HomeMy WebLinkAbout1981-479
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San Bernardino
(Tri-city)
60,009-9-3
THE CITY OF SAN BERNARDINO
CALIFORNIA
RESOLUTION NO. fil-tf7?
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA, CONSTI-
TUTING ITS TRUST AGREEMENT AND INDENTURE; CREATING
A TRUST ESTATE AND MAKING CERTAIN PROVISIONS
THEREFOR; AUTHORIZING THE ISSUANCE OF ITS INDUS-
TRIAL DEVELOPMENT REVENUE NOTE, TRI-CITY INDUS-
TRIAL PARK, LTD. PROJECT, 1981 SERIES (CONSTRUC-
TION LOAN) FOR THE PURPOSE OF PROVIDING FUNDS FOR
THE CONSTRUCTION OF MULTI-TENANT INDUSTRIAL
BUILDINGS; AND MAKING CERTAIN FINDINGS AND DETER-
MINATIONS IN CONNECTION THEREWITH
Lloyds Bank California, a California Corporation
Trustee
Dated as of October 1, 1981
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Whereas Clauses
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TABLE OF CONTENTS
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ARTICLE 1
GRANTING CLAUSES
Page
1
Section 1.01. Granting Clauses ................... 4
ARTICLE 2
DEFINITIONS
section 2.01. Definitions ........................ 6
section 2.02. Inclusiveness of Certain Terms...... 16
Section 2.03. Reference to Resolution of Issuance. 16
ARTICLE 3
THE CITY NOTE
section 3.01. Issuance of city Note; Purpose;
section 3.02.
Section 3.03.
Section 3.04.
section 3.05.
Section 3.06.
Section 3.07.
Section 3.08.
Mount ............................. 17
Terms; Maturity Date; Interest
Rate; Place of Payment; Form .......
Security for city Note; No City Debt
Payment of City Note at Election
of City From Other Lawfully
Available Funds; Refunding Bonds;
Advances by City ...................
Recitals of Regularity.............
Execution of City Note .............
Validity of City Note ..............
Replacement of City Note ...........
17
19
20
21
21
21
21
ARTICLE 4
DELIVERY OF CITY NOTE; ESTABLISHMENT
OF FUNDS; APPLICATION OF CITY NOTE PROCEEDS
Section 4.01. Delivery of City Note .............. 22
(i)
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Section 4.02. Application of Proceeds of city
Note ............................... 22
Section ..03. Disbursement from the Project Fund. 22
Section 4.04. Establishment of Completion Date ... 22
ARTICLE 5
REDEMPTION OF CITY NOTE PRIOR TO MATURITY
Section 5.01. Terms of Redemption ................ 23
Section 6.01.
Section 6.02.
Section 6.03.
Section 6.04.
Section 6.05.
Section 6.06.
Section 6.07.
Section 6.08.
Section 6.09.
Section 6.10.
Section 6.11.
Section 6.12.
Section 7.01.
Section 7.02.
Section 7.03.
Section 7.04.
Section 7.05.
Section 7.06.
Section 7.07.
Section 7.08.
ARTICLE 6
REVENUES AND FUNDS
Source of Payment of City Note ..... 24
Creation of City Note Fund ......... 24
Payments into City Note Fund ....... 24
Use of Moneys in City Note Fund .... 25
Custody of City Note Fund .......... 25
Project Fund ....................... 25
Payments into the Project Fund;
Disbursements ...................... 25
Completion of Project............... 26
Moneys to be Held in Trust ......... 26
Repayment to Company from city
Note Fund or Project Fund .......... 26
custody of Separate Trust Fund ..... 26
Additional Amounts Payable Under
tlle Agreement ...................... 27
ART I CLE 7
PARTICULAR COVENANTS OF THE CITY
Punctual Payment ...................
Maintain Corporate Existence .......
Enforcement of Agreement ...........
Further Assurance ..................
Not to Sell, Lease, Etc. ...........
Prosecution and Defense of
Suits Relating to Title ............
Limits on Additional Debt ..........
Covenant Covering Arbitrage ........
28
28
28
29
29
29
29
30
(ii)
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section 8.0l.
~ection 8.02.
Section 8.03.
Section 9. Ol.
Section 9.02.
Section 9.03.
Section 9.04.
Section 9.05.
Section 9.06.
section 9.07.
Section 9.08.
Section 9.09.
Section 9.10.
Section 9.1l.
Section 9.12.
section 10.0l.
Section 10.02.
section 10.03.
Section 10.04.
section 10.05.
Section 10.06.
Section 10.07.
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ARTICLE 8
SECURITY FOR AND INVESTMENT OF MONEYS
Trust Funds; Security.............
Moneys Deposited to be Held in
~lr\l!;~ .............................
Security for Deposits
. . . . . . . . . . . . .
ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
Events of Default .................
Trustee's Riqhts on Default .......
Actions upon Default ..............
No Waiver .........................
Suits at Law or in Equity.........
Trustee to Brinq Suits ............
Remedies Nonexclusive .............
II() ~Cl:i"~lr .........................
Use of Moneys Received by Trustee .
No Impairment of Lenders' Riqhts ..
Remedies Lawful; Severability.....
Notice of Event of Default to
Lender ............................
ARTICLE 10
CONCERNING THE TRUSTEE
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31
31
31
32
33
33
34
34
35
35
35
36
37
37
37
Acceptance of Trust ............... 38
No Responsibility for Correctness
For Statements in Resolution or
City Note ......................... 38
Compensation and Reimbursement .... 38
No Duty to Notice Default Under
Resolution...................:.... 38
No Duty to Take Enforcement Action
Unless 80 Requested by Lender ..... 39
Riqht to Make Advances for Perform-
ance of Duties Not Met by City;
Riqht to Lien Therefor ............ 39
Riqht to Rely on Documents
Believed Genuine, Etc. ............ 40
(Hi)
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section 10.08.
Section 10.09.
Section 10.10.
Section 10.11.
Section 10.12.
section 10.13.
Section 10.14.
Section 10.15.
Section 10.16.
section 10.17.
Section 10.18.
Section 10.19.
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Right to Allow and Credit Interest
upon Moneys Received Under Resolu-
tion .............................. 40
Construction of Ambiguous or
Inconsistent Provisions of Resolu-
tion Binding on Lender ............ 40
Right to Resign and be Discharged
of Trusts ......................... 41
Removal of Trustee ................ 41
Appointment of Successor Trustee
by Lender or City................. 41
Qualifications of Successor Trustee 42
Court Appointment of Successor
Trustee ........................... 42
Acceptance of Appointment by, and
Transfer of Trust Estate to,
Successor Trustee ................. 43
Successor Trustee by Merger or
Consolidation ..................... 43
Exercise of Rights and Powers
During Event of Default ........... 43
Intervention by Trustee ........... 44
Powers of Agent ................... 44
ARTICLE 11
MODIFICATION OF THIS RESOLUTION
Of I SSUANCE AND THE AGREEMENT
Section 11.01. Resolution to be Amended Only
in Manner Provided in Article 11 ... 45
Section 11.02. Permissible purposes For, and
Limitations Upon, Supplemental
Resolutions ........................ 4S
Section 11.03. Supplemental Resolutions Deemed
Part of Resolution; Trustee En-
titled to Rely upon Opinion of
Counsel............................ 66
Section 11.04. Supplemental Resolutions Affecting
Rights of Company Require Consent
of Company ......................... .,
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section 11.05. Amendments of Agreement Not
Adversely Affecting Interests of
~e Lender ......................... 47
ARTICLE 12
MISCELLANEOUS
section 12.01. Resolution to Bind and Inure to
Benefit of Successors of the
section 12.02.
Section 12.03.
Section 12.04.
Section 12.05.
Section 12.06.
Section 12.07.
section 12.08.
Section 12.09.
Section 12.10.
Ci ty ............................... 48
Provisions of Resolution for
Sole Benefit of Parties and Lender . 48
co~p~iance Certificates and
Op1D1ons ........................... 48
Form of Documents Delivered to
Trustee ............................ 49
Notices, Etc., to Trustee and
Ci ty ............................... SO
Notices to Lender; Waiver .......... 51
Effect of Headings and Table
of Contents ........................ Sl
Severabili ty ....................... 51
Officials, Officers, Agents and
Employees of City Exempt from
Individual Liability............... 51
Construction of Resolution of
Issuance and City Note Governed
by City Charter and California
Constitution and Laws ............. 52
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Exhibit A -
Exhibit B -
EXhibit C -
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EXHIBITS
City Note
Description of Project
Plans and specifications
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San Bernardino
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DSOLU'l'ION NO. .f 1- '1-,cr
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO, CALIFORNIA, CONSTI-
TUTING ITS DUST AGREEMENT AND INDENTURE; CREATING
A TRUST ESTATE AND MAXING CERTAIN PROVISIONS
THEREFOR; AUTHORIZING THE ISSUANCE OF ITS INDUS-
TRIAL DEVELOPMENT REVENUE NOTE, TRI-CITY INDUS-
TRIAL PARK, LTD. PROJECT, 1981 SERIES (CONSTRUC-
TION LOAN) FOR THE PURPOSE OF PROVIDING FUNDS FOR
THE CONSTRUCTION OF MULTI-TENANT INDUSTRIAL BUILD-
INGS; AND MAXING CERTAIN FINDINGS AND DETERMINA-
TIONS IN CONNECTION THEREWITH
WHEREAS, the City of San Bernardino (the .city.)
is a .unicipal corporation, duly organized and existing
under and by virtue of the Constitution of the State of
California and the City Charter of the City; and
WHEREAS, the City has adopted its Ordinance No. 3815
entitled "Ordinance of the City of San Bernardino Relating
to the Financing of Projects for the Encouraging of Increased
Employment Within the city" and certain amendments thereto
(collectively .Ordinance"); and
WHEREAS, said Ordinance is intended to provide a
lIeans for the financing of the development of industry and
commerce and to broaden thereby the employment opportunities
for residents of the City and its tax and revenue base; and
WHEREAS, DI-CITY INDUSTRIAL PARK, LTD., a Cali-
fornia Limited Partnership (the .Company") has submitted its
Application for the Issuance of an Industrial Development
Revenue Note as authorized by the Ordinance, and the Mayor
and Common Council of the City have adopted an initial
Resolution approving the same and lIaking the necessary
determinations, as requ5.red by the Ordinance; and
WHEREAS, pursuant to and in accordance vi th the
provisions of the Ordinance, the Company proposes to under-
take the construction of multi-tenant industrial buildings
located vest of Tippecanoe Avenue and South of Cooley Avenue
in the Southeast Industrial Park Project Area in San Bernardino,
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California (the "Facilities"), which Facilities are described
on Exhibit B attached hereto (the Facilities being referred
to as the "project"), and which Facilities are to be financed
by the Company in phases with the proceeds of a construction
loan to be evidenced by an agreement of even date herewith
(the "Agreement"), between the Company, the City and the
Trustee, and the City intends to finance such loan by the
issuance of its Industrial Development Revenue Note (the
"City Note") under this Resolution (the "Resolution"); and
WHEREAS, the City Note will be secured by a pledge
of the Revenues derived by the city under the Agreement and
of the proceeds of the city Note, and by said Facilities and
Land, as hereinafter defined; and
WHEREAS, said City Note will be offered to Lloyds
Bank California, a California corporation (the "Lender") for
purchase under the terms and conditions set forth herein;
and
WHEREAS, pursuant to the Application of Company,
it is the intention of the City, acting by and through its
Mayor and Common Council, to provide permanent financing to
the Company for the Project through the issuance of its
Industrial Development Revenue Bonds and the application of
the proceeds of such bonds to the payment of the City Note
at such time and in such manner as are agreed to by the City
and the Company, but in no event later than three (3) years
from the date of the issuance, sale and delivery of the City
Note to the Lender; and
WHEREAS, the Resolution and the issuance of the
city Note hereunder and under the Ordinance have been in all
respects duly and validly adopted and authorized by the
Mayor and Common Council of the City; and all things required
by the Ordinance to be done have been done; and
WHEREAS, it has been determined that the estimated
amount necessary to finance the Facilities, including neces-
sary expenses incidental thereto, will require the issuance,
sale and delivery of the city Note pursuant to the Ordinance
in the principal amount set forth in this Resolution; and
WHEREAS, all things necessary to make the City
Note, when issued as in the Resolution provided, the valid,
binding and legal special revenue obligation of the City
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according to the import thereof, and to constitute the Reso-
lution a valid assignment and pledge of the Revenues derived
by the City under the Agreement to the payment of the princi-
pal of and interest on the City Note and a valid assignment
and pledge of the Deed of Trust (as hereinafter defined) and
of the rights of the City under the Deed of Trust and of the
Agreement have been done and performed, and the creation,
execution and delivery of this Resolution, and the creation,
execution and issuance of the City Note, subject to the
terms hereof, have in all respects been duly authorized.
NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND
ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, AS FOLLOWS:
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ARTICLE 1
GRANTING CLAUSES
Section 1.01. Granting Clauses.
The City, in consideration of the promises and the
acceptance by the Trustee of the trusts hereby created and
of the purchase and acceptance of the City Note by the Len-
der, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, in order to secure
the payment of the principal of and interest on the city
Note according to its tenor and effect and to secure any and
all sums that may hereafter be advanced by the Lender for
the account of the City, and the performance and observance
by the City of all of the covenants expressed or implied
herein and in the Agreement and the City Note, does hereby
grant, convey, pledge, transfer and assign to the Trustee
and to its successor in trust the following (the "Trust
Estate"):
FIRST, all of the right, title and interest of the
City in and to the moneys to be deposited in the Project
Fund established by this Resolution, together with proceeds
of any investments and reinvestments made with such amounts
and moneys and the proceeds thereof, it being understood and
acknowledged that all of the foregoing shall be used as pro-
vided in the Agreement; and
SECOND, 'the amounts required by this Resolution
and the Agreement to be deposited from time to time in the
city Note Fund created by this Resolution, all Revenues and
all other amounts, from time to time held by the Trustee for
the benefit of the Lender pursuant to this Resolution
together with the proceeds of any investments and reinvest-
ments made with such amounts and moneys and the proceeds
thereof; and
THIRD, all of the City's right, title and interest
in and to the Agreement (except for the rights of the city
to receive payments, if any, under the Agreement), together
with all powers, privileges, options and other benefits of
the City contained in the Agreement, which are not specifi-
cally described in the Second Granting Clause above, includ-
ing, without limitation, the Loan, the Deed of Trust and
the Company Note referred to in the Agreement; 'provided,
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however, that nothing in this clause shall impair, diminish
or,to otherwise affect the City's obligations under the
Agreement, or, except as otherwise provided in this Resolu-
tion, impose any such obligations on the Trustee; and
FOURTH, any and all property of every kind or
description which may from time to time hereafter be sold,
transferred, conveyed, assigned, hypothecated, endorsed,
deposited, pledged, mortgaged, granted or delivered to, or
deposited with, the Trustee as additional security by the
City or anyone on its behalf or with its written consent, or
which pursuant to any of the provisions hereof or of the
Agreement, may come into the possession or control of the
Trustee or of a receiver lawfully appointed pursuant to
Article 9, as such additional security; and the Trustee is
hereby authorized to receive any and all such property as
and for additional security for the payment of the City Note
and coupons appertaining thereto, if any, and to hold and
apply all such property subject to the terms hereof.
,
The Trustee, and any successor Trustee, shall have
and hold the Trust Estate whether now owned or held or
hereafter acquired upon the terms and trusts herein set
forth for the benefit and security of the Lender and for
enforcement of the payment of the City Note and interest
appertaining thereto, in accordance with its terms, and all
other sums payable hereunder, under the Agreement, or on the
City Note and for the performance of and compliance with the
obligations, covenants and conditions of the city under this
Resolution, as if the City Note had been authenticated,
executed and delivered simultaneously with the execution and
delivery of this Resolution, all as herein set forth.
IT I S HEREBY COVENANTED, DECLARED AND AGREED THAT
THIS Resolution creates a continuing lien to secure the pay-
ment in full of the principal of and interest on the city
Note and any and all sums that may hereafter be advanced by
the Lender for the account of the City and that the City
Note is to be issued, authenticated and delivered, and that
the Trust Estate is to be held, dealt with and disposed of by
the Trustee, upon and subject to the terms, covenants,
conditions, uses, agreements and trusts set forth in this
Resolution, as follows:
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ARTICLE 2
DEFINITIONS
Section 2.01. Definitions.
The terms defined in this Article 2 shall, for all
purposes of this Resolution, have the meanings herein speci-
fied, unless the context clearly requires otherwise:
Acquire
"Acquire" and its variants shall mean acquire,
construct, improve, furnish, equip, remodel, repair, recon-
struct or rehabilitate. It is not intended that the word
"acquire" be used exclusively when one of the other words
(for example, "construct" or "improve") would be more descrip-
tive.
Administration Expense Fund
"Administration Expense Fund" shall mean the fund
created in that name by this Resolution.
Administration Expenses
"Administration Expenses" shall mean the reason-
able and necessary expenses incurred by the City in ad-
ministering the Agreement, this Resolution, and the finan-
cing of the Project, as hereinafter defined, including
(without limitation) fees and costs of the Trustee, attorneys,
consultants and others.
Agent
"Agent" shall mean Lloyds Bank California, a
California Corporation, and its successors in interest, if
any, as the Agent for the City in administering the Loan.
Agreement
"Agreement" shall mean the Project Agreement per-
taining to the Project, dated as of October 1, 1981, by and
between the City, the Company, and the Agent, and any and
all modifications, alterations, amendments and supplements
thereto.
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Authorized Company Representative
"Authorized Company Representative" shall mean a
person authorized to act on behalf of and bind the Company.
Such authorization shall be evidenced by written certifi-
cate, power of attorney, or other instrUlllent acceptable to
. the City and the Trustee, furnished to the City, the Agent,
and the Trustee, as the case may be, containing the specimen
signature of the Authorized Company Representative and
executed and signed on behalf of the Company by one of the
veneral partners thereof, (and shall be accompanied by an
unqualified Opinion of Counsel to the Company as to the
foregoing]. Such certificate, power of attorney or in-
8trUlllent may designate one or more alternate representatives
and may designate a different Authorized Company Repre-
sentative to act for the Company with respect to different
sections of the Agreement and this Resolution, and any other
docUlllents which are a part of the financing transaction
which is the subject of the Agreement and this Resolution.
Basic Rate
"Basic Rate" is the per annUIII rate of interest
calculated as one-half (1/2) of the Prime Interest Rate plus
three percent (3%). Said Basic Rate is to be adjusted on
the day the Prime Interest Rate changes and is to be com-
puted on the basis of a 360-day year, but accrued on the
actual nUlllber of days elapsed.
Bond or Bonds
"Bond" or "Bonds" means the bonds, including
principal (premiUIII, if any) and interest, authorized to be
issued by the City under the Ordinance, including a single
bond, a promissory note or notes, or other instrUlllents
evidencing an indebtedness or obligation.
Bond Counsel
-Bond Counsel" shall mean any firm of nationally
recognized bond counsel of favorable reputation selected by
the City.
Business Day
-Business Day" shall mean a day on which banking
business is transacted in the City in which the Trustee has
its principal corporate trust office.
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Certificate of the City,
Statement of the City, etc.
"certificate of the City," "statement of the
City," "Written Request of the City" and "Written Consent of
the City" mean, respectively, a written certificate, state-
ment, request and consent signed in the name of the City by
~uch person as may be designated and authorized to sign for
the City for such purpose, with the seal of the City affixed.
Any such instrument and supporting opinions or representa-
tions, if any, may, but need not, be combined in a single
instrument with any other instrument, opinion or representa-
tion, and the two or more so combined shall be read and con-
strued as a single instrument.
"City" shall mean the City of San Bernardino,
California, or its legal successor, if any.
City Note
"City Note" shall mean the Note of the City autho-
rized by and outstanding pursuant to this Resolution in the
form attached hereto as Exhibit A.
City Note Fund
"city Note Fund" shall mean the Fund by that name
created by this Resolution.
City Note Proceeds
"city Note Proceeds" shall lIean all amounts received
by the city upon the sale or other disposition of the city
Note issued hereunder.
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.Code" ahall mean the Internal Revenue Code of
1954, as amended.
Company
"Company" ahall mean Tri-City Industrial Park,
Ltd., a Limited Partnership, duly formed and validly in
existence pursuant to the laws of the State of California,
or any entity which is the surviving, resulting or trans-
feree entity in any sale of or transfer of assets.
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Company Note
.Company Note" shall mean that certain promissory
note secured by the Deed of Trust issued by the Company to
the City under the Agreement evidencing the Loan referred to
in the Agreement.
Company Representative
.Company Representative" shall lIean the person or
persons at the time designated to act on behalf of the
Company by written certificate furnished to the City, the
Trustee and the Agent, and containing the specimen signature
of such person or persons.
Completion Date
"completion Date" shall mean the date of completion
of construction of the Facilities, certified as provided in
Section 3.02 of the Agreement.
Conflict of Interest
.Conflict of Interest" shall mean an interest
which constitutes a conflict of interest as applied to
public officials, public officers and employees in the state
and shall also mean an interest sufficient to make it reason-
ably foreseeable that such interest will operate to prevent
the Trustee from the faithful and unbiased performance of
its duties hereunder or which is otherwise adverse to the
interest of the Lender under the laws of this State. Such
term shall not include any interest which is expressly
permitted herein, and the fact that the Trustee, Agent and
Lender are one and the same shall not be deemed a conflict
of interest hereunder.
Cost of Construction
.Cost of Construction" shall lie an the cost of
constructing the Facilities, except any of such costs that
were paid or were payable on or prior to September 14, 1981,
and may include all costs permitted by the Ordinance inClUding,
without limiting the generality of the foregoing:
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(1) The cost of construction of the Facilities,
including rights in both real and personal properties
constituting the Facilities and franchises and disposal
rights, including without limitation, taxes and insurance;
(2) The cost of machinery, equipment and furnish-
ings and of engineering and architectural surveys,
plans and specifications;
(3) The cost of consultant services, including,
without limitation, legal, financial, engineering,
accounting, and auditing, necessary or incident to the
Project, and of the determination as to the feasibility
or practicability of undertaking the Project;
(4) The cost of financing, including, without
limitation, reserves for securing principal and interest
payments on the city Note and the Company Note and for
extensions, enlargements, additions, repairs, replace-
ments, renovations and improvements;
(5) The cost of acquiring approved refinancing of
existing obligations, incident to the development and
construction (including the financing) of said Facili-
ties; and the reimbursement to any governmental entity
or agency or to the Company, of expenditures made by or
on behalf of such entity, agency, or Company that are
costs of the Facilities hereunder, without regard to
whether or not such expenditure may have been made
before or after the undertaking of the financing of the
Facilities by the City or the delivery of the city
Note, or the Company Note under and pursuant to Ordinance
No. 3815, all to the extent that such costs may be
legally paid from the city Note proceeds;
(6) Interest on the City Note and the Company
Note prior to the Completion Date;
provided, however, that working capital shall not be included
as a component of the Cost of construction.
Counsel
.Counsel" shall mean an attorney at law or firm of
attorneys at law (and may be counsel to the City or the
Company, as the context may require) satisfactory to the
Trustee, and which shall not be full-time employees of the
Company.
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Deed of Trust
"Deed of Trust" shall mean the deeds of trust in
the form attached hereto as Exhibit B, dated as of the date
hereof, executed by the Company as Trustor in favor of the
Trustee as Beneficiary, given to secure the payment of the
City Note and the Company Note, and creating a first and
prior lien on the Project.
Event of Default
"Event of Default" when used in reference to the
Agreement shall mean any event of default specified in
Article 8 of the Agreement, and, when used in reference to
this Resolution, shall mean any event of default specified
in Section 9.01 of this Resolution.
Facili ties
"Facilities" shall mean all real and personal
property financed with the proceeds of the City Note and
which is to be located on the Land, including incidental
facilities and appurtenances and appurtenant work, and also
including all substitutions, modifications and additions
thereto as from time to time may be made by the Company.
Financial Newspaper or Journal
"Financial Newspaper or Journal" shall mean a
daily or weekly financial newspaper or journal of general
circulation in the Borough of Manhattan, City of New York,
State of New York, together with a daily or weekly peJ;'iodi-
cal of general circulation in the city of Los Angeles, State
of California, printed in the English language and custom-
arily published at least five (5) days a week, whether or
not published on Saturday, Sunday or any holiday. Whenever
successive weekly publications are required hereunder, they
may be made (unless otherwise expressly provided herein) on
the same or different days of the week and in the same or in
different Financial Newspapers or Journals.
Fiscal Year
"Fiscal Year" shall mean the year period beginning
on January 1 and ending on the next following December 31.
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Governmental Department
"Governmental Department" means any commission,
department, or agency of the State or of the United States
of America with which, under any provision of law (other
than the Ordinance) the offer, issuance, or sale of the City
Note is subject to authorization, qualification or registra-
tion.
Guarantors
"Guarantors" shall mean the Company.
Independent
"Independent" when used with such terms as "Archi-
tect," "Financial Consultant," or "Certified Public Accoun-
tant," shall mean any person or firm, respectively, appointed
by the City or the Company, as the context may require, in
such capacity, and who, or each of whom, has a favorable
reputation in the field in which his opinion or certificate
will be given, and:
(1) is in fact independent and not under the
control of the City or the Company;
(2) does not have any substantial interest,
financial or otherwise, direct or indirect, in or with
the City or the Company; and
(3) is not connected with the City or the Company
as officer or employee of the city or the Company, but
who may be regularly retained to make reports to the
City or the Company.
Land
"Land" shall mean the land described in Exhibit C
attached hereto, on which the Facilities are to be located.
~
"Loan" shall mean the loan by the City to the
Company of such portion of the proceeds of the sale of the
City Note as is to be used to finance the Facilities, exclu-
sive of reserves or funds required to pay costs incurred in
connection with the issuance of the City Note.
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Net Proceeds
WNet Proceeds," when used with respect to any
insurance proceeds from policies required to be maintained
by the Company by this Agreement, means the amount remaining
after deducting from gross proceeds all expenses (including
attorneys' fees) incurred in the collection thereof.
OPinion of Counsel: Bond Counsel
wOpinion of Counsel" means a written opinion of
Counsel (who may be Counsel for the City, Company or Bond
Counsel, as the case may be). Any Opinion of Counsel may be
based upon, insofar as it relates to factual matters, infor-
mation which is in the possession of the City or the Com-
pany, as the case may be, a written certificate of an offi-
cer of the city, or 'the Company, as relevant, delivered to
Counsel, unless Counsel knows, or in the exercise of rea-
sonable care should know or have known, that the certificate
is erroneous, incomplete or misleading.
Ordinance
"Ordinance" means Ordinance No. 3815 of the City
entitled "Ordinance of the City of San Bernardino Relating
to the Financing of Projects for the Encouraging of Increased
Employment Within the City" and all amendments thereto,
under the authority of which this Resolution is adopted and
the City Note is to be issued.
Permitted Encumbrances
"Permitted Encumbrances" means, as of any parti-
cular time, (i) liens for taxes and assessments not then
delinquent or which the Company may, pursuant to the pro-
visions of Section 8.08 of the Agreement, hereof, permit to
remain unpaid, (ii) this Resolution of Issuance, the Agree-
ment, the Deed of Trust and any financing statements naming
the City or the Company as debtor and naming the Trustee or
the City as secured party filed to perfect the security
interests granted by the Deed of Trust, the Agreement and
this Resolution of Issuance, (iii) utility access and other
easements and rights-of-way, restrictions and exceptions
that in the opinion of the Agent will not interfere with or
impair the Project or its merchantability, and (iv) such
minor defects, irregularities, encumbrances and clouds on
title as normally exist with respect to property similar in
character to the Project and do not substantially impair the
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property affected thereby for the purpose for which the City
has loaned its funds.
Phase I
"Phase I" shall mean the first portion of the
Facilities which will be constructed under the Project.
Plans and Specifications
.Plans and Specifications" means the plans and
specifications for the Facilities more particularly iden-
tified in Exhibit C hereto, as the same may be amended from
time to time pursuant to Section 3.0l(c) of the Agreement.
Prime Interest Rate
.prime Interest Rate" is that rate of interest
being charged by Lloyds Bank California, a California Corpo-
ration, on ninety (90) day unsecured loans to said Bank's
most substantial and most responsible borrowers as of the
date of delivery of the city Note and the Company Note, and,
thereafter, as of each day that Lloyds Bank California may
adjust such Prime Interest Rate. Said interest rate to be
adjusted on the day the "Prime Interest Rate" changes and is
to be computed on the basis of a 360 day year, but accrued
on actual number of days elapsed. In the event that Lloyds
Bank California shall fail to establish or publish a .Prime
Interest Rate," then, for purposes hereof, the "Prime Inter-
est Rate" shall be deemed to be the average Prime Interest
Rate for each calendar month of the three (3) largest (total
assets) banking institutions in the continental United
States then publishing a Prime Interest Rate.
Proceedinqs
.proceedings" means the actions taken by the City
in undertaking, carrying out and completing the Project,
including, without limitation, authorizing and executing the
Agreement, this Resolution, the Company Note, the City Note,
the Deed of Trust, and any and all other agreements and
documents involved in the issuance, sale, and delivery of
the City Note, the security therefor, and the expenditure of
the City Note proceeds.
Project
.Project" shall mean the Facilities.
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-
lillect Fund
.Project Fund" shall mean the Fund by that name
created by this Resolution.
Purchaser
. -Purchaser" shall lie an L10yds Bank. California, a
California Corporation, as purchaser of the city Note from
the City, 80metimes referred to as -Lender.-
Resolution of Issuance
-Resolution of Issuance" lIeans this Resolution.
Responsible Officer
uResponsib1e Officer" shall mean the president,
every vice-president, every assistant vice-president, and
secretary, every assistant secretary, every trust officer
and every other officer and assistant officer of the Trustee
or any separate trustee or co-trustee hereunder to whom any
matter relating to this Resolution is referred.
Revenues
-Revenues" shall mean all payments and other
income derived by the City from the Company or its legal
successor in interest, if any, under the Agreement, and any
receipts derived from the investment of any such income or
the City Note Proceeds in any fund or account of the city
created by this Resolution, but does not include receipts
designated to cover administrative expenses.
state
.State" means the State of California.
Supplemental Resolution
.Supplementa1 Resolution" means any resolution at
any time in full force and effect which has been duly and
validly adopted by the City under the Ordinance, or under
any act supplementary thereto or amendatory thereof, amenda-
tory of or supplemental to this Resolution, but only if and
to the extent that such Supplemental Resolution is specifi-
cally authorized hereunder.
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Treasurer
ItTreasurer" means the officer who is then perform-
ing the functions of Treasurer of the City.
Trust Estate
ItTrust Estate" shall mean at any particular time
all moneys and rights, titles and interests described in the
granting clauses of this Resolution.
Trustee
ItTrustee" shall mean L10yds Bank California,
a California Corporation, and its successors in interest, if
any, as Trustee.
Written Requisition
-Written Requisition" means a requisition for
disbursement of funds from the Project Fund, prepared in the
form and containing the information, required by section 4.03
of this Resolution and signed by the Treasurer.
section 2.02.
Inclusiveness of Certain Terms.
Words of any
to include correlative
expressing singularity
p1urali ty.
gender shall be deemed and construed
words of the other gender, and words
shall be deemed also to include
Section 2.03.
References to Resolution of
Issuance.
The terms Ithereby," Ithereof," -hereto,. .herein,.
-hereunder,. and any similar terms, as used in the Resolu-
tion, refer to the Resolution and not solely to the parti-
cular portion hereof in which such word is used.
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ARTICLE 3
THE CITY NOTE
Section 3.01. Issuance of city Note:
Purpose: Amount.
An Industrial Development Revenue Note of the City
(the .City Note") is hereby issued under and subject to the
terms of this Resolution for the object and purpose of
providing the funds required to pay the Cost of Construction.
The proceeds of the City Note shall be used by the City to
lIake the Loan, pursuant to the Agreement. The City Note
issued under the provisions of this Resolution shall be in
the principal amount of $1,750,000.00, or such lesser amount
as may be advanced under the City Note. The City Note shall
be sold and delivered at such time and in such manner as
shall be established and authorized by the City, subject to
the conditions and limitations herein contained.
Section 3.02. Terms: Maturity Date: Interest
Rate; Place of Payment; Form.
(a) The City Note shall be substantially in the
form attached hereto as Exhibit A.
(b) Interest on the outstanding balance of the
City Note shall be payable on the first day of each calendar
month at the Basie Rate.
(c) Notwi thstanding the foregoing, if the interest
on the city Note becomes subject to federal income taxation
pursuant to an "Official Determination" as that term is
defined below, then the interest rate described above shall
be immediately increased to three percent (3%) per annum
above the Prime Interest Rate, and the undersigned forthwith
shall pay to the Trustee the aggregate difference between
(1) the lIonthly payments actually lIade to the Trustee on the
city Note from the "Taxable Date, II as that term is defined
below, to the effective date of the rate increase, and (2)
the monthly payments which would have been made during such
period had the interest on the City Note been at the rate of
three percent (3%) per annum above the Prime Interest Rate.
The Trustee or the Purchaser of the City Note may protest or
contest any .Official Determination." If an "Official
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Determination" is protested or contested, interest and
principal shall continue to be payable at an interest rate
of three percent (3%) per annum above the Prime Interest
Rate while such protest or contest is pending. If such
protest or contest is successful (whether by binding agreement
or adjudication) the Trustee shall apply all interest col-
lected in excess of the Basic Rate said excess collected
shall be refunded with any interest received from the Internal
Revenue Service or at the highest rate available under the
Trustee's normal banking rules. The excess shall be refunded
to the Company. Without in any way limiting the survival of
other provisions of the City Note, the City hereby expressly
agrees that the obligations imposed on the undersiqned by
this paragraph shall survive payment and discharge of the
City Note.
The term "Official Determination" shall mean
(and for all purposes of the City Note shall be deemed to
have occurred as of) a change in the Internal Revenue Code
of 1954, as amended, the issuance of a statutory notice of
deficiency or a ruling by the Internal Revenue Service or a
ruling by any court of competent jurisdiction or any other
occurrence the effect of which is to make the interest
payable on the City Note includable in the gross income of a
holder hereof (except to the extent that such interest is so
includable because the holder is a "substantial user" of the
Project or a "related person" as such terms are defined in
Section 103 of the Internal Revenue Code of 1954, as amended).
The term "Taxable Date" shall mean the date
as of which interest payable on the City Note is includable
in the gross income of a holder thereof by reason of an
Official Determination.
(d) All principal, interest, and other amounts
payable hereunder shall be payable in lawful money of the
Uni ted States of America which at the time of payment is
legal tender for the payment of public and private debts.
(e) Any interest on the City Note not paid when
due shall thereafter bear interest at a rate e~al tc. five
percent (5%) per annum in excess of one-half of the ~'.:ime
Interest Rate unless interest becomes taxable under subsection
403(d), in which case interest shall be calculated at 5% in
excess of the Prime Interest Rate. In addition to such
interest, the undersigned promises to pay upon demand all
reasonable late or collection charges incurred by the Trustee
in connection with such late payment.
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section 3.03. Security for City Note; No
City Debt.
The city Note, together with interest thereon, is
a special obligation of the City issued pursuant to and sub-
ject to the terms and conditions of the Ordinance, that certain
Section 19 of which provides as follows:
H(a) None of the Bonds issued by the city pursuant
to this Ordinance shall be deemed to constitute a debt
or liability of the City, or a pledge of the faith and
credit of the City, but shall be payable solely from
the Revenues and other funds, if any, provided therefor
in the proceedings.
H(b) The issuance of Bonds shall not directly or
indirectly or contingently obligate the City to levy or
to pledge any form of taxation whatsoever therefor or
to make any appropriation for their payment.
"(c) All Bonds shall contain on the face thereof a
statement to the following effect:
"'Neither the faith and credit nor the taxing
power of the City of San Bernardino is pledged to
the payment of the principal of, premium, if any,
or interest on this Bond, nor is the City of San
Bernardino in any manner obligated to make any
appropriation for payment.'
U(d) Neither the Mayor and Common Council nor any
persons executing the Bonds shall, in any event, be
subject to any personal liability or accountability by
reason of the issuance of such Bonds.
H(e) The Bonds shall be a special obligation of
the City, and the City shall, under no circumstances,
be obligated to pay Bonds or Project costs (other than
Administrative Expenses), except from Revenues and
other funds received under the Project Agreements for
such purposes, nor to pay Administrative Expenses
except from funds received under Project Agreements for
such purposes, or from funds which are made available
as otherwise authorized by law. All Bonds shall contain
on the face thereof a statement of their special obli-
gation nature."
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The above direct quotation from the Ordinance
is phrased in terms of "Bonds," which term, under said
Ordinance, includes bonds, notes or other instruments evidencing
an indebtedness or obligation, therefore it applies directly
to the City Note.
The validity of the City Note is not and shall not
be dependent upon the completion of the Project or upon the
performance by any person, firm, corporation, partnership,
association, or other entity, whether private, public or
governmental of any obligations of any of the foregoing re-
lative to the Project.
Section 3.04. Payment of the City Note at
Election of City From Other
Lawfully Available Funds;
Refunding Bonds; Advances
by city.
Notwithstanding anything to the contrary contained
in this Resolution, the City may, to the extent otherwise
permitted by the Constitution and laws of the state of
Calfornia and the City Charter of the City, as said Consti-
tution, laws and city Charter now exist, or as the same may
be amended from time to time:
(a) payor provide for the payment of the City
Note and any interest payable thereon, from the proceeds
of bonds, refunding bonds, refunding notes, or other
obligations issued by or on behalf of the City;
(b) payor provide for the payment of the City
Note and any interest payable thereon, from any legally
available funds of the City, including, without limita-
tion, any funds made available to the City by the
United states, the state of California, or any department
or agency of the foregoing or any other public or
private corporation or agency; or
(c) advance any of its own funds lawfully available
therefor as a loan or contribution to the Project, the
Facilities, or to the payment of the City Note and any
interest payable thereon, on such terms and conditions
as determined by the City.
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Section 3.05. Recitals of Regularity.
The recitals of regularity of proceedings in the
city Note issued and sold under this Resolution shall be
conclusive evidence of compliance with the provisions of the
Ordinance, this Resolution, and of the validity of the City
Note.
Section 3.06. Execution of City Note.
The City Note shall be executed in the name and on
behalf of the city and under its seal with the signature of
the Mayor and the manual signature of the City Clerk in lieu
of the manual signature of the city Clerk, such signature
may be by facsimile, in which case the City Note shall be
authenticated by the manual signature of a duly authorized
officer of the Trustee.
Section 3.07. Validity of City Note.
The validity of the authorization and issuance of
the City Note shall not be dependent on or affected in any
way by:
(a) any proceedings taken by the City or the
Company or their agents for the acquisition, construc-
tion or completion of the Project or any part thereof;
or
(b) any contracts made by the City or the Company
or their agents in connection therewith; or
(c) the failure of the Company, or its agents, to
complete acquisition of the Project or any part thereof
in accordance with the Agreement.
Section 3.08. Replacement of City Note.
Upon receipt of evidence satisfactory to the
Trustee of the loss, theft, destruction or mutilation of the
city Note and, in the case of any such loss, theft, or
destruction, upon the delivery of an indemnity agreement
satiSfactory to the Trustee and the city or, in case of any
mutilation, upon the surrender and cancellation of such
mutilated the City Note, the City at the expense of the
Lender will issue a new City Note, of like tenor, in lieu of
such lost, destroyed or mutilated the City Note.
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ARTICLE 4
DELIVERY OF CITY NOTE; ESTABLISHMENT
OF FUNDS; APPLICATION OF CITY NOTE PROCEEDS
Section 4.01. Delivery of City Note.
The City may order the Trustee to deliver the City
Note to the Lender at any time after the adoption of this
Resolution, upon delivery to the Trustee of the following:
(a) an original executed counterpart of the
Agreement and this Resolution; and
(b) a Certificate of the City authorizing the
Trustee on behalf of the City to deliver the city Note
to the Lender.
Section 4.02. A~plication of Proceeds of
CJ.ty Note.
All proceeds received by the City under the City
Note shall be deposited with the Trustee from time to time
as requisitioned ny Agent, who shall forthwith set aside
such proceeds in the manner described in the Agreement and
Article 6 hereof.
Section 4.03. Disbursements from the Project
Fund.
The City and Trustee hereby authorize and direct
Agent to make disbursements from the Project Fund to pay the
Cost of Construction, or to reimburse the Company for any
Cost of Construction paid by it, upon the terms set forth in
the Agreement.
Section 4.04. Establishment of Completion
~.
The Completion Date shall be evidenced to the City
and Trustee by a certificate signed by an Authorized Company
Representative in the form specified in the Agreement.
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ARTICLE 5
REDEMPTION OF CITY NOTE PRIOR TO MATURITY
Section 5.01. Terms of Redemption.
The City Note is callable for redemption at any
time on payment of the principal amount thereof and accrued
interest to the date of redemption.
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ARTICLE 6
REVENUES AND FUNDS
Section 6.01. Source of Payment of City Note.
The City Note issued hereunder and all payments
thereon by the City hereunder are not general obligations of
the city but are limited obligations payable solely from
Revenues derived from the Agreement and as authorized by the
Ordinance and provided herein.
All Revenues, including, without limitation, pay-
ments on the Company Note, are to be remitted directly to
Agent for the account of the city and deposited in the City
Note Fund. Such payment is pledged to payment of the City
Note and any additional sums hereafter advanced by the
Lender on account of the city.
Section 6.02. Creation of City Note Fund.
There is hereby created by the City and ordered
established with Trustee a trust fund to be designated -The
City of San Bernardino, California, Industrial Development
Revenue Note Fund (Tri-City Industrial Park, Ltd. Project),.
which shall be used to pay the principal of and interest on
the city Note.
Section 6.03. Payments into City Note Fund.
There shall be deposited into the City Note Fund,
as and when received, (a) any amount in the Project Fund
directed to be paid into the City Note Fund in accordance
with the provisions of Section 4.03 of the Agreement; (b)
all payments specified in Section 4.09 of the Agreement; (c)
any payments received pursuant to the Deed of Trust; and (d)
all other moneys received by Trustee under and pursuant to
any of the provisions of the Agreement which are required or
which are accompanied by directions that such moneys are to
be paid into the city Note Fund. The City hereby covenants
and agrees that so long as the city Note issued hereunder is
outstanding, it will deposit, or cause to be paid to Trustee
for deposit in the City Note Fund for its account, sufficient
sums from the amounts derived from the Agreement, promptly
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to meet and pay the principal of and interest on the City
Note as the same become due and payable.
Section 6.04. Use of Moneys in City Note
~.
Except as provided in section 6.11 hereof, moneys
in the City Note Fund shall be used solely for the payment
of the principal of and interest on the city Note at or
prior to maturity.
Section 6.05. Custody of City Note Fund.
The city Note Fund shall be in the custody of
Trustee but in the name of the City, and the City hereby
authorizes and directs Trustee to withdraw sufficient funds
from the city Note Fund to pay the principal of and interest
on the City Note as the same become due and payable, which
authorization and direction Trustee hereby accepts.
Section 6.06. Project Fund.
There is hereby created and established with the
Trustee a trust fund in the name of the city to be desig-
nated "The city of San Bernardino, California, Industrial
Development Revenue Note Project Fund (Tri-City Industrial
Park, Inc. Project)," which shall be administered by Agent
and expended in accordance with the provisions of the
Agreement.
Section 6.07. Payments into the Project Fund;
Disbursements.
The proceeds of the issuance and delivery of the
City Note shall be deposited in the Project Fund at such
time or times as received by the Trustee for the city pur-
suant to requisitions by Agent as set forth in the Agree-
ment. Agent is hereby authorized and directed to make each
disbursement from the Project Fund required by the pro-
visions of the Agreement. Agent shall keep and maintain
adequate records pertaining to the Project Fund and all
disbursements therefrom, and, after the Project has been
completed and a certificate of payment of all costs has been
filed as provided in Section 6.08 hereof, Agent and Trustee
shall file an accounting thereof with the Company.
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Section 6.08. Completion of Project.
The completion of the Project and payment or
prov1s1on made for payment of all Costs of Construction
shall be evidenced by the filing with Trustee of the cer-
tificate required by the Agreement. As soon as practicable
and in any event not more than sixty (60) days from the date
of the certificate referred to in the preceding sentence any
balance remaining in the Project Fund shall without further
authorization be used by Trustee in the manner provided in
the Agreement.
section 6.09. Moneys to be Held in Trust.
All moneys required to be deposited with or paid
to Trustee for account to any fund referred to in any pro-
vision of this Resolution or the Agreement shall be held by
Trustee in trust, and shall, while held by Trustee, con-
stitute part of the Trust Estate and be subject to the lien
or security interest created hereby.
Section 6.10. Repayment to Company from
City Note Fund or Project
Fund.
Any amounts rema1n1ng in the City Note Fund or
Project Fund after payment in full of the principal of and
interest on the City Note, the fees, charges and expenses of
Trustee and all other amounts required to be paid hereunder
shall be paid immediately to the Company, unless under
supplemental agreement between the Company and the City,
such sums are to be transferred to funds established in
connection with the issuance of bonds by City to provide
permanent financing for the Project.
Section 6.11. CUstody of Separate Trust Fund.
Trustee is authorized and directed to hold all net
proceeds from any insurance proceeds or condemnation awards
and disburse such proceeds in accordance with Article 6 of
the Agreement. Jf the Company directs that any portion of
such net proceeds be applied to pay the City Note, the City
covenants and agrees to take and cause to be taken the
necessary steps to cause such payment to be made as specified
by the Company.
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Section 6.12. Additional Amounts Payable
Under the Agreement.
Pursuant to the Agreement, the Company has agreed
to pay the fees and expenses of Trustee. All .uch payments
.hall be paid directly to the party to whom due.
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ARTICLE 7
PARTICULAR COVENANTS OF THE CITY
Section 7.01. Punctual Payment.
The City will promptly payor cause to be paid,
and the Revenues are hereby assigned to pay, the principal
of and interest on the City Note issued hereunder and secured
hereby and any additional sums hereafter advanced by the
Lender for the account of the City, at the place, on the
date and in the manner specified herein and in the City
Note, according to the true intent and meaning thereof;
provided, however, that all principal of and interest on the
city Note shall be payable solely out of the Revenues, or
out of the proceeds of the City Note. Except as to the
application of Revenues as herein described, the City addi-
tionally shall not in any event be liable for the payment of
the principal of or interest on the city Note or for the
performance of any pledge, mortgage, obligation or agreement
of any kind whatsoever which may be undertaken by the City,
and neither the city Note nor any of the agreements or
obligations of the city shall be construed to constitute an
indebtedness of the City within the meaning of any constitu-
tional or statutory provision of the State whatsoever,
except as provided herein.
Section 7.02. Maintain Corporate Existence.
The City will at all times maintain its corporate
existence or assure the assumption of its obligations under
this Resolution by any public body succeeding to its powers
under the Constitution and laws of the state, and it will
use its best efforts to maintain, preserve and renew all the
rights and powers provided to it by the Constitution and
laws of the state; and it will comply with all valid acts,
rules, regulations, orders and directives of any legislative.
executive. administrative or judicial body applicable to
this Resolution. the Agreement, the city Note and the Deed
of Trust.
Section 7.03. Enforcement of Agreement.
So long as the city Note is outstanding, the City
will enforce the obligations of the Company to pay, or cause
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to be paid, all the payments and other costs and charges
payable by the Company under the Agreement. Except as spe-
cifically provided for herein, the City will not amend this
Resolution or enter into any agreement, with the Company
amending the Agreement, or the Deed of Trust, without the
prior written consent of the Trustee and the Lender.
section 7.04. Further Assurance.
The City will from time to time execute and de-
liver such further instruments and take such further action
as may be reasonable and as may be required to carry out the
purposes of this Resolution.
Section 7.05. Not to Sell, Lease, Etc.
Except for the assignment to the Trustee herein,
the city will not sell, lease or otherwise dispose of or
encumber its interest in the Agreement, or the Deed of
Trust, or any of the payments or receipts derived therefrom,
and will promptly payor cause to be discharged or make
adequate provision to satisfy and discharge any lien or
charge on any part of such payments or receipts.
Section 7.06. Prosecution and Defense of
Suits Relating to Title.
The City hereby agrees that it shall upon request
of the Trustee promptly from time to time take such action
as may be necessary and proper to remedy or cure any defect
in or cloud upon the title to the Project or any part thereof,
whether now existing or hereafter developing, and shall pro-
secute all such suits, actions and other proceedings as may
be appropriate for such purpose.
Section 7.07. Limits on Additional Debt.
The City covenants that no additional indebtedness
payable in whole or in part out of the Revenues or secured
in whole or in part by the real property covered by the Deed
of Trust shall be incurred except with the prior written
consent of the Trustee and the Lender, as necessary or
desirable to provide permanent financing for the Project and
the payment of the city Note and interest thereon.
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Section 7.08. Covenant Covering Arbitrage.
The city hereby covenants to the Lender that it
will make no use of the proceeds of the City Note at any
time during the term thereof which, if such use had been
reasonably expected at the date the city Note is issued,
would have caused such city Note to be an "arbitrage bond"
within the meaning of Section 103(c) of the United States
Internal Revenue Code of 1954, as amended, and applicable
regulations adopted or proposed thereunder by the Internal
Revenue Service or the U.s. Treasury, and the city hereby
assumes the obligation to comply with such Section 103(c)
and such regulations throughout the term of the city Note.
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ARTICLE 8
SECURITY FOR AND INVESTMENT OF MONEYS
Section 8.01. Trust Funds; Security.
All moneys from time to time received by the
Trustee and held in the City Note Fund, and all moneys in
the Project Fund (pending disbursement to the Company) shall
be held in trust as security for the benefit of the Lender.
Section 8.02. Moneys Deposited to be Held
in Trust.
All moneys deposited with the Trustee under the
provisions of this Resolution shall be applied only in
accordance with the provisions of this Resolution, and shall
not be subject to lien or attachment by any creditor of the
city, other than the lien of the Lender secured by this
Resolution.
Section 8.03. Security for Deposits.
All moneys held hereunder by the Trustee shall be
held in time or demand deposits and shall be continuously
and fully secured at all times by such obligations and to
the fullest extent as shall be required by law for public
deposits, except to the extent that moneys are invested as
hereinafter provided.
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ARTICLE 9
EVENTS OF DEFAULT AND REMEDIES
Section 9.01. Events of Default.
(a) Each ~f the following events shall constitute,
and be referred to in this Resolution as, an WEvent of
Defaul t II :
(1) failure of the city to pay the principal of
the City Note when and as the same shall become due and
payable;
(2) failure of the City to pay any installment of
interest on the City Note when and as the same shall
become due and payable;
(3) the occurrence of an Event of Default under
the Agreement, the Company Note or Deed of Trust;
(4) failure by the City in the performance or
observance of any other of the covenants, agreements or
conditions on its part contained in this Resolution or
in the City Note, which failure shall continue for a
period of thirty (30) days after written notice specify-
ing such failure and requesting that it be remedied, is
given to the City by the Trustee or to the City and to
the Trustee by the Lender; or
(5) any representation of the City contained
herein or in the Agreement shall cease to be true.
(b) Upon the happening and continuance of any
Event of Default, unless the principal of the City Note
shall have become due and payable otherwise than by accelera-
tion, the Trustee may, and upon written request of the
Lender shall, by written notice given to the city and the
Company by the Trustee and provided that the default has not
theretofore been cured, declare the principal of and interest
on the City Note then to be due and payable immediately, and
upon such declaration such principal, together with interest
accrued thereon, shall become due and payable immediately at
the place of payment provided in the notice, anything in
this Resolution or in the City Note to the contrary notwith-
standing.
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Section 9.02. Trustee's Rights on Default.
The Trustee, as pledgee and assignee for security
purposes of all the right, title and interest of the City in
and to the Agreement (except those rights of the City to
receive payments, if any, under the Agreement), and as benefi-
ciary under the Deed of Trust, shall, upon compliance with
applicable requirements of law and except as otherwise set
forth in this Article 9, be the sole real party in interest
in respect of, and shall have standing, to enforce each and
every right granted to the City under the Agreement and
granted to the Trustee under the Deed of Trust. The City
and the Trustee hereby agree, without in any way limiting
the effect and scope thereof, that the pledge and assignment
hereunder to the Trustee of any and all rights of the City
in and to the Agreement shall constitute an agency appointment
coupled with an interest on the part of the Trustee which,
for all purposes of this Resolution, shall be irrevocable
and shall survive and continue in full force and effect
notwithstanding the bankruptcy or insolvency of the City or
its default hereunder or on the City Note. In exercising
such rights and the rights given the Trustee under this
Article 9, the Trustee shall take such actions as, in the
judgment of the Trustee applying the standards described in
Section 10.19 hereof, would best serve the interests of the
Lender.
Section 9.03. Actions Upon Default.
Upon the happening and continuance of any Event of
Default, the Trustee in its discretion may, and upon the
written request of the Lender and receipt of indemnity to
its satisfaction shall, take anyone or more of the fol-
lowing steps:
(a) by mandamus, or other suit, action or pro-
ceeding at law or in equity enforce all rights of the
Lender, and require the City or the Company or both of
them to carry out any agreements with or for the benefit
of the Lender and to perform its or their duties under
the Ordinance, the Agreement, the City Note, the Deed
of Trust and this Resolution;
(b) by action or suit in equity require the City
to account as if it were the trustee of an express
trust for the benefit of Lender;
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(c) to exercise its rights under the Deed of
Trust; or
(d) by action or suit in equity enjoin any acts
or things which may be lawful or in violation of the
rights of the Lender.
Section 9.04. No Waiver.
In case any proceeding taken by the Trustee on
account of the Lender by reason of any Event of Default
shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Trustee, then
and in every case the Ci ty, the Trustee and the Lender shall
be restored to their former positions and rights hereunder,
respectively, and all rights, remedies and powers of the
Trustee shall continue as though no such proceeding had been
taken.
Section 9.05. Suits at Law or in Equity.
The Lender shall not have any right to institute
any suit, action or proceeding in equity or at law for the
enforcement of any trust hereunder, or the pursuit of any
remedy hereunder or on the City Note, unless:
(a) such Lender previously shall have given to
the Trustee written notice of an Event of Default as
hereinabove provided;
(b) the Lender shall have made written request of
the Trustee to enforce such trust or trusts or pursue
such remedy or remedies after the right to exercise
such powers or rights of action, as the case may be,
shall have accrued, and shall have afforded the Trustee
a reasonable opportunity, not to exceed 30 days, either
to proceed to exercise the powers hereinabove granted,
or to institute such action, suit or proceeding in its
name;
(c) there shall have been offered to the Trustee
security and indemnity satisfactory to it against the
costs, expenses and liabilities to be incurred therein
or thereby; and
(d) the Trustee shall not have complied with such
request within a reasonable time, not to exceed 30 days.
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Such notification, request and offer of indemnity
are hereby declared in every such case, at the option of the
Trustee, to be conditions precedent to the enforcement of
the trusts of this Resolution or the pursuit of any other
remedy hereunder by the Lender, it being understood and
intended that the Lender shall not have any right in any
manner whatever by its action to affect, disturb or pre-
judice the security of this Resolution, or to enforce any
right hereunder or under the City Note, except in the manner
herein provided.
Section 9.06. Trustee to Brinq Suits.
All rights and action under this Resolution or
under the City Note secured hereby which are enforceable by
the Trustee may be enforced by it without the possession of
the City Note, or the production thereof at the trial or
other proceedings relative thereto, and any such suit,
action or proceeding instituted by the Trustee shall be
brought in its name, as Trustee, for the benefit of the
Lender, subject to the provisions of this Resolution. Any
action, suit or proceeding brought by the Trustee or by the
Lender pursuant to any of the terms of this Resolution or of
the City Note or otherwise, and any claim made by any such
person hereunder or under the City Note, may be compromised,
withdrawn or otherwise dealt with by such person without any
notice or approval of the other.
Section 9.07. Remedies Nonexclusive.
No remedy herein conferred upon or reserved to the
Trustee or to the Lender, its successors/assigns is intended
to be exclusive of any other remedy or remedies, and each
and every such remedy shall be cumulative, and shall be in
addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute.
Section 9.08. No Waiver.
No delay or omission of the Trustee or of the
Lender to exercise any right or power accruing upon any
default shall impair any such right or power or shall be
construed to be a waiver of any such default, or an acquies-
cence therein; and every power and remedy given by this
Article to the Trustee and to the Lender, may be exercised
from time to time and as often as may be deemed expedient.
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Section 9.09. Use Of Moneys Received by
Trustee.
(a) All moneys received by the Trustee or by any
receiver pursuant to any right given or action taken under
the provisions of this Article 9, after payment of the costs
and expenses of the proceedings resulting in the collection
of such moneys and of the expenses, liabilities and advances
in~urred or made by the Trustee, shall be deposited in the
City Note Fund and all moneys so deposited in the City Note
Fund during the continuance of an Event of Default shall
(after payment of the fees and expenses of the Trustee) be
applied as follows:
(1) unless the principal of the city Note shall
have become or shall have been declared due and payable,
in whole or in part, all such moneys shall be applied
to the payment of all installments of interest accrued
on the city Note;
(2) if the principal of the City Note shall have
become or shall have been declared due and payable, in
whole or in part, all such moneys shall be applied to
the payment of the principal and interest then due and
unpaid upon the City Note, with interest on overdue
principal and interest, to the extent lawful, at the
rate per annum which is one percentage point greater
than that borne by the city Note; or
(3) if the principal of the City Note shall have
been declared due and payable, and if such declaration
shall thereafter have been rescinded and annulled under
the provisions of this Article 9, then, subject to the
provisions of subparagraph (2) of this Section 9.09(a)
which shall be applicable in the event that the principal
of the city Note shall later become due or be declared
due and payable, in whole or in part, the moneys shall
be applied in accordance with the provisions of subpara-
graph (i) of this Section 9.09(a).
. ~b) Whenever moneys are to be applied pursuant to
the prov1s1ons of this Section 9.09, such moneys shall be
applied at such time, and from time to time, as the Trustee
shall determine, having due regard to the amount of such
moneys available for application and the likelihood of
additional moneys becoming available for such application in
the future. Whenever the Trustee shall apply such funds, it
shall fix the date upon which such application is to be made
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and upon such date interest on such amounts to be paid on
such date shall cease to accrue; and on or before such date
set aside from the City Note Fund the moneys necessary to
effect such application. The Trustee shall give such Notice
by mailing to the Lender as it may deem appropriate of the
deposit with it of any such moneys and of the fixing of any
such date.
section 9.10. No Impairment of Lender's
Rights.
Notwitstanding any other provision in this Resolu-
tion to the contrary, the right of the Lender to receive
payment of the principal of and interest on the City Note,
on the respective due dates expressed therein, or to institute
suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected
without the prior written consent of the Lender.
Section 9.11. Remedies Lawful; Severability.
It is the purpose and intention of this Article 9
to provide all rights and remedies to the Trustee and the
Lender which may be lawfully granted under the provisions of
the Constitution and laws of the State, and under the provi-
sions of Ordinance No. 3815, but should any such right or
remedy herein granted be held to be unlawful, the Trustee
and the Lender shall be entitled, as above set forth, to
every other right and remedy provided in this Resolution and
by the Constitution and laws of the state and by the provi-
sions of the Ordinance.
Section 9.12. Notice of Event of Default
to Lender.
Upon the occurrence of an Event of Default described
in subsections (a)(l) or (2) of Section 9.01 or upon the
occurrence of an Event of Default known to the Trustee, the
Trustee shall within thirty (30) days give written notice
thereof by mail to the Lender, unless such Event of Default
shall have been cured before giving of such notice.
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ARTICLE 10
CONCERNING THE TRUSTEE
Section 10.01. Acceptance of Trust.
The Trustee hereby accepts the trust imposed upon
it by this Resolution, and agrees to perform the same.
Section 10.02. No Responsibility for Correct-
ness for Statements in Resolu-
tion or City Note.
The recitals, statements and representations in
this Resolution, or in the city Note are made by and on the
part of the City and Trustee shall not have any responsibility
or obligation for the correctness thereof.
Section 10.03. Compensation and Reimbursement.
The City shall payor cause the Company to pay to
the Trustee reasonable compensation for all services rendered
by it hereunder and also all its reasonable expenses, charges
ana other disbursements and those of attorneys, agents and
employees in connection with the performance of the Trustee's
powers and duties hereunder except those expenses, charges
or disbursements incurred or paid as a result of the Trustee's
wilful misconduct 'or negligence. In default of such payment,
the Trustee may deduct the same from any moneys coming into
its hands and shall be entitled to a preference in payment
over the City Note. The Trustee may exercise any powers
hereunder and perform any duties required of it through
attorneys, agents (including without limitation the Agent),
officers or employees, and shall be entitled to advice of
counsel concerning all questions hereunder.
Section 10.04. No Duty to Notice Default
Under Resolution.
(a) The Trustee shall not be required to take
notice, or be deemed to have notice, of any Event of Default
under this Resolution unless specifically notified in writing
of such Event of Default by the Lender. The Trustee may,
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however, at any time, and from time to time in its dis-
cretion, require of the Company full information and advice
as to the performance of any of the covenants, conditions
and agreements contained in the Agreement, the Deed of
Trust, or in this Resolution.
(b) In the event of any default by the Company in
the timely payment of the payments required under Section 4.02
of the Agreement, the Trustee shall immediately give tele-
phonic or telegraphic notice thereof to the Company, but the
Trustee shall incur no liability for failure to give such
notice and such failure ahall have no effect on the rights
of the Trustee, or the Lender, as set forth in this Resolution.
Section 10.05. No Duty to Take Enforcement
Action Unless So Requested
By Lender.
The Trustee shall be under no obligation to take
any action in respect of any Event of Default or otherwise,
or toward the execution or enforcement of any of the trusts
hereby created, or to institute, appear in or defend any
suit or other proceedings in connection therewith, unless
authorized so to do by the Lender, and if, in its opinion,
such action may tend to involve it in expense or liability,
unless furnished, from time to time as often as it may
require, with security and indemnity satisfactory to it: but
the foregoing provisions are intended only for the protection
of the Trustee, and shall not affect any discretion or power
given by any provision of this Resolution to the Trustee to
take action in respect of any Event of Default without such
notice or request from the Lender, or without such security
or indemnity.
Section 10.06. Right to Make Advances For
Performance of Duties Not
Met by City: Riqht to Lien
Therefor.
If the city shall fail to perform any of the cove-
nants or agreements contained in this Resolution other than
the covenants or agreements in respect of the payment of the
principal of and interest on the City Note, the Trustee may,
in its uncontrolled discretion and without notice to the
Lender, at any time and from time to time, make advances to
effect performance of the same on behalf of the City, but
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the Trustee shall be under no obligation so to do; and any
and all moneys paid or advanced by the Trustee for any such
purpose, together with interest thereon at the rate of ten
percent (10%) per annum, shall be a claim in favor of the
Trustee upon the Revenues prior to the claim of the City
Note; but no such advance shall operate to relieve the City
from any default hereunder.
Section 10.07. Right to Rely on Documents
Believed Genuine, Etc.
The Trustee shall be protected and shall incur no
liability in acting or proceeding in good faith upon any
resolution, notice, telegram, request, consent, waiver,
certificate, statement, affidavit, voucher, bond, requisi-
tion or other paper or document which it shall in good faith
believe to be genuine and to have been passed or signed by
the proper board, body or person or to have been prepared
and furnished pursuant to any of the provisions of this
Resolution or the Agreement or the Deed of Trust, and the
Trustee shall be under no duty to make any investigation or
inquiry as to the truth of any statements contained or
matters referred to in any such instrument, but may accept
and rely upon the same as conclusive evidence of the truth
and accuracy of such statements.
Section 10.08. Right to Allow and Credit
Interest Upon Moneys Received
Under Resolution.
The Trustee may allow and credit interest upon any
moneys which it may at any time receive under any of the
provisions of this Resolution, at such rate, if any, as it
customarily allows upon similar sums and under similar con-
di tions. All interest allowed on any such moneys shall be
credited as provided in Article 7 and 8 hereof with respect
to interest on investments.
Section 10.09. Construction of Ambiguous or
Inconsistent Provisions of
Resolution Binding on Lender.
The Trustee may construe any of the provisions of
this Resolution insofar as the same may appear to be ambiguous
or inconsistent with any other provision hereof, and any
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construction of any such provisions hereof by the Trustee in
good faith shall be binding upon the city, the Company, and
the Lender.
Section 10.10. Right to Resign and be Dis-
charged of Trusts.
The Trustee may resign and be discharged of the
trusts created by this Resolution by executing an instrument
in writing resigning from such trust and specifying the date
when such resignation shall take effect, and filing the same
with the City Clerk of the city and a copy thereof with the
Company not less than sixty (60) days before the date speci-
fied in such instrument when such resignation shall take
effect, and by giving notice of such resignation by publica-
tion at least once a week for two consecutive weeks in a
financial newspaper or journal published at least weekly in
the English language and of general circulation in the City
of San Bernardino, California, the first publication of said
notice to appear not less than three weeks prior to the date
specified in the notice when such resignation shall take
effect. Such resignation shall take effect on the day
specified in such instrument and notice, unless prior to
that time a successor Trustee shall be appointed as herein-
after provided, in which event such resignation shall take
effect immediately upon the appointment of such successor
Trustee.
Section 10.11. Removal of Trustee.
The Trustee may be removed at any time by an
instrument in writing, appointing a successor Trustee, filed
with the Trustee so removed and executed by the Lender; pro-
vided that such removal will not take effect prior to the
receipt of notice thereof, in writing, by the Company.
Appointment of a successor Trustee shall release Trustee
from any liability hereunder from and after appointment of a
successor Trustee.
Section 10.12. Appointm~nt of Successor
Trustee by Lender or City.
(a) In case at any time the Trustee shall resign,
or shall be removed, or be dissolved, or if its property or
affairs shall be taken under the control of any state or
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federal court or administrative body because of insolvency
or bankruptcy or for any other reason, a vacancy shall
forthwith and ipso facto exist in the office of Trustee, a
successor may be appointed by the Lender, by an instrument
or instruments in writing filed with the City Clerk of the
city. Copies of each instrument shall be promptly delivered
by the City to the predecessor Trustee, to the successor
Trustee as appointed and to the Company.
(b) Until a successor Trustee shall be appointed
by the Lender as herein authorized, the Mayor of the City by
a written order filed among the records of the City, may
appoint a successor Trustee to fill such vacancy. Such
appointment shall be effective upon the receipt of notice in
wri ting thereof by the Company. After any appointment by
such Mayor, the City shall cause notice of such appointment
to be published once in each of two consecutive weeks in a
newspaper carrying financial news published at least weekly
in the English language and of general circulation in the
City of San Bernardino, California. Any successor Trustee
so appointed by the city shall immediately and without
further act be superseded by the successor Trustee appointed
by the Lender in the manner above provided.
Section 10.13. Qualifications of Successor
Trustee.
Every successor in the trust hereunder appointed
in pursuance of the foregoing provisions shall be a trust
company, a bank with trust powers or a national bank with
trust powers, or other company having trust powers, accept-
able to the City, if such trust company, bank with trust
powers, national bank or other company willing and able to
accept the trust on customary terms can, with reasonable
effort, be located.
Section 10.14. Court Appointment of Successor
Trustee.
In case at any time the Trustee shall resign and
no appointment of a successor Trustee shall be made pursuant
to the foregoing provisions of this Article 10 prior to the
date specified in the notice of resignation as the date when
such resignation shall take effect, the resigning Trustee
may forthwith apply to a court of competent juriSdiction for
the appointment of a successor Trustee. If no appointment
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of a successor Trustee shall be made pursuant to the foregoing
provisions of this Article 10 within six months after a
vacancy shall have occurred in the office of the Trustee,
the Lender may apply to any court of competent jurisdiction
to appoint a successor Trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe,
appoint a successor Trustee.
section 10.15. Acceptance of Appointment by,
and Transfer of Trust Estate
to, Successor Trustee.
Any successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the City an instrument
accepting such appointment, and thereupon such successor
Trustee shall, without any further act, deed of conveyance,
become duly vested with all the estates, property, rights,
powers, trusts, duties and obligations of its predecessor
Trustee with like effect as if originally narned Trustee.
Upon request of such successor Trustee, the Trustee ceasing
to act and the City shall execute and deliver an instrument
transferring to such successor Trustee all the estates,
property, rights, powers and trusts hereunder of the Trustee
so ceasing to act, and the Trustee so ceasing to act shall
pay over to the successor Trustee all moneys and other
assets at the time held by it hereunder.
Section 10.16. Successor Trustee by Merger
or Consolidation.
Any corporation into which any Trustee may be
merged or with which it may be consolidated, or any corpor-
ation resulting from any merger or consolidation to which
any Trustee shall be a party, or any corporation to which
any Trustee may transfer substantially all of its assets,
shall be the successor Trustee under this Resolution, with-
out the execution or filing of any paper or any further act
on the part of the parties hereto, anything herein to the
contrary notwithstanding.
Section 10.17. Exercise of Rights and Powers
During Event of Default.
Notwithstanding any other provisions of this
Article 10, the Trustee shall, during the existence of an
Event of Default known to the Trustee, exercise such of the
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rights and powers vested in it by this Resolution and use
the same degree of skill and care in their exercise as a
prudent man would use and exercise under the circumstances
in the conduct of his own affairs.
Section 10.18. Trustee May Intervene in
Judicial Proceedings In-
volving Company.
In any jUdicial proceeding to which the Company is
a party and which in the opinion of the Trustee and its
counsel has a substantial bearing on the interests of the
Lender, the Trustee may intervene on behalf of the Lender
and shall, upon receipt of indemnity satisfactory to it, do
so, if requested in writing by the Lender, and if permitted
by the Court having jurisdiction in the premises.
Section 10.19. Powers of Agent.
Agent is hereby authorized to administer the Loan
on behalf of the city pursuant to Article 9 of the Agreement,
which provisions are incorporated by reference herein. The
Trustee shall cooperate with Agent in such administration.
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ARTICLE 11
MODIFICATION OF THIS RESOLUTION
OF ISSUANCE AND THE AGREEMENT
Section 11.01. Resolution to be Amended Only
in Manner Provided in Article 11.
This Resolution shall not be modified or amended
in any respect except as provided for, in accordance with
and subject to the provisions of this Article 11.
Section 11.02. Permissible Purposes For, and
Limitation Upon. Supplemental
Resolutions.
(a) The City. may. from time to time and at any
time. with the prior written consent of the Lender. execute
and deliver. and the Trustee may accept. resolutions supple-
mental to this Resolution for the following purposes:
(1) to specify and determine any matters and
things relative to the city Note which are not contrary
to or inconsistent with this Resolution and which shall
not adversely affect the interests of the Lender;
(2) to cure any defect. omission or ambiguity in
this Resolution if such action does not adversely
affect the rights of the Lender;
(3) to grant to or confer upon the Trustee for
the benefit of the Lender additional rights. remedies,
powers, authority or security which may lawfully be
granted or conferred and which are not contrary to or
inconsistent with this Resolution as theretofore in
effect;
(4) to add to the covenants and agreements of the
City in this Resolution, other covenants and agreements
to be observed by the City which are not contrary to or
inconsistent with this Resolution as theretofore in
effect;
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(5) to add to the limitations and restrictions in
this Resolution, other limitations and restrictions to
be observed by the City which are not contrary to or
inconsistent with this Resolution or theretofore in
effect;
(6) to confirm, as further assurance, any pledge
under, and the subjection to any claim, lien or pledge
created or to be created by this Resolution, of the
Revenues or of any other moneys, securities or funds.
(b) Before the City shall adopt any supplemental
resolution pursuant to this section 11.02, there shall have
been filed with the Trustee an opinion of Bond Counsel
stating that such supplemental resolution is authorized or
permitted by this Resolution and complies with its terms,
and that upon enactment it will be valid and binding upon
the city in accordance with its terms.
(c) No supplemental resolution shall be effective
until accepted by the Trustee.
section 11.03. Supplemental Resolutions Deemed
Part of Resolution; Trustee En-
titled to Relv Upon Opinion of
Counsel.
(a) Upon the execution and delivery by the City
and the acceptance by the Trustee of any supplemental reso-
lution pursuant to the provisions of this Article 11, this
Resolution shall be, and be deemed to be, modified and
amended in accordance therewith, and the respective rights,
duties and obligations of the City, the Trustee and the
Lender under this Resolution shall thereafter be determined,
exercised and enforced under this Resolution subject in all
respects to such modifications and amendments.
(b) For all purposes of this Article II, the
Trustee shall be entitled to rely upon an Opinion of Counsel
with respect to the extent, if any, as to which any action
affects the rights of the Lender under this Resolution.
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section 11.04. Supplemental Resolutions Affect-
ing Rights of Company Require
Consent of Company.
Anything contained in this Resolution to the con-
trary notwithstanding, any supplemental resolution under this
Article 11 which affects any rights, powers and authority of
the Company under the Agreement or Deed of Trust, or requires
. revision of the Agreement or Deed of Trust, shall not
become effective unless and until the Company shall have
consented in writing to such supplemental resolution.
Section 11.05. Amendments of Agreement not
Adversely Affecting Interests
of the Lender.
The City and the Trustee may, without the prior
written consent of or notice to the Lender, consent to any
amendment, change, modification of the Agreement or Deed of
Trust, as may be required:
(a> for the purpose of curing any ambiguity or
formal defect or omission; or
(b> in connection with any other change therein
which, in the judgment of the Trustee, does not ad-
versely affect the interests of the Lender.
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ARTICLE 12
MISCELLANEOUS
Section 12.01. Resolution to Bind and Inure
to Benefit of Successors of
the City.
In the event of the dissolution, disincorporation,
or merger of the city, all the covenants, stipulations,
promises and agreements in this Resolution contained, by or
on behalf of, or for the benefit of, the city, shall bind or
inure to the benefit of the successors of the City from time
to time and any entity, officer, board, commission, agency
or instrumentality to whom or to which any power or duty of
the city shall be transferred.
Section 12.02. provisions of Resolutions for
Sole Benefit of Parties and
Lender.
Except as herein otherwise specifically provided,
nothing in this Resolution expressed or implied is intended
or shall be construed to confer upon any person, firm or
corporation other than the City, the Trustee, and the Lender,
any right, remedy or claim under or by reason of this Reso-
lution, this Resolution being intended to be for the sole
and exclusive benefit of the City, the Trustee, and the
Lender.
Section 12.03. Compliance Certificates and
Opinions.
Upon any application or request by the city to the
Trustee to take any action under any provision of this
Resolution, the City shall furnish to the Trustee an Offi-
cers' Certificate stating that all conditions precedent, if
any, provided for in this Resolution relating to the proposed
action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such con-
ditions precedent, if any, have been complied with, except
that in the case of any such application or request as to
which the furnishing of such documents is specifically
required by any provision of this Resolution relating to
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60,009-9-3
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such particular application or request, no additional certi-
ficate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this
Resolution, shall include:
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condi-
tion and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation
as is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant has
been complied with.
Section 12.04. Form of Documents Delivered
to Trustee.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such person, or
that they be so certified or covered by only one document,
but one such person may certify or give an opinion with
respect to some matters and one or more other persons as to
other matters, and any person may certify or give an opinion
as to such matters on one or several documents.
Any certificate or opinion of an officer of the
City may be based, insofar as it relates to legal matters,
upon a certificate or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which
his certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as
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CTri-City)
60,009-9-3
it relates to factual matters, upon a certificate or opinion
of, representations by, an officer or officers of the City
stating that the information with respect to such factual
matters is in the possession of the City, unless such counsel
knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with
respect to such matters is erroneous.
Where any person is required to make, give, or
execute two or more applications, requests, consents, cer-
tificates, statements, opinions or other instruments under
this Resolution, they may, but need not, be consolidated and
form one instrument.
Whenever in this Resolution in connection with any
application or certificate or report to the Trustee, it is
provided that the Company shall deliver any document as a
condition of the granting of such application, or as evidence
of the City's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of
such application or at the effective date of such certificate
or report (as the case may be), of the facts and opinions
stated in such document shall in each such case be conditions
precedent to the right of the City to have such application
granted or to the sufficiency of such certificate or report.
Section 12.05. Notices, Etc., to Trustee
and City.
Any request, demand, authorization, direction,
notice, consent, waiver or other document provided or per-
mitted by this Resolution to be made upon, given or fur-
nished to, or filed with:
Ca) the Trustee: by the Lender or by the City
shall be sufficient for every purpose hereunder if in
writing and sent by registered mail, return receipt
requested, to the Trustee at its principal corporation
trust office in the place of payment; or
(b) the City: by the Trustee or by the Lender
shall be sufficient for every purpose hereunder if in
writing and sent by registered mail, return receipt
requested, to the City addressed to it at the address
furnished in writing to the Trustee by the City.
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60,009-9-3
All documents received by the Trustee under the
provisions of this Resolution shall be retained in its
possession, subject at all reasonable times to the inspec-
tion of the City, the Lender, and the agents and represen-
tatives thereof.
Section 12.06. Notices to Lender; Waiver.
Where this Resolution provides for notice to the
Lender in any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing
and mailed, first class postage prepaid, to the Lender at
its address as known to the Trustee. Where this Resolution
provides for notice in any manner, such notice may be waived
in writing by the person entitled to receive such notice,
either before or after the event, and such waiver shall be
the equivalent of such notice. Waiver of notice by Lender
shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken
in reliance upon such waiver.
Section 12.07. Effect of Headings and Table
of Contents.
The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 12.08. Severability.
In case anyone or more of the provisions of this
Resolution or of the Agreement or Deed of Trust, or of the City
Note shall, for any reason, be held to be illegal or invalid,
such illegality or invalidity shall not affect any other
provisions of this Resolution or of the Agreement or Deed of
Trust, or of said city Note, and this Resolution and the
Agreement or Deed of Trust, and the City Note shall be
construed and be effected and the obligations contemplated
hereby be enforced as if such illegal or invalid provisions
had not been contained therein.
Section 12.09. Officials, Officers, Agents
and Employees of Citf Exempt
from Individual Liabllity.
No covenant or agreement contained in the City
Note or in this Resolution shall be deemed to be the covenant
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or agreement of any official, officer, agent, or employee of
the City in his individual capacity, and neither the Mayor
of-the City, any officer of the city nor any official exe-
cuting this Resolution or the City Note shall be liable
personally under this Resolution or on the city Note or be
subject to any personal liability or accountability by
reason of the execution of this Resolution or the iosuance
~f the City Note.
Section 12.10. Construction of Resolution of
Issuance and City Note Governed
by City Charter and California
Constitution and Laws.
The City Charter of the city and the laws and Con-
stitution of the State shall govern the construction of this
Resolution and of the City Note issued hereunder.
Executed as of the
ATTEST:
~d//d4/~M-
C:rty Clerk
,e> day of ~~~ , 1981.
THE CITY OF SAN BERN
SAN BERNARDINO, CAL
[SEAL]
.
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(Tri-City)
60,009-9-3
LLOYDS BANK CALIFORNIA,
a California Corporation,
as Trustee
By
Title
[SEAL)
By
Title
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(Tri-City)
60,009-9-3
I HEREBY CERTIFY that the foregoing resolution
was duly adopted by the Mayor and Common Council of the
City of San Bernardino at . regular aeeting thereof, held
on the 5th day of Octo1:)er , 1981, by the following
vote, to wit:
Castaneda, Reilly, Hernandez,
Botts, Hudson and Strickler
AYES:
Councilmen
WOES:
ABSENT :
ABSTAIN:
None
Hobbs
None
~4Y/??L?/~4b
Cit;y Clerk
The foregoing resolution is hereby approved
Y1? day of ~~/f , 1981.
APPROVED AS TO FORM:
ie~A~ ~A"#J-5J
C1ty At ney
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STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) .s.
CITY OF SAN BERNARDINO )
I, SHAUNA CLARK, City Clerk in and for the City
of San Bernardino, DO HEREBY CERTIFY that the foregoing
and attached copy of San Bernardino City Resolution
Mo. 81-479 is a full, true and correct copy of that DOW
on file in this office.
IN WITNESS WHEREOF,
and affixed the official aeal
this JfI> day of~
J have hereunto aet .y band
of the City of San Bernardino
, 1981.
~/P7?d/~Ab
ctty Clerk
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(Tri-City)
60,009-9-3
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) 8S.
COUNTY OF SAN BERNARDINO)
On this 90-. day of 0c ~ , 1981, before
me, a Notary Public duly commissioned, qualified and acting
within and for the County and State aforesaid, appeared in
person the within-named W. R. Holcomb and Shauna Clark,
respectively, of the City of San Bernardino, California,
to me personally known, who stated that they were duly
authorized in their respective capacities to execute the
foregoing insturment for an din the name and behalf of the
City, and further stated and acknowledged that they had so
signed, executed and delivered the foregoing instrument for
consideration, uses and purposes therein mentioned and set
forth,
IN TESTIMONY WHEREOF, I have hereunto set my hands
and official seal this tJ r:7:- day of ~ , 1981.
..... ... ~
~ - - - . - - . -
e N;~~~~~:r~~~F~;N~A
"";" SAN BERNARDINO COUNTY
~ Commlsslon (><Pi,.. Dee. 7, 1"1
~,~c.;3~Q;c
otary Public
My commission expires:
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60,009-9-3
ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF ORANGE
)
) as.
)
On this day of , 1981, before
me, a Notary Public duly commissioned, qualified and acting
within and for the State and County aforesaid, appeared
in person the within-named and
____ , respectively of Lloyds Bank California,
to me personally known, who stated that they were duly
authorized in their respective capacities to execute the
foregoing instrument for and in the name and behalf of the
Bank, and further stated and acknowledged that they had so
signed, executed and delivered the foregoing instrument for
the consideration, uses and purposes therein mentioned and
set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand
and official seal this day of , 1981.
Notary Public
[SEAL)
My Commission expires:
57
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60,009-9-3
~
EXHIBIT A
.CITY NOTE"
City of San Bernardino
Industrial Development Revenue Note,
Tri-City Industrial Park, Ltd.
Project, 1981 Series
(Construction Loan)
to Lloyds Bank California,
a California corporation, Purchaser
, 1981
The City of San Bernardino (hereinafter sometimes
called the "Ci ty") a public body, corporate and politic,
organized and existing under, and by virtue of, its Charter
and the laws of the State of California, for value received,
hereby promises to pay, from the sources of funds herein-
after described, to L10yds Bank California, a California
Corporation, or order, the principal sum of One Million
Seven Hundred Fifty Thousand Dollars ($1,750,000.00), or
such lesser amount as may be advanced hereunder on
____, 1982, upon the presentation and surrender hereof at
the office of Lloyds Bank California, a California Corpora-
tion, 1666 North Main Street, Suite 500, Santa Ana, California
92701, or its successors as trustee (herein called the
"Trustee") under a Resolution of Issuance entitled: "A
Resolution of the Mayor and Common Council of the City of
San Bernardino, California, Constituting its Trust Agreement
and Indenture; Creating a Trust Estate and Making Certain
Provisions Therefor; Authorizing the Issuance of its
Industrial Development Revenue Note, Tri-city Industrial
Park, Ltd. Project, 1981 Series (Construction Loan), for the
Purpose of providing Funds for the Construction of Multi-
Tenant Industrial Buildings; and Making certain Findings and
Determinations in Connection Therewith," dated as of October 1,
1981 (herein called the "Resolution"), adopted by the Mayor
and Common Council of the City on , 1981, and
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hereby promises to pay on the first day of each calendar
month on the amounts outstanding for the preceding months
commencing , 1981, interest thereon at the
rate ("Basic Rate") per annum calculated as one-half (l/2)
of the Prime Interest Rate plus three percent (3%). Said
Basic Rate is to be adjusted on the day the Prime Interest
Rate changes and is to be computed on the basis of a 360-day
year, but accrued on the actual number of days elapsed; and
the .prime Interest Rate" is that rate of interest being
charged by Lloyds Bank California on ninety (gO) day unsecured
loans to said Bank's most substantial and most responsible
borrowers as of the date of delivery of the City Note and
the Company Note, and, thereafter, as of each day that
Lloyds Bank California may adjust such Prime Interest Rate.
In the event that Lloyds Bank California shall fail to
establish or publish a Prime Interest Rate, then, for purposes
hereof, the Prime Interest Rate shall be deemed to be the
average prime interest rate for each calendar month of the
three (3) largest (total assets) banking institutions in the
continental United states then publishing a prime interest
rate.
Notwithstanding the foregoing, if the interest on
this Note becomes subject to federal income taxation pursu-
ant to an "Official Determination," as that term is defined
below, the then Basic Rate shall be immediately increased to
three percent (3%) above the Prime Interest Rate, computed
as above provided, and the City forthwith shall pay to the
Trustee the aggregate difference between (l) the monthly
payments actually made on this Note from the "Taxable Date,"
as that term is defined below, to the effective date of the
rate increase, and (2) the monthly payments which would have
been made during such period had the interest on this Note
been at the rate of three percent (3%) above the Prime
Interest Rate as so defined. The Trustee or the holder of
this Note may protest or contest any IIOfficial Determination.1I
If an "Offical Determination" is protested or contested,
interest and principal shall continue to be payable as if
calculated at an interest rate of three percent (3X) above
the Prime Interest Rate while such protest or contest is
pending. But if such protest or contest is successful the
Trustee shall apply all interest in excess of the Basic Rate
in reduction of the principal hereof, or, if the holder
hereof has been paid principal in full, the excess shall be
refunded and the monthly payments shall be adjusted as if
they had been based on the Basic Rate. Without in any way
limiting the survival of other provisions of this Note, the
City hereby expressly agrees that the obligations imposed
upon it by this paragraph shall survive payment and discharge
of this Note.
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60,009-9-3
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The term "Official Determination" shall mean (and
for all purposes of this Note shall be deemed to have occurred
as of) a change in the Internal Revenue Code of 1954, as
amended, the issuance of a statutory notice of deficiency or
ruling by the Internal Revenue Service or a ruling by any
court of competent jurisdiction or any other occurrence the
effect of which is to make the interest payable on this Note
includable in the gross income of a holder hereof (except to
the extent that such interest is so includable because the
holder is a "substantial user" of the Project or a "related
person" as such terms are defined in Section 103 of the
Internal Revenue Code of 1954, as amended).
The term "Taxable Date" shall mean the date as of
which interest payable on this Note is includable in the
gross income of a holder of this Note by reason of Official
Determination.
All principal, interest, and other amounts payable
under the terms of this Note are payable in lawful money of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
This Note is a special obligation of the City
whose issuance is duly authorized by the City in the prin-
cipal amount of $1,750,000.00 under and pursuant to the
Charter of the City of San Bernardino and the City'S Ordinance
No. 3815, entitled "Ordinance of the City of San Bernardino
Relating to the Financing of Projects for the Encouraging of
Increased Employment Within the City and Certain Amendments
Thereto," as now or hereafter amended (herein called the
"Ordinance"), and under and pursuant to the Resolution.
A copy of the Resolution is on file at the office
of the City Clerk of the City and at the aforesaid office of
the Trustee, and reference to the Resolution and any and all
supplements thereto and modifications and amendments thereof
and to the Ordinance is made for a description of the
pledges and covenants securing this Note; the nature, extent
and manner of enforcement of such pledges; the rights and
remedies of the holder of this Note with respect thereto and
the terms and conditions upon which the Note is issued and
.ay be issued thereunder. To the extent and in the manner
permi tted by the terms of the Resolution, the provisions of
the Resolution or any document amendatory thereof or supple-
mental thereto, may be modified or amended by the City with
the written consent of the holder of this Note.
60
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60,009-9-3
.
--"'"
This Note is issued by the city pursuant to the
Resolution to fund a construction loan by the Trustee on
behalf of the City to Tri-City Industrial Park, Ltd., a
California Limited Partnership (the "Company"), for the
purpose of financing the cost of constructing and equipping
aulti-tenant industrial buildings and improvements thereon
(collectively, the "Project"), under the provisions of a
certain Project Agreement dated as of October 1, 1981, by
and among the City, the Company and the Agent (the "Project
Agreement") and for the purpose of paying necessary expenses
incidental to the Project and to this Note. By the Resolu-
tion, the City has pledged and assigned to the Trustee, as
security for this Note, collateral described in the Resolu-
tion and the Project Agreement.
By the Project Agreement the Company (l) has
agreed to construct and equip the Project; (2) has agreed to
repay the construction loan for the Project made by the City
and evidenced by a Promissory Note secured by Deed of Trust
(herein called the "Company Note"); and (3) has executed and
delivered to the City a Deed of Trust and Assignment of
Rents on the Project securing repayment of the Company Note
and this Note.
Any interest on this Note not paid when due shall
thereafter bear interest at a rate equal to five percent
(5%) per annum in excess of the Prime Interest Rate, unless
interest becomes taxable to payee, in which case it shall be
calculated at five percent (5%) per annum in excess of
payee's Prime Interest Rate. In addition to such interest,
the undersigned promises to pay upon demand all reasonable
late or collection charges incurred by the holder hereof in
connection with such late payment.
If principal of or interest on this Note is Dot
paid when due or if default is made under this Note or under
the Company Note secured by the Deeds of Trust, the Resolu-
tion or the Project Agreement, the City and Lloyds Bank
California, a California corporation, of even date herewith,
then or at any time thereafter the bolder of this Note .ay,
without notice, declare immediately due and payable all
unpaid principal, interest and charges owing on this Note,
and also all unpaid principal, interest and charges owing on
the Company Note secured by the Deeds of Trust.
. Upon sale, transfer, hypothecation, assignment or
encumbrance, whether voluntary, involuntary or by operation
of law, of all or any part of the property described in the
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Deeds of Trust securing the Company Note or any interest in
said property, then at its sole option, the holder of this
Note may, by written notice to the undersigned, declare all
unpaid principal, interest and charges owing on this Note
immediately due and payable, except to the extent that such
acceleration is prohibited by law. The undersigned shall
notify the holder hereof promptly in writing of any trans-
action or event which may give rise to such right of accelera-
tion.
All capitalized terms used herein shall have the
meanings attributed to them in the Resolution or the Project
Agreement.
This Note shall not const! tute a debt or liability
of the City, nor a pledge of the fei th and credit of the
City, but shall be payable solely from the Revenues and
other funds, if any, provided therefor in the proceedings
for the issuance of this Note. The issuance of this Note
shall not directly or indirectly or contingently obligate
the City to levy or to pledge any form of taxation whatsoever
therefor or to make any appropriation for its payment.
Neither the faith and credit nor the taxing power of the
City of San Bernardino is pledged to the payment of the
principal of or interest on this Note, nor is the City of
San Bernardino in any manner obligated to make any appro-
priation for payment. Neither the Mayor and Common Council
nor any persons executing this Note shall, in any event, be
subject to any personal liability or accountability by
reason of the issuance of such Note. This Note shall be a
special Obligation of the City, and the City shall, under no
circumstances, be obligated to pay this Note or Project
costs (other than Administrative Expenses), except from
Revenues and other funds received under the Project Agreement
for such purposes, nor to pay Administrative Expenses except
from funds received under the Project Agreement for such
purposes, or from funds which are made available as otherwise
authorized by law.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that
all acts, conditions and things required by the Constitution
and statutes of the State of California, the Charter of the
City, the Ordinance, and the Resolution to exist, to have
happened and to bave been performed precedent to and in the
issuance of this Note, exist, have happened and have been
performed in due time, form and manner as required by law
and that the issuance of this Note, together with all other
indebtedness of the city, is wi thin every debt and other
limit prescribed by law.
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San Bernardino
(Tri-City)
60,009-9-3
#
,.../
. This Note shall not be entitled to any benefits
under the Resolution or become valid or obligatory for any
purpose until it shall have been authenticated by the certi-
ficate of the Trustee endorsed hereon.
IN WITNESS WHEREOF, the City has caused this Note
to be executed in its name by the manual or facsimile signa-
ture of the Mayor and the seal of the City to be affixed
hereon, and attested by the manual or facsimile signature of
its City Clerk all as of the date set forth below.
THE CITY OF SAN BERNARDINO
SAN BERNARDINO, CALIFORNIA
By:
(SEAL)
Mayor
ATTEST:
City Clerk
(Form of Certificate of Authentication)
This Note is one of an issue described in the
Resolution within mentioned.
LLOYDS BANK CALIFORNIA,
a California Corporation,
as Trustee
DATED:
By
Authorized Officer
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