HomeMy WebLinkAbout2011-03-22 - AGENDA REPORTS - LACO ENERGY PGM (2)Agenda Item: 6
CITY OF SANTA CLARITA
AGENDA REPORT
CONSENT CALENDAR City Manager Approval:
Item to be presented by: Travis Lange
DATE: March 22, 2011
SUBJECT: RESOLUTION CONSENTING TO INCLUSION IN THE LOS
ANGELES COUNTY ENERGY PROGRAM TO FACILITATE
ENERGY AND WATER EFFICIENCY IMPROVEMENTS
DEPARTMENT: Public Works
RECOMMENDED ACTION
City Council adopt a resolution consenting to inclusion in the Los Angeles County Energy
Program to facilitate energy and water efficiency improvements.
BACKGROUND
Assembly Bill 811 (AB 811) was signed by the Governor on July 21, 2008. AB 811 and its
amendments authorize local governments to provide financing to qualified property owners for
the installation of energy and water efficiency improvements that are permanently affixed to their
respective properties. Participating property owners repay the cost of the improvements through
an assessment levied against their property, which is payable on property tax bills and a lien is
filed against the property as security. The assessment remains with the property should the owner
transfer or sell it.
Initially the County of Los Angeles (County) planned to provide this type of financing. However,
Fannie Mae and Freddie Mac issued a policy statement that they would not finance homes with
these types of liens. Therefore, the Los Angeles County Energy Program (LACEP) has been
adjusted to only include the energy and water efficiency efforts. The County plans to provide the
financing component if and when the policy issue is resolved.
If the City Council approves this resolution, City of Santa Clarita residents and businesses will be
able to participate in the LACEP. This will enable them to go through one entity when embarking
on a project to make their properties more energy and water efficient. Instead of having to search
for qualified contractors and then work with multiple utilities in order to get rebates for
improvements they make, they will be able to have every step organized into one program. It also
enables local contractors who provide these types of services to participate in the program when
they are working within City limits.
To date, over 70 cities in Los Angeles County have passed this resolution. Sonoma County, San
Diego County, City of Palm Springs, City and County of San Francisco, and County of Santa
Barbara have similar programs. If the City Council adopts this resolution, the City is agreeing
that Los Angeles County is the entity that will administer the program for properties located
within the City of Santa Clarita. There are no additional requirements for the City if the
resolution is adopted. This resolution does not commit the City to participate in any future
financing option the County decides to incorporate. At any time, the City may adopt another
resolution to withdraw from the LACEP. Any existing agreements in the City at that time would
continue, but no new agreements would be permitted thereafter.
ALTERNATIVE ACTIONS
1. Do not adopt the resolution.
2. Other action as determined by the City Council.
FISCAL IMPACT
There is no fiscal impact to the City. The City is not committed to any financial obligations with
the adoption of this resolution.
ATTACHMENTS
Resolution
Los Angeles County Energy Program Report available in City Clerk's Reading File
Los Angeles County Board of Supervisor's April 6,.2010, Resolution of Intention to Implement
LACEP available in City Clerk's Reading File
Los Angeles County Board of Supervisor's May 25, 2010, Final Resolution to Implement LACEP
available in City Clerk's Reading File
W1
RESOLUTION I I -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA
CONSENTING TO INCLUSION OF PROPERTIES WITHIN THE INCORPORATED AREA
OF THE CITY IN THE LOS ANGELES COUNTY ENERGY PROGRAM TO FINANCE
DISTRIBUTED GENERATION RENEWABLE ENERGY SOURCES AND ENERGY
AND WATER EFFICIENCY IMPROVEMENTS, APPROVING THE REPORT SETTING
FORTH THE PARAMETERS OF THE REFERENCED PROGRAM AND CERTAIN
MATTERS IN CONNECTION THEREWITH
WHEREAS, Chapter 29 of Part 3 of Division 7 of the California Streets and Highways
Code (the Act) authorizes cities and counties to assist free and willing property owners in
financing the installation of distributed generation renewable energy sources and energy and
water efficiency improvements (the Improvements) that are permanently fixed to residential,
commercial, industrial, or other real property through a contractual assessment program; and
WHEREAS, the Board of Supervisor's of the County of Los Angeles (the County), a
political subdivision of the State of California, has established a contractual assessment program
named the Los Angeles County Energy Program (LACEP) pursuant to the Act; and
WHEREAS, the parameters of LACEP are set forth in the Report attached hereto as the
Report and such Report has been prepared by the Director of the Internal Services Department of
the County, as Program Administrator, pursuant to Section 5898.22 of the Act and approved by
the Board of Supervisors; and
WHEREAS, the Act authorizes the County to enter into contractual assessments with
property owners located within incorporated cities only subsequent to the approval of the
legislative body of the related city to participate in LACEP; and
WHEREAS, the City of Santa Clarita (City) desires to participate with the County in
LACEP, under terms and conditions agreed to by the City and the County, and provide for
participation in LACEP by property owners located within City limits; and
WHEREAS, this City Council of the City of Santa Clarita has reviewed the Report.
NOW, THEREFORE, the City Council of the City of Santa Clarita does hereby resolve as
follows:
SECTION 1. The recitals set forth hereinabove are true and correct in all respects.
SECTION 2. This City Council finds and declares that properties in the City's
incorporated area will be benefited by participation in LACEP.
SECTION 3. This City Council ratifies the resolution adopted by the Board of
3
Supervisor's on April 6, 2010, declaring the Board of Supervisor's intention to order the
implementation of a contractual assessment program to finance the Improvements pursuant to the
Act.
SECTION 4. This City Council hereby approves the Report substantially in the form
attached hereto and finds and determines that changes to the parameters of LACEP that are not
material in nature do not require the approval of this Council.
SECTION 5. This City Council hereby approves the inclusion in LACEP of all the
properties in the incorporated area within the City, as same may be amended through annexation
from time to time, the acquisition, construction, and installation within City limits of the
Improvements set forth in the Report upon the request and agreement of the affected property
owner, and the assumption of jurisdiction thereover by the County for the aforesaid purposes.
The adoption of this Resolution by this City Council constitutes the approval by the City to
participate in the LACEP. This City Council further authorizes the County to set the terms of and
implement LACEP and to take each and every action necessary or desirable for financing the
Improvements, including the levying, collecting, and enforcement of the contractual as
to finance the Improvements and the issuance of bonds secured by such contractual assessments.
SECTION 6. The City Clerk is directed to file a certified copy of this Resolution with the
Los Angeles County Office of Sustainability, located at 1100 North Eastern Avenue, Los
Angeles, California 90063.
SECTION 7. City staff is authorized and directed to coordinate with the County,
including the Program Administrator and County staff, to facilitate operation of LACEP. City
staff is also authorized and directed to do all acts and things which may be required by this
Resolution, or which may be necessary or desirable in carrying out LACEP as described in the
Report, as may be amended from time to time, and approved by this Resolution, and all matters
incidental thereto.
SECTION 8. The City Clerk shall certify to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this day of March 2011.
ATTEST:
ACTING CITY CLERK
DATE:
MAYOR
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
I, Kevin Tonoian, Acting City Clerk of the City of Santa Clarita, do hereby certify that the
foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a
regular meeting thereof, held on the day of March 2011, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ACTING CITY CLERK
S
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF SANTA CLARITA )
CERTIFICATION OF
CITY COUNCIL RESOLUTION
I, , Acting City Clerk of the City of Santa Clarita, do
hereby certify that this is a true and correct copy of the original Resolution 11- adopted by the
City Council of the City of Santa Clarita, California on , 2011, which is now on file in my
office.
Witness my hand and seal of the City of Santa Clarita, California, this day of March 2011.
Acting City Clerk
By
Deputy City Clerk
WILLIAM T FUJIOKA
Chief Executive Officer
April 6, 2010
County of Los Angeles -
CHIEF EXECUTIVE OFFICE
Kenneth Hahn Hall of Administration
500 West Temple Street, Room 713, Los Angeles, California 90012
(213) 974-1101
http://ceo.lacounty.gov
ADOPTED
BOARD OF SUPERVISORS
COUNTY OF LOS ANGELES
12 April 6, 2010
The Honorable Board of Supervisors
County of Los Angeles
383 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, CA 90012
Dear Supervisors:
SACHI A HAMA
EXECUTIVE OFFICER
SET: May 25, 2010 @ 9:30 a.m.
Board of Supervisors
GLORIA MOLINA
First District
MARK RIDLEY-THOMAS
Second District
ZEV YAROSLAVSKY
Third District
DON KNABE
Fourth District
MICHAEL D. ANTONOVICH
Fifth District
ADOPTION OF THE RESOLUTION OF INTENTION TO IMPLEMENT THE
LOS ANGELES COUNTY ENERGY PROGRAM
(ALL DISTRICTS) (3 VOTES)
SUBJECT
Adoption of the enclosed Resolution of Intention will initiate the formation of a voluntary
contractual assessment program in accordance with California Assembly Bill 811 (AB 811),
which was approved by the State Legislature and signed by the Governor on July 21, 2008.
The program will provide financing to qualified property owners within the 'County of
Los Angeles for the installation of energy and water efficiency improvements to their respective
properties. Participating property owners will repay the cost of the improvements through an
assessment levied against their property which is payable in semi-annual installments on
property tax bills. Voluntary contractual assessments may be entered into by property owners
in unincorporated areas of the County and in incorporated cities, subsequent to adoption of a
resolution of participation in the Los Angeles County Energy Program by the legislative body of
the incorporated city.
IT IS RECOMMENDED THAT YOUR BOARD:
Adopt the enclosed Resolution of Intention to approve the following items:
Find that the proposed project is exempt from the California Environmental Quality Act
for the reasons stated in this letter and in the Resolution of Intention;
2. Declare your Board's intention to implement a contractual assessment program to
finance the installation of distributed generation renewable energy sources and energy
and water efficiency improvements within the County;
3. Direct the Internal Services Department (ISD) to prepare and file with your Board a
Program Report pursuant to Section 5898.22 of the California Streets and Highways
Code;
Please Conserve Paper - This Document and Copies are Two -Sided
Intra -County Correspondence Sent Electronically Only
Honorable Board of Supervisors
April 6, 2010
Page 2
4. Ratify a written notice of the proposed program delivered to all providers of water,
natural gas, or electric power within the boundaries of the County; and
5. Set a public hearing date of May 25, 2010, as provided for in the Resolution of Intention,
and direct the Executive Officer of the Board to publish a notice of public hearing no later
than 20 days before the date of.the public hearing, pursuant to Section 6066 of the
Government Code.
PURPOSE/JUSTIFICATION OF RECOMMENDED ACTION
On July 21, 2008, the Governor signed AB 811 which, as amended, allows local governments to
finance energy and water efficiency, and distributed generation renewable energy projects
(collectively known as Improvements) that are permanently fixed to residential, commercial,
industrial, or other real property. The financing is repaid through annual assessments on the.
property tax bill and a lien is filed against the property as security. The assessment remains
With the property should the owner transfer or sell it. The Los Angeles County Energy Program
(LACEP) is the contractual assessment program of the County under AB 811.
LACEP financing under AB 811 mitigates two key barriers that prevent property owners from
implementing a greater number of energy projects: 1) it eliminates the need for property owners
to pay up -front costs for improvements out of pocket, and 2) it establishes a loan obligation that
is attached to the property and not to the individual borrower.
During the program's initial two year operating period, LACEP is expected to achieve 15,000.
home energy retrofits, which have the potential to add $150 million to the local economy.
LACEP is intended to facilitate a significant industry shift in the region toward a greater energy
efficient and renewable energy resource economy. The availability of AB 811 financing can be
a catalyst in spurring the local economy by creating an estimated 1,600 "green" home energy
retrofit jobs, and up to 1,000 ancillary jobs in areas, such as jobs training and workforce
development, local manufacturing and distribution, and research and development.
Implementation of improvements to existing properties in the County will help the State and
County reduce greenhouse gas emissions by 20,000 tons of carbon dioxide annually.
Property owners can help achieve greenhouse gas reductions, reduce water and energy use,
and, at the same time, save money by investing in improvements. Residents will have access to
LACEP information through a variety of sources, including Environmental Service Center
locations, online access, and community events.
LACEP will fund improvements to non-residential (e.g., commercial) properties after
implementation of residential financing. ISD staff and consultants are working with commercial
building and financial industry stakeholders to design the non-residential program. ISD staff and
consultants will seek to address impediments to implementing retrofits in smaller commercial
buildings (i.e., landlords are often reluctant to invest in buildings where tenants pay the utilities
and the landlords do not see a direct savings, while tenants do not want to make long-term
investments in buildings that they may occupy on a short-term basis).
A number of stakeholder groups are being engaged during the program design phase, including
contractors, workforce development agencies, organized labor, building industry associations,
home efficiency and solar equipment providers, property owner associations, County and city
staff, the utility industry, and the mortgage and banking industry. Market research is being:.
Honorable Board of Supervisors
April 6, 2010
Page 3
conducted to develop an effective outreach campaign that will leverage the Whole House
Retrofit programs being implemented by natural gas and electric utilities throughout California.
LACEP outreach initiatives will be coordinated with Statewide efforts to provide consistent
training for contractors, utilize existing credentialing and certification programs, and streamline
the application process for participants.
The required program report will provide a summary of LACEP for the general public and cities
considering participation. The program report will be completed and filed with your Board in
advance of the public hearing to be held no sooner than 45 days following adoption of the
attached Resolution of Intention (Attachment A).
A written notice of the proposed contractual assessment program (Attachment B) has been
delivered to all public and private providers of water, natural gas, and/or electric power within
the boundaries of the County of Los Angeles. This notice informs such providers that your
Board intends to create the LACEP and will present an opportunity for comment at the public
hearing to be held on May 25, 2010.
IMPLEMENTATION OF STRATEGIC PLAN GOALS
By providing financing that may not otherwise be readily available to property owners, the
County is promoting energy and water conservation, and the reduction of greenhouse gas
emissions, which supports the County Strategic Plan Goal 1, Operational Effectiveness. This
action also supports the County Strategic Plan Goal 3, Community and Municipal Services, by
providing property owners a means to finance improvements that will result in utility cost -
savings and improve their quality of life.
FISCAL IMPACT/FINANCING
In October 2009, your Board accepted the County's allocation of $15.4 million in Energy
Efficiency and Conservation Block Grant (EECBG) funding received under the American
Recovery and Reinvestment Act (ARRA). The County has identified approximately $12.2
million of this EECBG funding to support the implementation of its AB 811 program and related
activities, including Environmental Service Centers and public information and outreach.
The County has applied for additional grant funding to support the AB 811 program
development costs, marketing and incentives, and interest rate reductions for participating
homeowners. ISD will continue to pursue grant opportunities as they are identified and will
advise the Board of the status of these efforts.
A portion of the County's administrative costs (e.g., program management, application
processing, etc.) will be paid by the property owners who voluntarily participate in this program.
To fund the cost of the improvements, the County plans to obtain financing both from private
lenders and through the issuance of bonds in the public capital markets. The County will make
these funds available to qualifying property owners for allowable improvements. The debt
incurred during this process will be repaid by assessments on the property tax bills and will not
be an obligation of the County. In the event that the assessment is delinquent and property
taxes remain unpaid, the County shall have the right to initiate foreclosure proceedings on the
subject property. The foreclosure policy must take into consideration many factors and has yet
to be finalized. Your Board's approval will be obtained for any such policy recommendation.
Honorable Board of Supervisors
April 6, 2010
Page 4
Since participation is voluntary, the property taxes for non -participating property owners are
unaffected by the program.
The table below provides estimates for three typical retrofit improvement projects; including
project costs, semi-annual assessment amounts, and utility bill savings. The case studies range
from: 1) a basic retrofit with some additional easy to install measures, such as Energy Star
bathroom fans, programmable thermostat, and energy efficient light fixtures to, 2) a basic
retrofit with a heating and air conditioning system replacement to, 3) a basic retrofit that
incorporates a solar photovoltaic power system. Available tax credits have not been included,
but could result in additional savings.
Estimates do not include tax credits or the potential income tax impact of deductible interest.
Results based on a "typical' L.A. County residence and project. Results will vary by home condition, location, etc.
For this illustration, the examples assume a 9% interest cost and a 20 year term. Actual interest will depend on market rates.
The implementation of this program will have no impact on net County cost.
FACTS AND PROVISIONS/ LEGAL REQUIREMENTS
These proceedings are governed by Chapter 29 . of Part 3 of Division 7 of the Streets and
Highways Code of the State of California (Act). Pursuant to the Act, counties and cities are
authorized to assist free and willing property owners in financing improvements that are
permanently fixed to residential, commercial, industrial, or other real property through a
voluntary contractual assessment program.
Pursuant to Section 5898.26 of the Act, your Board is required to hold a public hearing where
the program report will be presented and all public comments regarding the proposed voluntary
contractual assessment program will be heard and considered. The Executive Officer of the
Board will cause the notice of public hearing to be published pursuant to Section 6066 of the
Government Code.
;:.
c
,GROSS .
F `
ASSESSWIENT
ESTIMATED ';
• -.ESTIMATED
TYPICAL HOME RETROFIT
PROJECT
(AFTER .'
ANN.,UAL
ANNUAL UTILITY -'.
PROJECTS ANALYSIS
GOST
INCE N?IVES AND
ASSESSMENT
SAVINGS
PROGRAM ;
EXPENSES)
Basic Retrofit
$6,000
$5,500
$549
$454
(insulation, duct sealing,
weather stripping, plus easy to
install measures
Basic Retrofit + HVAC
$15,000
$13,200
$1,317
$681
Replacement
(includes heating, ventilation,
and air conditioning system)
Basic Retrofit + Solar
$25,500
$20,020
$1,997
$1,549
Photovoltaic PV
Estimates do not include tax credits or the potential income tax impact of deductible interest.
Results based on a "typical' L.A. County residence and project. Results will vary by home condition, location, etc.
For this illustration, the examples assume a 9% interest cost and a 20 year term. Actual interest will depend on market rates.
The implementation of this program will have no impact on net County cost.
FACTS AND PROVISIONS/ LEGAL REQUIREMENTS
These proceedings are governed by Chapter 29 . of Part 3 of Division 7 of the Streets and
Highways Code of the State of California (Act). Pursuant to the Act, counties and cities are
authorized to assist free and willing property owners in financing improvements that are
permanently fixed to residential, commercial, industrial, or other real property through a
voluntary contractual assessment program.
Pursuant to Section 5898.26 of the Act, your Board is required to hold a public hearing where
the program report will be presented and all public comments regarding the proposed voluntary
contractual assessment program will be heard and considered. The Executive Officer of the
Board will cause the notice of public hearing to be published pursuant to Section 6066 of the
Government Code.
Honorable Board of Supervisors
April 6, 2010
Page 5
ENVIRONMENTAL DOCUMENTATION
The proposed project is categorically exempt from the California Environmental Quality Act
(CEQA). The project, to establish the Los Angeles County Energy Program, is a voluntary
contractual assessment program to finance the installation of renewable energy sources, and
energy and water efficiency improvements. The project meets the criteria set forth in Section
15308 of the State CEQA Guidelines and Class 8 of the County's Environmental Document
Reporting Procedures and Guidelines, Appendix G, in that it is an action taken by a regulatory
agency, as authorized by State law, to ensure the maintenance, restoration, enhancement, or
protection of the environment where the regulatory process involves procedures for protection of
the environment. Therefore, the project is within a class of projects that has been determined
not to have a significant effect on the environment. In addition, there are no cumulative impacts,
unusual circumstances, or other limiting factors that would make the exemption inapplicable
based on the project records.
IMPACT ON CURRENT SERVICES (OR PROJECTS
The implementation of the program will have no impact on current services. The program will
reduce greenhouse gases, improve energy efficiency, and create jobs within the County.
CONCLUSION
Upon approval of the Resolution of Intention, it is requested that the Executive Officer of the
Board return three originally executed copies of the adopted Resolution of Intention to the Chief
Executive Office, Internal Services Department, and Treasurer and Tax Collector.
Respectfully sLIbmitted,
- !t---
WILLIA T FUJIOKA
Chief Executive Officer
Respectfully submitted,
RK J. SALADINO
Tr asurer and Tax Collector
WTF:TT:MS:ES:jj
Attachments
c: Assessor
County Counsel
Executive Officer, Board of Supervisors
Auditor -Controller
Respectfully submitted,
TOM TINDALL
Director, Internal Services Department
ATTACHMENT A
RESOLUTION OF THE BOARD OF SUPERVISORS OF
THE COUNTY OF LOS ANGELES DECLARING ITS
INTENTION TO ORDER THE IMPLEMENTATION OF
A CONTRACTUAL ASSESSMENT PROGRAM TO
FINANCE THE INSTALLATION OF DISTRIBUTED
GENERATION RENEWABLE ENERGY SOURCES
AND , ENERGY AND WATER EFFICIENCY
IMPROVEMENTS
WHEREAS, Chapter 29 of Part 3 of Division 7 of the Streets and Highways Code of the
State of California (the "Act') authorizes counties to assist free and willing property owners in
financing the installation of distributed generation renewable energy sources and energy and
water efficiency improvements (the "Improvements") that are permanently fixed to residential,
commercial, industrial or other real property through a contractual assessment program; and
WHEREAS, the County of Los Angeles, a political subdivision of the State of California
(the "County"), desires to authorize a contractual assessment program to finance the installation
of the Improvements in an area that encompasses the entire County pursuant to the Act;
NOW, THEREFORE, BE IT RESOLVED by the Board of Supervisors of the County of
Los Angeles (the "Board of Supervisors") as follows:
Section 1. Determination of Public Interest. The Board of Supervisors hereby finds
and determines that (a) it would be convenient, advantageous, and in the public interest to
designate the entire area within the County, subject to the consent of any incorporated city
therein as provided for under Section 3 hereof, as the area within which authorized County
officials and property owners may enter into voluntary contractual assessments to finance the
installation of Improvements pursuant to the Act; and (b) it is in the public interest for the
County to finance the installation of Improvements pursuant to the Act.
Section 2. Identification of Improvements. The Board of Supervisors hereby
declares that it proposes to make voluntary contractual assessment financing available to
property owners within the County to finance the installation of Improvements, as set forth in
further detail in the Report (herein defined) described in Section 10 below (the "Contractual
Assessment Program").
Section 3. Identification of Boundaries. Voluntary contractual assessments may be
entered into by property owners located within the territory of the County; provided that
voluntary contractual assessments may be entered into by property owners located within
incorporated cities only subsequent to the approval of the legislative body of the related city to
participate in the Contractual Assessment Program.
Section 4. Proposed Financing Arrangements. The County may elect to finance all
or a portion of the Contractual Assessment Program by one or more of the financing
arrangements permitted under Section 5898.28 of the Act, including issuing or causing to be
issued bonds pursuant to the Act, the principal and interest for. which would be repaid by
voluntary contractual assessments pursuant to the Contractual Assessment Program. The County
may but is not obligated to advance its own funds to finance work to be repaid through
contractual, assessments, and may but is not obligated to from time to time sell or cause to be
sold bonds to reimburse itself for such advances. Financing through the Contractual Assessment
Program will be available to property owners who satisfy certain eligibility requirements,
including minimum property value -to -lien ratio and maximum total property loan -to -value ratio,
as set forth in further detail in the Report.
Provision is hereby made for the issuance of improvement bonds pursuant to Division 10
(commencing with Section 8500) of the Streets and Highways Code of the State ("1915 Act'),
insofar as the 1915 Act is not in conflict with the Act. Any bonds issued under the 1915 Act that
are payable from contractual assessments shall be issued in one or more series, and the last
installment of bonds shall mature a maximum of 39 years from the second day of September next
succeeding 12 months from their date of issuance. Any bonds issued under the 1915 Act shall be
serial bonds, term bonds or both, and shall bear interest at the rate or rates determined at the time
of their sale, which rate shall not exceed twelve percent (12%) per annum, payable semiannually.
Section 5. Additional Provisions Relating to the Proposed Bonds. The provisions of
Part 11.1 of the 1915 Act shall apply to the collection of assessments and advance retirement of
bonds; provided, however, that except as otherwise provided in Part 11. 1, Parts 8 and 11 of the
1915 Act shall apply.
It is the intention of the Board of Supervisors to create a special reserve fund for the
bonds under Part 16 of the 1915 Act.
Pursuant to Section 8769 of the 1915 Act, the Board of Supervisors hereby determines
and declares that the County will not obligate itself to advance available funds from the County
treasury to cure any deficiency which may occur in the bond redemption fund to be created with
respect to the bonds; provided, however, that this determination shall not prevent the County
from, in its sole discretion, so advancing funds.
The bonds proposed to be issued in this Resolution may be refunded under Division 11.5
of the Streets and Highways Code of the State or other applicable laws permitting refunding of
the bonds, upon the conditions specified by and at the determination of the Board of Supervisors
and in accordance with the refunding provisions set forth in any bond indenture, trust agreement
or other agreement to be executed in connection with the issuance of the bonds proposed to be
issued in this Resolution; provided that any refunding bonds shall bear interest at the rate or rates
of not to exceed twelve percent (12%) per annum, the maximum number of years to maturity
thereof shall not exceed the maximum maturity of bonds being refunded and any adjustment to
assessments resulting from the refunding will be done on a pro rata basis.
Pursuant to Section 8650.1 of the 1915 Act, the Board of Supervisors hereby determines
that the principal amount of bonds maturing or becoming subject to mandatory prior redemption
in each year shall be other than an amount equal to an even annual proportion of the aggregate
principal amount of the bonds.
Section 6. Agreement with Other Public A encu, Regulated Public Utility or Mutual
Water Company. The Board of Supervisors hereby declares its intention to enter into one or
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more agreements with a public agency, regulated public utility or mutual water company if doing
so will be in the public interest.
Section 7. Public Hearing. The Board of Supervisors hereby orders that a public
hearing be held before the Board of Supervisors on May 25; 2010, at 9:30 a.m., Kenneth Hahn
Hall of Administration, 500 West Temple Street, Room 381, Los Angeles, California 90012, for
the purpose of allowing interested persons to the opportunity to comment upon, object to or
present evidence with regard to the proposed contractual assessment program or any of its
particulars.
The Board of Supervisors hereby orders the Cleric of the Board of Supervisors to publish
a notice of public hearing pursuant to Section 5898.24 of the Act and Section 6066 of the
Government Code once a week for two successive weeks. Such notice of public hearing shall be
published twice in a newspaper that is published once a week or more often, with at least five
days intervening between the respective notice publication dates, not counting such publication
dates. The period of notice will commence upon the first day of publication and terminate at the
end of the fourteenth day. The first publication shall occur not later than 20 days before the date
of the public hearing.
Section 8. Consultations with County Auditor -Controller. The Board of Supervisors
hereby directs the Chief Executive Officer and the Treasurer and Tax Collector to enter into
consultations with the County Auditor -Controller in order to reach agreement on what additional
fees, if any, will be charged to the County for incorporating the proposed contractual assessments
into the assessments of the general taxes of the County on real property.
Section 9. Designation of Program Administrator. The Board of Supervisors hereby
designates the Director of the Internal Services Department of the County as the Program
Administrator for the Contractual Assessment Program (the "Program Administrator").
Section 10. Report. The Board of Supervisors directs the Program Administrator to
prepare and file with the Board of Supervisors a report (the "Report"), at or before the time of
the public hearing described in Section 7 above, pursuant to Section 5898.22 of the Act and
containing all of the following:
(a) A map showing the boundaries of the territory within which voluntary contractual
assessments are proposed to be offered, as set forth in Section 3 above.
(b) A draft contract (the "Contract") specifying the terms and conditions that would
be agreed to by the County and a property owner within the voluntary contractual assessment
area. The Contract may allow property owners to purchase directly the related equipment and
materials for the installation of the authorized Improvements and to contract directly -for the
installation of such Improvements.
(c) A statement of County policies concerning voluntary contractual assessments
including all of the following:
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(1) Identification of types of Improvements that may be financed through the
use of contractual assessments.
(2) Identification of a County official authorized to enter into voluntary
contractual assessments on behalf of the County.
(3) A maximum aggregate dollar amount of voluntary contractual
assessments.
(4) A method for setting requests from property owners for financing through
voluntary contractual assessments in priority order in the event that requests appear likely
to exceed the authorization amount.
(d) A plan for raising a capital amount required to pay for work performed pursuant
to voluntary contractual assessments. The plan may include amounts to be advanced by the
County through funds available to it from any source. The plan may include the sale of a bond or
bonds or other financing relationship pursuant to Section 5898.28 of the Act. The plan shall
include a statement of or method for determining the interest rate and time period during which
contracting property owners would pay any assessment. The plan shall provide for any reserve
fund or funds. The plan shall provide for the apportionment of all or any portion of the costs
incidental to financing, administration, and collection of the voluntary contractual assessment
program among the consenting property owners and the County.
(e) A report on the results of the consultations with County Auditor -Controller
described in Section 8 above concerning the additional fees, if any, that will be charged to the
County for incorporating the proposed voluntary contractual assessments into the assessments of
the general taxes of the County on real property, and a plan for financing the payment of those
fees.
Section 11. Notice to Water, Electric and Natural Gas Providers. The Board of
Supervisors hereby ratifies the written notice of the proposed Contractual Assessment Program
to all water, electric and natural gas providers within the boundaries of the County given by the
County Office of Sustainability under the Internal Services Department pursuant to Section
5898.24(b) of the Act not less than 60 days prior to adoption of the resolution confirming the
Report and certain matters attendant thereto.
Section 12. Contractual Assessments. Voluntary contractual assessments levied
pursuant to the Act, and the interest and any penalties thereon, will constitute a lien against the
lots and parcels of land on which they are made, until they are paid. Unless otherwise directed
by the Board of Supervisors, the assessments shall be collected in the same manner and at the
same time as the general taxes of the County on real property are payable, and subject to the
same penalties and remedies and lien priorities in the event of delinquency and -default.
Section 13. Notice of Exemption. The Board of Supervisors hereby determines that
establishment of the Contractual Assessment Program is within a class of projects that has been
determined not to have a significant effect on the environment in that it meets the criteria set
forth in Section 15308 of the California Environmental Quality Act Guidelines and Class 8 of the
-4-
COLl1ltV's Envir6m ' nental Document Reporting Procedures and Quideline.s.. Appendix Cr. In
�Tdclltlon, the Board Of SUI)CI-VISOI-S finds that there are no cumulative impacts; unusual
CllVL1l1lStal1CC4.1 or OtIlCl- 1111litillO faCtol'S that would make the exemption im.ipplicable,based on the
pr(.)J&t records.
Section 14.. PUbliCati011 of Resolution. The Clerk, to the Board Of SUPCI-ViSOI-S is
hereby ORI&Cd 10 CaLISC this Re.1,01L.Ition to be. I)Ublished PUI-SUM11 to Section 51313. of tyre Streets
and H,ighways Code 4, the State of California, not Jess than 10 days.pi-ior fo) the date of public
licanlitly set forth in Section 7 above.
Section 15. Other Acts. The Chief EXeCLltiVC OffiCC I-, the Treas*urcr and Tax
Collector, the Proorarli Administrator, the, Director of Public Works and their desimicc-s are
Hereby authorized and directed. jointly and severally. to do) any and all acts ;and things and
deliver all ' y and all dOCLUTICT)IS which, they may, deers) necessary or advisable in order to effectuate
the purposes of this Resolution and i,tll matters incidental thereto, and any SUCK aCliOl)S
PIVViOUSIy taken by SUCII Officers are hereby ratil'W and confirmed.
Section 16. Effective Date. This Resolution - shall be effective upon its adoption by the
Board cel` Supervisors.
ie foregoing) Resolution of Intention was oil the clay of,-.AVfi 20-10, adopted
by the, Board of Supervisors of the County of' Los Angeles andlex-CAT'icio the governing body of
alt other special assessment and taxing districts, agencies and authorities for which said Board so
acls,
I
APPROVED AS "I FORM -
ANDREA SHERIDAN ORDIN
COL111ty COUllSel
Belinaz Tzishiifkoriall
Deputy County COLUISPI
SACHI A. I IAMAI
Executive Officer of the"
Board ofSUPOFViSOrS,,0t'the
COL
BY:
NOTICE OF PUBLIC HEARING
COUNTY OF LOS ANGELES
PROPOSED RENEWABLE ENERGY AND ENERGY AND WATER EFFICIENCY
CONTRACTUAL ASSESSMENT PROGRAM
WITHIN THE TERRITORY OF THE COUNTY
NOTICE IS HEREBY GIVEN that on May 25, 2010, at 9:30 a.m., at the regular
meeting place of the Board of Supervisors of the County of Los 'Angeles (the "County"),
Kenneth Hahn Hall of Administration, 500 West Temple Street (corner of Temple Street and
Grand Avenue), Room 381, Los Angeles, California 90012, the County shall hold a public
hearing to discuss the proposed formation of a renewable energy and energy and water efficiency
contractual assessment program (the "Proposed Contractual Assessment Program") within the
territory of the County, subject to a related city's approval of participation in the Proposed
Contractual Assessment Program, where applicable, and to allow interested persons to comment
upon, object to, or present evidence with regard to or inquire about the proposed program or any
of its particulars.
On April 6, 2010, the County adopted a resolution approving the boundaries of the
Proposed Contractual Assessment Program, declaring its intention to implement the Proposed
Contractual Assessment Program, directing the preparation of a report on certain particulars of
the Proposed Contractual Assessment Program (the "Report"), calling for a public hearing and
approving certain matters related thereto. The purpose of the Proposed Contractual Assessment
Program is to assist property owners in financing the installation of distributed generation
renewable energy sources improvements, energy efficiency improvements and water efficiency
improvements that are permanently fixed to residential, commercial, industrial or other real
property, which financing will be secured. by contractual assessments levied on such owner's lot
or parcel. Assessments may be levied only with the free and willing consent of the affected
owner of each lot or parcel.
At the above -referenced time and place all persons who are present will be afforded an
opportunity to comment upon, object to, or present evidence with regard to the Proposed
Contractual Assessment Program, the extent of the area proposed to be included within the
Contractual Assessment Program, the terms and conditions of the draft contract with landowners,
and the proposed financing provisions for the Contractual Assessment Program, all as set forth in
the Report. A copy of the Report will be on file in the Board Executive Office at Kenneth Hahn
Hall of Administration, 500 West Temple Street, Room 383, Los Angeles, California 90012.
Inquiries regarding the hearing proceedings may be directed to the County Office of
Sustainability of the Internal Services Department at 877-270-7781.
Dated: , 2010
Clerk of the Board of Supervisors of the
County of Los Angeles
By:
Deputy
ATTACHMENT B
NOTICE OF PROPOSED CONTRACTUAL ASSESSMENT PROGRAM
COUNTY OF LOS ANGELES
Notice is hereby given pursuant to Section 5898.24(b) of the Streets and Highways Code
of the State of California by the County of Los Angeles, a political subdivision of the State of
California (the "County"), to all water, electric and natural gas providers within the boundaries
of the County that on or about April 6, 2010 the Board of Supervisors of the County (the "Board
of Supervisors") will consider a resolution declaring the County's intent to designate an area,
which shall encompass_ the entire geographic territory within the boundaries of the County,
within which the County and property owners within the County may enter into voluntary
contractual assessments to finance the installation of distributed generation renewable energy
sources and energy efficiency and water efficiency improvements that are permanently fixed to
real property pursuant to Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code of
the State of California. Participation by property owners within an incorporated city will be
subject to the related city's approval of participation in the proposed contractual assessment
program. The Board of Supervisors is also expected to conduct a hearing on or about May 25,
2010 to afford all persons who are present an opportunity to comment upon, object to, or present
evidence with regard to the proposed contractual assessment program, the extent of the area
proposed to be included within the program, the terms and conditions of the draft contract
between the County and certain property owners, or the proposed financing provisions. This
notice is provided for information purposes only, no action is required to be taken by water,
electric or natural gas providers
For additional information, please contact the County Office of Sustainability of the
Internal Services Department at 877-270-7781.
Dated as of March 26, 2010
COUNTY OF LOS ANGELES, CALIFORNIA
Los Angeles County
Energy Program
(LACEP)
cgtIFORN�P =`
Los Angeles County Energy Program
Program Report
Table of Contents
I. INTRODUCTION.......................................................................................................................................1
Background...............................................................................................................................................1
ProgramBenefits......................................................................................................................................2
ProgramAdministration............................................................................................................................
3
ProgramDuration.....................................................................................................................................3
II. PROGRAM REQUIREMENTS.................................................................................................................3
Geographic Parameters and Participating City Requirements.................................................................3
Eligible Owners and Properties................................................................................................................4
EligibleImprovements..............................................................................................................................5
EligibleCosts ................... :........................................................................................................................
5
III. PROGRAM FINANCING.........................................................................................................................5
Strategyto Raise Capital..........................................................................................................................
5
TheEnergy Fund......................................................................................................................................
6
Maximum Aggregate Contractual Assessment....................................................................:...................6
Administrative Costs/Application Fee.......................................................................................................6
MaximumDisbursement Amounts............................................................................................................
7
Single and Multiple Disbursements..........................................................................................................
7
AssessmentInterest Rate.........................................................................................................................7
Annual Administrative Assessment; Consultation with County Auditor -Controller ................................... 7
AssessmentTerm.....................................................................................................................................7
Assessment Collection and Default..........................................................................................................7
Rebatesand Incentives............................................................................................................................8
FinancingProcess....................................................................................................................................
8
Priorityof Funding.....................................................................................................................................9
Property Owner Financial Responsibilities...............................................................................................9
IV. CHANGES TO THE PROGRAM REPORT.............................................................................................9
Appendix.A: Area Map
Appendix B: Eligible Improvements
Appendix C: Draft Assessment Contract
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Los Angeles County Energy Program
Program Report
.L INTRODUCTION
The Los Angeles County Energy Program ("LACEP" or "Program") is intended to help property owners
make capital investments in distributed generation renewable energy sources and energy efficiency and
water efficiency improvements (collectively known as "Improvements") that will provide long-term benefits
and reduced energy bills. The Program will provide a financing mechanism for the Improvements through
ani assessment contract (the "Assessment Contract") between the County of Los Angeles (the "County")
and the property owner, pursuant to which the County will disburse a specified amount to the property
owner. The property owner will pay contractual assessments levied against the property through annual
installments on the property tax bill. If the owner sells the subject property prior to full repayment of the
assessment, the repayment obligation remains a lien on the subject property. The County intends to
finance the Program in part by issuing (or causing to be issued) bonds payable from contractual
assessment revenues. Participation in the Program is completely voluntary and property taxes for non-
participating property owners are unaffected by the Program.
This Program Report ("Report") is prepared pursuant to Section 5898.22 of Chapter 29 of the California
Streets and Highways Code ("Chapter 29") in connection the establishment of LACEP. It includes the
following:
1) A map showing the boundaries of the Program - the territory within which contractual
assessments are proposed to be offered. See Appendix A attached hereto.
2) A draft Assessment Contract specifying the terms and conditions that would be
applicable to the property owner and the County. See Appendix C attached hereto.
3) A statement of County policies concerning voluntary contractual assessments, including
all of the following:
■ Identification of the types of facilities, distributed generation renewable energy
sources, or energy or water efficiency improvements that may be financed
through the use of contractual assessments.
■ Identification of one or more County officials authorized to enter into voluntary
contractual assessments on behalf of the County.
• A maximum aggregate dollar amount of voluntary contractual assessments.
4) A method for establishing priority order among the requests from property owners for
financing through LACEP.
5) A financing plan for raising capital.
6) A report on the results of consultations with the County Auditor -Controller concerning the
additional fees, if any, that will be charged for incorporating the proposed voluntary
contractual assessments into the general taxes of the County on real property, and a plan
for financing the payment of those fees.
Btic1i ,roi td
Widespread implementation of distributed generation renewable energy sources and energy efficiency
and water efficiency measures in existing buildings within the County will help the State of California
("State") reach the greenhouse gas reduction goals set forth under State Assembly Bill 32 ("AB 32") and
help the County and surrounding cities achieve their own targeted reductions. Participating property
owners can help to achieve greenhouse gas reductions, reduce water and energy use, and save money
by investing in these measures.
Chapter 29 authorizes various public agencies, including counties and cities, to designate areas within
which free and willing property owners can enter into contractual assessments to finance the installation
of Improvements that are permanently fixed to residential, commercial, industrial, agriculture or other real
property. LACEP is the voluntary contractual assessment program developed by the County pursuant to
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Los Angeles County Energy Program
Program Report
Chapter 29. Any assessments and liens under LACEP are levied only with the consent of free and willing
owners of the property on which Improvements are to be made. The Program will provide financing for
qualifying property owners within the County to install Improvements pursuant to the terms and conditions
of the Assessment Contracts. Property owners will pay contractual assessments levied against their
property in installments on their property tax bills. Each contractual assessment is tied directly to the
applicable property and any unpaid amount at sale or other disposition of the property will remain on the
property and become the responsibility of the subsequent owner.
NoLTram Beiiefks
LACEP is intended to provide multiple benefits, including the potential for reduced utility bills for
participating property owners. LACEP also offers a means of financing Improvements with a lower equity
contribution than may be required in a conventional financing and establishes a loan obligation that is
attached to the property and not to the individual borrower. The financing is intended to be competitive
with conventional fixed-rate loans and provide for a streamlined financing and repayment process. All
available State, utility or other energy efficiency, water efficiency or renewable energy rebates, incentives
and all State and federal tax credits remain available to the property owner in connection with the
Improvements (subject to applicable rules, restrictions, regulations and the current status of programs
administered by other such entities), unless otherwise specified.
Incorporated cities may participate in LACEP without incurring the costs of forming separate programs
because LACEP's geographical boundary is coterminous with the County's boundaries and includes,
subject to such cities' approval of participation in LACEP, all 88 incorporated cities. Having a single
program available to all residents of the County is anticipated to increase participation by eliminating
confusion for residents in finding the appropriate program. Cities may join LACEP by adopting a
resolution allowing property owners in their respective jurisdictions to apply for financing and implement
Improvements under LACEP.
The Program seeks to mitigate long-term regional greenhouse gas production through the reduction of
energy usage from traditional utility sources and help the County and participating cities satisfy the
State's greenhouse gas reduction goals under AB 32. When it was signed into law in 2006, AB 32
established statewide goals for the reduction of greenhouse gas emissions and may yet require counties
and cities to adopt regional greenhouse gas emission limits similar to the statewide target of achieving
1990 levels of greenhouse gas emissions by 2020. To the extent permitted by law, the County will hold
and retain any carbon credits, offsets, carbon cap allocations, or other benefits attributable to the
Improvements financed by LACEP. It is the intention of the County to apply any benefits resulting from
such carbon credits to the furtherance of LACEP.
LACEP has the potential to provide a significant industry shift in the region towards an energy efficiency,
water efficiency and renewable energy economy. LACEP aims to be a catalyst in spurring a new "green"
economy in the County by supporting energy project inspection and installation jobs, job training and
workforce development, local manufacturing and distribution, research and development, and marketing
and outreach.
For the first few years of the Program, American Recovery and Reinvestment Act ("ARRA") grants will be
used to partially fund LACEP. By the end of the ARRA funding term in 2012, LACEP seeks to achieve
the following goals:
1. Retrofit 15,000 single-family homes with a 20% average energy reduction.
2. Create 1,600 home energy retrofit jobs and 1,000 ancillary jobs.
3. Reduce annual purchased energy consumption in retrofitted homes by an aggregate 150 billion
British Thermal Units and $2 million in utility charges per year.
4. Reduce the County's annual greenhouse gas emissions attributable to energy consumption in its
. existing housing stock by 20,000 tons of carbon dioxide.
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Los Angeles County Energy Program
Program Report
The benefits to both the regional economy and the environment are expected to increase once individual
cities join LACEP, as the above forecasts are quantified solely for unincorporated areas of the County.
Piw ,rami Adniiiristrcadoii
The Program will be governed by the Board of Supervisors of the County of Los Angeles, which will
approve the Program parameters, approve the issuance of bonds, and delegate authority to authorized
officers to administer the'Program.
The Director of the County's Internal Services Department will serve as the Program Administrator and
will provide day-to-day management of the Program, including design, implementation, and
administration. The authority to approve and enter into individual Assessment Contracts will be delegated
by the Board of Supervisors to the Program Administrator.
The County Office of Sustainability ("COS"), within the Internal Services Department, and the Program
Administrator will manage all Program activities, including, but not limited to, the following:
■ Marketing and community outreach;
■ Energy surveys and technical support for individual projects;
■ Customer service, including question and answer support to interested Program participants;
■ Assisting in project development;
■ Processing Program applications;
■ Managing and tracking funds available for financing Improvements;
■ Managing and tracking progress of the Improvements and financing therefor;
■ Tracking individual and collective energy and greenhouse gas benefits;
■ Integrating LACEP with other County, State, utility and regional rebate/incentive programs;
• Working and coordinating with participating cities and other jurisdictions;
■ Providing information on local and regional environmental programs; and
■ Reporting progress and expenditures according to mandated reporting methods applicable to
appropriated funds, including amounts received pursuant to ARRA.
These activities are intended to provide quality Program design, administration and implementation for
qualifying property owners who may otherwise be unable to finance and install the Improvements.
Prat; rani .l) tiwtion
Unless otherwise directed by the Board of Supervisors, the Program will continue as long as there is
sufficient demand and funding for the Improvements.
IL PROGI?AYVI RTQUII?F..'iV l-,-Nl:S'
Geoxrrahhic• Pararnelers and Participating City Rectrrirenrents
LACEP is available in the unincorporated areas of the County immediately upon establishment of the
Program by the Board of Supervisors. Cities within the County may join LACEP and make assessment
financing available to qualifying property owners located within their city's boundaries. Anytime after the
County's establishment of the Program, a city's legislative body may adopt a resolution requesting
inclusion in the County Program. Pursuant to such resolution to participate in the Program, the city will
find and declare that the properties in the city's incorporated area will benefit from participation. Further,
the city's resolution will authorize the County to set the terms of LACEP, implement the Program, and
take action necessary for financing the Improvements.
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Los Angeles County Energy Program
Program Report
Participation in LACEP offers cities and their property owners the following advantages:
■ An opportunity to save money through energy and water efficiency improvements;
■ The ability to take advantage of substantial financial incentives and rebates from multiple
sources;
■ A financing mechanism that. establishes an obligation that remains attached to the property; and
• Job creation and stimulation of the economy.
Cities may elect to withdraw from participation in LACEP by adopting a resolution terminating their
involvement. If a participating city elects to withdraw from LACEP, no future assessment financing will be
made in that city, but assessment obligations made previous to the city's termination will remain in effect.
A map showing the Proposed Program boundaries is attached in Appendix A.
Eligible Owners arid Noperties
All owners of improved real property within participating areas are eligible to submit an application for
LACEP. Qualifying property owners may be individuals, associations, business entities, cooperatives and
any owner who pays real property taxes. At this time, financing through LACEP is not available for
properties that are not subject to property taxes, such as governmental entities and certain non-profit
corporations.
To protect the Program from defaults and to improve access to the capital markets, property owners must
meet the following minimum requirements to qualify for financing:
■ Property is located within Los Angeles County, and if within the boundaries of a city, the city has
adopted a resolution to join the Program;
■ Applicant is the legal owner of the property;
■ All legal owners of the property agree to participate in the Program;
■ The property is not subject to involuntary liens as set forth in the Assessment Contract or any
other Program document;
■ Property taxes and assessments are current on the property and have not been delinquent for a
period up to 5 years (or since the date of the most recent transfer if less than 5 years);
■ Property owner certifies that he/she is not in bankruptcy and the property is not an asset in a
bankruptcy proceeding;
■ Property owner certifies that he/she has not declared bankruptcy within the last 10 years;
■ Property owner certifies and demonstrates that he/she is current on his/her mortgage, has not
defaulted on the deed(s) of trust and can legally enter into the Program;
■ Improvement costs are reasonable to property value. Property must meet a minimum value -to -
lien ratio';
■ Property must meet a positive equity test and not exceed a maximum loan-to-value2 ratio; and
■ Property is subject to the appropriate jurisdiction's (County, city, or town) permitting and
inspections and all other applicable federal, State, and local codes and regulations.
Property owners may submit more than one application for funding under the Program if additional
Improvements are desired by the owner. However, all existing criteria must be met at the time of each
new application. Valuation of the property will reflect either the assessed value or the market value as
determined by using established industry approved methodologies. Costs for the scope of work will be
based on contractor estimates, quotes provided by the property owner, and general industry standards.
Additional due diligence or underwriting criteria may be required for the financing of large projects.
Value of the property divided by the amount of the contractual assessment.
.2 Aggregate_ total of all liens secured by real estate mortgages on the property divided by the, value of the property.
4 1 P a g e
Los Angeles County Energy Program
Program Report
The Program Administrator may exercise discretion in determining eligibility and any additional criteria
required for financing Improvements. Furthermore, the minimum eligibility requirements provided in this
Report are subject to change pursuant to the future financing needs of the Program.
Eligible hnproyentews
The Program provides property owners the opportunity to take advantage of a wide range of
Improvements, subject to the following provisions:
■ The Program will only finance distributed generation renewable energy sources and energy
efficiency and water efficiency measures that are permanently fixed to the property.
■ Property owners who elect to engage in broader retrofit projects (such as residential or
nonresidential remodeling) will only be provided financing for costs associated with Improvements
available under the Program.
■ The Program is intended to finance the replacement of working, inefficient equipment and
building materials and the installation of new equipment and building materials that reduce energy
consumption (beyond that required by existing, applicable building codes), produce renewable
energy, or reduce energy in connection with water usage. The Program will also make financing
available for purchasers of residential, commercial or industrial properties who wish to add
Improvements after transfer of title is complete.
Property owners are responsible for the Improvements installed on their property. Property
owners must address performance and other system -related issues directly with the installer in
accordance with the terms of their contract with the installer. Property owners are responsible for
maintenance and repair of the Improvements.
Examples of Improvements available for financing under LACEP are provided in Appendix B.
Elikible Costs
Eligible costs of the Improvements include the cost of surveys and audits, permits3 and inspections,
equipment, installation from licensed, approved professionals, and follow-up inspections. Installation
costs may include, but are not limited to" energy audit consultations, labor, design, drafting, engineering,
permit fees, and inspection charges. A qualified contractor of the property owner's choice can be
selected to complete installation of Improvements.
For each property, the Program Administrator will determine whether the estimated equipment and
installation costs are reasonable. The Program Administrator will evaluate market conditions and may
require the property owner to provide additional bids to determine whether costs are reasonable. While
the property owner will be able to choose the contractor of his/her choice, the amount eligible for the
LACEP financing may be limited to the amount deemed reasonable by the Program Administrator.
Projects that exceed a certain size and dollar amount may be subject to additional review.
III: ILIIOGltA.1'1 FINANCING
Strale-y to Raise Capita
The County intends to raise capital for the Program through one or more of the following financing
arrangements:
■ Issuing or causing the issuance of bonds pursuant to Section 5898.28 of the Streets and
Highways Code, the principal and interest of which will be repaid from contractual assessments;
3 All Improvements that require permits will be required to obtain such a permit from the local jurisdiction. Final inspection will
ensure. that the Improvementswere completed.
........
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Los Angeles County Energy Program
Program Report
■ Advancement of Certain County funds or funds held by the County Treasurer and Tax Collector,
which will be repaid through contractual assessments or reimbursed from proceeds of a debt
issuance;
■ Application of funds received pursuant to federal and State programs and available for LACEP
financing purposes;
■ Issuing debt or entering into loan arrangements to fund the Improvements; and
• Private or owner -arranged financing.
To the extent that the County issues debt, it is expected to include a debt service reserve fund in the
amount sufficient to enhance the marketability of the debt. The proceeds of the debt issuance will be
applied to cover the costs of Improvements,'fund the debt service reserve fund, and pay costs of
issuance of the debt. The County may also pursue other financing options not listed above should such
options benefit the ongoing viability of the Program.
The lnerj% F'urrrl
The County will create a special fund, the Energy Fund ("Fund"), which will hold contractual assessments
revenues received pursuant to the Assessment Contracts. Moneys in the Fund shall be used to make
payments on debt issued by or on behalf of the County, fund certain administrative costs of the Program,
replenish the debt service reserve fund, if required, and repay funds advanced by the County. Amounts
in the Fund may also be used to finance additional Improvements secured by contractual assessments
and any other reasonable activity needed to advance the Program. Payment of the contractual
assessments will be made pursuant to Assessment Contracts between the property owner and the
County.
Alavimrrrn AcYtyrevwle Contractual Assesswierit
The County is authorized to enter into up to $1.0 billion in aggregate dollar amount of voluntary
contractual assessments. The County will coordinate the timing and issuance of debt with the goal of
providing the lowest possible interest rate to qualifying property owners and maintaining the long-term
financial viability of the Program.
4clnnntstrative Costs/flnnlicaturn Fee
The County will offer the Program as an additional County service that will help property owners achieve
reductions on their energy bills and other environmental goals, while helping the County achieve its own
environmental goals. The County will be responsible for:
■ Development and operation of LACEP;
■ Acquisition of LACEP financing;
• Overall reporting of Program status and goals, including reports to financing agencies, regulators,
and stakeholders;
■ Overall structure and enforcement of Program governance; and
■ Management and administration of LACEP consultants needed to perform services under the
Program.
Certain administrative costs are anticipated in connection with the aforementioned responsibilities. All or
a portion of such administrative costs may be financed through the interest component of the contractual
assessment. The Program may also assign direct fees or charges to property owners for certain services
provided during the process of securing an Assessment Contract. The County will recover a portion of
these initial administrative costs through a one-time application fee.
.......
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Los Angeles County Energy Program
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Maximum llisburserrient Antottnts
The County will set a maximum disbursement amount for individual properties under the Assessment
Contract. Where possible, the actual amount disbursed to a participating property owner pursuant to an
Assessment Contract will equal the actual cost of Improvements. In the event that the final cost of
Improvements exceeds the agreed upon maximum disbursement amount, the property owner will be
solely responsible for the payment of excess costs incurred to complete the Improvements.
Single avid Multitile Dishursetnents
Most disbursements will be delivered to property owners in a single payment upon completion of the
Improvements. However, upon Program Administrator approval, some projects may qualify for multiple
disbursements, which will allow for one or more payments to be made prior to project completion.
Assessment Interest Rate
The County will set a maximum interest rate for individual properties under the Assessment Contract.
The final interest rate will be determined such that the total amount of contractual assessment payments
(principal and interest) will be sufficient to repay the debt issued to finance the Improvements, pay the
financing costs of such debt issuance, finance a debt service reserve fund with respect to such debt and
fund eligible administrative costs so that the Program remains financially viable. The County Treasurer
and Tax Collector, in conjunction with the Program Administrator, will determine individual contractual
assessment interest rates. Under no circumstances will the interest rate exceed .the maximum rate
allowed by law.
.,Annual Administrative Assessment; Consultation with County Auditor -Controller
LACEP reserves the right to charge an Annual Administrative Assessment to cover costs incurred by the
County for the ordinary and necessary costs of administering the levy and collection of the contractual
assessments and all other administrative costs and incidental expenses related to the debt to be issued.
Separate from any application fee or administrative cost recovered through amounts paid on the
contractual assessment interest rate, the Annual Administrative Assessment will be collected in the same
manner as the contractual assessment and may be adjusted annually to reflect changes in costs. The
County Auditor -Controller has been consulted regarding any fees resulting from the incorporation of the
contractual assessments into the general taxes of the County on real property. It has been determined
that any such fees shall be collected pursuant to the Annual Administrative Assessment.
A ssessnient Terin
The term of the contractual assessments will be no greater than the expected useful life of the
Improvements for each individual Assessment Contract. In no event will the term of any contractual
assessment exceed the maximum term allowed by law. The term of each contractual assessment will be
set under the Assessment Contract.
Assessment Collectior7 and DeMult
The contractual assessments will be collected in the same manner and at the same time as the general
property taxes of the County. The contractual assessments are subject to the same penalties, remedies,
and lien priorities in the event of delinquency and default. If any contractual assessment becomes
delinquent and property taxes remain unpaid, the County shall have the right to initiate foreclosure
proceedings on the subject property. The LACEP foreclosure policy will be developed in connection with
future financing arrangements and will take into consideration any required covenants associated with a
bond issuance.
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Los Angeles County Energy Program
Program Report
.Rebates and Incentives
Financing through the Program may coincide with current and future distributed generation renewable
energy, energy efficiency and water efficiency financial incentives available from utility providers as well
as local, State, federal, and other agencies. The value of expected rebates and incentives will be
factored into the financing available to the property owner. The Program will advise, and may require
that, participants apply for any and all applicable rebates and incentives available at the time of financing.
References to rebates and financial incentives in this Report do not include income tax rebates.
Finaancinl; M --cess
The process for property owners to receive financing through LACEP is designed to be helpful,
transparent, and straightforward. Presented below are the general procedures for the application,
funding, and repayment process:
■ Education. Property owners may access a variety of resources to learn about the Program, the
financing terms, and other details. These resources may include a Program website, service
centers staffed to assist property owners, and information made available at community events.
• Application. Property owners may apply for a funding reservation from LACEP and pay a non-
refundable application fee. Applications must include a proposed project (scope of work) and a
contractor bid.
■ Review and Approval. The Program Administrator will approve an application only after
confirming that the applicant and proposed project satisfy the underwriting criteria and other
Program requirements.
■ Reservation of Funds. Once the application is approved, the Program Administrator and the
property owner will enter into the Assessment Contract. At this point in time, a maximum
disbursement amount, loan term, and maximum interest rate will be set. The property owner will
also agree to the terms and conditions of the Assessment Contract. The Program Administrator
will provide assessment information to the County and an assessment lien will be filed with the
County Registrar -Recorder.
■ Installation. The property owner will receive a notice to proceed with the Improvements. A
qualified installer must complete the installation of authorized Improvements on the property
within the required timeframe after receiving the notice. In some cases, the Program
Administrator in his/her sole discretion may grant a time extension.
■ Evidence of Compliance/ Disbursement of Funds. The County is not obligated to disburse
funds unless and until each of the requirements set forth under the Assessment Contract are
satisfied or waived by the Program Administrator. Upon satisfaction of the above, the Program
Administrator will release funds to the property owner in the amount of the actual cost of
Improvements, but not exceeding the maximum disbursement amount set forth in the
Assessment Contact. At this time, the Program Administrator will notify the property owner of the
actual interest rate and amount of the contractual assessment.
■ Repayment. After the release of funds, the County will place the assessment on the property tax
roll for the tax year immediately following the disbursement date. The property owner will be
expected to pay the contractual assessment installments in the amounts and at the times
specified in the Assessment Contract. Prepayment of the contractual assessment will be
permitted, however, penalties may apply. Any applicable penalties resulting from prepayment will
be set forth in the Assessment Contract.
8,1Pagc
Los Angeles County Energy Program
Program Report
Priority of Fundi
Applications from property owners for financing will be given priority based on the date on which the
application is approved. If a request from a property owner for financing would cause LACEP to exceed
the maximum amount of contractual assessments for the Program, then that application will be ineligible
for financing. The Program Administrator shall retain the authority to grant exceptions to the priority
status of individual applications.
Property Owner Financial Responsibilities
The following types of costs are examples of those that will be the responsibility of the property owner
and will not be financed through the Program:
■ Application fee;
■ If applicable, title insurance and property insurance costs;
■ Late payment fees;
■ If applicable, costs associated with compliance with the California Environmental Quality Act; and
■ Costs associated with repairs and maintenance of the Improvements.
IV. C HINGES TO TIIE PRO"aRA M REPORT
The Program Administrator may make changes to this Report that he/she reasonably determines are
necessary to clarify its provisions. Any changes made to this Report that materially modify the LACEP
shall only be made after approval by the Board of Supervisors.
The Program Administrator may modify the schedule of eligible Improvements attached as Appendix B
and the draft Assessment Contract attached as Appendix C as deemed necessary or desirable to
effectuate the intent of the Program.
91 Page;
Los Angeles County Energy Plan
Program Report
Appendix A: Area Map
7,61
NO IA Ot I
1111111111WMINNM��
E
On
SCALE IN MILES
INCORPORATED AREAS
Pacific Ocean
UNINCORPORATED AREAS
SUPFRVISOSIAI,
UOUN DARILS
4,084 SOUARE MILES
Appendix A A 1
Los Angeles County Energy Program
Program Report
Eligible improvements will include, but are not limited to, the following types of Improvements, subject to
approval by the Program Administrator:
Energy Efficiency Improvements
■ Air sealing
• Duct sealing and weather stripping
■ Attic, duct, floor, roof and wall insulation
■ Hot water system insulation
■ Fans (Bathroom, ceiling, whole house)
■ Energy efficient pool pumps
• HVAC systems
■ Programmable thermostats and energy management systems
• Light fixtures
■ Energy Star cool roof
■ Radiant barriers
■ Windows, doors, skylights
■ Window film
Water Efficiency Improvements
■ Hot water heater
■ On -demand water recirculation control pump
■ High -efficiency toilets and urinals
■ Showerheads and aerators
■ Smart irrigation/ Water efficient landscaping
■ Rainwater harvesting system
■ Grey water system
Distributed Generation Renewable Energy Improvements
■ Solar hot water heating systems
■ Solar thermal installation
■ Solar space heating
■ Photovoltaic systems
• Wind energy systems
■ Fuel cell power systems
Appendix B B 1
(See attached.)
Los Angeles County Energy Program
Program Report
Appendix C C-1
HD&W LLP — 5/10/10 Draft
LOS ANGELES COUNTY ENERGY PROGRAM
ASSESSMENT CONTRACT
This Assessment Contract (this "Contract") is made and entered, into as of this day
of , 20, by and between the COUNTY OF LOS ANGELES, a political subdivision
of the State of California (the ".County"), and and
(collectively, the "Owner").
WHEREAS, the County has established the Los Angeles County Energy Program
("LACEP") pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (the "Act"), in connection with which the County may levy assessments against
developed properties in the County, with the free and willing consent of the owners of the
properties, to finance the acquisition and construction on and installation in the assessed
properties of certain qualifying renewable energy systems and energy and water efficiency
improvements.
WHEREAS, the Owner has reviewed the Program participant handbook attached as
Exhibit A hereto (the "Participant Handbook") and submitted an application to participate in,
LACEP (the "Application"; together with Participant Handbook and this Contract, the "Contract
Documents") to finance the acquisition, construction and installation of the renewable energy
systems, energy efficient improvements and/or water efficiency improvements described in
Exhibit B attached hereto (the "Improvements") on that certain real property of the Owner
described in Exhibit C attached hereto (the "Property") and the County has approved such
Application.
WHEREAS, the County may fund LACEP through a number of financing mechanisms,
including with proceeds of bonds to be issued by the County, with proceeds of loans derived
from bonds issued by the Los Angeles County Public Works Financing Authority (the
"Authority") and from amounts to be advanced through available funds of the County.
WHEREAS, the County wishes to provide for the terms and conditions pursuant to which
the Owner will participate in LACEP and pay assessments to finance the Improvements
hereunder.
NOW THEREFORE, in consideration of the mutual covenants contained herein and
other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree as follows:
1. Financing Terms
(a) Disbursement Amount; Maximum Disbursement Amount. Subject to the
conditions set forth herein, the' County agrees to disburse moneys to the Owner in the amount of
the actual cost of the Improvements (the "Disbursement Amount"); provided the Disbursement
Amount shall not exceed the maximum amount set forth in Exhibit B hereto (the "Maximum
Disbursement"). LACEP Program Administrator (the "Program Administrator") shall determine
the Disbursement Amount on the basis of the best available written evidence of the actual cost of
the Improvements and in the exercise of the Program Administrator's reasonable judgment. The
Owner agrees to complete the Improvements. The Owner agrees to pay for and shall be solely
responsible for the payment of all costs to complete the Improvements described in the
Application which exceed the Maximum Disbursement.
(b) Repayment by Owner.
(i) Assessment. In consideration of the disbursement of the Disbursement
Amount, the Owner shall pay to the County an amount equal to the Disbursement
Amount, certain financing costs, including any capitalized LACEP administrative
expenses, and the interest accrued thereon. Such amounts shall be repaid by the Owner
to the County by the payment of. an aggregate assessment levied against the Property
pursuant to Section 5898.30 of the Streets and Highway Code of the State of California
(the "Assessment") without deduction or offset for any amounts the Owner may claim
due to it by the County, all as set forth in Exhibit B attached hereto.
(ii) Interest on Assessment. Interest shall be payable in installments,
computed on the basis of a 360 -day year, and shall accrue on the unpaid Assessment from
[the date of this contract ' ] [the date any portion of the Disbursement Amount is disbursed
to the Owner] at the rate determined by the Program Administrator in his/her sole
discretion at the time of disbursement or final disbursement, as applicable, of the
Disbursement Amount. The maximum interest rate applicable to the unpaid Assessment
and the interest installments therefor are set forth in Exhibit B hereto. The Program
Administrator will give notice to the Owner of the interest rate applicable to the unpaid
Assessment and the related interest installments as soon as practicable after its
determination; which notice will be substantially in the form attached as Exhibit D hereto
(the "Notice of Interest Rate and Payment Schedule").
(iii) Annual Administrative Assessment. The Owner shall pay to the County,
without deduction or offset, an annual assessment levied against the Property to pay costs
incurred by the County in connection with the administration and collection of the
Assessment, the administration or registration of any associated bonds, securities or other
financing arrangements, and the administration of any reserve fund or other related funds
(the "Annual Administrative Assessment"). The Annual Administrative Assessment
shall not exceed the amount set forth in Exhibit B hereto and may be changed from time
to time by the Program Administrator, in his sole discretion, subject to the maximum
Annual Administrative Assessment.
(iv) Financing Costs in the Event of Noncompletion. If the Owner fails to
install the Improvements in compliance with LACEP requirements following execution
of this Assessment Contract, the Owner shall pay for all expenses incurred by the County
In the case of a County financing with accrued interest.
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or any of its agents in connection with levying or removing the assessments hereunder
and financing the Improvements, including costs relating to the redemption of bonds
issued to finance the Improvements.
(c) Prepayment. The Owner may prepay the Assessment in whole and in part by
paying all or a part of the principal amount owing on the Assessment, plus the applicable
prepayment premium set forth in Exhibit B hereto, and accrued interest. Interest on the
Assessment may accrue until the next available redemption date for any bonds or other evidences
of indebtedness, or other financial arrangements entered into by the County pursuant to LACEP
which financed the Assessment in whole or in part. Such redemption date shall not exceed
(__) days from the date of prepayment of the Assessment. The Owner shall notify the Program
Administrator in writing of the Owner's determination to prepay the Assessment at least (�
business days prior to the date the Owner intends to prepay the Assessment.
(d) Term of Contract. The term of this Contract shall be as set forth in Exhibit B
hereto, commencing upon the execution hereof and ending on the date the Assessment and any
applicable penalties, costs, fees, and charges have been paid in full; provided, however, the
estimated payment schedule may be adjusted as provided in this Section 1. The initial amount of
each Assessment and Annual Administrative Assessment installment that will be levied is set
forth in Exhibit B attached hereto. The amount of each Assessment and Annual Administrative
Assessment installment that will be levied each year, as adjusted to reflect the applicable interest
rate determined by the Program Administrator but excluding any penalties that may accrue, is set
forth in Exhibit D attached hereto.
2. Lien of Assessment and Annual Administrative Assessment; Special Benefit.
(a) Lien Against Property. The execution of this Contract by the parties constitutes
the levy of the Assessment and the Annual Administrative Assessment by the Board of
Supervisors against the Property without any further action required by the parties. The Owner
consents to the levy of the Assessment and the Annual Administrative Assessment, including
each installment thereof and any interest and penalties that accrue with respect thereto, on and
recordation of a lien against the Property and agrees that, upon the execution of this Contract by
the parties, the Property shall be subject to the Assessment and the Annual Administrative
Assessment in accordance with and pursuant to this Contract, the Act and applicable law.
(b) Notice of Assessment; Notice of Payment of Contractual Assessment Required.
Upon execution of this Contract, the County will execute and cause to be recorded in the Office
of the Registrar-Recorder/County Clerk a notice of assessment substantially in the form attached
as Exhibit E hereto (the "Notice of Assessment") and a document entitled "Payment of
Contractual Assessment Required" substantially in the form attached as Exhibit F hereto (the
"Notice of Payment of Contractual Assessment Required"). Upon recordation of the Notice of
Assessment in the Office of the Registrar-Recorder/County Clerk, the Assessment and the
Annual Administrative Assessment, including each installment thereof and any interest and
penalties that accrue with respect to the Assessment and the Annual Administrative Assessment,
shall constitute a lien upon the Property until paid. The Notice of Assessment and Notice of
Payment of Contractual Assessment Required, as recorded, shall initially reflect the Assessment
as set forth in Exhibit B. Following the County's final disbursement of the Disbursement
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Amount pursuant to Section 6 hereof, the Assessment, shall equal the amount set forth in Exhibit
D and the Notice of Assessment and Notice of Payment of Contractual Assessment Required will
be supplemented accordingly.
(c) Priority of Lien. The lien of the Assessment and the Annual Administrative
Assessment shall be coequal to and independent of the lien for general taxes and prior and
superior to all liens, claims and encumbrances on or against the Property except (i) the lien for
general taxes or ad valorem assessments in the nature of and collected as taxes levied by the
State of California or any county, city, special district or other local agency, (ii) the lien of any
special assessment or assessments the lien date of which is prior in time to the lien date of the
Assessment and the Annual Administrative Assessment, (iii) easements constituting servitudes
upon or burdens to the Property, (iv) water rights, the record title to which is held separately
from the title to the Property and (v) restrictions of record.
(d) Special Benefit to Property.
(i) Acknowledgement. The Owner expressly acknowledges that the
Improvements confer a special benefit to the Property in an amount at least equal to the
Assessment.
(ii) Waiver of Provisions Other Than Those of the Act. The Owner expressly
waives to the fullest extent permitted by law the notice, protest and hearing procedures
and provisions of any applicable law other than the Act with respect to the levy and
collection of the Assessment and the Annual Administrative Assessment, as described in
Section 2 and Section 3, respectively, hereof.
Collection of Amounts Due; Failure to. Pay.
(a) Collection through Property Tax Bill. Annual installments of the Assessment and
the Annual Administrative Assessment shall be collected on the property tax bill pertaining to
the Property. The annual proportion of the Assessment and the Annual Administrative
Assessment coming due in any year shall be payable in the same manner, at the same time and in
the same installments as the general taxes of the County on real property are payable, and the
assessment installments shall be payable and become delinquent at the same times and the same
proportionate amounts and shall bear the same penalties and interest after delinquency, and be
subject to the same provisions for redemption and sale, as the general taxes on real property of
the County.
(b) Failure to Pay. Failure to pay any installment of the Assessment and the Annual
Administrative Assessment, including interest and penalties with respect thereto, shall result in
the accrual of penalties and interest on the amounts due and may result in the foreclosure of the
lien of the Assessment and the Annual Administrative Assessment, as described in Section 13(e)
hereof and provided by law. Except as provided in Government Code Section 53936, the liens of
the Assessment and the Annual Administrative Assessment are not subject to extinguishment by
judicial foreclosure or the sale of the Property on account of the nonpayment of any taxes.
4. Commencement and Completion of Improvements.
(a) Consent and Authorization. Upon the availability of funding under LACEP, the
Program Administrator will give to the Owner a notice to proceed in the form of Exhibit G
hereto (the "Notice to Proceed"), which notice shall constitute consent and authorization
pursuant to Section 5898.21 of the Act for the Owner to purchase directly the related equipment
and materials for the Improvements and to contract directly for the construction on and/or
installation in the Property of the. Improvements. The Owner bears the risk of any costs of the
Improvements incurred prior to receipt of the Notice to Proceed. The Owner may perform the
construction and/or installation on the Property provided that the Owner is deemed a qualified
installer by the Program Administrator in his/her sole discretion in accordance with the
Participant Handbook.
(b) Date of Completion of the Improvements. Subject to Section 13(g) hereof, the
Owner agrees to complete installation of the Improvements no later than —days after the date of
the Notice to Proceed of this Contract. The Owner and the Program Administrator may agree to -
an extension of this completion date for good cause shown, but in no event shall the completion
date be more than one year from the date of the Notice to Proceed.
Use of Proceeds.
The Owner shall use the Disbursement Amount for the sole purpose of paying for the
reasonable costs and expenses of the Improvements on.the Property, and in connection therewith
the Owner shall comply with all requirements set forth in the Contract Documents.
6. Conditions Precedent to Disbursement of Funds
(a) Conditions Precedent to Disbursement. of Funds. Notwithstanding anything to the
contrary contained herein, the County shall have no obligation to disburse funds to the Owner
unless and until each of the requirements set forth under " " of the Participant Handbook
and the following conditions are satisfied, or any such requirement or condition is expressly
waived by the Program Administrator:
(i) With respect to the initial disbursement:
(A) The Program Administrator shall have received a written request to
disburse the Disbursement Amount.
(B) The Owner has executed and delivered to the Program
Administrator the Contract Documents and such other declarations,
certifications, documents or instruments pertaining to the
Disbursement Amount or the Improvements as the Program
Administrator may require.
(C) The Owner will, within days of presentation by the
Program Administrator, execute any and all documents or
instruments required by the Contract Documents in connection
with the disbursement of funds to the Owner.
�1E
(D) If the Property is a commercial property, the Owner shall have
provided all applicable lenders the Notice of Proposed Contractual
Assessment set forth as Exhibit H to this Contract and received an
executed copy of the Certificate of Lender set forth as Exhibit I to
this contract. In addition, the Owner shall have received from the
Program Administrator, at the expense of the Owner, a
determination that the Improvements to be financed hereunder
(a) are within one or more classes of projects exempt from the
California Environmental Quality Act (commencing with Section
21000 et seq. of the California Public Resources Code, "CEQA")
pursuant to Sections 15301, 15302 or 15303 of the California
Public Resources Code, (b) are the appropriate subject of a
negative declaration pursuant to CEQA, in which case a negative
declaration to that effect will be adopted pursuant to Section 21080
et seq. of the California Public Resources Code and Section 15070
et seq. of the California Code of Regulations, or (c), is the
appropriate subject of an environmental impact report pursuant to
CEQA, in which case an environmental impact .report shall 'be
prepared and certified and amounts hereunder shall be disbursed
only if the Improvements are subsequently approved in accordance
with CEQA.
(ii) With respect to the second and final disbursement:
(A) The Program Administrator shall have received a copy of a
finalized permit issued by the building inspection department of
the jurisdiction within which the Property is located, if applicable.
(B) The Program Administrator shall have received a written
certification from the Owner and the contractor(s) that installed or
constructed the Improvements, if any, stating . that the
Improvements for which disbursement is requested is complete and
setting forth the actual cost of the Improvements (exclusive of any
cost attributable to labor performed by the Owner pursuant to the
terms and conditions of this Contract and the other Contract
Documents). Such certification shall be in form and substance
acceptable to the Program Administrator.
(C) If an inspection is required, an inspection of the Improvements and
a determination by the applicable agency, authority or entity that
the Improvements have been completed in full compliance with the
requirements of applicable law or that any noncompliance has been
waived.
(D) No stop payment or mechanic's lien notices pertaining to the
Improvements has been filed and remain in effect as of the date of
disbursement of the Disbursement Amount.
M
(E) [If the Property is a commercial property, the Program
Administrator shall have received a title insurance policy in form
and substance acceptable to the Program Administrator in the
Disbursement Amount and insuring the lien of the Assessment.]
(iii) With respect to each of disbursement:
(A) As of the date of disbursement of the Disbursement Amount the
representations of the Owner contained in the Contract Documents
are true and correct, and no Default (as defined in Section 13(a)
below) shall have occurred and be continuing.
(B) The Program Administrator shall have received such other
documents and instruments as the Program Administrator may
require, including but not limited to, if applicable, the sworn
statements of contractor(s) or the Owner, if construction and/or
installation is performed by the Owner in his/her capacity as a
qualified installer pursuant to the Contract Documents, and
releases or waivers of lien, all in compliance with the requirements
of applicable law.
(iv) If there shall be a single disbursement under this Assessment Contract, all
conditions under (i) through (iii) shall be satisfied by the Owner or waived by the
Program Administrator prior to disbursement.
(b) Disbursement by County. Upon satisfaction or waiver of the conditions described
in paragraph (a), above, the County will disburse funds to the Owner [as soon as practicable..]
The Owner expressly waives the 30 -day payment period provided by Section 10403 of the
Streets and Highways Code.
7. Representations and Warranties of the Owner.
For purposes of entering into this Contract, the County has relied upon the declarations,
warranties and covenants of the Owner in this Contract and in the Application, which are
incorporated into this Contract as if fully set forth herein. The Owner promises that each
representation and warranty set forth herein is true, accurate and complete as of the date of this
Contract. By accepting the disbursement, the Owner shall be deemed to have reaffirmed each
and every representation and warranty made by the Owner in this Contract and in the
Application as of the date of disbursement. If the Owner is comprised of the trustees of a trust,
the following representations shall also pertain to the trustor(s) of the trust.
(a) Formation, Authority. If the Owner is anything other than a natural person, it has
complied with all laws and regulations concerning its organization, its existence and the
transaction of its business, and is in good standing in each State in which it conducts its business.
The Owner is the owner of the Property and is authorized to execute, deliver and perform its
obligations under the Contract Documents, and all other documents and instruments delivered by
the Owner to the County in connection therewith. The Contract Documents have been duly
executed and delivered by the Owner and are valid and binding upon and enforceable against the
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Owner in accordance with their terms, and no consent or approval of any third party, which has
not been previously obtained by the Owner is required for the Owner's execution thereof or the
performance of its obligations contained therein.
(b) Compliance with Law. Neither the Owner nor the Property is in violation of, and
the terms and provisions of the Contract Documents do not conflict with, any regulation or
ordinance, any order of any court or governmental entity, or any building restrictions or
governmental requirements affecting the Owner or the Property.
(c) No Violation. The terms and provisions of the Contract Documents, the
execution and delivery of the Contract Documents by the Owner, and the performance by the
Owner of its obligations contained in the Contract, will not and do not conflict with or result in a
breach of or a default under any of the terms or provisions of any other agreement, contract,
covenant or security instrument by which the Owner or the Property is bound.
(d) Other Information. All reports, documents, instruments, information and forms of
evidence which have been delivered to the County in connection with the Owner's application
for LACEP funding are accurate, correct and sufficiently complete to give the County true and
accurate knowledge of their subject matter.
(e) Litigation. There is no litigation, tax claims, actions, proceedings, investigations
or other disputes pending or threatened against the Owner or the Property which may impair the
Owner's ability to perform its obligations hereunder, or which may impair the County's ability to
levy and collect the Assessment and the Annual Administrative Assessment.
(f) No Event of Default. There is no event which is, or with notice or lapse of time
or both would be, a Default under this Contract.
8. Covenants of the Owner.
The Owner agrees and covenants to each of the following:
(a) Installation and Maintenance of Improvements. The Owner shall, or shall cause
its contractor(s) to, promptly commence the Improvements and diligently continue to completion
in a good and workmanlike manner and in accordance with sound construction and installation
practices. The Owner shall maintain the Improvements in good condition and repair:
(b) Reports. If the Disbursement Amount is disbursed in more than one installment,
the Owner agrees, upon the request of the Program Administrator, to promptly deliver or cause
to be promptly delivered to the Program Administrator a written status report of the
Improvements, including the acquisition and installation thereof.
(c) Compliance with Law and Agreements. The Owner shall complete . all
Improvements, or cause the Improvements to be completed, in conformity with all applicable
laws, including all applicable federal, state, and local occupation, safety and health laws, rules,
regulations, standards, and recorded instruments, covenants or agreements affecting the Property.
The Owner shall comply with and keep in effect all permits, licenses, and approvals required to
complete installation of the Improvements.
WIN
(d) Completion of Work. If the Disbursement Amount is disbursed in more than one
installment, subject to any acceptable excuse for failure to complete the Improvements pursuant
to Section 13(g) hereof, the Owner shall complete the Improvements within [time
period] of the initial disbursement of the Disbursement Amount.
(e) Site Visits; Utility Records; Surveys. For purposes of examining the
workmanship of the •Improvements, observing the quality of the Improvements and otherwise
evaluating LACEP, the Owner grants the County, its agents and representatives, including
without limitation the Program Administrator, the right to enter and visit the Property at any
reasonable time, after giving reasonable notice to the Owner. For purposes of examining savings
derived from the Improvements and other satisfying the requirements relating to grant moneys
used to fund LACEP, the Owner shall also allow the County to examine and copy records and
other documents of the Owner which relate to the Improvements, including utility records of the
Owner and execute any consents, waivers or similar documents required by utility providers in
connection therewith through the term of this Contract. The Owner also agrees to participate in
any and all surveys conducted in connection with LACEP. The County is under no duty to visit
.the Property, observe any aspects of the Improvements or examine any records, and the County
shall not incur any obligation or liability by reason of not making any such visit or. examination.
Any site visit, observation or examination by the County shall be solely for the purposes of
protecting the County's rights under the Contract Documents.
(f) Protection Against Lien Claims. The Owner shall promptly pay or otherwise
discharge any claims and liens for labor done and materials and services furnished to the
Property in connection with the Improvements. The Owner shall have the right to contest in
good faith any claim or lien, provided that it does so diligently and without delay in completing
the Improvements.
(g) Notice to Successors in Interest. The Owner agrees to provide written notice to
any subsequent purchaser of the Property that the Property is subject to an LACEP assessment
lien, and to provide any subsequent purchaser a copy of this Contract.
(h) Insurance. [If the Maximum Disbursement exceeds $ ,] the Owner shall
provide, maintain and keep in force at all times until the Improvements are completed, builder's
all risk property damage insurance on the Property, with a policy limit equal to the amount of the
Maximum Disbursement.
(i) Notices. The Owner shall promptly notify the County in writing of any Default
under this Contract, or any event which, with notice or lapse of time or both, would constitute a
Default hereunder.
9. Mechanic's Lien and Stop Notices.
In the event of the filing of a stop notice or the recording of a mechanic's lien pursuant to
applicable law of the State of California and relating to the Improvements, the Program
Administrator may refuse to disburse any funds to the Owner, and, in the event the Owner fails
to furnish the Program Administrator a bond causing such notice or lien to be released within _
(__) days of notice from the Program Administrator to do so, such failure shall at the option of
KIM
the County constitute a default under the terms of this Contract. The Owner shall promptly
deliver to the Program Administrator copies of all such notices or liens.
10. Responsibilities of the Owner; Indemnification.
(a) Financing by County; No Responsibility for Improvements. The Owner
acknowledges that the County has established LACEP solely for the purpose of assisting the
owners of property in the County with the financing of the acquisition, construction, and
installation of qualifying renewable energy systems and energy and water efficiency
improvements. LACEP is a financing program only. None of the County, the Authority (if
bonds are issued by the Authority), their officials, agents, employees, attorneys and
representatives, the Program Administrator, or LACEP staff is responsible for selection,
management or supervision of the Improvements or of the Improvements' performance.
(b) Indemnification. The Owner shall indemnify, defend, protect, and hold harmless
the County, the Authority (if bonds are issued by. the Authority) and any and all officials, agents,
employees, attorneys and representatives of the County and the _Authority (collectively, the
"Indemnified Parties") and, if the Property is located in an incorporated area, such incorporated
city and any and all officials, agents, employees, attorneys and representatives of such city,(the
"City Parties"), from and against all losses, liabilities, claims, damages (including consequential
damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket
litigation costs and reasonable attorneys' fees) and any demands of any nature whatsoever
related directly or indirectly to, or arising out of or in connection with, (i) the Contract
Documents, (ii) disbursement of the Disbursement Amount, (iii) the Improvements, (iv) any
breach or Default by the Owner under the Contract Documents, (v) the levy and collection of the
Assessment and the Annual Administrative Assessment, (vi) the imposition of the lien of the
Assessment and the Annual Administrative Assessment, (vii) any breach or failure of the Owner
or its contractor(s) or agents to comply with all applicable laws, including all applicable federal,
state and local occupation, safety and health laws, rules, regulations and standards, in connection
with the acquisition, installation or completion of the Improvements, and (viii) any other fact,
circumstance or event related to the County's payment of the Disbursement Amount to the
Owner or the Owner's performance of its obligations under the Contract Documents
(collectively, the "Liabilities"), regardless of whether such Liabilities shall accrue or are
discovered before or after the Disbursement.
(c) Survival of Indemnification. The indemnity obligations described in Section 10(b)
shall survive the disbursement of funds to the Owner, the payment of the Assessment in full, the
transfer or sale of the Property by the Owner and the termination of this Contract.
11. Waiver of Claims.
For and in consideration of the County's execution and delivery of this Contract, the
Owner, for itself and for its successors -in -interest to the Property and for any one claiming by,
through, or under the Owner, hereby waives the right to recover from and fully and irrevocably
releases the Indemnified Parties and, if the Property is located in an incorporated area, the City
Parties, from any and all claims, obligations, liabilities, causes of action, or damages, including
attorneys' fees and court costs, that the Owner may now have or hereafter acquire against any of
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the Indemnified Parties and the City Parties and accruing from or related to (i) the Contract
Documents, (ii) the disbursement of any of the Disbursement Amount, including any amounts
advanced hereunder, (iii) the levy and collection of the Assessment and the Annual
Administrative Assessment, (iv) the imposition of the lien of the Assessment, (v) the issuance
and sale of any bonds or other evidences of indebtedness, or other financial arrangements entered
into by the County pursuant to LACEP, (vi) the performance of the Improvements, (vii) the
Improvements, (viii) any damage to or diminution in value of the Property that may result from
construction or installation of the Improvements, (ix) any personal injury or death that may result
from the construction or installation of the Improvements, (x) the selection of manufacturer(s),
dealer(s), supplier(s), contractor(s) and/or installer(s), and their action or inaction with respect to
the Improvements, (xi) the merchantability and fitness for any particular purpose, use or
application of the Improvements, (xii) the amount of energy savings resulting from the
Improvements, (xiii) the workmanship of any third parties, and (xiv) any other matter with
respect to LACEP. This release includes claims, obligations, liabilities, causes of action, and
damages of which the Owner is not presently aware or which the Owner does not suspect to exist
which, if known by the Owner, would materially affect the Owner's release of the Indemnified
Parties and the City Parties.
OWNER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR
WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542
("SECTION 1542"), WHICH IS SET FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH: THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."
BY INITIALING BELOW, OWNER HEREBY WAIVES THE PROVISIONS OF
SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE
SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.
Owner's Initials:
The waivers and releases by the Owner contained in this Section 11 shall survive the
disbursement of the Disbursement Amount, the payment of the Assessment in full, the transfer or
sale of the Property by the Owner, and the termination of this Contract.
12. Further Assurances.
The Owner shall execute any further documents or instruments consistent with the terms
of this Contract, including documents and instruments in recordable form, as the County shall
from time to time find necessary or appropriate to effectuate its purposes in entering into this
Contract and disbursing funds to the Owner.
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13. Events of Default.
(a) Default. Subject to the further provisions of this Section 13, the failure of any of
the Owner's representations or warranties to be correct in all material respects, or the failure or
delay by the Owner to perform any of its obligations under the terms or provisions of the
Contract Documents, shall constitute a default hereunder ("Default").
(b) Notice of Default. Upon the occurrence of a Default, prior to exercising any
remedies under the Contract Documents or the Act, the County shall give written notice of
default to the Owner. Delay in giving such notice shall not constitute a waiver of any Default.
The Owner must immediately commence to cure, correct, or remedy such failure or delay and
shall complete such cure, correction or remedy with reasonable diligence, but in any event,
within the time set forth herein.
(c) Cure Period for Monetary Default. If the Owner fails to timely pay any
installment of the Assessment or the Annual Administrative Assessment, the Owner shall have a
period of U days after notice is given pursuant to paragraph (b) above within which
to cure such default. Following such U day period, the County in its sole discretion
may exercise any and all of its available remedies, including its right to foreclose the lien of the
Assessment or the Annual Administrative Assessment pursuant to applicable law.
(d) Cure Period for Non -Monetary Default. If a non -monetary Default occurs and
such Default is reasonably capable of being cured within U days, the Owner shall
have such period to effect a cure prior to exercise of remedies by the County under the Contract
Documents or the Act. If the Default is such that it is reasonably capable of being cured but not
within such U day period and the Owner (i) initiates corrective action within such
(__) day period, and (ii) diligently, continually, and in good faith works to effect a cure
as soon as possible, then the County in its sole discretion may elect to grant the Owner such
additional time as is reasonably necessary to cure the Default prior to exercise of any remedies
by the County. The foregoing notwithstanding, in no event shall the County be precluded from
exercising any of its remedies if the Default is reasonably expected to result in the foreclosure or
forfeiture of the Property, or if the Default is not cured within days after the first
notice of Default is given.
(e) Remedies Upon Default. Subject to the provisions of paragraphs (b), (c) and (d)
above, if any Default occurs the County may exercise any or all of the rights and remedies
available to it under applicable law, at equity, or as otherwise provided herein. If no
disbursement has occurred hereunder, the County may elect to terminate this Contract and,
except as otherwise expressly provided herein, the .parties have no further obligations or rights
hereunder. If the Disbursement Amount has been disbursed in whole or in part, the County may
terminate its obligations to make any further disbursement of the Disbursement Amount and
exercise any or all of the rights and remedies available to it under this Contract and applicable
law. As a cumulative remedy, if any installment of the Assessment and the Annual
Administrative Assessment, together with any penalties, costs, fees, and other charges, accruing
under applicable taxation provisions are not paid when due, the Board of Supervisors or its
designee may order that the same be collected by an action brought in a court of competent
jurisdiction to foreclose the lien of the Assessment and the Annual Administrative Assessment to
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the extent permitted, and in the manner provided by, applicable law. Any and all costs and
expenses incurred by the County in pursuing its remedies hereunder shall be additional
indebtedness of the Owner to the County.
(f) Remedies Cumulative. Except as otherwise expressly stated in this Contract or as
otherwise provided by applicable law, the rights and remedies of the County are cumulative, and
the exercise of one or more of such rights or remedies shall not preclude the exercise by the
County, at the same time or different times, of any other rights or remedies for the same Default
or any other Default. No failure or delay by the .County in asserting any of its rights and
remedies as to any Default shall operate as a waiver of any Default or of any such rights or
remedies, or deprive the County of its rights to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or remedies.
(g) Force Majeure. Performance of the covenants and conditions imposed upon the
Owner hereunder with respect to the commencement and completion of the Improvements shall
be excused while and to the extent that, the Owner, through no fault or negligence of its own, is
prevented from complying therewith by war, riots, strikes, lockouts, action of the elements,
accidents, or acts of God beyond the reasonable control of the Owner; provided, however, that as
soon as the cause or event preventing compliance is removed or ceases to exist the obligations
shall be restored to full force and effect and the Owner shall immediately resume installation of
the Improvements.
14. Severability.
Each and every provision of this Contract is, and shall be construed to be, a separate and
independent covenant and agreement. If any term or provision of this Contract or the application
thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Contract,
or the application of such term or provision to circumstances other than those to which it is
invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Contract shall, be valid and shall be enforced to the extent permitted by law.
15. Notices.
All notices and demands shall be given in writing by first class mail, postage prepaid, or
by personal delivery (by recognized courier service). Notices shall be considered given upon the
earlier of.(a) personal delivery or (b) _ (__) business days following deposit in the United States
mail, postage prepaid. Notices shall be addressed as provided below for the respective party;
provided that if any party gives notice in writing of a change of name or address, notices to such
party shall thereafter be given as demanded in that notice:
To the County:
To the Owner:
Attention: Program Administrator
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Attention:
Notwithstanding anything set forth above, after disbursement of funds to the Owner, all
notices regarding the assessment shall be sent only as provided by the laws of the State of
California.
16. No Waiver.
No disbursement of the Disbursement Amount based upon inadequate or incorrect
information shall constitute a waiver of the right of the County to receive a refund thereof from
the Owner. No disbursement of any portion of the Disbursement Amount shall constitute a
waiver of any conditions to the County's obligation to make further disbursements. No waiver
by the County of any failure by the Owner to comply with any provision of this Contract shall in
any way preclude the County from thereafter declaring such failure by the Owner a Default
hereunder or be deemed a waiver of any other or subsequent Default.
17. Governing Law.
This Contract shall be construed and governed in accordance with the laws of the State of
California.
18. Assignment by the Countv.
The County, at its option, may (i) assign any or all of its rights and obligations under this
Contract, and (ii) pledge and assign its right to receive the Assessment and the Annual
Administrative Assessment, and any other payments due to the County hereunder, without
obtaining the consent of the Owner.
19. Assignment by Owner Prohibited.
The Owner may sell, transfer, rent or otherwise dispose of all or a portion of its interests
in the Property so long as the Assessment and the Annual Administrative Assessment, including
each installment thereof and the interest and penalties thereon, shall constitute a lien against the
Property until the same is paid in full. All other dispositions of all or a portion of the Owner's
rights and obligations under this Contract are subject to the prior express written consent of the
County, which consent may be granted or withheld in the sole and absolute discretion of the
County.
20. Carbon Credits.
The Owner agrees that any carbon credits attributable to the Improvements shall be held
on behalf of LACEP by the County.
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21. Entire Agreement; Amendment.
This Contract, together with the other Contract Documents, is the entire agreement
between the parties. Any other agreement related to the Improvements, and any amendment to
this Contract, must be signed in writing by both parties.
22. Natural Persons.
If the Owner of the Property consists of more than one natural person, the obligations
hereunder of all the owners shall be joint and several.
23. Counterparts.
This Contract may be executed in several counterparts, each of which shall be deemed an
original, and all of such counterparts together shall constitute one and the same instrument.
24. Special Termination.
Notwithstanding anything to the contrary contained herein, this Contract shall terminate
and be of no further force or effect if the Owner has submitted to the Program Administrator a
notice of its decision to cancel this transaction in the form of the Notice of Cancellation attached
as Exhibit J hereto, which notice shall be delivered to the County pursuant to Section 15 hereof
no less than (J days prior to the disbursement of the Disbursement Amount.
25. No Third Party Beneficiary Rights.
This Contract is entered into for the sole benefit of the Owner and the County and,
subject to the provisions of Sections 10, 11, 12 and 19, no other parties are intended to be direct
or incidental beneficiaries of this Contract and no third party shall have any right in, under or to
this Contract.
IN WITNESS WHEREOF, the Owner and the County have entered into this Contract as
of the date and year first above written.
THE OWNER: THE COUNTY:
COUNTY OF LOS ANGELES, CALIFORNIA
Date of Execution by the Owner: Name:
20
Title:
-15-
ACKNOWLEDGEMENTS)
STATE OF CALIFORNIA
ss.:
COUNTY OF
On , before me,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
STATE OF CALIFORNIA
ss.:
COUNTY OF
(This area for official notarial seal)
On , before me,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
EXHIBIT A
PARTICIPANT HANDBOOK
[To Come]
EXHIBIT B
CERTAIN FINANCING TERMS
Maximum Disbursement Amount:
Contract Term:
Maximum Interest Rate: Percent (_%) per annum.
Financing Costs in the Event of Noncompletion:
Annual Administrative Assessment('):
Prepayment Premium: From to , a prepayment premium of _ percent%)
From to , a prepayment premium of _ percent%)
After , a prepayment premium of _ percent (_%)
Improvements:
Estimated Payment Schedule:
Assessment Maximum
Annual
Disbursement Financing Administrative
Year (2) Amount (3) Costs (4) Interest Assessment(5) Total
Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
c2) If funds are disbursed to the Owner before the assessment will appear on the property tax bill for the
same tax year. If funds are disbursed after the assessment will appear on the property tax bill for the
following tax year.
(3) Based on Maximum Disbursement. Subject to revision by the Program Administrator following the
disbursement of the Disbursement Amount, if necessary, pursuant to the Contract to reflect the Disbursement
Amount.
(4) Includes capitalized LACEP administrative expenses.
(5) Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
EXHIBIT C
DESCRIPTION OF THE PROPERTY
C-1
EXHIBIT D
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE OF INTEREST AND PAYMENT SCHEDULE
Owner:
Address:
Assessor's Parcel Number:
LACEP Loan Number:
(the "Owner")
the "Property")
Pursuant to Section l (b)(ii) of that certain Assessment Contract (the "Assessment
Contract") executed by and between you, as Owner of the Property, and the County in
connection with the Los Angeles County Energy Program, you are hereby notified that the
interest rate applicable to the unpaid Assessment (as defined in the Assessment Contract) is
%. The schedule of Assessment Installments, interest thereon and the Maximum Annual
Administrative Assessment with respect to the referenced property is set forth below:
Assessment
Disbursement Financing
YearM Amount Costs (2) Interest
Maximum
Annual
Administrative
Assessment (3) Total
If funds are disbursed to the Owner before , the assessment will appear on the property tax bill for
the same tax year. If funds are disbursed the assessment will appear on the property tax bill for the
following tax year.
(Z) Includes capitalized LACEP administrative expenses.
(3) Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
The Notice of Assessment of record with the Office of the Registrar-Recorder/County
Clerk of the County of Los Angeles will be amended to reflect the foregoing payment schedule.
Program Administrator,
Los Angeles County Energy Program
D-1
EXHIBIT E
NOTICE OF ASSESSMENT
WHEN RECORDED RETURN TO
County of Los Angeles
Treasurer and Tax Collector
Kenneth Hahn Hall of Administration
500 West Temple Street, Room 437
Los Angeles, California 90012
Attention: Los Angeles County Energy Program
— Program Administrator
NOTICE OF ASSESSMENT
Pursuant to the requirements of Section 5898.32 of the Streets and Highways Code of the State
of California, the undersigned Clerk of the Board of Supervisors (the "Board of Supervisors") of
the County of Los Angeles, a political subdivision of the State of California (the "County"),
hereby gives notice that contractual assessments relating to that certain real property described in
Appendix A hereto (the "Property"), in the amounts set forth in Appendix B hereto, were
recorded in the Office of the Registrar-Recorder/County Clerk of the County, as provided for in
said Section 5898.32.
Pursuant to that certain Assessment Contract (the "Assessment Contract") by and between the
County and the owner of the Property named herein in connection with the Los Angeles County
Energy Program, the several assessments assessed on the Property set forth in Appendix B hereto
became a lien upon the Property and the Property became subject to the assessment in
accordance pursuant to the Assessment Contract, the Act and applicable law upon the execution
of such Assessment Contract.
In addition to the assessment to pay the costs and expenses of the improvements to be acquired,
the Property is subject to a separate and additional assessment, as set forth in Appendix B hereto,
to be levied annually to pay for costs not otherwise reimbursed which will result from the
administration and collection of assessments or from the administration or registration of any
associated bonds and reserve or related funds.
Reference is made to the Assessment Contract for the amount of any final and adjusted
assessments, including any annual assessment as levied for administrative costs or maintenance,
as applicable.
E-1
Included in Appendix A hereto is the name(s) of the owner of record of the Property, which is
also the assessed owner of the Property as it appears on the latest secured assessment roll, all as
required pursuant to Section 27288.1 of the Government Code of the State of California.
Dated:
Clerk of the Board of Supervisors of the
County of Los Angeles
Deputy
E-2
Appendix A to Notice of Assessment
DESCRIPTION OF THE PROPERTY
E-3
Name(s) of Owner of the Property:
Assessment Amount:
Annual Administrative Assessment Amount:
E-4
Appendix B to the Notice of Assessment
EXHIBIT F
Payment of Contractual Assessment Required
Pursuant to the requirements of Section 5898.24(d) of the Streets and Highways Code of
the State of California, the Board of Supervisors (the "Board of Supervisors") of the County of
Los Angeles, a political subdivision of the State of California (the "County"), hereby gives
notice that the real property described in Appendix A hereto (the "Property") is subject to a
contractual assessment that is required to be paid in accordance with that certain Assessment
Contract (the "Assessment Contract") by and between the owner of the Property and the County
in connection with the Los Angeles County Energy Program. Certain information regarding the
contractual assessment assessed on the Property is set forth below.
(1) The names of all current owners. of the real property subject to the contractual
assessment:
(2) Legal description of the Property: See Exhibit Appendix A attached hereto and
incorporated herein by this reference.
(3) Assessor's parcel number for the Property:
(4) The annual amount of the contractual assessment:
(5) The contractual assessment referenced (4) above expires on the date such contractual
assessment and any applicable penalties, costs, fees, and charges, including the Annual
Administrative Assessment (as defined in the Assessment Contract), have been paid in
full.
(6) Funds from the contractual assessment were used to finance the acquisition and
construction on and installation in the Property of certain qualifying renewable energy
systems and energy and water efficiency improvements, as further described in the .
Assessment Contract.
(7) Funds from the contractual assessment should be paid to the following:
[Name of entity to which contractual assessments should be paid]
[Address of entity]
[Contact person]2
2 Section 5898.24(d)(2)(E) of the Act requires the document to include "the entity to which funds from the
contractual assessment will be paid and specific contact information for that entity".
F-1
Date:
Treasurer and Tax Collector of the
County of Los Angeles [or Entity to which
Contractual Assessments will be paid]
By:_
Name:
Title:
3 Section 5898.24(d)(2)(F) of the Act requires the document to include "the signature of the authorized
representative of the legislative body to which funds from the -contractual assessment will be paid."
F-2
Appendix A to Notice of Payment of Contractual Assessment Required
DESCRIPTION OF THE PROPERTY
F-3
e
EXHIBIT G
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE TO PROCEED
Date:
Owner:
Address:
Assessor's Parcel Number:
LACEP Loan Number:
(the "Owner")
(the "Property")
Pursuant to Section 4(a) of that certain Assessment Contract (the "Assessment Contract")
executed by and between you, as Owner of the Property, and the County in connection with the
Los Angeles County Energy Program, you are hereby given notice to proceed (this "Notice to
Proceed") with acquisition, construction and installation of the Improvements and, upon
completion of the Improvements, submit a request for funding to LACEP. This Notice to
Proceed constitutes consent and authorization pursuant to Section 5898.21 of the Act for the
Owner to purchase directly the related equipment and materials for the Improvements and to
contract directly for the construction on and/or installation in the Property of the Improvements.
The Owner must complete installation of the Improvements no later than days after the date
of this Notice to Proceed, provided that the Owner and the Program Administrator may agree to
an extension of this completion date for good cause shown pursuant to Section 4(b) and Section
13(g) of the Assessment Contract, but in no event shall the completion date be more than one
year from the date of this Notice to Proceed. Disbursement of any amounts pursuant to the
Assessment Contract is subject to satisfaction of the terms and conditions thereof.
Program Administrator,
Los Angeles County Energy Program
G-1
EXHIBIT H
NOTICE OF PROPOSED CONTRACTUAL ASSESSMENT
(Commercial Property Owner)
Notice Date:
Lender Address:
Property/Loan Information:
Owner:
Address:
APN:
Loan Number(s):.
To Whom It May Concern:
The undersigned (the "Owner") is the owner of a certain real property located at the
above -referenced address (the "Pro e "). You are the lender (the "Lender") with respect to the
above -referenced (the "Loan") that is secured by a lien on the Property.
The Owner is sending this Notice of Proposed Contractual Assessment to Lender to
(i) provide notice of the Owner's proposed participation in the Los Angeles County Energy
Program ("LACEP"), (ii) request confirmation from the Lender that the levy of the contractual
assessment pursuant to the herein described Assessment Contract will not trigger an event of
default or the exercise of any remedies under the Loan documents, and (iii) provide notice that
the contractual assessment (including any penalties and interest) will be secured by a statutory
lien on the Property that is senior to the lien securing the Loan.
Background. The County of Los Angeles, a political subdivision of the State of
California (the "County") has established LACEP to help finance the acquisition and
construction on and installation in the assessed properties, including the Property, of certain
qualifying renewable energy systems and energy and water efficiency improvements (the
"Improvements") pursuant to Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code
of the State of California ("Contractual Assessment Law").
In accordance with Contractual Assessment Law, the County will levy a contractual
assessment to finance the installation of the Improvements on certain property with the
agreement of the applicable property owner pursuant to the terms of an assessment contract (the
"Assessment Contract") between such property owner and the County. Pursuant to Section
5898.30 of Contractual Assessment Law, the contractual assessment (including any penalties and
interest) is collected on the property tax bill and is secured by a lien on the applicable property
H-1
that is (i) senior to all private liens, including private liens that existed prior to levy of the
contractual assessment and (ii) cannot be subordinated to the private liens.
Information regarding the purpose and method of administration of the assessments under
LACEP can be found at [website].
Participation in LACEP. The Owner has applied to participate in LACEP and intends to
finance installation on the Property of the Improvements set forth on Exhibit A hereto. The
contractual assessment to be levied on the Property (the "Contractual Assessment") pursuant to
the Assessment Contract and the related payment terms are proposed to consist of the following:
Principal amount: $_
Estimated interest rate:
Term of repayment period:
Annual administrative component:
Total estimated annual installment
Lender Approval. Please acknowledge that participation of the Property in LACEP is
acceptable to the Lender by executing the attached Certificate of Lender and returning it to the
undersigned at your earliest convenience.
Very truly yours,
BY:
(Signature)
OWNER
NAME:
MAILING ADDRESS (if different than
Property address):
H-2
EXHIBIT I
CERTIFICATE OF LENDER
(Commercial Property Owner)
Property/Loan Information
Owner:
Address:
APN:
Loan:
In connection with the above -referenced loan (the "Loan") relating to the above -
referenced property (the "Property") by the herein referenced lender (the "Lender"), the
undersigned hereby certifies, acknowledges, confirms and agrees as follows:
(1) He/she is duly authorized to execute this Certificate on behalf of the Lender.
(2) The Lender is in receipt of written notice (the "Notice") from the owner of the
Property (the "Owner") that Owner intends to finance installation on the Property
of certain renewable energy, energy efficiency and/or water efficiency
improvements that will be permanently fixed to the Property (the
"Improvements") by participating in the Los Angeles County Energy Program
sponsored by the County of Los Angeles, a political subdivision of the State of
California (the "County").
(3) As a result of an Assessment Contract between the County and the Owner (the
"Assessment Contract") and pursuant to Chapter 29 of Part 3 of Division 7 of the
Streets and Highways Code of the State of California, the Contractual Assessment
described in the Notice will be levied on the Property and the Contractual
Assessment (including any penalties and interest) will be secured by a statutory
lien that is senior to the lien securing the Loan.
(4) The Lender consents to the levy of the Contractual Assessment pursuant to the
Assessment Contract.
(5) The Lender agrees that the levy of the Contractual Assessment will not constitute
an event of default or the exercise of any remedies under the documents relating
to the Loan.
I-1
The Lender further acknowledges that the Owner and the County will rely on this
Certificate in connection with the disposition and administration of the Assessment Contract and
the Los Angeles County Energy Program.
[LENDER]
Name:
Title:
Date:
I-2
EXHIBIT J
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE OF CANCELLATION
[and ] are the owner[s] of record
([collectively,] the "Owner") of that certain real property located at
located in the County of Los Angeles, California. The
Owner previously executed that certain Assessment Contract (the "Assessment Contract") with
the County of Los Angeles (the "County") in connection with the Los Angeles County Energy
Program ("LACEP"). Pursuant to the Assessment Contract, Owner hereby notifies the LACEP
Program Administrator in accordance with Sections 15 and 24 of the Assessment Contract no
less than (_) days prior to the disbursement of the Disbursement Amount that the
Owner has determined to cancel the transaction described in the Assessment Contract.
Accordingly, the Contract shall terminate and be of no further force or effect, except that the
Owner agrees to pay amounts due, if any, pursuant to Section 1(b)(iv) of the Assessment
Contract relating to financing costs in the event of the improvements are not completed.
Dated:
[OWNER]
By:
Name:
By:
Name:
J-1
County of Los Angeles
CHIEF EXECUTIVE OFFICE
Kenneth Hatm Hai of ,Administration
500 Wes'. Temple Street. Roan 713, Los Anr_,eies, California 90012
(213) 874-1101
http:lrceo.lacounty. gov
WILLIAM T FUJIOKA
Board of SURervisurs
Chief Executive Officer
GLORIA MOLINA
First District
MARK AIDLi.Y-THOMAS
Second District
May 25, 2010
zev YAROSLAVSKY
Tnird District
DON KNASF
The Honorable Board of Supervisors
Founh Distnct
County of Los Angeles
MICHAEL D. ANTONOviCH
383 Kenneth Hahn Hall of Administration
Filfn Dlstruv
500 West Temple Street
Los Angeles, CA 80012
The Honorable Board of Directors
Los Angeles County Public Works Financing Authority
363 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, CA 90012
Dear Board Members:
PUBLIC HEARING TO ESTABLISH THE
LOS ANGELES COUNTY ENERGY PROGRAM
(ALL DISTRICTS) (3 VOTES)
SUBJECT
On April 6, 2010, your Board adopted a resolution of intention (the Resolution of intention) to
implement the Los Angeles County Energy Program (LACEP or Program) to provide financing
to qualified property owners within the County for the installation of distributed generation
renewable energy projects and energy and water efficiency improvements to their respective
properties. Pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (the Act), your Board also set a public hearing date of May 25, 204, 0, to formally
approve the Program and to provide an opportunity for public comment. The adoption of the
enclosed resolutions will establish LACEP within the boundaries of the County and authorize a
program of bond financing for loans made in connection with LACEP. Following the conclusion
of the public hearing, incorporated cities within the County will have the opportunity to join
LACEP through the adoption of a resolution by their respective city councils. The financing plan
being presented to your Board is predicated on the issuance of bonds secured by contractual
assessment revenues (Assessment Bonds) and will be validated in the Superior Court of Los
Angeles County.
IT IS RECOMMENDED THAT YOUR BOARD:
As contemplated in the attached County Resolution Authorizing the Establishment of the
Los Angeles County Energy Program, and Indenture (attachment 1):
Please Conserve Paper- This Document and Copies are Two -Sided
Intra -County Correspondence Sent Electronically Only
Honorable Board of Supervisors
May 25, 2010
Page 2
Confirm the program report (attachment 2) prepared by the Internal Services
Department (ISD) in accordance with Section 5898.22 of the Act and approve the
formation of the contractual assessment program in connection with LACEP;
2. Direct the establishment and implementation of LACEP as provided for in the
program report and in accordance with the applicable law; and
3. Appoint and designate the Director of ISD (the Program Administrator) to enter into
contractual assessments with property owners on behalf of the County.
As contemplated in the attached County Resolution Authorizing Certain Actions in Connection
with the Issuance and Sale of Assessment Bonds, and indenture (attachment 3):
1. Establish a special fund to be held in trust by the County (the "Energy Funfl to be
used for the purpose of administering LACEP;
2. Approve the issuance of the Assessment Bonds for the purpose of funding LACEP
and authorize the execution and delivery of various financing documents in
substantially the form presented to your Board at this public hearing; and
3. Authorize the Chief Executive Officer (CEO) and the Treasurer and Tax Collector
(Treasurer), or their designees, in consultation with County Counsel and with the
assistance of bond counsel, to prepare and cause to be filed and prosecuted to
completion all proceedings required for judicial validation of the contractual
assessments and LACEP financing instruments.
IT IS RECOMMENDED THAT YOUR BOARD, ACTING AS THE BOARD OF DIRECTORS OF
THE LOS ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY:
As contemplated in the attached Los Angeles County Public Works Financing Authority
(Authority) Resolution Authorizing Certain Actions in Connection with the Issuance and Sale of
Assessment Bonds, and Indenture (attachment 4):
Approve the issuance of the Assessment Bonds for the purpose of funding LACEP
and authorize the execution and delivery of various financing documents in
substantially the form presented to your Board at this public hearing; and
2. Authorize the CEO and Treasurer, or their designees, in consultation with County
Counsel and with the assistance of bond counsel, to prepare and cause to be filed
and prosecuted to completion all proceedings required for judicial validation of the
contractual assessments and LACEP financing instruments.
PURPOSEMUSTIFICATION OF RECOMMENDED ACTION
The public hearing with respect to LACEP is being held to allow interested persons the
opportunity to comment upon, object to, or present evidence with regard to the proposed
contractual assessment program. The public hearing is required pursuant to the Act and will
serve to formally establish the Program within the boundaries of the County. Following
Honorable Board of Supervisors
May 25, 2010
Page 3
completion of the public hearing, the County will pursue judicial action to validate the priority
status of the contractual assessment lien and to establish a program of bond financing to
provide funding for loans made in connection with LACEP.
As referenced in prior correspondence to your Board, LACEP is being formed in accordance
with California Assembly Bill 811 (AB 811), which was approved by the State Legislature and
signed by the Governor on July 21, 2008. LACEP is intended to help property owners make
capital investments in distributed generation renewable energy sources and energy efficiency
and water efficiency improvements (collectively, the Improvements) that wilt provide long-term
efficiencies and reduced energy bills. The Program will provide a financing mechanism for
these 'improvements through an assessment contract between the County and the property
owner, pursuant to which the County will disburse a specified amount of funding in the form of a
loan to the property owner. The property owner will repay this loan through contractual
assessments to be included on the annual property tax bill. if the owner sells the subject
property prior to full repayment of the loan, the obligation remains a lien on the subject property
and transfers to the new property owner. The County intends to finance the Program by issuing
(or causing to be issued) bonds payable from contractual assessment revenues. Participation
in the Program is completely voluntary and property taxes for non -participating property owners
will not be affected by the County's implementation of LACEP. in addition, the Improvements
will not generally be subject to reappraisal by the County Assessor unless they are included as
part of a major remodeling or renovation that results in a structure substantially equivalent to
new construction.'
In, connection with your Board's adoption of the Resolution of Intention, on April 6, 2010, ISD
was directed to prepare a report (Report) detailing certain items in relation to LACEP, as
required by Section 5898.22 of the Act. This Report has been filed with the Executive Office of
your Board and is included as part of the public hearing. In the Report, the Program
Administrator provides the following information regarding LACEP:
• A description of the territory wherein contractual assessments will be made available
and a process for cities to join LACEP;
• identification of the types of facilities, distributed generation renewable energy sources,
or energy or water efficiency improvements that may be financed through the use of
contractual assessments;
A financing plan for raising capital and funding installation of the Improvements: and
• A draft assessment contract specifying the terms and conditions that will be applicable to
the property owner and the County.
In addition to the above information, the Report also provides a summary of the benefits to be
recognized following the implementation of LACEP. By the end of 2012, LACEP seeks to
achieve energy retrofits for 15,000 single-family homes in unincorporated areas of the County,
with the potential to add $150 million to the local economy. LACEP also intends to create an
estimated 1,600 home energy retrofit jobs and as many as 1,000 ancillary jobs in fields such as
' An exception is the construction or addition of a qualified solar energy system, which is specifically
excluded from reassessment under Section 73 of the California Revenue and Taxation Code.
Honorable Board of Supervisors
May 25, 2010
Page a
workforce development, local manufacturing, product distribution, and research and
development. These improvements to the local economy are in addition to the environmental
objectives associated with LACEP and the goal of reducing the County's annual greenhouse
gas emissions (attributable to its existing housing stock) by 20,000 tons of carbon dioxide
annually. The benefits to both the economy and the environment are expected to increase
dramatically once individual cities join LACEP, as the above forecasts were quantified solely for
unincorporated areas of the County.
The program design elements of LACEP are being managed by ISD and a consultant team
(Project Team) that has been engaged to assist with the development of the Program. This
process is near completion and will establish the criteria for eligible projects and properties, the
available rebates and incentives, and the processes for approving and funding the
Improvements. The details of the program design phase are currently being presented to
various stakeholders (County staff, cities, utilities, contractors, regulatory bodies) for comment
and review. The Project Team is also preparing a Program Administration Plan that will include
tools for administering, tracking and reporting all necessary data concerning projects, loans, and
program benefits. This effort will include a number of activities, such as coordination with
stakeholders involved with building efficiency and renewable resource retrofit programs,
development and implementation of a marketing and outreach strategy, and implementation of
Environmental Service Centers (ESCs). The ESCs will make use of electronic media,
community events and strategically located venues to promote environmental programs and
LACEP. To assist the public and other stakeholders in becoming acquainted with LACEP, a
manned, toll-free number has been established and a website has been activated to provide
Program information and updates.
Following your Board's adoption of LACEP on May 25, 2010, major elements of the program
implementation phase will begin. By July 2010, a "toolkit" of information will be made available
for cities to assist them in joining the Program and promoting it within their jurisdictions. Also by
July, the ESCs will be provided with program materials and a deployment plan will be
implemented. The goal is to formally launch LACEP in September 2010 (following the
conclusion of the judicial validation) and secure participation from a majority of the 88 cities in
the County. While the initial implementation phase will be limited to residential properties, a
commercial program is also being developed in accordance with AB 811. Additional details
regarding the implementation of the residential program, and the future design of a commercial
platform, will be provided to your Board in bi-monthly reports submitted by ISD.
IMPLEMENTATION OF STRATEGIC PLAN GOALS
By providing financing that may not otherwise be readily available to property owners, the
County is promoting energy and water conservation, and the reduction of greenhouse gas
emissions, which supports the County Strategic Plan Goal 1, Operational Effectiveness. This
action also supports the County Strategic Plan Goal 3, Community and Municipal Services, by
providing property owners a means to finance improvements that will result in utility cost -
savings and improve their quality of life.
Honorable Board of Supervisors
May 25, 2010
Page 5
FISCAL IMPACTIFINANCING
Grant Funding
In October 2009, your Board accepted the County's allocation of $15.4 million in Energy
Efficiency and Conservation Block Grant (EECBG) funding received under the American
Recovery and Reinvestment Act. The County has identified approximately $12.2 million of this
EECBG funding to support the implementation of its AB 811 program and related activities,
including ESCs, public information and outreach.
In November 2009, ISD, in collaboration with the Association of Bay Area Governments, the
Sacramento Municipal Utility District, and the San Diego -based California Center for
Sustainable Energy, submitted a single, statewide application to the United States Department
of Energy (DOE) Federal Competitive EECBG grant program for up to S75 million in funding. In
April 2010, ISD was notified that its proposal was awarded a total of $30 million. Given that this
grant award represents 40% of the amount requested, and that the grant is to be shared with
the other regional partners. the County's share will be approximately $14 million. This grant
funding, per DOE requirements, will support development and implementation of model,
regional programs that demonstrate greater participation in existing building retrofits and greater
energy efficiency savings. ISD has submitted correspondence requesting your Board's
acceptance of this grant.
ISD has also negotiated with the California Energy Commission (CEC) to obtain additional
funding support for LACEP. In prior communications to your Board, it was reported that
representatives from ISD and the CEO met with CEC Commissioners and staff in early
March, 2010 to discuss the County's unsuccessful grant application. Following this meeting, the
CEC expressed a desire to assist the County and provide funding for its AB 811 program. The
CEC has agreed to provide the County with approximately S8 million to help implement LACEP
within those cities that choose to participate in the Program. When the final terms and
conditions of this agreement have been negotiated, ISD will prepare separate correspondence
to seek your Board's acceptance of funding from the CEC.
Bond Financing
The County intends to finance the loans to participating property owners through a public sale of
the Assessment Bonds. Pursuant to the Improvement Bond Act of 1915 and Division 10 of the
California Streets and Highways Code, local governments are authorized to issue bonds
secured by the voluntary contractual assessments of property owners within their jurisdictions.
Proceeds from the sale of the Assessment Bonds will be used for the purpose of funding loans
to property owners who have been approved for participation in LACEP. Because the
Improvements are being installed on private property, however, LACEP does not currently have
the ability to issue the Assessment Bonds on a tax-exempt basis. The legal requirement to
issue taxable bonds will significantly increase the interest cost of borrowing to LACEP and could
result in interest rates that are about 35'�o higher than those associated with comparable bonds
sold on a tax-exempt basis. It is important to note that neither the County's credit nor its credit
ratings will in any way support or guarantee the Assessment Bonds issued in connection with
LACEP.
Honorable Board of Supervisors
May 25, 2010
Page 6
It is anticipated that LACEP will need to accumulate a certain number of approved loans before
it is able to enter the public capital markets and sell bonds. This is due both to the liquidity
requirements of municipal bond investors and the positive efficiencies derived from a larger
bond financing. Given its experience with prior assessment districts, the Treasurer forecasts
that a successful bond sale will require a minimum of $10 million of loans (e.g., 1,000 loans at
an average value of $10,000 each). Prior to achieving the necessary loan volume, LACEP will
pursue a number of interim financing options, including loans from large commercial banks and
the private placement of securities with qualified institutional investors. In every instance, the
interim financing will be secured by the contractual assessments and will be structured to allow
for a "take-out" financing that involves the public sale of Assessment Bonds.
The adoption of the attached resolutions will authorize an initial issuance of the Assessment
Bonds in an aggregate principal amount of not to exceed $100 million. it is anticipated that the
first public issuance of bonds will be considerably less than $100 million given that LACEP may
achieve economies of scale at levels as low as $10 million. The final maturity of the
Assessment Bonds will be limited to the estimated useful life of the Improvements, and on
average, is expected to be 15 - 20 years. The interest rate on the Assessment Bonds will be
determined by conditions in the taxable bond market at the time of the sale. As referenced
earlier, the taxable status of the Assessment Bonds will have a significant impact on borrowing
costs and will cause these bonds to be issued at interest rates above traditional tax-exempt
municipal bond rates. In the current market, it is estimated that the interest rate on taxable
assessment bonds will be within a range of 7.0% to 7.5%.
The interest rate obtained on the Assessment Bonds will be the single greatest factor in
determining the borrowing cost for individual property owners who choose to participate in
LACEP. in addition to funding debt service payments on the Assessment Bonds, contractual
assessment revenue will also be used to finance a bond reserve fund, pay costs of issuance on
the bonds, and fund certain administrative costs of the Program. It is anticipated that
participants in LACEP will assume an ail -in borrowing cost on their assessments that is
approximately 200 basis points (2.0%) higher than the yield on the Assessment Bonds. To the
extent that your Board takes action to appropriate additional grant funding for the purposes of
LACEP, this "spread" of 200 basis points may be narrowed and the borrowing cost to
participants reduced below the current estimate of 9.0% to 9.5%. The ability to lower participant
borrowing costs is significant given that average interest rates for home equity loans in
Los Angeles County were approximately 8.75% as of May 1, 2010.
The goal of providing competitive loan rates to participating property owners is one of the most
important near-term objectives of LACEP. Certain factors that will help to reduce this borrowing
cost include potential changes to Federal and State legislation, nationwide expansion of green
energy financing programs, and the development of underwriting criteria that will minimize the
risk of loan default. With respect to this latter category, the Treasurer will pursue underwriting
criteria, largely dictated by the bond market, to help ensure that only creditworthy individuals are
approved for loans under LACEP. Certain minimum requirements that LACEP is considering
are as follows:
• Property taxes and assessments are current on the property and have not been
delinquent for a period of 5 years (or since the date of the most recent transfer if less
than 5 years);
Honorable Board of Supervisors
May 25, 2010
Page 7
• Property owner is current on mortgage, has not defaulted on the deed(s) of trust, and
can legally enter into the Program;
• Improvement costs are reasonable to property value and must meet a value -to -lien ratio
of 10:1 or greater: and
• Property must meet a positive equity test and not exceed a maximum loan -to -value
ratio.'
Of the four underwriting criteria listed above, the one that is likely to have the greatest influence
on bond yields is the positive equity test. Investors are highly sensitive to loan -to -value ratios
and may be reluctant to purchase assessment bonds that allow for loan -to -value ratios that
exceed 80°x. The ability to structure a contractual assessment program with strict underwriting
criteria will significantly help to reduce borrowing costs to participating property owners. It will
also serve to limit the number of property tax delinquencies and help mitigate the need to initiate
foreclosure proceedings.
Foreclosure Policies
In connection with the issuance of the Assessment Bonds, the County will be required to
provide a judicial foreclosure covenant that applies to all delinquent LACEP assessments. The
ability to initiate foreclosure proceedings in the interest of bondholders has been an integral
credit feature for assessment district and community facilities district (Mello -Roos) financings in
California for more than two decades. The County has completed twenty-three (23) such
financings over this period and has always included a foreclosure covenant in its commitment to
bondholders. The ability to sell assessment bonds without a specific foreclosure covenant is
highly uncertain in today's market, and even if feasible, would result in much higher borrowing
casts for a program such as LACED.
It is therefore expected that the County will retain the right, but not necessarily the obligation, to
initiate judicial foreclosure as soon as a property owner becomes delinquent on the annual
assessment associated with LACEP (a property tax bill is deemed to be delinquent if any portion
of the amount due remains unpaid as of June 30th). While the County will have the ability to
commence foreclosure proceedings immediately following any delinquency, the requirement to
do so will only take effect if there is a corresponding impact to the security provisions of the
Assessment Bonds. Specifically, the County will be obligated to pursue judicial foreclosure
whenever the reserve fund established for the Assessment Bonds (the Reserve Fund) is
reduced to a level below its initial funding requirement. The Reserve Fund is designed to
function as a source of repayment to bondholders in the event that delinquencies prevent
assessment revenue from satisfying the principal and interest obligations on the Assessment
Bonds.
The incorporation of a reserve fund test in the foreclosure covenant is significant in that it can
serve to reduce the need to pursue judicial foreclosure proceedings. The Reserve Fund is
typically maintained at levels in excess of its initial requirement due to interest earnings that
2 The loan -to -value ratio is defined as the aggregate total of all liens secured by real estate mortgages
divided by either the assessed value of the property or the market value as determined by a third -party
appraisal.
Honorable Board of Supervisors
May 25, 2010
Page 8
have accumulated during the tax year. These interest earnings can be used to offset any
reduction in assessment revenue that might result in a draw on the Reserve Fund.
Furthermore, LACEP will have the ability to supplement the Reserve Fund from other funding
sources should this be necessary in order to avoid a foreclosure judgment. For example,
LACEP could choose to defer certain administrative costs and use these monies as an
additional means of meeting the minimum reserve requirement.
Given the unique structure of AB 811 financings, the Treasurer expects that foreclosures will be
significantly less common for LACEP than has been the case in prior assessment districts.
Unlike other assessment district financings, LACEP is completely voluntary and individual
property owners will have to meet a set of minimum credit requirements before being approved
for participation in the Program. Furthermore, the County will have some discretion to pursue
the larger delinquencies first and not to foreclose on every delinquency that contributes to or
precipitates a draw on the Reserve Fund. During any judicial foreclosure proceeding, the
County will seek to recover only those amounts associated with delinquent LACED
assessments and will not pursue the collection of other delinquent property taxes. Furthermore,
the entire amount of the assessment will not become due upon a delinquency and there will be
no acceleration of future assessment amounts.
The specific details of a LACEP foreclosure policy will be determined in connection with the sale
of the Assessment Bonds to public and/or private investors. Under no circumstances will
LACEP adopt a formal set of foreclosure policies without returning to your Board for approval. It
is anticipated that the final recommendation to your Board will reflect policies similar to those
presented in this letter and will be determined in large part by market conditions at the time of
the bond sale. The Treasurer will return to the Board for specific authorization to sell each series
of bonds and will provide detailed information regarding all foreclosure covenants included in
the financing documents.
FACTS AND PROVISIONS/ LEGAL REQUIREMENTS
These proceedings are governed by Chapter 29 of Part 3 of Division 7 of the Streets and
Highways Code of the State of California. Pursuant to this statute, counties and cities are
authorized to assist free and willing property owners in financing improvements that are
permanently fixed to residential, commercial, industrial, or other real property through a
voluntary contractual assessment program.
In accordance with Section 5989.30 of the Act, as amended by AB 811, the levy and collection
of assessments pursuant to Chapter 29 are valid under existing law and provide for the priority
status of an AB 811 assessment lien. The County has sought and relied upon the legal opinion
of its bond counsel to confirm the validity of the LACEP assessment and the priority status of
contractual assessments liens. At the direction of County Counsel, LACEP will further confirm
such conclusion by initiating a formal judicial validation proceeding. A judgment by the
Los Angeles County Superior Court regarding the validity of LACEP, and the priority status of
the ensuing liens, is of great importance to potential investors and will assist the Treasurer in
pricing the Assessment Bonds.
Following your Board's adoption of the attached resolutions, and pursuant to Section 860 of the
Code of Civil Procedure (Validation Statute), court proceedings will be initiated by the filing of a
Honorable Board of Supervisors
May 25, 2010
Page 9
formal validation complaint with the Los Angeles County Superior Court to obtain an order
declaring the validity of LACEP, the priority status of the lien, and the validity of the LACEP
financing instruments submitted to your Board. Under the Validation Statute, a summons, which
provides a summary of the matter the County seeks to validate, will contain a notice directed to
all interested parties that they may contest the legality or the validity of the matter by appearing
in person and filing a written response to the complaint not later than the date specified in the
summons. Matters, including constitutional challenges, must be raised within the statutory
limitations period or they are waived, it is anticipated that the validation proceedings will take
approximately 90-120 days to complete.
ENVIRONMENTAL DOCUMENTATION
On April 6, 2010, your Board found that the proposed project is exempt from the California
Environmental Quality Act and determined that it will not have a significant impact on the
environment.
IMPACT ON CURRENT SERVICES (OR PROJECTS
The implementation of the Program will have no impact on current services. The Program will
reduce greenhouse gases, improve energy efficiency, and create jobs within the County.
CONCLUSION
Upon approval of the attached resolutions, it is requested that the Executive Officer of the Board
return three originally executed copies to the Chief Executive Office, Internal Services
Department, and Treasurer and Tax Collector.
Respectfully submitted,
1IOKA
WILLIA T F
Chief Executive Officer
Respectfully submitted,
MARK J. SALADINO
Treasurer and Tax Collector
Respectfully submitted,
U
TOM T1 DALL
Director, Internal Services Department
Honorable Board of Supervisors
May 25, 2010
Page 10
Attachments
c: Assessor
County Counsel
Executive Office, Board of Supervisors
Auditor -Controller
05.25,10 ab851 board tanar_pubi'ic hearing.dmx
attachment 1
A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE
COUNTY OF LOS ANGELES MAKING CERTAIN FINDINGS
AND DETERMINATIONS IN CONNECTION WITH AND
CONFIRMING THE REPORT REGARDING THE
ESTABLISHMENT OF A CONTRACTUAL ASSESSMENT
PROGRAM TO FINANCE DISTRIBUTED GENERATION
RENEWABLE ENERGY SOURCES AND ENERGY AND
WATER EFFICIENCY IMPROVEMENTS; CONFIRMING
ASSESSMENTS TO BE LEVIED WITHIN THE PARAMETERS
OF THE REPORT; AND TAKING CERTAIN OTHER
ACTIONS
WHEREAS, on April 6, 2010, the Board of Supervisors (the `Board of Supervisors") of
the County of Los Angeles, a political subdivision of the State of California (the "County"),
adopted its resolution declaring its intention to order the implementation of a contractual
assessment program to finance the installation of distributed generation renewable energy
sources and energy and water efficiency improvements (the "Resolution of Intention") pursuant
to Chapter 29 of Part 3 of Division 7 of the California Streets and Highways Code (the "Act');
and
WHEREAS, the Resolution of Intention directed the Director of the Internal Services
Department of the County ("Program Administrator") to prepare and file with the Board of
Supervisors a report (the "Report") in accordance with Section 5898.22 of the Act and the
Program Administrator has filed said Report with the Board of Supervisors; and
WHEREAS, the Resolution of Intention set the time and place for a hearing on the
proposed Los Angeles County Energy Program ("LACEP") described in the Report; and
WHEREAS, the Resolution of Intention described the proposed arrangements for funding
LACEP, including certain parameters for the issuance of bonds pursuant to the Act, which bonds
will be repaid by voluntary contractual assessments; and
WHEREAS, on May 25, 2010, following notice duly given in accordance with law, the
Board of Supervisors held a full and fair public hearing on the Report, LACEP and matters
relating thereto, at which interested persons were afforded the opportunity to comment upon,
object to, or present evidence with regard to the proposed LACEP or any of its particulars,
including the extent of the area proposed to be included within LACEP, the terms and conditions
of the draft contract with landowners (as further described herein, the "Assessment Contract')
assessment, and the proposed financing provisions; and
WHEREAS, the Report sets forth each of the items required to be contained therein
pursuant to Section 5898.22 of the Act; and
WHEREAS, the Board of Supervisors, having considered all oral and written testimony,
desires to confirm the Report and proceed with the establishment of LACEP;
NOW, THEREFORE, BE IT RESOLVED, DETERMINED, AND ORDERED BY THE
BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES AS FOLLOWS:
Section 1. The recitals set forth hereinabove are true and correct in all respects.
Section 2. The Board of Supervisors finds and determines that all actions required to
be taken and all conditions required to be satisfied prior to action by the Board of Supervisors
pursuant to law, including the Act, have been taken and satisfied.
Section 3. The Board of Supervisors hereby confirms the Report and approves the
formation of the contractual assessment program in connection with LACEP. The Board of
Supervisors also confirms the assessment for the cost of the improvements and approves the
maximum annual administrative assessment of $100 to be levied within the parameters of the
Report. The Board of Supervisors directs the establishment of LACEP and the implementation
of LACEP as provided in the Report and in accordance with the applicable law.
Section 4. The Board of Supervisors hereby appoints and designates the Program
Administrator to enter into Assessment Contracts with property owners on behalf of the County
and perform the other duties and functions of the Superintendent of Streets for purposes of
California Streets and Highways Code, Section 3100 et seq., in connection with LACEP.
Section 5. The Clerk of the Board of Supervisors is hereby directed to cause to be
recorded in the office of the Program Administrator, as designated Superintendent of Streets, and
in the office of the Registrar-Recorder/County Clerk of the County of Los Angeles (the "County
Recorder") a copy of the assessment diagram setting forth the boundaries of LACEP and notice
of the existence and amount of each contractual assessment in connection with LACEP, which
notice may be amended from time to time and shall set forth the names of all landowners who
have entered into Assessment Contracts with the County and their related parcels or lots,
pursuant to Section 5898.32 of the Act and Section 3100 et seq. of the California Streets and
Highways Code.
Section 6. The Clerk of the Board of Supervisors is further directed to cause to be
recorded in the office of the County Recorder, concurrently with the instrument creating the
voluntary contractual assessment, a document entitled "Payment of Contractual Assessment
Required" pursuant to Section 5898.24(d) of the Act. The County Recorder shall only be
responsible for examining such document and determining that it contains the information
required by Section 5898.24(d)(2)(A), (E) and (F) of the Act and for indexing the document
under the names of the persons and entities identified in Section 5898.24(d)(2)(A) and (E) of the
Act. The County Recorder shall not examine any other information contained in such document.
Section 7. The Board of Supervisors hereby designates the Auditor -Controller as the
office responsible for annually preparing the current roll of assessment obligations by assessor's
parcel number on property subject to a voluntary contractual assessment and directs the Program
Administrator to establish procedures to promptly respond to inquiries concerning current and
future estimated liability for a voluntary contractual assessment; provided that neither the
Auditor -Controller, the Program Administrator nor the Board of Supervisors shall be liable if any
estimate of future voluntary contractual assessment liability is inaccurate or for any failure of any
seller to request notice pursuant to the Act or to provide the notice to a buyer.
2
Section 8. The Program Administrator is hereby authorized and directed to do all acts
and things which may be required of him by this Resolution, or which may be necessary or
desirable in carrying out LACEP as described in the Report, and all matters incidental thereto,
including without limitation, to make clarifying changes to the Report; after consulting with
County Counsel, to modify, the draft application and the draft Assessment Contract set forth in
the Report; and to modify the schedule of eligible improvements attached to the Report as
deemed necessary or desirable after consulting with other County staff.
Section 9. This Resolution shall be effective upon its adoption by the Board of
Supervisors.
The foregoing Resolution was on the � 511L day of Mav 2010, adopted by the
Board of Supervisors of the County of Los Angeles and ex -officio the governing body of all
other special assessment and taxing districts, agencies and authorities for which said Board so
acts.
APPROVED AS TO FORM:
ANDREA SHERIDAN ORDIN
County Counsel
Behnaz Tishakorian
Deputy County Counsel
SACHi A. HAMAI
Executive Officer of the
Board of Supervisors of the
County of Los Angeles
L/ eputy
attachment 2
Los Angeles County
Energy Program
(LACEP)
-(O"OS-4)
CA,
4-
Los Angeles County Energy Program
Program Report
Table of Contents
I. INTRODUCTION.......................................................................................................................................1
Background...............................................................................................................................................1
ProgramBenefits......................................................................................................................................2
ProgramAdministration............................................................................................................................3
ProgramDuration.....................................................................................................................................3
It. PROGRAM REQUIREMENTS
Geographic Parameters and Participating City Requirements.................................................................3
Eligible Owners and Properties................................................................................................................4
EligibleImprovements..............................................................................................................................5
EligibleCosts............................................................................................................................................5
III. PROGRAM FINANCING
Strategyto Raise Capital..........................................................................................................................5
TheEnergy Fund......................................................................................................................................6
Maximum Aggregate Contractual Assessment........................................................................................6
Administrative Costs/Application Fee.......................................................................................................6
Maximum Disbursement Amounts............................................................................................................7
Single and Multiple Disbursements..........................................................................................................7
AssessmentInterest Rate.........................................................................................................................7
Annual Administrative Assessment; Consultation with County Auditor-Controller...................................7
AssessmentTerm.....................................................................................................................................7
Assessment Collection and Default..........................................................................................................7
Rebates and Incentives............................................................................................................................8
FinancingProcess....................................................................................................................................8
Priorityof Funding.....................................................................................................................................9
Property Owner Financial Responsibilities...............................................................................................9
IV. CHANGES TO THE PROGRAM REPORT.............................................................................................9
Appendix A: Area Map
Appendix B: Eligible Improvements
Appendix C: Draft Assessment Contract
iiIPage
Los Angeles County Energy Program
Program Report
I. INTRODUCTION
The Los Angeles County Energy Program ("LACEP" or "Program") is intended to help property owners
make capital investments in distributed generation renewable energy sources and energy efficiency and
water efficiency improvements (collectively known as "Improvements") that will provide long-term benefits
and reduced energy bills. The Program will provide a financing mechanism for the Improvements through
an assessment contract (the "Assessment Contract") between the County of Los Angeles (the "County")
and the property owner, pursuant to which the County will disburse a specified amount to the property
owner. The property owner will pay contractual assessments levied against the property through annual
installments on the property tax bill. If the owner sells the subject property prior to full repayment of the
assessment, the repayment obligation remains a lien on the subject property. The County intends to
finance the Program in part by issuing (or causing to be issued) bonds payable from contractual
assessment revenues. Participation in the Program is completely voluntary and property taxes for non-
participating property owners are unaffected by the Program.
This Program Report ("Report") is prepared pursuant to Section 5898.22 of Chapter 29 of the California
Streets and Highways Code ("Chapter 29") in connection the establishment of LACEP. It includes the
following:
1) A map showing the boundaries of the Program - the territory within which contractual
assessments are proposed to be offered. See Appendix A attached hereto.
2) A draft Assessment Contract specifying the terms and conditions that would be
applicable to the property owner and the County. See Appendix C attached hereto.
3) A statement of County policies concerning voluntary contractual assessments, including
all of the following:
• Identification of the types of facilities, distributed generation renewable energy
sources, or energy or water efficiency improvements that may be financed
through the use of contractual assessments.
• Identification of one or more County officials authorized to enter into voluntary
contractual assessments on behalf of the County.
• A maximum aggregate dollar amount of voluntary contractual assessments.
4) A method for establishing priority order among the requests from property owners for
financing through LACEP.
5) A financing plan for raising capital.
6) A report on the results of consultations with the County Auditor -Controller concerning the
additional fees, if any, that will be charged for incorporating the proposed voluntary
contractual assessments into the general taxes of the County on real property, and a plan
for financing the payment of those fees.
Background
Widespread implementation of distributed generation renewable energy sources and energy efficiency
and water efficiency measures in existing buildings within the County will help the State of California
("State") reach the greenhouse gas reduction goals set forth under State Assembly Bill 32 ("AB 32") and
help the County and surrounding cities achieve their own targeted reductions. Participating property
owners can help to achieve greenhouse gas reductions, reduce water and energy use, and save money
by investing in these measures.
Chapter 29 authorizes various public agencies, including counties and cities, to designate areas within
which free and willing property owners can enter into contractual assessments to finance the installation
of Improvements that are permanently fixed to residential, commercial, industrial, agriculture or other real
property. LACEP is the voluntary contractual assessment program developed by the County pursuant to
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Chapter 29. Any assessments and liens under LACEP are levied only with the consent of free and willing
owners of the property on which Improvements are to be made. The Program will provide financing for
qualifying property owners within the County to install Improvements pursuant to the terms and conditions
of the Assessment Contracts. Property owners will pay contractual assessments levied against their
property in installments on their property tax bills. Each contractual assessment is tied directly to the
applicable property and any unpaid amount at sale or other disposition of the property will remain on the
property and become the responsibility of the subsequent owner.
Freeram Benefits
LACEP is intended to provide multiple benefits, including the potential for reduced utility bills for
participating property owners. LACEP also offers a means of financing Improvements with a lower equity
contribution than may be required in a conventional financing and establishes a loan obligation that is
attached to the property and not to the individual borrower. The financing is intended to be competitive
with conventional fixed-rate loans and provide for a streamlined financing and repayment process. All
available State, utility or other energy efficiency, water efficiency or renewable energy rebates, incentives
and all State and federal tax credits remain available to the property owner in connection with the
Improvements (subject to applicable rules, restrictions, regulations and the current status of programs
administered by other such entities), unless otherwise specified.
Incorporated cities may participate in LACEP without incurring the costs of forming separate programs
because LACEP's geographical boundary is coterminous with the County's boundaries and includes,
subject to such cities' approval of participation in LACEP, all 88 incorporated cities. Having a single
program available to all residents of the County is anticipated to increase participation by eliminating
confusion for residents in finding the appropriate program. Cities may join LACEP by adopting a
resolution allowing property owners in their respective jurisdictions to apply for financing and implement
Improvements under LACEP.
The Program seeks to mitigate long-term regional greenhouse gas production through the reduction of
energy usage from traditional utility sources and help the County and participating cities satisfy the
State's greenhouse gas reduction goals under AB 32. When it was signed into law in 2006, AB 32
established statewide goals for the reduction of greenhouse gas emissions and may yet require counties
and cities to adopt regional greenhouse gas emission limits similar to the statewide target of achieving
1990 levels of greenhouse gas emissions by 2020. To the extent permitted by law, the County will hold
and retain any carbon credits, offsets, carbon cap allocations, or other benefits attributable to the
Improvements financed by LACEP. It is the intention of the County to apply any benefits resulting from
such carbon credits to the furtherance of LACEP.
LACEP has the potential to provide a significant industry shift in the region towards an energy efficiency,
water efficiency and renewable energy economy. LACEP aims to be a catalyst in spurring a new "green"
economy in the County by supporting energy project inspection and installation jobs, job training and
workforce development, local manufacturing and distribution, research and development, and marketing
and outreach.
For the first few years of the Program, American Recovery and Reinvestment Act ("ARRA") grants will be
used to partially fund LACEP. By the end of the ARRA funding term in 2012, LACEP seeks to achieve
the following goals:
1. Retrofit 15,000 single-family homes with a 20% average energy reduction.
2. Create 1,600 home energy retrofit jobs and 1,000 ancillary jobs.
3. Reduce annual purchased energy consumption in retrofitted homes by an aggregate 150 billion
British Thermal Units and $2 million in utility charges per year.
4. Reduce the County's annual greenhouse gas emissions attributable to energy consumption in its
existing housing stock by 20,000 tons of carbon dioxide.
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The benefits to both the regional economy and the environment are expected to increase once individual
cities join LACEP, as the above forecasts are quantified solely for unincorporated areas of the County.
Program Administradon
The Program will be governed by the Board of Supervisors of the County of Los Angeles, which will
approve the Program parameters, approve the issuance of bonds, and delegate authority to authorized
officers to administer the Program.
The Director of the County's Internal Services Department will serve as the Program Administrator and
will provide day-to-day management of the Program, including design, implementation, and
administration. The authority to approve and enter into individual Assessment Contracts will be delegated
by the Board of Supervisors to the Program Administrator.
The County Office of Sustainability ("COS"), within the Intemal Services Department, and the Program
Administrator will manage all Program activities, including, but not limited to, the following:
• Marketing and community outreach;
• Energy surveys and technical support for individual projects;
• Customer service, including question and answer support to interested Program participants;
• Assisting in project development;
• Processing Program applications;
• Managing and tracking funds available for financing Improvements;
• Managing and tracking progress of the Improvements and financing therefor;
• Tracking individual and collective energy and greenhouse gas benefits;
• Integrating LACEP with other County, State, utility and regional rebate/incentive programs;
• Working and coordinating with participating cities and other jurisdictions;
• Providing information on local and regional environmental programs; and
• Reporting progress and expenditures according to mandated reporting methods applicable to
appropriated funds, including amounts received pursuant to ARRA.
These activities are intended to provide quality Program design, administration and implementation for
qualifying property owners who may otherwise be unable to finance and install the Improvements.
Proeram Duration
Unless otherwise directed by the Board of Supervisors, the Program will continue as long as there is
sufficient demand and funding for the Improvements.
A PROGRAMREQUIREMENTS
Geo,ewhic Parameters and Participating Cit, Requirements
LACEP is available in the unincorporated areas of the County immediately upon establishment of the
Program by the Board of Supervisors. Cities within the County may join LACEP and make assessment
financing available to qualifying property owners located within their city's boundaries. Anytime after the
County's establishment of the Program, a city's legislative body may adopt a resolution requesting
inclusion in the County Program. Pursuant to such resolution to participate in the Program, the city will
find and declare that the properties in the city's incorporated area will benefit from participation. Further,
the city's resolution will authorize the County to set the terms of LACEP, implement the Program, and
take action necessary for financing the Improvements.
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Participation in LACEP offers cities and their property owners the following advantages:
• An opportunity to save money through energy and water efficiency improvements;
• The ability to take advantage of substantial financial incentives and rebates from multiple
sources;
• A financing mechanism that establishes an obligation that remains attached to the property; and
• Job creation and stimulation of the economy.
Cities may elect to withdraw from participation in LACEP by adopting a resolution terminating their
involvement. If a participating city elects to withdraw from LACEP, no future assessment financing will be
made in that city, but assessment obligations made previous to the city's termination will remain in effect.
A map showing the Proposed Program boundaries is attached in Appendix A.
Eligible Owners and Properties
All owners of improved real property within participating areas are eligible to submit an application for
LACEP. Qualifying property owners may be individuals, associations, business entities, cooperatives and
any owner who pays real property taxes. At this time, financing through LACEP is not available for
properties that are not subject to property taxes, such as govemmental entities and certain non-profit
corporations.
To protect the Program from defaults and to improve access to the capital markets, property owners must
meet the following minimum requirements to qualify for financing:
• Property is located within Los Angeles County, and if within the boundaries of a city, the city has
adopted a resolution to join the Program;
• Applicant is the legal owner of the property;
• All legal owners of the property agree to participate in the Program;
• The property is not subject to involuntary liens as set forth in the Assessment Contract or any
other Program document;
• Property taxes and assessments are current on the property and have not been delinquent for a
period up to 5 years (or since the date of the most recent transfer if less than 5 years);
• Property owner certifies that he/she is not in bankruptcy and the property is not an asset in a
bankruptcy proceeding;
• Property owner certifies that he/she has not declared bankruptcy within the last 10 years;
• Property owner certifies and demonstrates that he/she is current on his/her mortgage, has not
defaulted on the deed(s) of trust and can legally enter into the Program;
• Improvement costs are reasonable to property value. Property must meet a minimum value -to -
lien ratio';
• Property must meet a positive equity test and not exceed a maximum loan-to-value2 ratio; and
• Property is subject to the appropriate jurisdiction's (County, city, or town) permitting and
inspections and all other applicable federal, State, and local codes and regulations.
Property owners may submit more than one application for funding under the Program if additional
Improvements are desired by the owner. However, ail existing criteria must be met at the time of each
new application. Valuation of the property will reflect either the assessed value or the market value as
determined by using established industry approved methodologies. Costs for the scope of work will be
based on contractor estimates, quotes provided by the property owner, and general industry standards.
Additional due diligence or underwriting criteria may be required for the financing of large projects.
' Value of the property divided by the amount of the contractual assessment.
2 Aggregate total of all liens secured by real estate mortgages on the property divided by the value of the property.
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The Program Administrator may exercise discretion in determining eligibility and any additional criteria
required for financing Improvements. Furthermore, the minimum eligibility requirements provided in this
Report are subject to change pursuant to the future financing needs of the Program.
Eligible larprovements
The Program provides property owners the opportunity to take advantage of a wide range of
Improvements, subject to the following provisions:
• The Program will only finance distributed generation renewable energy sources and energy
efficiency and water efficiency measures that are permanently fixed to the property.
• Property owners who elect to engage in broader retrofit projects (such as residential or
nonresidential remodeling) will only be provided financing for costs associated with Improvements
available under the Program.
• The Program is intended to finance the replacement of working, inefficient equipment and
building materials and the installation of new equipment and building materials that reduce energy
consumption (beyond that required by existing, applicable building codes), produce renewable
energy, or reduce energy in connection with water usage. The Program will also make financing
available for purchasers of residential, commercial or industrial properties who wish to add
Improvements after transfer of title is complete.
• Property owners are responsible for the Improvements installed on their property. Property
owners must address performance and other system -related issues directly with the installer in
accordance with the terms of their contract with the installer. Property owners are responsible for
maintenance and repair of the Improvements.
Examples of Improvements available for financing under LACEP are provided in Appendix B.
Eligible Costs
Eligible costs of the Improvements include the cost of surveys and audits, permits3 and inspections,
equipment, installation from licensed, approved professionals, and follow-up inspections. Installation
costs may include, but are not limited to, energy audit consultations, labor, design, drafting, engineering,
permit fees, and inspection charges. A qualified contractor of the property owner's choice can be
selected to complete installation of Improvements.
For each property, the Program Administrator will determine whether the estimated equipment and
installation costs are reasonable. The Program Administrator will evaluate market conditions and may
require the property owner to provide additional bids to determine whether costs are reasonable. While
the property owner will be able to choose the contractor of his/her choice, the amount eligible for the
LACEP financing may be limited to the amount deemed reasonable by the Program Administrator.
Projects that exceed a certain size and dollar amount may be subject to additional review.
IIL PROGRAM FINANCING
Strategy to Raise Capital
The County intends to raise capital for the Program through one or more of the following financing
arrangements:
• Issuing or causing the issuance of bonds pursuant to Section 5898.28 of the Streets and
Highways Code, the principal and interest of which will be repaid from contractual assessments;
All Improvements that require permits will be required to obtain such a permit from the local jurisdiction. Final inspection will
ensure that the Improvements were completed.
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• Advancement of certain County funds or funds held by the County Treasurer and Tax Collector,
which will be repaid through contractual assessments or reimbursed from proceeds of a debt
issuance;
• Application of funds received pursuant to federal and State programs and available for LACEP
financing purposes;
• Issuing debt or entering into loan arrangements to fund the Improvements; and
• Private or owner -arranged financing.
To the extent that the County issues debt, it is expected to include a debt service reserve fund in the
amount sufficient to enhance the marketability of the debt. The proceeds of the debt issuance will be
applied to cover the costs of Improvements, fund the debt service reserve fund, and pay costs of
issuance of the debt. The County may also pursue other financing options not listed above should such
options benefit the ongoing viability of the Program.
The Ener: v Fund
The County will create a special fund, the Energy Fund ("Fund"), which will hold contractual assessments
revenues received pursuant to the Assessment Contracts. Moneys in the Fund shall be used to make
payments on debt issued by or on behalf of the County, fund certain administrative costs of the Program,
replenish the debt service reserve fund, if required, and repay funds advanced by the County. Amounts
in the Fund may also be used to finance additional Improvements secured by contractual assessments
and any other reasonable activity needed to advance the Program. Payment of the contractual
assessments will be made pursuant to Assessment Contracts between the property owner and the
County.
Maximum Aezrezate Contractual Assessment
The County is authorized to enter into up to $1.0 billion in aggregate dollar amount of voluntary
contractual assessments. The County will coordinate the timing and issuance of debt with the goal of
providing the lowest possible interest rate to qualifying property owners and maintaining the long-term
financial viability of the Program.
Administrative Coats/Application Fee
The County will offer the Program as an additional County service that will help property owners achieve
reductions on their energy bills and other environmental goals, while helping the County achieve its own
environmental goals. The County will be responsible for:
• Development and operation of LACEP;
• Acquisition of LACEP financing;
• Overall reporting of Program status and goals, including reports to financing agencies, regulators,
and stakeholders;
• Overall structure and enforcement of Program governance; and
• Management and administration of LACEP consultants needed to perform services under the
Program.
Certain administrative costs are anticipated in connection with the aforementioned responsibilities. All or
a portion of such administrative costs may be financed through the interest component of the contractual
assessment. The Program may also assign direct fees or charges to property owners for certain services
provided during the process of securing an Assessment Contract. The County will recover a portion of
these initial administrative costs through a one-time application fee.
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Maximum Disbursement Amounts
The County will set a maximum disbursement amount for individual properties under the Assessment
Contract. Where possible, the actual amount disbursed to a participating property owner pursuant to an
Assessment Contract will equal the actual cost of Improvements. In the event that th6 final cost of
Improvements exceeds the agreed upon maximum disbursement amount, the property owner will be
solely responsible for the payment of excess costs incurred to complete the Improvements.
Sinele and Multiple Disbursements
Most disbursements will be delivered to property owners in a single payment upon completion of the
Improvements. However, upon Program Administrator approval, some projects may qualify for multiple
disbursements, which will allow for one or more payments to be made prior to project completion.
Assessment Interest Rate
The County will set a maximum interest rate for individual properties under the Assessment Contract.
The final interest rate will be determined such that the total amount of contractual assessment payments
(principal and interest) will be sufficient to repay the debt issued to finance the Improvements, pay the
financing costs of such debt issuance, finance a debt service reserve fund with respect to such debt and
fund eligible administrative costs so that the Program remains financially viable. The County Treasurer
and Tax Collector, in conjunction with the Program Administrator, will determine individual contractual
assessment interest rates. Under no circumstances will the interest rate exceed the maximum rate
allowed by law.
Annual Administrative Assessment; Consultation with County Auditor -Controller
LACEP reserves the right to charge an Annual Administrative Assessment to cover costs incurred by the
County for the ordinary and necessary costs of administering the levy and collection of the contractual
assessments and all other administrative costs and incidental expenses related to the debt to be issued.
Separate from any application fee or administrative cost recovered through amounts paid on the
contractual assessment interest rate, the Annual Administrative Assessment will be collected in the same
manner as the contractual assessment and may be adjusted annually to reflect changes in costs. The
County Auditor -Controller has been consulted regarding any fees resulting from the incorporation of the
contractual assessments into the general taxes of the County on real property. It has been determined
that any such fees shall be collected pursuant to the Annual Administrative Assessment.
Assessment Term
The term of the contractual assessments will be no greater than the expected useful life of the
Improvements for each individual Assessment Contract. In no event will the term of any contractual
assessment exceed the maximum term allowed by law. The term of each contractual assessment will be
set under the Assessment Contract.
Assessment Collection and Default
The contractual assessments will be collected in the same manner and at the same time as the general
property taxes of the County. The contractual assessments are subject to the same penalties, remedies,
and lien priorities in the event of delinquency and default. If any contractual assessment becomes
delinquent and property taxes remain unpaid, the County shall have the right to initiate foreclosure
proceedings on the subject property. The LACEP foreclosure policy will be developed in connection with
future financing arrangements and will take into consideration any required covenants associated with a
bond issuance.
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Rebates and Incentives
Financing through the Program may coincide with current and future distributed generation renewable
energy, energy efficiency and water efficiency financial incentives available from utility providers as well
as local, State, federal, and other agencies. The value of expected rebates and incentives will be
factored into the financing available to the property owner. The Program will advise, and may require
that, participants apply for any and all applicable rebates and incentives available at the time of financing.
References to rebates and financial incentives in this Report do not include income tax rebates.
Financine Process
The process for property owners to receive financing through LACEP is designed to be helpful,
transparent, and straightforward. Presented below are the general procedures for the application,
funding, and repayment process:
• Education. Property owners may access a variety of resources to learn about the Program, the
financing terms, and other details. These resources may include a Program website, service
centers staffed to assist property owners, and information made available at community events.
• Application. Property owners may apply for a funding reservation from LACEP and pay a non-
refundable application fee. Applications must include a proposed project (scope of work) and a
contractor bid.
• Review and Approval. The Program Administrator will approve an application only after
confirming that the applicant and proposed project satisfy the underwriting criteria and other
Program requirements.
• Reservation of Funds. Once the application is approved, the Program Administrator and the
property owner will enter into the Assessment Contract. At this point in time, a maximum
disbursement amount, loan term, and maximum interest rate will be set. The property owner will
also agree to the terms and conditions of the Assessment Contract. The Program Administrator
will provide assessment information to the County and an assessment lien will be filed with the
County Registrar -Recorder,
• Installation. The property owner will receive a notice to proceed with the Improvements. A
qualified installer must complete the installation of authorized Improvements on the property
within the required timeframe after receiving the notice. In some cases, the Program
Administrator in his/her sole discretion may grant a time extension.
• Evidence of Compliance/ Disbursement of Funds. The County is not obligated to disburse
funds unless and until each of the requirements set forth under the Assessment Contract are
satisfied or waived by the Program Administrator. Upon satisfaction of the above, the Program
Administrator will release funds to the property owner in the amount of the actual cost of
Improvements, but not exceeding the maximum disbursement amount set forth in the
Assessment Contact. At this time, the Program Administrator will notify the property owner of the
actual interest rate and amount of the contractual assessment.
• Repayment. After the release of funds, the County will place the assessment on the property tax
roll for the tax year immediately following the disbursement date. The property owner will be
expected to pay the contractual assessment installments in the amounts and at the times
specified in the Assessment Contract. Prepayment of the contractual assessment will be
permitted, however, penalties may apply. Any applicable penalties resulting from prepayment will
be set forth in the Assessment Contract.
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Priority of Fundine
Applications from property owners for financing will be given priority based on the date on which the
application is approved. If a request from a property owner for financing would cause LACEP to exceed
the maximum amount of contractual assessments for the Program, then that application will be ineligible
for financing. The Program Administrator shall retain the authority to grant exceptions to the priority
status of individual applications.
Propern, Owner Financial Responsibilities
The following types of costs are examples of those that will be the responsibility of the property owner
and will not be financed through the Program:
• Application fee;
• If applicable, title insurance and property insurance costs;
• Late payment fees;
• If applicable, costs associated with compliance with the California Environmental Quality Act; and
• Costs associated with repairs and maintenance of the Improvements.
IV CHANGES TO THE PROGR4M REPORT
The Program Administrator may make changes to this Report that he/she reasonably determines are
necessary to clarify its provisions. Any changes made to this Report that materially modify the LACEP
shall only be made after approval by the Board of Supervisors.
The Program Administrator may modify the schedule of eligible Improvements attached as Appendix B
and the draft Assessment Contract attached as Appendix C as deemed necessary or desirable to
effectuate the intent of the Program.
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Appendix A: Area Map
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Appendix A I A 1
Los Angeles County Energy Program
Program Report
Appendix B: Eligible Improvements
Eligible improvements will include, but are not limited to, the following types of Improvements, subject to
approval by the Program Administrator:
Energy Efficiency Improvements
• Air sealing
• Duct sealing and weather stripping
• Attic, duct, floor, roof and wall insulation
• Hot water system insulation
• Fans (Bathroom, ceiling, whole house)
• Energy efficient pool pumps
• HVAC systems
• Programmable thermostats and energy management systems
• Light fixtures
• Energy Star cool roof
• Radiant barriers
• Windows, doors, skylights
• Window film
Water Efficiency Improvements
• Hot water heater
• On -demand water recirculation control pump
• High -efficiency toilets and urinals
• Showerheads and aerators
• Smart irrigation/ Water efficient landscaping
• Rainwater harvesting system
• Grey water system
Distributed Generation Renewable Energy Improvements
• Solar hot water heating systems
• Solar thermal installation
• Solar space heating
• Photovoltaic systems
• Wind energy systems
• Fuel cell power systems
Appendix B I B 1
Los Angeles County Energy Program
Program Report
Appendix C: Draft Assessment Contract
(See attached.)
Appendix C I C-1
HD&W LLP — 5110110 Draft
LOS ANGELES COUNTY ENERGY PROGRAM
ASSESSMENT CONTRACT
This Assessment Contract (this "Contract') is made and entered into as of this day
of 20_, by and between the COUNTY OF LOS ANGELES, a political subdivision
of the State of California (the "County"), and and
(collectively, the "Owner").
WHEREAS, the County has established the Los Angeles County Energy Program
("LACEP") pursuant to Chapter 29 of Part 3 of Division 7 of the California Streets and
Highways Code (the "Act'), in connection with which the County may levy assessments against
developed properties in the County, with the free and willing consent of the owners of the
properties, to finance the acquisition and construction on and installation in the assessed
properties of certain qualifying renewable energy systems and energy and water efficiency
improvements.
WHEREAS, the Owner has reviewed the Program participant handbook attached as
Exhibit A hereto (the "Participant Handbook") and submitted an application to participate in
LACEP (the "Application"; together with Participant Handbook and this Contract, the "Contract
Documents") to finance the acquisition, construction and installation of the renewable energy
systems, energy efficient improvements and/or water efficiency improvements described in
Exhibit B attached hereto (the "Improvements") on that certain real property of the Owner
described in Exhibit C attached hereto (the "Property") and the County has approved such
Application.
WHEREAS, the County may fund LACEP through a number of financing mechanisms,
including with proceeds of bonds to be issued by the County, with proceeds of loans derived
from bonds issued by the Los Angeles County Public Works Financing Authority (the
"Authority") and from amounts to be advanced through available funds of the County.
WHEREAS, the County wishes to provide for the terms and conditions pursuant to which
the Owner will participate in LACEP and pay assessments to finance the Improvements
hereunder.
NOW THEREFORE, in consideration of the mutual covenants contained herein and
other valuable consideration, the receipt and adequacy of which is hereby acknowledged, the
parties agree as follows:
1. Financing Terms
(a) Disbursement Amount; Maximum Disbursement Amount. Subject to the
conditions set forth herein, the County agrees to disburse moneys to the Owner in the amount of
the actual cost of the Improvements (the "Disbursement Amount'); provided the Disbursement
Amount shall not exceed the maximum amount set forth in Exhibit B hereto (the "Maximum
Disbursement"). LACEP Program Administrator (the "Program Administrator") shall determine
the Disbursement Amount on the basis of the best available written evidence of the actual cost of
the Improvements and in the exercise of the Program Administrator's reasonable judgment. The
Owner agrees to complete the Improvements. The Owner agrees to pay for and shall be solely
responsible for the payment of all costs to complete the Improvements described in the
Application which exceed the Maximum Disbursement.
(b) Repayment by Owner
(i) Assessment. In consideration of the disbursement of the Disbursement
Amount, the Owner shall pay to the County an amount equal to the Disbursement
Amount, certain financing costs, including any capitalized LACEP administrative
expenses, and the interest accrued thereon. Such amounts shall be repaid by the Owner
to the County by the payment of an aggregate assessment levied against the Property
pursuant to Section 5898.30 of the Streets and Highway Code of the State of California
(the "Assessment") without deduction or offset for any amounts the Owner may claim
due to it by the County, all as set forth in Exhibit B attached hereto.
(ii) Interest on Assessment. Interest shall be payable in installments,
computed on the basis of a 360 -day year, and shall accrue on the unpaid Assessment from
[the date of this contract' ][the date any portion of the Disbursement Amount is disbursed
to the Owner] at the rate determined by the Program Administrator in his/her sole
discretion at the time of disbursement or final disbursement, as applicable, of the
Disbursement Amount. The maximum interest rate applicable to the unpaid Assessment
and the interest installments therefor are set forth in Exhibit B hereto. The Program
Administrator will give notice to the Owner of the interest rate applicable to the unpaid
Assessment and the related interest installments as soon as practicable after its
determination, which notice will be substantially in the form attached as Exhibit D hereto
(the "Notice of Interest Rate and Payment Schedule").
(iii) Annual Administrative Assessment. The Owner shall pay to the County,
without deduction or offset, an annual assessment levied against the Property to pay costs
incurred by the County in connection with the administration and collection of the
Assessment, the administration or registration of any associated bonds, securities or other
financing arrangements, and the administration of any reserve fund or other related funds
(the "Annual Administrative Assessment"). The Annual Administrative Assessment
shall not exceed the amount set forth in Exhibit B hereto and may be changed from time
to time by the Program Administrator, in his sole discretion, subject to the maximum
Annual Administrative Assessment.
(iv) Financing Costs in the Event of Noncompletion. If the Owner fails to
install the Improvements in compliance with LACEP requirements following execution
of this Assessment Contract, the Owner shall pay for'all expenses incurred by the County
In the case of a County financing with accrued interest.
-2-
or any of its agents in connection with levying or removing the assessments hereunder
and financing the Improvements, including costs relating to the redemption of bonds
issued to finance the Improvements.
(c) Prepavment. The Owner may prepay the Assessment in whole and in part by
paying all or a part of the principal amount owing on the Assessment, plus the applicable
prepayment premium set forth in Exhibit B hereto, and accrued interest. Interest on the
Assessment may accrue until the next available redemption date for any bonds or other evidences
of indebtedness, or other financial arrangements entered into by the County pursuant to LACEP
which financed the Assessment in whole or in part. Such redemption date shall not exceed
(__) days from the date of prepayment of the Assessment. The Owner shall notify the Program
Administrator in writing of the Owner's determination to prepay the Assessment at least _ (�
business days prior to the date the Owner intends to prepay the Assessment.
(d) Term of Contract. The term of this Contract shall be as set forth in Exhibit B
hereto, commencing upon the execution hereof and ending on the date the Assessment and any
applicable penalties, costs, fees, and charges have been paid in full; provided, however, the
estimated payment schedule may be adjusted as provided in this Section 1. The initial amount of
each Assessment and Annual Administrative Assessment installment that will be levied is set
forth in Exhibit B attached hereto. The amount of each Assessment and Annual Administrative
Assessment installment that will be levied each year, as adjusted to reflect the applicable interest
rate determined by the Program Administrator but excluding any penalties that may accrue, is set
forth in Exhibit D attached hereto.
2. Lien of Assessment and Annual Administrative Assessment; Saecial Benefit.
(a) Lien Against Property. The execution of this Contract by the parties constitutes
the levy of the Assessment and the Annual Administrative Assessment by the Board of
Supervisors against the Property without any further action required by the parties. The Owner
consents to the levy of the Assessment and the Annual Administrative Assessment, including
each installment thereof and any interest and penalties that accrue with respect thereto, on and
recordation of a lien against the Property and agrees that, upon the execution of this Contract by
the parties, the Property shall be subject to the Assessment and the Annual Administrative
Assessment in accordance with and pursuant to this Contract, the Act and applicable law.
(b) Notice of Assessment Notice of Payment of Contractual Assessment Required.
Upon execution of this Contract, the County will execute and cause to be recorded in the Office
of the Registrar-Recorder/County Clerk a notice of assessment substantially in the form attached
as Exhibit E hereto (the "Notice of Assessment") and a document entitled "Payment of
Contractual Assessment Required" substantially in the form attached as Exhibit F hereto (the
"Notice of Payment of Contractual Assessment Required"). Upon recordation of the Notice of
Assessment in the Office of the Registrar-Recorder/County Clerk, the Assessment and the
Annual Administrative Assessment, including each installment thereof and any interest and
penalties that accrue with respect to the Assessment and the Annual Administrative Assessment,
shall constitute a lien upon the Property until paid. The Notice of Assessment and Notice of
Payment of Contractual Assessment Required, as recorded, shall initially reflect the Assessment
as set forth in Exhibit B. Following the County's final disbursement of the Disbursement
BIB
Amount pursuant to Section 6 hereof, the Assessment shall equal the amount set forth in Exhibit
D and the Notice of Assessment and Notice of Payment of Contractual Assessment Required will
be supplemented accordingly.
(c) Priority of Lien. The lien of the Assessment and the Annual Administrative
Assessment shall be coequal to and independent of the lien for general taxes and prior and
superior to all liens, claims and encumbrances on or against the Property except (i) the lien for
general taxes or ad valorem assessments in the nature of and collected as taxes levied by the
State of California or any county, city, special district or other local agency, (ii) the lien of any
special assessment or assessments the lien date of which is prior in time to the lien date of the
Assessment and the Annual Administrative Assessment, (iii) easements constituting servitudes
upon or burdens to the Property, (iv) water rights, the record title to which is held separately
from the title to the Property and (v) restrictions of record.
(d) Special Benefit to Property.
(i) Acknowled eg ment. The Owner expressly acknowledges that the
Improvements confer a special benefit to the Property in an amount at least equal to the
Assessment.
(ii) Waiver of Provisions Other Than Those of the Act. The Owner expressly
waives to the fullest extent permitted by law the notice, protest and hearing procedures
and provisions of any applicable law other than the Act with respect to the levy and
collection of the Assessment and the Annual Administrative Assessment, as described in
Section 2 and Section 3, respectively, hereof.
3. Collection of Amounts Due, Failure to Pay.
(a) Collection through Property Tax Bill. Annual installments of the Assessment and
the Annual Administrative Assessment shall be collected on the property tax bill pertaining to
the Property. The annual proportion of the Assessment and the Annual Administrative
Assessment coming due in any year shall be payable in the same manner, at the same time and in
the same installments as the general taxes of the County on real property are payable, and the
assessment installments shall be payable and become delinquent at the same times and the same
proportionate amounts and shall bear the same penalties and interest after delinquency, and be
subject to the same provisions for redemption and sale, as the general taxes on real property of
the County.
(b) Failure to Pay. Failure to pay any installment of the Assessment and the Annual
Administrative Assessment, including interest and penalties with respect thereto, shall result in
the accrual of penalties and interest on the amounts due and may result in the foreclosure of the
lien of the Assessment and the Annual Administrative Assessment, as described in Section 13(e)
hereof and provided by law. Except as provided in Government Code Section 53936, the liens of
the Assessment and the Annual Administrative Assessment are not subject to extinguishment by
judicial foreclosure or the sale of the Property on account of the nonpayment of any taxes.
4. Commencement and Completion of Improvements
(a) Consent and Authorization. Upon the availability of funding under LACEP, the
Program Administrator will give to the Owner a notice to proceed in the form of Exhibit G
hereto (the "Notice to Proceed"), which notice shall constitute consent and authorization
pursuant to Section 5898.21 of the Act for the Owner to purchase directly the related equipment
and materials for the Improvements and to contract directly for the construction on and/or
installation in the Property of the Improvements. The Owner bears the risk of any costs of the
Improvements incurred prior to receipt of the Notice to Proceed. The Owner may perform the
construction and/or installation on the Property provided that the Owner is deemed a qualified
installer by the Program Administrator in his/her sole discretion in accordance with the
Participant Handbook.
(b) Date of Completion of the Improvements. Subject to Section 13(g) hereof, the
Owner agrees to complete installation of the Improvements no later than days after the date of
the Notice to Proceed of this Contract. The Owner and the Program Administrator may agree to
an extension of this completion date for good cause shown, but in no event shall the completion
date be more than one year from the date of the Notice to Proceed.
5. Use of Proceeds.
The Owner shall use the Disbursement Amount for the sole purpose of paying for the
reasonable costs and expenses of the Improvements on the Property, and in connection therewith
the Owner shall comply with all requirements set forth in the Contract Documents.
6. Conditions Precedent to Disbursement of Funds
(a) Conditions Precedent to Disbursement of Funds. Notwithstanding anything to the
contrary contained herein, the County shall have no obligation to disburse funds to the Owner
unless and until each of the requirements set forth under " " of the Participant Handbook
and the following conditions are satisfied, or any such requirement or condition is expressly
waived by the Program Administrator:
(i) With respect to the initial disbursement
(A) The Program Administrator shall have received a written request to
disburse the Disbursement Amount.
(B) The Owner has executed and delivered to the Program
Administrator the Contract Documents and such other declarations,
certifications, documents or instruments pertaining to the
Disbursement Amount or the Improvements as the Program
Administrator may require.
(C) The Owner will, within (__) days of presentation by the
Program Administrator, execute any and all documents or
instruments required by the Contract Documents in connection
with the disbursement of funds to the Owner.
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(D) If the Property is a commercial property, the Owner shall have
provided all applicable lenders the Notice of Proposed Contractual
Assessment set forth as Exhibit H to this Contract and received an
executed copy of the Certificate of Lender set forth as Exhibit I to
this contract. In addition, the Owner shall have received from the
Program Administrator, at the expense of the Owner, a
determination that the Improvements to be financed hereunder
(a) are within one or more classes of projects exempt from the
California Environmental Quality Act (commencing with Section
21000 et seq. of the California Public Resources Code, "CEQA")
pursuant to Sections 15301, 15302 or 15303 of the California
Public Resources Code, (b) are the appropriate subject of a
negative declaration pursuant to CEQA, in which case a negative
declaration to that effect will be adopted pursuant to Section 21080
et seq. of the California Public Resources Code and Section 15070
et seq. of the California Code of Regulations, or (c), is the
appropriate subject of an environmental impact report pursuant to
CEQA, in which case an environmental impact report shall be
prepared and certified and amounts hereunder shall be disbursed
only if the Improvements are subsequently approved in accordance
with CEQA.
(ii) With respect to the second and final disbursement:
(A) The Program Administrator shall have received a copy of a
finalized permit issued by the building inspection department of
the jurisdiction within which the Property is located, if applicable.
(B) The Program Administrator shall have received a written
certification from the Owner and the contractor(s) that installed or
constructed the Improvements, if any, stating that the
Improvements for which disbursement is requested is complete and
setting forth the actual cost of the Improvements (exclusive of any
cost attributable to labor performed by the Owner pursuant to the
terms and conditions of this Contract and the other Contract
Documents). Such certification shall be in form and substance
acceptable to the Program Administrator.
(C) If an inspection is required, an inspection of the Improvements and
a determination by the applicable agency, authority or entity that
the Improvements have been completed in full compliance with the
requirements of applicable law or that any noncompliance has been
waived.
(D) No stop payment or mechanic's lien notices pertaining to the
Improvements has been filed and remain in effect as of the date of
disbursement of the Disbursement Amount.
M
(E) [If the Property is a commercial property, the Program
Administrator shall have received a title insurance policy in form
and substance acceptable to the Program Administrator in the
Disbursement Amount and insuring the lien of the Assessment.]
(iii) With respect to each of disbursement:
(A) As of the date of disbursement of the Disbursement Amount the
representations of the Owner contained in the Contract Documents
are true and correct, and no Default (as defined in Section 13(a)
below) shall have occurred and be continuing.
(B) The Program Administrator shall have received such other
documents and instruments as the Program Administrator may
require, including but not limited to, if applicable, the sworn
statements of contractor(s) or the Owner, if construction and/or
installation is performed by the Owner in his/her capacity as a
qualified installer pursuant to the Contract Documents, and
releases or waivers of lien, all in compliance with the requirements
of applicable law.
(iv) If there shall be a single disbursement under this Assessment Contract, all
conditions under (i) through (iii) shall be satisfied by the Owner or waived by the
Program Administrator prior to disbursement.
(b) Disbursement by County. Upon satisfaction or waiver of the conditions described
in paragraph (a), above, the County will disburse funds to the Owner [as soon as practicable.]
The Owner expressly waives the 30 -day payment period provided by Section 10403 of the
Streets and Highways Code.
7. Representations and Warranties of the Owner.
For purposes of entering into this Contract, the County has relied upon the declarations,
warranties and covenants of the Owner in this Contract and in the Application, which are
incorporated into this Contract as if fully set forth herein. The Owner promises that each
representation and warranty set forth herein is true, accurate and complete as of the date of this
Contract. By accepting the disbursement, the Owner shall be deemed to have reaffirmed each
and every representation and warranty made by the Owner in this Contract and in the
Application as of the date of disbursement. If the Owner is comprised of the trustees of a trust,
the following representations shall also pertain to the trustor(s) of the trust.
(a) Formation; Authority. If the Owner is anything other than a natural person, it has
complied with all laws and regulations concerning its organization, its existence and the
transaction of its business, and is in good standing in each State in which it conducts its business.
The Owner is the owner of the Property and is authorized to execute, deliver and perform its
obligations under the Contract Documents, and all other documents and instruments delivered by
the Owner to the County in connection therewith. The Contract Documents have been duly
executed and delivered by the Owner and are valid and binding upon and enforceable against the
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Owner in accordance with their terms, and no consent or approval of any third party, which has
not been previously obtained by the Owner is required for the Owner's execution thereof or the
performance of its obligations contained therein.
(b) Compliance with Law. Neither the Owner nor the Property is in violation of, and
the terms and provisions of the Contract Documents do not conflict with, any regulation or
ordinance, any order of any court or governmental entity, or any building restrictions or
governmental requirements affecting the Owner or the Property.
(c) No Violation. The terms and provisions of the Contract Documents, the
execution and delivery of the Contract Documents by the Owner, and the performance by the
Owner of its obligations contained in the Contract, will not and do not conflict with or result in a
breach of or a default under any of the terms or provisions of any other agreement, contract,
covenant or security instrument by which the Owner or the Property is bound.
(d) Other Information. All reports, documents, instruments, information and forms of
evidence which have been delivered to the County in connection with the Owner's application
for LACEP funding are accurate, correct and sufficiently complete to give the County true and
accurate knowledge of their subject matter.
(e) Litigation. There is no litigation, tax claims, actions, proceedings, investigations
or other disputes pending or threatened against the Owner or the Property which may impair the
Owner's ability to perform its obligations hereunder, or which may impair the County's ability to
levy and collect the Assessment and the Annual Administrative Assessment.
(f) No Event of Default. There is no event which is, or with notice or lapse of time
or both would be, a Default under this Contract.
8. Covenants of the Owner.
The Owner agrees and covenants to each of the following:
(a) Installation and Maintenance of Improvements. The Owner shall, or shall cause
its contractor(s) to, promptly commence the Improvements and diligently continue to completion
in a good and workmanlike manner and in accordance with sound construction and installation
practices. The Owner shall maintain the Improvements in good condition and repair.
(b) Reports. If the Disbursement Amount is disbursed in more than one installment,
the Owner agrees, upon the request of the Program Administrator, to promptly deliver or cause
to be promptly delivered to the Program Administrator a written status report of the
Improvements, including the acquisition and installation thereof.
(c) Compliance with Law and Agreements. The Owner shall complete all
Improvements, or cause the Improvements to be completed, in conformity with all applicable
laws, including all applicable federal, state, and local occupation, safety and health laws, rules,
regulations, standards, and recorded instruments, covenants or agreements affecting the Property.
The Owner shall comply with and keep in effect all permits, licenses, and approvals required to
complete installation of the Improvements.
(d) Completion of Work. If the Disbursement Amount is disbursed in more than one
installment, subject to any acceptable excuse for failure to complete the Improvements pursuant
to Section 13(g) hereof, the Owner shall complete the Improvements within [time
period] of the initial disbursement of the Disbursement Amount.
(e) Site Visits; Utility Records; Surveys. For purposes of examining the
workmanship of the Improvements, observing the quality of the Improvements and otherwise
evaluating LACEP, the Owner grants the County, its agents and representatives, including
without limitation the Program Administrator, the right to enter and visit the Property at any
reasonable time, after giving reasonable notice to the Owner. For purposes of examining savings
derived from the Improvements and other satisfying the requirements relating to grant moneys
used to fund LACEP, the Owner shall also allow the County to examine and copy records and
other documents of the Owner which relate to the Improvements, including utility records of the
Owner and execute any consents, waivers or similar documents required by utility providers in
connection therewith through the term of this Contract. The Owner also agrees to participate in
any and all surveys conducted in connection with LACEP. The County is under no duty to visit
the Property, observe any aspects of the Improvements or examine any records, and the County
shall not incur any obligation or liability by reason of not making any such visit or examination.
Any site visit, observation or examination by the County shall be solely for the purposes of
protecting the County's rights under the Contract Documents.
(f) Protection Against Lien Claims. The Owner shall promptly pay or otherwise
discharge any claims and liens for labor done and materials and services furnished to the
Property in connection with the Improvements. The Owner shall have the right to contest in
good faith any claim or lien, provided that it does so diligently and without delay in completing
the Improvements.
(g) Notice to Successors in Interest. The Owner agrees to provide written notice to
any subsequent purchaser of the Property that the Property is subject to an LACEP assessment
lien, and to provide any subsequent purchaser a copy of this Contract.
(h) Insurance. [If the Maximum Disbursement exceeds $ ,] the Owner shall
provide, maintain and keep in force at all times until the Improvements are completed, builder's
all risk property damage insurance on the Property, with a policy limit equal to the amount of the
Maximum Disbursement.
(i) Notices. The Owner shall promptly notify the County in writing of any Default
under this Contract, or any event which, with notice or lapse of time or both, would constitute a
Default hereunder.
9. Mechanic's Lien and Ston Notices.
In the event of the filing of a stop notice or the recording of a mechanic's lien pursuant to
applicable law of the State of California and relating to the Improvements, the Program
Administrator may refuse to disburse any funds to the Owner, and, in the event the Owner fails
to furnish the Program Administrator a bond causing such notice or lien to be released within _
( ) days of notice from the Program Administrator to do so, such failure shall at the option of
the County constitute a default under the terms of this Contract. The Owner shall promptly
deliver to the Program Administrator copies of all such notices or liens.
10. Responsibilities of the Owner, Indemnification.
(a) Financing by County; No Responsibility for Improvements. The Owner
acknowledges that the County has established LACEP solely for the purpose of assisting the
owners of property in the County with the financing of the acquisition, construction, and
installation of qualifying renewable energy systems and energy and water efficiency
improvements. LACEP is a financing program only. None of the County, the Authority (if
bonds are issued by the Authority), their officials, agents, employees, attorneys and
representatives, the Program Administrator, or LACEP staff is responsible for selection,
management or supervision of the Improvements or of the Improvements' performance.
(b) Indemnification. The Owner shall indemnify, defend, protect, and hold harmless
the County, the Authority (if bonds are issued by the Authority) and any and all officials, agents,
employees, attorneys and representatives of the County and the Authority (collectively, the
"Indemnified Parties") and, if the Property is located in an incorporated area, such incorporated
city and any and all officials, agents, employees, attorneys and representatives of such city,(the
"City Parties"), from and against all losses, liabilities, claims, damages (including consequential
damages), penalties, fines, forfeitures, costs and expenses (including all reasonable out-of-pocket
litigation costs and reasonable attorneys' fees) and any demands of any nature whatsoever
related directly or indirectly to, or arising out of or in connection with, (i) the Contract
Documents, (ii) disbursement of the Disbursement Amount, (iii) the Improvements, (iv) any
breach or Default by the Owner under the Contract Documents, (v) the levy and collection of the
Assessment and the Annual Administrative Assessment, (vi) the imposition of the lien of the
Assessment and the Annual Administrative Assessment, (vii) any breach or failure of the Owner
or its contractor(s) or agents to comply with all applicable laws, including all applicable federal,
state and local occupation, safety and health laws, rules, regulations and standards, in connection
with the acquisition, installation or completion of the Improvements, and (viii) any other fact,
circumstance or event related to the County's payment of the Disbursement Amount to the
Owner or the Owner's performance of its obligations under the Contract Documents
(collectively, the "Liabilities"), regardless of whether such Liabilities shall accrue or are
discovered before or after the Disbursement.
(c) Survival of Indemnification. The indemnity obligations described in Section 10(b)
shall survive the disbursement of funds to the Owner, the payment of the Assessment in full, the
transfer or sale of the Property by the Owner and the termination of this Contract.
11. Waiver of Claims.
For and in consideration of the County's execution and delivery of this Contract, the
Owner, for itself and for its successors -in -interest to the Property and for any one claiming by,
through, or under the Owner, hereby waives the right to recover from and fully and irrevocably
releases the Indemnified Parties and, if the Property is located in an incorporated area, the City
Parties, from any and all claims, obligations, liabilities, causes of action, or damages, including
attorneys' fees and court costs, that the Owner may now have or hereafter acquire against any of
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the Indemnified Parties and the City Parties and accruing from or related to (i) the Contract
Documents, (ii) the disbursement of any of the Disbursement Amount, including any amounts
advanced hereunder, (iii) the levy and collection of the Assessment and the Annual
Administrative Assessment, (iv) the imposition of the lien of the Assessment, (v) the issuance
and sale. of any bonds or other evidences of indebtedness, or other financial arrangements entered
into by the County pursuant to LACEP, (vi) the performance of the Improvements, (vii) the
Improvements, (viii) any damage to or diminution in value of the Property that may result from
construction or installation of the Improvements, (ix) any personal injury or death that may result
from the construction or installation of the Improvements, (x) the selection of manufacturer(s),
dealer(s), supplier(s), contractor(s) and/or installer(s), and their action or inaction with respect to
the Improvements, (xi) the merchantability and fitness for any particular purpose, use or
application of the Improvements, (xii) the amount of energy savings resulting from the
Improvements, (xiii) the workmanship of any third parties, and (xiv) any other matter with
respect to LACEP. This release includes claims, obligations, liabilities, causes of action, and
damages of which the Owner is not presently aware or which the Owner does not suspect to exist
which, if known by the Owner, would materially affect the Owner's release of the Indemnified
Parties and the City Parties.
OWNER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR
WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542
("SECTION 1542"), WHICH IS SET FORTH BELOW:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR."
BY INITIALING BELOW, OWNER HEREBY WAIVES THE PROVISIONS OF
SECTION 1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE
SUBJECT OF THE FOREGOING WAIVERS AND RELEASES.
Owner's Initials:
The waivers and releases by the Owner contained in this Section 11 shall survive the
disbursement of the Disbursement Amount, the payment of the Assessment in full, the transfer or
sale of the Property by the Owner, and the termination of this Contract.
12. Further Assurances.
The Owner shall execute any further documents or instruments consistent with the terms
of this Contract, including documents and instruments in recordable form, as the County shall
from time to time find necessary or appropriate to effectuate its purposes in entering into this
Contract and disbursing funds to the Owner.
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13. Events of Default.
(a) Default. Subject to the further provisions of this Section 13, the failure of any of
the Owner's representations or warranties to be correct in all material respects, or the failure or
delay by the Owner to perform any of its obligations under the terms or provisions of the
Contract Documents, shall constitute a default hereunder ("Default").
(b) Notice of Default. Upon the occurrence of a Default, prior to exercising any
remedies under the Contract Documents or the Act, the County shall give written notice of
default to the Owner. Delay in giving such notice shall not constitute a waiver of any Default.
The Owner must immediately commence to cure, correct, or remedy such failure or delay and
shall complete such cure, correction or remedy with reasonable diligence, but in any event,
within the time set forth herein.
(c) Cue Period for Monetary Default. If the Owner fails to timely pay any
installment of the Assessment or the Annual Administrative Assessment, the Owner shall have a
period of (__) days after notice is given pursuant to paragraph (b) above within which
to cure such default. Following such ( ) day period, the County in its sole discretion
may exercise any and all of its available remedies, including its right to foreclose the lien of the
Assessment or the Annual Administrative Assessment pursuant to applicable law.
(d) Cure Period for Non -Monetary Default. If a non -monetary Default occurs and
such Default is reasonably capable of being cured within (__) days, the Owner shall
have such period to effect a cure prior to exercise of remedies by the County under the Contract
Documents or the Act. If the Default is such that it is reasonably capable of being cured but not
within such (__) day period and the Owner (i) initiates corrective action within such
(__) day period, and (ii) diligently, continually, and in good faith works to effect a cure
as soon as possible, then the County in its sole discretion may elect to grant the Owner such
additional time as is reasonably necessary to cure the Default prior to exercise of any remedies
by the County. The foregoing notwithstanding, in no event shall the County be precluded from
exercising any of its remedies if the Default is reasonably expected to result in the foreclosure or
forfeiture of the Property, or if the Default is not cured within ( ) days after the first
notice of Default is given.
(e) Remedies Upon Default. Subject to the provisions of paragraphs (b), (c) and (d)
above, if any Default occurs the County may exercise any or all of the rights and remedies
available to it under applicable law, at equity, or as otherwise provided herein. If no
disbursement has occurred hereunder, the County may elect to terminate this Contract and,
except as otherwise expressly provided herein, the parties have no further obligations or rights
hereunder. If the Disbursement Amount has been disbursed in whole or in part, the County may
terminate its obligations to make any further disbursement of the Disbursement Amount and
exercise any or all of the rights and remedies available to it under this Contract and applicable
law. As a cumulative remedy, if any installment of the Assessment and the Annual
Administrative Assessment, together with any penalties, costs, fees, and other charges, accruing
under applicable taxation provisions are not paid when due, the Board of Supervisors or its
designee may order that the same be collected by an action brought in a court of competent
jurisdiction to foreclose the lien of the Assessment and the Annual Administrative Assessment to
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the extent permitted, and in the manner provided by, applicable law. Any and all costs and
expenses incurred by the County in pursuing its remedies hereunder shall be additional
indebtedness of the Owner to the County.
(f) Remedies Cumulative. Except as otherwise expressly stated in this Contract or as
otherwise provided by applicable law, the rights and remedies of the County are cumulative, and
the exercise of one or more of such rights or remedies shall not preclude the exercise by the
County, at the same time or different times, of any other rights or remedies for the same Default
or any other Default. No failure or delay by the County in asserting any of its rights and
remedies as to any Default shall operate as a waiver of any Default or of any such rights or
remedies, or deprive the County of its rights to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or remedies.
(g) Force Majeure. Performance of the covenants and conditions imposed upon the
Owner hereunder with respect to the commencement and completion of the Improvements shall
be excused while and to the extent that, the Owner, through no fault or negligence of its own, is
prevented from complying therewith by war, riots, strikes, lockouts, action of the elements,
accidents, or acts of God beyond the reasonable control of the Owner; provided, however, that as
soon as the cause or event preventing compliance is removed or ceases to exist the obligations
shall be restored to full force and effect and the Owner shall immediately resume installation of
the Improvements.
14. Severability.
Each and every provision of this Contract is, and shall be construed to be, a separate and
independent covenant and agreement. If any term or provision of this Contract or the application
thereof shall to any extent be held to be invalid or unenforceable, the remainder of this Contract,
or the application of such term or provision to circumstances other than those to which it is
invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Contract shall, be valid and shall be enforced to the extent permitted by law.
15. Notices.
All notices and demands shall be given in writing by first class mail, postage prepaid, or
by personal delivery (by recognized courier service). Notices shall be considered given upon the
earlier of (a) personal delivery or (b) _ (_) business days following deposit in the United States
mail, postage prepaid. Notices shall be addressed as provided below for the respective party;
provided that if any parry gives notice in writing of a change of name or address, notices to such
party shall thereafter be given as demanded in that notice:
To the County:
Attention: Program Administrator
To the Owner:
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Attention:
Notwithstanding anything set forth above, after disbursement of funds to the Owner, all
notices regarding the assessment shall be sent only as provided by the laws of the State of
California.
16. No Waiver.
No disbursement of the Disbursement Amount based upon inadequate or incorrect
information shall constitute a waiver of the right of the County to receive a refund thereof from
the Owner. No disbursement of any portion of the Disbursement Amount shall constitute a
waiver of any conditions to the County's obligation to make further disbursements. No waiver
by the County of any failure by the Owner to comply with any provision of this Contract shall in
any way preclude the County from thereafter declaring such failure by the Owner a Default
hereunder or be deemed a waiver of any other or subsequent Default.
17. Governine Law.
This Contract shall be construed and governed in accordance with the laws of the State of
California.
18. Assignment by the Countv.
The County, at its option, may (i) assign any or all of its rights and obligations under this
Contract, and (ii) pledge and assign its right to receive the Assessment and the Annual
Administrative Assessment, and any other payments due to the County hereunder, without
obtaining the consent of the Owner.
19. Assignment by Owner Prohibited.
The Owner may sell, transfer, rent or otherwise dispose of all or a portion of its interests
in the Property so long as the Assessment and the Annual Administrative Assessment, including
each installment thereof and the interest and penalties thereon, shall constitute a lien against the
Property until the same is paid in full. All other dispositions of all or a portion of the Owner's
rights and obligations under this Contract are subject to the prior express written consent of the
County, which consent may be granted or withheld in the sole and absolute discretion of the
County.
20. Carbon Credits.
The Owner agrees that any carbon credits attributable to the Improvements shall be held
on behalf of LACEP by the County.
-14-
21. Entire Agreement: Amendment.
This Contract, together with the other Contract Documents, is the entire agreement
between the parties. Any other agreement related to the Improvements, and any amendment to
this Contract, must be signed in writing by both parties.
22. Natural Persons.
If the Owner of the Property consists of more than one natural person, the obligations
hereunder of all the owners shall be joint and several.
23. Counterparts.
This Contract may be executed in several counterparts, each of which shall be deemed an
original, and all of such counterparts together shall constitute one and the same instrument.
24. Special Termination.
Notwithstanding anything to the contrary contained herein, this Contract shall terminate
and be of no further force or effect if the Owner has submitted to the Program Administrator a
notice of its decision to cancel this transaction in the form of the Notice of Cancellation attached
as Exhibit J hereto, which notice shall be delivered to the County pursuant to Section 15 hereof
no less than (__) days prior to the disbursement of the Disbursement Amount.
25. No Third Party Beneficiary Rights.
This Contract is entered into for the sole benefit of the Owner and the County and,
subject to the provisions of Sections 10, 11, 12 and 19, no other parties are intended to be direct
or incidental beneficiaries of this Contract and no third party shall have any right in, under or to
this Contract.
IN WITNESS WHEREOF, the Owner and the County have entered into this Contract as
of the date and year first above written.
THE OWNER: THE COUNTY:
COUNTY OF LOS ANGELES, CALIFORNIA
Date of Execution by the Owner: Name:
Title:
-15-
ACKNOWLEDGEMENT(S)
STATE OF CALIFORNIA
ss.:
COUNTY OF
On , before me,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
STATE OF CALIFORNIA
ss.:
COUNTY OF
On , before me,
a notary public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(This area for official notarial seal)
EXHIBIT A
PARTICIPANT HANDBOOK
[To Come]
A-1
CERTAIN FINANCING TERMS
Maximum Disbursement Amount:
Contract Term:
Maximum Interest Rate: — Percent C2%) per annum.
Financing Costs in the Event of Noncompletion;
Annual Administrative Assessment(":
Prepayment Premium: From to a prepayment premium of_ percent L%)
From to a prepayment premium of _ percent%)
After , a prepayment premium of _ percent C2%)
Improvements:
Estimated Payment Schedule:
Assessment Maximum
Annual
Disbursement Financing Administrative
Year") Amount (3) Costs (4) Interest Assessment(5) Total
"' Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
t`� If funds are disbursed to the Owner before the assessment will appear on the property tax bill for the
same tax year. If funds are disbursed after , the assessment will appear on the property tax bill for the
following tax year.
(3) Based on Maximum Disbursement. Subject to revision by the Program Administrator following the
disbursement of the Disbursement Amount, if necessary, pursuant to the Contract to reflect the Disbursement
Amount.
(4) Includes capitalized LACEP administrative expenses.
(5) Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
mm
EXHIBIT C
DESCRIPTION OF THE PROPERTY
C-1
EXHIBIT D
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE OF INTEREST AND PAYMENT SCHEDULE
Owner:
Address:
Assessor's Parcel Number:
LACEP Loan Number:
(the "Owner")
"Property")
Pursuant to Section l(b)(ii) of that certain Assessment Contract (the "Assessment
Contract") executed by and between you, as Owner of the Property, and the County in
connection with the Los Angeles County Energy Program, you are hereby notified that the
interest rate applicable to the unpaid Assessment (as defined in the Assessment Contract) is
_%. The schedule of Assessment Installments, interest thereon and the Maximum Annual
Administrative Assessment with respect to the referenced property is set forth below:
Assessment
Disbursement Financing
Year"' Amount costs (2) Interest
Maximum
Annual
Administrative
Assessment(3)
Total
19 If funds are disbursed to the Owner before , the assessment will appear on the property tax bill for
the same tax year. If funds are disbursed the assessment will appear on the property tax bill for the
following tax year.
' Includes capitalized LACEP administrative expenses.
(a� Based on the Maximum Annual Administrative Assessment established for LACEP, which amount may be
adjusted from time to time by the Program Administrator, provided that the adjusted amount does not exceed
the Maximum Annual Administrative Assessment.
The Notice of Assessment of record with the Office of the Registrar-Recorder/County
Clerk of the County of Los Angeles will be amended to reflect the foregoing payment schedule.
Program Administrator,
Los Angeles County Energy Program
D-1
EXHIBIT E
NOTICE OF ASSESSMENT
WHEN RECORDED RETURN TO
County of Los Angeles
Treasurer and Tax Collector
Kenneth Hahn Hall of Administration
500 West Temple Street, Room 437
Los Angeles, California 90012
Attention: Los Angeles County Energy Program
— Program Administrator
NOTICE OF ASSESSMENT
Pursuant to the requirements of Section 5898.32 of the Streets and Highways Code of the State
of California, the undersigned Clerk of the Board of Supervisors (the `Board of Supervisors") of
the County of Los Angeles, a political subdivision of the State of California (the "County"),
hereby gives notice that contractual assessments relating to that certain real property described in
Annendix A hereto (the "Property"), in the amounts set forth in Appendix B hereto, were
recorded in the Office of the Registrar-Recorder/County Clerk of the County, as provided for in
said Section 5898.32.
Pursuant to that certain Assessment Contract (the "Assessment Contract") by and between the
County and the owner of the Property named herein in connection with the Los Angeles County
Energy Program, the several assessments assessed on the Property set forth in AApendix B hereto
became a lien upon the Property and the Property became subject to the assessment in
accordance pursuant to the Assessment Contract, the Act and applicable law upon the execution
of such Assessment Contract.
In addition to the assessment to pay the costs and expenses of the improvements to be acquired,
the Property is subject to a separate and additional assessment, as set forth in Appendix B hereto,
to be levied annually to pay for costs not otherwise reimbursed which will result from the
administration and collection of assessments or from the administration or registration of any
associated bonds and reserve or related funds.
Reference is made to the Assessment Contract for the amount of any final and adjusted
assessments, including any annual assessment as levied for administrative costs or maintenance,
as applicable.
E-1
Included in AMendix A hereto is the name(s) of the owner of record of the Property, which is
also the assessed owner of the Property as it appears on the latest secured assessment roll, all as
required pursuant to Section 27288.1 of the Government Code of the State of California.
Dated:
Clerk of the Board of Supervisors of the
County of Los Angeles
Deputy
E-2
Appendix A to Notice of Assessment
DESCRIPTION OF THE PROPERTY
E-3
Name(s) of Owner of the Property:
Assessment
Annual Administrative Assessment Amount:
E-4
Appendix B to the Notice of Assessment
EXHIBIT F
Payment of Contractual Assessment Required
Pursuant to the requirements of Section 5898.24(d) of the Streets and Highways Code of
the State of California, the Board of Supervisors (the `Board of Supervisors") of the County of
Los Angeles, a political subdivision of the State of California (the "County"), hereby gives
notice that the real property described in Appendix A hereto (the "Property") is subject to a
contractual assessment that is required to be paid in accordance with that certain Assessment
Contract (the "Assessment Contract") by and between the owner of the Property and the County
in connection with the Los Angeles County Energy Program. Certain information regarding the
contractual assessment assessed on the Property is set forth below.
(1) The names of all current owners of the real property subject to the contractual
assessment:
(2) Legal description of the Property: See Exhibit Appendix A attached hereto and
incorporated herein by this reference.
(3) Assessor's parcel number for the Property:
(4) The annual amount of the contractual assessment:
(5) The contractual assessment referenced (4) above expires on the date such contractual
assessment and any applicable penalties, costs, fees, and charges, including the Annual
Administrative Assessment (as defined in the Assessment Contract), have been paid in
full.
(6) Funds from the contractual assessment were used to finance the acquisition and
construction on and installation in the Property of certain qualifying renewable energy
systems and energy and water efficiency improvements, as further described in the
Assessment Contract.
(7) Funds from the contractual assessment should be paid to the following:
[Name of entity to which contractual assessments should be paid]
[Address of entity]
[Contact person]
Section.5898.24(d)(2XE) of the Act requires the document to include "the entity to which funds from the
contractual assessment will be paid and specific contact information for that entity".
F-1
Date:
Treasurer and Tax Collector of the
County of Los Angeles [or Entity to which
Contractual Assessments will be paid]
Name:
Title:
Section 5898.24(d)(2)(F) of the Act requires the document to include "the signature of the authorized
representative of the legislative body to which funds from the contractual assessment will be paid."
F-2
Appendix A to Notice of Payment of Contractual Assessment Required
DESCRIPTION OF THE PROPERTY
F-3
EXHIBIT G
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE TO PROCEED
Date:
Owner:
Address:
Assessor's Parcel Number:
LACEP Loan Number:
(the "Owner")
(the "Property")
Pursuant to Section 4(a) of that certain Assessment Contract (the "Assessment Contract")
executed by and between you, as Owner of the Property, and the County in connection with the
Los Angeles County Energy Program, you are hereby given notice to proceed (this "Notice to
Proceed") with acquisition, construction and installation of the Improvements and, upon
completion of the Improvements, submit a request for funding to LACEP. This Notice to
Proceed constitutes consent and authorization pursuant to Section 5898.21 of the Act for the
Owner to purchase directly the related equipment and materials for the Improvements and to
contract directly for the construction on and/or installation in the Property of the Improvements.
The Owner must complete installation of the Improvements no later than T days after the date
of this Notice to Proceed, provided that the Owner and the Program Administrator may agree to
an extension of this completion date for good cause shown pursuant to Section 4(b) and Section
13(g) of the Assessment Contract, but in no event shall the completion date be more than one
year from the date of this Notice to Proceed. Disbursement of any amounts pursuant to the
Assessment Contract is subject to satisfaction of the terms and conditions thereof.
Program Administrator,
Los Angeles County Energy Program
G-1
EXHIBIT H
NOTICE OF PROPOSED CONTRACTUAL ASSESSMENT
(Commercial Property Owner)
Notice Date:
Lender Address
Property/Loan Information:
Owner:
Address:
APN:
Loan Number(s):
To Whom It May Concern
The undersigned (the "Owner") is the owner of a certain real property located at the
above -referenced address (the" t "). You are the lender (the "Lender") with respect to the
above -referenced (the "Loan") that is secured by a lien on the Property.
The Owner is sending this Notice of Proposed Contractual Assessment to Lender to
(i) provide notice of the Owner's proposed participation in the Los Angeles County Energy
Program ("LACEP"), (ii) request confirmation from the Lender that the levy of the contractual
assessment pursuant to the herein described Assessment Contract will not trigger an event of
default or the exercise of any remedies under the Loan documents, and (iii) provide notice that
the contractual assessment (including any penalties and interest) will be secured by a statutory
lien on the Property that is senior to the lien securing the Loan.
Background. The County of Los Angeles, a political subdivision of the State of
California (the "County") has established LACEP to help finance the acquisition and
construction on and installation in the assessed properties, including the Property, of certain
qualifying renewable energy systems and energy and water efficiency improvements (the
"Improvements") pursuant to Chapter 29 of Part 3 of Division 7 of the Streets & Highways Code
of the State of California ("Contractual Assessment Law").
In accordance with Contractual Assessment Law, the County will levy a contractual
assessment to finance the installation of the Improvements on certain property with the
agreement of the applicable property owner pursuant to the terms of an assessment contract (the
"Assessment Contract") between such property owner and the County. Pursuant to Section
5898.30 of Contractual Assessment Law, the contractual assessment (including any penalties and
interest) is collected on the property tax bill and is secured by a lien on the applicable property
H-1
that is (i) senior to all private liens, including private liens that existed prior to levy of the
contractual assessment and (ii) cannot be subordinated to the private liens.
Information regarding the purpose and method of administration of the assessments under
LACEP can be found at [website].
Participation in LACEP. The Owner has applied to participate in LACEP and intends to
fmance installation on the Property of the Improvements set forth on Exhibit A hereto. The
contractual assessment to be levied on the Property (the "Contractual Assessment') pursuant to
the Assessment Contract and the related payment terms are proposed to consist of the following:
Principal amount: $
Estimated interest rate: %
Term of repayment period:
Annual administrative component:
Total estimated annual installment:
Lender Approval. Please acknowledge that participation of the Property in LACEP is
acceptable to the Lender by executing the attached Certificate of Lender and returning it to the
undersigned at your earliest convenience.
Very truly yours,
(Signature)
OWNER
NAME:
MAILING ADDRESS (if different than
Property address):
H-2
EXHIBIT I
CERTIFICATE OF LENDER
(Commercial Property Owner)
Property/Loan Information
Owner:
Address:
APN:
Loan:
In connection with the above -referenced loan (the "Loan") relating to the above -
referenced property (the "Property") by the herein referenced lender (the "Lender"), the
undersigned hereby certifies, acknowledges, confirms and agrees as follows:
(1) He/she is duly authorized to execute this Certificate on behalf of the Lender.
(2) The Lender is in receipt of written notice (the "Notice") from the owner of the
Property (the "Owner") that Owner intends to finance installation on the Property
of certain renewable energy, energy efficiency and/or water efficiency
improvements that will be permanently fixed to the Property (the
"Improvements") by participating in the Los Angeles County Energy Program
sponsored by the County of Los Angeles, a political subdivision of the State of
California (the "Coon 1).
(3) As a result of an Assessment Contract between the County and the Owner (the
"Assessment Contract") and pursuant to Chapter 29 of Part 3 of Division 7 of the
Streets and Highways Code of the State of California, the Contractual Assessment
described in the Notice will be levied on the Property and the Contractual
Assessment (including any penalties and interest) will be secured by a statutory
lien that is senior to the lien securing the Loan.
(4) The Lender consents to the levy of the Contractual Assessment pursuant to the
Assessment Contract.
(5) The Lender agrees that the levy of the Contractual Assessment will not constitute
an event of default or the exercise of any remedies under the documents relating
to the Loan.
I-1
The Lender further acknowledges that the Owner and the County will rely on this
Certificate in connection with the disposition and administration of the Assessment Contract and
the Los Angeles County Energy Program.
[LENDER]
Name:
Title:
Date:
I-2
EXHIBIT J
LOS ANGELES COUNTY ENERGY PROGRAM
NOTICE OF CANCELLATION
[and 1 are the owner[s] of record
([collectively,] the "Owner") of that certain real property located at
located in the County of Los Angeles, California. The
Owner previously executed that certain Assessment Contract (the "Assessment Contract") with
the County of Los Angeles (the "County") in connection with the Los Angeles County Energy
Program ("LACEP"). Pursuant to the Assessment Contract, Owner hereby notifies the LACEP
Program Administrator in accordance with Sections 15 and 24 of the Assessment Contract no
less than (_) days prior to the disbursement of the Disbursement Amount that the
Owner has determined to cancel the transaction described in the Assessment Contract.
Accordingly, the Contract shall terminate and be of no further force or effect, except that the
Owner agrees to pay amounts due, if any, pursuant to Section 1(b)(iv) of the Assessment
Contract relating to financing costs in the event of the improvements are not completed.
Dated:
[OWNER]
M
By:
Name:
J-1
attachment 3
A RESOLUTION OF THE BOARD OF SUPERVISORS
AUTHORIZING THE ESTABLISHMENT OF A SPECIAL
FUND FOR THE LOS ANGELES COUNTY ENERGY
PROGRAM, THE ISSUANCE AND SALE OF BONDS AND
THE EXECUTION AND DELIVERY OF CERTAIN
DOCUMENTS IN CONNECTION WITH THE LOS ANGELES
COUNTY ENERGY PROGRAM, AND AUTHORIZING A
VALIDATION ACTION AND CERTAIN ACTIONS RELATED
THERETO
WHEREAS, Chapter 29 of Part 3 of Division 7 of the Streets and Highways Code of the
State of California (the "Contractual Assessment Law") authorizes counties to assist free and
willing property owners in financing the installation of distributed generation renewable energy
sources and energy and water efficiency improvements (the "Improvements") that are
permanently fixed to residential, commercial, industrial or other real property through a
contractual assessment program; and
WHEREAS, the Board of Supervisors (the `Board of Supervisors") of the County of Los
Angeles, a political subdivision of the State of California (the "County"), previously approved a
resolution (the "Resolution of Intention") declaring its intention to order the implementation of a
contractual assessment program to finance Improvements pursuant to the Contractual
Assessment Law; and
WHEREAS, following notice duly given and a hearing in accordance with applicable
law, the Board of Supervisors approved a resolution (the "Resolution Establishing the LACEP")
which, among other things, authorized the establishment of the Los Angeles County Energy
Program (the "LACEP") to finance the acquisition, construction and installation of the
Improvements on properties in the County through the use of contractual assessments pursuant to
the Contractual Assessment Law; and
WHEREAS, pursuant to LACEP, the County will enter into contractual assessment
agreements (each, an "Assessment Contracn with free and willing property owners (the
"Property Owners") pursuant to which the County will assist in financing the acquisition,
construction and installation of Improvements on or in such owners' respective properties and
levy contractual assessments (each, an "Assessment") on the applicable properties in the
amounts set forth in the Assessment Contracts; and
WHEREAS, the County desires to finance the disbursement of amounts pursuant to the
Assessment Contracts through the issuance of contractual assessment limited obligation
improvement bonds (the "County Assessment Bonds") from time to time in one or more series
under and pursuant to the Contractual Assessment Law and The Improvement Bond Act of 1915,
being Division 10 of the Streets and Highways Code of the State (the "1915 Act"); and
WHEREAS, the Los Angeles County Public Works Financing Authority (the
"Authority") may, in accordance with Articles 1 through 4 (commencing with Section 6500) of
the Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (as
amended, the "JPA Act"), issue revenue bonds for the purpose of providing financial assistance
to its contracting parties, including through the acquisition of County Assessment Bonds; and
1
WHEREAS, the County Assessment Bonds may be sold by a negotiated sale or by
competitive bid or acquired by the Authority in accordance with the JPA Act, all as may be
determined as being in the bests interests of the County; and
WHEREAS, the County also desires to finance the disbursement of amounts pursuant to
the Assessment Contracts through the execution and delivery of one or more Loan Agreements
(each, a "Loan Agreement") with the Authority; and
WHEREAS, the Authority may fund loans under the Loan Agreements (the "Loans")
with proceeds of revenue bonds to be issued by the Authority pursuant to the JPA Act; and
WHEREAS, the Board of Directors (the `Board of Directors") of the Authority will
approve a resolution (the "Authority Resolution") authorizing the issuance of its Los Angeles
County Energy Program Contractual Assessment Revenue Bonds (the "Authority Revenue
Bonds" and, together with the County Assessment Bonds, the "Bonds") from time to time in one
or more series for the purpose of acquiring County Assessment Bonds or funding Loans to the
County, as applicable, in each case to finance disbursements to free and willing property owners
to finance the Improvements pursuant to LACEP and the Assessment Contracts; and
WHEREAS, in furtherance of LACEP and in order to effect the issuance and
administration of the Bonds and any other evidence of indebtedness relating to LACEP, the
County desires to establish a special fund to be held by the County called the "Energy Fund';
and
WHEREAS, in order to effect the issuance of the Bonds, the County desires to approve
the form of and authorize the execution and delivery of the following documents, the forms of
which are on file with the Clerk of the Board of Supervisors (the "Clerk of the Board of
Supervisors"):
(1) an indenture (the "County Indenture") by and among the County, the Treasurer
and Tax Collector of the County, as paying agent thereunder, and the Auditor -Controller of the
County, as fiscal agent thereunder, pursuant to which the County will issue one or more series of
County Assessment Bonds;
(2) an indenture (the "Marks -Roos Indenture") by and among the Authority, the
Treasurer and Tax Collector of the County, as paying agent thereunder, and the Auditor -
Controller of the County, as fiscal agent thereunder, pursuant to which the Authority will issue
one or more series of Authority Revenue Bonds, the proceeds of which will be used to, acquire
County Assessment Bonds;
(3) a Loan Agreement by and between the County and the Authority pursuant to
which the Authority agrees to lend to the County proceeds of certain Authority Revenue Bonds
to finance Improvements under the Assessment Contracts; and
(4) an indenture (the "Authority Indenture" and, together with the County Indenture
and the Marks -Roos Indenture, the "Indentures") by and among the Authority, the County, the
Treasurer and Tax Collector of the County, as paying agent thereunder, and the Auditor -
Controller of the County, as fiscal agent thereunder, pursuant to which the Authority will issue
2
one or more series of Authority Revenue Bonds, the proceeds of which will be used to finance
Loans under the Loan Agreements; and
WHEREAS, the Board of Supervisors desires to provide for the issuance of additional
County Assessment Bonds and additional Authority Revenue Bonds (collectively the
"Additional Bonds") from time to time in one or more series under the County Indenture, the
Marks -Roos Indenture, the Authority Indenture or any other instrument for the issuance of
evidences of indebtedness secured by contractual assessments or secured by debt obligations that
are in tum secured by contractual assessments (the "Additional Issuance Instruments") and the
authorization of any attendant issuance documents in connection with such issuance; and
WHEREAS, the Board of Supervisors desires to cause the filing of an action to determine
the validity of the Assessments, the Assessment Contracts, the Indentures, the Bonds, the
Additional Bonds, the Additional Issuance Instruments, this Resolution, the Resolution
Establishing the LACEP, the Authority Resolution, the Loans and the Loan Agreements, and the
actions proposed to be taken in connection therewith;
NOW, THEREFORE, THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS
ANGELES DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Recitals. The recitals set forth hereinabove are true and correct in all
respects. The Board of Supervisors hereby finds and declares that the issuance of the Bonds in
one or more series and the other actions contemplated by this Resolution are in the best interests
of the County.
Section 2. Energy Fund. The Board of Supervisors hereby establishes a special fund
to be held in trust by the County called the "Energy Fund" and a fund within the Energy Fund
called the "Program Expense Fund." Moneys in the Energy Fund and the funds and accounts
therein shall be used and disbursed for the purpose of funding the Loans and administering
LACEP. The Energy Fund may be subdivided into funds, accounts and sub -accounts as
necessary or desirable for the administration of funds as contemplated in connection with
issuance of one or more series of Bonds.
Section 3. Approval of the Bonds. The County hereby approves the initial issuance
of the County Assessment Bonds in an aggregate principal amount of not to exceed
$100,000,000 for the purpose of funding LACEP; provided that the County Assessment Bonds
shall have a final maturity of not to exceed 39 years from the second day of September next
succeeding 12 months from their date of issuance and a true interest cost (including any bond
insurance premiums, if any, and any reserve surety premiums, if any) not greater than the
maximum rate of interest pursuant to applicable law; and provided, further, that the discount on
the purchase price of the County Assessment Bonds to the underwriter for the County
Assessment Bonds, if any, excluding original issue discount shall not exceed 2.0% of the
aggregate principal amount of the County Assessment Bonds. The County Assessment Bonds
may be sold by a negotiated sale or by competitive bid or acquired by the Authority in
accordance with the JPA Act, all as may be determined as being in the bests interests of the
County, and the County Assessment Bonds may be secured or payable by a bank line of credit,
letter of credit or other instrument, all as may be determined by either the Chief Executive
3
Officer or the Treasurer and Tax Collector of the County for and in the name and on behalf of
the County.
The County hereby approves the initial issuance by the Authority of the Authority
Revenue Bonds in an aggregate principal amount of not to exceed $100,000,000 for the purpose
of funding LACEP; provided that the Authority Revenue Bonds shall have a final maturity of not
to exceed 39 years from the second day of September next succeeding 12 months from their date
of issuance and a true interest cost (including any bond insurance premiums, if any, and any
reserve surety premiums, if any) not greater than the maximum rate of interest pursuant to
applicable law; and provided, firther, that the discount on the purchase price of the Authority
Revenue Bonds to the underwriter for the Authority Revenue Bonds, if any, excluding original
issue discount shall not exceed 2.0% of the aggregate principal amount of the Authority Revenue
Bonds. The Authority Revenue Bonds may be sold by a negotiated sale or by competitive bid
and the Authority Revenue Bonds may be secured or payable by a bank line of credit, letter of
credit or other instrument, all as may be determined by either the Chief Executive Officer or the
Treasurer and Tax Collector of the County for and in the name and on behalf of the County.
Pursuant to the Marks -Roos Local Bond Pooling Act of 1985, the County hereby finds
and determines that the issuance of the Authority Revenue Bonds will result in significant public
benefits to the citizens of the County within the contemplation of Section 6586 of the Marks -
Roos Local Bond Pooling Act of 1985.
Section 4. Loan Agreement. The form of the Loan Agreement by and between the
County and the Authority, in the form presented at this meeting and on file with the Clerk of the
Board of Supervisors, is hereby approved. Each of the Chair of the Board of Supervisors, the
Chief Executive Officer and the County Treasurer, or any of them, or their designee (each, an
"Authorized Officer"), is hereby authorized and directed, for and in the name and on behalf of
the County, to execute and deliver the Loan Agreements in substantially said form, with. such
changes therein as may be requested by bond counsel and as the Authorized Officer executing
the same may approve (such approval to be conclusively evidenced by such Authorized Officer's
execution and delivery thereof).
Section 5. Indentures. The forms of the Indentures, in the forms presented at this
meeting and on file with the Clerk of the Board of Supervisors, are hereby approved. The Board
of Supervisors also approves other instruments and funding mechanisms substantially similar to
the Indentures pursuant to which the Authority or the County will issue evidences of
indebtedness secured by voluntary contractual assessments or secured by debt obligations that
are in turn secured by contractual assessments; provided that proceeds of such indebtedness are
used to help finance Loans under LACEP or acquire County Assessment Bonds, the proceeds of
which will be used to finance Improvements under LACEP. Each Authorized Officer, acting
singly, is authorized and directed, for and in the name and on behalf of the County, to execute
and deliver the Indentures in substantially said forms, with such changes therein as may be
requested by bond counsel and as the officer executing the same may require or approve,
including such matters as are authorized by Section 3 hereof (such approval to be conclusively
evidenced by such Authorized Officer's execution and delivery thereof).
Section 6. Validation. The Authorized Officers are, and each of them hereby is
authorized, in consultation with County Counsel and with the assistance of bond counsel, to
4
prepare and cause to be filed and prosecuted to completion all proceedings required for the
judicial validation of the Assessments, the Assessment Contracts, the Indentures, the Bonds, the
Additional Bonds, the Additional Issuance Instruments, this Resolution, the Resolution
Establishing the LACED, the Authority Resolution, the Loans, the Loan Agreements and the
Indenture in the Superior Court of Los Angeles County, under and pursuant to the provisions of
Sections 850 et seq. of the California Code of Civil Procedure. The Board of Supervisors further
authorizes the Authorized Officers and all other officers, employees and agents of the County to
take any and all actions, including the execution and delivery or appropriate documentation, as
may be required to conclude such judicial validation proceedings.
Section 7. Other Actions. The Authorized Officers and all other officers of the
County are hereby authorized and directed, jointly and severally, to do any and all acts and
things and deliver any and all documents which they may deem necessary or advisable in order
to effectuate the purposes of this Resolution and all matters incidental thereto, including issuing
the Bonds and entering into Assessment Contracts, and any such actions previously taken by
such officers are hereby ratified and confirmed.
Section 8. Effective Date. This Resolution shall take effect immediately upon
adoption.
The foregoing Resolution was on the day of *V 2010, adopted by the
Board of Supervisors of the County of Los Angeles and ex-offi�o the governing body of all
other special assessment and taxing districts, agencies and authorities for which said Board so
acts.
APPROVED AS TO FORM:
ANDREA SHERIDAN ORDIN
County Counsel
3 ,4
By: i'liv14
,Cammy C. DuPont
Principal Deputy County Counsel
SACHI A. HAMAI
Executive Officer of the
Board of Supervisors of the
County of Los Angeles
Wc.
eputy
HD&W LLP - 5/11/10 Draft
INDENTURE
Dated as of , 2010
by and among
COUNTY OF LOS ANGELES, CALIFORNIA,
TREASURER AND TAX COLLECTOR OF THE COUNTY OF LOS ANGELES
as the Paying Agent
and
AUDITOR -CONTROLLER OF THE COUNTY OF LOS ANGELES
as the Fiscal Agent
Los Angeles County Energy Program
Contractual Assessment Limited Obligation Improvement Bonds, Series A
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; AUTHORIZATION AND PURPOSE OF
BONDS
Section 1.1. Definitions ..................................... ..................2
.........................................................
Section 1.2. Rules of Construction..............................................................................................8
Section 1.3. Authorization and Purpose of Bonds.......................................................................8
ARTICLE II
THE BONDS
Section 2.1. Authorization and Purpose of Bonds; Equality of Bonds; Pledge; Limited
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds...........................................................I6
Section 3.2. Optional Redemption of Series A Bonds...............................................................17
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds....................................17
Section 3.4. Selection of Bonds for Redemption.......................................................................18
Section 3.5. Partial Redemption of Bonds.................................................................................18
Section 3.6. Notice of Redemption............................................................................................18
Section 3.7. Effect of Notice and Availability of Redemption Price.........................................19
Liability....................................................................................................................9
Section 2.2.
Collection of Assessments.......................................................................................9
Section 2.3.
Issuance of Series A Bonds; Description of Series A Bonds...................................9
Section 2.4.
Medium and Payment............................................................................................10
Section 2.5.
Form of Bonds and Certificate of Authentication and Registration ......................11
Section 2.6.
Execution and Authentication ................................ ................................................
I I
Section 2.7.
Registration of Exchange or Transfer....................................................................12
Section 2.8.
Mutilated, Lost, Destroyed or Stolen Bonds..........................................................12
Section 2.9.
Registration Books.................................................................................................12
Section 2.10.
Special Provisions as to Bonds Issued In Book -Entry Form.................................13
Section 2.11.
Validity of the Bonds.............................................................................................14
Section 2.12.
Refunding of Bonds...............................................................................................14
Section 2.13.
Unclaimed Money..................................................................................................15
Section 2.14.
Nonpresentment of Bonds......................................................................................15
Section 2.15.
Additional Bonds...................................................................................................15
Section 2.16.
Restrictions on Transfer of Bonds.........................................................................16
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds...........................................................I6
Section 3.2. Optional Redemption of Series A Bonds...............................................................17
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds....................................17
Section 3.4. Selection of Bonds for Redemption.......................................................................18
Section 3.5. Partial Redemption of Bonds.................................................................................18
Section 3.6. Notice of Redemption............................................................................................18
Section 3.7. Effect of Notice and Availability of Redemption Price.........................................19
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.1.
Establishment of Funds and Accounts...................................................................19
Section 4.2.
Application of Proceeds of the Series A Bonds.....................................................20
Section 4.3.
Improvement Fund.................................................................................................20
Section 4.4.
Debt Service Fund and Accounts...........................................................................20
Section 4.5.
Assessment Prepayments.......................................................................................22
Section 4.6.
Costs of Issuance Fund..........................................................................................22
Section 4.7.
Assessment Bond Reserve Fund............................................................................22
Section 4.8.
Program Expense Fund..........................................................................................24
Section 4.9.
Escrow Fund; Refunding Assessment Bonds........................................................24
Section 4.10.
Investments............................................................................................................25
ARTICLE V
COVENANTS
Section 5.1.
Compliance with Indenture....................................................................................26
Section5.2.
General...................................................................................................................26
Section 5.3.
Punctual Payment...................................................................................................26
Section 5.4.
Extension of Payment of Bonds.............................................................................26
Section 5.5.
Protection of Rights...............................................................................................26
Section 5.6.
Against Encumbrances...........................................................................................26
Section 5.7.
Deferral of Assessments........................................................................................26
Section 5.8.
Accounting Records and Statements.....................................................................27
Section 5.9.
Covenant to Foreclose............................................................................................27
Section 5.10.
Further Assurances.................................................................................................27
ARTICLE VI
PAYING AGENT AND FISCAL AGENT
Section 6.1. Paying Agent and Fiscal Agent..............................................................................28
Section 6.2. Liability of Paying Agent and Fiscal Agent..........................................................28
Section6.3. Compensation........................................................................................................29
ARTICLE VII
SUPPLEMENTAL INDENTURES
Section 7.1. Supplemental Indenture Without Owner Consent.................................................29
Section 7.2. Supplemental Indentures with Owner Consent......................................................29
Section 7.3. Notice of Supplemental Indenture to Owners........................................................30
ii
ARTICLE VIII
DEFAULT
Section8.1. Events of Default...................................................................................................30
Section 8.2. Remedies on Default..............................................................................................31
Section 8.3. Remedies Not Exclusive; Non-Waiver..................................................................31
Section 8.4. Limited Liability of the County to the Owners; No Liability of the County ......... 32
ARTICLE IX
MISCELLANEOUS
Section9.1.
Defeasance.............................................................................................................32
Section 9.2.
Cancellation of Bonds............................................................................................33
Section 9.3.
Execution of Documents and Proof of Ownership................................................33
Section 9.4.
Provisions Constitute Contract..............................................................................33
Section 9.5.
Payment on Business Day......................................................................................34
Section 9.6.
Disqualified Bonds.................................................................................................34
Section9.7.
Severability............................................................................................................34
Section9.8.
Notice....................:................................................................................................34
Section 9.9.
No Personal Liability.............................................................................................35
Section 9.10.
Employment of Agents by the County..................................................................35
Section9.11.
Counterparts...........................................................................................................35
Section9.12.
Headings................................................................................................................35
Section9.13.
Governing Law......................................................................................................35
iii
RZI-60MLI "R
This COUNTY INDENTURE (this "County Indenture'), dated as of 1,
2010, is executed by and among the County of Los Angeles (the "County"), a political
subdivision of the State of California (the "State"), the Treasurer and Tax Collector of the
County, as paying agent (the "Paying Agent") on behalf of the owners of the herein described
Bonds, and the Auditor -Controller of the County, as fiscal agent (the "Fiscal Agent") on behalf
of the owners of the herein described Bonds.
WHEREAS, Chapter 29 of Part 3 of Division 7 of the Streets and Highways Code
of the State of California (the "Contractual Assessment Law") authorizes counties to assist free
and willing property owners in financing the installation of distributed generation renewable
energy sources and energy and water efficiency improvements (the "Improvements") that are
permanently fixed to residential, commercial, industrial or other real property through a
contractual assessment program; and
WHEREAS, the Board of Supervisors (the `Board of Supervisors") of the
County, previously approved a resolution (the "Resolution of Intention") declaring its intention
to order the implementation of a contractual assessment program to finance the acquisition,
construction and installation of the Improvements pursuant to the Contractual Assessment Law;
and
WHEREAS, following notice duly given and a hearing in accordance with
applicable law, the Board of Supervisors approved a resolution which, among other things,
authorized the establishment of the Los Angeles County Energy Program (the "LACEP") to
finance the acquisition, construction and installation of the Improvements on properties in the
County through the use of contractual assessments pursuant to the Contractual Assessment Law;
and
WHEREAS, pursuant to LACEP, the County will enter into contractual
assessment agreements (each, an "Assessment Contract") with free and willing property owners
(the "Property Owners") pursuant to which the County will assist in financing the acquisition,
construction and installation of Improvements on or in such owners' respective properties and
levy contractual assessments (each, an "Assessment") on the applicable properties in the
amounts set forth in the Assessment Contracts; and
WHEREAS, the County will issue Los Angeles County Energy Program
Contractual Assessment Limited Obligation Improvement Bonds (the "New Money Assessment
Bonds") from time to time in one or more series under and pursuant to the Contractual
Assessment Law, The Improvement Bond Act of 1915, being Division 10 of the Streets and
Highways Code of the State (the "1915 Act") and this County Indenture for the purpose of
funding disbursements to free and willing property owners to finance the Improvements pursuant
to LACEP; and
WHEREAS, the County may issue Los Angeles County Energy Program
Contractual Assessment Limited Obligation Improvement Refunding Assessment Bonds (the
"Refunding Assessment Bonds" and, together with the New Money Assessment Bond's, the
"Bonds") from time to time in one or more series under and pursuant to the Contractual
Assessment Law, the 1915 Act and this County Indenture for the purpose of refinancing the
bonds referenced above; and
WHEREAS, in order to provide for the authentication and delivery of the Bonds,
to establish and declare the terms and conditions upon which the Bonds are to be issued and
secured, and to secure the payment of the principal thereof and premium, if any, and interest
thereon, the parties hereto have authorized the execution and delivery of this County Indenture;
and
WHEREAS, all acts, conditions and things required by law to exist, to have
happened and to have been performed precedent to and in connection with the execution and
entering into of this County Indenture do exist, have happened and have been performed in due
time, form, and manner as required by law, and the parties hereto are duly authorized to execute
and enter into this County Indenture;
NOW, THEREFORE, in consideration of the covenants and provisions herein set
forth and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION;
AUTHORIZATION AND PURPOSE OF BONDS
Section 1.1. Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings for purposes of this County Indenture:
"1913 Act" means The Municipal Improvement Act of 1913, being Division 12 of
the Streets and Highways Code of the State.
"1915 Act" means The Improvement Bond Act of 1915, being Division 10 of the
Streets and Highways Code of the State.
"Additional Bonds" means one or more series of bonds issued pursuant to this
County Indenture subsequent to the issuance of the Series A Bonds.
"Administrative Expenses" means (i) the ordinary and necessary costs of
administering the levy and collection of the Assessments and all other administrative costs and
incidental expenses related to the Bonds, including, but not limited to, any annual audit fees,
Paying Agent fees, Fiscal Agent fees and such other costs as are paid or payable from amounts
collected pursuant to Sections 8682, 8682.1 or 10312 of the California Streets and Highway
Code and (ii) capitalized costs of establishing and administering LACEP.
"Annual Administrative Assessment" means the annual assessment levied against
the properties of owners participating in LACEP to pay the ordinary and necessary costs incurred
by the County in connection with the administration and collection of the Assessments, from the
administration or registration of any associated bonds, including the Bonds, securities or other
financing arrangements, and from the administration of the Assessment Bond Reserve Fund or
other related funds.
"Assessment Bond Reserve Fund" means the fund created and established
pursuant to Section 4.1(d) hereof.
"Assessment Bond Reserve Requirement" means, as of the date of any
calculation, which calculation shall be made by the Fiscal Agent, an amount equal to the least of
(a) , or (b) 10% of the original principal amount of the
Bonds. The Assessment Bond Reserve Requirement shall be calculated upon each payment or
prepayment of an Assessment pursuant to Section 8881 and Section 8884 of the 1915 Act.
"Assessment Contracts" means the agreements by and between the County and
free and willing property owners participating in LACEP and identified in Exhibit C hereto,
pursuant to which the County agrees to provide financing to such property owners for the
acquisition, construction and installation of Improvements to such owners' properties.
"Assessment Installments" means the installments of principal, interest and
premium, if any, to be paid on the unpaid Assessments by certain property owners pursuant to
the terms of the related Assessment Contracts. The term "Assessment Installments" does not
include the Annual Administrative Assessment.
"Assessment Payment Account" means the account by that name established and
held by the Fiscal Agent pursuant to Section 4.1 hereof with respect to each Series of Bonds
issued hereunder.
"Assessment Prepayment Account" means the account by that name established
and held by the Fiscal Agent pursuant to Section 4.1 hereof with respect to each Series of Bonds
issued hereunder.
"Assessment Revenues" means the revenues received by the County in each
Fiscal Year from the collection of the annual Assessment Installments, including any interest and
penalties thereon and the proceeds of the exercise of any of the remedies for delinquent
payments available under the related Assessment Contracts or under the Contractual Assessment
Law.
"Assessments" means the unpaid assessments levied by the County pursuant to
the Contractual Assessment Law and the related Assessment Contracts constituting a fust lien
and charge upon certain real properties in the County.
"Auditor" means the Auditor -Controller of the County.
"Authority" means the Los Angeles County Public Works Financing Authority
created pursuant to the JPA Act, together with its successors and assigns.
"Authority Revenue Bonds" means all series of bonds issued and outstanding
under the Authority Indenture, which are secured by payments made on the Bonds purchased
with the proceeds of such bonds.
"Authority Indenture" means the Indenture dated as of _, 2010, by and among
the Authority, the Treasurer and Tax Collector of the County of Los Angeles, as paying agent
thereunder, and the Auditor -Controller of the County of Los Angeles, as fiscal agent thereunder,
and any supplements thereto.
"Authorized Investment" means any legal investment of County funds.
"Authorized Representative of the County" means the Treasurer, the Auditor, the
Program Administrator or any other person designated by such officers and authorized to act on
behalf of the County under or with respect to this County Indenture and all other agreements
related hereto.
"Board of Supervisors" means the Board of Supervisors of the County.
"Bond Date" means the dated date of the Bonds, which shall be the Closing Date
thereof.
"Bonds" means the contractual assessment limited obligation improvement bonds
authorized by and at any time Outstanding pursuant to the provisions of this County Indenture
and as designated pursuant to Section 2.3 hereof, including the Series A Bonds and any
Additional Bonds.
"Business Day" means any day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in the State or the Federal Reserve System are authorized or obligated
by law or executive order to be closed, or (iii) a day on which the County offices are closed on
account of an official holiday recognized by the County.
"Closing Date" means, with respect to each Series of Bonds the date of initial
delivery of such Series of Bonds.
"Contractual Assessment Law" means Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code, commencing with Section 5898.10, and all laws
amendatory thereof or supplemental thereto.
"Costs of Issuance" means all of the costs of issuing the Bonds, including, but not
limited to, all printing and document preparation expenses in connection with this County
Indenture, the Bonds and any and all other agreements, instruments, certificates or other
documents issued in connection therewith; legal fees and expenses of counsel with respect to the
issuance of the Bonds; fees and expenses of the financial advisor with respect to the issuance of
the Bonds; underwriters' fees; the initial fees and expenses of the Fiscal Agent and the Paying
Agent, if any (including without limitation, origination fees and fust annual fees payable in
advance); and other fees and expenses incurred in connection with the issuance of the Bonds or
the implementation of LACEP.
"Costs of Issuance Fund" means the fund created and established pursuant to
Section 4.1 hereof.
"County" means the County of Los Angeles, a political subdivision of the State.
4
"Debt Service Fund" means the fund created and established pursuant to
Section 4.1 hereof.
"DTC" means The Depository Trust Company in New York, New York.
"Energy Fund" means the Energy Fund established pursuant to Resolution No.
of the Board of Supervisors, adopted on May 25, 2010.
"Escrow Fund" means the fund by that name created and established pursuant to
Section 4.1 hereof.
"Event of Default" means any occurrence or event specified in and defined by
Section 8.1 hereof.
"Federal Securities" means any of the following which at the time of investment
are legal investments under the laws of the State of California for the funds proposed to be
invested therein: (a) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of the Treasury of
the United States of America); and (b) obligations of any agency, department or instrumentality
of the United States of America the timely payment of principal of and interest on which are
fully guaranteed by the United States of America.
"Fiscal Agent" means (i) the Auditor or his designated agent or (ii) any bank, trust
company, national banking association or other financial institution appointed as fiscal agent for
the Bonds in the manner provided in this County Indenture.
"Fiscal Year" means any twelve-month period extending from July 1st in one
calendar year to June 30th of the succeeding calendar year, both dates inclusive, or any other
twelve-month period selected and designated by the County as its official fiscal year period.
"Improvement Fund" means the fund by that name established and held by the
Fiscal Agent pursuant to Section 4.1 hereof.
"Improvements" means the qualifying distributed gdneration renewable energy
sources and energy and water efficiency improvements acquired, constructed and/or installed on
or in properties in the County under LACEP and the related Assessment Contracts.
"County Indenture" means this County Indenture, dated as of 1, 2010,
by and among the County, the Paying Agent and the Fiscal Agent, as amended or supplemented
pursuant to the terms hereof.
"Independent Public Accountant" means any certified public accountant or fain
of certified public accountants appointed and paid by the County who, or each of whom (i) is in
fact independent and not under domination of the County; (ii) does not have any substantial
interest, direct or indirect the County; and (iii) is not connected with the County as an officer or
employee of the County but who may be regularly retained to make annual or other audits of the
books of, or reports to, the County.
"Information Services" means Financial Information, Inc.'s "Daily Called Bond
Services," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor;
Moody's Investors Service "Municipal and Government," 99 Church Street, 8th Floor, New
York, New York 10007, Attention: Municipal News Reports; Kenny S&P, "Notification
Department," 55 Water Street, 45th Floor, New York, New York 10041; and, in accordance with
then current guidelines of the Securities and Exchange Commission, such other addresses and/or
such other services providing information with respect to the Bonds to be redeemed as the
County may designate in a Written Request of the County filed with the Fiscal Agent.
"Interest Payment Date" means, with respect to any Bond, March 2 and
September 2 in each year, beginning on March 2 in the year immediately succeeding the August
deadline by which the Assessments of the applicable Assessment Contracts have been enrolled
on the County tax roll, and continuing thereafter so long as any Bonds remain Outstanding.
"JPA Act" means the Joint Exercise of Powers Act (being Chapter 5 of Division 7
of Title 1 of the Government Code of the State, as amended) and all laws amendatory thereof or
supplementing thereto.
"LACEP" means the Los Angeles County Energy Program established pursuant
to Resolution No. of the Board of Supervisors, adopted on [May 25, 2010] under the
Contractual Assessment Law.
"Maturity Date" means the date specified in any Bond on which the principal of
such Bond becomes due and payable.
"New Money Assessment Bonds" means Bonds issued to finance Improvements
in accordance with LACEP and the related Assessment Contracts.
"Outstanding" means, subject to the provisions of Section 9.6 hereof, all Bonds
theretofore or thereupon being authenticated and delivered by the Paying Agent under this
County Indenture except:
(1) Bonds theretofore canceled by the Paying Agent or surrendered to the
Paying Agent for cancellation;
(2) Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds shall have been authenticated and delivered by the Paying Agent
pursuant to this County Indenture;
(3) From and after the date fixed for redemption, Bonds or portions thereof
designated for redemption for which notice of redemption has been duly given and the
amount necessary for redemption has been made available for that purpose; and
(4) Bonds for the payment or redemption of which funds or eligible securities
in the necessary amount shall have theretofore been deposited with the Fiscal Agent in
accordance with Section 9.1 hereof (whether on or prior to the maturity or Redemption Date of
such Bonds).
"Owner" when used with respect to any Bond, means the person in whose name
the ownership of such Bond is registered on the Registration Books maintained by the Fiscal
Agent.
"Paying Agent" means the Treasurer and its designated agents, any third party
contractor serving as Paying Agent, and their successors or assigns, acting in the capacity of
registrar, paying agent and transfer agent. The Treasurer is authorized to contract with any third
party to perform the services of Paying Agent under this County Indenture.
"Principal Payment Date" means September 2 of each year, commencing
September 2, 20_ with respect to the Series A Bonds.
"Prior Assessment Bonds" means any or all (as the context may require) Series of
Bonds designated for refunding with proceeds of a Series of Refunding Assessment Bonds.
"Program Administrator" means the Director of the Internal Services Department
of the County, pursuant to the Resolution of Intention, or any designee of such officer.
"Program Expense Fund" means the fund by that name and established in the
Energy Fund held by the County in connection with the Annual Administrative Assessment and
other amounts received for payment of Administrative Expenses and administered pursuant to
Section 4.8 hereof.
"Record Date" means, with respect to any Interest Payment Date, the fifteenth day
of the calendar month immediately preceding the applicable Interest Payment Date, whether or
not such day is a Business Day.
"Redemption Date" means, with respect to any Bonds, the date on which such
Bonds have been called for redemption pursuant to Section 3.1 or Section 3.2 of this County
Indenture prior to their Maturity Date.
"Redemption Notice" has the meaning provided in Section 3.6 hereof
"Refunding Assessment Bonds" means Bonds issued to finance the refunding of
bonds outstanding under this County Indenture or other issuance instrument and secured by
proceeds derived from payments of Revenues.
"Registration Books" means the records maintained by the Paying Agent pursuant
to Section 2.9 hereof for the registration and transfer of ownership of the Bonds.
"Representation Letter" means the Blanket Letter of Representations delivered
upon or prior to the issuance of the Bonds to DTC by the County.
"Resolution Establishing LACEP" means Resolution No. of the Board
of Supervisors adopted on May 25, 2010.
"Resolution of Intention" means Resolution No. of the Board of
Supervisors adopted on April 6, 2010.
7
"Revenues" shall mean the Assessment Installments and any foreclosure
proceedings relating thereto, the proceeds of the sale of the Bonds, all amounts in the Debt
Service Fund and the accounts thereunder and all interest, profits and other income received
from the investment of such amounts, less the amounts deducted by the County and set-aside to
pay the costs and expenses[, up to a maximum of $ in each Fiscal Year], incurred by the
County in connection with the capitalized costs of establishing and administering LACEP.
"Securities Depository" means The Depository Trust Company, 55 Water Street,
50th Floor, New York, N.Y. 10041-0099 Attn. Call Notification Department, Fax (212) 855
7232, or, in accordance with then -current guidelines of the Securities and Exchange
Commission, such other securities depositories, or no such depositories, as the County may
indicate in a Written Request of the County delivered to the Paying Agent.
"Series" means each Series of Bonds issued and designated pursuant to and in
accordance with Section 2. 1, Section 2.3 or Section 2.15 hereof.
"Series A Bonds" means the County's Los Angeles County Energy Program
Contractual Assessment Limited Obligation Improvement Bonds, Series A.
"State" means the State of California.
"Supplemental Indenture" means any indenture adopted by the parties hereto
amendatory of or supplemental to this County Indenture.
"Treasurer" means the Treasurer and Tax Collector of the County.
"Written Request of the County" means a request in writing signed by an
Authorized Representative of the County.
Section 1.2. Rules of Construction. All references in this County Indenture to
"Sections," and other subdivisions, unless indicated otherwise, are to the corresponding Sections
or subdivisions of this County Indenture; and the words "herein," "hereof," "hereunder," and
other words of similar import refer to this County Indenture as a whole and not to any particular
Section or subdivision hereof.
Section 1.3. Authorization and Purpose of Bonds. The Board of Supervisors
has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has
found, as a result of such review, and hereby finds and determines that all things, conditions and
acts required by law to exist, happen and be performed precedent to and in the issuance of the
Bonds do exist, have happened and have been performed in due time, form and manner as
required by law, and the County is now authorized, pursuant to each and every requirement of
law, to issue the Bonds in the manner and form as in this County Indenture provided. The Board
of Supervisors hereby authorizes the issuance of the Bonds pursuant to the Contractual
Assessment Law, the 1915 Act and this County Indenture for the purpose of funding
disbursements pursuant to the Assessment Contracts to property owners for the cost of
Improvements pursuant to LACEP.
ARTICLE H
THE BONDS
Section 2.1. Authorization and Purpose of Bonds; Equality of Bonds; Pledge;
Limited Liability
(a) The County is hereby authorized and directed to execute, and the Fiscal
Agent is hereby authorized and directed upon written request of an Authorized Representative of
the County to authenticate and deliver the Bonds. The County may authorize the execution,
authentication and delivery of Additional Bonds at any time after the execution, authentication
and delivery of the Bonds only as provided in Section 2.15 hereof, which Additional Bonds shall
contain such additional designation as may be determined by the County, including the
designation of Refunding Assessment Bonds, as appropriate. The Bonds may be issued in book -
entry form or certificate form.
(b) The County hereby pledges and assigns to the Paying Agent and the Fiscal
Agent, as applicable, in trust for the protection and security of the Owners, all of its right, title
and interest in the Revenues. The Bonds shall be and are equally secured by a pledge of and lien
upon the Revenues.
(c) The Bonds and interest thereon are not payable from the general funds of
the County. Neither the credit of the County nor the taxing power of the County is pledged for
the payment of the Bonds or the interest thereon, and, except as provided herein, no Owner of the
Bonds may compel the exercise of any taxing power by the County or force the forfeiture of any
of its property. The principal of, and premium (if any) and interest on the Bonds are not a debt of
the County nor a legal or equitable pledge, charge, lien or encumbrance upon any of the property
of the County, or upon any of their income, receipts or revenues, other than the Revenues.
Section 2.2. Collection of Assessments. (a) The Assessment Installments shall
be payable as provided in the Assessment Contracts and shall be payable in the same manner and
at the same time and in the same installments as general taxes on real property are payable, and
become delinquent at the same times and in the same proportionate amounts and bear the same
proportionate penalties and interest after delinquency as do general taxes on real property.
Nothing in this County Indenture or in any Supplemental Indenture shall preclude the
redemption prior to maturity of any Bonds or the payment of the Bonds from proceeds of
refunding bonds issued under any law of the State.
(b) Except for the collection of the Assessment Installments and the
observance and performance of the other conditions, covenants and terms contained herein or in
the 1915 Act or the Contractual Assessment Law required to be observed or performed by it, the
County shall not have any obligation or liability to the Owners with respect to this County
Indenture or the Bonds.
Section 2.3. Issuance of Series A Bonds; Description of Series A Bonds. (a)
The Series A Bonds shall consist of such Bonds designated generally as "County of Los Angeles
Los Angeles County Energy Program Contractual Assessment Limited Obligation Improvement
0
Bonds, Series A". Series A Bonds in the aggregate principal amount not to exceed
$ shall be issued for the purposes of funding disbursements of such amounts and
any other moneys available therefor to free and willing property owners to finance the
Improvements pursuant to LACEP.
(b) The Series A Bonds may be issued in one or more subseries, with the
principal amount of each subseries of Series A Bonds to be determined by the Treasurer.
(c) Each Series of Bonds shall bear a series designation as determined by the
County.
(d) The Series A Bonds shall be issued only in fully registered form without
coupons in the denomination of $5,000 or any integral multiple thereof, or in such other
denomination or denominations as determined by the County. The Series A Bonds shall be dated
as of their date of delivery and shall mature and be payable on September 2 in the years and in
the principal amounts and shall bear interest as set forth below:
Los Angeles County Energy Program
Contractual Assessment Limited Obligation Improvement s, Series A
Maturity Date Principal
(September 2) Amount
Interest Rate
The interest rate for the Series A Bonds shall be calculated on the basis of a
360 -day year of twelve 30 -day months.
(e) If the Series A Bonds are issued in book -entry form, the Series A Bonds
shall be initially registered in the name of "Cede & Co.," as nominee of DTC. If the Series A
Bonds are issued in certificate form, the Series A Bonds shall be initially registered pursuant to
Section 2.5 hereof. The Series A Bonds shall be evidenced by a single fully registered bond in
the principal amount of the Series A Bonds.
Section 2.4. Medium and Payment. Principal of, and premium (if any) and
interest on the Bonds shall be payable in lawful money of the United States of America. The
principal of each Series of Bonds shall be payable on the respective Maturity Date set forth in the
applicable Bonds. Interest with respect to each Bond shall accrue from the respective Bond Date.
Interest on any Bond shall be payable from the Interest Payment Date next preceding the date of
authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date, in
which event interest shall be payable from such date of authentication, (ii) the date of
authentication is after a Record Date but prior to the immediately succeeding Interest Payment
10
Date, in which event interest shall be payable from such Interest Payment Date, or (iii) the date
of authentication is prior to the close of business on the first Record Date, in which event interest
shall be payable from the Bond Date; provided, however, that if at the time of authentication of
such Bond, interest is in default, interest on that Bond shall be payable from the last Interest
Payment Date to which the interest has been paid or made available for payment.
Principal of and interest on any Bond shall be paid by check of the Paying Agent
mailed on or before the Interest Payment Date by first class mail, postage prepaid, to the person
whose name appears in the Registration Books as the Owner of such Bond as of the close of
business on the Record Date, to the address that appears on the Registration Books, provided that
the payment of principal of the Bonds on the final Maturity Date and the payment of the
principal of the Bonds and any premium due upon the redemption thereof shall be payable upon
presentation and surrender thereof at maturity or earlier redemption at the office of the Paying
Agent. In addition, upon a request in writing received by the Paying Agent on or before the
applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds
payment shall be made on the Interest Payment Date by wire transfer in immediately available
funds to an account designated by such Owner.
Each Bond shall bear interest until its principal sum has been paid; provided,
however, that if at the Maturity Date of any Bond, or if at the Redemption Date of any Bond
which has been duly called for redemption as herein provided, funds are available for the
payment or redemption thereof in full accordance with the terms of this County Indenture, the
Bond shall then cease to bear interest.
Section 2.5. Form of Bonds and Certificate of Authentication and Registration.
The Bonds shall be initially issued in the form of a fully registered bond or bonds registered in
the name of the purchaser thereof. The form of the Bond, the form of the certificate of
authentication and the form of registration thereon shall be substantially in the form attached
hereto as Exhibit A and incorporated herein by this reference, with any necessary or appropriate
variations, omissions and insertions as permitted or required hereunder. The Bonds may be
printed, lithographed or typewritten and may contain such reference to any of the provisions of
this County Indenture as may be appropriate.
Section 2.6. Execution and Authentication. The Bonds shall be executed by the
manual or facsimile signature of the Treasurer and attested by the manual or facsimile signature
of the Executive Officer Clerk of the Board of Supervisors. In case any one or more of the
officers who shall have signed any of the Bonds shall cease to be such officer before the Bonds
so signed have been authenticated and delivered by the Paying Agent (including new Bonds
delivered pursuant to the provisions hereof with reference to the transfer and exchange of Bonds
or to lost, stolen, destroyed or mutilated Bonds), such Bonds may, nevertheless, be authenticated
and delivered as herein provided, and may be issued as if the persons who signed such Bonds
had not ceased to hold such offices.
The Bonds shall bear thereon a certificate of authentication and registration, in the
form set forth in Exhibit A hereto, executed by the manual signature of the Paying Agent. Only
such Bonds as shall bear thereon such certificate of authentication and registration shall be
entitled to any right or benefit under this County Indenture, and no Bond shall be valid or
11
(a) Default in the due and punctual payment of the principal of or redemption
premium, if any, on any Bond when and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the interest on any Bond when
and as the same shall become due and payable; or
(c) Default by the County in the observance of any of the agreements,
conditions or covenants on its part in this County Indenture or in the Bonds contained (other than
a payment default referred to in subparagraphs (a) and (b) above), and the continuation of such
default for a period of 60 days after the County shall have been given notice in writing of such
default by any Owner; provided that if within 60 days the County has commenced curing of the
default and diligently pursues elimination thereof, such period shall be extended to permit such
default to be eliminated.
Section 8.2. Remedies on Default. (a) If any installment of principal or
interest on any Bond is not paid when due, the owner of such Bond shall have the right to
exercise such rights and remedies as are provided to such owner under the Contractual
Assessment Law or under other applicable law.
(b) In the event the County fails to take any action to eliminate an Event of
Default under Section 8.1 hereof, the Owners of not less than sixty percent (60%) in aggregate
principal amount of Outstanding Bonds [and the holders of not less than sixty percent (60%) in
aggregate principal amount of the related series of Authority Revenue Bonds then outstanding]
may institute any suit, action, mandamus or other proceeding in equity or at law for the
protection or enforcement of any right under this County Indenture, but only if such Owners
have first made written request of the County, after the right to exercise such powers or right of
action shall have occurred, and shall have afforded the County a reasonable opportunity either to
proceed to exercise the powers granted herein or granted under law or to institute such action,
suit or proceeding in its name and unless also, the County shall have been offered reasonable
security and indemnity against the costs, expenses and liabilities to be incurred therein or
thereby, and the County shall have refused or neglected to comply with such request within a
reasonable time. Any moneys recovered in such suit, action, mandamus or other proceedings
shall be applied first to the payment of the reasonable costs and expenses of the Owners in
bringing such suit, action, mandamus or other proceeding, including reasonable compensation to
their agents and attorney.
(c) The principal of the Bonds shall not be subject to acceleration.
Section 8.3. Remedies Not Exclusive; Non -Waiver. No remedy conferred
hereby upon any Owner is intended to be exclusive of any other remedy, but each such remedy is
cumulative and in addition to every other remedy and may be exercised without exhausting and
without regard to any other remedy conferred by the 1915 Act, the Contractual Assessment Law,
or any other law of the State. No waiver of any default or breach of duty or contract by any
Owner shall affect any subsequent default or breach of duty or contract or shall impair any rights
or remedies on said subsequent default or breach. No delay or omission of any Owner to exercise
any right or power accruing upon any default shall impair any such right or power or shall be
31
Bond, (b) a reduction in the principal amount of, or redemption price of, any Bond or the rate of
interest thereon without the consent of the Owner of such Bond, (c) a reduction in the percentage
of Bonds the Owners of which are required to consent to such supplemental indenture, without
the consent of the Owners of all Bonds then Outstanding. Except as provided in Section 2.15
hereof, in no event may a modification or amendment provide for the issuance of additional
bonds, notes or other evidences of indebtedness payable out of the Revenues.
Section 7.3. Notice of Supplemental Indenture to Owners. If at any time the
parties hereto shall desire to enter into an indenture supplemental hereto, which pursuant to the
terms of Section 7.2 shall require the consent of the Owners, the County shall cause notice of the
proposed supplemental indenture to be mailed, postage prepaid, to all Owners at their addresses
as they appear in the Registration Books. Such notice shall briefly set forth the nature of the
proposed supplemental indenture and shall state that a copy thereof is on file at the office of the
County for inspection by all Owners. The failure of any Owner to receive such notice shall not
affect the validity of such supplemental indenture when consented to and approved as in
Section 7.2 provided. Whenever at any time within one year after the date of the first mailing of
such notice, the County shall receive an instrument or instruments purporting to be executed by
the Owners of not less than sixty percent (60%) in aggregate principal amount of the Bonds then
Outstanding, which instrument or instruments shall refer to the proposed supplemental indenture
described in such notice, and shall specifically consent to and approve it substantially in the form
of the copy thereof referred to in such notice as on file with the County, such proposed
supplemental indenture, when duly executed by the County, shall thereafter become a part of the
proceedings for the issuance of the Bonds. In determining whether the Owners of the requisite
aggregate principal amount of the Bonds have consented to the adoption of any supplemental
indenture, Bonds which are owned by the County, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the County, shall be
disregarded and shall be treated as though they were not Outstanding for the purpose of any such
determination.
Upon the execution and delivery of any indenture supplemental hereto and the
receipt of consent to any such supplemental indenture from the Owners of the appropriate
aggregate principal amount of Bonds in instances where such consent is required, this County
Indenture shall be, and shall be deemed to be, modified and amended in accordance therewith,
and the respective rights, duties and obligations under this County Indenture of the County, the
Fiscal Agent, the Payment Agent and all Owners of Bonds then Outstanding shall thereafter be
determined, exercised and enforced hereunder, subject in all respects to such modifications and
amendments.
ARTICLE VIII
DEFAULT
Section 8.1. Events of Default. Any one or more of the following events shall
constitute an "Event of Default':
Section 6.3. Compensation. The County shall pay, from the Program Expense
Fund, to the Fiscal Agent from time to time reasonable compensation for all services rendered
under this County Indenture, and also all reasonable expenses, charges, counsel fees and other
disbursements, including those of its attorneys, agents, and employees, incurred in and about the
performance of their powers and duties under this County Indenture. Other than funds on
deposit in the Program Expense Fund, in no event shall the County be required to expend its own
funds hereunder or under the Assessment Contracts.
ARTICLE VII
SUPPLEMENTAL INDENTURES
Section 7.1. Supplemental Indenture Without Owner Consent. The County
may from time to time, and at any time, without notice to or consent of any of the Owners enter
into such indentures or agreements supplemental hereto as shall not be inconsistent with the
terms and provisions hereof (which supplemental indentures or agreements shall thereafter form
a part hereof) for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other provision with
respect to matters or questions arising under this County Indenture or in any supplemental
indenture, provided that such action shall not adversely affect the interests of the Owners;
(b) to add to the covenants and agreements of and the limitations and the
restrictions upon the County contained in this County Indenture other covenants, agreements,
limitations and restrictions to be observed by the County which are not contrary to or
inconsistent with this County Indenture as theretofore in effect;
(c) to modify, alter, amend or supplement this County Indenture in any other
respect which is not materially adverse to the interests of the Owners of Bonds Outstanding
hereunder [and, in the opinion of Bond Counsel, is not materially adverse to the holders of the
related Authority Bonds then Outstanding]; and
(d) to provide for the issuance of any Additional Bonds and to provide the
terms of such Additional Bonds, subject to the conditions and upon compliance with the
procedure set forth in Section 2.15 hereof.
Section 7.2. Supplemental Indentures with Owner Consent. Except as provided
in Section 7. 1, the Owners of not less than sixty percent (60%) in aggregate principal amount of
the Bonds then Outstanding [and the holders of not less than sixty percent (60%) in aggregate
principal amount of the Authority Bonds then outstanding] shall have the right to consent to and
approve the execution of such supplemental indentures as shall be deemed necessary or desirable
for the purpose of waiving, modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this County Indenture or in any
supplemental indenture or agreement; provided, however, that nothing herein shall permit, or be
construed as permitting, (a) an extension of the scheduled date of the principal payment of any
Bond, or the payment date of interest on, any Bond without the consent of the Owner of such
RJO
ARTICLE VI
PAYING AGENT AND FISCAL AGENT
Section 6.1. Paving Aeent and Fiscal Agent. The County hereby appoints the
Treasurer of the County, or his designated agents, as the Paying Agent and the Auditor, or his
designated agents, as the Fiscal Agent for the Bonds.
The Paying Agent is hereby authorized to and shall mail interest payments to the
Owners, select Bonds for redemption, give notice of redemption and maintain the Bond Register.
The Paying Agent is hereby authorized to and shall pay, from funds on deposit for such purposes
hereunder, the principal of and premium, if any, on the Bonds when the same are duly presented
to it for payment at maturity or on call and redemption, provide for the registration of transfer
and exchange of Bonds presented to it for such purposes, provide for the cancellation of Bonds
all as provided in this County Indenture, and provide for the authentication of Bonds, and shall
perform all other duties assigned to or imposed on it as provided in this County Indenture. The
Paying Agent shall keep accurate records of all Bonds paid and discharged by it.
The Fiscal Agent is also authorized to and shall maintain and administer funds
and accounts established pursuant to Section 4.1 hereof. The Fiscal Agent shall keep accurate
records of all funds administered by it. The County further authorizes and designates the Auditor
to perform those functions of the Fiscal Agent set forth herein which, pursuant to the Contractual
Assessment Law and the provisions incorporated therein by reference, are to be performed by the
treasurer.
Each of the initially appointed Paying Agent and Fiscal Agent may contract with
any third party to perform any or all of their obligations and duties under this County Indenture.
The Paying Agent and Fiscal Agent may each be removed by the County and a successor or
successors may be appointed. So long as any Bonds are Outstanding and unpaid, the Paying
Agent, the Fiscal Agent and any successor or successors thereto designated by the County shall
continue to be Paying Agent and Fiscal Agent, respectively, of the County for all of said
purposes until the designation of a successor or successors.
Section 6.2. Liability of Paving Agent and Fiscal Agent. The recitals of fact
and all promises, covenants and agreements contained herein and in the Bonds shall be taken as
statements, promises, covenants and agreements of the County, and the Paying Agent and the
Fiscal Agent assume no responsibility for the correctness of the same and makes no
representations as to the validity or sufficiency of this County Indenture or of the Bonds, and
shall incur no responsibility in respect thereof, other than in connection with its duties or
obligations set forth herein or in the Bonds or in the certificate of authentication and registration
assigned to or imposed upon the Paying Agent or the Fiscal Agent, as applicable. The Paying
Agent shall be under no responsibility or duty with respect to the issuance of the Bonds for
value. Neither the Paying Agent nor the Fiscal Agent shall be liable in connection with the
performance of their respective duties hereunder, except for their respective negligence or
default.
W.
Section 5.8. Accountine Records and Statements. The County will keep or
cause to be kept proper accounting records in which complete and correct entries shall be made
of all transactions relating to the receipt, deposit and disbursement of the Assessment
Installments, and such accounting records shall be available for inspection upon five (5) business
days' written notice by any Owner or such Owner's agent duly authorized in writing at
reasonable hours and under reasonable conditions.
Section 5.9. Covenant to Foreclose. (a) The County will initiate procedures to
determine or cause to be determined if any Assessment was not paid when due during the fiscal
year ended the prior June 30. If any such assessment was not paid and if the balance in the
Assessment Bond Reserve Fund is less than the Assessment Bond Reserve Requirement, the
County shall, upon the written request of the Owners pursuant to Section 8.2(b) hereof, send or
cause to be sent a notice of delinquency (and a demand for immediate payment thereof) to the
property owner, and if the delinquency remains uncured within 90 days of such notice, order and
cause to be commenced, and thereafter prosecute to completion pursuant to Section 8830 et seq.
of the California Streets and Highways Code, judicial foreclosure proceedings upon the lien of
delinquent unpaid assessments as necessary or desirable to result in assessment revenues
sufficient to pay any delinquent principal of or interest on the Bonds and satisfy the Assessment
Bond Reserve Requirement. Upon the redemption or sale of the real property responsible for
such delinquent Assessment Installments, or resale as provided below, the County shall deposit
to the Assessment Bond Reserve Fund, the amount of any delinquency advanced therefrom to
the Debt Service Fund for payment of interest on or principal of Bonds.
(b) In the event that real property with an Assessment is neither redeemed by
the owner thereof nor sold to a third party purchaser at such foreclosure sale, the County may,
but shall not be obligated to, cause a credit bid on behalf of and in the name of the County to be
entered in the amount due the County and shall cause a sheriff s deed for said real property to be
executed in the name of the County. The proceeds from any resale of such real property on
which there is an Assessment shall be applied in the following order: (i) to make any past due
payments of principal of or interest on the Bonds, (ii) to restore the Assessment Bond Reserve
Fund to the Assessment Bond Reserve Requirement, (iii) to the payment of any continuing costs
of the Bonds, and (iv) for the redemption of Bonds pursuant to Section 3.2 hereof with credit for
such redemption credited pro rata against all Assessments.
(c) In the event that the Treasurer and the County make the determinations
described in the Sections 8770-8772 of the 1915 Act in connection with the prospects of an
ultimate loss accruing to the bondholders, the County, the Treasurer and the Fiscal Agent shall
take the actions required by Sections 8770-8784 of said Act and Owners of Bonds shall be
deemed to have consented to do such things as are required by such Sections of Owners of
Bonds.
Section 5.10. Further Assurances. The County will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of its duties under
this County Indenture, and for the better assuring and confirming unto the Owners of the Bonds
the rights and benefits provided in this County Indenture.
27
Bonds; provided, however, that said covenants do not require the County to expend any funds
other than the Revenues.
Section 5.1. Compliance with Indenture. The County will faithfully observe
and perform all of the conditions, covenants and requirements of this County Indenture required
to be observed or performed by it.
Section 5.2. General. The County shall do and perform or cause to be done and
performed all acts and things required to be done or performed by or on behalf of the County
under the provisions of this County Indenture. The County warrants that upon the date of
execution and delivery of the Bonds, all conditions, acts and things required by law and this
County Indenture to exist, to have happened and to have been performed precedent to and in the
execution and delivery of such Bonds do exist, have happened and have been performed and the
execution and delivery of the Bonds shall comply in all respects with the applicable laws of the
State.
Section 5.3. Punctual Payment. The County shall punctually pay or cause to be
paid the principal, premium (if any) and interest to become due in respect of all the Bonds, in
strict conformity with the terms of the Bonds and of this County Indenture, according to the true
intent and meaning thereof, but only out of Revenues and other moneys pledged for such
payment as provided in this County Indenture and received by the County or the Fiscal Agent
hereunder.
Section 5.4. Extension of Payment of Bonds. The County shall not directly or
indirectly extend the maturity dates of the Bonds or the time of payment of interest with respect
thereto. Nothing herein shall be deemed to limit the right of the County to issue any securities
for the purpose of providing funds for the redemption of the Bonds and such issuance shall not
be deemed to constitute an extension of the maturity of the Bonds.
Section 5.5. Protection of Rights. The County will preserve and protect the
security of the Bonds and the rights of the Owners against all claims and demands of all persons,
and will faithfully perform and abide by all of the covenants, undertakings and provisions
contained in this County Indenture or in any Bond issued pursuant to this County Indenture and
will contest by court action or otherwise (a) the assertion by any officer of any government unit
or any other person whatsoever against the County that (i) the 1915 Act or the Contractual
Assessment Law is unconstitutional, (ii) the Assessments are invalid, or (iii) the Assessments
cannot be applied by the County to pay debt service on the Bonds, or (b) any other action
affecting the validity of the Bonds or diluting the security therefor.
Section 5.6. Against Encumbrances. The County will not encumber, pledge or
place any charge or lien upon any of the Revenues or other amounts pledged to the Bonds
superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this County Indenture.
Section 5.7. Deferral of Assessments. The County will refrain from directly or
indirectly extending or deferring the payment of any Assessment Installment.
M
(d) The County and the Fiscal Agent represent and agree that, concurrently
with the initial deposit of the moneys in the applicable account of the Escrow Fund pursuant to
this Section 4.8, (i) the Prior Assessment Bonds will no longer be deemed to be Outstanding and
unpaid within the meaning and with the effect expressed in Section 9.1 of this County Indenture,
[and (ii) the related Authority Revenue Bonds of the Authority will no longer be deemed to be
outstanding and unpaid within the meaning and with the effect expressed in the Authority
Indenture].
(e) Monies remaining on deposit in any account of the Escrow Fund after
payment of all amounts to the Owners of the applicable Series of Prior Assessment Bonds shall
be released to the County for the benefit of the LACEP within five (5) Business Days after such
payment to the Owners of the applicable Series of Prior Assessment Bonds,
Section 4.10. Investments. (a) Except for any escrow fund established hereunder
(and the accounts therein), all moneys in any of the funds or accounts established pursuant to this
County Indenture shall be invested by the Fiscal Agent solely in Authorized Investments. All
moneys in any escrow fund established hereunder (and the accounts therein) shall be invested by
the Fiscal Agent solely in Federal Securities. Obligations purchased as an investment of moneys
in any fund or account shall be deemed to be part of such fund or account. Moneys in the Debt
Service Fund and the accounts therein shall be invested only in obligations which will by their
terms mature on such dates as to ensure the timely payment of principal and interest on the
corresponding Bonds as the same become due.
(b) All interest or gain derived from the investment of amounts in any of the
funds or accounts hereunder shall be deposited in the fund or account from which such
investment was made. The Fiscal Agent shall incur no liability for losses arising from any
investments made pursuant to this Section.
(c) For the purpose of determining the amount in any fund or account
hereunder, the value of investments credited to such fund or account shall be calculated at the
cost thereof, excluding accrued interest and brokerage commissions, if any.
(d) The Fiscal Agent shall sell at the best price obtainable or present for
redemption any obligations so purchased whenever it may be necessary to do so in order to
provide moneys to meet any payment or transfer for such funds and accounts or from such funds
and accounts. For the purpose of determining at any given time the balance in any fund or
account, any such investments constituting a part of such fund and account shall be valued at
their amortized cost.
ARTICLE V
COVENANTS
So long as any of the Bonds issued hereunder are outstanding, the County makes
the following covenants with the Owners (to be performed by the County or its proper officers,
agents or employees), which covenants are necessary, convenient and desirable to secure the
25
Assessments and transferred to the Debt Service Fund pursuant to a Written Request of the
County.
(h) All or a portion of the Assessment Bond Reserve Requirement may be
satisfied by the provision of one or more policies of municipal bond insurance or surety bonds
issued by a municipal bond insurer or by a letter of credit issued by a bank, the obligations
insured by which insurer or issued by which bank, as the case may be, having ratings at the time
of issuance of such policy or surety bond or letter of credit equal to "AA" or higher assigned by
Fitch or "Aa" or higher assigned by Moody's or "AA" or higher assigned by Standard & Poor's.
Section 4.8. Program Expense Fund. There has been heretofore established a
fund within the Energy Fund called the Program Expense Fund and held by the County. There
will be deposited in the Program Expense Fund (i) the amounts received by the Treasurer with
respect to each parcel in each Fiscal Year in satisfaction of the Annual Administrative
Assessment pursuant to the Assessment Contracts and (ii) the amounts, exclusive of Revenues,
deducted from Assessments and set-aside to pay the costs and expenses[, up to a maximum of
$ in each Fiscal Year], incurred by the County in connection with the capitalized costs
of establishing and administering LACEP. Amounts on deposit in the Program Expense Fund
shall be used by the County to pay for ordinary and necessary costs of administering the levy and
collection of the Assessments and all other administrative costs and incidental expenses related
to the Series A Bonds, as well as the capitalized costs of establishing and administering LACEP.
On each June 30, amounts in excess of the Annual Administrative Assessments expected to be
incurred through the next succeeding September 2 may be applied as a credit upon the
assessment levied for the upcoming fiscal year for Annual Administrative Assessments. Any
surplus remaining in the Program Expense Fund after payment or provision for payment of all
Administrative Expenses and other costs in connection with establishing and administering
LACEP incurred or expected to be incurred through and including activities relating to the
payment in full of the Bonds may be transferred to the County for the benefit of LACEP.
Section 4.9. Escrow Fund: Refunding Assessment Bonds. (a) The Fiscal Agent
hereby agrees to maintain the Escrow Fund and the accounts therein, into which shall be
deposited net proceeds of Refunding Assessment Bonds to be used to redeem Outstanding Prior
Assessment Bonds.
(b) In accordance with Section 9.1 of this County Indenture, upon the
issuance of any Series of Refunding Assessment Bonds, the County shall cause to be deposited
with the Fiscal Agent in the applicable account of the Escrow Fund the following: (i) the then
Outstanding principal amount of the Prior Assessment Bonds being refunded and defeased by
such Series of Refunding Assessment Bonds, and (ii) interest accrued and unpaid on such Prior
Assessment Bonds to the Redemption Date.
(c) Upon receipt of the moneys described in subsection (b) above, the Fiscal
Agent shall pay such moneys to the Owners of the Prior Assessment Bonds for the equal and
ratable benefit of such Owners. A Redemption Notice shall be provided by the Fiscal Agent to
the Owners of the Prior Assessment Bonds in accordance with Section 3.6.
ij
the Assessment Bond Reserve Fund to the total amount originally assessed in the proceedings for
the Bonds said ratio multiplied by the amount of the prepayment, (ii) or in the event that the
moneys in the Debt Service Fund are insufficient therefor, and the Fiscal Agent shall withdraw
from the Assessment Bond Reserve Fund and deposit in the Debt Service Fund moneys
necessary for such purpose.
(c) On each September 2, the Fiscal Agent shall transfer to the Assessment
Bond Reserve Fund any excess amounts in the Assessment Payment Account of the Debt Service
Fund pursuant to the second paragraph of Section 4.4(b). On each September 2 the Fiscal Agent
shall, after making any transfer called for by the preceding sentence, determine whether amounts
then on deposit in the Assessment Bond Reserve Fund are less than, equal to or exceed the
Assessment Bond Reserve Requirement. Any such excess shall, to the extent permitted by law,
be applied by the Fiscal Agent as follows:
(i) First, to the Assessment Payment Account of the Debt Service Fund to be
applied to the payment of principal or interest due on the Bonds; and
(ii) Second, to the Assessment Prepayment Account of the Debt Service Fund
for application to the redemption of Bonds pursuant to Section 3.2 hereof.
(d) Whenever, after the issuance of the Bonds, an Assessment is prepaid, in
whole or in part, as provided in the 1915 Act, the Fiscal Agent, pursuant to a Written Request of
the County, shall transfer from the Assessment Bond Reserve Fund to the Debt Service Fund an
amount, specified in such Written Request, equal to the product of the ratio of the original
amount of the Assessment so paid to the original amount of all unpaid Assessments, times the
initial Assessment Bond Reserve Requirement; provided, however, no such transfer shall be
made if after the transfer the amounts in the Assessment Bond Reserve Fund then remaining will
not equal the Assessment Bond Reserve Requirement. The Fiscal Agent may conclusively rely
upon the County's determination that the remaining funds equal the Assessment Bond Reserve
Requirement.
(e) So long as no Event of Default shall have occurred and be continuing any
amount in the Assessment Bond Reserve Fund in excess of the Assessment Bond Reserve
Requirement on December 15 and June 15 of each year shall be withdrawn from the Assessment
Bond Reserve Fund by the Fiscal Agent and shall be deposited in the Debt Service Fund.
(f) Whenever the balance in the Assessment Bond Reserve Fund is sufficient
to retire all the Outstanding Bonds, whether by advance retirement or otherwise, collection of the
principal and interest on the Assessments shall be discontinued and the Assessment Bond
Reserve Fund liquidated by the Fiscal Agent in retirement of the Outstanding Bonds, as directed
by a Written Request of the County. In the event that the balance in the Assessment Bond
Reserve Fund at the time of liquidation exceeds the amount required to retire all of the
Outstanding Bonds, the excess shall, after payment of amounts due to the Fiscal Agent, be
transferred to the County to be used in accordance with the JPA Act and the 1915 Act.
(g) All amounts remaining in the Assessment Bond Reserve Fund in the year
in which the last Assessments become due and payable shall be credited toward said
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(d) If there is a surplus remaining in any account in the Debt Service Fund
after payment of all Bonds and the interest thereon, plus applicable redemption premium (if any),
that surplus shall be released from the pledge and lien hereof and transferred to the County to be
used for the benefit of the LACEP.
Section 4.5. Assessment Prepayments. (a) The Bonds of a Series shall be
prepaid to the extent any owner of assessed land may prepay the Assessment of an Assessment
Contract.
(b) Upon prepayment of an Assessment pursuant to subsection (a) above, the
Fiscal Agent shall deposit such payment in the Debt Service Fund for payment to Owners of the
corresponding Bonds to be redeemed in accordance with Section 3.1. If notice of redemption is
given in accordance with Section 3.6 hereof, the Bonds so advanced shall mature and become
payable as set forth in Section 3.7 hereof.
Section 4.6. Costs of Issuance Fund. The Fiscal Agent hereby agrees to
maintain the Costs of Issuance Fund and the accounts therein. The moneys in the Costs of
Issuance Fund shall be used and withdrawn by the Fiscal Agent from time to time to pay the
Costs of Issuance upon submission of a Disbursement Request of the County, substantially in the
form of Exhibit B hereto, stating (a) the Person to whom payment is to be made, (b) the amount
to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a
proper charge against the applicable account of the Costs of Issuance Fund, and (e) that such
amounts have not been the subject of a prior disbursement from the applicable account of the
Costs of Issuance Fund; in each case together with a statement or invoice for each amount
requested thereunder. On or before 180 days following the issuance of a Series of Bonds, the
Fiscal Agent shall transfer all amounts (if any) remaining in the Costs of Issuance Fund to the
Debt Service Fund.
Section 4.7. Assessment Bond Reserve Fund. (a) The Fiscal Agent hereby
agrees to maintain and hold in trust a special fund designated the "Assessment Bond Reserve
Fund" until all payments of principal of and premium (if any) and interest on the Bonds have
been made and all Bonds have been paid or redeemed. At the time of issuance of a Series of the
Bonds, there shall be deposited in the Assessment Bond Reserve Fund an amount that will,
together with amounts on deposit in the Assessment Bond Reserve Fund, equal the Assessment
Bond Reserve Requirement. There shall be maintained in the Assessment Bond Reserve Fund
an amount equal to the Assessment Bond Reserve Requirement. Additional deposits shall be
made as provided in the 1915 Act and this County Indenture.
The County shall cause the Assessment Bond Reserve Fund to be administered in
accordance with Part 16 of the 1915 Act; provided that proceeds from redemption or sale of
properties, with respect to which payment of delinquent Assessments and interest thereon was
made from the Assessment Bond Reserve Fund, shall be credited to the Assessment Bond
Reserve Fund.
(b) Moneys in the Assessment Bond Reserve Fund shall be used solely for the
purpose of paying the principal of and interest on the Bonds (i) in the event of early prepayment
of assessments in an amount which shall equal the ratio of the total amount initially provided for
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the Bonds, the Fiscal Agent shall, to the extent available, transfer amounts from the Assessment
Bond Reserve Fund to the Assessment Payment Account or directly to the Paying Agent in
accordance with Section 4.7 hereof for application first to the payment of interest on the Bonds,
and then to the payment of principal due on such Bonds and then to the payment of principal due
on such Bonds or any portion thereof called for redemption pursuant to Section 3.2 hereof.
On each September 2 beginning on the first Principal Payment Date, all monies in
the Assessment Payment Account in excess of the amount necessary to make the payments of
principal of and interest on the Bonds then due or overdue and payable on such date (assuming
all Owners entitled to payment on or before such date take or have taken any and all actions
necessary on their part to receive amounts due them) shall be applied as follows:
(i) first, the moneys shall be transferred to the Program Expense Fund (in
which case such moneys shall be released from the pledge and lien hereunder), unless the
Treasurer determines in his sole discretion that amounts then on deposit in the Program Expense
Fund are sufficient to pay anticipated costs and expenses to be incurred by the County in
connection with administration of LACEP for the next 12 months and anticipated costs and
expenses to be incurred by the County, Paying Agent and the Fiscal Agent in connection with the
Bonds for the next twelve (12) months, in which event the Treasurer may, but is not required to,
apply such excess monies in accordance with paragraphs (ii) and (iii) below;
(ii) second, the remaining moneys shall be transferred to the Reserve Fund to
the extent of any deficiency therein, for application in accordance with Section 4.7 hereof; and
(ii) third, any remaining moneys shall be transferred to the Assessment
Prepayment Account of the Debt Service Fund for application to the redemption of the Bonds
pursuant to Section 3.2 hereof.
(c) Amounts received from, or on behalf of, any property owner as
prepayment under the applicable Assessment Contract shall be deposited by the Fiscal Agent in
the Assessment Prepayment Account of the Debt Service Fund for application pursuant to
Section 4.5(b) hereof. The Fiscal Agent shall deposit in the Assessment Prepayment Account
amounts transferred to such account from the Assessment Bond Reserve Fund pursuant to
Section 4.7 below. Amounts in the Assessment Prepayment Account shall be used to pay the
principal of and redemption premium on Bonds the maturities of which shall have been advanced
pursuant to Parts I 1 or 11.1 of the 1915 Act, codified as Sections 8750 et seq. and 8760 et seq. of
the California Streets and Highways Code. The Paying Agent, at the direction of the Treasurer if
the Paying- Agent is not the Treasurer, shall advance the maturity of and call Bonds for
redemption pursuant to this County Indenture and the 1915 Act whenever and to the extent
surplus monies are on deposit in the Assessment Prepayment Account sufficient to pay the
principal of Bonds in integral $5,000 amounts plus the redemption premium thereon. On or after
each Redemption Date, or prior thereto with the consent of the Treasurer, upon presentation and
surrender thereof, the Paying Agent shall pay the principal of and redemption premium on each
Bond the maturity of which has been so advanced from the Assessment Prepayment Account.
Interest accrued on each such Bond to the earlier of the payment date or Redemption Date shall
be paid from monies transferred to the Paying Agent on or before such date by the Fiscal Agent
from the Assessment Payment Account of the Debt Service Fund.
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(e) Los Angeles County Energy Program Contractual Assessment Limited
Obligation Improvement Bonds Costs of Issuance Fund (the "Costs of Issuance Fund"), within
which there shall be a separate account with appropriate designations for each Series of Bonds.
The funds and accounts established herein may be subdivided into accounts and
sub -accounts, as applicable, to perform the necessary rebate calculations or to administer the
funds as provided in this County Indenture.
Section 4.2. Application of Proceeds of the Series A Bonds. On the Closing
Date for the Series A Bonds, the proceeds of the sale of the Series A Bonds in the amount of
$ shall be paid to the Fiscal Agent and transferred or deposited by the Fiscal Agent as
follows:
(a) $ in the account within the Improvement Fund established for
the Series A Bonds;
(b) $ in the Assessment Bond Reserve Fund, constituting the full
amount of the Assessment Bond Reserve Requirement; and
(c) $ in the account within the Costs of Issuance Fund established
for the Series A Bonds.
Section 4.3. Improvement Fund. The Fiscal Agent hereby agrees to maintain
the Improvement Fund and the accounts therein, into which shall be deposited the balance of the
proceeds of sale of the Bonds pursuant to Section 2.3, after making the deposits to the Escrow
Fund required (if any) by Section 4.9, if any. The Fiscal Agent may establish in the Improvement
Fund one or more accounts as it may deem necessary or convenient for the purpose of holding
the proceeds of separate Series of Bonds. Moneys in the Improvement Fund or in any accounts
therein shall be disbursed by the Fiscal Agent to the County in accordance with Section 4.2(a)
hereof or as otherwise provided in a written request of the County provided to the Fiscal Agent.
Section 4.4. Debt Service Fund and Accounts. (a) The Fiscal Agent hereby
agrees to maintain the Debt Service Fund (the "Debt Service Fund") and the accounts therein
until all payments of principal of and premium (if any) and interest on the Bonds have been
made and all of the Bonds have been paid or redeemed. The Fiscal Agent shall establish within
the Debt Service Fund an Assessment Payment Account and an Assessment Prepayment
Account. All sums received by the County pursuant to the related Contractual Assessment in
connection with the collection of Assessment Installments, including any redemption period
interest and penalties thereon and the proceeds of the exercise of any of the remedies for
delinquent payments available hereunder or under the 1913 Act or the 1915 Act, shall be
deposited and held in the Assessment Payment Account of the Debt Service Fund relating to the
Series of Bonds to which such Revenues are pledged as security.
(b) The Paying Agent shall make payments of interest and principal,
respectively, due and payable with respect to Bonds from monies which shall be transferred to it
by the Fiscal Agent on or before such date from the Assessment Payment Account of the Debt
Service Fund on each Interest Payment Date and each Principal Payment Date. In the event of
any deficiency in the Assessment Payment Account for payment of principal of and interest on
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of the Bonds then called for redemption, and such cancellation shall not constitute an Event of
Default hereunder. The Paying Agent shall mail notice of rescission of redemption in the same
manner notice of redemption was originally provided.
If the Bonds are issued in book -entry form, notice -shall also be provided to the
Securities Depositories and the Information Services.
Section 3.7. Effect of Notice and Availability of Redemption Price. Notice of
redemption having been duly given as aforesaid, and the amount necessary for the redemption
having been made available for that purpose and being available therefor on the date fixed for
such redemption: (1) the Bonds, or portions thereof, designated for redemption shall, on the date
fixed for redemption, become due and payable at the redemption price thereof as provided in this
County Indenture, anything in this County Indenture or in the Bonds to the contrary
notwithstanding; (2) upon presentation and surrender thereof at the office of the Paying Agent,
such Bonds shall be redeemed at the redemption price; (3) from and after the Redemption Date,
the Bonds or portions thereof so designated for redemption shall be deemed to be no longer
Outstanding and such Bonds or portions thereof shall cease to accrue interest; and (4) from and
after the date fixed for redemption no Owner of any of the Bonds or portions thereof so
designated for redemption shall be entitled to any of the benefits of this County Indenture or to
any other rights, except with respect to payment of the redemption price and interest accrued to
the Redemption Date from the amounts so made available.
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.1. Establishment of Funds and Accounts. The following funds and
accounts are hereby created and established and shall be maintained by the Fiscal Agent for the
administration and control of the proceeds of the Bonds, the Revenues and any related moneys:
(a) Los Angeles County Energy Program Contractual Assessment Limited
Obligation Improvement Bonds Improvement Fund (the "Improvement Fund"), within which
there shall be a separate account with appropriate designations for each Series of New Money
Assessment Bonds;
(b) Los Angeles County Energy Program Contractual Assessment Limited
Obligation Improvement Bonds Escrow Fund (the "Escrow Fund"), within which there shall be
a separate account with appropriate designations for each Series of Refunding Assessment
Bonds;
(c) Los Angeles County Energy Program Contractual Assessment Limited
Obligation Improvement Bonds Debt Service Fund (the "Debt Service Fund"), within which
there shall be established (A) the Assessment Payment Account (the "Assessment Payment
Account"); and (B) the Assessment Prepayment Account (the "Assessment Prepayment
Account");
(d) Los Angeles County Energy Program Contractual Assessment Limited
Obligation Improvement Bonds Reserve Fund (the "Assessment Bond Reserve Fund"); and
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for cancellation any amount of Series A Bonds purchased by the County, which Series A Bonds
may be purchased by the County at public or private sale as and when and at such prices as the
County may in its discretion determine. The principal amount of any Series A Bonds so
purchased by the County and tendered to the Paying Agent in any twelve-month period ending
on July 1 in any calendar year shall be credited towards and shall reduce the next mandatory
sinking fund payments required to be made in the order in which they are required to be made
pursuant to this Section 3.3.
Section 3.4. Selection of Bonds for Redemption. Whenever provision is made
in this County Indenture for the redemption of less than all of a Series of Bonds, the Fiscal Agent
shall select the Bonds to be redeemed from all Bonds of a Series not previously called for
redemption, by lot in any manner which the Fiscal Agent in its sole discretion shall deem
appropriate and fair, subject to compliance with Section 8768 of the Streets and Highways Code
as specified in a written certificate of the County. For purposes of such selection, all Bonds of a
Series shall be deemed to be comprised of separate $5,000 denominations and such separate
denominations shall be treated as separate Bonds which may be separately redeemed.
Section 3.5. Partial Redemption of Bonds. Upon surrender of any Bond to be
redeemed in part only, the Paying Agent shall authenticate and deliver to the Owner a new Bond
or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed
portion of the Bond surrendered, with the same interest rate and the same maturity and of the
same Series. Such partial redemption shall be valid upon payment of the amount required to be
paid to such Owner, and the County shall be released and discharged thereupon from all liability
to the extent of such payment.
Section 3.6. Notice of Redemption. The Paying Agent on behalf and at the
expense of the County shall mail (by first class mail) notice of any redemption to the respective
Owners of any Bonds designated for redemption at their respective addresses appearing on the
Registration Books, at least 30 days (or other shorter period upon the consent of the Owners of
any Bonds designed for redemption) but not more than sixty 60 days prior to the date fixed for
redemption. Such notice shall state the date of the notice, the redemption date, the redemption
place and the Redemption Price and shall designate the CUSIP numbers (if any) of the Bonds to
be redeemed, the Bond numbers and the maturity or maturities (except in the event of
redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be
redeemed, and shall require that such Bonds be then surrendered at the office of the Paying
Agent for redemption at the Redemption Price, giving notice also that further interest on such
Bonds will not accrue from and after the date fixed for redemption and with regard to optional
redemption in the event that funds required to pay the redemption price are not on deposit under
the Paying Agent Agreement at the time the notice of redemption is sent, a statement to the effect
that the redemption is conditioned upon the receipt of the appropriate funds required to pay the
redemption price by the Paying Agent on or prior to the redemption date. Neither the failure to
receive any notice so mailed, nor any defect in such notice, shall affect the sufficiency of the
proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from
and after the date fixed for redemption. The County has the right to rescind any optional
redemption from prepayments of unpaid assessments by written notice to the Paying Agent on or
prior to the date fixed for redemption. Any notice of redemption shall be canceled and annulled
if for any reason funds are not available on the date fixed for redemption for the payment in full
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Section 3.2. Optional Redemption of Series A Bonds. The Series A Bonds
maturing on or after September 2, 20_ are subject to redemption prior to maturity, in whole or
in part on any Interest Payment Date, on and after September 2, 20_, pro rata among maturities
and by lot within a maturity, from surplus monies on deposit and available for such purpose in
the Debt Service Fund from sources other than those in the Assessment Prepayment Account, at
the option of the County at the redemption price equal to the principal amount thereof, together
with a premium (expressed as a percentage of the principal amount of Series A Bonds to be
redeemed), plus accrued interest to the date of redemption as set forth in the following table:
Redemption Dates Redemption Premium
Interest Payment Dates Through [March 2, 20
— at least five years from date of issuance]
September 2, 20_ and March 2, 20_
September 2, 20 and March 2, 20_
September 2, 20_ and thereafter
In the event that the County shall elect to redeem the Series A Bonds as provided
in this Section 3.2, the County shall give written notice to the Paying Agent of its election to so
redeem the Series A Bonds, the redemption date and the principal amount of each Series of
Bonds to be redeemed. Such notice shall be given at least [45] days but no more than [75] days
prior to the redemption date.
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds. The
Series A Bonds maturing on September 2, 20_ (the "Series A Term Bonds") are also subject to
mandatory sinking fund redemption in part, by lot, on such September 2 from mandatory sinking
fund payments deposited into the Debt Service Fund, at a redemption price equal to the principal
amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium:
Year Principal Amount
Maturity.
If some but not all of the Series A Term Bonds maturing on September 2, 20_
are redeemed pursuant to Section 3.1 or Section 3.2 'hereof, the principal amount of Series A
Term Bonds maturing on September 2, 20_ to be subsequently redeemed pursuant to this
subsection shall be reduced by the aggregate principal amount of the Series A Term Bonds
maturing on September 2, 20_ so redeemed pursuant to Section 3.1 or Section 3.2 hereof, such
reduction to be allocated among redemption dates in amounts of $5,000 or integral multiples
thereof, as designated by the County in a written certificate of the County filed with the Fiscal
Agent.
In lieu of having the Fiscal Agent deposit cash with the Paying Agent as a
mandatory sinking fund payment, the County shall have the option to tender to the Paying Agent
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that (i) the serial Bonds shall be payable as to principal annually on September 2 of each year in
which principal falls due, and the term Bonds shall have annual mandatory redemption on
September 2, (ii) the Bonds shall be payable as to interest semiannually on March 2 and
September 2 of each year, except that the first installment of interest may be payable on either
March 2 or September 2 and shall become due on the interest payment date which is six months
before the maturity of the fust series of Bonds and the interest shall be payable thereafter
semiannually on March 2 and September 2, (iii) all Bonds of like maturity shall be identical in all
respects, except as to number or denomination, and (iv) serial maturities of serial Bonds or
mandatory sinking fund payments for term Bonds, or any combination thereof, shall be
established to provide for the redemption or payment of such Bonds on or before their respective
maturity dates;
(4) The redemption premiums and terms, if any, for such Bonds;
(5) The form of the Bonds;
(6) The amount to be deposited from the proceeds of sale of such
Bonds or other County funds, if any, in the Assessment Bond Reserve Fund to increase the
amount therein to an amount at least equal to the Assessment Bond Reserve Requirement for all
Outstanding Bonds of the County secured on a parity by the Assessment Installments; and
(7) Such other provisions that are appropriate or necessary and are not
inconsistent with the provisions hereof, and
(ii) The County shall be in compliance with all agreements, conditions,
covenants and terms contained herein and in all Supplemental Indentures required to be observed
or performed by it.
(b) Additional Bonds authorized to be issued under this Section 2.15 may only
be issued if no Event of Default (or any event which, once all notice or grace periods have
passed, would constitute an Event of Default) has occurred and is continuing (unless such default
is to be remedied upon the issuance of such Additional Bonds) and the Assessment Bond
Reserve Requirement is to be satisfied upon the issuance of such Additional Bonds.
Section 2.16. Restrictions on Transfer of Bonds. The transfer of the Bonds shall
be restricted [as determined by the County in connection with applicable law and County policy.]
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds. The Series A Bonds
shall be redeemed prior to maturity, in whole or in part on any Interest Payment Date, pro rata
among maturities and by lot within a maturity, from prepaid assessments on deposit and
available for such purpose in the related Assessment Prepayment Account of the Debt Service
Fund, to the extent of and in the manner set forth in Section 4.4(d) of this County Indenture at
the redemption price equal to 10_% of the principal amount of the Series A Bonds to be
redeemed, together with accrued interest to the date of redemption.
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permitted by and in accordance with this County Indenture and applicable law including, but not
limited to, the 1915 Act.
Section 2.13. Unclaimed Money. To the extent permitted by law, all money
which the Paying Agent shall have received from any source and set aside for the purpose of
paying or redeeming any of the Bonds shall be held for the respective Owners of such Bonds, but
any money which shall be so set aside or deposited by the Paying Agent and which shall remain
unclaimed by the Owners of such Bonds for a period of one year after the date on which any
payment or redemption with respect to such Bonds shall have become due and payable shall be
transferred to the County for use in connection with LACEP; provided, however, that the Paying
Agent, before making such payment, shall cause notice of unclaimed money to be mailed to the
Owners of such Bonds, by first class mail, postage prepaid. Thereafter, the Owners of such
Bonds shall look only to the County for payment and then only to the extent of the amount so
received without any interest thereon.
Section 2.14. Nonnresentment of Bonds. Except as otherwise provided in
Section 2.13 hereof, in the event any Bonds shall not be presented for payment when the
principal or redemption price thereof becomes due, if funds sufficient to pay such Bonds shall be
held by the Paying Agent for the benefit of the Owners thereof, all liability of the County to the
Owners thereof shall forthwith cease and be completely discharged and thereupon it shall be the
duty of the Paying Agent to hold such funds (subject to Section 2.13 hereof), without liability for
interest thereon, for the benefit of the Owners of such Bonds, who shall thereafter be restricted
exclusively to such funds for any claim of whatever nature on or with respect to such Bonds.
Section 2.15. Additional Bonds. (a) The County hereby authorizes and
approves the issuance of Additional Bonds for the purpose of financing further disbursements
under and in accordance with the LACEP, which Additional Bonds shall be issued and delivered
pursuant to Supplemental Indentures and agreements, including additional bond purchase
agreements, as may be approved by the Board of Supervisors from time to time.
The County may issue bonds of equal security with that of the Bonds payable from the
Assessment Installments as provided herein on a parity with any Bonds theretofore issued
hereunder, but only subject to the following conditions:
(i) The issuance of such Bonds shall have been authorized under and pursuant
to the 1915 Act and under and pursuant hereto and shall have been provided for by a
supplemental indenture which shall specify the following:
(1) The proceeds of the sale of such Bonds shall be applied for the
purpose of providing funds to refund any Bonds issued hereunder or for the purpose of funding
additional disbursements in connection with LACEP, which disbursements shall be repaid from
additional Assessments pursuant to additional Assessment Contracts;
(2) The principal amount and designation of such Bonds and the
denomination or denominations of the Bonds;
(3) The date, the maturity date or dates, the interest payment dates and
the dates on which mandatory sinking fund payments are due, if any, for such Bonds; provided,
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then existing nominee, the Bonds will be transferable to such new nominee in accordance with
subsection (f) of this Section 2.10.
(c) In the event that the County determines that it is in the best interests of the
beneficial owners of the Bonds that they be able to obtain bonds, the Paying Agent shall, upon
the written instruction of the County, so notify DTC, whereupon DTC shall notify the
Participants of the availability through DTC of Bonds. In such event, the Bonds will be
transferable in accordance with subsection (f) of this Section 2.10. DTC may determine to
discontinue providing its services with respect to the Bonds at any time by giving written notice
of such discontinuance to the County or the Paying Agent and discharging its responsibilities
with respect thereto under applicable law. In such event, the Bonds will be transferable in
accordance with subsection (f) of this Section 2.10. Whenever DTC requests the County, or the
Paying Agent to do so, the Paying Agent and the County will cooperate with DTC in taking
appropriate action after reasonable notice to arrange for another securities depository to maintain
custody of all Bonds evidencing the Bonds then Outstanding. In such event, the Bonds will be
transferable to such securities depository in accordance with subsection (f) of this Section 2. 10,
and thereafter, all reference in this County Indenture to DTC or its nominee shall be deemed to
refer to such successor securities depository and its nominee, as appropriate.
(d) Notwithstanding any other provision of this County Indenture to the
contrary, so long as all Bonds Outstanding are registered in the name of any nominee of DTC, all
payments with respect to the principal and interest represented by each such Bond and all notices
with respect to each such Bond shall be made and given, respectively, to DTC as provided in the
Representation Letter.
(e) The County shall execute and deliver the Representation Letter and, in
connection with any successor nominee for DTC and any successor depository, enter into
comparable arrangements, and shall have the same rights with respect to its actions thereunder as
it has with respect to its actions under this County Indenture.
(f) hi the event that any transfer or exchange of Bonds is authorized under
subsection (b) or (c) of this Section 2. 10, such transfer or exchange shall be accomplished upon
receipt by the Paying Agent from the registered owner thereof of the Bonds to be transferred or
exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance
with the applicable provisions of Section 2.7. In the event Bonds are issued to holders other than
Cede & Co., its successor as nominee for DTC as holder of all the Bonds, another securities
depository as holder of all the Bonds, or the nominee of such successor securities depository, the
provisions of Section 2.3, Section 2.9 and Article III shall also apply to, among other things, the
registration, exchange and transfer of the Bonds and the method of payment of principal of,
premium, if any, and interest on the Bonds.
Section 2.11. Validity of the Bonds. The validity of the authorization and
issuance of the Bonds shall not be dependent upon the completion of the Improvements or upon
the performance by any person of such person's obligation with respect to the Improvements.
Section 2.12. Refunding of Bonds. The Bonds may be refunded by the County
in accordance with Section 4.9 and may be refunded at any other time by the County as
14
he or she may prescribe, register or transfer or cause to be registered or transferred, on the
Registration Books, Bonds as herein provided.
The County and the Paying Agent may treat the Owner of any Bond whose name
appears on the Registration Books as the absolute Owner of such Bond for any and all purposes,
and the County and the Paying Agent shall not be affected by any notice to the contrary. The
County and the Paying Agent may rely on the address of the Owner as it appears in the
Registration Books for any and all purposes. It shall be the duty of each Owner to give written
notice to the County and the Paying Agent of any change in such Owner's address so that the
Registration Books may be revised accordingly.
Section 2.10. Special Provisions as to Bonds Issued In Book -Entry Form. The
following provisions shall apply only if the Bonds are issued in book -entry form:
(a) Except as otherwise provided in subsections (b) and (c) of this
Section 2. 10, all of the Bonds initially executed and delivered hereunder shall be registered in the
name of Cede & Co., as nominee for DTC, or such other nominee as DTC shall request pursuant
to the Representation Letter. Payment of the principal of and interest on each Bonds registered
in the name of Cede & Co. shall be made to the account, in the manner and at the address
indicated in or pursuant to the Representation Letter delivered to DTC by the County.
(b) The Bonds executed and delivered pursuant to this Section 2.10 shall be in
the form of a single authenticated fully registered bond for each maturity of Bond. The
ownership of all such Bonds shall be registered in the registration books maintained by the
Paying Agent pursuant to Section 2.09 in the name of Cede & Co., as nominee of DTC, or such
other nominee as DTC may request. The Paying Agent and the County may treat DTC (or its
nominee) as the sole and exclusive owner of the Bonds registered in its name for the purposes of
payment of the principal of and interest on such Bonds, selecting any Bonds or portions thereof
to be prepaid, giving any notice permitted or required to be given to an Owner under this County
Indenture, registering the transfer of Bonds, obtaining any consent or other action to be taken by
the Owners and for all other purposes whatsoever; and neither the Paying Agent nor the County
shall be affected by any notice to the contrary. Neither the Paying Agent nor the County shall
have any responsibility or obligation to any Participant (which shall mean, for purposes of this
Section 2. 10, securities brokers and dealers, banks, trust companies, clearing corporations and
other entities, some of whom directly or indirectly own DTC), any person claiming a beneficial
ownership interest in the Bonds under or through DTC or any Participant, or any other person
which is not shown on the registration records as being an Owner, with respect to (i) the
accuracy of any records maintained by DTC or any Participant; (ii) the payment by DTC or any
Participant of any amount in respect of the principal or interest represented by such Series A
Bonds; (iii) any notice which is permitted or required to be given to the Owners under this
County Indenture; (iv) the selection by DTC or any Participant of any person to receive payment
in the event, if any, of a partial prepayment of the Bonds; or (v) any consent given or other action
taken by DTC as Owner. The Paying Agent shall pay all principal of and premium, if any, and
interest on the Bonds only at the times, to the accounts, at the addresses and otherwise in
accordance with the Representation Letter. Upon delivery by DTC to the Paying Agent of
written notice to the effect that DTC has determined to substitute a new nominee in place of its
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obligatory for any purpose until such certificate of authentication and registration shall have been
duly executed by the Paying Agent.
Section 2.7. Registration of Exchange or Transfer. The registration of any
Bond may, in accordance with its terms, be transferred upon the Registration Books by the
person in whose name it is registered, in person or by his or her duly authorized attorney, upon
surrender of such Bond for cancellation at the office of the Paying Agent, accompanied by
delivery of a written instrument of transfer in a form acceptable to the Paying Agent and duly
executed by the Owner or his or her duly authorized attorney. Bonds may be exchanged at the
office of the Paying Agent for a like aggregate principal amount of Bonds of authorized
denominations of the same maturity and interest rate. The Paying Agent will not charge for any
new Bond issued upon any transfer or exchange, but may require the Owner requesting such
transfer or exchange to pay any tax or other governmental charge required to be paid with respect
to such transfer or exchange. Whenever Rny Bond or Bonds shall be surrendered for registration
of transfer or exchange, the Paying Agent shall authenticate and deliver a new Bond or Bonds of
the same maturity, for a like aggregate principal amount; provided that the Paying Agent shall
not be required to register transfers or make exchanges during the 15 days immediately
preceding any Interest Payment Date, and, of (i) Bonds for a period of 15 days next preceding
the date of any selection of Bonds to be redeemed, or (ii) any Bonds chosen for redemption.
Section 2.8. Mutilated, Lost, Destroyed or Stolen Bonds. If any Bond shall
become mutilated, the Treasurer, at the expense of the Owner of such Bond, shall execute, and
the Paying Agent shall thereupon authenticate and deliver a new Bond of like Series, tenor, date,
maturity and aggregate principal amount in authorized denomination in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Paying Agent of the Bond
so mutilated. Every mutilated Bond so surrendered to the Paying Agent shall be cancelled and
destroyed. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the Paying Agent and, if such evidence is satisfactory to
the Paying Agent and indemnity satisfactory to the Paying Agent shall be given, the Treasurer, at
the expense of the Owner, shall execute, the Paying Agent shall thereupon authenticate and
deliver, a new Bond of like Series, tenor and maturity numbered and dated as the Paying Agent
shall determine in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any
such Bond shall have matured or shall have been called for redemption, instead of issuing a
substitute Bond the Paying Agent may pay the same without surrender thereof upon receipt of
indemnity satisfactory to the Fiscal Agent). The Paying Agent may require payment of a
reasonable fee for each new Bond issued under this Section 2.8 and of the expenses which may
be incurred by the County and the Paying Agent. Any Bond issued under the provisions of this
Section in lieu of any Bond alleged to have been lost, destroyed or stolen shall be equally and
proportionately entitled to the benefits hereof with all other Bonds secured hereby. The Paying
Agent shall not treat both the original Bond and any replacement Bond as being Outstanding for
the purpose of determining the principal amount of Bonds which may be executed, authenticated
and delivered hereunder, but both the original and replacement Bond shall be treated as one and
the same.
Section 2.9. Registration Books. The Paying Agent will keep or cause to be
kept, at its principal office, sufficient books for the registration and transfer of the Bonds, and,
upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as
12
construed as a waiver of any such default or acquiescence therein. Every substantive right and
every remedy conferred upon the Owners may be enforced and exercised as often as may be
deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any
remedy shall be brought or taken and the Owner shall prevail, said Owner shall be entitled to
receive reimbursement for reasonable costs, expenses, outlays and attorney's fees and should
said suit, action or proceeding be abandoned, or be determined adversely to the Owners then, and
in every such case, the County and the Owners shall be restored to their former positions, rights
and remedies as if such suit, action or proceeding had not been brought or taken.
Section 8.4. Limited Liability of the County to the Owners: No Liabilit of f the
Coun Except for the collection of the Revenues and the observance and performance of the
other conditions, covenants and terms contained herein or in the 1915 Act or the Contractual
Assessment Law required to be observed or performed by it, the County shall not have any
obligation or liability to the Owners with respect to this County Indenture or the preparation,
authentication, delivery, transfer, exchange or cancellation of the Bonds. The County has
determined that no funds of the County will be available to pay principal of, premium, if any, or
interest on the Bonds. The County has determined that pursuant to the Contractual Assessment
Law, the County will not obligate itself to advance available funds from the County's treasury to
cure any deficiency which may occur in the Debt Service Fund.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Defeasance. If all Outstanding Bonds of a Series shall be paid and
discharged in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest with respect to
all Bonds of such Series then Outstanding, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, at or before maturity, an amount
which, together with the amounts then on deposit in the corresponding account of the Debt
Service Fund, is fully sufficient to pay the principal of and redemption premium (if any) and
interest on all Bonds of such Series then Outstanding as and when the same shall become due
and payable or, in the event of redemption thereof, before their respective Maturity Dates; or
(c) by depositing with the Fiscal Agent Federal Securities in such amount as
the County shall determine, as verified by a nationally recognized Independent Public
Accountant, will, together with the interest to accrue thereon and moneys then on deposit in the
corresponding account of the Debt Service Fund together with the interest to accrue thereon, be
fully sufficient to pay and discharge the principal of, and premium (if any) and interest on all
Bonds of such Series then Outstanding as and when the same shall become due and payable;
then, at the election of the County, and notwithstanding that any Bonds of such Series shall not
have been surrendered for payment, all obligations of the County under this County Indenture
with respect to all Outstanding Bonds of such Series shall cease and terminate, except for (i) the
obligation of the Treasurer to pay or cause to be paid to the Owners of the Bonds of such Series
32
not so surrendered and paid, all sums due thereon, and (ii) the County's obligations under
Section 5.3 [; provided that Authority Revenue Bonds issued by the Authority which are secured
solely by payments to be made by the County pursuant to the related Bond shall have been paid
as provided in the Authority Indenture]. Any funds held by the Fiscal Agent in such account of
the Debt Service Fund, at the time of receipt of such notice from the County, which are not
required for the purpose above mentioned, shall be transferred to the County to be used for the
benefit of the LACEP.
Section 9.2. Cancellation of Bonds. All Bonds surrendered to the Fiscal Agent
for payment upon maturity or redemption shall upon payment therefor be canceled immediately
and forthwith transmitted to or upon the order of the County. All of the canceled Bonds shall be
transferred to and shall remain in the custody of the Fiscal Agent until destroyed by the Fiscal
Agent pursuant to due authorization.
Section 9.3. Execution of Documents and Proof of Ownership. Any request,
direction, consent, revocation of consent, or other instrument in writing required or permitted by
this County Indenture to be signed or executed by Owners may be in any number of concurrent
instruments of similar tenor and may be signed or executed by such Owners in person or by their
attorneys appointed by an instrument in writing for that purpose, or by any bank, trust company
or other depository for such Bonds. Proof of the execution of any such instrument, or of any
instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for
the purposes of this County Indenture (except as otherwise herein provided), if made in the
following manner:
(a) The fact and date of the execution by any Owner or his or her attorney of
any such instrument and of any instrument appointing any such attorney, may be proved by a
signature guarantee of any bank or trust company located within the United States of America.
Where any such instrument is executed by an officer of a corporation or association or a member
of a partnership on behalf of such corporation, association or partnership, such signature
guarantee shall also constitute sufficient proof of his or her authority.
(b) As to any Bond, the person in whose name the same shall be registered in
the Bond Register shall be deemed and regarded as the absolute Owner thereof for all purposes,
and payment of or on account of the principal of any such Bond, and the interest thereon, shall be
made only to or upon the order of the registered Owner thereof or his or her legal representative.
All such payments shall be valid and effectual to satisfy and discharge the liability upon such
Bond and the interest thereon to the extent of the sum or sums so paid. The Fiscal Agent shall
not be affected by any notice to the contrary.
Nothing in this County Indenture shall be construed as limiting the Fiscal Agent
to such proof, it being intended that the Fiscal Agent may accept any other evidence of the
matters herein stated which the Fiscal Agent may deem sufficient. Any request or consent of the
Owner of any Bond shall bind every future Owner of the same Bond in respect of anything done
or suffered to be done by the Fiscal Agent in pursuance of such request or consent.
Section 9.4. Provisions Constitute Contract. In consideration of the purchase
and acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall
33
hold the same from time to time, this County Indenture shall be deemed to be and shall constitute
a contract between the County and the Owners from time to time of the Bonds; and the pledge
made in this County Indenture and the covenants and agreements herein set forth to be
performed on behalf of the County shall be for the equal benefit, protection and security of the
owners of any and all of the Bonds, all of which, regardless of the time or times of their issuance,
shall be of equal rank without preference, priority or distinction of any of the Bonds over any
other thereof except as expressly provided in or permitted by this County Indenture.
Section 9.5. Payment on Business Day. In any case where the date of the
maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for
redemption of any Bonds or the date any action is to be taken pursuant to this County Indenture
is other than a Business Day, the payment of interest or principal (and premium, if any) or the
action need not be made on such date but may be made on the next succeeding day which is a
Business Day with the same force and effect as if made on the date required and no interest shall
accrue for the period after such date.
Section 9.6. Disqualified Bonds. In the event of a later transfer of the Bonds in
accordance with Section 2.7 hereof, in determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this County Indenture, Bonds which are owned or held by or for the account of
the County shall be disregarded and deemed not to be Outstanding for the purpose of any such
determination, provided, however, that for the purpose of determining whether the Fiscal Agent
shall be protected in relying on any such demand, request, direction, consent or waiver, only
Bonds which the Fiscal Agent knows to be so owned or held shall be disregarded.
Section 9.7. Severability. If any covenant, agreement or provision, or any
portion thereof, contained in this County Indenture, or the application thereof to any person or
circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this
County Indenture and the application of any such covenant, agreement or provision, or portion
thereof, to other persons or circumstances, shall be deemed severable and shall not be affected
thereby, and this County Indenture and the Bonds issued pursuant hereto shall remain valid and
the Owners shall retain all valid rights and benefits accorded to them under this County
Indenture and the Constitution and laws of the State.
Section 9.8. Notice. Any notice, demand, direction, request or other instrument
authorized or required by this County Indenture to be given to or filed with the County, the
Paying Agent or the Fiscal Agent shall be deemed to have been sufficiently given or filed for all
purposes of this County Indenture if and when delivered to or sent by certified mail, return
receipt requested to:
34
County: County of Los Angeles
500 West Temple Street, Room 437
Los Angeles, California
Attention: Treasurer and Tax Collector
Paying Agent: County of Los Angeles
500 West Temple Street, Room 437
Los Angeles, California
Attention: Treasurer and Tax Collector
Fiscal Agent: County of Los Angeles
500 West Temple Street, Room 603
Los Angeles, California
Attention: Auditor -Controller
All documents received by the Fiscal Agent or the Paying Agent under the
provisions of this County Indenture shall be retained in its possession, subject at all reasonable
times to the inspection of the County, any Owner, and the agents and representatives thereof.
Section 9.9. No Personal Liability. The County and the officer, agent or
employee thereof shall not be individually or personally liable for the payment of the principal of
or interest on the Bonds; but nothing herein contained shall relieve any such entity, officer, agent
or employee from the performance of any official duty provided by law.
Section 9.10. Employment of Agents by the County. In order to perform its
duties and obligations hereunder, the County may employ such persons or entities as it deems
necessary or advisable. The County shall not be liable for any of the acts or omissions of such
persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall
be fully protected in doing so, upon the opinions, calculations, determinations and directions of
such persons or entities.
Section 9.11. Counterparts. This County Indenture may be executed in multiple
counterparts, each of which shall be regarded for all purposes as an original; and such
counterparts shall constitute but one and the same instrument.
Section 9.12. Headings. Any headings preceding the texts of the several Articles
hereof, and any table of contents appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this County Indenture, nor shall they affect its
meaning, construction or effect.
Section 9.13. Governing Law. All provisions of this County Indenture are to be
governed by the laws of the State.
35
IN WITNESS WHEREOF, the parties have executed this County Indenture
effective the date first above written.
ATTEST:
SACHI A. HAMAI
Executive Officer
of the Board of Supervisors
Deputy
APPROVED AS TO FORM:
ANDREA SHERIDAN ORDIN
COUNTY COUNSEL
Principal Deputy County Counsel
COUNTY OF LOS ANGELES
:°0
Chair of the Board of Supervisors
TREASURER AND TAX COLLECTOR OF THE
COUNTY OF LOS ANGELES
0
Mark J. Saladin
AUDITOR -CONTROLLER OF THE COUNTY
OF LOS ANGELES
m
36
Wendy L. Watanabe
EXHIBIT A
FORM OF BOND
[Transfer of this Bond is subject to the restrictions set forth in the herein referenced Indenture.]
[If this Bond is issued in book -entry form only: then unless this Bond is presented by an
authorized representative of DTC (as defined in the indenture) to the trustee for registration of
transfer, exchange or payment, and any Bond executed and delivered is registered in the name of
Cede & Co. Or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. Or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to
any person is wrongful inasmuch as the registered owner hereof, Cede & Co. has an interest
herein.]
United States of America
State of California
County of Los Angeles
NUMBER [1]
COUNTY OF LOS ANGELES
LOS ANGELES COUNTY ENERGY PROGRAM
CONTRACTUAL ASSESSMENT LIMITED OBLIGATION IMPROVEMENT
[REFUNDING] BOND
SERIES _ (TAXABLE)
MATURITY DATE DATED DATE INTEREST RATE [CUSIP NUMBER]
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Under and by virtue of Chapter 29 of Part 3 of Division 7 of the Streets and
Highways Code of the State of California (the "Contractual Assessment Law") and the
Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and
Highways Code (the "1915 Act"), the County of Los Angeles, State of California (the "County")
hereby promises to pay (but only out of the Revenues as such term is defined in the Indenture,
dated as of 20_ (the "Indenture") by and among the County, the Treasurer and Tax
Collector of the County, as paying agent (the "Paying Agent") to the registered owner hereof or
registered assigns (the "Owner"), and the Auditor -Controller of the County, as fiscal agent (the
"Fiscal Agent") to the Owner, on the Maturity Date identified above, subject to any right of prior
redemption hereinafter mentioned, the principal sum specified above in lawful money of the
United States of America, and to pay interest thereon at a rate of interest determined pursuant to
A-1
Resolution No. of the Board of Supervisors (the "Resolution of Issuance"), adopted on
[May 25, 2010], in like money from the Interest Payment Date (as hereinafter defined) next
preceding the date of authentication and registration of this Bond, unless this Bond is
authenticated and registered (i) on an Interest Payment Date, in which event interest shall be
payable from such date of authentication and registration, (ii) prior to an Interest Payment Date
and after the close of business on the 15th day of the month immediately preceding such Interest
Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) prior
to the close of business on February 15, , in which event it shall bear interest from the
Bond Date stated above, until payment of such principal sum shall have been discharged;
provided, however, that if at the time of authentication of such Bond, interest is in default,
interest on that Bond shall be payable from the last Interest Payment Date to which the interest
has been paid or made available for payment.
The principal of this Bond shall be payable on the Maturity Date. Interest on this
Bond shall be payable semiannually on March 2 and September 2 (each an "Interest Payment
Date") in each year commencing on . Principal of and interest on this Bond shall be
paid by check of the Paying Agent mailed on or before the Interest Payment Date by first class
mail, postage prepaid, or upon satisfaction of certain conditions specified in the Indenture, by
wire transfer or any other method acceptable to the Owner, to the person whose name appears in
the Registrations Books as the Owner of such Bond as of the 15`s day of the calendar month
immediately preceding each Interest Payment Date, to the address of that person on the
Registration Books, provided that the payment of principal of the Bond on the Maturity Date and
the payment of the principal of the Bond and any premium due upon the redemption thereof shall
be payable upon presentation and surrender thereof at maturity or earlier redemption at the office
of the Paying Agent in Los Angeles, California.
This Bond shall bear interest until the principal amount has been paid; provided,
however, that if at the Maturity Date, or if at the redemption date of any principal amount of this
Bond which has been duly called for redemption as proXided in the Indenture, funds are available
for the payment or redemption thereof in full accordance with the terms of the Indenture, such
principal amount shall then cease to bear interest.
This Bond is subject to redemption as set forth in the Indenture.
This Bond is issued by the County under the Contractual Assessment Law, the
1915 Act and the Indenture for the purpose of funding disbursements under certain assessment
contracts in connection with the Los Angeles County Energy Program established by the Board
of Supervisors of the County pursuant to the Contractual Assessment Law. The obligation of the
County to make payments of principal and interest on this Bond is a limited obligation secured
only as set forth in the Indenture.
This Bond is secured by the Revenues, including the moneys in the Series
Account of the Debt Service Fund, and is payable exclusively out of such account. This
Bond and interest thereon are not secured by any other funds of the County. Neither the credit
nor the taxing power of the County is pledged for the payment of this Bond or the interest
thereon, and no Owner of this Bond may compel the exercise of any taxing power by the County
or force the forfeiture of any of its properties. The principal of, and premium (if any) and interest
A-2
on this Bond are not a debt of the County nor a legal or equitable pledge, charge, lien or
encumbrance upon any of the properties of the County, or upon any of their income, receipts or
revenues, other than the Revenues and the funds described in the Indenture.
This Bond is transferable by the Owner hereof, in person or by the Owner's
attorney duly authorized in writing, at the office of the Paying Agent, subject to the terms and
conditions provided in the Indenture, including the payment of certain charges, if any, upon
exchange, transfer, surrender or cancellation of this Bond. Upon transfer, a new registered Bond
or Bonds, of [any authorized denomination or denominations], of the same maturity, and for the
same aggregate principal amount, will be issued to the transferee in exchange therefor.
The Paying Agent shall not be required to exchange or register the transfer of
Bonds during the 15 days immediately preceding any Interest Payment Date or of any Bonds
selected for redemption in advance of maturity.
The Paying Agent and the County may treat the Owner hereof as the absolute
owner for all purposes, and the Paying Agent and the County shall not be affected by any notice
to the contrary.
This Bond or any portion of it in the amount of $5,000 or any integral multiple
thereof, or in such other denomination or denominations as determined by the Treasurer in
accordance with the Indenture, is subject to redemption and payment prior to maturity as set
forth in the Indenture.
This Bond shall not be entitled to any benefit under the 1915 Act or the Indenture,
or become valid or obligatory for any purpose, until the certificate of authentication and
registration hereon endorsed shall have been dated and signed by the Paying Agent.
[The remainder of this page is intentionally left blank.]
A-3
THE COUNTY HAS CERTIFIED, RECITED AND DECLARED that all things,
conditions and acts required by the Constitution and laws of the State of California and the
Indenture to exist, to have happened and to have been performed precedent to and in the
execution, authentication and the delivery of this Bond, do exist, have happened and have been
performed in due time, form and manner, as required by law and the Indenture.
IN WITNESS WHEREOF, the County has caused this Bond to be executed in its
name and on its behalf by the manual or facsimile signatures of its Treasurer and Executive
Officer of the Clerk of the Board of Supervisors, all as of the dated date identified above.
Executive Officer Clerk of the Board of
Supervisors of the County of Los Angeles
Treasurer and Tax Collector of the
County of Los Angeles
PAYING AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within -mentioned Indenture which has
been authenticated and registered on the _ day of 20_.
TREASURER AND TAX COLLECTOR OF THE
COUNTY, as Paying Agent
A-4
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
whose tax identification number is the within -mentioned registered Bond and hereby
irrevocably constitute(s) and appoint(s) attorney
to transfer the same on the books of the Fiscal Agent with full power of substitution in the
premises.
Dated:
Signature guaranteed:
NOTICE. Signature must be guaranteed by a
member of an institution which is a participant
in the Securities Transfer Agent Medallion
Program i STAMP or other similar program.
NOTE: The signature(s) on this Assignment
must correspond with the name(s) as written on
the face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.
A-5
EXHIBIT B
(LETTERHEAD OF THE APPLICABLE DEPARTMENT OF THE
COUNTY OF LOS ANGELES)
PAYMENT REQUEST FORM
Auditor -Controller, as Fiscal Agent
500 West Temple Street, Room 603
Los Angeles, CA 90012
SUBJECT: REQUEST FOR PAYMENT OF COSTS OF ISSUANCE
COUNTY OF LOS ANGELES
LOS ANGELES COUNTY ENERGY PROGRAM
CONTRACTUAL ASSESSMENT LIMITED OBLIGATION IMPROVEMENT BONDS,
SERIES
The Fiscal Agent is hereby requested to pay from the Costs of Issuance Fund established
pursuant to the Indenture, dated as of 1, 2010, executed by and among the County of
Los Angeles, the Treasurer and Tax Collector of the County of Los Angeles, as Paying Agent,
and the Auditor -Controller of the County of Los Angeles, as Fiscal Agent, to the person,
corporation or other entity designated below as Payee, the sum set forth below such designation,
in payment of the Costs of Issuance described below. The amount shown below is due and
payable under a purchase order, contract or other authorization with respect to the Costs of
Issuance described below and has not formed the basis of any prior request for payment.
Payee:
Address:
Amount: S
Description:
ME
Description of Costs of Issuance or portion thereof accepted by the County of Los Angeles and
authorized to be paid to the Payee.
Dated:
Executed by the Authorized
Representative of the County
of Los Angeles
Signature:
Name:
Title:
Payment Request No.
Attachment: (Attach duplicate original of Payee's statement(s) or invoice(s)
EXHIBIT C
SCHEDULE OF ASSESSMENT CONTRACTS
[031
HD&W LLP - 5/10/10 Draft
IiC 0plat"'i
Dated as of 2010
by and among
LOS ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY,
COUNTY OF LOS ANGELES, CALIFORNIA,
TREASURER AND TAX COLLECTOR OF THE COUNTY OF LOS ANGELES
as the Paying Agent
and
AUDITOR -CONTROLLER OF THE COUNTY OF LOS ANGELES
as the Fiscal Agent
Los Angeles County Public Works Financing Authority
Los Angeles County Energy Program
Contractual Assessment Revenue Bonds, Series A
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION; AUTHORIZATION AND PURPOSE OF
BONDS
Section1.1. Defmitions................................................................................................................2
Section 1.2. Rules of Construction..............................................................................................8
Section 1.3. Authorization and Purpose of Bonds.......................................................................9
ARTICLE II
THE BONDS
Section 2.1. Authorization and Purpose of Bonds; Equality of Bonds; Pledge; Limited
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds...........................................................17
Section 3.2. Optional Redemption of Series A Bonds...............................................................17
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds....................................17
Section 3.4. Selection of Bonds for Redemption.......................................................................18
Section 3.5. Partial Redemption of Bonds.................................................................................18
Section 3.6. Notice of Redemption............................................................................................18
Section 3.7. Effect of Notice and Availability of Redemption Price.........................................19
Liability....................................................................................................................9
Section 2.2.
Collection of Assessments.......................................................................................9
Section 2.3.
Issuance of Series A Bonds; Description of Series A Bonds.................................10
Section 2.4.
Medium and Payment............................................................................................11
Section 2.5.
Form of Bonds and Certificate of Authentication and Registration ......................
I 1
Section 2.6.
Execution and Authentication................................................................................12
Section 2.7.
Registration of Exchange or Transfer....................................................................12
Section 2.8.
Mutilated, Lost, Destroyed or Stolen Bonds..........................................................12
Section 2.9.
Registration Books.................................................................................................13
Section 2.10.
Special Provisions as to Bonds Issued In Book -Entry Form.................................13
Section 2.11.
Validity of the Bonds.............................................................................................15
Section2.12.
Refunding of Bonds...............................................................................................15
Section 2.13.
Unclaimed Money..................................................................................................15
Section 2.14.
Nonpresentment of Bonds......................................................................................15
Section 2.15.
Additional Bonds...................................................................................................15
Section 2.16.
Restrictions on Transfer of Bonds.........................................................................17
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds...........................................................17
Section 3.2. Optional Redemption of Series A Bonds...............................................................17
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds....................................17
Section 3.4. Selection of Bonds for Redemption.......................................................................18
Section 3.5. Partial Redemption of Bonds.................................................................................18
Section 3.6. Notice of Redemption............................................................................................18
Section 3.7. Effect of Notice and Availability of Redemption Price.........................................19
ARTICLE IV
1NI : ► [KK�lII'YK"
Section 4.1.
Establishment of Funds and Accounts...................................................................19
Section 4.2.
Application of Proceeds of the Series A Bonds.....................................................20
Section4.3.
Loan Fund..............................................................................................................20
Section 4.4.
Debt Service Fund and Accounts...........................................................................21
Section 4.5.
Prepayment of Loans from Assessment Prepayments...........................................22
Section 4.6.
Costs of Issuance Fund..........................................................................................22
Section4.7.
Reserve Fund.........................................................................................................22
Section 4.8.
Escrow Fund; Refunding Bonds............................................................................24
Section4.9.
Investments............................................................................................................24
Section 5.1.
Section 5.2.
Section 5.3.
Section 5.4.
Section 5.5.
Section 5.6.
Section 5.7.
Section 5.8.
Section 5.9.
Section 5.10.
ARTICLE V
COVENANTS
Compliance with Indenture ...............................
........................25
General...................................................................................................................25
PunctualPayment...................................................................................................25
Extension of Payment of Bonds.............................................................................25
Protectionof Rights...............................................................................................26
AgainstEncumbrances...........................................................................................26
Deferral of Assessments........................................................................................26
Accounting Records and Statements.....................................................................26
Covenantto Foreclose............................................................................................26
FurtherAssurances.................................................................................................27
ARTICLE VI
paying agent and FISCAL AGENT
Section 6.1. Paying Agent and Fiscal Agent..............................................................................27
Section 6.2. Liability of Paying Agent and Fiscal Agent..........................................................28
Section 6.3. Compensation........................................................................................................28
ARTICLE VII
SUPPLEMENTAL INDENTURES
Section 7.1.
Supplemental Indenture Without Owner Consent.................................................28
Section 7.2.
Supplemental Indentures with Owner Consent......................................................29
Section 7.3.
Notice of Supplemental Indenture to Owners........................................................29
ARTICLE VIII
DEFAULT
Section 8.1.
Events of Default...................................................................................................30
Section 8.2.
Remedies on Default..............................................................................................30
Section 8.3.
Remedies Not Exclusive; Non-Waiver..................................................................31
Section 8.4.
Limited Liability of the Authority to the Owners; No Liability of the
Section 9.5.
Authority................................................................................................................31
ARTICLE IX
MISCELLANEOUS
Section9.1.
Defeasance.............................................................................................................31
Section 9.2.
Cancellation of Bonds............................................................................................32
Section 9.3.
Execution of Documents and Proof of Ownership................................................32
Section 9.4.
Provisions Constitute Contract..............................................................................33
Section 9.5.
Payment on Business Day......................................................................................33
Section 9.6.
Disqualified Bonds.................................................................................................33
Section9.7.
Severability.............................................................................................................33
Section9.8.
Notice.....................................................................................................................33
Section 9.9.
No Personal Liability.............................................................................................34
Section 9.10.
Employment of Agents by the Authority...............................................................34
Section9.11.
Counterparts...........................................................................................................34
Section9.12.
Headings................................................................................................................34
Section 9.13.
Governing Law......................................................................................................35
INDENTURE
This INDENTURE (the "Indenture"), dated as of 1, 2010, is executed by
and among the County of Los Angeles (the "County"), a political subdivision of the State of
California (the "State"), the Los Angeles County Public Works Financing Authority (the
"Authority"), a joint exercise of powers entity formed by agreement under the Constitution and
the laws of the State, the Treasurer and Tax Collector of the County, as paying agent (the
"Paying Agent") on behalf of the owners of the herein described Bonds, and the Auditor -
Controller of the County, as fiscal agent (the "Fiscal Agent") on behalf of the owners of the
herein described Bonds.
WHEREAS, Chapter 29 of Part 3 of Division 7 of the Streets and Highways Code
of the State of California (the "Contractual Assessment Law") authorizes counties to assist free
and willing property owners in financing the installation of distributed generation renewable
energy sources and energy and water efficiency improvements (the "Improvements") that are
permanently fixed to residential, commercial, industrial or other real property through a
contractual assessment program; and
WHEREAS, the Board of Supervisors (the `Board of Supervisors") of the
County, previously approved a resolution (the "Resolution of Intention") declaring its intention
to order the implementation of a contractual assessment program to finance the acquisition,
construction and installation of the Improvements pursuant to the Contractual Assessment Law;
and
WHEREAS, following notice duly given and a hearing in accordance with
applicable law, the Board of Supervisors approved a resolution which, among other things,
authorized the establishment of the Los Angeles County Energy Program (the "LACEP") to
finance the acquisition, construction and installation of the Improvements on properties in the
County through the use of contractual assessments pursuant to the Contractual Assessment Law;
and
WHEREAS, pursuant to LACEP, the County will enter into contractual
assessment agreements (each, an "Assessment Contract") with free and willing property owners
(the "Property Owners") pursuant to which the County will assist in financing the acquisition,
construction and installation of Improvements on or in such owners' respective properties and
levy contractual assessments (each, an "Assessment") on the applicable properties in the
amounts set forth in the Assessment Contracts; and
WHEREAS, the Authority will issue Los Angeles County Energy Program
Contractual Assessment Revenue Bonds (the "New Money Bonds' from time to time in one or
more series under and pursuant to the JPA Act and this Indenture for the purpose of funding
loans (the "Loans") to the County, which will disburse such amounts and any other moneys
available therefor to free and willing property owners to finance the Improvements pursuant to
LACEP; and
WHEREAS, the Authority may issue Los Angeles County Energy Program
Contractual Assessment Revenue Refunding Bonds (the "Refunding Bonds" and, together with
1
the New Money Bonds, the "Bonds") from time to time in one or more series under and pursuant
to the JPA Act and this Indenture for the purpose of refinancing the bonds referenced above; and
WHEREAS, in order to provide for the authentication and delivery of the Bonds,
to establish and declare the terms and conditions upon which the Bonds are to be issued and
secured, and to secure the payment of the principal thereof and premium, if any, and interest
thereon, the County and the Authority have authorized the execution and delivery of this
Indenture; and
WHEREAS, all acts, conditions and things required by law to exist, to have
happened and to have been performed precedent to and in connection with the execution and
entering into of this Indenture do exist, have happened and have been performed in due time,
form, and manner as required by law, and the parties hereto are duly authorized to execute and
enter into this Indenture;
NOW, THEREFORE, in consideration of the covenants and provisions herein set
forth and for other valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION;
AUTHORIZATION AND PURPOSE OF BONDS
Section 1.1. Definitions. Unless the context otherwise requires, the following
terms shall have the following meanings for purposes of this Indenture:
"1913 Act" means The Municipal Improvement Act of 1913, being Division 12 of
the Streets and Highways Code of the State.
"1915 Act" means The Improvement Bond Act of 1915, being Division 10 of the
Streets and Highways Code of the State.
"Additional Bonds" means one or more series of bonds issued pursuant to this
Indenture subsequent to the issuance of the Series A Bonds.
"Administrative Expenses" means (i) the ordinary and necessary costs of
administering the levy and collection of the Assessments and all other administrative costs and
incidental expenses related to the Bonds, including, but not limited to, any annual audit fees,
Paying Agent fees, Fiscal Agent fees and such other costs as are paid or payable from amounts
collected pursuant to Sections 8682, 8682.1 or 10312 of the California Streets and Highway
Code and (ii) capitalized costs of establishing and administering LACEP.
"Annual Administrative Assessment" means the annual assessment levied against
the properties of owners participating in LACEP to pay the ordinary and necessary costs incurred
by the County in connection with the administration and collection of the Assessments, from the
administration or registration of any associated bonds, including the Bonds, securities or other
financing arrangements, and from the administration of the Reserve Fund or other related funds.
01
"Assessment Contracts" means, as to each Loan, the agreements by and between
the County and free and willing property owners participating in LACEP and identified in
Exhibit B to the related Loan Agreement, pursuant to which the County agrees to provide
financing to such property owners for the acquisition, construction and installation of
Improvements to such owners' properties.
"Assessment Installments" means, as to each Loan, the installments of principal,
interest and premium, if any, to be paid on the unpaid Assessments by certain property owners
pursuant to the terms of the related Assessment Contracts. The term "Assessment Installments"
does not include the Annual Administrative Assessment.
"Assessment Revenues" means, as to each Loan, the revenues received by the
County in each Fiscal Year from the collection of the annual Assessment Installments, including
any interest and penalties thereon and the proceeds of the exercise of any of the remedies for
delinquent payments available under the related Assessment Contracts or under the Contractual
Assessment Law.
"Assessments" means, as to each Loan, the unpaid assessments levied by the
County pursuant to the Contractual Assessment Law and the related Assessment Contracts
constituting a first lien and charge upon certain real properties in the County.
"Auditor" means the Auditor -Controller of the County.
"Authority" means the Los Angeles County Public Works Financing Authority
created pursuant to the JPA Act, together with its successors and assigns.
"Authority Board" means the Board of Directors of the Authority.
"Authorized Investment" means any legal investment of Authority funds.
"Authorized Representative of the Authority" means the Treasurer of the
Authority and any other person designated by such officers or authorized to act on behalf of the
Authority under or with respect to this Indenture and all other agreements related hereto.
"Authorized Representative of the County" means the Treasurer, the Auditor, the
Program Administrator or any other person designated by such officers and authorized to act on
behalf of the County under or with respect to this Indenture and all other agreements related
hereto.
"Authority Treasurer" means the Treasurer of the Authority.
"Board of Supervisors" means the Board of Supervisors of the County.
"Bond Date" means the dated date of the Bonds, which shall be the Closing Date.
"Bonds" means the contractual assessment revenue bonds authorized by and at
any time Outstanding pursuant to the provisions of this Indenture and as designated pursuant to
Section 2.3 hereof, including the Series A Bonds and any Additional Bonds.
3
(b) Moneys in the Reserve Fund shall be used solely for the purpose of paying
the principal of and interest on the Bonds (i) in the event of early prepayment of assessments in
an amount which shall equal the ratio of the total amount initially provided for the Reserve Fund
to the total amount originally assessed in the proceedings for the Bonds said ratio multiplied by
the amount of the prepayment, (ii) or in the event that the moneys in the Debt Service Fund are
insufficient therefor, and the Fiscal Agent shall withdraw from the Reserve Fund and deposit in
the Debt Service Fund moneys necessary for such purpose.
(c) On each September 2, the Fiscal Agent shall transfer to the Reserve Fund
any excess amounts in the Loan Payment Account of the Debt Service Fund pursuant to the
second paragraph of section 4.4(b). On each September 2 the Fiscal Agent shall, after making
any transfer called for by the preceding sentence, determine whether amounts then on deposit in
the Reserve Fund are less than, equal to or exceed the Reserve Requirement. Any such excess
shall, to the extent permitted by law, be applied by the Fiscal Agent as follows:
(i) First, to the Loan Payment Account of the Debt Service Fund to be applied
to the payment of principal or interest due on the Bonds; and
(ii) Second, to the Loan Prepayment Account of the Debt Service Fund for
application to the redemption of Bonds pursuant to Section 3.2 hereof.
(d) Whenever, after the issuance of the Bonds, an Assessment is prepaid, in
whole or in part, as provided in the 1915 Act, the Fiscal Agent, pursuant to a Written Request of
the Authority, shall transfer from the Reserve Fund to the Debt Service Fund an amount,
specified in such Written Request, equal to the product of the ratio of the original amount of the
Assessment so paid to the original amount of all unpaid Assessments, times the initial Reserve
Requirement; provided, however, no such transfer shall be made if after the transfer the amounts
in the Reserve Fund then remaining will not equal the Reserve Requirement. The Fiscal Agent
may conclusively rely upon the Authority's determination that the remaining funds equal the
Reserve Requirement.
(e) So long as no Event of Default shall have occurred and be continuing any
amount in the Reserve Fund in excess of the Reserve Requirement on December 15 and June 15
of each year shall be withdrawn from the Reserve Fund by the Fiscal Agent and shall be
deposited in the Debt Service Fund.
(f) Whenever the balance in the Reserve Fund is sufficient to retire all the
Outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and
interest on the Assessments shall be discontinued and the Reserve Fund liquidated by the Fiscal
Agent in retirement of the Outstanding Bonds, as directed by a Written Request of the Authority.
In the event that the balance in the Reserve Fund at the time of liquidation exceeds the amount
required to retire all of the Outstanding Bonds, the excess shall, after payment of amounts due to
the Fiscal Agent, be transferred to the Authority to be used in accordance with the JPA Act and
the 1915 Act.
23
accrued on each such Bond to the earlier of the payment date or Redemption Date shall be paid
from monies transferred to the Paying Agent on or before such date by the Fiscal Agent from the
Loan Payment Account of the Debt Service Fund.
(d) If there is a surplus remaining in any account in the Debt Service Fund
after payment of all Bonds and the interest thereon, plus applicable redemption premium (if any),
that surplus shall be released from the pledge and lien hereof and transferred to the County to be
used for the benefit of the LACEP.
Section 4.5. Prepayment of Loans from Assessment Prepayments. (a) The
County shall prepay any Loan to the extent any owner of assessed land may prepay the
Assessment of an Assessment Contract.
(b) Upon prepayment of a Loan pursuant to subsection (a) above, the Fiscal
Agent shall deposit such payment in the Debt Service Fund for payment to Owners of the
corresponding Bonds to be redeemed in accordance with Section 3.1. If notice of redemption is
given in accordance with Section 3.6 hereof, the Bonds so advanced shall mature and become
payable as set forth in Section 3.7 hereof.
Section 4.6. Costs of Issuance Fund. The Fiscal Agent hereby agrees to
maintain the Costs of Issuance Fund and the accounts therein. The moneys in the Costs of
Issuance Fund shall be used and withdrawn by the Fiscal Agent from time to time to pay the
Costs of Issuance upon submission of a Disbursement Request of the Authority, substantially in
the form of Exhibit B hereto, stating (a) the Person to whom payment is to be made, (b) the
amount to be paid, (c) the, purpose for which the obligation was incurred, (d) that such payment
is a proper charge against the applicable account of the Costs of Issuance Fund, and (e) that such
amounts have not been the subject of a prior disbursement from the applicable account of the
Costs of Issuance Fund; in each case together with a statement or invoice for each amount
requested thereunder. On or before 180 days following the issuance of a Series of Bonds, the
Fiscal Agent shall transfer all amounts (if any) remaining in the Costs of Issuance Fund to the
Debt Service Fund.
Section 4.7. Reserve Fund. (a) The Fiscal Agent hereby agrees to maintain and
hold in trust a special fund designated the "Reserve Fund" until all payments of principal of and
premium (if any) and interest on the Bonds have been made and all Bonds have been paid or
redeemed. At the time of issuance of a Series of the Bonds, there shall be deposited in the
Reserve Fund an amount that will, together with amounts on deposit in the Reserve Fund, equal
the Reserve Requirement. There shall be maintained in the Reserve Fund an amount equal to the
Reserve Requirement. Additional deposits shall be made as provided in the 1915 Act and this
Indenture.
The Authority shall cause the Reserve Fund to be administered in accordance with
Part 16 of the 1915 Act; provided that proceeds from redemption or sale of properties, with
respect to which payment of delinquent Assessments and interest thereon was made from the
Reserve Fund, shall be credited to the Reserve Fund.
22
Section 4.4. Debt Service Fund and Accounts. (a) The Fiscal Agent hereby
agrees to maintain the Debt Service Fund (the "Debt Service Fund") and the accounts therein
until all payments of principal of and premium (if any) and interest on the Bonds have been
made and all of the Bonds have been paid or redeemed. The Fiscal Agent shall establish within
the Debt Service Fund a Loan Payment Account and a Loan Prepayment Account. All sums
received by the Authority from the County pursuant to the Loan Agreements in connection with
the collection of Assessment Installments, including any redemption period interest and penalties
thereon and the proceeds of the exercise of any of the remedies for delinquent payments
available hereunder or under the 1913 Act or the 1915 Act, shall be deposited and held in the
Loan Payment Account of the Debt Service Fund relating to the Series of Bonds to which such
Revenues are pledged as security.
(b) The Paying Agent shall make payments of interest and principal,
respectively, due and payable with respect to Bonds from monies which shall be transferred to it
by the Fiscal Agent on or before such date from the Loan Payment Account of the Debt Service
Fund on each Interest Payment Date and each Principal Payment Date. In the event of any
deficiency in the Loan Payment Account, the Fiscal Agent shall, to the extent available, transfer
amounts from the Reserve Fund to the Loan Payment Account or directly to the Paying Agent in
accordance with Section 4.7 hereof for application fust to the payment of interest on the Bonds,
and then to the payment of principal due on such Bonds and then to the payment of principal due
on such Bonds or any portion thereof called for redemption pursuant to Section 3.2 hereof.
On each September 2 beginning on the first Principal Payment Date, all monies in
the Loan Payment Account in excess of the amount necessary to make the payments of principal
of and interest on the Bonds then due or overdue and payable on such date (assuming all Owners
entitled to payment on or before such date take or have taken any and all actions necessary on
their part to receive amounts due them) shall be transferred by the Fiscal Agent (i) first to the
Reserve Fund to the extent of any deficiency therein, for application in accordance with Section
4.7 hereof, and (ii) second, to a special account to be established and maintained by the Fiscal
Agent to be designated the Loan Prepayment Account of the Debt Service Fund for application
to the redemption of the Bonds pursuant to Section 3.2 hereof.
(c) Amounts received from, or on behalf of, the County as prepayment of any
Loan pursuant to Section 4.5(a) shall be deposited by the Fiscal Agent in the Loan Prepayment
Account of the Debt Service Fund for application pursuant to Section 4.5(b) hereof The Fiscal
Agent shall deposit in the Loan Prepayment Account amounts transferred to such account from
the Reserve Fund pursuant to Section 4.7 below. Amounts in the Loan Prepayment Account
shall be used to pay the principal of and redemption premium on Bonds the maturities of which
shall have been advanced pursuant to Parts 11 or 11.1 of the 1915 Act, codified as Sections 8750
et seq. and 8760 et seq. of the California Streets and Highways Code. The Paying Agent, at the
direction of the Treasurer if the Paying Agent is not the Treasurer, shall advance the maturity of
and call Bonds for redemption pursuant to this Indenture and the 1915 Act whenever and to the
extent surplus monies are on deposit in the Loan Prepayment Account sufficient to pay the
principal of Bonds in integral $5,000 amounts plus the redemption premium thereon. On or after
each Redemption Date, or prior thereto with the consent of the Treasurer, upon presentation and
surrender thereof, the Paying Agent shall pay the principal of and redemption premium on each
Bond the maturity of which has been so advanced from the Loan Prepayment Account. Interest
21
(a) Los Angeles County Energy Program Contractual Assessment Revenue
Bonds Loan Fund (the "Loan Fund"), within which there shall be a separate account with
appropriate designations for each Series of New Money Bonds;
(b) Los Angeles County Energy Program Contractual Assessment Revenue
Bonds Escrow Fund (the "Escrow Fund"), within which there shall be a separate account with
appropriate designations for each Series of Refunding Bonds;
(c) Los Angeles County Energy Program Contractual Assessment Revenue
Bonds Debt Service Fund (the "Debt Service Fund"), within which there shall be established
(A) the Loan Payment Account (the "Loan Payment Account'); and (B) the Loan Prepayment
Account (the "Loan Prepayment Account');
(d) Los Angeles County Energy Program Contractual Assessment Revenue
Bonds Reserve Fund (the "Reserve Fund"); and
(e) Los Angeles County Energy Program Contractual Assessment Revenue
Bonds Costs of Issuance Fund (the "Costs of Issuance Fund"), within which there shall be a
separate account with appropriate designations for each Series of Bonds.
The funds and accounts established herein may be subdivided into accounts and
sub -accounts, as applicable, to perform the necessary rebate calculations or to administer the
funds as provided in this Indenture.
Section 4.2. Application of Proceeds of the Series A Bonds. On the Closing
Date for the Series A Bonds, the proceeds of the sale of the Series A Bonds in the amount of
$ shall be paid to the Fiscal Agent and transferred or deposited by the Fiscal Agent as
follows:
(a) $ in the account within the Loan Fund established for the Series
A Bonds and transferred to the County;
(b) $ in the Reserve Fund, constituting the full amount of the
Reserve Requirement; and
(c) $ in the account within the Costs of Issuance Fund established
for the Series A Bonds.
Section 4.3. Loan Fund. The Fiscal Agent hereby agrees to maintain the Loan
Fund and the accounts therein, into which shall be deposited the balance of the proceeds of sale
of the Bonds pursuant to Section 2.3, after making the deposits to the Escrow Fund required (if
any) by Section 4.8, if any. The Fiscal Agent may establish in the Loan Fund one or more
accounts as it may deem necessary or convenient for the purpose of holding the proceeds of
separate Series of Bonds subject to separate Loan Agreements. Moneys in the Loan Fund or in
any accounts therein shall be disbursed by the Fiscal Agent to the County in accordance with
Section 4.2(a) hereof or as otherwise provided in a written request of the County provided to the
Fiscal Agent.
20
the Owners of any Bonds designed for redemption) but not more than sixty 60 days prior to the
date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the
redemption place and the Redemption Price and shall designate the CUSIP numbers (if any) of
the Bonds to be redeemed, the Bond numbers and the maturity or maturities (except in the event
of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be
redeemed, and shall require that such Bonds be then surrendered at the office of the Paying
Agent for redemption at the Redemption Price, giving notice also that further interest on such
Bonds will not accrue from and after the date fixed for redemption and with regard to optional
redemption in the event that funds required to pay the redemption price are not on deposit under
the Paying Agent Agreement at the time the notice of redemption is sent, a statement to the effect
that the redemption is conditioned upon the receipt of the appropriate funds required to pay the
redemption price by the Paying Agent on or prior to the redemption date. Neither the failure to
receive any notice so mailed, nor any defect in such notice, shall affect the sufficiency of the
proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from
and after the date fixed for redemption. The Authority has the right to rescind any optional
redemption from prepayments of unpaid assessments by written notice to the Paying Agent on or
prior to the date fixed for redemption. Any notice of redemption shall be canceled and annulled
if for any reason funds are not available on the date faced for redemption for the payment in full
of the Bonds then called for redemption, and such cancellation shall not constitute an Event of
Default hereunder. The Paying Agent shall mail notice of rescission of redemption in the same
manner notice of redemption was originally provided.
If the Bonds are issued in book -entry form, notice shall also be provided to the
Securities Depositories and the Information Services.
Section 3.7. Effect of Notice and Availability of Redemption Price. Notice of
redemption having been duly given as aforesaid, and the amount necessary for the redemption
having been made available for that purpose and being available therefor on the date fixed for
such redemption: (1) the Bonds, or portions thereof, designated for redemption shall, on the date
fixed for redemption, become due and payable at the redemption price thereof as provided in this
Indenture, anything in this Indenture or in the Bonds to the contrary notwithstanding; (2) upon
presentation and surrender thereof at the office of the Paying Agent, such Bonds shall be
redeemed at the redemption price; (3) from and after the Redemption Date, the Bonds or portions
thereof so designated for redemption shall be deemed to be no longer Outstanding and such
Bonds or portions thereof shall cease to accrue interest; and (4) from and after the date fixed for
redemption no Owner of any of the Bonds or portions thereof so designated for redemption shall
be entitled to any of the benefits of this Indenture or to any other rights, except with respect to
payment of the redemption price and interest accrued to the Redemption Date from the amounts
so made available.
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.1. Establishment of Funds and Accounts. The following funds and
accounts are hereby created and established and shall be maintained by the Fiscal Agent for the
administration and control of the proceeds of the Bonds, the Revenues and any related moneys:
19
Year Principal Amount
Maturity.
If some but not all of the Series A Tenn Bonds maturing on September 2, 20
are redeemed pursuant to Section 3.1 or Section 3.2 hereof, the principal amount of Series A
Term Bonds maturing on September 2, 20, to be subsequently redeemed pursuant to this
subsection shall be reduced by the aggregate principal amount of the Series A Term Bonds
maturing on September 2, 20_ so redeemed pursuant to Section 3.1 or Section 3.2 hereof, such
reduction to be allocated among redemption dates in amounts of $5,000 or integral multiples
thereof, as designated by the Authority in a written certificate of the Authority filed with the
Fiscal Agent.
In lieu of having the Fiscal Agent deposit cash with the Paying Agent as a
mandatory sinking fund payment, the Authority shall have the option to tender to the Paying
Agent for cancellation any amount of Series A Bonds purchased by the Authority or the County,
which Series A Bonds may be purchased by the Authority or the County at public or private sale
as and when and at such prices as the Authority or the County may in its discretion detennine.
The principal amount of any Series A Bonds so purchased by the Authority or the County and
tendered to the Paying Agent in any twelve-month period ending on July I in any calendar year
shall be credited towards and shall reduce the next mandatory sinking fund payments required to
be made in the order in which they are required to be made pursuant to this Section 3.3.
Section 3.4. Selection of Bonds for Redemption. Whenever provision is made
in this Indenture for the redemption of less than all of a Series of Bonds, the Fiscal Agent shall
select the Bonds to be redeemed from all Bonds of a Series not previously called for redemption,
by lot in any manner which the Fiscal Agent in its sole discretion shall deem appropriate and fair,
subject to compliance with Section 8768 of the Streets and Highways Code as specified in a
written certificate of the Authority. For purposes of such selection, all Bonds of a Series shall be
deemed to be comprised of separate $5,000 denominations and such separate denominations
shall be treated as separate Bonds which may be separately redeemed.
Section 3.5. Partial Redemption of Bonds. Upon surrender of any Bond to be
redeemed in part only, the Paying Agent shall authenticate and deliver to the Owner a new Bond
or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed
portion of the Bond surrendered, with the same interest rate and the same maturity and of the
same Series. Such partial redemption shall be valid upon payment of the amount required to be
paid to such Owner, and the Authority shall be released and discharged thereupon from all
liability to the extent of such payment.
Section 3.6. Notice of Redemption. The Paying Agent on behalf and at the
expense of the Authority shall mail (by first class mail) notice of any redemption to the
respective Owners of any Bonds designated for redemption at their respective addresses
appearing on the Registration Books, at least 30 days (or other shorter period upon the consent of
is to be remedied upon the issuance of such Additional Bonds) and the Reserve Requirement is
to be satisfied upon the issuance of such Additional Bonds.
Section 2.16. Restrictions on Transfer of Bonds. The transfer of the Bonds shall
be restricted [as determined by the Authority.]
ARTICLE III
REDEMPTION OF BONDS
Section 3.1. Mandatory Redemption of Series A Bonds. The Series A Bonds
shall be redeemed prior to maturity, in whole or in part on any Interest Payment Date, pro rata
among maturities and by lot within a maturity, from Loan prepayments on deposit and available
for such purpose in the related Loan Prepayment Account of the Debt Service Fund, to the extent
of and in the manner set forth in Section 4.4(c) of this Indenture at the redemption price equal to
10_% of the principal amount of the Series A Bonds to be redeemed, together with accrued
interest to the date of redemption.
Section 3.2. Optional Redemption of Series A Bonds. The Series A Bonds
maturing on or after September 2, 20_ are subject to redemption prior to maturity, in whole or
in part on any Interest Payment Date, on and after September 2, 20_, pro rata among maturities
and by lot within a maturity, from surplus monies on deposit and available for such purpose in
the Debt Service Fund from sources other than those in the Loan Prepayment Account, at the
option of the Authority at the redemption price equal to the principal amount thereof, together
with a premium (expressed as a percentage of the principal amount of Series A Bonds to be
redeemed), plus accrued interest to the date of redemption as set forth in the following table:
Redemption Dates Redemption Premium
Interest Payment Dates Through [March 2, 20_
— at least five years from date of issuance]
September 2, 20 and March 2, 20
September 2, 20_ and March 2, 20_ _
September 2, 20 and thereafter _
In the event that the Authority shall elect to redeem the Series A Bonds as
provided in this Section 3.2, the Authority shall give written notice to the Paying Agent of its
election to so redeem the Series A Bonds, the redemption date and the principal amount of each
Series of Bonds to be redeemed. Such notice shall be given at least [45] days but no more than
[75] days prior to the redemption date.
Section 3.3. Mandatory Sinking Fund Redemption of Series A Bonds. The
Series A Bonds maturing on September 2, 20_ (the "Series A Term Bonds") are also subject to
mandatory sinking fund redemption in part, by lot, on such September 2 from mandatory sinking
fund payments deposited into the Debt Service Fund, at a redemption price equal to the principal
amount thereof, plus accrued interest thereon to the date fixed for redemption, without premium:
17
The Authority may issue bonds of equal security with that of the Bonds payable from the
Assessment Installments as provided herein on a parity with any Bonds theretofore issued
hereunder, but only subject to the following conditions:
(i) The issuance of such Bonds shall have been authorized under and pursuant
to the JPA Act and under and pursuant hereto and shall have been provided for by a
supplemental indenture which shall specify the following:
(1) The proceeds of the sale of.such Bonds shall be applied for the
purpose of providing funds to refund any Bonds issued hereunder or for the purpose of funding
additional Loans to the County, which Loans shall be repaid from additional Assessments;
(2) The principal amount and designation of such Bonds and the
denomination or denominations of the Bonds;
(3) The date, the maturity date or dates, the interest payment dates and
the dates on which mandatory sinking fund payments are due, if any, for such Bonds; provided,
that (i) the serial Bonds shall be payable as to principal annually on September 2 of each year in
which principal falls due, and the term Bonds shall have annual mandatory redemption on
September 2, (ii) the Bonds shall be payable as to interest semiannually on March 2 and
September 2 of each year, except that the first installment of interest may be payable on either
March 2 or September 2 and shall become due on the interest payment date which is six months
before the maturity of the first series of Bonds and the interest shall be payable thereafter
semiannually on March 2 and September 2, (iii) all Bonds of like maturity shall be identical in all
respects, except as to number or denomination, and (iv) serial maturities of serial Bonds or
mandatory sinking fund payments for term Bonds, or any combination thereof, shall be
established to provide for the redemption or payment of such Bonds on or before their respective
maturity dates;
(4) The redemption premiums and terms, if any, for such Bonds;
(5) The form of the Bonds;
(6) The amount to be deposited from the proceeds of sale of such
Bonds or other County funds, if any, in the Reserve Fund to increase the amount therein to an
amount at least equal to the Reserve Requirement for all Outstanding Bonds of the Authority
secured on a parity by the Assessment Installments; and
(7) Such other provisions that are appropriate or necessary and are not
inconsistent with the provisions hereof; and
(ii) The Authority shall be in compliance with all agreements, conditions,
covenants and terms contained herein and in all Supplemental Indentures required to be observed
or performed by it.
(b) Additional Bonds authorized to be issued under this Section 2.15 may only
be issued if no Event of Default (or any event which, once all notice or grace periods have
passed, would constitute an Event of Default) has occurred and is continuing (unless such default
16
exchanged and appropriate instruments of transfer to the permitted transferee, all in accordance
with the applicable provisions of Section 2.7. In the event Bonds are issued to holders other than
Cede & Co., its successor as nominee for DTC as holder of all the Bonds, another securities
depository as holder of all the Bonds, or the nominee of such successor securities depository, the
provisions of Section 2.3, Section 2.9 and Article III shall also apply to, among other things, the
registration, exchange and transfer of the Bonds and the method of payment of principal of,
premium, if any, and interest on the Bonds.
Section 2.11. Validity of the Bonds. The validity of the authorization and
issuance of the Bonds shall not be dependent upon the completion of the Improvements or upon
the performance by any person of such person's obligation with respect to the Improvements.
Section 2.12. Refunding of Bonds. The Bonds may be refunded by the
Authority in accordance with Section 4.8 and may be refunded at any other time by the Authority
as permitted by and in accordance with this Indenture and applicable law including, but not
limited to, the JPA Act.
Section 2.13. Unclaimed Money. To the extent permitted by law, all money
which the Paying Agent shall have received from any source and set aside for the purpose of
paying or redeeming any of the Bonds shall be held for the respective Owners of such Bonds, but
any money which shall be so set aside or deposited by the Paying Agent and which shall remain
unclaimed by the Owners of such Bonds for a period of one year after the date on which any
payment or redemption with respect to such Bonds shall have become due and payable shall be
transferred to the Authority; provided, however, that the Paying Agent, before making such
payment, shall cause notice of unclaimed money to be mailed to the Owners of such Bonds, by
first class mail, postage prepaid. Thereafter, the Owners of such Bonds shall look only to the
Authority for payment and then only to the extent of the amount so received without any interest
thereon.
Section 2.14. Nonpresentment of Bonds. Except as otherwise provided in
Section 2.13 hereof, in the event any Bonds shall not be presented for payment when the
principal or redemption price thereof becomes due, if funds sufficient to pay such Bonds shall be
held by the Paying Agent for the benefit of the Owners thereof, all liability of the Authority to
the Owners thereof shall forthwith cease and be completely discharged and thereupon it shall be
the duty of the Paying Agent to hold such funds (subject to Section 2.13 hereof), without liability
for interest thereon, for the benefit of the Owners of such Bonds, who shall thereafter be
restricted exclusively to such funds for any claim of whatever nature on or with respect to such
Bonds.
Section 2.15. Additional Bonds. (a) The Authority hereby authorizes and
approves the issuance of Additional Bonds for the purpose of financing further County
disbursements under and in accordance with the LACEP, which Additional Bonds shall be issued
and delivered pursuant to Supplemental Indentures and agreements, including additional Loan
Agreements and bond purchase agreements, as may be approved by the Authority Board from
time to time.
15
mean, for purposes of this Section 2. 10, securities brokers and dealers, banks, trust companies,
clearing corporations and other entities, some of whom directly or indirectly own DTC), any
person claiming a beneficial ownership interest in the Bonds under or through DTC or any
Participant, or any other person which is not shown on the registration records as being an
Owner, with respect to (i) the accuracy of any records maintained by DTC or any Participant; (ii)
the payment by DTC or any Participant of any amount in respect of the principal or interest
represented by such Series A Bonds; (iii) any notice which is permitted or required to be given to
the Owners under this Indenture; (iv) the selection by DTC or any Participant of any person to
receive payment in the event, if any, of a partial prepayment of the Bonds; or (v) any consent
given or other action taken by DTC as Owner. The Paying Agent shall pay all principal of and
premium, if any, and interest on the Bonds only at the times, to the accounts, at the addresses and
otherwise in accordance with the Representation Letter. Upon delivery by DTC to the Paying
Agent of written notice to the effect that DTC has determined to substitute a new nominee in
place of its then existing nominee, the Bonds will be transferable to such new nominee in
accordance with subsection (f) of this Section 2.10.
(c) In the event that the Authority determines that it is in the best interests of
the beneficial owners of the Bonds that they be able to obtain bonds, the Paying Agent shall,
upon the written instruction of the Authority, so notify DTC, whereupon DTC shall notify the
Participants of the availability through DTC of Bonds. In such event, the Bonds will be
transferable in accordance with subsection (f) of this Section 2.10. DTC may determine to
discontinue providing its services with respect to the Bonds at any time by giving written notice
of such discontinuance to the County, the Authority or the Paying Agent and discharging its
responsibilities with respect thereto under applicable law. In such event, the Bonds will be
transferable in accordance with subsection (f) of this Section 2.10. Whenever DTC requests the
County, the Authority or the Paying Agent to do so, the Paying Agent, the Authority and the
County will cooperate with DTC in taking appropriate action after reasonable notice to arrange
for another securities depository to maintain custody of all Bonds evidencing the Bonds then
Outstanding. In such event, the Bonds will be transferable to such securities depository in
accordance with subsection (f) of this Section 2.10, and thereafter, all reference in this Indenture
to DTC or its nominee shall be deemed to refer to such successor securities depository and its
nominee, as appropriate.
(d) Notwithstanding any other provision of this Indenture to the contrary, so
long as all Bonds Outstanding are registered in the name of any nominee of DTC, all payments
with respect to the principal and interest represented by each such Bond and all notices with
respect to each such Bond shall be made and given, respectively, to DTC as provided in the
Representation Letter.
(e) The Authority shall execute and deliver the Representation Letter and, in
connection with any successor nominee for DTC and any successor depository, enter into
comparable arrangements, and shall have the same rights with respect to its actions thereunder as
it has with respect to its actions under this Indenture.
(f) In the event that any transfer or exchange of Bonds is authorized under
subsection (b) or (c) of this Section 2. 10, such transfer or exchange shall be accomplished upon
receipt by the Paying Agent from the registered owner thereof of the Bonds to be transferred or
14
called for redemption, instead of issuing a substitute Bond the Paying Agent may pay the same
without surrender thereof upon receipt of indemnity satisfactory to the Fiscal Agent). The Paying
Agent may require payment of a reasonable fee for each new Bond issued under this Section 2.8
and of the expenses which may be incurred by the Authority and the Paying Agent. Any Bond
issued under the provisions of this Section in lieu of any Bond alleged to have been lost,
destroyed or stolen shall be equally and proportionately entitled to the benefits hereof with all
other Bonds secured hereby. The Paying Agent shall not treat both the original Bond and any
replacement Bond as being Outstanding for the purpose of determining the principal amount of
Bonds which may be executed, authenticated and delivered hereunder, but both the original and
replacement Bond shall be treated as one and the same.
Section 2.9. Registration Books. The Paying Agent will keep or cause to be
kept, at its principal office, sufficient books for the registration and transfer of the Bonds, and,
upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as
he or she may prescribe, register or transfer or cause to be registered or transferred, on the
Registration Books, Bonds as herein provided.
The Authority and the Paying Agent may treat the Owner of any Bond whose
name appears on the Registration Books as the absolute Owner of such Bond for any and all
purposes, and the Authority and the Paying Agent shall not be affected by any notice to the
contrary. The Authority and the Paying Agent may rely on the address of the Owner as it appears
in the Registration Books for any and all purposes. It shall be the duty of each Owner to give
written notice to the Authority and the Paying Agent of any change in such Owner's address so
that the Registration Books may be revised accordingly.
Section 2.10. Special Provisions as to Bonds Issued In Book -Entry Form. The
following provisions shall apply only if the Bonds are issued in book -entry form:
(a) Except as otherwise provided in subsections (b) and (c) of this Section
2. 10, all of the Bonds initially executed and delivered hereunder shall be registered in the name
of Cede & Co., as nominee for DTC, or such other nominee as DTC shall request pursuant to the
Representation Letter. Payment of the principal of and interest on each Bonds registered in the
name of Cede & Co. shall be made to the account, in the manner and at the address indicated in
or pursuant to the Representation Letter delivered to DTC by the Authority.
(b) The Bonds executed and delivered pursuant to this Section 2.10 shall be in
the form of a single authenticated fully registered bond for each maturity of Bond. The
ownership of all such Bonds shall be registered in the registration books maintained by the
Paying Agent pursuant to Section 2.09 in the name of Cede & Co., as nominee of DTC, or such
other nominee as DTC may request. The Paying Agent, the Authority and the County may treat
DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for the
purposes of payment of the principal of and interest on such Bonds, selecting any Bonds or
portions thereof to be prepaid, giving any notice permitted or required to be given to an Owner
under this Indenture, registering the transfer of Bonds, obtaining any consent or other action to
be taken by the Owners and for all other purposes whatsoever; and neither the Paying Agent, the
Authority nor the County shall be affected by any notice to the contrary. Neither the Paying
Agent nor the County shall have any responsibility or obligation to any Participant (which shall
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Section 2.6. Execution and Authentication. The Bonds shall be executed by the
manual or facsimile signature of the Chair of the Authority and attested by the manual or
facsimile signature of the Treasurer of the Authority. In case any one or more of the officers who
shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed have
been authenticated and delivered by the Paying Agent (including new Bonds delivered pursuant
to the provisions hereof with reference to the transfer and exchange of Bonds or to lost, stolen,
destroyed or mutilated Bonds), such Bonds may, nevertheless, be authenticated and delivered as
herein provided, and may be issued as if the persons who signed such Bonds had not ceased to
hold such offices.
The Bonds shall bear thereon a certificate of authentication and registration, in the
form set forth in Exhibit A hereto, executed by the manual signature of the Paying Agent. Only
such Bonds as shall bear thereon such certificate of authentication and registration shall be
entitled to any right or benefit under this Indenture, and no Bond shall be valid or obligatory for
any purpose until such certificate of authentication and registration shall have been duly
executed by the Paying Agent.
Section 2.7. Registration of Exchange or Transfer. The registration of any
Bond may, in accordance with its terms, be transferred upon the Registration Books by the
person in whose name it is registered, in person or by his or her duly authorized attorney, upon
surrender of such Bond for cancellation at the office of the Paying Agent, accompanied by
delivery of a written instrument of transfer in a form acceptable to the Paying Agent and duly
executed by the Owner or his or her duly authorized attorney. Bonds may be exchanged at the
office of the Paying Agent for a like aggregate principal amount of Bonds of authorized
denominations. The Authority and the Paying Agent will not charge for any new Bond issued
upon any exchange, but may require the Owner requesting such transfer or exchange to pay any
tax or other governmental charge required to be paid with respect to such transfer or exchange.
Whenever any Bond or Bonds shall be surrendered for registration of transfer or exchange, the
Paying Agent shall authenticate and deliver a new Bond or Bonds; provided that the Paying
Agent shall not be required to register transfers or make exchanges during the 15 days
immediately preceding any Interest Payment Date, and, of (i) Bonds for a period of 15 days next
preceding the date of any selection of Bonds to be redeemed, or (ii) any Bonds chosen for
redemption.
Section 2.8. Mutilated, Lost. Destroyed or Stolen Bonds. If any Bond shall
become mutilated, the Chair of the Authority, at the expense of the Owner of such Bond, shall
execute, and the Paying Agent shall thereupon authenticate and deliver a new Bond of like
Series, tenor, date, maturity and aggregate principal amount in authorized denomination in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Paying
Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Paying Agent shall
be cancelled and destroyed. If any Bond issued hereunder shall be lost, destroyed or stolen,
evidence of such loss, destruction or theft may be submitted to the Paying Agent and, if such
evidence is satisfactory to the Paying Agent and indemnity satisfactory to the Paying Agent shall
be given, the Chair of the Authority, at the expense of the Owner, shall execute, the Paying
Agent shall thereupon authenticate and deliver, a new Bond of like Series, tenor and maturity
numbered and dated as the Paying Agent shall determine in lieu of and in substitution for the
Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall have been
12
(e) If the Series A Bonds are issued in book -entry form, the Series A Bonds
shall be initially registered in the name of "Cede & Co.," as nominee of DTC. If the Series A
Bonds arc issued in certificate form, the Series A Bonds shall be initially registered pursuant to
Section 2.5 hereof. The Series A Bonds shall be evidenced by a single fully registered bond in
the principal amount of the Series A Bonds.
Section 2.4. Medium and Payment. Principal of, and premium (if any) and
interest on the Bonds shall be payable in lawful money of the United States of America. The
principal of each Series of Bonds shall be payable on the respective Maturity Date set forth in the
applicable Bonds. Interest with respect to each Bond shall accrue from the respective Bond Date.
Interest on any Bond shall be payable from the Interest Payment Date next preceding the date of
authentication of that Bond, unless (i) such date of authentication is an Interest Payment Date, in
which event interest shall be payable from such date of authentication, (ii) the date of
authentication is after a Record Date but prior to the immediately succeeding Interest Payment
Date, in which event interest shall be payable from such Interest Payment Date, or (iii) the date
of authentication is prior to the close of business on the first Record Date, in which event interest
shall be payable from the Bond Date; provided, however, that if at the time of authentication of
such Bond, interest is in default, interest on that Bond shall be payable from the last Interest
Payment Date to which the interest has been paid or made available for payment.
Principal of and interest on any Bond shall be paid by check of the Paying Agent
mailed on or before the Interest Payment Date by first class mail, postage prepaid, to the person
whose name appears in the Registration Books as the Owner of such Bond as of the close of
business on the Record Date, to the address that appears on the Registration Books, provided that
the payment of principal of the Bonds on the final Maturity Date and the payment of the
principal of the Bonds and any premium due upon the redemption thereof shall be payable upon
presentation and surrender thereof at maturity or earlier redemption at the office of the Paying
Agent. In addition, upon a request in writing received by the Paying Agent on or before the
applicable Record Date from an Owner of $1,000,000 or more in principal amount of the Bonds
payment shall be made on the Interest Payment Date by wire transfer in immediately available
funds to an account designated by such Owner.
Each Bond shall bear interest until its principal sum has been paid; provided,
however, that if at the Maturity Date of any Bond, or if at the Redemption Date of any Bond
which has been duly called for redemption as herein provided, funds are available for the
payment or redemption thereof in full accordance with the terms of this Indenture, the Bond shall
then cease to bear interest.
Section 2.5. Form of Bonds and Certificate of Authentication and Reeistration.
The Bonds shall be initially issued in the form of a fully registered bond or bonds registered in
the name of the purchaser thereof. The form of the Bond, the form of the certificate of
authentication and the form of registration thereon shall be substantially in the form attached
hereto as Exhibit A and incorporated herein by this reference, with any necessary or appropriate
variations, omissions and insertions as permitted or required hereunder. The Bonds may be
printed, lithographed or typewritten and may contain such reference to any of the provisions of
this Indenture as may be appropriate.
11
proportionate penalties and interest after delinquency as do general taxes on real property.
Nothing in this Indenture or in any Supplemental Indenture shall preclude the redemption prior
to maturity of any Bonds or the payment of the Bonds from proceeds of refunding bonds issued
under any law of the State.
(b) Except for the collection of the Assessment Installments and the
observance and performance of the other conditions, covenants and terms contained herein or in
the 1915 Act or the Contractual Assessment Law required to be observed or performed by it, the
County shall not have any obligation or liability to the Owners with respect to this Indenture or
the Bonds.
Section 2.3. Issuance of Series A Bonds: Description of Series A Bonds. (a)
The Series A Bonds shall consist of such Bonds designated generally as "Los Angeles County
Public Works Financing Authority Los Angeles County Energy Program Contractual
Assessment Revenue Bonds, Series A". Series A Bonds in the aggregate principal amount not to
exceed $ shall be issued for the purposes of funding one or more Loans to the
County, which will disburse such amounts and any other moneys available therefor to free and
willing property owners to finance the Improvements pursuant to LACEP.
(b) The Series A Bonds may be issued in one or more subseries, with the
principal amount of each subseries of Series A Bonds to be determined by the Treasurer.
(c) Each Series of Bonds shall bear a series designation as determined by the
Authority.
(d) The Series A Bonds shall be issued only in fully registered form without
coupons in the denomination of $5,000 or any integral multiple thereof, or in such other
denomination or denominations as determined by the Authority. The Series A Bonds shall be
dated as of their date of delivery and shall mature and be payable on September 2 in the years
and in the principal amounts and shall bear interest as set forth below:
Los Angeles County Energy Program
Contractual Assessment Revenue Bonds, Series A
Maturity Date
(September 2)
Principal
Amount Interest Rate
The interest rate for the Series A Bonds shall be calculated on the basis of a
360 -day year of twelve 30 -day months.
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Section 1.3. Authorization and Purpose of Bonds. The Authority Board has
reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has
found, as a result of such review, and hereby finds and determines that all things, conditions and
acts required by law to exist, happen and be performed precedent to and in the issuance of the
Bonds do exist, have happened and have been performed in due time, form and manner as
required by law, and the Authority is now authorized, pursuant to each and every requirement of
law, to issue the Bonds in the manner and form as in this Indenture provided. The Authority
Board hereby authorizes the issuance of the Bonds pursuant to the JPA Act and this Indenture for
the purpose of providing funds to make the Loans to the County to make disbursements pursuant
to the Assessment Contracts to property owners for the cost of Improvements.
ARTICLE II
THE BONDS
Section 2.1. Authorization and Purpose of Bonds; Equality of Bonds: Pledge;
Limited Liability
(a) The Authority is hereby authorized and directed to execute, and the Fiscal
Agent is hereby authorized and directed upon written request of an Authorized Representative of
the Authority to authenticate and deliver the Bonds. The Authority may authorize the execution,
authentication and delivery of Additional Bonds at any time after the execution, authentication
and delivery of the Bonds only as provided in Section 2.15 hereof, which Additional Bonds shall
contain such additional designation as may be determined by the Authority, including the
designation of Refunding Bonds, as appropriate. The Bonds may be issued in book -entry form
or certificate form.
(b) The Authority hereby pledges and assigns to the Paying Agent and the
Fiscal Agent, as applicable, in trust for the protection and security of the Owners, all of its right,
title and interest in the Revenues, including the payments derived from Assessment Installments
and any foreclosure proceedings relating thereto, for the payment of principal of, premium (if
any) and interest on the Bonds. The Bonds shall be and are equally secured by a pledge of and
lien upon the Revenues.
(c) The Bonds and interest thereon are not payable from the general funds of
the Authority or the County. Neither the credit of the County or the Authority nor the taxing
power of the County is pledged for the payment of the Bonds or the interest thereon, and no
Owner of the Bonds may compel the exercise of any taxing power by the County or force the
forfeiture of any of its property. The principal of, and premium (if any) and interest on the Bonds
are not a debt of the County nor a legal or equitable pledge, charge, lien or encumbrance upon
any of the property of the Authority or the County, or upon any of their income, receipts or
revenues, other than the Revenues.
Section 2.2. Collection of Assessments. (a) The Assessment Installments shall
be payable as provided in the Assessment Contracts and shall be payable in the same manner and
at the same time and in the same installments as general taxes on real property are payable, and
become delinquent at the same times and in the same proportionate amounts and bear the same
7
"Reserve Requirement" means, as of the date of any calculation, which
calculation shall be made by the Fiscal Agent, an amount equal to the least of (i) or
(ii) 10 percent of the total amount of Assessments relating to the Bonds hereunder. The Reserve
Requirement shall be calculated upon each Loan prepayment pursuant to Section [3.2] in
connection a payment or prepayment of an Assessment pursuant to Section 8881 and Section
8884 of the 1915 Act.
"Resolution of Intention" means Resolution No. of the Board of
Supervisors adopted on April 6, 2010.
"Resolution Establishing LACEP" means Resolution No. of the Board
of Supervisors adopted on May 25, 2010.
"Revenues" means (a) all amounts paid by the County to the Authority or the
Fiscal Agent pursuant to the applicable Loan Agreement other than administrative fees and
expenses and indemnity against claims payable to the Authority and the Fiscal Agent, (b) all
moneys deposited and held from time to time by the Fiscal Agent in the corresponding account
of the Debt Service Fund established hereunder with respect to the Bonds, and (c) investment
income with respect to any moneys held by the Fiscal Agent in the corresponding account of the
Debt Service Fund established hereunder with respect to the Bonds.
"Securities Depository" means The Depository Trust Company, 55 Water Street,
50th Floor, New York, N.Y. 10041-0099 Attu. Call Notification Department, Fax (212) 855
7232, or, in accordance with then -current guidelines of the Securities and Exchange
Commission, such other securities depositories, or no such depositories, as the County may
indicate in a Written Request of the Authority delivered to the Paying Agent.
"Series" means each Series of Bonds issued and designated pursuant to and in
accordance with Section 2. 1, Section 2.3 or Section 2.15 hereof.
"Series A Bonds" means the Authority's Los Angeles County Energy Program
Contractual Assessment Revenue Bonds, Series A.
"State" means the State of California.
"Supplemental Indenture" means any indenture adopted by the parties hereto
amendatory of or supplemental to this indenture.
"Treasurer" means the Treasurer and Tax Collector of the County.
"Written Request of the Authority" means a request in writing signed by an
Authorized Representative of the Authority.
Section 1.2. Rules of Construction. All references in this Indenture to
"Sections," and other subdivisions, unless indicated otherwise, are to the corresponding Sections
or subdivisions of this Indenture; and the words "herein," "hereof," "hereunder," and other words
of similar import refer to this Indenture as a whole and not to any particular Section or
subdivision hereof.
"Paying Agent" means the Treasurer and its designated agents, any third party
contractor serving as Paying Agent, and their successors or assigns, acting in the capacity of
registrar, paying agent and transfer agent. The Treasurer is authorized to contract with any third
party to perform the services of Paying Agent under this Indenture.
"Principal Payment Date" means September 2 of each year, commencing
September 2, 20_ with respect to the Series A Bonds.
"Prior Bonds" means any or all (as the context may require) Series of Bonds
designated for refunding with proceeds of a Series of Refunding Bonds.
"Prior Loan" means the loan or loans relating to the Prior Bonds.
"Prior Loan Agreement" means the loan agreement pursuant to which the
Authority loaned proceeds of the Prior Bonds to the County.
"Program Administrator" means the Director of the Internal Services Department
of the County, pursuant to the Resolution of Intention, or any designee of such officer.
"Program Expense Fund" means the fund by that name and established in the
Energy Fund held by the County in connection with the Annual Administrative Assessment and
other amounts received for payment of Administrative Expenses and administered pursuant to
the Loan Agreement.
"Record Date" means, with respect to any Interest Payment Date, the fifteenth day
of the calendar month immediately preceding the applicable Interest Payment Date, whether or
not such day is a Business Day.
"Redemption Date" means, with respect to any Bonds, the date on which such
Bonds have been called for redemption pursuant to Section 3.1 or Section 3.2 of this Indenture
prior to their Maturity Date.
"Redemption Notice" has the meaning provided in Section 3.6 hereof.
"Refunding Bonds" means Bonds issued to finance the refunding of bonds
outstanding under this Indenture or other issuance instrument and secured by loan proceeds
derived from payments of Assessments.
"Registration Books" means the records maintained by the Paying Agent pursuant
to Section 2.9 hereof for the registration and transfer of ownership of the Bonds.
"Representation Letter" means the Blanket Letter of Representations delivered
upon or prior to the issuance of the Bonds to DTC by the Authority.
"Reserve Fund" means the fund created and established pursuant to Section 4.1(d)
hereof.
"Loan" means each loan of proceeds of Bonds by the Authority to the County
pursuant to the terms of the related Loan Agreement for purposes of financing Improvements in
accordance with LACEP and the related Assessment Contracts.
"Loan Agreement" means each Loan Agreement between the Authority, as
lender, and the County, as borrower, with respect to each Series of Bonds, as originally executed
and as may be amended or supplemented from time to time in accordance with the terms thereof.
"Loan Fund" means the fund by that name established and held by the Fiscal
Agent pursuant to Section 4.1 hereof.
"Loan Payment Account" means the account by that name established and held by
the Fiscal Agent pursuant to Section 4.1 hereof with respect to each Series of Bonds issued
hereunder.
"Loan Prepayment Account" means the account by that name established and
held by the Fiscal Agent pursuant to Section 4.1 hereof with respect to each Series of Bonds
issued hereunder.
"Maturity Date" means the date specified in any Bond on which the principal of
such Bond becomes due and payable.
"New Money Bonds" means Bonds issued to finance Improvements in
accordance with LACEP and the related Assessment Contracts.
"Outstanding" means, subject to the provisions of Section 9.6 hereof, all Bonds
theretofore or thereupon being authenticated and delivered by the Paying Agent under this
Indenture except:
(1) Bonds theretofore canceled by the Paying Agent or surrendered to the
Paying Agent for cancellation;
(2) Bonds for the transfer or exchange of or in lieu of or in substitution for
which other Bonds shall have been authenticated and delivered by the Paying Agent
pursuant to this Indenture;
(3) From and after the date fixed for redemption, Bonds or portions thereof
designated for redemption for which notice of redemption has been duly given and the
amount necessary for redemption has been made available for that purpose; and
(4) Bonds for the payment or redemption of which funds or eligible securities
in the necessary amount shall have theretofore been deposited with the Fiscal Agent in
accordance with Section 9.1 hereof (whether on or prior to the maturity or Redemption Date of
such Bonds).
"Owner" when used with respect to any Bond, means the person in whose name
the ownership of such Bond is registered on the Registration Books maintained by the Fiscal
Agent.
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"Fiscal Agent" means (i) the Auditor or his designated agent or (ii) any bank, trust
company, national banking association or other financial institution appointed as fiscal agent for
the Bonds in the manner provided in this Indenture.
"Fiscal Year" means any twelve-month period extending from July 1st in one
calendar year to June 30th of the succeeding calendar year, both dates inclusive, or any other
twelve-month period selected and designated by the Authority as its official fiscal year period.
"Improvements" means the qualifying distributed generation renewable energy
sources and energy and water efficiency improvements acquired, constructed and/or installed on
or in properties in the County under LACEP and the related Assessment Contracts.
"Indenture" means this Indenture, dated as of 1, 2010, by and among the
County, the Authority, the Paying Agent and the Fiscal Agent, as amended or supplemented
pursuant to the terms hereof.
"Independent Public Accountant" means any certified public accountant or firm
of certified public accountants appointed and paid by the Authority or the County who, or each
of whom (i) is in fact independent and not under domination of the Authority or the County;
(ii) does not have any substantial interest, direct or indirect, in the Authority or the County; and
(iii) is not connected with the Authority or the County as an officer or employee of the Authority
or the County but who may be regularly retained to make annual or other audits of the books of,
or reports to, the Authority or the County.
"Information Services" means Financial Information, Inc.'s "Daily Called Bond
Services," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302, Attention: Editor;
Moody's Investors Service "Municipal and Government," 99 Church Street, 8th Floor, New
York, New York 10007, Attention: Municipal News Reports; Kenny S&P, "Notification
Department," 55 Water Street, 45th Floor, New York, New York 10041; and, in accordance with
then current guidelines of the Securities and Exchange Commission, such other addresses and/or
such other services providing information with respect to the Bonds to be redeemed as the
County may designate in a Written Request of the Authority filed with the Fiscal Agent.
"Interest Payment Date" means, with respect to any Bond, March 2 and
September 2 in each year, beginning on March 2 in the year immediately succeeding the August
deadline by which the Assessments of the applicable Assessment Contracts have been enrolled
on the County tax roll, and continuing thereafter so long as any Bonds remain Outstanding.
"JPA Act" means the Joint Exercise of Powers Act (being Chapter 5 of Division 7
of Title 1 of the Government Code of the State, as amended) and all laws amendatory thereof or
supplementing thereto.
"LACEP" means the Los Angeles County Energy Program established pursuant
to Resolution No. of the Board of Supervisors, adopted on [May 25, 2010] under the
Contractual Assessment Law.
5
"Business Day" means any day other than (i) a Saturday or a Sunday, (ii) a day on
which banking institutions in the State or the Federal Reserve System are authorized or obligated
by law or executive order to be closed, or (iii) a day on which the County offices are closed on
account of an official holiday recognized by the County.
"Closing Date" means, with respect to each Series of Bonds the date of initial
delivery of such Series of Bonds.
"Contractual Assessment Law" means Chapter 29 of Part 3 of Division 7 of the
California Streets and Highways Code, commencing with Section 5898.10, and all laws
amendatory thereof or supplemental thereto.
"Costs of Issuance" means all of the costs of issuing the Bonds, including, but not
limited to, all printing and document preparation expenses in connection with this Indenture, the
Bonds and any and all other agreements, instruments, certificates or other documents issued in
connection therewith; legal fees and expenses of counsel with respect to the issuance of the
Bonds; fees and expenses of the financial advisor with respect to the issuance of the Bonds;
underwriters' fees; the initial fees and expenses of the Fiscal Agent and the Paying Agent, if any
(including without limitation, origination fees and first annual fees payable in advance); and
other fees and expenses incurred in connection with the issuance of the Bonds or the
implementation of the financing for the Loans to the extent such fees and expenses are approved
by the Authority.
4.1 hereof.
"County" means the County of Los Angeles, a political subdivision of the State.
"Debt Service Fund" means the fund created and established pursuant to Section
"DTC" means The Depository Trust Company in New York, New York.
"Energy Fund" means the Energy Fund established pursuant to Resolution No.
of the Board of Supervisors, adopted on May 25, 2010.
"Escrow Fund" means the fund by that name created and established pursuant to
Section 4.1 hereof.
"Event of Default" means any occurrence or event specified in and defined by
Section 8.1 hereof.
"Federal Securities" means any of the following which at the time of investment
are legal investments under the laws of the State of California for the funds proposed to be
invested therein: (a) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of the Treasury of
the United States of America); and (b) obligations of any agency, department or instrumentality
of the United States of America the timely payment of principal of and interest on which are
fully guaranteed by the United States of America.
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(g) All amounts remaining in the Reserve Fund in the year in which the last
Assessments become due and payable shall be credited toward said Assessments and transferred
to the Debt Service Fund pursuant to a Written Request of the Authority.
(h) All or a portion of the Reserve Requirement may be satisfied by the
provision of one or more policies of municipal bond insurance or surety bonds issued by a
municipal bond insurer or by a letter of credit issued by a bank, the obligations insured by which
insurer or issued by which bank, as the case may be, having ratings at the time of issuance of
such policy or surety bond or letter of credit equal to "AA" or higher assigned by Fitch or "Aa"
or higher assigned by Moody's or "AA" or higher assigned by Standard & Poor's.
Section 4.8. Escrow Fund: Refunding Bonds. (a) The Fiscal Agent hereby
agrees to maintain the Escrow Fund and the accounts therein, into which shall be deposited net
proceeds of Refunding Bonds to be used to redeem Outstanding Prior Bonds.
(b) In accordance with Section 9.1 of this Indenture, upon the issuance of any
Series of Refunding Bonds, the Authority shall cause to be deposited with the Fiscal Agent in the
applicable account of the Escrow Fund the following: (i) the then Outstanding principal amount
of the Prior Bonds being refunded and defeased by such Series of Refunding Bonds, and
(ii) interest accrued and unpaid on such Prior Bonds to the Redemption Date.
(c) Upon receipt of the moneys described in subsection (b) above, the Fiscal
Agent shall pay such moneys to the Owners of the Prior Bonds for the equal and ratable benefit
of such Owners. A Redemption Notice shall be provided by the Fiscal Agent to the Owners of
the Prior Bonds in accordance with Section 3.6.
(d) The Authority and the Fiscal Agent represent and agree that, concurrently
with the initial deposit of the moneys in the applicable account of the Escrow Fund pursuant to
this Section 4.8, (i) the Prior Bonds will no longer be deemed to be Outstanding and unpaid
within the meaning and with the effect expressed in Section 9.1 of this Indenture, and (ii) the
Prior Loan will no longer be deemed to be outstanding and unpaid within the meaning and with
the effect expressed in the Prior Loan Agreement.
(e) Monies remaining on deposit in any account of the Escrow Fund after
payment of all amounts to the Owners of the applicable Series of Prior Bonds shall be released to
the County for the benefit of the LACEP within five (5) Business Days after such payment to the
Owners of the applicable Series of Prior Bonds,
Section 4.9. Investments. (a) Except for any escrow fund established hereunder
(and the accounts therein), all moneys in any of the funds or accounts established pursuant to this
Indenture shall be invested by the Fiscal Agent solely in Authorized Investments. All moneys in
any escrow fund established hereunder (and the accounts therein) shall be invested by the Fiscal
Agent solely in Federal Securities. Obligations purchased as an investment of moneys in any
fund or account shall be deemed to be part of such fund or account. Moneys in the Debt Service
Fund and the accounts therein shall be invested only in obligations which will by their terms
mature on such dates as to ensure the timely payment of principal and interest on the
corresponding Bonds as the same become due.
W,
(b) All interest or gain derived from the investment of amounts in any of the
funds or accounts hereunder shall be deposited in the fund or account from which such
investment was made. The Fiscal Agent shall incur no liability for losses arising from any
investments made pursuant to this Section.
(c) For the purpose of determining the amount in any fund or account
hereunder, the value of investments credited to such fund or account shall be calculated at the
cost thereof, excluding accrued interest and brokerage commissions, if any.
(d) The Fiscal Agent shall sell at the best price obtainable or present for
redemption any obligations so purchased whenever it may be necessary to do so in order to
provide moneys to meet any payment or transfer for such funds and accounts or from such funds
and accounts. For the purpose of determining at any given time the balance in any fund or
account, any such investments constituting a part of such fund and account shall be valued at
their amortized cost.
ARTICLE V
COVENANTS
So long as any of the Bonds issued hereunder are outstanding, the Authority and
the County makes the following covenants with the Owners (to be performed by the Authority or
its proper officers, agents or employees), which covenants are necessary, convenient and
desirable to secure the Bonds; provided, however, that said covenants do not require the
Authority or the County to expend any funds other than the Revenues.
Section 5.1. Compliance with Indenture. The Authority will faithfully observe
and perform all of the conditions, covenants and requirements of this Indenture required to be
observed or performed by it.
Section 5.2. General. The Authority shall do and perform or cause to be done
and performed all acts and things required to be done or performed by or on behalf of the
Authority under the provisions of this Indenture. The Authority warrants that upon the date of
execution and delivery of the Bonds, all conditions, acts and things required by law and this
Indenture to exist, to have happened and to have been performed precedent to and in the
execution and delivery of such Bonds do exist, have happened and have been performed and the
execution and delivery of the Bonds shall comply in all respects with the applicable laws of the
State.
Section 5.3. Punctual Payment. The Authority shall punctually pay or cause to
be paid the principal, premium (if any) and interest to become due in respect of all the Bonds, in
strict conformity with the terms of the Bonds and of this Indenture, according to the true intent
and meaning thereof, but only out of Revenues and other moneys pledged for such payment as
provided in this Indenture and received by the Authority or the Fiscal Agent hereunder.
Section 5.4. Extension of Payment of Bonds. The Authority shall not directly
or indirectly extend the maturity dates of the Bonds or the time of payment of interest with
respect thereto. Nothing herein shall be deemed to limit the right of the Authority to issue any
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securities for the purpose of providing funds for the redemption of the Bonds and such issuance
shall not be deemed to constitute an extension of the maturity of the Bonds.
Section 5.5. Protection of Rights. The Authority will preserve and protect the
security of the Bonds and the rights of the Owners against all claims and demands of all persons,
and will faithfully perform and abide by all of the covenants, undertakings and provisions
contained in this Indenture or in any Bond issued pursuant to this Indenture and will contest by
court action or otherwise (a) the assertion by any officer of any government unit or any other
person whatsoever against the Authority that (i) the JPA Act or the Contractual Assessment Law
is unconstitutional, (ii) the Assessments are invalid, or (iii) the Assessments cannot be applied by
the County to pay debt service on the Bonds, or (b) any other action affecting the validity of the
Bonds or diluting the security therefor.
Section 5.6. Against Encumbrances. The Authority will not encumber, pledge
or place any charge or lien upon any of the Revenues or other amounts pledged to the Bonds
superior to or on a panty with the pledge and lien herein created for the benefit of the Bonds,
except as permitted by this Indenture.
Section 5.7. Deferral of Assessments. The County will refrain from directly or
indirectly extending or deferring the payment of any Assessment Installment.
Section 5.8. Accounting Records and Statements. The Authority will keep or
cause to be kept proper accounting records in which complete and correct entries shall be made
of all transactions relating to the receipt, deposit and disbursement of the Assessment
Installments, and such accounting records shall be available for inspection upon five (5) business
days' written notice by any Owner or such Owner's agent duly authorized in writing at
reasonable hours and under reasonable conditions.
Section 5.9. Covenant to Foreclose. (a) The County will initiate procedures to
determine or cause to be determined if any Assessment was not paid when due during the fiscal
year ended the prior June 30. If any such assessment was not paid and if the balance in the
Reserve Fund is less than the Reserve Requirement, the County shall, upon the written request of
the Owners pursuant to Section 8.2(b) hereof, send or cause to be sent a notice of delinquency
(and a demand for immediate payment thereof) to the property owner, and if the delinquency
remains uncured within 90 days of such notice, order and cause to be commenced, and thereafter
prosecute to completion pursuant to Section 8830 et seq. of the California Streets and Highways
Code, judicial foreclosure proceedings upon the lien of delinquent unpaid assessments as
necessary or desirable to result in assessment revenues sufficient to pay any delinquent principal
of or interest on the Bonds and satisfy the Reserve Requirement. Upon the redemption or sale of
the real property responsible for such delinquent Assessment Installments, or resale as provided
below, the County shall deposit to the Reserve Fund, the amount of any delinquency advanced
therefrom to the Debt Service Fund for payment of interest on or principal of Bonds.
(b) In the event that real property with an Assessment is neither redeemed by
the owner thereof nor sold to a third party purchaser at such foreclosure sale, the County may,
but shall not be obligated to, cause a credit bid on behalf of and in the name of the County to be
entered in the amount due the County and shall cause a sheriff's deed for said real property to be
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executed in the name of the County. The proceeds from any resale of such real property on
which there is an Assessment shall be applied in the following order: (i) to make any past due
payments of principal of or interest on the Bonds, (ii) to restore the Reserve Fund to the Reserve
Requirement, (iii) to the payment of any continuing costs of the Bonds, and (iv) for the
redemption of Bonds pursuant to Section 3.2 hereof with credit for such redemption credited pro
rata against all Assessments.
(c) In the event that the Treasurer and the County make the determinations
described in the Sections 8770-8772 of the 1915 Act in connection with the prospects of an
ultimate loss accruing to the bondholders, the County, the Treasurer and the Fiscal Agent shall
take the actions required by Sections 8770-8784 of said Act and Owners of Bonds shall be
deemed to have consented to do such things as are required by such Sections of Owners of
Bonds.
Section 5.10. Further Assurances. The Authority will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of its duties under
this Indenture, and for the better assuring and confirming unto the Owners of the Bonds the
rights and benefits provided in this Indenture.
ARTICLE VI
PAYING AGENT AND FISCAL AGENT
Section 6.1. Paying Agent and Fiscal Agent. The Authority hereby appoints
the Treasurer of the County, or his designated agents, as the Paying Agent and the Auditor, or his
designated agents, as the Fiscal Agent for the Bonds.
The Paying Agent is hereby authorized to and shall mail interest payments to the
Owners, select Bonds for redemption, give notice of redemption and maintain the Bond Register.
The Paying Agent is hereby authorized to and shall pay, from funds on deposit for such purposes
hereunder, the principal of and premium, if any, on the Bonds when the same are duly presented
to it for payment at maturity or on call and redemption, provide for the registration of transfer
and exchange of Bonds presented to it for such purposes, provide for the cancellation of Bonds
all as provided in this Indenture, and provide for the authentication of Bonds, and shall perform
all other duties assigned to or imposed on it as provided in this Indenture. The Paying Agent
shall keep accurate records of all Bonds paid and discharged by it.
The Fiscal Agent is also authorized to and shall maintain and administer funds
and accounts established pursuant to Section 4.1 hereof. The Fiscal Agent shall keep accurate
records of all funds administered by it. The Authority further authorizes and designates the
Auditor to perform those functions of the Fiscal Agent set forth herein which, pursuant to the
Contractual Assessment Law and the provisions incorporated therein by reference, are to be
performed by the treasurer.
Each of the initially appointed Paying Agent and Fiscal Agent may contract with
any third parry to perform any or all of their obligations and duties under this Indenture. The
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Paying Agent and Fiscal Agent may each be removed by the Authority and a successor or
successors may be appointed. So long as any Bonds are Outstanding and unpaid, the Paying
Agent, the Fiscal Agent and any successor or successors thereto designated by the Authority
shall continue to be Paying Agent and Fiscal Agent, respectively, of the Authority for all of said
purposes until the designation of a successor or successors.
Section 6.2. Liability of Paving Agent and Fiscal Agent. The recitals of fact
and all promises, covenants and agreements contained herein and in the Bonds shall be taken as
statements, promises, covenants and agreements of the Authority, and the Paying Agent and the
Fiscal Agent assume no responsibility for the correctness of the same and makes no
representations as to the validity or sufficiency of this Indenture or of the Bonds, and shall incur
no responsibility in respect thereof, other than in connection with its duties or obligations set
forth herein or in the Bonds or in the certificate of authentication and registration assigned to or
imposed upon the Paying Agent or the Fiscal Agent, as applicable. The Paying Agent shall be
under no responsibility or duty with respect to the issuance of the Bonds for value. Neither the
Paying Agent nor the Fiscal Agent shall be liable in connection with the performance of their
respective duties hereunder, except for their respective negligence or default.
Section 6.3. Compensation. The Authority shall direct the County to pay, from
the Program Expense Fund, to the Fiscal Agent from time to time reasonable compensation for
all services rendered under this Indenture, and also all reasonable expenses, charges, counsel fees
and other disbursements, including those of its attorneys, agents, and employees, incurred in and
about the performance of their powers and duties under this Indenture. Other than funds on
deposit in the Program Expense Fund, in no event shall the Authority or the County be required
to expend its own funds hereunder or under the Loan Agreements.
ARTICLE VII
SUPPLEMENTAL INDENTURES
Section T.I. Supplemental Indenture Without Owner Consent. The Authority
may from time to time, nd at any time, without notice to or consent of any of the Owners enter
into such indentures or agreements supplemental hereto as shall not be inconsistent with the
terms and provisions hereof (which supplemental indentures or agreements shall thereafter form
a part hereof) for any of the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other provision with
respect to matters or questions arising under this Indenture or in any supplemental indenture,
provided that such action shall not adversely affect the interests of the Owners;
(b) to add to the covenants and agreements of and the limitations and the
restrictions upon the Authority contained in this Indenture other covenants, agreements,
limitations and restrictions to be observed by the Authority which are not contrary to or
inconsistent with this Indenture as theretofore in effect;
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(c) to modify, alter, amend or supplement this Indenture in any other respect
which is not materially adverse to the interests of the Owners; and
(d) to provide for the issuance of any Additional Bonds and to provide the
terms of such Additional Bonds, subject to the conditions and upon compliance with the
procedure set forth in Section 2.15 hereof.
Section 7.2. Supplemental Indentures with Owner Consent. Except as provided
in Section 7. 1, the Owners of not less than sixty percent (60%) in aggregate principal amount of
the Bonds then Outstanding shall have the right to consent to and approve the execution of such
supplemental indentures as shall be deemed necessary or desirable for the purpose of waiving,
modifying, altering, amending, adding to or rescinding, in any particular, any of the terms or
provisions contained in this Indenture or in any supplemental indenture or agreement; provided,
however, that nothing herein shall permit, or be construed as permitting, (a) an extension of the
scheduled date of the principal payment of any Bond, or the payment date of interest on, any
Bond without the consent of the Owner of such Bond, (b) a reduction in the principal amount of,
or redemption price of, any Bond or the rate of interest thereon without the consent of the Owner
of such Bond, (c) a reduction in the percentage of Bonds the Owners of which are required to
consent to such supplemental indenture, without the consent of the Owners of all Bonds then
Outstanding. Except as provided in Section 2.15 hereof, in no event may a modification or
amendment provide for the issuance of additional bonds, notes or other evidences of
indebtedness payable out of the Revenues.
Section 7.3. Notice of Supplemental Indenture to Owners. If at any time the
parties hereto shall desire to enter into an indenture supplemental hereto, which pursuant to the
terms of Section 7.2 shall require the consent of the Owners, the Authority shall cause notice of
the proposed supplemental indenture to be mailed, postage prepaid, to all Owners at their
addresses as they appear in the Registration Books. Such notice shall briefly set forth the nature
of the proposed supplemental indenture and shall state that a copy thereof is on file at the office
of the Authority for inspection by all Owners. The failure of any Owner to receive such notice
shall not affect the validity of such supplemental indenture when consented to and approved as in
Section 7.2 provided. Whenever at any time within one year after the date of the first mailing of
such notice, the Authority shall receive an instrument or instruments purporting to be executed
by the Owners of not less than sixty percent (60%) in aggregate principal amount of the Bonds
then Outstanding, which instrument or instruments shall refer to the proposed supplemental
indenture described in such notice, and shall specifically consent to and approve it substantially
in the form of the copy thereof referred to in such notice as on file with the Authority, such
proposed supplemental indenture, when duly executed by the Authority, shall thereafter become
a part of the proceedings for the issuance of the Bonds. In determining whether the Owners of
the requisite aggregate principal amount of the Bonds have consented to the adoption of any
supplemental indenture, Bonds which are owned by the County, the Authority, or by any person
directly or indirectly controlling or controlled by or under direct or indirect common control with
the County or the Authority, shall be disregarded and shall be treated as though they were not
Outstanding for the purpose of any such determination.
Upon the execution and delivery of any indenture supplemental hereto and the
receipt of consent to any such supplemental indenture from the Owners of the appropriate
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aggregate principal amount of Bonds in instances where such consent is required, this Indenture
shall be, and shall be deemed to be, modified and amended in accordance therewith, and the
respective rights, duties and obligations under this Indenture of the Authority and all Owners of
Bonds then Outstanding shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments.
ARTICLE VIII
DEFAULT
Section 8.1. Events of Default. Any one or more of the following events shall
constitute an "Event of Default':
(a) Default in the due and punctual payment of the principal of or redemption
premium, if any, on any Bond when and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the interest on any Bond when
and as the same shall become due and payable; or
(c) Default by the Authority in the observance of any of the agreements,
conditions or covenants on its part in this Indenture or in the Bonds contained (other than a
payment default referred to in subparagraphs (a) and (b) above), and the continuation of such
default for a period of 60 days after the Authority shall have been given notice in writing of such
default by any Owner; provided that if within 60 days the Authority has commenced curing of
the default and diligently pursues elimination thereof, such period shall be extended to permit
such default to be eliminated.
Section 8.2. Remedies on Default. (a) If any installment of principal or
interest on any Bond is not paid when due, the owner of such Bond shall have the right to
exercise such rights and remedies as are provided to such owner under the Contractual
Assessment Law or under other applicable law.
(b) In the event the Authority fails to take any action to eliminate an Event of
Default under Section 8.1 hereof, the Owners of not less than sixty percent (60%) in aggregate
principal amount of a Series of Outstanding Bonds may institute any suit, action, mandamus or
other proceeding in equity or at law for the protection or enforcement of any right under this
Indenture, but only if such Owners have first made written request of the Authority, after the
right to exercise such powers or right of action shall have occurred, and shall have afforded the
Authority a reasonable opportunity either to proceed to exercise the powers granted herein or
granted under law or to institute such action, suit or proceeding in its name and unless also, the
Authority shall have been offered reasonable security and indemnity against the costs, expenses
and liabilities to be incurred therein or thereby, and the Authority shall have refused or neglected
to comply with such request within a reasonable time. Any moneys recovered in such suit,
action, mandamus or other proceedings shall be applied first to the payment of the reasonable
costs and expenses of the Owners in bringing such suit, action, mandamus or other proceeding,
including reasonable compensation to their agents and attorney.
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(c) The principal of the Bonds shall not be subject to acceleration.
Section 8.3. Remedies Not Exclusive; Non -Waiver. No remedy conferred
hereby upon any Owner is intended to be exclusive of any other remedy, but each such remedy is
cumulative and in addition to every other remedy and may be exercised without exhausting and
without regard to any other remedy conferred by the JPA Act, the Contractual Assessment Law,
or any other law of the State. No waiver of any default or breach of duty or contract by any
Owner shall affect. any subsequent default or breach of duty or contract or shall impair any rights
or remedies on said subsequent default or breach. No delay or omission of any Owner to exercise
any right or power accruing upon any default shall impair any such right or power or shall be
construed as a waiver of any such default or acquiescence therein. Every substantive right and
every remedy conferred upon the Owners may be enforced and exercised as often as may be
deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any
remedy shall be brought or taken and the Owner shall prevail, said Owner shall be entitled to
receive reimbursement for reasonable costs, expenses, outlays and attorney's fees and should
said suit, action or proceeding be abandoned, or be determined adversely to the Owners then, and
in every such case, the Authority and the Owners shall be restored to their former positions,
rights and remedies as if such suit, action or proceeding had not been brought or taken.
Section 8.4. Limited Liability of the Authority to the Owners: No Liability o
the Authority. Except for the collection of the Revenues and the observance and performance of
the other conditions, covenants and terms contained herein or in the JPA Act required to be
observed or performed by it, the Authority shall not have any obligation or liability to the
Owners with respect to this Indenture or the preparation, authentication, delivery, transfer,
exchange or cancellation of the Bonds. The County has determined that no funds of the County
will be available to pay principal of, premium, if any, or interest on the Bonds. The County has
determined that pursuant to the Contractual Assessment Law, the County will not obligate itself
to advance available funds from the County's treasury to cure any deficiency which may occur in
the Debt Service Fund.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Defeasance. If all Outstanding Bonds of a Series shall be paid and
discharged in any one or more of the following ways:
(a) by paying or causing to be paid the principal of and interest with respect to
all Bonds of such Series then Outstanding, as and when the same become due and payable;
(b) by depositing with the Fiscal Agent, at or before maturity, an amount
which, together with the amounts then on deposit in the corresponding account of the Debt
Service Fund, is fully sufficient to pay the principal of and redemption premium (if any) and
interest on all Bonds of such Series then Outstanding as and when the same shall become due
and payable or, in the event of redemption thereof, before their respective Maturity Dates; or
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(c) by depositing with the Fiscal Agent Federal Securities in such amount as
the Authority shall determine, as verified by a nationally recognized Independent Public
Accountant, will, together with the interest to accrue thereon and moneys then on deposit in the
corresponding account of the Debt Service Fund together with the interest to accrue thereon, be
fully sufficient to pay and discharge the principal of, and premium (if any) and interest on all
Bonds of such Series then Outstanding as and when the same shall become due and payable;
then, at the election of the Authority, and notwithstanding that any Bonds of such Series shall not
have been surrendered for payment, all obligations of the Authority under this Indenture with
respect to all Outstanding Bonds of such Series shall cease and terminate, except for (i) the
obligation of the Authority Treasurer to pay or cause to be paid to the Owners of the Bonds of
such Series not so surrendered and paid, all sums due thereon, and (ii) the Authority's
obligations under Section 5.3. Any funds held by the Fiscal Agent in such account of the Debt
Service Fund, at the time of receipt of such notice from the Authority, which are not required for
the purpose above mentioned, shall be transferred to the County to be used for the benefit of the
LACEP.
Section 9.2. Cancellation of Bonds. All Bonds surrendered to the Fiscal Agent
for payment upon maturity or redemption shall upon payment therefor be canceled immediately
and forthwith transmitted to or upon the order of the Authority. All of the canceled Bonds shall
be transferred to and shall remain in the custody of the Fiscal Agent until destroyed by the Fiscal
Agent pursuant to due authorization.
Section 9.3. Execution of Documents and Proof of Ownersbin. Any request,
direction, consent, revocation of consent, or other instrument in writing required or permitted by
this Indenture to be signed or executed by Owners may be in any number of concurrent
instruments of similar tenor and may be signed or executed by such Owners in person or by their
attorneys appointed by an instrument in writing for that purpose, or by any bank, trust company
or other depository for such Bonds. Proof of the execution of any such instrument, or of any
instrument appointing any such attorney, and of the ownership of Bonds shall be sufficient for
the purposes of this Indenture (except as otherwise herein provided), if made in the following
manner:
(a) The fact and date of the execution by any Owner or his or her attorney of
any such instrument and of any instrument appointing any such attorney, may be proved by a
signature guarantee of any bank or trust company located within the United States of America.
Where any such instrument is executed by an officer of a corporation or association or a member
of a partnership on behalf of such corporation, association or partnership, such signature
guarantee shall also constitute sufficient proof of his or her authority.
(b) As to any Bond, the person in whose name the same shall be registered in
the Bond Register shall be deemed and regarded as the absolute Owner thereof for all purposes,
and payment of or on account of the principal of any such Bond, and the interest thereon, shall be
made only to or upon the order of the registered Owner thereof or his or her legal representative.
All such payments shall be valid and effectual to satisfy and discharge the liability upon such
Bond and the interest thereon to the extent of the sum or sums so paid. The Fiscal Agent shall
not be affected by any notice to the contrary.
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Nothing in this Indenture shall be construed as limiting the Fiscal Agent to such
proof, it being intended that the Fiscal Agent may accept any other evidence of the matters
herein stated which the Fiscal Agent may deem sufficient. Any request or consent of the Owner
of any Bond shall bind every future Owner of the same Bond in respect of anything done or
suffered to be done by the Fiscal Agent in pursuance of such request or consent.
Section 9.4. Provisions Constitute Contract. In consideration of the purchase
and acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall
hold the same from time to time, this Indenture shall be deemed to be and shall constitute a
contract between the Authority and the Owners from time to time of the Bonds; and the pledge
made in this Indenture and the covenants and agreements herein set forth to be performed on
behalf of the Authority shall be for the equal benefit, protection and security of the owners of any
and all of the Bonds, all of which, regardless of the time or times of their issuance, shall be of
equal rank without preference, priority or distinction of any of the Bonds over any other thereof
except as expressly provided in or permitted by this Indenture.
Section 9.5. Payment on Business Dav. In any case where the date of the
maturity of interest or of principal (and premium, if any) of the Bonds or the date fixed for
redemption of any Bonds or the date any action is to be taken pursuant to this Indenture is other
than a Business Day, the payment of interest or principal (and premium, if any) or the action
need not be made on such date but may be made on the next succeeding day which is a Business
Day with the same force and effect as if made on the date required and no interest shall accrue
for the period after such date.
Section 9.6. Disqualified Bonds. In the event of a later transfer of the Bonds in
accordance with Section 2.7 hereof, in determining whether the Owners of the requisite
aggregate principal amount of Bonds have concurred in any demand, request, direction, consent
or waiver under this Indenture, Bonds which are owned or held by or for the account of the
Authority or the County shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination, provided, however, that for the purpose of determining whether the
Fiscal Agent shall be protected in relying on any such demand, request, direction, consent or
waiver, only Bonds which the Fiscal Agent knows to be so owned or held shall be disregarded.
Section 9.7. Severability. If any covenant, agreement or provision, or any
portion thereof, contained in this Indenture, or the application thereof to any person or
circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this
Indenture and the application of any such covenant, agreement or provision, or portion thereof,
to other persons or circumstances, shall be deemed severable and shall not be affected thereby,
and this Indenture and the Bonds issued pursuant hereto shall remain valid and the Owners shall
retain all valid rights and benefits accorded to them under this Indenture and the Constitution and
laws of the State.
Section 9.8. Notice. Any notice, demand, direction, request or other instrument
authorized or required by this Indenture to be given to or filed with the County, the Authority,
the Paying Agent or the Fiscal Agent shall be deemed to have been sufficiently given or filed for
all purposes of this Indenture if and when delivered to or sent by certified mail, return receipt
requested to:
33
Authority: Los Angeles County Public Works Financing Authority
County of Los Angeles
500 West Temple Street, Room 437
Los Angeles, California
Attention: Executive Officer
County: County of Los Angeles
500 West Temple Street, Room 437
Los Angeles, California
Attention: Treasurer and Tax Collector
Paying Agent: County of Los Angeles
500 West Temple Street, Room 437
Los Angeles, California
Attention: Treasurer and Tax Collector
Fiscal Agent: County of Los Angeles
500 West Temple Street, Room 603
Los Angeles, California
Attention: Auditor -Controller
All documents received by the Fiscal Agent of the Paying Agent under the
provisions of this Indenture shall be retained in its possession, subject at all reasonable times to
the inspection of the Authority, any Owner, and the agents and representatives thereof.
Section 9.9. No Personal Liability. The Authority, the County and the officer,
agent or employee thereof shall not be individually or personally liable for the payment of the
principal of or interest on the Bonds; but nothing herein contained shall relieve any such entity,
officer, agent or employee from the performance of any official duty provided by law.
Section 9.10. Employment of Agents by the Authority. In order to perform its
duties and obligations hereunder, the Authority may employ such persons or entities as it deems
necessary or advisable. The Authority shall not be liable for any of the acts or omissions of such
persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall
be fully protected in doing so, upon the opinions, calculations, determinations and directions of
such persons or entities.
Section 9.11. C_ ounterparts. This Indenture may be executed in .multiple
counterparts, each of which shall be regarded for all purposes as an original; and such
counterparts shall constitute but one and the same instrument.
Section 9.12. Headings. Any headings preceding the texts of the several Articles
hereof, and any table of contents appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this Indenture, nor shall they affect its meaning,
construction or effect.
34
Section 9.13. Governing Law. All provisions of this Indenture are to be
governed by the laws of the State.
35
IN WITNESS WHEREOF, the parties have executed this Indenture effective the
date first above written.
[SEAL]
ATTEST:
Secretary
0
Deputy
ATTEST:
SACHI A. HAMAI
Executive Officer
of the Board of Supervisors
Deputy
APPROVED AS TO FORM:
ANDREA SHERIDAN ORDIN
COUNTY COUNSEL
By:
Principal Deputy County Counsel
LOS ANGELES COUNTY PUBLIC WORKS
FINANCING AUTHORITY
Um
Chair of the Board of Directors
COUNTY OF LOS ANGELES
0
Chair of the Board of Supervisors
TREASURER AND TAX COLLECTOR OF THE
COUNTY OF LOS ANGELES
By:
Mark J. Saladino
AUDITOR -CONTROLLER OF THE COUNTY
OF LOS ANGELES
36
Wendy L. Watanabe
EXHIBIT A
40 ; 0104 tlr']►117
[Transfer of this Bond is subject to the restrictions set forth in the herein referenced Indenture.]
[If this Bond is issued in book -entry form only: then unless this Bond is presented by an
authorized representative of DTC (as defined in the indenture) to the trustee for registration of
transfer, exchange or payment, and any Bond executed and delivered is registered in the name of
Cede & Co. Or in such other name as is requested by an authorized representative of DTC (and
any payment is made to Cede & Co. Or to such other entity as is requested by an authorized
representative of DTC), any transfer, pledge or other use hereof for value or otherwise by or to
any person is wrongful inasmuch as the registered owner hereof, Cede & Co. Has an interest
herein.]
United States of America
State of California
County of Los Angeles
NUMBER [1]
LOS ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY
LOS ANGELES COUNTY ENERGY PROGRAM
CONTRACTUAL ASSESSMENT REVENUE [REFUNDING] BOND
SERIES ` (TAXABLE)
MATURITY DATE DATED DATE INTEREST RATE [CUSIP NUMBERI
REGISTERED OWNER:
PRINCIPAL AMOUNT:
Under and by virtue of Articles I through 4 (commencing with Section 6500) of
the Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, as
amended (the "JPA Act"), the Los Angeles County Public Works Financing Authority, a joint
powers authority organized and existing under the laws of the State of California (the
"Authority") hereby promises to pay (but only out of the Revenues as such term is defined in the
Indenture, dated as of , 20_ (the "Indenture") by and among the Authority, the County
of Los Angeles, a political subdivision of the State of California (the "County"), the Treasurer
and Tax Collector of the County, as paying agent (the "Paying Agent") to the registered owner
hereof or registered assigns (the "Owner"), and the Auditor -Controller of the County, as fiscal
agent (the "Fiscal Agent") to the Owner, on the Maturity Date identified above, subject to any
A-1
right of prior redemption hereinafter mentioned, the principal sum specified above in lawful
money of the United States of America, and to pay interest thereon at a rate of interest
[determined pursuant to Resolution No. —of the Board of Directors of the Authority (the
"Resolution of Issuance"), adopted on [May 25, 2010], in like money from the Interest Payment
Date (as hereinafter defined) next preceding the date of authentication and registration of this
Bond, unless this Bond is authenticated and registered (i) on an Interest Payment Date, in which
event interest shall be payable from such date of authentication and registration, (ii) prior to an
Interest Payment Date and after the close of business on the 15th day of the month immediately
preceding such Interest Payment Date, in which event it shall bear interest from such Interest
Payment Date, or (iii) prior to the close of business on February 15, , in which event it
shall bear interest from the Bond Date stated above, until payment of such principal sum shall
have been discharged; provided, however, that if at the time of authentication of such Bond,
interest is in default, interest on that Bond shall be payable from the last Interest Payment Date to
which the interest has been paid or made available for payment.
The principal of this Bond shall be payable on the Maturity Date. Interest on this
Bond shall be payable semiannually on March 2 and September 2 (each an "Interest Payment
Date") in each year commencing on . Principal of and interest on this Bond shall be
paid by check of the Paying Agent mailed on or before the Interest Payment Date by first class
mail, postage prepaid, or upon satisfaction of certain conditions specified in the Indenture, by
wire transfer or any other method acceptable to the Owner, to the person whose name appears in
the Registrations Books as the Owner of such Bond as of the 15a day of the calendar month
immediately preceding each Interest Payment Date, to the address of that person on the
Registration Books, provided that the payment of principal of the Bond on the Maturity Date and
the payment of the principal of the Bond and any premium due upon the redemption thereof shall
be payable upon presentation and surrender thereof at maturity or earlier redemption at the office
of the Paying Agent in Los Angeles, California.
This Bond shall bear interest until the principal amount has been paid; provided,
however, that if at the Maturity Date, or if at the redemption date of any principal amount of this
Bond which has been duly called for redemption as provided in the Indenture, funds are available
for the payment or redemption thereof in full accordance with the terms of the Indenture, such
principal amount shall then cease to bear interest.
This Bond is subject to redemption as set forth in the Indenture.
This Bond is issued by the Authority under the JPA Act and the Indenture for the
purpose of funding, pursuant to that certain Loan Agreement, dated as of —1,20—
,20_ (the Loan
Agreement"), by and between the Authority and the County, a loan (the "Loan") to the County of
certain distributed generation renewable energy sources and energy and water efficiency
improvements pursuant to the Los Angeles County Energy Program established by the Board of
Supervisors of the County pursuant to the Contractual Assessment Law. The obligation of the
County to make payments to the Authority of principal and interest on the Loan is a limited
obligation secured only as set forth in the Loan Agreement.
This Bond is secured by the Revenues, including the moneys in the Series
Account of the Debt Service Fund, and is payable exclusively out of such account. This
A-2
Bond and interest thereon are not secured by any other funds of the Authority or the County.
Neither the credit of the County or the Authority nor the taxing power of the County is pledged
for the payment of this Bond or the interest thereon, and no Owner of this Bond may compel the
exercise of any taxing power by the County or force the forfeiture of any of its properties. The
principal of, and premium (if any) and interest on this Bond are not a debt of the County nor a
legal or equitable pledge, charge, lien or encumbrance upon any of the properties of the
Authority or the County, or upon any of their income, receipts or revenues, other than the
Revenues and the funds described in the Indenture. The Authority has no taxing power.
This Bond is transferable by the Owner hereof, in person or by the Owner's
attorney duly authorized in writing, at the office of the Paying Agent, subject to the terms and
conditions provided in the Indenture, including the payment of certain charges, if any, upon
exchange, transfer, surrender or cancellation of this Bond. Upon transfer, a new registered Bond
or Bonds, of [any authorized denomination or denominations], of the same maturity, and for the
same aggregate principal amount, will be issued to the transferee in exchange therefor.
The Paying Agent shall not be required to exchange or register the transfer of
Bonds during the 15 days immediately preceding any Interest Payment Date or of any Bonds
selected for redemption in advance of maturity.
The Paying Agent and the Authority may treat the Owner hereof as the absolute
owner for all purposes, and the Paying Agent and the Authority shall not be affected by any
notice to the contrary.
This Bond or any portion of it in the amount of $5,000 or any integral multiple
thereof, or in such other denomination or denominations as determined by the Authority
Treasurer in accordance with the Indenture, is subject to redemption and payment prior to
maturity as set forth in the Indenture.
This Bond shall not be entitled to any benefit under the JPA Act or the Indenture,
or become valid or obligatory for any purpose, until the certificate of authentication and
registration hereon endorsed shall have been dated and signed by the Paying Agent.
[The remainder of this page is intentionally left blank.]
A-3
THE AUTHORITY HAS CERTIFIED, RECITED AND DECLARED that all
things, conditions and acts required by the Constitution and laws of the State of California and
the Indenture to exist, to have happened and to have been performed precedent to and in the
execution, authentication and the delivery of this Bond, do exist, have happened and have been
performed in due time, form and manner, as required by law and the Indenture.
IN WITNESS WHEREOF, the Authority has caused this Bond to be executed in
its name and on its behalf by the manual or facsimile signatures of its Chair and Treasurer, all as
of the dated date identified above.
ATTEST:
IC
LOS ANGELES COUNTY PUBLIC WORKS
FINANCING AUTHORITY
M
Treasurer
Chair of the Board of Directors
PAYING AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within -mentioned Indenture which has
been authenticated and registered on the _ day of , 20 .
TREASURER AND TAX COLLECTOR OF THE
COUNTY, as Paying Agent
M
A-4
[FORM OF ASSIGNMENT]
For value received the undersigned do(es) hereby sell, assign and transfer unto
whose tax identification number is the within -mentioned registered Bond and hereby
irrevocably constitute(s) and appoint(s) attorney
to transfer the same on the books of the Fiscal Agent with full power of substitution in the
premises.
Dated:
Signature guaranteed:
NOTICE. Signature must be guaranteed by a
member of an institution which is a participant
in the Securities Transfer Agent Medallion
Program i STAMP or other similar program.
NOTE: The signature(s) on this Assignment
must correspond with the name(s) as written on
the face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.
A-5
EXHIBIT B
(LETTERHEAD OF THE APPLICABLE DEPARTMENT OF THE
COUNTY OF LOS ANGELES)
PAYMENT REQUEST FORM
Auditor -Controller, as Fiscal Agent
500 West Temple Street, Room 603
Los Angeles, CA 90012
SUBJECT: REQUEST FOR PAYMENT OF COSTS OF ISSUANCE
LOS ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY
LOS ANGELES COUNTY ENERGY PROGRAM
CONTRACTUAL ASSESSMENT REVENUE BONDS, SERIES
The Fiscal Agent is hereby requested to pay from the Costs of Issuance Fund established
pursuant to the Indenture, dated as of 1, 2010, executed by and among the Los
Angeles County Public Works Financing Authority, the County of Los Angeles, the Treasurer
and Tax Collector of the County of Los Angeles, as Paying Agent, and the Auditor -Controller of
the County of Los Angeles, as Fiscal Agent, to the person, corporation or other entity designated
below as Payee, the sum set forth below such designation, in payment of the Costs of Issuance
described below. The amount shown below is due and payable under a purchase order, contract
or other authorization with respect to the Costs of Issuance described below and has not formed
the basis of any prior request for payment.
Payee:
Address:
Amount: $
Description:
Description of Costs of Issuance or portion thereof accepted by the County of Los Angeles and
authorized to be paid to the Payee.
Dated:
Executed by the Authorized
Representative of the County
of Los Angeles
Signature:
Name:
Title:
Payment Request No.
Attachment: (Attach duplicate original of Payee's statement(s) or invoice(s)
M.
HD&W LLP - 5110110 Draft
LOAN AGREEMENT
Dated as of 1, 2010
by and between the
COUNTY OF LOS ANGELES, CALIFORNIA,
and the
LOS ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY
Relating to
Los Angeles County Public Works Financing Authority
Los Angeles County Energy Program
Contractual Assessment Revenue Bonds, Series A
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section1.1. Definitions................................................................................................................2
Section 1.2. Rules of Construction..............................................................................................3
ARTICLE II
THE LOAN; ESTABLISHMENT OF FUNDS
Section2.1.
Authorization...........................................................................................................3
Section2.2.
Terms of Loan ..........................................................................................................3
Section2.3.
Prepayment..............................................................................................................4
7
Section 2.4.
Application of Loan Proceeds..................................................................................4
ARTICLE III
PLEDGE OF ASSESSMENT REVENUES; APPLICATION OF FUNDS
Section 3.1. Pledge of Assessment Revenues..............................................................................5
Section 3.2. Series A Repayment Account; Deposit of Assessment Revenues ...........................5
Section 3.3. Transfers of Assessment Revenues to Authority.....................................................5
Section 3.4. Program Expense Fund............................................................................................6
Section 3.5. Investment of Moneys; Valuation of Investments...................................................6
ARTICLE IV
OTHER COVENANTS OF THE COUNTY
Section4.1.
Punctual Payment.....................................................................................................7
Section4.2.
Limited Obligation...................................................................................................7
Section4.3.
General...... .............. ............................................. ...............................
7
Section 4.4.
Protection of Security and Rights of Authority.......................................................7
Section 4.5.
Against Encumbrances.............................................................................................7
Section 4.6.
Collection of Assessment.........................................................................................7
Section 4.7.
Accounting Records and Statements.......................................................................7
Section 4.8.
Further Assurances...................................................................................................7
Section 4.9.
Payment of Expenses; Indemnification...................................................................8
i
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.1. Events of Default.....................................................................
Section 5.2. Remedies Not Exclusive; Non -Waiver ....................................
Section 5.3. Limited Liability of the County to the Authority .....................
Section 5.4. Action by Authority Upon Default ..........................................
ARTICLE VI
MISCELLANEOUS
Section 6.1.
Discharge of Loan Agreement ..............................
Section 6.2.
Amendment...........................................................
Section6.3.
Notice.....................................................................
Section 6.4.
Payment on Business Day .....................................
Section 6.5.
Benefits Limited to Parties .....................................
Section 6.6.
No Personal Liability .............................................
Section 6.7.
Severability ............................................................
Section6.8.
Headings................................................................
Section 6.9.
Governing Law ......................................................
Section 6.10.
Counterparts...........................................................
EXHIBIT A - LOAN REPAYMENT SCHEDULE
EXHIBIT B - ASSESSMENT CONTRACT SCHEDULE
ii
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Loan Agreement") is made and entered into
as of 1, 2010, by and between the COUNTY OF LOS ANGELES, a political subdivision
of the State of California (the "County"), and the LOS ANGELES COUNTY PUBLIC WORKS
FINANCING AUTHORITY, a joint powers authority organized and existing under the laws of
the State of California (the "Authority");
WITNESSETH:
WHEREAS, Chapter 29 of Part 3 of Division 7 of the Streets and Highways Code
of the State of California (the "Contractual Assessment Law") authorizes counties to assist free
and willing property owners in financing the installation of distributed generation renewable
energy sources and energy and water efficiency improvements (the "Improvements") that are
permanently fixed to residential, commercial, industrial or other real property through a
contractual assessment program; and
WHEREAS, the Board of Supervisors (the `Board of Supervisors") of the County
of Los Angeles, a political subdivision of the State of California (the "County"), previously
approved a resolution (the "Resolution of Intention") declaring its intention to order the
implementation of a contractual assessment program to finance Improvements pursuant to the
Contractual Assessment Law; and
WHEREAS, following notice duly given and a hearing in accordance with
applicable law, the Board of Supervisors approved a resolution (the "Resolution Establishing the
LACEP") which, among other things, authorized the establishment of the Los Angeles County
Energy Program (the "LACEP") to finance the acquisition, construction and installation of the
Improvements on properties in the County through the use of contractual assessments pursuant to
the Contractual Assessment Law; and
WHEREAS, pursuant to LACEP, the County will enter into contractual
assessment agreements (each, an "Assessment Contract") with free and willing property owners
(the "Property Owners") pursuant to which the County will assist in financing the acquisition,
construction and installation of Improvements on or in such owners' respective properties and
levy contractual assessments (each, an "Assessment") on the applicable properties in the
amounts set forth in the Assessment Contracts; and
WHEREAS, the Board of Directors (the `Board of Directors") of the Los Angeles
County Public Works Financing Authority (the "Authority") previously approved a resolution
(the "Authority Resolution") authorizing the issuance of its Los Angeles County Energy Program
Contractual Assessment Revenue Bonds (the "Bonds") from time to time in one or more series
under and pursuant to Articles 1 through 4 (commencing with Section 6500) of the Chapter 5 of
Division 7 of Title 1 of the Government Code of the State of California (as amended, the "JPA
Act") for the purpose of funding loans (the "Loans") to the County, which will disburse such
loan amounts and any other moneys available therefor to free and willing property owners to
finance the Improvements pursuant to LACEP; and
WHEREAS, the Authority will issue its $ aggregate principal amount of
Los Angeles County Energy Program Contractual Assessment Revenue Bonds, Series A (the
"Series A Bonds") pursuant to the terms of that certain Indenture, dated as of 1, 2010
(the "Indenture"), by and among the County, the Authority, the Auditor -Controller of the
County, as fiscal agent thereunder, and the Treasurer and Tax Collector of the County, as paying
agent thereunder; and
WHEREAS, this Loan Agreement represents one such loan by the Authority to
the County with respect to such the Series A Bonds; and
WHEREAS, the County and the Authority have determined that all acts and
proceedings required by law necessary to make this Loan Agreement, when executed by the
County and the Authority, the valid, binding and legal obligation of the County and to constitute
this Loan Agreement a valid and binding agreement for the uses and purposes herein set forth in
accordance with its terms, have been done and taken, and the execution and delivery of this Loan
Agreement have been in all respects duly authorized;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1: Definitions. Unless the context clearly otherwise requires or
unless otherwise defined herein, the capitalized terms in this Loan Agreement shall have the
respective meanings which such terms have in the Indenture. In addition, the following terms
defined in this Section 1.1 shall, for all purposes of this Loan Agreement, have the respective
meanings herein specified.
"Assessment Contracts" means the agreements by and between the County and
the free and willing property owners identified on the "Assessment Contract Schedule" attached
as Exhibit B to this Loan Agreement.
"Assessment Installments" means the installments of principal, interest and
premium, if any, to be paid on the unpaid Assessments by the owners of the real properties
described in Exhibit B attached hereto.
"Assessment Revenues" means the revenues received by the County in each
Fiscal Year from the collection of the annual Assessment Installments, including any interest and
penalties thereon and the proceeds of the exercise of any of the remedies for delinquent
payments available under the related Assessment Contracts or under the Contractual Assessment
Law.
"Assessments" means the unpaid assessments levied by the County pursuant to
the Contractual Assessment Law and the related Assessment Contracts, constituting a first lien
and charge upon the real properties described in Exhibit B attached hereto.
2
"Event of Default" means any of the events described in Section 5.1 of this Loan
Agreement.
"Loan" means the loan made by the Authority to the County pursuant to
Section 2.1 of this Loan Agreement.
"Loan Agreement" means this Loan Agreement by and between the County and
the Authority, as amended or supplemented pursuant to the provisions hereof.
"Loan Maturity Date" shall be the same date as the Maturity Date with respect to
"Series A Repayment Account" means the account by that name established and
held hereunder by the County within the Energy Fund pursuant to Section 3.2 of this Loan
Agreement.
"Written Request of the County" means a request in writing signed by an
Authorized Representative of the County.
Section 1.2. Rules of Construction. All references herein to "Articles,"
"Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of
this Loan Agreement, and the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Loan Agreement as a whole and not to any particular Article, Section or
subdivision hereof.
ARTICLE II
THE LOAN; ESTABLISHMENT OF FUNDS
Section 2.1. Authorization. The Authority hereby agrees to lend to the County,
from the proceeds of the sale of the Series A Bonds deposited in the Loan Fund established
under the Indenture, the aggregate principal amount of dollars under and
subject to the terms of this Loan Agreement, the Contractual Assessment Law, and the JPA Act.
This Loan Agreement constitutes a continuing agreement with the Authority to secure the full
and final payment of the Loan, subject to the covenants, agreements, provisions and conditions
herein contained.
Section 2.2. Terms of Loan. The principal of the Loan shall be payable no later
than the second (2nd) Business Day prior to the Loan Maturity Date. Interest on the Loan shall
be calculated on the basis of a 360 -day year of twelve 30 -day months. The first semi-annual
installment of interest shall accrue from and including the Closing Date to but not including the
next succeeding Interest Payment Date. Each succeeding semi-annual installment of interest shall
accrue from and including the Interest Payment Date occurring at the beginning of such semi-
annual period to but not including the next succeeding Interest Payment Date. Principal of and
interest on the Loan shall be payable in each of the years and in the amounts set forth on
Exhibit A hereto.
Principal of and interest on the Loan shall be payable by the County to the
Authority from moneys deposited in the Series A Repayment Account pursuant to Section 3.2
hereof, in immediately available funds which constitute lawful money of the United States of
America. Payment of such principal and interest shall be secured, and amounts for the payment
thereof shall be deposited by the Authority with the Fiscal Agent at the times, as set forth in
Article III hereof.
Section 2.3. Prenayment.
(a) Mandatory Prepayment. (i) The principal of the Loan shall be prepaid
Prior to maturity in whole or in part [on the Business Day preceding] any Interest Payment Date,
from prepaid assessments on deposit and available for such purpose in the Series A Repayment
Account of the Energy Fund, at a prepayment price equal to 10 % of the principal amount of the
Loan to be prepaid and accrued interest to the date fixed for redemption of the related Bonds.
(ii) The Loan shall be prepaid prior to maturity in whole on any date
from proceeds of Refunding Bonds and other monies available therefor on deposit in the
escrow fund for the Series A Bonds at a prepayment price equal to 10 % of the principal
amount of the Loan to be prepaid and accrued interest thereon to the date fixed for
redemption of the Series A Bonds. Upon deposit of the moneys in the escrow fund for
prepayment in full of the Loan hereunder and satisfaction of Section 9.1 of the Indenture,
the Loan will be deemed paid within the meaning and with the effect expressed this Loan
Agreement.
(b) Optional Prepayment.
(i) The principal of the Loan may be prepaid prior to maturity in
whole or in part [on the Business Day preceding] any Interest Payment Date, from any
available source of funds in the Series A Repayment Account of the Energy Fund, other
than prepaid assessments referenced in the foregoing paragraph (a), at a prepayment price
equal to the principal amount of the Loan to be prepaid, a prepayment premium equal to
10_% of the principal amount of the Loan to be prepaid, and accrued interest to the date
fixed for redemption of the related Bonds.
(c) The County shall give _ days' prior written notice to the Paying Agent of
its election to prepay all or a portion of the Loan under this Section 2.3, and shall transfer to the
Fiscal Agent all amounts required for such prepayment.
Section 2.4. Application of Loan Proceeds. In furtherance of Section 4.3 of the
Indenture, the County shall provide to the Fiscal Agent one or more Written Requests of the
County requesting disbursement of the proceeds of the Loan to the property owners listed on
Exhibit B hereof from amounts on deposit in the Loan Fund (or an account therein, if any)
established under the Indenture, on the Closing Date or such other date or dates specified in such
Written Request(s) of the County. After all amounts required to be disbursed under and pursuant
to the Assessment Contract listed on Exhibit B hereof have been disbursed, moneys on deposit in
the Loan Fund (or the applicable account therein, if any) in an amount equal to the difference
between (i) the total set forth in the column titled "Approved Disbursement Amount" on
4
Exhibit B, and (ii) all amounts disbursed to the property owners listed on Exhibit B, shall be used
by the County to prepay the Loan pursuant to Section 2.3(b) of this Loan Agreement.
ARTICLE III
PLEDGE OF ASSESSMENT REVENUES; APPLICATION OF FUNDS
Section 3.1. Pledee of Assessment Revenues. The Loan shall be secured by a
pledge of, security interest in and lien on all of the related Assessment Revenues and the
amounts in the Series A Repayment Account created hereunder. The Assessment Revenues are
hereby allocated in their entirety to the payment of certain costs and expenses [,up to a maximum
of $ ,] incurred by the County in connection with the administration of LACEP and
payment of the principal of and interest on the Loan.
Section 3.2. Series A Regayment Account: Deposit of Assessment Revenues.
There is hereby established a special trust account within the Energy Fund to be known as the
"Series A Repayment Account" held by the Treasurer. The County shall deposit all Assessment
Revenues in the Series A Repayment Account promptly upon receipt thereof. Any amounts
remaining in the Series A Repayment Account after payment in full of the Loan and the interest
thereon shall be used by the County for the benefit of LACEP.
Section 3.3. Transfers of Assessment Revenues to Authority. (a) No later than
the Business Day preceding each Interest Payment Date commencing , the County
shall withdraw from the Series A Repayment Account and (i) transfer to the Program Expense
Fund an amount equal to [formula to come], up to a maximum of one-half of the amount set
forth in Section 3.1 hereof, and (ii) transfer to the Authority (or to the Fiscal Agent on behalf of
the Authority), for deposit in the Debt Service Fund amounts sufficient to pay the interest then
due on the Loan pursuant to Section 2.2 of this Loan Agreement.
(b) No later than the Business Day preceding each Principal Payment Date,
the County shall withdraw from the Series A Repayment Account and transfer to the Authority
(or to the Fiscal Agent on behalf of the Authority), for deposit in the Debt Service Fund, an
amount sufficient to pay in full the portion of the principal of the Loan then due.
(c) No later than the Business Day preceding each Interest Payment Date
commencing , the County shall withdraw from the Series A Repayment Account and
transfer to the Authority (or to the Fiscal Agent on behalf of the Authority), for deposit in the
Reserve Fund an amount that will, together with the amounts on deposit in the Reserve Fund,
equal the Reserve Requirement.
(d) On each September 2, all moneys in the Series A Repayment Account in
excess of the foregoing amount shall, to the extent permitted by law, be applied as follows:
(i) first, the moneys shall be transferred to the Program Expense Fund
(in which case such moneys shall be released from the pledge and lien hereunder), unless
the Treasurer determines in his sole discretion that amounts then on deposit in the
Program Expense Fund are sufficient to pay anticipated costs and expenses to be incurred
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by the County in connection with administration of LACEP for the next 12 months and
anticipated costs and expenses to be incurred by the County, the Authority, the Paying
Agent and the Fiscal Agent in connection with the Bonds for the next twelve (12)
months, in which event the Treasurer may, but is not required to, apply such excess
monies in accordance with paragraph (ii) below; and
(ii) second, the moneys shall be retained in the Series A Repayment
Account, or, at the option of the County, the moneys shall be applied to prepay the Loan
pursuant to Section 2.3(b).
Section 3.4. Program Expense Fund. There has been heretofore established a
fund within the Energy Fund called the Program Expense Fund and held by the County. There
will be deposited in the Program Expense Fund (i) the amounts received by the Treasurer with
respect to each parcel in each Fiscal Year in satisfaction of the Annual Administrative
Assessment pursuant to the Assessment Contracts and (ii) the amounts, exclusive of Revenues,
deducted from Assessments and set-aside to pay the costs and expenses[, up to a maximum of
$ in each Fiscal Year], incurred by the County in connection with the capitalized costs
of establishing and administering LACEP. Amounts on deposit in the Program Expense Fund
shall be used by the County to pay for ordinary and necessary costs of administering the levy and
collection of the Assessments and all other administrative costs and incidental expenses related
to the Series A Bonds, as well as the capitalized costs of establishing and administering LACEP.
On each June 30, amounts in excess of the Annual Administrative Assessments expected to be
incurred through the next succeeding September 2 may be applied as a credit upon the
assessment levied for the upcoming fiscal year for Annual Administrative Assessments. Any
surplus remaining in the Program Expense Fund after payment or provision for payment of all
Administrative Expenses and other costs in connection with establishing and administering
LACEP incurred or expected to be incurred through and including activities relating to the
payment in full of the Bonds may be transferred to the County for the benefit of LACEP.
Section 3.5. Investment of Moneys; Valuation of Investments. All moneys in
the Series A Repayment Account shall be invested by the County solely in Authorized
Investments, maturing not later than the respective dates on which such moneys are estimated by
the County to be required to be deposited with the Authority pursuant to Section 3.3 hereof. All
interest, profits and other income received from the investment of moneys in any fund or account
held under this Loan Agreement shall be deposited in such fund or account. Notwithstanding
anything to the contrary contained in this paragraph, an amount of interest received with respect
to any investment equal to the amount of accrued interest, if any, paid as part of the purchase
price of such investment shall be credited to the fund from which such accrued interest was paid.
Authorized Investments acquired as an investment of moneys in any fund or account held under
this Loan Agreement shall be credited to such fund.
For the purpose of determining the amount in any fund or account hereunder, the
value of Authorized Investments credited to such fund shall be calculated at the lesser or (a) the
original cost thereof (excluding brokerage commissions and accrued interest, if any), or (b) the
principal amount thereof.
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ARTICLE IV
OTHER COVENANTS OF THE COUNTY
Section 4.1. Punctual Payment. The County will punctually pay or cause to be
paid the principal of and interest on the Loan together with any prepayment premiums thereon in
strict conformity with the terms of this Loan Agreement, and it will faithfully observe and
perform all of the conditions, covenants and requirements of this Loan Agreement.
Section 4.2. Limited Obligation. The Loan is a limited obligation of the
County and is payable solely from and secured solely by related Assessment Revenues and the
amounts in the Series A Repayment Account created hereunder.
Section 4.3. General. The County shall do and perform or cause to be done and
performed all acts and things required to be done or performed by or on behalf of the County
under the provisions of this Loan Agreement. The County warrants that upon the date of
execution and delivery of this Loan Agreement, the conditions, acts and things required by law
and this Loan Agreement to exist, to have happened and to have been performed precedent to
and in the execution and delivery of such Loan Agreement do exist, have happened and have
been performed and the execution and delivery of the Loan Agreement shall comply in all
respects with the applicable laws of the State.
Section 4.4. Protection of Security and Rights of Authority. The County will
preserve and protect the security of the Loan and the rights of the Authority thereto, and will
warrant and defend their rights to such security against all claims and demands of all persons.
From and after the delivery of the Loan Agreement by the County, the Loan shall be
incontestable by the County.
Section 4.5. Aeainst Encumbrances. The County will not encumber, pledge or
place any charge or lien upon any of theyelated Assessment Revenues or other amounts pledged
to the related Loan superior to or on a parity with the pledge and lien herein created for the
benefit of the Loan, except as permitted by this Loan Agreement.
Section 4.6. Collection of Assessment. The County shall comply with all
requirements of the Contractual Assessment Law and applicable State law so as to assure the
timely collection of the unpaid Assessment.
Section 4.7. Accountina Records and Statements. The County will keep or
cause to be kept proper accounting records in which complete and correct entries shall be made
of all transactions relating to the receipt, deposit and disbursement of the Assessment Revenues,
and such accounting records shall be available for inspection upon five (5) Business Days'
written notice by the Authority or the Fiscal Agent or their respective agent duly authorized in
writing at reasonable hours and under reasonable conditions.
Section 4.8. Further Assurances. The County will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
necessary or proper to carry out the intention or to facilitate the performance of its duties under
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this Loan Agreement, and for the better assuring and confirming unto the Authority the rights
and benefits provided in this Loan Agreement.
Section 4.9. Payment of Expenses; Indemnification. At the request or direction
of the Authority, the County shall pay from the Program Expense Fund (but only to the extent
moneys are on deposit therein) the costs and expenses incurred by the Authority in connection
with the issuance of the Bond, including all compensation to the Fiscal Agent from time to time
for all services rendered this Loan Agreement and the Indenture, including but not limited to all
reasonable expenses, charges, legal and consulting fees and other disbursements and those of its
attorneys, agents and employees, incurred in and about the performance of its powers and duties
hereunder and thereunder. Upon the occurrence of an Event of Default, the Fiscal Agent (if other
than the Auditor) shall have a first lien on the Assessment Revenues and the Series A Repayment
Account to secure the payment to the Fiscal Agent of all fees, costs and expenses, including
reasonable compensation to its experts, attorneys and counsel incurred in declaring such Event of
Default and in exercising the rights and remedies set forth in Article V hereof.
The County further covenants and agrees to indemnify and save the Fiscal Agent
(if other than the Auditor) and its officers, directors, agents and employees, harmless against any
losses, expenses and liabilities which it may incur arising out of or in the exercise and
performance of its powers and duties hereunder, including the costs and expenses of defending
against any claim of liability, but excluding any and all losses, expenses and liabilities which are
due to the negligence or intentional misconduct of the Fiscal Agent, its officers, directors, agents
or employees. The obligations of the County under this paragraph shall survive the resignation or
removal of the Fiscal Agent under the Indenture, this Loan Agreement and payment of the Loan
and the discharge of this Loan Agreement.
ARTICLE V
EVENTS OF DEFAULT AND REMEDIES
Section 5.1. Events of Default. The following events shall constitute Events of
Default hereunder:
(a) Default in the due and punctual payment of the principal of or prepayment
premium, if any, on the Loan when and as the same shall become due and payable, whether at
maturity as therein expressed, by declaration or otherwise;
(b) Default in the due and punctual payment of the interest on the Loan when
and as the same shall become due and payable; or
(c) Default by the County in the observance of any of the agreements,
conditions or covenants on its part in this Loan Agreement (other than a payment default referred
to in subparagraphs (a) and (b) above), and the continuation of such default for a period of 60
days after the County shall have been given notice in writing of such default by the Authority or
the Fiscal Agent; provided that if within 60 days the County has commenced curing of the
default and diligently pursues elimination thereof, such period shall be extended to permit such
default to be eliminated.
Section 5.2. Remedies Not Exclusive; Non -Waiver. No remedy conferred
hereby upon the Authority is intended to be exclusive of any other remedy, but each such remedy
is cumulative and in addition to every other remedy and may be exercised without exhausting
and without regard to any other remedy conferred by the JPA Act, Chapter 29, or any other law
of the State. No waiver of any default or breach of duty or contract by the Authority shall affect
any subsequent default or breach of duty or contract or shall impair any rights or remedies on
said subsequent default or breach. No delay or omission of the Authority to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed as a
waiver of any such default or acquiescence therein. Every substantive right and every remedy
conferred upon the Authority may be enforced and exercised as often as may be deemed
expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy
shall be brought or taken and the Authority shall prevail, the Authority shall be entitled to
receive reimbursement for reasonable costs, expenses, outlays and attorney's fees and should
said suit, action or proceeding be abandoned, or be determined adversely to the Authority then,
and in every such case, the Authority and the Authority shall be restored to their former
positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.
Section 5.3. Limited Liability of the County to the Authority. Except for the
collection of the Assessment Revenues and the observance and performance of the other
conditions, covenants and terms contained herein or in the Contractual Assessment Law required
to be observed or performed by it, the County shall not have any obligation or liability to the
Authority with respect to this Loan Agreement. Pursuant to the Resolution of Intention relating
to these proceedings, the County has determined that no funds of the County will be available to
pay principal of, premium, if any, or interest on the Bonds. The County has determined that
pursuant to the Contractual Assessment Law, the County will not obligate itself to advance
available funds from the County's treasury to cure any deficiency which may occur in the Debt
Service Fund under the Indenture.
Section 5.4. Action by Authority Upon Default. In the event the County fails to
take any action to eliminate an Event of Default under Section 5.1 hereof, the Authority may
institute any suit, action, mandamus or other proceeding in equity or at law for the protection or
enforcement of any right under this Loan Agreement, but only if the Authority has fust made
written request of the County, after the right to exercise such powers or right of action shall have
occurred, and shall have afforded the County a reasonable opportunity either to proceed to
exercise the powers granted herein or granted under law or to institute such action, suit or
proceeding in its name and unless also, the County shall have been offered reasonable security
and indemnity against the costs, expenses and liabilities to be incurred therein or thereby, and the
County shall have refused or neglected to comply with such request within a reasonable time.
Any moneys recovered in such suit, action, mandamus or other proceedings shall be applied first
to the payment of the reasonable costs and expenses of the Authority in bringing such suit,
action, mandamus or other proceeding, including reasonable compensation to its agents and
attorney.
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ARTICLE VI
MISCELLANEOUS
Section 6.1. Discharge of Loan Agreement. If the County shall pay and
discharge the entire indebtedness on the Loan in any one or more of the following ways and shall
concurrently therewith discharge the indebtedness of the Series A Bonds in full:
(a) by well and truly paying or causing to be paid the principal of and interest
and prepayment premiums (if any) on the Loan, as and when the same become due and payable;
(b) by irrevocably depositing with the Fiscal Agent, in trust, at or before
maturity, cash in an amount which, together with the available amounts then on deposit in any of
the funds and accounts maintained pursuant to the Indenture in connection with the Series A
Bonds or this Loan Agreement, is fully sufficient to pay all principal of and interest and
prepayment premiums (if any) on the Loan; or
(c) by irrevocably depositing with the Fiscal Agent or any other fiduciary, in
trust, Federal Securities pursuant to Section 9.1(c) of the Indenture in such amount as an
Independent Public Accountant shall determine will, together with the interest to accrue thereon
and available moneys then on deposit in the funds and accounts established pursuant to the
Indenture or pursuant to this Loan Agreement, be fully sufficient to pay and discharge the
indebtedness on the Loan (including all principal, interest and prepayment premiums) at or
before maturity;
then, at the election of the County but only if all other amounts then due and payable hereunder
shall have been paid or provision for their payment made, the pledge of and lien upon the
Assessment Revenues and other funds provided for in this Loan Agreement and all other
obligations of the Authority and the County under this Loan Agreement with respect to the Loan
shall cease and terminate, except only the obligation of the County to pay or cause to be paid to
the Authority, from the amounts so deposited with the Authority, the Paying Agent, the Fiscal
Agent, or such other fiduciary, all sums due with respect to the Loan and all expenses and costs
of the Authority, the Paying Agent and the Fiscal Agent. Notice of such election shall be filed
with the Authority, the Paying Agent, and the Fiscal Agent.
Any funds thereafter held by the County hereunder, which are not required for
purposes of this Section 6. 1, shall be transferred to the County for the benefit of LACEP.
Section 6.2. Amendment. This Loan Agreement may be amended by the
parties hereto but only to the extent such amendment shall not be inconsistent with the terms and
provisions hereof and only for the following purposes:
(a) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any other provision with
respect to matters or questions arising under this Loan Agreement or in any supplemental
indenture, provided that such action shall not adversely affect the interests of the Authority;
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(b) to add to the covenants and agreements of and the limitations and the
restrictions upon the County contained in this Loan Agreement other covenants, agreements,
limitations and restrictions to be observed by the County which are not contrary to or
inconsistent with this Loan Agreement as theretofore in effect; and
(c) to modify, alter, amend or supplement this Loan Agreement in any other
respect which is not materially adverse to the interests of the Authority.
The Authority covenants that the Indenture shall not be amended without the prior
written consent of the County.
Section 6.3. Notice. Any notice, demand, direction, request or other instrument
authorized or required by this Loan Agreement to be given to or filed with the Authority, the
County, the Paying Agent or the Fiscal Agent shall be deemed to have been sufficiently given or
filed for all purposes of this Loan Agreement if and when delivered to or sent in accordance with
Section 9.8 of the Indenture.
Section 6.4, Pent on Business Day. In any case where the date of the
maturity of interest or of principal (and premium, if any) of the Loan or the date fixed for
prepayment of the Loan or any portion thereof or the date any action is to be taken pursuant to
this Loan Agreement is other than a Business Day, the payment of interest or principal (and
premium, if any) or the action need not be made on such date but may be made on the next
succeeding day which is a Business Day with the same force and effect as if made on the date
required and no interest shall accrue for the period after such date.
Section 6.5. Benefits Limited to Parties. Nothing in this Loan Agreement,
expressed or implied, is intended to give to any person other than the County and the Authority,
any right, remedy or claim under or by reason of this Loan Agreement. All covenants,
stipulations, promises or agreements in this Loan Agreement contained by and on behalf of the
County shall be for the sole and exclusive benefit of the Authority, of any Fiscal Agent (if not
the Auditor) and of any Paying Agent (if not the Treasurer) acting under the Indenture for the
benefit of the Owners of the Bond.
Section 6.6. No Personal Liability. The County and the officer, agent or
employee thereof shall not be individually or personally liable for the payment of the principal of
or interest on the Bonds; but nothing herein contained shall relieve any such entity, officer, agent
or employee from the performance of any official duty provided by law.
Section 6.7. Severability. If any covenant, agreement or provision, or any
portion thereof, contained in this Loan Agreement, or the application thereof to any person or
circumstance, is held to be unconstitutional, invalid or unenforceable, the remainder of this Loan
Agreement and the application of any such covenant, agreement or provision, or portion thereof,
to other persons or circumstances, shall be deemed severable and shall not be affected thereby,
and this Loan Agreement and the related Loan shall remain valid and the parties hereto shall
retain all valid rights and benefits accorded to them under this Loan Agreement and the
Constitution and laws of the State.
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Section 6.8. Headings. Any headings preceding the texts of the several Articles
hereof, and any table of contents appended to copies hereof, shall be solely for convenience of
reference and shall not constitute a part of this Loan Agreement, nor shall they affect its
meaning, construction or effect.
Section 6.9. Governing Law. All provisions of this Loan Agreement are to be
governed by the laws of the State.
Section 6.10. Counterparts. This Loan Agreement maybe executed in multiple
counterparts, each of which shall be regarded for all purposes as an original; and such
counterparts shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the COUNTY OF LOS ANGELES and the LOS
ANGELES COUNTY PUBLIC WORKS FINANCING AUTHORITY, have caused this Loan
Agreement to be signed by their respective officers, all as of the day and year first above written.
F.VV—M;M
SACHI A. HAMAI
Executive Officer -Clerk
of the Board of Supervisors
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Deputy
ATTEST:
Secretary
By:
Deputy
COUNTY OF LOS ANGELES
Chair of the Board of Supervisors
LOS ANGELES COUNTY PUBLIC WORKS
FINANCING AUTHORITY
In
Chair of the Board of Directors
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EXHIBIT A
LOAN REPAYMENT SCHEDULE
Date Principal Amount Interest Total
EXHIBIT B
ASSESSMENT CONTRACT SCHEDULE
Approved
Property Date of Assessment Disbursement
Owner(s) Contract Amount