HomeMy WebLinkAbout10-16-1989 Reg. Meeting
SHAUNA CLARK CITY "LERK
(2 I 'IES)' v
AGENDA
REGULAR MEETING
COMMUNITY DEVELOPMENT COMMISSION/REDEVELOPMENT AGENCY
October 16, 1989 - 11:00 a.m.
CALL TO ORDER:
ROLL CALL:
PRESENT:
ABSENT:
PUBLIC COMMENTS ON ITEMS NOT ON AGENDA:
1. Community Development Commission Minutes.
Motion:
That the minutes of the following meetings of the Community
Development Commission of the City of San Bernardino, be
approved as submitted in typewritten form:
a) September 18, 1989
b) September 25, 1989
c) October 2, 1989
d) October 6, 1989
PUBLIC HEARINGS
2. San Bernardino Community Hospital authorizing the issuance and sale of
San Bernardino Community Hospital Revenue Refunding Bonds; TEFRA Public
Hearing. (See Attached)
Mayor to open the hearing
Motion:
(A)
That the hearing be closed; that further reading of the
resolution be waived.
Motion:
(B)
Mayor and Common Council
Adopt a RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, AUTHORIZING THE ISSUANCE AND SALE OF
CITY OF SAN BERNARDINO HOSPITAL REVENUE REFUNDING BONDS
(SAN BERNARDINO COMMUNITY HOSPITAL), SERIES 1989, THE
EXECUTION AND DELIVERY OF AN INDENTURE, LOAN AGREEMENT,
ESCROW AGREEMENT, BOND PURCHASE CONTRACT, OFFICIAL
STATEMENT AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH.
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October 16, 1989
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PUBLIC HEARINGS
3. Court & "E"
Open Joint Public Hearing
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Mayor and Common Council
Community Development Commission
That the Joint Public Hearing be closed; that further reading
of the following resolutions be waived.
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Mayor and Common Council
Adopt a RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF
THE CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY
MEANS OF SALE OF CERTAIN REAL PROPERTY PURSUANT TO A
DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND
ONE SUNSET COURT., LTD.
_~ Community Development Commission
~ion: ) Adopt a RESOWTION OF THE COMMUNITY DEVELOPMENT
~ COMMISSION OF THE CITY OF SAN BERNARDINO APPROVING THE
CONVEYANCE BY MEANS OF SALE OF CERTAIN REAL PROPERTY
PURSUANT TO A DISPOSITION AND DEVELOPMENT AGREEMENT BY
AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND ONE SUNSET COURT, LTD.
~t~) Authorize the execution of a Disposition and Development
~ Agreement with One Sunset Court, Ltd. for the sale of Agency
owned property in the Central City Project Area with such
non-substantive changes as are approved by Agency Counsel.
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October 16, 1989
1851R
Motion:
RES OLUTIONS
That further reading of the following resolutions be waived
and that said resolutions be adopted.
4. Authorizing the Issuance of certain Collateralized Mortgage Bonds. (See
Attached)
Mayor and Common Council
Motion: Adopt a RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
(A) OF SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF
CERTAIN COLLATERALIZED MORTGAGE BONDS, SERIES 1989-B OF
THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO.
Motion:
(B)
Motion:
(C)
aff /f?
Community Development Commission
Adopt a RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO AUTHORIZING THE ISSUANCE OF
CERTAIN COLLATERALIZED MORTGAGE BONDS, SERIES 1989-B, AND
THE TERMS OF CERTAIN FINANCING DOCUMENTS TO BE EXECUTED
AND DELIVERED IN CONNECTION THEREWITH.
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Joint Powers Financing Authority
Adopt a RESOLUTION OF THE SAN BERNARDINO JOINT POWERS
FINANCING AUTHORITY AUTHORIZING THE PURCHASE BY THE
AUTHORITY OF A PRINCIPAL AMOUNT APPROXIMATELY EQUAL TO
$3,080,000 OF COLLATERALIZED MORTGAGE BONDS, SERIES
1989-B, AUTHORIZING AND DIRECTING EXECUTION OF AUTHORITY
PURCHASE AGREEMENT AND THE SALE THEREOF PURSUANT TO AN
UNDERWRITERS PURCHASE AGREEMENT AND AUTHORIZING OFFICIAL
ACTION ON CONNECTION THEREWITH.
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October 16, 1989
1851R
5. Closed Session to discuss whether to initiate litigation.
Motion:
That the Community Development Commission recess to Closed
Session to confer with its attorney regarding pending
litigation pursuant to Government Code Section 54956.9(c), so
that that the Commission may decide whether to initiate
litigation.
6. Adjournment
Motion:
That the meeting be adjourned to Monday, November 6, 1989, in
the Council Chambers of the City Hall, 300 North "D" Street,
San Bernardino, California.
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October 16, 1989
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COMMUNITY DEVELOPMENT COMMISSION/REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
M I NUT E S
REGULAR MEETING
September 18, 1989
11:00 a.m.
The Community Development Commission/Redevelopment Agency meeting was
called to order at 11:00 a.m., on Wednesday, September 18, 1989, in the
Council Chambers of City Hall, 300 North "D" Street, San Bernardino,
California, by Commissioner Tom Minor. Absent: Mayor W. R. Holcomb.
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jack Reilly, Jess Flores, Michael Maudsley, Tom Minor, Valerie
Pope-Ludlam, Norine Miller.
STAFF PRESENT
Steven H. Dukett, Executive Director; John Hoeger, Redevelopment Agency;
Dennis A. Barlow, Senior Assistant City Attorney; Marshall Julian, City
Administrator; Shauna Clark, City Clerk; Margie Vance, Recording Secretary.
Public Comments on Items not on Agenda. There were no public comments.
1. Community Developaent Commission/Redevelopment Agency of the City of
San Bernardino Minutes of September 6, 1989.
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
approve the minutes of the meeting of the Community Development
Commission/Redevelopment Agency of the City of San Bernardino held on
September 6, 1989, as submitted in typewritten form.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
2. Hallmark Building Contract
Commissioner Miller made a motion, seconded by Commissioner Estrada, to
approve Innovative Partners Inc., as the selected firm to develop a
long-term use, management and implementation plan for the Hallmark Building
at a cost of $26,550.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
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September 18, 1989
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3. Rockwell International
Commissioner Miller made a motion, seconded by Commissioner Estrada, to
approve the following motions:
(A) That the Mayor and Common Council set a joint public hearing for
11:00 a.m. on October 2, 1989 to approve and ratify the Disposition
and Development Agreement with Rockwell International Corporation.
and
(B) That the Community Development Commission set a joint public
hearing for 11:00 a.m. on october 2, 1989 to approve the vi
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Disposition and Developmen~ Agreement with Rockwell International
Corporation.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
4. Waterman Offramp
The City Clerk read the title of all of the Resolutions.
Mayor and Common Council
RESOLUTION NO. 89-382
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF
SAN BERNARDINO AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Mayor and Common Council
RESOLUTION NO. 89-383
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt.
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September 18, 1989
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The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
authorize the Mayor to extend from year to year the term of the loan from
the City to the Tri-City Project Area.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Community Development Commission
RESOLUTION NO. 5202
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO
AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RESOLUTION NO. 5203
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE CITY
OF SAN BERNARDINO.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Commissioner Flores made a motion, seconded by Commissioner Estrada, to
authorize the Agency's Executive Director to extend from year to year the
term of the loan from the Southeast Industrial Park Project Area to the City.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
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September 18, 1989
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5. Use of Facsimile Signature
RESOLUTION NO. 5204
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE PURCHASE AND USE OF A FACSIMILE SIGNATURE ON
CHECKS DRAWN UPON ALL ACCOUNTS OF THE REDEVELOPMENT AGENCY.
Commissioner Flores made a motions, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
6. Approval of final form of financing documents
Commissioner Estrada made a motion, seconded by Commissioner Miller, to
continue this item to Monday, September 25, 1989 at 1:00 p.m. in the Council
Chamber s.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None: Abstain: None.
Absent: None.
7. Adjournment
Commissioner Estrada made a motion, seconded by Commissioner Miller, to
adjourn to Monday, September 25, 1989, in the Council Chambers of the City
Hall, 300 North "D" Street, San Bernardino, California.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None: Abstain: None.
Absent: None.
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September 18, 1989
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COMMUNITY DEVELOPMENT COMMISSION/REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
M I NUT E S
ADJOURNED REGULAR MEETING
September 25, 1989
1:05 P.M.
The Community Development Commission/Redevelopment Agency meeting was
called to order at 1:05 P.M., on Monday, September 25, 1989, in the Council
Chambers of City Hall, 300 North "D" Street, San Bernardino, California, by
Commissioner Michael Mauds1ey.
ROLL CALL
Roll Call was taken with the following being present: Members Jack
Reilly, Jess Flores, Michael Mauds1ey, Tom Minor, Norine Miller. Absent:
Chairman W. R. "Bob" Holcomb, Members Esther Estrada and Valerie Pope-Ludlam.
STAFF PRESENT
Steven H. Dukett, Executive Director; Dennis A. Barlow, Senior Assistant
City Attorney; Marshall Julian, City Administrator; Phil Arvizo, Executive
Assistant to Council; James F. Penman, City Attorney; Denice Brue, Assistant
City Attorney; John Cole, Administrative Assistant to Council; J. Lorraine
Velarde, Mayor's Executive Assistant; Doris Reese, Deputy City Clerk;
Katharine Peake, Recording Secretary.
OTHERS PRESENT
Michael Toy, Hawkins, De1afie1d & Wood; Vickie Michael, Hawkins,
De1afie1d & Wood; Jim Iverson, Miller & Schroeder Financial, Inc.
Public Comments on Items not on Agenda. There were no public comments.
COMMISSIONERS ESTRADA AND POPE-LUDLAM ARRIVED AT 1:10 P.M.
1. Approval of Final form of Financing Documents.
Mayor and Common Council
The Deputy City Clerk read the titles of the Resolutions.
A. RESOLUTION NO. 89-386
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE FINAL FORM OF DOCUMENTS IN
CONNECTION WITH CERTAIN FINANCINGS.
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September 25, 1989
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Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
Community Development Commission
B. RESOLUTION NO. 5205
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING THE FINAL FORM OF DOCUMENTS IN CONNECTION WITH
CERTAIN FINANCINGS.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
Joint Powers Financing Authority
C. RESOLUTION NO. JPFA-4
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
APPROVING THE FINAL FORM OF DOCUMENTS IN CONNECTION WITH CERTAIN
FINANCINGS.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
Mayor and Common Council
D. RESOLUTION NO. 89-387
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA APPROVING THE FINAL FORM OF DOCUMENTS IN
CONNECTION WITH CERTAIN FINANCINGS.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
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September 25, 1989
1856R
Community Development Commission
E. RESOLUTION NO. 5206
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA APPROVING THE FINAL FORM OF DOCUMENTS IN
CONNECTION WITH CERTAIN FINANCINGS.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
A lengthy discussion ensued.
Michael Toy addressed the Commission. He explained the documents
presented.
Jim Iverson addressed the Commission. He explained that the tax
attorneys were concerned about the possible tax implications of the golf
course transaction. He requested that the Commission approve the documents
but continue the meeting until Wednesday, September 27, 1989, for possible
approval of changes in the documents pertaining to the golf course
transaction.
Commissioner Miller made a motion, seconded by Commissioner Estrada, to
approve resolutions A, Band C, subject to final approval by the City
Attorney's Office.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
Commissioner Minor made a motion, seconded by Commissioner Pope-Ludlam,
to approve resolutions D and E.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
Commissioner Flores made a motion, seconded by Commissioner Minor, to
continue the meeting to Wednesday, September 27, 1989, at 1:00 P.M.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
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September 25, 1989
1856R
CHAIRMAN W. R. HOLCOMB ARRIVED AT 1:30 P.M.
2. Request for Closed Session to discuss pending litigation.
Mayor and Common Council
That the Common Council recess to closed session to confer with its
attorney regarding pending litigation pursuant to Government Code
Section 54956.9(b)(1), as there is significant exposure to litigation.
Commissioner Flores made a motion, seconded by Commissioner Miller, to
recess to closed session.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
3. Request for Closed Session to discuss pending litigation.
Mayor and Common Council
That the Common Council recess to Closed Session pursuant to Government
Code Section 54956.9(a) to confer with its attorney regarding pending
litigation which has been initiated formally to which the City is a
party as follows:
Hobbs vs. City of San Bernardino - San Bernardino Superior Court Case
No. 250971.
Commissioner Flores made a motion, seconded by Commissioner Miller, to
recess to closed session.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None.
Abstain: None. Absent: None.
RECESSED MEETING
At 1:30 p.m. the Community Development Commission/Redevelopment Agency
recessed to closed session.
MEETING RECONVENED
At 1:55 p.m. the Community Development Commission/Redevelopment Agency
meeting was called to order by Chairman W. R. Holcomb.
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jack Reilly, Jess Flores, Michael Mauds1ey, Tom Minor, Valerie
Pope-Ludlam, Norine Miller.
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September 25, 1989
1856R
STAFF PRE SENT
Dennis A. Barlow, Senior Assistant City Attorney; Marshall Julian, City
Administrator; Phil Arvizo, Executive Assistant to Council; James F. Penman,
City Attorney; Denise Brue, Assistant City Attorney; John Cole,
Administrative Assistant to Council; J. Lorraine Velarde, Mayor's Executive
Assistant; Doris Reese, Deputy City Clerk; Katharine Peake, Recording
Secretary.
4. Adjournment
Commissioner Flores made a motion, seconded by Commissioner Miller, to
adjourn to Wednesday, September 27, 1989 at 1:00 p.m., in the Council
Chambers of the City Hall, 300 North "D" Street, San Bernardino, California.
The motion carried by the following vote: Ayes: Member Reilly, Flores,
Minor, Miller. Noes: None. Abstain: None. Absent: Estrada,
Mauds1ey, Pope-Ludlam.
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September 25, 1989
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COMMUNITY DEVELOPMENT COMMISSION/REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
MINUTES
REGULAR MEETING
October 2, 1989
8:45 a.m.
The Community Development CommiSSion/Redevelopment Agency meeting was
called to order at 8:45 a.m., on Monday, October 2, 1989, in the Council
Chambers of City Hall, 300 North "0" Street, San Bernardino, California, by
Chairman W. R. Holcomb.
ROLL CALL
Roll Call was taken with the following being present: Members Jess Flores,
Jack Reilly, Michael Mauds1ey, Tom Minor, Valerie Pope-Ludlam, Norine
Miller. Absent: Esther Estrada.
STAFF PRESENT
Steven H. Dukett, Executive Director; Dennis A. Barlow, Senior Assistant
City Attorney; Marshall Julian, City Administrator; Shauna Clark, City Clerk;
Margie Vance, Recording Secretary.
Public Comments on Items not on Agenda. There were no public comments.
CONTINUED FROM SEPTEMBER 27, 1989
RS-1 Approve Final Financing Plan in Connection with Certain Tax Allocation
Refunding Bonds.
A lengthy discussion ensued.
Mr. Jim Iverson, Senior Vice President of Miller & Schroeder, Financial
Consultant addressed the Commission and stated that on September 25, 1989 the
meeting was continued for final approval on September 27, 1989 but that due to
a lack of chorum the item was continued to today's meeting.
He explained that as a result of the refunding of a series of outstanding
bonds issues the City will have a total of $7,163,000.00 to spend. He said
that as soon as the Commission approves the two resolutions before them the
financial transaction would close within one half hour. He also said that he
has already spoken with Mr. Tim Sabo, Bond Counsel and that he had stated that
the bonds have been executed and that the bonds and the money were available.
He said that the actual cash dollars will not arrive until the last part of
the financial transaction has closed which will take place on October 28,
1989, and that it was a 30 day delay that was dictated by the changes of the
1986 tax bill and stated that as of the first of November the City will have
approximately $11 million dollars in cash rebate. He spoke briefly regarding
the Collateralized Mortgage Obligations (CMO) and said that his office was
still gathering information from Redevelopment Agency staff regarding the
Agency's outstanding obligations.
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October 2, 1989
1861R
Commissioner Flores asked if the $7 million previously mentioned was
part of the $11 million.
Mr. Iverson said yes.
Commissioner Minor asked if the City was going to have $11 million to
spend.
Mr. Iverson said yes.
Community Development Commission
The City Clerk read the titles of the resolutions.
RESOLUTION NO. 5208
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING THE FINAL FINANCING PLAN IN CONNECTION WITH CERTAIN
TAX ALLOCATION REFUNDING BONDS.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Reilly, Flores,
Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: Estrada.
Joint Powers Financing Authority
RESOLUTION NO. JPFA-5
RESOLUTION OF THE CITY OF SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY APPROVING THE FINAL FINANCING PLAN IN CONNECTION WITH CERTAIN
TAX ALLOCATION REFUNDING BONDS.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Reilly, Flores,
Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: Estrada.
RECESSED MEETING
At 9:00 a.m. the Community Development Commission/Redevelopment Agency
recessed to 11:00 a.m.
MEETING RECONVENED
At 11:20., the Community Development Commission/Redevelopment Agency of
meeting was called to order by Chairman W. R. Holcomb.
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October 2, 1989
1861R
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jess Flores, Jack Reilly, Michael Maudsley, Tom Minor, Valerie
Pope-Ludlam, Norine Miller.
STAFF PRE SENT
Steven H. Dukett, Executive Director; Arlene S. Berman, Administrative
Deputy; John Hoeger, Development Manager; Dennis A. Barlow, Senior Assistant
City Attorney; Marshall Julian, City Administrator; Shauna Clark, City Clerk;
Margie Vance, Recording Secretary.
Public Comments on Items not on Agenda. There were no public comments.
1. Redevelopment Committee Meeting/Redevelopment Agency of the City of San
Bernardino Minutes of August 24, 1989.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
receive and file the minutes of the meeting of the Redevelopment
Committee/Redevelopment Agency of the City of San Bernardino held on August
24, 1989 as submitted in typewritten form.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
2. Redevelopment Committee Meeting/Redevelopment Agency of the City of San
Bernardino Minutes of September 7, 1989.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
receive and file the minutes of the meeting of the Redevelopment
Committee/Redevelopment Agency of the City of San Bernardino held on September
7, 1989 as submitted in typewritten form.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
3. Uptown Citizens Advisory Committee Appointments.
Commissioner Estrada made a motion, seconded by Commissioner Reilly to
appoint Mr. James J. Filarski and Mr. Frederick Curlin, M.D., to serve on the
Uptown Citizens Advisory Committee to represent Sub Area "A".
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
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October 2, 1989
l86lR
4. Setting of Public Hearing - Court & "E" Street.
Mayor and Common Council
Commissioner Estrada made a motion, seconded by Commissioner Reilly, that
a Joint Public Hearing of the Mayor and Common Council with the Community
Development Commission be set at 11:00 a.m. on October 16, 1989 to consider
the sale of certain real property owned by the Redevelopment Agency within the
Central City Project Area to One Sunset Court Ltd., subject to the conditions
described in the staff report.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
Community Development Commission
Commissioner Estrada made a motion, seconded by Commissioner Reilly, that
the Community Development Commission set a Joint Public Hearing of the Mayor
and Common Council at 11:00 a.m. on October 16, 1989 to consider the sale of
certain real property owned by the Redevelopment Agency within the Central
City Project Area to One Sunset Court Ltd., subject to the conditions
described in the staff report.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
5. Quarterly Current Activity Status Report.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
receive and file the Current Activity Status Report.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
6. Arrowhead Health Care System - Amended DDA.
Commissioner Estrada made a motion, seconded by Commissioner Reilly, to
continue this item to Monday, October 16, 1989.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
COMMISSIONER FLORES AND COMMISSIONER MILLER LEFT THE COUNCIL TABLE.
Mayor Holcomb addressed the Commission and stated that he had to
disqualify himself from items 7 and 8 due to a possible conflict of interest.
Commissioner Pope-Ludlam acting as Mayor Pro-Tempore continued with the
Meeting.
4
October 2, 1989
l861R
Commissioner Pope-Ludlam asked that item 8 be taken out of order.
8. Closed Session to discuss whether to initiate litigation.
Pursuant to Government Code Section 54956.9(c) the Commission met in
closed session to decide whether to initiate litigation.
Commissioner Pope-Ludlam made a motion, seconded by Commissioner Reilly,
to recess to closed session.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Mauds1ey, Minor, Pope-Ludlam. Noes: None. Abstain: None.
Absent: Flores, Miller.
RECESSED MEETING
At 11:25 a.m., the Community Development Commission/Redevelopment Agency
recessed to closed session.
MEETING RECONVENED
At 11:40 a.m., the Community Development Commission/Redevelopment Agency
meeting was called to order by Commissioner Pope-Ludlam.
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jack Reilly, Michael Mauds1ey, Tom Minor, Valerie Pope-Ludlam.
Absent: Jess Flores, Norine Miller.
STAFF PRESENT
Steven H. Dukett, Executive Director; Arlene S. Berman, Administrative
Deputy; John Hoeger, Development Manager; Dennis A. Barlow, Senior Assistant
City Attorney; Marshall Julian, City Administrator; Shauna Clark, City Clerk;
Margie Vance, Recording Secretary.
COMMISSIONER FLORES AND COMMISSIONER MILLER RETURNED TO THE COUNCIL TABLE.
7. Rockwell International
Mayor and Common Council
The City Clerk read the titles of the resolutions.
RESOLUTION NO. 89-396
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
APPROVING THE CONVEYANCE BY MEANS OF SALE OF CERTAIN REAL PROPERTY
PURSUANT TO A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND ROCKWELL
INTERNATIONAL CORPORATION.
5
October 2, 1989
1861R
Commissioner Minor made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain:
None. Absent: None.
Community Development Commission
RESOLUTION NO. 5206
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE OF CERTAIN REAL
PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT AGREEMENT BY AND
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND
ROCKWELL INTERNATIONAL CORPORATION.
Commissioner Minor made a motion, seconded by Commissioner Reilly, to
waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
MAYOR HOLCOMB RETURNED TO THE COUNCIL TABLE.
RS-2 The Mt. Vernon Business Corridor and Adjacent Areas.
Mayor and Common Council
RESOLUTION NO. 89-397
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
DESIGNATING A REDEVELOPMENT SURVEY AREA.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RESOLUTION NO. 89-398
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF
SAN BERNARDINO AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO.
6
October 2, 1989
l861R
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RESOLUTION NO. 89-399
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE COMMUNITY
DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Community Development Commission
RESOLUTION NO. 5209
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO APPROVING A LOAN AGREEMENT BETWEEN THE CITY OF SAN BERNARDINO
AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RESOLUTION NO. 5210
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT WITH THE CITY
OF SAN BERNARDINO.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absen t: None.
7
October 2, 1989
1861R
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to authorize the execution of an Agreement with Urban Futures, Inc. for
Redevelopment plan adoption and related environmental consulting services.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absen t: None.
Commissioner Miller made a motion, seconded by Commissioner Pope-Ludlam,
to authorize the formation of a Citizen Advisory Committee composed of
appointees from Mayor Holcomb and Counci1persons Estrada, Flores and
Pope-Ludlam representing business owners, business tenants, residential owners
and residential tenants; as well as representatives to be appointed by
community based organizations in the proposed area.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RS-3 EXPANSION JOINTS REPAIR - CENTRAL CITY MALL
A discussion ensued.
Dennis A. Barlow, Senior Assistant City Attorney, addressed the
Commission and stated that before the Commission can approve the item before
them they needed to have the back-up for the staff report and recommended that
the item be continued to 2:00 p.m., in the afternoon.
Commissioner Estrada made a motion, seconded by Commissioner Minor to
continue the item to 2:00 p.m, in the afternoon or as soon thereafter as the
matter can be heard.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Mauds1ey, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
RECESSED MEETING
At 11:45 a.m., the Community Development Commission/Redevelopment Agency
recessed to 2:00 p.m., in the afternoon or soon thereafter so the matter can
be heard.
MEETING RECONVENED
At 2:45 a.m., the Community Development CommisSion/Redevelopment Agency
meeting was called to order by Chairman W. R. Holcomb.
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jack Reilly, Jess Flores, Michael Mauds1ey, Tom Minor, Valerie
Pope-Ludlam, Norine Miller.
8
October 2, 1989
1861R
STAFF PRESENT
James F. Penman, City Attorney; Marshall Julian, City Administrator;
Shauna Clark, City Clerk; Margie Vance, Recording Secretary.
RS-3 EXPANSION JOINTS REPAIR - CENTRAL CITY MALL
A discussion ensued.
Commissioner Flores asked Wayne Overstreet if there was justification
for sole source on the joint expansion item.
Wayne Overstreet answered that his office went out for bids and that he
received 3 bids out of which the recommended company in his staff report was
the most qualified.
City Attorney, Jim Penman stated that Mr. Overstreet followed the proper
procedure and that his finding was sufficient to make a final recommendation.
Mayor and Common Council
RESOLUTION NO. 89-403
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
AUTHORIZING THE EXPENDITURE OF CENTRAL CITY PROJECT AREA FUNDS FOR
PUBLIC IMPROVEMENTS (EXPANSION JOINTS - 3 LEVEL PARKING STRUCTURE).
Commissioner Reilly made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
Community Development Commission
RESOLUTION NO. 5211
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXPENDITURE OF CENTRAL CITY PROJECT AREA
FUNDS FOR PUBLIC IMPROVEMENTS (EXPANSION JOINTS - 3 LEVEL PARKING
STRUCTURE) .
Commissioner Reilly made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absen t: None.
9
October 2, 1989
l861R
COMMISSIONER POPE-LUDLAM LEFT THE COUNCIL TABLE.
6. Arrowhead Health Care System - Amended DDA.
Commissioner Reilly made a motion, seconded by Commissioner Flores, to
reconsider item 6.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Miller. Noes: None. Abstain: None.
Absent: Pope-Ludlam.
A lengthy discussion ensued.
COUNCILWOMAN POPE-LUDLAM RETURNED TO THE COUNCIL TABLE.
Commissioner Estrada made a motion, seconded by Commissioner Minor, to set
a Special Meeting in order to further review item 6 and that the meeting be
set for Thursday, October 5, 1989 at 4:00 p.m. in the Redevelopment Agency
Conference Room, Fourth Floor, City Hall, 300 North "D" Street, San
Bernardino, California.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
9. Adjournment
Commissioner Pope-Ludlam made a motion, seconded by Commissioner Miller,
to adjourn the meeting to Monday, October 16, 1989 at 11:00 a.m., in the
Council Chambers of the City Hall, 300 North "D" Street, San Bernardino,
California.
The motion carried by the following vote: Ayes: Member Estrada, Reilly,
Flores, Maudsley, Minor, Pope-Ludlam, Miller. Noes: None. Abstain: None.
Absent: None.
10
October 2, 1989
l86lR
j,eI
COMMUNITY DEVELOPMENT COMMISSION/REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
M I NUT E S
SPECIAL MEETING
October 6, 1989
9:03 a.m.
The Community Development Commission/Redevelopment Agency meeting was
called to order at 9:03 a.m., on Friday, October 6, 1989, in the
Redevelopment Agency Conference Room, City Hall, 300 North "D" Street, San
Bernardino, California, by Chairman W. R. Holcomb.
ROLL CALL
Roll Call was taken with the following being present: Members Esther
Estrada, Jack Reilly, Jess Flores, Michael Maudsley, Tom Minor.
Absent: Valerie Pope-Ludlam, Norine Miller. (Written Waivers of Notice were
received and are on file)
STAFF PRESENT
James E. Robbins, Acting Executive Director; Arlene S. Berman,
Administrative Deputy; John Hoeger, Redevelopment Agency; J. Lorraine
Velarde, Executive Assistant to Mayor; Phil Arvizo, Council Office; Dennis
A. Barlow, Senior Assistant City Attorney; Doris Reese, Deputy City Clerk;
Margie Vance, Recording Secretary.
Public Comments on Items not on Agenda. There were no public comments.
CONTINUED FROM OCTOBER 2, 1989
1. Arrowhead Health Care System
Mayor and Common Council
The Deputy City Clerk read the title of the resolution.
RESOLUTION NO. 89-404
RESOLUTION OF THE MAYOR. AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO
AUTHORIZING THE EXECUTION OF A COOPERATIVE AGREEMENT BETWEEN THE CITY OF
SAN BERNARDINO AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO.
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
waive further reading of the resolution and to adopt the resolution.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
set a joint public hearing at 9:00 a.m. on October 16, 1989 for the purpose
of considering a TEFRA Resolution.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
Community Development Commission
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
approve execution of a Second Amendment to the Disposition and Development
Agreement with Arrowhead Health Care System, Inc.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
authorize the execution of a Cooperative Agreement between the City of San
Bernardino and the Community Development Commission of the City of San
Bernardino.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
set a joint public hearing at 9:00 a.m. on October 16, 1989 for the purpose
of considering a TEFRA Resolution.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
2 . Adjournment
Commissioner Minor made a motion, seconded by Commissioner Estrada, to
adjourn to Monday, October 16, 1989, in the Council Chambers of the City
Hall, 300 North "D" Street, San Bernardino, California.
The motion carried by the following vote: Ayes: Members Estrada, Reilly,
Flores, Maudsley, Minor. Noes: None. Abstain: None. Absent: Pope-Ludlam,
Miller.
2
October 6, 1989
l862R
AGENDA ITEM INFORMATION SUMMARY
GENERAL INFORMATION:
Subject.J.... &M'U~ /1~~Gf 11'/..n'I~,
4. h. 1:) fEFf.+ t~u;.. fI-'~
Author ~,~ Ext.
Ward (p Project Area AI W
Committee
CommissionlCouncil
Filing Dates
Funding Requirements
J 0- / ~ - J r
I
~
Meeting Dates
Budget Authority
!1---eYut.-
RDA MANAGEMENT REVIEW: CLEARANCES:
Date Date
"2:~~ /~I/~ Yes N/A
0 ~~ /0/1
/0///-3'7 ~
~ ,
I D III ID-II-J''l
IZL D . Counsel ~
I q City Attorney ,
Ma 'sor .
CITY DEPARTMENTAL REVIEW: 0 0 City Administrator
Date
RDA Committee recommendation
Dept. By
Dept. By
INFORMATIONAL DATA FORWARDED TO CITY DEPARTMENTS/COUNCIL OFFICES:
Sent to
By
Date
Mayor's Office
Council Ward
Council Ward
Council Ward
Council Ward
Department
Department
COMMENTS/CONCERNS: Include pertinent comments and concerns of offices and persons clearing the
summary, such as controversial Issues, time constraints and funding complications. Indicate dates when
action must be taken.
~t
RDA -174
REV. 6-29-89
Redevelopment Agency · City of San Bernardino
300 North "0" Street, Fourth Hoor . San Bernardino, California 92418
(714) 384-5081 FAX (714) 888-9413
Pride -I
e~
Steven H. Dukett
Executive Director
OCTOBER 11, 1989
SAN BERNARDINO COMMUNITY HOSPITAL
AUTHORIZING THE ISSUANCE AND SALE OF
SAN BERNARDINO COMMUNITY HOSPITAL REVENUE
REFUNDING BONDS; TEFRA PUBLIC HEARING
Synopsis of Previous Commission/Council/Committee Action:
09/21/89 Committee reviewed the item and recommended approval.
10/06/89 Council adopted a Resolution No. 89-404.
10/06/89 Council approved setting a joint public hearing.
10/06/89 Commission approved execution of a Second Amendment to the DDA.
10/06/89 Commission authorized execution of a Cooperative Agreement.
10/06/89 Commission approved setting a joint public hearing for TEFRA
Resolution.
(MAYOR AND COMMON COUNCIL)
Recommended Motion:
OPEN PUBLIC HEARING
Motion:
(A)
That the Public Hearing be closed; that further reading of the
following resolution be waived.
(continued on Page 2)
Respectfully Submitted,
Director
Supporting data attached: YES
FUNDING REQUIREMENTS: None
Ward:
Project:
6
NW
Commission Notes:
JR:EJ:sm:2399H
Agenda of: October 16. 1989
Item No.
Redevelopment Agency
(continued from Page 1)
(MAYOR AND COMMON COUNCIL)
Motion: Adopt a RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
(B) SAN BERNARDINO, AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
COMMUNITY HOSPITAL), SERIES 1989, THE EXECUTION AND DELIVERY OF AN
INDENTURE, LOAN AGREEMENT, ESCROW AGREEMENT, BOND PURCHASE CONTRACT,
OFFICIAL STATEMENT AND AUTHORIZING CERTAIN OTHER ACTIONS IN
CONNECTION THEREWITH.
JR:EJ:sm:2399H
2
Redevelopment Agency
S T A F F R E P 0 R T
This is to request that the Mayor and Common Council approve a TEFRA
resolution which would authorize the issuance and sale of the Refunding Bonds
and the execution and delivery of certain documents.
BACKGROUND
In 1985, the City of San Bernardino issued limited obligation revenue bonds
(the "1985 Bonds"), the proceeds of which were loaned to San Bernardino
Community Hospital (the "Hospital"). The proceeds of 1985 bond issue were
used, in part, to modernize the Hospital's then existing acute care facility
as well as to construct a new five story patient care tower. The Hospital,
and not the City, is liable to repay these 1985 Bonds.
The Hospital has requested the assistance of the City to issue refunding bonds
("Refunding Bonds") in order to refund the 1985 Bonds and thereby realize a
present value debt service payment savings of $2.0 - 2.5 million (depending on
the interest rate to be obtained for the Refunding Bonds). As was the case
with respect to the 1985 Bonds, the Refunding Bonds will be payable solely
from moneys received from the Hospital.
Today you are being asked (1) to hold a TEFRA public hearing (which has been
appropriate noticed in The San Bernardino Sun) during which the public is to
be given the opportunity to express their views with respect to the proposed
issuance of the Refunding Bonds and then (2) to consider the resolution which
would authorize the issuance and sale of the Refunding Bonds and the execution
and delivery of certain bond documents. These documents include:
(a) Indenture between the City and the Trustee
(b) Loan Agreement between the City and the Hospital
(c) Escrow Agreement with the Hospital, the City and the Escrow Agent
(d) Bond Purchase Contract between the city and Rauscher Pierce Refsnes,
Inc.
(e) Official Statement
The proposed issuance of Refunding Bonds will be in a principal amount not in
excess of $40,000,000.
RECOMMENDA nON
Both Special Counsel and Agency Counsel have reviewed the documents and both
will be present during the hearing to answer questions. It is, therefore,
recommended that the Mayor and Common Council adopt the resolution which would
authorize the issuance and sale of the refunding Bonds.
JR:EJ:sm:2399H
')
1 RESOLUTION NO.
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
3 BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
COMMUNITY HOSPITAL), SERIES 1989, THE EXECUTION AND DELIVERY OF
4 AN INDENTURE, LOAN AGREEMENT, ESCROW AGREEMENT, BOND PURCHASE
CONTRACT AND OFFICIAL STATEMENT, AND AUTHORIZING CERTAIN OTHER
5 ACTIONS IN CONNECTION THEREWITH.
6
WHEREAS, the City of San Bernardino (the "City") is a
7 municipal corporation and charter city, duly organized and
8 existing under a freeholders' charter, pursuant to which the City
9 has the right and power to make and enforce all 1 aws and
10 regulations in respect to municipal affairs and certain other
11 matters in accordance with, and as more particularly provided in,
12 Sections 3, 5 and 7 of Article XI of the Constitution of the
13 State of California and Section 40 of the Charter of the City
14 (the "Charter");
15
WHEREAS, the Common Council of the City (the "Council"),
16 acting under and pursuant to the powers reserved to the City
17 under Sections 3, 5 and 7 of Article XI of the Constitution of
18 the State of California and Section 40 of the Charter,- has
19 established by the adoption of Ordinance No. 3815 of the City, as
20 amended (the "Law") and its resolution No. 85-260, a procedure
21 for the authorization, issuance and sale of revenue bonds by the
22 City, for the purpose, inter alia, of providing financing for
23 health facilities as specified therein;
24
WHEREAS, the Council, in 1985 pursuant to the Law,
25 authorized the issuance of City of San Bernardino Insured
26 Hospital Revenue Bonds (San Bernardino Community Hospital),
27 Series 1985A (the "1985 Bonds");
28
DAB/ses
October 11, 1989
1
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
WHEREAS, San Bernardino Community Hospital, a California
4
5
6
nonprofit public benefit corporation (the "Corporation"), has
requested the assistance of the City to allow for the refunding
of the 1985 Bonds;
7
WHEREAS, the Law allows the City to issue revenue bonds for
8
the purpose of refunding the 1985 Bonds, and the Council desires
9
10
that the City issue revenue refunding bonds, designated as "City
of San Bernardino Hospital Revenue Refunding Bonds (San
Bernardino Community Hospital) Series 1989" (the "Bonds"), in an
aggregate principal amount not to exceed forty million dollars
($40,000,000), for the purpose of refunding the 1985 Bonds;
WHEREAS, assisting in the refunding of the 1985 Bonds, the
proceeds of which were used to finance health facilities of the
Corporation all located solely within the City, promotes the
purposes of the Law, is in the public interest, serves a public
purpose, promotes the health, welfare and safety of the Citizens
of the City, and constitutes a municipal affair;
WHEREAS, pursuant to Section 147(f) of the Internal Revenue
Code of 1986 (the "Code"), the Bonds are required to be approved,
following a public hearing, by an elected representative of the
issuer of the Bonds and an elected representative of the
governmental unit having jurisdiction over the area in which the
facilities relating to the refunding project are located;
WHEREAS, the facilities relating to the refunding project
are located wholly within the City;
DAB/ses
October 11, 1989
2
17
18
19
20
21
22
23
24
25
26
27
28
1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
4
WHEREAS, the Council is the elected legislative body of the
5
City and is the applicable elected representative required to
6
approve the issuance of the Bonds within the meaning of Section
147(f) of the Code;
7
8
9
WHEREAS, pursuant to Section 147(f) of the Code, the
Council has, fOllowing notice duly given, held a public hearing
10
regarding the issuance of the Bonds, and now desires to approve
the issuance of the Bonds;
11
12
WHEREAS, all acts, conditions and things required by the
13
Law, and by all other laws of the State of California, to exist,
14
have happened and have been performed pursuant to and in
15
connection with the issuance of the Bonds, exist, have happened,
16
and have been performed in regular and due time, form and manner,
as required by law, and the City is now duly authorized and
empowered, pursuant to each and every requirement of law, to
issue the Bonds for the purpose, in the manner and upon the terms
herein provided;
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the
City of San Bernardino, as follows:
SECTION 1.
The Council does hereby find and declare
that the above recitals are true and correct and that the
issuance of the Bonds is a municipal affair and a proper public
purpose.
SECTION 2.
Pursuant to the Law, the Bonds shall be
issued in an aggregate principal amount not to exceed forty
DAB/ses
October 11, 1989
3
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
million dollars ($40,000,000).
4
SECTION 3.
The proposed form of indenture, dated as of
5
November 1, 1989, between the City and Security Pacific National
6
Bank, as trustee (the "Indenture"), presented at this meeting, is
7
hereby approved. The Mayor, City Administrator or the authorized
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representative of either of them and City Clerk or Deputy City
Clerk are hereby authorized and directed, for and in the name of
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and on behalf of the City, to execute, acknowledge and deliver to
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Security Pacific National Bank, as trustee selected by the
Corporation, which institution shall be reasonably acceptable to
the City) (the "Trustee"), an Indenture in substantially said
form, with such changes therein as the officers executing the
same, with the advice of the City Attorney, may approve, such
approval to be conclusively evidenced by the execution and
delivery thereof.
The date, maturity dates, interest rate or
rates, interest payment dates, denominations, forms, registration
privileges, manner of execution, place or places of payment,
terms of redemption and other terms of the Bonds shall be as
provided in said Indenture as finally executed.
SECTION 4.
The proposed form of loan agreement, dated
as of November 1, 1989, between the City and the Corporation (the
"Loan Agreement"), presented at this meeting, is hereby approved.
The Mayor, City Administrator or the authorized representative of
either of them and the City Clerk or Deputy City Clerk are hereby
authorized and directed to execute and deliver such Loan
DAB/ses
October 11, 1989
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1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
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Agreement, for and in the name of and on behalf of the City, with
5
such changes therein as the officers executing the same, with the
6
advice of the City Attorney, may approve, such approval to be
7
conclusively evidenced by the execution and delivery thereof.
SECTION 5.
The proposed form of escrow agreement, dated
8
9
as of November 1, 1989, among the City, the Corporation and
10
Security Pacific National Bank (the "Escrow Agreement"),
presented at this meeting, is hereby approved.
The Mayor, City
11
Administrator or the authorized representative of either of them
12
13
and the City Clerk or Deputy City Clerk are hereby authorized and
14
directed to execute and deliver such Escrow Agreement, for and in
15
the name of and on behalf of the City, with such changes therein
16
as the officers executing the same, with the advice of the City
17
Attorney, may approve, such approval to be conclusively evidenced
by the execution and delivery thereof.
SECTION 6.
The proposed form of bond purchase contract,
to be dated as of the date of the sale of the Bonds, between the
City and Rauscher Pierce Refsnes, Inc. (the "Bond Purchase
Contract"), presented at this meeting, is hereby approved. The
Mayor, City Administrator or the authorized represent~tive of
either of them is hereby authorized and directed to approve the
final terms of the sale of the Bonds, provided that the net
interest cost of the Bonds shall not exceed twelve percent (12%),
and to evidence the City's acceptance of the offer made thereby
by executing and delivering the Bond Purchase Contract, in
DAB/ses
October 11, 1989
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1 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
4
substantially said form, with such changes therein as the officer
5
executing the same, with the advice of the City Attorney, may
6
require or approve, such approval to be conclusively evidenced by
the execution and delivery thereof.
7
SECTION 7.
The proposed form of official statement to
8
9
be used in connection with the offer and sale of the Bonds (the
10
"Official Statement"), presented at this meeting, is hereby
adopted and approved.
The Mayor, City Administrator or the
11
12
authorized representative of either of them is hereby authorized
13
and directed to execute and deliver the same, with such changes
14
therein as the officer executing the same, with the advice of the
15
City Attorney, may require or approve, such approval being
conclusively evidenced by the execution and delivery thereof.
Rauscher Pierce Refsnes, Inc. is hereby authorized to distribute
copies of the Official Statement in preliminary form and to
distribute copies of the Official Statement in preliminary. form
and to distribute copies of the Official Statement as finally
executed, to persons who may be interested in the purchase of the
Bonds, and is directed to deliver such copies to all actual
purchasers of the Bonds.
SECTION 8.
Forms of the proposed Indenture, Loan
Agreement, Escrow Agreement, Bond Purchase Contract and Official
Statement are on file in the Office of the City Clerk.
SECTION 9.
The Bonds in an aggregate principal amount
not to exceed forty million dollars ($40,000,000) shall be
DAB/ses
October 11, 1989
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1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
4
executed by the facsimile signature of the Mayor or City
Administrator.
The facsimile signature of the City Clerk or
5
6
Deputy City Clerk, in forms set forth in and otherwise in
accordance with the Indenture.
7
SECTION 10.
The Bonds, as executed, shall be delivered
8
to the Trustee for authentication.
The Trustee is hereby
9
10
requested and directed to authenticate the Bonds by executing the
11
Trustee's certificate of authentication appearing thereon, and to
12
deliver the Bonds, when duly executed and authenticated, to the
13
purchasers thereof, in accordance with written instructions
14
executed on behalf of the City by the Mayor, City Administrator
or the authorized representative of either of them, which
16
instructions said officer is hereby authorized and directed, in
17
the name of and on behalf of the City, to execute and deliver to
the Trustee. Said instructions shall provide for the delivery of
the Bonds to Rauscher Pierce Refsnes, Inc. upon payment of the
purchase price thereof.
SECTION 11.
Pursuant to Section 147(f) of the Code, the
Council hereby approves the issuance of the Bonds.
It is the
purpose and intent of the Council that this resolution constitute
approval of the issuance of the Bonds by the applicable elected
representative of the issuer and the applicable elected
representative of the governmental unit having jurisdiction over
the area in which the facilities relating to the refunding
project are located, in accordance with said Section 147(f).
DAB/ses
October 11, 1989
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1 RESOLUTION...AUTHORIZING THE ISSUANCE AND SALE OF CITY OF SAN
BERNARDINO HOSPITAL REVENUE REFUNDING BONDS (SAN BERNARDINO
2 COMMUNITY HOSPITAL), SERIES 1989...AND AUTHORIZING CERTAIN OTHER
ACTIONS IN CONNECTION THEREWITH.
3
SECTION 12.
The officers of the City are hereby
4
5
authorized and directed, jointly and severally, to do any and all
6
things to execute and deliver all documents which they may deem
7
necessary or advisable in order to consummate the issuance, sale
and delivery of the Bonds, and otherwise to effectuate the
8
purposes of this Resolution.
9
SECTION 13.
This Resolution shall take effect
10
immediately upon its passage.
11
12
I HEREBY CERTIFY that the foregoing resolution was duly
13
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on the
14
day of
, 1989, by the following vote, to wit:
15
AYES:
Council Members
16
NAYS:
ABSENT:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1989.
W.R. Holcomb, Mayor
24 City of San Bernardino
Approved as to form
25 and legal content:
26
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JAMES F. PENMAN,
City Attorney
B~)
DAB/ses
October 11, 1989
8
ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of November 1, 1989,
by and among the CITY OF SAN BERNARDINO, a charter city and
municipal corporation duly organized and existing under and by
virtue of the Constitution and laws of the State of California
(the "City"), SAN BERNARDINO COMMUNITY HOSPITAL, a nonprofit
corporation duly organized and existing under the laws of the
State of California (the "Corporation"), and SECURITY PACIFIC
NATIONAL BANK, a national banking association duly organized
and existing under the laws of the United States of America,
and being qualified to accept and administer the trusts hereby
created (the "Bank");
WITNESSETH:
WHEREAS, the City has heretofore duly issued its
City of San Bernardino Insured Hospital Revenue Bonds (San
Bernardino Community Hospital) Series 1985A, dated December 1,
1985, in the aggregate principal amount of $35,000,000 (the
"1985 Bonds") pursuant to an indenture between the City and
the Bank, dated as of December 1, 1985 (the "1985 Indenture");
WHEREAS, substantial savings and other benefits can
be obtained by providing for the refunding of the outstanding
principal installments of the 1985 Bonds;
WHEREAS, the Corporation has requested the City, and
the City has agreed, to issue its City of San Bernardino
Community Hospital Revenue Refunding Bonds (San Bernardino
Community Hospital) Series 1989 (the "1989 Bonds") in an
aggregate principal amount of $ ,000,000 for the purpose,
among others, of providing moneys which will be sufficient to
provide for the retirement of the outstanding principal
installments of the 1985 Bonds together with accrued interest-
thereon;
WHEREAS, to provide for the issuance of the 1989
Bonds, the City shall enter into an indenture with the Bank,
as trustee, dated as of November 1, 1989 (the "1989
Indenture");
WHEREAS, the 1989 Indenture contemplates the setting
aside of a portion of the proceeds of the 1984 Bonds and of
moneys held under the 1985 Indenture in order to provide for
the payment of the 1985 Bonds and such proceeds and moneys
shall be deposited in a special trust fund to be created
hereunder to be known as the Escrow Fund to be maintained by
the Bank (the "Escrow Fund") on , 1989 or
such later date as directed by the City;
22l9m5
....; '.,
/) '-('
WHEREAS, the Corporation and the City have taken
action to cause to be issued or delivered to the Bank for
deposit in or credit to the Escrow Fund [cash and certain
securities and investments (the "Escrow Securities")
consisting of certain united States Treasury Certificates of
Indebtedness and Notes - State and Local Government Series
(the "State and Local Government Series Securities"),] all as
listed on Schedule I attached hereto and made a part hereof,
in an amount which, together with income or increment to
accrue on such securities, will be sufficient to pay the
principal installments of the 1985 Bonds together with accrued
interest thereon as the same respectively become due in
accordance with their stated maturity dates or are redeemed
upon the first possible date of redemption of the 1985 Bonds,
namely, December 1, 1995.
NOW, THEREFORE, the City, the Corporation and the
Bank hereby agree as follows:
Section 1. Establishment and Maintenance of Escrow
Fund. The Bank shall establish and maintain until all
principal installments of and interest and redemption
premiums, as applicable, on the 1985 Bonds have been paid in
full a fund designated as the "Escrow Fund," and to hold the
securities, investments and moneys therein at all times as a
special fund and separate trust account wholly segregated from
all other securities, investments or moneys on deposit with
the Bank. All securities, investments and moneys in the
Escrow Fund are hereby irrevocably pledged, subject to the
provisions of Section 2 hereof, to secure the payment of the
principal installments of and interest and redemption
premiums, as applicable, on the 1985 Bonds.
Section 2.
Investment of the Escrow Fund.
(a) The Corporation, the City and the Bank each
shall take all remaining necessary action to have issued and
registered in the name of the Bank, for the account of the
Escrow Fund, [the State and Local Government Series
Securities.] The Bank shall use the portion of the proceeds
of the 1989 Bond and the moneys held under the 1985 Indenture
deposited into the Escrow Fund to purchase the [State and
Local Government Series Securities as specified in Schedule I.]
(b) The Bank shall not reinvest any cash portion of
the Escrow Fund; provided, however, that after obtaining an
unqualified opinion of nationally recognized bond counsel that
such reinvestment will not cause the 1989 Bonds to be
["arbitrage bonds"] as defined in Section 103(c) of the
Internal Revenue Code of 1986, and the regulations of the
United States Department of the Treasury issued thereunder,
and will not result in the breach of any covenant of the City
contained in the 1989 Indenture, the Bank may reinvest any
cash portion of the Escrow Fund in direct obligations of the
United States of America or obligations the payment of the
principal and interest of which is guaranteed by a pledge of
the full faith and credit of the United States of America.
Any such reinvestment shall be made in securities the
principal of and interest on which is payable at such times
and in such amounts as will be sufficient (together with the
other securities, investments and moneys in the Escrow Fund)
to pay when due the principal installment of and interest on
the 1985 Bonds in accordance with Section 3. The Bank shall
not be liable or responsible for any loss resulting from any
reinvestment made pursuant to this Agreement and in full
compliance with the provisions hereof.
Section 3. Payment of the 1985 Bonds.
(a) The Bank shall collect and deposit in the
Escrow Fund the principal of and interest on all Escrow
Securities held for the account of the Escrow Fund promptly as
such principal and interest become due, and to apply, subject
to the provisions of Section 2, such principal and interest,
together with any other moneys and the principal of and
interest on any other securities deposited in the Escrow Fund,
to the payment of the principal installments of and interest
and redemption premiums, as applicable, on the 1985 Bonds at
the times and places and in the manner stipulated in the 1985
Bonds and in the 1985 Indenture and in subsection (b) of this
Section. Upon retirement in full of all principal
installments of and interest on the 1985 Bonds, the Bank shall
transfer any moneys or securities remaining in the Escrow Fund
to the Corporation.
(b) In accordance with Section 10.03 of the 1985
Indenture, the Bank is irrevocably instructed and shall apply
the moneys and securities on deposit in the Escrow Fund to the
payment upon maturity or upon the first possible date of
redemption (namely December 1, 1995), as the case may be, to
the payment or redemption of the 1985 Bonds. The Bank is
further irrevocably instructed and shall cause all appropriate
notices of such redemption to be given as provided in Article
IV of the 1985 Indenture and as otherwise required by the 1985
Indenture.
Section 4. Possible Deficiencies.
(a) If at any time it shall appear to the Bank that
the moneys in the Escrow Fund, including the anticipated
proceeds of the Escrow Securities, will not be sufficient to
make all payments required by Section 3 hereof, the Bank shall
notify the Corporation in writing as soon as reasonably
practicable of such fact, the amount of such deficiency and
the reason therefor.
(b) Thereupon the Corporation shall deposit in the
Escrow Fund, from any legally available moneys, such
additional moneys as may be required to meet fully the
aggregate amounts to become due and payable for the principal
installments of and interest and redemption premiums, as
applicable, on the 1985 Bonds as the same become due.
(c) The Bank shall in no manner be responsible for
the Corporation's failure to make such deposit if the Bank
shall have notified the Corporation as soon as is reasonably
practicable of the need for such additional moneys.
Section 5. Request of the Corporation and the
City. The Corporation and the City hereby irrevocably request
and instruct the Bank to apply the moneys in the Escrow Fund
established herein to the payment of the principal or
Redemption Price (as that term is defined in the 1985
Indenture), as the case may be, of the 1985 Bonds, all in
accordance with the terms of the 1985 Indenture, particularly
Sections 10.01 to 10.04 thereof. The person signing this
Escrow Agreement on behalf of the Corporation is an Authorized
Representative (as that term is defined in the 1985 Indenture)
of the Corporation, and, pursuant to and only to the extent
permitted by Section 10.04 of the 1985 Indenture, hereby
requests that any unclaimed moneys held in the Escrow Fund for
the payment of the principal or Redemption Price of, or
interest on, the 1985 Bonds shall be repaid to the City, for
the account of the Corporation, free from the trust created by
the 1985 Indenture and this Escrow Agreement, all in
accordance with and subject to the terms and conditions
specified in said Section 10.04.
Section 6. Fees and Costs.
(a) The Bank's total fees and costs for an in
carrying out the provisions of this Agreement are as set forth
in a letter from the Bank to the Corporation dated as
of , 1989, which amount shall be paid by the
Corporation at the time of delivery of the 1989 Bonds.
(b) The Bank shall also be entitled to additional
fees and reimbursements from the Corporation for reasonable
costs incurred, including but not limited to legal and
accountants' services, in connection with any litigation which
may at any time be instituted involving this Agreement.
(c) The fees of and the costs incurred by the Bank
shall in no event be deducted from the Escrow Fund.
Section 7. Severability. If any section,
paragraph, sentence, clause or provision of this Agreement
shall for any reason be held to be invalid or unenforceable,
the invalidity or unenforceability of such section, paragraph,
sentence, clause or provision shall not affect any of the
remaining provisions of this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this
Agreement to be executed each on its behalf as of the day and
year first above written.
CITY OF SAN BERNARDINO
By
Attest:
City Clerk
SAN BERNARDINO COMMUNITY HOSPITAL
By
President
Attest:
Secretary
SECURITY PACIFIC NATIONAL BANK
By
SCHEDULE I
A. Cash
B. Escrow Securities
United States Treasury Certificates of Indebtedness - State
and Local Government Series, as follows:
Principal
Amount
Interest
Rate
Issue
Date
Maturity
Date
United States Treasury Notes - State and Local Government
Series, as follows:
Principal
Amount
Interest
Rate
Issue
Date
Maturity
Date
First Interest
Payment Date
22l9m5
OH&S
DRAFT
10/11/89
CITY OF SAN BERNARDINO
and
SECURITY PACIFIC NATIONAL BANK,
as Trustee
INDENTURE
Dated as of November I, 1989
CITY OF SAN BERNARDINO
HOSPITAL REVENUE REFUNDING BONDS
(SAN BERNARDINO COMMUNITY HOSPITAL)
SERIES 1989
Section
TABLE OF CONTENTS
Page
Parties
Preambles . .
Form of Bond
1. 01
1. 02
2.01
2.02
2.03
2.04
2.05
2.06
2.07
2.08
2.09
3.01
3.02
3.03
3.04
3.05
4.01
4.02
4.03
4.04
4.05
1
1
ARTICLE I
DEFINITIONS; CONTENT OF
CERTIFICATES AND OPINIONS
Definitions . . . . .. ....
Content of Certificates and Opinions
1
ARTICLE II
THE BONDS
Authorization of Bonds
Terms of Bonds .
Execution of Bonds
Transfer of Bonds
Exchange of Bonds
Bond Register
Temporary Bonds
Bonds Mutilated, Lost,
Use of Depository
Destroyed or Stolen
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Issuance of Bonds . . . . . . .
Application of Proceeds of Bonds
Establishment and Application of
Establishment and Application of
Issuance Fund
Validity of Bonds . . . .
Escrow Fund
Costs of
ARTICLE IV
REDEMPTION OF BONDS
Terms of Redemption
Selection of Bonds for Redemption
Notice of Redemption .
Partial Redemption of Bond
Effect of Redemption . . .
2206m5/2l66m5
1
Section
5.01
5.02
5.03
5.04
5.05
5.06
5.07
5.08
5.09
6.01
6.02
6.03
6.04
6.05
6.06
6.07
6.08
6.09
7.01
7.02
7.03
7.04
7.05
7.06
7.07
7.08
7.09
7.10
ARTICLE V
REVENUES
Pledge and Assignment; Revenue Fund
Allocation of Revenues . . . .
Application of Interest Account
Application of Principal Account
Application of Bond Reserve Account
Application of Redemption Fund .
Rebate Fund . . . .
Investment of Moneys in Funds and Accounts
Establishment and Application of
Depreciation Reserve Fund
ARTICLE VI
PARTICULAR COVENANTS
Punctual Payment .
Extension of Payment of Bonds
Against Encumbrances
Power to Issue Bonds and Make Pledge and
Assignment . .
Accounting Records and Financial Statements
Tax Covenants
Other Covenants
Waiver of Laws .
Further Assurances
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS
Events of Default . . . .
Acceleration of Maturities . . .
Application of Revenues and Other
Funds After Default
Trustee to Represent Bondholders .
Bondholders' Direction of Proceedings
Limitation on Bondholders' Right to Sue
Absolute Obligation of City
Termination of Proceedings
Remedies Not Exclusive
No Waiver of Default .
2206m5/2166m5
ii
Page
Section
8.01
8.02
8.03
8.04
8.05
9.01
9.02
9.03
9.04
10.01
10.02
10.03
10.04
11.01
11. 02
11. 03
11. 04
11. 05
11. 06
11.07
11.08
11. 09
11. 10
11. 11
11. 12
11.13
11.14
11.15
11.16
Page
ARTICLE VIII
THE TRUSTEE
Duties, Immunities and Liabilities of Trustee
Merger or Consolidation . . . . .
Liability of Trustee . . . . . . .
Right of Trustee to Rely on Documents
Preservation and Inspection of Documents
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
Amendments Permitted . . . . . .
Effect of Supplemental Indenture
Endorsement of Bonds; Preparation of New Bonds
Amendment of Particular Bonds . . .
ARTICLE X
DEFEASANCE
Discharge of Indenture . . . . . . . . . . .
Discharge of Liability on Bonds . . . . . .
Deposit of Money or Securities with Trustee
Payment of Bonds After Discharge of Indenture
ARTICLE XI
MISCELLANEOUS
Liability of City Limited to Revenues . . . .
Successor is Deemed Included in All References to
Predecessor . . . . . . .
Limitation of Rights to Parties, the
Corporation and Bondholders
Waiver of Notice. . . . . . . .
Destruction of Bonds . . . . . .
Severability of Invalid provisions
Notice to City, Corporation and Trustee
Evidence of Rights of Bondholders
Disqualified Bonds. . . . . . .
Money Held for Particular Bonds
Funds and Accounts . . . . .
Article and Section Headings and References
Waiver of Personal Liability. .
Execution in Several Counterparts
Governing Law ....
Opinions of Bond Counsel . . . . .
2206m5/2166m5
111
Section
Execution
Exhibit A:
Exhibit B:
2206m5/2166m5
Page
Property Description
Permitted Encumbrances
iv
THIS INDENTURE, made and entered into as of the
first day of November, 1989, by and between CITY OF SAN
BERNARDINO, a municipal corporation and charter city, duly
organized and existing under and by virtue of the
Constitution and laws of the State of California (the
"City"), and SECURITY PACIFIC NATIONAL BANK, a national
banking association duly organized and existing under the
laws of the United States and having a corporate trust office
in Los Angeles, California, and being qualified to accept and
administer the trusts hereby created (the "Trustee");
WIT N E SSE T H:
WHEREAS, the City is a municipal corporation and
charter city, duly organized and existing under a
freeholders' charter pursuant to which the City has the right
and power to make and enforce all laws and regulations in
respect to municipal affairs and certain other matters in
accordance with and as more particularly provided in
sections 3, 5 and 7 of article XI of the Constitution of the
State of California and Section 40 of the charter of the City
(the "Charter");
WHEREAS, the City Council of the City, acting under
and pursuant to the powers reserved to the City under
sections 3, 5 and 7 of article XI of the Constitution of the
State of California and Section 40 of the Charter, has
enacted and amended Ordinance No. 3815 of the City (the
"Law"), establishing a program and procedure for the
authorization, sale and issuance of revenue bonds by the City
for the purpose, inter alia, of providing financing and
refinancing for health facilities as provided herein;
WHEREAS, for the benefit of San Bernardino
Community Hospital, a California nonprofit corporation (the
"Corporation"), the City issued its Insured Hospital Revenue
Bonds (San Bernardino Community Hospital) Series 1989 (the
"Prior Bonds");
WHEREAS, the Corporation has requested the
assistance of the City in the refunding of the Prior Bonds;
WHEREAS, after due investigation and deliberation,
the City has approved said request and authorized the
issuance of its Hospital Revenue Refunding Bonds (San
Bernardino Community Hospital), Series 1989 (the "Bonds"), in
the aggregate principal amount of million dollars
($__,000,000), to provide such assistance to the Corporation
in accordance with the Law;
2166m5/2206m5(3264a)
WHEREAS, the City has duly entered into a loan
agreement with the Corporation specifying the terms and
conditions of a loan by the City to the Corporation of the
proceeds of the Bonds to provide for the refunding of the
Prior Bonds and of the payment by the Corporation to the City
of amounts sufficient for the payment of the principal of and
premium (if any) and interest on the Bonds and certain
related expenses;
WHEREAS, in order to provide for the authentication
and delivery of the Bonds, to establish and declare the terms
and conditions upon which the Bonds are to be issued and
secured and to secure the payment of the principal thereof
and premium (if any) and interest thereon, the City has
authorized the execution and delivery of this Indenture;
WHEREAS, the Bonds, the Trustee's certificate of
authentication and registration form to appear thereon, and
assignment to appear thereon, shall be in substantially the
following forms, respectively, with necessary or appropriate
variations, omissions and insertions, as permitted or
required by this Indenture:
2
2166m5/2206m5-041132-000003-277
10/12/89
[FORM OF SERIES 1989 BOND]
[Form of Front of Bond]
Amount
No. R
$
CITY OF SAN BERNARDINO
INSURED HOSPITAL REVENUE REFUNDING BONDS
(SAN BERNARDINO COMMUNITY HOSPITAL)
SERIES 1989
INTEREST RATE
MATURITY DATE
DATED DATE
CUSIP
November 1, 1989
REGISTERED HOLDER:
PRINCIPAL AMOUNT:
DOLLARS
CITY OF SAN BERNARDINO, a municipal corporation and
charter city, duly organized and existing under the
Constitution and laws of the State of California (herein
called the "City"), for value received, hereby promises to
pay (but only out of the Revenues and other assets pledged
therefor as hereinafter mentioned) to the registered holder
stated above, or registered assigns, on the maturity date set
forth above (subject to any right of prior redemption
hereinafter mentioned), the principal amount stated above in
lawful money of the United States of America; and to pay
interest thereon in like lawful money from the interest
payment date next preceding the date of registration of this
Bond (unless this Bond is registered between a Record Date
(as hereinafter defined) and the close of business on the
next succeeding interest payment date, in which event it
shall bear interest from such interest payment date, or
unless this Bond is registered on or prior to May 15, 1990,
in which event it shall bear interest from November 1, 1989)
until payment of such principal sum shall be discharged as
provided in the Indenture hereinafter mentioned, at the rate
per annum set forth above, payable semiannually on June 1 and
December 1 in each year commencing June 1, 1990. The
principal (or redemption price) hereof is payable at the
principal corporate trust office of Security Pacific National
Bank (herein called the "Trustee"), in Los Angeles,
California. Interest hereon is payable by check or draft
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mailed to the person whose name appears on the registration
books of the Trustee as of the close of business on the
fifteenth day of each May and November preceding an interest
payment date (herein called the "Record Date") at such
person's address as shown on such registration books.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS
OF THIS BOND SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER
PROVISIONS HAVE THE SAME EFFECT AS IF SET FORTH HERE.
It is hereby certified and recited that any and all
conditions, things and acts required to exist, to have
happened and to have been performed precedent to and in the
issuance of this Bond do exist, have happened and have been
performed in due time, form and manner as required by the Law
(as hereinafter defined), and by the Constitution and laws of
the State of California, and that the amount of this Bond,
together with all other indebtedness of the City, does not
exceed any limit prescribed by the Law, or by the
Constitution and laws of the State of California, and is not
in excess of the amount of Bonds permitted to be issued under
the Indenture.
This Bond shall not be entitled to any benefit
under the Indenture, or become valid or obligatory for any
purpose, until the certificate of authentication and
registration hereon endorsed shall have been signed by the
Trustee.
IN WITNESS WHEREOF, CITY OF SAN BERNARDINO has
caused this Bond to be executed in its name and on its behalf
by the facsimile signature of its Mayor and its seal to be
reproduced hereon by facsimile and attested by the facsimile
signature of its City Clerk.
CITY OF SAN BERNARDINO
By
Mayor
(SEAL)
Attest:
City Clerk
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[FORM OF TRUSTEE'S CERTIFICATE
OF AUTHENTICATION AND REGISTRATION]
This is one of the Bonds described in the within-
mentioned Indenture which has been registered on the date set
forth below.
Dated:
Security Pacific National Bank,
as Trustee
By
Authorized Officer
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[Form of Back of Bond]
This Bond is one of a duly authorized issue of
bonds of the City designated as "Hospital Revenue Refunding
Bonds (San Bernardino Community Hospital) Series 1989"
(herein called the "Bonds"), limited in aggregate principal
amount to dollars ($ ) and, issued pursuant
to the provisions of Ordinance No. 3815 of the City as
amended (herein called the "Law"), and pursuant to an
indenture, dated as of November 1, 1989, between the City and
the Trustee (herein called the "Indenture"). The Bonds are
issued for the purpose of making a loan to San Bernardino
Community Hospital (herein called the "Corporation") for the
purposes and on the terms and conditions set forth in a loan
agreement, dated as of November 1, 1989, between the City and
the Corporation (herein called the "Loan Agreement").
Reference is hereby made to the Indenture (a copy
of which is on file at said office of the Trustee) and all
indentures supplemental thereto and to the Law for a
description of the rights thereunder of the registered owners
of the Bonds, of the nature and extent of the security, of
the rights, duties and immunities of the Trustee and of the
rights and obligations of the City thereunder, to all the
provisions of which Indenture the registered owner of this
Bond, by acceptance hereof, assents and agrees. All
capitalized terms herein not otherwise defined shall have the
meaning ascribed to then in the Indenture.
The Bonds and the interest thereon are payable from
Revenues (as that term is defined in the Indenture) and are
secured by a pledge and assignment of said Revenues and of
amounts held in the funds and accounts established pursuant
to the Indenture (including proceeds of the sale of the
Bonds), subject only to the provisions of the Indenture
permitting the application thereof for the purposes and on
the terms and conditions set forth in the Indenture. The
Bonds are further secured by an assignment of the right,
title and interest of the City in the Loan Agreement (to the
extent and as more particularly described in the Indenture).
The Bonds are limited obligations of the City and
are not a lien or charge upon the funds or property of the
City, except to the extent of the aforesaid pledge and
assignment. Neither the faith and credit nor the taxing
power of the City is pledged to the payment of the principal
of, premium, if any, or interest on the Bonds, nor is the
City in any manner obligated to make appropriation for
payment. The Bonds are not a debt of the City or the State
of California and said City and State are not liable for the
payment thereof.
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The Bonds are subject to redemption prior to their
stated maturity as a whole on any date (or in part on any
interest payment date) from certain moneys derived from
insurance or condemnation proceeds received with respect to
the Facilities (as that term is defined in the Indenture), in
each case under the circumstances prescribed and as provided
in the Indenture, at the principal amount thereof and
interest accrued thereon to the date fixed for redemption,
without premium.
The Bonds are also subject to redemption prior to
their stated maturity, at the option of the City, from any
source of available funds, as a whole on any date, or in part
(by lot) on any interest payment date, on or after December
1, 1999, at the following redemption prices (expressed as a
percentage of the principal amount of Bonds called for
redemption), together with interest accrued thereon to the
date fixed for redemption:
Period (both dates inclusive)
Redemption
Price
December 1, 1999 through November 30, 2000
December 1, 2000 through November 30, 2001
December 1, 2001 and thereafter
102 %
101
100
The Bonds maturing on December 1, 2009 and December
1, 2019 are also subject to redemption prior to their
respective stated maturities in part, by lot, on any December
1 on or after December 1, 2000 and December 1, 2010,
respectively, from Mandatory Sinking Account Payments
deposited in the Sinking Account as provided in the
Indenture, at the principal amount thereof together with
interest accrued thereon to the date fixed for redemption,
without premium.
If this Bond is called for redemption and payment
is duly provided therefor as specified in the Indenture,
interest shall cease to accrue hereon from and after the date
fixed for redemption.
If an Event of Default (as that term is defined in
the Indenture) shall occur, the principal of all Bonds may be
declared due and payable upon the conditions, in the manner
and with the effect provided in the Indenture. The Indenture
provides that in certain events such declaration and its
consequences may be rescinded by the holders of not less than
a majority in aggregate principal amount of the Bonds then
outstanding or by the Trustee.
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The Bonds are issuable as fully registered Bonds in
denominations of $5,000 or any integral multiple thereof.
Subject to the limitations and upon payment of the charges,
if any, provided in the Indenture, Bonds may be exchanged, at
said office of the Trustee, for a like aggregate principal
amount of Bonds of the same maturity of other authorized
denominations.
This Bond is transferable by the registered holder
hereof, in person or by his attorney duly authorized in
writing, at said office of the Trustee, but only in the
manner, subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, and upon
surrender and cancellation of this Bond. Upon such transfer
a new registered Bond or Bonds, of authorized denomination or
denominations, of the same maturity for the same aggregate
principal amount, will be issued to the transferee in
exchange herefor.
The City and the Trustee may treat the registered
holder hereof as the absolute owner hereof for all purposes,
and the City and the Trustee shall not be affected by any
notice to the contrary.
The Indenture and the rights and obligations of the
City and of the holders of the Bonds and of the Trustee may
be modified or amended from time to time and at any time in
the manner, to the extent, and upon the terms provided in the
Indenture; provided that no such modification or amendment
shall (i) extend the fixed maturity of this Bond, or reduce
the amount of principal hereof, or extend the time of payment
or reduce the amount of any Mandatory Sinking Account Payment
provided for in the Indenture for the payment of this Bond,
or reduce the rate of interest hereon, or extend the time of
payment of interest hereon, or reduce any premium payable
upon the redemption hereof, without the consent of the holder
hereof, or (ii) reduce the percentage of Bonds the consent of
the holders of which is required to effect any such
modification or amendment, or permit the creation of any lien
on the Revenues and other assets pledged as security for the
Bonds prior to or on a parity with the lien created by the
Indenture, or deprive the holders of the Bonds of the lien
created by the Indenture on such Revenues and other assets
(except as expressly provided in the Indenture), without the
consent of the holders of all Bonds then outstanding, all as
more fully set forth in the Indenture.
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[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby
sell, assign and transfer unto
whose social security or other tax identification number is
, the within-mentioned Bond and hereby
irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the books of the
Trustee with full power of substitution in the premises.
Dated:
Signature Guaranteed By:
Note: Signature must be
guaranteed by a member of the
New York Stock Exchange or a
commercial bank or trust company.
Notice: The signature on this assignment must correspond with
the name as it appears on the face of this Bond in every
particular, without alteration, enlargement or any change
whatsoever.
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WHEREAS, all acts and proceedings required by law
necessary to make the Bonds, when executed by the City,
authenticated and delivered by the Trustee and duly issued,
the valid, binding and legal limited obligations of the City,
and to constitute this Indenture a valid and binding
agreement for the uses and purposes herein set forth In
accordance with its terms, have been done and taken, and the
execution and delivery of the Indenture have been in all
respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in
order to secure the payment of the principal of, and the
interest and premium, if any, on, all Bonds at any time
issued and outstanding under this Indenture, according to
their tenor, and to secure the performance and observance of
all the covenants and conditions therein and herein set
forth, and to declare the terms and conditions upon and
subject to which the Bonds are to be issued and received, and
in consideration of the premises and of the mutual covenants
herein contained and of the purchase and acceptance of the
Bonds by the holders thereof, and for other valuable
consideration, the receipt whereof is hereby acknowledged,
the City does hereby covenant and agree with the Trustee, for
the benefit of the respective holders from time to time of
the Bonds, as follows:
ARTICLE I
DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS
SECTION 1.01. Definitions. Unless the context
otherwise requires, the terms defined in this Section shall,
for all purposes of this Indenture and of any indenture
supplemental hereto and of any certificate, opinion or other
document herein mentioned, have the meanings herein
specified, to be equally applicable to both the singular and
plural forms of any of the terms herein defined. Unless
otherwise defined in this Indenture, all terms used herein
shall have the meanings assigned to such terms in the Law.
Accountant
"Accountant" means any independent certified public
accountant or firm of such accountants of national reputation
selected by the Corporation and acceptable to the Trustee.
Additional Payments
"Additional Payments" means the payments so
designated and required to be made by the Corporation
pursuant to Section 4.2 of the Agreement.
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Adjusted Annual Operating Revenues
"Adjusted Annual Operating Revenues" means gross
operating revenue and investment income, less adjustments for
bad debts for any Fiscal Year, all related to the Facilities
and as determined in accordance with generally accepted
accounting principles.
Administrative Fees and Expenses
"Administrative Fees and Expenses" means any
application, commitment, financing or similar fee charged, or
reimbursement for administrative or other expenses incurred,
by the City or the Trustee, including Additional Payments.
Affiliated Corporation
"Affiliated Corporation" means any corporation
which directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under common
control with the Corporation.
Aggregate Debt Service
"Aggregate Debt Service" means, as of any date of
calculation and with respect to any period, the sum of
amounts of Debt Service for all Funded Debt for such period.
Agreement or Loan Agreement
"Agreement" or "Loan Agreement" means that certain
loan agreement by and between the City and the Corporation,
dated as of November 1, 1989, as originally executed and as
it may from time to time be supplemented, modified or amended
in accordance with the terms thereof and of this Indenture.
Architects' Certificate
"Architects' Certificate" means a certificate
signed by a duly authorized officer or agent of the
architects, engineers or supervising contractors licensed in
the State of California and selected by the Corporation in
connection with installation or construction.
Authorized Representative
"Authorized Representative" means, with respect to
the Corporation, its Chairman of the Board, Chief Executive
Officer or Chief Financial Officer or any other person
designated as an Authorized Representative of the Corporation
by a Certificate of the Corporation signed by its Chairman of
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the Board, Chief Executive Officer or Chief Financial Officer
and filed with the Trustee.
Average Annual Bond Service
"Average Annual Bond Service" means, as of any date
of calculation, the sum for each Bond Year, of (1) the
interest falling due on then Outstanding Bonds (assuming that
all the Outstanding Serial Bonds are retired on their
respective maturity dates and that all then Outstanding Term
Bonds are retired at the times of and in amounts provided for
by Mandatory Sinking Account Payments), (2) the principal
amount of then Outstanding Serial Bonds falling due by their
terms, and (3) the amount of all Mandatory Sinking Account
Payments required for each Bond Year in which such Bonds will
be Outstanding, divided by the number of Bond Years such
Bonds will be Outstanding.
Bond Reserve Account
"Bond Reserve Account" means the account by that
name ln the Revenue Fund established pursuant to Section 5.02.
Bond Reserve Account Requirement
"Bond Reserve Account Requirement" means as of any
date of calculation, an amount equal to the least of
(i) Maximum Annual Bond Service, (ii) one hundred twenty-five
percent (125%) of Average Annual Bond Service or (iii) ten
percent (10%) of the principal amount of Bonds Outstanding as
of such date.
Bond Year
"Bond Year" means the period of twelve consecutive
months ending on December 1 in any year in which Bonds are
Outstanding.
Bonds, Serial Bonds, Term Bonds
"Bonds" means the City's Hospital Revenue Refunding
Bonds (San Bernardino Community Hospital) Series 1989,
authorized by, and at any time Outstanding pursuant to, this
Indenture.
"Serial Bonds" means the Bonds, falling due by
their terms in specified years, for which no Mandatory
Sinking Account Payments are provided.
"Term Bonds" means the Bonds payable at or before
their specified maturity date or dates from Mandatory Sinking
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Account Payments established for that purpose and calculated
to retire such Bonds on or before their specified maturity
date or dates.
Certificate, Statement, Request, Requisition or Order of the
City or the Corporation
"Certificate," "Statement," "Request,"
"Requisition" and "Order" of the City or the Corporation
mean, respectively, a written certificate, statement,
request, requisition or order signed in the name of the City
by its Mayor, City Administrator and Executive Director of
the Redevelopment Agency of the City of San Bernardino or
such other person as may be designated and authorized to sign
for the City, or in the name of the Corporation by an
Authorized Representative of the Corporation. Any such
instrument and supporting opinions or representations, if
any, may, but need not, be combined in a single instrument
with any other instrument, opinion or representation, and the
two or more so combined shall be read and construed as a
single instrument. If and to the extent required by Section
1.02, each such instrument shall include the statements
provided for in Section 1.02.
City
"City" means the City of San Bernardino, a
municipal corporation and charter city, duly organized and
existing under the Constitution and laws of the State of
California.
City Administration Fee
"City Administration Fee" means the fee paid to the
City upon the issuance of the Bonds in the amount of one
percent (1%) of the original principal amount of the Bonds,
which is subject to return to the Trustee as required by
Section 3.04 hereof.
Code
"Code" means the Internal Revenue Code of 1986, and
any regulations promulgated thereunder.
Corporation
"Corporation" means San Bernardino Community
Hospital, a nonprofit public benefit corporation duly
organized and existing under the laws of the State of
California, or any corporation which is the surviving,
resulting or transferee corporation in any merger,
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consolidation or transfer of assets permitted under the
Agreement.
Costs of Issuance
"Costs of Issuance" means all items of expense
directly or indirectly payable by or reimbursable to the City
or the Corporation and related to the authorization,
issuance, sale and delivery of the Bonds, including but not
limited to costs of preparation and reproduction of
documents, filing and recording fees, initial fees and
charges of the Trustee, legal fees and charges, fees and
disbursements of consultants and professionals, fees and
charges for preparation, execution and safekeeping of the
Bonds, [the City Administration Fee] and any other cost,
charge or fee in connection with the original issuance of the
Bonds.
Costs of Issuance Fund
"Costs of Issuance Fund" means the fund by that
name established pursuant to Section 3.04.
Council
"Council" means the Common Council of the City.
Debt Service
"Debt Service," when used with respect to any
Funded Debt, means, as of any date of calculation and with
respect to any period, the sum of (1) the interest falling
due on such Funded Debt during such period (except to the
extent that such interest is payable from the proceeds of
such Funded Debt set aside for such purpose), and (2) the
principal (or mandatory sinking fund or installment purchase
price or lease rental or similar) payments or deposits
required with respect to such Funded Debt during such period;
computed on the assumption that no portion of such Funded
Debt shall cease to be outstanding during such period except
by reason of the application of such scheduled payments;
provided, however, that for purposes of such computation:
(a) if Funded Debt is secured by an irrevocable
letter of credit issued by a bank having a combined capital
and surplus of at least one hundred million dollars
($100,000,000), principal payments or deposits with respect
to such Funded Debt nominally due in the last Fiscal Year in
which such Funded Debt matures may, at the option of the
Corporation, be treated as if they were due as specified ln
any loan agreement issued in connection with such letter of
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credit or pursuant to the repayment provisions of such letter
of credit and interest on such Funded Debt after such Fiscal
Year shall be assumed to be payable pursuant to the terms of
such loan agreement or repayment provisions;
(b) if interest on Funded Debt (including interest
on Funded Debt assumed to be payable in accordance with the
terms of a loan agreement or the repayment provisions of a
letter of credit as described above) is payable pursuant to a
variable interest rate formula, the interest rate on such
Funded Debt for periods when the actual interest rate cannot
be yet determined shall be assumed to be equal to the
greatest of (i) the average rate of interest borne or which
would have been borne by such Funded Debt during the Fiscal
Year immediately preceding the date of calculation, (ii) the
current interest rate calculated pursuant to the provisions
of such agreement and (iii) 65% of the Trustee's prime
interest rate as of the date of calculation;
(c) if Funded Debt is refinanced on maturity or
earlier redemption, the principal of such Funded Debt shall
not be deemed to be payable on the date of such refinancing
but shall be payable pursuant to the terms of the refinancing
of such Funded Debt;
(d) if any Funded Debt is not payable with
substantially level debt service or is redeemable at the
option of the holder prior to maturity, such Funded Debt may,
at the option of the Corporation, be treated as if the
outstanding principal amount of such Funded Debt were
amortized over a 15-year period commencing on the date of
calculation with an interest rate equal to the Trustee's
prime interest rate as of the date of calculation;
(e) if any Funded Debt is a guaranty of another
Person's indebtedness:
(1) if such Person's obligation to repay the
Corporation for advances made under such guaranty is
secured directly or by right of subrogation by lien on
real or personal property (subject only to liens
directly securing such underlying obligation), 25% of
the debt service on the underlying obligation shall be
included in the computation of Debt Service to the
extent that the principal amount of such obligation is
less than or equal to the fair market value of such
property and 100% of the Debt Service on the underlying
obligation shall be included to the extent that the
principal amount of such obligation exceeds the fair
market value of such property.
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(2) if the guaranty is not so secured but Net
Income Available for Debt Service of the guaranteed
Person is at least equal to 1.50 times Maximum Aggregate
Annual Debt Service on all Funded Debt of such Person
(including the Funded Debt to be guaranteed) for such
Person's immediately preceding fiscal year, 50% of the
Debt Service on the underlying obligation shall be
included in such computation; or
(3) otherwise 100% of the Debt Service on the
underlying obligation shall be included in such
computations; and
(f) if interest income payable during any period
on Investment Securities described in clauses (1) or (2) of
the definition thereof which are in the actual possession of
the Trustee (or independent trustee acting on behalf of the
holders of such Funded Debt or the Trustee) is available for
the payment of interest on Funded Debt during such period the
interest falling due on Funded Debt shall be reduced by the
amount of such interest income.
Debt Service Coverage Ratio
"Debt Service Coverage Ratio" means with respect to
any period the ratio of Net Income Available for Debt Service
to Maximum Aggregate Annual Debt Service for such period.
Depository
"Depository" shall mean The Depository Trust
Company and its successors and assigns, or any other
depository selected as set forth in Section 2.09 hereof,
which agrees to follow the procedures required to be followed
by such depository in connection with the Bonds.
Depository Bank
"Depository Bank" means any of the banks or
financial institutions so designated pursuant to Section 4.4
of the Agreement.
Depreciation Reserve Fund
"Depreciation Reserve Fund" means the Fund by that
name established pursuant to Section 5.09.
Escrow Agreement
"Escrow Agreement" means that certain escrow
agreement by and among the Corporation, Security Pacific
National Bank and the City dated as of November 1, 1989, as
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2l6t ~ '~206m5-04ll32-000003-277
lO/J2/d'
originally executed and as it may from time to time be
supplemented, modified or amended in accordance with the
terms thereof.
Escrow Fund
"Escrow Fund" means the Fund by that name
established pursuant to Section 3.03 hereof.
Event of Default
"Event of Default" means any of the events
specified in Section 7.01.
Facilities
"Facilities" means (i) the real property described
in Exhibit A to this Indenture; (ii) all buildings,
structures and fixtures thereon and improvements thereto; and
(iii) all tangible personal property owned by the Corporation
and used in or on the aforesaid real property, whether now
existing or hereafter constructed, installed or acquired.
Fiscal Year
"Fiscal Year" means the period beginning on July 1
of each year and ending on the next succeeding June 30, or
any other twelve-month period hereafter selected and
designated as the official fiscal year period of the
Corporation.
Funded Debt
"Funded Debt" means (a) twenty-five percent (25%)
by outstanding principal amount of all indebtedness of
persons other than the Corporation or any Affiliated
Corporation described in clause (b) hereof for which the
Corporation is a guarantor, provided however that the
Corporation shall not be deemed to be a guarantor for
purposes of this clause (a) by reason of the "indorsement" of
any "check" by the Corporation as such terms are used in
Division 3 of the California Commercial Code, (b) all
indebtedness of any Affiliated Corporation for which the
Corporation is a guarantor, provided that the Net Income
Available for Debt Service of such Affiliated Corporation
shall be included in calculations required by the Agreement
and the Indenture if Debt Service with respect to such
indebtedness is included in such calculations, and (c) all
indebtedness of the Corporation (including the obligation of
the Corporation to make Loan Repayments, any installment
purchase and lease rental obligations and Parity Debt) which
(i) in accordance with generally accepted accounting
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principles is classified as a liability on a balance sheet
and (ii) has a final maturity (or which, pursuant to the
terms of a revolving credit or similar agreement or
otherwise, is renewable or extendable at the option of the
Corporation to a date or for a period or periods ending) more
than one year after the date of creation thereof,
notwithstanding the fact that payments in respect thereof
(whether installment, serial maturity or sinking fund
payments or otherwise) are required to be made less than one
year after the date of the creation thereof, excluding any
indebtedness which is renewable or extendable pursuant to the
terms of a revolving credit or similar agreement if, by the
terms of such agreement, no indebtedness is permitted to be
outstanding thereunder for a period of at least thirty (30)
consecutive days during each period of twelve (12)
consecutive months beginning with the effective date of such
revolving credit or other similar agreement.
Gross Revenue Fund
"Gross Revenue Fund" means the fund by that name
established pursuant to Section 4.4 of the Agreement.
Gross Revenues
"Gross Revenues" means all revenues, income,
receipts and money received by or on behalf of the
Corporation with respect to the Facilities, including
(a) gross revenues derived from its operation and possession
of the Facilities, (b) gifts, grants, bequests, donations and
contributions allocated to the Facilities exclusive of any
gifts, grants, bequests, donations and contributions to the
extent specifically restricted by the donor to a particular
purpose inconsistent with their use for the payment of Loan
Repayments or Additional Payments or payments with respect to
Parity Debt, (c) proceeds with respect to or relating to the
Facilities and derived from (i) condemnation proceeds,
(ii) accounts receivable, (iii) securities and other
investments, (iv) inventory and other tangible and intangible
property, (v) insurance proceeds, (vi) medical reimbursement
programs and agreements, and (vii) contract rights and other
rights and assets owned by the Corporation, and (d) rentals
received with respect to the lease of space within the
Facilities.
Holder or Bondholder
"Holder" or "Bondholder," whenever used herein with
respect to a Bond means the person in whose name such Bond is
registered.
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Indenture
"Indenture" means this Indenture, as originally
executed or as it may from time to time be supplemented,
modified or amended by any Supplemental Indenture.
Information Services
"Information Services" means Financial Information,
Inc. 's "Daily Called Bond Service," 30 Montgomery Street,
lOth Floor, Jersey City, New Jersey 07302, Attention:
Editor; Kenny Information Services "Called Bond Service,"
55 Broad Street, 28th Floor, New York, New York, 10004;
Moody's "Municipal and Government," 99 Church Street, 8th
Floor, New York, New York 10007, Attention: Municipal News
Reports; and Standard and Poor's "Called Bond Record,"
25 Broadway, 3rd Floor, New York, New York 10004; or, in
accordance with then current guidelines of the Securities and
Exchange Commission, to such other addresses and/or such
other services providing information with respect to called
bonds, or no such services, as the City may designate in a
Request of the City delivered to the Trustee.
Insurance and Condemnation Proceeds Fund
"Insurance and Condemnation Proceeds Fund" means
the fund by that name established pursuant to Section 6.6 of
the Agreement.
Insurance Consultant
"Insurance Consultant" means a person having
experience and a favorable reputation in consulting on the
insurance requirements of facilities in the State of
California of the general size and character of the
Facilities, selected by the Corporation and acceptable to the
Trustee.
Interest Account
"Interest Account" means the account by that name
in the Revenue Fund established pursuant to Section 5.02.
Investment Securities
"Investment Securities" means any of the following
which at the time are legal investments under the laws of the
State of California for moneys held hereunder and then
proposed to be invested therein: (1) direct obligations of
the United States of America (including obligations issued or
held in book-entry form on the books of the Department of the
Treasury of the united States of America and including
certificates or other instruments evidencing ownership
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interests in direct obligations of the United States of
America such as CATS, TIGRS, Treasury Receipts and Stripped
Treasury Coupons) or obligations the timely payment of the
principal of and interest on which are fully guaranteed by
the United States of America; (2) obligations, debentures,
notes or other evidence of indebtedness issued or guaranteed
by any of the following: Banks for Cooperatives, Federal
Intermediate Credit Banks, Federal Home Loan Bank System,
Export-Import Bank of the United States, Federal Financing
Bank, Federal Land Banks, Federal Farm Credits, Government
National Mortgage Association, Farmer's Home Administration,
Federal Home Loan Mortgage Corporation, Federal Housing
Administration or by any agency, department or
instrumentality of the United States if such obligations are
rated in one of the two highest rating categories by S&P and
Moody's; (3) bankers acceptances and interest-bearing demand
or time deposits (including certificates of deposit) in banks
(including the Trustee) and savings and loan associations,
provided such deposits are either (a) secured at all times,
in the manner and to the extent provided by law, by
collateral security described in clauses (1) or (2) of this
definition of a market value of no less than the original
amount of moneys so invested or (b) in any bank (including
the Trustee) or savings and loan association having a
combined capital and surplus of at least fifty million
dollars ($50,000,000) or (c) fully insured by the Federal
Deposit Insurance Corporation; (4) bankers acceptances or
certificates of deposit of, or time deposits in, any bank
(including the Trustee), lead bank of a parent holding
company, or savings and loan association whose unsecured
obligations are rated in one of the two highest rating
categories by S&P and Moody's; (5) repurchase agreements or
investments agreements issued by banks (including the
Trustee), lead banks of parent holding companies, or savings
and loan associations, with a combined capital and surplus
aggregating at least one hundred million dollars
($100,000,000) which is insured by the Federal Deposit
Insurance Corporation and the unsecured securities of which
are rated by S&P and Moody's in one of the two highest rating
categories or which is a member of the Securities Investors
Protection Corporation, or secured by a letter of credit
issued by such bank, lead bank or savings and loan
association, or, in the case of a repurchase agreement, the
underlying securities of which are obligations described in
clause (1) or (2) of this definition, are held by the Trustee
free of all third party claims and are required to be
continuously maintained at a market value (valued at least
quarterly) at least equal to the repurchase price from time
to time payable with respect thereto, or, in the case of an
investment agreement, continuously secured and collateralized
by obligations described in clause (1) or (2) of this
definition, held by the Trustee free of all third party
claims and having a market value (valued at least quarterly)
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at least equal to the principal balance collectible pursuant
thereto; (6) commercial paper of "prime" quality of the
highest ranking or one of the two highest rating categories
as provided by S&P and Moody's and issued by corporations
organized and operating within the United States and having
total assets in excess of five hundred million dollars
($500,000,000); (7) obligations the interest on which is
excludable from gross income for federal income tax purposes
and the timely payment of the principal of and interest on
which is fully provided for by the deposit in trust or escrow
of cash or obligations described in clause (1) or (2) of this
definition and which have been rated in the highest ratings
category of both Moody's and S&P; (8) bonds of the State of
California or any county or city of the State of California
for which a nationally recognized rating service is
maintaining a rating within the top two ratings of such
rating service and (9) taxable government money market
portfolios restricted to obligations with maturities of one
year or less, issued or guaranteed as to payment of principal
and interest by the full faith and credit of the United
States of America.
Law
"Law" means Ordinance No. 3815 of the City of San
Bernardino, as amended, as now in effect and as it may from
time to time hereafter be amended or supplemented.
Loan Default Event
"Loan Default Event" means any of the events
specified in Section 8.1 of the Agreement.
Loan Repayments
"Loan Repayments" means the payments so designated
and required to be made by the Corporation pursuant to
Section 4.1 of the Agreement.
Management Consultant
"Management Consultant" means any firm of national
reputation qualified to report on questions relating to the
financial condition of health care facilities and selected by
the Corporation and acceptable to the Trustee.
Mandatory Sinking Account Payment
"Mandatory Sinking Account Payment" means the
amount required by this Indenture to be paid by the City on
any single date for the retirement of Bonds.
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Maximum Aggregate Annual Debt Service
"Maximum Aggregate Annual Debt Service" means, as
of any date of calculation, Aggregate Debt Service as
computed for the then current or any future Fiscal Year in
which such sum shall be largest.
Maximum Annual Bond Service
"Maximum Annual Bond Service" means, as of any date
of calculation, the sum of (1) the interest falling due on
then Outstanding Bonds (assuming that all the Outstanding
Serial Bonds are retired on their respective maturity dates
and that all then Outstanding Term Bonds are retired at the
times of and in amounts provided for by Mandatory Sinking
Account Payments), (2) the principal amount of then
Outstanding Serial Bonds falling due by their terms, and
(3) the amount of all Mandatory Sinking Account Payments
required; all as computed for the Bond Year in which such sum
shall be the largest.
Moody's
"Moody's" means Moody's Investors Service, a
corporation organized and existing under the laws of the
State of Delaware, its successors and their assigns, or, if
such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency,
any other nationally recognized securities rating agency
designated by the Corporation by notice to the City and the
Trustee.
Net Income Available for Debt Service
"Net Income Available for Debt Service" means, with
respect to any period, the excess of revenues over expenses
of the Corporation for such period, determined in accordance
with generally accepted accounting principles, to which shall
be added interest, amortization and depreciation expense and
extraordinary noncash items, each item determined in
accordance with generally accepted accounting principles, and
excluding (a) any profits or losses on the sale or other
disposition, not in the ordinary course of business, of
investments or fixed or capital assets or resulting from the
early extinguishment of debt and (b) gifts, grants, bequests,
donations and contributions, to the extent specifically
restricted by the donor to a particular purpose inconsistent
with their use for the payment of Debt Service, and (c) the
net proceeds of insurance (other than business interruption
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insurance or health care insurance programs (third-party
payors)) and condemnation awards and (d) interest income
credited against the interest component of Debt Service
pursuant to clause (f) of the definition of Debt Service;
provided, however, that in calculating such excess of
revenues over expenses, the amount of all contributions,
grants, gifts, bequests and devises (collectively, the
"Contributions") to be included, if otherwise not excluded by
the terms hereof, shall be calculated as follows: the lesser
of (i) Contributions actually received by the Corporation
during any Fiscal Year or (ii) the Contributions actually
received by the Corporation during such Fiscal Year and
during the preceding four Fiscal Years divided by five.
Net Property, Plant and Equipment
"Net Property, Plant and Equipment" means all
property of the Corporation which is property, plant and
equipment, net of accumulated depreciation, in each case in
accordance with generally accepted accounting principles.
Non-Recourse Indebtedness
"Non-Recourse Indebtedness" means indebtedness
secured by a lien on property of the Corporation, liability
for which is effectively limited to the property subject to
the lien with no recourse, directly or indirectly, to any
other property of the Corporation.
Opinion of Counsel
"Opinion of Counsel" means a written opinion of
counsel (who may be counsel for the City) selected by the
City and acceptable to the Trustee. If and to the extent
required by the provisions of Section 1.02, each Opinion of
Counsel shall include the statements provided for in
Section 1.02.
Optional Redemption Account
"Optional Redemption Account" means the account by
that name in the Redemption Fund established pursuant to
Section 5.06.
Outstanding
"Outstanding," when used as of any particular time
with reference to Bonds, means (subject to the provisions of
Section 11.09) all Bonds theretofore, or thereupon being,
authenticated and delivered by the Trustee under this
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Indenture except (1) Bonds theretofore cancelled by the
Trustee or surrendered to the Trustee for cancellation;
(2) Bonds with respect to which all liability of the City
shall have been discharged in accordance with Section 10.02,
including Bonds (or portions of Bonds) referred to in Section
11.10; and (3) Bonds for the transfer or exchange of or in
lieu of or in substitution for which other Bonds shall have
been authenticated and delivered by the Trustee pursuant to
this Indenture.
Parity Debt
"Parity Debt" means indebtedness incurred by the
Corporation in accordance with Section 5.4 of the Agreement.
Permitted Encumbrances
"Permitted Encumbrances" with respect to the
Facilities means and includes: (1) undetermined liens and
charges incident to construction or maintenance, and liens
and charges incident to construction or maintenance now or
hereafter filed of record which are being contested in good
faith and have not proceeded to judgment, provided that the
Corporation shall have set aside reserves with respect
thereto which, in the opinion of the board of directors of
the Corporation, are adequate; (2) the lien of taxes and
assessments which are not delinquent, or which are being
contested in good faith, provided that the Corporation shall
have set aside reserves with respect thereto which, in the
opinion of the board of directors of the Corporation, are
adequate; (3) minor defects and irregularities in the title
to the Facilities which in the aggregate do not materially
adversely affect the value or operation of the Facilities for
the purposes for which they are or may reasonably be expected
to be used; (4) easements, exceptions or reservations for the
purpose of pipelines, telephone lines, telegraph lines, power
lines and substations, roads, streets, alleys, highways,
railroad purposes, drainage and sewerage purposes, dikes,
canals, laterals, ditches, the removal of oil, gas, coal or
other minerals, and other like purposes, or for the joint or
common use of real property, facilities and equipment, which
in the aggregate do not materially interfere with or impair
the operation of the Facilities for the purposes for which
they are or may reasonably be expected to be used; (5) rights
reserved to or vested in any municipality or governmental or
other public authority to control or regulate or use in any
manner any portion of the Facilities which do not materially
impair the operation of the Facilities for the purposes for
which they are or may reasonably be expected to be used;
(6) present or future valid zoning laws and ordinances;
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(7) the rights of the City and the Trustee under the
Agreement and the Deed of Trust; (8) liens securing
indebtedness for the payment, redemption or satisfaction of
which money (or evidences of indebtedness) in the necessary
amount shall have been deposited in trust with a trustee or
other holder of such indebtedness; (9) the lien and charge of
the Deed of Trust and the Indenture; (10) purchase money
security interests and security interests existing on any
property prior to the time of its acquisition by the
Corporation through purchase, merger, consolidation or
otherwise, whether or not assumed by the Corporation, or
placed upon property being acquired by the Corporation to
secure a portion of the purchase price thereof, or lessor's
interests in leases required to be capitalized in accordance
with generally accepted accounting principles, if the
principal amounts secured by any such interests shall not
exceed the greater of the cost or fair market value thereof
as determined in good faith by the board of directors of the
Corporation; (11) statutory liens arising in the ordinary
course of business which are not delinquent or are being
contested in good faith by the Corporation; (12) liens
securing Parity Debt on a parity with the obligations of the
Corporation under the Agreement; (13) the lease or license of
the use of a part of the Corporation's facilities for the
proper and economical operation of the Facilities in
accordance with customary business practices in the industry;
(14) statutory rights of the United States of America to
recover against the Corporation by reason of federal funds
made available under 42 U.S.C. S 291 et seq., and similar
rights under other federal and state statutes; (15) liens and
encumbrances (a) specifically subordinated to the Deed of
Trust and (b) securing Funded Debt in an aggregate principal
amount not in excess of twenty percent (20%) of Adjusted
Annual Operating Revenues; and (16) liens and encumbrances
described in Exhibit B.
Person
"Person" means an individual, corporation, firm,
association, partnership, trust, or other legal entity or
group of entities, including a governmental entity or any
agency or political subdivision thereof.
Principal Account
"Principal Account" means the account by that name
established in the Revenue Fund pursuant to Section 5.02.
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Principal Installment
"Principal Installment," when used with respect to
any Funded Debt or the Bonds, means, as of any particular
date of calculation and with respect to any period, the
principal (or mandatory sinking fund or installment purchase
price or lease rental or similar) payments required with
respect to such Funded Debt or the Bonds, as the case may be,
during such period.
Prior Bonds
"Prior Bonds" means the City of San Bernardino
Insured Hospital Revenue Bonds (San Bernardino Community
Hospital) Series 1985A.
Prior Indenture
"Prior Indenture" means that certain indenture
dated as of December 1, 1985 by and between the Corporation
and the Trustee with respect to the Prior Bonds.
Program
"Program" means the City's program of making loans
under the Law.
Rebate Certificate
"Rebate Certificate" means the Rebate Certificate
attached as Exhibit A to the No Arbitrage Certificate
delivered by the City at the time of the issuance and
delivery of the Bonds, as the same may be amended or
supplemented in accordance with its terms.
Rebate Fund
"Rebate Fund" means the Rebate Fund established in
Section 5.07 hereof.
Record Date
"Record Date" means, with respect to each interest
payment date, the fifteenth day of the calendar month
preceding such interest payment date.
Redemption Price
"Redemption Price" means, with respect to any Bond
(or portion thereof), the principal amount of such Bond (or
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portion) plus the applicable premium, if any, payable upon
redemption thereof pursuant to the provisions of such Bond
and this Indenture.
Redemption Fund
"Redemption Fund" means the fund by that name
established pursuant to Section 5.06.
Revenue Fund
"Revenue Fund" means the fund by that name
established pursuant to Section 5.01.
Revenues
"Revenues" means all amounts received by the City
or the Trustee pursuant or with respect to the Agreement,
including, without limiting the generality of the foregoing,
Loan Repayments (including both timely and delinquent
payments and any late charges, and whether paid from any
source), prepayments, insurance proceeds, condemnation
proceeds, and all interest, profits or other income derived
from the investment of amounts in any fund or account
established pursuant to this Indenture, but not including any
Administrative Fees or Expenses.
Securities Depositories
"Securities Depositories" means: The Depository
Trust Company, 711 Stewart Avenue, Garden City, New York
11530, Fax-(516) 227-4039 or 4190; Midwest Securities Trust
Company, Capital Structures-Call Notification, 440 South
LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343;
Philadelphia Depository Trust Company, Reorganization
Division, 1900 Market Street, Philadelphia, Pennsylvania
19103, Attention: Bond Department, Dex-(215) 496-5058; or,
in accordance with the then current guidelines of the
Securities and Exchange Commission, to such other addresses
and/or such other securities depositories or no such
depositories as the City may designate in a Request of the
City delivered to the Trustee.
S&P
"S&P" means Standard & Poor's Corporation, a
corporation organized and existing under the laws of the
State of New York, its successors and their assigns, or, if
such corporation shall be dissolved or liquidated or shall no
longer perform the functions of a securities rating agency,
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any other nationally recognized securities rating agency
designated by the Corporation by notice to the City and the
Trustee.
Sinking Account
"Sinking Account" means the subaccount in the
Principal Account so designated and established pursuant to
Section 5.05.
Special Redemption Account
"Special Redemption Account" means the account by
that name in the Redemption Fund established pursuant to
Section 5.06.
Special Services Covenant
"Special Services Covenant," whenever used herein
with respect to the Agreement, means the provision so
designated in the Agreement by which the Corporation agrees
to provide certain health care services.
Supplemental Indenture
"Supplemental Indenture" means any indenture
hereafter duly authorized and entered into between the City
and the Trustee, supplementing, modifying or amending this
Indenture; but only if and to the extent that such
Supplemental Indenture is specifically authorized hereunder.
Trustee
"Trustee" means Security Pacific National Bank, a
national banking association duly organized and existing
under the laws of the United States and having its principal
corporate trust office in Los Angeles, California, or its
successor, as Trustee hereunder as provided in Section 8.01.
SECTION 1.02. Content of Certificates and
Opinions. Every certificate or opinion provided for in this
Indenture with respect to compliance with any provision
hereof shall include (1) a statement that the person making
or giving such certificate or opinion has read such provision
and the definitions herein relating thereto; (2) a brief
statement as to the nature and scope of the examination or
investigation upon which the certificate or opinion is based;
(3) a statement that, in the opinion of such person, he has
made or caused to be made such examination or investigation
as is necessary to enable him to express an informed opinion
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with respect to the subject matter referred to in the
instrument to which his signature is affixed; and (4) a
statement as to whether, in the opinion of such person, such
provision has been complied with.
Any such certificate or opinion made or given by an
officer of the City or the Corporation may be based, insofar
as it relates to legal, accounting or facility matters, upon
a certificate or opinion of or representation by counsel, an
accountant or a management consultant, unless such officer
knows, or in the exercise of reasonable care should have
known, that the certificate, opinion or representation with
respect to the matters upon which such certificate or
statement may be based, as aforesaid, is erroneous. Any such
certificate or opinion made or given by counsel, an
accountant or a management consultant may be based, insofar
as it relates to factual matters (with respect to which
information is in the possession of the City or the
Corporation, as the case may be) upon a certificate or
opinion of or representation by an officer of the City or the
Corporation, unless such counsel, accountant or management
consultant knows, or in the exercise of reasonable care
should have known, that the certificate or opinion or
representation with respect to the matters upon which such
person's certificate or opinion or representation may be
based, as aforesaid, is erroneous. The same officer of the
City or the Corporation, or the same counselor accountant or
management consultant, as the caSe may be, need not certify
to all of the matters required to be certified under any
provision of this Indenture, but different officers, counsel,
accountants or management consultants may certify to
different matters, respectively.
ARTICLE II
THE BONDS
SECTION 2.01. Authorization of Bonds. An issue of
Bonds to be issued hereunder in order to obtain moneys to
carry out the purposes of the Program for the benefit of the
City and the Corporation is hereby created. The Bonds are
designated as "City of San Bernardino Hospital Revenue
Refunding Bonds (San Bernardino Community Hospital) Series
1989." The aggregate principal amount of Bonds which may be
issued and Outstanding under this Indenture shall not exceed
million dollars ($__,000,000). This Indenture constitutes a
continuing agreement with the Holders from time to time of
the Bonds to secure the full payment of the principal (or
Redemption Price) of and interest on all such Bonds subject
to the covenants, provisions and conditions herein contained.
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SECTION 2.02. Terms of Bonds. The Bonds shall be
issued as fully registered Bonds in the denomination of
$5,000 or any integral multiple thereof. The Bonds shall be
registered initially in the name of "Cede Co.," as nominee of
the Depository, and shall be evidenced by one Bond for each
maturity of the Bonds in the aggregate principal amount of
each such maturity. The Bonds shall be dated as of
November 1, 1989, and interest thereon shall be payable
semiannually on June 1 and December 1 in each year,
commencing June 1, 1990, to the registered holder thereof as
of the Record Date for such interest payment date.
The Bonds shall mature on the dates and in the
amounts (subject to the right of prior redemption as provided
in Article IV hereof) and shall bear interest at the rates
per annum set forth below.
Maturity Date
(December 1)
Amount
Interest Rate
1992
1993
1994
1995
1996
1997
1998
1999
2009
2019
$
%
The principal or Redemption Price of and interest
on the Bonds shall be payable in lawful money of the United
States of America at the principal corporate trust office of
the Trustee, in Los Angeles, California. Payment of the
interest on any Bond shall be made to the person whose name
appears on the bond registration books of the Trustee as the
registered holder thereof, such interest to be paid by check
or draft mailed to the registered holder at his address as it
appears on such registration books or at such address as such
holder may have filed with the Trustee for that purpose.
Each Bond shall bear interest from the interest
payment date next preceding the date of registration thereof
unless it is registered between a Record Date and the close
of business on the next succeeding interest payment date, in
which event it shall bear interest from such interest payment
date, or unless it is registered on or prior to May 15, 1990,
in which event it shall bear interest from November 1, 1989;
provided, however, that if, at the time of registration of
any Bond, interest is in default on outstanding Bonds, such
Bond shall bear interest from the interest payment date to
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-- ............. - .-. -- --- .....-
which interest has previously been paid or made available for
payment on the Outstanding Bonds.
The Bonds shall be subject to redemption as
provided in Article IV.
SECTION 2.03. Execution of Bonds. The Bonds shall
be executed in the name and on behalf of the City with the
manual or facsimile signature of its Mayor under its seal
attested by the manual or facsimile signature of its City
Clerk. Such seal may be in the form of a facsimile of the
City's seal and may be reproduced, imprinted or impressed on
the Bonds. The Bonds shall then be delivered to the Trustee
for authentication by it. In case any of the officers who
shall have signed or attested any of the Bonds shall cease to
be such officer or officers of the City before the Bonds so
signed or attested shall have been authenticated or delivered
by the Trustee or issued by the City, such Bonds may
nevertheless be authenticated, delivered and issued and, upon
such authentication, delivery and issue, shall be as binding
upon the City as though those who signed and attested the
same had continued to be such officers of the City, and also
any Bond may be signed and attested on behalf of the City by
such persons as at the actual date of execution of such Bond
shall be the proper officers of the City although at the
nominal date of such Bond any such person shall not have been
such officer of the City.
Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in one of the
forms hereinbefore recited, manually executed by the Trustee,
shall be valid or obligatory for any purpose or entitled to
the benefits of this Indenture, and such certificate of the
Trustee shall be conclusive evidence that the Bonds so
authenticated have been duly executed, authenticated and
delivered hereunder and are entitled to the benefits of this
Indenture.
SECTION 2.04. Transfer of Bonds. Any Bond may, in
accordance with its terms, be transferred, upon the books
required to be kept pursuant to the provisions of Section
2.06, by the person in whose name it is registered, in person
or by his duly authorized attorney, upon surrender of such
Bond for cancellation, accompanied by delivery of a written
instrument of transfer, duly executed in a form approved by
the Trustee.
Whenever any Bond or Bonds shall be surrendered for
transfer, the City shall execute and the Trustee shall
authenticate and deliver a new Bond or Bonds, of the same
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~
maturity and for a like aggregate principal amount.
Trustee shall require the Bondholder requesting such
to pay any tax or other governmental charge required
paid with respect to such transfer.
The
transfer
to be
The Trustee shall not be required to register the
transfer of any Bond (1) within fifteen (15) days prior to
the selection of Bonds for redemption or (2) selected for
redemption.
SECTION 2.05. Exchange of Bonds. Bonds may be
exchanged at the principal corporate trust office of the
Trustee in Los Angeles, California, for a like aggregate
principal amount of Bonds of other authorized denominations
of the same maturity. The Trustee shall require the
Bondholder requesting such exchange to pay any tax or other
governmental charge required to be paid with respect to such
exchange.
The Trustee shall not be required to register the
exchange of any Bond (1) within fifteen (15) days prior to
the selection of Bonds for redemption or (2) selected for
redemption.
SECTION 2.06. Bond Register. The Trustee will
keep or cause to be kept, at its principal corporate trust
office in Los Angeles, California, sufficient books for the
registration and transfer of the Bonds, which shall at all
times be open to inspection by the City; and, upon
presentation for such purpose, the Trustee shall, under such
reasonable regulations as it may prescribe, register or
transfer or cause to be registered or transferred, on such
books, Bonds as hereinbefore provided.
SECTION 2.07. Temporary Bonds. The Bonds may be
issued in temporary form exchangeable for definitive Bonds
when ready for delivery. Any temporary Bond may be printed,
lithographed or typewritten, shall be of such denomination as
may be determined by the City, and may contain such reference
to any of the provisions of this Indenture as may be
appropriate. A temporary Bond may be in the form of a single
Bond payable in installments, each on the date, in the amount
and at the rate of interest established for the Bonds
maturing on such date. Every temporary Bond shall be
executed by the City and be authenticated by the Trustee upon
the same conditions and in substantially the same manner as
the definitive Bonds. If the City issues temporary Bonds it
will execute and deliver definitive Bonds as promptly
thereafter as practicable, and thereupon the temporary Bonds
may be surrendered, for cancellation, in exchange therefor at
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the principal corporate trust office of the Trustee in Los
Angeles, California, and the Trustee shall authenticate and
deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive Bonds of authorized
denominations of the same maturity or maturities. Until so
exchanged, the temporary Bonds shall be entitled to the same
benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
SECTION 2.08. Bonds Mutilated, Lost, Destroyed or
Stolen. If any Bond shall become mutilated, the City, at the
expense of the holder of said Bond, shall execute, and the
Trustee shall thereupon authenticate and deliver, a new Bond
of like tenor and number in exchange and substitution for the
Bond so mutilated, but only upon surrender to the Trustee of
the Bond so mutilated. Every mutilated Bond so surrendered
to the Trustee shall be cancelled by it and delivered to, or
upon the order of, the City. If any Bond shall be lost,
destroyed or stolen, evidence of such loss, destruction or
theft may be submitted to the City and the Trustee and, if
such evidence be satisfactory to both and indemnity
satisfactory to them shall be given, the City, at the expense
of the owner, shall execute, and the Trustee shall thereupon
authenticate and deliver, a new Bond of like tenor and number
in lieu of and in substitution for the Bond so lost,
destroyed or stolen (or if any such Bond shall have matured
or shall be about to mature, instead of issuing a substitute
Bond, the Trustee may pay the same without surrender
thereof). The City may require payment of a sum not
exceeding the actual cost of preparing each new Bond issued
under this Section and of the expenses which may be incurred
by the City and the Trustee in the premises. Any Bond issued
under the provisions of this Section in lieu of any Bond
alleged to be lost, destroyed or stolen shall constitute an
original additional contractual obligation on the part of the
City whether or not the Bond so alleged to be lost, destroyed
or stolen be at any time enforceable by anyone, and shall be
entitled to the benefits of this Indenture with all other
Bonds secured by this Indenture.
SECTION 2.09. Use of Depository. Notwithstanding
any provision of this Indenture to the contrary:
(a) The Bonds shall be initially issued as
provided in Section 2.02. Registered ownership of the Bonds,
or any portion thereof, may not thereafter be transferred
except:
(i) to any successor of the Depository or its
nominee, or to any substitute depository designated
pursuant to clause (ii) of this subsection (a)
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("substitute depository"); provided that any successor
of the Depository or substitute depository shall be
qualified under any applicable laws to provide the
service proposed to be provided by it;
(ii) To any substitute depository designated
by the City (at the direction of the Corporation) and
not objected to by the Trustee, upon (1) the resignation
of the Depository or its successor (or any substitute
depository or its successor) from its functions as
depository or (2) a determination by the City (at the
direction of the Corporation) that the Depository or its
successor (or any substitute depository or its
successor) is no longer able to carry out its functions
as depository; provided that any such substitute
depository shall be qualified under any applicable laws
to provide the services proposed to be provided by it; or
(iii) To any person as provided below, upon (1)
the resignation of the Depository or its successor (or
substitute depository or its successor) from its
functions as depository; provided that no substitute
depository which is not objected to by the Trustee can
be obtained or (2) a determination by the City (with the
concurrence of the Corporation) that it is in the best
interests of the City to remove the Depository or its
successor (or any substitute depository or its
successor) from its functions as depository.
(b) In the case of any transfer pursuant to clause
(i) or clause (ii) of subsection (a) hereof, upon receipt of
the Outstanding Bonds by the Trustee, together with a
Certificate of the City to the Trustee, a single new Bond
shall be executed and delivered in the aggregate principal
amount of the Bonds then Outstanding, registered in the name
of such successor or such substitute depository, or their
nominees, as the case may be, all as specified in such
Certificate of the City. In the case of any transfer
pursuant to clause (iii) of subsection (a) hereof, upon
receipt of the Outstanding Bonds by the Trustee, new Bonds
shall be executed and delivered in such denominations
numbered in consecutive order from R-l up and registered in
the names of such persons as are requested in such a
Certificate of the City, subject to the limitations of
Section 2.02 hereof, provided the Trustee shall not be
required to deliver such new Bonds within a period less than
sixty (60) days from the date of receipt of such a
Certificate of the City.
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(c) In the case of partial redemption or an
advance refunding of the Bonds evidencing all or a portion of
the principal amount Outstanding, the Depository shall make
an appropriate notation on the Bonds indicating the date and
amounts of such reduction in principal, in form acceptable to
the Trustee.
(d) The city and the Trustee shall be entitled to
treat the person in whose name any Bond is registered as the
Bondholder thereof for all purposes of the Indenture and any
applicable laws, notwithstanding any notice to the contrary
received by the Trustee or the City; and the City and the
Trustee shall have no responsibility for transmitting
payments to, communication with, notifying, or otherwise
dealing with any beneficial owners of the Bonds. Neither the
city nor the Trustee will have any responsibility or
obligations, legal or otherwise, to the beneficial owners or
to any other party including the Depository or its successor
(or substitute depository or its successor), except for the
Holder of any Bond.
(e) So long as the outstanding Bonds are
registered in the name of Cede & Co. or its registered
assign, the City and the Trustee shall cooperate with Cede &
Co., as sole registered Bondholder, and its registered
assigns in effecting payment of the principal of and
redemption premium, if any, and interest on the Bonds by
arranging for payment in such manner that funds for such
payments are properly identified and are made immediately
available on the date they are due.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
SECTION 3.01. Issuance of Bonds. At any time
after the execution of this Indenture, the City may sell and
execute and the Trustee shall authenticate and, upon Request
of the City, deliver Bonds in the aggregate principal amount
of million dollars ($__,000,000).
SECTION 3.02. Application of Proceeds of Bonds.
The proceeds received from the sale of the Bonds shall be
deposited in trust with the Trustee, who shall forthwith set
aside such proceeds as follows:
(a) The Trustee shall set aside in the Interest
Account accrued interest on the Bonds.
(b) The Trustee shall set aside
Reserve Account the sum of ($
in the Bond
) .
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(c) The Trustee shall set aside in the Costs of
Issuance Fund the sum of dollars
($___,000.00).
(d) The Trustee shall set aside the remainder of
said proceeds in the Escrow Fund.
SECTION 3.03. Establishment and Application of
Escrow Fund. The Trustee shall establish, maintain and hold
in trust a separate fund designated as the "Escrow Fund."
The amounts in the Escrow Fund shall be invested or held as
uninvested cash balances, and shall be withdrawn by the
Trustee solely to purchase the Escrow Securities (as such
term is defined in the Escrow Agreement), in accordance with
a Certificate of the City to be delivered to the Trustee at
or subsequent to the issuance of the Bonds.
SECTION 3.04. Establishment and Application of
Costs of Issuance Fund. The Trustee shall establish,
maintain and hold in trust a separate fund designated as the
"Costs of Issuance Fund." The moneys in the Costs of
Issuance Fund shall be used and withdrawn by the Trustee to
pay the Costs of Issuance of the Bonds upon receipt of a
Requisition of the Corporation stating the person to whom
payment is to be made, the amount to be paid, the purpose for
which the obligation was incurred and that such payment is a
proper charge against said fund. On the first anniversary of
the issuance of the Bonds or upon the earlier Request of the
Corporation, amounts, if any, remaining in the Costs of
Issuance Fund shall be transferred to the [ ] .
[Fifteen days prior to the redemption of the Bonds in whole
or in part, the City shall immediately return a portion of
the City Administration Fee, as determined pursuant to the
terms of this section, plus interest thereon from the date of
issuance of the Bonds to the date the amount is received by
the Trustee, at the rate of %. Such amount is to be
deposited in the Special Redemption Account and used pursuant
to the terms of Section 4.01(A) or (D) hereof, as
applicable. The portion of the City Administration Fee to be
returned at any time shall be the amount of $ ,000 less the
sum of (i) .125% of the aggregate principal amount of Bonds
per annum for every Bond Year or such portion of the Bond
Year in which the Bonds were Outstanding prior to such
redemption and (ii) .125% per annum of the aggregate
principal amount of Bonds Outstanding for every Bond Year or
such portion of the Bond Year during which the said Bonds are
scheduled to remain Outstanding.]
SECTION 3.05. Validity of Bonds. The validity of
the authorization and issuance of the Bonds is not dependent
on and shall not be affected in any way by any proceedings
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taken by the City or the Trustee with respect to or in
connection with the Agreement. The recital contained in the
Bonds that the same are issued pursuant to the Law and the
Constitution and laws of the State of California shall be
conclusive evidence of their validity and of compliance with
the provisions of law in their issuance.
ARTICLE IV
REDEMPTION OF BONDS
SECTION 4.01. Terms of Redemption. (A) The Bonds
are subject to redemption prior to their respective stated
maturities at the option of the City (which shall be
exercised as directed by the Corporation) as a whole on any
date or in part (in inverse order of maturity and by lot
within a maturity) on any interest payment date from moneys
required to be deposited in the Special Redemption Account
pursuant to Section 6.7(B) of the Agreement, at the principal
amount thereof and interest accrued thereon to the date fixed
for redemption, without premium.
(B) The Bonds are also subject to redemption prior
to their stated maturity, at the option of the City (which
shall be exercised as directed by the Corporation), from any
source of available funds, as a whole on any date, or in part
(by lot) on any interest payment date, on or after
December 1, 1999, at the following redemption prices
(expressed as a percentage of the principal amount of Bonds
called for redemption), together with interest accrued
thereon to the date of redemption:
Period (both dates inclusive)
Redemption
Price
December 1, 1999 through November 30, 2000
December 1, 2000 through November 30, 2001
December 1, 2001 and thereafter
102%
101
100
(C) The Bonds maturing on December 1, 2009 and
December 1, 2019 are also subject to redemption prior to
their stated maturity in part, by lot, from Mandatory Sinking
Account Payments established in Section 5.05 (C) and (D)
respectively, on any December 1, on or after December 1, 2000
and December 1, 2010, respectively, at the principal amount
thereof and interest accrued thereon to the date fixed for
redemption, without premium.
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[(D) The Bonds are subject to mandatory redemption
prior to their stated maturity on , in part from
moneys required to be deposited in the Special Redemption
Account pursuant to Section 3.04 hereof, at the principal
amount thereof and interest accrued thereon to the date fixed
for redemption.]
SECTION 4.02. Selection of Bonds for Redemption.
Whenever provision is made in this Indenture for the
redemption of less than all of the Bonds or any given portion
thereof, the Trustee shall select the maturity of Bonds to be
redeemed as specified by the Corporation, and within such
maturities by lot in any manner which the Trustee in its sole
discretion shall deem appropriate and fair. The Trustee
shall promptly notify the City in writing of the Bonds or
portions thereof so selected for redemption.
SECTION 4.03. Notice of Redemption. Notice of
redemption shall be mailed by the Trustee, not less than
thirty (30) days, and not more than sixty (60) days prior to
the redemption date, to the respective Holders of any Bonds
designated for redemption at their addresses appearing on the
bond registration books of the Trustee. If the Bonds are no
longer held by the Depository, the Trustee shall also give
notice of redemption by overnight mail to the Securities
Depositories and to one or more Information Services. Each
notice of redemption shall state the date of such notice, the
Bonds to be redeemed, the date of issue of the Bonds, the
redemption date, the Redemption Price, the place or places of
redemption (including the name and appropriate address or
addresses of the Trustee), the maturity or maturities
(including CUSIP numbers, if any), and, if less than all of
any such maturity, the distinctive certificate numbers of the
Bonds of such maturity, to be redeemed and, if the case of
Bonds to be redeemed in part only, the respective portions of
the principal amount thereof to be redeemed. Each such
notice shall also state that on said date there will become
due and payable on each of said Bonds the Redemption Price
thereof or of said specified portion of the principal amount
thereof in the case of a Bond to be redeemed in part only,
together with interest accrued thereon to the redemption
date, and that from and after such redemption date interest
thereon shall cease to accrue, and shall require that such
Bonds be then surrendered at the address or addresses of the
Trustee specified in the redemption notice.
Failure by the Trustee to give notice pursuant to
this Section 4.03 to anyone or more of the Information
Services or Securities Depositories, or the insufficiency of
any such notice shall not affect the sufficiency of the
proceedings for redemption. Failure by the Trustee to mail
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notice of redemption pursuant to this Section 4.03 to anyone
or more of the respective Holders of any Bonds designated for
redemption shall not affect the sufficiency of the
proceedings for redemption with respect to the Holders to
whom such notice was mailed.
Notice of redemption of Bonds shall be given by the
Trustee, at the expense of the Corporation, for and on behalf
of the City.
SECTION 4.04. Partial Redemption of Bonds. Upon
surrender of any Bond redeemed in part only, the City shall
execute and the Trustee shall authenticate and deliver to the
registered holder thereof, at the expense of the City, a new
Bond or Bonds of authorized denominations, and of the same
Series and maturity, equal in aggregate principal amount to
the unredeemed portion of the Bond surrendered.
SECTION 4.05. Effect of Redemption. Notice of
redemption having been duly given as aforesaid, and moneys
for payment of the Redemption Price of, together with
interest accrued to the redemption date on, the Bonds (or
portions thereof) so called for redemption being held by the
Trustee, on the redemption date designated in such notice,
the Bonds (or portions thereof) so called for redemption
shall become due and payable at the Redemption Price
specified in such notice and interest accrued thereon to the
redemption date, interest on the Bonds so called for
redemption shall cease to accrue, said Bonds (or portions
thereof) shall cease to be entitled to any benefit or
security under this Indenture, and the Holders of said Bonds
shall have no rights in respect thereof except to receive
payment of said Redemption Price and accrued interest.
ARTICLE V
REVENUES
SECTION 5.01. Pledge and Assignment; Revenue
Fund. (A) Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on
the terms and conditions set forth herein, there are hereby
pledged to secure the payment of the principal of and
interest on the Bonds in accordance with their terms and the
provisions of this Indenture, all of the Revenues and any
other amounts (including proceeds of the sale of Bonds) held
in any fund or account established pursuant to this
Indenture. Said pledge shall constitute a lien on and
security interest in such assets and shall attach, be
perfected and be valid and binding from and after delivery by
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the Trustee of the Bonds, without any physical delivery
thereof or further act.
(B) The City hereby transfers in trust, grants a
security interest in and assigns to the Trustee, for the
benefit of the Holders from time to time of the Bonds, all of
the Revenues and other assets pledged in subsection (A) of
this Section and all of the right, title and interest of the
City in the Agreement (except for any Special Services
Covenant [and the right to receive any City Administration
Fee to the extent payable to the City] and any rights of
indemnification and to be held harmless). The Trustee shall
be entitled to and shall collect and receive all of the
Revenues, and any Revenues collected or received by the City
shall be deemed to be held, and to have been collected or
received, by the City as the agent of the Trustee and shall
forthwith be paid by the City to the Trustee. The Trustee
also shall be entitled to and shall take all steps, actions
and proceedings reasonably necessary in its judgment to
enforce, either jointly with the City or separately, all of
the rights of the City and all of the obligations of the
Corporation (other than with respect to any Special Services
Covenant) under the Agreement.
(C) All Revenues shall be promptly deposited by
the Trustee upon receipt thereof in a special fund designated
as the "Revenue Fund" which the Trustee shall establish,
maintain and hold in trust; except as otherwise provided in
Sections 5.07, 5.08 and 5.09 and except that all moneys
received by the Trustee and required by the Agreement to be
deposited in the Redemption Fund shall be promptly deposited
in the Redemption Fund, which the Trustee shall establish,
maintain and hold in trust. All Revenues deposited with the
Trustee shall be held, disbursed, allocated and applied by
the Trustee only as provided in this Indenture.
(D) If by the fifth (5th) day of any month the
Trustee has not received Revenues sufficient to make the
transfers required in such month by Section 5.02, the Trustee
shall immediately notify the Corporation of such
insufficiency by telephone or telegram and confirm such
notification by written notice.
SECTION 5.02. Allocation of Revenues. On or
before the twenty-fifth (25th) day of each month, the Trustee
shall transfer from the Revenue Fund and deposit into the
following respective accounts (each of which the Trustee
shall establish and maintain within the Revenue Fund) and
into the Rebate Fund, the following amounts, in the following
order of priority, the requirements of each such account or
fund (including the making up of any deficiencies in any such
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account or fund resulting from lack of Revenues sufficient to
make any earlier required deposit) at the time of deposit to
be satisfied before any transfer is made to any account or
fund subsequent in priority:
First: to the Interest Account, one-sixth of the
aggregate amount of interest becoming due and payable during
the next ensuing six months on all Bonds then Outstanding,
until the balance in said account is equal to said aggregate
amount of interest;
Second: to the Principal Account, one-twelfth of
the aggregate amount of principal becoming due and payable on
the Outstanding Serial Bonds plus the aggregate amount of
Mandatory Sinking Account Payments required to be paid into
the respective Sinking Accounts for Outstanding Term Bonds,
in each case during the next ensuing twelve months, until the
balance in said account is equal to said aggregate amount of
such principal and Mandatory Sinking Account Payments; and
Third: to the Bond Reserve Account, one-twelfth of
the aggregate amount of each prior withdrawal from the Bond
Reserve Account for the purpose of making up a deficiency in
the Interest Account or the Principal Account until the
deposits on account of such withdrawal are sufficient to
fully restore the amount withdrawn; and
Fourth: to the Rebate Fund, such amounts as are
required to be deposited therein by this Indenture (including
the Rebate Certificate).
Any moneys remaining in the Revenue Fund after the
foregoing transfers shall be transferred to the Corporation.
SECTION 5.03. Application of Interest Account.
All amounts in the Interest Account shall be used and
withdrawn by the Trustee solely for the purpose of paying
interest on the Bonds as it shall become due and payable
(including accrued interest on any Bonds purchased or
redeemed prior to maturity pursuant to this Indenture).
SECTION 5.04. Application of Principal Account.
(A) All amounts in the Principal Account shall be used and
withdrawn by the Trustee solely for the purposes of paying
the principal of the Bonds when due and payable, except that
all amounts in the Sinking Account shall be used and
withdrawn by the Trustee solely to purchase or redeem or pay
at maturity Term Bonds, as provided herein.
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(B) The Trustee shall establish and maintain
within the Principal Account a separate subaccount for the
Term Bonds, designated as the "Sinking Account." On or
before the twenty-fifth (25th) day of each month, the Trustee
shall transfer the amount deposited in the Principal Account
pursuant to Section 5.02 for the purpose of making a
Mandatory Sinking Account Payment (if such deposit is
required in such month) from the Principal Account to the
Sinking Account. On each Mandatory Sinking Account Payment
date the Trustee shall apply the Mandatory Sinking Account
Payment required on that date to the redemption (or payment
at maturity, as the case may be) of Term Bonds, upon the
notice and in the manner provided in Article IV; provided
that, at any time prior to giving such notice of such
redemption, the Trustee may apply moneys in such Sinking
Account to the purchase of Term Bonds at public or private
sale, as and when and at such prices (including brokerage and
other charges, but excluding accrued interest, which is
payable from the Interest Account) as may be directed by the
Corporation, except that the purchase price (excluding
accrued interest) shall not exceed the Redemption Price that
would be payable for such Bonds upon redemption by
application of such Mandatory Sinking Account Payment. If,
during the twelve-month period immediately preceding said
Mandatory Sinking Account Payment date, the Trustee has
purchased Term Bonds with moneys in such Sinking Account, or,
during said period and prior to giving said notice of
redemption, the Corporation has deposited Term Bonds with the
Trustee, or Term Bonds were at any time purchased or redeemed
by the Trustee from the Redemption Fund and allocable to said
Mandatory Sinking Account Payment, such Bonds so purchased or
deposited or redeemed shall be applied, to the extent of the
full principal amount thereof, to reduce said Mandatory
Sinking Account Payment. All Bonds purchased or deposited
pursuant to this subsection shall be cancelled and delivered
by the Trustee to or upon the Order of the City. Any amounts
remaining in a Sinking Account when all of the Term Bonds for
which such account was established are no longer Outstanding
shall be withdrawn by the Trustee and transferred to the
Revenue Fund. All Term Bonds purchased from a Sinking
Account or deposited by the Corporation with the Trustee
shall be allocated first to the next succeeding Mandatory
Sinking Account Payment, then pro-rata to the remaining
Mandatory Sinking Account Payments in proportion to the
amount of such Mandatory Sinking Account Payments.
(C) Subject to the terms and conditions set forth
in this Section and Section 4.01(C), the Bonds maturing on
December 1, 2009 shall be redeemed (or paid at maturity, as
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the case may be) by application of Mandatory Sinking Account
Payments in the following amounts and upon the following
dates:
Mandatory
Sinking Account
Payment Dates
(December 1)
Mandatory
Sinking Account
Payments
Mandatory
(December 1)
Mandatory
Payments
2000
2001
2002
2003
2004
$
2005
2006
2007
2008
2009
$
(D) Subject to the terms and conditions set forth
in this Section and Section 4.01(C), the Bonds maturing on
December 1, 2019 shall be redeemed (or paid at maturity, as
the case may be) by application of Mandatory Sinking Account
Payments in the following amounts and upon the following
dates:
Mandatory
Sinking Account
Payment Dates
(December 1)
Mandatory
Sinking Account
Payments
Mandatory
Sinking Account
Payment Dates
(December 1)
Mandatory
Sinking Account
Payments
2010
2011
2012
2013
2014
$
2015
2006
2017
2018
2019
$
SECTION 5.05. Application of Bond Reserve Account.
All amounts in the Bond Reserve Account shall be used and
withdrawn by the Trustee solely for the purpose of making up
any deficiency in the Interest Account or Principal Account,
or (together with any other moneys available therefor) for
the payment or redemption of all Bonds then Outstanding. Any
amount in the Bond Reserve Account in excess of the Bond
Reserve Account Requirement (calculated as of December 1 of
each year) shall be transferred on or before December 15 of
each year to the Revenue Fund. If the amount on deposit in.
the Bond Reserve Account is less than the Bond Reserve
Requirement as of such date of calculation, the Trustee shall
so notify the Corporation, and the Corporation (pursuant to
the terms of the Loan Agreement) shall make equal monthly
payments within twelve months of such annual valuation so
that the balance in the Bond Reserve Account is increased to
the Bond Reserve Account Requirement.
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SECTION 5.06. Application of Redemption Fund. The
Trustee shall establish and maintain within the Redemption
Fund a separate Optional Redemption Account and a separate
Special Redemption Account. All amounts deposited in the
Optional Redemption Account and in the Special Redemption
Account shall be used and withdrawn by the Trustee solely for
the purpose of redeeming Bonds, in the manner and upon the
terms and conditions specified in Article IV, at the next
succeeding date of redemption for which notice has been given
and at the redemption prices then applicable to redemptions
from the Optional Redemption Account and the Special
Redemption Account, respectively; provided that, at any time
prior to giving such notice of redemption, the Trustee may
apply such amounts to the purchase of Bonds at public or
private sale, as and when and at such prices (including
brokerage and other charges, but excluding accrued interest,
which is payable from the Interest Account) as may be
directed by the Corporation, except that the purchase price
(exclusive of accrued interest) may not exceed the Redemption
Price then applicable to such Bonds; and provided further
that in the case of the Optional Redemption Account in lieu
of redemption at such next succeeding date of redemption, or
in combination therewith, amounts in such account may be
transferred to the Revenue Fund and credited against Loan
Repayments in order of their due date as set forth in a
Request of the Corporation. All Term Bonds purchased or
redeemed from the Redemption Fund shall be allocated to
applicable Mandatory Sinking Account Payments in inverse
order of their payment dates.
SECTION 5.07. Rebate Fund. (A) The Trustee shall
establish and maintain a fund separate from any other fund
established and maintained hereunder designated as the Rebate
Fund. Within the Rebate Fund, the Trustee shall maintain
such accounts, including an Earnings Account and an Excess
Account, as shall be necessary to comply with the terms and
conditions of the Rebate Certificate. Subject to the
transfer provisions provided in paragraph (E) below, all
money at any time deposited in the Rebate Fund shall be held
by the Trustee in trust, to the extent required to satisfy
the Rebate Amount (as defined in the Rebate Certificate), for
payment to the federal government of the United States of
America. Neither the City, the Corporation nor the Holder of
any Bonds shall have any rights in or claim to such money.
All amounts deposited into or on deposit in the Rebate Fund
shall be governed by this Section, by Section 6.06 hereof and
by the Rebate Certificate (which is incorporated herein by
reference). The Trustee shall be deemed conclusively to have
complied with such provisions if it follows the directions of
the Corporation including supplying all necessary information
in the manner provided in the Rebate Certificate, and shall
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have no liability or responsibility to enforce compliance by
the Corporation or the City with the terms of the Rebate
Certificate.
(B) Upon the Corporation's written direction, an
amount shall be deposited to the Rebate Fund by the Trustee
from deposits by the Corporation, if and to the extent
required, so that the balance in the Rebate Fund shall equal
the Rebate Amount. Computations of the Rebate Amount shall
be furnished by or on behalf of the Corporation in accordance
with the Rebate Certificate.
(C) The Trustee shall have no obligation to rebate
any amounts required to be rebated pursuant to this Section,
other than from moneys held in the funds and accounts created
under this Indenture or from other moneys provided to it by
the Corporation.
(D) At the written direction of the Corporation,
the Trustee shall invest all amounts held in the Rebate Fund
in Investment Securities, subject to the restrictions set
forth in the Rebate Certificate. The Trustee shall not be
liable for any consequences arising from such investment.
Money shall not be transferred from the Earnings Account
except as provided in Paragraph (E) below.
(E) Upon receipt of the Corporation's written
directions, the Trustee shall remit part or all of the
balances in the Rebate Fund to the United States, as so
directed. In addition, if the Corporation so directs, the
Trustee will deposit money into or transfer money out of the
Rebate Fund from or into such accounts or funds as directed
by the Corporation's written directions. Any funds remaining
in the Rebate Fund after redemption and payment of all of the
Bonds and payment and satisfaction of any Rebate Amount, or
provision made therefor satisfactory to the Trustee, shall be
withdrawn and remitted to the Corporation.
(F) Notwithstanding any other provision of this
Indenture, including in particular Article X hereof, the
obligation to remit the Rebate Amounts to the United States
and to comply with all other requirements of this Section,
Section 6.06 and the Rebate Certificate shall survive the
defeasance or payment in full of the Bonds.
SECTION 5.08. Investment of Moneys in Funds and
Accounts. Except as set forth in Section 5.07(D) hereof, all
moneys in any of the funds and accounts established pursuant
to this Indenture shall be invested by the Trustee, and, upon
Request of the Corporation, shall be invested as directed by
the Corporation, solely in Investment Securities. Investment
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Securities may be purchased at such prices as the Trustee may
in its discretion determine or as may be directed by the
Corporation. All Investment Securities shall be acquired
subject to the limitations set forth in Section 6.06, the
limitations as to maturities hereinafter in this Section set
forth and such additional limitations or requirements
consistent with the foregoing as may be established by
Request of the Corporation. In the absence of written
investment directions from the Corporation, the Trustee shall
invest solely in the Investment Securities set forth in
clause (8) of the definition thereof.
Moneys in the Bond Reserve Account shall be
invested in Investment Securities maturing prior to the final
maturity of the Bonds. Moneys in all other funds and
accounts shall be invested in Investment Securities maturing
not later than the date on which it is estimated that such
moneys will be required for the purposes specified in this
Indenture. Investment Securities purchased under a
repurchase agreement may be deemed to mature on the date or
dates on which the Trustee may deliver such Investment
Securities for repurchase under such agreement.
All interest, profits and other income received
from the investment of moneys in the Escrow Fund shall be
deposited when received in such fund. All interest, profits
and other income received from the investment of moneys in
the Rebate Fund shall be deposited when received in such
fund. All interest, profits and other income received from
the investment of moneys in any other fund or account
established pursuant to this Indenture shall be deposited
when received in the Revenue Fund. Notwithstanding anything
to the contrary contained in this paragraph, an amount of
interest received with respect to any Investment Security
equal to the amount of accrued interest, if any, paid as part
of the purchase price of such Investment Security shall be
credited to the fund or account for the credit of which such
Investment Security was acquired.
Investment Securities acquired as an investment of
moneys In any fund or account established under this
Indenture shall be credited to such fund or account. For the
purpose of determining the amount in any such fund or account
other than the Bond Reserve Account, all Investment
Securities credited to such fund or account shall be valued
at the lower of cost (exclusive of accrued interest after the
first payment of interest following acquisition) or market
value. Investment Securities credited to the Bond Reserve
Account shall be valued at their respective fair market
values as of December 1 other than the Bond Reserve Account,
in each year.
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The Trustee may commingle any of the funds or
accounts established pursuant to this Indenture (other than
the Rebate Fund) into a single fund or funds for investment
purposes only, provided that all funds or accounts held by
the Trustee hereunder shall be accounted for separately as
required by this Indenture. The Trustee may act as principal
or agent in the making or disposing of any investment. The
Trustee may sell at the best price obtainable, or present for
redemption, any Investment Securities so purchased whenever
it shall be necessary to provide moneys to meet any required
payment, transfer, withdrawal or disbursement from the fund
or account to which such Investment Security is credited,
and, subject to the provisions of Section 8.03, the Trustee
shall not be liable or responsible for any loss resulting
from such investment.
SECTION 5.09 Establishment and Application of
Depreciation Reserve Fund. (A) The Trustee shall establish,
maintain and hold in trust a special fund designated as the
"Depreciation Reserve Fund." The Trustee shall receive from
the Corporation to deposit into the Depreciation Reserve Fund
the following amounts on or before the following dates:
Date Deposit Amount
July 1, 1990 $671,000
July 1, 1991 635,000
July 1, 1992 599,000
July 1, 1993 539,000
July 1, 1994 520,000
July 1, 1995 481,000
July 1, 1996 423,000
July 1, 1997 368,000
July 1, 1998 284,000
July 1, 1999 224,000
July 1, 2000 204,000
July 1, 2001 184,000
July 1, 2002 162,000
July 1, 2003 138,000
The Corporation may reduce the Depreciation Reserve
Fund deposit by Depreciation Reserve Fund deposit credits
which shall be an amount equal to any amount the Corporation
has expended during the then current Fiscal Year for property
which is depreciable (as defined below) until the day of such
deposit; provided that, the Corporation certifies to the
Trustee at the time of payment of the Depreciation Reserve
Fund deposit (1) the amount of the expenditure, (2) the
election of the Corporation to have this amount credited
against the then currently payable Depreciation Reserve Fund
deposit, (3) that the property acquired is depreciable, in
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accordance with generally accepted accounting and has been
included as part of the Facilities, and (4) such amount has
not previously been paid from the Depreciation Reserve Fund
or used as a Depreciation Reserve Fund deposit credit.
Subject to the limitations described below, moneys
held in the Depreciation Reserve Fund may be withdrawn and
paid to the Corporation, from time to time for any of the
following purposes:
(1) To the payment of the principal amount of any
Funded Debt or to the payment of the interest on any
Funded Debt if there is delivered to the Trustee a
Certificate of the Corporation stating that no other
monies are available to make such payment which are not
committed, budgeted, earmarked, or necessary to be used
for another purpose;
(2) To make deposits to the Bond Reserve Account
on any December 1 to make up any deficiency therein;
(3) To the payment of the cost of acquisition or
construction of any Facilities the cost of which is
depreciable under generally accepted accounting
principles;
(4) As a loan to the Corporation to provide
working capital to be repaid within one year with
interest at the rate certified in a Certificate of the
Corporation to be the rate at which the Corporation
could then incur short-term indebtedness for working
capital purposes.
(B) Upon receipt of a Certificate of the
Corporation stating (i) that no Event of Default has occurred
and is continuing, (ii) the amount to be withdrawn from the
Depreciation Reserve Fund, and (iii) the purpose for which
such money is to be withdrawn (which shall be one of the
purposes specified in clauses (1)-(4) above), and in the case
of withdrawals for the purposes specified in clause (4)
above, the Trustee shall pay the amount set forth in such
Certificate as directed by the terms thereof out of the
Depreciation Reserve Fund.
ARTICLE VI
PARTICULAR COVENANTS
SECTION 6.01. Punctual Payment. The City shall
punctually payor cause to be paid the principal or
Redemption Price and interest to become due in respect of all
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the Bonds, in strict conformity with the terms of the Bonds
and of this Indenture, according to the true intent and
meaning thereof, and shall punctually payor cause to be paid
all Mandatory Sinking Account Payments, but only out of
Revenues and other assets pledged for such payment as
provided in this Indenture.
SECTION 6.02. Extension of Payment of Bonds. The
City shall not directly or indirectly extend or assent to the
extension of the maturity of any of the Bonds or the time of
payment of any of the claims for interest by the purchase or
funding of such Bonds or claims for interest or by any other
arrangement and in case the maturity of any of the Bonds or
the time of payment of any such claims for interest shall be
extended, such Bonds or claims for interest shall not be
entitled, in case of any default hereunder, to the benefits
of this Indenture, except subject to the prior payment in
full of the principal of all of the Bonds then Outstanding
and of all claims for interest thereon which shall not have
been so extended. Nothing in this Section shall be deemed to
limit the right of the City to issue Bonds for the purpose of
refunding any Outstanding Bonds, and such issuance shall not
be deemed to constitute an extension of maturity of Bonds.
SECTION 6.03. Against Encumbrances. The City
shall not create, or permit the creation of, any pledge,
lien, charge or other encumbrance upon the Revenues and other
assets pledged or assigned under this Indenture while any of
the Bonds are Outstanding, except the pledge and assignment
created by this Indenture. Subject to this limitation, the
City expressly reserves the right to enter into one or more
other indentures for any of its corporate purposes, including
other programs under the Law, and reserves the right to issue
other obligations for such purposes.
SECTION 6.04. Power to Issue Bonds and Make Pledge
and Assignment. The City is duly authorized pursuant to law
to issue the Bonds and to enter into this Indenture and to
pledge and assign the Revenues and other assets purported to
be pledged and assigned, respectively, under this Indenture
in the manner and to the extent provided in this Indenture.
The Bonds and the provisions of this Indenture are and will'
be the legal, valid and binding limited obligations of the
City in accordance with their terms, and the City and Trustee
shall at all times, to the extent permitted by law, defend,
preserve and protect said pledge and assignment of Revenues
and other assets and all the rights of the Bondholders under
this Indenture against all claims and demands of all persons
whomsoever.
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SECTION 6.05. Accounting Records and Financial
Statements. (A) The Trustee shall at all times keep, or
cause to be kept, proper books of record and account,
prepared in accordance with the Trustee's accounting
practices for books of record and account relating to similar
trust accounts and in accordance with the customary standards
of the industry for such books of record and account, in
which complete and accurate entries shall be made of all
transactions relating to the proceeds of Bonds, the Revenues,
the Agreement and all funds and accounts established pursuant
to this Indenture. Such books of record and account shall be
available for inspection by the City, the Corporation and any
Bondholder, or his agent or representative duly authorized in
writing, at reasonable hours and under reasonable
circumstances.
(B) The Trustee shall file and furnish to the City
(if requested in a Request of the City) and to each
Bondholder who, during the immediately preceding twelve
months, shall have filed his name and address with the
Trustee for such purpose, (1) a copy of the most recent
audited financial statements of the Corporation, as furnished
to the Trustee pursuant to the Agreement, and (2) on or
before January 15 of each year, a statement (which need not
be audited) covering receipts, disbursements, allocation and
application of Revenues and any other moneys (including
proceeds of Bonds) in any of the funds and accounts
established pursuant to this Indenture for the year ended on
the preceding December 1, or, at the option of the Trustee,
monthly statements for such period.
SECTION 6.06. Tax Covenants. The City and the
Corporation each covenant that it will not take any action,
or fail to take any action, if any such action or failure to
take action would adversely affect the exclusion from gross
income of the interest on the Bonds under Section 103 of the
Code. The City and the Corporation shall not directly or
indirectly use or permit the use of any proceeds of the Bonds
or any other funds of the City or the Corporation, or take or
omit to take any action that would cause the Bonds to be
"arbitrage bonds" within the meaning of Section 148(a) of the
Code. To that end, the City and the Corporation will comply
with all requirements of Section 148 of the Code to the
extent applicable to the Bonds. In the event that at any
time the City or the Corporation is of the opinion that for
purposes of this Section 6.06 it is necessary to restrict or
limit the yield on the investment of any moneys held by the
Trustee under this Indenture or the Loan Agreement or
otherwise, the City or the Corporation shall so instruct the
Trustee in writing, and the Trustee shall take such action as
may be necessary in accordance with such instructions.
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Without limiting the generality of the foregoing,
the City and the Corporation agree that there shall be paid
from time to time all amounts required to be rebated to the
United States pursuant to Section 148(f) of the Code and any
temporary, proposed or final Treasury Regulations as may be
applicable to the Bonds from time to time. This covenant
shall survive payment in full or defeasance of the Bonds.
The City and the Corporation specifically covenant to payor
cause to be paid to the United States, at the times and in
the amounts determined pursuant to the Rebate Certificate,
the Rebate Amounts, as described in the Rebate Certificate.
The Trustee shall comply with all instructions of the
Corporation given in accordance with the Rebate Certificate.
Notwithstanding any provision of this Section, if
the Corporation shall provide to the City and the Trustee an
opinion of nationally recognized bond counsel to the effect
that any action required under this Section, Section 5.07
hereof and the Rebate Certificate is no longer required, or
to the effect that some further action is required, to
maintain the exclusion from gross income of the interest on
the Bonds pursuant to Section 103 of the Code, the City and
the Trustee may rely conclusively on such opinion in
complying with the provisions hereof, and the covenants
hereunder shall be deemed to be modified to that extent.
SECTION 6.07. Other Covenants. (A) The Trustee
shall promptly collect all amounts due from the Corporation
pursuant to the Agreement, shall establish all funds and
accounts required to be established by it pursuant to the
Agreement and hold all such amounts therein in trust for the
purposes thereunder, will perform all duties imposed upon it
pursuant to the Agreement, and shall diligently enforce, and
take all steps, actions and proceedings reasonably necessary
in its discretion for the enforcement of all of the rights of
the City and all of the Obligations of the Corporation (other
than with respect to any Special Services Covenant) under the
Agreement.
(B) The City shall not amend, modify or terminate
any of the terms of the Agreement (other than with respect to
any Special Services Covenant), or consent to any such
amendment, modification or termination, without the written
consent of the Trustee. The Trustee shall give such written
consent only if (1) in the opinion of the Trustee, such
amendment, modification or termination will not materially
adversely affect the interests of the Bondholders or result
in any material impairment of the security hereby given for
the payment of the Bonds, or (2) the Trustee first obtains
the written consent of the Holders of a majority in principal
amount of the Bonds then Outstanding to such amendment,
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modification or termination, provided that no such amendment,
modification or termination shall reduce the amount of Loan
Repayments to be made to the City or the Trustee by the
Corporation pursuant to the Agreement, or extend the time for
making such payments, without the written consent of all of
the Holders of the Bonds then Outstanding.
SECTION 6.08. Waiver of Laws. The City shall not
at any time insist upon or plead in any manner whatsoever, or
claim or take the benefit or advantage of, any stay or
extension law now or at any time hereafter in force that may
affect the covenants and agreements contained in this
Indenture or in the Bonds, and all benefit or advantage of
any such law or laws is hereby expressly waived by the City
to the extent permitted by law.
SECTION 6.09. Further Assurances. The City will
make, execute and deliver any and all such further
indentures, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to
facilitate the performance of this Indenture and for the
better assuring and confirming unto the Holders of the Bonds
of the rights and benefits provided in this Indenture.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS
SECTION 7.01. Events of Default. The following
events shall be Events of Default:
(a) default ln the due and punctual payment of the
principal or Redemption Price of any Bond when and as
the same shall become due and payable, whether at
maturity as therein expressed, by proceedings for
redemption, by declaration or otherwise, or default in
the redemption from any Sinking Account of any Term
Bonds in the amounts and at the times provided therefor;
(b) default in the due and punctual payment of any
installment of interest on any Bond when and as such
interest installment shall become due and payable;
(c) default by the City in the observance of any
of the covenants, agreements or conditions on its part
in this Indenture or in the Bonds contained, if such
default shall have continued for a period of sixty (60)
days after written notice thereof, specifying such
default and requiring the same to be remedied, shall
have been given to the City and the Corporation by the
Trustee, or to the City, the Corporation and the Trustee
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by the Holders of not less than twenty-five per cent
(25%) in aggregate principal amount of the Bonds at the
time Outstanding; or
(d) a Loan Default Event.
Upon the occurrence of an Event of Default
hereunder of which the Trustee has actual knowledge, the
Trustee shall notify the Corporation and the City in writing
as soon as practicable.
SECTION 7.02. Acceleration of Maturities. If an
Event of Default shall occur, then, and in each and every
such case during the continuance of such Event of Default,
the Trustee or the Holders of not less than a majority in
aggregate principal amount of the Bonds at the time
Outstanding shall be entitled, upon notice in writing to the
City and the Corporation, to declare the principal of all of
the Bonds then Outstanding, and the interest accrued thereon,
to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately
due and payable, anything in this Indenture or in the Bonds
contained to the contrary notwithstanding.
Any such declaration, however, is subject to the
condition that if, at any time after such declaration and
before any judgment or decree for the payment of the moneys
due shall have been obtained or entered, the City or the
Corporation shall deposit with the Trustee a sum sufficient
to pay all the principal or Redemption Price of and
installments of interest on the Bonds payment of which is
overdue, with interest on such overdue principal at the rate
borne by the respective Bonds, and the reasonable charges and
expenses of the Trustee, and any and all other defaults known
to the Trustee (other than in the payment of principal of and
interest on the Bonds due and payable solely by reason or
such declaration) shall have been made good or cured to the
satisfaction of the Trustee or provision deemed by the
Trustee to be adequate shall have been made therefor, then,
and in every such case, the Holders of not less than a
majority in aggregate principal amount of the Bonds then
Outstanding, by written notice to the City, the Corporation
and the Trustee, or the Trustee if such declaration was made
by the Trustee, may, on behalf of the Holders of all of the
Bonds, rescind and annul such declaration and its
consequences and waive such default; but no such rescission
and annulment shall extend to or shall affect any subsequent
default, or shall impair or exhaust any right or power
consequent thereon.
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SECTION 7.03. Application of Revenues and Other
Funds After Default. If an Event of Default shall occur and
be continuing, all Revenues and any other funds then held or
thereafter received by the Trustee under any of the
provisions of this Indenture (subject to Section 11.10) shall
be applied by the Trustee as follows and in the following
order:
(1) To the payment of any expenses necessary in
the opinion of the Trustee to protect the interests of
the Holders of the Bonds and payment of reasonable
charges and expenses of the Trustee (including
reasonable fees and disbursements of its counsel)
incurred in and about the performance of its powers and
duties under this Indenture;
(2) To the payment of the principal or Redemption
Price of and interest then due on the Bonds (upon
presentation of the Bonds to be paid, and stamping
thereon of the payment if only partially paid, or
surrender thereof if fully paid) subject to the
provisions of this Indenture (including Section 6.02),
as follows:
(i) Unless the principal of all of the Bonds
shall have become or have been declared due and
payable,
First: To the payment to the persons
entitled thereto of all installments of
interest then due in the order of the maturity
of such installments, and, if the amount
available shall not be sufficient to pay in
full any installment or installments maturing
on the same date, then to the payment thereof
ratably, according to the amounts due thereon,
to the persons entitled thereto, without any
discrimination or preference; and
Second: To the payment to the persons
entitled thereto of the unpaid principal or
Redemption Price of any Bonds which shall have
become due, whether at maturity or by call for
redemption, in the order of their due dates,
with interest on the overdue principal at the
rate borne by the respective Bonds, and, if
the amount available shall not be sufficient
to pay in full all the Bonds due on any date,
together with such interest, then to the
payment thereof ratably, according to the
amounts of principal or Redemption Price due
on such date to the persons entitled thereto,
without any discrimination or preference.
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(ii) If the principal of all of the Bonds
shall have become or have been declared due and
payable, to the payment of the principal and
interest then due and unpaid upon the Bonds, with
interest on the overdue principal at the rate borne
by the respective Bonds, and, if the amount
available shall not be sufficient to pay in full
the whole amount so due and unpaid, then to the
payment thereof ratably, without preference or
priority of principal over interest, or of interest
over principal, or of any installment of interest
over any other installment of interest, or of any
Bond over any other Bond, according to the amounts
due respectively for principal and interest, to the
persons entitled thereto without any discrimination
or preference.
SECTION 7.04. Trustee to Represent Bondholders.
The Trustee is hereby irrevocably appointed (and the
successive respective Holders of the Bonds, by taking and
holding the same, shall be conclusively deemed to have so
appointed the Trustee) as trustee and true and lawful
attorney-in-fact of the Holders of the Bonds for the purpose
of exercising and prosecuting on their behalf such rights and
remedies as may be available to such Holders under the
provisions of the Bonds, this Indenture, the Agreement, the
Law and applicable provisions of any other law. Upon the
occurrence and continuance of an Event of Default or other
occasion giving rise to a right in the Trustee to represent
the Bondholders, the Trustee in its discretion may, and upon
the written request of the Holders of not less than
twenty-five per cent (25%) in aggregate principal amount of
the Bonds then Outstanding, and upon being indemnified to its
satisfaction therefor, and being held harmless by the Holders
of the Bonds requesting any such action for its performance
of any such requested action (provided, however, that no such
hold harmless agreement shall be deemed to apply to any
instance in which the Trustee has performed negligently or
with willful misconduct) shall, proceed to protect or enforce
its rights or the rights of such Holders by such appropriate
action, suit, mandamus or other proceedings as it shall deem
most effectual to protect and enforce any such right, at law
or in equity, either for the specific performance of any
covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or for the enforcement
of any other appropriate legal or equitable right or remedy
vested in the Trustee or in such Holders under this
Indenture, the Agreement, the Law or any other law; and upon
instituting such proceeding, the Trustee shall be entitled,
as a matter of right, to the appointment of a receiver of the
Revenues and other assets pledged under this Indenture,
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pending such proceedings. All rights of action under this
Indenture or the Bonds or otherwise may be prosecuted and
enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any proceeding relating
thereto, and any such suit, action or proceeding instituted
by the Trustee shall be brought in the name of the Trustee
for the benefit and protection of all the Holders of such
Bonds, subject to the provisions of this Indenture (including
Section 6.02).
SECTION 7.05. Bondholders' Direction of
Proceedings. Anything in this Indenture to the contrary
notwithstanding, the Holders of a majority in aggregate
principal amount of the Bonds then Outstanding shall have the
right, by an instrument or concurrent instruments in writing
executed and delivered to the Trustee, to direct the method
of conducting all remedial proceedings taken by the Trustee
hereunder, provided that such direction shall not be
otherwise than in accordance with law and the provisions of
this Indenture, and that the Trustee shall have the right to
decline to follow any such direction which in the opinion of
the Trustee would be unjustly prejudicial to Bondholders not
parties to such direction.
SECTION 7.06. Limitation on Bondholders' Right to
Sue. No Holder of any Bond shall have the right to institute
any suit, action or proceeding at law or in equity, for the
protection or enforcement of any right or remedy under this
Indenture, the Agreement, the Law or any other applicable law
with respect to such Bond, unless (1) such Holder shall have
given to the Trustee written notice of the occurrence of an
Event of Default; (2) the Holders of not less than
twenty-five per cent (25%) in aggregate principal amount of
the Bonds then Outstanding shall have made written request
upon the Trustee to exercise the powers hereinbefore granted
or to institute such suit, action or proceeding in its own
name; (3) such Holder or said Holders shall have tendered to
the Trustee reasonable indemnity against the costs, expenses
and liabilities to be incurred in compliance with such
request; (4) such Holder or said Holders shall have submitted
to the Trustee an agreement to hold the Trustee harmless for
its performance of any such request, provided, however, that
no such hold harmless agreement shall be deemed to apply to
any instance in which the Trustee has performed negligently
or with willful misconduct; and (5) the Trustee shall have
refused or omitted to comply with such request for a period
of sixty (60) days after such written request shall have been
received by, and said tender of indemnity and agreement to
hold harmless shall have been made to, the Trustee.
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Such notification, request, tender of indemnity and
refusal or omission are hereby declared, in every case, to be
conditions precedent to the exercise by any Holder of Bonds
of any remedy hereunder or under law; it being understood and
intended that no one or more Holders of Bonds shall have any
right in any manner whatever by his or their action to
affect, disturb or prejudice the security of this Indenture
or the rights of any other Holders of Bonds, or to enforce
any right under this Indenture, the Law or other applicable
law with respect to the Bonds, except in the manner herein
provided, and that all proceedings at law or in equity to
enforce any such right shall be instituted, had and
maintained in the manner herein provided and for the benefit
and protection of all Holders of the Outstanding Bonds,
subject to the provisions of this Indenture (including
Section 6.02).
SECTION 7.07. Absolute Obligation of City.
Nothing in Section 7.06 or in any other provision of this
Indenture, or in the Bonds, contained shall affect or impair
the obligation of the City, which is absolute and
unconditional, to pay the principal or Redemption Price of
and interest on the Bonds to the respective Holders of the
Bonds at their respective dates of maturity, or upon call for
redemption, as herein provided, but only out of the Revenues
and other assets herein pledged therefor, or affect or impair
the right of such Holders, which is also absolute and
unconditional, to enforce such payment by virtue of the
contract embodied in the Bonds.
SECTION 7.08. Termination of Proceedings. In case
any proceedings taken by the Trustee or anyone or more
Bondholders on account of any Event of Default shall have
been discontinued or abandoned for any reason or shall have
been determined adversely to the Trustee or the Bondholders,
then in every such case the City, the Trustee and the
Bondholders, subject to any determination in such
proceedings, shall be restored to their former positions and
rights hereunder, severally and respectively, and all rights,
remedies, powers and duties of the City, the Trustee and the
Bondholders shall continue as though no such proceedings had
been taken.
SECTION 7.09. Remedies Not Exclusive. No remedy
herein conferred upon or reserved to the Trustee or to the
Holders of the Bonds is intended to be exclusive of any other
remedy or remedies, and each and every such remedy, to the
extent permitted by law, shall be cumulative and in addition
to any other remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.
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SECTION 7.10. No Waiver of Default. No delay or
omission of the Trustee or of any Holder of the Bonds to
exercise any right or power arising upon the occurrence of
any default shall impair any such right or power or shall be
construed to be a waiver of any such default or an
acquiescence therein; and every power and remedy given by
this Indenture to the Trustee or to the Holders of the Bonds
may be exercised from time to time and as often as may be
deemed expedient.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. Duties, Immunities and Liabilities
of Trustee. (A) The Trustee shall, prior to an Event of
Default, and after the curing of all Events of Default which
may have occurred, perform such duties and only such duties
as are specifically set forth in this Indenture. The Trustee
shall, during the existence of any Event of Default (which
has not been cured), exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his
or her own affairs.
(B) The City may, and upon written request of the
Corporation shall, remove the Trustee at any time unless an
Event of Default shall have occurred and then be continuing,
and shall remove the Trustee if at any time requested to do
so by an instrument or concurrent instruments in writing
signed by the Holders of not less than a majority in
aggregate principal amount of the Bonds then Outstanding (or
their attorneys duly authorized in writing) or if at any time
the Trustee shall cease to be eligible in accordance with
subsection (E) of this Section, or shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Trustee or its property shall be appointed,
or any public officer shall take control or charge of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, in each case by
giving written notice of such removal to the Trustee, and,
thereupon shall appoint, with the consent of the Corporation,
a successor Trustee by an instrument in writing.
(C) The Trustee may at any time resign by giving
written notice of such resignation to the City and the
Corporation and by giving the Bondholders notice of such
resignation by mail to the Bondholders at the addresses shown
on the registration books maintained by the Trustee. Upon
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receiving such notice of resignation, the City shall promptly
appoint, with the consent of the Corporation, a successor
Trustee by an instrument in writing.
(D) Any removal or resignation of the Trustee and
appointment of a successor Trustee shall become effective
upon acceptance of appointment by the successor Trustee. If
no successor Trustee shall have been appointed and have
accepted appointment within forty-five (45) days of giving
notice of removal or notice of resignation as aforesaid, the
resigning Trustee or any Bondholder (on behalf of himself and
all other Bondholders) may petition any court of competent
jurisdiction for the appointment of a successor Trustee, and
such court may thereupon, after such notice (if any) as it
may deem proper, appoint such successor Trustee. Any
successor Trustee appointed under this Indenture shall
signify its acceptance of such appointment by executing and
delivering to the City and to its predecessor Trustee a
written acceptance thereof, and thereupon such successor
Trustee, without any further act, deed or conveyance, shall
become vested with all the moneys, estates, properties,
rights, powers, trusts, duties and obligations of such
predecessor Trustee, with like effect as if originally named
Trustee herein; but, nevertheless at the Request of the City
or the request of the successor Trustee, such predecessor
Trustee shall execute and deliver any and all instruments of
conveyance or further assurance and do such other things as
may reasonably be required for more fully and certainly
vesting in and confirming to such successor Trustee all the
right, title and interest of such predecessor Trustee in and
to any property held by it under this Indenture and shall pay
over, transfer, assign and deliver to the successor Trustee
any money or other property subject to the trusts and
conditions herein set forth. Upon request of the successor
Trustee, the City shall execute and deliver any and all
instruments as may be reasonably required for more fully and
certainly vesting in and confirming to such successor Trustee
all such moneys, estates, properties, rights, powers, trusts,
duties and obligations. Upon acceptance of appointment by a
successor Trustee as provided in this subsection, the City
shall mail a notice of the succession of such Trustee to the
trusts hereunder to the Bondholders at the addresses shown on
the registration books maintained by the Trustee. If the
City fails to mail such notice within thirty (30) days after
acceptance of appointment by the successor Trustee, the
successor Trustee shall cause such notice to be published at
the expense of the City.
(E) Any Trustee appointed under the provisions of
this Section in succession to the Trustee shall be a trust
company or bank having the powers of a trust company having a
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corporate trust office in Los Angeles, California, having a
combined capital and surplus of at least fifty million
dollars ($50,000,000), and subject to supervision or
examination by federal or state authority. If such bank or
trust company publishes a report of condition at least
annually, pursuant to law or to the requirements of any
supervising or examining authority above referred to, then
for the purpose of this subsection the combined capital and
surplus of such bank or trust company shall be deemed to be
its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the
provisions of this subsection (E), the Trustee shall resign
immediately in the manner and with the effect specified in
this Section.
SECTION 8.02. Merger or Consolidation. Any
company into which the Trustee may be merged or converted or
with which it may be consolidated or any company resulting
from any merger, conversion or consolidation to which it
shall be a party or any company to which the Trustee may sell
or transfer all or substantially all of its corporate trust
business, provided such company shall be eligible under
subsection (E) of Section 8.01, shall be the successor to
such Trustee without the execution or filing of any paper or
any further act, anything herein to the contrary
notwithstanding.
SECTION 8.03. Liability of Trustee. (A) The
recitals of facts herein and in the Bonds contained shall be
taken as statements of the City, and the Trustee assumes no
responsibility for the correctness of the same, or makes any
representations as to the validity or sufficiency of this
Indenture or of the Bonds, or shall incur any responsibility
in respect thereof, other than in connection with the duties
or obligations herein or in the Bonds assigned to or imposed
upon it. The Trustee shall, however, be responsible for its
representations contained in its certificate of
authentication on the Bonds. The Trustee shall not be liable
in connection with the performance of its duties hereunder,
except for its own negligence or willful misconduct. The
Trustee may become the owner of Bonds with the same rights it
would have if it were not Trustee, and, to the extent
permitted by law, may act as depositary for and permit any of
its officers or directors to act as a member of, or in any
other capacity with respect to, any committee formed to
protect the rights of Bondholders, whether or not such
committee shall represent the Holders of a majority in
principal amount of the Bonds then Outstanding.
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(B) The Trustee shall not be liable for any
error of judgment made in good faith by a responsible
officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
(C) The Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of
not less than a majority in aggregate principal amount of the
Bonds at the time Outstanding relating to the time, method
and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture.
(D) The Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the
Bondholders, pursuant to the provisions of this Indenture,
unless such Bondholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby and
shall have agreed to hold the Trustee harmless for its
performance of any request, order or direction, provided,
however, that no such hold harmless agreement shall be deemed
to apply to any instance in which the Trustee has performed
negligently or with willful misconduct.
(E) The Trustee shall be entitled to payment
for its reasonable fees and expenses for all services
performed under this Indenture, subject to the provisions of
any agreement between the Trustee and the City or the
Corporation. Such fees and expenses shall be paid solely
from Additional Payments or, to the extent the Corporation
has defaulted in the payment of Additional Payments, from
Revenues. The Trustee shall have a lien for its fees and
expenses on the Revenues and other assets pledged hereunder,
which lien shall be prior to the lien of the Holders of the
Bonds.
(F) The Trustee shall not be deemed to have
knowledge of any Loan Default Event unless and until a trust
officer or assistant trust officer in the office of the
Trustee administering the trusts created hereby shall have
actual knowledge thereof, or the Trustee shall have received
written notice thereof, at its principal corporate trust
office in Los Angeles, California.
(G) No provision of this Indenture shall be
deemed to require the Trustee to expend or risk its own funds
or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of
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its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to
it.
(H) The Trustee may execute any of the trusts
or powers hereof and perform the duties required of it
hereunder by or through attorneys, agents, or receivers, and
shall be entitled to advice of counsel concerning all matters
of trust and its duty hereunder, and the Trustee shall not be
answerable for the actions of any such attorney, agent, or
receiver selected by it with reasonable care except for the
negligence actions or willful misconduct of any such
attorney, agent or receiver.
SECTION 8.04. Right of Trustee to Rely on
Documents. The Trustee shall be protected in acting upon any
notice, resolution, request, consent, order, certificate,
report, opinion, bond or other paper or document believed by
it to be genuine and to have been signed or presented by the
proper party or parties. The Trustee may consult with
counsel, who may be counsel of or to the City, with regard to
legal questions, and may consult with any independent
certified public accountant or firm of such accountants of
national reputation with regard to accounting or auditing
questions or computations, and the opinion of such counselor
the opinion or computations of such accountant or firm of
accountants, respectively, shall be full and complete
authorization and protection in respect of any action taken
or suffered by it hereunder in good faith and in accordance
therewith.
Whenever in the administration of the trusts
imposed upon it by this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established
prior to taking or suffering any action hereunder, such
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively
proved and established by a Certificate of the City, and such
Certificate shall be full warrant to the Trustee for any
action taken or suffered in good faith under the provisions
of this Indenture in reliance upon such Certificate, but in
its discretion the Trustee may, in lieu thereof, accept other
evidence of such matter or may require such additional
evidence as to it may seem reasonable.
SECTION 8.05. Preservation and Inspection of
Documents. All documents received by the Trustee under the
provisions of this Indenture shall be retained in its
possession and shall be subject at all reasonable times to
the inspection of the City and any Bondholder, and their
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agents and representatives duly authorized in writing, at
reasonable hours and under reasonable conditions.
ARTICLE IX
MODIFICATION OR AMENDMENT OF THE INDENTURE
SECTION 9.01. Amendments Permitted. (A) This
Indenture and the rights and obligations of the City and of
the Holders of the Bonds and of the Trustee may be modified
or amended from time to time and at any time by an indenture
or indentures supplemental thereto, which the City and the
Trustee may enter into, following prior written notice to the
Corporation pursuant to Section 9.2 of the Agreement, when
the written consent of the Holders of a majority in aggregate
principal amount of the Bonds then Outstanding shall have
been filed with the Trustee; provided that if such
modification or amendment will, by its terms, not take effect
so long as any Bonds of any particular maturity remain
Outstanding, the consent of the Holders of such Bonds shall
not be required and such Bonds shall not be deemed to be
Outstanding for the purpose of any calculation of Bonds
Outstanding under this Section. No such modification or
amendment shall (I) extend the fixed maturity of any Bond, or
reduce the amount of principal thereof, or extend the time of
payment or reduce the amount of any Mandatory Sinking Account
Payment provided in the Indenture for the payment of any
Bond, or reduce the rate of interest thereon, or extend the
time of payment of interest thereon, or reduce any premium
payable upon the redemption thereof, without the consent of
the Holder of each Bond so affected, or (2) reduce the
aforesaid percentage of Bonds the consent of the Holders of
which is required to effect any such modification or
amendment, or permit the creation of any lien on the Revenues
and other assets pledged under this Indenture prior to or on
a parity with the lien created by this Indenture, or deprive
the Holders of the Bonds of the lien created by this
Indenture on such Revenues and other assets (except as
expressly provided in this Indenture), without the consent of
the Holders of all of the Bonds then Outstanding. It shall
not be necessary for the consent of the Bondholders to
approve the particular form of any Supplemental Indenture,
but it shall be sufficient if such consent shall approve the
substance thereof. Promptly after the execution by the City
and the Trustee of any Supplemental Indenture pursuant to
this subsection (A), the Trustee shall mail a notice, setting
forth in general terms the substance of such Supplemental
Indenture to the Bondholders at the addresses shown on the
registration books maintained by the Trustee. Any failure to
give such notice, or any defect therein, shall not, however,
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in any way impair or affect the validity of any such
Supplemental Indenture.
(B) This Indenture and the rights and obligations
of the City, of the Trustee and of the Holders of the Bonds
may also be modified or amended from time to time and at any
time by an indenture or indentures supplemental hereto, which
the City and the Trustee may enter into, following prior
notice to the Corporation without the consent of any
Bondholders, but only to the extent permitted by law and only
for anyone or more of the following purposes:
(1) to add to the covenants and agreements of
the City in this Indenture contained other covenants and
agreements thereafter to be observed, to pledge or
assign additional security for the Bonds (or any portion
thereof), or to surrender any right or power herein
reserved to or conferred upon the City, provided, that
no such covenant, agreement, pledge, assignment or
surrender shall materially adversely affect the
interests of the Holders of the Bonds;
(2) to make such provisions for the purpose
of curing any ambiguity, inconsistency or omission, or
of curing or correcting any defective provision,
contained in this Indenture, or in regard to matters or
questions arising under this Indenture, as the City may
deem necessary or desirable and not inconsistent with
this Indenture, and which shall not materially adversely
affect the interests of the Holders of the Bonds;
(3) to modify, amend or supplement this
Indenture in such manner as to permit the qualification
hereof under the Trust Indenture Act of 1939, as
amended, or any similar federal statute hereafter in
effect, and to add such other terms, conditions and
provisions as may be permitted by said act or similar
federal statute, and which shall not materially
adversely affect the interests of the Holders of the
Bonds; or
(4) to provide any additional procedures,
covenants or agreements to maintain the exclusion from
gross income for federal income tax purposes of the
interest on the Bonds, including the amendment of any
Rebate Certificate.
(C) The Trustee may in its discretion, but shall
not be obligated to, enter into any such Supplemental
Indenture authorized by subsections (A) or (B) of this
Section which materially adversely affects the Trustee's own
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rights, duties or immunities under this Indenture or
otherwise.
SECTION 9.02. Effect of Supplemental Indenture.
Upon the execution of any Supplemental Indenture pursuant to
this Article, this Indenture shall be deemed to be modified
and amended in accordance therewith, and the respective
rights, duties and obligations under this Indenture of the
City, the Trustee and all Holders of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder
subject in all respects to such modification and amendment,
and all the terms and conditions of any such Supplemental
Indenture shall be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.03. Endorsement of Bonds; Preparation of
New Bonds. Bonds delivered after the execution of any
Supplemental Indenture pursuant to this Article may, and if
the Trustee so determines shall, bear a notation by
endorsement or otherwise in form approved by the City and the
Trustee as to any modification or amendment provided for in
such Supplemental Indenture, and, in that case, upon demand
of the Holder of any Bond Outstanding at the time of such
execution and presentation of his or her Bond for the purpose
at the office of the Trustee or at such additional offices as
the Trustee may select and designate for that purpose, a
suitable notation shall be made on such Bond. If the
Supplemental Indenture shall so provide, new Bonds so
modified as to conform, in the opinion of the City and the
Trustee, to any modification or amendment contained in such
Supplemental Indenture, shall be prepared and executed by the
City and authenticated by the Trustee, and upon demand of the
Holders of any Bonds then Outstanding shall be exchanged at
the principal office of the Trustee, without cost to any
Bondholder, for Bonds then Outstanding, upon surrender for
cancellation of such Bonds, in equal aggregate principal
amounts of the same maturity.
SECTION 9.04. Amendment of Particular Bonds. The
provisions of this Article shall not prevent any Bondholder
from accepting any amendment as to the particular Bonds held
by him, provided that due notation thereof is made on such
Bonds.
ARTICLE X
DEFEASANCE
SECTION 10.01. Discharge of Indenture. The Bonds
may be paid by the City in any of the following ways;
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provided that the City also pays or causes to be paid any
other sums payable hereunder by the City:
(a) by paying or causing to be paid the principal
or Redemption Price of and interest on all Bonds then
Outstanding, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at
or before maturity, money or securities in the necessary
amount (as provided in Section 10.03) to payor redeem
all Bonds then Outstanding; or
(c) by delivering to the Trustee, for cancellation
by it, all Bonds then Outstanding.
If the City shall pay all Bonds Outstanding and shall also
payor cause to be paid all other sums payable hereunder by
the City, then and in that case, at the election of the City
(evidenced by a Certificate of the City, filed with the
Trustee signifying the intention of the City to discharge all
such indebtedness and this Indenture), and notwithstanding
that any Bonds shall not have been surrendered for payment,
this Indenture and the pledge of Revenues and other assets
made under this Indenture and all covenants, agreements and
other obligations of the City under this Indenture (except as
otherwise provided in Section 5.07 hereof) shall cease,
terminate, become void and be completely discharged and
satisfied, except only as provided in Section 10.02. In such
event, upon Request of the City, the Trustee shall cause an
accounting for such period or periods as may be requested by
the City to be prepared and filed with the City and shall
execute and deliver to the City all such instruments as may
be necessary or desirable to evidence such discharge and
satisfaction, and the Trustee shall pay over, transfer,
assign or deliver to the Corporation all moneys or securities
or other property held by them pursuant to this Indenture
which are not required for the payment or redemption of Bonds
not theretofore surrendered for such payment or redemption;
provided that in all events moneys in the Rebate Fund shall
be subject to the provisions of Section 5.07 hereof.
SECTION 10.02. Discharge of Liability on Bonds.
Upon the deposit with the Trustee, in trust, at or before
maturity, of money or securities in the necessary amount (as
provided in Section 10.03) to payor redeem any Outstanding
Bond (whether upon or prior to its maturity or the redemption
date of such Bond), provided that, if such Bond is to be
redeemed prior to maturity, notice of such redemption shall
have been given as in Article IV provided or provision
satisfactory to the Trustee shall have been made for the
giving of such notice, then all liability of the City in
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respect of such Bond shall cease, determine and be completely
discharged, except that thereafter, the Holder thereof shall
be entitled to payment by the City, and the City shall remain
liable therefore, but only out of such money or securities
deposited with the Trustee as aforesaid, subject, however, to
the provisions of Section 10.04.
The City may at any time surrender to the Trustee
for cancellation by it any Bonds previously issued and
delivered, which the City may have acquired in any manner
whatsoever, and such Bonds, upon such surrender and
cancellation, shall be deemed to be paid and retired.
SECTION 10.03. Deposit of Money or Securities with
Trustee. Whenever in this Indenture it is provided or
permitted that there be deposited with or held in trust by
the Trustee money or securities in the necessary amount to
payor redeem any Bonds, the money or securities so to be
deposited or held may include money or securities held by the
Trustee in the funds and accounts established pursuant to
this Indenture (other than the Rebate Fund) and shall be:
(a) lawful money of the United States of America
in an amount equal to the principal amount of such Bonds
and all unpaid interest thereon to maturity, except
that, in the case of Bonds which are to be redeemed
prior to maturity and in respect of which notice of such
redemption shall have been given as in Article IV
provided or provision satisfactory to the Trustee shall
have been made for the giving of such notice, the amount
to be deposited or held shall be the principal amount or
Redemption Price of such Bonds and all unpaid interest
thereon to the redemption date; or
(b) Investment Securities described in clause (1)
of the definition thereof in Section 1.01 not subject to
redemption by the issuer thereof prior to maturity, the
principal of and interest on which when due will provide
money sufficient to pay the principal or Redemption
Price of and all unpaid interest to maturity, or to the
redemption date, as the case may be, on the Bonds to be
paid or redeemed, as such principal or Redemption Price
and interest become due, provided that, in the case of
Bonds which are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given
as in Article IV provided or provision satisfactory to
the Trustee shall have been made for the giving of such
notice;
provided, in each case, that the Trustee shall have been
irrevocably instructed (by the terms of this Indenture or by
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Request of the City) to apply such money to the payment of
such principal or Redemption Price and interest with respect
to such Bonds, and provided further, that with respect to the
deposit of Investment Securities pursuant to subsection (b),
the Trustee shall have received the report of an Accountant
to the effect that the amount deposited is sufficient to make
the payments specified therein.
SECTION 10.04. Payment of Bonds After Discharge of
Indenture. Notwithstanding any provisions of this Indenture,
any moneys held by the Trustee in trust for the payment of
the principal or Redemption Price of, or interest on, any
Bonds and remaining unclaimed for four years after the
principal of all of the Bonds has become due and payable
(whether at maturity or upon call for redemption or by
acceleration as provided in this Indenture), if such moneys
were so held at such date, or four years after the date of
deposit of such moneys if deposited after said date when all
of the Bonds became due and payable, shall, upon Request of
the City and subject to applicable law to the contrary, be
repaid to the City free from the trusts created by this
Indenture, and all liability of the Trustee with respect to
such moneys shall thereupon cease; provided, however, that
before the repayment of such moneys to the City as aforesaid,
the Trustee may (at the cost of the City) first mail to the
Holders of any Bonds remaining unpaid a notice, in such form
as may be deemed appropriate by the Trustee, with respect to
the Bonds so payable and not presented and with respect to
the provisions relating to the repayment to the City of the
moneys held for the payment thereof.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Liability of City Limited to
Revenues. Notwithstanding anything in this Indenture or in
the Bonds contained, the City shall not be required to
advance any moneys derived from any source other than the
Revenues and other assets pledged under this Indenture for
any of the purposes in this Indenture mentioned, whether for
the payment of the principal or Redemption Price of or
interest on the Bonds or for any other purpose of this
Indenture [except for the return of a portion of its City
Administration Fee required by Section 3.04 hereof.]
Nevertheless, the City may, but shall not be required to,
advance for any of the purposes hereof any funds of the City
which may be made available to it for such purposes.
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The City shall not be liable to the Corporation,
any Bondholder or any other person for losses, costs,
damages, expenses and liabilities arising out of or related
to, in whole or in part, one or more negligent acts or
omissions of the City, any of its officers, directors,
employees, agents or any other party acting for or on behalf
of the City, in connection with the issuance of the Bonds or
performance by the City of its obligations under this
Indenture, the Loan Agreement or any other agreement relating
hereto. The Loan Agreement shall provide that the
Corporation releases the City from all liability to the
Corporation for, and indemnifies the City against any
liability arising from any claim by any Bondholder or any
other person for any such losses, costs, damages, expenses
and liabilities. The Loan Agreement shall further provide
that the Corporation indemnifies the Bondholders against any
failure by the City, any of its officers, directors,
employees, agents or any other party acting for or on behalf
of the City, to perform its obligations under this Indenture,
the Loan Agreement or any other agreement relating hereto.
SECTION 11.02. Successor Is Deemed Included in All
References to Predecessor. Whenever in this Indenture either
the City or the Trustee is named or referred to, such
reference shall be deemed to include the successors or
assigns thereof, and all the covenants and agreements in this
Indenture contained by or on behalf of the City or the
Trustee shall bind and inure to the benefit of the respective
successors and assigns thereof whether so expressed or not.
SECTION 11.03. Limitation of Rights to Parties,
the Corporation and Bondholders. Nothing in this Indenture
or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the City, the
Trustee, the Corporation and the Holders of the Bonds, any
legal or equitable right, remedy or claim under or in respect
of this Indenture or any covenant, condition or provision
therein or herein contained; and all such covenants,
conditions and provisions are and shall be held to be for the
sole and exclusive benefit of the City, the Trustee, the
Corporation and the Holders of the Bonds.
SECTION 11.04. Waiver of Notice. Whenever in this
Indenture the giving of notice by mail or otherwise is
required, the giving of such notice may be waived in writing
by the person entitled to receive such notice and in any such
case the giving or receipt of such notice shall not be a
condition precedent to the validity of any action taken in
reliance upon such waiver.
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SECTION 11.05. Destruction of Bonds. Whenever in
this Indenture provision is made for the cancellation by the
Trustee and the delivery to the City of any Bonds, the
Trustee shall, in lieu of such cancellation and delivery,
destroy such Bonds (in the presence of an officer of the
City, if the City shall so require), and deliver a
certificate of such destruction to the City.
SECTION 11.06. Severability of Invalid Provisions.
If anyone or more of the provisions contained in this
Indenture or in the Bonds shall for any reason be held to be
invalid, illegal or unenforceable in any respect, then such
provision or provisions shall be deemed severable from the
remaining provisions contained in this Indenture and such
invalidity, illegality or unenforceability shall not affect
any other provision of this Indenture, and this Indenture
shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein. The
City hereby declares that it would have entered into this
Indenture and each and every other Section, paragraph,
sentence, clause or phrase hereof and authorized the issuance
of the Bonds pursuant thereto irrespective of the fact that
anyone or more Sections, paragraphs, sentences, clauses or
phrases of this Indenture may be held illegal, invalid or
unenforceable.
SECTION 11.07. Notice to City, Corporation and
Trustee. Any notice to or demand upon the Trustee may be
served or presented, and such demand may be made, at the
principal corporate trust office of the Trustee in Los
Angeles, California, which at the date of adoption of this
Indenture is located at 333 South Beaudry Avenue, W24-30, Los
Angeles, California 90017, Attention: Corporate Trust
Division #____, or at such other address as may have been
filed in writing by the Trustee with the City. Any notice to
or demand upon the City or the Corporation shall be deemed to
have been sufficiently given or served for all purposes by
being deposited, postage prepaid, in a post office letter
box, addressed, as the case may be, to the City at 300 North
"0" Street, San Bernardino, California 92418, Attention:
Director, Redevelopment Agency of the City of San Bernardino
(or such other address as may have been filed in writing by
the City with the Trustee), or, to the Corporation at 1500
West Seventeenth Street, San Bernardino, CA 92411,
Attention: Administrator (or such other address as may have
been filed in writing by the Corporation with the Trustee).
SECTION 11.08. Evidence of Rights of Bondholders.
Any request, consent or other instrument required or
permitted by this Indenture to be signed and executed by
Bondholders may be in any number of concurrent instruments of
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substantially similar tenor and shall be signed or executed
by such Bondholders in person or by an agent or agents duly
appointed in writing. Proof of the execution of any such
request, consent or other instrument or of a writing
appointing any such agent, or of the holding by any person of
Bonds transferable by delivery, shall be sufficient for any
purpose of this Indenture and shall be conclusive in favor of
the Trustee and of the City if made in the manner provided in
this Section.
The fact and date of the execution by any person of
any such request, consent or other instrument or writing may
be proved by the certificate of any notary public or other
officer of any jurisdiction, authorized by the laws thereof
to take acknowledgments of deeds, certifying that the person
signing such request, consent or other instrument
acknowledged to him the execution thereof, or by an affidavit
of a witness of such execution duly sworn to before such
notary public or other officer.
The ownership of Bonds shall be proved by the
registration books maintained by the Trustee.
Any request, consent, or other instrument or
writing of the Holder of any Bond shall bind every future
Holder of the same Bond and the Holder of every Bond issued
in exchange therefor or in lieu thereof, in respect of
anything done or suffered to be done by the Trustee or the
City in accordance therewith or reliance thereon.
SECTION 11.09. Disqualified Bonds. In determining
whether the Holders of the requisite aggregate principal
amount of Bonds have concurred in any demand, request,
direction, consent or waiver under this Indenture, Bonds
which are owned or held by or for the account of the City or
the Corporation, or by any other obligor on the Bonds, or by
any person directly or indirectly controlling or controlled.
by, or under direct or indirect common control with, the City
or the Corporation or any other obligor on the Bonds, shall
be disregarded and deemed not to be Outstanding for the
purpose of any such determination. Bonds so owned which have
been pledged in good faith may be regarded as Outstanding for
the purposes of this Section if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to
vote such Bonds and that the pledgee is not a person directly
or indirectly controlling or controlled by, or under direct
or indirect common control with, the City or the Corporation
or any other obligor on the Bonds. In case of a dispute as
to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee.
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SECTION 11.10. Money Held for Particular Bonds.
The money held by the Trustee for the payment of the
interest, principal or Redemption Price due on any date with
respect to particular Bonds (or portions of Bonds in the case
of Bonds redeemed in part only) shall, on and after such date
and pending such payment, be set aside on its books and held
in trust by it for the Holders of the Bonds entitled thereto,
subject, however, to the provisions of Section 10.04.
SECTION 11.11. Funds and Accounts. Any fund
required by this Indenture to be established and maintained
by the Trustee may be established and maintained in the
accounting records of the Trustee, either as a fund or an
account, and may, for the purposes of such records, any
audits thereof and any reports or statements with respect
thereto, be treated either as a fund or as an account; but
all such records with respect to all such funds shall at all
times be maintained in accordance with customary standards of
the industry, to the extent practicable, and with due regard
for the requirements of Section 6.05 and for the protection
of the security of the Bonds and the rights of every holder
thereof.
SECTION 11.12. Article and Section Headings and
References. The headings or titles of the several Articles
and Sections hereof, and any table of contents appended to
copies hereof, shall be solely for convenience of reference
and shall not affect the meaning, construction or effect of
this Indenture.
All references herein to "Articles," "Sections" and
other subdivisions are to the corresponding Articles,
Sections or subdivisions of this Indenture; the words
"herein," "hereof," "hereby," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to
any particular Article, Section or subdivision hereof; and
words of the masculine gender shall mean and include words of
the feminine and neuter genders.
SECTION 11.13. Waiver of Personal Liability. No
member of the Common Council, officer, agent or employee of
the City shall be individually or personally liable for the
payment of the principal or Redemption Price of or interest
on the Bonds or be subject to any personal liability or
accountability by reason of the issuance thereof; but nothing
herein contained shall relieve any such member of the Common
Council, officer, agent or employee from the performance of
any official duty provided by law or by this Indenture.
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SECTION 11.14. Execution in Several Counterparts.
This Indenture may be executed in any number of counterparts
and each of such counterparts shall for all purposes be
deemed to be an original; and all such counterparts, or as
many of them as the City and the Trustee shall preserve
undestroyed, shall together constitute but one and the same
instrument.
SECTION 11.15. Governing Law. This Indenture
shall be construed in accordance with and governed by the
Constitution and laws of the State of California.
SECTION 11.16. Opinions of Bond Counsel. Whenever
in this Indenture it is required that prior to the taking of
any action an opinion of nationally recognized bond counsel
is required to be delivered to the effect that such action
will not adversely affect the exclusion of the interest on
the Bonds from gross income for federal income tax purposes,
and if such opinion is not given by Orrick, Herrington &
Sutcliffe, such opinion shall instead affirmatively state, in
a manner acceptable to the City and the Trustee, that
interest on the Bonds is excluded from gross income for
federal income tax purposes and will remain so after the
action in question. This Section shall apply in the same
fashion with respect to the affirmative opinion of any such
successor bond counsel.
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In WITNESS WHEREOF, CITY OF SAN BERNARDINO has
caused this Indenture to be signed in its name by its Mayor,
and its seal to be hereunto affixed and attested by its City
Clerk, and Security Pacific National Bank, in token of its
acceptance of the trusts created hereunder, has caused this
Indenture to be signed in its corporate name by one of its
authorized officers, all as of the day and year first above
written.
CITY OF SAN BERNARDINO
By
Mayor
(Seal]
Attest:
City Clerk
SECURITY PACIFIC NATIONAL BANK,
as Trustee
By
Authorized Officer
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EXHIBIT A
Description: The land referred to herein is situated in the
County of San Bernardino, State of California, and is
described as follows:
Parcel No.1:
Lots 109 through 115 of Tract No. 2852, in the City of San
Bernardino, County of San Bernardino, State of California, as
per map recorded in Book 40, page 29 of Maps, in the Office
of the County Recorder of said county.
Parcel No.2:
The north one-half of Lot 7, Block 59, Rancho San Bernardino,
in the City of San Bernardino, County of San Bernardino,
State of California, as per Map recorded in Book 7, Page 2,
of Maps, in the Office of the County Recorder of said county.
Except the south 30 feet thereof.
Also excepting the east 37.93 feet thereof.
Also excepting the west 10.57 feet of the east 48.5 feet of
the north 145.5 feet thereof.
2206m5/2166m5
2206m5/2166m5
EXHIBIT B
[Permitted Encumbrances -- to come
from Title Report and UCC Search]
OH&S
DRAFT
10/11/89
CITY OF SAN BERNARDINO
and
SAN BERNARDINO COMMUNITY HOSPITAL
LOAN AGREEMENT
Dated as of November 1, 1989
CITY OF SAN BERNARDINO
HOSPITAL REVENUE REFUNDING BONDS
(SAN BERNARDINO COMMUNITY HOSPITAL)
SERIES 1989
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TABLE OF CONTENTS
Section
Parties
Preambles
ARTICLE I
DEFINITIONS
1.1 Definitions
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION;
FINDINGS OF THE CITY
2.1 Representations and Warranties of the
Corporation . . .
2.2 Findings of the City. . . . . . . . .
ARTICLE III
ISSUANCE OF BONDS; LOAN OF PROCEEDS
3.1 Bonds
ARTICLE IV
REPAYMENT OF LOANS
4.1 Loan Repayments . . . . . . . . . .
4.2 Additional Payments . . . . . . . .
4.3 Security for Corporation's Obligations
4.4 Gross Revenue Fund. . . .
4.5 Depreciation Reserve Fund
4.6 Obligations of the Corporation
Unconditional; Net Contract
4.7 Prepayment. . . . . . . . .
ARTICLE V
PARTICULAR COVENANTS
5.1 Maintenance of Corporate Existence
of the Corporation; Consolidation, Merger,
Sale or Transfer Under Certain Conditions
5.2 Accreditation and Licensing
5.3 Limitation on Encumbrances . . . . . . . .
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Page
1
1
2
Section
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
5.12
5.13
5.14
Parity Debt.. ....
Accounting Records, Financial
Statements and Budget .
Tax Covenants. ....
Limitation on Disposition of Facilities and Cash
Special Services Covenant
Rates and Charges; Debt Coverage
Limitation on Indebtedness
Limitation on Acquisition of Properties
Corporate Organization . . .
Transfer of Assets
Prohibited Uses .
ARTICLE VI
MAINTENANCE, TAXES, INSURANCE AND CONDEMNATION
6.1 Maintenance and Operation of the
Facilities . . . .
6.2 Taxes, Assessments, Other Governmental
Charges and Utility Charges .
6.3 Insurance Required . . . .
6.4 Worker's Disability Compensation Act
6.5 Insurers; Policy Forms and Loss Payees
6.6 Title Insurance.
6.7 Disposition of Insurance and Condemnation
Proceeds
7.1
7.2
7.3
ARTICLE VII
NON-LIABILITY OF CITY; EXPENSES; INDEMNIFICATION
Non-Liability of City
Expenses
Indemnification .
ARTICLE VIII
LOAN DEFAULT EVENTS AND REMEDIES
8.1 Loan Default Events.
8.2 Remedies on Default.
8.3 Remedies Not Exclusive; No waiver
of Rights . .
8.4 Expenses on Default
8.5 Notice of Default.
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11
Page
Section
8.1
8.2
8.3
8.4
8.5
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
9.9
9.10
9.11
Page
ARTICLE VIII
LOAN DEFAULT EVENTS AND REMEDIES
Loan Default Events .
Remedies on Default .
Remedies Not Exclusive; No Waiver
of Rights .
Expenses on Default
Notice of Default .
ARTICLE IX
MISCELLANEOUS
Further Assurances
Amendment of Indenture
Notices .
Governing Law .
Binding Effect
Severability of Invalid Provisions
Article and Section Headings and
References . . . .
Agreement Represents Complete
Agreement; Amendments .
Execution of Counterparts . .
Term of Loan Agreement
Waiver of Personal Liability
Execution .
Appendix A
2164m5
III
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of November I, 1989,
between CITY OF SAN BERNARDINO, a municipal corporation and
charter city duly organized and existing under and by virtue
of the constitution and laws of the State of California (the
"City"), and SAN BERNARDINO COMMUNITY HOSPITAL, a nonprofit
public benefit corporation duly organized and existing under
the laws of the State of California (the "Corporation"),
WIT N E SSE T H:
WHEREAS, the City has the right and power to make
and enforce all laws and regulations in respect to municipal
affairs and certain other matters in accordance with and as
more particularly provided in Sections 3, 5 and 7 of
Article XI of the Constitution of the State of California and
Section 40 of the charter of the City (the "Charter");
WHEREAS, the Common Council of the City, acting
under and pursuant to the powers reserved to the City under
Sections 3, 5 and 7 of Article XI of the Constitution of the
State of California, Section 40 of the Charter, has duly
enacted and amended Ordinance No. 3815 of the City (the
"Law"), establishing a procedure for the authorization, sale
and issuance of revenue bonds by the City for the purpose,
inter alia, of making loans to exempt persons within the
meaning of the Code as provided in the Law;
WHEREAS, the City, for the benefit of the
Corporation, issued the City of San Bernardino Insured
Hospital Revenue Bonds (San Bernardino Community Hospital
Series 1985A (the "Prior Bonds");
WHEREAS, the Corporation has requested the
assistance of the City in the refunding of the Prior Bonds;
WHEREAS, after due investigation and deliberation,
the City has approved said request of the Corporation and has
determined to issue its Hospital Revenue Refunding Bonds (S~n
Bernardino Community Hospital), Series 1989 (the "Bonds"), in
the aggregate principal amount of million dollars
($__,000,000), pursuant to the Law and an indenture, dated as
of November I, 1989 (the "Indenture"), between the City and
Security Pacific National Bank, as trustee, in order to fund
a loan to the Corporation for the purposes and on the terms
and conditions herein provided;
WHEREAS, the City and the Corporation each has duly
authorized the execution and delivery of this Loan Agreement;
2164m5
NOW, THEREFORE, for and in consideration of the
premises and the material covenants hereinafter contained,
the parties hereto hereby formally covenant, agree and bind
themselves as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Unless the context
clearly otherwise requires, the capitalized terms in this
Loan Agreement shall have the meanings specified in the
Indenture.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION;
FINDINGS OF THE CITY
SECTION 2.1. Representations and Warranties of the
Corporation. The Corporation makes the following
representations and warranties to the City that as of the
date of delivery of the Bonds to the initial purchaser(s)
thereof (such representations and warranties to remain
operative, true and in full force and effect regardless of
delivery of the Bonds or any investigations by or on behalf
of the City or the results thereof):
(a) The Corporation is a nonprofit public benefit
corporation duly formed and in good standing under the
laws of the State of California, has full legal right,
power and authority to enter into this Loan Agreement
and the Escrow Agreement and to carry out and consummate
all transactions contemplated by this Loan Agreement and
the Escrow Agreement, and by proper corporate action has
duly authorized the execution and delivery of this Loan
Agreement and the Escrow Agreement.
(b) The officer or officers of the Corporation
executing this Loan Agreement and the Escrow Agreement
are duly and properly in office and fully authorized to
execute the same.
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(c) This Loan Agreement and the Escrow Agreement
have been duly authorized, executed and delivered by the
Corporation and (i) this Loan Agreement, when assigned
to the Trustee pursuant to the Indenture, constitute the
legal, valid and binding agreement of the Corporation to
the Trustee enforceable against it in accordance with
its terms for the benefit of the Holders of the Bonds,
and (ii) any rights of the City and obligations of the
Corporation under the Loan Agreement not so assigned to
the Trustee constitute the legal, valid, and binding
agreements of the Corporation enforceable against the
Corporation in accordance with its terms; except as
enforcement hereof and thereof may be limited by
bankruptcy, insolvency, or other laws affecting the
enforcement of creditors' rights generally and by the
application of equitable principles if equitable
remedies are sought.
(d) The execution and delivery of this Loan
Agreement and the Escrow Agreement, the consummation of
the transactions herein and therein contemplated and the
fulfillment of or compliance with the terms and
conditions hereof and thereof, will not conflict with or
constitute a violation or breach of or default by the
Corporation (with due notice or the passage of time or
both) under the articles of incorporation of the
Corporation, its bylaws or, to the knowledge of the
Corporation, any applicable law or administrative rule
or regulation, or any applicable court or administrative
decree or order, or any indenture, mortgage, deed of
trust, loan agreement, lease, contract or other
agreement or instrument to which the Corporation is a
party or by which it or its properties are otherwise
subject or bound, or result in the creation or
imposition of any prohibited lien, charge or encumbrance
of any nature whatsoever upon any of the property or
assets of the Corporation, which conflict, violation,
breach, default, lien, charge or encumbrance might have
consequences that would materially and adversely affect
the consummation by the Corporation of the transactions
contemplated by this Loan Agreement or the Escrow
Agreement, or the financial condition, assets,
properties or operations of the Corporation or its
properties.
(e) No consent or approval of any trustee or
holder of any indebtedness of the Corporation, and no
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consent, permission, authorization, order or license of,
or filing or registration with, any governmental
authority is necessary in connection with the execution
and delivery by the Corporation of this Loan Agreement
or the Escrow Agreement, or the consummation by the
Corporation of any transaction herein or therein
contemplated, except as have been obtained or made and
as are in full force and effect.
(f) The Corporation is an acute care hospital
which operates "health facilities" in the City as those
terms are defined in the Law.
(g) Except as disclosed in the Official Statement
for the Bonds, there is no action, suit, proceeding,
inquiry or investigation, before or by any court or
federal, state, municipal or other governmental
authority, to the knowledge of the Corporation after
reasonable investigation, pending or threatened against
or affecting the Corporation or the assets, properties
or operations of the Corporation which, if determined
adversely to the Corporation or its interests, would
have a material adverse effect upon the consummation of
the transactions contemplated by or the validity of this
Loan Agreement or the Escrow Agreement, or upon the
financial condition, assets, properties or operations of
the Corporation, and the Corporation is not in default
with respect to any order or decree of any court or any
order, regulation or demand of any federal, state,
municipal or other governmental authority, which default
might have consequences that would materially and
adversely affect the consummation of the transactions
contemplated by this Loan Agreement, the Escrow
Agreement, or the financial condition, assets,
properties or operations of the Corporation or its
properties. All tax returns (federal, state and local)
required to be filed by or on behalf of the Corporation
have been filed, and all taxes shown thereon to be due,
including interest and penalties, except such, if any,
as are being actively contested by the Corporation in
good faith, have been paid or adequate reserves have
been made for the payment thereof, which reserves, if
any, are reflected in the financial statements described
in subsection (h) of this Section. The Corporation
enjoys the peaceful and undisturbed possession of all of
the premises upon which it is operating as a health care
institution.
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(h) The audited balance sheet of the Corporation
at June 30, 1989 and the related statements of revenue
and expenses, changes in fund balances and changes in
financial position for the year ended on such date
(copies of which, certified by , independent
certified public accountants, have been furnished to the
City), fairly state the financial position of the
Corporation at June 30, 1989 and the results of
operations for the year ended on such date, with such
exceptions as may be disclosed in such certificate, and
since June 30, 1989 there has been no material adverse
change in the financial condition or results of
operations of the Corporation or otherwise.
(i) No written information, exhibit or report
furnished to the City by the Corporation in connection
with the negotiation of this Loan Agreement or the
Escrow Agreement contains any untrue statement of a
material fact or omits to state a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they
were made, not misleading.
(j) The information pertaining to the Corporation
in the Official Statement for the Bonds does not contain
any untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading.
(k) The Corporation is an organization described
in Section 501(c)(3) of the Code and is exempt from
federal income tax under Section 501(a) of the Code.
(1) The Corporation has good and marketable title
to the Facilities free and clear from all encumbrances
other than Permitted Encumbrances.
(m) The Corporation does not restrict admission to
its health facilities on racial or religious grounds.
SECTION 2.2. Findings of the City. The City
hereby finds and determines that (i) the Corporation is a
"participating health institution" and the Facilities
constitute a "health facility" as such terms are defined in
the Law; (ii) the loan to be made hereunder with the proceeds
of the Bonds will promote the purposes of the Law by
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2164m5
providing funds to refund the Prior Bonds, the proceeds of
which were used to pay the cost of financing and refinancing
the construction, renovation, expansion and improvements to,
and equipping of, a health facility; and (iii) said loan is
in the public interest, serves a public purpose, promotes the
health, welfare and safety of the citizens of the City, and
constitutes a municipal affair.
ARTICLE III
ISSUANCE OF BONDS; LOAN OF PROCEEDS
SECTION 3.1. Bonds. The City has authorized the
issuance of the Bonds pursuant to the Indenture in the
aggregate principal amount of million dollars
($__,000,000). The City hereby lends and advances to the
Corporation and the Corporation hereby borrows and accepts
from the City (solely from the proceeds of the sale of the
Bonds) said principal amount, to be applied under the terms
and conditions of this Loan Agreement and the Indenture. The
Corporation hereby approves the Indenture, the assignment
thereunder to the Trustee of the right, title and interest of
the City (with certain exceptions specified in Section 5.01
in the Indenture) in this Loan Agreement, and the issuance
under the Indenture by the City of the Bonds.
ARTICLE IV
REPAYMENT OF LOANS
SECTION 4.1. Loan Repayments. In consideration of
the issuance of the Bonds by the City and the loan of the
proceeds thereof to the Corporation, the Corporation agrees
that, on or before the first day of each month and as long as
any of the Bonds remain Outstanding, it shall pay to the
Trustee for deposit in the Revenue Fund such amount as is
required by the Trustee to make the transfers and deposits
required in such month by Section 5.02 of the Indenture.
Notwithstanding the foregoing, if ten business days prior to
any interest or principal payment date with respect to the
Bonds, the aggregate amount in the Principal Account and
Interest Account is for any reason insufficient or
unavailable to make the required payments of principal (or
Redemption Price) of or interest on the Bonds then becoming
due (whether by maturity, redemption or acceleration), the
Corporation shall forthwith pay the amount of any such
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deficiency to the Trustee. Each payment by the Corporation
to the Trustee hereunder (the "Loan Repayments") shall be in
lawful money of the United States of America and paid to the
Trustee at its principal corporate trust office in Los
Angeles, California, and held, invested, disbursed and
applied as provided in the Indenture.
SECTION 4.2. Additional Payments. In addition to
Loan Repayments, the Corporation shall also pay to the City
or to the Trustee, as the case may be, "Additional Payments,"
as follows:
(a) All taxes and assessments of any type or
character charged to the City or to the Trustee
affecting the amount available to the City or the
Trustee from payments to be received hereunder or in any
way arising due to the transactions contemplated hereby
(including taxes and assessments assessed or levied by
any public agency or governmental authority of
whatsoever character having power to levy taxes or
assessments) but excluding franchise taxes based upon
the capital and/or income of the Trustee and taxes based
upon or measured by the net income of the Trustee;
provided, however, that the Corporation shall have the
right to protest any such taxes or assessments and to
require the City or the Trustee, at the Corporation's
expense, to protest and contest any such taxes or
assessments levied upon them and that the Corporation
shall have the right to withhold payment of any such
taxes or assessments pending disposition of any such
protest or contest unless such withholding, protest or
contest would adversely affect the rights or interests
of the City or the Trustee;
(b) All fees, charges and expenses of the Trustee
under the Indenture, as and when the same become due and
payable;
(c) The reasonable fees and expenses of such
accountants, consultants, attorneys and other experts as
may be engaged by the City or the Trustee to prepare
audits, financial statements, reports, opinions or
provide such other services required under this Loan
Agreement, the Indenture or the Escrow Agreement; and
(d) The reasonable fees and expenses of the City
(including the reasonable fees and expenses of its
attorneys) in connection with this Loan Agreement, the
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Bonds, the Indenture or the Escrow Agreement, including
any and all expenses incurred in connection with the
authorization, issuance, sale and delivery of any such
Bonds or in connection with any litigation which may at
any time be instituted involving this Loan Agreement,
the Bonds, the Indenture or the Escrow Agreement or any
of the other documents contemplated thereby, or
otherwise in connection with the administration of this
Loan Agreement.
Such Additional Payments shall be billed to the
Corporation by the City or the Trustee from time to time,
together with a statement certifying that the amount billed
has been incurred or paid by the City or the Trustee for one
or more of the above items. After such a demand, amounts so
billed shall be paid by the Corporation within thirty (30)
days after receipt of the bill by the Corporation.
Additionally, the Corporation shall pay to the
Trustee the amounts required to be deposited into the
Depreciation Reserve Fund in Section 4.5 hereof and to make
up any deficiencies in the Bond Reserve Account as a result
of the annual valuation of amounts on deposit therein as
provided in Section 5.05 of the Indenture.
SECTION 4.3. Security for Corporation's
Obligations. In consideration of the issuance of the Bonds
by the City and the loan of the proceeds thereof to the
Corporation, and to secure the payment of Loan Repayments and
Additional Payments and the performance of the other
obligations of the Corporation hereunder, the Corporation
hereby grants to the [Trustee as assignee of] City a security
interest in the Facilities. The Corporation agrees to
execute and cause to be filed Uniform Commercial Code
financing statements in form and substance satisfactory to
the Trustee, and to execute and deliver such other documents
as the City or the Trustee may reasonably require in order to
perfect and continuously maintain as perfected such security
interest or give public notice thereof.
SECTION 4.4. Gross Revenue Fund.
(a) The Corporation agrees that, so long as
any of the Bonds remain Outstanding or any Additional
Payments remain unpaid, all of the Gross Revenues of the
Corporation shall be deposited as soon as practicable upon
receipt in a fund designated as the "Gross Revenue Fund"
which the Corporation shall establish and maintain, subject
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to the provisions of subsection (b) of this Section, at such
banking institution or institutions as the Corporation shall
from time to time designate in writing to the Trustee for
such purpose (the "Depository Bank(s)"). Subject only to the
provisions of this Agreement permitting the application
thereof for the purposes and on the terms and conditions set
forth herein, the Corporation hereby pledges to the Trustee
and to the extent permitted by law grants a security interest
to the Trustee in, the Gross Revenue Fund and all of the
Gross Revenues of the Corporation to secure the payment of
Loan Repayments and Additional Payments, any payment required
with respect to Parity Debt and the performance by the
Corporation of its other obligations under this Agreement.
The Corporation shall execute and cause to be filed Uniform
Commercial Code financing statements in order to perfect such
security interest and give public notice thereof, shall
execute and cause to be sent to each Depository Bank a notice
of the security interest granted hereunder and shall execute
and deliver such other documents (including, but not limited
to, continuation statements) as may be necessary or
reasonably requested by the City or the Trustee in order to
perfect and continuously maintain as perfected such security
interest or give public notice thereof.
(b) Amounts in the Gross Revenue Fund may be used
and withdrawn by the Corporation at any time for any lawful
purpose, except as hereinafter provided. In the event that
there is a Loan Default Event, but only with respect to the
payment of any Loan Repayment or any payment required with
respect to Parity Debt as provided in subsections 8.l(a) and
(e), the City or the Trustee shall notify the Corporation and
the Depository Bank(s) of such Loan Default Event, and,
unless such Loan Repayment or payment with respect to Parity
Debt is paid within five days after receipt of such notice,
the Depository Bank(s) shall transfer the Gross Revenue Fund
to the name and credit of the Trustee. The Gross Revenue
Fund shall remain in the name and to the credit of the
Trustee until the amounts on deposit in said fund are
sufficient to pay in full, or have been used to pay in full,
all Loan Repayments, Additional Payments and payments with
respect to Parity Debt and all other Loan Default Events and
events of default with respect to Parity Debt known to the
Trustee shall have been made good or cured to the
satisfaction of the Trustee or provision deemed by the
Trustee to be adequate shall have been made therefor,
whereupon the Gross Revenue Fund (except for the Gross
Revenues required to make such payments or cure such
defaults) shall be returned to the name and credit of the
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Corporation. During any period that the Gross Revenue Fund
is held in the name and to the credit of the Trustee, the
Trustee shall use and withdraw amounts in said fund from time
to time to make Loan Repayments, Additional Payments,
payments to the Depreciation Reserve Fund and the other
payments required of the Corporation under this Agreement or
with respect to any Parity Debt as such payments become due
(whether by maturity, redemption, acceleration or otherwise),
and, if such amounts shall not be sufficient to pay in full
all such payments due on any date, then to the payment of
Loan Repayments and Debt Service on such Parity Debt ratably,
according to the amounts due respectively for Loan Repayments
and such Debt Service, without any discrimination or
preference, and to such other payments in the order which the
Trustee, in its discretion, shall determine to be in the best
interests of the holders of the Bonds and such Parity Debt,
without discrimination or preference. During any period that
the Gross Revenue Fund is held in the name and to the credit
of the Trustee, the Corporation shall not be entitled to use
or withdraw any of the Gross Revenues of the Corporation
unless and to the extent that the Trustee at its sole
discretion so directs for the payment of current or past due
operating expenses of the Corporation; provided, however,
that the Corporation shall be entitled to use or withdraw any
amounts in the Gross Revenue Fund which do not constitute
Gross Revenues of the Corporation. The Corporation agrees to
execute and deliver all instruments as may be required to
implement this Section. The Corporation further agrees that
a failure to comply with the terms of this Section shall
cause irreparable harm to the holders from time to time of
the Bonds and of Parity Debt, and shall entitle the Trustee,
with or without notice, to take immediate action to compel
the specific performance of the obligations of the
Corporation as provided in this Section.
(c) Notwithstanding the foregoing, the
Corporation may pledge, encumber and grant security interests
in its Gross Revenues in connection with any Parity Debt
incurred in accordance with Section 5.4 hereof, or in
connection with liens on the Facilities, or any portion
thereof, incurred in accordance with Section 5.3 hereof.
(d) Notwithstanding the foregoing, the
Corporation may also pledge, encumber and grant security
interests in its net accounts receivable (which security
interests may be prior to the security interest granted to
the Trustee under this Agreement) to secure indebtedness
incurred pursuant to Section 5.10 hereof provided that the
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aggregate amount of indebtedness so secured may not exceed at
the time of incurrence fifteen percent (15%) of Adjusted
Annual Operating Revenues as shown on the Corporation's
audited financial statements for the most recent Fiscal Year
for which audited financial statements are available.
SECTION 4.5. Depreciation Reserve Fund. The
Corporation shall pay to the Trustee for deposit in the
Depreciation Reserve Fund established in the Indenture the
following amounts on or before the following dates:
Date Deposit Amount
July 1, 1990 $671,000
July 1, 1991 $635,000
July 1, 1992 $599,000
July 1, 1993 $539,000
July 1, 1994 $520,000
July 1, 1995 $481,000
July 1, 1996 $423,000
July 1, 1997 $368,000
July 1, 1998 $284,000
July 1, 1999 $224,000
July 1, 2000 $204,000
July 1, 2001 $184,000
July 1, 2002 $162,000
July 1, 2003 $138,000
The Corporation may reduce the Depreciation Reserve
Fund deposit by Depreciation Reserve Fund deposit credits
which shall be amounts equal to any amount the Corporation
has expended for depreciable property (as described herein)
during the then current Fiscal Year until the day of such
deposit; provided that, the Corporation certifies to the
Trustee at the time of payment of the Depreciation Reserve
Fund deposit (1) the amount of the expenditure, (2) the
election of the Corporation to have this amount credited
against the then currently payable Depreciation Reserve Fund
deposit, (3) that the property acquired is depreciable, in
accordance with generally accepted accounting principles, and
has been included as a part of the Facilities, and (4) such
amount has not previously been paid from the Depreciation
Reserve Fund or used as a Depreciation Reserve Fund deposit
credit.
SECTION 4.6. Obligations of the Corporation
Unconditional; Net Contract. The obligations of the
Corporation to make the Loan Repayments and Additional
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Payments required hereunder and to perform and observe the
other agreements on its part contained herein shall be
absolute and unconditional, and shall not be abated, rebated,
set-off, reduced, abrogated, terminated, waived, diminished,
postponed or otherwise modified in any manner or to any
extent whatsoever, while any Bonds remain Outstanding or any
Additional Payments remain unpaid, regardless of any
contingency, act of God, event or cause whatsoever,
including, without limiting the generality of the foregoing,
any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, the taking
by eminent domain or destruction of or damage to the
Facilities, commercial frustration of purpose, any change in
the laws of the United States of America or of the State of
California or any political subdivision of either or in the
rules or regulations of any governmental authority, or any
failure of the City or the Trustee to perform and observe any
agreement, whether express or implied, or any duty, liability
or obligation arising out of or connected with this Loan
Agreement or the Indenture. This Loan Agreement shall be
deemed and construed to be a "net contract," and the
Corporation shall pay absolutely net the Loan Repayments,
Additional Payments and all other payments required
hereunder, regardless of any rights of set-off, recoupment,
abatement or counterclaim that the Corporation might
otherwise have against the City or the Trustee or any other
party or parties.
SECTION 4.7. Prepayment. The Corporation shall
have the right at any time or from time to time to prepay all
or any part of the Loan Repayments and the City agrees that
the Trustee shall accept such prepayments when the same are
tendered by the Corporation. All such prepayments (and the
additional payment of any amount necessary to pay the
applicable premiums, if any, payable upon the redemption of
Bonds) shall be deposited upon receipt in the Optional
Redemption Account and, at the Request of the Corporation,
credited against Loan Repayments in order of their due date
or used for the redemption or purchase of Outstanding Bonds
in the manner and subject to the terms and conditions set
forth in the Indenture. The Corporation also shall have the
right to surrender Bonds acquired by it in any manner
whatsoever, to the Trustee for cancellation, and such Bonds,
upon such surrender and cancellation, shall be deemed to be
paid and retired, and in the case of Term Bonds shall be
allocated as set forth in the Indenture. Notwithstanding any
such prepayment or surrender of Bonds, as long as any Bonds
remain Outstanding or any Additional Payments remain unpaid,
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the Corporation shall not be relieved of its obligations
hereunder.
If the Corporation is not in default in the payment
of any Additional Payments, the City, at the request of the
Corporation, at any time that there is on deposit with the
Trustee moneys or securities in the amount necessary to pay
or redeem all Bonds Outstanding (as provided in Article X of
the Indenture), shall forthwith take all steps that may be
necessary to discharge the entire indebtedness on all Bonds
Outstanding.
ARTICLE V
PARTICULAR COVENANTS
SECTION 5.1. Maintenance of Corporate Existence of
the Corporation; Consolidation, Merger, Sale or Transfer
Under Certain Conditions. The Corporation covenants and
agrees that it will maintain its existence as a California
nonprofit public benefit corporation, and will not dissolve,
sell or otherwise dispose of all or substantially all of its
assets nor consolidate with or merge into another corporation
or permit one or more other corporations to consolidate with
or merge into it. Notwithstanding the foregoing, the
Corporation may, without violating the covenants contained In
this Section, consolidate with or merge into another
corporation, or permit one or more other corporations to
consolidate with or merge into it, or sell or otherwise
transfer to another corporation all or substantially all of
its assets (other than as permitted in Sections 5.7, 5.12 and
5.13 hereof) as an entirety and thereafter dissolve, if:
(1) The surviving, resulting or transferee
corporation, as the case may be:
(a) is a California nonprofit corporation or
a nonprofit corporation qualified to do business in
California;
(b) qualifies under the Law as a "health
facility";
(c) assumes in writing, if such corporation
is not the Corporation, all of the obligations of
the Corporation under this Loan Agreement;
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(d) is not, after such transaction, otherwise
in default under any provisions of this Loan
Agreement;
(e) is an organization described in
Section 501(c)(3) of the Code, or a corresponding
provision of the federal income tax laws then in
effect; and
(f) is licensed and certified to the extent
required of the Corporation by this Loan Agreement;
(2) The Trustee shall have received an Opinion of
Counsel (who, in the case of the opinion required by
clause (a) below, shall be experienced in matters
relating to the exclusion from gross income for federal
income tax purposes of interest on obligations of the
same general type as the Bonds) to the effect that:
(a) such merger, consolidation, sale or other
transfer will not cause interest on the Bonds to be
included in gross income for federal income tax
purposes; and
(b) the security interests referred to in
Sections 4.3, 4.4 and 4.5 will not be adversely
affected by such merger, consolidation, sale or
other transfer;
(3) The Trustee and the City shall have received
the report of a Management Consultant to the effect that
the Net Income Available for Debt Service of the
surviving, resulting or transferee corporation (after
giving effect to such merger, consolidation, sale or
other transfer) for each of the first three full Fiscal
years following such merger, consolidation, sale or
other transfer is projected to be at least equal to the
Net Income Available for Debt Service of the Corporation
for the Fiscal Year immediately preceding such merger,
consolidation, sale or other transfer; and
(4) The Trustee and the City shall have received a
report of an Accountant to the effect that the net worth
of the surviving, resulting or transferee corporation,
as the case may be, after giving effect to such merger,
consolidation, sale or other transfer, is at least equal
to the net worth of the Corporation immediately prior to
such merger, consolidation, sale or other transfer.
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If a merger, consolidation, sale or other transfer
is effected, as provided in this Section, the provisions of
this Section shall continue in full force and effect and no
further merger, consolidation, sale or transfer shall be
effected except in accordance with the provisions of this
Section.
SECTION 5.2. Accreditation and Licensing. The
Corporation covenants and agrees (as long as it is in the
best interest of the Corporation and will not materially
adversely affect the interests of the Bondholders) to
maintain (1) all permits, licenses, certifications and other
governmental approvals necessary for the operation of the
Facilities as a health care institution, (2) accreditation by
the Joint Commission on Accreditation of Healthcare
Organizations or such other accrediting body generally
accepted in the health care industry and (3) its
qualification for participation in and payment under private
insurance programs having broad application and federal,
state and local governmental programs providing for payment
or reimbursement for services rendered.
SECTION 5.3. Limitation on Encumbrances. (A) The
Corporation covenants and agrees that, from and after the
date of delivery of this Agreement, it will not create,
assume or suffer to exist any mortgage, deed of trust,
pledge, security interest, encumbrance, lien or charge of any
kind (including the charge upon property purchased under
conditional sales or other title retention agreements) (a
"security interest") upon the Facilities prior to or on a
parity with the security interests granted hereunder;
provided, however, that notwithstanding the foregoing
provision, the Corporation may create, assume or suffer to
exist Permitted Encumbrances with respect to the Facilities.
(B) The Corporation further covenants and agrees
that it will not create, assume or suffer to exist any
pledge, security interest, encumbrance, lien or charge of any
kind (an "encumbrance") upon the Gross Revenues unless the
obligations of the Corporation under this Agreement shall be
secured prior to or on a parity with any indebtedness or
other obligation secured by such encumbrance, and the
Corporation further covenants and agrees that if such an
encumbrance is created, it will make or cause to be made a
provision whereby the obligations of the Corporation under
this Agreement will be secured prior to or on a parity with
the indebtedness or other obligation secured by such
encumbrance; provided, however, that notwithstanding the
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foregoing provisions and without further securing the
obligations of the Corporation under this Agreement, the
Corporation may create, assume or suffer to exist Permitted
Encumbrances with respect to the Facilities.
SECTION 5.4. Parity Debt. The Corporation may
incur Parity Debt, subject, however, to the terms of Section
5.10 hereof, and following conditions:
(1) The agreement under which the Parity Debt
is issued shall require that:
(a) A Loan Default Event shall
constitute an event of default under such
agreement;
(b) Rights and obligations of the
holders of Parity Debt shall be substantially
the same as the rights and obligations of the
Holders of Bonds under the Indenture; and
(c) Remedies upon an event of default
shall be substantially the same as the
remedies provided in the Indenture and Loan
Agreement and, prior to exercising any such
remedies, the holders of such Parity Debt (or
a trustee representing their interests) shall
be required to cooperate with the Trustee to
the end that the interests of such holders and
the Bondholders shall be equally protected; and
(2) Any collateral given or to be given to
secure Parity Debt shall also secure the Bonds on a
pari passu basis; provided that the Bond Reserve
Account shall only secure the Bonds and the
Corporation may but need not establish similar
reserve accounts for debt service of Parity Debt.
SECTION 5.5. Accounting Records, Financial
Statements and Budget. (A) The Corporation covenants and
agrees at all times to keep, or cause to be kept, proper
books of record and account, prepared in accordance with
generally accepted accounting principles, in which complete
and accurate entries shall be made of all transactions of or
in relation to the business, properties and operations of the
Corporation. Such books of record and account shall be
available for inspection by the City or the Trustee at
reasonable hours and under reasonable circumstances.
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(B) The Corporation covenants and agrees to
furnish the City (if requested by the City) and the Trustee,
within one hundred and twenty (120) days after the end of
each Fiscal Year, with copies of its complete financial
statements (including a balance sheet, a statement of
revenues and expenses, a statement of changes in fund
balances, a statement of changes in financial position and
such other financial reports and schedules as may have been
delivered to the Corporation in connection with such
financial statements), together with (1) the report and
opinion of an independent Accountant stating that the
financial statements have been prepared in accordance with
generally accepted accounting principles and that its
examination was performed in accordance with generally
accepted auditing standards, and (2) a Certificate of the
chief financial officer of the Corporation stating that no
event which constitutes a Loan Default Event or which with
the giving of notice or the passage of time or both would
constitute a Loan Default Event has occurred and is
continuing as of the end of such Fiscal Year, or specifying
the nature of such event and the actions taken and proposed
to be taken by the Corporation to cure such default.
(C) In order to assure the efficient management
and operation of the Facilities and to assure and protect the
holders of the Bonds, the Corporation shall each year prepare
a budget, prior to the closing of each Fiscal Year, to set
forth the estimated revenues and expenses anticipated for the
ensuing Fiscal Year. This budget shall be made available for
inspection by any Bondholder at the office of the
Corporation. If the budget is not so approved and adopted,
the budget for the then Fiscal Year shall remain in effect
until a new budget is approved.
SECTION 5.6. Tax Covenants.
(A) The Corporation covenants and agrees that it
will not use or permit the use by any Person of any of the
funds provided by the City hereunder or any other funds of
the Corporation, directly or indirectly, or direct the
Trustee to invest any funds held by it under the Indenture or
this Agreement, in such manner as would, or enter into, or
allow any "related person," as defined in Section 144(a)(3)
of the Code, to enter into, any arrangement, formal or
informal, that would, or take or omit to take any other
action that would, cause any Bond to be an "arbitrage bond"
within the meaning of Section 148(a) of the Code. The
Corporation acknowledges having read Sections 5.07 and 6.06
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of the Indenture and agrees to perform all duties imposed
upon it by such Sections and by the Rebate Certificate.
Insofar as such Sections and the Rebate Certificate impose
duties and responsibilities on the Corporation, they are
specifically incorporated herein by reference.
(B) The Corporation covenants and agrees that it
will maintain its status as an organization described in
Section 501(c}(3} of the Code and its exemption from federal
income tax under Section 501(a} of the Code. The Corporation
further covenants and agrees that it will not use or permit
the use of the Facilities by any person in such manner or to
such extent as would result in loss of exclusion from gross
income of interest on any of the Bonds under Section 103 of
said Code.
SECTION 5.7. Limitation on Disposition of
Facilities and Cash. (A) The Corporation covenants and
agrees that it will not sell, lease or otherwise dispose of
any part or parts of the Facilities in any Fiscal Year
aggregating in excess of the greater of two percent (2%) of
the Net Property, Plant and Equipment (as shown on the
Corporation's most recent audited financial statements) or
$200,000 other than in the ordinary course of business, as
part of a disposition of all or substantially all of its
assets as permitted by Section 5.1 hereof, or to an
Affiliated Corporation if the requirements of Section 5.12 or
5.13 hereof are met, unless:
(i) such property shall have become inadequate,
obsolete, worn-out, unsuitable, undesirable,
unprofitable or unnecessary, and the sale, lease,
removal or other disposition thereof will not impair the
structural soundness, efficiency or economic value of
the remaining Facilities; or
(ii) such property shall be replaced by property
with a fair market value at least equal to the fair
market value of the property so disposed of within two
years of the date of disposition; or
(iii) the proceeds of such disposition are
transferred to the Trustee for deposit in the Optional
Redemption Account and applied to the redemption of
Bonds.
(B) The Trustee shall execute any releases
required in connection with the disposition of property
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pursuant to this Section upon receipt from the Corporation of
such Certificates and appraisals as may be reasonably
requested by the Trustee.
(C) The Corporation covenants and agrees that it
will not dispose of any cash or cash equivalent other than in
the ordinary course of business; provided, however, that the
Corporation may dispose of cash or cash equivalent to the
extent and subject to the conditions and limitations
specified herein:
(i) prior to such disposition the Trustee shall
have received a report of a Management Consultant
stating either that (a) the projected Debt Service
Coverage Ratio for the Fiscal Year immediately following
such disposition, assuming such disposition occurred on
the first day of such Fiscal Year, shall be no lower
than 2.00, and will not be greater than ten percent
(10%) less than the Debt Service Coverage Ratio for the
immediately preceding Fiscal Year for which audited
financial statements are available, or (b) the average
of the projected Debt Service Coverage Ratios for the
two Fiscal Years immediately following such disposition,
assuming such disposition occurred on the first day of
the first of such Fiscal Years, shall not be less than
2.00 and will not be greater than ten percent (10%) less
than the average of the projected Debt Service Coverage
Ratios for such Fiscal Years without assuming such
disposition, or
(ii) prior to such disposition the Trustee shall
have received a Certificate of the Corporation stating
that such disposition plus all previous dispositions
pursuant to this section of cash or cash equivalent by
the Corporation do not exceed twenty percent (20%) of
the Corporation's gross operating revenues for the most
recent Fiscal Year for which audited financial
statements are available.
SECTION 5.8. Special Services Covenant. The
Corporation covenants and agrees that, as long as any Bonds
are Outstanding and subject to the provisions of Section 5.1,
it will, subject to applicable requirements or restrictions
imposed by law, operate a general acute care hospital within
the City. For the benefit of the City and its residents, the
Corporation further covenants and agrees that, subject to
applicable requirements or restrictions imposed by law, it
will provide the services described in Appendix A, as long as
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any Bonds are Outstanding (except as hereinafter in this
Section provided or as otherwise provided in Appendix A).
Notwithstanding the foregoing, the Corporation may terminate
one or more of the services described in Appendix A provided
that: (i) the Corporation continues to operate a general
acute care hospital within the City; (ii) the Corporation
notifies the City of its intent to terminate the service or
services; and (iii) the Corporation agrees to provide
additional or equivalent services for the benefit of the City
and its residents which, in the good faith opinion of the
Corporation, will result in the same or additional benefit to
the City and its residents. Further, the Corporation may,
without the consent of the City, terminate any service which,
in the opinion of the Corporation, becomes obsolete or
outmoded due to an advance in medical technique or technology.
Notwithstanding the provisions of Section 8.1,
failure to maintain at any time any of the services required
by this Section shall not constitute a Loan Default Event,
but, in the event of such failure, the City shall be entitled
to institute and prosecute an action in any court or before
any board or commission having jurisdiction to compel the
Corporation to comply with the covenant contained in this
Section and to exercise whatever other remedies (including an
action for damages) the City might have with respect thereto
arising from this Loan Agreement.
SECTION 5.9. Rates and Charges; Debt Coverage.
(A) The Corporation covenants and agrees to operate the
Facilities as a revenue producing health care facility. The
Corporation further covenants and agrees to fix, charge and
collect, or cause to be fixed, charged and collected, subject
to applicable requirements or restrictions imposed by law,
such rates, fees and charges for the use of and for the
services furnished or to be furnished at the Facilities
which, together with all other receipts and revenues of the
Corporation and any other funds available therefor, will be
reasonably projected to be sufficient in each Fiscal Year to
produce a Debt Service Coverage Ratio equal to at least 1.20;
provided, however, that if additional Funded Debt is issued,
the Debt Service on such additional Funded Debt shall be
included in the computation of Maximum Aggregate Annual Debt
Service and Net Income Available for Debt Service only in
proportion to the amount of Debt Service on such Funded Debt
payable from sources other than amounts (other than reserve
funds) capitalized from the proceeds of such Funded Debt; and
provided further that Debt Service with respect to
indebtedness for which the Corporation is a guarantor shall
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not be included in the computation of Maximum Aggregate
Annual Debt Service for purposes of this subsection (A) or
subsection (B) unless the Corporation has a current
obligation to make payments with respect to such indebtedness.
(B) Within one hundred fifty (150) days after the
end of each Fiscal Year (commencing with the Fiscal Year
during which the certificate required by Section 3.03(C)(1)
of the Indenture is delivered to the Trustee) the Corporation
shall compute Net Income Available for Debt Service and
promptly furnish to the Trustee a Certificate setting forth
the results of such computation. The Corporation further
covenants and agrees that if such Fiscal Year's Debt Service
Coverage Ratio shall have been less than 1.20 it will
promptly employ a Management Consultant to make
recommendations as to a revision of the rates, fees and
charges at the Facilities or the methods of operation of the
Facilities which will result in producing Net Income
Available for Debt Service in the amount required by
subsection (A) of this Section in the current Fiscal Year.
Copies of the recommendations of the Management Consultant
shall be filed with the Trustee. The Corporation shall,
promptly upon its receipt of such recommendations, subject to
applicable requirements or restrictions imposed by law, and
subject to a good faith determination of the board of
directors of the Corporation that such recommendations, in
whole or in part, are feasible, revise its rates, fees and
charges or its methods of operation or collection and shall
take such other action as shall be in conformity with such
recommendations. If the Corporation complies in all material
respects with the reasonable recommendations of the
Management Consultant in respect to said rates, fees, charges
and methods of operation, the Corporation will be deemed to
have complied with the covenants contained in this Section
for such Fiscal Year notwithstanding that Net Income
Available for Debt Service shall be less than the amount
required under subsection (A) of this Section; provided, that
this sentence shall not be construed as in any way excusing
the Corporation from taking any action or performing any duty
required under this Loan Agreement or be construed as
constituting a waiver of any other Loan Default Event.
(C) Notwithstanding the foregoing, the Corporation
may permit the rendering of service at, or the use of, the
Facilities without charge or at reduced charges, at the
discretion of the board of directors of the Corporation to
the extent necessary for maintaining its tax exempt status
and to eligibility for grants, loans, subsidies or payments
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from the United States of America, any instrumentality
thereof, or the State of California or any political
subdivision or instrumentality thereof, or in compliance with
any recommendation for free services that may be made by the
Management Consultant.
SECTION 5.10. Limitation on Indebtedness. The
Corporation covenants and agrees that it will not incur any
indebtedness or financial obligations by borrowing money, by
assuming or guaranteeing the obligations of others, by
entering into installment purchase contracts or leases
required to be capitalized in accordance with generally
accepted accounting principles, or otherwise (other than
Funded Debt, not for borrowed money, incurred in the ordinary
course of business); provided, however, that the Corporation
may incur Funded Debt, other than Funded Debt without
substantially level debt service involving a payment of 30%
or more of the principal amount of such Funded Debt in any
one Fiscal Year, for the following purposes and subject to
the following conditions and limitations:
(a) Liabilities for contributions to
self-insurance programs to the extent permitted by
Section 6.3 hereof;
(b) Funded Debt provided that the Trustee has
received:
(A) (1) a report of an Accountant stating
that the Corporation has been in compliance with
the provisions of Section 5.9(8) for the
immediately preceding two Fiscal Years for which
audited financial statements are available and
setting forth the Debt Service Coverage Ratios for
each such Fiscal Year, and (2) a report of a
Management Consultant stating that the projected
Debt Service Coverage Ratio, taking the proposed
Funded Debt into account, for (a) in the case of
Funded Debt (other than a guaranty) to finance
capital improvements, for each of the three Fiscal
Years succeeding the date on which such capital
improvements are expected to be in operation, or
(b) in the case of Funded Debt not financing
capital improvements or in the case of a guaranty,
for each of the three Fiscal Years succeeding the
date on which the Funded Debt is incurred, is not
less than 1.20; or
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(B) a report of an Accountant setting forth
the Debt Service Coverage Ratio for the two most
recent Fiscal Years for which audited financial
statements are available, computed as if such
proposed Funded Debt had been issued at the
beginning of the first such Fiscal Year, and such
Debt Service Coverage Ratio for each such Fiscal
Year is not less than 1.20;
(c) Funded Debt incurred for the purpose of
refinancing outstanding Funded Debt provided that the
Trustee shall have received a report of an Accountant to
the effect that the issuance of such Funded Debt does
not increase Maximum Aggregate Annual Debt Service by
more than five percent (5%);
(d) Funded Debt provided that the aggregate amount
incurred by the Corporation under this subsection and
outstanding shall not exceed at the time of incurrence
twenty-five percent (25%) of the Corporation's Adjusted
Annual Operating Revenues for the prior Fiscal Year;
(e) Installment purchase contracts, leases and
loans secured by purchase money mortgages or purchase
money security interests, provided that the aggregate
amount of indebtedness incurred by the Corporation
pursuant to such contracts, leases and loans shall not
exceed fifteen percent (15%) of the Corporation's gross
operating revenues shown on the Corporation's most
recent audited financial statements;
(f) Non-Recourse Indebtedness arising (A) in
connection with the Corporation's financing or
refinancing of real or personal property not theretofore
owned by the Corporation, or (B) in connection with the
Corporation's financing or refinancing of real or
personal property not constituting Facilities, whether,
in either case, such indebtedness be to the sellers of
such property or to banks or other lenders and whether,
in either case, such indebtedness be unsecured or
secured by liens on the property financed;
(g) Indebtedness for borrowed money with a term of
not exceeding 365 days (provided that the amount of such
indebtedness shall be reduced to zero (0) for a period
of at least thirty (30) consecutive days within each
calendar year) in an aggregate amount outstanding that
does not exceed at the time of incurrence ten percent
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(10%) of the Corporation's Adjusted Annual Operating
Revenues for the prior Fiscal Year; and
(h) Funded Debt in an amount exceeding the
limitations of this section which is fully secured by a
Permitted Encumbrance described in clause 15 of the
definition thereof.
SECTION 5.11. Limitation on Acquisition of
Properties. The Corporation covenants and agrees that it
will not acquire additional capital assets (except in the
ordinary course of business or with the proceeds of
indebtedness permitted by Section 5.10 or as a part of a
merger or consolidation permitted by Section 5.1) by gift,
purchase, construction, merger or consolidation unless:
(a) in the written opinion of an Authorized
Representative of the Corporation, such acquisition is
reasonably expected to increase the Corporation's
operating expenses by fifteen percent (15%) or less in
the first full Fiscal Year following the date on which
such acquisition is made or construction thereof
completed; or
(b) the Trustee shall have received the report of
a Management Consultant to the effect that Net Income
Available for Debt Service (including net revenues
expected to be derived from the assets proposed to be
acquired) for each of the first three Fiscal Years
immediately following the date on which such acquisition
is proposed to be made is expected to be at least 1.20
times Maximum Aggregate Annual Debt Service.
SECTION 5.12. Corporate Organization. Without
limiting any other provision of this Agreement, so long as a
Loan Default Event has not occurred and is continuing, the
Corporation may adopt new forms of corporate organization and
transfer assets owned or leased by it to one or more
Affiliated Corporations if (i) the transferee or transferees
shall expressly agree that the assets so transferred shall
continue to be treated as security for the performance of the
Corporation's obligations hereunder; provided, however, that
no assets so transferred shall be treated as security for the
Corporation's obligations hereunder unless such transferred
assets prior to transfer were treated as security for the
Corporation's obligations hereunder; (ii) immediately after
such transfer, the Corporation shall not be in default in the
performance or obligation of any duties, obligations or
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covenants under this Agreement; (iii) if the transfer is to a
for-profit corporation, the Corporation shall deliver to the
City and the Trustee an opinion of nationally recognized bond
counsel to the effect that such proposed transfer(s) will not
cause the exclusion from gross income for federal income tax
purposes of the interest on the Bonds to be impaired and an
opinion of counsel acceptable to the City and the Trustee to
the effect that (A) such proposed transaction(s) will not
cause the Corporation's status as an organization described
in Section 50l(c)(3) of the Code, exempt from federal income
taxation under Section 50l(a) of the Code, to be impaired,
and (B) such proposed transaction(s) comply with the Law; and
(iv) the Corporation shall deliver to the City and the
Trustee a Certificate of the Corporation stating and a
written report of a Management Consultant confirming that Net
Income Available for Debt Service following and after giving
effect to such proposed transaction(s) for each of the three
full Fiscal Years immediately following such transaction(s)
is projected to be at least equal to 1.20 times Maximum
Aggregate Annual Debt Service at the end of each such Fiscal
Years.
SECTION 5.13. Transfer of Assets. The Corporation
may transfer all or substantially all of its assets to an
Affiliated Corporation without complying with the
requirements of Section 5.1 or 5.12 hereof provided that
(i) such Affiliated Corporation agrees to become a co-obligor
and jointly and severally liable with the Corporation under
this Agreement, (ii) after such transactions, the Corporation
and such Affiliated Corporations are in compliance with the
provisions of this Agreement, (iii) the Corporation delivers
to the City and the Trustee an opinion of nationally
recognized bond counsel to the effect that such proposed
transfer(s) will not cause the exclusion from gross income
for federal income tax purposes of the interest on the Bonds
under Section 103 of the Code to be impaired, and (iv) if the
transfer is to a for-profit corporation, the Corporation
delivers to the City and the Trustee an opinion of counsel
acceptable to the City and the Trustee to the effect that
(a) such proposed transaction(s) will not cause the
Corporation's status as an organization described in Section
501(c)(3) of the Code, exempt from federal income taxation
under Section 50l(a) of the Code, to be impaired, and
(b) such proposed transaction(s) comply with the Law, and
(v) the Corporation delivers to the City and the Trustee an
opinion of counsel acceptable to the City and the Trustee to
the effect that after such transaction this Agreement will be
a valid and binding obligation of the Corporation and such
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Affiliated Corporation, enforceable according to its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency or other laws affecting the enforcement of
creditors' rights generally, or by the application of
equitable principles if equitable remedies are sought. In
such event, references in this Agreement to indebtedness of
the Corporation shall apply to the combined indebtedness of
both corporations and references to the financial condition
or projected results of operation of the Corporation shall
apply to the consolidated financial condition or results of
operation of both corporations.
SECTION 5.14. Prohibited Uses. No portion of the
proceeds of the Bonds will be used to finance any facility,
place or building used or to be used primarily for sectarian
instruction or study or as a place for devotional activities
or religious worship.
ARTICLE VI
MAINTENANCE, TAXES, INSURANCE AND CONDEMNATION
SECTION 6.1. Maintenance and Operation of the
Facilities. The Corporation covenants and agrees that it
will operate and maintain the Facilities in accordance with
all governmental laws, ordinances, approvals, rules,
regulations and requirements including, without limitation,
such zoning, sanitary, pollution and safety ordinances and
laws and such rules and regulations thereunder as may be
binding upon the Corporation. The Corporation further
covenants and agrees that it will maintain and operate the
Facilities as a health care facility and will maintain and
operate the same, and all engines, boilers, pumps, machinery,
apparatus, fixtures, fittings and equipment of any kind in or
that shall be placed in any building or structure now or
hereafter at any time constituting part of the Facilities in
good repair, working order and condition, and that it will
from time to time make or cause to be made all needful and
proper replacements, repairs, renewals, remodeling and
improvements so that the efficiency and value of the
Facilities shall not be impaired.
SECTION 6.2. Taxes, Assessments, Other
Governmental Charges and Utility Charges. The Corporation
covenants and agrees that it will pay and discharge all
taxes, assessments, governmental charges of any kind
whatsoever, water rates, meter charges and other utility
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charges which may be or have been assessed or which may have
become liens upon the Facilities or the interest therein of
the City, the Trustee or of the Holders of the Bonds, and
will make such payments or cause such payments to be made,
respectively, in due time to prevent any delinquency thereon
or any forfeiture or sale of the Facilities or any part
thereof, and upon request, will furnish to the City or
Trustee receipts for all such payments, or other evidences
satisfactory to the Trustee; provided, however, that the
Corporation shall not be required to pay any tax, assessment,
rate or charge as herein provided as long as it shall in good
faith contest the validity thereof, provided that the
Corporation shall have set aside reserves which the board of
directors of the Corporation, in good faith, considers
adequate with respect thereto; and provided further, however,
that the Corporation shall promptly pay any tax, assessment,
rate or charge as herein provided upon receipt of notice from
the City or the Trustee that nonpayment of such tax,
assessment, rate or charge would cause the lien of the
Indenture on the Gross Revenues of the Corporation to be
subject to imminent loss or forfeiture.
SECTION 6.3. Insurance Required. (A) The
Corporation covenants and agrees that, subject to subsection
(B) of this Section, it will keep the Facilities and all of
the operations of the Corporation adequately insured at all
times and carry and maintain such insurance in amounts which
are customarily carried and against such risks as are
customarily insured against by other corporations in
connection with the ownership and operation of facilities of
similar character and size in the State of California. The
Corporation further covenants and agrees that it will carry
and maintain, or cause to be carried and maintained, and will
payor cause to be paid in timely fashion the premiums for,
at least the following insurance with respect to the
Facilities and the Corporation when and as such insurance is
available:
(1) Insurance, on all properties constituting the
Facilities, against loss or damage by fire, lightning
and all other risks covered by the extended coverage
insurance endorsement then in use in the State of
California, subject to a deductible of not more than
$50,000 per accident or casualty, in an amount equal to
at least the lesser of the full replacement value of the
property insured or the aggregate principal amount of
Outstanding Bonds and Parity Debt. The replacement
value of the Facilities shall be determined from time to
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time at the request of the Corporation (but not less
frequently than once in every twenty-four months) by the
Insurance Consultant or by an architect, contractor,
appraiser or appraisal company selected by the
Corporation and not objected to by the Trustee. During
the course of construction of the Project, any
Additional Project or other substantial addition,
extension, alteration or improvement to the Facilities,
the Corporation shall maintain or cause to be maintained
builder's risk insurance in the amount of the full
completed value of such construction work, subject to
deductibles of not more than $50,000 per accident or
casualty, covering loss by fire, lightning and all other
risks covered by the extended coverage endorsement then
in use in the State of California;
(2) Comprehensive public liability insurance for
death or bodily injury and property damage insurance in
the minimum amount of $10,000,000 for damages arising
out of anyone accident; and automobile liability
insurance in the minimum amount of $500,000 for death
and injury arising out of anyone accident, including
property damage insurance coverage in a minimum amount
of $500,000;
(3) medical professional liability insurance in a
minimum amount of $20,000,000 as to anyone occurrence,
subject to reasonable deductions;
(4) Fidelity bonds or other insurance on all
Corporation officers and employees who collect or have
custody of or access to revenues, receipts or income of
the Corporation, in such amounts as are ordinarily
carried by organizations engaged in like activities and
with gross revenues comparable to those of the
Corporation; and
(5) Boiler insurance providing coverage of
pressure vessels, auxiliary piping, pumps and
compressors, refrigeration systems, transformers and
miscellaneous electrical apparatus in the Facilities
which present significant potential for loss, in an
amount not less than $1,000,000, subject to deductibles
not exceeding $100,000 per occurrence.
(B) The Corporation shall employ an Insurance
Consultant to review the insurance requirements of the
Corporation from time to time (but not less frequently than
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annually). If the Insurance Consultant makes recommendations
for the increase of any of the coverage required by
subsection (A) of this Section, the Corporation shall
increase such coverage in accordance with such
recommendations, unless there is a good faith determination
of the board of directors of the Corporation that such
recommendations, in whole or in part, are not in the best
interests of the Corporation. Notwithstanding anything in
this Section to the contrary, the Corporation shall have the
right, without giving rise to a Loan Default Event solely on
such account, (1) to maintain insurance coverage below or
deductibles above that required by subsection (A) of this
Section, if the Corporation furnishes to the Trustee a
certificate of the Insurance Consultant or other evidence
satisfactory to the Trustee that the insurance so provided
accords the greatest amount of coverage available for the
risk being insured against at rates which in the judgment of
the Insurance Consultant are reasonable in connection with
reasonable and appropriate risk management, or (2) to adopt
alternative risk management programs which the board of
directors of the Corporation determines to be reasonable
including, without limitation, to self-insure in whole or in
part, to participate in programs of captive insurance
companies, to participate with other health care institutions
in mutual or other cooperative insurance or other risk
management programs, to participate in state or federal
insurance programs, to take advantage of state or federal
laws now or hereafter in existence limiting medical and
malpractice liability, or to establish or participate in
other alternative risk management programs; all as may be
approved as reasonable and appropriate risk management by the
Insurance Consultant.
SECTION 6.4. Worker's Disability Compensation
Act. The Corporation will at all times comply with the
Worker's Disability Compensation Act of the State of
California, or any successor statute or statutes.
SECTION 6.5. Insurers; Policy Forms and Loss
Payees. Each insurance policy required by Section 6.3 shall
be carried by stock or mutual insurance companies authorized
to do business in the State of California which are
financially responsible and capable of fulfilling the
requirements of such policies and not objected to by the
Trustee. All such policies (except liability policies) shall
name the Corporation and the Trustee as insured parties,
beneficiaries or loss payees as their interests may appear.
Each policy shall be in such form and contain such provisions
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as are generally considered standard for the type of
insurance involved and shall contain a provision to the
effect that the insurer shall not cancel or substantially
modify the policy provisions without first giving at least
thirty (30) days written notice thereof to the Corporation
and the Trustee. In lieu of separate policies, the
Corporation may maintain blanket policies which cover anyone
or more risks required to be insured against so long as the
minimum coverages required herein are met. The Corporation
shall file at least annually with the Trustee a Certificate
setting forth the policies of insurance maintained pursuant
to this Loan Agreement, the names of the insurers and insured
parties, the amounts of such insurance and applicable
deductibles, the risks covered thereby and the expiration
dates thereof. The Corporation shall also file with the
Trustee a copy of any insurance review or recommendations
received by the Corporation from the Insurance Consultant
pursuant to Section 6.3.
SECTION 6.6. Disposition of Insurance and
Condemnation Proceeds. (A) The proceeds of the insurance
carried pursuant to clause (1) of Section 6.3, the proceeds
of any title insurance and the proceeds of any condemnation
awards with respect to the Facilities shall be paid
immediately upon receipt by the Corporation or other named
insured parties to the Trustee for deposit in a special fund
which the Trustee shall establish and maintain and hold in
trust, to be known as the "Insurance and Condemnation
Proceeds Fund." In the event the Corporation elects to
repair or replace the property damaged, destroyed or taken,
after deducting therefrom the reasonable charges and expenses
of the Trustee in connection with the collection and
disbursement of such moneys, moneys in the Insurance and
Condemnation Proceeds Fund shall be disbursed by the Trustee
for the purpose of repairing or replacing the property
damaged, destroyed or taken in the manner and subject to the
conditions set forth in subsection (C) of this Section. In
the event that the proceeds of any loss or damage to or
condemnation of the Facilities shall be less than the greater
of two percent (2%) of Net Property, Plant and Equipment (as
shown on the Corporation's most recent audited financial
statement) or $200,000, the Trustee shall pay over such
proceeds to the Corporation without requiring any of the
documents referred to in this subsection and without any
other formality whatsoever.
(B) In the event the Corporation shall not elect
to repair or replace the property damaged, destroyed or
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taken, as provided in subsection (A) of this Section, the
Trustee shall transfer all amounts in the Insurance and
Condemnation Proceeds Fund on account of such damage,
destruction or condemnation to the Special Redemption
Account; provided that if any Parity Debt is then
outstanding, any such transfer from the Insurance and
Condemnation Proceeds Fund shall be deposited in part in the
Special Redemption Account and in part in such other fund or
account as may be appropriate (and used for the retirement of
such Parity Debt) in the same proportion which the aggregate
principal amount of Outstanding Bonds then bears to the
aggregate unpaid principal amount of such Parity Debt. If
the amount transferred to the Special Redemption Account and
any redemption account for the retirement of Parity Debt
exceeds the greater of two percent (2%) of the Net Property,
Plant and Equipment (as shown on the Corporation's most
recent audited financial statement) or $200,000 but is not
sufficient to retire all Bonds and Parity Debt then
outstanding, the Corporation will file with the Trustee a
report of a Management Consultant showing that Net Income
Available for Debt Service will be sufficient to pay
Aggregate Debt Service for the three full Fiscal Years
immediately following such transfer after giving effect to
the retirement of such Bonds and Parity Debt.
(C) Before any payment from the Insurance and
Condemnation Proceeds Fund shall be made for purposes of
repairing or replacing damaged, destroyed or taken property,
the Corporation shall file or cause to be filed with the
Trustee:
(1) a Requisition of the Corporation stating
(i) the item number of such payment; (ii) the name of
the Person to whom each such payment is due, which may
be the Corporation in the case of reimbursement for
costs of the project theretofore paid by the
Corporation; (iii) the respective amounts to be paid;
(iv) the purpose by general classification for which
each obligation to be paid was incurred; (v) that
obligations in the stated amounts have been incurred by
the Corporation and are presently due and payable and
that each item thereof is a proper charge against such"
Insurance and Condemnation Proceeds Fund and has not
been previously paid from said fund; (vi) that there has
not been filed with or served upon the Corporation any
notice of claim of lien, or attachment upon, or claim
affecting the right to receive payment of, any of the
amounts payable to any of the persons named in such
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Requisition, for which adequate surety for the payment
of such obligation has been posted, or which has not
been released or will not be released simultaneously
with the payment of such obligation, other than
materialmen's or mechanic's liens accruing by operation
of law; (vii) whether any of such expenditures are made
under a contract for installation or construction; and
(viii) that the balance remaining in such Insurance and
Condemnation Proceeds Fund after payment of such
amounts, together with any investment income reasonably
anticipated to be deposited in such Insurance and
Condemnation Proceeds Fund pursuant to this Agreement
and any other funds reasonably anticipated to be
available therefor and which the Corporation agrees to
deposit in such Insurance and Condemnation Proceeds Fund
when so available, will be sufficient to pay the costs
of completing the repair or replacement; and
(2) in the case of each payment made under any
contract for installation or construction, an
Architects' Certificate stating or confirming the
information required to be set forth in the Requisition
pursuant to subsection (D)(1) of this Section and
certifying that, insofar as such obligation was incurred
for work, materials, equipment or supplies, such work
was actually performed, or such materials, equipment or
supplies were actually installed in furtherance of the
respective project or delivered at the site for that
purpose or delivered for storage or fabrication at an
approved place or places.
Upon receipt of each such document, the Trustee
shall pay the amount set forth in such Requisition as
directed by the terms thereof out of the Insurance and
Condemnation Proceeds Fund. The Trustee need not make any
such payment it if has received any written notice of claim
of lien, attachment upon, or claim affecting the right to
receive payment of, any of the monies to be so paid, which
has not been released or will not be released simultaneously
with such payment.
When the repair or replacement of damaged,
destroyed or taken property shall have been completed, a
Certificate of the Corporation stating the fact and date of
such completion and stating that all of the costs thereof
have been determined and paid (or that all of such costs have
been paid less specified claims that are subject to dispute
and for which a retention in such Insurance and Condemnation
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....
Proceeds Fund is to be maintained in the full amount of such
claims until such dispute is resolved), together with an
Architects' Certificate stating the fact and date of such
completion, shall be delivered to the Trustee by the
Corporation. Upon the receipt of such Certificate, the
Trustee shall, as directed by said Certificate of the
Corporation, transfer any remaining balance in such Insurance
and Condemnation Proceeds Fund, less the amount of any such
retention, to the Revenue Fund.
ARTICLE VII
NON-LIABILITY OF CITY; EXPENSES; INDEMNIFICATION
SECTION 7.1. Non-Liability of City. The City
shall not be obligated to pay the principal of, and premium,
if any, and interest on the Bonds, except from Revenues. The
issuance of the Bonds shall not directly or indirectly or
contingently or morally obligate the City to levy or to
pledge any form of taxation whatever therefor or to make any
appropriation (unless and to the extent required by law with
respect to Revenues) for their payment. Neither the faith
and credit nor the taxing power of the City is pledged to the
payment of the principal of or premium or interest on the
Bonds.
The Corporation hereby acknowledges that the City's
sole source of moneys to repay the Bonds will be provided by
the payments made by the Corporation pursuant to this Loan
Agreement, together with investment income on certain funds
and accounts held by the Trustee under the Indenture, and
hereby agrees that if the payments to be made hereunder shall
ever prove insufficient to pay all principal of, and premium,
if any, and interest on the Bonds as the same shall become
due (whether by maturity, redemption, acceleration or
otherwise), then upon notice from the Trustee, the
Corporation shall pay such amounts as are required from time
to time to prevent any deficiency or default in the payment
of such principal, premium or interest, including, but not
limited to, any deficiency caused by acts, omissions,
nonfeasance or malfeasance on the part of the Trustee, the
Corporation, the City or any third party.
The City shall not be liable to the Corporation,
any Bondholder or any other person for losses, costs,
damages, expenses and liabilities arising out of or related
to, in whole or in part, one or more negligent acts or
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omissions of the City, any of its officers, directors,
employees, agents or any other party acting for or on behalf
of the City, in connection with the issuance of the Bonds or
performance by the City of its obligations under the
Indenture, this Loan Agreement or any other agreement
relating hereto. The Corporation hereby releases the City
from all liability to the corporation for any such losses,
costs, damages, expenses and liabilities.
SECTION 7.2. Expenses. The Corporation covenants
and agrees to pay and to indemnify the City and the Trustee
against all costs and charges, including reasonable fees of
attorneys, accountants, consultants and other experts,
incurred in good faith or arising out of or in connection
with this Loan Agreement, the Bonds or the Indenture.
SECTION 7.3. Indemnification. The Corporation
agrees, to the extent permitted by law, to indemnify and hold
harmless the City and the Trustee and their respective
council members, directors, officers, employees and agents
from and against any and all losses, claims, damages,
liabilities or expenses, of every conceivable kind, character
and nature whatsoever (excepting therefrom only such losses,
claims, damages, liabilities or expenses arising from the
gross negligence of the City or its council members,
officers, employees or agents or the negligence of the
Trustee or its directors, officers, employees or agents),
including, but not limited to, losses, claims, damages,
liabilities, or expenses arising out of, resulting from or in
any way connected with (1) the issuance of any Bonds and the
carrying out of any of the transactions contemplated by this
Loan Agreement or the Indenture; or (2) any untrue statement
or alleged untrue statement of any material fact or omission
or alleged omission to state a material fact necessary to
make the statements made, in light of the circumstances under
which they were made, not misleading in any official
statement or other offering circular utilized by the City in
connection with the sale of the Bonds. The Corporation
further agrees, to the extent permitted by law, to payor to
reimburse the City and the Trustee and their respective
council members, directors, officers, employees and agents
for any and all costs, reasonable attorneys fees, liabilities
or expenses incurred in connection with investigating,
defending against or otherwise in connection with any such
losses, claims, damages, liabilities, expenses or actions.
The Corporation further agrees, to the extent
permitted by law, to indemnify and hold harmless the
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Bondholders for any losses, costs, damages, expenses and
liabilities arising out of or related to, in whole or in
part, one or more negligent acts or any omissions of the
City, any of its officers, directors, employees, agents or
any other party acting for or on behalf of the City, in
connection with the issuance of the Bonds or performance by
the City of its obligations under the Indenture, this Loan
Agreement or any other agreement relating hereto.
ARTICLE VIII
LOAN DEFAULT EVENTS AND REMEDIES
SECTION 8.1. Loan Default Events. The following
events shall be "Loan Default Events":
(a) If the Corporation shall fail to pay any Loan
Repayments on or before the twentieth (20th) day of the
month in which such Loan Repayments are due and payable;
(b) If the Corporation shall fail to comply with
the provisions of Sections 5.1, 5.4, 5.7, 5.10 or 6.6(B);
(c) If any representation or warranty made by the
Corporation herein shall at any time prove to have been
incorrect in any material respect as of the time made;
(d) If the Corporation shall fail to observe or
perform any covenant, condition, agreement or provision
in this Loan Agreement on its part to be observed or
performed, other than as referred to in subsection (a)
or (b) of this Section, or shall breach any warranty by
the Corporation herein or therein contained, for a
period of sixty (60) days after written notice,
specifying such failure or breach and requesting that it
be remedied, has been given to the Corporation by the
City or the Trustee; except that, if such failure or
breach can be remedied but not within such sixty (60)
day period and if the Corporation has taken all action
reasonably possible to remedy such failure or breach
within such sixty (60) day period, such failure or
breach shall not become a Loan Default Event for so long
as the Corporation shall diligently proceed to remedy
same in accordance with and subject to any directions or
limitations of time established by the Trustee;
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(e) If any default shall exist under any
instrument pursuant to which Parity Debt was issued and
is Outstanding;
(f) If the Corporation files a petition in
voluntary bankruptcy, for the composition of its affairs
or for its corporate reorganization under any state or
federal bankruptcy or insolvency law, or makes an
assignment for the benefit of creditors, or admits in
writing to its insolvency or inability to pay debts as
they mature, or consents in writing to the appointment
of a trustee or receiver for itself or for the whole or
any substantial part of the Facilities;
(g) If a court of competent jurisdiction shall
enter an order, judgment or decree declaring the
Corporation insolvent, or adjudging it bankrupt, or
appointing a trustee or receiver of the Corporation or
of the whole or any substantial part of the Facilities,
or approving a petition filed against the Corporation
seeking reorganization of the Corporation under any
applicable law or statute of the United States of
America or any state thereof, and such order, judgment
or decree shall not be vacated or set aside or stayed
within sixty (60) days from the date of the entry
thereof;
(h) If, under the provisions of any other law for
the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the
Corporation or of the whole or any substantial part of
the Facilities, and such custody or control shall not be
terminated within sixty (60) days from the date of
assumption of such custody or control; or
(i) If any Event of Default under the Indenture
shall occur.
SECTION 8.2. Remedies on Default. If a Loan
Default Event shall occur, then, and in each and every such
case during the continuance of such Loan Default Event, the
City or the Trustee may take anyone or more of the following
remedial steps:
(a) The City or the Trustee may, if the Bonds have
been accelerated pursuant to Section 7.02 of the
Indenture and upon notice in writing to the Corporation,
declare all installments of Loan Repayments and
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Additional Payments payable for the remainder of the
term of this Loan Agreement to be immediately due and
payable, whereupon the same shall be immediately due and
payable, anything in this Loan Agreement to the contrary
notwithstanding; "all installments" as used in this
subsection shall mean an amount equal to the entire
principal amount of the then outstanding Bonds, together
with any applicable redemption premiums and all interest
accrued or to accrue on and prior to the next succeeding
redemption date or dates on which the Bonds can be
redeemed after giving notice to the holders thereof as
required by the Indenture (less moneys available for
such purpose then held by the Trustee) plus any other
payments due or to become due hereunder, including,
without limitation, any unpaid fees and expenses of the
Trustee which are then due or will become due prior to
the time that the Bonds are paid in full and the trust
established by the Indenture is terminated; provided,
however, that if acceleration of the Bonds has been
rescinded and annulled pursuant to Section 7.02 of the
Indenture, acceleration of the Loan Repayments and
Additional Payments required hereunder shall be waived;
but no such rescission and annulment shall extend to or
shall affect any subsequent default or shall impair or
exhaust any right or power consequent thereon.
(b) The City or the Trustee may take whatever
action, at law or in equity, as may appear necessary or
desirable to collect the Loan Repayments, Additional
Payments and any other payments then due and thereafter
to become due under this Loan Agreement or to enforce
the performance and observance of any obligation,
covenant, agreement or provision contained in this Loan
Agreement to be observed or performed by the Corporation.
(c) The City or the Trustee shall have all the
rights and remedies of a secured party or creditor under
the Uniform Commercial Code of the State of California,
and the general laws of the State of California, with
respect to the enforcement of the security interests
granted or reserved hereunder, including without
limitation to the extent permitted by law the right to
require that all or a portion of the personal property'
portion of the Facilities be assembled and delivered to
the Trustee, and the Trustee may, to the extent
permitted by law, impound books and records evidencing
the Corporation's accounts, accounts receivable and
other similar claims for the payment of money and take
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possession of all notes and other documents which
evidence such accounts, accounts receivable and claims
for money and give notice to obligors thereunder of its
interest therein and make direct collections on such
accounts, accounts receivable and claims for money.
SECTION 8.3. Remedies Not Exclusive; No Waiver of
Rights. No remedy herein conferred upon or reserved to the
City or the Trustee is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy,
to the extent permitted by law, shall be cumulative and shall
be in addition to every other remedy given under this Loan
Agreement or now or hereafter existing at law or in equity or
otherwise. In order to entitle the City or the Trustee to
exercise any remedy, to the extent permitted by law, reserved
to it contained in this Loan Agreement, it shall not be
necessary to give any notice, other than such notice as may
be herein expressly required. Such rights and remedies as
are given to the City hereunder shall also extend to the
Trustee, and the Trustee may exercise any rights and the
Trustee and the Holders of the Bonds shall be deemed third
party beneficiaries of all covenants and conditions herein
contained.
No delay in exercising or omitting 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 acquiescence therein, and every such
right and power may be exercised from time to time and as
often as may be deemed expedient.
SECTION 8.4. Expenses on Default. In the event
the Corporation should default under any of the provisions of
this Loan Agreement and the City or the Trustee should employ
attorneys or incur other expenses for the collection of the
payments due hereunder, the Corporation agrees that it will
on demand therefor pay to the City or the Trustee the
reasonable fee of such attorneys and such other reasonable
expenses so incurred by the City or the Trustee.
SECTION 8.5. Notice of Default. The Corporation
agrees that, as soon as is practicable, and in any event
within ten (10) days, the Corporation will furnish the
Trustee notice of any event which is a Loan Default Event
pursuant to Section 8.1 hereof which has occurred and is
continuing on the date of such notice, which notice shall set
forth the nature of such event and the action which the
Corporation proposes to take with respect thereto.
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2164m5
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Further Assurances. The Corporation
agrees that it will execute and deliver any and all such
further agreements, instruments, financing statements or
other assurances as may be reasonably necessary, if requested
by the City or the Trustee, to carry out the intention or to
facilitate the performance of this Loan Agreement, including,
without limitation, to perfect and continue the security
interests herein intended to be created.
SECTION 9.2. Amendment of Indenture. The City
covenants that, except as may be necessary to protect the
exclusion from gross income for federal income tax purposes
of the interest on the Bonds, it will take no action to amend
or supplement the Indenture in any manner that would
materially adversely affect the interests of the Corporation
without the prior written consent of the Corporation to such
amendment or supplement; provided the City shall use its best
efforts to notify the Corporation prior to any amendment or
supplement which is necessary to protect the exclusion from
gross income for federal income tax purposes of the interest
on the Bonds and, in any event, the Trustee shall promptly
notify the Corporation after the adoption of any such
amendment or supplement.
SECTION 9.3. Notices. All notices or
communications herein required or permitted to be given shall
be in writing and, if to the Corporation, mailed or delivered
to it as follows: 1500 West Seventeenth Street, San
Bernardino, California 92411, Attention: Administrator, and,
if to the City, mailed or delivered to it as follows: 300
North "D" Street, San Bernardino, California 92418,
Attention: Director, Redevelopment Agency of the City of San
Bernardino, and, if to the Trustee, mailed or delivered to it
as follows: 333 South Beaudry Avenue, W24-30, Los Angeles,
California 90017, Attention: Corporate Trust Division
# A duplicate copy of each notice or
communication given hereunder by either the City or the
Corporation to the other shall also be given to the Trustee.
The City, the Corporation and the Trustee may, by notice
given hereunder, designate any further or different address
to which subsequent notices, certificates and other
communications shall be sent.
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2164mS
SECTION 9.4. Governing Law. This Loan Agreement
shall be construed in accordance with and governed by the
Constitution and laws of the State of California.
SECTION 9.5. Binding Effect. This Loan Agreement
shall inure to the benefit of and shall be binding upon the
City, the Corporation and their respective successors and
assigns, subject, however, to the limitations contained
herein.
SECTION 9.6. Severability of Invalid Provisions.
If anyone or more of the provisions contained in this Loan
Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, then such provision or
provisions shall be deemed severable from the remaining
provisions contained in this Loan Agreement and such
invalidity, illegality or unenforceability shall not affect
any other provision of this Loan Agreement, and this Loan
Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein. The
City and the Corporation each hereby declares that it would
have entered into this Loan Agreement and each and every
other Section, paragraph, sentence, clause or phrase hereof
irrespective of the fact that anyone or more Sections,
paragraphs, sentences, clauses or phrases of this Loan
Agreement may be held illegal, invalid or unenforceable.
SECTION 9.7. Article and Section Headings and
References. The headings or titles of the several Articles
and Sections hereof, and any table of contents appended to
copies hereof, shall be solely for convenience of reference
and shall not affect the meaning, construction or effect of
this Loan Agreement. All references herein to "Articles,"
"Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Loan Agreement;
the words "herein," "hereof," "hereby," "hereunder" and other
words of similar import refer to this Loan Agreement as a
whole and not to any particular Article, Section or
subdivision hereof; and words of the masculine gender shall
mean and include words of the feminine and neuter genders.
SECTION 9.8. Agreement Represents Complete
Agreement; Amendments. This Loan Agreement represents the
entire contract between the parties. This Loan Agreement may
not be effectively amended, changed, modified, altered or
terminated except by the written agreement of the Corporation
and the City and the concurring written consent of the
Trustee, given in accordance with the provisions of the
Indenture.
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2164m5
SECTION 9.9. Execution of Counterparts. This
Agreement may be executed in any number of counterparts, each
of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the
same instrument.
SECTION 9.10. Term of Loan Agreement. Except as
otherwise provided herein, this Loan Agreement shall remain
in full force and effect from the date of execution hereof
until no Bonds remain Outstanding under the Indenture.
SECTION 9.11. Waiver of Personal Liability. No
member of the board of directors, officer, agent or employee
of the Corporation shall be individually or personally liable
for the payment of Loan Repayments or Additional Payments or
be subject to any personal liability or accountability by
reason of this Loan Agreement; but nothing herein contained
shall relieve any such member of the board of directors,
officer, agent or employee from the performance of any
official duty provided by law or by this Loan Agreement.
IN WITNESS WHEREOF, the City and the Corporation
have caused this Loan Agreement to be executed in their
respective names and their respective corporate seals to be
hereunto affixed by their duly authorized officers, all as of
the date first above written.
CITY OF SAN BERNARDINO
By
Mayor
[SEAL]
Attest:
City Clerk
SAN BERNARDINO COMMUNITY HOSPITAL
By
Administrator and Chief
Executive Officer
[SEAL]
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2l64m5
APPENDIX A
Inpatient general medical and surgical services
Obstetrical and pediatric services
Intensive care and coronary care services
Basic emergency medical services
Clinical and pathological laboratory services
Radiological services
Respiratory therapy services
Physical therapy services
Ambulatory same-day surgical and medical services
All of the foregoing services are provided as intregral
components of an acute care facility.
2l64m5
city of San Bernardino
Hospital Revenue Refunding Bonds
(San Bernardino Community Hospital)
Series 1989
DRAfT
BOND PURCHASE CONTRACT
November __, 1989
City of San Bernardino
San Bernardino, California
Ladies and Gentlemen:
The undersigned (the "Underwriter"), hereby offer to enter
into this Bond Purchase Contract with you, the City of San
Bernardino (the "City"), for the purchase by the Underwriter
and sale by you of your Hospital Revenue Refunding Bonds (San
Bernardino Community Hospital), Series 1989, as specified
below. This offer is made subject to acceptance by the City
prior to 11:59 P.M., California time, on the date hereof, and
upon such acceptance this Bond Purchase Contract (the "Bond
Purchase Contract") shall be in full force and effect in
accordance with its terms and shall be binding upon both the
City and the Underwriter.
1. Upon the terms and conditions and upon the basis of
the representations, warranties and agreements set forth herein
and in the Letter of Representation dated the date hereof,
executed and delivered by San Bernardino Community Hospital
(the "Corporation") and attached hereto as Exhibit B (the
"Letter of Representation"), the Underwriter hereby agrees to
purchase from the City and the City hereby agrees to sell to
the Underwriter all (but not less than all) of the aggregate
principal amount of the City's Hospital Revenue Refunding Bonds
(San Bernardino Community Hospital), Series 1989 (the "Bonds"),
to be dated October 15, 1989 (the Bonds being more fully
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described in the Official Statement hereinafter mentioned), at
an aggregate purchase price of $ (which is the
principal amount of the Bonds less Underwriter's discount of
$ and $ of original issue discount) plus interest
accrued thereon from October 15, 1989 to the date of the
Closing referred to in Paragraph 5 hereof. The Bonds shall be
as described in, and shall be issued and secured under and
pursuant to, the Indenture dated as of November 1, 1989 (the
"Indenture") between the City and , as
trustee (the "Trustee"). The Bonds will be limited obligations
of the City payable solely from Loan RepaYments (as that term
is defined in the Indenture) made by the Corporation pursuant
to that certain Loan Agreement dated as of November 1, 1989
(the "Loan Agreement") between the City and the Corporation and
from amounts held in certain funds established pursuant to the
Indenture and pledged therefor. The Bonds will be secured by
an assignment of the right, title and interest of the City in
the Loan Agreement, to the extent and as more particularly
described in the Indenture. The Bonds shall mature, and shall
bear interest from their date, payable semiannually on June 1
and December 1 in each year commencing June 1, 1990, in the
amounts and at the rates set forth in Exhibit A attached
hereto. The Underwriter agrees to make a public offering of
the Bonds at the initial offering prices as set forth in the
Official Statement, which prices may be changed from time to
time by the Underwriter.
2. You shall deliver to or cause to be delivered to the
undersigned, promptly after your acceptance hereof, two copies
of your Official Statement relating to the Bonds substantially
in the form of the Preliminary Official Statement dated
October 11, 1989 (the "Preliminary Official Statement"), with
only such changes therein as shall have been accepted by us and
signed on behalf of the City by the Mayor and the City Clerk
(or such other authorized officers as we shall have approved)
and approved on behalf of the Corporation by an authorized
representative thereof (the Official Statement dated
November __ 1989, including the cover page, summary statement
and appendices thereto, is herein referred to as the "Official
Statement," except that if the Official Statement has been
amended between the date hereof and the date of Closing
referred to in Paragraph 5 hereof the term "Official Statement"
shall refer to the Official Statement as so amended).
The Official Statement is hereby approved for
distribution by resolution of the City. You authorize the use
of copies of the Official Statement, the Indenture and the
Escrow Agreement dated as of November 1, 1989 (the "Escrow
Agreement") between the City, Security Pacific National Bank,
as trustee for the 1985A Bonds (as such term is defined
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in the Official Statement), and the Corporation in connection
with the public offering and sale of the Bonds. You hereby
ratify, confirm and approve the prior distribution of the
Preliminary Official Statement by the Underwriter.
3. The City represents and warrants to and agrees with
the Underwriter that:
(a) both at the time of acceptance hereof by the
City, and at the date of the Closing, the statements and
information contained in the Official Statement, as
amended or supplemented pursuant to this Bond Purchase
Contract, relating to the City and its functions, duties
and responsibilities, are and will be true, correct and
complete in all material respects and the Official
Statement does not and will not contain any untrue
statement of a material fact or omit to state any material
fact which is necessary to make the statements and
information therein, in the light of the circumstances
under which they were made, not misleading;
(b) the City is, and at the date of the Closing will
be, a municipal corporation and charter city, duly
organized and existing under the Constitution and laws of
the State of California with the powers and authority,
among others, (i) to issue the Bonds pursuant to the
Constitution of the State of California and Section 40 of
the charter of the City and Ordinance No. 3815 enacted and
amended thereunder (the "Law"); (ii) to execute and
deliver this Bond Purchase Contract, the Indenture, the
Escrow Agreement, the Official Statement, and all other
agreements and instruments relating thereto (collectively,
the "Legal Documents"); and (iii) to carry out and
consummate the transactions contemplated by the Legal
Documents;
(c) when delivered to and paid for by the
Underwriter at the Closing in accordance with the
provisions of this Bond Purchase Contract, the Bonds will
have been duly authorized, executed issued and delivered
and will constitute valid and binding limited obligations
of the City of the character permitted to be issued by the
City pursuant to the Law, in conformity with, and entitled
to the benefit and security of, the Indenture;
(d) by official action of the City prior to or
concurrently with the acceptance hereof, the City has duly
ratified the distribution of the Preliminary Official
Statement, has duly adopted and authorized the
distribution of the Official Statement, including all
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amendments and supplements thereto, and has duly
authorized and approved the execution and delivery of, and
the performance by the City of the obligations on its part
contained in, the Bonds and the Legal Documents, and the
consummation by it of all other transactions contemplated
by the Official Statement and this Bond Purchase Contract;
(e) the execution and delivery of the Bonds and the
Legal Documents and compliance with the provisions on the
City's part contained therein, will not conflict with or
constitute a breach of or default under any law,
administrative regulation, judgment, decree, loan
agreement, indenture, bond, note, resolution, agreement or
other instrument to which the City is a party or is
otherwise subject, nor will any such execution, delivery,
adoption or compliance result in the creation or
imposition of any lien, charge or other security interest
or encumbrance of any nature whatsoever upon any of the
properties or assets of the City under the terms of any
such law, administrative regulation, judgment, decree,
loan agreement, indenture, bond, note, resolution,
agreement or other instrument, except as provided in the
Indenture;
(f) to the best knowledge of the City after
reasonable investigation, the City is not in material
breach of or default under any applicable law or
administrative regulation of the State of California or
the United States or any applicable judgment or decree or
any loan agreement, bond, note, resolution, agreement or
other instrument to which the City is a party or is
otherwise subject, and no event has occurred and is
continuing which, with the passage of time or the giving
of notice, or both, would constitute a default or an event
of default under any such instrument, which default might
have consequences that would materially and adversely
affect the consummation of the transactions contemplated
by the Bonds and the Legal Documents or the financial
condition, assets, properties or operations of the City;
(g) to the best of its knowledge, there is no
action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, governmental agency,
public board or body, pending or threatened against the
City affecting the existence of the City or the titles of
its officers to their respective offices or seeking to
prohibit, restrain or enjoin the sale, issuance or
delivery of the Bonds or the collection of revenues
pledged or to be pledged to pay the principal of, and
premium, if any, and interest on the Bonds, or the pledge
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thereof, or in any way contesting or affecting the
validity or enforceability of the Bonds or any of the
Legal Documents, or contesting the powers of the City or
its authority to issue, enter into, adopt or perform its
obligations under any of the foregoing, or contesting in
any way the completeness or accuracy of the Preliminary
Official Statement or the Official Statement, or any
amendment or supplement thereto, wherein an unfavorable
decision, ruling or finding would materially adversely
affect the validity or enforceability of the Bonds or any
of the Legal Documents;
(h) all approvals, consents, authorizations,
certifications and other orders of any governmental
authority, board, agency or commission having
jurisdiction, and all filings with any such entities,
which would constitute conditions precedent to or the
absence of which would materially adversely affect the
performance by the City of its Obligations hereunder or
under any of the other Legal Documents or the consummation
of the transactions contemplated in the Official
Statement, have been duly obtained, and further, no
consent, approval, authorization or other action by any
governmental or regulatory authority having jurisdiction
over the City that has not been obtained is or will be
required for the issue and sale of the Bonds or the
consummation by the City of the other transactions
contemplated by this Bond Purchase Contract and the
Official Statement, except as such may be required under
the state securities or Blue Sky laws in connection with
the distribution of the Bonds by the Underwriter;
(i) the City will furnish such information, execute
such instruments and take such other action in cooperation
with the Underwriter as the Underwriter may reasonably
request in order (1) to qualify the Bonds for offer and
sale under the Blue Sky or other securities laws and
regulations of such states and other jurisdictions of the
United States as the Underwriter may designate and (2) to
determine the eligibility of the Bonds for investment
under the laws of such states and other jurisdictions, and
will use its best efforts to continue such qualification
in effect so long as required for distribution of the
Bonds; provided, however, that in no event shall the City
be required to take any action which would subject it to
general or unlimited service of process in any
jurisdiction in which it is not now so subject;
(j) the Legal Documents have been duly authorized
and will, at the date of the Closing, be executed and
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delivered by the City and constitute valid, binding and
enforceable obligations of the City in accordance with
their respective terms except as the same may be limited
by bankruptcy, insolvency, moratorium and other laws
affecting enforcement of creditors' rights generally and
by the application of equitable principles regardless of
whether such enforcement is considered in a proceeding in
equity or at law, and except as enforcement may be held to
be against public policy; and
(k) if during such time as the Official Statement is
used in connection with the offering and sales of the
Bonds any event occurs, of which the City has knowledge,
which might or would cause the information relating to the
City, its functions, duties and responsibilities contained
in the Official Statement, as then supplemented or
amended, to contain an untrue statement of a material fact
or to omit to state a material fact required to be stated
therein or necessary to make such information therein, in
the light of the circumstances under which it was
presented, not misleading, or if the City is requested to
amend, supplement or otherwise change the Official
Statement, the City will promptly notify the Corporation
and the Underwriter in writing of the circumstances and
details of such event, and if in the opinion of the
Underwriter, such event requires the preparation and
publication of a supplement or amendment to the Official
Statement, the City will amend or supplement the Official
Statement in a form and in a manner approved by the
Underwriter, provided all expenses thereby incurred will
be paid by the City.
The execution and delivery of this Bond Purchase
Contract by the City shall constitute a representation by the
City to the Underwriter that the representations and warranties
contained in this Section 3 are true as of the date hereof;
provided that as to information furnished by the Corporation
pursuant to this Bond Purchase Contract, the Letter of
Representation and in the Official Statement, the City is
relying on such information in making the City's
representations, warranties and agreements; and, provided
further, that as to all matters of law the City is relying on
the advice of counsel to the City; and, provided further, that
no member of the governing body, employee or officer of the
City shall be individually liable for the breach of any
representation or warranty made by the City in this Section 3.
4. The Underwriter's Obligations under this Bond
Purchase Contract are and shall be subject to the receipt on or
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prior to the date of the Official Statement of a letter from
Ernst & Young, dated the date of this Bond Purchase Contract
with work extending to a date not more than five business days
prior to the date of this Bond Purchase Contract, addressed to
the Underwriter and substantially in the form set forth as
Exhibit C hereto.
5. At 9:00 A.M., California time, on November __, 1989,
or at such other time, or on such earlier or later date as we
mutually agree upon (the "Closing"), the City will deliver or
cause to be delivered to the Underwriter in New York, New York,
or at such other place as we may mutually agree upon, the Bonds
in definitive form [(all of the Bonds to be lithographed with
steel engraved borders)], duly executed, and in Los Angeles,
California, or at such other place as we may mutually agree
upon, the other documents mentioned herein. It is anticipated
that CUSIP identification numbers will be printed on the Bonds,
but neither the failure to print such number on any Bonds, nor
any error with respect thereto shall constitute cause for a
failure or refusal by the Underwriter to accept delivery of and
pay for the Bonds in accordance with the terms of this Bond
Purchase Contract. [All expenses in relation to the printing
of CUSIP numbers on said Bonds and the CUSIP Service Bureau
charge for the assignment of said numbers shall be paid for by
the .] The Underwriter will accept such delivery and
pay the purchase price thereof as set forth in Section 1 hereof
by certified or official bank check or checks payable in
immediately available funds. The Bonds will be made available
for checking and packaging at an office which we may mutually
agree upon one business day prior to the Closing.
6. The Underwriter hereby enters into this Bond Purchase
Contract in reliance upon the representations and warranties of
the City contained herein and in reliance upon the
representations and warranties to be contained in the documents
and instruments to be delivered at the Closing and upon the
performance by the City of its Obligations hereunder, both on
and as of the date hereof and as of the date of the Closing.
Accordingly, the Underwriter's obligations under this Bond
Purchase Contract to purchase, to accept delivery of and to pay
for the Bonds shall be conditioned upon the performance by the
City of its obligations to be performed hereunder and under
such documents and instruments at or prior to the Closing, and
shall also be subject to the following additional conditions:
(a) the representations and warranties of the City
contained herein and the Corporation contained in the
Letter of Representation shall be true, complete and
correct on the date hereof and as of the Closing, as if
made on and at the Closing;
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(b) at the Closing, the Legal Documents shall be in
full force and effect and shall not have been amended,
modified or supplemented except as may have been agreed to
in writing by USi and there shall be in full force and
effect such resolutions of the City as, in the opinion of
Orrick, Herrington & Sutcliffe, Los Angeles, California
("Bond Counsel"), shall be necessary in connection with
the transactions contemplated hereby;
(c) the Underwriter shall have the right to cancel
its obligation to purchase the Bonds if between the date
hereof and the Closing (i) legislation shall have been
introduced in or enacted by the Congress of the United
States or enacted by the State of California or
legislation pending in the Congress of the United States
shall have been amended, or legislation shall have been
recommended to the Congress of the United States or
otherwise endorsed for passage (by press release, other
form of notice or otherwise) by the President of the
United States, a responsible official of the Treasury
Department of the United States or the Internal Revenue
Service or the Chairman or ranking minority member of the
Committee on Finance of the United States Senate or the
Committee on Ways and Means of the United States House of
Representatives, or legislation shall have been proposed
for consideration by either such Committee by any member
thereof or legislation shall have been favorably reported
for passage to either House of the Congress of the United
States by a Committee of such House to which such
legislation has been referred for consideration, or a
regulation shall have been proposed or made or a press
release or other form or notice shall have been issued by
the Treasury Department of the United States, or the
Internal Revenue Service or other federal or State of
California authority in each case, with respect to federal
or State of California taxation upon revenues or other
income of the general character to be derived by the city
or by any similar body, or upon interest on obligations of
the general character of the Bonds, which may have the
purpose or effect, directly or indirectly, of adversely
affecting the tax-exempt status of the City, its property
or income, its securities (including the Bonds) or the
interest thereon, or any tax exemption granted or
otherwise authorized by State of California legislation,
and which, in each case, in the reasonable judgment of the
Underwriter, affecting materially and adversely the market
for the Bonds, or (ii) there shall exist any event which,
in the reasonable judgment of the Underwriter, either
(A) makes untrue or incorrect in any material respect as
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of such time any statement or information contained in the
Official Statement or (B) is not reflected in the Official
Statement but should be reflected therein in order to make
the statements and information contained therein not
misleading in any material respect, or (iii) there shall
have occurred any outbreak of hostilities or other
national or international calamity or crisis, the effect
of such outbreak, calamity or crisis on the financial
markets of the united States being such as, in the
reasonable judgment of the Underwriter, would make it
impracticable for the Underwriter to market or enforce
contracts for the sale of the Bonds, or (iv) there shall
be in force a general suspension of trading on any
national securities exchange or minimum or maximum prices
for trading shall have been fixed and be in force, or
maximum ranges for prices for securities shall have been
required and be in force on any national securities
exchange, whether by virtue of a determination by such
exchange or by order of the Securities and Exchange
Commission or any other governmental authority having
jurisdiction, or (v) a general banking moratorium shall
have been declared by either federalr California or New
York authorities having jurisdiction and be in force, or
(vi) there shall be any material adverse change in the
affairs of the Corporation or the City, or (vii) there
shall be established any new restriction on transactions
in securities materially affecting the free market for
securities (including the imposition of any limitation on
interest rates) or the extension of credit by, or the
charge to the net capital requirements of, underwriters
established by the any national securities exchange, the
Securities and Exchange Commission, any other federal or
state agency or the Congress of the United States, or by
Executive Order, or (viii) an adverse event described in
Section 3(k) hereof occurs which, in the reasonable
judgment of the Underwriter, requires or has required a
supplement or amendment to the Official Statement, or
(ix) a decision of any federal or state court or a ruling
or regulation (final, temporary or proposed) of the
Securities and Exchange Commission or other governmental
agency shall have been made or issued to the effect that
(A) the Bonds or any securities of the City or of any
similar body of the type contemplated herein are subject
to the registration requirements of the Securities Act of
1933, as amended, or (B) the qualification of an indenture
in respect of the Bonds or any such securities is required
under the Trust Indenture Act of 1939, as amended; and
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(d) at or prior to the Closing, we shall receive the
following documents, in each case satisfactory in form and
substance to us and our counsel:
(i) the unqualified approving opinion, dated
the date of the Closing and addressed to the City, of
Bond Counsel, substantially in the form attached
hereto as Exhibit D, accompanied by a supplementary
opinion of Bond Counsel, dated the date of the
Closing and addressed to us, substantially to the
effect that (A) the statements contained in the
Official Statement in the sections thereof entitled:
"Introduction," "Plan of Financing," "The 1989
Bonds," "Appendix D - Summary of the Principal
Documents" and "Tax Exemption," insofar as such
statements purport to summarize certain provisions of
the Bonds, the Legal Documents, and the approving
opinion of Bond Counsel on federal tax law, present
an accurate summary of such provisions; (B) based
upon information made available to such counsel in
the course of such counsel's participation in the
transaction as Bond Counsel and without having
undertaken to determine independently or assuming any
responsibility for the accuracy, completeness or
fairness of the statements contained in the Official
Statement, nothing has come to such counsel's
attention that would lead them to believe that the
Official Statement, as of the Closing Date, contains
any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements made, in light of the circumstances under
which they were made, not misleading (except that
such counsel need express no view as to the financial
statements or the statistical data, contained in the
Official Statement); (C) the Bonds are exempt from
registration pursuant to the Securities Act of 1933,
as amended, and the Indenture is exempt from
qualification pursuant to the Trust Indenture Act of
1939, as amended; and (D) the 1985A Bonds have been
discharged within the meaning of Prior Indenture (as
such term is defined in the Indenture) and are no
longer outstanding within the meaning of the Prior
Indenture.
(ii) the opinion of Stradling, Yocca, Carlson &
Rauth, Newport Beach, California, counsel to the
City, dated the date of the Closing and addressed to
the City and the Underwriter, to the effect that
(A) the City is a municipal corporation and charter
city, duly organized and existing under a
freeholders' charter and in good standing under the
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Constitution and laws of the State of California with
full legal right, power and authority to enter into
the Legal Documents, and to carry out and consummate
all transactions contemplated by this Bond Purchase
Contract and the Official Statement; (B) the Official
Statement has been duly authorized, signed and
delivered by the City; (C) the Legal Documents have
been duly authorized, executed and delivered by the
City and, assuming due authorization, execution and
delivery by the other parties thereto, constitute the
legal, valid and binding obligations of the City,
enforceable in accordance with their respective
terms, except as enforcement of each may be limited
by bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors' rights
generally and by application of equitable principles
regardless of whether such enforceability is
considered in a proceeding in equity or at law, and
except as enforcement may be held to be against
public policy; (D) the resolutions of the City
approving and authorizing the execution and delivery
of the Legal Documents and the Bonds were duly
adopted at meetings of the governing body of the City
which were called and held pursuant to law and with
all public notice required by law and at which a
quorum was present and acting throughout; (E) no
action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by a court, regulatory
agency, public board or bOdy, is pending or, to the
best of such counsel's knowledge, threatened, in any
way affecting the existence or powers of the City, or
seeking to restrain or to enjoin the issuance, sale
or delivery of the Bonds, the application of the
proceeds thereof in accordance with the Indenture, or
the collection of the Revenues (as such term is
defined in the Indenture) pledged under the
Indenture, or in any way contesting or affecting the
validity or enforceability of the Bonds, the
Indenture, the Loan Agreement, or this Bond Purchase
Contract; (F) the execution and delivery of the Bonds
and the Legal Documents, and compliance with the
provisions thereof, under the circumstances
contemplated thereby, do not and will not in any
material respect conflict with or constitute on the
part of the City a violation or breach of or default
(with due notice or the passage of time or both)
under any applicable law or administrative rule or
regulation (except for state or federal Blue Sky or
securities laws, as to which no opinion need be
expressed), or any applicable court or administrative
decree or order or consent decree, or any material
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contract, agreement or instrument to which the City
is a party or by which it or its properties is
otherwise subject or bound or, to the best of such
counsel's knowledge after reasonable investigation
and inquiry, result in the creation or imposition of
any prohibited lien, charge or encumbrance upon any
of the property or assets of the City, which
conflict, violation, breach, default, lien, charge or
encumbrance materially and adversely affects the
consummation of the transactions contemplated by the
Legal Documents or the financial condition, assets,
properties or operations of the City; (G) the
Official Statement has been duly approved, executed
and delivered by the City, and the information
therein as to the City is correct and does not omit
any statement which, in such counsel's opinion,
should be included or referred to therein; and (H) to
the best knowledge of such counsel, the City is not
in any material respect in breach of or default under
any applicable law or administrative regulation of
the State of California or the United States or any
applicable judgment or decree or any material loan
agreement, indenture, bond, note, resolution,
agreement or other instrument to which the City is a
party or is otherwise subject, and no event has
occurred and is continuing which, with the passage of
time or the giving of notice or both, would
constitute a material event of default under any such
instrument.
(iii) the opInIon of Musick, Peeler & Garrett,
Los Angeles, California, counsel for the Corporation,
dated the date of the Closing, and substantially the
form attached hereto as Exhibit E;
(iv) the opinion of McDermott, will & Emery, Los
Angeles, California, counsel for the Underwriter,
dated the date of the Closing, to the effect that
(A) the Bonds are exempt from registration under the
Securities Act of 1933, as amended, and the Indenture
is exempt from qualification under the Trust
Indenture Act of 1939, as amended; and (B) without
passing upon or assuming any responsibility for the
accuracy completeness or fairness of the statements
contained in the Official Statement and making no
representation that they have independently verified
the accuracy, completeness or fairness of any such
statements, based upon the information made available
to them in the course of their participation in the
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preparation of the Official Statement as counsel for
the Underwriter, such counsel does not believe that
the Official Statement (excluding therefrom financial
statements and the statistical data included in the
Official Statement, as to which no opinion need be
expressed) contains an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
therein in the light of the circumstances under which
they were made, not misleading;
(v) an opinion, dated the Closing Date and
addressed to the City and the Underwriter, of counsel
to the Trustee, to the effect that (A) the Trustee is
a banking corporation duly organized and validly
existing under the laws of the State of California
and has full power, authority and legal right to
execute and deliver the Legal Documents to which it
is a party and to comply with the terms thereof and
perform its obligations thereunder; (B) the Legal
Documents to which it is a party have been duly
authorized, executed and delivered by the Trustee
and, assuming due authorization, execution and
delivery by the other parties thereto, constitute
valid, binding and enforceable agreements, in
accordance with their respective terms, of the
Trustee; (C) the Trustee has duly accepted the trusts
under the Indenture and the duties imposed on it as
trustee thereby; and (D) the enforceability of the
Legal Documents to which it is a party may be limited
by bankruptcy, insolvency, and other laws affecting
the enforcement of creditors' rights generally and,
to the extent that certain remedies in such
instruments require or may require enforcement by a
court of equity, such principles of equity as the
court having jurisdiction may impose; (E) no consent,
approval, authorization or other action by any
government or regulatory authority having
jurisdiction over the Trustee that has not been
obtained is or will be required for the execution and
delivery of the Indenture and the Escrow Agreement;
and (F) the execution and delivery by the Trustee of
the Legal Documents to which it is a party, and
compliance with the terms thereof, will not conflict
with, or result in a violation or breach of, or
constitute a default under any loan agreement,
indenture, bond, note, resolution or any other
agreement or instrument to which the Trustee is a
party or by which it is bound, or any law or any
6789W
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rule, regulation, order or decree of any court or
governmental agency or body having jurisdiction over
the Trustee or any of its activities or properties or
(except with respect to the lien of the Indenture, if
any) result in the creation or imposition of any
lien, charge or other security interest or
encumbrance of any nature whatsoever upon any of the
money or fund held under the indenture and the Escrow
Agreement.
(vi) a certificate or certificates, dated the
date of Closing, signed by an authorized official of
the City satisfactory to us, and in form and
substance satisfactory to us, to the effect that
(A) to the best of such official's knowledge no
litigation is pending or threatened (1) to restrain
or enjoin the issuance or delivery of any of the
Bonds or the collection of revenues pledged under the
Indenture, (2) in any way contesting or affecting the
authority for the issuance of the Bonds or the
validity of the Bonds or the Legal Documents, or
(3) in any way contesting the existence or powers of
the City; (B) to the best of such official's
knowledge no event affecting the City has occurred
since the date of the Official Statement which either
makes untrue or incorrect in any material respect, as
of the date of the Closing, any statement or
information concerning the City contained in the
Official Statement or which is not reflected in the
Official Statement but should be reflected therein in
order to make the statements and information therein
concerning the City not misleading in any material
respect; and (C) the representations and warranties
of the City contained herein are true and correct in
all material respects on and as of the date of the
Closing with the same effect as if made on the date
of the Closing;
(vii) a certificate, dated the date of the
Closing, signed by a duly authorized official of the
Trustee satisfactory in form and substance to the
Underwriter to the effect that (A) the Trustee is
duly organized and existing as a state banking
corporation in good standing under the laws of the
State of California having the full power and
authority to enter into and perform its duties under
the Escrow Agreement and the Indenture; (B) the
Trustee is duly authorized to enter into the Legal
Documents to which it is a party and has duly
executed and delivered the Legal Documents to which
it is a party; (C) no consent, approval,
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authorization or other action by any governmental or
regulatory authority having jurisdiction over the
banking or trust powers of the Trustee that has not
been obtained is or will be required for the
execution and delivery of the Legal Documents to
which it is a party; (D) the execution and delivery
by the Trustee of the Legal Documents to which it is
a party and compliance with the terms thereof will
not conflict with, or result in a violation or breach
of, or constitute a default under, any loan
agreement, indenture, bond, note, resolution or any
other agreement or instrument to which the Trustee is
a party or by which it is bound, or any law or any
rule, regulation, order or decree of any court or
governmental agency or body having jurisdiction over
the Trustee or any of its activities or properties,
or (except with respect to the lien of the Indenture)
result in the creation or imposition of any lien,
charge or other security interest or encumbrance of
any nature whatsoever upon the Facilities (as defined
by the Indenture); and (E) there is no action, suit,
proceeding, inquiry or investigation, at law or in
equity, before or by any court or governmental
agency, public board or body pending or, to the best
knowledge of the Trustee, threatened against or
affecting the existence of the Trustee, or in any way
contesting or affecting the validity or
enforceability of the Legal Documents to which it is
a party or contesting the powers of the Trustee or
its authority to enter into and perform its
obligations under any of the foregoing, wherein an
unfavorable decision, ruling or finding would
adversely affect the transactions contemplated hereby
and by the official Statement, or which, in any way,
would adversely affect the validity of the Legal
Documents to which it is a party, or any agreement or
instrument to which the Trustee is a party and which
is used or contemplated hereby and by the Official
Statement or the exemption from taxation as set forth
herein;
(vii) (A) a letter of Ernst & Young, dated the
date of the Closing, updating the letter previously'
delivered to the Underwriter pursuant to Paragraph 4
hereof so that the cut-off date referred to in such
letter will be a date not more than five business
days prior to the date of the Closing, addressed to
the Underwriter; and (B) a letter of Ernst & Young
consenting to the use of its report dated August 18,
1989 included in the Official Statement and to the
references to their firm in the Official Statement;
6789W
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(ix) a Certificate, dated the date of the
Closing, signed by a duly authorized officer or other
representative of the Corporation satisfactory in
form and substance to the Underwriter and its counsel
to the effect that (A) the Corporation has not, since
June 30, 1989, incurred any material liabilities
other than in the ordinary course of business which
are not set forth in or contemplated by the Official
Statement; (B) since June 30, 1989, no material and
adverse change has occured in the financial position
or results of operation of the Corporation which is
not described in the Official Statement; (C) no
litigation is pending or, to the knowledge of such
signatory, threatened (1) to restrain or enjoin the
issuance or delivery of any of the Bonds or the
collection of Revenues pledged under the Indenture,
(2) in any way contesting or affecting the authority
for the issuance of the Bonds or the validity of the
Bonds or the Legal Document, or (3) in any way
contesting the corporate existence, tax-exempt status
or powers of the Corporation; (4) no event affecting
the Corporation or the Facilities (as defined in the
Indenture) has occured since the date of the Official
Statement which either makes untrue or incorrect in
any material respect as of the date of the Closing
any statement or information contained in the
Official Statement or is not reflected in the
Official Statement but should be reflected therein in
order to make the statements and information therein
not misleading in any material respect; (5) to the
best of such person's knowledge, all consents,
approvals and authorizations of governmental bodies
required for the due authorization, execution,
issuance and delivery of the Bonds by the City have
been obtained; and (6) to the best of such person's
knowledge, after reasonable investigation and
inquiry, the representations and warranties of the
Corporation set forth in the Letter of Representation
and the Legal Documents are true and correct at and
as of the date of the Closing;
(x) the certified Articles of Incorporation of
the Corporation, as amended, the bylaws of the
Corporation, as amended, and the resolutions of the
Board of Directors of the Corporation authorizing the
execution and delivery of the Loan Agreement and
authorizing the execution and approval of the
Official Statement and this Bond Purchase Contract
and the Indenture, and all transactions contemplated
by the Official Statement and this Bond Purchase
Contract, all certified by its Secretary;
6789W
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(xi) copies of the Letter of Determination to
the effect that the Corporation is an organization
described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, or the
corresponding provisions or prior law;
(xii) a good standing certificate of recent date
certified by the Secretary of State of the State of
California and a letter of good standing of recent
date certified by the Franchise Tax Board of the
State of California, evidencing the good standing of
the Corporation;
(xiii) two copies of the Legal Documents duly
executed by the parties thereto;
(xiv) two copies of the Official Statement,
executed on behalf of the City by the Mayor and
attested to by the City Clerk, and executed by an
authorized representive of the Corporation;
(xv) two copies of the financial statements
included as Appendix C to the Official Statement;
(xvi) two copies of the Preliminary Blue Sky
Memorandum prepared by our counsel;
(xvii) two certified copies of the resolutions of
the City approving and authorizing the execution and
delivery of this Bond Purchase Contract, the Bonds
and the Legal Documents and any and all other
documentation contemplated thereby or hereby;
(xviii) two certified copies of the signature
resolution of the Trustee authorizing the execution
and delivery of certain documents by certain officers
of the Trustee, which resolution authorizes the
execution and delivery of, among other things, the
Indenture;
(xix) evidence that the ratings of" "and"
given the Bonds by Standard and Poor's Corporation
and Moody's Investors Service, respectively, are in
full force and effect as of the date of Closing;
"
(xx) a verification report, dated the Closing
Date, to the effect that (A) the mathematical
computations with respect to the adequacy of the
6789W
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maturing principal of, and interest earned on, the
federal securities, together with any other funds to
be held in the Escrow Fund (as such terms is defined
in the Escrow Agreement) in accordance with the
Escrow Agreement, to provide for the paYment of the
principal of and interest on the 1985A Bonds when due
to and including 1, 1995 and to redeem
the 1985A Bonds outstanding on such date at a
redemption premium equal to 103% and (ii) the
mathematical computations of the actuarial yield on
the Escrow Fund and on the Bonds, which computations
support the conclusion of Bond Counsel that the Bonds
are not "arbitrage bonds" under Section 148 of the
Internal Revenue Code of 1986, as amended, are
accurate;
(xxi) a non-arbitrage certificate in form
satisfactory to Bond Counsel;
(xxii) a copy of Form 8038G - ("Information Return
for Tax-Exempt Governmental Bond Issues under Section
149(e) of the Code") - executed by an authorized
officer of the City;
(xxiii) the opinion of Bond Counsel, dated the
Closing Date and addressed to the City and in form
and substance satisfactory to the Underwriter
concerning defeasance of the 1985A Bonds; and
(xxiv) such additional legal opinions,
certificates, proceedings, instruments and other
documents as we or Bond Counsel may reasonably
request to evidence compliance by the City with legal
requirements, the truth and accuracy, as of the time
of the Closing, of the representations of the City
herein and in the Official Statement and the due
performance or satisfaction by the City at or prior
to such time of all agreements then to be performed
and all conditions then to be satisfied by the City.
If any of the conditions to the obligations of the
Underwriters contained in this Bond Purchase Contract shall not
have been satisfied when and as required herein, or if the
Underwriter's obligations shall be terminated for any reason
permitted herein, this Bond Purchase Contract shall terminate
and neither the Underwriter nor the City shall have any further
obligation hereunder.
6789W
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7. After the Closing, so long as the Underwriter, or
dealers, if any, are participating in the initial public
offering of the Bonds, the City will (a) not participate in the
issuance of any amendment of or supplement to the Official
Statement to which, after having been furnished with a copy, we
shall object in writing or which shall be disapproved by
counsel for the Underwriter and (b) if an event relating to or
affecting the City shall occur as a result of which it is
necessary, in the opinion of counsel for the Underwriter, to
amend or supplement the Official Statement in order to make the
Official Statement not misleading in light of the circumstances
existing at the time it is delivered to a purchaser, forthwith
prepare and furnish to the Underwriter [(at the expense of the
City for 90 days from the date of Closing, and thereafter
printing and delivery costs to be at the expense of the
Underwriter)] a reasonable number of copies of an amendment of
or supplement to the Official Statement (in form and substance
satisfactory to counsel for the Underwriter) which will amend
or supplement the Official Statement so that it will not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
made, in light of the circumstances existing at the time the
Official Statement is delivered to a purchaser, not misleading.
For the purpose of this Paragraph 7 the City shall furnish such
information with respect to itself as we may from time to time
reasonably request.
8. All expenses and costs of the City incident to the
performance of its obligations in connection with the
authorization, issuance, sale and registration of the Bonds to
the Underwriter, including the cost of printing of the Bonds
(and full execution thereof), the Preliminary Official
Statement, the Official Statement and the Blue Sky Memorandum,
in reasonable quantities, word processing fees of Underwriter's
counsel in connection with the printing and distribution of the
Preliminary official Statement and the Official Statement, fees
of the auditor, fees in connection with providing immediately
available funds for purchase of the Bonds, fees of consultants,
fees of rating agencies, CUSIP Service Bureau charges and fees
and expenses of Bond Counsel and counsel for the Corporation
shall be paid by All expenses to be paid by the
City pursuant to this Bond Purchase Contract may be paid from
Bond proceeds to the extent permitted by the Indenture.
Expenses of the Underwriter, consisting of the fees of counsel
to the Underwriter, travel and other expenses incurred directly
by the Underwriter shall be paid by the Underwriter.
6789W
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9. If any of the provisions of this Bond Purchase
Contract shall for any reason be held to be invalid, illegal or
unenforceable in any respect, then such provision or provisions
shall be deemed severable from the remaining provisions
contained in this Bond Purchase Contract and such invalidity,
illegality or unenforceability shall not affect any other
provision of this Bond Purchase Contract, and this Bond
Purchase Contract shall be construed as if such invalid or
illegal or unenforceable provision had never been contained
herein. The City and the Underwriter hereby declare that they
would have entered into this Bond Purchase Contract and each
and every paragraph, sentence, clause or phrase hereof
irrespective of the fact that anyone or more paragraphs,
sentences, clauses or phrases of this Bond Purchase Contract
may be held illegal, invalid or unenforceable.
10. Any notice or other communication to be given to the
City under this Bond Purchase Contract may be given by
delivering the same in writing at your address set forth above
and any such notice or other communications to be given to the
Underwriter may be given by delivering the same in writing to
Rauscher Pierce Refsnes, Inc., One California Street, Suite
2630, San Francisco, California 94111, Attention: Corporate
Finance Department. The approval of the Underwriter when
required hereunder or the determination of their satisfaction
as to any document referred to herein shall be in writing
signed by Rauscher Pierce Refsnes, Inc. and delivered to you.
11. All representations and agreements of the City in
this Bond Purchase Contract shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of the Underwriter and shall survive the delivery of and
payment for the Bonds. This Bond Purchase Contract shall be
governed by the laws of the State of California.
12. This Bond Purchase Contract may be executed in any
~~w -20-
number of counterparts, each of which shall for all purposes be
deemed to be an original and all of which shall together
constitute but one and the same instrument.
RAUSCHER PIERCE REFSNES, INC.
By:
ACCEPTED AND AGREED TO:
CITY OF SAN BERNARDINO
By:
Mayor
APPROVED:
SAN BERNARDINO COMMUNITY HOSPITAL
By:
An authorized representative
6789W
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EXHIBIT A TO THE BOND PURCHASE CONTRACT
MATURITY SCHEDULE
(to come)
EXHIBIT B TO THE BOND PURCHASE CONTRACT
[Letterhead of the Corporation]
LETTER OF REPRESENTATION
November __, 1989
Rauscher Pierce Refsnes, Inc.
One California Street
Suite 2630
San Francisco, California 94111
~~
City of San Bernardino
San Bernardino, California
Ladies and Gentlemen:
The City of San Bernardino (the "City") and the undersigned
San Bernardino Community Hospital, a California nonprofit public
benefit corporation (the "Corporation") propose to execute and
enter into a Loan Agreement dated as of November I, 1989 (the
"Loan Agreement"). Pursuant to a Bond Purchase Contract dated
the date hereof (the "Bond Purchase Contract"), with you, which
the Corporation has approved, the City proposes to sell
$ aggregate principal amount of its Hospital Revenue
Refunding Bonds (San Bernardino Community Hospital), 1989 Series
(the "Bonds"). The offering of the Bonds is described in a
preliminary official statement dated October II, 1989 (the
"Preliminary Official Statement") and in an official statement
dated the date hereof (the "Official Statement"). Certain
revenues and other moneys received by the City or the Trustee (as
that term is defined below) pursuant or with respect to the Loan
Agreement are pledged to secure the paYment of the Bonds,
including the interest thereon, pursuant to an Indenture dated as
of November I, 1989 (the "Indenture") between the City
and , as trustee (the "Trustee").
In order to induce you to enter into the Bond Purchase
Contract and to make the sale and purchase and reoffering of the
Bonds therein contemplated, the Corporation hereby represents,
warrants and agrees with each of you as follows
(1) The Corporation is a nonprofit public benefit
corporation in good standing under the laws of the State of
California, has and at the Closing (as that term is defined in
the Bond Purchase Contract) will have full legal right, power and
authority to enter into this Letter of Representation and the
Loan Agreement, to approve the Bond Purchase Contract and the
Official Statement and to carry out and consummate all
transactions contemplated by the Bond Purchase Contract to be
carried out and consummated by the Bond Purchase Contract, the
Loan Agreement, this Letter of Representation and the Official
Statement, and by proper corporate action has duly authorized the
execution and delivery of this Letter of Representation and the
Loan Agreement and approval of the Bond Purchase Contract and the
Official Statement.
(2) The officers or authorized representatives of the
Corporation executing this Letter of Representation and the Loan
Agreement and approving the Bond Purchase Contract and the
Official Statement are duly and properly in office and fully
authorized to execute the same.
(3) The Bond Purchase Contract and the Official Statement
have been duly approved by the Corporation; this Letter of
Representation has been duly authorized, executed and delivered
by the Corporation; the Loan Agreement has been duly authorized
and at the Closing (as that term is defined in the Bond Purchase
Contract) will have been duly executed and delivered by the
Corporation; and (i) the Loan Agreement, when assigned by the
City to the Trustee pursuant to the Indenture, will constitute
the legal, valid and binding agreement of the Corporation with
the Trustee enforceable against the Corporation in accordance
with its terms for the benefit of the holders of the Bonds, and
(ii) this Letter of Representation and any rights of the City and
obligations of the Corporation under the Loan Agreement not so
assigned to the Trustee will constitute the legal, valid and
binding agreements of the Corporation enforceable against the
Corporation in accordance with their terms except as enforcement
of each of the above-named documents may be limited by
bankruptcy, insolvency, or other laws affecting the enforcement
of creditors' rights generally and by the application of
equitable principles if equitable remedies are sought.
(4) The execution and delivery of this Letter of
Representation; the approval of the Bond Purchase Contract and
the Official Statement; at the Closing, the execution and
delivery of the Loan Agreement; the consummation of the
transactions therein contemplated; and the fulfillment of or
compliance with the terms and conditions thereof will not
conflict with or constitute a violation or breach of or default
(with due notice or the passage of time or both) under the
articles of incorporation of the Corporation, its bylaws or any
applicable law or administrative rule or regulation, or any
applicable court or administrative decree or order, or any
indenture, mortgage, deed of trust, loan agreement, lease,
contract or other agreement or instrument to which the
Corporation is a party or by which it or its properties are
6809W
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otherwise subject or bound, or result in the creation or
imposition of any prohibited lien, charge or encumbrance of any
nature whatsoever upon any of the properties or assets of the
Corporation, which conflict, violation, breach, default, lien,
charge or encumbrance might have consequences that would
materially and adversely affect the consummation of the
transactions contemplated by the Bond Purchase Contract, the Loan
Agreement, this Letter of Representation or the Official
Statement or the financial condition, assets, properties or
operations of the Corporation.
(5) No consent or approval of any trustee or holder of any
indebtedness of the Corporation, and no consent, permission,
authorization, order or license of, or filing or registration
with, any governmental authority is necessary in connection with
(i) the execution and delivery of this Letter of Representation;
(ii) at the Closing, the execution and delivery of the Loan
Agreement; (iii) the approval of the Bond Purchase Contract or
the Official Statement; or (iv) the consummation of any
transaction therein contemplated, except as have been obtained or
made and as are in full force and effect (or, in the case of the
Loan Agreement, for which the Corporation shall use its best
efforts to obtain prior to the Closing).
(6) There is no action, suit, proceeding, inquiry or
investigation before or by any court of federal, state, municipal
or other government authority pending or, to the knowledge of the
Corporation, threatened against or affecting the Corporation or
the assets, properties or operations of the Corporation which, if
determined adversely to the Corporation or its interests, would
have a material and adverse effect upon the consummation of the
transactions contemplated by or the validity of the Bond Purchase
Contract, the Loan Agreement, this Letter of Representation or
the Official Statement or upon the financial condition, assets,
properties or operations of the Corporation, and the Corporation
is not in default with respect to any order or decree of any
court or any order, regulation or demand of any federal, state,
municipal or other governmental authority, which default might
have consequences that would materially and adversely affect the
consumation of the transactions contemplated by the Bond Purchase
Contract, the Loan Agreement, this Letter of Representation or
the Official Statement or the financial conditions, assets,
properties or operations of the Corporation or its properties.
(7) The Corporation is an organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended (the
"Code"), or corresponding provisions of prior law, based on a
determination from the Internal Revenue Service; said
determination has not been modified, limited or revoked as to the
Corporation; there is no action, suit, proceeding, inquiry or
6809W
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investigation before or by any court or other governmental
authority or agency pending or, to the knowledge of the
Corporation, threatened which could affect the Corporation's
status as an organization described in Section 501(c)(3) of the
Code; the Corporation is in compliance with the terms, conditions
and limitations in said determination; the facts and
circumstances that form the basis of such determination as
represented to the Internal Revenue Service continue
substantially to exist; and based upon such determination the
Corporation is exempt from federal income taxes under Section
501(a) of the Code, except for unrelated business income subject
to taxation under Section 511 of the Code.
(8) The Corporation is a corporation organized and operated
exclusively for charitable purposes within the meaning of Section
501(a) of the Code, not for pecuniary profit, no part of the net
earnings of which inure to the benefit of any private shareholder
or individual.
(9) The proceeds of the Bonds will not be used in
connection with any unrelated trade or business of the
Corporation as defined in Section 513 of the Code, in such manner
or to such extent as would result in the loss of exemption from
federal income tax of interest on any of the Bonds (as that term
is defined in the Indenture) under Section 103 of the Code.
(10) The Corporation has all necessary power and authority
to conduct the business now being conducted by it and as
contemplated by the Loan Agreement, and to enter into this Letter
of Representation and the Loan Agreement, to approve the Bond
Purchase Contract and Official Statement, and to be paid or
reimbursed (to the extent such paYment or reimbursement is
available under applicable statutes, regulations and
administrative practices) under all third party payor programs
accounting for a significant portion of the Corporation's gross
revenues in its fiscal year ended June 30, 1989, including,
without limitation, Medicare [and Medi-Cal].
(11) At the Closing, the Corporation will have good and
marketable title to the Facilities free and clear from all
encumbrances other than Permitted Encumbrances, as those terms
are defined in the Indenture.
[(12) The Corporation is not legally bound to comply with
Section 1122 of the Social Security Act, as amended, with respect
to the financing contemplated by the Official Statement, since
the State of California has elected not to sign a Section 1122
Agreement.]
6809W
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(13) The Corporation has not incurred any material
liabilities, direct or contingent, nor has there been any
material adverse change in the financial position, results of
operation or condition, financial or otherwise, of the
Corporation since June 30, 1989 which is not described in the
Official Statement, whether or not arising from transactions in
the ordinary course of business.
(14) Between the date hereof and the date of the Closing,
the Corporation shall not, without the prior written consent of
Rauscher Pierce Refsnes, Inc. (the "Underwriter"), except as
described in or contemplated by the Official Statement, incur any
material liabilities, direct or contingent, other than in the
ordinary course of business.
(IS) As of the date hereof, the Official Statement
(including the financial statements and other financial and
statistical data contained therein), as amended or supplemented
pursuant to the Bond Purchase Contract or this Letter of
Representation, if applicable, does not and will not contain any
untrue statements of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading.
(16) If between the date hereof and the Closing any event
shall occur which might or would cause the Official Statement, as
then supplemented or amended, to contain an untrue statement of a
material fact or to omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, the Corporation shall notify the City and the
Underwriter and, if in the opinion of the Corporation, the City
or the Underwriter such event requires the preparation and
publication of a supplement or amendment to the Official
Statement, the Corporation shall request the City to cause the
Official Statement to be amended or supplemented in a form and in
a manner approved by the Underwriter.
(17) After the Closing, the Corporation shall (i) not
participate in the issuance of any amendment of or supplement to
the Official Statement to which, after being furnished with a
copy, the City or the Underwriter shall reasonably object in
writing or which shall be disapproved by their respective co~nsel
and (ii) if any event relating to or affecting the City or the
Corporation or its present or proposed facilities shall occur as
a result of which it is necessary, in the opinion of counsel for
the Underwriter or the City, to amend or supplement the Official
Statement in order to make the Official Statement not misleading
in the light of the circumstances existing at the time it is
delivered to a purchaser, forthwith prepare and furnish to the
6809W
B-5
Underwriter and the City [,at the expense of the Corporation for
ninety days from the date of Closing, and thereafter at the
expense of the Underwriters,] a reasonable number of copies of an
amendment of or supplement to the Official Statement (in form and
substance satisfactory to counsel for the Underwriter and counsel
to the City) which will amend or supplement the Official
Statement so that it will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances
existing at the time the Official Statement is delivered to a
purchaser, not misleading. For the purposes of this subsection,
the Corporation will furnish such information with respect to
itself and its present and proposed facilities as either of you
may from time to time reasonably request.
(18) To the extent permitted by law, the Corporation shall
indemnify and hold harmless the Underwriter and the City and each
person, if any, who controls (as such term is defined in Section
15 of the Securities Act of 1933, as amended) the Underwriter and
the officers, agents and employees of the City against any and
all losses, claims, damages, liabilities and expenses (i) arising
out of any statement or information in the Preliminary Official
Statement or in the Official Statement, relating to the
Corporation, the Hospital or AHS (all as defined in the Official
Statement and the Preliminary Official Statement), that is or is
alleged to be untrue or incorrect in any material respect or the
omission or alleged omission therefrom of any statement or
information that should be stated therein or that is necessary to
make the statements therein relating to the Corporation, the
Hospital or AHS, (all as defined in the Official Statement and
Preliminary Official Statement) not misleading in any material
respect, and (ii) to the extent of the aggregate amount paid in
settlement of any litigation commenced or threatened arising from
a claim based upon any such untrue statement or omission if such
settlement is effected with the written consent of the
Corporation; provided, however, that in no event shall this
indemnification agreement inure to the benefit of the Underwriter
(or any person controlling the Underwriter) on account of any
losses, claims, damages, liabilities or actions arising from the
sale of the Bonds upon the public offering to any person by the
Underwriter if such losses, claims, damages, liabilities or
actions arise out of, or are based upon, an untrue statement or
omission or alleged untrue statement or omission in the
Preliminary Official Statement and if the Official Statement
shall correct the untrue statement or omission or the alleged
untrue statement or omission which is the basis of the loss,
claim, damage, liability or action for which indemnification is
sought and a copy of the Official Statement had not been sent or
given to such person at or prior to confirmation of such sale to
him or her, unless such failure to deliver the Official Statement
was a result of noncompliance by the Corporation with Section 18
6809W
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~ ~ --
hereof. In case any claim shall be made or action brought
against the Underwriter or any controlling person based upon the
Official Statement for which indemnity may be sought against the
Corporation, as provided above, the Underwriter shall promptly
notify the Corporation in writing setting forth the particulars
of such claim or action and the Corporation shall assume the
defense thereof, including the retaining of counsel acceptable to
the Underwriter and the payment of all expenses. The Underwriter
or any such controlling person shall have the right to retain
separate counsel in any such action but shall bear the fees and
expenses of such counsel unless (i) the Corporation shall have
specifically authorized the retaining of such counselor (ii) the
parties to such suit include the Underwriter or such controlling
person or persons, and the Corporation and the Underwriter or
such controlling person or persons have been advised by such
counsel that one or more legal defenses may be available to it or
them which may not be available to the Corporation, in which case
the Corporation shall not be entitled to assume the defense of
such suit but you shall bear the fees and expenses of such
counse 1.
The representations, warranties, agreements and indemnities
herein shall survive the Closing under the Bond Purchase Contract
and any investigation made by or on behalf of the Underwriter,
the City or any person who controls the Underwriter or the City
of any matters described in or related to the transactions
contemplated hereby and by the Bond Purchase Contract, the
Official Statement, the Loan Agreement and the Indenture.
This Letter of Representation shall be binding upon and
inure solely to the benefit of the Underwriter, the City and the
Corporation and, to the extent set forth herein, persons
controlling the Underwriter, and their respective officers,
employees, agents and personal representatives, successors and
assigns, and no other person or firm shall acquire or have any
right under or by virtue of this Letter of Representation.
6809W
B-7
..-- ,..
This Letter of Representation may be executed in any number
of counterparts, each of which shall for all purposes be deemed
to be original and all of which shall together constitute but one
and the same instrument.
Very truly yours,
SAN BERNARDINO COMMUNITY HOSPITAL
By:
Accepted and confirmed as of
the date first above written:
CITY OF SAN BERNARDINO
By:
Mayor
RAUSCHER PIERCE REFSNES, INC.
By:
6809W
B-8
EXHIBIT C TO THE BOND PURCHASE CONTRACT
[Letterhead of Ernst & Young]
PROPOSED FORM OF ACCOUNTANT'S LETTER
(to come)
EXHIBIT 0 TO BOND PURCHASE CONTRACT
[Letterhead of Orrick, Herrington & Sutcliffe]
OPINIONS OF BOND COUNSEL
(to come)
EXHIBIT E TO THE BOND PURCHASE CONTRACT
[Letterhead of Musick, Peeler & Garrett]
OPINION OF CORPORATION'S COUNSEL
(to come)
Redevelopment Agency · City of San Bernardino
300 North "D" Street, Fourth Floor · San Bem.rdino, Califamia 92418
(714) 384-.5081 FAX (714) 888-9413
Pride ~
1.::T
SleYeD H. Dukett
Executive Director
OCTOBER 10, 1989
COURT & "E"
Synopsis of Previous Commission/Council/Committee Action:
12-21-87 Resolution No. 5059 adopted a Pre-Disposition Agreement between the
Redevelopment Agency and Simchowitz Corporation.
05-23-88 Resolution No. 5114 adopted approving execution of an Amendment to
the Pre-Disposition Agreement.
(continued on page 2)
(MAYOR AND COMMON COUNCIL)
(COMMUNITY DEVELOPMENT COMMISSION)
Recommended Motion:
OPEN JOINT PUBLIC HEARING.
A) That the Joint Public Hearing be closed; that further reading of the
following resolutions be waived.
(continued on page 3)
Respectfully Submitted,
Ja
Supporting data attached: Yes
FUNDING REQUIREMENTS: $1,900,000
Ward:
Project: Central City Project
...
Commission Notes:
SHD:GW:sm2238H
Agenda of: October 16. 1989
Item NO.~
Redevelopment Agency
(continued from page 1)
Synopsis of Previous Commission/Council/Committee Action:
07-18-88 Resolution No. 5131 adopted approving execution of a Second
Amendment to the Pre-Disposition Agreement.
09-19-88 Resolution No. 5151 adopted approving execution of a Third
Amendment to the Pre-Disposition Agreement.
02-20-89 Commission authorized the execution of a Fourth Amendment to the
Pre-Disposition Agreement.
08/10/89 Committee recommended setting public hearings and approval of DDA.
10/02/89 Mayor and Common Council and Commission set joint public hearings
for 11:00 a.m. on October 16, 1989.
SD:GW:sm:2238H
2
Redevelopment Agency
...'" .......:" ..
(continued from Dage 1)
(MAYOR AND COMMON COUNCIL)
B) Move to adopt a RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE OF
CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND ONE SUNSET COURT., LTD.
(COMMUNITY DEVELOPMENT COMMISSION)
C) Move to adopt a RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF
SALE OF CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO AND ONE SUNSET COURT, LTD.
D)
Move to authorize the execution of a Disposition and Development
Agreement with One Sunset Court, Ltd. for the sale of Agency owned
property in the Central City Project Area with such non-substantive
changes as are approved by Agency Counsel.
{
SD:GH: sm:2238H
3
Redevelopment Agency
S T A F F R E P 0 R T
It is requested that the Commission authorize and the Council approve
execution of a Disposition and Development Agreement (DDA) between One Sunset
Court, Ltd and the Agency.
BACKGROUND
On December 12, 1987 the Commission authorized execution of a Pre-Disposition
Agreement with the Simchowitz Corporation. Under the terms of that agreement,
the attached DDA has been negotiated. The Developer has formed a limited
partnership and has pre-leased approximately eighty percent of the building to
the limited partners, which he represents will assure the availability of
financing. The attached summaries outline key information relative to the
proposed agreement.
The Developer proposes to construct an eight to ten story retail/office
building encompaSSing at least 155,500 square feet and a parking structure for
at least 617 cars. Total construction cost is estimated at approximately
$30,000,000. Construction is scheduled to start in July 1990 and to be
completed in July 1992. Attached is a summary of the financial aspects of the
transaction.
It is estimated that the first year's revenue to the RDA/City will be $310,000
in tax increment and $43,000 in sales tax. Average projected revenues (tax
incre.ent and sales tax) for the first 10 years are $415,000 per year.
Both the Developer and Staff have worked diligently to negotiate a DDA. The
Developer and Staff have completed discussions on the basic deal points
reflected in the attached DDA.
RECCJI4ENDA TI ON
The DDA has been approved as to form and legal content by both Agency and
Special Counsel and we are informed that it will be executed by One Sunset
Court, Ltd. prior to the hearing. It is, therefore, requested that the
Commission and the Council adopt the attached resolutions and that the
Commission authorize execution of the DDA with such non-substantive changes as
are Ipproved by Agency Counsel. In the event a signed copy is not received by
October 16, 1989, it is recommended that the matter be continued.
SD:QI:sm:2238H
4
SUMMARY OF FINANCIAL ASPECTS
OF A PROPOSED SALE OF
REDEVELOPMENT AGENCY OWNED REAL PROPERTY
WITHIN THE CENTRAL CITY PROJECT AREA
TO ONE SUNSET COURT, LTD.
(In Accordance with California Health and Safety Code Section 33433)
It is proposed that the Redevelopment Agency of the City of San
Bernardino will enter into a Disposition and Development Agreement (DDA)
with One Sunset Court, Ltd., A California Limited Partnership (Developer)
under the terms of which the Agency will sell that certain parcel of land
located at the southeast corner of Court Street and "E" Street as shown
on the map attached as Exhibit "A" and further identified as Assessors
Parcel Numbers 134-251-44 and 134-251-56. .
The following financial summary has been prepared pursuant to Section
33433 of the Health and Safety Code.
1.
Cost of the agreement to Agency
a. Total cost to Agency to purchase
b. Agency contribution under DDA *
c. Estimated closing costs
less payment by Developer
Total Net Cost
Land $ 402,283
$1,900,000
30.000
$2,332,283
1.300.000
$1,032,283
2. The estimated value of the interest to be conveyed is
$1,300,000.
3. The purchase price to be paid by the Developer is $1,300,000.
*
Agency contributions to be used for:
1. Demolition, clearance, excavation and soil preparation costs;
2. . foot 1 ngs and foundations; and
3. Cost of parKing structure.
GH:sm:2227H
SUMMARY
One Sunset Court, Ltd.
Court & "E"
Developer:
One Sunset Court, Ltd., A California Limited Partnership.
2.03 Acres (88,426.80 square feet).
Retail/Office containing at least 155,500 square feet
Parking Structure for at least 617 cars.
Land:
Building:
Estimated Development Costs:
Land $ 1,300,000
Construction $30.000,000
$31,300,000
Estimated Revenue: Tax Increment Year 1 - $310,000
Sales Tax Year 1 - $ 43,000
Average projected revenues (tax increment and sales
tax) for the first 10 years are $415,000 per year.
Estimated Jobs: 564
Summary of Disposition and Development Agreement:
· Land Purchase Price: $1,300,000 cash.
· Agency Assistance: $1,900,000 cash upon Developer:
Obtaining all building permits.
Providing proof of construction financing.
· $1,900,000 is to be used for:
First, to pay for demolition, clearance, excavation
and soil preparation costs incurred by Developer in
the preparation of the Site for the office building
and parking structure (the "Improvements") to be
constructed on the Site;
Second, to pay for the footings and foundations of
the Improvements as well as toward the cost of
offsite Public Improvements; and
Third, the balance of such amount shall be used to
pay for a portion of the cost of the parking
structure to be constructed on the Site.
· For fifteen (15) years the Agency will reimburse the Developer
for Parking District fees in excess of $15,000 per year.
· Construction Schedule: See attached.
GW:sm:2219H
~
CC''IQ'' a ... .~&
JIRO.7BC'1'
Dav&lDPllDr s.-~K.wIJ"'-
City Council Approval
Design Review Application
(60 Day Approval Process)
Work Drawing Phase
Submit Full Working Drawings to
Building , Safety
(60 Day Plan Check Process)
Start of Construction
(24 month Construction Phase)
Notice of Completion of Project
September 18, 1989
November 18, 1989
Six Months
May 18, 1990
July 18, 1990
July 18, 1992
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RESOLUTION NO.
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE OF
CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND ONE SUNSET COURT, LTD.
WHEREAS, the Redevelopment Agency of ~he City of San
Bernardino (the "Agency") is authorized to conduct redevelopment
activities within the Central City Redevelopment Project Survey
Area (the "Survey Area"), which activities include the
acquisition and conveyance of real property for private
development; and
WHEREAS, the Agency desires to enter into a Disposition
and Development Agreement (the "Agreement") with One Sunset
Court, Ltd., a California limited partnership, (the
"Participant"), which Agreement provides for the acquisition and
sale of the "Site," which is that certain portion of the Survey
Area as set forth in the Agreement; and
WHEREAS, the Agreement provides for the acquisition, upon
satisfaction of applicable conditions, by Participant of certain
real property as identified in the Agreement pursuant to the
terms and conditions more particularly set forth in the
Agreement; and
WHEREAS, the Common Council of the City of San Bernardino
and the Agency have conducted a duly noticed joint public hearing
regarding the proposed acquisition and disposition of real
property in accordance with California Health and Safety Code
Sections 33431 and 33433; and
WHEREAS, the staff report pertaining to the Agreement,
DAB/ses
October 6, 1989
1
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2
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A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE OF
CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND DEVELOPMENT
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AND ONE SUNSET COURT, LTD.
which has been on display prior to the joint public hearing in
accordance with Section 33433 of the California Health and Safety
Code, contains a detailed description of the provisions of the
Agreement;
NOW THEREFORE, the Mayor and Common Council do hereby
resolve as follows:
SECTION 1.
Pursuant to the California Environmental
Quality Act (CEQA), Public Resources Code Section 21090 and
Section 15180 of Guidelines adopted pursuant thereto the
Agreement is an activity pursuant to and in furtherance of the
Central City Redevelopment Plan.
SECTION 2.
The Mayor and Common Council find and
determine, based upon the testimony and information presented
during the public hearing with respect to the Agreement that the
consideration for the real property to be transferred to the
Participant by deed is in compliance with and evaluated pursuant
to Health and Safety Code Section 33433, and the value thereof is
determined at the highest use permitted under the Redevelopment
Plan, but that such consideration is necessary to secure the
commitment of Participant to execute the Agreement, which
Agreement will significantly benefit the Project Area and the
community by alleviating blighting conditions, generating
revenues, and providing for high-quality development activities
to stimulate the economic enhancement of the Survey Area.
DAB/ses
October 6, 1989
2
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22
1 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE OF
2 CERTAIN REAL PROPERTY PVRSUANT TO A DISPOSITION AND DEVELOPMENT
AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF
3 SAN BERNARDINO AND ONE SUNSET COURT, LTD.
4
5
SECTION 3. The Mayor and Common Council hereby approve the
6
Agreement and all of its provisions, inCluding without
7
8
9
10
limitation, the attachments therein, and authorize the Mayor and
the City Clerk to execute all documents referenced in the
Agreement and necessary to effectuate the provisions of the
Agreement.
11
12
I HEREBY CERTIFY that the foregoing resolution was dUly
adopted by the Mayor and Common Council of the City of San
Bernardino at a
meeting thereof, held on the
, 1989, by the fOllowing vote, to wit:
13
day of
14
AYES:
Council Members
NAYS:
ABSENT
OR ABSTAIN:
City Clerk
The foregoing resolution is hereby approved this
day
of
, 1989.
23 W.R. Holcomb, Mayor
City of San Bernardino
25
24 Approved as to form
and legal content:
JAMES F. PENMAN,
26 City Attorney
27
28
BY:~t:.
./
DAB/ses
October 6, 1989
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RESOLUTION NO.
A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE
OF CERTAIN RgAL PROPERTY PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO AND ONE SUNSET COURT, LTD.
WHEREAS, the Redevelopment Agency of the City of San
Bernardino (the "Agency") is authorized to conduct redevelopment
activities within the Central City Redevelopment Project Area
(the "Project Area"), which activities include the acquisition
and conveyance of real property for private development: and
WHEREAS, the Agency desires to enter into a Disposition
and Development Agreement (the "Agreement") with One Sunset
Court, Ltd., a California limited partnership, (the
"Participant"), which Agreement provides for the acquisition and
sale of the "Site," which is that certain portion of the Project
Area as set forth in the Agreement: and
WHEREAS, the Agreement provides for the acquisition, upon
satisfaction of applicable conditions, by Participant of certain
real property as identified in the Agreement pursuant to the
terms and conditions more particularly set forth in the
Agreement: and
WHEREAS, the Common Council of the City of San Bernardino
and the Agency have conducted a duly noticed joint public hearing
regarding the proposed acquisition and disposition of real
property in accordance with California Health and Safety Code
Sections 33431 and 33433: and
WHEREAS, the staff report pertaining to the Agreement,
which has been on display prior to the joint public hearing in
DAB/ses
October 6, 1989
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1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE
2 OF CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF
3 THE CITY OF SAN BERNARDINO AND ONE SUNSET COURT, LTD.
4
5
6
7
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9
accordance with Section 33433 of the California Health and Safety
Code, contains a detailed description of the provisions of the
Agreement;
NOW THEREFORE, the Community Development Commission of the
City of San Bernardino does hereby resolve as follows:
10
SECTION 1.
Pursuant to the California Environmental
11
Quality Act (CEQA), Public Resources Code Section 21090 and
12
Section 15180 of Guidelines adopted pursuant thereto the
Agreement is an activity pursuant to and in furtherance of the
Central City Redevelopment Plan.
SECTION 2.
The Community Development Commission of the
City of San Bernardino finds and determines, based upon the
testimony and information presented during the public hearing
with respect to the Agreement that the consideration for the real
property to be transferred to the Participant by deed is in
compliance with and evaluated pursuant to Health and Safety Code
Section 33433, and the value thereof is determined at the highest
use permitted under the Redevelopment Plan, but that such
consideration is necessary to secure the commitment of
Participant to execute the Agreement, which Agreement will
significantly benefit the Commission, the Agency and the
community by alleviating blighting conditions, generating
revenues, and providing for high-quality development activities
to stimulate the economic enhancement of the Project Area.
DAB/ses
October 6, 1989
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1 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO APPROVING THE CONVEYANCE BY MEANS OF SALE
2 OF CERTAIN REAL PROPERTY PURSUANT TO A DISPOSITION AND
DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF
3 THE CITY OF SAN BERNARDINO AND ONE SUNSET COURT, LTD.
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SECTION 3. The Community Development Commission hereby
approves the Agreement and all of its provisions, including
without limitation, the attachments therein, and authorizes the
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Chairman, the Executive Director and the Secretary to execute all
documents referenced in the Agreement and necessary to effectuate
the provisions of the Agreement.
11
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Community Development Commission of the City of
San Bernardino at a
meeting thereof, held on the
day of
, 1989, by the following vote, to wit:
AYES:
Commissioners
NAYS:
ABSENT
OR ABSTAIN:
Secretary
The foregoing resolution is hereby approved this
day
of
, 1989.
23 Chairman of the Community
Development Commission of the City
24 of San Bernardino
Approved as to form
25 and legal content:
27
26 Agency Counsel
28
B~~<. )
DAB/ses
October 6, 1989
3
DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the
REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO,
AGENCY,
and
(
ONE SUNSET COURT, LTD.,
DEVELOPER
TABLE OF CONTENTS
I. 1~100] SUBJECT OF AGREEMENT
A. 1~101] Background and Purpose of Agreement
B. 1~102] The Redevelopment Plan
C. 1~103] The Site
D. f~104] Parties to the Agreement
II.
F.
G.
H.
I.
J.
K.
L.
M.
N.
1.
2.
3.
A.
1~200]
1~201]
f 9202 ]
f9203]
19204]
19205]
f9206]
B.
C.
D.
E.
19207]
[9208]
1~209]
19210]
19211]
1~212]
1~213]
[9214]
19105]
19106]
f9107]
The Agency
The Developer
Prohibition Against Change in
Ownership, Management and Control of
the Developer
DISPOSITION OF THE SITE
Purchase Price
Disposition of the Site
Agency Assistance
Conditions Precedent
Escrow
Conveyance of Title and Delivery of
Possession
Form of Deed for the Disposition Conveyance
Condition of Title
Time for and Place of Delivery of Grant Deed
Recordation of Documents
Title Insurance
Taxes and Assessments
Condition of the Site
Preliminary Work
(i)
I I I.
D.
A.
[S300]
[S301]
Development of the Site by the Developer
DEVELOPMENT OF THE SITE
1. r i302 ]
2. r i303 ]
3. [i304]
Scope of Development
Design Concept Drawings
Construction Drawings and Related
Documents
4. [S305]
5. I i306]
6. ri307]
Cost of Construction
Construction Schedule
Bodily Injury and Property Damage
Insurance
7. ri308]
City and Other Governmental Agency
Permits
8. r i 3 09 ]
9. [i310]
10. [S311]
Rights of Access
Local, State and Federal Laws
Antidiscrimination During Construction
B.
r S312]
[ S313 ]
Taxes, Assessments, Encumbrances and Liens
C.
Prohibition Against Transfer of the Site,
the Buildings or Structures Thereon and
Assignment of Agreement
IS314]
Mortgage, Deed of Trust, Sale and Lease-Back
Financing; Rights of Holders
1. IS315] No Encumbrances Except Mortgages, Deeds
of Trust, or Sale and Lease-Back for
Development
2. rS316] Holder Not Obligated to Construct
Improvements
3. [S317] Notice of Default to Mortgagee or Deed
of Trust Holders; Right to Cure
4. rS318] Failure of Holder to Complete
Improvements
(ii)
IV
V.
D.
VI.
A.
B.
C.
D.
E.
E.
rS319]
F.
rS320]
A.
rS400]
rS401]
rS402]
IS403]
B.
C.
A.
rSSOO]
rSS01]
B.
rSS02]
rSS03]
C.
rSS04]
rS600]
rS601]
rS602]
l.
2.
3.
rS606]
Ifi607]
IS608]
Right of the Agency to Satisfy Other Liens
on the Site After Title Passes
Certificate of Completion
USE OF THE SITE
Uses
Rights of Access
Effect of Violation of the Terms and
Provisions of this Agreement After
Completion of Construction
GENERAL PROVISIONS
Notices, Demands and Communications Among
the Parties
Conflicts of Interest; Nonliability
Enforced Delay; Extension of Times of
Performance
Inspection of Books and Records
DEFAULTS AND REMEDIES
Defaults -- General
Legal Actions
IS603]
IS604]
lfi60S]
Institution of Legal Actions
Applicable Law
Acceptance of Service of Process
Rights and Remedies Are Cumulative
Inaction Not a Waiver of Default
Remedies and Rights of Termination Prior
to Conveyance
(iii)
1.
2.
3.
4.
F.
[~614J
1.
2.
3.
VII. [97OOJ
}>. . (~701J
B. [ 9702 J
(
VI I I. [98OOJ
IX. [~900]
Attachment No. 1
Attachment No. 2
Attachment No. 3
Attachment No. 4
Attachment No. 5
Attachment No. 6
(fi609J
[fi610]
[~611J
[9612]
[fi615]
[9616J
[fi617]
Damages Prior to Conveyance
Specific Performance
Termination by the Developer
Termination by the Agency
Remedies of the Agency and the Developer
for Default After Passage of Title and
Prior to Completion of Construction
Damages
Action for Specific Performance
Reentry and Revesting of Title in the
Agency
SPECIAL PROVISIONS
Submission of Documents to the Agency for
Approval
Successors in Interest
ENTIRE AGREEMENT, WAIVERS
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY
ATTACHMENTS
Site Map
Legal Description of the Site
Schedule of Performance
Scope of Development
Certificate of Completion
Grant Deed
(iv)
DISPOSITION AND DEVELOPMENT AGREEMENT
~IS AGREEMENT is entered into by and between the
REDEVEImENT AGENCY OF THE CITY OF SAN BERNARDINO (the
"Age~>> and ONE SUNSET COURT, LTD., a California limited
partfh-,'-~,ip (the "Developer"). The Agency and the Developer
herebJ' ~e as follows:
1.
A..
If100]
111011
SUBJECT OF AGREEMENT
Purpose of Agreement
(
2he purpose of this Agreement is to effectuate the
Redeve~nt Plan for the Central City Redevelopment Project
(the "hoject") by providing for the development of certain
property situated within the Central City Project Area (the
"Project. Area") of the Project. That certain real property to
be developed pursuant to this Agreement (the "Site") is
depicted on the "Site Map", which is attached hereto as
Attachment No. 1 and incorporated herein by reference. This
Agreement js entered into for the purpose of developing the
Site and not for speculation in land holding. Completing the
develop.eDt on the Site pursuant to this Agreement is in the
vital and best interest of the City of San Bernardino,
California (the 'lei ty") and the health, safety and welfare of
its residents, and in accord with the public purposes and
provisions of applicable state and local laws and requirements
under which the Project has been undertaken.
B.
(S102]
The Redevelopment Plan
The Redevelopment Plan was approved and adopted by
Ordinance No. 2649 and amended by Ordinance Nos. 3059 and MC559
of the Common Council of the City of San Bernardino; said
ordinance and the Redevelopment Plan as so approved (the
"Redevelopment Plan") are incorporated herein by reference.
C.
lSl03)
The Site
The Site is that certain real property designated on
the Site Map (Attachment No.1) and described in the "Legal
Description of the Site", which is attached hereto as
Attachment No. 2 and is incorporated herein by this reference.
The Site is held in fee by the Agency.
D.
ri104]
Parties to the Agreement
1.
[i10S]
The Agency
The Agency is a public body, corporate and
politic, exercising governmental functions and powers and
organized and existing under Chapter 2 of the Community
Redevelopment Law of the State of California. The principal
office of the Agency is located at 300 North "D" Street, San
Bernardino, California 92418.
"Agency", as used in this Agreement, includes the
Redevelopment Agency of the City of San Bernardino, and any
assignee of or successor to its rights, powers and
responsibilities.
2.
rfi106]
The Developer
The Developer is One Sunset Court, Ltd., a
California limited partnership. The General Partners of the
partnership will be THE SIMCHOWITZ CORPORATION, a California
corporation, and MERVYN SIMCHOWITZ, an individual. The
principal office and mailing address of the Developer for
purposes of this Agreement is One Sunset Court, Ltd.,
Attention: Mervyn Simchowitz, 22S West Hospitality Lane, Suite
100, San Bernardino, California 92408.
3.
[fi107]
Prohibition Against Change in
Ownership, Management and Control of
the Developer
The qualifications and identity of the Developer
are of particular concern to the City and the Agency. It is
because of those qualifications and identity that the Agency
has entered into this Agreement with the Developer. No
voluntary or involuntary successor in interest of the Developer
shall acquire any rights or powers under this Agreement except
as expressly set forth herein.
The Developer shall not assign all or any part of
this Agreement or any rights hereunder without the prior
written approval of the Agency, which approval the Agency may
grant, withhold or deny at its discretion. In the event of
such transfer or assignment: (1) the assignee shall expressly'
assume the obligations of the Developer pursuant to this
Agreement in writing satisfactory to the Agency; (2) the
original Developer shall remain fully responsible for the
performance and liable for the obligations of the Developer
pursuant to this Agreement.
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In the absence of specific written agreement by
the Agency, no such transfer, assignment or approval by the
Agency shall be deemed to relieve the Developer or any other
party from any obligation under this Agreement.
All of the terms, covenants and conditions of
this Agreement shall be binding upon and shall inure to the
benefit of the Developer and the permitted successors and
assigns of the Developer. Whenever the term "Developer" is
used herein, such term shall include any other permitted
successors and assigns as herein provided.
Subject to the requirements of the operating
covenant in Section 402, the restrictions of this Section 107
shall terminate and be of no further force and effect upon the
issuance by the Agency of a Certificate of Completion in the
form attached hereto as Attachment No. 5 as provided in
Section 321 upon completion of the Developer Improvements
described in Section 302 of this Agreement.
11.
A.
ri200]
li201]
DISPOSITION OF THE SITE
Purchase Price
i
Subject to applicable terms and conditions of this
Agreement, the Agency agrees to sell to the Developer and the
Developer shall purchase from the Agency the Site for an amount
equal to One Million Three Hundred Thousand Dollars (the
"Purchase Price") due and payable concurrently with close of
escrow:
B.
r i202 ]
Disposition of the Site
The Developer shall purchase from the Agency the Site
and the Agency agrees to sell to the Developer the Site, in
accordance with and subject to all of the terms, covenants and
conditions of this Agreement. Thereupon, the Developer agrees
to and shall develop the Site within the times, for the uses
and subject to the terms, conditions and provisions as
hereinafter provided.
In addition to the consideration set forth in Sections
201 and 202, the Developer shall pay all of those costs,
charges, fees and expenses as hereafter expressly provided to
be paid by Developer pursuant to this Agreement and shall,
except as herein provided, at its cost, provide all of the
improvements required by this Agreement to be provided by the
Developer (the "Developer Improvements").
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C.
( i203 J
Agency Assistance
1. Basic Assistance
Concurrently with the close of excrow, the
Agency shall pay Developer One Million Nine Hundered Thousand
Dollars ($1,900,000) (the "Basic Assistance"), which amount
Developer shall apply as follows:
a. First, to pay for demolition, clearance,
excavation and soil preparation costs incurred by
Developer in the preparation of the Site for the
office bUilding and parking structure (the
"Improvements") to be constructed on the Site;
b. Second, to pay for the footings and foundations
of the Improvements as well as toward the cost of
offsite Public Improvements; and
c. Third, the balance of such amount shall be used
to pay for a portion of the cost of the parking
structure to be constructed on the Site.
2. Parking District Fee
For a period of fifteen years from the date of
the issuance of a Certificate of Completion (Attachment No.5)
the Agency shall reimburse the Developer for those Parking
District Fees assessed against the Site in excess of Fifteen
Thousand Dollars ($15,000).
D.
[9204J
Conditions Precedent
The fOlloWing are conditions precedent to the
conveyance of the Site by the Agency to the Developer:
1. the Developer shall have paid or shall have
caused to be paid to escrow all closing costs and charges which
Developer is obligated to pay pursuant to this Agreement;
2. the Developer shall have provided proof of
insurance (certificates) conforming to Section 307 of this
Agreement;
3. the Developer shall have obtained all
building and other permits needed to commence construction of
the Developer Improvements;
4. the Developer provides proof reasonably
satisfactory to the Agency or its designee that the Developer
has obtained an irrevocable commitment of an institutional
lender for interim (construction) financing which commitment
requires that the Developer guaranty completion;
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5. the Agency shall execute and deliver to the
Escrow Agent the Grant Deed (Attachment No.9).
The foregoing conditions numbered 1 to 5, inclusive,
as set forth in Section 202, shall collectively constitute the
"Conditions Precedent." All of the Conditions Precedent shall
be satisfied prior to the Disposition Conveyance.
E.
rS205]
Escrow
This Agreement constitutes the joint basic escrow
instructions of the Agency the Developer for the conveyance of
the Site by the Agency to the Developer (the "Conveyance").
The Agency and the Developer shall provide such additional
escrow instructions as may be necessary, provided that such
instructions shall be consistent with this Agreement.
Ticor Title Insurance Company of California, or
another escrow holder mutually acceptable to the parties (the
"Escrow Agent") is hereby empowered to act under this
Agreement, and the Escrow Agent shall carry out its duties as
Escrow Agent hereunder. Escrow Agent shall open a separate
escro~ to handle the delivery and recordation of documents
provided for under this Agreement.
(
Upon delivery of the Grant Deed (Attachment No.6),
the Escrow Agent shall cause to be recorded the Grant Deed
(Attachment No.6), when title can be vested in the Developer
in accordance with the terms and provisions of this Agreement.
The Developer shall accept conveyance of title and possession
of the Site by the time set forth in the Schedule of
Performance (Attachment No.3) subject to the satisfaction of
the Conditions Precedent. The Escrow Agent shall cause to be
paid any applicable transfer tax with funds provided by the
Agency.
The Developer and the Agency shall pay in escrow to
the Escrow Agent the following fees, charges and costs with
respect to the Conveyance promptly after the Escrow Agent has
notified the Developer and the Agency of the amount of such
fees, charges and costs, but not earlier than ten (10) days
prior to the scheduled date for closing the Escrow:
a. The premium for the title insurance policy to be
paid by the Agency as set forth in Section 209 of this
Agreement;
b. Recording fees to be paid by Developer;
c. Notary fees (evenly divided between Agency and
Developer);
d. Any State, County or City documentary stamps
(Agency) ;
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e. Any transfer tax (Agency); and
f. Ad valorem taxes, if any, upon the Site for any
time prior to transfer of title (Agency).
The Escrow Agent is authorized to:
a. Pay, and charge the Agency and the Developer,
respectively, for any fees, charges and costs payable under
this Section 205 of this Agreement. Before such payments or
charges are made, the Escrow Agent shall notify the Agency, and
the Developer of the fees, charges and costs necessary to clear
title and close the Escrow.
b. Disburse funds and deliver the deed and other
documents to the parties entitled thereto when the conditions
of this Escrow have been fulfilled by the Agency and the
Developer.
c. Record any instruments delivered through this
Escrow, if necessary or proper, to vest title in the Developer
in accordance with the terms and provisions of this Agreement.
All funds received in this Escrow shall be deposited
by the Escrow Agent with other escrow funds of the Escrow Agent
in a general escrow account or accounts with any state or
national bank doing business in the State of California. Such
funds may be transferred to any other general escrow account or
accounts. All disbursements shall be made by check of the
Escrow Agent. All adjustments are to be made on the basis of a
thirty (30) day month. All interest earned shall be credited
to the benefit of the party depositing the corresponding funds.
If the Escrow is not in condition to close on or
before the time for conveyance established in Section 206 of
this Agreement, any party who then shall have fully performed
the acts to be performed before the conveyance of title may, in
writing, demand from the Escrow Agent the return of its money,
papers or documents deposited with the Escrow Agent. No demand
for return shall be recognized until twenty (20) days after the
Escrow Agent shall have mailed copies of such demand to the
other party or parties at the address of its or their principal
place or places of business. Objections, if any, shall be
raised by written notice to the Escrow Agent and to the other
party within the twenty (20) day period, in which event the
Escrow Agent is authorized to hold all money, papers and
documents with respect to the Site until instructed by a mutual
agreement of the parties or by a court of competent
jurisdiction. If no written reply to an objection is delivered
to the Escrow Agent within said twenty (20) day period, to any
demand, then the Escrow Agent shall comply with such original
demand and cancel escrow forthwith. If such demand and reply
are complied with within such twenty (20) day period, Escrow
shall close in accordance with the terms hereinabove set forth.
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In the event of an objection to any demand to release
money, papers or documents, the Escrow Agent shall not be
obligated to return any such money, papers or documents except
upon the written instructions of the Agency and the Developer
or until the party entitled thereto has been determined by a
final decision of a court of competent jurisdiction.
Any amendment to these Escrow instructions shall be in
writing and signed by the Agency and the Developer. At the
time of any amendment, the Escrow Agent shall agree to carry
out its duties as Escrow Agent under such amendment.
All communications from the Escrow Agent to the Agency
or the Developer shall be directed to the addresses and in the
manner established in Section 501 of this Agreement for
notices, demands and communications between the Agency and the
Developer.
The liability of the Escrow Agent under this
Agreement, insofar as it acts in the capacity of escrow holder
and without limitation to its responsibility or liability
insofar as it may act in another capacity, is limited to
performance of the obligations imposed upon it under Sections
203 to 209, both inclusive, of this Agreement.
F.
(~206]
Conveyance of Title and Delivery of
Possess~on
Subject to any extensions of time mutually agreed upon
between the Agency and the Developer, the Conveyance shall be
completed on or prior to the date specified therefor in the
Schedule of Performance (Attachment No.3). Said Schedule of
Performance (Attachment No.3) is subject to revision from time
to time as mutually agreed upon in writing between the
Developer and the Agency.
The Developer shall accept title and possession on or
before the date established in the Schedule of Performance
(Attachment No.3) for the Conveyance provided all conditions
to performance by Developer have been satisfied.
G.
(~207]
Form of Deed for the Disposition Conveyance
Subject to the requirements of Section 201, and all
applicable terms and conditions of this Agreement, and subject
to acquisition of the Site by the Agency, the Agency shall
convey to the Developer title to the Site in the co~dition
provided in Section 206 of this Agreement by grant deed in the
form of the Grant Deed (Attachment No.6).
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H.
[i208J
Condition of Title
The Agency shall convey to the Developer fee simple
merchantable title to the Site, excepting therefrom mineral
rights, free and clear of all recorded or unrecorded liens,
encumbrances, covenants, assessments, easements, leases and
taxes, except for covenants and easements of record at the time
of execution of this Agreement which the Developer has approved
in writing, the Redevelopment Plan, the provisions contained in
the Grant Deed (Attachment No.6) and such other encumbrances
to which the Developer may consent. The condition of title
shall be compatible with and not preclude development of the
Developer Improvements, and the Developer shall review
easements prior to and as a condition of closing consistent
with the foregoing. The parties shall act reasonably in
evaluation of any encumbrances and shall act diligently and
promptly to conform the condition of title to that required for
the Developer to proceed with development of the Developer
Improvements. In no event shall the Developer be required to
accept title subject to a deed of trust or mortgage or any
prior Disposition and Development Agreement or other agreement
between the Agency and Frank Dominquez.
1.
[i209)
Time for and Place of Delivery of Agency Deed
(
Subject to any mutually agreed upon extension of time,
the Agency shall deposit the Grant Deed (Attachment No.9) with
the Escrow Agent on or before the date established for the date
of the Conveyance pursuant to the Sehedule of Performance
(Attachment No.3).
J.
[i210J
Recordation of Documents
The Escrow Agent shall file among the land records in
the Office of the County Recorder for San Bernardino County
those instruments enumerated in Section 205.
K.
[i211)
Title Insurance
Concurrently with recordation of the Grant Deed
(Attachment No.6), Ticor Title Insurance Company of California
(the "Title Company") shall provide and deliver to the
Developer a title insurance policy issued by the Title Company.
insuring that the title to the Site is vested in the Developer
in the condition required by Section 208 of this Agreement.
The amount of such title insurance policy shall be One Million
Three Hundred Thousand Dollars ($1,300,000); provided that the
Agency shall bear that portion of the premium for such policy
as would be applicable for a CLTA policy based upon the
Purchase Price. The Title Company shall provide the Agency
with a copy of such title policy.
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L.
[~212J
Taxes and Assessments
Ad valorem taxes and assessments, if any, on the Site,
levied, assessed or imposed for any period commencing prior to
the Conveyance shall be the responsibility of the Agency, and
shall be paid through escrow. Any of such taxes imposed after
the Conveyance shall be borne by the Developer.
M.
[~213J
Condition of the Site
The Developer assumes all responsibility for any
demolition and clearance of each phase of the Site as necessary
for the provision of the Developer Improvements and the
Developer assumes all responsibility for the suitability of the
Site, for the operation of a professional office and associated
commercial center (as hereinafter defined in Section 401 of
this Agreement). The Agency makes no representations or
warranties concerning the Site, its suitability for the use
intended by the Developer, or the surface or subsurface
conditions of the Site. In the event Developer completes its
acquisition of the Site and if the soil or other surface or
subsurface conditions of the Site are not in all respects
entirely suitable for the use or uses to which the Site will be
put as of the conveyance of the Site, then it is the
responsibility and obligation of Developer (and such third
parties, if any, as may be legally responsible for the removal
of hazardous substances) and not th~ Agency to take such action
as may be necessary to place the Site in a condition entirely
suitable for the commencement, development and completion of
the Developer Improvements.
The Developer shall defend, indemnify and hold
harmless the Agency for any claim related to or arising out of
hazardous waste contamination occurring after transfer of title
to Developer which claim against the Agency is based upon the
fact that the Agency held title to the property.
N.
1~214J
Preliminary Work
Any preliminary work undertaken on the Site by
Developer prior to conveyance of title thereto shall be done
only after obtaining the written consent of the Agency, and at
the sole expense of Developer.
The Developer shall save and protect the Agency and
the City against any claims resulting from all preliminary
work, access or use of the Site undertaken by the Developer
pursuant to this Section 214. Any preliminary work by the
Developer shall be undertaken only after securing any and all
necessary permits from the appropriate governmental agencies.
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I I I .
A.
[~300]
[~301]
DEVELOPMENT OF THE SITE
Development of the Site by the Developer
1.
[~302]
Scope of Development
The Site shall be developed as provided in the
Scope of Development, which is attached hereto as Attachment
No. 4 and is incorporated herein. The Developer Improvements
shall consist of an office building and related commercial
facilities containing not less than One Hundred Fifty-Five
Thousand Five Hundred (155,500) square feet.
The development shall include any plans and
specifications submitted to Agency or the City for approval,
and shall incorporate or show compliance with all applicable
mitigation measures.
By the time set forth in the Schedule of
Performance (Attachment No.3) for completion of the Developer
Improvements, the Developer shall have completed construction
of improvements on the Site.
2.
[~303]
DeSign Concept Drawings
By the respective times set forth therefor in the
Schedule of Performance (Attachment No.3), the Developer shall
prepare and submit to the City for its approval Design Concept
Drawings and related documents containing the overall plan for
development of the Site. The Site shall be developed as
established in this Agreement and such documents except as
changes may be mutually agreed upon between the Developer and
the Agency. Any such changes shall be within the limitations
of the Scope of the Development (Attachment No.4).
3.
[~304]
Construction Drawings and Related
Documents
By the time set forth therefor in the Schedule of
Performance (Attachment No.3), the Developer shall prepare and
submit to the City, construction drawings, landscape plan and
related documents for development of the Site for architectural
review and written approval.
The landscaping and finish grading plans shall be
prepared by a professional landscape architect who may be the
same firm as the Developer's architect.
During the preparation of all drawings and plans,
staff of the Agency and the Developer shall hold regular
progress meetings to coordinate the preparation of, submission
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to, and review of drawings, plans and related documents. The
staff of Agency and the Developer shall communicate and consult
informally as frequently as is necessary to insure that the
formal submittal of any documents to the Agency can receive
prompt and speedy consideration.
4.
19305]
Cost of Construction
Except as herein provided, the cost of developing
the Site and constructing all improvements thereon shall be
borne by the Developer.
5.
19306]
Construction Schedule
The Developer shall promptly begin and thereafter
diligently prosecute to completion the construction of the
Developer Improvements and the development of the Site. The
Developer shall begin and complete all construction and
development within the times specified in the Schedule of
Performance (Attachment No.3). The Developer shall strictly
conform to all time requirements and limitations set forth in
this Agreement.
6.
19307]
Bodily Injury and Property Damage
Insurance
{
!
The Developer shall defend, assume all
responsibility for and hold the Agency, the City, and their
respective officers and employees, harmless from all claims or
suits for, and damages to, property and injuries to persons,
inclUding accidental death (including attorneys fees and
costs), which may be caused by any of the Developer's
activities under this Agreement, to the extent the activities
of the Developer are performed negligently, constitute
intentional misconduct, or are breach of the obligations of the
Developer under this Agreement, whether such activities or
performance thereof be by the Developer or anyone directly or
indirectly employed or contracted with by the Developer and
whether such damage shall accrue or be discovered before or
after termination of this Agreement. The Developer shall take
out and maintain until (i) the issuance of a Certificate of
Completion for all of the Developer Improvements pursuant to
Section 320 of this Agreement (if an "occurrence" policy is
obtained or (ii) the second anniversary of the completion of
the Developer Improvements (if a "claims made" policy is
obtained, a comprehensive liability policy in the amount of One
Million Dollars ($1,000,000) combined Single limit policy,
including contractual liability, as shall protect the
Developer, City and Agency from claims for such damages.
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The Developer shall furnish a certificate of
insurance countersigned by an authorized agent of the insurance
carrier on a form of the insurance carrier setting forth the
general provisions of the insurance coverage. This
countersigned certificate shall name the City and the Agency
and their respective offices, agents, and employees as
additional insures under the policy. The certificate by the
insurance carrier shall contain a statement of obligation on
the part of the carrier to notify City and the Agency of any
material change, cancellation or termination of the coverage at
least thirty (30) days in advance of the effective date of any
such material change, cancellation or termination. Coverage
provided hereunder by the Developer shall be primary insurance
and not contributing with any insurance maintained by the
Agency or City, and the policy shall contain such an
endorsement. The insurance policy or the certificate of
insurance shall contain a waiver of subrogation for the benefit
of the City and the Agency. The required certificate shall be
furnished by the Developer at the time set forth therefor in
the Schedule of Performance (Attachment No.3).
The Developer shall also furnish or cause to be
furnished to the Agency evidence satisfactory to the Agency
that any contractor with whom it has contracted for the
performance of work on the Site or otherwise pursuant to this
Agreement carries workers' compensation insurance as required
by law.
7.
19308J
Citv and Other Governmental Agency
Permits
Before commencement of construction or
development of any buildings, structures or other works of
improvement upon the Site, the Developer shall, at its own
expense, secure or cause to be secured any and all permits
which may be required by the City or any other governmental
agency affected by such construction, development or work.
8.
(9309)
Rights of Access
For the purpose of assuring compliance with this
Agreement, representatives of the Agency and the City shall
have the right of access to the Site, without charges or fees,
at normal construction hours during the period of construction
for the purposes of this Agreement including, but not limited
to, the inspection of the work being performed in constructing
the improvements, so long as they comply with all safety rules
and have given prior notice to the Developer. Such
representatives of the Agency or of the City shall be those who
are so identified in writing by the Executive Director of the
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Agency. The Agency shall hold the Developer harmless from any
bodily injury or related damages arising out of the activities
of the Agency and the City as referred to in this Section 309.
This Section 309 shall not be deemed to diminish or limit any
rights which the City or the Agency may have by operation of
law irrespective of this Agreement.
9.
rfi310]
Local, State and Federal Laws
The Developer shall carry out the construction of
the improvements in conformity with all applicable laws,
including all applicable federal and state labor standards;
provided, however, Developer and its contractors, successors,
assigns, transferees and lessees are not waiving their rights
to contest any such laws, rules or standards.
10.
[9311J
Antidiscrimination During Construction
The Developer, for itself and its successors and
assigns, agrees that in the construction of the improvements
provided for in this Agreement, the Developer shall not
discriminate against any employee or applicant for employment
because of race, color, creed, religion, age, sex, marital
status, handicap, national origin or ancestry.
E.
r fi312]
Taxes, Assessments, Encumbrances and Liens
(
(
The Developer shall pay when due all ad valorem taxes
and assessments on the Site and levied subsequent to the
acquisition of title heretofore by the Developer. Prior to
issuance of a Certificate of Completion with respect to all of
the Developer Improvements pursuant to this Agreement, the
Developer shall not place or allow to be placed on the Site or
any part thereof any mortgage, trust deed, encumbrance or lien
other than as expressly allowed by this Agreement. The
Developer shall remove or have removed any levy or attachment
made on any of the Site or any part thereof, or assure the
satisfaction thereof within a reasonable time but in any event
prior to a sale thereunder.
C.
[9313]
Prohibition Against Transfer of the Site,
the Buildings or Structures Thereon and
Assignment of Agreement
Prior to the issuance by the Agency of a Certificate
of Completion as to any building or structure, the Developer
shall not, except as permitted by this Agreement, without the
prior written approval of the Agency (which may be given by the
Executive Director of the Agency on behalf of the Agency), make
any total or partial sale, transfer, conveyance, assignment or
lease of the whole or any part of the Site or of the buildings
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or structures on the Site. This prohibition shall not be
deemed to prevent a transfer expressly permitted pursuant to
Section 108 of this Agreement, or the granting of temporary or
permanent easements or permits to facilitate the development of
the Site.
D.
19314]
Mortgage, Deed of Trust, Sale and Lease-Back
Financing; Rights of Holders
1.
19315]
No Encumbrances Except Mortgages, Deeds
of Trust, or Sale and Lease-Back for
Development
Mortgages, deeds of trust and sales and
leases-back are to be permitted before completion of the
construction of the improvements, but only for the purpose of
securing loans of funds to be used for financing the
acquisition of the Site, the construction of improvements on
the Site, and any other purposes necessary and appropriate in
connection with development under this Agreement, and only if
the instruments effecting such mortgages, deeds of trust and
sales and leases-back contain the provisions of Sections 319
and 320 of this Agreement. The Developer shall notify the
Agency in advance of any mortgage, deed of trust or sale and
lease-back financing, if the Developer proposes to enter into
the same before completion of the construction of the
improvements on the Site. The words "mortgage" and "trust
deed" as used hereinafter shall include sale and lease-back.
The Developer shall not enter into any such conveyance for
financing without the prior written approval of the Agency,
which approval the Agency agrees to give if any such conveyance
for financing is given to a bank, savings and loan association,
or other similar lending institution and such lender shall be
deemed approved unless rejected in writing by the Agency within
fifteen (15) days after written notice thereof is received by
the Agency. The form of approval by the Agency shall be a
writing which references this Section 315, executed by the
Executive Director of the Agency.
The Agency, by its Executive Director, agrees to
approve financing by a recognized commercial lender in an
amount reasonably determined to represent the Developer's cost
to construct the Developer Improvements so long as the loan
documents (i) contain the provisions of Section 318 and 319 of
this Agreement and (ii) provide that, in the event of
foreclosure by the lender (or acceptance of a deed in lieu of
foreclosure) the lender would take the Site free of this
Agreement (except for Section 318) but subject to the terms of
the Grant Deed (Attachment No.9) which do not terminate upon
recordation of the Certificate of Completion.
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2.
1~316J
Holder Not Obligated to Construct
Improvements
The holder of any mortgage or deed of trust
authorized by this Agreement shall not be obligated by the
provisions of this Agreement to construct or complete the
improvements or to guarantee such construction or completion;
nor shall any covenant or any other provision in the deed for
the Site be construed so to obligate such holder. Nothing in
this Agreement shall be deemed to construe, permit or authorize
any such holder to devote the Site to any uses or to construct
any improvements thereon, other than those uses or improvements
provided for or authorized by the Redevelopment Plan.
3.
19317J
Notice of Default to Mortgagee or Deed
of Trust Holders; Right to Cure
With respect to any mortgage or deed of trust
granted by Developer as provided herein, whenever the Agency
shall deliver any notice or demand to Developer with respect to
any breach or default by the Developer in completion of
construction of the improvements, the Agency shall at the same
time deliver to each holder of record of any mortgage or deed
of trust authorized by this Agreement a copy of such notice or
demand. Each such holder shall (insofar as the rights of the
Agency are concerned) have the right, at its option, within
thirty (30) days after the receipt of the notice, to cure or
remedy or commence to cure or remedy any such default and to
add the cost thereof to the mortgage debt and the lien of its
mortgage. Any such holder shall be entitled, upon compliance
with the requirements of Section 320 of this Agreement, to a
Certificate of Completion (as therein defined).
4.
19318J
Failure of Holder to Complete
Improvements
In any case where, thirty (30) days after default
by the Developer in completion of construction of improvements
under this Agreement, the holder of any mortgage or deed of
trust creating a lien or encumbrance upon the Site or any part
thereof has not elected to construct the Developer
Improvements, or if it has elected to construct the Developer
Improvements has not proceeded diligently with construction,
the Agency may purchase the mortgage or deed of trust by
payment to the holder of the amount of the unpaid mortgage or
deed of trust debt, including principal and interest and all
other sums secured by the mortgage or deed of trust.
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~P~9]
Right of the Agency to Satisfy Other Liens
on the Site After Title Passes
~or to the completion of construction of the
~rovements, and after the Developer has had written
has failed after a reasonable time, but in any event
fifteen (15) days, to challenge, cure, adequately
# or satisfy any liens or encumbrances on the Site
t otherwise permitted under this Agreement, the
have the right but no obligation to satisfy any
or encumbrances.
~~. l!l320]
Certificate of Completion
~ Executive Director of the Agency, without further
the City or the Agency and as a ministerial act
shall execute, and deliver the Certificate of
and Release in the form attached hereto as
Bo. S after final inspection of the Developer
SUch Certificate of Completion shall be a
,determination of satisfactory completion of the
i~on required by this Agreement upon the Site and the
:~ of Completion shall so state.. The Agency may also
.~~ Developer with a Certificate of Completion for
~~~~ the 1mprovements upon the Site as they are properly
~~aDd ready to use if the Developer is not in default
1J~ Aqreement. After r~cordation of such Certif~cate of
..~ any party then ownlng or thereafter purchaslng,
;I~~l~ otherwise ac~iring any interest therein.s~a~l not
.. l-ctf s~ch ~wnershl~, ~u:chase, leas~ or acqulsl tlon),
~. ebl19&tlon or llablllty under thlS Agreement except
. .... party ahall be bound by any covenants contained in
~~'Deed, which by their terms survive recordation of the
~ of Completion.
. Certificate of Completion of construction for the
~~vement and development of the Site shall be in such
,.. ... __ permi tit to be recorded in the Recorder's Office of
SIa ~ino County.
If the Agency refuses or fails to furnish a
~ti~te of Completion for the Site, or part thereof, after
-t~ ~est from the Developer, the Agency shall, within
~ tv ()O) days of written request therefor, provide the
l' ~ r vi th a written statement of the reasons the Agency
Ie~::-~ failed to furnish a Certificate of Completion. The
~ ~.nt ahall also contain Agency's opinion of the actions
· at t~e peveloper must take to obtain a Certificate of
lba let1on. If the reason for such refusal is confined to the
~dilte availapility of specific items of materials for
t:::SClpin;, the Agency will issue its Certificate of
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Completion upon the posting of a bond by the Developer with the
Agency in an amount representing a fair value of the work not
yet completed. If the Agency shall have failed to provide such
written statement within said thirty (30) day period. the
Developer shall be deemed entitled to the Certificate of
Completion.
Such Certificate of Completion shall not constitute
evidence of compliance with or satisfaction of any obligation
of the Developer to any holder of any mortgage, or any insurer
of a mortgage securing money loaned to finance the
improvements, or any part thereof. Such Certificate of
Completion is not a notice of completion as referred to in the
California Civil Code, Section 3093.
II!.
A.
r~400J
r~40lJ
USE OF THE SITE
Uses
The Developer covenants and agrees for itself, its
successors, its assigns, and every successor in interest to the
Site or any part thereof, that during construction and
thereafter, the Developer and such successors and such
assignees, shall devote the Site to the uses specified in the
Redevelopment Plan as may be amended from time to time for the
periods of time specified therein. The Developer further
covenants and warrants that the Developer shall develop on the
Site a multistory commercial and professional office complex
consisting of not less than One Hundred and Fifty-Five Thousand
(155,000) square feet gross leaseable area. The Developer
covenants to develop on the Site in conformity with all
applicable laws. The foregoing covenants shall run with the
land as provided in the Grant Deed. Developer and its
successors-in-interest shall be liable for compliance with the
foregoing, only so long as they own the Site or any portion
thereof.
The Developer covenants by and for itself and any
successors in interest that there shall be no discrimination
against or segregation of any person or group of persons on
account of race, color, creed, religion, sex, marital status,
age, handicap, national origin or ancestry in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the
Site, nor shall the Developer itself or any person claiming
under or through it establish or permit any such practice or
practices of discrimination or segregation with reference to
the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees of the Site. The
foregoing covenants shall run with the land. Developer and its
successors-in-interest shall be liable for compliance with the
foregoing, only so long as they own the Site or any portion
thereof.
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The Developer shall refrain from restricting the
rental, sale or lease of the Site on the basis of race, color,
creed, religion, sex, marital status, handicap, national origin
or ancestry of any person. All such deeds, leases or contracts
shall contain or be subject to substantially the following
nondiscrimination or non-segregation clauses:
1. In deeds: "The grantee herein covenants by and
for himself or herself, his or her heirs,
executors, administrators and assigns, and all
persons claiming under or through them, that
there shall be no discrimination against or
segregation of, any person or group of persons on
account of race, color, creed, religion, sex,
marital status, age, handicap, national origin or
ancestry in the sale, lease, sublease, transfer,
use, occupancy, tenure or enjoyment of the land
herein conveyed, nor shall the grantee himself or
herself or any person claiming under or through
him or her, establish or permit any such practice
or practices of discrimination or segregation
with reference to the selection, location,
number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the land
herein conveyed. The foregoing covenants shall
run with the land."
2. In leases: "The less~e herein covenants by and
for himself or herself, his or her heirs,
executors, administrators and assigns, and all
persons claiming under or through him or her, and
this lease is made and accepted upon and subject
to the following conditions:
"There shall be no discrimination against or
segregation of any person or group of persons on
account of race, color, creed, religion, sex,
marital status, handicap, age, ancestry or
national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment
of the premises herein leased nor shall the
lessee himself or herself, or any person claiming
under or through him or her, establish or permit
any such practice or practices of discrimination
or segregation with reference to the selection,
location, number, use or occupancy of tenants,
lessees, sublessees, subtenants or vendees in the
premises herein leased."
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3. In contracts: "There shall be no discrimination
against or segregation of, any person, or group
of persons on account of race, color, creed,
religion, sex, marital status, age, handicap,
ancestry or national origin, in the sale, lease,
sublease, transfer, use, occupancy, tenure or
enjoyment of the premises, nor shall the
transferee himself or herself or any person
claiming under or through him or her, establish
or permit any such practice or practices of
discrimination or segregation with reference to
the selection, location, number, use or occupancy
of tenants, lessees, subtenants, sublessees or
vendees of the premises."
B.
[~402]
Rights of Access
The Agency, for itself and for the City and other
public agencies, at their sole risk and expense, reserves
during the term of this Agreement the right to enter the Site
or any part thereof at all reasonable times for the purpose of
construction, reconstruction, main~enance, repair or service of
any public improvements or public facilities located on the
Site. Any such entry shall be made only after reasonable
notice to the Developer, and Agency shall indemnify and hold
the Developer harmless from any costs, claims, damages or
liabilities pertaining to any entry. This Section 403 shall
not be deemed to diminish or limit any rights which the City or
the Agency may have by operation of law irrespective of this
Agreement.
C.
r~403]
Effect of Violation of the Terms and
Provisions of this Agreement After
Completion of Construction
The covenants established in this Agreement and the
deeds shall, without regard to technical classification and
designation, be binding for the benefit and in favor of the
Agency, its successors and assigns, as to those covenants which
are for its benefit. The covenants contained in this Agreement
shall remain in effect until the issuance of a Certificate of
Completion for all of the Developer Improvements except for the
folloWing:
( i )
the covenants pertaining to use of the Site
as set forth in Section 401 (but not
including nondiscrimination) shall remain in
effect until the termination of the
Redevelopment Plan;
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(ii) the covenants against discrimination as set
forth in Section 401 shall remain in
perpetuity.
Covenants contained in documents recorded pursuant to
this Agreement shall remain in effect as therein set forth.
The Agency is deemed the beneficiary of the terms and
provisions of this Agreement and of the covenants running with
the land, for and in its own rights and for the purposes of
protecting the interests of the community and other parties,
public or private, in whose favor and for whose benefit this
Agreement and the covenants running with the land have been
provided. The Agreement and the covenants shall run in favor
of the Agency, without regard to whether the Agency has been,
remains or is an owner of any land or interest therein in the
Site or in the Project Area. The Agency shall have the right,
if the Agreement or covenants are breached, to exercise all
rights and remedies, and to maintain any actions or suits at
law or in equity or other proper proceedings to enforce the
curing of such breaches to which it or any other beneficiaries
of this Agreement and covenants may be entitled.
v.
A.
I~500J
[~501J
GENERAL PROVISIONS
Notices, Demands and Communications Among
the Parties
Written notices, demands and communications between
the Agency and the Developer shall be sufficiently given if
delivered by hand (and a receipt therefor is obtained or is
refused to be given) or dispatched by registered or certified
mail, postage prepaid, return receipt requested, to the
principal offices of the Agency, and the Developer. Such
written notices, demands and communications may be sent in the
same manner to such other addresses as such party may from time
to time deSignate by mail as provided in this Section 401.
'Any written notice, demand or communication shall be
deemed received immediately if delivered by hand and shall be
deemed received on the tenth day from the date it is postmark~d
if delivered by registered or certified mail.
B.
[~502J
Conflicts of Interest; Nonliability
No member, official or employee of the Agency shall
have any personal interest, direct or indirect, in this
Agreement, nor shall any member, official or employee
participate in any decision relating to the Agreement which
affects his personal interests or the interests of any
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corporation, partnership or association in which he is directly
or indirectly interested. No member, official or employee of
the Agency shall be personally liable to the Developer or any
successor in interest, in the event of any default or breach by
the Agency or for any amount which may become due to the
Developer or successor or on any obligations under the terms of
this Agreement.
The Developer represents and warrants that, except for
the Purchase Price, it has not paid or given, and shall not pay
or give, any third party any money or other consideration for
obtaining this Agreement.
C.
fiS03]
Enforced Delay; Extension of Times of
Performance
(
In addition to specific provisions of this Agreement,
performance by either party hereunder shall not be deemed to be
in default, and all performance and other dates specified in
this Agreement shall be extended, where delays or defaults are
due to: war; insurrection; strikes; lockouts; riots; floods;
earthquakes; fires; casualties; acts of God; acts of the public
enemy; epidemics; quarantine restrictions; freight embargoes;
lack of transportation; governmental restrictions or priority;
litigation; unusually severe weather; acts or omissions of
another party; acts or failures to act of the City of San
Bernardino or any other public or governmental Agency or entity
(other than the acts or failures to act of the Agency which
shall not excuse performance by the Agency); or any other
causes beyond the control or without the fault of the party
claiming an extension of time to perform. Notwithstanding
anything to the contrary in this Agreement, an extension of
time for any such cause shall be for the period of the enforced
delay and shall commence to run from the time of the
commencement of the cause, if notice by the party claiming such
extension is sent to the other party within thirty (30) days of
the commencement of the cause. Times of performance under this
Agreement may also be extended in writing by the mutual
agreement of Agency and Developer.
The Developer is not entitled pursuant to this Section
403 to an extension of time to perform because of past,
present, or future difficulty in obtaining suitable temporary
or permanent financing for the acquisition or development of
the Site.
D.
riS04]
Inspection of Books and Records
The Agency has the right at all reasonable times to
inspect the books and records of the Developer pertaining to
the Site for the purposes of this Agreement. Any such persons
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examining the books and records of the Developer on behalf of
the Agency shall first be identified in writing by the Agency.
The Developer has the right at all reasonable times to inspect
the public records of the Agency pertaining to the Site as
pertinent to the purposes of the Agreement.
VI.
A.
[i600J
[~601]
DEFAULTS AND REMEDIES
Defaults -- General
Subject to the extensions of time set forth in
Section 503, failure or delay by any party to perform any term
or provision of this Agreement constitutes a default under this
Agreement. The party who so fails or delays must immediately
commence to cure, correct, or remedy such failure or delay, and
shall complete such cure, correction or remedy with diligence.
The injured party shall give written notice of default
to the party in default, specifying the default complained of
by the injured party. Except as required to protect against
further damages, and except for Sections 317 and 319 of this
Agreement, the injured party may not institute proceedings
against the party in default until thirty (30) days after
giving such notice. Failure or delay in giving such notice
shall not constitute a waiver of any default, nor shall it
change the time of default.
B.
1~602]
Legal Actions
1.
li603]
Institution of Legal Actions
In addition to any other rights or remedies and
subject to the restrictions in Section 601, the Agency or the
Developer may institute legal action to cure, correct or remedy
any default, to recover damages for any default, or to obtain
any other remedy consistent with the purpose of this
Agreement. Any legal actions initiated pursuant to this
Agreement or otherwise with respect to its subject matter must
be instituted in the Superior Court of the County of San
Bernardino, State of California, in an appropriate municipal
court in that county, or in the Federal District Court in the
Central District of California.
2.
1~604]
Applicable Law
The laws of the State of California shall govern
the interpretation and enforcement of this Agreement.
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3.
(9605]
Acceptance of Service of Process
In the event that any legal action is commenced
by the Developer against the Agency, service of process on the
Agency shall be made by personal service upon the Executive
Director or in such other manner as may be provided by law.
In the event that any legal action is commenced
by any party against the Developer or in such other manner as
may be provided by law, service of process on such party shall
be made by personal service upon the Developer, and shall be
valid whether made within or without the State of California.
C.
19606]
Rights and Remedies Are Cumulative
Except as otherwise expressly stated in this
Agreement, the rights and remedies of the parties are
cumulative, and the exercise by any party of one or more of
such rights or remedies shall not preclude the exercise by it,
at the same or different times, of any other rights or remedies
for the same default or any other default by any other party.
D.
[9607]
Inaction Not a Waiver of Default
(
I
I
Any failures or delays by any party in asserting any
of its rights and remedies as to any default shall not operate
as a waiver of any default or of any such rights or remedies,
or deprive any party of its right to institute and maintain any
actions or proceedings which it may deem necessary to protect,
assert or enforce any such rights or remedies.
E.
(~608]
Remedies and Rights of Termination Prior
to Conveyance
1 .
1~609]
Damages Prior to Conveyance
If any party defaults with regard to any of the
provisions of this Agreement, the non-defaulting party shall
serve written notice of such default upon the other parties.
If the default is not cured or commenced to be cured by the
defaulting party within thirty (30) days after service of the
notice of default (or within such other period as is set forth
herein), the defaulting party shall be liable to the other
party or parties for any damages caused by such default.
2.
(9610]
Specific Performance
If any party defaults under any of the provisions of
this Agreement, a non-defaulting party shall serve written
notice of such default upon the defaulting party (with a copy
to the other party). If the default is not cured by the
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defaulting party within thirty (30) days of service of the
notice of default, or such other time limit as may be set forth
herein with respect to such default, any non-defaulting party
at its option may thereafter (but not before) commence an
action for specific performance of terms of this Agreement.
3.
r~611]
Termination by the Developer
In the event that:
(a) the Conditions Precedent are not satisfied
by the time established therefor in the Schedule of Performance
(Attachment No.3), and such failure is not caused or
contributed to by the Developer; or
(b) the Agency does not tender conveyance of the
Site or possession thereof, in the manner and condition, and by
the date provided in this Agreement, and any such failure shall
not be cured within thirty (30) days after the date of written
demand therefor by the Developer;
then this Agreement may, at the option of the Developer, be
terminated by written notice thereof to the Agency. Upon such
termination, neither the Agency nor the Developer shall have
any further rights against or liability to the other with
respect to the Site. In the event of the failure or default by
the Agency with respect to any event set forth in Section
611(a) or 611(b) above, said right of termination provided in
Section 611 shall be Developer's sole and exclusive remedy with
respect to the Agency. Upon termination of this Agreement, all
monies or documents deposited by any party into escrow shall be
returned to the party making such deposit.
5.
(~612)
Termination by the Agency
In the event that prior to the Conveyance:
(a) The Developer (or any successor in interest)
assigns or attempts to assign the Agreement or any rights
therein or in the Site in violation of this Agreement; or
(b) There is a change in the ownership of the
Developer contrary to the provisions of Section 107 hereof; or
(c) The Developer does not submit certificates
of insurance, construction plans, drawings and related
documents as required by this Agreement, in the manner and by
the dates respectively provided in this Agreement therefor any
such default or failure shall not be cured within thirty (30)
days after the date of written demand therefor by the Agency; or
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(d) Any Conditions Precedent are not satisfied
by the time established therefor in the Schedule of Performance
(Attachment No.3);
then this Agreement may at the option of the Agency, be
terminated by the Agency by written notice thereof to the
Developer. Upon such termination, neither the Agency nor the
Developer shall have any further rights against or liability to
the other. Upon termination of this Agreement, all monies or
documents deposited by any party into escrow shall be returned
to the party making such deposit.
F.
[~614]
Remedies of the Agency and the Developer
for Default After Passage of Title and Prior
to Completion of Construction
1 .
[~615]
Damages
After the Conveyance and prior to the recordation
of a Certificate of Completion with respect to all of the
Developer Improvements, if either the Developer or the Agency
defaults with regard to any of the provisions of this
Agreement, the non-defaulting party shall serve written notice
of such default upon the defaulting party with a copy to the
remaining party. If the default is not cured by the defaulting
party within thirty (30) days after service of the notice of
default, the defaulting party shall be liable to the other for
any damages caused by such default.
2.
[~616]
Action for Specific Performance
If either the Developer or the Agency defaults
under any of the provisions of this Agreement after the
conveyance of title and prior to the recordation of a
Certificate of Completion for the improvements and development
to be made thereon, the non-defaulting party shall serve
written notice of such default upon the defaulting party with a
copy to the remaining party. If the default is not commenced
to be cured by the defaulting party within thirty (30) days
after service of the notice of default, the non-defaulting
party at its option may institute an action for specific
performance of the terms of this Agreement.
3.
[~617]
Reentry and Revesting of Title in the .
Agency
The Agency has the additional right, at its option, to
reenter and take possession of the Site, with all improvements
thereon, and terminate and revest in the Agency the estate
conveyed to the Developer if after conveyance of title and
prior to the issuance of the Certificate of Completion pursuant
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to Section 320, the Developer (or its successors in interest)
shall:
1. Fail, within ninety (90) days after the date of
recordation of the Grant Deed (Attachment No.9),
to commence construction on the Site of the
Developer Improvements in conformity with plans
and specifications which are approved in the
manner required by this Agreement; or
2. Abandon or sUbstantially suspend construction of
the Developer Improvements for a period of
forty-five (45) days after written notice thereof
from the Agency; or
3. Fail to complete construction of the Developer
Improvements to the condition required for the
issuance of a Certificate of Completion pursuant
to Section 320 within three hundred sixty (360)
days after the date of commencement of
construction; or
4. Transfer or suffer any involuntary transfer of
the Site in violation of this Agreement.
(
All time periods stated in this Article 3, Paragraphs
1 and 2 above and elsewhere in this Agreement are subject to
extension by force majeure as more particularly provided in
Section 503 above.
Such right to reenter, terminate and revest shall be
subject to and be limited by and shall not defeat, render
invalid or limit:
1. Any mortgage or deed of trust permitted by this
Agreement; or
2. Any rights or interests provided in this
Agreement for the protection of the holders of
such mortgages or deed of trust.
Upon the revesting in the Agency of title to the Site
as provided in this Section 617, the Agency shall, pursuant t~
its responsibilities under state law, use its best efforts to'
resell the Site as soon and in such manner as the Agency shall
find feasible and consistent with the objectives of such law
and of the Redevelopment Plan, as it may be amended, to a
qualified and responsible party or parties (as determined by
the Agency) who will assume the obligation or making or
completing the improvements, or such other improvements in
their stead as shall be satisfactory to the Agency and in
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accordance with the uses specified for such Site or part
thereof in the Redevelopment Plan. Upon such resale of the
Site, the proceeds thereof shall be applied:
1. First, to satisfy the loan of the construction
lender, then to reimburse the Agency, on its own
behalf or on behalf of the City, for all costs
and expenses incurred by the Agency including,
but not limited to, any expenditures by the
Agency or the City in connection with the
recapture, management and resale of the Site or
part thereof (but less any income derived by the
Agency from the Site or part thereof in
connection with such management); all taxes,
assessments and water or sewer charges with
respect to the Site or part thereof which the
Developer has not paid (or, in the event the Site
is exempt from taxation or assessment or such
charges during the period of ownership thereof by
the Agency, an amount, if paid, equal to such
taxes, assessments, or charges as would have been
payable if the Site were not so exempt); any
payments made or necessary to be made to
discharge any encumbrances or liens existing on
the Site or part thereof at the time of revesting
of title thereto in the Agency, or to discharge
or prevent from attaching or being made any
subsequent encumbrances or liens due to
obligations, defaults or acts of the Developer,
its successors or transferees; any expenditures
made or obligations incurred with respect to the
making or completion of the improvements or any
part thereof on the Site, or part thereof; and
any amounts otherwise owing the Agency, the
Developer and their successors or transferees; and
2. Second, to reimburse the Developer or their
successor or transferee (if applicable), up to
the amount equal to the sum of (a) the cost
incurred for the acquisition and development of
the Site and for the improvements existing on the
Site at the time of the entry and repossession,
less (b) any gains or income withdrawn or made by
the Developer from the Site or the improvements
thereon.
Any balance remaining after such reimbursements shall
be retained by the Agency as its property.
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The rights established in this Section 617 are to be
interpreted in light of the fact that the Site was conveyed to
the Developer for development, and not for speculation in
undeveloped land.
VII.
A.
[5700]
(5701)
SPECIAL PROVISIONS
Submission of Documents to the Agency for
Approval.
Whenever this Agreement requires the Developer to
submit plans, drawings or other documents to the Agency for
approval, which shall be deemed approved if not acted on by the
Agency within the specified time, said plans, drawings or other
documents shall be accompanied by a letter stating that they
are being submitted and will be deemed approved unless rejected
by the Agency within the stated time. If there is not time
specified herein for such Agency action, the Developer may
submit a letter requiring Agency approval or rejection of
documents within thirty (30) days after submission to the
Agency or such documents shall be deemed approved.
B.
[5702]
Successors In Interest
The terms, covenants, conditions and restrictions of
this Agreement shall extend to and shall be binding upon and
inure to the benefit of the heirs, executors, administrators,
successors and assigns of the Developer.
VIII.
[5800]
ENTIRE AGREEMENT, WAIVERS
This Agreement is executed in five (5) duplicate originals,
each of which is deemed to be an original. This Agreement
includes pages 1 through 33 and Attachments 1 through 9, which
constitutes the entire understanding and agreement of the
parties.
No private entity shall be deemed to be a third party
beneficiary with respect to any provisions of this Agreement.
This Agreement integrates all of the terms and conditions
mentioned herein or incidental hereto, and supersedes all
negotiations or previous agreements among the parties or their
predecessors in interest with respect to all or any part of the
subject matter hereof.
All waivers of the provisions of this Agreement must be in
writing by the appropriate authorities of the Agency and the
Developer, and all amendments hereto must be in writing by the
appropriate authorities of the Agency and the Developer.
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-28-
Each individual signing below represents and warrants that
he has the authority to execute this Agreement on behalf of and
bind the party he purports to represent.
IX.
(~900]
TIME FOR ACCEPTANCE OF AGREEMENT BY AGENCY
This Agreement, when executed by the Developer and
delivered to the Agency, must be authorized, executed and
delivered by the Agency on or before thirty (30) days after
signing and delivery of this Agreement by the Developer or this
Agreement shall be void, except to the extent that the
Developer shall consent in writing to a further extension of
time for the authorization, execution and delivery of this
Agreement. The date of this Agreement shall be the date when
it shall have been signed by the Agency.
IN WITNESS WHEREOF, the Agency, the Developer have
signed this Agreement on the respective dates set forth below.
"Agency"
REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO
'(
By:
Executive Director
ATTEST:
Secre'tary
APPROVED AS TO PROGRAM:
By:
APPROVED AS TO FORM AND LEGAL CONTENT:
S'tradling, Yocca, Carlson & Rauth,
Special Counsel to the Agency
~the Agency
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-29-
Dated:
Dated:
\,
I
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"Developer"
ONE SUNSET COURT, LTD., a
California limited partnership
By:
Mervyn Simchowitz, an
individual General Partner
THE SIMCHOWITZ CORPORATION, a
California corporation, General
Partner
By:
Its:
-30-
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF SAN BERNARDINO
On this day of I in the
year , before me, the undersigned, a Notary Public in and
for the State of California, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person
who executed this instrument as the Executive Director of the
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO and
acknowledged to me said Agency executed it.
Signature of Notary Public
(
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STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF SAN BERNARDINO
On this day of , in the
year , before me, the undersigned, a Notary Public in and
for the State of California, personally known to me (or proved
to me on the basis of satisfactory evidence) to be MERVYN
SIMCHOWITZ the person who executed this instrument as the
General Partner of ONE SUNSET COURT, LTD., a California limited
partnership.
Signature of Notary Public
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STATE OF CALIFO~_~
)
) ss.
)
COUNTY OF SAN BERNARDINO
On this day of , in the
year , before me, the undersigned, a Notary Public in and
for the State of California, personally known to me (or proved
to me on the basis of satisfactory evidence) to be MERVYN
SIMCHOWITZ, president of THE SIMCHOWITZ CORPORATION, a
California corporation, who executed this instrument as a
General Partner of ONE SUNSET COURT, LTD. and acknowledged that
the Board of said corporation approved the execution.
Signature of Notary Public
,"
I
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Court
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,
ATTACHMENT NO. 1
PARCEL A:
ALL THAT PORTION OF PARCELS 22 AND 25 OF PARCEL MAP NO. 688. AS PER MAP RECORDED IN
PARCEL MAP BOOK 25. PAGES 47 THROUGH 58. INCLUSIVE. RECORDS OF SAN BERNARDINO COUNTY.
CALIFORNIA. MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 22; THENCE NORTH 0 DEGREES 04
MINUTES 11 SECONDS EAST. ALONG THE WEST LINE OF SAID PARCEL 22. AND DISTANCE OF
210.00 FEET TO THE NORTHWEST CORNER THEREOF; THENCE SOUTH B9 DEGREES 55 MINUTES 49
SECONDS EAST. ALONG THE NORTH LINE OF SAID PARCEL 22. A DISTANCE OF 223.50 FEET TO
THE NORTHEAST CORNER OF SAID PARCEL 22. BEING ALSO THE NORTHWEST CORNER OF PARCEL 23
OF SAID PARCEL MAP NO. 688; THENCE SOUTH 0 DEGREES 04 MINUTES 11 SECONDS WEST. ALONG
THE WEST LINE OF SAID PARCEL 23. A DISTANCE OF 210.00 FEET TO THE SOUTHWEST CORNER OF
SAID PARCEL 23; THENCE NORTH B9 DEGREES 55 MINUTES 49 SECONDS WEST 223.50 FEET TO THE
POINT OF BEGINNING.
AS CREATED BY THAT CERTAIN CERTIFICATE OF COMPLIANCE. LOT LINE ADJUSTMCNT NO. 88-25
RECORDED NOVEMBER 1. 1988 AS INSTRUMENT NO. 88-368872 OF OFFICIAL RECORDS.
PARCEL B:
PARCEL NO. 21 OF PARCEL MAP NO. 688. COUNTY OF SAN BERNARDINO. STATE OF CALIFORNIA.
AS PER MAP RECORDED IN BOOK 25. PAGE(S) 47 OF PARCEL MAPS. IN THE OFFICE OF THE
COUNTY RECORDER OF SAID COUNTY.
A TT ACHMENT NO.2
ATTACHMENT NO. 2
LEGAL DESCR!PT!ON
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ATTACHMENT NO. 2
CDtI.Ia' a ... ~
JIJtO.rBc1'
DaV5lD1WBIIT .CR KIlIIJJ.B
City Council Approval
Design Review Application
(60 Day Approval Process)
Work Drawing Phase
Submit Full Working Drawinqs to
BUilding , Safety
(60 Day Plan Check Process)
Start of Construction
(24 month Construction Phase)
Notice of Completion of Project
ATTACHMENT NO.3
September 18, 1989
November 18, 1989
Six Months
May 18, 1990
July 18, 1990
July 18, 1992
ATTACHMENT NO. 4
SCOPE OF DEVELOPMENT
I. GENERAL DESCRIPTION
The Site is specifically delineated on the Site Map
(Attachment NO.1) and the Legal Description (Attachment NO.2)
pursuant to Section 103 of this Agreement.
II. DEVELOPMENT
The Developer shall develop the Site with commercial
and professional office buildings of not less than One Hundred
and Fifty-Five Thousand (155,000) square feet of gross leasable
area, suitable for operation of professional offices and
support commercial facilities. All such space shall consist of
bUildings approved for occupancy, fully enclosed and under
roof, unless the Agency hereafter allows deviation from such
requirement in a writing referencing this Scope of Development
(Attachment No.4). Such buildings shall be constructed of
masonry, concrete, concrete block, or such other materials as
may hereafter be approved by the Agency; prefabricated metal
components shall not be utilized on exterior walls.
The Developer shall complete all of the improvements
set forth in this Scope of Development (Attachment NO.4) to be
constructed on the Site in one phase. All of the improvements
to be provided by the Developer on the Site constitute the
"Basic Developer Improvements." The Basic Developer
Improvements and all those off-site improvements, which are
required in connection with this development, and which are
required to be provided by the Developer (the "Off-Site
Improvements") together constitute the "Developer Improvements".
The Developer shall commence and complete the
Developer Improvements by the respective times established
therefor in the Schedule of Performance (Attachment No.3).
The Developer shall provide parking on the Site in
conformity with all applicable City requirements.
The design and configuration of the parking facilities
shall be compatible with adjacent and nearby uses, as
reasonably determined by the Agency.
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ATTACHMENT NO. 4
Page 1 of 3
III. DEVELOPMENT STANDARDS
The following development standards shall apply to the
Developer Improvements unless otherwise expressly authorized by
variances approved by the City:
A. Building Setbacks. Minimum building setbacks for
buildings and parking areas shall conform to the San Bernardino
City Code (the "City Code").
B. Building Coverage. The amount of land within the Site
covered by buildings shall conform to the City Code.
C. Building Height. Building hieght shall be subject to
Agency and City approval.
D. Vehicular Access. The placement of vehicular
driveways shall be coordinated with the needs of proper street
traffic flow. In the interest of minimizing traffic
congestion, the Agency will control the number and location of
curb breaks for access to the Site for off-street parking and
truck loading.
E. Loading. Adequate loading and unloading space shall
be provided. Loading spaces visible from streets shall be .
landscaped or screened to prevent an unsightly or barren
appearance. Said requirements shall also conform to the City
Code.
F. Signs. Signs shall be limited in size, subdued and
otherwise designed to contribute positively to the
environment. Signs identifying the building use will be
permitted, but their height, size, location, color, lighting
and design will be subject to Agency and City approval.
G. Screening. All outdoor storage of materials or
equipment shall be enclosed or screened to the extent and in
the manner required by the Agency and the City.
H. Landscaping. The Developer shall provide and maintain
landscaping within the public rights-of-way and within setback
area along all street frontages and conforming with the Design
Concept Drawings as approved by the Agency.
Landscaping shall consist of trees, shrubs and
installation of an automatic irrigation system adequate to
maintain such plant material. The type and size of trees to be
planted, together with a landscaping plan, shall be subject to
approval by the City's Planning Department prior to planting.
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ATTACHMENT NO. 4
Page 2 of 3
I. Utilities. All utilities on the Site shall be
underground or enclosed at Developer's expense except as may be
otherwise specified in the City's conditions of approval of the
Developer Improvements.
J. Painting. All exterior walls shall be painted by the
Developer with color(s) subject to approval by the City's
Planning Department.
K. Building Design. Buildings shall be constructed such
that the Developer Improvements be of high architectural
quality, and shall be effectively and aesthetically designed.
IV. PUBLIC IMPROVEMENTS AND UTILITIES
The Developer, at its own cost and expense, shall
provide or cause to be provided all public improvements which
are specified in the City's conditions of approval to
Developer's development of the Developer Improvements.
Those of the improvements required to be provided pursuant to
this part IV of the Scope of Development (Attachment No.4)
constitute the "Off-Site Improvements."
v.
DEMOLITION AND SOILS
As between the Agency and the Developer, only, the
Developer assumes all responsibility for surface and subsurface
conditions at the Site, and the suitability of the Site for the
Developer Improvements and the operation of commercial
facilities thereon. If the surface and subsurface conditions
are not entirely suitable for such development and use, the
Developer shall at its cost take all actions necessary to
render the Site entirely suitable for such development. The
Developer has undertaken all investigation of the Site it has
deemed necessary and has not received or relied upon any
representations of the Agency, the City, or their respective
officers, agents and employees. Except as herein provided, the
Developer shall undertake at its cost all demolition required
in connection with the development of the Developer
Improvements.
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ATTACHMENT NO. 4
Page 3 of 3
ATTACHMENT NO. 5
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
)
)
)
)
)
)
)
)
)
[Space above for Recorder.]
CERTIFICATE OF COMPLETION
WHEREAS, by Grant Deed dated and
recorded on as No. of
the official records of the County Recorder of the County of
San Bernardino, California (the "Grant Deed"), the
Redevelopment Agency of the City of San Bernardino, a public
body, corporate and politic, hereinafter referred to as
"Agency", reserved certain rights and imposed certain
restrictions affecting that certain real property situated in
the City of San Bernardino, California described on Exhibit "1"
attached hereto and made a part hereof (the "Site"); and
WHEREAS, pursuant to that certain Disposition and
Development Agreement entered into between the Agency, One
Sunset Court, Ltd., a California limited partnership, (the
"Developer") dated as of (the "DDA"), the
Developer and their authorized successors are entitled to the
issuance of a Certificate of Completion upon the completion of
those improvements required by the DDA to be developed by the
Developer (the "Developer Improvements") and other obligations
imposed by the DDA; and
WHEREAS, the Agency has conclusively determined that the
construction on the above described real property required by
the DDA has been satisfactorily completed; and
NOW THEREFORE,
1. The Agency does hereby certify that the construction
of the Developer Improvements has been fully and satisfactorily
performed and completed.
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ATTACHMENT NO. 5
Page 1 of 3
2. All other obligations imposed by the DDA have also
been fully and satisfactorily performed and the DDA is hereby
terminated, released and of no further force or effect by
reason thereof. Those covenants, conditions and restrictions,
in the Grant Deed which by their terms expire upon issuance of
a Certificate of Completion are hereby deemed to be expired and
of no further force and effect.
3. Nothing contained in this instrument shall modify in
any other way any other provisions of the Grant Deed.
IN WITNESS WHEREOF, the Agency has executed this
certificate this day of , 19__
REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO
By:
Executive Director
ATTEST:
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ATTACHMENT NO. 5
Page 2 of 3
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF SAN BERNARDINO
On this ____ day of , 19 before
me, the undersigned, a Notary Public in and for saia-state,
personally appeared
known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed this instrument as the
Executive Director of the Redevelopment Agency of the City of
San Bernardino and acknowledged to me that the Redevelopment
Agency of the City of San Bernardino executed it.
Signature of Notary Public
SEAL
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ATTACHMENT NO. 5
Page 3 of 3
EXHIBIT "1"
THE SITE
rTo Be Inserted]
ATTACHMENT NO. 6
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
AND MAIL TAX STATEMENTS TO:
)
)
)
)
)
)
)
)
)
(Space above for recorder.]
GRANT DEED
For a valuable consideration receipt of which is hereby
aCknowledged,
The SAN BERNARDINO REDEVELOPMENT AGENCY, a public body,
corporate and politic, of the State of California, herein
called "Grantor" acting to carry out the Redevelopment Plan,
herein called "Redevelopment Plan" for the San Bernardino
Redevelopment Project, herein called "Project", under the
Community Redevelopment Law of California, hereby grants to ONE
SUNSET COURT, LTD., a California limited partnership, herein
called "Grantee", the real property hereinafter referred to as
"Property", described in Exhibit "A" attached hereto and
incorporated herein, subject to the existing easements,
restrictions and covenants or record described there.
1. Said Property is conveyed in accordance with and
subject to the Redevelopment Plan which was approved and
adopted by Ordinance No. ___ of the Common Council of the City
of San Bernardino, as amended by Ordinances No. ___ and ___,
and a Disposition and Development Agreement entered into
between Grantor and Grantee dated (the
"DDA"), a copy of which is on file with the Grantor at its
offices as a public record and which is incorporated herein by
reference.
2. The Grantee hereby covenants and agrees, for itself
and its successors and assigns, that during construction and
thereafter, the Grantee shall not use the Property for other
than the uses specified in the Specific Plan, the Redevelopment
Plan and the DDA. No use other than a professional office
bUilding and associated commercial uses shall be allowed on the
Property without the prior written approval of the Agency
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ATTACHMENT NO. 6
Page 1 of 9
(which the Agency may grant or deny at its sole discretion).
The Grantee covenants: (i) to operate and occupy on the
Property a professional office bUilding for a period of ten
(10) years commencing with the issuance of a Certificate of
Completion pursuant to Section of the DDAi (ii) to refrain
from taking any action which may cause the Property to cease to
be a professional office bUilding with associated commercial
usesi and (iii) to operate uses on the Property in conformity
with all applicable federal, state and local laws.
3. The Property is conveyed to grantee at a purchase
price, herein called "Purchase Price", determined in accordance
with the uses permitted. Therefore, Grantee hereby covenants
and agrees for itself, its successors, its assigns, and every
successor in interest to the Property that the Grantee, such
successors and such assigns, shall develop, maintain, and use
the Property only as follows:
(a) Grantee shall develop the Property as required by
the DDA, and with parking conforming to the requirements of the
San Bernardino City Code.
(b) Grantee shall maintain the improvements on the
Property and shall keep the Property free from any accumulation
of debris or waste materials. Grantee shall also maintain the
required landscaping in a healthy condition.
If, at any time, Grantee fails to maintain the said
landscaping, and said condition is not corrected after
expiration of thirty (30) days from the date of written notice
from the Grantor, either the Grantor, or the City of San
Bernardino may perform the necessary maintenance and Grantee
shall pay such costs as are reasonably incurred for such
maintenance.
(c) Grantee shall only sell, transfer or convey the
Property as a whole and is not permitted to subdivide the
Property for the duration of the Redevelopment Plan without the
prior approval of the Grantor, or the City of San Bernardino if
the Agency is no longer in existence at the date of request for
approval.
4. Prior to recordation of a Certificate of Completion
issued by the Grantor for the improvements to be constructed on
the Property:
(a) The Grantee shall not make any sale, transfer,
conveyance, or assignment of the Property or any part thereof
or any interest therein, without the prior written consent of
the Grantor except as permitted by paragraph 5(b) of this Grant
Deed. In the event that the Grantee does sell, transfer,
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ATTACHMENT NO. 6
Page 2 of 9
convey, or assign any part of the Property, buildings, or
structures thereon prior to the recordation of a Certificate of
Completion, the Grantor shall be entitled to increase the
Purchase Price paid by the Grantee by the amount that the
consideration payable for such assignment or transfer is in
excess of the Purchase Price paid by the Grantee, plus the cost
of improvements, including carrying charges. The consideration
payable for the assignment or transfer, to the extent it is in
excess of the amount so authorized, shall belong and be paid to
the Grantor and until so paid the Grantor shall have a lien on
the Property and any part involved for such amount. This
prohibition shall not be deemed to prevent the granting of
easements or permits to facilitate the development of the
Property.
(b) The Grantee shall not place or suffer to be
placed on the Property any lien or encumbrance other than
mortgages, deeds of trust, or any other form of conveyance
required for financing of the acquisition of the Property, the
construction of improvements on the Property, and any other
expenditures necessary and appropriate to develop the
Property. The Grantee shall not enter into any such conveyance
for financing without prior written approval of Grantor. No
approval will be given for a conveyance of the property to
finance the construction or improvements on real property other
than the real property described in Exhibit A hereto.
5. Prior to recordation of any Certificate of Completion
issued by Grantor for the improvements to be constructed on the
Property:
(a) The Grantor shall have the right at its option to
reenter and take possession of the Property hereby conveyed
with all improvements thereon and to terminate and revest in
the Grantor the Property hereby conveyed to the Grantee if the
Grantee (or its successors in interest) shall:
(i)
Fail to commence the construction of the
improvements as required by paragraph 3(a)
of this Grant Deed for a period of 45 days
after written notice thereof from the
Grantor, provided that Grantee shall not
have obtained an extension or postponement
to which Grantee may be entitled; or
( i i )
Abandon or substantially suspend
construction of the improvements for a
period of 45 days after written notice
thereof from the Grantor, provided that
Grantee shall not have obtained an extension
or postponement to which Grantee may be
entitled; or
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ATTACHMENT NO. 6
Page 3 of 9
(iii)
Transfer, or suffer an involuntary transfer
of, the Property, or any part thereof in
violation of this Grant Deed.
(b) The right to reenter, repossess, terminate and
revest shall be subject to and be limited by and ahall not
defeat, render invalid, or limit:
(i) Any mortgage or deed of trust or other
security interest permitted by paragraph
4(b) of this Grant Deed; or
(ii) Any rights or interests provided for the
protection of the holders or such mortgages
or deed of trust or other security interests.
(c) The right to reenter, repossess, terminate and
revest with respect to the Property shall terminate when the
Certificate of Completion regarding the improvements to be
constructed under paragraph 3 on the Property has been recorded
by the Grantor.
(d) In the event title to the Property or any part
thereof is revested in the Grantor as provided in this
paragraph 5, the Grantor shall, pursuant to its
responsibilities under State law, use its best efforts to
resell the Property or any part thereof as soon and in such
manner as the Grantor shall find feasible and consistent with
the objectives of such law and of the Redevelopment Plan to a
qualified party or parties (as determined by the Grantor) who
will assume the obligation of making or completing the
improvements or such other improvements in their stead as shall
be satisfactory to the Grantor and in accordance with the uses
specified for such Property or part thereof in the
Redevelopment Plan. Upon such resale of the Property the
proceeds thereof shall be applied:
(i)
First, to reimburse the Grantor, on its
own behalf or on behalf of the City of
San Bernardino, for all costs and
expenses incurred by the Grantor,
including but not limited to, salaries
to personnel engaged in such action
(but excluding Grantor's general
overhead expense), in connection with
the recapture, management, and resale
of the Property or part thereof (but
less any income derived by the Grantor
from the Property or part thereof in
connection with such management); all
taxes, assessments, and water and sewer
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ATTACHMENT NO. 6
Page 4 of 9
(ii)
(iii)
charges with respect to the Property or
part thereof (or, in the event the
Property is exempt from taxation or
assessment or such charges during the
period of ownership thereof by the
Grantor), an amount, if paid, equal to
such taxes, assessments, or charges, as
determined by the County assessing
official, as would have been payable if
the Property were not so exempt; any
payments made or necessary to be made
to discharge any encumbrances or liens
existing on the Property or part
thereof at the time of revesting of
title thereto in the Grantor or to
discharge or prevent from attaching or
being made any subsequent encumbrances
or liens due to obligations, defaults,
or acts of the Grantee, its successors
or transferees; any expenditures made
or obligations incurred with respect to
the making or completion of the
improvements or any part thereof on the
Property or part thereof; and any
amounts otherwise owed to the Grantor
by the Grantee and its successor or
transferee; and
Second, to reimburse the Grantee, its
successor or transferee, up to the
amount equal to the sum of (1) the
Purchase Price paid to the Grantor by
the Grantee for the Property (or
allocable to the part thereof);
(2) the costs incurred for the
development of the Property and for
the improvements existing on the
Property at the time or reentry and
repossession, less (3) any gains or
income withdrawn or made by the Grantee
from the Property or the improvements
thereon.
Any balance remaining after such
reimbursements shall be retained by the
Grantor.
(e) To the extent that this right of reverted
involves a forfeiture, it must be strictly interpreted against
the Grantor, the party for whose benefit it is created. This
right is to be interpreted in light of the fact that the
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ATTACHMENT NO. 6
Page 5 of 9
Grantor hereby conveys the Property to the Grantee for
development and not for speculation in undeveloped land.
6. The Grantee agrees for itself and any successor
in interest not to discriminate upon the basis of race, color,
creed or national origin in the sale, lease, or rental or in
the use or occupancy of the Property hereby conveyed or any
part thereof. Grantee covenants by and for itself, its
successors, and assigns, and all persons claiming under or
through them that there shall be no discrimination against or
segregation of, any person or group of persons on account of
race, color, creed, national origin or ancestry in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment
of the Property, nor shall the Grantee itself or any person
claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy
of tenants, lessees, sub-tenants, sublessees, or vendees in the
Property. The foregoing covenants shall run with the land.
7. No violation or breach of the covenants,
conditions, restrictions, provisions or limitations contained
in this Grant Deed shall defeat or render invalid or in any way
impair the lien or charge of any mortgage or deed of trust or
security interest permitted by paragraph 4(b) of this Grant
Deed; provided, however, that any subsequent owner of the
Property shall be bound by such remaining covenants,
conditions, restrictions, limitations and provisions, whether
such owner's title was acquired by foreclosure, deed in lieu of
foreclosure, trustee's sale or otherwise.
8. All covenants contained in this Grant Deed shall
be covenants running with the land. The covenants contained in
paragraphs 4 and 5 and Grantee's obligation to develop the
improvements on the Property provided in paragraph 3(a) of this
Grant Deed shall terminate and shall become null and void upon
recordation of a Certificate of Completion issued by Grantor
for the Property. The obligation to use the Property in
conformity with the Redevelopment Plan shall terminate on
(the expiration date of the Redevelopment
Plan). Every covenant contained in this Grant Deed against
discrimination contained in paragraph 6 of this Grant Deed
shall remain in perpetuity.
9. All covenants without regard to technical
classification or designation shall be binding for the benefit
of the Grantor, and such covenants shall run in favor of the
Grantor for the entire period during which such covenants shall
be in force and effect, without regard to whether the Grantor
is or remains an owner of any land or interest therein to which
such covenants relate. The Grantor, in the event of any breach
08/08/89
5731n/2601jOO
ATTACHMENT NO. 6
Page 6 of 9
of any such covenants, shall have the right to exercise all the
rights and remedies and to maintain any actions at law or suits
in equity or other proper proceedings to enforce the curing of
such breach.
10. Both before and after recordation of a
Certificate of Completion, both Grantor, its successors and
assigns, and Grantee and the successors and assigns of Grantee
in and to all or any part of the fee title to the Property
shall have the right to consent and agree to changes in, or to
eliminate in whole or in part, any of the covenants, easements
or restrictions contained in this Grant Deed without the
consent of any tenant, lessee, easement holder, licenses,
mortgagee, trustee, beneficiary under a deed of trust or any
other person or entity having any interest less than a fee in
the Property. The covenants contained in this Grant Deed,
without regard to technical classification shall not benefit or
be enforceable by any owner of any other real property within
or outside the Project Area, or any person or entity having any
interest in any other such realty. Any amendments to the
Redevelopment Plan which change the uses or development
permitted on the Property, or otherwise change any of the
restrictions or controls that apply to the Property, shall
require the written consent of Grantee or the successors and
assigns of Grantee in and to all or any part of the fee title
to the Property, but any such amendment shall not require the
consent of any tenant, lessee, easement holder, licensee,
mortgagee, trustee, beneficiary under a deed of trust or any
other person or entity having any interest less than a fee in
the Property.
11. Except for paragraph 5, the covenants contained
in this Grant Deed shall be construed as covenants running with
the land and not as conditions which might result in forfeiture
of title.
IN WITNESS WHEREOF, the Grantor and Grantee have
caused this instrument to be executed on their behalf by their
respective officers hereunto duly authorized, this day
of , 1989.
SAN BERNARDINO REDEVELOPMENT AGENCY
By:
ATTEST:
Secretary
08/08/89
5731n/2601/00
ATTACHMENT NO. 6
Page 7 of 9
The Grantee agrees to be bound by the covenants set
forth above.
ONE SUNSET COURT, LTD., a
California corporation
By:
Its:
By:
Its:
08/08/89
5731n/2601/00
ATTACHMENT NO. 6
Page 8 of 9
STATE OF CALIFORNIA
)
) ss.
)
COUNTY OF RIVERSIDE
On this ____ day of I 19
before me, the undersigned, a Notary Public in and for said
State, personally
appeared , known to me
(or proved to me on the basis of satisfactory evidence) to be
the person who executed this instrument as
the (insert title of the
officer) of the San Bernardino Redevelopment Agency and
aCknowledged to me that the San Bernardino Redevelopment Agency
executed it.
Signature of Notary Public
Name typed or printed
08/08/89
5731n/2601/00
ATTACHMENT NO. 6
Page 9 of 9
08/08/89
5731n/2601/00
EXHIBIT "A"
-LEGAL DESCRIPTION OF THE PROPERTY
(To Be Inserted)
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Redevelopment Agency · City of San Bernardino
300 North "D" Street, Fourth Floor. San Bernardino, California 92418
(714) 384-5081 FAX (714) 888-9413
Pride ~
~~
Steven H. Dukett
Executive Director
October 13, 1989
TO: Chairman and Community Development Commissioners
fROM: James E. Robbins, Acting Executive Direc~~
SUBJECT: COURT & E - PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT
At approximately 2:30 P.M., Friday, October 13, 1989, Mr. Pat Hopkins of One
Sunset Court, Ltd. delivered an a copy of the above referenced document with
minor changes on page 5 and Attachments 1 and l-A. Copies of these pages are
attached for your information.
Attachments
09765
1(-3
* Developer an~ Agency hereby acknowledge that T;cor Title
Insurance Com~ y of California ("Ticor"), or c... affiliate,
is a limited partner of Developer and, notwithstanding such
fact, consent to Ticor acting as Escrow Agent.
~o
5. the Agency shall execute and deliver to the
Escrow Agent the Grant Deed (Attachment No.9).
The foregoing conditions numbered 1 to 5, inclusive,
as set forth in Section 202, shall collectively constitute the
"Conditions Precedent." All of the Conditions Precedent shall
be satisfied prior to the Disposition Conveyance.
E.
(1205]
Escrow
This Agreement constitutes the joint basic escrow
instructions of the Agency the Developer for the conveyance of
the Site by the Agency to the Developer (the "Conveyance").
The Agency and the Developer shall provide such additional
escro~ instructions as may be necessary, provided that such
instructions shall be consistent with this Agreement.
Ticor Title Insurance Company of California, or
.nother escrow holder mutually acceptable to the parties (the
"Escrow Agent") is hereby empowered to act under this
Aqreement, and the Escrow Agent shall carry out its duties as
Escrow Agent hereunder. * Escrow Agent shall open a separate
escrow to handle the delivery and recordation of documents
provided for under this Agreement~*
Upon delivery of the Crant Deed (Attachment No.6),
~he Escrow Agent shall cause to be recorded the Grant Deed
(Attachment No.6), when title can be vested in the Developer
in accordance with the terms and provisions of this Agreement.
The Developer shall accept conveyance of title and possession
of the Site by the time set forth in the Schedule of
Performance (Attachment No.3) subject to the satisfaction of
the Conditions Precedent. The Escrow Agent shall cause to be
paid any applicable transfer tax with funds provided by the
Agency.
The Developer and the Agency shall pay in escrow to
the Escrow Agent the follOWing fees, charges and costs with
respect to the Conveyance promptly after the Escrow Agent has
notified the Developer and the Agency of the amount of such
fees, charges and costs, but not earlier than ten (10) days
prior to the scheduled date for closing the Escrow:
a. The premium for the title insurance policy to be
paid by the Agency as set forth in Section 209 of this
Agreement;
b. Recording fees to be paid by Developer;
c. Notary fees (evenly divided between Agency and
Developer) ;
d. Any State, County or City documentary stamps
(Agency) i
08/02/89
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ATTACHMENT NO. I-A
Assessor's Mo,
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Redevelopment Agency · City of San Bernardino
300 North "D" Street, Fourth Floor. San Bernardino, California 92418
(714) 384-5081 FAX (714) 888-9413
Pride .!
~~
Steven H. Dukett
Executive Director
October 13, 1989
TO: Chairman and Community Development Commissioners
FROM: James E. Robbins, Acting Executive Direc~~
SUBJECT: COURT & E - PROPOSED DISPOSITION AND DEVELOPMENT AGREEMENT
At approximately 2:30 P.M., Friday, October 13, 1989, Mr. Pat Hopkins of One
Sunset Court, Ltd. delivered an a copy of the above referenced document with
minor changes on page 5 and Attachments 1 and 1-A. Copies of these pages are
attached for your information.
Attachments
0976S
'~-3
* Developer an~ Agency hereby acknowledge that T'~or Title
Insurance ComJ:. j of California (/ITicor"), or a. dffiliate,
is a limited partner of Developer and, notwithstanding such
fact, consent to Ticor acting as Escrow Agent.
~c
5. the Agency shall execute and deliver to the
Escrow Agent the Grant Deed (Attachment No.9).
The foregoing conditions numbered 1 to 5, inclusive,
as set forth in Section 202, shall collectively constitute the
"Conditions Precedent." All of the Conditions Precedent ahall
be satisfied prior to the Disposition Conveyance.
E.
( 1205 )
Escrow
This Agreement constitutes the joint basic escrow
instructions of the Agency the Developer for the conveyance of
the Site by the Agency to the Developer (the "Conveyance").
The Agency and the Developer shall provide such additional
escrow instructions as may be necessary, provided that such
instructions shall be consistent with this Agreement.
Ticor Title Insurance Company of California, or
.nother escrow holder mutually acceptable to the parties (the
"Escrow Agent") is hereby empowered to act under this
Agreement, and the Escrow Agent shall carry out its duties as
Escrow Agent hereunder. * Escrow Agent shall open a separate
escrow to handle the delivery and recordation of documents
prOVided for under this Agreement~*
Upon delivery of the Grant Deed (Attachment No.6),
~he Escrow Agent shall cause to be r~corded the Grant Deed
(Attachment No.6), when title can be vested in the Developer
in accordance with the terms and provisions of this Agreement.
The Developer shall accept conveyance of title and possession
of the Site by the time set forth in the Schedule of
Performance (Attachment No.3) subject to the satisfaction of
the Conditions Precedent. The Escrow Agent shall cause to be
paid any applicable transfer tax with funds provided by the
Agency.
The Developer and the Agency shall pay in escrow to
the Escrow Agent the follOWing fees, charges and costs with
respect to the Conveyance promptly after the Escrow Agent has
notified the Developer and the Agency of the amount of such
fees, charges and costs, but not earlier than ten (10) days
prior to the scheduled date for closing the Escrow:
a. The premium for the title insurance policy to be
paid by the Agency as set forth in Section 209 of this
Aqreement;
b. Recording fees to be paid by Developer;
c. Notary fees (evenly divided between Agency and
Developer) ;
d. Any State, County or City documentary stamps
(Agency) ;
08/02/89
5731n/2601/00 -5-
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ATTACHMENT NO. I-A
Assessor's Mo(
~" ''2tf c,.,...r
n '...,
Redevelopment Agency · City of San Bernardino
300 North "D" Street, Fourth Floor. San Bernardino, California 92418
(714) 384-5081 FAX (714) 888-9413
Pride -t
e'~
Steven H. Dukett
Executive Director
OCTOBER 10, 1989
AUTHORIZING THE ISSUANCE OF CERTAIN
COLLATERALIZED MORTGAGE BONDS
Synopsis of Previous Commission/Council/Committee Action:
08-21-89 Mayor and Common Council and Community Development Commission
approved the formation of the San Bernardino Joint Powers Financing
Authority.
08-21-89 Mayor and Common Council, Community Development Commission and Joint
Powers Authority approved certain financings.
09-18-89 Community Development Commission continued approval of final
documents to 09-25-89.
09-25-89 Community Development Commission approved final documents.
Recommended Motion:
(MAYOR AND COMMON COUNCIL)
a) RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE OF CERTAIN
COLLATERALIZED MORTGAGE BONDS, SERIES 1989-B OF THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO.
(Continued on Page 2)
Respectfully Submitted,
Director
Supporting data attached: Yes
Ward : All
Funding requirements: N/A
Project: All
Commission Notes:
1135A
Age:::mo:~.OctOb~ 16,
1989
Redevelopment Agency
(COMMUNITY DEVELOPMENT COMMISSION)
b) RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE ISSUANCE OF CERTAIN COLLATERALIZED
MORTGAGE BONDS, SERIES 1989-B, AND THE TERMS OF CERTAIN FINANCING
DOCUMENTS TO BE EXECUTED AND DELIVERED IN CONNECTION THEREWITH.
(JOINT POWERS FINANCING AUTHORITY)
c) RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
AUTHORIZING THE PURCHASE BY THE AUTHORITY OF A PRINCIPAL AMOUNT
APPROXIMATELY EQUAL TO $3,080,000 OF COLLATERALIZED MORTGAGE BONDS,
SERIES 1989-B, AUTHORIZING AND DIRECTING EXECUTION OF AUTHORITY
PURCHASE AGREEMENT AND THE SALE THEREOF PURSUANT TO AN UNDERWRITERS
PURCHASE AGREEMENT AND AUTHORIZING OFFICIAL ACTION ON CONNECTION
THEREWITH.
Redevelopment Agency
Staff Report
On August 21, 1989 the Mayor and Common Council and the Community Development
Commission authorized the formation of the San Bernardino Joint Powers
Financing Authority, authorized the borrowing of funds from the Joint Powers
Authority and authorized the execution of related documents as required for
the Taxable Collateralized Mortgage Bonds, 1989 Series A.
On September 25, 1989 the Community Development Commission approved the final
form of documents in connection with certain financings.
The attached Resolutions will authorize the issuance of certain Collateralized
Mortgage Bonds, Series 1989-B and will authorize the purchase by the Joint
Powers Authority of a principal amount approximately equal to $3,080,000 of
Collateralized Mortgage Bonds, Series 1989-B. The Resolutions will also
authorize the execution of the related documents.
SBE00097D-139/3211S/bs
10/06/89 1215
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE
ISSUANCE OF CERTAIN COLLATERALIZED MORTGAGE
BONDS, SERIES 1989-B OF THE REDEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
WHEREAS,
the
Redevelopment
Agency
of
the
Ci ty
of
San Bernardino (the "Agency") a redevelopment agency (a public body,
corporate and politic) duly created and existing pursuant to the
Community Redevelopment Law (Part 1 of Division 24, commencing with
Section 33000) of the Health and Safety Code of the State of
California (the "Community Redevelopment Law"), has previously
issued its $34,500,000 Taxable Collateralized Mortgage Bonds Series
1989-A ("Series 1989-A Bonds") to finance, among other things, the
acquisition of the right, title and interest of the City of
San Bernardino, California (the "City"), In and to those certain
mortgage loans facilitated by and acquired with the proceeds of the
City Bonds (as defined In the Original Indenture hereinafter
described); and
WHEREAS, the Agency has heretofore executed and delivered
to Security Pacific National Bank, as the Trustee, that certain
Trust Indenture dated as of September 1,
1989 (the "Original
Indenture"), pursuant to which the Agency issued the Series 1989-A
Bonds for the purpose of refunding certain outstanding revenue bonds
- 1 -
of the Agency in advance of their respective maturities and for the
purpose of obtaining certain assigned interests In certain
mortgages, mortgage notes and mortgage loans; and
WHEREAS, pursuant to the Community Redevelopment Law, the
Agency has the power and authority to issue bonds for the purpose of
financing certain public improvements in its redevelopment project
areas within the City of San Bernardino, California; and
WHEREAS, pursuant to the Communi ty Redeve lopment Law, the
Agency now desires to issue bonds and to repay the principal of and
interest on such bonds from amounts available from a certain Trust
Estate (as defined in the Original Indenture); and
the
WHEREAS,
issuance of
Section 2.12 of
additional bonds
the Original Indenture authorizes
(the "Additional Bonds") by the
Agency from time to time In acco rdance wi th the prov is ions the reof
and secured by the Trust Estate (as defined In the Original
Indenture); and
WHEREAS, the Agency proposes at this time to issue its
Collateralized Mortgage Bonds, Series 1989-B, In an aggregate
principal amount approximately equal to $3,080,000 (the "Bonds")
pursuant to the Community Redevelopment Law and pursuant to a
certain First Supplemental Trust Indenture dated as of October 1,
1989 (the "First Supplemental Indenture"), by and between the Agency
and Security Pacific National Bank, as trustee (the "Trustee"); and
- 2 -
WHEREAS, such Bonds of the Agency constitute an issue of
Additional Bonds as defined ln and pursuant to Section 2.12 of the
Original Indenture; and
WHEREAS, the Agency has now determined to enter into an
Authori ty Purchase Agreement wi th the San Bernardino Joint Powers
Financing Authority (the "Authority") for the sale of the Agency's
Bonds, and to use the proceeds recei ved from the sale thereof to
finance certain public improvements; and
WHEREAS, the payment of the principal of and interest on
the Bonds will be insured pursuant to the terms of a municipal bond
insurance policy (the "Policy") to be issued by AMBAC Indemnity
Corporation,
("AMBAC"); and
a
Wisconsin-domiciled
stock
insurance
company
WHEREAS, the Mayor and Common Council have duly considered
such transactions and documentation and wish at this time to approve
said transactions and documentation ln the public interests of the
City;
NOW, THEREFORE, THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO, CALIFORNIA, DO HEREBY FIND, RESOLVE, DETERMINE AND
ORDER AS FOLLOWS:
- 3 -
Section 1. Approval of the Agency Bonds. The Mayor and
Common Counci I hereby approve the issuance by the Agency of the
Redevelopment Agency of the City of San Bernardino, Collateralized
Mortgage Bonds, Series 1989-B, In an aggregate principal amount
approximately equal to $3,080,000 for the purpose of financing
public capital improvement projects and certain other costs related
thereto within or benefitting the redevelopment project areas of the
Agency.
Section 2. Official Actions. The Mayor and Common
Council, the City Clerk, and any and all other officers of the City
a re hereby autho r i zed and di rected, for and In the name and on
behalf of the City, to do any and all things and to take any and all
actions, including execution and delivery of any and all
assignments,
certificates,
requisitions,
agreements,
notices,
consents, warrants and other documents which they, or any of them,
may deem necessary or advisable in connection with the execution and
delivery of the Bonds and any related closing documents, as
required, and the consummation of the transactions described herein
and therein.
- 4 -
Section 3.
Effective Date.
This Resolution shall take
effect from and after the date of its passage and adoption.
I HEREBY
adopted by the
San Bernardino at
held on the
the following vote,
CERTIFY
Mayor
a
that the foregoing
and Common Counc i 1
resolution
of the
meeting
day of
to wit:
AYES:
Council Members
was duly
City of
thereof,
19 8 9 , by
NAYS:
ABSENT:
City Clerk
day of
The foregoing resolution is hereby approved this
, 1989.
Mayor of the City of
San Bernardino
Approved as to form and legal content:
B~~
City Arney
3211S
- 5 -
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, SHAUNA CLARK, City Clerk In and for
San Bernardino, DO HEREBY CERTIFY that the foregoing
copy of San Bernardino City Resolution No.
true and correct copy of that now on file in this office.
the
and
is
City of
attached
a full,
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the official seal of the City of San Bernardino this day of
, 1989.
City Clerk
3211S
- 6 -
SBE00097D-137/3209S/1w
10/05/89 0420
RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO
AUTHORIZING THE ISSUANCE OF CERTAIN
COLLATERALIZED MORTGAGE BONDS, SERIES 1989-B, AND
THE TERMS OF CERTAIN FINANCING DOCUMENTS TO BE
EXECUTED AND DELIVERED IN CONNECTION THEREWITH
WHEREAS,
the
Redevelopment
Agency
of
the
City
of
San Bernardino, a redevelopment agency (a public body, corporate and
politic) (the "Agency"), duly created and existing pursuant to the
Community Redevelopment Law (Part 1 of Division 24, commencing with
Section 33000) of the Health and Safety Code of the State of
California (the "Community Redevelopment Law") has previously issued
its $34,500,000 Taxable Collateralized Mortgage Bonds, Series 1989-A
(the "Series 1989-A Bonds") for the purpose of refunding certain
outstanding revenue bonds of the Agency ln advance of their
respective maturities and for the purpose of obtaining certain
assigned interests in certain mortgages, mortgage notes and mortgage
loans; and
WHEREAS, the Agency has heretofore executed and delivered
to Security Pacific National Bank, as the Trustee, that certain
Trust Indenture dated as of September 1,
1989
(the "OriQinal
Indenture"), pursuant to which the Agency issued the Series 1989-A
Bonds; and
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WHEREAS, pursuant to the Communi ty Redevelopment Law, the
Agency has the power and authority to issue bonds for the purpose of
financing certain public improvements in its redevelopment project
areas within the City of San Bernardino, California; and
WHEREAS, pursuant to the Communi ty Redevelopment Law, the
Agency now desires to issue bonds and to repay the principal of and
interest on such bonds from amounts available from a certain Trust
Estate (as defined in the Original Indenture); and
WHEREAS, Section 2.12 of the Original Indenture authorizes
the issuance of addi t iona 1 bonds (the "Addi t iona 1 Bonds") by the
Agency from time to time in accordance with the provisions thereof
and secured by the Trust Estate (as defined ln the Original
Indenture); and
WHEREAS, the Agency proposes to lssue its Collateralized
Mortgage Bonds, Series 1989-B, in an aggregate principal amount
approximately equal to $3,080,000 (the "Bonds") pursuant to the
Community Redevelopment Law and under and pursuant to a certain
First Supplemental Trust Indenture dated as of October I, 1989 (the
"First Supplemental Indenture"), by and between the Agency and
Security Pacific National Bank, as trustee (the "Trustee"); and
WHEREAS, such Bonds of the Agency constitute an lssue of
Additional Bonds as defined in and pursuant to Section 2.12 of the
Original Indenture; and
'1
-L-
WHEREAS, the Agency has now determined to enter into an
Authority Purchase Agreement with the San Bernardino Joint Powers
Financing Authority (the "Authority") for the sale of the Agency's
Bonds, and to use the proceeds received from the sale thereof to
finance certain public improvements; and
WHEREAS, the payment of the principal of and interest on
the Bonds will be insured pursuant to the terms of a municipal bond
insurance policy (the "Policy") to be issued by AMBAC Indemnity
Corporation,
("AMBAC"); and
a
Wisconsin-domiciled
stock
insurance
company
WHEREAS, the Agency proposes to secure the Bonds wi th a
pledge of certain revenues and certain other amounts constituting
the Trust Estate under the Original Indenture in the priority and at
the times described in the First Supplemental Indenture; and
WHEREAS, the Authority, a joint powers authority created
pursuant to the California Government Code Section 6500, et ~.
(the "General JPA Law"), in exercising the powers granted thereunder
and pursuant to a certain joint powers agreement (the "Agreement"),
has initiated certain actions in connection with the purchase of the
Bonds from the Agency pursuant to Section 6584, et ~., of the
California Government Code (the "Marks-Roos Act") and the resale of
such Bonds to the Underwriters (hereinafter defined); and
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WHEREAS, the Authority has initiated certain actions In
connection with the purchase of the Bonds and the financing of
certain capital improvement projects of the Agency from the proceeds
received by the Agency from the Authority In accordance with the
Authority Purchase Agreement and pursuant to the provisions of the
Marks-Roos Act; and
WHEREAS, Miller & Schroeder Financial, Inc., Stifel,
Nicolaus & Company and Meridian Capital Markets, Inc., as
prospective underwriters of the Bonds (collectively, the
"Underwriters") have informed the Authority that they intend to
submit a joint offer to purchase the Bonds from the Authority and
have caused to be prepared an Underwri ters Purchase Agreement to
pu rchase the Bonds and an Of f ic i a 1 St atement desc r i bi ng the Bonds;
and
WHEREAS, the execution and delivery of the First
Supplemental Indenture and the repayment obligation of the Agency
thereunder complies with the terms and conditions of Section 2.12 of
the Original Indenture; and
WHEREAS,
transactions and
the Commission
documentation and
said transactions
Agency;
and documentation
has duly considered such
wishes at this time to approve
in the public interests of the
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION ACTING
ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Determinations. The Commission hereby finds
and determines that the issuance of the Bonds by the Agency and the
purchase of such Bonds from the Agency by the Authority results ln
"significant public benefits" within the meaning of Section 6586 of
the Marks-Roos Act, consisting of demonstrable savings ln effective
interest rates, bond preparation, bond underwriting and bond
lssuance costs. The Commission hereby approves the issuance by the
Agency of the Bonds in accordance with the terms of the First
Supplemental Indenture and this Resolution and under the authority
of the Community Redevelopment Law and the provisions of the
Marks-Roos Act.
Section 2. Issuance of Bonds; Approval of First
Supplemental Indenture. The Commission hereby authorizes the
issuance of the Bonds under and pursuant to the Communi ty
Redevelopment Law and the First Supplemental Indenture ln an
aggregate principal amount approximately equal to $3,080,000 for the
purposes hereinbefore described. The Commission hereby approves the
First Supplemental Indenture by and between the Agency and the
Trustee in substantially the form on file with the Secretary of the
Commission, together with any additions thereto or changes therein
deemed necessary or advisable by the Chairman upon the
recommendation of Bond Counsel and Agency Counsel, whose execution
-5-
thereof shall be conclusive evidence of such approval.
The Chairman
/
or the Vice-Chairman is hereby authorized and directed to execute,
and the Secretary or Assistant Secretary 1S hereby authorized and
directed to attest and affix the seal of the Commission to, the
final form of the First Supplemental Indenture for and in the name
and on behalf of the Agency.
The Commission hereby authorizes the
delivery and performance of the First Supplemental Indenture.
Section 3.
Approval of Authority Purchase Agreement.
The Commission hereby approves the sa Ie of the Bonds by negot iated
purchase with the Authority pursuant to the Authority Purchase
Agreement
by
and
between
the
Agency
and
the
Authority
1n
substantially the form on file with the Secretary of the Commission,
together with any additions thereto or changes therein deemed
necessary or advisable by the Chairman upon the recommendation of
Bond Counsel and Agency Counsel, whose execution thereof shall be
conclusive evidence of such approval.
The Chairman, Vice-Chairman,
or such other authorized officer of the Agency is hereby authorized
and directed to execute and deliver the final form of the Authority
Purchase Agreement for and in the name and on behalf of the Agency.
The Commission hereby authorizes the delivery and performance of the
Authority Purchase Agreement.
Section 4.
Official Statement.
The Commission hereby
approves the Preliminary Official Statement describing the Bonds, 1n
substantially the form submitted by the Underwriters and on file
with
the
Secretary
of
the
Commission.
Distribution
of
the
-6-
Preliminary Official Statement by the Underwriters to persons who
may be interested in the purchase of the Bonds is hereby approved.
The Commission hereby authorizes the distribution of the final
Official Statement by the Underwriters; and the Underwriters are
hereby directed to distribute copies of the final Official Statement
to all actual purchasers of the Bonds from the Underwriters acting
ln such capacity. The Chairman is hereby authorized and directed to
approve any changes in or additions to a final form of said Official
Statement approved by the Chairman, whose execution thereof shall be
conc 1 us i ve ev i dence of app rov a I 0 f any such changes and addi t ions.
The final Official Statement shall be executed in the name and on
behalf of the Agency by the Chairman, the Vice-Chairman or such
other authorized officer of the Agency, each of whom is individually
hereby authorized and directed to execute, if necessary, the final
Official Statement on behalf of the Agency.
Section 5. Official Actions. All actions taken
heretofore by any officer or officers of the Agency with respect to
the issuance of the Bonds or in connection with or related to any of
the agreements referenced herein are hereby approved, confirmed and
ratified. The Chairman, the Vice-Chairman and other members of the
Commission, the Secretary, counsel to the Commission, the Acting
Execu t i ve oi recto r 0 f the Agency, Agency Counse I, and any and all
other members and officers of the Commission and the Agency are
hereby authorized and directed, for and in the name and on behalf of
the Agency, to do any and all things and to take any and all
actions, including execution and delivery of any and all
-7-
assignments,
certificates,
requisitions,
agreements,
notices,
consents, inst ruments of conveyance, wa r rants and other documents
which they, or any of them, may deem necessary or advisable in
connection with the lssuance of the Bonds, the distribution of the
Official Statement and the execution and delivery of the First
Supplemental Indenture and the Authority Purchase Agreement and
related closing documents, as required, and the consummation of the
transactions described herein and therein, including, but not
limited to, obtaining municipal bond insurance, the
any and all documents to a municipal bond rating
distribution of the Preliminary Official Statement
shall become available for distribution.
submission of
agency and the
when the same
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
/ / /
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Section 6.
Effective Date.
This Resolution shall
take effect from and after the date of its passage and adoption.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a meeting thereof, held on the
day of , 1989, by the following vote, to wit:
AYES: Commissioners
NAYS:
ABSENT:
Secretary
The foregoing resolution is hereby approved this
day
of
,1989..
Chairman of the Community
Development Commission of the City
of San Bernardino
Approved as to form
and legal content:
AGENCY COUNSEL,
By: ~4144J
./
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SBE00097D-138/3210S/1w
10/06/89 0330
RESOLUTION NO.
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS
FINANCING AUTHORITY AUTHORIZING THE PURCHASE BY
THE AUTHORITY OF A PRINCIPAL AMOUNT APPROXIMATELY
EQUAL TO $3,080,000 OF COLLATERALIZED MORTGAGE
BONDS, SERIES 1989-B, AUTHORIZING AND DIRECTING
EXECUTION OF AUTHORITY PURCHASE AGREEMENT AND THE
SALE THEREOF PURSUANT TO AN UNDERWRITERS PURCHASE
AGREEMENT AND AUTHORIZING OFFICIAL ACTION IN
CONNECTION THEREWITH
WHEREAS,
the
San Bernardino
Joint
Powers
Financing
Authority (the "Authority"),
a joint powers authority created
pursuant to the California Government Code Section 6500, et ~.
(the "General JPA Law") in exercising the powers granted thereunder
and pursuant to a certain joint powers agreement (the "Agreement"),
has initiated certain actions in connection with the purchase of
certain
bonds
of
the
Redevelopment
Agency of
the Ci ty of
San Bernardino (the "Agency"), pursuant to Section 6584, et ~., of
the General JPA Law (the "Marks-Roos Act") and the sale of such
bonds to certain purchasers at negotiated sale; and
WHEREAS, the Agency has heretofore executed and delivered
to Security Pacific National Bank, as the Trustee, that certain
Trust Indenture dated as of September 1,
1989 (the "Original
Indenture"), pursuant to which the Agency issued $34,034,745 initial
aggregate principal amount of its Taxable Collateralized Mortgage
Bonds, Series 1989-A (the "Series 1989-A Bonds") for the purpose of
refunding certain outstanding revenue bonds of the Agency in advance
-1-
of their respective maturities and for the purpose of
certain assigned interests in certain mortgages, mortgage
mortgage loans; and
obtaining
notes and
WHEREAS, pursuant to the
codified as Part 1 of Division 24
Community Redevelopment Law,
of the California Health and
Safety Code, as supplemented and amended (the "Community
Redevelopment Law"), the Agency has the power and authority to issue
bonds for the purpose of financing certain public improvements ln
its redevelopment areas within the City of San Bernardino,
California; and
WHEREAS, pursuant to the Communi ty Redevelopment Law, the
Agency now desires to issue bonds and to repay the principal of and
interest on such bonds from amounts available from a certain Trust
Estate (as defined in the Original Indenture); and
WHEREAS, the Agency proposes at this time to lssue its
Collateralized Mortgage Bonds, Series 1989-B, in an aggregate
principal amount approximately equal to $3,080,000 (the "Bonds")
pursuant to the Community Redevelopment Law, and pursuant to a
certain First Supplemental Trust Indenture dated as of October 1,
1989 (the "First Supplemental Indenture"), by and between the Agency
and Security Pacific National Bank, as trustee (the "Trustee"); and
-2-
WHEREAS, the Bonds will be purchased by the Authority from
the Agency pursuant to and in accordance with a certain Authority
Purchase Agreement dated the date of execut ion thereof (the
"Authority Purchase Agreement"), by and between the Authority and
the Agency; and
WHEREAS, the Agency proposes to secure the Bonds wi th a
pledge of certain revenues and certain other amounts constituting
the Trust Estate under the Original Indenture, such Bonds being
payable from such sources in the priority and at the times described
in the First Supplemental Indenture; and
WHEREAS, Section 2.12 of the Original Indenture authorizes
the issuance of additional bonds (the "Additional Bonds") by the
Agency from time to time in accordance with the provisions thereof
and secured by the Trust Estate (as defined In the Original
Indenture); and
WHEREAS, such Bonds of the Agency constitute an issue of
Additional Bonds as defined In and pursuant to Section 2.12 of the
Original Indenture; and
WHEREAS, the payment of the principal of and interest on
the Bonds will be insured pursuant to the terms of a municipal bond
-3-
insurance policy (the "Policy") to be issued by AMBAC Indemnity
Corporation,
("AMBAC"); and
a
Wisconsin-domiciled
stock
insurance
company
WHEREAS, the Agency has now determined to enter into an
Authority Purchase Agreement with the Authority for the sale of the
Agency's Bonds, and to use the proceeds thereof to finance certain
public improvements; and
WHEREAS, Miller & Schroeder Financial, Inc., Stifel,
Nicolaus & Company and Meridian Capital Markets, Inc., as
prospective underwriters of the Bonds (collectively, the
"Underwriters"), have informed the Authority that they intend to
submit a joint offer to purchase the Bonds from the Authority and
have caused to be prepared an Underwri ters Purchase Agreement to
purchase the Bonds and an Official Statement describing the Bonds;
and
WHEREAS, the Board has duly considered such transactions
and wishes at this time to approve said transactions in the public
interests of the Authority;
-4 -
NOW, THEREFORE, THE SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Findings and Determinations. Pursuant to
the Mello-Roos Act, the Board hereby finds and determines that the
issuance of the Bonds will result 1n savings in effective interest
rates, bond preparation, bond underwriting and/or bond issuance
costs and thereby results 1n significant public benefits to its
members within the contemplation of Section 6586 of the Mello-Roos
Act.
Section 2. Purchase of Bonds; Approval of Authority
Purchase Agreement. The Board hereby approves the purchase of the
Bonds by negotiated purchase from the Agency pursuant to the
Authority Purchase Agreement by and between the Agency and the
Authority, 1n substantially the form on file with the Secretary
together wi th any changes therein or addi tions thereto approved by
the Chairman or an authorized representative of the Chairman, whose
execution thereof shall be conclusive evidence of such approval.
The Chairman, the Vice-Chairman or such other authorized officer of
the Authority 1S hereby authorized and directed to execute and
deliver the Authority Purchase Agreement for and in the name of the
Authority. The Board hereby authorizes the delivery and performance
of the Authority Purchase Agreement.
-5-
Section 3. Sale of the Bonds; Approval of Underwriters
Purchase Agreement. The Board hereby approves the sale of the Bonds
by negotiated purchase with the Underwriters pursuant to the
Underwriters Purchase Agreement by and between the Authority and the
Underwriters, in substantially the form on file with the Secretary
together wi th any changes therein or addi tions thereto approved by
the Chairman or an authorized representative of the Chairman, whose
execution thereof shall be conclusive evidence of approval of any
such additions and changes. The Underwriters Purchase Agreement
shall be executed in the name and on behalf of the Authority by the
Chairman, the Vice-Chairman or such other authorized officer of the
Authority, who is hereby authorized and directed to execute and
deliver said form of Underwriters Purchase Agreement on behalf of
the Authority upon submission of the proposal by the Underwriters to
acqui re the Bonds, which proposa 1 is accept able to the Cha i rman.
The purchase price received by the Authority for the Bonds shall not
be less than ninety-seven and one-half percent (97-1/2%) of the par
amount thereof and the net effective rate of interest to be borne by
the Bonds sha 11 not exceed a rate per annum equa 1 to seven and
seventy-five hundredths percent (7.75%).
Section 4. Official Action. The Chairman, the
Vice-Chairman, the Secretary, the Assistant Secretary, the Authority
Counsel and any and all other officers of the Authority are hereby
au tho r i zed and di rected, for and in the name and on beha 1 f 0 f the
Authority, to do any and all things and take any and all actions,
including execution and delivery of any and all assignments,
-6-
certificates, requisitions, agreements, notices, consents,
instruments of conveyance, warrants and other documents, which
they, or any of them, may deem necessary or advisable in order to
consummate thelawful issuance and sale of the Bonds as described
herein. Whenever in this Resolution any officer of the Authority
is authorized to execute or countersign any document or take any
action, such execution, countersigning or action may be taken on
behalf of such officer by any person designated by such officer
to act on his or her behalf in the case such officer shall be
absent or unavailable.
Section 5. Effective Date; Subject to Agency and City
Approval. This Resolution shall take effect from and after its
passage and adoption. This Resolution shall be subject in all
respects to the approval by the Agency and by the City, as
applicable, of the issuance of the Bonds by the Agency and the
execution and delivery of the Bond financing documents required
in connection therewith.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the City of San
Bernardino at a meeting thereof, held on the
day of , 1989, by the following vote, to wit:
AYES: Authority Members
NAYS:
ABSENT:
Secretary
-7-
The foregoing resolution is hereby approved this
day
of
, 1989.
Chairman of the San Bernardino
Joint Powers Financing Authority
Approved as to form
and legal content:
AUTHORITY COUNSEL,
By: ~fitUA..)
J
-8-