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HomeMy WebLinkAboutMINUTES - 12081998 - D3 ID,3 RESOLUTION NO.98/ 618 OF THE BOARD OF SUPERVISORS OF THE COUNTY OF CONTRA COSTA CALIFORNIA A RESOLUTION APPROVING THE ISSUANCE BY THE COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY OF NOT TO EXCEED $85,000,000 AGGREGATE PRINCIPAL. AMOUNT OF LEASEREVENUE BONDS(REFUNDING AND VARIOUS CAPITAL PROJECTS), 1999 SERIES A FOR THE FINANCING OF VARIOUS CAPITAL PROJECTS' AND THE REFUNDING AND DEFEASANCE OF THE COUNTY'S 1988 CERTIFICATES OF PARTICIPATION, AUTHORIZING THE FORMS OF AND DIRECTING THE EXECUTION AND DELIVERY OF A TRUST AGREEMENT, A FACILITY LEASE (VARIOUS CAPITAL FACILITIES), A MASTER SITE LEASE, A LETTER OF INSTRUCTIONS, A BOND PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT; APPROVING FORM OF AND DISTRIBUTION OF THE OFFICIAL STATEMENT FOR SAID BONDS; AND AUTHORIZING TAKING OF NECESSARY ACTIONS AND EXECUTION OF NECESSARY CERTIFICATES IN CONNECTION THEREWITH WHEREAS, the County of Contra Costa (the "County„) and the Contra Costa County Redevelopment Agency (the "Agency') have heretofore entered into a Joint Exercise of Powers Agreement, dated as of April 7, 1992 (the "Joint Powers Agreement"), which Joint Powers Agreement creates and establishes the County of Contra Costa Public Financing Authority (the "Authority"); WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California(the "Marks-Roos Local Bond Pooling Act of 1985") and the Joint Powers Agreement, the Authority is authorized to issue bonds]for financing public capital improvements whenever there are significant public benefits; WHEREAS, pursuant to a Trust Agreement dated as of July 1, 1988 (the "1988 Trust Agreement), among U.S. Bank Trust National Association, as successor trustee (the "Prior Trustee"), the Contra Costa County Public Facilities Corporation (the "Corporation") and the County, the County has heretofore caused to be executed and delivered its 1988 Certificates of Participation (the "1988 Certificates"), in the aggregate principal amount of$61,690,000, for the refinancing of the costs of acquisition and improvement of various County'facilities (the 111988 Project"); WHEREAS,pursuant to a lease agreement,dated as of July 1,1988,by and between the Corporation and the County (the "1988 Facility Lease"), the Corporation has leased the 1988 Project to the County; ncxCssFI:308164.5 1 _.._.. ......... ......... ......... ......... ......... ......._..._... .. . ............._..__.... ......... ......... ........ ......... ......... ......... ......... ......... ................_. ........ ......... ......... ........... ....... ......... 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 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 Lease or any part thereof be assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority, as hereinafter provided for, or (2) the County or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the County asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the County's debts or obligations, or offers to the County's creditors to effect a composition or extension of time to pay the County's debts or asks, (seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the County's debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the County, or if a receiver of the business or of the property or assets of the County shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the County shall make a general or any assignment for the benefit of the County's creditors, or if(3) the County shall abandon or vacate the Facilities, 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 as described in this Section, the Authority shall be entitled to proceed to protect and enforce the rights vested in the Authority by this Lease or by law. The provisions of this Lease and the duties of the County and of its trustees, officers or employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing,the Authority shall have the right to bring the following actions: (1) Accounting. By action or suit in equity to require the County and its trustees, officers and employees and its assigns to account as the trustee of an express trust. DOCSSFI:308303.5 17 _..._. ......... ......... ......... ......... ......... ......... ..... .. .. . .............. . ......... ......... ......... .. ....... .......... ........ ......... ......... ......... ......... .............. ... _......__ ......... ......... .............. .... ......... (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. The exercise of any rights or remedies under this 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 shall prevail in any action brought to enforce any of the terms and provisions of this Lease, the County agrees to pay a reasonableamount as and for attorney's fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder, whether or not a lawsuit has been filed and whether or not any lawsuit culminates in a judgment. SECTION 6.02. Waiv . Failure of the Authority to take advantage of any default on the part of the County shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the County of any 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 Lease. ARTICLE VII EMINENT DOMAIN; PREPAYMENT SECTION 7.01. Eminent Domain. If the whole of the Facilities, including the Demised Premises 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 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 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 DOCSSF 1:308303.5 18 _. . _._. ......... ......_.. ....._... ........_...... . _ ._ .. ......... ......... ......... ......... ........ ......... ......... ......... ......... ......... ......... ......... .... .___. .. ......_.. ......... ......... ......... . ........ ......... 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, including the Demised Premises or any portion thereof shall be paid to the Trustee and applied to the prepayment of the Base Rental Payments as provided in Section 7.02. Any such award made after all of the Base Rental Payments and Additional Payments have been fully paid,or provision therefor made, shall be paid to the to the County. SECTION 7.02. Prepayment. (a)The County shall prepay on any date from insurance (including proceeds of title insurance) and eminent domain proceeds, to the extent provided in Sections 5.01 and 7.01 hereof(provided,however, that in the event of partial damage to or destruction of the Facilities caused by perils covered by insurance, if in the judgment of the Authority the insurance proceeds are sufficient to repair, reconstruct or replace the damaged or destroyed portion of the 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 5.01 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. (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 Bunds 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 prepayment waives the right of, abatement of such prepaid Base Rental Payments and shall not be entitled to any reimbursement of such Base Rental Payments. (c) Before making any prepayment pursuant to this article, the County shall, within five (5) days following the event creating such right or obligation to prepay, give written notice to the Authority and the Trustee describing such event and specifying the date on which the prepayment will be made, which date shall be not less than forty-five (45) days from the date such notice is given. (d) When (1) there shall have been deposited with the Trustee at or prior to the due dates of the Base Rental Payments or date when the County may exercise its option to purchase the 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 DOCSSF1:308303.5 19 _.. ......... ......... ......... ......... ......... 1111 _ .......... ..._..... ......... ......... ........ ......... ......... ......... ......... ........_1111_. . _..._ ......... ......... ......... ......... . ........ ..................... _..................._............ 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 paymentof the Base Rental Payments or option price) and the Authority's interest in and title to the Project or applicable portion or item thereof shall be transferred and conveyed to the County. In such event, the Authority shall cause an accounting for such period or periods as may be requested by the County to be prepared and filed with the Authority and evidence such discharge and satisfaction, and the Authority shall pay over to the County as an overpayment of Base Rental Payments all such moneys or Permitted Investments held by it pursuant hereto other than such moneys and such 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, including the Demised Premises 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 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 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 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 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 Lease need not be maintained as to such part of the Project, and (d) title to such part of the Facilities, including the portion of the Demised Premises upon which such part of the Facilities is located shall vest in the County and the term of this Lease shall end as to Facilities, including the portion of the Demised Premises upon which such part of the Facilities is located. 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 DOCSSFI:308343.5 20 ......... ......._. .._...... ......... __ _. _.. ......... ......... ........... ....... ......... ......... ......... ..........._..... . ........................ ......... ......... ......... .................................................... .......................................................................................... personal property from this Lease, if(a) in the opinion of the County the property so sold or exchanged is no longer required or useful in connection with the operation of the 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 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 exchange of personal property subject to this Lease or before releasing for the purchase of new personal property money received by it for personal property so sold. 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, including the Demised Premises during reasonable business hours (and in emergencies at all times) (a)to inspect the same, (b) for any purpose connected with the Authority's or the County's rights or obligations under this Lease, and (c) for all other lawful purposes. SECTION 8.02. fens. In the event the County shall at any time during the term of this Lease cause any changes, alterations, additions, improvements,'or other work to be done or performed or materials to be supplied, in or upon the Facilities, the County shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the County in, upon or about the 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 not promptly stayed, or if so stayed and said stay thereafter expires, the County shall forthwith pay and discharge said judgment. The County agrees to and shall, to the maximum extent permitted by law, indemnify and hold the Authority and the Trustee and their respective members, directors, agents, successors and assigns, 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. DOCSSF t:308303.5 21 _.. ._....... ......... ......... ......... ......... ._ .... _. ...... ........... ......... ......... ......... ......... ........ ......... ......... ......... ......... ......... ....................................................................................................................................................................... _.__.._................ SECTION 8.03. Quiet Enj ,oent. The parties hereto; mutually covenant that the County, by keeping and performing the covenants and agreements herein contained and not in default hereunder, shall at all times during the term of this Lease peaceably and quietly have, hold and enjoy the Facilities, including the Demised Premises 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 its members, directors, officers, agents and employees, harmless from, and defend each of them against, any and all claims, liens and judgments arising from the construction or 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 and Subleasing. Neither this Lease nor any interest of the County hereunder shall be mortgaged, pledged, assigned, sublet or transferred by the County by voluntary act or by operation of law or otherwise, except with the prior written consent of the Authority, which, in the case of subletting, shall not be unreasonably withheld; provided such subletting shall not affect the tax-exempt status of the interest on the Bonds. [Neither this Lease nor any interest of the County hereunder shall be sublet by the County by voluntary act or by operation of law except with the prior written consent of the Bond Insurer (except for the portions of the Project for which subleases were in effect on , �)]. No such mortgage, pledge, assignment, sublease or transfer shall in any event affect or reduce the obligation of the County to make the Base Rental Payments and Additional Payments required hereunder. SECTION 8.06. Title to Facilities. During the term of this 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 a rental interruption covered by insurance pursuant to Section 5.03 hereof. Upon the termination or expiration of this Lease, the Authority shall execute such conveyances, deeds and other documents as may be necessary to evidence the ownership of the Facilities, including the Demised Premises by the County and to clarify the title of the County on the record thereof. SECTION 8.07. Tax Covenants. The County and the Authority will not make any use of the proceeds of the obligations provided herein or any other funds of the County or the Authority which will cause such obligations to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Code. The County and the Authority will not L OCSSF1:368303.5 22 ......... ......... ......... ......... ......... ......... ......... ......... ...................... ......... ......... ......... ......... ......... ........ ......... ......... ......... ......... ......... _. _... ......... ............ ...... ......... make any use of the proceeds of the obligations provided herein or any other funds of the County or the Authority which will cause such obligations to be "federally guaranteed" and subject to inclusion in gross income for federal income tax purposes by reason of Section 149(b) of the Code. To that end, so long as any rental payments are unpaid, the County and the Authority, with respect to such proceeds and such other funds, will comply with all requirements of such Sections 148 and 149(b) and all regulations of the United States Department of the Treasury issued thereunder to the extent that such requirements are, at the time, applicable and in effect. The County further covenants that it will not use or permit the use of the facilities financed or refinanced by the proceeds of the Bonds by any person not an "exempt person" within the meaning of Section 141(a) of the Code or by an "exempt person" (including the County) in an "unrelated trade or business", in such manner or to such extent as would result in the inclusion of interest received hereunder in gross income for federal income tax purposes under Section 103 of the Code. If at any time the County is of the opinion that for purposes of this Section it is necessary to restrict or limit the yield on or change in any way the investment of any moneys held by the Trustee or the County or the Authority under this Lease or the Trust Agreement, the County shall so instruct the Trustee or the appropriate officials of the County in writing, and the Trustee or the appropriate officials of the County, as the case may be, shall take such actions as may be necessary in accordance with such instructions. In furtherance of the covenants of the County set forth above, the County will comply with the Tax Certificate and will instruct the Trustee in writing as necessary to comply with the Tax Certificate. The Trustee and the Authority may conclusively rely on any such written instructions, and the County hereby agrees to hold harmless the Trustee and the Authority for any loss, claim, damage, liability or expense incurred by the Authority for any actions taken by the Authority in accordance with such instructions. The County and the Authority shall at all times do and perform all acts and things 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 and shall take no action that would result in such interest not being excluded from gross income for federal income tax purposes. SECTION 8.08. Continuing_Disclosure. The County hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. Notwithstanding any other provision of this Lease, failure of the County to comply with the Continuing Disclosure Agreement shall not be considered an event of default hereunder; however, the Trustee may(and, at the request of any Participating Underwriter(as defined in the Continuing Disclosure Agreement) or the Holders of at least 25% aggregate principal amount of 1999 Series A Bonds Outstanding and provided satisfactory indemnification is provided to the Trustee, shall) or any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to compel the County to comply with its obligations under this Section 8.08. DOCSSF1:308303.5 23 ......... ......... ......... ......... ......... ...__... . ........ ............. ......... ......... ......... .......... ....... ......... ......... ......... ......... ......... ......... _.... ._.. ......... ......... ......... ............... ... ......... SECTION 8.09. 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 governmental charges that may lawfully be paid in installments over a period of years, the County shall be obligated to pay only such installments as are required to be;paid during the term of this Lease as and when the same become due. The County shall also pay directly such amounts, if any, in each year as shall be required by the Authority for the payment of all license and registration fees and all taxes (including, without limitation, income, excise, license, franchise, capital stock, recording, sales, use, value-added, property, occupational, excess profits and stamp taxes), levies, imposts, duties, charges, withholdings, assessments and governmental charges of any nature whatsoever, together with any additions to tax, penalties, fines or interest thereon, including, without limitation, penalties, fines or interest arising out of any delay or failure by the County to pay any of the foregoing or failure to file or furnish to the Authority or the Trustee for filing in a timely manner any returns, hereinafter levied or imposed against the Authority or the 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 or the Trustee shall notify the County that, in the opinion of independent counsel, by nonpayment of any such items, the interest of the Authority in the 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 and the Trustee. SECTION 8.10. Authorit'ss�P=ose. The Authority covenants that, prior to the discharge of this Lease, it will not engage in any activities inconsistent with the purposes for which the Authority is organized. SECTION 8.11. Dose of Lease. The County covenants that during the term of this Lease, except as hereinafter provided, (a) it will use, or cause the use of, the 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. 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 DOCSSF 2:308303.5 24 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 Lease or the existence, furnishing, functioning or the County's use of any item or products or services provided for in this 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 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 or the Project, which the Authority may have against the manufacturers, vendors and contractors of the Facilities or the Project. The County's sole remedy for the breach of such warranty, indemnification or representation shall be against the manufacturer or vendor or contractor of the Facilities or of the Project, and not against the Authority, nor shall such matter have any effect whatsoever on the rights and obligations of the Authority with respect to this Lease, including the right to receive full and timely payments hereunder. The County expressly acknowledges that the Authority makes, and has made, no representation or warranties whatsoever as to the existence or availability of such warranties of the manufacturer, vendor or contractor. SECTION 9.03. Use of the 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 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 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 Lease. ARTICLE X MISCELLANEOUS SECTION 10.01. Law Governing. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of California as the same from time to time exist. SECTION 10.02. Notice . 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 DocssFI 308303.5 25 sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail,return receipt requested, postage prepaid: If to the County: County of Contra Costa c/o Clerk of the Board of Supervisors County Administration Building 651 Pine Street Martinez, California 94553 With respect to insurance matters: County of Contra Costa Risk Manager Risk Management Department 2530 Arnold Drive Martinez, California 94553 cc: General Service Administration Attn: Carol Chan 1220 Morello Avenue, Suite 100 Martinez, CA 94553 If to the Authority: County of Contra Costa Public Financing Authority c/o County Administrator County Administration Building 651 Pine Street Martinez, California 94553 If to the Trustee: U.S. Bank Trust National Association 550 South Hope Street, Suite 500 Los Angeles, California 90017 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 Severabil;lty. If for any reason this Lease shall be held by a court of competent jurisdiction to be void, voidable, or unenforceable by the Authority or by the County, or if for any reason it is held by such a court that any of the covenants and conditions of the County hereunder, including the covenant to pay rentals hereunder,is unenforceable for the full term hereof,then and in such event this Lease is and shall be deemed to be a lease under which the rentals are to be paid by the County annually in consideration of the right of the County to possess, occupy and use the Facilities, and all of the rental and other terms, provisions and conditions of this Lease, except to the extent that such DOCSSF i:308303.5 26 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 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 Lease. SECTION 10.06. Amendment or Termination. The Authority and the County may at any time agree to the amendment or termination of this Lease; provided, however, that the Authority and the County agree and recognize that this Lease is entered into in accordance with the 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. SECTION 10.07. Execution. This Lease may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease. It is also agreed that separate counterparts of this Lease may separately be executed by the Authority and the County, all with the same force and effect as though the same counterpart had been executed by both the Authority and the County. DOCSSF1:308303.5 27 ......... ......... ......... ......... ......... ............._.. __ ... .. .......__.... ......... .............. ......... ....... ......... ......... ......... ......... ................................................................................................................................................. . .................................................................... IN WITNESS WHEREOF, the Authority and the County have caused this Lease to be executed by their respective officers thereunto duly authorized, all as;of the day and year first above written. COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, as Lessor Chair Secretary COUNTY OF CONTRA COSTA, as Lessee [SEAL] By Chair of the Board of Supervisors of the County of Contra Costa, State of California Attest: Philip J. Batchelor, Clerk of the Board of Supervisors and County Administrator By Chief Clerk Approved as to form: County Counsel DOCSSF 2:305303.5 EXHIBIT A The Facilities All that certain real property situated in the County of Contra Costa, State of California, described as follows: A-1 EXHIBIT B Base Rental Payment Schedule (Aggregate for 1999 Series A Bands) Base Rental Payment Date* Principal Interest Total Fiscal Year Total * Payable on the 15"day of the preceding month. DOCSSF 1:308343.5 B-1 Base Rental Payment Schedule (By Facility) BRAY COURTHOUSE Base Rental Fiscal Year Payment Date Principal Interest Total Total DOCSSFI:308303.5 B-2 SOCIAL SERVICES BUILDING Base Rental Payment Fiscal Year Date Principal Interest Total Total E70CSSFI:308303.5 B_3 COUNTY OFFICE BUILDING Base Rental Fiscal Year Payment Date Principal Interest Total Total DOCSSF1:308303.5 B-4 WEST COUNTY DETENTION FACILITY Base Rental Fiscal Year Payment Date Principal Interest Total Total DOCSSF t:308303.5 B_$ EXHIBIT C 1999 PROJECT Facility Location Family Law Center and associated facilities Adjacent to 1111 Ward Street Martinez, CA Social Services Building 4545 Delta Fair Boulevard Antioch, CA Sheriff s Building 1980 Muir Road Martinez, CA Juvenile Detention Facility Glacier Drive Martinez, CA Los Medanos Project Loveridge Road Pittsburg, CA County Office Building 2530 Arnold Drive Martinez, CA C-1 OH&S DRAFT 12/1/98 Recording requested by and return to: COUNTY OF CONTRA COSTA c/o Orrick, Herrington& Sutcliffe LLP Old Federal Reserve Bank Building 400 Sansome Street San Francisco, California 94111 Attention: Mary A. Collins, Esq. MASTER SITE LEASE by and between the COUNTY OF CONTRA COSTA and the COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY Dated as of February 1, 1999 DOCSSFi:308!48.5 ...................._......_... ....._. ......... ......... ......... ......... ......... ... ...... ......... ......... . ....... ......... ............. .............. TABLE OF CONTENTS Page;' SECTION1. DemisedPremises......................................................................I............................2 SECTION2. Term.......................................................................................... ............................ 2 SECTION3. Rental.....................................................................................................................2 SECTION4. Purpose...................................................................................................................2 SECTION 5. Environmental Law and Regulations........................................ ............................ 2 SECTION 6. Environmental Compliance ...................................................................................4 SECTION7. Owner in Fee............................................................................ ..........................6 SECTION 8. Assignments and Subleases................................................................................... 6 SECTION 9. Right of Entry; Easements.........................................................I............................ 6 SECTION10. Termination............................................................................................................ 6 SECTION11. Default....................................................................................... ............................ 7 SECTION 12. Quiet Enjoyment.................................................................................................... 7 SECTION 13. Waiver of Personal Liability.................................................................................. 7 SECTION14. Taxes...................................................................................................................... 8 SECTION 15. Eminent Domain.................................................................................................... 8 SECTION 16. Partial Invalidity.....................................................................................................8 SECTION17. Notices................................................................................................................... 8 SECTION 18. Section Headings ................................................................................................... 8 SECTION 19. Amendment................................................................................. SECTION20. Execution...............................................................................................................9 Exhibit A-Description of Facilities D0Cs3F1:30819s.5 _i_ MASTER SITE LEASE This Master Site Lease, dated as of February 1, 1999 (this "Lease" or "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 entity and agency, duly organized and existing pursuant to an Agreement entitled "Joint Exercise of Powers Agreement" by and between the County of Contra Costa and the Contra Costa County Redevelopment Agency(the "Authority"), as lessee; 3V1TNESSETH: WHEREAS, the County heretofore caused to be executed and delivered its 1988 Certificates of Participation (the "19$8 Certificates") in the aggregate principal amount of $61,690,000, pursuant to a Trust Agreement, dated as of July 1, 1988' (the "1988 Trust Agreement'), among the County, the Contra Costa County Public Facilities Corporation (the "Corporation") and U.S. Bank Trust National Association, as successor trustee (the "Prior Trustee") for the purpose of refinancing certain facilities for the County, WHEREAS, the County has determined that it is in its best interests to prepay the outstanding 1988 Certificates and to finance additional facilities for the County; WHEREAS, the County of Contra Costa Public Financing Authority (the "Authority") has agreed to issue $ aggregate principal amount of its Lease Revenue Bonds (Refunding and Various Capital Projects), 1999 Series A (the "1999 Series A Bonds"), pursuant to a Trust Agreement, dated as of February 1, 1999 (the"`Trust Agreement") by and between the Authority and U.S. Bank Trust National Association, as trustee (the "Trustee"), for the purpose of prepaying the outstanding 1988 Certificates and financing additional facilities for the County; WHEREAS, the Authority will use the proceeds of the 1999 Series A Bonds and certain other funds to pay to the County the rental due hereunder for the Facilities (as hereinafter defined), and the County will use the proceeds of the 1999 Series A Bonds to prepay the 1988 Certificates and to make a deposit into the 1999 Project Fund; WHEREAS,the Authority will lease back the Facilities to the County pursuant to the Facility Lease (Various Capital Facilities), dated as of February 1, 1999 (the "Facility Lease"), between the Authority, as lessor, and the County, as lessee (capitalized terms used herein and not otherwise defined herein have the meanings assigned thereto in the Facility Lease); and WHEREAS, under the Facility Lease, the County will be obligated to make base rental payments to the Authority for the lease of the Facilities; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows: Docssri:308198.5 ''I'll--,......................................................................................................................................................................................................... ...................................................................................................................................................................................................................... SECTION 1. Demised Premises, The County hereby leases to the Authority and the Authority hereby hires from the County, on the terms and conditions hereinafter set forth, the real property situated in the County of Contra Costa, State of California, and described in E&h-ibit attached hereto and made a part hereof(the "Facilities"), together with 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 Lease and the Trust Agreement; subject, however, to any conditions, reservations, and easements of record or known to the County and the buildings and all other facilities located thereon. The site of the Facilities (exclusive of the buildings and improvements located thereon)is sometimes referred to herein as the"Demised Premises." SECTION 2. Tenn The term of this Lease as to the Facilities shall commence on the date of recordation of this Lease in the office of the County Recorder of County of Contra Costa, State of California, or on June 1, 1999 whichever is earlier, and shall end on June 15, 2028 unless such term is extended or sooner terminated as hereinafter provided. If on June 15, 2028 the Base Rental Payments attributable to the Facilities and all other amounts then due under the Facility Lease shall not be fully paid, or if the rental or other amounts payable under the Facility Lease shall have been abated at any time and for any reason, then the term of this Lease shall be extended until ten (10) days after the Base Rental Payments attributable to the Facilities and all other amounts then due under the Facility Lease shall be fully paid, except that the term of this Lease as to the Facilities shall in no event be extended beyond June 15, 2038. If prior to June 15, 2028 the Base Rental Payments attributable to the Facilities and all other amounts then due under the Facility Lease shall be fully paid, the term of this Lease with respect to the Facilities shall end ten (10) days thereafter or upon written notice by the County to the Authority, whichever is earlier. [different terms for each asset to be added] SECTION 3. Rental The Authority shall pay to the County as and for rental hereunder the sum of $ ' being the amount of the proceeds of the 1999 Series A Bonds applied to prepay the 1988 Certificates as provided in the Trust Agreement. SECTION 4. Purpose. The Authority shall use the Facilities solely for the purpose of leasing the Facilities to the County pursuant to the Facility Lease and for such purposes as may be incidental thereto; provided, that in the event of default by the County under the Facility Lease the Authority may exercise the remedies provided in the Facility Lease. SECTION 5. Environmental Law and Regulations. (a) Definitions used in this Section 5 and in Section 6. DOCSSFI:308198.5 2 ........... .......................................................................................................... ....... .. ............................................. "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 Demised Premises. "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 se_.,lc .) (together with the regulations promulgated thereunder, "CERCLA"), the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 5901, etejc .) (together with the regulations promulgated thereunder, "RCRA"), the Emergency Planning and Community Right-to-Know Act, as amended (42 U.S.C. Section 11001, .) (together with the regulations promulgated thereunder, "Title III"), the Clean Water Act, as amended (33 U.S.C. Section 1321, elems.) (together with the regulations promulgated thereunder, "CWA"), the Clean Air Act, as amended (42 U.S.C. Section 7401, gj sem.) (together with the regulations promulgated thereunder, "CAA") and the Toxic Substances Control Act, as amended (15 U.S.C. Section 2501, el se-c .) (together with the regulations promulgated. thereunder, "TSCA"), and any state or local similar 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 defined in CERCLA, RCRA, CWA, CAA, TSCA and Title III, and the regulations promulgated pursuant thereto, and in all other Environmental Regulations applicable to the County, any of the Demised Premises or the business operations conducted by the County thereon. "Laws and Regulations" shall mean any applicable law, regulation, code, order, rule, judgment or consent agreement, including, without limitation, those relating to zoning, 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 or the Demised Premises (b) No portion of the Demised Premises 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 Demised Premises. D005sF1:308198.5 3 (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 Demised Premises which is to be performed or complied with by it. SECTION b. Environmental Compliance (a) Neither the County nor the Authority shall use or permit the Demised Premises 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 improvements on the Demised Premises and then, only in compliance with all Environmental Regulations, and any state equivalent laws and 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 refered to as "Release") or threat of Release of Hazardous Materials on, from or beneath the Demised Premises 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 of Hazardous Materials, the County shall promptly commence and perform, or cause to be commenced and performed promptly, without cost to the Trustee, the Authority or the Bond Insurer (as defined in the Trust Agreement), all investigations, studies, sampling and testing, and all remedial, removal and other actions necessary to clean up and remove all Hazardous Materials so Released, on, from or beneath the Demised Premises, 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 improvements on the Demised Premises. (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 Demised Premises 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 and invitees of all of the foregoing to comply with all Environmental Regulations with respect to the Demised Premises; 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 DocssP1:308198.5 4 Person with regard to the Release of Hazardous Materials on, from or beneath the Demised Premises, the County and the Authority shall give prompt written notice thereof to the Trustee and the Bond Insurer(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 Trustee and the Bondholders and the Bond Insurer, 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 or the Bond Insurer, 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 Demised Premises, (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 or the Bond Insurer, 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 Demised Premises, (iv) any violation of Environmental Regulations or subsection (a) or (b) hereof by it or any of its agents, tenants, employees, 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, Bondholders and the Bond Insurer 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 Facility 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 Demised Premises. The County further covenants and agrees that if for any reason this covenant proves to be incorrect, the County will either institute eminent domain proceedings to condemn the property or institute a quiet title action to clarify 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 DOCSSF t:348 t 98.5 5 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 Facility Lease, the Authority may not assign its rights under this Lease or sublet the Demised Premises and the Facilities, except pursuant to the Facility 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 Facility Lease, the Authority may assign or sell its rights;under this Lease or sublet the Demised Premises and the Facilities, without the consent of the County. SECTION 9. Right ofEntry; Easements The County reserves the right for any of its duly authorized representatives to enter upon the Demised Premises at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. 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 Demised Premises 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 Demised Premises by granting to the Authority an easement complying with the requirements of the preceding sentence from such parcel of the Demised Premises to a public street. SECTION 10. Termination The Authority agrees, upon the termination of this Lease, to quit and surrender the Demised Premises in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and the Authority further agrees that any permanent improvements and structures existing upon the Demised Premises at the time of the termination of this Lease shall remain thereon and title thereto shall vest in the County. Upon the exercise of the option to purchase set forth in Section 7.03 of the Facility Lease and upon payment of the option price required by said section, the term of this Lease shall terminate as to the portion of the Demised Premises upon which the part of the Facilities being so purchased 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 Lease, which default continues for one hundred and eighty (180) days following notice and demand for correction thereof to the Authority and the Trustee, the County may exercise any and all remedies granted by law, except DOCSSF1:308198.5 6 that no merger of this Lease and of the Facility Lease shall be deemed to occur as a result thereof; provided, however, that the County shall have no power to terminate this Lease by reason of any default on the part of the Authority if such termination would affect or impair any assignment or sublease of all or any part of the Demised Premises then in effect between the Authority and any assignee or subtenant of the Authority (other than the County under the Facility Lease). So long as any such assignee or subtenant of the Authority shall duly perform the terms and conditions of this Lease, such assignee or subtenant shall be deemed to be and shall become the tenant of the County hereunder and shall be entitled to all of the rights and privileges granted under any such assignment; provide , 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. The Authority at all times during the term of this Lease, shall peaceably and quietly have, hold and enjoy all of the Demised Premises. SECTION 13. Waiver of Personal Liability. All liabilities under this 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 Lease. No member, director, officer, agent or employee of the Authority shall at any time or under any circumstancesbe individually or personally liable under this Lease to the County or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder. The Authority and its members, directors, officers, agents, employees and assignees shall not be liable to the County or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Demised Premises, the Facilities and the 1999 Project. The County, to the extent permitted by law, shall indemnify and hold the Authority and its members, directors, officers, agents, employees and assignees, harmless from, and defend each of them against, any and all claims, liens and judgments arising from the construction or operation of the Demised Premises, the Facilities or the 1999 Project, including, without limitation, death of or injury to any person or damage to property whatsoever occurring in, on or about the Demised Premises, the Facilities regardless of responsibility for negligence, but excepting the active negligence of the person or entity seeking indemnity. 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 Demised Premises or the Facilities. DOCSSF1:308198.5 7 SECTION 15. Eminent Domain. In the event the whole or any part of the Demised Premises or 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 Facility Lease attributable to such part of the Facilities and shall be paid to the Trustee, and the balance of the award, if any, shall be paid to the County. SECTION 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Lease shall be affected thereby, and each provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. SECTION 17. 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 County of Contra Costa, County Administration Building, 651 Pine Street, Martinez, California 94553, or if to the Authority, addressed to the County in care of the County Clerk, County of Contra Costa Public Financing Authority, County Administration Building, 651 Pine Street, Martinez, California 94553, in all cases with a copy to the Trustee, or to such other addresses as the respective parties may from time to time designate by notice in writing. SECTION 18. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this lease. SECTION 19. Amendment. The Authority and the County may at any time agree to the amendment of this Lease; provide , however, that the Authority and the County agree and recognize that this Lease is entered into in accordance with the terms of the Trust Agreement and the First Supplemental 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 and the First Supplemental Trust Agreement. DOCSSF1:308198.5 8 ...............................................................................................''I'll'', ................................................................................................. ................................. SECTION 20. Execution. This Lease may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease. It is also agreed that separate counterparts of this Lease may separately be executed by the County and the Authority, all with the same force and effect as though the same counterpart had been executed by both the County and the Authority. DOCSSFI:309198.5 9 ....................................... IN WITNESS WHEREOF, the County and the Authority have caused this Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. COUNTY OF CONTRA COSTA, as Lessor By. Chair of the Board of Supervisors County of Contra Costa, State of California [SEAL] Attest: Philip J. Batchelor, Clerk of the Board of Supervisors and County Administrator By Chief Clerk Approved as to Form: By: County Counsel COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY, Lessee By Chair [SEAL] By Secretary ......... ......... ......... ......... ......... ............._.. .. _ ..... ...... ......... ........_.. ..._....._.. .......................................................... ......... ......... EXHIBIT A Description of Facilities All that certain real property situated in the County of Contra Costa, State of California, described as follows: Demised Premises Facility Location West County Detention Facility 5555 Giant Highway Richmond, California Bray Courthouse 1020 Ward Street Martinez, California County Office Building 2530 Arnold Drive Martinez, California Social Services Building 4545 Delta Fair Boulevard Antioch, California DOCSSF 1:308198.5 A-1 STATE OF CALIFORNIA ) ss. COUNTY OF CONTRA COSTA ) On 1999 before me, , Notary Public, State of California, personally appeared , personally known to me (or 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 the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (SEAL) DOCSSF i:308198.5 STATE OF CALIFORNIA ) ss. COUNTY OF CONTRA COSTA ) On , 1999 before me, , Notary Public, State of California, personally appeared , personally known to me (or 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 the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. Signature (SEAL) DOCSSF I:308198.5 WHEREAS, under the 1988 Facility Lease, the County is obligated to make base rental payments to the Corporation; WHEREAS, the County has been advised that in a favorable interest rate market, it is possible for the County to reduce the interest rates on its debt by the issuance of refunding bonds, thereby reducing the rent payable by the County under the 1988 Facility Lease or generating finds for other capital projects,resulting in significant public benefits; WHEREAS,this Board of Supervisors has heretofore determined that it would be in the best interest of the County to proceed with a lease revenue bond financing for the refunding of the outstanding 1988 Certificates and the financing of additional capital projects including improvements to the Los Medanos health facility in Pittsburg, California, construction of the Family Law Center in Martinez, California, acquisition and improvement of an office building located at 2530 Arnold Drive in Martinez, California (the "County Office Building"), improvements to the Antioch Social Services Building (the "Social Services Building") and a portion of the County's match toward construction of juvenile detentionfacilities (the "1999 Project"); WHEREAS, it is further proposed that the Authority and U.S. Bank Trust National Association, as trustee (the "Trustee"), enter into a trust agreement (the "Trust Agreement") acknowledged by the County, pursuant to which the Authority will issue not to exceed $85,000,000 aggregate principal amount of County of Contra Costa Public Financing Authority Lease Revenue Bonds (Refunding and Various Capital Projects), 1999 Series A (the "Bonds"), and will use the proceeds and certain other funds to defease the 1988 Certificates and to finance the 1999 Project; WHEREAS, it is proposed that the County enter into a Master Site Lease (the "Master Site Lease") pursuant to which it will lease the West County Detention Facility, the County Office Building, the Bray Courthouse and the Social Services Building (the "Facilities") to the Authority; WHEREAS, it is proposed that the County enter into a "Facility Lease (Various Capital Facilities)" (the "Facility Lease") pursuant to which it will lease back the Facilities from the Authority; WHEREAS, under the Facility Lease, the County would be obligated to make rental payments to the Authority which the Authority will use to pay debt service on the Bonds; WHEREAS, a public hearing regarding the proposed financing was conducted by the County on December 8, 1998; WHEREAS,notice of such hearing was published five days prior to such hearing in a newspaper of general circulation in the County; WHEREAS, an Official Statement describing the Bonds will be distributed to potential purchasers of the Bonds; DOCSSF1;308164.5 2 WHEREAS, this Board has been presented with the formof each document hereinafter referred to relating to the Bonds, and the Board has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; WHEREAS, the County has full legal right, power and authority under the Constitution and the laws of the State of California to enter into the transactions hereinafter authorized; and WHEREAS,the County expects to finance the costs of the 1999 Project on a tax- exempt basis; WHEREAS,the County expects to pay certain expenditures(the"Reimbursement Expenditures") in connection with the 1999 Project prior to the issuance of indebtedness for the purpose of financing costs associated with the 1999 Project on a long-term basis; WHEREAS,the County reasonably expects that debt obligations in an amount not expected to exceed $85,000,000 will be issued and that certain of the proceeds of such debt obligations will be used to reimburse the Reimbursement Expenditures; and WHEREAS, Section 1.150-2 of the Treasury Regulations requires the County to declare its reasonable official intent to reimburse prior expenditures for the 1999 Project with proceeds of a subsequent borrowing NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the County of Contra Costa,as follows: Section. The foregoing recitals are true and correct. Section I This resolution is made for purposes of establishing compliance with the requirements of Section 1.150-2 of the Treasury Regulations. The County hereby declares its official intent to use proceeds of indebtedness to reimburse itself for Reimbursement Expenditures. Sgctign 3. The County hereby specifically finds and declares that the actions authorized hereby constitute and are with respect to public affairs of the County and that the statements, findings and determinations of the County set forth above are true and correct and that the issuance of the Bonds by the Authority and the financing of the 1999 Project will result in demonstrable savings in effective interest rate, bond preparation, bond underwriting or bond issuance costs producing significant public benefits. tou 4. The Board of Supervisors hereby approves the issuance of the Bonds by the Authority,in an aggregate principal amount of not to exceed$85,040,000 for the refunding and defeasance of the 1988 Certificates and the financing of the 1999 Project. S=ti r 5. The form of Master Site Lease, on file with the Clerk of the Board of Supervisors, is hereby approved, and the Chair of the Board of Supervisors ("the "Chair") or the Vice Chair of the Board of Supervisors (the "Vice Chair") and the Clerk of the Board of Docssrr:308164.5 3 Supervisors(the"Clerk") or any Deputy Clerk of the Board of Supervisors (the"Deputy Clerk") or their designees are hereby authorized and directed to execute and deliver the Site Lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; rovded, howevg, that the term thereof shall not exceed June 15,2049. Sec 'on 5. The form of Facility Lease, on file with the Clerk,is hereby approved, and the Chair or the Vice Chair and the Clerk or the Deputy Clerk or their designees are hereby authorized and directed to execute and deliver the Facility Lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; Rrovi.ded hgw_—ev—eL that the maximum annual base rental payments payable under the Facility Lease shall not exceed $7,000,000 and the term of the Facility Lease (including any extensions) shall not exceed June 1 2049. Among the changes authorized to be made to such Facility Lease are such changes as are necessary in the event the County Administrator or his designee, upon consultation with the Financial Advisor, determines it is desirable to obtain municipal bond insurance. Sectign 7. The form of Trust Agreement by and between the Trustee and the Authority and acknowledged by the County, on file with the Clerk, is hereby approved. The Chair or the Vice Chair and the Clerk or the Deputy Clerk or their designees are hereby authorized and directed to execute and deliver the Trust Agreement in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Among the changes authorized to be made to such Trust Agreement are such changes as are necessary in the event the County Administrator or his designee, upon consultation with the Financial Advisor, determines it is desirable to obtain municipal bond insurance for the Bonds. Section 8. The form of Official Statement describing the Bands, on file with the Clerk, is hereby approved and the County Administrator or the Director, Capital Facilities and Debt Management, or a designee of either, is hereby authorized and directed to execute and deliver a final Official Statement in substantially said form with such additions, corrections and revisions as may be determined to be necessary or desirable by the Financial Advisor, Bond Counsel or the County Counsel's Office. The Financial Advisor is hereby authorized and directed to cause to be supplied to prospective purchasers of the Bonds copies of a preliminary official statement in such form, and to supply the purchaser of the Bonds with copies of a final official statement, completed to include, among other things the interest rate or rates, and final sale information. The County Administrator or his designee is hereby authorized and directed to execute a certificate confirming that the Preliminary Official Statement has been "deemed final„ by the County for purposes of Securities and Exchange Commission Rule 15c2-12. Secy. The proposed form of Bond Purchase Contract (the "Bond Purchase Contract") among the Authority, the County and Bear, Stearns & Co., Inc., as representative of the underwriters(the"Underwriters"), on file with the Clerk, is hereby approved and the County Administrator or the Director,Capital Facilities and Debt Management,or aidesignee of either, is hereby authorized and directed, for and in the name and on behalf of the County, to accept the offer of the Underwriters to purchase the Bonds as reflected in the Bond Purchase Contract; and to execute and deliver the Bond Purchase Contract in substantially the farm on file with the DOCSSFI:3©8164.5 4 Clerk of the Board of Supervisors, with such additions, deletions or changes 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 of the BondPurchase Contract; r vrz e`d d,that the interest rate on the Bonds shall not exceed a true interest cost of seven percent (7%) per annum and the underwriting discount (excluding any original issue discount) shall not exceed one percent(1.%). Sectiom 10. The proposed form of Letter of Instructions, by and between the County, the Authority and the Prior Trustee, on file with the Clerk, is hereby approved. The Chair or the Vice Chair and the Clerk or the Deputy Clerk or their designees are hereby authorized and directed to execute and deliver the Letter of Instructions in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Sgt ti 11. The proposed form of Continuing Disclosure Agreement, to be dated the date of issuance of the Bonds, by and among the County, the Authority and the Trustee, on file with the Clerk, is hereby approved. The County Administrator or his designee is hereby authorized and directed to execute and deliver the Continuing Disclosure Agreement in substantially said form, with such changes therein as such officer may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof;' Section 12. The officers of the County are hereby authorized',and directed,jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, but not limited to, executing or accepting all deeds, termination agreements or other documents related to the defeasance of the 1988 Certificates and the clarification of title to the 1988 Project. The Chair, the Vice Chair, the Clerk, the Deputy Clerk, the County Administrator, the Director, Capital Facilities and Debt Management of the County and the officers of the County are hereby authorized and directed to execute and deliver any and all certificates and representations, signature certificates, no- litigation certificates, tax and rebate certificates and certificates concerning the contents of the Official Statement distributed in connection with the sale of the Bonds, necessary and desirable to accomplish the transactions set forth above. DOCSSF1:34$164.5 5 .. ...1.11.1 ......... ......... ......... .._...... ......................_............................................................... _ _ _.. _ _1.111... _. ,Section 13. All actions heretofore taken by the officers and agents of the County with respect to the issuance and sale of the Bonds are hereby approved and confirmed. Section 14. This Resolution shall take effect from and after its date of adoption. PASSED AND ADOPTED this 8`h day of December, 1998. Chair of th f pard of S ervisors County of&ntra Costa,California [Seal] ATTEST: Philip J.Batchelor, Clerk of the Board of Supervisors and County Administrator Byi Deputy erk of the Board of Supervisors of the County of Contra Costa, State of California i I I I F r i f I i i i IOCSSF1:348164.5 6 i I i i I CLERK'S CERTIFICATE I, Ann C.PrxeI I; , Deputy Clerk of the Board of Supervisors of the County of Contra Costa,hereby certify as follows: The foregoing is a full, true and correct copy of a resolution duly adopted at a regular meeting of the Board of Supervisors of said County duly and regularly held at the regular meeting place thereof on the 8th day of December, 1998, of which meeting all of the members of said Board of Supervisors had due notice and at which a majority thereof were present; and at said meeting said resolution was adopted by the following vote: AYES: Supervisors Uilkema, Gerber, DeSaulnier, Canciamilla and Rogers NOES: None An agenda of said meeting was posted at least 72 hours before said meeting at 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. I have carefully compared the same with the original minutes of said meeting on file and of record in my office; the foregoing resolution is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. WITNESS my hand and the seal of the County of Contra Costa this 8th day of December, 1998. (11MO-4JAIJP�0 ' [Seal) Deputy Clerk of the Board of Supervisors of the County of Contra Costa, State of California DOCSSFI:308164.5 _....._. ......... ......... ......... .._...... ......... ......... _ ....._ ........... . ......... ......... ......... ......... ......... ......... ......... ......... ................... _.. _.... ...................... X1 . 3 s RESOLUTION NO. , /619 OF THE BOARD OF DIRECTORS OF THE COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $85,000,000 COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY LEASE REVENUE BONDS (REFUNI)ING AND VARIOUS CAPITAL PROJECTS), 1999 SERIES A, APPROVING FORMS OF AND EXECUTION OF A FACILITY LEASE (VARIOUS CAPITAL FACILITIES), A MASTER SITE LEASE, A TRUST AGREEMENT, A LETTER OF INSTRUCTIONS, A BOND PURCHASE CONTRACT AND A CONTINUING DISCLOSURE AGREEMENT; APPROVING FORM OF AND DISTRIBUTION OF THE OFFICIAL STATEMENT FOR SAID BUNDS; AND AUTHORIZING TAKING OF NECESSARY ACTIONS AND EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES. WHEREAS, the County of Contra Costa (the "County) and the County of Contra Costa Redevelopment Agency(the"Agency)have heretofore executed a Joint Exercise of Powers Agreement, dated as of April 7, 1992 (the "Joint Powers Agreement"), which Joint Powers Agreement creates and establishes the County of Contra Costa Public Financing Authority (the "Authority"); and WHEREAS, pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California(the "Marks-Roos Local Bond Pooling Act of 1985") and the Joint Powers Agreement, the Authority is authorized to issue bondsfor financing public capital improvements whenever there are significant public benefits; and WHEREAS, pursuant to a Trust Agreement dated as of July 1, 1988 (the "Trust Agreement"), among U.S. Bank Trust National Association, as successor trustee (the "Prior Trustee"), the Contra Costa County Public Facilities Corporation (the "Corporation") and the County, the County has heretofore caused the execution and delivery of the Contra Costa County 1988 Certificates of Participation (the "1988 Certificates"), in the aggregate principal amount of $61,690,000, for the refinancing of the costs of the acquisition and improvement of various County facilities(the"1988 Project');and WHEREAS,pursuant to a lease agreement,dated as of July 1, 1988,by and between the Corporation and the County (the "1988 Facility Lease"), the Corporation has leased the 1988 Project to the County;and WHEREAS, under the 1988 Facility Lease, the County is obligated to make base rental payments to the Corporation;and WHEREAS,the Authority has been advised that in a favorable'interest rate market it is possible for the County to reduce the interest rates on its debt by the issuance of refunding bonds, thereby reducing the rent payable by the County under the 1988 Facility Lease or providing for the financing of additional capital projects,resulting in significant public benefits; and. oocssrI:308168.5 WHEREAS, the Board of Supervisors has heretofore determined that it would be in the best interest of the County to proceed with a lease revenue financing for the refunding of the outstanding 1988 Certificates and the financing of additional capital projects (the "1999 Project"); WHEREAS, in order to achieve such significant public benefits, the Authority desires to assist the County in refunding the 1988 Certificates and financing the 1999 Project by the issuance and sale of its County of Contra Costa Public Financing Authority Lease Revenue Bonds (Refunding and Various Capital Projects), 1999 Series A (the `Bonds"), pursuant to a Trust Agreement, dated as of February 1, 1999 (the "Trust Agreement"), between the Authority and U.S. Bank Trust National Association, as trustee(the"Trustee"); and WHEREAS, a public hearing regarding the proposed financing was conducted by the County on December 8, 1998; WHEREAS,notice of such hearing was published five days prior to such hearing in a newspaper of general circulation in the County; WHEREAS, an Official Statement (the "Official Statement") describing the Bonds will be distributed to potential purchasers of the Bonds; and WHEREAS, pursuant to a Letter of Instructions to the Prier Trustee from the County and the Authority, dated as of February 1, 1999 (the "Letter of Instructions"), certain proceeds of the Bonds will be deposited into an escrow fund (the "Escrow Fund") and irrevocably pledged to repay the Base Rental under the 1988 Facility Lease; and WHEREAS, as consideration for such deposit in the Escrow Fund, the 1988 Project vests in the County; and WHEREAS, it is proposed that the County enter into a Master Site Lease (the "Master Site Lease") pursuant to which it will lease the West County Detention Facility, the Bray Courthouse,the Social Services Building and a County Office Building to be acquired (the "Facilities") to the Authority in consideration for the Authority's financing of the 1999 Project; and WHEREAS, it is proposed that the Authority enter in a Facility Lease (Various Capital Facilities)with the County(the"Facility Lease"),pursuant to which it will lease back the Facilities to the County; and WHEREAS, under the Facility Lease, the County will be obligated to mare base rental payments to the Authority which the Authority will use to pay debt service on the Bonds; and WHEREAS, all rights to receive such base rental payments will be pledged by the Authority to the Trustee under the Trust Agreement;and DOCSSFI:308188.5 2 WHEREAS, this Board has been presented with the form of the Official Statement, and the proposed forms of the Facility Lease, the Trust Agreement, the Site Lease, the Letter of Instructions and a Continuing Disclosure Agreement;and WHEREAS, the Authority has full legal right, power and authority under the Constitution and the laws of the State of California to enter into the transactions hereinafter authorized, NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the County of Contra Costa Public Financing Authority, as follows: SeMon I. The foregoing recitals are true and correct and the Authority hereby so finds and determines. Section The issuance and sale of the County of Contra Costa Public Financing Authority Lease Revenue Bonds (Refunding and Various Capital Projects), 1999 Series A, in the aggregate principal amount of not to exceed$85,000,000,is hereby authorized and approved. Section 3 The proposed form of Master Site Lease, on file with the Secretary of the Board of Directors, is hereby approved and the Chair of the Board of Directors and the Secretary of the Board of Directors, or their designees are hereby authorized and directed to execute and deliver the Site Lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 4. The proposed form of Facility Lease, on file with the Secretary of the Board of Directors, is hereby approved and the Chair of the Board of Directors and the Secretary of the Board of Directors, or their designees are hereby authorized and directed to execute and deliver the Facility Lease in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. e do . The form of Trust Agreement, on file with the Secretary of the Board of Directors, is hereby approved. The Chair of the Board of Directors and the Secretary of the Berard of Directors, or their designees are hereby authorized and directed to execute and deliver the Trust Agreement in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Among the changes authorized to be made to such Trust Agreement are such changes as are necessary to accommodate municipal bond insurance that the Executive Director or his designee,upon consultation with the Financial Advisor,determines it is desirable to obtain. Sergi. The proposed form of Bond Purchase Contract (the `Bond Purchase Contract") among the Authority, the County and Bear, Stearns & Co., Inc.,'as representative of the underwriters (the "Underwriters"), on file with the Secretary of the Board of Directors, is hereby approved. The Chair of the Board of Directors or the Executive Director of the Authority, or a designee of either, is hereby authorized and directed, for and in the name and on behalf of the Authority, to accept the offer of the Underwriters to purchase the Bonds as reflected in the Bond Purchase' 'Contract; and to execute and deliver the Bond Purchase Contract in IW,SSF1.368168.5 3 _.. ............................. ....._... ......... _ .. . .......... .__._.... ......... ......... ......... .._...... ......... ......... ......... __....... _.__.. .......... ......... . ........ ......... substantially the form on file with the Secretary of the Board of Directors, with such additions, deletions or changes 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 of the Bond Purchase Contract; provided, that the interest rate on the Bonds shall not exceed a true interest cost of seven percent (7%) per annum and the underwriting discount (excluding any original issue discount)shall not exceed one and one percent(1.0°10). ,Section 7. The form of Preliminary Official Statement describing the Bonds, on file with the Secretary of the Board of Directors, is hereby approved. The Underwriter is hereby authorized and directed to cause to be supplied to prospective purchasers of tate Bonds copies of a preliminary official statement in such form,with such additions,corrections and revisions as may be determined to be necessary or desirable by the Financial Advisor, the Underwriters,Bond Counsel, or the County Counsel's Office, and to supply the purchaser for the Bonds with copies of a final official statement, completed to include,among other things,the interest rate or rates,and final sale information. The Chair of the Board of Directors or the Executive Director of the Authority, or a designee of either,is authorized to certify on behalf of the Authority that the preliminary form of the official statement is deemed final as of its date, within the meaning of Rule I5c2-12 promulgated under the Securities Exchange Act of 1934 (except for the omission of certain pricing, rating and related information as permitted by said Rule). The Chair of the Board l of Directors or the Executive Director of the Authority, or a designee of either, is hereby authorized and directed to execute and deliver a final Official Statement in substantially said form,with such additions thereto or changes therein as the Financial Advisor, the Underwriters, County Counsel's Office or Bond Counsel,may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. Section 8. The proposed form of Letter of Instructions(the"Letter of instructions"), from the County and the Authority to the Prior Trustee on file with the Secretary of the Board of Directors,is hereby approved. The Chair of the Board of Directors and the Secretary of the Board of Directors or their designees are hereby authorized and directed to execute and deliver the Letter of Instructions in substantially said form, with such changes therein as such officers may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. SMILOM 2. The proposed form of Continuing Disclosure Agreement, dated as of February 1, 1999 (the "Continuing Disclosure Agreement"), by and between the County and the Trustee,on file with the Secretary of the Authority,is hereby approved. SgWon 10. The officers of the Authority are hereby authorized and directly,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. If the Chair of the Board of Directors or the Secretary of the Board of Directors is unavailable for the execution of the documents authorized to be executed hereby, the Vice Chair or Assistant Secretary of the Board of Directors may execute said documents in lieu thereof. The Director, Capital Facilities and Debt Management, of the County is hereby authorized on behalf of the Authority to execute any Written Request or Certificate of the Authority appropriate or necessary to be delivered by the Authority under the Trust Agreement or other documents authorized hereunder. The Chair of the Board of Directors, DocssFI:308168.5 4 _._.... ......._. ......... ... ..... ............ ......... ......... ......... ......... ......... ........ . ......... . __1111 .. ......... ......... . ........ ......... .............................................. the Secretary of the Board of Directors, the Executive Director of the Authority or their designees and the officers of the Authority be and they are hereby authorized and directed to execute and deliver any and all certificates and representations, signature certificates, no- litigation certificates,tax and rebate certificates, any documents relating to the conveyance of the 1988 Project to the County by the Corporation and the acceptance thereof, and certificates concerning the contents of the Official Statement distributed in connection with the sale of the Bonds, necessary and desirable to accomplish the transactions set forth above. Orrick, Herrington& SutcliffeLLP, as bond counsel to the Authority, is hereby authorized, on behalf of the Authority,to file subscriptions for State and Local Government Securities as may be required in connection with the refunding of the 1988 Certificates. UOC'SSF1:308368.5 $ _.._._. ......... ......... ......... ........ . ........ ........_.. ...._.... ......... ......... .._...... ......... ......... ......... ................. ......... ......... . ........ ......... Section 11. All actions heretofore taken by the officers and agents of the Authority with respect to the sale and issuance of the Bonds are hereby approved and confirmed. Section 12. This Resolution shall take effect from and after its date of adoption. PASSED AND ADOPTED this 8th clay of December, 1998. AYES: Supervisors Uilkema, Gerber, DeSaulnier, Ganciamilla and Rogers NOES: None ABSENT: None ABSTAIN: None Chair of a Board f Directors Secretary of the Board of Directors DOCCssFi:308168.5 6 CERTIFICATE OF THE SECRETARY OF THE COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY I, Phil BatchelorSecretary of the County of Contra. Costa Public Financing Authority (the Authority"), hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted at a meeting of the Board of Directors of said Authority duly and regularly held in Martinez, California, on December 8, 1998 of which meeting all of the members of said. Authority had due notice. I further certify that I have carefully compared the foregoing copy with the original minutes of said meeting on file and of record in my office; that said copy is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes; and that said resolution has not been amended,modified,rescinded or revoked in any manner since the date of its adoption,and the same is now in full force and effect. I further certify that an agenda of said meeting was posted at least 72 hours before said meeting at a location in Martinez,California, freely accessible to the public and a brief general description of the resolution to be adopted at said meeting appeared on said agenda. IN WITNESS WHEREOF, I have executed this certificate hereto as of this 8th day of December, 1998. By Secretary oocssrI:30x1 bs.s ... ...... ...._ .... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... OH&S DRAFT 12/1/98 Recording requested by and return to: COUNTY OF CONTRA COSTA c/o Orrick, Herrington & Sutcliffe LLP Old Federal Reserve Bank Building 400 Sansome Street San Francisco, California 94111 Attention: Mary A. Collins,Esq. Free Recording Requested Pursuant to California Government Code Section 6103 FACILITY LEASE (VARIOUS CAPITAL FACILITIES) by and between COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY and the COUNTY OF CONTRA COSTA Dated as of February 1, 1999 TABLE OF CONTENTS ~ . Page ARTICLE DEFINITIONS-------.-----...--..--.--..----------.2 SECTION 1.01. Definitions............................................................................................. 2 ARTICLE II LEASE OF DEMISED PREMISES AND PROJECT; TERM -------- 5 SECTION 2.01. Lease ufFacilities ................................................................................. 5 SECTION 2.02. Term; Occupancy--.--.---.---.------..,--.—...---.—.. 5 SECTION 2.03. Substitution........................................................................................... 5 ARTICLE III RENTALPAYMENTS; USE OF PROCEEDS...............................................6 SECTION 3.01. Base Rental Payments----.—..---.—..—.-.-.—.—.—.—.----.- 6 SECTION 3.02. Additional Payments-------..—.--.--...--~---.----.- 7 SECTION 3.03. Fair Rental Value .................................................................................. 8 SECTION 3.04. Payment Provisions............................................................................... # SECTION 3.05. Appropriations Covenant...................................................................... 9 SECTION 3.06. Rental Abatement.................................................................................. A SECTION 3.07. Use ofProceeds................................................................................... l0 SECTION 3.08. Pledge of Courthouse Funds............................................................... l0 ARTICLE IV ' �2�� 10 MAINTENANCE; ALTERATIONS ^__^-^^^~^.� —.---..—.---... SECTION 4.01. Maintenance and Utilities ................................................................... lA SECTION 4.02. Changes to the Project......................................................................... Il SECTION 4.03. Installation ofCounty's Equipment-----.--...--.-----.—. 11 ARTICLE V INSURANCE--.---.----.---_--_.--..-----_—.---.---.- ll SECTION 5.01. Fire and Extended Coverage Insurance............................................... Il SECTION 5.02. Liability Insurance .............................................................................. l3 SECTION 5.03. Rental Interruption mzUse and OccupancyInsurance ........................ l3 SECTION 5/4' Worker's Compensation...................................................................... }] SECTION 5.05. Title Insurance..................................................................................... I4 SECTION 5.06. Insurance Proceeds; Form OfPolicies................................................. 14 ARTICLE VI DEFAULTS AND REMEDIES...................................................................... I5 SECTION 6'0I. Defaults and Remedies........................................................................ 15 SECTION6.02. Waiver................................................................................................. l0 ARTICLE VII EMINENT DOMAIN; PREPAYMENT......................................................... I8 SECTION 7.01. Eminent Domain................................................................................. I8 SECTION 7.02. Prepayment----_----._----.--......-..-._-..--.---... l8 noca&F/:]00]03.5 z ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ... _. . _. .. . ......... ......... ......... ......... ......... ......... TABLE OF CONTENTS (continued) Page SECTION 7.03. Option to Purchase; Sale of Personal Property...................................20 ARTICLE VIII COVENANTS.................................................................................................21 SECTION8.01. Right of Entry...................................................................................... 21 SECTION8.02. Liens....................................................................................................21 SECTION 8.03. Quiet Enjoyment.................................................................................21 SECTION 8.04. Authority Not Liable...........................................................................21 SECTION 8.05. Assignment and Subleasing................................................................22 SECTION 8.06. Title to Facilities .................................................................................22 SECTION 8.07. Tax Covenants.....................................................................................22 SECTION 8.08. Continuing Disclosure............................................. ........................23 SECTION 8.09. Taxes...................................................................................................23 SECTION 8.10. Authority's Purpose ............................................................................24 SECTION 8.11. Purpose of Lease.................................................................................24 ARTICLE IX DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE FACILITIES............................................................................24 SECTION 9.01. Disclaimer of Warranties ....................................................................24 SECTION 9.02. Vendor's Warranties...........................................................................24 SECTION 9.03. Use of the Facilities.............................................................................25 ARTICLE X MISCELLANEOUS .......................................................................................25 SECTION 10.01. LawGoverning....................................................................................25 SECTION 10.02.Notices.................................................................................................25 SECTION 10.03. Validity and Severability.....................................................................26 SECTION 10.04. Net-Net-Net Lease ...................................................._.........................26 SECTION 10.05. Section Headings.................................................................................26 SECTION 10.06.Amendment or Termination................................................................26 SECTION 10.07. Execution.............................................................................................26 EXHIBIT A The Facilities......................................................................................................A-I EXHIBIT B Base Rental Payment Schedule(Aggregate for 1999 Series A Bonds).............B-1 EXHIBITC 1999 Project.......................................................................................................C-1 DOCSSF 1:308303.5 11 _. _. ........1.1.11 ....._._. ......._. ..............._....... ......... ......... ......... ......... ......... ......... ......... ......... ......... .................... ... ......_... ......... . ........ 1111..... FACILITY LEASE (VARIOUS CAPITAL FACILITIES) This Facility Lease, dated as of February 1, 1999, by and between COUNTY OF CONTRA COSTA PUBLIC FINANCING AUTHORITY (the "Authority"), a joint powers authority duly organized and existing under and by virtue of the laws of the State of California, as lessor, and the COUNTY OF CONTRA COSTA (the "County"), a body corporate and politic and a political subdivision of the State of California, as lessee; WITNESSETH : In consideration of the mutual covenants herein, the parties hereto agree as follows: WHEREAS, the County has determined to finance various capital projects of the County as set forth in Exhibit C hereto (the"1999 Project"); WHEREAS, $61,690,000 aggregate principal amount of certificates of participation (the "Prior Certificates") were executed and delivered pursuant to a Trust Agreement, dated as of July 1, 1988, by and among the County, the Contra Costa County Public Facilities Corporation (the "Corporation") and U.S. Bank Trust National Association, as successor trustee (the "Prior Trustee"), for the purpose of refinancing the acquisition of and improvements to the Auditor-Controllers Building, District Attorneys Building, Bray Courthouse, Public Defenders Building, Social Services Building, County Administration Building, and Sheriff Patrol Investigation and Communication Administration Building, all in the City of Martinez, California, the Municipal Court Building in the City of Concord, California, the County Library Building in the City of Pleasant Hill, California, the East County Social Services Building in the City of Antioch, California, and various equipment including cars, trucks, computers and communications equipment and the Countywide Integrated Telecommunication Network System(the"1988 Project"); WHEREAS the Corporation acquired the 1988 Project and pursuant to a lease agreement, dated as of July 1, 1988 (the"Prior Facility Lease"), between the(Corporation and the County, which lease or memorandum thereof was recorded in the office of the County Recorder of the County of Contra Costa on July 26, 1988 under Recorder's Serial Number 88-126419, the Corporation leased the 1988 Project to the County; WHEREAS, pursuant to an assignment agreement, dated as of July 1, 1988, between the Corporation and the Prior Trustee, the lease payments made by the County under the Prior Facility Lease ("Prior Base Rental") were assigned to the Prior Trustee to pay the principal and interest represented by the Prior Certificates; WHEREAS, the Authority intends to assist the County in refinancing the acquisition and improvement of the 1988 Project and financing the 1999 Project by issuing the County of Contra Costa Public Financing Authority Lease Revenue Bonds (Refunding and Various Capital Projects), 1999 Series A (the"1999 Series A Bonds"); DOCSSF 1:308303.5 ..... ....... .......................................................................................................................................................................................... ................. ............................................ WHEREAS,pursuant to the Letter of Instructions to the Prior Trustee, dated as of February 1, 1999, certain proceeds of the 1999 Series A Bonds and certain other funds were deposited into an escrow fund (the "Escrow Fund") and irrevocably pledged to repay the Prior Base Rental and the Prior Certificates; WHEREAS, upon such deposit the 1988 Project will vest in the County; WHEREAS, the County will lease to the Authority certain capital assets of the County(the"Facilities")pursuant to the Master Site Lease; WHEREAS, the County will lease back the Facilities from the Authority pursuant to the terms of this Facility Lease; WHEREAS, the Authority intends to assist the County by financing the construction, renovation and acquisition for the County of certain other County facilities together with site development, landscaping, utilities, fixtures, furnishings, equipment, improvements and appurtenant and related facilities (the "Subsequent Phases of the Project," and collectively with the 1988 Project and the 1999 Project, the"Project"); and WHEREAS, under this Facility Lease, the County will be obligated to make base rental payments to the Authority for the lease of the Facilities and such other facilities as may from time to time be leased hereunder; NOW, THEREFORE, in consideration of the mutual covenants herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Trust Agreement. Additional Payments The term "Additional Payments" means all amounts payable to the Authority or the Trustee or any other person from the County as Additional Payments pursuant to Section 3.02 hereof. Architect The. term "Architects" means the architects, engineers or designers of any Subsequent Phase of the Project, and any successor or successors to any thereof. DOCSSFI:308303.5 2 .............................. Authority The term "Authority" means (i) County of Contra Costa Public Financing Authority, acting as lessor hereunder, (ii) any surviving, resulting or transferee entity; and (iii) except where the context requires otherwise, any assignee of the Authority. Base Rental Payments The term "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 Pavment Schedule The term "Base Rental Payment Schedule" means the schedule of Base Rental Payments payable to the Authority from the County pursuant to Section 3.01hereof and attached hereto as Exhibit B-II. Contractors The term "Contractors" means the construction contractor for any portion of the 1999 Project or any Subsequent Phase of the Project and any successor or successors to any thereof. Corporation The term "Corporation" means Contra Costa County Public Facilities Corporation. Courthouse Funds The term "Courthouse Funds" means the Contra Costa County Criminal Justice Facilities Construction Fund and the Contra Costa County Courthouse' Construction Fund established by the County by resolutions of the Board of Supervisors of the County adopted on pursuant to Sections 76000 gt Sec. of the Government Code of the State of California. Coun The term "County" means the County of Contra Costa, California, a body corporate and politic and a political subdivision of the State of California. Demised Premises The term "Demised Premises" means that certain real property situated in the County of Contra Costa, State of California, described in Exhibit A attached hereto and made a part hereof, together with any additional real property added thereto by any supplement or amendment hereto; subject, however, to any conditions, reservations, and easements of record or known to the County. DOCSSFI:308303.5 3 Event of Default The term "Event of Default" shall have the meaning specified in Section 6.01 hereof. Facilities The term "Facilities" shall mean the Demised Premises, the West County Detention Facility, the Bray Courthouse, the Social Services Building and the County Office Building or any County buildings, other improvements and facilities, added thereto or substituted therefor, or any portion thereof, in accordance with this Facility Lease and the Trust Agreement as set forth more fully in Exhibit A hereto; subject, however, to any conditions, reservations and easements of record known to the County. Lease The term "Lease" means this lease, as originally executed and recorded or as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof and of the Trust Agreement. 1988 Project The term "1988 Project" means the Auditor-Controllers Building, District Attorneys Building, Bray Courthouse, Public Defenders Building, Social Services Building, County Administration Building, and Sheriff Patrol Investigation and Communication Administration Building, all in the City of Martinez, California, the Municipal Court Building in the City of Concord, California, the County Library Building in the City of Pleasant Hill, California, the East County Social Services Building in the City of Antioch, California, and various equipment including cars, trucks, computers and communicationsequipment and the Countywide Integrated Telecommunication Network System. 1999 Project The term"1999 Project"means the capital projects described in Exhibit C hereto. 1999 Series A Bonds The term " 1999 Series A Bonds" means the Bonds designated "1999 Series A„ issued by the Authority under and pursuant to Section 2.01 of the Trust Agreement. Phase of the Prglect The term "Phase of the Project" means the 1988 Project, the 1999 Project or such Subsequent Phase of the Project to which reference is made. DOCSSF 1:308303.5 4 ............I................................................I.....1.1.11.111.11....... .................................................................................................................................................................................................. ................. Rental Payment Period The term "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. Trust Agreement The term "Trust Agreement" means the trust agreement, dated as of February 1, 1999, by and among the Trustee, the Authority and the County, pursuant to which the Trustee will execute and deliver the 1999 Series A Bonds, as originally executed or as it may from time to time be supplemented, modified of amended by a Supplemental Trust Agreement entered into pursuant to the provisions of the Trust Agreement. ARTICLE 11 LEASE OF DEMISED PREMISES AND PROJECT; TERM SECTION 2.01. Lease of Facilities. The Authority hereby leases to the County and the County hereby leases from the Authority the Facilities, including the Demised Premises, subject, however, to all easements, encumbrances, and restrictions that exist at the time of the commencement of the term of this Lease. The County hereby agrees and covenants during the term of this Lease that, except as hereinafter provided, it will use the Facilities for public and County purposes so as to afford the public the benefits contemplated by this Lease. SECTION 2.02. Term-, Occupancy. The term of this Lease shall commence on the date of recordation of this Lease in the office of the County Recorder of Contra Costa County, State of California, or on June 1, 1999 whichever is earlier, and shall end on June 1, 2028, unless such term is extended or sooner terminated as hereinafter provided. If on June 1, 2028, the Bonds shall not be fully paid, or if the rental payable hereunder shall have been abated at any time and for any reason, then the term of this Lease shall be extended until ten (10) days after all Bonds shall be fully paid, except that the term of this Lease shall in no event be extended beyond June 1, 2038. If prior to June 1, 2038, all Bonds shall be fully paid, or provision therefor made, the term of this Lease shall end ten (10) days thereafter or ten (10) days after written notice by the County to the Authority, whichever is earlier. [different terms for each asset to be added] SECTION 2.03. ,Substitution. The County and the Authority may substitute real property as part of the Facilities for purposes of the Facility Lease,but only after the County [shall have received the written consent of the Bond Insurer and] shall have filed with the Authority and the Trustee, with copies to each rating agency then providing a rating for the Bonds, all of the following: (a) Executed copies of the Facility Lease or amendments thereto containing the amended description of the Facilities, including the Demised Premises, including the legal description of the Demised Premises as modified if necessary. DOCSSFI:308303.5 5 _. (b) A Certificate of the County with copies of the Facility Lease or a 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, evidencing that the annual fair rental value of the Facilities which will constitute the Facilities after such substitution will be at least equal to 100% of the maximum amount of Base Rental Payments becoming due in the then current year ending June 1 or in any subsequent year ending June 1. (d) A Certificate of the County stating that, based upon review of such instruments, certificates or any other matters described in such Certificate of the County, the County has good merchantable title to the Facilities which will constitute the Facilities after such substitution. The term "Good Merchantable Title" shall mean such title as is satisfactory and sufficient for the needs and operations of the County. (e) A Certificate of the County stating that such substitution does not adversely affect the County's use and occupancy of the Facilities. (f) An Opinion of Counsel (as such term is defined in the Trust Agreement) stating that such amendment or modification (i) is authorizedor permitted by the Constitution and laws of the State and this Trust Agreement; (ii) complies with the terms of the Constitution and laws of the State and of this Trust Agreement; (iii)will, upon the execution and delivery thereof, be valid and binding upon the Authority and the County; and(iv) will not cause the interest on the Bonds to be included in gross income for federal income tax purposes. 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, including the Demised Premises (subject to the provisions of Sections 3.04, 3.06 and ',7.01 of this Lease) annual rental payments with principal and interest components, the interest components being payable semi-annually, in accordance with the Rental Payment Schedule attached hereto as Exhibit B-II and made a part hereof. Base Rental Payments shall be calculated on an annual basis, for the twelve-month periods commencing on June 1 and ending on May 31, and each annual Base Rental shall be divided into two interest components, due on June 1 and December 1 of each rental payment period, and one principal component, due on June 1 of each rental payment period, except that the first Base Rental Payment period commences on the date of recordation of the Facility Lease and ends on May 31, 1999. Each Base Rental Payment installment shall be payable on the fifteenth (15th) day of the month immediately preceding its due date and any interest or other income with respect thereto accruing prior to such due date. 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 DOCSSFi 308303.5 6 ....... _........ ......... ......... ........... ...... .... ........._. .._...... ......_. ......... ......... ......... ......... ......... ......... ......... ............... .... ..... ..._ ......... ......... .. ....... ......... months. Each annual payment of Base Rental (to be payable in installments as aforesaid) shall be for the use of the Facilities, including the Demised Premises. If the term of this Lease shall have been extended pursuant to Section 2.02 hereof, Base Rental Payment installments shall continue to be due on June 1 and December 1 in each year, and payable prior thereto as hereinabove described, continuing to and including the date of termination of this Lease. Upon such extension of this Lease, the Countyshall deliver to the Trustee a Certificate setting forth the extended rental payment schedule, which schedule shall establish the principal and interest components of the Base Rental Payments',so that the principal components will in the aggregate be sufficient to pay all unpaid principal components with interest components sufficient to pay all unpaid interest components plus interest on the extended principal components at a rate equal to the highest rate of interest applicable to the Base Rental. If at any time the Base Rental hereunder shall not have been paid by the County, for any reason whatsoever, and no other source of funds shall have been available to make the payments of principal and interest on the Bonds, the principal and interest components of the Base Rental shall be recalculated by the County to reflect interest on the unpaid principal components at the rate or rates specified in the Trust Agreement, and a revised Exhibit B-II to this Facility Lease shall be prepared by the County and supplied to the Authority and the Trustee reflecting such reallocation. SECTION 3.02. Additional Payments. The County shall also pay such amounts (herein called the "Additional Payments") as shall be required by the Authority for the payment of all costs and expenses incurred by the Authority in connection',with the execution, performance or enforcement of this Lease or any assignment hereof, the 'frust Agreement, its interest in the Demised Premises 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 Demised Premises, the Facilities and the Project, including, without limiting the generality of the foregoing, salaries and wages of employees, all expenses, compensation and indemnification of the Trustee payable by the Authority under the Trust 'Agreement, fees of auditors, accountants, attorneys or architects, and all other necessary administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Certificates or of the Trust Agreement; but not including in 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 or the Trustee from time to time, together with a statement certifying that the amount billed has been paid by the Authority or by the Trustee on behalf of the Authority, for one or more of the items above described, or that such amount is then payable by the Authority or the Trustee for such items. Amounts so billed shall be paid by the County to the billing party within 30 days after receipt of the bill by the County. The County reserves the right to audit billings for Additional Payments although exercise of such right shall in no way affect the duty of the County to make full and timely payment for all Additional Payments. The Authority has issued and may in the future issue bonds and has entered into and may in the future enter into leases to finance facilities other than the Facilities and the Project. The administrative costs of the Authority shall be allocated among said facilities and the DOCSSFI 3il$343.5 7 _... 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 project of the Authority shall be equitably allocated among all such projects, including the Project, in accordance with sound accounting practice. In the event of any question or dispute as to such allocation, the written opinion of an independent 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 Assistant County Administrator - Finance of the County, or by a Director, CapitalFacilities and Debt Management of the County, or a duly authorized representative of the County, endorsed thereon, in making any determination that costs are payable as Additional Payments hereunder, and shall not be required to make any investigation as to whether or not the items so requested to be paid are expenses of operation of the Facilities. SECTION 3.03. Fair Rental Value. Such payments of Base Rental Payments for each rental period during the term of this Lease shall constitute the total rental for said rental period and shall be paid by the County in each rental payment period for and in consideration of the right of use and occupancy of, and continued quiet use and enjoyment of, the Facilities, including the Demised Premises during each such period for which said rental is to be paid. The parties hereto have agreed and determined that such total (excluding Defeased Base Rental Payments) rental payable for each twelve-month period beginning June 1 represents the fair rental value of the Facilities, including the Demised Premises for each such period. In making such determination, consideration has been given to costs of ',acquisition, design, construction and financing of the Facilities, other obligations of the parties under this 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 to or upon the order of the Authority at the corporate trust office of the Trustee in Los Angeles, California, or such other place as the Authority shall designate. Any such installment of rental accruing hereunder which shall not be paid when due and payable under the terms of this Lease shall bear interest at the rate of twelve percent (12%) per annum, or such lesser rate of interest as may be permitted by law, from the date when the same is due hereunder until the same shall be paid. Notwithstanding any dispute between the Authority and the County, the County shall make'all rental payments when due without deduction or offset of any kind and shall not withhold any rental payments pending the final resolution of such dispute. In the event of a determination that the County was not liable for said rental payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent rental payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the County with the Trustee pursuant to this Section on any date shall be reduced to the extent of amounts on DOCSSF 1:308303.5 8 deposit in the Base Rental Payment Fund, the Interest Fund or the Principal Fund and available therefor. All payments received shall be applied first to the interest components of the Base Rental Payments due hereunder, then to the principal components of the Base Rental Payments due hereunder and thereafter to all Additional Payments due hereunder, but no such application of any payments which are less than the total rental due and owing shall be.deemed a waiver of any default hereunder. Rental is subject to abatement as provided in Section 3.06. Nothing contained in this Lease shall prevent the County from making from time to time contributions or advances to the Authority for any purpose now or hereafter authorized by law, including the making of repairs to, or the restoration of, the Facilities in the event of damage to or the destruction of the Facilities. SECTION 3.05. An mpriati ns 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 and the Trustee within sixty (60) days of adoption of the County budget a Certificate of the County stating that the budget as adopted appropriates all moneys necessary for the payment of Base Rental Payments and Additional Payments hereunder. The covenants on the part of the County herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the County to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the County to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the County. The Authority and the County understand and intend that the obligation of the County to pay Base Rental Payments and Additional Payments hereunder shall constitute a current expense of the County and shall not in any way be construed to be a debt of the County in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by the County, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or moneys of the County. 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 Lease shall not create an immediate indebtedness for any aggregate payments which may become due hereunder in the event that the term of the Lease is continued. The County has not pledged the full faith and credit of the County, the State of California or any agency or department thereof to the payment of the Base Rental Payments and Additional Payments or any other payments due hereunder. SECTION 3.06. Rental Abatement. The Base Rental Payments (excluding Defeased Base Rental Payments) and Additional Payments shall be abated proportionately, boCSSF 1:308303.5 9 _..... 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, in the proportion in which the initial cost of that portion of the Facilities rendered unusable bears to the initial cost of the whole of the Facilities, including the Demised Premises. Such abatement shall continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction. In the event of any such damage or destruction, this Lease shall continue in full force and effect and the County waives any right to terminate this Lease by virtue of any such damage or destruction. SECTION 3.07. Use of Proceeds. The parties hereto agree that the proceeds of the 1999 Series A Bands will be used to finance the 1999 Project and to refinance the 1988 Project by defeasing the Prior Certificates, to establish the Reserve Fund referred to in the Trust Agreement and to pay the costs of issuing the 1999 Series A Bonds and incidental and related expenses. SECTION 3.08. Pledge of Courthouse, Funds. The County agrees that, subject to applicable law, it will utilize moneys in the Courthouse Funds to pay the Authority in immediately available funds (from amounts on hand from time to time in the Courthouse Funds) (i) the amount due as Base Rental attributable to the Courts Project or (ii) the amount necessary to replenish the portion of the Reserve Fund allocable to the Courts Project. The County's obligation to pay amounts available in the Courthouse Funds for lease of the Courts Project began with the construction of the Bray Courthouse, and shall continue hereunder until Bonds allocable to the Courts Project are retired and shall not be subject to the abatement specified in Section 3.06. Notwithstanding the foregoing, nothing shall prevent the County from utilizing the Courthouse Funds for any other lawful purpose after the annual amount of Base Rental allocable to the Courts Project has been funded, the obligation hereunder being to ',utilize any moneys therein available, pursuant to applicable law, including the restricted purposes for which the respective funds may be expended, to pay the Base Rental attributable to the Courts Project when the same is otherwise due and payable or to replenish the Reserve Fund as provided above, but there shall be no obligation on the County to set aside moneys in such fund in each fiscal year in excess of the amount needed in such fiscal year to pay such portion of the Base Rental. SECTION 3.09. Supplemental Reimbursement Account. In consideration for the agreements and covenants of the Authority herein, the County hereby agrees to establish and maintain a special account, to be held by the County, known as the "Los Medanos Project Supplemental Reimbursement Account" or other appropriate name (the "Supplemental Reimbursement Account"), and the County agrees and covenants that all supplemental MediCal reimbursement received by it with respect to the Los Medanos Projectfinanced with the proceeds of the 1993 Series A Bonds shall be deposited when and as received in the Supplemental Reimbursement Account, and all money on deposit in such account, including earnings thereon, shall be applied only to the payment of Base Rental Payments allocable to such Bonds due and payable by the County. Pursuant to California Welfare and Institutions Code Section 14085.5, the County hereby pledges that supplemental reimbursements shall be used for the payment of such Base Rental Payments, and the County hereby incorporates herein the agreement with the State made pursuant to California Welfare and Institutions Code Section 14085.5(b)(5). DOCSSF1:308303.5 10 ARTICLE IV MAINTENANCE; ALTERATIONS AND ADDITIONS SECTION 4.01. Maintenance andCltilities. 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 Countyor 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, including the Demised Premises. SECTION 4.02. Changes to the Project. Subject to Section 8.02 hereof, the County shall, at its own expense, have the right to remodel the Facilities or to make additions, modifications and improvements to the Facilities, including the Demised Premises. All such additions, modifications and improvements shall thereafter comprise part of the Facilities and be subject to the provisions of this 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. 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, including the Demised Premises. All such items shall remain]the sole property of such party, in which neither the Authority nor the Trustee shall have any interest, and may be modified or removed by such party at any time provided that such party shall repair and restore any and all damage to the Facilities resulting from the installation, modification or removal of any such items. Nothing in this Lease shall prevent the County from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor's lien or security agreement as security for the unpaid portion of the purchase price thereof,provided that no such lien or security interest shall attach to any part of the Facilities. 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 DOCSSF 1:30$303.5 11 ......... ......... ......... ......... ......... ......... ......... ......... . ........ ......... ......... ......... ......... ......... ......... ...... ._. _..... ......... ......... ......... ........... ....... ......... ............................................ this 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, as determined by the County. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an amount equal to the replacement cost (without deduction for depreciation) of all structures constituting any part of the 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 all outstanding Bonds to be redeemed. In the event of any damage to or destruction of any part of the Facilities, caused by the perils covered by such insurance, the Authority, except as hereinafter provided, shall cause the proceeds of such insurance to be utilized for the repair, reconstruction or replacement of the damaged or destroyed portion of the Facilities, and the Trustee shall hold said proceeds separate and apart from all other funds, in a special fund to be designated;the "Insurance and Condemnation Fund," to the end that such proceeds shall be applied to the repair, reconstruction or replacement of the Facilities to at least the same good order, repair and condition as they were in prior to the damage or destruction, insofar as the same may be accomplished by the use of said proceeds. The Trustee shall permit withdrawals of said proceeds from time to time upon receiving the Written Request of the Authority, stating that the Authority has expended moneys or incurred liabilities in an amount equal to the amount therein requested to be paid over to it for the purpose of repair, reconstruction or replacement, and specifying the items for which such moneys were expended, or such liabilities were incurred. Any balance of said proceeds not required for such repair, reconstruction or replacement shall be treated by the Trustee as Base Rental Payments and applied in the manner provided by Section 5.02 of the Trust Agreement. Alternatively, the Authority, at its option, with the written consent of the County, and if the proceeds of such insurance together with any other moneys then available for the purpose are at least sufficient to redeem an aggregate principal amount of outstanding Bonds, equal to the amount of Base Rental attributable to the portion of the Facilities so destroyed or damaged (determined by reference to the proportion which the cost of such portion of the Facilities bears to the cost of the Facilities), may elect 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 provisions of the Trust Agreement. 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. Any proceeds received as a result of such disaster aid shall be used to repair, reconstruct, restore or replace the damaged or destroyed portions of the Facilities, or, at the option of the County and the Authority, to redeem outstanding Bonds if such use of such disaster aid is permitted. DOCSSF1:308303.5 12 . ... .............................................................................. 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 pian is being provided to satisfy the requirements of this Lease, there shall be filed annually with the Trustee a statement of an actuary, 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 coverage for the risks required to be insured against. There shall also be filed a Certificate of the County setting forth the details of such substitute method or plan. In the event of loss covered by any such self insurance method, the liability of the County hereunder shall be limited to the amounts in the self insurance reserve fund or funds created under such method. SECTION 5.02. Liability Insurance. Except as hereinafter provided, the County shall procure or cause to be procured and maintain or cause to be maintained, throughout the term of this Lease, 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 insurancemethod 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 Lease, there shall be filed annually with the Trustee a statement of an actuary, independent 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 substitute method or plan. SECTION 5.03. Rental Inte=tion or Use and Occuna_ncy 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 DOCSSF1:308303.5 13 ......._. _ ............. ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .................................... . _ _................................................................. 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 sufficient to pay the part of the total rent hereunder attributable to the portion of the Facilities rendered unusable (determined by reference to the proportion which the cost of such portion bears to the cost of the Facilities) for a period of at least two years, except that such insurance may be subject to a deductible clause of not to exceed one hundred thousand dollars ($100,000) or a comparable amount adjusted for inflation. Any proceeds of such insurance shall be used by the Trustee to reimburse to the County any rental theretofore paid by the County under this Lease attributable to such structure for a period of time during which the payment of rental under this Lease is abated, and any proceeds of such insurance not so used shall be applied as provided in Section 3.01 (to the extent required for the payment of Base Rental) and in Section 3.02 (to the extent required for the payment of Additional Payments). SECTION 5.04. Worker's Compensation. The Countyshall also maintain worker's compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure its employees against liability for compensation'under the Worker's Compensation Insurance and Safety Act now in force in California, or any act hereafter enacted as an amendment or supplement thereto. As an alternative, such insurance may be maintained as part of or in conjunction with any other insurance carried by the County. Such insurance may be maintained by the County in the 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 Lease title insurance on the Demised Premises, in an amount equal to the aggregate principal amount of the 1999 Series A 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 and the Trustee as insured and shall contain a lender's loss payable endorsement in favor of the Trustee 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 Lease shall provide that the Trustee and the Bond Insurer 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 Lease, and shall promptly furnish evidence of such payments to the Authority. The County will deliver to the Authority and the Trustee [and the Bond Insurer] on or before September'15 in each year a written Certificate of an officer of the County stating whether such policies satisfy the requirements of this Lease, setting forth the insurance policies DOCSSF 1:308303.5 14 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. The County shall deliver to the Bond Insurer, upon request, a copy of the policy providing for any rental interruption or use and occupancy insurance required by Section 5.03. 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 A or better by Best or 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 to pay any rental payable hereunder when the same becomes due, time being expressly declared to be of the essence of this Lease, or the County shall fail to keep, observe or perform any other term, covenant or condition contained herein to be kept or performed by the County for a period of sixty (60) days after notice of the same has been given to the County by the Authority or the Trustee or for such additional time as is reasonably required, in the sole discretion of the Authority, to correct the same, or upon the happening of any of the events specified in subsection (b) of this Section (any such case above being an "Event of Default"), the County shall be deemed to be in default hereunder and it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Lease. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following: (1) To terminate this Lease in the manner hereinafter provided on account of default by the County, notwithstanding any re-entry or re-letting of the 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. 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 DOCssP 1:308303.5 15 _.... ......... ......... ......... ......... ........ _ .. __ .. ..._..... ......... ......... ......... ......... ......... ......... ......... ......... ......... _. ......... ......... .......... ........ . ........ ......... ..................................................... obtaining possession of the Facilities nor the appointment of a receiver upon initiative of the Authority to protect the Authority's interest under this Lease shall of itself operate to terminate this Lease, and no termination of this Lease on account of default by the County shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the County of the election on the part of the Authority to terminate this Lease. The County covenants and agrees that;no surrender of the Facilities or of the remainder of the term hereof or any termination of this Lease shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. (2) Without terminating this Lease, (i) to collecteach installment of rent as it becomes due and enforce any other terms or provision hereof to be Dept 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 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 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 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 Lease, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the County the right to terminate this Lease shall vest in the Authority to be effected in the sole and exclusive manner provided for in sub-paragraph (1) hereof. The County further waives the right to any rental obtained by the Authority in excess of the rental herein specified and hereby conveys and releases such excess to the Authority as compensation to the Authority for DOCSS1=1:30$303.5 16