HomeMy WebLinkAboutadditional documentss
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RESOLUTION NO.
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS
FINANCING AUTHORITY MAKING REQUIRED FINDINGS AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS
RELATING TO THE ISSUANCE OF 2018 LEASE REVENUE
REFUNDING BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT
TO EXCEED $4,500,000 FOR THE PURPOSE OF REFUNDING THE 1996
LEASE REVENUE REFUNDING BONDS, AND AUTHORIZING AND
DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH
WHEREAS, the San Bernardino Joint Powers Financing Authority (the "Authority") is a
joint powers agency that is duly organized and existing under Chapter 5 of Division 7 of Title 1
of the Government Code of the State of California (the "JPA Act") with the authority to assist in
the financing and refinancing of the construction, reconstruction, modernization and equipping
of certain capital improvements on behalf of the City of San Bernardino (the "City"); and
WHEREAS, the City desires to refinance the acquisition and/or construction of various
"public capital improvements" within the meaning of the JPA Act, which are located within the
boundaries of the City and which were previously financed and refinanced from proceeds of the
San Bernardino Joint Powers Financing Authority Lease Revenue Refunding Bonds (City Hall
Project) Series 1996 (the "1996 Bonds"); and
WHEREAS, the Authority and the City have determined that it would be in the best
interests of the City and residents of the City to authorize the preparation, sale and delivery of the
"San Bernardino Joint Powers Financing Authority 2018 Lease Revenue Refunding Bonds" (the
"Bonds") for the purpose of refunding the 1996 Bonds; and
WHEREAS, the refunding of the 1996 Bonds will provide a public benefit by reducing
debt service on City obligations and releasing the lien on City Hall that secures the 1996 Bonds;
and
WHEREAS, the City wishes to facilitate the issuance of the Bonds by the Authority
through a lease/leaseback transaction as described below; and
WHEREAS, the Authority and the City will enter into a Lease Agreement (Site 4
ease)
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(the "Site Lease") pursuant to which the City will ease to e A,r y rel rope y ana
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Agenda itWn No:
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G -Ry of San Bernardino
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improvements comprising the City Yard, subject to adjustment as described in Section 2 below
(the "Leased Property"), and a Lease Agreement (the "Lease"), pursuant to which the Authority
will lease the Leased Property back to the City; and
WHEREAS, pursuant to the Lease, the City will pay Lease Payments (as defined in the
Lease) to the Authority; and
WHEREAS, in order to facilitate the issuance of the Bonds, the Authority will pledge
the Lease Payments to the owners of the Bonds pursuant to an Indenture (the "Indenture"), by
and among the City, the Authority and U.S. Bank National Association, as trustee (the
"Trustee"); and
WHEREAS, the Authority and the Trustee desire to enter into an Assignment
Agreement (the "Assignment Agreement"), in order to provide, among other things, that all
rights to receive the Lease Payments have been assigned without recourse by the Authority to the
Trustee for the benefit of the owners of the Bonds; and
WHEREAS, the City has been presented with a term sheet from Western Alliance
Business Trust, a wholly owned affiliate of Western Alliance Bank (the "Purchaser"), pursuant
to which the Purchaser has agreed to purchase the Bonds through a private placement; and
WHEREAS, the City and the Authority have determined that a private placement sale of
the Bonds to the Purchaser will result in a lower overall cost to the City than a public sale; and
WHEREAS, the Bonds will be issued pursuant to the JPA Act; and
WHEREAS, upon the refunding of the 1996 Bonds, the City will cause to be recorded
with the San Bernardino County Recorder terminations of certain previously recorded lease
documents related to the 1996 Bonds and/or reconveyances of the interests that were granted
through such lease documents (collectively, the "1996 Lease Terminations"); and
WHEREAS, there is now on file with the Secretary of the Authority copies of the Site
Lease, the Lease, the Indenture, the Assignment Agreement, the 1996 Lease Terminations and an
Escrow Agreement (1996 Bonds) among the City, the Authority and the Trustee (the "Escrow
Agreement"); and
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WHEREAS, the City has held a public hearing on the date hereof pursuant to Section
6586.5 of the JPA Act following publication of notice not less than five days prior to the hearing,
concerning the issuance of the Bonds and the refunding of the 1996 Bonds and has determined
that the issuance of the Bonds and the refunding of the 1996 Bonds with the assistance of the
Authority will result in significant public benefits; and
WHEREAS, all acts, conditions and things that are required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed precedent to and
in connection with the consummation of the financing that is authorized hereby do exist, have
happened and have been performed in regular and due time, form and manner as required by law,
and the Authority is now duly authorized and empowered, pursuant to each and every
requirement of law, to consummate such financing for the purpose, in the manner and upon the
terms herein provided;
NOW, THEREFORE, the Board of Directors of the Authority does hereby resolve as
I follows:
Section 1. This Board of Directors hereby specifically finds and declares that each of the
statements, findings and determinations of the Authority in the recitals that are set forth above
and in the preambles of the documents that are approved herein are true and correct.
Section 2. The Site Lease, the Lease, the Indenture, the Assignment Agreement, the
11996 Lease Terminations and the Escrow Agreement (collectively, the "Agreements") that are
presented at this meeting are approved, and the issuance of the Bonds is approved; provided,
however, that the aggregate principal amount of the Bonds shall not exceed $4,500,000, the
interest rate on the Bonds shall not exceed 4.50% per annum and the final scheduled Lease
Payment shall not be later than January 1, 2023 (subject to extension as provided in the Lease).
The Chairperson, the Vice Chairperson, the Executive Director, the Secretary, the Controller,
counsel to the Authority or the designee thereof (the "Authorized Officers") are authorized and
directed to execute and deliver the Bonds and the Agreements. The Agreements shall be
executed in substantially the forms hereby approved, with such additions, insertions and
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omissions thereto and changes therein as are recommended or approved by counsel to the
Authority and approved by the Authorized Officer or Officers executing the Agreements, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
the Authorized Officers. In the event that it is determined by an Authorized Officer that there are
limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased
Property as contemplated by the Lease, the Authorized Officers may designate other or
additional real property of the City to be leased or subleased pursuant to the Site Lease and Lease
Agreement, with such designation to be conclusively evidenced by the execution and delivery of
the Site Lease and Lease Agreement by one or more of the Authorized Officers.
Section 3. The Authorized Officers and other officers of the Authority are authorized
and directed, jointly and severally, to do any and all things and to execute and deliver any and all
documents which they may deem necessary or advisable in order to consummate the refunding
of the 1996 Bonds and the execution of the Agreements and otherwise effectuate the purposes of
this Resolution, including but not limited to purchasing a title insurance policy with respect to
the Leased Property, executing a rate lock agreement with the Purchaser, causing the recording
of the Agreements and executing and delivering redemption instructions with respect to the 1996
Bonds, and such actions previously taken by such officers are hereby ratified and confirmed.
Section 4. This Resolution shall take effect immediately upon its adoption.
RESOLUTION OF THE SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY MAKING REQUIRED FINDINGS AND AUTHORIZING THE
EXECUTION AND DELIVERY OF DOCUMENTS RELATING TO THE ISSUANCE OF
2018 LEASE REVENUE REFUNDING BONDS IN AN AGGREGATE PRINCIPAL
AMOUNT NOT TO EXCEED $4,500,000 FOR THE PURPOSE OF REFUNDING THE
1996 LEASE REVENUE REFUNDING BONDS, AND AUTHORIZING AND
DIRECTING CERTAIN ACTIONS IN CONNECTION THEREWITH
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
City Council of the City of San Bernardino acting as the Board of Directors of the San
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28 1
Bernardino Joint Powers Financing Authority at a regular meeting thereof, held on the 20th day
of December, 2017, by the following vote, to wit:
Council Members: AYES NAYS
MARQUEZ
BARRIOS
VALDIVIA
SHORETT
NICKEL
RICHARD
MULVIHILL
ABSTAIN ABSENT
Georgeann Hanna, City Clerk
The foregoing Resolution is hereby approved this day of
Approved as to form:
Gary D. Saenz, City Attorney
to
R. Carey Davis, Mayor
City of San Bernardino
,201_
Date:
To:
From:
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Public Hearing
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CQy A -6n Bernardino
Request for Council Action
December 20, 2017
Honorable Mayor and City Council Members
Andrea M. Miller, City Manager'( 9 -TV f(*\
By: Brent A. Mason, Director of Finance
Subject: Joint Powers Financing Authority authorizing the execution
and delivery of documents
Recommendation
Adopt a Resolution of the Mayor and City Council of the City of San Bernardino,
California, making required findings and authorizing the execution and delivery of
documents relation to the issuance of San Bernardino Joint Powers Financing Authority
2018 lease revenue refunding Bonds in an aggregate principal amount not to exceed
$4,500,000 for the purpose of refunding the 1996 lease revenue refunding Bonds, and
authorizing and directing certain actions in connection thereviith; and
Adopt a Resolution of the San Bernardino Joint Powers Financing Authority making
required findings and authorizing the execution and delivery. of documents relating to
the issuance of 2018 lease revenue refunding Bonds in an aggregate principal amount
not to exceed $4,500,000 for the purpose of refunding the 1996 -lease revenue
refunding Bonds, and authorizing and directing certain actions in connection therewith.
Background
The San Bernardino Joint Powers Financing Authority (the "Authority") was formed by
the City of San Bernardino (the "City") and the former Redevelopment Agency of the
City (the "former RDA") as a joint powers authority in August 1989 pursuant to California
law. Because of the dissolution of redevelopment agencies by the state in 2012, the
Successor Agency to the former Redevelopment Agency (the "Successor Agency")
succeeded to the membership position of the former RDA and the current members of
the Authority are the City and the Successor Agency.
Under state law the Authority is authorized to issue bonds to finance public capital
improvement projects within the City. In 1996, the Authority issued lease revenue
bonds (the "1996 Bonds") which were secured by lease payments from the City to the
Authority under a lease on the City Hall property. The transaction involved a lease of
the property from the City to the RDA, a sublease from the RDA to the Authority, and a
leaseback of the property from the Authority to the City. The lease payments made by
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the City ultimately, serve as the reidurce to makelhd�,doff service. payments by the
Authority to the bond holde?s thrg4h a Trustee.
Discussion
To take advantage of current favorable market conditions and to remove the City Hall
property as security for the lease under the 1996 Bonds, the Authority proposes to issue
refunding bonds (the "2018 Bonds") to repay the 1996 Bonds. The proposed
transaction will substitute the City Yard as the underlying security for the lease
associated with the 2018 Bonds. This will release City Hall from any restrictions that
may otherwise exist if it remained as the security for either the 1996 Bonds or the new
2018 Bonds. City Hall will be free for whatever use the City Council may determine as
its ultimate reuse. Undr the terms of the 2018 Bonds, the Authority will lease the City
Yard back to the City, which will make lease payments to the Authority, and the
Authority will in tum use the lease payments to pay debt service on the new 2018
Bonds.
Per the termsof the resolutions, the new principal amount outstanding for the 2018
Bonds can not exceed $4,500,000 and the interest rate can not exceed 4.5%. All
proceeds of the new bonds will entirely be used to repay the 1996 Bonds and the
transaction issuance costs; there will be no surplus "new funds" generated by this
transaction. Further, the actual amount issued under the 2018 Bonds will be
determined at the time of pricing, shortly after approval, based on the then outstanding
balance of the 1996 bonds which is anticipated to be approximately $4,300,000.
The debt service on the new bonds will not be extended past the original maturity date
of the 1996 Bonds, which January 1, 2023. The 2018 Bonds will be sold to Western
Alliance Business Trust, a wholly owned affiliate of Western Alliance Bank, through a
private placement. Given the City's recent history exiting the bankruptcy process, a
private placement will result in a lower overall cost to the City than a public sale.
Based on the latest number run by the bond underwriter, the City will generate a net
present value savings of approximately $107,423 by refunding the 1996 Bonds from the
proceeds of the new 2018 Bonds. This translates to approximately $25,000 per year for
the balance of the term of the new bonds. The savings are only an estimate at this time
and will fluctuate up or down based on the final pricing of the bonds.
The new annual debt service schedule of payments will be approximately:
PRINCIPAL
January
1, 2019
772,665
January
1, 2020
840,661
January
1, 2021
872,835
January
1, 2022
908,651
January
1, 2023
943,092
INTEREST (due semi-annually)
206,470
140,114
107,076
72,774
37,064
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Documents
The Resolutions proposed for approval authorize the execution of many documents on
behalf of the City and the Authority which, collectively, will provide for the issuance of
the 2018 Bonds. The documents for which City Council approval is required include:
Resolution of the Ci
- Lease Agreement (Exhibit A to Resolution)
- Site Lease (Exhibit B to Resolution)
- Indenture (Exhibit C to Resolution)
- Reconveyance of 1996 Ground Lease (Exhibit D to Resolution)
- Termination of 1996 Lease (also Exhibit D to Resolution)
- Escrow Agreement (Exhibit E to Resolution)
Resolution of the Authority
Lease Agreement
- Site Lease
Indenture
- Assignment Agreement
Reconveryance of 1996 Ground Lease
Reconveryance of 1996 Site Lease
Escrow Agreement
Financing Team
The City has assembled a highly qualified team of industry experts to assist with the
issue and sale of the bonds. Those team members are Stradling, Yocca, Carlson and
Rauth as bond counsel, Stifel, Nicolaus and Company, Inc as the
Underwriter/Placement Agent and Urban Futures, Inc as the Financial Advisor. Staff
has worked with each of these members on many successful transactions over many
years.
Debt Policy
The City Resolution includes the approval of a debt policy, which is exactly the same as
that which was adopted by the Mayor and City Council for the Authority at the City
Council meeting of December 6, 2017. State law requires the issuer of any state or
local government debt to adopt a formal debt policy covering purposes for which debt
proceeds may be used, types of debt that may be issued, relationship of the debt to the
issuer's capital improvement program, policy goals related to the issuer's planning goals
and objectives, and internal control procedures that the issuer has implemented or will
implement to ensure proper use of debt proceeds. The City currently does not have a
formal debt policy. The action of December 6, 2017 by the Authority was only taken on
behalf of the Authority, thus the need to also approve by the City as well in this action.
It is proposed that the City adopt a formal debt policy (attached as Exhibit F to the City
Resolution).
Packet Pg. 484
Fiscal Impact
There fiscal impact associated with the proposed refinancing transaction will save the
General Fund a approximately $25,000 each of the remaining fiscal years of the bond
term (through 2013). However the transaction's primary benefit is to release City Hall
as the security for the underlying lease, enabling the City to take a variety of actions to
resolving the current status of the property. Legal and financial consultant costs
incurred associated with preparing this transaction are paid out of bond proceeds and
the anticipated savings is after paying those costs of approximately $110,000.
Conclusion
It is recommended that the Mayor and City Council, acting also as the Board of the
Authority, adopt the attached Resolutions authorizing refinancing of the 1996 Bonds.
Attachments
Attachment 1 — Resolution of City of San Bernardino; Exhibit A — Lease Agreement;
Exhibit B — Site Lease; Exhibit C — Indenture; Exhibit D Part 1 —
Reconveyance of 1996 Ground Lease; Exhibit D Part 2 — Termination of
1996 Lease; Exhibit E — Escrow Agreement; Exhibit F — Debt Policy
Attachment 2 - Resolution of Joint Powers Financing Authority
Ward: All
Synopsis of Previous Council Actions:
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, MAKING REQUIRED FINDINGS AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING
TO THE ISSUANCE OF SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY 2018 LEASE REVENUE REFUNDING BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $4,500,000 FOR THE PURPOSE OF
REFUNDING THE 1996 LEASE REVENUE REFUNDING BONDS, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and a
charter city that is duly organized and existing under and pursuant to the Constitution and laws
the State of California (the "State!); and
WHEREAS, the City desires to refinance the acquisition and/or construction of various
"public capital improvements" within the meaning of the Marks -Roos Local Bond Pooling Act
of 1985, which are located within the boundaries of the City and which were previously financed
and refinanced from proceeds of the San Bernardino Joint Powers Financing Authority Lease
Revenue Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds"); and
WHEREAS, the City has determined that it would be in the best interests of the City and
residents of the City to cause the Authority (as such term is defined below) to authorize the
preparation, sale and delivery of the "San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds" (the "Bonds") for the purpose of refunding the 1996 Bonds;
and
WHEREAS, the refunding of the 1996 Bonds will provide a public benefit by reducing
debt service on City obligations and releasing the lien on City Hall that secures the 1996 Bonds;
and
WHEREAS, the City wishes to facilitate the issuance of the Bonds with the assistance of
the San Bernardino Joint Powers Financing Authority (the "Authority"), a joint exercise of
powers agency of which the City is a member, through a lease/leaseback transaction as described
below; and
Packet Pg. 486
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1 WHEREAS, the Authority and the City will enter into a Lease Agreement (Site Lease)
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(the "Site Lease') pursuant to which the City will lease to the Authority the real property and
improvements comprising the City Yard, subject to adjustment as described in Section 2 below
(the "Leased Property"), and a Lease Agreement (the "Lease"), pursuant to which the Authority
will lease the Leased Property back to the City; and
WHEREAS, pursuant to the Lease, the City will pay Lease Payments (as such term is
defined in the Lease) to the Authority; and
WHEREAS, in order to facilitate the issuance of the Bonds, the Authority will pledge
the Lease Payments to the owners of the Bonds pursuant to an Indenture (the "Indenture', by
and among the City, the Authority and U.S. Bank National Association, as trustee (the
"Trustee"); and
WHEREAS, the City has been presented with a term sheet from Western Alliance
Business Trust, a wholly owned affiliate of Western Alliance Bank (the "Purchaser"), pursuant
to which the Purchaser has agreed to purchase the Bonds through a private placement; and
WHEREAS, the City and the Authority have determined that a private placement sale of
the Bonds to the Purchaser will result in a lower overall cost to the City than a public sale; and
WHEREAS, upon the refunding of the 1996 Bonds, the City will cause to be recorded
with the San Bernardino County Recorder terminations of certain previously recorded lease
documents related to the 1996 Bonds and/or reconveyances of the interests that were granted
through such lease documents (collectively, the "1996 Lease Terminations"); and
WHEREAS, there are now on file with the City Clerk copies of the Site Lease, the
Lease, the 1996 Lease Terminations, an Escrow Agreement (1996 Bonds) among the City, the
Authority and the Trustee, as well as a form of Assignment Agreement between the Trustee and
the Authority; and
WHEREAS, the City has held a public hearing on the date hereof pursuant to
Government Code Section 6586.5 following publication of notice not less than five days prior to
the hearing, concerning the issuance of the Bonds and the refunding of the 1996 Bonds and has
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determined that the issuance of the Bonds and the refunding of the 1996 Bonds with the
assistance of the Authority will result in significant public benefits; and
WHEREAS, Section 8855 of the Government Code of the State of California requires
the City to adopt a debt management policy prior to the issuance of bonds; and
WHEREAS, the City wishes to adopt the debt management policy attached hereto as the
debt management policy of the City pursuant to Section 8855 of the Government Code of the
State of California; and
WHEREAS, all acts, conditions and things that are required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed precedent to and
in connection with the consummation of the financing that is authorized hereby do exist, have
happened 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 consummate such financing for the purpose, in the manner and upon the terms herein
provided;
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS:
Section 1. The City Council hereby specifically finds and declares that each of the
statements, findings and determinations of the City in the recitals that are set forth above and in
the preambles of the documents that are approved herein are true and correct, and that the
issuance of the Bonds and the refunding of the 1996 Bonds will result in significant public
benefits for the residents of the City of the type that is described in Government Code Section
6586 (a) and (d).
Section 2. The Lease in substantially the form attached hereto as Exhibit "A" is hereby
approved. The Mayor, any member of the City Council, the City Attorney, the City Manager,
the Finance Director or the designee thereof (the "Authorized Officers"), acting alone, are hereby
authorized and directed, for and in the name and on behalf of the City, to execute and deliver to
the Authority the Lease in substantially said form, with such changes, insertions and omissions
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therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
the Authorized Officers; provided, however, that the amount of the principal component of the
Lease Payments shall not exceed $4,500,000, the scheduled interest components shall accrue at a
rate not to exceed 4.50% per annum and the final scheduled Lease Payment shall not be later
than January 1, 2023 (subject to extension as provided in the Lease). In the event that it is
determined by an Authorized Officer that there are limitations or restrictions on the ability of the
City to lease or sublease any portion of the Leased Property as contemplated by the Lease, the
Authorized Officers may designate other or additional real property of the City to be leased or
subleased pursuant to the Lease, with such designation to be conclusively evidenced by the
execution and delivery of the Lease by one or more of the Authorized Officers.
Section 3. The Site Lease in substantially the form attached hereto as Exhibit "B" is
hereby approved. The Authorized Officers, acting alone, are hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver to the Authority the Site Lease
in substantially said form, with such changes, insertions and omissions therein as the Authorized
Officer or Officers executing the same may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof by one or more of the Authorized Officers.
Section 4. The Indenture in substantially the form attached hereto as Exhibit "C" is
hereby approved. The Authorized Officers, acting alone, are hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver to the Authority the Indenture
in substantially said form, with such changes, insertions and omissions therein as the Authorized
Officer or Officers executing the same may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof by one or more of the Authorized Officers.
Section 5. The 1996 Lease Terminations in substantially the form attached hereto as
Exhibit "D" are hereby approved. The Authorized Officers, acting alone, are hereby authorized
and directed, for and in the name and on behalf of the City, to execute and deliver to the 1996
Lease Terminations in substantially said forms, with such changes, insertions and omissions
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therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
the Authorized Officers.
Section 6. The Assignment Agreement between the Trustee and the Authority on file
with the City Clerk is hereby approved for execution and delivery by the Authority in
substantially the form on file with the City Clerk. This Resolution shall constitute a consent of
the City pursuant to Government Code Sections 5951 and 5952 for any transfer of interests in the
Lease made in accordance with the Assignment Agreement and the Lease.
Section 7. The Escrow Agreement (1996 Bonds) among the Authority, the City and
the Trustee in substantially the form attached hereto as Exhibit "E" is hereby approved. The
Authorized Officers, acting alone, are hereby authorized and directed, for and in the name and on
behalf of the City, to execute and deliver to the Escrow Agreement (1996 Bonds) in substantially
said form, with such changes, insertions and omissions therein as the Authorized Officer or
Officers executing the same may require or approve, such approval to be conclusively evidenced
by the execution and delivery thereof by one or more of the Authorized Officers.
Section 8. The City Clerk and such person or persons as may have been designated
by the City Clerk to act on the City Clerk's behalf are hereby authorized and directed to attest the
signature of the Authorized Officers designated herein to execute any documents described
herein, and to affix and attest the seal of the City, as may be required or appropriate in
connection with the execution and delivery of the Site Lease, the Lease, the 1996 Lease
Terminations and the Escrow Agreement (1996 Bonds).
Section 9. The Debt Management Policy that is attached hereto as Exhibit "F" is
hereby adopted as the Debt Management Policy of the City for purposes of Section 8855 of the
Government Code of the State of California.
Section 10. The Authorized Officers are each hereby authorized and directed, jointly
and severally, to do any and all things and to execute and deliver any and all documents which
each may deem necessary or advisable (including an agreement to retain the services of Stradling
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Yocca Carlson & Rauth, a Professional Corporation (as Bond Counsel), Urban Futures, Inc. (as
Municipal Advisor) and Stifel, Nicolaus & Company, Incorporated (as Placement Agent) to
assist the City with the financing and the payment of costs of issuance approved by the
Authorized Officers) in order to consummate the refunding of the 1996 Bonds and otherwise to
carry out, give effect to and comply with the terms and intent of this Resolution, the Site Lease,
the Lease, the Indenture, the Assignment Agreement and the 1996 Lease Terminations, including
but not limited to purchasing a title insurance policy with respect to the Leased Property,
executing a rate lock agreement with the Purchaser, causing the recording of the documents that
are described herein and executing and delivering redemption instructions with respect to the
1996 Bonds. Such actions heretofore taken by such officers or designees are hereby ratified,
confirmed and approved.
Section 11. This Resolution shall take effect immediately upon its adoption.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN !
BERNARDINO, CALIFORNIA, MAIGNNG REQUIRED FINDINGS AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING
TO THE ISSUANCE OF SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY 2018 LEASE REVENUE REFUNDING BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $49500,000 FOR THE PURPOSE OF 6
REFUNDING THE 1996 LEASE REVENUE REFUNDING BONDS, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION s
THEREWITH
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and ;
City Council of the City of San Bernardino at a meeting thereof, held on the 20th
day of December, 2017, by the following vote, to wit:
Council Members: AYES NAYS ABSTAIN ABSENT
1
MARQUEZ i
BARRIOS
VALDIVIA
SHORETT
NICKEL
RICHARD
MULVIHILL
I The foregoing Resolution is hereby approved this _
Approved as to form:
Gary D. Saenz, City Attorney
Bar
Georgeann Hanna, City Clerk
day of
R. Carey Davis, Mayor
City of San Bernardino
.201—.
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I hereby certify that the foregoing resolution was duly introduced, passed and adopted at
the time and place and by the vote as noted above.
Clerk of the City Council
City of San Bernardino
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Stradling Yocca Carlson & Rauth
Draft of 1215117
LEASE AGREEMENT
Dated as of January 1, 2018
By and Between
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
And
CITY OF SAN BERNARDINO
Relating to
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
2018 LEASE REVENUE REFUNDING BONDS
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; RULES OF INTERPRETATION...................................................2
Section1.1 Definitions........................................................................................................... 2
Section1.2 Interpretation........................................................................................................5
ARTICLE II COVENANTS, REPRESENTATIONS AND WARRANTIES...............................5
Section 2.1 Covenants, Representations and Warranties of the City......................................5
Section 2.2 Covenants, Representations and Warranties of the Authority .............................6
Section 2.3 No Financial Advisory or Fiduciary Relationship...............................................8
ARTICLE III DEPOSIT AND APPLICATION OF FUNDS..........................................................8
ARTICLE IV LEASE OF LEASED PROPERTY; LEASE PAYMENTS......................................8
Section 4.1
Lease of Leased Property by Authority to City ................................................... 8
Section4.2
Reserved..............................................................................................................
8
Section4.3
Term.....................................................................................................................8
Public Liability Insurance..................................................................................13
Section4.4
Lease Payments...................................................................................................9
Casualty Insurance; Flood Coverage.................................................................13
Section4.5
Quiet Enjoyment................................................................................................10
Rental Intemiption Insurance............................................................................14
Section4.6
Title....................................................................................................................10
Worker's Compensation Insurance....................................................................15
Section 4.7
Substitution of Property.....................................................................................10
Recordation Hereof Title Insurance..................................................................15
Section4.8
Release of Property............................................................................................
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ARTICLE V MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS................12
Section 5.1
Maintenance, Utilities, Taxes and Assessments................................................12
Section 5.2
Modification of Leased Property.......................................................................13
Section 5.3
Public Liability Insurance..................................................................................13
Section 5.4
Casualty Insurance; Flood Coverage.................................................................13
Section5.5
Rental Intemiption Insurance............................................................................14
Section 5.6
Worker's Compensation Insurance....................................................................15
Section 5.7
Recordation Hereof Title Insurance..................................................................15
Section5.8
Form of Policies.................................................................................................15
Section 5.9
Installation of City's Personal Property.............................................................15
Section5.10
Liens..................................................................................................................15
Section5.11
Advances............................................................................................................16
ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN;
USE OF PROCEEDS; ABATEMENT OF LEASE PAYMENTS ..........................16
Section6.1 Deposit of Net Proceeds....................................................................................16
Section6.2 Application of Net Proceeds..............................................................................16
Section 6.3 Abatement Due to Damage or Destruction........................................................17
Section 6.4 Substitution of Property under Certain Circumstances......................................17
Section 6.5 Termination or Abatement Due to Eminent Domain.........................................17
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ARTICLE VII OTHER COVENANTS OF THE CITY..................................................................18
Section 7.1
Disclaimer of Warranties...................................................................................18
Section 7.2
Access to the Leased Property...........................................................................18
Section 7.3
Release and Indemnification Covenants
............................................................18
Section 7.4
Assignment by the Authority.............................................................................19
Section 7.5
Assignment and Subleasing by the City
............................................................20
Section7.6
Amendment Hereof...........................................................................................20
Section7.7
[RESERVED]....................................................................................................20
Section 7.8
Environmental Covenants..................................................................................20
Section7.9
Financial Statements; Budgets...........................................................................21
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES..........................................................21
Section 8.1 Events of Default Defined................................................................................. 21
Section 8.2 Remedies on Default..........................................................................................22
Section 8.3 No Remedy Exclusive.......................................................................................23
Section 8.4 Agreement to Pay Attorneys' Fees and Expenses.............................................24
Section 8.5 No Additional Waiver Implied by One Waiver.................................................24
ARTICLE IX PREPAYMENT OF LEASE PAYMENT'S.............................................................24
Section9.1 Security Deposit.................................................................................................24
Section9.2 Optional Prepayment......................................................................................... 25
Section 9.3 Mandatory Prepayment From Net Proceeds of Insurance or Eminent
Domain..............................................................................................................25
ARTICLEX MISCELLANEOUS................................................................................................25
Section10.1
Notices............................................................................................................... 25
Section10.2
Binding Effect....................................................................................................26
Section10.3
Severability........................................................................................................26
Section10.4
Net -net -net Lease...............................................................................................26
Section 10.5
Further Assurances and Corrective Instruments
................................................ 26
Section10.6
Execution in Counterparts.................................................................................26
Section 10.7
Applicable Law..................................................................................................26
Section10.8
Captions.............................................................................................................
26
Section10.9
No Merger..........................................................................................................26
Section 10.10
Third Party Beneficiary.....................................................................................26
Section 10.11
Jury Trial Waiver...............................................................................................26
APPENDIX A DESCRIPTION OF THE LEASED PROPERTY....................................................A-1
APPENDIX B SCHEDULE OF LEASE PAYMENTS....................................................................B-1
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LEASE AGREEMENT
This LEASE AGREEMENT, dated as of January 1, 2018 (this "Lease"), is entered into by
and between the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, a joint
powers agency that is duly organized and existing under the laws of the State of California (the
"Authority"), as lessor, and the CITY OF SAN BERNARDINO, a municipal corporation and
charter city that is duly organized and existing under and by virtue of the laws of the State of
California (the "City"), as lessee.
RECITALS
1. In order to refinance the acquisition, construction and installation of certain capital
equipment and capital improvements of the City (the "Project"), which Project was previously
financed and refinanced from proceeds of the San Bernardino Joint Powers Financing Authority
Lease Revenue Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds'), the City has
agreed to lease the real property that consists of the land and the improvements that are commonly
known as the City Yard, as such real property is described more fully in Appendix A (the "Leased
Property"), to the Authority by entering into a Lease Agreement (Site Lease), dated as of the date
hereof (the "Site Lease").
2. The Authority has agreed to assist the City with such refinancing by entering into this
Lease, pursuant to which the Authority will sublease the Leased'Property back to the City and the
City will be obligated to make payments (the "Lease Payments") to the Authority.
3. The City and the Authority have determined that it would be in the best interests of
the City and the Authority to provide the funds that are necessary to refinance the Project through the
issuance by the Authority of bonds that are payable from the Lease Payments (the "Series 2018
Bonds").
4. The City and the Authority have determined that it would be in the best interests of
the City and the Authority to provide for the issuance of the Series 2018 Bonds pursuant to an
Indenture, dated as of the date hereof (the "Indenture"), by and among the Authority, the City and
U.S. Bank National Association, as trustee (the "Trustee").
5. All rights to receive the Lease Payments have been assigned without recourse by the
Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the
"Assignment Agreement"), by and between the Authority and the Trustee.
6. The City is authorized to enter into a lease -leaseback arrangement with the Authority
to refinance the Project under the City's Charter and other applicable State law.
AGREEMENT
In consideration of the foregoing and the material covenants herein, the City and the
Authority covenant, agree and bind themselves as follows:
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ARTICLE I
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DEFINITIONS; RULES OF INTERPRETATION
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Section 1.1 Definitions. Unless the context otherwise requires, the terms defined in this in46
Section shall, for all purposes of this Lease, have the meanings specified below, which meanings 6,
shall be equally applicable to both the singular and plural forms of any of the terms herein defined.
Capitalized terms that are not otherwise defined herein shall have the meanings assigned to such
terms in the Indenture.
"Additional Bonds" means bonds other than the Series 2018 Bonds issued under the
Indenture in accordance with the provisions of Sections 3.06 and 3.07 thereof
"Additional Payments" means any and all amounts that are payable by the City hereunder
(other than Lease Payments), including rebate payments to the federal government.
"Applicable Environmental Laws" means all California and federal environmental laws
(including common laws), including, but not limited to, the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 USC Section 9601 et seq.; the Resource
Conservation and Recovery Act, 42 USC Section 6901 et seq.; the Clean Air Act, 42 USC Section
7401 et seq., the Occupational Health and Safety Act, 29 USC Section 654 et seq.; the California
Hazardous Waste Control Law, California Health & Safety Code Section 25100 et seq.; the
Hazardous Substance Account Act, California Health & Safety Code Section 25300 et seq.; the
Porter -Cologne Water Quality Control Act, California Water Code Section 1300 et seq.; the Air
Resources Act, California Health & Safety Code Section 3900 et seq.; the Safe Drinldng Water &
Toxic Enforcement Act, California Health & Safety Code Section 25249.5 et seq.; and the
regulations under each thereof, and any other local, state, and/or federal laws or regulations, whether
currently in existence or hereafter enacted, that govern: (a) the existence, cleanup, and/or remedy of
contamination on property, (b) the protection of human health, safety or the environment from
Hazardous Substances or spilled, deposited, or otherwise emplaced contamination; (c) the control of
hazardous wastes; or (d) the management, use, generation, transport, treatment, removal, or recovery
of or exposure to, Hazardous Substances, including building materials.
"Assigned Rights" means all of the Authority's rights under this Lease as lessor of the
Leased Property (excepting only the Authority's rights under Section 7.3 of this Lease and its rights
to notice under the Site Lease and this Lease), including, but not limited to the right to receive and
enforce payment of the Lease Payments to be made by the City hereunder, and as lessee of the
Leased Property under the Site Lease, as more particularly described in the Assignment Agreement,
that are assigned and transferred by the Authority to the Trustee for the benefit of the Original
Purchaser pursuant to the Assignment Agreement.
"Assignment Agreement" means the Assignment Agreement, dated as of January 1, 2018,
by and between the Authority, as assignor, and the Trustee, as assignee, as originally executed or as
thereafter amended under any duly authorized and executed amendments thereto.
"Authority" means the San Bernardino Joint Powers Financing Authority, a joint powers o
agency that is duly organized and existing under and by virtue of the laws of the State of California. �
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"Bond Counsel" means any attorney or firm of attorneys of nationally recognized expertise
and acceptable to the Original Purchaser with respect to legal matters relating to obligations the
interest on which is excludable from gross income under Section 103 of the Tax Code.
"Bonds" means the Series 2018 Bonds and any Additional Bonds issued pursuant to the
Indenture.
"Business Day" means a day other than a Saturday, Sunday or legal holiday, on which
banldng institutions are not closed in the State of California.
"City" means the City of San Bernardino, a municipal corporation and charter city that is
duly organized and existing under and by virtue of the laws of the State of California.
"Closing Date" means the date of execution and delivery of this Lease by the parties hereto,
being January 2018.
"Event of Default" means any of the events of default as defined in Section 8.1.
"Facilities" means all buildings and other improvements at any time situated on the Leased
Property.
"Federal Securities" means any direct general non -callable obligations of the United States
of America (including obligations that are issued or held in book entry form on the books of the
Department of the Treasury of the United States of America), or obligations the timely payment of
principal of and interest on which are directly guaranteed by the United States of America.
"Fiscal Year" means each twelve-month period during the Term of this Lease commencing
on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any LL
other twelve-month period selected by the City as its fiscal year period. m
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"Hazardous Substance" means any substance that shall, at any time, be listed as
a
"hazardous" or "toxic" pursuant to any Applicable Environmental Law or that has been or shall be =
determined at any time by any agency or court to be a hazardous or toxic substance regulated under
Applicable Environmental Laws; including, without limitation, raw materials, building components,
the products of any manufacturing, or other activities on the facilities, wastes, petroleum, asbestos,
In
and source, special nuclear, or by-product material as defined by the Atomic Energy Act of 1954, as
amended (42 USC Section 3011 et seq.).
"Indenture" means the Indenture, dated as of January 1, 2018, by and among the City, the
Authority and the Trustee.
"Lease" means this Lease Agreement, dated as of January 1, 2018, by and between the
Authority, as lessor, and the City, as lessee, as originally executed or as thereafter amended under
any duly authorized and executed amendments hereto.
"Lease Payment" means all payments that are required to be paid by the City under
Section 4.4, including any prepayments thereof under Section 9.2 or 9.3.
"Lease Payment Date" means July 1, 2018 and each January 1 and July 1 thereafter,
continuing to and including the date on which the Lease Payments are paid in W.
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"Lease Servicer" has the meaning that is set forth in Section 7.4 hereof
"Leased Property" means the real property which is more particularly described in
Appendix A. together with the improvements thereon. From and after the date of any substitution of
property under Section 4.7 or release of property under Section 4.8, the term "Leased Property"
means the real property which remains subject to this Lease following such substitution or release.
"Maximum Lease Term" has the meaning that is set forth in Section 4.3.
"Net Proceeds" means amounts that are derived from any policy of casualty insurance or
title insurance with respect to the Leased Property, or the proceeds of any taking of the Leased
Property or any portion thereof in eminent domain proceedings (including sale under threat of such
proceedings), to the extent remaining after payment therefrom of all expenses incurred in the
collection and administration thereof.
"1996 Bonds" means the San Bernardino Joint Powers Financing Authority Lease Revenue
Refimding Bonds (City Hall Project) Series 1996.
"Original Purchaser" means Western Alliance Business Trust, a wholly owned affiliate of
Western Alliance Bank, an Arizona corporation, and its successors and assigns.
"Permitted Encumbrances" means, as of any time: (a) liens for general ad valorem taxes
and assessments, if any, which are not then delinquent, or which the City may permit to remain
unpaid under Section 5.1 of this Lease; (b) the Site Lease, this Lease and the Assignment Agreement;
(c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected
in the manner prescribed by law; (d) the exceptions that are disclosed in the title insurance policy
which is required by Section 5.7 with respect to the Leased Property issued as of the Closing Date;
and (e) any easements, rights of way, mineral rights, drilling rights and other rights, reservations,
covenants, conditions or restrictions which exist of record and which the City certifies in writing will
not materially impair the use of the Leased Property for its intended purposes and will not materially
impair the security granted to the Trustee for the benefit of the owners of the Bonds by the Indenture.
"Project" means the improvements that were previously financed and refinanced from
proceeds of the 1996 Bonds and which are being refinanced from proceeds of the Series 2018 Bonds.
"Series 2018 Bonds" means the San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds issued pursuant to the Indenture.
"Servicer" means Western Alliance Business Trust, a wholly owned affiliate of Western
Alliance Bank, an Arizona corporation, acting as servicer.
"Site Lease" means the Lease Agreement (Site Lease), dated as of January 1, 2018, by and
between the City and the Authority.
"Tax Code" means the Internal Revenue Code of 1986 as in effect on the Closing Date or
(except as otherwise referenced herein) as it may be amended to apply to obligations issued on the
Closing Date, together with applicable proposed, temporary and final regulations promulgated, and
applicable official public guidance published, under the Tax Code.
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"Term of this Lease" or "Term" means the time during which this Lease is in effect, as
provided in Section 4.3.
"Termination Date" means January 1, 2023, unless extended or sooner terminated as
provided in Section 4.3.
"Trustee" means U.S. Bank National Association, as trustee under the Indenture, or any
successor thereto that is appointed in accordance with the Indenture.
Section 1.2 Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular
include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for
convenience only and includes all genders, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are
solely for convenience of reference, do not constitute a part hereof and do not affect the meaning,
construction or effect hereof,
(c) All references herein to "Articles," "Sections" and other subdivisions are to
the corresponding Articles, Sections or subdivisions of this Lease; the words "herein," "hereof,"
"hereby," "hereunder" and other words of similar import refer to this Lease as a whole and not to any
particular Article, Section or subdivision hereof.
ARTICLE II
COVENANTS, REPRESENTATIONS AND WARRANTIES c
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Section 2.1 Covenants, Representations and Warranties of the City. The City makes m
the following covenants, representations and warranties to the Authority as of the date of the o
execution and delivery of this Lease: a
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(a) Due Organization and Existence. The City is a municipal corporation and
charter city that is duly organized and validly existing under and by virtue of the laws of the State of
California, has full legal right, power and authority under the laws of the State of California to enter
into the Indenture, the Site Lease and this Lease and to carry out and consummate all transactions T
that are contemplated thereby and hereby, and by proper action the City has duly authorized the
execution and delivery of the Indenture, the Site Lease and this Lease. w
(b) Due Execution. The representatives of the City who execute the Indenture,
the Site Lease and this Lease have been fully authorized to execute the same under a resolution duly
adopted by the City Council of the City.
(c) Valid. Bindin, and Enforceable Obligations. The Indenture, Site Lease and
this Lease have each been duly authorized, executed and delivered by the City and each constitutes
the legal, valid and binding agreement of the City enforceable against the City in accordance with its
terms.
(d) No Conflicts. The execution and delivery of the Indenture, Site Lease and
this Lease, the consummation of the transactions that are contemplated therein and herein and the
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fulfillment of or compliance with the terms and conditions thereof and hereof do not and will not
conflict with or constitute a violation or breach of or default (with due notice or the passage of time
or both) under any applicable law, administrative Wile or regulation, or any applicable court or
administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other
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agreement or instrument to which the City is a party or which it or its properties are otherwise subject
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to or bound by, 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 City, which conflict, violation,
breach, default, lien, charge or encumbrance would have consequences that would materially and
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adversely affect the consummation of the transactions that are contemplated by the Site Lease or this7.51
Lease or the financial condition, assets, properties or operations of the City.
(e) Consents and Ar)nrovals. No consent or approval of any trustee or holder of
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any indebtedness of the City or of the voters of the City, and no consent, permission, authorization,
order or license of, or filing or registration with, any governmental authority is necessary in
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connection with the execution and delivery by the City of the Indenture, the Site Lease and this
Lease, or the consummation of any transaction contemplated therein or herein, except as have been,
obtained or made and as are in full force and effect, or except as would not materially adversely
affect the transactions that are contemplated hereby.
(f) No Liti4ration. There is no action, suit, proceeding, inquiry or investigation
before or by any court or federal, state, municipal or other governmental authority pending or, to the
knowledge of the City after reasonable investigation, threatened against or affecting the City or the
assets, properties or operations of the City which, if determined adversely to the City or its interests,
would have a material and adverse effect upon the consummation of the transactions that are
contemplated by, or the validity of, the Indenture, the Site Lease or this Lease or upon the financial
condition, assets, properties or operations of the City, and the City 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
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or other governmental authority, which default might have consequences that would materially and
adversely affect the consummation of the transactions that are contemplated by the Indenture, the
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Site Lease or this Lease, or the financial condition, assets, properties or operations of the City.
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(g) Essential Pu Mose. The Leased Property and the refinancing of the Project
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pursuant to this Lease and the Indenture serve an essential governmental function of the City and are
in the best interests of the City.
(h) Bim. The obligations of the City under this Lease, including without
limitation the obligation to make Lease Payments, are obligations that are payable from lawfully
available funds of the City, including available amounts in the City's General Fund.
(i) Available Funds. The City has funds available for the payment of Lease
Payments due during the current Fiscal Year and reasonably believes that sufficient funds can be
obtained to make all Lease Payments and payments of other amounts required to be paid hereunder.
Section 2.2 Covenants, Representations and Warranties of the Authority. The
Authority makes the following covenants, representations and warranties to the City as of the date of
the execution and delivery of this Lease:
(a) Due Or4anization and Existence. The Authority is a joint powers agency that
is organized and existing under and by virtue the laws of the State of California, has full legal right,
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power and authority to enter into the Indenture, the Site Lease, this Lease and the Assignment
Agreement and to carry out and consummate all transactions that are contemplated hereby and
thereby, and by proper action the Authority has duly authorized the execution and delivery of the
Indenture, the Site Lease, this Lease and the Assignment Agreement.
(b) Due Execution. The representatives of the Authority who execute the
Indenture, the Site Lease, this Lease and the Assignment Agreement are fully authorized to execute
such documents under official action taken by the Board of Directors of the Authority.
(c) Valid. Binding and Enforceable Obli,ations. The Indenture, the Site Lease,
this Lease and the Assignment Agreement have been duly authorized, executed and delivered by the
Authority and constitute the legal, valid and binding agreements of the Authority, enforceable against
the Authority in accordance with their respective terms.
(d) No Conflicts. The execution and delivery of the Indenture, the Site Lease, s
this Lease and the Assignment Agreement, the consummation of the transactions that are
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contemplated herein and therein and the fulfillment of or compliance with the terms and conditions =
hereof and thereof do not and will not conflict with or constitute a violation or breach of or default c
(with due notice or the passage of time or both) under any applicable law or administrative rule or S
regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, a
deed of trust, lease, contract or other agreement or instrument to which the Authority is a party or by
which it or its properties are otherwise subject or bound, or result in the creation or imposition of any z
prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets
of the Authority, which conflict, violation, breach, default, lien, charge or encumbrance would have
consequences that would materially and adversely affect the consummation of the transactions that
are contemplated by the Indenture, the Site Lease, this Lease or the Assignment Agreement or the
financial condition, assets, properties or operations of the Authority. _
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(e) Consents and Approvals. No consent or approval of any trustee or holder of m
any indebtedness of the Authority, and no consent, permission, authorization, order or license of, or, a
filing or registration with, any governmental authority is necessary in connection with the execution
and delivery by the Authority of the Indenture, the Site Lease, this Lease or the Assignment
Agreement, or the consummation of any transaction that is contemplated herein or therein, except as
have been obtained or made and as are in full force and effect, or except as would not materially
adversely affect the transactions that are contemplated hereby.
(f) No Lii kation. There is no action, suit, proceeding, inquiry or investigation
before or by any court or federal, state, municipal or other governmental authority pending or, to the
knowledge of the Authority after reasonable investigation, threatened against or affecting the
Authority or the assets, properties or operations of the Authority which, if determined adversely to
the Authority or its interests, would have a material and adverse effect upon the consummation of the
transactions that are contemplated by or the validity of the Indenture, the Site Lease, this Lease or the
Assignment Agreement, or upon the financial condition, assets, properties or operations of the
Authority, and the Authority 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 that are contemplated by the Indenture, the Site Lease, this Lease or the Assignment
Agreement or the financial condition, assets, properties or operations of the Authority.
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Section 2.3 No Financial Advisory or Fiduciary Relationship. Inasmuch as this Lease
represents a negotiated transaction, each of the City and the Authority understands, and hereby
confirms, that the Original Purchaser is not acting as a fiduciary of the City or the Authority, but
rather is acting solely in its capacity as Original Purchaser, for its own account. Each of the City and
the Authority acknowledges and agrees that: (i) the transaction that is contemplated herein and in the
Indenture is an arm's length commercial transaction among the City, the Authority and the Original
Purchaser and its affiliates; (ii) in connection with such transaction, the Original Purchaser and its
affiliates are acting solely as principals and not as advisors including, without limitation, "Municipal
Advisors" as such term is defined in Section 15B of the Securities and Exchange Act of 1934, as
amended, and the related final rules (the "Municipal Advisor Rules'); (iii) the Original Purchaser
and its affiliates are relying on the bank exemption in the Municipal Advisor Rules; (iv) the Original
Purchaser and its affiliates have not provided any advice or assumed any advisory or fiduciary
responsibility in favor of the City or the Authority with respect to the transaction contemplated
hereby and the discussions, undertakings and procedures leading thereto (whether or not the Original
Purchaser, or any affiliate thereof, has provided other services or advised, or is currently providing
other services or advising the City or the Authority on other matters); (v) the Original Purchaser and
its affiliates have financial and other interests that differ from those of the City and the Authority,
and (vi) each of the City and the Authority has consulted with its own financial, legal, accounting,
tax and other advisors, as applicable, to the extent that it deemed appropriate.
ARTICLE III
DEPOSIT AND APPLICATION OF FUNDS
As provided in the Indenture, the proceeds therefrom in the amount of $ will be
deposited and applied as follows: (a) $ will be delivered to the Trustee and applied to pay the
costs of the refinancing of the Project; and (b) $ will be delivered to U.S. Bank National
Association, as trustee for the 1996 Bonds, for the purpose of refunding and defeasing the 1996
Bonds.
ARTICLE IV
LEASE OF LEASED PROPERTY; LEASE PAYMENTS
Section 4.1 Lease of Leased Property by Authority to City. For and in consideration
of the application by the Authority of funds in accordance with Article III, the City has leased the
Leased Property to the Authority under the Site Lease. For and in consideration of the Lease
Payments to be made by the City hereunder, the Authority hereby leases the Leased Property to the
City and the City hereby leases the Leased Property from the Authority, pursuant to this Lease upon
the terms and provisions hereof.
Section 4.2 Reserved.
Section 4.3 Term. The Term of this Lease shall commence on the Closing Date and shall
end on the Termination Date, unless such Term is extended or sooner terminated as hereinafter
provided. If on the Termination Date the Bonds shall not be fully paid, or provision therefor made in
accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if
the Lease Payments shall remain due and payable or shall have been abated at any time and for any
reason remain due and owing, then the term of this Lease shall be extended until the date upon
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which: (a) all Bonds shall be fully paid, or provision therefor made in accordance with Article X of
the Indenture; or (b) the Indenture shall be discharged by its terms and all Bonds shall have been paid
in full. Notwithstanding the foregoing, the term of this Lease shall in no event be extended more
than ten years beyond 1, 20_, such extended date being the "Maximum Lease Term." If prior
to the final Termination Date, all Bonds shall be fully paid, or provision therefor made in accordance
with Article X of the Indenture, the Indenture shall be discharged by its terms and all Lease
Payments shall have been paid in full, and the term of this Lease shall end simultaneously therewith.
Section 4A Lease Payments.
(a) Obligation to Pa,. Subject to the provisions of Section 6.3 and Article IX, the
City agrees to pay to the Authority, its successors and assigns, the Lease Payments (denominated into
components of principal and interest) in the respective amounts that are specified in Appendix B
(including any supplements thereto), to be due and payable in immediately available funds on each of
the respective Lease Payment Dates that are specified in Appendix B. The Lease Payments that are
payable in any Rental Period with respect to the Leased Property shall be for the use of the Leased
Property during such Rental Period. The interest components of the Lease Payments have been
calculated based on an interest rate of _% per annum, on the basis of a 360 day year of twelve 30
day months.
(b) Effect of Pre_paX. hent. If the City prepays all Lease Payments in full under
Article IX, the City's obligations under this Section will thereupon cease and terminate. If the City
prepays the Lease Payments in part but not in whole under Section 9.3, amounts so paid in respect of
principal components shall be applied by the Authority as prepayment to the remaining unpaid
principal components of the Lease Payments owing hereunder and the remaining Lease Payments
will be reduced on a pro rata basis.
(c) Rate on Overdue Pa\_f i 1 eats. If the City fails to make any of the payments
required in this Section 4.4, the payment in default will continue as an obligation of the City until the
amount in default has been fully paid, and the City agrees to pay the same with interest thereon, from
the date of default to the date of payment at a rate equal to the lesser of. (a) 8.00% per annum; and
(b) the maximum rate permitted by law.
(d) Fair Rental Value. The Lease Payments coming due and payable during each
Rental Period constitute the total rental for the Leased Property for such Rental Period, and will be
paid by the City in each Rental Period for and in consideration of the right of the use and occupancy,
and the continued quiet use and enjoyment, of the Leased Property during each Rental Period. The
parties hereto have agreed and determined that the total Lease Payments that are due in each Rental
Period are not in excess of the fair rental value of the Leased Property in the corresponding Rental
Period. In making this determination, consideration has been given to the estimated fair market value
of the Leased Property, the replacement costs of the Leased Property, other obligations of the City
and the Authority under this Lease, the uses and purposes which may be served by the Leased
Property and the benefits therefrom which will accrue to the City and the general public.
(e) Source of Fay mems: Budget and Au�m�riation. The Lease Payments are
payable from any source of legally available funds of the City, subject to the provisions of
Sections 6.3 and 9.1. The City covenants to take such action as may be necessary to include all
Lease Payments in each of its annual budgets during the Term of this Lease and to make the
necessary annual appropriations for all such Lease Payments. The covenants on the part of the City
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herein contained constitute duties imposed by law and it is the duty of each and every public official
of the City to take such action and do such things as are required by law in the performance of the
official duty of such officials to enable the City to carry out and perform the covenants and
agreements in this Lease agreed to be carried out and performed by the City.
Section 4.5 Quiet Enjoyment. Throughout the Term of this Lease, the Authority will
provide the City with quiet use and enjoyment of the Leased Property and the City will peaceably
and quietly have, hold and enjoy the Leased Property, without suit, trouble or hindrance from the
Authority, except as expressly set forth in this Lease. The Authority will, at the request of the City
and at the City's cost, join in any legal action in which the City asserts its right to such possession
and enjoyment to the extent that the Authority may lawfully do so. Notwithstanding the foregoing,
the Authority has the right to inspect the Leased Property as provided in Section 7.2.
Section 4.6 Title. At all times during the Term of this Lease, the Authority shall hold
leasehold title to the Leased Property, including all additions which comprise fixtures, repairs,
replacements or modifications thereto, subject to Permitted Encumbrances and the provisions of
Section 8.2.
Upon the termination of this Lease (other than under Section 8.2(b)), all right, title and
interest of the Authority in and to the Leased Property shall be transferred to and vested in the City.
Upon the payment in full of all Lease Payments allocable to the Leased Property, or upon the deposit
by the City of security for such Lease Payments as provided in Section 9. 1, all right, title and interest
of the Authority in and to the Leased Property shall be transferred to and vested in the City. The
Authority agrees to take any and all steps and to execute and record any and all documents that are
reasonably required by the City to consummate any such transfer of title.
Section 4.7 Substitution of Property. With the prior written consent of the Original
Purchaser, which consent shall not be unreasonably withheld or delayed, the City may substitute
other land, facilities or improvements (the "Substitute Property") for the Leased Property or any
portion thereof (the "Former Property"), provided that the City has satisfied all of the following
requirements, which are hereby declared to be conditions precedent to such substitution:
(a) The City has certified to the Authority and the Original Purchaser that no
Event of Default has occurred and is continuing.
(b) The City has filed with the Authority and the Original Purchaser, and caused
to be recorded in the Office of the San Bernardino County Recorder sufficient memorialization of an
amended A e�ndix A to this Lease which adds thereto a description of such Substitute Property and
deletes therefrom the description of such Former Property.
(c) The City has obtained an ALTA or CLTA policy of title insurance, naming
the Servicer, the Trustee and the Original Purchaser as additional insureds, which insures the
Authority's leasehold estate in such Substitute Property, in an amount at least equal to the
outstanding aggregate principal amount of the Bonds that remain unpaid as of the substitution date.
(d) The City has certified in writing to the Authority and the Original Purchaser
that such Substitute Property is essential to the City's efficient and economic operation, serves an
essential governmental function of the City and constitutes property which the City is permitted to
lease under the laws of the State of California.
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(e) The substitution of the Substitute Property for the Former Property does not
cause the City to violate any of its covenants, representations and warranties herein. No event giving
rise to an abatement of Lease Payments has occurred or is continuing with respect to the Substitute
Property.
(f) The City has certified in writing to the Authority and the Original Purchaser
that the estimated value of the Substitute Property is at least equal to the outstanding aggregate
principal of the Bonds that remains unpaid as of the substitution date, and that the useful life of the
Substitute Property extends to or beyond the final maturity date of the Bonds. If requested by the
Original Purchaser, the City has delivered to the Original Purchaser valuations of the Substitute
Property that are prepared or confirmed by an independent third party, which might include, without
limitation, an appraisal or a valuation by an insurance company.
(g) The City has delivered to the Authority and the Original Purchaser an opinion
of Bond Counsel to the effect that such substitution of Leased Property will not, in and of itself,
cause the interest on the Bonds to be included in gross income for federal income tax purposes.
Upon written consent of the Original Purchaser and the satisfaction of all conditions that are
precedent to any substitution under this Section 4.7, the Term of this Lease will thereupon end as to
the Former Property and commence as to the Substitute Property. The Authority and the City shall
execute, deliver and cause to be recorded all documents that are required to discharge the Site Lease,
this Lease and the Assignment Agreement of record against the Former Property.
Section 4.8 Release of Property. With the prior written consent of the Original 1%,
Purchaser m its sole and absolute discretion, the City may release any portion of the Leased Property
from this Lease (the "Released Property") provided that the City has satisfied all of the following
requirements, which are hereby declared to be conditions precedent to such release: _
a
(a) The City has certified to the Authority and the Original Purchaser that no m
Event of Default has occurred and is continuing. d
(b) The City has filed with the Authority and the Original Purchaser, and caused
to be recorded in the Office of the San Bernardino County Recorder sufficient memorialization of an ..
amendment hereof which removes the Released Property from this Lease. M
(c) The City has certified in writing to the Authority and the Original Purchaser
that the value of the property which remains subject to this Lease following such release is at least
equal to outstanding aggregate principal of the Bonds that remain unpaid as of the release date. If v
requested by the Original Purchaser, the City has delivered to the Original Purchaser valuations that z
are prepared or confirmed by an independent third party, which might include, without limitation, an z
appraisal or a valuation by an insurance company.
(d) The City has delivered to the Authority and the Original Purchaser a written
opinion of Bond Counsel to the effect that such release of Leased Property will not, in and of itself;
cause the interest on the Bonds to be included in gross income for federal income tax purposes,
Upon written consent of the Original Purchaser and the satisfaction of all such conditions
precedent, the Term of this Lease will thereupon end as to the Released Property. The City is not
entitled to any reduction, diminution, extension or other modification of the Lease Payments
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whatsoever as a result of such release. The Authority and the City shall execute, deliver and cause to
be recorded all documents that are required to discharge the Site Lease, this Lease and the
Assignment Agreement of record against the Released Property.
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.1 Maintenance, Utilities, Taxes and Assessments. Throughout the Term of
this Lease, as part of the consideration for the rental of the Leased Property, all improvement, repair
and maintenance of the Leased Property are the sole responsibility of the City, and the City will pay
for or otherwise arrange for the payment of all utility services that are supplied to the Leased
Property, which may include, without limitation, janitor service, security, power, gas, telephone,
light, heating, water and all other utility services, and shall pay for or otherwise arrange for the
payment of the cost of the repair and replacement of the Leased Property resulting from ordinary
wear and tear or want of care on the part of the City or any assignee or sublessee thereof on the part
of the City or any assignee. In exchange for the Lease Payments, the Authority agrees to provide
only the Leased Property, as hereinbefore more specifically set forth. The City waives the benefits of
Sections 1932(1), 1932(2), 1933(4), 1941 and 1942 of the California Civil Code, but such waiver
does not limit any of the rights of the City under the terms of this Lease.
The City shall not use, operate, or maintain the Leased Property (or cause the Leased
Property to be used, operated or maintained) improperly, carelessly, in violation of any applicable
laws or in a manner which is contrary to that contemplated hereby. The City shall provide all permits
and licenses, if any, which are necessary for the Leased Property. In addition, the City agrees to
comply in all respects with all applicable laws, regulations and rulings of any legislative, executive,
administrative, or judicial body, including, without limitation, all anti -money laundering laws and
regulations; provided that the City may contest in good faith the validity or application of any such
law, regulation or ruling in any reasonable manner that does not, in the opinion of the Authority,
adversely affect the interest of the Authority in and to the Leased Property or its interest or rights
hereunder.
The City will pay or cause to be paid all taxes and assessments of any type or nature, if any,
that are charged to the Authority or the City which affect the Leased Property or the respective
interests or estates therein; provided that with respect to special assessments or other governmental
charges that may lawfully be paid in installments over a period of years, the City is obligated to pay
only such installments as are required to be paid during the Term of this Lease as and when the same
become due.
The City may, at the City's expense and in its name, in good faith contest any such taxes,
assessments, utility and other charges and, in the event of any such contest, may permit the taxes,
assessments or other charges so contested to remain unpaid during the period of such contest and any
appeal therefrom unless the Authority shall notify the City that, in its reasonable opinion, by
nonpayment of any such items the interest of the Authority in the Leased Property will be materially
endangered or the Leased Property or any part thereof will be subject to loss or forfeiture, in which
event the City will promptly pay such taxes, assessments or charges or provide the Authority with
full security against any loss which may result from nonpayment, in form satisfactory to the
Authority.
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Section 5.2 Modification of Leased Property. The City has the right, at its own
expense, to make additions, modifications and improvements to the Leased Property or any portion
thereof. All additions, modifications and improvements to the Leased Property will thereafter
comprise part of the Leased Property and become subject to the provisions of this Lease. Such
additions, modifications and improvements may not in any way damage the Leased Property or cause
the Leased Property to be used for purposes other than those which are authorized under the
provisions of state and federal law; and the Leased Property, upon completion of any additions,
modifications and improvements made thereto under this Section, must be of a value which is not
substantially less than the value thereof immediately prior to the making of such additions,
modifications and improvements. The City will not permit any mechanic's or other lien to be
established or to remain against the Leased Property for labor or materials that are furnished in
connection with any remodeling, additions, modifications, improvements, repairs, renewals or
replacements made by the City under this Section; provided that if any such lien is established and
the City first notifies the Authority of the City's intention to do so, the City may in good faith contest
any lien that is filed or established against the Leased Property, and in such event may permit the
items so contested to remain undischarged and unsatisfied during the period of such contest and any
appeal therefrom and will provide the Authority with full security against any loss or forfeiture which
might arise from the nonpayment of any such item, in form satisfactory to the Authority. The
Authority will cooperate fully in any such contest, upon the request and at the expense of the City.
Section 5.3 Public Liability Insurance. The City shall maintain or cause to be L
maintained throughout the Term of this Lease a standard comprehensive general insurance policy or
policies in protection of the City, the Authority and their respective members, officers, agents, a
employees and assigns. Said policy or policies shall provide for indemnification of said parties �+
against direct or contingent loss or liability for damages for bodily and personal injury, death or
property damage occasioned by reason of the operation of the Leased Property. Such policy or
policies must provide coverage of at least $1,000,000 per occurrence, $3,000,000 in aggregate and w
$5,000,000 excess liability and may be subject to such deductibles as the City deems adequate and
prudent. Such insurance may be maintained as part of or in conjunction with any other insurance c
coverage carried by the City, and may be maintained in whole or in part in the form of the a
participation by the City in a joint powers authority or other program providing pooled insurance. _
The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of
the liability with respect to which such proceeds have been paid.
M
Section 5.4 Casualty Insurance; Flood Coverage.
(a) Requirement to Maintain Casualty Insurance. The City will procure and
maintain, or cause to be procured and maintained, throughout the Term of this Lease, casualty
insurance against loss or damage to the Facilities by fire and lightning, with extended coverage
insurance, vandalism and malicious mischief insurance and sprinkler system leakage insurance. Said
extended coverage insurance shall cover loss or damage by fire, explosion, windstorm, riot, aircraft,
vehicle damage, smoke and such other hazards as are normally covered by such insurance, including
earthquake coverage if such coverage is available at commercially reasonable cost from a reputable
insurer in the reasonable determination of the City. Such insurance shall be in an amount at least
equal to the greater of (i) the replacement value of the insured Facilities; or (ii) the aggregate unpaid
principal components of the Lease Payments, and may be subject to such deductibles as the City
deems adequate and prudent. Such insurance may be maintained as part of or in conjunction with
any other insurance coverage that is carried by the City, and may be maintained in whole or in part in
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the form of the participation by the City in a joint powers authority or other program of pooled
insurance. The City will apply the Net Proceeds of such insurance as provided in Article VI.
(b) Flood Insurance. If at any time and for so long as the Leased Property is
located in a 100 year flood area as shown on a Flood Insurance Rate Map published by the Federal
Emergency Management Agency, the policy or policies of casualty insurance that are provided under
this Section 5.4 shall include insurance against loss or damage to the Facilities due to flooding. If the
City obtains an exception or waiver to the designation of the Facilities as being within a 100 year
flood area from the Federal Emergency Management Agency, the City shall not be required to
provide flood insurance as set forth in this subsection (b).
(c) Federal or State Disaster Aid. Should the Facilities be damaged or destroyed
as a result of an event for which federal or State of California disaster aid is available, the Authority
and/or the City shall promptly apply for disaster aid. Any disaster aid proceeds which are received
shall be used to repair, reconstruct, restore or replace the damaged or destroyed portions of the
Facilities, or, at the option of the City and the Authority, to prepay the Lease Payments if permitted
under the disaster aid program and the law.
(d) Self -Insurance. As an alternative to providing the insurance required by this
Section, the City may provide a self-insurance method or plan of protection if and to the extent that
such self-insurance method or plan of protection: (i) affords reasonable coverage for the risks that are
required to be insured against, in light of all circumstances, giving consideration to cost, availability
and similar plans or methods of protection adopted by public entities in the State of California other
than the City; and (ii) has been approved in writing by the Original Purchaser. Before such other
method or plan may be provided by the City, and annually thereafter so long as such method or plan
is being provided to satisfy the requirements of this Lease, there shall be filed with the Authority and
the Original Purchaser a certificate of an actuary, insurance consultant or other qualified person (who
may be an employee of the City), stating that, in the opinion of the signer, the substitute method or
plan of protection is in accordance with the requirements of this Section and, when effective, would
afford reasonable coverage for the risks that are required to be insured against and is sufficiently
funded to afford such coverage. There shall also be filed a certificate of the City which sets forth the
details of such substitute method or plan. In the event of a loss that is covered by any such self-
insurance method, the liability of the City hereunder shall be limited to the amounts in the self-
insurance reserve fund or funds created under such method.
Section 5.5 Rental Interruption Insurance. The City shall procure and maintain, or
cause to be procured and maintained, throughout the Term of this Lease, rental interruption or use
and occupancy insurance to cover loss, total or partial, of the use of the Leased Property as a result of
any of the hazards covered in the insurance required by Section 5.4, in an amount at least equal to the
maximum Lease Payments coming due and payable during any firture 24 month period. Such
insurance may be maintained as part of or in conjunction with any other insurance coverage that is
carried by the City, and may be maintained in whole or in part in the form of the participation by the
City in a joint powers authority or other program providing pooled insurance. Such rental
interruption or use and occupancy insurance shall not be self-insured and the City acknowledges that
this requirement may limit its ability to self -insure under Section 5.4. The City will apply the Net
Proceeds of such insurance towards the payment of the Lease Payments as the same become due and
payable.
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Section 5.6 Worker's Compensation Insurance. So long as required by law, the City
shall carry worker's compensation insurance covering all employees on, in, near or about the Leased
Property and, upon request, shall furnish to the Authority certificates that evidence such coverage
throughout the Term of this Lease.
Section 5.7 Recordation Hereof; Title Insurance. On or before the Closing Date, the
City shall, at its expense: (a) cause the Assignment Agreement, the Site Lease and this Lease, or a
memorandum hereof, to be recorded in the office of the San Bernardino County Recorder with
respect to the Leased Property; and (b) obtain an ALTA or CLTA policy of title insurance, naming
both the Servicer and the Original Purchaser as insureds, which insures the Authority's leasehold
estate established under the Site Lease in the Leased Property, subject only to Permitted
Encumbrances, in an amount equal to the original aggregate principal amount of the Series 2018
Bonds. The City shall apply the Net Proceeds that are received under such title insurance policy to
prepay the remaining Lease Payments under Section 9.3.
Section 5.8 Form of Policies. All insurance policies (or riders) that are required by this a,
Article V shall be taken out and maintained with responsible insurance companies that are organized N
under the laws of one of the states of the United States and qualified to do business in the State of .o
California, and shall contain a provision that the insurer shall not cancel or revise coverage JZ
thereunder without giving written notice to the insured parties at least ten days before the a
cancellation or revision becomes effective. Each insurance policy or rider that is required by
Sections 5.3, 5.4 and 5.5 shall name the City as the insured and loss payee and the Original Purchaser °
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as additional insured and shall include a lender's loss payable endorsement for the benefit of the
Original Purchaser. Prior to the Closing Date, the City will deposit with the Original Purchaser .a
policies (and riders and endorsements, if applicable) which evidence any such insurance that is
procured by the City, or a certificate or certificates of the respective insurers which state that such
insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will;S
furnish to the Original Purchaser evidence that the policy has been renewed or replaced by another
policy which conforms to the provisions of this Article V unless such insurance is no longer I
obtainable, in which event the City shall notify the Original Purchaser of such fact. ao
Section 5.9 Installation of City's Personal Property. The City may at any time and
from time to time, in its sole discretion and at its own expense, install or permit to be installed other
items of equipment or other personal property in or upon the Leased Property. All such items shall,
remain the sole property of the City, in which the Authority has no interest, and may be modified or
removed by the City at any time. The City must repair and restore any and all damage to the Leased
Property resulting from the installation, modification or removal of any such items. Nothing in this w
Lease prevents the City from purchasing or leasing items to be installed under this Section under a z
lease or conditional sale agreement, or subject to a vendor's lien or security agreement, as security
for the unpaid portion of the purchase price thereof, provided that no such lien or security interest U.
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may attach to any part of the Leased Property. a
Section 5.10 Liens. The City will not, directly or indirectly, create, incur, assume or suffer
to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Leased
Property, other than Permitted Encumbrances and such other encumbrances as the City certifies in
writing to the Authority do not materially and adversely affect the leasehold estate in the Leased
Property hereunder and which the Original Purchaser approves in writing, which approval may not
be unreasonably withheld or delayed. Except as expressly provided in this Article V, the City will
promptly, at its own expense, take such action as may be necessary to duly discharge or remove any
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such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same
shall arise at any time. The City will reimburse the Authority for any expense that is incurred by the
Authority in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or
claim.
Section 5.11 Advances. If the City fails to perform any of its obligations under this
Article V, the Authority may take such action as may be necessary to cure such failure, including the
advancement of money, and the City shall be obligated to repay all such advances as Additional
Payments hereunder, with interest at the rate set forth in Section 4.4(c).
ARTICLE VI
DAMAGE, DESTRUCTION AND EMINENT DOMAIN;
USE OF PROCEEDS; ABATEMENT OF LEASE PAYMENTS
Section 6.1 Deposit of Net Proceeds. The Net Proceeds of any taking of the Leased
Property or any portion thereof in eminent domain proceedings, and the Net Proceeds of any policy
of insurance that is maintained under Section 5.4, shall be paid to the City to be applied as set forth in
Section 6.2. The Net Proceeds of any policy of insurance that is maintained under Section 5.5 shall
be paid to the City to be applied as set forth in Section 5.5.
Section 6.2 Application of Net Proceeds. If the Leased Property is taken in eminent
domain proceedings at any time during the Term of this Lease, or if the Leased Property is damaged
because of an insured casualty which is covered by a policy of insurance or a program of self-
insurance that is maintained under Section 5.4, the City shall as soon as practicable after such event,
with the prior written consent of the Original Purchaser, apply the Net Proceeds resulting therefrom
to one of the following:
(a) repair the Leased Property -to full use;
(b) replace the Leased Property, at the City's sole cost and expense, with w
property of equal or greater value to the Leased Property immediately prior to the time of such c
destruction or damage, such replacement Leased Property to be subject to the Original Purchaser's .'.
reasonable approval, whereupon such replacement shall be substituted in this Lease by appropriate
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endorsement;
(c) substitute additional property as provided in Section 4.7; or
(d) prepay the Lease Payments in accordance with Section 9.3.
The City will notify the Authority and the Original Purchaser of which course of action it has
elected to take within a reasonable time not to exceed 60 days after the occurrence of such eminent
domain proceedings or such destruction or damage. Such repair, replacement, substitution or
prepayment shall commence not later than 60 days after the occurrence of such taking, destruction or
damage and be pursued diligently to completion. The Authority may (but is not required to) in its
own name or in the City's name execute and deliver proofs of claim, receive all such moneys,
endorse checks and other instruments which represent payment of such moneys, and adjust, litigate,
compromise or release any claim against the issuer of any such policy, and the City hereby grants to
the Authority a power of attorney coupled with an interest to accomplish all or any of the foregoing.
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31.b
Section 6.3 Abatement Due to Damage or Destruction. Except as otherwise
specifically provided in this Section, during any period in which, by reason of material damage to, or
destruction (other than by eminent domain, which is provided for in Section 6.5) of, the Leased
Property, or any defect in title to the Leased Property, there is substantial interference with the City's
right to use and occupy any portion of the Lease Property, Lease Payments shall be abated
proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and
1933(4) and any and all other rights to terminate this Lease by virtue of any such interference, and
this Lease shall continue in full force and effect. The amount of such abatement shall be agreed upon
by the City and the Authority; provided that the Lease Payments due for any Rental Period shall not
exceed the annual fair rental value of that portion of the Leased Property that is available for use and
occupancy by the City during such Rental Period. The City and the Authority shall calculate such
abatement and shall provide the Original Purchaser with a certificate which sets forth such
calculation and the basis therefor. Such abatement shall continue for the period which commences
with the date of interference resulting from such damage, destruction or title defect and, with respect
to damage to or destruction of the Leased Property, ending with the substantial completion of the
work of repair or replacement of the Leased Property, or the portion thereof so damaged or
destroyed; and the term of this Lease shall be extended as provided in Section 4.3, except that the
term shall in no event be extended beyond the Maximum Lease Term.
Notwithstanding the foregoing, to the extent that moneys are available for the payment of a
Lease Payments in any of the fimds and accounts that are established under the Indenture or from Net
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Proceeds, Lease Payments shall not be abated as provided above but, rather, shall be payable by the r
City as a special obligation payable solely from said fiords and accounts or Net Proceeds. a
Section 6.4 Substitution of Property under Certain Circumstances. In the event of
damage to or destruction of all or a portion of the Leased Property due to uninsured casualty for
which the proceeds of rental interruption insurance are not available, promptly after the occurrence of
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such event, to the extent that such action will not cause this Lease to be invalid, the City Manager i
may bring forward a recommendation for City Council consideration to substitute and add as 3
additional Leased Property hereunder other real or personal property of the City that is unimpaired a°
and unencumbered, the fair rental value of which shall be at least equal to the Lease Payments that
are due during each Fiscal Year for the remainder of the Term, provided that any such addition and
substitution shall be subject to the approval of the City Council.
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Section 6.5 Termination or Abatement Due to Eminent Domain. If the Leased
Property is taken permanently under the power of eminent domain or sold to a government
threatening to exercise the power of eminent domain, the Term of this Lease will cease with respect w
thereto as of the day possession is so taken. If less than all of the Leased Property is taken z
permanently, or if the Leased Property is taken temporarily, under the power of eminent domain: a
(a) this Lease will continue in full force and effect with respect thereto and will not be terminated by
virtue of such taking and the parties waive the benefit of any law to the contrary; and (b) there will be w
a partial abatement of Lease Payments in an amount to be determined by the City such that the
resulting Lease Payments represent fair consideration for the use and occupancy of the remaining a
usable portions of the affected Leased Property. The abatement period shall end upon the earlier of z
restoration of beneficial use and enjoyment to the City of the Leased Property, replacement or
substitution thereof or prepayment of Lease Payments as provided herein. The City shall apply Net
Proceeds in accordance with Sections 6.2 and 6.3. c
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ARTICLE VII
OTHER COVENANTS OF THE CITY
Section 7.1 Disclaimer of Warranties. THE AUTHORITY MAKES NO
AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR FITNESS FOR THE USE THAT IS CONTEMPLATED BY THE
CITY OF THE LEASED PROPERTY OR ANY PORTION THEREOF, OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PROPERTY OR
ANY PORTION THEREOF. THE CITY ACKNOWLEDGES THAT THE AUTHORITY IS NOT
A MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER
THEREIN AND THAT THE CITY LEASES THE LEASED PROPERTY AS -IS, IT BEING
AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE
CITY. In no event will the Authority be liable for incidental, indirect, special or consequential
damages, in connection with or arising out of this Lease for the existence, furnishing, functioning or
use of the Leased Property by the City.
Section 7.2 Access to the Leased Property. The City agrees that the Authority, and the
Authority's successors or assigns, have the right at all reasonable times, following at least 48 hours
written notice provided to the City, to enter upon and to examine and inspect the Leased Property or
any part thereof. The City further agrees that the Authority, and the Authority's successors or
assigns, shall have such rights of access to the Leased Property or any component thereon following
at least 48 hours written notice provided to the City, as may be reasonably necessary to cause the
proper maintenance of the Leased Property if the City fails to perform its obligations hereunder.
Neither the Authority nor any of its assigns has any obligation to cause such proper maintenance.
Section 7.3 Release and Indemnification Covenants. The City hereby agrees, to the
extent not prohibited by applicable law, to indemnify and defend the Authority, the Original
Purchaser and their respective directors, officers, employees, agents, successors and assigns from and
against all claims, losses and damages, including legal fees and expenses, arising out of. (a) the use,
maintenance, condition or management of, or from any work or thing done on the Leased Property
by the City; (b) any breach or default on the part of the City in the performance of any of its
obligations under this Lease; (c) any negligence or willful misconduct of the City or of any of its
agents, contractors, servants, employees or licensees with respect to the Leased Property; (d) any
intentional misconduct or negligence of any sublessee of the City with respect to the Leased
Property; (e) the acquisition, construction, improvement and equipping of the Leased Property,
(f) the generation, use, presence, storage, disposal, abatement, management or clean-up of, or
exposure to, any Hazardous Substances or toxic wastes at, on, in or from the Leased Property; (g) the
City's failure to comply with any Applicable Environmental Laws; or (h) any loss of the federal
income tax exemption of the interest portion of Lease Payments, in any case, due to the City's or the
Authority's action or failure to take any action or the making by the City or the Authority of any
misrepresentation herein or in any certificate that is required to be given in connection with the
execution and delivery of this Lease and any interest, fines, penalties and additions to tax (including
all federal, state and local taxes that are imposed on the interest component of all Lease Payments
due through the date of such event) by the Internal Revenue Service on the Original Purchaser in
connection therewith, any such amount with respect to past Lease Payments to be paid to the Original
Purchaser in a single lump sum payment upon demand of the Original Purchaser, and any such
amount with respect to future Lease Payments to be paid as an increase in the interest component of
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Lease Payments such that the after-tax yield to the Original Purchaser shall remain the same
following the loss of the federal income tax exemption as it was before such loss of tax exemption;
provided, however, that in no event may such payments result in Lease Payments in any Rental
Period which exceed the fair rental value of the Leased Property in such Rental Period. No
indemnification is made under this Section or elsewhere in this Lease for willful misconduct or gross
negligence under this Lease by the Authority, the Original Purchaser or their respective officers,
agents, employees, successors or assigns.
Section 7.4 Assigument by the Authority. (a) The Authority has assigned and
transferred the Assigned Rights to the Trustee, on behalf of the Original Purchaser, pursuant to the
Assignment Agreement. The City hereby consents to such assignment and transfer. The Authority
hereby directs the City, and the City hereby agrees, to pay to the Trustee, on behalf of the Original
Purchaser, all payments payable by the City under Section 4.4 and all amounts payable by the City
under Article IX. Whenever in this Lease any reference is made to the Authority and such reference
concerns any Assigned Rights, such reference shall be deemed to refer to the Original Purchaser.
(b) The beneficial interest in the Assigned Rights, and all proceeds therefrom, N
may be further assigned and reassigned in whole or in part to one or more assignees or sub -assignees 'o
by the Original Purchaser (including, but not limited to, in connection with the creation of fractional
interests with institutional investors so long as such assignment complies with applicable State law), a
without the necessity of obtaining the consent of the City, provided that any such assignment, .2'�
transfer or conveyance: (i) shall be made only to investors each of whom is a "qualified institutional z
buyer" as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended (the a
"Securities Act") or an "accredited investor" as defined in Sections 501(a)(1), (2), (3) and (7) of
Regulation D promulgated under the Securities Act and is purchasing the Assigned Rights (or any
interest therein) for its own account with no present intention to resell or distribute the Assigned
Rights (or interest therein), subject to each investor's right at any time to dispose of the Assigned LL
Rights or any interest therein as it determines to be in its best interests; (ii) shall not result in more
than 35 owners of the beneficial interests in the Assigned Rights or the creation of any interest in the 3
Assigned Rights in an aggregate principal component that is less than $100,000; and (iii) shall not �°
require the City to make Lease Payments, send notices or otherwise deal with respect to matters
arising under this Lease with or to more than one trustee, owner, servicer or other fiduciary or agent
or entity (herein referred to as the "Lease Servicer") and any trust agreement, participation
agreement or custodial agreement under which multiple ownership interests in the Assigned Rights r,
are created shall provide the method by which the owners of such interests shall establish the rights
and duties of a single Lease Servicer to act on their behalf with respect to the Assigned Rights,
including with respect to the exercise of rights and remedies on behalf of such owners upon the w
occurrence of an Event of Default hereunder. The Authority (including the initial Original z
Purchaser) and the City hereby acknowledge and agree that the restrictions and limitations on z
transfer in this Section 7.4 shall apply to the first and subsequent assignees and sub -assignees of any a:
beneficial interests in the Assigned Rights (or any interest therein). �
(c) No assignment, transfer or conveyance permitted by this Section 7.4 that
changes the Lease Servicer or its payment instructions or mailing address shall be effective until the
City shall have received a written notice of assignment that discloses the name, payment instructions
and address of each such assignee; provided that if such assignment is made to a bank or trust
company as trustee or paying agent for owners of certificates of participation, trust certificates or
partnership interests evidencing interests in the Assigned Rights, it shall thereafter be sufficient that
the City receives notice of the name, payment instructions and address of such bank or trust company
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that acts as the Lease Servicer. During the Term of this Lease, the City shall keep, or cause to be
kept, a complete and accurate record of all such assignments in form necessary to comply with
Section 149 of the Tax Code. The City shall not have the right to, and shall not, assert against the
Original Purchaser or any successor thereto any claim, counterclaim or other right that the City may
have against the Authority. If the Original Purchaser notifies the City of its intent to assign the
Assigned Rights (or any interest therein) to a different Lease Servicer, the City agrees that it shall
execute and deliver to the requesting Original Purchaser a notice and acknowledgment of assignment
in form reasonably required by such Original Purchaser within five (5) business days after its receipt
of such request.
Section 7.5 Assignment and Subleasing by the City. This Lease may not be assigned
by the City. With the prior written consent of the Original Purchaser, the City may sublease the
Leased Property, or any portion thereof', subject to all of the following conditions:
(a) This Lease and the obligation of the City to make Lease Payments hereunder
shall remain obligations of the City.
(b) The City shall, within 30 days after the delivery thereof, fiunish or cause to
be furnished to the Authority and the Original Purchaser a true and complete copy of such sublease.
(c) Any sublease shall be expressly subject and subordinate to this Lease.
(d) No such sublease by the City may cause the Leased Property to be used for a
purpose other than an essential government function and as may be authorized under the provisions
of the laws of the State of California.
(e) The City shall furnish the Authority and the Original Purchaser with a written
opinion of Bond Counsel stating that such sublease does not cause interest on the Bonds to become
includable in gross income for purposes of federal income taxation or to become subject to personal
income taxation by the State of California.
Section 7.6 Amendment Hereof. This Lease may be amended by a written amendment
that is executed by the parties hereto with the prior written consent of the Original Purchaser. Prior
to the effective date of any such amendment, and as a condition precedent to the effectiveness
thereof, the City at its expense shall obtain an opinion of Bond Counsel stating that such amendment
will not adversely affect the exclusion from gross income of the interest on the Bonds.
Section 7.7 [RESERVED].
Section 7.8 Environmental Covenants.
(a) Compliance with Laws; No Hazardous Substances. The City will comply
with all Applicable Environmental Laws with respect to the Leased Property and will not allow the
presence of, or otherwise use, store, generate, treat, transport or dispose of any Hazardous Substance
thereon except: (i) in strict compliance with all Applicable Environmental Laws; and (ii) in a mariner
that would not cause any Hazardous Substance to flow, migrate, leak, leach, be released at or
otherwise come to rest on or in the Leased Property.
(b) Notification of Original Purchaser. The City will transmit copies of all
notices, orders or statements received from any governmental entity or any third party concerning
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31.b
violations or asserted violations of Applicable Environmental Laws with respect to the Leased
Property and any operations conducted thereon or any conditions existing thereon to the Original
Purchaser, and the City will notify the Original Purchaser in writing immediately of any release,
discharge, spill or deposit of any Hazardous Substances that has occurred or is occurring that in any
way affects or threatens to affect the Leased Property, or the people, structures, or other property
thereon, provided that no such notifications shall create any liability or obligation on the part of the
Original Purchaser.
(c) Access for Inspection. Subject to the notice requirements that are applicable
to the Authority as set forth in Section 7.2, the City shall permit the Original Purchaser, its agents, or
any experts designated by the Original Purchaser to have full access to the Leased Property during
reasonable business hours for purposes of such independent investigation of compliance with all
Applicable Environmental Laws, provided that the Original Purchaser has no obligation to do so, or
any liability for any failure to do so, or any liability should it do so.
Section 7.9 Financial Statements; Budgets. Within nine months following the end of
each Fiscal Year of the City during the Term of this Lease, the City shall provide the Original N
Purchaser with: (i) a copy of its audited financial statements for such Fiscal Year; and (ii) a 'o
certification that the City is not aware of any default or Event of Default hereunder or otherwise in 6
connection with this Lease. Such audited financial statements shall include a balance sheet, a ac
statement of revenues, expenses and changes in fund balances for budget and actual, a statement of
cash flows, notes, schedules and any attachments to the financial statements and such other financial r
information as the Original Purchaser shall reasonably request. The City shall also provide the a
Original Purchaser with a copy of its annual budget within one month of its adoption and any interim
updates or modifications to such budget. The City shall notify the Original Purchaser immediately of
any material change in the City's financial position which could have an impact on repayment of the
Bonds, and shall furnish at the request of the Original Purchaser such additional information that the LL
Assignee may from time to time reasonably request. L
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ARTICLE VIII a°
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EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default Defined. Any one or more of the following events M
constitutes an Event of Default hereunder.
(a) Failure by the City to pay any Lease Payment or other payment that is
required to be paid hereunder when specified herein or to maintain insurance as specified in
Article V.
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed hereunder or under the Indenture, other than as
referred to in the preceding clause (a) of this Section, for a period of 30 days after written notice
specifying such failure and requesting that it be remedied has been given to the City by the Authority
or the Original Purchaser. However, if in the reasonable opinion of the City the failure stated in the
notice can be corrected, but not within such 30 day period, the Authority and the Original Purchaser
shall not unreasonably withhold their consent to an extension of such time (for a period not to exceed
60 days) if corrective action is instituted by the City within such 30 day period and diligently pursued
until the default is corrected.
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31.b
(c) The filing by the City of a voluntary petition in bankruptcy, or failure by the
City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a
bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an
agreement of composition with creditors, or the approval by a court of competent jurisdiction of a
petition applicable to the City in any proceedings instituted under the provisions of the Federal
Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted.
(d) Any representation, warranty or certification made by the City hereunder or
in connection herewith shall have been incorrect or misleading when made.
(e) Any default occurs under any other agreement for borrowing money or
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receiving credit under which the City may be obligated as borrower, if such default consists of:
(i) the failure to pay any amount when due under such agreement; or (ii) the failure to perform any
other obligation thereunder and such failure gives the holder of such agreement the right to accelerate
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the amounts payable thereunder.
Section 8.2 Remedies on Default. Whenever any Event of Default has happened and is
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continuing, the Authority may exercise any and all remedies that are available under law or granted
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under this Lease; provided, however, that notwithstanding anything herein to the contrary, there shall
be no right under any circumstances to accelerate the Lease Payments or otherwise to declare any
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Lease Payments which are not then in default to be immediately due and payable. Each and every
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covenant hereof to be kept and performed by the City is expressly made a condition and upon the
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breach thereof the Authority may exercise any and all rights granted hereunder, provided that no
termination of this Lease shall be effected either by operation of law or acts of the parties hereto,
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except only in the manner herein expressly provided. Upon the occurrence and during the
continuance of any Event of Default, the Authority may exercise any one or more of the following
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remedies:
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(a) Enforcement of Payments Without Termination. If the Authority does not
3
elect to terminate this Lease in the manner hereinafter provided for in subparagraph (b), the City
a°
agrees to and shall remain liable for the payment of all Lease Payments and the performance of all
conditions herein, and the Authority may take whatever action at law or m equity that may appear
necessary or desirable to collect each Lease Payment as it becomes due hereunder. The City shall
• -
reimburse the Authority for any deficiency arising out of the re-leasing of the Leased Property, or, if
the Authority is unable to re -lease the Leased Property, then for the full amount of all Lease
Payments to the end of the Term of this Lease, but said Lease Payments and/or deficiency shall be
payable only at the same time and in the same manner as hereinabove provided for the payment of
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Lease Payments hereunder, notwithstanding such entry or re-entry by the Authority or any suit in
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unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry
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or obtaining possession of the Leased Property or the exercise of any other remedy by the Authority.
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The City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to
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enter upon and re -lease the Leased Property upon the occurrence and continuation of an Event of
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Default, to remove all personal property whatsoever situated upon the Leased Property and to place
such property in storage or other suitable place located in the County of San Bernardino for the
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account of and at the expense of the City, and the City hereby exempts and agrees to save harmless
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the Authority from any costs, loss or damage whatsoever arising or occasioned by any such entry
upon and re-leasing of the Leased Property and the removal and storage of such property by the
Authority or its duly authorized agents in accordance with the provisions herein. The City agrees 5
that the terms of this Lease constitute full and sufficient notice of the right of the Authority to re- 0
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Packet Pg. 518
lease the Leased Property in the event of such re-entry without effecting a surrender of this Lease,
and further agrees that no acts of the Authority in effecting such re-leasing shall constitute a
surrender or termination of this Lease irrespective of the term for which such re-leasing is made or
the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of
such default by the City, the right to terminate this Lease shall vest in the Authority to be effected in
the sole and exclusive manner hereinafter provided for in subparagraph (b). The City agrees to
surrender and quit possession of the Leased Property upon demand of the Authority for the purpose
of enabling the Leased Property to be re -let under this paragraph. Any rental obtained by the
Authority in excess of all Lease Payments and Additional Payments due hereunder shall be paid to
the City.
(b) Termination of Lease. If an Event of Default occurs and is continuing
hereunder, the Authority at its option may terminate this Lease and re -lease all or any portion of the
Leased Property. If the Authority terminates this Lease at its option and in the manner that is
provided herein because of a default by the City (and notwithstanding any re-entry upon the Leased
Property by the Authority in any manner whatsoever or the re-leasing of the Leased Property), the
City nevertheless agrees to pay to the Authority all costs, loss or damages howsoever arising or
occurring that are payable at the same time and in the same manner as is provided herein in the case
of payment of Lease Payments and Additional Payments. Any surplus received by the Authority
from such re-leasing shall be applied by the Authority to Lease Payments due under this Lease and,
upon full payment of all Lease Payments and Additional Payments due hereunder, any such surplus
shall be paid to the City as stated in paragraph (a) hereof Neither notice to pay rent or to deliver up
possession of the premises given under law nor any proceeding in unlawful detainer taken by the
Authority shall of itself operate to terminate this Lease, and no termination of this Lease on account
of default by the City shall be or become effective by operation of law, or otherwise, unless and until
the Authority shall have given written notice to the City of the election on the part of the Authority to
terminate this Lease. The City covenants and agrees that no surrender of the Leased Property, or of
the remainder of the Term hereof or any termination of this Lease shall be valid in any manner or for
any purpose whatsoever unless stated or accepted by the Authority by such written notice.
(c) ftgg2Pdims at Law or In E uit If an Event of Default occurs and continues
hereunder, the Authority may take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any
other of its rights hereunder.
(d) Remedies under the Site Lease. If an Event of Default occurs and continues
hereunder, the Authority may exercise its rights under the Site Lease.
Section 8.3 No Remedy Exclusive. No remedy conferred upon or reserved to the
Authority herein is intended to be exclusive, and every such remedy shall be cumulative and shall be
in addition to every other remedy given under this Lease or now or hereafter existing at law or in
equity. No delay or omission to exercise any right or power that accrues upon the occurrence of any
Event of Default shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Authority to exercise any remedy that is reserved to it in this
Article VIII, it shall not be necessary to give any notice, other than such notice as may be required in
this Article VIII or by law.
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Section 9A Agreement to Pay Attorneys' Fees and Expenses. If either party to this
Lease defaults under any of the provisions hereof and the nondefaulting party should employ
attorneys (including in-house legal counsel) or incur other expenses for the collection of moneys or
the enforcement or performance or observance of any obligation or agreement on the part of the
defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to
the nondefaulting party the reasonable fees of such attorneys (including allocable costs and expenses
of in-house legal counsel, if any) and such other expenses so incurred by the nondefaulting party.
Section 9.5 No Additional Waiver Implied by One Waiver. If any agreement in this
Lease is breached by either party and thereafter waived by the other party, such waiver is limited to
the particular breach so waived and will not be deemed to waive any other breach hereunder.
ARTICLE IX
PREPAYMENT OF LEASE PAYMENTS
Section 9.1 Security Deposit. Notwithstanding any other provision of this Lease, the
City may on any date secure the payment of the Lease Payments in whole or in part by depositing
with a trustee, escrow agent or other fiduciary selected by the City and acceptable to the Original
Purchaser an amount of cash, which shall be held in a segregated trust or escrow fund under a trust or
escrow agreement that is in form and content acceptable to the Original Purchaser, which cash so
held is either: (a) sufficient to pay such Lease Payments without reinvestment, including the principal
and interest components thereof, in accordance with the Schedule of Lease Payments in Atroendix BB;
or (b) invested in whole or in part in non -callable Federal Securities in such amount as will, in the
opinion of an independent certified public accountant (which opinion must be in form and substance,
and with such an accountant, acceptable to the Original Purchaser and addressed and delivered to the
Original Purchaser), together with interest to accrue thereon and any cash which is so deposited, be
fully sufficient, without reinvestment of any earning or income on such amounts, to pay such Lease
Payments, when due under Section 4.4 or when due on any optional prepayment date under
Section 9.2 as the City instructs at the time of said deposit; provided, however, that at or prior to the
date on which any such security deposit is established, the City shall deliver to the Original Purchaser
a written opinion of Bond Counsel (in form and substance acceptable to the Original Purchaser) to
the effect that any such security deposit will not adversely affect the excludability of the interest
component of Lease Payments from gross income of the owners thereof for federal income tax
purposes. If the City posts a security deposit under this Section with respect to all unpaid Lease
Payments, and notwithstanding the provisions of Section 4.3: (i) the Term of this Lease will
continue; (ii) all obligations of the City under this Lease, and all security provided by this Lease for
said obligations, will thereupon cease and terminate, excepting only the obligation of the City to
make, or cause to be made, all of the Lease Payments from such security deposit and its obligation
provided in the next succeeding paragraph; and (iii) the Authority's leasehold interest in the Leased
Property will terminate on the date of said deposit automatically and without further action by the
City or the Authority. The City hereby grants a first priority security interest in and the lien on said
security deposit and all proceeds thereof in favor of the Original Purchaser. Said security deposit
shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in
accordance with the provisions of this Lease.
Notwithstanding anything in this Lease to the contrary, if the amount held in such security
deposit shall at any time be insufficient (for whatever reason) to pay Lease Payments when due in
full as provided in clause (a) or (b), as applicable, of the first paragraph of this Section, the City shall
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31.b
immediately pay to the Original Purchaser on the applicable due date or due dates the amount of any
such shortfall from funds legally available for such purpose.
Section 9.2 Optional Prepayment. The Lease Payments that are attributable to the
Series 2018 Bonds are not subject to optional prepayment.
Section 9.3 Mandatory Prepayment From Net Proceeds of Insurance or Eminent
Domain. The City may prepay the unpaid principal components of the Lease Payments in whole or
in part on any date, from and to the extent of any Net Proceeds to be used for such purpose under
Sections 5.4 and 6.2, and shall so prepay to the extent the City does not elect to act under Section
6.2(a), (b) or (c) above, by paying a prepayment price equal to the principal components of the Lease
Payments to be prepaid, together with the interest accrued to such prepayment date, without
premium. The City shall give the Authority notice of its intention to exercise its option to prepay the
Lease Payments under this Section not less than 60 days in advance of the date of exercise, or such
shorter period of time as is acceptable to the Authority and the Original Purchaser. Any prepayment
hereunder shall be paid to the Trustee and applied to the redemption of Bonds as provided in
Section 4.01(a) of the Indenture, in the corresponding provisions of any Supplemental Indenture
pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices. Any notice, request, complaint, demand or other communication a
under this Lease shall be given by first class mail or personal delivery to the party entitled thereto at a'
its address set forth below, or by facsimile transmission or other form of telecommunication, at its
number set forth below. Notice shall be effective either: (a) upon transmission by facsimile c
transmission or other form of telecommunication; (b) 48 hours after deposit in the United States of LL
America first class mail, postage prepaid; or (c) in the case of personal delivery to any person, upon 3
actual receipt. The Authority, the City and the Original Purchaser may, by written notice to the other ao
parties, from time to time modify the address or number to which communications are to be given =
hereunder. "o
If to the City: City of San Bernardino
290 North D Street
San Bernardino, California 92401
Attn: Finance Director
If to the Authority: San Bernardino Joint Powers Financing Authority
290 North D Street
San Bernardino, California 92401
Attn: Executive Director
If to the Original
25 ``
Packet Pg. 521
Purchaser-. Western Alliance Business Trust, a wholly owned affiliate of Western
Alliance Bank, an Arizona corporation
c/o Western Alliance Bank
One E. Washington Street, Suite 1400
Phoenix, Arizona 85004
Attn: Municipal Finance
Section 10.2 Binding Effect. This Lease inures to the benefit of and is binding upon the
Authority, the City and their respective successors and assigns.
Section 10.3 Severability. If any provision of this Lease is held to be invalid or
unenforceable by any court of competent jurisdiction, such holding will not invalidate or render
unenforceable any other provision hereof.
Section 10A Net -net -net Lease. This Lease is a "net -net -net lease" and the City hereby
agrees that the Lease Payments are an absolute net return to the Authority, free and clear of any
expenses, charges or set -offs whatsoever.
Section 10.5 Further Assurances and Corrective Instruments. The Authority and the
City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Leased Property
that is leased hereby or intended so to be or for carrying out the expressed intention of this Lease.
Section 10.6 Execution in Counterparts. This Lease may be executed in several
counterparts, each of which is an original and all of which constitutes one and the same instrument.
Section 10.7 Applicable Law. This Lease is governed by and construed in accordance
with the laws of the State of California.
Section 10.8 Captions. The captions or headings in this Lease are for convenience only
and in no way define, limit or describe the scope or intent of any provisions or Section of this Lease.
Section 10.9 No Merger. It is the express intention of the Authority and the City that this
Lease and the obligations of the parties hereunder are separate and distinct from the Site Lease and
the obligations of the parties thereunder, and that during the term of the Site Lease and this Lease no
merger of title or interest may occur or be deemed to occur as a result of the respective positions of
the Authority and the City thereunder and hereunder.
Section 10.10 Third Party Beneficiary. The Original Purchaser is made a beneficiary
hereunder with all rights of a third party beneficiary.
Section 10.11 Jury Trial Waiver. (a) TO THE MAXIMUM EXTENT PERMITTED BY
LAW, EACH OF THE AUTHORITY AND THE CITY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS LEASE, THE INDENTURE OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH OF THE AUTHORITY AND THE CITY FURTHER
AGREES THAT, IN THE EVENT OF LITIGATION, IT WILL NOT PERSONALLY OR
THROUGH ITS AGENTS OR ATTORNEYS SEEK TO REPUDIATE THE VALIDITY OF THIS
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SECTION 10.11, AND IT ACKNOWLEDGES THAT IT FREELY AND VOLUNTARILY
ENTERED INTO THIS AGREEMENT TO WAIVE TRIAL BY JURY IN ORDER TO INDUCE
THE ORIGINAL PURCHASER TO PURCHASE THE BONDS.
(b) To the extent that the foregoing waiver of a jury trial is unenforceable under
applicable California law, the parties agree to refer, for a complete and final adjudication, any and all
issues of fact or law involved in any litigation or proceeding (including all discovery and law and
motion matters, pretrial motions, trial matter and post -trial motions up to and including final
judgment), brought to resolve any dispute (whether based on contract, tort or otherwise) between a
party or the parties and the Original Purchaser arising out of, in connection with or otherwise related
or incidental to this Lease Agreement to a judicial referee who shall be appointed under a general
reference pursuant to California Code of Civil Procedure Section 638, which referee's decision will
stand as the decision of the court. Such judgment will be entered on the referee's statement of
judgment in the same manner as if the action had been tried by the court. The parties shall select a
single neutral referee, who shall be a retired state or federal judge with at least five years of judicial
experience in civil matters; provided that the event the parties and the Original Purchaser cannot
agree upon a referee, the referee will be appointed by the court. The fees and expense of any referee
that is appointed in such action or proceeding shall be shared equally among the parties, but the
prevailing party shall have the right to recover the portion paid by it from the non -prevailing party at
the conclusion of the case.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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M
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IN WITNESS WHEREOF, the Authority and the City have caused this Lease to be executed
in their respective names by their duly authorized officers, all as of the date first above written.
ATTEST:
Secretary
ATTEST:
City Clerk
SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY, as Lessor
un
Administrator
CITY OF SAN BERNARDINO, CALIFORNIA, as
Lessee
By:
S-1
City Manager
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA -- —
COUNTY OF SAN BERNARDINO
On before me, --_, Notary Public,
personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
On_ before me, , Notary Public,
personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) islare subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of Califomia that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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31.b
APPENDIX A
DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of the following described land located in the City of San
Bernardino, County of San Bernardino, State of California, together with all buildings, facilities and
other improvements which constitute real property and which are located thereon:
ALL OF BLOCKS 5, 6, 7 AND 10 ALL OF LOTS 1, 2, 3, 4, 5, 6, 7, AND 8 IN BLOCK 11; ALL
OF LOTS 1, 2, 3, 4, 5, 6, 7 AND 8 IN BLOCK 12, ALL ACCORDING TO MAP OF
SUBDIVISION OF LOTS 1, 2, 3, 4, 15, 16, 17 AND 18, IN BLOCK 9, RANCHO SAN
BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 38 OF MAPS,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA.
TOGETHER WITH THOSE PORTIONS OF ALLEY IN BLOCKS 5 AND 12 VACATED BY
RESOLUTION NO. 5753 RESOLVED BY THE CITY OF SAN BERNARDINO BY THAT
DOCUMENT RECORDED NOVEMBER 16, 1960 IN BOOK 5285, PAGE 24 OF OFFICIAL
RECORDS, COUNTY OF SAN BERNARDINO.
TOGETHER WITH THOSE PORTIONS OF ALLEY IN BLOCK 10 VACATED BY
RESOLUTION NO. 1286, RESOLVED BY THE CITY OF SAN BERNARDINO, BY THAT
DOCUMENT RECORDED FEBRUARY 27, 1947 IN BOOK 2043, PAGE 118 OF OFFICIAL
RECORDS, COUNTY OF SAN BERNARDINO.
TOGETHER WITH THAT PORTION OF THE SOUTH HALF OF REDICK AVENUE LYING
EASTERLY OF PERSHING AVENUE IN THE CITY OF SAN BERNARDINO AS VACATED
BY RESOLUTION NO. 5530 RESOLVED BY THE CITY OF SAN BERNARDINO, BY THAT 3
DOCUMENT RECORDED MARCH 25, 1960 IN BOOK 5092, PAGE 559 OF OFFICIAL a°
RECORDS, COUNTY OF SAN BERNARDINO. ..
c
0
TOGETHER WITH THOSE PORTIONS OF BOYD STREET, "B" STREET, REDICK AVENUE,'.
AND ALLEYS IN BLOCKS 5, 6, 7, 11, AND 12, VACATED BY ORDINANCE NO. 1071, BY
THAT DOCUMENT RECORDED DECEMBER 11, 1942 IN BOOK 1570, PAGE 210 OF
OFFICIAL RECORDS, COUNTY OF SAN BERNARDINO. y
EXCEPTING THEREFROM ANY PORTION OF SAID BLOCKS 5, 6 AND 7 LYING
NORTHERLY OF THE SOUTHERLY LINE OF THE ATCHISON, TOPEKA AND SANTA FE
RAILROAD COMPANY'S 50 FOOT RIGHT OF WAY, AS THE SAME EXISTED ON
JANUARY 1, 1960.
Assessor's Parcel Number: 0136-051-14; 0136-041-01, 02, 03, 09, 13, 14
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Interest Rate: %
Lease
Payment
Date
Total
APPENDIX B
SCHEDULE OF LEASE PAYMENTS
Principal Component
B-1
Interest
Component
Total Lease
Payment
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CERTIFICATE OF ACCEPTANCE OF LEASE AGREEMENT
This is to certify that the interest in real property that has been conveyed by the Lease
Agreement, dated as of January 1, 2018, by and between the San Bernardino Joint Powers Financing
Authority, as lessor, and City of San Bernardino, as lessee (the "City"), is hereby accepted by the
undersigned officer on behalf of the City pursuant to the authority conferred by a resolution of the
City Council of the City adopted on December 20, 2017, and the City consents to recordation thereof
by its duly authorized officer.
Dated: January_, 2018 CITY OF SAN BERNARDINO, CALIFORNIA,
as Lessee
By:
City Manager
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RECORDING REQUESTED BY: )
City of San Bernardino )
AND WHEN RECORDED MAIL TO: )
Stradling Yocca Carlson & Rauth )
660 Newport Center Drive, Suite 1600 )
Newport Beach, California 92660 )
Attn: Brian P. Forbath, Esq. )
SPACE ABOVE FOR RECORDER78 USE ONLY
IJEASE AGRX'v-.EM,�-';'jN `,
THIS AREA FOR
RCCOR i►E ' S
U E ONL
THIS COVER SHEET ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
($3.00 Additional Recording Fee Applies)
Packet Pg. 530
31.b
THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT
TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE AND THIS DOCUMENT IS
EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA
GOVERNMENT CODE BECAUSE THE ASSIGNOR IS A GOVERNMENTAL AGENCY. LEASE TERM
LESS THAN 35 YEARS.
THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL ENTITIES.
LEASE AGREEMENT
(SITE LEASE)
This LEASE AGREEMENT (this "Site Lease"), dated as of January 1, 2018, is entered into
by and between the CITY OF SAN BERNARDINO, a municipal corporation and charter city that is
duly organized and existing under and by virtue of the laws of the State of California (the "City"), as
lessor, and the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY, a joint powers
agency that is duly organized and existing under and by virtue of the laws of the State of California
(the "Authority"), as lessee.
RECITALS
1. In order to refinance the acquisition, construction and installation of certain capital
L
equipment and capital improvements of the City (the "Project"), which Project was previously 0
financed and refinanced from proceeds of the San Bernardino Joint Powers Financing Authority a
Lease Revenue Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds'), the City has
agreed to lease the real property that consists of the land and the improvements that are commonly
known as the City Yard, as such real property is described more fully in Annendix AA (the "Leased
Property"), to the Authority by entering into this Site Lease.
1"
2. The Authority has agreed to assist the City with such refinancing by entering into a 3
Lease Agreement dated as of January 1, 2018 (the "Lease"), pursuant to which the Authority will
sublease the Leased Property back to the City and the City will be obligated to make payments (the
"Lease Payments") to the Authority.
3. The City and the Authority have determined that it would be in the best interests of
the City and the Authority to provide the funds that are necessary to refinance the Project through the
issuance by the Authority of bonds that are payable from the Lease Payments (the "Series 2018
Bonds").
4. The City and the Authority have determined that it would be in the best interests of
the City and the Authority to provide for the issuance of the Series 2018 Bonds pursuant to an
Indenture, dated as of the date hereof (the "Indenture"), by and among the Authority, the City and
U.S. Bank National Association, as trustee (the "Trustee").
5. All rights to receive the Lease Payments have been assigned without recourse by the
Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the
"Assignment Agreement"), by and between the Authority and the Trustee.
6. The City is authorized to enter into a lease -leaseback arrangement with the Authority
to refinance the Project under the City's Charter and other applicable State law.
Packet Pg. 531
AGREEMENT
In consideration of the foregoing and the material covenants herein, the City and the
Authority covenant, agree and bind themselves as follows:
Section 1. Lease of Leased Property. The City hereby leases to the Authority, and the
Authority hereby leases from the City, for the benefit of the owners of the Bonds (as such term is
defined in the Indenture), the Leased Property as described more fully in Appendix A, on the terms
and conditions hereof.
Section 2. Term; Possession. The term of this Site Lease commences, and the
Authority becomes entitled to possession of the Leased Property, as of the date of recordation hereof.
This Site Lease ends, and the right of the Authority hereunder to possession of the Leased Property
thereupon ceases, on the date on which all of the outstanding Lease Payments are paid in full, or
provision is made for such payment in accordance with the Lease, and the Lease has been terminated
in accordance with its terms.
Section 3. Rental. The Authority shall pay to the City as and for rental of the Leased
Property hereunder, the amount of $ on the date hereof The Authority shall cause such
amount to be provided by the Assignee (as such term is defined in the Assignment Agreement) in
accordance with the Assignment Agreement.
Section 4. Purpose of this Site Lease; Sublease Back to City. The purpose for which
the City agrees to lease the Leased Property to the Authority hereunder is to enable the City and the
Authority to refinance the Project from the rental payment that the Authority will pay to the City
under Section 3. The Authority hereby agrees to sublease the Leased Property back to the City under
the Lease.
Section 5. Substitution or Release of Property. If the City exercises its option under
Section 4.7 of the Lease and satisfies the conditions therein provided to substitute property for the
Leased Property in whole or in part, such substitution shall also automatically operate to substitute
property for the Leased Property leased hereunder. If the City exercises its option under Section 4.8
of the Lease and satisfies the conditions therein provided to release any portion of the Leased
Property from the Lease, such release shall also automatically operate to release property hereunder.
The description of the property leased under the Lease shall conform at all times to the description of
the property leased hereunder.
Section 6. Assignments and Subleases. The Authority may not assign its rights under
this Site Lease or sublet all or any portion of the Leased Property, except as provided in the Lease
and the Assignment Agreement, without the prior written consent of the Assignee.
Section 7. Right of Entry. The City reserves the right for any of its duly authorized
representatives to enter upon the Leased Property, or any portion thereof, at any reasonable time to
inspect the same or to make any repairs, improvements or changes that are necessary for the
preservation thereof.
Section 8. Termination. The Authority agrees, upon the termination of this Site Lease,
to quit and surrender the Leased Property in the same good order and condition as the Leased
Property was in at the time of commencement of the term hereof, reasonable wear and tear excepted,
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and agrees that all buildings, improvements and structures that are then existing upon the Leased
Property will remain thereon and title thereto will vest thereupon in the City for no additional
consideration.
Section 9. Default. If the Authority defaults in the performance of any obligation on its
part to be performed under the terms of this Site Lease, which default continues for 30 days
following notice and demand for correction thereof to the Authority, the City may exercise any and
all remedies granted by law, except that no merger of this Site Lease and of the Lease shall be
deemed to occur as a result thereof and this Site Lease may not be terminated by the City as a remedy
for such default. Notwithstanding the foregoing, so long as the Lease remains in effect, the City shall
continue to pay the Lease Payments as and when due under the Lease to the Assignee in accordance
with the Assignment Agreement.
Section 10. Amendments. The Authority and the City may at any time amend or modify
any of the provisions of this Site Lease, but only with the prior written consent of the Assignee.
Section 11. Quiet Enjoyment. The Authority at all times during the term of this Site
Lease shall peaceably and quietly have, hold and enjoy all of the Leased Property, subject to the
provisions of the Lease and Permitted Encumbrances.
Section 12. Waiver of Personal Liability. All liabilities under this Site Lease on the part
of the Authority are solely corporate liabilities of the Authority as a joint powers agency, and the
City hereby releases each and every member and officer of the Authority of and from any personal or
individual liability under this Site Lease. No member or officer of the Authority or its governing
board is at any time or under any circumstances individually or personally liable under this Site
Lease for anything done or omitted to be done by the Authority hereunder.
Section 13. Taxes. The City will pay any and all assessments of any kind or character
and also all taxes, including possessory interest taxes, that are levied or assessed upon the Leased
Property and any improvements thereon.
Section 14. Eminent Domain. If the whole or. any part of the Leased Property, or any
improvements thereon, are taken by eminent domain proceedings, the interest of the Authority will
be the aggregate amount of the then -unpaid principal components of the Lease Payments that are
payable under the Lease and the balance of the award, if any, will be paid to the City. The City
hereby waives any and all rights that it has or may hereafter have to acquire the interest of the
Authority m and to the Leased Property through the eminent domain powers of the City. The City
hereby agrees, to the extent permitted by law, that the compensation to be paid in any condemnation
proceedings brought by or on behalf of the City with respect to the Leased Property or any
improvement thereon shall be in an amount that is not less than the total unpaid principal components
of Lease Payments plus the interest component of Lease Payments accrued to the date of payment of
all Lease Payments under the Lease.
Section 15. Notices. Any notice, request, complaint, demand or other communication
under this Site Lease must be given by first class mail or personal delivery to the party entitled
thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its
number set forth below. Notice will be effective either: (a) upon transmission by telecopy, telex or
other form of telecommunication; (b) 48 hours after deposit in the United States mail, postage
prepaid; or (c) in the case of personal delivery to any person, upon actual receipt. The City, the
Packet Pg. 533
Authority and the Assignee may, by written notice to the other parties, from time to time modify the
address or number to which communications are to be given hereunder.
If to the City: City of San Bernardino
290 North D Street
San Bernardino, California 92401
Attn: Finance Director
If to the Authority: San Bernardino Joint Powers Financing Authority
290 North D Street
San Bernardino, California 92401
Attn: Executive Director
If to the Assignee: Western Alliance Business Trust, a wholly owned affiliate of Western
Alliance Bank
c% Western Alliance Bank
One E. Washington Street, Suite 1400
Phoenix, Arizona 85004
Attn: Municipal Finance
Section 16. Governing Law. This Site Lease is governed by the laws of the State of
California.
Section 17. Third Party Beneficiary. The Assignee is hereby made a third party
beneficiary hereunder with all rights of a third party beneficiary.
Section 18. Binding Effect. This Site Lease inures to the benefit of and is binding upon
the Authority, the City and their respective successors and assigns, subject, however, to the
limitations herein.
Section 19. Severability of Invalid Provisions. If any one or more of the provisions of
this Site Lease are for any reason held to be invalid, illegal or unenforceable in any respect, then such
provision or provisions will be deemed severable from the remaining provisions of this Site Lease
and such invalidity, illegality or unenforceability shall not affect any other provision of this Site
Lease, and this Site Lease shall be construed as if such invalid or illegal or unenforceable provision
had never been contained herein. The Authority and the City each hereby declares that it would have
entered into this Site Lease and each and every other Section, paragraph, sentence, clause or phrase
hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or
phrases of this Site Lease may be held illegal, invalid or unenforceable.
Section 20. Section Headings. All section headings herein are for convenience of
reference only and are not intended to define or limit the scope of any provision of this Site Lease.
Section 21. Execution in Counterparts. This Site Lease may be executed in any number
of counterparts, each of which is an original but all together constitute one and the same instrument.
It is also agreed that separate counterparts of this Site Lease may be separately executed by the
Authority and the City, all with the same force and effect as though the same counterpart had been
executed by both the Authority and the City.
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Section 22. Defined Terms. All capitalized terms that are used herein and not otherwise
defined have the respective meanings given those terms in the Lease.
Section 23. No Merger. Neither this Site Lease, the Lease nor any provisions hereof or
thereof shall be construed to effect a merger of the title of the City to the Leased Property under this
Site Lease and the City's leasehold interest therein under the Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be
executed by their respective officers thereunto duly authorized, all as of the day and year first above
written.
ATTEST:
City Clerk
ATTEST:
Secretary
CITY OF SAN BERNARDINO, CALIFORNIA,
as Lessor
By:
City Manager
SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY,
as Lessee
By:
Administrator
S-1
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
On before me, , Notary Public,
personally appeared _ , who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA
COUNTY OF SAN BERNARDINO
On before me, , Notary Public,
personally appeared , who proved
to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same m his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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APPENDIX A
DESCRIPTION OF THE LEASED PROPERTY
The Leased Property consists of the following described land located in the City of San
Bernardino, County of San Bernardino, State of California, together with all buildings, facilities and
other improvements which constitute real property and which are located thereon:
ALL OF BLOCKS 5, 6, 7 AND 10 ALL OF LOTS 1, 2, 3, 4, 5, 6, 7, AND 8 IN BLOCK 11; ALL
OF LOTS 1, 2, 3, 4, 5, 6, 7 AND 8 IN BLOCK 12, ALL ACCORDING TO MAP OF
SUBDIVISION OF LOTS 1, 2, 3, 4, 15, 16, 17 AND 18, IN BLOCK 9, RANCHO SAN
BERNARDINO, IN THE CITY OF SAN BERNARDINO, COUNTY OF SAN BERNARDINO,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7, PAGE 38 OF MAPS,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA.
TOGETHER WITH THOSE PORTIONS OF ALLEY IN BLOCKS 5 AND 12 VACATED BY
RESOLUTION NO. 5753 RESOLVED BY THE CITY OF SAN BERNARDINO BY THAT
DOCUMENT RECORDED NOVEMBER 16, 1960 IN BOOK 5285, PAGE 24 OF OFFICIAL
RECORDS, COUNTY OF SAN BERNARDINO.
TOGETHER WITH THOSE PORTIONS OF ALLEY IN BLOCK 10 VACATED BY
RESOLUTION NO. 1286, RESOLVED BY THE CITY OF SAN BERNARDINO, BY THAT
DOCUMENT RECORDED FEBRUARY 27, 1947 IN BOOK 2043, PAGE 118 OF OFFICIAL
RECORDS, COUNTY OF SAN BERNARDINO.
10
TOGETHER WITH THAT PORTION OF THE SOUTH HALF OF REDICK AVENUE LYING I
U.
EASTERLY OF PERSHING AVENUE IN THE CITY OF SAN BERNARDINO AS VACATED
BY RESOLUTION NO. 5530 RESOLVED BY THE CITY OF SAN BERNARDINO, BY THAT 3
DOCUMENT RECORDED MARCH 25, 1960 IN BOOK 5092, PAGE 559 OF OFFICIAL a°
RECORDS, COUNTY OF SAN BERNARDINO.
0
11)
TOGETHER WITH THOSE PORTIONS OF BOYD STREET, "B" STREET, REDICK AVENUE, -
AND ALLEYS IN BLOCKS 5, 6, 7, 11, AND 12, VACATED BY ORDINANCE NO. 1071, BY r,
THAT DOCUMENT RECORDED DECEMBER 11, 1942 IN BOOK 1570, PAGE 210 OF
OFFICIAL RECORDS, COUNTY OF SAN BERNARDINO. Z
EXCEPTING THEREFROM ANY PORTION OF SAID BLOCKS 5, 6 AND 7 LYING
NORTHERLY OF THE SOUTHERLY LINE OF THE ATCHISON, TOPEKA AND SANTA FE
RAILROAD COMPANY'S 50 FOOT RIGHT OF WAY, AS THE SAME EXISTED ON
JANUARY 1, 1960.
Assessor's Parcel Number: 0136-051-14; 0136-041-01, 02, 03, 09, 13, 14
Q
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CERTIFICATE OF ACCEPTANCE OF SITE LEASE
C -
This is to certify that the interest in real property conveyed by the Site Lease, dated as of
January 1, 2018, by and between City of San Bernardino, as lessor, and San Bernardino Joint Powers
Financing Authority, as lessee (the "Authority"), is hereby accepted by the undersigned officer on
behalf of the Authority pursuant to a resolution adopted by the Board of Directors of the Authority on
December 20, 2017, and the Authority consents to recordation thereof by its duly authorized officer. Z
Dated: January_, 2018 SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY
LM
Administrator
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Stradling Yocca Carlson & Rauth
Draft of 1215117
INDENTURE
by and among
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
and
CITY OF SAN BERNARDINO
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of January 1, 2018
Relating to
S
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
2018 LEASE REVENUE REFUNDING BONDS
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions....................................................................
Section 1.02 Equal Security..............................................................
Page
..............................................2
..............................................9
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2018 Bonds....................................................................................13
Section 3.02 Application of Proceeds of the Series 2018 Bonds.....................................................13
Section3.03 [RESERVED]............................................................................................................13
Section3.04 Costs of Issuance Fund................................................................................................13
Section3.05 [RESERVED].............................................................................................................14
Section 3.06 Conditions for the Issuance of Additional Bonds.......................................................14
Section 3.07 Procedure for the Issuance of Additional Bonds.........................................................15
Section3.08 Additional Bonds........................................................................................................16
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01
ARTICLE 11
Section 4.02
THE BONDS
Section2.01
Authorization of Bonds.................................................................................................9
Section 2.02
Tenors of Series 2018 Bonds.........................................................................................9
Section2.03
Form of Series 2018 Bonds.........................................................................................11
Section 4.05
Section 2.04
Transfer and Exchange of Bonds................................................................................11
Section2.05
Registration Books......................................................................................................12
Section 2.06
Execution of Bonds.....................................................................................................12
Section 2.07
Authentication of Bonds.............................................................................................12
Section2.08
Temporary Bonds........................................................................................................12
Section 2.09
Bonds Mutilated, Lost, Destroyed or Stolen...............................................................12
Section 2.10
Initial Delivery of Series 2018 Bonds.........................................................................13
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2018 Bonds....................................................................................13
Section 3.02 Application of Proceeds of the Series 2018 Bonds.....................................................13
Section3.03 [RESERVED]............................................................................................................13
Section3.04 Costs of Issuance Fund................................................................................................13
Section3.05 [RESERVED].............................................................................................................14
Section 3.06 Conditions for the Issuance of Additional Bonds.......................................................14
Section 3.07 Procedure for the Issuance of Additional Bonds.........................................................15
Section3.08 Additional Bonds........................................................................................................16
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01
Redemption of Series 2018 Bonds..............................................................................16
Section 4.02
Notice of Redemption.................................................................................................17
Section 4.03
Selection of Bonds for Redemption............................................................................17
Section 4.04
Partial Redemption of Bonds......................................................................................18
Section 4.05
Effect of Notice of Redemption..................................................................................18
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section5.01 Pledge; Special Obligations........................................................................................18
Section5.02 Flow of Funds.............................................................................................................19
Section 5.03 Application of Net Proceeds.......................................................................................20
Section5.04 Title Insurance.............................................................................................................20
Section5.05 Rebate Fund................................................................................................................20
Section5.06 Investment of Moneys.................................................................................................22
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Section 6.01
Section 6.02
Section 6.03
Section 6.04
Section 6.05
Section 6.06
Section 6.07
Section 6.08
Section 6.09
Section 6.10
Section 7.01
Section 7.02
Section 7.03
Section 7.04
Section 7.05
Section 7.06
Section 7.07
Section 7.08
Section 7.09
Section 7.10
Section 7.11
TABLE OF CONTENTS
(continued)
Page
ARTICLE VI
COVENANTS
Compliance with Agreements.:................................................................................... 23
Compliance with Site Lease and Lease Agreement....................................................23
Observance of Laws and Regulations.........................................................................23
OtherLiens..................................................................................................................23
Prosecutionand Defense of Suits................................................................................24
Accounting Records and Statements...........................................................................24
Recordationand Filing................................................................................................24
TaxCovenants.............................................................................................................24
[RESERVED].............................................................................................................25
Further Assurances......................................................................................................25
ARTICLE VII
DEFAULT AND LIMITATIONS OF LIABILITY
Actionon Default........................................................................................................25
Other Remedies of the Trustee....................................................................................25
Non-Waiver.................................................................................................................
26
RemediesNot Exclusive.............................................................................................
26
No Liability by the Authority to the Owners..............................................................26
No Liability by the City to the Owners.......................................................................26
No Liability of the Trustee to the Owners..................................................................27
Application of Amounts After Default.......................................................................27
Trustee May Enforce Claims Without Possession of Bonds.......................................27
Limitationon Suits......................................................................................................27
Provisions Relating to Original Purchaser..................................................................
28
ARTICLE VIII
THE TRUSTEE
Section 8.01 Employment of the Trustee.........................................................................................28
Section 8.02 Duties, Removal and Resignation of the Trustee........................................................ 28
Section8.03 Compensation of the Trustee......................................................................................29
Section 8.04 Protection of the Trustee.............................................................................................30
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.................................................................32
Section 9.02 Effect of Supplemental Indenture ...............................................................................34
Section 9.03 Endorsement of Bonds; Preparation of New Bonds....................................................34
Section9.04 Amendment of Particular Bonds.................................................................................34
ARTICLE X
DEFEASANCE
Section10.01 Discharge of Indenture................................................................................................34
Section 10.02 Bonds Deemed To Have Been Paid............................................................................35
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TABLE OF CONTENTS
(continued)
Page
Section 10.03 Payment of Bonds After Discharge of Indenture........................................................36
Signatures................................................................................................................................... S-1
EXHIBIT A FORM OF SERIES 2018 BOND..............................................................................A 1
EXHIBIT B DESCRIPTION OF THE PROJECT........................................................................B-1
EXHIBIT C FORM OF PURCHASER'S CERTIFICATE...........................................................0-1
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ARTICLE XI
MISCELLANEOUS
Section 11.01
Benefits of Indenture Limited to Parties.....................................................................
36
Section 11.02
Successor Deemed Included in all References to Predecessor...................................36
Section11.03
Execution of Documents by Owners...........................................................................36
Section 11.04
Waiver of Personal Liability.......................................................................................37
Section 11.05
Destruction of Bonds...................................................................................................37
Section 11.06
Funds and Accounts .................................................... I ...............................................
37
Section 11.07
Article and Section Headings Gender and References................................................37
Section11.08
Partial Invalidity..........................................................................................................37
Section11.09
Disqualified Bonds......................................................................................................38
Section 11.10
Money Held for Particular Bonds...............................................................................
38
Section 11.11
Payment on Non -Business Days.................................................................................38
Section11.12
California Law............................................................................................................38
Section11.13
Notices........................................................................................................................38
Section11.14
Execution in Counterparts...........................................................................................39
Section11.15
Jury Trial Waiver........................................................................................................39
Signatures................................................................................................................................... S-1
EXHIBIT A FORM OF SERIES 2018 BOND..............................................................................A 1
EXHIBIT B DESCRIPTION OF THE PROJECT........................................................................B-1
EXHIBIT C FORM OF PURCHASER'S CERTIFICATE...........................................................0-1
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INDENTURE
THIS INDENTURE (this "Indenture"), executed and entered into and dated as of January
1, 2018, is by and among the SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY,
a joint exercise of powers entity that is duly organized and existing under the laws of the State of
California (the "Authority"), the CITY OF SAN BERNARDINO, a municipal corporation and
charter city that is duly organized and existing under and by virtue of the Constitution and laws of the
State of California (the "City"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association that is duly organized and existing under and by virtue of the laws of the United States, as
Trustee (the "Trustee").
RECITALS
1. In order to refinance the acquisition, construction and installation of certain capital
equipment and capital improvements of the City (the "Project"), which Project was previously
financed and refinanced from proceeds of the San Bernardino Joint Powers Financing Authority
Lease Revenue Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds"), the City has
agreed to lease the real property that consists of the land and the improvements that are commonly
known as the City Yard (as such real property is described more fully in the herein -defined Lease
Agreement, the "Leased Property"), to the Authority by entering into a Site Lease, dated as of the
date hereof (the "Site Lease").
2. The Authority has agreed to assist the City with such refinancing by entering into a a'
Lease Agreement, dated as of the date hereof (the "Lease Agreement"), pursuant to which the rn
Authority will sublease the Leased Property back to the City and the City will be obligated to make
payments (the "Lease Payments") to the Authority. c
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3. The City and the Authority have determined that it would be in the best interests of m
the City and the Authority to provide the funds that are necessary to refinance the Project through the c
issuance by the Authority of bonds that are payable from the Lease Payments (the "Series 2018 a.
Bonds"). E
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4. The City and the Authority have determined that it would be in the best interests of
the City and the Authority to provide for the issuance of the Series 2018 Bonds pursuant to this
Indenture.
5. All rights to receive the Lease Payments have been assigned without recourse by the
Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the
"Assignment Agreement"), by and between the Authority and the Trustee.
6. The Series 2018 Bonds will be payable equally and ratably from the Lease Payments.
7. The Authority and the City desire to provide for the issuance of additional bonds (the
"Additional Bonds") payable from the Lease Payments on a parity with the Series 2018 Bonds (the
Series 2018 Bonds and any such Additional Bonds being collectively referred to as the "Bonds").
8. 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
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payment of the principal thereof, premium, if any, and interest thereon, the Authority and the City
have authorized the execution and delivery of this Indenture.
9. The Authority and the City have determined that all acts and proceedings that are
required by law and necessary to make the Bonds, when executed by the Authority, authenticated and
delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the
Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes
herein in accordance with its terms, have been done and taken, and the execution and -delivery of the
Indenture has been in all respects duly authorized.
In consideration of the premises and of the mutual agreements and covenants contained
herein and for other valuable consideration, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this
Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of the
Bonds and of any certificate, opinion, request or other document mentioned herein or therein have
the meanings defined herein, the following definitions to be equally applicable to both the singular
and plural forms of any of the terms defined herein. Capitalized terms that are not otherwise defined
herein shall have the meanings assigned to such terms in the Lease Agreement.
"Additional Bonds" means Bonds other than the Series 2018 Bonds issued hereunder in
accordance with the provisions of Sections 3.06 and 3.07 hereof.
"Act" means the Marks -Roos Local Bond Pooling Act of 1985, commencing with
Section 6584 of the California Government Code.
"Assignment Agreement" means the Assignment Agreement, dated as of the date hereof, by
and between the Authority and the Trustee.
"Authority" means the San Bernardino Joint Powers Financing Authority, a joint exercise of
powers entity that is duly organized and existing under and by virtue of the laws of the State of
California.
"Authorized Authority Representative" means the Chairperson, Vice Chairperson,
Executive Director, Controller and Secretary of the Authority, or any other person authorized by the
Board of Directors of the Authority to act on behalf of the Authority under or with respect to this
Indenture.
"Authorized City Representative" means the Mayor of the City, the Mayor Pro Tem of the
City, the City Manager of the City, the Finance Director of the City or the City Clerk, or any other
person authorized by the City Council of the City to act on behalf of the City under or with respect to
this Indenture.
"Authorized Denominations" means $1 or any integral multiple thereof.
"Bonds" means the Series 2018 Bonds and any Additional Bonds issued hereunder.
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"Business Day" means a day which is not: (a) a Saturday, Sunday or legal holiday; (b) a day
on which banking institutions in the State of California, or in any state in which the Office of the
Trustee is located, are required or authorized by law (including executive order) to close; or (c) a day
on which the New York Stock Exchange is closed.
"City" means the City of San Bernardino, a municipal corporation and charter city that is
duly organized and existing under and by virtue of the Constitution and laws of the State of
California.
"Closing Date" means January _, 2018.
"Code" means the Internal Revenue Code of 1986, as amended.
"Costs of Issuance" means all of the costs of issuing and delivering the Bonds, including,
but not limited to, all printing and document preparation expenses in connection with this Indenture,
the Lease Agreement, the Site Lease, the Assignment Agreement, the Bonds and any preliminary
official statement and final official statement pertaining to the Bonds, market study fees, legal fees,
municipal advisor and other consultant fees, printing fees and expenses of counsel with the issuance
and delivery of the Bonds, the initial fees and expenses of the Trustee and its counsel and counsel to
the Original Purchaser, fees of the California Debt and Investment Advisory Commission and other
fees and expenses incurred in connection with the issuance and delivery of the Bonds, to the extent
that such other fees and expenses are approved by the City.
"Costs of Issuance Fund" means the fund by that name established in accordance with a
Section 3.04 hereof.
"Escrow Fund" means the fund by that name established under the Escrow Agreement c
(1996 Bonds), dated as of the date hereof, by and among the City, the Authority and the 1996 LL
Trustee. 3
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"Indenture" means this Indenture, as originally executed and as it may be amended or
supplemented from time to time by any Supplemental Indenture. .a
"Information Services" means the Municipal Securities Rulemaking Board through the r
Electronic Municipal Marketplace Access (EMMA) website; and, in accordance with then current
guidelines of the Securities and Exchange Commission, such other services providing information
with respect to called bonds as the Authority may designate in a Written Certificate of the Authority
delivered to the Trustee. LU
hereof.
"Interest Fund" means the fund by that name established in accordance with Section 5.02
"Interest Payment Date" means July 1, 2018 and each January 1 and July 1 thereafter.
"Lease Agreement" means the Lease Agreement, dated as of the date hereof, by and
between the City and the Authority, as originally executed and as it may be from time to time
amended in accordance with the provisions thereof
"Lease Payment Fund" means the fund by that name established in accordance with
Section 5.02 hereof.
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"Lease Payments" means all amounts payable to the Authority by the City as Lease
Payments pursuant to Section 4.4 of the Lease Agreement.
"Moody's" means Moody's Investors Service, a corporation organized and existing under the
laws of the State of Delaware, its successors and assigns, except that if such corporation shall no
longer perform the function of a securities rating agency for any reason, the term "Moody's" shall be
deemed to refer to any other nationally recognized securities rating agency selected by the Authority.
"1996 Bonds" means the San Bernardino Joint Powers Financing Authority Lease Revenue
Refunding Bonds (City Hall Project) Series 1996.
"1996 Trustee" means U.S. Bank National Association, as trustee for the 1996 Bonds.
"Office of the Trustee" means the principal corporate trust office of the Trustee in Los
Angeles, California, or such other office as may be specified to the Authority and the City by the
Trustee in writing, except that with respect to presentation of Bonds for payment or for registration of
transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any
particular time, its corporate trust agency shall be conducted as specified to the Authority and the
City by the Trustee in writing.
"Opinion of Counsel" means a written opinion of counsel of recognized national standing in
the field of law relating to municipal bonds, appointed and paid by the Authority or the City and
which written opinion, if to be delivered to the Trustee, is satisfactory to the Trustee.
"Outstanding," when used as of any particular time with reference to Bonds, means (subject
to the provisions of Section 11.09 hereof) all Bonds theretofore, or thereupon being, authenticated
and delivered by the Trustee under this Indenture except:
(a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for
cancellation;
(b) Bonds with respect to which all liability of the Authority shall have been
discharged in accordance with Section 10.01 hereof; and
(c) 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.
"Owner" means, with respect to a Bond, the Person in whose name such Bond is registered
on the Registration Books, initially, the Original Purchaser.
"Permitted Investments" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested therein (the
Trustee is entitled to rely upon the investment direction of the City as a determination that such
investment is a legal investment):
(a) 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, and CATS and TIGRS) or
obligations the timely payment of principal of and interest on which are fully and unconditionally
guaranteed by the United States of America.
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(b) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following federal agencies and provided such obligations are backed by the full faith and
credit of the United States of America. (stripped securities are only permitted if they have been
stripped by the agency itself):
(i) U.S. Exhort -Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership
(ii) Farmers Home Administration (FmHA)
Certificates of beneficial ownership
(iii) Federal Financin , Bank
(iv) Federal Housing Administration Debentures t FHA,
(v) General Services Administration
Participation certificates
(vi) Government National Mortgage Association (GNMA or "Ginnie Mae")
GNMA — guaranteed mortgage-backed bonds
GNMA — guaranteed pass-through obligations
(vii) U.S. Maritime Administration
Guaranteed Title Xl financing
(viii) U.S. Department of Hous'W and Urban DevelgaMent (HUD)
Project Notes
Local Authority Bonds
New Communities Debentures — U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds — U.S. government guaranteed public
housing notes and bonds.
(c) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following non -full faith and credit U.S. government agencies (stripped securities are only
permitted if they have been stripped by the agency itself):
(i) Federal Home Loan Bank S stem
Senior debt obligations
(ii) Federal Home Loan. Mortgage Corp oration (FHLMC or "Freddie Mad')
Participation Certificates
Senior debt obligations
(iii) Federal National Mortgage Association (FNMA or "Fannie Mae")
Mortgage-backed securities and senior debt obligations
(iv) Student Loan Marketing Association (SLMA or "Sallie Mae")
Senior debt obligations
(v) Resolution Fundin r Coy; ,. (REFCORP) obligations
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(vi) Farm Credit S, stem
Consolidated systemwide bonds and notes.
(d) Money market mutual funds registered under the Federal Investment Company Act of
1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by
S&P of AAAm-G; AAA -m; or AA -m and if rated by Moody's rated Aaa, Aal or Aa2, including
funds for which the Trustee and its affiliates provide investment advisory, custodial transfer agency
and other management services, and receive and retain a fee for such services provided to the fund.
(e) Certificates of deposit (including those placed by a third party pursuant to a separate
agreement between the Authority and the Trustee) secured at all times by collateral described in (a)
and/or (b) above. Such certificates must be issued by commercial banks, savings and loan
associations or mutual savings banks or mutual savings banks whose short term obligations are rated
"A-1+" or better by S&P and "Prime -1" by Moody's. The collateral must be held by a third party
and the bondholders must have a perfected first security interest in the collateral.
(i) Bank deposit products, certificates of deposit (including those placed by a third party
pursuant to a separate agreement between the Authority and the Trustee), savings accounts, deposit
accounts, including time deposits, trust fiords, trust accounts, overnight bank deposits, interest
bearing accounts, interest bearing money market accounts, banker's acceptances, money market
deposits which are fully insured by FDIC, including BIF and SAIF, including those of the Trustee
and its affiliates.
(g) Investment agreements, including guaranteed investment contracts.
(h) Commercial paper rated, at the time of purchase, "Prime -1" by Moody's and "A-1"
or better by S&P.
(i) Bonds or notes issued by any state or municipality which are rated by Moody's and
S&P in one of the two Highest long-term rating categories assigned by such agencies.
0) Federal funds or bankers acceptances with a maximum term of one year of any bank
which has an unsecured, uninsured and unguaranteed obligation rating of "Prime -1" or "A3" or better
by Moody's and "A-1+" or better by S&P.
(k) Repurchase agreements or reverse repurchase agreements ("Repos") that provide for
the transfer of securities from a dealer bank or securities firm (seller/borrower) to the Trustee
(buyer/lender), and the transfer of cash from the Trustee to the dealer bank or securities firm with an
agreement that the dealer bank or securities firm will repay the cash plus a yield to the Trustee in
exchange for the securities at a specified date.
Repos must satisfy the following criteria:
(a) Repos must be among the City, the Trustee and a dealer bank or securities
firm
(i) Primary dealers on the Federal Reserve reporting dealer list which are
rated "A" or better by S&P and Moody's, or
(ii) Banks rated "A" or above by S&P and Moody's.
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(b) The written repo contract must include the following:
(i) Securities which are acceptable for transfer are:
(I) Direct U.S. Governments
(II) Federal agencies backed by the full faith and credit of the U.S.
government (and FNMA & FHLMC)
(ii) The term of the repo may be up to 30 days
(iii) The collateral must be delivered to the City or the Trustee (if Trustee
is not supplying the collateral) or third party acting as agent for the
Trustee (if the trustee is supplying the collateral) beforelsimultaneous
with payment (perfection by possession of certificated securities).
(iv) Valuation of Collateral
(1) The securities must be valued weekly, marked -to -market at
current market price 21us accrued interest
(II) The value of collateral must be equal to 104% of the amount
of cash transferred by the City or the Trustee, on behalf of the
City, to the dealer bank or security firm under the repo plus
accrued interest. If the value of securities held as collateral
slips below 104% of the value of the cash transferred by the
City or the Trustee, on behalf of the City, then additional
cash and/or acceptable securities must be transferred. If,
however, the securities used as collateral are FNMA or
FHLMC, then the value of collateral must equal 105%.
(III) Legal opinion which must be delivered to the City and the
Trustee.
Repos must also meet guidelines under state law for legal investment of public funds.
(1) The Local Agency Investment Fund of the State, created pursuant to Section 16429.1
of the California Governmental Code, to the extent that the Trustee is authorized to register such
investment in its own name.
"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.
hereof.
"Principal Fund" means the fund by that name established in accordance with Section 5.02
"Project" has the meaning that is set forth in the Recitals hereof.
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"Purchaser's Certificate" means a letter in substantially the form that is set forth in Exhibit
C.
"Qualified Institutional Buyer" means "qualified institutional buyer" as defined in Rule
144A promulgated under the Securities Act of 1933, as in effect on the date hereof.
"Rebate Fund" means the fund by that name established in accordance with Section 5,05
hereof.
"Rebate Requirement" has the meaning ascribed thereto in the Tax Certificate.
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"Record Date" means the fifteenth day of the month next preceding an Interest Payment
Date, whether or not such day is a Business Day. m
"Redemption Fund" means the fund by that name established in accordance with
Section 5.02 hereof. }'
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"Redemption Price" means the aggregate amount of principal of accrued interest to the date •o
of redemption on and premium, if any, on the Bonds upon the redemption thereof pursuant hereto. r
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"Registration Books" means the records maintained by the Trustee for the registration of Z.,
ownership and registration of transfer of the Bonds pursuant to Section 2.05 hereof. .o
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"Rental Period" means the period from the Closing Date through December 31, 2018 and, a
thereafter, the twelve-month period commencing on January 1 of each year during the term of the =
Lease Agreement. �_
"S&P" means S&P Global Ratings, a Standard & Poor's Financial Services LLC business, LL
its successors and assigns, except that if such entity shall no longer perform the fimctions of a m
securities rating agency for any reason, the term "S&P" shall be deemed to refer to any other c
nationally recognized securities rating agency selected by the Authority. d
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"Series" means the Series 2018 Bonds executed, authenticated and delivered on the Closing 0
Date and identified pursuant to this Indenture and any Additional Bonds issued pursuant to a
Supplemental Indenture and identified as a separate Series of Bonds.
"Series 2018 Bonds" means the San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds issued hereunder. ui
"Site Lease" means the Lease Agreement (Site Lease), dated as of the date hereof, by and
between the City and the Authority, as originally executed and as it may from time to time be
amended in accordance with the provisions thereof and of the Lease Agreement.
"Supplemental Indenture" means any supplemental indenture amendatory of or
supplemental to this Indenture, but only if and to the extent that such Supplemental Indenture is
specifically authorized hereunder.
"Tax Certificate" means the Tax Certificate executed by the Authority and the City at the
time of issuance of the Series 2018 Bonds relating to the requirements of Section 148 of the Code, as
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originally executed and as it may from time to time be amended in accordance with the provisions
thereof.
"Trustee" means U.S. Bank National Association, a national banking association that is duly
organized and existing under and by virtue of the laws of the United States, or any successor thereto
as Trustee hereunder, appointed as provided herein.
"2018 Costs of Issuance Account" means the account by that name within the Costs of
Issuance Fund established pursuant to Section 3.04.
"Written Certificate of the Authority" and "Written Request of the Authority" mean,
respectively, a written certificate or written request signed in the name of the Authority by an
Authorized Authority Representative. Any such certificate or request 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.
"Written Certificate of the City" and "Written Request of the City" mean, respectively, a
written certificate or written request signed in the name of the City by an Authorized City
Representative. Any such certificate or request 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.
Section 1.02 Equal Security. In consideration of the acceptance of the Bonds by the
Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the a
Authority, the City, the Trustee and the Owners from time to time of all Bonds that are authorized, a'
executed, issued and delivered hereunder and then Outstanding to secure the full and final payment
of the principal of, premium, if any, and interest on all Bonds which may from time to time be =
authorized, executed, issued and delivered hereunder, subject to the agreements, conditions,
covenants and provisions herein; and all agreements and covenants set forth herein to be performed 3
by or on behalf of the Authority or the City shall be for the equal and proportionate benefit, a°
protection and security of all Owners of the Bonds without distinction, preference or priority as to
security or otherwise of any Bonds over any other Bonds by reason of the number or date thereof or
the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, ..
except as expressly provided herein or therein..
v
ARTICLE II
THE BONDS
Section 2.01 Authorization of Bonds. The Authority hereby authorizes the issuance of
the Bonds under and subject to the terms of this Indenture and applicable laws of the State of
California for the purpose of refinancing the Project. The Bonds may consist of one or more Series
of Bonds of varying denominations, dates, maturities, interest rates and other provisions, subject to
the provisions and conditions contained herein.
Section 2.02 Terms of Series 2018 Bonds.
(a) The Series 2018 Bonds shall be designated the "San Bernardino Joint Powers
Financing Authority 2018 Lease Revenue Refunding Bonds." Each Series of Additional Bonds shall
9
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bear such additional designation as may be necessary or appropriate to distinguish such Series from
every other Series of Bonds.
(b) The Series 2018 Bonds shall be issued in fully registered form without
coupons in Authorized Denominations, so long as no Series 2018 Bond shall have more than one
maturity date. The Series 2018 Bonds shall be dated as of the Closing Date, shall be issued in the
aggregate principal amount of $ , shall mature on January 1 of each year and shall bear
interest (calculated on the basis of a 360 -day year comprised of twelve 30 -day months) at the rates
per annum as follows:
Maturity Date Principal
(January I) Amount Interest Rate
Li $ %
(c) Interest on the Series 2018 Bonds shall be payable from the Interest Payment
Date next preceding the date of authentication thereof unless: (i) a Series 2018 Bond is authenticated
on or before an Interest Payment Date and after the close of business on the preceding Record Date,
in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2018 Bond is
authenticated on or before the first Record Date, in which event interest thereon shall be payable
from the dated date thereof, or (iii) interest on any Series 2018 Bond is in default as of the date of
authentication thereof, in which event interest thereon shall be payable from the date to which
interest has been paid in full, payable on each Interest Payment Date. Interest shall be paid in lawful
money of the United States on each Interest Payment Date to the Persons in whose names the
ownership of the Series 2018 Bonds is registered on the Registration Books at the close of business
on the immediately preceding Record Date, except as provided below. Interest shall be paid by
check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the
Series 2018 Bond Owners at their respective addresses shown on the Registration Books as of the
close of business on the preceding Record Date.
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31.b
Notwithstanding anything herein to the contrary, including subsection (d) below, so long as
the Series 2018 Bonds are owned by the Original Purchaser, the following shall apply: (a) the Series
2018 Bonds are not required to be presented and surrendered to the Trustee for payment at any time
prior to the final maturity thereof; and (b) the Trustee will pay the principal of and interest on the
Series 2018 Bonds by wire transfer to the Original Purchaser in accordance with wire transfer
instructions provided by the Original Purchaser to the Trustee from time to time; provided that
principal on the Series 2018 Bonds which is payable at maturity shall be made only upon
presentation and surrender thereof at the Office of the Trustee.
(d) The principal and premium, if any, of the Series 2018 Bonds shall be payable
in lawful money of the United States of America upon presentation and surrender thereof upon
maturity or earlier redemption at the Office of the Trustee.
(e) The Series 2018 Bonds shall be subject to redemption as provided in
Article IV.
Section 2.03 Form of Series 2018 Bonds. The Series 2018 Bonds shall be in substantially
the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and
variations as permitted or required hereby.
Section 2.04 Transfer and Exchange of Bonds. Subject to the limitations in the
following paragraph with respect to Series 2018 Bonds, any Bond may, in accordance with its terms,
be transferred upon the Registration Books by the Person in whose name it is registered, in person or
by such person's duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to
the Trustee. Whenever any Bond or Bonds shall be surrendered for transfer, the Authority shall
execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds of the same Series
in a like aggregate principal amount, in any Authorized Denomination. The Trustee shall require the
Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid
with respect to such transfer.
The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal
amount of Bonds of the same Series of other Authorized Denominations. The Trustee shall not
collect from the Series 2018 Bond Owner any charge for any new Series 2018 Bond issued upon any
exchange or transfer, but shall require the Series 2018 Bond Owner requesting such exchange or
transfer to pay any tax or other governmental charge required to be paid with respect to such
exchange or transfer. Whenever any Series 2018 Bonds shall be surrendered for registration of
transfer or exchange, the Authority shall execute and the Trustee shall authenticate and deliver a new i
Series 2018 Bond or Bonds, as applicable, of the same issue and maturity, for a like aggregate a
principal amount; provided that the Trustee shall not be required to register transfers or make ?
exchanges of: (i) Series 2018 Bonds for a period of 15 days next preceding any selection of the IZ
Series 2018 Bonds to be redeemed; or (ii) any Series 2018 Bonds chosen for redemption. 3
Notwithstanding the foregoing, a Series 2018 Bond Owner may only transfer the Series 2018 Bonds a
to a new Series 2018 Bond Owner if the principal amount transferred is not less than $1,000,000 and F
the new Series 2018 Bond Owner has delivered a Purchaser's Certificate (in the form that is set forth a
in Exhibit C) to the Authority and the Trustee. For purposes of such a transfer, the Trustee may rely -�
upon all new Series 2018 Bond Owner representations as set forth in the Purchaser's Certificate.
11 a
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Section 2.05 Registration Books. The Trustee will keep or cause to be kept, at the Office
of the Trustee, sufficient records for the registration and transfer of ownership of the Bonds, which
shall be open to inspection during regular business hours and upon reasonable notice 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 records, the
ownership of the Bonds as hereinbefore provided.
Section 2.06 Execution of Bonds. The Bonds shall be executed in the name and on behalf
of the Authority with the facsimile signature of an Authorized Authority Representative attested by
the manual or facsimile signature of the Secretary of the Authority. The Bonds shall then be
delivered to the Trustee for authentication by it. In case any of such officers of the Authority who
shall have signed or attested any of the Bonds shall cease to be such officers of the Authority before
the Bonds so signed or attested shall have been authenticated or delivered by the Trustee, or issued
by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such
authentication, delivery and issue, shall be as binding upon the Authority as though those who signed
and attested the same had continued to be such officers of the Authority, and also any Bonds may be
signed and attested on behalf of the Authority by such Persons as at the actual date of execution of
such Bonds shall be the proper officers of the Authority although at the nominal date of such Bonds
any such Person shall not have been such officer of the Authority.
Section 2.07 Authentication of Bonds. Only such of the Bonds as shall bear thereon a
certificate of authentication substantially in the form as that set forth in Exhibit A, 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 or on behalf 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 2.08 Temporary Bonds. The Bonds of a Series may be issued in temporary form
exchangeable for definitive Bonds of such Series when ready for delivery. Any temporary Bonds
may be printed, lithographed or typewritten, shall be of such authorized denominations as may be
determined by the Authority, shall be in fully registered form without coupons and may contain such
reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond
shall be executed by the Authority and authenticated by the Trustee upon the same conditions and in
substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds of a
Series, it will execute and deliver definitive Bonds of such Series as promptly thereafter as
practicable, and thereupon the temporary Bonds of such Series may be surrendered, for cancellation,
at the Office of the Trustee and the Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive Bonds of such Series in
Authorized Denominations. Until so exchanged, the temporary Bonds of such Series shall be entitled
to the same benefits under this Indenture as definitive Bonds of such Series authenticated and
delivered hereunder.
Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become
mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee
shall thereupon authenticate and deliver, a new Bond of like tenor and Series 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 canceled by it and delivered
to, or in accordance with the order a& the Authority. If any Bond shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and
12
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Packet Pg. 566
indemnity satisfactory to the Trustee shall be given, the Authority, at the expense of the Owner, shall
execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and
Series in lieu of and in replacement for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall have been selected for redemption, instead of issuing a replacement
Bond, the Trustee may pay the same without surrender thereof). The Authority may require payment
by the Owner of a sum not exceeding the actual cost of preparing each replacement Bond issued
under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any
Bond of a Series issued under the provisions of this Section in lieu of any Bond of such Series
alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on
the part of the Authority 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 of such Series secured by this Indenture.
Section 2.10 Initial Delivery of Series 2018 Bonds. The Series 2018 Bonds shall be
initially delivered as registered bonds in the name of the Owner and shall not be delivered as
book -entry bonds.
ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2018 Bonds. The Authority may, at any time, execute the
Series 2018 Bonds for issuance hereunder and deliver the same to the Trustee. The Trustee shall
authenticate the Series 2018 Bonds and deliver the Series 2018 Bonds to the original purchaser
thereof upon receipt of a Written Request of the Authority and upon receipt of the purchase price
therefor.
Section 3.02 Application of Proceeds of the Series 2018 Bonds. On the Closing Date,
the proceeds of the sale of the Series 2018 Bonds received by the Trustee, $ , shall be deposited
by the Trustee as follows:
(a) The Trustee shall deposit the amount of $,
Account.
(b) The Trustee shall transfer the amount of $
deposit in the Escrow Fund.
Section 3.03 [RESERVED].
in the 2018 Costs of Issuance
to the 1996 Trustee for
Section 304 Costs of Issuance Fund. The Trustee shall establish and maintain a separate
fund designated the "Costs of Issuance Fund," and within such fund the "2018 Costs of Issuance
Account." On the Closing Date, there shall be deposited in the 2018 Costs of Issuance Account the
amount specified in Section 3.02(a) hereof. There shall additionally be deposited in the Costs of
Issuance Fund the portion, if any, of the proceeds of the sale of any Additional Bonds required to be
deposited therein under the Supplemental Indenture pursuant to which such Additional Bonds are
issued.
The moneys in the Costs of Issuance Fund shall be used and withdrawn by the Trustee from
time to time to pay the Costs of Issuance upon submission of a Written Request of the Authority
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31_b R
stating: (a) the Person to whom payment is to be made; (b) the amount to be paid, together with c
payment instructions; (c) the purpose for which the obligation was incurred; (d) that such payment is E
a proper charge against the Costs of Issuance Fund; and (e) that such amounts have not been the
subject of a prior disbursement fi+om the Costs of Issuance Fund, in each case together with a
statement or invoice for each amount requested thereunder. Each such Written Request of the
Authority shall be sufficient evidence to the Trustee of the facts stated therein and the Trustee shall
have no duty to confirm the accuracy of such facts. On the six month anniversary of the Closing
Date, all amounts, if any, remaining in the 2018 Costs of Issuance Account shall be withdrawn
therefrom by the Trustee and transferred to the Interest Fund, and the 2018 Costs of Issuance .e
Account shall be closed.
Section 3.05 [RESERVED].
Section 3.06 Conditions for the Issuance of Additional Bonds. The Authority may at
any time issue one or more Series of Additional Bonds (in addition to the Series 2018 Bonds)
payable from Lease Payments as provided herein on a parity with all other Bonds theretofore issued
hereunder, but only subject to the following conditions, which are hereby made conditions precedent
to the issuance of such Additional Bonds:
(a) The Authority shall provide written notice to the Original Purchaser at least
30 days prior to the issuance date of such Additional Bonds;
(b) The issuance of such Additional Bonds shall have been authorized under -and
pursuant hereto and shall have been provided for by a Supplemental Indenture which shall specify
the following:
(1) The application of the proceeds of the sale of such Additional Bonds;
(2) The principal amount and designation of such Series of Additional
Bonds and the denomination or denominations of the Additional Bonds;
(3) The date, the maturity date or dates, the interest payment dates and c
the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional 7
Bonds; provided, however, that: (i) the serial Bonds of such Series of Additional Bonds shall be
payable as to principal annually on _ 1 of each year in which principal falls due, and the term co
Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on
_ 1; (ii) the Additional Bonds shall be payable as to interest semiannually on _ 1 and _ 1 of
each year, except that the first installment of interest may be payable on either_ 1 or _ 1 and v
shall be for a period of not longer than twelve months and the interest shall be payable thereafter Z
semiannually on _ 1 and _ 1; (iii) all Additional Bonds of a Series of like maturity shall be z
identical in all respects, except as to number or denomination; and (iv) serial maturities of serial
Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be 3
established to provide for the redemption or payment of such Additional Bonds on or before their p
respective maturity dates; �
Bonds;
(4) The redemption premiums and terms, if any, for such Additional
(5) The form of such Additional Bonds; and
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31.b
(6) Such other provisions that are appropriate or deemed necessary by the
Authority and are not inconsistent with the provisions hereof;
(c) The Authority shall be in compliance with all agreements, conditions,
covenants and terms contained herein, in the Lease Agreement and in the Site Lease required to be
observed or performed by it;
(d) The City shall be in compliance with all agreements, conditions, covenants
and terms contained herein, in the Lease Agreement and in the Site Lease required to be observed or
performed by it; and
(e) The Site Lease shall have been amended, to the extent necessary, and the
Lease Agreement shall have been amended so as to increase the Lease Payments payable by the City
thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds,
payable at such times and in such manner as may be necessary to provide for the payment of the
principal of and interest on such Additional Bonds; provided, however, that no such amendment shall
be made such that the sum of Lease Payments, including any increase in the Lease Payments as a
result of such amendment in any Rental Period shall be in excess of the annual fair rental value of the
Leased Property after taldng into account the use of the proceeds of any Additional Bonds issued in
connection therewith (evidence of the satisfaction of such condition shall be made by a Written
Certificate of the City).
Nothing contained herein shall limit the issuance of any bonds or other obligations payable
from Lease Payments if, after the issuance and delivery of such bonds or other obligations, none of
the Bonds theretofore issued hereunder will be Outstanding.
Notwithstanding satisfaction of the other conditions to the issuance of Additional Bonds set I
forth herein, Additional Bonds may not be issued if an Event of Default (or any event which, once all U.
12
notice or grace periods have passed, would constitute an Event of Default) exists, unless such default
will be cured upon such issuance. a
Section 3.07 Procedure for the Issuance of Additional Bonds. At any time after the sale c
of any Additional Bonds in accordance with the Act, such Additional Bonds shall be executed by the
Authority for issuance hereunder and shall be delivered to the Trustee and thereupon shall be
authenticated and delivered by the Trustee, but only upon receipt by the Trustee of the following:
(a) Certified copies of the Supplemental Indenture authorizing the issuance of
such Additional Bonds, the amendment to the Lease Agreement required by Section 3.06 hereof and
the amendment to the Site Lease, if any, required by Section 3.06 hereof, together with satisfactory
evidence that such amendment to the Lease Agreement and such amendment to the Site Lease, if
any, have been duly recorded;
(b) A Written Request of the Authority as to the delivery of such Additional
Bonds;
(c) An opinion of Bond Counsel substantially to the effect that: (i) the Indenture
(including all Supplemental Indentures), the Lease Agreement (including the amendment thereto
required by Section 3.06 hereof) and the Site Lease (including any amendment thereto required by
Section 3.06 hereof) have been duly authorized, executed and delivered by, and constitute the valid
15 1%
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and binding obligations of, the Authority and the City, enforceable in accordance with their terms
(except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting creditors' rights and by the application of equitable principles and by the
exercise of judicial discretion in appropriate cases and subject to the limitations on legal remedies
against political subdivisions in the State of California); (ii) such Additional Bonds constitute valid
and binding special obligations of the Authority payable solely from Lease Payments as provided
herein and are enforceable in accordance with their terms (except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights
and by the application of equitable principles and by the exercise of judicial discretion in appropriate
cases and subject to the limitations on legal remedies against political subdivisions in the State of
California); and (iii) the issuance of such Additional Bonds, in and of itself, will not adversely affect
the exclusion of interest on the Bonds Outstanding prior to the issuance of such Additional Bonds
from gross income for federal income tax purposes;
(d) a Written Certificate of the Authority that the requirements of Section 3.06
hereof have been met;
(e) a Written Certificate of the City that the requirements of Section 3.06 hereof
and Sections 5.4 and 5.7 of the Lease Agreement have been met, and a Written Certificate of the City
as to the fair rental value of the Leased Property, after giving effect to the execution and delivery of
the Additional Bonds, and to the use of proceeds received therefrom; and
(i) Such further documents as are required by the provisions hereof or by the
provisions of the Supplemental Indenture authorizing the issuance of such Additional Bonds.
Section 3.08 Additional Bonds. So long as any of the Bonds remain Outstanding, the
Authority shall not issue any Additional Bonds or obligations payable from the Lease Payments,
except pursuant to Sections 3.06 and 3.07 hereof.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2018 Bonds.
(a) Extraordinary Redemption. The Series 2018 Bonds shall be subject to
redemption, in whole or in part, on any date as directed by the City in a Written Request of the City
provided to the Trustee not less than 30 days (or such lesser number of days acceptable to the
Trustee, in the sole discretion of the Trustee) prior to such date, in Authorized Denominations, from
and to the extent of any Net Proceeds received from the City with respect to all or a portion of the
Leased Property for the purpose of redeeming Series 2018 Bonds, deposited by the Trustee in the
Redemption Fund pursuant to Sections 5.03 and 5.04 hereof at a Redemption Price equal to the
principal amount of the Series 2018 Bonds to be redeemed, plus accrued interest thereon to the date
of redemption, without premium.
(b) Optional Redemption. The Series 2018 Bonds are not subject to optional
redemption prior to maturity.
UP,
31.b
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31.b
(c) Mandatory Sinldne Fund Redemption. The Series 2018 Bonds are subject to
mandatory sinking fund redemption in part (by lot) on January 1, 20_ and each January 1 thereafter,
in integral multiples of $1 at a Redemption Price of the principal amount thereof plus accrued interest
to the date fixed for redemption, without premium, in accordance with the following schedule:
Redemption Date Nin*at
(January 1) Amount
2023*
* Final Maturity.
If, during the Fiscal Year immediately preceding one of the redemption dates specified
above, the Authority purchases Series 2018 Bonds, at least 45 days prior to the redemption date, the
Authority shall notify the Trustee as to the principal amount purchased and the amount of Series
2018 Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal
amount thereof, to reduce such upcoming mandatory sinking fund redemption payment for the Series
2018 Bonds so purchased All Series 2018 Bonds purchased pursuant to this subsection shall be
cancelled pursuant to Section 11.09.
In the event of a redemption pursuant to Section 4.01(a) or (b) or in the event of the purchase rn
of Series 2018 Bonds, the City shall provide the Trustee with a revised mandatory sinking fund
schedule giving effect to the redemption so completed.
LL
Section 4.02 Notice of Redemption. The Trustee on behalf and at the expense of the
Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any c
Bonds designated for redemption at their respective addresses appearing on the Registration Books, a
to the Information Services, at least 20 but not more than 60 days prior to the date fixed for =
redemption. Such notice shall state the date of the notice, the redemption date, the redemption place -°,
and the Redemption Price and shall designate the CUSIP numbers (if any), the Bond numbers and the
maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or u
maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then
surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also
that further interest on such Bonds will not accrue from and after the date fixed for redemption. Such ui
notice may state that any optional redemption is conditioned upon sufficient funds being on deposit z
on the redemption date to redeem the Bonds so called for redemption. Such notice of redemption z
may also state that no representation is made as to the accuracy or correctness of the CUST numbers a
printed therein or on the Bonds. Neither the failure to receive any notice so mailed, nor any defect in w
such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the �
cessation of accrual of interest thereon from and after the date fixed for redemption. a
Section 4.03 Selection of Bonds for Redemption. Whenever provision is made in this
Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be
redeemed from all Bonds not previously called for redemption: (a) with respect to any optional
redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written
Request of the Authority; (b) with respect to any redemption pursuant to Section 4.01(a) hereof and
17
Packet Pg, 561
the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are
issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable; and
(c) with respect to any other redemption of Additional Bonds, among maturities as provided in the
Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among
Bonds of the same Series with the same maturity in any manner which the Trustee in its sole
discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall'be deemed
to be comprised of separate $1 denominations and such separate denominations shall be treated as
separate Bonds which may be separately redeemed.
Section 4.04 Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in
part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner
thereof, at the expense of the Authority, a new Bond or Bonds of the same Series in Authorized
Denominations equal in aggregate principal amount representing the unredeemed portion of the
Bonds surrendered.
Section 4.05 Effect of Notice of Redemption. Notice having been mailed as aforesaid,
and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption,
having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date,
and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at
the Redemption Price thereof; together with interest accrued and unpaid to said date.
If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be
redeemed, together with interest to said date, shall be held by the Trustee so as to be available
therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and
not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become
payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in
trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners
for interest thereon.
All Bonds paid at maturity or redeemed prior to maturity pursuant to the provisions hereof
shall be canceled upon surrender thereof and destroyed.
ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations. Subject only to the provisions of this Indenture
permitting the application thereof for the purposes and on the terms and conditions set forth herein,
all of the Lease Payments and any other amounts (including proceeds of the sale of the Bonds) held
in the Lease Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are
hereby pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds
in accordance with their terms, the provisions of this Indenture and the Act. Said pledge shall
constitute a first lien on such assets.
All obligations of the Authority under the Bonds and this Indenture shall be special
obligations of the Authority, payable solely from Lease Payments and the other assets pledged
therefor hereunder. Neither the faith and credit nor the taxing power of the Authority, the City or the
State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.
18
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31.b
Section 5.02 Flow of Funds.
(a) The Trustee shall establish and maintain separate funds designated the "Lease
Payment Fund," the "Interest Fund," the "Principal Fund" and the "Redemption Fund."
All Lease Payments shall be paid directly by the City to the Trustee, and if received by the
Authority at any time shall be transferred by the Authority to the Trustee within one Business Day
after the receipt thereof. All Lease Payments received by the Trustee shall be deposited by the
Trustee in the Lease Payment Fund.
(b) The Trustee shall transfer the amounts on deposit in the Lease Payment Fund,
at the times and in the manner hereinafter provided, to the following respective funds:
(i) Interest Fund On the Business Day immediately preceding each
Interest Payment Date, the Trustee shall transfer from the Lease Payment Fund to the Interest Fund
the amount, if any, necessary to cause the amount on deposit in the Interest Fund to be equal to the
interest due on the Bonds on such Interest Payment Date.
(ii) Principal Fund. On the Business Day immediately preceding each A
January 1, commencing January 1, 20_, the Trustee shall transfer from the Lease Payment Fund to a
the Principal Fund the amount, if any, necessary to cause the amount on deposit in the Principal Fund
to be equal to the principal amount of the Bonds due on such January 1 either as a result of the 0
maturity thereof or mandatory sinking fund redemption payments required to be made with respect 3
thereto. Moneys in the Principal Fund shall be used by the Trustee for the purpose of paying the
P"
principal of the Bonds when due and payable at their maturity dates or upon earlier mandatory
sinking fluid redemption.
c
(iii) Redemption Fund. The Trustee, on the redemption date specified in U.
the Written Request of the City filed with the Trustee at the time that any prepaid Lease Payment is 3
paid to the Trustee pursuant to the Lease Agreement, shall deposit in the Redemption Fund that a°
amount of moneys representing the portion of the Lease Payments designated as prepaid Lease
Payments. Additionally, the Trustee shall deposit in the Redemption Fund any amounts required to •o
be deposited therein pursuant to Sections 5.03 or 5.04 hereof Moneys in the Redemption Fund shall
be used by the Trustee for the purpose of paying the principal of and interest and premium, if any, on M
Series 2018 Bonds redeemed pursuant to the provisions of Sections 4.01(a) and (b) hereof and
Additional Bonds redeemed pursuant to the corresponding provisions of the Supplemental Indenture
pursuant to which such Additional Bonds are issued, provided, however, that moneys deposited in
the Redemption Fund may also be used to purchase Outstanding Series 2018 Bonds or Additional v
Bonds in the manner hereinafter provided Purchases of Outstanding Series 2018 Bonds or a
Additional Bonds may be made by the Authority at public or private sale as and when and at such i
prices as the Authority may in its discretion determine, but only at prices (including brokerage
or other expenses) not more than par plus accrued interest, plus, in the case of moneys set aside for w
an optional redemption or an extraordinary redemption, the premium applicable at the next following a
call date according to the premium schedule established pursuant to Sections 4.01(a) or (b), as
applicable, or in the case of Additional Bonds the premium established in any Supplemental Z
Indenture. Any accrued interest payable upon the purchase of Series 2018 Bonds or Additional
Bonds may be paid from the amount reserved in the Interest Fund.
a
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OV) Surplus. Moneys on deposit in the Lease Payment Fund that are not
necessary to make any of the payments required above may be expended by the Authority at any time
for any purpose permitted by law as directed by the Authority.
(c) Upon receipt of a Written Certificate of the City pursuant to Section 6.2(d) of
the Lease Agreement that the City has elected to prepay Lease Payments, the Trustee will transfer
moneys from the Redemption Fund at the times and in the manner required by subsection (b)(iii)
above.
Section 5.03 Application of Net Proceeds. If the Leased Property or any portion thereof
shall be damaged or destroyed, subject to the further requirements of this Section, the City shall, as
expeditiously as possible, make an election with respect to Net Proceeds in accordance with Section
6.2 of the Lease Agreement.
The Net Proceeds (other than Net Proceeds of rental interruption insurance), including the
proceeds of any self-insurance, received by the Trustee on account of any damage or destruction of
the Leased Property or a portion thereof shall be held by the Trustee in the Redemption Fund and
applied to the redemption of Bonds in accordance with Section 4.01(a) hereof and the corresponding
provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued. Pending
such application, such proceeds may be invested by the Trustee as directed by the City in Permitted
Investments that mature not later than such times moneys are expected to be needed to pay such costs
of repair or replacement.
The proceeds of any award in eminent domain that are received by the Trustee in respect to
the Leased Property shall be deposited by the Trustee in the Redemption Fund and applied to the
redemption of Bonds pursuant to Section 4.01(a) and the corresponding provisions of any
Supplemental Indenture pursuant to which Additional Bonds are issued.
Section 5.04 Title Insurance. Net Proceeds of any policy of title insurance received by
the Trustee in respect of the Leased Property shall be deposited in the Redemption Fund and applied
to the redemption of Bonds in the manner provided in Section 4.01(a) and the corresponding
provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued.
Section 5.05 Rebate Fund.
(a) Establishment. The Trustee shall establish a fund for the Bonds designated
the "Rebate Fund" when required in accordance herewith. Absent an Opinion of Counsel that the
exclusion from gross income for federal income tax purposes of interest on the Bonds will not be
adversely affected, the Authority shall cause to be deposited in the Rebate Fund such amounts as are
required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any
time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United
States Treasury. All amounts on deposit in the Rebate Fund for the Bonds shall be governed by this
Section and the Tax Certificate, unless and to the extent that the Authority delivers to the Trustee an
opinion of Bond Counsel that the exclusion from gross income for federal income tax purposes of
interest on the Bonds will not be adversely affected if such requirements are not satisfied.
Notwithstanding anything to the contrary contained herein or in the Tax Certificate, the Trustee;
(1) shall be deemed conclusively to have complied with the provisions thereof if it follows all
Written Requests of the Authority or Written Requests of the City; (2) shall have no liability or
responsibility to enforce compliance by the Authority or the City with the terms of the Tax
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31.b
Certificate and shall not be deemed to have knowledge of the terms thereof; (3) may rely
conclusively on the Authority's or the City's calculations and determinations and certifications
relating to rebate matters; and (4) shall have no responsibility to independently make any calculations
or determinations or to review the Authority's or the City's calculations or determinations
thereunder.
(i) Annual Computation. Within 55 days of the end of each Bond Year
(as such teen is defined in the Tax Certificate), the Authority shall calculate or cause to be calculated
the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and
Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with
respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate
(e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction
expenditures exception of Section 148(t)(4)(C) of the Code), and taking into account whether the
election pursuant to Section 148(f)(4)(C)(vii) of the Code (the "1%% Penalty") has been made), for
this purpose treating the last day of the applicable Bond Year as a computation date, within the
meaning of Section 1.148-1(b) of the Treasury Regulations (the "Rebatable Arbitrage"). The
Authority shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this
Section.
(ii) Annual Transfer. Within 55 days of the end of each Bond Year, upon a
the Written Request of the Authority or Written Request of the City, an amount shall be deposited to 9
the Rebate Fund by the Trustee from any Lease Payments legally available for such purpose (as t
specified by the Authority or the City in the aforesaid Written Request), if and to the extent required, Q
so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in n,
accordance with clause (i) of this subsection (a). In the event that immediately following the transfer
required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund W
exceeds the amount required to be on deposit therein, upon Written Request of the Authority or
Written Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then
credit the excess to the Lease Payment Fund.
a
(iii) Payment to the Treasury. The Trustee shall pay, as directed by
Written Request of the Authority, to the United States Treasury, out of amounts in the Rebate Fund: .�0
(1) Not later than 60 days after the end of: (X) the fifth Bond M
Year; and (Y) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated as of the end of such Bond Year; and
(2) Not later than 60 days after the payment of all of the Bonds, v
an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond 14
Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with z
Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations. X
In the event that, prior to the time of any payment required to be made from the Rebate Fund,
the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the
Authority shall calculate or cause to be calculated the amount of such deficiency and deposit an
amount received from any legally available source equal to such deficiency prior to the time such
payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to
the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such
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Packet Pg.565
payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T (prepared by
the Authority), or shall be made in such other manner as provided under the Code.
(b) Disppsition of Unexpended Funds. Any funds remaining in the Rebate Fund
after redemption and payment of the Bonds and the payments described in subsection (a) above being
made may be withdrawn by the Authority and utilized in any manner by the Authority.
(c) Survival of Defeasance. Notwithstanding anything in this Section to the
contrary, the obligation to comply with the requirements of this Section shall survive the defeasance
or payment in full of the Bonds.
Section 5.06 Investment of Moneys. Except as otherwise provided herein, all moneys in
any of the funds or accounts established pursuant to this Indenture and held by the Trustee shall be
invested by the Trustee solely in Permitted Investments, as directed in writing by the Authority.
Moneys in all funds and accounts that are held by the Trustee shall be invested in Permitted
Investments maturing not later than the date on which it is estimated that such moneys will be
required for the purposes specified in this Indenture; provided, however, that such Permitted
Investments may be redeemed at par so as to be available on each Interest Payment Date. Absent
timely written direction from the Authority, the Trustee shall hold any funds held by it uninvested.
Subject to the provisions hereof, all interest, profits and other income received from the
investment of moneys in any fund or account established pursuant to this Indenture shall be retained
in such fund or account.
Permitted Investments acquired as an investment of moneys in any fund established under
this Indenture shall be credited to such fund. In determining fair market value, the Trustee may use
and rely conclusively on any generally recognized securities pricing service available to it (including
brokers and dealers in securities).
The Trustee may act as principal or agent in the making or disposing of any investment.
Upon the Written Request of the Authority, the Trustee shall sell or present for redemption any
Permitted Investments so purchased whenever it shall be necessary to provide moneys to meet any
required payment, transfer, withdrawal or disbursement from the fund to which such Permitted
Investments is credited, and the Trustee shall not be liable or responsible for any loss resulting from
any investment made or sold pursuant to this Section. For purposes of investment, the Trustee may
commingle moneys in any of the funds and accounts established hereunder.
The Trustee may make any investments hereunder through the bond or investment
department or trust investment department of the entity acting as Trustee hereunder, or those of such
entity's parent or any affiliate, and such entity, or its parent or affiliate, as applicable, shall be entitled
to its normal, customary and reasonable compensation for such services.
The entity acting as Trustee hereunder, or any of its affiliates, may act as sponsor, advisor or
manager in connection with any investments made by the Trustee hereunder and such entity, or its
affiliate, as applicable, shall be entitled to its normal, customary and reasonable compensation for
such services.
The Authority and the City acknowledge that, to the extent regulations of the Comptroller of
the Currency or other applicable regulatory entity grant the Authority and the City the right to receive
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31.b
brokerage confirmations of security transactions as they occur, at no additional cost, the Authority
and the City specifically waive receipt of such confirmations to the extent permitted by law.
ARTICLE VI
COVENANTS
Section 6.01 Compliance with Agreements. The Trustee will not authenticate or deliver
any Bonds in any manner other than in accordance with the provisions hereof, and the Authority and
the City will not suffer or permit any default by them to occur hereunder, but will faithfully comply
with, keep, observe and perform all of the agreements, conditions, covenants and terms hereof
required to be complied with, kept, observed and performed by them.
Section 6.02 Compliance with Site Lease and Lease Agreement. The Authority and the
City will faithfully comply with, keep, observe and perform all of the agreements, conditions,
covenants and terms contained in the Site Lease and the Lease Agreement required to be complied
with, kept, observed and performed by them and, together with the Trustee, will enforce the Site
Lease and the Lease Agreement against the other party thereto in accordance with their respective
terms.
Section 6.03 Observance of Laws and Regulations. The Authority, the City and the j✓'
Trustee will faithfully comply with, keep, observe and perform all valid and lawful obligations or t
regulations now or hereafter imposed on them by contract, or prescribed by any law of the United a
States of America or of the State of California, or by any officer, board or commission having
jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right
or privilege now owned or hereafter acquired by them, including their right to exist and carry on their
respective businesses, to the end that such franchises, rights and privileges shall be maintained and S
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preserved and shall not become abandoned, forfeited or in any manner impaired. In
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Section 6.04 Other Liens. The City will keep the Leased Property and all parts thereof a
free from judgments and materialmen's and mechanics' liens and free from all claims, demands, _
encumbrances and other liens of whatever nature or character, and free from any claim or liability
which materially impairs the City in conducting its business or utilizing the Leased Property, and the
Trustee at its option (after first giving the City ten days' written notice to comply therewith and M
failure of the City to so comply within such ten-day period) may, but is in no event obligated to,
defend against any and all actions or proceedings, or may pay or compromise any claim or demand
asserted in any such actions or proceedings; provided, however, that, in defending against any such W
actions or proceedings or in paying or compromising any such claims or demands, the Trustee shall V
not in any event be deemed to have waived or released the City from liability for or on account of a
any of its agreements and covenants contained herein, or from its liability hereunder and to perform
such agreements and covenants. W
So long as any Bonds are Outstanding, none of the Trustee, the Authority or the City shall
create or suffer to be created any pledge of or lien on the amounts on deposit in any of the funds or
accounts created hereunder, other than the pledge and Lien hereof.
The Authority, the City and the Trustee shall not encumber the Leased Property other than in
accordance with the Site Lease, the Lease Agreement, the Indenture and the Assignment Agreement.
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Packet Pg. 567
Section 6.05 Prosecution and Defense of Suits. The City will promptly, upon request of
the Trustee (which request the Trustee is not required to make), take such action from time to time as
may be necessary or proper to remedy or cure any cloud upon or defect in the title to the Leased
Property or any part thereof, whether now existing or hereafter developing, will prosecute all actions,
suits or other proceedings as may be appropriate for such purpose and will indemnify and save the
Trustee harmless from all cost, damage, expense or loss, including attorneys' fees and expenses,
which it or the Owners may incur by reason of any such cloud, defect, action, suit or other
proceeding.
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Section 6.06 Accounting Records and Statements. The Trustee will keep proper
M
accounting records in which complete and correct entries shall be made of all transactions of the
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Trustee relating to the receipt, deposit and disbursement of the Lease Payments, and such accounting
records shall be available for inspection by the Authority and the City at reasonable hours and under
reasonable conditions upon reasonable notice.
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Section 6.07 Recordation and Filing. The City will record, or cause to be recorded, with
the appropriate county recorder, the Lease Agreement, the Site Lease and the Assignment
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Agreement, or memoranda thereof.
Section 6.08 Tax Covenants. Notwithstanding any other provision of the Indenture,
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absent an Opinion of Counsel that the exclusion from gross income of the interest on the Bonds will
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not be adversely affected for federal income tax purposes, the City and the Authority covenant to
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comply with all applicable requirements of the Code that are necessary to preserve such exclusion
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from gross income with respect to the Bonds and specifically covenant, without limiting the
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generality of the foregoing, as follows:
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(a) Private Activit \ . The City and the Authority will not take any action or
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refrain from taking any action or make any use of the proceeds of the Bonds or of any other moneys
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or property which would cause the Bonds to be "private activity bonds" within the meaning of
3
Section 141 of the Code;
(b) Arbitra e. The City and the Authority will make no use of the proceeds of
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the Bonds or of any other amounts or property, regardless of the source, and will not take any action
or refrain from taking any action which would cause the Bonds to be "arbitrage bonds" within the
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meaning of Section 148 of the Code;
(c) Federal Guarantee. The City and the Authority will make no use of the
proceeds of the Bonds and will not take or omit to take any action that would cause the Bonds to be
v
"federally guaranteed" within the meaning of Section 149(b) of the Code;
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(d) Information Re; ortinL. The City and the Authority will take or cause to be
taken all necessary action to comply with the informational reporting requirement of Section 149(e)
3
of the Code that is necessary to preserve the exclusion of interest on the Bonds pursuant to Section
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103(x) of the Code;
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(e) Hedge Bonds. The City and the Authority will make no use of the proceeds
of the Bonds or any other amounts or property, regardless of the source, and will not take any action c
or refrain from taking any action that would cause the Bonds to be considered "hedge bonds" within m
the meaning of Section 149(8) of the Code unless the City and the Authority take all necessary action C
24
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31.b
to assure compliance with the requirements of Section 149(8) of the Code to maintain the exclusion
from gross income of interest on the Bonds for federal income tax purposes; and
(f) Miscellaneous. The City and the Authority will not take any action or refrain
from taking any action that is inconsistent with its expectations stated in the Tax Certificate and will
comply with the covenants and requirements stated therein and incorporated by reference herein.
This Section and the covenants set forth herein shall not be applicable to, and nothing
contained herein shall be deemed to prevent the City and the Authority from causing the Trustee to
issue revenue bonds or to execute and deliver contracts that are payable on a parity with the Bonds,
the interest with respect to which has been determined by an Opinion of Counsel to be subject to
federal income taxation.
Section 6.09 [RESERVED].
Section 6.10 Further Assurances. Whenever and so often as requested to do so by the
Trustee, the Authority and the City will promptly execute and deliver or cause to be executed and
delivered all such other and further assurances, documents or instruments and promptly do or cause
to be done all such other and further things as may be necessary or reasonably required in order to
farther and more fully vest in the Trustee all advantages, benefits, interests, powers, privileges and
rights conferred or intended to be conferred upon it hereby or by the Assignment Agreement, the Site
Lease or the Lease Agreement, and to preserve the priority of the pledge of the Lease Payments
under applicable law
ARTICLE VII
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DEFAULT AND LIMITATIONS OF LIABILITY =_
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Section 7.01 Action on Default. If an Event of Default (within the meaning of `m
Article VIII of the Lease Agreement) shall happen, then such Event of Default shall constitute an a
event of default hereunder. The Trustee shall give notice, as assignee of the Authority, of an Event
of Default under the Lease Agreement to the City to the extent that it has actual knowledge thereof.
In each and every case during the continuance of an event of default, the Trustee may and, at the ..
direction of the Owners of not less than a majority of the aggregate principal amount of Bonds then M
Outstanding, and upon being indemnified to its reasonable satisfaction therefor, shall, upon notice in
writing to the City and the Authority, exercise any of the remedies that are granted to the Authority
under the Lease Agreement and, in addition, take whatever action at law or in equity may appear eg
necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to v
protect and enforce any of the rights vested in the Trustee or the Owners by this Indenture or by the a
Bonds, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement i
of any covenant or agreement or for the enforcement of any other legal or equitable right, including Ma'
any one or more of the remedies that are set forth in Section 7.02 hereof uJ
Section 7.02 Other Remedies of the Trustee. Subject to the provisions of Section 7.01
hereof, the Trustee shall have the right:
(a) by mandamus or other action or proceeding or suit at law or in equity to
enforce its rights against the Authority or the City or any member, director, officer or employee
thereof; and to compel the Authority or the City or any such member, director, officer or employee to
25
Packet Pg.5 99
perform or carry out the Trustee's duties under law and the agreements and covenants required to be
performed by the Trustee contained herein;
(b) by suit in equity to enjoin any acts or things which are unlawful or violate the
rights of the Trustee; or
(c) by suit in equity upon the happening of any event of default hereunder to
require the Authority and the City to account as the trustee of an express trust.
Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment or composition
affecting the Bonds or the rights of any Owner thereof; or to authorize the Trustee to vote in respect
of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 7.03 Non -Waiver. A waiver of any default or breach of duty or contract by the
Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or
remedies on any such subsequent default or breach of duty or contract. No delay or omission by the
Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall
impair any such right or remedy or shall be construed to be a waiver of any such default or breach of
duty or contract or an acquiescence therein, and every right or remedy that is conferred upon the
Trustee by law or by this Article may be enforced and exercised from time to time and as often as the
Trustee shall deem expedient.
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned
or determined adversely to the Trustee or any Owner, then subject to any adverse determination, the
Trustee, such Owner, the Authority and the City shall be restored to their former positions, rights and
remedies as if such action, proceeding or suit had not been brought or taken.
Section 7.04 Remedies Not Exclusive. Subject to the provisions of Section 7.01 hereof,
no remedy conferred upon or reserved to the Trustee herein is intended to be exclusive of any other
remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be
exercised without exhausting and without regard to any other remedy conferred by any law. The
assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 7.05 No Liability by the Authority to the Owners. Except as expressly provided
herein, the Authority shall not have any obligation or liability to the Owners with respect to the
payment when due of the Lease Payments by the City, or with respect to the performance by the City
of the other agreements and covenants required to be performed by it contained in the Lease
Agreement or herein, or with respect to the performance by the Trustee of any right or obligation
required to be performed by it contained herein.
Section 7.06 No Liability by the City to the Owners. Except for the payment when due
of the Lease Payments, the accuracy of its representations and the performance of any of its
agreements and covenants related to the Bonds contained in the Lease Agreement, the Site Lease,
this Indenture or any other agreement that is executed in connection with any of the foregoing, the
City shall not have any obligation or liability to the Owners with respect to the Indenture, the
preparation, execution, delivery or transfer of the Bonds or the disbursement of the Lease Payments
26
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Packet Pg. 570
31.b
by the Trustee to the Owners, or with respect to the performance by the Trustee of any right or
obligation required to be performed by it contained herein.
Section 7.07 No Liability of the Trustee to the Owners. Except as expressly provided
herein, the Trustee shall not have any obligation or liability to the Owners with respect to the
payment when due of the Lease Payments by the City, or with respect to the performance by the
Authority or the City of the other agreements and covenants required to be performed by them
contained in the Lease Agreement, the Site Lease or herein.
Section 7.08 Application of Amounts After Default. All payments that are received by
the Trustee with respect to the rental of the Leased Property after a default by the City pursuant to
Article VIII of the Lease Agreement (including, without limitation, any proceeds received in
connection with the sale, assignment or sublease of the Authority's right, title and interest in the Site
Lease), and all damages or other payments received by the Trustee for the enforcement of any rights
and powers of the Trustee under Article VIII of the Lease Agreement, shall be deposited into the
Lease Payment Fund and as soon as practicable thereafter applied, together with all other funds held
hereunder (except funds in the Rebate Fund):
(a) to the payment of all amounts due to the Trustee under Article VIII hereof;
a
(b) to the payment of all amounts that are then due for interest on the Bonds, in Z.
respect of which, or for the benefit of which, money has been collected (other than Bonds which have r
become payable prior to such event of default and money for the payment of which is held by the a
Trustee), ratably without preference or priority of any kind, according to the amounts of interest on n,
such Bonds due and payable; and
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(c) to the payment of all amounts that are then due for principal of the Bonds, in r -
respect of which, or for the benefit of which, money has been collected (other than Bonds which have w
become payable prior to such event of default and money for the payment of which is held by the m
Trustee), ratably without preference or priority of any kind, according to the amounts of principal of 10
such Bonds due and payable. _
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Section 7.09 Trustee May Enforce Claims Without Possession of Bonds. All rights of'•
action and claims under this Indenture or the Bonds may be prosecuted and enforced by the Trustee M
without the possession of any of the Bonds or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and v
counsel, be for the ratable benefit of the Owners in respect of which such judgment has been a
recovered. ?
Section 710 Limitation on Suits. No Owner of any Bond shall have any right to institute w
any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a a
receiver or Trustee, or for any other remedy hereunder, unless: (a) such Owner shall have previously 0.
given written notice to the Trustee of a continuing event of default; (b) the Owners of not less than z
25% of the aggregate principal amount of Bonds then Outstanding shall have made written request to
the Trustee to institute proceedings in respect of such event of default in its own name as Trustee
hereunder; (c) such Owner or Owners shall have afforded to the Trustee indemnity reasonably
satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with
1-4
27
Packet Pg.571
such request; (d) the Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such proceedings; and (e) no direction inconsistent with
such written request shall have been given to the Trustee during such 60 day period by the Owners of
a majority of the aggregate principal amount of Bonds then Outstanding; it being understood and
intended that no one or more Owners shall have any right in any manner whatever by virtue of, or by
availing ofi any provision of this Indenture to affect, disturb or prejudice the rights of any other
Owner, or to obtain or seek to obtain priority or preference over any other Owner or to enforce any
right under this Indenture, except in the manner herein provided and for the equal and ratable benefit
of all the Owners.
Section 7.11 Provisions Relating to Original Purchaser. Notwithstanding any other
provision of this Indenture, for so long as a majority in aggregate principal amount of the
Outstanding Series 2018 Bonds are owned by the Original Purchaser, the Original Purchaser shall be
entitled to exercise all of the powers, consents, rights and remedies to which the Owners of a
majority in aggregate principal amount of Series 2018 Bonds then Outstanding are entitled
hereunder, including the right, at any time, by an instrument in writing executed and delivered to the
Trustee, to direct the time, method and place of conducting all remedial proceedings on behalf of the
Owners available to the Trustee under this Indenture to be taken in connection with the enforcement
of the terms of this Indenture or exercising any trust or power conferred on the Trustee by this
Indenture.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Employment of the Trustee. The Authority hereby appoints and employs
the Trustee to receive, deposit and disburse the Lease Payments, to authenticate, deliver and transfer
the Bonds and to perform the other functions contained herein, all in the manner provided herein and
subject to the conditions and terns hereof. By executing and delivering this Indenture, the Trustee
accepts the appointment and employment that is referred to herein and accepts the rights and
obligations of the Trustee provided herein, subject to the conditions and terms hereof. Other than
when an event of default has occurred and is continuing, the Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee. In case an event of default has
occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the some degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
Section 8.02 Duties, Removal and Resignation of the Trustee. The Authority may, by
an instrument in writing, with the consent of the Original Purchaser for so long as a majority in
aggregate principal amount of the Outstanding Series 2018 Bonds are owned by the Original
Purchaser, remove the Trustee initially a party hereto and any successor thereto unless an event of
default shall have occurred and then be continuing, and shall remove the Trustee initially a party
hereto and any successor thereto if at any time: (a) requested to do so by an instrument or concurrent
instruments in writing signed by the Owners of a majority of the aggregate principal amount of
Bonds at the time Outstanding (or their attorneys duly authorized in writing); or (b) the Trustee shall
cease to be eligible in accordance with the following sentence, and shall appoint a successor Trustee.
The Trustee and any successor Trustee shall be a banking corporation or association or trust company
having (or if such banking corporation or association or trust company is a member of a bank holding
28
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31.b
company, its bank holding company has) a combined capital (exclusive of borrowed capital) and
surplus of at least $50,000,000 and subject to supervision or examination by federal or state
authorities. If such banking corporation or association 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 purposes of this Section the combined capital and surplus of
such bank, association 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.
The Trustee may at any time resign by giving written notice of such resignation to the
Authority and the City and by giving notice, by first class mail, postage prepaid, of such resignation
to the Owners at their addresses appearing on the Registration Books. Upon receiving such notice of
resignation, the Authority shall promptly appoint a successor Trustee by an instrument in writing;
provided, however, that in the event that the Authority does not appoint a successor Trustee within
30 days following receipt of such notice of resignation, the resigning Trustee may, at the expense of
the Authority, petition the appropriate court having jurisdiction to appoint a successor Trustee. Any
resignation or removal of a Trustee and appointment of a successor Trustee shall become effective
only upon acceptance of appointment by the successor Trustee.
Any corporation, association or agency into which the Trustee may be converted or merged,
or with which it may be consolidated, or to which it may sell or transfer its corporate trust business a
and assets as a whole or substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party, provided that such 0
entity meets the combined capital and surplus requirements of this Section, ipso facto, shall be and z
become successor trustee under this Indenture and vested with all of the trusts, powers, discretions, a,
immunities, privileges and all other matters as was its predecessor, without the execution or filing of
any instrument or any further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. U.
2
Section 8.03 Compensation of the Trustee. The City shall from time to time, subject to 3
any written agreement then in effect with the Trustee, pay the Trustee reasonable compensation for a°
all its services rendered hereunder and reimburse the Trustee for all its reasonable advances and c
expenditures (which shall not include "overhead expenses" except as such expenses are included as a
component of the Trustee's stated annual fees) hereunder, including but not limited to advances to
and reasonable fees and reasonable expenses of accountants, agents, appraisers, consultants or other r,
experts, and counsel not directly employed by the Trustee but an attorney or firm of attorneys
retained by the Trustee, employed by it in the exercise and performance of its rights and obligations
hereunder. The Trustee may take whatever legal actions are lawfully available to it directly against ua
the Authority or the City. 2
9
The City shall, to the extent permitted by law, indemnify and save the Trustee and its
officers, directors, agents and employees harmless against any liabilities, costs, suits, judgments,
damages, claims or expenses, including those of its attorneys, which it may incur in the exercise and
performance of its powers and duties hereunder, under the Lease Agreement, or in connection with
any document or transaction that is contemplated hereunder or thereunder, including the enforcement
of any remedies and the defense of any suit, and which are not due to its negligence or its
misconduct. The duty of the City to indemnify the Trustee shall survive the termination and
discharge of this Indenture and the earlier removal or resignation of the Trustee.
29
Packet Pg. 573
No provision of this Indenture shall 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 its rights or powers hereunder.
Upon an event of default, and only upon an event of default, the Trustee shall have a first lien
with right of payment prior to payment on account of principal of and premium, if any, and interest
on any Bond, upon the trust estate for the foregoing fees, charges and expenses incurred by it. When
the Trustee incurs expenses or renders services after the occurrence of an event of default, such
expenses and the compensation for such services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency, arrangement, moratorium,
reorganization or other debtor relief law.
Section 8.04 Protection of the Trustee. The Trustee shall be protected and skull incur no
liability in acting or proceeding in good faith upon any affidavit, bond, certificate, consent, notice,
request, requisition, resolution, statement, telegram, voucher, waiver or other paper or document
which it shall in good faith believe to be genuine and to have been adopted, executed or delivered by
the proper party or pursuant to any of the provisions hereof, and the Trustee shall be under no duty to
make any investigation or inquiry as to any statements contained or matters referred to in any such
instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy
of such statements. The Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Owners of the Bonds pursuant to
this Indenture, unless such Owners shall have offered to the Trustee security or indemnity,
reasonably satisfactory to the Trustee, against the reasonable costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction. The Trustee may consult with
counsel, who may be counsel to the Authority or the City, with regard to legal questions, and the
opinion of such counsel shall be full and complete authorization and protection in respect to any
action taken or suffered by it hereunder in good faith in accordance therewith.
The Trustee shall not be responsible for the sufficiency of the Bonds or the Lease Agreement,
or of the assignment made to it by the Assignment Agreement, or for statements made in any
preliminary or final official statement relating to the Bonds, or of the title to the Leased Property.
Whenever in the administration of its rights and obligations hereunder 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 Written Certificate of the City or a
Written Certificate of the Authority, and such certificate shall be full warrant to the Trustee for any
action taken or suffered under the provisions hereof upon the faith thereof but in its discretion the
Trustee may, in lieu thereof; accept other evidence of such matter or may require such additional
evidence as it deems reasonable.
The Trustee may buy, sell, own, hold and deal in any of the Bonds and may join in any action
which any Owner may be entitled to take with like effect as if the Trustee were not a party hereto.
The Trustee, either as principal or agent, may also engage in or be interested in any financial or other
transaction with the Authority or the City, and may act as agent, depository or trustee for any
committee or body of Owners or of owners of obligations of the Authority or the City as freely as if
it were not the Trustee hereunder.
30
31.b
Packet Pg. 574
31.b
The Trustee may, to the extent reasonably necessary, execute any of the trusts or powers
hereof and perform any rights and obligations required of it hereunder by or through agents,
attorneys or receivers, and shall be entitled to advice of counsel concerning all matters of trust and its
rights and obligations hereunder, and the Trustee shall not be answerable for the negligence or
misconduct of any such agent, attorney or receiver selected by it with reasonable care; provided,
however, that in the event of any negligence or misconduct of any such attorney, agent or receiver,
the Trustee shall in a commercially reasonable manner pursue all remedies of the Trustee against
such agent, attorney or receiver. The Trustee shall not be liable for any error of judgment made by it
in good faith unless it shall be proved that the Trustee was negligent in ascertaining the pertinent
facts.
The Trustee shall not be answerable for the exercise of any trusts or powers hereunder or for
anything whatsoever in connection with the funds established hereunder, except only for its own
willful misconduct or negligence.
The Trustee shall not be deemed to have knowledge of an event of default unless it has actual
knowledge thereof.
The Trustee may, on behalf of the Owners, intervene in any judicial proceeding to which the
Authority or the City is a party and which, in the opinion of the Trustee and its counsel, affects the
Bonds or the security therefor, and shall do so if requested in writing by the Owners of at least 5% of
the aggregate principal amount of Bonds then Outstanding, provided that the Trustee shall have no
duty to take such action unless it has been indemnified to its reasonable satisfaction against all risk or
liability arising from such action.
The Trustee's rights to immunities and protection from liability hereunder and its rights to
payment of its fees and expenses shall survive its resignation or removal and final payment or
defeasance of the Bonds. 1'
m
All indemnifications and releases from liability granted herein to the Trustee shall extend to a
the directors, officers, employees and agents of the Trustee. _
0
The permissive right of the Trustee to do things that are enumerated in this Indenture shall'.
not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or
willful default. The Trustee shall have no responsibility or liability with respect to any information,
statements or recitals in any offering memorandum or other disclosure material prepared or
distributed with respect to the issuance of these Bonds. The Trustee shall not be accountable for the
use or application by the Borrower of any of the Bonds or the proceeds thereof or for the use or v
application of any money paid over by the Trustee in accordance with the provisions of this a
Indenture or for the use and application of money that is received by any paying agent. z
The Trustee shall have the right to accept and act upon instructions, including funds transfer
instructions ("Instructions") given pursuant to this Indenture and delivered using Electronic Means.
("Electronic Means" shall mean the following communications methods: e-mail, facsimile
transmission, secure electronic transmission containing applicable authorization codes, passwords
and/or authentication keys issued by the Trustee, or another method or system specified by the
Trustee as available for use in connection with its services hereunder). The Authority and the City
shall provide to the Trustee an incumbency certificate listing officers with the authority to provide
such Instructions ("Authorized Officers") and containing specimen signatures of such Authorized
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Packet Pg. 575
Officers, which incumbency certificate shall be amended by the Authority whenever a person is to be
added or deleted from the listing. If the Authority elects to give the Trustee Instructions using
Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee's
understanding of such Instructions shall be deemed controlling. The Authority understands and
agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that
the Trustee shall conclusively presume that directions that purport to have been sent by an
Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by
such Authorized Officer. The Authority shall be responsible for ensuring that only Authorized
Officers transmit such Instructions to the Trustee and that the Authority and all Authorized Officers
are solely responsible to safeguard the use and confidentiality of applicable user and authorization
codes, passwords and/or authentication keys upon receipt by the Authority. The Trustee shall not be
liable for any losses, costs or expenses arising directly or indirectly from the Trustee's reliance upon
and compliance with such Instructions notwithstanding the fact that such directions conflict or are
inconsistent with a subsequent written instruction. The Authority agrees: (i) to assume all risks
arising out of the use of Electronic Means to submit Instructions to the Trustee, including without
limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and
misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the
various methods of transmitting Instructions to the Trustee and that there may be more secure
methods of transmitting Instructions than the method(s) selected by the Authority; (iii) that the
security procedures (if any) to be followed in connection with its transmission of Instructions provide
to it a commercially reasonable degree of protection in light of its particular needs and
circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or
unauthorized use of the security procedures.
The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder
if and to the extent its performance hereunder is prevented by reason of force majeure. The term
"force majeure" means an occurrence that is beyond the control of the Trustee and could not have
been avoided by exercising due care. Force majeure shall include but not be limited to acts of God,
terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences.
In acting or omitting to act pursuant to the Assignment Agreement, the Lease Agreement,
Site Lease or any other document executed in connection herewith or therewith, the Trustee shall be
entitled to all of the rights, immunities and indemnities that accorded to it under this Indenture and
the Lease Agreement, including, but not limited to, this Article VIII.
ARTICLE IX
MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted.
(a) This Indenture and the rights and obligations of the Authority, the City, the
Owners of the Bonds and the Trustee may be modified or amended from time to time and at any time
by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into with the
written consent of the Owners of a majority in aggregate principal amount of all Bonds then
Outstanding, which shall have been filed with the Trustee. No such modification or amendment
shall: (i) extend the fixed maturity of any Bonds, reduce the amount of principal thereof or the rate of
interest thereon or extend the time of payment, without the consent of the Owner of each Bond so
affected; or (ii) reduce the aforesaid percentage of Bonds the consent of the Owners of which is
32
31.b
Packet Pg. 576
31.b
required to effect any such modification or amendment; or (iii) permit the creation of any lien on the
Lease Payments and other assets pledged under this Indenture prior to or on a parity with the lien
created by this Indenture or deprive the Owners of the Bonds of the lien created by this Indenture on
such Lease Payments and other assets (except as expressly provided in this Indenture), without the
consent of the Owners of all of the Bonds then Outstanding. It shall not be necessary for the consent
of the Bond Owners to approve the particular form of any Supplemental Indenture, but it shall be
sufficient if such consent shall approve the substance thereof.
(b) This Indenture and the rights and obligations of the Authority, the City, the
Trustee and the Owners of the Bonds may also be modified or amended from time to time and at any
time by a Supplemental Indenture, which the Authority, the City and the Trustee may enter into, with
the consent of the Original Purchaser for so long as a majority in aggregate principal amount of the
Outstanding Series 2018 Bonds are owned by the Original Purchaser, but otherwise without the
consent of any Series 2018 Bond Owners, for any one or more of the following purposes
(i) to add to the covenants and agreements of the Authority or the City
contained in this Indenture 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
that is reserved to or conferred upon the Authority or the City herein;
(ii) 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;
(iii) to provide for the issuance of one or more Series of Additional Bonds,
and to provide the terns and conditions under which such Series of Additional Bonds may be issued,
subject to and in accordance with the provisions of Article III hereof; _
U.
V,
(iv) to modify, amend or supplement this Indenture in such manner as to d
permit the qualification hereof under the Trust Indenture Act of 1939, as amended, or any similar a
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; 'o
(v) to modify, amend or supplement this Indenture in such manner as to M
cause interest on the Bonds to be excludable from gross income for purposes of federal income
taxation by the United States of America; and r
(vi) in any other respect whatsoever as the Authority and the City may W
V
deem necessary or desirable, provided that such modification or amendment does not materially z
adversely affect the interests of the Bond Owners hereunder, in the Opinion of Counsel filed with the z
Authority, the City and the Trustee. W
(c) Promptly after the execution by the Authority, the City and the Trustee of any
Supplemental Indenture, the Trustee shall mail a notice (the form of which shall be furnished to the
Trustee by the Authority), by fust class mail postage prepaid, setting forth in general terms the
substance of such Supplemental Indenture, to the Owners of the Bonds at the respective addresses
shown on the Registration Books. Any failure to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such Supplemental Indenture.
33
Packet Pg. 577
(d) No Supplemental Indenture shall modify any of the rights or obligations of
the Trustee without its prior written consent.
(e) In executing, or accepting the additional trusts created by, any Supplemental
Indenture permitted by this Article or the modification thereby of the trusts created by this Indenture,
the Trustee shall receive, and shall be fully protected in relying upon, an Opinion of Counsel that is
addressed and delivered to the Trustee stating that the execution of such Supplemental Indenture is
permitted by and in compliance with this Indenture and that the execution and delivery thereof will
not in and of itself adversely affect the exclusion from federal gross income tax of interest on the
Bonds.
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 Authority,. the City, the Trustee and all Owners of Bonds Outstanding shall
thereafter be determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all of 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 Authority so
determines shall, bear a notation by endorsement or otherwise in form approved by the Authority and
the Trustee as to any modification or amendment provided for in such Supplemental Indenture, and,
in that case, upon demand of the Owner of any Bonds Outstanding at the time of such execution and
presentation of such Owner's Bonds for such purpose at the Office of the Trustee a suitable notation
shall be made on such Bonds. If the Supplemental Indenture shall so provide, new Bonds so
modified as to conform, in the opinion of the Authority and the Trustee, to any modification or
amendment contained in such Supplemental Indenture, shall be prepared and executed by the
Authority and authenticated by the Trustee, and upon demand of the Owners of any Bonds then
Outstanding, shall be exchanged at the Office of the Trustee, without cost to any Bond Owner, for
Bonds then Outstanding, upon surrender for cancellation of such Bonds, in equal aggregate principal
amount of the same interest rate and maturity.
Section 9.04 Amendment of Particular Bonds. The provisions of this Article shall not
prevent any Bond Owner from accepting any amendment as to the particular Bonds held by such
Owner.
ARTICLE X
DEFEASANCE
Section 10.01 Discharge of Indenture. If the Authority shall pay or cause to be paid or
there shall otherwise be paid to the Owners of all Outstanding Bonds the principal thereof and the
interest and premium, if any, thereon at the times and in the manner stipulated herein and therein,
then the Owners of such Bonds shall cease to be entitled to the pledge of the Lease Payments and the
other assets as provided herein, and all agreements, covenants and other obligations of the Authority
and the City to the Owners of such Bonds hereunder shall thereupon cease, terminate and become
void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the
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31.b
Packet Pg. 578
31.b
Authority and the City all such instruments as may be necessary or desirable to evidence such
discharge and satisfaction, and the Trustee shall pay over or deliver to the City all money or
securities held by it pursuant hereto which are not required for the payment of the principal of and
interest and premium, if any, on such Bonds.
Subject to the provisions of the above paragraph, when any of the Bonds shall have been paid
and if, at the time of such payment, the Authority and the City shall have kept, performed and
observed all of the covenants and promises in such Bonds and in this Indenture required or
contemplated to be kept, performed and observed by them on or prior to that time, then this Indenture
shall be considered to have been discharged in respect of such Bonds and such Bonds shall cease to
be entitled to the lien of this Indenture and such lien and all covenants, agreements and other
obligations of the Authority and the City hereunder shall cease, terminate become void and be
completely discharged as to such Bonds.
Notwithstanding the satisfaction and discharge of this Indenture or the discharge of this
Indenture in respect of any Bonds, those provisions of this Indenture relating to the maturity of the
Bonds, interest payments and dates thereof; exchange and transfer of Bonds, replacement of
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mutilated, destroyed, lost or stolen Bonds, the safekeeping and cancellation of Bonds,
non -presentment of Bonds, and the duties of the Trustee in connection with all of the foregoing, shall
remain in effect and shall be binding upon the Trustee and the Owners of the Bonds and the Trustee
a
shall continue to be obligated to hold in trust any moneys or investments then held by the Trustee for
c
the payment of the principal of and interest and premium, if any, on the Bonds, to pay to the Owners
,00
of Bonds the funds so held by the Trustee as and when such payment becomes due. Notwithstanding
a
the satisfaction and discharge of this Indenture or the discharge of this Indenture in respect of any
•,,
Bonds, those provisions of this Indenture relating to the compensation and indemnity of the Trustee
shall remain in effect and shall be binding upon the Trustee, the City and the Authority.
c
Section 10.02 Bonds Deemed To Have Been Paid. If moneys shall have been set aside
U.
and held by the Trustee for the payment or redemption of any Bonds and the interest thereon at the
3
maturity or redemption date thereof such Bonds shall be deemed to have been paid within the
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meaning and with the effect provided in Section 10.01 hereof, Any Outstanding Bonds shall prior to
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the maturity date or redemption date thereof be deemed to have been paid within the meaning of and
with the effect expressed in Section 10.01 hereof if (a) in case any of such Bonds are to be redeemed
T
on any date prior to their maturity date, the Authority shall have given to the Trustee in form
satisfactory to it irrevocable instructions to mail, in accordance with the provisions of Section 4.02
hereof, notice of redemption of such Bonds; (b) there shall have been deposited with the Trustee
either: (i) money in an amount which shall be sufficient (without the requirement for verification that
w
is described in clause (ii); or (ii) Federal Securities that are not subject to redemption other than at the
z
option of the holder thereof, the interest on and principal of which when paid will provide money
a
which, together with the money, if any deposited with the Trustee at the same time, shall, as verified
in writing by an independent certified public accountant, be sufficient, to pay when due the interest to
w
become due on such Bonds on and prior to the maturity date or redemption date thereof, as the case
may be, and the principal of and premium, if any, on such Bonds; and (c) in the event that such
a
Bonds are not by their terms subject to redemption within the next succeeding 60 days, the Authority
z
shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as
z
practicable, a notice to the owners of such Bonds that the deposit required by clause (b) above has
been made with the Trustee and that such Bonds, are deemed to have been paid in accordance with
this Section and stating the maturity date or redemption date upon which money is to be available for
E
the payment of the principal of and premium, if any, on such Bonds.
35
Packet Pg. 579
Section 10.03 Payment of Bonds After Discharge of Indenture. Notwithstanding any
provisions of this Indenture, to the extent permitted by law, any moneys held by the Trustee in trust
for the payment of the principal of or premium or interest on, any Bonds and remaining unclaimed
for two years after the date of deposit of such moneys, shall be repaid to the Authority (without
liability for interest) 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 Authority as aforesaid, the Trustee may (at the cost of the Authority) first mail, by first
class mail postage prepaid, to the Owners of Bonds which have not yet been paid, at the respective
addresses shown on the Registration Books, 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 Authority of the moneys held for the payment thereof.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties. Nothing contained herein,
expressed or implied, is intended to give to any person other than the Authority, the City, the Trustee
and the Owners any claim, remedy or right under or pursuant hereto, and any agreement, condition,
covenant or term required herein to be observed or performed by or on behalf of the Authority or the
City shall be for the sole and exclusive benefit of the Trustee and the Owners.
Section 11.02 Successor Deemed Included in all References to Predecessor. Whenever
the Authority, the City or the Trustee, or any officer thereof, is named or referred to herein, such
reference shall be deemed to include the successor to the powers, duties and functions that are
presently vested in the Authority, the City or the Trustee, or such officer, and all agreements,
conditions, covenants and terms required hereby to be observed or performed by or on behalf of the
Authority, the City or the Trustee, or any officer thereof, shall bind and inure to the benefit of the
respective successors thereof whether so expressed or not.
Section 11.03 Execution of Documents by Owners. Any declaration, request or other
instrument which is permitted or required herein to be executed by Owners may be in one or more
instruments of similar tenor and may be executed by Owners in person or by their attorneys
appointed in writing. The fact and date of the execution by any Owner or his attorney of any
declaration, request or other instrument or of any writing appointing such attorney may be proved by
the certificate of any notary public or other officer authorized to take acknowledgments of deeds to
be recorded in the state or territory in which he purports to act that the person signing such
declaration, request or other instrument or writing 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,
or by such other proof as the Trustee may accept which it may deem sufficient.
The ownership of any Bonds and the amount, payment date, number and date of owning the
same may be proved by the Registration Books.
Any declaration, request or other instrument in writing of the Owner of any Bond shall bind
all future Owners of such Bond with respect to anything done or suffered to be done by the
Authority, the City or the Trustee in good faith and in accordance therewith.
RR
Packet Pg. 580
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Section 11.04 Waiver of Personal Liability. Notwithstanding anything contained herein to
the contrary, no member, officer or employee of the Authority or the City shall be individually or
personally liable for the payment of any moneys, including without limitation, the principal of or
interest on the Bonds, but nothing contained herein shall relieve any member, officer or employee of
the City or the Authority from the performance of any official duty provided by any applicable
provisions of law, by the Lease Agreement or hereby.
Section 11.05 Destruction of Bonds. Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the Authority of any Bonds, the Trustee may, in lieu
of such cancellation and delivery, destroy such Bonds.
Section 11.06 Funds and Accounts. Any fund or account required to be established and
maintained herein by the Trustee may be established and maintained in the accounting records of the
Trustee either as an account or a fund, and may, for the purposes of such accounting records, any
audits thereof and any reports or statements with respect thereto, be treated either as an account or a
fund, but all such records with respect to all such funds and accounts shall at an times be maintained
in accordance with sound accounting practice and with due regard for the protection of the security
of the Bonds and the rights of the Owners.
The Trustee may commingle any of the moneys held by it hereunder for investment purposes
only, provided, however, that the Trustee shall account separately for the moneys in each fund or
account established pursuant to this Indenture. The Trustee may establish such funds and accounts as
it deems necessary or appropriate to perform its obligations hereunder. a
Section 11.07 Article and Section Headings Gender and References. The singular form
of any word used herein, including the terms defined in Section 1.01 hereof, shall include the plural,
and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender =
shall include correlative words of the other genders. The headings or titles of the several Articles and i
Sections hereof and the table of contents appended hereto shall be solely for convenience of 3
reference and shall not affect the meaning, construction or erect hereof. All references herein to a°
"Articles," "Sections," subsections or clauses are to the corresponding Articles, Sections, subsections
or clauses hereof, and the words "hereby," "herein," "hereof," "hereto," "herewith," "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any particular Article,
Section, subsection or clause thereof.
Section 11.08 Partial Invalidity. If any one or more of the agreements, conditions,
covenants or terms required herein to be observed or performed by or on the part of the Authority,
the City or the Trustee shall be contrary to law, then such agreement or agreements, such condition or
conditions, such covenant or covenants or such term or terms shall be null and void to the extent
contrary to law and shall be deemed separable from the remaining agreements, conditions, covenants
and terms hereof and shall in no way affect the validity hereof or of the Bonds, and the Owners shall
retain all the benefit, protection and security afforded to them under any applicable provisions of law.
The Authority, the City and the Trustee hereby declare that they would have executed this Indenture,
and each and every Article, Section, paragraph, subsection, sentence, clause and phrase hereof and
would have authorized the execution and delivery of the Bonds pursuant hereto irrespective of the
fact that any one or more Articles, Sections, paragraphs, subsections, sentences, clauses or phrases
hereof or the application thereof to any person or circumstance may be held to be unconstitutional,
unenforceable or invalid.
37
Packet Pg. 581
Section 11.09 DisqualiSed Bonds. In determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are actually known by the Trustee to be owned or held by
or for the account of the Authority or the City, or by any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Authority or the City, shall be
disregarded and deemed not to be Outstanding for the purpose of any such determination, except
that, in determining whether the Trustee shall be protected in relying upon any such demand, request,
direction, consent or waiver of an Owner, only Bonds which the Trustee actually knows to be owned
or held by or for the account of the Authority or the City, or by any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with, the Authority or the
City, shall be disregarded unless all Bonds are so owned or held, in which case such Bonds shall be
considered Outstanding for the purpose of 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 Authority or the City. 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. Upon request of
the Trustee, the Authority and the City shall specify in a Written Certificate of the City and Authority
those Bonds disqualified pursuant to this Section and the Trustee may conclusively rely on such
Certificate.
Section 11.10 Money Held for Particular Bonds. The money held by the Trustee for the
payment of the interest, principal or premium 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 Owners of the Bonds
entitled thereto, subject, however, to the provisions of Section 10.03 hereof but without any liability
for interest thereon.
Section 11.11 Payment on Non -Business Days. In the event that any payment is required
to be made hereunder on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day with the same effect as if made on such non -Business Day.
Section 11.12 California Law. This Indenture shall be construed and governed in
accordance with the laws of the State of California.
Section 11.13 Notices. All written notices to be given hereunder shall be given by mail to
the party entitled thereto at its address set forth below, or at such other address as such party may
provide to the other parties in writing from time to time, namely:
If to the City: City of San Bernardino
290 North D Street
San Bernardino, California 92401
Attention: Finance Director
If to the Authority: San Bernardino Joint Powers Financing Authority
c/o City of San Bernardino
290 North D Street
San Bernardino, California 92401
Attention: Executive Director
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If to the Trustee: U.S. Bank National Association
633 West Fifth Street, 20 Floor, LM-CA-T24T
Los Angeles, California 40071
Attention: Global Corporate Trust Services
Ref: City of San Bernardino 2018 Bonds
If to the Original Purchaser: Western Alliance Business Trust, a wholly owned affiliate of
Western Alliance Bank, an Arizona corporation
c/o Western Alliance Bank
One E. Washington Street, Suite 1400
Phoenix, Arizona 85004
Attn: Municipal Finance
Each such notice, statement, demand, consent, approval, authorization, offer, designation,
request or other communication hereunder shall be deemed delivered to the party to whom it is
addressed: (a) if personally served or delivered, upon delivery; (b) if given by electronic
communication, whether by telex, telegram or telecopier, upon the sender's receipt of an appropriate
answer back or other written acknowledgment; (c) if given by registered or certified mail, return
receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is
deposited with the United States mail; (d) if given by overnight courier, with courier charges prepaid,
24 hours after delivery to said overnight courier; or (e) if given by any other means, upon delivery at
the address specified in this Section.
Section 11.14 Execution in Counterparts. This Indenture may be executed in several a,
counterparts, each of which shall be deemed an original, and all of which shall constitute but one and
the same instrument.
c
Section 11.15 Jury Trial Waiver. Each of the City, the Authority and the Trustee hereby LL
irrevocably waives, to the fullest extent permitted by law, any and all right to trial by jury in any 3
legal proceeding arising out of or relating to this Indenture, the Bonds or the transactions ai
contemplated hereby or thereby involving or affecting the Original Purchaser or the rights or interests c
of the Original Purchaser, including the rights and interests of the Original Purchaser as an Owner.
Each of the City, the Authority and the Trustee further agrees that, in the event of litigation, it will
not personally or through its agents or attorneys seek to repudiate the validity of this Section, and it V-
acknowledges that it freely and voluntarily entered into this agreement to waive trial by jury as
v
provided herein in order to induce the Original Purchaser to purchase the Series 2018 Bonds. If and
to the extent that the foregoing waiver of the right to a jury trial is unenforceable for any reason in w
such foram, each of the City, the Authority and the Trustee hereby consent to the adjudication of any z
and all claims pursuant to judicial reference as provided in California Code of Civil Procedure z
Section 638, and the judicial referee shall be empowered to hear and determine any and all issues in M
such reference whether fact or law. Each of the City, the Authority and the Trustee represents that it w
has reviewed this waiver and consent and each knowingly and voluntarily waives its jury trial rights y
and consents to judicial reference following the opportunity to consult with legal counsel of its a
choice on such matters. The referee shall be a retired California state court judge or an attorney
licensed to practice law in the State of California with at least ten years' experience practicing o
commercial law. In the event of litigation, a copy of this Indenture may be filed as a written consent
to a trial by the court or to judicial reference under California Code of Civil Procedure Section 638 as
provided herein.
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Packet Pg. 584
IN WITNESS WHEREOF, the Authority and the City have caused this Indenture to be
signed in their respective names by their representative thereunto duly authorized, and the Trustee, in
token of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its
corporate name by its officer thereunto duly authorized, all as of the day and year first above written.
ATTEST:
Secretary
ATTEST:
City Clerk
SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY
By: -
Chairperson
CITY OF SAN BERNARDINO
City Manager
[SIGNATURES CONTINUED ON NEXT PA GEJ
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[SIGNATURE PAGE CONTINUED.J
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Authorized Officer
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No.
FORM OF SERIES 2018 BOND
TEE REGISTERED OWNER OF THIS BOND ACKNOWLEDGES AND AGREES THAT
THIS BOND MAY ONLY BE TRANSFERRED UPON SATISFACTION OF THE
REQUIREMENTS IN THE INDENTURE, INCLUDING THE DELIVERY TO THE TRUSTEE
OF A PURCHASER'S CERTIFICATE IN THE FORM REQUIRED BY THE INDENTURE
ANY TRANSFER OF THIS BOND W VIOLATION OF THE TRANSFER RESTRICTIONS
CONTAINED IN THE INDENTURE SHALL BE VOID AND OF NO EFFECT:
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
2018 LEASE REVENUE REFUNDING BOND
INTEREST RATE MATURITY DATE DATED DATE
% January 1, 2023 January_, 2018
31.b
REGISTERED OWNER: WESTERN ALLIANCE BUSINESS TRUST, A WHOLLY OWNED
AFFILIATE OF WESTERN ALLIANCE BANK, AN ARIZONA
CORPORATION
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PRINCIPAL AMOUNT: DOLLARS LL
d
The San Bernardino Joint Powers Financing Authority (the "Authority"), for value received, c
hereby promises to pay, solely from the Lease Payments (as hereinafter defined) or amounts in a
certain funds and accounts that are held under the Indenture (as hereinafter defined), to the
Registered Owner that is identified above or registered assigns (the "Registered Owner'j; on the �
Maturity Date that is identified above or on any earlier redemption date, the Principal Amount that is T
identified above in lawful money of the United States of America; and to pay interest thereon at the
Interest Rate that is identified above in like lawful money from the date hereof payable semiannually
on July 1, 2018 and each January 1 and July 1 thereafter (the "Interest Payment Dates"), until
payment of such Principal Amount in full. This Bond shall bear interest from the Interest Payment tWi
Date next preceding the date of authentication of this Bond (unless this Bond is authenticated on or a
before an Interest Payment Date and after the close of business on the fifteenth calendar day of the z
month next preceding such Interest Payment Date, whether or not such day is a Business Day, in LL
which event it shall bear interest from such Interest Payment Date, or unless this Bond is W
authenticated on or prior to June 15, 2018, in which event it shall bear interest from the Dated Date
identified above; provided, however, that if, at the time of authentication of this Bond, interest is in a
default on this Bond, interest on this Bond shall be payable from the date to which interest hereon has z
been paid in full, payable on each Interest Payment Date). The Principal Amount hereof is payable o
upon surrender hereof upon maturity or earlier redemption at the Office of the Trustee (as hereinafter
defined). Interest hereon is payable by wire or check of U.S. Bank National Association, as trustee
(the "Trustee"), mailed by first class mail, postage prepaid, on each Interest Payment Date to the
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Registered Owner hereof at the address of the Registered Owner shown on the Registration Books at
the close of business on the fifteenth calendar day of the month next preceding such Interest Payment
Date. "Office of the Trustee" means the principal corporate trust office of the Trustee in
Los Angeles, California, or such other office as may be specified to the Authority and the City of San
Bernardino (the "City") by the Trustee in writing, except that with respect to presentation of Bonds
for payment or for registration of transfer and exchange, such team shall mean the office or the
agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as
specified to the Authority and the City by the Trustee in writing.
This Bond is one of a series of a duly authorized issue of bonds issued for the purpose of
refinancing the acquisition, construction and installation of certain capital improvements of the City,
and is one of the series of bonds designated "San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds" (the "Series 2018 Bonds") in the aggregate principal amount of
$ . The Series 2018 Bonds have been issued pursuant to the Indenture, dated as of January
1, 2018 (the "Indenture"), by and among the Authority, the City and the Trustee, and this reference
incorporates the Indenture herein, and by acceptance hereof the owner of this Bond assents to said
terms and conditions. Pursuant to and as more particularly provided in the Indenture, additional
bonds ("Additional Bonds"), may be issued by the Authority secured by a lien on a parity with the
lien securing the Series 2018 Bonds. The Series 2018 Bonds and any Additional Bonds are
collectively referred to as the "Bonds." The Indenture is entered into, and this Bond is issued under,
the Marks -Roos Local Bond Pooling Act of 1985 (the "Act") and the laws of the State of California.
So long as this Bond is owned by Western Alliance Business Trust, a wholly owned affiliate
of Western Alliance Bank, an Arizona corporation, or its successors and assigns (the "Original
Purchaser'), the following shall apply: (a) this Bond is not required to be presented and surrendered
to the Trustee for payment at any time prior to the final maturity thereof j and (b) the Trustee will pay
the principal of and interest on this Bond by wire transfer to the Original Purchaser in accordance
with the wire transfer instructions provided by the Original Purchaser to the Trustee from time to
time; provided that principal on this Bond which is payable at maturity shall be made only upon
presentation and surrender hereof in accordance with the Indenture.
Pursuant to the Indenture, the principal of and interest on the Bonds are payable solely from
certain lease payments (the "Lease Payments") under and pursuant to that certain Lease Agreement,
dated as of January 1, 2018 (the "Lease Agreement"), by and between the City, as lessee, and the
Authority, as lessor, all of which rights to receive such Lease Payments have been assigned without
recourse by the Authority to the Trustee. Subject only to the provisions of the Indenture permitting
the application thereof for the purposes and on the terms and conditions set forth therein, all of the
Lease Payments and any other amounts (including proceeds of the sale of the Bonds) held in the
Lease Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund established
under the Indenture are pledged to secure the payment of the principal of, premium, if any, and
interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act.
Said pledge constitutes a first lien on such assets.
The Series 2018 Bonds are authorized to be issued in the form of fully registered bonds
without coupons in denominations of $1 or any integral multiple thereof ("Authorized
Denominations").
The Series 2018 Bonds shall be subject to redemption, in whole or in part, on any date, in
Authorized Denominations, from and to the extent of any net insurance proceeds received by the
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Trustee with respect to all or a portion of the property leased under the Lease Agreement and
deposited by the Trustee in the Redemption Fund established under the Indenture, at a Redemption
Price equal to the principal amount of the Series 2018 Bonds to be redeemed, plus accrued interest
thereon to the date of redemption, without premium.
The Series 2018 Bonds are not subject to optional redemption prior to maturity.
The Series 2018 Bonds are subject to mandatory sinking fund redemption in part (by lot) on
January 1, 20 and each January 1 thereafter, in integral multiples of $1 at a Redemption Price of
the principal amount thereof plus accrued interest to the date fixed for redemption, without premium,
in accordance with the following schedule:
Redemption Date Principal
(January 1) Amount
2023*
* Final Maturity.
If, during the Fiscal Year immediately preceding one of the redemption dates specified
above, the Authority purchases Series_ 2018 Bonds, at least 45 days prior to the redemption date, the
Authority will notify the Trustee as to the principal amount purchased and the amount of Series 2018
Bonds so purchased shall be credited at the time of purchase, to the extent of the full principal
amount thereof, to reduce such upcoming mandatory sinking fund redemption payment for the Series
2018 Bonds so purchased. All Series 2018 Bonds purchased pursuant to the Indenture will be
cancelled.
The Trustee on behalf and at the expense of the Authority shall mail (by first class mail)
notice of any redemption to the respective owners of any Series 2018 Bonds designated for
redemption, at their respective addresses appearing on the Registration Books, at least 20 but not
more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to
receive any such notice so mailed, nor any defect therein, shall affect the validity of the proceedings
for the redemption of such Series 2018 Bonds or the cessation of accrual of interest thereon from and
after the date fixed for redemption. The Redemption Price of the Series 2018 Bonds to be redeemed
shall be paid only upon presentation and surrender thereof at the Office of the Trustee. From and
after the date fixed for redemption of any Series 2018 Bonds, interest on such Series 2018 Bonds will
cease to accrue and become payable.
Subject to the limitations and upon payment of the charges, if any, provided in the Indenture,
fully registered Series 2018 Bonds may be exchanged at the Office of the Trustee for a like aggregate
principal amount and maturity of fully registered Series 2018 Bonds of other authorized
denominations.
This Bond is transferable by the Registered Owner hereof, in person or by his duly authorized
attorney, but only in the manner, subject to the limitations and upon payment of the charges provided
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in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new fully
registered Series 2018 Bond or Series 2018 Bonds, in Authorized Denominations, for the same
aggregate principal amount will be issued to the transferee in exchange herefor. The Authority, the
City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all
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purposes, and the Authority, the City and the Trustee shall not be affected by any notice to the
contrary.
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The Indenture and the rights and obligations of the Authority, the City, the owners of the
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Bonds and 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: (a) extend the fixed maturity of any Bonds, reduce the principal thereof or the rate
of interest thereon or extend the time of payment, without the consent of the owner of each Bond so
affected; or (b) reduce the percentage of Bonds the consent of the owners of which is required to
effect any such amendment or modification; or (c) permit the creation of any lien on the Lease
[rf
Payments and other assets pledged under the Indenture prior to or on a parity with the lien created by
the Indenture or deprive the owners of the Bonds of the lien created by the Indenture on such the
Lease Payments and such other assets (except as expressly provided in the Indenture), without the
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consent of the owners of all Bonds then outstanding.
o
The Indenture contains provisions permitting the Authority to make provision for the
payment of interest on, and the principal and premium, if any, of any of the Bond so that such Bonds
shall no longer be deemed to be outstanding under the terms of the Indenture.
All obligations of the Authority under the Indenture and the Bonds shall be special
obligations of the Authority, payable solely from Lease Payments and the other assets pledged
therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the
City or the State of California, or any political subdivision thereof, is pledged to the payment of the
Bonds.
It is hereby certified that all of the things, conditions and acts that are required to exist, to
have happened or to have been performed precedent to and in the issuance of this Bond do exist,
have happened or have been performed in due and regular time, form and manner as required by the
Joint Exercise of Powers Agreement, and the laws of the State of California and that the amount of
this Bond, together with all other indebtedness of the Authority, does not exceed any limit under any
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 hereon endorsed shall have been
manually signed by the Trustee.
IN WITNESS WHEREOF, the Authority has caused this Bond to be signed in its name and
on its behalf by the facsimile signatures of its Chair and Secretary, all as of the Dated Date identified
above.
SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY
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Attest:
Secretary
M
Chair
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the Series 2018 Bonds described in the within -mentioned Indenture and
registered on the Registration Books.
Date: January 2018 U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
Authorized Signatory
A -S
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[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a
Professional Corporation, Newport Beach, California, in connection with the issuance of; and dated
as of the date of the original delivery of, the Bonds. A signed copy is on file in my office.
Secretary of the San Bernardino Joint Powers Financing
Authority
[FORM OF ASSIGNMENT]
For value, received the undersigned
hereby sells, assigns and transfers unto
whose address and social security or other tax
identifying number is , the within -mentioned Bond and hereby
irrevocably constitute(s) and appoint(s) attorney, to
transfer the same on the registration books of the Trustee with full power of substitution in the
premises.
Dated:
Signature Guaranteed:
Note: Signature(s) must be guaranteed by an eligible Note: The signature(s) on this Assignment must
guarantor. correspond with the name(s) as written on the face of the
within pond in every particular without alteration or
enlargement or any change whatsoever.
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EMMIT B
DESCRIPTION OF THE PROJECT
[TO BE UPDATED]
- Upgrades and expansion of City information technology system, including development of
network infrastructure, implementation of Microsoft Windows-based office system, upgrades to the
Computer Aided Dispatch/Records Management System and providing Intemet access
- Upgrades to City Hall elevators
- Other capital improvements
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[TO BE INSERTED]
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EXHIBIT C
FORM OF PURCHASER'S CERTIFICATE
e
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RECORDING REQUESTED BY:
City of San Bernardino
AND WHEN RECORDED RETURN TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Brian P. Forbath, Esq.
SPACE ABOVE FOR RECORDER'S USE ONLY
AD 0 D
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DID
THIS COVER SHEET ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
($3.00 Additional Recording Fee Applies)
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Packet Pg. 595
FULL RECONVEYANCE
by
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY FOR THE CITY OF SAN
BERNARDINO
Dated as of January 1, 2018
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FULL RECONVEYANCE
THIS FULL RECONVEYANCE (this "Full Reconveyance'), dated as of January 1, 2018
and effective as of the date of recordation hereof is by the SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY FOR THE CITY OF SAN BERNARDINO, a redevelopment
successor agency that is duly organized and existing under the laws of the State of California (the
"Agency").
RECITALS
A. The City of San Bernardino, a municipal corporation and charter city that is duly
organized and existing under and by virtue of the Constitution and laws of the State of California (the
"City"), and the Redevelopment Agency for the City of San Bernardino (the "RDA") entered into a
Ground Lease, dated as of December 1, 1996 (the "Ground Lease"), which was recorded on
December 17, 1996 as Instrument No. 19960462012 in the Official Records of the County of San
Bernardino, State of California (the "Official Records"). Pursuant to the Ground Lease, the City
leased certain property described therein (as shown on Exhibit A hereto) (the "Property") to the
RDA.
B. The RDA and the San Bernardino Joint Powers Financing Authority (the
"Authority") entered into a Site and Facility Lease, dated as of December 1, 1996 (the "Site
Lease"), which was recorded on December 17, 1996 as Instrument No. 19960462013 of the Official
Records. Pursuant to the Site Lease, the RDA subleased the Property to the Authority.
C. The Authority and the City entered into a Lease Agreement, dated as of December 1,
1996 (as amended, the "Lease"), which was recorded on December 17, 1996 as Instrument No.
19960462014 (and re-recorded on March 26, 1997 as Instrument No. 19970104310) in the Official
Records. Pursuant to the Lease, the Authority sub -subleased the Property to the City.
D. The Authority assigned its interest in the Lease to U.S. Bank National Association, as
trustee (the "Trustee") for the San Bernardino Joint Powers Financing Authority Lease Revenue
Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds"). The City's payments under
the Lease secure the repayment of the 1996 Bonds.
E. By virtue of California Assembly Bill No. 26, which was enacted on June 29, 2011 as
Chapter 5, Statutes of 2011, together with a companion bill, California Assembly Bill No. 27, as such
legislation was interpreted by the California Supreme Court in California Redevelopment
Association, et at v. Matosantos, et al. (53 Cal. 4th 231 (December 29, 2011)), the RDA was
dissolved. The Agency was thereafter designated as the successor entity to the RDA and,
accordingly, succeeded to the RDA's interest in the Ground Lease and the Site Lease.
F. The City has notified the Agency of its intention to prepay, on January [9], 2018 (the
"Defeasance Date"), all of the City's obligations under the Lease pursuant to Section 10.2 of the
Lease, which will cause the defeasance of the 1996 Bonds as of the Defeasance Date in accordance
with Section 10.1 of the Lease.
G. The City has caused to be delivered moneys that will be sufficient to prepay all of the
City's obligations under the Lease as of the Defeasance Date (the "Defeasance Amount").
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H. Section 1 of the Ground Lease provides that the Ground Lease shall run
coterminously with the Lease.
I. Payment by the City of the Defeasance Amount will cause the termination of the a
Lease.
J. In order to reflect the defeasance of the City's obligations under the Lease and the
termination of the Lease and the Ground Lease, the Agency now desires to reconvey the interest that
was granted under the Ground Lease.
NOW, THEREFORE, the Agency makes this Full Reconveyance as follows:
1. Recordation. This )hill Reconveyance shall not be recorded until the City has caused
the deposit of the Defeasance Amount with the Trustee.
2. Reconveyance of Ground Lease. Effective as of the date of recordation of this Full
Reconveyance, the Agency hereby reconveys without warranty to the person or persons legally
entitled thereto all estate now held by it under the Ground Lease, and from and after the date hereof,
the Agency shall have no further interest in the Property.
[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK)
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IN WITNESS WHEREOF, this Full Reconveyance has been executed by the Agency, as of
the date first above written.
ATTEST:
Secretary
SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY FOR THE CITY OF
SAN BERNARDINO
By:
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Executive Director
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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property that has been conveyed by the Full
Reconveyance, dated as of January 1, 2018, of the Successor Agency to the Redevelopment Agency
for the City of San Bernardino, is hereby accepted by the undersigned officer on behalf of the City of
San Bernardino pursuant to the authority conferred by a resolution of the City Council of the City
adopted on December 20, 2017, and the City consents to recordation thereof by its duly authorized
officer.
ATTEST:
City Clerk
CITY OF SAN BERNARDINO
By:
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City Manager
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A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA }
ss.
COUNTY OF SAN BERNARDINO )
On before me, t Notary Public,
personally append _ _. _ , who proved to me on the basis
of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validity of that document.
STATE OF CALIFORNIA )
} ss.
COUNTY OF SAN BERNARDINO )
On before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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EXHIBIT A
DESCRIPTION OF THE PROPERTY
Exhibit "A"
ftwl A.,
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That portion of Parcels 24 and 25 of Parte! Map 686, in the City of San Bernardino,
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County of San Bernardino, State of California, as per map recorded In Book 25, pages
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47 through 58, inclusive of Parcel Maps, in the office of the County Recorder of said
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County, described as follows:
Begkming at a point in the South line of Pared 22 of said Parcel Map 6889 and the line
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adjusted by a Certificate of Compliance for Lot Line Adjustment recorded as.
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Instrument No. 88-368872, Official Records, that bears South 89" 55' 49" East, 39.00
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feet from the Southwest corner of said Pard 22;
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thence continuing along said line South 89° 55" 49" East, 326.30 feet to the' West line
of D Street as shown on said Pared MaR 688;
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thence South 000 02144" East, along said West line, 88.38 feet;
thence continuing along said West Hue South 00° 00' 16" East, 61.62 feet to the North
a
Hue of Parcel 29 of said Parcel Map 688;
thence North 89° 55' 49" West along said North line, 142.06 feet to the Northwest
corner of said Parcel 29;
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thence South 00" 04, 11" West along the Westerly Hue of said Awed 29, 60.00 feet to
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the North Hue of Parcel 28 of said Parcel Map 6U,-
88;thence
thenceNorth 89" 5514911 West along sold North line, 213.00 feet to the East line of
Parcel 26 of said Parcel Map 668;
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thence North 00° 04' 11" East along said East Hue, 87.16 feet to the South line of the
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portion of said Parcel 24 shown as "City Sall" Parcel on said Parcel Map 688;
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thence North 890 55' 49" West along said South line,.0.12 feet to the East Hue of that
Parcel shown as "Exhibit Hall" Parcel on said Parcel Map 688;
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thence North 00° 04' 11" East along said East line 108.19 feet;
thence South 890 55' 49" East, 28.62 feet;
thence North 00° 04' 11" Ead, 14.67 feet to the point of beghuiJng, being the land as
defined In the Conditions and Stipulations of this Policy.
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Except all improvements, structures, and buildings located on said land which existed
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thereon as of Marro 30, 1992, as granted by a Conveyance from the San Bernardino
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Civic Center Authority to the Redevelopment Agency of the City of San Bernardino,
dated March 27, 1992, and recorded March 30, 1992, as Instrument No. 92-132803,
LU
Official Records, which buildings are and shall remain real property.
NOTE: Parcel "B-1", herein, is included within the above description.
IL
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Parol Be
All improvements, structures and buildings situated upon the following deserlbed
property, which adsted as of March 30, 1992, as granted by a Conveyance from the
San Bernardino Civic Center Authority to the Redevdo- a Agency of the City of
San Bernardino, dated March 27, 1992, and recorded March 30, 1992, as lustrumea
No. 92-132803, afWal Rem%% which buildbup are and shall remain reel property.
That portion of Parcel 24 of Pared Map 685, to the City of San Bernardino, Couaty of
San Bernardino, State of California, as per map recorded in Book 259 pages 47
through 58, inclusive, of Parcel Maps, to the otBce of the County Recorder of said
County, being described as follows:
Beglnniag at a point in the South Hue of Pared 25 of said Pared Map 658, thA bears
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North 89" 551490 West, 213.00 feet from the Weft titin of Pared 29 of said Peirce
Map 6m;
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thence North 00" 04' 11' hast, 87.16 feet to the South Nae of that portion of said
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Parcel 24 shown as "City Hall" Parcel on said Parcel Map 688;
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thence North 89" 5514111 West along said South Nue 0.12 feet to the East Hue of that
portion of said patod 24 shown as ' Wbk Hall" Parcel on said Parcel Map 688;
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thence North 00" 04' 11" East along said East One to that North Nue of said "City'
Hall" Parcel, 67.67 tied;
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thence South 89" S5' 49" East, 217.29 few;
thence South 00" 0411111 West, 67.67 tint;
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thence North 89" 55' 49" West, 15.83 feet;
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thence South 00" 04' 11" West, 15.75 feet;
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thence North 89" 5S 49" West, 31.00 feet;
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thence South 00" 04' 11" West, 6.17 feet;
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thence North 89" 55' 49" West, 25.50 feet;
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thence North 00" 04' 11" East, 21.92 feet;
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thence North 89" Sr 49" West, 99.59 feet
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thence South 00" 04' 11" West, 62.17 fW4
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thence North 89" 55149" Wert, 15.95 fee#;
thence South 00" 04' 11" West, 9.45 feet;
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thence North Sr 77' 49" West, 14.50 feet
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thence South Dal 04' 11" West, 1S.59 feet to the South line of said Parcel 23;
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thence North 89" 3514911 West, 15.25 feet to the point of beginning.
That portion of Parcel 24 of Parcel Map 688, in the City of San Bernardino, County of
San Bernardino, State of California, as per map recorded in Book 25, pages 47
through 58, inclusive, of Parcel Maps, in the office of the County Recorder of said
County, being described as follows:
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Beginning at a point in the South line of Parcel 25 of sold Pout Map ESS that bears
North 80 55' 49" West, 213.00 feet &= the West line of Paned 29 of said Paned
Map b88;
thence North 090 04' 11" East, 87.16 fed to the South Hue of that portion of Bald
Marcel 24 shown as "City hall" Parcel on said Parcel Map 685;
thence North 890 S5' 49" West along said South lbm, 0.12 feet to the Bast line of that
portion of said Parte! 24 shown as 9b bit Hall" Parcel on said Pwkd Map 688;
thence North 00° 04' 11" East along said East line to that North line of said "City
Hall" Parcel, 67.67 feed
thence South 89° 55' 49" East, 217.29 feet;
thence south 000 04' 11" West, 67.67 feet;
thence North 890 5514911 West, 15.83 feet;
thence South 001 04' 11" West, 15.75 f
thence North 890 551_49" West, 31.00 f
thence South 000 04' 11" West, 6.17 in#.
thence North 890 55149" West, 25.30 feet;
thence North 00° 04' 11" But, 21.92 feed
thence North 890 55' 49" West, 99.59 feet;
thence South 009 04' 11" West, 62.17 fed;
thence North 890 SS' 49" West, 15.50 feet:
thence South 00" 04' 11" West, 9.42 feet;
thence North 89° 55' 49" West, 14.50 feet;
thence South 000 04' 11" Weft, 15.58 feet to the South line of said Pared 25;
thence North 890 55' 49" West, 15.25 feet to the point of beginning.
Except all improvements, structarea, and buildings located on said land which existed
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thereon as of March 30, 1992, which buildings and Improvements are and shall remain
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real property.
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Also except all improvements, structures and buildlop located on said land which
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existed as of March 30, 1992, as granted by a Conveyance from the San Bernardino
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Civic Center Authority to the Redevelopment Agency of the City of San Bernardino,
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dated March 210 1992 and recorded March 30, 1992, as iuftument No. 92-132803,
Official Records, which buildings are and shall remain real property.
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Parul C:
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Yon -exclusive easements for access, ingress, egress, utilities, support and use of
buildings for the benefit of Parcel B and B-1 above described, over, across, under and
through Parcel A above described.
Except those portions lying within Parcel B above described.
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PNICd D.,
Non-escludn essen mb for [oodupp h mdadm and eu chments of buildicp for Q
the benefit of Rucds B and B-1 as defined in that certain Grant Deed by and between
the Redevelopment Agency of the City of San Bernardino and the City of San ca
Bernardino, recorded September 24# 1970 in Bonk 7438. p4c 440 and re-recorded in
Book 7M gage 725, Offtial Records. ,
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RECORDING REQUESTED BY:
City of San Bernardino
AND WHEN RECORDED RETURN TO:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Brian P. Forbath, Esq.
SPACE ABOVE FOR RECORDER'S USE ONLY
TERN IINATIO'N OF A G, RFI IL
THIS COVER SHEET ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION
($3.00 Additional Recording Fee Applies)
Packet Pg. 607
TERAGNATION OF AGREEMENT
by and between
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
and
CITY OF SAN BERNARDINO
Dated as of January 1, 2018
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TERMINATION OF AGREEMENT
THIS TERMINATION OF AGREEMENT (this "Agreement"), dated as of January 1, 2018
and effective as of the date of recordation hereof, is by and between the SAN BERNARDINO JOINT
POWERS FINANCING AUTHORITY, a joint powers agency that is duly organized and existing
under and by virtue of the Constitution and laws of the State of California (the "Authority"), and the
CITY OF SAN BERNARDINO, a municipal corporation and charter city that is duly organized and
existing under the laws of the State of California (the "City").
RECITALS
A. The City and the Redevelopment Agency for the City of San Bernardino (the
"RDA") entered into a Ground Lease, dated as of December 1, 1996 (the "Ground Lease"), which
was recorded on December 17, 1996 as Instrument No. 19960462012 in the Official Records of the
County of San Bernardino, State of California (the "Official Records"). Pursuant to the Ground
Lease, the City leased certain property described therein (as shown on Exhibit A hereto) (the
"Property") to the RDA.
B. The RDA and the Authority entered into a Site and Facility Lease, dated as of a
December 1, 1996 (the "Site Lease"), which was recorded on December 17, 1996 as Instrument No.
19960462013 of the Official Records. Pursuant to the Site Lease, the RDA subleased the Property to
the Authority.
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C. The Authority and the City entered into a Lease Agreement, dated as of December 1,
1996 (as amended, the "Lease"), which was recorded on December 17, 1996 as Instrument No.
19960462014 (and re-recorded on March 26, 1997 as Instrument No. 19970104310) in the Official
Records. Pursuant to the Lease, the Authority sub -subleased the Property to the City. U.
2
D. The Authority assigned its interest in the Lease to U.S. Bank National Association, as c
trustee (the "Trustee") for the San Bernardino Joint Powers Financing Authority Lease Revenue a.
Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds'l. The City's payments under =
the Lease secure the repayment of the 1996 Bonds. a
E. By virtue of California Assembly Bill No. 26, which was enacted on. June 29, 2011 as
Chapter 5, Statutes of 2011, together with a companion bill, California Assembly Bill No. 27, as such �-
legislation was interpreted by the California Supreme Court in California Redevelopment
Association, et al. v. Matosantos, et al. (53 Cal. 4th 231 (December 29, 2011)), the RDA was w
dissolved. The Successor Agency to the Redevelopment Agency for the City of San Bernardino was z
thereafter designated as the successor entity to the RDA and, accordingly, succeeded to the RDA's z
interest in the Ground Lease and the Site Lease. LL
F. The City has notified the Authority of its intention to prepay, on January [9], 2018
(the "Defeasance Date"), all of the City's obligations under the Lease pursuant to Section 10.2 of the
Lease, which will cause the defeasance of the 1996 Bonds as of the Defeasance Date in accordance
with Section 10.1 of the Lease.
G. The City hereby certifies that it has caused to be delivered moneys that will be
sufficient to prepay all of the City's obligations under the Lease as of the Defeasance Date (the
"Defeasance Amount").
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Packet Pg. 609
H. In order to reflect the defeasance of the City's obligations under the Lease, the
Authority and the City now desire to terminate and discharge the Lease.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Recordation. This Agreement shall not be recorded until the City has caused the
deposit of the Defeasance Amount with the Trustee.
2. Termination of Lease. Effective as of the date of recordation of this Agreement, the
Authority and the City hereby acknowledge and agree that the Lease shall be terminated and shall be
of no further force or effect.
3. CounterLImts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which, when taken together, shall constitute one
agreement. The signature and acknowledgment pages from each counterpart may be removed and
attached to a single document in order to create one original instrument.
[REMAINDER OF PAGE =NTIONALLYLEFT BLANK)
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IN WITNESS WHEREOF, this Agreement has been executed by each party's respective
duly authorized officers, as of the date first above written,
ATTEST:
Secretary
ATTEST:
City Clerk
SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY
M
CITY OF SAN BERNARDINO
S-1
City Manager
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A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
di of that document.
STATE OF CALIFORNIA )
ss.
COUNTY OF SAN BERNARDINO )
On before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument
and acknowledged to me that helshe/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
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Packet Pg. 612
A notary public or other officer completing this certificate verifies only the identity of the individual
who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or
validit \ of that document.
STATE OF CALIFORNIA )
ss.
COUNTY OF SAN BERNARDINO )
On before me, , Notary Public,
personally appeared , who proved to me on the basis
of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument
and acknowledge to me that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal
SIGNATURE OF NOTARY PUBLIC
31.b
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Packet P9.7613
EXHIBIT A
DESCRIPTION OF THE PROPERTY
Exhibit "A'I
PAtW .A: -
That portion of Parcels 24 and 25 of Parcel Map 688, to the City of San Bernardino,
County of San Bernardino, State of California, sa per map recorded In Book 25, pages
47 through S8, Inclusive of Parcel Maps, in the office of the County Recorder of said
County, described as follows:
Beginning at a point In the South Has of Parcel 22 of said Pared Map 688, and the One
adjusted by a. Certificate of Compliance for Lot Line Adjustment recorded air
Instrument No. 88-368872, OfRcid Records, that bears South 890 35149" East, 39.00
feet from the Southwest cornier of Said Parcel 22;
thence continuing alone said Hae South 89' 35' 49" East, 326.30 feet to the West line
of D Street as shown on said Pm -cd Map 688;
thence South 00' 02' 44" East, along said West line, 88.38 feet;
thence continuing along said West One South 00' 00' 16" East, 61.62 feet to the North
line of Pared 29 of said Parcel Map 688;
thence North 89' SS' 49" West along said North Hue, 142.06 NO to the Northwest
corner of said Parcel 29;
thence South 00' 04' 11" West along the Westerly Una of said Parcel 290 60.00 feet to
the North line of Parcel 28 of said Parcel Map 688;
thence North 89' 55' 49" West along said North One, 213.00 beet to the East line of
Parol 26 of said Pared Map 688;
thence North 00' 04' 11" East along said East line, 87.16 feet to the South line of the
portion of said Parcel 24 shown as "City Hall" Parcel on said Parcel Map 6881
thence North 89' 5514911 West along said South lin%.0.12 feet to the East One of that
Parcel shown as "Exhibit Hall" Parcel on said Pared Map 688;
thence North 00' 04' 11" East along said Bast line 108.17 feet;
thence South 89' 55' 49" Zak 28.62 feet;
thence North Go' 04' 11" East, 14.67 feet to the point of beginning, being the land as
defined in the Conditions and Stipulations of this Policy.
Except all improvements, structures, and buildings located on said land which existed
thereon as of March 30, 1992, as granted by a Conveyance from the San Bernardino
Civic Center Authority to the Redevelopment Agency of the City of San Bernardino,
dated March 27, 1992, and recorded March 30, 1992, as Instrument No. 92-132803,
Official Records, which buildings are and shall remain real property.
VOTE: Parcel "$-i", herein, is hicluded within the above description.
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All improvensepts, structures and ; :: ;: situated upon the followhg described
property, wbicb ab ted as of March 30, 1992, as granted by a Com"yanoe ham the
San Bernadino CMc Cel Authorityto the Redevdapment Agency of the City of
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San Bermufto, dated March 27, 1992, and recorded March 30, 1992, as I hunent
No. 92.132503, Official Records, which buildings an and shag remain real property.
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That portion of Parcel 24 of Parcel Map 688, fa the City of San Bernardino, County of
San Beraarft% State of CaiifornhP as per map recorded In Book 250, pap= 47
throat % lyse, of Parcel Maps, to the office of the Comtly Recorder of add
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County, beim described as fotmse
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at a point In the Soot lino of Parcel 25 of said Pared Map 688, ;bat bears
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North 89" 55" 49" West, 213.00 feet from the Went One of Pared 29 of said Pared
Map 688;
thence Nath 00" 04" III East, 87.16 Reel to the South Uta of that portion of said
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Pared 24 shown as "City Sall" Parcel on sold Pared Map 688=
thence North 89" $5" 49" West along said South lice 0.12 fed to the Bast lice of that
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pordom of sold panel 24 shown as "ExhUit RA" Packet on mfd Pared Map 688;
thence North 00" 04111" Fust alozq said East line to shu North Use of said "Cttq
Hall" Parcel, 67.67 feet;
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thence Scarth 89" 55" 49" Bad, 217.29 feet;
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thence South 00" 04" 11" West, 67.67 feet;
thence North 89" 5S' 49" West, 15.83 feet;
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thence South 00.04" 11" Wed, 15.75
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thence North 89" 53149" West, 31.90 feet;
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thence South 00" 04" li" West, 6.17 feet; . _
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thence Nath 89" 55" 49" West, 25.50 feet;
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theme North 06' 04' 11" Bnsl, 21.92 feet;
thence Nath 89" 55' 49" West, 99.59 feet;
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thence South 00" 04" 11" West, 62.17 M*
thence North 89.55' 49" Wes415.0 fent;
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thence South 00" 04" 11" West, 9.42 feet;
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thence North89 " 55' 49" West, 14.50 feet
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thence South 00" 04t 11" West,.15.58 feet to the South Use of said Parcel 25;
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thence North 89" 55' 49" West, ISM feet to the point of hegirr .
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That portion of parcel 24 of Parcel Map d8, in the City of San Berasrdht% County of
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San Bernardino, State of California, as per map recorded In Book 25, pages 47
through 58, iachnive, of Parcel Maps, in the office of the County Recorder of said
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County, being described as follows:
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Beginning at it point in the South line of Parrd 25 of :, o , Parcel Map EA that beam.;
North 89° 55' 49" West, 213.00 fat Brom the west line of Pared 29 of sold Pased
Map 688=
thence North W 04' 11" Rest, 87.16 feet to the South lice of that portion of a
Parcd 24 shown as "City Nall" Parol on said Pared Man 688;
thence North 89" 55149" West along said South line, 0.12 feet to the FAA line of that
portion of sold Parcel 24 shown as "Esldbit Bi r l." Pared on said Parcel Uk. 688=
thence North 000 04' 11" But along sold Fast line to that North Woe of said "CHy
Hall" Parcel, 67.67 feet:
thence South 89, S5' 49" East; 217.29 fleet;
thence south 000 04' 11" West, 67.67 heti
thence North 890 55' 49" West, 15.83 feet;
thence South 000 04' 11" Weet,15.75 feet;
thence North 890 SS' 49" West, 31.00 gear
thence South or 04' 11" West, 6.17 feet: .
thence North 89° 55' 49" West, 25.50 few
thence North 00.04' 11" East, 21:12 fedi;
thence North 8915 55' 49" West, 99.59 feet;
thence South 000 04' 111a Wet, 62.17 feet;
thence North 89" 55101 West,1S.50 het;
thence South 004 04' IV West, 9.42 feet;
thence North 89.55' 49" Wet, 14.50 feet;
thence South 00 � 04' 11" West, 16.58 feet to the South One of said Parcel 25;
thence North 89" 55' 49" Wean, 15.23 feet to the point of beginning.
Except all improvements, structures, and buildings located on said land which existed
thereon as of March 30, 1992, which buildings and impromneaft are and shall remain
real property.
Also empt an improvements, structures and befillo r Nmiae on said Tana. witch
existed as of March 30, IM, as granted by a Conveyance hvm the San Bernardo
Civic Center Authority to the Redevelopment Agency of the City of San Bernardino,
dated March 27, 1992 and recorded March 30, 1992, as Inert No. 92.132803,
Oflidal Records, which buildings are and shall remain real property.
Non-exclusive easements for ate, kWm, egress, ut Mk% support and use of
buildings for the benefit of Parcel B and B -i above described, over, ate, under and
through Parcel A above described.
Except those portions t&g within Pared B above described.
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Nowmdusdve easemmb foot fbotinr, fou m&dm ash are -+o is of buildings for
the bed 8t of h"eb B and 11-1 as deilned In mat certaie Grant need by end betweea
the Redevelopmeat Agency of the City of San Bernardino and the City of San
BananVao, recorded Sq*mibor 24, 1970 Ie- Y : ?, 7438, p w 440 and re-recorded in
Book 754 page 725, OMkW Records.
PARKM'STRUCTURE:
PARCEL 28 of PARCEL MAP NO, 688, -in the -County of San Bernardino. State of
California. as per Map 'recorded In -look 25 of Parcel Maps. Pages 47 through
58-incluaiae; in the Office of the County Recosder of said County.
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Packet Pg.617
Stradling Yocca Carlson & Rauth
Draft of 11/10/17
ESCROW AGREEMENT (1996 BONDS)
THIS ESCROW AGREEMENT (1996 BONDS), dated as of January 1, 2018 (the
"Agreement', by and among the City of San Bemardino (the "City"), the San Bernardino Joint
Powers Financing Authority (the. "Authority") and U.S. Bank National Association, as escrow agent
(the "Escrow Agent") and as 1996 Trustee (as such term is defined herein), is entered into in
accordance with resolutions of the City and Authority that were adopted on December 20, 2017 and a
Trust Indenture, dated as of December 1, 1996 (the "1996 Indenture'), by and between the
Authority and U.S. Bank National Association, as successor trustee (the "1996 Trustee"), to refund
the outstanding San Bernardino Joint Powers Financing Authority Lease Revenue Refunding Bonds
(City Hall Project) Series 1996 (the "1996 Bonds").
RECITALS
A. Pursuant to the 1996 Indenture, the Authority issued the 1996 Bonds in the aggregate
principal amount of $16,320,000, of which $4,985,000 is currently outstanding.
B. The City and the Authority have determined that a portion of the proceeds of the
$ aggregate principal amount of the San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds (the `Bonds") issued pursuant to an Indenture, dated as of January
1, 2018, by and among the City, the Authority and U.S. Bank National Association, as trustee (the
"Trustee"), will be used to provide a portion of the funds to pay on January 22, 2018 (the
"Redemption Date") the principal of the 1996 Bonds maturing on and after January 1, 2019, plus
interest thereon accrued to the Redemption Date, without premium (the "Redemption Price").
C. The Authority will irrevocably deposit moneys with the Escrow Agent (as permitted
by, in the manner prescn'bed by and all in accordance with the 1996 Indenture), which moneys will
be fully sufficient to pay and discharge the 1996 Bonds.
AGREEMENT
SECTION 1. Deposit of Moneys. The City and the Authority hereby instruct the Escrow
Agent to deposit $ received from the Trustee fi+om the net proceeds of the Bonds in the Escrow
Fund established hereunder. The City and the Authority hereby further instruct the 1996 Trustee to
transfer to the Escrow Agent $ , constituting certain amounts on deposit in the funds and
accounts established under the 1996 Indenture, which amount the City and the Authority instruct the
Escrow Agent to deposit in the Escrow Fund.
The Escrow Agent shall hold all such amounts in irrevocable escrow separate and apart from
other funds of the City, the Authority and the Escrow Agent in a fund hereby created and established
to be known as the "Escrow Fund" and to be applied solely as provided in this Agreement. The City
and the Authority represents that the moneys that are set forth above are at least equal to the
Redemption Price.
SECTION 2. No Investment of Mone: s. The Escrow Agent acknowledges receipt of the
moneys described in Section 1 and agrees immediately to deposit such moneys in the Escrow Fund.
The Escrow Agent shall hold such moneys uninvested as cash.
SECTION 3. f Reserved].
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SECTION 4. [Reserved].
SECTION 5. Pa, :dent of 1996 Bonds.
(a) P . From the moneys on deposit in the Escrow Fund, the Escrow
Agent shall, on the Redemption Date, apply the amounts on deposit in the Escrow Fund to pay the
Redemption Price of the 1996 Bonds maturing on and after the Redemption Date.
(b) Irrevocable Instructions to Provide Notice. The notice of redemption that is
required to be mailed pursuant to Section 4.03 of the 1996 Indenture is substantially in the form that
is attached hereto as Exhibit A. The Authority has previously instructed the Escrow Agent to mail a
notice of redemption and a notice of defeasance of the 1996 Bonds in accordance with Section 4.03
of the 1996 Indenture, as required to provide for the redemption of the 1996 Bonds in accordance
with this Section 5. Such notices shall be in the forms that are attached hereto as Exhibits A and B.
(c) Unclaimed Money s. Any moneys in the Escrow Fund which remain
unclaimed for two years after the Redemption shall be repaid by the Escrow Agent to the City.
(d) Priorit � of Payments. The owners of the 1996 Bonds shall have a first and
exclusive lien on all moneys and securities in the Escrow Fund until such moneys and such securities
are used and applied as provided in this Agreement.
(e) Termination of Obligation. As provided in the 1996 Indenture, upon the
deposit of moneys with the Escrow Agent in the Escrow Fund as set forth in Section 1: (i) the 1996 a
Bonds are deemed to have been paid in accordance with Section 13.01 of the 1996 Indenture and are
no longer outstanding; (ii) the obligations of the Authority and the Trustee under the 1996 Indenture
with respect to the 1996 Bonds have ceased and terminated, except as set forth in the 1996 Indenture; _
and (iii) all obligations of the City under the Lease Agreement, dated as of December 1, 1996 (as
amended, the "Lease Agreement"), by and between the City and the Authority, have ceased and 3
terminated, except as set forth in the Lease Agreement. o
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SECTION 6. A:, dication of Certain Terms of the 1996 Indenture. All of the terms of the c
1996 Indenture relating to the malting of payments of principal of and interest on to the 1996 Bonds
and relating to the exchange or transfer of the 1996 Bonds are incorporated in this Agreement as if t -
set forth in full herein. The procedures that are set forth in Article IX of the 1996 Indenture relating
to the resignation, removal and merger of the 1996 Trustee under the 1996 Indenture are also
incorporated in this Agreement as if set forth in full herein and shall be the procedures to be followed
with respect to any resignation or removal of the Escrow Agent hereunder. Ui
SECTION 7. Performance of Duties. The Escrow Agent agrees to perform only the duties
set forth herein and shall have no responsibility to take any action or omit to take any action not set
forth herein.
SECTION 8. Escrow AUent's Authority to Make Investments. Except as provided in
Section 2 hereof, the Escrow Agent shall have no power or duty to invest any funds held under this
Agreement or to sell, transfer or otherwise dispose of the moneys held hereunder.
SECTION 9. Indemnity. The City hereby assumes liability for, and hereby agrees (whether
or not any of the transactions that are contemplated hereby are consummated) to indemnify, protect,
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save and keep harmless the Escrow Agent and its respective successors, assigns, agents, employees
and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements)
of whatsoever kind and nature which may be imposed on, incurred by or asserted against the Escrow
Agent at any time (whether or not also indemnified against the same by the City or any other person
under any other agreement or instrument, but without double indemnity) in any way relating to or
arising out of the execution, delivery and performance of this Agreement, the establishment
hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the
retention of the proceeds thereof and any payment, transfer or other application of moneys or
securities by the Escrow Agent in accordance with the provisions of this Agreement; provided,
however, that the City shall not be required to indemnify the Escrow Agent against the Escrow
Agent's own negligence or willful misconduct, the negligence or willful misconduct of the Escrow
Agent's respective employees or the willful breach by the Escrow Agent of the terms of this
Agreement. In no event shall the City or the Escrow Agent be liable to any person by reason of the
transactions contemplated hereby other than to each other as set forth in this Section. The
indemnities contained in this Section shall survive the termination of this Agreement.
SECTION 10. Responsibilities of Escrow Agent. The Escrow Agent and its agents and
servants shall not be held to any personal liability whatsoever, in tort, contract, or otherwise, in
connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund,
the acceptance of the moneys or securities deposited therein, the sufficiency of the moneys that are
deposited in the Escrow Fund to pay the 1996 Bonds or any payment, transfer or other application of
moneys or obligations by the Escrow Agent in accordance with the provisions of this Agreement or
by reason of any non -negligent act, non -negligent omission or non -negligent error of the Escrow
Agent made in good faith in the conduct of its duties. The recitals of fact contained herein shall be
taken as the statements of the City and the Authority, and the Escrow Agent assumes no
responsibility for the correctness thereof. The Escrow Agent makes no representation as to the
sufficiency of the proceeds to accomplish the refunding of the 1996 Bonds or to the validity of this
Agreement as to the City or the Authority and, except as otherwise provided herein, the Escrow
Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable m connection
with the performance of its duties under this Agreement except for its own negligence, willful
misconduct or default, and the duties and obligations of the Escrow Agent shall be determined by the
express provisions of this Agreement. The Escrow Agent may consult with counsel, who may or
may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have
full and complete authorization and protection in respect of any action taken, suffered or omitted by
it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or
desirable that a matter be proved or established prior to taking, suffering, or omitting any action
under this Agreement, such matter may be deemed to be conclusively established by a certificate
signed by an officer of the City.
The City and the Authority acknowledge that to the extent that regulations of the Comptroller
of the Currency or other applicable regulatory entity grant the City and the Authority the right to
receive brokerage confirmations of security transactions as they occur, the City and the Authority
specifically waive receipt of such confirmations to the extent permitted by law. The Escrow Agent
will furnish the City with periodic transaction statements which include detail for all investment
transactions made by the Escrow Agent hereunder; provided that the Escrow Agent is not obligated
to provide an accounting for any fund or account that: (a) has a balance of $0.00; and (b) has not had
any activity since the last reporting date.
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SECTION 11. Amendments. This Agreement is made for the benefit of the City, the
Authority and the owners from time to time of the 1996 Bonds and it shall not be repealed, revoked,
altered or amended without the written consent of all such owners, the Escrow Agent, the City and
the Authority; provided, however, that the City, the Authority and the Escrow Agent may, without
the consent of, or notice to, such owners, amend this Agreement or enter into such agreements
supplemental to this Agreement as shall not adversely affect the rights of such owners and as shall
not be inconsistent with the terms and provisions of this Agreement, the laws of the State of
California or the 1996 Indenture, for any one or more of the following purposes: (i) to cure any
ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow
Agent for the benefit of the owners of the 1996 Bonds any additional rights, remedies, powers or
authority that may lawfully be granted to, or conferred upon, such owners or the Escrow Agent; and
(iii) to include under this Agreement additional funds. The Escrow Agent shall be entitled to rely
conclusively upon an unqualified opinion of Stradling Yocca Carlson & Rauth, A Professional
Corporation, with respect to compliance with this Section, including the extent, if any, to which any
change, modification, addition or elimination affects the rights of the owners of the various 1996
Bonds or that any instrument executed hereunder complies with the conditions and provisions of this
Section.
SECTION 12. Notice to RatingAgencies. In the event that this agreement or any provision
thereof is severed, amended or revoked, the Escrow Agent shall provide written notice of such
severance, amendment or revocation to the rating agencies then rating the 1996 Bonds.
SECTION 13. Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either: (i) the date upon which the 1996 Bonds have been paid
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in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on
deposit with the Escrow Agent pursuant to Section 5(c) of this Agreement.
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SECTION 14. CoA)ensation. The ' Escrow Agent shall receive its reasonable fees and
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expenses as previously agreed to by the Escrow Agent and the City and any other reasonable fees and
expenses of the Escrow Agent approved by the City; provided, however, that under no circumstances
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shall the Escrow Agent be entity to any lien or assert any lien whatsoever on any moneys or
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obligations in the Escrow Fund for the payment of fees and expenses for services rendered or
expenses incurred by the Escrow Agent under this Agreement.
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SECTION 15. Severabilit % . If any one or more of the covenants or agreements provided in
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this Agreement on the part of the City, the Authority or the Escrow Agent to be performed should be
determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements
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shall be null and void and shall be deemed separate from the remaining covenants and agreements
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contained herein and shall in no way affect the validity of the remaining provisions of this
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Agreement.
SECTION 16. Counterparts. This Agreement may be executed in several counterparts, all or
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any of which shall be regarded for all purposes as an original but all of which shall constitute and be
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but one and the same instrument.
SECTION 17. Governing: Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER
THE LAWS OF THE STATE OF CALIFORNIA.
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SECTION 18. Insufficient Funds. If at any time the Escrow Agent has actual knowledge
that the moneys and investments in the Escrow Fund, including the anticipated proceeds thereof and
earnings thereon, will not be sufficient to make all payments required by this Agreement, the Escrow
Agent shall notify the City in writing, of the amount thereof and the reason therefor to the extent
known to it. The Escrow Agent shall have no responsibility regarding any such deficiency.
SECTION 19. Notice to City. Authority and Escrow Agent. Any notice to or demand upon
the Escrow Agent may be served or presented, and such demand may be made, at the principal
corporate trust office of the Escrow Agent at 633 West Fifth Street, 24th Floor, Los Angeles,
California 90071, Attention: Global Corporate Trust Services, Reference: City of San Bernardino,
Series 1996. Any notice to or demand upon the City or the Authority shall be deemed to have been
sufficiently given or served for all purposes by being mailed by registered or certified mail, and
deposited, postage prepaid, in a post office letter box, addressed to the City or the Authority at 290
North D Street, San Bernardino, California 92401, Attn: Finance Director (or such other address as
may have been filed in writing by the City or the Authority with the Escrow Agent).
[REMAINDER OFPAGEINTENTIONALLYLEFTBLANKJ
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the date fust above written. E
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Secretary
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EXHIBIT A
CONDITIONAL NOTICE OF FULL OPTIONAL REDEMPTION
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS (CITY HALL PROJECT) SERIES 1996
BASE CUSIP 79675N
NOTICE IS HEREBY GIVEN to the owners of the above -captioned obligations (the "1996
Bonds') pursuant to the Trust Indenture, dated as of December 1, 1996, by and between the San
Bernardino Joint Powers Financing Authority (the "Authority") and U.S. Bank National Association,
as successor trustee (the "Trusted"), that all of the outstanding 1996 Bonds, in the aggregate principal
amount of $4,985,000, have been called for redemption on January 22, 2018 (the "Redemption
Date"). The 1996 Bonds to be called, which were originally issued on December 18, 1996, are as
follows:
Outstanding
Ham rn Amount of _1496
CUSIP (January D Rate Bonds Price
BD8 2023 5.700% $4,985,000 100%
The 1996 Bonds will be payable on the Redemption Date at a price of 100% of the principal
amount plus accrued interest thereon to such date (the "Redemption Price). The Redemption Price <
of the 1996 Bonds will become due and payable on the Redemption Date. From and after the
Redemption Date, interest on the 1996 Bonds to be redeemed will cease to accrue, and such 1996
Bonds will be surrendered to the Trustee.
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Funds in an amount that is sufficient to pay the Redemption Price of the 1996 Bonds will be
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on deposit with the Trustee prior to the Redemption Date.
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To receive payment on the Redemption Date, owners of the 1996 Bonds should present and
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surrender said 1996 Bonds on the Redemption Date at the address of the Trustee set forth below:
Deliver, Instructions
U.S. Bank
Global Corporate Trust Services
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111 Fillmore Avenue E
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St. Paul, Minnesota 55107
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REQUIREMENT INFORMATION
For a list of redemption requirements please visit our website at !ww.usbank.com/cgrmoratetrus and
click on the "Bondholder Information" link for Redemption instructions. You may also contact our
Bondholder Communications team at 1-800-934-6802 Monday through Friday from 8 AM to 6 PM
CST.
IMPORTANT NOTICE
Federal law requires the Trustee to withhold taxes at the applicable rate from the payment if an IRS a
Exhibit A-1
Packet Pg.625
Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.ao• for additional
information on the tax forms and instructions.
Redemption of the 1996 Bonds is conditional upon the receipt by the Trustee prior to the
Redemption Date of moneys that are sufficient to pay the principal of and interest on the 1996 Bonds
that are subject to optional redemption and, if such moneys have not been so received, this notice
shall be of no force and effect and the Trustee shall not be required to redeem such 1996 Bonds.
If the Owner of any 1996 Bond that is subject to optional redemption fails to deliver such
1996 Bond to the Trustee on the Redemption Date, such 1996 Bond shall nevertheless be deemed
redeemed on the Redeemed Date and the Owner of such 1996 Bond shall have no rights in respect
thereof except to receive payment of the Redemption Price from funds that are held by the Trustee
for such payment.
Note: The Authority and the Trustee shall not be responsible for the selection or use of the
M&P numbers selected, nor is any representation made as to their correctness in the notice or as
printed on any 1996 Bond They are included solely for the convenience of the holders.
Dated December 21, 2017.
By: U.S. BANK NATIONAL ASSOCIATION, as
Trustee
Exhibit A-2
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EIMPf B
NOTICE OF DEFEASANCE
SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY
LEASE REVENUE REFUNDING BONDS (CITY HALL PROJECT) SERIES 1996
BASE CUSIP 79675N
NOTICE IS HEREBY GIVEN to the owners of the above -captioned obligations (as further
defined below, the "1996 Bonds"), of the San Bernardino Joint Powers Financing Authority (the
"Authority"), that the Authority has deposited with U.S. Bank National Association, as successor
trustee (the "Trustee") under the Trust Indenture, dated as of December 1, 1996 (as amended, the
"Indenture"), by and between the Authority and the Trustee, cash in an amount that is sufficient to
pay on the date hereof the principal of the 1996 Bonds maturing on and after the date hereon plus
accrued interest thereon to such date.
The 1996 Bonds to be defeased are as follows:
OuWanding
Matin Amount el- I996
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CUSIP (January I) Rate Bonds Price
BD8 2023 5.700% $4,985,000 100%
In accordance with the Indenture: (i) the° 1996 Bonds are deemed to have been paid in
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accordance with Section 13.01 thereof and are no longer outstanding; (ii) the obligations of the
Authority and the Trustee under the Indenture with respect to the 1996 Bonds have ceased and
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terminated, except as set forth in the Indenture; and (iii) all obligations of the City of San Bernardino
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(the "City") under the Lease Agreement, dated as of December 1, 1996 (as amended, the "Lease
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Agreement"), by and between the City and the Authority, have ceased and terminated, except as set
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forth in the Lease Agreement.
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In addition, the obligations of the City under the Continuing Disclosure Agreement, dated
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December 18, 1996, by and between the City and the Trustee, relating to the 1996 Bonds have
terminated as of the date hereof.
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No representation is made as to the correctness of the CUSIP number either as printed on any
1996 Bond or as contained herein and any error in the CUSIP number shall not affect the validity of
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the proceedings for redemption of the 1996 Bonds.
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U.S. BANK NATIONAL ASSOCIATION, as Trustee
January 9, 2018.
Exhibit B-1
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CITY OF SAN BERNARDINO
DEBT MANAGEMENT POLICY
Adopted on December 20, 2017
This Debt Management Policy (the "Debt Policy°) establishes the parameters within which debt may be
issued and administered by the City of San Bernardino (the 'City"). Additionally, these policies apply to
debt issued by the City on behalf of assessment, community facilities, or other special districts, and
conduit -type financing by an authority for multifamily housing or industrial development projects.
The Debt Policy may be utilized by staff of the City with the discretion to deviate as determined
appropriate by the City Manager, and may be amended by the City Council of the City as it deems
appropriate from time to time in the prudent management of the debt and capital financing needs of the
City.
PURPOSE:
This Debt Policy is intended to comply with Government Code Section 8855(i), effective on January 1,
2017, and shall govern all debt undertaken by the City.
The City hereby recognizes that a fiscally prudent debt policy is required in order to:
■ Maintain the City's sound financial position.
■ Ensure the City has the flexibility to respond to changes in future service priorities, revenue
levels, and operating expenses.
■ Protect the City's credit -worthiness.
■ Ensure that all debt is structured in order to protea both current and future taxpayers,
ratepayers and constituents of the City.
■ Ensure that the City's debt is consistent with its planning goals and objectives and capital
improvement program or budget, as applicable.
POLICY
Purposes for Which Debt May Be Issued
1. Lon:.: -Term Debt. Long-term debt may be issued to finance the construction, acquisition, and
rehabilitation of capital improvements and facilities, equipment and land to be owned and operated
by the City.
1.1. Long-term debt financings are appropriate when the following conditions exist:
■ When the project to be financed is necessary to provide basic services.
■ When the project to be financed will provide benefit to constituents over multiple years.
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■ When total debt does not constitute an unreasonable burden to the City's taxpayers and/or
ratepayers, as applicable.
■ When the debt is used to refinance outstanding debt in order to produce debt service
savings or to realize the benefits of a debt restructuring.
1.2. Long-term debt financings will not generally be considered appropriate for current operating
expenses and routine maintenance expenses.
1.3. The City may use long-term debt financings subject to the following conditions:
• The project to be financed must be approved by the governing board of the City.
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The weighted average maturity of the debt (or the portion of the debt allocated to the
project) will not exceed the average useful life of the project to be financed by more than
20%.
■ The City estimates that sufficient revenues will be available to service the debt through its
maturity.
■ The City determines that the issuance of the debt will comply with the applicable state and
federal law.
2. Short-term debt. Short-term debt may be issued to provide financing for the City's operational cash
flows in order to maintain a steady and even cash flow balance. Short-term debt may also be used
to finance short-lived capital projects; for example, the City may undertake lease -purchase
financing for equipment.
3. Financings on Behalf of Other Entities. The City may also find it beneficial to issue debt on behalf
of other governmental agencies or private third parties in order to further the public purposes of
City. In such cases, the City shall take reasonable steps to confirm the financial feasibility of the
project to be financed and the financial solvency of any borrower and that the issuance of such debt
is consistent with the policies set forth herein.
Types of Debt r'
The following types of debt are allowable under this Debt Policy-
■ General obligation bonds (GO Bonds)
■ Bond or grant anticipation notes (BANs)
■ Lease revenue bonds, certificates of participation (COPs) and lease -purchase transactions
■ Other revenue bonds and COPs
■ Tax and revenue anticipation notes (TRANs)
■ Land -secured financings, such as special tax revenue bonds issued under the Mello -Roos
Community Facilities Act of 1982, as amended, and limited obligation bonds issued under
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applicable assessment statutes
• Tax increment financing to the extent permitted under State law
■ Conduit financings, such as financings for affordable rental housing and qualified 501(c)(3)
organizations
The governing body may from time to time find that other forms of debt would be beneficial to further its
public purposes and may approve such debt without an amendment of this Debt Policy.
Relationship of Debt to Capital Improvement Program and Budget
The City is committed to long-term capital planning. The City intends to issue debt for the purposes
stated in this Debt Policy and to implement policy decisions incorporated in the capital budget and the
capital improvement plan.
The City shall strive to fund the upkeep and maintenance of their infrastructure and facilities due to
normal wear and tear through the expenditure of available operating revenues. The City shall seek to
avoid the use of debt to fund infrastructure and facilities improvements that are the result of normal
wear and tear.
The City shall integrate its debt issuances with the goals of the capital improvement program by timing c
the issuance of debt to ensure that projects are available when needed in furtherance of their public
purposes. <
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The City shall seek to avoid the use of debt to fund infrastructure and facilities improvements in
circumstances when the sole purpose of such debt financing is to reduce annual budgetary
expenditures. u.
The City shall seek to issue debt in a timely manner to avoid having to make unplanned expenditures 3
for capital improvements or equipment from its general fund. °
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Policy Goals Related to Planning Goals and Objectives
The City is committed to long -tern financial planning, maintaining appropriate reserves levels and
employing prudent practices in governance, management and budget administration. The City intends
to issue debt for the purposes stated in this Debt Policy and to implement policy decisions incorporated
in the annual operations budget.
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It is a policy goal of the City to protect taxpayers, ratepayers (if applicable) and constituents by utilizing a
conservative financing methods and techniques so as to obtain the highest practical credit ratings (if z
applicable) and the lowest practical borrowing costs.
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The City will comply with applicable state and federal law as it pertains to the maximum term of debt
and the procedures for levying and imposing any related taxes, assessments, rates and charges.
When refinancing debt, it shall be the policy goal of the City to realize, whenever possible, and subject
to any overriding non-financial policy considerations, (i) minimum net present value debt service
savings equal to or greater than 3.0% of the refunded principal amount, and (ii) present value debt
service savings equal to or greater than 100% of any escrow fund negative arbitrage.
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E. Internal Control Procedures
When issuing debt, in addition to complying with the terms of this Debt Policy, the City shall comply with
any other applicable policies regarding initial bond disclosure, continuing disclosure, post -issuance
compliance, and investment of bond proceeds.
Without limiting the foregoing, the City will periodically review the requirements of and will remain in
compliance with the following:
• Any continuing disclosure undertakings entered into by the City in accordance with SEC Rule
15c2-12.
Any federal tax compliance requirements, including, without limitation, arbitrage and rebate
compliance.
■ Investment policies as they relate to the use and investment of bond proceeds.
Proceeds of debt will be held either (a) by a third -party trustee or fiscal agent, which will disburse such
proceeds to or upon the order of the City upon the submission of one or more written requisitions by the
City Manager or City Finance Director, or his or her written designee, or (b) by the City, to be held and
accounted for in a separate fund or account, the expenditure of which will be carefully documented by
the City,
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, MAKING REQUIRED FINDINGS AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING
TO THE ISSUANCE OF SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY 2018 LEASE REVENUE REFUNDING BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $4,500,000 FOR THE PURPOSE OF
REFUNDING THE 1996 LEASE REVENUE REFUNDING BONDS, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION'
THEREWITH
WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and a
charter city that is duly organized and existing under and pursuant to the Constitution and laws
the State of California (the "State"); and
WHEREAS, the City desires to refinance the acquisition and/or constriction of various
"public capital improvements" within the meaning of the Marks -Roos Local Bond Pooling Act
of 1985, which are located within the boundaries of the City and which were previously financed
and refinanced from proceeds of the San Bernardino Joint Powers Financing Authority Lease
Revenue Refunding Bonds (City Hall Project) Series 1996 (the "1996 Bonds'j; and
WHEREAS, the City has determined that it would be in the best interests of the City and
residents of the City to cause the Authority (as such term is defined below) to authorize the
preparation, sale and delivery of the "San Bernardino Joint Powers Financing Authority 2018
Lease Revenue Refunding Bonds' (the "Bonds") for the purpose of refunding the 1996 Bonds;
and
WHEREAS, the refunding of the 1996 Bonds will provide a public benefit by reducing
debt service on City obligations and releasing the lien on City Hall that secures the 1996 Bonds;
and
WHEREAS, the City wishes to facilitate the issuance of the Bonds with the assistance of
the San Bernardino Joint Powers Financing Authority (the "Authority'), a joint exercise of
powers agency of which the City is a member, through a lease/leaseback transaction as described
below; and
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WHEREAS, the Authority and the City will enter into a Lease Agreement (Site Lease)
J (the "Site Lease") pursuant to which the City will lease to the Authority the real property and
improvements comprising the City Yard, subject to adjustment as described in Section 2 below
(the "Leased Property"), and a Lease Agreement (the "Lease"), pursuant to which the Authority
will lease the Leased Property back to the City, and
WHEREAS, pursuant to the Lease, the City will pay Lease Payments (as such term is
defined in the Lease) to the Authority; and
WHEREAS, in order to facilitate the issuance of the Bonds, the Authority will pledge
the Lease Payments to the owners of the Bonds pursuant to an Indenture (the "Indenture"), by
and among the City, the Authority and U.S. Bank National Association, as trustee (the
"Trustee'); and
WHEREAS, the City has been presented with a tern sheet from Western Alliance
Business Trust, a wholly owned affiliate of Western Alliance Bank (the "Purchaser"), pursuant
to which the Purchaser has agreed to purchase the Bonds through a private placement; and
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WHEREAS, the City and the Authority have determined that a private placement sale of 1
the Bonds to the Purchaser will result in a lower overall cost to the City than a public sale; and
WHEREAS, upon the refunding of the 1996 Bonds, the City will cause to be recorded
with the San Bernardino County Recorder terminations of certain previously recorded lease
documents related to the 1996 Bonds and/or reconveyances of the interests that were granted
through such lease documents (collectively, the "1996 Lease Terminations"); and
WHEREAS, there are now on file with the City Clerk copies of the Site Lease, the
Lease, the 1996 Lease Terminations, an Escrow Agreement (1996 Bonds) among the City, the
Authority and the Trustee, as well as a form of Assignment Agreement between the Trustee and
the Authority; and
WHEREAS, the City has held a public hearing on the date hereof pursuant to
Government Code Section 6586.5 following publication of notice not less than five days prior to
the hearing, concerning the issuance of the Bonds and the refunding of the 1996 Bonds and has
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determined that the issuance of the Bonds and the refunding of the 1996 Bonds with the
assistance of the Authority will result in significant public benefits; and
WHEREAS, Section 8855 of the Government Code of the State of California requires
the City to adopt a debt management policy prior to the issuance of bonds; and
WHEREAS, the City wishes to adopt the debt management policy attached hereto as the
debt management policy of the City pursuant to Section 8855 of the Government Code of the
State of California; and
WHEREAS, all acts, conditions and things that are required by the Constitution and laws
of the State of California to exist, to have happened and to have been performed precedent to and
in connection with the consummation of the financing that is authorized hereby do exist, have
happened 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 consummate such financing for the purpose, in the manner and upon the terms herein
provided;
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY
COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS:
Section 1. The City Council hereby specifically finds and declares that each of the
statements, findings and determinations of the City in the recitals that are set forth above and in
the preambles of the documents that are approved herein are true and correct, and that the
issuance of the Bonds and the refunding of the 1996 Bonds will result in significant public
benefits for the residents of the City of the type that is described in Government Code Section
6586 (a) and (d).
23 Section 2. The Lease in substantially the form attached hereto as Exhibit "A" is hereby
24 approved. The Mayor, any member of the City Council, the City Attorney, the City Manager,
25 the Finance Director or the designee thereof (the "Authorized Officers"), acting alone, are hereby
26 authorized and directed, for and in the name and on behalf of the City, to execute and deliver to
27 the Authority the Lease in substantially said form, with such changes, insertions and omissions
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therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereofby one or more of
the Authorized Officers; provided, however, that the amount of the principal component of the
Lease Payments shall not exceed $4,500,000, the scheduled interest components shall accrue at a
rate not to exceed 4.50% per annum and the final scheduled Lease Payment shall not be later
than January 1, 2023 (subject to extension as provided in the Lease). In the event that it is
determined by an Authorized Officer that there are limitations or restrictions on the ability of the
City to lease or sublease any portion of the Leased Property as contemplated by the Lease, the
Authorized Officers may designate other or additional real property of the City to be leased or
subleased pursuant to the Lease, with such designation to be conclusively evidenced by the
execution and delivery of the Lease by one or more of the Authorized Officers.
Section 3. The Site Lease in substantially the form attached hereto as Exhibit `B" is
hereby approved. The Authorized Officers, acting alone, are hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver to the Authority the Site Lease
in substantially said form, with such changes, insertions and omissions therein as the Authorized
Officer or Officers executing the same may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof by one or more of the Authorized Officers.
Section 4. The Indenture in substantially the form attached hereto as Exhibit "C" is
hereby approved. The Authorized Officers, acting alone, are hereby authorized and directed, for
and in the name and on behalf of the City, to execute and deliver to the Authority the Indenture
in substantially said form, with such changes, insertions and omissions therein as the Authorized
Officer or Officers executing the same may require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof by one or more of the Authorized Officers.
Section 5. The 1996 Lease Terminations in substantially the form attached hereto as
Exhibit "D" are hereby approved. The Authorized Officers, acting alone, are hereby authorized
and directed, for and in the name and on behalf of the City, to execute and deliver to the 1996
Lease Terminations in substantially said forms, with such changes, insertions and omissions
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therein as the Authorized Officer or Officers executing the same may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof by one or more of
the Authorized Officers.
Section 6. The Assignment Agreement between the Trustee and the Authority on file
with the City Clerk is hereby approved for execution and delivery by the Authority in
substantially the form on file with the City Clerk. This Resolution shall constitute a consent of
the City pursuant to Government Code Sections 5951 and 5952 for any transfer of interests in the
Lease made in accordance with the Assignment Agreement and the Lease.
Section 7. The Escrow Agreement (1996 Bonds) among the Authority, the City and
the Trustee in substantially the form attached hereto as Exhibit "E" is hereby approved. The
Authorized Officers, acting alone, are hereby authorized and directed, for and in the name and on
behalf of the City, to execute and deliver to the Escrow Agreement (1996 Bonds) in substantially
said form, with such changes, insertions and omissions therein as the Authorized Officer or
Officers executing the same may require or approve, such approval to be conclusively evidenced
by the execution and delivery thereof by one or more of the Authorized Officers.
Section 8. The City Clerk and such person or persons as may have been designated
by the City Clerk to act on the City Clerk's behalf are hereby authorized and directed to attest the
signature of the Authorized Officers designated herein to execute any documents described
herein, and to affix and attest the seal of the City, as may be required or appropriate in
connection with the execution and delivery of the Site Lease, the Lease, the 1996 Lease
Terminations and the Escrow Agreement (1996 Bonds).
Section 9. The Debt Management Policy that is attached hereto as Exhibit "F" is
hereby adopted as the Debt Management Policy of the City for purposes of Section 8855 of the
Government Code of the State of California.
Section 10. The Authorized Officers are each hereby authorized and directed, jointly
and severally, to do any and all things and to execute and deliver any and all documents which
each may deem necessary or advisable (including an agreement to retain the services of Stradling
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Yocca Carlson & Rauth, a Professional Corporation (as Bond Counsel), Urban Futures, Inc. (as
Municipal Advisor) and Stifel, Nicolaus & Company, Incorporated (as Placement Agent) to
assist the City with the financing and the payment of costs of issuance approved by the
Authorized Officers) in order to consummate the refunding of the 1996 Bonds and otherwise to
carry out, give effect to and comply with the terms and intent of this Resolution, the Site Lease,
the Lease, the Indenture, the Assignment Agreement and the 1996 Lease Terminations, including
but not limited to purchasing a title insurance policy with respect to the Leased Property,
executing a rate lock agreement with the Purchaser, causing the recording of the documents that
are described herein and executing and delivering redemption instructions with respect to the
1996 Bonds. Such actions heretofore taken by such officers or designees are hereby ratified,
confirmed and approved.
Section 11. This Resolution shall take effect immediately upon its adoption.
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RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, MAKING REQUIRED FINDINGS AND
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING
TO THE ISSUANCE OF SAN BERNARDINO JOINT POWERS FINANCING
AUTHORITY 2018 LEASE REVENUE REFUNDING BONDS IN AN AGGREGATE
PRINCIPAL AMOUNT NOT TO EXCEED $495001,000 FOR THE PURPOSE OF
REFUNDING THE 1996 LEASE REVENUE REFUNDING BONDS, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS IN CONNECTION
THEREWITH
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
City Council of the City of San Bernardino at a meeting thereof, held on the 20th
day of December, 2017, by the following vote, to wit:
Council Members: AYES NAYS ABSTAIN ABSENT
MARQUEZ
BARRIOS
VALDIVIA
SHORETT
NICKEL
RICHARD
MULVIHILL
Georgeann Hanna, City Clerk
The foregoing Resolution is hereby approved this day of
Approved as to form:
Gary D. Saenz, City Attorney
By -- —
R. Carey Davis, Mayor
City of San Bernardino
,201—.
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I hereby certify that the foregoing resolution was duly introduced, passed and adopted at
the time and place and by the vote as noted above.
Clerk of the City Council
City of San Bernardino
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