HomeMy WebLinkAbout7 Water System Improvements Agenda Item # 7
TRUCKEE DONNER
Public
District_
Memorandum
To: Board of Directors
From: Mary Chapman
Date: April 13, 2001
Subject: Consideration of approval of a loan from Municipal Services Group
for funding of water system improvements
At the last board meeting, the Board authorized staff to pursue the financing of the
construction of the Martis Valley well and pipeline project with Municipal Services Group.
Attached are the loan documents that need to be approved to finalize this transaction.
Steve Gross will be prepared to discuss the loan documents at the meeting.
RECOMMENDATION:
1. To approve the attached resolution entitled Approving Agreement to
Finance the Construction of the Martis Valley Well and Pipeline.
2. Authorize the Board President and the Treasurer to execute the loan
documents after approval of the documents by legal counsel.
Agreement No.1509
MUNICIPAL PROJECT LEASE AND OPTION AGREEMENT
Lessor: Municipal Services Group,Inc.
5125 South Kipling Parkway
Suite 300
Littleton,CO 80127
Lessee: Truckee Donner Public Utility District
P.O.Box 309
Truckee,CA 96160
This Municipal Project Lease and Option Agreement(the"Agreement")is entered into between Municipal Services Group,Inc.(together with any assignee
thereof collectively referred to herein as the"Lessor"),and the Truckee Donner Public Utility District("Lessee"),a special district duly organized and existing under
the laws of the state of California(the"State").
WITNESSETH:
WHEREAS,Lessee desires to finance the construction of the Project(as defined herein)pursuant to the terms of this Agreement;and
WHEREAS,Lessor desires to lease the Project to Lessee,and Lessee desires to lease the Project fromLessor,subject to the terms and conditions of and for
the purposes set forth in this Agreement;and
WHEREAS, Lessor, simultaneously with the execution and delivery of this Agreement, may enter into an escrow agreement(the "Escrow Agreement")
with an escrow agent designated by Lessor(the"Escrow Agent")whereby Lessor,or its assignee, if any,shall deposit monies sufficient to finance the Project to be
leased hereunder;and
WHEREAS,Lessee is authorized under the Constitution and laws of the State to enter into this Agreement for the purposes set forth herein;
NOW,THEREFORE,for and in consideration of the premises hereinafter contained,the parties hereby agree as follows:
ARTICLE
COVENANTS OF LESSEE
Lessee represents,covenants and warrants,for the benefit of Lessor and its assignees,as follows:
(a) Lessee is a municipality duly organized and existing under the Constitution and laws of the State.
(b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic.
(c) Lessee is authorized under the Constitution and laws of the State to enter into this Agreement, the Ground Lease betweerd,essor(as Ground
Lessee thereunder)and Lessee(as Ground Lessor thereunder)and the transaction contemplated hereby,and to perform all of its obligations hereunder and thereunder.
(d) Lessee has been duly authorized to execute and deliver this Agreement and the Ground Lease under the terms and provisions of the ordinance or
resolution of its governing body,attached hereto as Exhibit A,and by other appropriate official approval,and further represents and warrants that all requirements have
been met, and procedures have occurred in order to insure the enforceability of this Agreement and the Ground Lease, and Lessee has complied with such public
bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Project hereunder. Lessee shall cause to be executed an opinion of
its counsel substantially in the form attached hereto as Exhibit B.
(a) During the term Df this Agreement, the Project will be used by Lessee only for the purpose of performing one or more governmental or
proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any person or entity other than
Lessee.
(t) The lease of the Project hereunder shall be evidenced by the Agreement,Exhibits and Ground Lease executed byLessor and Lessee describing
specific real property,and setting forth provisions relating to the rent,the term of lease,disposition of Project upon the expiration of the Lease Term(as defined below)
and other details with respect to it. The lease of the Project shall become effective on the Accrual Date,as defined below,and the Payment Schedule for the Project
shall specify such date as the effective date of the lease. The Lease Term shall commence on the Accrual Date as indicated therein and shall terminate as specified in
Section 4.03 hereof.
(g) During the period this Agreement is in force, Lessee will annually provide, if requested byLessor, current financial statements, budgets, and
such other financial information relating to the ability of Lessee to continue this Agreement as may be reasonably requested by Lessor or its assignee.
(h) The Project under this Agreement will have a useful life in the hands of Lessee that is substantially in excess of the Lease Term.
(i) The Project and the use thereof are in compliance with, and Lessee will maintain the condition of the Project so that it shall remain in
compliance with,all applicable laws,statutes,ordinances,rates and regulations of any governmental or quasi-governmental authority,specifically including without
limitation the Resource Conservation and Recovery Act and the Comprehensive Environmental Response,Compensation and Liability Act,both as amended,and all
other environmental protection or toxic waste or hazardous substance handling,treatment,storage or disposal laws,statutes,ordinances,rules and regulations.
«greemen( � r aYm
Cuts, nor hal/sLr, am,a edO nbract
Lessee's obligation to me ,Irn
sclut
Section 7.Ot sse
ARTICLE e Rental Pa a Y right of'°
4 required n
d On Unit,, Ii
instruments, in form satisf PP
n iti
ury.
Iie�or In all
ndc
°nal
additons,attachments,accession tC�soo(- `est Lessee as Leas.Eaoto INTEREST Yments during the Lea, — Ct offh or
accessions,and sobs' which Lessor des Tees to exe T Term shalt
on the Section 7.p2. 'Ions
there deem necess outs such
respect Project or the to
Ciens to,and upon as
sign
or appropriate currenout
nts' includi
sunants ooeupyProjCCt orothe rpe nor execttteEoCumbrances to Tg thitle, gnment the interest opblish and maintaincing statements
s, aird
ld
rvive the ferm"at
anon of 6 s A M.
ntSi e Promp y o empty d Schargre n or IeDaseoau esase Terrn j.esse s oLessor,in its l tlfe project.is ssd rn and to the pro S and similar
the
charge an any mech nt or other C shall not Project and in all u
Y such lie arisang'ormaterialmeg meat gran Place or Permit tt;
II
Ic
IAA"TEN A$TICLESout of such use orl occuplancy ooe obliged r p Jpct s tUs,
and hbo ssion title m`
rose maimon 8.01, n p
ined cc to
Alainteat
e4rwi e be ag all cause any
and to dome Pre Performed
d I n such a W way so n ect b Less SURgN AM1D OTUER C O.N,•TAXES; Less"
under this Section shall 0 or
neither keep
TAXES
of c
sided,howev Le to In ES d
Lessor nor an the ProJect' alre aft n c Lessee a n uc
er,ofrequired 6YLessor, Y of iI,asi tr gopit,pair, sssary and pro grees that at all times rule c
Sec[i Lessee will gnees shall Work' Proper Order Per repairs m s duryn
wn cost an
°tnen[a(or pro_02. T entsr imo s4ch maintenponsibilityri andConditio¢sTo en ents and ree Wye Term,at e' due tY and fro,in,USm all My pursales,uspos ayes,Off t)ther Dove arcs or Y of thes extent ne s°f Less, s o
-essee
Mal Ch
the
isions roject as May
�e 6 tt of swfully assesses rsW 1l p YXdue and,th�re�re thaaz Cs o d frill mar sgs ant contra is furrthe Pro eMLessov�f.mp ovmen ree mood xs to rims �ii`d the date
a see taxes the Ch
or a
Lea',T
o ee°Pero.I Ictntdn rtmpro Improvement t o With resPecidt asathesafne 1 session e use o Pa m a!!taxes Present,is reemsnt Contemshall le'to th- requirs is or additions to the Project,
poet,it, rit
Over,period of en or addition to t°the Pm. 9uisition of y asses Plate that t
Ject and an"Vely come Years,Lessee se °el the Project; airy equipment ore all taxes and is fo4 d roe levied wdC rPrgect will be used Y
.Section 8.03, may e/ toy and upkeep of as well as o gov ub' Pect for
rtractor's gene Prover, pay only such Installmentsthe Project provill gas, wated th r, sorer Property acquiredmental ehargesect[o taxation in PC
namal or real
III Re
ny form
'ssor ct subsn cc i and b Udders
d b ek if asurramcc., have accrued du,g respect
h p ct In any govern
o emrn�twa��sccPhob uNii n for,as never er that in(except0 any kind what, iceptance of
es
abi
time th
Prov
vid in
its asi Protect the Full d upon act4 and grope own expense, IS Agreement is' charges that Utility I'd other m.cc '
unible
crit,,, Mace to be cause MI;
ee shall this Agrsement. Le addition,,
ee r6 arrUm d Insured and me d here-matter
are °ns sro,ed Maintained bus'rne sound I,, age be, essm shall ffss tinterru may lawf4llY be paid,� rhich shall be
notifyl,essish or C Loss ed 'dtrll r shal PtimonIo
cd„F4111nsurable Valuedtin five(5)business da➢s ofan➢�vs evidencing such Cov e All PI Bryn eecct, d sto PrOfebsso his te r emancl Ind satisfaction the Public
If it
ut
man
y St
arra
v The Net Proceeuant t°thus Sectionn shall mean the fuq rep/ae 03 m ngvto or destnrction ofthre Pr os tus L Termm casualty losses so In
p Y life
ts and
_Ca oft"",
Les m this Section gefrned in Se Uon shall be so wr. aloe of the project but sor without fi 03 shall con 9.01)of the. Iten or endorsed In no event
14 rs[giving Written Contain a Provision Insurance ed as to less than the[ten notiAdv cc ce sion to the requireeffect thd in akdosses, , then applicable
ce
r Ind
at the
'efmadesuch n dition,Less In the eventthereofLess tol,ess0faz(east 30 days uurance SectCOmPany sh l be applied asesee and Lesso Purchase Price. tes Control Act,
ee shall
Pairs or
case Term,which amoOn tog, C may, (but shall 6e under fail to maintain advance of
cancellathi not cancel the Policy or mo in de e 9 their
spective roman health or the
Baer are no Old-uch old T Covenants, to with interest areo aProvjdel for to)Purcht the Payment bi asC uthranes coverage fequire Modify it materially I'd
d or will
id�uc activih ofhern ty°us,will thiarb n eebeDd Ww1 Ot rooks dirsct u of 72%Perannuftt�d all
required
Policies of��r nce agitred PaY the Cut or shall fail tpremiumso kee C amended,modified
nd" or esseany US o adrec,to pay. v
�nt
at,
Uch
On
rocce
only for e o 6�nutrient azthe h I gmrem t Ls suchon �the Code.o the Code to bee obligation prry CCdherefor by Cesso hall beCome a :d or identified in, or
caul
oth
federally
nyls
of reportin U. Ca le an . Ode scutin
atInd Crum Or
11
)rod
than
essee
en e It F
ug of Se of 14leon a btarhr C�one o9 ts mSun the mm goemI'd n�o l as d dar6 Ito the thegula�ios Ofthe➢Unen�nat " ars is within
conga dosr ands Of sci on ital duuc d lig�nc'e�eany
[poses 4 Sec�6I of ode ' fro generame Pr 4uire um income
p[cableStates De me Lessee
S(s)and Lessee [ton 103 of Code. manner or to such Leewith
seefctey IIIwi o nefens oFLes0 the
ed ited Statesant
to Sect.em(f)ofe Trea cry
ll
nt a,
hi
the pro.
Mes do and perform all acts
em
bed
cal Payments wi(lanot be Would
Included in the Bros come o d things p rmittedut d resul[o the in,Use Ofelus on o interest received phrs used
in Pa�e Y and allradditions rand
or
or forfede by law whi under in gross ment ands }cal ucome tag mishings will
ch are necessary, i
Purposes. ary,or desirable in ord F
"Rental Payments"mea, er to assure that in consideration of the right of Lessee to use the Project eu,,,, It Exhibit E hereto.
a _
and at the times during the Lease Term as set forth in the Exhibit_E made a part or
ing the Lease Terrn,payable
its assignee in the amounts
oil
elt
ids
Section? .,..s agreement t'LesPe4 obl, nornh IlsL-ani vendor/C n��°I°mand un9Qired under this
inst ,pl n to ass. actor, or
additionsnana ttm°entssacceaetoty to '�C�°1d Interest LC LEASEHOLD LE make Rental Paym ntany ddariht f w,hhoU.PPlt/ding any aother
l In l]
ssio Less w sse, Nf ring t ' set-
'at" ns,on Section 702 and which Les c agrIf F do in ees EREST e Lease tf or
respect Project
or to Pt Liens
substitutions thercro a d uponnecessaaryexe aPFtUch documents Penn sryafi
C as
not
an PY nrolect e Prd.nor a U,Pncumb Cs to assigntne, P�ttonest °s[ h icute
onic
ng fithreat,
ten Ls oce or exe rare the a tO ablis ndi r
mamun
Us
as
oel Site
r x
in
t, Cuts
hall
chOhl
survive the
term ination oftryis ggreP o vits not.
nt Si ter°tmP ly Ices
P dmPSYrdischarge'to anor y�ar•+ngasemen pl Tenn,Ge'so oh C sor�inithae PmJe nteres�t. in and to the Pro Project similar
rar
go
MY
such
,on
e hanics�Orma other agreCmC ail not place pr Jet and in all
par
aig a,
d any liens Or
aced
use ntection 8. ryLA T A: ART arL ng out of suchluse oil°curanc.tCrh ob/iga ct Or Project m evseor oncumb,ni es o title jd o
to .tit.led ante 0/. E,ti' IV IC E 8 on of and shallssi n with I
to nod
Perfume
ny
did ise bedagreed tame Preserved n such a anceWa Pro ject b �� SURANCE AND p 11ER N•TA.CES; Lessee under this secttion shall ring
°�howevCr orre neither Lessor noreCP the project so s to make alf Lessee GOES any
d repair W Cssary and
ee,that
ssor
�fromid OrSect pa
8 02,quired by,•ssor,Lessee Wiany Of ll e s gnnt�all have respe gbo deeraper dirtied C o'arePtaceme t all times �rtng the Lease Tc Rental
with
v and from prop'. Pu axes Other min
ry in an n. TO and n;ne arm at
an Y of the wal Les Cot
all sa/e +Pose of Go�an
c.Or these •..teat sof sees
me tares s,use Lease an ma of the own c
Of LessO ... mU W Ch es agemt con fters,orfor the Pmvisio Project as tilt antlne tie lawful/ rI.Lessee ssicssed w ar•xcis ,that and Utili tracts Forthep th.makig ns othis q maY from tit,•rPCnse,to
att of Ply duriOg.
Will
Prove
Cravat ad
uthoperahond'fiCari ff. o, improd aga nst°with r eL�uTermt asathue use,Posse 5 o emPt fr.m all t0 this ggrroJec[asLessoeshalI IMIq n�°r additions s the to ring may ring the
:s°vera Period o yeain t�enance, us e occU ent Cr addin Cs�e�t the JedSPectiv ygcuisition d1e presently taxes Cnt emP/ate that the �oJect; with and
remaining
f e, oan a Pro' of of assessed
�•ciion 8.03. Lessee maY elect t Pa and Upkeep o oar
ther as well as�e4U1Pmeat or nt all
tax es and er at is found be vern levied wit r"s Cot will be usubject to tax Pect to per, ed f
gas
Yeet
Water
�jgu 'nsotranr ryandtbmild ardk ifnuranl.such insra//Cris as havea NedtWihsrespect ree�'ty, has Po Les,,i an dteam Crty UCq final chat mired b t9es Ofowhatsbe��n /except
o
sso
anent VI ed b
app
td r dJble At
Or i assignee iCtt the Full hisxed oPon aic aarimand pro
$'dam own expense,filing the time this any
mmental char Ph nte, utility for o a renewal that may Project in
ed' this Agree as addition Urable Val s°und atnage irzex L, s me s rn C. gel at maY lawfully Cher chargeOr ie Pro
•shall ,tent Lessee shall named insured ne(as that teen iUra<ICc Criteria asnCC to be Cartjeall cause rend firryY be Paid in
notify Lessor wi FUmtsh toLessor Ceas a Lender Los madcr deft Payen dep°sistent wi dmaimained,o or�UsmUss interru t lent in Section
all do
m"Full lnsu able Value ices uIransedn rlv' sa 6ustne�days ofanY evt n of•video i,g such cover 8r.th of insueanc�p to protec insu ante o t thend casualtyce riot
sail
or
Ce
The Policy
t Pro u�uant to this herein shall mean the dial/ 1 damage to or destnrc[ion o f ughout the L aee'r fir m casualty lotah if Witty asses ay in allteyenta and
qd.d for in this Cents(as dSectio efine echo 03 sh rcP a..rn. slue to Pro' be as
n8 in S . ,tv J. Payable
st ofLessor without first gi�ng all ordain a p�y°theInsurance n r endorsed as t e Prefect but in no event le Malad ss t
an
en
In
'rnadei h tlition, I^etheeVemtereoftls' tLesso required
3 he nuthis
ctomm8.03 hat/be payable to retPPlied a, ard pPlieable Purchase PricC_ aims of any kind
�e Term,which 1rs or"Plto mCr may(but sse,shall f8i)t tdtn days in advance of half of can Provided r�ssor as 9 respective
heir
am Coin tits as band train •cent, Cel the Articl P•ctiv
gether wl mreeeessary and no Obligation tie hill/,saran atlon. Y or modify'it hereof Each
Taxis ovenants. Le t 1est thereon stile ra ale for pa entmt(Cte�et•9ui etage required materially and ring the Lease Tom,
-h ob(igavio
Private t bean"arbila sse,Will not ofl2 or re0F and ail While'ofi by to Agree :Cement,
suchactivtY bond„ ge bond, make annII amour nsurane 'rent or
It that Other
such fonds,will ithin the thin the Mean. at Treat any use o Lessee agrees to so advancedhC and paY the shall fail to keep
dY foills on
r
to be Completedem are'or require /t It. requirements ocoition q g!a)f the Ccc on o48 tithe CodC,ls of try.obfigattaY refor by Lessor shawl become C +pose of inspecting the
the Pu aII re aPPlic Fsuch C `t To to be° n Prr.
°titer thanLsse, °pPCffo�Potting regvtre able and In a ode sections tat end,so/,a•derally guarantd.d herein or
'g of Section 14] on a base di. One or more•tits andmbOVm affea/1 FUmtermore�O all
regu/ationss of s any Rents(pad Within the Me Other funds of
Cuts
TUses ceder Secti(ba , ruled are Ing ors
l03 ofthe Codeuch mangne oral PubdlliilcoLPC PPnetaty to i�s come to then UnitPu Pursuant tlnpcPam nPa Unpaid,
sseecwith g
on m g m ableStates 3 that the obligation of
will
OrLessee
rates
48
not so
Toaffintry
it Payments will not be inctdedo and perform o such extent as would result in the the UaSo n of e roj ct wj n bel Lessee'Oven d e lies from its Airport Fund
al/ and inclusion Of. Ject y an used a l
on 6 m cede to event of assignment by
to to gross incomets rhtugs Pe interest received rsOn fora"Private t receive Rental Payments
tt. hereundef m gr he applicable unpaid Rental
Which e
of-essor for fed al income tax pu�O e necessary or desirable
€Of, Intel'-, _
component and the principal�.,...r_ suable in order to
assure tat as,and represents payment
thereto sets forth the interest
Section 6,04. Rental Payments to be Unconditional. The obligations of Lessee to make payment of the Rental Payments required under this
Article 6 and other sections of this Agreement,and to perform and observe the covenants and agreements contained herein,shall be absolute and unconditional in all
events, except as expressly provided under this Agreement. Notwithstanding any dispute between Lessee and.essor, any Vendor/Contractor,supplier, or any other
Person, Lessee shall make all Rental Payments when due and shall not withhold any Rental Payments,nor shall Lessee assert any right of withholding, set-off or
counterclaim against its obligation to make such payments required under this Agreement. Lessee's obligation to make Rental Payments during the Lease Term shall
not be abated through accident or unforeseen circumstances.
ARTICLE
LEASEHOLD INTEREST
Section 7.01, Leasehold Interest, Lessee agrees to execute such documents, including financing statements, deeds, afflavits, notices and similar
instruments, in form satisfactory to Lessor,which Lessor deems necessary or appropriate to establish and maintain its leasehold interest in and to the Project and in all
additions,attachments,accessions,and substitutions thereto,and upon assignment,the interest of any assignees oLessor,in the Project,
Section 7,02. Liens and Encumbrances to Title During the Lease Term,Lessee shall not place or permit any liens or encumbrances to title
on the Project or the Project Site nor execute any lease,sublease,extension or lease,easement or other agreement granting any right of occupancy,use or possession with
respect to the Project or the Project Site. Lessee shall promptly discharge any mechanics'ormaterialmen's liens placed on the Project or Project Site and shall cause any
tenants occupying the Project or Project Site promptly to discharge any such lien arising out of such use or occupancy. The obligation of Lessee under this Section shall
survive the termination of this Agreement.
ARTICLE 8
MAINTENANCE;MODIFICATION;TARES;
INSURANCE AND OTHER CHARGES
Section 8.01, Maintenance of Project by Lessee. Lessee agrees that at all times during the Lease Term,at Lessee's own cost and expense,to
cause maintenance to be performed in such a way so as to make all necessary and proper repairs,replacements and renewals of the Project as may from time to time be
required and to maintain,preserve and keep the Project in good repair,working order and condition. To the extent of the provisions of this Agreement and except as may
otherwise be agreed to,neither Lessor nor any of its assignees shall have responsibility in any of these matters,or for the making of improvements or additions to the Project;
provided,however,if required by Lessor,Lessee will enter into such maintenance or management contracts for the Project asLessor shall require.
Section 8.02. Taxes,Other Governmental Charges and Utility Charges. The parties to this Agreement contemplate that the Project will be used for a
governmental or proprietary purpose of Lessee and,therefore,that the Project will be exempt from all taxes presently assessed and levied with respect to personal or real
property and from all sales,use or similar excise taxes. In the event that the use,possession or acquisition of the Project is found to be subject to taxation in any form(except
for income taxes of Lessor),Lessee will pay during the Lease Term,as the same respectively come due,all taxes and governmental charges of any kind whatsoever that may
at any time be lawfully assessed or levied against or with respect to the Project and any equipment or other property acquired by Lessee in substitution for,as a renewal or
replacement of,or a modification, improvement or addition to the Project; as well as all gas,water,steam,electricity, heat,power,telephone, utility and other charges
incurred in the operation,maintenance,use,occupancy and upkeep of the Project;provided that,with respect to any governmental charges that may lawfully be paid in
installments over a period of years,Lessee may elect to pay only such installments as have seemed during the time this Agreement is in effect.
Section 8.03. Provisions Regarding Insurance. At its own expense, Lessee shall cause rental or business interruption, casualty, public
liability,contmctots general liability and builders risk,if applicable,and property damage insurance to be carried and maintained,or shall demonstrate to the satisfaction of
Lessor that adequate self-insurance is provided based upon actuarial sound insurance criteria as are consistent with generally accepted insurance industry standards with
respect to the Project,sufficient to protect the Full Insurable Value(as that term is hereinafter defined)of the Project,and to protectessor from liability in all events and
which name Lessor and/or its assignee as additional named insured and as a Lender Loss Payeethereunder. All insurance proceeds from casualty losses shall be payable m
hereinafter provided in this Agreement. Lessee shall famish toLessor Certificates evidencing such coverage throughout the Lease Term.
Lessee shall notify Lessor within five(5)business days of any event of damage to or destruction of the Project
The term"Full Insurable Value"mused herein shall mean the full replacement value of the Project but in no event less than the then applicable Purchase Price.
Any insurance policy pursuant to this Section 8.03 shall be so written or endorsed m to mak losses, if any,payable to Lessee and Lessor as their respective
interests may appear. The Net Proceeds(as defined in Section 9.01)of the insurance required in this Section 8.03 shall be applied as provided in Article 9 hereof. Each
insurance policy provided for in this Section 8.03 shall contain a provision to the effect that the insurance company shall not cancel the policy or modify it materially and
adversely to the interest ofLessor withoutfirst giving written notice thereof toLessor at least 30 days in advance of such cancellation.
Section 8,04, Advances. In the event Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep
the Project in good repair and operating condition,Lessor may(but shall be under no obligation to)purchase the required policies of insurance and pay the premiums on the
same or may cause to be made such repairs or replacements as are necessary and provide for payment thereof;and all amounts so advancedherefor by Lessor shall become
additional rent for the Lease Tenn,which amounts,together with interest thereon at the rate of 12%per annum,Lessee agrees to pay.
Section 8.05. Tax Covenants. Lessee will not make or direct any use of the proceeds of the obligation presided herein or any other funds of
Lessee which will cause such obligation to be an"arbitrage bond"within the meaning of Section 148 of the Code,to be"federally guaranteed"within the meaning of Section
149 of the Code,or to be a"private activity bond"within the meaning of Section 141 (a)of the Code. To that end,so long as any Rental Payments are unpaid,Lessee,with
respect to such proceeds and such other funds,will comply with all requirements of such Code sections and all regulations of the United States Department of the Treasury
issued thereunder to the extent that such requirements are,at the time,applicable and in effect. Furthermore,to the extent applicable pursuant to Section 148(f)of the Code,
Lessee covenants to complete or cause to be completed all reporting requirements and rebate all required arbitrage income to the United States of America. Lessee covenants
that the Project will be used only for the purpose of performing one or more governmental or proprietary functions of Lessee,and the Project will not be used in a trade or
business of any person or entity other than Lessee on a basis different from the general public. Lessee will not use or pennant the use of the Project by any person for a"private
business use"within the meaning of Section 141 (b)of the Code in such manner or to such extent as would result in the inclusion of interest received hereunder in gross
income for federal income tax purposes under Section 103 of the Code.
Lessor or its assignee(s)and Lessee shall at all times do and perform all acts and things permitted by law which are necessary or desirable in order to assure that
the interest component of the Rental Payments will not be included in the gross income oLessor for federal income tax purposes.
ARTICLE 9
DAMAGE,DESTRUCTION AND CONDEMNATION:
USE OF NET PROCEEDS
Section 9.01, Damage Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Project by making payment of
die Purchase Price as provided herein,if prior to the termination of the Lease Term(a)the Project or any portion thereof is destroyed(in whole or in part)or is damaged by
fire or other casualty or(b) title to, or the temporary use of, the Project or any part thereof shall be taken under the exercise of the power of eminent domain by any
governmental body or by any person, firm or corporation acting under governmental authority, Lessee andessor will cause the Net Proceeds(as defined below)of any
insurance claim or condemnation awarded to be applied to the prompt repair, restoration, modification or improvement of the Project. Any balance of the Net Proceeds
remaining after such work has been completed shall be paid to Lessee.
For purposes of Section 8.03 and this Article 9, the term"Net Proceeds"shall mean the amount remaining from the gross proceeds of any insurance claim or
condemnation award after deducting all expenses(including attorneys'fees)incurred in the collection of such claim or award.
Section 9.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or
improvement referred to in Section 9.01 hereof,Lessee shall either(a)complete the repair or replacement of damaged property and pay any costs in excess of the amount of
Net Proceeds or(b)pay to Lessor the amount of the applicable Purchase Price,applying Net Proceeds to such payment
ARTICLE 10
DISCLAIMER OF WARRANTIES;VENDOR'S/CONTRACTOR'S
WARRANTIES;USE OF THE PROJECT
Section 10,01. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT THE PROJECT IS IN GOOD ORDER AND CONDITION
AND IS OF THE MANUFACTURE,DESIGN AND CAPACITY SELECTED BY LESSEE,THAT LESSEE IS SATISFIED THAT THE SAME IS SUITABLE FOR ITS
PURPOSE,AND THAT FOR PURPOSES OF THIS AGREEMENT LESSOR AND ITS ASSIGNEE(S)MAKE NO WARRANTY OR REPRESENTATION,EITHER
EXPRESS OR IMPLIED WITH RESPECT TO THE PROJECT, INCLUDING WITHOUT LIMITATION, ITS VALUE, DESIGN, CAPACITY, CONDITION,
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS INTENDED FOR USE OF THE PROJECT,OR WARRANTY WITH RESPECT
THERETO,AND LESSOR AND ITS ASSIGNEE(S)HEREBY DISCLAIM ALL SUCH REPRESENTATIONS AND WARRANTIES. In no event shall Lessor or its
assignee,if any,be liable for any incidental,direct,indirect,special or consequential damage in connection with or arising out of this Agreement or the existence,furnishing,
functioning or Lessee's use of any item,building,improvement,equipment,furnishings,or products or services provided for in this Agreement.
Section 10.02. Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Tern,so long as Lessee
shall not be in Default hereunder,to assert from time to time whatever claims and rights,including warranties of the Project,whichLessor may have against the supplier,
Contractor,or Vendor of the Project Lessee's sole remedy for the breach of such warranty,indemnification or representation shall be against the supplier,Contractor or
Vendor of the Project,and not againstLessor or an assignee,if any,ofLessor,nor shall such matter have any effect whatsoever on the rights and obligations ofLessor with
respect to this Agreement,including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that an assignee,if any,oEessor makes,and
has made,no representation or warranties whatsoever as to the existence or availability of such warranties of the Project.
Section 10.03. Use of the Project Lessee will not construct install, use, operate or maintain the Project or cause the Project to be constructed,
installed,used,operated or maintained improperly,carelessly,in violation of any applicable law or in a manner contrary to that contemplated by this Agreement Lessee
shall provide or cause to be provided all permits and licenses,if any,necessary for the operation of the Project;provided,however,that Lessee may contest in good faith the
validity or application of any such law or rule in any reasonable manner which does not,in the opinion of Lessor,adversely affect the estate of Lessor in and to the Project or
its interest or rights under this Agreement.
Lessee shall notify Lessor within five(5)business days of receipt of actual or constructive notice if there are any claims or lawsuits arising in connection with the
Project or use thereof.
Section 10.04, Construction of Project, Lessee hereby represents that it has fee simple title to the Project Site,free and clear of all liens and
encumbrances except those which are approved byLessor,and hereby covenants that any improvements which may be constructed or installed thereon will be constructed
and installed in accordance with all applicable laws and regulations. Lessee further covenants that all general contractors who perform any such work in connection with the
Project shall be licensed and bonded,and such contractors will provide Lessee with a performance and payment bond equal to the total amount of said contractor's contract to
construct or install the improvements and such certificates of insurance as may be required by this Agreement. Lessee agrees thalLessor shall have the right at any time
during regular business hours to enter onto the property for the purposes of observing the construction activity thereon.
ARTICLE 11
OPTION TO PURCHASE
Lessee is hereby granted the option to prepay all or a portion of its obligations under this Agreement and purchase the Project for the Purchase Price set forth in
Exhibit E hereto,plus the amounts set forth in this Article 11. At the request of Lessee,Lessor's security interest in the Project will be terminated and this Agreement shall
terminate:
(a) at the end of the Lease Term,upon payment in full of Rental Payments due hereunder,plus all past due charges and other amounts hereunder then due
and owing,if any;or
(b) at any regularly scheduled payment due date by making the Rental Payment plus the corresponding Purchase Price as set forth in the Exhibit E,plus
all past due charges and other amounts hereunder then due and owing,if any;or
(c) at any time other than on a regularly scheduled payment due date by paying the preceding Purchase Price as set forth in the Exhibit E,Schedule of
Payments,plus seemed interest on the outstanding principal balance at the Base Interest Rate thereon to the date of settlement thereof,plus all past due charges and other
amounts hereunder then due and owing,if any;or
2
(d) if the Lease Term is terminated pursuant to Article 9 of this Agreement, in the event of total damage,destruction or condemnation of the Project or
any portion thereof and,if Lessee is not on such date in Default under this Agreement,upon payment of the then applicable Purchase Price to Lessor plus all past due charges
and other amounts hereunder then due and owing,if any.
In the event Lessee purchases less than all of the Project,the Agreement shall be amended to reflect such prepayment of principal and the remaining Rental
Payments shall be adjusted accordingly. Further,Lessee agrees to execute such revised Schedule of Payments.
ARTICLE 12
.ASSIGNMENT,SUBLEASING,INDEMNIFICATION
AND MORTGAGING
Section 12.01. Assignment by Lessor. This Agreement,and Lessors right to receive payments hereunder,may be assigned and reassigned in
whole or in part to one or more assignees orsubassignees by Lessor at any time subsequent to this execution,without the necessity of obtaining the consent of Lessee;
provided, however,that no such assignment or reassignment shall be effective against Lessee unless and until i()Lessee shall have received notice of the assignment or
reassignment disclosing the time and address of the assignee orsubassignee,and(ii)in the event that such assignment or reassignment is made to a bank or trust company as
trustee for holders of certificates or other evidence representing interest in this Agreement,or rights to receive amounts hereunder,such bank or trust company agrees to
maintain,or cause to be maintained on behalf of and as agent for Lessee,a back-entry system by which a record of the names and addresses of such holders as of any
particular time is kept and agrees,upon request of Lessee,to furnish such information to Lessee. Upon receipt of notice of assignment,Lessee agrees to reflect in a book
entry the assignee designated in such notice of assignment,and to make all payments to the assignee designated in the notice of assignment,notwithstanding any claim,
defense,set-off or counterclaim whatsoever(whether arising from a breach of this Agreement or otherwise)that Lessee may from time to time have against.essor,or the
assignee. Lessee agrees to execute all documents,including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor
or its assignee to protect their interests in the Project and in this Agreement.
Section 12.02. No Sale Assignment or Subleasing by Lessee. This Agreement and the interest of Lessee in the Project may not be sold,
assigned or encumbered by Lessee without the prior written consent otLessm,which consent may be withheld in the total discretion ofLessor taking into account,among
other things,the treatment for federal income tax purposes of the interest component of the Rental Payments.
Section 12.03. Release and Indemnification Covenants. Except for the intentional or negligent acts of Lessor or any of its employees or agents
thereof arising out of 1)entering into this Agreement,and/or 2)any liability,obligation,loss,claim or damage arising out of or in connection with any misstatement of a
material fact or failure to make a statement of material fact by Lessor or any assignee thereof(other than a misstatement by Lessee)in connection with any offer,sale or other
transfer of this Agreement or any interest herein,to the extent permitted by the laws and Constitution of the State,Lessee shall protect,hold harmless,and indemnif#,essor
from and against any and all liability, obligations, losses, claims and damages, regardless of cause thereof, and expenses in connection therewith, including, without
limitation,counsel fees and expenses,penalties and interest arising out of or as the result of the entering into of this Agreement in connection with the ownership or intended
ownership,delivery,rejection,storage or return of the Project or any accident in connection with the operation,use,condition,possession,storage or retum of the Project
resulting in damage to property or injury to or death to any person. Lessee's agreement to protect,hold harmless,and indemnify Lessor under this paragraph shall continue in
full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason.
ARTICLE 13
EVENTS OF DEFAULT AND REMEDIES
Section 13.01. Events of Default Defined. The following shall be"events of default"under this Agreement and the tents"Event of Default"and
"Default"shall mean,whenever they are used in this Agreement,any one or more of the following events:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time specified herein;and
(b) Failure by Lessee to observe and perform any covenant,condition or agreement on its part lobe observed or performed,other than as referred to in
Section 13.01(a)or 13.01(c),for a period of 30 days after written notice,specifying such failure and requesting that it be remedied as given to Lessee by Lessor,unless Lessor
shall agree in writing to an extension of such time prior to its expiration;provided,however,if the failure stated in the notice cannot be corrected within the applicable period,
Lessor will not unreasonably withhold its consent to an extension of such time if corrective action deemed appropriate b¢.essor in its sole discretion,is instituted by Lessee
within the applicable period and diligently pursued until the Default is corrected;and
(c) Failure by Lessee to maintain insurance on the Project in accordance with Secim 8.03 hereof;and
(d) A determination by Lessor that any material representation or warranty of Lessee was untrue when made.
(e) Initiation by Lessee of a proceeding under any federal or state bankruptcy or insolvency law seeking relief under such laws wceming its
indebtedness.
The foregoing provisions of this Section 13.01 are subject to,if by reason offorce majeure Lessee is unable in whole or in part to tarty out its agreement on its
part herein contained,other than the obligations on the part of Lessee contained in Article 6 and Section 8.03 hereof, Lessee shall not be deemed in Default during the
continuance of such inability. The term "force majeure"w used herein shall mean,without limitation, the following: acts of God, strikes, lockouts or other industrial
disturbances;acts of public enemies,orders or restraints of any kind of the government of the United States of America or of the state wherein Lessee is located or any of
their departments,agencies or officials,or any civil or military authority;insurrections;riots;landslides;earthquakes;fires;storms;droughts;floods;or explosions.
Section 13.02. Remedies on Default. Whenever any Event of Default referred to in Section 13.01 hereof shall have happened and be
continuing,Lessor shall have the right,at its sole option without further demand or notice,to take one or any combination of the following remedial steps:
(a) Terminate this Agreement,enter onto the Project Site and retake possession of the Project wherever situwd,without any court order or other process
of law and without liability for entering the premises,and sell,lease,sublease or make other disposition of the Project and the Project Site for use over the term permissible
under the Ground Lease in a commercially reasonable manner,and collect and retain any and all amounts which would have been payable by Lessee through the balance of
the Lease Term hereunder,all for the account of Lessee;provided that Lessee shall remain directly liable for the deficiency,if any,between Q the rent and other amounts due
and payable by Lessee through the balance of the Lease Term,and(ii)the rent or other amounts paid by a lessee or sublessee of the Project pursuant to such lease or sublease
during the same period of time,after deducting all costs and expenses,including reasonable attorneys'fees and expenses,incurred with respect to the recovery,repair and
storage of the Project during such period of time.
(b) Proceed by appropriate court action to enforce peformance by Lessee of the applicable covenants of this Agreement or to recover for the breach
thereof.including the payment of all amounts due from Lessee hereunder.
(c) Use or retake such portion of the Project as Lessor,in its sole discretion and as permissible under the Ground Lease,may decide.
(d) With or without terminating this Agreement,declare all Rental Payments due or to become due to immediately become due and payable by Lessee,
whereupon such Rental Payments shall be immediately due and payable.
(e) Notwithstanding any other remedy exercised hereunder,Lessee shall remain obligated to pay td.essor any unpaid portion of the Purchase Price.
All of Lessee's right,title and interest in the Project,the possession of which is retaken byLessor upon the occurrence of an Event of Default(including,without
limitation,warranties,guaranties or completion assurances applicable to such Project),shall terminate immediately upon such repossession.
Section 13.03. Return of Project Upon an Event of Default,Lessee agrees to allow Lessor to recover the Project,the costs and expenses of which
shall be additional amounts due to Lessor hereunder.
Section 13.04. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity. Any repossession or
subsequent sale or lease by Lessor of the Project shall not bar an action against Lessee for a deficiency,and the bringing of any action against or the entry ofjudgment against
Lessee shall not but Lessees right to repossess the Project. No delay or omission to exercise any right or power morning upon any Default shall impair any such right or
power or shall be construed to be a waiver thereof,but any such right and power may be exercised from time to time and as often as may be deemed expedient.
ARTICLE 14
MISCELLANEOUS
Section 14.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when
delivered or mailed by certified mail,postage prepaid,to the parties at their respective places of business.
Section 14.02. Binding Effect This Agreement shall inure to the benefit of and shall be binding uponLessor and Lessee and their respective
successors and assigns.
Section 14.03. Severability. In the event any provision of this Agreement shall be held invalid or unenforceableby any court of competent
jurisdiction,such holding shall not invalidate or render unenforceable any other provision hereof,and the invalid or unenforceable provision shall be reformed and revised to
be enforceable to the full extent permissible under the laws of the State.
Section 14.04. Amendments. The terms of this Agreement shall not be waived, altered, modified,supplemented or amended in any manner
whatsoever except by written instrument signed byLessor and Lessee,nor shall any such amendment that affects the rights ofLessor's assignee be effective without such
assignees consent.
Section 14.05. Execution in Counterparts. This Agreement may he executed in several counterparts,each of which shall be an original and all of
which shall constitute but one and the same instrument
Section 14.06. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the state of California.
Section 14.07. Captions. The captions or headings in this Agreement are for comenience only and in noway define,limit or describe the scope or intent
of any provisions or sections of this Agreement
Section 14.08. Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee as to the matters herein described. No
waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing signed by both parties, and then such waiver, consent,
modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements,representations or
warranties,express or implied,not specified herein regarding this Agreement or the Project leased hereunder. Any terms and conditions of any purchase order or other
document(with the exception of Supplements)submitted by Lessee in connection with this Agreement which are in addition to or inconsistent with the terms and conditions
of this Agreement will not be binding on Lessor and will not apply to this Agreement Lessee,by the signature below of its authorized representative acknowledges that it
has read this Agreement,understands it,and agrees to be bound by its terms and conditions.
2
IN WITNESS WHEREOF, Lessor has executed this Agreement in its corporate name and attested by its duly authorized officers.and Lessee has caused this
Agreement to be executed in its corporate name and attested by its duly authorized officers. This document is dated as of the Accrual Date,whether or not executed as of
such date.
LESSEE:Truckee Donner Public Utility District
Attest:
By: By:
Title: Title:
Date:
STATE OF
COUNTY OF
On ,20.before me PERSONALLY APPEARED of the Truckee
Donner Public Utility District,and acknowledged the foregoing instrument to be his/her free act and deed in his/her said capacity and the free act and deed of the
Truckee Donner Public Utility District.
Notary Public
Print Name
Notary Expiration Date:
LESSOR: Municipal Services Group,Inc.
Attest:
By: By:
Title: Title:
Date:
STATE OF
COUNTY OF
On 20. before me PERSONALLY APPEARED of Municipal
Services Group,Inc.,and acknowledged the foregoing instrument to be his/her free act and deed in his/her said capacity and the free act and deed of Municipal
Services Group,Inc.
Notary Public
Print Name
Notary Expiration Date:
EXHIBITS
TO
MUNICIPAL PROJECT LEASE AND OPTION AGREEMENT NUMBER 1509
Entered into April 1, 2001, (the "Dated Date")by and between Lessor and Lessee, these Exhibits are made a part of Municipal Project Lease and
Option Agreement Number 1509 and all terms and conditions of said Agreement with respect to Lessee's and Lessor's rights in the Project described
in the Agreement are hereby incorporated.
These Exhibits consist of:
Exhibit A Resolution of Governing Body
Exhibit B Opinion of Lessee's Counsel
Exhibit C Certificate as to Arbitrage
Exhibit D Description of Project and Project Site
Exhibit E Schedule of Payments
Exhibit F Acceptance Certificate
Exhibit G Insurance Coverage Requirements
Supplements: 8038-G IRS Filing
Ground Lease
LESSOR: Municipal Services Group,Inc. LESSEE: Truckee Donner Public Utility District
By: By:
Title: Title:
Date: Date:
EXHIBIT A
RESOLUTION NO. 01_
OF THE
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
APPROVING AGREEMENT TO FINANCE THE CONSTRUCTION
OF THE MARTIS VALLEY WELL AND PIPELINE
WHEREAS, the Board of Directors of the Truckee Donner Public Utility District
has determined that a true and very real need exists for the construction of the
Martis Valley well and pipeline described in the Municipal Project Lease and
Option Agreement No. 1509 presented at this meeting; and
WHEREAS, the Board of Directors has taken the necessary steps under
applicable law, including any legal bidding requirements, to arrange for the
construction of such Project; and
WHEREAS, the Board hereby directs its legal counsel to review the agreement
and negotiate appropriate modifications to said agreement so as to assure
compliance with state law and local statutory law, prior to execution of the
agreement by those persons so authorized by the District for such purposes;
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors as follows:
1. The Board finds that the terms of said agreement are in the best interests
of the District for the construction of such Project and the Board
designates and confirms the Board President and the Treasurer to
execute and deliver, and to witness (or attest) respectively, the agreement
and any related documents necessary for the consummation of the
transactions contemplated by the agreement.
2. That the construction of the project, under the terms and conditions
provided for in the agreement is necessary, convenient, in the furtherance
of and will at all times be used in connection with the District's
governmental and proprietary purposes and functions (except to the
extent that subleasing of the Project is permitted under the terms of the
Agreement) and are in the best interests of the District and no portion of
the project will be used directly or indirectly in any trade or business
carried on by any person other than a governmental unit of the State on a
basis different from the general public.
3. The lessee covenants that it will perform all acts within its power which are
or may be necessary to insure the maintenance of its legal status as being
a duly organized and existing entity under the laws of the State, which
status is the basis for the interest portion of the Rental Payments coming
due under the Agreement to at all times remain exempt from federal
income taxation under the laws and regulations of the United States of
America as presently enacted and construed or as hereafter amended.
4. It is the intent of the District to be reimbursed from the proceeds of the
Agreement approved herein for prior expenditures in the event that the
District elects to disburse moneys from its own reserves for construction of
the Project. Such declaration of official intent to be reimbursed is issued
pursuant to Section 1.103-18 of the Federal Income Tax Regulations.
4. The Board authorizes the General Manager to sign draw requests and
acceptance certificates for the purposes of having Municipal Services
Group make the necessary project payments from the escrow account.
PASSED AND ADOPTED by the Board of Directors at a meeting duly called and
held within the District on the eighteenth day of April, 2001 by the following roll
call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
James A. Maass, President
ATTEST:
Susan M. Craig, Deputy District Clerk
EXHIBIT B
OPINION OF LESSEE'S COUNSEL
(Letterhead of Lessee's Counsel)
Date
Municipal Services Group,Inc.
5125 South Kipling Parkway
Suite 300
Littleton,CO 80127
Ladies and Gentlemen:
As Counsel for the Truckee Donner Public Utility District("Lessee")we have examined duly executed originals of the Municipal Project
Lease and Option Agreement No. 1509 and the Ground Lease (collectively, the "Agreements") by and between Lessee and Municipal Services
Group, Inc.("Lessor"),the proceedings taken by Lessee to authorize and execute the Agreements together with the other related documents, and the
Constitution and laws of the state of California(the"State")as presently enacted and construed. Based upon said examination and upon such other
examination as we have deemed necessary or appropriate,it is our opinion that:
1. Lessee was duly organized and is validly existing under the Constitution and laws of the State as a political subdivision of the State.
2. The Agreements have been duly authorized, executed, and delivered by Lessee, pursuant to Constitutional, statutory and/or home rule
provisions that authorized this transaction and the Resolution attached as Exhibit A to the Municipal Project Lease and Option Agreement.
3. The Resolution has been duly adopted and is a valid and binding obligation of Lessee.
4. The Agreements are legal, valid, and binding obligations of Lessee, enforceable in accordance with their terms. In the event Lessor
obtains a judgment against Lessee in money damages,as a result of an Event of Default under the Municipal Project Lease and Option Agreement,
Lessee will be obligated to pay such judgment.
5. Applicable public bidding requirements have been complied with.
6. To the best of my knowledge,no litigation is pending or threatened in any court or other tribunal,state or Federal, in any way questioning
or affecting the validity of the Resolution or the Agreements.
7. The signatures of the officers of Lessee that appear on the Agreements are true and genuine; I know said officers and know them to hold
the offices set forth below their names.
8. Lessee is a political subdivision within the meaning of Section 103 of the Internal Revenue Code and the related regulations and rulings
and the portion of payments identified as interest charges to maturity, upon receipt, will not be includable in Federal gross income under statutes,
regulations,court decisions and rulings existing on the date of this opinion and consequently,will be exempt from present Federal income taxes and
income tax of the state of California.
This Opinion of Counsel may be relied upon by any assignee(s)of Municipal Services Group,Inc.
Attorney for Lessee
in
Agreement No. 1509
EXHIBIT C
CERTIFICATE AS TO ARBITRAGE
I, the undersigned officer of the Truckee Donner Public Utility District in the state of California (the "Lessee") being the person duly
charged, with others, with responsibility of issuing Lessee's obligation in the form of that certain Municipal Project Lease and Option Agreement
Numbered 1509(the"Agreement")by and between Lessee and Municipal Services Group,Inc.as lessor(the"Lessor")HEREBY CERTIFY that:
I. The Agreement was executed and delivered by Lessee under and pursuant to existing law to finance the construction of the
Project as described in the Agreement.
2. Pursuant to the Agreement, Lessee is entitled to the use and possession of the Project in consideration for the obligations of
Lessee under and pursuant to the Agreement. The Project will be used in furtherance of the public purposes of Lessee and only for the performance
of one or more governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority.
3. Lessee does not intend to sell the Project during the term of the Agreement. Lessee will not receive any monies, funds or other
"proceeds"as a result of the execution or delivery of the Agreement,other than as described in Paragraph 6 hereof.
4. Lessee has not established any sinking fund from which it intends to make payment under the Agreement, and no monies are
pledged other than amounts from the Airport Fund or other legally available funds of Lessee in amounts equal to the required payments under the
Agreement. The remaining general funds of Lessee are not reasonably expected to be used to make such payments, and no other monies, except as
set forth herein,are pledged to the payments due under the Agreement or reasonably expected to be used to pay principal and interest payments due
under the Agreement.
5. Lessee certifies that the Project(as defined in the Agreement)is or will be owned and operated by Lessee and will not be used in
the trade or business of any person on a basis different from the general public.
6. The proceeds to be derived from the Agreement by Lessor or its assignee on the date hereof($ )together with
anticipated investment earnings thereon($ we expected to pay the costs of the construction of the Project($ )
and the financing and legal costs in respect of the execution and delivery of the Agreement. Accrued interest from the Accrual Date not to exceed
the interest for a period of six(6)months,in the amount of($ ),shall be retained by Lessor or its assignee,if any. The proceeds
derived from the sale of an interest in rights to receive Rental Payments under the Agreement,together with anticipated investment earnings thereon,
will not exceed the amount necessary for the purpose of the Agreement. It is anticipated that the construction of the Project will proceed with due
diligence to completion by and that all of the proceeds derived from the Agreement will be spent within the eighteen(18)
months following the execution and delivery of the Agreement and this certificate.
7. Within thirty(30)days after the anniversary of the date of the execution and delivery of the Agreement,Lessee shall determine
the amount of required arbitrage rebate,if any,due to the United States government under Section 103 and 148(f)(2)of the Internal Revenue Code
of 1986,as amended(the"Code"),and the regulations promulgated thereunder. Lessee shall pay the required arbitrage rebate amounts to the United
States of America from time to time as required by the Code,but not less frequently than once each five(5)years after the date of the execution and
delivery of the Agreement, in an amount equal to 90%of the required arbitrage rebate amount earned during such period(and not previously paid to
the United States of America)and not later than sixty(60)days after making the final Rental Payment under the Agreement, 100%of the required
arbitrage amount. The required arbitrage rebate payments are to be made to the United States government from legally available funds regardless of
whether there are any remaining proceeds or other funds attributable to the Agreement that are available for that purpose. Notwithstanding the
foregoing,Lessee is obligated to at all times provide for the determination and payment of arbitrage rebate in conformity with all applicable federal
statues and regulations as the same may be amended from time to time.
8. Lessee has not received notice that its Certificate may not be relied upon with respect to its own issues, nor has it been advised
that any adverse action by the Commissioner of Internal Revenue is contemplated.
To the best of my knowledge, information,and belief the expectations herein expressed are reasonable and there are no facts,estimates or
circumstances other than those expressed herein that would materially affect the expectations.
LESSEE: Truckee Donner Public Utility District
By:
Title:
Date:
Agreement No. 1509
EXHIBIT D
DESCRIPTION OF PROJECT AND PROJECT SITE
The Project that is the subject of the attached Municipal Project Lease and Option Agreement is as follows:
Water Well Construction and Transmission Pipeline Installation
Together with all additions,accessions and replacements thereto.
The Legal Description of the"Project Site"is as follows:
Together with all additions,accessions and replacements thereto.
Lessee hereby certifies that the description of the Project set forth above constitutes an accurate description of the 'Project", as defined in
the attached Municipal Project Lease and Option Agreement.
LESSEE: Truckee Donner Public Utility District
By:
Title:
2
Agreement No. 1509
EXHIBIT E
SCHEDULE OF PAYMENTS Page 4 of 4
Base Interest Rate: 5.67%
U. S.Treasury Note Yield: 4.94%
U. S.Treasury Note Index Percent: 114.78%
Adjusted Base Interest Rate:
Dated Date: April L 2001
Provided all documents have been returned in a form acceptable to Lessor within thirty (30) days of the Dated Date (the 'Period"), then the Base
Interest Rate can remain in effect during the Period. In the event all documents have not been returned within the Period, in a form acceptable to
Lessor, and/or if the U. S. Treasury Note Yield for a maturity comparable to the Lease Term increases significantly, Lessor reserves the right to
adjust and determine a new Base Interest Rate (the "Adjusted Base Interest Rate")pursuant to the provisions hereof. The Adjusted Base Interest
Rate shall be determined by multiplying the U. S. Treasury Note Yield for a maturity comparable to the Lease Term (as of the business day
immediately preceding the receipt of the documents by Lessor)by the U. S.Treasury Note Index Percent. Such Adjusted Base Interest Rate shall be
the applicable interest rate for the principal balance of the Project that is the subject of this Agreement,and Lessor and Lessee shall execute a revised
Exhibit E to this Agreement to acknowledge such change.
LESSEE: Truckee Donner Public Utility District
By:
Title:
3
EXHIBIT E
SCHEDULE OF PAYMENTS Agreement No. 1309
DATED DATE: Apr 01, 2001
Truckee Donner Public Utility District
PMT PAYMENT PRINCIPAL INTEREST PURCHASE
DATE PAYMENT PORTION PORTION PRICE
1 1 - Sep-01 194,374.90 158,723.80 35,651.10 1,366,330,10
2 1 - Sep-02 194,374.90 118,324.55 76,050.36 1,243,687.53
3 1 - Sep-03 194,374.90 125,033.54 69,341.36 1,114,606.22
4 1 - Sep-04 194,374.90 132,122.94 52251.96 978,748.15
5 1 - Sep-05 194,374.90 139,614.31 54,760.59 835,757.53
6 1 - Sep-06 194,374.90 147,530.44 46,844.46 685,259.90
7 1 - Sep-07 194,374.90 155,895.42 38,479.48 526,861.14
8 1 - Sep-08 194,374.90 164,734.69 29,640.21 360,146.45
9 1 - Sep-09 194,374.90 174,075.15 20,229.75 184,679.24
10 1 - Sep-10 194,374.90 183,945.17 10,429,73 0.00
TOTAL 1,943,749.00 1,500,000.00 443,749.00
LESSEE: Truckee Donner Public Utility District
BY:
TITLE:
Agreement No. 1509
EXHIBIT F
ACCEPTANCE CERTIFICATE
The undersigned,as Lessee under the Municipal Project Lease and Option Agreement(the"Agreement')with Municipal Services Group,
Inc. ("Lessor"), acknowledges receipt in good condition of the Project described in the Agreement this day of
and certifies that Lessor has fully and satisfactorily performed all of its covenants and obligations required under the
Agreement.
Lessee confirms that it will commence payments in accordance with Article 6 of the Agreement or the provisions of the Exhibit E.
The undersigned officer of Lessee hereby reaffirms in all respects the Certificate as to Arbitrage attached as Exhibit C to the Agreement,
and represents that,to the best of his or her knowledge, information and belief,the expectations therein expressed were reasonable as of the Accrual
Date on which they were made, and are reasonable as of this date, and that there were, and are as of this date, no facts, estimates or circumstances
other than those expressed therein that would materially affect the expectations expressed therein.
LESSEE: Truckee Donner Public Utility District
By:
Title:
4
Agreement No. 1509
EXHIBIT G
INSURANCE COVERAGE REQUIREMENTS
TO: Municipal Services Group, Inc.
5125 South Kipling Parkway
Suite 300
Littleton,CO 80127
FROM: Truckee Donner Public Utility District
P.O.Box 309
Truckee,CA 96160
SUBJECT: INSURANCE COVERAGE REQUIREMENTS
I. In accordance with Section 8.03 of the Municipal Project Lease and Option Agreement(the "Agreement'), we have instructed
the insurance agent named below(please fill in name,address and telephone number)
to issue:
a. All Risk Physical Damage Insurance on the leased Project(as defined in the Agreement)evidenced by a Certificate of Insurance
and Long Form Loss Payable Clause naming Lessor"and/or its assigns"as Loss Payee.
b. Public Liability Insurance evidence by a Certificate of Insurance naming"Lessor and/or its assigns"as an Additional Insured.
Minimum Coverage Required:
$1,000,000.00 general aggregate
OR
2. Pursuant to Section 8.03 of the Agreement,we are self-insured for all risk,physical damage,and public liability and will provide
proof of such self-insurance in letter form together with a copy of the statute authorizing this form of insurance.
3. Proof of insurance coverage will be provided to Lessor prior to the time that the Project is constructed and/or delivered to us.
LESSEE: Truckee Donner Public Utility District
By:
Title:
5
8038_G Information Return for Tax-Exempt Governmental Obligations
room ► Under internal Revenue Coda section 149(s) OW3 No. 1545.0720
(Rev. May 19991 W. See separate Instructions.
nr,wtcmem or nK rrrnu�n caupon; use form 30.78-CC if the issue price is under$100.000.
Inmtnnl RCVGM,C SCNKC
Re orting AU irity If Amended Return, check here ► ❑
2 Issuer's employer identification number
1 issuer's naroC
Truckee Donner Public Utility District
3 Number and street(or P.O. Cox if mail is not eelivered to street address) Rvamisuitn 4 Report number
P. G. Boa 309
5 city, town. or post office. state, and ZIP code 6 Data of issue
Truckee, CA 96160
H CUSIP number
7 Nnme of issue
None
'.tunicipal Project Lease and Option Agreement No. 1509
9 Name and title. of officer or legal representative whom the IRS may call for more information 10 1'etnFhene number of W�ecr or Itx?al mprrsentauve
Mary Chapman, Administrative Services ,tanager/Treasurer ( 530 1 582-3906
T e of Issue (check a li :able box(es) and enter the issue rice) See instruct ens and attach schedule
11
11 ❑ Education . . . . . . . . . . . . . . . . . , . . . . . . 12
12 ElHealth and hospital . . . . . . . . . . . . • . ' ' . 13
13 ❑ Transportation . . . . . . . . . . . . . . . . • • • • • ' ' ' . 14
14 ❑ Public Safety. . . . . . . . . . . . . . . . . . . . . . . . . . 15
15 ❑ Environment (including sewage bonds) . . . . . . . . . . . . . . . . ' ' • 16
16 ❑ Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
17 ❑ Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
18 ❑ Other. Describe ►
19 if obligations are TANS or RANs, check box ► ❑ If obligations are BANS, check box : _ y
zo if oblieations are in the form or a lease or installment sale, check box . . . . .
Description of Obligations. Cora fete for the entire issue for which this form is loeinq riled.)
(e)Stated redemption M weighted tel nred
(al Penal maturity date (b)issue price price at maualty .average mammy
27 S S years
01 Uses of Proceeds of Bond issue(includinq underwriters` discount
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22
23 issue price of entire issue(enter amount from line 21, column (b)) . . . . . . 23
24 Proceeds used for bond issuance casts(including underwriters' discount) 25 ='-
25 Proceeds used for credit enhancement: . . . . • . • ' . • 26
26 Proceeds allocated to reasonably required reserve or replacement fund 27 -
21 Proceeds used to currently refund prior issues . . . . . . . . 28
28 Proceeds used to advance refund prior issues . . . . . . 29
29 Total (add lines 24 through 28) . . . . . . . . • . • . • . • • • • • • .
30 Nonrofundino 2racceds of the issue subtract line 29 from line 23 and enter amount here . . . 30
Descri teen of Refunded Bonds Com lete this art ontv for refundin bonds.
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . ► N A years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded • ► N/A years
N/A
33 Enter the last date on which the refunded bonds will be called . . . . . . . . . . . It"
34 Enter the dates) the refunded bonds were issued ► N/A
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 N/A
36a Enter the amount of grass proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a N/A
to Enter the final maturity date of the guaranteed investment contract ► 37a N/A
37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units
b If this issue is a loan made from the proceeds of another tax-exempt issue. check box ► ❑ and enter the name of the
issuer ► and the date of the issue ►
39 If the issuer has designated the issue under section 265(b)(3)IB)(1{11) (small issuer exception). check box P.
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . It. Cl
40 if the issuer has identified a hed e, check box . . . . . . . . . . . . ► ❑
11mine rwnnmes of perjury.i declare coat I have eaamirdd this nuum and accompanying schedules and statements.non in the most of my lumvdadge
and ileiinr.they ve tme.Ccneci,and complete.
Please
Sign
Here 5kinaium Cr,ssuo s authanzed reNesematwe Date , Type or print rmme anti title
For Paperwork Reduction Act Notice, see page 2 of the Instructions. cat.No.637735 rnrm 8038-G Ines. 5•5191
GROUND LEASE
This Ground Lease (the "Ground Lease"). dated as of April 1, 2001, is entered into by and between the Truckee Donner Public Utility
District, existing pursuant to the constitution and laws of the state of California("City") as lessor, and Municipal Services Group, Inc. ("MSG") as
lessee:
WITNESSETH
WHEREAS, MSG intends to construct certain improvements on the real estate described in Exhibit A attached hereto and made a part
hereof(the "Land"). The Land, the improvements, and the equipment located thereon or therein are sometimes hereinafter referred to as the
"Project";and
WHEREAS, MSG intends to lease the improvements and sublease the Land pursuant to the City pursuant to a Municipal Project Lease
and Option Agreement dated as of the date hereof(the"Agreement").
NOW,THEREFORE,IT IS HEREBY MUTUALLY AGREED,AS FOLLOWS:
Section 1. Lease. The City hereby leases to MSG, and MSG hereby rents and leases from the City the Land and the improvements
thereon,on the terms and conditions hereinafter set forth.
Section 2. Term. The term of this Ground Lease shall commence as of April 1,2001,and shall end on April 1,2021,unless such term is
sooner terminated as hereinafter provided.
Section 3. Rental. As and for rental hereunder and in full consideration for the leasing of the Land to MSG,the receipt and sufficiency of
which are hereby acknowledged by the City,MSG,or its assignee,if any,shall:
(a) Simultaneously with the delivery of this Ground Lease,enter into the Agreement;and
(b) Deposit $1,500,000 in an Acquisition Fund (as defined in the Agreement) to pay costs of the construction and
installation of the Project on the Land.
Section 4. Owner in Fee. The City warrants that it is the owner of unencumbered fee title to the Land.
Section 5. Assignments and Subleases. MSG may assign its rights under this Ground Lease or sublet the Project without the written
consent of the City(i)in connection with any assignment of its rights under the Agreement,(ii)if the Agreement is terminated for any reason other
than as described in Section 6 hereof,or(iii)if an"Event of Default"(as defined in the Agreement)has occurred.
Section 6. Termination. This Ground Lease shall terminate upon the completion of the term set forth in Section 2,provided however, in
the event the City makes payment of the purchase price and other amounts due under the Agreement or makes all of the rental payments provided for
in Article VI of the Agreement and other amounts due under the Agreement and exercises the option to purchase MSG's interest in the Project
pursuant to Article XI of the Agreement, then this Ground Lease shall be considered assigned to the City and terminated through merger of the
leasehold interest with the fee interest if the City is the owner of the fee interest and elects to terminate the leasehold interest so acquired from MSG.
MSG agrees,upon such assignment and termination or upon termination of this Ground Lease upon completion of the tern set forth in Section 2,to
quit and surrender the Project(except as provided in the following paragraph)and agrees that any permanent improvements and structures existing
upon the Land at the time of the termination of this Ground Lease shall remain thereon and title thereto shall vest with the City.
If an "Event of Default"under the Agreement shall occur and be continuing,MSG shall have the right to possession of the Project for the
remainder of MSG's Lease Term and shalt have the right to sublease the Project or sell its interest in the Project and this Ground Lease upon
whatever terms and conditions it deems prudent,and the City shall recognize the assignee/purchaser as lessee hereunder.
Section 7. Default. The City shall not have the right to exclude MSG from the Project or take possession of the Project (other than
pursuant to the Agreement)or to terminate this Ground Lease prior to the expiration of its term upon any Default by MSG hereunder,except that if,
upon the exercise of the option to purchase MSG's interest in the Project granted to the City in Section 11.01 of the Agreement and after the payment
of the purchase price specified therein and other sums payable under the Agreement, MSG fails to convey its interest in the Project to the City
pursuant to said option, then the City shall have the right to terminate this Ground Lease, such termination to be effective thirty (30) days after
delivery of written notice of such termination to MSG.
Section 8. Quiet Enjoyment. MSG at all times during the term of this Ground Lease shall peaceably and quietly have,hold and enjoy all
of the Project, and shall have the right to assign this Ground Lease and, following termination of the Agreement(other than following the exercises
of the City's option to purchase)to sublease the Project.
Section 9. Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all tares levied or
assessed upon the Land—
-
6
Section 10. Waiver of Personal Liability. All liabilities under this Ground Lease on the part of MSG are solely corporate liabilities of
MSG as a corporation, aud, to the extent permitted by law, the City hereby releases each and every incorporator, member, director and officer of
MSG of and from any personal or individual liability under this Ground Lease. No incorporator, member, director oR officer of MSG shall at any
time or under any circumstances be individually or personally liable under this Ground Lease for anything done or omitted to be done by MSG
under the provisions of this Section 10.
The Land and the use thereof are in compliance with. and MSG will maintain the condition of the Land so that it shall remain in
compliance with, all applicable laws, statutes, ordinances, rules and regulations of any governmental or quasi-govemmental authority,specifically
including without limitation the Resource Conservation and Recovery Act and the Comprehensive Environmental Response, Compensation and
Liability Act,both as amended,and all other environmental protection or toxic waste or hazardous substance handling treatment,storage or disposal
laws,statutes,ordinances,rules and regulations.
The City agrees to provide MSG with copies of any notifications of releases of oil or hazardous materials or substances or of any
environmental hazards or potential hazards(each a"Release")which are given by or on behalf of the City to any federal, state or local agencies or
authorities or which are received by the City from any federal, state or local agencies or authorities with respect to the Land. Such copies shall be
sent to MSG concurrently with their being mailed or delivered to the governmental agencies or authorities or within ten days after they are received
by the City.
The City agrees to provide MSG with copies of all emergency and hazardous chemical inventory forms (hereinafter "Notices") with
respect to the Land previously given,as of the date hereof,to any federal,state or local governmental authority or agency as required pursuant to the
Emergency Planning and Community Right-to-Know Act of 1986,42 U.S.C.A. Section 1101 et. seq.,and to provide MSG with copies of all such
Notices subsequently sent to any such governmental authority or agency as required pursuant to the Emergency Planning and Community Right-to-
Know Act of 1986. Such copies of subsequent Notices shall be sent to MSG concurrently with their being mailed to any such governmental
authority or agency.
The City hereby covenants and agrees to indemnify,protect and hold harmless MSG and its successors and assigns from and against any
and all claims,demands,liabilities and costs,including without limitation attorneys'fees,arising from(a)any"Release"(as defined above)or threat
of a "Release," actual or alleged, or any "Hazardous Substances" (defined as "f) any dangerous, toxic or hazardous pollutant, contaminant, chemical,
material or substance listed or identified in,or regulated by,any Environmental Law,(ii)any of the following,whether or not included in the foregoing:asbestos,urea
formaldehyde, polychlorinated biphenyls ("PCBs"),nuclear fuel or material, chemical waste, radioactive material, explosives, known carcinogens, and petroleum
products and by-products; and (iii) any "recognized environmental condition", as that term is defined by the American Society for Testing and Materials in its
standards for environmental due diligence")upon or about the Land or respecting any products or materials previously or now located upon,delivered to
or in transit to or from the Land regardless of whether such release or threat of a release or alleged release or threat of a release has occurred prior to
the date hereof or hereafter occurs and regardless of whether such release or threat of a release or alleged release or threat of a release occurs as the
result of the negligence or misconduct of the City or any third party of otherwise, or(b) any violation, actual or alleged, of or any other liability
under or in connection with any Environmental Law(defined as"the Comprehensive Environmental Response, Compensation and Liability Act,42 U.S.C. §
9601 et seq.,the Resource Conservation and Recovery Act,42 U.S.C.§9601 et seq.,the Hazardous Materials Transportation Act,49 U.S.C. §1 802 et seq.,the Toxic
Substances Control Act, 15 U.S.C.§2601 et seq.,the Federal Water Pollution Control Act,33 U.S.C.§ 1251 et seq.,the Clean Water Act,33 U.S.C.§ 1131 et seq.,the
Clean Air Act, 2 U.S.C. §7401 et seq., and any other federal,state,county,municipal,local or other statute,law,ordinance,or regulation which may relate to or deal
with the human health or the environment, all as may be from time to time amended"), upon or about the Land or respecting any products or materials
previously or now located upon,delivered to or in transit to or from the Land,regardless of whether such violation or alleged violation has occurred
prior to the date hereof or hereafter occurs and regardless of whether such violation or alleged violation occurs as a result of the negligence or
misconduct of the City or any third party or otherwise. This agreement shall survive any termination of this Ground Lease.
Section 11. Eminent Domain. In the event the whole or any part of the Land is taken by eminent domain proceedings,the interest of the
Land shall be recognized,the proceeds of said condemnation to be applied as provided in the Agreement. The City agrees,to the extent lawful,that
it shall not exercise any rights of eminent domain with respect to the Project.
Section 12. Leaseback to the City;Term; Rental. Contemporaneously herewith MSG and the City will execute the Agreement whereby
MSG subleases back to the City and the City subleases from MSG the Land, and MSG leases to the City and the City leases from MSG the Project
in accordance therewith. Title to the Land shall remain with the City at all times. The Agreement between the parties includes the option of the
City,upon payment of the purchase price,to purchase MSG's interest in the Project.
Section 13. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Ground Lease shall to any
extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or
decree of which becomes final, none of the remaining terms,provisions, covenants, and conditions of this Ground Lease shall be affected thereby,
and each provision of this Ground Lease shall be valid and enforceable to the fullest extent permitted by law.
Section 14. Notices. All written notices to be given under this Ground Lease shall be given by mail to the party entitled thereto at its
address set forth in the Agreement,or at such address as the party may provide to the other party in writing from time to time. Any such notice shall
be deemed to have been received 48 hours after deposit in the United States mail in certified form,with postage fully prepaid.
Section 15. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define
or limit the scope of any provision of this Ground Lease.
Section 16. Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the state of
California.
Section 17_ Execution. This Ground Lease may be executed in any number of counterparts, each of which shall be deemed to be an
original but all together shall constitute but one and the same Ground Lease. It is also agreed that separate counterparts of this Ground Lease may
separately be executed by MSG and the City.
Section 18. Successors. This Ground Lease shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including the holder of any mortgage, deed of trust,security or other interest granted by MSG in the Project or its leasehold interest in
the Land.
IN WITNESS WHEREOF,the Truckee Donner Public Utility District and Municipal Services Group, Inc. have caused this Ground Lease
to be executed by their respective officers thereunto duly authorized,all as of the date and year first above written.
Truckee Donner Public Utility District
ATTEST:
By: By:
Title: Title:
Date:
STATE OF
COUNTY OF
On 20 , before me PERSONALLY APPEARED ,
of the Truckee Donner Public Utility District, and acknowledged the foregoing instrument to be his/her free
act and deed in his/her said capacity and the free act and deed of the Truckee Donner Public Utility District.
Notary Public
Print Name
Notary Expiration Date:
Municipal Services Group,Inc.
ATTEST:
By: By:
Title: Title:
Date:
STATE OF
COUNTY OF
On 20 before me PERSONALLY APPEARED
of Municipal Services Group, Inc., and acknowledged the foregoing instrument to be his/her free act and
deed in his/her said capacity and the free act and deed of Municipal Services Group,Inc.
Notary Public
Print Name
Notary Expiration Date:
EXHIBIT A TO GROUND LEASE
LAND
2
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement"), dated as of , 2001, and entered into among Municipal
Services Group, Inc., a Colorado corporation ("Lessor"), Truckee Donner Public Utility District, California, a body corporate and
politic existing under the laws of California ("Lessee"), and Bank One Trust Company, N.A., a national banking association, as
escrow agent(the "Escrow Agent").
Name of Acquisition Fund: "Truckee Donner Public Utility District, California,Acquisition Fund"
Equipment Acquisition Fund No.: No. i
Amount of Deposit into the Acquisition Fund: $
TERMS AND CONDITIONS
I. This Escrow Agreement relates to and is hereby made a part of Individual Payment Schedule#1 dated April 1,2001
(the "Schedule")to the Master Municipal Lease and Option Agreement Number 1509(the "Agreement")between Lessor and Lessee.
2. Except as otherwise defined herein, all terms defined in the Agreement shall have the same meaning for the
purposes of this Escrow Agreement as in the Agreement.
3. Lessor, Lessee and Escrow Agent agree that the Escrow Agent will act as sole Escrow Agent under the Schedule
and this Escrow Agreement,in accordance with the terms and conditions set forth in this Escrow Agreement. The Escrow Agent shall
not be deemed to be a party to the Schedule or the Agreement, and this Escrow Agreement shall be deemed to constitute the entire
agreement between Lessor and Lessee and Escrow Agent.
4. There is hereby established in the custody of Escrow Agent a special trust fund designated as set forth above (the
"Acquisition Fund")to be held and administered by the Escrow Agent in trust for the benefit of Lessor and Lessee in accordance with
this Escrow Agreement.
5. Lessor shall deposit in the Acquisition Fund the amount specified above. Moneys held by the Escrow Agent
hereunder shall be invested and reinvested by the Escrow Agent upon order of a representative of Lessee in Qualified Investments (as
hereinafter defined)maturing or subject to redemption at the option of the holder thereof prior to the date on which it is expected that
such funds will be needed. Such investments shall be held by the Escrow Agent in the Acquisition Fund and any interest earned on
such investments shall be deposited in the Acquisition Fund. The Escrow Agent may act as purchaser or agent in the making or
disposing of any investment.
6. "Qualified Investments"shall be defined for purposes of this Escrow Agreement as follows:
(a) For Schedules not qualified for the arbitrage rebate exception for small governmental units under Section
148(f)(4)(C)of the Code, "Qualified Investments"means,to the extent the same are at the time legal for investment
of the funds being invested: (i) United States Treasury Bills or United States Treasury Notes traded on an open
market or issued directly by the United States at a yield not exceeding 5.47%per annum,(ii)United States Treasury
Obligations -- State and Local Government Series time deposit securities with a yield not exceeding 5.47% per
annum, (iii) obligations the interest of which is not includable in the gross income of the owner thereof for federal
income tax purposes under Section 103 of the Code and which are rated AA or better by Standard & Poor's
Corporation or Aa or better by Moody's Investors Service, Inc., (iv) shares of qualified regulated investment
companies which distribute exempt-interest dividends within the meaning of Section 852 of the Code and which are
rated AA or better by Standard&Poor's Corporation or Aa or better by Moody's Investors Service, Inc. (tax-exempt
mutual funds), or (v) United States Treasury Obligations -- State and Local Government Series demand deposit
securities.
(b) For Schedules qualified for the arbitrage rebate exception for small governmental units under Section 148(f)(4)(C)
of the Code, "Qualified Investments" means to the extent the same are at the time legal for investment of the funds
being invested: (i) direct general obligations of the United States of America; (ii) obligations the timely payment
United States of America; (iii) general obligations of the agencies and instrumentalities of the United States of
America acceptable to Lessor;(iv)certificates of deposit,time deposits or demand deposits with any bank or savings
institution including the Escrow Agent or any affiliate thereof, provided that such certificates of deposit, time
deposits or demand deposits, if not insured by the Federal Deposit Insurance Corporation or the Federal Savings and
Loan Insurance Corporation, are fully secured by obligations described in (i), (ii) or (iii) above; or (v) repurchase
agreements with any state or national bank or trust company, including the Escrow Agent or any affiliate thereof,
that are secured by obligations of the type described in(i),(ii)or(iii)above,provided that such collateral is free and
clear of claims of third parties and that the Escrow Agent or a third party acting solely as agent for the Escrow Agent
has possession of such collateral and a perfected first security interest in such collateral.
Notwithstanding anything to the contrary contained in Sections 6 (a) and 6 (b) above, the Escrow Agent shall be authorized
to invest the Acquisition Fund in the One Group U.S. Treasury Securities Money Market Fund, unless and until the Escrow Agent
receives other written instructions from the Lessee.
T Moneys in the Acquisition Fund shall be used to pay for the cost of acquisition of the Equipment listed in the
Schedule. Payment shall be made from the Acquisition Fund for the cost of acquisition of part or all of said Equipment listed in the
Schedule upon presentation to Escrow Agent of one or more properly executed Payment Request and Acceptance Certificates, a form
of which is attached as Exhibit A,executed by Lessee and approved by Lessor,together with an invoice for the cost of the acquisition
of said Equipment for which payment is requested and a written approval by Lessor of the Vendor to be paid.
8. The Acquisition Fund shall terminate upon the occurrence of the earlier of(a) the presentation of a proper Payment
Request and Acceptance Certificate,with the portion thereof designated"Final Acceptance Certificate",properly executed by Lessee,
or(b) the presentation of written notification by the Lessor, or, if the Lessor shall have assigned its interest under the Schedule, then
the assignees or subassignees of all of Lessor's interest under the Schedule or an Agent on their behalf, that an Event of Default has
occurred or that Lessee has terminated the Agreement pursuant to Section 6.06 of the Agreement. Upon termination as described in
clause(a)of this paragraph, any amount remaining in the Acquisition Fund shall be used to prepay the principal component of Rental
Payments unless Lessor directs that payment of such amount be made in such other manner directed by Lessor that, in the opinion of
nationally recognized counsel in the area of tax-exempt municipal obligations satisfactory to Lessor, will not adversely affect the
exclusion of the interest components of Rental Payments from gross income for federal income tax purposes. If any such amount is
used to prepay principal, the Schedule of Rental Payments appearing in the Schedule shall be revised accordingly as specified by
Lessor. Upon termination as described in clause (b) of this paragraph, any amount remaining in the Acquisition Fund shall
immediately be paid to Lessor or to any assignees or subassignees of Lessor interest in this Schedule.
9. The Escrow Agent may at any time resign by giving at least 60 days written notice to Lessee and Lessor, but such
resignation shall not take effect until the appointment of a successor Escrow Agent. The substitution of another bank or trust company
to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In addition, Escrow
Agent may be removed at any time,with or without cause,by an instrument in writing executed by Lessor and Lessee. In the event of
any resignation or removal of Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by
Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing
delivered to Lessor,Lessee and the predecessor Escrow Agent. Thereupon such successor Escrow Agent shall,without any further act
or deed, be fully vested with all the trusts, powers, rights, duties and obligations of Escrow Agent under this Escrow Agreement and
the predecessor Escrow Agent shall deliver all moneys and securities held by it under this Escrow Agreement to such successor
Escrow Agent. If the Lessor and the Lessee shall have failed to appoint a successor prior to the expiration of thirty (30) days
following receipt of the notice of resignation or removal of the Escrow Agent,the Escrow Agent may petition any court of competent
jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and any such resulting appointment shall
be binding upon the Lessor and the Lessee.
10. Escrow Agent incurs no liability to make any disbursements pursuant to the Escrow Agreement except from funds
held in the Acquisition Fund. Escrow Agent makes no representations or warranties as to the title to any Equipment listed in the
Schedule or as to the performance of any obligations of Lessor or Lessee.
-2-
II. This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of Ohio.
12. In the event any provision of this Escrow Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
13. This Escrow Agreement may not be amended except by a written instrument executed by Lessor, Lessee and
Escrow Agent.
14. This Escrow Agreement may be executed in several counterparts,each of which so executed shall be an original.
15. The Escrow Agent shall not be liable for any action taken or omitted under this Escrow Agreement so long as it shall
have acted in good faith and without negligence. The Escrow Agent shall have no responsibility to inquire into or determine the
genuineness,authenticity, or sufficiency of any documents or instruments submitted to it in connection with its duties hereunder. The
Escrow Agent shall be entitled to deem the signatories of any documents or instruments submitted to it hereunder as being those
purported to be authorized to sign such documents or instruments on behalf of the parties hereto,and shall be entitled to rely upon the
genuineness of the signatures of such signatories without inquiry and without requiring substantiating evidence of any kind. The
Escrow Agent shall be entitled to refrain from taking any action contemplated by this Escrow Agreement in the event that it becomes
aware of any disagreement between the parties hereto as to any facts or as to the happening of any contemplated event precedent to
such action.
16. The Escrow Agent shall be entitled to compensation for its services hereunder as per Attachment D attached hereto,
which is made a part hereof, and for reimbursement of its out-of-pocket expenses including,but not by way of limitation,the fees and
costs of attorneys or agents which it may find necessary to engage in performance of its duties hereunder,all to be paid by Lessee and
the Escrow Agent shall have,and is hereby granted,a prior lien upon any property,cash,or assets upon any investment earnings of the
Escrow Account,with respect to its unpaid fees and non-reimbursed expenses,superior to the interests of any other persons or entities.
The Escrow Agent shall be entitled and is hereby granted the right to set off and deduct any unpaid fees and/or non-reimbursed
expenses from amounts on deposit in the Acquisition Fund. The Acceptance Fee, Annual Administration Fee, and Extraordinary
Time Charges,as set forth in Attachment D hereto,shall be paid by Lessor.
17. The Escrow Agent shall be under no obligation to invest the deposited funds or the income generated thereby until it
has received a Form W-9 or W-8, as applicable, from the Lessee, regardless of whether such party is exempt from reporting or
withholding requirements under the Internal Revenue Code of 1986, as amended. The Escrow Agent shall report to the Internal
Revenue Service, as of each calendar year end,all income eamed from the investment of any sum held in the Escrow Account against
the Lessee, whether or not said income has been distributed during such year, as and to the extent required by law. Any tax returns
required to be prepared and filed will be prepared and filed by the Lessee with the Internal Revenue Service in all years income is
earned,whether or not income is received or distributed in any particular tax year, and the Escrow Agent shall have no responsibility
for the preparation and/or filing or any tax return with respect to any income earned by the Acquisition Fund. Any taxes payable on
income earned from the investment of any sums held in the Acquisition Fund shall be paid by the Lessee,whether or not the income
was distributed by the Escrow Agent during any particular year. The Escrow Agent shall have no obligation to pay any taxes or
estimated taxes.
18. The Escrow Agent is hereby indemnified and saved harmless by the Lessee and Lessor from any and all losses,
liabilities, costs and expenses, including attorney fees and expenses, which may be incurred by it as a result of its acceptance of the
Acquisition Fund or arising from the performance of its duties hereunder,unless such losses, liabilities, costs and expenses shall have
been finally adjudicated to have resulted from the negligence or willful misconduct of the Escrow Agent, and such indemnification
shall survive the resignation or removal of the Escrow Agent or the termination of this Escrow Agreement.
19. In the event that(i)any dispute shall arise between the parties with respect to the disposition or disbursement of any
of the assets held hereunder or(ii)the Escrow Agent shall be uncertain as to how to proceed in a situation not explicitly addressed by
the terms of this Escrow Agreement whether because of conflicting demands by the other parties hereto or otherwise, the Escrow
Agent shall be permitted to interplead all of the assets held hereunder into a court of competent jurisdiction, and thereafter be fully
relieved from any and all liability or obligation with respect to such interpleaded assets. The parties hereto other than the Escrow
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Agent further agree to pursue any redress or recourse in connection with such a dispute, without making the Escrow Agent a party to
same.
20. The Escrow Agent shall have only those duties as are specifically provided herein, which shall be deemed purely
ministerial in nature, and shall under no circumstance be deemed a fiduciary for any of the parties to this Escrow Agreement. The
Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement,
instrument or document between the other parties hereto, in connection herewith, including without limitation the Schedule and the
Agreement. This Escrow Agreement sets forth all matters pertinent to the escrow contemplated hereunder, and no additional
obligations of the Escrow Agent shall be inferred from the terms of this Escrow Agreement or any other agreement. Notwithstanding
the foregoing, in the event any portion of this Escrow Agreement is inconsistent with the provisions of the Schedule or the Agreement,
the provisions of the Schedule or the Agreement shall prevail to the extent of any such inconsistency. IN NO EVENT SHALL THE
ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY O DAMAGES OR EXPENSES ARISING OUT OF
THE SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES WHICH RESULT FROM THE ESCROW AGENT'S
FAILURE TO ACT IN ACCORDANCE WITH THE REASONABLE COMMERCIAL STANDARDS OF THE BANKING
BUSINESS, OR(ii) SPECIAL OR CONSEQUENTIAL DAMAGES,EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES.
21. The Escrow Agent shall have the right, but not the obligation, to consult with counsel of choice and shall not be
liable for action taken or omitted to be taken by Escrow Agent either in accordance with the advice of such counsel or in accordance
with any opinion of counsel to the Lessor or the Lessee addressed and delivered to the Escrow Agent. If the Escrow Agent becomes
involved in litigation on account of this Escrow Agreement, it shall have the right to retain counsel and shall have a first lien on the
property deposited hereunder for any and all costs, attorneys' fees, charges, disbursements, and expenses in connection with such
litigation; and shall be entitled to reimburse itself therefor out of the property deposited hereunder, and if it shall be unable to reimburse
itself from the property deposited hereunder, the Lessee agrees to pay to the Escrow Agent on demand its reasonable charges, counsel
and attorneys' fees, disbursements, and expenses in connection with such litigation. The Escrow Agent shall have the right to perform
any of its duties hereunder through agents,attorneys,custodians or nominees.
22. Any banking association or corporation into which the Escrow Agent may be merged, converted or with which the
Escrow Agent may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Escrow
Agent shall be a parry, or any banking association or corporation to which all or substantially all of the corporate trust business of the
Escrow Agent shall be transferred, shall succeed to all the Escrow Agent's rights, obligations and immunities hereunder without the
execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
23. The Escrow Agent shall have no responsibility or liability for any diminution in value of any assets held hereunder
which may result from any investments or reinvestment made in accordance with any provision which may be contained herein. The
parties recognize and agree that the Escrow Agent will not provide supervision, recommendations or advice relating to either the
investment of moneys held in the Acquisition Fund or the purchase, sale, retention or other disposition of any Qualified Investment.
Any loss or expense incurred as a result of an investment will be borne by the Acquisition Fund. The Escrow Agent is hereby
authorized to execute purchases and sales of Qualified Investments through the facilities of its own trading or capital markets
operations or those of any affiliated entity. The Escrow Agent shall send statements to the Lessor on a monthly basis reflecting
activity in the Acquisition Fund-for the preceding month. Although each of the other parties recognizes that it may obtain a broker
confirmation or written statement containing comparable information at no additional cost, such parties hereby agree that
confirmations of investments are not required to be issued by the Escrow Agent for each month in which a monthly statement is
rendered.
24. In the event that any escrow property shall be attached, garnished or levied upon by any court order, or the delivery
thereof shall be stayed or enjoined by an order of a court,or any order,judgment or decree shall be made or entered by any court order
affecting the property deposited under this Escrow Agreement,the Escrow Agent is hereby expressly authorized, in its sole discretion,
to obey and comply with all writs, orders or decrees so entered or issued, which it is advised by legal counsel of its own choosing is
binding upon it, and in the event that the Escrow Agent obeys or complies with any such writ, order or decree it shall not be liable to
any of the parties hereto or to any other person, firm or corporation,by reason of such compliance notwithstanding such writ, order or
decree be subsequently reversed,modified,annulled,set aside or vacated.
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25. No assignment of the interest of any of the parties hereto shall be binding upon the Escrow Agent unless and until
written notice of such assignment shall be filed with the Escrow Agent.
IN WITNESS WHEREOF, Lessor, Lessee and Escrow Agent have caused this Escrow Agreement to be executed by their
duly authorized representatives, all as of the_day of 2001.
MUNICIPAL SERVICES GROUP,INC.
By
Title:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT,
CALIFORNIA
By
Title:
BANK ONE TRUST COMPANY,N.A.
By
Title:
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THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT— FOLLOW INSTRUCTIONS CAREFULLY
This Flnonomg Sa r, bnT Jo pr000r¢ed for fame Waw m to the Undo"ComnoMal Code.
m.d will r0. it offac6Va whh drtaln tar 6 h. dab of fi
A.NAME 8 TEL t OF CONTACT AT FILER IapdoMl) 8.FILING OFFICE ACCT,a (eptionell
C-RETURN COPY TOt (Norne and Moiling Add.asol
F
L J
D.OPTIONAL DMIGNATION Of epFeaNY: LESSORA.EBSEE CONSIOPop=N"NiF NCWUCC RING
1. DEBTOR'S EXACT FULL LEGAL NAME-inaarr ardy am debtor name 11 a or 161
Ia ENTITYS NAME
Truckee Donner Public Utility District
OR 1b.INDIVIDUALSLA9TNAME .. • HFQiT NAME MIDDLE NAME SUFFIX
1.MAILING ADONEW CRY STATE COUNTRY POST ALC00E
P. 0. Box 309 Truckee. CA USA 1509
1d.S.S.OR T.xrDA OP'f10NAL t o TYPE QP EMTZ 1 L ENTn Y'S STATE 10.ENTDyS OfIGANPA'f10NAL I.D.p,"on,
ADDIA.INFO HE Ofl tX7VNTflY OF
ENTRY oevTDR oRGANfSATION
2.ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME•irbert only ono debtor name 128 or 210
L.ENTITY'S NAME
OR 2b.tNO1M OUAL'S LAST PANE FIRST NAME MIDDIE NAME SUFRY
2a MAIUM AWRESS CITY STATE COUNTRY ALCODE
OR TA%IDl OPTIONAL 2w TM OF ENTRy 2f.BfRTYZB STATE 122.Q(TRY'e OREANQATIONAL I.D3,S Iffy
ADO•PLINVO RE OR COUNTRY OF'
ENTIT/DIMTOA ORGANIZATION NONE
3.SECURED PARTY'S(OPoGNAL SIP m,ITS TOTAL ASSIGNEE)EXACT FULL LEGAL NAME•inaon only ona sa=trod party mama 134 or 3b1
da ENTITY-8 NAME
OR 4b.INOIVIOVALZ5 LAST NAME FIRST NAME MIOOtE NPME SUFFIX
Oa A/AIUPG ADDRESS CRY STATE COUNTRY POSTAL CODE
4,TNo FINANCING STATEMENT coves Ow hA.Ind tYPa a r Nmna A p.oparryr.
6.CHECK Theo PNANCING STATEMENT is filmed by eMa 8autd Party 4fataad or"Doawr Ie pMadra aau,iW Mrear 7.If Mad M Fonda tchak and
OOX Ia)in aEmoma,Aaady oam)ebr va a as by Intear M onother ldnadcdon wnan R wa or ght Into#io man,or when the pvcunwoof Doeym.maory snow
Ilf apolcebil debbr'o beodan wao dagd ro ddo atata a dd In accortlamw wish aNer.blur OrorMtara rpddhbnd dab m W be radrdl Ala PN ar not Aaollcobis
6.PECUIRED SIGNATUREISI 8. ThM FINANCING STATEMFM Ia to boffd Don normal
to dal)In the REALUTATE RECORDS
Aomm Addad4n of"00.oid
9.Cheok to REQUEST SEARCH CERTIFICATEISI on 0abbrlol
Truckee Donner Public Utility District 'ADDITIONAL FEF1
(ddddnaV F1 Air Datsn Oabtar 1 nOdNor 3
. eIIY�OEA 6ae4 IIIC.
(1)FILING OFFICER COPY,—NATIONAL FINANCING STATEMENT(FORM UCC1)(TRANS)(REV, 12118/96)
ATTACHMENT D
Bank One Trust Company,N.A.
Escrow Fee Schedule
RE: Municipal Services Group/TRUCKEE DONNER PUBLIC UTILITY DISTRICT Escrow
AcceptanceFee...................---.............................................................................................................................$500
AnnualAdministration Fee...................................................................................................................................$1000
Out-of-pocket Expenses:
A charge of 5%of the total fees will be added to cover ordinary business expenses for postage, checks,
stationery, printing, messenger deliveries, and telephone. Expenses for extraordinary services, such as, but not
limited to, travel,legal,securities delivery,and legal notice publication will be billed additionally.
Extraordinary Time Charges:.................................................................................................$200 per hour(see below)
Additional Terms and Conditions:
Acceptance of the appointment is subject to document provisions being satisfactory to the Bank One.
After initial review and comment on the escrow document, any additional review, comment and negotiation or
material changes to the document will be billed as Extraordinary Time Charges.
The fees quoted in this letter apply to services ordinarily rendered in the administration of an agency account.
They are subject to reasonable adjustment based on final review of documents. Fees can also be adjusted when
the agent is called upon to undertake unusual duties or responsibilities, or as changes in law,procedures, or the
cost of doing business demand. Services in addition to and not contemplated in the agreement, including but
not limited to document amendments and revisions, nonstandard cash and/or investment transactions,
calculations,notices,reports,and default administration will be billed as Extraordinary Time Charges.
Disbursements under the document require 72 hours preparation; exceptions from this policy may result in the
application of Extraordinary Time Charges.
Unless otherwise indicated, the above fees provide for the establishment of one account. Additional sub-
accounts governed by the same escrow agreement may be established at an additional charge of $250 per
account.
The Acceptance Fee and the first year Annual Administration Fee are payable upon execution of the escrow
documents. In the event the escrow is not funded, the Acceptance Fee and all related expenses will not be
refunded. Annual Administration Fees cover a full year in advance, or any part thereof, and thus are not
prorated in the year of termination.
In determining the general schedule of fees, Bank One takes into consideration the various incidental benefits
accruing to it from the operation of the accounts. Collected funds must be on deposit prior to disbursement of
payments. In addition, Bank One has the use of funds deposited to pay checks that have not yet been presented
for payment. No interest shall be paid to the client on these funds, it being understood that the float on these
funds is considered in the calculation of our fees.
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