. .. .. .. .. .. .. .. '5 .. .. .. .. .. .... 0-1
ARTICLE II
REPRESENTATIONSt COVENANTS AND WARRANTIES
SECTION 201 Representationst Covenants and Warrantles
of the Les see. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. D- 2
SECTION 202 Representations, Covenants and Warranties
of the Corporation..................................... 0-2
SECTION 301
SECTION 302
SECTION 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....................................... 0-4
Acquisition of the Project.............................. 0-4
Payment of Acquisltion Costs............................ D-5
ARTICLE IV
AGREEMENT TO LEASE; TERMINATION OF
THE LEASE AGREEMENT; LEASE PAYMENTS;
TITLE TO THE PROJECT
Agreement to Lease...................................... 0-6
Termination of the Lease Agreement...................... D-6
Lease Payments.............................................................................. 0-6
Possession and Enjoyment................................ 0-7
Title to the Project.................................... D-7
Security Deposit........................................ D-8
Abatement of Rental in the Event of failure to
Have Use and Possession of the Project................ 0-8
(; )
.
.
.
SECTION 501
SECTION 502
SECTION 503
SECTION 504
SECTION 505
SECTION 506
SECTION 507
SECTION 508
SECTION 509
SECTION 510
SECTION 511
SECTION 512
SECTION 601
SECTION 602
SECTION 603
SECTION 701
SECTION 702
SECT! ON 703
SECTION 801
SECTION 802
SECTION 803
SECTION 804
SECTION 805
Page
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Maintenance and Taxes................................... 0-10
Modification of Project................................. 0-10
Public Liability and Property Damage
Insurance.............~..~.~.......................... D-11
Fire and Extended Coverage Insurance.................... 0-11
Rental Interruption Insurance........................... 0-12
Insurance Net Proceeds; Form of Policies................ 0-12
Ad v an c e s . . .. . . . . . ,., . . . . . .. . .. . .. . . . . . . . . . . . . . .. .. . .. . . -II . ... . .. . . . .. 0 -13
Liens.................4................................. 0-13
Eminent Domain.......................................... 0-13
Application of Net Proceeds............................. 0-14
Title Insurance........................................... 0-14
Agreement to Pay Trustee's Fees......................... 0-14
ARTICLE VI
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 Subleasing by the Lessee................. 0-16
Release and Indemnification Covenants................... 0-16
ARTICLE VI I I
EVENTS OF DEFAULT AND REMEDIES
Events of Default Defined............................... 0-18
Remedies on Default..................................... D-18
No Remedy Exclusive..................................... D-19
Agreement to Pay Attorneys I Fees and Expenses........... 0-19
No Additional Waiver Implied by One Waiver.............. 0-19
(i i )
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Page
ARTICLE XI
OPTION TO PURCHASE; OPTION TO PREPAY
SECTION 901
SECTION 902
SECTION 903
SECTION 904
Purchase Option....................................~..... 0-20
Exercise of Option....................................... 0-20
Transfer of Title and Release of
Corporat1on's Interest................................. 0-20
Option to Prepay......................................... D-20
ARTICLE X
MISCELLANEOUS
SECTION 1001 Notices................................................. 0-22
SECTION 1002 Binding Effect.......................................... 0-22
SECTION 1003 Severability............................................ 0-22
SECTION 1004 Amendments, Changes and Modiflcations................... 0-22
SECTION 1005 Net-net-net Lease....................................... 0-22
SECTION 1006 Further Assurances and Correctlve Instruments........... 0-22
SECTION 1007 Execution in Counterparts............................... 0-22
SECTION 1008 Applicable Law.......................................... 0-22
SECTION 1009 Corporation and Lessee Representatives.................. 0-22
SECTION 1010 Captions................................................ 0-23
(ili)
.
.
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ARTICLE I
DEF INITIONS
Definitions. Unless the context otherwise requires, capitalized terms
used herein shall have the meanings ascribed to them in Exhlb1t A to the
Lease Agreement.
Exhibit D
Page 1
ARTICLE I I
.
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 validly existing Polit1cal
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 transact lons 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 in
accordance with the laws of the State of California.
.
(c) Neither the executlon 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 consummat10n of the transactions
contemplated hereby or thereby, confl1cts w1th or results in a breach of the
terms, conditions or provis10ns of any restriction or any agreement or
instrument to which the Lessee is now a party or by Wh1Ch the Lessee lS
bound, or constltutes a default under either of the foregoing, or results in
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 Warrantles of the
Corporat i on. The Corporation represents, covenants and warrants to the
Lessee as follows:
.
(a) The Corporation is a nonprofit publlC benefit corporation duly
organlzed. existing and in good standing under and by virtue of the laws of
the State of Californla; has power to enter into the Lease Agreement and the
Trust Agreement; is possessed of full power to own and hold real and
personal property and to lease and sell the same; and has duly author1zed
the execution and de]lvery of all of the aforesaid Agreements.
(b) The Corporat10n will not pledge the Lease Payments or other
amounts derived from the Project and from its other rights under the Lease
Agreement, 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 fulfll1ment of or compliance with the terms and
conditions hereof or thereof, nor the consummation of the transactlons
contemplated hereby or thereby, conflicts with or results in a breach of the
terms, condit10ns or provisions of any restriction or any agreement or
instrument to which the Corporation is now a party or by which the
Corporation is bound, or constitutes a default under either of the
foregoing, or results in the creation or imposition of any lien, charge or
Exhibit 0
Page 2
encumbrance whatsoever upon any of the property or assets of the
~ Corporation, 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 Agreement, its rlght to
receive Lease Payments from the Lessee, or its duties and obligations under
the Lease Agreement to any other person, firm or corporatlon so as to impair
or violate the representations, covenants and warranties contained in this
Section 202.
.
~
Exh1blt D
Page 3
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ARTICLE III
DEPOSIT OF MONIES; ACQUISITION OF THE PROJECT
SECTION 301. Deposit of Monies. On the Closing Date, the Corporation
shall cause to be deposited 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 Acquis1tion Account funds which, together with
investment earnlngs thereon, will be sufficient to pay Acquisition Costs.
.
SECTION 302. Acquisition of the Project. The Lessee will, as agent
of the Corporation, enter lnto purchase orders and contracts, and Wll1
supervlse and provide for, or cause to be supervlsed and provided for, as
agent for the Corporation, the complete construction, acqulsition and
installation of the Project. The Lessee agrees that it will cause the work
under said 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 acqulred and installed in accordance with the
speciflcations approved by the Lessee on or prior to the Acquls1tion Date.
The Lessee may change the specif1cations of the Project, 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 change, unless the Lessee deposits in the Lessee's
Acquisition Account an amount sufflcient 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 earnings thereon, the Lessee agrees to
deposit into the Lessee's Acquisition Account an amount of money necessary
to pay such increased Acqulsition Costs, but only from funds arising in the
flscal year in which the Lessee has entered into the Lease Agreement. The
Lessee agrees that upon substantial construction. acquisition and
installation of any discrete portion of the Project, it w1ll take possess10n
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 sell, assign and transfer to the Corporation
all of ltS rights under the contracts with respect to the portlon Of the
Project for which the Lessee has contracted prior to the Clos1ng 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
title to the portion of the Project acquired prior to the Closlng Date,
WhlCh portion of the Project is more particularly described in Exhibit G to
the Lease Agreement.
Upon completion of acquisition and installation of the Project
reasonably satisfactory to the Lessee, but in any event not later than the
Acquisition Date, the Lessee shall deliver to the Trustee a Certificate of
Completlon.
.
If, on the Acquls1tion Date. moneys are remaining on deposit in the
Acquisition Account9 such moneys shall be transferred to the Lessee's Lease
Payment Account and shall be applled, on the next succeeding Due Date, as a
Exhiblt D
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 parties agree that the Lease Agreement shall be deemed to be
effective as to each component of the Project as it is constructed, acquired
or installed, and upon acceptance of a discrete portion of the Project, the
Lessee agrees to deliver to the Trustee a certiflcate of acceptance (a
"Certificate of Acceptance") which Certificate of Acceptance shall indicate
the proportionate amount of the Lessee's Project so accepted and agrees that
a portion of the Lease Payments shown on Exhlbit B to the Lease Agreement
(which Lease Payments include amounts allocable to the Lessee's
proport ionate share of Costs of Issuance and the di scount 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 Acqulsition Costs. Payment to the
Contractors of the cost of constructing, acquiring and installing the
Project shall be made from the monies deposited in the Lessee's Acquisition
Account as provided ln 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 Condltions.
Exhlblt 0
Page 5
.
ARTICLE IV
AGREEMENT TO LEASE; TERMINATION OF
LEASE AGREEMENT; LEASE PAYMENTS;
TITLE TO THE PROJECT
SECTION 401. Agreement to Lease. The lease of the Project by the
Corporation to the Lessee is made expressly subject to the terms and
conditions set forth hereln.
SECTION 402. Termination 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 is taken in whole pursuant to the power of eminent
domain and termlnation of the Lease Agreement pursuant to Section 509 of the
Lease Terms and Conditions; or
.
Upon occurrence of an event which will result in termination of the
Lease Agreement, the Trustee will not make any further disbursements from
the Lesseets Acquisition Account and all amounts at the time 1n such
Acquisition Account will be transferred, as provided in the Trust Agreement,
to the Lessee's Lease Payment Account to be credi ted against the Lessee I s
Lease Payment obligations or to the Lessee's Redemption Account to be
applied to redemption of the Certificates.
SECTION 403. Lease Payments. The Lessee agrees to pay to the
Corporation or its successors and assigns, as rental for the use and
possess i on of the Project, the Lease Payments on the Due Dates in the
amounts specifled in Exhlbit B to the Lease Agreement, provlded that the
Lessee shall receive a credit for any amounts on hand ;n 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 Lessee's
Reserve Account are equal to a 11 Lease Payments rema 1 ni ng unpa i d, such
monies shall be applied by the Trustee, 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 requ1'l"'ed to make any further Lease Payments
under the Lease Agreement. A Lease Payment payable on a Due Date is in
consideration far 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 sa1d rental perlod and shall
be paid by the Lessee in each rental period far and in cons1derat1on of the
right of the use and possession of, and the continued quiet use and
enjoyment of, the Project during each such period for which said rental ;s
to be paid. The parties hereto have agreed and determined that such total
Exhi b1t 0
Page 6
.
rental represents the fair rental value of the Project. In making such
determinat1on, consideration has been given to the costs of acquisition~
constructlon, delivery, lnstallation and flnancing of the Project, other
obligations of the parties under the Lease Agreement, the uses and purposes
whi ch may be served by the Project and the benefits therefrom whi ch 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 accru1ng under the
Lease Agreement which shall not be paid when due shall bear interest at the
rate of ten percent (10%) 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 duties imposed
by law, and it shall be the duty of each and every public officlal 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 officials 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
Trustee, no later than 20 days following adoption 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 period.
To the extent that monles are available in the Lessee's 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 acquired the Project.
SECTION 404. Possession and Enjoyment. During the Term of the
Agreement, the Corporation shall provide the Lessee with QUiet use and
enjoyment of the Project, and the Lessee shall, during such Term, peaceably
and quietly have and hold and enjoy the Project, without suit, trouble or
hindrance from the Corporation, except as expressly set forth in the Lease
Agreement. The Corporation wi 11, at the request of the Lessee and at the
Lessee's cost, join in any legal actlon in which the Lessee asserts its
right to such possession and enjoyment to the extent the Corporation may
lawfully do so. Notwithstanding the foregoing, the Corporation shall have
the 'I"'lght to inspect the Project as provided in Section 603 of the Lease
Terms and Condltions.
.
SECTION 405. Title to the Project. During the Term of the Agreement,
title to the Project and any and all addit10ns, replacements or
modificatlons 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 damaging the ProJect.
The Lessee shall not have any r1ght, title or interest ln the Project or in
Exhibit D
Page 7
.
.
.
any additions, repairs, replacements or modifications thereto except as
expressly provlded in the Lease Agreement.
I f the Lessee has paid all Lease Payments duri ng the Term of the
Agreement, or upon deposit of the security deposit as provided in Sectlon
406 of the Lease Terms and Conditions, all right, 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 liens. The Corporation
agrees to defend and eliminate any clalms adverse to the title to the
ProJect, and to save and hold the Lessee harmless therefrom; provided, that
the Corporation's obligations under this sentence shall not extend to claims
arising out of actlons by the Lessee or persons asserting claims under it;
provided that the Lessee shall reimburse the Corporation for any costs
lncurred by the Corporation ln defending or elim1nating such clalms,
1ncluding reasonable attorneys I fees.
SECTION 406. Security Deposit. Notwithstanding any other provision
of the Lease Agreement, the Lessee may, on any date, secure the payment of
Lease Payments by a deposit with the Trustee of: (i) an amount Wh1 ch,
together with amounts on deposit 1n the Lessee's Lease Payment Account and
the Lessee's Reserve Account, lS sufficient to pay all unpaid Lease
Payments, including the principal and interest components thereof, in
accordance with the lease Payment schedu 1 e set forth in Exh i b it B to the
Lease Agreement, or (il) Federal Securities, valued in accordance with
Section 308 of the Trust Terms and Conditions, together with cash, if
required, in such amount as wlll, ln the opinion of an independent certified
pUblic accountant, together with interest to accrue thereon and, if
required, all or a portion of monies or Permitted Investments of such type
then on deposit in the lessee's lease Payment Account and lessee1s Reserve
Account, be fully sufficient to pay all unpaid Lease Payments on thelr Due
Date. In the event of a deposit pursuant to this Section, all obl1gations
of the Lessee under the lease Agreement, and all security provided by the
Lease Agreement for said obligations. shall cease and terminate, excepting
on 1 y the ob 1 i gat i on 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
automatically and without further action by the Lessee or the Corporat10n,
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
specl a 1 fund for the payment of Lease Payments in accordance with the
provisions of the Lease Agreement.
SECTION 407. Abatement of Rental in the Event of Failure to Have Use
and Possesslon of the ProJect. The Lease Payments shall be abated in whole
or 1n part during any perlod during which by reason of damage or destructlon
(other than by eminent domain WhlCh is provided for in Section 5.9 of the
Lease Terms and Conditions) there is substantial interference with the use
and possess i on of the ProJect by the Lessee. If damage or destruct 1 on
results in a redemption of a portion of Certlflcates representing interests
Exhiblt D
Page 8
.
.
.
in the Lessee's Lease Payment, the extent of such abatement shall be agreed
upon by the Lessee and the Trustee, as assignee of the Corporation, such
that the resultlng Lease Payments represent fair consideration for the use
and possess i on of the portions of the Project not damaged or destroyed;
provided, however, that in the event such damage or destructlon results ln
redemption of Certificates, the resulting Lease Payments will be sufficient
to pay all of that portion of principal and interest on the remainlng
Outstanding Certificates which represent interests in the Lessee's Lease
Payments, Such abatement shall not result so long as moneys in the Lessee1s
Lease Payment Account and the Lessee I s Reserve Account and Net Proceeds of
insurance and rental interruption insurance are sufficient 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 commenclng
with such damage or destruction and ending with the substantial completion
of the work of repair or reconstruct ion, if any. In the event of any such
damage or destruction, this Agreement shall continue in full force and
effect and the Lessee waives any right to terminate this Agreement by virtue
of any such damage and destruction.
There shall be no abatement of Lease Payments to the extent that
moneys deri ved from any person as a resu 1 t of any defect or de lay in the
acquisition or construction of the Lessee's Project are available therefor.
The amount of Lease Payments shall also be abated to the extent, if
any, requ i red by operat i on of 1 aw resu 1 t i ng from the Lessee I s fail ure to
have use and possession of the Project,
Exhib1t 0
Page 9
.
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
SECTION 501. Maintenance and Taxes. Throughout the Term of the
Agreement, as part of the consideration for the rental of the Project, all
improvement, repa 1r and maintenance of the ProJect sha 11 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 maintain the Project in good working
order and shall comply with manufacturer or vendor requirements with respect
to proper maintenance of the Project, if any. In exchange for the Lease
Payments herein provided, the Corporation agrees to prov1de 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 Corporation or affecting 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
levied by any governmental agency or district having power to levy taxes or
assessments); provided, that w1th respect to governmental charges that may
lawfully be paid in installments over a period of years, the Lessee shall be
obligated to pay only such installments as are required to be pald during
the Term of the Agreement as and when the same shall become due.
The Lessee, at the Lessee1s expense and in its name, may in good faith
contest and diligently pursue to conclusion any such taxes and other charges
and, 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 Corporation shall notify the Lessee that, in the
op1nlon of Independent Counsel, by nonpayment of any such items, the
interest of the Corporat10n in the Project will be materially endangered or
the ProJect or any part thereof will be subject to loss or forfeiture, in
WhlCh event the Lessee shall promptly pay such taxes or charges or provide
the Corporation wlth full security against any loss which 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 and
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 author1zed under the provisions of state and
federal law; and the Project, upon completion of any addltions and
modificatlons made pursuant to this Section, shall be of a value which 1S
equal to or greater than the value of the Project immediately prior to the
making of such additions or modifications. The Lessee shall make no
modiflcatlons to the Project that jeapordize any warranties relating
thereto. The Lessee wl11 not permlt any mechanic1s or other lien to be
Exhi bit 0
Page 10
.
.
.
established or remaln against the Project for labor or materials furnlshed
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 llen filed or
estab 1 i shed against the PrOJect and in such event may perml t 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, provide the Corporation with full security against any loss or
forfeiture which might arise from the nonpayment of any such item, 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. Pub 11 c L i abil ity and Property Damage Insurance. The
Lessee shall maintain or cause to be maintained, 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 1S not provided by the
Contractors), a standard comprehensive general insurance policy or policies
in protection of the Trustee, the Corporation and the Lessee and their
members, officers, agents and employees. Said policy or policies shall
prov1de for indemnification of said parties against direct or contingent
loss or 1 i ab il ity for damages for bod il y and personal injury, death or
property damage occasioned by reason of the acqu1sition or operation of the
Project. Said policy or policies shall provide coverage in the mlnimum
liability limits of $1,000,000 for personal inJury or death of each person
and $3,000,000 for personal injury or deaths of two or more persons in each
accident or event, and in a minimum amount of $100,000 (subJect to a
deductible clause of not to exceed $5,000) 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 $3,000,000 covering all such risks. Such liability insurance may
be maintained as part of or in conJunction with any other liablllty
insurance coverage carried or requlred to be carried by the Lessee and, with
the approval of the Insurer, may be maintained in the form of self-
insurance. Such self-1nsurance, if approved, must provide for amounts to be
segregated in a special insurance reserve meeting the requlrements of thlS
Section, must be restricted speclfically to the Project and must consist of
Permitted Investments.
SECTION 504. Fire and Extended Coverage Insurance.
(a) The Lessee shall procure, or cause to be procured, 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 is not
provided by the Contractors), lnsurance against loss or damage to any part
of the ProJect by fire and lightning, with extended coverage and vandallsm
and mallcious mlschief insurance. Said extended coverage insurance shall,
as nearly as practicable, cover loss or damage by explosion, windstorm,
riot, aircraft, vehicle damage, smoke, sprinkler damage, boiler explOSlon,
theft and such other hazards as are normally covered by such insurance.
Such 1nsurance shall be in an amount equal to 100% of the replacement cost
of the ProJect or the princlpal amount of the Certificates then Outstandlng
relating to the Project, whichever 1S greater. Such insurance may be
Exh1bit D
Page 11
.
.
.
ma i nta i ned as part of or in conjunction wi th any other fi re and extended
coverage insurance carried or requ1red 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 approved, must provide for amounts to be
segregated in a special lnsurance reserve meeting the requirements of this
Section, must be restricted speclflcally to the Project and must consist of
Permitted Investments.
The Lessee shall also procure, or cause to be procured, and maintained
throughout the Term of the Agreement, un 1 es s the I nsurer agrees to wa we
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, wh1chever is greater.
SECTION 505. Renta 1 Interrupt i on Insurance. The Les see shall
procure, and maintain throughout the Term of the Agreement, rental
lnterruption 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 1 ieu of obtaimng
insurance coverage as required by this Section 505, such 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 special insurance reserve meeting the
requirements of this Section 505, restricted speciflcally 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 far deposit in the Lessee's
Lease Payment Account, and shall be credited towards the payment of the
Lease Payments 1 n the order in Whl ch such Lease Payments come due and
payable.
SECTION 506. Insurance Net Proceeds; Form of Pollcies. The polic1es
of 1nsurance required by Section 503 and 504 of the Lease Terms and
Conditlons shall provide that all proceeds thereunder shall be payable to
the Trustee pursuant to a lender's loss payable endorsement substantially ln
accordance with the form approved by the Insurance Services Office and the
California Bankers Associatlon. The Net Proceeds of such insurance shall be
pald 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 obtai ni ng insurance coverage as requ i red by
Sectlon 504 of the lease Terms and Conditions, such coverage may be
ma1ntained 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 speci a 1 insurance reserve meeting the requ irements
of Section 504 and restricted specifically to the Project, or (ii) an
Insurance Consultant certifies to the Trustee and the Corporation that the
Lessee I s general insurance reserves are adequate to prov; de the necessary
coverage. A 11 po 1 i c i es of insurance requ i red by the Lease Agreement, and
any statements of self-insurance, shall be delivered to the Trustee and the
Insurer and shall be in form satlsfactory to the Trustee and the Insurer.
Exhiblt 0
Page ~2
.
.
.
The Lessee shall payor cause to be paid when due the premiums for all
insurance policies required by the Lease Agreement, and shall promptly
furnish or cause to be furnished evidence of such payments to the Trustee
and the Insurer. All such policies shall provide that the Trustee shall be
given thirty (30) days I notlce of each expiration, any intended cancellation
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
ltS obligations under this Article, the Corporation may, but shall not be
obligated to, take such action as may be necessary to cure such fallure,
i ncludi ng the advancement of money to the Lessee, and the Lessee shall be
obllgated to repay all such advances as soon as posslble. with interest at
the rate of 10% per annum from the date of the advance to the date of
repayment, 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
Lessee shall promptly, at its own expense, take such action as may be
necessary to du ly di scharge or remove any such mortgage, pledge I 1 i en,
charge, encumbrance or claim for which it is responsible, if the same shall
arise at any time. The Lessee shall reimburse the Corporation for any
expense incurred by it in order to discharge or remove any such pledge,
lien, charge, encumbrance or cla1rn.
SECTION 509. Eminent Domain. If all or part of the Project is taken
under the power of eminent domaln, the Net Proceeds from any award resulting
therefrom shall be deposited with the Trustee pursuant to Sectlon 5.10(b) of
the Lease Terms and Conditions and the Lessee Representative shall file a
certificate with the Trustee as provided in Section 305 of the Trust Terms
and Cand i t ions. If the Project is taken in who 1 e pursu ant to su ch eml nent
domaln proceedings or is taken in part to such extent that the remaining
portion of the Project is no longer useful for the purposes originally
intended, the remaining Lease Payment obligations of the Lessee will be
abated ln full and this Agreement shall thereupon be terminated. Otherwise.
(1) this Agreement shall continue in full force and effect and shall not be
terminated by virtue of such taking and the parties waive the benefit of any
law to the contrary, 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
remalning Certificates which represent interests in the Lessee's Lease
Payments.
Exhi bit D
Page 13
.
.
.
SECTION 510. Application of ~et Proceeds.
(a) From Insurance Award. The Net Proceeds of any ; nsurance award
resulting from any damage to or destruction of the Project by fire or other
casu a 1 ty s ha 11 be depos i ted in the I nsurance and Condemn at i on Fu nd 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 certificate 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 Condit ions shall be deposi ted 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.
SECT! ON 511. Ti t 1 e Insurance. I f the Les see's Project i nc 1 udes a
real property component, the Lessee shall, on the Closing Date, deliver to
the Trustee a title insurance policy insuring the Lessee's fee title estate
in the site relating to the Project, if any, and the Corporation's leasehold
estate in the s1te relating to the ProJect and the Project in an amount
equal to the total prlncipal amount of Lease Payments due hereunder.
SECTION 512. Agreement to Pay Trustee's Fees. The Lessee agrees to
pay to the Corporat i on 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 Agreement, such share to be calculated according to
the same proportion as the Principal Amount bears to the total principal
amount of the Certiflcates of Participation. The Lessee shall not be
obligated to pay any portion of the fees or expenses of the Trustee readlly
attributable to another Lessee.
Exhibit 0
Page 14
.
.
.
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
SECTION 601. Disclaimer of Warranties. THE CORPORATION MAKES NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, 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, FURNISHING,
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 warrantles 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 in the enforcement of such warranty, including reasonable
attorneys! fees.
SECTION 603. Corporatlon and Insurer Access to the Project. The
Lessee agrees that the Corporat ion, the Insurer, any Corpora t i on
Representative and the Corporatlon1s successors or assigns, shall have the
r1 ght at a 11 reasonab 1 e times to exami ne and inspect the Project. The
Lessee further agrees that the Insurer, Corporation, any authorlzed
representatlve or elther, and the Corporation1s successors or assigns 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.
Exhibit 0
Page 15
.
ARTICLE VII
ASSIGNMENT, SUBLEASING AND INDEMNIFICATION
SECTION 701. Assignment by Corporation. The Corporation I s rights
under the Lease Agreement, including, but not limited to, the right to
receive and enforce payment of the Lease Payments to be made by the Lessee
under the lease Agreement and tit1e to the Project, have been assigned to
the Trustee pursuant to the Trust Agreement.
SECTION 702. Ass i gnment and Sub 1 eas i ng by the Lessee. The Lease
Agreement may be assigned or subleased by the Lessee upon the prior approval
of the Insurer, provided, that any sublease or assignment shall be SUbject
to all of the following conditions:
(i) The Lease Agreement and the ob 1 i gat i on 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 obllgations of
the Lessee under the Lease Agreement to the extent of the interest
subleased or assigned; and
.
(ili) The Lessee shall, withln 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 asslgnment; 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
Constltution and laws of the State of California; and
(v) The lessee sha" have de 1 i vered to the Trustee and the
Insurer an opinion of nationally recognized bond counsel to the effect
that such sublease or assignment shall not cause the interest
component of the Lease Payments due witl1 respect to tl1e 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 claims, losses and damages, including legal fees and expenses,
arlsing out of (i) the use, maintenance, condition or management of, or from
any work or thing done on the Project by the lessee, (i i) any breach or
default on the part of the Lessee in the performance of any of its
obligatlons under the Lease Agreement, (iii) any act or negligence of the
Lessee or of any of its agents, contractors, servants, employees or
llcensees with respect to the Project, (iv) any act or negl igence of any
assignee or sublessee of the lessee, or of any agents, contractors,
servants, employees or licensees of any assignee or sublessee of the Lessee
with respect to the Project, or (v) the delivery, installation and
aCQuisltlon of the Project or the authorization of payment of the
Acquisition Costs by the Lessee. No indemnification is made by the Lessee
Exhiblt D
Page 16
.
.
.
under this Section or elsewhere in the Lease Agreement for willful
misconduct, negligence, or breach of duty under this Lease by the
Corporatlon, its officers, agents, employees, successors or assigns.
Exhlblt 0
Page 17
.
ARTICLE VII I
EVENTS OF DEFAULT AND REMEDIES
SECTION 801. Events of Default Oeflned. The following shall be
Itevents of default II under the Lease Agreement and the terms Ilevents of
defaultll and lIdefault" shall mean, whenever they are used in the Lease
Agreement, wi th respect to the Project, anyone or more of the fo II owi ng
events:
.
(i) Fa i 1 ure 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 Section, for a penod of
thirty (30) days after written notice specifying such failure and
requesting that it be remedied has been given to the Lessee by the
Corporation, the Insurer, the Trustee, or the Owners of not less than
twenty-five percent (25%) in aggregate principal amount of
Certificates then outstanding; provided, however, if the failure
stated in the notice cannot be corrected within the appllcable perlod,
the Corporation, the Trustee, the Insurer and such Owners wl11 not
unreasonably withhold their consent to an extension of such time if
correct i ve act i on is i nst ituted by the Lessee with i n the app 1 i cab 1 e
period and diligently pursued until the default is corrected.
(iii) The filing by the Lessee of a voluntary petition in
bankruptcy, or failure by the Lessee promptly to 1 i ft any execut 1 on,
garnishment or attachment, or the filing of an involuntary petition in
bankruptcy against the Lessee which petition shall not have been
withdrawn within sixty (60) days, or assignment by the Lessee for the
benefit of credltors, or the entry by the Lessee into an agreement of
composition with creditors, or the approval by a court of competent
jurisdiction of a petition applicable to the Lessee in any proceedings
instituted under the provisions of the federal bankruptcy law, or
under any similar acts which may hereafter be enacted.
SECTION 802. Remedies on Default. Upon the occurrence and
contlnuance of any event of default specified in Section 801(i) or 801(iii)
of the Lease Terms and Conditions, the Trustee, as asslgnee of the
Corporation, shall proceed at the direction of the Insurer, or upon the
occurrence of an event of default specified in Section 801 (ii)of the Lease
Terms and Conditions at the directlon of the Insurer, may proceed, and upon
written request of the Insurer and the Owners of not less than a majority in
aggregate princlpal amount of Certlficates then Outstanding shall proceed,
to:
.
(i) Protect and enforce the Lease Agreement by such judicial
proceeding as the Corporation or its assignee shall deem most
effectual, either by suit in equity or by action at law, whether for
the speclfic performance of any covenant or agreement contalned in the
Exhibit 0
Page 18
.
Lease Agreement, or ln aid of the exercise of any power granted in the
Lease Agreement, or to enforce any other 1 ega 1 or equ i tab 1 e ri ght
vested in the Corporation 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 is cured, holding the Lessee liable for the
Lease Payments and other amounts payable by the Lessee prior to such
taklng of the Project under and pursuant to the Lease Agreement and
the curing of such default; or
(iii) If the Project consists of real property, to relet 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
sell 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 desirable to enforce the Corporation I s 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 Remedy Exclusive. No remedy herein conferred upon or
reserved to the Corporation is intended to be excluswe and every such
remedy shall be cumulative and shall be in additlon to every other remedy
given under the Lease Agreement or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power accrulng upon
any default shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right and power may be exerclsed from time to
time and as often as may be deemed expedient. In order to entitle the
Corporation to exercise any remedy reserved to it in this Article, it shall
not be necessary to give any notice, other than such notice as may be
required in this Article or by law.
SECTION 804. Agreement to Pay Attorneys I Fees and Expenses. In the
event either party to the Lease Agreement should default under any of the
provisions thereof and the nondefaulting party should employ attorneys or
incur other expenses for the collection of monies 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 nondef au 1 t i n9 party the reasonab 1 e fees of
such attorneys and such other expenses so incurred by the nondefau It i ng
party.
.
SECTION 805. No Additional Waiver Implied by One Waiver. In the
event any covenant contained in the Lease Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive
any other breach under the Lease Agreement.
Exhibit D
Page 1.9
.
ARTICLE IX
OPTION TO PURCHASE; OPTION TO PREPAY
SECTION 901. ~urchase Option. If the Termination Date of the Lease
Agreement is on or after Oecember 1, 1996, the Lessee shall have the option
to purchase the Project on or after December 1, 1995, but on1y if it is not
then in default under Section 80l(i) or (iii) of the Lease Terms and
Conditions, and only in the manner provided in 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 Conditions), plus
accrued interest on such principal portion to the applicable June 1 or
December 1 set for redemption of the Certificates. Such purchase price
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 exerc 1 se, and shall depos i t wi th the
Trustee on the date which is three business days or more prior to said June
lor Oecember 1, an amount equal to the unpaid pr1ncipal amount of Lease
Payments, plus premium, if any, plus accrued interest on such pnnclpal
portion of Lease Payments to such June 1 or December 1. If the Lessee
exercises its option to purchase the Project pursuant to this Section, any
amount then on hand in the Lessee1 s Reserve Account, 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 I s account in the Insurance and Condemnat i on Fund
shall be applied towards the payment of the applicable purchase price to be
paid by the Lessee. If the Lessee shall have glven notice to the Trustee of
its intention to purchase the Project, but shall not have deposited the
purchase price wlth 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 ln part (but not in an amount of less than $20,000)
the principal component of Lease Payments relating to Certificates maturing
ln the years identlfied below, on the following dates and in the following
amounts, together with the premiums set forth below (expressed as a
percentage of the prlncipal amount prepaid):
.
Exhibit D
Page 20
Prepayment Option Date Prepayment Premium
. December It 1995 and June 1, 1996.. .. . . . . 2 %
December It 1996 and June 1, 1997. . . . . . . . 1-1/2
December 1, 1997 and June 1, 1998. . . . . . . .. 1
December It 1998 and June 1, 1999 ....... 1/2
December 1, 1999 and each June 1
and December 1 thereafter............... 0
The Lessee shall gi ve the Authority and the Trustee not ice 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 or prlor to three
business days prior to said June 1 or December I, an amount equal to the
principal component of Lease Payments being prepaid, plus the applicable
premium plus accrued interest to the date of redemptlon.
In the event of the Lessee1s 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.
.
.
Exhlb1t D
Page 21
.
.
.
ARTICLE X
MISCELLANEOUS
SECTION 1001. Not ices. A 11 not ices, cert ifi cates or other
communlcations hereunder shall be sufficiently given and shall be deemed to
have been received 48 hours after deposit ln the United States mai 1 in
registered or certified form with postage fully prepaid when sent to the
addresses shown on Exhibit E to the Lease Agreement.
The Trustee, the Insurer, the Corporation 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 inure to the
benefit of and shall be binding 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 invalidate or render unenforceable any
other provision thereof.
SECTION 1004. Amendments, Changes and Modiflcatlons. The Lease
Agreement may be amended or any of its terms modifled with the written
consent of the Lessee and the Corporation; provlded, 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 ~net-net-net lease~ and the Lessee hereby agrees that
the Lease Payments shall be an absolute net return to the Corporation, 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 will, from time to tlme, execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, 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. Execution ln Counterparts. The Lease Agreement may be
executed in several counterparts, each of which shall be an orlginal and all
of which shall constitute but one and the same instrument.
SECTION 1008. Applicable Law. The Lease Agreement shall be governed
by and construed ln accordance wlth the laws of the State of Californla.
SECTION 10.9. Corporation and Lessee Representatives. Whenever under
the provlsions of the Lease Agreement the approval of the Corporation or the
Lessee is requ1red, or the Corporation or the Lessee is required to take
some actlon at the request of the other, such approval or such request shall
be given for the Corporat i on by a Corporat i on Representat i ve and for the
Exhibit 0
Page 22
.
.
.
Lessee by a Lessee Representatlve, 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 are for convenience only and ln no way defines limit or describe
the scope or intent of any provisions or Section of the Lease Agreement.
Exhiblt 0
Page 23
.
M
N
III
:J
~
III
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0
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C
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0 ....
....
....
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C ";:] "- ..J Ci. 0- L
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U ";:] '-' .. 0 <[ <[
(II c LU ::l III ....l rn
.... LU ~ ~ u... ;:
L III <r .... ....
III 31 11 ... (\j (\j Ul
.... C .... C Co. ...... 0 ~
C I';l 0 U .... ....
.... ..J a ..l- x .... ...
.
.
EXHIBIT E
AODRESSES FOR NOTICE PURPOSES
If to the Corporation:
If to the Lessee:
If to Trustee:
If to the Insurer:
.
.
California Cities Financing Corporation
1400 K Street, Suite 400
Sacramento, Californla 95814
Attn: Secretary
City of Santa Monica
1685 Main Street
Santa Monica, California 90401
Attn: Dlrector of Flnance
First Interstate Bank of California
707 Wilshire Boulevard
Los Angeles, Californla 90017
Attn: Corporate Trust Dept. (WIO-2)
USF&G Flnancial Security Company
601 Montgomery Street
San Francisco, California 94111
Attn: General Counsel
Exhibit 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
.
.
..
13050-5
JHHW:BDQ:rms 11/19/85
12/17 /85
12/22/85
12/24/85
Z1636
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Jones Hall Hill & Whlte,
A Professional Law Corporation
Four Embarcadero Center, Suite 1950
San Francisco, California 94111
Attention: Brian D. QUlnt, Esq.
LEASE AGREEMENT
Dated as of December 1, 1985
by and between
CALIFORNIA CITIES FINANCING CORPORATION
and the
CITY OF THOUSAND OAKS, CALIFORNIA
CALIFORNIA CITIES FINANCING CORPORATION
POOLED FINANCING, 1985 SERIES E
TABLE OF CONTENTS
~ Page
~
~
SECTION 1.1 Defin'tions............................................. 2
SECT I ON 1. 2 Ex h; bit s . .. .. .. .. . .. . . .. If .. .. .. .. .. .. .. .. .. oil .. ... .. ... . .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . .. .. . 2
SECTION 1.3 Agreement to Lease...................................... 2
SECTION 1.4 Lease Payments..................................6....... 2
SECTION 1.5 Notices................................................. 2
SECTION 1.6 Terms and Conditions.................................... 2
Exhiblt A - Definltions
Exhlblt B - Schedule of Lease Payments
Exhiblt C - Description of Project
Exhlbit D - Lease Terms and Conditions
Artlcle I - Deflnitions
Artlcle II - Representations, Covenants and
Warrantles
Artlcle III - Deposit of Monies; Acquisltion of
the Project
Artlcle IV - Agreement to Lease; Termination of
Lease Agreement; Lease Payments; Title to the
ProJect
Article V - Malntenance; Taxes; Insurance; and
Other Matters
Artlcle VI - Disclaimer of Warrantles; Access
Article VII - Assignment, Subleasing and
I ndemn if i cat 1 on
Article VIII - Events of Default and Remedies
Article IX - Miscellaneous
Exhiblt E - Addresses for Notice Purposes
Exhibit F - Contracts Assigned to Corporation
Exhlblt G - Descrlption of Previously Acquired Portion of Project
( i )
.
.
.
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 eXlstlng under the laws of the State of
California, as lessor (the "Corporat10n"), and the CITY OF THOUSAND OAKS, a
Political Subdivision, duly organized and existing under the laws of the
State of Cal1forma (the "Lessee");
WIT N E SSE T H:
WHEREAS, the Lessee wishes to acqulre that certain property described
in Exhibit C hereto (the "Project") and the Less.ee is authonzed pursuant to
the laws of the State of Callfornla to enter lnto leasehold agreements for
such purposes; and
WHEREAS, the Governing Body of the Lessee has determined that, In
order to accompllsh such purposes, It is necessary and desirable to acquire
the Project by leasing the same pursuant to this Lease Agreement; and
WHEREAS, the Corporation will cause to be deposlted with the Trustee
funds for the acquisltion of the Project to be leased pursuant to this Lease
Agreement;
NOW, THEREFORE, in consideratlon 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 1.1. DefiOltions. Unless the context otherwise requ1res,
capitalized terms used hereln and in the lease Terms and Conditions, have
the meanings specifled in Exhib1t A. All terms not deflned herein shall
have the meanings ascribed to them in the Trust Agreement.
SECTION 1.2. Exhibits. The following Exh1blts are attached to, and
by reference made a part of, thlS Agreement;
Exhibit A: Definltions.
Exhibit B: SChedule of Lease Payments to be pald by the Lessee to the
Trustee, as assignee of the Corporatlon, showing the Due Date and amount of
each Lease Payment.
Exhibit C: Description of the Project.
Exhibit 0: Lease Terms and Cond1tions.
Exhibit E: Addresses for Notices.
Exhibit F: Contracts Assigned to Corporatlon.
Exhibit G: Description of Previously Acquired Portion of Project.
SECTION 1.3. 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 Lease 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 Exhiblt B.
SECTION 1. 5. Term of Agreement. The Term of thi 5 Lease Agreement
shall commence as of the Dated Date and shall end on the Termination Date,
unless on such date any Certlficates of Partlcipation remain outstanding, in
which case this Lease Agreement shall remain in full force and effect whlle
any Certificates of Participation are outstanding or unless terminated prior
thereto 1n accordance w1th Section 402 of the Lease Terms and Condltions.
SECTION 1.6. Terms and Condltions. The parties hereto agree that
this Lease Agreement is expressly subject to the pro'/lsions of the lease
Terms and Conditlons attached hereto as Exhibit 0, the provislons of WhlCh
are hereln 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 this 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:
Pc~/I~lff.,~
Se~!"'~tary
By: fJff~J IZ,J~/
(- pre(7t L
CITY OF THOUSAND OAKS
(5 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 thi 5 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:
By:
Secretary
President
CITY OF THOUSAND OAKS
(5 E A L)
At~st :
[!J11.:iV!i1LoIu-L)
~~ty C1erk
By: flIu.~
-"-",,, Ma.yor
-3-
.
.
.
STATE OF CALIFORNIA
}
) 55.
}
COUNTY OF Ve n-/11r a
On thIS ~fc-th day of J>e.CPll'Ihet , 1n the year 1985, before me, the
underslgned, a notary pubhc, personally appeared OORILL B. WRIGHT, personally
known to me (or proved to me on the basis of satlsfactory eVldence) to be the
person who executed the wIthln Instrument as PresIdent of the corporatlon
thereln naned and acknowledged to me that such corporation executed the wlthln
Instrument pursuant to lts bylaws or a resolutIon of lts board of dlrectors.
WITNESS my hand and offlClal seal.
~ ~ OFFICIAL SEAL
{t T'~-" \ .~.-;--: f.... ~JAS;...j ~,
~': ~~~: ~'1 NOTA~'; ;u[,L C - CA;.FORNi';" I
~ "\cL:/ H; c:..:~. ': ~ \;~'-'F(~l._ :::;~ ;~
J..-, ------..:~ :~...........---- -----.---.....-.~--.......--.~
~ a Ylo.aL
Notar~ PubliC 10 and for sald County
and State
Typed Name:
JUDIIH A NAStl
5/11/f'i
My commISSIon expIres:
.
.
.
STATE OF CALIFORNIA
COUNTY OF
Sacranento
)
) 55.
)
On th~s 24th day of December I ~n the year 1985, before me, the
unders~gned, a notary publ~cl personally appeared DANIEL B. HARRISON,
personally known to me (or proved to me on the bas~s of sat~sfactory ev~dence)
to be the person who executed the w~th1n 1nstrument as Secretary of the
corporat1on there1n named and acknowledged to me that such corporat1on
executed the wlth1n lnstrument pursuant to ~ts bylaws or a resolutlon of ltS
board of dlrectors.
WITNESS my hand and offlclal seal.
"'-
. OFFICIAL SEAL .
.' LORRAINE OKABE ,r
...,~
MCfIMIEIm) ClDUNTY
~. .. C\aIIIIa ... -.,. 1', _
_ _ _ _ _ _ _ _L _ - _ - - - _ - _ J _
.Xl--tLll~' O-Lti'-f.-
Nota~ ~ubllC ~n and for sald County
and State
Typed Name:
Lorraine Okabe
M Aug. 14, 1989
y commlSSlon exp1res:
.
.
.
STATE OF CALIFORNIA
COUNTY OF Ventura
)
)
)
55.
On th1S 27th day of December , 1n the year 1985, before
me, the underslgned, a notary publ1C, personally appeared ALEX FIORE and
CINDY CHRISTIAN, personally known to me (or proved to me on the basls of
sat1sfacto~y evidence) to be the pe~sons who executed the wlth1n lnst~ument
as Mayor and Deputy Clty Clerk, respect1vely, of the C1ty of Thousand Oaks
and acknowledged to me that the Clty of Thousand Oaks executed It.
WITNESS my hand and affic1al seal.
.
OFFICIAL lEAL
GlO'tA WARE
....... IIdIIc QlIIfll mI&
..... OQUNTY
.., CIMII. .. ... 13, 1989
~~
Nota~y PubllC 1n and for sald County
and State
Typed Name:
Glana ~~are
My commlSSlon expires:
9113/89
.
EXHIBIT A
DEFINITIONS - CITY OF THOUSAND OAKS
II B--cqu is i t i on Costs II means, with respect to the PrOJect9 the contract
prlce paid or to be pald to the Contractors therefor upon acquisltlon,
construction, installatlon or delivery of any portion of the ProJect anc
related equipme~t, if any, in accordance with the purchase order or contract
therefor. Acquisitlon Costs include the costs of slte preparation necessary
for the installation of the ProJect, as well as the admlnistratlve,
englneenng, legal, flnancldl, title lnsurance and other costs lncurred by
the Lessee, the Corporation and the Contractors in connectlon with the
acqulsltlon9 constructlon, dellvery and installatlon by the Corporation of
the Project.
"Acquisition Date" means December 259 1986.
"~usiness Dayfl means any day of the year other than a Saturday, a
Sunday, a day on WhlCh the New York Stock Exchange is closed or any day on
wnlch the Trustee is not open for business.
"Cade" means the Internal Revenue Code of 1954 as amended. Any
citation--to a provislon of the Code shall be deemed to lnclude the
appllcable regulations of the United States Department of the Treasury
promulgated wlth respect to such provislon.
.
"Corporation Representative" means the Presldent of the Corporation or
his designee, or any other person authorized to act on behalf of the
Corporation with respect to the Lease Agreement.
flCertlficate of Completion" means a certificate of the Lessee
Representatwe certifying that all equipment and other personal property
constituting a portion of the Project has been acquired, installed and
accepted by the Lessee9 and that all Acquisition Costs have been paid.
"Certlficates of Participation" or "Certlficates" means the
Certificates of Participation to be executed and dellvered pursuant to the
Trust Agreement and which evidence a right to receive a proportionate share
of Lease Payments and proceeds recelved on account of the Lease Agreements.
"Closlng 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 acquls1tiont
construction and installation of the Project.
.
nCorporatiol"tt means the Cal ifornia Cities Financing Corporation, a
nonprofit publlC benefit corporation dUly organized and existlng under the
laws of the State of Californla.
Exhiblt A
Page 1
.
.
.
"Dated Date" means December 1, 1985.
t1Due Dates" means May 15 and November 15, commencing May 15, 1986.
lIFederal Securitiesll means direct obllgatlons of (lncludlng
obligations issued or held in book entry form on the books of the Departme~t
of the Treasury of the United States), or obligations the principal of and
interest on WhlCh are unconditionally guaranteed by the United States of
Ameri ca.
"Governing Body" means the City Council of the Lessee.
"Independent Counsel" means an attorney duly admltted to the practlce
of law before the hlghest court of the State of Californla and who is not an
employee of the Corporation, the Trustee or the Lessee.
11 Insurance Consu ltant 11 means any person or firm knowl edgab 1 e Wl th
respect to insurance carried by, requlred for and available to Polltlcal
Subdivislons.
IlInsurance and Condemnation Fund" means the fund by that name
established and held by the Trustee pursuant to Section 4.6 of the Trust
Agreement.
" I nsurance Po 1 i cyll or II Po 11 cy" means F 1 nanc 1 a 1 Guaranty Bond No. 99-
0110-00022-86 issued by the Insurer guarantee; ng the payment of pnncl pa 1
and interest when Due for Payment (as deflned in the Policy) with respect to
the Certlficates.
II Insurerll means United States Fidel1ty & Guaranty Company, and its
successors and asslgns.
IILease Agreementlt Dr "Agreement" means this lease Agreement, and any
duly authorlzed and executed amendment hereto.
"Lease Agreementsll means the several Lease Agreements, each dated as
of the Dated Date, between the Corporation and the Cities of Delano,
Fontana, Santa Monica and Thousand Oaks, respectively.
lILease Paymentll means any payment due from the Lessee to the
Corporation under Section 1.4 of the Lease Agreement and Section 403 of the
Lease Terms and Conditions.
IILease Terms and Conditionsll means those certaln Lease Terms and
Conditions attached to the Lease Agreement as Exhibit D.
II Lessee" means the City of Thousand Oak:s~ California, a general law
Clty, duly organlzed and existing under the laws of the State of California.
IILessee Representative" means the Mayor, City Manager or Flnance
Dlrector, or an aSslstant designated by the Governing Body of the Lessee to
act on behalf of the Lessee under or with respect to the Lease Agreement.
Exhiblt A
Page 2
.
.
.
>>Lessee's Acquisltion Account>> means the Acquisition Account
established and held by the Trustee for the Lessee pursuant to Section 2.5
of the Trust Agreement.
>>~essee's Lease Payment Account>> means the Lease Payment Account
established and held by the Trustee for the Lessee pursuant to Sectlon 2.7
of the Trust Agreement.
>>Lessee I S Reserve Account II means the account by that name estab 1 i shed
and held by the Trustee pursuant to Section 2.10 of the Trust Agreement.
>>Net Proceeds>> means any property or casualty insurance proceeds pald
with respect to the Project~ remalning after payment therefrom af all
expenses lncurred in the collection thereof.
"Ownel'"" or lICertiflcate Owner" or t10wner of a Certificate. II or any
similar--rerm, when used wlth respect to the Certificates, means the
registered owner of any Certificate.
t1payment Dates" means June 1 and December 1, commencing June 1, 1986.
>>Permitted Encumbrances" means, as of any particular time: (i) 11ens
for general ad valorem taxes and assessments, if any. not then delinquent~
or whiCh the Lessee may, pursuant to provisions of Article V hereof, permit
to remain unpald; (ii) the Lease Agreement; and (ili) the Trust Agreement.
"Political Subdivisionll means a public agency deemed to be a
upolitical subdivisiontl of the State of Cal1fornia, as that term is used 1n
Section 103 of the Code.
"Principal Amount" means the total unpaid princlpal portlon of the
Lease Payments due under the Lease Agreement.
"project" means that certain equipment to be acquired from the
proceeds of the Certificates deposlted in the Lesseels 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.
lIJerm of the Agreementll or lITermll means the time during which the
Lease Agreement is ln effect, as provlded for in Section 1.5 of the Lease
Agreement.
"Termination Date" means December 1, 2005.
lITrust Agreement" means the Trust Agreement, dated as of the Dated
Date~ by and among the Trustee, the Lessees and the Corporation, and any
duly authorized and executed amendment thereto.
"Trusteetl means First Interstate Bank of California, as trustee,
apPolnted under the terms of the Trust Agreement.
Exhibit A
pas;e 3
EXHIBIT B
.
CITY OF THOUSAND O~KS
SCHEDULE OF LEASE PAYMENTS
P'I"'1ncipal Interest Total
Due Date Component Component Lease Payment
May 15, 1986 $22,037.50 $22,037.50
November 15, 1986 22,037.50 22,037.50
May 15, 1987 22,037.50 22,037.50
November 15, 1987 $15,000 22,037.50 37,037.50
May 15, 1988 21,568.75 21,568.75
November 15, 1988 15,000 21,568.75 36,568.75
May 15, 1989 21,081.25 21,081. 25
November IS, 1989 15,000 21,081.25 36 , 081. 25
May 15, 1990 20,575.00 20,575.00
November 15, 1990 15,000 20,575.00 35,575.00
May 15, 1991 20,050.00 20,050.00
November 15, 1991 15.000 20,050.00 35,050.00
May 15. 1992 19,506.25 19,506.25
November 15, 1992 20,000 19,506.25 39,506.25
May 15, 1993 18,756.25 18,756.25
. November 15. 1993 20.000 18,756.25 38,756.25
May 15, 1994 17,981.25 17,981.25
November IS, 1994 20.000 17,981.25 37,981. 25
May 15, 1995 17,181.25 17 ,181. 25
November 15, 1995 25,000 17,181.25 42,181.25
May 15, 1996 16,156.25 16,156.25
November 15, 1996 25,000 16,156.25 41,156.25
May 15, 1997 15,106.25 15,106.25
November 15, 1997 25,000 15,106.25 40,106.25
May 15, 1998 14,043.75 14,043.75
November 15, 1998 30,000 14,043.75 44,043.75
May 15, 1999 12,753.75 12,753.75
November 15, 1999 30,000 12,753.75 42.753.75
May 15, 2000 11 ,448. 7 5 11,448.75
November 15, 2000 35,000 11 ,448.75 46,448.75
May 15, 2001 9,917.50 9,917.50
November 15, 2001 35,000 9,917.50 44,917.50
May 15, 2002 8,386.25 8.386.25
November 15, 2002 40,000 8,386.25 48,386.25
May 15, 2003 6,626.25 6,626.25
November 15, 2003 45,000 6,626.25 51,626.25
May 15, 2004 4,646.25 4,646.25
November 15, 2004 50,000 4,646.25 54,646.25
May 15, 2005 2,433.75 2,433.75
November 15, 2005 55,000 2,433.75 57,433.75
.
Exhlbit B
Page 1
.
.
.
EXHIBIT C
DESCRIPTION OF PROJECT
Construction of a new Community Informatlon Center and leased to the
ConeJo Valley Chamber of Commerce. The project will commence on May 1,
1986 and is scheduled for completion on January 1, 1987. The cost of the
project is estimated at $400,000.
Exhlbit C
Page 1
.
.
.
13050-5
Z1638
JHHW:8DQ:rms 11/19/85
12/22/85
12/27/85
EXHIBIT 0
LEASE TERMS AND CONDITIONS
.
.
.
EXHIBIT D
TABLE OF CONTENTS
Page
ARTICLE I
DE FI N IT IONS
Oef; n 1 t ion s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. D - 1
ARTICLE I I
REPRESENTATIONS, COVENANTS AND WARRANTIES
SECTION 201 Representations, Covenants and Warranties
of the Lessee.........6................................ 0-2
SECTION 202 Representations, Covenants and Warranties
of the Corporation..................................... 0-2
SECTION 301
SECTION 302
SECTION 303
SECTION 401
SECTION 402
SECTION 403
SECTION 404
SECTION 405
SECTION 406
SECTION 407
ARTICLE II I
DEPOSIT OF MONIES; ACQUISITION
OF THE PROJECT
Deposit of Monies....................................... D-4
Acquisition of the Project.............................. D-4
Payment of Acquisition Costs............................ 0-5
ARTICLE IV
AGREEMENT TO LEASE; TERMINATION OF
THE LEASE AGREEMENT; LEASE PAYMENTS;
TITLE TO THE PROJECT
Agreement to Lease.......6.............................. 0-6
Termination of the Lease Agreement...................... 0-6
Le a 5 e P ayme n t s . . . . . . .. . ... . ... .. oil ... .. . . . .. , . .. .. .. .. .. .. .. .. ... .. ... .. .. .. .. .. . .. .. .... 0 - 6
Possession and EnJoyment................................ 0-7
Title to the ProJect.....4.............................. 0-7
Security Deposit..._.................................~.. 0-8
Abatement of Rental in the Event of Failure to
Have Use and Possession of the ProJect................ D-8
(i)
.
.
.
SECTION 501
SECTION 502
SECTION 503
SECTION 504
SECTION 505
SECTION 506
SECTION 507
SECTION 508
SECTION 509
SECTION 510
SECTION 511
SECTION 512
SECTION 601
SECTION 602
SECTION 603
SECTION 701
SECTION 702
SECTION 703
SECTION 801
SECTION 802
SECTION 803
SE cn ON 804
SECTION B05
Page
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Maintenance and Taxes................................... D-10
Modificatlon of Project................................. 0-10
Publ1C Liabl11ty and Property Damage
I nsurance III ... ... . ... . . . . . .. ... ... . . . .. .. . .. . ... . III. . . . . ... .. . . . . . ... . . . .. . . .. III D-11
Fire and Extended Coverage Insurance.................... D-l1
Rental Interruption Insurance........................... 0-12
Insurance Net Proceeds; Form of Policies................ 0-12
Advances................................................ D-13
Liens.................. 11-............................................................ D-13
Eminent Domain.......................................... D-13
Application of Net Proceeds............................. 0-14
Title Insurance......................................... 0-14
Agreement to Pay Trustee's Fees......................... 0-14
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
Dlsclaimer 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 Subleasing by the Lessee................. 0-16
Release and Indemnification Covenants................... 0-16
ARTICLE VI I I
EVENTS OF DEFAULT AND REMEDIES
Events of Default Defined............................... 0-18
Remedies on Default..................................... D-18
No Remedy Exclusive..................................... 0-19
Agreement to Pay Attorneys' Fees and Expenses........... 0-19
No Additional Waiver Implied by One Walver.............. 0-19
( i 1 )
.
.
.
Page
ARTICLE XI
OPTION TO PURCHASE; OPTION TO PREPAY
SECTION 901
SECTION 902
SECTION 903
SECTION 904
Purchase Option.......................................... 0-20
Exercise of Option....................................... 0-20
Transfer of Tltle and Release of
Corporation's Interest................................. D-20
Option to Prepay......................................... D-20
ARTICLE X
MISCELLANEOUS
SECTION 1001 Notices................................................. 0-22
SECTION 1002 Binding Effect.......................................... 0-22
SECTION 1003 Severabillty............................................ 0-22
SECTION 1004 Amendments, Changes and Modiflcations................... 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.......................................... 0-22
SECTION 1009 Corporation and Lessee Representatives.................. 0-22
SECTION 1010 Captions................................................ D-23
(iil)
.
.
.
ARTICLE I
DEFINITIONS
Definitions. Unless the context otnerwise requires, capitalized terms
used herein shall have the meanings ascribed to them in Exhibit A to the
Lease Agreement.
Exhibit 0
Page 1
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ARTICLE I I
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 validly existing Political
Subdivislon 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 fulfi llment of or compl i ance with the terms and
conditions hereof or thereof, nor the consummation of the transactlons
contemplated hereby or thereby, conflicts with or results in a breach of the
terms, conditions or provisions of any restriction or any agreement or
instrument to which the Lessee is now a party or by which the Lessee is
bound, or constitutes a default under either of the foregoing, or results ln
the creation or imposition of any lien, 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 Corporatlon represents, covenants and warrants to the
Lessee as follows:
(a) The Corporation is a nonprofit publ ic benefit corporation duly
organized, existing and in good standing under and by virtue of the laws of
the State of Callfornia; has power to enter into the Lease Agreement and the
Trust Agreement; is possessed of full power to own and hold real and
personal property and to lease and sell the same; and has duly authorized
the execution and delivery of all of the aforesaid Agreements.
(b) The Corporat i on wi" not pledge the Lease Payment s or other
amounts derived from the Project and from its other rights under the Lease
Agreement, 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 fu 1 f 11lment of or camp 1 i ance with the terms and
conditions hereof or thereof, nor the consummation of the transactions
contemplated hereby or thereby, 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 which the
Corporatlon is bound, or constitutes a default under either of the
foregoing, or results in the creation or imposition of any lien, charge or
Exhlbit 0
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encumbrance whatsoever upon any of the property or assets of the
Corporation, or upon the PrOJect. except Permitted Encumbrances.
(d) Except as provided in the Lease Agreement and in the Trust
Agreement. the Corporatlon will not assign the Lease Agreement, its right to
receive lease Payments from the lessee. or its dutles and obligations under
the Lease Agreement to any other person. flrm or corporation so as to impalr
or violate the representations, covenants and warranties contained in this
Section 202.
Exhi bit 0
Page 3
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ARTICLE III
DEPOSIT OF MONIES; ACQUISITION OF THE PROJECT
SECTION 301. Deposit of Monies. On the Closing Date, the Corporation
shall cause to be depos1ted 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 Acquisltion Account funds which, together with
investment earnings thereon, will be sufficient to pay Acqu1sition Costs.
SECTION 302. Acqu i sit i on of the Project. The Lessee wi 11, as agent
of the Corporation, 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, acquisition and
installation of the Project. The Lessee agrees that it will cause the work
under said 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 installed in accordance wlth the
specifications approved by the Lessee on or prior to the Acquisition Date.
The Lessee may change the speclflcations of the Project, 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 change, unless the Lessee deposits in the Lessee's
Acquisition Account an amount sufficient to pay such increase. In addltion,
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 Acqu;s1tlon
Account, together with investment earnings thereon, the Lessee agrees to
deposit into the Lessee's AcquiSition 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, acquisition and
installation of any discrete portion of the Project9 it will take possession
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 sell, assign and trans.fer to the Corporation
all of its rights under the contracts with respect to the portion of the
Project for wh i ch the lessee has contracted prior to the Cl os ;ng 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
title to the portion of the Project acquired prior to the Closing Date,
which portlon of the Project is more particularly described in Exhiblt G to
the Lease Agreement.
Upon completion of acqu1sition and installation of the Project
reasonably satisfactory to the Lessee, but in any event not later than the
Acquisition Date, the Lessee shall dellver to the Trustee a Certificate of
Completlon.
If, on the Acquisition Date, moneys are remalning on deposit in the
Acquisition Account, such moneys shall be transferred to the Lessee1s Lease
Payment Account and shall be applied, on the next succeeding Due Date, as a
Exhlbit 0
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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 parties agree that the lease Agreement shall be deemed to be
effective as to each component of the Project as it is constructed, acquired
or installed. and upon acceptance of a discrete portion of the Project, the
Lessee agree 5 to de 1 i ver to the Tru stee a cert i f i cate of acceptance (a
uCertlficate of Acceptance") which Certificate of Acceptance shall ind1cate
the proportionate amount of the Lesseets Project so 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 Lessee's
proport i onate share of Costs of Issuance and the di scount 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 Lessee's 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
Sectlon 301 of the Trust Terms and Conditions.
Exhlblt D
Page 5
.
ARTICLE IV
AGREEMENT TO LEASE; TERMINATION OF
LEASE AGREEMENT; LEASE PAYMENTS;
TITLE TO THE PROJECT
SECTION 401. Agreement to lease. The lease of the Project by the
Corporation to the Lessee is made expressly sUbject to the terms and
conditions set forth hereln.
SECTION 402. Termination 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 is 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 Conditions; or
.
Upon occurrence of an event which will result in termination of the
lease Agreement, the Trustee wi 11 not make any further di sbursements from
the lessee's Acquisition Account and all amounts at the time ln 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
applied to redemption of the Certificates.
SECTION 403. Lease Payments. The Lessee agrees to pay to the
Corporation or its successors and assigns, as rental for the use and
possession of the Project, the Lease Payments on the Due Oates in 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 duet and that at such tlme
as the monies on hand in the Lessee's Lease Payment Account and the lessee's
Reserve Account are equal to all lease Payments remaining unpald, such
momes shall be appl ied by the Trustee9 pursuant to Sect ion 306(d) of the
Trust Terms and Conditionst 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 1 e on a Due Date is 1 n
consideratlon for use and possession of the Project to the next occurring
Payment Date.
Lease Payments for each annual rental period during the Term of the
Agreement shall constitute the total rental for sald rental period and shall
be pald by the Lessee in each rental period for and in consideration of the
rlght of the use and possession of, and the continued quiet use and
enjoyment of, the Project during eacn such period for which Sdld rental lS
to be paid. The parties hereto have agreed and determined that such total
.
Exhibit D
Page 6
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.
.
rental represents the fair rental value of the Project. In making such
determination, consideration has been given to the costs of acquisition,
construction, delivery, installatlon and financing of the Project, other
obligations of the parties under the Lease Agreement, the uses and purposes
Whl ch may be served by the ProJect and the benefi ts therefrom Whl ch wl1l
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 (10%) 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 ;s 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 duties imposed
by law~ and it shall be the duty of each and every public official of the
Lessee to take such actlon 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
Trustee, 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 periOd.
To the extent that monles are available in the Lessee's Lease Payment
Account, the Lessee's Reserve Account and the Lessee's Acquisition Account
for such purpose, the Lessee agrees to pay Lease Payments from such sources
regardless of whether or not it has acquired the Project.
SECTION 404. ~,ossession and Enjoyment. During the Term of the
Agreement, the Corporation shall provide the Lessee with quiet use and
enjoyment of the Project, and the Lessee shall, during such Term, peaceably
and quietly have and hold and enjoy the Project, without suit, trouble or
hindrance from the Corporation, except as expressly set forth in the Lease
Agreement. The Corporation will, at the request of the Lessee and at the
Lessee's cost, join in any legal action in which the Lessee asserts its
right to such possession and enjoyment to the extent the Corporation may
lawfully do 50. Notwithstanding the foregoing, the Corporation shall have
the rlght 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 Agreement,
tit 1 e to the ProJect and any and all add i t i ons ~ rep 1 acernents 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 damaging the ProJect.
The Lessee shall not have any right, title or interest in the Project or in
Exhibit 0
Page 7
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.
.
any additions, 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 Conditlons, all right, 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 liens. The Corporation
agrees to defend and ellminate any claims adverse to the title to the
Project, and to save and hold the Lessee harmless therefrom; provided, that
the Corporatlon's obligations under this sentence shall not extend to claims
arising out of actions by the Lessee or persons asserting claims under It;
provided that the Lessee shall reimburse the Corporation for any costs
incurred by the Corporation in defending or eliminating such claims,
including reasonable attorneys' fees.
SECTION 406. Securit,y Deposit. Notwithstanding any other provision
of the Lease Agreement~ the Lessee may, on any date~ secure the payment of
Lease Payments by a deposit with the Trustee of: (i) an amount which,
together with amounts on deposlt in the Lesseets Lease Payment Account and
the lessee1s Reserve Account, is sufficient to pay all unpaid lease
Payments, including the principal and interest components thereof, in
accordance with the Lease Payment schedule set forth in Exhiblt B to the
Lease Agreement, or (il) Federal Securities, valued in accordance wlth
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 monies or Permitted Investments of such type
then on deposit in the lesseets Lease Payment Account and Lessee's Reserve
Account, 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 provided by the
Lease Agreement for said obligations, shall cease and terminate, excepting
only the obl igation 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
automatically 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. Sa i d depos it shall be deemed to be and sha 11 cons t i tute a
special fund for the payment of Lease Payments in accordance with the
provlsions 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 durlng any period during WhlCh by reason of damage or destructlon
(other than by eminent domain which ;s 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 Certificates representing interests
Exhi b1t D
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.
in the Lessee's Lease Payment, 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 consideratlon for the use
and possession of the portions of the Project not damaged or destroyed;
provided, however, that in the event such damage or destruction results In
redemption of Certificates, the resulting Lease Payments will be sufflcient
to pay all of that portion of principal and interest on the remalning
Outstanding Certificates which represent interests in the lessee I s lease
Payments. Such abatement shall not result so long as moneys in the Lessee's
Lease Payment Account and the Lessee's Reserve Account and Net Proceeds of
insurance and rental interruption insurance are sufficient 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 completlon
of the work of repair or reconstruction. if any. In the event of any such
damage or destruction. this Agreement shall continue in full force and
effect and the Lessee waives any right to terminate this Agreement by virtue
of any suCh damage and destruction.
There shall be no abatement of Lease Payments to the extent that
moneys derived from any person as a result of any defect or delay in the
acquisition or construction of the Lessee's Project are available therefor.
The amount of Lease Payments shall also be abated to the extent, if
any, required by operatlon of law resulting from the Lessee I s fallure to
have use and possesslon of the Project.
Exhlbit D
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.
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
.
SECTION 501. Maintenance and Taxes. Throughout the Term of the
Agreement, as part of the conslderatlon for the rental of the Project, all
improvement, repair and maintenance of the Project sha 11 be the
responsibility of the Lessee, and the Lessee shall pay for or otherwlse
arrange for the payment of the cost of the repair and repl acement of the
PrOJect resulting from ordinary wear and tear or want of care on the part of
the Lessee thereof. The Lessee shall maintain the Project in good working
order and shall comply with manufacturer or vendor requirements wlth respect
to proper maintenance of the Project, if any. In exchange for the Lease
Payments herein provided, the Corporation 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 Corporation Dr affecting 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
levied 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
obligated to pay only such installments as are required to be paid during
the Term of the Agreement as and when the same shall become due.
The Lessee, at the Lessee1s expense and in its name, may in good faith
contest and diligently pursue to conclusion any such taxes and other charges
and, in the event of any such contest, may permit the taxes or other charges
50 contested to remain unpaid dUr1ng the period of such contest and any
appeal therefrom unless the Corporation shall notify the Lessee that, in the
opinion of Independent Counsel, by nonpayment of any such items, the
interest of the Corporation in the Project will be materially endangered or
the Project or any part thereof will be subject to loss or forfeiture, in
which event the Lessee shall promptly pay such taxes or charges or provide
the Corporation with full security against any loss which may result from
nonpayment, in form satisfactory to the Corporation.
.
SECTION 502. Modification of Project. The Lessee shall, at its own
expenseJ have the right to remade 1 the Project or to make add i t ions and
modifications thereto. All such addltions and modlfications shall
thereafter comprise part of the Project and be subject to the provlsions of
the Lease Agreement. Such additions and modifications shall not ln 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 this Section, shall be of a value which is
equal to or greater than the value of the Project immediately prior to the
making of such additions or modiflcations. The Lessee shall make no
madificatlons to the Project that jeapordize any warrantles relatlng
thereto. The Lessee wi 11 not perml t any mechani CiS or other 11 en to be
Exhibit 0
Page 10
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.
.
established or remain against the Project for labor or materials furnished
in connection with any remodeling, additions, modifications, repalrs,
renewals or replacements made by the Lessee pursuant to this Sect10n;
provided, that if any such llen is establ1shed and the Lessee shall first
notify the Corporation of the lessee's lntention 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 item, 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. Pub 1 i c L; abi 1 ity and Property Damage Insurance. The
lessee shall maintain or cause to be malntained, throughout the Term of the
Agreement (but during the period of delivery and installatlon 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 i cy or pol i ci es sha"
provide for indemnifi cat ion of said parties against direct or cont 1 ngent
loss or liability for damages for bodily and personal injury, death or
property damage occasioned by reason of the acquisition or operation of the
ProJect. Said poliCY or policies shall provide coverage in the minimum
liability limits of $1,000,000 for personal injury or death of each person
and $3,000.000 for personal injury or deaths of two or more persons in each
accident or event, and in a minimum amount of $100,000 (SUbject to a
deductible clause of not to exceed $5,000) 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 s i ngl e 1 imi t po 11 cy in the
amount of $3.000,000 covering all such risks. Such liability insurance may
be maintained as part of or in conjunction with any other llability
insurance coverage carried or required to be carried by the Lessee and, with
the approval of the Insurer. 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 thlS
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 procure, or cause to be procured, 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 is not
provided by the Contractors), insurance against loss or damage to any part
of the Project by fire and lightning, with extended coverage and vandallsm
and mallcious mischief insurance. Said extended coverage insurance shall,
as nearly as practicable, cover loss or damage by explosion, windstorm,
riot, aircraft, vehicle damage. smoke, sprinkler damage. boiler explosion,
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 Certificates then Outstandlng
re 1 at 1 ng to the Project, wh i chever is greater. Such insurance may be
Exhlbit D
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malntained as part of or in conjunction with any other fire and extended
coverage insurance carried or required to be carried by the Lessee and~ with
the approval of the Insurer, 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 this
Section, must be restricted speciflcally to the Project and must consist of
Permitted Investments.
The Lessee shall also procure~ or cause to be procured, and malntained
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. Rental Interruption Insurance. The Lessee shall
procure. and malntain 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 resu lt 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 1 ieu of obtai ning
insurance coverage as required by this Section 505, such coverage may be
maintained by the Lessee in 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 special lnsurance reserve meetlng 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's
lease Payment Account, and shall be credited towards the payment of the
Lease Payments in the order in wh 1 ch such Lease Payments come due and
payable.
SECTION 506. Insurance Net Proceeds; Form of Policies. The policies
of insurance required by Sectlon 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 in
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 obtain 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
provldes 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 Project. or (ii) an
Insurance Consultant certifies to the Trustee and the Corporation that the
Lessee 1 s general insurance reserves are adequate to provi de the neces sary
coverage. A 11 pol i ci es of insurance requ i red 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.
Exhlbit 0
Page 12
.
.
.
The lessee shall payor cause to be paid when due the premiums for all
insurance pollcles required by the Lease Agreement, and shall promptly
furnish or cause to be furnished evidence of such payments to the Trustee
and the Insurer. All such policies shall provide that the Trustee shall be
given thirty (3D) daysl notice of each expiratlon, any intended canc~llation
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 Article, the Corporation may, but shall not be
obligated to, take such action as may be necessary to cure such fallure,
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 lO~ per annum from the date of the advance to the date of
repayment, 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
Lessee shall prompt 1y, at its own expense, take such act ion as may be
necessary to du 1 y discharge or remove any such mortgage, pledge, 1 i en,
charge, encumbrance or claim for which it is responsible, if the same shall
arise at any time. The Lessee shall reimburse the Corporation for any
expense incurred by it in order to discharge or remove any such pledge,
lien, charge, encumbrance or claim.
SECTION 509. Eminent Domain. If all or part of the Project is taken
under the power of eminent domain, 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 Representative 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 proceedlngs or is taken in part to such extent that the remaining
portion of the Project is no longer useful for the purposes originally
intended, the remaining Lease Payment obligations of the Lessee will be
abated in full and this Agreement shall thereupon be terminated. Otherwise,
(I) thlS Agreement shall continue in full force and effect and shall not be
terminated by virtue of such taking and the parties waive the benefit of any
1 aw to the contrary, and (2) there sha 11 be a proport i onate abatement of
Lease Payments such that the resulting Lease Payments will be sufficient to
pay all of that port i on of pr i nc i pa 1 and i nteres t wi th respect to the
remaining Certiflcates which represent interests in the Lessee's Lease
Payments.
Exhlbit 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 applled by the Trustee pursuant to Sectlon 2.9 of the Trust
Agreement and Sect i on 305 of the Tru s t Terms and Cond it 1 ons. Upon such
deposit the Lessee Representative shall file a certiflcate 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 Emlnent Domain Award. The Net Proceeds of any eminent
domain award resultlng 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 applied 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 shall, on the Closing Date, deliver to
the Trustee a title insurance policy insuring the Lessee's fee title estate
in the site relating to the Project, if any, and the Corporation's leasehold
estate in the site relating to the Project and the Project in an amount
equal to the total prlncipal amount of lease Payments due hereunder.
SECTION 512. Agreement to Pay Trustee's Fees. The Lessee agrees to
pay to the Corporat i on 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 Agreement, such share to be calculated according to
the same proport i on as the Pri nci pa 1 Amount bears to the total pri nc i pa 1
amount of the Certlficates of Particlpatlon. The Lessee shall not be
obligated to pay any portion of the fees or expenses of the Trustee readily
attributable to another Lessee.
Exhibit D
Page 14
.
.
.
ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
SECTION 601. Di scl aimef of Warranties. THE CORPORATION MAKES NO
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, CONOITION, 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, FURNISHING,
FUNCTIONING OR THE LESSEE'S USE OF THE PROJECT.
SECTION 602. Lessee1s 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 ; ncurred by the
Corporation in the enforcement of such warranty, including reasonable
attorneys' fees.
SECTION 603. Corporation and Insurer Access to the Project. The
Lessee agrees that the Corporation, the Insurer, any Corporation
Representative and the Corporation's successors or assigns, shall have the
right at all reasonable times to examlne and inspect the Project. The
Lessee further agrees that the Insurer, Corporation, any authorized
representative or either, and the Corporation's successors or assigns 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.
Exhibit D
Page 15
.
ARTICLE VI I
ASSIGNMENT, SUBLEASING AND INDEMNIFICATION
SECTION 701. Assignment by Corporation. The Corporation I s r1ghts
under the lease Agreement, including, but not limited to, 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 as signed 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, provided, that any sublease or assignment shall be sUbject
to all of the following condltions:
(i) 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
.
(1 i i) The Lessee shall, within thirty (3D) 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 governmenta 1 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 opinion of nationally recognized bond counsel to the effect
that such sublease or assignment shall not cause the interest
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 indemnlfy and save the Corporation harmless from and
against all claims, losses and damages, including legal fees and expenses,
arising out of (1) the use, maintenance, condition or management of, or from
any work or thing done on the Project by the Lessee, (1 i) any breach or
default on the part of the Lessee in the performance of any of its
ob 1 i gat ions under the Lease Agreement, (i i i) any act or negl i gence of the
Lessee or of any of its agents, contractors, servants, employees or
licensees with respect to the Project, (iv) any act or negligence of any
assignee or sublessee of the Lessee, or of any agents, contractors,
servants, employees or licensees of any assignee or sublessee of the Lessee
with respect to the Project, or (v) the delivery, installation and
aCQuisition of the Project or the authorization of payment of the
Acquisition Costs by the Lessee. No lndemnification is made by the Lessee
Exhiblt D
Page 16
.
.
.
under this Section or elsewhere in the Lease Agreement for willful
misconduct, negligence, or breach of duty under th1s Lease by the
Corporation, its officers, agents, employees, successors or assigns.
Exhibit 0
Paae 17
~
ARTICLE VIII
.
EVENTS OF DEFAULT AND REMEDIES
SECTION 801. E....ents of Default Defined. The following shall be
lIevents of defaultll under the Lease Agreement and the terms lIevents of
default II and IIdefaultll shall mean, whenever they are used in the Lease
Agreement. with respect to the Project, anyone or more of the following
events:
.
(i) Fal1ure by the Lessee to pay any Lease Payment or other
payment requ ired 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 1n clause (i) of this Section, for a period of
thirty (30) days after written notlce specifying such fal1ure and
requesting that it be remedied has been given to the Lessee by the
Corporation. the Insurer, the Trustee, or the Owners of not less than
twenty-five percent (25%) in aggregate principal amount of
Certificates then outstanding; provided, however. if the failure
stated in the notice cannot be corrected wlthin the applicable period,
the Corporation, the Trustee. the Insurer and such Owners Wl 11 not
unreasonably wlthhold their consent to an extensl0n of such time if
corrective action is instltuted by the Lessee within the appllcable
periOd and diligently pursued until the default is corrected.
(iii) The filing by the Lessee of a voluntary petition in
bankruptcy, or failure by the Lessee promptly to lift any execution,
garnishment or attachment, or the filing of an involuntary petition in
bankruptcy agalnst the Lessee WhlCh petition shall not have been
withdrawn within sixty (60) days, or assignment by the Lessee for the
benefit of creditors, or the entry by the Lessee into an agreement of
composition with creditors, or the appro....al by a court of competent
jurisdiction of a petition applicable to the Lessee in any proceedings
instituted under the provislons of the federal bankruptcy law, or
under any similar acts which may hereafter be enacted.
SECTION 802. Remedies on Default. Upon the occurrence and
continuance of any event of default spec1fied in Section 801(i) or 801(iii)
of the lease Terms and Conditions, the Trustee, as assignee of the
Corporatlon, 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
written request of the Insurer and the Owners of not less than a majority in
aggregate principal amount of Certificates then Outstanding shall proceed,
to:
.
(i) Protect and enforce the Lease Agreement by such judicial
proceeding as the Corporatlon or ltS asslgnee shall deem most
effectual, either by suit in equity or by actlon at law, whether for
the speciflc performance of any covenant or agreement contained in the
Exhiblt 0
Page 18
.
.
.
Lease Agreement, or in aid of the exercise of any power granted in the
Lease Agreement, or to enforce any other legal or equitable right
vested in the Corporatlon or lts assignee by the Lease Agreement or by
1 aw; or
(ii) Take possession of the Project and exclude the Lessee from
using it until the default is cured, holding the Lessee liable for the
Lease Payments and other amounts payable by the Lessee prior to such
taking of the Project under and pursuant to the Lease Agreement and
the curing of such default; or
(iii) If the Project consists of real property, to relet the
Project for a period equal to the greater of (a) the remainlng Term of
the Lease Agreement or (b) ten years; or
(iv) If the Project consists of personal property, to take and
sell 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 desirable 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 Remedy Exclusive. No remedy herein conferred upon or
reserved to the Corporat ion is 1 ntended to be exc lus 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 exercise any right or power accruing upon
any default shall impair any such rlght 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 expedient. In order to entitle the
Corporatlon to exercise any remedy reserved to it in this Article, it shall
not be necessary to give any notice, other than such notice as may be
required 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 nondefaulting party should employ attorneys or
incur other expenses for the coll ect ion of monies 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.
SECTION 805. No Add1tional Waiver Impl ied by One Waiver. In the
event any covenant contained in the Lease Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to walve
any other breach under the Lease Agreement.
Exhibit 0
Page 19
.
ARTICLE IX
OPTION TO PURCHASE; OPTION TO PREPAY
.
SECTION 901. Purchase Opt ion. If the Termi nat ion Date of the Lease
Agreement is on or after December 1, 19969 the Lessee shall have the option
to purchase the Project on or after December 1, 19959 but only if it is not
then in def au 1 t under Sect; on 801 (i) or (i i i) of the Lease Terms and
ConditionS9 and only in the manner provided in this Article.
SECTION 902. Exerclse 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 1" whole, plus premium, if any
(as set forth in Section 904 of the Lease Terms and Conditions), plus
accrued interest on such principal portion to the applicable June 1 or
December 1 set for redemption of the Certificates. Such purchase price
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 lts 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 business days Or more prior to said June
1 or December 1, an amount equal to the unpaid principal amount of Lease
Payments, plus premium, if any, plus accrued interest on such principal
portion of Lease Payments to such June 1 or December 1. If the Lessee
exercises its option to purchase the Project pursuant to this Sectlon, any
amount then on hand in the Les see I s Reserve Account, 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 I s account in the Insurance and Condemnation Fund
shall be applied towards the payment of the applicable purchase price to be
paid by the Lessee. If the Lessee shall have given notice to the Trustee of
,ts 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 Re1ease of Corporation's Interest.
Upon exerc 1 se by the Les see of it s opt i on 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 $20,000)
the principal component of Lease Payments relating to Certificates maturlng
in the years identified below. on the following dates and in the following
amounts, together with the premiums set forth below (expressed as a
percentage of the principal amount prepaid):
.
Exhibit 0
Page 20
Prepayment Optlon Date Prepayment Premlum
. December 1, 1995 and June 1, 199 6.. . . . . .. 2 %
Oecember 1, 1996 and June 1, 1997........ 1-1/2
December 1, 1997 and June 1, 1998411......... 1
December 1, 1998 and June I, 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 prlor to three
business days prior to said June 1 or December 1,. an amount equal to the
prlncipal component of Lease Payments being prepaid. plus the appl icable
premium 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.
.
.
Exhlb4t 0
Page 21
ARTICLE X
MISCELLANEOUS
.
SECTION 1001. Notices. All notlces, certificates or other
commun1cations hereunder shall be sufficiently g1ven and shall be deemed to
have been received 48 hours after deposit in the United States mail in
registered or certified form wlth postage fully prepaid when sent to the
addresses shown on Exhibit E to the Lease Agreement.
The Trustee, the Insurer, the Corporation and the lessee, by not i ce
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 inure to the
benefit of and shall be binding 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 invalidate or render unenforceable any
other provision thereof.
SECTION 1004. Amendments, Changes and Modifications. The Lease
Agreement may be amended or any of 1 ts terms mod if i ed Wl th the wri t ten
consent of the Lessee and the Corporation; provided, 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 "net-net-net lease" and the Lessee hereby agrees that
the lease Payments shall be an absolute net return to the Corporation, free
and clear of any expenses, charges or set-offs whatsoever.
SECTION 1006. Further As surances and Corrective Instruments. The
Corporation and the Lessee agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, 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. Execution in Counterparts. The Lease 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 instrument.
SECTION 1008. Applicable Law. The Lease Agreement shall be governed
by and construed in accordance with the laws of the State of Californla.
SECTION 10.9. Corporation and lessee Representatives. Whenever under
the provisions of the Lease Agreement the approval of the Corporation or the
Lessee is required, 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 given for the Corporation by a Corporation Representative 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 are for convenience only and in no way define, limit or describe
the scope or intent of any provisions or Section of the Lease Agreement.
Exhib,t 0
Page 23
.
C'"
N
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.
.
EXHIBIT E
ADDRESSES FOR NOTICE PURPOSES
If to the Corporatlon:
If to the Lessee:
If to Trustee:
If to the Insurer:
.
.
Californla Clties Financing Corporation
1400 K Street, Suite 400
Sacramento, Californla 95814
Attn: Secretary
City of Thousand Oaks
4011 West Hl11crest Drlve
Thousand Oaks, California 91360
Attn: Flnance Director
First Interstate Bank of California
707 Wl1shire Boulevard
Los Angeles, California 90017
Attn: Corporate Trust Dept. (~lo-2)
USF&G Financial Security Company
601 Montgomery Street
San FranC1SCO, California 94111
Attn: General Counsel
Exhlbit E
Page 1
EXHIBIT F
.
CONTRACTS ASSIGNED TO CORPORATION
NONE
.
.
Exhl bit F
Page 1
EXHIBIT G
.
DESCRIPTION OF PREVIOUSLY ACQUIRED PORTION OF THE PROJECT
NONE
.
.
Exhibit G
Page 1
.
.
.
13050-5
JHH~:BOQ:rms 11/19/85
12/22/85
12/24/85
21651
AFTER RECORDATION PLEASE RETURN TO:
Jones Hall Hill & White,
A Professlonal Law Corporation
Four Embarcadero Center, Suite 1950
San Franclsco, CA 94111
Attention: Brian D. Quint, Esq.
SITE LEASE
Dated as of December 1, 1985
by and between the
CITY OF THOUSAND OAKS
and the
CALIFORNIA CITIES FINANCING CORPORATION
.
.
.
SITE LEASE
THIS SITE LEASE, dated as of December 1, 1985, by and between the CITY
OF THOUSAND OAKS, a genera 1 1 aw C1 ty organ; zed and ex; st; n9 under and by
virtue of the laws of the State of Cal1forma (the IICityll), as lessor, and
the CALIFORNIA CITIES FINANCING CORPORATION, a nonprof1t publ1 c benef1t
corporation duly organized and existing under and by virtue of the laws of
the State of Californ1a (the IICorporationll), as lessee;
~ I I ~ f ~ ~ ; I ~:
WHEREAS, the Corporation 1ntends to assist the C1ty by financ1ng and
constructing for the Clty a new community information center located on
Clty-owned land, and to lease the communlty information center (the
IIProject") to the City pursuant to a Lease Agreement, dated as of December
1, 1985 (the It Lease Agreement II), and the City proposes to enter 1 nto t h 1 S
Site Lease with the Corporatlon as a mater1al considerat1on for the
Corporation's agreement to lease the Project to the City;
NOW, THEREFORE, IT IS HEREBY MUTUALLV AGREED, as follows:
SECTION 1. Site Lease.
The City hereby leases to the Corporat1on and the Corporation hereby
hlres from the Clty, on the terms and condltions hereinafter set forth, the
real property situated in the C1ty of Thousand Oaks, State of Ca 1 iforni a,
and described in Exhibit A attached hereto and made a part hereof (the
llS1te").
SECTION 2. Term.
The term of this Site Lease shall commence on the date of recordation
of this Site lease in the Office of the County Recorder of the County of
Ventura, State of Cal1fornia, and shall end on December 1, 2005, unless such
term is extended or sooner terminated as herelnafter provided. If on
December 1, 2005 the aggregate amount of Lease Payment s payable under the
Lease Agreement shall not have been paid, or provision shall not have been
made for their payment, then the term of thlS Site Lease shall be extended
until such Lease Payments shall be fully pald or provision made for such
payment. If prior to December 1, 2005, all lease Payments shall be fully
pald or provis1on made for such payment, the term of th1S Site Lease shall
end ten (10) days thereafter.
.
.
.
SECTION 3. Rental.
The City acknowledges receipt from the Corporat1on as and for rental
hereunder the sum of One Dollar ($l.OO), on or before the date of del1very
of this agreement.
SECTION 4. Purpose.
The Corporation shall use the Site solely for the purpose of
constructing the Project thereon and leas1ng the Site and the Project to the
City pursuant to the Lease Agreement and for such purposes as may be
incidental thereto; provided, that in the event of default by the City under
the Lease Agreement the Corporat1on and its assigns may exerClse the
remedies prov1ded in the Lease Agreement.
SECTION 5. Owner in Fee.
The City covenants that it is the owner in fee of the Site.
SECTION 6. Assignments and Subleases.
Unless the City shall be 1n default under the Lease Agreement, the
Corporation may not assign 1ts rights under this Site Lease or sublet the
Slte, except as provided in the Lease Agreement, without the written consent
of the City.
SECTION 7. Right of Entry.
The City reserves the right for any of its duly author1zed
representatives to enter upon the Slte at any reasonable time to inspect the
same or to make any repa 1 rs, improvements or changes necessary for the
preservation thereof.
SECTION 8. Termination.
The Corporatlon agrees, upon the termination of this Slte Lease, to
quit and surrender the Site in the same good order and condition as the same
were in at the time of commencement of the term hereunder, reasonable wear
and tear excepted, and agrees that any permanent improvements and structures
existing upon the Site at the time of the termination of this Site Lease
shall remain thereon and title thereto shall vest in the City.
SECTION 9. Default.
In the event the Corporat1on shall be 1n default in the performance of
any obl igation on its part to be performed under the terms of this Site
Lease, which default continues for thirty (30) days follow1ng not1ce and
demand for correction thereof to the Corporation, the City may exercise any
and all remedies granted by law, except that no merger of thlS Slte Lease
and of the Lease Agreement shall be deemed to occur as a resu 1 t thereof;
prov1ded, however, that so long as any of sald certificates of participation
are outstanding and unpaid in accordance with the terms thereof, the Lease
Payments assigned by the Corporation to the trustee under the Trust
Agreement, dated as of December 1, 1985, by and among the Clty, the
-2-
.
.
.
Corporation, the Cities of Delano, Fontanaand Santa Monica, and First
I nters tate Bank of Cali forni a, as trustee thereunder (the "Trust Agreement II)
shall continue to be paid to said trustee.
SECTION 10. Quiet Enjoyment.
The Corporation at all tlmes during the term of this Site Lease shall
peaceably and quietly have, hold and enjoy all of the Site, sUbject to the
provisions of the Lease Agreement and the Trust Agreement.
SECTION 11. Waiver of Personal Llabi1ity.
All liabilities under thlS Site Lease on the part of the Corporation
are solely liabilities of the Corporation, and the Clty hereby releases each
and every, member, dlrector and offlcer of the Corporation of and from any
personal or individual liab,1ity under this Slte Lease. No member, dlrector
or offlcer of the Corporatlon shall at any time or under any circumstances
be individually or personally llable under this Site Lease for anything done
or omitted to be done by the Corporatlon hereunder.
SECTION 12. Taxes.
The City covenants and agrees to pay any and all assessments of any
kind or character and also all taxes. includlng possessory lnterest taxes,
levled or assessed upon the Site (lncluding both land and lmprovements).
SECTION 13. Emlnent Domain.
In the event the whole or any part of the Slte or the improvements
thereon is taken by eminent domain proceedlngs, the interest of the
Corporation shall be recognized and lS hereby determlned to be the amount of
the then unpald certificates of participation delivered to finance the
construction of the ProJect, including the unpaid principal and lnterest
with respect to any then outstanding such certificates and the balance of
the award, if any, shall be paid to the Clty.
SECTION 14. Partial Invalidity.
If anyone or more of the terms, provislons, covenants or condltions
of thlS Site Lease shall to any extent be declared invalid, unenforceable,
vOld or voidable for any reason whatsoever by a court of competent
Jurisdictlon, the flnding or order or decree of which becomes final, none of
the remainlng terms, provisions, covenants and cond1t;ons of this Slte Lease
shall be affected thereby, and each provislon of this Site Lease shall be
valid and enforceable to the fullest extent permitted by law.
SECTION 15. Notices.
All notices, statements, demands, consents, approvals, authorlzations,
offers, designations, requests or other communlcations hereunder by either
party to the other shall be in writing and shall be sufficlently glven and
served upon the other party if dellvered personally or if mailed by Unlted
States registered mall, return rece1pt requested, postage prepald, and, if
to the City, addressed to the City in care of the Finance Dlrector, Clty of
-3-
.
.
.
Thousand Oaks, 401 West Hillcrest Drlve, Thousand Oaks, Cal1fornia 91360, or
if to the Corporation, addressed to the Corporation in care of the
Secretary, Califorma Cit,es Financing Corporation. 1400 K Street, SUlte
400, Sacramento, Cal Horm a 95814, or to such other addresses as the
respective parties may from time to time designate by notice in wrlting.
SECTION 16. Section Headings.
All sectlon headings contained herein are for convenience of reference
only and are not intended to deflne or limit the scope of any provlsion of
this Site Lease.
SECTION 17. Execution.
This Site lease may be executed in any number of counterparts, each of
which shall be deemed to be an original but all together shall constitute
but one and the same lease.
-4-
.
IN WITNESS WHEREOF, the City and the Corporation have caused this Site
lease to be executed by their respective officers thereunto duly authorized,
all as of the day and year first above written.
CITY OF THOUSAND OAKS, as Lessor
Oh1~
By
(S E A L)
Attest:
(
ft11u~~L'
~~-~cierk
CALIFORNIA CITIES FINANCING
CORPORATION. as lessee
By
President
. (S E A L)
Attest:
Secretary
.
-5-
.
IN WITNESS WHEREOF, the City and the Corporation have caused this Site
Lease to be executed by their respective officers thereunto duly authorized,
all as of the day and year first above written.
CITY OF THOUSAND OAKS, as Lessor
By
(5 E A l)
Attest:
City Clerk
CALIFORNIA CITIES FINANCING
CORPORATION, as Lessee
By };;L#,d J ,
Presi
. (S E A L)
;Q.ttest:
~~~~-/(j/Atu~
Ser.r-et.ary
.
-5-
.
.
.
STATE OF CALIFORNIA
)
)
)
55.
COUNTY OF VeDtura
On thlS 27th day of December . ln the year 1985. befo:-e
me. the underslgned. a notary publlC. personally appeared ALEX FIORE and
CINDY CHRISTIAN. personally known to me (or proved to me on the baslS of
satlsfactory eVldence) to be the persons who executed the wlthln lnstrument
as Mayor and Deputy Clty Clerk. respectlvely. of the Clty of Thousand Oaks
and acknowledged to me that the Clty of Thousand Oaks executed It.
WITNESS my hand and offlclal seal.
------~-----_.
~...". 'li.~:W~ I
! ...,.~
j VENTUM COUNTY
My Carml Ellp. lip 13. 1889
..- - - - ~ - - - - - --- - - - - - - - -
Not~~~~~
and State
County
~.
. .J
Typed Name:
Gloria Ware
My commission expires: 9/13/89
.
.
.
STATE OF CALIFDRNIA
)
) ss.
)
COUNTY OF
Ventura
On th~s 26th day of December , ~n the year 1985, before me, the
unders~gned, a notary publ~c, personally appeared DORILL B. ~~IGHT, personally
known to me {or proved to me on the bas~s of sat~sfactory ev~dence} to be the
person who executed the w~th~n ~nstrument as Pres~dent of the corporat~on
there~n named and acknowledged to me that such corporat~on executed the w~th~n
~nstrument pursuant to ~ts bylaws or a resolut~on of ltS board of d~rectors.
WrTNESS my hand and off~c~al seal.
- ~~~~
~~~-~l'L <;:""'1 II
,r - ~ ~ C-~ ! l.......~......- - "-......-~....., r
~': ,/4:-, ~. _~.._' :'i::"- !:.. ~~~t. ~~_.. (0 1
<..;~:-s; ..... i I'o...r,'" j: ..... C - .............1-.......... ....... .
I; -== ..... .. Ill...... ... -- .
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;.~ _----~-~_.:::: --..r~_ _........--~---- ------
/"",
<'4cLdL a)?odL
Not4ty Publ~c ~n and for sald County
and State
Typed Name:
Judith A. Nash
My commlsslon explres:
5111/88
.
.
.
STATE OF CALIFORNIA
)
) S5.
)
COUNTY OF Sacramento
On th~s 24th day of December , ~n the year 1985, before me, the
unders~gned, a notary publlC, personally appeared DANIEL B. HARRISON,
personally known to me {or proved to me on the baS1S of satlsfactory eVldence)
to be the person who executed the Wlth~n lnstrument as Secretary of the
corporatlon there~n named and acknowledged to me that such corporat1on
executed the wlth~n ~nstrument pursuant to ~ts bylaws or a resolutlon of lts
board of d~rectors.
WITNESS my hand and off1clal seal.
@ OFFICtAL SEAL
. LORRAINE 0t<ABE
.....,~
\ MCIWiIENlO COUHh'
. "'(;o"~,.,,, -. _.1..1_
"fJ IV J. . /
"n.fJ-.f/lILUJ'J (~~
Notary PubllC 1n and for sald County
and State
Typed Name: Lorraine Oka~e
My comm1SSlon exp1res: Aue. 14, 1989
.
.
.
EXHIBIT A
PROPERTY DESCRIPTION
Situated in the City of Thousand Oaks, County of Ventura, State of
Callfornla, and descrlbed as follows:
That portion of Section 8, Township 1 North, Range 19 West, J. Edwards
Tract No.1, Rancho El Conejo, in the City of Thousand Oaks, County of
Ventura, State of California, according to the Map recorded in book 1,
page 746 of Deeds, described as follows:
Beginning at the Southeasterly corner of Lot 3, Tract No. 1862,
according to the Map recorded in book 46, page 73 of Maps; thence
along the boundary of said Tract No. 1862 by the following 2 courses,
1st: North 66 deg. 45' 21" West 106.89 feet to an angel-point;
thence,
2nd: South 63 deg. 28' 27" West 112.89 feet to the Easterly line
of Tract No. 1453 according to the Hap recorded in book 36,
page 11 of Maps; thence along the boundary of said Tract No.
1453 by the following 5 courses,
Southeasterly along a curve concave Northeasterly having a
radius of 958 feet a radial line bears South 63 deg. 28' 27"
West through an angle of 10 deg. 27' 51" an arc distance of
175.14 feet to the southeasterly corner of said Tract No.
1453; thence,
3rd:
4th: South 52 deg. 59' 41" West 84 feet to the most Easterly
corner of said Tract No. 1453; thence,
5th: North 69 deg. 49' 40" West 98.24 feet to an angle point;
thence,
6th: North 54 aeg. 08' 40" West 13.50 feet to an angle point;
thence,
7th: North 70 deg. 05' 45" West 97.23 feet to an angle point;
thence,
8th: South 22 deg. 01' 50" West 111.84 feet to a 3/4 inch iron
pipe; thence,
9th: South 42 deg. 01' 50" West 47.73 feet to a 3/4 inch iron pipe
Bet on the Northeasterly line of Calle Yucca as shown on the
Map of Arroyo Acres (Lynn Ranch) tiled in book 20, page 25 of
Records of Survey; thence along the boundary of said Arroyo
Acres by the following 2 courses and/or prolongation thereof,
-6-
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.
VEN-856919-wv
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loth:
11th:
J.2th:
13th:
14th:
.
15th:
16th:
17th:
18th:
.
Southeasterly, Southerly and Southwesterly along a curve
concave Westerly having a radius of 440 teet a radial line
bears North 66 deg. 39' 4711 East through an angle of 42 deg.
581 13" an arc distance of 329.99 feet 1 thence tangent to
said curve,
South 19 deq. 38' West 44.76 teet to the Southwesterly line
of the land described in Parcel 2 in the Deed to Martha L.
Hunt recorded in book 540, page 34 of Official Records;
thence along said Southwesterly line being also the so called
centerline of Arroyo Salto by the following 3 courses,
South 63 deg. 561 East 84.06 feet to an angle point1 thence,
South 58 deg. 10' East 309.55 feet to an angle point; thence,
South 69 deg. 54' East 178.56 feet to 35th course and/or
prolongation thereof, recited as "S 3 deg. 59' 29" w 238.52
feet", in Parcel 1 Parcel A Golf Course North of U.s. Highway
101, in that certain Deed of Trust recorded May 28, 1965 as
DocU1llent No. 39347, in book 2797, page 189 of Official
Records; thence along the boundary of said Parcel A by the
following 2 courses,
North 3 deg. 59' 29" East 238.52 feet to the Northerly
terminus of said 35th course: thence,
South 86 deg. 00' 31" East 12.01 feet to the intersection
with the southerly prolongation of the 37th course, being a
curve concave Southwesterly having a radius of 654 feet in
the deed to the County of Ventura recorded April 13, 1965 as
Document No. 27307 in book 2769, page 403 of Official Records
(Village Lane), a radial line to said intersection bears
South 86 deg. 00' 31" East: thence along said prolongation to
and alonq the Easterly line of said Vil1aqe Lane by the
following 4 courses,
Northerly along a curve concave southwesterly having a radius
of 654 feet through an angle of 36 deq. 04' 48", an arc
distance of 411.83 feet to the Northerly terminus of said
37th course, being the beginning of a reverse curve concave
Easterly having a radius of 45 feet 1 thence,
Northerly along said reverse curve through an angle of 64
deg. oot 29u an arc distance Of 50.27 feet to the beginning
of a reverse curve concave Northwesterly having a radius of
857.29 feet; thence,
""\ "," L. H. I
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~
.
VEN-856919-wv
7
19th:
20th:
21st:
Northerly and Northeasterly along said last mentioned reverse
curve through an angle of 11 deg. 22' 57" an arc distance of
170.29 feet to the beginning of a reverse curve concave
Southeasterly having a radius of 758 feet~ thence,
Northeasterly along said last mentioned reverse curve through
an angle of 2 deg. 46' 16" an arc distance of 36.66 feet to
the intersection with the Southeasterly prolongation of the
Southwesterly line of said Lot 3, Tract No. 1862; thence
along said prolongation,
North 66 deg. 45' 21u West 84 feet to the Point of Beginning.
EXCEPTING THEREFROM that portion of said land as conveyed to victor H.
Palmieri, as Trustee in Deed recorded August 10, 1966 in book 3-02 B,
page 216 of Official Records, lying southwesterly of the
Southeasterly prolongation of the first course of the above described
Parcell.
ALSO EXCEPTING a portion of said land described as follows:
Commencing at the Westerly terminus of the thirty-third course
described in Deed to the State of California, recorded January 9, 1962
in book 2093, page 166 of Official Records, in said office as having a
bearing of N. 76 deg. oot 4S" W., and a length of 61.69 feet; thence,
.
(1)
(2)
(3)
(4 )
Alonq said Thirty-third course s. 76 deg. 00' 48tl E. , 61. 69
feet to its Easterly terminus; thence,
N. 62 deg. 09' 43" w. , 147.21 feet: thence,
N. 55 deg. 11' 07" W. , 400.91 feet; thence,
N. 30 deg. 57' 11" E. , 96.00 feet: thence,
(5) N. 59 deg. 02' 49" W., 275.00 feet to t.he TRUE POINT OF
BEGINNING of this description: thence,
(6) Northwesterly along a tangent curve, concave Northeasterly,
having a radius of 300.00 feet, through an angle of 31 deg.
28' 41", an arc distance of 164.82 feet to a point of reverse
curve, a radial line of said reverse curve at .aid point bears
N. 62 deg. 2S' 52" E. ~ thence,
(7) Northwesterly along a reverse curve, concave Southwesterly,
having a radius of 500.00 feet, through an angle of 14 deg.
56' 33", an arc distance of 130.40 feet: thence,
.
~ '\" ... \' 1.. R I
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.
VEN-856919-WV
B
(8) N. 42 deg. 30t 41n W., 88.27 feet; thence,
(9)
S . a 3 deg. 53 ' 59" W.,
concave Southwesterly,
thence,
44.00 feet to a non-tangent
having a radius of 1054.00
curve,
feet;
(10) Northwesterly along last mentioned curve, through an angle of
27 deq. 23' 54", an arc distance of 504.01 feet to a point of
reverse curve, a radial line of said reverse curve at said
point bears S. 56 deg. 30' 05" W.; thence,
(11) Northerly along a reverse curve, concave Easterly, having a
radius of 40.00 feet, through an angle of 65 deg. 24' 51", an
arc distance of 45.67 feet to the 39th course described in
deed to the county of Ventura recorded as Document No. 27307
in book 2769, page 403 of said Official Records; thence, .
(12) Southerly and Southeasterly along the 39th course and the 38th
and 37th courses described in said deed to the county of
Ventura to the Easterly terminus of the 36th course described
in last mentioned deed; thence,
(13)
Along said 36th course S. 88 deg. 43' 25ft W., 157.46 feet to
its Westerly terminus; thence,
.
(14)
S. 27 deg. 12' 24" E., 80.41 feet; thence,
(15) Easterly, from a tangent, which bears N. 58 deq. 34' 46" E.,
along a non-tanqent curve, concave Southwesterly havinq a
radius of 40.00 feet, through an angle of 91 deg. 15' 53", an
arc distance of 63.72 feet; thence,
(16) Southeasterly along a compound curve Southwesterly, having a
radius of 946.00 feet, through an angle of 24 deg. 03' 20", an
arc distance of 397.18 feet; thence,
(17) N. 83 deg. 21' 12" W., 234.55 feet~ thence,
(18) N. 63 deg. 05' 57" W., 281.79 feet to the East line of Calle
Yucca, 80.00 feet wide, as shown on Map entitled "Arroyo
Acres" recorded in book 20, pages 24 through 27 of Records of
Surveys in said office; thence,
(19) Southerly along said East line to the south line of that
certain parcel of land described in Deed recorded November 14,
1963 as Document No. 67251 in book 2426, page 564 of said
Official Records; thence,
.
"- J ~
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.
VEN-SS691.9-wv
9
(20) Easterly along said South line to the Easterly line of the
land described in Deed recorded in book 540, page 34 of said
Official Records, said Easterly line also being the West line
of the East One-Half of the East One-Half of said Section S;
thence,
(21) Northerly along said Easterly line to Course No. 5 hereinabove
described: thence,
(22) Along said Course NO.5, N. 59 deg. 02' 49" W., 51.94 feet to
the True Point of Beginning, as eondemned to the people of the
State of California in that Final Order of Condemnation
recorded February 6, 1968 in book 3260, page 156 of Official
Records.
-
ALSO EXCEPTING THEREFROM that portion of said land as conveyed to Paul
z. Rose, in Deed recorded December 30, 1980 in book 5803, page 956 of
Official Records.
.
ALSO EXCEPTING THEREFROM an undivided one-half interest in and to all
the oil, gas, mineral and other hydrocarbon substances lying or being
below a depth of 500 feet from the surface of the real property above
described, provided, however, the grantors, their heirs, successors
and assigns shall not have the surface right to extract such minerals
as reserved by Martha L. Hunt, in Deed recorded February 26, 1957 as
Document No. 8780 in book 1486, page 533 of Official Records, from
that portion included within the land conveyed by said Deed.
ALSO EXCEPT an undivided one-half interest in all oil, qas,
hydrocarbon substances and other minerals of all kinds whether like or
unlike hydrocarbon below a depth of 500 feet of the surface of the
real property described in Exhibit "An hereto without, however, the
right to enter upon the surface of such real property, as reserved by
Janss Development Co., in Deed recorded December 28, 1971 in book
3901, page 354 of Official Records.
.
.
.
.
13050-5
JHHW:BDQ:rms 11/19/85
12/17 /85
:mds 12/22/85
Zl657
AFTER RECORDATION PLEASE RETURN TO:
Jones Hall Hlll & White,
A Professlonal Law Corporat1on
Four Embarcadero Center, Suite 1950
San Francisco, CA 94111
Attention: Brian O. Quint, Esq.
ASSIGNMENT AGREEMENT
This Assignment Agreement, made and entered into as of thlS 1st day of
Decembers 1985, by and between the CALIFORNIA CITIES FINANCING CORPORATION,
a nonprofit public benefit corporations duly organized and existlng under
and,by virtue of the laws of the State of Cal1fornia ("Lessor"), and FIRST
INTERSTATE BANK OF CALIFORNIA, a banking corporation duly organized and
exist,ng under the laws of the State of California (the IITrusteell);
WITNESSETH THAT, in the joint and mutual exercise of their powerss and
in consideratlon of the mutual covenants herein contained, the partles
hereto recite and agree as follows:
SECTION 1. Recitals.
Section 1.01. lessor and each of the Cities of Delano, Fontana, Santa
Monica and Thousand Oaks (COllectively, the nparticipants'1) have entered
into Lease Agreements, each dated as of the date hereof and recorded
concurrently herewlth (collectively, the IIlease Agreementsll), duplicate
originals of which has been furnished to the Trustee, whereby lessor has
agreed to lease to the Part1cipantss and each of the Participants has agreed
to lease from Lessor, certain improvements to real property (COllectively,
the IIProjects11), in the manner and on the terms set forth in the lease
Agreements.
Section 1.02. Under the lease Agreementss lessor is requ1red to
deposit on the Closing Date, or cause to be deposited with the Trustee on
lts behalf, the aggregate sum of $2,821,786.53 to be credited, held and
apol ied ln accordance with a Trust Agreement dated as of the date hereof
(the lITrust Agreement"), by and among lessor, the Participants and the
Trustee.
Section 1.03. The terms capitalized in this Assignment Agreement but
not defined herein shall have the meanings given to them in the Lease
Agreements or the Trust Agreement.
Section 1.04. Upon execution of the Lease Agreements and the deposlt
of moneys by Lessor wlth respect thereto, the Participants are obligated to
- -"--- -- ---.....-
.
.
.
pay Lease Payments to Lessor, by remitt1ng them to the Trustee. Lessor is
willlng to asslgn and transfer its rlghts under the lease Agreements to the
Trustee for
the beneflt of the Owners of Certlf1cates of Partlcipation, pursuant
to the terms of the Trust Agreement, and in conslderation of such
assignment, the Trustee shall deposit or cause to be deposited in the
various funds established in the Trust Agreement, on behalf of Lessor, the
proceeds of the sale of the Certificates of Participation to the original
purchaser thereof.
Section 1.05. Each of the parties has authority to enter into this
Agreement, and has taken all actions to authorize its officers to enter lnto
it.
SECTION 2. Assignment.
Lessor, for good and valuable consideration, does hereby sell, asslgn
and transfer to the Trustee, for the benefit of the Owners of Certificates
of Participation, all of its right, title and interest 1n, under and to the
r1ghts of the lessor under the lease Agreements, 1ncluding w1thout
limltation, its rlght to receive Lease Payments from the Partlcipants under
the Lease Agreements, its right to receive the proceeds of lnsurance or of
an eminent domain award on the Projects, its right to re-enter and relet the
PrOjects in the event of default by a Participant under its Lease Agreement,
its right to enforce payment of such Lease Payments when due, or otherw1se
protect its interests and enforce its rights under the Lease Agreements In
the event of default by a Participant.
SECTION 3. Invalidity or Unenforceabillty.
In the event of the invalidlty or unenforceability of any of the terms
or conditions hereof, Trustee shall be deemed and lS hereby apPolnted by
Lessor, ltS attorney-in-fact, to act in the name9 place and stead of Lessor
under the Lease Agreements for the benefit of the Owners of Certificates of
Particlpation, and to do and perform every act necessary and proper in the
exercise Of any of such powers as fully as the Lessor might or could do
thereunder.
SECTION 4. Acceptance.
The Trustee hereby accepts such assignment for the purpose of securlng
such payments and rlghts to the Owners of the Certificates of Particlpation
executed and dellvered pursuant to the Trust Agreement, and subject to the
provisions of the Trust Agreement.
SECTION 5. Limitations.
This Agreement shall not confer any rlghts or impose any duties upon
the Trustee beyond those expressly prov1ded in the Trust Agreement.
SECTION 6. Execution in Counterparts. ThlS Agreement may be executed
in several counterparts, each of WhlCh shall be an original and all of which
shall constitute but one and the same instrument.
-2-
.
-.
.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Attest:
By v6'tvv..a:I/Wfvt~
Secretary
CALIFORNIA CITIES FINANCING CORPORATION
By
~-JA~
~- , Presiden~
FIRST INTERSTATE BANK OF CALIFORNIA
By
Assistant Trust Officer
-3-
.
.
.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above wrltten.
CALIFORNIA CITIES FINANCING CORPORATION
By.
President
Attest:
By
Secretary
FIRST INTERSTATE BANK OF CALIFORNIA
By \.RLR~
" I Trust Offl cer
-3-
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STATE OF CALIFORNIA
ss.
COUNTY OF
Ventura
On th~s 26th day of December , ~n the year 1985, before me, the
undersl.gned, a notary publlc, personally appeared OORILL B. t'm.IGHT, personally
known to me (or proved to me on the bas~s of satlsfactory ev~dence) to be the
person who executed the w~th1.n l.nstrurnent as President of the corporat~on
therein named and acknowledged to me that such corporatl.on executed the w~th~n
~nstrument pursuant to l.ts bylaws or a resolut~on of ~ts board of d~rectors.
WrTNESS my hand and offl.cl.a1 seal.
........____~.o.......------~-~""\.- ~
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"e~a.~':~;, 'JC'T~i~T;~tY~~~:6-'~, i,
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Notatlt Pub1~c 1.n and for sa~d County
and [itate
JUdlth A. Nash
Typed Name:
5/11/88
My comm~SSl.on expl.res:
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STATE OF CALIFORNIA
)
) 55.
)
COUNTY OF
Sacramento
On thl.s 24th day of December I l.n the year 1985, before me, the
undersigned, a notary publl.c, personally appeared DANIEL B. HARRISON,
personally known to me (or proved to me on the baSl.S of satl.sfactory eVl.dence)
to be the person who executed the wl.thl.n l.nstrument as Secretary of the
corporat~on therel.n named and acknowledged to me that such corporatl.on
executed the wl.thl.n l.nstrument pursuant to l.ts bylaws or a resolutl.on of l.ts
board of dl.rectors.
WITNESS my hand and offl.cl.al seal.
'e ~~!J
,htWJ-J (ij~
Notary Publl.c l.0 and for sal.d
and State
County
Typed Name:
Lorraine Okabe
My comml.SSl.on expl.res:
Aug. 14, 1989
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STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
)
) SSe
)
0505
On this 30th day of December , in the year 1985, me, the
undersigned, a notary public, personally appeared Robin Rappaport ,
personally known to me (or proved to me on the basis of satlsfactory
evidence) to be the person who executed the within instrument as
a Tru~t Off~cer of the corporation therein named and acknowledged to me
that such corporation executed the within instrument pursuant to its bylaws
or a resolution of its board of directors.
WITNESS my hand and official seal.
I -;. -.-. - -OFF-ICIM-sEAL..-. -I
(1 ,. _\ CATHERINE M SALAZAR
~~HOT"'RY PU8LIC-C...llFOAN.....
:,~; L.A. COUNTY
~MM. EXP. J~NE Z. 1989
----------- ----~----- --...
(i~- ~.
Notary Public
and State
J:~
in and for said County
Typed Name: Catherine M. Salazar
6/2/89
My commission expires:
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12/27/85
Z3188
JHHW:BDQ:GFB
$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 MAILING
I, Glenda F. Bell, certify as follows:
That for and on behalf of the Cities of Delano~ Fontana~ Santa Monica and
Thousand Oaks, and on the date hereof, I caused to be mailed a Report of Final
Sale 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 hereto attached.
Dated: December 30, 1985
/~-~q;
~ \ /"
~",>/~- {4fifl / . ~/::f
/ /Glenda F .He-l1~7'-'!
Project Coqfdi~atar
Jones Hall Hill & White,
A Professional law Corporation
.
REPORT OF FINAL SALE
Exhibit A
NAME OF ISSUER(S):
City of Delano
City of Fontana
City of Santa Monica
City of Thousand Oaks
ISSUE NAME:
.
$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
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13050-
JHHW:BDQ:rms 09/11/85
12/17/85
:mds 12/21/85
:rms 12/24/85
Z1642
NOTICES
All notices to be given under the Trust Agreement shall be in writing
and shall be given by mall to the party entitled thereto at its address set
forth below, or at such address as the party may provlde to the other party
in writing from time to time.
If to the Corporation:
California Cities Financing Corporation
1400 K Street, SUlte 400
Sacramento, Cal1fornia 95814
Attn: Secretary
City of Delano
1015 11th Avenue
Delano, California 93215
Attn: Flnance Director
If to the Lessees:
City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attn: Director of Finance
City of Santa Manica
1685 Main Street
Santa Monica, California 90401
Attn: Director of Flnance
City of Thousand Oaks
4011 West Hillcrest Drive
Thousand Oaks, California 91360
Attn: Finance Director
If to Trustee:
First Interstate Bank of Californla
707 Wilshire Boulevard
Los Angeles, California 90017
Attn: Corporate Trust Dept. (WIO-2)
If to the Insurer:
USF&G Financial Security Company
601 Montgomery Street
San Francisco, California 94111
Attn: General Counsel
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USF&G FINANCIA~
SECURITY COMPAt[l
RAYrt.;)t-.J... C I~:::;_
J. ~:-_ ....r
December 17, 1985
Jonathan D. White
Research Analyst
Merrill Lynch Capital Markets
400 South Hope Street, Suite 2020
Los Angeles, CA 90071-2821
RE: California Cities Financing Corporation
Certificates of Participation 1985 Series E
$2,955,000, Dated December 1, 1985
Dear Jon:
On behalf of United States Fidelity and Guaranty Company (USF&G), and
subject to the following requirements and conditions listed on Exhibits
.C., .C-I. and "0," we will issue a financial guaranty bond (Form FG6)
on the above obligation.
The obligations will mature substantially as shown on the attached
schedule (Exhibit "A"), and the financial guaranty bond will apply to
all maturities unless otherwise noted thereon.
A copy of the Official Statement, the Bond Resolution or Indenture, and
of any Contracts which define the obligation or refer to the financial
guaranty bond must be provided to us not later than 5 business days
before the date of Closing for review and approval by our counsel.
Between now and the Closing there shall not have occurred or come to
the attention of the issuer or underwriter any material omission or
change of fact or law adverse to the interests of USF&G, unless
approved by us in writing. This requirement applies to, but is not
limited to:
(a) financial reports, estimates, forecasts or other financial
information previously supplied to us,
(b) the Official Statement, Bond Resolution or Indenture, Contracts,
Legal Opinions or other legal documents previously supplied to us,
(c) any other omission or change which would cause the documentation
or information previously supplied to us to be untrue or
misleading, or to entitle the purchaser or underwriter of the
bonds to decline to purchase.
- 1',' . ::........,,::....... ~-r:,.--- so.:..\.;.:-...
.:: ~. .:;;::. ::.; .
.-. :.: U5[L"'''' .-,. ~ :Hf~ ....,-
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Jonathan D. White
Merrill Lynch Capital Markets
California Cities Financing Corporation
Certificates of Participation, 1985 Series E
$2,955,000, Dated December 1, 1985
Page 2
You may use the full text of the financial guaranty bond and the
enclosed material (Exhibit WSW) which describes USF&G in your Official
Statement or offering circular. You may use the -B-1w Legend in its
entirety on the form of the Obligation. Any changes to this material,
and any use or publication of other information regarding USF&G or the
financial guaranty bond is subject to our prior written approval.
Please note that our offer to insure is not a representation as to the
suitability of the subject issue for any investor, or as to compliance
w1th any securities or tax laws.
This offer is effective for 60 days from the date of this letter. If
this offer is not accepted and the Closing completed as contemplated
herein and within that period, this offer will expire without liability
to USF&G, its affiliates and their officers, employees and agents. In
connection with the closing we will expect to deliver and receive the
items described on the attached wClosing Requirements" (Exhibit "Cn).
.
Please acknowledge receipt of this letter by signing the enclosed copy
of this letter and returning it to me.
Thank you for the opportunity to respond on this issue.
Yours sincerely,
--g':l~ A"/l.:;j"
-- ymond K. 0 rNeil
Date:
I ;). ( :l ~ ('6>
Acknowledge Receipt
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By: ~~---~~----.
. - ~
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Tl.tle: L. f t-{ r t"Pot:.f. /L-- (
cc:
Mr. Brian Quint, Esq.
Jones, Hall, Hill, & White
Four Embarcadero Center, Suite 1950
San Francisco, CA 94111
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EXHIBIT "A"
MATURITY SCHEDULE
California Cities Financing Corporation
$2,955,000
Certificates of Participation
1985 Series E
Dated December 1, 1985
Due
Amount
Due
Amount
Maturities shall match repayment terms to be approved by USF&G
Financial Security Company, varying form 5 to 20 years, depending
on asset type.
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EXHIBIT "B"
BOND INSURANCE
United States Fidelity and Guaranty Company (USF&G Company) has
issued its Financial Guaranty Bond ("Guaranty") which provides
for the prompt payment of principal and interest on the Insured
Obligations when Due for Payment (as defined in the Guaranty) to
the extent that the paying agent has not received sufficient
funds from the issuer or other Obligor (other than USF&G)
responsible for payment of the Obligations. For specific
information on the coverage provided by USF&G Company reference
should be made to the text of the Guaranty which has been
reproduced in its entirety in this Appendix.
USF&G Company is a wholly owned subsidiary of USF&G Corporation.
In 1984, USF&G Company ranked 12th in net premiums written among
property/casualty insurers in the United States. As of
September 30, 1995, USF&G Company had $834 million in statutory
capital and surplus.
Interested parties should refer to the financial statement in
this Appendix for more detailed financial information on USF&G
Company.
The financial information on USF&G Company set forth in this
Appendix is unaudited, was prepared in accordance with statutory
insurance accounting principles and was certified by officers of
the company as a full, true and correct statement of Assets and
L~abilities as of September 30, 1985.
USF&G Company and its affiliates make no representation about
the contents of the Official Statement, the Insured Obligations
or the advisab11ity of investing in the Insured Obligations.
USF&G Company's role is limited to providing its Guaranty in
the form set forth in this Appendix. For a description of the
Insured Obligations, which may be less than all of the
obligat1ons described in the Official Statement, reference
should be made to the Official Statement.
[FORM OF POLICY]
[FINANCIAL STATEMENT]
A:appendix
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@&~~l~
UNITED STATES FIDELITY AND GUARANTY COMPANY
100 L1ght Street, Balt1ffiore, MD 21202
(301) 547-3000
FINANCIAL GUARANTY BOND
Issuer:
Bond Number:
Obl1gat1ons:
Preffi1um:
Un1ted States Fidelity and Guaranty Company ("USF&G"), a corporation
organ1zed under the laws of Maryland, 1n cons1deration of the premium
pa1d or d1rected to be pa1d and subJect to the terms of th1S Bond, hereby
uncond1t10nally and 1rrevocably agrees, to pay
("PaY1ng Agent"), or its successor as PaY1ng
Agent for the Owners of the Obl1gat1ons descr1bed above, that portlon of
the pr1nc1pal of and 1nterest on the Obl1gat1ons Wh1Ch shall become Due
for Payment but shall be unpald by reason of Nonpayment by the Issuer or
other Obllgor (other than USF&G) respons1ble for payment of the
Obl1gat1ons.
USF&G w111 make such payment through one of its d1sbursing agents
("Insurer's D1sburs1ng Agent") on the date such prlnc1pal or interest
becomes Due for Payment or on the BUS1ness Day next following the day on
Wh1Ch USF&G shall have rece1ved Notice of Nonpayment, wh1chever 1S later.
The Insurer's D1sbursing Agent will disburse to the PaY1ng Agent the
amount of the princ1pal and 1nterest Wh1Ch 1S then Due for Payment but 1S
unpa1d by reason of Nonpayment by the Issuer but only upon recelpt by the
Insurer's Dlsburslng Agent, 1n a form reasonably satlsfactory to lt, of
(1) eVldence of the Owner's rlght to rece1ve such payment, and (11)
eVldence, lncludlng any approprlate 1nstruments of assignment, that all
of the Owner's rlghts to such payment shall thereupon vest in USF&G.
Upon such d1sbursement, USF&G shall become the owner of that portlon of
the Obl1gat10ns as pa1d, lncludlng any appurtenant coupon or rlght to
payment of pr1ncipal or interest on such Obligatlons and shall be fully
subrogated to the Owner's rlght to payment thereof. Untll Issuer or
other obllgor (other than USF&G) shall have pald any amounts 1n arrears
and Due for Payment, USF&G shall be fully subrogated to all of Owner's
r1ght, tltle and lnterest 1n the Obllgations lncludlng, but not 11mlted
to, the rlght to commence and pursue legal proceedlngs ln respect of the
Obllgat10ns and to d1rect any Bond Trustee under an Indenture secur1ng
the Obllgations or slm11ar agent notwlthstand1ng that USF&G has made only
partlal payments on the Obl1gat1ons.
Th1S Bond 1S non-cancellable for any reason. The premlum on thlS Bond lS
not refundable for any reason, lncludlng the payment of the Obl1gatlon
pr10r to ltS maturlty. Th1S Bond does not lnsure aga1nst loss of any
prepayment premlum Wh1Ch may at any tlme be payable w1th respect to any
Obllgatlon.
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@lMN1~~~
As used hereln, the term:
(1) "Owner" means, as to part1cular Obl~gations, the person who, at the
t1rne of Nonpayment, 1S entltled to payment thereof, but does not lnclude
the Issuer or any person whose agreement to pay funds to or on behalf of
the Issuer secures the Obllgatlon.
(11) "Due for Payment" means, when referring to the prlncipal of the
Obllgatlons, the stated maturlty date thereof or the date on wh~ch the
same shall have been duly called for mandatory slnking fund redemptlon
and does not refer to any earller date on WhlCh payment 15 due by reason
of any other call for redernptlon, acceleratlon by reason of default, or
other advancement of maturlty. When referrlng to lnterest on an
Obllgatlon, IIDue for Payment" means the stated date for payment of
lnterest. "Due for Payment" means, when referrlng to the accelerated
payment of unpald prlnclpal ln the event of nonapproprlatlon set forth In
subsectlon (b) of the deflnitlon of "Nonpaymentll, a) the amount of
prlnclpal WhlCh lS scheduled to remain unpald as of the last flEcal
perlod for WhlCh funds were appropriated, or b) if greater, the purchase
prlee requlred to be pald to termlnate the lease.
Prlnclpal and interest prevlously pald by the paY1ng agent, but
thereafter recovered from any Owner to whom such payment was made
pursuant to a final Judgment by any court of competent Jur1sdlct~on
holdlng that such payment constituted a v01dable preference wlthln the
mean1ng of any applicable bankruptcy law ("preferent1al payments"), shall
be deemed Due for Payment hereunder upon receipt by the Insurer's
Dlsburslng Agent of eV1dence of recovery of such funds from the Owner.
(1~~) "Nonpayment" ln respect of an Obligatlon means: a) the fa1lure
(whether due to terminatlon for default or otherw1se) of the Issuer or
other Obllgor responslble for Payment of the Obligatlons to have prov1ded
to the paY1ng agent funds sufflclent for payment in full of all prlnclpal
and 1nterest Due for Payment thereon: or b) nonpayment as a result of
fa1lure, followlng the end of any flscal per1od, for which funds were
approprlated to pay lease payments, to appropriate such funds for the
succeedlng f1scal per10d.
'tNonpayment" also J.ncludes "preferential payments ".
(lV) "Not1ce" ~eans telephonJ.c or telegraphlc notlce to USF&G,
subsequently conflrmed 1n wrlt1ng, or wrltten not1ce to USF&G by
reglstered or cert~f~ed mall, from an Owner or a paY1ng agent for the
Obl~gatlons. Not1ce to USF&G shall be glven or addressed to Ray H.
Brltt, Asst. Secretary, USF&G Company, 100 Light Street, Balt1wore,
Maryland 21202.
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@ r.\ f\n r:;' n rc
@lA1lrJ l( ~lS
(v) "BusJ..ness Day" means any day the Insurer's DisbursJ.ng Agent J..S open
for busJ.ness.
In WJ..tness Whereof, USF&G has caused this Bond to be executed on J.ts
behalf and sJ.gned by J.ts attorneY-J.n-fact whose certJ.fJ.ed power of
attorney J.S attached hereto.
UNITED STATES FIDELITY AND GUARANTY COMPANY
by
Attorney-in-fact
USF&G FINANCIAL SECURITY COMPANY
EffectJ..ve Date:
(countersJ.gnature as requJ.red]
FG6-rnun.le
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UNITED STATES FIDELITY AND GUARANTY COMPANY
(Commenced busl~s August 1,1896)
5:c~'~r
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.~. '. ~
HOME OfFICE
BAl TIMOR E MD
FINANCIAL STATEMENT SEPTEMBER 30,1985
(STATUTORY BASIS)
ASSETS
Cash
Investments
Bonds .
Preferred Stocks
Common Stocks
S 11,488.093
52,575.226,961
29,732.316
1,790,532,389 4.395,491.666
346,454,379
56,299,497
62.734.853
400,837,377
$5,273,305.86~
Net Premiums In Course of Collection.
Real Estate-less accumulated depreCiatIOn
Accrued interest and DIvidends
Other AdmItted Assets
Total Assets
LIABILITIES, CAPITAL STOCK Al\lJ> SURPLUS
Reserves
Losses and Loss Adjustment Expenses
Prenuum Taxes and Operatmg Expenses
Federal and ForeIgn Income Taxes
Unearned Prenuums
$2,936,058,615
55,346,624
-0-
1,106.150.146
DIvidends Payable
Other LIabUIlles
Total LJablbtJes .....
Capital Funds:
Capital Stock-$2 50 par value . .
Surplus.. ..
Surplus Appropnated for Investment F1uctuattons
and Other Contingencies . .
Total CapItal Funds (PolIcyholders' Surplus)
Total LIabilitIes and Capital Funds
$ 70,579,287
816,910,578
(53.870.523)
IDv_ values as pracnbed by rhe Nauonal As5ocUlhon of In5uAnce Cornrmu.oners
Cu/I and Sel:unnc:s ID the _ of S406 143.293 ZS m die ,ua"'meJ>1 o.re dcposw.:l 0$ requu<d by law
.EM:1udc& Prmna_ Ra:ery'" over 90 days old
JACK MOSELEY,
CIurimum of the Board
JAMES M. R,AI.RY, JR..
Stnwr Viet Prendent-Finance
$4,097,555,385
-0-
342,131,138
$4,439,686,523
833.619.342
$5,213,305,865
CIl)' of BaIumorc.
SIaIe of Marylmd
011 Ibe ~lb eIIy of November 198~ beftlft' _. Hamel M Ltttlc. a NoW)' Public m and for lIle C,ry and Stm aforesoud. persona1lY ~ Jock Moselcy and
James M Raley. Jr Owrman of dlI:' Boan! and Sc:noor VICe Pn!51dml Flllamoc. respectlvcly of the Umled Swa Fideln)' and Guanmry Company ..ho bem~ bv me ~vcraJly
duly S'"'<lrn did depose and ..y thal they OR such offia:f5 of the said company and ll1allhe abo.-e and foregomg IS a full uue and co~ S\.OIemenl of the A...,,, and LubdJtlCS
of tbe SaId com.....y. as IlIq appeared upon the: l>ooks ollbe ....d company lIII tbe 30lIl day of Sepu:mber A D 1985
IN WITNESS WHEREOF. J bAYe hereunlo 5CI my band and officUII seal the day and VClII' aforesaid
II
NOTARIAL
SEAL
HARRIETT M U1TLE,
NOlaJ"\' Pubhc
DK 2ll (9.&51
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EXHIBIT B-1
FINANCIAL GUARANTY BOND
United States Fidelity and Guaranty Company, a corporation organized
under the laws of Maryland, has issued its Financial Guaranty Bond No.
(the Guaranty) guarantying the payment of the
principal of and interest on this Obligation when Due for Payment (as
defined in said Financial Guaranty Bondl. Reference is made to the
Guaranty for the complete provisions thereof. All payments required to
be made under the Guaranty shall be made in accordance with provisions
thereof.
EXHIBIT B-2
.
INFORMATION CONCERNING USF&G FINANCIAL GUARANTY BOND
Payment of principal and interest on the Obligations when Due for
Payment (as defined in the Financial Guaranty Bond) will be guaranteed
by a Financial Guaranty Bond to be issued, simultaneously with the
delivery of the Obligations, by United States Fidelity and Guaranty
Company ("USF&G Company"). (See Appendix - for a copy of the Financial
Guaranty Bond).
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EXHIBIT "e"
CLOSING REQUIREMENTS CHECKLIST
California Cities Financing Corporation
$2,955,000
Certificates of Participation
1985 Series E
Dated December 1, 1985
[The items checked are applicable to this transaction.]
x
At the Closing we will furnish to Bond Counsel the following items:
Executed Financial Guaranty Bond (wGuaranty Bond").
x
x
x
Executed Power of Attorney with respect to the Guaranty Bond.
Opinion of USF&G's Counsel on enforceability of the Guaranty
Bond.
At the Closing, Bond Counsel will furnish to us the following items:
Receipt for premium due and payable at Closing.
x
x
x
x
x
x
x
Guaranty Bond Premium in the amount of 1.0% of gross total
principal and interest payments on Obligations as of the
Closing payable in accordance with the invoice to be sent
under separate cover. The issuer will pay Standard & Poorls
Corporation rating fees.
Final payment schedule on the Obligation.
Two executed sets of the:
Bond Resolution or Indenture
All legal opinions in the transaction or reliance letters
roust be addressed to and delivered to USF&G
Contracts which define the obligation
Six sets of the Official Statement are required
other: Certificates of Essential Use
Form of Acceptance Certificate
Assignment Agreement
Resolutions of Participating Entities
Leases
Lease Payment Schedules
.
EXHIBIT C-1
AGREEMENT CONCERNING ISSUER'S FINANCIAL STATEMENTS
California Cities Financing Corporation
$2,955,000
Certificates of Participation
1985 series E
Dated December 1, 1985
I, , the of
("Issuer") do hereby certify that I am duly elected, qualified and
authorized to execute this agreement.
In consideration of United States Fidelity & Guaranty Company's
("USF&G") issuance of financial guaranty bond # for
("Issue"), Issuer agrees during the term of the
Issue to send to:
USF&G Financial Security Company
601 Montgomery Street, Suite 1410
San Francisco, CA 94111
Attention: President
.
a copy of each aud1ted annual financial statement of Issuer within 30
days after its acceptance by Issuer.
In Witness Whereof, this Agreement has been duly executed this
day of , 19
ISSUER
By:
Title:
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EXHIBIT -On
SPECIAL CONDITIONS
California Cities Financing Corporation
$2,955 000
Certificates of Participation
1985 Series E
Dated December 1, 1985
1. The Certificates of Substantial Completion for all the equipment
should be received by Trustee from each of the Lessees prior to
when funded interest for each Lessee is exhausted. If not, the
pro-rata portion of Certificates is subject to mandatory
redemption.
2. The individual components of the leases should be accepted by the
Lessee prior to the release of the corresponding funds from the
Acquisition Fund.
3. If the lease is prepaid, a pro-rate share of the issue must be
redeemable. The prepayment schedule must cover the non-asset costs
if investment income is not clearly sufficient.
4. As of Closing, the lease payments from the cities should be
ass~gned to the Trustee. In the event of default, the equipment
should be ava1lable to the Trustee for resale and the real property
should be available to be re-Ieased.
5. Modifications of the equipment that jeopardize warranties on the
equipment should not be permitted.
6. Participants must Covenant to maintain the equipment in good
working order.
7. Self insurance by a Participant must be backed by a dedicated
reserve fund in an amount equal to the greater of replacement cost
or pro-rata certificates outstanding, and such reserve fund shall
be assigned/payable to the Trustee.
8. Investment Agreements, and Providers thereof as Permitted
Investments, are subject to USF&G prior approval.
9. All equipment purchased from proceeds must be new.
10. Physical loss insurance shall be provided and maintained as
follows:
(a) Each building constructed improved or equipped from proceeds
of the issue must be covered to its full insurable value
against loss by fire, extended coverage hazards, vandalism,
malicious mischief and if appropriate, boiler explosion or
flood.
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EXHIBIT "0"
SPECIAL CONDITIONS
California Cities Financing Corporation
$2,955,000 Certificates of Participation
1985 Series E, Dated December 1, 1985
Page 2
(b) Each such building shall also be insured to its full insurable
value (less a deductible of not to exceed 10% thereof) against
loss by earthquake.
(c) Insurance on any building shall cover loss to installed or
affixed equipment, from the same hazards.
(d) Portable equipment, not regularly installed in a building
shall be insured to full insurable value against loss due to
fire, theft, collision, or vandalism.
(e) Any of the above insurance requirements may be met through a
funded self-insurance reserve approved by USF&G.
11. With respect to any building or real estate acquired, constructed
or improved with proceeds of the issue, the lease term for the
benefit of the bondholders (and USF&G) must upon any event of
default extend to the greater of the presently scheduled
term~nation or 10-years from the date of default.
12. Fontana and Thousand Oaks are required to maintain earthquake
insurance equal to replacement value. (10% maximum deductible.)
13. The cit~es included in this transaction will be Delano, Fontana,
Santa Monica and Thousand Oaks.
14. An Indemnity Agreement is not an alternative for obtaining BUS1ness
Interrupt~on Insurance for at least one year on all leases.
.
.
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USF&G STANDARD PACKAGE
'1'0: Issuer, Nanaging Unden...r 1 Ler, Bond Counsel and
Underwriter's Counsel
RE: Preparation of Financing IJocuments for USF&G
Insured Issues
The attached materials have been prepared to assist you in
the preparation of documents for your USF&G insured Issue.
If you have any questions, please call: Nancy Cherney, Esg
(4lS) 392-4896.
USF&G Consent Required to changes to the Indenture
and exercise of Remedjes~ usr&G as Imputed Owner of
the Insured Bonds {Exlnbi t fl.} .
Permitted Investments shull be linuted to those
described in Exhibit 13.
Defeasance Prav is ions {Exlllbi t c} .
Description of usr&G fin<lllCliJl lJU<lrilllty !Jnnd
and payment procedures for Heg~sLered 13011uS (Exhibit
D) .
Trustee Related Prov is ions (Exlllbi t E) .
Insurance Requirements (EXJl1bl. t F) .
.
.
.
EXH UHT 1\
Sect~on
Consent Required.
Consent of USF&G where Bondllolder
USF&G shall be deemed to be the holder of the bonds
insured by USF&G: (i) at all t1lneS for the purpose of the
execution and delivery of R SupplemclltHl Jndpnture or any
amendment, change or mUl\1fJxatiol\ of tl\0 (idplll1 ry <1.ny
underlying agreements) or the in i tiEl tion by bolltlllOluers of
any action to be undertaken by the Trustee at the
Bondholder's request, which under this Indenture (or under
such underlying documents requlres the written approval or
consent of or can be initiated by the holders of a
ma)Orlty {_* percent) in aggregate pr1ncipal amount of the
Bonds at the time outstanding and (ii) following an event of
Default for all other purposes.
(*) Insert applicable percentage from the Indenture.
.
.
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eXHIBIT B
"Investment Obliga tlOllS tI llleallS LIllY of the follm'Hng:
(a) dJ.rect obligatJ.ol1s of (incltahng obJigatlollS issued
or held in book entry form on the books of the Dep;'\rtment of
the Treasury of the United States of l\merica), or obligatlons
the princJ.pal of and interest on wInch are unconditionally
guaranteed by the United States of i\merica;
(b) bonds, debentures or notes or other evidence of
indebtedness payable in cash issued by anyone or a
combina tion of any of the following feele rn] ilgenc iee:; \.;!Jo5e
obligations represent full faith iJnd credlL o[ U\(' United
States of America: Export Import Bank of the Unitell States,
Federal Financing Bank, Federal HousIng l\dJtllllistration,
Haritime Administration, PublJ.c Housing l\uthority, Government
National Mortgage Associatlon.
(c) certificates of deposit properly secured ill all
times, by collateral securJ_ ty de c;cr ll)ed in I i1) and (b) above
actually delivered to Trustee. Such ngreements are only
acceptable with COlHnterc1a1 banks, savlngs and 10,)115
associatlo11s, and mutual savings banks.
(d) the followlng investments fully ll1sured by the
Federal Deposit Insurance Corporation, or the Federal Savings
and Loan Insurance Corporation: (aJ certificates of deposit,
(b) savings accounts, or (c) deposit accounts, of a bank,
savings and loan associatlons, and mutual savlIlgs banks.
(e) Investments Agreements approved by USF&G.
I f 'Trustee inves ts in book en try secur 1 ties, it
must have an account with the Federal Heserve Bank (New York)
or an account with a clpilr;nq corpuriltHJI1 at" dlilll1 of
clear ing corpora tions winch has <:Ill C1CCUUIl L \-0'1 Lh Ll1e l'ederal
Reserve Bank (New York}.
The value of the above inves tmen ts slwll be de lerrnined
as provided in value below.
.
.
.
EXHIBI'!' B (con t t d)
"Value, as of any pnrticuli1r lllll("l (")f dptcnnilliltiol1,
means the value of any investments shall be calculated as
follows:
(a) as to investments the b \ (l "Bel i1.sl:r.:'c.1 pn c~s o[ \'l/ld eh
are published on a regular basis in Tile ~'~u.l.:! S Lree L Journal
(or, if not there, then in The ne\v York Tllnes': the a,.,erage
of the bid and asked pricesfor r::;uc~nvestl1lcllts so published
on or most recently pr.lor to such tIme of determillClLion;
(b) as to investments the bid and asked prices of which
are not published on a regular basis In The \'~all Street
Journal or The Ne\" York Times): the average';idprJceat
such tlme of determination for such investments by any two
nationally recognized government securities dealers (selected
by the Trustee in its absolute discretion) at the tlme making
a market in such investments;
(c) as to certificates of clpposit, savj Ilgs FlCCQUnts or
deposit accounts: the face amount thereof, plus accrued
interest; and
(d) as to any investment not specifjed "uove: the
value thereof establisllec1 by priur agreement between the
Issuer, the Trustee and USF&G.
If more than one provision of tIns definItion of "value"
shall apply at any tIme to RUY parLlculClr investment, the
value thereof at such time shall be deternUlled ill accorda.nce
wIth the provision establlSh.1.ng the lowest value [or such
investment.
.
.
.
EXlllBIT C
Defeasance
Defeasance. II In the even t tha t the pr incipa 1 emu
redemption price, if applicable, and Ul terest due on the
bonds and coupon shall be paid by USF&G pursuant to a
financial guaranty bond referred to in Section hereof,
the assignment and pledge of the Trust Estate and all
covenants, agreements and other ollliqatlons o[ the Issuer- to
the Bondholders shall continue to exist and USF&G shall be
subrogated to the rights of such Bondholderslt.
-,
.
.
.
EXIIIBI'l' D
REGISTERED BUND PAYMENT
Section . COllccrni JIll Lite f'lll<l.llci<ll G1l0~_~_ty
nand. (1\) 1\s long as th(>~llailclai-Guf;ri1llty-I~()llli~h,dl be ill
full force and effect, the Issuer and the Trustee agree to
comply with the following provisions:
(a) if five (5) days prior to an Interest Payment Date
the Trustee determines that there will be insufficient funds
In the Funds and Accounts to pCly the principi11 of or int,=rest
on the Bonds on such Interest P<l.Ylllent Oatf:', the 'I'rtl",;tee shall
so noti fy USF&G. Such notice shall spec ~ fy the iJIllOUll t 0 f the
anticipated deficiency, the Bonds to wId ch suell defIciency is
appllcable and whether SUCII Bonds will be deficient as to
prl.llcipal or interest, or boLh.
(b) the Trustee shall, after giving notice to USF&G as
provided in (a) above, make available to llSF'&f~ and i Ls
Insurers disburs ing agen t (n Insure r 's D isIJu r <; lng i\yr>1I t"), the
registration books of the Issuer maIntaIned by the Trustee,
and all records relating to the Funds and l\ccounts maIntained
under this Indenture.
(c) the Trustee shall provlde USF&G and Insurer's
Dlsbursing Agent with a list of registered owners of Bonds
entitled to receive principal or interest payments frnm USF&G
under the terms of the Flnancial Guaranty lJol1d, Rnd shall
make arrangements Wl th Insurer IS lJ1sburSll\g l\geL~ t (1) to ma 11
checks or drafts to the regIstered owners of Bonds entltled
to receive full or partial interest payments [rom USF&G, and
(ii) to pay princlpal upon Bonds surrendered to ]nsurer's
Disbursing Agent by the registered owners of 13(~llds onti tIed
to receive full or partial principal payments frolll USF&G.
ld) the Trustee shall, at the time It provides notice
to USF&G pursuant to ta) above, notlfy reglstered owners of
bonds entitled to receive the payment of princlpal or
lnterest thereon from USf'&G (i) ClS to the [act o[ such
entitlement, (iU that USF&G will remit to them Cll1 or a part
of the interest payments next coming due, (lii) that should
they be entitled to receive full paymellt of prlnclp~l from
USF&G they must tender thelr Bonuc::; (a lanq \V'l [-h Cl Conn of
transfer of t~tle thereto) for payment t~ Insurer's
Disbursing Agent and not the 'l'rus tee. and (i v) tlw L should
they be entitled to rece1ve partinl payment nf prulcJpal [rom
USF&G they must tender their Bonds for pu}"mellt ther~Qn first
to the Trustee, who shall note 01\ such Bonds the ~'OrLF)ll of
the prInCIpal paid by the Trustpe, and then, Cl to/lG '.alll i1
form of transfer of titl,~ thC'reLn, tC' USLr:.G, ~;h.!.cll ,,'111 Lhe'l
pay the unpaid portion of prJ..llclpal.
.
.
.
EXllIBIT D (Cont'd)
(eJ USF&G shall, if it makes payment o[ principal of or
interest on Bonds, become subrogated to the rights of the
recipients of such payments in accordance with the tRrJn<; of
the Financial Guaranty Bond, and to evidence ">uch ,,>ubrogatioH
(i) in the case of subrogation as to claims [or past due
interest, the Trustee shall note USFF.G's rights as subrogee
on the registration books of the Issuer maintninecl by the
'l'rustee upon receipt from USF&G of proof of the pilyment of
interest thereon to the registered owners of the Bonds, and
(ii) in the case of subrogation as to claims [or past due
principal, the Trustee shall note USF&G's.riqhts 'IS subrogee
on the registration books of the Issuer maintrtineu by the
'l'rustee upon surrender of the Bonds by the reg is tererl owners
thereof together with proof of the payment of principal
thereof.
.
.
.
EXHIBIT E
TRUSTEE
1. The Trustee may be removed at any time, at tho request of
USF&G, for any breach of the Trust set forth herein.
2. Every successor Trustee appolnted pursuant to the
provisions of tins section shall: (a) be a trust company
or bank ~n good stand~ng located in or lncorporated under
the laws of the State where Issuer is located, (b) be
duly authorlzed to exerClse trust powers and (~) be
subJect to exam~na Lion by fede ra 1 or s ta te au tllor 1 ty, (d I
and have a reported capltal and surplus of not less than
$75,000,000.
.
.
.
EXIIl 13 1 '1' F
INSURl\NCE REQlJIRENEN'l'S
At all t1mes while Bonds are outstandIng the Issuer shall
carry the folloWIng types of insur.Jllce all the ProJect:
1. Property Insurance (coverIng earthquake and all
hazards) .
2. Llabillty Insurance.
3. Business Interruption Insurance for two years.
.
The property insurance must be In an amount equal to the
greater of Replacement value of the ProJect or sufflclent to
redeem the Bonds In the event of total destruction and an
electlon not to rebuIld.
.
.
.
.
~TNITED STATES FIDELITY AND GUARANTY COMPANY
00 L1ght Street, Baltimore, MD 21202
(301) 547-3000
FINANCIAL GUARANTY BOND
Issuer: California Cities F1nancial
Corporation
Bond Number: 99-0110-00022-86
Obligations: $2,915,000
Certificates of Participation
1985 Series E
Premium: $40,501.00
United States Fidelity and Guaranty Company ("USF&G"), a corporation
organized under the laws of Maryland, in consideration of the premium
paid or directed to be paid and subject to the terms of this Bond, hereby
unconditionally and irrevocably agrees, to pay First Interstate Bank of
California ("Paying Agent"), or its successor as Paying Agent for the
Owners of the Obligations described above, that portion of the principal
of and interest on the Obligations which shall become Due for Payment but
shall be unpaid by reason of Nonpayment by the Issuer or other Ob11gor
(other than USF&G) respons1ble for payment of the Obligations.
USF&G will make such payment through one of its disbursing agents
("Insurer's Disbursing Agent") on the date such principal or interest
,ecomes Due for Payment or on the Business Day next following the day on
which USF&G shall have received Notice of Nonpayment, whichever is later.
The Insurer's Disbursing Agent will disburse to the Paying Agent the
amount of the princ~pal and interest wh1ch is then Due for Payment but is
unpaid by reason of Nonpayment by the Issuer but only upon receipt by the
Insurer's Disbursing Agent, in a form reasonably satisfactory to it, of
(1) evidence of the Owner's right to receive such payment, and (ii)
evidence, including any appropriate instruments of assignment, that all
of the Owner's rights to such payment shall thereupon vest in USF&G.
Upon such disbursement, USF&G shall become the owner of that portion of
the Obligations as paid, including any appurtenant coupon or right to
payment of principal or ~nterest on such Obligat1ons and shall be fully
subrogated to the Owner's right to payment thereof. Unt11 Issuer or
other obl1gor (other than USF&G) shall have pa1d any amounts in arrears
and Due for Payment, USF&G shall be fully subrogated to all of Owner's
r1ght, title and 1nterest in the Obl1gations including, but not lim1ted
to, the right to commence and pursue legal proceedings in respect of the
Obligations and to direct any Bond Trustee under an Indenture securing
the Obligations or similar agent notw1thstanding that USF&G has made only
partial payments on the Obligat10ns.
.
.
.
This Bond is non-cancellable for any reason. The premium on this Bond is
not refundable for any reason, including the payment of the Obligation
prior to 1ts maturity. This Bond does not insure against loss of any
prepayment premium which may at any time he payable w1th respect to any
Obligation.
As used hereln, the term:
(i) "Owner" means, as to particular Obligations, the person who, at the
time of Nonpayment, is entitled to payment thereof, but does not include
the Issuer or any person whose agreement to pay funds to or on behalf of
the Issuer secures the Obligation.
(ii) "Due for Payment" means, when referring to the principal of the
Obligat1ons, the stated maturity date thereof or the date on which the
same shall have been duly called for mandatory sinklng fund redemption
and does not refer to any earlier date on which payment is due by reason
of any other call for redemption, acceleration by reason of default, or
other advancement of maturity. When referring to interest on an
Obligation, "Due for Payment" means the stated date for payment of
interest. "Due for Payment" means, when referring to the accelerated
payment of unpald principal in the event of nonappropriation set forth in
subsection (b) of the definition of "Nonpayment", a) the amount of
'rincipal which is scheduled to remain unpaid as of the last fiscal
~eriod for which funds were approprlated, or b) if greater, the purchase
price required to be paid to terminate the lease.
Princlpal and interest previously paid by the paying agent, but
thereafter recovered from any Owner to whom such payment was made
pursuant to a final judgment by any court of competent jurisdiction
holding that such payment constituted a voidable preference within the
meaning of any applicable bankruptcy law ("preferential payments"), shall
be deemed Due for Payment hereunder upon receipt by the Insurer's
Disbursing Agent of evidence of recovery of such funds from the OWner.
(i~i) "Nonpaymentft in respect of an Obligation means: a) the fa11ure
(whether due to termination for default or otherwise) of the Issuer or
other Obligor responsible for Payment of the Obl~gations to have provided
to the paY1ng agent funds sufficient for payment in full of all principal
and interest Due for Payment thereon; or b) nonpayment as a result of
failure, following the end of any fiscal period, for which funds were
appropriated to pay lease payments, to appropriate such funds for the
succeeding f1scal period.
"Nonpayment" also includes "preferential payments".
.
(iv) "Notice" means telephonic or telegraphic notice to USF&G,
subsequently confirmed in writing, or written notice to USF&G by
registered or certified mail, from an Owner or a paying agent for the
Obligations. Notice to USF&G shall be g~ven or addressed to Ray H.
Britt, Asst. Secretary, USF&G Company, 100 Light Street, Baltimore,
Maryland 21202.
(v) "Business Day" means any day the Insurer's Disbursing Agent ~s open
for business.
In Witness Whereof, USF&G has caused this Bond to be executed on its
behalf and signed by its attorney-in-fact whose certified power of
attorney is attached hereto.
UNITED STATES FIDELITY AND GUARANTY COMPANY
by ~~ -e: ~ Attorney-in-fact
~/
USF&G FINANCIAL SECURITY COMPANY
~ ffective Date: December 30, 1985
[countersignature as required]
FG6-mun.le
.
.
UNITED STATES FIDELITY AND GUARANTY COMPANY
P. O. Box 1138
BALTIMORE. MARYLAND 21203
LEGAL DEPARTMENT
December 30, 1985
California Cities Financing Corporation
1400 K Street, Suite 400
Sacramento, CA 95814
RE: legal Opinion -- Financial Guaranty Bond
$3,580,000 Certificates of Participation
California. Cities Financing Corporation,
1985 Series E
Ladies and GentlE'J1PTl:
.
I am Counsel for United States Fidelity and Guaranty ~any ("USF&G"), a
Naryland corporation, and I have been requested to give this opinion in
connection with the Firumcial Gm:l'r:mty Bond, the fonn of which is
attached hereto as Exlubit A, g'lBr.anteeing the above referenced
Certificates. In this connection, I am f:'lTT1; liar with and have reviewed
the Articles of Incorporation of USF&G, as arrended to date, and the
By- Laws of USF&G on the date hereof as in force and e:x-mni Tled the
Financial Gll::lTanty Bond as well as other corporate proceedings of USF&G
and such other doCl.llIeI1.ts and records as I have deaned necessary and
relevant as a basis for my opinion.
Based on the foregoing, and having regard to the legal considerations
wluch I have deemed relevant, I aI:l of the following opinions:
1. USF&G is a Maryland insurance culipany, duly organized, validly
existing and holding a current certificate of authority to transact
insurance business under the laws of the state of its incorporation,
is duly qualified to do business in all Jurisdictions, if any I Were
the nature of its operations legally requires such qualification,
and has the corporate power to issue and deliver and perform its
obligations under the Financial Gn;:lranty Bond.
2. The execution, delivery and perfonnance by USF&G of the Financl.al
Guaranty Bond has been duly authorized by all necessary corporate
action on the part of USF&G and under present law does not and Wl.ll
not contravene any law or govei1lliental regulation or order presently
bmding on USF&G or the Articles of Incorporation or the By-Laws of
USF&G, or contravene any provision of or constitute a default under
e.
-2-
.
any indenture, contract or other instrument to which USF&G is a
party or by which USF&G is bound.
3. The execution, delivery and perfonnance by USF&G of the Financial
(}L<lranty Bond do not require the consent or approval of, the giving
of notice to, the registration with, or the taking of other action
in respect of any federal, state or other gcNE:il.-lil-ental agency or
authority which has not previously been effected.
4. The Financial Guaranty Bond has been duly issued by USF&G and
constitutes the legal, valid and binding obligation of USF&G,
enforceable against USF&G in accordance with its terms, except as
the enfor('p~hility thereof may be 1 imi ted by i) applicable bank-
ruptcy, insolvency or other simi lar laws affecting the enforcPJllPTlt
of creditors I rights generally; or ii) general principles of equity
(regardless of whether enforcement is sought in a proceeding in
equity or at law).
.
Very truly yours,
7l~ T~t-?~
Brian A. R!Mland
Assistant Secretary-Counsel
BAR; ks
Attaclment
.
.
,
.
UNITED STATES FIDELITY AND GUARANTY COMPANY
100 Light Street, Baltimore, MD 21202
(301) 547-3000
FINANCIAL GUARANTY BOND
Issuer:
Bond Number:
Obligat~ons:
Premium:
United States Fidelity and Guaranty Company (hUSF&G"), a corporation
organ~zed under the laws of Maryland, in consideration of the prem~um
pa~d or directed to be paid and sUbJect to the terms of this Bond, hereby
unconditionally and irrevocably agrees, to pay
("Paying Agent"), or its successor as Paying
Agent for the Owners of the Obl~gat10ns described above, that portion of
the principal of and interest on the Obligat~ons which shall become Due
for Payment but shall be unpaid by reason of Nonpayment by the Issuer or
other Obligor (other than USF&G) responsible for payment of the
OblJ.gat~ons .
USF&G will make such payment through one of its disbursing agents
("Insurer's Disbursing Agentll) on the date such principal or ~nterest
becomes Due for Payment or on the Business Day next following the day on
which USF&G shall have received Notice of Nonpayment, whichever is later.
The lnsurer's Disburs1ng Agent will disburse to the Paying Agent the
amount of the princ~pal and interest wh~ch is then Due for Payment but 1S
unpa1d by reason of Nonpayment by the Issuer but only upon receipt by the
Insurer's Disbursing Agent, in a form reasonably satisfactory to it, of
(1) eV1dence of the Owner's right to rece~ve such payment, and (1i)
eV1dence, includ1ng any appropriate instruments of assignment, that all
of the Owner's r1ghts to such payment shall thereupon vest 1n USF&G.
Upon such disbursement, USF&G shall become the owner of that portion of
the Obligations as paid, including any appurtenant coupon or r1ght to
payment of principal or interest on such Obl1gations and shall be fully
subrogated to the Owner's right to payment thereof. Until Issuer or
other obligor (other than USF&G) shall have pa1d any amounts in arrears
and Due for Payment, USF&G shall be fully subrogated to all of Owner's
right, title and 1nterest 1n the Obligations includ1ng, but not l~m~ted
to, the r~ght to commence and pursue legal proceed1ngs in respect of the
Obligations and to direct any Bond Trustee under an Indenture secur~ng
the Obligat~ons or similar agent notw1thstanding that USF&G has made only
part1al payments on the Ob11gat~ons.
This Bond is non-cancellable for any reason. The premlum on this Bond 15
not refundable for any reason, 1nclud1ng the payment of the Ob11gation
prior to its matur1ty. Th15 Bond does not insure aga1nst loss of any
prepayment prem1um which may at any t1me be payable with respect to any
Obligation.
.
.-
-=
.-
As used herein, the term:
(i) "Owner" means, as to particular Obligations, the person who, at the
time of Nonpayment, is entitled to payment thereof, but does not include
the Issuer or any person whose agreement to pay funds to or on behalf of
the Issuer secures the Obligation.
(ii) "Due for Payment" means, when referring to the principal of the
Obligations, the stated maturity date thereof or the date on which the
same shall have been duly called for mandatory sinking fund redemption
and does not refer to any earl~er date on which payment ~s due by reason
of any other call for redemption, acceleration by reason of default, or
other advancement of maturity. When referring to ~nterest on an
Obl~gation, "Due for Payment" means the stated date for payment of
~nterest. "Due for Payment" means, when referring to the accelerated
payment of unpaid princ1pal ~n the event of nonappropriation set forth ~n
subsection (b) of the definit~on of "Nonpayment", a) the amount of
pr~ncipal wh~ch 1S scheduled to remain unpa~d as of the last fiscal
per~od for which funds were appropr~ated, or b} if greater, the purchase
pr~ce required to be pa1d to terminate the lease.
Principal and interest prev10usly paid by the paying agent, but
thereafter recovered from any Owner to whom such payment was made
pursuant to a f~nal Judgment by any court of competent Jurisdict10n
hold~ng that such payment constituted a voidable preference within the
meaning of any applicable bankruptcy law ("preferential payments"), shall
be deemed Due for Payment hereunder upon receipt by the Insurer's
D1sburs~ng Agent of ev~dence of recovery of such funds from the Owner.
(1i1) "Nonpayment" ~n respect of an Obligat~on means: a) the failure
(whether due to termination for default or otherwise) of the Issuer or
other Obl~gor responsible for Payment of the Obligations to have provided
to the pay~ng agent funds suffic~ent for payment in full of all princ~pal
and 1nterest Due for Payment thereon~ or b) nonpayment as a result of
fa1lure, following the end of any fiscal period, for Wh1Ch funds were
appropr1ated to pay lease payments, to appropr~ate such funds for the
succeeding f~scal period.
"Nonpayment" also ~ncludes "preferential payments".
(~v) "Notice" means telephon1c or telegraph~c notice to USF&G,
subsequently conf1rmed 1n wr1t1ng, or wr~tten notice to USF&G by
registered or cert1fied mail, from an Owner or a paying agent for the
Obl1gat1ons. Notice to USF&G shall be g1ven or addressed to Ray H.
Br1tt, Asst. Secretary, USF&G Company, 100 L1ght Street, Baltimore,
Maryland 21202.
.
.
.
(vI "Business Day" means any day the Insurer's Disbursing Agent is open
for business.
In Witness Whereof, USF&G has caused this Bond to be executed on its
behalf and signed by its attorney-in-fact whose certified power of
attorney is attached hereto.
UNITED STATES FIDELITY AND GUARANTY COMPANY
by
Attorney-in-fact
USF&G FINANCIAL SECURITY COMPANY
Effective Date:
[countersignature as required]
FG6-rnun.le
....:."'
.;t..~
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!::;g 6t"0'Y' T1.xd,,}0 .<vp t{:j.21 Irq1 "PJO""'H JO
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