1992-141-Approving Preliminary Official Statement, Official Notice Of Sale, Official Bid Form, And Notice Of Intention For The Parking Lot #4 Financing??030 -02 RUM DJO -bd
RESOLUTION NO. 1992 - 141
A RESOLUTION OF THE LOS GATOS TOWN COUNCIL APPROVING
PRELIMINARY OFFICIAL STATEMENT, OFFICIAL NOTICE OF SALE,
OFFICIAL BID FORM, AND NOTICE OF INTENTION FOR THE PARKING
LOT #4 FINANCING, APPROVING, AUTHORIZING AND DIRECTING
EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS, AND
AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT
THERETO
RESOLVED, by the Town Council (the "Council') of the Town of Los Gatos (the
'Town "), County of Santa Clara, California, that
WHEREAS, the Town has determined that it is in the interests of the Town at this time to
provide for the financing of the acquisition and construction of Parking Lot #4, together with
related and appurtenant facilities (the "Project'); and
WHEREAS, in order to provide moneys to pay the costs of constructing the Project, the
Los Gatos Redevelopment Agency (the "Agency ") proposes to lease the Project to the Town
pursuant to a Lease Agreement, dated as of August 1, 1992 (the "Lease Agreement'); and
WHEREAS, under the Lease Agreement, the Agency is required to cause to be deposited
certain sums of money to be credited, held and applied in accordance with the Lease Agreement,
and with a Trust Agreement, dated as of August 1, 1992 (the "Trust Agreement') by and among
the Agency, the Town and the Bank of America National Trust and Savings Association (the
"Trustee ") and
WHEREAS, upon delivery of the Lease Agreement, the Agency is required to deliver to
the Town for deposit into the Construction Fund established under the Trust Agreement, in
addition to other moneys to be deposited with the Trustee, moneys for the acquisition, construction
and furnishing of the Project. For the purpose of obtaining such moneys, the Agency is willing to
sell to certain persons (the "Owners ") undivided fractional interests in the Lease Payments, such
fractional interests to be evidenced by certificates of participation therein (the "Certificates "). In
order to make such undivided fractional interests marketable on terms acceptable to the Town, the
Agency is willing to assign and transfer its rights under the Lease Agreement to the Trustee for the
benefit of the Owners of the Certificates. Concurrently with the delivery of this Agreement, the
Trustee is executing and delivering the Certificates on behalf of the Town in an aggregate face
amount of not -to- exceed Three Million Dollars ($3,000,000). The proceeds of such sale are
anticipated to be sufficient to permit the Agency to make the deposits required under the Lease
Agreement and the Trust Agreement and to permit the Agency to pay therewith the cost of
acquisition, construction and furnishing of the Project; and
WHEREAS, the Agency has determined that the Project is of benefit to the Central Los
Gatos Redevelopment Project Area, and has agreed to reimburse the Town for all or a portion of
the costs of the Project, pursuant to that certain Reimbursement Agreement, by and between the
Town and the Agency, dated Is August 1, 1992 (the "Reimbursement Agreement'); and
WHEREAS, in connection therewith, it is in the public interest and for the public benefit
that the Town authorize and direct execution of the Lease Agreement and certain other financing
documents in connection therewith; and
WHEREAS, in connection therewith, and pursuant to the Town's authorization, Miller &
Schroeder Financial, Inc. (the "Financial Advisor ") has prepared and presented
of preliminary official statement containing information material to to the Town a form
the offering and sale of the
certificates of participation described below (the "Preliminary Official Statement "), a notice of sale
(the "Official Notice of Sale "), a bid form (the "Official Bid Form "), and a Notice of Intention (the
Notice of Intention ") relating to the sale of the Certificates; and
WHEREAS, the documents below specified have been filed with the Town Clerk, and the
members of the Town Council, with the aid of its staff, have reviewed said documents;
NOW, THEREFORE, it is hereby DECLARED, ORDERED AND DETERMINED, as
follows:
SECTION I. The below- enumerated documents be and are hereby approved, and the
to execute
Mayor, the Town Manager and the Finance Manager are hereby separately authorized and directed
such official, a d the Town Clerk is hereby authorized and dt nissi is attest toe approved by
signature:
(a) a site lease, in substantially the form on file with the Town Clerk, relating to
the leasing of the Site, between the Town, as lessor, and the Agency, as lessee (the "Site
Lease ");
(b) the Lease Agreement, in substantially the form on file with the Town Clerk,
relating to the leasing of the Project, between the Agency, as lessor, and the Town, as
lessee, so long as the stated term of the Lease Agreement does not exceed twenty (20)
years, so long as the principal amount of the Lease Agreement does not exceed
$3,000,000, and so long as the net interest cost to the Town under the Lease Agreement
does not exceed seven and seventy -five hundredths percent (7.75 %) per annum; and
(c) a trust agreement, in substantially the form on file with the Town Clerk, by
and among the Agency, the Town and the Trustee, relating to the financing and the
execution and delivery of certificates of participation evidencing the fractional interests of
the owners thereof in lease payments to be made by the Town under the Lease Agreement
(the "Certificates of Participation "); and
(d) the Reimbursement Agreement, in substantially the form on file with the
Town Clerk, relating to the Agency's reimbursement to the Town of the Town's cost of
acquiring and constructing the Project; and
SECTION 2, The Financial Advisor, on behalf of the Town, and its Town Clerk, is
authorized and directed to cause the Preliminary Official Statement the Official Notice of Sale, the
Official Bid Form, and the Notice of Intention to be distributed to such municipal bond broker -
dealers, to such banking institutions and to such other persons d may be interested in purchasing
the Certificates therein offered for sale.
SECTION 3 , The Town Clerk is authorized and directed to execute the Official Notice of
Sale and the Notice of Intention on behalf of the Town and to call for bids for the sale of the
Certificates. The Mayor or the Town Manager, on behalf of the Town, is hereby delegated the
authority to accept the best responsible bid for the purchase of the Certificates, determined in
accordance with the Official Notice of Sale. The Mayor or the Town Manager is hereby authorized
and directed to accept such bid, for and in the name of the Town, by notice to the successful
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bidder. In the event two or more bids setting forth identical interest rates and premium, if any, are
received, the Mayor or the- Town Manager, on behalf of the Town, may exercise his own
discretion and judgment in making the award and may award the Certificates of Participation on a
pro rata basis in such denominations as he shall determine. The Mayor or the Town Manager, on
behalf of the Town, may, in his discretion, reject any and all bids and waive any irregularity or
informality in any bid. The Mayor or the Town Manager, on behalf of the Town, shall award the
Certificates or reject all bids not later than 26 hours after the expiration of the time prescribed for
the receipt of proposals unless such time of award is waived by the successful bidder.
SECTION 4. The Town Council hereby approves the preparation of a Preliminary
Official Statement describing the financing, together with any changes therein or additions thereto
deemed advisable by the Mayor or the Town Manager. The Town Council authorizes and directs
the Mayor or the Town Manager, on behalf of the Town, to deem "final' pursuant to Rule 15c2 -12
under the Securities Exchange Act of 1934 (the "Rule ") the Preliminary Official Statement prior to
its distribution by the Financial Advisor.
SECTION S. The Mayor or the Town Manager is authorized and directed to cause the
imi
Prelnary Official Statement to be brought into the form of a final official statement (the "Final
Official Statement ") and to execute said Final Official Statement, dated as of the date of the sale of
the Certificates, and a statement that the facts contained in the Final Official Statement, and any
supplement or amendment thereto (which shall be deemed an original part thereof for the purpose
Of such statement) were, at the time of sale of the Certificates, true and correct in all material
respects and that the Final Official Statement did not, on the date of sale of the Certificates, and
does not, as of the date of delivery of the Certificates, contain any untrue statement of a material
fact with respect to the Town or omit to state material facts with respect to the Town required to be
stated where necessary to make any statement made therein not misleading in the light of the
circumstances under which it was made. The Mayor or the Town Manager shall take such further
actions prior to the signing of the Final Official Statement as are deemed necessary or appropriate
to verify the accuracy thereof. The execution of the final Official Statement, which shall include
such changes and additions thereto deemed advisable by the Mayor or the Town Manager and such
information permitted to be excluded from the Preliminary Official Statement pursuant to the Rule,
shall be conclusive evidence of the approval of the final Official Statement by the Town.
SECTION h. The Final Official Statement, when prepared, is approved for distribution
in connection with the offering and sale of the Certificates.
SECTION 7. In accordance with the provisions of section 37351.5 of the California
Government Code, the Town hereby elects to guarantee payment under the Lease Agreement from
moneys credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to
which the Town is entitled under Chapter 5 (commencing with section 11001) of Part 5 of Division
2 of the California Revenue and Taxation Code. The Mayor or the Town Manager shall, prior to
execution of the Lease Agreement, provide notice to the State Controller of such election, which
notice shall include a schedule for payments to be made by the Town under the Lease Agreement
and shall identify the Trustee as the trustee selected by the Town for the purposes of such section.
In the event that, for any reason, the funds otherwise available to the Town will not be sufficient to
make any payment under the Lease Agreement at the time that payment is required, the Mayor or
the Town Manager shall so notify the Trustee which shall immediately communicate that
information to the affected owners of the Certificates and to the State Controller.
SECTION 8. The Mayor or the Town Manager, the Town Clerk and all other
appropriate officials of the Town are hereby authorized and directed to execute such other
agreements, documents and certificates as may be necessary to effect the purposes of this
resolution and the financing herein authorized.
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SECTION 9:
This Resolution shall take effect upon its adoption by the Town Council
PASSED AND ADOPTED at a regular meeting of the Town Council held on the
20th day of July, 1992 by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Joanne Benjamin, Steven Blanton, Brent Ventura
Mayor Eric D. Carlson
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED:
MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK OF THE TOWN OF LOS15 GATOS
LOS GATOS, CALIFORNIA
22030 -03 JHAW,DJO:br' 6/12!92
7/09/92
7q 5192
WHEN RECORDED, RETURN TO: TOWN CLEFY
AGR:
David J. Oster Esq.
Jones Hall Hill & White `
Four Embarcadero Center, 19th Floor
San Francisco, California 94111
SITE LEASE
Dated as of August 1, 1992
by and between the
TOWN OF LOS GATOS,
as Lessor
and the
LOS GATOS REDEVELOPMENT AGENCY,
as Lessee
(Parking Lot #4 Project)
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SectionI.I. Definit ions .......................................................................................... ..............................2
Section 1.02. Article and Section Headings .................................................................. ..............................2
Section 1.03. References to Agreement ................. ............................... 2
Section1.04. Number and Gender ............................................................................... ..............................2
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.01. Representations, Covenants and Warranties of the Town ...... ...............................
Section 2.02. Representations, Covenants and Warranties of Agency ..................3
ARTICLE III
AGREEMENT TO LEASE; TERM OF SITE LEASE; SITE LEASE PAYMENT
Section 3.01. Lease . ..............
_ --
- -- .............................................................................. ..............................4
Section 3.02. Term ................................................ ...............................
............. .............................
Section 3.03. Site Lease Payment .............................................................................. .............................. .4
4
Section 3.04. Title ................................. ...............................
Section3.05. No Merger ........................................................... ............................... .................. ............4
Section 3.06. No Effect on Pending Litigat ion .............................................................. ..............................4
ARTICLE IV
EMINENT DOMAIN; NET PROCEEDS
Section 4.01. Eminent Domain ............................................... ...............................
... ..............................5
Section 4.02. Application of Net Proceeds ................................................................... ..............................5
ARTICLE V
MISCELLANEOUS
Section5.01.
Liens ................................................................................................
~
Section 5.02.
Assignment and Subleasing by the Agency
..............................6
Section5.03.
..............................................
Amendment .........................:...............
..............................6
Section 5.04.
...............................
Notices ..................................................
......... ............................... .......6
5.05.
...............................
Binding Effect ......................................................................................
6
SSection
ection 5.06.
Severability ........................................................................................
..............................6
Section 5.07.
Further Assurances and Corrective Instruments ...........................................
..............................6
Section 5.08.
Execution in Counterparts.
..............................6
Section5.09.
.....................................................................
Applicable Law .............................................................
..............................7
Section 5.10.
Agency and Town Representat ives ...........................................................
............................... 7
Section5.11.
Captions .............................................................................................
..............................7
..............................7
EXHIBIT A DESCRIPTION OF SITE
3
i-
SITE LEASE
THIS SITE LEASE, dated for convenience as of August 1, 1992, by and between the
TOWN OF LOS GATOS, a general law city and political subdivision duly organized and existing
under the Constitution and laws of the State of California, as lessor (the "Town "), and the LOS
GATOS REDEVELOPMENT AGENCY, a public body, corporate and politic duly formed,
organized and acting pursuant to the laws of the State of California, as lessee (the "Agency ");
WITNESSETH:
WHEREAS, the Town has determined that it is in the interests of the Town at this time to
provide for the financing of the acquisition and construction of Parking Lot #4, together with
related and appurtenant facilities (the "Project "); and
WHEREAS, the Project will be located on that certain land owned by the Town and
described in Exhibit A hereto (the "Site'); and
WHEREAS, the Town will lease the Site to the Agency under this Site Lease dated as of
August 1, 1992, by and between the Town and the Agency (the "Site Lease "); and
WHEREAS, in order to provide moneys to pay the costs of acquiring and constructing
the Project, the Agency proposes to lease the Site and the Project to the Town pursuant to the Lease
Agreement, dated as of August 1, 1992 (the "Lease Agreement "); and
NOW, THEREFORE, in consideration of the above premises and of the mutual
covenants hereinafter contained and for other good and valuable consideration, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section I.I. DefU1itionL, All terms specifically defined in the Trust Agreement dated
as of August 1, 1992 by and among Bank of America National Trust and Savings Association, as
trustee, the Los Gatos Redevelopment Agency and the Town of Los Gatos (the "Trust
Agreement ") shall have the same respective meanings when used herein. In addition, the
following terms defined in this Section 1.1 shall have the respective meanings herein set forth
when used herein.
"Lease Agreement" means the Lease Agreement, dated as of August 1, 1992, by and
between the Agency as lessor and the Town as lessee, together with any duly authorized and
executed amendments thereto.
"Permitted Encumbrances" means, as of any particular time: (i) liens for general ad
valorem taxes and assessments, if any, not then delinquent; (ii) the Assignment Agreement; (iii)
this Site Lease and the Lease Agreement; (iv) the Trust Agreement; (v) any right or claim of any
mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed
by law; (vi) easements, rights of way, mineral rights, drilling rights and other rights, reservations,
covenants, conditions or restrictions which exist of record as of the date t which the Certificates
are delivered to the purchasers thereof and which the Town certifies in writing will not materially
impair the use of rights, Site for the Project; and (vii) easements, rights of way, mineral rights, drilling
rights and other rights, reservations, covenants, conditions or restrictions established following the
date of recordation of this Site Lease and to which the Agency and the Town consent in writing.
"Project" means the Parking Lot #4 facility more fully described in Exhibit C to the Lease
Agreement, and located on the Site.
"Site" means the real property located in the Town described in Exhibit A hereto.
"Site Lease" means this Site Lease, together with any duly authorized and executed
amendments hereto.
Section 1.02. Article and Cr�rinn rr a Unless otherwise specified,
references to Articles, Sections, and other subdivisions of this Site Lease are to be designated
Articles, Sections, and other subdivisions of this Site Lease as originally executed. The headings
or titles of the several articles and sections, and the table of contents appended to copies hereof,
shall be solely for convenience of reference and shall not affect the meaning, construction or effect
of the provisions hereof.
Section 1.03. eference to Agr Pmp.,r The words "hereof," "herein,"
"hereunder," and words oft milar import refer to this Site Lease as a whole.
Section 1.04. Number and Gender, The singular form of any word used herein,
including terms defined as provided in Section 1.01, shall include the plural, and vice versa. The
use of a word of any gender shall include all genders.
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ARTICLE H
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.01. Renresen ationc Covenants a]
The Town represents, covenants and warrants to the Agency as
(a) Due Organization and Existence, The Town is a general law city and political
subdivision duly organized and existing under the Constitution and laws of the State.
(b) Authorization The laws of the State authorize the Town to enter into this Site
Lease and to enter into the transactions contemplated by and to carry out its obligations
under this Site Lease, and the Town has duly authorized and executed this Site Lease.
(c) No Vi-- _olations. Neither the execution and delivery of this Site Lease nor the
fulfillment of or compliance with the terms and conditions hereof nor the consummation of
the transactions contemplated hereby, conflicts with or results in a breach of the terms,
conditions or provisions of any restriction or any agreement or instrument to which the
Town is now a party or by which the Town is bound, or constitutes a default under any of
the foregoing, or results in the creation or imposition of any lien, charge or encumbrances
whatsoever upon any of the property or assets of the Town, or upon the Site or the Project,
except Permitted Encumbrances.
Section 2.02. R or c ntationc Covenants and WBrrantioe r e The
Agency represents, covenants and warrants to the Town as follows:
(a) Due Organization and—Existence, The Agency is a community redevelopment
agency duly formed, operating and existing under the laws of the State; has power to enter
into the Site Lease; is possessed of full power to sublease real and personal property; and
has duly authorized the execution and delivery of this Site Lease.
(b) Authorization. The laws of the State authorize the Agency to enter into this Site
Lease and to enter into the transactions contemplated by and to carry out its obligations
under this Site Lease, and the Agency has duly authorized and executed this Site Lease.
(c) No Violatign¢ Neither the execution and delivery of this Site Lease nor the
fulfillment of or compliance with the terms and conditions hereof, nor the consummation of
the transactions contemplated hereby, conflicts with or results in a breach of the terms,
conditions or provisions of any restriction or any agreement or instrument to which the
Agency is now a party or by which the Agency is bound, or constitutes a default under any
of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of the Agency, or upon the Project or the
Site, except Permitted Encumbrances.
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ARTICLE III
AGREEMENT TO LEASE; TERM OF
SITE LEASE; SITE LEASE PAYMENT
Section 3.01. _LgUg, The Town agrees to lease the Site to the Agency, and the
Agency hereby agrees to lease the Site from the Town, upon the terms and conditions set forth in
this Site Lease.
Section 3.02. IffnL The term of this Site Lease shall commence on the Closing Date
and shall end on August 1, 2012, unless such term is extended as hereinafter provided. If on
August 1, 2012, the Trust Agreement shall not be discharged by its terms, then the term of this Site
beyond August 1, 2022). If prior to August 1, 2012, the Trust Agreement
Lease shall be extended until the Trust Agreement shall be discharged by its terms (but in no event
shall
its terms, the term of this Site Lease shall thereupon end. be discharged by
Section 3.03. Site Leace Pavment The Agency hereby agrees to pay to the Town,
as rental for the use and occupancy of the Project and the Site during the term of this Site Lease,
the amount of Ten Dollars ($10.00) (the "Site Lease Payment ") which shall be due and payable on
the Closing Date. No further amounts shall be due and payable by the Agency to the Town under
this Site Lease.
Section 3.04. Title Title to the Project shall vest in the Agency, and the Agency shall
hold title to the Project and any and all additions which comprise fixtures, repairs, replacements or
modifications to the Project and the Site, including those fixtures, repairs, replacements or
modifications which are added to the Project and the Site by the Town at its own expense and
which may be removed without damaging the Project and including any items added to the Project
and the Site by the Town pursuant to Section 5.9 of the Lease Agreement.
Section 3.05. No Mgrger. It is the express intention of the parties hereto that this Site
Lease and the obligations of the parties hereunder shall be and remain separate and distinct from the
Lease Agreement and the obligations of the parties thereunder, and that during the term of the
Lease Agreement no merger of title or interest occur or be deemed to occur as a result of the
position of the Town as lessee under the Lease Agreement and as lessor under this Site Lease, or
the position of the Agency as lessor under the Lease Agreement and as lessee under this Site Lease.
Section 3.06. No F.ff t nn P nding I itigation The parties hereto acknowledge
that the Town is currently engaged to httgation regarding the Site entitled People of the State of
California and the Town of Los Gatos v. Pacific Gas and Elmijig Company, et al., Santa Clara
County Superior Court No. 718026, (the "Litigation ") in which the Town seeks to recover costs
arising in connection with evaluation and corrective action resulting from the 1990 discovery of
degraded crude oil and other contaminants on the Site. It is the express intention of the parties
hereto that, notwithstanding the execution of this Site Lease, the Lease Agreement, or any other
document or agreement, the right of the Town to maintain the Litigation and to recover damages
thereunder be preserved. Accordingly, the parties hereto expressly agree that nothing in this Site
Lease or any other document or agreement between the Town and the Agency shall: (i) be
interpreted to transfer, or transfer, any interest in the Litigation; (ii) in any way impair the right of
the Town to maintain the Litigation and to recover costs and damages in connection therewith; (iii)
or transfer any of the Town's possible continuing obligation to complete corrective action at the
Site.
ME
ARTICLE IV
EMINENT DOMAIN; NET PROCEEDS
Section 4.01. Fmin nt Dom ^in If all of the Project and the Site shall be 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 Site Lease shall cease as of the day possession shall
be so taken. If less than all of the Project and the Site shall be taken permanently, or if all of the
Project or the Site or any part thereof shall be taken temporarily, under the power of eminent
domain, this Site Lease shall continue in full force and effect and shall not be terminated by virtue
of such taking and the parties waive the benefit of any law to the contrary,
Section 4.02. Aanlication of i
award resulting from any damage to or destruction of any Project bytfue or othe of any insurance and the
Net Proceeds of any eminent domain awazd resulting from any event described in Section d th
hereof, shall be appfied as set forth in Section 5.4 of the Lease Agreement. All such Net Proceeds
shall be paid to the Town or the Trustee as their interests ma a
and the Agency hereby waives any and al] right, tide and interes hich tdt may have in and to any
such Net Proceeds by virtue of its estate in the Project and the Site under this Site Lease.
-5-
ARTICLE V
MISCELLANEOUS
Section 5.01. Liens. The Agency shall not, directly or indirectly, create, assume or
suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the
Agency an
Project or the Site, other than the respective rights of the Ad the Town as herein provided
and Permitted Encumbrances.
Section 5.02. Assienment and Snhl ^sing by the A
For the urose of
providing funds to enable the Agency to pay the Site Lease Payment on the Clos ng Date, the
Agency has leased the Project and the Site to the Town pursuant to the Lease Agreement. The
Agency shall not have the right to further sublease or to assign any of its interests under this Site
Lease in and to the Project and the Site or any portion thereof.
Section 5.03. Amendment Without the prior written consent of the Trustee, the
Agency and the Town will not alter, modify or cancel, or agree or consent to alter, modify or
cancel this Site Lease, excepting only such alteration or modification as may be permitted by Article
X of the Trust Agreement.
Section 5.04. Not_ iced All notices, certificates or other communications hereunder
shall be sufficiently given and shall be deemed to have been received 48 hours after deposit in the
United States mail in registered or certified form with postage fully prepaid:
If to the Town: Town of Los Gatos
110 E. Main Street
Los Gatos, California 95032
If to the Agency: Los Gatos Redevelopment Agency
110 E. Man Street
Los Gatos, California 95032
If to the Trustee: Bank of America National Trust and Savings
Association
One Embarcadero Center, 20th Floor
San Francisco, California 94111
Attention: Corporate Trust Division, N5 -145
The Agency, the Trustee and the Town, by notice given hereunder, may designate different
addresses to which subsequent notices, certificates or other communications will be sent.
Section 5.05. HiMdiBZ—Eft4=L This Site Lease shall inure to the benefit of and shall
be binding upon the Agency and the Town and their respective successors and assigns.
Section 5.06. Severabili
, ty_ In the event any provision of this Site Lease shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 5.07. Further Accuranrv� ^d (nrrPrtivr in r • The Agency
and the Town 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
Ell
the Project or the Site hereby leased or intended so to be or for carrying out the expressed intention
of this Site Lease.
Section 5.08. Fxecution in t O�mtprnarfe. This Site Lease may be executed in
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
Section 5.09. ADn❑ abl i,aw This Site Lease shall be governed by and construed
in accordance with the laws of the State.
Section 5.10. A�encv and Town Reor� +� Whenever under the
provisions of this Site Lease the approval of the Agency or the Town is required, or the Agency or
the Town is required to take some action at the request of the other, such approval or such request
shall be given for the Agency by an Agency Representative and for the Town by a Town
Representative, and any party hereto shall be authorized to rely upon any such approval or request.
Section 5.11. ('an� lion, The captions or headings in this Site Lease are for
convenience only and in no way define, limit or describe the scope or intent of any provisions or
Section of this Site Lease.
-7-
IN WITNESS WHEREOF, the Agency has caused this Site Lease to be executed in its
corporate name by its duly authorized officers and sealed with its corporate seal; and the Town has
caused this Site Lease to be executed in its name by its duly authorized officers and sealed with its
corporate seal, as of the date first above written.
(SEAL)
Attest:
By
Town Clerk
(SEAL)
Attest:
By
Secretary
TOWN OF LOS GATOS
By
Town Manager
LOS GATOS REDEVELOPMENT AGENCY
By
Executive Director
In
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On this day of in the year 1992, before me,
a notary public, personally appeared and
personally known to me or proved to me on the basis of satisfactory
evidence to be the persons who executed this instrument as the Town Manager and Town Clerk,
respectively, of the Town of Los Gatos and acknowledged to me that the Town of Los Gatos
executed it.
(Notarial Seal)
(
Typed Name-, (signature)
Notary Public for the
State of California
My commission Expires:
1
STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
On this ___ day of in the year 1992, before me,
_ a notary public, personally appeared and
personally known to me or proved to me on the basis of satisfactory evidence to
be the persons who executed this instrument as the Executive Director and Secretary, respectively,
of the Los Gatos Redevelopment Agency, the Agency therein named, and acknowledged to me that
such Agency executed the same pursuant to its bylaws or a resolution of its board of directors.
(Notarial Seal)
(signature)
Typed Name:
Notary Public for the
State of California
My commission Expires:
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EXHIBIT A
DESCRIPTION OF SITE
A -1
22030 -03 JIiAW:DJO:bd
WHEN RECORDED, RETURN TO: TOWN CLERK
David J. Oster, Esq. AGR: b y
Jones Hall Hill & White
Four Embarcadero Center, 19th Floor
San Francisco, California 94111
LEASE AGREEMENT
Dated as of August 1, 1992
by and between the
6/; -
7/fi9,92
7/15/92
LOS GATOS REDEVELOPMENT AGENCY, as Lessor
and the
TOWN OF LOS GATOS,
as Lessee
(Parking Lot #4 Project)
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND EXHIBITS
Section I.I. Definitions
Section 1.2. Article and Section Headings..... ............................................................. ..............................4
Section 1.3. References to Agreement ........................
............................................... ..............................4
SSection 1.4. Number and Gender., ............................................................................. ..............................4
ection 1.5. Exhibit s ............................................................................................. ..............................4
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of the Town .............................
Section 2.2. Representations, Covenants and Warranties of Agency .........................5
ARTICLE III
DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION OF PROJECT
Section 3.1. Deposit of Moneys ........................ ...............................
Section 3.2. Construction of Project ......................................................................... ..............................7
ARTICLE IV
AGREEMENT TO LEASE; TERM OF LEASE AGREEMENT; LEASE
PAYMENTS
Section 4.1.
Agreement to Lease ..............................
........ 15
Section 4.2.
...............................
Term of Lease Agreement .....................................................................
. ..............................8
Section 4.3.
Lease Payments ..................
................ ..............................8
Section 4.4.
Quiet Enjoyment ........ ...............................
8
Section 4.5.
..........................................
Title ...........................................
..............................9
Section 4.6.
............................... ........................
Additional Payments .....................
.............................10
Section 5.7.
...............................
..........10
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.1.
Maintenance, Utilities, Taxes and Assessments
........ 15
Section 5.2.
...............................
Modification of Project ...........................
............................... 11
Section 5.3.
............................................
Public Liability and Property Damage Insurance ..........................................
.............................11
Section 5.4.
Fire and Extended Coverage Insurance
.............................12
Section 5.5.
........................................................
Rental Interruption Insurance ...................................................................
.............................12
Section 5.6.
Title Insurance ..........................
.............................12
Section 5.7.
............................... . ........................
Insurance Net Proceeds ...........................................................................
............................... 13
Section5.8.
Advances . .........................................................................................
.............................13
Section 5.9.
Installation of Town's Equipment .............................................................
.
Section5.10.
Liens .......................................................
.............................13
Section 5.11.
...............................
Compliance With Site Lease
....... ............................... .14
Section 5.12.
. ...............................
Removal of Pro ...................................
Property from Lease ..............................................................
.............................14
.....................:.......14
ARTICLE VI
DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET
PROCEEDS
Section 6.1.
Section 6.2.
Section 6.3.
Eminent Domain .............................. ...............................
Application of Net Proceeds ............. ........................
Abatement of Rental in the Event of Damage
........ 15
or Destruction ......................... .............................15
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ARTICLE VII
DISCLAIMER OF WARRANTIES; ACCESS
Section 7.1. Disclaimer of Warranties ......................................................................... .............................16
Section 7.2. Access to the Site and the Project ............................................................. .............................16
Section 7.3. Release and Indemnification Covenants ...................................................... .............................16
ARTICLE VIII
ASSIGNMENT, LEASING AND AMENDMENT
Section 8.1. Assignment by the Agency ..................................................................... .............................17
Section 8.2. Assignment and leasing by the Town ........................................................ .............................17
Section 8.3. Amendment of Lease Agreement .............................................................. .............................17
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Events of Default Defined ....................................................................... .............................18
Section9.2. Remedies on Default. .......................................................................................................... 18
Section 9.3. No Remedy Exclusive ...............................................................:............ .......................19
Section 9.4. Agreement to Pay Attomeys' Fees and Expenses ......................................... ............................
.......20
Section 9.5. No Additional Waiver Implied by One Waiver ............................................. .............................20
Section 9.6. Application of Proceeds .......................................................................... .............................20
Section 9.7. Trustee and Certificate Owners to Exercise Right s ....................................... .............................20
ARTICLE X
PREPAYMENT OF LEASE PAYMENTS
Section10.1. Security Deposit ................................................................................... .............................21
Section 10.2. Prepayment Purchase Option .................................................................. .............................21
Section 10.3. Mandatory Prepayment In Event of Insured Casualty or Eminent Domain ........ .............................21
Section 10.4. Optional Prepayment from Excess Proceeds of Certificat es ............................ .............................21
Section 10.5. Credit for Amounts on Deposit ............................................................... .............................21
ARTICLE XI
MISCELLANEOUS
Section11.1.
Notices ................................................................................................
.............................23
Section11.2.
Binding Effect .......................................................................................
.............................23
Section11.3.
Severability ..........................................................................................
.............................23
Section11.4.
Net - net -net Lease ...................................................................................
.............................23
Section II.S.
Further Assurances and Corrective Instrument s ............................................
.............................23
Section 11.6.
Execution in Counterparts .......................................................................
.............................23
Section11.7.
Applicable Law .....................................................................................
.............................23
Section 11.8.
Agency and Town Representatives ............................................................
.............................24
Section11.9.
Capt ions ..............................................................................................
.............................24
EXHIBIT A SCHEDULE OF LEASE PAYMENTS FOR PROJECT
EXHIBIT B DESCRIPTION OF SITE
EXHIBIT C DESCRIPTION OF PROJECT
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LEASE AGREEMENT
THIS LEASE AGREEMENT, dated for convenience as of August 1, 1992, (the
"Agreement ") by and between the LOS GATOS REDEVELOPMENT AGENCY, a public body,
corporate and politic, formed, operating and acting pursuant to the laws of the State of California,
as lessor (the "Agency "), and the TOWN OF LOS GATOS, a general law city and political
subdivision duly organized and existing under the Constitution and laws of the State of California,
as lessee (the "Town ");
WITNESSETH:
WHEREAS, the Town has determined that it is in the interests of the Town at this time to
provide for the financing of the acquisition and construction of Parking Lot #4, together with
related and appurtenant facilities (the "Project "); and
WHEREAS, the Project will be located on that certain land owned by the Town and
described in Exhibit B hereto (the "Site "); and
WHEREAS, the Town will lease the Site to the Agency under the Site Lease, dated as of
August 1, 1992, by and between the Town and the Agency (the "Site Lease ");
WHEREAS, in order to provide moneys to pay the costs of constructing the Project, the
Agency proposes to lease the Site and the Project to the Town pursuant to this Lease Agreement,
dated as of August 1, 1992 (the "Lease Agreement "); and
WHEREAS, under the Lease Agreement, the Agency is required to cause to be deposited
certain sums of money to be credited, held and applied in accordance with the Lease Agreement
and with a Trust Agreement, dated as of August 1, 1992 (the "Trust Agreement ") by and among
the Agency, the Town and Bank of America National Trust and Savings Association (the
"Trustee'); and
WHEREAS, upon delivery of the Lease Agreement, the Agency is required to deliver to
the Town for deposit into the Construction Fund established under the Trust Agreement, in
addition to other moneys to be deposited with the Trustee, moneys for the acquisition, construction
and furnishing of the Project. For the purpose of obtaining such moneys, the Agency is willing to
sell to certain persons (the "Owners ") undivided fractional interests in the Lease Payments, such
fractional interests to be evidenced by certificates of participation therein (the "Certificates "). In
order to make such undivided fractional interests marketable on terms acceptable to the Agency, the
Agency is willing to assign and transfer its rights under the Lease Agreement to the Trustee for the
benefit of the Owners of the Certificates. Concurrently with the delivery of this Agreement, the
Trustee is executing and delivering the Certificates on behalf of the Town in an aggregate face
amount of Three Million Dollars ($3,000,000). The proceeds of such sale are anticipated to be
sufficient to permit the Agency to make the deposits required under this Lease Agreement and the
Trust Agreement and to permit the Agency to pay therewith the cost of acquisition, construction
and furnishing of the Project; and
WHEREAS, the Agency will establish a trust pursuant to the Trust Agreement and direct
the Trustee to execute and deliver the Certificates representing undivided fractional interests in the
Lease Payments to and including the earlier of the maturity or redemption of the Certificates; and
WHEREAS, the Town is authorized under the Constitution and the laws of the State of
California to enter into this Lease Agreement for the purposes and subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the above premises and of the mutual
covenants hereinafter contained and for other good and valuable consideration, the parties hereto
agree as follows:
511
ARTICLE I
DEFINITIONS AND EXHIBITS
Section I.I. Definition& All terms specifically defined in the Trust Agreement shall
have the same respective meanings when used herein. In addition, the following terms defined in
this Section 1.1 shall have the respective meanings herein set forth when used herein.
"Agency Deposit" means the deposit to be made by the Agency to the Construction
Fund pursuant to Section 3.01 of the Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Lease Agreement" means this Lease Agreement, together with any duly authorized and
executed amendments hereto.
"Lease Payment Date" means January 15 and July 15 of each year during the Term of
this Lease Agreement, commencing January 15, 1993.
"Net Proceeds," when used with respect to insurance or condemnation proceeds, means
any insutrance proceeds or condemnation award paid with respect to the Project, to the extent
remaining after payment therefrom of all expenses incurred in the collecton thereof.
"Original Purchaser" means the first purchaser of the Certificates upon their delivery
by the Trustee.
"Permitted Encumbrances" means, as of any particular time: (i) liens for general ad
valorem taxes and assessments, if any, not then delinquent; (ii) the Assignment Agreement; (iii)
this Lease Agreement; (iv) any right or claim of any mechanic, laborer, materialman, supplier or
vendor not filed or perfected in the manner prescribed by law; (v) easements, rights of way,
mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions
which exist of record as of the Closing Date and which the Town certifies in writing will not
materially impair the use of the Site for the Project; and (vi) easements, rights of way, mineral
rights, drilling rights and other rights, reservations, covenants, conditions or restrictions
established following the date of recordation of this Lease Agreement and to which the Agency and
the Town consent in writing.
"Private Business Use" means use directly or indirectly in a trade or business carried
on by a natural person or in any activity carried on by a person other than a natural person,
excluding, however, use by a governmental unit and use as a member of the general public.
"Proceeds ", when used with reference to the Certificates, means the face amount of the
Certificates, plus accrued interest and premium, if any, less original issue discount.
"Project" means the Parking Lot #4 as more fully described in Exhibit C hereto, and
located on the Site.
"Regulations" means temporary and permanent regulations promulgated under the Code.
"Rental Period" means each twelve -month period during the Term of this Lease
Agreement commencing on August 2 in any year and ending on the next succeeding August 1,
except that the first rental period shall commence on September 1.
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"Site Lease" means the Site Lease, dated as of August 1, 1992, by and between the
Agency and the Town.
"Trust Agreement" means the Trust Agreement dated as of August 1, 1992 by and
among Trustee, the Agency and the Town relating to the Certificates.
Section 1.2. Article and Section Headings Unless otherwise specified,
references to Articles, Sections, and other subdivisions of this Lease Agreement are to be
designated Articles, Sections, and other subdivisions of this Lease Agreement as originally
executed. The headings or titles of the several articles and sections, and the table of contents
appended to copies hereof, shall be solely for convenience of reference and shall not affect the
meaning, construction or effect of the provisions hereof.
Section 1.3. References to Agreement The words "hereof ", "herein ",
"hereunder ", and words of similar import refer to this Lease Agreement as a whole.
Section 1.4. Number and Gender. The singular form of any word used herein,
including terms defined as provided in Section 1. 1, shall include the plural, and vice versa. The
use of a word of any gender shall include all genders.
Section I.S. Exhibits, The following Exhibits are attached to, and by reference made
a part of, this Lease Agreement:
Exhibit A: The schedule of Lease Payments for the Project
Exhibit B: The description of the Site
Exhibit C: The description of the Project
0
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations Covenants and Warranties F a T The
Town represents, covenants and warrants to the Agency as follows:
(a) Dt?e Organization and Existence The Town is a general law city and political
subdivision duly organized and existing under the Constitution and laws of the State.
(b) Authorization. The laws of the State authorize the Town to enter into this Lease
Agreement, the Site Lease and the Trust Agreement and to enter into the transactions
contemplated by and to carry out its obligations under all of the aforesaid Agreements, and
the Town has duly authorized and executed all of the aforesaid Agreements.
(c) No Violations Neither the execution and delivery of this Lease Agreement, the
Site Lease or the Trust Agreement, nor the fulfillment of or compliance with the terms and
conditions hereof or thereof, nor the consummation of the transactions contemplated hereby
or thereby, conflicts with or results in a breach of the terms, conditions or provisions of
any restriction or any agreement or instrument to which the Town is now a party or by
which the Town is bound or constitutes a default under any of the foregoing, or results in
the creation or imposition of any lien, charge or encumbrances whatsoever upon any of the
property or assets of the Town, or upon the Site or the Project, except Permitted
Encumbrances.
(d) Fee Ownership of Site The Town is the fee owner of the Site.
(e) Private Businu Uo ? imi ation The Town shall assure that (i) not in excess
of ten percent (10 %) of the Proceeds of the Certificates is used for Private Business Use if,
in addition, the payment of more than ten percent (10 %) of the principal or ten percent
(10 %) of the interest components of Lease Payments due during the term of this Agreement
is, under the terms of this Agreement or any underlying arrangement, directly or indirectly,
secured by any interest in property used or to be used for a Private Business Use or in
payments in respect of property used or to be used for a Private Business Use or is to be
derived from payments, whether or not to the Town, in respect of property or borrowed
money used or to be used for a Private Business Use; and (ii) and that, in the event that
both (A) in excess of five percent (5 %) of the Proceeds of the Certificates are used for a
Private Business Use, and (B) an amount in excess of five percent (5 %) of the principal or
five percent (5 %) of the interest components of Lease Payments due during the term of this
Agreement is, under the terms of this Agreement or any underlying arrangement, directly or
indirectly, secured by any interest in property used or to be used for said Private Business
Use or in payments in respect of property used or to be used for said Private Business Use
or is to be derived from payments, whether or not to the Town, in respect of property or
borrowed money used or to be used for said Private Business Use, then said excess over
said five percent (5 %) of Proceeds of the Certificates used for a Private Business Use shall
be used for a Private Business Use related to the governmental use of the Project.
(f) Private Loan Use Limitation. n The Town shall assure that not in excess of the
lesser of five percent (5 %) or $5,000,000 of the Proceeds of the Certificates is used,
directly or indirectly, to make or finance a loan (other than loans constituting Nonpurpose
Obligations) to persons other than state or local government units.
-5-
(g) feral Guarantee Prohibition The Town shall not take any action or permit or
suffer any action to betaken if the result of the same would be to cause the Lease Payments
to be "federally guaranteed" within the meaning of section 149(b) of the Code and
Regulations promulgated thereunder.
Section 2.2. Representations Covenant a Warranter v s The
Agency represents, covenants and warrants to the Town as follows:
(a) hue Organization and_Existence, The Agency is a public body, corporate and
politic, duly organized, operating and existing under the laws of the State; has power to
enter into this Lease Agreement, the Assignment Agreement and the Trust Agreement; is
possessed of full power to lease real and personal property; and has duly authorized the
execution and delivery of all of the aforesaid Agreements.
(b) No Eno nnhran & The Agency will not pledge the Lease Payments or any
other amounts derived from the Project or the Site and from its other rights under this Lease
Agreement or the Site Lease, and will not mortgage or encumber the Project or the Site, this
Lease Agreement, the Site Lease, the Assignment Agreement or the Trust Agreement.
(c) No Viola gns. Neither the execution and delivery of the Site Lease, this Lease
Agreement, the Assignment Agreement or the Trust Agreement, nor the fulfillment of or
compliance with the terms and conditions hereof or thereof, nor the consummation of the
transactions contemplated hereby or thereby, conflicts with or results in a breach of the
terms, conditions or provisions of any restriction or any agreement or instrument to which
the Agency is now a party or by which the Agency is bound, or constitutes a default under
any of the foregoing, or results in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of the property or assets of the Agency, or upon the
Project or the Site, except Permitted Encumbrances.
(d) No Assignments Except as provided herein, the Agency will not assign this
Lease Agreement, its right to receive Lease Payments from the Town, or its duties and
obligations hereunder to any other person, furn or corporation so as to impair or violate the
representations, covenants and warranties contained in this Section 2.2.
0
ARTICLE III
DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION OF PROJECT
Section 3.1. Deposit of Money On the Closing Date, the Agency shall cause to be
deposited with the Trustee the proceeds of the sale of the Certificates. Pursuant to Section 3.01 of
the Trust Agreement, the accrued interest with respect to the Certificates ($ ), as
well as capitalized interest in the amount of $ , shall be deposited in the Lease
Payment Fund, the Reserve Requirement shall be deposited in the Reserve Fund, $
shall be deposited in the Costs of Issuance Fund, and the remainder of such proceeds shall be
deposited into the Construction Fund.
Section 3.2. Construction of Project The Agency hereby appoints the Town its
agent to supervise and provide for, or cause to be supervised and provided for, the construction,
improvement and equipping of the Project, and to cause the same to be diligently performed after
the Closing Date. The Town, as agent of the Agency, shall cause all Construction Costs to be paid
from amounts on deposit in the Construction Fund pursuant to Section 3.02 of the Trust
Agreement. The Town hereby covenants to complete the construction, improvement and
equipping of the Project on or prior to December 1, 1992. The Town shall require all contractors
who perform work on the Project to carry builder's all risk insurance and performance bonds.
Upon completion of construction, improvement and equipping of the Project satisfactory to
the Town but in any event not later than sixty (60) days following such completion, the Town shall
deliver to the Trustee a certificate of an architect, accompanied by a written approval of the Town
Representative, stating that the construction, improvement and equipping of the Project have been
completed substantially in conformity with the plans and specifications therefor. The Project shall
be considered substantially complete for purposes of this Section without regard to the issuance of
permits for the portion of the Project consisting of holding cells.
If the Town, for any reason whatsoever, cannot complete the acquisition and construction
and take possession of the Project by December 1, 1992, this Lease Agreement shall not be void or
voidable; but in that event (subject to the provisions of Section 4.3 hereof) Lease Payment9 shall be
payable during the period between Augut 1, 1992 and the time when the Town is able to take
possession of the Project on a pro rata basis for those portions of the Project for which the Town
has use and possession.
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ARTICLE IV
AGREEMENT TO LEASE; TERM OF LEASE AGREEMENT; LEASE PAYMENTS
Section 4.1. A9L=U19ULJ2J4aaf. The Agency hereby agrees to lease the Site and
the Project to the Town, and the Town hereby agrees to lease the Site and the Project from the
Agency, upon the terms and conditions set forth in this Lease Agreement. The Agency shall make
the Site and the Project as and when acquired and constructed available to the Town from and after
the Closing Date.
Section 4.2. Term of i•eac Agreement The Term of this Lease Agreement shall
commence on August 1, 1992 and shall end on August 1, 2012, unless such term is extended as
hereinafter provided. If on August 1, 2012, the Trust Agreement shall not be discharged by its
terms, then the Term of this Lease Agreement shall be extended until the Trust Agreement shall be
discharged by its terms (but in no event beyond July 1, August 1, 2022). If prior to August 1,
2012, the Trust Agreement shall be discharged by its terms, the Term of this Lease Agreement
shall thereupon end.
Section 4.3. Lease Pavm n (a) Obligation to Pay Subject to the provisions of
Articles VI and X, the Town agrees to pay to the Agency, its successors and assigns, as rental for
the use and occupancy of the Project and the Site hereunder during each Psvxak IIeptoS, the
Lease Payments (denominated into components of principal and interest) for the Project and the
Site in the respective amounts specified in Exhibit A, to be due and payable on the respective Lease
Payment Dates specified in Exhibit A.
Any amount held in the Lease Payment Fund on any Lease Payment Date (other than
amounts resulting from the prepayment of the Lease Payments in part but not in whole pursuant to
Article X and other than amounts required for payment of past due principal or interest represented
by any Certificates not presented for payment) shall be credited towards the Lease Payment then
due and payable; and no Lease Payment need be made on any Lease Payment Date if the amounts
then held in the Lease Payment Fund and available for such purpose are at least equal to the Lease
Payment then required to be paid. The Lease Payments for the Project and the Site payable in any
Rental Period shall be for the use of the Project and the Site during such Rental Period.
(b) Effect of Prepavment In the event that the Town prepays all remaining Lease
Payments, including any premium, if any, in full pursuant to Article X, the Town's obligations
under this Lease Agreement shall thereupon cease and terminate, including but not limited to the
Town's obligation to pay Lease Payments under this Section 4.3; subject however, to the
provisions of Section 10.1 in the case of prepayment by application of a security deposit. In the
event that the Town purchases the Project pursuant to Section 10.2, the amount paid pursuant to
Section 10.2 shall be credited entirely towards the prepayment in full or in part of the Lease
Payments. In the event that the Town prepays the Lease Payments in part but not in whole: (i)
pursuant to Section 10.3 as a result of any insurance award or condemnation award with respect to
the Site and the Project; or (ii) pursuant to Section 10.4 from excess proceeds of the Certificates,
such prepayment shall be credited entirely towards the prepayment of the Lease Payments as
follows: (i) the principal components of the remaining Lease Payments shall be reduced on a pro
rata basis in integral multiples of $5,000; and (ii) the interest component of the remaining Lease
Payments shall be reduced by the aggregate corresponding amount of interest which would
otherwise be payable with respect to the Certificates thereby redeemed pursuant to Section 4.01(c)
of the Trust Agreement.
ME
(c) Fair Rental Value The Lease Payments for the Project for each Rental Period shall
constitute the total rental for the Project during each Rental Period, and shall be paid by the Town
in each Rental Period for and in consideration of the right of the use and occupancy of, and the
continued quiet use and enjoyment of the Project and the Site during each Rental Period. The
parties hereto have agreed and determined that the total Lease Payments for the Project and the Site
do not exceed the fair rental value of the Project and the Site. In making such determination,
consideration has been given to the cost of the Project, the obligations of the parties under this
Lease Agreement, the uses and purposes which may be served by the Project and the benefits
therefrom which will accrue to the Town and the general public.
(d) Budget and A1212rol2riation The Town covenants to take such action as may be
necessary to include all Lease Payments due hereunder in each of its budgets during the Term of
this Lease Agreement and to make the necessary annual appropriations for all such Lease
Payments, except to the extent such Lease Payments are payable from amounts on deposit in the
Lease Payment Fund. During the Term of this Lease Agreement, the Town will furnish to the
Trustee a certificate that the Lease Payments due in the applicable Fiscal Year have been included in
the Town's budget for such Fiscal Year within thirty (30) days after the adoption of each budget,
and in any event, not later than October I in each year. The covenants on the part of the Town
herein contained shall be deemed to be and shall be construed to be duties imposed by law and it
shall be the duty of each and every public official of the Town 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
Town to carry out and perform the covenants and agreements in this Lease Agreement agreed to be
carried out and performed by the Town.
(e) Motor Vehicle License Fees. In accordance with the provisions of section 37351.5 of
the California Government Code, the Town has elected to guarantee payment hereunder from
moneys credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to
which the Town is entitled under Chapter 5 (commencing with section 11001) of Part 5 of Division
2 of the California Revenue and Taxation Code. The Town has provided notice to the State
Controller of such election, which notice includes a schedule of Lease Payments and identifies the
Trustee as the trustee selected by the Town for the purposes of such section. In the event that, for
any reason, the funds otherwise available to the Town will not be sufficient to make Lease
Payments at the time that payment is required, the Town will notify the Trustee which shall, in
accordance with Section 5.05 of the Trust Agreement, immediately communicate that information
to the affected Owners and to the State Controller.
The Town agrees that it will not elect to guarantee payments under any other agreement
from moneys credited to the Motor Vehicle License Fee Account in the Transportation Tax Fund to
which the Town is entitled under Chapter 5 (commencing with section 11001) Part 5 of Division 2
of the California Revenue and Taxation Code unless the moneys credited to the Motor Vehicle
License Fee Account in the Transportation Tax Fund to which the Town is entitled for each of the
preceding five (5) Fiscal Years shall have amounted to at least 2.5 times the sum of the maximum
Lease Payments and the maximum annual debt service coming due and payable with respect to
such other agreement in any future Fiscal Year.
(f) Assignment. The Town understands and agrees that all Lease Payments have been
assigned by the Agency to the Trustee in trust, pursuant to the Assignment Agreement, for the
benefit of the Owners of the Certificates, and the Town hereby assents to such assignment. The
Agency hereby directs the Town, and the Town hereby agrees to pay to the Trustee at its Principal
Corporate Trust Office, all Jayments payable by the Town pursuant to this Section 4.3 and all
amounts payable by the Towipursuant to Article X.
Section 4.4. i t Eniolment, The Agency shall provide the Town with quiet use
and enjoyment of the Project and the Site, and the Town shall, for the remainder of the Term of
In
this Lease Agreement, peaceably and quietly have and hold and enjoy the Project and the Site,
without suit, trouble or hindrance from the Agency, except as expressly set forth in this Lease
Agreement. The Agency will, at the request of the Town and at the Town's cost, join in any legal
action in which the Town asserts its right to such possession and enjoyment to the extent the
Agency may lawfully do so. Notwithstanding the foregoing, the Agency shall have the right to
inspect the Project and the Site as provided in Section 7.2.
Section 4.5. Title. Title to the Project shall be in the Agency, and during the term of
this Lease Agreement, the Agency shall hold title to the Project and any and all additions which
comprise fixtures, repairs, replacements or modifications to the Project or the Site, including those
fixtures, repairs, replacements or modifications which are added to the Project or the Site by the
Town at its own expense and which may be removed without damaging the Project and including
any items added to the Project or the Site by the Town pursuant to Section 5.9 hereof.
If the Town prepays the Lease Payments in full pursuant to Article X or makes the security
deposit permitted by Section 10.1, or pays all Lease Payments during the Term of this Lease
Agreement as the same become due and payable, all right, title and interest of the Agency under the
Site Lease in and to the Project (determined in accordance with Sections 3.01 or 3.04 thereof) shall
be transferred to and vested in the Town. The Agency agrees to take any and all steps and execute
and record any and all documents reasonably required by the Town to consummate any such
transfer.
Section 4.6. Additional payments. In addition to the Lease Payments, the Town
shall pay when due all costs and expenses incurred by the Agency to comply with the provisions of
the Trust Agreement, including without limitation all Costs of Issuance (to the extent not paid from
amounts on deposit in the Costs of Issuance Fund), compensation and expenses due to the Trustee
and all reasonable costs and expenses of attorneys, auditors, engineers and accountants.
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ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.1. Maintenance. iJtilities T ^xec and AccPCCmPntc Throughout the
Term of this Lease Agreement, as part of the consideration for the rental of the Project and the Site,
all improvement, repair and maintenance of the Project and the Site shall be the responsibility of the
Town, and the Town shall pay for or otherwise arrange for the payment of all utility services
supplied to the Project and the Site, 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 Project and
the Site resulting from ordinary wear and tear or want of care on the part of the Town or any
assignee or lessee thereof. In exchange for the Lease Payments herein provided, the Agency
agrees to provide only the Project and the Site, as hereinbefore more specifically set forth. The
Town waives the benefits of subsections I and 2 of Section 1942 of the California Civil Code, and
waives the right to make repairs at the expense of the Agency or in lieu thereof, vacate under
Section 1942 of the California Civil Code, and all similar rights under the statues of similar effect,
but such waiver shall not limit any of the rights of the Town under the terms of this Lease
Agreement.
The Town shall also pay or cause to be paid all taxes and assessments of any type or
nature, if any, charged to the Agency or the Town affecting the Project and the Site or the 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 Town shall be obligated to pay
only such installments as are required to be paid during the Term of this Lease Agreement as and
when the same become due.
The Town may, at the Town'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 Agency shall notify the Town that, in the opinion of
Independent Counsel, by nonpayment of any such items, the interest of the Agency in the Project
and the Site will be materially endangered or the Project or any part thereof will be subject to loss
or forfeiture, in which event the Town shall promptly pay such taxes, assessments or charges or
provide the Agency and the Trustee with full security against any loss which may result from
nonpayment, in form satisfactory to the Agency.
Section 5.2. Modification of Projg�ct, The Town shall, at its own expense, have
the right to remodel the Project and the Site or to make additions, modifications and improvements
to the Project and the Site. All additions, modifications and improvements shall thereafter
comprise part of the Project and Site and be subject to the provisions of this Lease Agreement.
Such additions, modifications and improvements shall not in any way damage the Project or cause
it to be used for purposes other than those authorized under the provisions of state and federal law;
and the Project and Site, upon completion of any additions, modifications and improvements made
thereto pursuant to this Section, shall be of a value which is not substantially less than the value of
the Project and Site immediately prior to the making of such additions, modifications and
improvements. The Town will not permit any mechanic's or other lien to be established or remain
against the Project or the Site for labor or materials furnished in connection with any remodeling,
additions, modifications, improvements, repairs, renewals or replacements made by the Town
pursuant to this Section; provided that if any such lien is established and the Town shall first notify
or cause to be notified the Agency of the Town's intention to do so, the Town may in good faith
contest any lien filed or established against the Project or the Site, and in such event may permit the
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items so contested to remain undischarged and unsatisfied during the period of such contest and
any appeal therefrom and shall provide the Agency with full security against any loss or forfeiture
which might arise from the nonpayment of any such item, in form satisfactory to the Agency. The
Agency will cooperate fully in any such contest, upon the request and at the expense of the Town.
Section 5.3. Public Liability and Property Damage Inc �rancP The Town
shall maintain or cause to be maintained, throughout the Tenn of this Lease Agreement, a standard
comprehensive general insurance policy or policies in protection of the Agency, Town, Trustee and
their respective members, officers, agents and employees. 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
Project. Said policy or policies shall provide coverage in the minimum liability limits of
$1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or
deaths of two or more persons in each accident or event, and in a minimum amount of $150,000
(subject to a deductible clause of not to exceed $250,000 for damage to property resulting from
each accident or event. Such public liability and property damage insurance may, however, be in
the form of a single limit policy in the amount of $3,000,000 per occurrence covering all such
risks. Such liability insurance may be maintained as part of or in conjunction with any other
liability insurance coverage carried by the Town, and may be maintained in whole or in part in the
form of self - insurance by the Town; provided, that if the Town self - insures for the risks set forth
in this Section, the Town shall provide the Trustee, on an annual basis, with a certificate of an
independent insurance consultant or the Town's risk manager that the Town's reserves for such
self- insurance program are adequate, or, alternatively, if such reserves are not adequate, a
certification from the Town that third party insurance against such risks will be obtained or
reserves will be funded at adequate levels. The proceeds of such liability insurance shall be applied
toward extinguishment or satisfaction of the liability with respect to which the proceeds of such
insurance shall have been paid.
Section 5.4. Fire and Extended (overage Inc gran e The Town shall procure
and maintain, or cause to be procured and maintained, throughout the remainder of the Term of this
Lease Agreement, insurance against loss or damage to any structures constituting any part of a
Project by flood, earthquake, fire and lightning, with extended coverage and vandalism and
malicious mischief insurance. Said extended coverage insurance shall, as nearly as practicable,
cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke 2nd such
other hazards as are normally covered by such insurance. Such insurance shall be in an amount
equal to one hundred percent (100 %) of the replacement cost of the Project or Outstanding
Certificates of Participation, whichever is less. Such insurance may be subject to deductible
clauses of not to exceed $300,000 for any one loss. Such insurance may be maintained as pan of
or in conjunction with any other fire and extended coverage carried by the Town and may be
maintained in whole or in part in the form of self - insurance by the Town; provided, that if the
Town self - insures for the risks set forth in this Section, the Town shall provide the Trustee, on an
annual basis, with a certificate of an independent insurance consultant or the Town's risk manager
that the Town's reserves for such self - insurance program are adequate, or, alternatively, if such
reserves are not adequate, a certification from the Town that third party insurance against such
risks will be obtained or reserves will be funded at adequate levels. The Town hereby assigns to
the Agency all right of the Town to collect and receive Net Proceeds under any of said policies,
which right has been assigned by the Agency to the Trustee pursuant to the Assignment
Agreement. The Net Proceeds of such insurance shall be applied as provided in Section 6.2(a).
Section 5.5. Rental Interruption Inc .ran The Town shall procure, and
maintain through the remainder of the Term of this Lease Agreement, rental interruption or use and
occupancy insurance to cover loss, total or partial, of the use of any structures constituting any part
of the Project during the remainder of the Term of this Lease Agreement as a result of any of the
hazards covered in the insurance required by Section 5.4 hereof and which causes abatement of the
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Lease
applicable cable Fiiscal Year. The Town hereby assigns gnsato the Age cy all rights of he Town to
collect and receive Net Proceeds under any of said policies, which right has been assigned by the
Agency to the Trustee pursuant to the Assignment Agreement. The Net Proceeds of such
insurance shall be paid to the Trustee and deposited in the Lease Payment Fund and shall be
credited towards the payment of the Lease Payments in the order in which such Lease Payments
come due and payable.
The Town shall be permitted to self - insure for rental interruption or use and occupancy
insurance required above, so long as:
(1) the Town segregates a designated reserve for such loss; and
(2) the Town's liability under such self - insurance program is limited to amounts on
hand in such segregated reserve; and
(3) the combined coverage under such self - insurance program and any other rental
interruption or use and occupancy insurance are equal to Lease Payments due in the then
applicable Fiscal Year; and
(4) the amount on hand in such segregated reserve will not, in the opinion of Bond
Counsel, cause the Lease Agreement to become an "arbitrage bond" within the meaning of
Section 148(a) of the Code.
Section 5.6. Title Insurance, The Town shall cause to be delivered on the Closing
Date a CLTA title insurance policy with respect to the Site and the Project, in a principal amount at
least equal to the principal amount of the Lease Agreement, insuring the Town's leasehold interest
in the Site and the Project.
Section 5.7. Insurance Net Proceedc Form of PnliriP Each policy of
insurance required by Sections 5.4 and 5.5 hereof shall provide that all proceeds thereunder shall
be payable to the Trustee as and to the extent required hereunder. All policies of insurance required
by this Lease Agreement and any statements of self - insurance shall be in form satisfactory to the
Agency. The Town shall pay or cause to be paid when due the premiums for all insurance policies
required by this Lease Agreement. All such policies shall provide that the Trustee shall be given
thirty (30) days' notice of each expiration, any intended cancellation thereof or reduction of the
coverage provided thereby. The Trustee shall not be responsible for the sufficiency of any
insurance herein required and shall be fully protected in accepting payment on account of such
insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee. The
Town shall cause to be delivered to the Trustee annually, within 30 days of the end of the Fiscal
Year, a certificate stating that the insurance policies required by this Lease Agreement are in full
force and effect.
Section 5.8. Advances. If the Town shall fail to perform any of its obligations under
this Article the Agency may, but shall not be obligated to, take such action as may be necessary to
cure such failure, including the advancement of money, and the Town shall be obligated to repay
all such advances as soon as possible, with interest at the rate of ten percent (10 %) per annum from
the date of the advance to the date of repayment.
Section 5.9. installation of Town'c F� �inmPnt The Town 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 Project and the Site. All such items
shall remain the sole property of the Town, in which neither the Agency nor the Trustee shall have
any interest, and may be modified or removed by the Town at any time provided that the Town
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shall repair and restore any and all damage to the Project resulting from the installation,
modification or removal of any such items. Nothing in this Lease Agreement shall prevent the
Town from purchasing or leasing items to be installed pursuant to this Section under a 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 shall
attach to any part of the Project or the Site.
Section 5.10. Liens The Town shall 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 Project or the Site, other than the respective rights of the Agency and the Town as herein
provided and Permitted Encumbrances. Except as expressly provided in this Article, the Town
shall promptly, at its own expense, take such action as may be necessary to duly discharge or
remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is
responsible, if the same shall arise at any time. The Town shall reimburse the Agency for any
expense incurred by it in order to discharge or remove any such mortgage, pledge, lien, charge,
encumbrance or claim.
Section 5.11. Compliance With Site Ike During the term of the Site Lease, the
Town will observe and perform all agreements and obligations on its behalf required to be
observed and performed thereunder. The Town will not take any action or permit any action
within its control to be taken which constitutes or which, if not corrected, with the passage of time
or with notice, or both, would constitute or cause to occur any default under the Site Lease.
Section 5.12. Removal of Proo rtv from i Paae The Town shall have, and is
hereby granted the option at any time and from time to time during the Term of this Lease to
remove from this Lease any land and all improvements, facilities and property situated thereon;
provided that the Town shall satisfy all of the following requirements which are hereby declared to
be conditions precedent to such removal:
(1) No event of default has occurred and is continuing under the Lease;
(2) The Town shall file with the Agency and the Trustee an amended Exhibit B to
this Lease Agreement which deletes the legal description of such land;
(3) The Town shall cause to be recorded in the Office of the Santa Clara County
Recorder a copy of this Lease Agreement containing such amended Exhibit B, or a
memorandum of this Lease Agreement reflecting such amendment to Exhibit B; and
(4) The Town shall cause to be filed with the Trustee an opinion of Bond Counsel
substantially to the effect that such removal will not affect the obligation of the Town to
continue to pay Lease Payments in the amounts and at the times and in the manner required
by the Lease Agreement; and
(5) The Town shall file with the Agency and the Trustee an appraisal by a qualified
appraiser selected by the Town in its sole discretion, stating that the appraised value of the
Project, excluding such land and any improvements thereon, at least equals the original
aggregate principal amount of the Certificates.
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ARTICLE VI
DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET PROCEEDS
Section 6.1. Eminent Domain If the Project and the Site shall be 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 Agreement shall cease as of the day possession shall be so
taken. If less than all of the Project and Site shall be taken permanently, or if the Project or the Site
or any part thereof shall be taken temporarily, under the power of eminent domain, (1) this Lease
Agreement shall continue in full force and effect and shall not be terminated by virtue of such
taking and the parties waive the benefit of any law to the contrary, and (2) there shall be a partial
abatement of Lease Payments as a result of the application of the Net Proceeds of any eminent
domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon
by the Town and the Agency such that the resulting Lease Payments represent fair consideration
for the use and occupancy of the remaining usable portion of the Project and the Site. The Town
covenants to contest any eminent domain award which is insufficient to either : (i) redeem the
Certificates in whole, if all of the Project and Site are condemned; or (ii) redeem a pro rata share of
Certificates, in the event that less than all of the Project and Site are condemned.
Section 6.2. Anolication of N t Proceeds. (a) From Insurance Award The Net
Proceeds of any insurance award resulting from any damage to or destruction of any Project by fire
or other casualty shall be paid to the Trustee, as assignee of the Agency under the Assignment
Agreement, and deposited in the Insurance and Condemnation Fund for application as set forth in
Section 6.01 of the Trust Agreement.
(b) From Eminent Domain Award The Net Proceeds of any eminent domain award
resulting from any event described in Section 6.1 hereof shall be paid to the Trustee, as assignee of
the Agency under the Assignment Agreement, and deposited in the Insurance and Condemnation
Fund for application as set forth in Section 6.02 of the Trust Agreement.
Section 6.3. Abatement of Rental in h Fv nt of Damage or DectrnrHnn
The amount of Lease Payments shall be abated, during any period in which by reason of damage
or destruction (other than by eminent domain which is hereinbefore provided for) there is
substantial interference with the use and occupancy by the Town of the Project (other than any
portions of the Project described in Section 5.2) or the Site or any portion thereof. The amount of
such abatement shall be agreed upon by the Town and the Agency such that the resulting Lease
Payments represent fair consideration for the use and occupancy of the portions of the Project and
the Site not damaged or destroyed. Such abatement shall continue for the period commencing with
such damage or destruction and ending with the substantial completion of the work of repair or
reconstruction. In the event of any such damage or destruction, this Lease Agreement shall
continue in full force and effect and the Town waives any right to terminate this Lease Agreement
by virtue of any such damage and destruction. However, notwithstanding any other provisions of
this Section 6.3, there shall be no abatement of Lease Payments under this Section 6.3 to the extent
that the proceeds of an eminent domain or insurance award, including self - insurance as set forth in
Section 5.5 of this Lease Agreement, are available to pay Lease Payments or to the extent that
moneys are available in the Lease Payment Fund or the Reserve Fund, it being hereby declared that
such proceeds and amounts constitute special funds for the payment of the Lease Payments.
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ARTICLE VII
DISCLAIMER OF WARRANTIES; ACCESS
Section 7.1. rranti
Disclaimer of Wae The Agency makes no warranty or
representation, either express or implied, as to the value, design, condition, merchantibility or
fitness for any particular purpose or fitness for the use contemplated by the Town of the Project or
the Site, or any other representation or warranty with respect to the Project or the Site. In no event
shall the Agency be liable for incidental, indirect, special or consequential damages, in connection
with or arising out of this Lease Agreement, the Site Lease or the Trust Agreement for the
existence, furnishing, functioning or Town's use of the Project or the Site.
Section 7.2. Acce�x to the Cit ^nd the Proip �( The Town agrees that the
Agency and any Agency Representative, and the Agency's successors or assigns, shall have the
right at all reasonable times to enter upon and to examine and inspect the Project and the Site. The
Town further agrees that the Agency, any Agency Representative, and the Agency's successors or
assigns shall have such rights of access to the Project and the Site as may be reasonably necessary
to cause the proper maintenance of the Project and the Site in the event of failure by the Town to
perform its obligations hereunder.
Section 7.3. Release and Indemnifi ation Cov nantc The Town shall and
hereby agrees to indemnify and save the Agency and its officers, agents, successors and assigns
harmless from and against all claims, losses and damages, including legal fees and expenses,
arising out of (i) the use, maintenance, condition or management of, or from any work or thing
done on the Project or the Site by the Town, (ii) any breach or default on the part of the Town in
the performance of any of its obligations under this Lease Agreement, (iii) any act or negligence of
the Town or of any of its agents, contractors, servants, employees or licensees with respect to the
Project or the Site, or (iv) any act or negligence of any lessee of the Town with respect to the
Project. No indemnification is made under this Section or elsewhere in this Lease Agreement for
willful misconduct, negligence, or breach of duty under this Lease Agreement by the Agency, its
officers, agents, employees, successors or assigns.
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ARTICLE VIII
ASSIGNMENT, LEASING AND AMENDMENT
Section 8.1. Acgnment by the Agency" The Agency's rights under this Lease
Agreement, including the nght to receive and enforce payment of the Lease Payments to be made
by the Town under this Lease Agreement have been assigned to the Trustee pursuant to the
Assignment Agreement, to which assignment the Town hereby consents.
Section 8.2. Assignment and I acing by the Toy�n This Lease Agreement may
not be assigned by the Town. The Town may further lease any of the Project and the Site or any
portion thereof, but only with the written consent of the Agency and subject to all of the following
conditions:
(i) This Lease Agreement and the obligation of the Town to make Lease Payments
hereunder shall remain obligations of the Town; and
(ii) The Town shall, within thirty (30) days after the delivery thereof, furnish of
cause to be furnished to the Agency and the Trustee a true and complete copy of such lease;
and
(iii) No such lease by the Town shall cause the Project or the Site to be used for a
purpose other than as may be authorized under the provisions of the Constitution and laws
of the State; and
(iv) The Town shall furnish the Agency and the Trustee with a written opinion of
Bond Counsel, stating that such lease does not cause the interest components of the Lease
Payments to become subject to federal or State personal income taxes.
(v) The Trustee shall receive a favorable opinion from counsel to the Town on
items (i), (iii) and (iv) above.
Section 8.3. Amendment of I acP Agre m n (a) Amendment for Additional
in ncin . This Lease may be amended by the parties hereto at any time during the Temt of this
Lease, without the prior written consent of the Trustee or the Owners of the Certificates, for the
purpose of providing for the acquisition, construction or improvement of additional improvements
to the Site or to finance other capital projects for the Town; provided, however, that (1) no Event
of Default shall have occurred and be continuing, (2) an executed copy of any such amendment
shall be filed with the Trustee promptly following the execution and delivery thereof by the Town
and the Agency, and (3) additional certificates of participation meeting the requirements of Section
2.12 of the Trust Agreement shall be executed and delivered evidencing the proportionate interests
of the owners thereof in such additional Lease Payments, pursuant to an amendment to the trust
Agreement or a new agreement an executed copy of which shall be filed with the Trustee promptly
following the execution and delivery thereof by the parties thereto.
(b) Qgnerally. Except as provided in subsection (a) of this Section, without the prior
written consent of the Trustee, the Town will not alter, modify or cancel, or agree or consent to
alter, modify or cancel this Lease Agreement, excepting only such alteration or modification as may
be permitted by Section 5.12 hereof or Article IX of the Trust Agreement.
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ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
default" under this Lease Section 9.1. Events of �n r a The following shall be "events of
whenever they are used n tthis Lease Agreement with respect to the Project, anyuone or more of
the following events:
(i) Failure by the Town to pay any Lease Payment when due and payable
hereunder, or failure to pay any other payment when due and payable hereunder.
(ii) Failure by the Town to observe and perform any covenant, condition or
agreement on its part to be observed or performed, other than as referred to in clause (i) or
clause (iii) of this Section, for a period of thirty (30) days after written notice specifying
such failure and requesting that it be remedied has been given to the Town by the Agency,
the Trustee or the Owners of not less than five percent (5 %) in aggregate principal amount
of Certificates then outstanding; provided, however, if the failure stated in the notice can be
corrected, but not within the applicable period, the Agency, the Trustee and such Owners
shall not unreasonably withhold their consent to an extension of such time if corrective
action is instituted by the Town within the applicable period and diligently pursued until the
default is corrected.
(iii) The filing by the Town of a voluntary petition in bankruptcy under Title 11 of
the United States Code or any substitute or successor statute.
Section 9.2. Remedies nn D fa alt Whenever any event of default referred to in
Section 9.1 hereof shall have happened and be continuing, it shall be lawful for the Agency to
exercise any and all remedies available pursuant to law or granted pursuant to this Lease
Agreement; provided, however, that notwithstanding anything herein or in the Trust Agreement to
the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or
otherwise declare any Lease Payments not then in default to be immediately due and payable, each
and every covenant hereof to be kept and performed by the Town is expressly made a condition
and upon the breach thereof the Agency may exercise any and all rights of entry and re -entry upon
the Project and the Site, and also, at its option, with or without such entry, may terminate this
Lease Agreement; provided, that no such termination shall be effected either by operation of law or
acts of the parties hereto, except only in the manner herein expressly provided. In the event of
such default and notwithstanding any re -entry by the Agency, the Town shall, as herein expressly
provided, continue to remain liable for the payment of the Lease Payments and /or damages for
breach of this Lease Agreement and the performance of all conditions herein contained and, in any
event such rent and /or damages shall be payable to the Agency at the time and in the manner as
herein provided, to wit:
(a) In the event the Agency does not elect to terminate this Lease Agreement in the
manner hereinafter provided for in subparagraph (b) hereof, the Town agrees to and shall
remain liable for the payment of all Lease Payments and the performance of all conditions
herein contained and shall reimburse the Agency for any deficiency arising out of the re-
leasing of the Project and the Site, or, in the event the Agency does not re -lease the Project
and the Site, then for the full amount of all Lease Payments to the end of the Term of this
Lease Agreement, 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 Lease
Payments hereunder, notwithstanding such entry or re -entry by the Agency or any suit in
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re e try or obtaining Possession of he Project nd the Site or the exercoisefof any effecting
remedy by the Agency. The Town hereby irrevocably appoints the Agency as the agent
and attorney -in -fact of the Town to enter upon and re -lease the Project and the Site in the
event of default by the Town in the performance of any covenants herein contained to be
performed by the Town and to remove all personal property whatsoever situated upon the
Project and the Site to place such property in storage or other suitable place in the County
of Santa Clara, for the account of and at the expense of the Town, and the Town hereby
exempts and agrees to save harmless the Agency from any costs, loss or damage
whatsoever arising or occasioned by any such entry upon and re- leasing of the Project and
the Site and the removal and storage of such property by the Agency or its duly authorized
agents in accordance with the provisions herein contained. The Town hereby waives any
and all claims for damages caused or which may be caused by the Agency in re- entering
and taking possession of the Project and the Site as herein provided and all claims for
damages that may result from the destruction of or injury to the Site or the Project and all
claims for damages to or loss of any property belonging to the Town that may be in or
upon the Project and the Site. The Town agrees that the terms of this Lease Agreement
constitute full and sufficient notice of the right of the Agency to re -lease the Project and the
Site in the event of such re -entry without effecting a surrender of this Lease Agreement,
and further agrees that no acts of the Agency in effecting such re- leasing shall constitute a
surrender or termination of this Lease Agreement 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 Town the right to terminate this Lease
Agreement shall vest in the Agency to be effected in the sole and exclusive manner
hereinafter provided for in subparagraph (b) hereof. The Town further waives the right to
any rental obtained by the Agency in excess of the Lease Payments and hereby conveys and
releases such excess to the Agency as compensation to the Agency for its services in re-
leasing the Project and the Site.
(b) In the event of the termination of this Lease Agreement by the Agency in the
manner hereinafter provided on account of default by the Town (and notwithstanding any
re -entry upon the Project or the Site by the Agency in any manner whatsoever or the re-
leasing or sale of the Project or the Site), the Town nevertheless agrees to pay to the
Agency all costs, loss or damages howsoever arising or occurring payable at the same time
and in the same manner as is herein provided in the case of payment of Lease Payments.
Any surplus received by the Agency from such re- leasing shall be the absolute property of
the Agency and the Town shall have no right thereto, nor shall the Town be entitled to any
credit in the event of a deficiency in the rentals received by the Agency from the Project
and/or the Site. Neither notice to pay rent or to deliver up possession of the premises given
pursuant to law nor any proceeding in unlawful detainer taken by the Agency shall of itself
operate to terminate this Lease Agreement, and no termination of this Lease Agreement on
account of default by the Town shall be or become effective by operation of law, or
otherwise, unless and until the Agency shall have given written notice to the Town of the
election on the part of the Agency to terminate this Lease Agreement. The Town covenants
and agrees that no surrender of the Project and /or the Site or of the remainder of the Tenn
hereof or any ternination of this Lease Agreement shall be valid in any manner or for any
purpose whatsoever unless stated or accepted by the Agency by such written notice.
Section 9.3. Nn Remedv F.xrl usiv No remedy herein conferred upon or reserved
to the Agency is intended to be, exclusive and every such remedy shall be cumulative and shall be in
addition to every other reme4 given under this Lease Agreement or now or hereafter existing at
law or in equity. No delay ot$ omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver thereof, but any such
right and power may be exercised from time to time and as often as may be deemed expedient. In
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order to entitle the Agency to exercise any remedy reserved to it in this Article it shall not be
necessary to give any notice, other than such notice as may be required in this Article or by law.
Section 9.4. Agreement to Pav Attorn vc' F and x nc In the event
either party to this Lease Agreement should default under any of the provisions hereof and the
nondefaulting party should employ attorneys 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 and such other expenses so incurred
by the nondefaulting party.
Section 9.5. No Additional Waiver Imn11 d by nn_e Waiver In the event any
agreement contained in this Lease Agreement should be breached by either party and thereafter
waived by the other party, such waiver shall be limited to the particular breach so waived and shall
not be deemed to waive any other breach hereunder.
Section 9.6. Anolication oP Pro Pdc All net proceeds received from the re -lease
or other disposition of the Project and the Site under this Article IX, and all other amounts derived
by the Agency or the Trustee as a result of an event of default hereunder, shall be subject to Section
12.03 of the Trust Agreement and transferred to the Trustee promptly upon receipt thereof after
payment of any fees and expenses of the Trustee, including without limitation those of its counsel,
and shall be deposited by the Trustee in the Lease Payment Fund to be applied to the Lease
Payments in order of payment date.
Section 9.7. Trustee and (ertifi at nwn rc to Yercice Rig
and remedies as are given to the Agency under this Article IX have been assigned
the Trustee under the Trust Agreement, to which assignment the Town hereby
rights and remedies shall be exercised by the Trustee and the Owners of the
provided in the Trust Agreement.
-20-
1jt. Such rights
by the Agency to
consents. Such
Certificates as
ARTfCLE X
PREPAYMENT OF LEASE PAYMENTS
Section 10.1. 5&guray_DtP9, it Notwithstanding any other provision of this Lease
Agreement, the Town may on any date secure the payment of Lease Payments by a deposit with
the Trustee of: (i) an amount of cash which, together with amounts on deposit in the Lease
Payment Fund, the Insurance and Condemnation Fund and the Reserve Fund, is sufficient to pay
all unpaid Lease Payments, including the principal and interest components thereof, in accordance
with the Lease Payment Schedule set forth in Exhibit A, or (ii) Defeasance Securities together with
cash, if required, in such amount as will, in the opinion of an independent certified public
accountant, together with interest to accrue thereon and, if required, all or a portion of moneys or
Defeasance Securities then on deposit in the Lease Payment Fund, the Insurance and
Condemnation Fund and the Reserve Fund, be fully sufficient to pay all unpaid Lease Payments on
their respective Lease Payment dates or on any purchase option date as set forth in Section 10.2, as
the Town shall instruct at the time of said deposit. In the event of a security deposit pursuant to
this Section, all obligations of the Town under this Lease Agreement, and all security provided by
this Lease Agreement for said obligations, shall cease and terminate, excepting only the obligation
of the Town to make, or cause to be made, Lease Payments from such security deposit, and the
obligation to make any additional payments pursuant to Section 4.6 herein, and title to the Project
and the Site shall be affected thereby as described in Section 4.5. 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 Agreement.
Section 10.2. 3 ent Purcha a nnr•nn The Town may exercise its option
to prepay the principal component of the Lease Payments, in whole or in part, on any Lease
Payment Date on or after August 1, 2002, by paying a prepayment price equal to the aggregate or a
portion of the unpaid principal components of the remaining Lease Payments, together with the
interest component of the Lease Payment required to be paid on such date, and premium due, if
any. Such prepayment price shall be transferred by the Town to the Trustee for deposit in the
Lease Payment Fund to be applied to the redemption of Certificates pursuant to Section 4.01(a) of
the Trust Agreement. The Town shall give the Trustee notice of its intention to exercise its option
not less than forty-five (45) days in advance of the date of exercise. In the event the Town prepays
the entire unpaid principal component of the Lease Payments in whole, the Town will be deemed to
have purchased the Project and title to the Project shall thereupon vest in the Town, free and clear
of any encumbrance created by this Agreement.
Section 10.3. Malldatory Pr Daum nt in Event of lncurP (acnatry or
Eminent Domain. The Town shall be obligated to prepay the Lease Payments for the Project
and the Site, in whole or in part on any date, from and to the extent of any Net Proceeds of
insurance award or condemnation award with respect to the Project and the Site theretofore
deposited in the Lease Payment Fund for such purpose pursuant to Article VI hereof.
Section 10.4. Optional Preoavm nt fr_ om FxsPCa proceP�7c of ( rt�f�ratrc
The Town shall have the option to prepay the principal component of the Lease Payments, in
whole or in part, on the first Lease Payment Date occurring after the Completion Date, from excess
proceeds of the Certificates remaining in the Construction Fund.
Section 10.5. (lredit for Amo mtc nn D Rests In the event of prepayment of the
principal components of the Lease Payments in full under this Article X, such that the Trust
Agreement shall be discharged by its terms as a result of such prepayment, all amounts then on
-21-
deposit in the Lease Payment Fund and the Reserve Fund shall be credited towards the amounts
then required to be so prepaid.
-22-
ARTICLE XI
MISCELLANEOUS
shall
Section 11.1. Notkc All notices, certificates or other communications hereunder
be sufficiently given and shall be deemed to have been received 48 hours after deposit in the
United States mail in registered or certified form with postage fully prepaid:
If to the Town: Town of Los Gatos
110 E. Main Street
Los Gatos, California 95032
If to the Agency: Los Gatos Redevelopment Agency
110 E. Main Street
Los Gatos, California 95032
If to the Trustee: Bank of America National Trust and Savings
Association
One Embarcadero Center, 20th Floor
San Francisco, California 94111
Attention: Corporate Trust Division, N5 -145
The Agency and the Town, by notice given hereunder, may designate different addresses to
which subsequent notices, certificates or other communications will be sent.
Section 11.2. Binding F� This Lease Agreement shall inure to the benefit of
and shall be binding upon the Agency and the Town and their respective successors and assigns.
Section 11.3. Sev_ er ability. In the event any provision of this Lease Agreement shall
be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 11.4. Net -net -n t a e This Lease Agreement shall be deemed and
construed to be a "net- net -net lease" and the Town hereby agrees that the Lease Payments shall be
an absolute net return to the Agency, free and clear of any expenses, charges or set -offs
whatsoever.
Section 11.5. Further A c �rancec and Corre�ti� Incfrnmo�
The Aenc
and the Town agree that they will, from time to time, execute, acknowledge and deliver, orc ause
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 Site or the Project hereby leased or intended so to be or for carrying out the expressed intention
of this Lease Agreement.
Section 11.6. Exec �tion in (o mterpa_rt�, This Lease Agreement may be executed
in several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument.
Section 11.7. Aoolicabl I.aw This Lease Agreement shall be governed by and
construed in accordance with the laws of the State.
-23-
Section 11.8, Aeencv and Tnwn Ra + +' Whenever under the
provisions of this Lease Agreement the approval of the Agency or the Town is required, or the
Agency or the Town is required to take some action at the request of the other, such approval or
such request shall be given for the Agency by an Agency Representative and for the Town by a
Town Representative, and any party hereto shall be authorized to rely upon any such approval or
request.
Section 11.9. Caution,,. The captions or headings in this Lease Agreement are for
convenience only and in no way define, limit or describe the scope or intent of any provisions or
Section of this Lease Agreement.
-24-
IN WITNESS WHEREOF, the Agency has caused this Lease Agreement to be executed in
its corporate name by its duly authorized officers and sealed with its corporate seal; and the Town
has caused this Lease Agreement to be executed in its name by its duly authorized officers and
sealed with its corporate seal, as of the date first above written.
Attest:
(SEAL)
Attest:
Secretary
Town Clerk
-25-
LOS GATOS REDEVELOPMENT AGENCY,
as Lessor
Executive Director
TOWN OF LOS GATOS, as Lessee
Town Manager
STATE OF CALIFORNIA - )
) ss.
COUNTY OF SANTA CLARA )
On this day of , in the year 1992, before me, the
undersigned, a Notary Public in and for said State, personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons
who executed the within instrument as Executive Director and Secretary, respectively, of the Los
Gatos Redevelopment Agency, the agency therein named, and acknowledged to me that such
agency executed the same pursuant to a resolution of its members. .
WITNESS my hand and official seal.
-1-
Notary Public in and for said State
My commission expires:
(S E A L)
EXHIBIT A
SCHEDULE
OF LEASE
PAYMENTS FOR
PROJECT
Lease Payment
Principal
Interest
Total Lease
Pate
CQml2onen
Comnone
m n
A -1
EXHIBIT B
DESCRIPTION OF SITE
10
a
EXHIBIT C
DESCRIPTION OF PROJECT
C -1
22030 -03 1HIrw 1"J :brf t` "" -
2/9?
PaGR.:d -1 a.� 7ro96:9>
7/S 92
_ R=te f ��
REIMBURSEMENT AGREEMENT
by and between
LOS GATOS REDEVELOPMENT AGENCY
and the
TOWN OF LOS GATOS, CALIFORNIA
Dated as of August 1, 1992
(Parking Lot #4 Project)
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT, dated as of August 1, 1992, by and between
the Los Gatos Redevelopment Agency (the "Agency ") and the Town of Los Gatos (the "Town ");
WITNESSETH:
WHEREAS, the Agency is a duly constituted redevelopment agency under the laws of the
State of California and pursuant to such laws has duly proceeded with the redevelopment of the
Central Los Gatos Redevelopment Agency Project Area (the "Project Area ") within the Town; and
WHEREAS, the redevelopment plan for said Project Area provides for tax increment
financing in accordance with the provisions of Chapter 6, Part 1 of Division 24 of the Health and
Safety Code of the State of California and Section 16 of Article XVI of the Constitution of the State
of California; and
WHEREAS, the Agency is authorized, with the consent of the Town Council of the
Town, to pay all or part of the value of the land for and the cost of the installation and construction
of any building, facility, structure or other improvements which are publicly owned within the
Project Area, upon a determination by the Agency and said Town Council that such buildings,
facilities, structures or other improvements are of benefit to said Project Area; and
WHEREAS, when the value of such land or the cost of the installation and construction
or such building, facility, structure or other improvement, or both, has been or will be paid or
provided for initially by the Town, the Agency may enter into a contract with the Town under
which it agrees to reimburse the Town for all or part of the value of such land or all or part of the
cost of such building, facility, structure or other improvement, or both, by periodic payments over
a period of years; and
s
WHEREAS, the obligation of the Agency under such contract shall constitute an
indebtedness of the Agency for the purpose of carrying out the redevelopment project for such
Project Area, which indebtedness may be made payable out of taxes levied in such Project Area
and allocated to the Agency under subdivision (b) of Section 33670 of the Health and Safety Code
of the State of California, or out of any other available funds; and
WHEREAS, the Town and the Agency wish to complete the construction of Parking Lot
#4, together with related and appurtenant facilities (the 'Project ") which will be of substantial
benefit to the Project Area; and
WHEREAS, the parties hereto, in consideration of their mutual undertakings, past and
present, herein and otherwise, desire to provide for repayment for the Town of all or a portion of
the moneys paid as Lease Payments under the Lease Agreement, entered into between the Town
and the Agency providing for the lease by the Town of the Project from the Agency;
NOW, THEREFORE, in consideration of the mutual covenants herein contained it is
agreed by and between the parties hereto, as follows:
Section 1. Definitions. Unless the context otherwise requires, the terms defined in
this Section 1 shall, for all purposes of this Reimbursement Agreement and of any amendment
hereto, and of any certificate, opinion, estimate or other document herein mentioned, have the
meanings herein specified. Any capitalized term not defined herein shall have the meaning given to
such term in the Lease Agreement.
"Agency" means the Los Gatos Redevelopment Agency, a redevelopment agency and
public body, corporate and politic, duly organized and existing under and by virtue of the laws of
the State of California.
"Law" means the Community Redevelopment Law of the State of California, constituting
Part 1 of Division 24 of the Health and Safety Code of the State of California and the acts
amendatory thereof and in supplement thereto. Whenever reference is made in this Reimbursement
Agreement to the Law, reference is made to the Law as in force on the date of the execution of this
Reimbursement Agreement, unless the context otherwise requires.
"Lease Payments" means all amounts paid or to be paid by the Town as lease payments
pursuant to Section 4.3 of the Lease Agreement.
"Lease Agreement" means that certain lease entitled "Lease Agreement" by and between
the Agency as lessor and the Town as lessee of the Project, dated as of August 1, 1992.
"Net Tax Increment Revenues" means all taxes allocated to, and paid into a special
fund of the Agency for the Project Area pursuant to Article 6 of Chapter 6 of the Law and Section
16 of Article XVI of the Constitution of the State of California, and as provided in the
redevelopment plan for the Project Area, including all payments and reimbursements, if any, to the
Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate
limitations, but excluding (i) any amounts required to be used to improve the community's supply
of low or moderate income housing pursuant to Section 33334.2 of the Law (or any successor or
related Section of the Law); and (ii) amounts required to be paid to other taxing agencies under
contracts entered in pursuant to Section 33401 of the Law and dated prior to August 1, 1992.
"Project" means Parking Lot #4 and related and appurtenant facilities, as described in
Exhibit B to the Lease Agreement, determined to be of substantial benefit to the Project Area.
"Project Area" means the Central Los Gatos Redevelopment Project of the Agency.
"Town" means the Town of Los Gatos, California, a general law city and municipal
corporation duly organized and existing under and by virtue of the Constitution and laws of the
State of California.
"Trustee" means Bank of America National Trust and Savings Association or any other
entity then performing the function of Trustee under the Trust Agreement.
"Trust Agreement" means that certain Trust Agreement entitled "Trust Agreement" by
and among the Town, the Agency and the Trustee, dated as of August 1, 1992.
Section 2. Reimbursement. To assist the Town in paying the cost of the acquisition
and construction of the Project, the Agency and the Town agree that Net Tax Increment Revenues
shall be used and applied to repay the Town for all Lease Payments made by the Town to the
Agency under the Lease Agreement for the Project. This Reimbursement Agreement may be
amended from time to time by the parties hereto to subordinate the Agency's obligations hereunder
to any bonded indebtedness issued or incurred or to be issued or incurred by the Agency.
Each such repayment or other payment shall be due and payable by the Agency to the Town
one (1) Business Day following the date of payment of the applicable Lease Payment. The Agency
may apply other legally available moneys to make payments hereunder.
-2-
Section 3. Obligations Constitute indebtedness The obligations of the Agency
under this Agreement shall constitute an indebtedness of the Agency for the purpose of carrying
out the redevelopment of the Project Area, which indebtedness may be made payable out of taxes
levied in such Project Area and allocated to the Agency under subdivision (b) of Section 33670 of
the Health and Safety Code of the State of California, or out of any other funds legally available to
the Agency.
Section 4. Default by Agency If the Agency shall fail to repay the Town or shall
fail to pay any other payment required to be paid hereunder at the time specified herein, and such
failure shall continue for a period of ten (10) days, then the Town or, if applicable, any assignee,
shall be entitled to exercise any and all remedies available pursuant to law.
Section 5. No Merger. It is the intent of the Agency and the Town that there shall be
no merger of the Agency's interest, as lessor under the Lease Agreement, and the Agency's
payment obligations hereunder so as to extinguish the Town's interest, as lessee, under the Lease
Agreement, it being understood by the Agency and the Town that the general fund Lease Payment
obligations of the Town under the Lease Agreement shall be and remain valuable rights of the
owners of the Certificates.
Section 6. Remedies Not Exclusive No remedy herein conferred upon the Town
shall be exclusive of any other remedy and each and every remedy shall cumulative and shall be in
addition to every other remedy given hereunder or hereafter conferred on the Town.
W
IN WITNESS WHEREOF, the Agency has caused this agreement to be executed in its
corporate name by its duly authorized officers and sealed with its corporate seal; and the Town has
caused this agreement to be executed in its name by its duly authorized officers and sealed with its
corporate seal, as of the date first above written.
(SEAL)
Attest:
By
Town Clerk
(SEAL)
Attest:
By
Secretary
ME
TOWN OF LOS GATOS
By
Town Manager
LOS GATOS REDEVELOPMENT
AGENCY
Un
Executive Director
22030-03
JH iW:DJO:brf
TRUST AGREEM'
✓ >✓id C:LEI4 6;23'92
K 7'091 92
AGR:. '7 J'! 7'15;92
Dated as of August 1, 1992
by and among
s
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Trustee,
LOS GATOS REDEVELOPMENT AGENCY
and the
TOWN OF LOS GATOS
(Parking Lot #4 Project)
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section1.01. Definitionsn ..................... ....... .... ... . ... . ............ ..................... .......... .............................. 3
Section 1.02. Authorization ....................
......................................................................... I............... 10
ARTICLE III
DISPOSITION OF PROCEEDS; RESERVE FUND; ACQUISITION AND
CONSTRUCTION FUND AND COSTS OF ISSUANCE FUND
Section 3.01. Application of Proceeds and Transfer of Other Funds ........................... ............................... 15
Section -.32. Establishment and Application of Construction Fund .......................... ............................... 15
Section 3.03. Reserve Fund .... ...............................
.................................... ...............................
Section 3.04. Costs of Issuance Fund .................................................................. ............................... 16
ARTICLE IV
REDEMPTION OF CERTIFICATES
Section 4.01. Redemption ..........................
Section 4.02. Selection of Certificates for Redemption .......................................... ............................... 19
Section 4.03. Notice of Redemption .............................. ...............................
Section 4.04, Partial Redemption of Certificate ................................................... ............................... 19
Section 4.05. Effect of Notice of Redemption .................
19
ARTICLE II
Section 2.01.
THE CERTIFICATES OF PARTICIPATION
Authorization .............
Section 2.02.
..................................................... ...............................
Date ...................
11
Section 2.03.
Rates ...................... .............. ...............................
Maturities; Interest Rates ...............
11
Section 2.04.
.
Form of Certificates; interest". ............ .......
.......... 11
Section 2.05.
............................................ .4.........0...................
Form .........................................................................................
11
Section 2.06.
...............................
Execution............
12
Section 2.07.
4 ................ ..................................................... ...............................
Transfer and Exchange ........................
12
Section 2.08.
.
Certificates Mutilated, Lost, Destroyed or Stolen...
Section 2.09.
............................ ...............................
Payment..... ..... ...............................
12
Section 2.10.
Execution of Documents and Proof Ownershi
" " " "" . 13
Section 2.11.
of
Registration Books---. ....................... P............................... ...............................
13
Section 2.12.
Delivery of Additional Certificates .....
13
.............................................. ...............................
14
ARTICLE III
DISPOSITION OF PROCEEDS; RESERVE FUND; ACQUISITION AND
CONSTRUCTION FUND AND COSTS OF ISSUANCE FUND
Section 3.01. Application of Proceeds and Transfer of Other Funds ........................... ............................... 15
Section -.32. Establishment and Application of Construction Fund .......................... ............................... 15
Section 3.03. Reserve Fund .... ...............................
.................................... ...............................
Section 3.04. Costs of Issuance Fund .................................................................. ............................... 16
ARTICLE IV
REDEMPTION OF CERTIFICATES
Section 4.01. Redemption ..........................
Section 4.02. Selection of Certificates for Redemption .......................................... ............................... 19
Section 4.03. Notice of Redemption .............................. ...............................
Section 4.04, Partial Redemption of Certificate ................................................... ............................... 19
Section 4.05. Effect of Notice of Redemption .................
19
ARTICLE VI
INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT
DOMAIN
Section 6.01. Establishment ofusurance and Condemnatiou Fund; Application of Net Proceeds of Insurance
Award.........................
Section 6.02. Application of Net Proceeds of Eminent Domain Award ...................... ............................... 21
Section6.03. Cooperation ................................................................................ ............................... 22
-i-
ARTICLE V
Section 5.01.
LEASE PAYMENTS; LEASE PAYMENT FUND
Assignment of Rights in Lease Agreement
Section 5.02.
........................................ ...............................
Establishment of Lease Payment Fund .............................................
20
Section5.03.
...............................
Deposits ............................................
20
Section 5.04.
...............................
Application of Moneys ............... " """"
20
Section 5.05.
Interception of Motor Vehicle License Fees
Section 5.06.
..............................
.................................
Surplus .................................................
20
....................................
...... ...............................
20
ARTICLE VI
INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT
DOMAIN
Section 6.01. Establishment ofusurance and Condemnatiou Fund; Application of Net Proceeds of Insurance
Award.........................
Section 6.02. Application of Net Proceeds of Eminent Domain Award ...................... ............................... 21
Section6.03. Cooperation ................................................................................ ............................... 22
-i-
ARTICLE VII
MONEYS IN FUNDS
ARTICLE IX
MODIFICATION OR AMENDMENT OF AGREEMENT
Section 9.01.
Section 9.02.
Amendments Permitted .................................................................... .............................28
Procedure for Amendment with Written Consent of Certificate Owners ... ...............................
23
Section7.01.
Held in Trust ............................................................................... ...............................
23
Section 7.02.
Investments Aut horized ................................................................. ...............................
29
Section7.03.
Account ing .................................................... ............................... ...........................6.23
23
Section 7.04.
Allocation of Earnings .................................................................. ......................6........
23
Section 7.05.
Section 7.06.
Valuation of Investments.. .... 4 ..... 6 ................. 6 ............................ 4 ..................................
Commingling of Qualified Investments and Disposition of Investments . .................6.............
23
Section 10.01.
Compliance With and Enforcement of Lease Agreement .........................
24
Section7.07.
No Arbitrage ............................................................................... ...............................
24
Section 7.08.
Small Issuer Exemption From Rebate Requirements ........................... ....6.................6........
31
Section 7.09.
Small Issuer Exemption From Bank Nondeductibility Restriction ............ .............................24
.........
31
Section 10.05.
ARTICLE VIII
..........
31
Section 10.06.
THE TRUSTEE
Section 8.01.
Compensation of the Trustee .......................................................... ...............................
25
25
Section 8.02.
Removal of Trustee ...................................................................... ..............6................
Section 8.03.
Appointment of Agent ..................................... ............................... ............................625
25
Section 8.04.
Merger or Consolidation ................................................................ ...............................
2a
Section 8.05.
Protection and Rights of the Trustee ................................................ .......6.......................
32
ARTICLE IX
MODIFICATION OR AMENDMENT OF AGREEMENT
Section 9.01.
Section 9.02.
Amendments Permitted .................................................................... .............................28
Procedure for Amendment with Written Consent of Certificate Owners ... ...............................
28
Section 9.03.
Disqualified Certificates ................................................................. ...............................
29
Section y.04.
Section 9.05.
Effect of Supplemental Agreement ..................................................... .............................29
Endorsement or Replacement of Certificates Delivered After Amendments ..............................
29
Section 9.06.
Amendatory Endorsement of Cert ificates ........................................... ...............................
30
ARTICLE X
COVENANTS; NOTICES
Section 10.01.
Compliance With and Enforcement of Lease Agreement .........................
.............................31
Section 10.02.
Observance of Laws and Regulations .................................................. .............................31
31
Section 10.03.
Prosecution and Defense of Suits ..................................................... ...............................
31
Section 10.04.
Recordation and Filing .................................................................. .....................
.........
31
Section 10.05.
No Federal Guarantee .................................................................... ...............................
..........
31
Section 10.06.
Further Assurances ............................................................. ...............................
ARTICLE XI
LIMITATION OF LIABILITY
32
Section 11.01.
Limited Liability of Town ............................................................. ...............................
32
Section 11.02.
No Liability for Trustee Performance ............................................... ...............................
32
Section 11.03.
Indemnification ............................................................................ ...............................
32
Section 11.04.
Section 11.05.
Opinion of Counsel ...................................................................... ...............................
Limitation of Rights to Parties and Certificate Owners ........................ ...............................
32
-11-
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS
Section 12.01.
Assignment of Rights ...................................................................
° ..•• 35
Section12.02.
Remedies ....................................................................................
............................... 33
Section 12.03.
Application of Funds ............................
............................... 33
Section 12.04.
...............................
Institution of Legal Proceedings. ....................................................................................
33
Section 12.05.
Non - waiver . ...............
33
Section 12.06.
................................................................................................
Remedies Not Exclusive .................................
Section 12.07.
...............................
Power of Trustee to Control Proceedings .........................................
Section 12.08.
Limitation on Certificate Owners' Right to Sue
............................... 34
.................................
............................... 34
ARTICLE XIII
DEFEASANCE
Section 13.01.
Section 13.02.
Section 13.03.
Section 13.04.
Discharge of Trust Agreement ................... ...............................
Discharge of Liability on Certificates ..................................................... .
Deposit of Money or Defeasance Securities with Trustee ........................ .............................36
Payment of Certificates After Discharge of Trust Agreement ................... .............................36
° ..•• 35
ARTICLE XI
MISCELLANEOUS
Section14.01.
Section 14.02.
Records .............................................. ...............................
Notices ....................
37
Section14.03.
Section 14.04.
Section 14.05.
Section 14.06.
Section 14.07.
Section 14.08.
Section 14.09.
Section 14.10.
...............................
Governing Law ........................................................................... ...............................
Binding Effect ........................................ ...............................
Execution in Counterparts .............................................................. .............................37
Destruction of Cancelled Certificates ................................................ ...............................
Headings . ...............................
Waiver of Notice ..................................................... ...............................
Separability of Invalid Provisions ..................................................... .............................38
Payments on Other than a Business Day ..................................... ..............................:
37
37
.37
...... 38
EXIIIBITA
EXHIBIT B
FORM OF CERTIFICATE OF PARTICIPATION
FORM OF CONSTRUCTION AND ACQUISITION DISBURSEMENT REQUEST
-iii-
TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into as of August 1, 1992, by and among
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association organized and existing under the laws of the United States of America (the
'Trustee "), the LOS GATOS REDEVELOPMENT AGENCY, a public body, corporate and
politic, duly formed, organized, operating and acting pursuant to the laws of the State of California
(the "Agency "), and the TOWN OF LOS GATOS, a general law city and political subdivision duly
organized and existing under the Constitution and laws of the State of California (the 'Town ");
WITNESSETH:
WHEREAS, the Town has determined that it is in the interests of the Town at this time to
provide for the financing of the acquisition and construction of Parking Lot #4, together with
related and appurtenant facilities (the "Project"); and
WHEREAS, in order to provide moneys to pay the costs of acquiring and constructing
the Project, the Agency proposes to lease the Project to the Town pursuant to the Lease Agreement,
dated as of August 1, 1992 (the "Lease Agreement "); and
WHEREAS, under the Lease Agreement, the Agency is required to cause to be deposited
certain sums of money to be credited, held and applied in accordance with the Lease Agreement
and with this Trust Agreement, dated as of August 1, 1992 (the 'Trust Agreement ") by and among
the Agency, the Town and the Trustee; and
WHEREAS, upon delivery of the Lease Agreement, the Agency is required to deliver to
the Town for deposit into the Construction Fund established under this Trust Agreement, in
addition to other moneys to be deposited with the Trustee, moneys for the acquisition, construction
and furnishing of the Project. For the purpose of obtaining such moneys, the Agency is willing to
sell to certain persons (the "Owners ") undivided fractional interests in the Lease Payments, such
fractional interests to be evidenced by certificates of participation therein (the "Certificates "). In
order to make such undivided fractional interests marketable on terms acceptable to the Town and
the Agency, the Agency is willing to assign and transfer its rights under the Lease Agreement to the
Trustee for the benefit of the Owners of the Certificates. Concurrently with the delivery of this
Trust Agreement, the Trustee is executing and delivering Certificates on behalf of the Town in an
aggregate face amount of Three Million Dollars ($3,000,000). The proceeds of such sale, together
with a deposit to be made by the Agency (the "Agency Deposit "), are anticipated to be sufficient to
permit the Agency to make the deposits required under the Lease Agreement and this Trust
Agreement and to permit the Agency to pay therewith the cost of acquisition, construction and
furnishing of the Project, and
WHEREAS, the Agency will establish a trust pursuant to this Trust Agreement and direct
the Trustee to execute and deliver the Certificates representing undivided fractional interests in the
Lease Payments to and including the earlier of the maturity or redemption of the Certificates; and
WHEREAS, the Town is authorized under the Constitution and the laws of the State of
California to enter into this Trust Agreement for the purposes and subject to the terms and
conditions set forth herein.
WHEREAS, for the purpose of obtaining the moneys required to be deposited into the
funds and accounts established hereunder, the Agency proposes to assign and transfer certain of its
rights under said Lease Agreement to the Trustee, and in consideration of such assignment and the
execution of this Trust Agreement, the Trustee has agreed to execute and deliver Certificates of
Participation (Parking Lot 4), each evidencing an undivided fractional interest in the Lease
Payments made by the Town under the Lease Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. DefinitiOnS. Unless the context otherwise requires, the terms defined
in this Section 1.01 shall, for all purposes of this Trust Agreement, have the meanings herein
specified. In addition, any terms defined in the Lease Agreement and not otherwise defined herein
shall have the respective meanings given such tetras in the Lease Agreement.
"Agency" means the Los Gatos Redevelopment Agency, a public body, corporate and
politic, duly formed, organized, operating and existing under the laws of the State.
"Agency Representative" means the Executive Director or Treasurer of the Agency, or
any other person authorized by resolution of the Agency to act on behalf of the Agency under or
with respect to this Trust Agreement and the Lease Agreement.
"Assignment Agreement" means the Assignment Agreement, dated as of August 1,
1992, by and between the Agency and the Trustee, together with any duly authorized and executed
amendments thereto.
Bond Counsel" means any attorney or firm of nationally recognized expertise with
respect to legal matters relating to obligations the interest on which is exempt from federal income
taxation pursuant to Section 103 of the Tax Code.
"Business Day" means a day of the week other than a Saturday or Sunday on which the
Trustee is not required or authorized to remain closed and on which the New York Stock Exchange
is open.
"Certificates" means the $3,000,000 aggregate principal amount of Certificates of
Participation (Parking Lot #4 Project) to be executed and delivered pursuant hereto, and includes
additional Certificates issued pursuant to Section 2.12 hereof.
"Closing Date" means the date upon which there is an exchange of the Certificates for
the proceeds representing the purchase of the Certificates by the Original Purchasers.
"Code" means the Internal Revenue Code of 1986, as amended.
"Completion Date" means the date upon which the Project is completed, as certified to
the Trustee by a Town Representative.
"Construction Costs" means all costs of acquiring, constructing, improving and
equipping the Project, including but not limited to:
(i) all costs which the Town shall be required to pay under the terms of any contract
or contracts for the acquisition and construction, improvement or equipping of the Project;
(ii) obligations of the Town incurred for labor and materials in connection with the
construction, improving or equipping of the Project;
(iii) the cost of performance or other bonds and any and all types of insurance that
may be necessary or appropriate, to have in effect during the course of construction of the
Project; and
-3-
(iv) all costs of engineering, legal and architectural services, including the actual
out -of- pocket costs of the Town for test borings, surveys, estimates, plans and
specifications and preliminary investigations therefor, development fees, sales
commissions, any fee for construction management or otherwise for supervising
construction, as well as costs for the performance of all other duties required by or
consequent to the proper construction, improvement and equipping of the Project; and
(v) any sums required to reimburse the Town for advances made by or on behalf of
the Town, whether before, on or after the Closing Date, for any of the above items or for
any other costs incurred and for work done by or on behalf of the Town which are properly
chargeable to the Project.
"Construction Fund" means the fund by that name established and held by the Trustee
Pursuant to Section 3.02 hereof.
San Francisco, "Corporate California, or att s ch other address design ted by the Trustee in writtensnotice
filed with the Town, the Agency and the Owners including such other office for registration,
transfer, exchange or payment of Certificates.
"Costs of Issuance" means all items of expense directly or indirectly payable by or
reimbursable to the Town or the Agency relating to the execution, sale and delivery of the
Certificates, including but not limited to settlement costs, printing costs, reproduction and binding
costs, initial fees and charges of the Trustee, financing discounts, legal fees and charges, bond
insurance or title, insurance fees and charges, financial and other professional consultant fees,
costs of rating agencies for credit ratings, fees for execution, transportation and safekeeping of the
Certificates and charges and fees in connection with the foregoing.
"Counsel" means any attorney at law or law firm (who or which may be counsel for the
Town, the Trustee or the Agency and which counsel is reasonably satisfactory to the Town).
"Debt Service" means the scheduled principal and interest components of Lease
Payments, payable during the period of computation, excluding amounts scheduled during such
period which relate to principal which has been retired before the beginning of such period.
"Defeasance Securities" means U.S. Treasury Certificates, Notes and Bonds
(including State and Local Government Series -- "SLGSs "), direct obligations of the Treasury
which have been stripped by the Treasury itself, CATS, TIGRS and similar securities and
obligations issued by the following agencies which are noncallable and backed by the full faith and
credit of the U.S.:
U.S. Export-Import Bank Direct obligations or fully guaranteed certificates of
beneficial ownership
Farmers Home Administration Certificates of beneficial ownership
Federal Financing Bank
Federal Housing Administration Debentures
5. General Services Administration
Participation certificates
6. U.S. Maritime Administration Guaranteed Title XI financing
ME
New Communities Debentures U.S. government guaranteed debentures
U.S. Public Housing Notes and Bonds U.S. government guaranteed public
housing notes and bonds
9. U.S. Department of Housing and Urban Development Project Notes Local
Authority Bonds
10. Prerefunded municipal bonds must be rated "_" by Moody's or "_" by
S &P. If the issue is only rated by S &P (i.e., there is no Moody's rating), then the
prerefunded bonds must have been prerefunded with cash, direct U.S. or U.S.
guaranteed obligations, or --rated prerefunded municipals that satisfy this
condition.
"Event of Default" means an event of default under the Lease Agreement, as defined in
Section 9.1 thereof.
"Federal Securities" means 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) or obligations the principal of and interest on which are unconditionally guaranteed by
the United States of America.
"Fiscal Year" means each twelve -month period beginning on July 1 of any year and
ending on June 30 of the succeeding year, or any other twelve -month period hereafter adopted by
the Town as its official fiscal year period.
"Independent Counsel" means an attorney duly admitted to the practice of law before
the highest court of the state in which such attorney maintains an office and who is not an
employee of the Agency, the Trustee or the Town.
"Insurance and Condemnation Fund" means the fund by that name establNhed and
held by the Trustee pursuant to Section 6.01.
"Lease Agreement" means the Lease Agreement dated as of August 1, 1992, by and
between the Agency as lessor and the Town as lessee, together with any further duly authorized
and executed amendments thereto.
"Lease Default Event" means any of the events specified in Section 9.1 of the Lease
Agreement.
"Lease Payments" means all payments required to be paid by the Town pursuant to
Section 4.3 of the Lease Agreement, including any prepayment thereof pursuant to Article X df the
Lease Agreement.
"Lease Payment Fund" means the fund by that name established and held by the
Trustee pursuant to Section 5.02.
"Lease Term" means the period during which the Lease is in effect as specified in the
Lease Agreement.
"Moody's" means Moody's Investors Service, of New York, New York, or its
successors.
-5-
"Net Proceeds" means any insurance proceeds or condemnation award paid with respect
to the Project or the Site, to the extent remaining after payment therefrom of all expenses incurred
in the collection thereof.
"Original Purchaser" means the original purchaser of the Certificates.
"Outstanding ", when used as of any particular time with reference to Certificates, means
(subject to the provisions of Section 9.03) all Certificates theretofore, or thereupon being, executed
and delivered by the Trustee under this Trust Agreement except (1) Certificates theretofore
cancelled by the Trustee or surrendered to the Trustee for cancellation; (2) Certificates with respect
to which all liability of the Town shall have been discharged in accordance with Section 13.02,
including Certificates (or portions of Certificates) referred to in Section 13.04; and (3) Certificates
for the transfer or exchange of or in lieu of or in substitution for which other Certificates shall have
been executed and delivered by the Trustee pursuant to this Trust Agreement.
"Owner" or "Certificate Owner" when used with respect to a Certificate means the
person in whose name the ownership of such Certificate shall be registered.
"Payment Date" means (i) with respect to the interest on the Certificates, February 1,
1993, and the first day of each August 1 and February 1 thereafter so long as any Certificates are
Outstanding hereunder, and (ii) with respect to the principal of the Certificates, August 1, 1993 and
terminating August 1, 2012.
"Principal Amount" means the total unpaid principal component of the Lease Payments
due under Section 4.3 of the Lease Agreement.
"Private Business Use" means use directly or indirectly in a trade or business carried
on by a natural person or in any activity carried on by a person other than a natural person,
excluding, however, use by a governmental unit and use as a member of the general public.
"Project" means Parking Lot #4, as more fully described in Exhibit C to the Lease
Agreement, and located on the Site.
"Qualified Investments" means the following:
(A) Federal Securities
(B) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following federal agencies, provided such obligations are backed by the full faith and
credit of the United States of America:
U.S. Export-Import Bank
Direct obligations or fully guaranteed certificates of beneficial
ownership
2. Farmers Home Administration
Certificates of beneficial ownership
3. Federal Financing Bank
4. Federal Housing Administration Debentures
5. General Services Administration
Participation certificates
0
Government National Mortgage Association ( "GNMA ")
GNMA - guaranteed mortgage- backed bonds
GNMA - guaranteed pass- through obligations
U.S. Maritime Administration
Guaranteed Title XI financing
New Communities Debentures
U.S. government guaranteed debentures
9. U.S. Public Housing Notes and Bonds
U.S. government guaranteed public housing notes and bonds
10. U.S. Department of Housing and Urban Development
Project Notes
Local Authority Bonds
(C) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by
any of the following U.S. government agencies (non -full faith and credit agencies):
Federal Home Loan Bank System
Senior debt obligations
Federal Home Loan Mortgage Corporation
Participation Certificates
Senior debt obligations
3. Federal National Mortgage Association
Mortgage- backed securities and senior debt obligations (excluded are
stripped mortgage securities which are valued greater than par on the portion
of unpaid principal.)
Student Loan Marketing Association
Senior debt obligations
(D) Money market 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; AAAm; or AAm.
(E) Certificates of deposit 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 whose short term obligations are rated A -1 or better by S &P and P -1 by
Moody's. The collateral must be held by a third party and the Trustee must have a perfected first
security interest in the collateral.
(F) Certificates of deposit, savings accounts, deposit accounts or money market deposits
which are fully insured by FDIC.
(G) Commercial Jr rated, at the time of purchase, "Prime - 1" by Moody's and "A -1"
or better by S &P.
(H) Bonds or notes issued by any state or municipality which are rated by Moody's and
S &P in one of the two highest rating categories assigned by such agencies.
-7-
(I) 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 "A" or better by S &P.
(J) Repurchase agreements which 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.
Repurchase Agreements which satisfy the following criteria;
Repurchase Agreements must be between the Trustee and a dealer bank or securities
firm
a. Primary dealers on the Federal Reserve reporting dealer list which fall under
the jurisdiction of the SIPC, or
b. Banks rated "A" or above by Standard & Poor's Corporation and Moody's
Investor Services.
The written repurchase agreement must include the following:
a. Securities which are acceptable for transfer are:
(1) Federal Securities
b. The term of the repurchase agreement may be up to 30 days
C. The collateral must be delivered to 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) before /simultaneous with payment (perfection by
possession of certificated securities).
d. The Trustee has a perfected fust priority security interest in the collateral.
e. Collateral is free and clear of third -party liens and in the case of SIPC
broker was not acquired pursuant to a repurchase agreement or reverse
purchase agreement.
f. Failure to maintain the requisite collateral percentage will require the Trustee
to liquidate collateral.
g. Valuation of Collateral
(1) The collateral must be valued weekly, marked -to- market at current
market price plus accrued interest
�(a) The value of collateral must be equal to 103% of the amount
of cash transferred by the Trustee to the dealer bank or
security firm under the repurchase agreement plus accrued
interest. If the value of securities held as collateral slips
below 103% of the value of the cash transferred by the
53
Trustee, then additional cash and /or acceptable securities
must be transferred.
3. Legal opinion which must be delivered to the Trustee: Repurchase
agreement meets guidelines under state law for legal investment of public
funds.
"Rating Category" means any generic rating category of Moody's or S &P, without
regard to any refinement of such category by plus or minus sign or by numerical or other
qualifying designation.
"Record Date" means the close of business on the fifteenth day of the month preceding
each Payment Date, whether or not such fifteenth day is a Business Day.
"Registration Books" means the records maintained by the Trustee pursuant to Section
2.11 for registration and transfer of ownership of the Certificates.
"Regulations" means temporary and permanent regulations promulgated under the Code.
"Reserve Fund" means the fund established and held by the Trustee pursuant to Section
3.03 of this Trust Agreement.
"Reserve Fund Surety Bond" means a letter of credit, bond insurance policy, or other
comparable credit which meets the requirements contained in Section 3.03, second paragraph.
"Reserve Requirement" means an amount, including a Reserve Fund Surety Bond, not
to exceed, the lesser of (a) ten percent (10 %) of the proceeds of the Certificates as referenced in
Section 4.01 hereof; (b) maximum annual Lease Payments.
"Site" means that certain real property described in Exhibit B to the Lease Agreement.
"Site Lease" means the Site Lease, dated as of August 1, 1992, by and between the
Agency and the Town.
"S &P" means Standard & Poor's Agency, of New York, New York, or its successors.
"State" means the State of California.
"Tax Code" means the Internal Revenue Code of 1986, as amended, or any federal
statutes enacted in lieu of the Internal Revenue Code of 1986. Any reference herein to a provision
of the Tax Code shall include all applicable regulations of the United States Department of the
Treasury promulgated be deemed to be and shall refer to any statute of similar import enacted in
lieu or in amendment of such section or contained in any federal statutes enacted in lieu of the
Internal Revenue Code of 1986.
"Term of the Lease Agreement" means the time during which the Lease Agreement is
in effect, as provided in Section 4.2 of the Lease Agreement.
"Town" means the Town of Los Gatos, a general law city and political subdivision duly
organized and existing under the Constitution and the laws of the State.
"Town Representative" means the Town Manager or Finance Manager of the Town or
any other person authorized by resolution of the Town Council to act on behalf of the Town under
or with respect to this Trust Agreement and the Lease Agreement.
In
"Trust Agreement" or "Agreement" means this Trust Agreement, together with any
amendments or supplements hereto permitted to be made hereunder.
"Trustee" means Bank of America National Trust and Savings Association, a national
banking association, organized under the laws of the United States of America or any successor
thereto acting as Trustee pursuant to this Trust Agreement.
"Written Request of the Agency" means an instrument in writing signed by the
Agency Representative.
"Written Request of the Town" means an instrument in writing signed by the Town
Representative.
Section 1.02. Authorization Each of the parties hereby represents and warrants that
it has full legal authority and is duly empowered to enter into this Agreement, and has taken all
actions necessary to authorize the execution of this Agreement by the officers and persons signing
it.
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ARTICLE II
THE CERTIFICATES OF PARTICIPATION
Section 2.01. Authorization_ The Trustee is hereby authorized and directed to
execute and deliver to the Original Purchaser, Certificates of Participation (Parking Lot 4 Project)
in an aggregate principal amount of Three Million Dollars ($3,000,000) evidencing undivided
fractional interests in the Lease Payments.
Section 2.02. pAte. Each Certificate shall be dated as of the date of its execution
(except that each Certificate delivered to the Original Purchaser shall be dated as of August 1,
1992), and interest with respect thereto shall be payable from the Payment Date next preceding the
date of execution thereof, unless: (i) it is executed as of a Payment Date, in which event interest
represented thereby shall be payable from such Payment Date; or (ii) it is executed after a Record
Date and before the following Payment Date, in which event interest represented thereby shall be
payable from such Payment Date; or (iii) it is executed on or before in which event
interest represented thereby shall be payable from August 1, 1992; provided, however, that if, as
of the date of any Certificate, interest represented by such Certificate is in default, interest
represented by such Certificate shall be payable from the Payment Date to which interest
represented thereby has previously been paid or made available for payment.
Section 2.03. Maturities- Interest Rates, The Certificates shall mature on August
1, as follows:
Maturity
Date
Principal
Interest Reoffering
Au ust 1
Amount
Rate M Price So
1993
$80,000
% 100%
100
1994
85,000
100
1995
90,000
100
1996
95,000
100
1997
100,000
100
1998
105,000
100
1999
110,000
100
2000
115,000
100
2001
125,000
100
2002
135,000
100
2003
140,000
100
2004
150,000
100
2005
160,000
100
2006
170,000
2012
1,305,000
100
Section 2.04. Form of Certificates: interest. The Certificates shall be delivered
in the form of fully registered Certificates without coupons in the denomination of $5,000 or any
integral multiple thereof, except that no Certificate may have principal maturing in more than one
year. The Certificates shall be assigned such alphabetical and numerical designation as shall be
designated by the Trustee.
-11-
Interest represented by the Certificates shall be payable on each Payment Date to and
including the date of maturity or redemption, whichever is earlier, as provided in Section 2.09.
Said interest shall represent the portion of Lease Payments designated as interest and coming due
during the Rental Period preceding each Payment Date. The proportionate share of the portion of
Lease Payments designated as interest represented by any Certificate shall be computed by
multiplying the portion of Lease Payments designated as principal represented by such Certificate
by the rate of interest applicable to such Certificate (on the basis of a 360 -day year of twelve 30-
day months).
Section 2.05. Form. The Certificates shall be substantially in the form set forth in
Exhibit A attached hereto and by this reference incorporated herein.
Section 2.06. Execution, The Certificates shall be executed by and in the name of the
Trustee by the manual signature of an authorized signatory of the Trustee. If any officer whose
signature appears on any Certificate ceases to be such officer before the date of delivery of such
Certificate, such signature shall nevertheless be as effective as if the officer had remained in office
until such date. Any Certificate may be executed on behalf of the Trustee by such person as at the
actual date of the execution of such Certificate shall be the proper signatory of the Trustee.
Section 2.07. Transfer and Rx hanaa (a) Transfer_ of Certificates. The
registration of any Certificate 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 his duly
authorized attorney, upon surrender of such Certificate for cancellation at the Corporate Trust
Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form
approved by the Trustee, duly executed. Whenever any Certificate or Certificates shall be
surrendered for registration of transfer, the Trustee shall execute and deliver a new Certificate or
Certificates of the same maturity and aggregate principal amount, in any authorized denominations.
(b) Exchange of Certificates Certificates may be exchanged at the Corporate Trust Office
of the Trustee, for a like aggregate principal amount of Certificates of other authorized
denominations of the same maturity. The Town shall pay any costs of the Trustee incurred in
connection with such exchange, except that the Trustee may require the payment by the Certificate
Owner requesting such exchange of any tax or other governmental charge required to be paid with
respect to such exchange. The cost of printing any new Certificate shall be paid by the Town.
Certificates may not be exchanged or transferred during the period designated for selection of
Certificates for redemption, nor shall any Certificate selected for redemption be transferred or
exchanged.
Section 2.08. Certificates ' 'i trojed or Ctolen If any
Certificate shall become mutilated, the Trustee, at the expense of the Owner of said Certificate,
shall execute and deliver a new Certificate of like tenor and maturity in exchange and substitution
for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so
mutilated. Every mutilated Certificate so surrendered to the Trustee shall be cancelled by it. If any
Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Trustee, and, if such evidence is satisfactory to the Trustee and, if an indemnity
satisfactory to the Trustee shall be given, the Trustee, at the expense of the Certificate Owner, shall
execute and deliver a new Certificate of like tenor and maturity and numbered as the Trustee shall
determine in lieu of and in substitution for the Certificate so lost, destroyed or stolen. The Trustee
may require payment of an appropriate fee for each new Certificate delivered under this Section
2.08 and of the expenses which may be incurred by the Trustee in carrying out the duties under
this Section 2.08. Any Certificate issued under the provisions of this Section 2.08 in lieu of any
Certificate alleged to be lost, destroyed or stolen shall be equally and proportionately entitled to the
benefits of this Agreement with all other Certificates secured by this Agreement. The Trustee shall
-12-
not be required to treat both the original Certificate and any replacement Certificate as being
Outstanding for the purpose of determining the principal amount of Certificates which may be
executed and delivered hereunder or for the purpose of determining any percentage of Certificates
Outstanding hereunder, but both the original and substitute Certificate shall be treated as one and
the same. Notwithstanding any other provision of this Section 2.08, in lieu of delivering a new
Certificate in exchange for a Certificate which has been mutilated, lost, destroyed or stolen, and
which has matured, the Trustee may make payment with respect to such Certificate upon receipt of
the above - mentioned indemnity.
Section 2.09. payment. Payment of interest due with respect to any Certificate on
any Payment Date shall be made to the person appearing on the Registration Books as the Owner
thereof as of the Record Date immediately preceding such Payment Date, such interest to be paid
by check or draft mailed by first class mail on the Payment Date to such Owner at his address as it
appears on the Registration Books. The principal and redemption price represented by the
Certificates at maturity or upon prior redemption shall be payable in lawful money of the United
States upon surrender at the Corporate Trust Office of the Trustee.
Section 2.10. Fx' -ti.ion of Documents and Proof of Ownership. Any
�..
request, direction, consent, revocation of consent, or other instrument in writing required or
permitted by this Agreement to be signed or executed by Certificate Owners may be in any number
of concurrent instruments of similar tenor, and may be signed or executed by such Owners in
person or by their attorneys or agents appointed by an instrument in writing for that purpose.
Proof of the execution of any such instrument, or of any instrument appointing any such attorney
or agent, and of the ownership of Certificates shall be sufficient for any purpose of this Agreement
(except as otherwise herein provided), if made in the following manner:
(a) The fact and date of the execution by any Owner or his attorney or agent of any
such instrument and of any instrument appointing any such attorney or agent, may be
proved by a certificate, which shall be acknowledged or verified, of an officer of any bank
or trust company located within the United States, or of any notary public, or other officer
authorized to take acknowledgments of deeds to be recorded in such jurisdictions, that the
persons signing such instruments acknowledged before him the execution thereof. Where
any such instrument is executed by an officer of a corporation or association or a member
of a partnership on behalf of such corporation, association or partnership, such certificate
shall also constitute sufficient proof of his authority.
(b) The fact of the ownership of Certificates by any person and the amount, the
maturity and the numbers of such Certificates and the date of his holding the same shall be
proved by the Registration Books.
Nothing contained in this Article 11 shall be construed as limiting the Trustee to such proof,
it being intended that the Trustee may accept any other evidence of the matters herein stated which
the Trustee may deem sufficient. Any request or consent of the Owner of any Certificate shall bind
every future Owner of the same Certificate in respect of anything done or suffered to be done by
the Trustee in pursuance of such request or consent.
Section 2.11. R oictra ""L s. The Trustee shall keep or cause to be kept, at its
Corporate Trust Office, sufficient records for the registration and registration of transfer of the
Certificates, which shall at all times during regular business hours be open to inspection by the
Town and the Agency; 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 the Registration Books, Certificates as hereinbefore provided.
-13-
Section 2.12. Delivery of Additional rtifirarec In addition to the Certificates
herein authorized to be executed and delivered, the parties hereto may enter into an agreement
supplemental hereto for the purpose of authorizing the execution and delivery of additional
certificates of participation, subject to the following specific conditions which are hereby made
conditions precedent to the execution and delivery of such additional certificates of participation:
(a) The Town and the Agency shall have entered into an agreement amendatory of
or supplemental to the Lease Agreement pursuant to and in accordance with Section 8.3(a)
of the Lease Agreement, pursuant to which the Town is obligated to pay additional lease
payments, which shall thereupon become Lease Payments for all purposes of this Trust
Agreement.
(b) The Agency and the Trustee shall have entered into an assignment agreement
whereby the Agency assigns to the Trustee all of its right to receive additional lease
payments under and pursuant to the agreement described in (a) above.
(c) Interest represented by such additional certificates of participation shall only be
payable on February 1 and August 1, and principal represented by such additional
certificates of participation shall only be payable on August 1 in any year.
(d) An amount shall be deposited in the Reserve Fund such that the balance therein
after such deposit shall be equal to the Reserve Requirement, taking into account the Lease
Payments due with respect to the Certificates and any Additional Certificates then to be
Outstanding.
(e) Such supplemental agreement shall provide that the proceeds of sale of such
certificates of participation shall be either: (i) deposited in a construction fund to be
disbursed solely to pay the costs of acquiring, constructing and improving improvements,
facilities and other real property on the Site; or (ii) used for other capital projects of the
Town.
(f) There shall have been filed with the Trustee an opinion of Bond Counsel stating
that the issuance of such additional certificates of participation are legal, valid and binding
and will not adversely affect the exemption from federal income taxation of interest
represented by the Certificates.
Such additional certificates of participation shall represent undivided ownership interests of
the owners thereof in the additional lease payments required to be paid by the Town pursuant to the
agreement described in (a) above and in the Lease Payments, without preference, priority or
distinction as to payment or otherwise of any of the Certificates or such additional certificates of
participation over any of the others by reason of the number or date thereof or the time of sale,
execution and delivery thereof, or otherwise for any reason or cause whatsoever, except as
expressly provided herein.
-14-
ARTICLE III
DISPOSITION OF PROCEEDS; RESERVE FUND; ACQUISITION AND
CONSTRUCTION FUND AND COSTS OF ISSUANCE FUND
Section 3.01. Application of Proceeds and Transfer of Other Funds. (a)
The proceeds received by the Trustee from the sale of the Certificates and other funds shall
forthwith be set aside by the Trustee in the following respective funds and in the following order of
priority:
(i) The Trustee shall deposit in the Lease Payment Fund an amount equal to the
portion of the proceeds which represents accrued interest due and payable on the Closing
Date by the Town under the Lease Agreement ($ ), as well as capitalized
interest equal to $ , representing interest from the Closing Date until
(for a total deposit of $ ).
(ii) The Trustee shall deposit an amount equal to (the Reserve
Requirement) in the Reserve Account; and
(iii) The Trustee shall deposit an amount equal to $ in the
Costs of Issuance Fund; and
(iv) Deposit the balance of $ to the Construction Fund.
(b) The Trustee shall accept the Reserve Fund Surety Bond, if applicable, in lieu of said
deposit of funds to the Reserve Fund.
(c) The Agency Deposit received by the Trustee from the Agency shall be deposited in the
Agency Contribution Account within the Construction Fund.
a
Section 3.02. Establishment and Application of Construction Fund, The
Trustee shall establish and maintain a separate fund to be known as the "Construction Fund."
Except as otherwise provided herein, money in the Construction Fund shall be used solely for (1)
payment of the Construction Costs, (2) transfer to the Lease Payment Fund.
The Trustee shall disburse moneys in the Construction Fund from time to time (but not
more frequently than weekly) to pay Construction Costs upon receipt by the Trustee of a
requisition executed by the Town Representative, substantially in the form attached hereto as
Exhibit B which:
(a) states with respect to each disbursement to be made (i) the requisition number,
(ii) the name and address of the person, firm or corporation to whom payment will be made
or that payment is to be made to the Town for costs to be reimbursed or to be paid, (iii) the
amount to be disbursed, (iv) that each obligation mentioned therein is a proper charge
against the Construction Fund and has not been the basis of any previous disbursement,
and (v) that the amount of such disbursement is for a Construction Cost, as defined in this
Trust Agreement;
(b) specifies in reasonable detail the nature of the obligation; and
(c) is accompanied by a bill or statement of account for each obligation.
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The Trustee may conclusively rely on the executed requisition as full and complete
authority for payment and disbursement from the Construction Fund.
On notification of the Completion Date, the Trustee shall withdraw all moneys then
remaining in the Construction Fund and shall transfer such moneys to the Lease Payment Fund to
be applied as a credit against Lease Payments, unless the Trustee receives notification from the
Town that such excess proceeds are to be used to prepay the principal component of the Lease
Payments, in which event such moneys shall be used to redeem Certificates in accordance with
Section 4.01(d) hereof. In addition, the Trustee may transfer funds from the Construction Fund to
the Lease Payment Fund if an Event of Default has occurred and if amounts then on hand in the
Lease Payment Fund and Reserve Fund are insufficient to pay Lease Payments in full as the same
become due and payable.
Section 3.03. Reserve Fund, The Trustee shall establish a special fund designated
as the 'Reserve Fund" to be held separate and apart from all other funds and moneys held by the
Trustee in trust for the benefit of the Owners of the Certificates, and applied solely as provided
herein. All moneys at any time on deposit in the Reserve Fund shall be applied solely as provided
in this Section 3.03 and in Section 7.04. If on any Payment Date the moneys available in the Lease
Payment Fund do not equal the amount of the principal and interest and redemption premiums (if
any) represented by the Certificates then coming due and payable, the Trustee shall apply the
moneys available in the Reserve Fund to make delinquent Lease Payments on behalf of the Town
by transferring the amount necessary for this purpose to the Lease Payment Fund. Upon receipt of
any delinquent Lease Payment or portion thereof with respect to which moneys have been
advanced from the Reserve Fund, such Lease Payment or portion thereof shall be deposited in the
Reserve Fund to the extent of such advance. If on any Payment Date the moneys on deposit in the
Reserve Fund and the Lease Payment Fund (excluding amounts required for payment of principal,
interest and redemption premium, if any, represented by any Certificates theretofore having come
due but not presented for payment) are sufficient to pay all Outstanding Certificates, including all
principal, interest and redemption premiums (if any), the Trustee shall, upon the Written Request
of the Town, transfer all amounts then on deposit in the Reserve Fund to the Lease Payment Fund
to be applied to the payment of the Lease Payments on behalf of the Town, and such moneys shall
be distributed to the Owners of Certificates in accordance with Article IL Any amounts remaining
in the Reserve Fund on the date of payment in full or provision for such payment of all
Outstanding Certificates shall be withdrawn by the Trustee and at the Written Request of the Town
applied towards such payment or paid to the Town.
The Reserve Requirement may be satisfied by crediting to the Reserve Fund moneys, a
letter of credit, a bond insurance policy, any other comparable credit facility or any combination
thereof, which in the aggregate make funds available in the Reserve Fund in an amount equal to the
Reserve Requirement; provided however, that such letter of credit, bond insurance policy or other
comparable credit facility, must be issued by a financial institution whose long term debt is rated in
a Rating Category at least as high as the rating then in place on the Certificates at the time of
delivery of such letter of credit, bond insurance policy or other comparable credit facility. Upon
the deposit with the Trustee of such letter of credit, bond insurance policy or other comparable
credit facility, the Trustee shall release moneys then on hand in the Reserve Fund to the Town in an
amount equal to the face amount of the letter of credit, bond insurance policy or other comparable
credit facility.
Section 3.04. Costs of Issuance Fund, The Trustee shall establish a special fund
designated as the "Costs of Issuance Fund'; shall keep such fund separate and apart from all other
funds and moneys held by it; and shall administer such fund as provided herein. There shall be
deposited in the Costs of Issuance Fund the proceeds of the Certificates deposited therein pursuant
to Section 3.01(a), and any other funds from time to time deposited with the Trustee for such
purpose. The moneys in the Costs of Issuance Fund shall be disbursed to pay the Costs of
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Issuance from time to time upon the receipt of Written Requests of the Town setting forth the
amounts to be disbursed for payment or reimbursement of Costs of Issuance and the name and
address of the person or persons to whom said amounts are to be disbursed, stating that the
amounts to be disbursed are for Costs of Issuance properly chargeable to the Costs of Issuance
Fund. Any amounts remaining in the Costs of Issuance Fund on the date one hundred and twenty
(120) days after the Closing Date shall be withdrawn therefrom by the Trustee and transferred to
the Lease Payment Fund.
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ARTICLE IV
REDEMPTION OF CERTIFICATES
Section 4.01. Redem lion. (a) Optional Redemption The Certificates maturing on
or before August 1, 2002, are not subject to optional redemption prior to their respective stated
maturities. The Certificates maturing on or after August 1, 2003, are subject to optional
redemption on any date on or after August 1, 2002, in whole or in part, from prepayments of the
Lease Payments made at the option of the Town pursuant to Section 10.2 of the Lease Agreement,
at a redemption price equal to the principal amount thereof to be redeemed together with accrued
interest to the redemption date plus a premium (expressed as percentages of the principal amount of
Certificates or portions thereof to be redeemed) set forth in the following table, together with
accrued interest to the date fixed for redemption:
Redemption
Redemption Dates premium
August 1, 2002 and February 1, 2003
3%
August 1, 2003 and February 1, 2004
2%
August 1, 2004 and February 1, 2005
1%
August 1, 2005 and thereafter
0
(b) Redemption From Net Proceeds of Insurance and Condemnation. The Certificates are
also subject to redemption, in whole or in part on any date from the Net Proceeds of insurance or
condemnation with respect to the Project and the Site, which Net Proceeds are deposited in the
Lease Payment Fund and credited towards the redemption of the Lease Payments made by the
Town pursuant to Section 10.3 of the Lease Agreement, at a redemption price equal to the principal
amount of the Certificates to be redeemed, together with accrued interest to the date fixed for
redemption, without premium.
(c) Mandator- Sinking Fund Redemption. The Certificates maturing on August 1, 2012,
are subject to mandatory sinking fund redemption on August 1 in each year commencing August 1,
2007, from the principal components of the Lease Payments required to be paid by the Town
pursuant to the Lease Agreement with respect to each such redemption date, at a redemption price
equal to the principal amount thereof to be redeemed, together with accrued interest thereon to the
date fixed for redemption, without premium, as follows:
Redemption Date Principal
JAugust_U Amount
2007
180,000
2008
195,000
2009
210,000
2010
225,000
2011
240,000
2012
255,000
(d) tional Redemption From Excess Certificate Proceeds. The Certificates are subject to
optional redemption on any February 1 or August 1 occurring after the Completion Date, at the
option of the Town, at the principal amount thereof, plus accrued interest, to the date fixed for
redemption without premium, from funds remaining in the Construction Fund.
Writ
Section 4.02. Selection of Certificates for Redemption. Whenever provision is
made in this Agreement for the redemption of Certificates and less than all Outstanding Certificates
are called for redemption, the Trustee shall select Certificates for redemption from the Outstanding
Certificates not previously called for redemption, in the case of optional redemption, in inverse
order of maturity, and in all other cases, among maturities on a pro rata basis in integral multiples
of $5,000 and by lot within a maturity in any manner deemed fair by the Trustee. For the purposes
of such selection, Certificates shall be deemed to be composed of $5,000 portions, and any such
portion may be separately redeemed. The Trustee shall promptly notify the Town and the Agency
in writing of the Certificates so selected for redemption.
Section 4.03. Notice of Redemption. When redemption is authorized or required
pursuant to Section 4.01, the Trustee shall give notice of the redemption of the Certificates. Such
notice shall specify: (a) that the Certificates or a designated portion thereof are to be redeemed, (b)
the date of redemption, (c) the place or places where the redemption will be made, and (d) the price
at which the Certificates are to be redeemed. Such notice shall further state that on the specified
date there shall become due and payable upon each Certificate, the principal and premium, if any,
together with interest accrued to said date, and that from and after such date interest represented
thereby shall cease to accrue and be payable.
Notice of such redemption shall be mailed by first class mail to the respective Owners of
Certificates designated for redemption at their addresses appearing on the Registration Books, at
least thirty (30) days but not more than forty -five (45) days prior to the redemption date, which
notice shall, in addition to setting forth the above information, set forth, in the case of each
Certificate called only in part, the portion of the principal thereof which is to be redeemed; provided
that neither failure to receive such notice so mailed nor any defect in any notice so mailed shall
affect the sufficiency of the proceedings for the redemption of such Certificates.
Section 4.04. Partial Redemption of Certificate. Upon surrender of any
Certificate redeemed in part only, the Trustee shall execute and deliver to the Owner thereof, at the
expense of the Town, a new Certificate or Certificates of authorized denominations equal in
aggregate principal amount to the unredeemed portion of the Certificate surrendered and of the
same interest rate and the same maturity.
Section 4.05. Effect of Notice of Redemption. Notice having been given as
aforesaid, and moneys for the redemption (including the interest to the applicable date of
redemption and including any applicable premium), having been set aside in the Lease Payment
Fund, the Certificates shall become due and payable on said date of redemption, and, upon
presentation and surrender thereof at the Corporate Trust Office of the Trustee, said Certificates
shall be paid at the unpaid principal amount (or applicable portion thereof) with respect thereto,
plus interest accrued and unpaid to said date of redemption.
If, on said date of redemption, moneys for the redemption of all the Certificates to be
redeemed, together with interest to said date of redemption, shall be held by the Trustee so as to be
available therefor on such date of redemption, and, if notice of redemption thereof shall have been
given as aforesaid, then, from and after said date of redemption, interest represented by said
Certificates shall cease to accrue and become payable. All moneys held by or on behalf of the
Trustee for the redemption of Certificates shall be held in trust for the account of the Owners of the
Certificates so to be redeemed.
All Certificates paid at maturity or redeemed prior to maturity pursuant to the provisions of
this Article IV shall be cancelled upon surrender thereof and destroyed.
ME
ARTICLE V
LEASE PAYMENTS; LEASE PAYMENT FUND
Section 5.01. Assignment of Rlwhts in Lease Agreement, The Agency has in
the Assignment Agreement transferred, assigned and set over to the Trustee certain of its rights in
the Lease Agreement, including but not limited to all of the Agency's rights to receive and collect
all of the Lease Payments and all other amounts required to be deposited in the Lease Payment
Fund pursuant to the Lease Agreement or pursuant hereto. All Lease Payments and such other
amounts to which the Agency may at any time be entitled (other than amounts payable under
Sections 7.3 and 9.4 of the Lease Agreement) shall be paid directly to the Trustee, and all of the
Lease Payments collected or received by the Agency shall be deemed to be held and to have been
collected or received by the Agency as the agent of the Trustee, and if received by the Agency at
any time shall be deposited by the Agency with the Trustee within one Business Day after the
receipt thereof, and all such Lease Payments and such other amounts shall be forthwith deposited
by the Trustee upon the receipt thereof in the Lease Payment Fund (except as provided in Section
3.02).
Section 5.02. Establishment of r ease Payment Fund The Trustee shall
establish a special fund designated as the "Lease Payment Fund ". All moneys at any time
deposited by the Trustee in the Lease Payment Fund shall be held by the Trustee in trust for the
benefit of the Owners of the Certificates. So long as any Certificates are Outstanding, neither the
Town nor the Agency shall have any beneficial right or interest in the Lease Payment Fund or the
moneys deposited therein, except only as provided in this Trust Agreement, and such moneys shall
be used and applied by the Trustee as hereinafter set forth.
Section 5.03. Deposits. There shall be deposited in the Lease Payment Fund all
Lease Payments received by the Trustee (except as provided in Section 3.02), including any
moneys required to be deposited therein pursuant to the Lease Agreement or pursuant to this Trust
Agreement, and including any other moneys required to be credited towards payment of the Lease
Payments.
Section 5.04. Application of Moneys. All amounts in the Lease Payment Fund
shall be used and withdrawn by the Trustee solely for the purpose of paying the principal, interest
and redemption premiums (if any) with respect to the Certificates as the same shall become due and
payable, in accordance with the provisions of Article II and Article IV.
Section 5.05. Interception of Motor Vehicle r icense Fees. In the event the
Town fails to make Lease Payments to the Trustee as required herein, the Trustee shall
immediately communicate that information to the affected Owners and to the State Controller and
shall request payment from the State Controller in an amount equal to the delinquent Lease
Payments, which request shall continue until the Town is current in the payment of Lease
Payments.
Section 5.06. SurRius, Any surplus remaining in the Lease Payment Fund, after
redemption and payment of all Certificates, including premiums and accrued interest (if any) and
payment of any applicable fees and expenses to the Trustee, or provision for such redemption or
payment having been made to the satisfaction of the Trustee, shall be withdrawn by the Trustee and
remitted to the Town.
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ARTICLE VI
INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT
DOMAIN
Section 6.01. Establishment of Insurance and Condemnation Fund:
Application of Net Proceeds of Insurance Award, Any Net Proceeds of insurance
against accident to or destruction of any structure constituting any part of the Project collected by
the Town in the event of any such accident or destruction shall be paid to the Trustee by the Town
pursuant to Section 6.2(a) of the Lease Agreement and deposited by the Trustee promptly upon
receipt thereof in a special fund designated as the "Insurance and Condemnation Fund ". If the
Town determines and notifies the Trustee in writing of its determination, within ninety (90) days
following the date of such deposit, that the replacement, repair, restoration, modification or
improvement of the Project is not economically feasible or in the best interest of the Town, then
such Net Proceeds shall be promptly transferred by the Trustee to the Lease Payment Fund and
applied to the redemption of Lease Payments pursuant to Section 4.01(b); provided, that such
transfer shall only be made if the amount transferred is sufficient to redeem the principal amount of
Certificates attributable to the portion of the Project damaged or destroyed, determined on the basis
of the ratio resulting from dividing the cost of the portion of the Project so damaged or destroyed
by the total cost of the Project, which information the Town will supply to the Trustee. All Net
Proceeds deposited in the Insurance and Condemnation Fund and not so transferred to the Lease
Payment Fund shall be applied to the prompt replacement, repair, restoration, modification or
improvement of the damaged or destroyed portions of the Project by the Town, upon receipt of
Written Requests of the Town stating with respect to each payment to be made (i) the name and
address of the person, firm or corporation to whom payment is due, (ii) the amount to be paid and
(iii) that each obligation mentioned therein has been properly incurred, is a proper charge against
the Insurance and Condemnation Fund, has not been the basis of any previous withdrawal, and
specifying in reasonable detail the nature of the obligation, accompanied by a bill or a statement of
account for such obligation. Any balance of the Net Proceeds remaining after such work has been
completed shall be paid to the Town. The preceding sentence notwithstanding, before the
remaining Net Proceeds are paid to the Town by the Trustee, the Town shall deliver to the Trustee
a certificate stating that the Project has been replaced, repaired, restored, modified or improved
with the Net Proceeds to the extent that the Town has full use, occupancy and enjoyment of the
Project.
Section 6.02. Application of Net Proceeds of Eminent Domain Award. The
provisions of this Section are subject to Section 6.2 of the Lease Agreement. If all or any part of
the Project or the Site shall be taken by eminent domain proceedings (or sold to a government
threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be
deposited with the Trustee in the Insurance and Condemnation Fund pursuant to Section 6.2(b) of
the Lease Agreement and shall be applied and disbursed by the Trustee as follows:
(a) If all of the Project and the Site shall have been taken in such eminent domain
proceedings or sold to a government threatening the use of eminent domain powers, or if
the Town has given written notice to the Trustee of its determination that such proceeds are
not needed for repair or rehabilitation of the Project, the Trustee shall transfer such
proceeds to the Lease Payment Fund to be credited towards the redemption of the Lease
Payments required to be paid pursuant to Section 6.2(b) of the Lease Agreement and
applied to the redemption of Certificates in the manner provided in Section 4.01(b).
(b) If less than all of the Project and the Site shall have been taken in such eminent
domain proceedings or sold to a government threatening the use of eminent domain
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powers, and if the Town has given written notice to the Trustee of its determination that
such proceeds are needed for repair, rehabilitation or replacement of the Project and Site,
the Trustee shall pay to the Town, or to its order, from said proceeds such amounts as the
Town may expend for such repair or rehabilitation, upon the filing of Written Requests of
the Town in the form and containing the provisions set forth in Section 6.01.
Section 6.03. Cooperation. The Agency and the Trustee shall cooperate fully with
the Town at the expense of the Town in filing any proof of loss with respect to any insurance
policy maintained pursuant to Article V of the Lease Agreement and in the prosecution or defense
of any prospective or pending condemnation proceeding with respect to the Project or the Site or
any portion thereof.
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ARTICLE VII
MONEYS IN FUNDS
Section 7.01. Held in Trust. The moneys and investments held by the Trustee under
this Trust Agreement are irrevocably held in trust for the Owners of the Certificates, and for the
purposes herein specified, and such moneys shall be expended only as provided in this Trust
Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any
creditor of (i) the Town, (ii) the Trustee, (iii) the Agency or (iv) the Owners of Certificates.
Section 7.02. Investments Authorized. All moneys in any of the funds established
pursuant to this Trust Agreement shall be invested by the Trustee, upon Written Request of the
Town, solely in Qualified Investments. In the absence of direction from the Town, the Trustee
shall invest funds solely in Qualified Investments described in Paragraph D of the definition
thereof.
Qualified Investments may be purchased at such prices as the Town may in its discretion
determine. Moneys in all funds other than the Reserve Fund shall be invested in Qualified
Investments maturing not later than the date on which it is estimated that such moneys will be
required for the purposes specified in this Trust Agreement.
Section 7.03. Accountin¢. The Trustee shall furnish to the Town, not less than
monthly, an accounting of all investments made by the Trustee. The Trustee shall not be
responsible or liable for any loss suffered in connection with any investment of funds made by it in
accordance with Section 7.02.
Section 7.04. Allocation of Earnings. Any income, profit or loss on such
investments in any of the funds other than the Reserve Fund shall be deposited in or charged to the
respective funds from which such investments were made. Investment earnings on the Reserve
Fund shall be transferred to the Construction Fund prior to the Completion Date, and thereafter, to
the Lease Payment Fund.
Section 7.05. Valuation of Investments. In computing the amount in any fund or
account, Qualified Investments shall be valued at the market price thereof. With respect to all
funds and accounts except the Reserve Fund, valuation shall occur annually, prior to the adoption
of the Town's budget. Qualified Investments in the Reserve Fund shall be valued annually, which
valuation may be in the form of the Trustee's regular accounting statements, except in the event of
a withdrawal from the Reserve Fund, whereupon they shall be valued immediately after such
withdrawal and monthly thereafter until the Reserve Fund is at its required level.
All amounts representing accrued and capitalized interest shall be held by the Trustee,
pledged solely to the payment of interest with respect to the Certificates and invested, upon
Written Request of the Town, only in Federal Securities maturing at such times and in such
amounts as are necessary to match the interest payments to which they are pledged, and shall
otherwise remain uninvested.
Section 7.06. ComminelinP of Onalified Investments and Disposition of
Investments. Investments in all funds may be commingled for purposes of making, holding or
disposing of investments, notwithstanding provisions herein for transfer to or holding in particular
funds amounts received or held by the Trustee hereunder, provided that the Trustee shall at all
times account for such investments strictly in accordance with the funds to which they are credited
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and otherwise as provided in this Trust Agreement. The Trustee may act as principal or agent in
the making or disposing of any investment.
The Trustee may sell at the best price obtainable, or present for redemption, any Qualified
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 Qualified Investments
is credited, and the Trustee shall not be liable or responsible for any loss resulting from any
investment made pursuant to this Section 7.06.
Section 7.07. No Arbitrage. The Town shall not take, or permit or suffer to be taken
by the Trustee or otherwise, any action with respect to the Gross Proceeds of the Certificates
which if such action had been reasonably expected to have been taken, or had been deliberately and
intentionally taken, on the Closing Date would have caused the Lease Agreement to be an
"arbitrage bond" within the meaning of section 148(a) of the Code and Regulations promulgated
thereunder.
Section 7.08. Small Issuer Exemption From Rebate R q it men c. In
accordance with section 148(f)(4)(C) of the Code, the Town covenants that it is a governmental
unit with general taxing powers; that the Bonds are not private activity bonds as defined in section
141 of the Code; that ninety -five percent (95 %) or more of the proceeds of the Bonds are to be
used for local governmental activities of the Town (or of a governmental unit the jurisdiction of
which is entirely within the jurisdiction of the Town); and that the aggregate face amount of the all
tax- exempt obligations (other than private activity bonds as defined in section 141 of the Code)
issued by the Town, including all subordinate entities of the Town, during the calendar year 1991
will not exceed $5,000,000, excluding, however, private activity bonds, as defined in section 141
of the Code and current refunding obligations having a principal amount not in excess of the
refunded obligations.
Section 7.09. Small Issuer Exemption From Bank Nondeductibility
Restriction. The Town hereby designates the Bonds for purposes of paragraph (3) of section
265(b) of the Tax Code and covenants that the Bonds do not constitute private activity bonds as
defined in section 141 of the Tax Code, and the aggregate face amount of obligations issued by the
Town (including all subordinate entities of the Town and all entities that may issue obligations on
behalf of the Town) during the calendar year 1992 will not exceed $10,000,000 excluding,
however, private activity bonds, as defined in section 141 of the Tax Code (other than qualified
501(c)(3) bonds as defined in section 145 of the Tax Code) and current refunding obligations
having a principal amount in excess of the refunded obligation.
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ARTICLE VIII
THE TRUSTEE
Section 8.01. Compensation of the Trustee. The Town shall from time to time,
as agreed upon between the Town and the Trustee, pay to the Trustee reasonable compensation for
its services, and shall reimburse the Trustee for all its advances and expenditures, including but not
limited to advances to, and fees and expenses of, independent appraisers, accountants, consultants,
counsel, agents and attorneys -at -law or other experts employed by it in the exercise and
performance of its powers and duties hereunder.
Section 8.02. Removal of Trustee. So long as no Event of Default has occurred
and is continuing, the Town and the Agency may by written agreement between themselves, with
the consent of the Owners of a majority in aggregate principal amount of all Certificates
Outstanding may by written request, at any time and for any reason, remove the Trustee and any
successor thereto, and shall thereupon appoint a successor or successors thereto. Any such
successor shall be a bank or trust company, duly authorized to exercise trust powers and subject to
examination by federal or State authority having a combined capital (exclusive of borrowed capital)
and surplus of at least Fifty Million Dollars ($50,0()0,000). If such bank or trust company
publishes a report of condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority above referred to, then for the purposes of this Section the
combined capital and surplus of such bank or trust company shall be deemed to be its combined
capital and surplus as set forth in its most recent report of conditions so published.
The Trustee may at any time resign by giving written notice to the Town and the Agency,
by giving to the Certificate Owners notice by mailing such notice to the registered owners of the
Certificates. Upon receiving such notice of resignation, the Town shall promptly appoint a
successor Trustee by an instrument in writing; provided, however, that in the event that the Town
does not appoint a successor Trustee within thirty (30) days following receipt of such notice of
resignation, the resigning Trustee may petition the appropriate court having jurisdiction to 'appoint a
successor Trustee. Any resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon
such acceptance, the Town shall mail notice thereof to the Certificate Owners at their respective
addresses set forth on the Certificate registration books maintained pursuant to Section 2.11.
Section 8.03. Apuointment of Agent. The Trustee may appoint an agent to
exercise any of the powers, rights or remedies granted to the Trustee under this Trust Agreement,
and to hold title to property or to take any other action which may be desirable or necessary.
Section 8.04. Merger or Consolidation. Any company into which the Trustee may
be merged or converted, or with which it may be consolidated, or any company resulting frotir any
merger, conversion or consolidation to which it shall be a party, or any company to which the
Trustee may sell or transfer all or substantially all of its corporate trust business (provided that such
company shall be eligible under Section 8.02) shall be the successor to the Trustee withodt the
execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
Section 8.05. Protection and Rights of the Trustee. The Trustee shall be
protected and shall incur no liability in acting or proceeding in good faith upon any resolution,
notice, telegram, request, consent, waiver, certificate, statement, affidavit, voucher, bond,
requisition or other paper or document which it shall in good faith believe to be genuine and to
have been passed or signed by the proper board or person or to have been prepared and furhished
pursuant to any of the provisions of this Trust Agreement, and the Trustee shall be under no duty
INA
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 not be bound to recognize any person as an Owner
of any Certificate or to take any action at his request unless such person shall appear as Owner on
the Registration Books kept by the Trustee pursuant to the provisions of this Trust Agreement.
The Trustee may consult with counsel, who may be counsel to the Agency, with regard to legal
questions, and the opinion of such counsel shall be full and complete authorization and protection
in respect of any action taken or suffered by it hereunder in good faith in accordance therewith.
Whenever in the administration of its duties under this Trust Agreement, 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), shall be deemed to be conclusively proved and established by the certificate of the
Town Representative or the Agency Representative and such certificate shall be full warranty to the
Trustee for any action taken or suffered under the provisions of this Trust Agreement 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 to it may seem reasonable.
The Trustee may become the Owner of the Certificates with the same rights it would have if
it were not the Trustee; may acquire and dispose of other bonds or evidences of indebtedness of the
Town with the same rights it would have if it were not the Trustee; and may act as a depository for
and permit any of its officers or directors to act as a member of, or in any other capaTown with
respect to, any committee formed to protect the rights of Owners of Certificates, whether or not
such committee shall represent the Owners of the majority in principal amount of the Certificates
then Outstanding. '
The recitals, statements and representations by the Town and the Agency contained in this
Trust Agreement or in the Certificates shall be taken and construed as made by and on the part of
the Town and the Agency, as the case may be, and not by the Trustee, and the Trustee does not
assume, and shall not have, any responsibility or obligation for the correctness of any thereof.
The Trustee may execute any of the trusts or powers hereof and perform the duties required
of it hereunder by or through attorneys, agents, or receivers, and shall be entitled to advice of
counsel concerning all matters of trust and its duty hereunder, and the Trustee shall not be
answerable for the default or misconduct of any such attorney, agent, or receiver selected by it with
reasonable care. The Trustee shall not be answerable for the exercise of any discretion or power
under this Trust Agreement or for anything whatever in connection with the funds and accounts
established hereunder, except only for its own gross negligence or willful misconduct. The
Trustee shall have no responsibility, opinion, or liability with respect to any information, statement
or recital in any offering memorandum or other disclosure material prepared or distributed with
respect to the issuance of these Certificates.
No provision of this Trust Agreement 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 its rights or powers.
The Trustee shall be under no obligation to exercise any of the rights or powers vested in it
by this Trust Agreement at the request or direction of the Town, the Agency or any of the
Certificate Owners pursuant to this Trust Agreement, unless the Town, the Agency or such Owner
shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such request or direction.
In addition, the Trustee shall be under no obligation to take any action at the direction of the
Owners deemed by the Trustee to be detrimental to the other Owners.
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The Trustee shall not be deemed to have knowledge of any Event of Default herein unless
and until it shall have actual knowledge thereof, or shall have received written notice hereof, at its
Corporate Trust Office. Except as otherwise expressly provided herein, the Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or of any of the documents executed in connection with the
Certificate, or as to the existence of an Event of Default hereunder.
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 the final payment or
the defeasance of the Certificates.
The Trustee shall have no duty to see to the payment or discharge of any tax, assessment or
other governmental charge or any lien of any kind owing with respect to, assessed or levied against
all or any portion of the Project or the Site upon which the Project is located.
All indemnifications and releases from liability granted herein to the Trustee shall extend to
the directors, officers, employees and agents of the Trustee.
The permissive right of the Trustee to do things enumerated in this Trust Agreement shall
not be construed to be a duty and no implied duties or obligations shall be read into this Trust
Agreement against the Trustee. The Trustee agrees to perform such duties, and only such duties as
are set forth in this Trust Agreement.
In accepting the trust hereby created, the Trustee acts solely as trustee for the benefit of the
Certificate Owners and not its individual capaTown, and all persons, including, without limitation,
the Town and the Agency, having any claim against the Trustee by reason of the transactions
contemplated hereby shall look only to the funds and accounts held by the Trustee hereunder for
the payment or satisfaction thereof except as otherwise provided herein.
All payments to be made by the Trustee under and pursuant to this Trust Agreement shall
be made only to the extent that the Trustee shall have received sufficient income and proceeds in
accordance with the terms of this Trust Agreement.
Under no circumstances shall the Trustee be liable in its individual capaTown for the
obligations evidenced by the Certificates.
The Trustee makes no warranty or representation, either express or implied, as to the title,
value, design, compliance with specifications or with legal requirements, quality, durability,
operation, condition, merchantability or fitness for any particular purpose or fitness for the use
contemplated by the Town of the Project or any portion thereof, or any other representation or
warranty with respect to the Project or any portion thereof. In no event shall the Trustee be liable
for incidental, indirect, special or consequential damages, in connection with or arising out of the
Lease Agreement or this Trust Agreement for the existence, furnishing, functioning or Town's use
of the Project.
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ARTICLE IX
MODIFICATION OR AMENDMENT OF AGREEMENT
Section 9.01. Amendments Permitted. This Agreement and the rights and
obligations of the parties hereto and the Lease Agreement and the rights and obligations of the
parties thereto, may be modified or amended at any time by a supplemental agreement which shall
become effective when the written consents of the Owners of at least sixty percent (60 %) in
aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates
disqualified as provided in Section 9.03, shall have been filed with the Trustee. No such
modification or amendment shall (1) extend or have the effect of extending the fixed maturity of
any Certificate or reducing the interest rate with respect thereto or extending the time of payment of
interest, or reducing the amount of principal thereof or reducing any premium payable upon the
redemption thereof, without the express consent of the Owner of such Certificate, or (2) reduce or
have the effect of reducing the percentage of Certificates required for the affirmative vote or written
consent to an amendment or modification of the Lease Agreement, or (3) modify any of the rights
or obligations of the Trustee without its written assent thereto. Any such supplemental agreement
shall become effective as provided in Section 9.02.
This Agreement and the rights and obligations of the parties hereto and the Lease
Agreement and the rights and obligations of the respective parties thereto, may be modified or
amended at any time by a supplemental agreement, without the consent of any such Owners, but
only to the extent permitted by law and only (1) to add to the covenants and agreements of any
parry, other covenants to be observed, or to surrender any right or power herein or therein reserved
to the Town, (2) to cure, correct or supplement any ambiguous or defective provision contained
herein or therein so long as such modification or amendment is not inconsistent with any other
provision contained herein, (3) in regard to questions arising hereunder or thereunder, as the
parties hereto or thereto may deem necessary or desirable and which shall not adversely affect the
interests of the Owners of the Certificates, (4) to modify the legal description of the Site to conform
to the requirements of title insurance or otherwise to add or delete property descriptions to reflect
accurately the description of the parcels intended to be included therein, (5) to make such additions,
deletions or modifications as may be necessary to assure compliance with section 148(f) of the
Code relating to required rebate of excess investment earnings to the United States or otherwise as
may be necessary to assure exemption from federal income taxation of the interest component of
the Lease Payments, or (6) to provide for the execution and delivery of additional certificates of
participation pursuant to and in accordance with Section 2.12. Any such supplemental agreement
shall become effective upon execution and delivery by the parties hereto or thereto as the case may
be. Any such supplemental agreement shall become effective upon execution and delivery by the
parties hereto or thereto as the case may be. No such modification shall modify any of the rights or
obligations of the Trustee without its written assent thereto.
Section 9.02. Procedure for Amendment with Written Consent of
Certificate Owners, This Agreement and the Lease Agreement may be amended by
supplemental agreement as provided in this Section 9.02 in the event the consent of the Owners of
the Certificates is required pursuant to Section 9.01. A copy of such supplemental agreement,
together with a request to th fificateat rtificate Owners for their consent thereto, shall be mailed by the
Trustee to each Owner of a his address as set forth on the Registration Books, but
failure to receive copies of supplemental agreement and request shall not affect the validity of
the supplemental agreement when assented to as in this Section provided.
Such supplemental agreement shall not become effective unless there shall be filed with the
Trustee the written consents of the Owners of at least sixty percent (60 %) in aggregate principal
ma
amount of the Certificates then Outstanding (exclusive of Certificates disqualified as provided in
Section 9.03) and a notice shall have been mailed as hereinafter in this Section provided. Each
such consent shall be effective only if accompanied by proof of ownership of the Certificates for
which such consent is given, which proof shall be such as is permitted by Section 2.10. Any such
consent shall be binding upon the Owner of the Certificate giving such consent and on any
subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent
is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such
revocation with the Trustee prior to the date when the notice hereinafter in this Section provided for
has been mailed. Any such revocation received by the Trustee after such notice has been mailed
shall be of no effect.
After the Owners of the required percentage of Certificates shall have filed their consents to
such supplemental agreement, the Trustee shall mail a notice to the Owners of the Certificates in the
manner hereinbefore provided in this Section for the mailing of such supplemental agreement of the
notice of adoption thereof, stating in substance that such supplemental agreement has been
consented to by the Owners of the required percentage of Certificates and will be effective as
provided in this Section (but failure to receive copies of said notice shall not affect the validity of
such supplemental agreement or consents thereto). A record, consisting of the papers required by
this Section to be filed with the Trustee, shall be conclusive proof of the matters therein stated.
Such supplemental agreement shall become effective upon the mailing of such last- mentioned
notice, and such supplemental agreement shall be deemed conclusively binding upon the parties
hereto and the Owners of all Certificates at the expiration of sixty (60) days after such mailing,
except in the event of a final decree of a court of competent jurisdiction setting aside such consent
in a legal action or equitable proceeding for such purpose commenced within such sixty (60) day
period.
Section 9.03. Disqualified Certificates. Certificates owned or held by or for the
account of the Town or by any person directly or indirectly controlling or controlled by, or under
direct or indirect common control with the Town (except any Certificates held in any pension or
retirement fund) shall not be deemed Outstanding for the purpose of any vote, consent, waiver or
other action or any calculation of Outstanding Certificates provided for in this Agreement, and shall
not be entitled to vote upon, consent to, or take any other action provided for in this Agreement.
Section 9.04. Effect of Supplemental Agreement. From and after the time any
supplemental agreement becomes effective pursuant to this Article IX, this Agreement or the Lease
Agreement, as the case may be, shall be deemed to be modified and amended in accordance
therewith, the respective rights, duties and obligations of the parties hereto or thereto and all
Owners of Certificates Outstanding, as the case may be, shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such modification and amendment, and all the
terms and conditions of any supplemental agreement shall be deemed to be part of the terms and
conditions of this Agreement or the Lease Agreement, as the case may be, for any and all
purposes.
The Trustee may require each Certificate Owner, before his consent provided for in this
Article IX shall be deemed effective, to reveal whether the Certificates as to which such consent is
given are disqualified as provided in Section 9.03.
Section 9.05. Endorsement or Replacement of Certificates Delivered After
Amendments, The Trustee may determine that Certificates delivered after the effective date of
any action taken as provided in this Article IX shall bear a notation, by endorsement or otherwise,
in form approved by the Trustee, as to such action. In that case, upon demand of the Owner of
any Certificate Outstanding at such effective date and presentation of his Certificate for the purpose
at the Corporate Trust Office of the Trustee, a suitable notation shall be made on such Certificate.
The Trustee may determine that the delivery of substitute Certificates, so modified as in the opinion
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of the Trustee is necessary -to conform to such Certificate Owners" action, which substitute
Certificates shall thereupon be prepared, executed and delivered. In that case, upon demand of the
Owner of any Certificate then Outstanding, such substitute Certificate shall be exchanged at the
Corporate Trust Office of the Trustee, without cost to such Owner, for a Certificate of the same
character then Outstanding, upon surrender of such Outstanding Certificate.
Section 9.06. Amendatory Endorsement of Certificates, The provisions of this
Article IX shall not prevent any Certificate Owner from accepting any amendment as to the
particular Certificates held by him, provided that proper notation thereof is made on such
Certificates.
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ARTICLE X
COVENANTS; NOTICES
Section 10.01. Compliance With and Enforcement of Lease Aoreem nt
The Town covenants and agrees with the Owners of the Certificates to perform all obligations and
duties imposed on it under the Lease Agreement.The Agency covenants and agrees with the
Owners of the Certificates to perform all obligations and duties imposed on it under the Lease
Agreement.
The Town will not do or permit anything to be done, or omit or refrain from doing
anything, in any case where any such act done or permitted to be done, or any such omission of or
refraining from action, would or might be an event of default under or a ground for cancellation or
termination of the Lease Agreement. The Agency and the Town, immediately upon receiving or
giving any notice, communication or other document in any way relating to or affecting their
respective estates, or either of them, in the Site, which may or can in any manner affect such estate
of the Town, will deliver the same, or a copy thereof, to the Trustee.
Section 10.02. Observance of Laws and Reimlations. The Town will well and
truly keep, observe and perform all valid and lawful obligations or regulations now or hereafter
imposed on it by contract, or prescribed by any law of the United States, or of the State, or by any
officer, board or commission having jurisdiction or control, as a condition of the continued
enjoyment of any and every right, privilege or franchise now owned or hereafter acquired by the
Town, including its right to exist and carry on business as a municipal corporation, to the end that
such rights, privileges and franchises shall be maintained and preserved, and shall not become
abandoned, forfeited or in any manner impaired.
Section 10.03. Prosecution and Defense of Suits. The Agency and the Town
shall promptly, upon request of the Trustee or any Certificate Owner, from time to time take such
action as may be necessary or proper to remedy or cure any defect in or cloud upon the tide to the
Project and the Site, whether now existing or hereafter developing and shall prosecute all such
suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify
and save the Trustee and every Certificate Owner harmless from all loss, cost, damage and
expense, including attorneys" fees, which they or any of them may incur by reason of any such
defect, cloud, suit, action or proceeding.
Section 10.04. Recordation and Filine. The Town shall record and file the Lease
Agreement, the Assignment Agreement and all such documents as may be required by law (and
shall take all further actions which may be necessary or be reasonably required by the Trustee), all
in such manner, at such times and in such places as may be required by law in order fully to
preserve, protect and perfect the security of the Trustee and the Certificate Owners.
Section 10.05. No Federal Guarantee, The Agency and the Town shall take no
action nor permit nor suffer any action to be taken if the result of the same would cause the Lease
Payments or the Certificates to be a federally guaranteed obligation within the meaning of Section
103(h) of the Tax Code.
Section 10.06. Further Assurances, The Agency and the Town will make, execute
and deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of this Agreement and
the Lease Agreement, and for the better assuring and confirming unto the Owners of the
Certificates the rights and benefits provided herein.
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ARTICLE XI
LIMITATION OF LIABILITY
Section 11.01. Limited Liability of Town. Except for the payment of Lease
Payments when due in accordance with the Lease Agreement and the performance of the other
covenants and agreements of the Town contained in the Lease Agreement and herein, the Town
shall have no pecuniary obligation or liability to any of the other parties or to the Owners of the
Certificates with respect to this Trust Agreement or the terms, execution, delivery or transfer of the
Certificates, or the distribution of Lease Payments to the Owners by the Trustee.
Section 11.02. No Liability for Trustee Performance. Neither the Town nor
the Agency shall have any obligation or liability to any of the other parties or to the Owners of the
Certificates with respect to the performance by the Trustee of any duty imposed upon it under this
Trust Agreement, except where the Town or the Agency, as the case may be, has given specific
direction to the Trustee to take certain actions.
Section 11.03. Indemnification. The Agency and the Town agree to indemnify and
save the Trustee harmless from and against all claims, suits and actions brought against it, or to
which it is made a party, and without negligence or willful misconduct on the part of the Trustee
and from all losses and damages suffered by it as a result thereof, (1) where and to the extent such
claim, suit or action arises out of the actions of any other party to this Agreement including but not
limited to the ownership, operation or use of the Project and the Site by the Town or (2) arising out
of or in connection with the acceptance or administration of the trust hereunder including the costs
and expenses (including attorney fees) of defending itself. In the event the Agency or the Town is
required to indemnify the Trustee as herein provided, the Agency or the Town shall be subrogated
to the rights of the Trustee to recover such losses or damages from any other person or entity.
Section 11.04. Opinion of Counsel. Before being required to take any action, the
Trustee may require an opinion of Independent Counsel acceptable to the Trustee, which opinion
shall be made available to the other parties hereto upon request, which counsel may be counsel to
any of the parties hereto, or a verified certificate of any party hereto, or both, concerning the
proposed action. If it does so in good faith, Trustee shall be protected in relying thereon.
Section 11.05. Limitation of Rights to Parties and Certificate Owners.
Nothing in this Agreement or in the Certificates expressed or implied is intended or shall be
construed to give any person other than the Town, the Agency, the Trustee and the Owners of the
Certificates, any legal or equitable right, remedy or claim under or in respect of this Agreement or
any covenant, condition or provision hereof; and all such covenants, conditions and provisions are
and shall be for the sole and exclusive benefit of the Town, the Agency, the Trustee and said
Owners.
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ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS
Section 12.01. Assignment of Rights. Pursuant to the Assignment Agreement the
Agency has transferred, assigned and set over to the Trustee all of the Agency's rights in and to the
Lease Agreement (excepting the Agency's rights under Sections 5.8, 7.3 and 9.4 thereof),
including without limitation all of the Agency's rights to exercise such rights and remedies
conferred on the Agency pursuant to the Lease Agreement as may be necessary or convenient (i) to
enforce payment of the Lease Payments and any other amounts required to be deposited in the
Lease Payment Fund or the Insurance and Condemnation Award Fund, and (ii) otherwise to
exercise the Agency's rights and take any action to protect the interests of the Trustee or the
Certificate Owners in an Event of Default.
Section 12.02. Remedies. If an Event of Default shall happen, then and in each and
every such case during the continuance of such Event of Default, the Trustee, may, and upon
request of the Owners as provided in Article IX of the Lease Agreement and subject to the
provisions of Section 8.05, shall exercise any and all remedies available pursuant to law or granted
pursuant to the Lease Agreement; provided, however, that notwithstanding anything herein or in
the Lease Agreement to the contrary, there shall be no right under any circumstances to accelerate
the maturities of the Certificates or otherwise to declare any Lease Payment not then in default to be
immediately due and payable.
Section 12.03. Application of Funds. All moneys received by the Trustee
pursuant to any right given or action taken under the provisions of this Article XII or Article IX of
the Lease Agreement shall be applied by the Trustee in the order following upon presentation of the
several Certificates, and the stamping thereon of the payment if only partially paid, or upon the
surrender thereof if fully paid -
First, to the payment of the costs and expenses of the Trustee and then of the
Certificate Owners in regard to any proceeding resulting from such Event of Default,
including reasonable compensation to its or their agents, attorneys and counsel and any
outstanding fees and expenses;
Second, to the payment of the whole amount then owing and unpaid with respect to
the Certificates for principal and interest, with interest on the overdue principal and
installments of interest, and in case such moneys shall be insufficient to pay in full the
whole amount so owing and unpaid with respect to the Certificates, then to the payment of
such principal and interest without preference or priority of principal over interest, or of
interest over principal, or of any installment of interest over any other installment of
interest, ratably to the aggregate of such principal and interest.
Section 12.04. Institution of Legal Proceedings. If one or more Events of
Default shall happen and be continuing, the Trustee in its discretion may, and upon the written
request of the Owners of a majority in principal amount of the Certificates then Outstanding, and
upon being indemnified to its satisfaction therefor, shall, proceed to protect or enforce its rights or
the rights of the Owners of Certificates by a suit in equity or action at law, either for the specific
performance of any covenant or agreement contained herein, or in aid of the execution of any
power herein granted, or by mandamus or other appropriate proceeding for the enforcement of any
other legal or equitable remedy as the Trustee shall deem most effectual in support of any of its
rights or duties hereunder.
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Section 12.05. Non - waiver. Nothing in this Article XII or in any other provision of
this Agreement or in the Certificates, shall affect or impair the obligation of the Town to pay or
prepay the Lease Payments in accordance with and subject to the terms and provisions of the Lease
Agreement, or affect or impair the right of action, which is also absolute and unconditional, of the
Certificate Owners to .institute suit to enforce and collect such payment. No delay or omission of
the Trustee or of any Owner of any of the Certificates to exercise any right or power arising upon
the happening of any Event of Default shall impair any such right or power or shall be construed to
be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy
given by this Article XII to the Trustee or to the Owners of Certificates may be exercised from time
to time and as often as shall be deemed expedient by the Trustee or the Certificate Owners.
Section 12.06. Remedies Not Exclusive. No remedy herein conferred upon or
reserved to the Trustee or to the Certificate Owners is intended to be exclusive of any other
remedy, and every such remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing, at law or in equity or by statute or otherwise.
Section 12.07. Power of Trustee to Control Proceedings. In the event that the
Trustee, upon the happening of an Event of Default, shall have taken any action, by judicial
proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or
upon the request of the Owners of a majority in principal amount of the Certificates then
Outstanding, it shall have full power, in the exercise of its discretion for the best interests of the
Owners of the Certificates, with respect to the continuance, discontinuance, withdrawal,
compromise, settlement or other disposal of such action; provided, however, that the Trustee shall
not discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at
law or in equity, without the consent of a majority in aggregate principal amount of the Certificates
Outstanding.
Section 12.08. Limitation on Certificate Owners' Right to Sue. No Owner of
any Certificate issued hereunder shall have the right to institute any suit, action or proceeding at
law or in equity, for any remedy under or upon this Agreement, unless (a) such Owner shall have
previously given to the Trustee written notice of the occurrence of an Event of Default hereunder;
(b) the Owners of at least twenty -five percent (25 %) in aggregate principal amount of all the
Certificates then Outstanding shall have made written request upon the Trustee to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said
Owners shall have tendered to the Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or
omitted to comply with such request for a period of sixty (60) days after such written request shall
have been received by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission are hereby declared,
in every case, to be conditions precedent to the exercise by any Owner of Certificates of any
remedy hereunder; it being understood and intended that no one or more Owners of Certificates
shall have any right in any manner whatever by his or their action to enforce any right under this
Agreement, except in the manner herein provided, and that all proceedings at law or in equity with
respect to an Event of Default shall be instituted, had and maintained in the manner herein provided
and for the equal benefit of all Owners of the Outstanding Certificates.
The right of any Owner of any Certificate to receive payment of said Owner's proportionate
interest in the Lease Payments as the same become due, or to institute suit for the enforcement of
such payment, shall not be impaired or affected without the consent of such Owner,
notwithstanding the foregoing provisions of this Section or any other provision of this Agreement.
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ARTICLE XIII
DEFEASANCE
Section 13.01. Discharge of Trust Agreement. The Certificates may be paid by
the Town in any of the following ways, provided that the Town also pays or causes to be paid any
other sums payable hereunder by the Town:
(a) by paying or causing to be paid the Principal Amount relating to the Certificates,
together with interest thereon, as and when the same become due and payable;
(b) by depositing with the Trustee, in trust, at or before maturity, money or
Defeasance Securities in the necessary amount (as provided in Section 13.03) to pay or
redeem all Certificates then Outstanding; or
(c) by delivering to the Trustee, for cancellation by it, all of the Certificates then
Outstanding.
If the Town shall also pay or cause to be paid all other sums payable by the Town
hereunder, then and in that case, at the election of the Town (evidenced by a Written Request of the
Town, filed with the Trustee, signifying the intention of the Town to discharge all such
indebtedness and this Trust Agreement), and notwithstanding that any Certificates shall not have
been surrendered for payment, this Trust Agreement and the pledge of Lease Payments and other
assets made under this Trust Agreement and all covenants, agreements and other obligations of the
Town under this Trust Agreement shall cease, terminate, become void and be completely
discharged and satisfied. In such event, upon the Written Request of the Town, the Trustee shall
cause an accounting for such period or periods as may be requested by the Town to be prepared
and filed with the Town and shall execute and deliver to the Town all such instruments as may be
necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall after
payment of its fees and expenses pay over, transfer, assign or deliver all moneys or securities or
other property held by it pursuant to this Trust Agreement which are not required for the payment
or redemption of Certificates not theretofore surrendered for such payment or redemption to the
Town.
Any funds held by the Trustee, at the time of one of the events described in paragraphs (a)
or (b) of this Section, which are not required for the payment to be made to Owners, shall be paid
over to the Town.
Section 13.02. Discharge of Liability on Certificates. Upon the deposit with
the Trustee, in trust, at or before maturity, of money or Defeasance Securities in the necessary
amount (as provided in Section 13.03) to pay or redeem any Outstanding Certificates (whgther
upon or prior to their respective maturities or the redemption date of such Certificates), provided
that, if such Certificates are to be redeemed prior to maturity, notice of such redemption shall have
been given as provided in Article IV or provision satisfactory to the Trustee shall have been made
for the giving of such notice, then all liability of the Town in respect of such Certificates shall
cease, terminate and be completely discharged, and the Owner thereof shall thereafter be entitled
only to payment out of such money or securities deposited with the Trustee as aforesaid for their
payment, subject, however, to the provisions of Section 13.04.
The Town may at any time surrender to the Trustee for cancellation by it any Certificates
previously issued and delivered, which the Town may have acquired in any manner whatsoever,
and such Certificates, upon such surrender and cancellation, shall be deemed to be paid and retired.
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Section 13.03. Deposit of Money or Defeasance Securities with Trustee.
Whenever in this Trust Agreement it is provided or permitted that there be deposited with or held in
trust by the Trustee money or Defeasance Securities in the necessary amount to pay or redeem any
Certificates, the money or securities so to be deposited or held may include money or Defeasance
Securities held by the Trustee in the funds established pursuant to this Trust Agreement and shall
be --
(a) lawful money of the United States in an amount equal to the principal amount of
such Certificates and all unpaid interest thereon to maturity, except that, in the case of
Certificates which are to be redeemed prior to maturity and in respect of which notice of
such redemption shall have been given as provided in Article IV or provision satisfactory to
the Trustee shall have been made for the giving of such notice, the amount to be deposited
or held shall be the principal amount of such Certificates and all unpaid interest thereon to
the redemption date; or
(b) Defeasance Securities the principal of and interest on which when due will
provide money sufficient in the opinion of an independent certified public accountant to pay
the principal of and all unpaid interest to maturity, or to the redemption date, as the case
may be, on the Certificates to be paid or redeemed, as such principal and interest become
due, provided that, in the case of Certificates which are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as provided in Article IV or
provision satisfactory to the Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably instructed (by the terms
of this Trust Agreement or by Written Request of the Town) to apply such money to the
payment of such principal and interest with respect to such Certificates.
Section 13.04. Payment of Certificates After Discharge of Trust
Agreement. Notwithstanding any provisions of this Trust Agreement, any moneys held by the
Trustee in trust for the payment of the Principal Amount relating to any Certificates, together with
interest thereon and remaining unclaimed for two years after the Principal Amount relating to all of
the Certificates has become due and payable (whether at maturity or upon call for redemption as
provided in this Trust Agreement), if such moneys were so held at such date, or two years after the
date of deposit of such moneys if deposited after said date when all of the Certificates became due
and payable, shall be repaid to the Town free from the trusts created by this Trust Agreement 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 Town as aforesaid, the Trustee may (at the cost
and direction of the Town) first mail to the Owners of Certificates which have not yet been paid, at
the addresses shown on the Registration Books a notice, in such form as may be deemed
appropriate by the Trustee with respect to the Certificates so payable and not presented and with
respect to the provisions relating to the repayment to the Town of the moneys held for the payment
thereof.
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ARTICLE XI
MISCELLANEOUS
Section 14.01. Records. The Trustee shall keep complete and accurate records of all
moneys received and disbursed by it under this Agreement, which shall be available for inspection
by the Town and the Agency or the agent of any of them, at any time during regular business hours
upon reasonable prior notice.
Section 14.02. Notices. All written notices to be given under this Agreement shall be
given by mail or personal delivery to the party entitled thereto at its address set forth below, or at
such address as the party may provide to the other parry in writing from time to time. Notice shall
be effective upon deposit in the United States mail, postage redeemed or, in the case of personal
delivery, upon delivery to the address set forth below:
If to the Town: Town of Los Gatos
110 E. Main Street
Los Gatos, California 95032
If to the Agency: Los Gatos Redevelopment Agency
110 E. Main Street
Los Gatos, California 95032
If to the Trustee: Bank of America National Trust and Savings
Association
One Embarcadero Center, 20th Floor
San Francisco, California 94111
Attention: Corporate Trust Division, N5 -145
Section 14.03. Governing Law, This Agreement shall be construed and governed
in accordance with the laws of the State.
Section 14.04. Binding Effect: Successors, This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and assigns. Whenever
in this Agreement either the Agency, the Town or the Trustee is named or referred to, such
reference shall be deemed to include the successors or assigns thereof, and all the covenants and
agreements in this Agreement contained by or on behalf of the Agency, the Town or the Trustee
shall bind and inure to the benefit of the respective successors and assigns thereof whether so
expressed or not.
Section 14.05. Execution in Counterparts, This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same agreement.
Section 14.06. Digtruction of Cancelled Certificates. Whenever in this
Agreement provision is made lot the surrender to or cancellation by the Trustee and the delivery to
the Town of any Certificates, he Trustee may, in lieu of such cancellation and delivery, destroy
such Certificates and deliver a certificate of such destruction to the Town.
Section 14.07. Headings. The headings or titles of the several Articles and Sections
hereof, and any table of contents appended to copies hereof, shall be solely for convenience of
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reference and shall not affect the meaning, construction or effect of this Agreement. All references
herein to "Articles ", "Sections ", and other subdivisions are to the corresponding Articles, Sections
or subdivisions of this Agreement; and the words "herein ", "hereof', "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular Article, Section or
subdivision hereof.
Section 14.08. Waiver of Notice. Whenever in this Agreement the giving of notice
by mail or otherwise is required, the giving of such notice may be waived in writing by the person
entitled to receive such notice and in any case the giving or receipt of such notice shall not be a
condition precedent to the validity of any action taken in reliance upon such waiver.
Section 14.09. Separability of Invalid Provisions. In case any one or more of
the provisions contained in this Agreement or in the Certificates shall for any reason be held to be
invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, and this Agreement shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein. The parties
hereto hereby declare that they would have entered into this Agreement and each and every other
section, paragraph, sentence, clause or phrase hereof and authorized the delivery of the Certificates
pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences,
clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.
Section 14.10. Payments on Other than a Business Day. If the date for making
any payment or the last date for performance of any act or the exercising of any right, as provided
in this Trust Agreement, shall not be a Business Day, such payment, with no interest accruing for
the period after the nominal date, may be made or act performed or right exercised on the next
succeeding Business Day with the same force and effect as if done on the nominal date provided
herewithin.
M
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Trustee
Authorized Officer
LOS GATOS REDEVELOPMENT AGENCY
Executive Director
(SEAL)
Attest:
Secretary
MARIAN V. COSGROVE TOWN OF LOS GATOS
(S E A L)
Attest:
Town Clerk
MARIAN V. COSGROVE
APPROVED AS TO FORM:
KATHERINE ANDERTON, AGENCY ATTORNEY
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Town Manager
EXHIBIT A
(FORM OF CERTIFICATE OF PARTICIPATION)
CERTIFICATE OF PARTICIPATION
(Parking Lot #4 Project)
Evidencing the Direct Undivided Fractional Interest
of the Owner Hereof in Lease Payments to be Made by the
TOWN OF LOS GATOS, CALIFORNIA
As Rental For Certain Property Pursuant to a Lease Agreement With the
LOS GATOS REDEVELOPMENT AGENCY
DATED: RATE OF INTEREST: MATURITY DATE: CUSIP
August 1, 1992
REGISTERED OWNER:
THIS IS TO CERTIFY THAT the Registered Owner identified above, or registered
assigns, as the registered owner (the "Registered Owner ") of this Certificate of Participation (the
"Certificate ") is the owner of an undivided fractional interest in Lease Payments under the Lease
Agreement dated as of August 1, 1992, by and between the Los Gatos Redevelopment Agency, a
public body, corporate and politic duly formed and acting under the laws of the State of California
(the "Agency "), and the Town of Los Gatos, a general law city and political subdivision duly
organized and existing under the Constitution and the laws of the State of California (the 'Town ")
(the "Lease Agreement ") which Lease Payments and certain other rights and interests under the
Lease Agreement have been assigned to Bank of America National Trust and Savings Association,
as trustee (the "Trustee "), having a corporate trust office in San Francisco, California (the
"Corporate Trust Office ").
The Registered Owner of this Certificate is entitled to receive, subject to the terms of the
Lease Agreement, on the Maturity Date identified above, the Principal Amount identified above,
representing a portion of the Lease Payments designated as principal, and to receive on February 1,
1993 and semiannually thereafter on August 1 and February 1 of each year (the 'Payment Dates ")
until payment in full of said principal, the Registered Owner's proportionate share of the Lease
Payments designated as interest coming due during the interest period immediately preceding each
of the Payment Dates; provided that interest with respect hereto shall be payable from the Payment
Date next preceding the date of execution of this Certificate unless (i) this Certificate is executed on
a Payment Date, in which event interest shall be payable from such Payment Date, or this
Certificate is executed after the close of business on the fifteenth (15th) day of the month
immediately preceding a Payment Date and prior to such Payment Date, in which event interest
shall be payable from such Payment Date, or (iii) unless this Certificate is executed on or before
February 1, 1993, in which event interest shall be payable from August 1, 1992. Said
proportionate share of the portion of the Lease Payments designated as interest is the result of the
multiplication of the aforesaid portion of the Lease Payments designated as principal by the Rate of
Interest per annum identified above. Said amounts are payable in lawful money of the United
States of America in the case of principal upon presentation hereof at the Corporate Trust Office of
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the Trustee, and in the case of interest by check or draft mailed by first class mail by the Trustee to
the Registered Owner hereof at the address as it appears on the registration books of the Trustee.
This Certificate has been executed and delivered by the Trustee pursuant to the terms of a
Trust Agreement by and among the Trustee, the Agency and the Town, dated as of August 1, 1992
(the "Trust Agreement "). The Town has certified that it is authorized to enter into the Lease
Agreement and the Trust Agreement under the constitution and laws of the State of California, for
the purpose of leasing certain land and public improvements from the Agency. Reference is hereby
made to the Lease Agreement and the Trust Agreement (copies of which are on file at the Corporate
Trust Office of the Trustee in San Francisco, California) for a description of the terms on which the
Certificates are delivered, the rights thereunder of the owners of the Certificates, the rights, duties
and immunities of the Trustee and the rights and obligations of the Town under the Lease
Agreement, to all of the provisions of the Lease Agreement and the Trust Agreement the Registered
Owner of this Certificate, by acceptance hereof, assents and agrees.
IN WITNESS WHEREOF, this Certificate has been executed and delivered by Bank of
Amer.ca National Trust and Savings Association, as trustee, acting pursuant to the Trust
Agreement.
Execution Date:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Trustee
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Authorized Signatory
(FORM OF ASSIGNMENT)
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Certificate and do(es) hereby irrevocably constitute and appoint
attorney, to transfer the same on the registration books of the Trustee, with full
power of substitution in the premises.
Dated:
Signature Guaranteed:
NOTICE: Signature(s) must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or
trust company
NOTICE: The signature on this assignment
must correspond with the name(s) as
written on the face of the within
Certificate in every particular without
alteration or enlargement or any
change whatsoever.
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(FORM OF REVERSE OF CERTIFICATE)
The Town is obligated under the Lease Agreement to pay Lease Payments from any source
of available funds. The obligation of the Town to pay the Lease Payments does not constitute an
obligation of the Town for which the Town is obligated to levy or pledge any form of taxation or
for which the Town has levied or pledged any form of taxation. The obligation of the Town to pay
Lease Payments does not constitute a debt of the Town, the State of California or any of its
political subdivisions, and does not constitute an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction.
To the extent and in the manner permitted by the terms of the Trust Agreement, the
provisions of the Trust Agreement may be amended by the parties thereto with the written consent
of the Registered Owner of at least sixty percent (60 %) in aggregate principal amount of the
Certificates then outstanding, and may be amended without such consent under certain
circumstances; provided that no such amendment shall adversely affect the interests of the
Registered Owner of the Certificates or shall impair the right of any Registered Owner to receive in
any case such Registered Owner's proportionate share of any Lease Payment in accordance with
such Registered Owner's Certificate.
This Certificate is transferable by the Registered Owner hereof, in person or by his attorney
duly authorized in writing, at the Corporate Trust Office of the Trustee, but only in the manner,
subject to the limitations and upon payment of the charges, if any, provided in the Trust Agreement
and upon surrender and cancellation of this Certificate. Upon such transfer a new Certificate or
Certificates, of authorized denomination or denominations and of the same maturity, for the same
aggregate principal amount will be delivered to the transferee in exchange herefor. The Town, the
Agency and the Trustee may treat the registered owner hereof as the absolute owner hereof for all
purposes, whether or not this Certificate shall be overdue, and the Town, the Agency and the
Trustee shall not be affected by any notice to the contrary.
The Certificates maturing on or before August 1, 2002, are not subject to optional
redemption prior to their respective stated maturities. The Certificates maturing on or after
August 1, 2003, are subject to optional redemption on any date on or after August 1, 2002, in
whole or in part, from prepayment of the Lease Payments made at the option of the Town pursuant
to Section 10.2 of the Lease Agreement, at a redemption price equal to the principal amount thereof
to be redeemed together with accrued interest to the redemption date plus a premium (expressed as
percentages of the principal amount of Certificates or portions thereof to be redeemed) set forth in
the following table, together with accrued interest to the date fixed for redemption:
Redemption
Redemption Dates Premium
August 1, 2002 and February 1, 2003 3%
August 1, 2003 and February 1, 2004 2%
August 1, 2004 and February 1, 2005 1%
August 1, 2005 and thereafter 0
The Certificates are also subject to redemption in whole or in part on any date, among
maturities on a pro rata basis and by lot within a maturity, from the Net Proceeds of insurance or
condemnation with respect to the Project and the Site, which Net Proceeds are deposited in the
Lease Payment Fund and credited towards the redemption of the Lease Payments made by the
Town pursuant to Section 10.3 of the Lease Agreement, at a redemption price equal to the principal
A-4
amount thereof to be redeemed together with accrued interest to the date fixed for redemption,
without premium.
The Certificates maturing on August 1, 2012, are subject to mandatory sinking fund
redemption on August 1 in each year commencing August 1, 2007, from the principal components
of the Lease Payments required to be paid by the Town pursuant to the Lease Agreement with
respect to each such redemption date, at a redemption price equal to the principal amount thereof to
be redeemed, together with accrued interest thereon to the date fixed for redemption, without
premium, as follows:
Redemption Date Principal
Au ust 1 Amount
2007
185,000
2008
195,000
2009
210,000
2010
225,000
2011
240,000
2012
255,000
The Certificates are also subject to redemption on any February 1 or August 1 occurring
after the Completion Date, at the option of the Town, at the par amount thereof, without premium,
to the extent there are funds remaining in the Construction Fund after the completion of the Project.
To the extent that the Trustee shall have redeemed Certificates in part pursuant to the
redemption provisions of Section 4.01 of the Trust Agreement, the amount of the Certificates to be
redeemed in subsequent years pursuant to this paragraph will be reduced to correspond to the
principal components of the Lease Payments prevailing following such redemption, determined as
set forth in Section 4.4(b) of the Lease Agreement.
As provided in the Trust Agreement, notice of redemption shall be mailed by first class
mail, not less than thirty (30) nor more than days before the redemption date, to the registered
owner of the Certificate to be redeemed, but neither failure to receive such notice nor any defect in
the notice so mailed shall affect the sufficiency of the proceedings for redemption.
If this Certificate is called for redemption and payment is duly provided therefor as
specified in the Trust Agreement, interest represented hereby shall cease to accrue from and after
the date fixed for redemption.
The Trustee has no obligation or liability to the Registered Owners to make payments of
principal or interest components of Lease Payments pertaining to the Certificates except from Lease
Payments paid to the Trustee and from the various funds and accounts established under the Trust
Agreement. The Trust Agreement provides the recitals of facts, covenants and agreements and this
Certificate shall be taken as statements, covenants and agreements of the Town and the Agency and
the Trustee assumes no responsibility for the correctness of the same. ,
A -5
EXHIBIT B
FORM OF CONSTRUCTION AND ACQUISITION DISBURSEMENT REQUEST
[Letterhead of Town of LOS GATOS]
Bank of America National Trust and Savings Association,
as Trustee
Attention: Corporate Trust Division
RE: Town of Los Gatos (Parking Lot #4 Project)
Dear Sirs:
In accordance with the terms of a Trust Agreement by and among you, the Los Gatos
Redevelopment Agency, and the Town of Los Gatos (the 'Town ") dated as of August 1, 1992 (the
"Agreement "), you are hereby authorized and requested to make immediate disbursement of funds
held by you for costs relating to the Project described in the Agreement. Capitalized terms used
herein and not otherwise defined have the meanings referred to in the Agreement.
The undersigned hereby certifies that:
(a) (i) This constitutes requisition number
for the captioned;
(ii) either (1) the name and address of the person, firm or corporation to whom
payment will be made is:
; or, (2) payment is to be made to the Town for costs to be reimbursed or to be paid;
(iii) the amount to be disbursed is
(iv) each obligation mentioned herein is a proper charge against the Construction
Fund, and has not been the basis of any previous disbursement; and
(v) the amount of this disbursement is for a Construction Cost, as defined in the
Trust Agreement.
(b) the following is a reasonably detailed description of the obligation to be paid:
(c) Attached to this Payment Request Form is a bill or statement of account for the
obligation to be paid.
TOWN OF LOS GATOS
Town Representative
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