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HomeMy WebLinkAboutMINUTES - 03142000 - SD13 TO: BOARD OF SUPERVISORS FROM: Phil Batchelor, County Administrator Centra DATE: March 14, 2000 Costa County SUBJECT: APPROVAL OF ASSIGNMENTS OF PURCHASE OPTIONS AND APPROVAL OF LEASES WITH PURCHASE OPTIONS FOR 2047 ARNOLD INDUSTRIAL WAY AND 1034 OAK GROVE ROAD, CONCORD,CA WITH TRANSOCEAN FINANCING CORPORATION. i. RECOMMENDATION 1. HOLD a Public Hearing at 9:00 a.m. on March 14, 2000 on the proposed Facility Leases with Transocean Financing Corporation for 2047 Arnold Industrial Way and 1034 Oak Grove Road, Concord. 2. AFFIRM that the Board opened said Public Nearing, heard all comments, and closed said Hearing. 3. ADOPT a Resolution attesting to hearing and APPROVE the execution and delivery of Assignments of Purchase Option to Transocean Financing Corporation in connection with the Acquisition of 20147 Arnold Industrial Way and 1034 Oak Grove Road, Concord. 4. DETERMINE that the County will have long term needs for these facilities and the Facility Leases with purchase Options are in accordance with Board policy of obtaining ownership and stabilizing space costs whenever possible. 5. AUTHORIZE the County Administrator, the Director of General Services, or their designees to execute all documents and contracts and take all actions as required to complete the leases with purchase option transactions. F. DETERMINE that the lease with purchase option for 2047 Arnold Industrial Way project is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b) (3) and that the lease with purchase option for 1034 Oak Grove Road project is a Class 1(a) Categorical Exemption Under CEQA. 7. DIRECT the Community Development Department to file such notices with the County Clerk and APPROVE payment of processing and handling fees. CONTINUED ON ATTACHMENT:ZYES SIGNATURE: Y&U—, 7!, A� RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOA D COMMITTEE _ APPROVE —OTHER SIGNATURES: ACTION OF BOARD ON March 14 . 2000 —. _-- APPROVED AS RECOMMENDED OTHER---XX— The THERSThe hearing on this iters was CONTINUED to March 21 , 2000, at 10 : 00 a.m. VOTE OF SUPERVISORS XX UNANIMOUS(ABSENT -- AYES: NOES: ASSENTS: ABSTAIN: MEDIA CONTACT: Laura Lockwood 335-10193 1 HEREBY CERTIFY THAT THIS IS A TRUE CC: County Administrator(via UM) AND CORRECT COPY OF AN ACTION TAKEN County Auditor-Controller(via UM) AND ENTERED ON THE MINUTES OF THE BOARD Lessor(via UM) OF SUPERVISORS ON THE DATE SHOWN. Health Services Department(via UM) County Counsel(via UM) ATTESTED Mar C h 1.4. 2 0 Q 0_ -_—— Risk Management(via UM) PHIL BATCHELOR,CLERK OF THE BOARD OF Orig:General Services Department-UM SUPERVISO A D COUNTY ADM' ISTRATOR Buildings and Grounds(via UM) +U h AA BY ,DEPUTY CAMy Documents\1 034\1 034bdorder.doe 11. FINANCIAL IMPACT` The County has existing lease purchase agreements for both facilities, which are budgeted within the Health Services Department. The projected rental payment under the new Lease with Purchase Option for 20447 Arnold Industrial Way will be approximately $65,000 per year, which is slightly lower than the current annual rental amount. The projected rental payment for 1034 Oak Grove Road lease will increase by approximately $200,000 to reflect the financing of $2,000,000 in modifications and improvements at the site to meet state licensing requirements related to operating a locked mental health facility for adolescents. Funding for the increased rental payments at 1034 Oak Grove will come from Medi-Cal reimbursements. 111. BACKGROUND Board approval of the assignment of purchase options and subsequent Facility Leases for 2047 Arnold Industrial Way and 1034 Oak Grove Road will stabilize space costs and provide space for needed programs that serve the community. The Central County Homeless Shelter is located at 2047 Arnold Industrial Way, Concord. The County currently leases this facility from the Moran Family Trust. Due to a renegotiation of the existing loan on the building, the lessor has requested that the County exercise its purchase option in accordance with the lease provisions. The proposed Board action will assign the County's purchase option to be exercised by Transocean Financing Corporation. Transocean will then lease the facility back to the County. The new Facility Lease will be at the same term as the current lease and will have slightly lower monthly payments. Currently the County leases 1034 Oak Grove Road from Transocean Financing Corporation. This facility had been operated by contract as a mental health residential facility for adolescents. Changes in legislation now allow the County to develop a locked facility for the most severely disturbed adolescents. This facility will result in significant benefits to these adolescents who are now placed in hospitals throughout the State and in out-of-State locations. Transocean Financing Corporation will refinance the existing debt on the property and will finance $2,000,000 in improvements to the facility, including construction of an additional classroom and office building. During the term of both Facility Leases with Transocean Financing Corporation, the County has a right to purchase either facility for the price stipulated in the rental payment schedule. At the end of the lease term, the County has the right to purchase both facilities for $1.00 each. CAMy Documents\1034\1034bdorder.doc GENERAL SERVICES DEPARTMENT 5 0,/ LEASE MANAGEMENT DIVISION 1220 Morello Avenue, Suite 100 Martinez, California 94553-4711 Extension 3-7250 FAX 3-7299 DATE: March 8, 2000 TO: Phil Batchelor, County Administrator FROM: Barton J. Gilbert, Director of General Services SUBJECT: Ate: Facility Lease Authorizations-2047 Arnold Industrial Way, 1034 Oak Grove Road, Concord (March 14, 2000 Board Agenda) Options to purchase for both of the existing leases for the above subject facilities will be assigned to and exercised by Transocean Financing Corporation. Transocean will then lease both facilities back to the County. The facility lease with Transocean for 2047 Arnold Industrial Way does not extend the term.of the current lease and provides for a reduction of rental costs. The facility lease for 1034 Oak Grove Road provides a mechanism for financing improvements to upgrade the facility and construct a 2,500 sq.ft. addition for a locked community mental health facility for adolescents. OCCUPANT: HEALTH SERVICES DEPARTMENT CONTRACT PROVIDERS RENT: 2047 Arnold Drive- Current Rent: $ 66,540 annually Projected New Rent: $65,000 annually 1034 Oak Grove Road-Current Rent: $ 116,782 annually Projected New Rent: $330,000 annually SPACE TYPE: 2047 Arnold Industrial Way: Central County Homeless Center 1034 Oak Grove Road-Children's Locked Residential Facility COUNTY RESPONSIBILITY: All interior and exterior maintenance. ADDRESS: 1034 Oak Grove Road, Concord; 2047 Arnold Industrial Way, Concord AGENDA ITEM: APPROVAL.OF ASSIGNMENTS OF PURCHASE OPTIONS AND APPROVAL OF LEASES WITH PURCHASE OPTIONS FOR 2047 ARNOLD INDUSTRIAL WAY AND 1034 OAK GROVE ROAR,CONCORD,CA WITH TRANSOCEAN FINANCING CORPORATION cc: Kathy Brown Alan Pfeiffer Terry Mann C. Beardsley C:\WINDOWS\TEMP\arnoldoakgroveagendaitem.doe THE BOARD OF SUPERVISORS,CONTRA COSTA COUNTY,CALIFORNIA ... dopted this Resolution on March 14,2000 by the following vote: AYES: NOES: ABSENT RESOLUTION NO. SUBJECT: Resolution Approving Execution and Delivery of Assignment cif Purchase Options to Transocean Financing Corporation In Connection With Acquisition and Improvement of',the Projects, Approving Forms of and Execution of two Facility Leases and an Escrow Agreement;Approving Forms and Authorizing the County Administrator,the Director of General Services,or their Designees,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 with purchase option for the purpose of acquiring and improving 1034 Oak Grove Road("Oak Grove Lease")and a Facility Lease with purchase option for the purpose of acquiring and improving 2047 Arnold Industrial Way,Concord,CA("Arnold Lease"); 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 intends to enter into an agreement with Seneca Center,a California nonprofit corporation,for use of 1034 Oak Grove Road,Concord,CA,as a locked adolescent mental health facility; WHEREAS the County has entered into an agreement with Center Point,Inc.,a California nonprofit corporation,to operate a portion of 2047 Arnold Industrial Way,Concord,CA,as a County Homeless Shelter; WHEREAS,Transocean Financing Corporation("Corporation")will finance the acquisition,construction and improvement of 1034 Oak Grove and 2047 Arnold Industrial Way(collectively,the"Projects")by and on behalf of the County; WHEREAS,it is proposed that the County assign its purchase option in connection with the Projects to the Corporation; WHEREAS,it is proposed that the Corporation will acquire the Projects and will lease the Projects to the County pursuant to the Oak Grove Lease and the Arnold Lease(collectively,the"Facility Leases"); WHEREAS,under the Facility Leases,the County would be obligated to make base rental payments to the Corporation for the lease of the Projects; WHEREAS,it is proposed that all rights to receive such base rental payments will be assigned without recourse by the Corporation to Transamerica Public Finance(the"TPF")pursuant to an Assignment to be dated as of March 1,2000(the "Assignment"); WHEREAS,approximately$2,000,000 of the proceeds from the facility lease financing for 1034 Oak Grove will be placed in an interest bearing escrow account at First National Bank of Central California,as Escrow Agent,pursuant to an Escrow Agreement dated as of March 1,2000(the"Escrow Agreement"), among the Corporation,County and Escrow Agent,to be applied to fund improvements to 1034 Oak Grove and to be disbursed pursuant to instructions of the County as the improvements are completed; 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 the Board of Supervisors of the County of Contra Costa,as follow: Section 1. The County hereby specifically finds and declares that the actions authorized hereby constitute and are with respect to public affairs of the County and that the statements,findings and determinations of the County set forth above are true and correct. Section 2. 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 with purchase option agreement with Transocean Financing Corporation for the purpose of acquiring a health care facility which is located at 1034 Oak Grove Road,Concord,CA.Contra Costa County intends to enter into an agreement with Seneca Center,a California nonprofit corporation,or a similar provider,for use of 1034 Oak Grove Road,Concord,CA for a locked adolescent mental health facility following completion of improvements to the site. Section 3. 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 facility lease agreement by Contra Costa County with Transocean Financing Corporation with respect to the acquisition of 1034 Oak Grove Road,Concord,CA.The rental payments due pursuant to such facility lease with option to purchase agreement shall have a maximum total principal component of approximately$4,000,000. Section 4. 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 facility lease with purchase option agreement with Transocean Financing Corporation for the purpose of acquiring a facility which is located at 2047 Arnold Industrial Way,Concord,CA,being used as a County homeless shelter and as commercial office space. Contra Costa County has entered into an agreement with Center Point,Inc.,a California nonprofit corporation,to operate the County homeless shelter at the site. Section 5. 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 the facility lease agreement by Contra Costa County with Transocean Financing Corporation with respect to the acquisition of 2047 Arnold Industrial Way,Concord,CA.The rental payments due pursuant to such facility lease with option to purchase agreement shall have a maximum total principal component of approximately$700,000. Section 6. The assignment of the County's purchase option in connection with the Projects to the Corporation is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services 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. _SDI Section 7. The form of the Oak Grove Lease between the Corporation and the County,dated as of March 1, 2000,on file with the Clerk of the Board of Supervisors,is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services 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 or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof;provided, however,that the aggregate base rental payments payable under the Oak Grove Lease shall not exceed $8,000,000,the maximum annual base rental payments payable under the Oak Grove Lease shall not exceed $400,000,and the term of the Oak Grove Lease shall not exceed twenty-two(22)years. Section 8. The form of the Arnold Lease between the Corporation and the County,dated as of March 1, 2000,on file with the Clerk of the Board of Supervisors,is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services 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 or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof;provided, however,that the aggregate base rental payments payable under the Arnold Lease shall not exceed $2,000,000, the maximum annual base rental payments payable under the Arnold Lease shall not exceed $100,000,and the term of the Arnold Lease shall not exceed twenty(20)years. Section 9. The form of the Escrow Agreement among the Corporation,the County,and First National Bank of Central California,dated as of March 1,2000,on file with the Clerk of the Board of Supervisors, is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services and their designees are hereby authorized and directed to execute and deliver said Escrow Agreement and related arbitrage certificate in substantially said form,with such changes therein as such officers or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof Section 10. 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,letters and confirmations,necessary and desirable to accomplish the transactions set forth above. Section 11. All actions heretofore taken by the agents of the County with respect to the acquisition of the Project through the Facility Leases are hereby approved and confirmed. Section 12.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 financing to reimburse itself for any County expenditures in connection with the Project incurred prior to the execution and delivery of the Facility Leases. RESOLUTION NO. FACILITY LEASE (1034 Oak Grove Road,CONCORD) Between TRANSOCEAN FINANCING CORPORATION, as Lessor, and the COUNTY OF CONTRA COSTA, as County, Dated as of March 1,2000 FACILITY LEASE (1034 Oak Grove Road, Concord,California) TABLE OF CONTENTS Parties Section1.Definitions..................................................................................................................................... 1 Section 2.Term;Commencement of Rental;Condition of the Property.........................................................2 Section 3.Rental Payments;Abatement of Rental..........................................................................................2 Section 4. Maintenance,Utilities,Taxes and Assessments............................................................................3 Section4A. Eminent Domain........................................................................................................................4 Section5.Fire and Extended Coverage Insurance..........................................................................................5 Section6.Liability Insurance.........................................................................................................................6 Section 7.Rental Interruption or Use and Occupancy Insurance....................................................................6 Section 8. Form of Insurance Policies...........................................................................................................6 Section9. Title to Property.................................................................................................I..........................6 Section10. Default........................................................................................................................................7 Section11.Right of Entry. .............................................................................................................................8 Section12.Liens and Taxes...........................................................................................................................8 Section 13.Assignment and Subleasing. ........................................................................................................9 Section14.Option to Purchase..................................................................................................................... 10 Section15 Quiet Enjoyment......................................................................................................................... 10 Section16. Lessor Not Liable...................................................................................................................... 11 Section17. Purpose..................................................................................................................................... 11 Section18. Waiver. ..................................................................................................................................... 11 Section19. Headings................................................................................................................................... 11 Section 20. Law Governing;Venue............................................................................................................. 11 Section21. Notices...................................................................................................................................... 12 Section 22. Validity and Severability. ......................................................................................................... 12 Section23.Net Lease................................................................................................................................... 12 Section24. Attorneys'Fees.......................................................................................................................... 12 Section25 Memorandum.............................................................................................................................. 12 Section 26 Title Insurance and Bond Counsel Opinion................................................................................ 12 Section 27 Characterization of Lease. .......................................................................................................... 13 Section28 Authority..................................................................................................................................... 13 Section29.Termination of Prior Lease........................................................................................................ 13 Execution Page Exhibit A Schedule of Property Exhibit A-1 Description of Improvements 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 Notice of Assignment ii FACILITY LEASE (1034 Oak Grove Road,Concord) THIS FACILITY LEASE(1034 Oak Grove Road, CONCORD),dated as of March 1,2000,by and between TRANSOCEAN FINANCING CORPORATION,a corporation duly organized and existing under the laws of the State of California,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"); RECITALS: The County has an existing lease dated July 1, 1998 for the property located at 1034 Oak Grove Road,Concord with Transocean Financing Corporation. County desires to undertake certain renovations to the existing 10,611 square foot building and to construct a new 2,500 square foot building to meet programmatic requirements. Accordingly,both the Lessor and County have agreed to terminate the July 1, 1998 lease,including termination of the County's purchase option right under said lease, and will now enter into this new Facility Lease with Option to Purchase. WITNESSETH.- In ITNESSETH: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 "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 "Property" 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. A description of the improvements to be completed on the Property is contained in Exhibit A-1 attached hereto and made a part here of. The term "Rental Payment"means all amounts payable to Lessor from County as rental pursuant to Section 3 hereof. The term"Additional Rent"means all amounts of money and charges required to be paid by County under this Lease other than Rental Payments. 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 times a fraction,the numerator of which is the number of days 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. A"Hazardous Substance"is defined to mean any substance,material or waste,including asbestos and petroleum(including crude oil or any fraction thereof),which is or becomes designated, classified or regulated as being"toxic","hazardous",a"pollutant"or similar designation under any federal, state or local law,regulation or ordinance. 1 Section 2. Term;Commencement of Rental;Condition of the Property. Lessor hereby leases to County and County hereby leases from Lessor,on the terms,covenants and conditions hereinafter set forth,the Property.The County hereby agrees and covenants during the term of this Lease that,except as hereinafter provided,it will use the Property 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 March 1,2000 and shall end on February 29,2020, unless such term is extended or sooner terminated as hereinafter provided. If any Rental Payment hereunder has been abated at any time and for any reason,then unless such payment or payments has been paid prior to March 1,2020,the term of this Lease shall be extended until ten(10)days after all previously abated Rental Payments shall be fully paid,except that the term of this Lease shall in no event be extended beyond March 1,2025. 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. The parties hereto agree that County is presently in possession of all of the Property. County accepts all of the Property 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 Property,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. 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 a 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,executed and delivered by County and 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 Property is 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 Property 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 Property total rental payments("Rental Payments")set forth in Exhibit B. County agrees to send the Rental Payments to Lessor,without notice or demand,to the location specified by the Lessor on Exhibit G on the fifteenth(15'h) day of the month preceding the payment dates set forth in Exhibit B. However,Rental Payments shall not be due and payable until the Payment Date shown in Exhibit B (commencing on 911!00). 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. 2 Following the expiration of ten years during the term of this Lease,corresponding to the twentieth Rental Payment,the interest components of the remaining Rental Payments will be adjusted based upon a rate equivalent of 37%of the ten-year Treasury rates or a similar index if ten-year Treasury rates are no longer available. Lessor or its assignee will provide a revised Rental Payment schedule to County within a 30 day period. 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." (b)County covenants to take such action as may be necessary to include all Rental Payments due hereunder in its annual budgets and to make the necessary annual appropriations for all such Rental payments. The covenants on the part of County herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the County to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the County to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the County. (c)Rental Payments and all Additional Rent 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 Property during each such payment period,and(2)the option to purchase the Property 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 and all Additional Rent 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 Payments 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 Property by County,in the proportion in which the initial cost of that portion of the Property rendered unusable bears to the initial cost of the entire Property. 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, Faxes and Assessments. During the term of this Lease,the cost of all maintenance and repair,both ordinary and extraordinary,of the Property shall be the sole responsibility of County,which shall at all times maintain or otherwise arrange for the maintenance of the Property in first-class condition,and County shall pay for or otherwise arrange for the payment of all utility services supplied to the Property and shall pay for or otherwise arrange for the payment of the costs of the repair to the Property,whether required due to damage, wear 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 Property. In exchange for the Rental Payments herein provided,Lessor agrees to provide only undisturbed possession of the Property. County shall not make any alterations,additions or improvements of a significant and material nature to the Property without the Lessor's prior written consent,such consent not to be unreasonably withheld,provided that County shall not undertake any modifications,alterations, additions and improvements of any nature to the Property 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 Property which are superior to the rights of Lessor hereunder. Lessor consents to County completing significant improvements to the 3 existing building and constructing an additional 2,500 square foot building on the site. The County agrees to pay for all improvements to the Property shown on Exhibit A and agrees to keep the Property free from any materialmen,vendor,supplier or similar liens. County shall bear the risk of loss or damage to the Property from any cause whatsoever,and no such loss or damage to or condemnation of the Property shall impair or modify the obligations of County hereunder,except as provided in Section 3(e)hereof. If the Property are 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 Property 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 Property 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,or 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 Property(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 of 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 Property 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 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 Property)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 Property,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 4 by Lessor in effecting the transfer provided herein(including any escrow,title fees,transfer charges,taxes, incidental charges and unpaid property taxes on the Property)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 Property,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 Property)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 Property 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 Taking,as the case may be, with County assigning its right to such award or purchase price,as the case may be,to Lessor to the extent required to pay for the Property. If less than the whole of the Property 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 Property to the extent necessary for its use by County and,second,to the prepayment of the Rental 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 Property)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 Property 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 Property),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 Property during the term of this Lease. In the event any preceding eminent domain awards or purchase prices are paid to any encumbrancer of the Property 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,throughout the term of this Lease,insurance against loss or damage to any structures constituting any part of the Property by fire and lightning,with extended coverage insurance,vandalism, and malicious mischief insurance. Said extended 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 Property,excluding 5 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 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 Property 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 No/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. 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,throughout the term of this Lease,rental interruption or use and occupancy insurance to cover loss,total or partial,of the Rental Payment for the use of the Property as the result of any of the hazards covered by the insurance required by Section 5 hereof,in an amount sufficient to pay the total rent hereunder 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 8. 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 and shall deliver certificates of insurance or evidence of self 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 Rent due and payable on demand and bearing interest at the rate announced by the Bank 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. Section 9. Title to Property. Title to the Property 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 6 agrees to execute and deposit into escrow a grant deed in recordable form,conveying to County the Property,warranting title except for any liens and encumbrances not 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 Property,together with Lessor's written instructions to the title company to close escrow on the Property. 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 Property,Lessor agrees not to create or cause to be created any liens or encumbrances specifically by or through Lessor on the Property, 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 Rent hereunder within ten(10)business days after the 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 Services Department of County or successor department, which circumstances may,without limitation hereby,include damage to or destruction of the Property 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. County shall be responsible for interest for the period from but excluding the due date through and including the date of payment. (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 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 the 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 Property,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 and to re-enter the Property and to take possession of the Property in any lawful manner and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place in 7 the State of California. In the event of such lawful termination,County agrees immediately to surrender possession of the Property 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 and any sums designated as Additional Rent hereunder(including any Rental Payments and Additional Rent accrued but not yet paid,but not future Rental Payments or future Additional Rent)which had been earned at the time of such termination,and Lessor's 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 Property,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 Payments and any sums designated as Additional Rent hereunder(including any Rental Payments and Additional Rent accrued but not yet paid,but not future Rental Payments or future Additional Rent)and Lessor's reasonable removal and storage costs of 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 Property 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 Property and removal and storage of any personal property,except resulting from the negligent or intentional 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 Property in the event of such re-entry. Section IL Right of Entry. Lessor and its assignees shall have the right to enter the Property 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. 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 Property,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 Property and shall keep the Property free of any and all mechanics'or materialman's liens or other liens against the Property 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 Property or the Lessor's interest therein. The Lessor shall have the right to post and keep posted on the Property any notices that may be provided by law or which the Lessor may deem to be proper for the protection of the Lessor,the Property 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 Property 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 Property and any contents therein,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,initiation or filing of such exemption applications. Section 13.Assignment and Subleasing. Assignment by Lesser. 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 CERTIFICATE 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 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 Property 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 Certificates of Participation in this Lease or any amendments hereto through a private offering arranged by the Lessor. No Sale,Assignment or Subleasing by County. THIS LEASE AND THE INTEREST OF COUNTY IN THE PROPERTY 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 PROPERTY 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 AND ITS USE OF THE PROPERTY 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. LESSOR ACKNOWLEDGES THAT COUNTY INTENDS TO ENTER INTO A SUBLEASE WITH SENECA CENTER,A CALIFORNIA NON PROFIT CORPORATION,OR A SIMILAR ENTITY 9 RESPECTING TIME PROPERTY. 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 exclusion of the interest components of Rental Payments from gross income under Section 103 of the Internal Revenue Code,as amended. Section 14. Option to Purchase 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 property described in Exhibit A, attached hereto and made a part hereof,on the terms and conditions in this Section. The term of this Option shall commence on the effective date of this Lease and shall expire March 1,2022,or the termination of this lease,whichever occurs last,unless extended in writing by both parties("Option Term"). It is specifically intended by the parties that this Option shall survive the expiration or termination of this Lease. If at time of exercise,County is not in default of this Lease in Section 10,this Option be may be exercised from and after its 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 13 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 Property)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 Property,following exercise of its option,by irrevocably depositing into an escrow trust account with a defeasance escrow agent for the benefit of Lessor as security for and for the purpose of paying all of the principal component and interest component accruing for the Property,a sum of cash and non-callable securities consisting of direct obligations of,or obligations,the principal of and 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;provided that,if any Rental Payment or purchase price is to be paid more than 90 days after the deposit into the escrow trust account,Lessor is furnished with a verification report of such sufficiency by an independent public accounting firm reasonably satisfactory to Lessor and an opinion of nationally recognized bond counsel to the effect that such defeasance does not adversely affect the exclusion of the interest components of Rental Payments from gross income for federal income tax purposes. Upon such defeasance,all right,title and interest of Lessor in the Property shall terminate,and Lessor shall cooperate with County to execute all documents which may be reasonably requested by County or its assignees to protect their interests in the Property. 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 Property without suit,trouble or hindrance from the Lessor or any person claiming title through Lessor. 10 Section 16. Lessor Not Liable. Lessor and its agents and employees and assignees 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 Property. County shall indemnify and hold Lessor and its agents and employees and assignees 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 Property,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 Property for public purposes and for the purposes for which the facilities are customarily used,(b)it will not vacate or abandon the Property any part thereof,and(c)it will not make any use of the Property 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 the obligations provided herein 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(a)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 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 Property 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 time to time. Venue for all 11 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 1 I I Anza Boulevard,Ste. 107,Burlingame,CA 94010, (650)342-2266,fax: (650)342-9719,e:mail: 3CCooperma@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, e:mail: 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 4$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 remaining terms of this Lease shall nonetheless continue in full force and effect. 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 iri 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 P 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$3,600,000,insuring the ownership of the Property 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 12 the opinion of special tax counsel to Lessor in customary form as to the exclusion of the interest components of the Rental Payments from gross income for federal and State of California income tax laws. 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 taws 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 Property. Section 29. Termination of Prior Lease The Facility Lease dated as of July 1, 1998 between Transocean Financing Corporation and the County is hereby terminated,including the County's option to purchase right,and is replaced in its entirety by this Facility Lease. THIS SECTION INTENTIONALLY LEFT BLANK 13 THIS PAGE INTENTIONALLY LEFT BLANK 14 IN WITNESS WHEREOF,the Lessor has caused this Lease to be executed in its name by its duly authorized officers,and the County 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 a California Corporation California By: By: Director of General Services Pr 'dent RECOMMENDED FOR APPROVAL: By: + ector,Capital Faci ities &,Debt anagement By: dL; Deputy Genera rvices Director By: r"d aa _ Lease Mana er By AAQ e lth Services Department APPROVED AS TO FORM: VICT'O,B�,,l.,WESTMAN,County Counsel B - Deputy Couns Date A rxr l 11,2000 15 EXHIBIT A COUNTY OF CONTRA COSTA FACILITY LEASE DATED AS OF March 1,2000 SCHEDULE OF PROPERTY The Property which is the subject of the attached FACILITY LEASE is as follows: The following described land and all buildings,improvements and fixtures now or hereafter located thereon: APN 129-190-012,-043,and-044,commonly known as 1034 Oak Grove Road,Concord,CA 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 Book 193,Page 37,said Lot 9(3 M 57)and said Parcel"X'(193 M 37)are shown upon the record of survey filled August 11, 1988 in book 88 of L.S.M.at Page 13,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,recorded January 14, 1955,Book 2457,Official Records,Page 559;thence from said point of beginning South 35° 11' 10"East,along said center line, 181.86 feet to the Southeast line of said Eckert Parcel;thence North 51°47' 11"East along said Southeast line 230.06 feet to the Southern comer of said Parcel"A"(193 M 37);thence along the South Eastern line thereof North 51°47'11"East, 120.37 feet to the Eastern comer of said Parcel"A",thence along the Northeastern line thereof North 35° 12'49"West,87.00 feet;thence along said Northeastern line North I V 02'47"East,38.76 feet to the Northern corner of said Parcel"A";thence leaving said Northern comer along the Northern line of said Parcel"A"South 470 00'32"West, 1.43 feet;thence leaving said Northern line North 350 11' 10"East; 101.34 feet to the Northwest line of said Eckert Parcel;thence along said Northwest line South 47°00'32"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 June 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 1 F 10"East,along said center line, 181.86 feet to the Southeast line of said Eckert Parcel;thence along said Southeast line North 51°47' 11'" East,42.06 feet;thence leaving said southeast line North 35° 11" 10"West, 185.40 feet to the Northwest line of said Eckert Parcel;thence along said Northwest line south 47°00'32" West,42.39 feet to the point of beginning. 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 4866,filed March 11, 1977,Map Book 193,Page 37,Contra Costa County Records. (Being APN 129-190-012,043 &044) 1 EXHIBIT A-1 COUNTY OF CONTRA COSTA, FACILITY LEASE DATED AS OF MARCH 1,2000 DESCRIPTION OF IMPROVEMENTS The following improvements are to completed on the Property: 1. Remodel of Existing Structure. Interior Improvements: Reconfigure Floor plan to conform to new operational and ADA requirements including selected wall demolition and provision of new walls. Abate ACM where affected by remodel work Provide new interior finishes in corridors,patient rooms,dining,kitchen and quiet rooms and where affected by remodel work including floor wall and ceiling. Rework mechanical,plumbing,electrical,fire protection and security systems to conform to remodel work including new air conditioning,new bath,shower and restroom fixtures,new lighting,and new communication system(rough-in)throughout. Replace all interior doors including hardware. Provide new cabinetry in Laundry,Living,and Reception and Nurses Station including bulletlabrasion proof glass partition around Reception Clean and refurbish all kitchen equipment including new hood exhaust and vent. Exterior Improvements: Replace all exterior windows. Replace major entry doors and provide new security card key system. Repair and repaint all exterior stucco. Resheath and reroof complete facility including new flashings,gutters and downspouts. Provide new skylights in corridors and selected rooms. Repair landscaping/paving Add 10 foot site fence at property line Provide new sewer line Provide elopement security at roof Total Construction Cost Estimate$966,38; 2. New Construction Construct free standing 2,500 square foot building for offices and classrooms. Building will include bathrooms and containment rooms. Construction Cost.Estimate$464,104. 2 EXHIBIT B COUNTY OF CONTRA COSTA, FACILITY LEASE DATED AS OF MARCH 1,2000 SCHEDULE OF RENTAL PAYMENTS This Exhibit applies to Property set forth on Exhibit A. Prepaymeni Mental Concluding Purchase Gate Payment Principal Interest Balance Option` 9/l/00 $108,318.15 0.00 108,318.15 3,369,149.28 3,436,532.27 3/1/01 $108,318.15 0.00 108,318.15 3,369,149.28 3,436,532.27 9/1/01 $154,839.87 46,521.72 108,318.15 3,322,627.56 3,389,080.11 3/1102 $154,839.87 48,017.39 106,822.48 3,274,610.17 3,340,102.37 9/l/02 $154,839.87 49,561.15 105,278.72 3,225,049.02 3,289,550.00 3/l/03 $154,839.87 51,154.54 103,685.33 3,173,894.48 3,237,372.37 9/l/03 $154,839.87 52,7W 16 102,040.71 3,121,095.32 3,183,517.22 3/1/04 $154,839.87 54,496.65 100,343.21 3,066,598.66 3,127,930.64 9/1/04 $154,839.87 56,248.72 98,591.15 3,010,349.94 3,070,556.94 3/1/05 $154,839.87 58,057.12 96,782.75 2,952,292.82 3,011,338.68 9/1/05 $154.839.87 59,923.65 94,916.21 2,892,369.17 2,950,216.55 3/1/06 $154,839.87 61,850.20 92,989.67 2,830,518.97 2,887,129.35 9/1/06 $154,839.87 63,838.68 91,001.18 2,766,680.29 2,822,013.89 3/1/07 $154,839.87 65,891.10 88,948.77 2,700,789.19 2,754,804.98 9/1/07 $154,839.87 68,009.50 86,830.37 2,632,779.70 2,685,435.29 3/1/08 $154,839.87 70,196.00 84,643.87 2,562,583.70 2,613,835.37 9/1/08 $154,839.87 72452.80 82,387.07 2,490,130.89 2,539,933.51 3/1/09 $154,839.87 74,782.16 80,057.71 2,415,348.73 2,463,655.71 9/l/09 $154,839.87 77,186.41 77,653.46 2,338,162.33 2,384,925.57 3/1/10 $154,839.87 79,667.95 75,171.92 2,258,494.38 2,281,079.32 9/1/10 $154.839.87 82229.27 72610.59 2,176,265.10 2,198,027.76 3/1/11 $154.839.87 84,872.94 69,966.92 2,091,392.16 2,112,306.08 9/l/11 $154,839.87 87,601.61 67,238.26 2,003,790.55 2,023,828.46 3/1/12 $154,839.87 90,418.00 64,421.87 1,913,372.55 1,932,506.27 9/1/12 $154,839.87 93,324.94 61,514.93 1,820,047.61 1,838,248.08 3/1/13 $154,839.87 96,325.34 58,514.53 1,723,722.27 1,740,959.49 9/1/13 $154,839.87 99,422.20 55,417.67 1,624,300.07 1,640,543.07 3/1/14 $154,839.87 102,618.62 52,221.25 1,521,681.45 1,536,898.27 9/1/14 $154,839.87 105,917.81 48,922.06 1,415,763.64 1,429,921.28 3/1/15 $154,839.87 109,323.07 45,516.80 1,306,440.58 1,319,504.98 9/l/15 $154,839.87 112 837.80 42,002.06 1,193,602.77 1,205,538.80 3/1/16 $154,839.87 116,465.54 38,374.33 1,077,137.23 1,087,908.61 9/1/16 $154,839.87 120,209.91 34,629.96 956,927.33 966,496.60 3/1/17 $154,839,87 124,074.65 30,765.21 832,852.67 841,181.20 9/1/17 $154,839.87 128,063.65 26,776.21 704,789.02 711,836.91 3/1/18 $154,839,87 132180.90 22,658.97 572,608.12 578,334.20 9/1/18 $154,839.87 136,430.52 18,409.35 436,177.60 440,539.38 3/1/19 $154,839.87 140,816.76 14,023.11 295,360.84 298,314.45 3 9/1/19 $154,834.87 145,344.02 9,495.85 150,016.83 151,517.00 3/1/20 $154,839.87 150,016.83 4,823.04 0.00 0.00 GRAND T©T't $6.100.551.28 On March 1, 2010, the Interest rate will reset at 97%of the 10 year Treasury gate or a similar Index *Assumes payment on this date has been made. 2%call premium through 9/1/09, 1%thereafter. *Assumes payment on this date has been made. Approved. Co ty of Contra osta Director of General Services 4 VICTOR J.WESTMAN DEPUTIES: COUNTY COUNSEL JANICE L AMENTAF NORA G.BARLOW B.REBECCA BYRNES SILVANO B.MARCHESI �^+�-y�-v p ANDREA W.CASSIDY �' A VVa7T1 ' MONIKAL.COOPER CH IEF ASSISTANT COUNTY COUNSEL VICKIE L.DAWES OFFIC 'Of THE C� UNSEL MARKES.ESTIS SHARON L.ANDERSON " MICHAEL D.FARR QQ �ISTA0104, ILp NC. ,I LILLIAN T.FUJII ASSISTANT COUNTY COUNSEL DENNIS C.GRAVES TIT 5 'Ji" JANET L.HOLMES GREGORY C.HARVEY MAF#,,INE� CAt..tE� "x`229 KEVINTKERR r BERNARD L.KNAPP ASSISTANT COUNTY COUNSEL a EDWARD V.LANE,JR. BEATRICE LIU ` MARY ANN MASON GAYLE MUGGLI PAUL R.MUIVI2 OVALERIE J.RANCHE OFFICE MANAGER STEVEN R RETTIG DAVID F.SCHMIDT DIANAPHONE 925 335-1900 JACQUELINE R { ) JACQUELINEYWOODS FAX(925)946-1079 OPINION OF COUNSEL April 11, 2000 Lessee: COUNTY OF CONTRA COSTA 1220 Morello Avenue, Ste. 100 Martinez, CA 94553 Lessor: TRANSOCEAN FINANCING CORPORATION 111 Anza Blvd., Ste. 107 Burlingame, CA 94010 RE: FACILITY LEASE dated as of March 1, 2000,by and between Transocean Financing Corporation("Lessor") and COUNTY OF CONTRA COSTA ("Lessee") Ladies and Gentlemen: I have acted as counsel to the Lessee with respect to the FACILITY LEASE (re: 1034 Oak Grove Road)described above(the"Lease"), and various related matters, and in this capacity have reviewed a duplicate original or certified 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. Opinion of Counsel April 11,2000 Page 2 4. The authorization, approval and execution of the Lease have been performed in accordance with all open meeting,public bidding and other laws, rules and regulations applicable to the Lessee. 5. 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 there is no 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 County Counsel C]4- Shar Anderson Assistant County Counsel SLA/jh H:VOANN\SLAitrsnsoce®n.wpd EXHIBIT D COUNTY OF CONTRA COSTA FACILITY LEASE DATED AS OF MARCH 1,2000 CERTIFICATE OF ESSENTIAL USE (1034 Oak Grove Road) The undersigned,as Director of General Services,of COUNTY OF CONTRA COSTA (the"Lessee"),hereby certifies that the Property described in Exhibit A to FACILITY LEASE dated as of March 1,2000,with Transocean Financing Corporation(the"Lease")are 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 Property,the need for which is not temporary or expected to diminish in the foreseeable future. Such Property 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 Property were selected by the Lessee to be used for the following governmental purposes: 1.Mental health and psychiatric programs 2.Medical programs 3.Juvenile Correctional programs 4. Administrative Uses This Exhibit relates to Exhibit A to the Lease. COUNTY OF CONTRA COSTA, as Lessee I By: Director of General Services Date: March 1,2000 7 EBYT E THE BOARD OF SUPERVISORS,CONTRA COSTA COUNTY,CALIFORNIA Adopted this Resolution on March 21,2000 by the following vote: AYES: SUPERVISORS GIOLk, UILKEMA, DESAULNIER, CANCIAMILLA and GERBER NOES: NONE ABSENT NONE RESOLUTION NO. 2000/124 SUBJECT: Resolution Approving Execution and Delivery of Assignment of Purchase Options to Transocean Financing Corporation In Connection'With Acquisition and Improvement of the Projects, Approving Forms of and Execution of two Facility Leases and an Escrow Agreement;Approving Forms and Authorizing the County Administrator,the Director of General Services,or their Designees,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 with purchase option for the purpose of acquiring and improving 1034 Oak Grove Road ("Oak Grove Lease")and a Facility Lease with purchase option for the purpose of acquiring and improving 2047 Arnold Industrial Way,Concord,CA("Arnold Lease"); 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 intends to enter into an agreement with Seneca Center,a California nonprofit corporation,for use of 1034 Oak Grove Road,Concord,CA,as a locked adolescent mental health facility; WHEREAS the County has entered into an agreement with Center Point,Inc.,a California nonprofit corporation,to operate a portion of 2047 Arnold Industrial Way,Concord,CA,as a County Homeless Shelter; WHEREAS,Transocean Financing Corporation("Corporation") will finance the acquisition,construction and improvement of 1034 Oak Grove and 2047 Arnold Industrial Way(collectively,the"Projects") by and on behalf of the County; WHEREAS,it is proposed that the County assign its purchase option in connection with the Projects to the Corporation; WHEREAS,it is proposed that the Corporation will acquire the Projects and will lease the Projects to the County pursuant to the Oak Grove Lease and the Arnold Lease(collectively,the "Facility Leases"); WHEREAS,under the Facility Leases,the County would be obligated to make base rental payments to the Corporation for the lease of the Projects; WHEREAS,it is proposed that all rights to receive such base rental payments will be assigned without recourse by the Corporation to Transamerica Public Finance(the"TPF")pursuant to an Assignment to be dated as of March 1,2000(the"Assignment"); WHEREAS,approximately$2,000,000 of the proceeds from the facility lease financing for 1034 Oak Grove will be placed in an interest bearing escrow account at First National Bank of Central California,as RESOLUTION NO. 2000/124 EXHIBIT E Escrow Agent,pursuant to an Escrow Agreement dated as of March 1,2000(the"Escrow Agreement"), among the Corporation,County and Escrow Agent,to be applied to fund improvements to 1434 Oak Grove and to be disbursed pursuant to instructions of the County as the improvements are completed; 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 the Board of Supervisors of the County of Contra Costa,as follow: Section 1. The County hereby specifically finds and declares that the actions authorized hereby constitute and are with respect to public affairs of the County and that the statements,findings and determinations of the County set forth above arc 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 with purchase option agreement with Transocean Financing Corporation for the purpose of acquiring a health care facility which is located at 1034 Oak Grove Road,Concord,CA.Contra Costa County intends to enter into an agreement with Seneca Center,a California nonprofit corporation,or a similar provider, for use of 1034 Oak Grove Road,Concord,CA for a locked adolescent mental health facility following completion of improvements to the site. Section 3. 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 facility lease agreement by Contra Costa County with Transocean Financing Corporation with respect to the acquisition of 1034 Oak Grove Road,Concord,CA.The rental payments due pursuant to such facility lease with option to purchase agreement shall have a maximum total principal component of approximately$4,000,000. Section 4: 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 facility lease with purchase option agreement with Transocean Financing Corporation for the purpose of acquiring a facility which is located at 2047 Arnold Industrial Way,Concord,CA,being used as a County homeless shelter and as commercial office space. Contra Costa County has entered into an agreement with Center Point,Inc.,a California nonprofit corporation,to operate the County homeless shelter at the site. Section 5. 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 the facility lease agreement by Contra Costa County with Transocean Financing Corporation with respect to the acquisition of 2047 Arnold Industrial Way,Concord,CA.The rental payments due pursuant to such facility lease with option to purchase agreement shall have a maximum total principal component of approximately$700"000. Section 6. The assignment of the County's purchase option in connection with the Projects to the Corporation is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors. the County Administrator,the Director of General Services 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. RESOLUTION NO, 2000/124 pg2of3 EXHIBIT E Section 7. The form of the Oak Grove Lease between the Corporation and the County,dated as of March 1, 2000,on file with the Clerk of the Board of Supervisors,is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services 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 or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof;provided, however,that the aggregate base rental payments payable under the Oak Grove Lease shall not exceed $8,000,000,the maximum annual base rental payments payable under the Oak Grove Lease shall not exceed $400,000,and the term of the Oak Grove Lease shall not exceed twenty-five(25)years. Section 8. The form of the Arnold Lease between the Corporation and the County,dated as of March 1, 2000,on file with the Clerk of the Board of Supervisors,is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services 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 or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof.provided, however,that the aggregate base rental payments payable under the Arnold lease shall not exceed 52,000,000, the maximum annual base rental payments payable under the Arnold Lease shall not exceed 5100,000,and the term of the Arnold Lease shall not exceed twenty(20)years. Section 4. The form of the Escrow Agreement among the Corporation,the County,and First National Bank of Central California,dated as of March 1,2000,on file with the Clerk of the Board of Supervisors,is hereby approved and the Chairman of the Board of Supervisors,the Clerk of the Board of Supervisors,the County Administrator,the Director of General Services and their designees are hereby authorized and directed to execute and deliver said Escrow Agreement and related arbitrage certificate in substantially said form,with such changes therein as such officers or their designees may require or approve,such approval to be conclusively evidenced by the execution and delivery thereof Section 10. The officers of the County are hereby authorized and directed,joindy and severally,to do any and all things which they may dextra 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, letters and confirmations,necessary and desirable to accomplish the transactions set forth above. Section 11. All actions heretofore taken by the agents of the County with respect to the acquisition of the Project through the Facility Leases are hereby approved and confirmed. Section 12.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 financing to reimburse itself for any County expenditures in connection with the Project incurred prior to the execution and delivery of the Facility Leases. RESOLUTION NO. 2000/124 I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS Otl TOE DATE SH N. �. ATTESTED C'Cfe 1 PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY DEPUTY RESOLUTION NO. 2000/124 pg3of3 EXHIBIT F RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: County of Contra Costa General Services Department Lease Management Division 1224 Morello Avenue, Suite 100 Martinez, CA 94553-4711 Attention: Carol Chan Memorandum Of Facility Lease & Termination of Prior Lease This Memorandum of Facility Lease ("Memorandum") is dated as of March 1, 2000, is entered into between TRANSOCEAN FINANCING CORPORATION ("LESSOR"), and COUNTY OF CONTRA COSTA, a political subdivision of the State of California ("COUNTY"). Recitals A. On March 1, 2000, LESSOR and COUNTY entered into a Facility Lease ("Lease"), pursuant to which LESSOR leased to COUNTY and COUNTY leased from LESSOR all the real property including land and all buildings, improvements and fixtures now or hereafter located thereon, commonly known as 1034 Oak Grove .Road, Concord: APN 129-190-012, -043, -044 and more particularly described and shown on Exhibit A ("Property"). B. As more particularly set forth in the Lease, LESSOR granted to COUNTY an option to purchase said Poperty. 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. D. The Facility Lease dated as of July 1, 1998, between the COUNTY and TRANSOCEAN FINANCING CORPORATION, including the COUNTY'S option to purchase, is hereby terminated and is replaced in its entirety by the Lease described in this Memorandum. 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 Facility Lease between the LESSOR and COUNTY of March 1,2000,LESSOR leases to COUNTY the Premises herein described for a term of twenty (20) years, commencing on March 1, 2000 , and ending on February 29, 2020 and conveys to COUNTY an option to purchase the Property under the terms and conditions contained in the Lease 2. 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. 3. 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. IN WITNESS WHEREOF, the parties hereto have executed the MEMORANDUM OF LEASE as of the date first written above. COUNTY: LESSOR: COUNTY OF CONTRA COSTA TRANSOCEAN FINANCING a political subdivision of the State of CORPORATION California By: By �� ' Director of General Services J hua G. Cooperman, President APPROVED AS TO FORM: VICTOR J. WESTMAN, County Counsel, Y� EXHIBIT A MEMORANDUM OF LEASE AND TERMINATION OF PRIOR LEASE SCHEDULE OF P OPERTX The Property which is the subject of the attached MEMORANDUM OF LEASE AND TERMINATION OF PRIOR LEASE is as follows: The following described land and all buildings, improvements and fixtures now or hereafter located thereon: APN 129-190-012, -043, and --044, commonly known as 1034 Oak Grove Road, Concord, CA 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 "Ao as said Parcel is shown on Subdivision 4866, filed March 11, 1977, Map Book 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 13, 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, recorded January 14, 1955, Book 2457, Official Records, Page 559; thence from said point of beginning South 350 11' 10" East, along said center line, 181.86 feet to the Southeast line of said Eckert Parcel; thence North 510 471 11" 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" East, 120.37 feet to the Eastern corner of said Parcel "A„ thence along the Northeastern line thereof North 350 12149" 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 00' 32" West, 1.43 feet; thence leaving said Northern line North 350 11 , 10" East; 101.34 feet to the Northwest line of said Eckert Parcel; thence along said Northwest line South 4711 00' 32" 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 June 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 11' 10" East, along said center line, 181.86 feet to the Southeast line of said Eckert Parcel; thence along said Southeast line North 510 47 , 11° East, 42.06 feet; thence leaving said southeast line North 350 11' 10" West, 185.40 feet to the Northwest line of said Eckert Parcel; thence along said Northwest line south 470 001 321, West, 42 .39 feet to the point of beginning. 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 4866, filed March 11, 1977, Map Book 193, Page 37, Contra Costa County Records. (Being APN 129-190-012, 043 & 044) EXHIBIT G NOTICE OF ASSIGNMENT (1034 flak Grove Roan, Concord) Transocean Financing Corporation ("Lessor/Assignor") hereby gives notice to Contra Costa County ("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 March 1,2400(the "Agreement"),by and between Lessor and Lessee, as respects Exhibits A and B; (b) the property described in Exhibit B to the Agreement(the "Property"); and(c) all payments respecting the Property now or hereafter due or payable pursuant to the Agreement, including (but not limited to) rental payments and purchase option payments set forth on Exhibit B, to TRANSAMERICA PUBLIC FINANCE LLC (the "Assignee"), 2600 Grand Avenue, Suite 350, Kansas City, MO 64108, Attn: Senior Vice President (Tax I.D.: 36-4276524). All payments should be sent to the Assignee at the following address: TRANSAMERICA PUBLIC FINANCE LLC 9399 West Higgins Road,Ste. 600 Rosemont,IL 60018 Attn: Tim Milazzo Finance Dept. Lessee confirms that two semi-annual payments of interest and thirty-eight semi-annual payments of principal and interest according to the schedule set forth on Exhibit B to the Agreement remain due as of the date set 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) of Lessee has occurred and is continuing under the Lease,and to Lessee's actual knowledge,no event of default(or event which with the passing of time or the giving of notice or both would mature into an event of default) of Lessor has occurred and is continuing and that there exists no defense, counterclaim, recoupment or similar occurrence(other than the right of abatement of the Agreement)which would cause the Lessee not to make the remaining payments due under the Agreement. The Lessee also confirms that the interest rate will be adjusted following the twentieth payment, and that a revised amortization schedule will be substituted in lieu of Exhibit B at that time for the remaining twenty payments. Assignee has not assumed any of Lessor's obligations under the Lease. Dated as of the 1 st day of March,2000. TRANSOCEAN FINANCING CORPORATION, s Lessor/A"'gno By: 0 --—� Joshua G. Co german President ACKNOWLEDGED AND ACCEPTED. COUNTY OF CONTRA COSTA, a Lessee By: - Of-&A' Authorized icer TRANSA,MEF A PUBLIC FINANCE LLC, asp Alisigne By:, R4tw(Nep e,Senior Vice President (word&\1e.esX rt10541st) 13