HomeMy WebLinkAboutRESOLUTIONS - 02142017 - 2017/56
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the County of
Contra Costa Public Financing Authority, as follows:
Section 1. The foregoing recitals are true and correct and this Board so finds
and determines.
Section 2. The issuance and sale of the Bonds by the Authority, in a principal
amount not to exceed $105,000,000, for the financing of the 2017 Project, the refunding of the
Refunded Bonds and the payment of related transaction costs is hereby authorized and approved.
Section 3. 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, the Vice Chair of the
Board of Directors, the Executive Director of the Authority or the Deputy Executive Director of
the Authority or any designee of any such official (the “Authorized Signatories”) and the
Secretary of the Board of Directors or any Assistant Secretary of the Board of Directors (the
“Secretary”), each acting alone, are hereby authorized and directed to execute and deliver, and
the Secretary to attest, the Site Lease in substantially said form, with such changes therein as
such officer executing the same may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof; provided, however, that the term thereof shall
end on the date on which all Base Rental Payments and Additional Payments due and owing
under the Facilities Lease are paid in full, not to exceed a term of 20 years.
Section 4. The form of Facilities Lease on file with the Secretary is hereby
approved, and any one of the Authorized Signatories, each acting alone, is hereby authorized and
directed to execute and deliver, and the Secretary to attest, the Facilities Lease in substantially
said form, with such changes therein as such officer executing the same may require or approve,
such approval to be conclusively evidenced by the execution and delivery thereof; provided,
however, that the maximum annual base rental payments payable under the Facilities Lease shall
not exceed $21 million and the term of the Facilities Lease (including any extensions) shall end
on the date on which all of the Base Rental Payments and Additional Payments have been paid in
full; provided that in the event the obligation of the County to pay Base Rental Payments or
Additional Payments is abated for any period under the Facilities Lease, the term of the Facilities
Lease shall extend until such time as all Base Rental Payments and Additional Payments set
forth in the Facilities Lease have been paid in full, provided that the term of the Facilities Lease
shall not extend more than ten years following the last Base Rental Payment date set forth in the
Facilities Lease.
Section 5. The form of Trust Agreement on file with the Secretary is hereby
approved. Any one of the Authorized Signatories, each acting alone, is hereby authorized and
directed to execute and deliver, and the Secretary to attest, the Trust Agreement in substantially
said form, with such changes therein as such officer executing the same may require or approve,
such approval to be conclusively evidenced by the execution and delivery thereof.
Section 6. The form of Continuing Covenant Agreement on file with the
Secretary of the Authority is hereby approved. Any one of the Authorized Signatories is hereby
authorized and directed, for and in the name and on behalf of the Authority, to accept the offer of
the Purchaser to purchase the Bonds as reflected in the Continuing Covenant Agreement; and to
Body of Resolution No. 2017/56 Page 1 of 5
execute and deliver the Continuing Covenant Agreement in substantially the form on file with
the Secretary of the Authority, with such additions, deletions, changes and corrections therein as
such officer determines are necessary or appropriate and are approved by such officer, such
approval to be conclusively evidenced by the execution and delivery thereof; provided, however
that (i) the interest rate on the Bonds (excluding any default rate or taxable rate) shall not exceed
a true interest cost of three and a half percent (3.5%) per annum, and (ii) the refunding of the
Refunded Bonds shall result in savings in accordance with the County’s Debt Management
Policy.
Section 7. The proposed form of Escrow Agreement on file with the
Secretary is hereby approved. Any one of the Authorized Signatories, each acting alone, is
hereby authorized and directed to execute and deliver the Escrow Agreement in substantially
said form, with such changes therein as such officer executing the same may require or approve,
such approval to be conclusively evidenced by the acknowledgement thereof
Section 8. The Authorized Signatories are each hereby authorized to enter
into one or more investment agreements, float contracts, other hedging products that are
authorized under the County’s Debt Policy from time to time (hereinafter collectively referred to
as the “Investment Agreement”) providing for the investment of moneys in any of the funds and
accounts created under the Trust Agreement, on such terms as the Authorized Signatories shall
deem appropriate including providing investments with terms up to the final maturity date of the
Bonds. Pursuant to Section 5922 of the California Government Code, this Board hereby finds
and determines that the Investment Agreement is designed to reduce the amount and duration of
interest rate risk with respect to amounts invested pursuant to the Investment Agreement and is
designed to reduce the amount or duration of payment, rate, spread or similar risk or result in a
lower cost of borrowing when used in combination with the Bonds or enhance the relationship
between risk and return with respect to investments.
Section 9. The Authorized Signatories and other 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,
including, but not limited to, modifying the bond caption and series designation of the Bonds,
executing and delivering documents related to transfers of real property, lease terminations, title
clarifications, property acceptances, signature certificates, no-litigation certificates and tax and
rebate certificates, and execution of any escrow instructions and documents in connection with
the refunding and defeasance of the Refunded Bonds. The Authorized Signatories and the
County Finance Director on behalf of the Authority are hereby authorized and directed to
execute and deliver any and all certificates, instructions as to investments, written requests and
other certificates necessary and desirable to administer the Bonds and the Trust Agreement or
other documents authorized hereunder including executing the Written Requests of the Authority
authorizing disbursements from the Costs of Issuance Fund for payment of costs of issuance such
as legal and financial advisor fees, trustee’s fees, title insurance premiums, insurance premiums
and reserve surety premiums (if any), publication and printing costs and similar expenses of the
bond financing.
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Section 10. The Board hereby confirms the appointments of the following
officers of the County as officers of the Authority: County Administrator as Executive Director
and Secretary; County Public Works Director as Assistant Executive Director; Chief Assistant
County Administrator as Deputy Executive Director; County Finance Director as Deputy
Executive Director; County Auditor Controller as Treasurer; and County Finance Director as
Assistant Secretary and authorizes the Secretary to appoint and carry out his duties through
deputies.
Section 11. All actions heretofore taken by the officers and agents of the
Authority with respect to the issuance and sale of the Bonds are hereby approved and confirmed.
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Section 12. This Resolution shall take effect from and after its date of
adoption.
PASSED AND ADOPTED this 14th day of February, 2017.
Chair of the Board of Directors
County of Contra Costa Public Financing Authority
ATTEST:
Deputy Secretary
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4811-1349-3312.6
SECRETARY’S CERTIFICATE
The undersigned, Deputy Secretary of the Board of Directors of the County of Contra
Costa Public Financing Authority, hereby certifies as follows:
The foregoing is a full, true and correct copy of a resolution duly adopted at a regular
meeting of the Board of Directors of said Authority duly and regularly held at the regular
meeting place thereof on the 14th day of February, 2017, of which meeting all of the members of
said Board of Directors had due notice and at which a majority thereof were present; and at said
meeting said resolution was adopted by the following vote:
AYES:
NOES:
An agenda of said meeting was posted at least 96 hours before said meeting at the County
Administration Building, 651 Pine Street, Martinez, California, a location freely accessible to
members of the public, and a brief general description of said resolution appeared on said
agenda.
The foregoing resolution is a full, true and correct copy of the original resolution adopted
at said meeting; 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.
WITNESS my hand this 14th day of February, 2017.
Deputy Secretary
Body of Resolution No. 2017/56 Page 5 of 5
4848-0290-9760.4
NP DRAFT 2/7/17
TRUST AGREEMENT
by and between the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Trustee
Dated as of [March] 1, 2017
$[_________]
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects),
2017 Series A
4848-0290-9760.4
TABLE OF CONTENTS
Page
i
ARTICLE I DEFINITIONS; EQUAL SECURITY ....................................................................... 3
SECTION 1.01 Definitions....................................................................................... 3
SECTION 1.02 Equal Security ............................................................................... 12
SECTION 1.03 Interpretation ................................................................................. 13
ARTICLE II THE BONDS ........................................................................................................... 13
SECTION 2.01 Authorization of Bonds ................................................................. 13
SECTION 2.02 Terms of the Bonds ....................................................................... 13
SECTION 2.03 Form of Bonds .............................................................................. 15
SECTION 2.04 Execution of Bonds ....................................................................... 15
SECTION 2.05 Transfer and Payment of Bonds .................................................... 15
SECTION 2.06 Exchange of Bonds ....................................................................... 16
SECTION 2.07 Bond Registration Books .............................................................. 17
SECTION 2.08 Mutilated, Destroyed, Stolen or Lost Bonds; Temporary
Bonds ............................................................................................ 17
SECTION 2.09 Special Covenant as to Book-Entry Only System for Bonds ....... 18
ARTICLE III ISSUANCE OF Bonds ........................................................................................... 19
SECTION 3.01 Procedure for the Issuance of Bonds ............................................ 19
SECTION 3.02 Project Fund .................................................................................. 20
SECTION 3.03 Intentionally Left Blank ................................................................ 21
SECTION 3.04 Intentionally Left Blank ................................................................ 21
SECTION 3.05 Limitations on the Issuance of Obligations Payable From
Revenues ....................................................................................... 21
ARTICLE IV REDEMPTION OF BONDS ................................................................................. 21
SECTION 4.01 Extraordinary Redemption ............................................................ 21
SECTION 4.02 Optional Redemption .................................................................... 21
SECTION 4.03 [Mandatory Sinking Fund Redemption ........................................ 22
SECTION 4.04 Selection of Bonds for Redemption .............................................. 22
SECTION 4.05 Notice of Redemption; Cancellation; Effect of Redemption ........ 22
ARTICLE V REVENUES ............................................................................................................ 23
SECTION 5.01 Pledge of Revenues and Assignment ............................................ 23
SECTION 5.02 Receipt and Deposit of Revenues in the Revenue Fund ............... 24
SECTION 5.03 Establishment and Maintenance of Accounts for Use of
Money in the Revenue Fund ......................................................... 24
SECTION 5.04 Application of Insurance Proceeds ............................................... 25
SECTION 5.05 Deposit and Investments of Money in Accounts and Funds ........ 26
ARTICLE VI COVENANTS OF THE AUTHORITY ................................................................ 27
SECTION 6.01 Punctual Payment and Performance ............................................. 27
SECTION 6.02 Against Encumbrances.................................................................. 27
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SECTION 6.03 Rebate Fund .................................................................................. 27
SECTION 6.04 Tax Covenants .............................................................................. 27
SECTION 6.05 Accounting Records and Reports.................................................. 28
SECTION 6.06 Prosecution and Defense of Suits ................................................. 28
SECTION 6.07 Further Assurances........................................................................ 28
SECTION 6.08 Maintenance of Revenues ............................................................. 29
SECTION 6.09 Amendments to Facilities Lease and Site Lease ........................... 29
SECTION 6.10 Leasehold Estate ........................................................................... 30
SECTION 6.11 Intentionally Left Blank ................................................................ 31
ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS .................. 31
SECTION 7.01 Events of Default and Acceleration of Maturities ........................ 31
SECTION 7.02 Application of Funds Upon Acceleration ..................................... 32
SECTION 7.03 Institution of Legal Proceedings by Trustee ................................. 33
SECTION 7.04 Non-Waiver................................................................................... 33
SECTION 7.05 Remedies Not Exclusive ............................................................... 33
SECTION 7.06 [Bondholders’ Direction of Proceedings ...................................... 34
SECTION 7.07 Limitation on Bondholders’ Right to Sue ..................................... 34
ARTICLE VIII THE TRUSTEE .................................................................................................. 34
SECTION 8.01 The Trustee ................................................................................... 34
SECTION 8.02 Liability of Trustee ....................................................................... 35
SECTION 8.03 Compensation and Indemnification of Trustee ............................. 38
ARTICLE IX AMENDMENT OF THE TRUST AGREEMENT ............................................... 38
SECTION 9.01 Amendment of the Trust Agreement ............................................ 38
SECTION 9.02 Disqualified Bonds........................................................................ 39
SECTION 9.03 Endorsement or Replacement of Bonds After Amendment ......... 40
SECTION 9.04 Notice to and Consent of Bondholders ......................................... 40
SECTION 9.05 Amendment by Mutual Consent ................................................... 40
ARTICLE X DEFEASANCE ....................................................................................................... 40
SECTION 10.01 [Discharge of Bonds ..................................................................... 40
SECTION 10.02 Unclaimed Money ......................................................................... 41
ARTICLE XI MISCELLANEOUS .............................................................................................. 42
SECTION 11.01 Liability of Authority Limited to Revenues .................................. 42
SECTION 11.02 Benefits of this Trust Agreement Limited to Parties and
Third Party Beneficiaries .............................................................. 42
SECTION 11.03 Successor Is Deemed Included in All References to
Predecessor ................................................................................... 42
SECTION 11.04 Execution of Documents by Bondholders .................................... 43
SECTION 11.05 Waiver of Personal Liability ......................................................... 43
SECTION 11.06 Intentionally Left Blank ................................................................ 43
4848-0290-9760.4
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SECTION 11.07 Accounts and Funds ...................................................................... 43
SECTION 11.08 Business Day ................................................................................. 43
SECTION 11.09 Notices .......................................................................................... 43
SECTION 11.10 Article and Section Headings and References .............................. 44
SECTION 11.11 Partial Invalidity............................................................................ 44
SECTION 11.12 Governing Law ............................................................................. 44
SECTION 11.13 Execution in Several Counterparts................................................ 45
Exhibit A Form of 2017 Series A Bond ................................................................................ A-1
Exhibit B Form of Requisition – Project Fund ..................................................................... B-1
Exhibit C Form of Requisition – Costs of Issuance ............................................................. C-1
4848-0290-9760.4
THIS TRUST AGREEMENT dated as of [March] 1, 2017 (the “Trust
Agreement”), by and between the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY (the “Authority”), a joint exercise of powers authority duly organized and existing
pursuant to an agreement entitled “Amended and Restated Joint Exercise of Powers Agreement”
by and between the County of Contra Costa and the Contra Costa County Flood Control and
Water Conservation District, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking association organized and existing under the laws of the United States of
America and qualified to accept and administer the trusts hereby created, as trustee (the
“Trustee”);
W I T N E S S E T H:
WHEREAS, the Authority is a joint exercise of powers authority duly organized
and operating pursuant to Chapter 5 of Division 7 of Title 1 of the Government Code of the State
of California (hereinafter, the “Act”);
WHEREAS, Article 4 of the Act authorizes and empowers the Authority to issue
bonds to assist local agencies in financing projects and programs consisting of certain public
improvements or working capital or liability and other insurance needs whenever a local agency
determines that there are significant public benefits from so doing;
WHEREAS, the Authority has issued $122,065,000 of its Lease Revenue Bonds
(Refunding and Various Capital Projects), 2007 Series A (the “2007 Series A Bonds”), and
$110,265,000 of its Lease Revenue Bonds (Medical Center Refunding), 2007 Series B (the
“2007 Series B Bonds” and, together with the 2007 Series A Bonds, the “2007 Refunded
Bonds”) pursuant to a Trust Agreement, dated as of February 1, 1999 (as supplemented and
amended, the “1999 Trust Agreement”), by and between the Authority and Wells Fargo Bank,
National Association, as trustee (the “2007 Trustee”) successor to U.S. Bank National
Association, as trustee;
WHEREAS, the Authority has issued $25,061,614.90 of its Lease Revenue
Bonds (Capital Project Program), 2009 Series A (the “2009 Refunded Bonds,” and collectively
with 2007 Refunded Bonds, the “Refunded Bonds”) pursuant to a Trust Agreement, dated as of
June 1, 2009 (as supplemented and amended, the “2009 Trust Agreement”), by and between the
Authority and Wells Fargo Bank, National Association, as trustee (the “2009 Trustee”);
WHEREAS, the County of Contra Costa (the “County”) following a public
hearing duly noticed and held, has determined that the consummation of the transactions
contemplated in the Site Lease (as hereinafter defined), the Facilities Lease (as hereinafter
defined), the Continuing Covenant Agreement (as hereinafter defined) and this Trust Agreement
will result in significant public benefits;
WHEREAS, the Authority is empowered pursuant to the Facilities Lease and
Article 4 of the Act to cause the lease of the Facilities (as hereinafter defined), and to cause the
financing of the Project (as hereinafter defined) and the refunding of the Prior Bonds through the
issuance of its bonds;
4848-0290-9760.4
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WHEREAS, the County has determined to finance and refinance various capital
projects as set forth in Exhibit D to the Facilities Lease (as amended from time to time, the
“Capital Projects”);
WHEREAS, the Authority intends to assist the County in financing and
refinancing the Capital Projects and refunding all of the Refunded Bonds by issuing the County
of Contra Costa Public Financing Authority Lease Revenue Bonds (Refunding and Capital
Projects), 2017 Series A (the “Bonds”);
WHEREAS, the County will lease to the Authority certain capital assets of the
County (the “Facilities”) pursuant to the Site Lease;
WHEREAS, the County will lease back the Facilities from the Authority
pursuant to the terms of the Facilities Lease;
WHEREAS, the Authority has authorized the issuance of the Bonds, in an
aggregate principal amount of [___________] dollars ($[______]) to assist in financing a portion
of the Capital Projects and refunding the Refunded Bonds;
WHEREAS, to reduce the borrowing costs of the Authority and the base rental
payments of the County, and to help the financing of the Capital Projects and the refunding of
the Refunded Bonds, from which significant public benefit will be achieved, the Bonds shall be
issued pursuant to Article 4 of the Act;
WHEREAS, to provide for the authentication and delivery of the Bonds (as
hereinafter defined), to establish and declare the terms and conditions upon which the Bonds are
to be issued and to secure the full and timely payment of the principal thereof and premium, if
any, and interest thereon, the Authority has authorized the execution and delivery of this Trust
Agreement; and
WHEREAS, the Authority has determined that all acts and proceedings required
by law necessary to make the Bonds, when executed by the Authority and authenticated and
delivered by the Trustee, duly issued and the valid, binding and legal obligations of the Authority
payable in accordance with their terms, and to constitute this Trust Agreement a valid and
binding agreement of the parties hereto for the uses and purposes herein set forth, have been
done and taken, and have been in all respects duly authorized;
NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH, that in
order to secure the full and timely payment of the principal of, premium, if any, and the interest
on all Bonds at any time issued and outstanding under this Trust Agreement, according to their
tenor, and to secure the performance and observance of all the covenants and conditions therein
and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds
are to be issued and received, and in consideration of the premises and of the mutual covenants
herein contained and of the purchase and acceptance of the Bonds by the holders thereof, and for
other valuable consideration, the receipt whereof is hereby acknowledged, the Authority does
hereby covenant and agree with the Trustee, for the benefit of the respective holders from time to
time of the Bonds, as follows:
4848-0290-9760.4
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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 Supplemental Trust Agreement
and of any certificate, opinion, request or other document herein or therein mentioned have the
meanings herein specified, unless otherwise defined in such other document. Capitalized terms
not otherwise defined herein shall have the meaning assigned to such terms in the Facilities
Lease.
“Act” means the Joint Exercise of Powers Act (being Chapter 5 of Division 7 of
Title 1 of the Government Code of the State, as amended) and all laws amendatory thereof or
supplemental thereto.
“Authority” means the County of Contra Costa Public Financing Authority
created pursuant to the Act and its successors and assigns in accordance herewith (as defined in
the recitals).
“Authorized Denominations” means, with respect to the Bonds, $[100,000] or
any integral multiple thereof.
“Bond Counsel” means counsel of recognized national standing in the field of
law relating to municipal bonds, appointed by the Authority.
“Bond Year” means the twelve (12)-month period ending on June 1 of each year
to which reference is made.
“Bondholder” or “Owner” means any person who shall be the registered owner
of any Outstanding Bond.
“Bonds” means Authority’s Lease Revenue Bonds (Refunding and Capital
Projects), 2017 Series A executed, issued and delivered in accordance with Section 2.02(a) and
Section 3.01.
“Business Day” means a day that is not a Saturday, Sunday or legal holiday on
which banking institutions in the State of New York or California or in any state in which the
office of the Trustee or the Purchaser is located are authorized to remain closed or a day on
which the Federal Reserve system is closed.
“Breakage Fee” has the meaning given to such term in the Continuing Covenant
Agreement.
“Capital Projects” means the various public capital improvements and projects,
including, but not limited to the acquisition, installation, implementation and construction of the
Project, as described in the Facilities Lease, as the same may be amended from time to time by a
Certificate of the County delivered to the Trustee, to be financed by a portion of the proceeds of
the Bonds.
4848-0290-9760.4
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“Certificate of the Authority” means an instrument in writing signed by any of
the following officials of the Authority: 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 Authority for that purpose.
“Certificate of the County” means an instrument in writing signed by any of the
following County officials: the Chair of the Board of Supervisors, the County Administrator of
the County, the Treasurer-Tax Collector of the County or the County Finance Director or by any
such officials’ duly appointed designee, or by any other officer of the County duly authorized by
the Board of Supervisors of the County for that purpose.
“Code” means the Internal Revenue Code of 1986, as amended.
“Continuing Covenant Agreement” means the Continuing Covenant Agreement
dated as of March 1, 2017, among the Authority, the County and Wells Fargo Bank, National
Association, as originally executed and as it may from time to time be amended, supplemented,
modified or restated in accordance with the terms thereof.
“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 Facilities Lease, the Site Lease, the Continuing Covenant Agreement, this Trust
Agreement and the issuance and sale of the Bonds, 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, fees and charges of the
Trustee, legal fees and charges, fees and disbursements of consultants and professionals, fees and
charges for preparation, execution and safekeeping of the Bonds, title search and title insurance
fees, fees of the Authority and any other authorized cost, charge or fee in connection with the
issuance of the Bonds.
“Costs of Issuance Fund” means the fund by that name established pursuant to
Section 3.01.
“County” means the County of Contra Costa, a County organized and validly
existing under the Constitution and general laws of the State.
“Debt Service” means, for any Fiscal Year or other period, the sum of (1) the
interest accruing during such Fiscal Year or other period on all Outstanding Bonds, assuming
that all Outstanding Bonds are redeemed or paid from sinking fund payments as scheduled
(except to the extent that such interest is to be paid from the proceeds of sale of any Bonds so
long as such funded interest is in an amount equal to the gross amount necessary to pay such
interest on the Bonds and is invested in Permitted Investments which mature no later than the
related Interest Payment Date) and (2) the principal amount of all Outstanding Bonds required to
be redeemed or paid (together with the redemption premiums, if any, thereon) during such Fiscal
Year or other period; provided, that the foregoing shall be subject to adjustment and
recalculation.
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“Default Rate” has the meaning given to such term in the Continuing Covenant
Agreement.
Depository” means DTC or another recognized securities depository selected by
the Authority which maintains a book-entry system for the Bonds.
“Determination of Taxability” has the meaning given to such term in the
Continuing Covenant Agreement.
“DTC” means The Depository Trust Company, New York, New York, its
successors and their assigns or, if DTC or its successor or assign resigns from its functions as
Depository for the Bonds, any other Depository which agrees to follow the procedures required
to be followed by a Depository in connection with the Bonds and which is selected by the
Authority, following consultation with the Purchaser.
“Escrow Agent” means Wells Fargo Bank, National Association, as escrow
agent, or any successor thereto.
“Escrow Agreement” means that certain Escrow Agreement, by and between the
Escrow Agent and the Authority, dated as of [March] 1, 2017, providing for the redemption and
defeasance of the 2007 Refunded Bonds.
“Escrow Fund” means the fund of the same name defined in the Escrow
Agreement.
“Event of Default” shall have the meaning specified in Section 7.01.
“Facilities” shall mean the real property and the improvements thereon, as set
forth in Exhibit A to the Facilities Lease, or any County buildings, other improvements and
facilities added thereto or substituted therefor, or any portion thereof, in accordance with the
Facilities Lease, this Trust Agreement and the Continuing Covenant Agreement.
“Facilities Lease” means that certain lease, entitled “Facilities Lease”, by and
between the County and the Authority, dated as of [March] 1, 2017, which lease or a
memorandum thereof was recorded in the office of the County Recorder of the County of Contra
Costa on [March 3], 2017 as document No. [2017-________], as originally executed and
recorded or as it may from time to time be supplemented, mo dified or amended pursuant to the
provisions hereof and thereof.
“Fiscal Year” means the twelve (12)-month period ending on June 30 of each
year, or any other annual accounting period hereafter selected and designated by the Authority as
its Fiscal Year in accordance with applicable law.
“Government Securities” means (1) cash; (2) U.S. Treasury Certificates, Notes
and Bonds (including State and Local Government Series – “SLGS”); (3) direct obligations of
the U.S. Treasury which have been stripped by the Treasury itself, such as CATS, TIGRS and
similar securities; (4) Resolution Funding Corp. (REFCORP) strips (interest component only)
which have been stripped by request to the Federal Reserve Bank of New York in book entry
4848-0290-9760.4
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form; (5) pre-refunded municipal bonds rated the same rating as U.S. Treasury securities, or if
not rated, then pre-refunded bonds that have been pre-refunded with cash, direct U.S. or U.S.
guaranteed obligations; and (6) obligations issued by the following agencies which are backed by
the full faith and credit of the U.S.: (a) U.S. Export-Import Bank direct obligations or fully
guaranteed certificates of beneficial ownership, (b) Farmers Home Administration (FmHA)
certificates of beneficial ownership, (c) Federal Financing Bank, (d) General Services
Administration participation certificates, (e) U.S. Maritime Administration Guaranteed Title XI
financing, (f) U.S. Department of Housing and Urban Development (HUD) Project Notes, Local
Authority Bonds, New Communities Debentures – U.S. government guaranteed debentures, and
U.S. Public Housing Notes and Bonds – U.S. government guaranteed public housing notes and
bonds.
“Independent Certified Public Accountant” means any certified public
accountant or firm of such accountants duly licensed and entitled to practice and practicing as
such under the laws of the State or another state of the United States of America or a com parable
successor, appointed and paid by the Authority, and who, or each of whom –
(1) is in fact independent according to the Statement of Auditing Standards
No. 1 and not under the domination of the Authority or the County;
(2) does not have a substantial financial interest, direct or indirect, in the
operations of the Authority or the County; and
(3) is not connected with the Authority or the County as a member, officer or
employee of the Authority or the County, but who may be regularly retained to audit the
accounting records of and make reports thereon to the Authority or the County.
“Interest Payment Date” means, with respect to the Bonds, June 1 and
December 1 in each year, commencing June 1, 2017.
“Interest Payment Period” means the period from each Interest Payment Date
(or, for the first Interest Payment Period, the date of the Bonds) to and including the day
immediately preceding the next succeeding Interest Payment Date.
“Interest Rate” means _____% per annum, as adjusted pursuant to the terms
hereof.
“Moody’s” means Moody’s Investors Service 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” shall be deemed to refer to any
other nationally recognized securities rating agency selected by the County.
“Nominee” means the nominee of the Securities Depository (currently Cede &
Co.), which may be the Securities Depository, or any nominee substituted by the Securities
Depository pursuant to Section [___].
“Opinion of Counsel” means a written opinion of Bond Counsel.
4848-0290-9760.4
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“Outstanding,” when used as of any particular time with reference to Bonds,
means (subject to the provisions of Section 9.02) all Bonds except
(1) Bonds theretofore cancelled by the Trustee or surrendered to the Trustee
for cancellation;
(2) Bonds paid or deemed to have been paid within the meaning of
Section 10.01;
(3) Bonds deemed tendered but not yet presented for purchase; and
(4) Bonds in lieu of or in substitution for which other Bonds shall have been
executed, issued and delivered by the Authority pursuant hereto.
“Permitted Encumbrances” means (1) liens for general ad valorem taxes and
assessments, if any, not then delinquent, or which the County may, pursuant to the Facilities
Lease, permit to remain unpaid; (2) easements, rights of way, mineral rights, drilling rights and
other rights, reservations, covenants, conditions or restrictions which exist of record as of the
date of recordation of the Facilities Lease in the office of the County Recorder of the County of
Contra Costa and which the County certifies in writing will not materially impair the use of the
Facilities; (3) the Site Lease, as it may be amended from time to time, and the Facilities Lease, as
it may be amended from time to time; (4) this Trust Agreement, as it may be amended from time
to time; (5) any right or claim of any mechanic, laborer, materialman, supplier or vendor not
filed or perfected in the manner prescribed by law; (6) easements, rights of way, mineral rights,
drilling rights and other rights, reservations, covenants, conditions or restrictions to which the
Authority and the County consent in writing and certify to the Trustee will not materially impair
the ownership interests of the Authority or use of the Facilities by the County; and (7) subleases
and assignments of the County which, as provided in an Opinion of Counsel, will not adversely
affect the exclusion from gross income of interest on the Bonds[; provided that any such
subleases or assignments pursuant to this clause (7) shall be subject to the prior written consent
of the Purchaser].
“Permitted Investments” means any of the following:
(1) Government Securities;
(2) direct obligations of the United States of America (including obligations
issued or held in book-entry form on the books of the Department of the Treasury) or
obligations the principal of and interest on which are unconditionally guaranteed by the
United States of America;
(3) bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following federal agencies and provided such obligations are
backed by the full faith and credit of the United States of America (stripped securities are
only permitted if they have been stripped by the agency itself): (a) Farmers Home
Administration (FmHA) certificates of beneficial ownership, (b) Federal Housing
Administration (FHA) debentures, (c) General Services Administration participation
certificates, (d) Government National Mortgage Association (GNMA or “Ginnie Mae”)
4848-0290-9760.4
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guaranteed mortgage-backed bonds and guaranteed pass-through obligations
(participation certificates), (e) U.S. Maritime Administration guaranteed Title XI
financing, and (f) U.S. Department of Housing and Urban Development (HUD) Project
Notes and Local Authority Bonds;
(4) bonds, debentures, notes or other evidence of indebtedness issued or
guaranteed by any of the following non-full faith and credit U.S. government agencies
(stripped securities are only permitted if they have been stripped by the agency itself):
(a) Federal Home Loan Bank System senior debt obligations (consolidated debt
obligations), (b) Federal Home Loan Mortgage Corporation (FHLMC or “Freddie Mac”)
participation certificates (mortgage-backed securities) and senior debt obligations,
(c) Federal National Mortgage Association (FNMA or “Fannie Mae”) mortgage-backed
securities and senior debt obligations (excluded are stripped mortgage securities which
are valued greater than par on the portion of unpaid principal), (d) Resolution Funding
Corp. (REFCORP) strips (interest component only) which have been stripped by request
to the Federal Reserve Bank of New York in book entry form, and (e) Farm Credit
System Consolidated systemwide bonds and notes;
(5) money market funds registered under the Federal Investment Company
Act of 1940, the shares of which are registered under the Federal Securities Act of 1933,
and which have a rating at the time of purchase by S&P of AAAm-G, AAAm, or AA-m
and, if rated by Moody’s, rated Aaa, Aa1 or Aa2, and which funds may include funds
which the Trustee, its affiliates, or subsidiaries provide investment advisory or other
management services;
(6) certificates of deposit secured at all times by collateral described in (2)
and/or (3) above (which collateral must be held by a third party and subject to a perfected
first security interest held by the Trustee) with a maturity of one year or less and issued
by commercial banks, savings and loan associations or mutual savings banks whose short
term obligations at the time of purchase are rated “A-1” or better by S&P and “Prime-1”
by Moody’s;
(7) certificates of deposit, savings accounts, deposit accounts or money
market deposits which are fully insured by FDIC, including BIF and SAIF;
(8) investment agreements, including guaranteed investment contracts;
(9) commercial paper rated at the time of purchase “Prime-1” by Moody’s and
“A-1” or better by S&P;
(10) bonds or notes issued by any state or municipality which is rated by
Moody’s and S&P in one of the two highest long-term rating categories assigned by such
agencies at the time of purchase;
(11) federal funds or bankers acceptances with a maximum term of one year of
any bank which has an unsecured, uninsured and unguaranteed obligation rating of
“Prime-1” or “A3” or better by Moody’s and “A-1” or better by S&P at the time of
purchase;
4848-0290-9760.4
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(12) repurchase agreements that provide for the transfer of securities from a
dealer bank or securities firm (seller/borrower) to the Trustee (buyer/lender) and the
transfer of cash from the Trustee to the dealer bank or securities firm with an agreement
that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in
exchange for the securities at a specified date and that satisfy the following criteria:
(a) repurchase agreements must be between the municipal entity and
dealer banks or securities firms that are (i) on the Federal Reserve
reporting dealer list which fall under the jurisdiction of the SIPC
and which, at the time of purchase, are rated A or better by S&P
and Moody’s, or (ii) banks rated “A” or above by S&P and
Moody’s, at the time of purchase, and
(b) repurchase agreements must include the following: (i) securities
that are acceptable for transfer, including those describe in clauses
(2) and (3) above, (ii) terms of not more than 30 days,
(iii) collateral must be delivered to the Trustee (if Trustee is not
supplying the collateral) or third party acting as agent for the
Trustee (if the Trustee is supplying the collateral) before or
simultaneously with payment (perfection by possession of
certificated securities), (iv) the Trustee must have a perfected first
priority security interest in the collateral, (v) collateral must be free
and clear of third-party liens and, in the case of an SIPC broker,
must not have been acquired pursuant to a repurchase agreement or
reverse repurchase agreement, (vi) failure to maintain the requisite
collateral percentage, after a two day restoration period, requires
the Trustee to liquidate collateral, (vii) securities must be valued
weekly and marked-to-market at current market price plus accrued
interest, and (viii) the value of-collateral must be equal to 104% or,
if the securities used as collateral are FNMA or FHLMC securities,
105%, of the amount of cash transferred to the dealer bank or
security firm under the repurchase agreement plus accrued interest
and, if the value of securities held as collateral slips below such
amount, then additional cash and/or acceptable securities must be
transferred;
(13) pre-refunded municipal bonds rated the same rating as U.S. Treasury
securities or, if there is no rating, then pre-refunded bonds pre-refunded with cash, direct
U.S. or U.S. guaranteed obligations;
(14) the County of Contra Costa Investment Pool;
(15) shares of beneficial interest issued by the Investment Trust of California
(CalTRUST) pursuant to California Government Code Section 6509.7 and authorized for
local agency investment pursuant to California Government Code Section 53601(o); and
4848-0290-9760.4
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(16) the Local Agency Investment Fund of the State of California. The Trustee
may conclusively rely on the written instructions of the Authority and the County that
such investment is a Permitted Investment.
“Person” means a corporation, firm, association, partnership, trust, or other legal
entity or group of entities, including a governmental entity or any agency or political subdivision
thereof.
“Principal Office” refers to the office of the Trustee noted in Section 11.09 and
such other offices as the Trustee may designate from time to time.
“Principal Payment Date” means any date on which principal of the Bonds is
required to be paid (whether by reason of maturity, redemption or acceleration).
“Project” means the Capital Projects and the (i) improvements to the Contra
Costa Regional Medical Center, located at 2500 Alhambra Avenue in the City of Martinez; (i i)
expansion and improvements to the Pittsburg Health Center, located at 2311 Loveridge Road in
the City of Pittsburg; (iii) improvements to the Contra Costa Health Services, located at 595
Center Avenue and 597 Center Avenue in the City of Martinez; and (iv) improvements to the
Women, Infant & Children Building, located at 13601 San Pablo Avenue in the City of San
Pablo, and payment of any costs associated with financing of said projects, as set forth in Exhibit
D to the Facilities Lease as the same may be changed from time to time, in accordance with
Section 3.07 of the Facilities Lease, by the County by filing a Certificate of the County with the
Trustee.
“Project Fund” means the fund by that name established pursuant to
Section 3.02.
“Purchaser” means, initially, Wells Fargo Bank, National Association, and its
successors and assigns, and upon the receipt from time to time by the Trustee and the County of
a notice described in Section 9.13(a) of the Continuing Covenant Agreement, means the Person
designated in such notice as the Purchaser.
“Record Date” means the close of business on the fifteenth (15th) calendar day
(whether or not a Business Day) of the month preceding any Interest Payment Date.
“Redemption Date” shall mean the date fixed for redemption of any Bonds.
“Redemption Price” means, with respect to any Bond (or portion thereof), the
principal amount of such Bond (or portion) plus the applicable premium and Breakage Fee, if
any, payable upon redemption thereof pursuant to the provisions of such Bond, this Trust
Agreement and the Continuing Covenant Agreement.
“Refunded Bonds” means the County of Contra Costa Public Financing
Authority Lease Revenue Bonds (Refunding and Various Capital Projects), 2007 Series A (the
“2007 Series A Bonds”), County of Contra Costa Public Financing Authority Lease Revenue
Bonds (Medical Center Refunding), 2007 Series B (the “2007 Series B Bonds” and, together
with the 2007 Series A Bonds, the “2007 Refunded Bonds”), and County of Contra Costa Public
4848-0290-9760.4
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Financing Authority Lease Revenue Bonds (Capital Projects Program), 2009 Series A (the “2009
Series A Bonds”).
“Representation Letter” means the blanket letter of representation of the
Authority to DTC or any similar letter to a substitute depository.
“Responsible Officer” means any officer of the Trustee assigned to administer
its duties under this Trust Agreement.
“Revenue Fund” means the fund by that name created pursuant to Section 5.02
hereof.
“Revenues” means (i) all Base Rental Payments and other payments paid by the
County and received by the Authority pursuant to the Facilities Lease (but not Additional
Payments), and (ii) all interest or other income from any investment, pursuant to Section 5.05, of
any money in any fund or account (other than the Rebate Fund) established pursuant to this Trust
Agreement or the Facilities Lease.
“S&P” means S& P Global Ratings, a Standard & Poor’s Financial Services LLC
business, 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 S&P shall be
deemed to refer to any other nationally recognized securities rating agency selected by the
County.
“Securities Depository” means DTC or any successor securities depository
appointed pursuant to Section [___].
“Securities Depository Participants” means those financial institutions for
which the Securities Depository effects book entry transfers and pledges of securities deposited
with the Securities Depository, as such listing of Securities Depository Participants exists at the
time of such reference.
“Site Lease” means that certain lease, entitled “Site Lease,” by and between the
County and the Authority, dated as of [March] 1, 2017, which lease or a memorandum thereof
was recorded in the office of the County Recorder of the County of Contra Costa on [March 3],
2017 as document No. [2017-________], 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.
“State” means the State of California.
“Supplemental Trust Agreement” means any trust agreement then in full force
and effect which has been duly executed and delivered by the Authority and the Trustee
amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental
Trust Agreement is executed and delivered pursuant to the provisions hereof.
4848-0290-9760.4
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“Tax Certificate” means the Tax Certificate and Agreement delivered by the
Authority and the County at the time of the issuance and delivery of the Bonds, as the same may
be amended or supplemented in accordance with its terms.
“Taxable Date” means the date on which interest on the Bonds is first includable
in gross income of the Bondholders (including, without limitation, any previous Bondholder)
thereof as a result of an Event of Taxability as such a date is established pursuant to a
Determination of Taxability.
“Taxable Rate” means, for each day occurring on and after a Taxable Date, a rate
of interest per annum equal to the product of (i) the interest rate on the Bonds for such day, and
(ii) 1.54.
“Trust Agreement” means this Trust Agreement, dated as of [March] 1, 2017,
between the Authority and the Trustee, as originally executed and as it may from time to time be
amended or supplemented by all Supplemental Trust Agreements executed pursuant to the
provisions hereof.
“Trustee” means Wells Fargo Bank, National Association, or any other
association or corporation which may at any time be substituted in its place as provided in
Section 8.01.
“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” means an instrument in writing signed by the
County Administrator of the County or his designee, or by the County Finance Director 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 Bonds by
the Bondholders thereof, this Trust Agreement shall be deemed to be and shall constitute a
contract among the Authority, the Trustee and the Bondholders from time to time of all Bonds
authorized, executed, issued and delivered hereunder and then Outstanding to secure the full,
timely and final payment of the interest on and principal of and redemption premiums, if any, on
all Bonds which may from time to time be authorized, executed, issued and delivered hereunder,
subject to the agreements, conditions, covenants and provisions contained herein; and all
agreements and covenants set forth herein to be performed by or on behalf of the Authority shall
be for the equal and proportionate benefit, protection and security of all Bondholders of the
Bonds without distinction, preference or priority as to security or otherwise of any Bonds over
any other Bonds by reason of the number or date thereof or the time of authorization, sale,
execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided
herein or therein.
4848-0290-9760.4
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SECTION 1.03 Interpretation. Unless the context otherwise indicates, words
expressed in the singular shall include the plural and vice versa and the use of the neuter,
masculine, or feminine gender is for convenience only and shall be deemed to mean or include
the neuter, masculine or feminine gender, as appropriate. Headings of articles and sections
herein and the table of contents hereof are solely for convenience of reference, do not constitute
a part hereof and shall not affect the meaning, construction or effect hereof.
ARTICLE II
THE BONDS
SECTION 2.01 Authorization of Bonds.
(a) The Bonds are hereby created and designated “County of Contra Costa
Public Financing Authority Lease Revenue Bonds (Refunding and Capital Projects), 2017
Series A.”
(b) The Authority has reviewed all proceedings heretofore taken relative to
the authorization of the Bonds and has found, as a result of such review, and hereby finds and
determines that all acts, conditions and things required by law to exist, to have happened and to
have been performed precedent to and in the issuance of the Bonds do exist, have happened and
have been performed in due time, form and manner as required by law, and that the Authority is
now duly authorized, pursuant to each and every requirement of the Act, to issue the Bonds in
the form and manner provided herein for the purpose of providing funds to finance the Capital
Projects and refund the Refunded Bonds, and that the Bonds shall be entitled to the benefit,
protection and security of the provisions hereof.
(c) The validity of the issuance of the Bonds shall not be dependent on or
affected in any way by the proceedings taken by the Authority for the financing of the Capital
Projects or by any contracts made by the Authority or its agents in connection therewith, and
shall not be dependent upon the performance by any person, firm or corporation of his or its
obligation with respect thereto. The recital contained in the Bonds that the same are issued
pursuant to the Act and pursuant hereto shall be conclusive evidence of their validity and of the
regularity of their issuance, and all Bonds shall be incontestable from and after their issuance.
The Bonds shall be deemed to be issued, within the meaning hereof, whenever the definitive
Bonds (or any temporary Bonds exchangeable therefor) shall have been delivered to the
purchaser thereof and the proceeds of sale thereof received.
SECTION 2.02 Terms of the Bonds.
(a) The Bonds shall be issued in the aggregate principal amount of [______]
dollars ($[______]). The Bonds shall be dated the date of issuance thereof, shall be issued only
in fully registered form in Authorized Denominations (not exceeding the principal amount of
Bonds maturing at any one time), shall bear interest at the Interest Rate and shall mature in the
years and in the principal amounts subject to prior redemption as described in Article IV hereof:
4848-0290-9760.4
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County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects), 2017 Series A
Maturity Date
(June 1) Principal Amount Interest Rate
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Interest on the Bonds shall be payable commencing June 1, 2017 and
semiannually thereafter on June 1 and December 1 in each year. The Bonds shall pay interest to
the registered owner thereof from the Interest Payment Date next preceding the date of
authentication thereof, unless such date of authentication is after the Record Date for an Interest
Payment Date, in which event they shall pay interest from such Interest Payment Date, or unless
such date of authentication is on or prior to the Record Date for the first Interest Payment Date,
in which event they shall pay interest from their dated date. The amount of interest so payable
on any Interest Payment Date shall be computed on the basis of a 360-day year consisting of
twelve 30-day months.
Notwithstanding anything to the contrary in this Trust Agreement, the interest rate
on the Bonds is subject to the following adjustments:
(i) from and after any Taxable Date, the interest rate on the Bonds shall equal
the Taxable Rate; and
(ii) upon the occurrence of an Event of Default, the interest rate on the Bonds
shall equal the Default Rate.
(b) Payment of interest on the Bonds due on or before the maturity or prior
redemption thereof shall be paid by check mailed by first class mail on each Interest Payment
Date to the person in whose name the Bond is registered as of the applicable Record Date for
such Interest Payment Date at the address shown on the registration books maintained by the
Trustee pursuant to Section 2.07; provided, however, that interest on the Bonds shall be paid by
wire transfer or other means to provide immediately available funds to the Purchaser and any
Owner of at least $1,000,000 in aggregate principal amount of the Bonds according to wire
instructions for an account within the United States of America given to the Trustee in writing
for such purpose and on file as of the applicable Record Date preceding the Interest Payment
Date.
4848-0290-9760.4
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(c) Interest on any Bond shall cease to accrue (i) on the maturity date thereof,
provided that there has been irrevocably deposited with the Trustee an amount sufficient to pay
the principal amount thereof, plus interest accrued thereon to such date; or (ii) on the redemption
date thereof, provided there has been irrevocably deposited with the Trustee an amount sufficient
to pay the Redemption Price thereof, plus interest accrued thereon to such date. The Owner of
such Bond shall not be entitled to any other payment, and such Bond shall no longer be
Outstanding and entitled to the benefits of this Trust Agreement, except for the payment of the
principal amount or Redemption Price, of such Bond, as appropriate, from moneys held by the
Trustee for such payment.
(d) The principal of the Bonds shall be payable by check in lawful money of
the United States of America at the Principal Office of the Trustee. No payment of principal
shall be made on any Bond unless and until such Bond is surrender ed to the Trustee for
cancellation.
(e) The Trustee shall identify all payments (whether made by check or by
wire transfer) of interest, principal, and premium by the CUSIP number of the related Bonds.
SECTION 2.03 Form of Bonds. The Bonds and the authentication and registration
endorsement and assignment to appear thereon shall be substantially in the form set forth in
Exhibit A attached hereto and by this reference is herein incorporated.
SECTION 2.04 Execution of Bonds. The Chair or the Executive Director of the
Authority is hereby authorized and directed to execute each of the Bonds on behalf of the
Authority and the Secretary or Assistant Secretary of the Authority is hereby authorized and
directed to countersign each of the Bonds on behalf of the Authority. The signatures of such
officers may be by printed, lithographed or engraved by facsimile reproduction. In case any
officer whose signature appears on the Bonds shall cease to be such officer before the delivery of
the Bonds to the purchaser thereof, such signature shall nevertheless be valid and sufficient for
all purposes as if such officer had remained in office until such delivery of the Bonds.
Only those Bonds bearing thereon a certificate of authentication in the form
hereinbefore recited, executed manually and dated by the Trustee, shall be entitled to any benefit,
protection or security hereunder or be valid or obligatory for any purpose, and such certificate of
the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly
authorized, executed, issued and delivered hereunder and are entitled to the benefit, protection
and security hereof.
SECTION 2.05 Transfer and Payment of Bonds. (a) Any Bond may, in accordance
with its terms, be transferred in the books required to be kept pursuant to the provisions of
Section 2.07 by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such Bond for cancellation accompanied by delivery of a duly
executed written instrument of transfer in a form acceptable to the Trustee. Whenever any Bond
or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall
authenticate and deliver to the transferee a new Bond or Bonds for a like aggregate principal
amount of Authorized Denominations. The Trustee shall require the payment by the Bondholder
requesting such transfer of any tax or other governmental charge required to be paid with respect
4848-0290-9760.4
16
to such transfer as a condition precedent to the exercise of such privilege and the Trustee may
further require all information necessary to allow the Trustee to comply with any applicable tax
reporting obligations, including without limitation any reporting obligations under Internal
Revenue Code Section 6045. The Trustee may rely on the cost basis information provided to it
and shall have no responsibility to verify or ensure the accuracy of such information provided to
it.
The Authority and the Trustee may, except as otherwise provided herein, deem
and treat the registered owner of any Bond as the absolute owner of such Bond for the purpose of
receiving payment thereof and for all other purposes, whether such Bond shall be overdue or not,
and neither the Authority nor the Trustee shall be affected by any notice or knowledge to the
contrary; and payment of the interest on and principal of and redemption premium, if any, on
such Bond shall be made only to such registered owner, which payments shall be valid and
effectual to satisfy and discharge liability on such Bond to the extent of the sum or sums so paid.
The Trustee shall not be required to register the transfer of or exchange any Bonds
which has been selected for redemption in whole or in part, from and after the day of mailing of
a notice of redemption of such Bond selected for redemption in whole or in part as provided in
Section 4.04 or during the period established by the Trustee for selection of Bonds for
redemption.
[Notwithstanding anything herein to the contrary, the Bonds may be transferred
without limitation to any Affiliate of the Purchaser or to a trust or custodial arrangement
established by the Purchaser or an Affiliate of the Purchaser, each of the beneficial owners of
which are “qualified institutional buyers” as defined in Rule 144A promulgated under the
Securities Act of 1933, as amended and subject to the limitations, if any, set forth in the
Continuing Covenant Agreement. The Bonds may be transferred to another purchaser (other
than an Affiliate of the Purchaser or a trust or custodial arrangement as described in the
preceding sentence) if (i) written notice of such transfer, together with addresses and related
information with respect to such purchaser, is delivered to the Authority and the Trustee by such
transferor and (ii) such purchaser shall have delivered to the Issuer, the Trustee and the transferor
an Investor Letter in the form attached hereto as Exhibit D executed by a duly authorized officer
of such purchaser; provided that each such purchaser shall constitute a “qualified institutional
buyer” as defined in Rule 144A promulgated under the Securities Act of 1933, as amended.]
SECTION 2.06 Exchange of Bonds. Bonds may be exchanged at the Principal
Office of the Trustee for a like aggregate principal amount of Bonds of the same maturity in
Authorized Denominations. The Trustee shall require the payment by the Bondholder requesting
such exchange of any tax or other governmental charge required to be paid with respect to such
exchange as a condition precedent to the exercise of such privilege and the Trustee may further
require all information necessary to allow the Trustee to comply with any applicable tax
reporting obligations, including without limitation any reporting obligations under Internal
Revenue Code Section 6045. The Trustee may rely on the cost basis information provided to it
and shall have no responsibility to verify or ensure the accuracy of such information provided to
it. The Trustee shall not be required to exchange any Bond which has been selected for
redemption in whole or in part, from and after the day of mailing of a notice o f redemption of
4848-0290-9760.4
17
such Bond selected for redemption in whole or in part as provided in Section 4.04 or during the
period established by the Trustee for selection of Bonds for redemption.
SECTION 2.07 Bond Registration Books. The Trustee will keep at its office
sufficient books for the registration and transfer of the Bonds, which during normal business
hours shall be open to inspection by the Authority upon reasonable notice, and upon presentation
for such purpose the Trustee shall, under such reasonable regulations as it may prescribe, register
or transfer the Bonds in such books as hereinabove provided.
SECTION 2.08 Mutilated, Destroyed, Stolen or Lost Bonds; Temporary Bonds. If
any Bond shall become mutilated, the Trustee, at the expense of the Bondholder, shall thereupon
authenticate and deliver a new Bond of like tenor and amount in exchange and substitution for
the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every
mutilated Bond so surrendered to the Trustee shall be cancelled.
If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or
theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and
indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the
Bondholder, shall thereupon authenticate and deliver a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen.
The Trustee may require payment of a reasonable sum for each new Bond issued
under this Section 2.08 and of the expenses which may be incurred by the Authority and the
Trustee in the premises. Any Bond issued under the provisions of this Section in lieu of any
Bond alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the
benefits of this Trust Agreement with all other Bonds secured by this Trust Agreement. Neither
the Authority nor the Trustee shall be required to treat both the original Bond and any
replacement Bond as being Outstanding for the purpose of determining the principal amount of
Bonds which may be issued hereunder or for the purpose of determining any percentage of
Bonds Outstanding hereunder, but both the original and replacement Bond shall be treated as one
and the same.
The Bonds issued under this Trust Agreement may be initially issued in
temporary form exchangeable for definitive Bonds when ready for delivery. The temporary
Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be
determined by the Authority, shall be in fully registered form and may contain such reference to
any of the provisions of this Trust Agreement as may be appropriate. Every temporary Bond
shall be executed and authenticated as authorized by the Authority, in accordance with the terms
of the Act. If the Authority issues temporary Bonds it will execute and furnish definitive Bonds
without delay and thereupon the temporary Bonds may be surrendered, for cancellation, in
exchange therefor at the Principal Office of the Trustee, and the Trustee shall deliver in exchange
for such temporary Bonds an equal aggregate principal amount of definitive Bonds of
Authorized Denominations. Until so exchanged, the temporary Bonds shall be entitled to the
same benefits under this Trust Agreement as definitive Bonds delivered hereunder.
4848-0290-9760.4
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SECTION 2.09 Special Covenant as to Book-Entry Only System for Bonds.
(a) Except as otherwise provided in subsections (b) and (c) of this
Section 2.09, all of the Bonds initially issued shall be registered in the name of Cede & Co., as
nominee for DTC, or such other nominee as DTC shall request pursuant to the Representation
Letter. Payment of the interest on any Bond registered in the name of Cede & Co. shall be made
on each Interest Payment Date for such Bonds to the account, in the manner and at the address
indicated in or pursuant to the Representation Letter.
(b) The Bonds initially shall be issued in the form of a single authenticated
fully registered bond for each stated maturity of such Bonds, representing the aggregate principal
amount of the Bonds of such maturity. Upon initial issuance, the ownership of all such Bonds
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 s hall request
pursuant to the Representation Letter. The Trustee, the Authority and any paying agent may
treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name
for the purposes of payment of the principal or redemption price of and interest on such Bonds,
selecting the Bonds or portions thereof to be redeemed, giving any notice permitted or required
to be given to Bondholders hereunder, registering the transfer of Bonds, obtaining any consent or
other action to be taken by Bondholders of the Bonds and for all other purposes whatsoever; and
neither the Trustee nor the Authority or any paying agent shall be affected by any notice to the
contrary. Neither the Trustee nor the Authority or any paying agent shall have any r esponsibility
or obligation to any “Participant” (which shall mean, for purposes of this Section 2.09, 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 Bonds under or through DTC or any Participant, or any other person which is not shown on
the registration records as being a Bondholder, 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 on the Bonds, (iii) any notice
which is permitted or required to be given to Bondholders of Bonds hereunder, (iv) the selection
by DTC or any Participant of any person to receive payment in the event of a partial redemption
of the Bonds, or (v) any consent given or other action taken by DTC as Bondholder of Bonds.
The Trustee shall pay all principal of and premium, if any, and interest on the Bonds only at the
times, to the accounts, at the addresses and otherwise in accordance with the Representation
Letter, and all such payments shall be valid and effective to satisfy fully and discharge the
Authority’s obligations with respect to the payment of the principal of and premium, if any, and
interest on the Bonds to the extent of the sum or sums so paid. 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 Bonds will be transferable to such new nominee in
accordance with subsection (e) of this Section 2.09.
(c) In the event that the Authority determines that the Bonds should not be
maintained in book-entry form, the Trustee shall, upon the written instruction of the Authority,
so notify DTC, whereupon DTC shall notify the Participants of the availability through DTC of
bond certificates. In such event, the Bonds will be transferable in accordance with subsection (e)
of this Section 2.09. DTC may determine to discontinue providing its services with respect to
the Bonds or a portion thereof, at any time by giving written notice of such discontinuance to the
4848-0290-9760.4
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Authority or the Trustee and discharging its responsibilities with respect thereto under applicable
law. In such event, the Bonds will be transferable in accordance with subsection (e) of this
Section 2.09. If at any time DTC shall no longer be registered or in good standing under the
Securities Exchange Act or other applicable statute or regulation and a successor securities
depository is not appointed by the Authority within 90 days after the Authority receives notice or
becomes aware of such condition, as the case may be, then this Section 2.09 shall no longer be
applicable and the Authority shall execute and the Trustee shall authenticate and deliver
certificates representing the Bonds as provided below. Whenever DTC requests the Authority
and the Trustee to do so, the Trustee and the Authority will cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities depository to maintain
custody of all certificates evidencing the Bonds then Outstanding. In such event, the Bonds will
be transferable to such securities depository in accordance with subsection (e) of this
Section 2.09, and thereafter, all references 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 Bonds Outstanding are registered in the name of any nominee of DTC, all
payments with respect to the principal of and premium, if any, and interest on each such Bond
and all notices with respect to each such Bond shall be made and given, respectively, to DTC as
provided in or pursuant to the Representation Letter.
(e) In the event that any transfer or exchange of Bonds is authorized under
subsection (b) or (c) of this Section 2.09, such transfer or exchange shall be accomplished upon
receipt by the Trustee from the registered owner thereof of the Bonds to be transferred or
exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance
with the applicable provisions of Sections 2.05 and 2.06. In the event Bond certificates are
issued to Bondholders other than Cede & Co., its successor as nominee for DTC as holder of all
the Bonds, another securities depository as holder of all the Bonds, or the nominee of such
successor securities depository, the provisions of Sections 2.05 and 2.06 shall also apply to,
among other things, the registration, exchange and transfer of the Bonds and the method of
payment of principal of, premium, if any, and interest on the Bonds.
ARTICLE III
ISSUANCE OF BONDS
SECTION 3.01 Procedure for the Issuance of Bonds. At any time after the sale of
the Bonds in accordance with the Act, the Authority shall execute the Bonds for issuance
hereunder and shall deliver them to the Trustee, and thereupon the Bonds shall be authenticated
and delivered by the Trustee to the purchaser thereof upon the Written Request of the Authority
and upon receipt of payment therefor from the purchaser thereof. Upon receipt of payment for
the Bonds from the purchaser thereof, the Trustee shall, unless otherwise instructed by the
Authority, apply the proceeds received from such sale to the following respective parties or to
the following respective accounts, in the following order of priority:
(i) transfer the amount of $[______] to the Escrow Agent for deposit
to the Escrow Fund to refund the 2007 Refunded Bonds;
4848-0290-9760.4
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(ii) transfer the amount of $[______] to the 2009 Trustee for deposit in
the Revenue Fund held under the 2009 Trust Agreement to refund the 2009
Refunded Bonds;
(iii) deposit the sum of $[______] to the Costs of Issuance Fund, which
fund is hereby created and which fund the Trustee hereby covenants and agrees to
maintain. All money in the Costs of Issuance Fund shall be used and withdrawn
by the Trustee to pay the Costs of Issuance of the Bonds upon receipt of a Written
Request of the Authority, in substantially the form attached hereto as Exhibit C,
filed with the Trustee, each of which shall be sequentially numbered and shall
state the person(s) to whom payment is to be made, the amount(s) to be paid, the
purpose(s) for which the obligation(s) was incurred and that such payment is a
proper charge against said fund. On [December 1, 2017], or upon the earlier
Written Request of the Authority, any remaining balance in the Costs of Issuance
Fund shall be transferred to the 2017 Series A Project Account within the Project
Fund and the Costs of Issuance Fund shall be closed; and
(iv) deposit the amount of $[______] in the 2017 Series A Project
Account within the Project Fund.
SECTION 3.02 Project Fund. The Trustee hereby agrees to establish and maintain
so long as any Bonds are Outstanding the Project Fund (the initial payment into which is
provided for in Section 3.01). The moneys in the Project Fund shall be disbursed by the Trustee
upon the Written Request of the County in substantially the form of Exhibit B hereto filed with
the Trustee, for the payment of Project Costs relating to the Project.
Before any payment is made from the Project Fund, there shall 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 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.
Each such Written Request shall be sufficient evidence to the Trustee and shall
state:
(a) that obligations in the stated amounts have been incurred by the
County, and that each item thereof is a proper charge against the Project Fund and has not
been the subject of a prior requisition; and
(b) that there has not been filed with or served upon the County notice
of any lien, right to lien or attachment upon, or claim affecting the right to receive
payment of, any of the moneys payable to any of the persons named in such Written
Request, which has not been released or will not be released simultaneously with the
4848-0290-9760.4
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payment of such obligation, other than materialmen’s or mechanics’ liens accruing by
mere operation of law.
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.
All interest earnings on amounts on deposit in the Project Fund shall be deposited
therein. Upon the completion of the Project, any amounts remaining in the 2017 Series A Project
Account shall be expended on Capital Projects as specified by the County, subject to the receipt
by the Authority of an Opinion of Counsel that such expenditures will not cause the interest on
the Bonds to be included in gross income for purposes of federal income taxation.
SECTION 3.03 Intentionally Left Blank.
SECTION 3.04 Intentionally Left Blank.
SECTION 3.05 Limitations on the Issuance of Obligations Payable From
Revenues. The Authority will not, so long as any of the Bonds are Outstanding, issue any
obligations or securities, however denominated, payable in whole or in part from Revenues.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01 Extraordinary Redemption. The Bonds are subject to redemption
by the Authority on any date prior to their respective stated maturities, upon notice as hereinafter
provided, as a whole or in part by lot within each stated maturity in integral multiples of
Authorized Denominations, from prepa yments made by the County pursuant to Section 7.02(a)
of the Facilities Lease, at a redemption price equal to the sum of the principal amount thereof,
without premium, plus accrued interest thereon to the Redemption Date. Whenever less than all
of the Outstanding Bonds are to be redeemed on any one date, the Trustee shall select, in
accordance with written directions from the Authority, the Bonds to be redeemed in part from the
Outstanding Bonds so that the aggregate annual principal amount of and interest on Bonds which
shall be payable after such Redemption Date shall be as nearly proportional as practicable to the
aggregate annual principal amount of and interest on Bonds Outstanding prior to such
Redemption Date [as nearly as practicable on a pro rata basis in amounts of $5,000 or integral
multiples thereof, as determined by the Trustee, notice of which determination shall be given by
the Trustee to the Authority and the Purchaser].
SECTION 4.02 Optional Redemption. [The Bonds shall be subject to optional
redemption prior to their stated maturity at the option of the Authority, as the direction of the
County, in whole or in part, on any Business Day (in such amounts as may be specified by the
Authority), by lot, at the principal amount thereof, provided that any such option redemption
shall be subject to the payment of a Breakage Fee, if any.]
4848-0290-9760.4
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SECTION 4.03 [Mandatory Sinking Fund Redemption. The Bonds shall be
subject to mandatory redemption in the amounts and on the dates set forth in Section 2 .02(a)
hereof.]
SECTION 4.04 Selection of Bonds for Redemption. The Authority shall designate
which maturities of Bonds and the principal amount of Bonds which are to be redeemed. If less
than all Outstanding Bonds maturing by their terms on any one date are to be redeemed at any
one time, the Trustee shall select the Bonds of such maturity date to be redeemed by lot and shall
promptly notify the Authority in writing of the numbers of the Bonds so selected for redemption .
For purposes of such selection, Bonds shall be deemed to be composed of multiples of minimum
Authorized Denominations and any such multiple may be separately redeemed. The Authority
may designate which sinking account payments are allocated to a sinking fund redemption.
SECTION 4.05 Notice of Redemption; Cancellation; Effect of Redemption.
Notice of redemption shall be mailed by first-class mail by the Trustee, not less than [twenty
(20)] nor more than sixty (60) days prior to the redemption date to the respective Bondholders of
the Bonds designated for redemption at their addresses appearing on the registration books of the
Trustee. Each notice of redemption shall state the date of such notice, the date of issue of the
Bonds, the redemption date, the Redemption Price, the place or places of redemption (including
the name and appropriate address of the Trustee), the CUSIP number (if any) of the maturity date
or maturities, and, if less than all of any such maturity is to be redeemed, the distinctive
certificate numbers of the Bonds of such maturity, to be redeemed and, in the case of Bonds to be
redeemed in part only, the respective portions of the principal amount thereof to be redeemed.
Each such notice shall also state that on said date there will become due and payable on each of
said Bonds the Redemption Price thereof, together with interest accrued thereon to the
redemption date, and that from and after such redemption date interest thereon shall cease to
accrue, and shall require that such Bonds be then surrendered at the address of the Trustee
specified in the redemption notice. Failure to receive such notice shall not invalidate any of the
proceedings taken in connection with such redemption.
The Trustee may give a conditional notice of redemption prior to the receipt of all
funds or satisfaction of all conditions necessary to effect the r edemption, provided that
redemption shall not occur unless and until all conditions have been satisfied and the Trustee has
on deposit and available or, if applicable, has received, all of the funds necessary to effect the
redemption; otherwise, such redemption shall be cancelled by the Trustee and the Trustee shall
mail notice of such cancellation to the recipients of the notice of redemption being cancelled.
If notice of redemption has been duly given as aforesaid and money for the
payment of the Redemption Price of the Bonds called for redemption plus accrued interest to the
redemption date is held by the Trustee, then on the redemption date designated in such notice
Bonds so called for redemption shall become due and payable, and from and after the date so
designated interest on such Bonds shall cease to accrue, and the Bondholders of such Bonds shall
have no rights in respect thereof except to receive payment of the Redemption Price thereof plus
accrued interest to the Redemption Date.
4848-0290-9760.4
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All Bonds redeemed pursuant to the provisions of this Article shall be cancelled
by the Trustee and disposed of in a manner deemed appropriate by the Trustee and shall not be
reissued.
ARTICLE V
REVENUES
SECTION 5.01 Pledge of Revenues and Assignment.
(a) All Revenues, any other amounts (including proceeds of the sale of the
Bonds) held by the Trustee in any fund or account established hereunder (other than amounts on
deposit in the Rebate Fund created pursuant to Section 6.03) and any other amounts (excluding
Additional Payments) received by the Authority in respect of the Facilities are hereby
irrevocably pledged and assigned to the payment of the interest and premium, if any, on and
principal of the Bonds as provided herein, and the Revenues and other amounts pledged
hereunder shall not be used for any other purpose while any of the Bonds remain Outstanding;
provided, however, that out of the Revenues and other moneys there may be applied such sums
for such purposes as are permitted hereunder. This pledge shall constitute a pledge of and charge
and first lien upon the Revenues, all other amounts pledged hereunder and all other moneys on
deposit in the funds and accounts established hereunder (excluding amounts on deposit in the
Rebate Fund created pursuant to Section 6.03) for the payment of the interest on and principal of
the Bonds in accordance with the terms hereof and thereof.
(b) At least three (3) Business Days prior to each date on which a Base Rental
Payment is due, pursuant to the Facilities Lease, the Trustee shall notify the County of the
amount of the installment of Base Rental Payment needed to pay the principal of and interest on
the Bonds due on the next following Interest Payment Date. Any failure to send such notice
shall not affect the County’s obligation to make timely payments of installments of Base Rental
Payments.
(c) [The Authority hereby transfers in trust, grants a security interest in and
assigns to the Trustee, for the benefit of the Bondholders, all of the Revenues and other assets
pledged in subsection (a) of this Section and all of the right, title and interest of the Authority in
the Facilities Lease (except for (i) the right to receive any Additional Payments) to the extent
payable to the Authority under the Facilities Lease, (ii) an y rights of the Authority to
indemnification and rights of inspection and consent, and (iii) the obligations of the County to
make deposits pursuant to the Tax Certificate). The Trustee shall be entitled to and shall collect
and receive all of the Revenues, and any Revenues collected or received by the Authority shall
be deemed to be held, and to have been collected or received by the Authority as the agent of the
Trustee and shall forthwith be paid by the Authority to the Trustee. Subject to the provisio ns of
Section [____] with respect to the control of remedial proceedings, the Trustee shall also be
entitled to and shall take all steps, actions and proceedings reasonably necessary in its judgment
to enforce, either jointly with the Authority or separately, all of the rights of the Authority that
have been assigned to the Trustee and all of the obligations of the County under the Facilities
Lease other than those items excepted in the parenthetical contained in the first sentence of this
4848-0290-9760.4
24
subsection. All Revenues deposited with the Trustee shall be held, disbursed, allocated and
applied by the Trustee only as provided in the Trust Agreement.]
(d) If on the second Business Day prior to the day of any month in which a
Base Rental is requirement to be made, the Trustee has not received the full amount of such Base
Rental Payments, the Trustee shall immediately notify the County and the Purchaser of such
insufficiency by Electronic Means and confirm such notification as soon as possible thereafter by
written notice.
SECTION 5.02 Receipt and Deposit of Revenues in the Revenue Fund. In order to
carry out and effectuate the pledge, assignment, charge and lien contained herein, the Authority
agrees and covenants that all Revenues and all other amounts pledged hereunder when and as
received shall be received by the Authority in trust hereunder for the benefit of the Bondholders
and shall be transferred when and as received by the Authority to the Trustee for deposit in the
Revenue Fund (the “Revenue Fund”), which fund is hereby created and which fund the Trustee
hereby agrees and covenants to maintain in trust for Bondholders so long as any Bonds shall be
Outstanding hereunder. The County has been directed to pay all Base Rental Payments directly
to the Trustee. If the Authority receives any Base Rental Payments, it shall hold the same in trust
as agent of the Trustee and shall immediately transfer such Base Rental Payments to the Trustee.
All Revenues and all other amounts pledged and assigned hereunder shall be accounted for
through and held in trust in the Revenue Fund, and the Trustee shall have no beneficial right or
interest in any of the Revenues except only as herein provided. All Revenues and all other
amounts pledged and assigned hereunder, whether received by the Authorit y in trust or deposited
with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely
to the purposes and uses hereinafter in this Article set forth, and shall be accounted for separately
and apart from all other accounts, funds, money or other resources of the Trustee.
SECTION 5.03 Establishment and Maintenance of Accounts for Use of Money in
the Revenue Fund.
(a) Revenue Fund. Subject to Section 6.03, all money in the Revenue Fund
shall be set aside by the Trustee in the following respective special accounts or funds within the
Revenue Fund (each of which is hereby created and each of which the Trustee hereby covenants
and agrees to cause to be maintained) in the following order of priority:
(1) Interest Account, and
(2) Principal Account.
All money in each of such accounts shall be held in trust by the Trustee and shall be applied,
used and withdrawn only for the purposes hereinafter authorized in this Section.
(b) Interest Account. On or before each Interest Payment Date, the Trustee
shall set aside from the Revenue Fund and deposit in the Interest Account that amount of money
which is equal to the amount of interest becoming due and payable on all Outstanding Bonds on
such Interest Payment Date.
4848-0290-9760.4
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No deposit need be made in the Interest Account if the amount contained therein
and available to pay interest on the Bonds is at least equal to the aggregate amount of interest
becoming due and payable on all Outstanding Bonds on such Interest Payment Date.
All money in the Interest Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the interest on the Bonds as it shall become due and payable
(including accrued interest on any Bonds purchased or redeemed prior to maturity).
(c) Principal Account. On or before each June 1, commencing June 1, [2017],
the Trustee shall set aside from the Revenue Fund and deposit in the Principal Account an
amount of money equal to the amount of all sinking fund payments required to be made on such
June 1 into the sinking fund account for all Outstanding Bonds. On or before each Redemption
Date, the Trustee shall set aside from the Revenue Fund and deposit in the Principal Account an
amount of money equal to the Redemption Price required to be paid on such Redemption Date.
No deposit need be made in the Principal Account if the amount contained therein
and available to pay principal of the Bonds is at least equal to the aggregate amount of all sinking
fund payments required to be made on such June 1 for all Outstanding Bonds.
The Trustee shall establish and maintain within the Principal Account a separate
subaccount for the Bonds, designated as the “2017A Sinking Account” (the “Sinking Account”).
With respect to each Sinking Account, on each mandatory sinking account payment date
established for such Sinking Account, the Trustee shall apply the mandatory sinking account
payment required on that date to the redemption (or payment at maturity, as the case may be) of
the Bonds upon the notice and in the manner provided in Article IV.
All money in the Principal Account shall be used and withdrawn by the Trustee
solely for the purpose of paying the principal or Redemption Price of the Bonds as it shall
become due and payable, whether at maturity or redemption, except that any money in the
Sinking Account shall be used and withdrawn by the Trustee only to redeem or to pay Term
Bonds for which such Sinking Account was created Bonds pursuant to Section 4.03 hereof.
SECTION 5.04 Application of Insurance Proceeds. In the event of any damage to
or destruction of any part of the Facilities covered by insurance, the Authority, shall [subject to
Section 3.08 of the Facilities Lease,] cause the proceeds of such insurance to be utilized for the
repair, reconstruction or replacement of the damaged or destro yed portion of the Facilities, and
the Trustee shall hold said proceeds in a fund established by the Trustee for such purpose
separate and apart from all other funds designated the “Insurance and Condemnation Fund”, to
the end that such proceeds shall be applied to the repair, reconstruction or replacement of the
Facilities to at least the same good order, repair and condition as it was in prior to the damage or
destruction, insofar as the same may be accomplished by the use of said proceeds. The Authority
shall file a Certificate of the Authority with the Trustee that sufficient funds from insurance
proceeds or from any funds legally available to the County, or from any combination thereof, are
available in the event it elects to repair, reconstruct or replace the Facilities. The Trustee shall
invest said proceeds in Permitted Investments pursuant to the Written Request of the Authority
under the Facilities Lease, and withdrawals of said proceeds shall be made from time to time
upon the filing with the Trustee of a Written Request of the Authority, stating that the Authority
4848-0290-9760.4
26
has expended moneys or incurred liabilities in an amount equal to the amount therein stated for
the purpose of the repair, reconstruction or replacement of the Facilities, and specifyin g the items
for which such moneys were expended, or such liabilities were incurred, in reasonable detail.
Any balance of such proceeds not required for such repair, reconstruction or replacement and the
proceeds of use and occupancy insurance shall be paid to the Trustee as Base Rental Payments
and applied in the manner provided by Section 5.01. Alternatively, the Authority, if the proceeds
of such insurance together with any other moneys then available for such purpose are sufficient
to prepay all, in case of damage or destruction in whole of the Facilities, or that portion, in the
case of partial damage or destruction of the Facilities, of the Base Rental Payments, Additional
Payments and all other amounts relating to the damaged or destroyed portion of the Facilities,
may elect [subject to Section 3.08 of the Facilities Lease,] not to repair, reconstruct or replace the
damaged or destroyed portion of the Facilities and thereupon shall cause said proceeds to be used
for the redemption of Outstanding Bonds pursuant to the applicable provisions of Section 4.01.
The Authority shall not apply the proceeds of insurance as set forth in this Section 5.04 to
redeem the Bonds in part due to damage or destruction of a portion of the Facilities unless the
Base Rental Payments on the undamaged portion of the Facilities will be sufficient to pay the
scheduled principal and interest on the Bonds remaining unpaid after such redemption.
SECTION 5.05 Deposit and Investments of Money in Accounts and Funds.
Subject to Section 6.03, all money held by the Trustee in any of the accounts or funds established
pursuant hereto shall be invested in Permitted Investments at the Written Request of the
Authority or, if no instructions are received, in the Wells Fargo Government Money Market
Fund. Such investments shall, as nearly as practicable, mature on or before the dates on which
such money is anticipated to be needed for disbursement hereunder. For purposes of this
restriction, Permitted Investments containing a repurchase option or put option by the investor
shall be treated as having a maturity of no longer than such option. Unless otherwise instructed
by the Authority, all interest or profits received on any money so invested shall be deposited in
the Revenue Fund; provided that, with respect to the Project Fund, earnings on amounts in such
fund shall be credited to such fund until completion of the respective Projects. The Trustee and
its affiliates may act as principal, agent, sponsor or advisor with respect to any investments. The
Trustee shall not be liable for any losses on investments made in accordance with the terms and
provisions of this Trust Agreement.
Investments purchased with funds on deposit in the Revenue Fund shall mature
not later than the payment date or redemption date, as appropriate, immediately succeeding the
investment.
Subject to Section 6.03, investments in any and all funds and accounts except for
the Rebate Fund may be commingled for purposes of making, holding and disposing of
investments, notwithstanding provisions herein for transfer to or holding in particular funds and
accounts amounts received or held by the Trustee hereunder, provided that the Trustee shall at all
times account for such investments strictly in accordance with the funds and accounts to which
they are credited and otherwise as provided in this Trust Agreement.
The Authority acknowledges that to the extent regulations of the Comptroller of
the Currency or other applicable regulatory entity grant the Authority the right to receive
brokerage confirmations of security transactions as they occur, the Authority specifically waives
4848-0290-9760.4
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receipt of such confirmations to the extent permitted by law. The Trustee will furnish the
Authority periodic cash transaction statements which include detail for all investment
transactions made by the Trustee hereunder.
ARTICLE VI
COVENANTS OF THE AUTHORITY
SECTION 6.01 Punctual Payment and Performance. The Authority will
punctually pay out of the Revenues the interest on and principal of and redemption premiums, if
any, to become due on every Bond issued hereunder in strict conformity with the terms hereof
and of the Bonds, and will faithfully observe and perform all the agreements and covenants to be
observed or performed by the Authority contained herein and in the Bonds.
SECTION 6.02 Against Encumbrances. The Authority will not make any pledge
or assignment of or place any charge or lien upon the Revenues except as provided in
Section 5.01, and will not issue any bonds, notes or obligations payable from the Revenues or
secured by a pledge of or charge or lien upon the Revenues except as provided in Section 3.04.
SECTION 6.03 Rebate Fund.
(a) In addition to the accounts created pursuant to Section 5.03, the Trustee
shall establish and maintain a fund separate from any other fund or account established and
maintained hereunder designated as the Rebate Fund. There shall be deposited in the Rebate
Fund such amounts as are required to be deposited therein pursuant to the Tax Certificate. All
money at any time deposited in the 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 p ayment
to the United States of America. Notwithstanding the provisions of Sections 5.01, 5.02, 5.05,
9.01 and 10.01 relating to the pledge of Revenues, the allocation of money in the Revenue Fund,
the investments of money in any fund or account, the application of funds upon acceleration and
the defeasance of Outstanding Bonds, all amounts required to be deposited into or on deposit in
the Rebate Fund shall be governed exclusively by this Section 6.03 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 the written directions of the Authority, and shall have
no liability or responsibility to enforce compliance by the Authority with the terms of t he Tax
Certificate.
(b) Any funds remaining in the Rebate Fund with respect to the Bonds after
redemption and payment of all Bonds and all other amounts due hereunder or under the Facilities
Lease, or provision made therefor satisfactory to the Trustee, including accrued interest and
payment of any applicable fees and expenses of the Trustee and satisfaction of the Rebate
Requirement (as defined in the Tax Certificate), shall be withdrawn by the Trustee and remitted
to or upon the Written Request of the Authority.
SECTION 6.04 Tax Covenants.
(a) The Authority hereby covenants that it shall not take any action or
inaction, or fail to take any action, or permit any action to be taken on behalf of the Authority or
4848-0290-9760.4
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cause or permit any circumstances within its control to arise or continue, if such action or
inaction would cause any of the Bonds to be treated as an obligation not described in
Section 103(a) of the Code. This covenant shall survive the payment in full of the Bonds.
(b) In the event that at any time the Authority is of the opinion that for
purposes of this Section it is necessary to restrict or to limit the yield on the investment of any
moneys held by the Trustee under this Trust Agreement, the Authority shall so instruct the
Trustee in a Request of the Authority accompanied by a supporting Opinion of Bond Counsel,
and the Trustee shall take such action as may be necessary in accordance with such instructions.
(c) Notwithstanding any provisions of this Section, if the Authority shall
provide to the Trustee an Opinion of Counsel that any specified action required under this
Section or the Tax Certificate is no longer required or that some further or different action is
required to maintain the exclusion from federal income tax of interest on the Bonds, the
Authority and the Trustee may conclusively rely on such opinion in complying with the
requirements of this Section and the Tax Certificate, and, notwithstanding Article IX hereof, the
covenants hereunder shall be deemed to be modified to that extent.
SECTION 6.05 Accounting Records and Reports. The Trustee will keep or cause
to be kept proper books of record and accounts in which complete and correct entries shall be
made of all transactions relating to the receipts, disbursements, allocation and application of the
Revenues, and such books shall be available for inspection by the Authority at reasonable hours
and under reasonable conditions. The Trustee shall provide to the Authority monthly statements
covering the funds and accounts held pursuant to the Trust Agreement. Not more than one
hundred eighty (180) days after the close of each Fiscal Year, the Trustee shall furnish or cause
to be furnished to the Authority a complete financial statement (which may be in the form of the
Trustee’s customary account statements) covering receipts, disbursements, allocation and
application of Revenues for such Fiscal Year. The Authority shall keep or cause to be kept such
information as is required under the Tax Certificate.
SECTION 6.06 Prosecution and Defense of Suits. The Authority will defend
against every suit, action or proceeding at any time brought against the Trustee upon any claim
to the extent arising out of the receipt, application or disbursement of any of the Revenues or to
the extent involving the failure of the Authority to fulfill its obligations hereunder; provided, that
the Trustee or any affected Bondholder at its election may appear in and defend any such suit,
action or proceeding. The Authority will indemnify and hold harmless the Trustee against any
and all liability claimed or asserted by any person to the extent arising out of such failure by the
Authority, and will indemnify and hold harmless the Trustee against any reasonable attorney’s
fees or other reasonable expenses which it may incur in connection with any litigation to which it
may become a party by reason of its actions hereunder, except for any loss, cost, damage or
expense resulting from the negligence or willful misconduct by the Trustee. Notwithstanding
any contrary provision hereof, this covenant shall remain in full force and effect even though all
Bonds secured hereby may have been fully paid and satisfied.
SECTION 6.07 Further Assurances. The Authority 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
4848-0290-9760.4
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necessary or reasonably required in order to further and more fully vest in the Bondholders all
rights, interests, powers, benefits, privileges and advantages conferred or intended to be
conferred upon them hereby.
SECTION 6.08 Maintenance of Revenues. The Authority will promptly collect all
rents and charges due for the occupancy or use of the Facilities as the same become due, and will
promptly and vigorously enforce its rights against any tenant or other person who does not pay
such rents or charges as they become due. Pursuant to Section 5.02 and the Facilities Lease, the
County is to pay all Base Rental Payments directly to the Trustee. The Authority will at all times
maintain and vigorously enforce all of its rights under the Facilities Lease.
SECTION 6.09 Amendments to Facilities Lease and Site Lease.
(a) The Authority shall not supplement, amend, modify or terminate any of
the terms of the Facilities Lease, or consent to any such supplement, amendment, modification or
termination, without the prior written consent of the Trustee and the Purchaser. The Trustee
shall give such written consent if such supplement, amendment, modification or termination
(a) will not materially adversely affect the interests of the Bondholders or result in any material
impairment of the security hereby given for the payment of the Bonds (provided that such
supplement, amendment or modification shall not be deemed to have such adverse effect or to
cause such material impairment solely by reason of addition, substitution or release of real
property pursuant to Section 2.03 of the Facilities Lease), (b) is to add to the agreements,
conditions, covenants and terms required to be observed or performed thereunder by any party
thereto, or to surrender any right or power therein reserved to the Authority or the County, (c) is
to cure, correct or supplement any ambiguous or defective provision contained therein, (d) is to
accommodate any addition, substitution or release of property in accordance with Section 2.03 of
the Facilities Lease or prepayment in accordance with Section 7.02 of the Facilities Lease, (e) is
to modify the legal description of the Facilities 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 or preferred to be included therein, or substituted for the Facilities pursuant to
the provisions of Section 2.03 of the Facilities Lease, or deleted due to prepayment pursuant to
the provisions of Section 7.02 of the Facilities Lease, or (f) if the Trustee first obtains the written
consent of the Purchaser to such supplement, amendment, modification or termination; provided,
that no such supplement, amendment, modification or termination shall reduce the amount of
Base Rental Payments to be made to the Authority or the Trustee by the County pursuant to the
Facilities Lease to an amount less than the scheduled principal and interest payments on the
Outstanding Bonds, or extend the time for making such payments, or permit the creation of any
lien prior to or on a parity with the lien created by this Trust Agreement on the Base Rental
Payments (except as expressly provided in the Facilities Lease), in each case wi thout the written
consent of all of the Bondholders of the Bonds then Outstanding.
(b) The Authority shall not supplement, amend, modify or terminate any of
the terms of the Site Lease, or consent to any such supplement, amendment, modification or
termination, without the prior written consent of the Trustee and the Purchaser. The Trustee
shall give such written consent if such supplement, amendment, modification or termination
(a) will not materially adversely affect the interests of the Bondholders or result in any material
impairment of the security hereby given for the payment of the Bonds, (b) is to add to the
4848-0290-9760.4
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agreements, conditions, covenants and terms required to be observed or performed thereunder by
any party thereto, or to surrender any right or power therein reserved to the Authority or the
County, (c) is to cure, correct or supplement any ambiguous or defective provision contained
therein, (d) is to modify the legal description of the Facilities 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 or preferred to be included therein, or substituted for the
Facilities pursuant to the provisions of Section 2.03 of the Facilities Lease, or deleted due to
prepayment pursuant to the provisions of Section 7.02 of the Facilities Lease, or (e) if the Trustee
first obtains the written consent of the Purchaser to such supplement, amendment, modification
or termination.
(c) No supplement, amendment, modification or termination of the Facilities
Lease or Site Lease shall be entered into unless an Opinion of Counsel is delivered to the effect
that such amendment, modification or termination is (a) authorized and permitted by the Trust
Agreement, Facilities Lease or Site Lease, (b) is enforceable against the Authority and the
County, (c) will not materially adversely affect the interests of the Bondholders or result in any
material impairment of the security hereby given for the payment of the Bonds, and (d) does not
adversely impact the tax-exempt status of the interest on the Bonds.
(d) The Trustee shall not be obligated to consent to any amendment that
adversely impacts its rights.
SECTION 6.10 Leasehold Estate. The Authority will be, on the date of the
delivery of the Bonds, the owner and lawfully possessed of the leasehold estate described in the
Site Lease, and the Facilities Lease will be, on the date of delivery of the Bonds, a valid
subsisting demise for the term therein set forth of the property which it purports to demise. At
the time of the delivery of the Bonds, the County will be the owner in fee simple of the premises
described in the Site Lease, the Site Lease will be lawfully made by the County and the
covenants contained in the Site Lease on the part of the County will be valid and binding. At the
time of the delivery of the Bonds, the Authority will have good right, full power and lawful
authority to lease said leasehold estate, in the manner and form provided in the Facilities Lease,
and the Facilities Lease will be duly and regularly executed.
Without allowance for any days of grace which may or might exist or be allowed
by law or granted pursuant to any terms or conditions of the Facilities Lease, the Authority will
in all respects promptly and faithfully keep, perform and comply with all the terms, provisions,
covenants, conditions and agreements of the Facilities Lease to be kept, performed and complied
with by it. The Authority will not do or permit anything to be done, or omit or refrain from
doing anything, in any case where any such act done or permitted to be done, or any such
omission of or refraining from action, would or might be a ground for declaring a forfeiture of
the Facilities Lease, or would or might be a ground for cancellation or termination of the
Facilities Lease by the lessee thereunder. The Authority will promptly deposit with the Trustee
(to be held by the Trustee until the title and rights of the Trustee under this Trust Agreement
shall be released or reconvened) any and all documentary evidence received by it showing
compliance with the provisions of the Facilities Lease to be performed by the Authority. The
Authority, immediately upon its receiving or giving any notice, communication or other
document in any way relating to or affecting the Facilities Lease, or the leasehold estate thereby
4848-0290-9760.4
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created, which may or can in any manner affect the estate of the lessor or of the Authority in or
under the Facilities Lease, will deliver the same, or a copy thereof, to the Trustee.
SECTION 6.11 Intentionally Left Blank.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS
SECTION 7.01 Events of Default and Acceleration of Maturities. If one or more
of the following events (herein called “events of default”) shall happen, that is to say:
(a) if default shall be made by the Authority in the due and punctual payment
of the interest on any Bond when and as the same shall become due and payable;
(b) if default shall be made by the Authority in the due and punctual payment
of the principal or premium, including, without limitation, any Breakage Fee, if any, of any Bond
when and as the same shall become due and payable, whether at maturity as therein expressed or
by proceedings for mandatory redemption;
(c) if default shall be made by the Authority in the performance of any of the
other agreements or covenants required herein to be performed by the Authority, and such
default shall have continued for a period of sixty (60) days or (or if the Authority notifies the
Trustee that in its reasonable opinion the failure stated in the notice can be corrected, but not
within such 60 day period, the failure will not constitute an event of default if the Authority
commences to cure the failure within such 60 day period and thereafter diligently and in good
faith cures such failure in a reasonable period of time);
(d) if the Authority shall file a petition or answer seeking arrangement or
reorganization under the federal bankruptcy laws or any other applicable law of the United States
of America or any state therein, or if a court of competent jurisdict ion shall approve a petition
filed with or without the consent of the Authority seeking arrangement or reorganization under
the federal bankruptcy laws or any other applicable law of the United States of America or any
state therein, or if under the provisions of any other law for the relief or aid of debtors any court
of competent jurisdiction shall assume custody or control of the Authority or of the whole or any
substantial part of its property; or
(e) if an Event of Default has occurred under Section 6.01 of the Facilities
Lease; or
(f) if an Event of Default has occurred under the Continuing Covenant
Agreement;
then and in each and every such case during the continuance of such event of default the Trustee
may, with the consent of the Purchaser, or, at the direction of the Purchaser, institute legal
proceedings pursuant to Section 7.03 hereof. In addition, in the event of a default described in
Section 7.01(a) or (b) hereof, the Trustee, upon the written request of the Purchaser shall, by
notice in writing to the Authority, declare the principal of all Bonds then Outstanding and the
4848-0290-9760.4
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interest accrued thereon to be due and payable immediately, and upon any such declaration the
same shall become due and payable, anything contained herein or in the Bonds to the contrary
notwithstanding. The Trustee shall promptly notify all Bondholders by first class mail of any
such event of default which is continuing of which a Responsible Officer has actual knowledge
or written notice.
This provision, however, is subject to the condition that if at any time after the
principal of the Bonds then Outstanding shall have been so declared due and payable and before
any judgment or decree for the payment of the money due shall have been obtained or entered
the Authority shall deposit with the Trustee a sum sufficient to pay all matured interest on all the
Bonds and all principal of the Bonds matured prior to such declaration and premium, if any, with
interest at the rate borne by such Bonds on such overdue interest and principal and premium, if
any, and the reasonable fees and expenses of the Trustee, and any and all other defaults known to
the Trustee (other than in the payment of interest on and principal of the Bonds due and payable
solely by reason of such declaration) shall have been made good or cured to the satisfaction of
the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor,
then and in every such case the Trustee or the Purchaser, by written notice to the Authority and
to the Trustee, may on behalf of the Bondholders of all the Bonds then Outstanding rescind and
annul such declaration and its consequences; but no such rescission and annulment shall extend
to or shall affect any subsequent default or shall impair or exhaust any right or power consequent
thereon.
Notwithstanding anything to the contrary herein, under no circumstances may the
Authority or the Trustee accelerate the payment of Base Rental under the Facilities Lease.
SECTION 7.02 Application of Funds Upon Acceleration. All moneys in the
accounts and funds provided in Sections 3.01, 3.02, 5.02, 5.03 and 5.04 upon the date of the
declaration of acceleration by the Trustee as provided in Section 7.01 and all Revenues (other
than Revenues on deposit in the Rebate Fund) thereafter received by the Authority hereunder
shall be transmitted to the Trustee and shall be applied by the Trustee in the following order:
First, to the payment of the reasonable fees, costs and expenses of the Trustee in
providing for the declaration of such event of default and carrying out its duties under this Trust
Agreement, including reasonable compensation to their accountants and counsel together with
interest on any amounts advanced as provided herein and thereafter to the payment of the
reasonable costs and expenses of the Bondholders, if any, in carrying out the provisions of this
Article, including reasonable compensation to their accountants and counsel;
Second, upon presentation of the several Bonds, and the stamping thereon of the
amount of the payment if only partially paid or upon the surrender thereof if fully paid, to the
payment of the whole amount then owing and unpaid upon the Bonds for interest and principal,
and premium, including, without limitation, the Breakage Fee, if any, with (to the extent
permitted by law) interest on the overdue interest and principal and premium at the rate borne by
such Bonds, and in case such money shall be insufficient to pay in full the whole amount so
owing and unpaid upon the Bonds, then to the payment of such interest, principal and premium,
including, without limitation, the Breakage Fee, if any, and (to the extent permitted by law)
interest on overdue interest and principal and premium, including, without limitation, the
4848-0290-9760.4
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Breakage Fee, if any, without preference or priority among such interest, principal and premium
and interest on overdue interest and principal and premium ratably to the aggregate of such
interest, principal and premium and interest on overdue interest and principal and premium; and
Third, to the payment of the Purchaser and the other Bondholders of all amounts
due under the Continuing Covenant Agreement and not otherwise paid hereunder.
SECTION 7.03 Institution of Legal Proceedings by Trustee. If one or more of the
events of default shall happen and be continuing, the Trustee may, with the consent of the
Purchaser, and upon the written request of the Purchaser, shall, and in each case upon being
indemnified to its reasonable satisfaction therefor, shall, proceed to protect or enforce its rights
or the rights of the Bondholders of Bonds under this Trust Agreement and under Article VI of
the Facilities Lease by a suit in equity or action at law, either for the specific performance of any
covenant or agreement contained herein, or in aid of the execution of any power herein granted,
or by mandamus or other appropriate proceeding for the enforcement of any other legal or
equitable remedy as the Trustee shall deem most effectual in support of any of its rights and
duties hereunder.
SECTION 7.04 Non-Waiver. Nothing in this Article or in any other provision
hereof or in the Bonds shall affect or impair the obligation of the Authority, which is absolute
and unconditional, to pay the interest on and principal of and redemption premiums, if any, on
the Bonds to the respective Bondholders of the Bonds at the respective dates of maturity or upon
prior redemption as provided herein from the Revenues as provided herein pledged for such
payment, or shall affect or impair the right of such Bondholders, which is also absolute and
unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein
and in the Bonds.
A waiver of any default or breach of duty or contract by the Trustee or any
Bondholder shall not affect any subsequent default or breach of duty or contract or impair any
rights or remedies on any such subsequent default or breach of duty or contract. No delay or
omission by the Trustee or any Bondholder 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 Bondholders by the Act or by this Article may be
enforced and exercised from time to time and as often as shall be deemed expedient by the
Trustee or the Bondholders.
If any action, proceeding or suit to enforce any right or exercise any remedy is
abandoned, the Authority, the Trustee and any Bondholder shall be restored to their former
positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
SECTION 7.05 Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Bondholders 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 at law or in equity or by statute or otherwise and may be exercised
without exhausting and without regard to any other remedy conferred by the Act or any other
law.
4848-0290-9760.4
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SECTION 7.06 [Bondholders’ Direction of Proceedings. Anything in this Trust
Agreement to the contrary notwithstanding, the Purchaser or the Owners of a majority in
aggregate principal amount of the Bonds then Outstanding, but only with the prior written
consent of the Purchaser, shall have the right, by an instrument or concurrent instruments in
writing executed and delivered to the Trustee, and upon indemnifying the Trustee to its
satisfaction therefor, to direct the method of conducting all remedial proceedings taken by the
Trustee hereunder, provided that such direction shall not be otherwise than in accordance with
law and the provisions of this Trust Agreement, and that the Trustee shall have the right to
decline to follow any such direction that in the reasonable opinion of the Trustee would be
unjustly prejudicial to Bondholders not parties to such direction.]
SECTION 7.07 Limitation on Bondholders’ Right to Sue. No Bondholder of any
Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or
equity, for any remedy under or upon this Trust Agreement, unless (a) such Bondholder shall
have previously given to the Trustee written notice of the occurrence of an event of default as
defined in Section 7.01; (b) the Purchaser shall have made written request upon the Trustee to
exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own
name; (c) said Bondholders shall have tendered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities to be incurred in compliance with such request; and (d)
the Trustee shall have refused or omitted to comply with such request for a period of sixty (60)
days after such request shall have been received by, and said tender of indemnity shall have been
made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby
declared, in every case, to be conditions precedent to the exercise by any Bondholder of Bonds
of any remedy hereunder; it being understood and intended that no one or more Bondholders of
Bonds shall have any right in any manner whatever by his or their action to enforce any right
under this Trust Agreement, except in the manner herein provided, and that all proceedings at
law or in equity to enforce any provision of this Trust Agreement shall be instituted, had and
maintained in the manner herein provided and for the equal benefit of all Bondholders of the
Outstanding Bonds.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01 The Trustee. Wells Fargo Bank, National Association shall serve
as the initial Trustee for the Bonds for the purpose of receiving all money which the Authority is
required to deposit with the Trustee hereunder and for the purpose of allocating, applying and
using such money as provided herein and for the purpose of paying the interest on and principal
of and redemption premiums, if any, on the Bonds presented for payment, with the rights and
obligations provided herein. Any such corporation or association into which the Trustee may be
merged or converted, or with which it may be consolidated, or to which it may sell or transfer its
corporate trust business and assets as a whole or in part, or any corporation or association
resulting from any such merger, conversion, sale, transfer or consolidation to which it shall be a
party, shall be and become successor Trustee without the execution or filing of any instrument or
any further act, deed or conveyance on the part of any of the parties.
4848-0290-9760.4
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The Authority, unless there exists any Event of Default as defined in Section 7.01,
may at any time remove the Trustee initially appointed and any successor thereto and may
appoint a successor or successors thereto by an instrument in writing; provided, that any such
successor shall be a bank, banking institution, or trust company, having (or whose parent holding
company has) a combined capital (exclusive of borrowed capital) and surplus of at least five
hundred million dollars ($500,000,000) and subject to supervision or examination by federal or
state authority. If such bank, banking institution, or trust company publishes a report of
condition at least annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purpose of this Section the combined capital
and surplus of such bank, banking institution, or trust company shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition so published. The
Trustee may at any time resign by giving a (30) day written notice of such resignation to the
Authority, and by mailing by first class mail to the Bondholders notice of such resignation.
Upon receiving such notice of resignation, the Authority shall promptly appoint a successor
Trustee by an instrument in writing. Any removal or resignation of a Trustee and appointment of
a successor Trustee shall become effective only upon the acceptance of appointment by the
successor Trustee. The successor Trustee shall send notice of its acceptance by first class mail to
the Bondholders. If, within thirty (30) days after notice of the removal or resignation of the
Trustee no successor Trustee shall have been appointed and shall have accepted such
appointment, the removed or resigning Trustee may petition any court of compet ent jurisdiction
for the appointment of a successor Trustee, which court may thereupon, after such notice, if any,
as it may deem proper and prescribe and as may be required by law, appoint a successor Trustee
having the qualifications required hereby.
The Trustee is hereby authorized to pay or redeem the Bonds when duly presented
for payment at maturity or on redemption prior to maturity. The Trustee shall cancel all Bonds
upon payment thereof or upon the surrender thereof by the Authority and shall dispose of such
Bonds in a manner deemed appropriate by it. The Trustee shall keep accurate records of all
Bonds paid and discharged and cancelled by it.
The Trustee shall, prior to an event of default, and after the curing or waiver of all
Events of Default that may have occurred, perform such duties and only such duties as are
specifically set forth in this Trust Agreement and no implied duties or obligations shall be read
into this Trust Agreement. The Trustee shall, during the existence of any Event of Default (that
has not been cured or waived), exercise such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person’s own affairs.
SECTION 8.02 Liability of Trustee. The recitals of facts, agreements and
covenants herein and in the Bonds shall be taken as recitals of facts, agreements and covenants
of the Authority, and the Trustee assumes no responsibility for the correctness of the same or
makes any representation as to the sufficiency or validity hereof or of the Bonds, or shall incur
any responsibility in respect thereof other than in connection with the rights or obligations
assigned to or imposed upon it herein, in the Bonds or in law or equity. The Trustee shall not be
liable in connection with the performance of its duties hereunder except for its own negligence or
willful misconduct as finally determined by a court of competent jurisdiction.
4848-0290-9760.4
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The Trustee shall not be bound to recognize any person as the Bondholder of a
Bond unless and until such Bond is submitted for inspection, if required, and such Bondholder’s
title thereto satisfactorily established, if disputed.
The Trustee shall not be liable for any error of judgment made in good faith,
unless it shall be proved that the Trustee was negligent 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 Purchaser in aggregate principal
amount of the Bonds at the time Outstanding, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Trust Agreement. The Trustee may refuse to follow
any direction that conflicts with law or the Trust Agreement, is unduly prejudicial to the rights of
other Bondholders, or would involve the Trustee in personal liability.
The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Trust Agreement at the request, order or direction of any of the Bondholders
pursuant to the provisions of this Trust Agreement unless such Bondholders shall have offered to
the Trustee reasonable security or indemnity against the reasonable costs, expenses and liabilities
that may be incurred therein or thereby. The Trustee has no obligation or liability to the
Bondholders for the payment of the interest on, principal of or redemption premium, if any, with
respect to the Bonds from its own funds; but rather the Trustee’s obligations shall be limited to
the performance of its duties hereunder.
Any action taken, or omitted to be taken, by the Trustee in good fai th pursuant to
the Trust Agreement upon the request or authority or consent of any person who, at the time of
making such request or giving such authority or consent, is the Bondholder of any Bond shall be
conclusive and binding upon all future Bondholders and upon Bonds executed an delivered in
exchange therefore or in place thereof.
The Trustee shall not be deemed to have knowledge of any event of default
(except payment defaults) unless and until a Responsible Officer shall have actual knowledge
thereof or a Responsible Officer of the Trustee shall have received written notice thereof at its
Principal Office. The Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or of any of the
documents executed in connection with the Bonds, or as to the existence of a default or event of
default thereunder. The Trustee shall not be responsible for the validity or effectiveness of any
collateral given to or held by it.
The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through attorneys-in-fact, agents or receivers and shall
not be answerable for the negligence or misconduct of any such attorney-in-fact, agent or
receiver selected by it with due care. The Trustee shall be entitled to advice of counsel and other
professionals concerning all matters of trust and its duty hereunder, but the Trustee shall not be
answerable for the professional malpractice of any attorney-in-law or certified public accountant
in connection with the rendering of his professional advice in accordance with the terms of this
4848-0290-9760.4
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Trust Agreement, if such attorney-in-law or certified public accountant was selected by the
Trustee with due care.
The Trustee shall not be concerned with or accountable to anyone for the
subsequent use or application of any moneys which shall be released or withdrawn in accordance
with the provisions hereof.
Whether or not therein expressly so provided, every provision of this Trust
Agreement, the Facilities Lease, the Site Lease or related documents relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be subject to the provisions of
this Article.
The Trustee makes no representation or warranty, express or implied, as to the
title, value, design, compliance with specifications or legal requirements, quality, durability,
operation, condition, merchantability or fitness for any particular purpose for the use
contemplated by the Authority or County of the Facilities or the Project. In no event shall the
Trustee be liable for incidental, indirect, special or consequential damages in connection with or
arising from the Facilities Lease, the Site Lease or this Trust Agreem ent for the existence,
furnishing or use of the Facilities or the Project.
The Trustee shall be protected in acting upon any notice, resolution, requisition,
request (including any Written Request of the Authority or the County), consent, order,
certificate, report, opinion, bond or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties. Before the Trustee acts or refrains
from acting, the Trustee may consult with counsel, who may be counsel of or to the Authority,
with regard to legal questions, and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it hereunder in good
faith and in accordance therewith.
Before taking any action or refraining from taking any action, the Trustee may
require that indemnity satisfactory to it be furnished for the reimbursement of all expenses to
which it may be put and to protect it against all liability, including costs incurred in d efending
itself against any and all charges claims, complaints, allegations, assertations or demands of any
nature whatsoever, except liability which is adjudicated to be a direct result of the Trustee’s
negligence or willful misconduct in connection with any such action.
Whenever in the administration of its rights and obligations hereunder the Trustee
shall deem it necessary or desirable that a matter be established or proved prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to
be conclusively proved and established by a Certificate of the Authority or a Certificate of the
County, which certificate shall be full warrant to the Trustee for any action taken or suffered
under the provisions hereof upon the 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 it may
deem reasonable.
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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 or exercise of any of
its duties hereunder, or in the exercise of its rights or powers. Under no circumstances shall the
Trustee be liable in its individual capacity for the obligations evidenced by the Bonds.
The Trustee is not responsible for the content of any disclosure material prepared
in connection with the Bonds.
The Trustee shall not be considered in breach of or in default in its obligations
hereunder or progress in respect thereto in the event of enforced delay (“unavoidable delay”) in
the performance of such obligations due to unforeseeable causes beyond its control and without
its fault or negligence.
SECTION 8.03 Compensation and Indemnification of Trustee. The Authority
covenants to pay (but solely from Additional Payments) to the Trustee from time to time, and the
Trustee shall be entitled to, compensation for all services rendered by it in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and the Authority will pay
or reimburse the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee, in accordance with any of the provisions of this Trust
Agreement (including the reasonable compensation and the reasonable expenses and
disbursements of their counsel (including the allocated reasonable fees and disbursements of in -
house counsel) and of all persons not regularly in their employ) except any such expense,
disbursement or advance as may arise from the Trustee’s negligence or willful misconduct. The
Authority, to the extent permitted by law, shall indemnify, defend and hold harmless the Trustee
against any loss, damage, liability or expense incurred without negligence or willful misconduct
on the part of the Trustee arising out of or in connection with the acceptance or administration of
the trusts created hereby, including reasonable costs and expenses (including reasonable
attorneys’ fees and disbursements) of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers hereunder. The
rights of the Trustee and the obligations of the Authority under this Section 8.03 shall survive the
discharge of the Bonds and this Trust Agreement and the resignation or removal of the Trustee.
ARTICLE IX
AMENDMENT OF THE TRUST AGREEMENT
SECTION 9.01 Amendment of the Trust Agreement.
(a) This Trust Agreement and the rights and obligations of the Authority and
of the Bondholders may be amended at any time by a Supplemental Trust Agreement which shall
become binding when the written consent of the Purchaser are filed with the Trustee; provided
that if such modification or amendment will, by its terms, not take effect so long as any remain
Outstanding, the consent of the Owners of such Bonds shall not be required and such Bonds shall
not be deemed to be Outstanding for the purpose of any calculation of Bonds Outstanding under
this Section. No such amendment shall (1) extend the maturity of or reduce the interest rate on
or amount of interest on or principal of or redemption premium, if any, on any Bond without the
express written consent of the Bondholder of such Bond, or (2) permit the creation by the
4848-0290-9760.4
39
Authority of any pledge of or charge or lien upon the Revenues as provided herein superior to or
on a parity with the pledge, charge and lien created hereby for the benefit of the Bonds, or
(3) reduce the percentage of Bonds required for the written consent to any such amendment, or
(4) modify any rights or obligations of the Trustee, the Authority, or the County without their
prior written assent thereto, respectively. It shall not be necessary for the consent of the
Bondholders to approve the particular form of any Supplemental Trust Agreement, but it shall be
sufficient if such consent shall approve the substance thereof. Promptly after the execution by
the Authority and the Trustee of any Supplemental Trust Agreement pursuant to this subsection
(a), the Trustee shall mail a notice on behalf of the Authority, setting forth in general terms the
substance of such Supplemental Trust Agreement to the Bondholders at the addresses shown on
the registration books maintained by the Trustee. Any failure to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any such Supplemental
Trust Agreement.
(b) The Trust Agreement and the rights and obligations of the Authority and
of the Bondholders may also be amended at any time by a Supplemental Trust Agreement which
shall become binding upon adoption but without the consent of any Bondholders, for any
purpose that will not materially adversely affect the interests of the Bondholders, including
(without limitation) for any one or more of the following purposes:
(i) to add to the agreements and covenants required herein to be
performed by the Authority other agreements and covenants thereafter to be
performed by the Authority, or to surrender any right or power reserved herein to
or conferred herein on the Authority;
(ii) 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 may deem
desirable or necessary; and
(iii) to add to the agreements and covenants required herein, such
agreements and covenants as may be necessary to qualify the Trust Agreement
under the Trust Indenture Act of 1939.
(c) The Trustee shall not be obligated to enter into any Amendment that
adversely impacts its rights.
(d) No amendment shall be entered into unless an Opinion of Counsel is
delivered to the effect that such amendment (a) is authorized and permitted by the Trust
Agreement, (b) is enforceable against the Authority and the County, (c) will not materially
adversely affect the interests of the Bondholders or result in any material impairment of the
security hereby given for the payment of the Bonds, and (d) does not adversely impact the tax-
exempt status of the interest on the Bonds.
SECTION 9.02 Disqualified Bonds. Bonds owned or held by or for the account of
the Authority shall not be deemed Outstanding for the purpose of any consent or other action or
4848-0290-9760.4
40
any calculation of Outstanding Bonds provided in this Article, and shall not be entitled to
consent to or take any other action provided in this Article.
SECTION 9.03 Endorsement or Replacement of Bonds After Amendment. After
the effective date of any action taken as hereinabove provided, the Authority may determine that
the Bonds may bear a notation by endorsement in form approved by the Authority as to such
action, and in that case upon demand of the Bondholder of any Outstanding Bonds and
presentation of his Bond for such purpose at the office of the Trustee a suitable notation as to
such action shall be made on such Bond. If the Authority shall so determine, new Bonds so
modified as, in the opinion of the Authority, shall be necessary to conform to such action shall be
prepared and executed, and in that case upon demand of the Bondholder of any Outstanding
Bond a new Bond or Bonds shall be exchanged at the office of the Trustee without cost to each
Bondholder for its Bond or Bonds then Outstanding upon surrender of such Outstanding Bonds.
SECTION 9.04 Notice to and Consent of Bondholders. If consent of the
Bondholders is required under the terms of this Trust Agreement for the amendment of this Trust
Agreement or for any other similar purpose, the Authority shall cause notice of the proposed
amendment to be given by first-class mail to the Owners of the Outstanding Bonds then shown
on the registration books for the Bonds. Such notice shall briefly set forth the nature of the
proposed amendment or other action and shall state that copies of any such amendment are on
file at the office of the Authority and the Principal Office of the Trustee for inspection by all
Bondholders. If, within sixty (60) days or such longer period as shall be prescribed by the
Authority following the mailing of such notice, the Owners of the requisite principal amount of
the Bonds Outstanding by instruments filed with the Authority shall have consented to the
amendment or other proposed action, then the Authority may adopt or execute, as appropriate,
such amendment or take such proposed action and the consent of the Bondholders shall thereby
be conclusively presumed. Such instruments filed with the Authority may include documents,
including Certificates of the Authority, stating that Owners of Bonds have consented to an
amendment by purchasing such Bonds if the disclosure document related to such purchase
disclosed that the purchase of the Bonds was deemed to mean that the Owners consented to the
amendment.
SECTION 9.05 Amendment by Mutual Consent. The provisions of this
Article shall not prevent any Bondholder from accepting any amendment as to the particular
Bonds held by him, provided that due notation thereof is made on such Bonds.
ARTICLE X
DEFEASANCE
SECTION 10.01 [Discharge of Bonds.
(a) If the Authority shall pay or cause to be paid or there shall otherwise be
paid to the Bondholders of all or any portion of the Outstanding Bonds the interest thereon and
principal thereof and redemption premiums, if any, thereon at the times and in the manner
stipulated herein and therein, and the Authority shall pay in full all other amounts due hereunder
and under the Facilities Lease and the Continuing Covenant Agreement, then the Bondholders of
4848-0290-9760.4
41
such Bonds shall cease to be entitled to the pledge of and charge and lien upon the Revenues as
provided herein, and all agreements, covenants and other obligations of the Authority to the
Bondholders of such Bonds hereunder shall thereupon cease, terminate and become void and be
discharged and satisfied. In such event, the Trustee shall execute and deliver to the Authority all
such instruments as may be necessary or desirable to evidence such discharge and satisfaction,
the Trustee shall pay over or deliver to the Authority all money or securities held by it pursuant
hereto which are not required for the payment of the interest on and principal of and redemption
premiums, if any, on such Bonds and for the payment of all other amounts due hereunder and
under the Facilities Lease.
(b) Any Outstanding Bonds shall prior to the maturity date or redemption date
thereof be deemed to have been paid within the meaning of and with the effect expressed in
subsection (a) of this Section if (1) in case any of such Bonds are to be redeemed on any date
prior to their maturity date, the Authority shall have given to the Trustee in form satisfactory to it
irrevocable instructions to provide notice in accordance with Section 4.05, (2) there shall have
been deposited with the Trustee (A) cash in an amount which shall be sufficient and/or
(B) noncallable Government Securities, the interest on and principal of which when paid will
provide cash which, together with the cash, if any, deposited with the Trustee at the same time,
shall be sufficient, in the opinion of an Independent Certified Public Accountant, to pay when
due the interest to become due on such Bonds on and prior to the maturity date or redemption
date thereof, as the case may be, and the principal of and redemption premiums, if any, on such
Bonds, and (3) in the event such Bonds are not by their terms subject to redemption within the
next succeeding sixty (60) days, the Authority shall have given the Trustee in form satisfactory
to it irrevocable instructions to mail as soon as practicable, a notice to the Bondholders of such
Bonds that the deposit required by clause (2) above has been made with the Trustee and that such
Bonds are deemed to have been paid in accordance with this Section and stating the maturity
date or redemption date upon which money is to be available for the payment of the principal of
and redemption premiums, if any, on such Bonds.
(c) In the event of an advance refunding (i) the Authority shall cause to be
delivered, on the deposit date and upon any reinvestment of the defeasance amount, a report of
an Independent Certified Public Accountant verifying the sufficiency of the escrow esta blished
to pay the Bonds in full on the maturity date or redemption date (“Verification”) (which
Verification shall verify the mathematical accuracy of the computations relating to the adequacy
of cash plus Government Securities to be held in escrow to pay debt service requirements
(principal, interest and redemption price, including premium, to the applicable redemption or
maturity dates) when due on the Bonds to be refunded), (ii) the escrow agreement shall provide
that no (A) substitution of a Government Security shall be permitted except with another
Government Security and upon delivery of a new Verification and (B) reinvestment of a
Government Security shall be permitted except as contemplated by the original Verification or
upon delivery of a new Verification, and (iii) there shall be delivered an Opinion of Bond
Counsel to the effect that the Bonds are no longer “Outstanding” under the Trust Agreement;
each Verification and opinion shall be addressed to the Authority and the Trustee.
SECTION 10.02 Unclaimed Money. Anything contained herein to the contrary
notwithstanding, any money held by the Trustee in trust for the payment and discharge of any of
the Bonds or interest thereon which remains unclaimed for two (2) years after the date when such
4848-0290-9760.4
42
Bonds or interest thereon have become due and payable, either at their stated maturity dates or
by call for redemption prior to maturity, if such money was held by the Trustee at such date, or
for two (2) years after the date of deposit of such money if deposited with the Tru stee after the
date when such Bonds have become due and payable, shall be repaid by the Trustee to the
Authority as its absolute property free from trust, and the Trustee shall thereupon be released and
discharged with respect thereto and the Bondholders shall not look to the Trustee for the
payment of such Bonds.]
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Liability of Authority Limited to Revenues. Notwithstanding
anything contained herein, the Authority shall not be required to advance any money derived
from any source other than the Revenues as provided herein for the payment of the interest on or
principal of or redemption premiums, if any, on the Bonds or for the performance of any
agreements or covenants herein contained. The Authority may, however, advance funds for any
such purpose so long as such funds are derived from a source legally available for such purpose.
The Bonds are limited obligations of the Authority and are payable, as to interest
thereon, principal thereof and any premiums upon the redemption of any thereof, solely from the
Revenues as provided herein, and the Authority is not obligated to pay them except from the
Revenues. All the Bonds are equally secured by a pledge of and charge and lien upon the
Revenues, and the Revenues constitute a trust fund for the security and payment of the interest
on and principal of and redemption premiums, if any, on the Bonds as provided herein . The
Bonds are not a debt of the County, the State or any of its political subdivisions, and neither the
County, the State nor any of its political subdivisions is liable thereon, nor in any event shall the
Bonds be payable out of any funds or properties other than those of the Authority as provided
herein. The Bonds do not constitute an indebtedness within the meaning of any constitutional or
statutory limitation or restriction.
SECTION 11.02 Benefits of this Trust Agreement Limited to Parties and Third
Party Beneficiaries. Nothing contained herein, expressed or implied, is intended to give to any
person other than the Authority, the Trustee, and the Bondholders any right, remedy or claim
under or by reason hereof. Any agreement or covenant required herein to be performed by or on
behalf of the Authority or any member, officer or employee thereof shall be for the sole and
exclusive benefit of the Authority, the Trustee and the Bondholders.
SECTION 11.03 Successor Is Deemed Included in All References to Predecessor.
Whenever herein either the Authority or any member, officer or employee thereof or of the State
is named or referred to, such reference shall be deemed to include the successor to the powers,
duties and functions with respect to the Project that are presently vested in the Authority or such
member, officer or employee, and all agreements and covenants required hereby to be performed
by or on behalf of the Authority or any member, officer or employee thereof shall bind and inure
to the benefit of the respective successors thereof whether so expressed or not.
4848-0290-9760.4
43
SECTION 11.04 Execution of Documents by Bondholders. Any declaration,
request or other instrument which is permitted or required herein to be executed by Bondholders
may be in one or more instruments of similar tenor and may be executed by Bondholders in
person or by their attorneys appointed in writing. The fact and date of the execution by any
Bondholder 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 make 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. The ownership of any Bonds and the
amount, maturity, number and date of holding the same may be proved by the registration books
relating to the Bonds at the Principal Office of the Trustee.
Any declaration, request, consent or other instrument or writing of the
Bondholder of any Bond shall bind all future Bondholders of such Bond with respect to anything
done or suffered to be done by the Trustee or the Authority in good faith and in accordance
therewith.
SECTION 11.05 Waiver of Personal Liability. No member, officer or employee of
the Authority or the County shall be individually or personally liable for the payment of the
interest on or principal of or redemption premiums, if any, on the Bonds by reason of their
issuance, but nothing herein contained shall relieve any such member, officer or employee from
the performance of any official duty provided by the Act or any other applicable provisions of
law or hereby.
SECTION 11.06 Intentionally Left Blank.
SECTION 11.07 Accounts and Funds. Any account or fund required herein to be
established and maintained by the Trustee 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 fund; but all such records with respect to all such accounts and
funds shall at all times be maintained in accordance with corporate trust industry standards and
with due regard for the protection of the security of the Bonds and the rights of the Bondholders.
SECTION 11.08 Business Day. When any action is provided for herein to be done
on a day named or within a specified time period, and the day or the last day of the period falls
on a day which is not a Business Day, such action may be performed on the next ensuing
Business Day with the same effect as though performed on the appointed day or within the
specified period.
SECTION 11.09 Notices. All written notices to be given hereunder shall be given
by mail to the party entitled thereto at the addresses set forth below, or at such other addresses as
such parties may provide to the other party in writing from time to time, namely:
4848-0290-9760.4
44
If to the Authority: County of Contra Costa Public Financing Authority
c/o County Administrator
County of Contra Costa
County Administration Building
651 Pine Street
Martinez, California 94553
If to the Trustee: Wells Fargo Bank, National Association
333 Market Street, 18th Floor
San Francisco, CA 94105
Attention: Corporate Trust Services
If to the County: County of Contra Costa
c/o Clerk of the Board of Supervisors
County of Contra Costa
County Administration Building
651 Pine Street
Martinez, California 94553
SECTION 11.10 Article and Section Headings 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. All references herein to “Articles,” “Sections” and other subdivisions or clauses 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
hereof.
SECTION 11.11 Partial Invalidity. If any one or more of the agreements or
covenants or portions thereof required hereby to be performed by or on the part of the Authority
or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or
covenants or such portions thereof shall be null and void and shall be deemed separable from the
remaining agreements and covenants or portions thereof and shall in no way affect the validity
hereof or of the Bonds, and the Bondholders shall retain all the benefit, protection and security
afforded to them under the Act or any other applicable provisions of law. The Authority and the
Trustee hereby declare that they would have executed and delivered this Trust Agreement and
each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof
and would have authorized the issuance of the Bonds 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 11.12 Governing Law. This Trust Agreement shall be governed
exclusively by the provisions hereof and by the laws of the State as the same from time to time
exist.
4848-0290-9760.4
45
SECTION 11.13 Execution in Several Counterparts. This Trust Agreement may be
executed in any number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original; and all such counterparts, or as many of them as the Authority and the
Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
4848-0290-9760.4
S-1 [Trust Agreement]
IN WITNESS WHEREOF, the COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY has caused this Trust Agreement to be signed in its name by its
Chair and attested by its Secretary, and WELLS FARGO BANK, NATIONAL
ASSOCIATION., in token of its acceptance of the trusts created hereunder, has caused this Trust
Agreement to be signed by one of the officers thereunder duly authorized, all as of the day and
year first above written.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By:
Federal D. Glover
Chair of the Board of Directors
Attest:
By:
David J. Twa
Executive Director and
Secretary of the Board of Directors
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Officer
Acknowledged
COUNTY OF CONTRA COSTA
By:
David J. Twa
County Administrator and
Clerk of the Board of Supervisors
4848-0290-9760.4
A-1
EXHIBIT A
FORM OF 2017 SERIES A BOND
No. _____ $__________
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS
(REFUNDING AND CAPITAL PROJECTS),
2017 SERIES A
NEITHER THE FULL FAITH AND CREDIT OF THE AUTHORITY NOR THE COUNTY OF
CONTRA COSTA IS PLEDGED FOR THE PAYMENT OF THE INTEREST ON OR
PRINCIPAL OF THE BONDS AND NO TAX OR OTHER SOURCE OF FUNDS OTHER
THAN THE REVENUES HEREINAFTER REFERRED TO IS PLEDGED TO PAY THE
INTEREST ON OR PRINCIPAL OF THE BONDS. NEITHER THE PAYMENT OF THE
PRINCIPAL OF NOR INTEREST ON THE BONDS CONSTITUTES A DEBT, LIABILITY
OR OBLIGATION OF THE COUNTY OF CONTRA COSTA OR THE CONTRA COSTA
COUNTY FLOOD CONTROL AND WATER CONSERVATION DISTRICT, THE PARTIES
TO THE AGREEMENT CREATING THE AUTHORITY.
Interest Rate Maturity Date Dated Date CUSIP
____% June 1, ____ _______, 2017
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: _____________________________________ DOLLARS
The COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, a
joint exercise of powers authority, duly organized and validly existing under and pursuant to the
laws of the State of California (the “Authority”), for value received, hereby promises to pay (but
only out of the Revenues hereinafter referred to) to the registered owner identified above or
registered assigns, on the maturity date specified above (subject to any right of prior redemption
hereinafter provided for) the principal sum specified above, together with interest on such
principal sum from the interest payment date next preceding the date of authentication of this
Bond (unless this Bond is registered as of an interest payment date or during the period from the
fifteenth calendar day of the month preceding an interest payment date to such interest payment
date, in which event it shall bear interest from such interest payment date, or unless this Bond is
authenticated on or before [_________, 2017], in which event it shall bear interest from the
Dated Date specified above) until the principal hereof shall have been paid at the interest rate per
annum specified above, payable on June 1, 2017, and semiannually thereafter on each June 1 and
December 1. Interest due on or before the maturity or prior redemption of this Bond shall be
payable only by check mailed by first-class mail to the registered owner hereof; provided that
4848-0290-9760.4
A-2
upon the written request of a Bondholder of $1,000,000 or more in aggregate principal amount of
Bonds of the Series of which this Bond is a part received by the Trustee (defined hereinafter)
prior to the applicable record date, interest shall be paid by wire transfer in immediately available
funds to an account within the United States of America. The principal hereof is payable in
lawful money of the United States of America upon presentation of this Bond at the Principal
Office of the Trustee. Capitalized terms used herein and not otherwise defined herein have the
meanings ascribed thereto in the Trust Agreement.
This Bond is one of a duly authorized issue of bonds of the Authority designated
as its “County of Contra Costa Public Financing Authority Lease Revenue Bonds ” (the “Bonds”)
unlimited as to principal amount and is one of a duly authorized series of such Bonds known as
“(Refunding and Capital Projects), 2017 Series A” (the “Bonds”) issued in an aggregate principal
amount of _____________________________________________ dollars ($____________), all
of like tenor and date (except for such variations, if any, as may be required to designate varying
numbers, maturities and interest rates), and is issued under and pursuant to the provisions of the
Joint Exercise of Powers Act (being Chapter 5 of Division 7 of Title 1 of the California
Government Code, as amended) and all laws amendatory thereof or supplemental thereto (the
“Act”) and under and pursuant to the provisions of a trust agreement, dated as of [March] 1,
2017 (as amended from time to time, the “Trust Agreement”), between the Authority and Wells
Fargo Bank, National Association, as trustee (together with any successor as trustee under the
Trust Agreement, the “Trustee”) (copies of the Trust Agreement are on file at the principal office
of the Trustee in San Francisco, California).
The Bonds are issued to provide funds to finance and refinance the acquisition,
installation, implementation and construction of certain capital projects of the County, and
related costs and expenses, located in the County of Contra Costa (as more fully defined in the
Trust Agreement, the “Project”) and to provide funds to refund certain outstanding lease revenue
bonds of the Authority. The Bonds are limited obligations of the Authority and are payable, as to
interest thereon and principal thereof, solely from certain proceeds of the Bonds held in c ertain
funds and accounts pursuant to the Trust Agreement and the revenues (as more fully defined in
the Trust Agreement, the “Revenues”) derived from Base Rental Payments and other payments
made by the County of Contra Costa (the “County”), and all interest or other investment income
thereon, pursuant to the Facilities Lease, dated as of [March] 1, 2017 (as amended from time to
time, the “Facilities Lease”), by and between the Authority and the County, and the Authority is
not obligated to pay the interest or premium, if any, on and principal of the Bonds except from
the Revenues. All Bonds are equally and ratably secured in accordance with the terms and
conditions of the Trust Agreement by a pledge and assignment of and charge and lien up on the
Revenues, and the Revenues constitute a trust fund for the security and payment of the interest or
premium, if any, on and principal of the Bonds as provided in the Trust Agreement. The full
faith and credit of the Authority and the County are not pledged for the payment of the interest or
premium, if any, on or principal of the Bonds. No tax shall ever be levied to pay the interest on
or principal of the Bonds. The Bonds are not secured by a legal or equitable pledge of or charge
or lien upon any property of the Authority or any of its income or receipts except the Revenues,
and neither the payment of the interest on nor principal (or premium, if any) of the Bonds is a
debt, liability or general obligation of the Authority, the County or any membe r of the Authority
for which such entity is obligated to levy or pledge any form of taxation. Reference is hereby
made to the Act and to the Trust Agreement and any and all amendments thereof and
4848-0290-9760.4
A-3
supplements thereto for a description of the terms on which the Bonds are issued, the provisions
with regard to the nature and extent of the Revenues, the rights of the registered owners of the
Bonds, security for payment of the Bonds, remedies upon default and limitations thereon, and
amendment of the Trust Agreement (with or without consent of the registered owners of the
Bonds); and all the terms of the Trust Agreement are hereby incorporated herein and constitute a
contract between the Authority and the registered owner of this Bond, to all the provisions of
which the registered owner of this Bond, by acceptance hereof, agrees and consents.
The Bonds are subject to redemption prior to maturity on the dates, at the
redemption prices, and upon such notice as set forth in the Trust Agreement.
If an Event of Default (as defined in the Trust Agreement) shall occur, the
principal of all Bonds may be declared due and payable upon the conditions, in the manner and
with the effect provided in the Trust Agreement. The Trust Agreement provides that in certain
events such declaration and its consequences may be rescinded by the Purchaser or by the
Trustee.
This Bond is transferable only on a register to be kept for that purpose at the
above-mentioned Principal Office of the Trustee by the registered owner hereof in person or by
the duly authorized attorney of such owner upon payment of the charges provided in the Trust
Agreement and upon surrender of this Bond together with a written instrument of transfer
satisfactory to the Trustee duly executed by the registered owner or the duly authorized attorney
of such owner, and thereupon a new fully registered Bond or Bonds in the same aggregate
principal amount will be issued to the transferee in exchange therefor. The Authority and the
Trustee may deem and treat the registered owner hereof as the absolute owner hereof for the
purpose of receiving payment of the interest hereon and principal hereof and for all other
purposes, whether or not this Bond shall be overdue, and neither the Authority nor the Trustee
shall be affected by an y notice or knowledge to the contrary; and payment of the interest on and
principal of this Bond shall be made only to such registered owner, which payments shall be
valid and effectual to satisfy and discharge liability on this Bond to the extent of the s um or sums
so paid.
In the event of any conflict or inconsistency between the terms and provisions of
the Bond and the terms and provisions of the Trust Agreement, the terms and provisions of the
Trust Agreement shall control.
This Bond shall not be entitled to any benefit, protection or security under the
Trust Agreement or become valid or obligatory for any purpose until the certificate of
authentication hereon endorsed shall have been executed and dated by the Trustee.
It is hereby certified and recited that all acts, conditions and things required by
law to exist, to have happened and to have been performed precedent to and in the issuance of
this Bond do exist, have happened and have been performed in due time, form and manner as
required by the Act, and by the Constitution and laws of the State of California, that the amount
of this Bond, together with all other indebtedness of the Authority, does not exceed any limit
prescribed by the Constitution or laws of the State of California and is not in excess of the
amount of Bonds permitted to be issued under the Trust Agreement.
4848-0290-9760.4
A-4
IN WITNESS WHEREOF, the County of Contra Costa Public Financing
Authority has caused this Bond to be executed in its name and on its behalf by the manual or
facsimile signature of the Chair of the Authority and countersigned by the manual or facsimile
signature of the Secretary of said Authority, and has caused this Bond to be dated as of the Dated
Date specified above.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By:
Chair
Countersigned:
Secretary
4848-0290-9760.4
A-5
FORM OF CERTIFICATE OF AUTHENTICATION
TO APPEAR ON 2017 SERIES A BONDS
This is one of the Bonds described in the within-mentioned Trust Agreement
which has been registered and authenticated on ____________, 2017.
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
By:
Authorized Signatory
[DTC LEGEND]
Unless this Bond is presented by an authorized representative of The Depository
Trust Company to the issuer or its agent for registration of transfer, exchange or payment, and
any Bond issued 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.
4848-0290-9760.4
A-6
[FORM OF ASSIGNMENT TO
APPEAR ON 2017 SERIES A BONDS]
For value received the undersigned hereby sells, assigns and transfers unto
__________________________________ (Taxpayer Identification Number:_______________)
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
___________________________________ attorney to transfer the within bond on the books
kept for registration thereof, with full power of substitution in the premises.
NOTE: The signature to this Assignment must
correspond with the name as written on the face of
the Bond in every particular, without alteration or
enlargement or any change whatever.
Dated:
PLEASE INSERT SOCIAL SECURITY NUMBER, TAXPAYER IDENTIFICATION
NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:
Signature Guaranteed:
NOTE: Signature must be guaranteed by
an eligible guarantor institution.
4848-0290-9760.4
B-1
EXHIBIT B
FORM OF REQUISITION – PROJECT FUND
Date: ____________, 20__
No. __
Wells Fargo Bank, National Association
1700 Lincoln Street, 10th Floor
Denver, CO 80203
Attention: Corporate Trust Services
Re: County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects), 2017 Series A
(Written Request of the County - 2017 Series A Project Account)
Ladies and Gentlemen:
This letter is our authorization to you to disburse from the 2017 Series A Project
Account within the Project Fund provided for in Section 3.02 of the Trust Agreement dated as of
[March] 1, 2017 (the “Trust Agreement”) between the County of Contra Costa Public Financing
Authority (the “Authority”) and Wells Fargo Bank, National Association, as trustee, the amount
indicated on Schedule A attached hereto to the therein-named individuals, firms and corporations
for the payment of project costs relating to the completion of the Capital Projects (as said term is
defined in the Trust Agreement).
The obligations in the stated amount have been incurred by the County, and each
item thereof is a proper charge against the 2017 Series A Project Account within the Project
Fund. There has not been filed with or served upon the County notice of any lien, right to lien or
attachment upon, or claim affecting the right to receive payment of, any of the moneys payable
to any of the persons named herein below, which has not been released or will not be released
simultaneously with the payment of such obligation, other than materialmen’s or mechanics’
liens accruing by mere operation of law.
If checked here you are hereby authorized to close the 2017 Series A Project
Account within the Project Fund and transfer any remaining balance (after payment of any
amounts indicated in Schedule A) to the Revenue Fund.
Very truly yours,
COUNTY OF CONTRA COSTA
By
Authorized Officer
4848-0290-9760.4
B-2
SCHEDULE A
Item
No. Payee Amount Purpose
__ __________ $________ ____________
4848-0290-9760.4
C-1
EXHIBIT C
FORM OF REQUISITION – COSTS OF ISSUANCE
Date: ____________, 20__
No. __
Wells Fargo Bank, National Association
1700 Lincoln Street, 10th Floor
Denver, CO 80203
Attention: Corporate Trust Services
Re: County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects), 2017 Series A
(Written Request of the Authority – Costs of Issuance Fund)
Ladies and Gentlemen:
This letter is our authorization to you to disburse from the Costs of Issuance Fund
provided for in Section 3.01 of the Trust Agreement dated as of [March] 1, 2017 (the “Trust
Agreement”) between the County of Contra Costa Public Financing Authority (the “Authority”)
and Wells Fargo Bank, National Association, as trustee, the not to exceed amounts indicated on
Schedule A attached hereto to the therein-named individuals, firms and corporations for
expenses incident to the issuance of the above-referenced Bonds pursuant to the Trust
Agreement.
The obligations in the stated amounts have been incurred by the Authority and
each item thereof is a proper charge against the Costs of Issuance Fund.
If checked here you are hereby authorized to close the Costs of Issuance Fund
and transfer any remaining balance (after payment of any amounts indicated in Schedule A) to
the Authority for deposit to the 2017 Series A Project Account within the Project Fund.
Very truly yours,
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By
Authorized Officer
4848-0290-9760.4
C-2
SCHEDULE A
Item
No. Payee Amount Purpose
__ __________ $________ ____________
4828-6206-0864.4
NP DRAFT 2/7/17
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
NIXON PEABODY LLP
300 South Grand Avenue, Suite 4100
Los Angeles, California 90071
Attention: Charles C. Wolf, Esq.
FACILITIES LEASE
by and between
COUNTY OF CONTRA COSTA
PUBLIC FINANCING AUTHORITY
and the
COUNTY OF CONTRA COSTA
Related to
$[________]
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects)
2017 Series A
Dated as of [March] 1, 2017
THIS TRANSACTION IS EXEMPT FROM FILING FEES PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 6103 AND TRANSFER TAXES PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE
SECTION 11928
TABLE OF CONTENTS
Page
i
ARTICLE I DEFINITIONS ........................................................................................................... 2
SECTION 1.01. Definitions....................................................................................... 2
ARTICLE II LEASE OF FACILITIES; TERM ............................................................................. 4
SECTION 2.01. Lease of Facilities ........................................................................... 4
SECTION 2.02. Term; Occupancy; and Release of Existing Facilities .................... 4
SECTION 2.03. Substitution; Release; Addition of Property ................................... 5
ARTICLE III RENTAL PAYMENTS; USE OF PROCEEDS ...................................................... 7
SECTION 3.01. Base Rental Payments ..................................................................... 7
SECTION 3.02. Additional Payments ....................................................................... 7
SECTION 3.03. Fair Rental Value ............................................................................ 9
SECTION 3.04. Payment Provisions ......................................................................... 9
SECTION 3.05. Appropriations Covenant .............................................................. 10
SECTION 3.06. Rental Abatement.......................................................................... 11
SECTION 3.07. Use of Proceeds............................................................................. 11
SECTION 3.08. Net Proceeds ................................................................................. 12
ARTICLE IV MAINTENANCE; ALTERATIONS AND ADDITIONS .................................... 13
SECTION 4.01. Maintenance and Utilities ............................................................. 13
SECTION 4.02. Changes to the Facilities ............................................................... 13
SECTION 4.03. Installation of County’s Equipment .............................................. 13
ARTICLE V INSURANCE .......................................................................................................... 14
SECTION 5.01. Fire and Extended Coverage Insurance ........................................ 14
SECTION 5.02. Liability Insurance ........................................................................ 15
SECTION 5.03. Rental Interruption or Use and Occupancy Insurance .................. 16
SECTION 5.04. Worker’s Compensation ............................................................... 16
SECTION 5.05. Title Insurance .............................................................................. 17
SECTION 5.06. Insurance Proceeds; Form of Policies ........................................... 17
SECTION 5.07. Annual Certificates ....................................................................... 17
ARTICLE VI DEFAULTS AND REMEDIES ............................................................................ 18
SECTION 6.01. Defaults and Remedies ................................................................. 18
SECTION 6.02. Waiver ........................................................................................... 21
ARTICLE VII EMINENT DOMAIN; PREPAYMENT .............................................................. 22
SECTION 7.01. Eminent Domain ........................................................................... 22
SECTION 7.02. Prepayment ................................................................................... 22
SECTION 7.03. Option to Purchase; Sale of Personal Property ............................. 23
ARTICLE VIII COVENANTS..................................................................................................... 24
SECTION 8.01. Right of Entry ............................................................................... 24
SECTION 8.02. Liens .............................................................................................. 24
4828-6206-0864.4
TABLE OF CONTENTS
(continued)
Page
ii
SECTION 8.03. Quiet Enjoyment ........................................................................... 25
SECTION 8.04. Authority Not Liable ..................................................................... 25
SECTION 8.05. Assignment by the Authority ........................................................ 25
SECTION 8.06. Assignment and Subleasing by the County .................................. 25
SECTION 8.07. Title to Facilities ........................................................................... 26
SECTION 8.08. Tax Covenants .............................................................................. 26
SECTION 8.09. Reserved ........................................................................................ 26
SECTION 8.10. Taxes ............................................................................................. 26
SECTION 8.11. Authority’s Purpose ...................................................................... 27
SECTION 8.12. Purpose of Facilities Lease ........................................................... 27
SECTION 8.13. Essential Use ................................................................................. 27
SECTION 8.14. Nondiscrimination......................................................................... 27
ARTICLE IX DISCLAIMER OF WARRANTIES; VENDOR’S WARRANTIES; USE
OF THE FACILITIES .................................................................................................................. 28
SECTION 9.01. Disclaimer of Warranties .............................................................. 28
SECTION 9.02. Vendor’s Warranties ..................................................................... 28
SECTION 9.03. Use of the Facilities ...................................................................... 28
ARTICLE X MISCELLANEOUS ............................................................................................... 29
SECTION 10.01. Law Governing ............................................................................. 29
SECTION 10.02. Notices .......................................................................................... 29
SECTION 10.03. Validity and Severability .............................................................. 30
SECTION 10.04. Net-Net-Net Lease ........................................................................ 30
SECTION 10.05. Section Headings .......................................................................... 30
SECTION 10.06. Amendment or Termination .......................................................... 30
SECTION 10.07. Execution ...................................................................................... 31
SECTION 10.08. Third-Party Beneficiary ................................................................ 31
EXHIBIT A Description of the Facilities............................................................................... A-1
EXHIBIT B Base Rental Payment Schedule ......................................................................... B-1
EXHIBIT C Lease Terms....................................................................................................... C-1
EXHIBIT D Capital Projects .................................................................................................. D-1
EXHIBIT E Form of Budget Certificate .................................................................................E-1
EXHIBIT F Form of Insurance Certificate ............................................................................. F-1
1
FACILITIES LEASE
This Facilities Lease, dated as of [March] 1, 2017, by and between the COUNTY OF
CONTRA COSTA PUBLIC FINANCING AUTHORITY (the “Authority”), a joint exercise
powers authority duly organized and existing under and by virtue of the laws of the State of
California, as sublessor, and the COUNTY OF CONTRA COSTA (the “County”), a body
corporate and politic and a political subdivision of the State of California, as sublessee;
W I T N E S S E T H:
WHEREAS, the Authority, at the request of the County, is refunding all of its
outstanding Lease Revenue Bonds (Refunding and Various Capital Projects), 2007 Series A (the
“2007 Series A Bonds”), Lease Revenue Bonds (Medical Center Refunding), 2007 Series B (the
“2007 Series B Bonds” and, together with the 2007 Series A Bonds, the “2007 Refunded
Bonds”), and its Lease Revenue Bonds (Capital Projects Program), 2009 Series A (the “2009
Series A Bonds,” and together with the 2007 Refunded Bonds, the “Refunded Bonds”);
WHEREAS, the County has determined to finance and refinance the construction,
renovation and acquisition of various capital projects of the County as set forth in Exhibit D
hereto, as the same may be changed from time to time (the “Capital Projects”);
WHEREAS, the Authority intends to assist the County in financing and refinancing the
Capital Projects and refunding the Refunded Bonds by issuing the County of Contra Costa Public
Financing Authority Lease Revenue Bonds (Refunding and Capital Projects), 2017 Series A (the
“Bonds”), pursuant to the Trust Agreement dated as of March 1, 2017 (as amended,
supplemented, modified or restated from time to time, the “Trust Agreement”), by and between
the Authority and Wells Fargo Bank, National Association, as trustee;
WHEREAS, the County will lease to the Authority certain capital assets of the County
(as further defined herein, the “Facilities”) pursuant to a Site Lease, dated as of [March] 1, 2017
(as amended, supplemented, modified or restated from time to time, the “Site Lease”), between
County and the Authority;
WHEREAS, the County will lease back the Facilities from the Authority pursuant to the
terms of this Facilities Lease; and
WHEREAS, under this Facilities Lease, the Co unty will be obligated to make Base
Rental Payments and Additional Payments (each as defined herein) to the Authority for the lease
of the Facilities and such other facilities as may from time to time be leased hereunder;
WHEREAS, the Authority has assigned the Base Rental Payments and the Additional
Payments to be made hereunder to the Trustee pursuant to the Trust Agreement for purposes of
payment of the Bonds and all obligations due and owing the Purchaser or any Bondholder under
the Continuing Covenant Agreement dated as of [March] 1, 2017 (the “Continuing Covenant
Agreement”), among the County, the Authority and Wells Fargo Bank, National Association, as
initial purchaser of the Bonds;
4828-6206-0864.4
2
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 Facilities 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.
“Additional Payments” means all amounts payable to the Authority, the Purchaser or
the Trustee or any other person from the County as Additional Payments pursuant to Section
3.02 hereof.
“Architects” means the architects, engineers or designers of the Capital Projects or any
portion thereof, and any successor or successors to any thereof.
“Authority” means the County of Contra Costa Public Financing Authority, acting as
sublessor hereunder and any surviving, resulting or transferee entity.
“Base Rental” and “Base Rental Payments” means all amounts payable to the Authority
from the County as Base Rental Payments pursuant to Section 3.01 hereof.
“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.
“Bonds” has the meaning set forth in the recitals.
“Capital Projects” means the various public capital improvements and projects,
including, but not limited to the acquisition, installation, implementation and construction of the
2017 Project, as set forth in Exhibit D hereto, as the same may be amended from time to time by
a Certificate of the County delivered to the Trustee, to be financed or refinanced by a portion of
the proceeds of the Bonds.
“Code” means the Internal Revenue Code of 1986, as the same shall be herea fter
amended, and any regulations heretofore issued or which shall be hereafter issued by the United
States Department of the Treasury thereunder.
“Continuing Covenant Agreement” means the Continuing Covenant Agreement dated
as of [March] 1, 2017, among the County, the Authority and the Purchaser, as it may from time
to time be amended, supplemented, modified or restated pursuant to the provisions thereof.
“Contractors” means the construction contractor for any portion of the Capital Projects
and any successor or successors to any thereof.
4828-6206-0864.4
3
“County” means the County of Contra Costa, California, a body corporate and politic
and a political subdivision of the State of California.
“Default Rate” has the meaning set forth in the Continuing Covenant Agreement.
“Event of Default” shall have the meaning specified in Section 6.01 hereof.
“Facilities” shall mean the real property and the improvements thereon as described in
Exhibit A hereto, or any County buildings, other improvements and facilities, added thereto or
substituted therefor, or any portion thereof, in accordance with this Facilities Lease and the Trust
Agreement.
“Facilities Lease” means this Facilities 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.
“Insurance Consultant” means an individual or firm retained by the County as an
independent insurance consultant, with experience in the field of risk management.
“Net Proceeds” means amounts derived from any policy of casualty insurance or title
insurance with respect to the Facilities, or the proceeds of any taking of the Facilities or any
portion thereof in eminent domain proceedings (including sale under threat of such proceedings),
to the extent remaining after payment therefrom of all expenses incurred in the collection and
administration thereof.
“Purchaser” has the meaning set forth in the Continuing Covenant Agreement.
“Refunded Bonds” means (i) the County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Various Capital Projects), 2007 Series A, (ii) the County
of Contra Costa Public Financing Authority Lease Revenue Bonds (Medical Center Refunding),
2007 Series B and (iii) the County of Contra Costa Public Financing Authority Lease Revenue
Bonds (Capital Projects Program), 2009 Series A. The 2007 Series A Bonds and the 2007
Series B Bonds were issued pursuant to a trust agreement, dated as of February 1, 1999 (the
“1999 Trust Agreement”), as supplemented and amended, by and between the Authority and
Wells Fargo Bank, National Association, as trustee (the “Trustee”), and the 2009 Series A Bonds
were issued pursuant to a trust agreement, dated as of June 1, 2009 (the “2009 Trust
Agreement”), by and between the Authority and the Trustee.
“Rental Payment Period” means the twelve month period commencing June 1 of each
year and ending the following May 31, and the initial period commencing on the effective date
hereof and ending the following May 31.
“Taxable Rate” means, for each day from and after the T axable Date, the product of
(i) the interest rate on interest component of Base Rental Payments for such day and (ii) 1.54.
[“Taxable Rate Factor” means, for each day that the Taxable Rate is determined, the
quotient of (i) one divided by (ii) one minus the Maximum Federal Corporate Tax Rate in effect
as of such day, rounded upward to the second decimal place.]
4828-6206-0864.4
4
“Trust Agreement” means the Trust Agreement, dated as of [March] 1, 2017, by and
between the Trustee and the Authority and acknowledged by the County, 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 thereof.
“2017 Project” means the: (i) improvements to the Contra Costa Regional Medical
Center, located at 2500 Alhambra Avenue in the City of Martinez; (ii) expansion and
improvements to the Pittsburg Health Center, located at 2311 Loveridge Road in the City of
Pittsburg; (iii) improvements to the Contra Costa Health Services, located at 595 Center Avenue
and 597 Center Avenue in the City of Martinez; and (iv) improvements to the Women, Infant &
Children Building, located at 13601 San Pablo Avenue in the City of San Pablo, and payment of
any costs associated with financing of said projects, as set forth in Exhibit D hereto, as the same
may be changed from time to time, in accordance with Section 3.07 hereof, by a Certificate of
the County delivered to the Trustee.
ARTICLE II
LEASE OF FACILITIES; TERM
SECTION 2.01. Lease of Facilities. The Authority hereby leases to the County and the
County hereby leases from the Authority the Facilities, subject, however, to all easements,
encumbrances, and restrictions that exist at the time of the commencement of the term of this
Facilities Lease, as defined in Section 2.02 hereof. The County hereby agrees and covenants
during the term of this Facilities Lease that, except as hereinafter provided, it will use the
Facilities for public and County purposes so as to afford the public the benefits contemplated by
this Facilities Lease.
SECTION 2.02. Term; Occupancy; and Release of Existing Facilities. The term of this
Facilities Lease shall commence on the date of recordation of this Facilities Lease in the office of
the County Recorder of Contra Costa County, State of California, or on [March 3], 2017,
whichever is earlier, and shall end for the respective Facilities on the dates specified in Exhibit C
hereto, unless such term is extended or sooner terminated as hereinafter provided. If on such
dates, the Base Rental Payments and Additional Payments attributable to the related Facility and
all other amounts then due hereunder with respect to such Facility, or any amount remains due
and owing with respect to the Bonds or under the Continuing Covenant Agreement, shall not be
fully paid, or if the rental payable hereunder with respect to such Facility shall have been abated
at any time and for any reason, then the term of this Facilities Lease with respect to such Facility
shall be extended until the Base Rental Payments and Additional Payments attributable to such
Facility and all other amounts then due hereunder with respect to such Facility shall be fully
paid, except that the term of this Facilities Lease as to the respective Facility shall in no even t be
extended beyond ten (10) years after the date identified with respect thereto. If prior to such date,
all Base Rental Payments and all Additional Payments attributable to the related Facility and all
other amounts then due hereunder with respect to such Facility, and all amounts due and owing
with respect to the Bonds and under the Continuing Covenant Agreement, shall be fully paid, or
provision therefor made, the term of this Facilities Lease with respect to such Facility shall end
ten (10) days thereafter or upon written notice by the County to the Authority, whichever is
earlier; [provided that with respect to any provision for payment being made whether by
4828-6206-0864.4
5
defeasance or otherwise, this Facilities Lease shall remain outstanding for federal tax purposes
until the actual payment in full of all principal and interest on the Bonds.]
Upon the expiration of the term of this Facilities Lease with respect to a particular
Facility pursuant to the preceding paragraph, the respective Facility shall be released from this
Facilities Lease without compliance with the release requirements set forth in Section 2.03
[below; provided that no Facility shall be released from this Facilities Lease (i) if, after giving
effect to the release of such Facility, a Default or Event of Default would occur hereunder, under
the Trust Agreement or under the Continuing Covenant Agreement, (ii) unless the County has
delivered a certificate to the Purchaser and the Trustee demonstrating that the fair rental value of
the remaining Facilities for each Base Rental Period is at least equal to the maximum Lease
Payments to be made under the Facilities Lease in each such Rental Payment Period, (iii) if any
material litigation or environmental issues exist with respect to the remaining Facilities and (iv)
if any event giving rise to an abatement of Base Rental Payments shall have occurred and be
continuing.]
SECTION 2.03. Substitution; Release; Addition of Property. The County and the
Authority may add, substitute or release real property as part of the Facilities, but only after the
County shall have filed with the Authority and the Trustee and the Purchaser all of the following:
(a) Executed copies of the Facilities Lease or amendments thereto containing
the amended description of the Facilities.
(b) A Certificate of the County with copies of the Facilities Lease or the Site
Lease, if needed, or amendments thereto containing the amended description of the Facilities
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, supported by expert knowledge (which may
be that of the Real Estate Manager of the County) or construction cost information evidencing
that the fair market value or the insured value of the Facilities that will constitute the Facilities
after such addition, substitution or release will be at least equal to the aggregate outstanding
principal amount of the Base Rental Payments and the amount of any Additional Payments then
determinable after such addition, substitution or release, and that the annual fair rental value of
the Facilities after such addition, substitution or release will be at least equal to the maximum
annual Base Rental Payments coming due and payable hereunder after such addition, substitution
or release, and that the useful life of such Facilities will at least extend to the final Base Rental
Payment date.
(d) In connection with any addition or substitution of property, a leasehold
owner’s title insurance policy or policies or a commitment for such policy or policies or an
amendment or endorsement to an existing title insurance policy or policies subject only to
Permitted Encumbrances resulting in title insurance with respect to the Facilities after such
addition or substitution in an amount at least equ al to the aggregate principal amount of Bonds
Outstanding at the time of substitution or addition of Facilities.
4828-6206-0864.4
6
(e) A Certificate of the County stating that (i) such addition, substitution or
release does not adversely affect the County’s use and occupancy of the Facilities (as such term
will be defined following the addition, substitution or release) and (ii) no Default or Event of
Default has occurred and is continuing hereunder, under the Trust Agreement or under the
Continuing Covenant Agreement.
(f) In connection with any substitution or release of property, (i) a Certificate
of the County stating that the substitution or release will not cause the County to violate its
covenants, representations and warranties hereunder, under the Trust Agreement or the
Continuing Covenant Agreement and (ii) the prior written consent of the Purchaser to such
substitution or release of property and (iii) an appraisal or other written documentation prepared
by a mutually agreeable third party that establishes that the fair market value of the property
which remains subject to the Facilities Lease and the Site Lease following such substitution or
release is at least equal to the aggregate outstanding principal amount of the Base Rental
Payments and Additional Payments which are determinable, and the fair rental value of the
Facilities which remains subject to this Facilities Lease and the Site Lease following such
removal is at least equal to the Base Rental Payments and the amount of any Additional
Payments then determinable thereafter coming due and payable under the Facilities Lease, (iv)
no Default or Event of Default shall have occurred and be continuing hereunder, under the Trust
Agreement or under the Continuing Covenant Agreement and (v) no event giving rise to an
abatement of Base Rental Payments shall have occurred or be continuing with respect to this
Facilities Lease or any Facility.
(g) In connection with any substitution of property, a Certificate of the County
stating that the Facility to be added is of approximately the same or greater degree of essentiality
to the County as the Facility being replaced.
(h) In connection with the addition of property, a Certificate of the County
stating that the Facility to be added is an essential facility of the County.
(i) An Opinion of Counsel stating that such amendment or modification of
the Site Lease and the Facilities Lease and the substitution, release or addition of property (i)
complies with the terms of the Constitution and laws of the State and of the Trust Agreement and
this Facilities Lease; (ii) will, upon the execution and delivery thereof, be valid and binding upon
the Authority and the County; and (iii) will not cause the interest on the Bonds to be included in
gross income for federal income tax purposes.
(j) The Purchaser shall have received environmental questionnaires, surveys and/or
studies with respect to substitution or addition of property, and other documents that the
Purchaser may reasonably require; provided, however, that if the environmental studies have
recommended that remedial action be taken with respect to the substitute or additional property
so that it will be in compliance with applicable environmental laws, the Authority, at the
direction of the Purchaser, does not have an obligation or duty to accept t he substitute or
additional property until such time as the remedial action has been completed and the Purchaser
has received assurances to its satisfaction that the substitute or additional property is in
compliance with applicable environmental laws.
4828-6206-0864.4
7
(k) The Purchaser shall have received confirmation that the substitute or additional
property is not located in a 100 year flood area as shown on a Flood Insurance Rate Map
published by the Federal Emergency Management Agency.
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 Facilities (subject to the provisions of
Sections 3.04, 3.06 and 7.01 of this Facilities Lease) annual rental payments with principal and
interest components, the interest components being payable semi-annually, in accordance with
the Base Rental Payment Schedule attached hereto as Exhibit B and made a part hereof. The
County is hereby directed to pay all such Base Rental Payments directly to the Trustee for
application as provided in the Trust Agreement. Base Rental Payments shall be calculated on an
annual basis, for each Rental Payment Period, and each annual Base Rental shall be divided into
two interest components, due on December 1 and June 1, and one principal component, due on
June 1, except that the first Rental Payment Period commences on the date of recordation of this
Facilities Lease and ends on May 31, 20[17]. Each Base Rental Payment installment shall be
payable on the third Business Day immediately preceding its due date. 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
Facilities.
If the term of this Facilities Lease shall have been extended pursuant to Section 2.02
hereof, Base Rental Payment installments shall continue to be due on December 1 and June 1 in
each year, and payable prior thereto as hereinabove described, continuing to and including the
date of termination of this Facilities Lease. Upon such extension of this Facilities Lease, the
Purchaser shall deliver to the Trustee and the County a Certificate satisfactory to the County
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.
If at any time the Base Rental shall not have been paid by the County when due, for any
reason whatsoever, and no other source of funds shall have been available to make the payments
of principal and interest on the Bonds, the principal and interest components of the Base Rental
shall be recalculated by the Purchaser in a manner satisfactory to the County to reflect interest on
the unpaid Base Rental Payments at the Default Rate. Upon request by the Authority or the
Trustee, a revised Exhibit B to this Facilities Lease in form and substance satisfactory to the
County shall be prepared by the Purchaser and supplied to the Authority, the County and the
Trustee reflecting such recalculation.
SECTION 3.02. Additional Payments. The County shall also pay such amounts as
shall be required by the Authority or the Purchaser, as applicable, for the payment of all costs
4828-6206-0864.4
8
and expenses incurred by the Authority or the Purchaser in connection with the execution,
performance or enforcement by the Authority or the County, as applicable, of this Facilities
Lease, or any pledge of Base Rental payable hereunder, the Trust Agreement, the Continuing
Covenant Agreement (to the extent not otherwise payable from Revenues), its interest in the
Facilities and the lease of the Facilities 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 Facilities,
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 terms of the Bonds or of the Trust Agreement and all obligations
due and owing the Purchaser or any other Bondholder under the Continuing Covenant
Agreement[; but not including any Additional Payments amounts required to pay the principal of
or interest on the Bonds.]
Such Additional Payments shall be billed to the County by the Authority, the Purchaser
or such other applicable Bondholder or the Trustee from time to time, together, if applicable,
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 County, the Authority or the Trustee for such items. Amounts so
billed shall be paid by the County to the billing party within 30 days after receipt of the bill by
the County. The County reserves the right to audit billings for Additional Payments althou gh
exercise of such right shall in no way affect the duty of the County to make full and timely
payment for all Additional Payments.
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 capital improvements other than the Capital Project. The
administrative costs of the Authority shall be allocated among the facilities subject to such other
lease agreements and the Facilities, as hereinafter in this paragraph provided. The fees of the
Trustee under the Trust Agreement, and any other expenses directly attributable to the Facilities
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 Facilities, shall not be included in the administrative costs of the Facilities and shall not be
paid from the Additional Payments payable hereunder. Any expenses of the Authority not
directly attributable to any particular lease of the Authority shall be equitably allocated among all
such leases, including this Facilities Lease, in accordance with sound accounting practice. In the
event of any question or dispute as to such allocation, the written opinion of an independent firm
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 Written Request of the Authority, with the approval of the
County Administrator or the County Finance Director, 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 related to the lease of the Facilities.
4828-6206-0864.4
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[Other than the principal and interest on the Bonds payable from Base Rental Payments
hereunder, the amounts payable to the Purchaser and the other Bondholders under the Continuing
Covenant Agreement constitute Additional Payments under this Section 3.02 that the County
shall pay to the Authority or the Trustee for payment to the Purchaser or to the Purchaser directly
at the time and in the amounts due pursuant to the Continuing Covenant Agreement.]
SECTION 3.03. Fair Rental Value. The payments of Base Rental Payments and
Additional Payments for each Rental Payment Period during the term of this Facilities Lease
shall constitute the total rental for said Rental Payment 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 Facilities during each such Rental Payment Period for
which said rental is to be paid. The parties hereto have agreed and determined that such total
rental payable for each Rental Payment Period does not exceed the fair rental value of the
Facilities for each such period.
In making such determination, consideration has been given to the value of the Facilities,
costs of acquisition, design, construction and financing of the Facilities, other obligations of the
parties under this Facilities Lease, the uses and purposes which may be served by the Facilities
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 in immediately available funds to
the Trustee or as otherwise designated by the Purchaser. Any such installment of Base Rental
Payments or Additional Payments accruing hereunder which shall not be paid when due and
payable under the terms of this Facilities Lease shall bear interest at the Default Rate 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 Base Rental Payments and Additional Payments when due without
deduction or offset of any kind and shall not withhold any Base Rental Payments or Additional
Payments pending the final resolution of such dispute. In the event of a determination that the
County was not liable for said Base Rental Payments and Additional 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 paid by the County to the Purchaser pursuant to this Section on any date
shall be reduced to the extent that amounts on deposit in the Revenue Fund, the Interest Account
or the Principal Account are available therefor. The interest component of Base Rental Payments
shall initially be calculated based upon the Interest Rate and thereafter shall automatically and
immediately be adjusted from time to time (and Exhibit B hereto shall be revised by the
Purchaser or deemed to be revised to correspond with such adjustments) as follows:
(i) from and after any Taxable Date, the interest component of Base Rental
Payments shall automatically and immediately be increased to bear
interest at the Taxable Rate (which interest component may be further
increased to account for the Default Rate upon an Event of Default); and
(ii) upon the occurrence of an Event of Default, the interest component of
Base Rental Payments shall automatically and immediately be increased to
4828-6206-0864.4
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bear interest at equal the Default Rate (which interest component may be
further increased to account for the Taxable Rate from and after any
Taxable Date).
If any rental payment date or other date specified herein for payment of any Base Rental
Payment hereunder shall not be a Business Day, such payment may made on the next succeeding
Business Day but interest shall continue to accrue on such amount until the payment in full of
such amount.
With respect to any adjustments to the interest component of Base Rental Payment
provided for in this Section 3.04, the Purchaser may provide a revised Exhibit B to reflect the
new interest component based on the adjustments to the applicable interest rate.
Notwithstanding the foregoing, all increases to the interest component described in this Section
3.04 shall immediately and automatically become effective regardless of whether any such
revision to Exhibit B is provided by the Purchaser.
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 Paym ents 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.
Nothing contained in this Facilities 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 Facilities in the
event of damage to or the destruction of the Facilities.
SECTION 3.05. Appropriations Covenant. 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,
the Purchaser and the Trustee within sixty (60) days of adoption of the final County budget a
Certificate of the County (in the form set forth in Exhibit E attached hereto) 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 performance of the official duty of such officials to enable the County to
carry out and perform the covenants and agreements in this Facilities Lease agreed t o be carried
out and performed by the County.
The County covenants that in the event that any rentals paid by the County hereunder are
insufficient to pay when due any Base Lease Rentals or Additional Rentals payable hereunder
(including any amounts due under the Continuing Covenant Agreement), the County shall take
4828-6206-0864.4
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all actions as are necessary to budget and appropriate all such Base Rental Payments and
Additional Payments (including amounts due under the Continuing Covenant Agreement) in a
supplemental or amendatory budget, in order to make all necessary additional appropriations to
pay all such amounts when due. 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 performance of the official duty of such officials to enable the County to
carry out and perform the covenants and agreements in this Facilities 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. Base Rental Payments and Additional
Payments due hereunder shall be payable only from current funds which are budgeted and
appropriated 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 Facilities.
[This Facilities Lease shall not create an immediate indebtedness for any aggregate payments
which may become due hereunder in the event that the term of the Facilities 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.
SECTION 3.06. Rental Abatement. The Base Rental Payments and Additional
Payments shall be abated 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 Facilities by the County, to the extent the Base Rental
Payments and Additional Payments exceed the fair rental value for the use and occupancy of that
portion of the Facilities that has not been rendered unusable as reasonably determined by the
County. Such abatement shall continue for the period commencing with such damage or
destruction and ending with the substantial restoration of use or completion of the work of repair
or reconstruction. In the event of any such damage or destruction, this Facilities Lease shall
continue in full force and effect and the County waives any right to terminate this Facilities
Lease by virtue of any such damage or destruction. Notwithstanding the foregoing, the Base
Rental Payments are not subject to abatement to the extent that rental interruption insurance
proceeds are available to pay Base Rental Payments which would otherwise be abated under this
Section 3.06, it being hereby declared that such amounts constitute special funds for the payment
of the Base Rental Payments.
SECTION 3.07. Use of Proceeds. The parties hereto agree that the proceeds of the
Bonds will be used to finance or refinance the Capital Projects, to refund the Refunded Bonds
and to pay the costs of issuing the Bonds and incidental and related expenses.
The County hereby agrees to construct the Capital Projects from the proceeds of the
Bonds provided for such purpose to the County by the Authority in consideration for the
4828-6206-0864.4
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leasehold interest in the real property comprising the Facilities. The Authority and the County
agree that the Capital Projects will be constructed in accordance with the plans and specifications
prepared by the designers of the Capital Projects and approved by the County.
The County may alter the 2017 Project or issue change orders altering the construction
contract plans and specifications during the course of construction, and the Authority agrees to
cooperate fully with the County to cause such alterations or change order s to be implemented.
Failure of the County to complete the 2017 Project shall not cause an abatement of Base Rental
or Additional Payments hereunder.
SECTION 3.08. Net Proceeds. If any of the Facilities are taken in eminent domain
proceedings at any time during the term of this Facilities Lease, or if any of the Facilities are
damaged due to an insured casualty which is covered by insurance, the County shall as soon as
practicable after such event, with the prior written consent of the Purchaser, apply the Net
Proceeds resulting therefrom to one of the following:
(a) repair and restore such Facilities to full use in accordance with the
provisions of the Trust Agreement;
(b) replace such Facilities, [at the County’s sole cost and expense,] with
property of equal or greater value to such Facilities immediately prior to
the time of such destruction or damage, such replacement Facilities to be
subject to Section 2.03 hereof, whereupon such replacement shall be
substituted in this Facilities Lease;
(c) substitute additional property as provided in Section 2.03; or
(d) prepay the Base Rental Payments and as Additional Rental any amounts
due and owing under the Continuing Covenant Agreement, including
without limitation, any Breakage Fee under and as defined in the
Continuing Covenant Agreement in accordance with Section 7.02.
The County will notify the Authority and the Purchaser of which course of action it has
elected to take within a reasonable time not to exceed 60 days after the occurrence of such
eminent domain proceedings or such destruction or damage. Such repair, replacement,
substitution or prepayment shall commence not later than 60 days after the occurrence of such
taking, destruction or damage and be pursued diligently to completion. The Authority may (but
is not required to) in its own name or in the County’s name execute and deliver proofs of claim,
receive all such moneys, endorse checks and other instruments representing payment of such
moneys, and adjust, litigate, compromise or release any claim against the issuer of any such
policy, and the County hereby grants to the Authority a power of attorney coupled with an
interest to accomplish all or any of the foregoing.
Notwithstanding anything in this Section 3.08 to the contrary, the Purchaser shall grant
its consent to the repair and restoration or replacement of the Facilities to full use if the County
shall demonstrate to the reasonable satisfaction of the Purchaser that the Net Proceeds, together
with any other lawfully available funds of the County to be used for such repair and restoration ,
are sufficient to pay for the costs of such repair and restoration in full.
4828-6206-0864.4
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ARTICLE IV
MAINTENANCE; ALTERATIONS AND ADDITIONS
SECTION 4.01. Maintenance and Utilities. During such time as the County is in
possession of the Facilities, all maintenance and repair, both ordinary and extraordinary, of the
Facilities shall be the responsibility of the County, which shall at all times maintain or otherwise
arrange for the maintenance of the Facilities in first class condition, and the County shall pay for
or otherwise arrange for the payment of all utility services supplied to the Facilities, 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 Facilities 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 Facilities. In exchange for the rental herein
provided, the Authority agrees to provide only the Facilities.
SECTION 4.02. Changes to the Facilities. Subject to Section 8.02 hereof, the County
shall, at its own expense, have the right to remodel the Facilities or to make additions,
modifications and improvements to the Facilities. All such additions, modifications and
improvements shall thereafter comprise part of the Facilities and be subject to the provisions of
this Facilities Lease. Such additions, modifications and improvements shall not in any way
damage the Facilities or cause them to be used for purposes other than those authorized under the
provisions of state and federal law; and the Facilities, 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 Facilities immediately prior to the making of such additions,
modifications and improvements and the fair rental value of the Facilities in the then current and
all succeeding Rental Payment Periods will not be less than Base Rental Payments and
Additional Payments due in any such Rental Payment Period.
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
Facilities. 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 Facilities
resulting from the installation, modification or removal of any such items. Nothing in this
Facilities 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 Facilities.
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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
Facilities Lease, insurance against loss or damage to any structures constituting any part of the
Facilities by fire and lightning, with extended coverage insurance, vandalism and malicious
mischief insurance and sprinkler system leakage insurance and earthquake insurance, if available
on the open market from reputable insurance companies at a reasonable cost. Said extended
coverage insurance shall, as nearly as practicable, cover loss or damage by explosion,
windstorm, flood, riot and riot attending a strike, aircraft, vehicle damage, hail, smoke and such
other hazards as are normally covered by such insurance, including earthquake coverage if such
coverage is available at commercially reasonable cost from a reputable insurer in the reasonable
determination of the County. Such insurance shall be in an amount equal to the replacement cost
(without deduction for depreciation) of all structures constituting any part of the Facilities,
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 $250,000 or
comparable amount adjusted for inflation or more in the case of earthquake insurance), or, in the
alternative, shall be in an amount and in a form sufficient (together with moneys held under the
Trust Agreement), in the event of total or partial loss, to enable the County to prepay all or any
part of the Base Rental Payments then unpaid, pursuant to Section 7.02 hereof and to redeem
outstanding Bonds.
If at any time and for so long as any part of the Facilities is located in a 100 year flood
area as shown on a Flood Insurance Rate Map published by the Federal Emergency Management
Agency, the policy or policies of casualty insurance provided under this Section 5.01 shall
include insurance against loss or damage to the Facilities due to flooding. If the County obtains
an exception or waiver from Federal Emergency Management Agency to the designation of the
Facilities as being within a 100 year flood area, the County shall not be required to provide such
flood insurance.
The Authority and the County shall promptly apply for Federal disaster aid or State of
California disaster aid in the event that the Facilities are damaged or destroyed as a result of an
earthquake occurring at any time.
As an alternative to providing the insurance required by the first paragraph of this
Section, or any portion thereof, the County, 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. So long as such method or plan is
being provided to satisfy the requirements of this Facilities Lease, The County shall provide the
Purchaser, the Authority and the Trustee with a Certificate of the County setting forth the details
of such self insurance method or plan maintained by the County and such self insurance method
or plan shall comply with the following terms:
4828-6206-0864.4
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(i) the self insurance program shall be approved by an Insurance Consultant or other
qualified person (which may be the Risk Manager of the County);
(ii) the self insurance program shall include an actuarially sound claims reserve fund out
of which each self insured claim and any deductible amount required under any insurance policy
provided pursuant to this Section 5.01 shall be paid;
(iii) there shall be filed annually with the Trustee, the Authority and the Purchaser a
statement of an actuary, insurance consultantthe Insurance Consultant or other qualified person
(which may be the Risk Manager of the County), 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, the reserving methods and practices employed in establishing
and maintaining the substitute method or plan are appropriate, and the substitute method or plan
affords reasonable coverage for the risks required to be insured against. There;
(iv) the claims reserve fund shall also be filed a Certificate of the County setting forth
the details of such substitute method or plan. Inbe held in a separate fund by the County;
(v) 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 the self insurance program shall be discontinued, then the County
may not maintain deductibles in excess of the amounts described above..
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 Facilities Lease, 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 Facilities,
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 form of a single
limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be
maintained as part of or in conjunction with any other 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 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 protection adopted by public entities in the State of California other
than the County. So long as such method or plan is being provided to satisfy the requirements of
this Facilities Lease, The County shall provide the Purchaser, the Authority and the Trustee with
a Certificate of the County setting forth the details of such self insurance method or plan
maintained by the County and such self insurance method or plan shall comply with the
following terms:
4828-6206-0864.4
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(i) the self insurance program shall be approved by an Insurance Consultant or other
qualified person (which may be the Risk Manager of the County);
(ii) the self insurance program shall include an actuarially sound claims reserve fund out
of which each self insured claim and any deductible amount required under any insurance policy
provided pursuant to this Section 5.02 shall be paid;
(iii) there shall be filed annually with the Trustee, the Authority and the Purchaser a
statement of an actuary, independent insurance consultant the Insurance Consultant or other
qualified person (which may be the Risk Manager of the County), 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, the reserving methods and practices employed in establishing
and maintaining the substitute method or plan. are appropriate, and the substitute method or plan
affords reasonable coverage for the risks required to be insured against;
(iv) the claims reserve fund shall be held in a separate fund by the County;
(v) in the event the self insurance program shall be discontinued, then the County
may not maintain deductibles in excess of the amounts described above..
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, rental interruption
or use and occupancy insurance to cover loss, total or partial, of the rental income from or the
use of the Facilities as the result of any of the hazards covered by the insurance required by
Section 5.01 hereof (provided with respect to earthquake insurance, only if available on the open
market from reputable insurance companies at a reasonable cost, as determined by the County),
in an amount at least equal to the maximum Base Rental Payments coming due and payable
during any future 24 month period (determined by the County), except that such insurance may
be subject to a deductible clause of not to exceed two hundred and fifty thousand dollars
($250,000) or a comparable amount adjusted for inflation (or more in the case of earthquake
coverage), and with the additional exception that with respect to coverage for terrorism related
loss, the period may be only one year, provided that the County use its best efforts to obtain such
coverage for a period of at least two years assuming it is available on the open market from
reputable insurance companies at a reasonable cost, as determined by the County. 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 Facilities Lease attributable to such structure for a period of time
during which the payment of rental under this Facilities 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) and any remainder shall be treated as Revenue under the Trust Agreement.
The County shall not be entitled to self-insure for rental interruption insurance.
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
4828-6206-0864.4
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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 form of self-insurance.
SECTION 5.05. Title Insurance. The County shall obtain, for the benefit of the
Authority, upon the execution and delivery of this Facilities Lease, title insurance on the
Facilities insuring (a) the fee interest of the County in Facilities, (b) the Authority’s leasehold
estate in the Facilities under the Site Lease and (c) the County’s sub -leasehold estate hereunder
in the Leased Property, naming the Trustee as the insured, with such endorsements as reasonably
required by the Purchaser, in an amount equal to the aggregate principal amount of the Bonds,
issued by a company of recognized standing duly authorized to issue the same, subject only to
Permitted Encumbrances.
SECTION 5.06. Insurance Proceeds; Form of Policies. All policies of insurance
required by Sections 5.01 and 5.03 hereof shall name the County, the Authority, the Purchaser
and the Trustee each as insured and shall contain a lender’s loss payable endorsement in favor of
the Trustee and the Purchaser substantially in accordance with the form approved by the
Insurance Services Office and the California Bankers Association. The Trustee shall, to the
extent practicable, 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 Facilities Lease shall provide that the Trustee and the Purchaser 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 County. The County shall pay when due the premiums for all insurance policies required by
this Facilities Lease.
SECTION 5.07. Annual Certificates. The County will deliver to the Authority, the
Purchaser and the Trustee on or before September 15 in each year a written Certificate of an
officer of the County (in the form set forth in Exhibit F attached hereto) stating whether such
policies satisfy the requirements of this Facilities Lease, setting forth the insurance policies then
in force pursuant to this Article, 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 information 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.
4828-6206-0864.4
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Any policies of insurance provided by a commercial insurer to satisfy the requirements of
Sections 5.01, 5.02 or 5.03 hereof shall be provided by a commercial insurer rated in one of the
two highest rating categories by S&P and by Moody’s.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Defaults and Remedies. (a) If the County shall fail (i) to pay any Base
Rental Payment or Additional Payments payable hereunder when the same becomes due, time
being expressly declared to be of the essence of this Facilities Lease or fail to maintain any
insurance specified in Article V or (ii) keep, observe or perform any other term, covenant or
condition contained herein to be kept or performed by the County for a period of sixty (60) days
after notice of the same has been given to the County by the Authority, the Purchaser or the
Trustee or for such additional time as is reasonably required, in the sole discretion of the
Authority, with the prior written approval of the Purchaser 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 Facilities Lease. Upon any such default, the Authority or its assignee, with the
written consent of the Purchaser, 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 Facilities Lease in the manner hereinafter
provided on account of default by the County, notwithstanding any re-entry or re-letting
of the Facilities as hereinafter provided for in subparagraph (2) hereof, and to re -enter the
Facilities and remove all persons in possession thereof and all personal property
whatsoever situated upon the Facilities and place such personal property in storage in any
warehouse or other suitable place located within the County of Contra Costa, California,
at the expense of the County. In the event of such termination, the County agrees to
surrender immediately possession of the Facilities, without let or 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
Facilities 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 Facilities 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 Facilities nor the appointment of a receiver upon initiative of the
Authority to protect the Authority’s interest under this Facilities Lease shall of itself
operate to terminate this Facilities Lease, and no termination of this Facilities 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 Facilities
Lease. The County covenants and agrees that no surrender of the Facilities or of the
remainder of the term hereof or any termination of this Facilities Lease shall be valid in
4828-6206-0864.4
19
any manner or for any purpose whatsoever unless stated or accepted by the Authority by
such written notice.
(2) Without terminating this Facilities 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 Facilities, or (ii) to exercise any and all rights of entry and re-entry upon
the Facilities. In the event the Authority does not elect to terminate this Facilities 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 Facilities are not re-let, to pay the full amount of the
rent to the end of the term of this Facilities Lease or, in the event that the Facilities 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 Facilities. 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 Facilities, 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 Facilities and to place
such personal property in storage in any warehouse or other suitable place located in the
County of Contra Costa, California, for, to the extent permitted by law, the account of
and at the expense of the County, and the County, to the extent permitted by law, hereby
exempts and agrees to save 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 Facilities 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 Facilities Lease constitute full and sufficient notice of
the right of the Authority to re-let the Facilities and to do all other acts to maintain or
preserve the Facilities as the Authority deems necessary or desirable in the event of such
re-entry without effecting a surrender of this Facilities Lease, and further agrees that no
acts of the Authority in effecting such re-letting shall constitute a surrender or
termination of this Facilities 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
Facilities 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 Facilities or any part thereof The County further agrees, to the
extent permitted by law, to pay the Authority the reasonable cost of any alterations or
additions to the Facilities necessary to place the Facilities in condition for re-letting
4828-6206-0864.4
20
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 Facilities as herein
provided and all claims for damages that may result from the destruction of or injury to the
Facilities 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 Facilities.
(b) If (1) the County’s interest in this Facilities 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, s tate 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 (3) the
County shall abandon or vacate the Facilities, (4) any representation or warranty made by the
County herein proves to have been false, incorrect, misleading or breached in any material
respect on the date when made, or (5) the County shall receive notice from the Purchaser that an
“Event of Default” has occurred under the Continuing Covenant Agreement, then the County
shall be deemed to be in default hereunder.
(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 sixty (60) 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, the Authority or its assignee, with the written consent of the
Purchaser, shall be entitled to proceed to protect and enforce the rights vested in the Authority by
this Facilities Lease or by law. The provisions of this Facilities Lease and the duties of the
County and of its trustees, officers or employees shall be enforceable by the Authority or its
assignee by mandamus or other appropriate suit, action or proceeding in any court of competent
jurisdiction. Without limiting the generality of the foregoing, the Authority or its assignee, with
the written consent of the Purchaser, shall have the right to bring the following actions:
4828-6206-0864.4
21
(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.
(4) Acceleration. To declare the Bonds due and payable and apply
available funds in accordance with Section. 7.02 of the Trust Agreement.
The exercise of any rights or remedies under this Facilities Lease shall not permit
acceleration of Base Rental Payments.
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 Facilities. 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 or its assignee shall prevail in any action brought to
enforce any of the terms and provisions of this Facilities Lease, the County agrees to pay a
reasonable amount as and for attorney’s fees incurred by the Authority or its assignee 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. Notwithstanding
anything herein to the contrary, the termination of this Facilities Lease by the Authority on
account of a default by the County under this Section shall not effect or result in a termination of
the lease of the Facilities by the County to the Authority pursuant to the Site Lease.
SECTION 6.02. Waiver. Failure of the Authority or its assignee to take advantage of
any default on the part of the County shall not be, or be construed as, a waiver thereof, nor shall
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 or its assignee to
insist upon performance by the County of any term, 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 term, covenant or condition of this
Facilities Lease.
4828-6206-0864.4
22
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
SECTION 7.01. Eminent Domain. If the whole of the Facilities or so much thereof as
to render the remainder unusable for the purposes for which it was used by the County shall be
taken under the power of eminent domain, the term of this Facilities Lease shall cease as of the
day that possession shall be so taken. If less than the whole of the Facilities 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 Facilities 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 on the Outstanding Bonds
will be reduced by the application of the award in eminent domain to the redemption of
outstanding Bonds. So long as any of the Bonds shall be outstanding, any award made in eminent
domain proceedings for taking the Facilities 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 and to
the payment of any amounts owing under the Continuing Covenant Agreement and any
Additional Payments. Any such award made after all of the Base Rental Payments and
Additional Payments and payment of any amounts owing under the Continuing Covenant
Agreement 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
(including proceeds of title insurance) and eminent domain proceeds, to the extent provided in
Sections 3.08 and 7.01 hereof (provided, however, that in the event of partial damage to or
destruction of the Facilities caused by perils covered by insurance, if in the judgment of the
Authority and the Purchaser the insurance proceeds are sufficient to repair, reconstruct or replace
the damaged or destroyed portion of the Facilities, such proceeds shall be held by the Trustee
and used to repair, reconstruct or replace the damaged or destroyed portion of the Facilities,
pursuant to the procedure set forth in Section 3.08 for proceeds of insurance), all or any part of
Base Rental Payments then unpaid so that the aggregate annual amounts 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 Base Rental Payments unpaid prior to the
prepayment date (taking into account the reduction in Base Rental allocable to future interest on
the Bonds that are redeemed), at a prepayment amount equal to the redemption payment of the
maximum amount of Bonds, including the principal thereof and the interest thereon to the date of
redemption, plus any applicable premium redeemable from such proceeds owing pursuant to the
Trust Agreement or the Continuing Covenant Agreement, including without limitation, any
Breakage Fee under and as defined in the Continuing Covenant Agreement.
(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 defease Bonds corresponding to 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 on the Bonds to be includable in gross income
for federal income tax purposes. The County agrees that if following such prepayment the
Facilities are damaged or destroyed or taken by eminent domain, it is not entitled to, and by such
4828-6206-0864.4
23
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, the Purchaser 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 Facilities or any portion or item thereof, in trust for the benefit of the Owners of the
Bonds and irrevocably appropriated and set aside to the payment of the Base Rental Payments or
option price, sufficient moneys and Permitted 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 on the Bonds to the due date of the Bonds or date when the County may exercise its
option to purchase the Facilities, as the case may be; (2) all requirements of Section 10.01 of the
Trust Agreement have been satisfied; and (3) an agreement shall have been entered into with the
Trustee for the payment of its fees and expenses so long as any of the Bonds 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 Facilities 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 Permitted 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.
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 Facilities 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 funds to pay the aggregate amount for the
entire remaining term of this Facilities Lease of the part of the total rent hereunder attributable to
such part of the Facilities (determined by reference to the proportion which the cost of such part
of the Facilities bears to the cost of all of the Facilities). 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
4828-6206-0864.4
24
principal of the Bonds and interest on the Bonds and to redeem Bonds if such Bonds are subject
to redemption pursuant to the terms of the Trust Agreement. Upon the making of such payment
to the Trustee and the satisfaction of all requirements set forth in Section 10.01 of the Trust
Agreement, (a) the Base Rental thereafter payable under this Facilities Lease shall be reduced by
the amount thereof attributable to such part of the Facilities and theretofore paid pursuant to this
Section, (b) Section 3.06 and this Section of this Facilities Lease shall not thereafter be
applicable to such part of the Facilities, (c) the insurance required by Sections 5.01, 5.02 and
5.03 of this Facilities Lease need not be maintained as to such part of the Facilities, and (d) title
to such part of the Facilities shall vest in the County and the term of this Facilities Lease shall
end as to such Facilities.
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 Facilities, and to release said personal
property from this Facilities 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 Facilities, (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 $100,000, 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 Facilities. In the event of any such sale,
the full 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 Facilities Lease, be used upon the
Written Request of the County to purchase personal property, which property shall become a part
of the Facilities leased hereunder. The Authority may require such opinions, certificates and
other documents as it may deem necessary before permitting any sale or exchang e of personal
property subject to this Facilities Lease or before releasing for the purchase of new personal
property money received by it for personal property so sold.
ARTICLE VIII
COVENANTS
SECTION 8.01. Right of Entry. The Authority and its assignees shall have the right to
enter upon and to examine and inspect the Facilities 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 Facilities Lease, and (c) for all other
lawful purposes.
SECTION 8.02. Liens. [Neither the County nor the Authority shall, directly or
indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge,
encumbrance or claim on or with respect to any portion of the Facilities, other than the respective
rights of the Authority and the Purchaser as provided herein and Permitted Encumbrances.] In
the event the County shall at any time during the term of this Facilities Lease cause any changes,
alterations, additions, improvements, or other work to be done or performed or materials to be
supplied, in or upon the Facilities, the County shall pay, when due, all sums of money that may
4828-6206-0864.4
25
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 Facilities
and shall keep the Facilities free of any and all mechanics’ or materialmen’s liens or other liens
against the Facilities or the Authority’s interest therein. In the event any such lien attaches to or
is filed against the Facilities 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 n ot 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 the Purchaser and their respective members,
directors, agents, successors and assigns, harmless 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 Facilities or the Authority’s interest therein.
SECTION 8.03. Quiet Enjoyment. 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 Facilities Lease peaceably and quietly
have, hold and enjoy the Facilities 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 Facilities. The County, to the extent permitted by
law, shall indemnify and hold the Authority and any assignees and their respective members,
directors, officers, agents and employees, harmless from, and defend each of them against, any
and all claims, liens and judgments arising from the operation of the Facilities, including,
without limitation, death of or injury to any person or damage to property whatsoever occurring
in, on or about the Facilities regardless of responsibility for negligence, but excepting the active
negligence of the person or entity seeking indemnity.
SECTION 8.05. Assignment by the Authority. The Authority’s rights under this
Facilities Lease, including the right to receive and enforce payment of the Base Rental Payments
to be made by the County hereunder, have been pledged and assigned to the Trustee for the
benefit of the Bondholders pursuant to the Trust Agreement, to which pledge and assignment the
County hereby consents.
SECTION 8.06. Assignment and Subleasing by the County. Neither this Facilities
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 and the Purchaser, which, in the case of subletting, shall
not be unreasonably withheld; provided such subletting shall not affect the tax -exempt status of
the interest on the Bonds. 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.
4828-6206-0864.4
26
SECTION 8.07. Title to Facilities. During the term of this Facilities Lease, the
Authority shall hold a leasehold estate to the Facilities and any and all additions which comprise
fixtures, repairs, replacement or modifications thereof, except for those fixtures, repairs,
replacements or modifications which are added thereto by the County and which may be
removed without damaging the Facilities, and except for any items added to the Facilities by the
County pursuant to Section 4.02 hereof. This provision shall not operate to the benefit of any
insurance company if there is rental interruption covered by insurance pursuant to Section 5.03
hereof.
Upon the termination or expiration of this Facilities Lease upon payment in full of the
Base Rental Payments attributed to the Facilities and all amounts owing on the Bonds, the
Authority’s interest in the title to the Facilities shall vest in the County and the Authority shall
execute such conveyances, deeds and other documents as may be necessary to evidence the
ownership of the Facilities by the County and to clarify the title of the County on the record
thereof.
SECTION 8.08. Tax Covenants. (a) The County and the Authority shall at all times do
and perform all acts and things permitted by law which are necessary or desirable in order to
assure that the interest on the Bonds will be excluded from gross income for federal income tax
purposes under Section 103 of the Code and shall take no action that would result in such interest
not being excluded from gross income for federal income tax purposes. Without limiting the
generality of the foregoing, the Authority and the County covenant that they will comply with
the requirements of the Tax Certificate, which is incorporated herein as if fully set forth herein.
(b) If at any time the County or the Authority 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
Facilities Lease or the Trust Agreement, the County or the Authority shall so instruct the Trustee
or the appropriate officials of the County 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.
(c) In furtherance of the covenants of the County and the Authority set forth
above, the County will 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 and the Trustee for any actions taken by the Authority or the Trustee in
accordance with such instructions.
(d) The covenant of the County and the Authority herein shall survive
payment in full or defeasance of the Bonds.
SECTION 8.09. Reserved.
SECTION 8.10. 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 Facilities or the
respective interests or estates therein; provided that with respect to special assessments or other
4828-6206-0864.4
27
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 Facilities Lease as and when the same become due. The County waives the benefits of
subsections 1 and 2 of Section 1932, Section 1933(4) and Sections 1941 and 1942 of the
California Civil Code.
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, 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 for filing in a timely manner any returns, hereinafter
levied or imposed against the Authority or the Facilities, 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 shall notify the County that, in the opinion of
independent counsel, by nonpayment of any such items, the interest of the Authority in the
Facilities will be materially endangered or the Facilities, 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.
SECTION 8.11. Authority’s Purpose. The Authority covenants that, prior to the
discharge of this Facilities Lease, it will not engage in any activities inconsistent with the
purposes for which the Authority is organized.
SECTION 8.12. Purpose of Facilities Lease. The County covenants that during the
term of this Facilities Lease, except as hereinafter provided, (a) it will use, or cause the use of,
the Facilities for public purposes and for the purposes for which the Facilities are customarily
used, (b) it will not vacate or abandon the Facilities or any part thereof, and (c) it will not make
any use of the Facilities which would jeopardize in any way the insurance coverage required to
be maintained pursuant to Article V hereof
SECTION 8.13. Essential Use. The Facilities are essential to the proper, efficient and
economic operation of the County and serve an essential governmental function of the County.
SECTION 8.14. Nondiscrimination. The County herein covenants by and for itself, its
heirs, executors, administrators, and assigns, and all person claiming under or through itself, and
this Facilities Lease is made and accepted upon and subject to the following conditions: That
there shall be no discrimination against or segregation of any person or groups of persons, on
account of any basis listed in subdivision (a) or (d) of Section 12955 of the California
4828-6206-0864.4
28
Government Code, as those basis are defined in Sections 12926, 12926.1, subdivision (m) and
paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the California
Government Code, in leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of
the premises herein leased nor shall the County, or any person claiming under or through the
County, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees,
subtenants, or vendees in the premises herein leased.
ARTICLE IX
DISCLAIMER OF WARRANTIES;
VENDOR’S WARRANTIES; USE OF THE FACILITIES
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 FACILITIES OR THE PROJECT
OR WARRANTY WITH RESPECT THERETO. THE COUNTY ACKNOWLEDGES THAT
THE AUTHORITY IS NOT A MANUFACTURER OF THE FACILITIES OR THE PROJECT
OR A DEALER THEREIN, THAT THE COUNTY LEASES THE FACILITIES 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 Facilities Lease or the Project
or the existence, furnishing, functioning or the County’s use of any item or products or services
provided for in this Facilities Lease.
SECTION 9.02. Vendor’s Warranties. The Authority hereby irrevocably appoints the
County its agent and attorney-in-fact during the term of this Facilities 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 Facilities, which the Authority may have against the manufacturers,
vendors and contractors of the Facilities. 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 Facilities, and the Project, as applicable, 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 Facilities Lease, including the right to receive full and timely payments hereunder.
The County expressly acknowledges that the Authority makes, and has made, no repres entation
or warranties whatsoever as to the existence or availability of such warranties of the
manufacturer, vendor or contractor with respect to the Facilities and the Project.
SECTION 9.03. Use of the Facilities. The County will not install, use, operate or
maintain the Facilities improperly, carelessly, in violation of any applicable law or in a manner
contrary to that contemplated by this Facilities Lease. The County shall provide all permits and
licenses, if any, necessary for the installation and operation of the Facilities. In addition, the
County agrees to comply in all respects (including, without limitation, with respect to the use,
maintenance and operation of the Facilities) 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 Facilities; provided, however, that the County may contest in
4828-6206-0864.4
29
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
Facilities or its interest or rights under this Facilities Lease.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Law Governing. This Facilities 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, CA 94553
cc: County of Contra Costa
c/o County Finance Director
651 Pine Street, 10th Floor
Martinez, CA 94553
With respect to insurance matters:
County of Contra Costa
c/o Risk Manager
Risk Management Department
2530 Arnold Drive
Martinez, CA 94553
cc: County of Contra Costa
General Service Administration
1220 Morello Avenue, Suite 100
Martinez, CA 94553
cc: County of Contra Costa
c/o County Finance Director
651 Pine Street, 10th Floor
Martinez, CA 94553
4828-6206-0864.4
30
If to the Authority: County of Contra Costa Public
Financing Authority
c/o County Administrator
County Administration Building
651 Pine Street
Martinez, CA 94553
If to the Trustee: Wells Fargo Bank, National Association
Attn: Corporate Trust Services
333 Market Street, 18th Floor
San Francisco, CA 94103
If to the Purchaser: Wells Fargo Bank, National Association
100 W. Washington Street, 20th Floor
Phoenix, AZ 85003
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 Facilities 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 full term hereof, then and in such event this Facilities 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 Facilities, and
all of the rental and other terms, provisions and conditions of this Facilities Lease, except to the
extent that such terms, 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 Facilities 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. 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 Facilities Lease.
SECTION 10.06. Amendment or Termination. The Authority and the County may at
any time agree to the amendment, supplement or termination of this Facilities Lease and the Site
Lease; provided, however, that the Authority and the County agree and recognize that this
Facilities Lease and the Site Lease are entered into in accordance with the terms of the Trust
Agreement, and accordingly, that any such amendment or termination shall only be made or
effected in accordance with and subject to the terms of the Trust Agreement and with the prior
written consent of the Purchaser; provided however, that no such amendment or supplement shall
4828-6206-0864.4
31
extend the payment date of any Base Rental Payment, without the consent of each Bondholder so
affected.
SECTION 10.07. Execution. This Facilities 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 Facilities Lease. It is also agreed that separate counterparts of this Facil ities
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.
SECTION 10.08. Third-Party Beneficiary. The Purchaser is hereby designated as third
party-beneficiary hereunder solely for the purposes of enforcing any rights granted to the
Purchaser hereunder and not with to respect to any rights of occupancy.
4828-6206-0864.4
4828-6206-0864.4
S-1 [Facilities Lease]
IN WITNESS WHEREOF, the Authority and the County have caused this Facilities
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 Sublessor
By:
Federal D. Glover
Chair of the Board of Directors
Attest:
By:
David J. Twa
Executive Director and Secretary
of the Board of Directors
COUNTY OF CONTRA COSTA,
as Sublessee
By:
Federal D. Glover
Chair of the Board of Supervisors
Attest:
By:
David J. Twa
Clerk of the Board of Supervisors and
County Administrator
4828-6206-0864.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4828-6206-0864.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4828-6206-0864.4
A-1
EXHIBIT A
Description of the Facilities
All that certain real property situated in the County of Contra Costa, State of California,
described as follows:
4828-6206-0864.4
B-1
EXHIBIT B
Base Rental Payment Schedule
Aggregate of all Facilities
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
4828-6206-0864.4
B-2
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
Total: $ $ $ $
* Payable three Business Days before due date.
4828-6206-0864.4
B-3
[____] Building
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
Total: $ $ $ $
* Payable three Business Days before due date.
4828-6206-0864.4
B-4
[____] Facility
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
Total: $ $ $ $
* Payable three Business Days before due date.
4828-6206-0864.4
B-5
[______] Building
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
4828-6206-0864.4
B-6
Base Rental
Payment Date* Principal Interest Total Fiscal Year Total
Total: $ $ $ $
* Payable three Business Days before due date.
4828-6206-0864.4
C-1
EXHIBIT C
Lease Terms
Facility Term Maximum Extension
4828-6206-0864.4
D-1
EXHIBIT D
Capital Projects
“Capital Projects” means various public capital improvements and projects, including,
but not limited to: (i) improvements to the Contra Costa Regional Medical Center, located at
2500 Alhambra Avenue in the City of Martinez; (ii) expansion and improvements to the
Pittsburg Health Center, located at 2311 Loveridge Road in the City of Pittsburg; (iii)
improvements to the Contra Costa Health Services, located at 595 Center Avenue and 597
Center Avenue in the City of Martinez; and (iv) improvements to the Women, Infant & Children
Building, located at 13601 San Pablo Avenue in the City of San Pablo.
4828-6206-0864.4
E-1
EXHIBIT E
Form of Budget Certificate
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects)
2017 Series A
Certificate of Final Annual Budget for the Period __/__20__ through __/__20__
The undersigned, as an Authorized Representative of the County of Contra Costa (the
“County”), hereby certifies that the following have been budgeted for the above-referenced
period with respect to the annual appropriations for all Base Rental Payments and Additional
Payments, as required in Section 3.05 of the Facilities Lease, dated as of [March] 1, 2017,
between the County of Contra Costa Public Financing Authority and the County:
2017 Series A Total Budgeted
Base Rental Payment
Additional Payment
COUNTY OF CONTRA COSTA
By:
Authorized Representative
4828-6206-0864.4
F-1
EXHIBIT F
Form of Insurance Certificate
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects)
2017 Series A
Annual Insurance Certificate for the Period __/__20__ through __/__20__
The undersigned, as an Authorized Representative of the County of Contra Costa (the
“County”), hereby certifies that the insurance requirements as set forth in Section 5.07 of the
Facilities Lease, dated as of [March] 1, 2017, between the County of Contra Costa Public
Financing Authority and the County have been satisfied as evidenced by the attached list of
insurance policies, names of insurers issuing such policies, the property covered and the amount
of coverage.
COUNTY OF CONTRA COSTA
By:
Authorized Representative
4828-6206-0864.4
F-2
[Attach List of Insurance Coverage]
4828-6206-0864.4
CERTIFICATE OF ACCEPTANCE
(Government Code Section 27281)
This is to certify that the interest in real property conveyed by the foregoing Facilities
Lease from the County of Contra Costa Public Financing Authority to the County of Contra
Costa, a political subdivision of the State of California (the “County”), is hereby accepted by
order of the Board of Supervisors of the County of Contra Costa on February 14, 2017, and the
County consents to recordation thereof by its duly authorized officer.
COUNTY OF CONTRA COSTA,
as Sublessee
By:
Federal D. Glover
Chair, Board of Supervisors
County of Contra Costa, State of California
Attest:
By:
David J. Twa
Clerk of the Board of Supervisors and
County Administrator
4828-6206-0864.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s ) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4843-2161-1840.4
NP DRAFT 2/7/17
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
NIXON PEABODY LLP
300 South Grand Avenue, Suite 4100
Los Angeles, California 90071
Attention: Charles C. Wolf, Esq.
SITE LEASE
by and between the
COUNTY OF CONTRA COSTA
and the
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
Related to
$[________]
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Capital Projects)
2017 Series A
Dated as of [March] 1, 2017
THIS TRANSACTION IS EXEMPT FROM FILING FEES PURSUANT TO CALIFORNIA GOVERNMENT CODE
SECTION 6103 AND TRANSFER TAXES PURSUANT TO CALIFORNIA REVENUE AND TAXATION CODE
SECTION 11928
4843-2161-1840.4
TABLE OF CONTENTS
Page
i
SECTION 1. Lease of Facilities .............................................................................................. 2
SECTION 2. Term ................................................................................................................... 2
SECTION 3. Rental ................................................................................................................. 2
SECTION 4. Purpose ............................................................................................................... 3
SECTION 5. Environmental Law and Regulations ................................................................. 3
SECTION 6. Environmental Compliance ................................................................................ 4
SECTION 7. Owner in Fee ...................................................................................................... 5
SECTION 8. Assignments and Subleases................................................................................ 6
SECTION 9. Right of Entry; Easements ................................................................................. 6
SECTION 10. Termination ........................................................................................................ 6
SECTION 11. Default ................................................................................................................ 6
SECTION 12. Quiet Enjoyment ................................................................................................ 7
SECTION 13. Waiver of Personal Liability .............................................................................. 7
SECTION 14. Taxes .................................................................................................................. 8
SECTION 15. Eminent Domain ................................................................................................ 8
SECTION 16. Nondiscrimination .............................................................................................. 8
SECTION 17. Partial Invalidity ................................................................................................. 9
SECTION 18. Notices................................................................................................................ 9
SECTION 19. Section Headings ................................................................................................ 9
SECTION 20. Amendment ........................................................................................................ 9
SECTION 21. Definitions .......................................................................................................... 9
SECTION 22. Execution............................................................................................................ 9
EXHIBIT A Description of Facilities ................................................................................. A-1
EXHIBIT B Lease Terms ................................................................................................... B-1
4843-2161-1840.4
1
SITE LEASE
This Site Lease, dated as of [March] 1, 2017 (this “Site Lease”), by and between the
COUNTY OF CONTRA COSTA, a political subdivision organized and existing under and by
virtue of the laws of the State of California (the “County”), as lessor, and the COUNTY OF
CONTRA COSTA PUBLIC FINANCING AUTHORITY, a public en tity and agency, duly
organized and existing pursuant to an Agreement entitled “Amended and Restated Joint Exercise
of Powers Agreement” by and between the County of Contra Costa and the Contra Costa County
Flood Control and Water Conservation District (the “District”), as lessee;
W I T N E S S E T H:
WHEREAS, the County has determined that it is in its best interests to finance and
refinance certain capital improvements for the County;
WHEREAS, the Authority has agreed to issue $[_____] principal amount of its Lease
Revenue Bonds (Refunding and Capital Projects), 2017 Series A (the “Bonds”), pursuant to a
Trust Agreement, dated as of [March] 1, 2017 (as amended, supplemented, modified or restated
from time to time, the “Trust Agreement”) by and between the Authority and Wells Fargo Bank,
National Association, as trustee (together with any successor thereto, the “Trustee”), for the
purpose of financing and refinancing certain capital improvements for the County (the “Capital
Projects”) refunding the Refunded Bonds which were issued to finance certain capital
improvements for the County and paying certain costs of issuance with respect to the issuance of
the Bonds;
WHEREAS, the County, pursuant hereto, will lease certain Facilities (as hereinafter
defined) of the County to the Authority and the Authority will use the proceeds of the Bonds to
pay to the County the rental due hereunder for the Facilities, and the County will use the
proceeds of the Bonds to refund, defease and redeem the Refunded Bonds and to make deposits
to the Project Fund and the Costs of Issuance Fund, as established in the Trust Agreement;
WHEREAS, the Authority will lease back the Facilities to the County pursuant to the
Facilities Lease, dated as of [March] 1, 2017 (as amended, supplemented, modified or restated
from time to time, the “Facilities Lease”), between the Authority, as lessor, and the County, as
lessee; and
WHEREAS, under the Facilities Lease, the County will be obligated to make base rental
payments to the Authority for the lease of the Facilities and the Authority will pledge such base
rental payments to the Trustee for payments of the Bonds (capitalized terms used herein and not
otherwise defined herein have the meanings assigned thereto in the Facilities Le ase or the Trust
Agreement, as applicable);
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows:
4843-2161-1840.4
2
SECTION 1. Lease of Facilities
The County hereby leases to the Authority and the Authority hereby leases from the
County, on the terms and conditions hereinafter set forth, the real property situated in the County
of Contra Costa, State of California, together with the improvements thereon, as described in
Exhibit A attached hereto and made a part hereof, and any additional real property added thereto
by any supplement or amendment hereto, or any real property substituted for all or any portion of
such property in accordance with this Site Lease and the Trust Agreement (the “Facilities”);
subject, however, to Permitted Encumbrances. No merger shall be effected by the County’s
lease of the Facilities to the Authority under this Site Lease, and the Authority’s sublease of the
Facilities back to the County under the Facilities Lease.
SECTION 2. Term
The term of this Site Lease as to the Facilities shall commence on the date of recordation
of this Site Lease in the office of the County Recorder of the County of Contra Costa, State of
California, or on [March 3], 2017 whichever is earlier, and shall end on the respective dates
identified in Exhibit B hereto, as applicable to the related Facility, unless such term is extended
or sooner terminated as hereinafter provided. If on such dates the Base Rental Payments and
Additional Payments attributable to the related Facility and all other amounts then due under the
Facilities Lease with respect to such Facility shall not be fully paid or any amount remains due
and owing with respect to the Bonds or under the Continuing Covenant Agreement, or if the
rental or other amounts payable under the Facilities Lease with respect to such Facility shall have
been abated at any time and for any reason, then the term of this Site Lease with respect to such
Facility shall be extended until ten (10) days after the Base Rental Payments and Additional
Payments attributable to such Facility and all other amounts then due under the Facilities Lease
with respect to such Facility, and all amount remains due and owing with respect to the Bonds
and under the Continuing Covenant Agreement, shall be fully paid except that the term of this
Site Lease as to the respective Facility shall in no event be extended beyond ten (10) years after
the date identified with respect thereto. If prior to such date the Base Rental Payments and
Additional Payments attributable to the related Facility and all other amounts then due under the
Facilities Lease with respect to such Facility shall be fully paid, the term of this Site Lease with
respect to such Facility shall end ten (10) days thereafter or upon written notice by the County to
the Authority, whichever is earlier.
SECTION 3. Rental
The Authority shall pay to the County from the proceeds of the Bonds as and for rental
hereunder an amount, not less than $[______], which amount the County finds and determines is
full and fair rental for the Facilities on the date hereof and which amount the County further
agrees will be deposited in the Project Fund, the Revenue Fund for the 2009 Bonds and the
Escrow Fund for the 2007 Bonds as set forth in the Trust Agreement and applied along with
other proceeds of the Bonds to finance or refinance the Capital Projects.
4843-2161-1840.4
3
SECTION 4. Purpose
The Authority shall use the Facilities solely for the purpose of leasing the Facilities to the
County pursuant to the Facilities Lease and for such purposes as may be incidental thereto;
provided, that in the event of an Event of Default by the County under the Facilities Lease, the
Authority may exercise the remedies provided in the Facilities Lease.
SECTION 5. Environmental Law and Regulations
(a) Definitions used in this Section 5 and in Section 6.
“Asbestos Containing Materials” shall mean material in friable form containing
more than one percent (1%) of the asbestiform varieties of (a) chrysotile (serpentine);
(b) crocidolite (ricbeckite); (c) amosite (cummington-itegrinerite); (d) anthophyllite;
(e) tremolite; and (f) antinolite.
“Asbestos Operations and Maintenance Plan” shall mean that written plan for the
Facilities relating to monitoring and maintaining all Asbestos Containing Materials used or
located on the Facilities.
“Environmental Regulations” shall mean all Laws and Regulations, now or
hereafter in effect, with respect to Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act, as amended (42
U.S.C. Section 9601, et seq.) (together with the regulations promulgated thereunder,
“CERCLA”), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section
6901, et seq.) (together with the regulations promulgated thereunder, “RCRA”), the Emergency
Planning and Community Right-to-Know Act, as amended (42 U.S.C. Section 11001, et seq.)
(together with the regulations promulgated thereunder, “Title III”), the Clean Water Act, as
amended (33 U.S.C. Section 1251, et seq.) (together with the regulations promulgated
thereunder, “CWA”), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.) (together
with the regulations promulgated thereunder, “CAA”), the Toxic Substances Control Act, as
amended (15 U.S.C. Section 2601, et seq.) (together with the regulations promulgated
thereunder, “TSCA”), the Occupational Safety and Health Act, as amended (29 U.S.C. Section
651 et seq.) (together with regulations promulgated thereunder, “OSHA”) and any similar
federal, state or local laws and regulations and any so-called local, state or federal “superfund” or
“superlien” law.
“Hazardous Materials” shall mean any material amount of flammable explosives,
polychlorinated biphenyl compounds, heavy metals, chlorinated solvents, cyanide, radon,
petroleum products, asbestos or any Asbestos Containing Materials, methane, radioactive
materials, pollutants, hazardous materials, hazardous wastes, hazardous, toxic, or regulated
substances or related materials, as characterized, regulated or defined in CERCLA, RCRA,
CWA, CAA, TSCA, OSHA and Title III, and the regulations promulgated pursuant thereto, and
in any other Environmental Regulations applicable to the County, any of the Facilities or the
business operations conducted by the County therein.
“Laws and Regulations” shall mean any applicable law, regulation, code, order,
rule, judgment or consent agreement, including, without limitation, those relating to zoning,
4843-2161-1840.4
4
building, use and occupancy, fire safety, health, sanitation, air pollution, ecological matters,
environmental protection, hazardous or toxic materials, substances or wastes, conservation,
parking, architectural barriers to the handicapped, or restrictive covenants or other agreements
affecting title to the Facilities.
(b) No portion of the Facilities is located in an area of high potential incidence of
radon which has an unventilated basement or subsurface portion which is occupied or used for
any purpose other than the foundation or support of the improvements to such Facilities.
(c) The County has not received any notice from any insurance company which has
issued a policy with respect to the Facilities or from the applicable state or local government
agency responsible for insurance standards (or any other body exercising similar functions)
requiring the performance of any repairs, alterations or other work, which repairs, alterations or
other work have not been completed at the Facilities. The County has not received any notice of
default or breach which has not been cured under any covenant, condition, restriction, right -of-
way, reciprocal easement agreement or other easement affecting the Facilities which is to be
performed or complied with by it.
SECTION 6. Environmental Compliance
(a) Neither the County nor the Authority shall use or permit the Facilities or any part
thereof to be used to generate, manufacture, refine, treat, store, handle, transport or dispose of,
transfer, produce or process Hazardous Materials, except, and only to the extent, if necessary to
maintain the Facilities and then, only in compliance with all Environmental Regulations, nor
shall it permit, as a result of any intentional or unintentional act or omission on its part or by any
tenant, subtenant, licensee, guest, invitee, contractor, employee and agent, the storage,
transportation, disposal or use of Hazardous Materials or the pumping, spilling, leaking,
disposing of, emptying, discharging or releasing (hereinafter collectively referred to as
“Release”) or threat of Release of Hazardous Materials on, from or beneath the Facilities or onto
any other real property excluding, however, those Hazardous Materials in those amounts
ordinarily found in the inventory of an office building, the use, storage, treatment, transportation
and disposal of which shall be in compliance with all Environmental Regulations. Upon the
occurrence of any Release or threat of Release, or presence, of Hazardous Materials, the County
shall promptly commence and perform, or cause to be commenced and performed promptly,
without cost to the Trustee or the Authority, all investigations, studies, sampling and testing, and
all remedial, removal and other actions necessary to clean up and remove all Hazardous
Materials so Released or present, on, from or beneath the Facilities, in compliance with all
Environmental Regulations. Notwithstanding anything to the contrary contained herein,
underground storage tanks shall only be permitted subject to compliance with subsection (d) and
only to the extent necessary to maintain the Facilities.
(b) The County and the Authority shall comply with, and shall cause its tenants,
subtenants, licensees, guests, invitees, contractors, employees and agents to comply with, all
Environmental Regulations, and shall keep the Facilities free and clear of any liens imposed
pursuant thereto (provided, however, that any such liens, if not discharged, may be bonded). The
County and the Authority shall cause each tenant, and use its best efforts to cause all of such
tenant’s subtenants, agents, licensees, employees, contractors, guests and invitees and the guests
4843-2161-1840.4
5
and invitees of all of the foregoing to comply with all Environmental Regulations with respect to
the Facilities; provided, however, that notwithstanding that a portion of this covenant is limited
to the County and the Authority’s use of its best efforts, the Authority and the County shall
remain solely responsible for ensuring such compliance and such limitation shall not diminish or
affect in any way the County and the Authority’s obligations contained in subsection (c) hereof
as provided in subsection (c) hereof. Upon receipt of any notice from any individual or Person
with regard to the presence of, or Release of Hazardous Materials on, from or beneath the
Facilities, the County and the Authority shall give prompt written notice thereof to the Trustee
(and, in any event, prior to the expiration of any period in which to respond to such notice under
any Environmental Regulation).
(c) Irrespective of whether any representation or warranty contained in Section 5 is
not true or correct, the County and the Authority shall, to the extent permitted by law, defend ,
indemnify and hold harmless the Bondholders and the Trustee, its partners, depositors and each
of its and their employees, agents, officers, directors, trustees, successors and assigns, from and
against any claims, demands, penalties, fines, attorneys’ fees (including, without limitation,
attorneys’ fees incurred to enforce the indemnification contained in this Section 6), consultants’
fees, investigation and laboratory fees, liabilities, settlements (five (5) Business Days’ prior
notice of which the Authority or the Trustee, as appropriate, shall have delivered to the County
and the Authority), court costs, damages, losses, costs or expenses of whatever kind or nature,
known or unknown, contingent or otherwise, occurring in whole or in part, arising out of, or in
any way related to, (i) the presence, disposal, Release, threat of Release, removal, discharge,
storage or transportation of any Hazardous Materials on, from or beneath the Facilities, (ii) any
personal injury (including wrongful death) or property damage (real or personal) arising out of or
related to such Hazardous Materials, (iii) any lawsuit brought or threatened, settlement reached
(five (5) Business Days’ prior notice of which the Authority or the Trustee, as appropriate, shall
have delivered to the County and the Authority), or governmental order relating to Hazardous
Materials on, from or beneath any of the Facilities, (iv) any violation of Environmental
Regulations or subsection (a) or (b) hereof by it or any of its agents, tenants, employe es,
contractors, licensees, guests, subtenants or invitees, and (v) the imposition of any governmental
lien for the recovery of environmental cleanup or removal costs. To the extent that the Authority
or the County is strictly liable under any Environmental Regulation, its obligation to the Trustee
and the Bondholders and the other indemnitees under the foregoing indemnification shall
likewise be without regard to fault on its part with respect to the violation of any Environmental
Regulation which results in liability to any indemnitee. Its obligations and liabilities under this
Section 6(c) shall survive any termination of the Facilities Lease or exercise of any remedies
thereunder, and the satisfaction of all Bonds.
(d) The County and the Authority shall conform to and carry out a reasonable
program of maintenance and inspection of all underground storage tanks, and shall maintain,
repair, and replace such tanks only in accordance with Laws and Regulations, including but not
limited to Environmental Regulations.
SECTION 7. Owner in Fee
The County covenants that it is the owner in fee of the Facilities. The County further
covenants and agrees that if for any reason this covenant proves to be incorrect, the County will
4843-2161-1840.4
6
either institute eminent domain proceedings to condemn the property or institute a quiet title
action to clarify the County’s title, and will diligently pursue such action to completion. The
County further covenants and agrees that it will hold the Authority and the Bondowners harmless
from any loss, cost or damages resulting from any breach by the County of the covenants
contained in this Section.
SECTION 8. Assignments and Subleases
Unless the County shall be in default under the Facilities Lease, the Authority may not
assign its rights under this Site Lease or sublet the Facilities, except pursuant to the Facilities
Lease, without the written consent of the County, which consent may be withheld in the
County’s sole and absolute discretion. Upon the occurrence of a default by the County under the
Facilities Lease, the Authority may assign or sell its rights under this Site Lease or sublet the
Facilities, without the consent of the County.
SECTION 9. Right of Entry; Easements
The County reserves the right for any of its duly authorized representatives to enter upon
the Facilities at any reasonable time to inspect the same or to make any repairs, improvements or
changes necessary for the preservation thereof.
The County agrees, upon written request from the Authority, to grant to the Authority a
nonexclusive easement of ingress and egress for persons, vehicles and utilities, twenty (20) feet
wide, from each parcel of the Facilities not having access to a public street, and appurtenant to
such parcel, over property owned by the County to a public street. The County may, at any time,
satisfy its obligation contained in the preceding sentence as to any such parcel of the Facilities by
granting to the Authority an easement complying with the requirements of the preceding
sentence from such parcel of the Facilities to a public street.
SECTION 10. Termination
The Authority agrees, upon the termination of this Site Lease, to quit and surrender the
Facilities 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 the Authority
further agrees that the Facilities and any other permanent improvements and structures existing
upon the Facilities at the time of the termination of this Site 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 Facilities
Lease and upon payment of the option price required by said section, the term of this Site Lease
shall terminate as to the portion of the Facilities being so purchased, including the real property
upon which portion is situated.
SECTION 11. 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 Site Lease, which default continues for one hundred
and eighty (180) days following notice and demand for correction thereof to the Authority and
4843-2161-1840.4
7
the Trustee, the County may exercise any and all remedies granted by law, except that no merger
of this Site Lease and of the Facilities Lease shall be deemed to occur as a result thereof;
provided, however, that the County shall have no power to terminate this Site Lease by reason of
any default on the part of the Authority if such termination would affect or impair any
assignment of the Facilities Lease of all or any part of the Facilities then in effect between the
Authority and any assignee or subtenant of the Authority (other than the County under the
Facilities Lease) or the rights of the Trustee with respect thereto. So long as any such assignee or
subtenant of the Authority (or the Trustee) shall duly perform the terms and conditions of this
Site Lease, such assignee or subtenant (or the Trustee) shall be deemed to be and shall become
the tenant of the County hereunder and shall be entitled to all of the rights and privile ges granted
under any such assignment or subrogation; provided, further, that so long as any Bonds are
outstanding and unpaid in accordance with the terms thereof, the rentals or any part thereof
payable to the Authority or Trustee shall continue to be paid to the Trustee on behalf of the
Bondowners.
SECTION 12. Quiet Enjoyment; Liens
(a) The Authority at all times during the term of this Site Lease, shall peaceably and
quietly have, hold and enjoy all of the Facilities then leased hereunder.
(b) The Authority shall not, directly or indirectly, create, assume or suffer to exist any
mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Facilities, other
than the respective rights of the Authority and the County as herein provided and Permitted
Encumbrances.
SECTION 13. Waiver of Personal Liability
All liabilities under this Site Lease on the part of the Authority shall be solely liabilities
of the Authority, as a public entity and agency, 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 Site Lease. No member, director, officer, agent or employee of the
Authority shall at any time or under any circumstances be individually or personally liabl e under
this Site 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
Facilities. 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 operation of the
Facilities or the Project, including, without limitation, death of or injury to any person or damage
to property whatsoever occurring in, on or about the Facilities or the Project regardless of
responsibility for negligence, but excepting the active negligence of the person or entity seeking
indemnity.
4843-2161-1840.4
8
SECTION 14. 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 Facilities.
SECTION 15. Eminent Domain
In the event the whole or any part of the Facilities 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 Bonds and all other amounts due under the Trust
Agreement and the Facilities Lease attributable to such part of the Facilities and all obligations
due and owing under the Continuing Covenant Agreement and shall be paid to the Trustee, or the
Purchaser or respective Bondholder, as applicable, and the balance of the award, if any, shall be
paid to the County.
SECTION 16. Further Assurances.
The County covenants and agrees that in the event any lien, encumbrance, asserted
encumbrance, claim, dispute or other issue arises with respect to the County’s legal title to or
valid and marketable, beneficial use and enjoyment of (or the Authority’s interest in) the
Facilities (each of the foregoing referred to as a “Facilities Issue”), the County will take all steps
necessary to promptly quiet, resolve and/or eliminate such Facilities Issue and/or provide the
Authority with, or as applicable, will take all reasonable steps available to the County to ensure
the Authority has, adequate access to and use of the Facilities and the County has beneficial use
and enjoyment of the Facilities and the County shall ensure that its fee interest in the Facilities
remains free and clear of Facilities Issues. The County covenants and agrees that in the event
any legal description, UCC-1 financing statement or fixture filing (or continuations or
amendments thereof) filed or recorded with respect to the Authority’s interests in the Facilities
reflects any incorrect real property legal description, the County shall take all steps necessary
(with the Authority’s prior written approval) to promptly correct any errors with respect to such
legal descriptions, UCC-1 financing statements and fixture filings.
SECTION 17. Nondiscrimination
The Authority herein covenants by and for itself, its heirs, executors, administrators, and
assigns, and all person claiming under or through itself, and this Site Lease is made and accepted
upon and subject to the following conditions: That there shall be no discrimination against or
segregation of any person or groups of persons, on account of any basis listed in subdivision (a)
or (d) of Section 12955 of the California Government Code, as those basis are defined in
Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955,
and Section 12955.2 of the California Government Code, in leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the premises herein leased nor shall the Authority, or any
person claiming under or through the Authority, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location, number, use,
or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein
leased.
4843-2161-1840.4
9
SECTION 18. Partial Invalidity
If any one or more of the terms, provisions, covenants or conditions of this Site 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 Site Lease shall
be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the
fullest extent permitted by law.
SECTION 19. 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 County, addressed to the County in care of the Clerk of the Board of Supervisors,
County Administration Building, 651 Pine Street, Martinez, California 94553, or if to the
Authority, addressed to the Authority in care of the County Administrator, County
Administration Building, 651 Pine Street, Martinez, California 94553, in all cases with a copy to
the Trustee at the address specified in the Trust Agreement, or to such other addresses as the
respective parties may from time to time designate by notice in writing.
SECTION 20. 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 Site Lease.
SECTION 21. Amendment
The Authority and the County may at any time agree to the amendment of this Site Lease;
provided, however, that the Authority and the County agree and recognize that this Site Lease is
entered into as contemplated by the terms of the Trust Agreement, and accordingly, that any such
amendment shall only be made or effected in accordance with and subject to the terms of the
Trust Agreement.
SECTION 22. Definitions
Capitalized terms not otherwise defined herein shall have the meanings assigned to them
in the Facilities Lease or, if not defined therein, the Trust Agreement.
SECTION 23. Execution
This Site Lease may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all together shall constitute but one and the same Lease. It is also
agreed that separate counterparts of this Site Lease may separately be execu ted 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.
4843-2161-1840.4
10
4843-2161-1840.4
S-1 Site Lease
IN WITNESS WHEREOF, the County and the Authority have caused this Site Lease to
be executed by their respective officers thereunto duly authorized, all as of the day and year first
above written.
COUNTY OF CONTRA COSTA, as Lessor
By:
Federal D. Glover
Chair of the Board of Supervisors
Attest:
By:
David J. Twa
Clerk of the Board of Supervisors
and County Administrator
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY, Lessee
By:
Federal D. Glover
Chair of the Board of Directors
Attest:
By:
David J. Twa
Executive Director and Secretary
of the Board of Directors
4843-2161-1840.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4843-2161-1840.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4843-2161-1840.4
A-1
EXHIBIT A
Description of Facilities
All that certain real property situated in the County of Contra Costa, State of California,
described as follows:
4843-2161-1840.4
B-1
EXHIBIT B
Lease Terms
Facility Term Maximum Extension
4843-2161-1840.4
Certificate of Acceptance
CERTIFICATE OF ACCEPTANCE
(Government Code Section 27281)
This is to certify that the interest in real property conveyed by the foregoing Site Lease
from the County of Contra Costa Public Financing Authority to the County of Contra Costa, a
political subdivision of the State of California (the “County”), is hereby accepted by order of the
undersigned officer on behalf of the Authority on [_______], 2017, pursuant to authority
conferred by Resolution No. [____] of the Authority adopted on February 14, 2017, and the
Authority consents to recordation thereof by its duly authorized officer.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY, as Lessee
By:
Federal D. Glover
Chair of the Board of Directors
Attest:
By:
David J. Twa
Executive Director and Secretary
of the Board of Directors
4843-2161-1840.4
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the truthfulness,
accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF CONTRA COSTA
On ________________, 2017, before me, ________________________________________, a
Notary Public, personally appeared _______________________________________________,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my name and official seal.
[Affix seal here]
Signature of Notary Public
4817-8636-3968.3
NP DRAFT 2/7/2017
ESCROW AGREEMENT
by and between
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
Dated as of [March 1], 2017
relating to the
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Refunding and Various Capital Projects), 2007 Series A
County of Contra Costa Public Financing Authority
Lease Revenue Bonds (Medical Center Refunding), 2007 Series B
4817-8636-3968.3
TABLE OF CONTENTS
Page
i
Section 1. Definitions............................................................................................................... 2
Section 2. Escrow Fund. .......................................................................................................... 2
Section 3. Notice of Redemption and Defeasance. .................................................................. 3
Section 4. Accounting for Escrow; Substitutions. ................................................................... 4
Section 5. Investments and Reinvestments. ............................................................................. 4
Section 6. Sufficiency of Escrow. ............................................................................................ 4
Section 7. Transfers for Payment of Refunded Bonds. ............................................................ 4
Section 8. Termination of Escrow Agreement; Written Request of Authority........................ 4
Section 9. Fees and Costs......................................................................................................... 5
Section 10. Reports. ................................................................................................................... 5
Section 11. Character of Deposit. .............................................................................................. 5
Section 12. Exculpatory Provisions. .......................................................................................... 6
Section 13. Time of Essence. ..................................................................................................... 7
Section 14. Amendments. .......................................................................................................... 7
Section 15. Successors. .............................................................................................................. 7
Section 16. Notices. ................................................................................................................... 8
Section 17. Severability. ............................................................................................................ 8
Section 18. Law Governing. ...................................................................................................... 8
Section 19. Counterparts. ........................................................................................................... 8
EXHIBIT A REFUNDING REQUIREMENTS...................................................................... A-1
EXHIBIT B ESCROWED SECURITIES ............................................................................... B-1
EXHIBIT C NOTICE OF PARTIAL DEFEASANCE ........................................................... C-1
EXHIBIT D FEE SCHEDULE................................................................................................ D-1
4817-8636-3968.3
1
ESCROW AGREEMENT
(2007 Series A Bonds and the 2007 Series B Bonds)
THIS ESCROW AGREEMENT, dated as of [March 1], 2017, is entered into by and
between the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY (the
“Authority”), a joint exercise of powers authority, duly organized and validly existing pursuant
to an Amended and Restated Joint Exercise of Powers Agreement entitled “County of Contra
Costa Financing Authority Joint Exercise of Powers Agreement,” by and between the County of
Contra Costa and the Contra Costa County Flood Control and Water Conservation District, and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association duly
organized and existing under and by virtue of the laws of the United States of America, as trustee
and as escrow bank (the “Escrow Agent”).
W I T N E S S E T H:
WHEREAS, Wells Fargo Bank, National Association, as successor trustee (the “Prior
Trustee”), and the Authority have executed a trust agreement, dated as of February 1, 1999 (the
“Original Trust Agreement”), as supplemented by the Sixth Supplemental Trust Agreement,
dated as of March 1, 2007 and the Seventh Supplemental Trust Agreement, dated as of August 1,
2007 (as amended and supplemented, the “Trust Agreement”);
WHEREAS, the Authority has issued $122,065,000 of its Lease Revenue Bonds
(Refunding and Various Capital Projects), 2007 Series A (the “2007 Series A Bonds”), and
$110,265,000 of its Lease Revenue Bonds (Medical Center Refunding), 2007 Series B (the
“2007 Series B Bonds,” and together with the 2007 Series A Bonds, the “Refunded Bonds”) in
order to finance and refinance capital projects for the County pursuant to the Trust Agreement;
WHEREAS, the Authority has determined that it is in the Authority’s be st interests to
defease, pay and redeem the outstanding Refunded Bonds and to issue the County of Contra
Costa Public Financing Authority Lease Revenue Bonds (Refunding and Capital Projects), 2017
Series A (the “Refunding Bonds”) pursuant to a trust agreement, dated as of March 1, 2017 (the
“2017 Trust Agreement”), by and between the Authority and Wells Fargo Bank, National
Association, as trustee (the “Trustee”) for such purpose;
WHEREAS, Section 3.01 of the 2017 Trust Agreement provides for the transfer and
deposit of certain proceeds of the Refunding Bonds to the Escrow Fund, to defease and redeem
the Refunded Bonds, and such proceeds shall be invested in Government Securities under the
Original Trust Agreement so as to insure the full and timely payment of the Refunding
Requirements (as hereinafter defined); and,
NOW, THEREFORE, in consideration of the mutual agreements herein contained, in
order to secure the payment of the Refunding Requirements, the parties hereto mutually
undertake, promise and agree for themselves, their respective representatives, successors and
assigns, as follows:
4817-8636-3968.3
2
Section 1. Definitions.
As used in this Escrow Agreement the following terms have the following meanings:
“Escrow Agent” means Wells Fargo Bank, National Association, or any successor thereto
appointed under this Escrow Agreement.
“Escrow Fund” means the fund by that name created pursuant to Section 2 hereof.
“Escrowed Securities” means any of those certain Government Securities listed in
Exhibit B to this Escrow Agreement.
“Government Securities” has the meaning assigned to such term in the Original Trust
Agreement.
“Independent Certified Public Accountant” means an independent firm of nationally
recognized certified public accountants.
“Prior Trustee” means Wells Fargo Bank, National Association, as successor trustee for
the Refunded Bonds.
“Refunded Bonds” means the 2007 Series A Bonds and the 2007 Series B Bonds, further
defined in Exhibit A hereto.
“Refunding Bonds” means the County of Contra Costa Public Financing Authority Lease
Revenue Bonds (Refunding and Capital Projects), 2017 Series A, issued pursuant to the 2017
Trust Agreement.
“Refunding Requirements” means all installments of principal and interest on the
Refunded Bonds, as such payments become due on and prior to the redemption date for the
Refunded Bonds and the principal and redemption premium on the redemption date as shown in
Exhibit A to this Escrow Agreement.
“State” means the State of California.
“Trustee” means Wells Fargo Bank, National Association, as trustee for the Refunding
Bonds.
All other capitalized terms used but not defined herein shall have the respective meanings
given to such terms in the Trust Agreement.
Section 2. Escrow Fund.
A. There is hereby created and established with the Escrow Agent a special
and irrevocable trust fund designated as the “County of Contra Costa Public Financing Authority
Escrow Fund” (the “Escrow Fund”). The Escrow Agent shall keep the Escrow Fund separate and
apart from all other funds and moneys held by it and shall hold the Escrow Fund in trust for the
purposes described herein.
4817-8636-3968.3
3
B. Pending application as provided in this Agreement, amounts on deposit in
the Escrow Fund are hereby pledged and assigned solely to pay 100% of the principal amount of
the Refunded Bonds on June 1, 2017 (the “Redemption Date”) and to pay interest on the
Refunded Bonds to the Redemption Date, which amounts shall be held in trust by the Escrow
Agent for the holders of the Refunded Bonds.
C. Deposit of Funds
(1) There shall be deposited in the Escrow Fund by the Escrow Agent
the sum of $[__________] received from Wells Fargo Municipal Capital Strategies, LLC
upon the issuance and sale of the Refunding Bonds.
(2) There shall be deposited in the Escrow Fund by the Escrow Agent
the sum of $[__________] received from the Prior Trustee from amounts held by the
Prior Trustee in the debt service fund and the reserve fund for the Prior Bonds.
(3) The Authority has determined, as verified by the report of an
Independent Certified Public Accountant, dated [______,] 2017 (the “Verification
Report”), that upon deposit of the money pursuant to Section C(1) and Section C(2), the
moneys on deposit in the Escrow Fund will be at least equal to an amount sufficient to
purchase the aggregate principal amount of the Government Obligations set forth in
Exhibit B hereto (the “Exhibit B Securities”), which principal, together with all interest
due or to become due on such Exhibit B Securities plus any uninvested amounts in the
Escrow Fund, will be sufficient to meet the Refunding Requirements. The Escrow Agent
shall use $[____________] on deposit in the Escrow Fund to purchase the Exhibit B
Securities and hold $[______] in cash in the Escrow Fund.
D. The funds held in the Escrow Fund shall not be subject to withdrawal
other than to satisfy the Refunding Requirements.
E. The Escrow Agent shall hold all Escrowed Securities, whether acquired as
initial investments, subsequent investments or reinvestments hereund er, and the money received
from time to time as principal and interest thereon, in trust, to secure and for the payment of the
Refunding Requirements and shall collect the principal of and interest on the Escrowed
Securities held by it hereunder promptly as such principal and interest become due.
Section 3. Notice of Redemption and Defeasance.
A. The Authority hereby gives irrevocable instructions to the Escrow Agent
to mail, as soon as practicable, a notice of the defeasance of the Refunded Bonds in the form
attached hereto as Exhibit C in accordance with Section 10.01 of the Original Trust Agreement.
B. Authority hereby gives irrevocable instructions to the Escrow Agent to
mail, not less than thirty nor more than sixty days prior to the Redemption date, a notice of the
redemption of the Refunded Bonds in the form attached hereto as Exhibit D in accordance with
Section 4.05 of the Original Trust Agreement.
4817-8636-3968.3
4
Section 4. Accounting for Escrow; Substitutions.
A. The moneys and the Escrowed Securities from time to time accounted for
in the Escrow Fund shall not be subject to withdrawal by the Authority nor otherwise subject to
their order except as otherwise provided in Sections 2 and 8 hereof.
B. The Authority may from time to time direct the Escrow Agent to sell,
exchange or substitute Escrowed Securities for other Government Securities; provided that there
shall be no sale, exchange or substitution of the Escrowed Securities, unless the following are
received: (i) the written direction of the Authority, (ii) receipt by the Authority and the Escrow
Agent of a new Verification Report, prepared by an Independent Certified Public Accountant,
verifying the sufficiency of the escrow to pay all Refunding Requirements when due in full on
their respective due dates and (iii) receipt of an unqualified legal opinion of nationally
recognized bond counsel that such investment will not adversely affect the tax-exempt status of
interest on the Refunded Bonds or the Refunding Bonds under Section 103 of the Internal
Revenue Code of 1986 and the regulations of the United States Department of the Treasury
issued thereunder.
Section 5. Investments and Reinvestments.
The Escrow Agent shall have no other obligation by virtue of this Escrow Agreement,
general trust law or otherwise, to make any investment or reinvestment of any mon eys in escrow
at any time except as expressly directed by the Authority and upon receipt, but only in case of
such Authority direction that securities must be reinvested in Government Securities, of (i) the
written direction of the Authority, (ii) receipt by the Authority and the Escrow Agent of a new
Verification Report, prepared by an Independent Certified Public Accountant, verifying the
sufficiency of the escrow to pay all Refunding Requirements when due on their respective due
dates and (iii) receipt of an opinion of nationally recognized bond counsel that such investment
will not adversely affect the validity of the Refunding Bonds or the Refunded Bonds under State
law.
Section 6. Sufficiency of Escrow.
Moneys deposited in the Escrow Fund, including the investment earnings thereon and
any uninvested cash, shall be in an amount, as determined by the Authority, which at all times
shall be sufficient to meet the Refunding Requirements not theretofore met.
Section 7. Transfers for Payment of Refunded Bonds.
The Escrow Agent shall make from time to time such transfers to the Prior Trustee as will
assure, to the extent of moneys in the Escrow Fund, the payment of the Refunding Requirements
when due, as provided herein and in the Trust Agreement.
Section 8. Termination of Escrow Agreement; Written Request of Authority.
When the Escrow Agent shall have transferred, pursuant to Section 7 hereof, such
moneys as are required to pay in full and discharge all of the Refunded Bonds, the Escrow
Agent, after payment of all fees and expenses of the Escrow Agent, shall immediately pay over
4817-8636-3968.3
5
to the Authority or its order the moneys, if any, then remaining in the Escrow Fund and shall
make forthwith a final report to the Authority, and this Escrow Agreement shall terminate. The
Prior Trustee shall pay to the Authority any and all unclaimed moneys as provided in Section
10.02 of the Original Trust Agreement and this shall constitute the Written Request of the
Authority for such purpose.
Section 9. Fees and Costs.
A. The Escrow Agent’s fees, expenses and reimbursement for costs incurred
for and in carrying out the provisions of this Escrow Agreement have been fixed as set forth in
Exhibit E. The Escrow Agent shall also be entitled to additional fees, expenses and
reimbursement for costs incurred, including but not limited to, legal and accounting services in
connection with any litigation or other proceedings which may at any time be instituted
involving this Escrow Agreement not due to the negligence or willful misconduct of the Escrow
Agent. Under no circumstances shall any fees, expenses or reimbursement of costs of the Escrow
Agent or any other party (including without limitation, the cost of any required Verification
Report) be paid out of amounts held in the Escrow Fund.
B. Payments to the Escrow Agent pursuant to this Section 9 shall not be for
deposit in the Escrow Fund, and the fees of and the costs incurred by the Escrow Agent shall not
be a charge on and in no event shall be deducted from the Escrow Fund.
Section 10. Reports.
A. Each month until the termination of this Escrow Agreement, the Escrow
Agent shall submit to the Authority a report covering all money it shall have received and all
payments it shall have made or caused to be made hereunder during the preceding one-month
period. Such report shall be subject to audit by the Authority or by such Independent Certified
Public Accountant, as may be designated by the Authority.
B. The last report shall be made at the time provided in Section 8 hereof.
C. Each such report shall also list all Escrowed Securities and the amount of
money accounted for in the Escrow Fund on the date of such report, except for the last report.
Section 11. Character of Deposit.
A. It is recognized that title to the Escrowed Securities and moneys accounted
for in the Escrow Fund from time to time be vested in the Escrow Agent but subject always to
the prior trust, charge and lien thereon of this Escrow Agreement in favor of the owners of the
Refunded Bonds and the use thereof required to be made by the provisions hereof.
B. The Escrow Agent shall hold all such securities and moneys in the Escrow
Fund as special trust funds separate and wholly segregated from all other securities and funds of
the Escrow Agent or deposited therein, and shall never commingle such securities or moneys
with other securities or moneys.
4817-8636-3968.3
6
C. No money paid into and accounted for in the Escrow Fund shall ever be
considered as a banking deposit and the Escrow Agent shall have no right or title with respect
thereto except in its capacity as Escrow Agent hereunder.
Section 12. Exculpatory Provisions.
A. The duties and responsibilities of the Escrow Agent are limited to those
expressly and specifically stated in this Escrow Agreement.
B. The Escrow Agent shall not be liable or responsible for any loss resulting
from any investment or reinvestment made pursuant to this Escrow Agreement and made in
compliance with the provisions hereof. The Escrow Agent shall not be liable or responsible for
the accuracy of any calculations or the sufficiency of any Escrowed Securities, the Escrow Fund
or any moneys held by it to meet the Refunding Requirements.
C. No provision of this Escrow Agreement shall be construed to relieve the
Escrow Agent from liability for its own negligent failure to act or its own willful misconduct.
D. The Escrow Agent shall be under no obligation to inquire into or be in any
way responsible for the performance or nonperformance by the Authority of any of its
obligations, nor shall it be responsible in any manner for the recitals or statements contained
herein or in the Refunded Bonds or any proceedings taken in connection therewith, such recitals
and statements being made solely by the Authority. The Escrow Agent may conclusively rely on
any opinion, written request, certificate, written direction or report of the Authority, any certified
public accountant, financial advisor or investment bank delivered to it and received in good faith
in connection with the transactions contemplated hereby.
E. Nothing in this agreement shall be construed to create any obligations or
liabilities on the part of the Escrow Agent to anyone other than the Authority and the holders of
the Refunded Bonds.
F. The Escrow Agent may at any time resign by giving thirty (30) days
written notice to the Authority of such resignation. The Authority may remove the Escrow Agent
at any time by giving thirty (30) days written notice to the Escrow Agent of such removal. The
Authority shall promptly appoint a successor Escrow Agent by the resignation or removal date.
Resignation or removal of the Escrow Agent will be effective only upon acceptance of
appointment by a successor Escrow Agent and the transfer of escrowed assets over to the
successor Escrow Agent. If the Authority does not appoint a successor, the Escrow Agent may
petition any court of competent jurisdiction for the appointment of a successor Escrow Agent,
which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as
may be required by law, appoint a successor Escrow Agent. After receiving a notice of
resignation or giving notice of removal of an Escrow Agent, the Authority may appoint a
temporary Escrow Agent to replace the resigning or removed Escrow Agent until the Authority
appoints a successor Escrow Agent. Any such temporary Escrow Agent so appointed by the
Authority shall immediately and without further act be superseded by the successor Escrow
Agent so appointed; provided, that the successor Escrow Agent accepts such appointment and
the escrowed assets are transferred over to the successor Escrow Agent.
4817-8636-3968.3
7
G. The Authority, to the extent permitted by law, agrees to indemnify the
Escrow Agent, its agents and its officers or employees for and hold the Escrow Agent, its agents,
officers or employees harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, reasonable fees and disbursements of
counsel for the Escrow Agent) which may be imposed on, incurred by, or asserted against the
Escrow Agent at any time by reason of the performance of its duties as Escrow Agent hereunder,
in any transaction arising out of this Escrow Agreement or the Trust Agreement or any of the
transactions contemplated herein or in the Trust Agreement, unless due to the Escrow Agent’s or
its officers’ or employees’ or agents’ negligence or willful misconduct. Such indemnity shall
survive the termination of this Escrow Agreement or resignation of the Escrow Agent.
H. The Escrow Agent may consult with counsel, who may be counsel of or to
the Authority, with regard to legal questions and the opinion of such counsel shall be full and
complete authorization in respect of any action taken or suffered by it hereunder in good faith
and in accordance therewith.
Section 13. Time of Essence.
Time shall be of the essence in the performance of the obligations from time to time
imposed upon the Escrow Agent by this Escrow Agreement.
Section 14. Amendments.
This Escrow Agreement may not be revoked or amended by the parties hereto unless
there shall first have been filed with the Authority and the Escrow Agent (i) a written opinion of
nationally recognized bond counsel stating that such amendment will not adversely affect the
tax-exempt status of interest on the Refunded Bonds or the Refunding Bonds under Section 103
of the Internal Revenue Code of 1986 and the regulations of the United States Department of the
Treasury issued thereunder and (ii) unless such amendment is limited to (1) insertion of
unintentionally omitted material, correction of mistakes or clarification of ambiguities, (2)
pledging of additional legal security to the Refunded Bonds, or (3) providing for the deposit of
additional cash and/or securities in the Escrow Fund, the written consent of all the owners of the
Refunded Bonds then outstanding.
Section 15. Successors.
A. Whenever herein the Authority or the Escrow Agent is named or is
referred to, such provision shall be deemed to include any successor of the Authority or the
Escrow Agent, respectively, immediate or intermediate, whether so expressed or not . The
successor Escrow Agent must be in place and the escrowed assets transferred over to it before
the predecessor Escrow Agent is released.
B. All of the stipulations, obligations and agreements by or on behalf of, and
other provisions for the benefit of, the Authority or the Escrow Agent contained herein:
(1) Shall bind and inure to the benefit of any such successor; and
4817-8636-3968.3
8
(2) Shall bind and shall inure to the benefit of any officer, board,
authority, agent or instrumentality to whom or to which there shall be transferred by or in
accordance with law any right, power or duty of the Authority or the Escrow Agent,
respectively, or of its successor.
Section 16. Notices.
All notices and communications hereunder shall be in writing and shall be deemed to be
duly given if received or sent by first class mail to the following addresses or to such other
address as the recipient thereof shall request in writing to the other party hereto:
If to the Authority: County of Contra Costa Public Financing Authority
County Administrator’s Office
651 Pine Street, 10th Floor
Martinez, CA 94553-0063
Attn: County Finance Director
If to the Escrow Agent: Wells Fargo Bank, National Association
1700 Lincoln Street, 10th Floor
Denver, Colorado 80203-4500
Attn: Corporate Trust Services
Section 17. Severability.
If any section, paragraph, clause or provision of this Escrow Agreement shall for any
reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section,
paragraph, clause or provision shall not affect any of the remaining provisions of this Escrow
Agreement.
Section 18. Law Governing.
This Escrow Agreement is made in the State of California and is to be construed under
the Constitution and laws of such State.
Section 19. Counterparts.
This Escrow 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.
4817-8636-3968.3
S-1
IN WITNESS WHEREOF, the COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY has caused this Escrow Agreement to be signed in its name by its duly authorized
officer, and WELLS FARGO BANK, NATIONAL ASSOCIATION, has caused this Escrow
Agreement to be signed in its name by its duly authorized officer, all as of the day and year first
above written.
COUNTY OF CONTRA COSTA PUBLIC
FINANCING AUTHORITY
By:
Deputy Executive Director
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Escrow Agent
By:
Authorized Officer
4817-8636-3968.3
A-1
EXHIBIT A
REFUNDING REQUIREMENTS
4817-8636-3968.3
B-1
EXHIBIT B
ESCROWED SECURITIES
The following securities will be deposited into the Escrow Fund on [________], 2017:
Initial Cash Deposit: $[______]
4817-8636-3968.3
C-1
EXHIBIT C
NOTICE OF DEFEASANCE
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS (REFUNDING AND VARIOUS CAPITAL PROJECTS),
2007 SERIES A
AND
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS (MEDICAL CENTER REFUNDING),
2007 SERIES B
NOTICE IS HEREBY GIVEN to the owners of the above-referenced Bonds, issued by
the County of Contra Costa Public Financing Authority (the “Authority”) pursuant to a trust
agreement, dated as of February 1, 1999 (as supplemented and amended the “Trust Agreement”),
between the Authority and Wells Fargo Bank, National Association (“Wells Fargo Bank”), as
successor trustee, that the principal amount of Bonds identified below in the column labeled
“Principal Amount Refunded” and maturing on the dates identified below (hereinafter referred to
as the “Refunded Bonds”), have been defeased pursuant to section 10.01 of such Trust
Agreement and pursuant to an Escrow Agreement, dated as of March 1, 2017 (the “Escrow
Agreement”), by and between the Authority and Wells Fargo Bank, as trustee and escrow agent.
Prior to June 1, 2017 identified below (the “Redemption Date”) interest on the Refunded
Bonds will be paid in accordance with the provisions of the Trust Agreement from the escrow
fund (the “Escrow Fund”) established pursuant to the Escrow Agreement. On the Redemption
Date, the Refunded Bonds will be redeemed at the redemption price identified below of their
principal amount, plus accrued interest thereon to the Redemption Date, such redemption price
and accrued interest to be paid from the Escrow Fund on the Redemption Date.
2007 Series A
Redemption Date: June 1, 2017
Redemption Price: 100%
Maturity
(June 1)
Interest
Rate
CUSIP*
(21226P)
Principal Amount
Outstanding Principal Amount Refunded
2018 4.00% GQ5 $11,430,000 $11,430,000
2019 4.00 MW5 10,275,000 10,275,000
2020 5.00 MX3 10,685,000 10,685,000
2021 5.00 MY1 11,220,000 11,220,000
2022 5.00 MZ8 10,105,000 10,105,000
2023 4.50 NB0 3,330,000 3,330,000
2023 4.75 NA2 7,265,000 7,265,000
2024 4.50 NC8 4,480,000 4,480,000
2025 4.75 ND6 4,685,000 4,685,000
2026 4.50 NE4 4,905,000 4,905,000
2027 4.50 NF1 4,330,000 4,330,000
2028 4.50 NG9 1,210,000 1,210,000
* Note: CUSIP numbers provided above are provided for the convenience of the owners of the Bonds. Neither the Authority nor Wells Far go
Bank, as trustee and escrow agent, is responsible for the accuracy or completeness of the CUSIP numbers.
4817-8636-3968.3
C-2
2007 Series B
Redemption Date: June 1, 2017
Redemption Price: 100%
Maturity
(June 1)
Interest
Rate
Original CUSIP*
(21226P)
Principal Amount
Outstanding Principal Amount Refunded
2017 5.00% HM3 $14,075,000 $14,075,000
2018 5.00 HN1 3,655,000 3,655,000
* Note: CUSIP numbers provided above are provided for the convenience of the owners of the Bonds. Neither the Authority nor Wells Far go
Bank, as trustee and escrow agent, is responsible for the accuracy or completeness of the CUSIP numbers.
DATED:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee and Escrow Agent
4817-8636-3968.3
D-1
EXHIBIT D
NOTICE OF REDEMPTION
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS (REFUNDING AND VARIOUS CAPITAL PROJECTS),
2007 SERIES A
AND
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS (MEDICAL CENTER REFUNDING),
2007 SERIES B
NOTICE IS HEREBY GIVEN to the owners of the above-referenced Bonds, by Wells
Fargo Bank, National Association, as Trustee for the County of Contra Costa Public Financing
Authority (the “Authority”) that the Authority intends to exercise its option to redeem all
outstanding maturities identified below at a redemption price equal to 100% (the “Redemption
Price”), plus accrued interest thereon to June 1, 2017 (the “Redemption Date”). After the
Redemption Date, interest on the Bonds shall cease to accrue.
2007 Series A
Redemption Date: June 1, 2017
Redemption Price: 100%
Date Dated Maturity
(June 1)
Interest
Rate CUSIP* (21226P)
Principal Amount
Outstanding
Principal Amount
Refunded
March 14, 2007 2018 4.00% GQ5 $11,430,000 $11,430,000
March 14, 2007 2019 4.00 MW5 10,275,000 10,275,000
March 14, 2007 2020 5.00 MX3 10,685,000 10,685,000
March 14, 2007 2021 5.00 MY1 11,220,000 11,220,000
March 14, 2007 2022 5.00 MZ8 10,105,000 10,105,000
March 14, 2007 2023 4.50 NB0 3,330,000 3,330,000
March 14, 2007 2023 4.75 NA2 7,265,000 7,265,000
March 14, 2007 2024 4.50 NC8 4,480,000 4,480,000
March 14, 2007 2025 4.75 ND6 4,685,000 4,685,000
March 14, 2007 2026 4.50 NE4 4,905,000 4,905,000
March 14, 2007 2027 4.50 NF1 4,330,000 4,330,000
March 14, 2007 2028 4.50 NG9 1,210,000 1,210,000
* Note: CUSIP numbers provided above are provided for the convenience of the owners of the Bonds. Neither the Authority nor Wells Fargo
Bank, as trustee and escrow agent, is responsible for the accuracy or completeness of the CUSIP numbers.
2007 Series B
Redemption Date: June 1, 2017
Redemption Price: 100%
Date Dated Maturity
(June 1)
Interest
Rate
Original CUSIP*
(21226P)
Principal Amount
Outstanding
Principal Amount
Refunded
Aug. 7, 2007 2017 5.00% HM3 $14,075,000 $14,075,000
Aug. 7, 2007 2018 5.00 HN1 3,655,000 3,655,000
* Note: CUSIP numbers provided above are provided for the convenience of the owners of the Bonds. Neither the Authority nor Wells Far go
Bank, as trustee and escrow agent, is responsible for the accuracy or completeness of the CUSIP numbers.
4817-8636-3968.3
D-2
Payment of the Redemption Price of the Refunded Bonds will become due and payable
on the Redemption Date, and will be made upon presentation and surrender of the Refunded
Bond at the following address:
Registered/Certified Mail:
Wells Fargo Bank, N.A.
Corporate Trust Operations
MAC N9300-070
P.O. BOX 1517
Minneapolis, MN 55480
Air Courier:
Wells Fargo Bank, N.A.
Corporate Trust Operations
MAC N9300-070
600 Fourth St South – 7th Floor
Minneapolis, MN 55479
DATED:
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee and Escrow Agent
IMPORTANT NOTICE REGARDING TAX CERTIFICATION DOCUMENTATION AND
POTENTIAL WITHHOLDING: Pursuant to U.S. federal tax laws, you have a duty to provide the
required type of tax certification form to anyone making a payment to you that could constitute income or
gross proceeds reportable to you. That tax certification documentation must be received by the Trustee
(which includes the term “Withholding Agent” if you are a Nonresident Alien Individual or Foreign
Entity) on or before the date of the payment, or the date on which the transaction is reportable on either
IRS Form 1099 or IRS Form 1042-S even if no payment is made at that time. If you do not provide a
valid tax certification form as required, the Trustee will be required to apply the maximum amount of
withholding on that reportable payment. For example, if you are a U.S. taxpayer and do not provide a
Form W-9 by the effective date of a merger, the trade date of a sale, the Redemption Date or Mandatory
Tender Date or Tender Date or Conversion Date for a bond as the applicable term is defined in the Notice,
or the payment date for interest or dividends, the Trustee is required to apply 28% backup withholding to
the amount reportable as gross proceeds on a Form 1099-B, the interest amount reportable on a Form
1099-INT or the dividend amount reportable on a Form 1099-DIV. If you are a foreign person or entity,
you are required to provide the applicable type of IRS Form W -8 by those aforementioned dates, and
failure to do so can result in a 30% withholding rate being applied to the amount of the payment
reportable on IRS Form 1042-S.
4817-8636-3968.3
E-1
EXHIBIT E
FEE SCHEDULE
The one – time Escrow Agent Fee is [$_______].
4130012.01.12
4227807
CONTINUING COVENANT AGREEMENT
dated as of March 1, 2017,
among
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
COUNTY OF CONTRA COSTA
and
WELLS FARGO BANK, NATIONAL ASSOCIATION
relating to
$[Par Amount]
COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY
LEASE REVENUE BONDS
(REFUNDING AND CAPITAL PROJECTS)
2017 SERIES A
-i-
TABLE OF CONTENTS
SECTION HEADING PAGE
ARTICLE I DEFINITIONS .................................................................................................2
Section 1.01. Certain Defined Terms ...........................................................................2
Section 1.02. Computation of Time Periods ..............................................................11
Section 1.03. Construction .........................................................................................11
Section 1.04. Accounting Terms and Determinations ...............................................11
Section 1.05. Relation to Other Documents; Acknowledgment of
Different Provisions of Related Documents;
Incorporation by Reference ..................................................................12
ARTICLE II PURCHASE OF BONDS ..................................................................................13
Section 2.01. Purchase of Bonds................................................................................13
ARTICLE III THE BORROWER’S OBLIGATIONS ................................................................13
Section 3.01. Payment Obligations ............................................................................13
Section 3.02. Default Rate .........................................................................................15
Section 3.03. Determination of Taxability .................................................................15
Section 3.04. Maximum Interest Rate........................................................................16
Section 3.06. Net of Taxes, Etc. .................................................................................17
Section 3.07. Obligations Absolute ...........................................................................18
Section 3.08. Funding Indemnity ...............................................................................18
Section 3.05. County’s Obligations Are Payable Pursuant to Terms of
Facilities Lease .....................................................................................19
ARTICLE IV CONDITIONS PRECEDENT TO PURCHASE OF BONDS ....................................19
Section 4.01. Documentary Requirements .................................................................19
Section 4.02. Litigation ..............................................................................................21
Section 4.03. Other Matters .......................................................................................22
Section 4.04. Payment of Fees and Expenses ............................................................22
ARTICLE V REPRESENTATIONS AND WARRANTIES ........................................................22
Section 5.01. Existence and Power; Tax Status .........................................................22
Section 5.01. Existence and Power; Tax Status .........................................................28
ARTICLE VI COVENANTS OF THE BORROWER .................................................................32
Section 6.01. Existence, Etc .......................................................................................32
Section 6.02. Maintenance of Properties ...................................................................32
Section 6.03. Compliance with Laws; Taxes and Assessments .................................33
Section 6.04. Insurance ..............................................................................................33
Section 6.05. Reports .................................................................................................33
-ii-
Section 6.06. Maintenance of Books and Records ....................................................35
Section 6.07. Access to Books and Records ..............................................................35
Section 6.08. Compliance With Documents ..............................................................35
Section 6.10. Further Assurances...............................................................................36
Section 6.11. No Impairment .....................................................................................37
Section 6.12. Application of Bond Proceeds .............................................................37
Section 6.13. Trustee..................................................................................................37
Section 6.12. Limitation on Voluntary Liens .............................................................37
Section 6.15. Related Documents ..............................................................................37
Section 6.17. Conversions and Redemptions .............................................................37
Section 6.18. Disclosure to Participants, Purchaser Transferees and
Non-Purchaser Transferees ..................................................................37
Section 6.19. Other Agreements ................................................................................38
Section 6.20. Immunity from Jurisdiction .................................................................38
Section 6.21. Swap Contracts ....................................................................................38
Section 6.22. Budget and Appropriation ....................................................................39
Section 6.23. Use of Purchaser’s Name .....................................................................39
Section 6.24. Maintenance of Tax-Exempt Status of Bonds .....................................39
Section 6.25. ERISA ..................................................................................................39
Section 6.26. Investment Policy.................................................................................39
Section 6.27. Environmental Laws ............................................................................39
Section 6.28. Federal Reserve Board Regulations .....................................................40
Section 6.29. Underlying Rating ................................................................................40
Section 6.30. Repayment of Purchaser ......................................................................40
Section 6.31. Disaster Relief ......................................................................................40
Section 6.32. Voluntary Rent Abatement ..................................................................41
Section 6.33. Operation and Maintenance of the Project ...........................................41
Section 6.34. Compliance with Laws; Taxes and Assessments .................................41
Section 6.35. Fair Rental Value .................................................................................41
Section 6.36. Substitution or Removal of Property ...................................................41
ARTICLE VII EVENTS OF DEFAULT ..................................................................................42
Section 7.01. Events of Default .................................................................................42
Section 7.02. Consequences of an Event of Default ..................................................45
Section 7.03. Remedies Cumulative; Solely for the Benefit of
Purchaser ..............................................................................................45
Section 7.04. Waivers or Omissions ..........................................................................46
Section 7.05. Discontinuance of Proceedings ............................................................46
ARTICLE VIII INDEMNIFICATION .......................................................................................46
Section 8.01. Indemnification ....................................................................................46
Section 8.02. Survival ................................................................................................47
ARTICLE IX MISCELLANEOUS ........................................................................................47
Section 9.01. Patriot Act Notice ................................................................................47
-iii-
Section 9.02. Further Assurances...............................................................................47
Section 9.03. Amendments and Waivers; Enforcement ............................................48
Section 9.04. No Implied Waiver; Cumulative Remedies .........................................48
Section 9.05. Notices .................................................................................................48
Section 9.06. Right of Setoff......................................................................................49
Section 9.07. No Third-Party Rights..........................................................................50
Section 9.08. Severability ..........................................................................................50
Section 9.09. Governing Law; Consent to Jurisdiction and Venue;
Waiver of Jury Trial .............................................................................50
Section 9.10. Arbitration ............................................ Error! Bookmark not defined.
Section 9.11. Prior Understandings ...........................................................................51
Section 9.12. Duration ...............................................................................................51
Section 9.13. Counterparts .........................................................................................51
Section 9.14. Successors and Assigns ........................................................................51
Section 9.15. No Advisory or Fiduciary Responsibility ............................................53
Section 9.16. Headings ..............................................................................................54
Section 9.17. Electronic Signatures ...........................................................................54
EXHIBITS
EXHIBIT A – FORM OF COMPLIANCE CERTIFICATE
EXHIBIT B – BREAKAGE FEE CALCULATION
CONTINUING COVENANT AGREEMENT
THIS CONTINUING COVENANT AGREEMENT, dated as of March 1, 2017 (as amended,
supplemented, modified or restated from time to time, this “Agreement”), among the COUNTY OF
CONTRA COSTA PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly created
by and existing under the laws of the State of California (the “Authority”), the COUNTY OF
CONTRA COSTA, body corporate and politic and political subdivision of the State of California
(the “County”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association.
R ECITALS
WHEREAS, the Authority is issuing its Lease Revenue Bonds (Refunding and Capital
Projects) 2017 Series A (the “Bonds”) pursuant to a Trust Agreement dated as of March 1, 2017
(as the same may be amended, supplemented, modified or restated in accordance with the terms
thereof and hereof, the “Trust Agreement”), between the Authority and Wells Fargo Bank,
National Association, as trustee (the “Trustee”); and
WHEREAS, the Authority has previously issued its Lease Revenue Bonds (Refunding and
Various Capital Projects) 2007 Series A, its Lease Revenue Bonds (Medical Center Refunding)
2007 Series B and its Lease Revenue Bonds (Capital Projects Program) 2009 Series A
(collectively, the “Refunded Bonds”) to assist the County in financing certain capital projects and
to refund certain outstanding bonds issued for the benefit of the County.
WHEREAS, the County wishes to cause the refunding of the Refunded Bonds and to
finance certain capital projects.
WHEREAS, pursuant to the terms of the hereinafter defined Site Lease, the County has
leased to the Authority the Facilities (as hereinafter defined).
WHEREAS, pursuant to the terms of the hereinafter defined Facilities Lease, the Authority
has subleased to the County the Facilities.
WHEREAS, the principal of and interest on the Bonds will be payable from the Base
Rental Payments (as hereinafter defined) made by the County to the Authority pursuant to the
terms of the Facilities Lease and the Authority has assigned its rights to receive such Base Rental
Payments to the Trustee;
WHEREAS, the Purchaser has agreed to purchase the Bonds, and as a condition to such
purchase, the Purchaser has required the County and the Authority to enter into this Agreement.
NOW, THEREFORE, to induce the Purchaser to purchase the Bonds, and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the County, the Authority and the Purchaser hereby agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. In addition to the terms defined in the recitals and
elsewhere in this Agreement, the Trust Agreement and the Facilities Lease, the following terms
shall have the following meanings:
“1933 Act” means the Securities Act of 1933, as amended.
“Additional Payments” has the meaning set forth in the Facilities Lease.
“Affiliate” means, with respect to any Person, any Person that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under common control
with, such first Person. A Person shall be deemed to control another Person for the purposes of
this definition if such first Person possesses, directly or indirectly, the power to direct, or cause
the direction of, the management and policies of the second Person, whether through the
ownership of voting securities, common directors, trustees or officers, by contract or otherwise.
“Agreement” has the meaning set forth in the introductory paragraph hereof.
“Anti-Terrorism Laws” has the meaning set forth in Section 5.01(aa) hereof.
“Applicable Law” means (a) all applicable common law and principles of equity and
(b) all applicable provisions of all (i) constitutions, statutes, rules, regulations and orders of all
Governmental Authorities, (ii) Governmental Approvals and (iii) orders, decisions, judgments,
writs, injunctions and decrees of all courts (whether at law or in equity) and arbitrators.
“Authority” has the meaning set forth in the introductory paragraph hereof.
“Authority Representative” means any person authorized from time to time in writing by
the Authority, or its successors and assigns, to perform a designated act or execute a designated
document.
“Bank Agreement” means any credit agreement, liquidity agreement, standby bond
purchase agreement, reimbursement agreement, direct purchase agreement, bond purchase
agreement, or other agreement or instrument (or any amendment, supplement or other
modification thereof) under which, directly or indirectly, any Person or Persons undertake(s) to
make or provide funds to make payment of, or to purchase or provide credit enhancement for
bonds or notes issued by or on behalf of the County.
“Base Rate” means, for any day, a fluctuating rate of interest per annum equal to the
greatest of (i) the Prime Rate in effect at such time plus one percent (1.0%), (ii) the Federal
Funds Rate in effect at such time plus two percent (2.0%), and (iii) seven percent (7.0%).
“Base Rental Payments” has the meaning set forth in the Facilities Lease.
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“Bond Counsel” means Nixon Peabody LLP or any other firm of attorneys nationally
recognized on the subject of tax-exempt municipal finance selected by the County.
“Bondholder” means the Purchaser and each Purchaser Transferee or Non-Purchaser
Transferee pursuant to Section 9.13 hereof so long as such Purchaser Transferee or
Non-Purchaser Transferee is an owner of Bonds.
“Bonds” has the meaning set forth in the recitals hereof.
“Breakage Fee” has the meaning set forth in Section 3.07 hereof.
“Business Day” means a day which is not (a) a Saturday, Sunday or legal holiday on
which banking institutions in San Francisco, California or New York, New York or the states
where the principal corporate office of the County or the principal corporate trust office of the
Trustee is located are authorized by law to close, (b) a day on which the New York Stock
Exchange or the Federal Reserve Bank is closed or (c) a day on which the principal office of the
Purchaser is closed.
“Code” means the Internal Revenue Code of 1986, as amended, and, where appropriate
any statutory predecessor or any successor thereto.
“Compliance Certificate” means a certificate substantially in form of Exhibit A hereto.
“Controlled Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which, together with
the County or the Authority, as applicable, are treated as a single employer under Section 414 of
the Code.
“County” has the meaning set forth in the introductory paragraph hereof.
“County Representative” means any person authorized from time to time in writing by
the County, or its successors and assigns, to perform a designated act or execute a designated
document.
“Cross-Default Parity Debt” means any Debt (solely to the extent described in
subparagraphs (a), (b) or (e) of the definition of Debt) of the County (including, without
limitation, lease revenue bonds and certificates of participation) or issued on behalf of the
County that is payable directly from, and rated based on, the County’s general fund.
“Debt” of any Person means at any date, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments, (c) all obligations of such Person as lessee under capital
leases, (d) all Guarantees by such Person of Debt of other Persons, (e) the maximum amount of
all direct obligations of such Person arising under letters of credit (including standby and
commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments and
(f) all obligations of such Person under any Swap Contract.
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“Default” means any event or condition which, with notice, the passage of time or any
combination of the foregoing, would constitute an Event of Default.
“Default Rate” means, for any day, a rate of interest per annum equal to the sum of the
Base Rate in effect on such day plus three percent (3.0%).
“Determination of Taxability” means and shall be deemed to have occurred on the first to
occur of the following:
(i) the date on which the County or the Authority files any statement,
supplemental statement or other tax schedule, return or document which discloses that an
Event of Taxability shall have in fact occurred;
(ii) the date on which the Bondholder or any former Bondholder notifies the
Authority and the County that it has received a written opinion by a nationally recognized
firm of attorneys of substantial expertise on the subject of tax-exempt municipal finance
to the effect that an Event of Taxability shall have occurred unless, within one hundred
eighty (180) days after receipt by the County and the Authority of such notification from
the Bondholder or any former Bondholder, the County or the Authority shall deliver to
the Bondholder and any former Bondholder (A) the opinion of another nationally
recognized firm of attorneys of substantial expertise on the subject of tax-exempt
municipal finance to the effect that no Event of Taxability has occurred, or (B) a ruling or
determination letter issued to or on behalf of the County or the Authority by the
Commissioner of the Internal Revenue Service or the Director of Tax-Exempt Bonds of
the Tax-Exempt and Government Entities Division of the Internal Revenue Service (or
any other government official exercising the same or a substantially similar function from
time to time) to the effect that, after taking into consideration such facts as form the basis
for the opinion that an Event of Taxability has occurred, an Event of Taxability shall not
have occurred;
(iii) the date on which the Authority or the County shall be advised in writing
by the Commissioner of the Internal Revenue Service or the Director of Tax-Exempt
Bonds of the Tax-Exempt and Government Entities Division of the Internal Revenue
Service (or any other government official exercising the same or a substantially similar
function from time to time, including an employee subordinate to one of these officers
who has been authorized to provide such advice) that, based upon filings of the County
and/or the Authority, or upon any review or audit of the County and/or the Authority or
upon any other ground whatsoever, an Event of Taxability shall have occurred; or
(iv) the date on which the County and/or the Authority shall receive notice
from the Bondholder or any former Bondholder that the Internal Revenue Service (or any
other government official or agency exercising the same or a substantially similar
function from time to time) has assessed as includable in the gross income of such
Bondholder or such former Bondholder the interest on the Bonds due to the occurrence of
an Event of Taxability;
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provided, however, no Determination of Taxability shall occur under subparagraph (iii) or (iv)
hereunder unless the County has been afforded the opportunity, at its expense, to contest any
such assessment, and, further, no Determination of Taxability shall occur until such contest, if
made, has been finally determined; provided further, however, that upon demand from the
Bondholder or former Bondholder, the Authority shall promptly reimburse, as Additional
Payments, but solely from payments made by the County, such Bondholder or former
Bondholder for any payments, including any taxes, interest, penalties or other charges, such
Bondholder (or former Bondholder) shall be obligated to make as a result of the Determination
of Taxability.
“DTC” means The Depository Trust Company.
“Effective Date” means March [__], 2017 subject to the satisfaction or waiver by the
Purchaser of all of the conditions precedent set forth in Article IV hereof.
“EMMA” means Electronic Municipal Market Access as provided by the Municipal
Securities Rulemaking Board.
“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to waste or public
systems.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute of similar import, and regulations thereunder, in each case as in effect
from time to time. References to Sections of ERISA shall be construed also to refer to any
successor Sections.
“Event of Default” with respect to this Agreement has the meaning set forth in
Section 7.01 hereof and, with respect to any Related Document, has the meaning set forth
therein.
“Event of Taxability” means the occurrence or existence of any fact, event or
circumstance resulting from the taking of any action by the County or the Authority, or the
failure to take any action by the County or the Authority, or the making by the County or the
Authority of any misrepresentation herein or in any certificate required to be given in connection
with the issuance, sale or delivery of the Bonds which has the effect of causing interest paid or
payable on the Bonds to become includable, in whole or in part, in the gross income of the
Bondholder or any former Bondholder for federal income tax purposes.
“Excess Interest Amount” has the meaning set forth in Section 3.04 hereof.
“Excluded Taxes” means, with respect to the Purchaser or any Bondholder, (a) taxes
imposed on or measured by its overall net income (however denominated), and franchise taxes
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imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which the Purchaser or such Bondholder is organized or in which its
principal office is located, and (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the Purchaser is located.
“Executive Order” has the meaning set forth in Section 5.01(aa) hereof.
“Facilities” has the meaning set forth in the Facilities Lease.
“Facilities Lease” means the lease, entitled “Facilities Lease” by and between the
County and the Authority, dated as of March 1, 2017, which facilities lease or a memorandum
thereof was recorded in the office of the County Recorder of the County of Contra Costa on
[________] as document No. [_________], as originally executed and recorded or as it may from
time to time be amended, supplemented, modified or restated pursuant to the provisions hereof
and thereof.
“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided that: (a) if
such day is not a Business Day, then the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next succeeding
Business Day; and (b) if no such rate is so published on such next succeeding Business Day, then
the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a
whole multiple of one-hundredth of one percent) charged to Well Fargo Bank, National
Association on such day on such transactions as determined by Well Fargo Bank, National
Association. Notwithstanding anything herein to the contrary, if the Federal Funds Rate as
determined as provided above would be less than zero percent (0.0%), then the Federal Funds
Rate shall be deemed to be zero percent (0.0%).
“Fiscal Year” means the twelve-month period from July 1 through the following
June 30.
“Fitch” means Fitch, Inc., and any successor rating agency.
“FRB” means the Board of Governors of the Federal Reserve System of the United
States, together with any successors thereof.
“Generally Accepted Accounting Principles” or “GAAP” means generally accepted
accounting principles set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants, statements and pronouncements
of the Financial Accounting Standards Board (or any successor authority) and statements and
pronouncements of the Governmental Accounting Standards Board (or any successor authority),
in each case in effect from time to time in the United States and applicable to entities such as the
County.
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“Governmental Approval” means an authorization, consent, approval, permit, license, a
registration or filing with any Governmental Authority.
“Governmental Authority” means the government of the United States of America or any
other nation or any political subdivision thereof or any governmental or quasi-governmental
entity, including any court, department, commission, board, bureau, agency, administration,
central bank, service, district or other instrumentality of any governmental entity or other entity
exercising executive, legislative, judicial, taxing, regulatory, fiscal, monetary or administrative
powers or functions of or pertaining to government (including any supra-national bodies such as
the European Union or European Central Bank), or any arbitrator, mediator or other Person with
authority to bind a party at law.
“Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Debt or other
obligation payable or performable by another Person (the “primary obligor”) in any manner,
whether directly or indirectly, and including any obligation of such Person, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or
other obligation, (ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Debt or other obligation of the payment or performance of
such Debt or other obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity or level of income or cash flow of the primary obligor
so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for
the purpose of assuring in any other manner the obligee in respect of such Debt or other
obligation of the payment or performance thereof or to protect such obligee against loss in
respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any
Debt or other obligation of any other Person, whether or not such Debt or other obligation is
assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to
obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to
the stated or determinable amount of the related primary obligation, or portion thereof, in respect
of which such Guarantee is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.
The term “Guarantee” as a verb has a corresponding meaning.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitee” has the meaning set forth in Section 8.01 hereof.
“Investment Policy” means the investment policy of the County delivered to the
Purchaser pursuant to Section 4.01(a)(vi) hereof.
“Investor Letter” has the meaning set forth in Section 9.13(c) hereof.
“Law” means any treaty or any federal, regional, state and local law, statute, rule,
ordinance, regulation, code, license, authorization, decision, injunction, interpretation, order or
decree of any court or other Governmental Authority.
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“Lease Payments” means, collectively, the Base Rental Payments and the Additional
Payments.
“Liabilities” has the meaning set forth in Section 8.01 hereof.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or
preferential arrangement in the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, any easement, right of way or
other encumbrance on title to real property, and any financing lease having substantially the
same economic effect as any of the foregoing).
“Majority Bondholder” means the Bondholders with a majority of the aggregate
principal amount of Bonds from time to time. As of the Effective Date, Wells Fargo Bank,
National Association shall be the Majority Bondholder.
“Margin Stock” has the meaning ascribed to such term in Regulation U promulgated by
the FRB, as now and hereafter from time to time in effect.
“Material Adverse Effect” means: (a) a material adverse change in the financial condition
of the County; (b) a material impairment of the ability of the County or the Authority to perform
its respective obligations under any Related Document to which it is a party; or (c) a material
adverse effect upon the legality, validity, binding effect or enforceability against the County or
the Authority of any Related Document to which it is a party.
“Maximum Annual Rent” means, for each Rental Payment Period, [$____________] or,
if the fair rental value of the Facilities has changed after the Effective Date, including through
the release of Facilities pursuant to Section 2.02 of the Facilities Lease or the substitution,
release or addition of real property pursuant to Section 2.03 of the Facilities Lease, the fair rental
value of the Facilities for such Rental Payment Period as determined by a written appraisal of an
independent appraiser or as otherwise reasonably determined by the County in accordance with
the Facilities Lease.
“Maximum Interest Rate” means the maximum rate of interest on the relevant obligation
permitted by applicable law.
“Moody’s” means Moody’s Investors Service, Inc. and any successor rating agency.
“Non-Purchaser Transferee” has the meaning set forth in Section 9.13(c) hereof.
“Obligations” means all amounts payable by the County and/or the Authority, and all
other obligations to be performed by the County and/or the Authority, pursuant to this
Agreement and the other Related Documents (including any amounts to reimburse the Purchaser
for any advances or expenditures by it under any of such documents).
“OFAC” has the meaning set forth in Section 5.01(aa) hereof.
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“Other Taxes” has the meaning set forth in Section 3.05(a) hereof.
“Parity Debt” means any Debt of the County (including, without limitation, lease
revenue bonds and certificates of participation) or issued on behalf of the County that is payable
directly from, and rated based on, the County’s general fund.
“Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Title III of Pub. L. 107-56
(signed into law October 26, 2001).
“PBGC” means the Pension Benefit Guaranty Corporation or any successor thereto.
“Permitted Encumbrances” has the meaning set forth in the the Trust Agreement.
“Person” means any individual, corporation, not for profit corporation, partnership,
limited liability company, joint venture, association, professional association, joint stock
company, trust, unincorporated organization, government or any agency or political subdivision
thereof or any other form of entity.
“Plan” means, with respect to the County or the Authority, as applicable, at any time, an
employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code and either (i) is maintained, or has within the
preceding five plan years been maintained, by a member of the Controlled Group for employees
of a member of the Controlled Group of which the County or the Authority, as applicable, is a
part, (ii) is maintained pursuant to a collective bargaining agreement or any other arrangement
under which more than one employer makes contributions and to which a member of the
Controlled Group of which the County or the Authority, as applicable, is a part is then making or
accruing an obligation to make contributions or has within the preceding five plan years made
contributions.
“Prime Rate” means on any day, the rate of interest per annum then most recently
established by the Purchaser as its “prime rate.” Any such rate is a general reference rate of
interest, may not be related to any other rate, and may not be the lowest or best rate actually
charged by the Purchaser to any customer or a favored rate and may not correspond with future
increases or decreases in interest rates charged by other lenders or market rates in general, and
that the Purchaser may make various business or other loans at rates of interest having no
relationship to such rate. If the Purchaser ceases to establish or publish a prime rate from which
the Prime Rate is then determined, the applicable variable rate from which the Prime Rate is
determined thereafter shall be instead the prime rate reported in The Wall Street Journal (or the
average prime rate if a high and a low prime rate are therein reported), and the Prime Rate shall
change without notice with each change in such prime rate as of the date such change is reported.
Notwithstanding anything herein to the contrary, if the Prime Rate determined as provided above
would be less than zero percent (0.0%), then the Prime Rate shall be deemed to be zero percent
(0.0%).
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“Property” means any interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible, whether now owned or hereafter acquired.
“Purchase Price” has the meaning set forth in Section 2.01(a) hereof.
“Purchaser” means, initially, Wells Fargo Bank, National Association, a national
banking association, and its successors and assigns, and upon the receipt from time to time by the
Trustee and the County of a notice described in Section 9.13(a) from time to time means the
Person designated in such notice as the Purchaser, as more fully provided in Section 9.13(a)
hereof.
“Purchaser Affiliate” means the Purchaser and any Affiliate of the Purchaser, and
includes, without limitation, Wells Fargo Municipal Capital Strategies, LLC and Wells Fargo
Securities (a trade name).
“Purchaser Transferee” has the meaning set forth in Section 9.13(b) hereof.
“Rating Agency” means any of S&P, Moody’s and Fitch, as applicable.
“Related Documents” means this Agreement, the Trust Agreement, the Bonds, the Site
Lease, the Facilities Lease and any exhibits, schedules, instruments or agreements relating
thereto, as the same may be amended, modified or supplemented in accordance with the terms
thereof and hereof.
“Rental Payment Period” has the meaning set forth in the Facilities Lease.
“Revenues” has the meaning set forth in the Trust Agreement.
“S&P” means S&P Global Ratings, and any successor rating agency.
“Site Lease” means the lease, entitled “Site Lease,” by and between the County and the
Authority, dated as of March 1, 2017, which lease or a memorandum thereof was recorded in the
office of the County Recorder of the County of Contra Costa on [________] as document No.
[_________], as originally executed and recorded or as it may from time to time be amended,
supplemented, modified or restated pursuant to the provisions hereof and thereof.
“State” means the State of California.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or bond price or
bond index swaps or options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of the foregoing),
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whether or not any such transaction is governed by or subject to any master agreement, and
(b) any and all transactions of any kind, and the related confirmations, which are subject to the
terms and conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement, together with
any related schedules, a “Master Agreement”), including any such obligations or liabilities under
any Master Agreement.
“Taxable Date” means the date on which interest on the Bonds is first includable in gross
income of the Bondholder (including, without limitation, any previous Bondholder) thereof as a
result of an Event of Taxability as such a date is established pursuant to a Determination of
Taxability.
“Taxable Period” has the meaning set forth in Section 3.03 hereof.
“Taxable Rate” means, for each day during a Taxable Period, a rate of interest per
annum equal to the product of (i) the interest rate on the Bonds for such day and (ii) 1.54.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges imposed by any
Governmental Authority, including any interest, fines, additions to tax or penalties applicable
thereto.
“Title Company” means First American Title Insurance Company.
“Trustee” has the meaning set forth in the recitals hereof.
“Trust Agreement” has the meaning set forth in the recitals hereof.
Section 1.02. Computation of Time Periods. In this Agreement, in the computation of a
period of time from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding.”
Section 1.03. Construction. Unless the context of this Agreement otherwise clearly
requires, references to the plural include the singular, to the singular include the plural and to the
part include the whole. The word “including” shall be deemed to mean “including but not
limited to,” and “or” has the inclusive meaning represented by the phrase “and/or.” The words
“hereof,” “herein,” “hereunder” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. The Section headings contained in
this Agreement and the table of contents preceding this Agreement are for reference purposes
only and shall not control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection and exhibit references are to this Agreement unless
otherwise specified.
Section 1.04. Accounting Terms and Determinations. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting determinations hereunder
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shall be made, and all financial statements required to be delivered hereunder shall be prepared,
in accordance with GAAP. If, after the Effective Date, there shall occur any change in GAAP
from those used in the preparation of the financial statements referred to in Section 6.05 hereof
and such change shall result in a change in the method of calculation of any financial covenant,
standard or term found in this Agreement, either the County, the Authority or the Purchaser may
by notice to the other party hereto, require that the Purchaser and the County and the Authority
negotiate in good faith to amend such covenants, standards, and terms so as equitably to reflect
such change in accounting principles, with the desired result being that the criteria for evaluating
the financial condition of the County shall be the same as if such change had not been made. No
delay by the County, the Authority or the Purchaser in requiring such negotiation shall limit their
right to so require such a negotiation at any time after such a change in accounting principles.
Until any such covenant, standard, or term is amended in accordance with this Section 1.04,
financial covenants shall be computed and determined in accordance with GAAP in effect prior
to such change in accounting principles.
Section 1.05. Relation to Other Documents; Acknowledgment of Different Provisions of
Related Documents; Incorporation by Reference. (a) Nothing in this Agreement shall be deemed
to amend, or relieve the County or the Authority of its respective obligations under, any Related
Document to which they are a party. Conversely, to the extent that the provisions of any Related
Document allow the County or the Authority to take certain actions, or not to take certain
actions, with regard for example to permitted liens, transfers of assets, maintenance of financial
ratios and similar matters, the County and the Authority nevertheless shall be fully bound by the
provisions of this Agreement.
(b) Except as provided in subsection (c) of this Section 1.05, all references to other
documents shall be deemed to include all amendments, modifications and supplements thereto to
the extent such amendment, modification or supplement is made in accordance with the
provisions of such document and this Agreement.
(c) All provisions of this Agreement making reference to specific Sections of any
Related Document shall be deemed to incorporate such Sections into this Agreement by
reference as though specifically set forth herein (with such changes and modifications as may be
herein provided) and shall continue in full force and effect with respect to this Agreement
notwithstanding payment of all amounts due under or secured by the Related Documents, the
termination or defeasance thereof or any amendment thereto or any waiver given in connection
therewith, so long as this Agreement is in effect and until all Obligations are paid in full. No
amendment, modification, consent, waiver or termination with respect to any of such Sections
shall be effective as to this Agreement until specifically agreed to in writing by the parties hereto
with specific reference to this Agreement.
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ARTICLE II
PURCHASE OF BONDS
Section 2.01. Purchase of Bonds.
(a) Purchase Price. Upon the conditions set forth in Article IV hereof and based on the
representations, warranties and covenants of the County and the Authority set forth in the Trust
Agreement, the Facilities Lease and herein, the Purchaser hereby agrees to purchase from the
Authority and the Authority agrees to sell to the Purchaser, all, but not less than all, of the Bonds
at par in an aggregate principal amount equal to [$Par Amount] for the Bonds (the “Purchase
Price”).
(b) Closing. On the Effective Date, the County and the Authority shall deliver to the
Purchaser the documents described in Article IV hereof. Upon delivery of such documents and
the satisfaction or waiver by the Purchaser of the conditions precedent set forth in Article IV
hereof, the Purchaser will pay the full Purchase Price in immediately available federal funds
payable to the Trustee on behalf of the County and the Authority. One fully registered Bond, in
the aggregate principal amount equal to the applicable Purchase Price, shall be issued to and
registered in the name of Cede & Co., nominee for DTC, as securities depository, and the
beneficial interests in the Bonds so registered will be credited to such accounts with DTC as the
Purchaser shall designate.
ARTICLE III
THE COUNTY’S AND AUTHORITY’S OBLIGATIONS
Section 3.01. Payment Obligations. (a) The County or the Authority, as applicable,
hereby unconditionally, irrevocably and absolutely agrees to make prompt and full payment of
all payment obligations owed to the Purchaser under the Related Documents, and to pay any
other Obligations owing to the Purchaser whether now existing or hereafter arising, irrespective
of their nature, whether direct or indirect, absolute or contingent, with interest thereon at the rate
or rates provided in such Related Documents and under such Obligations.
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(b) The principal and interest on the Bonds is due and payable on each mandatory
sinking fund payment date and on the maturity date in accordance with the Trust Agreement. In
the event the Bondholders have not received all payments on the Bonds due on each mandatory
sinking fund payment date and on the maturity date in accordance with the Trust Agreement, it
shall constitute an Event of Default hereunder and under the Trust Agreement and the County
and/or the Authority shall pay or cause to be paid to the Bondholders interest on the unpaid
principal amount of such Bonds from such mandatory sinking fund payment date or the maturity
date, as applicable, until the date all such Bonds are paid in full at a rate per annum equal to the
Default Rate, payable on demand. The Bonds shall mature on the maturity date in accordance
with the Trust Agreement unless, prior to such date, the Bonds are accelerated pursuant to the
Trust Agreement due to an Event of Default or the Bonds are redeemed or otherwise prepaid in
full prior to such date at the option of the Corporation in accordance with the Trust Agreement
and Section 6.17(b) herein. Any optional redemption or prepayment shall be subject to Section
3.07 hereof.
(c) The County and/or the Authority, as applicable, shall pay to the Purchaser, as
Additional Payments, within thirty (30) days after demand:
(i) if an Event of Default shall have occurred, all costs and expenses of the
Purchaser in connection with the enforcement (whether by means of legal proceedings or
otherwise) of any of its rights under this Agreement, the other Related Documents and
such other documents which may be delivered in connection therewith;
(ii) a fee for each amendment to this Agreement or any other Related
Document or any consent or waiver by the Purchaser with respect to any Related
Document, in each case, in a minimum amount of $2,500 plus the reasonable fees and
expenses of counsel to the Purchaser;
(iii) the reasonable fees and out-of-pocket expenses for counsel or other
reasonably required consultants to the Purchaser in connection with advising the
Purchaser as to its rights and responsibilities under this Agreement and the other Related
Documents in connection with responding to requests from the County or the Authority
for approvals, consents and waivers; and
(iv) any amounts advanced by or on behalf of the Purchaser to the extent
required to cure any Default, Event of Default or event of nonperformance hereunder or
any Related Document, together with interest at the Default Rate.
In addition, if at any time any Governmental Authority shall require revenue or other
documentary stamps or any other tax in connection with the execution or delivery of this
Agreement or other Related Documents, then, if the County and/or the Authority lawfully may
pay for such stamps, taxes or fees, the County and/or the Authority, as applicable, shall pay as
Additional Payments, when due and payable, for all such stamps, taxes and fees, including
interest and penalties thereon, and the County and the Authority agree to save the Purchaser
harmless from and against any and all liabilities with respect to or resulting from any delay of the
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County and/or the Authority in paying, or omission of the County and/or the Authority to pay,
such stamps, taxes and fees hereunder.
Section 3.02. Default Rate. Upon the occurrence and during the continuance of an Event
of Default, the Obligations shall bear interest at the Default Rate, which shall be payable by the
Authority to each Bondholder (or, if applicable, the Purchaser) upon demand therefor and be
calculated on the basis of a 360-day year and actual days elapsed. Notwithstanding anything to
the contrary herein, upon a Determination of Taxability, the Obligations shall bear interest at the
Taxable Rate rather than the Default Rate, and, together with Section 3.03 hereof, shall be the
sole remedies for a breach of Section 6.24 hereof; provided that if any other Event of Default
shall have occurred and be continuing (other than as a result of a breach of Section 6.24 hereof),
the Obligations shall bear interest at the Default Rate.
Section 3.03. Determination of Taxability. (i) In the event a Determination of Taxability
occurs, to the extent not payable to each Bondholder (or to the Purchaser for the period that it
was the Bondholder of any of the Bonds) under the terms of the Trust Agreement and the Bonds,
the County and/or the Authority, as applicable, hereby agrees to pay as Additional Payments to
the Authority or each Bondholder (or, if applicable, the Purchaser), as required pursuant to the
terms of the Facilities Lease, on demand therefor (1) an amount equal to the difference between
(A) the amount of interest that would have been paid to such Bondholder (or, if applicable, the
Purchaser) on the Bonds during the period for which interest on the Bonds is included in the
gross income of such Bondholder (or, if applicable, the Purchaser) if the Bonds had borne
interest at the Taxable Rate, beginning on the Taxable Date (the “Taxable Period”), and (B) the
amount of interest actually paid to the Bondholder (or, if applicable, the Purchaser) during the
Taxable Period, and (2) an amount equal to any interest, penalties or charges owed by such
Bondholder (or, if applicable, the Purchaser) as a result of interest on the Bonds becoming
included in the gross income of such Bondholder (or, if applicable, the Purchaser), together with
any and all attorneys’ fees, court costs, or other out-of-pocket costs incurred by such Bondholder
(or, if applicable, the Purchaser) in connection therewith;
(ii) Subject to the provisions of clause (iii) below, such Bondholder (or, if applicable,
the Purchaser) shall afford the County and/or the Authority the opportunity, at its sole cost and
expense, to contest any challenge to the validity of the tax exemption with respect to the interest
on the Bonds, including the right to direct the necessary litigation contesting such challenge
(including administrative audit appeals); provided that, in no event shall a Bondholder be
required to make available its tax returns (or any other information relating to its taxes that it
deems confidential) to the County and/or the Authority or any other Person; and
(iii) As a condition precedent to the exercise by the County and/or the Authority of its
right to contest set forth in clause (ii) above, the County and/or the Authority, as applicable,
shall, on demand, immediately reimburse such Bondholder (or, if applicable, the Purchaser), as
Additional Payments, for any and all expenses (including attorneys’ fees for services that may be
required or desirable, as determined by such Bondholder (or, if applicable, the Purchaser) in its
sole discretion) that may be incurred by the Bondholder (or, if applicable, the Purchaser) in
connection with any such contest, and shall, on demand, immediately reimburse the Bondholder
(or, if applicable, the Purchaser) for any and all penalties or other charges payable by such
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Bondholder (or, if applicable, the Purchaser) for failure to include such interest in its gross
income.
Section 3.04. Maximum Interest Rate. (i) If the amount of interest payable for any period
in accordance with the terms hereof or the Bonds exceeds the amount of interest that would be
payable for such period had interest for such period been calculated at the Maximum Interest
Rate, then interest for such period shall be payable in an amount calculated at the Maximum
Interest Rate.
(ii) Any interest that would have been due and payable for any period but for the
operation of the immediately preceding subclause (i) shall accrue and be payable as provided in
this subclause (ii) and shall, less interest actually paid to each Bondholder for such period,
constitute the “Excess Interest Amount.” If there is any accrued and unpaid Excess Interest
Amount as of any date, then the principal amount with respect to which interest is payable shall
bear interest at the Maximum Interest Rate until payment to each Bondholder of the entire
Excess Interest Amount.
(iii) Notwithstanding the foregoing, on the date on which no principal amount with
respect to the Bonds remains unpaid, the County and/or the Authority, as applicable, shall pay to
each Bondholder as Additional Payments a fee equal to any accrued and unpaid Excess Interest
Amount.
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Section 3.05. Net of Taxes, Etc. (a) Any and all payments to the Purchaser or any
Bondholder by the County and/or the Authority hereunder or with respect to the Bonds shall be
made free and clear of and without deduction or withholding for any and all Indemnified Taxes.
If the County and/or the Authority shall be required by law to deduct or withhold any
Indemnified Taxes imposed by the United States of America or any political subdivision thereof
from or in respect of any sum payable hereunder or with respect to the Bonds, then (i) the sum
payable shall be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section) the Purchaser or
such Bondholder receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the County and/or the Authority, as applicable, shall make such
deductions and (iii) the County and/or the Authority, as applicable, shall timely pay the full
amount deducted to the relevant taxation authority or other authority in accordance with
applicable law. If the County and/or the Authority shall make any payment under this Section to
or for the benefit of the Purchaser or such Bondholder with respect to Indemnified Taxes and if
the Purchaser or such Bondholder shall claim any credit or deduction for such Indemnified Taxes
against any other taxes payable by the Purchaser or such Bondholder to any taxing jurisdiction in
the United States of America then the Purchaser or such Bondholder shall pay to the County
and/or the Authority, as applicable, an amount equal to the amount by which such other taxes are
actually reduced; provided, that the aggregate amount payable by the Purchaser or such
Bondholder pursuant to this sentence shall not exceed the aggregate amount previously paid by
the County and/or the Authority with respect to such Indemnified Taxes. In addition, the County
and/or the Authority, as applicable, agree to pay any present or future stamp, recording or
documentary taxes and any other excise or property taxes, charges or similar levies that arise
under the laws of the United States of America or any state of the United States from any
payment made hereunder or under the Bonds or from the execution or delivery of this Agreement
or the Bonds, or otherwise with respect to this Agreement or the Bonds (hereinafter referred to as
“Other Taxes”). The Purchaser or such Bondholder shall provide to the County and the
Authority within a reasonable time a copy of any written notification it receives with respect to
Indemnified Taxes or Other Taxes owing by the County and/or the Authority to the Purchaser or
such Bondholder hereunder; provided, that the Purchaser or such Bondholder’s failure to send
such notice shall not relieve the County and/or the Authority, as applicable, of its obligation to
pay such amounts hereunder.
(b) The County and/or the Authority, as applicable, shall, to the fullest extent permitted
by law and subject to the provisions hereof, pay the Purchaser or such Bondholder for the full
amount of Indemnified Taxes and Other Taxes, as Additional Payments, including any
Indemnified Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section paid by the Purchaser or such Bondholder or any liability (including penalties, interest
and reasonable expenses) arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally asserted; provided, that the County
and/or the Authority, as applicable, shall not be obligated to pay the Purchaser or such
Bondholder for any penalties, interest or expenses relating to Indemnified Taxes or Other Taxes
arising from the Purchaser or such Bondholder’s gross negligence or willful misconduct. The
Purchaser or such Bondholder agrees to give notice to the County and the Authority of the
assertion of any claim against the Purchaser or such Bondholder relating to such Indemnified
Taxes or Other Taxes as promptly as is practicable after being notified of such assertion;
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provided, that the Purchaser or such Bondholder’s failure to notify the County and the Authority
promptly of such assertion shall not relieve the County and the Authority, as applicable, of its
obligation under this Section. Payments by the County or the Authority, as applicable, pursuant
to this Section shall be made within thirty (30) days from the date the Purchaser or such
Bondholder makes written demand therefor, which demand shall be accompanied by a certificate
describing in reasonable detail the basis thereof. The Purchaser or such Bondholder agrees to
repay to the County or the Authority, as applicable, any refund (including that portion of any
interest that was included as part of such refund) with respect to Indemnified Taxes or Other
Taxes paid by the County or the Authority pursuant to this Section received by the Purchaser or
such Bondholder for Indemnified Taxes or Other Taxes that were paid by the County or the
Authority pursuant to this Section and to contest, with the cooperation and at the expense of the
County of the Authority, any such Indemnified Taxes or Other Taxes which the Purchaser or
such Bondholder or the County or the Authority reasonably believes not to have been properly
assessed.
(c) Within thirty (30) days after the date of any payment of Indemnified Taxes by the
County or the Authority, as applicable, the County or the Authority, as applicable, shall furnish
to the Purchaser or such Bondholder, as applicable, the original or a certified copy of a receipt
evidencing payment thereof.
(d) Without prejudice to the survival of any other agreement of the County or the
Authority hereunder, the agreements and obligations of the County or the Authority, as
applicable, contained in this Section shall survive the termination of this Agreement and the
payment in full of the Bonds and the obligations of the County and the Authority thereunder and
hereunder for a period of three (3) years following termination of this Agreement.
Section 3.06. Obligations Absolute. The payment obligations of the County and/or the
Authority, as applicable, under this Agreement shall be unconditional and irrevocable and shall
be paid strictly in accordance with the terms of this Agreement under all circumstances.
Notwithstanding this Section, the Purchaser acknowledges the County and/or the
Authority, as applicable, may have the right to bring a cause of action with respect to certain
circumstances, such as any lack of validity or enforceability of this Agreement, the Bonds or any
other Related Documents. The County’s and the Authority’s payment obligations shall remain in
full force and effect pending the final disposition of any such action. All fees payable pursuant
to this Agreement shall be deemed to be fully earned when due and non-refundable when paid.
Notwithstanding anything to the contrary herein, nothing contained in this Section 3.06 shall
abrogate or otherwise affect the rights of the County pursuant to Section 3.06 of the Facilities
Lease.
Section 3.07. Breakage Fee. In addition to the redemption of the Bonds required under
Section 6.17(b) hereof, the Bonds may be prepaid pursuant to Section 4.01 and Section 4.02 of
the Trust Agreement in whole or in part at any time upon at least thirty (30) Business Days’ prior
written notice to the Purchaser specifying the amount of prepayment. In the event the County
pursuant to this Section redeems the Bonds in whole or in part, the County shall, at the time of
such prepayment, pay to the Purchaser as Additional Payments the interest accrued to the date of
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prepayment plus an additional fee or redemption premium equal to the “Breakage Fee” as
described in Exhibit B hereto (the “Breakage Fee”). Notwithstanding the foregoing, no
Breakage Fee shall apply in connection with an extraordinary redemption of the Bonds under
Section 4.01 of the Trust Agreement.
Section 3.08. Nature of Obligations. (a) Notwithstanding the foregoing or any other term
or payment obligation set forth herein, the obligations of the Authority under this Agreement are
a special obligation of the Authority payable solely from the Revenues and Additional Payments.
(b) Notwithstanding the foregoing or any other term or payment obligation set forth
herein, the County shall have no obligation to make Lease Payments in any Rental Payment
Period under the Facilities Lease in excess of the maximum annual fair market rental value of the
Facilities for such period. The County hereby represents and warrants that its obligations to
make Lease Payments and the obligations of the County under this Agreement are payable in
accordance with the provisions of the Facilities Lease as Lease Payments (subject to the
preceding sentence) and the amounts on deposit with the Trustee and held by the Trustee under
the Trust Agreement. The County further represents and warrants that the obligations of the
County under the Facilities Lease to make the Lease Payments are payable from the General
Fund of the County and any other legally available funds of the County.
ARTICLE IV
CONDITIONS PRECEDENT TO PURCHASE OF BONDS
Section 4.01. Documentary Requirements. The obligation of the Purchaser to purchase
the Bonds is subject to the conditions precedent that the Purchaser shall have received, on or
before the Effective Date, the items listed below in this Section, each dated and in form and
substance as is satisfactory to the Purchaser.
(a) The following County and Authority authorizing resolutions and financial
information:
(i) copies of the resolutions of the governing body of the County approving
the execution and delivery of the Related Documents to which the County is a party,
approving the form of the Related Documents to which it is not a party and the other
matters contemplated hereby, certified by a County Representative as being true and
complete and in full force and effect on the Effective Date;
(ii) copies of the resolutions of the governing body of the Authority approving
the execution and delivery of the Related Documents to which the Authority is a party,
approving the form of the Related Documents to which it is not a party and the other
matters contemplated hereby, certified by an Authority Representative as being true and
complete and in full force and effect on the Effective Date;
(iii) the audited annual financial statements of the County for the Fiscal Year
ended June 30, 2016; and
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(iv) a copy of the County’s Investment Policy in effect as of the Effective
Date.
(b) The following financing documents:
(i) an executed original or certified copy, as applicable, of each of the Related
Documents; and
(ii) a specimen copy of the Bond.
(c) The following opinions, dated the Effective Date and addressed to the Purchaser or
on which the Purchaser is otherwise expressly authorized to rely:
(i) from counsel to the County, opinions as to the due authorization,
execution and delivery of the Related Documents to which the County is a party, no
pending (with service of process of the County complete) litigation (to such counsel’s
knowledge) against and naming the County challenging any of the Related Documents or
the issuance of the Bonds, and such other customary matters as the Purchaser may
reasonably request;
(ii) from counsel to the Authority, opinions as to the due authorization,
execution and delivery of the Related Documents to which the Authority is a party, no
pending (with service of process of the Authorityy complete) litigation (to such counsel’s
knowledge) against and naming the Authority challenging any of the Related Documents
or the issuance of the Bonds and such other customary matters as the Purchaser may
reasonably request; and
(iii) from Bond Counsel, opinions to the effect that the Related Documents to
which the County and/or the Authority are a party constitute the valid and binding
obligations of the County and/or the Authority, as the case may be, and the interest on the
Bonds is excludable from gross income for federal income tax purposes and such other
customary matters as the Purchaser may reasonably request.
(d) The following documents and other information:
(i) a certificate dated the Effective Date and executed by a County
Representative certifying (A) that there has been no event or circumstance since June 30,
2016, that has had or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect, (B) that the representations and warranties
contained in Article V hereof and the other Related Documents are true and correct in all
material respects on the Effective Date and (C) no event has occurred and is continuing,
or would result from entry into this Agreement, which would constitute a Default or
Event of Default;
(ii) a certificate dated the Effective Date and executed by an Authority
Representative certifying (A) that there has been no event or circumstance since June 30,
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2016, that has had or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect, (B) that the representations and warranties
contained in Article V hereof and the other Related Documents are true and correct in all
material respects on the Effective Date and (C) no event has occurred and is continuing,
or would result from entry into this Agreement, which would constitute a Default or
Event of Default;
(iii) (x) a certificate dated the Effective Date and executed by a County
Representative certifying the names and signatures of the persons authorized to sign, on
behalf of the County, the Related Documents to which it is a party and the other
documents to be delivered by it hereunder or thereunder and (y) a certificate dated the
Effective Date and executed by an Authority Representative certifying the names and
signatures of the persons authorized to sign, on behalf of the Authority, the Related
Documents to which it is a party and the other documents to be delivered by it hereunder
or thereunder;
(iv) a certificate of the County that the fair rental value of the Facilities for
each Base Rental Period is at least equal to maximum Lease Payments to be made under
the Facilities Lease in any Rental Payment Period;
(v) true and correct copies of all Governmental Approvals, if any, necessary
for the County and the Authority to execute, deliver and perform the Related Documents
to which it is a party;
(vi) evidence of the County’s hazard and rental interruption insurance for the
Facilities and such other insurance in form and substance satisfactory to the Purchaser.
(vii) an ALTA extended coverage leasehold policy of title insurance (2006) (or
a commitment therefor), issued by the Title Company and in favor of the Trustee, in an
amount not less than the aggregate principal amount of the Bonds, subject only to such
exceptions as shall be acceptable to the Purchaser, with such endorsements and
affirmative coverages as may be reasonably required by the Purchaser, and otherwise in
form and substance satisfactory to the Purchaser and its counsel;
(viii) recent evidence that the unenhanced long-term debt rating assigned by
Moody’s and S&P to any Parity Debt is at least “Aa3” and “AA+,” respectively; and
(ix) evidence that a CUSIP number has been obtained and reserved from
Standard & Poor’s CUSIP Service for the Bond.
Section 4.02. Litigation. The Purchaser shall have received a written description of all
actions, suits or proceedings pending, with service of process on the County or the Authority
complete, against the County or the Authority in any court or before any arbitrator of any kind or
before or by any governmental or non-governmental body which could reasonably be expected
to result in a Material Adverse Effect, if any, and such information with respect thereto as the
Purchaser may reasonably request.
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Section 4.03. Other Matters. All other legal matters pertaining to the execution and
delivery of this Agreement and the Related Documents shall be satisfactory to the Purchaser and
its counsel, and the Purchaser shall have received such other statements, certificates, agreements,
documents and information with respect to the County, the Authority and the other parties to the
Related Documents and matters contemplated by this Agreement as the Purchaser may
reasonably request.
Section 4.04. Payment of Fees and Expenses. On or prior to the Effective Date,
the Purchaser shall have received reimbursement of the following fees and expenses of the
Purchaser:
(i) the reasonable fees and expenses of Chapman and Cutler LLP, as counsel to the
Purchaser; and
(ii) any fee payable to the California Debt and Investment Advisory Commission by
the Purchaser with respect to the Bonds.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations of the County. The County makes the following
representations and warranties to each Bondholder:
(a) Existence and Power. The County is a county organized and validly existing under
the Constitution and general laws of the State and has the power and authority to own its
properties and to carry on its businesses as now being conducted and as currently contemplated
to be conducted hereafter and is duly qualified to do business in each jurisdiction in which the
character of the properties owned or leased by it or in which the transactions of any material
portion of its business (as now conducted and as currently contemplated to be conducted) makes
such qualification necessary.
(b) Due Authorization. (i) The County has the corporate power, and has taken all
necessary corporate action to authorize the Related Documents to which it is a party, and to
execute, deliver and perform its obligations under this Agreement and each of the other Related
Documents to which it is a party in accordance with their respective terms. The County has
approved the form of the Related Documents to which it is not a party.
(ii) The County is duly authorized and licensed to own its Property and to operate its
business under the laws, rulings, regulations and ordinances of all Governmental Authorities
having the jurisdiction to license or regulate such Property or business activity and the
departments, agencies and political subdivisions thereof, and the County has obtained all
requisite approvals of all such governing bodies required to be obtained for such purposes. All
Governmental Approvals necessary for the County to enter into this Agreement and the other
Related Documents and to perform the transactions contemplated hereby and thereby and to
conduct its business activities and own its property have been obtained and remain in full force
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and effect and are subject to no further administrative or judicial review. No other Governmental
Approval or other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the County of this Agreement or the
due execution, delivery or performance by the County of the Related Documents.
(c) Valid and Binding Obligations. This Agreement has been duly executed and
delivered by one or more duly authorized officers of the County, and each of the Related
Documents to which the County is a party, when executed and delivered by the County will be, a
legal, valid and binding obligation of the County enforceable in accordance with its terms, except
as such enforceability may be limited by (a) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors’ rights generally, and (b) general
principles of equity (regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(d) Non-contravention; Compliance with Law. (i) The execution, delivery and
performance of this Agreement and each of the other Related Documents in accordance with
their respective terms do not and will not (A) contravene the County’s authorizing legislation,
(B) require any consent or approval of any creditor of the County, (C) violate any Laws
(including, without limitation, Regulations T, U or X of the FRB, or any successor regulations),
(D) conflict with, result in a breach of or constitute a default under any contract to which the
County is a party or by which it or any of its Property may be bound, including, without
limitation, the Facilities, or (E) result in or require the creation or imposition of any Lien upon or
with respect to any Property now owned or hereafter acquired by the County or any Affiliate
thereof, including, without limitation, the Facilities, except such Liens, if any, expressly created
by a Related Document.
(ii) The County is in compliance with all Laws, except for such noncompliance that,
singly or in the aggregate, has not caused or is not reasonably expected to cause a Material
Adverse Effect.
(e) Pending Litigation and Other Proceedings. There is no action, suit or proceeding
pending in any court, any other governmental authority with jurisdiction over the County or any
arbitration in which service of process has been completed against the County or, to the
knowledge of the County, any other action, suit or proceeding pending in which service of
process has been completed against the County in any court, any other governmental authority
with jurisdiction over the County or any arbitrator, in either case against the County or any of its
properties or revenues, or any of the Related Documents to which it is a party, which if
determined adversely to the County would materially and adversely affect the rights, security,
interests or remedies of the Purchaser hereunder or under any of the other Related Documents or
which is reasonably likely to result in a Material Adverse Effect, except any action, suit or
proceeding which has been brought prior to the Effective Date as to which the Purchaser has
received an opinion of counsel satisfactory to the Purchaser, in form and substance satisfactory
to the Purchaser and the Purchaser’s legal counsel, to the effect that such action, suit or
proceeding is without substantial merit.
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(f) Financial Statements. The audited financial statements of the County as at June 30,
2016, and the related consolidated statement of activities and changes in net assets and the
consolidated statement of cash flows for the Fiscal Year then ended, and accompanying notes
thereto, which financial statements, accompanied by the audit report of [____________],
nationally recognized independent public accountants, heretofore furnished to the Purchaser,
which are consistent, except to the extent stated therein, in all material respects with the audited
financial statements of the County for the Fiscal Year ended June 30, 2015, fairly present the
financial condition of the County in all material respects as of such dates and the results of its
operations for the periods then ended in conformity with GAAP. Since June 30, 2016, there has
been no material adverse change in the financial condition or operations of the County that could
reasonably be expected to result in a Material Adverse Effect.
(g) Employee Benefit Plan Compliance. Except as previously disclosed in writing to
the Purchaser, the County has no funding liability or obligation currently due and payable with
respect to any employee benefit plan which could reasonably be expected to result in a Material
Adverse Effect. The County and each employee benefit plan is in compliance in all material
respects with the terms of any such plan and applicable law related thereto. Neither the County
nor a member of the Controlled Group is subject to ERISA or maintains a Plan.
(h) No Defaults. No default by the County has occurred and is continuing in the
payment of the principal of or premium, if any, or interest on any Parity Debt. No bankruptcy,
insolvency or other similar proceedings pertaining to the County are pending or presently
contemplated. No Default or Event of Default has occurred and is continuing hereunder. No
“default” or “event of default” under, and as defined in, any of the other Related Documents
has occurred and is continuing. The County is not presently in default under any material
agreement to which it is a party which could reasonably be expected to have a Material Adverse
Effect. The County is not in violation of any material term of the authorizing legislation
applicable to the County or any material term of any bond indenture or agreement to which it is a
party or by which any of its Property is bound which could reasonably be expected to result in a
Material Adverse Effect.
(i) Insurance. The County currently maintains a system of self-insurance and extended
insurance coverage with insurance companies believed by the County to be capable of
performing their obligations under the respective insurance policies issued by such insurance
companies to the County (as determined in its reasonable discretion) and in full compliance with
the Facilities Lease and Section 6.04 hereof.
(j) Title to Assets and Facilities. The County has good and marketable title to its assets
except where the failure to have good and marketable title to any of its assets would not have a
Material Adverse Effect. The Facilities Lease is in full force and effect. The County, as lessee
under the Facilities Lease, has beneficial use and occupancy of each of the Facilities. The
Trustee has not granted to the County or the Authority any waiver, indulgence or postponement
of any of the County’s obligations under the Facilities Lease. There exists no event of default or
event, occurrence, condition or act that, with the giving of notice, the lapse of time or the
happening of any further event or condition, would become a default under the Facilities Lease.
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The County has a valid and enforceable fee simple interest in the Facilities, subject only to
Permitted Encumbrances.
(k) Incorporation by Reference. The representations and warranties of the County
contained in the other Related Documents to which the County is a party, together with the
related definitions of terms contained therein, are hereby incorporated by reference in this
Agreement as if each and every such representation and warranty and definition were set forth
herein in its entirety, and the representations and warranties made by the County in such Sections
are hereby made for the benefit of the Purchaser. No amendment to or waiver of such
representations and warranties or definitions made pursuant to the relevant Related Document or
incorporated by reference shall be effective to amend such representations and warranties and
definitions as incorporated by reference herein without the prior written consent of the Purchaser.
(l) Correct Information. All written information, reports and other papers and data
with respect to the County furnished by the County to the Purchaser were, at the time the same
were so furnished, correct in all material respects. Any financial, budget and other projections
furnished by the County to the Purchaser were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair and reasonable in light of conditions
existing at the time of delivery of such financial, budget or other projections, and represented,
and as of the date of this representation, represent (subject to the updating or supplementation of
any such financial, budget or other projections by any additional information provided to the
Purchaser in writing, the representations contained in this Agreement being limited to financial,
budget or other projections as so updated or supplemented), in the judgment of the County, a
reasonable, good faith estimate of the information purported to be set forth, it being understood
that uncertainty is inherent in any projections and that no assurance can be given that the results
set forth in the projections will actually be obtained. No fact is known to the County that
materially and adversely affects or in the future may (as far as it can reasonably foresee)
materially and adversely affect the security for any of the Bonds, or the ability of the County to
repay when due the Obligations, that has not been set forth in the financial statements and other
documents referred to in this Section 5.01(l) or in such information, reports, papers and data or
otherwise disclosed in writing to the Purchaser. The documents furnished and statements made
by the County in connection with the negotiation, preparation or execution of this Agreement
and the Related Documents did not, as of the date furnished or made, contain untrue statements
of material facts or, when taken as a whole, omit to state material facts necessary to make the
statements contained therein, in light of the circumstances under which they were made, not
misleading.
(m) Investment Company. The County is not an “investment company” or a company
“controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended.
(n) Margin Stock. The County is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no part of the proceeds from the issuance
of the Bonds will be used to purchase or carry any such Margin Stock or extend credit to others
for the purpose of purchasing or carrying any such Margin Stock.
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(o) Tax-Exempt Status. The County has not taken any action or omitted to take any
action, and has no actual knowledge of any action taken or omitted to be taken by any other
Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes or the exemption of interest on the
Bonds from State personal income taxes.
(p) Usury. The County is authorized to enter into this Agreement and the transactions
contemplated hereby by Section [____] of the California Government Code. In accordance with
Section [______] of the California Government Code, the obligations of the Authority under the
Related Documents and the Bonds and all other Obligations hereunder are not subject to any
limitation as to maximum interest-rate.
(q) Nature of Obligations. The Bonds and the other Obligations are payable from the
Lease Payments appropriated from the County’s general fund.
(r) Pending Legislation and Decisions. There is no amendment, or to the knowledge of
the County, proposed amendment to the Constitution of the State or any State law or any
administrative interpretation of the Constitution of the State or any State law, or any legislation
that has passed either house of the legislature of the State, or any judicial decision interpreting
any of the foregoing, the effect of which will materially and adversely affect the issuance of any
of the Bonds, the security for any of the Bonds or any Obligation, the creation, organization, or
existence of the County or the titles to office of any officers executing this Agreement or any
Related Documents to which the County is a party or the County’s ability to repay when due its
obligations under this Agreement, any of the Bonds or any other Obligation.
(s) Trustee. [Wells Fargo Bank, National Association] is the duly appointed and
acting Trustee for the Bonds.
(t) Environmental Matters. (i) The operations of the County are, to the County’s
knowledge after reasonable diligence with respect thereto, in material compliance with all of the
requirements of applicable federal, state and local environmental, health and safety statutes and
regulations and are not the subject of any governmental investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, where a failure to comply with any such requirement or the need for any
such remedial action could reasonably be expected to result in a Material Adverse Effect and (ii)
the operations of the County with respect to the Facilities are in material compliance with all of
the requirements of applicable federal, state and local environmental, health and safety statutes
and regulations and are not the subject of any governmental investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous waste or substance
into the environment, where a failure to comply with any such requirement or the need for any
such remedial action could reasonably be expected to result in a Material Adverse Effect and or a
material adverse effect on the annual fair market rental value of any of the Facilities.
(u) No Immunity. The County is not entitled to claim immunity on the grounds of
sovereignty or other similar grounds (including, without limitation, governmental immunity)
with respect to itself or its revenues (irrespective of their use or intended use) from (i) any action,
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suit or other proceeding arising under or relating to this Agreement or any other Related
Document, (ii) relief by way of injunction, order for specific performance or writ of mandamus
or for recovery of property or (iii) execution or enforcement of any judgment to which it or the
Revenues or Additional Payments might otherwise be made subject in any action, suit or
proceeding relating to this Agreement or any other Related Document, and no such immunity
(whether or not claimed) may be attributed to the County or the Revenues or Additional
Payments.
(v) No Public Vote or Referendum. To the knowledge of the County after reasonable
diligence with respect thereto, there is no public vote or referendum pending, proposed or
concluded, the results of which could reasonably be expected result in a Material Adverse Effect.
(w) Fees Are Additional Payments. Other than the principal and interest on the Bonds
which constitute Base Rental Payments under the Facilities Lease, the amounts payable by the
Authority to the Purchaser and the other Bondholders hereunder constitute Additional Payments
under Section 3.02 of the Facilities Lease that the County is obligated to pay to the Authority or
the Trustee for payment to the Purchaser or to the Purchaser directly.
(x) Fair Rental Value. The total Lease Payments for the Facilities for each Rental
Payment Period do not exceed the fair rental value of the Facilities for each such period. In
making such determination of fair rental value, consideration has been given to the uses and
purposes which may be served by each of the Facilities and the benefits therefrom which will
accrue to the County and the general public.
(y) Essentiality. The Facilities are essential assets of the County necessary to serve the
needs of the residents of the County. The County believes that at all times while any Lease
Payments or any obligation of the County under the Related Documents remains unpaid, each of
the Facilities will remain essential assets of the County.
(z) Anti-Terrorism Laws. (i) The County is not in violation of any Laws relating to
terrorism or money laundering (“Anti-Terrorism Laws”), including Executive Order No. 13224
on Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and the Patriot
Act;
(ii) The County is not any of the following:
(A) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(B) a Person controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(C) a Person with which the Purchaser is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;
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(D) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or
(E) a Person that is named as a “specially designated national and blocked
person” on the most current list published by the Office of Foreign Asset Control
(“OFAC”) or any list of Persons issued by OFAC pursuant to the Executive Order at its
official website or any replacement website or other replacement official publication of
such list;
(iii) The County does not (i) conduct any business or engage in making or receiving any
contribution of funds, goods or services to or for the benefit of any Person described in
subsection (b)(ii) above, (ii) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or (iii) engage in or
conspires to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
Section 5.02. Representations of the Authority. The Authority makes the following
representations and warranties to each Bondholder:
(a) Existence and Power. The Authority is a joint exercise of powers authority duly
organized and validly existing under the laws of the State pursuant to an agreement entitled
“Amended and Restated Joint Exercise of Powers Agreement,” dated June 16, 2015, by and
between the County and the Contra Costa County Flood Control and Water Preservation District,
and has the power and authority to own its properties and to carry on its businesses as now being
conducted and as currently contemplated to be conducted hereafter and is duly qualified to do
business in each jurisdiction in which the character of the properties owned or leased by it or in
which the transactions of any material portion of its business (as now conducted and as currently
contemplated to be conducted) makes such qualification necessary.
(b) Due Authorization. (i) The Authority has the corporate power, and has taken all
necessary corporate action to authorize the Related Documents to which it is a party, and to
execute, deliver and perform its obligations under this Agreement and each of the other Related
Documents to which it is a party in accordance with their respective terms. The Authority has
approved the form of the Related Documents to which it is not a party.
(ii) The Authority is duly authorized and licensed to own its Property and to operate its
business under the laws, rulings, regulations and ordinances of all Governmental Authorities
having the jurisdiction to license or regulate such Property or business activity and the
departments, agencies and political subdivisions thereof, and the Authority has obtained all
requisite approvals of all such governing bodies required to be obtained for such purposes. All
Governmental Approvals necessary for the Authority to enter into this Agreement and the other
Related Documents and to perform the transactions contemplated hereby and thereby and to
conduct its business activities and own its property have been obtained and remain in full force
and effect and are subject to no further administrative or judicial review. No other Governmental
Approval or other action by, and no notice to or filing with, any Governmental Authority is
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required for the due execution, delivery and performance by the Authority of this Agreement or
the due execution, delivery or performance by the Authority of the Related Documents.
(c) Valid and Binding Obligations. This Agreement has been duly executed and
delivered by one or more duly authorized officers of the Authority, and each of the Related
Documents to which the Authority is a party, when executed and delivered by the Authority will
be, a legal, valid and binding obligation of the Authority enforceable in accordance with its
terms, except as such enforceability may be limited by (a) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights
generally, and (b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(d) Non-contravention; Compliance with Law. (i) The execution, delivery and
performance of this Agreement and each of the other Related Documents in accordance with
their respective terms do not and will not (A) contravene the Authority’s authorizing legislation,
(B) require any consent or approval of any creditor of the Authority, (C) violate any Laws
(including, without limitation, Regulations T, U or X of the FRB, or any successor regulations),
(D) conflict with, result in a breach of or constitute a default under any contract to which the
Authority is a party or by which it or any of its Property may be bound, including, without
limitation, the Facilities, or (E) result in or require the creation or imposition of any Lien upon or
with respect to any Property now owned or hereafter acquired by the Authority or any Affiliate
thereof, including, without limitation, the Facilities, except such Liens, if any, expressly created
by a Related Document.
(ii) The Authority is in compliance with all Laws, except for such noncompliance that,
singly or in the aggregate, has not caused or is not reasonably expected to cause a Material
Adverse Effect.
(e) Pending Litigation and Other Proceedings. There is no action, suit or proceeding
pending in any court, any other governmental authority with jurisdiction over the Authority or
any arbitration in which service of process has been completed against the Authority or, to the
knowledge of the Authority, any other action, suit or proceeding pending in which service of
process has been completed against the Authority in any court, any other governmental authority
with jurisdiction over the Authority or any arbitrator, in either case against the Authority or any
of its properties or revenues, or any of the Related Documents to which it is a party, which if
determined adversely to the Authority would materially and adversely affect the rights, security,
interests or remedies of the Purchaser hereunder or under any of the other Related Documents or
which is reasonably likely to result in a Material Adverse Effect, except any action, suit or
proceeding which has been brought prior to the Effective Date as to which the Purchaser has
received an opinion of counsel satisfactory to the Purchaser, in form and substance satisfactory
to the Purchaser and the Purchaser’s legal counsel, to the effect that such action, suit or
proceeding is without substantial merit.
(f) Employee Benefit Plan Compliance. Except as previously disclosed in writing to
the Purchaser, the Authority has no funding liability or obligation currently due and payable with
respect to any employee benefit plan which could reasonably be expected to result in a Material
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Adverse Effect. The Authority and each employee benefit plan is in compliance in all material
respects with the terms of any such plan and applicable law related thereto. Neither the
Authority nor a member of the Controlled Group is subject to ERISA or maintains a Plan.
(g) No Defaults. No bankruptcy, insolvency or other similar proceedings pertaining to
the Authority are pending or presently contemplated. No Default or Event of Default has
occurred and is continuing hereunder. No “default” or “event of default” under, and as
defined in, any of the other Related Documents has occurred and is continuing. The Authority
is not presently in default under any material agreement to which it is a party which could
reasonably be expected to have a Material Adverse Effect. The Authority is not in violation of
any material term of the authorizing legislation applicable to the Authority or any material term
of any bond indenture or agreement to which it is a party or by which any of its Property is
bound which could reasonably be expected to result in a Material Adverse Effect.
(h) Title to Assets and Facilities. The Authority has good and marketable leasehold
title to the Facilities pursuant to the Site Lease free and clear of all encumbrances, security
interests, liens or other charges, except for Permitted Encumbrances. The Site Lease is in full
force and effect. The Authority, as lessee under the Site Lease, is in peaceable possession of the
Facilities. The Trust Agreement creates a valid first priority security interest in favor of the
Trustee in the Revenues and, as of the Effective Date, all necessary action on the part of the
Authority has been taken as required (other than delivery of possession or after acquired moneys,
securities and instruments to the Trustee) to pledge and grant a valid security interest in the
Revenues for the benefit of the Purchaser and the other Bondholders under the Trust Agreement
prior to any pledge, lien, assignment or security interest of any other creditors of the Authority.
The Base Rental Payments have been validly assigned by the Authority to the Trustee and no
further action or approval is necessary.
(i) Incorporation by Reference. The representations and warranties of the Authority
contained in the other Related Documents to which the Authority is a party, together with the
related definitions of terms contained therein, are hereby incorporated by reference in this
Agreement as if each and every such representation and warranty and definition were set forth
herein in its entirety, and the representations and warranties made by the Authority in such
Sections are hereby made for the benefit of the Purchaser. No amendment to or waiver of such
representations and warranties or definitions made pursuant to the relevant Related Document or
incorporated by reference shall be effective to amend such representations and warranties and
definitions as incorporated by reference herein without the prior written consent of the Purchaser.
(j) Correct Information. All written information, reports and other papers and data
with respect to the Authority furnished by the Authority to the Purchaser were, at the time the
same were so furnished, correct in all material respects. Any financial, budget and other
projections furnished by the Authority to the Purchaser were prepared in good faith on the basis
of the assumptions stated therein, which assumptions were fair and reasonable in light of
conditions existing at the time of delivery of such financial, budget or other projections, and
represented, and as of the date of this representation, represent (subject to the updating or
supplementation of any such financial, budget or other projections by any additional information
provided to the Purchaser in writing, the representations contained in this Agreement being
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limited to financial, budget or other projections as so updated or supplemented), in the judgment
of the Authority, a reasonable, good faith estimate of the information purported to be set forth, it
being understood that uncertainty is inherent in any projections and that no assurance can be
given that the results set forth in the projections will actually be obtained. No fact is known to
the Authority that materially and adversely affects or in the future may (as far as it can
reasonably foresee) materially and adversely affect the security for any of the Bonds, or the
ability of the Authority to repay when due the Obligations, that has not been set forth in the
financial statements and other documents referred to in this Section 5.02(j) or in such
information, reports, papers and data or otherwise disclosed in writing to the Purchaser. The
documents furnished and statements made by the Authority in connection with the negotiation,
preparation or execution of this Agreement and the Related Documents did not, as of the date
furnished or made, contain untrue statements of material facts or, when taken as a whole, omit to
state material facts necessary to make the statements contained therein, in light of the
circumstances under which they were made, not misleading.
(k) Investment Company. The Authority is not an “investment company” or a company
“controlled” by an “investment company,” as such terms are defined in the Investment Company
Act of 1940, as amended.
(l) Margin Stock. The Authority is not engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no part of the proceeds from the
issuance of the Bonds will be used to purchase or carry any such Margin Stock or extend credit
to others for the purpose of purchasing or carrying any such Margin Stock.
(m) Tax-Exempt Status. The Authority has not taken any action or omitted to take any
action, and has no actual knowledge of any action taken or omitted to be taken by any other
Person, which action, if taken or omitted, would adversely affect the exclusion of interest on the
Bonds from gross income for federal income tax purposes or the exemption of interest on the
Bonds from State personal income taxes.
(n) No Immunity. The Authority is not entitled to claim immunity on the grounds of
sovereignty or other similar grounds (including, without limitation, governmental immunity)
with respect to itself or its revenues (irrespective of their use or intended use) from (i) any action,
suit or other proceeding arising under or relating to this Agreement or any other Related
Document, (ii) relief by way of injunction, order for specific performance or writ of mandamus
or for recovery of property or (iii) execution or enforcement of any judgment to which it or the
Revenues or Additional Payments might otherwise be made subject in any action, suit or
proceeding relating to this Agreement or any other Related Document, and no such immunity
(whether or not claimed) may be attributed to the Authority or the Revenues or Additional
Payments.
(o) Usury. The Authority is authorized to enter into this Agreement and the
transactions contemplated hereby by Section [_____] of the California Government Code. In
accordance with Section [_____] of the California Government Code, the obligations of the
Authority under the Related Documents and the Bonds and all other Obligations hereunder are
not subject to any limitation as to maximum interest-rate.
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(p) Anti-Terrorism Laws. (i) The Authority is not in violation of any Anti-Terrorism
Laws, including the Executive Order and the Patriot Act;
(ii) The Authority is not any of the following:
(A) a Person that is listed in the annex to, or is otherwise subject to the
provisions of, the Executive Order;
(B) a Person controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(C) a Person with which the Purchaser is prohibited from dealing or otherwise
engaging in any transaction by any Anti-Terrorism Law;
(D) a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order; or
(E) a Person that is named as a “specially designated national and blocked
person” on the most current list published by OFAC or any list of Persons issued by
OFAC pursuant to the Executive Order at its official website or any replacement website
or other replacement official publication of such list;
(iii) The Authority does not (i) conduct any business or engage in making or receiving
any contribution of funds, goods or services to or for the benefit of any Person described in
subsection (b)(ii) above, (ii) deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or (iii) engage in or
conspires to engage in any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
ARTICLE VI
COVENANTS OF THE COUNTY AND THE AUTHORITY
The County and the Authority, as applicable, covenant and agree, until the full and final
payment and satisfaction of all of the Obligations, except in any instance in which the Purchaser
specially agrees in writing to any performance or noncompliance, that:
Section 6.01. Existence, Etc. The County shall maintain its existence pursuant to its
authorizing legislation and the laws of the State. The Authority shall maintain its existence
pursuant to its Joint Exercise of Powers Agreement (described in Section 5.02(a) hereof) and the
laws of the State.
Section 6.02. Maintenance of Properties. Each of the County and the Authority shall, in
all material respects, maintain, preserve and keep its Property, including, without limitation, the
Facilities, in good repair, working order and condition (ordinary wear and tear excepted), except
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to the extent that the failure to do so could reasonably be expected to result in a Material Adverse
Effect.
Section 6.03. Compliance with Laws; Taxes and Assessments. Each of the County and the
Authority shall comply with all Laws applicable to it and its Property, including, without
limitation, the Facilities, except where non-compliance could not reasonably be expected to
result in a Material Adverse Effect, such compliance to include, without limitation, paying all
taxes, assessments and governmental charges imposed upon it or its Property, including, without
limitation, the Facilities, before the same become delinquent, unless and to the extent that the
same are being contested in good faith and by appropriate proceedings and reserves are provided
therefor that in the opinion of the County or the Authority, as applicable, are adequate.
Section 6.04. Insurance. The County shall maintain a system of self-insurance and
extended insurance coverage with reputable insurance companies or associations believed by the
County at the time of purchase of such insurance to be financially sound and in such amounts
and covering such risks as are usually carried by organizations engaged in the same or similar
business and similarly situated, which insurance may provide for reasonable deductibles from
coverage. With respect to the Facilities:
(a) The County, at all times, shall insure each of the Facilities against such risks as are
customarily insured against with respect to similar facilities and against loss or damage from
such hazards, against loss of use of such Facilities, and risks to the person and property of others
as are usually insured or reserved against by those with rights and interests in projects similar to
such Facilities. The foregoing shall be satisfied if the County maintains the insurance described
in Sections 5.01 and 5.02 of the Facilities Lease.
(b) The County, at all times, shall maintain, or cause to be maintained, rental
interruption insurance in an amount not less than the aggregate Lease Payments for a period of
twenty-four (24) months, to insure against loss of rental income from any of the Facilities caused
by perils covered by the insurance required in Section 5.01 of the Facilities Lease. Such
insurance shall be in place as of the Effective Date and may be maintained as part of or in
conjunction with any other rental interruption insurance carried by the County. The rental
interruption insurance required by this Section shall not be maintained in the form of self-
insurance.
(c) The County shall maintain or cause to be maintained all other insurance as
required by Article V of the Facilities Lease on the Facilities.
Section 6.05. Reports. The County and the Authority, as applicable, shall furnish to the
Purchaser in form and detail satisfactory to the Purchaser:
(a) Annual Report. The County has entered into continuing disclosure
undertakings in connection with its publicly offered municipal securities pursuant to
which not later than March 31 (or the next succeeding Business Day if March 31 is not a
Business Day) of each year (each, a “Filing Date”) the County is obligated to file with
EMMA the annual audited financial statements of the County for the prior Fiscal Year
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together with the opinion of the County’s independent accountants (collectively, the
“Audited Financial Statements”) which shall be available for review by the Purchaser,
provided that if the County ceases to file its Audited Financial Statement with EMMA or
such Audited Financial Statements are not otherwise available for review by the
Purchaser, the County shall provide such Audited Financial Statements to the County on
or prior to each Filing Date. The County shall provide to the Purchaser not later than
each Filing Date, commencing March 31, 2018, a Compliance Certificate signed by the
County Representative stating that no Default or Event of Default or Default has
occurred, or if such Default or Event of Default or Default has occurred, specifying the
nature of such Default or Event of Default, the period of its existence, the nature and
status thereof and any remedial steps taken or proposed to correct such Default or Event
of Default.
(b) Budget. As soon as available, and in any event within thirty (30) days
following the approval or adoption thereof, the operating budget of the County.
(c) Trustee Notices. As soon as available all notices, certificates, instruments,
letters and written commitments in connection with the Bonds provided to the Trustee
other than those notices, certificates, instruments, letters and written commitments that
relate solely to the routine issuance and payment of the Bonds.
(d) Notices of Resignation of the Trustee. As promptly as practicable, written
notice to the Purchaser of any resignation of the Trustee immediately upon receiving
notice of the same.
(e) Offering Memorandum and Material Event Notices. (A) Within ten (10)
days after the issuance of any securities by or on behalf of the County with respect to
which a final official statement or other offering or disclosure document has been
prepared by or on behalf of the County (1) a copy of such official statement or offering
circular or (2) notice that such information has been filed with EMMA and is publicly
available; and (B) during any period of time the County or the Authority is subject to
continuing disclosure requirements under Rule 15c2-12 promulgated pursuant to the
Securities Exchange Act of 1934, as amended (17 C.F.R. Sec. 240-15c2-12), or any
successor or similar legal requirement, immediately following any dissemination,
distribution or provision thereof to any Person, (1) a copy of any reportable event notice
(as described in b(5)(i)(C) of Rule 15c2-12) disseminated, distributed or provided in
satisfaction of or as may be required pursuant to such requirements or (2) notice that such
event notice has been filed with EMMA and is publicly available.
(f) Notice of Default or Event of Default. (i) Promptly upon obtaining
knowledge of any Default or Event of Default, or notice thereof, and in any event within
five (5) days thereafter, a certificate signed by a County Representative specifying in
reasonable detail the nature and period of existence thereof and what action the County
has taken or proposes to take with respect thereto; (ii) promptly following a written
request of the Purchaser, a certificate of a County Representative as to the existence or
absence, as the case may be, of a Default or an Event of Default under this Agreement;
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and (iii) promptly upon obtaining knowledge of any “default” or “event of default” as
defined under any Bank Agreement, notice specifying in reasonable detail the nature and
period of existence thereof and what action the County has taken or proposes to take with
respect thereto.
(g) Litigation. As promptly as practicable, written notice to the Purchaser of
all actions, suits or proceedings pending or threatened against the County or the Authority
in court or before any arbitrator of any kind or before any governmental authority which
could reasonably be expected to result in a Material Adverse Effect.
(h) Other Information. Such other information regarding the business affairs,
financial condition and/or operations of the County and the Authority and the Facilities as
the Purchaser may from time to time reasonably request.
Section 6.06. Maintenance of Books and Records. The County and the Authority will
keep proper books of record and account with respect to the County, the Authority and the
Facilities in which full, true and correct entries in accordance with GAAP. All financial data
required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP
applied on a consistent basis, as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements, except as otherwise specifically prescribed herein.
Except as provided in the immediately preceding sentence, in preparing any financial data or
statements contemplated or referred to in this Agreement, the County and the Authority shall not
vary or modify the accounting methods or principles from the accounting standards employed in
the preparation of its audited financial statements described in Section 5.06 hereof.
Section 6.07. Access to Books and Records. To the extent permitted by law, the County
and the Authority will permit any Person designated by the Purchaser (at the expense of the
Purchaser, unless and until a Default or Event of Default has occurred, at which time such
expenses shall be borne by the County or the Authority, as applicable) to visit any of the offices
of the County or the Authority, to examine the books and financial records (except books and
financial records the examination of which by the Purchaser is prohibited by law or by attorney
or client privilege) or the County or the Authority, as applicable, including minutes of meetings
of any relevant governmental committees or agencies, and make copies thereof or extracts
therefrom, and to discuss the affairs, finances and accounts of the County or the Authority, as
applicable, with their principal officials, all at such reasonable times and as often as the
Purchaser may reasonably request.
Section 6.08. Compliance With Documents. Each of the County and the Authority agrees
that it will perform and comply with each and every covenant and agreement required to be
performed or observed by it in the Trust Agreement and each of the other Related Documents to
which it is a party, which provisions, as well as related defined terms contained therein, are
hereby incorporated by reference herein with the same effect as if each and every such provision
were set forth herein in its entirety all of which shall be deemed to be made for the benefit of the
Purchaser and shall be enforceable against the County or the Authority, as applicable. To the
extent that any such incorporated provision permits the County or the Authority or any other
party to waive compliance with such provision or requires that a document, opinion or other
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instrument or any event or condition be acceptable or satisfactory to the County or the Authority
or any other party, for purposes of this Agreement, such provision shall be complied with unless
it is specifically waived by the Purchaser in writing and such document, opinion or other
instrument and such event or condition shall be acceptable or satisfactory only if it is acceptable
or satisfactory to the Purchaser which shall only be evidenced by the written approval by the
Purchaser of the same. Except as permitted by Section 6.15 hereof, no termination or
amendment to such covenants and agreements or defined terms or release of the County or the
Authority with respect thereto made pursuant to the Trust Agreement or any of the other Related
Documents to which the County or the Authority is a party, shall be effective to terminate or
amend such covenants and agreements and defined terms or release the County or the Authority
with respect thereto in each case as incorporated by reference herein without the prior written
consent of the Purchaser. Notwithstanding any termination or expiration of the Trust Agreement
or any such other Related Document to which the County or the Authority is a party, the County
and the Authority shall continue to observe the covenants therein contained for the benefit of the
Purchaser until the termination of this Agreement and the payment in full of the Bonds and all
other Obligations. All such incorporated covenants shall be in addition to the express covenants
contained herein and shall not be limited by the express covenants contained herein nor shall
such incorporated covenants be a limitation on the express covenants contained herein.
Section 6.09. Reserved.
Section 6.10. Further Assurances. From time to time hereafter, the County and the
Authority will execute and deliver such additional instruments, certificates or documents, and
will take all such actions as the Purchaser may reasonably request for the purposes of
implementing or effectuating the provisions of the Related Documents to which the County or
the Authority is a party or for the purpose of more fully perfecting or renewing the rights of the
Purchaser with respect to the rights, properties or assets subject to such documents (or with
respect to any additions thereto or replacements or proceeds thereof or with respect to any other
property or assets hereafter acquired by the County or the Authority which may be deemed to be
a part thereof). Upon the exercise by the Purchaser of any power, right, privilege or remedy
pursuant to the Related Documents to which the County or the Authority is a party which
requires any consent, approval, registration, qualification or authorization of any governmental
authority or instrumentality, the County and the Authority will, to the fullest extent permitted by
law, execute and deliver all necessary applications, certifications, instruments and other
documents and papers that the Purchaser may be required to obtain for such governmental
consent, approval, registration, qualification or authorization. At any time, and from time to
time, upon request by the Purchaser, the County and the Authority will, at the County’s expense,
correct any defect, error or omission which may be discovered in the form or content of any of
the Related Documents to which the County or the Authority is a party or protect the Purchaser’s
interests, security, rights and remedies with respect to the Revenues and Additional Payments or
its security under the Trust Agreement or hereunder. At all times, the County and the Authority
will defend, preserve and protect the pledge of certain funds pursuant to the Trust Agreement and
all the rights of the Purchaser hereunder and under the Trust Agreement against all claims and
demands of all Persons whosoever.
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Section 6.11. No Impairment. Neither the County nor the Authority will take any action,
or cause the Trustee to take any action, under the Trust Agreement or any other Related
Document which would materially and adversely affect the rights, interests, remedies or security
of the Purchaser under this Agreement or any other Related Document or which could
reasonably be expected to result in a Material Adverse Effect.
Section 6.12. Application of Bond Proceeds. Neither the County nor the Authority will
take or omit to take any action, which action or omission will in any way result in the proceeds
from the issuance of the Bonds being applied in a manner other than as provided in the Trust
Agreement.
Section 6.13. Trustee. Neither the County nor the Authority will, without the prior
written consent of the Purchaser (which consent shall not be unreasonably withheld) remove, or
seek to remove, the Trustee. The County and the Authority shall at all times maintain a Trustee
pursuant to the terms of the Trust Agreement that is acceptable to the Purchaser.
Section 6.14. Limitation on Voluntary Liens. Neither the Authority nor the County shall
create a pledge, lien or charge on any part of the Facilities provided by the Trust Agreement
other than the lien in favor of holders of the Bonds. The County and the Authority covenant (i)
to keep the Facilities and all parts thereof free from Liens other than Permitted Encumbrances;
and (ii) promptly, upon request of the Purchaser, to take such action from time to time as may be
reasonably necessary or proper to remedy or cure any cloud upon or defect in the title to the
Facilities or any part thereof, whether now existing or hereafter developing, to prosecute all
actions, suits, or other proceedings as may be reasonably appropriate for such purpose.
Section 6.15. Related Documents. Neither the County nor the Authority will amend or
modify, or permit to be amended or modified in any manner whatsoever any Related Document
in a manner which would materially and adversely affect the County’s or the Authority’s ability
to repay Debt or which materially and adversely affects the security for the Bonds or the other
Obligations or the County’s or the Authority’s ability to repay when due the Bonds or the other
Obligations or the interests, security, rights or remedies of the Purchaser without the prior written
consent of the Purchaser.
Section 6.16. Lease Payments. The County and the Authority will not issue or authorize
the issuance of any obligation payable from the Lease Payments due under the Facilities Lease
other than the Bonds.
Section 6.17. Redemptions. (a) The County shall provide thirty (30) days written notice
to the Purchaser prior to the date of any proposed optional redemption or purchase in lieu of
redemption of Bonds pursuant to the Trust Agreement.
(b) The County shall cause the Bonds to be redeemed pursuant to Section 2.02(a) of the
Trust Agreement in the principal amounts and by the dates specified in Schedule 6.17(b) hereto.
Section 6.18. Disclosure to Participants, Purchaser Transferees and Non-Purchaser
Transferees. The County and the Authority shall permit the Purchaser to disclose the financial
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information received by it pursuant to this Agreement to each participant, Purchaser Transferee
and Non-Purchaser Transferee pursuant to Section 9.13 of this Agreement, subject to
confidentiality restrictions and use restrictions customary for financial institutions.
Section 6.19. Other Agreements. In the event that the County and/or the Authority has or
shall, directly or indirectly, enter into or otherwise consent to any Bank Agreement, which such
Bank Agreement (or amendment thereto) provides the Person party thereto with different or
more restrictive covenants, additional or different events of default and/or greater rights and
remedies (excluding such greater rights or remedies that by their nature are inapplicable to
continuing covenant agreements or similar facilities entered into in connection with direct
purchase transactions) than are provided to the Purchaser in this Agreement (all such different or
more restrictive covenants, additional and different events of default and/or greater rights or
remedies are referred to herein as “Additional Rights”), then, upon the occurrence of an event of
default or an event or condition that with the giving of notice or lapse of time or both would
become an event of default or if the County and/or the Authority shall engage in any discussions
with a creditor under a Bank Agreement in anticipation of such event of default or event or
condition occurring (each such event referred to herein as a “Potential Default/Event of
Default”) caused by such Additional Rights, such Additional Rights shall automatically be
deemed to be incorporated into this Agreement and the Purchaser shall have the benefits of such
Additional Rights so long as such Additional Rights remain in effect; provided, however, that
such Additional Rights shall automatically be deemed to be incorporated into this Agreement
and the Bank shall have the benefits of such Additional Rights only from and after the
occurrence of any such Potential Default/Event of Default under the related Bank Agreement
caused by the Additional Rights or a failure by the County and/or the Authority to comply with
such Additional Rights. The County and/or the Authority, as applicable, shall promptly, upon
the occurrence of Potential Default/Event of Default under the related Bank Agreement caused
by such Additional Rights or a failure by the County and/or the Authority to comply with such
Additional Rights, give notice thereof to the Purchaser, and enter into an amendment to this
Agreement to include such Additional Rights, provided that the Purchaser shall maintain the
benefit of such Additional Rights regardless of whether this Agreement is amended only so long
as such Additional Rights remain in effect.
Section 6.20. Immunity from Jurisdiction. To the fullest extent permitted by applicable
law, with respect to its obligations arising under this Agreement or any other Related Document,
each of the County and the Authority irrevocably agrees that it will not assert or claim any
immunity on the grounds of sovereignty or other similar grounds (including, without limitation,
governmental immunity) from (i) any action, suit or other proceeding arising under or relating to
this Agreement or any other Related Document, (ii) relief by way of injunction, order for specific
performance or writ of mandamus or (iii) execution or enforcement of any judgment to which it
or its revenues might otherwise be entitled in any such action, suit or other proceeding, and each
of the County and the Authority hereby irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and the Revenues and Additional Payments (irrespective of
their use or intended use), all such immunity.
Section 6.21. Swap Contracts. Without the prior written consent of the Purchaser, neither
the County nor the Authority will enter into any Swap Contract relating to Debt (i) wherein any
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termination payments thereunder are senior in priority of payment to the payment of the Bonds
or the other Obligations or (ii) which requires the County or the Authority, as applicable, to post
cash collateral to secure its obligations thereunder.
Section 6.22. Budget and Appropriation. To the fullest extent permitted and/or required
by State law, the County shall cause the appropriate County official(s) to take any and all
ministerial actions that may be necessary to facilitate the payment of the principal of and interest
on the Bonds and the payment of all other Obligations. Subject to the Facilities Lease, the
County agrees to include all Lease Payments due under the Facilities Lease in each Fiscal Year
in its annual budget and to make the necessary annual appropriations for all such Lease
Payments, including, without limitation, upon acceleration of the Obligations pursuant to Section
7.02 hereof. The covenants on the part of the County herein contained and in the Facilities Lease
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 performance of the official duty of such officials to enable the County to
carry out and perform such covenants and agreements.
Section 6.23. Use of Purchaser’s Name. (a) Except as may be required by Law
(including, but limited to, federal and state securities Laws), the neither the County nor the
Authority shall use any financial information of the Purchaser’s or the Purchaser’s long or short-
term debt ratings in any published materials without the prior written consent of the Purchaser
(which consent shall not be unreasonably withheld).
(b) The County and the Authority agree that they shall not post any of the Related
Documents or any amendment hereto or thereto on EMMA or any other website until the
Purchaser or its counsel has provided redacted versions thereof or such amendment, as
applicable, to the County and the Authority for posting thereon.
Section 6.24. Maintenance of Tax-Exempt Status of Bonds. Neither the County nor the
Authority shall take any action or omit to take any action which, if taken or omitted, could result
in a Determination of Taxability.
Section 6.25. ERISA. The County and the Authority shall not be, and shall not permit a
member of the Controlled Group to be, subject to ERISA and shall not maintain, nor permit a
member of the Controlled Group to maintain, a Plan. The County and the Authority and each
employee benefit plan shall remain in compliance in all material respects with the terms of any
such plan and applicable law related thereto, except to the extent that a failure to do so could
reasonably be expected to result in a Material Adverse Effect.
Section 6.26. Investment Policy. All investments of the County have been and will be
made in accordance with the terms of the Investment Policy.
Section 6.27. Environmental Laws. The County and the Authority shall (x) comply with
all applicable Environmental Laws and cure any defect thereto (or cause other Persons to effect
any such cure) to the extent necessary to bring any of the Facilities back into compliance with
Environmental Laws and to comply with any cleanup orders issued by a Governmental Authority
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having jurisdiction thereover and (y) take all reasonable action to prevent any material adverse
effect on or reduction of the fair market rental value of any of the Facilities or any other Material
Adverse Effect to occur as a result of the Authority’s or the County’s operation of any of the
Facilities. The County and the Authority shall at all times use commercially reasonable efforts to
render or maintain each of the Facilities safe and fit for their respective intended uses. The
County and the Authority shall also immediately notify the Purchaser of any actual or alleged
material failure to so comply with or perform, or any material breach, violation or default under
any Environmental Law with respect to any of the Facilities.
Section 6.28. Federal Reserve Board Regulations. The County shall not use any portion
of the proceeds of the Purchase Price of the Bonds for the purpose of carrying or purchasing any
Margin Stock and shall not incur any Debt which is to be reduced, retired or purchased by the
County out of such proceeds.
Section 6.29. Underlying Rating. The County shall at all times maintain a rating on its
long-term unenhanced Parity Debt from at least two Rating Agencies. The County covenants
and agrees that it shall not at any time withdraw any long-term unenhanced rating on its Parity
Debt from any of Fitch, Moody’s or S&P if the effect of such withdrawal would be to cure a
Default or an Event of Default under this Agreement.
Section 6.30. Repayment of Purchaser and other Bondholders. (a) If at any time any
amount is owing on the Bonds or any other amount is owing to the Purchaser and the other
Bondholders hereunder, and the County and the Authority are unable, or reasonably foresee that
they will be unable, to increase Lease Payments in an amount sufficient to pay the Purchaser, the
staff of the County and the Authority shall use their respective best efforts to either: (i) provide
for the substitution of new real property for one or more of the Facilities, such new real property
to have a fair rental value sufficient to support Lease Payments sufficient to pay the amounts
owing on the Bonds and all other Obligations owing to the Purchaser and the other Bondholders
hereunder, (ii) support the issuance of bonds or other certificates of participation sufficient in
value to pay the debt service on the Bonds and pay all other Obligations owing to the Purchaser
and the other Bondholders hereunder or (iii) request an appropriation, from the County’s General
Fund of legally available funds in an amount sufficient to pay all debt service on the Bonds and
to pay all other Obligations owing to the Purchaser and the other Bondholders hereunder.
(b) Upon receipt of notice from the Purchaser of the acceleration of the
Obligations pursuant to Section 7.02 hereof, the Authority shall increase the Lease Payments
under the Facilities Lease in each Rental Payment Period to the Maximum Annual Rent.
(c) The County and the Authority agree to extend the term of the Site Lease
and/or the Facilities Lease in accordance with Section 2 thereof and Section 2.02 thereof,
respectively, if on the stated expiration thereof, any amounts remain owing on the Bonds or
hereunder.
Section 6.31. Disaster Relief. If any of the Facilities are damaged by an earthquake, or
other disaster or emergency is declared by a local government, the Governor of the State of
California, or the President of the United States, the Office of Emergency Services, the Federal
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Emergency Management Agency, or other similar agency, the County and/or the Authority, as
applicable, shall apply for federal, state and local disaster relief funds in the maximum amount
permitted under federal, state and local law, respectively, and apply all such designated funds
received as required under the Facilities Lease.
Section 6.32. Voluntary Rent Abatement. Except as permitted by State law and the terms
of the Facilities Lease, the County shall not seek or assert a claim for abatement of rental
payments under the Facilities Lease.
Section 6.33. Operation and Maintenance of the Facilities. To the extent funds are
legally available, the County shall maintain and preserve each of the Facilities and all buildings,
facilities and equipment constituting any part of the Facilities with respect to facilities of like
size and character. The County shall not abandon or vacate any of the Facilities, except as
permitted by the Facilities Lease. The County shall from time to time make all necessary and
proper repairs, renewals and replacements to each of the Facilities, consistent with the protection
of the Purchaser. If any event shall occur such that abatement is authorized under the Facilities
Lease, the [Executive Director] of the Authority and the [_______] of the County shall use their
best efforts to bring forward at the earliest possible date a plan to mitigate any such abatement
for consideration of the Authority Board and the County Council, respectively.
Section 6.34. Compliance with Laws; Taxes and Assessments. The County and the
Authority will not violate any laws, rules, regulations or governmental orders to which it is
subject, which violation involves a reasonable likelihood of materially and adversely affecting its
financial condition, business or results of operations.
Section 6.35. Fair Rental Value. In the event that fair rental value of the Facilities is not
sufficient to make the Lease Payments and/or Additional Payments required pursuant to this
Agreement and the Trust Agreement, such unpaid Lease Payments and/or Additional Payments
shall be deferred until such time as the fair rental value of the Facilities will support payment of
such unpaid Lease Payments and/or Additional Payments.
Section 6.36. Substitution or Removal of Property; Sale and Transfers. (a) The County
and the Authority will not substitute or remove (other than pursuant to Section 2.02 or Section
2.03 of the Facilities Lease) or cause the substitution or removal (other than pursuant to Section
2.02 or Section 2.03 of the Facilities Lease) of any portion of the Facilities subject to the
leasehold under the Facilities Lease without the prior written consent of the Purchaser (such
consent to not be unreasonably withheld or delayed), and otherwise satisfying the conditions
precedent to such substitution or removal set forth in Section 2.02 or Section 2.03 of the
Facilities Lease, as applicable.
(b) The County and the Authority will not transfer, sell, lease, convey or otherwise
dispose of, any interest in the Facilities, except for those permitted by the terms of the Related
Documents.
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ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. The occurrence of any of the following events (whatever
the reason for such event and whether voluntary, involuntary, or effected by operation of Law)
shall be an “Event of Default” hereunder, unless waived in writing by Purchaser:
(a) the Authority shall fail to pay the principal of or interest on any Bond
when due;
(b) the County or the Authority shall fail to pay any Obligation (other than the
Authority’s obligation to pay the principal of or interest on the Bonds) and such failure
shall continue for three (3) Business Days;
(c) any representation or warranty made by or on behalf of the County or the
Authority in this Agreement or in any other Related Document or in any certificate or
statement delivered hereunder or thereunder shall be incorrect or untrue in any material
respect when made or deemed to have been made or delivered;
(d) the County or the Authority, as applicable, shall default in the due
performance or observance of any of the covenants set forth in Section 6.01, 6.11, 6.15,
6.16, 6.20, 6.21, 6.22, 6.28, 6.29, 6.32 or 6.36 hereof;
(e) the County or the Authority, as applicable, shall default in the due
performance or observance of any other term, covenant or agreement contained in this
Agreement or any other Related Document and such default shall remain unremedied for
a period of thirty (30) days after the earlier to occur of the date on which (i) the County or
the Authority has actual knowledge of such default or (ii) the Purchaser provides notice
to the County or the Authority of such default; provided, however, that if such default can
be cured by the County or the Authority within a reasonable time period and so long as
the County or the Authority is proceeding diligently within such thirty (30) days to
remedy such default, such curative period shall be extended up to an an additional thirty
(30) days so as to permit such default to be cured;
(f) the County or the Authority shall (i) have entered involuntarily against it
an order for relief under the United States Bankruptcy Code, as amended, (ii) become
insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its
debts generally as they become due, (iii) make an assignment for the benefit of creditors,
(iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part of its
Property, (v) institute any proceeding seeking to have entered against it an order for relief
under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of
assets, adjustment or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors or fail to file an answer or other pleading
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denying the material allegations of any such proceeding filed against it, (vi) take any
corporate action in furtherance of any matter described in parts (i) through (v) above, or
(vii) fail to contest in good faith any appointment or proceeding described in
Section 7.01(g) of this Agreement;
(g) a custodian, receiver, trustee, examiner, liquidator or similar official shall
be appointed for the County or the Authority or any substantial part of its Property, or a
proceeding described in Section 7.01(f)(v) shall be instituted against the County or the
Authority and such proceeding continues undischarged or any such proceeding continues
undismissed or unstayed for a period of thirty (30) or more days;
(h) a debt moratorium, debt restructuring, debt adjustment or comparable
restriction is imposed on the repayment when due and payable of the principal of or
interest on any Debt of the County or the Authority by the County or the Authority or any
Governmental Authority with appropriate jurisdiction;
(i) (i) any provision of this Agreement or any Related Document related to
(A) payment of principal of or interest on the Bonds or (B) the validity or enforceability
of the pledge of the Revenues or any other pledge or security interest created by the Trust
Agreement shall at any time for any reason cease to be valid and binding on the County
or the Authority as a result of any legislative or administrative action by a Governmental
Authority with competent jurisdiction, or shall be declared, in a final non-appealable
judgment by any court of competent jurisdiction, to be null and void, invalid or
unenforceable;
(ii) the validity or enforceability of any material provision of this Agreement
or any Related Document related to (A) payment of principal of or interest on the Bonds
or any Parity Debt, or (B) the validity or enforceability of the pledge of the Revenues or
any other pledge or security interest created by the Trust Agreement shall be publicly
contested by the [identify appropriate County officials] of the County or the [identify
appropriate Authority officials] of the Authority; or
(iii) any other material provision of this Agreement or any other Related
Document, other than a provision described in clause (i) above, shall at any time for any
reason cease to be valid and binding on the County or the Authority as a result of any
legislative or administrative action by a Governmental Authority with competent
jurisdiction or shall be declared in a final non-appealable judgment by any court with
competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or
enforceability thereof shall be publicly contested by the County or the Authority;
(j) dissolution or termination of the existence of the County or the Authority;
(k) the County or the Authority, as applicable, shall (i) default on the payment
of the principal of or interest on any Cross-Default Parity Debt beyond the period of
grace, if any, provided in the instrument or agreement under which such Cross-Default
Parity Debt was created or incurred; or (ii) default in the observance or performance of
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any agreement or condition relating to any Cross-Default Parity Debt or contained in any
instrument or agreement evidencing, securing or relating thereto beyond the period of
grace, if any, provided in the instrument or agreement under which such Cross-Default
Parity Debt was created or incurred, provided that the County or the Authority shall have
actual knowledge of such default, the effect of which default is to cause or permit to
cause (determined without regard to whether any notice is required) any such Cross-
Default Parity Debt to become immediately due and payable in full as the result of the
acceleration, mandatory redemption or mandatory tender of such Cross-Default Parity
Debt;
(l) the County or the Authority, as applicable, shall (i) default on the payment
of the principal of or interest on any Parity Debt (excluding any Cross-Default Parity
Debt) issued in an original principal amount of $25,000,000 or more beyond the period of
grace, if any, provided in the instrument or agreement under which such Parity Debt was
created or incurred; or (ii) default in the observance or performance of any agreement or
condition relating to any Parity Debt (excluding any Cross-Default Parity Debt) issued in
an original principal amount of $25,000,000 or more or contained in any instrument or
agreement evidencing, securing or relating thereto beyond the period of grace, if any,
provided in the instrument or agreement under which such Parity Debt was created or
incurred, provided that the County or the Authority shall have actual knowledge of such
default, the effect of which default is to cause or permit to cause (determined without
regard to whether any notice is required) any such Parity Debt to become immediately
due and payable in full as the result of the acceleration, mandatory redemption or
mandatory tender of such Parity Debt;
(m) any final, unappealable judgment or judgments, writ or writs or warrant or
warrants of attachment, or any similar process or processes, which are not covered in full
by insurance, with written acknowledgement of such coverage having been provided by
the provider of such insurance coverage to the Purchaser, in an aggregate amount not less
than $25,000,000 shall be entered or filed against the County or the Authority or against
any of their Property and remain unpaid pursuant to the terms of the applicable judgment,
unvacated, unbonded or unstayed for a period of ninety (90) days;
(n) any “event of default” under any Related Document (as defined
respectively therein) shall have occurred; or
(o) any of Fitch, Moody’s or S&P shall have downgraded its rating of any
long-term unenhanced Parity Debt to below “BBB+” (or its equivalent), “Baa1” (or its
equivalent), or “BBB+” (or its equivalent) respectively, or suspended or withdrawn its
rating of the same.
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Section 7.02. Consequences of an Event of Default. If an Event of Default specified in
Section 7.01 hereof shall occur and be continuing, the Purchaser may take one or more of the
following actions at any time and from time to time (regardless of whether the actions are taken
at the same or different times):
(a) by written notice to the Trustee, the County and the Authority, declare the
outstanding amount of the Obligations under this Agreement (including, without
limitation, the Bonds but solely in accordance with Section 7.02(b) hereof) to be
immediately due and payable without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived, and an action therefor shall
immediately accrue;
(b) deliver a written notice to the Trustee, the County and the Authority that
an Event of Default has occurred and is continuing and direct the Trustee, the County and
the Authority, as applicable, to cause an acceleration of the Bonds or take such other
remedial action as is provided for in the Trust Agreement); provided, however, that from
and after the occurrence of an Event of Default, the outstanding Bonds shall be paid or
caused to be paid by the Authority in each year in an amount equal to the Maximum
Annual Rent for the related Rental Payment Period less any other amounts paid
hereunder or under the Trust Agreement in accordance with the terms hereof and thereof;
provided further, however, that payments of Base Rental under the Facilities Lease shall
not be accelerated;
(c) either personally or by attorney or agent without bringing any action or
proceeding, or by a receiver to be appointed by a court in any appropriate action or
proceeding, take whatever action at law or in equity may appear necessary or desirable to
collect the amounts due and payable under the Related Documents or to enforce
performance or observance of any obligation, agreement or covenant of the County
and/or the Authority under the Related Documents, whether for specific performance of
any agreement or covenant of the County or in aid of the execution of any power granted
to the Purchaser in the Related Documents;
(d) cure any Default, Event of Default or event of nonperformance hereunder
or under any Related Document; provided, however, that the Purchaser shall have no
obligation to effect such a cure; and
(e) exercise, or cause to be exercised, any and all remedies as it may have
under the Related Documents (other than as provided for in Section 7.02(b) hereof) and
as otherwise available at law and at equity;
provided, however, that notwithstanding any acceleration of the Bonds, the Purchaser, the
Authority and the County acknowledge that Lease Payments may not be accelerated under the
Facilties Lease.
Section 7.03. Remedies Cumulative; Solely for the Benefit of Purchaser. To the extent
permitted by, and subject to the mandatory requirements of, applicable Law, each and every
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right, power and remedy herein specifically given to the Purchaser in the Related Documents
shall be cumulative, concurrent and nonexclusive and shall be in addition to every other right,
power and remedy herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy (whether specifically herein given or
otherwise existing) may be exercised from time to time and as often and in such order as may be
deemed expedient by the Purchaser, and the exercise or the beginning of the exercise of any
power or remedy shall not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy.
The rights and remedies of the Purchaser specified herein are for the sole and exclusive
benefit, use and protection of the Purchaser, and the Purchaser is entitled, but shall have no duty
or obligation to the County, the Authority, the Trustee or any other Person or otherwise, to
exercise or to refrain from exercising any right or remedy reserved to the Purchaser hereunder or
under any of the other Related Documents.
Section 7.04. Waivers or Omissions. No delay or omission by the Purchaser in the
exercise of any right, remedy or power or in the pursuit of any remedy shall impair any such
right remedy or power or be construed to be a waiver of any default on the part of the Purchaser
or to be acquiescence therein. No express or implied waiver by the Purchaser of any Event of
Default shall in any way be a waiver of any future or subsequent Event of Default.
Section 7.05. Discontinuance of Proceedings. In case the Purchaser shall proceed to
invoke any right, remedy or recourse permitted hereunder or under the Related Documents and
shall thereafter elect to discontinue or abandon the same for any reason, the Purchaser shall have
the unqualified right so to do and, in such event, the County, the Authority and the Purchaser
shall be restored to their former positions with respect to the Obligations, the Related Documents
and otherwise, and the rights, remedies, recourse and powers of the Purchaser hereunder shall
continue as if the same had never been invoked.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Indemnification. In addition to any and all rights of reimbursement,
indemnification, subrogation or any other rights pursuant hereto or under law or equity, the
County and the Authority hereby agree (to the extent permitted by law), as Additional Payments,
to indemnify and hold harmless the Purchaser and each other Bondholder and its officers,
directors and agents (each, an “Indemnitee”) from and against any and all claims, damages,
losses, liabilities, reasonable costs or expenses whatsoever (including reasonable attorneys’ fees)
which may incur or which may be claimed against an Indemnitee by any Person or entity
whatsoever (collectively, the “Liabilities”) by reason of or in connection with (a) the execution
and delivery or transfer of, or payment or failure to pay under, any Related Document; (b) the
issuance and sale of the Bonds; and (c) the use of the proceeds of the Bonds; provided that
neither the County nor the Authority shall be required to indemnify an Indemnitee for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused
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by the willful misconduct or gross negligence of such Indemnitee. Nothing under this
Section 8.01 is intended to limit the County’s and Authority’s payment of the Obligations.
Section 8.02. Survival. The obligations of the County and the Authority under this
Article VIII shall survive the payment of the Bonds and the termination of this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Patriot Act Notice; Government Regulations. (a) The Purchaser hereby
notifies the County and the Authority that pursuant to the requirements of the Patriot Act it is
required to obtain, verify and record information that identifies the County and the Authority,
which information includes the name and address of the County and the Authority and other
information that will allow the Purchaser to identify the County and the Authority in accordance
with the Patriot Act. Each of the County and the Authority hereby agrees that it shall promptly
provide such information upon request by the Purchaser.
(b) The County and the Authority each hereby represents and warrants and
covenants and agrees (i) that it is not and shall not be listed on the Specially Designated
Nationals and Blocked Person List or other similar lists maintained by OFAC or the Department
of the Treasury or included in any executive orders, that prohibits or limits the Purchaser from
making any advance or extension of credit to the County or the Authority or from otherwise
conducting business with the County or the Authority and (ii) to ensure that the proceeds of the
extensions of credit hereunder shall not be used to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto.
Section 9.02. Further Assurances. From time to time upon the request of either party
hereto, the other shall promptly and duly execute, acknowledge and deliver any and all such
further instruments and documents as the requesting party may in its reasonable discretion deem
necessary or desirable to confirm this Agreement, and the other Related Documents, to carry out
the purpose and intent hereof and thereof or to enable the requesting party to enforce any of its
rights hereunder or thereunder. At any time, and from time to time, upon request by the
Purchaser, the County and/or the Authority, as applicable, will, at its respective expense, (a)
correct any defect, error or omission which may be discovered in the form or content of any of
the Related Documents, and (b) make, execute, deliver and record, or cause to be made,
executed, delivered and recorded, any and all further instruments, certificates, and other
documents as may, in the opinion of the Purchaser, be necessary or desirable in order to
complete, perfect or continue and preserve the Lien of the Trust Agreement. Upon any failure by
the County or the Authority to do so, the Purchaser or the Trustee may make, execute and record
any and all such instruments, certificates and other documents for and in the name of the County
and/or the Authority, as applicable, all at the sole expense of the County or the Authority, as
applicable, and the County and the Authority hereby appoint the Purchaser and the Trustee the
agent and attorney-in-fact of the County and the Authority to do so, this appointment being
coupled with an interest and being irrevocable. In addition, at any time, and from time to time,
upon request by the Purchaser or the Trustee, the County and/or the Authority, as applicable,
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will, at its respective expense, provide any and all further instruments, certificates and other
documents as may, in the opinion of the Purchaser or the Trustee, be necessary or desirable in
order to verify the County’s and the Authority’s identity and background in a manner satisfactory
to the Purchaser or the Trustee, as the case may be.
Section 9.03. Amendments and Waivers; Enforcement. The Purchaser, the County and
the Authority may from time to time enter into agreements amending, modifying or
supplementing this Agreement or the other Related Documents or changing the rights of the
Purchaser or the County hereunder or thereunder, and the Purchaser may from time to time grant
waivers or consents to a departure from the due performance of the obligations of the County
hereunder or thereunder. Any such agreement, waiver or consent must be in writing and shall be
effective only to the extent specifically set forth in such writing. In the case of any such waiver
or consent relating to any provision hereof, any Default or Event of Default so waived or
consented to shall be deemed to be cured and not continuing, but no such waiver or consent shall
extend to any other or subsequent Default or Event of Default or impair any right consequent
thereto.
Section 9.04. No Implied Waiver; Cumulative Remedies. No course of dealing and no
delay or failure of the Purchaser in exercising any right, power or privilege under this Agreement
or the other Related Documents shall affect any other or future exercise thereof or exercise of
any right, power or privilege; nor shall any single or partial exercise of any such right, power or
privilege or any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or privilege. The
rights and remedies of the Purchaser under this Agreement are cumulative and not exclusive of
any rights or remedies which the Purchaser would otherwise have under any Related Document,
at law or in equity.
Section 9.05. Notices. All notices, requests, demands, directions and other
communications (collectively “notices”) under the provisions of this Agreement shall be in
writing (including facsimile communication), unless otherwise expressly permitted hereunder,
and shall be sent by first-class mail or overnight delivery and shall be deemed received as
follows: (i) if by first class mail, five (5) days after mailing; (ii) if by overnight delivery, on the
next Business Day; (iii) if by telephone, when given to a person who confirms such receipt; and
(iv) if by facsimile, when confirmation of receipt is obtained. All notices shall be sent to the
applicable party at the following address or in accordance with the last unrevoked written
direction from such party to the other parties hereto:
The Authority: County of Contra Costa Public Financing
Authority
c/o County Administrator’s Office
County of Contra Costa
County Administration Building
651 Pine Street, 10th Floor
Martinez, California 94553
Facsimile: (925) 646-1353
Telephone: (925) 335-1080
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The County: County of Contra Costa
County Administration Building
651 Pine Street, 10th Floor
Martinez, California 94553
Attention: Clerk of Board of Supervisors
Facsimile: (925) 646-1353
Telephone: (925) 335-1080
The Purchaser: Wells Fargo Bank, National Association
100 West Washington Street, 20th Floor
Phoenix, Arizona 85003
Attention: Bradley Schroeder
Facsimile: (877) 302-2804
Telephone: (602) 378-5755
with a copy to:
Wells Fargo Municipal Capital Strategies, LLC
________________________________
________________________________
Attention: Readie Callahan
Facsimile:
Telephone:
The Trustee: Wells Fargo Bank, National Association
1700 Lincoln Street, 10th Floor
Denver, Colorado 80203
Attention: Corporate Trust Services
Facsimile: ( ) [________]
Telephone: (415) 371-2651
The Purchaser may rely on any notice (including telephone communication) purportedly made
by or on behalf of the other, and shall have no duty to verify the identity or authority of the
Person giving such notice, unless such actions or omissions would amount to gross negligence or
intentional misconduct.
Section 9.06. Right of Setoff. (a) Upon the occurrence of an Event of Default, the
Purchaser or any other Bondholder may, at any time and from time to time, without notice to the
County or any other person (any such notice being expressly waived), set off and appropriate and
apply against and on account of any Obligations under this Agreement, without regard to
whether or not the Purchaser or such Bondholder shall have made any demand therefor, and
although such Obligations may be contingent or unmatured, any and all deposits (general or
special, including but not limited to deposits made pursuant to this Agreement and Debt
evidenced by certificates of deposit, whether matured or unmatured, but not including trust
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accounts, such as restricted donor accounts) and any other Debt at any time held or owing by
such Bondholder to or for the credit or the account of any or all of the County
(b) Each Bondholder agrees promptly to notify the County after any such set-off and
application referred to in subsection (a) above, provided that the failure to give such notice shall
not affect the validity of such set-off and application. Subject to the provisions of subsection (a)
above, the rights of a Bondholder under this Section 9.06 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such Bondholder may
have.
Section 9.07. No Third-Party Rights. Nothing in this Agreement, whether express or
implied, shall be construed to give to any Person other than the parties hereto and the
Bondholders any legal or equitable right, remedy or claim under or in respect of this Agreement,
which is intended for the sole and exclusive benefit of the parties hereto.
Section 9.08. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or
in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
Section 9.09. Governing Law; Consent to Jurisdiction and Venue; Waiver of Jury Trial.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO CONFLICTS OF LAW PROVISIONS.
(b) EACH PARTY HERETO CONSENTS TO AND SUBMITS TO IN PERSONAM JURISDICTION AND
VENUE IN THE STATE OF CALIFORNIA AND IN THE FEDERAL DISTRICT COURTS WHICH ARE LOCATED
IN THE STATE OF CALIFORNIA. EACH PARTY ASSERTS THAT IT HAS PURPOSEFULLY AVAILED ITSELF
OF THE BENEFITS OF THE LAWS OF THE STATE OF CALIFORNIA AND WAIVES ANY OBJECTION TO IN
PERSONAM JURISDICTION ON THE GROUNDS OF MINIMUM CONTACTS, WAIVES ANY OBJECTION TO
VENUE, AND WAIVES ANY PLEA OF FORUM NON CONVENIENS. THIS CONSENT TO AND SUBMISSION
TO JURISDICTION IS WITH REGARD TO ANY ACTION RELATED TO THIS AGREEMENT. REGARDLESS OF
WHETHER THE PARTY’S ACTIONS TOOK PLACE IN THE STATE OF CALIFORNIA OR ELSEWHERE IN THE
UNITED STATES, THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE, AND DOES NOT PRECLUDE
EITHER PARTY FROM OBTAINING JURISDICTION OVER THE OTHER IN ANY COURT OTHERWISE
HAVING JURISDICTION.
(c) TO THE EXTENT PERMITTED BY APPLICABLE LAWS, EACH OF THE PARTIES HERETO
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE RELATED DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. IF AND TO THE EXTENT
THAT THE FOREGOING WAIVER OF THE RIGHT TO A JURY TRIAL IS UNENFORCEABLE FOR ANY
REASON IN SUCH FORUM, EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE ADJUDICATION
OF ALL CLAIMS PURSUANT TO JUDICIAL REFERENCE AS PROVIDED IN CALIFORNIA CODE OF CIVIL
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PROCEDURE SECTION 638, AND THE JUDICIAL REFEREE SHALL BE EMPOWERED TO HEAR AND
DETERMINE ALL ISSUES IN SUCH REFERENCE, WHETHER FACT OR LAW. EACH OF THE PARTIES
HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND CONSENT AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS AND CONSENTS TO JUDICIAL
REFERENCE FOLLOWING CONSULTATION WITH LEGAL COUNSEL ON SUCH MATTERS. IN THE EVENT
OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT OR TO JUDICIAL REFERENCE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE
SECTION 638 AS PROVIDED HEREIN.
(d) The covenants and waivers made pursuant to this Section 9.09 shall be irrevocable
and unmodifiable, whether in writing or orally, and shall be applicable to any subsequent
amendments, renewals, supplements or modifications of this Agreement. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the court.
Section 9.10. Prior Understandings. This Agreement and the other Related Documents
supersede all other prior understandings and agreements, whether written or oral, among the
parties hereto relating to the transactions provided for herein and therein.
Section 9.11. Duration. All representations and warranties of the County and the
Authority contained herein or made in connection herewith shall survive the making of and shall
not be waived by the execution and delivery of this Agreement or the other Related Documents.
All covenants and agreements of the County and the Authority contained herein shall continue in
full force and effect from and after the date hereof until the Obligations have been fully
discharged.
Section 9.12. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts each of which, when so
executed, shall be deemed an original, but all such counterparts shall constitute but one and the
same instrument.
Section 9.13. Successors and Assigns.
(a) Successors and Assigns Generally. This Agreement is a continuing obligation and
shall be binding upon the County and the Authority, their successors, transferees and assigns and
shall inure to the benefit of the Bondholders and their respective permitted successors,
transferees and assigns. Neither the County nor the Authority may assign or otherwise transfer
any of their respective rights or obligations hereunder without the prior written consent of the
Purchaser. Each Bondholder may, in its sole discretion and in accordance with applicable Law,
from time to time assign, sell or transfer in whole or in part, this Agreement, its interest in the
Bonds and the Related Documents in accordance with the provisions of paragraph (b) or (c) of
this Section. Each Bondholder may at any time and from time to time enter into participation
agreements in accordance with the provisions of paragraph (d) of this Section. Each Bondholder
may at any time pledge or assign a security interest subject to the restrictions of paragraph (e) of
this Section. Wells Fargo Bank, National Association shall be the Purchaser hereunder until
such time as the Majority Bondholder designates an alternate Person to serve as the Purchaser
hereunder by delivery of written notice to the County, the Authority and the Trustee and such
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Person accepts and agrees to act as the Purchaser hereunder and under the Related Documents.
The Majority Bondholder may so designate an alternate Person to act as the Purchaser from time
to time. Upon acceptance and notification thereof to the County, the Authority and the Trustee,
the successor to the Purchaser for such purposes shall thereupon succeed to and become vested
with all of the rights, powers, privileges and responsibilities of the Purchaser, and Wells Fargo
Bank, National Association or any other Person being replaced as the Purchaser shall be
discharged from its duties and obligations as the Purchaser hereunder.
(b) Sales and Transfers by Bondholder to a Purchaser Transferee. Without limitation
of the foregoing generality, a Bondholder may at any time sell or otherwise transfer to one or
more transferees all or a portion of the Bonds to a Person that is (i) a Purchaser Affiliate or (ii) a
trust or other custodial arrangement established by the Purchaser or a Purchaser Affiliate, the
owners of any beneficial interest in which are limited to “qualified institutional buyers” as
defined in Rule 144A promulgated under the 1933 Act (each, a “Purchaser Transferee”). From
and after the date of such sale or transfer, Wells Fargo Bank, National Association (and its
successors) shall continue to have all of the rights of the Purchaser hereunder and under the other
Related Documents as if no such transfer or sale had occurred; provided, however, that (A) no
such sale or transfer referred to in clause (b)(i) or (b)(ii) hereof shall in any way affect the
obligations of the Purchaser hereunder, (B) the County, the Authority and the Trustee shall be
required to deal only with the Purchaser with respect to any matters under this Agreement and
(C) in the case of a sale or transfer referred to in clause (b)(i) or (b)(ii) hereof, only the Purchaser
shall be entitled to enforce the provisions of this Agreement against the County and the
Authority.
(c) Sales and Transfers by Bondholder to a Non-Purchaser Transferee. Without
limitation of the foregoing generality, a Bondholder may at any time sell or otherwise transfer to
one or more transferees which are not Purchaser Transferees but each of which constitutes a
“qualified institutional buyer” as defined in Rule 144A promulgated under the 1933 Act (each a
“Non-Purchaser Transferee”) all or a portion of the Bonds if (A) written notice of such sale or
transfer, including that such sale or transfer is to a Non-Purchaser Transferee, together with
addresses and related information with respect to the Non-Purchaser Transferee, shall have been
given to the County, the Authority, the Trustee and the Purchaser (if different than the
Bondholder) by such selling Bondholder and Non-Purchaser Transferee, and (B) the
Non-Purchaser Transferee shall have delivered to the County, the Authority, the Trustee and the
selling Bondholder, an investment letter in substantially the form delivered by the Purchaser on
the Effective Date (the “Investor Letter”).
From and after the date the County, the Authority, the Trustee and the selling Bondholder
have received written notice and an executed Investor Letter, (A) the Non-Purchaser Transferee
thereunder shall be a party hereto and shall have the rights and obligations of a Bondholder
hereunder and under the other Related Documents, and this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to effect the addition of the
Non-Purchaser Transferee, and any reference to the assigning Bondholder hereunder and under
the other Related Documents shall thereafter refer to such transferring Bondholder and to the
Non-Purchaser Transferee to the extent of their respective interests, and (B) if the transferring
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Bondholder no longer owns any Bonds, then it shall relinquish its rights and be released from its
obligations hereunder and under the Related Documents.
(d) Participations. The Purchaser shall have the right to grant participations in all or a
portion of the Purchaser’s interest in the Bonds, this Agreement and the other Related
Documents to one or more other banking institutions; provided, however, that (i) no such
participation by any such participant shall in any way affect the obligations of the Purchaser
hereunder and (ii) the County, the Authority and the Trustee shall be required to deal only with
the Purchaser, with respect to any matters under this Agreement, the Bonds and the other Related
Documents and no such participant shall be entitled to enforce any provision hereunder against
the County or the Authority, as applicable.
(e) Certain Pledges. The Purchaser may at any time pledge or grant a security interest
in all or any portion of its rights under the Bonds, this Agreement and the Related Documents to
secure obligations of the Purchaser, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall release the Purchaser
from any of its obligations hereunder or substitute any such pledgee or assignee for the Purchaser
as a party hereto.
Section 9.14. No Advisory or Fiduciary Responsibility. In connection with all aspects of
the transactions contemplated by this Agreement and the Related Documents (including in
connection with any amendment, waiver or other modification of this Agreement or of any
Related Document), the County and the Authority acknowledge and agree that: (a)(i) any
arranging, structuring and other services regarding this Agreement and the Related Documents
provided by the Purchaser or any Affiliate of the Purchaser are arm’s length commercial
transactions between the County and/or the Authority on the one hand, and the Purchaser and
any Affiliate of the Purchaser on the other hand, (ii) the County and the Authority have consulted
their own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate,
and (iii) the County and the Authority are capable of evaluating, and understand and accept, the
terms, risks and conditions of the transactions contemplated by this Agreement and the Related
Documents; (b)(i) the Purchaser and each Affiliate of the Purchaser is and has been acting solely
as a principal and has not been, is not, and will not be acting as an advisor, agent or fiduciary for
the County, the Authority or any other Person and (ii) neither the Purchaser nor any Affiliate of
the Purchaser has any obligation to the County or the Authority with respect to the transactions
contemplated by this Agreement and the Related Documents, except those obligations expressly
set forth herein; and (c) the Purchaser and each Affiliate of the Purchaser may be engaged in a
broad range of transactions that involve interests that differ from those of the County and/or the
Authority, and neither the Purchaser nor any Affiliate of the Purchaser has any obligation to
disclose any of such interests to the County or the Authority. To the fullest extent permitted by
Applicable Laws, the County and the Authority hereby waive and release any claims that they
may have against the Purchaser and each Affiliate of the Purchaser with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of the transactions
contemplated by this Agreement and the Related Documents.
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Section 9.15. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose.
Section 9.16. Electronic Signatures. The parties agree that the electronic signature of a
party to this Agreement shall be as valid as an original signature of such party and shall be
effective to bind such party to this Agreement. The parties agree that any electronically signed
document (including this Agreement) shall be deemed (i) to be “written” or “in writing,” (ii) to
have been signed and (iii) to constitute a record established and maintained in the ordinary
course of business and an original written record when printed from electronic files. Such paper
copies or “printouts,” if introduced as evidence in any judicial, arbitral, mediation or
administrative proceeding, will be admissible as between the parties to the same extent and under
the same conditions as other original business records created and maintained in documentary
form. Neither party shall contest the admissibility of true and accurate copies of electronically
signed documents on the basis of the best evidence rule or as not satisfying the business records
exception to the hearsay rule. For purposes hereof, “electronic signature” means a
manually-signed original signature that is then transmitted by electronic means; “transmitted by
electronic means” means sent in the form of a facsimile or sent via the internet as a “pdf”
(portable document format) or other replicating image attached to an e-mail message; and,
“electronically signed document” means a document transmitted by electronic means and
containing, or to which there is affixed, an electronic signature.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
Signature Page to Continuing Covenant Agreement
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered as of the Effective Date.
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: ____________________________________
Name: ______________________________
Title: _______________________________
COUNTY OF CONTRA COSTA
By: ____________________________________
Name: ______________________________
Title: _______________________________
COUNTY OF CONTRA COSTA PUBLIC FINANCING
AUTHORITY
By: ____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT A
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate (this “Certificate”) is furnished to Wells Fargo Bank,
National Association (the “Purchaser”) pursuant to the Continuing Covenant Agreement dated
as of March 1, 2017 (the “Agreement”), among the County of Contra Costa (the “County”), the
County of Contra Costa Financing Authority and Purchaser. Unless otherwise defined herein,
the terms used in this Certificate shall have the meanings assigned thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [chief financial officer] of the County;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions and
conditions of the County during the accounting period covered by the attached financial
statements;
3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or the occurrence of any event which
constitutes a Default or Event of Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this Certificate, except as
set forth below; [and]
4. The financial statements required by Section 6.05 of the Agreement and
being furnished to you concurrently with this certificate fairly represent the consolidated
financial condition of the County in accordance with GAAP as of the dates and for the
periods covered thereby.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature
of the condition or event, the period during which it has existed and the action which the County
has taken, is taking, or proposes to take with respect to each such condition or event:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
A-2
The foregoing certifications and the financial statements delivered with this Certificate in
support hereof, are made and delivered this _________ day of _______________, 20__.
COUNTY OF CONTRA COSTA
By ____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT B
Upon the occurrence of a Break Event, the Breakage Fee shall be calculated and paid as
follows:
“Break Date” means any date that an optional redemption is made.
“Break Event” means any optional redemption.
“Calculation Agent” will be Wells Fargo Bank, National Association. If for any
reason Wells Fargo Bank, National Association is unable or unwilling to calculate the
Breakage Fee, the Calculation Agent shall be an independent financial advisor or
investment banker appointed by the County with the consent of the Purchaser.
“Day Count Fraction” is the anticipated basis on which interest at the Fixed Rate
is to be computed on each of the Bonds. The Day Count Fraction utilizes a 360-day year
and consisting of twelve 30-day months.
“Reference Rate” means the [Reference Rate%].
“Scheduled Due Date” means each date specified on the Amortization Schedule
attached as Schedule I hereto.
“Schedule of Principal Amount” is the anticipated principal amount of the Bonds
scheduled to be outstanding on the date the Bond is funded and on the Scheduled Due
Date. The Schedule of Principal Amounts for the Scheduled Due Dates is specified on
the Amortization Schedule attached as Schedule I hereto.
1. In connection with any Break Event, a Breakage Fee shall be paid by the County
if the Breakage Fee is a positive number. No Breakage Fee shall be payable for a Break Event if
the Breakage Fee for that Break Event is a negative number. Breakage Fees will be determined
by the Calculation Agent, on the Business Day next preceding any Break Date and will be
calculated for the Bonds as follows:
“Breakage Fee” for any Break Event is the difference of:
(i) the sum of the present values of a series of amounts computed for each
Scheduled Due Date after the Break Date through the Maturity Date for the Bond, each of
which amounts is equal to the product of (A) the Affected Principal Amount for the
Affected Principal Period ending on the Scheduled Due Date, times (B) the Reference
Rate, times (C) the Day Count Fraction for such Affected Principal Period,
minus
C-2-
(ii) the sum of the present values of a series of amounts computed for each
Scheduled Due Date after the Break Date through the Maturity Date for the Bond, each of
which amounts is equal to the product of (A) the Affected Principal Amount for the
Affected Principal Period ending on the Scheduled Due Date, times (B) the Break Rate,
times (C) the Day Count Fraction for such Affected Principal Period,
where:
(1) the “Calculation Agent” computes such present values by discounting
each such series of amounts described in clause (i) and (ii) above from the Scheduled
Due Date to the Break Date using a series of discount factors corresponding to the
Scheduled Due Date as determined by the Calculation Agent from the swap yield curve
that the Calculation Agent would use as of the Break Date in valuing a series of fixed rate
interest rate swap payments similar to such series of amounts;
(2) the “Affected Principal Amount” for an Affected Principal Period is the
principal amount of the Bonds reflected in the Schedule of Principal Amounts scheduled
to be outstanding during that Affected Principal Period determined as of the relevant
Break Date by the reference to such Schedule of Principal Amounts before giving effect
to any Break Event on that Break Date, and for any Break Event, multiplying each such
principal amount times the Prepayment Fraction;
(3) “Affected Principal Period” is each period from and including a
Scheduled Due Date to but excluding the next succeeding Scheduled Due Date; provided,
however, if the Break Date is not a Scheduled Due Date, the initial Affected Principal
Period shall be the period from and including the Break Date to but excluding the next
succeeding Scheduled Due Date and the Affected Principal Period for such initial
Affected Principal Period shall be the amount stated in the Schedule of Principal
Amounts outstanding for the Scheduled Due Date next preceding the Break Date;
(4) “Prepayment Fraction” means, for each Scheduled Due Date, a fraction
the numerator of which is the amount of the credit to be applied pursuant to the
applicable provisions of the Bond and the Trust Agreement to reduce the amount of the
prepayment otherwise due on such date and the denominator of which is the amount of
the payment otherwise due on such date (without regard to such credit); and
(5) “Break Rate” means, for any Break Date, and with respect to each Bond,
the fixed rate the Calculation Agent determines is representative of what swap dealers
would be willing to pay to the Calculation Agent (or, if required to be cleared under the
Commodity Exchange Act or a Commodity Futures Trading Commission rule or
regulation promulgated thereunder, to a swap clearinghouse) as fixed rate payors on a
semi-annual basis in return for receiving one-month LIBOR-based payments monthly
under interest rate swap transactions that would commence on such Break Date, and
mature on, or as close as commercially practicable to, the Maturity Date for such Bond;
C-3-
2. The Calculation Agent shall determine the Breakage Fee hereunder in good faith
using such methodology as the Calculation Agent deems appropriate under the circumstance, and
the Calculation Agent’s determination shall be conclusive and binding in the absence of manifest
error.
SCHEDULE I
AMORTIZATION SCHEDULE
Scheduled Date Schedule of Principal Amounts