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HomeMy WebLinkAboutMINUTES - 05191998 - C62 TO: BOARD OF SUPERVISORS Contra' FROM: Barton J. Gilbert, Director of General Services ( Costa County DATE: May 19, 1998 r - SUBJECT: Approval of Revisions to Resolution No. 96/294 in Regards to The Financing and Master Lease of 1034 Oak Grove Road, Concord with Transocean Funding Inc. SPECIFIC REQUESTS OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION !. REC..__OMMENDATM APPROVE revisions to Resolution No. 96/294 approved by the Board of Supervisors on June 11, 1996 to reflect the following: change all references from"July 1, 1996" to"May 1, 1998"; all references from "1996" to "1998"; change "Cypress Coast Bank as Paying Agent" to "East County Bank, N.A. of Antioch as Paying Agent"; and change the proviso in SeAbD-5 to the following: "provided, however, that the aggregate principal component of the base rental payments under the Facility Lease shall not exceed $1,504,000, the maximum annual interest rate shall not exceed 6 % and the term of the Facility Lease shall not exceed seventeen (17) years." II. FINANCIAL i:M.PACT The projected net debt service cost for lease of this facility is less than the rent costs budgeted within the Health Services Department. 111. REASONS EO"ECOMMEND.AI1ONIBACKGROUND On June 11, 1996, the Board of Supervisors approved the execution and delivery of Assignment of Purchase Option to Transocean Funding, Inc. in connection with the acquisition of 10334 Oak Grove Road, Concord, CA. This facility is used for the provision of children's outpatient and inpatient mental health services. The Board adapted Resolution No. 96/294 which approved the assignment of the purchase agreement, approved the forms of and execution of a Master Facility Lease Agreement, approved the forms and distribution of the sale of Certificates of Participation, and authorized the County Administrator or designee to take necessary actions in the execution of all documents. Upon the Board's June 11, 1996 approval, Transocean Funding, Inc. notified the Lessor, Century Health Care Corporation, that Transocean was exercising the purchase option on behalf of Contra Costa County. Century Health Care Corporation was then required to perform by delivering title to the facility free of all encumbrances and liens. However Century Health Care was never able to deliver clear title. With the recent past, the circumstances have changed and it is anticipated'that Century Health Care Corporation will now be able to deliver clear title. Resolution No 96/294 is required to be updated to reflect the current dates. In addition revisions are also required to reflect a change in the Paying Agent' to a local financial institution and to provide for maximum flexibility in selection of financing option terms. CONTINUED ON ATTACHMENT: YES SIGNATURE: _RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON MAY 19 1998 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS UNANIMOUS(ABSENT } AYES: NOES: ABSENT: ABSTAIN: I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN MEDIA CONTACT: BARTON J.GILBERT(313-7100) AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator(via UM) ATTESTED mg 19 �g9a County Auditor-Controller(via L/M) PHIL BATCHELOR,CLERK OF THE 804RD OF Lessor(via UM) SUPERVISORS AND COUNTY ADMINISTRATOR County Counsel(via UM) Risk Management(via UM) , Orig:General Services Department-UM By ,DEPUTY M382 (10/88) TO: BOARD OF SUPERVISORS FROM: Phil Batchelor, County Administrator ,� June 11, 1996 Costa Rescission of County's intent to purchase real property located at 1Rollo �#'"t j DATE: Concord; Cancellation of .lune 11, 1996 Hearing to consummate purch Y roVal of Assignment of Purchase Option for 1034 Oak Grove Road,Concord,to Transocean Funding,Inc:. SUBJECT: and Approval of Leese-Purohase Agreement with Transocean Funding,Inc. SPECIFIC REOUEST(S)OR RECOMMENDATIONS)&BACKGROUND AND JUSTIFICATION RECOMMENDATION 1. RESCIND the notice of the County's intent to purchase real property'located at 1034 Oak (grove Road, Concord (item C.29 of the Board of Supervisor's May 7, 1996' agenda)and CANCEL the scheduled 9:45 a.m. Public Hearing on June 11, 1996 for consummation of purchase; and HOLD Public Hearing at same time and date (9:45' a.m. on June 11, 1996) on proposed lease-purchase financing of this facility. 2. AFFIRM that the Board opened said Public Hearing, heard all comments, and closed' said hearing. 3. ADOPT Resolution attesting to hearing and APPROVING the execution and delivery of Assignment of Purchase Options to Transocean Funding, Inc. in connection with the Acquisition of 1034 Oak Grove Road, Concord, CA. 4. DETERMINE that the County will have long term occupancy of this facility and the lease purchase is in accordance with Board policy to obtain ownership and stabilize space costs. 5. AUTHORIZE the Chairman, Board of Supervisors, or his designee to execute all documents and contracts necessary to complete this lease purchase transactidn. CONTINUED ON ATTACHMENT: L YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON june it, APPROVED AS RECOMMENDED. OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE 7C]C UNANIMOUS(ABSENT } AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES. AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN, ATTESTED _-____June 11• 1396 Contact: PHIL BATCHELOR.CLERK OF THE BOARD OF ICC: See page 2 SUPERVISORS AND COUNTY ADMINtSTRATOPI 'w BY ,DEPUTY FINANCIAL IMPACT The County has an ongoing lease obligation for the facility located at 1034 Oak Grove Road, Concord. The lease costs are fully budgeted within the Health Service Department current year's budget and proposed 1996-97 year budget. The projected net debt service cost for lease-purchase of this facility is less than the budgeted rent in the current ongoing lease. The department anticipates need of this facility on a long term basis. BACfC�1i'3QLlNC� Board approval of this lease purchase agreement represents a continuation of the Board's commitment for ownership and stabilization of space costs in those facilities which will have long termCounty occupancy. The Board of Supervisors action on May 7, 1996 approving a Declaration of Intent to Purchase Beal Property located at 1094 Oak Grove goad, Concord, is rescinded since the current recommended action assigns the Purchase Option to Transocean Funding, Inc.for financing purposes. Transocean Funding, Inc. will exercise the purchase option and lease the facility back to the County at a tax exempt financing interest rate. The County costs of the lease back are equal to the financing costs for Transocean Funding, This mechanism allows the County to acquire the property over the term of the lease using tax exempt financing. The facility located at 1034 Oak Grove Road, Concord, is subleased to FamlliesFirst, Inc., who provide children's outpatient and inpatient mental health services on behalf'of the Health Services Department. Significant benefits are realized since the children are being treated' within their own county of residence and thus avoiding more costly out of County residential' treatment facilities. Contact:Carol Chan, Capital facilities Analyst(646-1021) cc:CAO' County Counsel General Services Health Services Dept. THE BOARD OF SUPERVISORS,CONTRA COSTA COUNTY,CALIFORNIA Adopted this Resolution on June 11, 1996 by the following vote: AYES: Rogers, Bishop, De Saulnier, Torlakson, Smith NOES: None ABSENT None RESOLUTION NO. 96/294 SUBJECT: Resolution,Approving Execution and Delivery of Assignment of Purchase Option to Transocean Funding,Inc.In Connection With Acquisition and Improvement of the Project; Approving Forms of and Execution of A Master Facility Lease Agreement("Lease")and Escrow Agreement; Approving Forms and Distribution of Preliminary Limited Offering Memorandum for the Sale of Certificates of Participation in the Lease by Union Bank of California,N.A.; and Authorizing the County Administrator or his Designee Taking Necessary Actions and Executing of Necessary Certificates. WHEREAS,the County of Contra Costa(the "County") is a political subdivision of the State of California; WHEREAS,this Board of Supervisors hereby deternunes that it would be in the best interest of the County and the residents of the County to enter into a facility lease financing for the purpose of acquiring and improving 1034 Oak Grove Road, Concord, CA. (referred to as"The Project"); WHEREAS,a public hearing was duly noticed, called and held pursuant to the requirements of the Internal.Revenue Code of 1986,as amended on the Project; WHEREAS the County has entered into an agreement with FamiliesFirst Inc. a California nonprofit corporation, for use of 1034 Oak Grove Road,Concord,CA,for a Children's Mental Health Facility; WHEREAS,Transocean Funding, Inc. ("Corporation")will finance the acquisition, construction and improvement of the Project by and on behalf ofthe County through issuance of Certificates of Participation; WHEREAS,it is proposed that the County assign its purchase option in connection with the Project to the Corporation; WHEREAS, it is proposed that the Corporation will acquire the Project and will lease the Project to the County pursuant to a document entitled "Master Facility Lease Agreement,"to be dated as of July 1, 1996(tate"Facility Lease"); WHEREAS , under the Facility Lease,the County would be obligated to make base rental payments to the Corporation for the lease of the Project; WHEREAS, it is proposed that all rights to receive such base rental payments will be assigned without recourse by the Corporation to Cypress Coast Bank as Paying Agent(the"Paying Agent") pursuant to an Assignment to be dated as of duly 1, 1996(the "Assignment"); WHEREAS,it is further proposed that the Corporation and the Paying Agent will enter into a Paying Agency Agreement,to be dated as of July 1, 1996,(the "Paying Agency Agreement") pursuant to which the Corporation will execute and deliver Certificates of Participation(1996 Facilities Acquisition Project)in an amount equal to the aggregate principal components of such payments,each evidencing and representing a fractional undivided interest in such payments; WHEREAS,a form of A Limited Offering Memorandum, describing the 1996 Certificates will be distributed to potential purchasers of the 1996 Certificates; WHEREAS ,the Board has been presented with the form of each document,hereinafter referred to,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 the full legal right,power and authority to enter into the transaction hereinafter authorized;and NOW,THEREFORE,BE IT-RESOLVED by tine Board of Supervisors ofthe'County of Contra Costa,as follow: Seatian.-L The County hereby specifically finds and declared 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. SerAan.Z A public hearing was duly noticed,called and held pursuant to the requirements of the Internal Revenue Code of 1986,as amended,on a proposal that Contra Costa County enter into a lease purchase agreement with Transocean Funding Inc. for the purpose of acquiring a health care facility which will be located at 1034 Oak Grove Road, Concord, CA. Contra Costa County has entered into an agreement with FamiliesFinst, Inc.,a California nonprofit corporation, for use of 1034 Oak Grove Road,Concord,CA. for a Children's Mental Health facility. &c ion.l At the public hearing all interested persons were given an opportunity to appear and be heard and based on such hearing and such other facts and circumstances as this Board deems relevant,this Board hereby approves the entering into a lease-purchase agreement by Contra Costa County with Transocean Funding,Inc. with respect to the acquisition of 1034 Oak Grove Road, Concord, CA. The rental payments due pursuant to such lease-purchase agreement shall have a maximum total principal component of$1,500,000. ,Sectimi-4. The assignment of the County's purchase option in connectionwith the Project to the Corporation is hereby approved and the Chairman of the Board of Supervisors and the Clerk of the Board of Supervisors, and their designees,are hereby authorized and directed to execute and deliver said assignment of purchase option to the Corporation together with such amendments, modifications and changes to such purchase option as such officers may require or approve. Suakin 5. The form of Facility Lease between the Corporation and the County,dated as of July 1, 1996,on file with the Clerk of the Board of Supervisors, is hereby approval and the Chairman of the Board of Supervisors and the Clerk of the Board of Supervisors,and their designees,are hereby authorized and directed to execute and deliver said Facility Lease in substantially said form:,with such changes therein as such officers may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof;provided,however,that the aggregate principal component of base rental payments payable under the Facility Lease shall not exceed $1,500,000,the maximum annual base rental payments payable udder the Facility Lease shall not exceed$1$3,200,except for a final payment of$926,550 and the terra of the Facility Lease shall not exceed eight(8)years. SettionA The form of the Preliminary Official Statement describing the 1996 Certificates,on file with the Clerk of the.Beard of Supervisors,is hereby approved. Transocean Funding,Inc. is hereby authorized and directed to cause to be supplied to prospective purchasers of the 1996 Certificates 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 County Administrator,County Counsel's Office,or Transocean,and to supply the purchaser for the 1996 Certificates with copies of t 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 authorized:to certify on behalf ofthe County that the preliff&ary form of the official statement is deemed final as of its date,within the meaning of Rule 15c2-12 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 County Administrator,or his designee,is hereby authorized and directed to execute and deliver a final Official Statement in substantially said form,with such additions thereto or changes therein as Transocean,County Counsel's Office may require or approve,such approval to be:conclusively evidenced by the execution and delivery thereof. Sectio _1 The officers of the County are hereby authorized and directed,jointly and severally,to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution. The Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors and the officers of the County are hereby authorized and directed to execute and deliver any and all certificates,tax and rebate certificates,the letter of representations to The Repository Trust:Company and certificates concerning,the contents of the Official Statement distributed in connection with the sale of the 1996 Certificates,necessary and desirable to accomplish the transactions set forth above. Section R. All actions lieretofvre taken by the agents of the County with respect to the acquisition of the Project and the sale,execution and delivery of the 1996 Certificates are hereby approved and confirmed. ,Sezfi n-9. The County hereby declares its official intent,solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the United States Treasury Regulations,to use proceeds of the 1996 Certificates to reimburse itself for any County expenditures in connection with the Project incurred prior to the execution and delivery of the 1996 Certificates. 1 M�+��a .r�l�ie a►��ei"+w "' of w so 00 oar 1 6 M , RESOLUTION NO. 961294 ­­­­­.­.­............I............................................................................................................................................................................ .. . ................................................... RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: County of Contra Costa General Services Department Lease Management Division 1220 Morello Avenue, Suite 100 Martinez, CA 94553-4711 Attention: Carol Chan Memorandum Of Lease And Option to Purchase This Memorandum of Lease and Option to Purchase ("Memorandum") is dated as of JULY 16, 1998 , is entered into between TRANSOCEAN FINANCING CORPORATION, a California Corporation ("LESSOR"), and COUNTY OF CONTRA COSTA, a political subdivision of the State of California("COUNTY"). Recitals A. On or about JULY 1, 1998 LESSOR and COUNTY entered into a Lease ("Lease"),pursuant to which LESSOR leased to COUNTY and COUNTY leased from LESSOR real property, more particularly described in Exhibit A attached hereto and incorporated herein by reference ("Premises"), consisting of an approximately 10,600 square foot office building located at 1034 Oak Grove Road, Concord, CA.:; the land on which the building is placed and associated grounds, parking, landscaping and other related amenities. B. As more particularly set forth in the Lease, LESSOR granted to COUNTY an option to purchase said Premises. C. LESSOR and COUNTY desire to execute this Memorandum to provide constructive notice of LESSOR's and COUNTY's rights under the Lease, which includes an option to purchase, to all third parties. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. Conveyance and Term By this Memorandum and that certain long form Lease between the LESSOR and COUNTY of even date herewith, LESSOR leases to COUNTY the Premises described in Exhibit A for a term of fifteen(15)years,commencing on July 1, 1998 ,and ending on July 1, 2013. In addition, LESSOR grants to COUNTY an option to purchase the Premises, described in Exhibit A , together with all rights of LESSOR to adjoining streets, rights of way, easements, all other appurtenant rights and all personal property on the real property belonging to LESSOR(collectively the Premises). The purchase option right shall survive the term of the Lease 2. Least Terms This terms of the Lease of the Premises to the COUNTY and the COUNTY's purchase option are set forth at length in the Lease which is incorporated in this Memorandum by reference. 3. Successors and Assigns This Memorandum and the Lease shall bind and inure to the benefit of the parties and their respective heirs, successors, and assigns, subject, however, to the provisions of the Lease on assignment. 4. Governing Law This Memorandum and the Lease are governed by California law. The venue for any dispute concerning this Lease shall be Contra Costa County, CA. Executed as of the date first above written. COUNTY: LESSOR: COUNTY OF CONTRA COSTA TRANSOCEAN FINANCING a political subdivision of the State of CORPORATION California By: &&a%WU& B4,�441-rk Director of General Services VJOSHUA G. COOPERW PRESIDENT By APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel, By: Dep By: Chair, Bo d of Supe 'cors State of California County of _ CONTRA COSTA On JULY 16, 1995 before rile, the undersigned, a Notary Public in and for said State, persc nally appeared JOSHUA G. COOPERA Uj--- ebe allly krC . to m (or proved to m on the basis of satisfactory eviai r—) , persons) whose names) is/are subscribed to the within instnrment and ackmwledged to me that he/she/they executed the same in his/her/their authorized capacty(i.es) , and that by his/her/their signature(s) on the inst=nent the person(s) , or the entity upon behalf of which the persm(s) acted, executed the instruw t. WI'ESS my hand and official seal. ,U J. QUILEY _ Comm. #1124817 Signature r " NOTARY PUBLIC•CALIFORNIAN r CONTRA COSTA COUNTY 0 Comm. Exp. Feb.8, 2001 Nacre J. QUIGLEY (typed or printed) (Seal.) ... ..... ..... ..... .. ..... FACILITY LEASE CL (1034 Oak Grove Road, CONCORD) Between TRANSOCEAN FINANCING CORPORATION, as Lessor, and the COUNTY OF CONTRA COSTA, as County, Dated as of July 1, 1998 _........ ......... ......... ......... ._....... 1.111 1111. ..................._..... . ......... ......... ......... ......... ......... ......... ...... . ......... ......... ......... FACILITY LEASE (1034 Oak Grove Road, Concord, California) TABLE OF CONTENTS Section . . 1 . Definitions Section . . 2 . Term; Commencement of Rental; Condition of the Premises Section . . 3 . Rental Payments; Abatement of Rental Section . . 4 . Maintenance, Utilities, Taxes, and Assessments; Risk of Loss Section . 4A. Eminent Domain Section . . 5. Fire and Extended Coverage Insurance Section . . 6 . Liability Insurance Section . . 7 . Rental Interruption or Use and Occupancy Insurance Section . . 8 . Form of Insurance Policies Section . . 9 . Title to Premises Section . . 10 . Default Section . . 11 . . Right of Entry Section . . 12 . Liens and Taxes Section . . 13 . Assignment and Subleasing Section 14 . Option to Purchase; Defeasance Section 15 . Quiet Enjoyment Section . . 16 . Lessor Not Liable Section . 17 . Purpose Section . . 18 . Waiver Section . , 19. Headings Section . . 20 . Law Governing; Venue Section . . 21 . Notices . Section . . 22 . Validity and Severability Section 23. Net Lease Section 24 . Attorneys' Fees Section 25. Memorandum Section 26. Title Insurance and Bond Counsel Opinion Section 27 . Characterization of Lease' Section 28 . Authority Execution ......... ......... ......... ......... ....._. .. ................_.._.. ......... ......_. ......... ......... ......... ......... ......... ......... ......... ...._._.. _...... ......_.. ......... ......... ......... Exhibit A Schedule of Property Exhibit B Schedule of Rental Payments Exhibit C Opinion of Counsel Exhibit D Certificate of Essential Use Exhibit E Resolution of Board of Supervisors Exhibit F Memorandum of Lease Exhibit G Incumbency Certificate (NOT USED) Exhibit H Notice of Assignment ....... ......... ......... ......... ._.._.... .......... ......... ......... ......... ......... ......... ......... ......... ......... ......... _ _.._.._ ......... ......... ......... ......... ..................... FACILITY LEASE (1034 Oak Grove Road, Concord) THIS FACILITY LEASE (1034 Oak Grove Road, CONCORD) , dated as of July 1, 1998, by and between TRANSOCEAN FINANCING CORPORATION, as Lessor, and the COUNTY OF CONTRA COSTA, a political subdivision organized and existing under and by virtue of the laws of the State of California, as County ("County") ; W I T N E S S E T H: In consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows : Section 1 . Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the meanings herein specified, the following definitions to be equally applicable to both the singular and plural forms of any of the terms herein defined: The term "Premises" means all of that certain real property situated in the City of Concord, County of Contra Costa, State of California, commonly known as 1034 Oak Grove Road and more particularly described in and shown on Exhibit A attached hereto and made a part hereof. The term "Lease" means this Facility Lease (1034 Oak Grove Road, Concord) , as originally executed and as it may from time to time be supplemented, modified or amended pursuant to the provisions hereof. The term "Rental Payment" means all amounts payable to Lessor from County as rental pursuant to Section 3 hereof and all amounts payable as additional rent specified herein. The term "Pro Rata Rent" shall mean the portion of the Interest component (s) of the Payment amount as set forth on Exhibit B hereof for period(s) of such Pro Rata Rent times a fraction, the numerator of which is the number of days of Pro Rata Rent from (but excluding) the prior Payment Date as set forth on Exhibit B hereof through and including the date of payment of Pro Rata Rent, and the denominator of which is 180 days. 1 Section 2. Term; Commencement of Rental; Condition of the Premises. Lessor hereby leases to County and County hereby leases from Lesser, on the terms, covenants and conditions hereinafter set forth, the Premises. The County hereby agrees and covenants during the term of this Lease that, except as hereinafter provided, it will use the Premises for public and County purposes so as to afford the public the benefits contemplated by this Lease. The term of this Lease shall commence on the date specified in the Lease Payment Schedule attached hereto and made a part hereof as Exhibit B and shall end on the fifteenth anniversary of such date, unless such term is extended or sooner terminated as hereinafter provided. If any payment of Rent hereunder has been abated (but not offset) at any time and for any reason, then unless such payment or payments has been paid prior to July 1, 2013, the term of this Lease shall be extended until ten (10) days after all previously abated (but not offset) Rental Payments shall be fully paid, except that the term of this Lease shall in no event be extended beyond July 1, 2020. Promptly after the occurrence of any circumstances which would give rise to any extension of the term of this Lease, or if Lessor and County shall otherwise agree to extend the term, Lessor and County shall each execute and deliver to the other an amendment to this Lease, in recordable form and in sufficient original counterparts to attach to each original counterpart of this Lease, which sets forth the revised expiration date for this Lease, and the parties shall thereafter attach such amendment or amendments to all original counterparts of the Lease in their possession and cause one acknowledged original to be recorded in the same manner as the Memorandum of Lease hereafter described. If prior to July 1, 2013, all Rental Payments shall be fully paid, whether by prepayment, application of insurance or condemnation proceeds or otherwise, the term of this Lease shall end ten (10) days thereafter. The parties hereto agree that County is presently in possession of all of the Premises. County accepts all of the Premises in its existing condition, and represents and warrants that, to the best of County's knowledge, after such occupation and diligent inspection, it is in good order, condition, and repair. To the extent permitted by law, County agrees to indemnify and hold harmless Lessor and its agents and employees from and against any and all claims, demands, damages, costs, expenses, liabilities, suits, interest, fines, penalties, judgments, liens, charges, and costs of defense, arising from or in connection with any defects presently existing in the Premises, unless such defects are actually, not constructively, known to Lessor, unknown to County and not disclosed to County by Lessor prior to execution of this Lease. 2 Representations and Covenants. County represents and covenants and as requested by Lessor, will deliver an opinion of counsel substantially in the form attached as Exhibit C hereto to the effect that (i) it is political subdivision of the State of California, duly organized and validly existing under the laws of the State of California and has full power and authority to execute and deliver this Lease, to enter into the transactions contemplated by this Lease and to carry out its obligations hereunder, and (ii) that the Lease has been duly authorized and executed by County, and when delivered, it will constitutes a legal, valid and binding agreement enforceable against County in accordance with its terms. County agrees, declares and covenants that it will do, or cause to be done, all things necessary within its power to preserve and keep the Lease in full force and effect. County further represents and covenants that the Premises are necessary and essential to enable the County to operate, maintain, and provide governmental services; and that the Rental Payments during the Lease Term (as such terms are defined below) are equivalent to, and do not exceed, fair rental value for the Premises for a lease/option purchase of the Property by the County. Section 3. Rental Payments; Abatement of Rental. (a) The County agrees to pay to the Lessor for use and occupancy of the Premises total rental payments ("Rental Payments") set forth in Exhibit B. Said Rental Payments shall be payable without notice or demand to the location specified by the Lessor, if permissible, on the fifteenth (15th) day of the month preceding the payment dates set forth in Exhibit B. Except as provided in Section 3 (e) hereof, Rental Payments shall be paid absolute and unconditionally in all events and without assertion of any right to any set-off, defense or counterclaim. (b) County reasonably believes that funds will be available to make all Rental Payments during the Lease Term and hereby represents that it intends to do all things lawfully within its power to obtain, maintain and properly request and pursue funds from which the Rental Payments may be made, including making provisions for such payments in budgets submitted to its Board for the purpose of obtaining funding, using its bona fide best efforts to have such portion of the budget approved and exhausting all administrative reviews and appeal, if any, in the event such portion of the budget is not approved. It is County's intent to make Rental Payments for full Lease Term to the extent it has legally available funds. (c) Rental Payments for each payment period during the term of this Lease shall constitute the total amount due for said payment period and shall be paid by County for and in consideration of (1) the right of possession of, and the continued quiet use and enjoyment of the Premises during each such payment period, and (2) the option to 3 purchase the Premises by payment of the amount prescribed in Section 14 . (d) Lessor and County understand and intend that the obligation of the County to pay Rental Payments hereunder shall constitute a current expense of County and shall not in any way be construed to be a debt of the County in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by County. (e) Rental shall be abated proportionately, during any period in which by reason of any damage or destruction '(other than by condemnation which is provided for herein) there is substantial interference with the use and occupancy of the Premises by County, in the proportion in which the initial cost of that portion of the Premises rendered unusable bears to the initial cost of the entire 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. This section shall not reduce the obligation of any insurance company to indemnify Lessor for lost rentals. Section 4. Maintenance, Utilities, Taxes and Assessments. During the term of this Lease, the cost of all maintenance and repair, both ordinary and extraordinary, of the Premises shall be the sole responsibility of County, which shall at all times maintain or otherwise arrange for the maintenance of the Premises in first- class condition, and County shall pay for or otherwise arrange for the payment of all utility services supplied to the Premises and shall pay for or otherwise arrange for the payment of the costs of the repair to the Premises and tear or want of care on the part of County 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 Premises. In exchange for the Rental Payments herein provided, Lessor agrees to provide only undisturbed possession of the Premises. County shall not make any alterations, additions or improvements of a significant and material nature to the Premises without the Lessor's prior written consent, such consent not to be unreasonably withheld, and further provided that County shall not undertake any modifications, alterations, additions and improvements of any nature to the Premises without providing indemnification to Lessor and its assigns that County shall comply with all applicable laws and regulations affecting such modifications and that such modifications shall not create any liens or encumbrances on the Premises which are superior to the rights of Lessor hereunder. 4 { County shall bear the risk of loss or damage to the Premises from any cause whatsoever, and no such loss or damage to or condemnation of the Premises shall impair or modify the obligations of County hereunder. If the Premises is destroyed or damaged in whole or in part, County at its option and in its sole discretion shall have the right to either: (a) Replace or repair the same in as good condition as prior to the destruction or damage; or (b) Exercise its option to purchase the Premises pursuant to Section 14 of this Lease. Immediately following the County's exercise of its option and payment of the purchase price, Lessor shall convey fee title to the Premises to County in accordance with Section 9 of this Lease. The risk of loss and damage that the County agrees to assume under this Section shall be insured against under Sections 5 through 7 below respecting insurance. Section 4A. Eminent Domain. If County or Lessor shall at any time receive a written notice of a hearing to adopt a Resolution of Necessity or is served a summons and complaint in eminent domain from any public or quasi- public authority, governmental agency, private corporation or individual having or granted authority to exercise the power of eminent domain (herein collectively the "Condemnor") , declaring Condemnor's intent to take steps necessary to obtain the whole of the Premises (or so much thereof as to render the remainder unusable for the purposes for which it was used by County) by exercise of its power of eminent domain or by purchase in lieu of the exercise of its power of eminent domain (in either case a "Taking") , then the party receiving such notice shall immediately provide the other with a copy of the notice ("Condemnation Notice") . At any time following County's receipt of the Condemnation Notice, County may, at its sole option (which option must be exercised no later than sixty (60) days after County is served with the summons and complaint in an action in eminent domain, terminate this Lease ("Termination Notice") . Such termination shall take effect not sooner than thirty (30) days after County gives notice of termination) . The County may continue to occupy the Premises following County's Termination Notice until they are transferred to the Condemnor on a month to month basis automatically renewing for a period not to exceed twenty-five (25) years at the rental and on terms, covenants and conditions substantially the same as those contained herein, including, without limitation, the provision by Lessor to County of a deed pursuant to the procedures and requirements in Section 9 hereof 5 when (i) the then Prepayment. Purchase Option Price as; set forth on Exhibit B applicable to the most recent prior Payment Date as set forth on Exhibit B hereof in which the Principal was paid, Pro Rata Rent, all costs or expenses incurred by Lessor in effecting the transfer provided herein (including any escrow, title fees, transfer charges, taxes, incidental charges and unpaid property taxes on the Premises) and any other sums due hereunder have been fully paid, and (ii) the option to purchase for the purchase price set forth in Section 14 hereof has been exercised and completed by County. If the Lease is terminated by election of County as set forth above, then notwithstanding any other allocation of the award by operation of law, or allocation of the purchase price by agreement of the parties if the Taking is effectuated by purchase, Lessor shall receive as its portion of the total award or as its portion of the purchase price for the Premises, as the case may be, an amount equal to the then Prepayment Purchase Option Price as set forth on Exhibit B applicable to the most recent prier Payment Date as set forth on Exhibit B hereof in which Principal was paid (plus Pro Rata Rent, all costs or expenses incurred by Lessor in effecting the transfer provided, herein (including any escrow, title fees, transfer charges, taxes, incidental charges and unpaid property taxes on the Premises) and any other sums due hereunder, but nothing more, and County shall receive an amount equal to the full balance of such award or purchase price in consideration of the bonus value of the Lease prior to termination and in consideration of the purchase option. If the Lease is not terminated by election of County as set forth above, then notwithstanding any other allocation of the award by operation of law, or allocation of the purchase price by agreement of the parties if the Taking is effectuated by purchase, Lessor shall receive as its portion of the total award or as its portion of the total purchase price for the Premises, as the case may be, an amount equal to the then Prepayment Purchase Option Price as set forth on Exhibit B applicable to the most recent prior Payment Date as set forth on Exhibit B hereof in which Principal was paid (plus Pro Rata Rent, all costs or expenses incurred by Lessor in effecting the transfer provided herein (including any escrow, title fees, transfer charges, taxes, incidental charges and unpaid property taxes on the Premises) and any other sums due hereunder, but nothing more, and County shall receive an amount equal to the full balance of such award or purchase price in consideration of the bonus value of the Lease and in consideration of the purchase option. Notwithstanding the foregoing, County may exercise its right to purchase the Premises for the price and in accordance with the terms and conditions in Section 14 herein following the receipt by either party of the Condemnation Notice, with the purchase price to be paid solely and without recourse to County out of the award or purchase price for the faking, as the case may be, with County 6 assigning its right to such award or purchase price, as the case may be, to Lessor to the extent required to pay for the Premises. If less than the whole of the Premises shall be taken or sold, transferred or conveyed in lieu of condemnation and the remainder is usable for the purposes for which it was used by County at the time of such taking for the full extent of the remaining term of this Lease, then the entire award or purchase price shall be assigned to County and this Lease shall continue in full force and effect as to such remainder, without abatement or reduction in Rental Payments, with the parties hereby waiving the benefits of any law to the contrary, including (without limitation) Civil Procedure Code Section 1265. 130. County shall apply the proceeds of such award or purchase price, first, to the repair, reconstruction or restoration of the remainder of the Premises to the extent necessary for its use by County and, second, to the prepayment of the Renta. Payments as provided in Sections 4 and 4A hereof, (plus Pro Rata Rent, all costs or expenses incurred by Lessor in effecting the transfer herein (including any escrow, title fees, transfer charges, taxes, incidental charges and unpaid property taxes on the Premises) and any other sums due hereunder, but nothing more, and County shall receive an amount equal to the full balance of such award. If all or any portion of the Premises shall be taken under the power of eminent domain for a limited period of time (which period is not material and does not affect the ability of County or the sublessee of the County to continue their subsequent use of the Premises) , this Lease shall remain in full force and effect with no abatement of Rental Payments; and in such event, County shall be entitled to all awards made to County or Lessor in the eminent domain proceedings . In no event shall County commence an eminent domain proceeding against Lessor with respect to all or any portion of the Premises during the term of this Lease. In the event any preceding eminent domain awards or purchase prices are paid to any encumbrancer of the Premises or any portion thereof (other than Lessor or its assigns) , such amount shall be deducted from the unpaid Rental Payments attributable to principal payable hereunder as though payment of such proceeds to the holder of the encumbrances were a prepayment of Rental Payments under this Lease. Section 5. Fire and Extended Coverage Insurance. County shall, at its sole expense, procure or cause to be procured and maintain or cause to be maintained (including, without limitation thereby, cause Lessor to procure and maintain, at County's sole expense, which Lessor shall in all cases do, without fee or charge, upon written request of County) , throughout the term of this Lease, insurance against loss or damage to any structures constituting any part of the Premises by fire and lightning, with extended coverage insurance, vandalism, and malicious mischief insurance. Said extended 7 coverage insurance shall 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 at least equal to the lesser of (i) the replacement cost (without deduction for depreciation) of all structures constituting any part of the Premises, excluding the cost of excavations, of grading and filling, and of the land, and (ii) an amount sufficient to enable all Rental then unpaid to be paid, except that such insurance may be subject to deductible clauses for any one loss of not to exceed $10, 000. 00. Section 6. Liability Insurance. Except as hereinafter provided, County shall, throughout the term of this Lease, at its sole expense, either institute a program of self-insurance or procure or cause to be procured and maintain or cause to be maintained (including, without limitation 'thereby, cause Lessor to procure and maintain, at County's sole expense, which Lessor shall in all cases do, without fee or charge, upon written request of County) a standard comprehensive general liability insurance policy or policies in protection of County and of Lessor and its agents, and employees, indemnifying said parties against all direct or contingent loss or liability for damages for personal injury, death or property damage occasioned by reason of County's occupancy or operation of the Premises and naming both the County as insured and Lessor as additional insured., with minimum liability limits of One Million and No/100 Dollars ($1,000,000. 00) for personal injury or death of each person and Three Million and No/100 Dollars ($3, 000,000.00) for personal injury or deaths of two (2) or more persons in each accident or event, and in a minimum amount of Two Hundred Thousand and No/100 Dollars ($200,000.00) (subject to a deductible clause of not to exceed Twenty Five Thousand and No/100 Dollars ($25, 000.00) ) 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 Three Million and oto/100 Dollars ($3, 000,000.00) covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance carried by County. If County self-insures, it shall establish reserves sufficient, in accordance with generally accepted principles of self-insurance, to cover the losses which would otherwise be covered by the commercial policies herein described and shall provide Lessor with reasonable evidence of County's self- insurance program. 8 Section 7. Rental Interruption or Use and occupancy Insurance. County, at its sole expense, shall procure or cause to be procured and maintain or cause to be maintained (including, without limitation thereby, cause the Lessor to procure and maintain, at County' s sole expense, which Lessor shall in all cases do, without fee or charge, upon written request of County) , throughout the term of this Lease, rental interruption or use and occupancy insurance to cover loss, total or partial, of the Lease payment income from the use of the Premise as the result of any of the hazards covered by the insurance required by Section 7 hereof, in an amount sufficient to pay the part of the total rent hereunder attributable to the portion of the Premises rendered unusable (determined by reference to the proportion which the acquisition cost of such portion bears to the acquisition cost of the Premises) for a period of at least two (2) years, except that such insurance may be subject to a deductible clause of not to exceed Ten 'Thousand and No/100 Dollars ($10,000,00) . Any proceeds of such insurance shall be applied to abated Rental Payments and to the prepayment of Rental Payments as provided in Section 4 hereof. Section S . Form of Insurance Policies. All policies of insurance required by this Lease shall name County as insured and Lessor as additional insured and provide that both Lessor and County shall be given thirty (30) days notice prior to each expiration thereof or any effective cancellation thereof or reduction of the coverage provided thereby. County shall pay when due the premiums for all insurance policies required by this Lease, except as otherwise provided, and shall deliver certificates of insurance to Lessor when such insurance is issued or amended. Lessor may, but is not required to, secure replacement coverage for any insurance required hereunder if County fails to do so, and all amounts so advanced by Lessor shall be additional Rental due and payable on demand and bearing interest at the rate announced by the Banc of America National Trust and Savings Association, at its San Francisco, California, headquarters as its "reference rate" plus three percent (3%) or the maximum lawful rate, whichever is lower, from the date of demand. County shall pay, as additional rent, all other amounts of money and charges required to be paid by County under this Lease (including, without limitation, all reimbursements to be paid to Lessor by County) , whether or not such amounts of money and charges are designated "additional rent. " 9 Section 9. Title to Premises. Title to the Premises shall remain in Lessor during the term of this Lease. Unless the County is in default under Section 10 at the time it exercises its option, during which time the option contained herein shall not be exercisable, immediately following exercise of the option by County in Section 14, Lessor agrees to execute and deposit into escrow a grant deed in recordable form, conveying to County the Premises, warranting title free from any liens and encumbrances created specifically by or through Lessor, and excepting any liens for taxes not yet due and payable and any supplemental taxes and any exceptions arising from County's enjoyment and use of the Premises, together with Lessor's written instructions to the title company to close escrow on the Premises . Transfer taxes' and recording fees on the deed, the cost of a title policy, charges for the escrow, any miscellaneous fees and all other charges shall be paid by the County. Lessor shall also cooperate with County in modification of all insurance policies to reflect the grant deed. Except for the rights of Lessor and its assigns in the Premises, Lessor agrees not to create or cause to be created any liens or encumbrances specifically by or through Lessor on the Premises, and if any are created, to promptly effect their removal. Section 10. Default. (a) County shall be in default hereunder if it shall fail to pay any Rental Payments or sums constituting additional Rental Payments hereunder within ten (10) business days after written notice from Lessor that same is due and payable. If, however, payment is not made within ten (10) business days of said written notice due to circumstances beyond the reasonable control of the General Service Department of County or successor department, which circumstances may, without limitation hereby, include damage to or destruction of the Premises or the failure of County to adopt a budget, then County shall make such payment within such additional time (but not to exceed a total of forty-five (45) days from the Lessor's notice to the County of such breach) , as is reasonably required to resolve the problems preventing the County from making such payment, provided that the County has commenced with due diligence and dispatch to resolve the circumstances causing the delay in payment and thereafter continues with due diligence and dispatch to resolve the problem: and provided further that County is not refusing to pay with the intention of terminating the Lease. (b) County shall be in default hereunder if it fails to cure any breach hereunder or to keep, observe or perform any term, covenant or condition contained herein to be kept or performed by County other than the Lease payment or additional lease payment within thirty (30) business days (except for the failure to maintain insurance as provided hereunder, which shall be ten (10) business 10 days) after written notice from Lessor specifying in reasonably sufficient detail the nature of said breach, or, with respect to any such breach that by its nature cannot reasonably be cured within such thirty (30) day period (or ten (10) day period for insurance) , then within such additional time as necessary to cure (but not to exceed a total of forty-five (45) days from notice of such breach) , provided that County has commenced with due diligence and dispatch the curing of such breach within said thirty (30) day period, (or ten (10) day period for insurance) and thereafter continues with due diligence and dispatch to cure such breach. (c) County shall be deemed to be in default hereunder if (i) County's interest in this Lease be assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Lessor, which consent shall not be unreasonably withheld, or if (ii) any proceeding under the United States Bankruptcy Code or any other or successor Federal or State bankruptcy, insolvency or similar law, or any law providing for the appointment of a receiver, liquidator, trustee or similar official of County or of all or substantially all of its assets, is instituted by or with the consent of County, or is instituted without its consent and is not permanently stayed or dismissed within one hundred twenty (120) days, or if County offers to County' s creditors to effect a composition or extension of time to pay County's debts or asks, seeks or prays for a reorganization or to effect a plan of reorganization, or for a readjustment of County's debts, or if County shall make a general or any assignment for the benefit of County's creditors, or if (iii) County shall abandon or vacate any part of the Premises, except as otherwise permitted in this Lease. (d) Following any default as set forth above in Subsections (a) , (b) , and (c) , which are hereinafter referred to as "Events of Default" or "Defaults", Lessor shall have the right, subject to County' s right to cure, to terminate this Lease (but not to forfeit County' s interest herein) and to re-enter the Premises and to take possession of the Premises in any lawful manner and to remove all persons in possession thereof and all personal property whatsoever situated upon the Premises and to place such personal property in storage in any warehouse or other suitable place in the State of California. In the event of such lawful termination County agrees to immediately surrender possession of the Premises in good order, condition, and repair, reasonable wear and tear excepted, without let or hindrance, and Lessor shall have the right to recover from County the worth at the time of award by a court of competent jurisdiction of all unpaid Rental Payments (including any sums designated as additional Rental Payments hereunder and accrued but not yet paid, but not future Rental or future additional rent) which had been earned at the time of such termination, but notwithstanding any other remedy otherwise available at law, no other sums or damages except Lessor's 11 reasonable removal and storage costs of abandoned property and its reasonable attorneys' fees as otherwise provided in this ,Lease. (e) In the event County abandons the Premises, this Lease shall be deemed terminated as of a date one hundred twenty (120) days from the date of such abandonment, and Lessor shall have the right to recover from County the worth at the time of award by a court of competent jurisdiction of all unpaid Rental (including any sums designated as additional rent hereunder and accrued but not yet paid, but not future Rental or future additional rent) but notwithstanding any other remedy otherwise available at law, no other sums or damages except Lessor's reasonable removal and storage costsof abandoned property and its reasonable attorneys' fees as otherwise provided in this Lease. (f) The "worth at the time of award" for purposes of Subsections (d) and (e) above shall be computed by allowing interest at the rate announced by Bank of America National Trust and Savings Association, at its San Francisco, California, headquarters, or its successor, as its "reference rate, " plus three percent (3%) or the maximum lawful rate of interest, whichever is lower. (g) County hereby waives any and all claims for damages caused or which. may be caused by Lessor in re-entering and taking possession of the Premises as herein provided. In addition, County hereby agrees to indemnify and save harmless Lessor and Lessor' s assignees, agents and employees from any and all claims, demands, damages, costs, expenses, liabilities, suits, interest, fines, penalties, judgments, liens, charges, and costs of defense, including reasonable attorneys ' fees and costs, arising out of, in connection with, or incident to exercise of any remedies available to Lessor hereunder following an event of default (whether or not litigation is commenced against County) , including any re-entry upon and re-letting of the Premises and removal and storage of any personal property, except resulting from the negligent acts of the Lessor. The County agrees that the terms of this Lease constitute full and sufficient notice of the right of the Lessor to re-let the Premises in the event of such re-entry. Section 11 . Right of Entry Lessor and its assignees shall have the right to enter the Premises during reasonable business hours by appointment (a) to inspect the same, (b) for any purpose connected with Lessor's or County' s rights or obligations under this Lease, and (c) for all other lawful purposes. 12 Section 12. Liens and Taxes. In the event 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 Premises, 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 County in, upon or about the Premises and shall keep the Premises free of any and all mechanics ' or materialman's liens or other liens against the Premises or Lessor' s interest therein. County may contest the validity or amount of any such lien, but shall cause the property to be released from such lien, by the posting of a bond or otherwise, within thirty (30) days after such lien attaches to or is filed against the Premises or the Lessor's interest therein. The Lessor shall have the right to post and keep posted on the Premises any notices that may be provided by law or which the Lessor may deem to be proper for the protection of the Lessor, the Premises from such liens, and to take any other action the Lessor deems necessary to remove or discharge liens or encumbrances not removed by County as set forth herein at the expense of County. County agrees to and shall indemnify and hold Lessor and any of their agents, employees, successors and assigns, harmless from and against any and all claims, demands, damages, costs, expenses, liabilities, suits, interest, fines, penalties, judgments, liens, charges, and costs of defense, including, without limitation, reasonable attorneys ' fees and costs, resulting from or in connection with any such lien or claim of lien against the Premises or the Lessor's interest therein. County shall also pay, when due, or reimburse Lessor for all charges and taxes (local, state or federal) and any related interest or penalties which may now or hereafter be imposed upon the ownership, leasing, rental, sale, possession or use of the Premises, excluding however all taxes on or measured by Lessor's net taxable income. If County fails to pay said charges or taxes when due, Lessor shall have the right, but shall not be obligated, to pay said charges and taxes . In the event Lessor has paid such charges or taxes, County shall pay immediately to Lessor any amounts advanced upon behalf of County. Lessor shall cooperate with County in filing any exemptions from taxes available to the County, provided that Lessor shall not be responsible for preparation or initiation of such exemption applications. Section 13. Assignment and Subleasing. Assignment by Lessor. This Lease, and the obligations of County to make payments hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees (INCLUDING HOLDERS OF CERTIFICAT'E OF PARTICIPATION, PAYING AGENTS OR TRUSTEES) by Lessor at any time subsequent to this execution, without the necessity of obtaining the consent of County; provided, however, that no such 13 assignment or reassignment shall be effective unless and until County shall have received notice of the assignment or reassignment disclosing the name and address of the assignee or subassignee. Upon receipt of notice of assignment, County agrees to reflect in a book entry the assignee designated in such notice of assignment, and to make all payments to the assignee designated in the notice of assignment, notwithstanding any claim, defense, set-off or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise) that County may from time to time have against Lessor, or the assignee. County agrees to execute all documents, which may be reasonably requested by Lessor or its assignee to protect their interests in the Premises and in this Agreement. Upon assignment by the Lessor, County shall make payments only to assignee or a designated agent of assignee. County expressly acknowledges and consents to the issuance by the Lessor of Certificate of Participation in this Lease or any amendments hereto through a private offering arranged by the Lessor. LESSOR HAS DETERMINED THAT IT SHALL DECLARE ITSELF AGENT ON BEHALF OF REGISTERED OWNERS OF CERTIFICATE OF PARTICIPATION to be issued pursuant to a Paying Agency Agreement between Lessor and First National Bank of Central California or East County Bank, N.A. , as paying agent or any successor paying agent. Pursuant to the Paying Agency Agreement, Lessor has agreed to maintain a register containing the names and addresses of such registered owners . Lessor hereby agrees that upon execution and delivery of the Paying Agency Agreement it will provide a confirmation of same to County. No Sale, Assignment or Subleasing by County. THIS LEASE AND THE INTEREST OF COUNTY IN THE PREMISES MAY NOT BE SOLD, ASSIGNED, SUBLEASED, MORTGAGED, PLEDGED, TRANSFERRED OR ENCUMBERED BY COUNTY BY VOLUNTARY ACT OR OPERATION OF LAW OR OTHERWISE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, EXCEPT THAT COUNTY MAY SUBLEASE THE PREMISES OR A PORTION THEREOF WITHOUT CONSENT TO AN ORGANIZATION WHICH PROVIDES SERVICES ON BEHALF OF THE COUNTY THAT THE COUNTY IS REQUIRED TO PROVIDE AND PROVIDED SUCH ORGANIZATION DOES NOT AFFECT ADVERSELY IN ANY MANNER THE EXCLUSION OF INTEREST AFFORDED LESSOR AND ITS ASSIGNEES UNDER SECTION 103 OF THE INTERNAL REVENUE CODE. ANY CONSENT IN THE CASE OF SUBLETTING OR ASSIGNMENT SHALL NOT BE UNREASONABLY WITHHELD BY LESSOR AND SHALL BE SUBJECT TO ASSUMPTION BY THE NEW ASSIGNEE OR SUBLESSEE OF COUNTY OF ALL TERMS OF THIS LEASE, AND COMPLIANCE WITH THE TERMS THEREOF. ANY SUBLEASE SHALL BE SUBORDINATE TO THIS LEASE AND SHALL NOT AFFECT ANY OBLIGATIONS OF COUNTY HEREUNDER, AND COUNTY SHALL EXECUTE AND FILE SUCH EVIDENCES OF ASSIGNMENT AS REASONABLY REQUESTED BY LESSOR. ANY ASSIGNMENT, SUBLEASE, MORTGAGE, PLEDGE, TRANSFER OR ENCUMBRANCE IN VIOLATION OF THIS SECTION SHALL BE NULL, VOID, AND OF NO EFFECT WHATSOEVER, EXCEPT THE SAME SHALL: CONSTITUTE A DEFAULT HEREUNDER, UNLESS CURED BY COUNTY WITHIN THE TIME PERIOD SPECIFIED IN THIS LEASE. 14 County shall provide Lessor with a copy of any sublease prior to its execution, together with a certificate confirming that the sublease does not impair the interests of Lessor hereunder, including its security interest, and does not affect adversely the treatment of Lessor under Section 103 of the Internal Revenue Code, as amended. Section 14 . Option to Purchase; Defeasance As part of the consideration for this Lease, Lessor hereby grants to County or its successors or assigns as approved by Lessor, the exclusive option to purchase the real propertydescribed in Exhibit A, attached hereto and made a part hereof, on the terms and conditions in this Section. The term of this Caption shall commence on the effective date of this Lease and shall expire December 1, 2013, unless extended in writing by both parties ("Option Term") . It is specifically intended by the parties that this Option shall survive the expiration of this Lease. If at time of exercise, County is not in default of this Lease in Section 10, this Option may be exercised from and after the Effective date, by County's delivering to Lessor, before the expiration of the Option Term, written notice of the exercise ("Exercise Notice") ; provided, however, that failure to do so shall not cause County to forfeit the Option unless and until Lessor provides sixty (60) days prior written notice to the County's Lease Manager that the County exercise or forfeit such right and County refuses to confirm its intentions hereunder. The purchase price shall be an amount equal the Prepayment Purchase Option amount as set forth on Schedule B hereof (plus Pro Rata Rent, all costs or expenses incurred by Lessor in effecting the transfer herein (including any escrow, title fees, transfer charges, taxes, incidental charges and unpaid property tax on the Premises)and any other sums due hereunder. Following payment of the amount set forth above, Lessor shall provide County with a deed as provided in Section 9 hereof. Upon the making of the payment specified above to Lessor, the term of this Lease shall end, except for the indemnity provisions and other provisions which Survive the termination of this Lease. County shall have the option of paying the purchase price for the Premises, following exercise of its option, by irrevocably depositing into escrow with a defeasance escrow agent for the purpose of paying all of the principal component and interest component accruing for the Premises, a sum of cash and non-callable securities consisting of direct obligations of, or obligations the principal of an interest on which are unconditionally guaranteed by, the United States of America or any agency or instrumentality thereof, in such aggregate amount, bearing interest at such rates and maturing on such dates as shall be required to provide funds sufficient for this purpose. Upon such defeasance, all right, title and; interest of Lessor in the Premises shall terminate, and Lessor shall cooperate with County to execute all documents which may be reasonably requested 15 by County or its assignee to protect their interests it the Premises. County shall cause such investment to comply with the requirements of federal tax law so that the exclusion from gross income of the interest component of Rental Payments is not adversely affected. Section 15. Quiet Enjoyment. The parties hereto mutually covenant that the County, so long as it keeps and performs the covenants and agreements herein contained and is not in default hereunder, shall at all times during the term of this Lease peaceably and quietly have, hold, and enjoy the Premises without suit, trouble or hindrance from the 'Lessor or any person claiming title through Lessor. Section 16. Lessor Not Liable. Lessor and its agents and employees shall not be liable to 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 Premises. County shall indemnify and hold Lessor and its agents and employees harmless from, and defend each of them against, any and all claims, demands, damages, costs, expenses, liabilities, suits, interest, fines, penalties, judgments, liens, charges, and costs of defense, including, without limitation, , reasonable attorneys ' fees and costs, resulting from or in connection with the death of or injury to any person or damage to property whatsoever occurring in, on or about the Premises, or arising out of County's failure to perform fully and promptly, or County's postponement of compliance with and every term, covenant, and condition provided herein to be performed by County. Section 17 . Purpose. County covenants that during the term of this Lease, except as hereinafter provided, (a) it will use, or cause the use of, the Premises for public purposes and for the purposes for which the facilities are customarily used, (b) it will not vacate or abandon the Premises any part thereof, and (c) it will not make any use of the Premises which would jeopardize in any way the insurance coverage required to be maintained pursuant to Sections 5, 6, 7 and 8 hereof. County will not make any use of the proceeds of the obligations provided herein or any other funds of the County which will cause such obligations to be "arbitrage bonds, " within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (herein the "Code") , to be "federally guaranteed" within the meaning of Section 149 (b) of the Code, or to be a "private activity bond" within the meaning of Section 141 (x) of the Code. To that end, so long as any Rental Payments are unpaid, the County, with respect to such proceeds and such other funds, will comply with all requirements 16 of such Code sections 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 will not use or permit the use of the Premises by any person for "private business use, within the meaning of Section 141 (b) of the Code 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. Section 18. Waiver. Failure of Lessor to take advantage of any 'default on the part of County, or of County to take advantage of any default of Lessor, 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 Lease be construed to waive or to lessen the right of the party to whom the obligation is to be performed to insist upon full performance thereof, or to exercise any rights given such party 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 or payment of Rental hereunder shall not be, nor be construed to be, a waiver of any term, covenant or condition of this Lease. Section 19. 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 20. Law Governing; Venue. This Lease shall be governed exclusively by the provisions hereof and by the laws of the State of California, excluding its conflicts of law provisions, as they may exist from gime to time. Venue for all disputes arising under this Lease shall be the courts of general jurisdiction in Contra Costa County, California. Section 21. 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 (whether by courier or package express) , by electronic mail or if mailed, by United States registered or certified mail, return receipt requested, postage prepaid, and, if to Lessor, addressed to Lessor at 111 Anza Boulevard, Ste. 107, Burlingame, CA 94410, (650) 342-2266, fax: (654) 342-971.9, e:mail: JGCooperm.a@aol.com, or if to County, addressed to County at 1220 Morello Avenue, Suite 100, Martinez, CA 94553, (925) 313-7250, fax: (925) 313-7299, email: 17 cchan@gs.co.contra-costa.ca.us, or to such other addresses as the parties may give notice to each other. Any notices personally delivered shall be treated as received when delivered; any notices mailed shall be deemed to be received within 96 hours after placement in the mails; and any notices sent by electronic mail shall be deemed to be received within 48 business hours after being sent by the other party. Section 22 . Validity and Severability. If for any reason this Lease or any part thereof shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by Lessor or County, all of the remainingterms of this Lease shall nonetheless continue in full force and effect. 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 Rental and additional rent hereunder, is unenforceable for the full term hereof, and Lessor does not waive such covenant or condition, then and in such event this Lease is and shall be deemed to be a lease with a periodic term of one (1) year at the rental (as specified in Exhibit B) and on terms, covenants and conditions substantially the same as those contained herein including, without limitation, the vesting of title in the County when the principal component of Rental has been fully paid and the option to purchase for the purchase price set forth on specific dates in Exhibit B, with a term commencing as of the date of entry of final judgment and automatically renewing for a period not to exceed fifteen (15) years unless six (6) months written notice is given by the County to the Lessor prior to the end of each such one (1) year term. The rent for each such one (1) year lease shall be set at an amount equal to the Rental payable hereunder and shall be paid semi-annually in arrears on each July 1 and January 1 in consideration of the right of the County to possess, occupy, and use the Premises, and all of the other terms, provisions, and conditions of this Lease, except to the extent that such terms, provisions, and conditions are contrary to and inconsistent with such holding, shall remain in full force and effect, including, without limitation, County's option to purchase the Premises. 18 Section 23. Net Lease. This Lease shall be deemed and construed to be a "net lease" and County hereby agrees that the rents provided for herein shall be an absolute net return to Lessor, free and clear of any expenses, charges, recoupments, set-offs, counterclaims, claims or accruals whatsoever. Section 24 . Attorneys' Fees . If there is any legal action or proceeding between Lessor and County to enforce any provision of this Lease or to protect or establish any right or remedy hereunder, the unsuccessful party to such action or proceeding shall pay to the prevailing party all costs and expenses, including reasonable attorney's fees or their equivalent when legal services are rendered by staff attorneys, incurred by such prevailing party in such action or proceeding and in any appeal in connection therewith. If such prevailing party recovers a judgment in any such action, proceeding or appeal, such costs, expenses, and attorneys' fees shall be included in and as a part of such judgment. Section 25. Memorandum. Upon full execution of this Lease the parties shall cause a memorandum of lease ("Memorandum of Lease") in the form of Exhibit F attached hereto and made a part hereof, and otherwise satisfactory in form and substance to County, to be recorded in the office of the County Recorder of Contra Costa County, California. Section 26. Title Insurance and Bond Counsel Opinion. Obligations of the parties hereunder shall be null and void if a major reputable title company reasonably acceptable to both parties declines to issue a title insurance policy in the amount of a minimum of $1,200,400, insuring the ownership of the Premises and the priority of this Lease, subject only to the exception of property taxes in the present year and such other exceptions as are acceptable to both parties. The obligations of Lessor hereunder are also subject to receipt by Lessor of the opinion of counsel for the County, in form reasonably acceptable to Lessor, respecting the validity and enforceability of this Lease and the opinion of special tax counsel to Lessor in customary form as to the exclusion of the interest component of the Rental Payments from gross income for federal and State of California income tax laws. 19 Section 27. Characterization of Lease. Lessor has notified County. that Lessor intents to treat this Lease as an installment sale for federal income tax law purposes. The parties agree, however, that such treatment shall in no way change characterization of this Lease as a lease with an option to purchase under the laws of the State of California and not as an installment sale. Section 28 . Authority. The individuals executing this Lease on behalf of the respective parties hereunder represent and warrant that they have full power and authority to execute and deliver this Lease and that there are not other parties with interests in this Lease and Premises. [Signatures on page fallowing] 20 ...................... IN WITNESS WHEREOF, the Lessor has caused this Lease to be executed in its name by its duly authorized officers, and the Lessee has caused this Lease to be executed in its name by its duly authorized officers, as of the date set forth below. COUNTY OF CONTRA COSTA TRANSOCEAN FINANCING CORPORATION COUNTY OF CONTRA COSTA, a TRANSOCEAN FINANCING CORPORATION subdivision of the State of California Chair, foird of 4upervisors. ; Pres,iden RECOMMENDED FOR APPROVAL: By: ector, Cspi a Facilities ties Debts Management rj By: Deputy y neral es Director By: Lease Manager APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel eputy Counsel EXHIBIT A COUNTY OF CONTRA COSTA FACILITY LEASE DATED AS OF JULY 1, 1998 SCHE12ULE OF PROPERTY The Property which is the subject of the attached MASTER LEASE/PURCHASE OPTION AGREEMENT is as follows: 10,611 square foot psychiatric hospital facility and 1.55 acres of land associated with the facility, commonly know as 1034 Oak Grove Road, Concord, CA, APN 129-190-012, -043 and -044, as further described below: PARCEL ONE: Portion of Lot 9, Map of Williams Walnut Division, filed June 21, 1910, Map Book 3, Page 57, and Parcel "A" as said Parcel is shown on Subdivision 4866, filed March 11, 1977, Map Beak 193, Page 37, said Lot 9 (3 M 57) and said Parcel "A" (193 M 37) are shown upon the record of survey filled August 11, 1988 in book 88 of L.S.M. at Page 23, Contra Costa County Records, described as follows: Beginning in the center line of the County Road known as Oak Grove Road at the Northwest line of the parcel of land described in the Deed to Ira F. Eckert, et ux, regarded January 14, 1955, Book 2457, Official Records, Page 559; thence from said point of beginning South 350 111 1011 East, along said center line, 181.86 feet to the Southeast line of said Eckert Parcel; thence North 510 471 11t1 East along said Southeast line 230.06 feet to the Southern corner of said Parcel "A" (193 M 37) ; thence along the South Eastern line thereof North 510 47111!1 East, 120.37 feet to the Eastern corner of said Parcel "A", thence along the Northeastern line thereof North 350 12'49i1 West, 87.00 feet; thence along said Northeastern line North 110 021 4711 East, 38.76 feet to the Northern corner of said Parcel "A"; thence leaving said Northern corner along the Northern line of said Parcel "A" South 470 001 3211 West, 1.43 feet; thence leaving said Northern line North 350 111 1011 East; 101.34 feet to the Northwest line of said Eckert Parcel; thence along said Northwest line South 470 001 32t1 West, 380.00 feet to the point of the beginning. EXCEPTING THEREFROM that portion thereof lying within Oak Grove Road, described as follows: Portion of Lot 9, Map of Williams Walnut Division, filed ,lune 21, 1910, Map Book 3, Page 57, Contra Costa Records, described as follows: Beginning in the centerline of the County Road known as Oak Grove Road at the Northwest line of the parcel of land described in the Deed to Ira F. Eckert, et ux, recorded January 14, 1955, Book 2457, Official Records, Page 599; thence from said point of beginning South 350 111 10" East, along said center line, 181.86 feet to the Southeast line of said Eckert Parcel; thence along said Southeast line North 510 471 11/1 East, 42.06 feet; thence leaving said southeast line North 350 111 1011 West, 285.40 feet to the Northwest line of said Eckert Parcel; thence along said Northwest line south 470 001 32t1 West, 42.39 feet to the point of beginning. Exhibit A PARCEL TWO: An easement granted in the Deed to Bob R. Wilcox, et al, recorded April 1, 1977, Book 8266, Page 517, Official Records, for Storm Drainage over the Northwesterly 10 feet of Lot 6 as shown on the Map of Subdivision 4865, filed March 11, 1977, Map Book 193, page 37, Contra Costa County Records. (Being AAAI 129-190-012, 043 & 044) r"IBIT B COUNTY OF CONTRA COSTA, FACILITY LEASE DATED AS OF JULY 11 1998 }yy This Exhibit applies to Premises set forth on Exhibit A Payment Maturing Prepayment paymat Date Ammt kr noir e1 Interest Purchase Wim* 01/01/99 $31,769.00 $31,769.00 07/01/99 $4,769.00 $53, 000.00 31,769.00 $1, 155,751 01/01/00 30,391.00 30,391.00 07/01/00 86,391.00 56,000.00 30,391.00 1,098,015 01/01/01 28, 935.00 28,935.00 07/01/01. 87,935.00 59,000.00 28,935.00 1, 037, 186 01/01/02 27,401.00 27,401.00 07/01/02 89,401.00 62,000.00 27,401..00 973,254 01/01/03 25,789.00 25,789.00 07/01/03 90,789.00 65,000.00 25,789.00 ' 906,249 01/01/04 24, 099.00 24, 099.00 07/01/04 93,099.00 69,000.00 24,099.00 835,110 01/01/05 22,305.00 22,305.00 '> 07/01/05 94,305.00 72, 000.00 22,305.00 760,878 01/01106 ' 20,433.00 20,433.00 07/01/06 96,433.00 76,000.00 20,433.00 ' 682,522 01/01/07 18,457.00 18,457.00 07/01/07 98,457.00 80, 000.00 18,457.00 600,042 01/01/08 16,377.00 16,377.00 ' 07/01/08 100,377.00 84, 000.00 16,377.00 513,438 01/01/09 14, 193.00 14, 193.00 07/01/09 103,193.00 89,000.00 14,193.00 417,180 01/01/10 11,656.50 11, 656.50 07/01/10 105,656.50 94,000.00 11,656.50 321,300 01/01/11 8,977.50 8,977.50 07/0.1/11 107,977.50 99,000.00 8,977.50 220,320 01/01./1.2 6,156.00 6,1.56.00 07/01/1.2 1111156.00 105,000.00 61156.00 113,220 01/01./13 3,163.50 3,163.50 07/01/13 114, 163.50 1.11,000.00 3,163.50 1.00 $1,754,205.04 $1,174,000.00 $580,205.00 Exhibit B * Assumes payment on this date has been made. Approved. County of Contra Costa &&14 h Mw-k Director of General Services 2. ........-..................................................................................................................................................................... .............................................................................................. . ...... ............... VICTOR J.WESTMAN DEPUTIES: CONTRA COSTA COUNTY PHILIP S,ALTHOFF COUNTY COUNSEL JANICE L.AMENTA OFFICE OF THE COUNTY COUNSEL SHARON L.ANDERSON ANDREA W.CASSIDY ARTHUR W.WALENTA,JR. COUNTY ADMINISTRATION BUILDING VICKIE L.DAWESMARKE S.ESTIS ASSISTANT COUNTY COUNSEL 651 PINE STREET,9th FLOOR MICHAEL D.FARR MARTINEZ, CALIFORNIA 94553-1229 LILLIAN T.FUJI1 DENNIS C.GRAVES SILVANO B.MARCHESI GREGORY C.HARVEY ASSISTANT COUNTY COUNSEL JANET L.HOLMES KEVIN T KERR GAYLE MUGGLI BERNARD L.KNAPP EDWARD V.LANE.JR. OFFICE MANAGER MARY ANN MASON PAUL R.MUNIZ PHONE(925)335-1800 VALERIE NORGAARD OPINION OF COUNSEL VALERIE J.RANCHE FAX(925)646-1078 DAVID F.SCHMIDT DIANA J.SILVER BARBAA N.SUTLIFFE July 15, 1998 JACQUEALINE Y.WOODS Lessee: COUNTY OF CONTRA COSTA 1220 Morello Avenue, Ste. 100 Martinez,CA 94553 Lessor: TRANSOCEAN FINANCING CORPORATION 111 Anza Blvd., Suite 107 Burlingame, CA 94010 RE: FACILITY LEASE dated as of July 1, 1998, by and between Transocean Financing Corporation ("Lessor") and COUNTY OF CONTRA COSTA ("Lessee") for the Premises located at 1034 Oak Grove Road,Concord,California Ladies and Gentlemen: I have acted as counsel to the Lessee with respect to the FACILITY LEASE described above(the "Lease")and various related matters,and in this capacity have reviewed a copy of the Lease and the Exhibits attached thereto. Based upon the examination of these and such other documents as I deem relevant,it is my opinion that: 1. Lessee is a political subdivision of the State of California (the "State"), duly organized, existing and operating under the constitution and laws of the State. 2. Lessee is authorized and has the power under State law to enter into the Lease,and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Lease has been duly authorized, approved, executed by and on behalf of Lessee,and, when delivered by Lessee, is a valid and binding contract of Lessee enforceable in accordance with its terms,except to the extent limited by State and Federal laws affecting remedies and bankruptcy,reorganization or other laws of general application relating to or affecting the enforcement of creditors'rights. 4. The authorization, approval and execution of the Lease and all other proceedings of Lessee relating to the transaction contemplated thereby have been performed in accordance with all open meeting,public bidding and other laws,rules and regulations applicable to the Lessee. ..................I...............I.............................. ........- ............................................................................................... Opinion of Counsel 1034 Oak Grove Road July 14, 1998 Page 2 of 2 S. The execution of the Lease and the appropriation of monies to pay the Rental Payments coming due thereunder,do not result in the violation of any constitution,statutory or other limitation relating to the manner,form or amount of indebtedness which may be incurred by Lessee. 6. To the best of my knowledge,having performed reasonable diligence and investigation,I am not aware of any litigation, action, suit or proceeding pending or before any court, administrative agency,arbitrator or governmental body,that challenges the organization or existence of Lessee;the authority of its officers,the proper authorization, approval and/or execution of the Lease, the Exhibits and other documents contemplated thereby; the appropriation of monies,or any other action taken by Lessee to provide monies sufficient, to make Rental Payments under the Lease;the performance by Lessee of all its obligations under the Lease;the enforceability and enforcement of the Lease against the Lessee;or the ability of Lessee otherwise to perform its obligations under the Lease and the transactions contemplated thereby. Very truly yours, Victor J. Westman unty Co aron Berson Deputy County Counsel SLA:la EXHIBIT D COUNTY OF CONTRA COSTA FACILITY LEASE DATED AS OF JULY 1, 1998 CERTIFICATE OF ESSENTIAL USE The undersigned, as Director of General Services, of COUNTY OF CONTRA COSTA (the "Lessee") , hereby certifies that the Premises describers in Exhibit A to FACILITY LEASE dated as of July 1, 1998, with Transocean Financing Corporation (the "Lease") is essential to the functions of the Lessee or to the services the Lessee provides. Further, the Lessee has an immediate need for, and expects to make immediate use of, all such Premises, the need for which is not temporary or expected to diminish in the foreseeable future. Such Premises will be used by the Lessee only for the purpose of performing one or more governmental or proprietary functions consistent with the permissible scope of authority. Specifically, such Premises was selected by the Lessee to be used for the following governmental purposes: 1. Mental health and psychiatric programs 2. Medical programs 3. 4. This Exhibit relates to Exhibit A to the Lease. COUNTY OF CONTRA COSTA, as Lessee B Get y� Director of General Services Date: July 1, 1998 Exhibit E (p9. 1 of 7) TO: HOARD OF SUPERVISORS oiti` 1. FROM: Barton J. Gilbert, Director of general Services - ti t County DATE: May 19, 1998 SUBJECT: Approval of Revisions to Resolution No. 96/294 in Regards to The Financing and Master Lease of 1434 Oak Grove Road, Concord with Transocean Funding Inc, SPECIFIC REQUESTS OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION 1, �QM_MENDATION APPROVE revisions to Resolution No. 96/294 approved by the Board of Supervisors on June 11, 1996 to reflect the following: change all references from "July 1, 1996"to"May 1, 1998", all references from "1996" to "1998"; change "Cypress Coast Bank as Paying Agent" to "East County Bank, N.A. of Antioch as Paying Agent'; and change the proviso in ;fiction 5 to the following: "provided, however, that the aggregate principal component of the base rental payments under the Facility Lease shall not exceed $1,500,000, the maximum annual interest rate shall not exceed 6 % and the term of the Facility tease shall not exceed seventeen (1'7) years." II. FIN ISA L;IMpACT The projected net debt service cost for lease of this facility is less than the rent costs budgeted within the Health Services Department. Ill. RCC:ASSN-S-F-0J .RESTS}NMF-RDPffII;-NMACEGRt UN.>w►_ On June 11, 1996, the Board of Supervisors approved the execution and delivery of Assignment of Purchase Option to Transocean Funding, Inc. in connection with the acquisition of 1€3334 Oak Grove Road, Concord, CA. This facility is used for the provision of children's outpatient and Inpatient mental health services. The Board adopted Resolution No. 96/294 which approved the assignment of the purchase agreement, approved the forms of and execution of a Master Facility Lease Agreement, approved the forms and distribution of the sale of Certificates of Participation, and authorized the County Administrator or designee to take necessary actions in the execution of all documents. Upon the Beard's June 11, 1996 approval, Transocean Funding, Inc. notified the Lessor, Century Health Care Corporation, that Transocean was exercising the purchase option on behalf of Contra Costa County. Century Health Care Corporation was then required to perform by delivering title to the facility free of all encumbrances and liens. However Century Health Care was never able to;deliver clear title" With the recent past, the circumstances have changed and it is anticipated that Century Health Care Corporation will now be able to deliver clear title. Resolution No 96/294 is required to be updated to reflect the current dates. In addition revisions are also required to reflect a change in the Paying Agent to a local financial institution and to provide for maximum flexibility in selection of financing option terms. CONTINUED ON ATTACHMENT: YES SIGNATURE. RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON MAY 19 1998 APPROVED AS RECOMMENDED OTHER_ VOTE O€SUPERVISORS UNANIMOUS(ABSENT _ 1 AYES: NOES: ABSENT: ABSTAIN: I HEREBY CERTIFY THAT THIS IS A TRITE AND CORRECT COPY OF AN ACTION TAKEN MEDIA CONTACT: BARTON J.GILBERT{313.7100} AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. CC: County Administrator{via UM} ATTESTED MAY 191998 County Auditor-Controlier(via UM) PHIL BATCHELOR,CLERK OF THE BOARD OF Lessor{via UM} County Counsel{via UM} SUPERVISORS AND COUNTY ADMINISTRATOR Risk Management(via UM) Odg:General Services Department-UM ~* BY #A Of a 4 ,DEPUTY M382 (10/88) ................................................................... ............... ...........................................................- To. BOARD OF SUPERVISORS Exhibit E (pg. 2 of 7) . Contra FROM: Phil Batchelor, County Administrator Costa June 11, 1996 Rescission of County's Intent to purchase real property located at I RoC&ounty DATE: Concord; Cancellation of June 11, IM Hearing to consummate p+urch roval of Assignment of Purchase Option for 1034 Oak Grove Road,Concord,to TransOoean Funding,Inc. SUBJECT: and Approval of Lease-Purohase Agreement with Trans0cean Funding,Inc. SPECIFIC REQUEST($)OR RECOMMENDATION($)&BACKGROUND AND JUSTIFICATION RECOIAMEWL&TM 1 RESCIND the notice of the County's intent to purchase real property located at 1034 Oak Grove Road, Concord (item C.29 of the Board of Supervisors May 7, 1996 agenda)and CANCEL the scheduled 9:45 a.m. Public Hearing on June 11, 1996 for consummation of purchase; and HOLD Public Hearing at same time and date (9.45 a.m. on June 11, 1996) on proposed lease-purchase financing of this facility. 2. AFFIRM that the Board opened said Public Hearing, heard all comments, and closed said hearing. 3. ADOPT Resolution attesting to hearing and APPROVING the execution and delivery of Assignment of Purchase Options to Transocean Funding, Inc. in connection with the Acquisition of 1034 Oak Grove Road, Concord, CA. 4. DETERMINE that the County will have long term occupancy of this facility and the lease purchase is in accordance with Board policy to obtain ownership and stabilize space costs. 5. AUTHORIZE the Chairman, Board of Supervisors, or his designee to execute all documents and contracts necessary to complete this lease purchase transaction. CONTINUED ON ATTACHMENT! L.YES SIGNATURE: (,� � lir RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE _OTHER SIGNATURRISI: `1eACTION OF BOARD ON 1770 APPROVED AS RECOMMENDED OTHER VOTE Of SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE XX_UNANIMOUS(ABSENT AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES Of THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED june .11, 1996 Contact: PHIL BATCHELOR.CLERK OF THE BOARD OF cc: See Page 2 SUPERVISORS AND COUNTY ADMINISTRATOR By DEPUTY Exhibit E (pg. 3 of 7) FJt�1A `ELAL IIVtPACT The County has an ongoing Luse obligation for the facility located at 1034 Oak Grove Road, Concorde. The lease costs are fully budgeted within the Health Service Department current year's budget and proposed 1906-97 year budget. The projected net debt.service cost for lease-purchase of this facility is less than the budgeted rent in the current ongoing Lease. The department anticipates need of this facility on a long term basis. Board approval of this lease purchase agreement represents a continuation of the Board's commitment for ownership and stabilization of space costs in those facilities which will have long term County occupancy. The Board of Supervisors action on May'7, 1996 approving a Declaration of Intent to Purchase Real Property located at 1434 Oak Grove Road, Concord, is rescinded since the current recommended action assigns the Purchase Option to Transocean Funding, Inc.for financing purposes. Transocean Funding, Inc.will exercise the purchase option and lease the facility back to the County at a tax exempt financing Interest rate. The County costs of the lease back are equal to the financing costs for Transocean Funding, This mechanism allows the County to acquire the property over the term of the lease using tax exempt financing. The facility located at 1034 Oak Grove road, Concord, is subleased to FamiliesFirst, Inc., who provide children's outpatient and inpatient mental health services on behalf of the Health Services Department. Significant benefits are realized since the children are being treated within their own county of residence and thus avoiding more costly out of County residential treatmentfacilities. Contact:Carol Chan, Capital Facilities Analyst(646-1021) cc:CAO County Counsel General Services Health Services Dept. 3 SD, r Exhibit E 4 0 7) THE BOARD OF SUPERVISORS,CONTRA COSTA COUNTY,CALIFORNIA Adopted this Resolution on June 11, 1996 by the following vote: AYES: Rogers, Bishop, De Saulnier, Torlakson, Smith NOES: None ABSENT None RESOLUTION NO.96/294 SUBJECT: Resolution Approving Execution and Delivery of Assignment of Purchase Option to Transocean Funding,Inc. In Connection With Acquisition and Improvement of the Project, Approving Forms of and Execution of A Master Facility Lease Agreement("Lease")and Escrow Agreement; Approving Forms and Distribution of Preliminary Limited Offering Memorandum for the Sale of Certificates of Participation in the Lease by Union Bank of California,N.A.; and Authorizing the County Administrator or his Designee Taking Necessary Actions and Executing of Necessary Certificates. WHEREAS,the County of Contra Costa(the "County") is a political subdivision of the State of California; WHEREAS,this Board of Supervisors hereby determines that it would be in the best interest of the County and the residents of the County to enter into a facility lease financing for the purpose of acquiring and improving 1034 Oak Grove Road, Concord,CA. (referred to as"The Project"); WHEREAS,a public hearing was duly noticed,called and held pursuant to the requirements of the Internal Revenue Code of 1986, as amended on the Project; WHEREAS the County has entered into an agreement with FarniliesFirst,Inc. a California nonprofit corporation, for use of 1034 Oak Grove Road,Concord,CA, for a Children's Mental Health Facility; WHEREAS,Transocean Funding,Inc. ("Corporation")will finance the acquisition, construction and improvement of the Project by and on behalf of the County through issuance of Certificates of Participation; WHEREAS,it is proposed that the County assign its purchase option in connection with the Project to the Coorporation; WHEREAS, it is proposed that the Corporation will acquire the Project and will lease the Project to the County pursuant to a document entitled "Master Facility Lease Agreement,"to be dated as of July 1, 1996(the "Facility Lease"); WHEREAS ,under the Facility Lease,the County would be obligated to make base rental payments to the Corporation for the lease of the Project; WHEREAS, it is proposed that all rights to receive such base rental payments will be assigned without recourse by the Corporation to Cypress Coast Bank as Paying Agent(the"Paying Agent") pursuant to an Assignment to be dated as of July 1, 1996(the "Assignment"); WHEREAS,it is further proposed that the Corporation and the Paying Agent will enter into a Paying Agency Agreement,to be dated as of July 1, 1996, (the "Paying Agency'Agreement") pursuant to which the Corporation will execute and deliver Certificates of Participation (1996 Facilities Acquisition Project)in an amount equal to the aggregate principal components of such payments,each evidencing and representing a fractional undivided interest in such payments; WHEREAS,a form of A Limited Offering Memorandum, describing the 1996 Certificates will be distributed to potential purchasers of the 1996 Certificates; WHEREAS ,the Board has been presented with the form of each document, hereinafter referred to,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 the full legal right,power and authority to enter into the transaction hereinafter authorized;and 4 Exhibit E (Pg. 5 of 7) NOW,THEREFORE,BE IT-RESOLVED by the Board of Supervisors of the County of Contra Costa,as follow: S=fian-L The County hereby specifically finds and declared that the actions authorized hereby constitute and are with respect to public affairs of the County and that the statements, findings and determinations of the County set forth above are true and correct. Section 2- A public hearing was duly noticed, called and held pursuant to the requirements of the Internal Revenue Code of 1986,as amended,on a proposal that Contra Costa County enter into a lease-purchase agreement with Transocean Funding Inc. for the purpose of acquiring a health care facility which will be located at 1034 Oak Grove Road,Concord,CA. Contra Costa County has entered into an agreement with FamiliesFirst,Inc., a California nonprofit corporation,for use of 3034 Oak Grove Road,Concord,CA. for a Children's Mental health facility. 5ecticoAt the public hearing all interested persons were given an opportunity to appear and be heard and based on such hearing and such other facts and circumstances as-this Board deems relevant,this Berard hereby approves the entering into a lease-purchase agreement by Contra Costa County with Transocean Funding, Inc. with respect to the acquisition of 1034 Oak Grove Road, Concord,CA. The rental payments due pursuant to such lease-purchase agreement shall have a maximum total principal component of$1,500,000. S=tian..4. The assignment of the County's purchase option in connection with the Project to the Corporation is hereby approved and the Chairman of the Board of Supervisors and the Clerk of the Board of Supervisors, and their designees,are hereby authorized and directed to execute and deliver said assignment of purchase option to the Corporation,together with such amendments, modifications and changes to such purchase option as such officers may require or approve. Section 5. The form of Facility Lease between the Corporation and the County,dated as of July 1, 1996,on file with the Clerk of the Board of Supervisors, is hereby approved and the Chairman of the Board of Supervisors and the Clerk of the Board of Supervisors, and their designees,are hereby authorized and directed to execute and deliver said Facility Lease in substantially said form, with such changes therein as such officers may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof;provided, however,that the aggregate principal component of base rental payments payable under the Facility Lease shall not exceed$1,500,400,the maximum annual base rental payments payable under the Facility Lease shall not exceed$183,200,except for a final payment of$926,550 and the term of the Facility Lease shall not exceed eight(8)years. Section-& The form of the Preliminary Official Statement describing the 1996 Certificates,on file with the Clerk of the Board of Supervisors, is hereby approved. Transocean Funding,Inc. is hereby authorizedand directed to cause to be supplied to prospective purchasers of the 1996 Certificates copies of preliminary official statement in such form,with such additions,corrections and revisions as may be determined to be necessary or desirable by the County Administrator, County Counsel's Office,or Transocean, and to supply the purchaser for the 1995 Certificates with copies of a final official statement,completed to include,among other things,the interest rate or rates,and final msale inforation. The County Administrator,or his Designee, is authorized to certify on behalf of the County that the preliminary form of the official statement is deemed final as of its date,within the meaning of Rule 15c2-12 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 County Administrator,or his designee,is hereby authorized and directed to execute and deliver a final Official Statement in substantially said form.,with such additions thereto or changes therein as Transocean,County Counsel's Office may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof: Section 1. 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 cavy out,give effect to and comply with the terms and intent of this Resolution. The Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors and the officers of the County are hereby authorized and directed to execute and deliver any and all certificates,tax and rebate certificates,the letter of representations to The Depository Trust Company and certificates concerning the contents of the Official Statement distributed in connection with the sale of the 1996 Certificates,necessary and desirable to accomplish the transactions set forth above. 5 i a Exhibit E (P9, 6 of 7) Se iiH. All actions heretofore taken by the agents of the County with respect to the acquisition of the Project and the sale, execution and delivery of the 1996 Certificates are hereby approved and confirmed. SE film 9- The County hereby declares its official intent,solely for purposes of establishing compliance with the requirements of Section 1.150-2 of the United States Treasury Regulations,to use proceeds of the 1996 Certificates to reimburse itself for any County expenditures in connection with the Project incurred prior to the execution and delivery of the 1996 Certificates. i to*Y+e� %"oftbr V"rwl'ea�wt et + fbn rx wW .-ft.a on tnt ewwwr°t tAt of tuptn+bn�s on 1*ataJulie 11. I r ; tt+�.sxre�,.t�n Wrek a�.re$a�rwp��wor �r RESOLUTION NO. 96/294 6 Exhibit E (pg. 7 of 7) PROOF OF PUBLICATION NOTICE OF PUBLIC HEARING O (2015.5 C.C.P-) FI THE PROPOSED FINANCING OF A PROJECT COUNTY OF STATE OF CALIFORNIA CONTRA COSTA County of Contra Costa NOTICE IS HEREBY GIVEN I am a citizen Of the United States and a resident of the that the Board of Supervisors of the County of Contra Costa County aforesaid; i am over the age of eighteen years, Will moot n June sit,1996sat and not a party t0 or Interested in the above-entitled Martinez, California. in the matter. Board Chambers,Room 107, for the purpose of holding a I am the Principal Legal Clerk of the Contra Costa Times, public hearing pursuant to Section a newspaper of general circulation, printed and pub- Ina in at requirementsinter at Revenue 747(f}at tris internal Revertup lished at 2640 Shadeiands Drive In the City of Walnut Code of 1966, as amended, Creek, County of Contra Costa, 94598. on a proposal that a Into Carta County anter Into a lease-purchase agreement t. And which newspaper has been adjudged a newspaper with Transocean Funding! of general circulation by the Superior Court of the County Inc.,In ordarto ftna„ca a pro of Contra Costa, Stale of California, under the date of lett which wui be used b Fnt"WasFirst Inc.,anon-profit October 22, 2 934. Case Number 19764. corporation organized and existing under the taws of the The notice,of which the annexed is a printed copy(set in state of finace The pro- Jeal to bea Rnancad consists� type not smaller than nonparelQ, has been published in at the acquisition at a heaftm each regular and entire Issue of said newspaper and not care facility and Gr be Io at- ed at 103Oak Grove lRoad,I In any supplement thereof on the following dates,to-wit: Concord,California. . ..... ,L.�c. To project afinance trip costs of the ........................................................ project and to Pay costs and expenses Incidental to the fi- all In year of 2 9., nanDing,Contra Costa Cour- / ry proposes to enter Into the I certify (or declare) under penalty of perjury that the with Trans(paha purama59oDean agreemen Fundlnt 0. foregoing IS true and Correct. Inc.,in the maximum agggre- gate amount of 91,500,000. Executed at Walnut Cr k, Califomi Contra Costa County has an- tarso into First, agreement with Fam"IO day o 2 9.. Coraco s First,tnc,for the u59 of 1034 Oak Grave Road, �^�,r Concord.Caitfomfa?ar a Chfi- 1� .s1 T..................... dram's Mental Health facility. Blgnature The lease-purchase agree- ment shalt be a iimiited owi- Contra Costa'limes gation of Contra Costa Coun- P.O. Sox 4147 ty and tie rental payments Walnut Creek, CA 94596 Payabliee scisly thereunder them ri. (52 0) 935-2525eys tepropnoted annually by the Hoard at Supervisors of Proof of Publication of: Contra payment tt thn County for the heereof, i'he teese- (attaehed Is a copy of the legal advertisement that pub- purchase aoreemant shelf not constitute nor give rise to lisped) a charge against tie general credit or taxing powers of Contra Costa County. All persons interest may ap- pear and be meard at 9:43 a.m.,June 11,1998:651 Pine St.,Martinez,Callfornia In the Board Chambers,Room 107 or me the wntten comments watt the Clark of the Board, 651 Pine St.,Room 106,Mar- tinez. Caidomia, prior to the ate of the hearing set forth hereinabove. Date.,Mav 22,1996 Iy PHIL 3ATCHELOR,CLERK OF THE BOARD OF SUPERVI- SOBS AND COUNTY ACMIN- iSTRATCR BY ANN CEr7VELU,DEPUTY Legal CCT 7630 Foolish May 27,119518 7 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: County of Contra.Costa General Services Department Lease Management Division 1220 Morella Avenue, Suite 100 Martinez, CA 94553-4711 Attention: Carol Chan Memorandum Of Lease And Option to Purchase This Memorandum of Lease and Option to Purchase ("Memorandum") is dated as of JULY 16, 1998 , is entered into between TRANSOCEAN FINANCING CORPORATION, a California Corporation ("LESSOR"), and COUNTY OF CONTRA COSTA, a political subdivision of the State of California("COUNTY"). Recitals A. On or about JULY 1., 1998 LESSOR and COUNTY entered into a Lease ("Lease"), pursuant to which LESSOR leased to COUNTY and COUNTY leased from LESSOR real property, more particularly described in Exhibit A attached hereto and incorporated herein by reference ("Premises"), consisting of an approximately 10,600 square foot office building located at 1034 Oak Grove Road, Concord, CA., the land on which the building is placed and associated grounds, parking, landscaping and other related amenities. B. As more particularly set forth in the Lease, LESSOR granted to COUNTY an option to purchase said Premises. C. LESSOR and COUNTY desire to execute this Memorandum to provide constructive notice of LESSOR's and COUNTY's rights under the Lease, which includes an option to purchase, to all third parties. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: 1. Conveyance and Term By this Memorandum and that certain long form Lease between the LESSOR and COUNTY of even date herewith, LESSOR leases to COUNTY the Premises described in Exhibit A for a term of fifteen(15)years,commencing on July 1, 1998 , and ending on July 1, 2013. In addition, LESSOR grants to COUNTY an option to purchase the Premises, described in Exhibit A , together with all rights of LESSOR to adjoining streets, rights of way, easements, all other appurtenant rights and all personal property on the real property belonging to LESSOR (collectively the Premises). The purchase option right shall survive the term of the Lease 2. Lease Terms This terms of the Lease of the Premises to the COUNTY and the COUNTY's purchase option are set forth at length in the Lease which is incorporated in this Memorandum by reference. 3. Successors and Assigns This Memorandum and the Lease shall bind and inure to the benefit of the parties and their respective heirs, successors, and assigns, subject, however, to the provisions of the Lease on assignment. 4. Governing Law This Memorandum and the Lease are governed by California law. The venue for any dispute concerning this Lease shall be Contra Costa County, CA. Executed as of the date first above written. COUNTY: LESSOR: COUNTY OF CONTRA COSTA TRANSOCEAN FINANCING a political subdivision of the State of CORPORATION California. By: ZWM!4W B .Director of General Services JOSHUA G. coaPEE6SIDENT By APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel, By. eputy _. ......... ...... _.. _ .. _ ............ . ......... ......... ................ .. _ _. . ...._..__._ ._....... ......... .........._..._. . ................................................................................... ...._______.. .............................................................. .......................... State of California County of CONTRA COSTA On JULY 16, 1998 before me, the undersigned, a Notary Public in and for said State, personally appeared JOSHUA G. COOPERMAN-------------------- ------------------------------------------------- ----------------------------------------------------------------------------- personally }mown to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose names) is/are subscribed to the within instrument and acknowledged to m° that he/she/they executed the same in his/her/their authorized capacity(ies) , and that by his/her/their signature(s) on the instrument the person(s) , or the entity upon behalf of which the person(s) acted, executed the instrument. WI".[NESS my hand and official seal. y *" J. QUIGL EY � Eu Eti'. 0". Comm. #1124€317 " �N©TARY PUBLIC-CALIFORNIA) Signature CONTRA COSTA COUNTY 0 C(3Ci7tY1. Exp. Feb. $. 2001 -� Name J. QUIGLEY (typed or printed) (Seal) Exhibit G INCUMBENCY CERTIFICATE [NOT USED] I, , do hereby certify that I am the duly elected or appointed and acting County of the COUNTY OF CONTRA COSTA, that I have custody of the records of such entity, and that, as of the date hereof, the individual named below is the duly elected or appointed officer of such entity holding the office set forth opposite his or her name. I further certify that (i) the signature set opposite his name and title is his or her true and authentic signature and (ii) such officer has the authority on behalf of such entity to enter into that certain Facility Lease dated as of July 1, 1998, between such entity and Transocean Financing Corporation ("Lessor") and (iii) the authority is provided by a resolution of the Board of the Lessee or an internal policy of the Lessee. PRINTED NAME TITLE SIGNATURE IN WITNESS WHEREOF, I have duly executed this Certificate as of the first day of July, 1998. Authorized Signature Exhibit H NOTICE OF ASSIGNMENT Transocean Financing Corporation ("Lessor/Assignor") hereby gives notice to COUNTY OF CONTRA COSTA ("Lessee") , that Lessor has sold, assigned and transferred all Of Lessor's right, title and interest in, to and under (a) that certain Facility Lease dated as of July 1, 1998 (the "Agreement") , by and between Lessor and Lessee; (b) the property described in Exhibit A to the Agreement (the "Premises") ; and (c) all payments respecting the Premises now or hereafter due or payable pursuant to the Agreement, including (but not limited to) rental payments and purchase option payments, to bast County Bank, N.A., as paying agent on behalf of the registered owner of Certificate of Participation in the Lease. All payments should be made payable to Transocean Account No. 200016046, East County Bank, N.A., as paying agent, P.O. Boit 519, 1421 A Street, Antioch, CA 94509 (I.D. : 68-0058199) . . Lessee confirms that the Rental. Payments due according to the schedule set forth on Exhibit B to the Agreement remain as of the date sect forth below, and that no event of default (or event which with the ;passage of time or giving of notice or both would mature into an event of default) has occurred or is continuing under the Lease, and that there exists no defense, counterclaim, 3recoupment or similar occurrence (other than the right Of abatement of rent) which would cause the Lessee not to make the remaining payments due under the Agreement. Dated as of the first day of July, 1998. TRANSOCEAN FINANCING CORPORATION, as Lessor/Assignor By: Q Z President ACKNOWLEDGED AND ACCEPTED. COUNTY OF CONTRA COSTA, as Lessee By: --- Authorized Officer EAST COUNTY BANK, N.A., as paying agent By: Penny O'Conn Senior Vice ftoident, C.F.O. & C.A.O. (xinvwxd U**&*6 tYGld)