HomeMy WebLinkAboutRES NO 97-84RESOLUTION NO. 97-84
OF THE
CITY COUNCIL
OF THE
CITY OF BAKERSFIELD
AUTHORIZING THE ISSUANCE AND SALE OF CITY OF BAKERSFIELD
HOSPITAL REVENUE BONDS (GREATER BAKERSFIELD MEMORIAL
HOSPITAL), SERIES 1984, THE EXECUTION AND DELIVERY OF AN
INDENTURE AND LOAN AGREEMENT AND
CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH
WHEREAS, the City of Bakersfield (the "City") is a
municipal corporation and charter city duly organized and
existing under a freeholders' charter pursuant to which the
City has the right and power to make and enforce all laws and
regulations in respect to municipal affairs and certain other
matters in accordance with and as more particularly provided
in Sections 3, 5 and 7 of Article XI of the Constitution of
the State of California and Section 12 of the Charter of the
City (the "Charter");
WHEREAS, the City Council of the City (the
"Council"), acting under and pursuant to the powers reserved
to the City under Sections 3, 5 and 7 of Article XI of the
Constitution of the State of California and Section 12 of the
Charter has established by adoption of the City of
Bakersfield Health Facilities Financing Law (the "Law") a
procedure for the authorization, issuance and sale of revenue
bonds by the City for the purpose, inter alia, of providing
financing for health facilities as specified therein;
WHEREAS, the City has determined to engage in a
program of making loans to health facilities pursuant to the
Law, and has determined to borrow money for such purpose by
the issuance of revenue bonds as authorized by the Law;
WHEREAS, the City has determined to issue a series
of such revenue bonds, designated as the "City of Bakersfield
Hospital Revenue Bonds (Greater Bakersfield Memorial
Hospital), Series 1984" (the "Bonds"), in an aggregate
principal amount of thirty-five million dollars ($35,000,000)
for the purpose of providing moneys to make a loan to Greater
Bakersfield Memorial Hospital Association (the "Corporation")
to assist in financing the construction, furnishing and
equipping of certain improvements (the "Project") to the
Corporation's existing health facility in Bakersfield;
WHEREAS, assisting in the financing of such
improvements promotes the purposes of the Law, is in the
public interest, serves a public purpose, promotes the
health, welfare and safety of the citizens of the City, and
constitutes a municipal affair; and
WHEREAS, all acts, conditions and things required
by the Law and by all other laws of the State of California
to exist, to have happened or to have been performed
precedent to and in connection with the issuance of the Bonds
exist, have happened, and have been performed in regular and
due time, form and manner as required by law, and the City is
now duly authorized and empowered, pursuant to each and every
requirement of law, to issue the Bonds for the purpose, in
the manner and upon the terms herein provided;
NOW, THEREFORE, BE IT RESOLVED by the City Council
of the City of Bakersfield, as follows:
Section 1. The Council does hereby find and
declare that the above recitals are true and correct and that
the issuance of the Bonds is a municipal affair and a proper
public purpose.
Section 2. Pursuant to the Law, the Bonds shall be
issued in the aggregate principal amount not to exceed
thirty-five million dollars ($35,000,000).
Section 3. The proposed form of Indenture, dated
as of December 1, 1984, between the City and Crocker National
Bank, as trustee (the "Trustee"), presented at this meeting,
is hereby approved, and the Mayor, City Manager or Assistant
City Manager and City Clerk or Deputy City Clerk are hereby
authorized and directed, for and in the name and on behalf of
the City, to execute, acknowledge and deliver to the Trustee
an Indenture in substantially said form with such changes
therein as the officers executing the same, with the advice
of the City Attorney, may approve, such approval to be
conclusively evidenced by the execution and delivery
thereof. The date, maturity date, interest rate or rates,
privileges, manner of execution, place or places of payment,
terms of redemption and other terms of the Bonds shall be as
provided in said Indenture, as finally executed.
Section 4. Crocker National Bank, San Francisco,
California, is hereby appointed as trustee for the City and
the holders of the Bonds, with the duties and powers of such
trustee as set forth in the Indenture.
Section 5. The Mayor and the City Clerk are hereby
authorized and directed to execute, for and in the name and
on behalf of the City and under its seal, the Bonds in an
aggregate principal amount not to exceed thirty-five million
2
dollars ($35,000,000) in accordance with the terms of the
Indenture.
Section 6. The proposed form of Loan Agreement,
dated as of December 1, 1984, between the City and Greater
Bakersfield Memorial Hospital Association, presented at this
meeting is hereby approved, and the Mayor, City Manager or
Assistant City Manager and the City Clerk or Deputy City
Clerk are hereby authorized and directed, for and in the name
and on behalf of the City, to execute, acknowledge and
deliver a Loan Agreement in substantially said form, with
such changes therein as the officers executing the same, with
the advice of the City Attorney, may approve, such approval
to be conclusively evidenced by the execution and delivery
thereof.
Section 7. The Bonds, when executed pursuant to
Section 5 hereof, shall be delivered to the Trustee for
authentication. The Trustee is hereby requested and directed
to authenticate the Bonds by executing the Trustee's
certificate of authentication appearing thereon, and to
deliver the Bonds~ when duly executed and authenticated, to
the purchaser or purchasers thereof, in accordance with
written instructions executed on behalf of the City by the
Mayor or City Manager and the City Clerk or Deputy City
Clerk, which instructions said officers are hereby authorized
and directed, in the name and on behalf of the City, to
execute and deliver to the Trustee. Said instructions shall
provide for the delivery of the Bonds to the purchaser or
purchasers thereof upon payment of the purchase price thereof.
Section 8. The officers of the City are hereby
authorized and directed, jointly and severally, to do any and
all things and to execute and deliver any and all documents
which they may deem necessary or advisable in order to
consummate the issuance, sale and delivery of the Bonds and
otherwise to effectuate the purposes of this resolution.
Section 9. This resolution shall take effect
immediately upon its passage.
I HEREBY CERTIFY that the foregoing Resolution was
passed and adopted by the Council of the City of Bakersfield
at a regular meeting thereof held on the 12th day of
December, 1984, by the following vote:
AYES:
NOES:
ABSENT:
AYES: COUN(~Ii.M£N: BARTON. CHILDS. CHRtSTENSEN, DICKERSON. MOORE, RATTY,
NOES: CO, U~.,MEN: ~.~,~ I~ ....
A~SEk'1': ~OUf~::~Ltd~N: /')./~/';' ~'
AI~?AtNINO: COUNG~LMEN: /'~/?
ABSTAINING:
K and Ex Officio Clerk of the
Council of the City of Bakersfield
APPROVED this 12th day of December
MAYOR o~'~he City of B
/
1984
APPROVED as to form:
OH&S
Draft
12/01/84
CITY OF BAKERSFIELD
and
GREATER BAKERSFIELD MEMORIAL HOSPITAL ASSOCIATION
LOAN AGREEMENT
Dated as of December 1, 1984
$35,000,000
CITY OF BAKERSFIELD HOSPITAL REVENUE BONDS
(GREATER BAKERSFIELD MEMORIAL HOSPITAL)
SERIES 1984
TABLE OF CONTENTS
Section Page
Parties ......................... 1
Preambles ........................ 1
1.1 Definitions
ARTICLE I
DEFINITIONS
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION;
FINDINGS OF THE CITY
2.1 Representations and Warranties of the
Corporation .................... 2
2.2 Findings of the City ................ 5
ARTICLE III
ISSUANCE OF BONDS; LOAN OF PROCEEDS
3.1 The Bonds ..................... 5
ARTICLE IV
REPAYMENT OF LOAN
4.1 Payments to Revenue Fund .............. 5
4.2 Additional Payments ................ 6
4.3 Letter of Credit .................. 8
4.4 Gross Revenue Fund ................. 10
4.5 Depreciation Reserve Account ............ 12
4.6 Obligations of the Corporation
Unconditional; Net Contract ............ 13
4.7 Prepayment ..................... 13
4.8 Security for the Corporation's Obligations ..... 14
4.9 Conversion to Fixed Interest Rate ......... 14
ARTICLE V
THE PROJECT
5.1 Disbursements from the
Project Fund ................... 15
5.2 Prohibited Uses .................. 15
Section Page
ARTICLE VI
PARTICULAR COVENANTS
6.1 Maintenance of Corporate Existence
of the Corporation; Consolidation, Merger,
Sale or Transfer Under Certain Conditions ..... 15
6.2 Accreditation and Licensing ............ 16
6.3 Rates and Charges; Debt Coverage .......... 17
6.4 Limitation on Encumbrances ............. 18
6.5 Accounting Records, Financial
Statements and Budget ............... 18
6.6 Tax Covenants ................... 19
6.7 Limitation on Disposition of Properties ...... 20
6.8 Compliance with United States and
California Constitutions ............. 21
6.9 Special Services Covenant ............. 21
6.10 Additional Fund .................. 22
ARTICLE VII
MAINTENANCE, TAXES, INSURANCE AND CONDEMNATION
7.1 Maintenance and Operation of the
Health Facility .................. 22
7.2 Taxes, Assessments, Other Governmental
Charges and Utility Charges ............ 23
7.3 Insurance Required ................. 23
7.4 Worker's Compensation ............... 25
7.5 Insurers; Policy Forms and Loss Payees ....... 25
7.6 Disposition of Insurance and Condemnation
Proceeds ..................... 26
ARTICLE VIII
NON-LIABILITY OF CITY; EXPENSES; INDEMNIFICATION
8.1 Non-Liability of City ............... 27
8.2 Expenses ...................... 27
8.3 Indemnification .................. 27
ARTICLE IX
LOAN DEFAULT EVENTS AND REMEDIES
9.1 Loan Default Events ................ 28
9.2 Remedies on Default ................ 30
9.3 Remedies Not Exclusive; No Waiver
of Rights ..................... 31
9.4 Expenses on Default ................ 32
9.5 Notice of Default ................. 32
Section
ARTICLE X
MISCELLANEOUS
P~
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
Further Assurances ................ 32
Amendment of Indenture .............. 32
Notices ...................... 33
Governing Law ................... 33
Binding Effect .................. 33
Severability of Invalid Provisions ........ 33
Article and Section Headings and
References .................... 34
Agreement Represents Complete
Agreement; Amendments .............. 34
Third Party Beneficiaries ............. 34
10.10 Execution of Counterparts ............. 34
10.11 Term of Agreement ................ 34
Execution ........................ 35
iii
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of December 1, 1984,
between the CITY OF BAKERSFIELD, a charter city and municipal
corporation in the State of California (the "City"), and the
GREATER BAKERSFIELD MEMORIAL HOSPITAL ASSOCIATION, a
nonprofit public benefit corporation validly existing and in
good standing under the laws of the State of California (the
"Corporation"),
W I TNE S SETH:
WHEREAS, the City is a municipal corporation and
charter city duly organized and existing under a freeholders'
charter pursuant to which the City has the right and power to
make and enforce all laws and regulations in respect to
municipal affairs and certain other matters in accordance
with and as more particularly provided in Sections 3, 5 and 7
of Article XI of the Constitution of the State of California
and Section 12 of the charter of the City (the "Charter");
WHEREAS, the City's Health Facilities Financing
Law, constituting Chapter 3.60 of the Bakersfield Municipal
Code (the "Law"), authorizes the City to issue its bonds for
the purposes and subject to the conditions described therein;
WHEREAS, the Corporation has applied for the
financial assistance of the City in financing the
construction, furnishing and equipping of certain
improvements to its health facility in Bakersfield,
California, and, after due investigation and deliberation,
the City has approved said application and authorized the
issuance of its City of Bakersfield Hospital Revenue Bonds
(Greater Bakersfield Memorial Hospital), Series 1984 (the
"Bonds") in the principal amount of thirty-five million
dollars ($35,000,000) to provide such assistance to the
Corporation in accordance with the Law;
WHEREAS, the City and the Corporation each have
duly authorized the execution and delivery of this Agreement;
NOW, THEREFORE, for and in consideration of the
premises and the material covenants hereinafter contained,
the parties hereto hereby formally covenant, agree and bind
themselves as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Unless the context
clearly otherwise requires, the capitalized terms in this
Agreement shall have the meanings specified in the Indenture,
dated as of December 1, 1984, by and between the City and
Crocker National Bank, as trustee, as originally executed or
as it may from time to time be supplemented, modified or
amended as provided therein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE CORPORATION;
FINDINGS OF THE CITY
SECTION 2.1. Representations and Warranties of the
Corporation. The Corporation makes the following
representations and warranties to the City that as of the
date of the execution of this Agreement and as of the date of
delivery of the Bonds to the purchaser thereof (such
representations and warranties to remain operative and in
full force and effect regardless of delivery of the Bonds or
any investigations by or on behalf of the City or the results
thereof):
(a) The Corporation is a nonprofit public benefit
corporation validly existing and in good standing under
the laws of the State of California, has full legal
right, power and authority to enter into this Agreement
and to carry out and consummate all transactions
contemplated hereby and by proper corporate action has
duly authorized the execution and delivery of this
Agreement. The Corporation has full legal right, power
and authority to enter into the Deed of Trust and the
Assignment of Lease and by proper corporate action has
duly authorized the execution and delivery of the Deed
of Trust and the Assignment of Lease.
(b) The officer of the Corporation executing this
Agreement is duly and properly in office and fully
authorized to execute the same.
(c) This Agreement has been duly authorized,
executed and delivered by the Corporation and (i) when
assigned to the Trustee pursuant to the Indenture, will
constitute the legal, valid and binding agreement of the
Corporation with the Trustee enforceable against the
Corporation in accordance with its terms for the benefit
2
040213-0005-087-5719m- (0355m)
12/03/84
of the Holders of the Bonds, and (ii) any rights of the
City and obligations of the Corporation hereunder not so
assigned to the Trustee constitute the legal, valid, and
binding agreement of the Corporation with the City
enforceable against the Corporation in accordance with
its terms. Notwithstanding the foregoing, enforcement
of this Agreement may be limited by bankruptcy,
insolvency, or other laws affecting the enforcement of
creditors' rights generally and by the application of
equitable principles if equitable remedies are sought.
(d) The execution and delivery of this Agreement,
the Assignment of Lease and the Deed of Trust, the
consummation of the transactions herein and therein
contemplated and the fulfillment of or compliance with
the terms and conditions hereof and thereof, will not
conflict with or constitute a violation or breach of or
default (with due notice or the passage of time or both)
under the articles of incorporation of the Corporation,
its bylaws or any applicable court or administrative
decree or order, or any indenture, mortgage, deed of
trust, loan agreement, lease, contract or other
agreement or instrument to which the Corporation is a
party or by which it or its properties are otherwise
subject or bound or, to the knowledge of the
Corporation, any applicable law or administrative rule
or regulation, or result in the creation or imposition
of any prohibited lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of
the Corporation, which conflict, violation, breach,
default, lien, charge or encumbrance might have
consequences that would materially and adversely affect
the consummation of the transactions contemplated by
this Agreement, the Assignment of Lease or the Deed of
Trust or the financial condition, assets, properties or
operations of the Corporation or its properties.
(e) No consent or approval of any trustee or
holder of any indebtedness of the Corporation, and no
consent, permission, authorization, order or license of,
or filing or registration with, any governmental
authority is necessary in connection with the execution
and delivery of this Agreement, the Assignment of Lease
or the Deed of Trust or the consummation of any
transaction herein or therein contemplated, except as
have been obtained or made and as are in full force and
effect.
(f) The Corporation constitutes a "participating
health institution" and operates a "health facility" as
those terms are defined in the Law.
3
040213 - 0005-087- 5719m- ( 0355m ) 12/03/84
(g) There is no action, suit, proceeding, inquiry
or investigation before or by any court or federal,
state, municipal or other governmental authority pending
or, to the knowledge of the Corporation after reasonable
investigation, threatened against or affecting the
Corporation or the assets, properties or operations of
the Corporation which, if determined adversely to the
Corporation or its interests, could have a material and
adverse effect upon the consummation of the transactions
contemplated by or the validity of this Agreement, the
Assignment of Lease or the Deed of Trust, or upon the
financial condition, assets, properties or operations of
the Corporation, and the Corporation is not in default
with respect to any order or decree of any court or any
order, regulation or demand of any federal, state,
municipal or other governmental authority, which default
might have consequences that would materially and
adversely affect the consummation of the transactions
contemplated by this Agreement, the Assignment of Lease
or the Deed of Trust, or the financial conditions,
assets, properties or operations of the Corporation or
its properties. All tax returns (federal, state and
local) required to be filed by or on behalf of the
Corporation have been filed, and all taxes shown thereon
to be due, including interest and penalties, except
such, if any, as are being actively contested by the
Corporation in good faith, have been paid or adequate
reserves have been made for the payment thereof. The
Corporation enjoys the peaceful and undisturbed
possession of all of the premises upon which the Health
Facility is located.
(h) No written information, exhibit or report
furnished to the City by the Corporation in connection
with the negotiation of this Agreement, the Assignment
of Lease or the Deed of Trust contains any untrue
statement of a material fact or omits to state a
material fact required to be stated therein or necessary
to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) The Corporation is an organization described
in Section 501(c)(3) of the Internal Revenue Code of
1954, as amended, and exempt from federal income tax
under Section 501(a) of said Code.
(j) The Corporation has good and marketable title
to the Health Facility free and clear from all
encumbrances other than Permitted Encumbrances.
4
040213~0005-087-5719m- (0355m) 12/03/84
(k) The Corporation does not restrict admissions
of patients to the Health Facility on racial or
religious grounds.
SECTION 2.2. Findings of the City. The City
hereby finds and determines that (i) the Corporation
constitutes a "participating health institution" as such term
is defined in the Law; (ii) the loan to be made hereunder
with the proceeds of the Bonds will promote the purposes of
the Law by providing funds to pay the cost of constructing,
furnishing and equipping a health facility; (iii) said loan
is in the public interest, serves a public purpose, promotes
the health, welfare and safety of the citizens of the City,
and meets the requirements of the Law; (iv) the portion of
such loan allocable to the cost of the Health Facility does
not exceed the total cost thereof as determined by the
Corporation and approved by the City.
ARTICLE III
ISSUANCE OF BONDS; LOAN OF PROCEEDS
SECTION 3.1. The Bonds. The City has authorized
the issuance of the Bonds pursuant to the Indenture in the
principal amount of thirty-five million dollars
($35,000,000). The City hereby lends and advances to the
Corporation and the Corporation hereby borrows and accepts
from the City (solely from the proceeds of the sale of the
Bonds) said principal amount, to be applied under the terms
and conditions of this Agreement and the Indenture. The
Corporation hereby approves the Indenture, the assignment
thereunder to the Trustee of the right, title and interest of
the City (with certain exceptions) in this Agreement and the
issuance thereunder by the City of the Bonds.
ARTICLE IV
REPAYMENT OF LOAN
SECTION 4.1. Payments to Revenue Fund. In
consideration of the issuance of the Bonds by the City and
the loan of the proceeds thereof to the Corporation, the
Corporation agrees to pay or cause to be paid to the Trustee
the following amounts at the following times: (i) prior to
the Conversion Date, if a Letter of Credit is in effect, the
Corporation shall on or before the sixth (6th) Business Day
before each Interest Payment Date (the "Interest Due Date")
commencing in January, 1985 pay the Trustee for deposit in
the Interest Fund an amount equal to the interest accrued on
5
040213-0005-087-5719m- (0355m) 12/03/84
the Bonds to the day before the Interest Due Date, plus an
amount equal to the interest to accrue from the Interest Due
Date until the last day of the Interest Period, assuming the
rate of interest borne by the Bonds will not change for the
remainder of the Interest Period; (ii) at any time when no
Letter of Credit is in effect, the Corporation shall pay the
Trustee for deposit in the Interest Fund on or before the
last Business Day of each Interest Period commencing January,
1985, an amount equal to the interest on the Bonds payable on
the next succeeding Interest Payment Date and (iii) the
Corporation shall pay the Trustee for deposit in the
Principal Fund 105 days before any principal or sinking fund
payment date on the Bonds (whether at maturity, by redemption
or by acceleration) an amount equal to the principal or
sinking fund payment and premium, if any, then coming due on
the Bonds, (such interest or principal payments hereafter
called "Loan Repayments"), continuing until the Bonds have
been fully paid (or provisions made therefor in accordance
with the Indenture).
Any amount held in the Principal Fund and the
Interest Fund provided under the Indenture which is in excess
of the amount required for the payment of principal of,
premium, if any, and interest on any of the Bonds and which
may pursuant to the provisions of the Indenture be applied to
the payment of principal, premium, if any, or interest coming
due on such payment date, shall be credited against the Loan
Repayments then required to be made by the Corporation.
Notwithstanding the foregoing, if on any Interest Payment
Date or the maturity or redemption date(s) of the Bonds, the
aggregate amount of moneys in the Interest Fund and the
Principal Fund is for any reason insufficient or unavailable
to make the required interest or principal payments on the
Bonds then becoming due (whether by demand, maturity,
redemption or acceleration), the Corporation shall forthwith
pay, or cause to be paid, the amount of any such deficiency
to the Trustee. The Corporation shall receive credit against
its obligation to make Loan Repayments in an amount equal to
the principal of Bonds paid from demands for payment under
the Letter of Credit to effect redemption pursuant to Section
4.01(b) or (c) of the Indenture. Each Loan Repayment
hereunder shall be in lawful money of the United States of
America and paid to the Trustee in immediately available
funds at its principal corporate trust office in San
Francisco, California, and held, invested, disbursed and
applied as provided in the Indenture,
SECTION 4.2. Additional Payments. In addition to
Loan Repayments, the Corporation agrees to pay or cause to be
paid to the City or to the Trustee, as the case may be,
"Additional Payments," as follows:
6
040213-0005-087-5719m- (0355m)
12/03/84
(a) All taxes and assessments of any type or
character charged to the City or to the Trustee
affecting the amount available to the City or the
Trustee from payments to be received hereunder or in any
way arising due to the transactions contemplated hereby
(including taxes and assessments assessed or levied by
any public agency or governmental authority of
whatsoever character having power to levy taxes or
assessments) but excluding franchise taxes based upon
the capital and/or income of the Trustee and taxes based
upon or measured by the net income of the Trustee;
provided, however, that the Corporation shall have the
right to protest any such taxes or assessments and to
require the City or the Trustee, at the Corporation's
expense, to protest and contest any such taxes or
assessments assessed or levied upon them and that the
Corporation shall have the right to withhold payment of
any such taxes or assessments pending disposition of any
such protest or contest unless such withholding, protest
or contest would adversely affect the rights or
interests of the City or the Trustee;
(b) The reasonable annual (or other regular) fees
and expenses of the Trustee for services rendered
pursuant to the Indenture and all fees, charges and
expenses of the Trustee for any extraordinary services
rendered by the Trustee under the Indenture, as and when
the same become due and payable;
(c) The reasonable fees and expenses of such
accountants, consultants, attorneys and other experts as
may be engaged by the City or the Trustee after notice
to the Corporation to prepare audits, financial
statements, reports, opinions or provide such other
services but only to the extent required or reasonably
necessary under the terms of this Agreement or the
Indenture; and
(d) The reasonable fees and expenses of the City
or any agency selected by the City to act on its behalf
in connection with this Agreement, the Bonds or the
Indenture, including any and all expenses incurred in
connection with the authorization, issuance, sale and
delivery of the Bonds or incurred by the City in
connection with any litigation which may at any time be
instituted involving this Agreement, the Bonds, the
Indenture or any of the other documents contemplated
thereby, or otherwise in connection with the
administration of this Agreement.
7
040213-0005-087-5719m- (0355m)
12/03/84
(e) Any amounts required to restore the balance in
the Reserve Fund to the Reserve Fund Requirement, which
amount shall be paid by the Corporation not later than
the next Interest Due Date (as defined in 4.1).
Such Additional Payments shall be billed to the
Corporation by the City or the Trustee from time to time,
together with a statement certifying that the amount billed
has been incurred or paid by the City or the Trustee for one
or more of the above items. After such a demand, amounts so
billed shall be paid by the Corporation (except as provided
in (e) above) within thirty (30) days after receipt of each
such bill by the Corporation.
SECTION 4.3. Letter of Credit. At all times
during the Letter of Credit Period, the Corporation shall
cause to be provided and continuously available to the
Trustee, as beneficiary, the initial Letter of Credit or a
renewal or extension thereof, or a substitute Letter of
Credit meeting the requirements of this Section. Failure to
provide a Letter of Credit meeting the requirements and at
the times provided below will result in the mandatory call
for redemption of all Bonds Outstanding pursuant to
section 4.01(b) of the Indenture, whereupon the Corporation
shall be required to pay as a Loan Repayment the entire
amount due hereunder.
The following requirements shall apply to any
renewal or substitute Letter of Credit provided during the
Letter of Credit Period:
(i) Any renewal, reissuance or extension of any
Letter of Credit shall be for a period of the lesser of
(i) a term commencing on or before and extending for at
least twelve (12) months after the stated expiration
date of the prior term thereof or the term of the prior
Letter of Credit, as the case may be, or (ii) with
respect to principal until January 15, 2015, and with
respect to interest until May 1, 2015. Any Letter of
Credit may provide that it shall terminate prior to its
stated expiration date upon the date of issuance and
delivery of a substitute Letter of Credit.
(ii) Each Letter of Credit shall be in an amount at
any date not less than the sum of the aggregate
principal amount of the Bonds then Outstanding and
interest thereon for a period of 135 days calculated,
prior to Conversion, at an assumed rate of fifteen
percent (15%) per annum.
8
040213-0005-087-5719m- (0355m)
12/03/84
(iii) Each Letter of Credit shall be in
substantially the form of the Letter of Credit delivered
at the time of original delivery of the Bonds, and shall
be issued by (A) a national banking association
organized under the National Banking Act, or any
successor law, or (B) a banking corporation organized
under the laws of any state of the United States or
(C) a banking corporation or association organized under
the laws of any country and qualified to do business in
the United States, or (D) a state or federally chartered
savings and loan association or savings bank, any of the
foregoing having a combined capital and surplus of at
least $250,000,000.
(iv) Each Letter of Credit delivered to the Trustee
pursuant to this Section must be accompanied by one or
more opinions of counsel from law firms acceptable to
the Trustee and addressed to the Trustee to the effect,
singly or together, that:
(A) The Letter of Credit is a legal, valid and
binding obligation of the institution issuing the
Letter of Credit, enforceable in accordance with
its terms, except (1) as limited by bankruptcy,
insolvency, reorganization, moratorium and other
laws relating to, or affecting generally the
enforcement of, creditors' rights and remedies
against banking corporations or associations, or
the same may be applied in the event of the
bankrupcty, insolvency, reorganization or similar
situation of the issuing institution, and (2) as
limited by the availability to any person seeking
to enforce the Letter of Credit of equitable
remedies, including specific performance and
injunctive relief;
(B) The issuing institution is duly organized and
existing under the laws of the applicable
jurisdiction as permitted by (iii) above, and, if
applicable, is duly qualified to do business in the
State of California or the United States of America
and that the issuance of the extended or substitute
Letter of Credit does not subject the Bonds to
registration under the Securities Act of 1933, as
amended; and
(C) Payments made by the issuing institution of
amounts drawn under the Letter of Credit will not
be recoverable from the Bondholders as voidable
preferences under Section 547(b) of the United
States Bankruptcy Code (11U.S.C. Section 101 e__t
9
040213-0005-087-5719m- (0355m)
12/03/84
seq.) or any successor provision (the "Bankruptcy
Code") or other applicable laws and regulations, in
the event of the commencement of a proceeding by or
against the Corporation or by the City under the
Bankruptcy Code or other applicable laws and
regulations.
(v) Not less than fifteen (15) days before the
principal expiration date of or the reduction date
relating to the principal portion of any Letter of
Credit (and not less than one hundred thirty-five (135)
days before the expiration of the interest portion of
any Letter of Credit if coverage for interest extends
beyond coverage for principal under said Letter of
Credit) the Corporation shall cause to be delivered to
the Trustee either (A) a renewal, reissuance or
extension of the Letter of Credit, or (B) a substitute
Letter of Credit, in either case meeting the
requirements of this Section together with the legal
opinions called for in (iv) above.
(vi) The Corporation shall take whatever action is
necessary to determine what rating, if any, the Bonds
would receive with the extended or substitute Letter of
Credit and, if the extended or substitute Letter of
Credit will result in a rating on the Bonds lower than
the rating(s) initially received, the Corporation shall
notify the Trustee and the Remarketing Agent of such
fact and the reduced rating that will apply to the Bonds
at least 45 days prior to the expiration or reduction of
the principal portion of the then-effective Letter of
Credit.
SECTION 4.4. Gross Revenue Fund. (A) The
Corporation agrees that, so long as any of the Bonds remain
Outstanding or any Additional Payments remain unpaid, all of
the Gross Revenues shall be deposited as soon as practicable
upon receipt in a fund designated as the "Greater Bakersfield
Memorial Hospital Gross Revenue Fund" (hereafter referred to
as the "Gross Revenue Fund") which the Corporation shall
establish and maintain, subject to the provisions of
subsection (B) of this Section, in an account or accounts at
such banking institution or institutions as the Corporation
shall from time to time designate in writing to the Trustee
for such purpose (the "Depository Bank(s)"). Subject only to
the provisions of this Agreement permitting the application
thereof for the purposes and on the terms and conditions set
forth herein, the Corporation hereby pledges, and to the
extent permitted by law grants a security interest to the
Trustee in, the Gross Revenue Fund and all of the Gross
Revenues to secure the payment of Loan Repayments and
10
040213-0005-087-5719m-(O355m)
12/03/84
Additional Payments and the performance by the Corporation of
its other obligations under this Agreement. The Corporation
shall execute and cause to be filed Uniform Commercial Code
financing statements in form and substance satisfactory to
the Trustee, shall execute and cause to be sent to each
Depository Bank notice of the security interest granted
hereunder and shall execute and deliver such other documents
(including, but not limited to, continuation statements) as
may be necessary or reasonably requested by the City or the
Trustee in order to perfect or maintain as perfected such
security interest or give public notice thereof.
(B) Amounts in the Gross Revenue Fund may be used
and withdrawn by the Corporation at any time for any lawful
purpose, except as hereinafter provided. In the event that
the Corporation is delinquent for more than one Business Day
in the payment of any Loan Repayment, the City or the Trustee
shall notify the Corporation and the Depository Bank(s) of
such delinquency, and, unless such Loan Repayment is paid
within ten (10) days after receipt of such notice, the
Corporation shall cause the Depository Bank(s) to, and the
Depository Bank(s) shall, transfer the Gross Revenue Fund to
the name and credit of the Trustee. All Gross Revenues shall
continue to be deposited in the Gross Revenue Fund to the
name and credit of the Trustee until amounts on deposit in
said fund are sufficient to pay in full, or have been used to
pay in full, all Loan Repayments in default and all other
Loan Default Events shall have been made good or cured to the
satisfaction of the Trustee or provision deemed by the
Trustee to be adequate shall have been made therefor,
whereupon the Gross Revenue Fund (except for the Gross
Revenues required to make such payments or cure such
defaults) shall be returned to the name and credit of the
Corporation. During any period that the Gross Revenue Fund
is held in the name and to the credit of the Trustee, the
Trustee shall use and withdraw amounts in said fund from time
to time to make Loan Repayments, Additional Payments, and
other payments required of the Corporation under this Loan
Agreement as such payments become due (whether by maturity,
redemption, acceleration or otherwise), and to make such
other payments in the order which the Trustee, in its
discretion, shall determine to be in the best interests of
the Holders of the Bonds. During any period that the Gross
Revenue Fund is held in the name and to the credit of the
Trustee, the Corporation shall not be entitled to use or
withdraw any of the Gross Revenues unless and to the extent
that the Trustee at its sole discretion so directs for the
payment of current or past due operating expenses of the
Corporation; provided, however, that the Corporation shall be
entitled to use or withdraw any amounts in the Gross Revenue
Fund which do not constitute Gross Revenues. The Corporation
11
040213-0005-087-5719m-(0355m)
12/03/84
agrees to execute and deliver all instruments as may be
required to implement this Section. The Corporation further
agrees that a failure to comply with the terms of this
Section shall cause irreparable harm to the Holders from time
to time of the Bonds, and shall entitle the Trustee, with or
without notice, to take immediate action to compel the
specific performance of the obligations of the Corporation as
provided in this Section.
SECTION 4.5. Depreciation Reserve Account.
(A) The Corporation shall establish and maintain a
special account with the Lender designated as the "Greater
Bakersfield Memorial Hospital Depreciation Reserve Account"
(hereinafter referred to as the "Depreciation Reserve
Account"). On or before the first day of each month in each
year commencing January 1, 1988, for so long as maintenance
of the Depreciation Reserve Account is required by the Letter
of Credit Agreement, the Corporation shall deposit or cause
to be deposited in the Depreciation Reserve Account one
twelfth of the following amounts in the following years:
Years (inclusive) Amount
1988-89
1990-2000
$2,300,000
3,000,000
(B) Amounts in the Depreciation Reserve Account
shall be used w2thin thirteen (13) months of the deposit
therein for one or more of the following purposes, provided
that, in the case of any uses described in (2) or (3) below,
the Corporation shall first obtain the written consent of the
Lender to the application of moneys on deposit in said
account (which consent shall not be unreasonably withheld):
(1) To the payment of the principal of any
indebtedness of the Corporation, or to the payment of
the interest thereon to the extent necessary to prevent
a default on such indebtedness, including the
obligations of the Corporation hereunder except for
Depreciation Reserve Account Payments;
(2) To
or additions
and personal
pay the costs of any capital improvements
to the Health Facility, including both real
property; or
(3) As a loan to the Corporation to provide
working capital, provided that (i) the total amount
borrowed for such purpose shall not at any time exceed
sixty (60) times the average daily expenses of the
Corporation as shown in its most recent audited
financial statements, (ii) the loan shall bear interest
12
040213-0005-087-5719m- (0355m)
12/03/84
at a reasonable rate and (iii) no such borrowing
pursuant to this clause may be outstanding for a period
in excess of ninety (90) consecutive days during each
period of twelve (12) consecutive months beginning with
the first deposit to the Depreciation Reserve Account.
SECTION 4.6. Obligations of the Corporation
Unconditional; Net Contract. The obligations of the
Corporation to make the Loan Repayments and Additional
Payments required hereunder and to perform and observe the
other agreements on its part contained herein shall be
absolute and unconditional, and shall not be abated, rebated,
set-off, reduced, abrogated, terminated, waived, diminished,
postponed or otherwise modified in any manner or to any
extent whatsoever, while the Bonds remain Outstanding or any
Additional Payments remain unpaid, regardless of any
contingency, act of God, event or cause whatsoever,
including, without limiting the generality of the foregoing,
any acts or circumstances that may constitute failure of
consideration, eviction or constructive eviction, the taking
by eminent domain or destruction of or damage to the Health
Facility, commercial frustration of purpose, any change in
the laws of the United States of America or of the State of
California or any political subdivision of either or in the
rules or regulations of any governmental authority, or any
failure of the City or the Trustee to perform and observe any
agreement, whether express or implied, or any duty, liability
or obligation arising out of or connected with this Agreement
or the Indenture. This Agreement shall be deemed and
construed to be a "net contract," and the Corporation shall
pay absolutely net the Loan Repayments and Additional
Payments, regardless of any rights of set-off, recoupment,
abatement or counterclaim that the Corporation might
otherwise have against the City or the Trustee or any other
party or parties.
SECTION 4.7. Prepayment. The Corporation shall
have the right, upon deposit with the Trustee of moneys which
will become Available Moneys prior to the date set for
redemption, to prepay all or any part of the Loan Repayments
to correspond to the permitted redemptions of the Bonds set
forth in Sections 4.01(a) or (d) of the Indenture, and shall
prepay such Loan Repayments to the extent necessary to permit
mandatory redemption of the Bonds as set forth in
Sections 4.01(b) and (c) of the Indenture, and the City
agrees that the Trustee shall accept such prepayments when
the same are tendered by the Corporation. The Corporation
must give the Trustee written notice of its intention to
effect an optional redemption pursuant to Sections 4.01(a) or
(d) of the Indenture at least 45 days prior to the date to be
fixed for such redemption. All such prepayments shall be
13
040213-0005-087-5719m-(0355m)
12/03/84
deposited upon receipt in the Principal Fund and, at the
Request of the Corporation, credited against Loan Repayments
in order of their due date or used for the redemption of the
Bonds in the manner and subject to the terms and conditions
set forth in the Indenture. Notwithstanding any such
prepayment, as long as any portion of the Bonds remains
Outstanding or any Additional Payments remain unpaid, the
Corporation shall not be relieved of its obligations
hereunder.
SECTION 4.8. Security for the Corporation's
Obligations. In consideration of the issuance of the Bonds
by the City and the loan of the proceeds thereof to the
Corporation and to secure the payment of Loan Repayments and
Additional Payments and the performance of the other
obligations of the Corporation hereunder, the Corporation
hereby grants, in addition to any other security interests
granted in this Agreement, to the Trustee a security interest
in the Health Facility. The Corporation has entered into the
Deed of Trust to secure the Corporation's obligations
hereunder. The Corporation agrees to execute and cause to be
filed Uniform Commercial Code financing statements in form
and substance satisfactory to the Trustee, and to execute and
deliver such other documents (including, but not limited to,
continuation statements) as the Trustee may reasonably
require in order to perfect or maintain as perfected such
security interest or give public notice thereof.
SECTION 4.9. Conversion to Fixed Interest Rate.
At any time on or after July 1, 1985, the Corporation may, at
its option, cause the interest rate on the Bonds to be
converted to a fixed interest rate. To exercise such option,
the Corporation shall execute and deliver to the Trustee, the
City, the Lender, the Surety, the Indexing Agent and the
Remarketing Agent a Certificate:
(a) specifying the Conversion Date, which shall be
not less than 30 nor more than 45 days after delivery of
such notice, and
(b) stating whether or not the Letter of Credit
will remain in force after the Conversion Date and what
rating, if any, will apply to the Bonds after the
Conversion Date.
The Certificate shall also be accompanied by an Opinion of
Bond Counsel, acceptable to the Trustee, to the effect that
Conversion to the fixed interest rate as provided herein will
not cause interest on the Bonds to become subject to federal
income tax.
14
040213-0005-087-5719m-(0355m)
12/03/84
ARTICLE V
THE PROJECT
SECTION 5.1. Disbursements from the Project Fund.
The Corportion shall proceed with due diligence with the
Project and use its best efforts to cause the acquisition,
installation and construction thereof to be completed by
October 31, 1987, delays beyond the reasonable control of the
Corportion only excepted. The Corporation hereby grants to
the City all rights of access to the Corporation's facilities
necessary for the City to carry out its obligations and to
enforce its rights hereunder. It is expressly understood and
agreed that the City shall be under no liability of any kind
or character whatsoever for the payment of any cost of the
Project and that all such costs and expenses shall be paid by
the Corporation. The acquisition, installation and
construction of the Project shall be in accordance with all
applicable zoning, planning and building regulations, and the
Corporation shall obtain all necessary governmental permits,
licenses, certificates, authorizations and approvals
necessary to be obtained for the acquisition, installation,
construction and operation of the Project. Disbursements
will be made from the Project Fund to pay certain costs of
the Project, as and to the extent provided and subject to the
terms and conditions set forth in the Indenture.
SECTION 5.2. Prohibited Uses. No portion of the
proceeds of the sale of the Bonds will be used to finance any
facility, place or building used or to be used (1) primarily
for sectarian instruction or study or as a place for
devotional activities or religious worship, or (2) by a
person not an "exempt person" within the meaning of
Section 103(b)(3) of the Internal Revenue Code of 1954, as
amended, or by an "exempt person" in an "unrelated trade or
business" within the meaning of Section 513(a) of said Code,
in such manner or to such extent as would result in loss of
exemption from federal income tax of interest of the Bonds
under Section 103 of said Code.
ARTICLE VI
PARTICULAR COVENANTS
SECTION 6.1. Maintenance of Corporate Existence of
the Corporation; Consolidation, Merger, Sale or Transfer
Under Certain Conditions. The Corporation covenants and
agrees that it will maintain its existence as a California
nonprofit public benefit corporation, and will not dissolve
or consolidate with or merge into another corporation or
15
040213-0005-087-5719m-(0355m)
12/03/84
permit one or more other corporations to consolidate with or
merge into it. Notwithstanding the foregoing, the
Corporation may, without violating the covenants contained in
this Section, consolidate with or merge into another
corporation, or permit one or more other corporations to
consolidate with or merge into it, if:
(A) The surviving, resulting or transferee
corporation, as the case may be:
(i) assumes in writing all of the obligations
of the Corporation under this Agreement;
(ii) is not, after such transaction,
otherwise in default under any provisions of this
Agreement;
(iii) is an organization described in
Section 501(c)(3) of the Internal Revenue Code of
1954, as amended, or a corresponding provision of
the federal income tax laws then in effect; and
(iv) qualifies under the Law as a
"participating health institution;" and
(B) The Trustee and the City shall have received
an Opinion of Bond Counsel to the effect that such
merger, consolidation, sale or other transfer will not
cause interest on the Bonds to be subject to federal
income taxation under Section 103 of the Internal
Revenue Code of 1954, as amended.
If a merger or consolidation is effected, as
provided in this Section, the provisions of this Section
shall continue in full force and effect and no further merger
or consolidation, shall be effected except in accordance with
the provisions of this Section.
SECTION 6.2. Accreditation and Licensing. The
Corporation covenants and agrees to use its best efforts (as
long as it is in the best interests of the Corporation and
will not materially adversely affect the interests of the
Bondholders) to maintain all permits, licenses and other
governmental approvals necessary for the operation of the
Health Facility as a health care institution; and to use its
best efforts to maintain its qualification and negotiate for
participation in and payment under private insurance programs
having broad application and federal, state and local
governmental programs providing for payment or reimbursement
for services rendered (as long as it is in the best interests
16
040213-0005-087-5719m-(0355m)
12/03/84
of the Corporation and will not materially adversely affect
the interests of the Bondholders).
SECTION 6.3. Rates and Charges; Debt Coverage.
(A) The Corporation covenants and agrees to cause
the Health Facility to be operated as a revenue producing
health care facility. The Corporation further covenants and
agrees, subject to (D) below, to fix, charge and collect, or
cause to be fixed, charged and collected, subject to
applicable requirements or restrictions imposed by law, such
rates, fees and charges for the use of the Health Facility
and for the services furnished or to be furnished by the
Corporation which, together with all other receipts and
revenues of the Corporation and any other funds available
therefor, will be reasonably projected to be sufficient in
each Fiscal Year to produce Net Income Available for Debt
Service equal to at least 1.10 times Maximum Aggregate Annual
Debt Service.
(B) Subject to (D) below, within one hundred fifty
(150) days after the end of each Fiscal Year the Corporation
shall compute the Net Income Available for Debt Service and
promptly furnish to the Trustee and the City a Certificate
setting forth the results of such computation. The
Corporation further covenants and agrees that if at the end
of such Fiscal Year the Net Income Available for Debt Service
shall have been less than 1.10 times Maximum Aggregate Annual
Debt Service, the Corporation will promptly employ a
Management Consultant to make recommendations as to a
revision of the rates, fees and charges of the Corporation or
the methods of operation of the Corporation which will result
in producing Net Income Available for Debt Service in the
amount required by subsection (A) of this Section in the
current Fiscal Year. Copies of the recommendations of the
Management Consultant shall be filed with the Trustee. The
Corporation shall, promptly upon receipt of such
recommendations, subject to applicable requirements or
restrictions imposed by law, and subject to a good faith
determination of its Board of Directors that such
recommendations, in whole or in part, are in the best
interests of the Corporation, revise rates, fees and charges
or methods of operation or collections and shall take such
other action as shall be in conformity with such
recommendations. If the Corporation determines not to comply
with such recommendations, the Corporation shall file with
the Trustee a certified copy of a resolution of its Board of
Directors determining not to comply with such recommendations
and stating in reasonable detail the reasons therefor. In
the event that the Corporation shall fail to comply with the
recommendations of the Management Consultant, subject to the
applicable requirements or restrictions imposed by law and to
17
040213-0005-087-5719m-(O355m)
12/03/84
the determination of the Board of Directors that such
recommendations are not in the best interests of the
Corporation or the Trustee may, in addition to the rights and
remedies elsewhere set forth herein, institute and prosecute
an action or proceeding in any court or before any board or
commission having jurisdiction to compel the Corporation to
comply with the recommendations and requirements of this
subsection (B). If the Corporation complies in all material
respects with the reasonable recommendations of the
Management Consultant in respect to said rates, fees, charges
and methods of operation or collection, the Corporation will
be deemed to have complied with the covenants contained in
this Section for such Fiscal Year notwithstanding that Net
Income Available for Debt Service shall be less than the
amount required under subsection (A) of this Section;
provided, that this sentence shall not be construed as in any
way excusing the Corporation from taking any action or
performing any duty required under this Agreement or be
construed as constituting a waiver of any other Loan Default
Event.
(C) Notwithstanding the foregoing, the Corporation
may permit the rendering of service at, or the use of, the
Health Facility without charge or at reduced charges, at the
discretion of its Board of Directors, to the extent necessary
for maintaining its tax exempt status and its eligibility for
grants, loans, subsidies or payments from the United States
of America, any instrumentality thereof, or the State of
California or any political subdivision or instrumentality
thereof, or in compliance with any recommendation for free
services that may be made by the Management Consultant.
(D) This Section 6.3 shall apply only if no Letter
of Credit is in effect.
SECTION 6.4. Limitation on Encumbrances. The
Corporation covenants and agrees that it will not create,
assume or suffer to exist any mortgage, deed of trust,
pledge, security interest, encumbrance, lien or charge of any
kind (a "security interest") upon the Health Facility prior
to or on a parity with the security interests granted
hereunder; provided, however, that notwithstanding the
foregoing the Corporation may create, suffer or assume
Permitted Encumbrances.
SECTION 6.5. Accounting Records, Financial
Statements and Budget. (A) The Corporation covenants and
agrees at all times to keep, or cause to be kept, proper
books of record and account, prepared in accordance with
generally accepted accounting principles, in which complete
and accurate entries shall be made of all transactions of or
18
040213-0005-087-5719m-(0355m)
12/03/84
in relation to the business, properties and operations of the
Corporation. Such books of record and account shall be
available for inspection by the City or the Trustee at
reasonable hours and under reasonable circumstances.
(B) The Corporation further covenants and agrees
to furnish the City, the Lender, the Surety and the Trustee,
within one hundred fifty (150) days after the end of each
Fiscal Year, with copies of complete financial statements
(including a balance sheet, a statement of revenues and
expenses, a statement of changes in fund balances, a
statement of changes in financial position and such other
financial reports and schedules as may have been delivered to
the Corporation in connection with such financial
statements), together with (1) the report and opinion of an
Accountant stating that the financial statements have been
prepared in accordance with generally accepted accounting
principles and that their examination was performed in
accordance with generally accepted auditing standards, and
(2) a Certificate of the chief financial officer of the
Corporation stating that no event which constitutes a Loan
Default Event or which with the giving of notice or the
passage of time or both would constitute a Loan Default Event
has occurred and is continuing as of the end of such Fiscal
Year, or specifying the nature of such event and the actions
taken and proposed to be taken by the Corporation to cure
such default.
SECTION 6.6. Tax Covenants. (A) The Corporation
covenants and agrees that it will not use or permit the use
of any of the funds provided by the City hereunder or any
other funds of the Corporation, directly or indirectly, or
direct the Trustee to invest any funds held by it under the
Indenture or this Agreement, in such manner as would, or
enter into, or allow any "related person" (as defined in
Section 103(b)(6)(C) of the Internal Revenue Code of 1954, as
amended) to enter into, any arrangement, formal or informal,
for the purchase of the Bonds that would, or take or omit to
take any other action that would, cause the Bonds to be an
"arbitrage bond" within the meaning of Section 103(c) of said
Code.
(B) The Corporation covenants and agrees that it
will maintain its status as an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1954, as
amended, and its exemption from federal income tax under
Section 501(a) of said Code. The Corporation further
covenants and agrees that it will not use or permit the use
of the Health Facility by any person not an "exempt person"
within the meaning of Section 103(b)(3) of said Code or by an
"exempt person" in an "unrelated trade or business" within
19
040213~-0005-087-5719m-(O355m)
12/03/84
the meaning of Section 513(a) of said Code, in such manner or
to such extent as would result in loss of exemption from
federal income taxation of interest on the Bonds under
Section 103 of said Code.
(C) The Corporation shall not make any use of the
proceeds of the Bonds or any other funds of the Corporation
which will cause such Bonds to be "federally guaranteed" and
subject to federal income taxation by reason of Section
103(h) of said Code.
(D) The Corporation shall not do anything which
would make interest paid on the Bonds subject to federal
income taxation.
SECTION 6.7. Limitation on Disposition of
Properties. (A) The Corporation covenants and agrees that
it will not sell or otherwise dispose of any part or parts of
the Health Facility in any Fiscal Year aggregating in excess
of one percent (IX) of Gross Patient Revenues (as shown on
the Corporation's most recent Audited Financial Statements)
(other than (i) in the ordinary course of business, (ii) as
permitted by Section 6.1 hereof, or (iii) to an Affiliated
Corporation, provided that after such transfer the
Corporation has an unrestricted fund balance (as determined
in accordance with generally accepted accounting principles)
at least equal to the aggregate principal amount of Bonds
(less any amounts on deposit in the Reserve Fund on the date
of such transfer).
(B) Before any sale or other disposition of any
part or parts of the Health Facility in any Fiscal Year
aggregating in excess of one percent (1~) of the
Corporation's Gross Patient Revenues (other than as provided
in subsections (A) or (C) of this Section), the Corporation
shall furnish to the Trustee and the City (i) a Certificate
of the Corporation stating that no Loan Default Event has
occurred and is continuing and stating the amount of the net
proceeds, if any, of such sale or other disposition and
(ii) an appraisal of the part of the Health Facility so sold
or disposed of, showing that such property is to be sold or
disposed of at a price at least equal to its fair market
value, and after the Conversion Date, that said disposition
shall not materially and adversely affect the revenue
generating capacity of the Health Facility. Upon receipt of
such Certificate and appraisal, the Trustee shall execute and
deliver any releases or other documents reasonably requested
by the Corporation in connection with such sale or other
disposition.
20
040213-0005-087-5719m-(0355m)
12/o3/84
(C) The Trustee shall execute and deliver any
releases or other documents reasonably requested by the
Corporation in connection with disposition of any part or
parts of the Health Facility upon the Corporation certifying
to the Trustee that the fair market value aggregates less
than one percent (1~) of Gross Patient Revenues (as shown on
the Corporation's most recent combined Audited Financial
Statements) in any Fiscal Year.
(D) Before the sale or other disposition of any
part or parts of the Health Facility to an Affiliated
Corporation that is not a nonprofit corporation, the
Corporation shall cause to be delivered to the Trustee and
the City an Opinion of Bond Counsel to the effect that such
sale or other disposition will not cause interest on the
Bonds to be subject to federal income taxation under
Section 103 of the Internal Revenue Code of 1954, as amended,
and shall not cause the Corporation to lose its status as an
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1954, as amended, or a corresponding
provision of the federal income tax laws then in effect.
(E) Notwithstanding anything in this Article, the
Corporation may freely and without limitation transfer cash,
securities or other intangible property to or from any
Affiliated Corporation.
SECTION 6.8. Compliance with United States and
California Constitutions. The Corporation covenants and
agrees that it will not restrict admissions of patients to
the Health Facilities on racial or religious grounds. On or
before August 30 of each year, the Corporation will furnish
to the City a Certificate of the Corporation stating that
(i) no facility, place or building financed with any portion
of the proceeds of the Bonds has been used primarily for
sectarian instruction or study or is a place for devotional
activities or religious worship and (ii) the Corporation does
not restrict admissions of patients to the Health Facilities
on racial or religious grounds. The City and its designees
shall have the right to inspect the Health Facilities at all
reasonable times for the purpose of verifying the foregoing
Certificate of the Corporation and due compliance by the
Corporation with the Constitutions of the United States and
of the State of California.
SECTION 6.9. Special Services Covenant. The
Corporation covenants and agrees that, as long as any Bonds
are Outstanding and subject to the provisions of Section 6.1,
it will operate a general acute care hospital within the
City. Eor the benefit of the City and its residents, the
Corporation further covenants and agrees that, as long as any
21
040213-0005-087-5719m-(0355m)
12/03/84
Bonds are Outstanding (except as hereinafter in this Section
provided), it will provide the following services: basic
emergency services, prenatal and maternity services, eye
services, cardio-pulmonary resuscitation classes and
pulmonary function testing services. Notwithstanding the
foregoing, the Corporation may terminate one or more of the
foregoing services provided that: (i) the Corporation
continues to operate a general acute care hospital within the
City; (ii) the Corporation notifies the City of its intent to
terminate the service or services; and (iii) the Corporation
agrees to provide additional or equivalent services for the
benefit of the City and its residents which, in the opinion
of the City, will result in the same or additional benefit to
the City and its residents. Notwithstanding the foregoing,
the Corporation may, without the consent of the City,
terminate any service which, in the opinion of the
Corporation, becomes obsolete or outmoded due to an advance
in medical technique or technology, provided that the
Corporation agrees to provide a service which is functionally
equivalent to such terminated service.
Notwithstanding the provisions of Section 9.1,
failure to maintain at any time any of the special services
required by this Section shall not constitute a Loan Default
Event, but, in the event of such failure, the City shall be
entitled to institute and prosecute an action in any court or
before any board or commission having jurisdiction to compel
the Corporation ~o comply with the covenant contained in this
Section and to exercise whatever other remedies (including an
action for damages) the City might have with respect thereto
arising from this Agreement.
SECTION 6.10. Additional Funds. The Corporation
shall deliver to the Trustee, for deposit in the Hospital
Account of the Project Fund, such amounts at such times as
may be required by the Letter of Credit Agreement.
ARTICLE VII
MAINTENANCE, TAXES, INSURANCE AND CONDEMNATION
SECTION 7.1. Maintenance and Operation of the
Health Facility. The Corporation covenants and agrees that
the Health Facility will be caused to be operated and
maintained in accordance with all governmental laws,
ordinances, approvals, rules, regulations and requirements
including, without limitation, such zoning, sanitary,
pollution and safety ordinances and laws and such rules and
regulations thereunder as may be binding upon the
Corporation. The Corporation further covenants and agrees
22
040213-0005-087-5719m-(0355m)
12/03/84
that the Health Facility will be caused to be operated and
maintained as a health care institution and will maintain and
operate the same, and all engines, boilers, pumps, machinery,
apparatus, fixtures, fittings and equipment of any kind in or
that shall be placed in any building or structure now or
hereafter at any time constituting part of the Health
Facility in good repair, working order and condition, and
that it will from time to time make or cause to be made all
needful and proper replacements, repairs, renewals and
improvements so that the efficiency and value of the Health
Facility shall not be impaired.
SECTION 7.2. Taxes, Assessments, Other Governmental
Charges and Utility Charges. The Corporation covenants and
agrees to pay, or cause to be paid and discharged, all taxes,
assessments, governmental charges of any kind whatsoever,
water rates, meter charges and other utility charges which
may be or have been assessed or which may have become liens
upon the Health Facility or the interest therein of the City,
the Trustee or of the Holders of the Bonds, and will make
such payments or cause such payments to be made,
respectively, in due time to prevent any delinquency thereon
or any forfeiture or sale of the Health Facility or any part
thereof, and, upon request, will furnish to the City or the
Trustee receipts for all such payments, or other evidence
satisfactory to the Trustee; provided, however, that the
Corporation shall not be required to pay any tax, assessment,
rate or charge as herein provided as long as they shall in
good faith contest the validity thereof, provided that the
Corporation shall have set aside reserves with respect
thereto that, in the opinion of its Board of Directors, are
adequate.
SECTION 7.3. Insurance Required. (A) The
Corporation covenants and agrees that, subject to subsection
(B) of this section, it will cause the Health Facility and
all of the operations of the Corporation to be adequately
insured at all times, cause to be carried and maintained such
insurance in amounts which are customarily carried and
against such risks as are customarily insured against by
other corporations in connection with the ownership and
operation of facilities of similar character and size in the
State of California. The Corporation further covenants and
agrees to carry and maintain, or cause to be carried and
maintained, and to pay or cause to be paid in timely fashion
the premiums for, at least the following insurance with
respect to the Health Facility and the Corporation when and
as such insurance is available:
(a) Insurance, on all properties constituting the
Health Facility, against loss or damage by fire,
23
040213-0005-087-5719m-(0355m)
12/03/84
lightning, vandalism, malicious mischief and all other
risks covered by the extended coverage insurance
endorsement then in use in the State of California,
subject to a deductible of not more than twenty-five
thousand dollars ($25,000) per accident or casualty, in
an amount equal to at least the lesser of the full
replacement value of the property insured or the
aggregate principal amount of the Bonds. The
replacement value of the Health Facility shall be
determined from time to time at the request of the
Corporation or the Trustee (but not less frequently than
once in every twenty-four months) by an Insurance
Consultant or by an architect, contractor, appraiser or
appraisal company selected by the Corporation and not
objected to by the Trustee. During the course of
substantial addition, extension, alteration or
improvement to the Health Facility, the Corporation
shall maintain or cause to be maintained builder's risk
insurance in the amount of the full completed value of
such construction work, subject to deductibles of not
more than twenty-five thousand dollars ($25,000) per
accident or casualty, covering loss by fire, lightning
and removal from the premises endangered by fire and
lightning, and all other risks covered by the extended
coverage endorsement then in use in the State of
California.
(b) Boiler insurance providing coverage of
pressure vessels, auxiliary piping, pumps and
compressors, refrigeration systems, transformers and
miscellaneous electrical apparatus in the Health
Facility which present significant potential for loss,
in an amount not less than two million five hundred
thousand dollars ($2,500,000), subject to deductibles
not exceeding twenty-five thousand dollars ($25,000) per
occurrence.
(c) Comprehensive public liability and property
damage insurance in the minimum amount of five million
dollars ($5,000,000) for damages arising out of any one
accident, and automobile liability and property
insurance in the minimum amount of one million dollars
($1,000,000) for damages arising out of any one accident.
(d) Professional liability insurance, in the
minimum amount of $5,000,000 as to any one occurrence.
(e) Fidelity bonds or other insurance on all the
Corporation's officers and employees who collect or have
custody of or access to revenues, receipts or income of
the Corporation, in such amounts as are ordinarily
24
040213~-0005-087-5719m-(0355m)
12/03/84
carried by organizations engaged in like activities and
with gross revenues comparable to those of the
Corporation.
(B) The Corporation shall employ, or cause to be
employed, an Insurance Consultant to review the insurance
requirements of the Corporation from time to time (but not
less frequently than annually). If the Insurance Consultant
makes recommendations for the increase of any of the coverage
required by subsection (A) of this Section, the Corporation
shall increase such coverage in accordance with such
recommendations, subject to a good faith determination of the
Boards of Directors of the Corporation that such
recommendations, in whole or in part, are in the best
interests of the Corporation. Notwithstanding anything in
this Section to the contrary, the Corporation shall have the
right, without giving rise to a Loan Default Event solely on
such account, (1) to maintain insurance coverage below that
required by subsection (A) of this Section, if the
Corporation furnishes to the Trustee a certificate of the
Insurance Consultant or other evidence satisfactory to the
Trustee that the insurance so provided accords the greatest
amount of coverage available for the risk being insured
against at rates which in the judgment of the Insurance
Consultant are reasonable in connection with reasonable and
appropriate risk management, or (2) to adopt alternative risk
management programs which its Board of Directors determines
to be reasonable and which shall not have a material and
adverse impact on the Corporation's reimbursement from third
party payors, including, without limitation, to self-insure
in whole or in part, to participate in programs of captive
insurance companies, to participate with other health care
institutions in mutual or other cooperative insurance or
other risk management programs, to participate in state or
federal insurance programs, to take advantage of state or
federal laws now or hereafter in existence limiting medical
and malpractice liability, or to establish or participate in
other alternative risk management programs; all as may be
approved as reasonable and appropriate risk management by the
Insurance Consultant.
SECTION 7.4. Workers' Compensation. The
Corporation will at all times maintain workers' compensation
coverage as required by the laws of the State of California.
SECTION 7.5. Insurers; Policy Forms and Loss
Payees. Each insurance policy required by Section 7.3 shall
be carried by insurance companies authorized to do business
in the State of California which are financially responsible
and capable of fulfilling the requirements of such policies
and not objected to by the Trustee. All such policies
25
040213-0005-087-5719m-(0355m)
12/03/84
(except liability policies) shall name the Corporation, the
Trustee and the Lender as insured parties, beneficiaries or
loss payees as their interest may appear. Each policy shall
be in such form and contain such provisions as are generally
considered standard for the type of insurance involved and
shall contain a provision to the effect that the insurer
shall not cancel or substantially modify the policy
provisions without first giving at least thirty (30) days
written notice thereof to the Corporation. In lieu of
separate policies, the Corporation may maintain blanket
policies which cover any one or more risks required to be
insured against so long as the minimum coverages required
herein are met.
SECTION 7.6. Disposition of Insurance and
Condemnation Proceeds. (A) The proceeds of the insurance
carried pursuant to clauses (a) and (b) of Section 7.3(A) and
the proceeds of any condemnation awards with respect to the
Health Facility shall be paid immediately upon receipt by the
Corporation or other named insured parties to the Trustee for
deposit in a special fund which the Trustee shall establish
and maintain and hold in trust, to be known as the "Insurance
and Condemnation Proceeds Fund." In the event the
Corporation elects, with the consent of the Lender, to repair
or replace the property damaged, destroyed or taken in
accordance with said plans, after deducting therefrom the
reasonable charges and expenses of the Trustee in connection
with the collection and disbursement of such moneys, moneys
in the Insurance and Condemnation Proceeds Fund shall be
disbursed by the Trustee for the purpose of repairing or
replacing the property damaged, destroyed or taken upon
compliance with the provisions of Section 3.03 of the
Indenture for disbursements from the Project Fund. In the
event that the proceeds of any loss or damage to or
condemnation of the Health Facility shall be less than five
hundred thousand dollars ($500,000), the Trustee shall pay
over such proceeds to the Corporation without any formality
whatsoever.
(B) In the event the Corporation shall not elect
to repair or replace the property damaged, destroyed or
taken, as provided in subsection (A) of this Section, or in
the event moneys remain in the Insurance and Condemnation
Proceeds Fund after such property has been so repaired or
replaced, the Trustee shall transfer all amounts in the
Insurance and Condemnation Proceeds Fund on account of such
damage, destruction or condemnation to the Principal Fund.
26
040213-0005-087-5719m-(0355m)
12/03/84
ARTICLE VIII
NON-LIABILITY OF CITY; EXPENSES; INDEMNIFICATION
SECTION 8.1. Non-Liability of City. The City
shall not be obligated to pay the principal of or premium or
interest on the Bonds, except from Revenues. Neither the
faith and credit nor the taxing power of the State of
California or any political subdivision thereof is pledged to
the payment of the principal of or premium or interest on the
Bonds.
The Corporation hereby acknowledges that the City's
sole source of moneys to repay the Bonds will be provided by
the payments made by the Corporation pursuant to this
Agreement, together with investment income on certain funds
and accounts held by the Trustee under the Indenture, and
hereby agrees that if the payments to be made hereunder shall
ever prove insufficient to pay all principal of and interest
on the Bonds as the same shall become due (whether by
maturity, redemption, acceleration or otherwise), then upon
notice from the Trustee, the Corporation shall pay such
amounts as are required from time to time to prevent any
deficiency or default in the payment of such principal or
interest, including, but not limited to, any deficiency
caused by acts, omissions, nonfeasance or malfeasance on the
part of the Trustee, the Corporation, the City or any third
party.
SECTION 8.2. Expenses. The Corporation covenants
and agrees to pay, or cause to be paid, and to indemnify the
City and the Trustee against all costs and charges, including
reasonable fees of attorneys, accountants, consultants and
other experts, incurred in good faith or arising out of or in
connection with this Agreement, the Bonds or the Indenture.
SECTION 8.3. Indemnification. The Corporation
agrees, to the extent permitted by law, to indemnify and hold
harmless the City and the Trustee and their respective
officers, employees and agents from and against any and all
losses, claims, damages, liabilities or expenses, of every
conceivable kind, character and nature whatsoever (excepting
therefrom only such losses, claims, damages, liabilities or
expenses arising from the negligence of the City or the
Trustee, or their respective members, officers, employees or
agents), including, but not limited to, losses, claims,
damages, liabilities, or expenses arising out of, resulting
from or in any way connected with (1) the Health Facility or
the Project, or the conditions, occupancy, use, possession,
conduct or management of, or work done in or about, or from
the planning, design, acquisition, installation or
27
040213-0005-087-5719m-(O355m)
12/03/84
construction of such facilities or any part thereof; (2) the
issuance of the Bonds and the carrying out of any of the
transactions contemplated by this Agreement; or (3) any
untrue statement or alleged untrue statement of any material
fact or omission or alleged omission to state a material fact
necessary to make the statements made, in light of the
circumstances under which they were made, not misleading in
any information furnished to the initial purchaser of the
Bonds in connection with the sale of the Bonds. The
Corporation further agrees, to the extent permitted by law,
to pay, or cause to be paid, or to reimburse the City and the
Trustee and their respective officers, employees and agents
for any and all costs, reasonable attorney's fees,
liabilities or expenses incurred in connection with
investigating, defending against or otherwise in connection
with any such losses, claims, damages, liabilities, expenses
or actions.
ARTICLE IX
LOAN DEFAULT EVENTS AND REMEDIES
SECTION 9.1. Loan Default Events. The following
events shall be "Loan Default Events":
(a) If the Corporation shall fail to pay any Loan
Repayments on or before the date on which such Loan
Repayments are due and payable;
(b) If the Corporation shall fail to comply with
the provisions of Sections 4.2, 6.1, or 6.7;
(c) If any representation or warranty made by the
Corporation herein or in any document, instrument or
certificate furnished to the Trustee or the City in
connection with the issuance of the Bonds shall at any
time prove to have been incorrect in any material
respect as of the time made;
(d) If the Corporation shall fail to observe or
perform any covenant, condition, agreement or provision
in this Agreement on their part to be observed or
performed, other than as referred to in subsection (a)
or (b) of this Section, for a period of sixty (60) days
after written notice, specifying such failure or breach
and requesting that it be remedied, has been given to
the Corporation by the City, the Lender or the Trustee;
except that, if such failure can be remedied but not
within such sixty (60) day period and if the Corporation
has taken all action reasonably possible to remedy such
28
040213-0005-087-5719m-(0355m)
12/03/84
failure or breach within such sixty (60) day period,
such failure or breach shall not become a Loan Default
Event for so long as the Corporation shall diligently
proceed to remedy same in accordance with and subject to
any directions or limitations of time established by the
Trustee;
(e) If the Corporation shall abandon the Health
Facility, or any substantial part thereof, and such
abandonment shall continue for a period of sixty (60)
days after written notice thereof shall have been given
to the Corporation by the City, the Lender or the
Trustee;
(f) If any default shall exist under any agreement
respecting Funded Debt (except the Letter of Credit
Agreement) and if, as a result thereof, such Funded Debt
shall be declared immediately due and payable or a
proceeding is brought for enforcement thereof;
(g) If the Corporation files a petition in
voluntary bankruptcy, for the composition of its affairs
or for corporate reorganization under any state or
federal bankruptcy or insolvency law, or makes an
assignment for the benefit of creditors, or admits in
writing to insolvency or inability to pay debts as they
mature, or consents in writing to the appointment of a
trustee or receiver for itself or for the whole or any
substantial part of the Health Facility;
(h) If a court of competent jurisdiction shall
enter an order, judgment or decree declaring the
Corporation an insolvent, or adjudging it bankrupt, or
appointing a trustee or receiver of the Corporation or
of the whole or any substantial part of the Health
Facility, or approving a petition filed against the
Corporation seeking reorganization of the Corporation
under any applicable law or statute of the United States
of America or any state thereof, and such order,
judgment or decree shall not be vacated or set aside or
stayed within thirty (30) days from the date of the
entry thereof;
(i) If, under the provisions of any other law for
the relief or aid of debtors, any court of competent
jurisdiction shall assume custody or control of the
Corporation or of the whole or any substantial part of
the Health Facility, and such custody or control shall
not be terminated within thirty (30) days from the date
of assumption of such custody or control;
29
040213-0005-087-5719m-(0355m)
12/03/84
(j) If any Event of Default shall occur under the
Letter of Credit Agreement and the Lender shall give
written notice thereof to the Trustee, or if the Lender
shall give written notice to the Trustee that the amount
of any payment under the Letter of Credit will not be
reinstated following a payment thereunder;
(k) If the Corporation shall fail to deliver to
the Trustee a renewal or substitute Letter of Credit
fifteen (15) days before the expiration or reduction of
the principal portion of the Letter of Credit to an
amount less than the then Outstanding principal of the
Bonds; or
(i) If an Event of Default shall occur under the
Indemnification and Collateral Agreement or the Letter
of Credit Agreement and the Surety or the Lender shall
give written notice thereof to the Trustee.
SECTION 9.2. Remedies on Default. If a Loan
Default Event shall occur, then, and in each and every such
case during the continuance of such Loan Default Event, the
Trustee may take any one or more of the following remedial
steps:
(a) If the unpaid principal of and interest on the
Bonds shall have become immediately due and payable
pursuant to Section 7.01 of the Indenture, the Trustee
shall, by notice in writing to the Corporation, declare
all installments of Loan Repayments and Additional
Payments to be immediately due and payable. Upon any
such declaration or automatic acceleration, such amount
shall be immediately due and payable in the amount
determined in accordance with Section 7.01 of the
Indenture.
(b) The Trustee may take whatever action, at law
or in equity, as may appear necessary or desirable to
collect the Loan Repayments, Additional Payments and any
other payments then due and thereafter to become due
under this Agreement or to enforce the performance and
observance of any obligation, covenant, agreement or
provision contained in this Agreement to be observed or
performed by the Corporation.
(c) The Trustee shall have all the rights and
remedies of a secured party or creditor under the
Uniform Commercial Code of the State of California, and
the general laws of the State of California, with
respect to the enforcement of the security interests
granted or reserved hereunder, including without
30
040213-0005-087-5719m-(0355m)
12/03/84
limitation to the extent permitted by law the right to
require that all of the Gross Revenues of the
Corporation be assembled and delivered to the Trustee,
and the Trustee may, to the extent permitted by law,
impound books and records evidencing the Corporation's
accounts, accounts receivable and other similar claims
for the payment of money and take possession of all
notes and other documents which evidence such accounts,
accounts receivable and claims for money and give notice
to obligors thereunder of the Trustee's interest in the
Gross Revenues of the Corporation and to make direct
collections on such accounts, accounts receivable and
claims for money.
(d) The Trustee may take whatever legal action may
appear necessary or desirable to enforce its rights and
the rights of the Holders of the Bonds under the Deed of
Trust or the Assignment of Lease.
Notwithstanding anything to the contrary contained
herein, the Trustee may not take any remedial acton under
this Agreement for payment of any amount due hereunder
(unless the Bonds have been accelerated pursuant to
Section 7.01 of the Indenture) without the consent of the
Lender (unless the Lender has failed to honor a draw under
the Letter of Credit) and, if a Surety Bond is in effect, the
Surety (unless the Surety has failed to make a payment when
due under the Surety Bond).
SECTION 9.3. Remedies Not Exclusive; No Waiver of
~ights. No remedy herein conferred upon or reserved to the
Trustee is intended to be exclusive of any other available
remedy or remedies, but each and every such remedy, to the
extent permitted by law, shall be cumulative and shall be in
addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity or otherwise.
In order to entitle the Trustee to exercise any remedy, to
the extent permitted by law, reserved to it contained in this
Agreement, it shall not be necessary to give any notice,
other than such notice as may be herein expressly required.
Such rights and remedies as are given to the City hereunder
shall also extend to the Trustee, and the Trustee may
exercise any rights and will be charged with the obligations
of the City under this Agreement, and, subject to Section
10.9 hereof, the Trustee and the Holders of the Bonds shall
be deemed to be the sole third party beneficiaries of all
covenants and conditions herein contained.
No delay in exercising or omitting to exercise any
right or power accruing upon any default shall impair any
such right or power or shall be construed to be a waiver of
31
040213-0005-087-5719m-(O355m)
12/03/84
any such default or an acquiescence therein, and every such
right and power may be exercised from time to time and as
often as may be deemed expedient.
SECTION 9.4. Expenses on Default. In the event
the Corporation should default under any of the provisions of
this Agreement and the City or the Trustee should employ
attorneys or incur other expenses for the collection of the
payments due hereunder, the Corporation agrees to pay on
demand to the City or the Trustee the reasonable fee of such
attorneys and such other reasonable expenses so incurred by
the City or the Trustee.
SECTION 9.5. Notice of Default. The Corporation
agrees that, as soon as is practicable, but no later than ten
(10) days from the date of such event, the Corporation will
furnish the Trustee and the Lender notice of any event which
is a Loan Default Event pursuant to Section 9.1 hereof or
which is an event of default under Section 7.01 of the
Indenture which has occurred and is continuing on the date of
such notice, which notice shall set forth the nature of such
event and the action which the Corporation proposes to take
with respect thereto.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Further Assurances. The Corporation
agrees to execute and deliver any and all such further
agreements, instruments, financing statements or other
assurances as may be reasonably necessary or requested by the
City or the Trustee to carry out the intention or to
facilitate the performance of this Agreement, including,
without limitation, documents reasonably necessary or
requested to perfect and continue the security interests
herein intended to be created and documents customarily
necessary or required in connection with commercial
construction loans.
SECTION 10.2. Amendment of Indenture. The City
covenants that, except as may be necessary to protect the
tax-exempt status of the interest on the Bonds, it will take
no action to amend or supplement the Indenture in any manner
that would materially adversely affect the interests of the
Corporation, the Lender or the Surety without obtaining the
prior written consent of the Corporation, the Lender and the
Surety to such amendment or supplement. The City will
promptly notify the Corporation, the Lender and the Surety of
all amendments to the Indenture.
32
040213-0005-087-5719m-(0355m)
12/03/84
SECTION 10.3. Notices. All notices or
communications herein required or permitted to be given shall
be in writing and, if to the Corporation, mailed or delivered
to it as follows: Greater Bakersfield Memorial Hospital,
P.O. Box 1888, Bakersfield, California 93303, Attention: Vice
President for Financial Services, and, if to the City, mailed
or delivered to it as follows: City of Bakersfield, 1501
Truxtun Avenue, Bakersfield, California 93301, Attention:
City Attorney, and, if to the Trustee, mailed or delivered to
it as follows: Crocker National Bank, One Montgomery Street,
San Francisco, California 94104 Attention: Corporate Trust
Department. A duplicate copy of each notice or communication
given hereunder by either the City or the Corporation to the
other shall also be given to the Trustee, to the Lender at
5670 Wilshire Boulevard, Suite 1860, Los Angeles, California
90036, Attention: Commercial Banking Division and to the
Lender at 265 Anita Drive, Suite 230, Orange, California
92668, Attention: Commercial Banking Division; to the Surety
at 255 California Street, San Francisco, California 94111
Attention: Director of Financial Guaranties and to The
Dowdell Corporation, 555 Capitol Mall, Suite 640, Sacramento,
California 95814, Attention: President. The City, the
Corporation, the Trustee, the Lender and the Surety may, by
notice given hereunder, designate any further or different
address to which subsequent notices, certificates and other
communications shall be sent.
SECTION 10.4. Governing Law. This Agreement shall
be construed in accordance with and governed by the
Constitution and laws of the State of California.
SECTION 10.5. Binding Effect. This Agreement
shall inure to the benefit of and shall be binding upon the
City, the Corporation and its respective successors and
assiqns, subject, however, to the limitations contained
herein.
SECTION 10.6. Severability of Invalid Provisions.
If any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, then such provision or
provisions shall be deemed severable from the remaining
provisions contained in this Agreement and such invalidity,
illeqality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be
construed as if such invalid or illegal or unenforceable
provision had never been contained herein. The City and the
Corporation each hereby declares that it would have entered
into this Agreement and each and every other Section,
paragraph, sentence, clause or phrase hereof irrespective of
the fact that any one or more Sections, paragraphs,
33
040213-0005-087-5719m-(0355m)
12/03/84
sentences, clauses or phrases of this Agreement may be held
illegal, invalid or unenforceable.
SECTION 10.7. Article and Section Headings and
References. The headings or titles of the several Articles
and Sections hereof, and any table of contents appended to
copies hereof, shall be solely for convenience of reference
and shall not affect the meaning, construction or effect of
this Agreement. All references herein to "Articles,"
"Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Agreement; the
words "herein," "hereof," "hereby," "hereunder" and other
words of similar import refer to this Agreement as a whole
and not to any particular Article, Section or subdivision
hereof; and words of the masculine gender shall mean and
include words of the feminine and neuter genders.
SECTION 10.8. Agreement Represents Complete
Agreement; Amendments. This Agreement represents the entire
contract between the parties. This Agreement may not be
effectively amended, changed, modified, altered or terminated
except by the written agreement of the Corporation and the
City and the concurring written consent of the Lender, the
Surety and the Trustee, given in accordance with the
provisions of the Indenture.
SECTION 10.9. Third Party Beneficiaries. The
Lender and the Surety are intended to be, and shall be deemed
to be, third party beneficiaries of this Agreement insofar as
their rights to receive the benefits of and to enforce the
provisions are expressly set forth.
SECTION 10.10. Execution of Counterparts. This
Agreement may be executed in any number of counterparts, each
of which shall for all purposes be deemed to be an original
and all of which shall together constitute but one and the
same instrument.
SECTION 10.11. Term of Agreement. Except as
otherwise provided herein, this Agreement shall remain in
full force and effect from the date of execution hereof until
34
040213-0005-087-5719m-(0355m)
12/03/84
NEW YORK, NEW YORK
~9TH FLOOR
ORRICK, HERRINGTON ~. SUTCLIFFE
SAN FRANCISCO, CALIFORNIA 9'+111
December 4· 1984
VIA FEDERAL EXPRESS
Richard Oberholzer~ Esq.
City Attorney
City of Bakersfield
1501 Truxtun Avenue
Bakersfield, California
93301
Re:
City of Bakersfield Hospital Revenue Bonds
(Greater Bakersfield Memorial Hospital)
Series 1984
Dear Richard:
Enclosed are two clean copies of the following
documents, to be handled as indicated:
Resolution of the City Council, to be
placed on the agenda for and approved at
the December 12, 1.984 meeting;
Loan Agreement between the City and
Greater 9akgrsfJ.eld Memorial Nospite~
Association to be approved in substantially
final form on December 12; and
Indenture between the City and Crocker
National Bank, as trustee, to be approved in
substantially final form on December 12.
Our schedule contemplates closing this transaction
on Friday, December 14, 1984, in our San Francisco office.
We will need to have a certified copy of the adopted
resolution at the closing. If this presents a problem,
please let me know.
In addition to the two documents approved,
there will be other closing documents which will require
the Mayor or City Manager's signature and the City Clerk's
attestation. We would expect to have execution copies of
all such documentation available for signature by the
ORRICK, HERRINGTON [ SUTCLIFFE
Richard Oberholzer, Esq.
December 4~ 1984
Page Two
City representatives no later than Tuesday, December 11.
I expect that one of the hospital representatives that will
be attending the closing would be able to bring the
executed documents with him on Thursday, December 13.
If you have questions about any of the above,
please do not hesitate to contact me or John Myers.
As always, thank you for your assistance.
Sincerely,
Diane S. Potter
DSP/ds
Enclosures
cc: Interested Parties
the Indenture is discharged or terminated pursuant to its
terms.
IN WITNESS WHEREOF, the City and the Corporation
have caused this Agreement to be executed in their respective
names and the City has caused its corporate seal to be
hereunto affixed by their duly authorized representatives,
all as of the date first above written.
CITY OF BAKERSFIELD
By
[SEAL]
Attest:
City Clerk
GREATER BAKERSFIELD MEMORIAL
HOSPITAL ASSOCIATION
[SEAL]
Attest:
By
President
Secretary
35
040213-0005-087-5719m-(0355m)
12/03/84