HomeMy WebLinkAboutMINUTES - 08051997 - C126 TO: BOARD OF SUPERVISORS
p Contra
FROM: Phil Batchelor, County Administrator =�
Costa
c. .: �.k County
DATE: July 30, 1997
A COON
SUBJECT: REFUNDING OF 1991 CERTIFICATES OF PARTICIPATION
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
1. ADOPT resolution approving forms of the documents and issuance of
the Official Statement for refunding of the County 1991 Certificates of
Participation. Resolution 97/404.
2. Authorize the Chair of the Board, the County Administrator and other
appropriate officials to execute the documents for the refunding.
3. Authorize the County Administrator or his designee to execute the
agreements for Bond Counsel, Financial Advisor, Trustee and Escrow
Verification Agent for the refunding.
FINANCIAL IMPACT:
The refunding of the 1991 Certificates of Participation is proceeding forward
as previously authorized by the Board. The savings associated with the
decrease in interest rate from the old issue to the new refunding is expected
to provide a minimum of five percent savings in debt service costs. The
estimated net present value savings will amount to $1.5 to $2.0 million over
the remaining term of the issue.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON AUgLSt 5. 1 QQ7 APPROVED AS RECOMMENDED . OTHER
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT__A_ AND CORRECT COPY OF AN ACTION TAKEN
AYES: _NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERViSpft.S ON THE DATE SHOWN.
CC: Auditor-Controller
Treasurer-Tax Collector ATTESTED
01 A, I A+
County Counsel L B
PHIA ELOR,CLER OF THE BOARD OF,
Orrick, Herrigton &Sutcliffe SUPER vIs RS AND COUNTY ADMINISTRATOR
C. M. DeCrinis&Co.
M382 (10/88)
BY ,DEPUTY
BACKGROUND:
The Board previously authorized the refunding of the 1991 Certificates of
Participation and directed the County Administrator to proceed with the
necessary arrangements to complete the issue. Underwriters were selected
on a competitive basis and the Bond Counsel has prepared the necessary
documents for sale of the issue. The issue is being sold using the County
Public Financing Authority. The issue will be insured by the same bond
insurance company that provided insurance on the original issue, (AMBAC).
The bond insurance will allow for a rating of AAA for the issue, although
ratings will also be obtained from Moody's and Standard and Poor's Company
to assure greater acceptance in the market. The documents have been
prepared for the issue and are on file with the Clerk of the Board. A final
report on the outcome of the sale of the issue will be given to the Board after
the closing in September.
-2-
: is
RESOLUTION NO. 97/404
OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF CONTRA COSTA
CALIFORNIA
RESOLUTION APPROVING FORMS OF AND EXECUTION OF A SITE LEASE
(CAPITAL PROJECTS PROGRAM), A FACILITY LEASE (CAPITAL PROJECTS
PROGRAM, A TRUST AGREEMENT, A LETTER OF INSTRUCTIONS, A CONTRACT
OF PURCHASE AND A CONTINUING DISCLOSURE AGREEMENT; APPROVING
EXECUTION AND DELIVERY OF CERTIFICATES OF PARTICIPATION (CAPITAL
PROJECTS PROGRAM), SERIES OF 1997; APPROVING FORM OF AND
DISTRIBUTION OF OFFICIAL STATEMENT FOR SAID CERTIFICATES OF.
PARTICIPATION; ELECTING TO GUARANTEE RENTAL PAYMENTS WITH MOTOR
VEHICLE LICENSE FEES; AND AUTHORIZING TAKING OF NECESSARY ACTIONS
AND EXECUTION OF NECESSARY CERTIFICATES.
WHEREAS, this Board of Supervisors has heretofore determined that it would
be in the best interest of the County of Contra Costa (the "County") to proceed with a
certificate of participation financing for the refunding of outstanding Certificates of
Participation (1991 County Buildings Acquisition Project) (the "Prior Certificates"), which
were issued to finance the acquisition and renovation of certain county administration
facilities, and to finance the acquisition of certain additional capital improvements;
WHEREAS, the County of Contra Costa Financing Authority (the
"Authority") has been created for the purpose, among others, of assisting in the financing of
public capital improvements;
WHEREAS, it is proposed that the County enter into a "Site Lease (Capital
Projects Program)" (the "Site Lease") and a "Facility Lease (Capital Projects Program)" (the
"Facility Lease") with the Authority;
WHEREAS, under the Facility Lease, the County would be obligated to make
base rental payments to the Authority;
SF2-77525.3
WHEREAS, it is proposed that all rights to receive such base rental payments
will be assigned without recourse by the-Authority to First Trust of California, National
Association; as trustee (the "Trustee"), pursuant to an agreement, entitled "Assignment
Agreement (the "Assignment Agreement");
WHEREAS, it is further proposed that the Authority, the County and the
Trustee enter into a trust agreement (the "Trust Agreement"), pursuant to which said trustee
will execute and deliver certificates of participation (the "1997 Certificates") in an amount
equal to the aggregate principal components of such payments, each evidencing and
representing a fractional undivided interest in such payments, and will use the proceeds to
defease the Prior Certificates and finance the acquisition and construction of additional capital
improvements;
WHEREAS, this Board of Supervisors hereby determines that it would be in
the best interest of the County for the Authority and the County to enter into an agreement
entitled "Contract of Purchase" (the "Purchase Contract"), pursuant to which PaineWebber
Incorporated and Morgan Stanley & Co. Incorporated (the "Underwriters") will purchase the
1997 Certificates;
WHEREAS, a form of Continuing Disclosure Agreement (the "Continuing
Disclosure Agreement") is on file with the Clerk of the Board of Supervisors;
WHEREAS, a form of Official Statement describing the 1997 Certificates is
on file with the Clerk of the Board of Supervisors;
WHEREAS, this Board has been presented with the form of each document
hereinafter referred to relating to the 1997 Certificates, and the Board has examined and
SF2-71525.3 2
1
approved each document and desires to authorize and direct the execution of such documents
and the consummation of such financing;
WHEREAS, the County has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions hereinafter
authorized; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the
County of Contra Costa, as follows:
Section 1. The County hereby specifically finds and declares that the actions
authorized hereby constitute and are with respect to public affairs of the County and that the
statements, findings and determinations of the County set forth above are true and correct.
Section 2. The form of Site Lease, on file with the Clerk of the Board of
Supervisors, is hereby approved and the Chairman of the Board of Supervisors and the Clerk
of the Board of Supervisors or their designees are hereby authorized and directed to execute
and deliver the Site Lease in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof; provided, however, that the term of the Site Lease (including any
extensions), shall not exceed December 31, 2031.
Section 3. The form of Facility Lease, on file with the Clerk of the Board of
Supervisors, is hereby approved and the Chairman of the Board of Supervisors and the Clerk
of the Board of Supervisors or their designees are hereby authorized and directed to execute
and deliver the Facility Lease in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof; provided, however, that the aggregate principal component of base
SM-77525.3 3
rental payments payable under the Facility Lease shall not exceed $40,000,000, the
maximum annual base rental payments payable under the Facility Lease shall not exceed
$4,500,000, the term of the Facility Lease (including any extensions) shall not exceed
December 31, 2031 and the true interest cost ("TIC") of the interest component of base
rental payments payable under the Facility Lease shall not exceed 7%. Among the changes
authorized to be made to such Facility Lease are such changes as are necessary in the event
the County Administrator or his designee, upon consultation-with the Underwriters,
determines it is desirable to (i) accommodate one or more of the methods or modes of
determining the principal and interest components of the Base Rental Payments represented
by the 1997 Certificates or other financing techniques as may be provided for in the Official
Statement, or (ii) obtain municipal bond insurance.
Section 4. The form of Trust Agreement by and among First Trust of
California, National Association, as trustee, the Authority and the County, on file with the
Clerk of the Board of Supervisors, is hereby approved. The Chairman of the Board of
Supervisors and the Clerk of the Board of Supervisors or their designees are hereby
authorized and directed to execute and deliver the Trust Agreement in substantially said
form, with such changes therein as such officers may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof. Among the changes authorized
to be made to such Trust Agreement are such changes as are necessary in the event the
County Administrator or his designee, upon consultation with the Underwriters, determines it
is desirable to (i) accommodate one.or more of the methods or modes of determining the
principal and interest components of the Base Rental Payments represented by the 1997
SF2M525.3 4
Certificates or other financing techniques as may be provided for in the Official Statement,
or (ii) obtain municipal bond insurance.
Section 5. The form of Letter of Instruction, by and between the County and
the trustee for the Prior Certificates, on file with the Clerk of the Board of Supervisors, is
hereby approved. The Chairman of the Board of Supervisors and the Clerk of the Board of
Supervisors or their designees are hereby authorized and directed to execute and deliver the
Letter of Instruction in substantially said form, with such changes therein as such officers
may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof.
Section 6. The form of Purchase Contract by and among the Underwriters, the
County and the Authority on file with the Clerk of the Board of Supervisors, is hereby
approved. The County Administrator or his designee is hereby authorized and directed to
execute and deliver the Purchase Contract in substantially said form, with such changes
therein as such officer may require or approve, such approval to be conclusively evidenced
by the execution and delivery thereof and pursuant thereto to sell not to exceed $40,000,000
aggregate principal amount of 1997 Certificates to the Underwriters for the purchase price set
forth in the Purchase Contract, said price to be not less than the principal amount represented
by the 1997 Certificates less an underwriting discount of not exceeding .411% of the
principal amount of 1997 Certificates (exclusive of any original issue discount or premium).
Section 7. The form of Official Statement describing the 1997 Certificates, on
file with the Clerk of the Board of Supervisors, is hereby approved. The County
Administrator or his designee is hereby authorized and directed to execute and deliver a final
Official Statement in substantially said form, with such additions thereto or changes therein
SF2-77525.3 5
41
as the County Counsel's Office may require or approve, such approval to be conclusively
evidenced by the execution and delivery.thereof. -
Section 8. The Underwriters are hereby authorized to distribute=copies of the
Official Statement to persons purchasing the 1997 Certificates and other interested parties.
The distribution of the Preliminary Official Statement by the Underwriters is hereby
authorized and approved. The County Administrator or his designee is hereby authorized
and directed to execute a certificate confirming that the Preliminary Official Statement has
been "deemed final" by the County for purposes of Securities and Exchange Commission
Rule 15c2-12.
Section 9. The execution and delivery, pursuant to the Trust Agreement, of
not to exceed $40,000,000 aggregate principal amount of the County of Contra Costa,
California, Certificates of Participation (Capital Projects Program), Series of 1997,
evidencing and representing fractional undivided interests in the rights to receive base
payments payable by the County pursuant to the Facility Lease, payable in the years and in
the amounts with interest components with respect thereto as specified in the Trust
Agreement as executed, is hereby authorized and approved. The sale of the 1997
Certificates to the Underwriters pursuant to the terms and conditions of the Purchase
Contract is hereby approved.
Section 10. The form of Continuing Disclosure Agreement by and between the
County and the Trustee, on file with the Clerk of the Board of Supervisors, is hereby
approved. The County Administrator or his designee is hereby authorized and directed to
execute and deliver the Continuing Disclosure Agreement in substantially said form, with
SF2-77525.3 6
such changes therein as such officer may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof.
Section 11. The Board.hereby-elects, pursuant to.Government Code Section
25350.55, to guarantee rental payments to be made by the County under the Facility Lease
and authorizes and directs the County Administrator or his designee to notify the Controller
of the State of California of such election, which notice shall include a schedule of lease
payments to be made by the County under the Facility Lease and shall identify a trustee
appointed by the County to effectuate the payment provisions pursuant to such guarantee.
For purposes of effectuating the payment provisions pursuant to Government Code
Section 25350.55, the Board hereby appoints the Trustee for the 1997 Certificates as trustee.
Section 12. The officers of the County are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in
order to consummate the transactions herein authorized and otherwise to carry out, give
effect to and comply with the terms and intent of this Resolution. The Chairman of the
Board of Supervisors, the Clerk of the Board of Supervisors, the County Administrator, the
Deputy Administrator of the County and the officers of the County are hereby authorized and
directed to execute and deliver any and all certificates and representations, signature
certificates, no-litigation certificates, tax and rebate certificates, the letter of representations
to The Depository Trust Company and certificates concerning the contents of the Official
Statement distributed in connection with the sale of the 1997 Certificates, necessary and
desirable to accomplish the transactions set forth above.
SF2-77525.3 7
Section 13. . All actions heretofore taken by the officers and agents of the
County with,respect to the sale,_execution and delivery of the 1997 Certificates are hereby
approved and confirmed.
Section 14. This Resolution shall take effect from and after its date of
adoption.
PASSED AND ADOPTED this 5th day of August, 1997.
Chairman of the Board of Supervisors
County of Contra Costa, California
[sem]
ATTEST: Philip 1. Batchelor, Clerk of the
Board of Supervisors and County Administrator
By
Depu Clerk of the Board of
Supervisors of the County of
Contra Costa, State of California
3F2-715253 8
CLERK'S CERTIFICATE
_I, Jeanne Magl oDeputyClerk and Chief Clerk of the.Board of Supervisors
of the County_of Contra Costa, hereby certify as follows:
The foregoing is a full, true and correct copy of a resolution duly adopted at a
regular meeting of the Board of Supervisors of said County duly and regularly held at the
regular meeting place thereof on the 5th day of August, 1997, of which meeting all of the
members of said Board of Supervisors had due notice and at which a majority thereof were
present; and at said meeting said resolution was adopted by the following vote:
AYES: Supervisors Rogers , Gerber ; Canciamilla and DeSaulnier
NOES: None
ABSENT: Supervisor Uilkema
An agenda of said meeting was posted at least 72 hours before said meeting at
6 S 1 P i n e S t . , Martinez, California, a location freely accessible to members of the public,
and a brief general description of said resolution appeared on said agenda.
I have carefully compared the same with the original minutes of said meeting
on file and of record in my office; the foregoing resolution is a full, true and correct copy of
the original resolution adopted at said meeting and entered in said minutes; and said
resolution has not been amended, modified or rescinded since the date of its adoption, and
the same is now in full force and effect.
SF2-77525.3
WITNESS my hand and the seal of the County of Contra Costa this 5th day of
August, 1997.
Dep Clerk
of the Board of Supervisors
of the County of Contra Costa,
State of California
[Seal]
SnM525.3 2
C- 126
C
DOCUMENTS FOR THE BOARD
OH&S SECOND DRAFT
08/04/97
TRUST AGREEMENT
by and among
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
and
COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY
and the
COUNTY OF CONTRA COSTA
Dated as of August 1, 1997
RELATING TO CERTIFICATES
OF PARTICIPATION
(CAPITAL PROJECTS PROGRAM)
$ CERTIFICATES
OF SERIES OF 1997
SF2-77478.2 40511-105-PCM-08/04/97
TABLE OF CONTENTS
Section Paye
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
TERMS AND CONDITIONS OF CERTIFICATES
SECTION 2.01. Preparation of Certificates; Initial Series of Certificates . . . . . 16
SECTION 2.02. Denominations and Dating of 1997 Certificates . . . . . . . . . . 16
SECTION 2.03. Payment Dates of 1997 Certificates; Medium, Method and
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.04. Form of 1997 Certificates . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.05. Execution of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.06. Transfer and Payment of Certificates; Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Certificate Registration Books . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.08. Temporary Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 2.09. Certificates Mutilated, Lost, Destroyed or Stolen . . . . . . . . . 26
SECTION 2.10. Destruction of Cancelled Certificates . . . . . . . . . . . . . . . . . 26
SECTION 2.11. Special Covenants as to Book-Entry Only System . . . . . . . . . 26
ARTICLE III
PROCEEDS OF CERTIFICATES
SECTION 3.01. Delivery of 1997 Certificates . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.02. Deposit of Proceeds of 1997 Certificates . . . . . . . . . . . . . . 28
SECTION 3.03. Use of Moneys in the Acquisition and Construction Fund . . . . 29
SECTION 3.04. Execution and Delivery of Additional Certificates . . . . . . . . . 30
SECTION 3.05. Proceedings for Authorization of Additional Certificates . . . . . 32
ARTICLE IV
PREPAYMENT OF CERTIFICATES
SECTION 4.01. Terms of Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.02. Selection of Certificates for Prepayment . . . . . . . . . . . . . . . 34
SECTION 4.03. Notice of Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.04. Partial Prepayment of Certificates . . . . . . . . . . . . . . . . . . . 35
SECTION 4.05. Effect of Prepayment . . . . . . . . . . . . . . . . . . . . . . . 35
SF2-77478.2 1 40511-105-PCM-08/04/97
Section Page
ARTICLE V
RENTAL PAYMENTS
SECTION 5.01. Pledge of Base Rental Payments; Base Rental Payment Fund 35
SECTION 5.02. Deposit of Base Rental Payments . . . . . . . . . . . . . . . . . . . 36
SECTION 5.03. Trust Administration Fund . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.04. Establishment and Application of 1997 Rebate Fund . . . . . . . 37
SECTION 5.05. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE VI
COVENANTS
SECTION 6.01. Compliance with Trust Agreement . . . . . . . . . . . . . . . . . . 39
SECTION 6.02. Compliance with or Amendment of Site Lease or Facility
Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.03. Observance of Laws and Regulations . . . . . . . . . . . . . . . . . 40
SECTION 6.04. Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.05. Prosecution and Defense of Suits . . . . . . . . . . . . . . . . . . . 40
SECTION 6.06. Accounting Records and Statements . . . . . . . . . . . . . . . . . 41
SECTION 6.07. Recordation and Filing . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.08. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.09. Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
SECTION 7.01. Action on Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.02. Other Remedies of the Trustee . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.03. Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 7.04. Remedies Not Exclusive . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 7.05. No Liability by the Authority to the Owners; Indemnification . . 43
SECTION 7.06. No Liability by the County to the Owners . . . . . . . . . . . . . . 43
SECTION 7.07. No Liability by the Trustee to the Owners . . . . . . . . . . . . . 44
SECTION 7.08. Trustee May Enforce Claims Without Possession of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.09. Application of Money Collected . . . . . . . . . . . . . . . . . . . . 44
SECTION 7.10. Owners' Direction of Proceedings . . . . . . . . . . . . . . . . . . . 44
SECTION 7.11. Limitations on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Employment of the Trustee . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.02. Duties, Removal and Resignation of the Trustee . . . . . . . . . . 45
SECTION 8.03. Compensation and Indemnification of the Trustee . . . . . . . . . 46
SF2-77478.2 it 40511-105-PCM-08/04/97
Section Page
SECTION 8.04. Protection of the Trustee . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO
TRUST AGREEMENT
SECTION 9.01. Amendment or Supplement . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.02. Disqualified Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.03. Endorsement or Replacement of Certificates After
Amendment or Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.04. Amendment by Mutual Consent . . . . . . . . . . . . . . . . . . . . 51
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Certificates and Trust Agreement . . . . . . . . . . 51
SECTION 10.02. Unclaimed Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
ARTICLE XI
CERTIFICATES INSURANCE POLICY
SECTION 11.01. Payments from Certificates Insurance Policy . . . . . . . . . . . 52
SECTION 11.02. Consent of Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.03. Exercise of Remedies Upon Default . . . . . . . . . . . . . . . . . 54
SECTION 11.04. Limitation on Modification . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.05. Notices and Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.06. Effect of Certificates Insurance Policy . . . . . . . . . . . . . . . 55
SECTION 11.07. Insurer as Third Party Beneficiary . . . . . . . . . . . . . . . . . . 55
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Benefits of Trust Agreement Limited to Parties . . . . . . . . . . 56
SECTION 12.02. Successor Deemed Included in all References to
Predecessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 12.03. Execution of Documents by Owners . . . . . . . . . . . . . . . . 56
SECTION 12.04. Waiver of Personal Liability . . . . . . . . . . . . . . . . . . . . . 56
SECTION 12.05. Acquisition of Certificates by County . . . . . . . . . . . . . . . . 57
SECTION 12.06. Content of Certificates . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.07. Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 12.08. Article and Section Headings, Gender and References . . . . . . 57
SECTION 12.09. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 12.10. California Law . . . . . . . . . I . . . . . . . . . . . . . . . . . . . 58
SECTION 12.11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 12.12. Nonbusiness Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SF2-77478.2 111 40511-105-PCM-08/04/97
Section Page
SECTION 12.13. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 12.14. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . 59
SF2-77478.2 iv 40511-105-PCM-08/04/97
This TRUST AGREEMENT, made and entered into as of August 1, 1997, by
and among FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, a national
banking association duly organized and existing under and by virtue of the laws of the United
States of America (the "Trustee"), COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY, a joint powers authority duly organized and existing under and by virtue of
the laws of the State of California (the "Authority"), and the COUNTY OF CONTRA
COSTA, a body corporate and politic and a political subdivision of the State of California
(the "County");
WITNESSETH:
WHEREAS, under the Facility Lease, the County is obligated to make base
rental payments to the Authority for the lease of Project Phase I;
WHEREAS, all rights to receive such base rental payments have been assigned
without recourse by the Authority to the Trustee pursuant to an agreement, entitled
"Assignment Agreement" and dated as of August 1, 1997 (the "Assignment Agreement");
WHEREAS, in consideration of such assignment and the execution of this
Trust Agreement, the Trustee has agreed to execute and deliver certificates of participation in
an amount equal to the aggregate principal components of such base rental payments, each
evidencing and representing a fractional undivided interest in such base rental payments; and
WHEREAS, all acts, conditions and things required by law to exist, to have
happened and to have been performed precedent to and in connection with the execution and
entering into of this Trust Agreement do exist, have happened and have been performed in
regular and due time, form and manner as required by law, and the parties hereto are now
duly authorized to execute and enter into this Trust Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES DO HEREBY AGREE AS
FOLLOWS:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
SECTION 1.01. Definitions. Unless the context otherwise requires, the terms
defined in this Section shall for all purposes hereof and of any amendment hereof or
supplement hereto and of the Certificates and of any certificate, opinion, request or other
document mentioned herein or therein have the meanings defined herein, the following
definitions to be equally applicable to both the singular and plural forms of any of the terms
defined herein:
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Accreted Interest
The term "Accreted Interest" means, with respect to the Capital Appreciation
Certificates, as of the date of calculation, the Accreted Value thereof minus the
Denominational Amount thereof.
Accreted Value
The term "Accreted Value" means, with respect to the Capital Appreciation
Certificates, as of the date of calculation, the Denominational Amount thereof plus the
interest accrued thereon to such date of calculation, compounded from the date of initial
delivery at the interest rate thereof on each February 1 and August 1, assuming in any year
that such Accreted Value increases in equal daily amounts on the basis of a year of three
hundred sixty (360) days composed of twelve (12) months of thirty (30) days each.
Acquisition and Construction Fund
The term "Acquisition and Construction Fund" means the fund by that name
established in Section 3.02.
Additional Certificates
The tenn "Additional Certificates" means additional series of certificates of
participation executed and delivered hereunder pursuant to Sections 3.04 and 3.05 hereof.
Additional Payments
The tern "Additional Payments" uneans the additional payments payable by the
County under and pursuant to Section 3.02 of the Facility Lease.
Architects
The tern "Architects" means the architects, engineers or designers of any
Subsequent Phase of the Project, and any successor or successors to any thereof.
Assignment Agreement
The term "Assignment Agreement" means that certain Assignment Agreement
by and between the Authority and the Trustee, dated as of August 1, 1997, which agreement
was recorded in the office of the County Recorder of the County of Contra Costa on
1997 under Recorder's Serial No. 97-
Base Rental Payment Fund
The term "Base Rental Payment Fund" means the fund by that name
established in Section 5.01.
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Base Rental Payments
The term "Base Rental Payments" means the base rental payments with interest
components and principal components payable by the County under and pursuant to Section
3.01 of the Facility Lease.
Board
The term "Board" means the Board of Supervisors of the County or any
successor thereto.
Business Day
The tenn "Business Day" means any day, not including Saturday or Sunday,
on which the Trustee is open for corporate trust business in the city where its corporate trust
office is located.
Capital Improvements
The term "Capital Improvements" means the acquisition, construction,
improvement, remodeling and equipping of various County facilities, including, but not
limited to, facilities for use by the County Public Defender, the County Assessor's office and
the County's Central Dispatch Center.
Certificate of Completion
The tenn "Certificate of Completion" means a Certificate of the County
certifying that the Capital Improvements have been completed, stating the date of such
completion and stating that all of the Improvement Costs thereof and incidental expenses
have been determined and paid (or that all of such costs and expenses have been paid less
specified claims which are subject to dispute and for which a retention in the Acquisition and
Construction Fund is to be maintained in the full amount of such claims until such dispute is
resolved).
Certificate of the Authority
The tern "Certificate of the Authority" means an instrument in writing signed
by the Chair, Vice-Chair, Executive Director, Assistant Executive Director or Deputy
Executive Director or a designee of any such officer or by any other officer of the Authority
duly authorized by the Authority in writing to the Trustee for that purpose. If and to the
extent required by the provisions of Section 11.06, each Certificate of the Authority shall
include the statements provided for in Section 11.06.
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Certificate of the County
The tenn "Certificate of the County" means an instrument in writing signed by
the County Administrator of the County or his designee, or by a Deputy County
Administrator of the County, or by any other officer of the County duly authorized by the
Board of Supervisors of the County in writing to the Trustee for that purpose. If and to the
extent required by the provisions of Section 11.06, each Certificate of the County shall
include the statements provided for in Section 11.06.
Certificate Payment Date
The tenn "Certificate Payment Date" means, with respect to any Certificate,
the February 1 designated therein, which is the date on which or, in the case of Certificates
subject to mandatory prepayment, by which the principal component of the Base Rental
Payments evidenced and represented thereby shall become due and payable.
Certificate Reserve Fund
The tenn "Certificate Reserve Fund" shall have the meaning ascribed to such
term in the Facility Lease.
Certificate Reserve Fund Requirement
The tenn "Certificate Reserve Fund Requirement" shall have the meaning
ascribed to such teen in the Facility Lease.
Certificates; 1997 Certificates; Capital Appreciation Certificates; Current Interest Certificates
The tern "Certificates" means the certificates of participation executed and
delivered by the Trustee pursuant hereto and then Outstanding.
The tern "1997 Certificates" means the Certificates designated "Series of
1997" executed and delivered by the Trustee pursuant hereto and then Outstanding, the
proceeds of which are for the refinancing of the Prior Certificates and acquisition of Project
Phase I and financing of the Capital Improvements.
The term "Capital Appreciation Certificates" means Certificates the interest
component of which is compounded semiannually on each Interest Payment Date to the
Certificate Payment Date as specified in the accreted value table for such Certificates in an
Exhibit to a Supplemental Trust Agreement.
The tern "Current Interest Certificates" means Certificates the interest
component of which is payable on each Interest Payment Date to the Certificate Payment
Date specified for each such Certificate.
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Certificates Insurance Policy
The term "Certificates Insurance Policy" means any policy or policies of
insurance or financial guaranty bond insuring payment of the amounts of principal and
interest represented by the Certificates and issued by a Insurer.
Code
The term "Code" means the Internal Revenue Code of 1986, as amended.
Construction Contract
The term "Construction Contract" means the contract between the Authority
and a Contractor for the construction, acquisition or installation of any portion or Phase of
the Project.
Continuing Disclosure Agreement
The term "Continuing Disclosure Agreement" means that certain Continuing
Disclosure Agreement among the County, the Trustee and the Dissemination Agent named
therein delivered with respect to the 1997 Certificates.
Construction Manager
The teen "Construction Manager" means the construction manager selected to
act as such for any Subsequent Phase of the Project.
Contractor
The tenn "Contractor" means the construction contractor selected to act as
such for any Subsequent Phase of the Project and any successor thereto.
Corporation
The tern "Corporation" means the ABAG Finance Corporation.
Costs of Issuance
The tenn "Costs of Issuance" means all items of expense directly or indirectly
payable by or reimbursable to the County or the Authority and related to the authorization,
execution and delivery of the Facility Lease, the Site Lease, the Assignment Agreement and
the Trust Agreement and the related sale of the Certificates, including, but not limited to,
costs of preparation and reproduction of documents, costs of rating agencies and costs to
provide information required by rating agencies, filing and recording fees, initial fees and
charges of the Trustee (including its counsel's legal fees), legal fees and charges, fees and
disbursements of consultants and professionals, fees and expenses of the underwriter of the
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Certificates, fees and charges for preparation, execution and safekeeping of the Certificates,
fees of the Authority and any other cost, charge or fee in connection with the original
execution and delivery of the Certificates.
Costs of Issuance Fund
The term "Costs of Issuance Fund" means the fiord by that name established in
Section 3.02.
County
The tenn "County" means the County of Contra Costa, a body corporate and
politic and a political subdivision of the State of California.
Demised Premises
The tenn "Demised Premises" means that certain real property situated in the
County of Contra Costa, State of California, described in Exhibit A attached to the Facility
Lease and made a part thereof, together with any additional real property added thereto by
any supplement, or amendment thereto; subject, however, to any conditions, reservations and
easements of record or known to the County.
Denominational Amount
The tenn "Denominational Amount" means, with respect to the Capital
Appreciation Certificates, the initial offering price thereof, which represents the principal
.amount thereof, and, with respect to the Current Interest Certificates, the principal amount
thereof.
Escrow Fund
The tenn "Escrow Fund" means the escrow fiind established with the Prior
Trustee pursuant to the Letter of Instructions.
Event of Default
The term "Event of Default" shall have the meaning specified in Section 7.01.
Facility Lease
The term "Facility Lease" means that certain lease, entitled "Facility Lease
(Capital Projects Program)," by and between the Authority and the County, dated as of
August 1, 1997, which lease or a memorandum thereof was recorded in the office of the
County Recorder of the County of Contra Costa on , 1997 under Recorder's
Serial No. 97- , as originally executed and recorded or as it may from time to
time be supplemented, modified or amended pursuant to the provisions hereof and thereof.
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Financial Newspaper
The term "Financial Newspaper" means The Wall Street Journal or The Bond
B yer, or any other newspaper or journal publishing financial news and selected by the
Trustee that is printed in the English language, is customarily published on each business day
and is circulated in San Francisco, California.
Improvement Costs
The term "Improvement Costs" means all costs of acquisition and construction
of the Capital Improvements and of expenses incident thereto (or for making reimbursements
to the Authority or the County or any other person, firm or corporation for such costs
theretofore paid by him or it), including, but not limited to, architectural and engineering
fees and expenses, interest during construction, furnishings and equipment, tests and
inspection, surveys, land acquisition, insurance premiums, losses during construction not
insured against because of deductible amounts, costs of accounting, feasibility, environmental
and other reports, inspection costs, permit fees, and charges and fees in connection with the
foregoing.
Inspectors' Certificate
The term "Inspectors' Certificate" shall mean a certificate signed by the
Architects or the Construction Manager or by a duly authorized construction inspector or
inspectors to be retained to inspect the construction of the Project or a Phase thereof.
Insurer
The tern "Insurer" means any insurance company or companies which has or
have issued any Certificates Insurance Policy insuring payment of the amounts of principal
and interest represented by the Certificates or any series or portion thereof.
Interest Fund
The tenn "Interest Fund" means the fund by that name established in
Section 5.02.
Interest Payment Date
The tern "Interest Payment Date" means a date on which interest evidenced
and represented by the Certificates becomes due and payable, being February 1 and August 1
of each year to which reference is made (commencing on February 1, 1998).
Letter of Instructions
The term "Letter of Instructions" means the Letter of Instructions, dated as of
August 1, 1997, from the County to the Prior Trustee.
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Moody's Investors Service
The term "Moody's Investors Service" means Moody's Investors Service, Inc.,
a corporation duly organized and existing under and by virtue of the laws of the State of
Delaware, and its successors and assigns, except that if such corporation shall be dissolved
or liquidated or shall no longer perform the functions of a securities rating agency, then the
term "Moody's Investors Service" shall be deemed to refer to any other nationally recognized
securities rating agency selected by the County.
1997 Certificates of Participation Purchase Contract
The term 1997 Certificates of Participation Purchase Contract" means that
certain Contract of Purchase, dated 1997, by and among the 1997 Purchaser,
the Authority and the County relating to $ Certificates of Participation (Capital
Projects Program), Series 1997.
1997 Purchaser .
The term "1997 Purchaser" means PaineWebber Incorporated, as
representative of the underwriters and purchasers of the 1997 Certificates.
1997 Rebate Fund
The term "1997 Rebate Fund" means the fund by that name established in
Section 5.04.
Opinion of Counsel
The term "Opinion of Counsel" means a written opinion of counsel of
recognized national standing in the field of law relating to municipal bonds, appointed and
paid by the County or the Authority.
Outstanding
The term "Outstanding," when used as of any particular time with reference to
Certificates, means (subject to the provisions of Section 9.02) all Certificates except --
(1) Certificates cancelled by the Trustee or delivered to the Trustee for
cancellation;
(2) Certificates paid or deemed to have been paid within the meaning of
Section 10.01; and
(3) Certificates in lieu of or in substitution for which other Certificates
shall have been executed and delivered by the Trustee pursuant to Section 2.09.
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Owner
The term "Owner" means any person who shall be the registered owner of any
Outstanding Certificate.
Payment Date
The term "Payment Date" means that February 1 or August 1 during the
period beginning August 1, 1997 and terminating on February 1, to which reference is
made.
Permitted Investments
The term "Permitted Investments" means any of the following to the extent
then permitted by the laws of the State of California:
(1) Direct and general obligations of the United States of America, or obligations
that are unconditionally guaranteed as to principal and interest by the United
States of America, including such obligations which have been stripped of their
unmatured interest coupons (in the case of direct and general obligations of the
United States of America) which evidence ownership of proportionate interests
in future interest or principal payments of such obligations. Investments in
such proportionate interests must be limited to circumstances wherein (a) a
bank or trust company acts as custodian and holds the underlying United States
obligations; (b) the owner of the investment is the real party in interest and has
the right to proceed directly and individually against the obligor of the
underlying United States obligations; and (c) the underlying United States
obligations are held in a special account, segregated from the custodian's
general assets, and are not available to satisfy any claim of the custodian, any
person claiming through the custodian, or any person to whom the custodian
may be obligated. The obligations described in this paragraph are hereinafter
called the "United States Obligations";
(2) Obligations issued or guaranteed by the Federal National Mortgage Association
or the following instrumentalities or agencies of the United States of America
(the obligations described in this paragraph being called the "Federal Agency
Obligations"):
(a) Federal Home Loan Banks;
(b) Government National Mortgage Association;
(c) Farmers Home Administration;
(d) Federal Home Loan Mortgage Corporation ;
(e) Federal Housing Administration;
(f) Farm Credit Banks (Federal Land Banks, Federal Intermediate Credit
Banks and Banks for Cooperatives);
(g) Student Loan Marketing Association; and
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(h) Resolution Funding Corporation obligations consisting of the right to
receive interest which has been separated from the right to receive
principal;
(3) Long-term obligations of any state or authority or local agency thereof and that
are rated Aa or better by Moody's Investors Service and AA or better by
Standard and Poor's at the time of purchase, including bonds payable solely
out of the revenues from a revenue-producing property owned, controlled or
operated by the County or any state or by a department, board, agency or
authority thereof;
(4) Short-term obligations of any state or authority or local agency thereof and that
are rated in one of the two highest rating categories assigned by Moody's
Investors Service and Standard and Poor's at the time of purchase, including
bonds payable solely out of the revenues from a revenue-producing property
owned, controlled or operated by the County or a state or by a department,
board, agency or authority thereof;
(5) Interest-bearing deposit accounts (including certificates of deposit) in a
nationally or state-chartered bank, or state or federal savings and loan
association, including the Trustee or any affiliate thereof, which are either
(i) fully insured by the Federal Deposit Insurance Corporation, or (ii) issued
by any national or state-chartered bank, or state or federal savings and loan
association whose interest-bearing demand or time deposits (including
certificates of deposit) are rated at the time of their issuance at least Aa by
Moody's Investors Service and at least AA by Standard & Poor's;
(6) Investments in repurchase agreements, the maturities of which are thirty
(30) days or less, entered into with financial institutions such as banks or trust
companies organized under state law or national banking associations,
insurance companies, or government bond dealers reporting to, trading with,
and recognized as a primary dealer by, the Federal Reserve Bank of New
York and a member of the Security Investors Protection Corporation (SIPC) or
with a dealer or parent holding company, in each such case the debt of which
is rated at least Aa or P-1 by Moody's Investors Service and at least AA or
A-1+ by Standard and Poor's at the time of such investment. Such
repurchase agreements shall be collateralized by United States Obligations or
Federal Agency Obligations the fair market value of which, together with the
fair market value of the repurchase agreement securities, shall be maintained at
the collateralization levels required by Moody's Investors Service and Standard
and Poor's (as certified to the Tnistee by a Certificate of the County), and the
provisions of the repurchase agreement shall meet the following additional
criteria:
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(a) the Trustee (who shall not be the provider of the collateral) has
possession of the United States Obligations or Federal Agency
Obligations;
(b) failure to maintain the requisite collateral levels will require the
Trustee to liquidate the United States Obligations or Federal Agency
Obligations immediately;
(c) the Trustee has a perfected, first priority security interest in the
United States Obligations or Federal Agency Obligations; and
(d) the United States Obligations or Federal Agency Obligations are
free and clear of third-party liens, and in the case of an SIPC broker,
were not acquired pursuant to a repurchase or reverse repurchase
agreement;
(7) Pre-refunded municipal obligations rated Aaa by Moody's Investors Service
and AAA by Standard and Poor's and meeting the following conditions:
(a) the municipal obligations are (i) not to be redeemed prior to
maturity or the trustee has been given irrevocable instructions
concerning their calling and redemption and (ii) the issuer has
covenanted not to redeem such municipal obligations other than as set
forth in such instructions;
(b) the municipal obligations are secured by cash or United States
Obligations that may be applied only to interest, principal, and
premium payments of such municipal obligations;
(c) the principal of and interest on the United States Obligations
(plus any cash in the escrow fund) are sufficient to meet the liabilities
on the municipal obligations;
(d) the United States Obligations serving as security for the
municipal obligations are held by an escrow agent or trustee; and
(e) the United States Obligations (plus any cash in the escrow fund)
are not available to satisfy any other claims, including those against the
trustee or escrow agent;
(8) Prime commercial paper of a United States corporation, finance company or
banking institution of the highest ranking or of the highest letter and numerical
rating as provided for by Moody's Investors Service and Standard & Poor's;
eligible paper is further limited to issuing corporations that are organized and
operating within the United States and having total assets in excess of
$500,000,000 and have an "A" or higher rating for the issuer's debt, other
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than commercial paper, if any, as provided for by Moody's Investors Service
and Standard & Poor's at the time of purchase; purchases of eligible
commercial paper may not exceed 180 days maturity nor represent more than
10% of the outstanding paper of an issuing corporation;
(9) Shares of a diversified open-end management investment company (as defined
in the Investment Company Act of 1940) or shares in a regulated investment
company (as defined in Section 851(a) of the Code) that is a money market
fund (whose shares are registered under the Federal Securities Act of 1940)
that has been rated in the highest rating category by Moody's Investors Service
and AAAm, AAAm-G or AAm by Standard and Poor's, investing in the
securities and obligations as authorized by clauses (1) to (10), inclusive, of this
definition, and which comply with the investment restrictions of Articles 1 and
2 of Chapter 4 of Title 5 of the California Government Code (commencing
with Section 53630); to be eligible for investment pursuant to this clause these
companies shall either: (1) attain the highest ranking or the highest letter and
numerical rating provided by not less that two of the three largest nationally
recognized rating services, or (2) have an investment adviser registered with
the Securities and Exchange Commission, if applicable, with not less than five
years experience investing in the securities and obligations as authorized by
clauses (1) through (4), (6) through (10) and (11), inclusive, of this definition
and with assets under management in excess of $500,000,000. The purchase
price of shares of beneficial interests purchased pursuant to this clause shall
not include any commission that these companies may charge;
(10) Negotiable certificates of deposit secured at all times by United States
Obligations or Federal Agency Obligations issued by a nationally or
state-chartered bank or a state or federal association (as defined by
Section 5102 of the California Financial Code) or by a state-licensed branch of
a foreign bank, any of the above of which are rated A or better by Standard &
Poor's and A or better by Moody's Investors Service at the time of purchase;
provided that such collateral is at all times held by a third party and Certificate
owners have a perfected first security interest in such collateral;
(11) Shares in the California Arbitrage Management Trust, a California common
law trust established pursuant to Title 1, Division 7, Chapter 5 of the
Government Code of the State of California which invests exclusively in
investments permitted by Section 53635 of Title 5, Division 2, Chapter 4 of
the Government Code of the State of California, as it may be amended;
(12) Investment in the Local Agency Investment Fund (as that term is defined in
Section 16429.1 of the California Government Code, as such Section may be
amended or recodified from time to time); and
(13) Any other investments which the County deems to be prudent investments and
in which the County directs the Trustee to invest, provided that such
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investments are rated AA or better by Standard & Poor's and Aa or better by
Moody's Investors Service at the time of such investment.
Phase of the Project
The term "Phase of the Project" means Project Phase I or such Subsequent
Phase of the Project to which reference is made.
Prepayment Fund
The term "Prepayment Fund" means the fiord by that name established in
Section 5.02.
Principal Corporate Trust Office
The term "Principal Corporate Trust Office" means the office of the Trustee at
the address set forth in Section 11.11 of this Trust Agreement; provided, however, for
transfer, registration, exchange, payment and surrender of Certificates it means care of the
corporate trust office of First Trust National Association in St. Paul, Minnesota.
Principal Fund
The term "Principal Fund" means the fiend by that name established in
Section 5.02.
Prior Trustee
The tenn "Prior Trustee" means First Trust, National Association, acting as
trustee pursuant to the Trust Agreement, dated as of February 1, 1991, by and among the
County, ABAG Finance Corporation and Bank of America National Trust and Savings
Association, as predecessor to the Prior Trustee.
Project
The term "Project" means Project Phase I and all Subsequent Phases of the
Project.
Project Phase I
The tenn "Project Phase I" means the those public facilities and buildings
described in Exhibit A hereto, together with parking, site development, landscaping, utilities,
fixtures, furnishings, equipment, improvements and appurtenant and related facilities, all
situated on the Demised Premises pursuant to the Facility Lease.
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Rebate Funds
The term "Rebate Funds" means the 1997 Rebate Fund and subsequent rebate
funds established in Supplemental Trust Agreements entered into in connection with the
execution and delivery of Additional Certificates.
Rental Payments
The term "Rental Payments" means the Base Rental Payments.
Representations Letter
The term "Representations Letter" means the letter or letters to The
Depository Trust Company, New York, New York, from the County and the Trustee relating
to the use of the book-entry only system for the 1997 Certificates.
Site Lease
The term "Site Lease" means that certain lease, entitled "Site Lease (Capital
Projects Program)," by and between the County and the Authority, dated as of August 1,
1997, which lease or a memorandum thereof was recorded in the office of the County
Recorder of the County of Contra Costa on , 1997 under Recorder's Serial
Number 97- , as originally executed and recorded or as it may from time to time
be supplemented, modified or amended pursuant to the provisions hereof and thereof.
Standard & Poor's
The term "Standard & Poor's" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc. and its successors and assigns, except that if such entity shall
be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, then the term Standard & Poor's shall be deemed to refer to any other nationally
recognized securities rating agency selected by the County.
State
The term "State" means the State of California.
State Controller
The term "State Controller" means the Controller of the State.
Subsequent Phase of the Project
The term "Subsequent Phase of the Project" means any and all facilities and
buildings for use by the County, whether within or without the County, and all additions,
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extensions or improvements thereto hereafter added to the Project and hereafter described by
a Supplemental Trust Agreement.
Supplemental Trust Agreement
The term "Supplemental Trust Agreement" means an agreement amending or
supplementing the terms hereof entered into pursuant to the teens hereof.
Tax Certificate
The term "Tax Certificate" means the certificate relating to Section 103 of the
Code, executed by the County on the date of delivery of the 1997 Certificates to the 1997
Purchaser, as originally delivered and as it may be amended from time to time.
Trust Administration Fund
The term "Trust Administration Fund" means the fiend by that name
established in Section 5.03.
Trust Agreement
The term "Trust Agreement" means this Trust Agreement by and among the
Trustee, the Authority and the County, dated as of August 1, 1997, as originally executed
and as it may from time to time be amended or supplemented by a Supplemental Trust
Agreement in accordance herewith.
Trustee
The teen "Trustee" means First Trust of California, National Association, a
national banking association duly organized and existing under and by virtue of the laws of
the United States of America, or any other bank or trust company which may at any time be
substituted in its place as provided in Section 8.02.
Written Request of the Authority
The term "Written Request of the Authority " means an instrument in writing
signed by or on behalf of the Authority by its Chair, Vice-Chair, Executive Director,
Assistant Executive Director or Deputy Executive Director or a designee of any such officer
or by any other person (whether or not an officer of the Authority ) who is specifically
authorized by resolution of the Board of Directors of the Authority to sign or execute such a
document on its behalf.
Written Request of the County
The term "Written Request of the County" means an instrument in writing
signed by the County Administrator of the County or his designee, or by a Deputy County
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Administrator of the County, or by any other officer of the County duly authorized by the
Board of Supervisors of the County in writing to the Trustee for that purpose.
SECTION 1.02. Equal Security. In consideration of the acceptance of the
Certificates by the Owners, the Trust Agreement shall be deemed to be and shall constitute a
contract between the Trustee and the Owners to secure the full and final payment of the
interest and principal represented by the Certificates which may be executed and delivered
hereunder, subject to the agreements, conditions, covenants and teens contained herein; and
all agreements, conditions, covenants and terms contained herein required to be observed or
performed by or on behalf of the Trustee shall be for the equal and proportionate benefit,
protection and security of all Owners without distinction, preference or priority as to security
or otherwise of any Certificates over any other Certificates by reason of the number or date
thereof or the time of execution or delivery thereof or for any cause whatsoever, except as
expressly provided herein or therein.
ARTICLE H
TERMS AND CONDITIONS OF CERTIFICATES
SECTION 2.01. Preparation of Certificates; Initial Series of Certificates.
Certificates may be executed and delivered hereunder from time to time in an aggregate
amount equal to the principal components of Base Rental Payments to become due and
payable pursuant to the Facility Lease. The Trustee is hereby authorized to execute and
deliver an initial series of Certificates designated "County of Contra Costa Certificates of
Participation (Capital Projects Program), Series of 1997" in the aggregate principal amount
of ($ ), evidencing and representing the aggregate
principal components of the Base Rental Payments and each evidencing and representing a
fractional undivided interest in the Base Rental Payments. Initially, the 1997 Certificates
shall be delivered in the form of one certificate for each Certificate Payment Date and shall
be registered in the name of "Cede & Co.," as nominee of The Depository Trust Company.
SECTION 2.02. Denominations and Dating of 1997 Certificates. The 1997
Certificates shall be prepared in the form of fully registered Certificates in the denominations
of five thousand dollars ($5,000) each, and any integral multiple thereof so long as no 1997
Certificate shall represent principal becoming payable on more than one Certificate Payment
Date. The Certificates shall be dated, and shall represent interest from, August 1, 1997.
SECTION 2.03. Payment Dates of 1997 Certificates; Medium, Method and
Place of Payment. The 1997 Certificates shall have Certificate Payment Dates of February 1
in the years and shall evidence and represent principal components in the amounts, with an
interest component calculated on the basis of a 360-day year composed of twelve 30-day
months at the rates, as follows:
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Certificate
Payment Date Principal Interest
(February 1) Amount Component
The interest evidenced and represented by the 1997 Certificates shall be
payable on February 1 and August 1 of each year, beginning on February 1, 1998 and
continuing to and including their Certificate Payment Dates or on prepayment prior thereto,
and shall evidence and represent the sum of the portions of the Base Rental Payments
designated as interest components coming due on the Payment Dates in each year.
The principal evidenced and represented by the 1997 Certificates is payable
on February 1 of each year, beginning on February 1, and continuing to and including
February 1, and on February 1, and on February 1, . The 1997
Certificates with a Certificate Payment Date of February 1, evidence and represent, in
the aggregate, the principal components of Base Rental Payments due on February 1,
through February 1, and a portion of such Certificates is subject to mandatory
prepayment on such dates pursuant to the Trust Agreement. The 1997 Certificates with a
Certificate Payment Date of February 1, evidence and represent, in the aggregate, the
principal components of Base Rental Payments due on February 1, through
February 1, , and a portion of such Certificates is subject to mandatory prepayment on
such dates pursuant to the Trust Agreement. The 1997 Certificates with Certificate
Payment Dates other than February 1, and on February 1, evidence and
represent the principal component of the Base Rental Payments coming due on their
respective Certificate Payment Dates.
The interest, principal and prepayment premiums, if any, evidenced and
represented by the 1997 Certificates shall be payable in lawful money of the United States
of America. The interest evidenced and represented by the 1997 Certificates shall be
payable on their respective Interest Payment Dates by check mailed by first class mail by
the Trustee to the respective Owners thereof as shown in the books required to be kept by
the Trustee pursuant to the provisions of Section 2.07 at the close of business as of the
fifteenth (15th) day of the month next preceding each Interest Payment Date (except that in
the case of an Owner of one million dollars ($1,000,000) or more in aggregate principal
amount of Outstanding 1997 Certificates, such payment may, at such Owner's option, be
made by wire transfer of immediately available funds to an account in the United States in
accordance with wire transfer instructions provided by such Owner prior to the fifteenth
(15th) day of the month next preceding such Interest Payment Date), and the principal, and
prepayment premiums, if any, evidenced and represented by the 1997 Certificates shall be
payable on their respective Certificate Payment Dates or on prepayment prior thereto upon
surrender thereof by the respective Owners thereof at the Principal Corporate Trust Office
SF2-77478.2 17 40511-105-PCM-08/04/97
of the Trustee. The Trustee may treat the Owner of any Certificate as the absolute owner
of such Certificate for all purposes, whether or not such Certificate shall be overdue, and
the Trustee shall not be affected by any knowledge or notice to the contrary; and payment
of the interest, principal and prepayment premiums, if any, evidenced and represented by
such Certificate shall be made only to such Owner as above provided, which payments shall
be valid and effectual to satisfy and discharge the liability evidenced and represented by
such Certificate to the extent of the sum or sums so paid. All Certificates paid pursuant to
the provisions of this Section shall be cancelled by the Trustee and shall not be redelivered.
SECTION 2.04. Form of 1997 Certificates. The 1997 Certificates and the
form of the assignment to appear thereon shall be in substantially the following forms,
respectively, with necessary or appropriate insertions, omissions and variations as permitted
or required hereby:
SF2-77478.2 18 40511-105-PCM-08/04/97
[FORM OF SERIES OF 1997 CERTIFICATE OF PARTICIPATION]
No. $
CERTIFICATE OF PARTICIPATION
(CAPITAL PROJECTS PROGRAM),
SERIES OF 1997
Evidencing and Representing A Fractional Undivided
Interest of the Owner Hereof
in Base Rental Payments to be Made
by the
COUNTY OF CONTRA COSTA, CALIFORNIA
to the
COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY
Certificate
Interest Rate Payment Date Dated as of CUSIP No.
August 1, 1997
REGISTERED OWNER: J
PRINCIPAL SUM:
THIS IS TO CERTIFY that the registered owner named above, as the
registered owner of this Certificate of Participation (the "Certificate"), is the owner of a
fractional undivided interest in the rights to receive certain Base Rental Payments (as that
tenn is defined in the Trust Agreement hereinafter mentioned) under and pursuant to that
certain Facility Lease (Capital Projects Program) (the "Facility Lease") dated as of
August 1, 1997, by and between the County of Contra Costa Public Financing Authority
(the "Authority"), a joint powers authority duly organized and existing under and by virtue
of the laws of the State of California, and the County of Contra Costa (the "County"), a
body corporate and politic and a political subdivision of the State of California, all of which
rights to receive such Base Rental Payments having been assigned without recourse by the
Authority to First Trust of California, National Association, as trustee (the "Trustee"), a
SF2-77478.2 19 40511-105-PCM-08/04/97
national banking association duly organized and existing under and by virtue of the laws of
the United States of America and having a corporate trust office in San Francisco,
California.
The registered owner of this Certificate is entitled to receive, subject to the
terms of the Facility Lease and any right of prepayment prior thereto hereinafter provided
for, on the certificate payment date set forth above (the "Certificate Payment Date"), upon
surrender of this Certificate on the Certificate Payment Date or on the date of prepayment
prior thereto at the Principal Corporate Trust Office (as such tenn is defined in the Trust
Agreement) of the Trustee, the principal sum specified above representing the registered
owner's fractional undivided share of the Base Rental Payments designated as principal
components coming due on the Certificate Payment Date, and on each February 1 and
August 1 commencing February 1, 1998 (the "Interest Payment Date"), the registered
owner of this Certificate as shown in the registration books maintained by the Trustee at the
close of business on the fifteenth (15th) day of the month preceding each Interest Payment
Date is entitled to receive such registered owner's fractional undivided share of the Base
Rental Payments constituting interest components accruing from the Interest Payment Date
next preceding the date of execution hereof by the Trustee (unless such date of execution is
on or after the sixteenth (16th) day of the month next preceding an Interest Payment Date
and on or before such Interest Payment Date, in which case from such Interest Payment
Date, or unless such date of execution is prior to January 16, 1998, in which case from
August 1, 1997) to such Certificate Payment Date or the date of prepayment prior thereto,
whichever is earlier. Such fractional undivided share designated as interest components is
the result of the multiplication of the aforesaid portion of the Base Rental Payments
designated as principal components by the interest rate per annum stated above calculated
on the basis of a 360-day year composed of twelve 30-day months. The interest is payable
to the person whose name appears on the certificate registration books of the Trustee as the
registered owner hereof as of the close of business on the 15th day of the month
immediately preceding an Interest Payment Date, whether or not such day is a business
day, such interest to be paid by check mailed by first class mail on the date such interest is
due to such registered owner at his address as it appears on such registration books (except
that in the case of a registered owner of one million dollars ($1,000,000) or more in
principal amount, such payment may, at such registered owner's option, be made by wire
transfer of immediately available funds to an account in the United States in accordance
with instructions provided by such registered owner prior to the fifteenth (15th) day of the
month preceding such Interest Payment Date). All such amounts are payable in lawful
money of the United States of America.
This Certificate is one of the duly authorized certificates of participation
entitled "County of Contra Costa Certificates of Participation (Capital Projects Program)"
of the series set forth above, which have been executed by the Trustee pursuant to the terms
of a Trust Agreement (together with any supplements or amendments thereto, the "Trust
Agreement") by and among the Trustee, the Authority and the County, dated as of
August 1, 1997. Copies of the Trust Agreement are on file at the corporate trust office of
the Trustee in San Francisco, California, and reference is hereby made to the Trust
Agreement and to any and all amendments thereof and supplements thereto for a description
SF2-77478.2 20 40511-105-PCM-08104197
of the agreements, conditions, covenants and terms securing the Certificates, for the nature,
extent and manner of enforcement of such agreements, conditions, covenants and terms, for
the rights and remedies of the registered owners of the Certificates with respect thereto and
for the other agreements, conditions, covenants and terms upon which the Certificates are
executed and delivered thereunder, to which agreements, conditions, covenants and terms
the owner hereof, by acceptance hereof, hereby consents.
Additional series of Certificates may be executed and delivered on the terms
and conditions set forth in the Trust Agreement.
To the extent and in the manner permitted by the teens of the Trust
Agreement and the Facility Lease, the provisions of the Trust Agreement and the Facility
Lease may be amended or supplemented by the parties thereto.
This Certificate is transferable by the registered owner hereof, in person or
by his attorney duly authorized in writing, at the Principal Corporate Trust Office of the
Trustee, but only in the manner, subject to the limitations and upon payment of the charges
provided in the Trust Agreement, and upon surrender of this Certificate for cancellation
accompanied by delivery of a duly executed written instrument of transfer in the form
appearing hereon. Upon such transfer, a new Certificate or Certificates of the same series
and Certificate Payment Date representing the same principal amount will be executed and
delivered to the transferee in exchange herefor. The Certificates are exchangeable at the
principal corporate trust office of the Trustee in Los Angeles, California, for a like
aggregate principal amount of Certificates of authorized denominations of the same series
and Certificate Payment Date, in the manner, subject to the limitations and upon payment
of the charges provided in the Trust Agreement.
The Trustee may treat the registered owner hereof as the absolute owner
hereof for all purposes, whether or not this Certificate shall be overdue, and the Trustee
shall not be affected by any knowledge or notice to the contrary; and payment of the
interest and principal represented by this Certificate shall be made only to such registered
owner, which payments shall be valid and effectual to satisfy and discharge liability
represented by this Certificate to the extent of the sum or sums so paid.
The Certificates are authorized to be executed and delivered in the form of
fully registered Certificates in denominations of five thousand dollars ($5,000) each and any
integral multiple thereof so long as no Certificate shall represent principal becoming
payable on more than one Certificate Payment Date.
The Certificates are subject to prepayment on any date prior to their
respective Certificate Payment Dates, as a whole, or in part by lot within each Certificate
Payment Date selected as provided in the Trust Agreement, from prepaid Base Rental
Payments made by the County from funds received by the County from any title insurance
or due to a casualty loss or governmental taking of the Demised Premises and the Project
(as those terms are defined in the Trust Agreement) or portion thereof, under the
circumstances and upon the conditions and ten-ns prescribed in the Trust Agreement and in
SF2-77478.2 21 40511-105-PCM-08/04/97
the Facility Lease, at a prepayment price equal to the sum of the principal amount
represented thereby plus accrued interest represented thereby to the date fixed for
prepayment, without premium.
Series of 1997 Certificates payable after February 1, shall also be
subject to prepayment prior to their respective stated Certificate Payment Dates, at the
option of the County, as a whole, or in part in any order of, and in any amounts of 1997
Certificates payable on, Certificate Payment Dates specified by the County and by lot
within any such Certificate Payment Date if less than all of the Series of 1997 Certificates
of such Certificate Payment Date be prepaid, from any source of available funds, on any
date on or after February 1, , at the principal amount represented thereby plus accrued
interest represented thereby to the date fixed for prepayment, plus a premium, if any, set
forth below as a percentage of such principal amount:
Prepayment Dates Premiums
[to come]
Series of 1997 Certificates with a Certificate Payment Date of February 1,
are also subject to mandatory prepayment prior to their stated Certificate Payment
Date in part on February 1 of each year on and after February 1, , by lot, from and in
the amount of the principal components of the Base Rental Payments applicable thereto and
due and payable on such dates, at a prepayment price equal to the sum of the principal
amount represented thereby plus accrued interest to the date of prepayment, without
premium.
Series of 1997 Certificates with a Certificate Payment Date of February 1,
are also subject to mandatory prepayment prior to their stated Certificate Payment
Date in part on February 1 of each year on and after February 1, , by lot, from and
in the amount of the principal components of the Base Rental Payments applicable thereto
and due and payable on such dates, at a prepayment price equal to the sum of the principal
amount represented thereby plus accrued interest to the date of prepayment, without
premium.
As provided in the Trust Agreement, notice of prepayment hereof shall be
mailed, first class postage prepaid, not less than thirty (30) nor more than sixty (60) days
before the prepayment date, to the registered owner of this Certificate if selected for
prepayment at its address as it appears on the registration books maintained by the Trustee.
If this Certificate is called for prepayment and payment is duly provided herefor as
specified in the Trust Agreement, interest represented hereby shall cease to accrue from and
after the date fixed for prepayment.
The Certificates each evidence and represent a fractional undivided interest in
the Base Rental Payments in an amount equal to the aggregate principal amount of
Certificates originally.executed and delivered by the Trustee in series from time to time
SF2-77478.2 22 40511-105-PCM-08/04/97
pursuant to the Trust Agreement and enjoy the benefits of a security interest in the moneys
held in the funds established pursuant to the Trust Agreement, subject to the provisions of
the Trust Agreement permitting the disbursement thereof for or to the purposes and on the
conditions and terms set forth therein. The obligation of the County to make the Base
Rental Payments is a special obligation of the County, and does not constitute a debt of the
County or of the State of California or of any political subdivision thereof within the
meaning of any constitutional or statutory debt limitation or restriction.
The Trustee has no obligation or liability to the Certificate owners for the
payment of the interest or principal represented by the Certificates, but rather the Trustee's
sole obligations are to administer, for the benefit of the County and the Authority and the
Certificate owners, the various funds established under the Trust Agreement and the
Facility Lease. The Trustee is executing this Certificate solely in its capacity as Trustee
under the Trust Agreement and not in its individual or personal capacity and is not
responsible for the recitals of fact in this Certificate. The Authority has no obligation or
liability whatsoever to the Certificate owners.
The County has certified to the Trustee that all acts, conditions and things
required by the statutes of the State of California and the Trust Agreement to exist, to have
happened and to have been performed precedent to and in connection with the execution
and delivery of this Certificate do exist, have happened and have been performed in regular
and due time, form and manner as required by law, and that the Trustee is duly authorized
to execute and deliver this Certificate. This is to further certify that the amount of this
Certificate, together with all other Certificates executed and delivered under the Trust
Agreement, is not in excess of the amount of Certificates authorized to be executed and
delivered thereunder.
IN WITNESS WHEREOF, this Certificate has been dated as of the date set
forth above and has been executed by the manual signature of an authorized signatory of the
Trustee.
Date of Execution:
as Trustee
By
Authorized Signatory
SF2-77478.2 23 40511-105-PCM-08/04/97
[DTC LEGEND]
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company to the Trustee for registration of transfer, exchange or payment, and
any Certificate executed and delivered is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust Company and any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
SF2-77478.2 24 40511-105-PCM-08/04/97
SECTION 2.05. Execution of Certificates. The Certificates shall be executed by
the Trustee by the manual signature of an authorized signatory of the Trustee.
SECTION 2.06. Transfer and Payment of Certificates; Exchange of Certificates.
All Certificates are transferable by the Owner thereof, in person or by his attorney duly
authorized in writing, at the Principal Corporate Trust Office of the Trustee on the books
required to be kept by the Trustee pursuant to the provisions of Section 2.07, upon surrender of
such Certificates for cancellation accompanied in the case of transfer by delivery of a duly
executed written instrument of transfer in the form appearing on the Certificate. The Trustee
may treat the Owner of any Certificate as the absolute owner of such Certificate for all
purposes, whether or not such Certificate shall be overdue, and the Trustee shall not be affected
by any knowledge or notice to the contrary; and payment of the interest and principal
represented by such Certificate shall be made only to st►ch Owner, which payments shall be
valid and effectual to satisfy and discharge the liability represented by such Certificate to the
extent of the sum or sums so paid.
Whenever any Certificate or Certificates shall be surrendered for transfer, the
Trustee shall execute and deliver a new Certificate or Certificates of the same series and
Certificate Payment Date representing the same principal amount of authorized denominations.
The Trustee shall require the payment by any Owner requesting such transfer of any tax or
other governmental charge required to be paid with respect to such transfer.
Certificates may be exchanged at the Principal Corporate Trust Office of the
Trustee for a like aggregate principal amount of Certificates of other authorized denominations
of the same series and Certificate Payment Date. The Trustee shall require the payment by the
Owner requesting such exchange of any tax or other governmental charge required to be paid
with respect to such exchange.
The Trustee shall not be required to transfer or exchange any Certificate after the
fifteenth day of the month next preceding each Payment Date or during the period designated by
the Trustee for selection of Certificates for prepayment, and the Trustee shall not be required to
transfer or exchange any Certificate selected for prepayment in whole or in part from and after
the date of mailing the notice of prepayment of such Certificate or such part thereof.
SECTION 2.07. Certificate Registration Books. The Trustee will keep at its
Principal Corporate Trust Office sufficient books for the registration and transfer of the
Certificates, which books shall be available for inspection by the Authority, the County or any
Owner or his agent duly authorized in writing upon reasonable prior notice during regular
business hours and under reasonable conditions; and upon presentation for such purpose the
Trustee shall, under such reasonable regulations as it may prescribe, register or transfer the
Certificates on such books as hereinabove provided.
SECTION 2.08. Temporary Certificates. The Certificates may be initially
executed and delivered in temporary fonn exchangeable for definitive Certificates when ready
for delivery, which temporary Certificates shall be printed, lithographed or typewritten, shall be
of such authorized denominations as may be detennined by the Trustee, shall be in fully
SF2-77478.2 25 40511-105-PCM-08/04/97
registered form and shall contain such reference to any of the provisions hereof as may be
appropriate. Every temporary Certificate shall be executed and delivered by the Trustee upon
the same conditions and terms and in substantially the same manner as definitive Certificates. If
the Trustee executes and delivers temporary Certificates, it will prepare and execute definitive
Certificates, thereupon the temporary Certificates may be surrendered at the Principal Corporate
Trust Office of the Trustee in exchange for such definitive Certificates, and until so exchanged
such temporary Certificates shall be entitled to the same benefits hereunder as definitive
Certificates executed and delivered hereunder.
SECTION 2.09. Certificates Mutilated, Lost, Destroyed or Stolen. If any
Certificate shall become mutilated, the Trustee, at the expense of the Owner thereof, shall
execute and deliver a new Certificate of like tenor and Certificate Payment Date in exchange
and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the
Certificate so mutilated. Every mutilated Certificate so surrendered to the Trustee shall be
cancelled by it. If any Certificate shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Trustee, and if such evidence is satisfactory to the
Trustee and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of
the Owner thereof, shall execute and deliver a new Certificate of like tenor, series and
Certificate Payment Date, numbered as the Trustee shall determine, in lieu of and in
substitution for the Certificate so lost, destroyed or stolen. The Trustee may require payment of
a sum not exceeding the actual cost of preparing each new Certificate executed and delivered by
it under this Section and of the expenses which may be incurred by it under this Section. Any
Certificate executed and delivered under the provisions of this Section in lieu of any Certificate
alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the
benefits hereof with all other Certificates executed and delivered hereunder, and the Trustee
shall not be required to treat both the original Certificate and any replacement Certificate as
being Outstanding for the purpose of detennining the amount of Certificates which may be
executed and delivered hereunder or for the purpose of determining any percentage of
Certificates Outstanding hereunder, but both the original and replacement Certificate shall be
treated as one and the same. Notwithstanding any other provision of this Section, in lieu of
executing and delivering a new Certificate for a Certificate which has been lost, destroyed or
stolen and which has matured, the Trustee may make payment of the principal and interest
evidenced and represented by such Certificate to the Owner thereof upon receipt of indemnity
satisfactory to the Trustee.
SECTION 2.10. Destruction of Cancelled Certificates. Whenever in this Trust
Agreement provision is made for the surrender to or cancellation by the Trustee of any
Certificates, the Trustee shall cancel and destroy such Certificates and deliver a certificate of
such cancellation and destruction to the County.
SECTION 2.11. Special Covenants as to Book-Entry Only System.
(a) Except as otherwise provided in subsections (b) and (c) of this Section, the
1997 Certificates initially executed and delivered hereunder shall be registered in the name of
Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"),
or such other nominee as DTC shall request pursuant to the Representations Letter. Payment of
SF2-77478.2 26 40511-105-PCM-08/04/97
the principal and interest represented by each Certificate registered in the name of Cede & Co.
shall be made to the account, in the manner and at the address indicated in or pursuant to the
Representations Letter.
(b) The 1997 Certificates executed and delivered hereunder shall be in the
fonn of a single fully registered certificate for each Certificate Payment Date representing the
aggregate principal amount of the 1997 Certificates with such Certificate Payment Date. Upon
initial execution of the 1997 Certificates, the ownership of all such 1997 Certificates shall be
registered in the registration records maintained by the Trustee pursuant to Section 2.07 in the
name of Cede & Co., as nominee of DTC, or such other nominee as DTC shall request
pursuant to the Representations Letter. The Trustee, the County, the Authority and any paying
agent may treat DTC (or its nominee) as the sole and exclusive owner of the 1997 Certificates
registered in its name for the purposes of payment of the principal or prepayment price of and
interest represented by such 1997 Certificates, selecting the 1997 Certificates or portions
thereof to be prepaid, giving any notice pennitted or required to be given to the Owners under
this Trust Agreement, registering the transfer of the 1997 Certificates, obtaining any consent or
other action to be taken by the Owners and for all other purposes whatsoever; and neither the
Trustee, the Authority nor the County nor any paying agent shall be affected by any notice to
the contrary. Neither the Trustee, the Authority nor the County nor any paying agent shall
have any responsibility or obligation to any Participant (which shall mean, for purposes of this
Section, securities brokers and dealers, banks, trust companies, clearing corporations and other
entities, some of whom directly or indirectly own DTC), any person claiming a beneficial
ownership interest in the 1997 Certificates under or through DTC or any Participant, or any
other person which is not shown on the registration records as being an Owner, with respect to
(i) the accuracy of any records maintained by DTC or any Participant, (ii) the payment by DTC
or any Participant of any amount in respect of the principal or redemption price of or interest
represented by such 1997 Certificates, (iii) any notice which is permitted or required to be given
to the Owners under the Trust Agreement, (iv) the selection by DTC or any Participant of any
person to receive payment in the event of a partial prepayment of the 1997 Certificates, or
(v) any consent given or other action taken by DTC as Owner. The Trustee shall pay all
principal and premium, if any, and interest represented by the 1997 Certificates only at the
times, to the accounts, at the addresses and otherwise in accordance with the Representations
Letter. Upon delivery by DTC to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of its then existing nominee, the Certificates
will be transferable to such new nominee in accordance with subsection (f) of this Section.
(c) In the event that the County detennines that it is in the best interests of the
beneficial owners of the 1997 Certificates that they be able to obtain certificates evidencing the
1997 Certificates, the Trustee shall, upon the written instruction of the County, so notify DTC,
whereupon DTC shall notify the Participants of the availability through DTC of such
certificates. In such event, the 1997 Certificates will be transferable in accordance with
subsection (f) of this Section. DTC may detennine to discontinue providing its services with
respect to the 1997 Certificates at any time by giving written notice of such discontinuance to
the County and the Trustee and discharging its responsibilities with respect thereto under
applicable law. In such event, the Certificates will be transferable in accordance with
subsection (f) of this Section. Whenever DTC requests the County to do so, the County will
SF2-77478.2 27 40511-105-PCM-08/04/97
cooperate with DTC in taking appropriate action after reasonable notice to arrange for another
securities depository to maintain custody of all certificates evidencing the 1997 Certificates then
Outstanding. In such event, the 1997 Certificates will be transferable to such securities
depository in accordance with subsection (f) of this Section, and thereafter, all reference in this
Trust Agreement to DTC or its nominee shall be deemed to refer to such successor securities
depository and its nominee, as appropriate.
(d) Notwithstanding any other provision of this Trust Agreement to the
contrary, so long as all 1997 Certificates Outstanding are registered in the name of any nominee
of DTC, all payments with respect to the principal and interest represented by each such 1997
Certificate and all notices with respect to each such 1997 Certificate shall be made and given,
respectively, to DTC as provided in the Representations Letter.
(e) The Trustee is hereby authorized and requested in connection with any
successor nominee for DTC and any successor depository, to enter into comparable
arrangements, and shall have the same rights with respect to its actions thereunder as it has with
respect to its actions under this Trust Agreement.
(f) In the event that any transfer or exchange of 1997 Certificates is
authorized under subsection (b) or (c) of this Section, such transfer or exchange shall be
accomplished upon receipt by the Trustee from the registered owner thereof of the 1997
Certificates to be transferred or exchanged and appropriate instruments of transfer to the
permitted transferee, all in accordance with the applicable provisions of Section 2.06. In the
event Certificates are executed and delivered to holders other than Cede & Co., its successor as
nominee for DTC as holder of all the 1997 Certificates, another securities depository as holder
of all the 1997 Certificates, or the nominee of such successor securities depository, the
provisions of Sections 2.02, 2.03 and 2.06 shall also apply to, among other things, the
registration, exchange and transfer of the 1997 Certificates and the method of payment of
principal of, premium, if any, and interest represented by the 1997 Certificates.
ARTICLE III
PROCEEDS OF CERTIFICATES
SECTION 3.01. Delivery of 1997 Certificates. The Trustee is hereby
authorized to execute and deliver the 1997 Certificates to the 1997 Purchaser pursuant to the
1997 Certificates of Participation Purchase Contract upon receipt of a Written Request of the
County and upon receipt of the proceeds of sale thereof.
SECTION 3.02. Deposit of Proceeds of 1997 Certificates.
The proceeds received from the sale of the 1997 Certificates shall be deposited by
the Trustee in the following respective finds, as directed by a Written Request of the County.
SF2-77478.2 28 40511-105-PCM-08/04/97
(1) The Trustee shall deposit in the Lease Fund established pursuant to
Section 3.07(b) of the Facility Lease the amount of $ , which is equal to the
accrued interest received upon the sale of the 1997 Certificates.
(2) The Trustee shall deposit in the Trust Administration Fund to be
established pursuant to Section 5.03 the amount of $5,000.
(3) The Trustee shall deposit in the Costs of Issuance Fund, which fund the
Trustee hereby agrees to establish and maintain, the amount of $ . All
money in the Costs of Issuance Fund shall be used and withdrawn by the Trustee to pay
the Costs of Issuance of the Certificates upon receipt of a Request of the County filed
with the Trustee, each of which shall be sequentially numbered and shall state the person
to whom payment is to be made, the amount to be paid, the purpose for which the
obligation was incurred and that such payment is a proper charge against said fund.
Upon the payment of all Costs of Issuance as evidenced by a Request of the County, or
upon the earlier Written Request of the County, any remaining balance in the Costs of
Issuance Fund shall be transferred to the Acquisition and Construction Fund.
(4) The Trustee shall deposit in the Certificate Reserve Fund to be established
pursuant to Section 3.07(c) of the Facility Lease the amount of $ , which
is a sum equal to the Certificate Reserve Fund Requirement, as such term is defined in
the Facility Lease.
(5) The Trustee shall transfer to the Prior Trustee, for deposit in the Escrow
Fund, the amount of $
(6) The Trustee shall set aside the remainder of said proceeds in a separate
fund to be known as the "Acquisition and Construction Fund," which the Trustee hereby
agrees to establish and maintain. The money in the Acquisition and Construction Fund
shall be used and disbursed in the manner provided in Section 3.03.
SECTION 3.03. Use of Moneys in the Acquisition and Construction Fund. All
moneys in the Acquisition and Construction Fund shall be held by the Trustee in trust and
applied by the Trustee to the payment of costs of the Capital Improvements and of expenses
incident thereto (or for making reimbursements to the Authority or the County or any other
person, firm or corporation for such costs theretofore or thereafter paid by him or it). The
Authority, to the extent it has any interest in the Acquisition and Construction Fund, and the
County hereby pledge and grant a lien on and a security interest in the Acquisition and
Construction Fund to the Trustee in order to secure the County's obligation to pay the Base
Rental Payments in the event of a default under the Facility Lease.
Before any payment is made from the Acquisition and Construction Fund by the
Trustee (except for payments made on the date of execution and delivery of the 1997
Certificates for the purpose of paying rental to the County under the Site Lease or reimbursing
the Authority or the County for costs of Capital Improvements previously paid, which payments
shall be made from the Acquisition and Construction Fund upon Written Request of the
SF2-77478.2 29 40511-105-PCM-08/04/97
County), the County shall cause to be filed with the Trustee a Written Request of the County
showing with respect to each payment to be made:
(i) the item number of the payment;
(ii) the name and address of the person to whom payment is due;
(iii) the amount to be paid; and
(iv) the purpose for which the obligation to be paid was incurred.
Upon receipt of each such Written Request, the Trustee will pay the amount set
forth in such Written Request as directed by the terms thereof. The Trustee need not make any
such payment if it has received notice of any lien, right to lien or attachment upon, or claim
affecting the right to receive payment of, any of the moneys to be so paid, which has not been
released or will not be released simultaneously with such payment.
When a Certificate of Completion shall be delivered to the Trustee by the County
stating that all such costs of construction and incidental expenses have been determined and paid
(or that all of such costs and expenses have been paid less specified claims which are subject to
dispute and for which a retention in the Acquisition and Construction Fund is to be maintained
in the full amount of such claims until such dispute is resolved). Upon the receipt of the final
Certificate of Completion, the Trustee shall transfer any remaining balance in the Acquisition
and Construction Fund and not needed for Acquisition and Construction Fund purposes (but less
the amount of any such retention) to the Certificate Reserve Fund established under the Facility
Lease to the extent necessary to make the amount on deposit therein equal the Certificate
Reserve Fund Requirement (as such tern is defined in the Facility Lease) and shall transfer any
excess to the County.
SECTION 3.04. Execution and Delivery of Additional Certificates. In addition .
to the 1997 Certificates, the County, the Authority and the Trustee may by Supplemental Trust
Agreement provide for the execution and delivery of Additional Certificates representing Base
Rental Payments, and the Trustee may execute and deliver to or upon the Written Request of
the Authority, such Additional Certificates, in such principal amount as shall reflect the
additional principal component of the Base Rental Payments, but only upon compliance by the
County and the Authority with the provisions of Section 3.05, and subject to the following
specific conditions, which are hereby made conditions precedent to the execution and delivery
of any such Additional Certificates:
(a) The County and the Authority shall not be in default under the Trust
Agreement or any Supplemental Trust Agreement or under the Site Lease or under the
Facility Lease.
(b) Said Supplemental Trust Agreement shall require that the proceeds of the
sale of such Additional Certificates shall be applied (i) to the construction or acquisition
of Subsequent Phases of the Project, (ii) if necessary, for the completion of the Project
SF2-77478.2 30 40511-105-PCM-08/04/97
or rebuilding or replacement of the Project following a casualty loss, or (iii) for the
refunding or repayment of any Certificates then Outstanding, including the payment of
costs and expenses of and incident to the authorization and sale of such Additional
Certificates. Said Supplemental Trust Agreement may also provide that a portion of
such proceeds shall be applied to the payment of the interest components due or to
become due with respect to said Additional Certificates during at least the estimated
period of any construction.
(c) Said Supplemental Trust Agreement shall provide, if necessary, that from
such proceeds or other sources an amount shall be deposited in the Certificate Reserve
Fund so that following such deposit there shall be on deposit in the Certificate Reserve
Fund an amount at least equal to the Certificate Reserve Fund Requirement.
(d) The Additional Certificates shall be payable as to principal on February 1
of each year in which principal components are due and shall be payable as to interest as
specified in such Supplemental Trust Agreement or as provided herein.
(e) The aggregate principal amount of Certificates executed and delivered and
at any time Outstanding hereunder shall not exceed any limit imposed by law, by this
Trust Agreement or by any Supplemental Trust Agreement.
(f) The Facility Lease shall have been amended, if necessary, so that the Base
Rental Payments payable by the County thereunder shall equal the principal and interest
components, represented by such Additional Certificates and all other Certificates to be
Outstanding after such Additional Certificates are executed and delivered, payable at
such times and in such manner as may be necessary to provide for the payment of the
principal and interest represented by such Certificates.
(g) Said Supplemental Trust Agreement shall provide for Certificate Payment
Dates and for mandatory prepayments of Certificates in amounts sufficient to provide for
payment of the Certificates when principal and interest components of Base Rental are
due.
(h) The Facility Lease shall have been amended so as to lease to the County
the Subsequent Phase of the Project, if applicable.
(i) All constn►ction to be financed from the proceeds of such Additional
Certificates shall be performed pursuant to a Construction Contract or Contracts between
the Authority and a Contractor, or, where permitted by statute, shall be performed by
the County by force account or by its own staff. Each said Construction Contract shall
provide for a guaranteed maximum price for the construction to be performed
thereunder, which price shall be in an amount clearly available from the proceeds of said
Additional Certificates and any other moneys legally available therefor, and each said
contract shall require the Contractor thereunder to furnish a performance bond in an
amount at least equal to one hundred percent (100%) of said price as security for the
faithful performance of the contract and a labor and materials (payment) bond at least
SF2-77478.2 31 40511-105-PCM-08/04/97
equal to one hundred percent. (100%) of said price as security for the payment of all
persons performing labor or furnishing materials in connection with the contract. Said
bonds shall be underwritten by responsible corporate sureties.
0) If the proceeds of such Additional Certificates are to be used, in whole or
in part, to finance construction on real property not described in the Site Lease, (1) the
Site Lease shall have been amended so as to lease to the Authority such additional real
property; and (2) the Facility Lease shall have been amended so as to lease to the
County such additional real property.
SECTION 3.05. Proceedings for Authorization of Additional Certificates.
Whenever the Authority and the County shall detennine to execute and deliver any Additional
Certificates pursuant to Section 3.04, the Authority, the County and the Trustee shall enter into
a Supplemental Trust Agreement providing for the execution and delivery of such Additional
Certificates, specifying the maximum principal amount of such Additional Certificates and
prescribing the terms and conditions of such Additional Certificates.
Such Supplemental Trust Agreement shall prescribe the form or forms of such
Additional Certificates and, subject to the provisions of Section 3.04, shall provide for the
distinctive designation, denominations, dates, payment dates, interest rates, interest payment
dates, provisions for prepayment (if desired) and places of payment of principal and interest.
Before such Additional Certificates shall be executed and delivered, the County
and the Authority shall file or cause to be filed the following documents with the Trustee:
(a) An Opinion of Counsel setting forth (1) that such Counsel has examined
the Supplemental Trust Agreement and the amendment to the Facility Lease required by
Section 3.04(f), (h) and 0); (2) that the execution and delivery of the Additional
Certificates have been duly authorized by the County and the Authority; (3) that said
amendment to the Facility Lease and the Supplemental Trust Agreement, when duly
executed by the County and the Authority, will be valid and binding obligations of the
County; (4) that any amendment to the Site Lease required by Section 3.040) has been
duly authorized, executed and delivered; and (5) that the amendment to the Facility
Lease has been duly authorized, executed and delivered.
(b) A certified copy of a resolution of the Board of Supervisors of the County
authorizing the execution of the amendments to the Facility Lease required by Section
3.04(f), (h) and 0).
(c) An executed counterpart or duly authenticated copy of any amendment to
the Facility Lease required by Section 3.04(f), (h) and 0).
(d) A Certificate of the County stating that the insurance required by
Sections 5.01, 5.02, 5.03 and 5.04 of the Facility Lease is in effect.
SF2-77478.2 32 40511-105-PCM-08/04/97
(e) If the proceeds of such Additional Certificates are to be used in whole or
in part to finance construction on real property not then described in the Site Lease,
(1) an executed counterpart or duly authenticated copy of the amendment to the Site
Lease required by Section 3.040) and (2) a certified copy of a resolution of the Board of
Supervisors of the County authorizing the execution of the amendment to the Site Lease.
Upon the delivery to the Trustee of the foregoing instruments, the Trustee shall
execute and deliver said Additional Certificates, in the aggregate principal amount specified in
such Supplemental Trust Agreement, to, or upon the Written Request of, the Authority.
ARTICLE IV
PREPAYMENT OF CERTIFICATES
SECTION 4.01. Terms of Prepayment. (a) The Certificates are subject to
prepayment on any date prior to their respective Certificate Payment Dates, as a whole, or in
part by lot within each Certificate Payment Date so that the aggregate annual amounts of
principal, interest and Accreted Interest, as the case may be, represented by the Certificates
which shall be payable after such prepayment date shall correspond to the principal component,
interest component and Accreted Interest component, as the case may be, of the reduced Base
Rental Payments resulting from a casualty loss or governmental taking of the Demised Premises
and the Project or portions thereof, from prepaid Base Rental Payments made by the County
from funds received by the County from any title insurance or due to such casualty loss or
governmental taking, if such amounts are not used to repair or replace the Demised Premises
and the Project in accordance with the provisions of the Facility Lease, under the circumstances
and upon the conditions and'terms prescribed herein and in the Facility Lease, at a prepayment
price equal to the sum of the principal amount, plus accrued interest represented thereby to the
date fixed for prepayment, without premium.
. (b) The 1997 Certificates payable after February 1, shall also be subject
to prepayment prior to their respective stated Certificate Payment Dates, at the option of the
County, as a whole, or in part in any order of, and in amounts of 1997 Certificates payable on,
Certificate Payment Dates specified by the County, and by lot within any such Certificate
Payment Date if less than all of the 1997 Certificates of such Certificate Payment Date be
prepaid, from any source of available funds, on any date on or after February 1, , at the
principal amount represented thereby plus accrued interest represented thereby to the date fixed
for prepayment, plus a premium, if any, set forth below as a percentage of such principal
amount:
Prepayment Dates Premiums
[ to come]
(c) 1997 Certificates with a Certificate Payment Date of February 1, are
al.so subject to mandatory prepayment prior to their stated Certificate Payment Date in part on
February 1 of each year on and after February by lot, from and in the amount of the
SF2-77478.2 33 40511-105-PCM-08/04/97
principal components of the Base Rental Payments applicable thereto and due and payable on
such dates, at a prepayment price equal to the sum of the principal amount represented thereby
plus accrued interest represented thereby to the date of prepayment, without premium. (A
schedule showing such Base Rental Payments due and payable on such dates is attached as
Exhibit C. Such schedule shall be adjusted to the extent that the Base Rental Payments schedule
attached to the Facility Lease is adjusted.)
(d) 1997 Certificates with a Certificate Payment Date of February 1, are
also subject to mandatory prepayment prior to their stated Certificate Payment Date in part on
February 1 of each year on and after February 1, , by lot, from and in the amount of the
principal components of the Base Rental Payments applicable thereto and due and payable on
such dates, at a prepayment price equal to the sum of the principal amount represented thereby
plus accrued interest represented thereby to the date of prepayment, without premium. (A
schedule showing such Base Rental Payments due and payable on such dates is attached as
Exhibit C. Such schedule shall be adjusted to the extent that the Base Rental Payments schedule
attached to the Facility Lease is adjusted.)
SECTION 4.02. Selection of Certificates for Prepayment. Whenever less than
all the Outstanding Certificates payable on any one Certificate Payment Date are to be prepaid
on any one date, the Trustee shall select the Certificates of such Certificate Payment Date to be
prepaid from the Outstanding Certificates payable on such Certificate Payment Date by lot in
any manner that the Trustee deems appropriate, and the Trustee shall promptly notify the
Authority and the County in writing of the numbers of the Certificates so selected for
prepayment on such date. For purposes of such selection, Certificates shall be deemed to be
composed of $5,000 portions, and any such portion may be separately prepaid.
SECTION 4.03. Notice of P=ayment. Notice of prepayment shall be mailed
(at the expense of the County), first class postage prepaid, to the respective Owners of any
Certificates designated for prepayment at their addresses appearing on the books required to be
kept by the Trustee pursuant to the provisions of Section 2.07 not less than thirty (30) nor more
than sixty (60) days prior to the prepayment date. Each notice of prepayment shall state the
prepayment date, the prepayment place and the prepayment price, shall designate the serial
numbers of the Certificates to be prepaid by giving the individual number of each Certificate or
by stating that all Certificates between two stated numbers, both inclusive, have been called for
prepayment, and shall require that such Certificates be then surrendered for prepayment; and
shall also state that the interest represented by the Certificates designated for prepayment shall
cease to accrue from and after such prepayment date and that on such prepayment date there
will become due and payable on each of the Certificates designated for prepayment the
prepayment price represented thereby. Such notice shall, in addition to setting forth the above
information, in the case of each Certificate called for prepayment in part only state the amount
of the principal amount represented thereby which is to be prepaid. Any notice mailed as
provided herein shall be conclusively presumed to have been given, whether or not such Owner
receives the notice.
In case of the prepayment as permitted herein of all the Certificates then
Outstanding, or of all of the Certificates of any one series then Outstanding, or of all the
SF2-77478.2 34 40511-105-PCM-08/04/97
Certificates of any one series and Certificate Payment Date then Outstanding, notice of
prepayment shall be given by mailing as hereinabove provided, except that the notice of
prepayment need not specify the serial numbers of the Certificates to be prepaid.
The Trustee shall give notice of prepayment of any Certificates to be prepaid
upon receipt of a Written Request of the County (which request shall be given to the Trustee at
least forty-five (45) days prior to the date fixed for prepayment), but only after the County shall
have made a prepaid Base Rental Payment to the Trustee and the Trustee shall have deposited
in the Prepayment Fund established pursuant to Section 5.02(c) such prepaid Base Rental
Payment in an amount sufficient for the payment of the prepayment price plus accrued interest
represented by all Certificates to be prepaid (or the Trustee determines that a prepaid Base
Rental Payment will be made available to it in an amount sufficient and in time sufficient for
such purpose), together with the estimated expense of giving such notice.
SECTION 4.04. Partial Prepayment of Certificates. Upon surrender of any
Certificate prepaid in part only, the Trustee shall execute and deliver to the Owner thereof a
new Certificate or Certificates representing the unprepaid principal amount or Accreted Value,
as the case may be, of the Certificate surrendered.
SECTION 4.05. Effect of Prepayment. If notice of prepayment has been duly
given as aforesaid and moneys for the payment of the prepayment price on the Certificates to be
prepaid are held by the Trustee, then on the prepayment date designated in such notice the
Certificates so called for prepayment shall become payable at the prepayment price specified in
such notice; and from and after the date so designated interest or Accreted Interest, as the case
may be, represented by the Certificates so called for prepayment shall cease to accrue, such
Certificates shall cease to be entitled to any benefit or security hereunder and the Owners of
such Certificates shall have no rights in respect thereof except to receive payment of the
prepayment price represented thereby. The Trustee shall, upon surrender for payment of any of
the Certificates to be prepaid, pay such Certificates at the prepayment price thereof.
All Certificates prepaid pursuant to the provisions of this Article shall be
cancelled by the Trustee and shall not be redelivered.
ARTICLE V
RENTAL PAYMENTS
SECTION 5.01. Pledge of Base Rental Payments; Base Rental Payment Fund.
The Base Rental Payments are hereby irrevocably pledged to and shall be used for the punctual
payment of the interest and principal represented by the Certificates (including Additional
Certificates delivered pursuant hereto), and the Base Rental Payments shall not be used for any
other purpose while any of the Certificates (including Additional Certificates delivered pursuant
hereto) remain Outstanding. This pledge shall constitute a first and exclusive lien on the Base
Rental Payments in accordance with the terms hereof.
SF2-77478.2 35 40511-105-PCM-08/04/97
All Base Rental Payments shall be paid directly by the County to the Trustee, and
if received by the Authority at any time shall be deposited by the Authority with the Trustee
within one business day after the receipt thereof. All Base Rental Payments shall be held in
trust by the Trustee in the Base Rental Payment Fund, which fund the Trustee hereby agrees to
establish and maintain so long as any Certificates are Outstanding, for the benefit of the County
until deposited in the finds provided in Section 5.02, whereupon they shall be held in trust by
the Trustee in such funds for the benefit of the Owners from time to time.
Pursuant to Section 25350.55 of the California Government Code, the County has
elected to guarantee Base Rental Payments paid by the County under the Facility Lease. On or
before each Interest Payment Date, if the County has insufficient fiords to make the installment
of Base Rental Payment due on such Interest Payment Date, the County shall so notify the
Trustee. Upon receipt of such notification, the Trustee shall immediately notify the State
Controller and shall request from the State Controller the amount by which the Base Rental
Payment due on such Interest Payment Date exceeds the amount on deposit in the Base Rental
Payment Fund. The Trustee is hereby instructed and hereby agrees to receive such moneys
transferred by the State Controller and to the extent moneys on deposit in the Certificate
Reserve Fund were used in lieu of such Base Rental Payments, to replenish the Certificate
Reserve Fund and otherwise to deposit the funds into the Base Rental Payment Fund.
SECTION 5.02. Deposit of Base Rental Payment . The Trustee shall deposit the
Base Rental Payments contained in the Base Rental Payment Fund at the times and in the
manner hereinafter provided in the following respective funds, each of which the Trustee hereby
agrees to establish and maintain so long as any Certificates are Outstanding, and the moneys in
each of such funds shall be disbursed only for the purposes and uses hereinafter authorized.
(a) Interest Fund. The Trustee, on February 1 and August 1 of each year
(commencing on February 1, 1998), shall deposit in the Interest Fund that amount of
moneys representing the portion of the Base Rental Payments designated as interest
components coming due on each such February 1 and August 1 date, respectively.
Moneys in the Interest Fund shall be used and withdrawn by the Trustee solely for the
purpose of paying the interest represented by the Certificates when due and payable.
(b) Principal Fund. The Trustee, on February 1 of each year (commencing
on February 1, 1998), shall deposit in the Principal Fund that amount of moneys
representing the portions of the Base Rental Payments designated as the principal
component and as coming due on such February 1 date. Moneys in the Principal Fund
shall be used and withdrawn by the Trustee solely for the purpose of paying the principal
represented by the Certificates when due and payable, including the mandatory
prepayment of any Certificates representing the principal components of Base Rental
payable in more than one year.
(c) Prepayment Fund. The Trustee, on the prepayment date specified in the
Written Request of the County filed with the Trustee at the time that any prepaid Base
Rental Payment is paid to the Trustee pursuant to the Facility Lease, shall deposit in the
Prepayment Fund that amount of moneys representing the portion of the Base Rental
SF2-77478.2 36 40511-105-PCM-08/04/97
Payments designated as prepaid Base Rental Payments. Moneys in the Prepayment Fund
shall be used and withdrawn by the Trustee solely for the purpose of paying the interest
and principal and any applicable premium represented by the Certificates to be prepaid.
SECTION 5.03. Trust Administration Fund. The Trustee shall deposit in the
Trust Administration Fund (the initial payment into which is provided for in Section 3.02(2) and
which fund the Trustee hereby agrees to establish and maintain so long as any Certificates are
Outstanding) all amounts received from the County to be applied as Additional Payments under
the Facility Lease, to be held by the Trustee for the benefit of the County until disbursed. The
moneys in the Trust Administration Fund shall be disbursed by the Trustee upon the Written
Request of the Authority, with the approval of the Assistant County Administrator - Finance of
the County, or a Deputy County Administrator of the County, or the duly authorized
representative or representatives of any of the above, endorsed thereon, for the payment of
administrative costs of the Authority, including salaries, wages, all expenses, compensation and
indemnification of the Trustee payable by the Authority under this Trust Agreement, fees of the
auditors, accountants, attorneys or architects and all other necessary administrative costs of the
Authority or charges required to be paid by it in order to maintain its corporate existence or to
comply with the ten-ns of the Certificates or of this Trust Agreement. The Trustee shall, from
time to time and as often as necessary to replenish and maintain a minimum balance of five
thousand dollars ($5,000) in said Fund, give notice to the County of such Additional Payments
required to be paid pursuant to the Facility Lease.
SECTION 5.04. Establishment and Application of 1997 Rebate Fund. (a) The
Trustee shall establish and maintain a fund separate from any other fund established and
maintained hereunder designated as the 1997 Rebate Fund. Within the 1997 Rebate Fund, the
Trustee shall maintain such accounts as shall be specified in a Written Request of the County to
be necessary in order to comply with the ten-ns and requirements of the Tax Certificate. All
money at any time deposited in the 1997 Rebate Fund shall be held by the Trustee in trust, to
the extent required to satisfy the Rebate Requirement (as defined in the Tax Certificate) for
payment to the federal government of the United States of America. The Owners of any
Certificates shall have no rights in or claim to such money. All amounts deposited into or on
deposit in the 1997 Rebate Fund shall be governed by this Section, by Section 8.07 of the
Facility Lease and by the Tax Certificate (which is incorporated herein by reference). The
Trustee shall be deemed conclusively to have complied with such provisions if it follows a
Written Request of the County including supplying all necessary information in the manner
provided in the Tax Certificate and shall have no liability or responsibility to enforce
compliance by the County with the ten-ns of the Tax Certificate or the tax covenants in this
Trust Agreement.
(b) Computations of the Rebate Requirement shall be furnished to the Trustee
by or on behalf of the County in accordance with the Tax Certificate.
(c) The Trustee shall have no obligation to rebate any amounts required to be
rebated pursuant to this Section other than from moneys held in the 1997 Rebate Fund or from
other moneys provided to it by the County.
SF2-77478.2 37 40511-105-PCM-08/04/97
(d) The Trustee shall invest all amounts held in the 1997 Rebate Fund in
Permitted Investments specified in a Written Request of the County or, if no such Written
Request is filed with the Trustee, in Pennitted Investments described in clause (9) of the
definition thereof, subject to any restrictions set forth in a Written Request of the County.
(e) Upon receipt of the County's Written Request, the Trustee shall remit part
or all of the balances in the 1997 Rebate Fund to the United States, as so directed. In addition,
if the County so directs, the Trustee will deposit moneys into or transfer moneys out of the
1997 Rebate Fund from or into such accounts or finds as directed by the County's written
directions. Any funds remaining in the 1997 Rebate Fund after prepayment and payment of all
of the Certificates, or provision made therefor satisfactory to the Trustee, and payment and
satisfaction of any Rebate Requirement, shall be withdrawn and remitted to the County upon its
Written Request to the Trustee.
(f) Notwithstanding any other provision of this Trust Agreement, including in
particular Article X hereof, the obligation to remit the Rebate Requirement to the United States
and to comply with all other requirements of this Section, Section 8.07 of the Facility Lease and
the Tax Certificate shall survive the defeasance or payment in full of the Certificates.
SECTION 5.05. Investments. Upon the Written Request of the County, any
moneys held by the Trustee in the Costs of Issuance Fund, Base Rental Payment Fund, the
Acquisition and Construction Fund or the Trust Administration Fund shall be invested as
directed by the County in Permitted Investments which will, as nearly as practicable, mature on
or before the dates when such moneys are anticipated to be needed for disbursement hereunder
or under the Facility Lease. Such Written Requests of the County shall not be inconsistent with
the investments permitted under this Trust Agreement. If no such Written Request is filed with
the Trustee, the Trustee shall invest such moneys in Permitted Investments described in
clause (9) of the definition thereof and promptly request investment instructions from the
County. The Trustee or any of its affiliates may act as principal or agent in the acquisition or
disposition of any such investment. The Trustee shall not be liable or responsible for any loss
suffered in connection with any such investment made by it under the teens of and in
accordance with this Section. The Trustee may sell or present for redemption any obligations
so purchased whenever it shall be necessary in order to provide moneys to meet any payment of
the funds so invested, and the Trustee shall not be liable or responsible for any losses resulting
from any such investment sold or presented for redemption. Any interest or profits on such
investments shall be paid to the County on February I and August 1 of each year, except that
any interest or profits on investment of any moneys held by the Trustee hereunder or pursuant
to the Facility Lease during the period of acquisition and construction of the Capital
Improvements and until the final Certificate of Completion is filed shall be deposited in the
Acquisition and Construction Fund.
The Trustee or any of its affiliates may act as sponsor or provide advisory or
administrative services in connection with any Permitted Investments.
The County acknowledges that to the extent regulations of the Comptroller of the
Currency or other applicable regulatory entity grant the County the right to receive brokerage
SF2-77478.2 38 40511-105-PCM-08/04/97
confirmations of security transactions as they occur, the County specifically waives receipt of
such confirmations to the extent permitted by law. The Trustee will furnish the County periodic
cash transaction statements which include detail for all investment transactions made by the
Trustee hereunder.
ARTICLE VI
COVENANTS
SECTION 6.01. Compliance with Trust Agreement. The Trustee will not
execute or deliver any Certificates in any manner other than in accordance with the provisions
hereof, and the Authority and the County will not suffer or pennit any default by them to occur
hereunder, but will faithfully comply with, keep, observe and perform all the agreements,
conditions, covenants and terms hereof required to be complied with, kept, observed and
perfonned by them.
SECTION 6.02. Compliance with or Amendment of Site Lease or Facility
Lease. The Authority and the County will faithfully comply with, keep, observe and perform
all the agreements, conditions, covenants and tenns contained in the Site Lease and the Facility
Lease required to be complied with, kept, observed and performed by them and will enforce the
Site Lease and the Facility Lease against the other party thereto in accordance with its terns.
The Authority and the County will not alter, amend or modify the Site Lease or
the Facility Lease without the prior written consent of the Trustee, which consent of the Trustee
shall be given only (i) if, it has been determined (which detennination shall be based upon an
Opinion of Counsel or a Certificate of the County), such alterations, amendments or
modifications are not materially adverse to the interests of the Owners, or (ii) to add to the
covenants and agreements of any party, other covenants to be observed, or to surrender any
right or power therein reserved to the County, or (iii) to cure, correct or supplement any
ambiguous or defective provision contained therein, or (iv) to resolve questions arising
thereunder, as the parties thereto may deem necessary or desirable and which has been
detennined (which detennination shall be based upon an Opinion of Counsel or Certificate of
the County) do not materially adversely affect the interests of the Owners of the Certificates, or
(v) to modify the legal description of the Demised Premises to conform to the requirements of
title insurance or otherwise to add or delete property descriptions to reflect accurately the
description of the parcels intended to be included therein, or (vi) to provide for the execution
and delivery of Additional Certificates pursuant to the terns hereof, or (vii) to provide for the
requirements of any Insurer in connection with the issuance of any Certificates Insurance Policy
or any entity providing a policy of municipal bond insurance or letter of credit or similar
financial instrument for deposit in the Certificate Reserve Fund established pursuant to the
Facility Lease to satisfy all or a portion of the Certificate Reserve Fund Requirement, so long
as such alterations, amendments or modifications are not materially adverse to the interests of
the Owners (based upon an Opinion of Counsel or a Certificate of the County), or (viii) if the
Trustee first obtains the written consents of the Owners of at least a majority in aggregate
principal amount of the Certificates then Outstanding and of any Insurer to such alterations,
amendments or modifications; provided, however, that no such alteration, amendment or
SF2-77478.2 39 40511-105-PCM-08/04/97
modification shall extend the date for the making of any Rental Payment, extend a Certificate
Payment Date or reduce the rate of interest or Accreted Interest, as the case may be,
represented by any Certificate or extend the time of payment of such interest or Accreted
Interest or reduce the amount of principal or Accreted Value represented thereby without the
prior written consent of the Owner of any Certificate so affected, nor shall any such alteration,
amendment or modification reduce the percentage of Owners whose consent is required for the
execution of any alteration, amendment or supplement.
SECTION 6.03. Observance of Laws and Regulations. The Authority and the
County will faithfully comply with, keep, observe and perform all valid and lawful obligations
or regulations now or hereafter imposed on them by contract, or prescribed by any law of the
United States of America or of the State of California, or by any officer, board or commission
having jurisdiction or control, as a condition of the continued enjoyment of each and every
franchise, right or privilege now owned or hereafter acquired by them, including their right to
exist and carry on their respective businesses, to the end that such franchises, rights and
privileges shall be maintained and preserved and shalt not'become abandoned, forfeited or in
any manner impaired.
SECTION 6.04. Other Liens. The County will keep the Demised Premises and
the Project and all parts thereof free from judgments and materialmen's and mechanics' liens
and free from all claims, demands, encumbrances and other liens of whatever nature or
character, and free from any claim or liability which might embarrass or hamper the County in
conducting its business or utilizing the Demised Premises and the Project, and the Trustee at its
option (after first giving the County ten days' written notice to comply therewith and failure of
the County to so comply within such ten-day period) may defend against any and all actions or
proceedings in which the validity hereof is or might be questioned, or may pay or compromise
any claim or demand asserted in any such actions or proceedings; provided, however, that, in
defending against any such actions or proceedings or in paying or compromising any such
claims or demands, the Trustee shall not in any event be deemed to have waived or released the
County from liability for or on account of any of its agreements and covenants contained herein,
or from its liability hereunder to defend the validity hereof and to perform such agreements and
covenants.
So long as any Certificates are Outstanding, neither the Authority nor the County
will create or suffer to be created any pledge of or lien on the Base Rental Payments other than
the pledge and lien hereof and the parity pledge and lien in favor of Owners of Additional
Certificates issued hereunder.
SECTION 6.05. Prosecution and Defense of Suits. The County will promptly,
upon request of the Trustee or any Owner, take such action from time to time as may be
necessary or proper to remedy or cure any cloud upon or defect in the title to the Demised
Premises or the Project or any part thereof, whether now existing or hereafter developing, will
prosecute all actions, suits or other proceedings as may be appropriate for such purpose and will
indemnify and save the Trustee and every Owner harmless from all cost, damage, expense or
loss, including attorneys' fees, which they or any of them may incur by reason of any such
cloud, defect, action, suit or other proceeding.
SF2-77478.2 40 40511-105-PCM-08/04/97
The County will defend against every action, suit or other proceeding at any time
brought against the Trustee or any Owner upon any claim arising out of the receipt, deposit or
disbursement of any of the Base Rental Payments or involving the rights of the Trustee or any
Owner hereunder; provided, however, that the Trustee or any Owner at its or his election may
appear in and defend any such action, suit or other proceeding. The County will indemnify and
hold harmless the Trustee and the Owners against any and all liability claimed or asserted by
any person arising out of any such receipt, deposit or disbursement, and will indemnify and
hold harmless the Owners and the Trustee against any attorneys' fees or other expenses which
any of them may incur in connection with any litigation or otherwise in connection with the
foregoing to which any of them may become a party in order to enforce their rights hereunder
or under the Certificates, provided that with respect to any such liability or expense suffered by
Owners, such litigation shall be concluded favorably to such Owners' contentions therein.
SECTION 6.06. Accounting; Records and Statements. The Trustee will keep
proper accounting records in which complete and correct entries shall be made of all
transactions made by the Trustee relating to the receipt, deposit and disbursement of the Base
Rental Payments and Additional Payments, and such accounting records shall be available for
inspection by the Authority, the County or any Owner or his agent duly authorized in writing
with prior notice at reasonable hours and under reasonable conditions. Not later than
December 1 in each year, commencing on December 1, 1998 and continuing so long as any
Certificates are Outstanding, the Authority will furnish to the Trustee, the County and any
Owner who may so request a complete statement covering the receipts, deposits and
disbursements of the Rental Payments for the twelve-month period ending on the preceding
June 30.
SECTION 6.07. Recordation and Filing. The Authority will file, record,
register, renew, refile and rerecord all such documents, including financing statements (or
continuation statements in connection therewith), as may be required by law in order to
maintain the security interest in the Base Rental Payments granted pursuant to, and the
assignment of the Facility Lease made pursuant to, the Assignment Agreement and this Trust
Agreement at all times as a security interest in the Base Rental Payments, all in such manner, at
such times and in such places as may be required and to the extent permitted by law in order to
fully perfect, preserve and protect the security of the Owners and the rights and security
interests of the Trustee, and the Authority will do whatever else may be necessary or be
reasonably required in order to perfect and continue such security interest and assignment of the
Facility Lease.
SECTION 6.08. Further Assurances. Whenever and so often as requested to do
so by the Trustee or any Owner, the Authority and the County will promptly execute and
deliver or cause to be executed and delivered all such other and further assurances, documents
or instruments and promptly do or cause to be done all such other and further things as may be
necessary or reasonably required in order to further and more fully vest in the Trustee and the
Owners all advantages, benefits, interests, powers, privileges and rights conferred or intended
to be conferred upon them hereby or by the Assignment Agreement or the Facility Lease.
SF2-77478.2 41 40511-105-PCM-08/04/97
SECTION 6.09. Continuing Disclosure. The County and the Trustee hereby
covenant and agree that they will comply with and carry out all of the provisions of the
Continuing Disclosure Agreement. Notwithstanding any other provision of the Trust
Agreement, failure of the County or the Trustee to comply with the Continuing Disclosure
Agreement shall not be considered an Event of Default; however, the Trustee may (and, at the
request of any Participating Underwriter (as defined in the Continuing Disclosure Agreement) or
the Owners of at least 25% aggregate principal amount of Outstanding 1997 Certificates, shall)
or any Owner or Beneficial Owner may take such actions as may be necessary and appropriate,
including seeking mandate or specific performance by court order, to cause the County or the
Trustee, as the case may be, to comply with its obligations tinder this Section. For purposes of
this Section, 'Beneficial Owner" means any person which has the power, directly or indirectly,
to vote or consent with respect to, or to dispose of ownership of, any 1997 Certificates
(including persons holding 1997 Certificates through nominees, depositories or other
intermediaries).
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
SECTION 7.01. Action on Default. If an Event of Default (as that term is
defined in Section 6.01 of the Facility Lease) occurs, then such Event of Default shall constitute
a default hereunder, and in each and every such case during the continuance of such Event of
Default the Trustee or the Owners of not less than a majority in aggregate principal amount
represented by the Certificates at the time Outstanding shall be entitled, upon notice in writing
to the County and the Authority, to exercise the remedies provided to the Authority in the
Facility Lease and to the Trustee in the Assignment Agreement.
SECTION 7.02. Other Remedies of the Trustee. The Trustee shall have the
right --
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the Authority or the County or any member, director, officer or
employee thereof, and to compel the Authority or the County or any such member,
director, officer or employee to perform or carry out its or his or her duties under law
and the agreements and covenants required to be performed by it or him or her contained
herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate
the rights of the Trustee; or
(c) by suit in equity upon the happening of any default hereunder to require
the Authority and the County and any members, directors, officers and employees
thereof to account as the trustee of an express trust.
SECTION 7.03. Non-Waiver. A waiver of any default or breach of duty or
contract by the Trustee shall not affect any subsequent default or breach of duty or contract or
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impair any rights or remedies on any such subsequent default or breach of duty or contract. No
delay or omission by the Trustee to exercise any right or remedy accruing upon any default or
breach of duty or contract shall impair any such right or remedy or shall be construed to be a
waiver of any such default or breach of duty or contract or an acquiescence therein, and every
right or remedy conferred upon the Trustee by law or by this Article may be enforced and
exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is
abandoned or detennined adversely to the Tnistee, the Trustee and the Authority and the
County shall be restored to their former positions, rights and remedies as if such action,
proceeding or suit had not been brought or taken.
SECTION 7.04. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy
shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing in law or in equity or by statute or otherwise and may be exercised without
exhausting and without regard to any other remedy conferred by any law.
SECTION 7.05. No Liability by the Authority to the Owners-, Indemnification.
Except as expressly provided herein, the Authority shall not have any obligation or liability to
the Owners with respect to the payment when due of the Rental Payments by the County, or
with respect to the performance by the County of the other agreements and covenants required
to be performed by it contained in the Facility Lease or herein, or with respect to the
performance by the Trustee of any right or obligation required to be performed by it contained
herein.
The Authority and the Trustee, and their members, directors, officers, agents,
employees and assignees, shall not be liable to the County or to any other party whomsoever for
any death, injury or damage that may result to any person or property by or from any cause
whatsoever in, on or about the Demised Premises and the Project. The County, to the extent
pennitted by law, shall indemnify and hold the Authority and the Trustee, and their members,
directors, officers, agents, employees and assignees, harmless from, and defend each of them
against, any and all claims, liens and judgments arising from the construction or operation of
the Demised Premises or the Project, including, without limitation, death of or injury to any
person or damage to property whatsoever occurring in, on or about the Demised Premises or
the Project regardless of responsibility for negligence, but excepting the active negligence of the
person or entity seeking indemnity.
SECTION 7.06. No Liabilityby the County to the Owners. Except for the
payment when due of the Rental Payments and the performance of the other agreements and
covenants required to be performed by it contained in the Facility Lease or herein, the County
shall not have any obligation or liability to the Owners with respect to the Trust Agreement or
the preparation, execution, delivery or transfer of the Certificates or the disbursement of the
Base Rental Payments by the Trustee to the Owners, or with respect to the performance by the
Trustee of any right or obligation required to be perfonned by it contained herein.
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SECTION 7.07. No Liability y the Trustee to the Owners. Except as expressly
provided herein, the Trustee shall not have any obligation or liability to the Owners with respect
to the payment when due of the Base Rental Payments by the County, or with respect to the
performance by the County of other agreements and covenants required to be performed by it
contained in the Facility Lease or herein.
SECTION 7.08. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Trust Agreement or the Certificates may
be prosecuted and enforced by the Trustee without the possession of any of the Certificates or
the production thereof in any proceeding relating thereto, and any such proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Owners of the Certificates in respect of which such judgment has been recovered.
SECTION 7.09. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article (which money shall not be deemed to include any money paid
by any Insurer under any Certificates Insurance Policy) shall be applied in the following order,
at the date or dates fixed by the Trustee:
FIRST, Costs and Expenses: to the payment of the costs and expenses of the
Trustee and of the Owners in declaring such Event of Default and exercising their rights and
remedies under this Article VII, including reasonable compensation to its or their agents,
attorneys and counsel;
SECOND, Interest: to the payment to the persons entitled thereto of all payments
of interest and Accreted Interest represented by the Certificates then due in the order of the due
date of such payments, and, if the amount available shall not be sufficient to pay in full any
payment or payments coming due on the same date, then to the payment thereof ratably,
according to the amounts due thereon, to the persons entitled thereto, without any discrimination
or preference; and
THIRD, Principal: to the payment to the persons entitled thereto of the unpaid
principal represented by any Certificates which shall have become due, whether on the Payment
Date or by call for prepayment, in the order of their due dates, with interest on the overdue
principal, Accreted Interest and interest represented by the Certificates at a rate equal to the rate
paid with respect to the Certificates and, if the amount available shall not be sufficient to pay in
full all the amounts due with respect to the Certificates on any date, together with such interest,
then to the payment thereof ratably, according to the amounts of principal due on such date to
the persons entitled thereto, without any discrimination or preference.
SECTION 7.10. Owners' Direction of Proceedings. The Owners of not less
than a majority in aggregate principal amount represented by the Certificates at the time
Outstanding shall have the right, by an instrument or concurrent instruments in writing executed
and delivered to the Trustee, and upon indemnification of the Trustee to its reasonable
satisfaction, to direct the method of conducting all remedial proceedings taken by the Trustee
SF2-77478.2 44 40511-105-PCM-08/04/97
hereunder, provided that such direction shall be otherwise in accordance with law and the
provisions of this Trust Agreement.
SECTION 7.11. Limitations on Suits. No Owner of any Certificate shall have
any right to institute any proceeding, judicial or otherwise, with respect to this Trust
Agreement, or for the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
1. such Owner has previously given written notice to the Trustee of a
continuing Event of Default;
2. the Owners of not less than a majority in principal amount of the
Outstanding Certificates shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee hereunder;
3. such Owner or Owners have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with such request;
and
4. the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity has failed to institute any such proceeding;
it being understood and intended that no one or more Owners of Certificates shall have any
right in any manner whatever by virtue of, or by availing of, any provision of this Trust
Agreement to affect, disturb or prejudice the rights of any other Owners of Certificates, or to
obtain or to seek to obtain priority or preference over any other Owners or to enforce any right
under this Trust Agreement, except in the manner herein provided and for the equal and ratable
benefit of all Owners of the Certificates.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Employment of the Trustee. The Authority and the County
hereby appoint and employ the Trustee to receive, deposit and disburse the Base Rental
Payments and Additional Payments, to prepare, execute, deliver and transfer the Certificates
and to perform the other functions contained herein; all in the manner provided herein and
subject to the conditions and terms hereof. By executing and delivering the Trust Agreement,
the Trustee accepts the appointment and employment hereinabove referred to and accepts the
rights and obligations of the Trustee provided herein, as well as the obligations of Trustee set
forth in Section 3.07(b), (c) and (d) of the Facility Lease, subject to the conditions and terms
hereof.
SECTION 8.02. Duties, Removal and Resignation of the Trustee. So long as no
Event of Default has occurred and is continuing, the Authority and the County, or the Owners
of a majority in aggregate principal amount represented by the Certificates at the time
SF2-77478.2 45 40511-105-PCM-08/04/97
Outstanding, may by an instrument in writing remove the Trustee initially a party hereto and
any successor thereto and may appoint a successor Trustee, but any Trustee hereunder shall be a
bank or trust company doing business and having a principal corporate trust office in California,
having (or, in the case of a bank or trust company included in a bank holding company system,
shall have a related bank holding company having) a combined capital (exclusive of borrowed
capital) and surplus of at least fifty million dollars ($50,000,000) and subject to supervision or
examination by federal or state authorities. If such bank or trust company (or a related bank
holding company) publishes a report of condition at.least annually, pursuant to law or to the
requirements of any supervising or examining authority above referred to, then for the purposes
of this Section the combined capital and surplus of such bank or trust company (or a related
bank holding company) shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
Any company into which the Trustee may be merged or converted or with which
it may be consolidated or any company resulting from any merger, conversion or consolidation
to which it shall be a party or any company to which the Trustee may sell or transfer all or
substantially all of its corporate trust business, provided that such company shall be eligible
under this Section, shall be the successor to the Trustee without the execution or filing of any
paper or further act, anything herein to the contrary notwithstanding.
The Trustee may at any time resign by giving written notice of such resignation
to the Authority, the County and the Owners, which notice to the Owners shall be mailed, first
class postage prepaid. Upon receiving such notice of resignation, the Authority and the County
shall promptly appoint a successor Trustee by an instnument in writing; provided, however, that
in the event the Authority and the County do not appoint a successor Trustee within thirty (30)
days following receipt of such notice of resignation, the resigning Trustee may petition the
appropriate court having jurisdiction to appoint a successor Trustee. Any resignation or
removal of a Trustee and appointment of a successor Trustee shall become effective only upon
acceptance of appointment by the successor Tnustee.
SECTION 8.03. Compensation and Indemnification of the Trustee. The
Authority shall from time to time, subject to any agreement then in effect with the Trustee, pay
the Trustee compensation for its services and reimburse the Trustee for all its advances and
expenditures hereunder, including but not limited to advances to and fees and expenses of
accountants, agents, appraisers, consultants, counsel or other experts employed by it in the
exercise and performance of its rights and obligations hereunder; provided, further, that the
Trustee shall have a lien for such compensation or reimbursement against any moneys held by it
in any of the funds established hereunder or under the Facility Lease (except that such
compensation or reimbursement shall be made first from the Trust Administration Fund
established pursuant to Section 5.03 or from interest and income received from the investment
of moneys on deposit in the Certificate Reserve Fund created under the Facility Lease so long
as the moneys on deposit therein are equal to the Certificate Reserve Fund Requirement (as that
term is defined in the Facility Lease)). The Trustee may take whatever legal actions are
lawfully available to it directly against the Authority or the County.
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The County shall indemnify and hold harmless the Trustee to the extent and in
the amounts provided by the laws of the State of California from and against all claims,
damages and losses, including legal fees and expenses, arising out of (i) the condition,
management, maintenance or use of or from any work or thing done in connection with the
Demised Premises and the Project by the County, (ii) any act of negligence by the County or of
any of its agents, contractors, employees, invitees, licensees, officers or servants in connection
with the Demised Premises and the Project, (iii) the presence on, under or about, or the release
from the Project or the Demised Premises of any substances, materials or wastes which are or
which become regulated or classified as hazardous or toxic under federal, state or local laws,
(iv) the authorization of the payment of any costs or expenses of construction of the Project, or
(v) the exercise of any rights or obligations of the Trustee hereunder or arising from the
Assignment Agreement or Facility Lease or any.other document related to the Certificates;
provided that no indemnification will be made for negligence or willful misconduct by the
Trustee.
The Trustee's rights to immunities and protection from liability hereunder and its
rights to payment of its fees and expenses shall survive its resignation or removal and the final
payment or defeasance of the Certificates.
SECTION 8.04. Protection of the Trustee. The Trustee shall be protected and
shall incur no liability in acting or proceeding in good faith upon any affidavit, bond,
certificate, consent, notice, request, requisition, resolution, statement, telegram, voucher,
waiver or other paper or document which it shall in good faith believe to be genuine and to
have been adopted, executed or delivered by the proper party or pursuant to any of the
provisions hereof, and the Trustee shall be under no duty to make any investigation or inquiry
as to any statements contained or matters referred to in any such instrument, but may accept and
rely upon the same as conclusive evidence of the truth and accuracy of such statements. The
Trustee shall not be bound to recognize any person as an Owner of any Certificate or to take
any action at the request of any such person unless such Certificate shall be deposited with the
Trustee or satisfactory evidence of the ownership of such Certificate shall be furnished to the
Trustee. The Trustee may consult with counsel, who may be counsel to the Authority or the
County, with regard to legal questions, and the opinion of such counsel shall be full and
complete authorization and protection in respect to any action taken or suffered by it hereunder
in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Site Lease or the
Facility Lease, or of the assignment made to it by the Assignment Agreement of all rights to
receive the Rental Payments under the Facility Lease, or of the title to or value of the Demised
Premises and the Project.
Whenever in the administration of its rights and obligations hereunder the Trustee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established by a
Certificate of the County or a Certificate of the Authority, and such certificate shall be full
warrant to the Trustee for any action taken or suffered under the provisions hereof upon the
SF2-77478.2 47 40511-105-PCM-08/04/97
faith thereof, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such
matter or may require such additional evidence as to it may seem reasonable.
The Trustee or any of its affiliates may buy, sell, own, hold and deal in any of
the Certificates and may join in any action which any Owner may be entitled to take with like
effect as if the Trustee were not a party hereto. The Trustee or any of its affiliates, either as
principal or agent, may also engage in or be interested in any financial or other transaction with
the Authority or the County, and may act as agent, depositary or trustee for any committee or
body of Owners or of owners of obligations of the Authority or the County as freely as if it
were not the Trustee hereunder.
The Trustee shall not be answerable for the exercise of any trusts or powers
hereunder or for anything whatsoever in connection with the funds established hereunder, except
only for its own negligence or willful misconduct. The Trustee shall not be deemed to have
knowledge of any Event of Default hereunder (other than a payment default) unless and until it
shall have actual knowledge thereof.
The Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Trust Agreement, and no implied covenants or obligations, fiduciary
or otherwise, shall be read into this Trust Agreement against the Trustee.
The recitals of facts herein and in the Certificates contained shall be taken as
statements of the County, and the Trustee shall not assume responsibility for the correctness of
the same, or make any representations as to the validity or sufficiency of this Trust Agreement
or of the Certificates or incur any responsibility in respect thereof, other than in connection with
the respective duties or obligations herein or in the Certificates assigned to or imposed upon it.
The Trustee shall not be liable for any error of judgment made in good faith by a
responsible officer, unless it shall be proved that the Trustee was negligent or engaged in willful
misconduct in ascertaining the pertinent facts.
The Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Owners of not less than a
majority in aggregate principal amount of the Certificates at the time Outstanding relating to the
time, method and place of conducting any proceeding for any remedy available to the Trustee or
the exercise of any right, trust or power of the Trustee hereunder.
The Trustee has no obligation or liability to the Owners to make payment of
principal, premium, if any, or interest pertaining to the Certificates except from Base Rental
Payments. No provision of this Trust Agreement shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of its duties hereunder,
or in the exercise of any of its rights and powers.
Every provision of this Trust Agreement, the Site Lease, Facility Lease and the
Assignment Agreement relating to the conduct or liability of the Trustee shall be subject to the
provisions of this Trust Agreement, including without limitation, this Article.
SF2-77478.2 48 40511-105-PCM-08104!97
In acting as Trustee hereunder, the Trustee acts solely in its capacity as Trustee
hereunder and not in its individual or personal capacity, and all persons, including without
limitation the Owners, the County and the Authority, having any claim against the Trustee shall
look only to the funds and accounts held by the Trustee hereunder for payment, except as
otherwise provided herein. Under no circumstances shall the Trustee be liable in its individual
or personal capacity for the obligations evidenced by the Certificates.
The Trustee is authorized and directed to execute in its capacity as Trustee
hereunder the Assignment Agreement.
Before taking any action under Article VII hereof, the Trustee may require
indemnity satisfactory to the Trustee be furnished from any expenses and to protect it against
any liability it may incur hereunder.
The Trustee may execute any of the trusts or powers hereof and perform any of
its duties through attorneys, agents and receivers but shall be answerable for the conduct of the
same.
The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty.
The immunities extended to the Trustee also extend to its directors, officers,
employees and agents.
The Trustee shall have no responsibility with respect to any information,
statement or recital in any official statement, offering memorandum or any other disclosure
material prepared or distributed with respect to the Certificates.
ARTICLE IX
AMENDMENT OF OR SUPPLEMENT TO
TRUST AGREEMENT
SECTION 9.01, Amendment or Supplement. The Trust Agreement and the
rights and obligations of the Authority and the County and the Owners and the Trustee
hereunder may be amended or supplemented at any time by an amendment hereof or supplement
hereto which shall become binding when the written consents of the Owners of a majority in
aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates
disqualified as provided in Section 9.02, are filed with the Trustee. No such amendment or
supplement shall (1) change the fixed Certificate Payment Date of any Certificate or reduce the
rate of interest represented thereby or extend the time of payment of such interest or Accreted
Interest or reduce the amount of principal or Accreted Value represented thereby without the
prior written consent of the Owner of the Certificate so affected, or (2) reduce the percentage of
Owners whose consent is required for the execution of any amendment hereof or supplement
hereto, or (3) modify any of the rights or obligations of the Trustee without its prior written
SF2-77478.2 49 40511-105-PCM-08/04/97
consent thereto, or (4) amend this Section 9.01 without the prior written consent of the Owners
of all Certificates then Outstanding.
The Trust Agreement and the rights and obligations of the Authority and the
County and the Owners and the Trustee hereunder may also be amended or supplemented at any
time by an amendment hereof or supplement hereto which shall become binding upon execution
without the written consents of any Owners, but only to the extent permitted by law and after
receipt of an approving Opinion of Counsel and only for any one or more of the following
purposes --
(a) to add to the agreements, conditions, covenants and terms required by the
Authority or the County to be observed or performed herein other agreements,
conditions, covenants and terms thereafter to be observed or performed by the Authority
or the County, or to surrender any right or power reserved herein to or conferred herein
on the Authority or the County, and which in either case shall not materially adversely
affect the interests of the Owners; or
(b) to make such provisions for the purpose of curing any ambiguity or of
correcting, curing or supplementing any defective provision contained herein or in regard
to questions arising hereunder which the Authority or the County may deem desirable or
necessary and not inconsistent herewith, and which shall not materially adversely affect
the interests of the Owners; or
(c) to modify, amend or supplement this Trust Agreement or any agreement
supplemental hereto in such manner as to pen-nit the qualification hereof and thereof
under the Trust Indenture Act of 1939 or any similar federal statute hereafter in effect or
to permit the qualification of the Certificates for sale under the securities laws of the
United States of America or of any of the states of the United States of America, and, if
they so determine, to add to this Trust Agreement or any agreement supplemental hereto
such other tenors, conditions and provisions as may be permitted by said Trust Indenture
Act of 1939 or similar federal statute; or
(d) to make any modifications or changes necessary or appropriate in the
Opinion of Counsel to preserve or protect the exclusion from gross income of interest
represented by the Certificates for federal income tax purposes; or
(e) to make any modifications or changes necessary or appropriate in
connection with the execution and delivery of Additional Certificates, including without
limitation provisions which would allow such Additional Certificates to bei issued in the
form of term Certificates in addition to serial Certificates; or
(f) to provide for the requirements of any Insurer in connection with the
issuance of any Certificates Insurance Policy or any entity providing a policy of
municipal bond insurance or letter of credit or similar financial instrument,for deposit in
the Certificate Reserve Fund established pursuant to the Facility Lease to satisfy all or a
i
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portion of the Certificate Reserve Fund Requirement, so long as such alterations,
amendments or modifications are not materially adverse to the interests of the Owners.
SECTION 9.02. Disqualified Certificates. Certificates owned or held by or for
the account of the County (but excluding Certificates held in any pension or retirement fund of
the County) shall not be deemed Outstanding for the purpose of any consent or other action or
any calculation of Outstanding Certificates provided in this Article, and shall not be entitled to
consent to or take any other action provided in this Article or Section 7.01 hereof, and the
Trustee may adopt appropriate regulations to require each Owner, before his consent provided
for herein shall be deemed effective, to reveal if the Certificates as to which such consent is
given are disqualified as provided in this Section.
SECTION 9.03. Endorsement or Replacement of Certificates After Amendment
or Supplement. After the effective date of any action taken as hereinabove provided, the
Trustee may determine that the Certificates may bear a notation by endorsement in form
approved by the Trustee as to such action, and in that case upon demand of the Owner of any
Outstanding Certificate and presentation of such Certificate for such purpose at the Principal
Corporate Trust Office of the Trustee a suitable notation as to such action shall be made on
such Certificate. If the Trustee shall so determine, new Certificates so modified as in the
opinion of the Trustee shall be necessary to conform to such action shall be prepared, and in
that case upon demand of the Owner of any Outstanding Certificates such new Certificates shall
be exchanged at the Principal Corporate Trust Office of the Trustee without cost to each Owner
for Certificates then Outstanding upon surrender of such Outstanding Certificates.
SECTION 9.04. Amendment by Mutual Consent. The provisions of this Article
shall not prevent any Owner from accepting any amendment as to the particular Certificates
owned by him, provided that due notation thereof is made on such Certificates.
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Certificates and Trust Agreement. (a) If the
County shall pay or cause to be paid or there shall otherwise be paid to the Owners of all
Outstanding Certificates the interest, Accreted Interest, principal and premium, if any,
represented thereby at the times and in the manner stipulated herein and therein, then such
Owners shall cease to be entitled to the pledge of and lien on the Base Rental Payments as
provided herein, and all agreements and covenants of the Authority, the County and the Trustee
to such Owners hereunder shall thereupon cease, terminate and become void and shall be
discharged and satisfied except only as provided in subsection (b) below, provided further,
however, that the provisions of Section 10.02 shall apply in all events.
(b) Any Outstanding Certificates shall be deemed to have been paid within the
meaning of and with the effect expressed in subsection (a) of this Section if there shall be on
deposit with the Trustee moneys or securities of the category specified in clauses (1) and (7) of
the definition of the term Permitted Investments contained in Section 1.01 (not callable by the
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issuer thereof prior to maturity) in an amount sufficient (together with the increment, earnings
and interest on such securities) to pay the interest and principal and premium, if any,
represented by such Certificates payable on their Payment Dates or on any dates of prepayment
prior thereto, except that the Owners thereof shall be entitled to the principal, premium and
interest represented by such Certificates, and the County shall remain liable for such Base
Rental Payments, but only out of such moneys or securities deposited with the Trustee as
aforesaid for such payment.
(c) After the payment of all the interest and principal represented by all
Outstanding Certificates as provided in this Section, the Trustee shall execute and deliver to the
Authority and the County all such instruments as may be necessary or desirable to evidence the
discharge and satisfaction of the Trust Agreement, and the Trustee shall pay over or deliver to
the County all moneys or securities held by it pursuant hereto which are not required for the
payment of the interest and principal and premium, if any, evidenced and represented by such
Certificates and any unpaid fees and expenses of the Trustee.
SECTION 10.02. Unclaimed Moneys. Anything contained herein to the
contrary notwithstanding, any moneys held by the Trustee in trust for the payment and
discharge of the interest, premium, if any, or principal represented by any of the Certificates
which remain unclaimed for two (2) years after the date when the payments represented by such
Certificates have become payable, if such moneys were held by the Trustee at such date, or for
two (2) years after the date of deposit of such moneys if deposited with the Trustee after the
date when the interest, premium, if any, and principal represented by such Certificates have
become payable, shall automatically be repaid by the Trustee to the County as its absolute
property free from trust, and the Trustee shall thereupon be released and discharged with
respect thereto and the Owners shall look only to the County for the payment of the interest and
principal represented by such Certificates; provided, however, that before being required to
make any such payment to the County, the Trustee may, at the expense of the County, cause to
be published once a week for two (2) successive weeks in a Financial Newspaper a notice that
such moneys remain unclaimed and that after a date named in such notice, which date shall not
be less than thirty (30) days after the date of the first publication of such notice, the balance of
such moneys then unclaimed will be returned to the County.
ARTICLE XI
CERTIFICATES INSURANCE POLICY
SECTION 11.01. Payments from Certificates Insurance Policy. Payment of the
principal and interest with respect to the Certificates shall be insured by the Certificates
Insurance Policy provided by the Insurer. So long as the Certificates Insurance Policy is in full
force and effect and the Insurer is not in default thereunder, the County and the Trustee agree
to comply with the following provisions:
(a) At least one Business Day prior to all Payment Dates, the Trustee will
determine whether there will be sufficient fiords in the accounts maintained by it
hereunder to pay the principal or interest with respect to the Certificates on such
SF2-77478.2 52 40511-105-PCM-08104197
Payment Date. If the Trustee determines that there will be insufficient fiords in such
accounts, the Trustee shall so notify the Insurer. Such notice shall specify the amount of
the anticipated deficiency, the Certificates to which such deficiency is applicable and
whether such deficiency will be as to principal or interest, or both. If the Trustee has
not so notified the Insurer one day prior to an Interest Payment Date, the Insurer will
make payments of principal or interest with respect to the Certificates on or before the
Business Day next following the date on which the Insurer shall have received notice of
nonpayment from the Trustee.
(b) The Trustee shall, after giving notice to the Insurer as provided in (a)
above, make available to the Insurer and, at the Insurer's direction, to the United States
Trust Company of New York, as the insurance trustee for the Insurer or any successor
insurance trustee (the "Insurance Trustee"), the registration books for the Certificates
maintained by the Trustee pursuant to Section 2.07 hereof and all records relating to the
accounts maintained by the Trustee under this Trust Agreement.
(c) The Trustee shall provide the Insurer and the Insurance Trustee with a list
of the Owners of the Certificates entitled to receive principal or interest payments from
the Insurer under the tenors of the Certificates Insurance Policy, and shall make
arrangements with the Insurance Trustee (i) to mail checks to the Owners of the
Certificates entitled to receive full or partial interest payments from the Insurer and (ii)
to pay principal represented by the Certificates surrendered to the Insurance Trustee by
the Owners of the Certificates entitled to receive hull or partial principal payments from
the Insurer.
(d) The Trustee, at the time it provides notice to the Insurer pursuant to (a)
above, will notify Owners of the Certificates entitled to receive the payment of principal
or interest with respect to the Certificates from the Insurer (i) as to the fact of such
entitlement, (ii) that the Insurer will remit to them all or part of the interest payments
next coming due upon proof of entitlement to interest payments and delivery to the
Insurance Trustee, in fonn satisfactory to the Insurance Trustee, of an appropriate
assignment of such Owner's right to payment, (iii) that should they be entitled to receive
full payment of principal from the Insurer, they must surrender their Certificates (along
with an appropriate instrument of assignment in form satisfactory to the Insurance
Trustee to permit ownership of such Certificates to be registered in the name of the
Insurer) for payment to the Insurance Trustee, and not the Trustee, and (iv) that should
they be entitled to receive partial payment of principal from the Insurer, they must
surrender their Certificates for payment thereon first to the Trustee who shall note on
such Certificates the portion of the principal paid by the Trustee, and then, along with an
appropriate instrument of assignment in form satisfactory to the Insurance Trustee, to the
Insurance Trustee, which will then pay the unpaid portion of principal.
(e) In the event that the Trustee has notice that any payment of principal or
interest with respect to the Certificates which has become due and payable and which is
made to such Owner by or on behalf of the County has been deemed a preferential
transfer and theretofore recovered from such Owner pursuant to the United States
SF2-77478.2 53 40511-105-PCM-08/04197
Bankruptcy Code by a trustee in bankruptcy in accordance with the final, nonappealable
order of a court having competent jurisdiction, the Trustee shall notify the Insurer and,
at the time the Insurer is notified, notify all Owners of the Certificates that in the event
that any Owner's payment is so recovered, such Owner will be entitled to payment from
the Insurer to the extent of such recovery if sufficient funds are not otherwise available,
and the Trustee shall furnish to the Insurer its records evidencing the payments of
principal and interest with respect to the Certificates which have been made by the
Trustee and subsequently recovered from such Owner and the dates on which such
payments were made.
(f) In addition to those rights granted the Insurer under this Trust Agreement,
the Insurer shall, to the extent it makes payment of principal or interest with respect to
the Certificates, become subrogated to the rights of the recipients of such payments in
accordance with the teens of the Certificates Insurance Policy, and to evidence such
subrogation (i) in the case of subrogation as to claims for past due interest, the Trustee
shall note the Insurer's rights as subrogee on the registration books for the Certificates
maintained by the Trustee upon receipt from the Insurer of proof of the payment of
interest represented thereby to the Owners of the Certificates, and (ii) in the case of
subrogation as to claims for past due principal, the Trustee shall note the Insurer's rights
as subrogee on the registration books for the Certificates maintained by the Trustee upon
surrender of the Certificates by the Owners thereof, together with proof of the payment
of principal thereof.
Notwithstanding anything herein to the contrary, in the event that the principal
and/or interest due with respect to the Certificates shall be paid by the Insurer pursuant to the
Certificates Insurance Policy, such Certificates shall remain Outstanding for all purposes, not be
defeased or otherwise satisfied and not be considered paid by the County, and the assignment
and pledge of the Base Rental Payment Fund and the Reserve Fund and all covenants,
agreements and other obligations of the County to the Owners of the Certificates shall continue
to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the
rights of such Owners.
SECTION 11.02. Consent of Insurer. So long as the Insurer is not in default
under the Certificates Insurance Policy, the Insurer's consent (which consent shall not be
unreasonably withheld) shall be required for the following purposes: (i) execution and delivery
of any amendment, modification or supplement to this Trust Agreement pursuant to Section
9.01 hereof which requires the consent of any Owners and (ii) removal of the Trustee and any
successor thereto and appointment of any successor trustee pursuant to Section 8.02 hereof.
Notwithstanding anything to the contrary in this Trust Agreement, the rights given to the
Insurer hereunder to give consents, directions and approvals shall not be effective so long as it
is in default of its obligations under the Certificates Insurance Policy.
SECTION 11.03. Exercise of Remedies Upon Default. Notwithstanding
anything to the contrary in this Trust Agreement, so long as the Insurer is not in default under
the Certificates Insurance Policy, upon the occurrence and continuance of an Event of Default
as defined herein, the Insurer shall be entitled to control and direct the enforcement of all rights
SF2-77478.2 54 40511-105-PCM-08/04/97
and remedies granted to the Owners or the Trustee for the benefit of the Owners under this
Trust Agreement.
SECTION 11.04. Limitation on Modification. Any provision of this Trust
Agreement expressly recognizing or granting rights in or to the Insurer may not be amended in
a manner which affects the rights of the Insurer hereunder without the prior written consent of
the Insurer.
SECTION 11.05. Notices and Reports.
(a) So long as the Insurer is not in default under the Certificates Insurance
Policy, the County shall furnish to the Insurer, as soon as practicable, a copy of the
annual audited financial statements of the County, the annual insurance certificates
required to be delivered pursuant to Section 5.05 of the Facility Lease, and such
additional infonnation as the Insurer may reasonably request.
(b) So long as the Insurer is not in default under the Certificates Insurance
Policy, the Trustee shall furnish written notice to the Insurer (i) in the event the Trustee
resigns as provided under Section 8.02 hereof, (ii) if at any time there are insufficient
moneys to make any payments of principal and/or interest with respect to the Certificates
and (iii) immediately upon actual knowledge of the occurrence of an Event of Default
hereunder. The Trustee shall further provide to the Insurer a copy of any notice to be
given to the Owners of the Certificates, including, without limitation, notice of any
prepayment or defeasance of the Certificates, and any certifications rendered pursuant to
this Trust Agreement relating to the security for the Certificates. The Trustee will
permit the Insurer to have access to and to make copies of all books and records relating
to the Certificates at any reasonable time.
SECTION 11.06. Effect of Certificates Insurance Policv. Notwithstanding any
other provision of this Trust Agreement, in detennining whether any actions taken pursuant to
the terms and provisions of this Trust Agreement or under the Facility Lease are adverse to the
interests of the Owners of the Certificates, the effect on the Owners shall be considered as if
there were no Certificates Insurance Policy.
SECTION 11.07. Insurer as Third Party Beneficiary. To the extent that this
Trust Agreement confers upon or gives or grants to the Insurer any right, remedy or claim
under or by reason of this Trust Agreement, the Insurer is hereby explicitly recognized as being
a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred,
given or granted hereunder.
SF2-77478.2 55 40511-105-PCM-08/04/97
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Benefits of Trust Agreement Limited to Parties. Nothing
contained herein, expressed or implied, is intended to give to any person other than the
Authority, the County, the Trustee and the Owners any claim, remedy or right under or
pursuant hereto, and any agreement, condition, covenant or term required herein to be observed
or perfonned by or on behalf of the Authority or the County shall be for the sole and exclusive
benefit of the Trustee and the Owners.
SECTION 12.02. Successor Deemed Included in all References to Predecessor.
Whenever either the Authority, the County or the Trustee or any officer thereof is named or
referred to herein, such reference shall be deemed to include the successor to the powers, duties
and functions that are presently vested in the Authority, the County or the Trustee or such
officer, and all agreements, conditions, covenants and teens required hereby to be observed or
performed by or on behalf of the Authority, the County or the Trustee or any officer thereof
shall bind and inure to the benefit of the respective successors thereof whether so expressed or
not.
SECTION 12.03. Execution of Documents by Owners. Any declaration, request
or other instrument which is pennitted or required herein to be executed by Owners may be in
one or more instruments of similar tenor and may be executed by Owners in person or by their
attorneys appointed in writing. The fact and date of the execution by any Owner or his attorney
of any declaration, request or other instrument or of any writing appointing such attorney may
be proved by the certificate of any notary public or other officer authorized to take
acknowledgments of deeds to be recorded in the state or territory in which he purports to act
that the person signing such declaration, request or other instrument or writing acknowledged to
him the execution thereof, or by an affidavit of a witness of such execution duly sworn to
before such notary public or other officer, or by such other proof as the Trustee may accept
which it may deem sufficient.
The ownership of any Certificates and the amount, payment date, number and
date of owning the same may be proved by the books required to be kept by the Trustee
pursuant to the provisions of Section 2.07.
Any declaration, request or other instrument in writing of the Owner of any
Certificate shall bind all future Owners of such Certificate with respect to anything done or
suffered to be done by the Authority or the County or the Trustee in good faith and in
accordance therewith.
SECTION 12.04. Waiver of Personal Liability. No officer or employee of the
County shall be individually or personally liable for the payment of the interest or principal
represented by the Certificates, but nothing contained herein shall relieve any officer or
employee of the County from the performance of any official duty provided by any applicable
provisions of law or by the Facility Lease or hereby.
SF2-77478.2 56 40511-105-PCM-08/04/97
SECTION 12.05. Acquisition of Certificates by County. All Certificates
acquired by the County, whether by purchase or gift or otherwise, shall be surrendered to the
Trustee for cancellation.
SECTION 12.06. Content of Certificates. Every Certificate of the County or of
the Authority with respect to compliance with any agreement, condition, covenant or term
contained herein shall include (a) a statement that the person or persons making or giving such
certificate have read such agreement, condition, covenant or teen and the definitions herein
relating thereto; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based; (c) a statement
that, in the opinion of the signers, they have made or caused to be made such examination or
investigation as is necessary to enable them to express an infor►ned opinion as to whether or not
such agreement, condition, covenant or term has been complied with; and (d) a statement as to
whether, in the opinion of the signers, such agreement, condition, covenant or term has been
complied with.
Any Certificate of the County or of the Authority may be based, insofar as it
relates to legal matters, upon an Opinion of Counsel unless the person making or giving such
certificate knows that the Opinion of Counsel with respect to the matters upon which his
certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should
have known that the same was erroneous. Any Opinion of Counsel may be based, insofar as it
relates to factual matters, information with respect to which is in the possession of the County
or the Authority, upon a representation by an officer or officers of the County or the Authority,
as the case may be, unless the counsel executing such Opinion of Counsel knows that the
representation with respect to the matters upon which his opinion may be based, as aforesaid, is
erroneous, or in the exercise of reasonable care should have known that the same was
erroneous.
SECTION 12.07. Funds. Any fund required to be established and maintained
herein by the Trustee except the Rebate Funds may be established and maintained in the
accounting records of the Trustee either as an account or a fund, and may, for the purposes of
such accounting records, any audits thereof and any reports or statements with respect thereto,
be treated either as an account or a find; but all such records with respect to all such funds
shall at all times be maintained in accordance with current industry standards and with due
regard for the protection of the security of the Certificates and the rights of the Owners.
Except for moneys held in the Rebate Funds, the Trustee may commingle any of
the moneys held by it hereunder for investment purposes only; provided, however, that the
Trustee shall account separately for the moneys in each fund or account established pursuant to
this Trust Agreement or the Facility Lease.
SECTION 12.08. Article and Section Headings, Gender and References. The
headings or titles of the several Articles and Sections hereof and the table of contents appended
hereto shall be solely for convenience of reference and shall not affect the meaning,
construction or effect hereof, and words of any gender shall be deemed and construed to include
all genders. All references herein to "Articles," "Sections" and other subdivisions or clauses
SF2-77478.2 57 40511-105-PCM-08/04/97
are to the corresponding Articles, Sections, subdivisions or clauses hereof; and the words
"hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular Article, Section,
subdivision or clause thereof.
SECTION 12.09. Partial Invalidity. If any one or more of the agreements,
conditions, covenants or terms required herein to be observed or performed by or on the part of
the Authority, the County or the Trustee shall be contrary to law, then such agreement or
agreements, such condition or conditions, such covenant or covenants or such term or terms
shall be null and void and shall be deemed separable from the remaining agreements,
conditions, covenants and terms hereof and shall in no way affect the validity hereof or of the
Certificates, and the Owners shall retain all the benefit, protection and security afforded to them
under any applicable provisions of law. The Authority, the County and the Trustee hereby
declare that they would have executed this Trust Agreement, and each and every other Article,
Section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized
the execution and delivery of the Certificates pursuant hereto irrespective of the fact that any
one or more Articles, Sections, paragraphs, subdivisions, sentences, clauses or phrases hereof
or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
SECTION 12.10. California Law. This Trust Agreement shall be construed and
governed in accordance with the laws of the State of California.
SECTION 12.11. Notices. All written notices to be given hereunder shall be
given by mail to the party entitled thereto at its address set forth below, or at such other address
as such party may provide to the other parties in writing from time to time, namely:
If to the County: c/o Clerk of the Board of Supervisors
County of Contra Costa
County Administration Building
651 Pine Street
Martinez, California 94553
If to the Authority: c/o County Administrator
County of Contra Costa
County Administration Building
651 Pine Street
Martinez, California 94553
If to the Trustee: First Trust of California, National Association
One California Street
Fourth Floor
San Francisco, California 94111
SF2-77478.2 58 40511-105-PCM-08/04/97
SECTION 12.12. Nonbusiness Days. When any action is provided herein to
be done on a day named or within a time period named, and the day or the last day of the
period falls on a day other than a Business Day, it may be performed on the next
succeeding Business Day with effect as though performed on the appointed day or within
the specified period.
SECTION 12.13. Effective Date. This Trust Agreement shall become
effective upon its execution and delivery.
SECTION 12.14. Execution in Counterparts. This Trust Agreement may be
executed in several counterparts, each of which shall be deemed an original, and all of
which shall constitute but one and the same instrument.
SF2-77478.2 59 40511-105-PCM-08/04/97
IN WITNESS WHEREOF, the parties hereto have executed and attested this
Trust Agreement by their officers thereunto duly authorized as of the day and year first
written above.
FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION,
as Trustee
By
Authorized Officer
Attest:
Authorized Officer
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By:
Chair
By:
Secretary
COUNTY OF CONTRA COSTA
[SEAL]
By:
Chair of the Board of
Supervisors of the County of
Contra Costa, State of California
SF2-77478.2 60 40511-105-PCM-08/04/97
Attest: Phitip J. Batchelor, Clerk
of the Board of Supervisors
and County Administrator
By:
Deputy
Approved as to form:
County Counsel
SF2-77478.2 61 40511-105-PCM-08/04/97
EXHIBIT A
PROJECT PHASE I FACILITIES
SF2-77478.2 A-1 40511-105-PCM-08/04/97
EXHIBIT B
BASE RENTAL PAYMENT DATES ON WHICH
CERTIFICATES PAYABLE ON 1,
ARE SUBJECT TO MANDATORY PREPAYMENT
1 Principal
Payment Date Amount
BASE RENTAL PAYMENT DATES ON WHICH
CERTIFICATES PAYABLE ON 1,
ARE SUBJECT TO MANDATORY PREPAYMENT
November 1 Principal
Payment Date Amount
*Payment Date
SF2-77478.2 B-1 40511-105-PCM-08/04/97
Recording requested by SECOND DRAFT
and return to:
COUNTY OF CONTRA COSTA
c/o Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attention: Mary A. Collins
Free Recording Requested
Pursuant to California Government
Code Section 6103
FACILITY LEASE
(CAPITAL PROJECTS PROGRAM)
by and between
COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY
and the
COUNTY OF CONTRA COSTA
(Amending and Restating the Lease Agreement,
dated as of February 1, 1991, by and between the
ABAG Finance Corporation and the County of Contra Costa)
Dated as of August 1, 1997
SF2-77508.2 40511-105-PCM-08/04/97
TABLE OF CONTENTS
Section Pace
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PREAMBLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
LEASE OF DEMISED PREMISES AND PROJECT; TERM
SECTION 2.01. Lease of Demised Premises and Project . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Term; Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.03. Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
RENTAL PAYMENTS; USE OF PROCEEDS
SECTION 3.01. Base Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.02. Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.03. Fair Rental Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.04. Payment Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.05. Appropriations Covenant; License Fee Revenues . . . . . . . . . . . . . . 14
SECTION 3.06. Rental Abatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.07. Use of Proceeds; Lease Fund; Certificate Reserve
Fund; Investments . . . . . . . . . ... . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
MAINTENANCE; ALTERATIONS AND ADDITIONS
SECTION 4.01. Maintenance and Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.02. Changes to the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 4.03. Installation of County's Equipment . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE V
INSURANCE
SECTION 5.01. Fire and Extended Coverage Insurance . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.02. Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.03. Rental Interruption or Use and Occupancy
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.04. Worker's Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.05. Insurance Proceeds; Form of Policies . . . . . . . . . . . . . . . . . . . . . 20
SF2-77508.2 i 40511-105-PCM-08/04/97
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Defaults and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.02. Waiver . . . . . . . . . . . . . . 24
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
SECTION 7.01. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.02. Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7.03. Option to Purchase; Sale of Personal Property . . . . . . . . . . . . . . . 27
ARTICLE VIII
COVENANTS
SECTION 8.01. Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.03. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.04. Authority Not Liable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.05. Assignment and Subleasing . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.06. Leasehold Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.07. Tax Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 8.08. Authority's Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.09. Purpose of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IX
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE PROJECT
SECTION 9.01. Disclaimer of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 9.02. Vendor's Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 9.03. Use of the Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Law Governing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10.03. Validity and Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.04. Net-Net-Net Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.05. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.06. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.07. Amendment or Tennination . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 10.08. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SF2-77508.2 ii 40511-105-PCM-08/04/97
r
Exhibit A Demised Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Base Rental Payment Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit B-I Defeased Base Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibit B-H Base Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exhibit C Project Phase I Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Acknowledgements
SF2-77508.2 111 40511-105-PCM-08/04/97
FACILITY LEASE
(Amending and Restating the Lease Agreement,
dated as of February 1, 1991, by and between the
ABAG Finance Corporation and the County of Contra Costa)
This Facility Lease, dated as of August 1, 1997, by and between COUNTY
OF CONTRA COSTA PUBLIC FINANCING AUTHORITY (the "Authority"), a joint
powers authority duly organized and existing under and by virtue of the laws of the State of
California, as lessor, and the COUNTY OF CONTRA COSTA (the "County"), a body
corporate and politic and a political subdivision of the State of California, as lessee;
WITNESSETH :
In consideration of the mutual covenants herein, the parties hereto agree as
follows:
WHEREAS, $23,980,000 aggregate principal amount of certificates of
participation (the "Prior Certificates") were executed and delivered pursuant to a Trust
Agreement, dated as of February 1, 1991, by and among the County, the ABAG Finance
Corporation (the "Corporation") and First Trust of California, National Association, as
successor trustee (the "Prior Trustee), for the purpose of financing the acquisition and
renovation of certain buildings for use by the County (the "1991 Project");
WHEREAS, pursuant to a site and facility lease, dated as of February 1, 1991
(the "Prior Site Lease"), between the County and the Corporation, which lease or
memorandum thereof was recorded in the office of the County Recorder of the County of
Contra Costa on February 27, 1991 under Recorder's Serial Number 91-33882, the County
leased real property (the "1991 Demised Premises") on which the 1991 Project was located
to the Corporation;
WHEREAS, pursuant to a lease agreement, dated as of February 1, 1991 (the
"Prior Facility Lease"), between the Corporation and the County, which lease or
memorandum thereof was recorded in the office of the County Recorder of the County of
Contra Costa on February 27, 1991 under Recorder's Serial Number 91-33883, the
Corporation leased the 1991 Demised Premises and the 1991 Project to the County;
WHEREAS, pursuant to an assignment agreement, dated as of February 1,
1991, between the Corporation and the Prior Trustee, the lease payments made by the
County under the Prior Facility Lease ("Prior Base Rental") were assigned to the Prior
Trustee to pay the principal and interest represented by the Prior Certificates;
WHEREAS, the Authority intends to assist the County in refinancing the
acquisition and renovation of the 1991 Project and in financing the acquisition and renovation
of certain additional capital improvements by causing the execution and delivery of
Certificates of Participation (Capital Project Program), Series of 1997 (the "1997
Certificates
SF2-77508.2 40511-105-PCM-08/04/97
WHEREAS, pursuant to the Letter of Instructions to the Prior Trustee, dated
as of August 1, 1997, certain proceeds of the 1997 Certificates were deposited into an
escrow fund (the "Escrow Fund") and irrevocably pledged to repay the Prior Base Rental and
the Prior Certificates;
WHEREAS, as consideration for such deposit in the Escrow Fund, the
Corporation and Prior Trustee have assigned all of their rights, title and interest in the Prior
Site Lease and Prior Facility Lease (other than the right, title and interest in the Prior Base
Rental to be paid from the Escrow Fund) to the Authority;
WHEREAS, the Authority and County desire to continue to lease the 1991
Demised Premises, together with certain additional real property described in Exhibit A -
Part II hereto (collectively, the "Demised Premises") pursuant to the terms of the Site Lease
(Capital Projects Program), dated as of August 1, 1997 (the "Site Lease"), which amends
and restates in its entirety the Prior Site Lease, and to continue to lease the Demised
Premises and 1991 Project, together with certain additional facilities described in Exhibit
C-Part II hereto (collectively, the "Project Phase I") pursuant to the terms of this Lease,
which amends and restates in its entirety the Prior Facility Lease;
WHEREAS, the Authority intends to assist the County by financing the
construction, renovation and acquisition for the County of certain other County facilities
together with site development, landscaping, utilities, fixtures, furnishings, equipment,
improvements and appurtenant and related facilities (the "Subsequent Phases of the Project,"
and collectively with Project Phase I, the "Project"); and
WHEREAS, under this Lease, the County will be obligated to make base
rental payments to the Authority for the lease of the Project;
NOW, THEREFORE, in consideration of the mutual covenants herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions.
Unless the context otherwise requires, the terms defined in this Section shall,
for all purposes of this Lease, have the meanings herein specified, which meanings shall be
equally applicable to both the singular and plural forms of any of the terms herein defined.
Capitalized terms not otherwise defined herein shall have the meanings assigned to such
terms in the Trust Agreement.
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Accreted Interest
The term "Accreted Interest" means, with respect to the Capital Appreciation
Certificates, as of the date of calculation, the Accreted Value thereof minus the
Denominational Amount thereof.
Accreted Value
The term "Accreted Value" means, with respect to the Capital Appreciation
Certificates, as of the date of calculation, the Denominational Amount thereof plus the
interest accred thereon to such date of calculation, compounded from the date of initial
delivery at the interest rate thereof on each February I and August 1, assuming in any year
that such Accreted Value increases in equal daily amounts on the basis of a year of three
hundred sixty (360) days composed of twelve (12) months of thirty (30) days each.
Additional Payments
The term "Additional Payments" means all amounts payable to the Authority
or the Trustee or any other person from the County as Additional Payments pursuant to
Section 3.02 hereof.
Agency Agreement
The term "Agency Agreement" means the Agency Agreement, dated as of
February 1, 1991, by and between the County and the Authority as assignee of the
Corporation, and any duly authorized and executed amendment thereto.
Architects
The tenn "Architects" means the architects, engineers or designers of any
Subsequent Phase of the Project, and any successor or successors to any thereof.
Authority
The term "Authority" means (i) County of Contra Costa Public Financing
Authority, acting as lessor hereunder; (ii) any surviving, resulting or transferee entity; and
(iii) except where the context requires otherwise, any assignee of the Authority.
Base Rental Payments
The tern "Base Rental Payments" means all amounts payable to the Authority
from the County as Base Rental Payments pursuant to Section 3.01 hereof.
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Base Rental Payment Schedule
The term "Base Rental Payment Schedule" means the schedule of Base Rental
Payments payable to the Authority from the County pursuant to Section 3.01 hereof and
attached hereto as Exhibit B-II.
Certificate Reserve Fund
The term "Certificate Reserve Fund" means the Certificate Reserve Fund
established pursuant to Section 3.07 hereof.
Certificate Reserve Fund Requirement
The term "Certificate Reserve Fund Requirement" means the lesser of (i) the
maximum amount of Base Rental Payments remaining to be made by the County pursuant to
this Lease, as supplemented from time to time, during any twelve-month period ending on
February 1 and attributable to all Outstanding series of Certificates, or (ii) 125% of the
average of all such remaining annual Base Rental Payments; provided, that with respect to
the execution and delivery of Additional Certificates if the Certificate Reserve Fund would
have to be increased by an amount greater than 10% of the stated principal amount of such
Additional Certificates, then the Certificate Reserve Fund Requirement shall be such lesser
amount as is determined by a deposit of 10%; and provided, further, that, all or a part of
such Certificate Reserve Fund Requirement may be provided by a policy of insurance or
surety bond issued by a municipal bond insurance company obligations insured by which
have a rating by Moody's Investors Service and by Standard and Poor's which is in one of
the two highest rating categories then issued by said rating agencies or by a Letter of Credit.
Certificates, Capital Appreciation Certificates, Current Interest Certificates
The term "Certificates" means the certificates of participation executed and
delivered by the Trustee under and pursuant to the Trust Agreement.
The term "Capital Appreciation Certificates" means certificates the interest
component of which is compounded semiannually on each Interest Payment Date to maturity
as specified in the accreted value table for such Certificates in an Exhibit to a Supplemental
Trust Agreement.
The term "Current Interest Certificates" means Certificates the interest
component of which is payable on each Interest Payment Date through the Payment Date
specified for each such Certificate.
Code
The term "Code" means the Internal Revenue Code of 1986.
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Contractors
The term "Contractors" means the construction contractor for any Subsequent
Phase of the Project and any successor or successors to any thereof.
Corporation
The tenn "Corporation" means ABAC Finance Corporation.
County
The tern "County" means the County of Contra Costa, California, a body
corporate and politic and a political subdivision of the State of California.
Defeased Base Rental Payments
The term "Defeased Base Rental Payments" means the base rental payments
set forth in Exhibit B-I hereto, which are evidenced and represented by the 1991 Certificates
and are payable solely from the Escrow Fund.
Demised Premises
The tenn "Demised Premises" means that certain real property situated in the
County of Contra Costa, State of California, described in Exhibit A attached hereto and
made a part hereof, together with any additional real property added thereto by any
supplement or amendment hereto; subject, however, to any conditions, reservations, and
easements of record or known to the County.
Denominational Amount
The term "Denominational Amount" means, with respect to Capital
Appreciation Certificates, the initial offering price thereof, as specified in accordance with a
Supplemental Trust Agreement.
Event of Default
The tenn "Event of Default" shall have the meaning specified in Section 6.01
hereof.
Lease
The term "Lease" means this lease, as originally executed and recorded or as
it may from time to time be supplemented, modified or amended pursuant to the provisions
hereof and of the Trust Agreement.
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Lease Fund
The term "Lease Fund" means the fund of that name established in
Section 3.07 hereof.
Letter of Credit
The term "Letter of Credit" means an irrevocable and unconditional letter of
credit, a standby purchase agreement, a line of credit or other similar credit arrangement
issued by a Qualified Bank to provide all or a portion of the Certificate Reserve Fund
Requirement and submitted to and reviewed and approved by Moody's Investors Service and
Standard & Poor's.
License Fee Revenues
The term "License Fee Revenues" means those amounts allocated to the
County by the State Controller pursuant to California Revenue and Taxation Code Section
11001 et sec ., excluding that portion deposited to the Vehicle License Fee Account of the
Local Revenue Fund and allocated to the County pursuant to Chapter 89 of the Statutes of
1991 (Welfare and Institutions Code § 17604), enacted by the California State Legislature.
Moody's Investors Service
The term "Moody's Investors Service" means Moody's Investors Service, Inc.,
a corporation duly organized and existing under and by virtue of the laws of the State of
Delaware, and its successors and assigns, except that if such corporation shall be dissolved
or liquidated or shall no longer perform the functions of a securities rating agency, then the
term "Moody's Investors Service" shall be deemed to refer to any other nationally recognized
securities rating agency selected by the County.
1997 Certificates
The term "1997 Certificates" means the certificates of participation designated
"Series of 1997" executed and delivered by the Trustee under and pursuant to Section 2.01 of
the Trust Agreement.
Outstanding
The term "Outstanding," when applied to Certificates, shall have the meaning
ascribed to such term in the Trust Agreement.
Permitted Investments
The term "Permitted Investments" shall have the meaning ascribed to such
term in the Trust Agreement.
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Phase of the Project
The term "Phase of the Project" means Project Phase I or such Subsequent
Phase of the Project to which reference is made.
Project
The term "Project" means Project Phase I and all Subsequent Phases of the
Project.
Project Phase I
The term "Project Phase I" means those public facilities and buildings
described in Exhibit C hereto, together with parking, site development, landscaping, utilities,
fixtures, furnishings, equipment, improvements and appurtenant and related facilities, all
situated on the Demised Premises.
Qualified Bank
The term "Qualified Bank" means a state or national bank or trust company or
savings and loan association or a foreign bank with a domestic branch or agency which is
organized and in good standing under the laws of the United States or any state thereof or
any foreign country, which has a capital and surplus of $25,000,000 or more, which has an
uncollateralized unsecured short tenn debt rating by Moody's Investors Service of at least
"P-1" and by Standard & Poor's Corporation of at least "A-1 +" and which has an
uncollateralized unsecured long term debt rating by Moody's Investors Service of at least
"Aa" and by Standard & Poor's Corporation of at least "AA" at the time of issuance of the
Letter of Credit.
Site Lease
The term "Site Lease" means that lease, entitled "Site Lease (Capital Projects
Program)" (which amends and restates the Site and Facility Lease, dated as of February 1,
1991, by and between the County and the Corporation) and dated as of August 1, 1997,
between the County, as lessor, and the Authority, as lessee, as originally executed and
recorded or as it may from time to time be supplemented, modified or amended pursuant to
the provisions thereof and of the Trust Agreement.
Standard & Poor's
The term "Standard & Poor's" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., and its successors and assigns, except that if such entity shall
be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, then the term Standard & Poor's shall be deemed to refer to any other nationally
recognized securities rating agency selected by the County.
SF2-77508.2 7 40511-105-PCM-08104197
Subsequent Phase of the Project
The term "Subsequent Phase of the Project" means any and all facilities and
buildings for use by the County, whether within or without the County and all additions,
extensions or improvements thereto hereafter added to the Project and hereafter described by
an amendment or supplement hereto.
Supplemental Trust Agreement
The teen "Supplemental Trust Agreement" means any supplement or
amendment to the Trust Agreement hereafter duly authorized and entered into between the
Authority, the County and the Trustee in accordance with the provisions of the Trust
Agreement.
Tax Certificate
The term "Tax Certificate" shall have the meaning ascribed to such term in the
Trust Agreement.
Trust Agreement
The term "Trust Agreement" means the trust agreement, dated as of August 1,
1997, by and among the Trustee, the Authority and the County, pursuant to which the
Trustee will execute and deliver the 1997 Certificates, as originally executed or as it may
from time to time be supplemented, modified or amended by a Supplemental Trust
Agreement entered into pursuant to the provisions of the Trust Agreement.
Trustee a
The term "Trustee" means First Trust of California, National Association,
appointed as trustee pursuant to the Trust Agreement, and any successor appointed under the
Trust Agreement.
Written Rgq,uest of the Authority
The term "Written Request of the Authority" means an instrument in writing
signed by or on behalf of the Authority by its Chair, Vice-Chair, Executive Director,
Assistant Executive Director or Deputy Executive Director or a designee of any such officer
or by any other person (whether or not an officer of the Authority) who is specifically
authorized by resolution of the Board of Directors of the Authority to sign or execute such a
document on its behalf.
Written Request of the County
The teen "Written Request of the County" means an instrument in writing
signed by the County Administrator of the County or his designee, or by a Deputy County
SF2-77508.2 8 40511-105-PCM-08/04/97
Administrator of the County, or by any other officer of the County duly authorized by the
Board of Supervisors of the County in writing to the Trustee for that purpose.
ARTICLE II
LEASE OF DEMISED PREMISES AND PROJECT; TERM
SECTION 2.01. Lease of Demised Premises and Project. The Authority
hereby leases to the County and the County hereby leases from the Authority the Demised
Premises and the Project located thereon, subject, however, to all easements, encumbrances,
and restrictions that exist at the time of the commencement of the term of this Lease. The
County hereby agrees and covenants during the term of this Lease that, except as hereinafter
provided, it will use the Project for public and County purposes so as to afford the public the
benefits contemplated by this Lease.
The leasing by the Authority to the County of the Demised Premises shall not
effect or result in a merger of the County's leasehold estate pursuant to this Lease and its fee
estate as lessor under the Site Lease, and the Authority shall continue to have and hold a
leasehold estate in said Demised Premises pursuant to the Site Lease throughout the term
thereof and the term of this Lease. As to said Demised Premises, this Lease shall be deemed
and constitute a sublease.
The Prior Facility Lease covered the real property described on Exhibit A-I
hereto (the "1991 Demised Premises"). The parties acknowledge that the Demised Premises
described in Exhibit A-II hereto were not included in the Prior Facility Lease.
SECTION 2.02. Tenn; Occupancy. The tenn of the Prior Facility Lease
shall not terminate pursuant to Section 4.2 thereof and the tern of this Lease as an
amendment and restatement of the Prior Facility Lease shall commence on the date of
recordation of this Lease in the office of. the County Recorder of Contra Costa County, State
of California, or on October 1, 1997 whichever is earlier, and shall end on February 1,
unless such term is extended or sooner tenninated as hereinafter provided. If on
February 1, , the Certificates shall not be fully paid, or if the rental payable hereunder
shall have been abated at any time and for any reason, then the term of this Lease shall be
extended until ten (10) days after all Certificates shall be fully paid, except that the term of
this Lease shall in no event be extended beyond February 1, . If prior to February 1,
all Certificates shall be fully paid, or provision therefor made, the term of this Lease
shall end ten (10) days thereafter or ten (10) days after written notice by the County to the
Authority, whichever is earlier.
It is contemplated that the County will take possession of Project Phase I on
the date of recordation hereof.
SECTION 2.03. Substitution. The County and the.Authority may substitute
real property as part of the Demised Premises and the Project for purposes of the Site Lease
and the Facility Lease, but only after the County shall have filed with the Authority and the
SF2-77508.2 9 40511-105-PCM-08/04/97
Trustee, with copies to each rating agency then providing a rating for the Certificates, all of
the following:
(a) Executed copies of the Site Lease and the Facility Lease or
amendments thereto containing the amended description of the Project and the
Demised Premises, including the legal description of the Demised Premises as
modified if necessary.
(b) A Certificate of the County with copies of the Site Lease and
the Facility Lease, if needed, or amendments thereto containing the amended
description of the Project and the Demised Premises stating that such documents have
been duly recorded in the official records of the County Recorder of the County.
(c) A Certificate of the County, evidencing that the annual fair
rental value of the Project and the Demised Premises which will constitute the Project
and the Demised Premises after such substitution will be at least equal to 100% of the
maximum amount of Base Rental Payments becoming due in the then current year
ending February 1 or in any subsequent year ending February 1.
(d) A Certificate of the County stating that, based upon review of
such instruments, certificates or any other matters described in such Certificate of the
County, the County has good merchantable title to the Project and the Demised
Premises which will constitute the Project and the Demised Premises after such
substitution. The term "Good Merchantable Title" shall mean such title as is
satisfactory and sufficient for the needs and operations of the County.
(e) A Certificate of the County stating that such substitution does
not adversely affect the County's use and occupancy of the Project and the Demised
Premises.
(f) An Opinion of Counsel (as such term is defined in the Trust
Agreement) stating that such amendment or modification (i) is authorized or permitted
by the Constitution and laws of the State and this Trust Agreement; (ii) complies with
the terms of the Constitution and laws of the State and of this Trust Agreement;
(iii) will, upon the execution and delivery thereof, be valid and binding upon the
Authority and the County in accordance with its ten-ns; and (iv) will not cause the
interest represented by the Certificates to be included in gross income for federal
income tax purposes.
SF2-77508.2 10 40511-105-PCM-08104197
ARTICLE III
RENTAL PAYMENTS; USE OF PROCEEDS
SECTION 3.01. Base Rental Payments. The County agrees to pay to the
Authority, as Base Rental Payments for the use and occupancy of the Project and the
Demised Premises (subject to the provisions of Sections 3.04, 3.06 and 7.01 of this Lease)
annual rental payments with principal and interest components, the interest components being
payable semi-annually, in accordance with the Rental Payment Schedule attached hereto as
Exhibit B and made a part hereof. Base Rental Payments shall be calculated on an annual
basis, for the twelve-month periods commencing on February 1 and ending on January 31,
and each annual Base Rental shall be divided into two interest components, due on
February 1 and August 1 of each rental payment period, and one principal component, due
on February 1 of each rental payment period, except that the first Base Rental Payment
period commenced on the date of recordation of the Facility Lease and ended on January 31,
1998. Each Base Rental Payment installment shall be payable on the fifteenth (15th) day of
the month immediately preceding its due date and any interest or other income with respect
thereto accruing prior to such due date shall belong to the County and shall be returned by
the Authority to the County on February 1 and August 1 of each year. The interest
components of the Base Rental Payments shall be paid by the County as and constitute
interest paid on the principal components of the Base Rental Payments to be paid by the
County hereunder, computed on the basis of a 360-day year composed of twelve 30-day
months. Each annual payment of Base Rental (to be payable in installments as aforesaid)
shall be for the use of the Demised Premises and the Project.
The Base Rental Payments set forth in the Rental Payment Schedule attached
as Exhibit B-I to this Lease consist of the Defeased Base Rental Payments. The County shall
remain liable for such Defeased Base Rental Payments, but only out of moneys or securities
deposited with the Prior Trustee in the Escrow Fund. The Defeased Base Rental Payments
shall not be subject to abatement or to the other provisions of Section 3.06, 7.01, 7.02(a) or
7.03 of this Lease or to any termination of this Lease but shall be special obligations of the
County limited to the amounts on deposit in the Escrow Fund.
If the term of this Lease shall have been extended pursuant to Section 2.02
hereof, Base Rental Payment installments shall continue to be due on February 1 and
August 1 in each year, and payable prior thereto as hereinabove described, continuing to and
including the date of termination of this Lease. Upon such extension of this Lease, the
County shall deliver to the Trustee a Certificate setting forth the extended rental payment
schedule, which schedule shall establish the principal and interest components of the Base
Rental Payments so that the principal components will in the aggregate be sufficient to pay
all unpaid principal components with interest components sufficient to pay all unpaid interest
components plus interest on the extended principal components at a rate equal to the rate of
interest on the principal component of the Base Rental payable on February 1,
If at any time the Base Rental hereunder shall not have been paid by the
County, for any reason whatsoever, and no other source of funds shall have been available to
make the payments of principal and interest represented by the Certificates to the persons
entitled to receive such payments, the principal and interest components of the Base Rental
SF2-77508.2 1 1 40511-105-PCM-08/04/97
shall be recalculated by the County to reflect interest on the unpaid principal components at
the rate or rates specified in the Trust Agreement, and a revised Exhibit B to this Facility
Lease shall be prepared by the County and supplied to the Authority and the Trustee
reflecting such reallocation.
SECTION 3.02. Additional Payments. The County shall also pay such
amounts (herein called the "Additional Payments") as shall be required by the Authority for
the payment of all costs and expenses incurred by the Authority in connection with the
execution, performance or enforcement of this Lease or any assignment hereof, the Trust
Agreement, its interest in the Demised Premises and the lease of the Demised Premises and
the Project to the County, including but not limited to payment of all fees, costs and
expenses and all administrative costs of the Authority related to the Demised Premises and
the Project, including, without limiting the generality of the foregoing, salaries and wages of
employees, all expenses, compensation and indemnification of the Trustee payable by the
Authority under the Trust Agreement, fees of auditors, accountants, attorneys or architects,
and all other necessary administrative costs of the Authority or charges required to be paid
by it in order to maintain its existence or to comply with the terns of the Certificates or of
the Trust Agreement; but not including in Additional Payments amounts required to pay the
principal or interest represented by the Certificates.
Such Additional Payments shall be billed to the County by the Authority or the
Trustee from time to time, together with a statement certifying that the amount billed has
been paid by the Authority or by the Trustee on behalf of the Authority, for one or more of
the items above described, or that such amount is then payable by the Authority or the
Trustee for such items. Amounts so billed shall be paid by the County to the billing party
within 15 days after receipt of the bill by the County. The County reserves the right to audit
billings for Additional Payments although exercise of such right shall in no way affect the
duty of the County to make full and timely payment for all Additional Payments. Any
payments of Additional Payments not expended upon receipt by the Trustee shall be held by
the Trustee in the Trust Administration Fund pursuant to the Trust Agreement.
The Authority has issued and may in the future issue bonds and has entered
into and may in the future enter into leases to finance facilities other than the Demised
Premises and the Project. The administrative costs of the Authority shall be allocated among
said facilities and the Project, as hereinafter in this paragraph provided. The fees of the
Trustee under the Trust Agreement, and any other expenses directly attributable to the
Project shall be included in the Additional Payments payable hereunder. The fees of any
trustee or paying agent under any indenture securing bonds of the Authority or any trust
agreement other than the Trust Agreement, and any other expenses directly attributable to
any facilities other than the Project; shall not be included in the administrative costs of the
Project and shall not be paid from the Additional Payments payable hereunder. Any
expenses of the Authority not directly attributable to any particular project of the Authority
shall be equitably allocated among all such projects, including the Project, in accordance with
sound accounting practice. In the event of any question or dispute as to such allocation, the
written opinion of an independent tinn of certified public accountants, employed by the
Authority to consider the question and render an opinion thereon, shall be a final and
conclusive determination as to such allocation. The Trustee may conclusively rely upon the
SF2-77508.2 12 40511-105-PCM-08/04/97
Written Request of the Authority, with the approval of the Assistant County Administrator -
Finance of the County, or by a Deputy County Administrator of the County, or a duly
authorized representative of the County, endorsed thereon, in making any determination that
costs are payable as Additional Payments hereunder, and shall not be required to make any
investigation as to whether or not the items so requested to be paid are expenses of operation
of the Project.
SECTION 3.03. Fair Rental Value. Such payments of Base Rental Payments
for each rental period during the term of this Lease shall constitute the total rental for said
rental period and shall be paid by the County in each rental payment period for and in
consideration of the right of use and occupancy of, and continued quiet use and enjoyment
of, the Demised Premises and, following completion of construction, each Phase of the
Project during each such period for which said rental is to be paid. The parties hereto have
agreed and determined that such total (excluding Defeased Base Rental Payments) rental
payable for each twelve-month period beginning February 1 represents the fair rental value
of the Demised Premises and the Project for each such period. In making such
determination, consideration has been given to costs of acquisition, design, construction and
financing of the Project, other obligations of the parties under this Lease, the uses and
purposes which may be served by the Project and the benefits therefrom which will accrue to
the County and the general public.
SECTION 3.04. Payment Provisions. Each installment of rental payable
hereunder shall be paid in lawful money of the United States of America to or upon the order
of the Authority at the corporate trust office of the Trustee in Los Angeles, California, or
such other place as the Authority shall designate. Any such installment of rental accruing
hereunder which shall not be paid when due and payable under the terns of this Lease shall
bear interest at the rate of twelve percent (12%) per annum, or such lesser rate of interest as
may be permitted by law, from the date when the same is due hereunder until the same shall
be paid. Notwithstanding any dispute between the Authority and the County, the County
shall make all rental payments when due without deduction or offset of any kind and shall
not withhold any rental payments pending the final resolution of such dispute. In the event
of a determination that the County was not liable for said rental payments or any portion
thereof, said payments or excess of payments, as the case may be, shall be credited against
subsequent rental payments due hereunder or refunded at the time of such determination.
Amounts required to be deposited by the County with the Trustee pursuant to this Section on
any date shall be reduced to the extent of amounts on deposit in the Base Rental Payment
Fund, the Interest Fund or the Principal Fund and available therefor.
All payments received shall be applied first to the interest components of the
Base Rental Payments due hereunder, then to the principal components of the Base Rental
Payments due hereunder and thereafter to all Additional Payments due hereunder, but no
such application of any payments which are less than the total rental due and owing shall be
deemed a waiver of any default hereunder.
Rental is subject to abatement as provided in Section 3.06.
SF2-77508.2 13 40511-105-PCM-08/04/97
Nothing contained in this Lease shall prevent the County from making from
time to time contributions or advances to the Authority for any purpose now or hereafter
authorized by law, including the making of repairs to, or the restoration of, the Project in the
event of damage to or the destruction of the Project.
SECTION 3.05. Appropriations Covenant: License Fee Revenues. The
County covenants to take such action as may be necessary to include all such Base Rental
Payments and Additional Payments due hereunder in its annual budgets, to make necessary
annual appropriations for all such Base Rental Payments and Additional Payments as shall be
required to provide funds in such year for such Base Rental Payments and Additional
Payments. The County will deliver to the Authority and the Trustee within sixty (60) days
of adoption of the County budget a Certificate of the County stating that the budget as
adopted appropriates all moneys necessary for the payment of Base Rental Payments and
Additional Payments hereunder. The covenants on the part of the County herein contained
shall be deemed to be and shall be construed to be duties imposed by law and it shall be the
duty of each and every public official of the County to take such action and do such things as
are required by law in the perfonnance of the official duty of such officials to enable the
County to carry out and perform the covenants and agreements in this Lease agreed to be
carried out and performed by the County.
The Authority and the County understand and intend that the obligation of the
County to pay Base Rental Payments and Additional Payments hereunder shall constitute a
current expense of the County and shall not in any way be construed to be a debt of the
County in contravention of any applicable constitutional or statutory limitation or requirement
concerning the creation of indebtedness by the County, nor shall anything contained herein
constitute a pledge of the general tax revenues, funds or moneys of the County other than the
pledge of License Fee Revenues. Base Rental Payments and Additional Payments due
hereunder shall be payable only from current funds which are budgeted and appropriated or
on deposit in the Lease Fund or Certificate Reserve Fund or otherwise legally available for
the purpose of paying Base Rental Payments and Additional Payments or other payments due
hereunder as consideration for use of the Project. This Lease shall not create an immediate
indebtedness for any aggregate payments which may become due hereunder in the event that
the term of the Lease is continued. The County has not pledged the full faith and credit of
the County, the State of California or any agency or department thereof to the payment of
the Base Rental Payments and Additional Payments or any other payments due hereunder.
The County hereby elects pursuant to Section 25350.55 of the California
Government Code to guarantee the Base Rental Payments payable hereunder by an
apportionment of License Fee Revenues as provided in said Government Code Section and
Section 5.01 of the Trust Agreement. To the extent permitted by law, the County hereby
pledges and grants a security interest in the License Fee Revenues to secure the timely
payment, when due, of the Base Rental Payments. However, the County reserves the right
to guarantee other obligations of the County with the License Fee Revenues and to grant to
the holders of such obligations a pledge and security interest in the License Fee Revenues on
a parity basis with the pledge and security interest granted herein.
SF2-77508.2 14 40511-105-PCM-08/04/97
SECTION 3.06. Rental Abatement. Except to the extent of amounts held by
the Trustee in the Lease Fund or in the Certificate Reserve Fund or otherwise available to
the Trustee for payments in respect of the Certificates, the Base Rental Payments (excluding
Defeased Base Rental Payments) shall be abated proportionately, during any period in which
by reason of any damage or destruction (other than by condemnation which is hereinafter
provided for) there is substantial interference with the use and occupancy of the Demised
Premises and the Project by the County, in the proportion in which the initial cost of that
portion of the Demised Premises and the Project rendered unusable bears to the initial cost of
the whole of the Demised Premises and the Project. Such abatement shall continue for the
period commencing with such damage or destruction and ending with the substantial
completion of the work of repair or reconstruction. In the event of any such damage'or
destruction, this Lease shall continue in frill force and effect and the County waives any right
to terminate this Lease by virtue of any such damage or destruction.
SECTION 3.07. Use of Proceeds-, Lease Fund-, Certificate Reserve Fund-,
Investments.
(a) Use of Proceeds. The parties hereto agree that the proceeds of the
1997 Certificates will be used to refinance the acquisition and renovation of the 1991 Project,
to finance certain additional capital improvements, to establish the Lease Fund and the
Certificate Reserve Fund hereinafter referred to and the Trust Administration Fund referred
to in the Trust Agreement and to pay the costs of issuing the 1997 Certificates and incidental
and related expenses.
(b) Lease Fund. In consideration for the agreements and covenants of the
County herein, upon the sale and delivery of the 1997 Certificates a sum equal to the amount
of accrued interest received by the Trustee upon the sale of the Certificates shall be paid
directly to the Trustee for deposit in a separate special fund, to be held by the Trustee for
and on behalf of the County, known as the "Facility Lease (Capital Projects Program) Lease
Fund" (herein called the "Lease Fund"). The Trustee shall maintain the Lease Fund and
apply the moneys on deposit therein for payment of the Base Rental Payments due from the
County on February 1, 1998. On such date as no funds remain in the Lease Fund, the Lease
Fund shall be closed.
On February 1 and August 1 of each year, the Trustee shall transfer any
earnings on investments of money in the Lease Fund to the Acquisition and Construction
Fund established pursuant to Section 3.02(5) of the Trust Agreement. The County hereby
pledges and grants a lien on and a security interest in the Lease Fund to the Authority in
order to secure the County's obligation to pay the Base Rental Payments as herein provided.
(c) Certificate Reserve Fund. In further consideration for the agreements
and covenants of the County herein, the Authority further agrees to cause to be paid to the
County upon the sale and delivery of the 1997 Certificates a sum equal to the Certificate
Reserve Fund Requirement for deposit with the Trustee in a separate special fund, to be held
by the Trustee for and on behalf of the County, known as the "Facility Lease (Capital
Projects Program) Certificate Reserve Fund" (the "Certificate Reserve Fund").
SF2-77508.2 15 40511-105-PCM-08/04/97
If on February 1 or August I of any year the amount in the Certificate
Reserve Fund exceeds the Certificate Reserve Fund Requirement, the Trustee, if the County
is not then in default hereunder and if the Authority and the County are not then in default
under the Trust Agreement, shall pay the amount of such excess to the County, unless any
portion of such excess shall be needed to increase the balance in the Trust Administration
Fund established pursuant to the Trust Agreement to the amount required to be on deposit in
said fund, in which event the Trustee shall transfer such portion to the Trust Administration
Fund, or if such February 1 or August 1 is prior to the date of receipt by the Trustee of a
Certificate of the County stating that the Capital Improvements have been substantially
completed, in which event the Trustee shall transfer such portion to the Acquisition and
Construction Fund established pursuant to Section 3.02(4) of the Trust Agreement. Except
for such withdrawals, the County agrees that the Trustee shall apply the moneys on deposit
in the Certificate Reserve Fund solely for the payment of Base Rental Payments due and
payable by the County if and when rental shall be abated in accordance with Section 3.06
hereof or when other moneys of the County are not otherwise available to make such Base
Rental Payments. The County hereby pledges and grants a lien on and a security interest in
the Certificate Reserve Fund to the Authority in order to secure the County's obligation to
pay the Base Rental Payments as herein provided. The County further agrees that if at any
time the balance in the Certificate Reserve Fund shall be reduced below the Certificate
Reserve Fund Requirement, the first payments of Base Rental Payments thereafter payable by
the County and not needed to pay Base Rental interest and principal components payable to
the Certificate Owners on the next Base Rental due date shall be used to increase the balance
in the Certificate Reserve Fund to the required Certificate Reserve Fund Requirement and
then to the payment of amounts owed to the provider of a surety bond or Letter of Credit
used to satisfy the Certificate Reserve Fund Requirement. At the tennination of this Lease in
accordance with its teens, any balance remaining in the Certificate Reserve Fund shall be
released from the foregoing pledge, lien and security interest and may be transferred to such
other fund or account of the County, or otherwise used by the County for any other lawful
purposes, as the County may direct.
(d) Investments. Upon the Written Request of the County any moneys held
by the Trustee in the Lease Fund shall be invested by the Trustee in Permitted Investments
(as that tenn is defined in the Trust Agreement) which will mature on or before the date such
funds are needed for expenditure from such fund. Upon the Written Request of the County
any moneys held by the Trustee in the Certificate Reserve Fund shall be invested by the
Trustee in Permitted Investments which will mature on or before the date of the last
scheduled Base Rental Payment. If no such Written Request is filed with the Trustee, the
Trustee shall invest such moneys in Permitted Investments described in clauses (1) and (9) of
the definition thereof.
SF2-77508.2 16 40511-105-PCM-08/04/97
ARTICLE IV
MAINTENANCE; ALTERATIONS AND ADDITIONS
SECTION 4.01. Maintenance and Utilities. During such time as the County
is in possession of the Demised Premises and the Project, all maintenance and repair, both
ordinary and extraordinary, of the Project shall be the responsibility of the County, which
shall at all times maintain or otherwise arrange for the maintenance of the Project in first
class condition, and the County shall pay for or otherwise arrange for the payment of all
utility services supplied to the Project, which may include, without limitation, janitor service,
security, power, gas, telephone, light, heating, ventilation, air conditioning, water and all
other utility services, and shall pay for or otherwise arrange for 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 County or any assignee or sublessee thereof or any other cause and shall
pay for or otherwise arrange for the payment of all insurance policies required to be
maintained with respect to the Project. In exchange for the rental herein provided, the
Authority agrees to provide only the Demised Premises and the Project.
SECTION 4.02. Changes to the Project. Subject to Section 8.02 hereof, the
County shall, at its own expense, have the right to remodel the Project or to make additions,
modifications and improvements to the Project and the Demised Premises. All such
additions, modifications and improvements shall thereafter comprise part of the Project and
the Demised Premises and be subject to the provisions of this Lease. Such additions,
modifications and improvements shall not in any way damage the Project 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, modifications and improvements made
pursuant to this Section, shall be of a value which is at least equal to the value of the Project
immediately prior to the making of such additions, modifications and improvements.
SECTION 4.03. Installation of County's Equipment. The County and any
sublessee may at any time and from time to time, in its sole discretion and at its own
expense, install or permit to be installed other items of equipment or other personal property
in or upon the Project and the Demised Premises. All such items shall remain the sole
property of such party, in which neither the Authority nor the Trustee shall have any interest,
and may be modified or removed by such party at any time provided that such party shall
repair and restore any and all damage to the Project resulting from the installation,
modification or removal of any such items. Nothing in this Lease shall prevent the County
from purchasing items to be installed pursuant to this Section under a conditional sale or
lease purchase contract, or subject to a vendor's lien or security agreement as security for the
unpaid portion of the purchase price thereof, provided that no such lien or security interest
shall attach to any part of the Project or Demised Premises.
SF2-77508.2 17 40511-105-PCM-08/04/97
ARTICLE V
INSURANCE
SECTION 5.01. Fire and Extended Coverage Insurance. The County shall
procure or cause to be procured and maintain or cause to be maintained, throughout the term
of this Lease (but during the period of construction of any Phase of the Project only if such
insurance is not provided by a Contractor under a construction contract referred to in
Section 4.01 hereof or in the corresponding section of an amendment hereto), insurance
against loss or damage to any structures constituting any part of the Project by fire and
lightning, with extended coverage insurance, vandalism and malicious mischief insurance and
sprinkler system leakage insurance. Said extended coverage insurance shall, as nearly as
practicable, cover loss or damage by explosion, windstonn, riot, aircraft, vehicle damage,
smoke and such other hazards as are normally covered by such insurance. Such insurance
shall be in an amount equal to the replacement cost (without deduction for depreciation) of
all structures constituting any part of the Project, excluding the cost of excavations, of
grading and filling, and of the land (except that such insurance may be subject to deductible
clauses for any one loss of not to exceed $50,000 or comparable amount adequate for
inflation), or, in the alternative, shall be in an amount and in a form sufficient (together with
moneys in the Certificate Reserve Fund referred to in Section 3.07(c) hereof), in the event of
total or partial loss, to enable all Certificates then Outstanding to be prepaid.
In the event of any damage to or destruction of any part of the Project, caused
by the perils covered by such insurance, the Authority, except as hereinafter provided, shall
cause the proceeds of such insurance to be utilized for the repair, reconstruction or
replacement of the damaged or destroyed portion of the Project, and the Trustee shall hold
said proceeds separate and apart from all other funds, in a special fund to be designated the
"Insurance and Condemnation Fund," to the end that such proceeds shall be applied to the
repair, reconstruction or replacement of the Project to at least the same good order, repair
and condition as they were in.prior to the damage or destruction, insofar as the same may be
accomplished by the use of said proceeds. The Trustee shall pen-nit withdrawals of said
proceeds from time to time upon receiving the Written Request of the Authority, stating that
the Authority has expended moneys or incurred liabilities in an amount equal to the amount
therein requested to be paid over to it for the purpose of repair, reconstruction or
replacement, and specifying the items for which such moneys were expended, or such
liabilities were incurred. Any balance of said proceeds not required for such repair,
reconstruction or replacement shall be treated by the Trustee as Base Rental Payments and
applied in the manner provided by Section 5.02 of the Trust Agreement. Alternatively, the
Authority, at its option, with the written consent of the County, and if the proceeds of such
insurance together with any other moneys then available for the purpose are at least sufficient
to prepay an aggregate principal amount represented by Outstanding Certificates, equal to
the amount of Outstanding Certificates attributable to the portion of the Project so destroyed
or damaged (determined by reference to the proportion which the construction cost of such
portion of the Project bears to the construction cost of the Project), may elect not to repair,
reconstruct or replace the damaged or destroyed portion of the Project and thereupon shall
cause said proceeds to be used for the prepayment of Outstanding Certificates pursuant to the
provisions of the Trust Agreement.
SF2-77508.2 18 40511-105-PCM-08/04/97
The Authority and the County shall promptly apply for Federal disaster aid or
State of California disaster aid in the event that the Project is damaged or destroyed as a
result of an earthquake occurring at any time. Any proceeds received as a result of such
disaster aid shall be used to repair, reconstruct, restore.or replace the damaged or destroyed
portions of the Project, or, at the option of the County and the Authority, to prepay
Outstanding Certificates if such use of such disaster aid is permitted.
As an alternative to providing the insurance required by the first paragraph of
this Section, or any portion thereof, the County, with the written consent of the Authority,.
may provide a self insurance method or plan of protection if and to the extent such self
insurance method or plan of protection shall afford reasonable coverage for the risks required
to be insured against, in light of all circumstances, giving consideration to cost, availability
and similar plans or methods of protection adopted by public entities in the State of
California other than the County. Before such other method or plan may be provided by the
County, and annually thereafter so long as such method or plan is being provided to satisfy
the requirements of this Lease, there shall be filed with the Trustee a certificate of an
actuary, insurance consultant or other qualified person, stating that, in the opinion of the
signer, the substitute method or plan of protection is in accordance with the requirements of
this Section and, when effective, would afford reasonable coverage for the risks required to
be insured against. There shall also be filed a Certificate of the County setting forth the
details of such substitute method or plan. In the event of loss covered by any such self
insurance method, the liability of the County hereunder shall be limited to the amounts in the
self insurance reserve fund or funds created under such method.
SECTION 5.02. Liability Insurance. Except as hereinafter provided, the
County shall procure or cause to be procured and maintain or cause to be maintained,
throughout the term of this Lease (but during the period of construction of any Phase of the
Project only if such insurance is not provided by a Contractor under a construction contract
referred to in Section 4.01 hereof or in the corresponding section of an amendment hereto), a
standard comprehensive general liability insurance policy or policies in protection of the
Authority and its members, directors, officers, agents and employees and the Trustee,
indemnifying said parties against all direct or contingent loss or liability for damages for
personal injury, death or property damage occasioned by reason of the operation of the
Project, with 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 $200,000 for damage to property resulting from each
accident or event. Such public liability and property damage insurance may, however, be in
the fonn 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 liability
insurance carried by the County.
As an alternative to providing the insurance required by the first paragraph of
this Section, or any portion thereof, the County, with the written consent of the Authority,
may provide a self insurance method or plan of protection if and to the extent such self
insurance method or plan of protection shall afford reasonable protection to the Authority, its
members, directors, officers, agents and employees and the Trustee, in light of all
circumstances, giving consideration to cost, availability and similar plans or methods of
SF2-77508.2 19 40511-105-PCM-08/04/97
protection adopted by public entities in the State of California other than the County. Before
such other method or plan may be provided by the County, and annually thereafter so long as
such method or plan is being provided to satisfy the requirements of this Lease, there shall
be filed with the Trustee a certificate of an actuary, independent insurance consultant or other
qualified person, stating that, in the opinion of the signer, the substitute method or plan of
protection is in accordance with the requirements of this Section and, when effective, would
afford reasonable protection to the Authority, its members, directors, officers, agents and
employees and the Trustee against loss and damage from the hazards and risks covered
thereby. There shall also be filed a Certificate of the County setting forth the details of such
substitute method or plan.
SECTION 5.03. Rental Interruption or Use and Occupancy Insurance. The
County shall procure or cause to be procured and maintain or cause to be maintained (but
during the period of constriction of any Phase of the Project only if such insurance is not
provided by a Contractor under a construction contract referred to in Section 4.01 hereof or
in the corresponding section of an amendment hereto), rental interruption or use and
occupancy insurance to cover loss, total or partial, of the rental income from or the use of
the Project as the result of any of the hazards covered by the insurance required by
Section 5.01 hereof, in an amount sufficient to pay the part of the total rent hereunder
attributable to the portion of the Project rendered unusable (determined by reference to the
proportion which the construction cost of such portion bears to the construction cost of the
Project) for a period of at least two years, except that suuch insurance may be subject to a
deductible clause of not to exceed one hundred thousand dollars ($100,000) or a comparable
amount adjusted for inflation. Any proceeds of such insurance shall be used by the Trustee
to reimburse to the County any rental theretofore paid by the County under this Lease
attributable to such structure for a period of time during which the payment of rental under
this Lease is abated, and any proceeds of such insurance not so used shall be applied as
provided in Section 3.01 (to the extent required for the payment of Base Rental) and in
Section 3.02 (to the extent required for the payment of Additional Payments).
SECTION 5.04. Worker's Compensation. The County shall also maintain .
worker's compensation insurance issued by a responsible carrier authorized under the laws of
the State of California to insure its employees against liability for compensation under the
Worker's Compensation Insurance and Safety Act now in force in California, or any act
hereafter enacted as an amendment or supplement thereto. As an alternative, such insurance
may be maintained as part of or in conjunction with any other insurance carried by the
County. Such insurance may be maintained by the County in the fonn of self-insurance with
the prior written consent of the Authority.
SECTION 5.05. Insurance Proceeds; Form of Policies. All policies of
insurance required by Sections 5.01 and 5.03 hereof 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 Insuurance Services Office and the
California Bankers Association. The Trustee shall collect, adjust and receive all moneys
which may become due and payable under any such policies, may compromise any and all
claims thereunder and shall apply the proceeds of such insurance as provided in
Sections 5.01 and 5.03. All policies of insurance required by this Lease shall provide that
SF2-77508.2 20 40511-105-PCM-08/04/97
the Trustee shall be given thirty (30) days notice of each expiration thereof or 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 by the Trustee. The County shall pay when due the
premiums for all insurance policies required by this Lease, and shall the promptly furnish
evidence of such payments to the Authority.
The County will deliver to the Authority and the Trustee on or before
September 15 in each year a written Certificate of an officer of the County stating whether
such policies satisfy the requirements of this Lease, setting forth the insurance policies then
in force pursuant to this Section, the names of the insurers which have issued the policies,
the amounts thereof and the property and risks covered thereby, and, if any self-insurance
program is being provided, the annual report of an actuary, independent insurance consultant
or other qualified person containing the infonnation required for such self-insurance program
and described in Sections 5.01, 5.02 and 5.04. Delivery to the Trustee of the certificate
under the provisions of this Section shall not confer responsibility upon the Trustee as to the
sufficiency of coverage or amounts of such policies. If so requested in writing by the
Trustee, the County shall also deliver to the Trustee certificates or duplicate originals or
certified copies of each insurance policy described in such schedule.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Defaults and Remedies. (a) If the County shall fail to pay
any rental payable hereunder when the same becomes due, time being expressly declared to
be of the essence of this Lease, or the County shall fail to keep, observe or perform any
other term, covenant or condition contained herein to be kept or performed by the County for
a period of thirty (30) days after notice of the same has been given to the County by the
Authority or the Trustee or for such additional time as is reasonably required, in the sole
discretion of the Trustee, to correct the same, or upon the happening of any of the events
specified in subsection (b) of this Section (any such case above being an "Event of Default"),
the County shall be deemed to be in default hereunder and it shall be lawful for the Authority
to exercise any and all remedies available pursuant to law or granted pursuant to this Lease.
Upon any such default, the Authority, in addition to all other rights and remedies it may
have at law, shall have the option to do any of the following:
(1) To terminate this Lease in the manner hereinafter provided on
account of default by the County, notwithstanding any re-entry or re-letting of the
Demised Premises and the Project as hereinafter provided for in subparagraph (2)
hereof, and to re-enter the Demised.Premises and the Project and remove all persons
in possession thereof and all personal property whatsoever situated upon the Demised
Premises and the Project and place such personal property in storage in any
warehouse or other suitable place located within the County of Contra Costa,
California. In the event of such termination, the County agrees to surrender
immediately possession of the Demised Premises and the Project, without let or
SF2-77508.2 21 40511-105-PCM-08/04/97
hindrance, and to pay the Authority all damages recoverable at law that the Authority
may incur by reason of default by the County, including, without limitation, any
costs, loss or damage whatsoever arising out of, in connection with, or incident to any
such re-entry upon the Demised Premises and the Project and removal and storage of
such property by the Authority or its duly authorized agents in accordance with the
provisions herein contained. Neither notice to pay rent or to deliver up possession of
the Demised Premises or the Project given pursuant to law nor any entry or re-entry
by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by
the Authority for the purpose of effecting such re-entry or obtaining possession of the
Demised Premises and the Project nor the appointment of a receiver upon initiative of
the Authority to protect the Authority's interest under this Lease shall of itself operate
to terminate this Lease, and no termination of this Lease on account of default by the
County shall be or become effective by operation of law or acts of the parties hereto,
or otherwise, unless and until the Authority shall have given written notice to the
County of the election on the part of the Authority to terminate this Lease. The
County covenants and agrees that no surrender of the Demised Premises and the
Project or of the remainder of the term hereof or any termination of this Lease shall
be valid in any manner or for any purpose whatsoever unless stated or accepted by
the Authority by such written notice.
(2) Without terminating this Lease, (i) to collect each installment of
rent as it becomes due and enforce any other terms or provision hereof to be kept or
performed by the County, regardless of whether or not the County has abandoned the
Project, or (ii) to exercise any and all rights of re-entry upon the Demised Premises
and the Project. In the event the Authority does not elect to terminate this Lease in
the manner provided for in subparagraph (1) hereof, the County shall remain liable
and agrees to keep or perform all covenants and conditions herein contained to be
kept or performed by the County and, if the Demised Premises and the Project are
not re-let, to pay the full amount of the rent to the end of the term of this Lease or, in
the event that the Demised Premises and the Project are re-let, to pay any deficiency
in rent that results therefrom; and further agrees to pay said rent and/or rent
deficiency punctually at the same time and in the same manner as hereinabove
provided for the payment of rent hereunder (without acceleration), notwithstanding the
fact that the Authority may have received in previous years or may receive thereafter
in subsequent years rental in excess of the rental herein specified, and notwithstanding
any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise,
brought by the Authority for the purpose of effecting such entry or re-entry or
obtaining possession of the Demised Premises and the Project. Should the Authority
elect to enter or re-enter as herein provided, the County hereby irrevocably appoints
the Authority as the agent and attorney-in-fact of the County to re-let the Demised
Premises and the Project, or any part thereof, from time to time, either in the
Authority's name or otherwise, upon such terms and conditions and for such use and
period as the Authority may deem advisable, and to remove all persons in possession
thereof and all personal property whatsoever situated upon the Demised Premises and
the Project and to place such personal property in storage in any warehouse or other
suitable place located in the County of Contra Costa, California, for the account of
and at the expense of the County, and the County hereby exempts and agrees to save
SF2-77508.2 22 40511-105-PCM-08/04/97
harmless the Authority from any costs, loss or damage whatsoever arising out of, in
connection with, or incident to any such re-entry upon and re-letting of the Demised
Premises and the Project and removal and storage of such property by the.Authority
or its duly authorized agents in accordance with the provisions herein contained. The
County agrees that the terms of this Lease constitute full and sufficient notice of the
right of the Authority to re-let the Demised Premises and the Project and to do all
other acts to maintain or preserve the Project as the Authority deems necessary or
desirable in the event of such re-entry without effecting a surrender of this Lease, and
further agrees that no acts of the Authority in effecting such re-letting shall constitute
a surrender or tennination of this Lease irrespective of the use or the term for which
such re-letting is made or the terms and conditions of such re-letting, or otherwise,
but that, on the contrary, in the event of.such default by the County the right to
terminate this Lease shall vest in the Authority to be effected in the sole and exclusive
manner provided for in sub-paragraph (1) hereof. The County further waives the
right to any rental obtained by the Authority in excess of the rental herein specified
and hereby conveys and releases such excess to the Authority as compensation to the
Authority for its services in re-letting the Demised Premises and the Project or any
part thereof. The County further agrees to pay the Authority the cost of any
alterations or additions to the Demised Premises and the Project necessary to place the
Demised Premises and the Project in condition for re-letting immediately upon notice
to the County of the completion and installation of such additions or alterations.
The County hereby waives any and all claims for damages caused or which
may be caused by the Authority in re-entering and taking possession of the Demised
Premises and the Project as herein provided and all claims for damages that may result from
the destruction of or injury to the Demised Premises and the Project and all claims for
damages to or loss of any property belonging to the County, or any other person, that may
be in or upon the Demised Premises and the Project.
(b) If (1) the County's interest in this Lease or any part thereof be assigned
or transferred, either voluntarily or by operation of law or otherwise, without the written
consent of the Authority, as hereinafter provided for, or (2) the County or any assignee shall
file any petition or institute any proceeding under any act or acts, state or federal, dealing
with or relating to the subject or subjects of bankruptcy or insolvency, or under any
amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in
any similar capacity, wherein or whereby the County asks or seeks or prays to be adjudicated
a bankrupt, or is to be discharged from any or all of the County's debts or obligations, or
offers to the County's creditors to effect a composition or extension of time to pay the
County's debts or asks, seeks or prays for reorganization or to effect a plan of
reorganization, or for a readjustment of the County's debts, or for any other similar relief, or
if any such petition or any such proceedings of the same or similar kind or character be filed
or be instituted or taken against the County, or if a receiver of the business or of the
property or assets of the County shall be appointed by any court, except a receiver appointed
at the instance or request of the Authority, or if the County shall make a general or any
assignment for the benefit of the County's creditors, or if (3) the County shall abandon or
vacate the Demised Premises and the Project, then the County shall be deemed to be in
default hereunder.
SF2-77508.2 23 40511-105-PCM-08/04/97
(c) The Authority shall in no event be in default in the performance of any
of its obligations hereunder or imposed by any statute or rule of law unless and until the
Authority shall have failed to perform such obligations within thirty (30) days or such
additional time as is reasonably required to correct any such default after notice by the
County to the Authority properly specifying wherein the Authority has failed to perform any
such obligation. In the event of default by the Authority, the County shall be entitled to
pursue any remedy provided by law.
(d) In addition to the other remedies set forth in this Section, upon the
occurrence of an event of default as described in this Section, the Authority shall be entitled
to proceed to protect and enforce the rights vested in the Authority by this Lease or by law.
The provisions of this Lease and the duties of the County and of its trustees, officers or
employees shall be enforceable by the Authority by mandamus or other appropriate suit,
action or proceeding in any court of competent jurisdiction. Without limiting the generality
of the foregoing, the Authority shall have the right to bring the following actions:
(1) Accounting. By action or suit in equity to require the County and its
trustees, officers and employees and its assigns to account as the trustee of an express
trust.
(2) Injunction. By action or suit in equity to enjoin any acts or things
which may be unlawful or in violation of the rights of the Authority.
(3) Mandamus. By mandamus or other suit, action or proceeding at law or
in equity to enforce the Authority's rights against the County (and its board, officers
and employees) and to compel the County to perform and carry out its duties and
obligations under the law and its covenants and agreements with the County as
provided herein.
Each and all of the remedies given to the Authority hereunder or by any law
now or hereafter enacted are cumulative and the single or partial exercise of any right, power
or privilege hereunder shall not impair the right of the Authority to other or further exercise
thereof or the exercise of any or all other rights, powers or privileges. The term "re-let" or
"re-letting" as used in this Section shall include, but not be limited to, re-letting by means of
the operation by the Authority of the Demised Premises and the Project. If any statute or
rule of law validly shall limit the remedies given to the Authority hereunder, the Authority
nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of
law.
In the event the Authority shall prevail in any action brought to enforce any of
the terms and provisions of this Lease, the County agrees to pay a reasonable amount as and
for attorney's fees incurred by the Authority in attempting to enforce any of the remedies
available to the Authority hereunder, whether or not a lawsuit has been filed and whether or
not any lawsuit culminates in a judgment.
SECTION 6.02. Waiver. Failure of the Authority to take advantage of any
default on the part of the County shall not be, or be construed as, a waiver thereof, nor shall
SF2-77508.2 24 40511-105-PCM-08/04/97
any custom or practice which may grow up between the parties in the course of
administering this instrument be construed to waive or to lessen the right of the Authority to
insist upon performance by the County of any teen, covenant or condition hereof, or to
exercise any rights given the Authority on account of such default. A waiver of a particular
default shall not be deemed to be a waiver of the same or any subsequent default. The
acceptance of rent hereunder shall not be, or be construed to be, a waiver of any tern,
covenant or condition of this Lease.
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
SECTION 7.01. Eminent Domain. If the whole of the Demised Premises and
the Project or so much thereof as to render the remainder unusable for the purposes for
which it was used by the County shall be taken tinder the power of eminent domain, the term
of this Lease shall cease as of the day that possession shall be so taken. If less than the
whole of the Demised Premises and the Project shall be taken under the power of eminent
domain and the remainder is usable for the purposes for which it was used by the County at
the time of such taking, then this Lease shall continue in full force and effect as to such
remainder, and the parties waive the benefits of any law to the contrary, and in such event
there shall be a partial abatement of the rental due hereunder in an amount equivalent to the
amount by which the annual payments of principal and interest represented by Certificates
then Outstanding will be reduced by the application of the award in eminent domain to the
prepayment of Outstanding Certificates. So long as any of the Certificates shall be
Outstanding, any award made in eminent domain proceedings for taking the Demised
Premises and the Project or any portion thereof shall be paid to the Trustee and applied to
the prepayment of the Base Rental Payments as provided in Section 7.02. Any such award
made after all of the Base Rental Payments and Additional Payments have been fully paid, or
provision therefor made, shall be paid to the to the County.
SECTION 7.02. Prepayment. (a) The County shall prepay on any date from
insurance and eminent domain proceeds, to the extent provided in Sections 5.01 and 7.01
hereof (provided, however, that in the event of partial damage to or destruction of the
Project caused by perils covered by insurance, if in the judgment of the Authority the
insurance proceeds are sufficient to repair, reconstruct or replace the damaged or destroyed
portion of the Project, such proceeds shall be held by the Trustee and used to repair,
reconstruct or replace the damaged or destroyed portion of the Project, pursuant to the
procedure set forth in Section 5.01 for proceeds of insurance), all or any part (in an integral
multiple of $5,000) of the principal components of Base Rental Payments then unpaid so that
the aggregate annual amounts of principal and Accreted Interest components of Base Rental
Payments which shall be payable after such prepayment date shall be as nearly proportional
as practicable to the aggregate annual amounts of principal and Accreted Interest components
of Base Rental Payments unpaid prior to the prepayment date, at a prepayment amount equal
to the sum of the principal and Accreted Interest components prepaid plus accrued interest
thereon to the date of prepayment, plus any applicable premium.
SF2-77508.2 25 40511-105-PCM-08/04/97
(b) The County may prepay, from any source of available funds, all or any
portion of Base Rental Payments by depositing with the Trustee moneys or securities as
provided in Article X of the Trust Agreement sufficient to make such Base Rental Payments
when due; provided that the County furnishes the Trustee with an Opinion of Counsel that
such deposit will not cause interest evidenced by and payable with respect to the Certificates
to be includable in gross income for federal income tax purposes. The County agrees that if
following such prepayment the Project and the Demised Premises are damaged or destroyed
or taken by eminent domain, it is not entitled to, and by such prepayment waives the right
of, abatement of such prepaid Base Rental Payments and shall not be entitled to any
reimbursement of such Base Rental Payments.
(c) Before making any prepayment pursuant to this article, the County
shall, within five (5) days following the event creating such right or obligation to prepay,
give written notice to the Authority and the Trustee describing such event and specifying the
date on which the prepayment will be made, which date shall be not less than forty-five (45)
days from the date such notice is given.
(d) When (1) there shall have been deposited with the Trustee at or prior to
the due dates of the Base Rental Payments or date when the County may exercise its option
to purchase the Project or any portion or item thereof, in trust for the benefit of the Owners
of the Certificates and irrevocably appropriated and set aside to the payment of the Base
Rental Payments or option price, sufficient moneys and Pennitted Investments described in
subsection (1) of the definition thereof in the Trust Agreement, not redeemable prior to
maturity, the principal of and interest on which when due will provide money sufficient to
pay all principal, premium, if any, and interest of the Base Rental Payments represented by
the Certificates to the due date of the Base Rental Payments or date when the County may
exercise its option to purchase the Project, as the case may be; and (2) an agreement shall
have been entered into with the Trustee for the payment of its fees and expenses so long as
any of the Certificates shall remain unpaid, then and in that event the right, title and interest
of the Authority herein and the obligations of the County hereunder shall thereupon cease,
terminate, become void and be completely discharged and satisfied (except for the right of
the Authority and the obligation of the County to have such moneys and such Permitted
Investments applied to the payment of the Base Rental Payments or option price) and the
Authority's interest in and title to the Project or applicable portion or item thereof shall be
transferred and conveyed to the County. In such event, the Authority shall cause an
accounting for such period or periods as may be requested by the County to be prepared and
filed with the Authority and evidence such discharge and satisfaction, and the Authority shall
pay over to the County as an overpayment of Base Rental Payments all such moneys or
Permitted Investments held by it pursuant hereto other than such moneys and such Penmitted
Investments as are required for the payment or prepayment of the Base Rental Payments or
the option price and the fees and expenses of the Trustee, which moneys and Permitted
Investments shall continue to be held by the Trustee in trust for the payment of Base Rental
Payments or the option price and the fees and expenses of the Trustee, and shall be applied
by the Authority to the payment of the Base Rental Payments or the option price and the fees
and expenses of the Trustee.
SF2-77508.2 26 40511-105-PCM-08/04/97
SECTION 7.03. Option to Purchase-, Sale of Personal Property. The County
shall have the option to purchase the Authority's interest in any part of the Demised Premises
and the Project upon payment of an option price consisting of moneys or securities of the
category specified in clause (1) of the definition of the term Permitted Investments contained
in Section 1.01 of the Trust Agreement (not callable by the issuer thereof prior to maturity)
in an amount sufficient (together with the increment, earnings and interest on such securities)
to provide fiends to pay the aggregate amount for the entire remaining tenn of this Lease of
the part of the total rent hereunder attributable to such part of the Project (determined by
reference to the proportion which the acquisition, design and construction cost of such part of
the Project bears to the acquisition, design and construction cost of all of the Project). Any
such payment shall be made to the Trustee and shall be treated as rental payments and shall
be applied by the Trustee to pay the interest and principal components of the Certificates and
to prepay Certificates if such Certificates are subject to prepayment pursuant to the terms of
the Trust Agreement. Upon the making of such payment to the Trustee, (a) the interest and
principal components of each installment of Base Rental thereafter payable under this Lease
shall be reduced by the amount thereof attributable to such part of the Project and theretofore
paid pursuant to this Section, (b) Section 3.06 and this Section of this Lease shall not
thereafter be applicable to such part of the Project, (c) the insurance required by Sections
5.01, 5.02 and 5.03 of this Lease need not be maintained as to such part of the Project, and
(d) title to such part of the Project and of the portion of the Demised Premises upon which
such part of the Project is located shall vest in the County and the tern of this Lease shall
end as to the portion of the Demised Premises upon which such part of the Project is located
and to such part of the Project.
The County, in its discretion, may request the Authority to sell or exchange
any personal property which may at any time constitute a part of the Project, and to release
said personal property from this Lease, if (a) in the opinion of the County the property so
sold or exchanged is no longer required or useful in connection with the operation of the
Project, (b) the consideration to be received from the property is of a value substantially
equal to the value of the property to be released, and (c) if the value of any such property
shall, in the opinion of the Authority, exceed the amount of $50,000, the Authority shall
have been furnished a certificate of an independent engineer or other qualified independent
professional consultant (satisfactory to the Authority) certifying the value thereof and further
certifying that such property is no longer required or useful in connection with the operation
of the Project. In the event of any such sale, the frill amount of the money or consideration
received for the personal property so sold and released shall be paid to the Authority. Any
money so paid to the Authority may, so long as the County is not in default under.any of the
provisions of this Lease, be used upon the Written Request of the County to purchase
personal property, which property shall become a part of the Project leased hereunder. The
Authority may require such opinions, certificates and other documents as it may deem
necessary before permitting any sale or exchange of personal property subject to this Lease
or before releasing for the purchase of new personal property money received by it for
personal property so sold.
SF2-77508.2 27 40511-105-PCM-08/04/97
ARTICLE VIII
COVENANTS
SECTION 8.01. Right of Enn. The Authority and its assignees shall have
the right to enter upon and to examine and inspect the Project and the Demised Premises
during reasonable business hours (and in emergencies at all times) (a) to inspect the same,
(b) for any purpose connected with the Authority's or the County's rights or obligations
under this Lease, and (c) for all other lawful purposes.
SECTION 8.02. Liens. In the event the County shall at any time during the
term of this Lease cause any changes, alterations, additions, improvements, or other work to
be done or perfonned or materials to be supplied, in or upon the Demised Premises or the
Project, the County shall pay, when due, all sums of money that may become due for, or
purporting to be for, any labor, services, materials, supplies or equipment furnished or
alleged to have been furnished to or for the County in, upon or about the Demised Premises
or the Project and shall keep the Demised Premises and the Project free of any and all
mechanics' or materialmen's liens or other liens against the Demised Premises or the Project
or the Authority's interest therein. In the event any such lien attaches to or is filed against
the Demised Premises or the Project or the Authority's interest therein, the County shall
cause each such lien to be fully discharged and released at the time the performance of any
obligation secured by any such lien matures or becomes due, except that if the County
desires to contest any such lien it may do so in good faith. If any such lien shall be reduced
to final judgment and such judgment or such process as may be issued for the enforcement
thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the County
shall forthwith pay and discharge said judgment. The County agrees to and shall, to the
maximum extent permitted by law, indemnify and hold the Authority and the Trustee and
their respective members, directors, agents, successors and assigns, hannless from and
against, and defend each of them against, any claim, demand, loss, damage, liability or
expense (including attorney's fees) as a result of any such lien or claim of lien against the
Demised Premises or the Project or the Authority's interest therein.
SECTION 8.03. Quiet En'o ment. The parties hereto mutually covenant that
the County, by keeping and performing the covenants and agreements herein contained and
not in default hereunder, shall at all times during the term of this Lease peaceably and
quietly have, hold and enjoy the Demised Premises and the Project without suit, trouble or
hindrance from the Authority.
SECTION 8.04. Authority Not Liable. The Authority and its members,
directors, officers, agents and employees shall not be liable to the County or to any other
party whomsoever for any death, injury or damage that may result to any person or property
by or from any cause whatsoever in, on or about the Demised Premises and the Project.
The County, to the extent pennitted by law, shall indemnify and hold the Authority and its
members, directors, officers, agents and employees, hannless from, and defend each of them
against, any and all claims, liens and judgments arising from the construction or operation of
the Demised Premises or the Project, including, without limitation, death of or injury to any
person or damage to property whatsoever occurring in, on or about the Demised Premises or
SF2-77508.2 28 40511-105-PCM-08/04/97
the Project regardless of responsibility for negligence; but excepting the active negligence of
the person or entity seeking indemnity.
SECTION 8.05. Assignment and Subleasing. Neither this Lease nor any
interest of the County hereunder shall be mortgaged, pledged, assigned, sublet or transferred
by the County by voluntary act or by operation of law or otherwise, except with the prior
written consent of the Authority, which, in the case of subletting, shall not be unreasonably
withheld; provided such subletting shall not affect the tax-exempt status of the interest
components of the Base Rental Payments payable by the County hereunder. No such
mortgage, pledge, assignment, sublease or transfer shall in any event affect or reduce the
obligation of the County to make the Base Rental Payments and Additional Payments
required hereunder.
SECTION 8.06. Leasehold Interest. During the tenn of this Lease, the
Authority shall have a leasehold interest in the Demised Premises and the Project pursuant to
the Site Lease.
Upon the termination or expiration of this Lease, the Authority shall execute
such conveyances, deeds and other documents as may be necessary to evidence the
ownership of the Project and Demised Premises by the County and to clarify the title of the
County on the record thereof.
SECTION 8.07. Tax Covenants. The County and the Authority will not
make any use of the proceeds of the obligations provided herein or any other funds of the
County or the Authority which will cause such obligations to be "arbitrage bonds" subject to
federal income taxation by reason of Section 148 of the Code. The County and the Authority
will not make any use of the proceeds of the obligations provided herein or any other funds
of the County or the Authority which will cause such obligations to be "federally guaranteed"
and subject to inclusion in gross income for federal income tax purposes by reason of Section
149(b) of the Code. To that end, so long as any rental payments are unpaid, the County and
the Authority, with respect to such proceeds and such other funds, will comply with all
requirements of such Sections 148 and 149(b) and all regulations of the United States
Department of the Treasury issued thereunder to the extent that such requirements are, at the
time, applicable and in effect.
The County further covenants that it will not use or pen-nit the use of the
facilities financed or refinanced by the proceeds of the Certificates by any person not an
"exempt person" within the meaning of Section 141(a) of the Code or by an "exempt person"
(including the County) in an "unrelated trade or business", in such manner or to such extent
as would result in the inclusion of interest received hereunder in gross income for federal
income tax purposes under Section 103 of the Code.
If at any time the County is of the opinion that for purposes of this Section it
is necessary to restrict or limit the yield on or change in any way the investment of any
moneys held by the Trustee or the County or the Authority under this Lease or the Trust
Agreement, the County shall so instruct the Trustee or the appropriate officials of the County
SF2-77508.2 29 40511-105-PCM-08/04/97
in writing, and the Trustee or the appropriate officials of the County, as the case may be,
shall take such actions as may be necessary in accordance with such instructions.
In furtherance of the covenants of the County set forth above, the County will
comply with the Tax Certificate and will instruct the Trustee in writing as necessary to
comply with the Tax Certificate. The Trustee and the Authority may conclusively rely on
any such written instructions, and the County hereby agrees to hold harmless the Trustee and
the Authority for any loss, claim, damage, liability or expense incurred by the Authority for
any actions taken by the Authority in accordance with such instructions.
The County and the Authority shall at all times do and perform all acts and
things pennitted by law which are necessary or desirable in order to assure that the interest
component of the Base Rental Payments will be excluded from gross income for federal
income tax purposes and shall take no action that would result in such interest not being
excluded from gross income for federal income tax purposes.
SECTION 8.08. Authority's Purpose. The Authority covenants that, prior to
the discharge of this Lease, it will not engage in any activities inconsistent with the purposes
for which the Authority is organized.
SECTION 8.09. Purpose of Lease. The County covenants that during the
term of this Lease, except as hereinafter provided, (a) it will use, or cause the use of, the
Demised Premises and the Project for public purposes and for the purposes for which the
Project facilities are customarily used, (b) it will not vacate or abandon the Project or any
part thereof, and (c) it will not make any use of the Demised Premises and the Project which
would jeopardize in any way the insurance coverage required to be maintained pursuant to
Article V hereof.
ARTICLE IX
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE PROJECT
SECTION 9.01. Disclaimer of Warranties. THE AUTHORITY MAKES NO
AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY,
FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE PROJECT,
OR WARRANTY WITH RESPECT THERETO. THE COUNTY ACKNOWLEDGES
THAT THE AUTHORITY IS NOT A MANUFACTURER OF THE PROJECT OR A
DEALER THEREIN, THAT THE COUNTY LEASES THE PROJECT AS-IS, IT BEING
AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY
THE COUNTY. In no event shall the Authority be liable for any incidental, indirect, special
or consequential damage in connection with or arising out of this Lease or the existence,
furnishing, functioning or the County's use of any item or products or services provided for
in this Lease.
S F2-77508.2 30 40511-105-PCM-08/04/97
SECTION 9.02. Vendor's Warranties. The Authority hereby irrevocably
appoints the County its agent and attorney-in-fact during the term of this Lease, so long as
the County shall not be in default hereunder, to assert from time to time whatever claims and
rights, including warranties of the Project, which the Authority may have against the
manufacturers, vendors and contractors of the Project. The County's sole remedy for the
breach of such warranty, indemnification or representation shall be against the manufacturer
or vendor or contractor of the Project, and not against the Authority, nor shall such matter
have any effect whatsoever on the rights and obligations of the Authority with respect to this
Lease, including the right to receive full and timely payments hereunder. The County
expressly acknowledges that the Authority makes, and has made, no representation or
warranties whatsoever as to the existence or availability of such warranties of the
manufacturer, vendor or contractor.
SECTION 9.03. Use of the Project. The County will not install, use, operate
or maintain the Project improperly, carelessly, in violation of any applicable law or in a
manner contrary to that contemplated by this Lease. The County shall provide all permits
and licenses, if any, necessary for the installation and operation of the Project. In addition,
the County agrees to comply in all respects (including, without limitation, with respect to the
use, maintenance and operation of the Project) with all laws of the jurisdictions in which its
operations may extend and any legislative, executive, administrative or judicial body
exercising any power or jurisdiction over the Project; provided, however, that the County
may contest in good faith the validity or application of any such law or rule in any
reasonable manner which does not, in the opinion of the Authority, adversely affect the
estate of the Authority in and to the Project or its interest or rights under this Lease.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Law Governing. This Lease shall be governed exclusively
by the provisions hereof and by the laws of the State of California as the same from time to
time exist.
SECTION 10.02. Notices. All notices, statements, demands, consents,
approvals, authorizations, offers, designations, requests, agreements or promises or other
communications hereunder by either party to the other shall be in writing and shall be
sufficiently given and served upon the other party if delivered personally or if mailed by
United States registered mail, return receipt requested, postage prepaid:
If to the County: County of Contra Costa
c/o Clerk of the Board of Supervisors
County Administration Building
651 Pine Street
Martinez, California 94553
SF2-77508.2 31 40511-105-PCM-08/04/97
If to the Authority: County of Contra Costa Public
Financing Authority
c/o County Administrator
County Administration Building
651 Pine Street
Martinez, California 94553
If to the Trustee: First Trust of California, National Association
One California Street
Fourth Floor
San Francisco, California 94111
or to such other addresses as the respective parties may from time to time designate by notice
in writing. A copy of any such notice or other document herein referred to shall also be
delivered to the Trustee.
SECTION 10.03. Validity and Severability. If for any reason this Lease shall
be held by a court of competent jurisdiction to be void, voidable, or unenforceable by the
Authority or by the County, or if for any reason it is held by such a court that any of the
covenants and conditions of the County hereunder, including the covenant to pay rentals
hereunder, is unenforceable for the ftlll tenn hereof, then and in such event this Lease is and
shall be deemed to be a lease under which the rentals are to be paid by the County annually
in consideration of the right of the County to possess, occupy and use the Demised Premises
and the Project, and all of the rental and other terns, provisions and conditions of this
Lease, except to the extent that such tenns, provisions and conditions are contrary to or
inconsistent with such holding, shall remain in full force and effect.
SECTION 10.04. Net-Net-Net Lease. This Lease shall be deemed and
construed to be a "net-net-net lease" and the County hereby agrees that the rentals provided
for herein shall be an absolute net return to the Authority, free and clear of any expenses,
charges or set-offs whatsoever.
SECTION 10.05. Taxes. The County shall pay or cause to be paid all taxes
and assessments of any type or nature charged to the Authority or affecting the Project and
the Demised Premises or the respective interests or estates therein; provided that with respect
to special assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the County shall be obligated to pay only such
installments as are required to be paid during the term of this Lease as and when the same
become due.
The County shall also pay directly such amounts, if any, in each year as shall
be required by the Authority for the payment of all license and registration fees and all taxes
(including, without limitation, income, excise, license, franchise, capital stock, recording,
sales, use, value-added, property, occupational, excess profits and stamp taxes), levies,
imposts, duties, charges, withholdings, assessments and governmental charges of any nature
whatsoever, together with any additions to tax, penalties, fines or interest thereon, including,
SF2-77508.2 32 40511-105-PCM-08/04/97
without limitation, penalties, fines or interest arising out of any delay or failure by the
County to pay any of the foregoing or failure to file or furnish to the Authority or the
Trustee for filing in a timely manner any returns, hereinafter levied or imposed against the
Authority or the Project, the rentals and other payments required hereunder or any parts
thereof or interests of the County or the Authority or the Trustee therein by any
governmental authority.
The County may, at the County's expense and in its name, in good faith
contest any such taxes, assessments and other charges and, in the event of any such contest,
may permit the taxes, assessments or other charges so contested to remain unpaid during the
period of such contest and any appeal therefrom unless the Authority or the Trustee shall
notify the County that, in the opinion of independent counsel, by nonpayment of any such
items, the interest of the Authority in the Project and the Demised Premises will be
materially endangered or the Project and the Demised Premises, or any part thereof, will be
subject to loss or forfeiture, in which event the County shall promptly pay such taxes,
assessments or charges or provide the Authority with full security against any loss which
may result from nonpayment, in form satisfactory to the Authority and the Trustee.
SECTION 10.06. Section Headines. All section headings contained herein
are for convenience of reference only and are not intended to define or limit the scope of any
provision of this Lease.
SECTION 10.07. Amendment or Tenmination. The Authority and the County
may at any time agree to the amendment or termination of this Lease; provided, however,
that the Authority and the County agree and recognize that this Lease is entered into in
accordance with the teens of the Trust Agreement, and accordingly, that any such
amendment or tennination shall only be made or effected in accordance with and subject to
the terms of the Trust Agreement.
SECTION 10.08. Execution. This 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. It is also agreed that separate counterparts of this
Lease may separately be executed by the Authority and the County, all with the same force
and effect as though the same counterpart had been executed by both the Authority and the
County.
SF2-77508.2 33 40511-105-PCM-08/04/97
IN WITNESS WHEREOF, the Authority and the County have caused this
Lease to be executed by their respective officers thereunto duly authorized, all as of the day
and year first above written.
COUNTY.OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY,
as Lessor
Chair
Secretary
COUNTY OF CONTRA COSTA,
as Lessee
By
[SEAL] Chair of the Board of Supervisors of the
County of Contra Costa, State of California
Attest: Philip J. Batchelor, Clerk
of the Board of Supervisors and
County Administrator
By:
Deputy
Approved as to form:
County Counsel
SF2-77508.2 34 40511-105-PCM-08/04/97
EXHIBIT A
Project Phase I
Part I
All that certain real property situated in the County of Contra Costa, State
of California, described as follows:
[legal description to come]
Part II
All that certain real property situated in the County of Contra Costa, State
of California, described as follows:
[legal description to come]
SF2-77508.2 A-1 40511-105-PCM-08/04/97
EXHIBIT B
Base Rental Payment Schedule
Part I
Defeased Base Rental Payments
[to come]
Part II
Base Rental Payments
[to come]
SF2-77508.2 B-I 40511-105-PCM-08/04/97
EXHIBIT C
PROJECT PHASE I FACILITIES
PART I
Facility Location
Approximate 30,000 square foot 10 Douglas Drive
Administration Building -
District Attorney and Health Services
Administration Building - 40 Muir Road
Social Service Department
20,000 square feet
Administration Building 30 Muir Road
Social Service Department
40,000 square feet
Approximate 34,554 square foot 40 Douglas Drive
Administration Building - Social Service
Department Central Administration and a
53,492 square foot parking garage
Approximate 90,000 square foot 50 Douglas Drive
Administration Building - Central County
Probation, District Attorney Family
Support Division
PART II
[Additional Facilities, if necessary, to come]
SF2-77508.2 C-1 40511-105-PCM-08/04/97
OH&S SECOND DRAFT
08/04/97
Recording requested by
and return to:
COUNTY OF CONTRA COSTA
c/o Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attention: Mary A. Collins, Esq. Free Recording Requested
Pursuant to California
Government Code Section 6103
SITE LEASE
(CAPITAL PROJECTS PROGRAM)
between the
COUNTY OF CONTRA COSTA
and
COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY
Dated as of August 1, 1997
(AMENDING AND RESTATING SITE AND FACILITY LEASE,
DATED AS OF FEBRUARY 1, 1991, BY AND BETWEEN THE
COUNTY OF CONTRA COSTA AND ABAG FINANCE CORPORATION)
SF2-77470.2 40511-105-PCM-08/04/97
TABLE OF CONTENTS
Section Page
SECTION 1. Demised Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 3. Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 4. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 5. Owner in Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 6. Assignments and Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 7. Right of Entry; Easements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 8. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 9. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 10. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 11. Waiver of Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 13. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 14. Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 15. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 16. Section Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 17. Execution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SP2-77470.2 i 40511-105-PCM-08/04/97
SITE LEASE
(CAPITAL PROJECTS PROGRAM)
(AMENDING AND RESTATING SITE AND FACILITY LEASE, DATED AS OF
FEBRUARY 1, 1991, BY AND BETWEEN THE COUNTY OF CONTRA COSTA AND
ABAG FINANCE CORPORATION)
This Lease, dated as of August 1, 1997, by and between the COUNTY OF
CONTRA COSTA, a body corporate and politic and a political subdivision of the State of
California (the "County"), as lessor, and the COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY, a joint powers authority duly organized and existing under and
by virtue of the laws of the State of California (the "Authority"), as lessee;
WITNESSETH :
WHEREAS, $23,980,000 aggregate principal amount of certificates of
participation (the "Prior Certificates") were executed and delivered pursuant to a Trust
Agreement, dated as of February 1, 1991, by and among the County, ABAG Finance
Corporation (the "Corporation") and First Trust of California, National Association, as
successor trustee (the "Prior Trustee"), for the purpose of financing the acquisition and
renovation of certain buildings for use by the County (the "1991 Project");
WHEREAS, pursuant to a site and facility lease, dated as of February 1, 1991
(the "Prior Site Lease"), between the County and the Corporation, which lease or
memorandum thereof was recorded in the office of the County Recorder of the County of
Contra Costa on February 27, 1991 under Recorder's Serial Number 91-33882, the County
leased real property (the "1991 Demised Premises") on which the 1991 Project was located
to the Corporation;
WHEREAS, pursuant to a lease agreement, dated as of February 1, 1991
(the "Prior Facility Lease"), between the Corporation and the County, which lease or
memorandum thereof was recorded in the office of the County Recorder of the County of
Contra Costa on February 27, 1991 under Recorder's Serial Number 91-33883, the
Corporation leased the 1991 Demised Premises and the 1991 Project to the County;
WHEREAS, pursuant to an assignment agreement, dated as of February 1,
1991, between the Corporation and the Prior Trustee, the lease payments to be made by the
County under the Prior Facility Lease (the "Prior Base Rental") were assigned to the Prior
Trustee to pay the principal and interest represented by the Prior Certificates;
WHEREAS, the Authority intends to assist the County in refinancing the
acquisition and renovation of the 1991 Project and in financing the acquisition and renovation
of certain additional capital improvements by causing the execution and delivery of
Certificates of Participation (Capital Projects Program), Series of 1997 (the "Certificates");
SF2-77470.2 40511-105-PCM-08/04/97
WHEREAS, pursuant to the Letter of Instructions to the Prior Trustee, dated
as of August 1, 1997, certain proceeds of the Certificates were deposited into an escrow fund
(the "Escrow Fund") and irrevocably pledged to repay the Prior Base Rental and the Prior
Certificates;
WHEREAS, as consideration for such deposit in the Escrow Fund, the
Corporation and Prior Trustee have assigned all of their rights, title and interest in the Prior
Site Lease and Prior Facility Lease (other than the right, title and interest in the Prior Base
Rental to be paid from the Escrow Fund) to the Authority;
WHEREAS, the Authority and County desire to continue to lease the 1991
Demised Premises, together with certain additional real property described in Exhibit A -
Part II hereto (collectively, the "Demised Premises") pursuant to the terms of this lease,
which amends and restates in its entirety the Prior Site Lease, and to continue to lease the
Demised Premises and the 1991 Project, together with certain additional facilities described
in Exhibit B - Part II hereto (collectively, the "Project Phase I") pursuant to the terms of the
Facility Lease (Capital Projects Program), dated as of August 1, 1997 (the "Facility Lease"),
which amends and restates in its entirety the Prior Facility Lease;
WHEREAS, the Authority intends to assist the County by financing the
construction, renovation and acquisition for the County of certain other County facilities
together with site development, landscaping, utilities, fixtures, furnishings, equipment,
improvements and appurtenant and related facilities (the "Subsequent Phases of the Project,"
and collectively with Project Phase I, the "Project"); and
WHEREAS, under the Facility Lease, the County will be obligated to make
base rental payments to the Authority for the lease of the Project;
WHEREAS, all rights to receive such base rental payments will be assigned
without recourse by the Authority to First Trust of California, National Association (the
"Trustee"), as trustee pursuant to an agreement, entitled "Trust Agreement" (the "Trust
Agreement"); and
WHEREAS, in consideration of such assignment and the execution of the
Trust Agreement, the Trustee will execute and deliver the Certificates, from time to time in
series, in an amount equal to the aggregate principal components of such base rental
payments, each evidencing and representing a fractional undivided interest in such base rental
payments;
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows:
SECTION 1. Demised Premises.
The County hereby leases to the Authority and the Authority hereby hires from
the County, on the terms and conditions hereinafter set forth, the real property situated in the
SF2-77470.2 2 40511-105-PCM-08/04/97
County of Contra Costa, State of California, and described in Exhibit A attached hereto and
made a part hereof (the "Demised Premises").
The Prior Site Lease covered the real property described on Exhibit A - Part I
hereto (the "1991 Demised Premises"). The parties acknowledge that the real property
described on Exhibit A - Part II hereto was not included in the Prior Site Lease.
SECTION 2. Term.
The term of the Prior Site Lease shall not terminate pursuant to Section 2
thereof and the term of this lease as an amendment and restatement of the Prior Site Lease
shall commence on the date of recordation of this lease in the office of the County Recorder
of Contra Costa County, State of California, or on October 1, 1997, whichever is earlier,
and shall end on February 1, unless such term is extended or sooner terminated as
hereinafter provided. If on February 1, the Certificates shall not be fully paid, or if the
rental payable under the Facility Lease shall have been abated at any time and for any
reason, then the term of this lease shall be extended until ten (10) days after the Certificates
shall be fully paid, except that the term of this lease shall in no event be extended beyond
February 1, 2031. If prior to February 1, the Certificates shall be fully paid, the term
of this lease shall end ten (10) days thereafter or ten (10) days after written notice by the
County to the Authority, whichever is earlier.
SECTION 3. Rental.
The Authority shall pay to the County as and for rental hereunder the proceeds
of the Series of 1997 Certificates, such proceeds to be deposited in the Escrow Fund and the
other funds specified in the Trust Agreement and applied as specified in the Trust Agreement
and the Facility Lease.
SECTION 4. Purpose.
The Authority shall use the Demised Premises and the Project solely for the
purpose of leasing the Demised Premises and the Project to the County pursuant to the
Facility Lease and for such purposes as may be incidental thereto; provided, that in the event
of default by the County under the Facility Lease the Authority may exercise the remedies
provided in the Facility Lease.
SECTION 5. Owner in Fee.
The County covenants that it is the owner in fee of the Demised Premises, as
described in Exhibit A hereto and such Demised Premises are free of any leases and
encumbrances that would materially interfere with the use of the Demised Premises and
Project for the use intended by the parties hereto. The County further covenants and agrees
that if for any reason this covenant proves to be incorrect, the County will either institute
eminent domain proceedings to condemn the property or institute a quiet title action to clarify
sF2-77470.2 3 40511-105-rcM-08/04/97
the County's title, and will diligently pursue such action to completion. The County further
covenants and agrees that it will hold the Authority harmless from any loss, cost or damages
resulting from any breach by the County of the covenants contained in this Section.
SECTION 6. Assignments and Subleases.
Unless the County shall be in default under the Facility Lease, the Authority
may not assign its rights under this lease or sublet the Demised Premises, except pursuant to
the Assignment Agreement or the Trust Agreement, without the written consent of the
County.
SECTION 7. Right of Entry; Easements.
The County reserves the right for any of its duly authorized representatives to
enter upon the Demised Premises at any reasonable time to inspect the same or to make any
repairs, improvements or changes necessary for the preservation thereof.
SECTION 8. Termination.
The Authority agrees, upon the termination of this lease, to quit and surrender
the Demised Premises 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 Demised Premises at the time
of the termination of this lease shall remain thereon and title thereto shall vest in the County.
Upon the exercise of the option to purchase set forth in Section 7.03 of the
Facility Lease and upon payment of the option price required by said section, the term of this
lease shall terminate as to the portion of the Demised Premises upon which the part of the
Project being so purchased is situated.
SECTION 9. Default.
In the event the Authority shall be in default in the performance of any
obligation on its part to be performed under the terms of this lease, which default continues
for thirty (30) days following notice and demand for correction thereof to the Authority, the
County may exercise any and all remedies granted by law, except that no merger of this
lease and of the Facility Lease shall be deemed to occur as a result thereof; provided,
however, that the County shall have no power to terminate this lease by reason of any default
on the part of the Authority if such termination would affect or impair any assignment or
sublease of all or any part of the Demised Premises then in effect between the Authority and
any assignee or subtenant of the Authority (other than the County under the Facility Lease).
So long as any such assignee or subtenant of the Authority shall duly perform the terms and
conditions of this lease and of its then existing sublease (if any), such assignee or subtenant
shall be deemed to be and shall become the tenant of the County hereunder and shall be
entitled to all of the rights and privileges granted under any such assignment; rop vided,
sF2-77470.2 4 40511-105-rcM-08/04197
further, that so long as any Certificates are outstanding and unpaid in accordance with the
terms thereof, the rentals or any part thereof payable to the Trustee shall continue to be paid
to the Trustee.
SECTION 10. Quiet Enjoyment.
The Authority at all times during the term of this lease, subject to the
provisions of Section 9 hereof, shall peaceably and quietly have, hold and enjoy all of the
Demised Premises.
SECTION 11. Waiver of Personal Liability.
All liabilities under this lease on the part of the Authority shall be solely
liabilities of the Authority, and the County hereby releases each and every member, director,
officer, agent, or employee of the Authority of and from any personal or individual liability
under this lease. No member, director, officer, agent, or employee of the Authority shall at
any time or under any circumstances be individually or personally liable under this lease to
the County or to any other party whomsoever for anything done or omitted to be done by the
Authority hereunder.
The Authority and its members, directors, officers, agents, employees and
assignees shall not be liable to the County or to any other party whomsoever for any death,
injury or damage that may result to any person or property by or from any cause whatsoever
in, on or about the Demised Premises and the Project. The County, to the extent permitted
by law, shall indemnify and hold the Authority and its members, directors, officers, agents,
employees and assignees, harmless from, and defend each of them against, any and all
claims, liens and judgments arising from the construction or operation of the Demised
Premises or the Project, including, without limitation, death of or injury to any person or
damage to property whatsoever occurring in, on or about the Demised Premises or the
Project regardless of responsibility for negligence, but excepting the active negligence of the
person or entity seeking indemnity.
SECTION 12. Taxes.
The County covenants and agrees to pay any and all assessments of any kind
or character and also all taxes, including possessory interest taxes, levied or assessed upon
the Demised Premises (including both land and improvements).
SECTION 13. Eminent Domain.
In the event the whole or any part of the Demised Premises or the
improvements thereon (including all or any part of the Project) is taken by eminent domain
proceedings, the interest of the Authority shall be recognized and is hereby determined to be
the amount of the then unpaid or outstanding Certificates attributable to such part of the
SP2-77470.2 5 40511-105-PCM-08/04/97
Demised Premises and the Project and shall be paid to the Trustee, and the balance of the
award, if any, shall be paid to the County.
SECTION 14. Partial Invalidity.
If any one or more of the terms, provisions, covenants or conditions of this
lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason
whatsoever by a court of competent jurisdiction, the finding or order or decree of which
becomes final, none of the remaining terms, provisions, covenants and conditions of this
lease shall be affected thereby, and each provision of this lease shall be valid and enforceable
to the fullest extent permitted by law.
SECTION 15. Notices.
All notices, statements, demands, consents, approvals, authorizations, offers,
designations, requests or other communications hereunder by either party to the other shall
be in writing and shall be sufficiently given and served upon the other party if delivered
personally or if mailed by United States registered or certified mail, return receipt requested,
postage prepaid, and, if to the Authority, addressed to the Authority in care of the County
Administrator, County of Contra Costa, County Administration Building, 651 Pine Street,
Martinez, California 94553, or if to the County, addressed to the County in care of Clerk of
the Board of Supervisors, County of Contra Costa, County Administration Building, 651
Pine Street, Martinez California 94553, in either case with a copy to the Trustee, or to such
other addresses as the respective parties may from time to time designate by notice in
writing.
SECTION 16. Section Headings.
All section headings contained herein are for convenience of reference only
and are not intended to define or limit the scope of any provision of this lease.
SECTION 17. Execution.
This 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. It is
also agreed that separate counterparts of this lease may separately be executed by the County
and the Authority, all with the same force and effect as though the same counterpart had
been executed by both the County and the Authority.
SF2-77470.2 6 40511-105-PCM-08/04/97
IN WITNESS WHEREOF, the County and the Authority have caused this
lease to be executed by their respective officers thereunto duly authorized, all as of the day
and year first above written.
COUNTY OF CONTRA COSTA,
Lessor
By:
Chair of the Board of Supervisors of the County
of Contra Costa, State of California
[SEAL]
Attest: Philip J. Batchelor,
Clerk of the Board of Supervisors
and County Administrator
By:
Deputy
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY,
Lessee
By:
Chair
By:
Secretary
Approved as to form:
County Counsel
SF2-77470.2 7 40511-105-PCM-08/04/97
EXHIBIT A
Project Phase I
Part I
[legal description to come]
Part II
[legal description to come]
SF2-77470.2 A-1 40511-105-PCM-08/04/97
EXHIBIT B
PROJECT PHASE I FACILITIES
PART I
Fa_ cility Location
Approximate 30,000 square foot 10 Douglas Drive
Administration Building -
District Attorney and Health Services
Administration Building - 40 Muir Road
Social Service Department
Approximately 40,000 square foot 30 Muir Road
Administration Building - Social Service
Department
Approximate 34,554 square foot 40 Douglas Drive
Administration Building - Social Service
Department Central Administration and a
53,492 square foot parking garage
Approximate 90,000 square foot 50 Douglas Drive
Administration Building - Central County
Probation, District Attorney Family
Support Division
PART II
[Additional Facilities, if necessary, to come]
SP2-77470.2 B-1 40511-105-PCM-08/04197
OH&S SECOND DRAFT
08/04/97
Recording requested by and return to:
COUNTY OF CONTRA COSTA
c/o Orrick Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attention: Mary A. Collins, Esq.
ASSIGNMENT AGREEMENT
by and among
ABAG FINANCE CORPORATION
and
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
and
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Dated as of August 1, 1997
RELATING TO THE SITE AND FACILITY LEASE
(1991 COUNTY BUILDINGS ACQUISITION PROJECT)
DATED AS OF FEBRUARY 1, 1991
AND THE
LEASE AGREEMENT (1991 COUNTY BUILDINGS ACQUISITION PROJECT)
DATED AS OF FEBRUARY 1, 1991
SF2-77581.2 40511-100-PCM-08/04/97
ASSIGNMENT AGREEMENT
RELATING TO THE SITE AND FACILITY LEASE
(1991 COUNTY BUILDINGS ACQUISITION PROJECT)
DATED AS OF FEBRUARY 1, 1991
AND THE
LEASE AGREEMENT
(1991 COUNTY BUILDINGS ACQUISITION PROJECT)
DATED AS OF FEBRUARY 1, 1991
This ASSIGNMENT AGREEMENT, made and entered into as of August 1,
1997, by and among ABAG FINANCE CORPORATION, a nonprofit public benefit
corporation organized under the laws of the State of California (the "Corporation"), FIRST
TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, as Trustee (the
"Trustee") and COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY (the
"Authority"), a public entity and joint powers agency;
WITNESSETH:
WHEREAS, $23,980,000 aggregate principal amount of certificates of
participation (the "Certificates") were executed and delivered pursuant to a Trust Agreement
(the "Trust Agreement"), dated as of February 1, 1991, by and among the County of Contra
Costa (the "County"), the Corporation and the Trustee, for the purpose of financing the
acquisition and renovation of certain capital improvements for use by the County (the "1991
Project");
WHEREAS, pursuant to a site and facility lease, dated as of February 1, 1991
(the "Site Lease"), between the County and the Corporation, which lease or memorandum
thereof was recorded in the office of the County Recorder of the County on February 27,
sF2-77581.2
1991 under Recorder's Serial Number 91-33882, the County leased real property (the
"Demised Premises") located in the County, more particularly described in the Site Lease, on
which the 1991 Project was located, to the Corporation;
WHEREAS, pursuant to a lease agreement, dated as of February 1, 1991 (the
"Facility Lease"), between the Corporation and the County, which lease or memorandum
thereof was recorded in the office of the County Recorder of the County on February 27,
1991 under Recorder's Serial Number 91-33883, the Corporation leased the Demised
Premises and 1991 Project located thereon to the County;
WHEREAS, pursuant to an assignment agreement, dated as of February 1,
1991, between the Corporation and the Trustee, the lease payments to be made by the
County under the Facility Lease (the "Base Rental") were assigned to the Trustee to pay the
principal and interest represented by the Certificates;
WHEREAS, the Authority intends to assist the County in refinancing the
acquisition and renovation of the 1991 Project by causing the execution and delivery of
Certificates of Participation (Capital Projects Program), Series of 1997 (the "1997
Certificates");
WHEREAS, pursuant to the Letter of Instructions from the County to the
Trustee, dated as of August 1, 1997, certain proceeds of the 1997 Certificates will be
deposited into an escrow fund (the "Escrow Fund") and irrevocably pledged to repay the
Base Rental and the Certificates;
WHEREAS, pursuant to the terms of Section 14.01 of the Trust Agreement,
following the deposit of such amounts in the Escrow Fund, no Certificates will remain
Outstanding under the Trust Agreement;
SM-rnsi.z 2
WHEREAS, as consideration for such deposit in the Escrow Fund, the
Corporation and the Trustee (which is hereby requested to execute this Assignment
Agreement), desire to assign all of their rights, title and interest in the Site Lease and
Facility Lease (other than the right, title and interest in the Base Rental to be paid from the
Escrow Fund) to the Authority;
WHEREAS, all acts, conditions and things required by law to exist, to have
happened and to have been performed precedent to and in connection with the execution and
entering into of this Assignment Agreement do exist, have happened and have been
performed in regular and due time, form and manner as required by law, and the parties
hereto are now duly authorized to execute and enter into this Assignment Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. Assignment.
The Corporation and the Trustee for good and valuable consideration, the
receipt of which is hereby acknowledged, do hereby unconditionally grant, transfer and
assign to the Authority without recourse (i) all their rights, title and interest under the Site
Lease, and (ii) all of their rights, title and interest under the Facility Lease, excepting only
the right to receive Base Rental to be paid from the Escrow Fund.
SECTION 2. Acceptance.
The Authority hereby accepts the assignments set forth in Section 1 above.
SECTION 3. California Law.
spa-M81.2 3
This Assignment Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of California.
SECTION 4. Severability.
If any agreement, condition, covenant or term hereof or any application hereof
should be held by a court of competent jurisdiction to be invalid, void or unenforceable, in
whole or in part, all agreements, conditions, covenants and terms hereof and all applications
thereof not held invalid, void or unenforceable shall continue in full force and effect and
shall in no way be affected, impaired or invalidated thereby.
SECTION 5. Execution.
This Assignment Agreement may be executed in any number or counterparts,
each of which shall be deemed to be an original, by all together shall constitute but one and
the same Assignment Agreement.
sF2-77581.2 4
IN WITNESS WHEREOF, the parties hereto have executed and attested this
Agreement by their officers thereunto duly authorized as of the day and year first written
above.
ABAG FINANCE CORPORATION
By
President
(SEAL)
Attest
Secretary
FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION, as Trustee
By
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Chair
Attest:
Secretary
sF2-77581.2 5
Recording requested by OH&S SECOND DRAFT
and return to: 08/04/97
COUNTY OF CONTRA COSTA
c/o Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attention: Mary A. Collins, Esq.
Free Recording Requested Pursuant to
California Government Code Section 6103
ASSIGNMENT AGREEMENT
by and between
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
and
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
Dated as of August 1, 1997
RELATING TO THE FACILITY LEASE
(CAPITAL PROJECTS PROGRAM)
SF2-77505.2 40511-105-PCM-08/04/97
ASSIGNMENT AGREEMENT
RELATING TO FACILITY LEASE
(Capital Projects Program)
This ASSIGNMENT AGREEMENT, made and entered into as of August 1,
1997, by and between the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY, a joint powers authority duly organized and existing under the laws of the
State of California (the "Authority"), and FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION, a national banking association duly organized and existing under and by
virtue of the laws of the United States of America (the "Trustee");
WITNESSETH :
WHEREAS, the Authority and the County of Contra Costa (the "County")
have entered into a lease, entitled "Site Lease (Capital Projects Program)" and dated as of
August 1, 1997 (the "Site Lease"), and have entered into a lease entitled "Facility Lease
(Capital Projects Program)" and dated as of August 1, 1997 (the "Facility Lease"), all with
respect to certain real property situated in the County, and as more particularly described in
Exhibit A attached hereto and made a part hereof; and
WHEREAS, under the Facility Lease, the County is and will be obligated to
make certain rental payments to the Authority for the lease of such real property and the
Project (as that term is defined in the Facility Lease); and
WHEREAS, the Authority desires to assign without recourse all of its rental
payments to the Trustee for the benefit of the owners of certificates of participation (the
"Certificates") executed and delivered under a trust agreement entered into by and among the
SF2-77505.2 40511-105-PCM-08/04/97
Trustee, the Authority and the County, entitled "Trust Agreement" and dated as of August 1,
1997 (the "Trust Agreement"); and
WHEREAS, in consideration of such assignment and the execution of the
Trust Agreement, the Trustee has agreed to execute and deliver the Certificates in an amount
equal to the aggregate principal components of said rental payments as are designated base
rental payments in the Facility Lease, each evidencing and representing a fractional
undivided interest in such base rental payments; and
WHEREAS, the Authority hereby certifies that all acts, conditions and things
required by law to exist, to have happened and to have been performed precedent to and in
connection with the execution and entering into of this Assignment Agreement do exist, have
happened and have been performed in regular and due time, form and manner as required by
law, and the parties thereto are now duly authorized to execute and enter into this
Assignment Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF
THE MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR
OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE
AS FOLLOWS:
SECTION 1. Assi ng meet.
The Authority, for good and valuable consideration, the receipt of which is
hereby acknowledged, does hereby unconditionally grant, transfer and assign to the Trustee
without recourse (i) all its rights to receive the Base Rental Payments (as such term is
defined in the Facility Lease) and all other rental payments scheduled to be paid by the
County under and pursuant to the Facility Lease for the benefit of the owners of the
SF2-77505.2 2 40511-105-PCM-08/04/97
Certificates, (ii) all rents, profits, products and offspring from the Project (as such term is
defined in the Facility Lease) to which the Authority has any right or claim whatsoever,
(iii) the security interest granted by the County in the Lease Fund and the Certificate Reserve
Fund (as such terms are defined in the Facility Lease), (iv) the right to take all actions and
give all consents under the Facility Lease, (v) the right of access more particularly described
in the Facility Lease, (vi) the Facility Lease and the Site Lease, (vii) all other right, title, and
interest of the Authority in, to and under the Facility Lease and the Site Lease, and (viii) all
right, title and interest of the Authority in the funds and accounts (and the money and other
property held therein) established pursuant to the Trust Agreement or the Facility Lease.
The Authority acknowledges that upon the execution and delivery of this Assignment
Agreement, it shall have no right, title, or interest in or to the Base Rental Payments, the
Facility Lease or the Site Lease.
SECTION 2. Acceptance.
The Trustee hereby accepts the foregoing assignment for the benefit of the
owners of the Certificates, subject to the terms and provisions of the Trust Agreement, and
all such rental payments shall be applied and all such rights so assigned shall be exercised by
the Trustee as provided for in the Trust Agreement.
SECTION 3. Conditions.
This Assignment Agreement shall impose no obligations upon the Trustee
beyond those expressly provided for in the Trust Agreement.
SECTION 4. California Law.
The Assignment Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of California.
SF2-77505.2 3 40511-105-PCM-08/04/97
SECTION 5. Severability.
If any agreement, condition, covenant or term hereof or any application hereof
should be held by a court of competent jurisdiction to be invalid, void or unenforceable, in
whole or in part, all agreements, conditions, covenants and terms hereof and all applications
thereof not held invalid, void or unenforceable shall continue in full force and effect and
shall in no way be affected, impaired or invalidated thereby.
SECTION 6. Execution in CountMarts.
This Assignment Agreement 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 Agreement.
SF2-77505.2 4 40511-105-PCM-08/04/97
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their officers thereunto duly authorized as of the day and year first written
above.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Chair
By
Secretary
FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Officer
SF2-77505.2 5 40511-105-PCM-08/04/97
EXHIBIT A
Project Phase I
All that certain real property situated in the County of Contra Costa, State of
California, described as follows:
SF2-77505.2 A-1 40511-105-PCM-08/04/97
OH&S DRAFT
8/04/97
CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the "Disclosure Agreement") is
executed and delivered by the COUNTY OF CONTRA COSTA, California (the "County"),
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, as trustee (the "Trustee"),
and U.S. TRUST COMPANY OF CALIFORNIA, N.A.,, as dissemination agent (the
"Dissemination Agent") in connection with the execution and delivery of$
Certificates of Participation (Capital Projects Program), Series of 1997 (the "Certificates of
Participation"). The Certificates of Participation are being executed and delivered pursuant
to a Trust Agreement dated as of August 1, 1997, by and among the County, the Contra
Costa County Public Facilities Corporation (the "Corporation") and the Trustee (the "Trust
Agreement"). The County, the Trustee and the Dissemination Agent;covenant and agree as
follows:
SECTION 1. Purpose of the Disclosure Agreement. This Disclosure
Agreement is being executed and delivered by the County, the Trustee and the Dissemination
Agent for the benefit of the Holders and Beneficial Owners of the Certificates of
Participation and in order to assist the Participating Underwriters in complying with S.E.C.
Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Trust
Agreement, which apply to any capitalized term used in this Disclosure Agreement unless
otherwise defined in this Section, the following capitalized terms shall have the following
meanings:
"Annual Report" shall mean any Annual Report provided by the County
pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Beneficial Owner" shall mean any person which has or shares the power,
directly or indirectly, to make investment decisions concerning the ownership of any
Certificate of Participation (including persons holding Certificates of Participation through
nominees, depositories or other intermediaries).
"Disclosure Representative" shall mean the County Administrator, Deputy
County Administrator or his or her designee, or such other officer or employee as the
County shall designate in writing to the Trustee from time to time.
"Dissemination Agent" shall mean U.S. Trust Company of California, N.A.,
acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination
Agent designated in writing by the County and which has filed with the Trustee a written
acceptance of such designation.
SF2-78080.1
"Listed Events" shall mean any of the events listed in Section 5(a) of this
Disclosure Agreement.
"National Repository" shall mean any Nationally Recognized Municipal
Securities Information Repository for purposes of the Rule. The National Repositories
currently approved by the Securities and Exchange Commission are set forth in Exhibit B.
"Participating Underwriter" shall mean any of the original underwriters of the
Certificates of Participation required to comply with the Rule in connection with offering of
the Certificates of Participation.
"Repository" shall mean each National Repository and the State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as the same may be amended from
time to time.
"State" shall mean the State of California.
"State Repository" shall mean any public or private repository or entity
designated by the State as the state repository for the purpose of the Rule and recognized as
such by the Securities and Exchange Commission. As of the date of this Agreement, there is
no State Repository.
SECTION 3. Provision of Annual Reports.
(a) The County shall, or shall cause the Dissemination Agent to, not later
than nine months after the end of the County's fiscal year (presently June 30), commencing
with the report for the 1996-1997 Fiscal Year, provide to each Repository an Annual Report
which is consistent with the requirements of Section 4 of this Disclosure Agreement. The
Annual Report may be submitted as a single document or as separate documents comprising a
package, and may include by reference other information as provided in Section 4 of this
Disclosure Agreement; provided that the audited financial statements of the County may be
submitted separately from the balance of the Annual Report and later than the date required
above for the filing of the Annual Report if they are not available by that date. If the
County's fiscal year changes, it shall give notice of such change in the same manner as for a
Listed Event under Section 5(f).
(b) Not later than fifteen (15) Business Days prior to the date specified in
subsection (a) for providing the Annual Report to Repositories, the County shall provide the
Annual Report to the Dissemination Agent and the Trustee (if the Trustee is not the
Dissemination Agent). If by such date, the Dissemination Agent has not received a copy of
the Annual Report, the Dissemination Agent shall contact the County to determine if the
County is in compliance with the first sentence of this subsection (b)..
SF2-78080.1 2
(c) If the Dissemination Agent is unable to verify that an Annual Report
has been provided to Repositories by the date required in subsection (a), the Dissemination
Agent shall send a notice to each Repository, the Municipal Securities Rulemaking Board and
the State Repository, if any, in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine each year prior to the date for providing the Annual
Report the name and address of each National Repository and the State Repository, if
any; and
(ii) to the extent the County has provided the Annual Report to the
Dissemination Agent, file a report with the County and (if the Dissemination Agent is
not the Trustee) the Trustee certifying that the Annual Report has been provided
pursuant to this Disclosure Agreement, stating the date it was provided and listing all
the Repositories to which it was provided.
SECTION 4. Content of Annual Reports. The County's Annual Report shall
contain or include by reference the following:
1. The audited financial statements of the County for the prior fiscal year,
prepared in accordance with generally accepted accounting principles as promulgated to apply
to governmental entities from time to time by the Governmental Accounting Standards Board.
If the County's audited financial statements are not available by the time the Annual Report
is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited
financial statements in a format similar to the financial statements contained in the final
Official Statement, and the audited financial statements shall be filed in the same manner as
the Annual Report when they become available.
2. Numerical and tabular information for the immediately preceding Fiscal
Year of the type contained in the Official Statement under the following captions:
(a) "SECURITY AND SOURCES OF PAYMENT FOR THE 1997
CERTIFICATES -- RENTAL PAYMENT SCHEDULE" (changes in base rental
payments due to unscheduled prepayments and defeasances);
(b) "SECURITY AND SOURCES OF PAYMENT FOR THE 1997
CERTIFICATES -- State Intercept Program" (update Summary of Motor Vehicle
License Fees table);
(c) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
County General Fund Budges for Fiscal Years 1995-96; 1996-97; and 1997-98"
(update General Fund Budgets table);
SM-78080.1 3
(d) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
Ad Valorem Property Taxes" (update Summary of Assessed Valuations and Ad
Valorem Property Taxation table);
(e) "APPENDIX B -- COUNTY FINANCIAL INFORMATION
The Contra Costa County Investment Pool" (update tables);
(f) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
Accounting Policies, Reports and Audits" (update General Fund Balance Sheet table);
(g) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
Accounting Policies, Reports and Audits" (update Schedule of Revenues, Expenditures
and Changes in Fund Balances table);
(h) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
Pension Plan" (update); and
(i) "APPENDIX B -- COUNTY FINANCIAL INFORMATION --
Long Term Obligations -- General Obligation Debt" and "--Lease Obligations"
(update).
Any or all of the items listed above may be included by specific reference to other
documents, including official statements of debt issues of the County or related public
entities, which have been submitted to each of the Repositories or the Securities and
Exchange Commission. If the document included by reference is a final official statement, it
must be available from the Municipal Securities Rulemaking Board. The County shall
clearly identify each such other document so included by reference.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the County shall give, or
cause to be given, notice of the occurrence of any of the following events with respect to the
Certificates of Participation, if material:
1. principal and interest payment delinquencies;
2. non-payment related defaults;
3. modifications to rights of Holders of Certificates of Participation;
4. optional, contingent or unscheduled bond calls;
5. defeasances;
6. rating changes;
sF2a8080.1 4
7. adverse tax opinions or events adversely affecting the tax-exempt status
of the Certificates of Participation;
8. unscheduled draws on the debt service reserves reflecting financial
difficulties;
9. unscheduled draws on credit enhancements reflecting financial
difficulties;
10. substitution of credit or liquidity providers, or their failure to perform;
and
11. release, substitution or sale of property securing repayment of the
Certificates of Participation.
(b) The Trustee shall, promptly upon obtaining actual knowledge at its
principal corporate trust office as specified in Section 12 hereof of the occurrence of any of
the Listed Events, contact the Disclosure Representative, inform such person of the event,
and request that the County promptly notify the Trustee in writing whether or not to report
the event pursuant to subsection (f); provided that, failure by the Trustee to so notify the
Disclosure Representative and make such request shall not relieve the County of its duty to
report Listed Events as required by this Section 5.
(c) Whenever the County obtains knowledge of the occurrence of a Listed
Event, whether because of a notice from the Trustee pursuant to subsection (b) or otherwise,
the County shall as soon as possible determine if such event would be material under
applicable federal securities laws.
(d) If the County has determined that knowledge of the occurrence of a
Listed Event would be material under applicable federal securities laws, the County shall
promptly notify the Trustee in writing. Such notice shall instruct the Trustee to report the
occurrence pursuant to,subsection (f).
(e) If in response to a request under subsection (b), the County determines
that the Listed Event would not be material under applicable federal securities laws, the
County shall so notify the Trustee in writing and instruct the Trustee not to report the
occurrence pursuant to subsection (f).
(f) If the Trustee has been instructed by the County to report the
occurrence of a Listed Event, the Trustee shall file a notice of such occurrence with the
Municipal Securities Rulemaking Board and the State Repository. Notwithstanding the
foregoing, notice of Listed Events described in subsections (a)(4) and (5) need not be given
under this subsection any earlier than the notice (if any) of the underlying event is given to
Holders of affected Certificates of Participation pursuant to the Trust Agreement.
sF2-78080.1 5
(g) The Trustee may conclusively rely on an opinion of counsel that the
County's instructions to the Trustee under this Section 5 comply with the requirements of the
Rule.
SECTION 6. Termination of Reporting_Obli ag tion. Each party's obligations
under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption
or payment in full of all of the Certificates of Participation. If such termination occurs prior
to the final maturity of the Certificates of Participation, the County shall give notice of such
termination in the same manner as for a Listed Event under Section 5(f).
SECTION 7. Dissemination Agent. The County may, from time to time,
appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this
Disclosure Agreement, and may discharge any such Agent, with or without appointing a
successor Dissemination Agent. The Dissemination Agent shall not be responsible in any
manner for the content of any notice or report prepared by the County pursuant to this
Disclosure Agreement. If at any time there is not any other designated Dissemination Agent,
the Trustee shall be the Dissemination Agent. The initial Dissemination Agent shall be U.S.
Trust Company of California, N.A.
SECTION 8. Amendment; Waiver. Notwithstanding any other provision of
this Disclosure Agreement, the County, the Trustee and the Dissemination Agent may amend
this Disclosure Agreement (and the Trustee and the Dissemination Agent shall agree to any
amendment so requested by the County provided such amendment does not impose any
greater duties, nor risk of liability, on the Trustee or the Dissemination Agent, as the case
may be), and any provision of this Disclosure Agreement may be waived, provided that the
following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a),
4, or 5(a), it may only be made in connection with a change in circumstances that
arises from a change in legal requirements, change in law, or change in the identity,
nature or status of an obligated person with respect to the Certificates of Participation,
or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver,
would, in the opinion of nationally recognized bond counsel, have complied with the
requirements of the Rule at the time of the original issuance of the Certificates of
Participation, after taking into account any amendments or interpretations of the Rule,
as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Holders of the
Certificates of Participation in the same manner as provided in:the Trust Agreement
for amendments to the Trust Agreement with the consent of Holders, or (ii) does not,
in the opinion of the Trustee or nationally recognized bond counsel, materially impair
the interests of the Holders or Beneficial Owners of the Certificates of Participation.
sF2-78080.1 6
In the event of any amendment or waiver of a provision of this Disclosure Agreement, the
County shall describe such amendment in the next Annual Report, and shall include, as
applicable, a narrative explanation of the reason for the amendment or waiver and its impact
on the type (or, in the case of a change of accounting principles, on the presentation) of
financial information or operating data being presented by the County. In addition, if the
amendment relates to the accounting principles to be followed in preparing financial
statements, (i) notice of such change shall be given in the same manner as for a Listed Event
under Section 5(f), and (ii) the Annual Report for the year in which the change is made
should present a comparison (in narrative form and also, if feasible, in quantitative form)
between the financial statements as prepared on the basis of the new accounting principles
and those prepared on the basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Disclosure Agreement
shall be deemed to prevent the County from disseminating any other information, using the
means of dissemination set forth in this Disclosure Agreement or any other means of
communication, or including any other information in any Annual Report or notice of
occurrence of a Listed Event, in addition to that which is required by this Disclosure
Agreement. If the County chooses to include any information in any Annual Report or
notice of occurrence of a Listed Event in addition to that which is specifically required by
this Disclosure Agreement, the County shall have no obligation under this Agreement to
update such information or include it in any future Annual Report or notice of occurrence of
a Listed Event.
SECTION 10. Default. In the event of a failure of the County, the Trustee
or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the
Trustee may (and, at the request of any Participating Underwriter or the Holders of at least
25% aggregate principal amount of Outstanding Certificates of Participation, shall), or any
Holder or Beneficial Owner of the Certificates of Participation may take such actions as may
be necessary and appropriate, including seeking mandate or specific performance by court
order, to cause the County, the Trustee or the Dissemination Agent, as the case may be, to
comply with its obligations under this Disclosure Agreement. A default under this Disclosure
Agreement shall not be deemed an Event of Default under the Trust Agreement, and the sole
remedy under this Disclosure Agreement in the event of any failure of the County, the
Trustee and the Dissemination Agent to comply with this Disclosure Agreement shall be an
action to compel performance.
SECTION 11. Duties, Immunities and Liabilities of Trustee and
Dissemination Agent. The Dissemination Agent (if other than the Trustee or the Trustee in
its capacity as Dissemination Agent) shall have only such duties as are specifically set forth
in this Disclosure Agreement, and the County agrees to indemnify and save the
Dissemination Agent, its.officers, directors, employees and agents, harmless against any loss,
expense and liabilities which it may incur arising out of or in the exercise or performance of
its powers and duties hereunder, including the costs and expenses (including attorneys fees)
of defending against any claim of liability, but excluding liabilities due to the Dissemination
Agent's negligence or wilful misconduct. The obligations of the County under this Section
SF2-78080.1 7
shall survive resignation or removal of the Dissemination Agent and payment of the
Certificates of Participation.
SECTION 12. Notices. Any notices or communications to or among any of
the parties to this Disclosure Agreement may be given as follows:
To the County: County of Contra Costa
County Administrator's Office
651 Pine Street, 11th Floor
Martinez, CA 94553-0063
Attention: DeRoyce Bell, Deputy County Administrator
Telephone: (510) 335-1093
Fax: (510) 335-1098
If to the Trustee: First Trust of California, National Association
One California Street, 4th Floor
San Francisco, CA 94111
Attention: Corporate Trust Department
Telephone: (415) 773-4519
Fax: (415) 773-4592
To the Dissemination: U.S. Trust of California, N.A.
Agent 555 South Flower Street, Suite 2700
Los Angeles, CA 90071
Attention: Deborah Young, Assistant Vice President
Telephone: (213) 488-4039
Fax: (213) 488-4029
Any person may, by written notice to the other persons listed above, designate a different
address or telephone number(s) to which subsequent notices or communications should be
sent.
SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to
the benefit of the County, the Trustee, the Dissemination Agent, the Participating
Underwriters and Holders and Beneficial Owners from time to time of the Certificates of
Participation, and shall create no rights in any other person or entity.
sF2-78080.1 8
SECTION 14. Counterparts. This Disclosure 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.
Date:. , 1997.
COUNTY OF CONTRA COSTA
BY
Chair of the Board of
Supervisors of the County of
Contra Costa, State of California
Attest: Philip J. Batchelor, Clerk
of the Board of Supervisors
and County Administrator
By:
Approved as to form:
County Counsel
FIRST TRUST OF CALIFORNIA, NATIONAL'
ASSOCIATION, as Trustee
By
Authorized Officer
sP2a8080.1 9
U.S. TRUST COMPANY OF CALIFORNIA,
N.A., as Dissemination Agent
By
Authorized Officer
sF2-78080.1 10
EXHIBIT A
NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT
Name of County: County of Contra Costa
Name of Certificates of Participation Issue: County of Contra Costa Certificates of
Participation (Capital Projects Program), Series of 1997
Date of Issuance:
NOTICE IS HEREBY GIVEN that the County of Contra Costa has not provided an
Annual Report with respect to the above-named Certificates of Participation as required by
Section of the Trust Agreement dated as of August 1, 1997, by and among the County
of Contra Costa, the Contra Costa County Public Facilities Corporation and First Trust of
California, National Association. The County of Contra Costa anticipates that the Annual
Report will be filed by
Dated:
U.S TRUST COMPANY OF CALIFORNIA, N.A., on
behalf of COUNTY OF CONTRA COSTA
cc: County of Contra Costa
sr2a9080.1 A-1
EXHIBIT B
The Nationally Recognized Municipal Securities Information Repositories
approved by the Securities and Exchange Commission as of the date of the Disclosure
Agreement are as follows:
Bloomberg Municipal Repository JJ Kenny Information Services
P.O. Box 840 The Repository
Princeton, NJ 08542-0840 65 Broadway, 16th Floor
Internet address: MUNIS@bloomberg.doc New York, NY 10006
(609) 279-3200 (212) 770-4568
FAX: (609) 279-3235/(609) 279-5963 FAX: (212) 797-7994
Contact: Dave Campbell Contact: Joan Horai, Repository
Disclosure, Inc. Moody's NRMSIR
Document Augmentation/Municipal Public Finance Information Center
Securities 99 Church Street
5161 River Road New York, NY 10007-2796
Bethesda, MD 20816 (800) 339-6306
(301) 951-1450 FAX: (212) 553-1460
FAX: (301) 718-2329 Contact: Claudette Stephenson
Contact: Barry Sugarman (212) 553-0345
(301) 215-6015
Thomson NRMSIR
Donnelly Financial Secondary Market Disclosure
Municipal Security Disclosure Archive 395 Hudson Street, 3rd Floor
559 Main Street New York, NY 10014
Hudson, MA 01749 Internet address: Disclosureamuller.com
Internet address: (212) 807-3826
http://Www.municipal.com FAX: (212) 989-2078
(800) 580-3670 Contact: Thomas Garske
FAX: (508) 562-1969
DPC Data, Inc.
One Executive Drive
Fort Lee, N.J. 07024
Internet address: nrmsir@docdata.com
(201) 346-0701
(201) 346-0107 [FAX]
Contact: Dick Stout
SF2-78080.1 B-1
° RESOLUTION NO.
OF THE BOARD OF DIRECT SOF THE
COUNTY OF CONTRA COSTA,PUBLIC FINANCE-AUTHORITY
RESOLUTION APPROVING FORMS OF AND EXECUTION OF A SITE LEASE
(CAPITAL PROJECTS PROGRAM), A FACILITY LEASE (CAPITAL PROJECTS
PROGRAM), A TRUST AGREEMENT, AN ASSIGNMENT AGREEMENT WITH ABAG
FINANCE CORPORATION, AN ASSIGNMENT AGREEMENT WITH THE TRUSTEE
AND A CONTRACT OF PURCHASE; APPROVING EXECUTION AND DELIVERY OF
CERTIFICATES OF PARTICIPATION (CAPITAL PROJECTS PROGRAM), SERIES OF
1997; AND AUTHORIZING TAKING OF NECESSARY ACTIONS AND EXECUTION
OF NECESSARY CERTIFICATES.
WHEREAS, $23,980,000 aggregate principal amount of certificates of
participation (the "Prior Certificates") were executed and delivered pursuant to a Trust
Agreement, dated as of February 1, 1991, by and among the County of Contra Costa (the
"County"), ABAG Finance Corporation (the "Corporation") and First Trust of California,
National Association, as successor trustee (the "Prior Trustee"), for the purpose of financing
the acquisition and renovation of certain buildings for use by the County (the "1991
Project");
WHEREAS, pursuant to a site and facility lease, dated as of February 1, 1991
(the "Prior Site Lease"), between the County and the Corporation, the County leased real
property (the "1991 Demised Premises") on which the 1991 Project was located to the
Corporation;
WHEREAS, pursuant to a lease agreement, dated as of February 1, 1991
(the "Prior Facility Lease"), between the Corporation and the County, the Corporation leased
the 1991 Demised Premises and the 1991 Project to the County;
SF2-77590.3
WHEREAS, pursuant to an assignment agreement, dated as of February 1,
1991, between the Corporation and the Prior Trustee, the lease payments to be made by the
County under the Prior Facility Lease-(the "Prior Base Rental") were assigned to the Prior
Trustee to pay the principal and interest represented by the Prior Certificates;
WHEREAS, the County of Contra Costa Financing Authority (the
"Authority") has been created for the purpose, among others, of assisting in the financing of
public capital improvements;
WHEREAS, the Authority desires to assist the County in refinancing the Prior
Certificates and in financing the acquisition and renovation of certain additional capital
improvements by causing the execution and delivery of Certificates of Participation (Capital
Projects Program), Series of 1997 (the "1997 Certificates");
WHEREAS, pursuant to the Letter of Instructions to the Prior Trustee, dated
as of August 1, 1997, certain proceeds of the 1997 Certificates will be deposited into an
escrow fund (the "Escrow Fund") and irrevocably pledged to repay the Prior Base Rental and
the Prior Certificates;
WHEREAS, as consideration for such deposit in the Escrow Fund, the
Corporation and Prior Trustee will assign all of their rights, title and interest in the Prior Site
Lease and Prior Facility Lease (other than the right, title and interest in the Prior Base Rental
to be paid from the Escrow Fund) to the Authority;
WHEREAS, the Authority and County desire to continue to lease the 1991
Demised Premises, together with certain additional real property described in Exhibit A -
Part H thereto (collectively, the "Demised Premises") pursuant to the terms of the Site Lease
(Capital Projects Program) (the "Site Lease"), which amends and restates in its entirety the
3F M590.3 2
Prior Site Lease, and to continue to lease the Demised Premises and the 1991 Project,
together with certain additional facilities described in Exhibit B - Part 11 hereto (collectively,
the "Project Phase I") pursuant to the terms of the Facility Lease (Capital Projects Program)
(the "Facility Lease"), which amends and restates in its.entirety the Prior Facility Lease;
WHEREAS, under the Facility Lease, the County will be obligated to make
base rental payments to the Authority for the lease of the Project Phase I;
WHEREAS, all rights to receive such base rental payments will be assigned
without recourse by the Authority to First Trust of California, National Association (the
"Trustee"), as trustee pursuant to an agreement, entitled "Trust Agreement" (the "Trust
Agreement"); and
WHEREAS, this Board of Directors hereby determines that it would be in the
best interest of the County for the Authority and the County to enter into an agreement
entitled "Contract of Purchase" (the "Purchase Contract"), pursuant to which PaineWebber
Incorporated and Morgan Stanley & Co. Incorporated (the "Underwriters") will purchase the
1997 Certificates;
WHEREAS, this Board has been presented with the form of each document
referred to relating to the 1997 Certificates, and the Board has examined and approved each
document and desires to authorize and direct the execution of such documents and the
consummation of such financing; and
WHEREAS, the Authority has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions hereinafter
authorized;
smMsso.s 3
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the
County of Contra Costa Public Finance Authority, as follows:-
Section'on 1. The form of Site Lease, on file with the Secretary of the Board of
Directors, is hereby approved and the Chair of the Board of Directors and the Secretary of
the Board of Directors or their designees are hereby authorized and directed to execute and
deliver the Site Lease in substantially said form, with such changes therein as such officers
may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof; provided, however, that the term of the Site Lease (including any
extensions), shall not exceed December 31, 2031.
Section 2. The form of Facility Lease, on file with the Secretary of the Board
of Directors, is hereby approved and the Chair of the Board of Directors and the Secretary of
the Board of Directors or their designees are hereby authorized and directed to execute and
deliver the Facility Lease in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof; provided, however, that the term of the Facility Lease (including any
extensions) shall not exceed December 31, 2031.
Section 3. The form of Trust Agreement by and among First Trust of
California, National Association, as trustee, the Authority and the County, on file with the
Secretary of the Board of Directors, is hereby approved. The Chair of the Board of
Directors and the Secretary of the Board of Directors or their designees are hereby
authorized and directed to execute and deliver the Trust Agreement in substantially said
form, with such changes therein as such officers may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof. Among the changes authorized
SF2-77590.3 4
to be made to such Trust Agreement are such changes as are necessary in the event the
Executive Director or his designee, upon consultation with the Underwriters, determines it is
desirable to (i) accommodate one or more of the methods or modes of determining the
principal and interest components of the Base Rental Payments represented by the 1997
Certificates or other financing techniques as may be provided for in the Official Statement,
or (ii) obtain municipal bond insurance.
Section 4. The form of Assignment Agreement, by and among the Authority,
the trustee for the Prior Certificates and ABAG Finance Corporation, on file with the
Secretary of the Board of Directors, is hereby approved. The Chair of the Board of
Directors and the Secretary of the Board of Directors or their designees are hereby
authorized and directed to execute and deliver the Assignment Agreement in substantially
said form, with such changes therein as such officers may require or approve, such approval
to be conclusively evidenced by the execution and delivery thereof.
e tin 5. The form of Assignment Agreement, by and between the Authority
and the Trustee, on file with the Secretary of the Board of Directors, is hereby approved.
The Chair of the Board of Directors and the Secretary of the Board of Directors or their
designees are hereby authorized and directed to execute and deliver the Assignment
Agreement in substantially said form, with such changes therein as such officers may require
or approve, such approval to be conclusively evidenced by the execution and delivery
thereof.
Section 6. The form of Purchase Contract by and among the Underwriters, the
County and the Authority on file with the Secretary of the Board of Directors, is hereby
approved. The Executive Director or his designee is hereby authorized and directed to
sF2-77590.3 5
execute and deliver the Purchase Contract in substantially said form, with such changes
-therein as such officer may require ovapprove, such approval to be conclusively evidenced
by the execution and delivery thereof and pursuant thereto to sell not to exceed $40,000,000
aggregate principal amount of 1997 Certificates to the Underwriters for the purchase price set
forth in the Purchase Contract, said price to be not less than the principal amount represented
by the 1997 Certificates less an underwriting discount of not exceeding .411% of the
principal amount of 1997 Certificates (exclusive of any original issue discount or premium).
Section 7. The execution and delivery, pursuant to the Trust Agreement, of
not to exceed $40,000,000 aggregate principal amount of the County of Contra Costa,
California, Certificates of Participation (Capital Projects Program), Series of 1997,
evidencing and representing fractional undivided interests in the rights to receive base
payments payable by the County pursuant to the Facility Lease, payable in the years and in
the amounts with interest components with respect thereto as specified in the Trust
Agreement as executed, is hereby authorized and approved. The sale of the 1997
Certificates to the Underwriters pursuant to the terms and conditions of the Purchase
Contract is hereby approved.
Section 8. The officers of the Authority are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in
order to consummate the transactions herein authorized and otherwise to carry out, give
effect to and comply with the terms and intent of this Resolution. The Chair of the Board of
Directors, the Secretary of the Board of Directors, the Executive Director of the Authority or
their designees and the officers of the Authority be and they are hereby authorized and
directed to execute and deliver any and all certificates and representations, signature
SF2-77590.3 6
certificates, no-litigation certificates,=tax and rebate certificates, the letter of representations
to The Depository Trust Company and certificates concerning the contents-of the-Official
Statement distributed in connection with the sale of the 1997 Certificates, necessary and
desirable to accomplish the transactions set forth above:
Section 9. All actions heretofore taken by the officers and agents of the
Authority with respect to the sale, execution and delivery of the 1997 Certificates are hereby
approved and confirmed.
SF2-77590.3 7
' Section 10. This Resolution shall take effect from and after its date_of
adoption. g
PASSED AND ADOPTED this 5th day of August, 1997.;
Chair of the Board of Directors
Secretary of the Board of Directors
SF2-77590.3 8
a �
RESOLUTION NO. 97/404
OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF,-,
CONTRA COSTA
CALIFORNIA
RESOLUTION APPROVING FORMS OF AND EXECUTION.OF A SITE LEASE
(CAPITAL PROJECTS PROGRAM), A FACILITY LEASE (CAPITAL PROJECTS
PROGRAM), A TRUST AGREEMENT, A LETTER OF INSTRUCTIONS, A CONTRACT
OF PURCHASE AND A CONTINUING DISCLOSURE AGREEMENT; APPROVING
EXECUTION AND DELIVERY OF CERTIFICATES OF PARTICIPATION (CAPITAL
PROJECTS PROGRAM), SERIES OF 1997; APPROVING FORM OF AND
DISTRIBUTION OF OFFICIAL STATEMENT FOR SAID CERTIFICATES OF
PARTICIPATION; ELECTING TO GUARANTEE RENTAL PAYMENTS WITH MOTOR
VEHICLE LICENSE FEES; AND AUTHORIZING TAKING OF NECESSARY ACTIONS
AND EXECUTION OF NECESSARY CERTIFICATES.
WHEREAS, this Board of Supervisors has heretofore determined that it would
be in the best interest of the County of Contra Costa (the "County") to proceed with a
certificate of participation financing for the refunding of outstanding Certificates of
Participation (1991 County Buildings Acquisition Project) (the "Prior Certificates"), which
were issued to finance the acquisition and renovation of certain county administration
facilities, and to finance the acquisition of certain additional capital improvements;
WHEREAS, the County of Contra Costa Financing Authority (the
"Authority") has been created for the purpose, among others, of assisting in the financing of
public capital improvements;
WHEREAS, it is proposed that the County enter into a "Site Lease (Capital
Projects Program)" (the "Site Lease") and a "Facility Lease (Capital Projects Program)" (the
"Facility Lease") with the Authority;
WHEREAS, under the Facility Lease, the County would be obligated to make
base rental payments to the Authority;
SF2-71525.3
WHEREAS, it is proposed that-all rights to receive such base rental payments
will be assigned without recourse by the Authority to First Trust of California, National
Association, as trustee (the "Trustee"), pursuant to an agreement, entitled "Assignment
Agreement" (the "Assignment Agreement");
WHEREAS, it is further proposed that the Authority, the County and the
Trustee enter into a trust agreement (the "Trust Agreement"), pursuant to which said trustee
will execute and deliver certificates of participation (the "1997 Certificates") in an amount
equal to the aggregate principal components of such payments, each evidencing and
representing a fractional undivided interest in such payments, and will use the proceeds to
defease the Prior Certificates and finance the acquisition and construction of additional capital
improvements;
WHEREAS, this Board of Supervisors hereby determines that it would be in
the best interest of the County for the Authority and the County to enter into an agreement
entitled "Contract of Purchase" (the "Purchase Contract"), pursuant to which PaineWebber
Incorporated and Morgan Stanley & Co. Incorporated (the "Underwriters") will purchase the
1997 Certificates;
WHEREAS, a form of Continuing Disclosure Agreement (the "Continuing
Disclosure Agreement") is on file with the Clerk of the Board of Supervisors;
WHEREAS, a form of Official Statement describing the 1997 Certificates is
on file with the Clerk of the Board of Supervisors;
WHEREAS, this Board has been presented with the form of each document
hereinafter referred to relating to the 1997 Certificates, and the Board has examined and
SF2-T7525.3 2
approved each document and desires to authorize and direct the execution of such documents
and the consummation of such financing;
WHEREAS, the County has full legal right, power and authority under the
Constitution and the laws of the State of California to enter into the transactions hereinafter
authorized; and
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the
County of Contra Costa, as follows:
Section 1. The County hereby specifically finds and declares that the actions
authorized hereby constitute and are with respect to public affairs of the County and that the
statements, findings and determinations of the County set forth above are true and correct.
Section 2. The form of Site Lease, on file with the Clerk of the Board of
Supervisors, is hereby approved and the Chairman of the Board of Supervisors and the Clerk
of the Board of Supervisors or their designees are hereby authorized and directed to execute
and deliver the Site Lease in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof; provided, however, that the term of the Site Lease (including any
extensions), shall not exceed December 31, 2031.
Section 3. The form of Facility Lease, on file with the Clerk of the Board of
Supervisors, is hereby approved and the Chairman of the Board of Supervisors and the Clerk
of the Board of Supervisors or their designees are hereby authorized and directed to execute
and deliver the Facility Lease in substantially said form, with such changes therein as such
officers may require or approve, such approval to be conclusively evidenced by the execution
and delivery thereof; provided, however, that the aggregate principal component of base
rental payments payable under the Facility Lease shall not exceed $40,000,000, the
maximum annual base rental payments payable under the Facility Lease shall not exceed
$4,500,000, the term of the Facility Lease (including any extensions) shall not exceed
December 31, 2031 and the true interest cost ("TIC") of the interest component of base
rental payments payable under the Facility Lease shall not exceed 7%. Among the changes
authorized to be made to such Facility Lease are such changes as are necessary in the event
the County Administrator or his designee, upon consultation with the Underwriters,
determines it is desirable to (i) accommodate one or more of the methods or modes of
determining the principal and interest components of the Base Rental Payments represented
by the 1997 Certificates or other financing techniques as may be provided for in the Official
Statement, or (ii) obtain municipal bond insurance.
Section 4. The form of Trust Agreement by and among First Trust of
California, National Association, as trustee, the Authority and the County, on file with the
Clerk of the Board of Supervisors, is hereby approved. The Chairman of the Board of
Supervisors and the Clerk of the Board of Supervisors or their designees are hereby
authorized and directed to execute and deliver the Trust Agreement in substantially said
form, with such changes therein as such officers may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof. Among the changes authorized
to be made to such Trust Agreement are such changes as are necessary in the event the
County Administrator or his designee, upon consultation with the Underwriters, determines it
is desirable to (i) accommodate one or more of the methods or modes of determining the
principal and interest components of the Base Rental Payments represented by the 1997
SFzM525.3 4
Certificates or other financing techniques as may be provided for in the Official Statement,
or (ii) obtain municipal bond insurance.
Secfion 5. The form of Letter of Instruction, by and between the County and
the trustee for the Prior Certificates, on file with the Clerk of the Board of Supervisors, is
hereby approved. The Chairman of the Board of Supervisors and the Clerk of the Board of
Supervisors or their designees are hereby authorized and directed to execute and deliver the
Letter of Instruction in substantially said form, with such changes therein as such officers
may require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof.
Section 6. The form of Purchase Contract by and among the Underwriters, the
County and the Authority on file with the Clerk of the Board of Supervisors, is hereby
approved. The County Administrator or his designee is hereby authorized and directed to
execute and deliver the Purchase Contract in substantially said form, with such changes
therein as such officer may require or approve, such approval to be conclusively evidenced
by the execution and delivery thereof and pursuant thereto to sell not to exceed $40,000,000
aggregate principal amount of 1997 Certificates to the Underwriters for the purchase price set
forth in the Purchase Contract, said price to be not less than the principal amount represented
by the 1997 Certificates less an underwriting discount of not exceeding .411% of the
principal amount of 1997 Certificates (exclusive of any original issue discount or premium). -
Section 7. The form of Official Statement describing the 1997 Certificates, on
file with the Clerk of the Board of Supervisors, is hereby approved. The County
Administrator or his designee is hereby authorized and directed to execute and deliver a final
Official Statement in substantially said form, with such additions thereto or changes therein
SF2-77525.3 5
as the County Counsel's Office may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof.
Section 8. The Underwriters are hereby authorized to distribute copies of the
Official Statement to persons purchasing the 1997 Certificates and other interested parties.
The distribution of the Preliminary Official Statement by the Underwriters is hereby
authorized and approved. The County Administrator or his designee is hereby authorized
and directed to execute a certificate confirming that the Preliminary Official Statement has
been "deemed final" by the County for purposes of Securities and Exchange Commission
Rule 15c2-12.
Section 9. The execution and delivery, pursuant to the Trust Agreement, of
not to exceed $40,000,000 aggregate principal amount of the County of Contra Costa,
California, Certificates of Participation (Capital Projects Program), Series of 1997,
evidencing and representing fractional undivided interests in the rights to receive base
payments payable by the County pursuant to the Facility Lease, payable in the years and in
the amounts with interest components with respect thereto as specified in the Trust
Agreement as executed, is hereby authorized and approved. The sale of the 1997
Certificates to the Underwriters pursuant to the terms and conditions of the Purchase
Contract is hereby approved.
Section 10. The form of Continuing Disclosure Agreement by and between the
County and the Trustee, on file with the Clerk of the Board of Supervisors, is hereby
approved. The County Administrator or his designee is hereby authorized and directed to
execute and deliver the Continuing Disclosure Agreement in substantially said form, with
SF2-71525.3 6
such changes therein as such officer may require or approve, such approval to be
conclusively evidenced by the execution and delivery thereof.
Section 11. The Board hereby elects, pursuant to Government Code Section
25350.55, to guarantee rental payments to be made by the County under the Facility Lease
and authorizes and directs the County Administrator or his designee to notify the Controller
of the State of California of such election, which notice shall include a schedule of lease
payments to be made by the County under the Facility Lease and shall identify a trustee
appointed by the County to effectuate the payment provisions pursuant to such guarantee.
For purposes of effectuating the payment provisions pursuant to Government Code
Section 25350.55, the Board hereby appoints the Trustee for the 1997 Certificates as trustee.
Section 12. The officers of the County are hereby authorized and directed,
jointly and severally, to do any and all things which they may deem necessary or advisable in
order to consummate the transactions herein authorized and otherwise to carry out, give
effect to and comply with the terms and intent of this Resolution. The Chairman of the
Board of Supervisors, the Clerk of the Board of Supervisors, the County Administrator, the
Deputy Administrator of the County and the officers of the County are hereby authorized and
directed to execute and deliver any and all certificates and representations, signature
certificates, no-litigation certificates, tax and rebate certificates, the letter of representations
to The Depository Trust Company and certificates concerning the contents of the Official
Statement distributed in connection with the sale of the 1997 Certificates, necessary and
desirable to accomplish the transactions set forth above.
SP2-77525.3 7
tion 13. All actions heretofore taken by the officers and agents of the
County with respect to the sale, execution and delivery of the 1997 Certificates are hereby
approved and confirmed.
Section 14. This Resolution shall take effect from and after its date of
adoption.
PASSED AND ADOPTED this 5th day of August, 1997.
Chairman of the Board of Supervisors
County of Contra Costa, California
[Seal]
ATTEST: Philip J. Batchelor, Clerk of the
Board of Supervisors and County Administrator
By 0 1 .. .��vj
Dep ty rk of the Board of
Supervisors of the County of
Contra Costa, State of California
SF M525.3 8
CLERK'S CERTIFICATE
L Jeanne Mag 1 i oDeputy Clerk and Chief Clerk of the Board of Supervisors
of the County of Contra Costa, hereby certify as follows:
The foregoing is a full, true and correct copy of a resolution duly adopted at a
regular meeting of the Board of Supervisors of said County duly and regularly held at the
regular meeting place thereof on the 5th day of August, 1997, of which meeting all of the
members of said Board of Supervisors had due notice and at which a majority thereof were
present; and at said meeting said resolution was adopted by the following vote:
AYES: Supervisors Rogers , Gerber , Canciamilla and DeSaulnier
NOES: None
ABSENT: Supervisor Uilkema
An agenda of said meeting was posted at least 72 hours before said meeting at
6 51 P i n e S t ., Martinez, California, a location freely accessible to members of the public,
and a brief general description of said resolution appeared on said agenda.
I have carefully compared the same with the original minutes of said meeting
on file and of record in my office; the foregoing resolution is a full, true and correct copy of
the original resolution adopted at said meeting and entered in said minutes; and said
resolution has not been amended, modified or rescinded since the date of its adoption, and
the same is now in full force and effect.
SF2-77525.3
WITNESS my hand and the seal of the County of Contra Costa this 5th day of
August, 1997.
Depu l Jerk
of the Boar of Supervisors
of the County of Contra Costa,
State of California
[Seal]
SF M525.3 2