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HomeMy WebLinkAbout; ; Carlsbad Public Improvement Corporation; 1988-06-01^ / IIP Slate C§(lfomia OFFICE OF THE SECRETARY OF STATE CORPORATION DIVISION I, MARCH FONG EU, Secretary of State of the State of California, hereby certify: That the annexed transcript has been compared with the corporate record on file in this office, of which it purports to be a copy, and that same is full, true and correct. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of Califomia this JUH-t1988 Secretary of State SEC/STATE FORM CE-107 13061-01 / GFB3924 1502951 ARTICLES OF INCORPORATION ENDORSED FILED in lh* oMk* o( •« Secrdonr •( State o( *• SM«* oi Coifomio mn -11988 MARCH FONG CU.SflGfetai|oi state CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION I. The name of this corporation is City of Carlsbad Public Improvement Corporation. II. A. This corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for charitable purposes. B. The purposes for which this corporation is formed are: (1) The specific and primary purposes for which this corporation is formed are: a. To render financial assistance to the City of Carlsbad, State of California (the "City"), by financing, refinancing, acquiring, constructing, improving, leasing and selling of buildings, building improvements, equipment, electrical, water, sewer, road and other public improvements, lands, and any other real or personal property for the benefit of residents of the boundaries of the City and surrounding areas. b. To acquire by lease, purchase or otherwise, real or personal property or any interest therein; to construct, reconstruct, modify, add to, improve or otherwise acquire or equip buildings, structures or improvements and (by sale, lease, sublease, leaseback, gift or otherwise) make any part or all of any such real or personal property available to or for the benefit of the residents of the boundaries of the City. c. To promote the common good and general welfare of the residents of the boundaries of the City, and the governmental enterprises in the boundaries of the City and surrounding areas by the acquisition of the real and personal property as hereinabove described. d. To borrow the necessary funds to pay the cost of financing, refinancing, acquiring, constructing, replacing, establishing, improving, maintaining, equipping and operating such properties and facilities for the herein described purposes, the indebtedness for which borrowed money may, but need not, be evidenced by securities of this corporation of any kind or character issued at any one or more times, which may be either unsecured or secured by any mortgage, trust deed, pledge, encumbrance or other lien upon any part or all of the properties and assets at any time then or thereafter owned or acquired by this corporation. e. To receive limited or conditional gifts or grants in trust, inter vivos, or by way of testamentary devises, bequests or grants in trust, or otherwise, funds of all kinds including property, both real, personal and mixed, whether principal or income, tangible or intangible, present or future, vested or contingent, in order to carry on the purposes of this corporation. (2) The general purposes and powers are to have and exercise all rights and powers now or hereafter conferred on nonprofit corporations under the laws of the State of California; provided, however, that this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the specific and primary purposes of this corporation; provided, further, that this corporation shall not have the power to, and shall not, do any act or conduct any activity, plan, scheme, design or course of conduct which in any way confiicts with Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and regulations promulgated pursuant to such Sections as they now exist or as they may hereafter be amended. III. The name and address in the State of California of this corporation's initial agent for service of process is: Mr. Raymond R. Patchett City Manager City of Carisbad 1200 Elm Avenue Carisbad, California 92008 IV. The principal offices for the transaction of the business of this corporation is located in the County of San Diego. The property of this corporation is irrevocably dedicated to charitable purposes and no part of the net income or assets of this corporation shall ever inure to the benefit of any director, officer or member thereof or to the benefit of any private person. A. This corporation is organized and operated by a group of public spirited citizens exclusively for charitable purposes within the meaning of Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. -2- B. Notwithstanding any other provision of these Articles, this corporation shall not carry on any other activities not permitted to be carried on by a corporation exempt form federal income tax under Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. C. No substantial part of the activities of this corporation shall consist of carrying on propaganda, or otherwise attempting to infiuence legislation, and this corporation shall not participate or intervene in any political campaign (including the publishing or distribution of statements) on behalf of any candidate for political office. VI. A. During the continuance of this corporation, it may distribute any of its assets to the United States of America, the State of California, or any political subdivision thereof, to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purpose and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. B. Upon the dissolution or winding up of this corporation, its assets remaining after payment of, or provision made for the payment of, all debts and liabilities of this corporation, shall be distributed to the United States of America, the State of California, or any political subdivision thereof, or to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purposes and which has established its tax-exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986. as amended. IN WITNESS WHEREOF, the undersigned, being the sole incorporator of this corporation, have executed these Articles of Incorporation, as of the 31st day of May, 1988. William H. Madison, Incorporator 1 hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed. William H. Madison, Incorporator -4- JONES HALL HILL & WHITE, A PROFESSIONAL LAW CORPORA.TION ATTORNEYS AT LAW CHARLES F. ADAMS STEPHEN R. GASAXEGGIO ANDREW C. HAIL, JR. KENNETH I. JONES PHILIP NELSON LEE WILLIAM H. MADISON BRIAN D. OUINT PAUL J. THIMMIG SHARON STANTON WHITE Novembers, 1988 FOUR EMBARCABERO CENTER SUITE 1950 SAN FRANCISCO 94111 (415) 391-5780 AUTOMATIC TELECOPIER (415) 391-5784 (415) 956-6308 Ms. Aletha L. Rautenkranz City Clerk City of Carlsbad 1200 Elm Avenue Carisbad, California 92008 Re: City of Carisbad Public Improvement Corporation Dear Ms. Rautenkranz: Please find enclosed two copies of the Organizational Transcript prepared for the captioned. Please note that these Transcripts still require the determination letters of the California Franchise Tax Board and the Intemal Revenue Service (Transcript Item Nos. 16 and 17, respectively). When you receive these determination letters, please forward copies to my attention. In any event, 1 will contact you in approximately three months to see if you have received these letters. In the interim, should you receive any correspondence with respect to the applications for exemption or if you have any questions, please do not hesitate to call. Very truly yours. jlenda F. Bell Project Coordinator Enclosure GFB8 cc: Mr. Raymond R. Patchett, City Manager 13061-01 JHHW:GFB GFB4110 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION SCHEDULE OF ORGANIZATIONAL TRANSCRIPT DOCUMENTS A. ORGANIZATIONAL DOCUMENTS 1. Articles of Incorporation filed with the Secretary of State of the State of California on June 1, 1988. California Corporate No. 1502951. 2. Action by Written Consent of Incorporator. 3. Statement By Domestic Nonprofit Corporation. 4. Certificate of Posting Notice of Special Meeting. 5. Resolution No. 88-1 "A Resolution Adopting Bylaws", adopted June 7, 1988, together with Bylaws of the City of Carlsbad Public Improvement Corporation. 6. Resolution No. 88-2, "A Resolution Electing Officers", adopted June 7, 1988. 7. Resolution No. 88-3, "A Resolution Appointing Time and Place of Regular Meetings", adopted June 7, 1988. 8. Resolution No. 88-4, "A Resolution Approving and Authorizing Execution and Filing of Exemption Application to State Franchise Tax Board", adopted June 7, 1988. 9. Resolution No. 88-5, "A Resolution Approving and Authorizing Execution and Filing of Various Federal Forms", adopted June 7, 1988. 10. Resolution No. 88-6, "Resolution of the Board of Directors of the Eureka School District Financing Corporation Approving Lease of Land and Permanent School Improvements to the Eureka School District and Approving Related Agreements, Official Statement and Sale of Not To Exceed $5,000,000 Certificates of Participation", adopted June 7, 1988. 11. Draft minutes of organizational meeting held June 7, 1988. B. TAX DOCUMENTS 12. California Form FTB 3500 - Exemption Application, together with evidence of mailing same. 13. Form 1024 - Application for Recognition of Exemption Under Section 501(a), together with evidence of mailing same. 14. Form SS-4 - Application for Employer Identification Number. 15. Form 2848 - Power of Attorney and Declaration of Representative. 16. California Franchise Tax Board Determination Letter. 17. Internal Revenue Service Determination Letter. -2- GFB3926/8 ACTION BY WRITTEN CONSENT OF INCORPORATOR CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION The undersigned, as sole incorporator of this public benefit corporation, took the below stated action on June 7, at 6:00 p.m., at the offices of the City of Carisbad, 1200 Elm Avenue, Carisbad, California, pursuant to Section 5134 of the California Corporations Code for the purpose of electing initial directors and setting the time and place for the organizational meeting. The Articles of Incorporation were duly filed with the Secretary of State of California on June 1, 1988, and that corporation number 1502951 was assigned to this Corporation. RESOLVED, that the following persons be selected as the initial directors of the corporation: Claude A. Lewis Ann J. Kulchin John J. Mamaux Mark V. Pettine Eric Larson BE IT FURTHER RESOLVED, that the organizational meeting of the corporation be held on June 7, 1988 at 6:00 p.m., at the offices of the City of Carisbad, 1200 Elm Avenue, Carisbad, California, and that the notice of such meeting sent to the initial directors and other interested persons by Aletha L. Rautenkranz, City Clerk of the City of Carisbad, is hereby approved and ratified. William H. Madison, Incorporator P.O. Box 2830 Sacramento. CA 95812 Phone: (916) 445-2020 Mt ci Olaltfnntm ^ccrctar^ of ^tate STATEMENT BY DOMESTIC NONPROFIT CORPORATION THIS STATEMENT MUST BE FILED WITH CALIFORNIA SECRETARY OF STATE (SECTIONS 6210. 8210, 9660 CORPORATIONS CODE) DUE DATE SEPTEMBER 1 1988 .1592951 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION DO NOT ALTER PREPRINTED NAME. IF ITEM 1 IS BLANK. PLEASE ENTER CORPORATE NAME 88-431267 ENDORSED PILED In fh» offk* of** Swtqry of Sfcrto of KM Stol* of Calif omio OCT 1 1988 mOi ^ Qi, Semtatyof Stttt DO NOT WRrrE IN THIS SPACE PLEASE READ INSTRUCTIONS ON BACK OF FORM PLEASE TYPE OR USE BLACK INK WHICH WOULD BE SUITABLE FOR MICROFILMING FEE FOR FILING THIS STATEMENT S2 50 THE CORPORATION NAMED HEREIN. ORGANIZED UNDER THE LAWS OF THE STATE OF CALIFORNIA, MAKES THE FOLLOWING STATEMENT: 2. STKBET ADDRESS OP miriCIPAL OmCB (IP NONE. COMnjKTX 3-3B) 1200 Elm Avenue (DO NOT USB P.O. BOX NO.) SUITE Oil ROOM n/a aA. Carlsbad, California crrv AND STATE 2B. 92008 ZIP COOE 3. MAUJNa ADOWBSS (0PT10NAU n/a •um OR ROOM n/a 3A. n/a cmr AND STATE 3m. n/a ZIP COOE NAMES OF THE FOLLOWING OFFICERS ARE: 4. Claude A. Lewis CHIEF EXECUTIVE OPPICER 1200 Elm Avenue BUSINESS OR RESIDENCE AODRESS (DO NOT USE P.O. BOX) Carlsbad, CA CITY AND STATE 92008 ZIP CODE 5. Aletha L. Rautenkranz SECRETARY SA. 1200 Elm Avenue BUSINESS OR RESIDENCE ADDRESS (DO NOT USE P.O. BOX) SB. Carlsbad, CA cmr AND STATE 92008 ZIP CODE James Elliott CHKP PINANCIAL OPPICER SA. 1200 Elm Avenue BUSINESS OR RESIDENCE ADDRESS (DO NOT USE P.O. BOX) 6B. Carlsbad, CA cmr AND STATE 6C. 92008 AQENT POR SERVICE OP PROCESS: Aletha L. Rautenkranz, Secretary, c/o City of Carlsbad 1200 Elm Avenue, Carlsbad, CA 92008 CAUFORNIA BUSINESS OR RESIDENCE AODRESS IF AN INDIVIDUAL (DO NOT USE P.O. BOX) ONLY ONE AGENT CAN BE NAMED. DO NOT INCLUDE AODRESS IF ASENT IS A CORPORATION. 8. I DECLARE THAT I HAVE EXAMINED THIS STATEMENT AND TO THE BEST OP MY KNOWLEDGE AND BEUEF. rr IS TRUE. CORRECT AND COMPLETE. Secretary Aletha L. Rautenkranz TYPE OR PRINT NAME OF SIGNING OFFICER OR AGENT SIGNATURE / FORM S/O 100 NOTICE OF SPECIAL MEETING CITY OF CARLSBAD PUBLIC IMPROVEMENT GORPORATION NOTICE IS HEREBY GIVEN that the Board of Directors of the City of Carlsbad Public Improvement Corporation, a nonprofit public benefit corporation organized for public purposes (the "Corporation") will hold a special meeting on Tuesday, June 7, 1988, at the hour of 6:00 p.m., or shortly thereafter, at the offices of the City of Carlsbad, 1200 Elm Avenue, Carlsbad, California. The business to be transacted at said meeting consists of: (1) the approval of bylaws of the Corporation; (2) the election of officers; (3) the designation of time and place of regular meetings; (4) the authorization to file various state and federal forms and other organizational matters; (5) the approval of the Corporation's participation in the financing of Hosp Grove for the City of Carlsbad; and (6) all matters relating to the above. Dated: ^ ^^ '^^^ CITY OF CARLSBAD PUBLIC / IMPROVEMENT CORPORATION By (UJU^ / (?c Aletha L. Rautenkranz, Cit>/Clerk City of Carlsbad CERTIFICATE OF POSTING CERTIFICATION STATE OF CALIFORNIA) COUNTY OF SAN DIEGO) ss. I, ALETHA L. RAUTENKRANZ, Secretary of the City of Carlsbad Public Improvement Corporation, hereby certify that I have compared the foregoing copy of the Notice of Special Meeting , which original is on file in the City Clerk's Office , of the City of Carlsbad; that the same contains a true and correct transcript therefrom. WITNESS my hand and the seal of said Corporation, this 15th day of June , 1988 , Secretai ALETHA L. RAUTENKRANZ, SecretJiry (SEAL) •< EXHIBIT 1 GFB3925 / 3 RESOLUTION NO. 88-1 A RESOLUTION ADOPTING BYLAWS CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION RESOLVED, by the Board of Directors of the City of Carlsbaci Public Improvement Corporation, that the Bylaws of the City of Carlsbaci Public Improvement Corporation, in the form hereto attached and incorporated herein by reference, are hereby adopted and approved and shall stand as the Bylaws of this Corporation until valid amendment thereof. * * • * I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the City of Carlsbad Public Improvement Corporation, at a meeting thereof duly held on the 7th day of June, 1988, by the following vote of the Directors thereof: AYES, and in favor thereof, Directors: Lewis, Kulchin, Pettine, Mamaux and Larson NOES, Directors: None ABSENT, Directors: None Secretary 13061-01 JHHW:GFB 04/22/88 GFB3923 dfs 06/20/88 BYLAWS OF CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION ARTICLE I Offices and Seal Section 1. Offices. The principal office of the Corporation for the transaction of business shall be 1200 Bm Avenue. Carlsbad, California 92008. The Board of Directors may, however, fix and change from time to time the principal office from one location to another by noting the change of address m the minutes of the meeting of the Board of Directors at which the address was fixed or changed. The fixing or changing of such address shall not be deemed an amendment to these Bylaws. Section 2. Seal. The Corporation shall have a seal, consisting of two (2) concentric circles with the words "City of Carlsbad Public Improvement Corporation", with the date of incorporation of the Corporation. ARTICLE II Directors Section 1. Powers. Subject to the limitations of the Articles of Incorporation of the Corporation, the terms of these Bylaws, and the laws of the State of California, the powers of the Corporation shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. Section 2. Nifmber. The Coiporation shall have five (6) Directors. Directors are collectively to be known as the Board of Directors. The number of Directors may be changed by a Bylaw or amendment thereof duly adopted by the Board of Directors. Section 3. Selection, Tenure of Office and Vacancies. The individuals who act as the members of the City Council of the City of Carlsbad (the "City") shall constitute the Board of Directors of the Corporation, and each member of the City Council shall be and remain a member of the Board of Directors of the Corporation for so long as such member remains a member of the City Council. Section 4. Compensation. Directors shall serve without compensation but each Director may be reimbursed his or her necessary and actual expenses, Including travel incident to his services as Director, pursuant to resolution of the Board of Directors. Any Director may elect, however, to decline said reimbursement. Section 5. Organization Meetings. Immediately following the annual meeting of the Board of Directors or any special meeting of the Board of Directors at which Directors shall have been elected, the Directors shall meet for the purpose of organizing the Board, the election of officers and the transaction of such business as may come before the meeting. Pending such organization meeting, all officers of the Corporation shall hold over, except any officer required by law or these Bylaws to be a Director and who does not qualify as a Director. A Director elected at such meeting of the Board of Directors shall forthwith become a member of the Board of Directors for purposes of such organization. In the event such an organizational meeting shall not be held immediately following such meeting of the Board of Directors, it shall thereafter be held at the next regular meeting or at a special meeting and notice thereof shall be given in the manner provided in Section 7 of this Article for notice of special meetings. Section 6. Regular and Organizational Meetings. Regular meetings of the Board of Directors shall be held at such time as the Board may fix by resolution from time to time; provided, however, that at least one regular meeting shall be held each year and such meetings shall, in ati respects, conform to provisions of the Ralph M. Brown Act, being Sections 54950 through 54961 of the Government Code of the State of California (the "Brown Act"). No notice of any organizational meeting of the Board of Directors, held immediately following the annual meeting of the Board of Directors or on or after any special meeting of the Board of Directors shall have been elected, need be given; provided, that if such an organizational meeting is not held immediately following such meeting of the Board of Directors, then notice thereof shall be given in a manner provided in Section 7 of this Article, in the same manner as notice of special meetings. Section 7. Special Meetings. Special meetings of the Board of Directors shall be called, noticed and held in accordance with the provisions of Section 54956 of the Brown Act. Section 8. Quorum. A quorunri shall consist of a majority of the members of the Board of Directors unless a greater number is expressly required by statute, by the Articles of Incorporation of the Corporation, or by these Bylaws. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present, shall be the act of the Board of Directors. Section 9. Order of Business. The order of busmess at the regular meeting of the Board of Directors and, so far as possible, at all other meetings of the Board of Directors, shall be essentially as follows, except as otherwise determined by the Directors at such meeting: (a) Report on the number of Directors present in person in order to determine the existence of a quorum. -2- (b) Reading of the notice of the meeting and proof of the delivery or mailing thereof, or the waiver or waivers of notice of the meeting then filed, as the case may be. (c) Reading of unapproved minutes of previous meetings of the Board of Directors and the taking of action with respect to approval thereof. (d) Presentation and consideration of reports of officers and committees. (e) Unfinished business. (f) New business. (g) Adjournment. Section 10. Resignation of Directors. Any Director of the Corporation may resign at any time by giving written notice to the President or to the Board of Directors; provided, however, in the event of such resignation, such Director's position shall remain vacant until a new member of the City Council is elected to fill such Director's position. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 11. Nonliability for Debts. The private property of the Directors shall be exempt from execution or other liability for any debts, liabilities or obligations of the Corporation and no Director shall be liable or responsible for any debts, liabilities or obligations of the Corporation. Section 12. Indemnity by Corporation for Litigation Expenses of Officer, Director or Employee. Should any Director, officer or employee of the Corporation be sued, either alone or with others, because he is or was a director, officer or employee of the Corporation, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or out of any alleged wrongful act against the Corporation or by the Corporation, indemnity for his reasonable expenses, including attorneys' fees incurred in the defense of the proceedings, may be assessed against the Corporation, its receiver, or its director by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person reasonably believed to be in the best interests of the Corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlawful. The amount of such indemnity shall be so much of the expenses, including attorneys' fees, incurred in the defense of the proceeding, as the court determines and finds to be reasonable. -3- ARTICLE III Officers Section 1. Officers. The officers of the Corporation shall be a President, a Vice President, a Secretary and such other officers as the Board of Directors may appoint. When duties do not conflict, one person, other than the President, may hold more than one of these offices. The Corporation may also have, at the discretion of the Board of Directors, one or more additional Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. In addition to such officers, the City Manager of the City shall act ex officio as the Executive Director of the Corporation; the chief financial officer of the City shall act ex officio as the Treasurer of the Corporation; the City Clerk of the City shall act ex officio as the Secretary of the Corporation; and the City Attorney of the City shall act ex officio as legal counsel to the Corporation. Section 2. Election of Officers. The officers of the Corporation (other than the Executive Director, Treasurer, Secretary and legal counsel to the Corporation) shall be chosen by and shall serve at the pleasure of the Board of Directors and each shall hold office until any such officer shall resign or shall be removed or otherwise disqualified to serve or any successor shall be elected and qualified to serve. Section 3. Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those hereinabove mentioned as the business of the Corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in these Bylaws, or as the Board of Directors from time to time may authorize or determine. Section 4. Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the Directors then in office at any regular or special meeting of the Board, or, except in the case of an officer chosen by the Board of Directors, by any officers upon whom such power of removal may be conferred by the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any Directors until such time as a successor for said office has been elected and appointed. Section 5. President. The President shall preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or be prescribed by the Bylaws. The President shall also be the chief corporate officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the Board of Directors. He shall be ex officio member of all standing committees, and shall have the general powers and duties of management usually vested in the office of President of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or by these Bylaws. -4- Section 6. Vice President. In the absence or disability of the President, the Vice President, or the Vice Presidents in order of their ranks as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President and when so acting shall have all the powers of and be subject to all of the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may from time to time be prescribed for them, respectively, by the Board of Directors or by these Bylaws. Section 7. Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Directors' meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors of the Corporation, shall keep the corporate records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these Bylaws. Section 8. Treasurer. The Treasurer shall keep and maintain or cause to be kept and maintained adequate and correct amounts of its assets, liabilities, receipts, disbursements, gains and losses. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all monies and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Directors. He shall disburse the funds of the Corporation as shall be ordered by the Board of Directors, shall render to the President and the Directors whenever they shall request it, an account of all of his transactions as Treasurer and of the financial condition of the Corporation, shall take proper vouchers for all disbursements of the funds of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these Bylaws. Section 9. Executive Director. The Executive Director of the Corporation shall have such powers and perform such duties as may from time to time be prescribed by the Board of Directors or by these Bylaws. Section 10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and the Assistant Treasurers in the order of their seniority as specified by the Directors shall, in the absence or disability of the Secretary or the Treasurer, respectively, perform the duties and exercise the powers of the Secretary or Treasurer and shall perform such duties as the Board of Directors shall prescribe. ARTICLE IV Objects and Purposes Section 1. Nature of Objects and Purposes. The business of the Corporation is to be operated and conducted in the promotion of its objects and purposes as set forth in Article II of its Articles of Incorporation. -5- Section 2. Dissolution. The Corporation may be dissolved by vote of the Directors, or by the action of the Board of Directors in accordance with the provisions of California law. Upon the dissolution of the Corporation, and after payment or provision for payment, all debts and liabilities, the assets of the Corporation shall be distributed to the City. If for any reason the City is unable or unwilling to accept the assets of the Corporation, said assets will be distributed to the Federal Government; to a state or local government for public purposes; or to a nonprofit fund, foundation, or corporation which is organized and operated for charitable purposes and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. Section 3. Merger. The Corporation may merge with other corporations organized solely for nonprofit purposes, qualified and exempt from Federal taxation pursuant to Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and from State taxation, upon compliance with the provisions of California law relating to merger and consolidation. ARTICLE V General Provisions Section 1. Payment of Money, Signatures. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payable to the Corporation and any and all securities owned by or held by the Corporation requiring signature for transfer shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by the Board of Directors. Section 2. Execution of Contracts. The Board of Directors, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 3. Fiscal Year. The fiscal year of the Corporation shall commence on the 1st day of July of each year and shall end on the 30th day of June of the next succeeding year. Section 4. Annual Audit. The affairs and financial condition of the Corporation shall be audited annually at the end of each fiscal year (as provided in Section 3 above) commencing with fiscal year 1988-1989 by an independent certified public accountant selected by the Board of Directors and a written report of such audit and appropriate financial statements shall be submitted to the Board of Directors prior to the next regular meeting of the Board of Directors of the Corporation following the completion of such -6- audit. Additional audits may be authorized as considered necessary or desirable by the Board of Directors. ARTICLE VI Exempt Activities Notwithstanding any other provisions of these Bylaws, no Director, officer, employee or representative of the Corporation shall take any action or carry on any activity by or on behalf of the Corporation not permitted to be taken or carried on by an organization exempt under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder as they now exist or as they may hereafter be amended. ARTICLE Vll Amendment to Bylaws These Bylaws may be amended by majority vote of the Board of Directors. ADOPTED by the Board of Directors of the City of Carlsbad Public Improvement Corporation on June 7, 1988. Secretary -7- SECRETARY'S CERTIFICATE I, the undersigned, do hereby certify: 1. That 1 am the duly elected and acting Secretary of the City of Carlsbad Public Improvement Corporation, a California nonprofit public benefit corporation; and 2. That the foregoing Bylaws constitute a full, true and correct copy of the Bylaws of said Corporation in full force and effect as of the date hereof. IN WITNESS WHEREOF, 1 have hereunto subscribed my name this day of CTu/Oc^ , 191^ By dA^^\ Secretary -8- GFB3925 / 4 RESOLUTION NO. 88-2 A RESOLUTION ELECTING OFFICERS CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION RESOLVED, by the Directors of the City of Carlsbad Public Improvement Corporation, that the following persons are elected to the offices set forth opposite their names below, as officers of the Corporation, to serve until the election and qualification of their successors, as provided in Article 111, Section 2 of the Bylaws of the Corporation. Name Office Claude A. Lewis President Ann J. Kulchin Vice President Aletha L. Rautenkranz Secretary RESOLVED, by the Directors of the City of Carlsbad Public Improvement Corporation, that, pursuant to Article 111, Section 1 of the Bylaws of the City of Carlsbad Public Improvement Corporation, Ray Patchett, City Manager of the City of Carlsbad shall be the Executive Director of this Corporation, James Elliott, Finance Director of the City of Carlsbad shall be the Treasurer of this Corporation, Aletha L. Rautenkranz, City Clerk of the City of Carlsbad shall be the Secretary of this Corporation, and Vincent F. Biondo, City Attorney of the City of Carlsbad shall act as legal counsel to this Corporation. 1 hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the City of Carlsbad Public Improvement Corporation, at a meeting thereof duly held on the 7th day of June, 1988, by the following vote of the Directors thereof: AYES, and in favor thereof. Directors: Lewis, Kulchin, Pettine, Mamaux and Larson NOES, Directors: None ABSENT, Directors: None Secretary \ EXHIBIT 3 GFB3925/5 RESOLUTION NO. 88-3 A RESOLUTION APPOINTING TIME AND PLACE OF REGULAR MEETINGS CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION RESOLVED, by the Board of Directors of the City of Carlsbad Public Improvement Corporation that the first Tuesday in April of each year at the hour of six o'clock p.m., at the offices of the City of Carlsbad, 1200 Elm Avenue, Carlsbad, California, is hereby appointed as the time and place for the regular meeting of this Board pursuant to Article II, Section 6 of the Bylaws of this Corporation. I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the City of Carlsbad Public Improvement Corporation, at a meeting thereof duly held on the 7th day of June, 1988, by the following vote of the Directors thereof: AYES, and in favor thereof. Directors: Lewis, Kulchin, Pettine, Mamaux and Larson NOES, Directors: None ABSENT, Directors: None Secretary \ EXHIBIT 4 GFB3925/6 RESOLUTION NO. 88-4 A RESOLUTION APPROVING AND AUTHORIZING EXECUTION AND FILING OF EXEMPTION APPLICATION TO STATE FRANCHISE TAX BOARD CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION RESOLVED, by the Board of Directors of the City of Carlsbad Public Improvement Corporation, that that certain Exemption Application to the State Franchise Tax Board (Form FTB3500), Is hereby approved and Jones Hall Hill & White, A Professional Law Corporation, Is hereby authorized to complete said Application and the Secretary is hereby authorized to execute said completed Application and directed to cause the filing of said Application with the State of California Franchise Tax Board. BE IT FURTHER RESOLVED, that the Secretary of the Corporation be and is hereby designated the "person to contact" of this Corporation for purposes of the filing of Form No. FTB3500. ***** I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the City of Carlsbad Public Improvement Corporation, at a meeting thereof duly held on the 7th day of June, 1988, by the following vote of the Directors thereof: AYES, and in favor thereof. Directors: Lewis, Kulchin, Pettine, Mamaux and Larson NOES, Directors: None ABSENT, Directors: None /]/2c/:i(^^ Secretary EXHIBIT 5 GFB3925/7 RESOLUTION NO. 88-5 A RESOLUTION APPROVING AND AUTHORIZING EXECUTION AND FILING OF VARIOUS FEDERAL FORMS CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATiON RESOLVED, by the Board of Directors of the City of Carlsbad Public Improvement Corporation, that Federal Forms Nos. 1024 (Application for Recognition of Exemption under Section 501(c)(4)), 2848 (Power of Attorney), SS-4 (Application for Employee Identification Number) and Form 8718 (User Fee for Exempt Organization Determination Letter Request), are hereby approved and that Jones Hall Hill & White, A Professional Law Corporation, special counsel to the Corporation, is hereby authorized to complete said Forms and the Secretary is authorized to execute said Forms and is authorized to cause the appropriate filing of said Forms. BE IT FURTHER RESOLVED, that the Secretary of the Corporation be and is hereby designated the "person to contact" of this Corporation for purposes of the filing of Federal Form No. 1024. I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of Directors of the City of Carlsbad Public Improvement Corporation, at a meeting thereof duly held on the 7th day of June, 1988, by the following vote of the Directors thereof: AYES, and in favor thereof. Directors: Lewis, Kulchin, Pettine, Mamaux and Larson NOES, Directors: None ABSENT, Directors: None Secretary 3tary / JHHW:WHM:pch ««?13/88 pch ^5/20/88' pch 05/25/88 ^5/2 EXHIBIT 6 CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION RESOLUTION NO. 88-6 A RESOLUTION APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTJilN LEASE FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO RESOLVED, by the City of Carlsbad Public Improvement Corporation (the "Corporation"): WHEREAS, the City of Carlsbad (the "City") has issued notes (the "Notes") in the principal amount of $6,555,000 to acquire approximately 52 acres of a eucalyptus grove commonly known as "Hosp Grove" for general municipal purposes and presently zoned open space; and WHEREAS, the Notes mature on June 30, 1988, and the City wishes to complete permanent financing for Hosp Grove and improvements to be made thereon; and WHEREAS, the City and the Corporation proposes to enter into a lease agreement dated as of June 1, 1988 (the "Lease Agreement"), whereby the City will lease Hosp Grove (the "Site") to the Corporation, and the Corporation will construct certain improvements to the Site (the "Project"), and will lease the Project and the Site to the City, and the City will lease the Project and the Site from the Corporation; and WHEREAS, for the purpose of obtaining the moneys required to be deposited by it with the Trustee to pay the Notes at maturity and to pay for financing the construction of the Project, the Corporation proposes to assign and transfer certain of its rights under the 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 deUver certificates of participation, each evidencing a fractional interest in the lease payments made by the City under the Lease Agreement, to provide the moneys required herein to be deposited by the Corporation; and WHEREAS, in connection therewith, it is in the pubUc interest and for the pubUc benefit that the Corporation authorize and direct execution of the Lease Agreement and certain other financing documents in connection therewith; and WHEREAS, pursuant to the City's authorization, Rauscher Pierce Refsnes, Inc. (the "Underwriter") proposes to underwrite the financing and will ptirchase the certificates of participation described below; and WHEREAS, the documents below specified have been filed with the Corporation, and the members of the Corporation, with the aid of its staff, have reviewed said documents; and NOW, THEREFORE, it is hereby ORDERED and DETERMINED, as follows: SECTION 1. The below-enumerated documents be and are hereby approved, and the President, or the Vice-President, are hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, and the Secretary of the Corporation is hereby authorized and directed to attest to such official's signature: (a) a lease agreement, relating to the Site and the Project, between the Corporation, as lessor, and the City, as lessee (the "Lease Agreement"); (b) a trust agreement, by and among the Corporation, the City and The Bank of Califomia, National Association, Cahfomia, as tmstee (the "Tmstee"), relating to the financing and the execution and delivery of certificates of participation evidencing the proportionate interests of the owners thereof in lease payments to be made by the City under the Lease Agreement (the "Certificates of Participation"); (c) an agency agreement, by and between the Corporation and the City, pursuant to which the Corporation will appoint the City to act as its agent for the purposes of the constmction of the Project; and (d) an assignment agreement, by and between the Corporation and the Tmstee, pursuant to which the Corporation will assign certain of its rights under the Lease Agreement, including its right to receive lease payments thereunder, to the Tmstee. SECTION 2. The President, Vice-President, , Secretary and other officials of the Corporation 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 lease financing herein authorized. ************ -2- I hereby certify that the foregoing resolution was duly adopted at a meeting of the City of Carlsbad Pubhc Improvement Corporation held on the 7th day of June, 1988, by the following vote: AYES, and in favor of: Lewis, Kulchin, Pettine, Mamaux and Larson NOES: None ABSENT: None Secretary ' -3- MINUTES P Meeting of: Date of Meeting: Time of Meeting: P.lace of Meeting: CARLSBAD PUBLIC IMPROVEMENT CORPORATION Oune 7, 1988 6:00 p.m. City Council Chambers MEMBERS The City Council assumed its role as the Board of Directors of the Carlsbad Public Improvement Corporation at 8:48 p.m., with the following Directors present: Directors Lewis, Kulchin, Pettine, Mamaux and Larson. Absent: None. ORGANIZATIONAL MEETING: Following an explanation of the actions to be taken, the Board of Directors adopted the following Resolutions: (one motion) RESOLUTION NO. 88-1, ADOPTING BYLAWS OF THE CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION. RESOLUTION NO. 88-2, ELECTING OFFICERS OF THE CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION; said officers being Claude Lewis as President, Ann Kulchin as Vice- President and Lee Rautenkranz as Secretary. RESOLUTION NO. 88-3, APPOINTING TIME AND PLACE OF REGULAR MEETINGS OF THE CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION; said meetings to occur on the first Tuesday of April at 6:00 p.m., in the City Hall Offices located at 1200 Elm Avenue, Carlsbad. RESOLUTION NO. 88-4, APPROVING AND AUTHORIZING EXECUTION AND FILING OF EXEMPTION APPLICATION TO STATE FRANCHISE TAX BOARD FOR THE CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION. RESOLUTION NO. 88-5, APPROVING AND AUTHORIZING EXECUTION AND FILING OF VARIOUS FEDERAL FORMS FOR THE CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION. RESOLUTION NO. 88-6, APPROVING, AUTHORIZING AND DIRECTING EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO. ADJOURNMENT: By proper irotion, the Meeting of June 7, 1988, was adjourned at 8:53 p.m. Respectfully submitted, ALETHA L. RAUTENKRANZ Secretary to the Corporation Harriett Babbitt Minutes Clerk Lewis Kulchin Pettine Mamaux Larson CERTIFICATION STATE OF CALIFORNIA) COUNTY OF SAN DIEGO) ss. I, ALETHA L. RAUTENKRANZ, Secretary of the City of Carlsbad Public Improvement Corporation, hereby certify that I have compared the foregoing copy of the Draft Minutes of the Corporation's 6/7/88 Meeting , which original is on file in the City Clerk's Office , of the City of Carlsbad; that the same contains a true and correct transcript therefrom. WITNESS my hand and the seal of said Corporation, this 17th day of June , 1988 ALETHA L. RAUTENKRANZ, Secretary | (SEAL) ^•nd*?^"' '' ' •ddltloml Mrvipw a—ina, and complata iMmt 3 •JS*" ** ""ETURN TO - SpM* on th* r«<«rM ild*. F.llur. to do thit will prmfmnt thlt cj^from balno r«urr«d to you. lli._ttium r^.lot f- will nrowic. th. „l..'::f'':Sr:lSlL* 3SKSS3Jl"0'* ymr^^^y^. *• followlnfl MTvicM ara aral&Mai Conjult ponnanar tor taa* and chack box(ai) for additional larvlcad) r*qu**tK> 1. ^ Show to whom dalhrarad data, and addra****'t addras. 2. D Ractrlctad Dallvary ^(Extra charge)\ i(Extra charged 3. Article Addranad to: 4. Article Nuinber A^^/L 03-7 Cf^O 3. Article Addranad to: Type of Sarvioe: • Ragittared • liwired <3>0Mtifi*d • COD • Exprm Mall 3. Article Addranad to: AhMyt obtain ttgnatiire of •rtilniiii Of ananglyd DATE DELIVERED requested artd fee paid) 1988 ^] «2' 4 DOMESTIC RETURN RECEIPT UNITED STATES POSTAL SERVICE OFFICIAL BUSINESS SENDER INSTRUCTIONS Print your nam*, address, and ZIP Code in tha space below. • ^Mnplete ittmt 1, 2, 3, and 4 on the raverae. • Attach to front of articl* if spaca parmits, otherwise affix to baek of articia. • Endorse articte "Return Receipt Raquaatad" adjacent to number. RETURN TO PENALTY FOfl PRIVATE USE. $300 Pr' t Sender's name, addrass, and ZIP Code in the spaca below. <p^x^/r/U^ ^ //)A;^ (^^/) • - - , f ~~~ ~ ^ jh4M^y.<^ ^ ^^/// 00 NOT USE THESE SPACES Serial No. Amount Remitted Exemption Application CALIFORNIA FORM 3500 ^Every organization filing application for exen?tption from Califomia corporation franchise tax or income tax must fumisfi ttie information and data specified and pay the "Required $25.00 Application Fee." If the organization fails to comply with these requirements, the application will be denied. Revenue and Taxation Code Section 26451.3 provides that this application, together with any supporting documents, shall be open to pubiic inspection if the exemption is granted. Upon request of the organization, public disclosure of such documents may be withheld if such disclosure would adversely affect the organization or national defense. Name ol organization as shown in your organization's articles or declaration ot trust City of Carlsbad Public Improvement Corporation Federal Employer Identification Number applied for Mailing address 1200 Elm Avenue Day Time Teleptione Numlier (619) 434-2808 City Carlsbad State California ZIP Code 92008 Name of representative to tie contacted regarding additional requirements or information Aletha L. Rautenkranz, Secretary Day Time Teleptione Numlier (619) 434-2808 Representative's mailing address c/o City of Carlsbad, 1200 Elm Avenue City Carlsbad State California ZIP Code 92008 ALL r 0) I 01 o c n 'E 01 OC h cs < applicants complete lines 1 through 7 la Enter Califomia Revenue and Taxation Code section untler whicti exemption is claimed. See Instruction C Primary activity of organization: Enable Citv of Carlsbad to finance public works. u b 2a What is the forni of the organization? H Incorporated D Now being incorporated D Unincorporated association • Trust (1) Date organized—06/07/88 If incorporated, fumish the following information: (1) Date incorporated 06/01/88 (2) Califomia Corporate No. (3) If incorporated in another state, identify the state. _nZa 1502951 3a b c 4a b 5 6a Has this organizafion or its predecessor previously applied for exemption? D Yes EH No If "Yes," dwGk fte appropriate box(es) and enter either "Granted" or "Denied" and also enter the date the exemption was "Granted" or "Denied" after the box(es) checked • Califomia Date • Federal Date • Other State Date Furnish copies of any determination letters received. Has the organization filed Federal Income tax returns? D Yes IS No If "Yes," state type of returns and years filed. 1 5 Annual Accounting Period (Must end on last day of the month). June 30 Is this a new organization? If "No," attach a statement indicating the name of the predecessor(s), the period during which if was in existence, and the reasons for its termination Is this a membership organization? If "Yes," attach a statement which explains fully the qualifications for members, the different classes of membership, the number of members in each class, and the voting rights and privileges accorded each class Has the organization made, or are there plans to make, any distribution of it's property or surplus to officers or members? If "Yes," attach a statement containing full details Will any of the incorporators share any facilities with the organization? If "Yes," attach a detailed explanation Will any property be rented, purchased, or transferred in any way from any of the incorporators? If "Ves," attach a detailed explanation Will any promoter, incorporator, founder, or member be employed by the organization? If "Yes," fumish complete details, including duties, responsibilities, qualifications, and compensation •• Will any member of the Board of Directors be compensated for services other than services performed as a board member, e.g. officer, and/or employee? If "Yes," furnish the name(s) of the directorfs), and the amount(s) of compensation for each. Also list the names of the other directors, indicating their blood or marriage relationship, if any, to the compensated director(s) Be Sure To Include the $25.00 Application Fee. Do Not Send Cash. Allow 60 Days for Processing Yes No X X X X X X X Under penalties ot perjury, I declare that I have examined this application, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete. 1 /OA<-/FP^ DATE Garlsbad, CA PLACE SIGNED SIGNATURE OF OFFICER OR REPRESENTATIVE TITLE [Versions of this form prior to 1987 are obsolete and shoultj not be used, please destroy.] Secretary Form 3500 1987 Side 1 Attach the following applicable items or the application will not be processed. a If incorporated, a copy of the endorsed articles of incorporation and all subsequent amendments; if now being incorporated, proposed articles must be submitted to the Secretary of State with application; if not incorporated, a copy of the constitution, articles of association, declaration of trust, or other documents setting forth the aims and purposes which is signed by the principal officers or trustees. b A copy of the bylaws, proposed bylaws, or other code of regulations, c Complete statements of receipts and expenditures, assets and liabilities for each accounting period that the organization was in existence and for which exemption is requested. Organizations that have not commenced operations or have been operating less than one year, see item "d" below. d A proposed budget must be attached showing, the sources of income and areas of expenditures for the first year of operation of newly formed organizations or those commencing operations. The budget is required before the application will be processed and should be based upon the most reasonable expectations. e A statement explaining the specific purposes for which the organization was formed. (Do not quote the Articles of Incorporation or bylaws for this purpose.) I A statement describing in detail the programs and activities which are presently conducted, or will be conducted by the organization, and how they will accomplish the specific purposes of the organization, g A statement explaining in detail each fund-raising activity and each business «rterprise the organization has engaged in, or plans to engage in (accompanied by copies of all agreements, if any), with other parties for the conduct of each fund-raising activity or business enterprise. h A statement which fully explains any discontinued specific activities that the organization has engaged in or sponsored. Give dates of commencement and tennination and the reasons for discontinuance. i A copy of each lease, if any, in which the organization is the lessee or lessor of property (real, personal, gas, oil, or mineral), or in which an interest is owned under such lease, together with copies of all agreements with other parties for development of the property. j Samples of any literature which the organization sells or distributes and samples of any organizational advertising. Each item listed below refers to a separate Revenue and Taxation Code Sections (R&TC). Select the appropriate section under which your organization is claiming exemption and provide the requested information. 8 R&TC Section 23701a, Labor, Agricultural or Horticultural organization: submit an explanation of any services to be perfomied for members. Cooperative organizations applying for exemption under R&TC Section 23701a must submit a copy of the Federal exemption letter showing exemption under IRC Section 501(c)(5). 9 a R&TC Section 23701b, Fraternal Beneficiary Society, etc, or R&TC Section 237011, Fraternal Society: State whether the organization operates, or plans to operate, under the lodge system or for the exclusive benefit of the members of an organization so operating Operating under the lodge system means canying on activities under a form ot organization that comprises local branches, which are largely self- governing, called lodges, chapters or the like and chartered by a parent organization. b If the organization is a Subordinate or Local Lodge, etc., attach a certificate signed by the secretary of the parent organization, under the seal of that organization, certifying that the Subordinate Lodge is a duly constituted body operating under the jurisdiction of the parent body. c If the organization is a Parent or Grand Lodge, attach a statement showing (1) the number of subordinate lodges in active operation, and (2) whether periodic meetings are actually held, d For R&TC Section 23701b organizations only, attach a statement describing the types of benefits (life, sick, accident, or other benefits) paid, or to be paid, to members. 10 R&TC Section 23701c, Cemetery company or corporation chartered solely for burial purposes: a Attach the following statements and/or documents: (1) Complete copy of sales contract or other document involved in acquisition of cemetery property by the organization. (2) Complete copy of any contract the organization has which designates an agent to sell the cemetery lots. (3) Names of officers and directors of your organization from the date of incorporation to the present date and show the period for which each held office. (4) Appraised value of cemetery property as of tbe date acquired. The appraisal should be obtained from sources other than the parties in interest b Does the organization have or plan to have a perpetual care fund? D Yes Q No If "Yes," fumish a copy of the Federal exemption letter, a copy of the fund agreement; and a statemenf explaining the nature of such fund (cash, securities, unsold land, etc.), the manner in which the fund is or will be administered, the specific purposes for which the fund is to be used, and the name(s) of the person(s) administering the fund, c Does the organization operate a crematorium? D Yes D No Side 2 Form 3500 1987 11 12 13 14 R&TC Section 23701d, Religious, CTraritable, Scientific, Literary or Educational organization: answer questions "a" through "e Attach a statement explaining all "Yes" answers in "a" through "d". Yes No a Has the organization received, or does it expect to receive, 10 percent or more of its assets from any organization or group of affiliated organizations (affiliated through stockholding, common ownership, or otherwise), any individual, or members of a family group (brother or sister whether whole or half blood, spouse, ancestor, or lineal descendant)? b Is the organization now, has it ever been, or does it plan to be engaged in carrying on propaganda, or otherwise advocating or opposing pending or proposed legislation (this includes dissemination of such infomiation to the general public while representing the organization)? c Has the organization participated, plan to participate, or intervene in (including the publishing or distributing of statements) any political campaign on behalf of, or in opposition to, any candidate for public office? d Does the organization hold, or plan to hold, 10 percent or more of any class of stock or 10 percent or more of the total combined voting power of stock in any corporafion? e If claiming exemption as a Church, attach a statement including the following: (1) Has a permanent place of worship been established? At what address? Who is fhe legal owner of this property? Describe the physical characteristics of your church buildings. Explain to what extent these buildings are used for purposes other than religious worship, (2) Does the organization have a regular congregation or conduct religious services on a regular basis? How many usually attend the regular worship services? Attach samples of worship service programs and newspaper announcements of your activities. Where and how often are religious services held? (3) Fumish information regarding the religious background and fomnal religious training of the religious leaders, Fumish a copy of the religious leader's certificate of ordination (4) What amount of fhe annual gross income will be received from incorporators, ministers, officers, directors or their families? (5) What amount of the organization's proposed expenditures will be used for the personal living expenses of the individuals mentioned in item (4) above, (6) How many hours per week will the religious or spiritual leader devote to organizational activities? Will this person engage in employment unrelated to the activities of the organization? If so, indicate the number of hours per week and describe the employment activity (7) List all the officers, directors, trustees, etc , of the organization and describe their qualifications for such office. Are any of the officers or directors related by blood or marriage? If yes, explain, (8) Will any founder, member or officer: a Take a vow of poverty? b Transfer personal assets to this organization such as a home, automobile, fumishings, business or recreational assets, etc., which will be made available for the personal use of the donor(s)? c Assign or donate income to the organization which will be used in part or whole to be paid to the donor(s) as salary, stipend or living allowance (such as food, medical expenses, clothing, insurance, etc.)? R&TC Section 23701e, Business League, Chamber of Commerce, etc: state whether the organization has perfomied, or plans to pertorm, particular services for members, shareholders, or others, such as fumishing credit reports, collection accounts, inspecting products, conducting advertising, purchasing merchandise, or other similar undertakings, • Yes • No. If "Yes," attach a detailed statement, including income realized and expenses incurred, regarding such activities. If engaged in advertising, attach samples of material. R&TC Section 23701f, Local Association of Employees: attach a statement giving names and addresses of employers whose employees are eligible for membership in the association. If employees of more than one plant or office of the same employer are eligible for membership, give the address of each such plant or office. R&TC Section 23701 g. Social and Recreational organization: answer the following questions and fumish the information requested. a Has the organization solicited, or does it plan to solicit, public patronage of the facilities by advertisement or othenwise? If "Yes," attach sample copies of such advertisements or other solicitations b Are nonmembers, other than bona fide guests of members, permitted, or will they be permitted, to use the club facilities, or participate in or attend any functions or activities conducted by the organization? If "Yes," attach a statement describing the functions or activities in which nonmembers have participated, or will participate: or to which they have been admitted, or will be admitted. If nonmembers have participated in, or have been admitted to, any functions or activities, state the amount received from nonmembers. Provide a schedule in the statement detailing the expenses attributable to such nonmembers, the expenses attributable to such functions, and the disposition made of net profits, if any, derived from the functions c Has the organizat :n rented or leased, or plan to rent or lease, any part of the club's property to others? If "Vfes," attach a statement indicating the reason for such action, or proposed action, and the amount received, or to be received Also attach copies of the rental agreements or leases d Has the organization or will the organization derive any income from nonmembers not explained above? If "Yi8s," explain in detail e Furnish a statement separating the member and nonmember income for the past three years and a proposed budget separating member and nonmember income for the next period of operation f State total number of club members. If there are different classes of membership, explain dues and privileges of each class. Yes No Forin 3500 1987 Side 3 15 R&TC Section 23701 h. Title Holding Corporation: answer the following questions and fumish the infomiation requested, a Attach a statement giving the complete names and addresses of organizations for which title to property is held, the number of shares of capital stock held, and whether shares of stock have ever been held by persons other than such organizations. If stock was so held, include the years held and the total number of shares of each class of stock, b State whether the annual income (less expenses) is or will be tumed over to the organization for which title to property is held. Explain what disposition will be made of income which will not be tumed over to the organization, c Enclose a copy of an exemption letter (Federal or Califomia) for each organization for which property will be held. If property will be held for organization(s) located in Califomia, a Califomia exemption letter must be fumished. 16 R&TC Section 23701i, Voluntary Employees' Beneficiary organization: fumish a copy of the Federal determination letter showing exemption under IRC Section 501(c)(9). 17 R&TC Section 23701m Management Company: fumish evidence and the date the corporation was registered as a Management Company under Section 5 of the Federal Investment Act of 1940 (15 U.S.C.A. - §80a-8), Oate 18 R&TC Section 23701 n. Supplemental Unemployment Compensation Trust: attach a copy of the supplemental unemployment benefit plan and appurtenant agreements and a copy of the Federal detennination letter 19 R&TC Section 23701 q. Group Legal Services Plan: fumish a copy of the Federal determination letter showing exemption under IRC Section 501(c)(20). 20 R&TC Section 23701t, Homeowners Association: answer the following questions and fumish the information requested. Attach a supplemental schedule if needed. a Will any of the individual units/lots owned by the organization or its manbers be occupied for other than personal residential purposes? If "Yes," answer the following: (1) What percentage of the units/lots will be used for nonresidential purposes? (2) If the organization is claiming exemption as a condominium management association, indicate square footage of all units and square footage devoted to residential purposes. (3) What percentage of the organization's total gross income will be derived from dues, fees, or assessments from nonresidential members? b Will this organization own, maintain or operate a mutual water company, well, electrical generating facility or other utility? If "Yes," describe in detail and answer the following; (1) Are the members/shareholders the actual users of the utility, or simply investors? (2) Is this organization fumishing utilities to residential homes, commercial businesses (including agricultural enterprises) or both? If both, indicate what percent of this organization's total income will be derived from sale of utilities for nonresidential usage. (3) How are members/shareholders assessed for utilities usage? Are they assessed equally, according to square footage/acreage, metered, etc.? c Fumish a copy of the Declaration of Covenants, Conditions and Restrictions, d Will any of the units/lots be rented by a person, or series of persons, for a period of less than 30 days for more than half of the association's taxable year? If "Yes," what percentage? e Provide the date the association became active and details of these activities, f Provide the date the first unit was sold. 21 R&TC Section 23701 u, TITLE HOLDING ORGANIZATION: answer the following questions and fumish infomiation requested. a Attach a statement giving the complete names and addresses of organizations or tnjsts for which title to property is being held, and the number of shares of capital stock held by each entity, b State whether the annual income (less expenses) is or will be tumed over to the organizations for which title to property is held. Explain what disposition will be made of the income which will not be turned over to the organizations, c Enclose a copy of a federal determination letter for each organization or trust for which property will be held. d For those organizations of trust for which property will be held and do not have a federal detennination letter, provide detailed information to show that each shareholder is: (1) A govemmental plan described in IRC Section 414(d); or (2) The United States, any state or political subdivision thereof, or any agency or instrumentality of the foregoing, e State the total number of stockholders of beneficiaries f Describe in detail each class of stock or beneficial interest. 22 R&TC Section 23701 u. Public Facility Financial Corporation: include with this application (a) Samples of all certificates of participation or other securities to be issued. (b) Copies of all leases, contracts, trusts agreements, or other agreements that have been, or will be, entered into by this corporation. 23 R&TC Section 23701v, Mobilehome Park Acquisition Association: answer the following questions and fumish the inforniation requested, a Are all members of the organization, ovmers of manufactured homes or mobilehomes tenants of the mobilehome park? If not, explain the circumstances under which other individuals can become members of the organization, b Describe the mobilehome park in which owner/tenant members reside. c Are all lots within the park rented or leased to mobilehome or manufactured home owners? If not, explain, d Does the rent paid by each owner include rental for the lot occupied by the mobilehome or manufactured home? If not, explain, e Will the organization carry on activities other than purchasing or preparing to purchase, the mobilehome park in which members reside? If so, describe in detail the other activities and indicate the percentage of total operations represented by such activities. Side 4 Form 3500 1987 ^' 13061-01 JHHW:GFB GFB4602 CALIFORNIA FORM FTB 3500 EXEMPTION APPLICATION CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION 1200 Elm Avenue Carlsbad, California 92008 Question 7(a) Articles of Incorporation are attached. Question 7(b) Bylaws are attached. Question 7(c) Please see Question 7(d) below. Question 7(d) The Corporation has not and will not receive funds and does not expect to have any source or need of financial support. The proceeds of the certificates of participation referred to below have been used by the trustee bank to (a) acquire and construct the Project (as hereinafter defined), (b) provide for the payment of a portion interest on the lease payments during the acquisition/construction period, (c) provide a reasonably required reserve fund, and (d) pay the costs incurred by the City of Carlsbad, California (the "City") in connection with the preparation and delivery of the enclosed agreements and the certificates of participation. The Corporation is not obligated to pay any portion of the lease payments or any expenses incurred by the City in connection with the execution and delivery by the City of the agreements referenced herein. The Corporation has assigned Its rights to receive such lease payments to the trustee bank in order to enable the trustee bank to execute and deliver the certificates of participation. The proceeds of the certificates of participation referred to herein ($8,570,455.88) were deposited into the funds established under the enclosed Trust Agreement as follows: $ 121,032.88 Deposited into the Lease Payment Fund (representing accrued interest of $48,568.88 from June 1, 1988 to June 28, 1988, and capitalized interest from June 28, 1988 to January 1, 1990) 6,821,205.11 Deposited into the Escrow Fund 869,000.00 Deposited into the Reserve Fund 109,217.89 Deposited into the Delivery Costs Fund 650,000.00 Deposited into the Acquisition and Construction Fund $8,570,455.88 TOTAL certificate of participation proceeds The Corporation's budget for the first, second and third tax years is as follows: -0- Estimated Receipts -0- Estimated Expenditures The Corporation is not, at this time, proposing to enter into any financing of the type described below or otherwise. However, if the City so requests that the Corporation participate in such a financing, in order to avoid paying fees and higher costs charged by leasing companies which operate on a profit-making basis to the detriment of the City, the Corporation would participate in such financing at the request of the City. The Corporation would not, however, receive any funds for services performed or for any other purpose. The Corporation's primary purpose is to enable the City to finance, through the execution and delivery of the certificates of participation by the trustee bank referred to herein, the acquisition, construction and improvement of certain real and personal property, to be used by the City for the benefit of the public. Question 7(e) The Corporation was formed for the specific and primary purpose of rendering financial assistance to the City, through the execution and delivery by the trustee bank of the certificates of participation referred to herein, by financing, refinancing, acquiring, constructing, improving, leasing, selling or otherwise conveying real or personal property to the City. Question 7(f) In particular, the trustee bank referred to herein has executed and delivered certificates of participation to provide funds to finance the costs of the Project, which consists of the construction of two major improvements within approximately 52 acres of a eucalyptus grove, currently zoned open space, commonly known as "Hosp Grove". First, Monroe Street will be widened by the addition of one southbound lane for a length -2- of 1100 feet at the intersection with Marron, including sidewalk, curb gutter and streetlights. This land will provide better access to Monroe from Marron by widening the intersection and providing turn lanes. Second, a 54" diameter storm drain 1100 feet long will be constructed along the west side of Monroe Street to enclose an existing open ditch. In addition, the proceeds of the certificates of participation will be used by the City to retire an existing obligation of the City, the proceeds of which were used to acquire the real property known as "Hosp Grove". The Corporation has entered into an Agency Agreement with the City whereby the City has been appointed to carry out all phases of the acquisition, construction, installation and equipping of the Project. The Project will be operated and maintained by the City. The Corporation has assigned its rights to receive lease payments made by the City to the trustee bank pursuant to the enclosed Assignment Agreement, and the trustee bank has delivered certificates of participation representing undivided fractional interests in such payments to investors who have paid the capitalized value of future lease payments to the trustee bank. The trustee bank will use the proceeds of the certificates of participation to (a) acquire, construct, equip and improve the Project, (b) provide for the payment of a portion of the interest on the lease payments during the construction/acquisition period, and (c) pay the costs incurred by the City in connection with the preparation and delivery of the enclosed agreements and the certificates of participation. The Corporation has no role in the financing except to provide a legal means to own, lease and sell property and to create and assign legal rights. The Corporation has entered into a Trust Agreement with the City and the trustee bank for the purpose of obtaining the required moneys to finance the Project. The Corporation has entered into an Assignment Agreement with the trustee bank in order to assign and transfer certain of its rights under the Lease Agreement to the trustee bank and, in consideration of such assignment and the execution of the Trust Agreement, the trustee bank has executed and delivered certificates of participation evidencing undivided fractional interests in the lease payments to be made by the City under the Lease Agreement. The Project will be operated and maintained by the City. The Corporation has assigned its rights to receive lease payments to the trustee bank pursuant to the terms of the Assignment Agreement (a copy of which is enclosed). The Corporation has assigned such rights to the trustee bank in order to enable the trustee bank to execute and deliver the aforementioned certificates of participation. The proceeds of the certificates of participation will be administered by the trustee bank pursuant to the terms of the enclosed Trust Agreement. In general, the City is required to directly pay to the Trustee, as assignee of the Corporatfon, specified amounts, which amounts are designed to be sufficient in both time and amount to pay, when due, the principal of and interest payable with respect to the certificates of participation delivered by the trustee bank under the enclosed Trust Agreement. The schedule of lease payments to be paid by the City for the Project components is attached to the enclosed Lease Agreement. The City has covenanted that it will pay all lease payments as the same become due. -3- Pursuant to the Lease Agreement, the City has agreed to lease certain real property described therein to the Corporation, to provide the Corporation with the right to lease such real property to the City. The Corporation has agreed to cause the Project to be constructed and, to that end, has appointed the City as its agent to carry out all phases of the acquisition, construction, installation and equipping of the Project. The Project will be operated and maintained by the City. The Corporation's participation in the financing described above contributes greatly to the exempt purposes of the Corporation by enabling the City to finance the Project components. The Project components are designed to meet increased community needs. These improvements will benefit the residents of the community and surrounding areas. The Corporation will have no revenues, liabilities or activities except as described above. The Corporation may undertake similar transactions in the future for other improvements desired by City and such transactions may be on either a lease or sale basis. The Corporation will do business only with the City. These activities benefit and contribute to the City, enabling the City to avoid paying fees and higher costs charged by leasing companies operating on a profit-making basis to the detriment of the City and, ultimately, the common good of the people. The Corporation has not and does not intend to operate, perform services for, or do business with any entity other than the City. Question 7(g) Please see Question 7(f) above. Enclosed are copies of the Lease Agreement, Agency Agreement, Assignment Agreement, Trust Agreement and a specimen of the certificates of participation referenced in Question 7(f). Question 7(h) The Corporation has engaged in no activities which have been discontinued. Question 7(1) Copies of the Lease Agreement, Agency Agreement, Assignment Agreement, Trust Agreement and a specimen of the certificates of participation referenced in Questions 7(f) and 7(g) above are enclosed. Question 70) The Corporation does not sell or distribute any literature and the Corporation does not advertise. -4- Question 22 The Corporation is requesting an exemption under Revenue and Taxation Code Section 23701 u as an organization operated for social welfare purposes. The Corporation's assets are dedicated, pursuant to Section Vl(B) of its Articles of Incorporation and Section IV(2) of its Bylaws, in the event of its dissolution to the City, the United States of America, the State of California, or any political subdivision thereof, or to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purposes and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. Question 22(a) A specimen of the certificates of participation referred to herein is enclosed. Question 22(b) Copies of the Lease Agreement, Agency Agreement, Assignment Agreement, Trust Agreement and a specimen of the certificates of participation referenced in Questions 7(f) and 7(g) above are enclosed. -5- 13061-03 JHHW:WHM:pch pch pch 05 13/88 05'20 05/26, (HS M6695 AFTER RECORDATION RETURN TO: JONES HALL fflLL & WHITE, A PROFESSIONAL LAW CORPORATION Four Embarcadero Center, Suite 1950 San Francisco, Califomia 94111 Attention: Janet H. Ekberg COUNTY on^j^ns-dL-Llii 4T INSTRUI^AtMT ^?'30i^90 AT 2'00 n^- THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11922 OF THE CALIFORNIA REVENUE AND TAXATION CODE. ASSIGNMENT AGREEMENT (HOSP GROVE PROJECT) THIS ASSIGNMENT AGREEMENT, made and entered into as of June 1, 1988, by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of Califomia (the "Corporation"), and The Bank of CaUfomia, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee (the "Tmstee"); WITNESSETH: In the joint and mutual exercise of their powers, in consideration of the mutual covenants herein contained, and for other valuable consideration, the parties hereto recite and agree as follows: Section 1. Recitals. (a) The Corporation and the City of Carlsbad (the "City") have entered into a lease agreement, dated as of June 1, 1988 (the "Lease Agreement"), and recorded concurrently herewith, whereby the Corporation has agreed to lease to the City, and the City has agreed to lease from the Corporation, the Project and the Site (as said terms are more particularly defined in the Lease Agreement) in the manner and on the terms set forth in the Lease Agreement, which terms include, without limitation, the obligation of the City to pay Lease Payments (as defined in the Lease Agreement) to the Corporation in consideration of the City's use and enjoyment of the Project and the Site under the Lease Agreement. (b) Under the Lease Agreement, the Corporation is required to cause to be deposited with the Tmstee certain sums of money to be credited, held and appUed in accordance with the Lease Agreement and with a tmst agreement, dated as of June 1, 1988 (the "Tmst Agreement"), by and among the Corporation, the City and the Tmstee. (c) Upon deUvery of the Lease Agreement, the Corporation is required to deposit with the Tmstee, in addition to other moneys to be deposited with the Tmstee, moneys for the acquisition and constmction of the Project. For the purpose of obtaining such moneys, the Corporation is willing to convey to certain persons (the "Owners") fractional interests in the Lease Payments, such fractional interests to be evidenced by certificates of participation therein (the "Certificates"). In order to make such fractional interests marketable on terms acceptable to the Corporation, the Corporation is willing to assign and transfer its rights imder the Lease Agreement to the Tmstee for the benefit of the Owners. Concurrently with the deUvery of this Assigximent Agreement, the Tmstee is executing, selling and deUvering Certificates in an aggregate face amount of Eight MilUon Six Hundred Ninety Thousand doUars ($8,690,000) to Rauscher Pierce Refsnes, Inc. for resale to the Owners. The proceeds of such sale are anticipated to be sufficient to permit the Corporation to make the deposits required under the Lease Agreement and the Tmst Agreement and to permit the Corporation to pay therewith the cost of acquisition and constmction of the Project. (d) Each of the parties has authority to enter into this Assignment Agreement and has taken aU actions necessary to authorize its officers to execute it. Section 2. Assignment. The Corporation hereby transfers, assigns and sets over to the Tmstee, for the benefit of the Owners of Certificates executed and deUvered umder the Tmst Agreement, aU of the Corporation's rights under the Lease Agreement (excepting only the Corporation's rights under Sections 5.3, 7.3 and 9.4 of the Lease Agreement), including without limitation (i) the right to receive and coUect aU of the Lease Payments from the City under the Lease Agreement, (u) the right to receive and coUect any proceeds of any insurance maintained thereunder and of any condemnation award rendered with respect to the Project or the Site, and (in) the right to exercise such rights and remedies conferred on the Corporation pursuant to the Lease Agreement as may be necessary or convenient (A) to enforce payment of the Lease Payments and any other amounts required to be deposited in the Lease Payment Fund or the Insiirance and Condenmation Fimd established under the Tmst Agreement, or (B) otherwise to protect the interests of the Owners in the event of a default by the City under the Lease Agreement. AU rights assigned by the Corporation shaU be administered by the Trustee in accordance with the provisions of the Trust Agreement and for the equal and fractional benefit of the Owners of Certificates. Section 3. Acceptance. The Tmstee hereby accepts the assignments made herein for the purpose of securing, equaUy and fractionaUy, the payments due pursuemt to the Lease Agreement and the Trust Agreement to, and the rights under the Lease Agreement and Trust Agreement of, the Owners of the Certificates deUvered pursuant to the Tmst Agreement, aU subject to the provisions of the Tmst Agreement. Section 4. Conditions. This Assignment Agreement shaU confer no rights or impose no duties upon the Tmstee beyond those expressly provided in the Lease Agreement and the Trust Agreement. -2- IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their officers thereunto duly authorized as ofthe day and year first written above. CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION (S E A L) Attest: Secretary ViceP^tecm THE BANK OF CALIFORNIA, N.A., as Tmstee By Authorized Officer -3- STATE OF CALIFORNIA COUNTY OF SAN DIEGO ) ) ss ) On this 23rd day of June, in the year 1988, before me, , a notary pubUc, personaUy appeared Ann J. Kulchin and Aletha L. Rautenkranz, personaUy known to me (or proved to me on .the basis of satisfactory evidence) to be the persons who executed the within instrument as Vice President and Secretaiy, respectively, of the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, and acknowledged to me that said Corporation executed it. WITNESS my hand and official seal. (Notarial Seal) OFFICIAL SEAL RANDEE HARLIB Nolary PuWic-Califomla SAN OIEGO COUNT*- My Comm. Exp. Fab.», 1991 (signature) Notary PubUc for the State of Califomia My commission expires: -4- STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN FRANCISCO ) On this il day of June, in the year 1988, before me, the undersigned, a Notary PubUc in and for said State personally appeared Cecily Medved, personaUy known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instmment as an authorized officer of The Bank of CaUfomia, -N.A., the corporation therein named, and acknowledged to me that The Bank of CaUforma, N.A. executed the within instmment pursuant to its bylaws or a resolution of its board of directors. WITNESS my hand and official seal. (SEAL) OFFlCiAi SEAL PATRICIA km HAZLITT Notary Puolic-Calitornia SAN FRANCISCO GOUNT\' My Comm. Exp. Jan. 12, 19?r Notary PubUc in and for sj Typed Name: Patricia Ann Hazlitt Commission Expires: ^ipr^nary 1?, iQQn -5- FORM r402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 EXHIBIT "A* PARCEL l! PORTIONS OF LOTS 8, 9, 10, 11, 12, 13, 14, 15 AND 16 IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS; COMMENCING AT THE SOUTHEAST CORNER OF SAID TRACT; THENCE ALONG THE EAST LINE OF SAID TRACT NORTH 00*56'20" EAST, 2263.66 FEET, SAID POINT BEING SOUTH 00*56'20" WEST, 414.74 FEET FROM THE WEST QUARTER CORNER OF SECTION 32, TOWNSHIP 11 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; THENCE NORTH 89*18'10" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING; SAID POINT BEING ON A NON-TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 310.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 43*14'53" WEST; THENCE SOimiWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*33'00", AN ARC DISTANCE OF 224.81 FEET; THENCE LEAVING SAID CURVE NORTH 89*18*10" WEST 557.72 FEET; THENCE SOUTH 61*25'08" WEST 305.23 FEET; THENCE NORTH 10*19'07" WEST, 374.05 FEET; THENCE NORTH 79*40'53" EAST, 272.00 FEET; THENCE NORTH 02*01'30" WEST, 699.16 FEET TO A POINT ON A NON-TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 761.50 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 10*06'51" EAST; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03*23'09", AN ARC DISTANCE OF 45.00 FEET; THENCE TANGENT TO SAID CURVE SOUTH 76*30'00" EAST, 350.95 FEET; THENCE NORTH 1.00 FOOT; THENCE SOUTH 76*30'00" EAST, 339.00 FEET; THENCE SOUTH 350.00 FEET; THENCE SOUTH 06*51*59" EAST 261.11 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLLOWS: COMMENCING AT THE NORTHEASTERLY CORNER OF CARLSBAD TRACT NO. 77-2, UNIT NO. 2, ACCORDING TO MAP THEREOF NO. 9813 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, SEPTEMBER 26, 1980; THENCE NORTH 1*01*10" EAST, ALONG THE EASTERLY LINE OF SAID HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1,843.48 FEET; THENCE NORTH 89*11*20" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING AND THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 310.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*32'50", AN ARC DISTANCE OF 224.79 FEET; THENCE LEAVING SAID CURVE, NORTH 89'11'20" WEST, 30.085 FEET TO THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A PAGE 8 ^ R I»l t U ^ ^ORM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 RADIUS OF 340.00 FEET; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45*35'15" AND ARC DISTANCE OF 270.52 FEET; THENCE LEAVING SAID CURVE SOtJTH 6*45'09" EAST, 36.41 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 2; PORTIONS OF LOTS 8, 9, 10, 16, 17, 18, 23, 24, 25, CANON STREET AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908 DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST SOUTHWESTERLY CORNER OF LOT 25 IN SAID TRACT; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LOT 25 NORTH 23* 27'45" WEST 195.00 FEET; THENCE NORTH 68*30'20" EAST, 360.41 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*09'57" WEST, 40.89 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35'28", AN ARC DISTANCE OF 265.33 FEET; THENCE TANGENT TO SAID CURVE NORTH 03*34'35" WEST 94.02 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 458.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22*18'38", AN ARC DISTANCE OF 178.34 FEET; THENCE TANGENT TO SAID CURVE NORTH 25*53'13" WEST 189.20 PEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10*17'57", AN ARC DISTANCE OF 187.30 FEET; THENCE TANGENT TO SAID CURVE NORTH 15*35'16" WEST, 108.41 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 88*16'48", AN ARC DISTANCE OF 30.82 FEET TO A POINT OF CUSP WITH A CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 838.50, A RADIAL LINE TO SAID POINT OF CUSP BEARS SOUTH 13*52'04" EAST; THENCE NORTHEASTERLY ALONG THE LAST MENTIONED CURVE THROUGH A CENTRAL ANGLE OF 01*43'12", AN ARC DISTANCE OF 25.17 FEET; THENCE TANGENT TO SAID CURVE NORTH 74*24'44" EAST 140.00 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 838.50 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*24'44", AN ARC DISTANCE OF 196.28 FEET; THENCE TANGENT TO SAID CURVE NORTH 61*00*00" EAST, 174.31 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 761.50 FEET; THENCE EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 39*06*51", AN ARC DISTANCE OF 519.85 FEET; THENCE SOUTH 00*01*30" EAST 699.16 FEET; THENCE SOUTH 79*40*53" WEST, 272.00 FEET; THENCE SOUTH 10*19*07" EAST 374.05 FEET; THENCE SOUTH 68*30*20" WEST, 541.94 FEET TO THE TRUE POINT OF BEGINNING. PAGE 9 FORM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND, 42.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF SAID LOT 25 DISTANT THEREON NORTH 23*27'45" WEST, 195.00 FEET FROM THE SOUTHWEST CORNER THEREOF; THENCE LEAVING SAID WESTERLY LINE NORTH 68*37'10" EAST (RECORD NORTH 68*30'28" EAST PER DEED) 402.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*03'07" WEST, 38.57 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE EASTERLY AND HAVING A RADIUS OF 1000.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35'23", AN ARC DISTANCE OF 254.64 FEET; THENCE TANGENT TO SAID CURVE NORTH 3*27'44" WEST, 109.90 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25*22'30", AN ARC DISTANCE OF 354.30 FEET; THENCE TANGENT TO SAID CURVE NORTH 28*50'14" WEST, 106.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13'21'49", AN ARC DISTANCE OF 186.59 FEET; THENCE NORTH 15*28'25" WEST, 30.00 FEET, MORE OR LESS, TO THE SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. THE SIDELINES OF SAID 84 FOOT WIDE STREET SHALL TERMINATE WITH 20.00 FOOT RADIUS RETURNS AT SAID SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. PARCEL 3: PORTIONS OF LOTS 22, 23, 24, 25 AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST SOUTHWESTERLY CORNER OF LOT 25 IN SAID TRACT; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LOT 25 NORTH 23*27'45" WEST 195.00 FEET; THENCE NORTH 68*30'20" EAST 360.41 FEET; THENCE NORTH 18*09'57" WEST 40.89 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 01*38'58", AN ARC DISTANCE OF 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 12*56'24", AN ARC DISTANCE OF 235.33 FEET; THENCE TANGENT TO SAID CURVE NORTH 03'34'35" WEST 94.02 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 458.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22*18'38", AN ARC DISTANCE OF 178.34 FEET; THENCE TANGENT TO SAID CURVE NORTH 25*53'13" WEST 189.20 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OP 10*17'57", AN ARC DISTANCE OF 187.30 FEET; THENCE TANGENT TO SAID CURVE NORTH PAGE 10 IpdRM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 15* 35* 16" WEST 108.41 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 88*16*48", AN ARC DISTANCE OF 30.82 FEET TO A POINT OF REVERSE CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 838.50 FEET; THENCE WESTERLY ALONG SAID REVERSE CURVE THROUGH A CENTRAL ANGLE OF 32*08*52", AN ARC DISTANCE OF 470.47 FEET; THENCE SOUTH 07*34*20" WEST 213.72 FEET; THENCE SOUTH 64*59*00" EAST 248.29 FEET; THENCE SOUTH 25*53*13" EAST 590.00 FEET; THENCE SOUTH 66*45*50" EAST 330.26 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND, 42.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF SAID LOT 25 DISTANT THEREON NORTH 23*27*45" WEST, 195.00 FEET FROM THE SOUTHWEST CORNER THEREOF; THENCE LEAVING SAID WESTERLY LINE NORTH 68*37*10" EAST (RECORD NORTH 68*30*28" EAST PER DEED) 402.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*03*07" WEST, 38.57 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE EASTERLY AND HAVING A RADIUS OF 1000.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35*23", AN ARC DISTANCE OF 254.64 FEET; THENCE TANGENT TO SAID CURVE NORTH 3*27*44" WEST, 109.90 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25*22*30", AN ARC DISTANCE OF 354.30 FEET; THENCE TANGENT TO SAID CURVE, NORTH 28*50*14" WEST, 106.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*21*49", AN ARC DISTANCE OF 186.59 FEET; THENCE NORTH 15*28'25" WEST, 30.00 FEET, MORE OR LESS, TO THE SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. THE SIDELINES OF SAID 84 FOOT WIDE STREET SHALL TERMINATE WITH 20.00 FOOT RADIUS RETURNS AT SAID SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. PARCEL 4t THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 20; THENCE ALONG THE EASTERLY LINE THEREOF, NORTH 06*58*00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 505.81 FEET; THENCE NORTH 89*29*00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 49*22*30" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE PAGE 11 FORM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24'55", A DISTANCE OF 43.72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35*12'35" EAST 449.44 FEET TO THE BEGINNING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 37*47'39", A DISTANCE OF 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00'14" EAST 111.94 FEET TO THE BEGINNING OF A TANGENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 86* 40'30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 842.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 24*45'00", A DISTANCE OF 363.72 FEET; THENCE SOtJTH 44*55'44" WEST 161.50 FEET TO A POINT WHICH BEARS NORTH 70*28'24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THOSE PORTIONS LYING SOUTHWESTERLY LINE OF SAID EUCALYPTUS STREET. NORTHEASTERLY OF THE PARCEL 5: THOSE PORTIONS OF LOTS 19 AND 20 IN HOSP EUCALYPTUS FOREST COMPANYS TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT.20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOTS 20 AND 19, NORTH 89*29'00" WEST 781.61 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 29*16'10" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 20*06'20", A DISTANCE OF 162.30 FEET; THENCE SOUTH 89*29'00" EAST 213.74 FEET; THENCE NORTH 70*28'24" EAST 505.81 FEET TO AN INTERSECTION WITH THE EASTERLY LINE OF SAID LOT 20; THENCE AIONG SAID EASTERLY LINE, SOUTH 06*58*00" WEST 278.00 FEET TO THE POINT OF BEGINNING. PARCEL $t THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY*S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLLOWS: PAGE 12 ^^^^ "^^FORM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 COMMENCING AT THE SOtJTHEAST CORNER OF SAID U>T 20; THENCE AIX)NG THE EASTERLY LINE THEREOF; NORTH 06*58'00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 505.81 FEET; THENCE 89*29'00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 49*22*30" EAST TO SAID POINT; THENCE NORTHEASTERLY AIONG^THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24*55", A DISTANCE OF 43.72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35*12*35" EAST 449.44 FEET TO THE BEGINNING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 37*47*39", A DISTANCE OF 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00*14" EAST 111.94 FEET TO THE BEGINNING OF A TANGENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 86*40*30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 842.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 24*45*00", A DISTANCE OF 363.72 FEET; THENCE SOUTH 44*55*44" WEST 161.50 FEET TO A POINT WHICH BEARS NORTH 70*28*24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. PAGE 13 state cSflfomta OFFICE OF THE SECRETARY OF STATE CORPORATION DIVISION I, MARCH FONG EU, Secretary of State of the State of California, hereby certify: That the annexed transcript has been compared with the corporate record on file in this office, of which it ( purports to be a copy, and that same is full, true and correct. IN WITNESS WHEREOF, I execute this certificate and affix the Great Seal of the State of Califomia this JUN-1 see Secretary of State SEC/STATE FORM CE-107 130e -01 / GFB3924 H ^ ENDORSED ^ FILED •(ll»SM*a«CaMafMo yUN -11988 MMCM F(M6 EUL Snetvyoi state ARTICLES OF INCORPORATION CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION I. The name of this corporation is City of Carlsbad Public Improvement Corporation. II. A. This corporation is a nonprofit public benefit corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for charitable purposes. B. The purposes for which this corporation is formed are: (1) The specific and primary purposes for which this corporation is formed are: a. To render financial assistance to the City of Carlsbad, State of California (the "City"), by financing, refinancing, acquiring, constructing, improving, leasing and selling of buildings, building Improvements, equipment, electrical, water, sewer, road and other public improvements, lands, and any other real or personal property for the benefit of residents of the boundaries of the City and surrounding areas. b. To acquire by lease, purchase or otherwise, real or personal property or any interest therein; to construct, reconstruct, modify, add to, Improve or otherwise acquire or equip buildings, structures or improvements and (by sale, lease, sublease, leaseback, gift or otherwise) make any part or all of any such real or personal property available to or for the benefit of the residents of the boundaries of the c3lty. c. To promote the common good and general welfare of the residents of the boundaries of the City, and the governmental enterprises in the boundaries of the City and surrounding areas by the acquisition of the real and personal property as hereinabove described. d. To borrow the necessary funds to pay the cost of financing, refinancing, acquiring, constructing, replacing, establishing, improving, maintaining, equipping and operating such properties and facilities for the herein described purposes, the indebtedness for which borrowed money may, but need not, be evidenced by securities of this corporation of any kind or character issued at any one or more times, which may be either unsecured or secured by any mortgage, trust deed, pledge, encumbrance or other lien upon any part or all of the properties and assets at any time then or thereafter owned or acquired by this corporation. e. To receive limited or conditional gifts or grants in trust, inter vivos, or by way of testamentary devises, bequests or grants in trust, or otherwise, funds of all kinds including property, both real, personal and mixed, whether principal or income, tangible or intangible, present or future, vested or contingent, in order to carry on the purposes of this corporation. (2) The general purposes and powers are to have and exercise all rights and powers now or hereafter conferred on nonprofit corporations under the laws of the State of California; provided, however, that this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the specific and primary purposes of this corporation; provided, further, that this corporation shall not have the power to, and shall not, do any act or conduct any activity, plan, scheme, design or course of conduct which in any way conflicts with Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and regulations promulgated pursuant to such Sections as they now exist or as they may hereafter be amended. ill. The name and address in the State of California of this corporation's initial agent for service of process is: Mr. Raymond R. Patchett City Manager City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 IV. The principal offices for the transaction of the business of this corporation is located in the County of San Diego. The property of this corporation is irrevocably dedicated to charitable purposes and no part of the net income or assets of this corporation shall ever inure to the benefit of any director, officer or member thereof or to the benefit of any private person. A. This corporation is organized and operated by a group of public spirited citizens exclusively for charitable purposes within the meaning of Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. -2- B. Notwithstanding any other provision of these Articles, this corporation shall not carry on any other activities not permitted to be carried on by a corporation exempt form federal income tax under Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. C. No substantial part of the activities of this corporation shall consist of carrying on propaganda, or otherwise attempting to influence legislation, and this corporation shall not participate or intervene in any political campaign (including the publishing or distribution of statements) on behalf of any candidate for political office. VI. A. During the continuance of this corporation, it may distribute any of its assets to the United States of America, the State of California, or any political subdivision thereof, to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purpose and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. B. Upon the dissolution or winding up of this corporation, its assets remaining after payment of, or provision made for the payment of, all debts and liabilities of this corporation, shall be distributed to the United States of America, the State of California, or any political subdivision thereof, or to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purposes and which has established its tax-exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. -3- IN WITNESS WHEREOF, the undersigned, being the sole incorporator of this corporation, have executed these Articles of Incorporation, as of the 31st day of May, 1988. I hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed. By_ William H. Madison, Incorporator -4- 13061-01 JHHW:GFB 04/22i|^ QFB3923 c BYLAWS OF CiTY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION ARTICLE I Offices and Seal Section 1. Offices. The principal office of the Corporation for the transaction of business shall be 1200 Elm Avenue, Carlsbad, California 92008. The Board of Directors may, however, fix and change from time to time the principal office from one location to another by noting the change of address in the minutes of the meeting of the Board of Directors at which the address was fixed or changed. The fixing or changing of such address shall not be deemed an amendment to these Bylaws. Section 2. Seal. The Corporation shall have a seal, consisting of two (2) concentric circles with the words "City of Carlsbad Public Improvement Corporation", with the date of incorporation of the Corporation. ARTICLE II Directors Section 1. Powers. Subject to the limitations of the Articles of Incorporation of the Corporation, the terms of these Bylaws, and the laws of the State of California, the powers of the Corporation shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. Section 2. Number. The Corporation shall have five (5) Directors. Directors are collectively to be known as the Board of Directors. The number of Directors may be changed by a Bylaw or amendment thereof duly adopted by the Board of Directors. Section 3. Selection, Tenure of Office and Vacancies. The individuals who act as the members of the City Council of the City of Carlsbad (the "City") shall constitute the Board of Directors of the Corporation, and each member of the City Council shall be and remain a member of the Board of Directors of the Corporation for so long as such member remains a member of the City Council. Section 4. Compensation. Directors shall serve without compensation but each Director may be reimbursed his or her necessary and actual expenses, including travel incident to his services as Director, pursuant to resolution of the Board of Directors. Any Director may elect, however, to decline said reimbursement. Section 5. Organization Meetings, immediately following the annual meeting of the Board of Directors or any special meeting of the Board of Directors at which Directors shall have been elected, the Directors shall meet for the purpose of organizing the Board, the election of officers and the transaction of such business as may come before the meeting. Pending such organization meeting, all officers of the Corporation shall hold over, except any officer required by law or these Bylaws to be a Director and who does not qualify as a Director. A Director elected at such meeting of the Board of Directors shall forthwith become a member of the Board of Directors for purposes of such organization. In the event such an organizational meeting shall not be held immediately following such meeting of the Board of Directors, it shall thereafter be held at the next regular meeting or at a special meeting and notice thereof shall be given in the manner provided in Section 7 of this Article for notice of special meetings. Section 6. Regular and Organizational Meetings. Regular meetings of the Board of Directors shall be held at such time as the Board may fix by resolution from time to time; provided, however, that at least one regular meeting shall be held each year and such meetings shall, in ali respects, conform to provisions of the Ralph M. Brown Act, being Sections 54950 through 54961 of the Govemment Code of the State of Califomia (the "Brown Act"). No notice of any organizational meeting of the Board of Directors, held immediately following the annual meeting of the Board of Directors or on or after any special meeting of the Board of Directors shall have been elected, need be given; provided, that if such an organizational meeting is not heid immediately following such meeting of the Board of Directors, then notice thereof shall be given in a manner provided in Section 7 of this Article, in the same manner as notice of special meetings. Sectton 7. Special Meetings. Special meetings of the Board of Directors shall be called, noticed and held in accordance with the provisions of Section 54956 of the Brown Act. Section 8b Quorum. A quorurn shall consist of a majority of the members of the Board of Directors unless a greater number is expressly required by statute, by the Articles of Incorporation of the Corporation, or by these Bylaws. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present, shall be the act of the Board of Directors. Section 9. Order of Business. The order of business at the regular meeting of the Board of Directors and. so far as possible, at all other meetings of the Board of Directors, shall be essentially as follows, except as othenvise determined by the Directors at such meeting: (a) Report on the number of Directors present in person in order to determine the existence of a quorum. -2- (b) Reading of the notice of the meeting and proof of the delivery or mailing thereof, or the waiver or waivers of notice of the meeting then filed, as the case may be. (c) Reading of unapproved minutes of previous meetings of the Board of Directors and the taking of action with respect to approval thereof. (d) Presentation and consideration of reports of officers and committees. (e) Unfinished business. (f) New business. (g) Adjournnraent. Section 10. Resignation of Directors. Any Director of the Corporation may resign at any time by giving written notice to the President or to the Board of Directors; provided, however, in the event of such resignation, such Director's position shall remain vacant until a new memt>er of the City Council is elected to fill such Director's p>osition. Such resignation shall take effect at the time specified therein, and, unless othenvise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Section 11. Nonliability for Debts. The private property of the Directors shall be exempt from execution or other liability for any debts, liabilities or obligations of the Corporation and no Director shall be liable or responsible for any debts, liabilities or obligations of the Corporation. Section 12. Indemnity by Corporation for Litigation Expenses of Officer, Director or Employee. Should any Director, officer or employee of the Corporation be sued, either alone or with others, because he is or was a director, officer or employee of the Corporation, in any proceeding arising out of his aiieged misfeasance or nonfeasance in the perfonnance of his duties or out of any alleged wrongful act against the Corporation or by the Corporation, indemnity for his reasonable expenses, including attomeys' fees incunred in the defense of the proceedings, may be assessed against the Corporation, its receiver, or its director by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person reasonably tDelieved to be in the best interests of the Corporation and. in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlavdul. The amount of such indemnity shall be so much of the expenses, including attorneys' fees, incurred in the defense of the proceeding, as the court determines and finds to be reasonable. -3- ( ARTICLE III Officers Section 1. Officers. The officers of the Corporation shall be a President, a Vice President, a Secretary and such other officers as the Board of Directors may appoint. When duties do not conflict, one person, other than the President, may hold more than one of these offices. The Corporation may also have, at the discretion of the Board of Directors, one or more additional Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. In addition to such officers, the City Manager of the City shall act ex officio as the Executive Director of the Corporation; the chief financial officer of the City shall act ex officio as the Treasurer of the Corporation; the City Clerk of the City shall act ex officio as the Secretary of the Corporation; and the City Attorney of the City shall act ex officio as legal counsel to the Corporation. Section 2. Election of Officers. The officers of the Corporation (other than the Executive Director, Treasurer. Secretary and legal counsel to the Corporation) shall be chosen by and shall serve at the pleasure of the Board of Directors and each shall hold office until any such officer shall resign or shall be removed or othenvise disqualified to serve or any successor shall be elected and qualified to serve. Section 3. Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those hereinabove mentioned as the business of the Corporation may require, each of whom shall hold office for such period, have such authority and perform such duties as are provided in these Bylaws, or as the Board of Directors from time to time may authorize or determine. Section 4. Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the Directors then in office at any regular or special meeting of the Board, or. except in the case of an officer chosen by the Board of Directors, by any officers upon whom such power of removal may be contended by the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any Directors until such time as a successor for said office has been elected and appointed. Section 5. President. The President shall preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or be prescribed by the Bylaws. The President shall also be the chief corporate officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the Board of Directors. He shall be ex officio member of all standing committees, and shall have the general powers and duties of management usually vested In the office of President of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or by these Bylaws. -4- Section 6. Vice l^^ident. In the absence or disabil^^bf the President, the Vice President, or the Vice Presidents in order of their ranks as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform all the duties of the President and when so acting shall have all the powers of and be subject to all of the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may from time to time be prescribed for them, respectively, by the Board of Directors or by these Bylaws. Section 7. Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Directors' meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors of the Corporation, shall keep the corporate records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these Bylaws. Section 8. Treasurer. The Treasurer shall keep and maintain or cause to be kept and maintained adequate and correct amounts of its assets, liabilities, receipts, disbursements, gains and losses. The books of account shall at all times be open to inspection by any Director. The Treasurer shall deposit all monies and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Directors. He shall disburse the funds of the Corporation as shall be. ordered by the Board of Directors, shall render to the President and the Directors whenever they ^ shall request it. an account of all of his transactions as Treasurer and of the financial V condition of the Corporation, shall take proper vouchers for all disbursements of the funds of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these Bylaws. Section 9. Executive Director. The Executive Director of the Corporation shall have such powers and perform such duties as may from time to time be prescribed by the Board of Directors or by these Bylaws. Section 10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and the Assistant Treasurers in the order of their seniority as specified by the Directors shall, in the absence or disability of the Secretary or the Treasurer, respectively, perform the duties and exercise the powers of the Secretary or Treasurer and shall perform such duties as the Board of Directors shall prescribe. ARTICLE IV Objects and Purposes Section 1. Nature off Objects and Purposes. The business of the Corporation is to be operated and conducted in the promotion of its objects and purposes as set forth in Article II of its Articles of Incorporation. -5- Section 2. Dissolution. The Corporation may be dissolved by vote of the Directors, or by the action of the Board of Directors in accordance with the provisions of California law. Upon the dissolution of the Corporation, and after payment or provision for payment, all debts and liabilities, the assets of the Corporation shall be distributed to the City. If for any reason the City is unable or unwilling to accept the assets of the Corporation, said assets will be distributed to the Federal Govemment: to a state or local government for public purposes; or to a nonprofit fund, foundation, or corporation which is organized and operated for charitable purposes and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986. as amended. Section 3. Merger. The Corporation may merge with other corporations organized solely for nonprofit purposes, qualified and exempt from Federal taxation pursuant to Section 501(c)(3) or 501(cK4) of the Internal Revenue Code of 1986. as amended, and from State taxation, upon compliance with the provisions of Califomia law relating to merger and consolidation. ARTICLE V General Provisions Section 1. Payment of Money, Signatures. Ail checks, drafts or other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payable to the Corporation and any and all securities owned by or held by the Corporation requiring signature for transfer shall be signed or endorsed by such person or persons and in such manner as from time to time shall be determined by the Board of Directors. Section 2. Execution of Contracts. The Board of Directors, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on t)ehalf of the Corporation and such authority may be general or confined to specific instances and uniess so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 3. Fiscal Year. The fiscal year of the Corporation shall commence on the 1st day of July of each year and shall end on the 30th day of June of the next succeeding year. Section 4. Annual Audit. The affairs and financial condition of the Corporation shall be audited annually at the end of each fiscal year (as provided In Section 3 above) commencing with fiscal year 1988-1989 by an independent certified public accountant selected by the Board of Directors and a written report of such audit and appropriate financial statements shall be submitted to the Board of Directors prior to the next regular meeting of the Board of Directors of the Corporation following the completion of such -6- ( audit. Additional audits may be authorized as considered necessary or desirable by the Board of Directors. ARTICLE VI Exempt Activities Notwithstanding any other provisions of these Bylaws, no Director, officer, employee or representative ol the Corporation shall take any action or carry on any activity by or on behalf of the Corporation not permitted to be taken or carried on by an organization exempt under Section 501(c)(3) or 501(c)(4) of the Intemal Revenue Code of 1986, as amended, and the Regulations promulgated thereunder as they now exist or as they may hereafter be amended. ARTICLE Vil Amendment to Bylaws These Bylaws may be amended by majority vote of the Board of Directors. ADOPTED by the Board of Directors of the City of Cartsbad Public Improvement Corporation on June 7.1988. Bv ^. (2t\zdz. Secretary -7- SECRETARY'S CERTIFICATE I. the undersigned, do hereby certify: 1. That I am the duly elected and acting Secretary of the City of Cartsbad Public Improvement Corporation, a Califomia nonprofit public benefit corporation; and 2. That the foregoing Bylaws constitute a full, true and con-ect copy of the Bylaws of said Corporation in full force and effect as of the date hereof. IN WITNESS WHEREOF. I have hereunto subscribed my name this day of U'u^C , 19^ Secretary y -8- 13061-03 JHHW:WHM:pch FINAL M6694 LEASE AGREEMENT Dated as of June 1, 1988 by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, as Lessor and the CITY OF CARLSBAD, as Lessee (HOSP GROVE PROJECT) M6694 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions 2 Section 1.2. Exhibits 2 ARTICLE n REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1. Representations, Covenants and Warranties of the City 3 Section 2.2. Representations, Covenants and Warranties of Corporation 3 ARTICLE m DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION OF THE PROJECT Section 3.1. Deposit of Moneys 5 Section 3.2. Acquisition and Construction ofProject 5 Section 3.3. Payment of Acquisition and Construction Costs 6 Section 3.4. Payment of DeUvery Costs 6 Section 3.5. Unexpended Moneys 6 ARTICLE IV AGREEMENT TO LEASE; TERM OF THIS LEASE AGREEMENT; LEASE PAYMENTS Section 4.1. Lease 7 Section 4.2. Term of Agreement 7 Section 4.3. Possession 7 Section 4.4. Lease Payments 7 Section 4.5. Quiet Eiyoyment 9 Section 4.6. Title 9 Section 4.7. Additional Payments 9 Page ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default Defined 17 Section 9.2. Remedies on Default 17 Section 9.3. No Remedy Exclusive 19 Section 9.4. Agreement to Pay Attorneys' Fees and Expenses 19 Section 9.5. No Additional Waiver Implied by One Waiver 19 Section 9.6. Application of Proceeds 19 Section 9.7. Trustee and Certificate Owners to Exercise Rights 19 ( Section 10.1. Section 10.2. Section 10.3. Section 10.4. Section 11.1. Section 11.2. Section 11.3. Section 11.4. Section 11.5. Section 11.6. Section 11.7. Section 11.8. Section 11.9. ARTICLE X PREPAYMENT OF LEASE PAYMENTS Security Deposit 20 Purchase Option 20 Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain 21 Credit for Amounts on Deposit 21 ARTICLE XI MISCELLANEOUS Notices 22 Binding Effect 22 SeverabiUty 22 Net-net-net Lease 22 Further Assurances and Corrective Instrvunents 22 Execution in Counterparts 23 Applicable Law 23 Corporation and City Representatives 23 Captions 23 EXHIBIT A - DEFINITIONS EXHIBIT B - DESCRIPTION OF THE SITE EXHIBIT C - DESCRIPTION OF THE PROJECT EXHIBIT D - SCHEDULE OF LEASE PAYMENTS Page ARTICLE V MAINTENANCE; TAXES; INSURANCE; USE LIMITATIONS AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments 10 Section 5.2. Modification ofProject and Site 10 Section 5.3. Public Liability and Property Damage Insurance 11 Section 5.4. Rental Interruption Insurance n Section 5.5. Title Insurance 12 Section 5.6. Insurance Net Proceeds; Form of Pohcies 12 Section 5.7. Advances 12 Section 5.8. Installation of City's Equipment 12 Section 5.9. Liens 23 Section 5.10. Private Business Use Limitation 13 Section 5.11. Private Loan Use Limitation 13 Section 5.12. Federal Guarantee Prohibition 13 Section 6.1. Section 6.2. Section 6.3. ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET PROCEEDS Eminent Domain , 14 Application of Net Proceeds 14 Abatement of Lease Payments in the Event of Damage or Destruction I4 Section 7.1. Section 7.2. Section 7.3. ARTICLE vn DISCLAIMER OF WARRANTIES; ACCESS Disclaimer of Warranties 15 Access to the Site and the Project 15 Release and Indemnification Covenants 15 Section 8.1. Section 8.2. Section 8.3. ARTICLE vm ASSIGNMENT, SUBLEASING AND AMENDMENT Assignment by the Corporation IQ Assignment and Subleasing by the City I6 Amendment of this Lease Agreement I6 LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease Agreement"), dated for convenience as of June 1, 1988, by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of Califomia, as lessor (the "Corporation"), and the CITY OF CARLSBAD, a municipal corporation and general law city organized and existing under the laws ofthe State of Califomia, as lessee (the "City"); WITNESSETH: WHEREAS, the City has issued notes (the "Notes") in the principal amovmt of $6,555,000 to acquire approximately 52 acres of a eucalyptus grove commonly known as "Hosp Grove" for general municipal purposes and is currently zoned open space; and WHEREAS, the Notes mature on June 30, 1988, and the City wishes to complete permanent financing for Hosp Grove and improvements to be made thereon; and WHERBL\S, pursuant to a Lease Agreement the City will agree to lease Hosp Grove (the "Site") to the Corporation, and the Corporation has agreed to construct certain improvements to the Site (the "Project"), and to lease the Project and the Site to the City, and the City will agree to lease the Project and the Site from the Corporation; and WHEREAS, for the purpose of obtaining the moneys required to be deposited by it with the Tmstee to pay the Notes at maturity and to pay for financing the constmction of the Project, the Corporation proposes to assign and transfer certain of its rights under the Lease Agreement to the Tmstee, and in consideration of such assignment and the execution of the Tmst Agreement, the Tmstee has agreed to execute and dehver certificates of participation, each evidencing a fractional interest in the lease payments made by the City under the Lease Agreement, to provide the moneys required herein to be deposited by the Corporation; and NOW, THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other and valuable consideration, the parties hereto agree as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions. The terms defined in Exhibit A attached hereto and by this reference incorporated herein, as used and capitahzed herein, shall, for all purposes of this Lease Agreement, have the meanings ascribed to them in said Exhibit A unless the context clearly requires some other meaning. Section 1.2. Exhibits. The following exhibits are attached to, and by this reference made a part of, this Lease Agreement: Exhibit A: Definitions. Exhibit B: The description ofthe real property constituting the Site. Exhibit C: The description of the Project. Exhibit D: The schedule of Lease Payments to be paid by the City hereunder with respect to the Site and the Project, showing the date and amoimt of each such Lease Payment. -2- ARTICLE n REPRESENTATIONS, COVEN/USfTS AND WARRANTIES Section 2.1. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Corporation as follows: (a) Due Organization and Existence. The City is a municipal corporation and general law city duly organized and existing vmder the laws of the State. (b) Authorization. The laws of the State authorize the City to enter into this Lease Agreement, the Agency Agreement and the Tmst Agreement and to enter into the transactions contemplated by and to carry out its obhgations under all of the aforesaid agreements, and the City has duly authorized and executed all of the aforesaid agreements. (c) No Violations. Neither the execution and delivery of this Lease Agreement, the Agency Agreement or the Tmst Agreement, nor the fulfillment of or comphance 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 City is now a party or by which the City is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any hen, charge or encumbrances whatsoever upon any of the property or assets of the City, or upon the Site or the Project, V^^j^ except Permitted Encumbrances. (d) Execution and Dehvery. The City has duly authorized and executed this Lease Agreement in accordance with the laws of the State. Section 2.2. Representations, Covenants and Warranties of Corporation. The Corporation represents, covenants and warrants to the City as follows: (a) Due Organization and Existence. The Corporation is a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State; has power to enter into this Lease Agreement, the Agency Agreement, the Assignment Agreement and the Tmst Agreement; is possessed of full power to own and hold, improve and equip real and personal property, and to lease and sell the same; and has duly authorized the execution and delivery of all of the aforesaid agreements. (b) No Encumbrances. The Corporation will not pledge the Lease Payments or other amounts derived from the Project or the Site and from its other rights under this Lease Agreement, and will not mortgage or encumber the Project or the Site, except as provided under the terms of this Lease Agreement and the Tmst Agreement. (c) No Violations. Neither the execution and delivery of this Lease Agreement, the Agency Agreement, the Assignment Agreement or the Tmst 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 -3- agreement or instrument to which the Corporation is now a party or by which the Corporation is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any hen, charge or encumbrance whatsoever upon any of the property or assets of the Corporation, or upon the Project or the Site, except Permitted Encumbrances. (d) No Assignments. Except as provided herein, the Corporation will not assign this Lease Agreement, its right to receive Lease Payments from the City, or its duties and obhgations hereunder to any other person, fum or corporation so as to impair or violate the representations, covenants and warranties contained in this Section 2.2. - (e) Execution and Delivery. The Corporation has duly authorized and executed this Lease Agreement in accordance with the laws of the State. -4- ARTICLE m DEPOSIT OF MONEYS; ACQUISITION AND CONSTRUCTION OF THE PROJECT Section 3.1. Deposit of Moneys. On the Closing Date, the Corporation shall cause to be deposited with the Tmstee the proceeds of sale of the Certificates, including accmed interest. Pursuant to Section 2.07 of the Tmst Agreement, the Reserve Requirement shall be deposited with the Tmstee in the Reserve Fund, a portion of the Lease Payments payable by the City hereunder from June 1, 1988 to June 28, 1988 as well as Lease Payments attributable to the Project from the Closing Date to Febmary 1, 1990, shall be deposited with the Tmstee in the Lease Payment Fund, an amount necessary to pay the principal of and interest on the Notes at maturity shall be deposited in the Escrow Fund, amounts estimated to be required to pay Delivery Costs shall be deposited in the Dehvery Costs Fund, and the remaining balance of said amount shall be deposited in the Acquisition and Constmction Fund. Section 3.2. Acquisition and Constmction of Project. The Corporation agrees to acquire and constmct the Project pursuant to the plans and specifications afler the same are submitted to and approved by the City. The Corporation shall appoint the City as its agent for the purposes of acquisition and constmction of the Project and in furtherance thereof the Corporation and the City have entered into the Agency Agreement. The City, as agent of the Corporation, shall cause the acquisition and constmction of the street and storm drain improvements, to be performed diligently to the end that the Project will be substantially completed in accordance with the aforesaid plans and specifications on or prior to the Completion Date. The City may change the specifications of the Project, so long as such change does not reduce the value of the Project or substantially alter the nature of the Project, and that any increase in Acquisition and Constmction Costs shall not result from such change, unless the City deposits in the Acquisition and Constmction Fvmd an amount sufficient to pay such increase. In addition, in the event that the costs of constmcting, acquiring, deUvering and instaUing the Project are greater than the amount of money deposited in or transferred to the Acquisition and Constmction Fund, together with investment earnings thereon, the City agrees to deposit into the Acquisition and Constmction Fund an amount of money necessary to pay such increased Acquisition and Constmction Costs, but only from fimds arising in the fiscal year in which the City has entered into this Lease Agreement. The City agrees that upon substantial completion of any portion of the Project it wUl take possession of that portion of the Project under the terms and provisions of this Lease Agreement. No changes shall be made in such plans and specifications unless such changes are approved in writing by the City. Upon completion of acquisition and constmction of the Project, the City shaU deliver to the Tmstee, as assignee of the Corporation, a Certificate of Completion thereof executed by a City Representative. If the Corporation, for any reason whatsoever, cannot dehver possession of the completed Project to the City by the Completion Date, this Lease Agreement shall not be void or voidable, nor shall the Corporation be liable to the City for any loss or damage resulting therefrom; but in such event the remaining Lease Pajrments pertaining to the -5- Project shall be abated, in the proportion that the Acquisition and Constmction Cost of the portion of the Project not available for use by the City bears to the total Acquisition and Constmction Costs, with respect to the period between the Completion Date, and the time when the Corporation is able to use such portion of the Project. Section 3.*3. Payment of Acquisition and Constmction Costs. Payment for the acquisition and constmction of the Project, as weU as aU other Acquisition and Constmction Costs, shall be made from the moneys deposited in the Acquisition and Constmction Fund as provided in the Tmst Agreement, which moneys shaU be disbursed for such purpose in accordance and upon comphance with Section 3.02 of the Tmst Agreement. Section 3.4. Payment of Delivery Costs. Payment of Delivery Costs shaU be made from the moneys deposited with the Tmstee in the DeUvery Costs Fund, which moneys shall be disbursed for such purpose in accordance and upon comphance with Section 3.04 of the Tmst Agreement. Section 3.5. Unexpended Moneys. The Corporation and the City acknowledge that the Acquisition and Constmction Fund and the Delivery Costs Fund have been created for the benefit of the City. AU unexpended moneys remaining in the Acquisition and Constmction Fund and not required for payment of Acquisition and Constmction Costs shall, on the Completion Date be transferred by the Tmstee to the Lease Payment Fund and credited to the Lease Payments as the same shaU become due and payable. -6- ARTICLE IV AGREEMENT TO LEASE; TERM OF THIS LEASE AGREEMENT; LEASE PAYMENTS Section 4.1. Lease. The City hereby leases the Site to the Corporation, and the Corporation hereby leases the Project and the Site back to the City, and the City hereby leases the Project and the Site fi'om the Corporation, upon the terms and conditions set forth in this Lease Agreement. Section 4.2. Term of Agreement. The Term of the Lease Agreement shaU commence on the date of recordation hereof, and shaU end on August 1, 2008, unless such term is extended as hereinafter provided. If on August 1, 2008, the Tmst Agreement shall not be discharged by its terms, or if the Lease Payments payable hereunder shall have been abated at any time and for any reason, then the Term of the Lease Agreement shall be extended until there has been deposited with the Tmstee an amount sufficient to pay obligations due under the Lease Agreement, but in no event shall the Term ofthe Lease Agreement extend beyond August 1, 2018. If prior to August 1, 2008, the Tmst Agreement shall be discharged by its terms, the Term of the Lease Agreement shall thereupon end. Section 4.3. Possession. The City has taken possession ofthe Site and agrees to take possession of the Project on the Completion Date, and the first Lease Payment shall be due on January 15, 1989. Section 4.4. Lease Payments. (a) Obligation to Pay. Subject to the provisions of Articles VI and X hereof, the City agrees to pay to the Corporation, its successors and assigns, as rental for the use and occupancy of the Project and the Site during each Rental Period, the Lease Payments (denominated into components of principal and interest) for the Project and the Site in the respective amounts specified in Exhibit D hereto, to be due and payable on the respective Lease Payment Dates specified in Exhibit D hereto. 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 hereof 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 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 for such Rental Period. (b) Effect of Prepayment. In the event that the City prepays aU remaining Lease Payments in fuU pursuant to Article X hereof, the City's obligations under this Lease Agreement shaU thereupon cease and terminate, including but not limited to the City's obligation to pay Lease Payments under this Section 4.4; subject however, to the provisions of Section 10.1 hereof in the case of prepayment by appUcation of a security deposit. In the event that the City prepays the Lease Payments in part but not in whole -7- pursuant to Section 10.2 hereof, pursuant to Section 10.3 hereof as a result of any insvirance or condemnation award with respect to any portion of the Site or the Project, or pursuant to Section 10.4 hereof as a result of excess fimds in. the Acquisition and Constmction Fund, such prepayment shaU be credited entirely towards the prepayment of the Lease Payments as foUows: (i) the principal components of each remaining such Lease Payments shall be reduced on a pro rata basis in integral multiples of $5,000 (in inverse order of payment date in the case of a prepayment pursuant to Section 10.4 hereof); and (ii) the interest component of each remaining such Lease Payments shaU be reduced by the aggregate corresponding amount of interest which would otherwise be payable with respect to the Certificates thereby redeemed pursuant to Sections 4.01(a), (b) or (c), as the case may be, ofthe Tmst Agreement. (c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4.4, the payment in default shaU continue as an obligation of the City until the amount in default shall have been fuUy paid, and the City agrees to pay the same with interest thereon, to the extent permitted by law, fi'om the date of default to the date of payment at the rate of twelve percent (12%) per annum. Such interest, if received, shall be deposited in the Lease Payment Fund. (d) Fair Rental Value. The Lease Payments for the Project and the Site for each Rental Period shall constitute the total rental for the Project and the Site for each Rental Period and shaU be paid by the City 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 represent the fair rental value of the Project and the Site. In making such determination, consideration has been given to the obligations of the parties under the Lease Agreement, the uses and purposes which may be served by the Project and the Site and the benefits therefi-om which wiU accme to the City and the general pubUc. (e) Budget and Appropriation. The City covenants to take such action as may be necessary to include aU Lease Payments due hereunder in each of its budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for aU such Lease Payments. The covenants on the part of the City herein contained shaU be deemed to be and shall be constmed to be duties imposed by law and it shaU be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City. (f) Assignment. The City understands and agrees that aU Lease Payments have been assigned by the Corporation to the Tmstee in trust, pursuant to the Assignment Agreement, for the benefit of the Owners of the Certificates, and the City hereby assents to such assignment. The Corporation hereby directs the City, and the City hereby agrees to pay to the Tmstee at the Principal Corporate Tmst Office of the Tmstee, aU payments payable by the City pursuant to this Section 4.4 and aU amounts payable by the City pursuant to Article X hereof. -8- Section 4.5. Quiet Enjoyment. During the Term of the Lease Agreement, the Corporation shaU provide the City with quiet use and enjoyment of the Project and the Site, and the City shaU, during such Term, peaceably and quietly have and hold and enjoy the Project and the Site without suit, trouble or hindrance from the Corporation, except as expressly set forth in this Lease Agreement. The Corporation wiU, at the request of the City and at the City's cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Corporation may lawfully do so. Notwithstanding the foregoing, the Corporation shaU have the right to inspect the Project and the Site as provided in Section 7.2. hereof. Section 4.6. Title. During the Term of the Lease Agreement, the Corporation shaU hold fee title to the Project and any and aU additions which comprise fixtures, repairs, replacements or modifications to the Project or the Site, except for those fixtures, repairs, replacements or modifications which are added to the Project or the Site by the City at its own expense and which may be removed without damaging the Project and except for any items added to the Project or the Site by the City pursuant to Section 5.9 hereof. If the City prepays the Lease Payments in full pursuant to Article X hereof or makes the security deposit permitted by Section 10.1 hereof, or pays aU Lease Payments during the Term of the Lease Agreement as the same become due and payable, aU right, title and interest of the Corporation in and to the Project and the Site shaU be transferred to and vested in the City. The Corporation agrees to take any and aU steps and execute and record any and aU documents reasonably required by the City to consummate any such transfer of title. Section 4.7. Additional Payments. In addition to the Lease Payments, the City shall pay when due aU costs and expenses incurred by the Corporation to comply with the provisions of the Tmst Agreement, including without limitation aU Delivery Costs (to the extent not paid fi-om amounts on deposit in the DeUvery Costs Fund), compensation due to the Tmstee and aU costs and expenses of auditors, engineers and accountants. -9- ARTICLE V MAINTEN/iNCE; TAXES; INSURANCE; USE LIMITATIONS /iND OTHER MATTERS Section 5.1. Maintenance. UtiUties, Taxes and Assessments. 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 shaU be the responsibility of the City and the City shaU pay for or otherwise arrange for the payment of all utUity services, if any, suppUed to the Project and the Site which may include, without limitation, power, gas, telephone, Ught, heating, water and aU 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 fi-om ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Lease Payments herein provided, the Corporation agrees to provide only the Project and the Site, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1932 of the Califomia Civil Code, but such waiver shaU not limit any of the rights of the City under the terms of this Lease Agreement. The City shall also pay or cause to be paid aU taxes and assessments of any type or nature, if any, charged to the Corporation or the City afiecting the Project and the Site or the respective interests or estates therein; provided that with respect to special assessments or other govemmental charges that may lawfuUy be paid in installments over a period of years, the City shaU be obligated to pay only such installments as are required to be paid during the Term of the Lease Agreement as and when the same become due. The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utiUty and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain impaid during the period of such contest and any appeal therefrom unless the Corporation shaU notify the City that, in the opinion of Independent Counsel, by nonpayment of any such items, the interest of the Corporation in the Project and the Site wiU be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or provide the Corporation with full security against any loss which may result from nonpayment, in form satisfactory to the Corporation and the Tmstee. Section 5.2. Modification of Project and Site. The City shaU, 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 to the Project, but not any additional buUdings or improvements, shaU thereafter comprise part of such Project and Site and be subject to the provisions of this Lease Agreement. Such additions, modifications and improvements shaU not in any way damage the Project and the Site or cause them to be used for purposes other than those authorized under the provisions of State and federal law; and the Project and the Site, upon completion of any additions, modifications and improvements made thereto pursuant to this Section 5.2, shaU be of a value which is not substantially less than the -10- value of the Project and the Site immediately prior to the making of such additions, modifications and improvements. The City will not permit any mechanic's or other hen to be established or remain against the Project or the Site for labor or materials fiimished in connection with any remodeling, additions, modifications, improvements, repairs, renewals or replacements made by the City pursuant to this Section 5.2; provided that if any such hen is established and the City shall first notify or cause to be notified the Corporation of the City's intention to do so, the City may in good faith contest any Uen filed or established against the Project or the Site, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide the Corporation with full security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to the Corporation. The Corporation will cooperate fuUy in any such contest, upon the request and at the expense of the City. Section 6.3. Public Liability and Property Damage Insurance. The City shaU maintain or cause to be maintained, throughout the Term of the Lease Agreement during the time the Project is under constmction or is completed (but during the period of constmction of the Project only if such insurance is not provided by a Contractor), insurance policies, including a standard comprehensive general insvirance policy or policies in protection of the City, the Corporation and the Tmstee, including their respective members, officers, agents and employees. Said policy or policies shaU provide for indemnification of said parties against direct or contingent loss or Uability for damages for bodily and personal injury, death or property damage occasioned by reason of the constmction or operation of the Project and the Site. Said policy or policies shall provide coverage in the minimum Uability limits of $1,000,000 for personal iiyury 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 $100,000 (subject to a deductible clause of not to exceed $5,000) for damage to property resulting from each accident or event. Such public Uability and property damage insurance may, however, be in the form of a single limit poUcy in the amount of $3,000,000 covering aU such risks. Such UabUity insurance may be maintained as part of or in coiy unction with any other UabiUty insurance coverage carried by the City, and may be maintained in the form of self- insurance by the City. The Net Proceeds of such liability insurance shall be appUed toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid. Section 5.4. Rental Intermption Insurance. The City shall procure, and maintain through the Term of the Lease Agreement during the time the Project is under constmction or is completed, rental intermption or use and occupancy insurance to cover loss, total or partial, of the use of any stmctures constituting any part of the Project during the Term of the Lease Agreement as a result of any earthquake or earth movement, in an amount at least equal to Lease Payments attributable to the Project for a period of eighteen months. The Net Proceeds of such insvirance shall be paid to the Tmstee and deposited in the Lease Payment Fund, and shall be credited towards the pa3mient of the Lease Payments in the order in which such Lease Payments come due and payable. The City shaU be permitted to self-insure for rental intermption or use and occupancy insurance required above, so long as: -11- (1) the City segregates within its funds an amount designated as a reserve for such loss; and (2) the City's UabiUty under such seU"-insurance is Umited to amounts on hand in such segregated reserve; and (3) the combined coverage under such self-msurance program and any other rental intermption or use and occupancy insurance are equal to the minimum insurance coverage indicated above. Section 5.5. Title Insurance. The City shaU provide, at its own expense, on or before the Closing Date, an ALTA title insurance policy (Westem Regional Exceptions) in a^Tr^^. """^ ^^^"^ ^'^^^ Hundred Ninety Thousand doUars ($8,690,000) msunng the City's leasehold estate in the Project and the Site, subject only to Permitted Encumbrances. All Net Proceeds received under said poUcy shall be deposited with the Tmstee in the Lease Payment Fund and shall be credited towards the prepayment ofthe remaining Lease Payments pursuant to Section 10.3 hereof. Section 5.6. Insurance Net Proceeds: Form of Policies. The poUcy of insurance reqmred by Section 5.4 hereof shall provide that aU proceeds thereunder shaU be payable to the Tmstee and applied as provided in Section 6.2 hereof. On or before July 1 of each year, the City shaU certify to the Tmstee that aU poUcies of insurance and any statements of self-msurance are in conformance with the requirements of this Lease Agreement. The City shall have the adequacy of any insurance reserves reviewed at least annuaUy by the City's risk manager or an independent insurance consultant and shall marntain reserves in accordance therewith. The City shaU pay or cause to be paid when due the premiums for all insurance policies required by this Lease Agreement AU such pohcies ShaU provide that the Tmstee shall be given thirty (30) days' notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. The Tmstee shaU not be responsible for the sufficiency or adequacy of any msurance herein required and shall be fuUy protected in accepting payment on account of such msurance or any adjustment, compromise or settlement ofany loss agreed to by the * rus LCC. Section 5 7. Advances. If the City shall fail to perform any of its obhgations under this Article V the Corporation may, but shall not be obligated to, take such action as may be necessaiy to cure such failure, including the advancement of money, and the City ShaU be obligated to repay all such advances as soon as possible, with interest at the rate of twelve percent (12%) per annum fi-om the date of the advance to the date of repayment. Section 5.8. Installation of City's Equipment. The City may at any time and fi-om time to time, m its sole discretion and at its own expense, install or permit to be instaUed items of equipment or other personal property in or upon any portion ofthe Project and the bite All such items shaU remain the sole property ofthe City, in which neither the Corporation nor the Tmstee shaU have any interest, and may be modified or removed by the City at any time provided that the City shafl repair and restore any and aU damage to the Project or the Site resulting fi-om the instaUation, modification or removal ofany such Items. Nothing in this Lease Agreement shaU prevent the City fi-om purchasing or leasing items to be mstaUed pursuant to this Section 5.8 under a lease or conditional sale -12- agreement, or subject to a vendor's Uen or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such Uen or security interest shaU attach to any part ofthe Project or the Site. Section 5.9. Liens. The City shaU not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, hen, charge, encumbrance or claim on or with respect to the Project or the Site, other than the respective rights ofthe Corporation and the City as provided herein and Permitted Encumbrances. Except as expressly provided in this Article V, the City shaU promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, Uen, charge, encumbrance or claim, for which it is responsible, if the same shaU arise at any time. The City shaU reimburse the Corporation for any expense incurred by it in order to discharge or remove any such mortgage, pledge, hen, charge, encumbrance or claim. Section 5.10. Private Business Use Limitation. The City shaU assure that (i) not in excess of ten percent (10%) of the Net Proceeds of the Certificates is used for Private Business Use if, in addition, the payment of more than ten percent (10%) ofthe principal or ten percent (10%) ofthe interest components of Lease Payments due during the Term of the Lease Agreement is, under the terms of this Lease Agreement or any underlying arrangement, directiy 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 City, in respect of property or borrowed money used or to be used for a Private Business Use; and (u) and that, in the event that both (A) in excess of five percent (5%) ofthe Net Proceeds of the Certificates are used for a Private Business Use, and (B) an amount in excess of five percent (5%) ofthe principal or five percent (5%) ofthe interest components of Lease Payments due during the Term of the Lease Agreement is, under the terms of this Lease 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 Busmess Use or is to be derived fi-om payments, whether or not to the City, 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 Net Proceeds of the Certificates used for a Private Business Use shaU be used for a Private Business Use related to the govemmental use of the Project. Section 5.11. Private Loan Use Limitation. The City shaU assure that not in excess of five percent (5%) of the Net Proceeds of the Certificates is used, directly or indirectly, to make or finance a loan (other than loans constituting Nonpurpose Obhgations or assessments) to persons other than state or local govemment units. Section 5.12. Federal Guarantee Prohibition. The City shaU not take any action or permit or suffer any action to be taken 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. -13- ARTICLE VI DAMAGE, DESTRUCTION JiND EMINENT DOMAIN; USE OF NET PROCEEDS Section 6.1. Eminent Domain. If aU of the Project and the Site shaU be taken permanently under the power of eminent domain or sold to a govemment threatening to exercise the power of eminent domain, the Term ofthis Lease Agreement shaU cease as of the day possession shaU be so taken. If less than aU of the Project and the Site shaU be taken permanently, or if aU of the Project or the Site or any part thereof shaU be taken temporarily under the power of eminent domain, (1) this Lease Agreement shaU continue m fuU force and efiect and shaU not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (2) there shaU 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 City and the Corporation 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. Section 6.2. Application of Net Proceeds. From Insurance Award. The Net Proceeds of any insurance award resulting fi-om any damage to or destmction of any portion of the Project by fire or other casualty shaU be paid by the City to the Tmstee, as assignee of the Corporation under the Assignment Agreement, and deposited in the Insurance and Condemnation Fund by the Tmstee and appUed as set forth in Section 7.01 ofthe Tmst Agreement. ^) From Eminent Domain Award. The Net Proceeds of any eminent domain award resulting fi-om any event described in Section 6.1 hereof shaU be paid by the City to the Tmstee, as assignee of the Corporation under the Assignment Agreement, and deposited in the Insurance and Condemnation Fund and applied as set forth in Section 7.02 ofthe Tmst Agreement. Section 6.3. Abatement of Lease Pavments in the Event of Damage or Destmction. The amount of Lease Payments shall be abated, during any period in which by reason of damage or destmction (other than by eminent domain which is hereinbefore provided for) there is substantial interference with the use and occupancy by the City of the Project (other than any portions of the Project described in Section 5.2 hereof) or the Site or any portion thereof. The amount of such abatement shall be agreed upon by the City and the Corporation 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 shafl continue for the period commencing with such damage or destmction and ending with the substantial completion of the work of repair or reconstmction. In the event of any such damage or destmction, this Lease Agreement shaU continue in fiill force and effect and the City waives any right to terminate this Lease Agreement by virtue of any such damage and destmction. Notwithstandmg the foregoing, there shall be no abatement of Lease Payments under this Section 6.3 to the extent that the proceeds of rental intermption insurance or amounts m the Reserve Fund are avaUable to pay Lease Payments which would otherwise be abated under this Section 6.3, it being hereby declared that such proceeds and amounts constitute special funds for the payment ofthe Lease Payments -14- ARTICLE vn DISCLAIMER OF WARRANTIES; ACCESS Section 7.1. Disclaimer of Warranties. The Corporation 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 City 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 Corporation be Uable for incidental, indirect, special or consequential damages in connection with or arising out of this Lease Agreement, the Agency Agreement or the Tmst Agreement for the existence, fumishing, functioning or the City's use of the Project or the Site. Section 7.2. Access to the Site and the Project. The City agrees that the Corporation and any Corporation Representative, and the Corporation's successors or assigns, shall have the right at afl reasonable times to enter upon and to examine and inspect the Project and the Site. The City further agrees that the Corporation, any Corporation Representative, and the Corporation'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 City to perform its obligations hereunder. Section 7.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Corporation 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 City, (u) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (in) any act or negligence of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Project or the Site, (iv) any act or negligence of any sublessee of the City with respect to the Project or the Site, or (v) the acquisition and constmction of the Project or the authorization of payment of the Acquisition and Constmction Costs and DeUvery Costs by the Corporation. No indemnification is made under this Section 7.3 or elsewhere in this Lease Agreement for willful misconduct, negligence, or breach of duty under this Lease Agreement by the Corporation, its officers, agents, employees, successors or assigns. -15- ARTICLE vm /ASSIGNMENT, SUBLEASING AND AMENDMENT Section 8.1. Assignment bv the Corporation. The Corporation's rights under this Lease Agreement, including the right to receive and enforce payment of the Lease Payments to be made by the City under this Lease Agreement have been assigned to the Tmstee pursuant to the Assignment Agreement. Section 8.2. Assignment and Subleasing bv the City. This Lease Agreement may not be assigned by the City. The City may sublease the Project and the Site or any portion thereof, but only with the written consent of the Corporation and subject to aU of the foUowing conditions: (i) This Lease Agreement and the obUgation of the City to make Lease Payments hereunder shaU remain obhgations ofthe City; and (u) The City shaU, within thirty (30) days afl;er the deUvery thereof, fiimish or cause to be fumished to the Corporation and the Tmstee a tme and complete copy of such sublease; and (iu) No such sublease by the City shafl 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 City shafl fumish the Corporation and the Tmstee with a written opinion of nationally recognized bond counsel, which shaU be an Independent Counsel, stating that such sublease does not cause the interest components of the Lease Payments to become subject to federal income taxes or State personal income taxes. Section 8.3. Amendment of this Lease Agreement. Without the prior written consent of the Tmstee, the City wifl 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 Article X ofthe Tmst Agreement. -16- ARTICLE DC EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default Defined. The following shall be "events of default" under this Lease Agreement and the terms "events of default" and "default" shall mean, whenever they are used in this Lease Agreement, with respect to the Project or the Site, any one or more of the foUowing events: (i) Failure by the City to pay any Lease Payment or other payment required to be paid hereunder at the time specified herein. (ii) Failure by the City 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) of this Section 9.1, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Corporation, the Tmstee, 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 Corporation, the Tmstee and such Owners shall not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the City within the appUcable period and diUgently pursued until the default is corrected. (iii) The filing by the City of a volvmtary petition in bankmptcy, or failure by the City promptly to lift any execution, garnishment or attacliment, or adjudication of the City as a bankmpt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankmptcy Act, as amended, or under any simUar acts which may hereafter be enacted. Section 9.2. Remedies on Default. Whenever any event of default referred to in Section 9.1 hereof shaU have happened and be continuing, it shafl be lawful for the Corporation to exercise any and afl remedies avaUable pursuant to law or granted pursuant to this Lease Agreement; provided, however, that notwithstanding anything herein or in the Tmst 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 City is expressly made a condition and upon the breach thereof the Corporation 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 shafl 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 Corporation, the City shall, as herein expressly provided, continue to remain Uable 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 -17- damages shafl be payable to the Corporation at the time and in the manner as herein provided, to wit: (a) In the event the Corporation does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (b) of this Section 9.2, the City agrees to and shall remain Uable for the pajonent of all Lease Pajonents and the performance of all conditions herein contained and shall reimburse the Corporation for any deficiency arising out of the re-leasing of the Project and the Site, or, in the event the Corporation is unable to re-lease the Project and the Site, then for the fufl amount of afl Lease Payments to the end of the Term of the Lease Agreement, but.said Lease Payments and/or deficiency shafl be payable only at the same time and in the same manner as hereinabove provided for the payment of Lease Pa3anents hereunder, notwithstanding such entry or re-entry by the Corporation or any suit in unlawful detainer, or otherwise, brought by the Corporation for the purpose of effecting such re- entry or obtaining possession of the Project and the Site or the exercise of any other remedy by the Corporation. The City hereby irrevocably appoints the Corporation as the agent and attomey-in-fact of the City to enter upon and re-lease the Project and the Site in the event of default by the City in the performance of any covenants herein contained to be performed by the City and to remove afl personal property whatsoever situated upon the Project and the Site to place such property in storage or other suitable place in the County of San Diego, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Corporation fi-om 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 Corporation or its duly authorized agents in accordance with the provisions herein contained. The City hereby waives any and all claims for damages caused or which may be caused by the Corporation 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 destmction of or injury to the Site or the Project and all claims for damages to or loss of any property belonging to the City that may be in or upon the Project and the Site. The City agrees that the terms of this Lease Agreement constitute fufl and sufficient notice of the right of the Corporation 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 Corporation in efiecting such re-leasing shafl constitute a surrender or tennination 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 City the right to terminate this Lease Agreement shafl vest in the Corporation to be efiected in the sole and exclusive manner hereinafler provided for in subparagraph (b) hereof. The City further waives the right to any rental obtained by the Corporation in excess of the Lease Payments and hereby conveys and releases such excess to the Corporation as compensation to the Corporation for its services in re- leasing the Project and the Site. (b) In an event of default hereunder, the Corporation at its option may terminate this Lease Agreement and re-lease all or any portion of the Project and the Site. In the event of the termination of this Lease Agreement by the Corporation at its option and in the manner hereinafler provided on account of default by the City (and notwithstanding any re-entry upon the Project or the Site by the Corporation in any manner whatsoever or the re-leasing or sale of the Project or the Site), the City nevertheless agrees to pay to the Corporation all costs, loss or damages howsoever arising or occurring payable at the -18- ( same time and in the same manner as is herein provided in the case of payment of Lease Payments. Any surplus received by the Corporation from such re-leasing shall be the absolute property of the Corporation and the City shall have no right thereto, nor shall the City be entitled to any credit in the event of a deficiency in the rentals received by the Corporation from the Project and/or the Site. Neither notice to pay rent or to deUver up possession of the premises given pursuant to law nor any proceeding in unlawful detainer taken by the Corporation shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law, or otherwise, unless and untU the Corporation shall have given written notice to the City of the election on the part of the Corporation to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Project and/or the Site or of the remainder of the Term of this Lease Agreement or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Corporation by such written notice. Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Corporation is intended to be exclusive and every such remedy shaU be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be constmed to be a waiver thereof, but any such right and power may be exercised fi"om time to time and as often as may be deemed expedient. In order to entitle the Corporation to exercise any remedy reserved to it in this Article IX it shaU not be necessary to give any notice, other than such notice as may be required in this Article IX or by law. Section 9.4. Agreement to Pay Attomeys' Fees and Expenses. In the event either party to this Lease Agreement should default under any of the provisions hereof and the nondefaulting party should employ attomeys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obhgation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it wifl on demand therefor pay to the nondefaulting party the reasonable fees of such attomeys and such other expenses so incurred by the nondefaulting party. Section 9.5. No Additional Waiver ImpUed by One 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 shaU be Umited to the particular breach so waived and shaU not be deemed to waive any other breach herevmder. Section 9.6. Application of Proceeds. Afl net proceeds received fi"om the re-lease or other disposition of the Project and the Site under this Article IX (namely, proceeds remaining after payment of costs specified in Section 13.03 of the Tmst Agreement), and all other amounts derived by the Corporation or the Tmstee as a result of an event of default hereunder, shall be transferred to the Tmstee promptly upon receipt thereof and shall be deposited by the Tmstee in the Lease Payment Fund to be appUed to the Lease Payments in order of payment date. Section 9.7. Tmstee and Certificate Owners to Exercise Rights. Such rights and remedies as are given to the Corporation under this Article IX have been assigned by the Corporation to the Tmstee under the Tmst Agreement, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Tmstee and the Owners of the Certificates as provided in the Tmst Agreement. -19- ARTICLE X PREPAYMENT OF LEASE PAYMENTS Section 10.1. Security Deposit. Notwithstanding any other provision ofthis Lease Agreement, the City may on any date secure the payment of aU or a portion of the Lease Payments remaining due by a deposit with an escrow holder under an escrow deposit and tmst agreement as referenced in Section 14.01(b) of the Tmst Agreement, of: (a) in the case of a security deposit relating to all Lease Payments, either (i) an amovmt 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 D, or (ii) Federal Securities specified in clause (A) of the definition thereof, together with cash, if required, in such amount as will, in the opinion of an independent certified pubUc accountant, together with interest to accme thereon and, if required, all or a portion of moneys or Federal Securities specified in clause (A) of the definition thereof then on deposit and interest eamings thereon in the Lease Pajrment Fund, the Insurance and Condemnation Fund and the Reserve Fund, be fiiUy sufficient to pay aU unpaid Lease Payments on their respective Interest Payment Dates; or (b) in the case of a security deposit relating to a portion of the Lease Payments, a certificate executed by a City Representative designating the portion of the Lease Payments to which the deposit pertains, and either (i) an amount which is sufficient to pay the portion of the Lease Payments designated in such City Representative's certificate, including the principal and interest components thereof, or (u) Federal Securities, together with cash, if required, in such amount as wfll, together with interest to be received thereon, if any, in the opinion of an independent certified public accountant, be fully sufficient to pay the portion of the Lease Payments designated in the aforesaid City Representative's certificate. In the event of a deposit pursuant to this Section 10.1 as to aU Lease Payments, afl obUgations of the City under this Lease Agreement shaU cease and terminate, excepting only the obUgation of the City to make, or cause to be made, afl payments fi*om the deposit made by the City pursuant to this Section 10.1, and title to the Project shafl vest in the City on the date of said deposit automaticaUy and without fiirther action by the City or the Corporation. Said deposit and interest eamings thereon shafl be deemed to be and shall constitute a special fund for the payments provided for by this Section 10.1 and said obligation shall thereafter be deemed to be and shaU constitute the instaUment purchase obUgation of the City for the Project. Upon said deposit, the Corporation wiU execute or cause to be executed any and afl documents as may be necessary to confirm title to the Project in accordance with the provisions hereof. In addition, the Corporation hereby appoints the City as its agent to prepare, execute and file or record, in appropriate offices, such documents as may be necessary to place record titie to the Project in the City. Section 10.2. Purchase Option. The Corporation hereby grants an option to the City to prepay the principal component ofthe Lease Payments in fufl, by paying the stipulated value ofthe Project set forth in Exhibit D hereto, or in part, but not in an amount of less than $20,000, together. -20- in any event, with a percentage of the portion of such principal component of Lease Payments prepaid equal to the percentages set forth below: Prepayment Period Premium July 15, 1998 through July 14, 1999 2.0% July 15, 1999 through July 14, 2000 1.5 July 15, 2000 through July 14, 2001 1.0 July 15, 2001 through July 14, 2002 0.5 July 15, 2002 and thereafter 0 Said option may be exercised with respect to Lease Payments on any Lease Payment Date commencing July 15, 1998. Said option shafl be exercised by the City by giving written notice to the Corporation and the Tmstee of the exercise of such option at least forty-five (45) days prior to said Lease Payment Date. Such option shafl be exercised in the event of prepayment in full, by depositmg with said notice cash in an amount, which, together with amounts then on deposit in the Reserve Fund, the Insurance and Condemnation Fund and the Lease Payment Fund, wiU be sufficient to pay the stipulated value of the Project and the Site on said Lease Payment Date as set forth in Exhibit D hereto, together with any Lease Payments then due but unpaid, or; in the event of prepayment in part, by depositing with said notice an amount divisible by $5,000 equal to the amount desired to be prepaid (but not less than $20,000) together with any Lease Payments then due but unpaid. In the event of prepayment in part, the partial prepayment shaU be applied against Lease Payments in inverse order of their Interest Payment Date. Lease Payments due after any such partial prepayment shaU be in the amounts set forth in a revised Lease Payment schedule which shaU be provided by the City and which shaU represent an adjustment to the schedule set forth in Exhibit D attached hereto taking into account said partial prepayment. Section 10.3. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City shall be obUgated to prepay the Lease Payments aUocable to the Project and the Site, in whole on any date or in part on any Lease Payment Date, fi-om and to the extent of any Net Proceeds of an insurance or condenmation award with respect to the Project or the Site theretofore deposited in the Lease Payment Fund for such purpose pursuant to Article VI hereof and Article VII of the Tmst Agreement. The City and the Corporation hereby agree that such Net Proceeds, to the extent remaining after payment of any delinquent Lease Payments, shafl be credited towards the City's obhgations vmder this Section 10.3. Section 10.4. Credit for Amounts on Deposit. In the event of prepayment of the principal components of the Lease Payments in fuU under this Article X, such that the Tmst Agreement shaU be discharged by its terms as a result of such prepayment, all amounts then on deposit in the Lease Payment Fund, the Acquisition and Constmction Fund or the Reserve Fund shaU be credited towards the amounts then reqviired to be so prepaid. -21- • ARTICLE XI MISCELLANEOUS Section 11.1. Notices. All notices, certificates or other communications herevmder shall be sufficiently given and shall be deemed to have been received 48 hours after deposit in the United States maU in first class form with postage fuUy prepaid: If to the City: City ofCarlsbad 1200 Elm Avenue Carlsbad, CaUfomia 92008 Attention: City Manager If to the Corporation: City of Carlsbad Public Improvement Corporation 1200 EUn Avenue Carisbad, CaUfomia 92008 Attention: President If to the Tmstee: The Bank of Califomia, N.A. 400 CaUfomia Street, 10th Floor San Francisco, Califomia 94104 Attention: Corporate Tmst Administration The Corporation, the City and the Tmstee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications wifl be sent. Section 11.2. Binding Effect. This Lease Agreement shafl inure to the benefit of and shafl be binding upon the Corporation and the City and their respective successors and assigns. Section 11.3. Severability. In the event any provision of this Lease Agreement shafl be held invaUd or unenforceable by any court of competent jurisdiction, such holding shafl not invaUdate or render unenforceable any other provision hereof. Section 11.4. Net-net-net Lease. This Lease Agreement shafl be deemed and constmed to be a "net-net-net lease" and the City hereby agrees that the Lease Payments shafl be an absolute net retum to the Corporation, fi-ee and clear of any expenses, charges or set-offs whatsoever. Section 11.5. Further Assurances and Corrective Instmments. The Corporation and the City agree that they wfll, from time to time, execute, acknowledge and deUver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instmments as may reasonably be required for correcting any inadequate or incorrect description of the Project or the Site hereby leased or intended so to be or for carrying out the expressed intention of this Lease Agreement. -22- Section 11.6. Execution in Counterparts. This Lease Agreement may be executed in several counterparts, each of which shaU be an original and afl of which shafl constitute but one and the same instrument. Section 11.7. AppUcable Law. This Lease Agreement shaU be govemed by and constmed in accordance with the laws of the State. Section 11.8. Corporation and City Representatives. Whenever under the provisions of this Lease Agreement the approval of the Corporation or the City is required, or the Corporation or the City is required to take some action at the request of the other, such approval or such request shafl be given for the Corporation by Corporation Representative and for the City by a City Representative, and any party hereto shall be authorized to rely upon any such approval or request. Section 11.9. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, Umit or describe the scope or intent of any provisions or Section of this Lease Agreement. -23- IN WITNESS WHEREOF, the Corporation 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 City 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. CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, as Lessor Vice 0feSttrent (SEAL) Attest: (til A<^A<f-u I. Secretary ' CITY OF CARLSBAD as Lessee (SEAL) Attest: City Clerk -24- EXHIBIT A DEFINITIONS "Acquisition and Construction Costs" means aU costs of payment of, or reimbursement for, acquisition and constmction of the Project, including but not limited to, architect and engineering fees, constmction contractor payments, costs of feasibiUty and other reports, inspection costs, performance bond premiums and permit fees. "Acquisition and Construction Fund" means the fimd by that name estabUshed and held by the City pursuant to Article III of the Tmst Agreement. "Agency Agreement" means that certain Agency Agreement, dated as of June 1, 1988, by and between the Corporation and the City. "Assignment /igreement" means the Assignment Agreement, dated as of June 1, 1988, by and between the Corporation and the Tmstee, together with any duly authorized and executed amendments thereto. "Business Day" means a day which is not a Saturday, Sunday or legal hoUday on which banking institutions in the State are closed or are required to close or a day on which the New York Stock Exchange is closed. "Certificate of Completion" means the certificate of a City Representative certifying that the Project has been acquired and constmcted by the City and that aU Acquisition and Constmction Costs have been paid. "Certificates" means the $8,690,000 aggregate principal amount of certificates of participation to be executed and delivered pursuant to the Tmst Agreement. "City" means the City of Carlsbad, a municipal corporation and general law city organized and existing under the laws ofthe State. "Cify Representative" means the City Manager of the City or any other person authorized by resolution of the City CouncU of the City to act on behalf of the City under or with respect to the Lease Agreement, the Tmst Agreement and the Corporation Agreement. "Closing Date" means June 28, 1988, being the date upon which there is an exchange of the Certificates for the proceeds representing the purchase of the Certificates by the Original Purchaser. "Code" means the Intemal Revenue Code of 1986. "Completion Date" means the earUer of (i) the date of substantial completion of acquisition and constmction of the Project as evidenced by the filing with the Tmstee of a Certificate of Completion, and (U) June 1, 1991. "Contractor" means the contractor(s) or vendor(s) from whom the Corporation or the City on behalf of the Corporation has ordered or caused to be ordered or with whom the Corporation or the City on behalf of the Corporation has contracted or caused to be contracted for the acquisition and constmction of the Project. "Corporation" means the City of Carlsbad Public Improvement Corporation, a nonprofit public benefit organized and existmg under and by virtue of the laws of the State. "Corporation Representative" means the President of the Corporation, or any other person authorized by resolution of the Corporation to act on behalf of the Corporation under or with respect to the Lease Agreement, the Tmst Agreement, the Agency Agreement and the Assignment Agreement. "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. "Delivery Costs" means aU items of expense directly or indirectly payable by or reimbursable to the City or the Corporation relating to the execution and dehvery of the Lease Agreement, the Tmst Agreement, the Agency Agreement and the Assignment Agreement or the execution, sale and deUvery of the Certificates, mcluding but not Umited to filing and recording costs, settlement costs, printing costs, reproduction and binding costs, initial fees and charges of the Tmstee, financing discounts, legal fees and charges, 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 m connection with the foregoing. "Delivery Costs Fund" means the fund by that name estabUshed and held by the Tmstee pursuant to Article Ul of the Tmst Agreement. "Escrow Fund" means the fund by that name estabhshed and held by the Tmstee pursuant to Section 6.06 of the Tmst Agreement "Event of Default" means an event of default under the Lease Agreement, as defined in Section 9.1 thereof. "Federal Securities" means any of the foUowing which are noncaflable and which at the time of investment are legal investments under the laws of the State for tmst funds held by the Tmstee: (a) direct general obUgations of (including obUgations issued or held in book entry form on the books ofthe Department ofthe Treasury ofthe United States of America), or obligations the payment of principal of and interest on which are guaranteed by, the United States of America; or (b) any of the foUowing obUgations of the foflowing agencies of the United States of America: (i) direct obUgations of the Export-Import Bank; (u) certificates of beneficial ownership issued by the Farmers Home Administration; (iu) participation certificates Exhibit A Page 2 issued by the General Services Administration; (iv) mortgage-backed bonds or pass- through obligations issued and guaranteed by the Govemment National Mortgage Association; (v) project notes issued by the United States Department of Housing and Urban Development; and (vi) pubhc housing notes and bonds guaranteed by the United States of America. "Fiscal Year" means the twelve-month period beginning on July 1 of any year and ending on June 30 of the next succeeding year, or any other twelve-month period selected by the City as its fiscal year. "Gross Proceeds" means the sum ofthe foUowing amounts: (a) original proceeds, namely, net amounts (after payment of aU expenses of executing and delivering the Lease Agreement and the Certificates) received by or for the City as a result of the sale of the Certificates, excluding original proceeds which become transferred proceeds (determined in accordance with apphcable Regulations) of obligations issued to refund in whole or in part the Lease Payments; (b) investment proceeds, namely, amounts received at any time by or for the City, such as interest and dividends, resulting from the investment of any original proceeds (as referenced in paragraph (a) above) or investment proceeds (as referenced in this paragraph (b)) in Nonpurpose ObUgations, mcreased by any profits and decreased (if necessary, below zero) by any losses on such investments, excluding investment proceeds which become transferred proceeds (determined in accordance with appUcable Regulations) of obUgations issued to refund in whole or in part the Lease Payments; (c) sinking fund proceeds, namely, amounts, other than original proceeds or investment proceeds (as referenced in paragraphs (a) and (b) above) of the Certificates, which are held in any Lease Payment Fund and any other fund to the extent that the City reasonably expects to use such other fund to pay Lease Payments; (d) amounts in the Reserve Fund and in any other fund estabUshed as a reasonably required reserve or replacement fund; (e) Investment Property pledged as security for payment of Lease Payments by an ultimate obligor or a related person or by the City; (f) amounts, other than as specified in this definition, used to pay Lease Payments; and (g) amounts received as a result of investing amounts described in this definition. "Independent Counsel" means an attomey 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 Corporation, the Tmstee or the City. "Information Services" means Financial Information, Inc.'s "Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond Service," 55 Broad Street, 28th Floor, New York, New York 10004; Moody's "Municipal and Govemment," 99 Church Street, Exhibit A Page 3 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard & Poor's "CaUed Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; or to such other addresses and/or such other national information services providing information or disseminating notices of redemption of obligations such as the Certificates and designated by the City in a written request signed by a City Representative filed with the Tmstee. "Insurance and Condemnation Fund" means the fund by that name established and held by the Tmstee pursuant to Section 7.01 ofthe Tmst Agreement. "Interest Payment Date" means the first day of each Febmary and August, commencing Febmary 1, 1989, so long as any Certificates are Outstanding. "Investment Property" means any security (as said term is defined in section 165(g)(2)(A) or (B) of the Code), obUgation, annuity or investment-type property, excluding, however, obligations the interest on which is exempt fi-om income tax under section 103 of the Code. "Lease Agreement" means the Lease Agreement, dated as of June 1, 1988, by and between the Corporation and the City, together with any duly authorized and executed amendments thereto. "Lease Payments" means all payments required to be paid by the City pursuant to Section 4.4 of the Lease Agreement, including any prepayment thereof pursuant to Article X of the Lease Agreement, which payments consist of an interest component and a principal component. "Lease Payment Date" means the fifteenth (15th) day of July and January in each year during the Term ofthe Lease Agreement, commencing January 15, 1989. "Lease Payment Fund" means the fund by that name estabhshed and held by the Tmstee pvirsuant to Section 5.02 of the Tmst Agreement. "Moody's" means Moody's Investors Service, or its successors. "Net Proceeds," when used with respect to insurance or condemnation 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 aU expenses incurred in the collection thereof. "Net Proceeds," when used with reference to the Certificates, means the face amount of the Certificates, plus accmed interest and premium, if any, less original issue discount and less proceeds deposited in the Reserve Fund. "Nonpurpose Obligation" means any Investment Property which is acquired with the proceeds of the Certificates and is not acquired in order to carry out the govemmental purpose of the Lease Agreement. "Notes" means the Notes of the City issued on July 16, 1987 in the principal amount of $6,555,000, and maturing June 30, 1988. Exhibit A Page 4 "Original Purchaser" means Rauscher Pierce Itefsnes, Inc., as original purchaser ofthe Certificates. "Outstanding", when used as of any particular time with respect to Certificates means isnh\ect to thf provisions of Section 10.03 of the Tmst Agreement) aU Certificates Teretofore ^^^^^^^^^ and deUvered by the Tmstee under the Tmst Agreement except - (a) Certificates theretofore canceUed by the Tmstee or surrendered to the Tmstee for cancellation; (b) Certificates for the payment or redemption of which funds or Federal Securit es hi the necessary amount shafl have theretofore been deposited with the Tmstee (wiSther upon or ^nor to the maturity or redemption date of such Certificates) prT^ded that if su^^^ Certificates are to be redeemed prior to maturity notice of such rirwion shall have been given as provided in Section 4.03 ofthe Tmst Agreement or ;:Son L^^^^^^^^ shafl have been made for tiie giving of such notice; and (c) Certificates in lieu of or in exchange for ^^^ifV^Q^^'^^^of i been executed and delivered by the Tmstee pursuant to Section 2.09 of the Tmst Agreement. "Owner" or "CerUficate Owner" or "Owner of a CerUficate", or any similar term, when used with respect to a Certificate means the person m whose name such Certificate shafl be registered. "Permitted Encumbrances" means, as of any particular time: (a) Uens for general ad ^lorem taxes and assessments, if any, not then delinquent, or which the City may p^^^^^^ to provisions of Article V of the Lease Agreement, permit to remam mpaid S the Assignment Agreement; (c) the Lease Agreement; d) any nght or da^ni ^f Z m;chanic, laborer, materialman, suppher or vendor not ^ <)r perfec ed m the manner prescribed by aw; (e) easements, rights of way, mineral nghts dnlling nghts Td X^Ss reservatiins, covenants, conditions or restrictions which exist of record afofIt (Sosi^g Datrand wkich the City certifies in writing wfll not matenally mipau- ?he uie of thriite for the Project; and (f) easements, rights of way, mmeral nghts, drilling rights and other rights, Reservations, covenants, conditions or restnctions Sfshed^^^^^^^^^ ofthe Lease Agreement and to which the Corporation and the City consent m writing. "Permitted Investments" means any of the foflowing which at the time of investmrntTrfletltU^^ under the laws ofthe State for the moneys proposed to be invested therein: (a) Federal Securities; (b) Any of the following obligations of federal agencies not guaranteed by t^^^ TTnitPd States of America- (i) debentures issued by the Federal Housmg Admmistration, "i^Xa^^^t^^^^^^ or senior debt obligations of the Fede^^^^^^^^ Mortgage (Corporation or Fann Credit Banks (consisting of Federal Land B^nks Federal ^?e4ediate aedit Banks, or Banks for Cooperatives); (in) mortgage-backed secunties Exhibit A Page 5 or senior debt obhgations of tiie Federal National Mortgage Association; or (iv) credit- backed or senior debt obhgations ofthe Student Loan Marketing Association. (c) interest-bearing demand or tune deposits (including certificates of deposit) m federal or State chartered savings and loan associations or m federal or btate banks (including the Tmstee), provided that (i) the obUgations of such savmgs and oan association or bank or the obUgations of the holding company of such savings and loan association or bank cany one of the three highest Rating Categones by Moody s and S&P, or (U) such deposits are insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation; (d) obhgations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations cany one of the three highest long-tenn Rating Categories provided by Moody s and S&P; (e) repurchase agreements with any bank, savings institution or tmst company (including the Tmstee) which is msured by the Federal Deposit Insurance Coiporation or the Federal Savings and Loan Insurance Corporation, or with any broker-dealer with retafl customers which faUs under Securities Investors Protection Corporation protection, provided that such repurchase agreements are fuUy secured by Federal Secunties or ObUgations of any agency or instmmentaUty of the United States of Amenca, and prodded further that (i) such coUateral is held by the Tmstee or any agent actmg solely for the Tmstee during the term of such repurchase agreement, (u) such coUateral is not subject to Uens or claims of third parties, (ui) such coUateral has a market value (detennined at least once every 30 days) at least equal to the amount mvested m the repurchase agreement, (iv) tiie Tmstee has a perf-ected first security mterest m the coUateral, (v) the agreement shaU be for a tenn not longer than 180 days and (vi) the faflure to maintain such coUateral at the level required in (ui) above wiU reqmre the Tmstee to serve notice to the other party to con-ect such deficiency. If such deficiency is not corrected, the Tmstee is directed to Uquidate the coUateral; (f) money market fimds: (i) comprised exclusively of Federal Securities; or (u) for amounts of less tiian $100,000, maintamed by the bankmg department of the TVustee, so long as the Tmstee, or its parent, has a combined capital and surplus of at least $50,000,000. (g) commercial paper having original maturities of not more than 180 days and rated in the highest Rating Category by Moody's and S&P; (h) bifls of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, which have a maturity of not more tiian 270 days and which are eUgible for purchase by the Federal Reserve System and the obligations of which commercial bank or the obUgations ofthe holding company of which cany one ofthe three highest long-term Rating Categories by Moody's and S&P; and (i) tax-exempt obUgations rated in one of the three highest ratmg categories by Moody's and S&P. Exhibit A Page 6 "Principal Corporate Trust Office" means the corporate tmst office of the Tmstee at 400 Califomia Street, San Francisco, Califomia, or at such other address designated by the Tmstee in written notice filed with the City and the Corporation 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 pubhc. "Project" means the improvements to be constmcted on the Site, all as more particularly described in Exhibit C attached to the Lease Agreement. "RaUng Category" means, with respect to any Permitted Investment, one or more of the generic categories of rating by Moody's or S&P apphcable to such Permitted Investment, without regard to any refinement or graduation of such rating category by a plus or minus sign. "Registration Books" means the records maintained by the Tmstee pursuant to Section 2.12 of the Tmst Agreement for registration of the ownership and transfer of ownership of the Certificates. "Regular Record Date" means the close of business on the fifteenth (15th) day of the month preceding each Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day. "Regulations" means temporary and permanent regulations promulgated under the Code. "Rental Period" means each twelve-month period during the Term of the Lease Agreement commencing on August 2 in any year and ending on August 1 in the next succeeding year except that the first Rental Period shaU mean the period starting on June 1, 1988 and ending on August 1, 1989. "Reserve Fund" means the fund by that name estabhshed and held by the Tmstee pvirsuant to Section 6.01 of the Tmst Agreement. "Reserve Requirement" means an amount equal to $869,000. "S&P" means Standard & Poor's Corporation, of New York, New York, or its successors. "Securities Depositories" means The Depository Tmst Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; Midwest Securities Tmst Company, Capital Stmctures-CaU Notification, 440 South LaSaUe Street, Chicago, niinois 60605, Fax-(312) 663-2343; Philadelphia Depository Tmst Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex-(215) 496-5058; or to such other addresses and/or such other registered securities depositories holding substantial amounts of obhgations of Exhibit A Page 7 types comprising the Certificates and designated by the City in a written request signed by a City Representative filed with the Tmstee. "Site" means aU of that certain real property located in the City described in Exhibit B to the Lease Agreement, on which the Project is to be constmcted. "State" means the State of CaUfomia. "Term of the Lease Agreement" means the time during which the Lease Agreement is in effect, as provided in Section 4.2 ofthe Lease Agreement. "Trust Agreement" means the Tmst Agreement, dated as of Jvme 1, 1988, by and among the City, the Corporation and the Tmstee, together with any duly authorized amendments thereto. "Trustee" means The Bank of California, N.A., or any successor thereto, actmg as Tmstee pursuant to this Tmst Agreement. Exhibit A Page 8 JITB DESCRIPTION OF THE SITE PARCEL It PORTIONS OF LOTS 8, 9, 10, 11, 12, 13, 14, 15 AND 16 IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID TRACT; THENCE AIONG THE EAST LINE OF SAID TRACT NORTH 00'56'20" EAST, 2263.66 FEET, SAID POINT BEING SOUTH 00'56•20" WEST, 414.74 FEET FROM THE WEST QUARTER CORNER OF SECTION 32, TOWNSHIP 11 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; THENCE NORTH 89'IS'10" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING; SAID POINT BEING ON A HON-TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 310.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 43'14'53" WEST; THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*33'00", AN ARC DISTANCE OF 224.81 FEET; THENCE LEAVING SAID CURVE NORTH 89*18'10" WEST 557.72 FEET; THENCE SOUTH 61'25'08* WEST 305.23 PEET; THENCE NORTH 10'19'07" WEST, 374.05 FEET; THENCE NORTH 79'40'53" EAST, 72.00 FEET; THENCE NORTH 02'01'30" WEST, 699.16 FEET TO A POINT ON A bN-TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 761.50 *EET, A RADIAL LINE TO SAID POINT BEARS NORTH 10'06'51" EAST; THENCE SOUTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03''23'09", AN ARC DISTANCE OF 45.00 FEET; THENCE TANGENT TO SAID CURVE SOUTH 76*30'00" EAST, 350.95 FEET; THENCE NORTH 1.00 FOOT; THENCE SOUTH 76*30'00" EAST, 339.00 FEET; THENCE SOUTH 350.00 FEET; THENCE SOUTH 06*51'59" EAST 261.11 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLIOWS: COMMENCING AT THE NORTHEASTERLY CORNER OF CARLSBAD TRACT NO. 77-2, UNIT NO. 2, ACCORDING TO MAP THEREOF NO. 9813 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, SEPTEMBER 26, 1980; THENCE NORTH 1*01'10" EAST, ALONG THE EASTERLY LINE OF SAID HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1,843.48 FEET; THENCE NORTH 89'11'20" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING AND THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 310.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*32'50", AN ARC DISTANCE OF 224.79 FEET; THENCE LEAVING SAID CURVE, NORTH 89*11»20" WEST, 30.085 FEET TO THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A #1 Page 1 of 6 «"'^/^ ORDER NO. 969457-18 RM 1402 TA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS OF 340.00 FEET; ™ZNCE N^V^LOH. S^^^^^ S!Jv?S^ S*^lTc^VE*VolVH'VM^S9-^^Tr^f.'?i FEET TO THE TBUE POIHT OF BEGINNING. pftPCEL 2; n IR 23 24. 25, CANON STREET AND PORTIONS OF LOTS 8, 9, ^'J-t'Jr.'J^l FOREST COMPANY'S TRACT NO. 1, % ^T"H?^^X^VVFT^^^^^^^^ -^^CE^^OF^J^r^^^^^^ ^^^^^^^S^'^^^^^^C'^ 8"?9°o/ys«c^i°BS^AS FOLXOWS: COMMENCING AT THE HOST SOUj^^^ ^OrSA'iD^'Lo'?^2l%5STr2^ 2^^^ THENCE ALONG THE SOUTWJESTERLY ^^^^ ^E WEST 195.00 FEET; TOENCE N^^^^ NORTH 18'09^57'5 WEST, 40.89 FEET TO TRUE POINT OF BEGINNING; JHENCE NORTO NORTHEASTERLY AND HAVING A iHE BEGINNING OF ^ TJJ^GENT CTRVE C^^ TROUGH RADIUS OF 1042.00 FEET; THENCE NOR^EST^^ ^^^^^ ^^^.^ blnT'-To^^^s^io'^c^^^'S^™*^^^^ BEGINNIHG OF * ^AHGEOT OW^ JJ^^J^^^ RADIOS OF 10«;00 FEET; TOEHCE TO^ TOENCE =™ol °0%oSlfT?^H'SToKSJ|M^;j^''«K-^^^ SOUTH 00-01'30" EAST 699.16 FEET; THENCE SOUTH ;5_J0 "^^J 68*30'20'' IEET; THENCE SOUTH 10*19'07" EAST 374.05 FEET; THENCE SOUTH 68 30 WESTI 541.94 FEET TO THE TRUE POINT OF BEGINNING. Ti Page 2 of 6 «RM 1402 ,TA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 42.00 FEET EACH EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND. SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF THEREON NORTH 23-27'45" WEST, "5.00 FEET FR^^ THEREOF; THENCE LEAVING SAID WESTERLY LIN^ (RECORD NORTH 68'30'28" EAST PER DEED) 402.52 FEET TO TH^^ 6T BEGINNING; THENCE NORTH " lOJl^i: sj^^J' J^^VINGTR^^ OF BEGINNING OF A TANGENT am^J, CONCAVE 1000.00 FEET; THENCE ALONG SAID CTO\^ TI«0^ 14-35'23", AN ARC ^I^^CE OF 254.64 ^^^^E^SING OF A TANGENT CURVE NORTH 3*27'44'' WEST, 109.90 FEM ^^^^^^ CURVE, CONCAVE WESTERLY J^D HAVI^^ ^ Si1?L.cf ^O? 3??!?0 EEP|HEN\EJ^^^ fo SAID O^VE NO^^^ THROUGH A CENTRAL i^G^^ LEsS, TO THE A?S So5?HERLY RIGHT OF WAY LINE OF MARRON ROAD. .tPf-ET, 3! PORTIONS OF LOTS 22, " °f ^t^T'il-^^d^^^". COUNTY, JUNE 8, 1908, DESCRIBED AS FOLIOWS: SONSVE NORTHEASTERLY AHD HAVING A Ir^i-J^S" =C^f 3^0? SrTS«5S="TR5E=IS?Sf or^^^^ roH??So?Nl S SAJS CURVE THROUGH A "•JJ?*^'^^!^ °' "^^'^i^R^ ???3.V/3^-vS=ST°A.^0i%l^^-^™Sr^^^^^ HHRSSLV JD-LVTNGT ^^'^ ^^OTE^T= iSs-^^crS? ?J?!'30^STrSE\=%rs^^ Page 3 of 6 *FORM 1402 J^^TA OWNER'S POLICY ^WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 c 15'35'16" WEST 108.41 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 88'16'48", AN ARC DISTANCE OF 30.82 FEET TO A POINT OF REVERSE CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 838.50 FEET; THENCE WESTERLY ALONG SAID REVERSE CURVE THROUGH A CENTRAL ANGLE OF 32'08'52", AN ARC DISTANCE OF 470,47 FEET; THENCE SOUTH 07*34'20" WEST 213.72 FEET; THENCE SOUTH 64*59*00" EAST 248.29 FEET; THENCE SOUTH 25*53*13" EAST 590.00 FEET; THENCE SOUTH 66*45*50" EAST 330.26 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND, 42.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF SAID LOT 25 DISTANT THEREON NORTH 23*27*45" WEST, 195.00 FEET FROM THE SOUTHWEST CORNER THEREOF; THENCE LEAVING SAID WESTERLY LINE NORTH 68*37'10" EAST (RECORD NORTH 68*30'28" EAST PER DEED) 402.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*03*07" WEST, 38.57 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE EASTERLY AND HAVING A RADIUS OF 1000.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35*23", AN ARC DISTANCE OF 254.64 FEET; THENCE TANGENT TO SAID CURVE NORTH 3*27*44" WEST, 109.90 FEET TO THE BEGINNING OF A TANGENT VE, CONCAVE WESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE LONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25*22*30", AN ARC DISTANCE OF 354.30 FEET; THENCE TANGENT TO SAID CURVE, NORTH 28* 50'14" WEST, 106.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*21*49", AN ARC DISTANCE OF 186.59 FEET; THENCE NORTH 15*28*25" WEST, 30.00 FEET, MORE OR LESS, TO THE SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. THE SIDELINES OF SAID 84 FOOT WIDE STREET SHALL TERMINATE WITH 20.00 FOOT RADIUS RETURNS AT SAID SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. -^I^UR' ^P^LOl PARCEL 4: THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 20; THENCE ALONG THE EASTERLY LINE THEREOF, NORTH 06*58*00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 505.81 FEET; THENCE NORTH 89*29*00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 49*22*30" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE Page 4 of 6 - 21^^ ORDER NO. 969457-18 ^LL' ,TA OWNER *S POLICY WESTERN REGIONAL EXCEPTIONS ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24*55", A DISTANCE OF 43 72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35*12*35" EAST 449.44 JEEJ TO THE BESING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE ?S^SuGH A ciiTRAL ANGLE OF 37*47*39", A ^STANCE OF 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00*14" EAST 111.94 FEET TO THE McJ^NINrOF A f^GENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CTRVE THOUGH A CENTRAL ANGLE OF 86*40*30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 8^2.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY AIONG TOE A^^ CURVE THPONCH A CENTRAL ANGLE OF 24*45'00", A DISTANCE OF 363.72 FEET; ?^Ncf SOUTS 44^5'44''^ST 161.50 FEET TO A POINT WHICH BEARS NORTH 70*28'24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THOSE PORTIONS LYING NORTHEASTERLY OF THE SOUTHWESTERLY LINE OF SAID EUCALYPTUS STREET. PARCEL 5; THOSE PORTIONS OF LOTS 19 AND 20 IN HOSP EUCALYPTUS FOREST COMPANYS •RACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID IOT 20; THENCE AIONG THE SOUTHERLY LINE OF SAID LOTS 20 AND 19, NORTH 89*29*00" WEST 781.61 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 29*16*10" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 20*06'20", A DISTANCE OF 162.30 FEET; THENCE SOUTH 89*29'00" EAST 213.74 FEET; THENCE NORTH 70*28*24" EAST 505.81 FEET TO AN INTERSECTION WITH THE EASTERLY LINE OF SAID LOT 20; THENCE ALONG SAID EASTERLY LINE, SOUTH 06*58*00" WEST 278.00 FEET TO THE POINT OF BEGINNING. PARCEL 6; THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLIOWS: Page 5 of 6 '^FORM'1402 AkLTA OWNER'S POLICY WVJESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 20; THENCE ALONG THE EASTERLY LINE THEREOF; NORTH 06*58'00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 505.81 FEET; THENCE 89*29*00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE JJE^WHICT BEJ^S SOUTH 49*22'30" EAST TO SAID POINT; THENCE NORTHEASTERLY AWNG^^ ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24'55', A DISTANCE OF 43 72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35*12*35" EAST 449.44 FEET TO THE BEGINNING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 37*47*39", A DISTANCE ?E 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00*14" EAST 111.94 FEET TO THE BEGINNING OF A TANGENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 86*40*30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 842.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 24*45*00", A DISTANCE OF 363.72 FEET; THENCE SOUTH 44*55*44" WEST 161.50 FEET TO A POINT WHICH BEARS NORTH 70*28'24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. Page 6 of 6 EXHIBIT C DESCRIPTION OF THE PROJECT The City wfll constmct two major improvements within the Hosp Grove property. First, Monroe street wfll be widened by the addition of one south bound lane for a length of 1100 feet at the intersection with Marron including sidewalk, curb, gutter and streetlights. This lane wifl provide better access to Monroe from Marron by widening the intersection and providing tum lanes. Second, a 54" diameter storm drain 1100 feet long wifl be constmcted along the west side of Monroe St. to enclose an existing open ditch. E^ibit C EXHIBIT D SCHEDULE OF LEASE PAYMENTS SEMI-ANNUAL ANNUAL DATE PRINCIPAL INTEREST TOTAL TOTAL 01/15/89 431,723.33 431,723.33 07/15/89 115,000.00 323,792.50 438,792.50 870,515.83 01/15/90 115,000.00 320,773.75 320,773.75 07/15/90 235,000.00 320,773.75 555,773.75 876,547.50 01/15/91 235,000.00 314,311.25 314,311.25 07/15/91 250,000.00 314,311.25 564,311.25 878,622.50 01/15/92 307,123.75 307,123.75 07/15/92 260,000.00 307,123.75 567,123.75 874,247.50 01/15/93 299,323.75 299,323.75 07/15/93 275,000.00 299,323.75 574,323.75 873,647.50 01/15/94 290,730.00 290,730.00 07/15/94 295,000.00 290,730.00 585,730.00 876,460.00 01/15/95 281,142.50 281,142.50 07/15/95 315,000.00 281,142.50 596,142.50 877,285.00 01/15/96 270,590.00 270,590.00 07/15/96 330,000.00 270,590.00 600,590.00 871,180.00 01/15/97 259,205.00 259,205.00 07/15/97 355,000.00 259,205.00 614,205.00 873,410.00 01/15/98 246,780.00 246,780.00 07/15/98 380,000.00 246,780.00 626,780.00 873,560.00 01/15/99 380,000.00 233,100.00 233,100.00 07/15/99 410,000.00 233,100.00 643,100.00 876,200.00 01/15/00 217,930.00 217,930.00 07/15/00 435,000.00 217,930.00 652,930.00 870,860.00 01/15/01 201,400.00 201,400.00 07/15/01 470,000.00 201,400.00 671,400.00 872,800.00 01/15/02 470,000.00 182,600.00 182,600.00 07/15/02 510,000.00 182,600.00 692,600.00 875,200.00 01/15/03 510,000.00 162,200.00 162,200.00 07/15/03 555,000.00 162,200.00 717,200.00 879,400.00 01/15/04 555,000.00 140,000.00 140,000.00 07/15/04 600,000.00 140,000.00 740,000.00 880,000.00 01/15/05 116,000.00 116,000.00 07/15/05 640,000.00 116,000.00 756,000.00 872,000.00 01/15/06 640,000.00 90,400.00 90,400.00 07/15/06 695,000.00 90,400.00 785,409.00 875,800.00 01/15/07 62,600.00 62,600.00 07/15/07 750,000.00 62,600.00 812,600.00 875,200.00 01/16/08 32,600.00 32,600.00 07/15/08 815,000.00 32,600.00 847,600.00 880,200.00 Exhibit D 13061-03 JHHW:WHM:ct OS/13/G^B M6699 ct 05/20/8 pch 05/26/88" AGENCY AGREEMENT by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION and the CITY OF CARLSBAD Dated as off June 1,1988 (HOSP GROVE PROJECT) AGENCY AGREEMENT THIS AGENCY AGREEMENT, made and entered into as of June 1, 1988, by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, a public body corporate and politic organized and existing under the laws of the State of California (the "Corporation"), and the CITY OF CARLSBAD, a municipal corporation and general law city organized and existing under the laws of the State of California (the "City"); WITNESSETH: WHEREAS, the Corporation and the City have entered into a Lease Agreement, dated as of the date hereof (the "Lease Agreement"), whereby the Corporation agrees to lease certain improvements to Hosp Grove (the "Project") more particularly described in Exhibit C attached to the Lease Agreement, to the City, and the City agrees to lease the Project from the Corporation; WHEREAS, it is in the interest of the Corporation and the City that the Corporation appoint the City as its agent for the purposes of acquisition and construction of the Project, and the Corporation has agreed in the Lease Agreement to appoint the City as its agent for said purposes; NOW, THEREFORE, in the joint and mutual exercise of their powers, and in consideration of the above premises and of the mutual covenants herein contained and for other valuable consideration, the parties hereto DO HEREBY AGREE as follows: Section 1. Definitions. The terms capitalized in this Agency Agreement shall have the meanings ascribed to them in the Lease Agreement and in the Trust Agreement, dated as of the date hereof, among the Corporation, the City and The Bank of California, National Association, as trustee (the "Trust Agreement"). Section 2. Appointment of City. The Corporation hereby appoints the City as its agent to carry out ail phases of the acquisition and construction of the Project, and the City, as agent of the Corporation, assumes all rights, duties, responsibilities and liabilities of the Corporation regarding supervision, acquisition and construction of the Project, except as limited herein. Section 3. Contracts, Bids and Pavments. The City, as agent of the Corporation, may enter into any purchase order, agreement or contract required for acquisition and construction of the Project upon being assured that moneys sufficient for the payment thereof are then on deposit In the Acquisition and Construction Fund created pursuant to the Trust Agreement. The benefits of all bids received by the City for the Project shall be and shall be deemed to be assigned by the City to the Corporation. Section 4. Proiect Description. The City, as agent of the Corporation, shall have the right to make any changes in the description of the Project or of any component thereof whenever the City deems such changes to be necessary and appropriate; provided, however, that the amounts in the Acquisition and Construction Fund are sufficient to pay Acquisition and Construction Costs resulting from such changes. Section 5. Supervision of Acquisition, Construction, Equipping and Installation. The City, as agent of the Corporation, shall have sole responsibility for, and shall supervise, acquisition and construction of the Project. The City shall monitor the performance by any contractor to the extent the City deems appropriate. The City shall permit the Corporation or its assignee to inspect the Project at any and all reasonable times which are deemed appropriate by the Corporation or its assignee. Section 6. Enforcement of Contracts. The Corporation hereby assigns to the City all rights and powers to enforce and execute in its own name or the name of the Corporation such purchase orders or contracts as are required for the Project which enforcement may be at law or in equity; provided, however, that the assignment made by the Corporation herein shall not prevent the Corporation or its assignee from asserting said rights and powers in its own behalf following written notice to the City. Section 7. Fixed Price. The Corporation shall not be responsible for payment of, nor shall it pay nor permit to be paid by the Trustee pursuant to the Trust Agreement, any amount for the Project in excess of the amount available therefor in the Acquisition and Construction Fund held by Trustee pursuant to the Trust Agreement. The City shall pay said excess amount to the extent of lawfully available funds. Section 8. Inspection of Records. The Corporation shall have the right to inspect periodically the books and records of the City relating to the Project, and the City shall permit the Corporation to make such inspections thereof at all reasonable times as the City shall deem appropriate. Section 9. Time of Completion. The acquisition and construction of the Project shall be completed by the Completion Date. Section 10. Specifications. The City agrees that it will assure that the Project will be acquired, constructed and installed in accordance with final plans and specifications approved by the City. Upon completion of acquisition and construction of the Project, the City will assure that there is filed with the Trustee a certificate executed by an Authorized Officer of the City and stating that such acquisition and construction of the Project has been completed in accordance with specifications therefor approved by the City. Section 11. Performance Security. The City may, if it deems appropriate, require the provision of bid bonds or performance bonds in such percentage of the bid or contract price as it deems desirable in advertising for and in awarding contracts or making purchase orders. -2- IN WITNESS WHEREOF, the Corporation and the City have caused this Agency Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written. CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Vice Pr^jaferit^^^ Attest _ (U-XU / (?^AT^^UA^ , Secretary / Attest dJcr/j^^ J. QrxZZZJi..^ City Clerk F CITY OF CARLSBl^^D -3- 13061-03 Jg^ JHHT»':WHM:pch FINAL M6696 TRUST AGREEMENT Dated as of June 1, 1988 by and among THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION, as Trustee, the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION and the CITY OF CARLSBAD (HOSP GROVE PROJECT) M6696 TABLE OF CONTENTS Page AKTICLE I DEFINITIONS Section 1.01. Definitions 2 Section 1.02. Authorization 2 Section 1.03. Exhibits 2 Sect! Sect: Sect! Sect Sect: Sect: Sect] Sect! Sect! Sect! Sect! Sect] ARTICLE n THE CERTIFICATES OF PARTICIPATION on 2.01. Authorization 3 on 2.02. Date; Payment of Interest 3 on 2.03. Maturity; Interest Rates 3 on 2.04. Form of Certificates; Interest 3 on 2.05. Form 4 on 2.06. Execution 4 on 2.07. Application of Proceeds 4 ion 2.08. Transfer and Exchange 4 on 2.09. Certificates Mutilated, Lost, Destroyed or Stolen 5 on 2.10. Payment 5 on 2.11. Execution of Documents and Proof of Ownership 6 on 2.12. Registration Books 6 ARTICLE m ACQUISITION AND CONSTRUCTION FUND; DELIVERY COSTS FUND Section 3.01. Acquisition and Construction Fund 7 Section 3.02. Payment of Acquisition and Construction Costs 7 Section 3.03. Delivery Costs Fund 8 Section 3.04. Payment of Delivery Costs 8 Section 3.05. Transfers of Unexpended Proceeds 8 Page ARTICLE IV REDEMPTION OF CERTIFICATES Section 4.01. Redemption 9 Section 4.02. Selection of Certificates for Redemption 10 Section 4.03. Notice of Redemption 10 Section 4.04. Partial Redemption of Certificate 11 Section 4.05. Purchase of Certificates 11 ARTICLE V LEASE PAYMENTS; LEASE PAYMENT FUND Section 5.01. Assignment of Rights in Lease Agreement 12 Section 5.02. Establishment of Lease Payment Fund 12 Section 5.03. Deposits 12 Section 5.04. Application of Moneys 12 Section 5.05. Surplus 12 ARTICLE VI RESERVE FUND; ESCROW FUND Section 6.01. Establishment of Reserve Fund 13 Section 6.02. Deposit. 13 Section 6.03. Transfers of Elxcess 13 Section 6.04. Application in Event of Deficiency in Lease Payment Fimd 13 Section 6.05. Transfer To Make All Lease Payments 13 Section 6.06. Establishment of Escrow Fund 13 Section 6.07. Deposit 14 Section 6.08. Payment of the Notes 14 Section 6.09. Transfer of Excess 14 Section 6.10. Investment of Escrow Fund 14 ARTICLE Vn INSURANCE AND CONDEMNATION FUND; INSURANCE; EMINENT DOMAIN Section 7.01. Establishment oflnsurance and Condemnation Fund; Application of Net Proceeds of Insurance Award 15 Section 7.02. Application of Net Proceeds of Eminent Domain Award 15 Section 7.03. Cooperation 16 u Page ARTICLE Vm MONEYS IN FUNDS; INVESTMENT; REBATE Section 8.01. Held in Trust 17 Section 8.02. Investments Authorized 17 Section 8.03. Accounting 17 Section 8.04. Allocation of Eamings 17 Section 8.05. Valuation and Disposition of Investments 18 Section 8.06. No Arbitrage 18 Section 8.07. Application of Investment Eamings; Rebate of Excess Investment Eamings to United States 18 ARTICLE rx THE TRUSTEE Section 9.01. Appointment of Tmstee 21 Section 9.02. Acceptance of Tmsts 21 Section 9.03. Fees, Charges and Expenses of Tmstee 23 Section 9.04. Notice to Certificate Owners of Default 24 Section 9.05. Intervention by Tmstee 24 Section 9.06. Removed of Tmstee 24 Section 9.07. Resignation by Tmstee 24 Section 9.08. Appointment of Successor Tmstee 24 Section 9.09. Merger or Consolidation 24 Section 9.10. Conceming any Successor Tmstee 25 ARTICLE X MODIFICATION OR AMENDMENT OF AGREEMENTS Section 10.01. Amendments Permitted 26 Section 10.02. Procedure for Amendment with Written Consent of Certificate Owners 26 Section 10.03. Disqualified Certificates 27 Section 10.04. Effect of Supplemental Agreement 27 Section 10.05. Endorsement or Replacement of Certificates Delivered After Amendments 28 Section 10.06. Amendatory Endorsement of Certificates 28 ARTICLE XI COVENANTS; NOTICES Section 11.01. Compliance With and Enforcement of Lease Agreement 29 Section 11.02. Observance of Laws and Regulations 29 Section 11.03. Prosecution and Defense of Suits 29 Section 11.04. Recordation and Filing 29 Section 11.05. City Budgets 29 Section 11.06. Further Assurances 30 Ul Section 12.01. Section 12.02. Section 12.03. Section 12.04. Page ARTICLE xn LIMITATION OF LLVBILITY Limited Liability of City 31 No Liability of City or Corporation for Tmstee Performance 31 Indemnification of Tmstee 31 Limitation of Rights to Parties and Certificate Owners 31 ARTICLE xm EVENTS OF DEFAULT AND REMEDIES OF CERTIFICATE OWNERS Section 13.01. Section 13.02. Section 13.03. Section 13.04. Section 13.05. Section 13.06. Section 13.07. Section 13.08. Assignment of Rights 32 Remedies 32 Application of Funds 32 Institution of Legal Proceedings 33 Non-waiver 33 Remedies Not Exclusive 33 Power of Tmstee to Control Proceedings 33 Limitation on Certificate Owners' Right to Sue 33 Section 14.01. Section 14.02. Section 14.03. Section 14.04. Section 14.05. Section 14.06. Section 14.07. Section 14.08. Section 14.09. Section 14.10. ARTICLE XIV MISCELLANEOUS Defeasance 35 Records 35 Notices 35 Goveming Law 36 Binding Effect; Successors 36 Execution in Counterparts 36 Delivery of Cancelled Certificates 36 Headings 36 Waiver of Notice 36 Separability of Invalid Provisions 36 EXHIBIT A - DEFINITIONS EXHIBIT B - FORM OF THE CERTIFICATES IV (, TRUST AGREEMENT THIS TRUST AGREEMENT, made and entered into as of June 1, 1988, by and among THE BANK OF CALIFORNIA, NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America (the "Tmstee"), the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of Califomia (the "Corporation"), and the CITY OF CARLSBAD, a municipal corporation and general law city organized and existing under the laws of the State of Califomia (the "City"), WITNESSETH: WHEREAS, the City has issued notes (the "Notes") in the principal amount of $6,555,000 to acquire approximately 52 acres of a eucalyptus grove commonly known as "Hosp Grove" for general municipal purposes and presently zoned open space; and WHEREAS, the Notes mature on June 30, 1988, and the City wishes to complete permanent financing for Hosp Grove and improvements to be made thereon; and WHEREAS, the City and the Corporation have entered into a lease agreement dated as ofthe date hereof (the "Lease Agreement"), whereby the City has agreed to lease Hosp Grove (the "Site") to the Corporation, and the Corporation has agreed to constmct certain improvements to the Site (the "Project"), and to lease the Project and the Site to the City, and the City has agreed to lease the Project and the Site from the Corporation; and WHEREAS, for the purpose of obtaining the moneys required to be deposited by it with the Tmstee to pay the Notes at maturity and to pay for financing the constmction of the Project, the Corporation proposes to assign and transfer certain of its rights under the Lease Agreement to the Tmstee, and in consideration of such assignment and the execution of this Tmst Agreement, the Tmstee has agreed to execute and dehver certificates of participation, each evidencing a fractional interest in the lease pajmaents made by the City under the Lease Agreement, to provide the moneys required herein to be deposited by the Corporation; NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. The terms defined in Exhibit A attached hereto and by this reference incorporated herein, as used and capitalized herein, shall, for afl purposes of this Tmst Agreement, have the meanings ascribed to them in said Exhibit A unless the context clearly requires some other meaning. 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 Tmst Agreement, and has taken aU actions necessary to authorize the execution of this Tmst Agreement by the officers and persons signing it. Section 1.03. Exhibits. The foUowing exhibits are attached to, and by reference made a part of, this Tmst Agreement: Exhibit A: Definitions. Exhibit B: Form ofthe Certificates. -2- ARTICLE n THE CERTIFICATES OF PARTICIPATION Section 2.01. Authorization. The Tmstee is hereby authorized and directed upon written request fi'om the Corporation to prepare, execute and deliver, to the Original Purchaser, Certificates in an aggregate principal amount of Eight Million Six Hundred Ninety Thousand dollars ($8,690,000) evidencing undivided fractional interests of the Owners thereof in the Lease Payments. Section 2.02. Date; Payment of Interest. Each Certificate shaU be dated as of June 1, 1988. Interest with respect thereto shall be payable from the Interest Payment Date next preceding the date of execution thereof, unless: (i) it is executed as of an Interest Payment Date, in which event interest with respect thereto shaU be payable from such Interest Payment Date; or (ii) it is executed after a Regular Record Date and before the following Interest Payment Date, in which event interest with respect thereto shall be payable from such Interest Payment Date; or (iii) it is executed on or before January 15, 1989, in which event interest with respect thereto shall be payable from June 1, 1988; provided, however, that if, as of the date of any Certificate, interest is in default with respect to any Outstanding Certificates, interest represented by such Certificate shafl be payable from the Interest Payment Date to which interest has previously been paid or made available for payment with respect to the Outstanding Certificates. Section 2.03. Maturity; Interest Rates. The Certificates shall mature on August 1 in each of the respective years, and in the respective amounts, and interest represented thereby shafl be computed at the respective rates, as foflows: Maturity Date Principal Interest (August 1) Amount Rate 1989 $ 115,000 5.25% 1990 235,000 5.50 1991 250,000 5.75 1992 260,000 6.00 1993 275,000 6.25 1994 295,000 6.50 1995 315,000 6.70 1996 330,000 6.90 1997 355,000 7.00 1998 380,000 7.20 1999 410,000 7.40 2000 435,000 7.60 2008 5,035,000 8.00 Section 2.04. Form of Certificates; Interest. The Certificates shafl 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 deemed appropriate by the Tmstee. -3- Interest represented by the Certificates shafl be payable on each Interest Payment Date up to the date of maturity or redemption, whichever is earher, as provided in Section 2.10 hereof. Said interest shafl represent the portion of Lease Payments designated as interest and coming due during the six-month period preceding each Interest Payment Date with respect to the Certificates. The fi"actional share of the portion of Lease Payments designated as interest with respect to any Certificate shafl be computed by multiplying the portion of Lease Payments designated as principal with respect to 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 shafl be substantially in the form set forth in Exhibit B attached hereto and by this reference incorporated herein. Section 2.06. Execution. The Certificates shafl be executed by and in the name of the Tmstee by the manual signature of an authorized ofiBcer of the TVustee. If any officer whose signature appears on any Certificate ceases to be such officer before the date of deUvery of said Certificate, such signature shaU nevertheless be as effective as if the officer had remained in office until such date. Section 2.07. Application of Proceeds. The proceeds received by the Tmstee fi*om the sale of the Certificates, including accmed interest, in the aggregate amount of $8,570,455.88 shaU forthwith be set aside by the Tmstee in the fpUowing respective ftmds and accounts: (a) The Tmstee shaU deposit in the Lease Payment Fund an amount equal to $121,032.88, representing accmed interest in the amount of $48,568.88, fi"om June 1, 1988 to the Closing Date, plus capitalized interest for Lease Payments attributable to the Project in the amount of $72,464.00 from the Closing Date to Febmary 1, 1990. (b) The Tmstee shall deposit in the Escrow Fund an amovmt equal to $6,821,205.11, representing the amount necessary to pay the principal ofand interest of the Notes at maturity. (c) The Tmstee shaU deposit in the Reserve Fund an amount equal to $869,000 (the Reserve Requirement). (d) The Tmstee shall deposit in the DeUvery Costs Fund an amount equal to $109,217.89 (e) The Tmstee shaU deposit the remainder of said proceeds in an amount equal to $650,000, in the Acquisition and Constmction Fund. Section 2.08. Transfer and Exchange. (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 attomey duly authorized in writing upon surrender of such Certificate for canceUation at the Principal Corporate Tmst Office of the Trustee, accompanied by delivery of a written instmment of transfer in a form approved by the Tmstee, duly executed. Whenever any Certificate or Certificates shall be surrendered for -4- I, registration of transfer, the Tmstee shaU execute and deUver a new Certificate or Certificates for like aggregate principal amount. (b) Exchange of Certificates. Certificates may be exchanged at the Principal Corporate Tmst Office of the Tmstee for a like aggregate principal amount of Certificates of other authorized denominations of the same maturity. The Tmstee may require the payment by the Certificate Owner requesting such exchange of any tax or other govemmental charge required to be paid with respect to such exchange. (c) The Tmstee may refuse to cancel or exchange Certificates in the 15 day period preceding a selection of Certificates for redemption or of any Certificate selected for redemption. Section 2.09. Certificates Mutflated, Lost, Destroyed or Stolen. If any Certificate shall become mutflated, the Tmstee, at the expense of the Owner of said Certificate, shaU execute and deliver a new Certificate of Uke tenor, maturity and number in exchange and substitution for the Certificate so mutflated, but only upon surrender to the Tmstee of the Certificate so mutilated. Every mutflated Certificate so surrendered to the Tmstee shafl be canceUed by it and redeUvered by the Tmstee to the City. If any Certificate shaU be lost, destroyed or stolen, evidence of such loss, destmction or theft shaU be submitted to the Tmstee, and, if such evidence is satisfactory to the Tmstee and if an indemnity satisfactory to the Tmstee shaU be given, the Tmstee, at the expense of the Certificate Owner, shall execute and deUver a new Certificate of Uke tenor and maturity and numbered as the Tmstee shall determine in Ueu of and in substitution for the Certificate so lost, destroyed or stolen. The Tmstee may require payment of the expenses which may be incurred by the Tmstee in carrying out the duties under this Section 2.09. Any Certificate executed and delivered under the provisions of this Section 2.09 in lieu of any Certificate aUeged to be lost, destroyed or stolen shall be equally and fractionally entitled to the benefits of this Tmst Agreement with afl other Certificates secured by this Tmst Agreement. The Tmstee shafl not be required to treat both the original Certificate and any replacement Certificate as being Outstanding for the purpose of determining the principal amovmt of Certificates which may be executed and dehvered hereunder or for the purpose of determining any percentage of Certificates Outstanding hereunder, but both the original and replacement Certificate shall be treated as one and the same. Notwithstanding any other provision of this Section 2.09, in lieu of delivering a new Certificate which has been mutilated, lost, destroyed or stolen, and which has matured or has been called for redemption, the Tmstee may make payment with respect to such Certificate. Section 2.10. Payment. Payment of interest due with respect to any Certificate on any Interest Payment Date shall be made to the person appearing on the Registration Books as the Owner thereof as of the Regular Record Date immediately preceding such Interest Pa3Tnent Date, such interest to be paid by check or draft mailed to such Owner at his address as it appears on the Registration Books or at such other address as he may have filed with the Tmstee for that purpose or by wire transfer to the Owners of $1,000,000 or more in principal amount of the Certificates, so long as such Owner has delivered written wire transfer instmctions to the Tmstee prior to a Regular Record Date in form satisfactory to Tmstee. The principal, interest and redemption price with respect to the Certificates at maturity or upon prior redemption shall be payable in lawful money -5- of the United States of America upon surrender of the Certificates at the Principal Corporate Tmst Office of the Tmstee. Section 2.11. Execution of Documents and Proof of Ownership. Any request, direction, consent, revocation of consent, or other instmment in writing required or permitted by this Tmst Agreement to be signed or executed by Certificate Owners may be in any number of concurrent instmments of similar tenor, and may be signed or executed by such Owners in person or by their attomeys or agents appointed by an instmment in writing for that purpose, or by any bank, tmst company or other depository for such Certificates. Proof of the execution of any such instmment, or of any instrument appointing any such attorney or agent, and of the ownership of Certificates shall be sufficient for any purpose of this Tmst 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 instmment and of any instrument appointing any such attomey or agent, may be proved by a certificate, which need not be acknowledged or verified, of an officer of any bank or tmst company located within the United States of America, 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 instmment 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 shaU be proved by the Registration Books. Nothing contained in this Article II shall be constmed as limiting the Tmstee to such proof, it being intended that the Tmstee may accept any other evidence of the matters herein stated which the Tmstee may deem sufficient. Any request or consent of the Owner of any Certificate shaU bind every future Owner of the same Certificate in respect of anything done or sufiered to be done by the Tmstee in pursuant of such request or consent. Section 2.12. Registration Books. The Tmstee shaU keep or cause to be kept, at its Principal Corporate Tmst Office, suflficient records for the registration and registration of transfer of the Certificates, which shall at all reasonable times be open to inspection by the City and the Corporation; and, upon presentation for such purpose, the Tmstee 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. -6- (, ARTICLE m ACQUISITION AND CONSTRUCTION FUND; DELIVERY COSTS FUND Section 3.01. Acquisition and Constmction Fund. The Tmstee shaU estabUsh a special fund designated as the "Acquisition and Constmction Fund"; shall keep such fimd separate and apart from all other funds and moneys held by it; and shall administer such fund as provided herein and in the Lease Agreement. There shaU be deposited in the Acquisition and Constmction Fund from the proceeds of sale of the Certificates required to be deposited therein pursuant to Section 2.07(e) hereof and any other funds from time to time deposited with the Tmstee for such purpose. Section 3.02. Payment of Acquisition and Constmction Costs. (a) Amounts in the Acquisition and Constmction Fund shaU be disbursed for Acquisition and Constmction Costs. Disbursements fi-om the Acquisition and Constmction Fund shafl be made by the Tmstee upon receipt of a sequentiafly numbered requisition requesting disbursement executed or approved by a City Representative. Subject to subsections (b) and (c) hereof, each such certificate shafl: (i) set forth the amounts to be disbursed for payment or reimbursement of previous payments of Acquisition and Constmction Costs and the person or persons to whom said amounts are to be disbursed; (ii) state that the amounts to be disbursed constitute Acquisition and Constmction Costs, that said amounts are required to be disbursed pursuant to a contract entered into therefor by or on behalf of the Corporation or the City, or were necessarily and reasonably incurred; and that said amounts are not being paid in advance of the time, if any, fixed for payment; (iu) state that no amount set forth in the certificate was included in any certificate requesting disbursement previously filed with the Tmstee pursuant to this Section 3.02; (iv) state the portion, if any, of the Net Proceeds of the Certificates to be used for a Private Business Use or to make or fmance a loan (other than a loan constituting a Nonpurpose Obligation or assessment) to other than a state or local govemmental unit; (v) state that there has been compliance with Sections 5.10 and 5.11 of the Lease Agreement relating to the Private Business Use limitation and the private loan limitation; and (vi) state that the amount remaining in the Acquisition and Constmction Fund, together with interest eamings thereon or deposited therein, wiU, after payment of the amount set forth in the certificate requesting disbursement, be suflficient to pay all remaining Acquisition and Constmction Costs as then estimated. -7- (b) Each certificate requesting disbursement which is submitted pursuant to subsection (a) and which relates to disbursement for a constmction portion of the Project shaU be accompanied by the certificate of an architect or engineer employed by the City (with an acknowledgement thereon or attached thereto of the City that the City has employed such architect or engineer) approving the certificate requesting disbursement and certifying that (i) insofar as such certificate relates to payment for work, materials, equipment or supplies, such work was actuafly performed, or such materials, equipment or supplies were actually installed in furtherance of the constmction of the Project or deUvered to the appropriate site for such purpose, or delivered for storage or fabrication at a place approved by the City, and (u) as of the date of said certificate requesting disbursement an identified percentage of the Project has been completed. (c) Each certificate requesting disbursement which is submitted pursuant to subsection (a) and which relates to payment to a Contractor shaU be accompanied by a certificate of said Contractor stating that no Uens have been imposed on the Project as a result of said constmction except liens that have not yet ripened or that would attach by operation of law. Section 3.03. Delivery Costs Fund. The Tmstee shall estabUsh a special fimd designated as the "DeUvery Costs Fund"; shaU keep such fund separate and apart from all other funds and moneys held by it; and shall administer such fund as provided herein and in the Lease Agreement. There shaU be deposited in the Delivery Costs Fund the proceeds of sale of the Certificates required to be deposited therein pursuant to Section 2.07(d) hereof and any other funds from time to time deposited with the Tmstee for such purpose. Section 3.04. Payment of Delivery Costs. The moneys in the DeUvery Costs Fund shall be disbursed to pay the Delivery Costs in accordance with the following procedures. The Tmstee shall disburse moneys in the Delivery Costs Fund only upon a receipt of a sequentially numbered requisition signed by a City Representative setting forth the amounts to be disbursed for payment or reimbursement of Delivery Costs 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 DeUvery Costs properly chargeable to the Delivery Costs Fund. The Tmstee shaU be responsible for the safekeeping and investment of the moneys held in the Dehvery Costs Fund, the payment thereof in accordance with this Section 3.04, but the Tmstee shaU not be responsible for such requisitions. Upon payment of all Delivery Costs, but in no event later than October 1, 1988, the Tmstee shall transfer any moneys then remaining in the Delivery Costs Fund to the Acquisition and Constmction Fund, the Delivery Costs Fvmd shaU be closed and the Tmstee shall no longer be obligated to make payments from such fimd. Section 3.05. Transfers of Unexpended Proceeds. The Tmstee is hereby directed to transfer all vmexpended moneys remaining in the Acquisition and Constmction Fund and not required for payment of Acquisition and Constmction Costs on the Completion Date to the Lease Pa3Tnent Fund, to be credited to the Lease Payments as the same shall become due and payable. -8- ARTICLE IV REDEMPTION OF CERTIFICATES Section 4.01. Redemption. (a) Optional Redemption. The Certificates maturing on and after August 1, 1999, are subject to redemption in whole at any time or in part on any Interest Payment Date (but not in a total redemption amount of less than $20,000 at any one time) in inverse order of maturity and by lot within a maturity on or after August 1, 1998, at the principal amovmt with respect thereto, together with the premium set forth below (expressed as a percentage of the total amount redeemed), and accmed interest to the date fixed for redemption, from the proceeds of optional prepayments of Lease Payments made by the City pursuant to the Lease Agreement: Redemption Period Premium August 1, 1998 through July 31, 1999 2% August 1, 1999 through July 31, 2000 1.5 August 1, 2000 through July 31, 2001 1.0 August 1, 2001 through July 31, 2002 0.5 August 1, 2002 and thereafter 0 (b) Redemption From Net Proceeds of Insurance and Condemnation. The Certificates are subject to mandatory redemption in whole on any date, or in part on any Interest Payment Date among maturities such that approximately equal annual Lease Payments prevafl following such redemption and by lot within a maturity, fi-om the net proceeds of insurance or condemnation credited towards the prepayment of the Lease Payments by the City pursuant to Section 10.3 of the Lease Agreement, at a redemption price equal to the principal amount thereof to be redeemed together with accmed interest to the date fixed for redemption, without premium. (c) Mandatory Redemption. The Certificates maturing on August 1, 2008, are subject to mandatory redemption on August 1 in each year on or after August 1, 2001, fi-om the principal components of the Lease Payments required to be paid by the City 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 accmed interest thereon to the date fixed for redemption, without premium, as follows: Principal Amount Redemption Date of Certificates (August 1) to be Redeemed 2001 $470,000 2002 510,000 2003 555,000 2004 600,000 2005 640,000 2006 695,000 2007 750,000 2008 (Maturity) 815,000 -9- In the event that the Tmstee shaU redeem Certificates in part but not in whole pursuant to subsections (a) or (b) of this Section 4.01, the amount of the Certificates to be redeemed in each subsequent year pursuant to this subsection (d) shaU be reduced to correspond to the principal components of the Lease Payments prevafling foflowing such redemption as determined pursuant to Section 4.4(b) of the Lease Agreement. (d) Redemption Fund. Moneys to be used for redemption of Certificates shall be deposited in a Redemption Fund, which shall be a special fund to be held in tmst by the Tmstee, separate and apart from all other funds and accounts. Said moneys shafl be set aside in the Redemption Fund solely for the purpose of redeeming the Certificates in advance of their maturity and shall be appUed on or after the date designated for redemption to the payment of principal and interest with respect to the Certificates to be redeemed upon presentation and surrender of such Certificates. Section 4.02. Selection of Certificates for Redemption. Whenever provision is made in this Tmst Agreement for the redemption of Certificates and less than all Outstanding Certificates are caUed for redemption, the Tmstee shafl select Certificates for redemption from the Outstanding Certificates not previously called for redemption such that the scheduled payments of principal represented by the Certificates in each Rental Period corresponds to the scheduled payments of the principal components of the Lease Payments foflowing the corresponding prepayment of the Lease Payments pursuant to Sections 10.2, 10.3 or 10.4 of the Lease Agreement, as determined pursuant to Section 4.4(b) of the Lease Agreement. The Tmstee shall select Certificates for redemption within a maturity by lot or in any other manner which the Tmstee shafl, in its sole discretion, deem appropriate and fair. 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 Tmstee shafl promptly notify the City and the Corporation in writing of the Certificates so selected for redemption. Section 4.03. Notice of Redemption. Unless waived by any Owner of Certificates to be redeemed, official notice of any such redemption shafl be given by the Tmstee on behalf of the City by mailing a copy of an oflficial redemption notice by first class mafl at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the Owner of the Certificate or Certificates to be redeemed at the address shown on the Registration Books or at such other address as is fumished in writing by such Owner to the Tmstee and the Secvuities Depositories and to one or more Information Services designated in a written request signed by a City Representative filed with the Tmstee. All oflficial notices of redemption shall be dated and shall state: (i) the redemption date, (ii) the redemption price, (iu) if less than all Outstanding Certificates are to be redeemed, the identification (and, in the case of partial redemption, the respective principal amounts) of the Certificates to be redeemed, (iv) that on the redemption date the redemption price wfll become due and payable upon each such Certificate or portion thereof called for redemption, and that interest with respect thereto shafl cease to accme from and after said date, and (v) the place where such Certificates are to be surrendered for pa3Tnent of the redemption price, which place of pajrment shafl be the Principal Corporate Tmst Oflfice of the Tmstee. -10- Prior to any redemption date, the City shafl deposit, or cause to be deposited, with the Tmstee an amount of money sufficient to pay the redemption price of afl the Certificates or portions of Certificates which are to be redeemed on that date. Official notice of redemption having been given as aforesaid, the Certificates or portions of Certificates so to be redeemed shafl, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shafl default in the payment of the redemption price) interest with respect to such Certificates or portions of Certificates shall cease to be payable. Upon surrender of such Certificates for redemption m accordance with said notice, such Certificates shafl be paid by the Tmstee at the redemption price. Instaflments of interest due on or prior to the redemption date shafl be payable as herein provided for payment of interest.. Failure by any Owner to receive notice as hereinabove provided shafl not affect the vaUdity of any such redemption. Section 4.04. Partial Redemption of Certificate. Upon surrender ofany Certificate redeemed in part only, the Tmstee shaU execute and deUver to the Owner thereof, at the expense of the City, a new Certificate or Certificates of authorized denominations equal m aggregate principal amount to the unredeemed portion of the Certificate surrendered and of the same interest rate and the same maturity. Section 4.05. Purchase of Certificates. Prior to the selection of Certificates for redemption, and in Ueu of redemption of Certificates as provided m this Article IV, / amounts held by the Tmstee for such redemption shaU also be used at any time, upon V J[k the written request of a City Representative, for the purchase of Certificates at pubhc or private sale as and when and at such prices (including brokerage, accmed interest and other charges) as the City may m its discretion direct, but not to exceed the redemption price which would be payable if such Certificates were redeemed. The aggregate principal amount of Certificates of the same maturity purchased in lieu of redemption pursuant to this Section 4.06 shaU not exceed the aggregate principal amount of Certificates of such maturity which would otherwise be subject to such redemption. Remaming moneys, if any, shaU be deposited in the Lease Payment Fvmd. -11- ARTICLE V LEASE PAYMENTS; LEASE PAYMENT FUND Section 5.01. Assignment of Rights in Lease Agreement. The Corporation has, m the Assignment Agreement, transferred, assigned and set over to the Tmstee certain of its rights and duties m the Lease Agreement, including but not limited to afl of the Corporation's rights to receive and coflect afl of the Lease Payments and afl other amounts required to be deposited m the Lease Payment Fund pursuant to the Lease Agreement or pursuant hereto. Afl Lease Payments and such other amounts to which the Corporation may at any time be entitled shafl be paid directly to the Tmstee and afl of the Lease Payments coflected or received by the Corporation shafl be deemed to be held and to have been coflected or received by the Corporation as the agent of the Tmstee, and if received by the Corporation at any time shafl be deposited by the Corporation with the Tmstee within one Business Day after the receipt thereof, and afl such Lease Payments and such other amounts shafl be forthwith deposited by the Tmstee upon the receipt thereof m the Lease Payment Fund (except as provided m Section 6.04 hereof). Section 5.02. Estabhshment of Lease Pavment Fund. The Tmstee shaU estabUsh a special fund designated as the "Lease Payment Fund". Afl moneys at any time deposited by the Tmstee in the Lease Payment Fund shafl be held by the Tmstee in tmst for the benefit of the Owners of the Certificates. So long as any Certificates are Outstanding, neither the City nor the Corporation shafl have any beneficial right or interest in the Lease Payment Fund or the moneys deposited therein, except only as provided in this Tmst Agreement, and such moneys shafl be used and appUed by the Tmstee as hereinafter set forth. Section 5.03. Deposits. Other than as provided ui Section 4.01(d) hereof, There shaU be deposited m the Lease Payment Fund aU Lease Payments received by the Tmstee (except as provided in Section 6.04 hereof), mcluding any moneys received by the Tmstee for deposit therein pursuant to Sections 2.07(a), 4.01, 5.01 or Article VH hereof, or Article X of the Lease Agreement, and any other moneys required to be deposited therein pursuant to the Lease Agreement or pursuant to this Tmst Agreement. Section 5.04. AppUcation of Moneys. AU amounts in the Lease Payment Fvmd shaU be used and withdrawn by the Tmstee solely for the purpose of paying the principal, mterest and redemption premiums (if any) with respect to the Certificates as the same shaU become due and payable, in accordance with the provisions of Article II and Article IV hereof. Section 5.05. Surplus. Any surplus remaining in the Lease Payment Fund, after redemption and payment of aU Certificates, including premiums and accmed mterest (if any) and payment of any applicable fees and expenses to the Tmstee, or provision for such redemption or payment having been made to the satisfaction ofthe Tmstee, shafl be withdrawn by the Trustee and remitted to the City. 4 -12- ARTICLE VI RESERVE FUND; ESCROW FUND Section 6.01. Establishment of Reserve Fund. The Tmstee shafl estabUsh a special fund designated as the "Reserve Fund". All moneys at any time on deposit in the Reserve Fund shall be held by the Tmstee in tmst for the benefit of the Owners of the Certificates, and applied solely as provided herein. Section 6.02. Deposit. There shall be deposited in the Reserve Fund an amount equal to the Reserve Requirement, in accordance with Section 2.07(c). Moneys in the Reserve Fund shaU be held in tmst as a reserve for the pa3mient when due of aU the Lease Payments to be paid pursuant to the Lease Agreement. Section 6.03. Transfers of Excess. On or before January 15 and July 15 in each year, the Tmstee shall transfer any moneys in the Reserve Fund then in excess of the Reserve Requirement prior to the Completion Date, to the Acquisition and Constmction Fund, and thereafter to the Lease Payment Fund to be credited to the Lease Payments next coming due and payable. Section 6.04. Application in Event of Deficiency in Lease Payment Fund. If on any Interest 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) with respect to the Certificates then coming due and payable, the Tmstee shall apply the moneys available in the Reserve Fund to make delinquent Lease Payments on behalf of the City by transferring the amount necessary for this purpose to the Lease Payment Fvmd. Upon receipt of any delinquent Lease Payment with respect to which moneys have been advanced from the Reserve Fund, such Lease Payment shaU be deposited in the Reserve Fund to the extent of such advance. Section 6.05. Transfer To Make All Lease Payments. If on any Interest Pajonent 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, with respect to Certificates not presented for payment) are suflficient to pay all Outstanding Certificates, including all principal, interest and redemption premiums (if any), the Tmstee shall, upon the written direction of a City Representative, 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 City, and such moneys shaU be distributed to the Owners of Certificates in accordance with Article II of this Tmst Agreement. Any amounts remaining in the Reserve Fund upon payment in full of all Outstanding Certificates, or upon provision for such payment as provided in Section 14.01, shall be withdrawn by the Trustee and paid to the City. Section 6.06. Establishment of Escrow Fund. The Tmstee shafl establish a special fund designated as the "Escrow Fund". All moneys at any time on deposit in the Escrow Fund shall be held by the Tmstee in tmst for the holders of the Notes, and appUed solely as provided herein. -13- Section 6.07. Deposit. There shafl be deposited in the Escrow Fund an amount equal to the amount necessary to pay the principal of and interest on the Notes at maturity, as provided in Section 2.07(b). Section 6.08. Payment of the Notes. The Tmstee shafl transfer to Security Pacific National Bank, the Paying Agent for the Notes, on or before the maturity date of the Notes (June 30, 1988), an amount equal to the principal of and interest on the Notes ($6,821,205.11), m order to fufly discharge the City's payment obUgation on the Notes. Section 6.09. Transfer of Excess. The Tmstee shaU, after making the payment referenced in Section 6.08, transfer any monies remaining in the Escrow Fund to the Lease Payment Fvmd, and shaU thereupon close the Escrow Fund. Section 6.10. Investment of Escrow Fund. All monies held in the Escrow Fund shaU, until used for payment of the Notes, be invested in Permitted Investments described in paragraph (f) of the definition thereof. -14- ARTICLE vn INSURANCE /iND CONDEMNATION FUND; INSURANCE; EMINENT DOMAIN Section 7.01. Establishment of Insurance and Condemnation Fund; Application of Net Proceeds of Insurance Award. Any Net Proceeds of insurance against accident to or destmction of any part of the Project collected by the City in the event of any such accident or destmction shaU be paid to the Tmstee by the City pursuant to Section 6.2(a) of the Lease Agreement and deposited by the Tmstee promptly upon receipt thereof in a special fund designated as the "Insurance and Condemnation Fund". If the City 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 economicaUy feasible or in the best interest of the City, then such Net Proceeds shall be promptly transferred by the Tmstee to the Lease Payment Fund and applied to the prepayment of Lease Payments pursuant to Section 10.3 of the Lease Agreement; provided, however, that in the event of damage or destmction of the Project in full, such Net Proceeds may be transferred to the Lease Payment Fund only if suflficient, together with other moneys avaflable therefor, to cause the prepajTnent of the principal components of all unpaid Lease Payments aflocable to the Project and the Site pursuant to Section 10.3 of the Lease Agreement. All Net Proceeds deposited in the Insurance and Condemnation Fvmd and not so transferred to the Lease Payment Fund shall be appUed to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Project by the City, upon receipt of requisitions satisfactory to the Tmstee signed by a City Representative stating with respect to each payment to be made (i) the requisition number, (ii) the name and address of the person, firm or corporation to whom pa3Tnent is due, (iii) the amount to be paid and (iv) 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 bfll 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 City. Section 7.02. Application of Net Proceeds of Eminent Domain Award. If afl or any part of the Project or the Site shafl be taken by eminent domain proceedings (or sold to a govemment threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be deposited with the Tmstee in the Insurance and Condemnation Fund pursuant to Section 6.2(b) of the Lease Agreement and shafl be appUed and disbursed by the Tmstee as follows: (a) If the City has given written notice to the Tmstee of its determination that (i) such eminent domain proceedings have not materially aflfected the operation of the Project or the ability of the City to meet any of its obligations with respect to the Project and the Site under the Lease Agreement, and (ii) that such proceeds are not needed for repair or rehabilitation of the Project, the City shall so certify to the Tmstee and the City has given written notice to the TVustee of such determination, the Tmstee, at the City's request, shall transfer such proceeds to the Lease Payment Fund to be credited towards the prepayments of the Lease Payments pursuant to Section 10.3 of the Lease Agreement -15- and appUed to the redemption of Certificates in the manner provided in Section 4.01(b) hereof. (b) If the City has given written notice to the Tmstee of its determination that (i) such eminent domain proceedings have not materially affected the operation of the Project or the ability of the City to meet any of its obligations with respect to the Project and the Site under the Lease Agreement, and (ii) such proceeds are needed for repair, rehabilitation or replacement of the Project, the City shaU so certify to the Tmstee and the Tmstee, at the City's request, shall pay to the City, or to its order, fi-om said proceeds such amounts as the City may expend for such repair or rehabilitation, upon the filing with the Tmstee of requisitions of the City Representative in the form and containing the provisions set forth in Section 7.01. (c) If (i) less than all of the Project or the Site shafl have been taken in such eminent domain proceedings or sold to a govemment threatening the use of eminent domain powers, and if the City has given written notice to the Tmstee of its determination that such eminent domain proceedings have materially affected the operation of the Project or the abihty of the City to meet any of its obUgations with respect to the Project and the Site under the Lease Agreement or (u) aU of the Project and the Site shaU have been taken in such eminent domain proceedings, then the Tmstee shall transfer such proceeds to the Lease Payment Fund to be credited toward the prepayment of the Lease Payments pursuant to Section 10.3 of the Lease Agreement and appUed to the redemption of Certificates in the manner provided in 4.01(b) hereof. (d) In making any determination vmder this Section 7.02, the City may obtain, but shall not be required to obtain, at its expense, the report of an independent engineer or other independent professional consultant, a copy of which shall be filed with the Tmstee. Any such determination by the City shall be final. Section 7.03. Cooperation. The Corporation and the Tmstee shall cooperate fufly with the City at the expense of the City in filing any proof of loss with respect to any insurance poUcy 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. -16- ARTICLE Vni MONEYS IN FUNDS; INVESTMENT; REBATE Section 8.01. Held in Tmst. The moneys and investments held by the Tmstee under this Tmst Agreement are irrevocably held in tmst for the benefit of the Owners of the Certificates and for the purposes herein specified, and such moneys, and any income or interest earned thereon, shall be expended only as provided in this Tmst Agreement, and shall not be subject to levy or attachment or hen by or for the benefit of any creditor ofthe Corporation, the Tmstee, the City or any Owner of Certificates. Section 8.02. Investments Authorized. Moneys held by the Tmstee hereunder may, and upon written order of a City Representative shall, be invested and reinvested by the Tmstee, to the maximum extent practicable, in Permitted Investments. If a City Representative shall fail to so direct investments, the Tmstee shall invest the affected moneys in Federal Securities or, to the extent such investment is not possible, in Permitted Investments described in paragraph (f) of the definition thereof. A City Representative may, by written order received by the Tmstee two (2) days before the proposed investment, direct such investment of moneys held by the Tmstee in specific Permitted Investments if the investment is consistent with the fiduciary duties of Tmstee and if the City Representative's order contains a certification that the proposed investment is a Permitted Investment. Such investments, if registrable, shafl be registered in the name of and held by the Tmstee. The Tmstee may purchase or sell to , itself or any affiliate, as principal or agent, investments authorized by this Section 8.02. Such investments and reinvestments shall be made giving full consideration to the time at which funds are required to be avaflable. The Tmstee may act as principal or agent in the making or disposing of any investment. Section 8.03. Accounting. The Tmstee shall fumish to the City, not less than monthly, an accounting of afl investments made by the Tmstee. The Tmstee shafl not be responsible or Uable for any loss suffered in connection with any investment of funds made by it in accordance with Section 8.02 hereof. Section 8.04. Allocation of Eamings. Subject to Section 8.07 hereof, afl interest or income received by the Tmstee on investment of the Lease Payment Fimd hereof shall, prior to the Completion Date, be transferred to the Acquisition and Constmction Fund and thereafter shafl be retained in the Lease Payment Fund and be appUed to the payment of delinquent payments due with respect to the Certificates, if any, and otherwise as set forth herein. Subject to Section 8.07 hereof, all interest or income received by the Tmstee on investment of the Reserve Fund shall be retained in the Reserve Fund in the event that amounts on deposit in the Reserve Fund are less than the Reserve Requirement. Pursuant to Section 6.03 hereof, in the event that amounts then on deposit in the Reserve Fund exceed the Reserve Requirement, such excess shaU, prior to the Completion Date, be transferred to the Acquisition and Constmction Fund and thereafter shaU be transferred to the Lease Payment Fund. Transfers to the Lease Payment Fund from the Reserve Fund shall be made by the Tmstee on or prior to each Lease Payment Date. Amounts retained or deposited in the Lease Payment Fvmd pursuant to this Section 8.04 shaU be applied as a credit against the Lease Payment due by the City pursuant to the Lease Agreement on the Lease Payment Date following the -17- date of deposit. Subject to Section 8.07 hereof, aU interest or income in the Acquisition and Constmction Fund shall be retained in the Acqvusition and Constmction Fund until the Acquisition and Constmction Fund is closed pursuant to Section 3.05 hereof. Subject to Section 8.07 hereof, all interest or income in the Delivery Costs Fund shall be retained in the DeUvery Costs Fund untfl the DeUvery Costs Fund is closed pursuant to Section 3.04 hereof. Section 8.05. Valuation and Disposition of Investments. For the. purpose of determining the amovmt in any fund, aU Permitted Investments credited to such fund shall be valued by the Tmstee at lower of cost or market (exclusive of accmed interest). The Tmstee may sell at the best price obtainable, or present for redemption, any Permitted Investment so purchased by the Tmstee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fimd to which such Permitted Investment is credited, and the Tmstee shall not be hable or responsible for any loss resulting fi-om any such Permitted Investment. Section 8.06. No Arbitrage. The City shafl not take, or pennit or suffer to be taken by the Tmstee or otherwise, any action with respect to the 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 8.07. Application of Investment Eamings; Rebate of Excess Investment Eamings to United States. (A) Creation of Accounts. There are hereby created, to be held by the Tmstee as separate accounts distinct from all other funds and accounts held by the Tmstee under this Tmst Agreement, the Investment Eamings Account and the Excess Investment Eamings Account. AU interest eamings and profits on amovmts in aU ftmds and accounts estabUshed under this Tmst Agreement, other than interest earnings on the Lease Payment Fund if such eamings in any Certificate Year are less than $100,000, shaU, upon receipt by the Tmstee, be deposited in the Investment Eamings Accovmt. Annuafly, within 45 days of the last day of each Certificate Year the Tmstee shall transfer fi'om the Investment Eamings Account to the Excess Investment Eamings Account for purposes of ultimate rebate to the United States an amount equal to Excess Investment Eamings, all as more particularly described in this Section. Foflowing the transfer referenced in the preceding sentence, the Tmstee shafl transfer afl amounts remaining in the Investment Eamings Account to the foflowing funds and accounts in the following order: (i) to the Reserve Fund to the extent necessary to increase the amount on deposit in the Reserve Fund to equal the Reserve Requirement, (u)(l) to the Acquisition and Constmction Fund fl" the Tmstee has not received the Certificate of Completion with respect to the Project, and (2) to the Lease Payment Fund to be used for the payment of Lease Payments on the next Payment Date, and for such purpose Lease Payments due fix>m the City on such date shall be credited by an amount equal to the amount so transferred. -18- (B) Definition of Excess Investment Eamings. The Tmstee shafl calculate Excess Investment Earnings in accordance with subsection (C) and to pay an amovmt equal to Excess Investment Eamings to the United States in accordance with subsection (D). The term "Excess Investment Eamings" means an amount equal to the sum of: (i) the excess of (a) the aggregate amount earned fi"om the date of deUvery of the Certificates on aU Nonpurpose Obligations in which Gross Proceeds of the Certificates are invested (other than amounts attributable to an excess described in this paragraph (i)), over (b) the amount that would have been eamed if the Yield on such Nonpurpose ObUgation (other than amounts attributable to an excess described in this paragraph (i)) had been equal to the Yield on the Certificates, plus (u) any income attributable to the excess described in paragraph (i). (C) Calculation of Excess. Within 30 days of the last day of the first Certificate Year, the Tmstee shaU calculate the Excess Investment Eamings referenced in paragraph (i) of section (B). Thereafter, within 30 days of the last day of each Certificate Year and within thirty days after the payment in fvfll of the Certificates, the Tmstee shall calculate the amount of Excess Investment Eamings referenced in paragraphs (i) and (ii) of subsection (B). (D) Payment to the United States. The City shafl give written direction to the Tmstee to pay from the Excess Investment Eamings Account (and, if necesary, from the Acquisition and Constmction Fund) an amount equal to Excess Investment Eamings to the United States in installments with the first payment to be made no later than forty five (45) days after the end of the fifth Certificate Year and with subsequent payments to be made not later than five (5) years after the preceding payment was due. The City shall assure that each such installment is an amount equal to at least 90 percent of the Excess Investment Eamings with respect to the Certificates as of the close of the computation period. Not later than sixty (60) days after the payment in full of the Lease Payments, the City shall give written direction to the Tmstee to pay from the Excess Investment Eamings Account to the United States 100 percent of the theretofore impaid Excess Investment Eamings. If there are any amounts remaining in the Excess Investment Eamings Account following the payment required by the preceding sentence, the Tmstee shall transfer said amounts to the City to be used for any lawful purpose of the City. The City or the Tmstee shafl remit payments to the United States at the address prescribed by such Regulations. If, for any reason, amounts in the Excess Investment Eamings Accounts are insufficient to make the payments to the United States which are required by this subsection (D), the City shall assure that such payments are made to the United States, on a timely basis, from any funds lawfully available therefor. -19- (E) Further Obligation of the City. The City shafl assure that Excess Investment Eamings are not paid or disbursed except as required in this Section. To that end the City shafl assure that investment transactions are on an arm's- length basis. In the event that Nonpurpose Investments consist of certificates of deposit or investment contracts, investment in such Nonpurpose Investments shall be made in accordance with the procedures described in appUcable Regulations as from time to time in effect. (F) Maintenance of Records. The Tmstee shaU keep, and retain for a period of six (6) years foUowing the payment in fiiU of the Certificates, such records of the determinations made pursuant to this Section 8.07 as are required under Section 148(f) ofthe Code. (G) Independent Consultants. In order to provide for the administration of this Section 8.07, the City and the Tmstee may provide for the employment of independent attomeys, accountants and consultants compensated on such reasonable basis as the City or the Tmstee may deem appropriate and the Tmstee may rely conclusively upon and shaU be fufly protected fi'om afl Uability in relying on the opinions, calculations, determinations, directions and advice of such attorneys, accountants and consultants employed hereunder. (H) Fees and Expenses. The City shall be responsible for the payment of any fees and expenses incurred by the Tmstee or the City imder or pursuant to this Section 8.07. (I) Administration. The City hereby appoints the Tmstee to administer the provisions of this Section 8.07 and the Tmstee hereby accepts such appointment, subject to the provisions of paragraph (G) above. -20- ARTICLE IX THE TRUSTEE Section 9.01. Appointment of Tmstee. The Bank of Califomia, National Association, a national banking association organized and existing under and by virtue of the laws of the United States of America with its principal corporate tmst office in San Francisco, Califomia, is hereby appointed Tmstee by the Corporation and the City for the purpose of receiving all moneys required to be deposited with the Tmstee hereunder and to allocate, use and apply the same as provided in this Tmst Agreement. The Corporation and the City agree that they wifl maintain a Tmstee having a principal corporate tmst oflfice in Los Angeles or San Francisco, CaUfomia, with a combined capital and surplus of at least fifty million doUars ($50,000,000), and subject to supervision or examination by federal or State authority, so long as any Certificates are Outstanding. If such bank or tmst company pubUshes a report of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to then for the purpose ofthis Section 9.01, the combined capital and surplus of such bank or tmst company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so pubUshed. The Tmstee is hereby authorized to redeem the Certificates when duly presented for payment at maturity, or on redemption, or on purchase by the Tmstee prior to maturity in accordance with Section 4.06 hereof, and to cancel aU Certificates upon payment thereof. The Tmstee shall keep accurate records of aU funds administered by it and of all Certificates paid and discharged. The Tmstee shall be compensated for its services rendered pursuant to the provisions of this Tmst Agreement. Section 9.02. Acceptance of Tmsts. The Tmstee hereby accepts the tmsts imposed upon it by this Tmst Agreement, and agrees to perform said tmsts, but only upon and subject to the following express terms and conditions: The Tmstee, prior to the occurrence of an Event of Default and after curing of aU Events of Default which may have occurred, vmdertakes to perform such duties and only such duties as are specifically set forth in this Tmst Agreement. In case an Event of Default has occurred (which has not been cured or waived) the Tmstee may exercise such of the rights and powers vested in it by this Tmst Agreement, and shafl use the same degree of care and skfll in their exercise, as a pmdent and reasonable man would exercise or use under the circumstances in the conduct of his own affairs. No provision in this Tmst Agreement shall require the Tmstee to expend or risk its own funds or otherwise incur any financial UabiUty in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. The Tmstee may execute any of the tmsts or powers hereof and perform the duties required of it hereunder by or through attomeys, agents, or receivers and the Tmstee shall not be responsible for any misconduct or negligence on the part of any attomey, agent or receiver appointed in accordance with the standard specified above, and shall be entitled to advice of counsel conceming afl matters of tmst and its duty hereunder. -21- The Tmstee shafl not be responsible for any recital herein, or in the Certificates, or for any of the supplements thereto or instruments of fiirther assurance, or for the sufficiency of the security for the Certificates delivered hereunder or intended to be secured hereby and the Tmstee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of the Corporation or the City imder the Lease Agreement. The Tmstee shaU not be responsible or Uable for any loss suffered in connection with any investment of funds made by it in accordance with Article VIII of this Tmst Agreement. The Tmstee shall not be accountable for the use of any Certificates deUvered hereunder. The Tmstee may become the Owner of Certificates secured hereby with the same rights which it would have if not the Tmstee; may acquire and dispose of other bonds or evidence of indebtedness of the City with the same rights it would have if it were not the Tmstee; and may act as a depositary for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Certificates, whether or not such committee shaU represent the Owners of the majority in principal amount of the Certificates then Outstanding. In the absence of bad faith on its part, the Tmstee shaU be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Tmstee in good faith pursuant to this Tmst Agreement upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Certificate, shaU be conclusive and binding upon afl fiiture Owners of the same Certificate and upon Certificates executed and deUvered in exchange therefor or in place thereof. The Tmstee shall not be bound to recognize any person as an Owner of any Certificate or to take any action at his request unless such Certificate shaU be deposited with the Tmstee or satisfactory evidence of the ownership of such Certificate shall be fiimished to the Tmstee. As to the existence or non-existence of any fact or as to the sufficiency or vaUdity of any instmment, paper or proceeding, the Trustee shall be entitled to rely upon a certificate signed by an Corporation Representative or a City Representative as suflficient evidence of the facts therein contained and prior to the occurrence of an Event of Default of which the Tmstee has been given notice, shall also be at Uberty to accept a similar certificate to the efifect that any particular deaUng, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Tmstee may accept a certificate of an Corporation Representative or a City Representative to the eflfect that an authorization in the form therein set forth has been adopted by the Corporation or the City, as the case may be, as conclusive evidence that such authorization has been duly adopted, and is in full force and eflfect. The permissive right of the Tmstee to do things enumerated in this Tmst Agreement shafl not be constmed as a duty and it shall not be answerable for other than its negUgence or willful default. The immunities and exceptions Grom UabiUty of the Tmstee shaU extend to its officers, directors, employees and agents. -22- The Tmstee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except failure by the City to make any of the Lease Payments to the Tmstee required to be made by the City pursuant to the Lease Agreement or failure by the Corporation or the City to file with the Tmstee any document required by this Tmst Agreement or the Lease Agreement to be so filed subsequent to the delivery of the Certificates, unless the Tmstee shall be specificaUy notified in writing of such default by the Corporation, the City or by the Owners of at least five percent (5%) in aggregate principal amount of Certificates then Outstanding and all notices or other instruments required by this Tmst Agreement to be delivered to the Tmstee must, in order to be effective, be delivered at the Principal Corporate Tmst Oflfice of the Tmstee, and in the absence of such notice so delivered the Tmstee may conclusively assume there is no Event of Default except as aforesaid. The Tmstee shall not be required to give any bond or surety in respect of the execution of the said tmsts and powers or otherwise in respect of the premises. Notwithstanding anjd^hing elsewhere in this Tmst Agreement with respect to the execution of any Certificates, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Tmst Agreement, the Tmstee shaU have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, in addition so that by the terms hereof required as a condition of such action, by the Tmstee deemed desirable for the purpose of establishing the right of the City to the withdrawal of any cash, or the taking of any other action by the Tmstee. All moneys received by the Tmstee shall, until used or applied or invested as herein provided, be held in tmst for the purposes for which they were received but need not be segregated fi-om other funds except to the extent required by law. The Tmstee shaU not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Owners of a m^ority in aggregate principal amount of the Outstanding Certificates relating to the time, method and place of conducting any proceeding for any remedy avaflable to the Tmstee, or exercising any tmst or power conferred upon the Tmstee, under this Tmst Agreement. Before being required to take any action, the Tmstee may require an opinion of Independent Coimsel acceptable to the Tmstee, which opinion shafl 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, conceming the proposed action. If it does so in good faith, the Tmstee shall be absolutely protected in reljdng thereon. Section 9.03. Fees, Charges and Expenses of Tmstee. The Tmstee shafl be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all advances, counsel fees (including expenses) and other expenses reasonably and necessarfly made or incurred by the Tmstee in connection with such services. Subject to applicable escheat laws, any amounts unclaimed five years after the final redemption or maturity date of the Certificates, whichever occurs first, shaU be paid -23- by the Tmstee to the City, and thereafter, the Owner of any Certificate remaining unpaid shaU look to the City Tor the payment of such Certificates. Section 9.04. Notice to Certificate Owners of Default. If an Event of Default occurs of which the Tmstee has been given notice, then the Tmstee shaU promptly give written notice thereof by first class mafl to the Owner of each Certificate, unless such Event of Defavflt shafl have been cured before the giving of such notice; provided, however that unless such Event of Default consists of the faflure by the City to make any Lease Payment when due, the Tmstee may elect not to give such notice if and so long as the Tmstee in good faith determines that it is in the best interests of the Certificate Owners not to give such notice. Section 9.05. Intervention by Tmstee. In any judicial proceeding to which the Corporation or the City is a party which, in the opinion of the Tmstee and its counsel, has a substantial bearing on the interests of Owners of the Certificates, the Tmstee may intervene on behalf of the Certificate Owners, and shafl do so if requested in writing by the Owners of at least five percent (5%) ofthe aggregate principal amount of Certificates then Outstanding and upon being indemnified to its satisfaction therefor. The rights and obUgations of the Tmstee under this Section 9.05 are subject to the approval of a court of competent jurisdiction. Section 9.06. Removal of Tmstee. The City may, with the consent of the Corporation, remove the Tmstee initially appointed, and any successor thereto, by an instmment or concurrent instruments in writing delivered to the Tmstee and the Corporation, and may appoint a successor or successors thereto; provided that any such successor shall be a bank or tmst company meeting the requirements set forth in Section 9.01 hereof. Section 9.07. Resignation by Tmstee. The Tmstee and any successor Tmstee may, at any time, resign by giving thirty (30) days' written notice by registered or certified mafl to the City and the Corporation. Upon receiving such notice of resignation, the City shall promptly appoint a successor Tmstee. Any resignation or removal of the Tmstee and appointment of a successor Tmstee shall become effective upon acceptance of appointment by the successor Tmstee. Upon such acceptance, the City shafl mafl notice thereof to the Certificate Owners at their respective addresses set forth on the Registration Books. Section 9.08. Appointment of Successor Tmstee. In the event of the removal or resignation of the Tmstee pursuant to Sections 9.06 or 9.07 hereof, respectively, the City shafl promptly appoint a successor Tmstee. In the event the City shafl, for any reason whatsoever, fail to appoint a successor Tmstee within thirty (30) days foflowing the delivery to the Tmstee of the instmment described in Section 9.06 hereof or within thirty (30) days following the receipt of notice by the City pursuant to Section 9.07 hereof, the Tmstee may apply to a court of competent jurisdiction for the appointment of a successor Tmstee meeting the requirements of Section 9.01 hereof. Any such successor Trustee appointed by such court shafl become the successor Tmstee hereunder notwithstanding any action by the City purporting to appoint a successor Tmstee foflowing the expiration of such thirty (30) day period. Section 9.09. Merger or Consolidation. Any company or association into which -24- the Tmstee may be merged or converted or with which it may be consoUdated or any company resulting from any merger, conversion or consolidation to which it shaU be a party or any company or association to which the Tmstee may sell or transfer afl or substantially all of its corporate tmst business, provided that such company or association shall be eligible under Section 9.01 hereof, shall be the successor to the Tmstee and vested with all of the title to the tmst estate and all of the tmsts, powers, discretions, immunities, privileges and aU other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding. Section 9.10. Conceming any Successor Tmstee. Every successor Tmstee appointed hereunder shall execute, acknowledge and deUver to its or his predecessor and also the Corporation and the City an instmment in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, tmsts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the written request of the City, or of its successor, execute and deliver an instmment transferring to such successor all the estates, properties, rights, powers and tmsts of such predecessor hereunder; and every predecessor Tmstee shall dehver all securities and moneys held by it as the Tmstee hereunder to its successor. Should any instrument in writing from the City be required by any successor Tmstee for more fuUy and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instmments in writing shall, on request, be executed, acknowledged and delivered by the City. The resignation of any Tmstee and the instmment or instmments removing any 'Tmstee and appointing a successor hereunder, together with all other instruments provided for in this Article DC, shall be filed or recorded by the successor Tmstee in each recording oflfice where the Assignment Agreement shall have been filed or recorded. -25- ARTICLE X MODIFICATION OR AMENDMENT OF AGREEMENTS Section 10.01. Amendments Permitted. This Tmst Agreement and the rights and obligations of the Owners of the Certificates 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 shaU become effective when the written consents of the Owners of a majority percent in aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates disqualified as provided in Section 10.03 hereof, shall have been filed with the Tmstee. 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 eflfect of reducing the percentage of Certificates reqvured for the affirmative vote or written consent to an amendment or modification of the Lease Agreement, or (3) modify any of the rights or obUgations of the Tmstee without its written assent thereto. Any such supplemental agreement shafl become effective as provided in Section 10.02 hereof. This Tmst Agreement and the rights and obligations of the Owners of the Certificates and the Lease Agreement and the rights and obUgations 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 party, other covenants to be observed, or to surrender any right or power herein reserved to the Corporation or the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein or therein and which shall not, in the opinion of nationaUy recognized bond counsel, adversely affect the interests of the Owners of the Certificates, (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which shall not, in the opinion of nationafly recognized bond covmsel, adversely affect the interests of the Owners of the Certificates, (4) to modify the legal description either 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; or (5) to make such additions, deletions or modifications as may be necessary to assure exclusion from gross income for purposes of Federal income taxation of the interest component of Lease Payments. Any such supplemental agreement shall become effective upon execution and delivery by the parties hereto or thereto, as the case may be. Section 10.02. Procedure for Amendment with Written Consent of Certificate Owners. This Tmst Agreement and the Lease Agreement may be amended by supplemental agreement as provided in this Section 10.02 in the event the consent of the Owners of the Certificates is required pursuant to Section 10.01 hereof. A copy of such supplemental agreement, together with a request to the Certificate Owners for their consent thereto, shall be mafled by the Tmstee to each Owner of a Certificate at his address as set forth on the Registration Books, but failure to mafl copies of such -26- supplemental agreement and request shafl not affect the vahdity of the supplemental agreement when assented to as in this Section 10.02 provided. Such supplemental agreement shall not become effective unless there shafl be fUed with the Tmstee the written consents of the Owners of a msyority in aggregate principal amount of the Certificates then Outstanding (exclusive of Certificates disqualified as provided in Section 10.03 hereof) and a notice shaU have been mafled as hereinafter in this Section 10.02 provided. Each such consent shaU be eflfective 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 2.11 hereof. Any such consent shafl 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) imless such consent is revoked in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Tmstee prior to the date when the notice hereinafter in this Section 10.02 provided for has been mafled. After the Owners of the required percentage of Certificates shall have filed their consents to such supplemental agreement, the Tmstee shall mail a notice to the Owners of the Certificates in the manner hereinbefore provided in this Section 10.02 for the mafling 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 eflfective as provided in this Section 10.02 (but failure to mail 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 10.02 to be filed with the Tmstee, 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 ffling, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or eqvutable proceeding for such purpose commenced within such sixty (60) day period. Section 10.03. Disqualified Certificates. Certificates owned or held by or for the account of the City or by any person directly or indirectly controfled or controfled by, or under direct or indirect common control with the City (except any Certificates held in any pension or retirement fimd) 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 Tmst Agreement, and shall not be entitled to vote upon, consent to, or take any other action provided for in this Tmst Agreement. Section 10.04. Eflfect of Supplemental Agreement. From and after the time any supplemental agreement becomes eflfective pursuant to this Article X, this Tmst 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 obUgations 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 afl 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 Tmst Agreement or the Lease Agreement, as the case may be, for any and afl purposes. -27- Each Certificate Owner shafl certify to the Tmstee whether the Certificates as to which such consent is given are disquaUfied as provided in Section 10.03 hereof. Section 10.05. Endorsement or Replacement of Certificates Dehvered After Amendments. The Tmstee may determine that Certificates delivered after the eflfective date of any action taken as provided in this Article X shall bear a notation, by endorsement or otherwise, in form approved by the Tmstee, as to such action. In that case, upon demand of the Owner of any Certificate Outstanding at such eflfective date and presentation of his Certificate for the purpose at the Principal Corporate Tmst Oflfice of the Tmstee, a suitable notation shall be made on such Certificate. The Tmstee may determine that the delivery of substitute Certificates, so modified as in the opinion of the Tmstee is necessary to conform to such Certificate Owners' action, which substitute Certificates shall thereupon be prepared, executed and deUvered. In that case, upon demand of the Owner of any Certificate then Outstanding, such substitute Certificate shall be exchanged at the Principal Corporate Tmst Oflfice of the Tmstee, without cost to such Owner, for a Certificate of the same character then Outstanding, upon surrender of such Outstanding Certificate. Section 10.06. Amendatory Endorsement of Certificates. The provisions of this Article X shall not prevent any Certificate Owner fi"om accepting any amendment as to the particular Certificates held by him, provided that proper notation thereof is made on such Certificates. # -28- ARTICLE XI COVENANTS; NOTICES Section 11.01. CompUance With and Enforcement of Lease Agreement. The City covenants and agrees with the Owners of the Certificates to perform afl obUgations and duties imposed on it under the Lease Agreement. The Corporation covenants and agrees with the Owners of the Certificates to perform aU obligations and duties imposed on it under the Lease Agreement. The City will not do or permit anything to be done, or omit or refrain fi-om doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining fi-om action, would or might be a ground for canceUation or termination of the Lease Agreement by the Corporation thereunder. The Corporation and the City, 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 City, wiU deUver the same, or a copy thereof, to the Tmstee. Section 11.02. Observance of Laws and Regulations. The City wifl well and tmly 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 fi-anchise now owned or hereafter acquired by the City, including its right to exist and carry on business as a municipal corporation, to the end that such rights, privfleges and fi*anchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired. Section 11.03. Prosecution and Defense of Suits. The City shall promptly, upon request of the Tmstee or any Certificate Owner, fi-om time to time take such action as may be necessary or proper to remedy or cure any defect in or cloud upon the title to the Project and the Site, whether now existing or hereafter developing and shall prosecute afl such suits, actions and other proceedings as may be appropriate for such purpose and shall indemnify and save the Tmstee and every Certificate Owner harmless from all loss, cost, damage and expense, including attomeys' fees, which they or any of them may incur by reason of any such defect, cloud, suit, action or proceeding. Section 11.04. Recordation and Filing. The City shall record and ffle the Lease Agreement (or a memorandum thereof), the Assignment Agreement and afl such documents as may be required by law (and shall take all further actions which may be necessary or be reasonably required by the Tmstee), aU 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 Tmstee and the Certificate Owners. Section 11.05. City Budgets. The City shall supply to the Tmstee, on or about July 1 in each year a written determination by a City Representative that the City has made adequate provision in its proposed annual budget for the pajTuent of Lease Payments due under the Lease Agreement in the fiscal year covered by such budget. -29- Such determination shaU be made as soon as practicable after the first pubhcation of any notice of pubUc hearing upon the proposed budget of the City and shaU be made, in any event, not later than the date fixed for any pubhc hearing on the proposed budget. The determination given by the City to the Tmstee shaU be that the amounts so budgeted are fully adequate for the payment of aU Lease Payments due under the Lease Agreement m the annual period covered by such budget. If the amounts so budgeted are not at least equal to the amount of the Lease Payments commg due and payable under the Lease Agreement, the City wfll take such action as may be necessary to cause such annual budget to be amended, corrected or augmented so as to include therein the amounts required to be raised by the City in such period for the payment of Lease Payments coming due and payable under the Lease Agreement and wfll notify the Tmstee of the proceedings then taken or proposed to be taken by the City. The City wfll keep the Tmstee advised of afl budgetary proceedings thereafter taken by the City. Section 11.06. Further Assurances. The Corporation and the City wifl make, execute and deliver any and afl such further resolutions, mstmments and assvirances as may be reasonably necessary or proper to carry out the intention or to faciUtate the performance of this Tmst Agreement and the Lease Agreement, or as may be requested by the Tmstee and for the better assuring and confirmmg unto the Owners of the Certificates and the Tmstee the rights and benefits provided herein. it -30- ARTICLE xn LIMITATION OF LIABILITY Section 12.01. Limited Liability of City. 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 City contained in the Lease Agreement and this Tmst Agreement, the City shafl have no pecuniary obligation or habihty to any of the other parties or to the Owners of the Certificates with respect to this Tmst Agreement or the terms, execution, deUvery or transfer of the Certificates, or the distribution of Lease Payments to the Owners by the Tmstee, except as expressly set forth herein. Section 12.02. No Liabflity of City or Corporation for Tmstee Performance. Neither the City nor the Corporation shall have any obligation or Uabflity to any of the other parties or to the Owners of the Certificates with respect to the performance by the Tmstee of any duty imposed upon it under this Tmst Agreement. Section 12.03. Indemnification of Tmstee. The City shafl indemnify and save the Tmstee harmless from and against afl .claims, losses, costs, expenses, Uabflity 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 by the Corporation or the City, (u) any breach or default on the part of the Corporation or the City in the performance of any of their respective obUgations under this Trust Agreement and any other agreement made and entered into for purposes of the Project, (ui) any act of negligence of the Corporation or the City or of any of their respective agents, contractors, servants, employees, licensees with respect to the Project, (iv) any act of negUgence of any assignee of, or purchaser from the Corporation of the City or of any of its or their respective agents, contractors, servants, employees or licensees with respect to the Project, (v) the authorization of payment or DeUvery Costs or Acquisition and Constmction Costs, (vi) the actions of any other party, including but not limited to the ownership, operation or use of the Project by the Corporation or the City, or (vu) the Tmstee's exercise and performance of its powers and duties hereunder. No indemnification will be made under this Section 12.03 or elsewhere in this Tmst Agreement for willful misconduct or negligence under this Tmst Agreement by the Tmstee, its officers, agents, employees, successors or assigns. The City's obUgations hereunder shall remain vaUd and binding notwithstanding maturity and payment of the Certificates. Section 12.04. Limitation of Rights to Parties and Certificate Owners. Nothing in this Tmst Agreement or in the Certificates expressed or implied is intended or shall be constmed to give any person other than the City, the Corporation, the Tmstee and the Owners of the Certificates, any legal or equitable right, remedy or claim vmder or in respect of this Tmst 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 City, the Corporation, the Tmstee and said Owners. -31- ARTICLE xm EVENTS OF DEFAULT/iND REMEDIES OF CERTIFICATE OWNERS Section 13.01. Assignment of Rights. Pursuant to the Assignment Agreement, the Corporation has transferred, assigned and set over to the Tmstee aU of the Corporation's rights and duties in and to the Lease Agreement (excepting only the Corporation's rights under Sections 5.8, 7.3 and 9.4 thereof), including without limitation all of the Corporation's rights to exercise such rights and remedies conferred on the Corporation pursuant to the Lease Agreement as may be necessary or convenient (i) to enforce payment of the Lease Payments and any other amovmts reqviired to be deposited in the Lease Payment Fund or the Insurance and Condemnation Award Fvmd, and (u) otherwise to exercise the Corporation's rights and take any action to protect the interests of the Tmstee or the Certificate Owners in an Event of Default. Section 13.02. Remedies. If an Event of Default shaU happen, then and in each and every such case during the continuance of such Event of Default, the Tmstee may, and upon written request of the Owners of a majority in aggregate principal amount of the Certificates then Outstanding shall, exercise any and all remedies avaflable 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 shafl 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. In the event the City has defaulted under the Lease Agreement and the Tmstee has elected to sublease the Project and Site on behalf of the City or terminate the Lease Agreement, the Tmstee shall, to the extent reasonably possible, lease or sublease the Site and the Project to the State of Califomia or a political subdivision thereof. Section 13.03. Application of Funds. AU moneys received by the Tmstee pursuant to any right given or action taken under the provisions of this Article XHI or Article DC of the Lease Agreement shaU be appUed by the Tmstee in the order foflowing upon presentation of the several Certificates, and the steunping thereon of the pajTnent if only partially paid, or upon the surrender thereof if fufly paid - First, to the payment of the costs and expenses of the Tmstee and of the Certificate Owners in declaring such Event of Default, including reasonable compensation to its or their agents, attomeys and counsel, including afl fees and expenses past due; and 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 instaflments of interest at the rate of twelve percent (12%) per annum (but such interest on overdue instaflments of interest shafl be paid only to the extent funds are avaflable therefor following payment of principal and interest and interest on overdue principal, as aforesaid), and in case such moneys shall be insufficient to pay in fufl 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 -32- ( any instaflment of interest over any other installment of interest, ratably to the aggregate of such principal and interest. Section 13.04. Institution of Legal Proceedings. If one or more Events of Default shafl happen and be continuing, the Tmstee in its discretion may, and upon the written request of the Owners of a majority in aggregate principal amount of the Certificates then Outstanding, and upon being indemnified to its satisfaction therefor, shafl, 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 Tmstee shafl deem most effectual in support of any of its rights or duties hereunder. Section 13.05. Non-waiver. Nothing in this Article Xin or in any other provision of this Tmst Agreement or in the Certificates, shall affect or impair the obUgation of the City to pay or prepay the Lease Payments as provided in the Lease Agreement, or aflfect or impair the right of action, which is absolute and unconditional, of the Certificate Owners to institute suit to enforce and collect such payment. No delay or omission of the Tmstee or of any Owner of any of the Certificates to exercise any right or power arising upon the happening of any Event of Default shaU impair any such right or power or shaU be constmed to be a waiver of any such Event of Default or an acquiescence therein, and every power and remedy given by this Article XIII to the Tmstee or to the Owners of Certificates may be exercised from time to time and as often as shall be deemed expedient by the Tmstee or the Certificate Owners. Section 13.06. Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Tmstee or to the Certificate Owners is intended to be exclusive of any other remedy, and every such remedy shaU 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 13.07. Power of Tmstee to Control Proceedings. In the event that the Tmstee, 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 aggregate 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 Tmstee 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 13.08. 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 Tmst Agreement, unless (a) such Owner shall have previously given to the Tmstee 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 -33- have made written request upon the Tmstee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; (c) said Owners shaU have tendered to the Tmstee reasonable indemnity against the costs, expenses and UabiUties to be incurred in compliance with such request; and (d) the Tmstee shaU 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 shaU have been made to, the Tmstee. 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 shaU have any right in any manner whatever by his or their action to enforce any right under this Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity with respect to an Event of Default shaU 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 fi-actional 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 aflfected without the consent of such Owner, notwithstanding the foregoing provisions of this Section 13.08 or any other provision of this Tmst Agreement. -34- ARTICLE XIV MISCELLANEOUS Section 14.01. Defeasance. If and when all Outstanding Certificates shafl be paid and discharged in any one or more of the following w^ays - (a) by wefl and tmly paying or causing to be paid the principal, and interest and redemption premiums (if any) with respect to aU Certificates Outstanding, as and when the same become due and payable; or (b) by depositing with an escrow holder security for the payment of Lease Pa3Tnents as more particularly described in Section 10.1 of the Lease Agreement, to be applied to pay the Lease Payments as the same become due and payable and prepay the Lease Payments in full on any prepayment date, pursuant to Section 10.1 of the Lease Agreement - then, notwithstanding that any Certificates shaU not have been surrendered for payment, all obligations of the Corporation, the Tmstee and the City with respect to afl Outstanding Certificates shall cease and terminate, except only the obUgation of the City to pay or cause to be paid, from Lease Pajrments paid by or on behalf of the City fi-om funds deposited pursuant to paragraph (b) of this Section 14.01, to the Owners of the Certificates not so surrendered and paid all sums due with respect thereto, and in the event of deposits pursuant to paragraph (b), the Certificates shall continue to represent direct and fractional interests of the Owners thereof in Lease Payments under the Lease Agreement. Any funds held by the Tmstee, at the time of one of the events described in paragraphs (a) or (b) ofthis Section 14.01, which are not required for the payment to be made to Owners, shaU be paid over to the City. Section 14.02. Records. The Tmstee shaU keep complete and accurate records of all moneys received and disbursed under this Tmst Agreement, which shall be avaflable for inspection by the City, the Corporation, and any Owner, or the agent of any of them, at any time during regular business hours. Section 14.03. Notices. Afl written notices to be given under this Tmst 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 party in writing from time to time. Notice shafl be effective upon deposit in the United States mail, postage prepaid or, in the case of personal delivery, upon deUvery to the address set forth below: If to the City: City of Carlsbad 1200 Elm Avenue Carlsbad, CaUfomia 92008 Attention: City Manager -35- If to the Corporation: City of Carlsbad PubUc Improvement Corporation 1200 Elm Avenue Carisbad, Califomia 92008 Attention: President If to the Tmstee: The Bank of Califomia, N.A. 400 Califomia Street, 10th Floor San Francisco, Califomia 94104 Attention: Corporate Tmst Administration Section 14.04. Goveming Law. This Tmst Agreement shaU be constmed and govemed in accordance with the laws of the State. Section 14.05. Binding Effect: Successors. This Tmst Agreement shafl be bmding upon and inure to the benefit of the parties hereto and their respective successors and assigns. WTienever m this Tmst Agreement the Corporation, the City or the Tmstee is named or referred to, such reference shafl be deemed to include the successors or assigns thereof, and afl the covenants and agreements in this Tmst Agreement contamed by or on behalf of the Corporation, the City or the Tmstee shafl bmd and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 14.06. Execution in Countemarts. This Tmst Agreement may be executed m several counterparts, each of which shafl be an original and afl of which shafl constitute but one and the same agreement. Section 14.07. Delivery of CanceUed Certificates. Whenever in this Tmst Agreement provision is made for the surrender to or cancellation by the Tmstee of any Certificates, the Tmstee shaU deUver such canceUed Certificates to the City for destmction or storage. Section 14.08. Headings. The headmgs or tities of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shaU be solely for convenience of reference and shaU not aflfect the meaning, constmction or eflfect of this Tmst Agreement. All references herem to "Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Tmst Agreement; and the words "herein," "hereof," "hereunder" and other words of sinular import refer to this Tmst Agreement as a whole and not to any particular Article, Section or subdivision hereof. Section 14.09. Waiver of Notice. Whenever in this Tmst Agreement the givmg of notice by mafl 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 shafl not be a condition precedent to the vaUdity of any action taken in reUance upon such waiver. Section 14.10. Separability of InvaUd Provisions. In case any one or more ofthe provisions contained in this Tmst Agreement or in the Certificates shafl for any reason be held to be invaUd, iflegal or vmenforceable in any respect, then such invaUdity, iUegality or unenforceabiUty shaU not aflfect any other provision of this Tmst Agreement, -36- 4 and this Tmst Agreement shaU be constmed as if such invahd or iUegal or vmenforceable provision had never been contained herein. The parties hereto hereby declare that they would have entered into this Tmst 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 Tmst Agreement may be held fllegal, invalid or unenforceable. -37- IN WTTNESS TOEREOF, the parties hereto have executed this Tmst Agreement as of the date and year first above written. THE BANK OF CALIFORNIA, N.A., as Tmstee By Authorized Officer (SEAL) Attest: aTY OF CARLSBAD PUBUC IMPROVEMENT CORPORATION Secretajy J (SEAL) Attest: CITY OF C ifii 1 iir iVn II — I. City Clerk • " j -38- EXHIBIT A DEFINITIONS "Acquisition and Construction Costs" means all costs of payment of, or reimbursement for, acquisition, constmction, installation and equipping of the Project, including but not limited to, architect and engineering fees, constmction contractor payments, costs of feasibility and other reports, inspection costs, performance bond premiums and permit fees. "Acquisition and Construction Fund" means the fund by that name estabUshed and held by the City pursuant to Article III of the Tmst Agreement. "Agency Agreement" means that certain Agency Agreement, dated as of June 1, 1988, by and between the Corporation and the City. "Assignment Agreement" means the Assignment Agreement, dated as of June 1, 1988, by and between the Corporation and the Tmstee, together with any duly authorized and executed amendments thereto. "Business Day" means a day which is not a Saturday, Sunday or legal hoUday on which banking institutions in the State are closed or are required to close or a day on V^l^ which the New York Stock Exchange is closed. "Certificate of Completion" means the certificate of a City Representative certifying that the Project has been acquired, constmcted, instaUed and equipped by the City and that all Acquisition and Constmction Costs have been paid. "Ceriificates" means the $8,690,000 aggregate principal amovmt of certificates of participation to be executed and delivered pursuant to the Tmst Agreement. "Certificate Year" means the twelve month period beginning on the anniversary of the Closing Date in each year and endmg on the day prior to the anniversary date of the Closing Date in the following year except that the first Certificate Year shafl begin on the Closing Date. "City" means the City of Carlsbad, a municipal corporation and general law city organized and existing under the laws of the State. "City Representative" means the City Manager ofthe City or any other person authorized by resolution of the City Councfl of the City to act on behalf of the City under or with respect to the Lease Agreement, the Tmst Agreement and the Corporation Agreement. "Closing Date" means June 28, 1988, being the date upon which there is an exchange ofthe Certificates for the proceeds representing the purchase ofthe Certificates by the Original Purchaser. "Code" means the Intemal Revenue Code of 1986, as amended. "Completion Date" means the earUer of (i) the date of substantial completion of acquisition, constmction, instaUation and equipping of the Project as evidenced by the fiUng with the Tmstee of a Certificate of Completion, and (U) June 1, 1991. "Contractor" means the contractorts) or vendor(s) flrom whom the Corporation or the City on behalf of the Corporation has ordered or caused to be ordered or with whom the Corporation or the City on behalf of the Corporation has contracted or caused to be contracted for the acquisition and constmction of the Project. "Corporation" means the City ofCarlsbad Public Improvement Corporation, a nonprofit public benefit corporation organized and existing under and by virtue of the laws ofthe State. "Corporation Representative" means the President of the Corporation, or any other person authorized by resolution of the Corporation to act on behalf of the Corporation under or with respect to the Lease Agreement, the Tmst Agreement, the Agency Agreement and the Assignment Agreement. "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. "Delivery Costs" means aU items of expense directly or indirectly payable by or reimbursable to the City or the Corporation relating to the execution and delivery of the Lease Agreement, the Tmst Agreement, the Agency Agreement and the Assignment Agreement or the execution, sale and deUvery of the Certificates, including but not limited to filing and recording costs, settlement costs, printmg costs, reproduction and buading costs, mitial fees and chaises of the Tmstee, financing discounts, legal fees and charges, 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. "Delivery Costs Fund" means the fimd by that name established and held by the Tmstee pursuant to Article HI of the Tmst Agreement. "Escrow Fund" means the fvmd by that name established and held by the Tmstee pursuant to Section 6.06 of the Tmst Agreement "Event of Default" means an event of default under the Lease Agreement, as defined in Section 9.1 thereof. "Excess Investment Eamings Account" means the account by that name estabUshed pursuant to Section 8.07 of this Tmst Agreement. "Federal Securities" means any of the foUowing which are noncaflable and which at the time of investment are legal investments vmder the laws of the State for tmst funds held by the Tmstee: Exhibit A Page 2 (a) direct general obligations of (including obligations issued or held in book entry form on the books ofthe Department ofthe Treasury ofthe United States of America), or obligations the payment of principal of and interest on which are guaranteed by, the United States of America; or (b) any of the following obligations of the following agencies of the United States of America: (i) direct obligations ofthe Export-Import Bank; (ii) certificates of beneficial ownership issued by the Farmers Home Administration; (in) participation certificates issued by the General Services Administration; (iv) mortgage-backed bonds or pass- through obUgations issued and guaranteed by the Govemment National Mortgage Association; (v) project notes issued by the United States Department of Housing and Urban Development; and (vi) pubhc housing notes and bonds guaranteed by the United States of America. "Fiscal Year" means the twelve-month period beginning on July 1 of any year and ending on June 30 of the next succeeding year, or any other twelve-month period selected by the City as its fiscal year. "Gross Proceeds" means the sum ofthe following amounts: (a) original proceeds, namely, net amounts (after payment of all expenses of executing and delivering the Lease Agreement and the Certificates) received by or for the City as a result of the sale of the Certificates, excluding original proceeds which become transferred proceeds (determined in accordance with applicable Regulations) of obligations issued to refund in whole or in part the Lease Payments; (b) investment proceeds, namely, amounts received at any time by or for the City, such as interest and dividends, resulting from the investment of any original proceeds (as referenced in paragraph (a) above) or investment proceeds (as referenced in this paragraph (b)) in Nonpurpose ObUgations, increased by any profits and decreased (if necessary, below zero) by any losses on such investments, excluding investment proceeds which become transferred proceeds (determined in accordance with appUcable Regulations) of obligations issued to refund in whole or in part the Lease Payments; (c) sinking fund proceeds, namely, amounts, other than original proceeds or investment proceeds (as referenced in paragraphs (a) and (b) above) of the Certificates, which are held in any Lease Payment Fund and any other fund to the extent that the City reasonably expects to use such other fund to pay Lease Payments; (d) amounts in the Reserve Fund and in any other fund estabUshed as a reasonably required reserve or replacement fund; (e) Investment Property pledged as security for payment of Lease Payments by an ultimate obligor or a related person or by the City; (f) amounts, other than as specified in this definition, used to pay Lease Payments; and (g) amovmts received as a result of investing amounts described in this definition. Exhibit A Page 3 "Independent Counsel" means an attomey duly admitted to the practice of law before the highest court of the state in which such attomey maintains an oflfice and who is not an employee of the Corporation, the Tmstee or the City. "Information Services" means Financial Information, Inc.'s "Daily CaUed Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor; Kenny Information Services' "CaUed Bond Service," 55 Broad Street, 28th Floor, New York, New York 10004; Moody's "Municipal and Govemment," 99 Church Street, 8th Floor, New York, New York 10007, Attention: Municipal News Reports; and Standard & Poor's "CaUed Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; or to such other addresses and/or such other national information services providing information or disseminating notices of redemption of obligations such as the Certificates and designated by the City in a written request signed by a City Representative filed with the Tmstee. "Insurance and Condemnation Fund" means the fvmd by that name established and held by the Tmstee pursuant to Section 7.01 ofthe Tmst Agreement. "Interest Payment Date" means the first day of each Febmary and August, commencing Febmary 1, 1989, so long as any Certificates are Outstanding. "Investment Eamings Account" means the account by that name established pursuant to Section 8.07 of this Tmst Agreement. "Investment Properiy" means any security (as said term is defined in section 165(g)(2)(A) or (B) ofthe Code), obligation, annuity or investment-type property, excluding, however, obligations the interest on which is exempt fi-om income tax under section 103 of the Code. "Lease Agreement" means the Lease Agreement, dated as of June 1, 1988, by and between the Corporation and the City, together with any duly authorized and executed amendments thereto. "Lease Payments" means all payments required to be paid by the City pursuant to Section 4.4 of the Lease Agreement, including any prepayment thereof pursuant to Article X of the Lease Agreement, which payments consist of an interest component and a principal component. "Lease Payment Date" means the fifteenth (15th) day of July and January in each year during the Term ofthe Lease Agreement, commencing January 15, 1989. "Lease Payment Fund" means the fiind by that name established and held by the Tmstee pursuant to Section 5.02 of the Tmst Agreement. "Moody's" means Moody's Investors Service of New York, New York, or its successors. "Net Proceeds," when used with respect to insurance or condenmation proceeds, means any insurance proceeds or condemnation award paid with respect to the Project or the Site, to the extent remaining after payment therefi-om of all expenses incurred in the Exhibit A Page 4 coUection thereof. "Net Proceeds," when used with reference to the Certificates, means the face amount of the Certificates, plus accmed interest and premium, if any, less original issue discount and less proceeds deposited in the Reserve Fund. "Nonpurpose Obligation" means any Investment Property which is acquired with the proceeds of the Certificates and is not acquired in order to carry out the govemmental purpose of the Lease Agreement. "Notes" means the Notes ofthe City issued on July 16, 1987 in the principal amount of $6,555,000, and maturing June 30, 1988. "Original Purchaser" means Rauscher Pierce Refsnes, Inc., as original purchaser of the Certificates. "Outstanding", when used as ofany particular time with respect to Certificates, means (subject to the provisions of Section 10.03 of the Tmst Agreement) afl Certificates theretofore executed and dehvered by the Tmstee under the Tmst Agreement except - (a) Certificates theretofore cancefled by the Tmstee or surrendered to the Tmstee for cancellation; (b) Certificates for the payment or redemption of which funds or Federal Securities in the necessary amount shall have theretofore been deposited with the Tmstee (whether upon or prior to the maturity or redemption date of such Certificates), provided that, if such Certificates are to be redeemed prior to maturity, notice of such redemption shafl have been given as provided in Section 4.03 ofthe Tmst Agreement or provision satisfactory to the Tmstee shall have been made for the giving of such notice; and (c) Certificates in Ueu of or in exchange for which other Certificates shaU have been executed and delivered by the Tmstee pursuant to Section 2.09 of the Tmst Agreement. "Owner" or "Certificate Owner" or "Owner of a Certificate", or any simflar term, when used with respect to a Certificate means the person in whose name such Certificate shafl be registered. "Permitted Encumbrances" means, as of any particular time: (a) Uens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article V ofthe Lease Agreement, permit to remain unpaid; (b) the Assignment Agreement; (c) the Lease Agreement; (d) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (e) 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 City certifies in writing wiU not materially impair the use of the Site for the Project; and (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the date of recordation of the Lease Agreement and to which the Corporation and the City consent in writing. Exhibit A Page 5 "Permitted Investments" means any of the foflowing which at the time of investment are legal investments under the laws of the State for the moneys proposed to be invested therein: (a) Federal Securities; (b) Any of the following obhgations of federal agencies not guaranteed by the United States of America: (i) debentures issued by the Federal Housing Administration; (ii) participation certificates or senior debt obligations of the - Federal Home Loan Mortgage Corporation or Farm Credit Banks (consisting of Federal Land Banks, Federal Intermediate Credit Banks, or Banks for Cooperatives); (iii) mortgage-backed securities or senior debt obhgations of the Federal National Mortgage Association; or (iv) credit-backed or senior debt obligations of the Student Loan Marketing Association. (c) interest-bearing demand or time deposits (including certificates of deposit) in federal or State chartered savings and loan associations or in federal or State banks (including the Tmstee), provided that (i) the obhgations of such savings and loan association or bank or the obUgations of the holding company of such savings and loan association or bank carry one of the three highest Rating Categories by Moody's and S&P, or (ii) such deposits are fufly insured by the Federal Deposit Insvirance Corporation or the Federal Savings and Loan Insurance Corporation; (d) obUgations issued by any corporation organized and operating within the United States of America having assets in excess of $500,000,000, which obligations carry one of the three highest long-term Rating Categories provided by Moody's and S&P; (e) repurchase agreements with any bank, savings institution or tmst company (including the Tmstee) which is rated "BBB" or better by S&P or is "over-coUaterized" by S&P standards, and which is insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or with any broker-dealer with retafl customers which fafls under Securities Investors Protection Corporation protection, provided that such repurchase agreements are fully secured by Federal Securities or obUgations of any agency or instmmentaUty ofthe United States of America, and provided further that (i) such coUateral is held by the Tmstee or any agent acting solely for the Tmstee during the term of such repurchase agreement, (u) such collateral is not subject to Uens or claims of third parties, (iu) such coUateral has a market value (determined at least once every 30 days) at least equal to the amount invested in the repurchase agreement, (iv) the Tmstee has a perfected first security interest in the collateral, (v) the agreement shaU be for a term not longer than 180 days and (vi) the failure to maintain such coUateral at the level required in (iii) above wfll require the Tmstee to serve notice to the other party to conect such deficiency. If such deficiency is not corrected, the Trustee is directed to Uqviidate the collateral; (f) money market funds: (i) comprised exclusively of Federal Securities; or (ii) for amounts of less than $100,000, maintained by the banking department of Exhibit A Page 6 the Tmstee, so long as the Tmstee, or its parent, has a combined capital and surplus of at least $50,000,000; (g) commercial paper having original maturities of not more than 180 days and rated in the highest Rating Category by Moody's and S&P; (h) bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as bankers acceptances, which have a maturity of not more than 270 days and which are eligible for purchase by the Federal Reserve System and the obligations of which commercial bank or the obligations of the holding company of which carry one of the three highest long- term Rating Categories by Moody's and S&P; and (i) tax-exempt obligations rated in one of the three highest rating categories by Moody's and S&P. "Principal Corporate Trust Office" means the corporate tmst oflfice of the Tmstee at 400 California Street, San Francisco, Califomia, or at such other address designated by the Tmstee in written notice filed with the City and the Corporation 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 pubhc. "Project" means the improvements to be constmcted on the Site, aU as more particularly described in Exhibit C attached to the Lease Agreement. "Rating Category" means, with respect to any Permitted Investment, one or more of the generic categories of rating by Moody's or S&P applicable to such Permitted Investment, without regard to any refinement or graduation of such rating category by a plus or minus sign. "Registration Books" means the records maintained by the Tmstee pursuant to Section 2.12 ofthe Tmst Agreement for registration of the ownership and transfer of ownership of the Certificates. "Regular Record Date" means the close of business on the fifteenth (15th) day of the month preceding each Interest Payment Date, whether or not such fifteenth (15th) day is a Business Day. "Regulations" means temporary and permanent regulations promulgated vmder the Code. "Rental Period" means each twelve-month period during the Term of the Lease Agreement commencing on August 2 in any year and ending on August 1 in the next succeeding year, except that the first Rental Period shall commence on Jvme 2,1988 and end on August 1, 1989. Exhibit A Page 7 "Reserve Fund" means the fund by that name established and held by the Tmstee pursuant to Section 6.01 of the Tmst Agreement. "Reserve Requirement" means an amount equal to $869,000. "S&P" means Standard & Poor's Corporation, of New York, New York, or its successors. "Securities Depositories" means The Depository Tmst Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; Midwest Securities Tmst Company, Capital Stmctures-CaU Notification, 440 South LaSaUe Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia Depository Tmst Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department, Dex-(215) 496-5058; or to such other addresses and/or such other registered securities depositories holding substantial amounts of obligations of types comprising the Certificates and designated by the City in a written request signed by a City Representative filed with the Tmstee. "Site" means all of that certain real property located in the City described in Exhibit B to the Lease Agreement, on which the Project is to be constmcted. "State" means the State of Califomia. "Term ofthe Lease Agreement" means the time during which the Lease Agreement is in eflfect, as provided in Section 4.2 ofthe Lease Agreement. "Trust Agreement" means the Tmst Agreement, dated as of June 1, 1988, by and among the City, the Corporation and the Tmstee, together with any duly authorized amendments thereto. "Trustee" means Bank of CaUfomia, N.A., or any successor thereto, acting as Tmstee pursuant to this Tmst Agreement. "Yield" means that yield which, when used in computing the present worth of aU payments of principal and interest (or other payments in the case of Nonpurpose- Obligations which require payments in a form not characterized as principal and interest) on a Nonpurpose Obligation or on the Lease Pajonents produces an amovmt equal to the Purchase Price of such Nonpurpose Obligation or the Certificates, all computed as prescribed in applicable Regulations. Exhibit A Page 8 EXHIBITB FORM OF THE CERTIFICATES CERTIFICATE OF PARTICIPATION (Hosp Grove Project) Evidencing an Undivided Fractional Interest of the Owner Hereof in Lease Payments to be Made by the CITY OF CARLSBAD, CALIFORNL\ As the Rental for Certain Property Pursuant to a Lease Agreement With the City of Carlsbad Public Improvement Corporation NUMBER R- $ RATE OF INTEREST MATURITY DATE DATED DATE CUSIP Jvme 1, 1988 REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS THIS IS TO CERTIFY THAT the registered owner identified above, or registered assigns (the "Owner"), as the registered owner ofthis Certificate of Participation (the "Certificate"), is the owner of an undivided, fractional interest in the right to receive certain Lease Payments under and as defined in that certain Lease Agreement (the "Lease Agreement"), dated as of June 1, 1988, by between the City of Carlsbad PubUc Improvement Corporation, a public body corporate and poUtic organized and existing under the laws ofthe State of Califomia (the "Corporation"), and the City ofCarlsbad, Califomia, a municipal corporation and general law city organized and existing under the laws ofthe State of Califomia (the "City"), which Lease Payments, prepayments and certain other rights and interests under the Lease Agreement have been assigned to The Bank of CaUfomia, N.A., as tmstee (the "Tmstee"), having its corporate tmst oflfice in San Francisco, Califomia. The Owner ofthis Certificate is entitled to receive, subject to the terms ofthe 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 August 1 and Febmary 1 of each year, commencing Febmary 1, 1989 (each, a "Payment Date"), untfl payment in fuU of said Principal Amount, the Owner's fi-actional share of the Lease Payments designated as interest coming due during the six months immediately preceding each of the Payment Dates; provided that interest represented hereby shafl 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, m which event interest shafl be payable from such Payment Date, or (u) this Certificate is executed after the close of business on the fifteenth day of the month immediately preceding a Payment Date, and prior to such Payment Date, in which event interest shafl be payable fi-om such Payment Date, or (iU) unless this Certificate is executed on or before January 15, 1989, in which event interest shafl be payable from June 1, 1988. Said fi-actional 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. Interest represented hereby is payable in lawful money of the United States of America by check or draft of the Tmstee mafled to the Owner hereof at his address as it appears on the registration books of the Tmstee, as of the close of business on the fifteenth (15) day preceding each Payment Date, or at such other address as the Owner may have ffled with the Tmstee for that purpose. Principal represented hereby is payable upon presentation and surrender hereof at the corporate tmst oflfice of the Tmstee in San Francisco, Califomia. This Certificate has been executed and delivered by the Tmstee pursuant to the terms of a Tmst Agreement, dated as of June 1, 1988 (the "Tmst Agreement"), by and among the Tmstee, the Corporation and the City. The City is authorized to enter into the Lease Agreement and the Tmst Agreement under the laws of the State of Califomia. Reference is hereby made to the Lease Agreement and the Tmst Agreement (copies of which are on ffle at the corporate tmst oflfice of the Tmstee) for a description of the terms on which the Certificates are delivered, the rights thereunder ofthe owners ofthe Certificates, the rights, duties and immunities of the Tmstee and the rights and obUgations ofthe City under the Lease Agreement, aU ofthe provisions of which the Owner of this Certificate, by acceptance hereof, assents and agrees. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS CERTIFICATE SET FORTH ON THE REVERSE HEREOF WHICH FURTHER PROVISIONS SHALL, FOR ALL PURPOSES, HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE. The Tmstee has no obUgation or UabiUty to the registered owners ofthe Certificates to make payments of principal or interest with respect to the Certificates other than fi-om the ftmds and accounts estabUshed under the Tmst Agreement. The Tmstee's primary obligations are to administer, for the benefit of the registered owners of the Certificates, the various fimds and accounts estabUshed under the Tmst Agreement. The City has certified, recited and declared that aU acts, conditions and things required by the constitution and statutes of the State of Califomia, the Lease Agreement and the Tmst Agreement to exist, to have happened and to have been performed precedent to and in the delivery of this Certificate, do exist, have happened and have been performed in due time, form and manner as required by law. Exhibit B Page 2 IN WITNESS WHEREOF, this Certificate has been executed by The Bank of Califomia, N.A., as tmstee, acting pursuant to the Tmst Agreement. Date of Execution: THE BANK OF CALIFORNIA, N.A., as Tmstee By_ Authorized Signatory Exhibit B Page 3 (FORM OF REVERSE OF CERTIFICATE) The City is obUgated under the Lease Agreement to pay Lease Payments fi-om any source of legally available fvmds and the City has covenanted in the Lease Agreement to make the necessary annual appropriations therefor. The obligation of the City to pay the Lease Payments does not constitute an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obUgation of the City to pay Lease Payments does not constitute an indebtedness within the meaning of any constitutional or statutory debt Umitation or restriction. To the extent and in the manner permitted by the terms of the Tmst Agreement, the provisions of the Tmst Agreement may be amended by the parties thereto with the written consent of the owners of at least a m^ority 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 impair the right of any owner to receive, in any case, such owner's fractional share of any Lease Payment or prepayment thereof in accordance with such owner's Certificate, without the consent of such owner. This Certificate is transferable by the Owner hereof, in person or by his attomey duly authorized in writing, at the corporate tmst oflfice of the Tmstee, but only in the manner, subject to the limitations and upon payment of any charges provided in the Tmst Agreement and upon surrender and cancellation of this Certificate. Upon such transfer, a new Certificate or Certificates of authorized denomination or denominations for the same aggregate principal amount will be delivered to the transferee in exchange herefor. The City, the Corporation and the Tmstee may treat the Owner hereof as the absolute owner hereof for afl purposes, whether or not the payments represented by this Certificate shafl be overdue and the City, the Corporation and the Tmstee shall not be aflfected by any notice to the contrary. The Certificates maturing on and after August 1, 1999, are subject to redemption in whole at any time or in part on any Pajrment Date (but not in a total redemption amount of less than $20,000 at any one time) in inverse order of maturity, and by lot within a maturity, on or after August 1, 1999, at the principal amovmt thereof together with the premium set forth below (expressed as a percentage of the total amount to be redeemed), from the proceeds of optional prepayments of Lease Payments made by the City pursuant to the Lease Agreement: Redemption Period Premium August 1, 1998 through July 31, 1999 2.0% August 1, 1999 through July 31, 2000 1.5 August 1, 2000 through July 31, 2001 1.0 August 1, 2001 through July 31, 2002 0.5 August 1, 2002 and thereafter 0 The Certificates are subject to mandatory redemption in whole on any date, or in part on any Payment Date, among maturities such that approximately equal annual Lease Payments prevail following such redemption and by lot within a maturity, fi-om the net proceeds of an insurance or condemnation award credited towards the prepayment of Exhibit B Page 4 the Lease Payments by the City pursuant to the Lease Agreement, at a redemption price equal to the principal amount thereof to be redeemed, without premium. The Certificates maturing on August 1, 2008 are subject to mandatory redemption on August 1 in each year on or after August 1, 1998, by lot, fi-om the principal components of the Lease Payments required to be paid by the City 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, without premium, as foflows: Principal Amovmt Redemption Date of Certificates (August 1) to be Redeemed 2001 470,000 2002 510,000 2003 555,000 2004 600,000 2005 640,000 2006 695,000 2007 750,000 2008 (Maturity) 815,000 Notice of redemption, unless waived, is to be given by the Tmstee by mafling an oflficial redemption notice by first class mafl at least thirty (30) days and not more than sixty (60) days prior to the date fixed for redemption to the registered owner of the Certificate or Certificates to be redeemed at the address shown on the Certificate registration books maintained by the Tmstee or at such other address as is fumished in writing by such registered owner to the Tmstee. Notice of redemption shafl also be given to securities depositories, and to one or more information service by telecopy, registered, certified or ovemight mafl at least thirty-five (35) days prior to the redemption date. Notice of redemption having been given as aforesaid, the Certificates or portions of Certificates so to be redeemed shafl, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date (unless the City shall default in the payment of the redemption price) interest with respect to such Certificates or portions of Certificates shall cease to be payable. Exhibit B Page 5 ASSIGNMENT For value received the undersigned do(es) hereby sefl, assign and transfer unto : (Name, Address and Tax Identification Number of Assignee) the within registered Certificate and hereby irrevocably constitute(s) and appoint(s) attomey, to transfer the same on the Certificate register of the Tmstee with full power of substitution in the premises. Dated: Signature: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within registered Certificate in every particular without alteration or enlargement or any change whatsoever. Signature Guaranteed: Note: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank, or tmst company. Exhibit B Page 6 CERTIFICATE OF PARTICIPATION (HOSP QROVE PROJECT) EvMwidng an UndMdwl Fi«aon»l IntWjMt of^ Itaraot hi LMM Pqmwnti to b« M«to by llw CITY OF CARLSBAD, CALIFORNIA At VM RMW for Cortaki Prepoity Purauant to • LMM Agf omont Wtth ttw CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION Th> mu )• rMioatad undar tha LMM AorMmant to pay LMM Ptynwnt* front sny sourc* of legally not conMituta an M>io^ TaStrnTn mMn In Kiy cm. •«* o»m«f • Iractoul •hire ol iny LMM Pmront ot TNi Cimitt It ITMwWal* by the Ov«n« Ixreol. m p^on or by h» iMn^ SMSSI?.. J5 ««IMV»»OT5>™» trust ol«i» ol th« TTiww SSSnrUmSm inv SiirM« DroyidKl in tin TnMt AgrMment KM upon KunnlK tni cmrtrton ol SLSSniSS lor^ MS MOSBM prlnd^ SSSSnSciW S S»S)rffin»3 Si iKitM TOy OMt th. Oww hmol u «» hSS^toM 53pM^»rS not lh. p.ym«. rw^^ MCttytn. Oo^orSin tM th. TtiMtM «MII not b. .IlKMd by any node, to Ih. contrary. Th. C«tlllc«M TOturIng on md .Itw Augu« 1.19»9.». KiBM toredjmpjon jnjf«* « W «™ or InSrt OTirS^ynZtoS. (bot not m .MUl rMmption .moornrt IM. thm KOjMO « "a "»«^ SEwlMOrtZ ol mmimv. mo by lot within a matuffly. oo or «w *ugi«1jm « Jjjrt^ SnoonSwiSrtM«li w* th. pr.m^ SblTrMMrnlMS^^ pro<i»0« ol option.1 pr«).y™nt. ol LMM Payront. TOd. by th. City pursuant to th. LMM AgrMmmt RtOmMon Ptnod Prtrnkm »uou« 1.1996 through July 31. IMS 2.0% iCgus11.1999 through Juiy 31. 2000 J -S iCgost 1. 2000 through July 31. 2001 J-J Xugiist 1, 2001 through July 31, 2002 0.5 Aiigust 1. 2002 and thwMlW 0 Th. CwUBclM sr. subtact to mwdatory rwjwnptlon in whol. on any dtf.. or In p.rt oo any Pavmmt OM. among inaurHlM «ich IhM spproKlmMsly «lo* annual LMM Paymmt. pr»iM^^ aueh r«lwnotion and by lot ww*! a maluTtty. from tti. n« ptocMds of tn mauranc. or oood«tm.tlon ISrt^lSSd to«rai th. prw"« ol ttt. LMM Parnmt. by tt» City P'™»JJ°»"Jf^ AgrMmwt. at a r«J»nptlon pric. «|ual to Iht princip* MWunt tti«of to b. nadMtnM. wtthout prwnhjm. TTl. CMHkatM mMunng on August 1. 2006 sr. aubiMt to msndMory rMwnptton on August 1 In Mch VMT on or altw August 1. 2001. by lot. liom ttw prmapai oomponmts ol ttw IMM Paymmits miirid to b. pM by ttw City pursuant to tti. LMM AgrMmwit wtth rMpM to MCh such r«l.mption data at a rodwiipttoo prIc. KIMI a int principal aniount IMnol to b. rtdtmtil. wtthout pr«nlum, ss flMIW>«ilk»t QMS CAugust I) Principal Amount of C.rlMcaf.5 IP 60 RtdttnM $470,000 510.000 555.000 600.000 (August n Prindptl Amount ot arttScatts to ba Hadaamad 2005 1640.000 2006 695.000 2007 750.000 2006(M«urtty) 615.000 NoBM ol wdmjtton. unlMS wslnd. Is to b. gMn by 01. ThisIM by mamg an offldal radmiptton notiM by «r« cIMS rn*l at iMst tt*ty (30) day. ai« not mor. ttjnto^ lor r«l«no(ion to ttl. iMiWr«l ownw ol»» C««lical» or C«tlllcW to b. IK*^^ ahown on ttia 0«««c« r.glstrs«on booKa mainl«n«l by tti. ThistM or at such ottw sddrm as is lumlahK) in wrttmg by auch rHistMKi ownw to tn. TtoMM. Nottc. ol ™o«np«on shall also b. gWn to SMurttiH dMosttorlH snd tt> on. or mor. MxinMon smric. by IMMopy. r.glst«.d. CMttIM or o»Knlght m«l at IMSI ttilrty-lly. (35) days prtor to ttl. i«lmiption dm. NotiM ol r«JwnpttOT gIvmM alorM«.»» OwttlicalM or portions ol CwttllcatM ao to B. r»)Mm«l Shan, on »»iKlmii^ data baoom. du. and payabl. al»»i«l»nption prIc. »i«*n apMttlKl, and Itom and allw such dat. (unMs t» an ShaH drt«itt m ttw ptymM ot tti. r«)Knption prIc.) inlwHt wWi rMpM to such CvttllcMM or porttons ol OrtHlcstM ahall OMM to b. p.yabl.. LEQAL OPINION » PiolMalonal Law Corpoiwlon. San Frmclsco, Callfornis.|l)(l;SM« to »» aty ol C»ISSad. cmr CLEBK' JONES HALL HILL & WHITE, A PROFESSIONAL LAW COBPOHATION ATTORNEYS AT LAW FOUR EMBARCADERO CENTER SUITE 1950 SAN FRANCISCO. CA 94111 OPINION: 66J90.000 CarlMMIs* e( PartWBWjwi.CHMp arav. I RMW tar CMttbi n^iMir PuiMMl 1. a LMM A~ CRy o( Cariatad PiMe NmmvamM CoqwrMoo WB hay. scIKi u sp«Jsl oouns* in oonnKtton wtth tn. d*lv»y by Ih. City ol CarlabMl (ttia,;; 1 ol«» 18 690 000 LMM AgrMmMt, datM M ol Jun. 1.19te. by**e Mtw*hWC«y rtCailabM Publk: Imp^SJSm ciSi'«loS{Bli "LMMr-) and ttl. Ctty (»»i'^^^ *gJ~:r?;2"ifS2IUSfl^ SSSnrt lirtiw 5id« ttii Lift. Agri*^ Mdijaing 01. right u rMMralMS. '%^~ualgiiinant AgfMmml"). bymd ?«««2«»iS'?JfSJKSSr S^SKSoSTilf«S5»nl d«!dM TtuMrf. M uSor »i» ii. CUXftsiirust AyM|mmn£2 mdii«iISiiSIit?i!^I^ ...... • rrc^:is':nit:?.::?.isriS2^»"^i^^ T^t!^ AgrMmm, h„ PMh duly suttiorlz-. MMut-and d*l«^ 3:TiThr*<^Zrand«i.AMlgnm«ttAgrMm«a..«^^ . • notan Itam ot •cmutinQ tha allarnirtiva inMmum tax ImpoMd on ingilor taxabia yaM batfoning aftar Daoam^ ,..«°SB^-.lo-.-.*.p.M-*..-«.~-.~fi«»^^ _....»,^__ioc.^i-.u , , OKOIIcMM is Mwipl Irom p«K)n* lnc«)m.*t»<«on imposw) by ttl. stm ol Calllo^ dMStsw-s^-S^^^^^ RMpKttully aubmmad. C/ A PrataasKmal m CorporMlon ASSIGNMENT For value received — assign and transfer unto. . tlie undersigned do(es) hereby sell, (Nama. AddrMS and Ta> MMMcatton Numbw of AsalgnM) the within registered Certlflcate and hereby Irrevocably constltute(s) and appolnt(s) . attomey, to transfer the same on the Certlflcate register of the imstee with full power of substitution In ttie premises. E>at8d: Signature: MM- TTl. slonaturrts) on Oils Aaaignmaitt moat coTTMpond wtth ttl. nania(s)MWTttlBn on lha laM rtttiiSSSiS^^ Signature Guaranteed: NoH' Slgnatura(s) must b. guaraitMd by s mmM Urm ol tti. N«< IDit Slock Exchang. or a oommvdal bank, or tniSt company. 0KNDER: 0>mpl«. trmr,, 1 ana 7 whan oMhlonal mr^tom ara d»l»d. ana oompl«, lt«n. 3 1.^ Show to whom *Mh^d«.. «HI irtili add^ Z^liwrtcwd Ml«» a. ATtici* AddrwMd to: fA^Ati^ec, CA ^4/^;L 4. Artieio Numtor /^>^4^/ ^/7 77^ a. ATtici* AddrwMd to: fA^Ati^ec, CA ^4/^;L Typa of Swvico: OR«9l«trK« • iiNurad 'O^MtifM • COD • Exprm Mall a. ATtici* AddrwMd to: fA^Ati^ec, CA ^4/^;L Alwwyt obtain lignatura of addraHaa or aoMt and DATE DEUV^f^gp " T'iriTiirn fiiltlmni X 8. AddraMa'i Addraw (ONL Y tf 8. AddraMa'i Addraw (ONL Y tf FS Form 3811. Mar. 19S7 ... ii>a.n .^ .....^ 8. AddraMa'i Addraw (ONL Y tf UNITED STATES POSTAL SERVICE OFFICIAL BUSINESS tel«ibERiN^(tikmoM • 1.2. 3. and 4 on na iwana. • Attadi to front efartieia If Moa Jjnnjh^odiarwlaa affix totMrit • fndoraa artielo "Rataim Raoaipt Raqiianad^ adiaeant to mmfarT RETURN TO FBIALTYfOHPMVATE USE. SSOO balow. Print Sandar't nama, addraM. and ZIP Coda in Hia i 6iAi!ii^'/^/C /3d^/*C^ Form 1024 (Rev. March 1986} Department of the Treasury Internal Revenue Service ^piication for Recognition of E^li^ptlon Under Section 501(a) or for Determination Under Section 120 OMB No. 1545-0057 Expires: 3-31-89 Every organization must furnish the information specified. If any organization does not submit the information and financial data required, this application will not be considered on Its merits, the organization will be notified accordingly, and the appiication may be returned. If you need more space for any item, you may attach additional statements. Show your name and empioyer Identification number on all attachments. Except as shown below, applicants must compiete Parts I through IV. In addition, an organization must complete the schedule Indicated below that relates to the code section under which it is applying. If a part or a line item does not apply, enter "N/A." Central organizations applying for a group exemption letter—See Rev. Proc. 80-27, 1980-1 CB. 677, or later revisions; or get Publication 557, Tax-Exempt Status for Your Organization, available free at most Internal Revenue Service offices. This application, if approved, will be open to public inspection. (See General Instructions.) You must have an organizing instrument. If you do not have an organizing instrument, do not file this application. Check the appropriate tx>x below to Indicate the section utKler which you are applying. Section 501(cX2)—Trtte ho(dir»g corporations (Schedule A, page 6) 0 Section 501(cX4)—Civic leagues, social welfare organizations (includirvg certain war veterans' organizations), or local associations of employees (Schedule B, pages 6 and 7) Section 501(c)(5)—Labor, agricultural, or horticultural organizations (Schedule C, page 7) Section 501(c)(6)—Business leagues, chambers of commerce, etc. (Schedule C, page 7) • Section 501(cX7)—Social clubs (Schedule 0, pages 7 and 8) Section 501(cX8)—Fraternal tjeneliciary societies, etc., providing life, sick, accident or other benefits to members (Schedule E, page 8) [U Section 501(c)(9)—Voluntary employees' beneficiary associations (Schedule F, page 9) n Section 501(c)(10)—Domestic fraternal societies, orders, etc. not providing life, sick, accident or other benefits (Schedule E, page 8) • Section 501(c)(12)—Benevolent life insurance associations, mutual ditch or irrigation companies, mutual or cooperative telephone companies, or like organizations (Schedule G, pages 9 and 10) Q Section 501(c)(13)—Cemeteries, crematoria, and like corporations (Schedule H, page 10) n Section 501(c)(15)—Mutual insurance companies or associations, otherthan life or marine (No Schedule required) CH Section 501(cX17)—Trusts providing for the payment of supplemental unemployment compensation benefits (Schedule I, page 11) n Section 501(c)(19)—A post, organization, auxiliary unit, etc. of past or present members of the Armed Forces of the United States (Scheduled, page 12) EH Section 501(c)(20)—Trust/organization for pre-paid group legal services (Parts I, II, and Schedule IVI, page 13) D Section 120—Qualified group legal services plans (Parts 1,11, and Schedule L, page 13) Part 1.—Identification (See Instructions) la Fuli name of organization City of Carlsbad Public Improvement Corporation lb Employer identification number (if none, see Specific Instructions) application attached 2a Address (number and street) 1200 Elm Avenue 2b City or town, county, state, and ZIP code Carlsbad, CA 92008 3 Name and telephone number (including area code) of person to be contacted during business hours if more information is needed Aletha L. Rautenkranz (619) 434-2808 4 Month the annual accounting period ends June 30 5 Date incorporated or formed 06/01/88 6 Activity codes (see back cover) 4 Month the annual accounting period ends June 30 5 Date incorporated or formed 06/01/88 915 429 352 7 Has the organization filed Federal income tax returns or exempt organization information returns? [11 Yes [x] No If 'Yes," state the form number(s), years filed, and Internal Revenue office where filed Part II.—Type of Entity and Organizational Documents (See instructions) Check the applicable entity box and attach a conformed copy of the organization's organizing document and bylaws. Corporation—Articles of incorporation and bylaws. []] Trust—Trust indenture. I I Other—Constitution or articles of association and bylaws. Under the penalties of perjury, I declare that I am authorized to sign this application on behalf of the above organization and I have examined this application, Including the accompanying statements, and to the best of my knowledge and belief It Is true, correct and compiete. (See General Instructions.) (Sll ignature) j Aletha L. Rautenkranz, Secretary Jo/sS^iC^ (Title or authority of signer) (Date) For Paperwork Reduction Act Notice, see page 1 of the instructions Form 1024 (Rev. 3-86) Page 2 Part III.—Actlvltlea and Operational Information 1 If you are the outgrowth or continuation of any form of predecessor(s), state the name of each predecessor, the period during which it was in existence, and the reasons for its termination. Submit copies of all papers by which any transfer of assets was effected. Not applicable. New Organization. 2 If you are now, or plan to be connected in any way with any other organization, describe the organization and explain the relationship. Not applicable. Give a detailed narrative description of the organization's past, present, and proposed future activities, and the purposes for which it was formed. The narrative should identify the specific benefits, services, or products the organization has provided or will provide. If the organization is not fully operational, explain what stage of development its activities have reached, what further steps remain for it to become fully operational, and when such further steps will take place. (Do not state the purposes and activities of the organization in general terms or repeat the language of the organizational documents.) If you are engaged in any business or fund raising activity, describe in detail the nature and the scope of the activity. Attach copies of any agreements with other parties related to conducting the business or fund raising activity. State how each business activity engaged in contributed importantly to your exempt purposes. Please see attached. 4 List the organization's present and future sources of financial support, beginning with your largest source first. Please see attached. Form 1024 (Rev. 3-86) ^ Page 3 Part III.—Activities and Operatlon^TOormation (Continued) 5 List the names, titles and addresses of the officers, directors and trustees of your organization for the current year. Please see attached. 6 If you have capital stock issued and outstanding, state (1) class or classes of the stock, (2) number and par value of the shares, (3) consideration for which they were issued, and (4) whether any dividends have been paid or whether your creating instrument authorizes dividend payments on any class of capital stock. The Corporation will not issue capital stock. State the qualifications necessary for membership in the organization, the classes of membership (with the number of members in each class) and the voting rights and privileges received. If any group or class of persons is required to join, describe the requirement and explain the relationship between those members and members who join voluntarily. Submit copies of any membership solicitation material. Posts or organizations applying under section 501(cX19) and completing Schedule J, item Id, enter "N/A" here. Attach sample copies of all types of membership certificates issued. The Corporation will have no members, Explain how your assets will be distributed on dissolution. (If State statutes, court decisions, organizing instruments, etc., determine the manner of distribution, state this and identify the statute, court decision, etc.) Posts or organizations applying under section 501(cX19) and completing Schedule J, item 3b, enter 'N/A" here. Please see attached. 9 Have you made or do you plan to make any distribution of your property or surplus funds to shareholders or members? • Yes B No If "Yes," state the full details, including (1) amounts or value, (2) source of funds or prbperty distributed or to be distributed, and (3) basis of and authority for distribution or planned distribution. Form 1024 (Rev. 3-86) Page 4 Part III.—Activities and Operational Information (Continued) 10 Does, or will, any part of your receipts represent payments for services performed or to be performed? D Yes \x\ No If "Yes," state in detail the amount received and the character of the services performed or to be performed. 11 Have you made, or do you plan to make, any payments to members or shareholders for services performed or to be performed? • Yes [X] No If "Yes," state in detail the amount paid, the character of the services, and to whom the payments have been, or will be made. 12 State the purpose(s), other than payment for services performed or supplies furnished, for which your funds are, or will be spent. Please see attached. 13 Does, or will, any part of your net income inure to the benefit of any private shareholder or individual? . '. '. . Q Yes E No If "Yes," explain in detail. 14 Do you have any arrangement to provide insurance for members, their dependents, or others (including provisions ^ for the payment of sick or death benefits, pensions or annuities)? D Yes E No If "Yes," describe and explain the arrangement's eligibility rules and attach a sample copy of each plan document and each type of policy issued. 15 Areyouunderthesupervisoryjurisdictionofanypublicregulatorybody, such as a social welfare agency, etc.? . . • Yes E] No If "Yes," submit copies of all administrative opinions or court decisions r^rding this supervision as well as copies of applications or requests for the opinions or decisions. 16 Are you now or do you plan to be the lessee of any property, or the lessor of property in which you own an interest? 2] Yes O No If "Yes," explain in detail. Include the amount of rent, a description of the property, and any relationship between your organization and the other party. Also, attach a copy of any rental or lease agreement. Please see attached. 17 Have you spent or do you plan to spend any money attempting to influence the selection, nomination, election or appointment of any person toany Federal, State, or local public office or to an office ina political organization? . .U Yes [X] No If "Yes," explain in detail and list the amounts spent or to be spent in each case. Form 1024 (Rev 3-86) Page 5 Partly.—Financial Data (See iWPuctlons) Please See attached. Note: Complete separate financial statements for the current year and for each of the three immediately preceding years. If the organization has been in existence for less than four years, complete the statements only for those years in existence. If the organization has been in existence for less than one year, also provide proposed budgets for the two years following the current year. Statement of Support, Revenue, and Expenses for the period beginning , 19 and ending 19 (Ifyou prepare a statement of support, revenue, and expenses which is more descriptive and detailed than the statement below, you may submit that statement in piace of tfiis one.) Support and Revenue Gross dues and assessments of members Gross contributions, gifts, etc b a b a Gross amounts derived from activities related to the organization's exempt purpose (attach schedule) Minus cost of sales Gross amounts from unrelated business activities (attach schedule) Minus cost of sales Gross amount received from sale of assets, excluding inventory items (attach schedule) b Minus cost or other basis and sales expense of assets sold (attach schedule) . . . 6 Investment income (see instructions) 7 Other revenue (attach schedule) 8 Total support and revenue Expenses 9 Contributions, gifts, grants, and similar amounts paid (attach schedule) 10 Disbursements to or for the benefit of members (attach schedule) 11 Compensation of officers, directors, and trustees (attach schedule) 12 Other salaries and wages 13 Interest 14 Rent 15 Depreciation and depletion 16 Other expenses (attach schedule) 17 Total expenses 18 Excess of support and revenue over expenses (line 8 minus line 17) 4c 5c 10. 11 12 13 14 15 16 17 18 Balance Sheet (at the end of the period shown above) Assets 19 Cash a Interest bearing accounts b Other 19a Assets 19 Cash a Interest bearing accounts b Other 19h 20 Accounts receivable, net 21 Inventories 20 20 Accounts receivable, net 21 Inventories 21 22 Bonds and notes (attach schedule) 22 23 Corporate stocks (attach schedule) 24 Mortgage loans (attach schedule) 23 23 Corporate stocks (attach schedule) 24 Mortgage loans (attach schedule) 24 25 Other investments (attach schedule) 26 Depreciable and depletable assets (attach schedule) 25 25 Other investments (attach schedule) 26 Depreciable and depletable assets (attach schedule) 26 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 27 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 28 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 29 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 30 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 31 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 32 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 33 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 34 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 35 27 Land 28 Other assets (attach schedule) 29 Total assets Liabilities 30 Accounts payable 31 Contributions, gifts, grants, etc., payable 32 Mortgages and notes payable (attach schedule) 33 Other liabilities (attach schedule) 34 Total liabilities Fund Balances or Net Worth 35 Total fund balances or net worth 36 Total liabilities and fund balances or net worth (line 34 plus line 35) 36 If there has been any substantial change in any aspect of your financial activities since the period shown above ended, check the box and attach a detailed explanation Q Form 1024 (Rev. 3-86) Schedule A Organizations described In section 501(c)(2) (Title holding corporations) 1 State below the complete name, address and employer identification number of each organization for which title to property is I the number and class(es) of shares of your stock held by each organization. If within the past five years shares of stock in your organization have been held by persprfs other than organizations listed in 1 above, list below the names and addresses of these persons. Also, show the number and jBti^s(es) of shares of capital stock held by each person, the years held, the dividends payable in each year and the dates paid. State whether the net annual income is or will be purpose for which the income is or will be held. ffed over to the organization for which title to property is held and, if not, the 4 State the purpose(s) o^^ach organization for which title to property is held as shown in its governing instrument and the Code section(s) under whjptt each is classified as exempt from Federal income tax. Schedule B Organizations described in section 501(c)(4) (Civic leagues, social welfare organizations (including posts, councils, etc. of veterans' organizations not qualifying or applying for exemption under section 501(c)(19)) or local associations of employees.) 1 Have you engaged in or do you plan to engage in any activities on behalf of, or in opposition to, any candidate for public office? • Yes E No If "Yes," describe in detail the nature and extent of the activities. Has the Service previously issued a ruling or determination letter recognizing you (or any predecessor organization listed in item 1 of Part III) to be exempt under section 501(c)(3) and later revoked that recognition of exemption on the basis that you (or your predecessor) were carrying on propaganda or otherwise attempting to influence legislation? Q y^j If "Yes," indicate the earliest tax year for which recognition of exemption under Section 501(cX3) was revoked and the IRS district office that issued the revocation. E No Do you perform or do you plan to perform (for members, shareholders, or others) particular services, such as maintaining the common areas of a condominium, buying food or other Items on a cooperative basis, providing recreational facilities or transportation services, job placement, or other similar undertakings? Q Yes 0 No If "Yes," explain the activities in detail, including income realized and expenses incurred. Also, explain in detail the nature of the benefits to the general public from these activities. (If the answer to this question Is explained In Part III (pages 2, 3, and 4), enter the page and item number here.) (Continued on next page) Form 1024 (Rev 3-86) 4 If you are claiming exemption as I association of employees, state the name and l^ress of each employer whose employees are eligible for membership in the association. If employees of more than one plant or office of the same employer are eligible for membership, give the address of each plant or office. Page 7 Not applicable. Schedule C Organizations described in section 501(c)(5) (Labor, agricultural, Including fishermen's organizations horticultural organizations) or section 501(c)(6) (Business leagues, chambers of commerce, etc.) 1 Describe any services you perform or plan to perform for members or others. These services may include furnishing^dit reports, collecting accounts, inspecting products, conducting advertising, buying or selling merchandise or other similar uwlertakings. (If the description of the services is contained in Part III (pages 2, 3 and 4), enter the page and item number here.) Submit representative copies of any publications (newsletters, trade members or other interested parties. nals, yearbooks, membership directories, etc.) distributed to Fishermen's organizations oniy.—What kinds of aqu§^ eligible for membership in your organization? resources (not including mineral) are cultivated or harvested by those 4 l^)>eforganizations only.' ^^•flfreement. -If you are organized under the terms of a collective bargaining agreement, attach a copy of the latest Schedule D Organizations described in section 501(c)(7) (Social clubs) 1 Have you entered or do you plan to enter into any contract or agreement for the management or operation of your property and/or activities, such as restaurants, pro shops, lodges, etc.? if "Yes," attach a copy of the contract or agreement. If one has not yet been drawn up, please explain your pla.p below. res • No Do you seek or plan to seek public patronage of yo^H^acilities by advertisement or otherwise? • Yes O No If "Yes," attach sample copies of the advertisem^ptSor other requests. If you have none as yet, please explain your plans below. (Continued on next page) Form 1024 (Rev. 3-86) Schedule D (Continued) Page. 8 3a Are nonmembers other than guests of members permitted or will they be permitted to use the club facilities or participate In or attend any functions or activities conducted by the organization? Q Yes Q^No If "Yes," describe the functions or activities in which there has been or will be nonmember participation or admittance. (Submit a copy of your house rules. If any.) b State the amount of nonmember income included in Part IV, lines 3 and 4. c Enter the percent of gross receipts from nonmembers for the use of^lub facilities* d Enter the percent of gross receipts received from investment incojji<and nonmember use of the club's facilities* % % t'rSo^nuch'rsfTom&Te^fcl^^^^^^^^^ •'*^' '° -"""^^ '^o- -"^-1 4a Does your charter, bylaws, other governing instrjjirfent, or any written policy statement of your organization contain any provision which provides for discriminatjpflagainst any person on the basis of race, color, or religion? . . . . • Yes • No b If "Yes," state whether or not its provj/e/lon will be kept. c If you have sudyS provision which will be repealed, deleted, or otherwise stricken from your requirements, state when this wiiroe done d If you^efmeriy had such a requirement and it no longer applies, give the date it ceased to apply e \l.me organization restricts its membership to members of a particular religion, check here and attach the explanation specified in the instructions. Schedule E Organizations described In section 501(c)(8) or 501(c)(10) (Fraternal societies, orders, or associations) 1 Areyouacollegefraternityorsorority or chapter of a college fraternity or sorority? • Yev^ If "Yes," read the instructions for Schedule E before compieting this schedule. 2 Does or will your organization operate under the lodge system? If "No," does or will it operate for the exclusive benefit of the members of an organization operating under the lodj system? No Yes • No • Yes • No 3 In the case of a subordinate or local lodge, etc., attach a certificate signed by the secretary of the parept^ganization under the seal of the organization, certifying that the subordinate lodge is a duly constituted body operating under th^jdf^diction of the parent body. 4 In the case of a parent or grand lodge, attach a schedule for each subordinate lodge in a address, (b) the number of members in It, and (c) how often It holds periodic meetings. ' I operation showing: (a) its name and Form 1024 (Rev. 3-86) Page 9 Organizations described in section 501(c)(9) (Voluntary employees' beneficiary assocations) 1 Describe below the benefits available to members. 2 Are any employees or classes of employees entitled to benefits to whicj><jfher employees or classes of employees are not entitled? • Yes • No If "Yes," explain. 3 State the>dfal number of persons entitled to receive benefits (do not include dependents of employees)? 4 Stjje^e number of persons, if any, other than employees and their dependents (for example, the proprietor of a jL^iness whose employees are members of the association) who are entitled to receive benefits • Schedule G Organizations described in section 501(c)(12) (Benevolent life insurance associations, mutual ditch or irrigatip companies, mutual or cooperative telephone companies, or like organizations) 1 Attach a schedule in columnar form for each tax year for which you are claiming exempt status. On each schedule: a Show the total gross income received from members or shareholders, b List, by source, the total amounts of gross income received from other sources. (Mutual or cooperative electric or telephone companies should show income received from qualified pole rentals^separately. Mutual or cooperative telephone companies should also show separately the gross amount of income received ff^ffi nonmember telephone companies for performing services that involve their members, and the gross amount of income re5^i^d from the sale of display advertising in a directory furnished to their members.) Do not net amounts due, or paid to, other sources against amounts due, or received from, them^ 2 If you are claiming exemption as a local benevolent insurance association, state: a The counties from which members are accepted or will be accepted. b Whether stipulated premiums are or will be charged in adyafTce or whether losses are or will be paid solely through assessments. 3 Ifyou are claiming exemptipn^s a "like organization," explain how you are similar toa mutual ditch or Irrigation company or a mutual or cooperative telephone cprffpany. (Continued on next page) Form 1024 (Rev. 3-86) Page 10 Form 1024 (Rev 3-86) Schedule 1 Page 11 ?o'SI>e'"i«CnbeSsf 501(c)(17) arusts providing for the payment of supplemental unemployme 1 If benefits are provided for individual proprietors, partners, or self-employed persons under the plan, explain in detail bef^iw. Ifthe plan provides other benefits in addition to the supplemental unemployment compens state whether the other benefits are subordinate to the unemployment benefits. tion benefits, explain in detail below, and & f ^"u'^f'^^^k ^?^^' trust/ngage in any of the transactions listed below with any of the following- the creator ofthe trust or a contributor to the trust; a brother /sister (whole or half blood), a spouse, an ancestor, or a lineal deSint of such a creator or contributor; or a corporation controllwiirectly or indirectly by such a creator or contributor? Descendant ot such a ^a^jiJlJ^iL'^"?'*' ^^Ji K°", considering being, a party to any of the transactions (or activities) listed below check the Planned box. Give a detailed explanation ofatfy "Yes" or 'Planned'answer in the space below. a Borrow any part of your income or co/pus? • Yes • No • Planned b Receive any compensation for peidonai services? • Yes • No • Planned c Obtain any part of your services/ • Yes • No • Planned d Purchase any securities or other properties from you? • Yes • No • Planned e Sell any securities or other Dfoperty to you? ' ! • Yes • No • Planned f Receive any of your incoTfe or corpus in any other transaction? • Yes • No • Planned /Attach a copy of the Supplemental Unemployment Benefit Plan and related agreements. Form 1024 (Rev. 3-86) Page 12 . Schedule J Organizations described in section 501(c)(19) - a post or organization of past or present members of the Armed Forces of the United States, auxiliary units or societies for such a post or organization, and trusts or founjtations formed for the benefit of such posts or organizations. To be completed by a post or organization of past or present members of the Armed Forces of the United States. la Enter the total membership of your post or organization b Enter the number of your members who are present or former members ofthe U.S. Armed Forces . . . . c Enter the number of members who are cadets (include students in college or university ROTC programs or aty armed services academies only), or spouses, widows, or widowers, of cadets or past or present members o) the U.S. Armed Forces d Do you have a membership category otherthan the ones set out above? / . . . . CH Yes EH No If "Yes," please explain in full. Enter number of members in this category e If you wish to apply for a determination that contributions to you are deductible b^onors, enter the number of your members from line lb who are war veterans, as defined below . . A war veteran isa person who served Inthe Armed Forces ofthe United States/auring the following periods of war: April 21,1898, through July 4,1902; April 6,1917, through November 11,1918; DecemlMf7,1941, through December 31,1946; June 27, 1950, through January 31,1955; and August 5,1964, through May 7,1975. Jo be completed by an auxiliary unit or society of a post or oganization of ppt or present members of the Armed Forces of the United States. 2a Are you affiliated with and organized according to the bylaws ao6 regulations formulated by such an exempt post or organization? /. D Yes O No If "Yes," submit a copy of such bylaws or regulations. b How many members do you have? c How many are past or present members of the Armed Forces of the United States themselves, their spouses, or persons related to them within two degrees of blood relationship? (Grandparents, brothers, sisters, and grandchildren are the most distant relation^ips allowable.) d Are all of the members themselves members of a post or organization, past or present members of the Armed Forces of the United States, or spouies of members of such a post or oiganization, or are related to members of such a post or organization wlt><in two degrees of blood relationship? CH Yes CII No To be completed by a trust or foundation organized for the tieneflt of an exempt post or organization of past or present members of the Armed Forces of the United Stated 3a Will the corpus or Incjjmie be used solely for the funding of such an exempt organization (Including necessary related expenses)?/ • Yes • No If "No," pleasaexplain. If the trust or foundation is formed for charitable purposes, does the organization document contain a dissolutionprovisionasdescribedinsection 1.501(c)(3)-l(b)(4)ofthelncomeTaxRegulatlons? .... • Yes • No Form 1024 (Rev, 3-86) — •gg]^|gm Qualified Group Lejj^fcervi'ces Plans (Section 120) 1 a Name of plan • b Plan number (see Instructions) c Date the plan year ends 2 A qualification determination or ruling is requested for: a • Initial qualification—date the plan was adopted b n Amendment—date adopted If you check a, submit a copy of the documents establishing the plan, including a copy of the plan and any^ related trust instrument. If the plan was subject to collective bargaining, include a copy of the collective bargaining agreement pertaining to It. If you check b, submit a copy of the amendment. Note: Once a plan has qualified you need not file a new Form 1024 with each amendment. However, yoi/must notify the Service ofany subsequent amendments. 3 Describe the legal services covered by the plan, if they are not described in the plan or collective bafgaining agreement. Page li 4 Give the following Information as of the first day of the first plan year for which you^e filing this application and enter that date here a Total number of employees covered by the plan who are shareholders, offfcers, self-employed persons or highly compensated b Number of other employees covered by the plan . . . c Number of employees not covered by the plan . . . d Total number employed* •Should equal the total of a, b, and c—If not, explain any differen/e. Describe the eligibility requirements that prevent those employees not covered by the plan from partlclpatinfi 5 If all eligible employees are NOT entitled to the same benefits, ^lain the differences. 6 Manner of funding the plan (Check the appftpriate box(es)) a CD Payments to insurance companies/ b • Payments to organizations descnbed in section 501(cX20) c CD Payments to organizations des<^rlbed in section 501(c), which are to pay or credit your payments to other organizations described in sanion 501(cX20) ^^^^D Prepayments to providers/Of legal services g^g^^^ TruKt or organiz^on set up under section 501(c)(20) ~ 1 a Was this trust or organizatkin created or organized In the United States? • Yes • No b If "Yes," was It created/r organized to form part of a group legal services plan or plans qualified under section 120? ..../. • Yes • No If "Yes," enter name of plan c Has the plan (oi^lans) qualified under section 120? • Yes O No If "Yes," submit a copy of the ruling or determination letter(s). If *No," attach an explanation. 2 If the trust or ofganization provides legal services or indemnification against the cost of legal services unassociated with a qualified group legal services^lan, describe the nature and extent of these services. fecft copies of all pian documents. 13061-01 JHHW:GFB GFB4603 Attachment to IRS Form 1024 Application for Recognition of Exemption Pursuant to the Attachment Requirements of Form 1024, please be advised that this document relates to Form 1024. The organization's name and address are: CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION 1200 Elm Avenue Carlsbad, California 92008 The organization's Application for Employer identification Number is attached. Part lli - Activities and Operational Information Part III. No. 3 — Give a detailed narrative description of the organization's past, present and proposed future activities, and the purposes for which it was formed. The narrative should identify the specific benefits, services or products the organization has provided or will provide, if the organization is not fully operational, explain what state of development its activities have reached, what further steps remain for it to become fully operational, and when such further steps will take placei If you are engaged in any business or fund raising activity, describe in detaii the nature and the scope of the activity. Attach copies of any agreements with other parties related to conducting the business or fund raising activity. State how each business activity engaged in contributed importantly to your exempt purposes. The City of Carlsbad Public Innprovement Corporation (the "Corporation") was formed for the purpose of enabling civic improvements and promoting social betterment within the boundaries of the City of Carlsbad, California (the "City") and surrounding areas by providing a legal avenue for the City to obtain financial assistance, through the trustee bank referenced below, thereby enabling the acquisition of certain land and public facilities to be constructed or acquired for the public benefit. The Corporation does not and will not operate, perform services for or do business with any entity other than the City. In particular, the trustee bank referred to herein has executed and delivered certificates of participation to provide funds to finance the costs of the Project, which consists of the construction of two major improvements within approximately 52 acres of a eucalyptus grove, currently zoned open space, commonly known as "Hosp Grove". First, Monroe Street will be widened by the addition of one southbound lane for a length of 1100 feet at the intersection with Marron, including sidewalk, curb gutter and streetlights. This land will provide better access to Monroe from Marron by widening the intersection and providing turn lanes. Second, a 54" diameter storm drain 1100 feet long will be constructed along the west side of Monroe Street to enclose an existing open ditch. In addition, the proceeds of the certificates of participation will be used by the City to retire an existing obligation of the City, the proceeds of which were used to acquire the real property known as "Hosp Grove". The Corporation has entered into an Agency Agreement with the City whereby the City has been appointed to carry out all phases of the acquisition, construction, installation and equipping of the Project. The Project will be operated and maintained by the City. The Corporation has assigned its rights to receive lease payments made by the City to the trustee bank pursuant to the enclosed Assignment Agreement, and the trustee bank has delivered certificates of participation representing undivided fractional interests in such payments to investors who have paid the capitalized value of future lease payments to the trustee bank. The trustee bank will use the proceeds of the certificates of participation to (a) acquire, construct, equip and improve the Project, (b) provide for the payment of a portion of the interest on the lease payments during the construction/acquisition period, and (c) pay the costs incurred by the City in connection with the preparation and delivery of the enclosed agreements and the certificates of participation. The Corporation has no role in the financing except to provide a legal means to own, lease and sell property and to create and assign legal rights. The Corporation has entered into a Trust Agreement with the City and the trustee bank for the purpose of obtaining the required moneys to finance the Project. The Corporation has entered into an Assignment Agreement with the trustee bank in order to assign and transfer certain of its rights under the Lease Agreement to the trustee bank and, in consideration of such assignment and the execution of the Trust Agreement, the trustee bank has executed and delivered certificates of participation evidencing undivided fractional interests in the lease payments to be made by the City under the Lease Agreement. The Project will be operated and maintained by the City. The Corporation has assigned its rights to receive lease payments to the trustee bank pursuant to the terms of the Assignment Agreement (a copy of which is enclosed). The Corporation has assigned such rights to the trustee bank in order to enable the trustee bank to execute and deliver the aforementioned certificates of participation. The proceeds of the certificates of participation will be administered by the trustee bank pursuant to the terms of the enclosed Trust Agreement. In general, the City is required to directly pay to the Trustee, as assignee of the Corporation, specified amounts, which amounts are designed to be sufficient in both time and amount to pay, when due, the principal of and interest payable with respect to the certificates of participation delivered by the trustee bank under the enclosed Trust Agreement. The schedule of lease payments to be paid by the City for the Project components is attached to the enclosed Lease Agreement. The City has covenanted that it will pay all lease payments as the same become due. -2- Pursuant to the Lease Agreement, the City has agreed to lease certain real property described therein to the Corporation, to provide the Corporation with the right to lease such real property to the City. The Corporation has agreed to cause the Project to be constructed and, to that end, has appointed the City as its agent to carry out all phases of the acquisition, construction, installation and equipping of the Project. The Project will be operated and maintained by the City. The Corporation's participation in the financing described above contributes greatly to the exempt purposes of the Corporation by enabling the City to finance the Project components. The Project components are designed to meet increased community needs. These improvements will benefit the residents of the community and surrounding areas. The Corporation will have no revenues, liabilities or activities except as described above. The Corporation may undertake similar transactions in the future for other improvements desired by City and such transactions may be on either a lease or sale basis. The Corporation will do business only with the City. These activities benefit and contribute to the City, enabling the City to avoid paying fees and higher costs charged by leasing companies operating on a profit-making basis to the detriment of the City and, ultimately, the common good of the people. The Corporation has not and does not intend to operate, perform services for, or do business with any entity other than the City. Part III. No. 4 — List the organization's present and future sources of financial support, beginning with your largest source first. Please see Question No. 3 above. Except for organizational expenses which were paid from the proceeds of the certificates referenced in Part III. No. 3 above, the Corporation does not expect to have expenses and. therefore, will have no need or source of financial support. The Corporation is not obligated to pay any portion of the lease payments or any expenses incurred by the City in connection with the execution and delivery by the City of the agreements referenced herein. The Corporation has assigned its rights to receive lease payments to the trustee bank in order to enable the trustee bank to execute and deliver the certificates of participation. The proceeds of the certificates of participation referred to herein ($8,570,455.88) were deposited into the funds established under the enclosed Trust Agreement as follows: -3- $ 121,032.88 Deposited into the Lease Payment Fund (representing accrued interest of $48,568.88 from June 1. 1988 to June 28, 1988. and capitalized interest from June 28, 1988 to January 1. 1990) 6,821,205.11 Deposited into the Escrow Fund 869,000.00 Deposited into the Reserve Fund 109,217.89 Deposited into the Delivery Costs Fund 650,000.00 Deposited into the Acquisition and Construction Fund $8,570,455.88 TOTAL certificate of participation proceeds The Corporation's budget for the first, second and third tax years is as follows: -0- Estimated Receipts -0- Estimated Expenditures The Corporation is not. at this time, proposing to enter into any financing of the type herein described or otherwise. However, if the City so requests that the Corporation participate in such a financing, in order to avoid paying fees and higher costs charged by leasing companies which operate on a profit-making basis to the detriment of the City, the Corporation would participate in such financing at the request of the City. The Corporation would not, however, receive any funds for services performed or for any other purpose. The Corporation's primary purpose is to enable the City to finance, through the execution and delivery of the certificates of participation by the trustee bank referred to herein, the acquisition, construction and improvement of certain real and personal property, to be used by the City for the benefit of the public. Part III. No. 5 — Ust the names, titles and addresses of the officers, directors and trustees of your organization for your current year. The members of the City Council of the City constitute the members of the Board of Directors of the Corporation. Each member of the City Council of the City shall be and remain a member of the Board of Directors of the Corporation for so long as such member remains a member of the City Council of the City. The names and addresses of the current directors of the Corporation are as follows: -4- Claude A. Lewis c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Ann J. Kulchin c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Eric Larson c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 John J. Mamaux c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Mark V. Pettine c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 follows: The names, titles and addresses of the current officers of the Corporation are as Claude A. Lewis President c/o City of Carlsbad 1200 Elm Avenue Carlsbad. California 92008 Ann J. Kulchin Vice President c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Ray Patchett Executive Director c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 James Elliott Treasurer c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Aletha L. Rautenkranz Secretary c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Vincent F. Biondo. legal counsel c/o City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 Part III. No. 8 — Explain how your assets will be distributed on dissolution. Pursuant to Article VI(B) of the Corporation's Articles of Incorporation and Article IV(2) of the Corporation's Bylaws, upon dissolution or winding up of the Corporation, and in certain other circumstances, the Corporation's assets remaining after payment of. or provision made for the payment of. all debts and liabilities of the Corporation, shall be distributed to the City, unless the City is unable to accept the assets or property of the Corporation, in which event, such assets or property will be distributed to the United States of America, the State of California or any political subdivision thereof, to a -5- nonprofit fund, foundation or corporation which has established its tax-exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. Part III. No. 12 — State the purpose(s), other than payment for services performed or supplies furnished, for which your funds are, or will be spent. Please see Question No. 3 above. The Corporation does not expect to have any source or need of financial support. The Corporation will not receive funds and, therefore, will expend no moneys. Part IV — Financial Data (If you prepare a statement of support, revenue and expenses which is more descriptive and detailed than the statement below, you may submit that statement In place of this one.) Please see Question No. 3 above. The Corporation has received no funds and does not expect to have any source or need of financial support. The proceeds of the certificates of participation referred to above have been used by the trustee bank to (a) acquire and construct the Project, (b) provide for the payment of a portion of the interest on the lease payments during the construction/acquisition period, and (c) pay the costs incurred by the City in connection with the preparation and delivery of the enclosed agreements and the certificates of participation. In general, the City is required to pay to the Trustee, as assignee of the Corporation, specified amounts, which amounts are designed to be sufficient in both time and amount to pay. when due. the principal of and interest payable with respect to the certificates of participation delivered by the trustee bank under the enclosed Trust Agreement. The schedule of lease payments to be made by the City is attached to the enclosed Lease Agreement. The Corporation is not obligated to pay any portion of the lease payments or any expenses incurred by the City In connection with the execution and delivery by the City of the enclosed agreements. The Corporation has assigned its right to receive lease payments to the trustee bank in order to enable the tmstee bank to execute and deliver the certificates of participation. The Corporation does not receive funds and has no source or need of financial support. The proceeds of the certificates of participation ($8,570,455.88) were deposited into the funds established under the enclosed Trust Agreement as follows: -6- $ 121,032.88 Deposited into the Lease Payment Fund (representing accrued interest of $48,568.88 from June 1, 1988 to June 28, 1988. and capitalized interest from June 28, 1988 to January 1. 1990) 6,821,205.11 Deposited into the Escrow Fund 869,000.00 Deposited into the Reserve Fund 109,217.89 Deposited into the Delivery Costs Fund 650.000.00 Deposited into the Acquisition and Construction Fund $8,570,455.88 TOTAL certificate of participation proceeds The Corporation's budget for the first, second and third tax years is as follows: -0- Estimated Receipts -0- Estimated Expenditures The Corporation is not, at this time, proposing to participate in any additional financing of the type herein described or otherwise, or to undertake any further business activities. However, if the City so requests that the Corporation participate in such a financing, in order to avoid paying fees and higher costs charged by leasing companies which operate on a profit-making basis to the detriment of the City and, ultimately, the community, the Corporation would participate in such financing at the request of the City. The Corporation would not. however, receive any funds for services performed or for any other purpose. The Corporation's primary purpose is to promote civic improvements and social betterment within the boundaries of the City and surrounding areas by enabling the City to acquire certain land and facilities for the public benefit. The Corporation does not and will not operate, perform services for or do business with any entity other than the City. The documents enclosed with this Application for Recognition of Exemption are as follows: Articles of Incorporation Bylaws Lease Agreement Agency Agreement Assignment Agreement Trust Agreement Specimen Certificate of Participation -7- state cSfifomla OFFICE OF THE SECRETARY OF STATE CORPORATION DIVISION I, MARCH FONG EU, Secretary of State of the State of California, hereby certify: That the annexed transcript has been comparecJ with the corporate record on file in this office, of which it purports to be a copy, and that same is full, true and correct. JN WITNESS WHEREOF, I execute this certificate and aflBx the Great Seal of the State of Califomia this JUN-1 gee Secretary of State SEC/STATE FORM CE-107 130f -01 / GFB3924 1502951 ENDORSED FILED bl ^ ^(ic* af dw Saeratary of Stale Stalk efCoMonn ^JUN -11988 IMKHFOfBCU,Sitntar| of state ARTICLES OF INCORPORATION CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION I. The name of this corporation is City of Carisbad Public Improvement Corporation. il. A. This corporation is a nonprofit public benefrt corporation and is not organized for the private gain of any person. It is organized under the Nonprofit Public Benefit Corporation Law for charitable purposes. B. The purposes for which this corporation is formed are: (1) The specific and primary purposes for which this corporation is formed are: a. To render financial assistance to the City of Carlsbad. State of California (the "City"), by financing, refinancing, acquiring, constructing, improving, leasing and selling of buildings, building improvements, equipment, electrical, water, sewer, road and other public improvements, lands, and any other real or personal property for the benefit of residents of the boundaries of the City and surrounding areas. b. To acquire by lease, purchase or otherwise, real or personal property or any interest therein; to construct, reconstruct, modify, add to. improve or otherwise acquire or equip buildings, structures or improvements and (by sale, lease, sublease, leaseback, gift or otherwise) make any part or all of any such real or personal property available to or for the benefit of the residents of the boundaries of the City. c. To promote the common good and general welfare of the residents of the boundaries of the City, and the governmental enterprises in the boundaries of the City and surrounding areas by the acquisition of the real and personal property as hereinabove described. d. To borrow the necessary funds to pay the cost of financing, refinancing, acquiring, constructing, replacing, establishing, improving, maintaining, equipping and operating such properties and facilities for the herein described purposes, the indebtedness for which borrowed money may, but need not, be evidenced by securities of this corporation of any kind or character issued at any one or more times, which may be either unsecured or secured by any mortgage, trust deed, pledge, encumbrance or other lien upon any part or all of the properties and assets at any time then or thereafter owned or acquired by this corporation. e. To receive limited or conditional gifts or grants in trust, inter vivos, or by way of testamentary devises, bequests or grants in trust, or otherwise, funds of all kinds including property, both real, personal and mixed, whether principal or income, tangible or intangible, present or future, vested or contingent, in order to carry on the purposes of this corporation. (2) The general purposes and powers are to have and exercise all rights and powers now or hereafter conferred on nonprofit corporations under the laws of the State of California; provided, however, that this corporation shall not, except to an insubstantial degree, engage in any activities or exercise any powers that are not in furtherance of the specific and primary purposes of this corporation; provided, further, that this corporation shall not have the power to, and shall not, do any act or conduct any activity, plan, scheme, design or course of conduct which in any way conflicts with Sections 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended, and regulations promulgated pursuant to such Sections as they now exist or as they may hereafter be amended. III. The name and address in the State of California of this corporation's initial agent for service of process is: Mr. Raymond R. Patchett City Manager City of Carlsbad 1200 Elm Avenue Carlsbad, California 92008 IV. The principal offices for the transaction of the business of this corporation is located in the County of San Diego. The property of this corporation is irrevocably dedicated to charitable purposes and no part of the net income or assets of this corporation shall ever inure to the benefit of any director, officer or member thereof or to the benefit of any private person. V. A. This corporation is organized and operated by a group of public spirited citizens exclusively for charitable purposes within the meaning of Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. -2- B. Notwithstanding any other provision of these Articles, this corporation shall not carry on any other activities not permitted to be carried on by a corporation exempt form federal income tax under Section 501(c)(4) of the Internal Revenue Code of 1986, as amended. C. No substantial part of the activities of this corporation shall consist of carrying on propaganda, or otherwise attempting to influence legislation, and this corporation shall not participate or intervene in any political campaign (including the publishing or distribution of statements) on behalf of any candidate for political office. VI. A. During the continuance of this corporation, it may distribute any of its assets to the United States of America, the State of California, or any political subdivision thereof, to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purpose and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. • B. Upon the dissolution or winding up of this corporation, its assets remaining after payment of, or provision made for the payment of. all debts and liabilities of this corporation, shall be distributed to the United States of America, the State of California, or any political subdivision thereof, or to a nonprofit fund, foundation or corporation which is organized and operated exclusively for charitable or social welfare purposes and which has established its tax-exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as amended. -3- IN WITNESS WHEREOF, the undersigned, being the sole incorporator of this corporation, have executed these Articles of Incorporation, as of the 31st day of May, 1988. Incorporator I hereby declare that I am the person who executed the foregoing Articles of Incorporation, which execution is my act and deed. William H. Madison. Incorporator -4- JHHW:QFB OU^g^ QFB3923 df* c BYLAWS OF CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION ARTICLE I Offices and Seal Section 1. Offices. The principal office of the Corporation for the transaction of business shall be 1200 Elm Avenue. Carlsbad, Catifornia 92008. The Board of Directors may, however, fix and change from time to time the principal office from one location to another by noting the change of address in the minutes of the meeting of the Board of Directors at which the address was fixed or changed. The fixing or changing of such address shall not be deemed an amendment to these Bylaws. Section 2. Seal. The Corporation shall have a seal, consisting of two (2) concentric circles with the words "City of Carlsbad Public Improvement Corporation", with the date of incorporation of the Corporation. ARTICLE II Directors Section 1. Powers. Subject to the limitations of the Articles of Incorporation of the Corporation, the terms of these Bylaws, and the laws of the State of Califomia. the powers of the Corporation shall be vested in and exercised by and its property controlled and its affairs conducted by the Board of Directors. Section 2. Number. The Corporation shall have five (5) Directors. Directors are collectively to be known as the Board of Directors. The number of Directors may be changed by a Bylaw or amendment thereof duly adopted by the Board of Directors. Section 3. Selection, Tenure of Office and Vacancies. The individuals who act as the members of the City Council of the City of Carlsbad (the "City") shall constitute the Board of Directors of the Corporation, and each member of the City Council shall be and remain a member of the Board of Directors of the Corporation for so long as such member remains a member of the City Council. Section 4. Compensation. Directors shall serve without compensation but each Director may be reimbursed his or her necessary and actual expenses, including travel incident to his services as Director, pursuant to resolution of the Board of Directors. Any Director may elect, however, to decline said reimbursement. Section 5. Organization Meetings. Immediately following the annual meeting of the Board of Directors or any special meeting of the Board of Directors at which Directors shall have been elected, the Directors shall meet for the purpose of organizing the Board, the election of officers and the transaction of such business as may come before the meeting. Pending such organization meeting, all officers of the Corporation shall hold over, except any officer required by law or these Bylaws to be a Director and who does not qualify as a Director. A Director elected at such meeting of the Board of Directors shall forthwith become a member of the Board of Directors for purposes of such organization. In the event such an organizational meeting shalt not be held immediately following such meeting of the Board of Directors, it shall thereafter be held at the next regular meeting or at a special meeting and notice thereof shall be given in the manner provided in Section 7 of this Article for nottce of special meetings. Section 6. Regular and Organizational Meetings. Regular meetings of the Board of Directors shall be held at such time as the Board may fix by resolution from time to time; provided, however, that at least one regular meeting shall be held each year and such meetings shall, in all respects, conform to provisions of the Ralph M. Brown Act, being Sections 54950 through 54961 of the Govemment Code of the State of Califomia (the "Brown Act"). No notice of any organizational meeting of the Board of Directors, held immediately following the annual meeting of the Board of Directors or on or after any special meeting of the Board of Directors shall have been elected, need be given; provided, that if such an organizational meeting is not held immediately following such meeting of the Board of Directors, then notice thereof shall be given in a manner provided in Section 7 of this Article, in the same manner as notice of special meetings. SecUon 7. Special Meetings. Special meetings of the Board of Directors shalt be called, noticed and held in accordance with the provisions of Section 54956 of the Brown Act. Section 8. Quorum. A quorurn shall consist of a majority of the members of the Board of Directors unless a greater number is expressly required by statute, by the Articles of Incorporation of the Corporation, or by these Bylaws. Every act or decision done or made by a majority of the Directors present at a meeting duly held at which a quorum is present, shall be the act of the Board of Directors. Section 9. Order of Business. The order of business at the regular meeting of the Board of Directors and. ao far as possible, at all other meetings of the Board of Directors, shall be essentially as follows, except as otherwise detemnined by the Directors at such meeting: (a) Report on the number of Directors present in person in order to determine the existence of a quorum. -2- (b) Reading of the notice of the meeting and proof of the delivery or mailing thereof, or the waiver or waivers of notice of the meeting then filed, as the case may be. (c) Reading of unapproved minutes of previous meetings of the Board of Directors and the taking of action with respect to approval thereof. (d) Presentation and consideration of reports of officers and committees. (e) Unfinished business. (f) New business. (g) AdjoumnDent. Section 10. Resignation of Directors. Any Director of the Corporation may resign at any time by giving written notice to the President or to the Board of Directors; provided, however, in the event of such resignation, such Director's position shall remain vacant until a new member of the City Council is elected to fill such Director's position. Such resignation shall take effect at the time specified therein, and, unless otherwise specified therein, the acceptance of such resignation shall not t>e necessary to make it effective. Section 11. Nonliability for Debts. The private property of the Directors shall be exempt from execution or other liability for any debts, liabilities or obligations of the Corporation and no Director shall be liable or responsible for any debts, liabilities or obligations of the Corporation. Section 12. Indemnity by Corporation for Litigation Expenses of Officer, Director or Employee. Should any Director, officer or employee of the Corporation be sued, either alone or with others, because he is or was a director, officer or employee of the Corporation, in any proceeding arising out of his alleged misfeasance or nonfeasance in the performance of his duties or out of any alleged wrongful act against the Corporation or by the Corporation, indemnity for his reasonable expenses, including attomeys' fees incunred In the defense of the proceedings, may be assessed against the Corporation. Its receiver, or Its director by the court in the same or a separate proceeding if the person sued acted in good faith and in a manner such person reasonably believed to t>e in the best Interests of the Corporation and, in the case of a criminal proceeding, had no reasonable cause to believe the conduct of such person was unlavdul. The amount of such indemnity shall be so much of the expenses, including attomeys' fees, incurred in the defense of the proceeding, as the court determines and finds to be reasonable. -3- ( ARTICLE III Officers Section 1. Officers. The officers of the Corporation shall be a President, a Vice President, a Secretary and such other officers as the Board of Directors may appoint. When duties do not conflict, one person, other than the President, may hold more than one of these offices. The Corporation may also have, at the discretion of the Board of Directors, one or more additional Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. In addition to such officers, the City Manager of the City shall act ex officio as the Executive Director of the Corporation; the chief financial officer of the City shall act ex officio as the Treasurer of the Corporation; the City Clerk of the City shall act ex officio as the Secretary of the Corporation: and the City Attorney of the City shall act ex officio as legal counsel to the Corporation. Section 2. Election of Officers. The officers of the Corporation (other than the Executive Director. Treasurer. Secretary and legal counsel to the Corporation) shall be chosen by and shall serve at the pleasure of the Board of Directors and each shall hold office until any such officer shall resign or shalt be removed or otherwise disqualified to serve or any successor shall be elected and qualified to serve. Section 3. Subordinate Officers. The Board of Directors may elect or authorize the appointment of such other officers than those hereinabove mentioned as the business of the Corporation may require, each of whom shall hold office for such period, have such authonty and perform such duties as are provided in these Bylaws, or as the Board of Directors from time to time may authorize or determine. Section 4. Removal of Officers. Any officer may be removed, either with or without cause, by a majority of the Directors then in office at any regular or special meeting of the Board, or, except In the case of an officer chosen by the Board of Directors, by any officers upon whom such power of removal may be confen-ed by the Board of Directors. Should a vacancy occur in any office as a result of death, resignation, removal, disqualification or any other cause, the Board of Directors may delegate the powers and duties of such office to any officers or to any Directors until such time as a successor for said office has been elected and appointed. Section 5. President. The President shall preside at all meetings of the Board of Directors and exercise and perform such other powers and duties as may be from time to time assigned to him by the Board of Directors or t>e prescribed by the Bylaws. The President shall also be the chief corporate officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction and control of the business and officers of the Corporation. He shall preside at all meetings of the Board of Directors. He shall be ex officio member of all standing committees, and shall have the general powers and duties of management usually vested in the office of President of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or by these Bylaws. -4- ( Section 6. Vice llB^ident. In the absence or disabil^lPbf the President, the Vice President, or the Vice Presidents in order of their ranks as fixed by the Board of Directors, or if not ranked, the Vice President designated by the Board of Directors, shall perform alt the duties of the President and when so acting shall have all the powers of and be subject to all of the restrictions upon the President. The Vice Presidents shall have such other powers and perform such other duties as may from time to time be prescribed for them, respectively, by the Board of Directors or by these Bylaws. Section 7. Secretary. The Secretary shall keep or cause to be kept a book of minutes at the principal office or at such other place as the Board of Directors may order, of all meetings of the Directors, with the time and place of holding, whether regular or special, and if special, how authorized, the notice thereof given, the names of those present at Directors' meetings and the proceedings thereof. The Secretary shall give or cause to be given notice of all meetings of the Board of Directors of the Corporation, shall keep the corporate records in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or these Bylaws. Section 8. Treasurer. The Treasurer shall keep and maintain or cause to be kept and maintained adequate and correct amounts of its assets, liabilities, receipts, disbursements, gains and losses. The books of account shall at all times be open to inspection by any Director. The Treasurer shalt deposit alt monies and other valuables in the name and to the credit of the Corporation in such depositories as may be designated by the Directors. He shall disburse the funds of the Corporation as shall be ordered by the Board of Directors, shall render to the President and the Directors whenever they shall request it. an account of all of his transactions as Treasurer and of the financial condition of the Corporation, shalt take proper vouchers for all disbursements of the funds of the Corporation, and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these Bylaws. Section 9. Executive Director. The Executive Director of the Corporation shall have such powers and perform such duties as may from time to time be prescribed by the Board of Directors or by these Bylaws. Section 10. Assistant Secretaries and Assistant Treasurers. The Assistant Secretaries and the Assistant Treasurers in the order of their seniority as specified by the Directors shall, in the absence or disability of the Secretary or the Treasurer, respectively, perform the duties and exercise the powers of the Secretary or Treasurer and shall perform such duties as the Board of Directors shall prescrit>e. ARTICLE IV Objects and Purposes Section 1. Nature of Objects and Purposes. The business of the Corporation is to be operated and conducted in the promotion of its objects and purposes as set forth in Article II of its Articles of Incorporation. -5- Section 2. Dissolution. The Corporation may be dissolved by vote of the Directors, or by the action of the Board of Directors in accordance with the provisions of California law. Upon the dissolution of the Corporation, and after payment or provision for payment, all debts and liabilities, the assets of the Corporation shalt be distributed to the Crty. tf for any reason the Crty is unable or unwitting to accept the assets of the Corporation, said assets will be distributed to the Federal Govemment: to a state or local government for public purposes; or to a nonprofit fund, foundation, or corporation which is organized and operated for charitable purposes and which has established its tax- exempt status under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986. as amended. Section 3. Merger. The Corporation may merge with other corporations organized solely for nonprofit purposes, qualified and exempt from Federal taxation pursuant to Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986. as amended, and from State taxation, upon compliance wrth the provisions of Caiifomia law relating to merger and consolidation. ARTICLE V General Provisions Section 1. Payment of Money, Signatures. All checks, drafts or other orders for payment of money, notes or other evidences of indebtedness issued in the name of or payabte to the Corporation and any and all securities owned by or held by the Corporation requiring signature for transfer shalt be signed or endorsed by such person or persons and in such manner as from time to time shatt be determined by the Board of Directors. Section 2. Execution of Contracts. The Board of Directors, except as in the Bylaws otherwise provided, may authorize any officer or officers, agent or agents, to enter into any contract or execute any contract or execute any instrument in the name of and on t>ehalf of the Corporation and such authority may be general or confined to specific Instances and unless so authorized by the Board of Directors, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or in any amount. Section 3. Fiscal Year. The fiscal year of the Corporation shall commence on the 1st day of July of each year and shall end on the 30th day of June of the next succeeding year. Section 4. Annual Audit. The affairs and financial condition of the Corporation Shalt be audrted annually at the end of each fiscal year (as provided in Section 3 above) commencing wrth fiscal year 1988-1989 by an independent certified public accountant selected by the Board of Directors and a written report of such audit and appropriate financial statements shatt be submitted to the Board of Directors prior to the next regular meeting of the Board of Directors of the Corporation foilowing the completion of such -6- audrt. Addrtional audits may be authorized as considered necessary or desirable by the Board of Directors. ARTICLE VI Exempt Activities Notwrthstanding any other provisions of these Bylaws, no Director, officer, employee or representative of the Corporation shall take any action or carry on any activity by or on behalf of the Corporation nol permitted to be taken or carried on by an organization exempt under Section 501(c)(3) or 501(c)(4) of the Intemal Revenue Code of 1986. as amended, and the Regulations promulgated thereunder as they now exist or as they may hereafter be amended. ARTICLE Vll Amendment to Bylaws These Bylaws may be amended by majority vote of the Board of Directors. ADOPTED by the Board of Directors of the Crty of Carisbad Public Improvement Corporation on June 7,1988. Bv /Off.:*:^ / (^nu^^A.^i^ . Secretary -7- SECRETARY'S CERTIFICATE 1, the undersigned, do hereby certify: 1. That 1 am the duty elected and acting Secretary of the City of Carisbad Public Improvement Corporation, a California nonprofit public benefrt corporation: and 2. That the foregoing Bylaws constitute a full, true and correct copy of the Bylaws of said Corporation in full force and effect as of the date hereof. IN WITNESS WHEREOF, t have hereunto subscribed my name this^ day of Bv /f^.y/^y^^..-7iL^<^i^ Secretary -8- 13061-03 JHHW:WHM:pch pch pch 05 13/88 05,'20 8S 05'26/88 M66g5 AFTER RECORDATION RETURN TO: JONES HALL HILL & WHITE, A PROFESSIONAL LAW CORPORATION Four Embarcadero Center, Suite 1950 San Francisco, Califomia 94111 Attention: Janet H. Eklserg COUNTY ne Ji, 4T IHSTRUMtNT r^O ^?-3oS^90 THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11922 OF THE CALIF0RNL\ REVENUE AND TAXATION CODE. ASSIGNMENT AGREEMENT (HOSP GROVE PROJECT) THIS ASSIGNMENT AGREEMENT, made and entered into as of June 1, 1988, by and between the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, a nonprofit public benefit corporation organized and existing under the laws of the State of Califomia (the "Corporation"), and The Bank of Califomia, N.A., a national banking association organized and existing under the laws of the United States of America, as trustee (the "Tmstee"); WITNESSETH: In the joint and mutual exercise of their powers, in consideration of the mutual covenants herein contained, and for other valuable consideration, the parties hereto recite and agree as follows: Section 1. Recitals. (a) The Corporation and the City of Carlsbad (the "City") have entered into a lease agreement, dated as of June 1, 1988 (the "Lease Agreement"), and recorded concurrently herewith, whereby the Corporation has agreed to lease to the City, and the City has agreed to lease from the Corporation, the Project and the Site (as said terms are more particularly defined in the Lease Agreement) in the manner and on the terms set forth in the Lease Agreement, which terms include, without limitation, the obligation of the City to pay Lease Payments (as defined in the Lease Agreement) to the Corporation in consideration of the City's use and enjoyment of the Project and the Site under the Lease Agreement. (b) Under the Lease Agreement, the Corporation is required to cause to be deposited with the Trustee certain sums of money to be credited, held and applied in accordance with the Lease Agreement and with a tmst agreement, dated as of June 1, 1988 (the "Tmst Agreement"), by and among the Corporation, the City and the Tmstee. (c) Upon delivery of the Lease Agreement, the Corporation is required to deposit with the Tmstee, in addition to other moneys to be deposited with the Tmstee, moneys for the acquisition and constmction of the Project. For the purpose of obtaining such moneys, the Corporation is willing to convey to certain persons (the "Owners") fractional interests in the Lease Payments, such fractional interests to be evidenced by certificates of participation therein (the "Certificates"). In order to make such fractional interests marketable on terms acceptable to the Corporation, the Corporation is willing to assign and transfer its rights under the Lease Agreement to the Trustee for the benefit of the Owners. Concurrently with the delivery of this Assignment Agreement, the Tmstee is executing, selling and delivering Certificates in an aggregate face amount of Eight Million Six Himdred Ninety Thousand dollars ($8,690,000) to Rauscher Pierce Refsnes, Inc. for resale to the Owners. The proceeds of such sale are anticipated to be sufficient to permit the Corporation to make the deposits required imder the Lease Agreement and the Tmst Agreement and to permit the Corporation to pay therewith the cost of acquisition and constmction of the Project. (d) Each of the parties has authority to enter into this Assignment Agreement and has taken all actions necessary to authorize its officers to execute it. Section 2. Assignment. The Corporation hereby transfers, assigns and sets over to the Tmstee, for the benefit of the Owners of Certificates executed and delivered under the Tmst Agreement, all of the Corporation's rights under the Lease Agreement (excepting only the Corporation's rights under Sections 5.3, 7.3 and 9.4 of the Lease Agreement), including without limitation (i) the right to receive and collect all of the Lease Payments from the City under the Lease Agreement, (ii) the right to receive and collect any proceeds of any insurance maintained thereunder and of any condemnation award rendered with respect to the Project or the Site, and (iii) the right to exercise such rights and remedies conferred on the Corporation pursuant to the Lease Agreement as may be necessary or convenient (A) to enforce payment of the Lease Payments and any other amoimts required to be deposited in the Lease Payment Fimd or the Insurance and Condemnation Fund established under the Tmst Agreement, or (B) otherwise to protect the interests of the Owners in the event of a default by the City under the Lease Agreement. All rights assigned by the Corporation shall be administered by the Trustee in accordance with the provisions of the Tmst Agreement and for the equal and fractional benefit of the Owners of Certificates. Section 3. Acceptance. The Tmstee hereby accepts the assignments made herein for the purpose of securing, equally and fractionally, the payments due pursuant to the Lease Agreement and the Tmst Agreement to, and the rights under the Lease Agreement and Tmst Agreement of, the Owners of the Certificates delivered pursuant to the Tmst Agreement, all subject to the provisions of the Tmst Agreement. Section 4. Conditions. This Assignment Agreement shall confer no rights or impose no duties upon the Tmstee beyond those expressly provided in the Lease Agreement and the Trust Agreement. -2- (. IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their officers thereunto duly authorized as ofthe day and year first written above. CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION (S EAD Attest: Secretary ViceTj«y«irf THE BANK OF CALIFORNIA, N.A., as Tmstee Authorized Officer -3- STATE OF CALIFORNIA COUNTY OF SAN DIEGO ) ) ss ) On this 23rd day of June, in the year 1988, before me, , a notary public, personally appeared Ann J. Kulchin and Aletha L, Rautenkranz, personally known to me (or proved to me on .the basis of satisfactory evidence) to be the persons who executed the within instrument as Vice President and Secretary, respectively, of the CITY OF CARLSBAD PUBLIC IMPROVEMENT CORPORATION, and acknowledged to me that said Corporation executed it. WITNESS my hand and official seal. (Notarial Seal) OFFICIAL SEAL RANDEE HARLIB Notary PuWic-Calitomrti SAN OIEGO COUNrr MyCewim. Enp. Fib. 20.1991 (signature) Notary Public for the State of Califomia My commission expires: -4- STATE OF CALIFORNIA ) ) ss. COUNTY OF SAN FRANCISCO ) On this ^ day of June, in the year 1988, before me, the undersigned, a Notary Public in and for said State personally appeared Cecily Medved, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed the within instmment as an authorized ofiicer of The Bank of Califonua N.A., the corporation therein named, and acknowledged to me that The Bank of C^orma, N.A executed the within instrument pursuant to its bylaws or a resolution of its board ot directors. WITNESS my hand and ofiicial seal. (SEAL) OFFlCiAi SEAL PATRICIA .ANN HAZLITT Notary PuDlic-Calilornia SAN FRANCISCO COUNT\' My Comm. Exp Jan 12, 19?: Notary PubUc in and for sgM State Typed Name: Patricia Ann Hazlitt Commission Expires: j^nnjar'y iQQn -5- ^^•^M%//l/r FORK 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 EXHIBIT "A* PARCEL 1! PORTIONS OF LOTS 8, 9, 10, 11, 12, 13, X^'^^JfP ^l^, EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLI/)WS: COMMENCING AT THE SOUTHEAST CORNER OF SAID TRACT; THENCE ALONG THE EAST LINE OF SAID TRACT NORTH 00»56'20'' EAST, 2263.66 FEET, SAID POINT BEING SOUTH 00'56'20" WEST, 414.74 FEET FROM THE WEST QUARTER CORNER OF SECTION 32, TOWNSHIP 11 SOUTH, RANGE 4 WEST, SAN BERNARDINO BASE AND MERIDIAN; THENCE NORTH 89'18'ID" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING; SAID POINT BEING ON A NON-TANGENT CURVE CONCAVE SOtJTHEASTERLY AND HAVING A RADIUS OF 310.00 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 43'14'53" WEST; THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*33'00", AN ARC DISTANCE OF 224.81 FEET; THENCE LEAVING SAID CURVE NORTH 89'18'10" WEST 557.72 FEET; THENCE SOUTH 61'25'08" WEST 305.23 FEET; THENCE NORTH 10*19'07" WEST, 374.05 FEET; THENCE NORTH 79'40'53" EAST, 272.00 FEET; THENCE NORTH 02'01'30" WEST, 699.16 FEET TO A POINT ON A NON-TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 761.50 FEET, A RADIAL LINE TO SAID POINT BEARS NORTH 10'06'51" EAST; THENCE SOtJTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 03*23'09", AN ARC DISTANCE OF 45.00 FEET; THENCE TANGENT TO SAID CURVE SOUTH 76*30'00" EAST, 350.95 FEET; THENCE NORTH 1.00 FOOT; THENCE SOUTH 76*30'00" EAST, 339.00 FEET; THENCE SOUTH 350.00 FEET; THENCE SOUTH 06'51'59" EAST 261.11 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION DESCRIBED AS FOLIOWS: COMMENCING AT THE NORTHEASTERLY CORNER OF CARLSBAD TRACT NO. 77-2, UNIT NO. 2, ACCORDING TO MAP THEREOF NO. 9813 FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAID SAN DIEGO COUNTY, SEPTEMBER 26, 1980; THENCE NORTH 1*01'10" EAST, ALONG THE EASTERLY LINE OF SAID HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1,843.48 FEET; THENCE NORTH 89* 11'20" WEST, 46.07 FEET TO THE TRUE POINT OF BEGINNING AND THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF "310.00 FEET; THENCE SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 41*32'50", AN ARC DISTANCE OF 224.79 FEET; THENCE LEAVING SAID CURVE, NORTH 89'11'20" WEST, 30.085 FEET TO THE BEGINNING OF A NON-TANGENT CURVE, CONCAVE SOUTHEASTERLY AND HAVING A PAGE 8 ^RM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 RADIUS OF 340.00 FEET; THENCE NORTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 45'35'15" AND ARC DISTANCE OF 270.52 FEET; THENCE LEAVING SAID CURVE SOUTH 6*45'09" EAST, 36.41 FEET TO THE TRUE POINT OF BEGINNING. PARCEL 2; PORTIONS OF LOTS 8, 9, 10, 16, 17, 18, 23, 24, 25, CANON STREET AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908 DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST SOUTHWESTERLY CORNER OF LOT 25 IN SAID TRACT; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LOT 25 NORTH 23*27'45" WEST 195.00 FEET; THENCE NORTH 68*30'20" EAST, 360.41 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*09'57" WEST, 40.89 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35*28", AN ARC DISTANCE OF 265.33 FEET; THENCE TANGENT TO SAID CURVE NORTH 03*34'35" WEST 94.02 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 458.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22*18'38", AN ARC DISTANCE OF 178.34 FEET; THENCE TANGENT TO SAID CURVE NORTH 25*53'13" WEST 189.20 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10*17*57", AN ARC DISTANCE OF 187.30 FEET; THENCE TANGENT TO SAID CURVE NORTH 15*35*16" WEST, 108.41 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 88* 16•48'*, AN ARC DISTANCE OF 30.82 FEET TO A POINT OF CUSP WITH A CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 838.50, A RADIAL LINE TO SAID POINT OF CUSP BEARS SOUTH 13*52*04" EAST; THENCE NORTHEASTERLY ALONG THE LAST MENTIONED CURVE THROUGH A CENTRAL ANGLE OF 01*43*12", AN ARC DISTANCE OF 25.17 FEET; THENCE TANGENT TO SAID CURVE NORTH 74*24*44" EAST 140.00 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHWESTERLY AND HAVING A RADIUS OF 838.50 FEET; THENCE NORTHEASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*24*44", AN ARC DISTANCE OF 196.28 FEET; THENCE TANGENT TO SAID CURVE NORTH 61*00*00" EAST, 174.31 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHEASTERLY AND HAVING A RADIUS OF 761.50 FEET; THENCE EASTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 39*06'51", AN ARC DISTANCE OF 519.85 FEET; THENCE SOUTH 00*01'30" EAST 699.16 FEET; THENCE SOUTH 79*40*53** WEST, 272.00 FEET; THENCE SOUTH 10*19*07" EAST 374.05 FEET; THENCE SOUTH 68*30*20" WEST, 541.94 FEET TO THE TRUE POINT OF BEGINNING. PAGE 9 FORM 1402 ORDER NO. 969457-18 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND, 42.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF SAID LOT 25 DISTANT THEREON NORTH 23*27*45" WEST, 195.00 FEET FROM THE SOtJTHWEST CORNER THEREOF; THENCE LEAVING SAID WESTERLY LINE NORTH 68*37*10" EAST (RECORD NORTH 68'30'28" EAST PER DEED) 402.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*03*07" WEST, 38.57 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE EASTERLY AND HAVING A RADIUS OF 1000.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35'23", AN ARC DISTANCE OF 254.64 FEET; THENCE TANGENT TO SAID CURVE NORTH 3*27'44" WEST, 109.90 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25* 22'30", AN ARC DISTANCE OF 354.30 FEET; THENCE TANGENT TO SAID CURVE NORTH 28*50'14" WEST, 106.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*21'49", AN ARC DISTANCE OF 186.59 FEET; THENCE NORTH 15*28*25" WEST, 30.00 FEET, MORE OR LESS, TO THE SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. THE SIDELINES OF SAID 84 FOOT WIDE STREET SHALL TERMINATE WITH 20.00 FOOT RADIUS RETURNS AT SAID SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. PARCEL 3! PORTIONS OF LOTS 22, 23, 24, 25 AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY*S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST SOUTHWESTERLY CORNER OF LOT 25 IN SAID TRACT; THENCE ALONG THE SOUTHWESTERLY LINE OF SAID LOT 25 NORTH 23*27*45" WEST 195.00 FEET; THENCE NORTH 68*30*20" EAST 360.41 FEET; THENCE NORTH 18*09*57" WEST 40.89 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 01*38*58", AN ARC DISTANCE OF 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 12*56*24", AN ARC DISTANCE OF 235.33 FEET; THENCE TANGENT TO SAID CURVE NORTH 03*34*35" WEST 94.02 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 458.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 22*18*38", AN ARC DISTANCE OF 178.34 FEET; THENCE TANGENT TO SAID CURVE NORTH 25*53*13" WEST 189.20 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 1042.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 10*17*57", AN ARC DISTANCE OF 187.30 FEET; THENCE TANGENT TO SAID CURVE NORTH PAGE 10 1F6RM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 15*35'16" WEST 108.41 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 88'16'48", AN ARC DISTANCE OF 30.82 FEET TO A POINT OF REVERSE CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 838.50 FEET; THENCE WESTERLY AIONG SAID REVERSE CURVE THROUGH A CENTRAL ANGLE OF 32*08'52", AN ARC DISTANCE OF 470.47 FEET; THENCE SOUTH 07*34*20" WEST 213.72 FEET; THENCE SOUTH 64*59*00" EAST 248.29 FEET; THENCE SOUTH 25*53*13" EAST 590.00 FEET; THENCE SOUTH 66*45*50" EAST 330.26 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM AN 84 FOOT WIDE STRIP OF LAND, 42.00 FEET EACH SIDE OF THE FOLLOWING DESCRIBED CENTERLINE: COMMENCING AT A POINT ON THE WESTERLY LINE OF SAID LOT 25 DISTANT THEREON NORTH 23*27*45" WEST, 195.00 FEET FROM THE SOUTHWEST CORNER THEREOF; THENCE LEAVING SAID WESTERLY LINE NORTH 68*37*10" EAST (RECORD NORTH 68*30*28" EAST PER DEED) 402.52 FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 18*03*07" WEST, 38.57 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE EASTERLY AND HAVING A RADIUS OF 1000.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 14*35*23", AN ARC DISTANCE OF 254.64 FEET; THENCE TANGENT TO SAID CURVE NORTH 3*27*44" WEST, 109.90 FEET TO THE BEGINNING OF A TANGENT CURVE, CONCAVE WESTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 25*22*30", AN ARC DISTANCE OF 354.30 FEET; THENCE TANGENT TO SAID CURVE, NORTH 28*50*14" WEST, 106.19 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 800.00 FEET; THENCE AIX>NG SAID CURVE THROUGH A CENTRAL ANGLE OF 13*21*49", AN ARC DISTANCE OF 186.59 FEET; THENCE NORTH 15*28*25" WEST, 30.00 FEET, MORE OR LESS, TO THE SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. THE SIDELINES OF SAID 84 FOOT WIDE STREET SHALL TERMINATE WITH 20.00 FOOT RADIUS RETURNS AT SAID SOUTHERLY RIGHT OF WAY LINE OF MARRON ROAD. PARCEL 4: THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 AND OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 20; THENCE ALONG THE EASTERLY LINE THEREOF, NORTH 06*58'00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 505.81 FEET; THENCE NORTH 89*29*00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 49*22'30" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE PAGE 11 FORM 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24'55", A DISTANCE OF 43.72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35'12'35" EAST 449.44 FEET TO THE BEGINNING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 37*47'39", A DISTANCE OF 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00'14" EAST 111.94 FEET TO THE BEGINNING OF A TANGENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 86* 40'30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 842.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 24*45'00", A DISTANCE OF 363.72 FEET; THENCE SOUTH 44*55*44" WEST 161.50 FEET TO A POINT WHICH BEARS NORTH 70*28'24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28'24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THOSE PORTIONS LYING SOUTHWESTERLY LINE OF SAID EUCALYPTUS STREET. NORTHEASTERLY OF THE PARCEL 5: THOSE PORTIONS OF LOTS 19 AND 20 IN HOSP EUCALYPTUS FOREST COMPANYS TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JUNE 8, 1908, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT.20; THENCE ALONG THE SOUTHERLY LINE OF SAID LOTS 20 AND 19, NORTH 89*29*00" WEST 781.61 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 29*16*10" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 20*06*20", A DISTANCE OF 162.30 FEET; THENCE SOUTH 89*29*00" EAST 213.74 FEET; THENCE NORTH 70*28*24" EAST 505.81 FEET TO AN INTERSECTION WITH THE EASTERLY LINE OF SAID LOT 20; THENCE ALONG SAID EASTERLY LINE, SOUTH 06*58*00" WEST 278.00 FEET TO THE POINT OF BEGINNING. PARCEL 6t THOSE PORTIONS OF LOTS 19, 20, 21 AND 33 OF EUCALYPTUS STREET IN HOSP EUCALYPTUS FOREST COMPANY'S TRACT NO. 1, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1136, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY JUNE 8, 1908, DESCRIBED AS FOLLOWS: PAGE 12 ^FOIKH 1402 ALTA OWNER'S POLICY WESTERN REGIONAL EXCEPTIONS ORDER NO. 969457-18 COMMENCING AT THE SOUTHEAST CORNER OF SAID LOT 20; THENCE AI/)NG THE EASTERLY LINE THEREOF; NORTH 06*58*00" EAST 278.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 505.81 FEET; THENCE 89*29*00" WEST 213.74 FEET TO A POINT ON A NON-TANGENT 462.52 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL LINE OF WHICH BEARS SOUTH 49*22*30" EAST TO SAID POINT; THENCE NORTHEASTERLY ALONG*THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 05*24*55", A DISTANCE OF 43.72 FEET; THENCE TANGENT TO SAID CURVE, NORTH 35*12*35" EAST 449.44 FEET TO THE BEGINNING OF A TANGENT 490.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY; THENCE NORTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 37*47*39", A DISTANCE OF 323.22 FEET; THENCE TANGENT TO SAID CURVE NORTH 73*00*14" EAST 111.94 FEET TO THE BEGINNING OF A TANGENT 20.00 FOOT RADIUS CURVE CONCAVE SOUTHWESTERLY; THENCE EASTERLY AND SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 86*40*30", A DISTANCE OF 30.26 FEET TO THE BEGINNING OF A REVERSE 842.00 FOOT RADIUS CURVE CONCAVE NORTHEASTERLY; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 24*45*00", A DISTANCE OF 363.72 FEET; THENCE SOUTH 44*55*44" WEST 161,50 FEET TO A POINT WHICH BEARS NORTH 70*28*24" EAST FROM THE TRUE POINT OF BEGINNING; THENCE SOUTH 70*28*24" WEST 69.19 FEET TO THE TRUE POINT OF BEGINNING. PAGE 13 •U.S. GOVERNMENT PRINTING OFFICE: 1965-489-601 Form SS-4 (Rev. November 1985) Department of the Treasury Internal Revenue Service k)r clear copy on both parts, please type or print witl^P point pen and press firmiy. Application for Employer Identification Number (For use by employers and others. Please read the separate instructions before completing this form.) For Paperwork Reduction Act Notice, see separate instructions. OMB No. 1545 0003 Expires 8-31-88 1 Name (True name. See instructions.) City of Carlsbad Public Improvement Corporati on 4 Trade name of business if different from item 1 n/a 6 Address of principal place of busmess (Number and street) 1200 Elm Avenue 8 City, state, and ZIP code Carlsbad, CA 92008 10 Type of organization D Governmental 2 Social security no., if sole proprietor n/a 3 Ending month of accounting year June 30 5 General partner s name, if partnership; principal officer's name, if corporation; or grantor's name, if trust , n/a 7 Mailing address, if different n/a 9 City, state, and ZIP code n/a Q Individual Q Trust E Nonprofit organization 12 Reason for applying Started new lEI business Q Partnership D Corporation • • Plan administrator Other (specify) Purchased LJ going business Other • (specify) 14 Nature of principal activity (See instructions ) Enable City of Carlsbad, CA, to finance public works 16 Peak number of employees expected in the next 12 months (If none, enter "0") • Nonagricultural •0- Agricultural -0- 18 Most of the products or services are sold to whom? Business General Other U establishments (wholesale) • public (retail) • (specify) Household -0- 20 Has the applicant ever applied for an identification number for this or any other business? Q yes E No If "Yes," enter name and trade name. Also enter approx. date, city, and state where the application was filed and previous number if known. • gj N/A 11 County of principal business location San Diego 13 Acquisition or starting date (Mo., day, year). Sec instructions. , 06/01/88 15 First date wages or annuities were paid or will be paid (Mo., day, year). n/a 17 Does the applicant operate more than one place of business? • Yes B No 19 If nature of business is manufacturing, state principal product and raw material used. n/a Under penalties of periury, I declare that I have examined this application, and to the best ol my knowledge and belief it is true, correct, and complete. Signature and Title QMJB.. (P QUiZlZZJu^^ Secretary Date • y^.^,^^ Ind. j ' Please leave blank • Geo. Class Size Telephone number (include area code) (619) 434-2808 Reas. for appl. Parti Form 2848 (Rev. February 1988) Department of the Treasury Internal Revenue Service ^ Power of Attorney and^ Declaration of Representative >• See separate instructions. OMB No. 1545-0150 Expires; 12-31-90 Parti Power of Attorney For IRS Use Only (Ptease type or print) Taxpayer(s) name(s) City of Carlsbad Public Improvement Corporation Taxpayer identification number applied for File So. (Ptease type or print) Taxpayer(s) name(s) City of Carlsbad Public Improvement Corporation Taxpayer identification number applied for Level (Ptease type or print) Taxpayer(s) name(s) City of Carlsbad Public Improvement Corporation Taxpayer identification number applied for Receipt (Ptease type or print) Address (number and street) 1200 Elm Avenue Plan number (if applicable) n/a Powers (Ptease type or print) Address (number and street) 1200 Elm Avenue Plan number (if applicable) n/a Blind T. (Ptease type or print) City, state, and ZIP code Carlsbad, CA 92008 Telephone number (619) 434-2808 Action (Ptease type or print) City, state, and ZIP code Carlsbad, CA 92008 Telephone number (619) 434-2808 Ret. Ind. hereby appoint(s) the following individual(s)* Name William H. Madison'• CAP Number Address Telephone Number n/a c/o Jones Hall Hill & White (415) 391-5780 4 Embarcadero, Suite 1950 San Francisco, CA 94111 as attorney(s)-in-fact to represent the taxpayer(s) before any office of the Internal Revenue Service for the following tax matter(s) (specify the type(s) of tax and year(s) or period(s) (date of death if estate tax)): Type of tax (Individual, corporate, etc.) Federal tax form number (1040,1120, etc.) year(s) or period(s) (Date of death if estate tax) Corporate 1024 Application for Recognition of Exemption The attorney(s)-in-fact (or either of them) are authorized, subject to revocation, to receive confidential information and to perform any and all acts that the principal(s) can perform with respect to the above specified tax matters (excluding the power to receive refund checks and the power to sign the return, unless specifically granted below). See Regulations section 1.6012-1(a)(5) for information on returns made by agents. (List excludable powers below. Indicate if you are granting the power to sign the return.) • Send originals of all notices and all other written communications in proceedings involving the above tax matters to the appointee first named above, and a duplicate copy of all notices and all other written communications to the taxpayer named above, or Q Send copies of all notices and all other written communications addressed to the taxpayer(s) in proceedings involving the above tax matters to: 1 [xl the appointee first named above, or 2 • (names of not more than two of the appointees named above) Initial here • if you are granting the power to receive, but not to endorse or cash, refund checks for the above tax matters to: 3 • the appointee first named above, or 4 • (nameof one of the above designated appointees) • This power of attorney revokes all earlier powers of attorney and tax information authorizations on file with the Internal Revenue Sen/ice for the same tax matters and years or periods covered by this power of attorney, except the following: (Specify to whom granted, date, and address including ZIP code, or refer to attached copies of earlier powers and authorizations.) Signature of or for taxpayer(s) (If signed by a corporate officer, partner, or fiduciary on behalf of the taxpayer, I certify that I have the authority to execute this power of attorney on behalf of the taxpayer.) ... dh^.. ^CUI^C^rU^^ .A] e tha LRau ten kr anz, Secretary yj, r^7r.^. (Signature) J (Title, if applicable) (Date) IW if signing for a taxpay^who is (Also type or print your name below if signing for a taxpaye > is not an individual.) (Signature) (Title, if applicable) (Date) * You may authorize an organization, firm, or partnership to receive confidential information, but your representative must be an individual who must complete Part II. For Privacy Act and Paperwork Reduction Act Notices, see page 1 of the separate instructions. Form 2848 (Rev. 2-88) Form 2848 (Rev. 2-88) Page 2 If the power of attorney is granted to a person other than an attorney, certified public accountant, enrolled agent, or enrolled actuary, the taxpayer(s) signature must be witnessed or notarized below. (Jhe representative must complete Part II. List representatives there only if they are recognized to practice before the Internal Revenue Service.) The person(s) signing as or for the taxpayer(s): (Check and complete one.) D is/are known to and signed in the presence of the two disinterested witnesses whose signatures appear here: (Signature of Witness) (Date) (Signature of Witness) (Date) appeared this day before a notary public and acknowledged this power of attorney as a volunta jf*a(^^^5ee(f.**omc*^i,*seA^^ - I^UNDTZ t ( / , X , ^ / y X KfJHtf NOTARr PUBUC-CAUFORNIA J /o/^/oI^ % ^SSBS/ W0TOHMLC8BWY * (Si^ature OfNotary) ' (Date) Witness:. a a a** 189 Part II Declaration of Representative I declare that I am not currently under suspension or disbarment from practice before the Internal Revenue Service; that I am aware of Treasury Department Circular No. 230 (31 CFR, Part 10), as amended, regulations governing the practice of attorneys, certified public accountants, enrolled agents, enrolled actuaries, and others; and that I am one ofthe following: a a member in good standing of the bar of the highest court of the jurisdiction shown below; b duly qualified to practice as a certified public accountant in the jurisdiction shown below; c enrolled as an agent under the requirements of Treasury Department Circular No. 230; d a bona fide officer of the taxpayer organization; e a full-time employee of the taxpayer; f a member of the taxpayer's immediate family (spouse, parent, child, brother or sister); g a fiduciary for the taxpayer; h an enrolled actuary (the authority of an enrolled actuary to practice before the Service is limited by section lG.3(d)(l) of Treasury Department Circular No. 230); i Commissioner's special authorization (see instructions for Part II, item i) and that I am authorized to represent the taxpayer identified in Part I for the tax matters specified there. Designation (insert appropriate letter from above list) Jurisdiction (state, etc.) or Enrollment Card Number Signature Date California William H. Madison * U.S.Q.P.O.: 1988 - 205-390/79274 i-B-a'"^ CALIFORNIA ^•FNCHISE TAX BOARD BOX 651 SACRAMENTO, CA 958*i2-0651 December 19, 1988 In reply refer to 3M«4:APP:RB!rk:g City of Carlsbad Public Improvement Corporation Attention: Aletha 1. Rautenkranz c/o City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008 Purpose Code Section Form of Organization Accounting Period Ending Organization Number Public Facility Finance 23701m Corporation June 30 1502951 You are exempt from state franchise or income tax under the section of the Revenue and Taxation Code indicated above. This decision is based on your stated purposes and with the understanding that your present operations will continue or uill be as proposed in your application. Any changes in operation, character, or urposes must be reported to this office immediately for consideration f their effect upon your exempt status. You must also report any hange in name or address. You may be required to file Form 199 (Exempt Organisation Annual Information Return) on or before the 15th day of the Sth month («4 1/2 months) after the close of your accounting period. Please see annual instructions with forms for requirements. You are not required to file state franchise or incoae tax returns unless you have income subject to the unrelated business income tax under Section 23731 of the Code. In this event, you are required to file Form 109 (Exempt Organization Business Income Tax Return) by the ISth day of the Sth month («* 1/2 months) after the close of your annual acounting period. Please note that an exemption from federal income or other taxes and other state taxes requires separate applications. Exempt Organization Unit Telephone (800) 852-5711 Enc . cc: Registrar of Charitable Trusts TB M207A-ATS (New 7/88) 81658 Internal Revenue Service ^ District Director P 0 BOX 2350 ROOM 5127 ATTN: E.G. LOS ANGELES, CA 900532350 Date: JAN. 26, 1989 CITY OF CARLSBAD PUBLIC IMPROVEMENT C/O HILLIAM H MADISON C/O JONES HALL HILL & WHITE 4 EMBARCADERO STE 1950 SAN FRANCISCO, CA 94111 ^j^epartment of the Treasury Employer Identification Numben 95-6004793 S'i'OdTjO^in Case Number: 958307076 Contact Person: TYRONE THOMAS Contact Telephone Number: (213) 725-6753 Internal Revenue Code Sect ion 501(c) (4) Accounting Period Ending: June 30 Form 990 Required: Yes Caveat AppIies: Yes Dear AppIicant: Based on information supplied, and assuming your operations Mill be as stated in your application for recognition of exemption, we have determined you are exempt from Federal income tax under the provisions of the Internal Revenue Code section indicated above. Unless specifically excepted, you are liable for taxes under the Federal Insurance Contributions Act (social security taxes) for each employee to whom you pay $100 or more during a calendar year. And, unless excepted, you are also liable for tax under the Federal Unemployment Tax Act for each employee to Hhom you pay $50 or more during a calendar quarter if, during the current or preceding calendar year, you had one or nore employees at any time in each of 20 calendar weeks or you paid wages of $1,500 or more in any calendar quarter. If you have any questions about excise, employment or other Federal taxes, please address them to this office. If your purposes, character, or method of operation change, please let us know so we can consider the effect of the change on your exempt status. Also, you should inform us of all changes in your name and address. The heading of this letter indicates whether you must file Form 990, Return of Organization Exempt from Income Tax. If Yes is indicated, you are only required to file Form 990 if your gross receipts each year are normally more than $25,000. If a return is required, it must be filed by the 15th day of the fifth month after the end of your annual accounting period. The law provides for a penalty of $10 a day, up to a maximum of $5,000, when a return is filed late, unless there is reasonable cause for the delay. This penalty may also be charged if a return is not complete. So please make sure your return is complete before you file it. You are not required to file Federal income tax returns unless you are subject to the tax on unrelated business income under section 511 of the letter 948(CG) -2- CITY OF CARLSBAD PUBLIC IMPROVEMENT Internal Revenue Code. If you are subject to this tax, you must file an income tax return on Form 990-T, Exempt Organization Business Income Tax Return. In this letter we are not determining whether any of your present or proposed activities are unrelated trade or business as defined m Code section 513. You need an employer identification number even if you have no employees. If an employer identification number was not entered on your application, a number will be assigned to you and you wjN be advised of it. Please use that number on all returns you fiie and in all correspondence with the Internal Revenue Service. Because this letter could help resolve any questions about your exempt status, you should keep it in your permanent records. If the heading of this letter indicates that a caveat applies, the caveat below or on the enclosure is an integral part of this letter. If you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter. Sincerely yours. Frederick C. Nielsen District Director Letter 948(CG) -3- CITY OF CARLSBAD PUBLIC IMPROVEMENT Because you are not an organization described in section 170(c) of the Code, donors may not deduct contributions to you. You should advise your contributors to that effect. Letter 948(CG)