HomeMy WebLinkAbout9 Upgrade Glenshire Drive Well Agenda Item #
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PublicUtility District
Memorandum
To: Board of Directors
From: Mary Chapman, Administrative Services Manager
Date: November 1, 2002
Subject: Consideration of a resolution rescinding resolution 2002-12 and
approving a new agreement to finance the construction of a new
water transmission pipeline, one pump station and the upgrading of
the Glenshire Drive well
In April, the Board approved resolution number 2002-12 and financing documents for
funding the construction of the Glenshire water transmission main, two pump stations
and the upgrading of the Glenshire Drive well. It has taken a while to go through all of
the design, environmental, surveying and bidding processes. Municipal Services Group
had agreed to do the financing. However, we could not complete the loan until all of
these processes were complete. In the meantime, the number of pump stations required
changed from two pump stations to one pump station. The loan amount remains at
$1,740,000. Also, in the meantime, the interest rate has dropped from 5.98% to 5.11%.
Attached please find the new loan documents. Within the documents is a new resolution
that needs to be approved. The new resolution rescinds the previous resolution and
refers to the same dollar amount and new financing documents.
RECOMMENDATION:
1) To approve the attached resolution rescinding resolution 2002-12 and
approving a new lease agreement to finance the construction of the new water
transmission pipeline, one pump station and the upgrading of the Glenshire Drive
Well in the amount of$1,740,000.
2) To authorize the Board President and the District Clerk to execute the
attached Municipal Project Lease and Option Agreement #1552 for the
construction of a new water transmission pipeline, one pump station and the
upgrading of the Glenshire Drive Well after approval of the documents by legal
counsel.
3) To authorize the General Manager to sign draw requests and acceptance
certificates.
RESOLUTION NO. 02®
OF THE
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
RESCINDING RESOLUTION 2002-12 AND APPROVING A NEW
AGREEMENT TO FINANCE THE CONSTRUCTION OF A NEW WATER
TRANSMISSION MAIN, ONE PUMP STATION AND THE UPGRADING
OF THE GLENSHIRE DRIVE WELL
WHEREAS, on April seventeenth the Board of Directors adopted Resolution 2002-12
authorizing the District to enter into a Municipal Project Lease with Municipal Services
Group in the amount of $1,740,000 for the construction of a new water storage tank;
and
WHEREAS, while the project financing will remain at $1,740,000, the project financing
documents have changed sufficiently such that new lease purchase documents need to
be approved, and `
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 a new water
transmission main, one pump station and the upgrading of the Glenshire Drive well
described in the Municipal Project Lease and Option Agreement No. 1552 presented at
this meeting; and
WHEREAS, the Board of Directors has taken or will take the necessary steps under
applicable law, including legal bidding requirements, to arrange for the construction of
such Project; and
WHEREAS, the Board hereby directs its legal counsel to review the new 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 hereby rescinds Resolution 2002-12.
2 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 District Clerk 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.
3. 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.
4. 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.
5. 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.
6. 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 sixth day of November, 2002 by the following roll call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Nelson Van Gundy, President
ATTEST:
Peter L. Holzmeister, District Clerk
Agreement No,1552
MUNICIPAL PROJECT LEASE AND OPTION AGREEMENT
Lessor. Municipal Services Group,Inc.
5125 S.Kipling Parkway,Suite 300
Littleton,CO 80127
Lessee: Truckee Donner Public Utility District
P.O.Box 309
Truckee,CA 96161
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"Lessor"),and the Truckee Donner Public Utility District("Lessee"),a special district duty organized and existing
under the laws of the State of California(the"State").
WITN'ESSETH:
WHEREAS,Lessee desires to finance the design and construction of the Project(as herein defined)pursuant to the terms of this Agreement;and
WHEREAS, Lessor desires to lease the Project to lessee,and Lessee desires to lease the Project from Lessor,subject to the terns and conditions of and
I'm the purposes set forth in this Agreement;and
WHEREAS, Lessor,or its assignee,if any, simultaneously with the execution and delivery of this Agreement,shall enter into an escrow agreement(the
"Escrow Agreement")with an escrow agent designated by Lessor or its assignee,if any,(the"Escrow Agent")whereby Lessor,or its assignee,if any,shall deposit
monies sufficient to finance the Project,equipment,improvements,fixtures,and furnishings to be leased hereunder;and
WHERF,AS.Lessee is authorized underthe Constitution and laws of the State to enter into this Agreement ha the purposes set forth herein;
NOW,THEREFORE,for and in consideration of the premises hereinafter contained,the parties hereby agree as follows:
ARTICLE 1
COVENANTS OF LESSEE
Lessee represents,covenants and warrants,for the benefit of Lessor and its assignees,as follows:
(a) Lessee is a special district duly organized and existing under the laws of the State.
(b) Lessee will do or cause to be done all things necessary to preserve and keep in fill 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 between Lessor(as Ground
Lessee thereunder)and Lessee(as Ground Lessor thereunder)and the transactions contemplated hereby and thereby,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 tern of 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.
(f) The lease of the Project hereunder shall be evidenced by the Agreement.Exhibits and Ground Lease executed by Lessor 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. Tlme 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. 'I he 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 by Lessor,current financial statements,budgets,proof
of appropriation for the ensuing fiscal year 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 useful life of the Project will be at least 120%of the Lease Tenn.
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(it 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,rules 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,rates and regulations.
Lessee agrees to provide Lessor 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 Lessee to any federal,state or local agencies or authorities or which are received by Lessee
From any federal, state or local agencies or authorities with respect to the Project. Such copies shall be sent to Lessor concurrently with their being mailed or
delivered to the governmental agencies or authorities or within tan days after they are received by Lessee.
Lessee agrees to provide Lessor with copies of all emergency and hazardous chemical inventory forms(hereinafter"Notices")with respect to the Project
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 I101 et sea.,and to provide Lessor with copies of all such Notices subsequently sent to any such
governmental authority m agency as required pursuant to the Emergency Planning and Community Right-to-Know Act of 1986. Such copies of subsequent Notices
shall he sent to Lessor concurrently with their being mailed to any such governmental authority or agency.
Lessee hereby covenants and agrees to indemnify,protect and hold harmless Lessor 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 herein) or threat of a "Release," actual or
alleged, or any "Hazardous Substances" (as defined herein) upon or about the Project or respecting any products or materials previously or now located upon,
delivered to or in transit to or from the Project 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 to threat of a release or alleged release or threat of a release occurs as the result of the
negligence or misconduct of Lessee or any third party or otherwise,or(b)any violation,actual or alleged,of or any other liability under or in connection with any
Environmental Law(as defined herein),upon or about the Project or respecting any products or materials previously or now located upon,delivered to or in transit to
or from the Project,regardless of whether such violation or alleged violation has occurred prior to the date hereof or hereafter occurs and regardless of whether such
violation to alleged violation occurs as a result of the negligence or misconduct of Lessee or any third party or otherwise. ]his warranty shall survive any termination
of this Agreement.
ARTICLE 2
DEFINITIONS
The following terms will have meanings indicated below unless the context clearly requires otherwise:
"Acceptance Certificate"means the Acceptance Certificate attached hereto as Exhibit F relating to the Project whereby Lessee acknowledges acceptance
of the Project,
"Accrual Date"is the date when Lessee's obligation to pay rent accrues. The lease of the Project shall become effective on the Accrual Date,which shalt
be the Dated Date specified in Exhibit E hereto.
"Acquisition Cost(s)"means the total cost of acquiring,including any delivery charges,and preparing the Project for Lessee's use.
"Adjusted Base Interest Rate"means the Base Interest Rate as adjusted and as described in Exhibit E hereto.
"Base Interest Rate"means the interest rate as set forth in Exhibit E attached hereto.
"Code"means the Internal Revenue Code of 1986,as amended,and all regulations proposed or promulgated thereunder.
"Environmental Law" means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 at seq., the Resource
Conservation and Recovery Act,42 U.S.C.§9601 at 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 at 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 that may relate to or deal with the human
health or the environment.all as may be from time to time amended.
"Equipment"means the personal property described generally in Exhibit D to this Agreement as such may be modified in accordance with the terms
hereof from time to time,together with any and all pans, accessories, additions and attachments thereto,modifications,repairs,replacements and parts thereof and
substitutions therefor.
"Ground Lease"means a Ground Lease between Lessee and Lessor,substantially in the form attached hereto,pursuant to which Lessee has leased or will
lease to Lessor the site of any Project to portion of a Project which constitutes real property or improvements thereto, as such Ground Lease may be amended,
modified and supplemented from time to time.
"Hazardous Substance" means(i any dangerous, toxic or hazardous pollutant, contaminant, chemical, material or substance listed or identified in, or
regulated by,any Environmental Law, (it)any of the following, whether or not included in the foregoing:asbestos,urea formaldehyde,polychlorinated biphenyls
("PCBs"), nuclear had or material, chemical waste, radioactive material, explosives, known carcinogens, and petroleum products and by-products; and (in) any
"recognized environmental condition",as that term is defined by the American Society for Testing and Materials in its standards for environmental due diligence.
"Lease Tema"means the term of this Agreement from the Accrual Date to the Termination Date.
"Project"means the Equipment and the Project Site.
"Project Site"means the land described in Exhibit D hereto,which is the site on which the Project,improvements,fixtures,equipment and furnishings will
be constructed and installed and which is the subject of the Ground Lease.
"Purchase Price"means the amount that Lessee may,in its discretion,pay to Lessor in order to purchase the Project,as set forth in Exhibit E hereto.
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"Rental Payments"mean the rental payments payable by Lessee for the Project pursuant to the provisions of this Agreement during the Lease Term,
payable in consideration of the right of Lessee to use the Project during the Lease Feint. Rental Payments shall be payable by Lessee to Lessor or its assignee in the
amounts and at the times during the Lease Term as set forth in the Exhibit E made a part of this Agreement,
"Termination Date"means November 15,2017,or such other date as specified in Article 11.Option to Purchase.
"Vendor/Contractor" means (i)the developer of the Project, if any, as well as the agents or dealers of the manufacturer/contractor from whom Lessee
purchased or is purchasing the Project.
ARTICLE
DEPOSIT OF MONIES;ACQUISITION AND LEASE OF PROJECT
Section 3.01. D°nosit of Moues Transfers Upon Acceptance. In the event an Escrow Agreement is entered into pursuant to this
Agreement,Lessor,or its assignee,if any,shall cause to be deposited in the Acquisition Fund created under such Escrow Agreement and held by the Escrow Agent,
the amount specified in the Exhibit E,Schedule of Payments.
Upon the expiration of eighteen months from the execution date of the Escrow Agreement,unless notified earlier by Lessor and Lessee,the Escrow Agent
shall apply any monies in the Acquisition Fund—representing the contract price to have been paid to the Vendors)/Contraetorbd for any portion of the Project for
which Lessee has not executed an Acceptance Certificate—as set forth in the Escrow Agreement.
Section 3.02, Lessee i A¢rut- Aeuuis Y ofthe Protect. Lessor hereby appoints Lessee as its agent solely for the purpose of acquiring
the Project,and Lessee hereby accepts such appointment. Lessee and Lessor will do all things necessary to effect the acquisition of the Project free and clear of any
encumbrances and subject the same to the leaschold interests contemplated hereunder. Lessor agrees to acquire the Project pursuant to Lessee's specifications.
Lessor shall not be responsible for the obligations of Vendor/Contractors,and a failure by the Vendors/Contractors to perform shall not affect Lessee's obligation to
make Rental Payments under this Agreement. Lessee agrees that the Project will be acquired in accordance with the terms,conditions and specifications therefor and
on file with Lessor.
Upon completion of acquisition of the Project satisfactory to Lessee,Lessee shall deliver to the Escrow Agent an executed Acceptance Certificate.
Section 3.03. Payment ofAequisi[ion Costs. Payment to the Vendor(s)/Contractor(s) of the Acquisition Cost(s) of acquiring the
Project shall be made from the monies deposited with the Escrow Agent,as provided in Section 3.01,which shall be disbursed for that purpose in accordance with
and upon compliance with the Escrow Agreement. Said funds shall be disbursed to the Vendors)/Contractor(s)at the direction of Lessee. In the event the amount
specified in Section 3.01 to be deposited in the Acquisition Fund is insufficient to pay all.Acquisition Costs, Lessee shall pay the remaining Acquisition Costs from
its own funds.
ARTICLE 4
LEASE TERM
Section 4.01. Lease of Protect. Lessor hereby demises, leases, and lets to Lessee, and Lessee rents, leases, and hires from Lessor, the (i)
Equipment and(it)the Project Site and the improvements and fixtures of Lessee to the Project, and any equipment and furnishings,if any,thereon leased to the
Lessor(as ground lessee)pursuant to the Ground Lease(the"Leased Premises"), in accordance with the provisions of this Agreement, to have and to hold for the
Lease Tenn.
Section 4.02. Commencement of Lease Term, The Lease Term shall commence on the Accrual Date and shall terminate as specified in Section
4.03 hereof.
Section 4.03. Termination of tease Term. The Lease Term will terminate upon the earliest of any of the following events:
(a) the expiration of the Lease Term on the Termination Date;
(b) the exercise by Lessee of the option to purchase the Project granted under the provisions of Articles 9 to I 1 hereof.
(e) a Default by Lessee and Lessees election to terminate this Agreement under Article 13;or
(d) the payment by Lessee of all Rental Payments, late payment charges, past due finance charges, monies due to release liens of any kind
whatsoever,or other taxes and utilities authorized at required to be paid by Lessee hereunder.
ARTICLE 5
ENJOYMENT OF PROJECT
Lessor hereby covenants to provide Lessee during the Lease Term with quiet use and enjoyment of the Leased Premises,and Lessee shall during the Lease
Term,peaceably and quietly have and hold and enjoy the Leased Premises, without suit, trouble or hindrance from Lessor, except as expressly set north in this
Agreement.
Lessor shall have the right at all reasonable times during business hours to enter into and upon the property site of Lessee for the purpose of inspecting the
Project.
ARTICLE 6
RENTAL PAYMENTS
Section 6,01. Rental Pa ru nts Co sftute z Firm Obl gation of[essee. Lessor and Lessee understand and intend that the obligation of
Lessee to pay Rental Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of
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any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein
constitute
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a pledge of the general tax revenues,funds at monies of Lessee. Rental Payments shall be in consideration of Lessee's use of the Equipment during the year in which
such payments are due.
Section 6.02, Payment of Rental Payments. Lessee shall pay Rental Payments from its Glenshire Water System Sinking Fund and any other
legally available monies from its Water Enterprise General Fund,in lawtid money of the United States of America to Lessor or,in the event of assignment by Lessor,
to its assignee, in the amounts and no later than the dates set forth in Exhibit E hereto. In the event Lessor or its assignee does not receive Rental Payments within
such period of time,then and in such event, a twenty-five dollar(525.00) late charge will be assessed plus finance charges based on the applicable unpaid Rental
Payment amount at the rate equal to the lesser of(1)twelve percent(12%)or(2)the highest rate allowed by the laws of the State. Lessee agrees to charge rates,tolls,
fees,and charges for use of the Project and Equipment and other activities sufficient to pay Rental Payments and operating and maintenance expenses related to the
Project.
Section 6,03. Interest and Principal Co nponents A portion of each Rental Payment payable hereunder is paid as,and represents payment
of, interest, and the balance of the Rental Payment payable hereunder is paid as, and represents payment of,principal. Exhibit E hereto sets forth the interest
component and the principal component of each Rental Payment during the Lease'Ferm.
Section 6.04. Rental Payments to be Unconditional The obligations of Lessee to make payment of the Rental Payments required tinder this
Article 6 and other sections of this Agreement,and to peforrn 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 Lessor,any Vem odContractor,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 7
LEASEHOLD INTEREST;TITLE TO THE EQUIPMENT;SECURITY INTEREST
Section TOO Leasehold Interest. Lessee agrees to execute such documents, including financing statements,deeds, affidavits, 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 Site and in all
additions,attachments,accessions,and substitutions thereto,and upon assignment,the interest of any assignees of Lessor,in the Project.
Section 7.02. Title to the F,uuinment During the term of this Agreement,title to the Equipment and any and all additions,repairs,replacements or
modifications shall vest in Lessee,subject to the rights of Lessor hereunder. Following an event of default as set forth in Section 13.01 or upon termination of this
Agreement for any reason other than Lessee%rights under Section 4.03 (a), (b) or (c), title to the Equipment shall immediately vest in Lessor, and Lessee will
reasonably surrender possession of the Equipment to Lessor.
Section 7.03. Liens and Encumbrances to Title. During the Lease Tern, Lessee shall not place or permit any liens or encumbrances to title on the
Equipment 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 Equipment or the Project Site. Lessee shall promptly discharge any mechanics'or materialmen's liens placed on the Equipment or the Project Site and shall
cause any tenants occupying the Project promptly to discharge any such lien arising out of such use or occupancy. The obligation of Lessee under this Section to discharge
any mechanics'or materialmen's liens shall survive the termination of this Agreement.
Section 7.04. Security Interest. To secure the payment of all of Lessee's obligations under this Agreement,Lessee grants to Lessor a security
interest constituting a first lien on the Project and on all additions,attachments,accessions and substitutions thereto,and on any proceeds therefrom. Lessee agrees to
execute such additional documents,including financing statements, affidavits, notices and similar instruments, in form satisfactory to lessor, and to pay all fees
required to establish and maintain Lessor's security interest,and upon assignment,the security interest of any assignees of Lessor,in the Equipment.
ARTICLE 8
MAINTENANCE;MODIFICATION;TAXES;
INSURANCE AND OTHER CHARGES
Section 8.01. Maintenance of Project by Lessee. Lessee agrees that at alltimes 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 as Lessor shall require.
Section 8.02. PoxesOhr nl Chargedilit a es 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 Projector any part of the Leased
Premises 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 or any part of the Leased
Premises 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 or any part of the Leased Premises;as well as all gas,water,steam,electric,heat,power,telephone,utility,and other charges incurred in the operation,maintenance,
use, occupancy, and upkeep of the Project or any part of the Leased Premises; provided that, with respect to any governmental charges that may lawfully be paid in
installments over a period ofyears,Lessee may elect to pay only such installments as have accrued during the time this Agreement is in effect.
Section 8.03, Provisions Regarding Insurance. .At its own expense. Lessee shall cause casualty, public liability, contractor's general
liability and builders risk,if applicable,and property damage insurance to be canned 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 temr is hereinafter defined)of the Project,and to protect Lessor front liability in all events and which name Lessor
and/or its assignee as additional insured and as a Lender Loss Payee thereunder. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this
Agreement. Lessee shall furnish to Lessor 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.
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The term"Full Insurable Value"as used 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 as to make 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 8.0,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 of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancellation.
Section 8.04. Advances. In the event Lessee shah fail to maintain the fir]]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 advanced thereforby Lessor shall
become additional rent for the Lease Term which amounts,together with interest thereon at the rate of 12%peratmum,Lessee agrees to pay.
Section 8.05. Tax Covenants. Lessee will not make or direct any use of the proceeds of the obligation provided 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 hinds,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
(L 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 governments]or proprietary functions of Lessee,and the Project will not be
used in it trade or business of any person or entity other than Lessee on a basis different from the general public. Lessee will not use or permit 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 of9nterest received
hereunder in gross income ter federal income tax purposes under Section 103 of the Code.
Lessor or its assianee(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 of Lessor or its assignee,if any,for federal income tax purposes.
ARTICLE 9
DAMAGE,DESTRUCTION AND CONDEMNATION:
USE OF NET PROCEEDS
Section 9.01. Dalliance Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Project by making payment
of the 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 shah 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 and Lessor 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 attomeys'fees)incurred in the collection of such claim or award.
Lessee hereby waives any rights to condemn or otherwise exercise any power of eminent domain With respect to the Project unless the proceeds of such
condemnation shall be not less than the amounts necessary to pay the amount specified in Article 11 hereof.
Section 9.02. Insufficienev 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,exclusively from legally available monies in its general fund,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. DisclaimerofWaranties. 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 SUPFABLE FOR
ITS PURPOSE, AND THAT FOR PURPOSES OF THIS AGREEMENT, LESSOR AND ITS ASSIGNEES) MAKE NO WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED WITH RESPECT TO THE PROJECT,INCLUDING WITHOUT LIMITATION,ITS VALUE,DESIGN,CAPACITY,CONDI IION,
ME,'RCHANI ABILITY 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 shalt Lessor or its
assignee, if any,be liable for any incidental, 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 Tenn,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,which Lessor 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 against Lessor or an assignee,if any,of Lessor,nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with
respect to this Agreement.induction the right to receive full and timely payments hereunder_ Lessee expressly acknowledges that an assignee,if any,of Lessor makes,and
has made,no representation or warranties whatsoever as to the existence or availability of such warranties of the Project.
Section 10.03. Cseofthe Pmiect. 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 ofthe Project;provided,however,that Lessee may contest in good faith the
validity or application of any such law or rate 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.
6
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 Co nstmetion of Protect 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 by Lessor,and hereby covenants that any improvements which may be consnucfed or installed thereon will be constructed
and installed in accordance with all applicable Taws 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 perfomtance 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 that Lessor shall have the right at
any time during regular business hours to enteronto the property for the purposes of observing the construction activity thereon.
ARTICLE 11
OPTION TO PURCHASE
Provided Lessee provides Lessor with 30 days prior written notice,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 I L At the request of Lessee,Lessor's
leasehold interest in the Project will be terminated and this Agreement shall terminate:
(a) at the end of the Lease'Perm,upon payment in full of all Rental Payments due hereunder,plus all past due charges and other amounts hereunder their
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.plus accmed
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
(d) if the Lease Tenn 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 plus all past due charges and
other amounts hereunder then due and owing,if any.
ARTICLE12
ASSIGNMENT,SUBLEASING,INDEMNIFICATION
AND MORTGAGING
Section 12.01_ Assignment by lam, ssor. This Agreement, and Lessor's right to receive payments hereunder, may be assigned and
reassigned in whole or in part to one or more assignees or subasssignees 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 name and address of the assignee or subassignee,and(it)in the event that such assignment or reassignment is made to a bank or
must 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,at cause to be maintained on behalf of and as agent for Lessee,a book-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 famish 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-offor counterclaim whatsoever(whether arising from a breach of this Agreement or otherwise)that Lessee may from time to time
have against Lessor,or the assignee. Lessee agrees to execute all documents,including notices of assignment and chattel mortgages or financing statements which may be
reasonably requested by lessoror its assignee to protect their interests in the Project and in this Agreement.
Section 12.02. No Sale Assignment m 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 of Lessor,which consent may be withheld in the total discretion of Lessor taking into account,among
other things,the treatment fro 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 indemnify,
Lessor 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 reform 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 hull payment ofall obligations under this Agreement to the termination of the Lease Term for any reason.
ARTICLE 13
EVENTS OF DEFAULT AND REMEDIES
Section 13.0L Events of Default Defined. The following shall be"events of default"under this Agreement and the terms"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;
(b) Failure by Lessee to observe and perform any covenant,condition or agreement on its part to be 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,umless
Lessror 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
7
applicable period,Lessor will not unreasonably withhold its consent to an extension of such time if corrective action deemed appropriate by Lessor in its sole discretion,is
instituted by Lessee within the applicable period and diligently pursued until the Default is corrected;
(c) Failure by Lessee to maintain insurance on the Project in accordance with Section 8.03 hereof;or
(d) Initiation by Lessee of a proceeding under any federal or state bankruptcy or insolvency law seeking relief under such laws concerning its
indebtedness.
The foregoing provisions of this Section 13.01 are subject to,if by reason of force maieure Lessee is unable in whole in in part to carry 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 tern "force malaria" as 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 situated,without any court order or otherprocess
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 tern 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(i)the rent and other amounts
due and payable by Lessee through the balance of the Lease Term,and(if)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 eowt action to enforce performance 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 to 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 to Lessor any unpaid portion of the Purchase Price.
All of Lessee's right,title and interest in the Project,the possession of which is retaken by Lessor 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,at Lessee's sole cost and expense.
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 disposition 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 of judgment against Lessee shall not bar Lessor's right to repossess the Project. No delay or omission to exercise any right or power scanning 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, cenifieates or other communications hereunder shall be sufficiently given and shah be deemed given when
delivered or mailed by certified mail,postage prepaid,to the parties at their respective places of business.
Section 14.02. f3analing Effect This Agreement shall inure to the benefit of and shall be binding upon Lessor 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 unenforceable by 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. 'ihe terns of this Agreement shall not be waived,altered modified, supplemented or amended in any manner
whatsoever except by written instrument soared by Lessor and Lessee,not shall any such amendment that affects the rights of Lessor's assignee be effective without such
assignee's consent.
Section 14.O5. Execution in Counterparts This Agreement may be executed in several counterparts,each of which shall be an original and all of
which shall constitute but one and the same 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 convenience only and in no way define, limit or describe the scope or
intent of any provisions or sections of this Agreement.
8
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 chance of terms of this Agreement shall bind either parry 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]eased 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.
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
By:
'I itle:
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.
By:
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:
9
EXHIBITS
TO
MUNICIPAL PROJECT LEASE AND OPTION AGREEMENT NUMBER 1552
Entered into as of November 15,2002,(the"Dated Date"),whether or not executed as of such date,by and between Lessor and Lessee,these Exhibits
are made a part of Municipal Project Lease and Option Agreement Number 1552 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:
10
EXHIBIT A - Page 1 of 2
RESOLUTION NO. 02�
OF THE
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
RESCINDING RESOLUTION 2002-12 AND APPROVING A NEW
AGREEMENT TO FINANCE THE CONSTRUCTION OF A NEW WATER
TRANSMISSION MAIN, ONE PUMP STATION AND THE UPGRADING
OF THE GLENSHIRE DRIVE WELL
WHEREAS, on April seventeenth the Board of Directors adopted Resolution 2002-12
authorizing the District to enter into a Municipal Project Lease with Municipal Services
Group in the amount of $1,740,000 for the construction of a new water storage tank;
and
WHEREAS, while the project financing will remain at $1,740,000, the project financing
documents have changed sufficiently such that new lease purchase documents need to
be approved, and
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 a new water
transmission main, one pump station and the upgrading of the Glenshire Drive well
described in the Municipal Project Lease and Option Agreement No. 1552 presented at
this meeting; and
WHEREAS, the Board of Directors has taken or will take the necessary steps under
applicable law, including legal bidding requirements, to arrange for the construction of
such Project; and
WHEREAS, the Board hereby directs its legal counsel to review the new 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 hereby rescinds Resolution 2002-12.
2 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 District Clerk 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.
3. 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
EXHIBIT A - Page 2 of 2
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.
4. 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.
5. 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.
6. 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 sixth day of November, 2002 by the following roll call vote:
AYES:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
Nelson Van Gundy, President
ATTEST:
Peter L. Holzmeister, District Clerk
EXHIBIT B
OPINION OF LESSEE'S COUNSEL
(Letterhead of Lessee's Counsel)
Date
Municipal Services Group, Inc.
5125 S. 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. 1552 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:
I. 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 which 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 obligation 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 which 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 assiguee(s)of Municipal Services Group,Inc..
Attorney for Lessee
Agreement No.1552
EXHIBIT C
CERTIFICATE AS TO ARBITRAGE
1, 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 1552 (the "Agreement") by and between Lessee and Municipal Services Group, Inc. as lessor ("Lessor") HEREBY CERTIFY that:
Capitalized terms used but not defined herein shall have the meaning provided in the Agreement.
1. 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 in amounts equal to the required payments under the Agreement. No other monies, except as set forth in the Agreement,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 ($ ) are expected to pay the costs of the construction of the Project($ )
and the financing and legal costs with respect of the execution and delivery of the Agreement.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. 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.1552
EXHIBIT D
DESCRIPTION OF PROJECT
The Project which is the subject of the attached Municipal Project Lease and Option Agreement is as follows:
Glenshire Area Projects,to include:
Construction of 13,000 feet of water transmission main
Construction of one pump station
Upgrade of the Glenshire Drive Well
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:
Agreement No.1552
EXHIBIT E
SCHEDULE OF PAYMENTS Page 2 of 2
Base Interest Rate: 5.11%
U. S.Treasury Note Yield: %
U. S.Treasury Note Index Percent: %
Adjusted Base Interest Rate:
Dated Date: November 15,2002
Termination Date: November 15,2017
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:
EXHIBIT E
SCHEDULE OF PAYMENTS
DATED DATE: Nov 15,2002
Truckee Donner Public Utility District
PMT PAYMENT PRINCIPAL INTEREST PURCHASE '..
# DATE PAYMENT PORTION PORTION PRICE
1 15 - Feb-03 41,696.49 19,467.99 22,228.50 1,796,746.98
2 15 - May-03 41,696.49 19,716.70 21,979.80 1,775,039.29
3 15 - Aug-03 41,696.49 19,968.57 21,727.92 1,753,090.11
4 15 - Nov-03 41,696.49 20,223.67 21,472.82 1,730,896.74
5 15 - Feb-04 41,695.49 20,482.03 21,214.46 1,708,456.47
6 15 - May-04 41,696.49 20,743.69 20,952.80 1,685,766.55
7 15 - Aug-04 41,696.49 21,008.69 20,687.80 1,662,824.21
8 15 - Nov-04 41.696.49 21,277.08 20,419.41 1,639,626.64
9 15 - Feb-05 41,696.49 21,548.89 20,147.60 1,616,170.99
10 15 - May-05 41,696A9 21,824.18 19,872.31 1,592,454.40
11 15 - Aug-05 41,696.49 22,102.98 19,593.51 1,568,473.96
12 15 - Nov-05 41,696.49 22,385.35 19,311.14 1,644,226.74
13 15 - Feb-06 41,696.49 22,671.32 19,025.17 1,519,709.77
14 15 - May-06 41,696.49 22,960.95 18,735.54 1,494,920.05
15 15 - Aug-06 41,696.49 23,254.27 18,442.22 1,469,854,54
16 15 - Nov-06 41,696.49 23,551.35 18,145.14 1,444,510.18
17 15 - Feb-07 41.696.49 23,852.21 17,844.28 1,418,883.86
18 15 - May-07 41,696.49 24,156.93 17,539.56 1,392,972.45
19 15 - Aug-07 41,696.49 24,465.53 17,230.96 1,366,772.78
20 15 - Nov-07 41,696.49 24,778.08 16,918.41 1,340,281.63
21 15 - Feb-08 41,696.49 25,094.62 16,601.87 1,313,495.77
22 15 - May-08 41,696.49 25,415.20 16,281.29 1,286,411,92
23 15 - Aug-08 41,696.49 25,739.88 15,956.61 1,259,026.76
24 15 - Nov-08 41,696.49 26,068.71 15,627.78 1,231,336.94
25 15 - Feb-09 41,696.49 26,401.74 15,294.75 1,203,339.07
26 15 - May-09 41,696.49 26,739.02 14,967.47 1,175,029.72
27 15 - Aug-09 41,696.49 27,080.61 14,615.88 1,146,405,43
28 15 - Nov-09 41,696.49 27,426.56 14,269.93 1,117,462.70
29 15 - Feb-10 41,696.49 27,776.94 13,919.55 1,088,197.98
30 15 - May-10 41,696.49 28,131.79 13,564.70 1,058,607.69
31 15 - Aug-10 41,696.49 28.491.17 13,205.32 1,028,688.21
32 15 - Nov-10 41,696.49 28,855.15 12,841.34 998,435.87
33 15 - Feb-11 41,696.49 29,223.77 12,472.72 967,846.98
34 15 - May-11 41,696.49 29,597.11 12,099.38 936,917.78
35 15 - Aug-11 41,696.49 29,975.21 11,721.28 905,644.50
36 15 - Nov-11 41,696.49 30,358.14 11,338.35 874,023.30
37 15 - Feb-12 41,696.49 30,745.97 10,950.52 842,050.32
38 15 - May-12 41,696.49 31,138.75 10,557,74 809,721.64
39 15 - Aug-12 41,696.49 31,536,54 10,159,95 777,033.30
40 15 - Nov-12 41,696.49 31,939.42 9,757.07 743,981,30
41 15 - Feb-13 41,696.49 32,347.45 9,349.04 710,561-60
42 15 - May-13 41,696.49 32,760.69 8,935.80 676,770.10
43 15 - Aug-13 41,696.49 33,179.21 8,51Z28 642,602.67
44 15 - Nov-13 41,696.49 33,603.07 8,093.42 608,055.13
45 15 - Feb-14 41,696.49 34,032.35 7,664.14 573,123.25
46 15 - May-14 41,696.49 34,467.11 7,229.38 537,802.75
47 15 - Aug-14 41,696.49 34,907.43 6,789.06 602,089.31
48 15 - Nov-14 41,696.49 35,353.37 6,343.12 465,978.56
49 15 - FebA5 41,696.49 35,805.01 5,891.48 429,466.08
50 15 - May45 41,696.49 36,262.42 5,434.07 392,547.40
51 15 - Aug-15 41,696.49 36,725.67 4,970.82 355,218.00
52 15 - Nov-15 41,696.49 37,194.84 4,501.65 317,473.31
53 15 - Feb-16 41,696A9 37,670.01 4,026A8 279,308.71
54 15 - May-16 41,696.49 38,151.24 3,545.25 240,719.53
55 15 - Aug-16 41,696.49 38,638.63 3,057.86 201,701.04
56 15 - Nov-16 41,696.49 39,132.23 2,564.26 162,248.47
57 15 - Feb-17 41,696.49 39,632A5 2,064.34 122,356.99
58 15 - May-17 41,696.49 40,138.45 1,558.04 82,021.72
59 15 - Aug-17 41,696.49 40,651.22 1,045.27 41,23Z72
60 15 - Nov-17 41,696.49 41,170.50 525.99 0.00
TOTAL 2,501,789.60 1,740,000.00 761,789.60
LESSEE: Truckee Donner Public Utility District
BY:
TITLE:
Agreement No.1552
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:
Agreement No.1552
EXHIBIT G
INSURANCE COVERAGE REQUIREMENTS
TO: Municipal Services Group,Inc.
5125 S. Kipling Parkway,Suite 300
Littleton,CO 80127
FROM: Truckee Donner Public Utility District
P.O.309
Truckee,CA 96161
SUBJECT: INSURANCE COVERAGE REQUIREMENTS
1. 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
C. Business interruption insurance
d. Contractor's general liability and builder's risk insurance
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:
GROUND LEASE
This Ground Lease(the"Ground Lease").dated as of November 15,2002,is entered into by and between the Truckee Donner Public Utility
District,existing pursuant to the constitution and laws of the state of California,("District")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 equipment and sublease the Land to the District 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 District hereby leases to MSG, and MSG hereby rents and leases from the District the Land and all improvements,
fixtures and equipment of the District located on the Land(the"Premises"),on the terms and conditions hereinafter set forth.
Section 2. Tenn. The term of this Ground Lease shall commence as of November 15,2002.and shall end on November 15.2032, 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 and the Premises to MSG,the receipt
and sufficiency of which are hereby acknowledged by the District,MSG,or its assignee,if any,shall:
(a) Simultaneously with the delivery of this Ground Lease,enter into the Agreement;and
(b) Deposit funds 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 District warrants that it is the owner of unencumbered fee title to the Land.
Section 5. Assignments and Subleases. MSG,or its assigns,may assign its rights under this Ground Lease or sublet the Project without the
written consent of the District(i) in connection with any assignment of its rights under the Agreement, (it) if the Agreement is terminated for any
reason other than as described in Section 6 hereof,or(in)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 District 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 Xl of the Agreement, then this Ground Lease shall be considered assigned to the District and terminated through merger of the
leasehold interest with the fee interest if the District 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 tort 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 and any equipment described in the Agreement shall remain thereon and
title thereto shall vest with the District.
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 shall 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 District shall recognize the assignee/purchaser as lessee hereunder.
Section 7. Default. The District 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 District 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
District pursuant to said option,then the District 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.
Sections. 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 District's option to purchase)to sublease the Project.
Section 9. Taxes. The District covenants and agrees to pay any and all assessments of any kind or character and also all taxes levied or
assessed upon the Land or any part of the Premises.
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, and,to the extent permitted by law,the District 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 anytime
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 ofthis 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-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.
The District 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 District to any federal,state or local agencies or
authorities or which are received by the District from any federal,state or local agencies or authorities with respect to the Land. Such copies shall be
sent to MSG concurrently with copies being mailed or delivered to the governmental agencies or authorities or within ten days after they are received
by the District.
The District 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. sea., 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]986. Such copies of subsequent Notices shall be sent to MSG concurrently with their being mailed to any such governmental authority
or agency.
The District 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"(i)any dangerous,toxic or hazardous pollutant,contaminant,chemical,
material or substance listed or identified in, or regulated by, any Environmental Law, (it) 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 District 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 in seq.,the Toxic Substances Control Act,15 U.S.C. §2601 at 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 at 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
District 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 District 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 District Term: Rental. Contemporaneously herewith MSG and the District will execute the Agreement
whereby MSG subleases back to the District and the District subleases from MSG the Premises,and MSG leases to the District and the District leases
from MSG the Project and the Premises in accordance therewith. Title to the Premises shall remain with the District at all times. The Agreement
between the parties includes the option of the District,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 District.
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
By:
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.
By:
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