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HomeMy WebLinkAboutC-2696(B) - 30th St, 426 (Cannery Village Parking Lot) - Real Property Lease/Purchase Agreement 1988EXEMPT RECORDING REQUE51 PER 8$-19OW9 RECORDING REQUESTED BY AND GOVERNMENT CODE 6103 RECORDED IN OFFICIAL RECpgpS _ WHEN RECORDED MAIL TO: OF ORANGE COUNTY, CALIFppKA CITY OF NEWPORT BEACH EXEMPT -10 40 Aryl APR 2 6 '88 3300 Newport Boulevard C5 Newport Beach, CA 92663 X 7 - Above area is for recording use only) NO CONSIDERATION BASE LEASE AliREE14EN`.r' c LC� THIS BASE LEASE AGREEMENT (the "Base Lease") is dated as of February 15, 1988 by and between the City of Newport Beach, a political subdivision of the State of California (the "City"), and First Continental Financial Corporation, a corporation organized and existing under and by virtue of the laws of the State of Texas ("FCFC"). WITNESSETH: WHEREAS, the City owns certain real property more particularly described in Exhibit A attached hereto (the "Site") (together with the improvements now or hereafter placed or constructed thereon, the "Site"); WHEREAS, the City desires to demolish and remove from the Site the improvements presently located thereon and to acquire, construct and operate on the Site a paved, metered parking facility for the general public (the "Project"); WHEREAS, the City desires to finance its acquisition of. the Site, and in connection therewith, the City proposes to lease the Project to FCFC and lease -back the Site from FCFC, all as here- inafter provided; and, WHEREAS, FCFC desires to finance the acquisition of the Project by the City in the manner proposed by the City, and in connection therewith, desires to lease the Site from the City upon the terms and condition contained herein. WHEREAS, the City and FCFC have entered into that certain Real Property Lease/Purchase Agreement (the "Lease/Purchase Agreement"), dated as of February 15, 1988; and the City, FCFC and Sovran Bank, N.A., as trustee (the "Trustee") have entered into that certain Trust Indenture (the "Indenture"), dated as of February 15, 1988, all for the purpose of giving effect to the foregoing; NOW, THEREFORE, for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: Section 1. Lease of the Project. The City hereby leases the Site to FCFC and FCFC hereby leases and hires the Site from the City, on the terms and conditions hereinafter set forth. Section 2. Term. (a) The term of this Base Lease shall commence upon execution of this Base Lease, and, subject to the other provisions hereof, shall end on the earliest of the follow- ing dates: (i) The day on which that certain Real Property Lease/Purchase Agreement of even date herewith (the "Lease/Purchase Agreement") by and between the City and FCFC shall terminate after payment and performance of all obligations of the City thereunder, including, without limitation, the payment of all Lease Payments (as defined therein); (ii) The day on which the Lease/Purchase Agreement shall terminate after exercise by City of its option to purchase the interest of FCFC therein pursuant to the terms thereof, and the payment and performance of all obligations of the City thereunder, including without limitation the payment of the applicable Concluding Payment Amount (as that term is defined therein); or, February 15, 2008. (b) In the event of a termination of the Lease by the City due to either a non -appropriation of funds pursuant to Section 7 thereof, or an event of default as defined therein, this Base Lease shall terminate prior to February 15, 2008, on or after the date of termination of the Lease, upon receipt by FCFC from the sublease of FCFC's leasehold interest hereunder of amounts sufficient to: (i) reimburse FCFC for all administrative costs and expenses, including reasonable attorneys fees, incurred by FCFC as a result of the termination of the Lease and the sublease of the Project; and (ii) reimburse FCFC for all capital costs and expenses in any manner incurred by FCFC with respect to the Project reasonably necessary in order to render the Project suitable for sublease for lawful purposes; and (iii) pay to FCFC an amount which will equal the Concluding Payment Amount of the Project under the Lease applicable on February 15 of the fiscal year of the City for which the Lease remains in effect as well as any other amounts owing - 2 - ii •111�� under the Lease Agreement and unpaid by the City as of the end of such fiscal year. (c) The amounts referred to in sub -paragraph (b) above, shall be known as the "Reimbursement Amount." The Reimbursement Amount shall be recovered by allowing FCFC first to retain from any sublease rentals an amount equal to 5% thereof, to allow for ongoing administrative costs. FCFC shall be entitled to interest on the outstanding Reimbursement Amount at the rate per annum necessary to pay interest at the stated rates on all Outstanding Certificates (as defined in the "Indenture") or in the event that FCFC shall receive an opinion of an attorney or firm of attorneys nationally recognized as bond counsel to the effect that such interest is subject to federal income taxation, as a result of the default or non -appropriation and the sublease of the Project, at the highest rate allowed by applicable law during the period of time from the last Lease Payment made in the last fiscal year of the City for which the Lease was in effect until the time when the full Reimbursement Amount is received from sublease rentals, and any amounts distributed to FCFC pursuant to sub -paragraph (b) above shall be credited first to the payment of such interest. (d) In the event that the Lease is terminated by the City for non -appropriation of funds necessary to pay Lease Payments in any fiscal year or terminated by FCFC as a result of the occurrence of an event of default by the City thereunder, any amounts necessary to comply with the provisions of paragraphs (b) or (c) above may be paid by the City. In any event, if the Reimbursement Amount is received by FCFC, and FCFC's interest in the Project has been subleased to any sublessee pursuant to any subleases that are still in effect, this Base Lease shall not terminate but FCFC shall assign and set over to the City all of FCFC's interest in the Project granted under this Base Lease, subject to all existing rights created in such sublessees of the Project by any such subleases. (e) In the event that the Lease is terminated by the City for non -appropriation of funds necessary to pay Lease Payments in any fiscal year or terminated as a result of the occurrence of an event of default by the City thereunder, FCFC shall keep complete and accurate records regarding any sublease of the Project and shall, within thirty (30) days of the end of the fiscal year of the City, deliver a written report to the City showing: (i) all amounts received by FCFC from any sublease of the Project; (ii) an analysis as to whether FCFC has received the Reimbursement Amount, with all supporting calculations; and - 3 - :: '111! (iii) the date, if any, in the next fiscal year of the City on which FCFC expects to receive the Reimbursement Amount. In the event that on the last day of any fiscal year of the City FCFC has received the Reimbursement Amount, then all rentals with respect to any sublease of the Project payable after the close of such fiscal year shall be the property of the City. (f) In the event of the termination of this Base Lease and sublease of the Project by FCFC, the City shall have the right, at its own expense, to examine FCFC records insofar as they relate to the Project. Such examination shall be made at FCFC's offices during normal business hours. (g) Upon termination of this Base Lease, FCFC shall quit and surrender the Site in the same good order and condition as the same was in at the time of commencement of the term hereunder, reasonable wear and tear excepted. Any permanent improvements and structures existing upon the Site at the time of termination of this Base Lease shall remain thereon and title thereto shall vest in the City. Section 3. Rental. FCFC shall pay to the City the lump sum of One Million Forty-nine Thousand Dollars ($1,049,000) representing rental in advance for the Site for the term of this Base Lease which funds have heretofore been deposited in the Project Acquisition Fund established under the Indenture, and shall be disbursed for the purposes and is subject to the terms and conditions set forth in the Indenture. Section 4. Purpose. FCFC shall use the Site solely for the purpose of financing the acquisition of the Project by the City, as well as for such purposes as may be incidental thereto; provided, that in the event of default by the City under the Lease/Purchase Agreement or a termination due to non -appropriation thereunder, FCFC may use the Project for any purpose whatsoever subject however to Section 2 above. Section 5. Title. The City covenants that it is the owner in fee of the Site and that there are no liens or encumbrances against the Site other than those Permitted Incumbrances described on Exhibit B attached hereto. City shall promptly obtain for the FCFC title insurance on the Site in the form of a Leasehold Policy of Title Insurance in an amount and issued by a title company acceptable to FCFC. - 4 - 88-190009 Section 6. Assignments and Subleases. FCFC may assign its rights under this Base Lease or sublet the Site without the written consent of the City (i) in connection with any assignment of FCFC's rights under the Lease/Purchase Agreement, or (ii) upon the occurrence of an event of default under the Lease/Purchase Agreement. Section 7. Quiet Enjoyment. The City warrants that FCFC shall at all times during the term of this Base Lease peaceably and quietly have, hold and enjoy all of the Site. Section 8. Leaseback To FCFC. The Lease provides that contemporaneously with the execution hereof FCFC leases back to the City and the City leases from FCFC the Site in accordance with the terms thereof. The Lease includes the option in the City upon payment of the Concluding Payment Amount or upon completion of all Lease Payments to purchase FCFC's interest in the Project. Section 9. Severability. If any one or more of the terms, provisions, covenants or conditions of this Base Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Base Lease shall be affected thereby, and each provision of this Base Lease shall be valid and enforceable to the fullest extent permitted by law. Section 10. Notices. All written notices to be given under this Base Lease shall be given by mail to the party entitled thereto at its address set forth in the Lease/Purchase Agreement, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received seventy-two (72) hours after deposit in the United States mail in registered form, with postage fully prepaid. Section 11. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Base Lease. Section 12. Execution. This Base Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same Lease. It is also agreed that separate counterparts of this Base Lease may separately be executed by FCFC and City, all with the - 5 - 88-190009 EXHIBIT A TO BASE LEASE AGREEMENT Real Property Description That certain tract of land lying the City of Newport Beach, Orange County, California, and more particularly described as follows: PARCEL 1: Lots 12, 13, 14, 15, 16, and 17 in Block 230 of Lancaster's Addition to Newport Beach, as shown on a map recorded in Book 5, Page 14 of Miscellaneous Maps, in the Office of the County Recorder of said county. Except the Westerly 12.5 feet of said Lot 17. A portion of said land is included within the area shown on a map filed in Book 94, Page 7 of Parcel Maps, in the Office of the County Recorder of said county. g8-190009 EXHIBIT B TO BASE LEASE AGREEMENT Permitted Encumbrances Real Property Lease/Purchase Agreement No. 87-034, dated February 15, 1988 88-190009 same force and effect as though the same counterpart had been executed by both FCFC and the City. Section 13. Successors. This Base Lease shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. IN WITNESS WHEREOF, the City and FCFC have caused this Base Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. (SEAL) ATTEST: ( SEAL) AT,T�E� ST : NEWPORT BEACH, CALIFORNIA By: Name: X` // _j� /,�2 % �C.. li//�/ S%/1//V Title : C / 7— Al AI FIRST CONTINENTAL FINANCIAL CORPORATION By Authorized Officer - 6 - ACKNOWLEDGEMENT STATE OF TEXAS § COUNTY OF DALLAS § •111' On this the 11th day of April, 1988, appeared before me Barbara A. Friedman, who acknowledged herself to be an Authorized Officer of First Continental Financial Corporation and that, in such capacity she executed the foregoing Base Lease Agreement for the purposes set forth herein. WITNESS my hand and official seal. S E A L'u 2. y✓ �r`� Notary Public, in and for said County and State %� c My commission expires � — % ACKNOWLEDGEMENT STATE OF CALIFORNIA § COUNTY OF ORANGE § On this the 19th day of April, 1988, ROBERT L. WYNN , who acknowledged himself to be an Authorized Officer of the City of Newport Beach, California and that, in such capacity he executed the foregoing Base Lease Agreement for the purposes set forth herein. WITNESS my hand and official seal. S E A L Notary ublic, n and for said County and State My commission expires ..••.. . OFFICIAL SEAL DOROTHY L. PALEN mom. xaNOTARY PUBLIC • CALIFORNIA "a PRINCIPAL OFFICE IN ORANGE COUNTY .. My Commission Exp. Apr. 51 1989 - 7 - TRUST INDENTURE by and among SOVRAN BANK, N.A. and FIRST CONTINENTAL FINANCIAL CORPORATION and THE CITY OF NEWPORT BEACH, CALIFORNIA SECURING $795,000 CERTIFICATES OF PARTICIPATION - LEASE RENTALS (City of Newport Beach, California Parking Facility Project) Dated as of February 15, 1988 TABLE OF CONTENTS PAGE RECITALS................................................ 1 ARTICLE I - DEFINITIONS ................................. 3 Section 1.01 Definitions .......................... 3 Section 1.02 Interpretations ...................... 8 ARTICLE II - CONCERNING THE CERTIFICATES ................ 9 Section 2.01 Delivery ............................. 9 Section2.02 3.02 Form ................................. 9 Section 2.03 Terms ................................ 9 Section 2.04 Place, and Manner of Payment ......... 10 Section 2.05 Execution of Certificates ............ 10 Section 2.06 Registration, Exchange and Transfer; 14 Section 3.07 Certificate Register ............... 10 Section 2.07 Mutilated, Destroyed, Lost or Stolen 15 Section 3.08 Certificates ....................... 11 Section 2.08 Ownership of Certificates ............ 12 Section 2.09 Settlement and Application of Proceeds 12 ARTICLE III - FUNDS ...................................... 12 Section 3.01 Creation of Funds .................... 12 Section 3.02 Disposition of Proceeds .............. 12 Section 3.03 Disposition of Other Moneys .......... 13 Section 3.04 Certificate Fund ..................... 13 Section 3.05 Equipment Acquisition Fund ........... 13 Section 3.06 Reserve Fund ......................... 14 Section 3.07 Discontinuance of Funds or Accounts; Redemption of Certificates .......... 15 Section 3.08 Reports by Trustee ................... 15 Section 3.09 Rebate Account ....................... 15 ARTICLE IV - SECURITY FOR DEPOSITS: INVESTMENTS OF FUNDS. 16 Section 4.01 Moneys are Trust Funds ............... 16 Section 4.02 Investment or Deposit of Funds ....... 16 Section 4.03 Valuation of Funds ................... 16 ARTICLE V - REDEMPTION OF CERTIFICATES .................. 16 Section 5.01 General ............................. 16 Section 5.02 Disposition of Equipment ............. 17 Section 5.03 General Provisions for Redemption..... 17 Section 5.04 Notice of Redemption ................. 18 Section 5.05 Payment of Redemption Price .......... 18 -i- PAGE ARTICLE VI - DEFAULTS UNDER THE LEASE .................. 19 Section 6.01 Legal Proceedings .................... 19 Section 6.02 Discontinuance of Proceedings ........ 19 Section 6.03 Direction of Proceedings ............. 19 Section 6.04 Limitations on Actions ............... 20 Section 6.05 Delays not to Impair Rights .......... 20 Section 6.06 Possession not Required .............. 20 ARTICLE VII - CONCERNING THE TRUSTEE ................... 21 Section 7.01 Acceptance of Trust .................. 21 Section 7.02 Certain Rights of Trustee ............ 21 Section 7.03 Compensation for Services ........... 21 Section 7.04 Certain Exculpatory Provisions ....... 21 Section 7.05 Notice of Default; Right to Investigate ......................... 22 Section 7.06 Liability of Trustee ................. 22 Section 7.07 Trustee May Deal in Certificates and Engage in Other Transactions ........ 23 Section 7.08 Resignation .......................... 23 Section 7.09 Removal .............................. 23 Section 7.10 Appointment of Successor ............. 23 Section 7.11 Acceptance of Trust by Successor Trustee............................. 24 Section 7.12 Successor Corporation as Trustee ..... 24 ARTICLE VIII - EVIDENCE ................................. 24 Section 8.01 Evidence on Which Trustee May Act .... 24 Section 8.02 Other Evidence ....................... 25 ARTICLE IX - AMENDMENTS AND MODIFICATIONS ................ 25 Section 9.01 Amendments Without Consent ............ 25 Section 9.02 Amendments Requiring Consent .......... 25 Section 9.03 Reliance on Counsel ................... 26 PAGE ARTICLE X - MISCELLANEOUS ................................ 26 Section 10.01 Parties Interested ................... 26 Section 10.02 Unclaimed Moneys ..................... 27 Section 10.03 Successors and Assigns ............... 27 Section 10.04 Effect of Invalid Provision ............ 27 Section 10.05 Notices ............................... 27 Section 10.06 Descriptive Headings ................. 27 Section 10.07 Separate Counterparts ................ 28 Section 10.08 Governing Law ........................ 28 SIGNATURE PAGE .......................................... 28 EXHIBIT "A" - FORM OF CERTIFICATES ...................... A-1 EXHIBIT "B" - FORM OF BASE LEASE ........................ B-1 THIS TRUST INDENTURE (this "Indenture"), dated as of February 15, 1988, is executed by and between Sovran Bank, N.A., a national banking corporation organized and existing under the laws of the United States of America and having its principal corporate trust office in Richmond, Virginia (the "Trustee"), First Continental Financial Corporation, a corporation duly organized and existing under the laws of the State of Texas ("FCFC") and Newport Beach, California (the "Lessee") for the benefit of the Registered Owners from time to time of the Certificates (defined herein). WITNESSETH: WHEREAS, the Lessee is a body corporate and politic, organized and existing under the laws of the State of California (the "State"); and WHEREAS, the Lessee is authorized under the laws of the State to acquire real property and construct and operate parking facilities to be used in connection with its governmental purposes; WHEREAS, the Lessee desires to acquire acquire a tract of land (the "Site"), to demolish and remove the improvements presently existing thereon, and to construct and operate a paved, metered parking facility open to the general public (the "Project"); WHEREAS, pursuant to a certain Base Lease (as defined herein), the Lessee is leasing the Site to FCFC; WHEREAS, pursuant to a certain Real Property Lease/Purchase Agreement (the "Lease"), the Lessee is leasing the Project from FCFC, which pursuant to the Lease has agreed to acquire and lease the Project to the Lessee; WHEREAS, in order to provide funds to acquire the Project, the Trustee will issue the Certificates as contemplated herein and pursuant to the terms hereof; and WHEREAS, the proceeds of the sale of the Certificates will be deposited in the funds established hereunder to further assure the availability of funds to acquire the Project; NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the principal of, and interest and redemption premium, if any, on the Certificates according to their tenor and effect, and to declare the terms and conditions upon and subject to which the Certificates are issued and secured, and for and in consideration of the mutual covenants herein contained and of the purchase and acceptance of Certificates by the Registered Owners, and intending to be legally bound hereby, the Trustee, FCFC and the Lessee have executed and delivered this Indenture, and by these presents there is hereby created an irrevocable trust for the benefit of the Registered Owners and their successors and assigns, upon all amounts received from the sale of the Certif- icates, and all proceeds thereof including the Project and any and all Pledged Revenues (as hereinafter defined) and FCFC does hereby sell, assign, transfer, set over, pledge, confirm and grant unto the Trustee and its successors and assigns all of the right, title and interest and obligations of FCFC in, to and under the Base Lease and the Lease; TO HAVE AND TO HOLD the same unto the Trustee, and its successor or successors in the trust hereby created and its and their assigns forever. IN TRUST, NEVERTHELESS, upon the terms and trusts herein set forth, and as specifically provided herein, for the benefit and security of all present and future Registered Owners issued and to be issued under this Indenture, without preference, priority or distinction as to lien or otherwise of any one Certificate over any other Certificate, except as otherwise specifically provided herein, each and every Certificate issued and to be issued hereunder to have the same right, lien and privilege under and by virtue of this Indenture, and so that the principal of and interest on all Certificates shall be secured hereby and here- inafter specified and shall be subject also to all the provisions hereof. PROVIDED, HOWEVER, and these presents are upon the condition that if there shall be paid or provided unto the Registered Owners of all Certificates Outstanding hereunder, the principal, interest and premium, if any, to become due in respect thereof, at the times and in the manner stipulated therein and herein, and there shall be kept, performed and observed, all and singular, the covenants and promises in the Certificates and in this Indenture expressed to be kept, performed and observed, according to the true intent and meaning of this Indenture, then, upon such final payment of principal, interest and premium, if any, having been made or provided for as herein specified, this Indenture and the estate and rights hereby granted shall cease, determine and be void; otherwise to remain in full force and effect. AND IT IS HEREBY COVENANTED AND AGREED by and between the parties hereto that the terms and conditions upon which the Certificates are to be executed, delivered, issued, secured, received and accepted by all persons who shall, from time to -2- time, be or become Registered Owners thereof, and the trusts and conditions upon which the Trustee shall hold and keep its trust, are as set forth herein. ARTICLE I DEFINITIONS Section 1.01 Definitions. The terms and phrases defined in this Article shall for all purposes of this Indenture, including the preceding recitals and any Supplemental Indenture, have the meanings herein specified unless the context clearly otherwise requires. "Authorized Officer" shall mean, with respect to the Lessee, the Director of Finance of the Lessee, and with respect to FCFC the President, Vice President or Chief Executive Officer of FCFC and shall also mean any person designated by any such officer, in writing, to the Trustee to deal with matters governed by this Indenture, the Base Lease, or the Lease. "Base Lease" shall mean that certain Base Lease, dated as of February 15, 1988, by and between the City of Newport Beach, California, as lessee, and FCFC, as lessor. "Business Day" shall mean any day other than a Sunday, a Saturday or any other day on which the Lessee or any banking institution in the State or in the state in which the Trustee has its principal corporate trust office is authorized by law or is required by executive order to be closed. "Certificate" or "Certificates" shall mean the "$795,000 Certificates of Participation - Lease Rentals (City of Newport Beach Parking Facility Project)" initially issued hereunder and any certificate issued in exchange, replacement or transfer thereof pursuant to Article II hereof. "Certificate Fund" shall mean the fund so designated which is established pursuant to Section 3.01 hereof. "Certificate Register" shall mean the books kept by the Trustee for the registration, exchange and transfer of the Certificates. "Closing Statement" shall mean that statement required by Section 3.02 hereof. "Collateralized Deposits" shall mean certificates of deposit, time deposits or other similar banking arrangements issued by a bank, trust company or savings and loan association -3- the deposits in which are insured by the FDIC or the FSLIC which also are fully secured and collateralized by Government Securities held by (i) the Trustee, (ii) a Federal Reserve Bank, or (iii) a bank which is a member of the FDIC and which has a combined capital, surplus and undivided profits of not less than $25,000,000, and such collateral securities have a fair market value at all times equal to at least 100% of the amount of the deposit. "Cost" or "Costs," in connection with the issuance of the Certificates and the Project, means all expenses which are properly chargeable thereto under Generally Accepted Accounting Principles, including, without limiting the generality of the foregoing: (a) Legal, accounting and other professional and advisory fees; (b) the fees of FCFC, underwriting discounts, printing and engraving, insurance premiums and other expenses of financing; and (c) Costs necessary or desirable for the completion and operation of the Project and other items necessary to enable the Lessee to utilize the Project. In the case of the redeeming of any Certificates, "Cost" includes advertising and other expenses related to the such redemption. Whenever Costs are to be paid hereunder, such payment may be made by way of reimbursement to the Lessee or others who have paid the same. "Concluding Payment Amount" shall mean the term defined as such in the Lease. "Counsel" shall mean any attorney-at-law or firm thereof selected by the Trustee. "Dated Date" shall mean February 15, 1988. "Distribution Date" shall mean, with respect to the Certificates, August 15, 1988, and each February 15 and August 15 thereafter for so long as the Certificates are Outstanding. "Eligible Investments" shall mean and include any of the following securities: (a) Government Securities; (b) Insured Deposits; -4- (c) Collateralized Deposits; (d) Securities acquired and deposits made pursuant to the Investment Agreement; and (e) Any available security, note, fund or investment contract, whatsoever that qualifies as a legal investment for the funds of the Lessee under applicable law. "FDIC" shall mean the Federal Deposit Insurance Corporation. "FSLIC" shall mean the Federal Savings and Loan Insurance Corporation. "Financing Documents" shall mean the Certificates, the Base Lease, the Lease, this Indenture and all other documents, certificates, writings and representations delivered in connection with the Project and the issuance of the Certificates. "Project Acquisition Fund" shall mean the Fund so designated which is established pursuant to Section 3.01 hereof. "Fiscal Year" shall mean the fiscal period of the Lessee. "Funds" shall mean the Project Acquisition Fund, Certificate Fund and Reserve Fund and any accounts or subaccount thereof. "Generally Accepted Accounting Principles" shall mean those accounting principles applicable in the preparation of financial statements, as promulgated from time to time by the Financial Accounting Standards Board or such other body recognized as authoritative by the American Institute of Certified Public Accountants. "Government Securities" shall mean direct and general obligations of, or obligations the timely payment of principal of and interest on which are unconditionally guaranteed by, the United States of America. "Indenture" shall mean this trust indenture, by and between the Trustee, the Lessee and FCFC, as amended or supplemented from time to time. "Investment Agreement" shall mean each and all of the Investment Agreements by and between FCFC and respectively, Provident Bank - Dallas, Dallas, Texas, Provident Bank - Denton, Denton, Texas and Desoto State Bank, Desoto, Texas, each dated as of February 15, 1988. -5- "Investment Instructions" shall mean the Investment Instruc- tions delivered to the Trustee by an Authorized Officer of FCFC on the date of the original delivery of the Certificates pursuant to Section 3.02 hereof, as amended or superseded from time to time. "Insured Deposits" shall mean and include negotiable or non- negotiable certificates of deposit, time deposits or other similar banking arrangements, issued by any bank, trust company or savings and loan association (including the Trustee and any banks affiliated with the Trustee) the deposits of which are insured by the FDIC or by the FSLIC, provided such issuing insti- tution in any case has combined capital, surplus and undivided profits of not less than $30,000,000. "Lease" shall mean that certain Real Property Lease/ Purchase Agreement, dated as of February 15, 1988, by and between FCFC and the Lessee. "Lease Deposits" shall mean payments made or to be made, or caused to be made, by or on behalf of the Lessee under the Lease and which will be used to pay distributions of the principal of and interest on the Certificates. "Lease Payments" shall mean payments made or to be made, or caused to be made, by or on behalf of the Lessee under the Lease and which will be used to pay distributions of principal of and interest on the Certificates. "Lessee" shall mean Newport Beach, California, a political subdivision of the State of California. "Outstanding," in connection with the Certificates shall mean, as of the time in question, all Certificates authenticated and delivered under the Indenture, except: (a) Certificates theretofore cancelled or required to be cancelled hereunder; (b) Certificates for which the payment or redemption of which the necessary amount shall have been or shall concurrently be deposited with the Trustee and be available for payment thereof or for which provision for payment shall have been made; provided that, if such Certificates are being redeemed prior to maturity, the required notice of redemption shall have been given or provisions satisfactory to the Trustee shall have been made therefor; and (c) Certificates in substitution for which other Certificates have been authenticated and delivered. In determining whether the Registered Owners of a requisite aggregate principal amount of Certificates Outstanding have concurred in any request, demand, authorization, direction, notice, consent or waiver under the provisions hereof, unless all Certificates Outstanding are so held, Certificates which are held by or on behalf of the Lessee or any person controlling, con- trolled by or under common control with the Lessee shall be dis- regarded for the purpose of any such determination. "Person" shall mean an individual, a corporation, a partner- ship, an association, a joint stock company, a trust, any unin- corporated organization, a governmental body, any other political subdivision, municipality or municipal authority or any other group or organization of individuals. "Pledged Revenues," in addition to the funds and revenues defined as such in the Lease, shall mean: (a) any and all sums which may be deposited in any Funds or accounts established under this Indenture (other than the Rebate Account), which shall include all Lease Payments and all amounts received by the Trustee from the sale or leasing of the Project (other than fees and expenses of the Trustee associated therewith) in the event the Lessee defaults under the Lease and the Trustee repossesses the Project as permitted by the Lease; (b) interest earned on all Funds; (c) all other amounts received by the Trustee from or on behalf of the Lessee for deposit into any Fund (other than amounts, if any, that are deposited into any Fund and are to be used for the payment of fees and expenses of parties pursuant to this Indenture), and the proceeds received by the Trustee of any insurance coverages on and condemnation awards in respect of any portions of the Project, whether now existing or hereafter coming into existence and whether now owned or held or hereafter acquired by the Lessee; and (d) all Eligible Investments acquired with the fore- going. "Project" shall have the meaning ascribed thereto in the recitals hereof and in the Lease together with any and all additions, modifications, attachments and replacements thereto. -7- "Project Cost" shall mean the costs of purchasing or ac- quiring the Project as set forth in the Lease. "Rebate Account" shall mean the account so designated which may be established by the Trustee pursuant to Section 3.09 hereof. "Record Date" shall mean the date which is the 1st day of the month in which any Distribution is made. "Reserve Fund" shall mean the fund so designated which is established pursuant to Section 3.01 hereof. "Registered Owner" with respect to any Certificate shall mean the person in whose name any Certificate is registered upon the Certificate Register. "Special Payment Date" shall mean, with respect to Outstand- ing Certificates, the date set for payment of amounts due on Certificates that were not paid when due on any Distribution Date, which date shall be fixed by the Trustee whenever moneys become available for the payment of such debt service. "Special Record Date" means the date which is fifteen (15) days prior to any Special Payment Date. "State" shall mean the State of California. "Supplemental Indenture" shall mean any indenture amending, modifying or supplementing this Indenture made, signed and becom- ing effective in accordance with the terms contained herein. "Supplemental Lease Documents" shall mean any Supplemental Lease and all documents, certificates, writings and representa- tions executed or made in connection with the execution and delivery thereof. "Trustee" shall mean Sovran Bank, N.A., a national banking association having its principal corporate trust office in Richmond, Virginia, and its successor or successors as Trustee under this Indenture. Section 1.02. Interpretations. The words "hereof", "here- in," "hereto," "hereby," and "hereunder" (except in the form of the Certificates) refer to the entire Indenture. Words importing persons include firms, associations and corporations; all words importing the singular number include the plural number and visa versa; and all words importing the masculine gender include the feminine gender. .5M ARTICLE II CONCERNING THE CERTIFICATES Section 2.01. Delivery. The Trustee is hereby authorized to execute and deliver the Certificates to the purchasers thereof in accordance with the Closing Statement but only upon receipt of the purchase price of such Certificates as set forth in the Closing Statement. Section 2.02. Form. The Certificates shall be in the form provided in Appendix "A" hereto. Section 2.03. Terms. (a) The Certificates shall be numbered consecutively from R-1 upward and shall be issued in minimum denominations of $5,000 or integral multiples thereof. (b) The Certificates shall be dated the Dated Date, unless issued in exchange for Certificates in which case such Certificates shall be dated as of the date so executed; provided however, if the date of such exchange is a Distribution Date, such Certificates shall be dated as of the date of such exchange. (c) Interest shall be payable on the Certificates on each Distribution Date from the later of the Dated Date or the date on which interest was last paid on such Certificates. (d) The Certificates shall bear interest at the annual rates set forth below (calculated on the basis of a 30 -day month and a 360 -day year) until payment of the principal amount or redemption price thereof shall have been made or provided for at or prior to maturity; and shall mature in amounts on the dates as follows: Maturity Date Principal Interest (February 15) Amount Rate 1989 $125,000 5.80% 1990 $135,000 6.10% 1991 $140,000 6.25% 1992 $150,000 6.40% 1993 $245,000 6.50% (e) The Certificates shall be subject to redemption and to certain other terms and conditions as are set forth in the form thereof set forth as Appendix "A" hereto. MIC Section 2.04. Place, and Manner of Payment. (a) Distribu- tions of interest on the Certificates issued and to be issued hereunder shall be payable in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts therein. (b) The final payment due on the Certificates shall be pay- able at the principal corporate trust office of the Trustee upon presentation and surrender of Certificates as the same shall be- come due and payable. (c) All payments due on the Certificates (other than the final payment) shall be paid on each Distribution Date (or if any such Distribution Date is not a Business Day, then on the Business Day next succeeding such Distribution Date) by check or draft mailed by the Trustee to the person in whose name a Certificate is registered on the Certificate Register at the close of business on the Record Date, and at the address appearing on the Certificate Register; provided, however, if a Registered Owner (i) prior to the relevant Record Date, requests the Trustee to make payment on such Certificate in a manner other than as set forth above, and the Trustee agrees to make such payment in the manner requested, and (ii) reimburses the Trustee in advance for any costs that the Trustee incurs in complying with such request, the Trustee shall make payment on such Certificate in accordance with such Registered Owner's request. Section 2.05. Execution of Certificates. All Certificates issued hereunder shall be executed by the manual signature of an authorized officer of the Trustee. Section 2.06. Registration, Exchange and Transfer; Certifi- cate Register. (a) The Trustee shall keep or cause to be kept at its principal corporate trust office books for the registration, exchange and transfer of Certificates in the manner provided herein so long as any of the Certificates shall remain Outstanding. The Trustee shall serve as the registrar for the purpose of registering, exchanging and transferring the Certificates. (b) No transfer of Certificates shall be valid unless made by the Registered Owner in person or by his duly authorized attorney at the principal corporate trust office of the Trustee, upon surrender of such Certificates accompanied by a duly executed instrument of transfer in form and with guaranty of signature satisfactory to the Trustee. Upon such transfer a new fully registered Certificate or Certificates of the same maturity, in authorized denominations, and bearing the same rate- -10- of interest shall be issued to the transferee. The Trustee shall exchange, register or transfer or cause to be exchanged, registered or transferred, Certificates, as herein provided, and under such reasonable regulations as it may prescribe. (c) At the option of the Registered Owner, Certificates may be exchanged for other Certificates of any other authorized denomination of a like aggregate principal amount and maturity, upon surrender of the Certificates to be exchanged to the Trustee. Whenever any Certificates are so surrendered for exchange, the Trustee shall execute and deliver the Certificates which the Registered Owner making the exchange is entitled to re- ceive. (d) Registration and transfer of registration of Certifi- cates authorized under this Section shall be made without charge to the Registered Owner of any Certificate; provided, however, the Registered Owner, as a condition precedent to the exercise of such privilege, shall pay any taxes, fees or other governmental charges imposed thereon. (e) The Trustee shall not be required (i) to issue or transfer any Certificates during a period beginning on the fif- teenth day next preceding any date of selection of Certificates to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is mailed, or (ii) to transfer any Certificates which have been selected or called for redemption in whole or part. Section 2.07. Mutilated, Destroyed, Lost or Stolen Certifi- cates. (a) Upon receipt by the Trustee of evidence satisfactory to it that any Outstanding Certificate has been mutilated, destroyed, lost or stolen, and of indemnity satisfactory to it, the Trustee shall execute and deliver a new Certificate of the same series and same maturity and of like tenor in exchange and in substitution for, and upon surrender and cancellation of, the mutilated Certificate, or in lieu of and in substitution for the Certificate so destroyed, lost or stolen. (b) Any Registered Owner requesting that a new Certificate be executed and delivered under the provisions of this Section, shall pay the expenses, including counsel fees, which may be incurred by the Trustee in connection with such transfer. In case any such mutilated, destroyed, lost or stolen Certificate has become or is about to become due and payable, the Trustee, in its discretion, may, instead of issuing a new Certificate, make the payment thereof when such payment is due. -11- (c) Any Certificate issued under the provisions of this Section in lieu of any Certificate alleged to be mutilated, de- stroyed, lost or stolen, shall constitute an original, addi- tional, direct and proportionate interest, whether or not the Certificate so alleged to be mutilated, destroyed, lost or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the same benefits as the Certificate being replaced. Section 2.08. Ownership of Certificates. The Trustee shall treat the Registered Owner of any Certificate as the absolute owner of such Certificate for all purposes whether or not such Certificate shall be overdue, and the Trustee shall not be af- fected by any notice to the contrary. Any consent, waiver or other action taken by the Registered Owner of any Certificate shall be conclusive and binding upon such Registered Owner, his heirs, successors or assigns, and upon all transferees of such Certificates whether or not notation of such consent, waiver or other action shall have been made on such Certificate or on any Certificate issued in exchange therefor. ARTICLE III FUNDS Section 3.01. Creation of Funds. (a) There are hereby created and established "The City of Newport Beach, California Parking Facility Project Certificate Fund," "The City of Newport Beach, California Parking Facility Project Acquisition Fund" and "The City of Newport Beach, California Parking Facility Project Reserve Fund." (b) There may be established, by Supplemental Indenture or otherwise as permitted hereby, one or more separate subaccounts to facilitate the administration of the trusts established hereunder. Section 3.02. Settlement and Application of Proceeds. There shall be delivered to the Trustee at the time the Certificates are executed and delivered a Closing Statement executed by an Authorized Officer of FCFC showing: (a) the amount of the proceeds of the sale of the Certificates, including accrued interest, if any; (b) the amounts of accrued and capitalized interest, if any, on the Certificates to be deposited in the Certificate Fund; (c) the amount to be deposited in the Project Acquisition Fund; (d) the amount to be deposited to the Reserve Fund and (e) amounts payable with respect to the issuance costs of the Certificates. The Closing Statement shall be accompanied by the Investment Instructions, which shall contain a statement with respect to the disposition of moneys received by the Trustee pursuant to this Section. -12- Section 3. 03. Disposition of Other Moneys. (a) All Lease Deposits, if any, Lease Payments, and the payments of the Concluding Payment Amount, if any, received by the Trustee, together with any other funds received from the Lessee or from any other Person for application to Lessee's obligations under the Lease (other than moneys deposited to the Project Acquisition Fund) shall be deposited by the Trustee to the Certificate Fund. (b) Upon receipt of any delinquent Lease Payment with respect to which moneys have been advanced from the Reserve Fund, such Lease Payment shall be deposited in the Reserve Fund; provided, however, that no other Lease Payments are then delinquent in which event such moneys shall be applied to the payment of the Certificates in accordance with the provisions of this subsection. Section 3.04. Certificate Fund. (a) On each Distribution Date, the Trustee shall disburse to the Registered Owners (but solely from and to the extent of moneys on deposit in the Funds established hereunder) an amount sufficient to make all payments of the principal of and interest on the Certificates becoming due on such Distribution Date. (b) If on any Distribution Date, the amount of all payments due and payable on the Certificates exceeds the amount on hand in the Certificate Fund, taking into account any transfers made from the Reserve Fund, the Trustee shall apply the moneys on hand therein first to the payment of all interest due with respect to all Certificates, pro rata if necessary, and second to the payment of that portion of the unpaid principal balance of each Certificate which is then due, pro rata if necessary. Section 3.05. Project Acquisition Fund. (a) There shall be disbursed from the Project Acquisition Fund from time to time, pursuant to written instructions signed by Authorized Officers of FCFC and the Lessee amounts sufficient to pay, in whole or in part, the Project Costs. In making any such disbursement, the Trustee shall be fully protected in acting upon such written instructions and shall not be required to verify or take any other further action respecting the application of such disbursement. (c) On the earlier of January 15, 1991 or the date on which the Trustee makes the final payment of the Project Costs, the Trustee shall transfer any amounts remaining in the Project Acquisition Fund (in integral multiples of $5,000) to the Certificate Fund for redemption of Certificates on February 15, 1991, or if transferred earlier on the next succeeding D-istribu- tion Date. If such transfer is made prior to January 15, 1991, any amounts then remaining in the Project Acquisition Fund shall ONE be transferred also to the Certificate Fund to be applied to the Distribution due on the next succeeding Distribution Date. (d) No amount shall be withdrawn from or paid out of the Project Acquisition Fund except as provided herein. Section 3.06. Reserve Fund. (a) The Reserve Fund shall be established in the original amount of $79,500.00 and maintained by the Trustee until such time as (i) the Lease Payments are paid in full pursuant to the terms of the Lease, (ii) the Lessee has paid the entire Concluding Payment Amount in accordance with the Lease, or (iii) this Indenture is terminated. The Trustee shall apply moneys in the Reserve Fund as provided in this Section. (b) If on any Distribution Date the amount in the Certificate Fund shall be less than the amount required to pay the Lease Payment in full, the Trustee shall withdraw from the Reserve Fund to the extent necessary to make good the deficiency. Any amounts transferred from the Reserve Fund pursuant to this subsection shall not be considered payment in full of a Lease Payment and shall, upon receipt of the delinquent Lease Payment, be repaid from such Lease Payment to the Reserve Fund. (c) Whenever the amount in the Reserve Fund, together with the amount in the Certificate Fund, is sufficient to pay in full all Outstanding Certificates in accordance with their terms, the funds on deposit in the Reserve Fund shall be transferred to the Certificate Fund. Any provision of this Indenture to the contrary notwithstanding, so long as there shall be held in the Certificate Fund an amount sufficient to pay in full all Outstanding Certificates in accordance with their terms, no deposits shall be required to be made into the Reserve Fund. (d) Moneys in the Reserve Fund shall be used solely for the purpose of: (i) making up deficiencies in the Certificate Fund as provided above; (ii) in the event of the termination of the Lease Term pursuant, the Trustee shall withdraw from the Reserve Fund for deposit in the Certificate Fund to be applied to the payment of Certificates, all amounts then credited to the Reserve Account; or (iii) in the event of the exercise by Lessee of its option to purchase the Project pursuant to the Lease Agreement, the Trustee shall withdraw from the Reserve Fund for deposit in -14- the Certificate to be applied against the Option to Purchase Concluding Payment Amount and the redemption of Certificates; or (iv) providing for the payment of all Lease Payments in which event the Trustee shall transfer all amounts on deposit in the Reserve Fund to the Certificate Fund to be applied as a credit against the final Lease Payment due on February 15, 1993. Section 3.07. Discontinuance of Funds or Accounts; Redemp- tion of Certificates. (a) In the event that the Lessee exercises its option, if any, under the Lease to purchase the Project and in connection therewith pays an amount sufficient, together with the moneys in any one or more of the accounts created in Funds established hereunder to redeem and pay all Outstanding Certifi- cates, said accounts in said Funds may be discontinued and the moneys therein applied toward such redemption or payment. (b) Any balance remaining in any account in any such Fund shall be paid by the Trustee to FCFC after all Certificates and other sums required to discharge the lien of the Indenture in respect of the Certificates shall have been paid or provision for their payment shall have been made. Section 3.08. Reports By Trustee. The Trustee shall furnish to the Lessee and to FCFC, at least annually, a report on the status of each of the Funds and accounts established under this Article, showing at least the balance in each such Fund and account as of the first day of the period, the deposits to (including interest on investments) and the disbursements from each such Fund and account, and the balance in each such Fund and account on the last day of the report period. Section 3.09. Rebate Account. (a) Upon receipt of written instructions from an Authorized officer of the Lessee, the Trustee shall establish a Rebate Account within the Certificate Fund and shall make deposits and disbursements from the Rebate Account in accordance with such written instructions. The Trustee shall invest the Rebate Account pursuant to said written instructions and shall deposit income from such investments immediately upon receipt thereof in the Rebate Account. (b) The written instructions delivered pursuant to this Section shall be accompanied by an opinion of nationally recognized bond counsel addressed to the Trustee to the effect that the use of said written instructions will not cause the interest on the Certificates to beome subject to Federal income taxation. 51� ARTICLE IV SECURITY FOR DEPOSITS; INVESTMENTS OF FUNDS Section 4.01. Moneys are Trust Funds. All moneys received by the Trustee under this Indenture for deposit in any Fund established hereunder (except moneys required to be deposited to the Rebate Account) shall at all times be trust funds, held for the benefit and security of the Registered Owners in accordance with the provisions hereof. Section 4.02. Investment or Deposit of Funds. (a) The Trustee shall invest moneys held in the Funds established here- under only in Eligible Investments. (b) All investments made pursuant to this Section shall mature or be subject to redemption at not less than the principal amount thereof or the amortized cost of acquisition, whichever is lower, and all deposits in time accounts shall be subject to withdrawal without penalty not later than such dates and in such amounts required to make distributions of the principal of and interest on the Certificates on the Distribution Dates. (c) The interest and income received upon such investments and any interest paid by the Trustee or any other depository of any Fund established hereunder, and any profit (net of losses) resulting from the sale of securities, shall be added or charged to the Certificate Fund. (d) Whenever payment is to be made out of any Fund, the Trustee shall sell such Eligible Investments as may be requested or required to make the payment and restore the proceeds to the Fund in which the Eligible Investments were held. The Trustee shall not be accountable for any depreciation in the value of any such investment or for any loss resulting from the sale thereof. Section 4.03. Valuation of Funds. In computing the assets of any Fund or account, investments and accrued interest thereon shall be deemed a part thereof. Such investments shall be valued at their amortized cost, except for United States Treasury Obligations - State and Local Government Series, which shall be valued at their principal amount. ARTICLE V REDEMPTION OF CERTIFICATES Section 5.01. General The Certificates are subject to redemption as provided in the form of the Certificates prescribed in Exhibit "A" to this Indenture. -16- Section 5.02 Disposition of Project. If the term of the Lease is not renewed pursuant to the terms thereof for failure of the Lessee to appropriate funds sufficient to pay the Lease Payments when due during the next ensuing fiscal period, or if the Certificates are called for redemption following an event of default, the Trustee shall take whatever actions are reasonably required to sell, lease, sublease or otherwise dispose of the Project and shall, on each subsequent Distribution Date, credit the proceeds of such sale, lease, sublease or other disposition to the Certificate to be applied to pay the following items in the following order of priority: FIRST, for the payment of all fees, expenses and costs incurred by the Trustee in connection with such sale, lease, sublease or other disposition of the Project; SECOND, for the payment of interest due on all Outstanding Certificates, and if the amount available for such payment is insufficient to pay all interest then owing and unpaid, the amount available shall be distributed pro rata among all Certificates Outstanding; THIRD, for the payment of principal on all Outstanding Certificates and if the amount available for such payment is insufficient to pay the aggregate principal amount of all Outstanding Certificates, the amount available shall be distributed pro rata among all Certificates Outstanding without preference of one maturity over another maturity; and Section 5.03. General Provisions for Redemption. (a) When- ever less than all the Certificates are to be redeemed, the Cer- tificates to be redeemed shall be selected in inverse order of maturity and by lot within maturity. In the case of a Certificate having a denomination greater than $5,000, the Trustee shall treat each such Certificate as representing such number of separate Certificates, each of the denomination of $5,000, as is obtained by dividing the actual principal amount of such Certificate by $5,000. (b) On the redemption of a portion of the principal amount of such Certificates, the Trustee shall execute and cause to be delivered, on the surrender of such Certificate, a new Certifi- cate or Certificates, of any authorized denomination, as re- quested by the Registered Owner, in aggregate principal amount, having a maturity date and bearing interest at a rate equal to and in exchange for the unredeemed portion of the principal of the Certificate so surrendered. Such exchange shall be without charge to the Registered Owner. -17- Section 5.04. Notice of Redemption. (a) If Certificates are to be redeemed as a result of a termination of the Lease following an event of non -appropriation with respect thereto, the Trustee shall cause a notice of redemption to be mailed to the Registered Owners as soon as possible. (b) Except as provided above, when Certificates are to be redeemed, the Trustee shall cause a notice of redemption to be mailed to the Registered Owners of Certificates at least ten (10) but not more than thirty (30) days prior to the date fixed for redemption. (c) Each notice of redemption shall specify the maturities and if less than all the Outstanding Certificates are to be redeemed or tendered, the numbers, of the Certificates to be redeemed, which may, if appropriate, be expressed in designated blocks of numbers. Such notice shall also state the date fixed for redemption, that on such date the Certificates called for redemption will be due and become payable at the principal corporate trust office of the Trustee and from and after such date, interest thereon shall cease to accrue; provided, however, that the Registered Owners of any Certificates to be redeemed may file written waivers of notice with the Trustee, and if so waived, such Certificates may be redeemed and all rights and liabilities of said Registered Owners shall mature and accrue on the date set for such redemption, without the requirement of written notice. (d) Each notice of redemption shall be deposited by the Trustee in the United States mail with first class postage prepaid and addressed to the Registered Owners called for redemption at their addresses appearing upon the Certificate Register. (e) If at the time of mailing of notice of any redemption by reason of purchase by the Lessee of the Project pursuant to the Lease, the Lessee shall not have deposited with the Trustee moneys sufficient to redeem all the Certificates called for redemption, such notice shall state that it is conditional, subject to the deposit of funds with the Trustee not later than the redemption date, and such notice shall be of no effect unless such moneys are so deposited. Section 5.05. Payment of Redemption Price. Whenever Certificates are to be redeemed, all redemption costs, including the amounts necessary to pay all costs of required mailing, any other costs incidental to the redemption and to pay the prin- cipal, premium, if any, and all interest accrued and to accrue to the date fixed for redemption, shall be set aside and held in IMM separate trust hereunder by the Trustee exclusively for such purposes. Notice having been given in the manner hereinbefore provided, or written waivers of notice having been filed with the Trustee prior to the date set for redemption, the Certificates so called for redemption shall become due and payable on the redemp- tion date so designated and interest on such Certificates shall cease to accrue from the redemption date whether or not the Certificates shall be presented for payment. The principal amount of all Certificates so called for redemption, together with the accrued and unpaid interest thereon to the date of redemption, shall be paid by the Trustee upon presentation and surrender thereof. ARTICLE VI DEFAULTS UNDER THE LEASE Section 6.01. Legal Proceedings. Upon the happening and during the continuance of any event of default (an "Event of Default") under the Lease, an event of default shall be deemed to have occurred hereunder, and in every such case the Trustee in its discretion may, and upon written request of the Registered Owners of at least twenty five percent (25%) in aggregate principal amount of the Certificates Outstanding, and upon receipt of indemnity and advice of Counsel to its satisfaction, shall, proceed to protect and enforce its rights and the rights of the Registered Owners under the laws of the State or under this Indenture by the exercise of any one or more of the remedies provided for in the Lease. Section 6.02. Discontinuance of Proceedings. In case any proceeding taken by the Trustee on account of any Event of Default under the Lease shall have been discontinued or abandoned for any reason, or shall have been determined adversely to the Trustee, then in every case the Lessee, the Trustee and the Registered Owners shall be restored to their former positions and rights hereunder and under the Lease, and all rights, remedies and powers of the Trustee shall continue as though no such proceedings had been taken. Section 6.03. Direction of Proceedings. The Registered Owners of a majority in aggregate principal amount of the Certi- ficates Outstanding with respect to which an Event of Default under the Lease has occurred shall have the right, by an instru- ment in writing executed and delivered to the Trustee, after furnishing indemnity satisfactory to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee hereunder; provided that any such direction -19- shall not be contrary to law or the provisions of this Indenture and that the Trustee shall have the right to decline to follow any such direction which, in the opinion of the Trustee, would be unjustly prejudicial to the rights hereunder of the Registered Owners of such Certificates not parties to such direction. Section 6.04. Limitations on Actions. No Registered Owner of any of the Certificates shall have any right to institute any suit, action or proceeding in equity or at law for the enforce- ment of this Indenture or for execution of any trust hereunder, or for any other remedy hereunder, unless such Registered Owner previously shall have given to the Trustee written notice of an Event of Default, and unless the Registered Owners of not less than a majority of the aggregate principal amount of the Certificates Outstanding, shall have made written request to the Trustee, after the right to exercise such powers or rights of action shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted in the Indenture or to institute such action, suit or proceeding in its or their names, and unless also there shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee shall have refused or neglected to comply with such request within a reasonable time; and such notification, request and offer of in- demnity are hereby declared in every such case, at the option of the Trustee, to be conditions precedent to the execution of the powers and trusts of this Indenture and to any action or cause of action for the enforcement of this Indenture or for any other remedy hereunder, it being understood and intended that no one or more Registered Owners of any Certificates shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of this Indenture, or to enforce any right hereunder, except in the manner herein provided, and that all proceedings at law or in equity shall be instituted and maintained in the manner herein provided and for the ratable benefit (subject to all of the terms, conditions and provisions of this Indenture) of all Registered Owners. Section 6.05. Delays not to Impair Ricrhts. No delay or omission in respect of exercising any right or power accruing upon any event of default under the Lease shall impair such right or power or be a waiver of such default, and every remedy given by this Article may be exercised from time to time and as often as may be deemed expedient. Section 6.06. Possession Not Required. All rights under this Indenture, the Lease and the Certificates may be enforced by the Trustee without the possession of any Certificate or the -20- production thereof at the trial or other proceedings relative thereto, and any proceeding instituted by the Trustee shall be brought in its name for the ratable benefit of the Registered Owners. ARTICLE VII CONCERNING THE TRUSTEE Section 7.01. Acceptance of Trust. The Trustee accepts and agrees to execute the trust hereby created, but only upon the additional terms set forth in this Article, to all of which the parties hereto and the Registered Owners, by their acceptance of Certificates agree. The Trustee shall perform only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. Section 7.02. Certain Rights of Trustee. (a) The Trustee may execute any of the trusts or powers created hereby and perform the duties required by it, by or through agents or employees, shall be entitled to advice of Counsel concerning the duties hereunder and shall not be answerable for the default of misconduct of any such Counsel, agent or employee selected by it with reasonable care. (b) The Trustee may construe any provision of this Indenture which may be ambiguous or inconsistent with any other provision hereof, and any such construction made in good faith shall be binding upon the Registered Owners. Section 7.03. Compensation for Services. The Trustee shall be paid a reasonable compensation by the Lessee for all services to be rendered by it hereunder. The Trustee shall be reimbursed by the Lessee from time to time for all of its reasonable expenses and charges and those of its attorneys, agents and employees incurred in and about the administration and execution of the trusts and the performance of its powers and duties hereunder. Section 7.04. Certain Exculpatory Provisions. The Trustee shall be under no duty or obligation to: (a) indemnify any Person against losses suffered from any authorized investment of any of the moneys on deposit with it under this Indenture, it being responsible only for the safe- keeping of the securities in which said moneys are invested and the collection of interest thereon; -21- (b) take any action in respect of any event of default under the Lease (other than a default by the Lessee in the payment of Lease Payments) in which event the Trustee shall take such action as may be recommended by Counsel or otherwise, or toward the execution or enforcement of any of the trusts hereby created, or institute, appear in or defend any suit or other proceeding in connection therewith, unless requested in writing to do so by Registered Owners of a majority in aggregate principal amount of the Certificates then Outstanding and unless furnished, from time to time as often as it may require, with security and indemnity satisfactory to it; or (c) effect or renew any policy of insurance if the Lessee fails to effect or renew such insurance in accordance with the terms of the Lease. Section 7.05. Notice of Default. The Trustee shall not be required to take notice or be deemed to have knowledge of any Event of Default (other than a default by the Lessee in the payments of Lease Payments, in which event the Trustee shall be deemed to have knowledge thereof) unless and until specifically notified in writing of such default by FCFC or by the Registered Owners of a majority in aggregate principal amount of the Certificates Outstanding. Section 7.06. Liability of Trustee. (a) The liability of the Trustee for actions taken or omitted to be taken hereunder shall be limited to its gross negligence or willful misconduct. (b) The Trustee shall be protected and shall incur no liability in relying, acting or proceeding, or in not relying, not acting or not proceeding in good faith, upon any application, resolution, notice, order, telegram, request, requisition, consent, waiver, certificate, statement, affidavit, report, opinion, voucher, bond or other paper or document which it shall believe to be genuine and to have been passed, signed or presented by the proper board or person, or to have been prepared and furnished pursuant to any of the provisions of this Indenture, and the Trustee shall be under no duty to make any investigation or inquiry as to any statements or opinions contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy of such statements and opinions. (c) As a condition to the taking, suffering or omission of any action hereunder, the Trustee may consult with Counsel and the opinion of such Counsel shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by the Trustee hereunder in good faith and in accordance herewith. -22- (d) The Trustee shall not be bound to recognize any person as the Registered Owner of any Outstanding Certificate unless and until such Certificate is submitted to the Trustee for inspection if required and his title thereto satisfactorily established if disputed. Section 7.07. Trustee May Deal in Certificates and Engage in Other Transactions. The Trustee, its directors, officers, employees or agents, may in good faith buy, sell, own, hold and deal in any of the Certificates and may join in any action which any Registered Owner may be entitled to take with like effect as if the Trustee were not a party to this Indenture. The Trustee, either as principal or agent, may also engage in or be interested in other financial or other transactions with the Lessee or FCFC, and may act as depositary, trustee or agent for any committee or body of Registered Owners. Section 7.08. Resignation The Trustee may resign and be discharged of the trusts hereunder by executing an instrument in writing assigning such trusts, specifying the date when such resignation shall take effect, and filing the same with the Lessee and FCFC not less than sixty (60) days before the date when such resignation shall take effect; provided, however, that any such resignation shall not take effect until a successor trustee has accepted its appointment as such pursuant to the provisions of this Indenture. Section 7.09. Removal. The Trustee may be removed at any time by an instrument in writing, filed with the Trustee, appointing a successor trustee, executed by or on behalf of the Registered Owners of a majority in aggregate principal amount of the Certificates Outstanding. Section 7.10. Appointment of Successor. (a) If the Trustee shall be dissolved, or if its property or affairs shall be taken under the control of any state or federal court or administrative body, a vacancy shall forthwith and ipso facto exist in the office of Trustee, and a successor may be appointed by Lessee by an instrument in writing executed by an Authorized Officer of Lessee; provided, however, that during the continuance of an event of default under the Lease the right to appoint such a successor may not be exercised by Lessee but instead may only be exercised by the Registered Owners of a majority in aggregate principal amount of the Certificates Outstanding by an instrument in writing executed by and on behalf of such Registered Owners. (b) Until a successor trustee shall be appointed by the Registered Owners during the continuance of an event of default under the Lease as herein authorized, FCFC, by an instrument in -23- writing, may appoint a trustee to fill such vacancy. Any new trustee so appointed by FCFC shall immediately and without further fact be superseded by a trustee appointed by the Registered Owners in the manner above provided. (c) Any successor trustee appointed pursuant to this Article shall be an incorporated bank or trust company in good standing, organized or authorized to transact business under the laws of the United States or of any state, be authorized under such laws to exercise corporate trust powers and be subject to supervision or examination by a federal or state authority having a reported capital and surplus of not less than $25,000,000. Section 7.11. Acceptance of Trust by Successor Trustee. Any successor trustee appointed hereunder shall execute, acknow- ledge and deliver to FCFC and the Lessee an instrument accepting such appointment, and thereupon, without any further act, deed or conveyance shall become fully vested with all the estates, pro- perty, rights, powers, trusts, duties and obligations of its predecessor in the trust with like effect as if originally named Trustee herein. Upon request of such successor trustee, the predecessor Trustee shall execute and deliver an instrument transferring to such successor trustee all the estate, property, rights, powers and trusts hereunder of the predecessor Trustee, and the predecessor Trustee shall pay over to the successor trustee all moneys at the time held by it hereunder. Section 7.12. Successor Corporation as Trustee. Any corpo- ration into which any Trustee hereunder may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which any Trustee hereunder shall be a party, shall be the Trustee under this Indenture without the execution or filing of any paper or any further act on the part of the parties hereto, anything herein to the contrary notwith- standing. ARTICLE VIII EVIDENCE Section 8.01. Evidence on Which Trustee May Act. (a) Any request, direction, consent or other instrument in writing required or permitted by this Indenture to be signed or executed by Registered Owners, may be in any number of concurrent instruments of similar tenor and may be signed or executed by such Registered Owners in person or by an agent appointed in writing. The fact and date of the execution of any such instrument and of the ownership of Certificates shall be -24- sufficient for any purposes of this Indenture and shall be con- clusive evidence in favor of the Trustee with regard to any action taken under such instrument, if the fact and date of the execution by any Registered Owner, person or agent of any such instrument is proven by the certificate of any officer in any jurisdiction who, by the laws thereof, has power to take acknowl- edgments within such jurisdiction to the effect that the Registered Owner, person or agent signing such instrument acknowledged before him the execution thereof. (b) The ownership of Certificates shall be proven by the Certificate Register kept under Article II. Section 8.02. Other Evidence. Nothing contained in this Article shall be construed as limiting the Trustee to the proof hereinabove specified, it being intended that the Trustee may accept any other evidence of the matters herein state which it may deem sufficient. Any request, consent, waiver of notice or vote of the Registered Owner of any Certificate shall bind every future Registered Owner of the same Certificate in respect of anything done or suffered by the Trustee in pursuance thereof. ARTICLE IX AMENDMENTS AND MODIFICATIONS Section 9.01. Amendments Without Consent. The Trustee, Lessee and FCFC may, from time to time and at any time, enter into a Supplemental Indenture: (a) for any purpose not inconsistent with the terms of this Indenture or to cure any ambiguity or formal defect or omission in this Indenture or in any Supplemental Indenture which may be defective or inconsistent with any other provision contained herein, or to make such other provisions in regard to matters or questions arising under the Indenture which shall not be inconsistent with the provisions of the Indenture and which shall not adversely affect the interests of the Registered Owners; or (b) to grant to and confer upon Registered Owners, or the Trustee, for the benefit of the Registered Owners, any additional rights, remedies, powers, authority or security that may be lawfully granted to or conferred upon the Registered Owners or the Trustee. Section 9.02. Amendments Requiring Consent. (a) Without the consent of the parties hereto and of all of the Registered Owners of all Certificates Outstanding, no modification or amendment to this Indenture shall be made which would: (i) alter the amount or payment date of any payment on the Certificates or -25- the redemption provisions thereof, (ii) modify the terms of pay- ment or the right to enforce payment of the Certificates or (iii) reduce the percentage of consenting Registered Owners set forth below in this Section. Modification of the provisions governing the administration of Funds hereunder which do not impair the rights reserved above shall not be deemed to constitute a modification of terms of payment. (b) Subject to the foregoing limitations of this Section, this Indenture may be modified or amended from time to time and at any time with the written consent of FCFC and the Registered Owners of not less than a majority in principal amount of Certificates Outstanding. (c) Modifications and amendments made under this Section shall be made by a Supplemental Indenture which shall be executed by the Trustee upon receipt of evidence satisfactory to the Trustee of the consent thereto of FCFC and the Registered Owners of the requisite principal amount of Certificates Outstanding; provided, however, if such Supplemental Indenture shall adversely affect the Trustee's own rights, duties or immunities under this Indenture, the Trustee may, but shall not be obligated to, enter into such Supplemental Indenture. It shall not be necessary for the consent of the Registered Owners to approve the particular form of any proposed Supplemental Indenture but only the substance thereof. Section 9.03. Reliance on Counsel. The Trustee is authorized to join with Lessee and FCFC in the execution and delivery of any Supplemental Indenture or amendment permitted by this Article X and in so doing shall be fully protected by an opinion of Counsel, that such Supplemental Indenture or amendment is so permitted and that all things necessary to make it a valid and binding agreement have been done. ARTICLE X MISCELLANEOUS Section 10.01. Parties Interested. Nothing contained in this Indenture, express or implied, is intended or shall be con- strued to confer upon or give to any person, firm or corporation, other than the parties hereto, the Lessee and the Registered Owners, any right, remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation hereof; and the covenants, stipulations and agreements in this Indenture contained are and shall be for the sole and exclusive benefit of the parties hereto, their successors and assigns, the Lessee and the Registered Owners. -26- Section 10.02. Unclaimed Moneys. In the event that, within five (5) years after the maturity or redemption date of any Certificate, or interest claim appurtenant thereto, any amount deposited or left with the Trustee with respect to such Certifi- cate, or interest claim shall not have been claimed by the Registered Owner thereof entitled thereto, the Trustee shall, upon demand, pay over to the Lessee the amount not so claimed; and the Trustee shall thereupon be relieved from all responsibility from such amount to the Registered Owner of such Certificate, or interest claim, and in the event of such payment to the Lessee, the Registered Owner of such Certificate, or interest claim shall have recourse only to the Lessee for an amount equivalent to the amount paid over to the Lessee with respect to such Certificate or interest claim, without interest. Section 10.03. Successors and Assigns. All the covenants, promises and agreements in this Indenture contained by or on behalf of the Trustee and FCFC shall bind and inure to the benefit of their respective successors and assigns, whether or not so expressed. Section 10.04. Effect of Invalid Provision. If any one or more of the provisions of this Indenture or of the Certificates shall, for any reason, be held to be illegal or invalid, such illegality or invalidity shall not affect any other provisions of this Indenture or of the Certificates, but this Indenture and the Certificates shall be construed and enforced as if such illegal or invalid provisions had not been contained therein. Section 10.05. Notices. Any notice to, or other instrument to be filed with, or demand upon (i) the Trustee may be served, presented or made at the principal corporate trust office of the Trustee at: P.O. Box 26904 Richmond, Virginia 23261 Attention: Corporate Trust Department or such other address as shall then serve as its principal corporate trust office in Richmond, Virginia, (ii) FCFC may be served, presented or made at: 8080 North Central Expressway, Suite 850 Dallas, Texas 75206 or such other address as may be specified in writing by FCFC and (iii) the Lessee may be served, presented or made at: City of Newport Beach P. 0. Box 1768 Newport Beach, California 92658-8915 Attention: City Attorney or such other address as may be specified in writing by the parties. -27- r" ACKNOWLEDGEMENT STATE OF TEXAS COUNTY OF DALLAS § On this the Z; sr day of r 1988, 8AR6,91ZW , who acknowledged ) (her) self to be an Authorized Officer of First Continental Financial Corpo- ration and that, in such capacity (he) (she) executed the forego- ing Real Property Lease/Purchase Agreement for the purposes set forth herein. WITNESS my hand and official seal. S E A L Com_ 7f' N tary Public, in and for said County and State My commission expires %f� �— ACKNOWLEDGEMENT STATE OF CALIFORNIA § COUNTY OF J On this the day of �Q, 1988, - , LfU� , who acknowledged (him)i(her) self to be an Authorized Officer of the City of Newport Beach, California and that, in such capacity (he)(she) executed the foregoing Real Property Lease/Purchase Agreement for the purposes set forth herein. WITNESS my hand and official seal. S E A L Zo P� Notary Public, i and for said ..... County and State •` OFFICIAL SEAL DOROTHY L. PALEN M commission expires 9� �.' NOTARY PUBLIC - CALIFORNIA y p PRINCIPAL OFFICE IN �� • ORANGE COUNTY My Commission Exp. Apr. 5, 1989 Section 10.06. Descriptive Headings. The descriptive head- ings of the Articles and Sections of this Indenture are inserted for convenience of reference only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 10.07. Separate Counterparts. This Indenture may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but such counter- parts shall together constitute but one and the same instrument. Section 10.08. Governing Law. This Indenture and the Certificates shall be governed by the laws of the State of California. IN WITNESS WHEREOF, Sovran Bank, N.A., as Trustee, First Continental Financial Corporation and the City of Newport Beach, California have each caused this Indenture to be executed and their respective corporate seal to be hereunto affixed and attested by their respective duly authorized officers, all as of the day and year first above written. TRUSTEE Attest: jl BY Bv'Z-�� -� Y= _����(- Authorized Officer authorized Officer (Corporate Seal) FIRST CONTINENTAL FINANCIAL CORPORATION Attest: By: B35'oma ' c'�S" By: Authorized Officer Authorizedffice Attest: LESSEE BY: Authorized Officer 544. APPENDIX A Form of Certificate CERTIFICATE OF PARTICIPATION - LEASE RENTALS (City of Newport Beach, California Parking Facility Project) Evidencing a Proportionate Interest of the Registered Owner Hereof in Payments to be Made Pursuant to a Real Property Lease/Purchase Agreement between First Continental Financial Corporation and THE CITY OF NEWPORT BEACH, CALIFORNIA PRINCIPAL AMOUNT INTEREST RATE REGISTERED OWNER: MATURITY DATE CUSIP THIS IS TO CERTIFY THAT the above -referenced registered owner of this Certificate of Participation (the "Certificate") is the owner of a proportionate interest in the right to receive those certain lease payments (the "Lease Payments") to be made by the City of Newport Beach, California (the "Lessee") pursuant to that certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988 (the "Lease"), by and between First Continental Financial Corporation ("FCFC") and the Lessee. Certain rights of FCFC in and to the Lease, including its right to receive all Lease Payments thereunder, have been assigned to Sovran Bank, N.A., as trustee (the "Trustee"), pursuant to that certain Trust Indenture (the "Indenture"), dated as of February 15, 1988, by and between the Trustee, FCFC and the Lessee. Payments of the principal of and interest on the Certificates are to be dis- tributed to the registered owners thereof by the Trustee pursuant to the Indenture. A-1 The registered owner of this Certificate is entitled to receive certain amounts (the "Distributions") on each August 15 and February 15 (the "Distribution Dates"), commencing August 15 1988, until the Maturity Date of this Certificate set forth above (the "Maturity Date"). The total amount of Distributions to be made with respect to this Certificate shall be equal to the principal amount of .this Certificate set forth above (the "Principal Amount") plus interest on such Principal Amount at a per annum rate equal to the interest rate set forth above (the "Interest Rate"). Interest on the Principal Amount of this Certificate shall be included in Distributions made on each Distribution Date. The entire Principal Amount of this Certificate shall be included in the final Distribution made on the Maturity Date. Distributions are payable by check or draft sent by United States mail, first class postage prepaid, or by such other method, acceptable to the Trustee, requested by, and at the risk and expense of, the registered owner, to the registered owner hereof on the Distribution Dates at the address on file with the Trustee; provided, that if any Distribution Date shall not be a Business Day (as such term is defined in the Indenture), then the Distribution shall be made on the next succeeding Business Day; and provided further, that the payment of the final Distributions indicated herein shall be made only upon presentation and surrender of this Certificate at the principal corporate trust office of the Trustee in Richmond, Virginia or at the principal corporate trust office of any successor Trustee. This Certificate has been executed and delivered by the Trustee pursuant to the terms of the Indenture. Copies of the Indenture are on file at the principal corporate trust office of the Trustee, and reference is hereby made to the Indenture and any and all amendments thereto for a description of the security for the Certificates, the nature, extent and manner of enforcement of such security, the rights with respect thereto and the other terms and conditions upon which the Certificates are delivered thereunder. To the extent and in the manner permitted by the terms of the Indenture, the provisions of the Indenture may be amended by the parties thereto, but no such amendment which would adversely affect the registered owners of the Certificates shall become effective as to such registered owners until approved by a majority in aggregate dollar amount of such registered owners and the Lessee; and provided further, that without the consent of the Registered Owners of all Certificates Outstanding no such amendment shall be made which would: (a) alter the amount or payment date o -f any Distribution or the redemption provisions hereof, (b) modify the terms of payment or the right to enforce payment of the Certificates, or (c) reduce the percentage of registered owners whose consent is required to modify or amend the Indenture. RWA This Certificate is transferable by the registered owner hereof, in person, or by his attorney duly authorized in writing, at the principal corporate trust office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture and upon surrender and cancellation of this Certificate. Upon such transfer a new fully registered Certificate or Certificates, of the same Maturity Date and authorized denomination or denominations will be issued to the transferee in exchange therefor. The Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, and the Trustee shall not be affected by any notice to the contrary. The Certificates are subject to redemption, in whole or in part, prior to their stated maturity as follows: (i) on any date, without premium, in the event that the term of the Lease is not renewed due to the failure of the Lessee to appropriate sufficient funds to pay the Lease Payments to become due during the next ensuing fiscal period; (ii) on any date, without premium, in the event that the Lessee defaults in its obligations under the Lease; (iii) on any Distribution Date, without premium, in the event that the Lessee elects to exercise its option to purchase the Project and pay the applicable Concluding Payment Amount; and, (iv) on the earlier of February 15, 1991, or the Distribution Date next succeeding the acquisition of all of the Project, if and to the extent there remains any funds on deposit in the Project Acquisition Fund on such date. The terms governing the forgoing redemptions and any notice required therefor are contained in the Indenture. If this Certificate is called for redemption and payment is duly provided therefor, as specified in the Indenture, any further payment shall cease to accrue hereon from and after the date fixed for redemption. The Certificates evidence, inter alfa, an undivided and pro- portionate interest in the Lease Payments paid by the Lessee under the Lease and enjoy the benefits of the moneys held in funds and accounts established pursuant to the Indenture, all of which are subject to the provisions of the Indenture permitting the application thereof - for or to the purposes and on the terms A-3 and conditions set forth in the Indenture. THE OBLIGATION OF THE LESSEE TO PAY LEASE PAYMENTS IS TERMINABLE AT THE SOLE OPTION OF THE LESSEE AND DOES NOT CONSTITUTE A DEBT OF THE LESSEE OR THE STATE OF CALIFORNIA WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION NOR A LIABILITY OF OR A LIEN OR CHARGE UPON FUNDS, OTHER THAN THE OFF STREET PARKING FUND (AS DEFINED IN THE LEASE) AND CERTAIN FUNDS ESTABLISHED UNDER THE INDENTURE, OR PROPERTY OF THE LESSEE OTHER THAN THE PROJECT (AS SUCH TERM IS DEFINED IN THE LEASE), BEYOND ANY FISCAL PERIOD FOR WHICH THE LESSEE HAS APPROPRIATED MONEYS TO PAY THE LEASE PAYMENTS. The Trustee has no obligation or liability to the registered owners of the Certificates for the payment of the Certificates other than from certain funds established under the Indenture; the Trustee's sole obligations with respect to such payment are to administer, for the benefit of the registered owners of the Certificates, the various funds and accounts established in the Indenture. This Certificate is dated: IN WITNESS WHEREOF, this Certificate has been executed by the manual signature of a duly authorized officer of the Trustee, all as of SOVRAN BANK, N.A., as Trustee By: (Authorized Signature) A-4 ASSIGNMENT FOR VALUE RECEIVED, the undersigned do(es) hereby sell, assign, and transfer unto (Name) (Address) (Employer Identification Number or Social Security Number) the within -mentioned registered Certificate and hereby irrevocably constitutes) and appoint(s) attorney, to transfer the same on the Certificate Register of the Trustee with full power of substitution in the premises. Dated: Note: The signature(s) on this Assign- ment must correspond with the name(s) as written on the face of the within regis- tered Certificate in every particular without alteration or enlargement or any change whatsoever. A-5 APPENDIX B BASE LEASE AGREEMENT THIS BASE LEASE AGREEMENT (the "Base Lease") is dated as of February 15, 1988 by and between the City of Newport Beach, a political subdivision of the State of California (the "City"), and First Continental Financial Corporation, a corporation organized and existing under and by virtue of the laws of the State of Texas ("FCFC"). WITNESSETH: WHEREAS, the City owns certain real property more particularly described in Exhibit A attached hereto (the "Site") (together with the improvements now or hereafter placed or constructed thereon, the "Site"); WHEREAS, the City desires to demolish and remove from the Site the improvements presently located thereon and to acquire, construct and operate on the Site a paved, metered parking facility for the general public (the "Project"); WHEREAS, the City desires to finance its acquisition of the Site, and in connection therewith, the City proposes to lease the Project to FCFC and lease -back the Site from FCFC, all as here- inafter provided; and, WHEREAS, FCFC desires to finance the acquisition of the Project by the City in the manner proposed by the City, and in connection therewith, desires to lease the Site from the City upon the terms and condition contained herein. WHEREAS, the City and FCFC have entered into that certain Real Property Lease/Purchase Agreement (the "Lease/Purchase Agreement"), dated as of February 15, 1988; and the City, FCFC and Sovran Bank, N.A., as trustee (the "Trustee") have entered into that certain Trust Indenture (the "Indenture"), dated as of February 15, 1988, all for the purpose of giving effect to the foregoing; NOW, THEREFORE, for other good the receipt and sufficiency of which parties hereto hereby agree as follows: B-1 and valuable consideration, is hereby acknowledged, the Section 1. Lease of the Project. The City hereby leases the Site to FCFC and FCFC hereby leases and hires the Site from the City, on the terms and conditions hereinafter set forth. Section 2. Term. (a) The term of this Base Lease shall commence upon execution of this Base Lease, and, subject to the other provisions hereof, shall end on the earliest of the follow- ing dates: (i) The day on which that certain Real Property Lease/Purchase Agreement of even date herewith (the "Lease/Purchase Agreement") by and between the City and FCFC shall terminate after payment and performance of all obligations of the City thereunder, including, without limitation, the payment of all Lease Payments (as defined therein); (ii) The day on which the Lease/Purchase Agreement shall terminate after exercise by City of its option to purchase the interest of FCFC therein pursuant to the terms thereof, and the payment and performance of all obligations of the City thereunder, including without limitation the payment of the applicable Concluding Payment Amount (as that term is defined therein); or, February 15, 2008. (b) In the event of a termination of the Lease by the City due to either a non -appropriation of funds pursuant to Section 7 thereof, or an event of default as defined therein, this Base Lease shall terminate prior to February 15, 2008, on or after the date of termination of the Lease, upon receipt by FCFC from the sublease of FCFC's leasehold interest hereunder of amounts sufficient to: (i) reimburse FCFC for all administrative costs and expenses, including reasonable attorneys fees, incurred by FCFC as a result of the termination of the Lease and the sublease of the Project; and (ii) reimburse FCFC for all capital costs and expenses in any manner incurred by FCFC with respect to the Project reasonably necessary in order to render the Project suitable for sublease for lawful purposes; and (iii) pay to FCFC an amount which will equal the Concluding Payment Amount of the Project under the Lease applicable on February 15 of the fiscal year of the City for which the Lease remains in effect as well as any other amounts owing B-2 under the Lease Agreement and unpaid by the City as of the end of such fiscal year. (c) The amounts referred to in sub -paragraph (b) above, shall be known as the "Reimbursement Amount." The Reimbursement Amount shall be recovered by allowing FCFC first to retain from any sublease rentals an amount equal to 5% thereof, to allow for ongoing administrative costs. FCFC shall be entitled to interest on the outstanding Reimbursement Amount at the rate per annum necessary to pay interest at the stated rates on all Outstanding Certificates (as defined in the "Indenture") or in the event that FCFC shall receive an opinion of an attorney or firm of attorneys nationally recognized as bond counsel to the effect that such interest is subject to federal income taxation, as a result of the default or non -appropriation and the sublease of the Project, at the highest rate allowed by applicable law during the period of time from the last Lease Payment made in the last fiscal year of the City for which the Lease was in effect until the time when the full Reimbursement Amount is received from sublease rentals, and any amounts distributed to FCFC pursuant to sub -paragraph (b) above shall be credited first to the payment of such interest. (d) In the event that the Lease is terminated by the City for non -appropriation of funds necessary to pay Lease Payments in any fiscal year or terminated by FCFC as a result of the occurrence of an event of default by the City thereunder, any amounts necessary to comply with the provisions of paragraphs (b) or (c) above may be paid by the City. In any event, if the Reimbursement Amount is received by FCFC, and FCFC's interest in the Project has been subleased to any sublessee pursuant to any subleases that are still in effect, this Base Lease shall not terminate but FCFC shall assign and set over to the City all of FCFC's interest in the Project granted under this Base Lease, subject to all existing rights created in such sublessees of the Project by any such subleases. (e) In the event that the Lease is terminated by the City for non -appropriation of funds necessary to pay Lease Payments in any fiscal year or terminated as a result of the occurrence of an event of default by the City thereunder, FCFC shall keep complete and accurate records regarding any sublease of the Project and shall, within thirty (30) days of the end of the fiscal year of the City, deliver a written report to the City showing: (i) all amounts received by FCFC from any sublease of the Project; (ii) an -analysis as to whether FCFC has received the Reimbursement Amount, with all supporting calculations; and B-3 (iii) the date, if any, in the next fiscal year of the City on which FCFC expects to receive the Reimbursement Amount. In the event that on the last day of any fiscal year of the City FCFC has received the Reimbursement Amount, then all rentals with respect to any sublease of the Project payable after the close of such fiscal year shall be the property of the City. (f) In the event of the termination of this Base Lease and sublease of the Project by FCFC, the City shall have the right, at its own expense, to examine FCFC records insofar as they relate to the Project. Such examination shall be made at FCFC's offices during normal business hours. (g) Upon termination of this Base Lease, FCFC shall quit and surrender the Site in the same good order and condition as the same was in at the time of commencement of the term hereunder, reasonable wear and tear excepted. Any permanent improvements and structures existing upon the Site at the time of termination of this Base Lease shall remain thereon and title thereto shall vest in the City. Section 3. Rental. FCFC shall pay to the City the lump sum of Dollars ($ ) representing rental in advance for the Site for the term of this Base Lease which funds have heretofore been deposited in the Project Acquisition Fund established under the Indenture, and shall be disbursed for the purposes and is subject to the terms and conditions set forth in the Indenture. Section 4. Purpose. FCFC shall use the Site solely for the purpose of financing the acquisition of the Project by the City, as well as for such purposes as may be incidental thereto; provided, that in the event of default by the City under the Lease/Purchase Agreement or a termination due to non -appropriation thereunder, FCFC may use the Project for any purpose whatsoever subject however to Section 2 above. Section 5. Title. The City covenants that it is the owner in fee of the Site and that there are no liens or encumbrances against the Site other than those Permitted Incumbrances described on Exhibit B attached hereto. City shall promptly obtain for the FCFC title insurance on the Site in the form of a Leasehold Policy of Title Insurance in an amount and issued by a title company acceptable to FCFC. B-4 Section 6. Assignments and Subleases. FCFC may assign its rights under this Base Lease or sublet the Site without the written consent of the City (i) in connection with any assignment of FCFC's rights under the Lease/Purchase Agreement, or (ii) upon the occurrence of an event of default under the Lease/Purchase Agreement. Section 7. Quiet Enjoyment. The City warrants that FCFC shall at all times during the term of this Base Lease peaceably and quietly have, hold and enjoy all of the Site. Section 8. Leaseback To FCFC. The Lease provides that contemporaneously with the execution hereof FCFC leases back to the City and the City leases from FCFC the Site in accordance with the terms thereof. The Lease includes the option in the City upon payment of the Concluding Payment Amount or upon completion of all Lease Payments to purchase FCFC's interest in the Project. Section 9. Severability. If any one or more of the terms, provisions, covenants or conditions of this Base Lease shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Base Lease shall be affected thereby, and each provision of this Base Lease shall be valid and enforceable to the fullest extent permitted by law. Section 10. Notices. All written notices to be given under this Base Lease shall be given by mail to the party entitled thereto at its address set forth in the Lease/Purchase Agreement, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received seventy-two (72) hours after deposit in the United States mail in registered form, with postage fully prepaid. Section 11. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Base Lease. Section 12. Execution. This Base Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same Lease. It is also agreed that separate counterparts of this Base Lease may separately be executed by FCFC and City, all with the B-5 same force and effect as though the same counterpart had been executed by both FCFC and the City. Section 13. Successors. This Base Lease shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. IN WITNESS WHEREOF, the City and FCFC have caused this Base Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. (SEAL) ATTEST: NEWPORT BEACH, CALIFORNIA By: Name: Title: (SEAL) FIRST CONTINENTAL FINANCIAL CORPORATION ATTEST: By: Authorized Officer ACKNOWLEDGEMENT STATE OF TEXAS § § COUNTY OF DALLAS § On this the day of , 1988, , who acknowledged (him)(her) self to be an Authorized Officer of First Continental Financial Corpo- ration and that, in such capacity (he)(she) executed the foregoing Base Lease Agreement for the purposes set forth herein. S E A L WITNESS my hand and official seal. Notary Public, in and for said County and State My commission expires ACKNOWLEDGEMENT STATE OF CALIFORNIA § § COUNTY OF § On this the day of #1 1988, who acknowledged (him)(her) self to be an Authorized Officer of the City of Newport Beach, California and that, in such capacity (he)(she) executed the foregoing Base Lease Agreement for the purposes set forth herein. S E A L WITNESS my hand and official seal. Notary Public, in and for said County and State My commission expires B-7 EXHIBIT A TO BASE LEASE AGREEMENT Real Property Description That certain tract of land lying in the City of Newport Beach, Orange County, California, and more particularly described as follows: PARCEL 1: Lots 12, 13, 14, 15, 16 and 17 in Block 230 of Lancaster's Addition to Newport Beach, as shown on a map recorded in Book 5, Page 14 of Miscellaneous Maps, in the Office of the County Recorder of said county. Except the Westerly 12.5 feet of said Lot 17. A portion of said land is included within the area shown on a map filed in Book 94, Page 7 of Parcel Maps, in the Office of the County Recorder of said county. PARCEL 2: An Easement for driveway purposes over the Westerly 12.5 feet of Lot 17 in Block 230 of Lancaster's Addition to Newport Beach, as per map recorded in Book 5, Page 14 of Miscellaneous Maps, in the Office of the County Recorder of said county. am EXHIBIT B TO BASE LEASE AGREEMENT Permitted Encumbrances y d_c�mv zv<xo m O Q oci��oci��'nmo_ 'y �cr m 9 m3dy�mm,� =m nm T o�my�0, m 0 CD xt-n To E2 M' �ZaC m admmo�ZO oo -n y o.°DnymofCr o : G o m a T42 9 a x -o v y m lc -=7 on3oT M wpm nay = 0 Z" aF mo^moo H yyod Ow mOm _0 0 �1 rr0^-m o m 0- oto. m= w ... S.O m 0 Be m y, y m m tf*"-w --c^ m w nn m mO3_.m m m Q;�omnm m__�mrnm o& V.-O O A. tp :+' F -n,0 j n N O- n D m oa�mmvt'o o�3.c Z `D n me m nc m r '�^ S mm R's" o a a ♦. .vo=m o'q -Como, 1 PNf°.O 3- m o ?fTE�.! .... _., Ota m jm �-O �?o2 w _3 rooms >•m o .., i► z mroo��o�A m �m3��m 2 ZZ r o--' s3ioaor=o o� >_0 m T{ ZD mom�yma D zZ �m m ya 3w�3cm=� C) _ ^Td m o?o3.c 'ym mRM'E mo ..._..nm -0 mfD ._.._ 3 OD �D v�mm-mmm-va .10 C tl m _o c _o ^ m o 3 N Z j INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT (this "Agreement") is dated as of the 15th day of February, 1988, by and between Provident Bank - Dallas, Dallas, Texas ("the "Bank"), and First Continental Financial Corporation, a Texas corporation ("FCFC"). WITNESSETH: WHEREAS, FCFC and the City of Newport Beach, California, (the "Lessee") have entered into that certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988 (the "Lease") whereby FCFC has agreed to provide moneys for the acquisition of a paved metered parking facility for use by the general public (the "Project") described therein and to sell the Project to the City; WHEREAS, the City has agreed to purchase the Equipment from FCFC and to make ten (10) semi-annual lease payments (the "Lease Payments") all in the manner and upon the terms and conditions set forth in the Lease; WHEREAS, pursuant to the Lease the City has agreed to make sixty (60) monthly lease payment deposits (the "Lease Deposits") which together with interest earnings thereon will be used to make the Lease Payments on the respective lease payment dates; WHEREAS, the Lease Deposits will be remitted to the Sovran Bank, N.A., as Trustee (the "Trustee"); under that certain Trust Indenture, dated the date hereof, and credited to the Certificate Fund required to be established thereunder; WHEREAS, FCFC, for the benefit of the City, desires to employ the Bank to provide for the investment of a portion of the Lease Deposits from the date of deposit and thereby provide for a minimum acceptable fixed rate of return for such investment; WHEREAS, the Bank desires to be so employed pursuant to the terms and conditions contained herein; and WHEREAS, each of the parties hereto has authority to enter into this Agreement and has taken all actions necessary to authorize its execution by its officers signing it. NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 7.02 (a) ARTICLE I AGREEMENT TO INVEST LEASE DEPOSITS Section 1.01. Agreement to Disburse and Invest Lease Deposits. The Bank hereby agrees to accept funds from the Trustee, or from Provident Bank - Dallas, Dallas, Texas on behalf of the Trustee from time to time during the term of this Agreement and to invest such funds, as provided below; provided, however, at no time shall the aggregate face amount of the total funds invested hereunder, exceed $100,000. (It is anticipated that funds deposited hereunder will be on or about the dates on Appendix "A" hereto.) Section 1.02. Monev Market Account. (a) FCFC shall instruct the Trustee to remit a portion of the Lease Deposits when due to .the Bank for deposit to a money market account (the "Account") to be maintained at the Bank in the name of the Sovran Bank, N.A., as Trustee, on behalf of the Registered Owners of the Certificates of Participation - Lease Rentals (Newport Beach Parking Facility)." (b) Balances in the Account shall accrue interest at the rate of 7.25% per annum. Section 1.03. Transfers to Trustee. Without further notice or instruction, the Bank shall exercise its best efforts to remit by wire transfer to the Trustee on the business day immediately preceding August 15, 1988 and each February 15, and August 15, thereafter during the term hereof the amount set forth on Appendix "A" hereto; provided however, if the Bank has on deposit on such date insufficient funds to transfer the full amount set forth on Appendix "A," then the Bank shall transfer all funds on deposit in the Account. Section 1.04. Supplemental Instructions. If the Bank receives written notice from an Authorized Officer of FCFC requesting that funds be transferred to the Trustee on a date or in an amount other than as set forth on Appendix "A," then the Bank hereby agrees to make such transfer on the date set forth in such written notice. As used herein "Authorized Officer" shall mean Barbara A. Friedman or another person so designated in writing by FCFC. Section 1.05. Book Entries and Certificates. The Bank shall maintain adequate books and records showing the statement of account for the Account. Ira Section 1.06. Indemnification of Bank. FCFC shall and hereby agrees to indemnify and save the Bank harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (i) the use, maintenance, condition or management of, or from any work or thing done in connection with, the Equipment by the City, or (ii) any act of negligence of the City or FCFC or of any of their officers, agents, contractors, servants, employees, licensees or invitees in connection with the Equipment. Indemnification for any tort mentioned in this Sec- tion shall be limited to the extent and amounts permitted by law. No indemnification will be made under this Section or elsewhere in this Agreement for willful misconduct, gross negligence or breach of duty under this Agreement by the Bank, or its officers, agents, employees, successors and assigns. Section 1.07. Term of Agreement. Unless earlier terminated by the written agreement of the parties hereto, this Agreement shall terminate on February 15, 1991. The total withdrawal of all balances in the Account prior to February 15, 1991 shall not in and of itself terminate this Agreement. ARTICLE II AMENDMENT; ADMINISTRATIVE PROVISIONS Section 2.01. Amendment. The provisions of this Investment Agreement may be amended in writing by agreement between both of the parties hereto and acknowledged by the City. Section 2.02. Assignment. The rights and duties of the Bank under this Agreement shall not be assignable to any other person or entity without the written consent of FCFC. The Bank hereby acknowledges that FCFC has assigned its rights, title and interest under this Investment Agreement to the Registered Owners from time -to -time of the Certificates of Participation issued under the Agreement. Section 2.03. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered form, with postage fully prepaid. Addresses for Notices: TO: FCFC First Continental Financial Corporation 8080 North Central Expressway, Suite 850 Dallas, Texas 75206 Attn: Barry L. Friedman -3- TO: Bank Provident Bank - Dallas, 5429 LBJ Freeway Lockbox 106 Dallas, Texas 75240 TO: Lessee City of Newport Beach 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California Attn: Planning Department TO: Trustee Sovran Bank, N.A. 707 E. Main Street, 3rd Flr Richmond, Virginia 23219 Attn: Corporate Trust Dept If by wire transfer to ABA Routing #051000017, Attn: Robert G. Horner, Corporate Trust Department for deposit to the City of Newport Beach, California Certificate Fund. Section 2.04. Texas Law. This Agreement shall be construed and governed in accordance with the laws of the State of Texas and the United States of America. Section 2.05. Severability. Any provision of this Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement. Section 2.06. Binding on Successors. Subject to the provisions of Section 2.02, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 2.07. Headings. Heading preceding the text of the Articles and Sections hereof are solely for convenience of reference and shall not constitute a part of this Agreement or affect its meaning, construction or effect. -4- IN WITNESS WHEREOF, the parties hereto have executed this Investment Agreement by their officers thereunto duly authorized as of the date and year first above written. PROVIDENT BANK - DALLAS By: (Signature) Name: (Please Type) Title: (Please Type) FIRST CONTINENTAL FINANCIAL CORPORATION By: r Authorized Officer -5- j Section Z _ 07 _ ntadimclu Reading the tart of the zr-t�e!a and Sectio¢s hereof are solely for EmLience of reference and sba31 not constitute a part of t7ls Agrecommt or affect its seating, on or effect_ ISS iF, the parties hereto hale t this s by their officers duly aaYtborized as of the date and year first above writtelx_ ENT (Signatsre; Nastez Nils L_ Nlrstx+ (Pleas 'type) Title z wive Vice Pzaat (please Type; • .a• a ; .-W ; by= itst Crised Qf C. - -5- APPENDIX A TO INVESTMENT AGREEMENT (PROVIDENT BANK -DALLAS) 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME --------- TRANSFER --------- BALANCE .......-- ------- 1 --------- 3/15/88 --------- 1,389.35 0.00 1,389.35 2 4/15/88 1,369.35 8.39 2,767.09 3 5/15/88 1,369.35 16.72 4,153.16 4 6/15/88 1,369.35 25.09 5,547.60 5 7/15/88 1,369.35 33.52 6,950.47 6 8/15/88 1,369.35 41.99 2,150.12 6,211.69 7 9/15/88 1,369.35 37.53 7,618.57 8 10/15/88 1,369.35 46.03 9,033.95 9 11/15/88 1,369.35 54.58 10,457.88 10 12/15/88 1,369.35 63.18 11,890.41 11 1/15/89 1,369.35 71.84 13,331.60 12 2/15/89 1,369.35 80.55 14,630.25 151.25 13 3/15/89 1,369.35 0.91 1,521.51 14 4/15/89 1,369.35 9.19 2,900.05 15 5/15/89 1,369.35 17.52 4,286.92 16 6/15/89 1,369.35 25.90 5,682.17 17 7/15/89 1,369.35 34.33 7,085.85 18 8/15/89 1,369.35 42.81 1,767.75 6,730.26 19 9/15/89 1,369.35 40.66 8,140.28 20 10/15/89 1,369.35 49.18 9,558.81 21 11/15/89 1,369.35 57.75 10,985.91 22 12/15/89 1,369.35 66.37 12,421.63 23 1/15/90 1,369.35 75.05 13,866.03 24 2/15/90 1,369.35 83.77 15,267.75 51.40 25 3/15/90 1,369.35 0.31 1,421.06 26 4/15/90 1,369.35 8.59 2,799.00 27 5/15/90 1,369.35 16.91 4,185.26 28 6/15/90 1,369.35 25.29 5,579.90 29 7/15/90 1,369.35 33.71 6,982.96 30 8/15/90 1,369.35 42.19 1,356.00 7,038.50 31 9/15/90 1,369.35 42.52 8,450.37 32 10/15/90 1,369.35 51.05 9,870.78 33 11/15/90 1,369.35 59.64 11,299.76 34 12/15/90 1,369.35 68.27 12,737.38 35 1/15/91 1,369.35 76.96 14,183.69 36 2/15/91 1,369.35 85.69 15,356.00 282.73 37 3/15/91 1,369.35 1.71 1,653.79 38 4/15/91 1,369.35 9.99 3,033.13 39 5/15/91 1,369.35 18.33 4,420.80 40 6/15/91 1,369.35 26.71 5,816.86 41 7/15/91 1,369.35 35.14 7,221.36 42 8/15/91 1,369.35 43.63 918.50 7,715.84 43 9/15/91 1,369.35 46.62 9,131.80 44 10/15/91 1,369.35 55.17 10,556.32 45 11/15/91 1,369.35 63.78 11,989.45 APPENDIX A TO INVESTMENT AGREEMENT (PROVIDENT BANK -DALLAS 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME --------- TRANSFER --------- BALANCE --------- ------- 46 --------- 12/15/91 --------- 1,369.35 72.44 13,431.24 47 1/15/92 1,369.35 81.15 14,881.73 48 2/15/92 1,369.35 89.91 15,918.50 422.49 49 3/15/92 1,369.35 2.55 1,794.40 50 4/15/92 1,369.35 10.84 3,174.59 51 5/15/92 1,369.35 19.18 41563.12 52 6/15/92 1,369.35 27.57 51960.04 53 7/15/92 1,369.35 36.01 7,365.40 54 8/15/92 1,369.35 44.50 438.50 8,340.74 55 9/15/92 1,369.35 50.39 91760.49 56 10/15/92 1,369.35 58.97. 11,188.81 57 11/15/92 1,369.35 67.60 12,625.76 58 12/15/92 1,369.35 76.28 14,071.39 59 1/15/93 1,369.35 85.01 15,525.75 60 2/15/93 1,369.35 93.80 16,988.50 0.40 APPENDIX B TO INVESTMENT AGREEMENT (PROVIDENT BANK-DENTDN 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME --------- TRANSFER --------- BALANCE ......... ....... 1 ......... 3/15/88 ......... 6,252.12 0.00 6,252.12 2 4/15/88 6,162.12 37.77 12,452.01 3 5/15/88 6,162.12 75.23 18,689.36 4 6/15/88 6,162.12 112.91 24,964.40 5 7/15/88 6,162.12 150.83 31,277.35 6 8/15/88 6,162.12 188.97 9,675.57 27,952.86 7 9/15/88 6,162.12 168.88 34,283.86 8 10/15/88 6,162.12 207.13 40,653.12 9 11/15/88 6,162.12 245.61 47,060.85 10 12/15/88 6,162.12 284.33 53,507.30 11 1/15/89 6,162.12 323.27 59,992.69 12 2/15/89 6,162.12 362.46 65,836.13 681.13 13 3/15/89 6,162.12 4.12 6,847.37 14 4/15/89 6,162.12 41.37 13,050.86 15 5/15/89 6,162.12 78.85 19,291.83 16 6/15/89 6,162.12 116.55 25,570.50 17 7/15/89 6,162.12 154.49 31,887.11 18 8/15/89 6,162.12 192.65 7,954.88 30,287.00 19 9/15/89 6,162.12 182.98 36,632.11 20 10/15/89 6,162.12 221.32 43,015.55 21 11/15/89 6,162.12 259.89 49,437.55 22 12/15/89 6,162.12 298.69 55,898.36 23 1/15/90 6,162.12 337.72 62,398.20 24 2/15/90 6,162.12 376.99 68,704.88 232.42 25 3/15/90 6,162.12 1.40 6,395.95 26 4/15/90 6,162.12 38.64 12,596.71 27 5/15/90 6,162.12 76.11 18,834.94 28 6/15/90 6,162.12 113.79 25,110.85 29 7/15/90 6,162.12 151.71 31,424.68 30 8/15/90 6,162.12 189.86 6,102.00 31,674.66 31 9/15/90 6,162.12 191.37 38,028.15 32 10/15/90 6,162.12 229.75 44,420.02 33 11/15/90 6,162.12 268.37 50,850.51 34 12/15/90 6,162.12 307.22 57,319.85 35 1/15/91 6,162.12 346.31 63,828.28 36 2/15/91 6,162.12 385.63 69,102.00 1,274.03 37 3/15/91 6,162.12 7.70 7,443.85 38 4/15/91 6,162.12 44.97 13,650.94 39 5/15/91, 6,162.12 82.47 19,895.53 40 6/15/91 6,162.12 120.20 26,177.86 41 7/15/91 6,162.12 158.16 32,498.13 42 8/15/91 6,162.12 196.34 4,133.25 34,723.35 43 9/15/91 6,162.12 209.79 41,095.25 44 10/15/91 6,162.12 248.28 47,505.66 45 11/15/91 6,162.12 287.01 53,954.79 APPENDIX B TO INVESTMENT AGREEMENT PROVIDENT BANK-DENTON 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT --------- INCOME --------- TRANSFER ......... BALANCE --------- ------- 46 --------- 12/15/91 6,162.12 325.98 60,442.89 47 1/15/92 6,162.12 365.18 66,970.18 48 2/15/92 6,162.12 404.61 71,633.25 1,903.67 49 3/15/92 6,162.12 11.50 8,077.29 50 4/15/92 6,162.12 48.80 14,288.21 51 5/15/92 6,162.12 86.32 20,536.65 52 6/15/92 6,162.12 124.08 26,822.85 53 7/15/92 6,162.12 162.05 33,147.02 54 8/15/92 6,162.12 200.26 1,973.25 37,536.16 55 9/15/92 6,162.12 226.78 43,925.06 56 10/15/92 6,162.12 265.38 50,352.56 57 11/15/92 6,162.12 304.21 56,818.89 58 12/15/92 6,162.12 343.28 63,324.29 59 1/15/93 6,162.12 382.58 69,869.00 60 2/15/93 6,162.12 422.13 76,448.25 4.99 APPENDIX .0 TO INVESTMENT AGREEMENT (DESOTO STATE BANK 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME TRANSFER --------- BALANCE --------- ------- 1 --------- 3/15/88 ......... 6,252.12 ......... 0.00 6,252.12 2 4/15/88 6,162.12 37.77 12,452.01 3 5/15/68 6,162.12 75.23 18,689.36 4 6/15/88 6,162.12 112.91 24,964.40 5 7/15/88 6,162.12 150.83 '31,277.35 6 8/15/88 6,162.12 188.97 9,675.56 27,952.87 7 9/15/88 6,162.12 168.88 34,283.87 8 10/15/88 6,162.12 207.13 40,653.13 9 11/15/88 6,162.12 245.61 47,060.86 10 12/15/88 6,162.12 284.33 53,507.31 11 1/15/89 6,162.12 323.27 59,992.70 12 2/15/89 6,162.12 362.46 65,836.12 681.15 13 3/15/89 6,162.12 4.12 6,847.39 14 4/15/89 6,162.12 41.37 13,050.88 15 5/15/89 6,162.12 78.85 19,291.85 16 6/15/89 6,162.12 116.55 25,570.52 17 7/15/89 6,162.12 154.49 31,887.13 18 8/15/89 6,162.12 192.65 7,954.87 30,287.03 19 9/15/89 6,162.12 182.98 36,632.14 20 10/15/89 6,162.12 221.32 43,015.58 21 11/15/89 6,162.12 259.89 49,437.58 22 12/15/89 6,162.12 298.69 55,898.39 23 1/15/90 6,162.12 337.72 62,398.23 24 2/15/90 6,162.12 376.99 68,704.87 232.47 25 3/15/90 6,162.12 1.40 6,395.99 26 4/15/90 6,162.12 38.64 12,596.75 27 5/15/90 6,162.12 76.11 18,834.98 28 6/15/90 6,162.12 113.79 25,110.89 29 7/15/90 6,162.12 151.71 31,424.73 30 8/15/90 6,162.12 189.86 6,102.00 31,674.70 31 9/15/90 6,162.12 191.37 38,028.19 32 10/15/90 6,162.12 229.75 44,420.06 33 11/15/90 6,162.12 268.37 50,850.56 34 12/15/90 6,162.12 307.22 57,319.90 35 1/15/91 6,162.12 346.31 63,828.33 36 2/15/91 6,162.12 385.63 69,102.00 1,274.08 37 3/15/91 6,162.12 7.70 7,443.89 38 4/15/91 6,162.12 44.97 13,650.99 39 5/15/91 6,162.12 82.47 19,895.58 40 6/15/91 6,162.12 120.20 26,177.90 41 7/15/91 6,162.12 158.16 32,498.18 42 8/15/91 6,162.12 196.34 4,133.25 34,723.39 43 9/15/91 6,162.12 209.79 41,095.30 44 10/15/91 6,162.12 248.28 47,505.71 45 11/15/91 6,162.12 287.01 53,954.84 APPENDIX .0 TO INVESTMENT AGREEMENT ( DESOTO STATE BANK 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME ......... TRANSFER --------- BALANCE --------- ------- 46 --------- 12/15/91 --------- 6,162.12 325.98 60,442.94 47 1/15/92 6,162.12 365.18 66,970.23 48 2/15/92 6,162.12 404.61 71,633.25 1,903.71 49 3/15/92 6,162.12 11.50 8,077.34 50 4/15/92 6,162.12 48.80 -14,288.26 51 5/15/92 6,162.12 86.32 20,536.70 52 6/15/92 6,162.12 124.08 26,822.90 53 7/15/92 6,162.12 162.06 33,147.07 54 8/15/92 6,162.12 200.26 1,973.25 37,536.21 55 9/15/92 6,162.12 226.78 43,925.11 56 10/15/92 6,162.12 265.38 50,352.61 57 11/15/92 6,162.12 304.21 56,818.94 58 12/15/92 6,162.12 343.28 63,324.34 59 1/15/93 6,162.12 382.58 69,869.05 60 2/15/93 6,162.12 422.13 76,448.25 5.04 INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT (this "Agreement") is dated as of the 15th day of February, 1988, by and between Provident Bank - Denton, Denton, Texas ("the "Bank"), and First Continental Financial Corporation, a Texas corporation ("FCFC"). WITNESSETH: WHEREAS, FCFC and the Newport Beach, California, (the "Lessee") have entered into that certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988 (the "Lease") whereby FCFC has agreed to provide moneys for the acquition of a paved, metered parking facility for use by the general public (the "Project") described therein and to sell the Project to the City; WHEREAS, the City has agreed to purchase the Equipment from FCFC and to make ten (10) semi-annual lease payments (the "Lease Payments") all in the manner and upon the terms and conditions set forth in the Lease; WHEREAS, pursuant to the Lease the City has agreed to make sixty (60) monthly lease payment deposits (the "Lease Deposits") which together with interest earnings thereon will be used to make the Lease Payments on the respective lease payment dates; WHEREAS, the Lease Deposits will be remitted to the Sovran Bank, N.A., as Trustee (the "Trustee"); under that certain Trust Indenture, dated the date hereof, and credited to the Certificate Fund required to be established thereunder; WHEREAS, FCFC, for the benefit of the City, desires to employ the Bank to provide for the investment of a portion of the Lease Deposits from the date of deposit and thereby provide for a minimum acceptable fixed rate of return for such investment; WHEREAS, the Bank desires to be so employed pursuant to the terms and conditions contained herein; and WHEREAS, each of the parties hereto has authority to enter into this Agreement and has taken all actions necessary to authorize its execution by its officers signing it. NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 7.02(b) ARTICLE I AGREEMENT TO INVEST LEASE DEPOSITS Section 1.01. Agreement to Disburse and Invest Lease Deposits. The Bank hereby agrees to accept funds from the Trustee, or from Provident Bank - Dallas, Dallas, Texas on behalf of the Trustee from time to time during the term of this Agreement and to invest such funds, as provided below; provided, however, at no time shall the aggregate face amount of the total funds invested hereunder, exceed $100,000. (It is anticipated that funds deposited hereunder will be on or about the dates on Appendix "A" hereto.) Section 1.02. Money Market Account. (a) FCFC shall instruct the Trustee to remit a portion of the Lease Deposits when due to the Bank for deposit to a money market account (the "Account") to be maintained at the Bank in the name of the Sovran Bank, N.A., as Trustee, on behalf of the Registered Owners of the Certificates of Participation - Lease Rentals (Newport Beach Parking Facility)." (b) Balances in the Account shall accrue interest at the rate of 7.25% per annum. Section 1.03. Transfers to Trustee. Without further notice or instruction, the Bank shall exercise its best efforts to remit by wire transfer to the Trustee on the business day immediately preceding August 15, 1988 and each February 15, and August 15, thereafter during the term hereof the amount set forth on Appendix "A" hereto; provided however, if the Bank has on deposit on such date insufficient funds to transfer the full amount set forth on Appendix "A," then the Bank shall transfer all funds on deposit in the Account. Section 1.04. Supplemental Instructions. If the Bank receives written notice from an Authorized Officer of FCFC requesting that funds be transferred to the Trustee on a date or in an amount other than as set forth on Appendix "A," then the Bank hereby agrees to make such transfer on the date set forth in such written notice. As used herein "Authorized Officer" shall mean Barbara A. Friedman or another person so designated in writing by FCFC. Section 1.05. Book Entries and Certificates. The Bank shall maintain adequate books and records showing the statement of account for the Account. Section 1.06. Indemnification of Bank. FCFC shall and hereby agrees to indemnify and save the Bank harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (i) the use, maintenance, condition or management of, or from any work or thing done in connection with, the Equipment by the City, or (ii) any act of negligence of the City or FCFC or of any of their officers, agents, contractors, servants, employees, licensees or invitees in connection with the Equipment. Indemnification for any tort mentioned in this Sec- tion shall be limited to the extent and amounts permitted by law. No indemnification will be made under this Section or elsewhere in this Agreement for willful misconduct, gross negligence or breach of duty under this Agreement by the Bank, or its officers, agents, employees, successors and assigns. Section 1.07. Term of Agreement. Unless earlier terminated by the written agreement of the parties hereto, this Agreement shall terminate on February 15, 1991. The total withdrawal of all balances in the Account prior to February 15, 1991 shall not in and of itself terminate this Agreement. ARTICLE II AMENDMENT; ADMINISTRATIVE PROVISIONS Section 2.01. Amendment. The provisions of this Investment Agreement may be amended in writing by agreement between both of the parties hereto and acknowledged by the City. Section 2.02. Assignment. The rights and duties of the Bank under this Agreement shall not be assignable to any other person or entity without the written consent of FCFC. The Bank hereby acknowledges that FCFC has assigned its rights, title and interest under this Investment Agreement to the Registered Owners from time -to -time of the Certificates of Participation issued under the Agreement. Section 2.03. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered form, with postage fully prepaid. Addresses for Notices: TO: FCFC First Continental Financial Corporation 8080 North Central Expressway, Suite 850 Dallas, Texas 75206 Attn: Barry L. Friedman TO: Bank Provident Bank - Denton P.O. Box 50599 Denton, Texas 75206-0599 TO: Lessee City of Newport Beach 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California Attn: Planning Department TO: Trustee Sovran Bank, N.A. 707 E. Main Street, 3rd Flr Richmond, Virginia 23219 Attn: Corporate Trust Dept If by wire transfer to ABA Routing #051000017, Attn: Robert G. Horner, Corporate Trust Department for deposit to the City of Newport Beach, California Certificate Fund. Section 2.04. Texas Law. This Agreement shall be construed and governed in accordance with the laws of the State of Texas and the United States of America. Section 2.05. Severability. Any provision of this Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement. Section 2.06. Binding on Successors. Subject to the provisions of Section 2.02, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 2.07. Headings. Heading preceding the text of the Articles and Sections hereof are solely for convenience of reference and shall not constitute a part of this Agreement or affect its meaning, construction or effect. IN WITNESS WHEREOF, the parties hereto have executed this Investment Agreement by their officers thereunto duly authorized as of the date and year first above written. PROVIDENT BANK - DENTON By: (Signature) Name: Title: (Please Type) (Please Type) FIRST CONTINENTAL FINANCIAL CORPORATION By: Authorized Officer ii,, Wrn=S MM73MVthe psrt;ieg bNMM- OMM=tAd this Is�es#srat by tbeir of�ts7s t�a as of the data and year fJxst above uriit m. - !P Mies rromidowt s csa (Please - _5.. APPENDIX A TO INVESTMENT AGREEMENT PROVIDENT BANK-DENTON 7.25% PAYMENT INTEREST FUND NUMBER ------- DATE --------- DEPOSIT --------- INCOME --------- TRANSFER BALANCE 1 3/15/88 6,252.12 0.00 --------- --------- 6,252.12 2 4/15/88 6,162.12 37.77 12,452.01 3 5/15/88 6,162.12 75.23 18,689.36 4 6/15/88 6,162.12 112.91 24,964.40 5 7/15/88 6,162.12 150.83 31,277.35 6 8/15/88 6,162.12 188.97 9,675.57 27,952.86 7 9/15/88 6,162.12 168.88 34,283.86 8 10/15/88 6,162.12 207.13 40,653.12 9 11/15/88 6,162.12 245.61 47,060.85 10 12/15/88 6,162.12 284.33 53,507.30 11 1/15/89 6,162.12 323.27 59,992.69 12 2/15/89 6,162.12 362.46 65,836.13 681.13 13 3/15/89 6,162.12 4.12 6,847.37 14 4/15/89 6,162.12 41.37 13,050.86 15 5/15/89 6,162.12 78.85 19,291.83 16 6/15/89 6,162.12 116.55 25,570.50 17 7/15/89 6,162.12 154.49 31,887.11 18 8/15/89 6,162.12 192.65 7,954.88 30,287.00 19 9/15/89 6,162.12 182.98 36,632.11 20 10/15/89 6,162.12 221.32 43,015.55 21 11/15/89 6,162.12 259.89 49,437.55 22 12/15/89 6,162.12 298.69 55,898.36 23 1/15/90 6,162.12 337.72 62,398.20 24 2/15/90 6,162.12 376.99 68,704.88 232.42 25 3/15/90 6,162.12 1.40 6,395.95 26 4/15/90 6,162.12 38.64 12,596.71 27 5/15/90 6,162.12 76.11 18,834.94 28 6/15/90 6,162.12 113.79 25,110.85 29 7/15/90 6,162.12 151.71 31,424.68 30 8/15/90 6,162.12 189.86 6,102.00 31,674.66 31 9/15/90 6,162.12 191.37 38,028.15 32 10/15/90 6,162.12 229.75 44,420.02 33 11/15/90 6,162.12 268.37 50,850.51 34 12/15/90 6,162.12 307.22 57,319.85 35 1/15/91 6,162.12 346.31 63,828.28 36 2/15/91 6,162.12 385.63 69,102.00 1,274.03 37 3/15/91 6,162.12 7.70 7,443.85 38 4/15/91 6,162.12 44.97 13,650.94 39 5/15/91 6,162.12 82.47 19,895.53 40 6/15/91 6,162.12 120.20. 26,177.86 41 7/15/91 6,162.12 158.16 32,498.13 42 8/15/91 6,162.12 196.34 4,133.25 34,723.35 43 9/15/91 6,162.12 209.79 41,095.25 44 10/15/91 6,162.12 248.28 47,505.66 45 11/15/91 6,162.12 287.01 53,954.79 APPENDIX A TO INVESTMENT AGREEMENT PROVIDENT BANK-DENTON 7.25% PAYMENT INTEREST FUND NUMBER ------- DATE --------- DEPOSIT --------- INCOME --------- TRANSFER BALANCE 46 12/15/91 6,162.12 325.98 --------- --------- 60,442.89 47 1/15/92 6,162.12 365.18 66,970.18 48 2/15/92 6,162.12 404.61 71,633.25 1,903.67 49 3/15/92 6,162.12 11.50 81077.29 50 4/15/92 6,162.12 48.80 14,288.21 51 5/15/92 6,162.12 86.32 20,536.65 52 6/15/92 6,162.12 124.08 26,822.85 53 7/15/92 6,162.12 162.05 33,147.02 54 8/15/92 6,162.12 200.26 1,973.25 37,536.16 55 9/15/92 6,162.12 226.78 43,925.06 56 10/15/92 6,162.12 265.38 50,352.56 57 11/15/92 6,162.12 304.21 56,818.89 58 12/15/92 6,162.12 343.28 63,324.29 59 1/15/93 6,162.12 382.58 69,869.00 60 2/15/93 6,162.12 422.13 76,448.25 4.99 INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT (this "Agreement") is dated as of the 15th day of February, 1988, by and between Desoto State Bank, Desoto, Texas ("the "Bank"), and First Continental Financial Corporation, a Texas corporation ("FCFC"). WITNESSETH: WHEREAS, FCFC and the Newport Beach, California, (the "Lessee") have entered into that certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988 (the "Lease") whereby FCFC has agreed to provide moneys for the acquition of a paved, metered parking facility for use by the general public (the "Project") described therein and to sell the Project to the City; WHEREAS, the City has agreed to purchase the Equipment from FCFC and to make ten (10) semi-annual lease payments (the "Lease Payments") all in the manner and upon the terms and conditions set forth in the Lease; WHEREAS, pursuant to the Lease the City has agreed to make sixty (60) monthly lease payment deposits (the "Lease Deposits") which together with interest earnings thereon will be used to make the Lease Payments on the respective lease payment dates; WHEREAS, the Lease Deposits will be remitted to the Sovran Bank, N.A., as Trustee (the "Trustee"); under that certain Trust Indenture, dated the date hereof, and credited to the Certificate Fund required to be established thereunder; WHEREAS, FCFC, for the benefit of the City, desires to employ the Bank to provide for the investment of a portion of the Lease Deposits from the date of deposit and thereby provide for a minimum acceptable fixed rate of return for such investment; WHEREAS, the Bank desires to be so employed pursuant to the terms and conditions contained herein; and WHEREAS, each of the parties hereto has authority to enter into this Agreement and has taken all actions necessary to authorize its execution by its officers signing it. NOW THEREFORE,. for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 7.02 (c) ARTICLE I AGREEMENT TO INVEST LEASE DEPOSITS Section 1.01. Agreement to Disburse and Invest Lease Deposits. The Bank hereby agrees to accept funds from the Trustee, or from the Provident Bank - Dallas, Dallas, Texas on behalf of the Trustee from time to time during the term of this Agreement and to invest such funds, as provided below; provided, however, at no time shall the aggregate face amount of the total funds invested hereunder, exceed $100,000. (It is anticipated that funds deposited hereunder will be on or about the dates on Appendix "A" hereto.) Section 1.02. Money Market Account. (a) FCFC shall instruct the Trustee to remit a portion of the Lease Deposits when due to the Bank for deposit to a money market account (the "Account") to be maintained at the Bank in the name of the Sovran Bank, N.A., as Trustee, on behalf of the Registered Owners of the Certificates of Participation - Lease Rentals (Newport Beach Parking Facility)." (b) Balances in the Account shall accrue interest at the rate of 7.25% per annum. Section 1.03. Transfers to Trustee. Without further notice or instruction, the Bank shall exercise its best efforts to remit by wire transfer to the Trustee on the business day immediately preceding August 15, 1988 and each February 15, and August 15, thereafter during the term hereof the amount set forth on Appendix "A" hereto; provided however, if the Bank has on deposit on such date insufficient funds to transfer the full amount set forth on Appendix "A," then the Bank shall transfer all funds on deposit in the Account. Section 1.04. Supplemental Instructions. If the Bank receives written notice from an Authorized Officer of FCFC requesting that funds be transferred to the Trustee on a date or in an amount other than as set forth on Appendix "A," then the Bank hereby agrees to make such transfer on the date set forth in such written notice. As used herein "Authorized Officer" shall mean Barbara A. Friedman or another person so designated in writing by FCFC. Section 1.05. Book Entries and Certificates. The Bank shall maintain adequate books and records showing the statement of account for the Account. Section 1.06. Indemnification of Bank. FCFC shall and hereby agrees to indemnify and save the Bank harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (i) the use, maintenance, condition or management of, or from any work or thing done in connection with, the Equipment by the City, or (ii) any act of negligence of the City or FCFC or of any of their officers, agents, contractors, servants, employees, licensees or invitees in connection with the Equipment. Indemnification for any tort mentioned in this Sec- tion shall be limited to the extent and amounts permitted by law. No indemnification will be made under this Section or elsewhere in this Agreement for willful misconduct, gross negligence or breach of duty under this Agreement by the Bank, or its officers, agents, employees, successors and assigns. Section 1.07. Term of Agreement. Unless earlier terminated by the written agreement of the parties hereto, this Agreement shall terminate on February 15, 1991. The total withdrawal of all balances in the Account prior to February 15, 1991 shall not in and of itself terminate this Agreement. ARTICLE II AMENDMENT; ADMINISTRATIVE PROVISIONS Section 2.01. Amendment. The provisions of this Investment Agreement may be amended in writing by agreement between both of the parties hereto and acknowledged by the City. Section 2.02. Assignment. The rights and duties of the Bank under this Agreement shall not be assignable to any other person or entity without the written consent of FCFC. The Bank hereby acknowledges that FCFC has assigned its rights, title and interest under this Investment Agreement to the Registered Owners from time -to -time of the Certificates of Participation issued under the Agreement. Section 2.03. Notices. All written notices to be given under this Agreement shall be given by mail to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Any such notice shall be deemed to have been received 72 hours after deposit in the United States mail in registered form, with postage fully prepaid. Addresses for Notices: TO: FCFC First Continental Financial Corporation 8080 North Central Expressway, Suite 850 Dallas, Texas 75206 Attn: Barry L. Friedman TO: Bank Desoto State Bank P.O. Drawer 1125 Desoto, Texas TO: Lessee State of Illinois Department of Central Management SErvices 715 Stratton Office Bldg Springfield, Illinois 62706 Attn: Jane McCarthy TO: Trustee Sovran Bank, N.A. 707 E. Main Street, 3rd Flr Richmond, Virginia 23219 Attn: Corporate Trust Dept If by wire transfer to ABA Routing #051000017, Attn: Robert G. Horner, Corporate Trust Department for deposit to the Illinois Department of Central Management Services Certificate Fund. Section 2.04. Texas Law. This Agreement shall be construed and governed in accordance with the laws of the State of Texas and the United States of America. Section 2.05. Severability. Any provision of this Agreement found to be prohibited by law shall be ineffective only to the extent of such prohibition, and shall not invalidate the remainder of this Agreement. Section 2.06. Binding on Successors. Subject to the provisions of Section 2.02, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Section 2.07. Headings. Heading preceding the text of the Articles and Sections hereof are solely for convenience of reference and shall not constitute a part of this Agreement or affect its meaning, construction or effect. IN WITNESS WHEREOF, the parties hereto have executed this Investment Agreement by their officers thereunto duly authorized as of the date and year first above written. DESOTO STATE BANK By: (Signature) Name: Title: (Please Type) (Please Type) FIRST CONTINENTAL FINANCIAL CORPORATION By• Authorized Officer Iw w3L7szn ww=m , the Parties hereto havo ummmed this Inv*stment h9mment by their Oftimm thereunto amI1► ivrth"ised t& of the date and year first &bow! written. 1�Aa VCKMo Scott (please Ty" CEO DeSoto State "Ok (Please Tyw I APPENDIX A TO INVESTMENT AGREEMENT DESOTO STATE BANK 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT --------- INCOME TRANSFER BALANCE ------- 1 --------- 3/15/88 6,252.12 --------- 0.00 --------- --------- 6,252.12 2 4/15/88 6,162.12 37.77 12,452.01 3 5/15/88 6,162.12 75.23 18,689.36 4 6/15/88 6,162.12 112.91 24,964.40 5 7/15/88 6,162.12 150.83 31,277.35 6 8/15/88 6,162.12 188.97 9,675.56 27,952.87 7 9/15/88 6,162.12 168.88 34,283.87 8 10/15/88 6,162.12 207.13 40,653.13 9 11/15/88 6,162.12 245.61 47,060.86 10 12/15/88 6,162.12 284.33 53,507.31 11 1/15/89 6,162.12 323.27 59,992.70 12 2/15/89 6,162.12 362.46 65,836.12 681.15 13 3/15/89 6,162.12 4.12 61847.39 14 4/15/89 6,162.12 41.37 13,050.88 15 5/15/89 6,162.12 78.85 19,291.85 16 6/15/89 6,162.12 116.55 25,570.52 17 7/15/89 6,162.12 154.49 31,887.13 18 8/15/89 6,162.12 192.65 7,954.87 30,287.03 19 9/15/89 6,162.12 182.98 36,632.14 20 10/15/89 6,162.12 221.32 43,015.58 21 11/15/89 6,162.12 259.89 49,437.58 22 12/15/89 6,162.12 298.69 55,898.39 23 1/15/90 6,162.12 337.72 62,398.23 24 2/15/90 6,162.12 376.99 68,704.87 232.47 25 3/15/90 6,162.12 1.40 61395.99 26 4/15/90 6,162.12 38.64 12,596.75 27 5/15/90 6,162.12 76.11 18,834.98 28 6/15/90 6,162.12 113.79 25,110.89 29 7/15/90 6,162.12 151.71 31,424.73 30 8/15/90 6,162.12 189.86 6,102.00 31,674.70 31 9/15/90 6,162.12 191.37 38,028.19 32 10/15/90 6,162.12 229.75 44,420.06 33 11/15/90 6,162.12 268.37 50,850.56 34 12/15/90 6,162.12 307.22 57,319.90 35 1/15/91 6,162.12 346.31 63,828.33 36 2/15/91 6,162.12 385.63 69,102.00 1,274.08 37 3/15/91 6,162.12 7.70 7,443.89 38 4/15/91 6,162.12 44.97 13,650.99 39 5/15/91 6,162.12 82.47 19,895.58 40 6/15/91 6,162.12 120.20 26,177.90 41 7/15/91 6,162.12 158.16 32,498.18 42 8/15/91 6,162.12 196.34 4,133.25 34,723.39 43 9/15/91 6,162.12 209.79 41,095.30 44 10/15/91 6,162.12 248.28 47,505.71 45 11/15/91 6,162.12 287.01 53,954.84 APPENDIX A TO INVESTMENT AGREEMENT DESOTO STATE BANK 7.25% PAYMENT INTEREST FUND NUMBER DATE DEPOSIT INCOME TRANSFER BALANCE ------- 46 --------- 12/15/91 ......... 6,162.12 --------- 325.98 --------- --------- 60,442.94 47 1/15/92 6,162.12 365.18 66,970.23 48 2/15/92 6,162.12 404.61 71,633.25 1,903.71 49 3/15/92 6,162.12 11.50 8,077.34 50 4/15/92 6,162.12 48.80 14,288.26 51 5/15/92 6,162.12 86.32 20,536.70 52 6/15/92 6,162.12 124.08 26,822.90 53 7/15/92 6,162.12 162.06 33,147.07 54 8/15/92 6,162.12 200.26 1,973.25 37,536.21 55 9/15/92 6,162.12 226.78 43,925.11 56 10/15/92 6,162.12 265.38 50,352.61 57 11/15/92 6,162.12 304.21 56,818.94 58 12/15/92 6,162.12 343.28 63,324.34 59 1/15/93 6,162.12 382.58 69,869.05 60 2/15/93 6,162.12 422.13 76,448.25 5.04 OFFERING CIRCULAR NEW ISSUE No Rating Applied For In the opinion of Special Tax Counsel, as of the date of the execution and delivery of the Lease and based upon the existing provisions of the Internal Revenue Code of 1986, the regulations promulgated thereunder, published revenue rulings and releases of the Internal Revenue Service and existing court decisions, the com- ponent of each Lease Payment designated as interest under the Lease, and the allocable portion thereof in respect of each Certificate, is not includible in gross income of the recipient for federal income tax purposes. See "Tax Exemption" herein. $795,000 CERTIFICATES OF PARTICIPATION - LEASE RENTALS (City of Newport Beach, California Parking Facility Project) Evidencing a Proportionate Interest of the Owner Thereof in Lease Payments to be Made by THE CITY OF NEWPORT BEACH, CALIFORNIA for the Lease and Acquisition of a paved, metered parking facility for use by the general public pursuant to a Real Property Lease/Purchase Agreement with FIRST CONTINENTAL FINANCIAL CORPORATION Dated: February 15, 1988 Due: as shown below The above described Certificates of Participation (the "Certificates") are being issued to provide funds for the acquisition of a paved, metered parking facility for use by the general public (the "Project") by the City of Newport Beach, California (the "City"), to fund a reserve fund, and to pay the costs related to the issuance of the Certificates. (See "Source and Use of Funds.") The Project site will be leased by the City to First Continental Financial Corporation ("FCFC"), as lessor, pursuant to a Base Lease. The Project will be leased to the City pursuant to a Real Property Lease/Purchase Agreement (the "Lease"), dated as of February 15, 1988, by and between the City and FCFC. The Certificates are issuable pursuant to a Trust Indenture, dated as of February 15, 1988, by and among the City, FCFC and Sovran Bank, N.A. (the "Trustee"), in fully registered form in denominations of $5,000 or integral multiples thereof and are payable at the principal corporate trust office of the Trustee. Interest from the date of the Certificates is payable on August. 15, 1988, and semi-annually thereafter on February 15 and August 15 of each year. The Certificates are subject to redemption in whole or in part, prior to maturity, without premium. (See "The Certificates - Redemption.") THE PAYMENTS DUE WITH RESPECT TO THE CERTIFICATES ARE PAYABLE SOLELY FROM AMOUNTS PAYABLE BY THE CITY UNDER THE LEASE. THE LEASE PAYMENTS ARE PAYABLE SOLELY FROM FUNDS BUDGETED AND APPROPRIATED FOR SUCH PURPOSE BY THE CITY. THE OBLIGATION OF THE CITY TO MAKE THE LEASE PAYMENTS DOES NOT CONSTITUTE AN INDEBTED- NESS OF THE CITY WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION AND DOES NOT CONSTITUTE A LIABILITY OF OR A LIEN OR CHARGE UPON THE FUNDS OR PROPERTY OF THE CITY, EXCEPT THE CITY'S OFF-STREET PARKING FUND AND THOSE FUNDS WHICH THE CITY HAS BUDGETED AND APPROPRIATED TO PAY THE LEASE PAYMENTS DURING ANY FISCAL PERIOD. Maturity Principal Amount Rate February 15, 1989 $125,000 5.80% February 15, 1990 $135,000 6.10% February 15, 1991 $140,000 6.25% February 15, 1992 $150,000 6.40% February 15, 1993 $245,000 6.50% (Plus Accrued Interest) The Certificates are offered when, as and if issued and are subject to the approval of legality and of certain other legal matters by Dorsey & Whitney, Minneapolis, Minnesota, Special Tax Counsel. Certain legal matters will be passed upon for the City by Robert Burnham, City Attorney. It is expected that the Certificates will be available in New York, New York in defini- tive form for delivery on or about February 25, 1988. Dated: February 18, 1988 TABLE OF CONTENTS Page INTRODUCTION 1 SOURCES AND USES OF FUNDS 2 THE CERTIFICATES 3 THE CITY 4 FIRST CONTINENTAL FINANCIAL CORPORATION 8 THE BASE LEASE 8 THE LEASE 9 THE TRUST INDENTURE 13 RISK FACTORS 15 TAX EXEMPTION 16 OTHER LEGAL MATTERS 17 MISCELLANEOUS 17 APPENDICES Appendix A - Financial Statement A-1 Placement Agent FRIEDMAN L UZZAT TO & CO. 8080 N. Central Expressway, Suite 850 Dallas, Texas 75208 (214) 696-8046 $795,000 CERTIFICATES OF PARTICIPATION - LEASE RENTALS (City of Newport Beach, California Parking Facility Project) Evidencing a Proportionate Interest of the Owner Thereof in Lease Payments to be Made by THE CITY OF NEWPORT BEACH, CALIFORNIA for the Lease and Acquisition of a paved, metered parking facility for use by the general public pursuant to a Real Property Lease/Purchase Agreement with FIRST CONTINENTAL FINANCIAL CORPORATION INTRODUCTION This Offering Circular, including the cover page and appen- dices hereto, is provided to furnish information with respect to the sale and delivery of the above referenced Certificates of Participation (the "Certificates") representing direct and proportionate interests of the owners thereof (the "Owners") in lease payments (the "Lease Payments") to be made by the City of Newport Beach, California (the "City"). Said Lease Payments represent the lease and acquisition price of a paved, metered parking 'facility for use by the general public (the "Project") to be leased and acquired pursuant to that certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988 (the "Lease"), by and between the City and First Continental Financial Corporation ("FCFC"). The proceeds of the Certificates will be used to acquire approximately 1/3 acre of land, to demolish and remove the improvements located thereon and to construct a paved metered parking facility (the "Project"). The project is an integral part of the City's plans to revitalize the Cannery Village area, and the Project Site is designated for use as a public parking facility on the Cannery Village Specific Area Plan and other official documents of the City. The proceeds of the Certificate will be additionally used to fund a reserve fund and to pay the costs associated with the issuance of the Certifi- cates. It is anticipated that either the Project site will be purchased from the present owner thereof on or about April 1, 1988, or that on or about such date the City will proceed to acquire the Project Site through its powers of condemnation Demolition will commence shortly after acquisition of the site and the Project will be completed within two months thereafter. 1988. Pursuant to that certain Trust Indenture (the "Indenture") dated as of February 15, 1988, by and among the City, FCFC and the Trustee, all of the right, title and interest of FCFC under the Lease and the Base Lease (see "The Base Lease") have been assigned to the Trustee. SOURCES AND USES OF FUNDS SOURCES OF FUNDS: Contribution by City $500,000.00 Par Amount of Certificates 795,000.00 Accrued Interest 1,382.22 TOTAL SOURCES $1,296,382.22 USES OF FUNDS: Reserve Fund $79,500.00 Project Acquisition Fund 1,200,000.00 Placement Fees 3,975.00 Other Issuance Costs 12,907.22 TOTAL USES $1,296,382.22 -2- THE CERTIFICATES General Certificates will mature and will bear interest on the dates and at the rates set forth on the cover page of this Offering Circular. Interest on the Certificates shall be payable on August 15, 1988, and on each February 15 and August 15 thereafter until maturity (each a "Distribution Date"). Certificates will be issued in registered form in denomina- tions of $5,000 each or integral multiples thereof to be speci- fied by the purchasers thereof. Certificates issued before August 15, 1988, shall be dated as of February 15, 1988. Certif- icates issued in exchange for Certificates shall be dated as of the preceding Distribution Date unless such date of delivery shall be a Distribution Date, in which case they shall be dated as of such date of delivery. Principal and interest shall accrue from the date of the Certificate or from the last Distribution Date to which interest shall have been paid. Distributions of interest will be payable by check or draft of the Trustee mailed to the Owner of record on the fifteenth day prior to the Distribution Date at the address on file with the Trustee. The final payment due on the Certificates at maturity shall be payable at the principal corporate trust office of the Trustee upon presentation and surrender of the Certificates as the same shall become due. Certificates are transferable only on the certificate register at the principal office of the Trustee upon surrender of the Certificates together with a written instrument of transfer satisfactory to the Trustee duly executed by the registered Owner thereof or by his duly authorized attorney. Certificates may be exchanged for an equal aggregate principal amount of Certificates of the same maturity and of authorized denominations. For every exchange or transfer of Certificates, the Trustee may make a charge sufficient to reimburse it for the cost of printing new Certificates and any tax, fee or other governmental charges required to be paid with respect to such exchange or transfer. Redemption The Certificates are subject to redemption, in whole or in part, prior to their stated maturity as follows: (i) on any date, without premium, in the event that the term of the Lease is not renewed due to the failure of the Lessee to appropriate sufficient funds to pay the Lease Payments to become due during the next ensuing fiscal period; -3- (ii) on any date, without premium, in the event that the Lessee defaults in its obligations under the Lease; (iii) on any Distribution Date, without premium, in the event that the Lessee elects to exercise its option to purchase the Project and pay the applicable Concluding Payment Amount; and, (iv) on the earlier of February 15, 1991, or the Distribution Date next succeeding the acquisition of all of the Project, if and to the extent there remains any funds on deposit in the Project Acquisition Fund on such date. Notice of redemption shall be given as soon as practicable by mailing first class postage prepaid copies thereof to the Owners. If the Certificates are called for redemption and payment therefor duly provided therefor on such date of redemp- tion, interest on the Certificates to be redeemed shall cease to accrue from and after the date fixed for redemption. Security for the Certificates Each Certificate represents a proportionate interest in Lease Payments to be made by the City under the Lease. Pursuant to the Base Lease, the City has granted FCFC a 20 -year leasehold interest in the Project site. Pursuant to the Lease, the City has granted to FCFC a security interest in the Project and in its Off -Street Parking Fund to secure performance of the City's obligation under the Lease. Pursuant to the Indenture, FCFC has assigned its rights under the Lease and the Base Lease to the Trustee for the benefit of the Owners of the Certificates. Upon default by the City, the Trustee has the right to recover all Lease Payments due by the City during the fiscal period in which the default occurs, to enter and take possession of the Project and to cause the Project to be sold, leased or subleased on behalf of the Owners of the Certificates. (See "RISK FACTORS - Uncertainty of Remedies.") THE CITY The City of Newport Beach, California, is a political subdivision of the State of California, operating under a Council -Manager form of government. The City's Financial Statement for the Fiscal Year ended June 30, 1987, is included herein as Appendix "B." -4- TABLE OF MISCELLANEOUS STATISTICAL INFORMATION FISCAL PERIOD 1987-88 RESIDENTIAL POPULATION (January, 1988) Permanent 70,606 Summer 100,000 TOURIST POPULATION 20,000 to 100,000 per day AREA (January 1, 1987) Square Miles Land 13.87 Bay 1.90 Ocean 20.00 TOTAL SQUARE MILES 35.77 Acres Land 8,876.8 Bay 1,216.0 Ocean 12,864.0 TOTAL ACRES 22,956.8 WATER FRONTAGE Miles Ocean 6.1 Harbor 25.4 TOTAL WATER FRONTAGE 31.5 ASSESSED VALUATION Total $8,630,217,978 Per Capita 122,230 OPERATING REVENUE $75,288,960 OPERATING EXPENDITURES $52,140,240 CAPITAL IMPROVEMENTS $27,703,380 BONDS OUTSTANDING -0- 06M E J TABLE OF MISCELLANEOUS STATISTICAL INFORMATION FISCAL PERIOD 1987-88 (Continued) NEWPORT HARBOR Boats Residential Commercial Slips and Side Ties Bay Moorings CITY WATER SERVICE CONNECTIONS NUMBER OF FIRE STATIONS NUMBER OF CITY LIBRARIES NUMBER OF PARKWAY TREES RECREATIONAL ACREAGE Ocean Water Harbor Water Parks Beaches TOTAL STREETS AND ALLEYS Improved Unimproved State Highway DWELLING UNITS January 1, 1987 Occupancy factor per dwelling unit POPULATION DENSITY Per Square Mile Per Acre EMPLOYEES Regular Full Time Total (Including Part -Time Seasonal) M Streets 187 miles 8 miles 11 miles 206 miles 9,000 1,230 2,119 1,221 23,372 6 4 20,000 Acres 12,864 1,216 107 224 14,411 Alleys 26 miles 2 miles 0 miles 28 miles 34,659 2 5,090.56 7.95 717 980 POPULATION (January 1) CITY AREA - TOTAL Square Miles) DWELLING UNITS BUILDING PERMITS VALUATION ASSESSED VALUATION ASSESSED VALUATION DCD rADTTA OPERATING EXPENDITURES MUNICIPAL TRENDS A FIVE-YEAR COMPARISON OF GENERAL STATISTICS 1985-86 1986-87 1987-88 of % of % of Actual Total Actual Total Estimated Total 67,125 67,841 70,606 35.77 35.77 35.77 33,263 33,377 34,659 178,846,581 7,365,380,961 109,726 PER CAPITA 706 EMPLOYEES PER 1,000 POP. 10.23 PERCENT OF GENERAL GOVERN- MENT EMPLOYEES TO OPERATING EMPLOYEES 9.22 CITY EXPENDITURES 4,320,412 GENERAL CITY OPERATIONS General 4,315,697 Public Safety 22,565,066 Public Works 8,653,458 Libraries 1,814,306 Park and Recreation 2,709,777 Total General City 12 Operations 40,058,304 OTHER OPERATIONS 2,155,815 Scholarship 750 Balboa Yacht Basin 120,000 Oil and Gas 468,737 Total Other 43,323,660 Operations 589,487 ENTERPRISE OPERATIONS -- Water 6,690,737 Marinapark 87,458 Total Enterprises 137,363 Operations 6,778,195 TOTAL ALL CITY 1 OPERATIONS 47,425,986 CAPITAL IMPROVEMENTS 13,093,923 TOTAL CITY EXPENDITURES 60,519,909 180,434,990 150,000,000 7,818,718,183 8,630,217,978 115,250 122,230 759 738 10.35 10.15 9.01 8.96 7 4,320,412 7 4,078,495 5 39 24,458,270 37 25,747,390 32 15 9,518,657 14 9,427,630 12 3 1,976,880 3 2,155,815 3 5 3,049,441 5 3,096,060 4 69 43,323,660 66 44,505,390 56 -- -0- -- 1,650 -- 137,363 -- 366,870 -- 1 793,387 1 364,190 -- 1 930,750 1 732,710 -- 11 7,105,220 11 6,840,350 9 131,951 _ 61,790 -- 11 7,237,171 11 6,902,140 9 81 51,491,581 78 52,140,240 65 22 14,345,441 22 27,703,380 35 103 65,837,022 100 79,843,620 100 —7— FIRST CONTINENTAL FINANCIAL CORPORATION First Continental Financial Corporation was organized under the laws of the State of Texas. FCFC's headquarters are located at 8080 North Central Expressway, Suite 850, Dallas, Texas 75206. Since its inception, FCFC has actively engaged in tax-exempt financing throughout the United States. The President and Chief Executive Officer of FCFC is Barry L. Friedman. Mr. Friedman has been involved in the field of tax-exempt financing since 1977. THE BASE LEASE The following is a summary of certain provisions of the Base Lease. This summary is qualified in all respects by reference to the Base Lease for a complete description of the rights and obligations of the parties thereto. Copies of the Base Lease may be obtained from the Trustee. General The Base Lease is entered into by and between the City, as lessor, and FCFC, pursuant to which FCFC is leasing the Project Site from the City for a stated term of 20 years. Term The term of the Base Lease shall commence upon execution thereof and shall end on the earliest of (a) the day on which the Lease terminates after payment and performance of all obligations of the City thereunder, including, without limitation, the payment of all Lease Payments; (b) the day on which the Lease shall terminate after exercise by City of its purchase option thereunder; or (c) February 15, 2008. Purpose FCFC shall use the Project site solely for the purpose of financing the acquisition of the Project by the City, as well as for such purposes as may be incidental thereto; provided, that in the event of default by the City under the Lease, FCFC may use the Project for any purpose whatsoever. THE T,F.A SR The following is a summary of certain provisions of the Lease. This summary is qualified in all respects by reference to the Lease for a complete description of the rights and obligations of the parties thereto. Copies of the Lease may be obtained from the Trustee. General The Lease is entered into by and between the City, as lessee, and FCFC, as lessor, pursuant to which FCFC is leasing the Project to the City. Lease Term The Lease term commences on February 15, 1988, and ends February 15, 1992. The Lease will terminate upon the earlier of the expiration of the Lease term, the termination of the Lease by the City due to nonappropriation, or the termination of the Lease after exercise by the City of its option to purchase the Project. Lease Payments and Deposits The Lease requires, subject to annual appropriations, a total of ten (10) Lease Payments commencing on August 15, 1988, and continuing semi-annually thereafter on each February 15 and August 15 until all Lease Payments have been made. To assure payment of the Lease Payments, the City has agreed under the Lease to make sixty (60) Lease Payment Deposits (the "Deposits") commencing on March 15, 1988, and continuing thereafter on the fifteenth day of each month during the term of the Lease. FCFC will invoice the City for each of the Deposits due under the Lease at least ten (10) days prior to its due date. Each of the Deposits will be invested and applied, together with the interest income thereon to make the Lease Payment when due. Purchase Option The City will have the option to purchase the Project on at least 30 days prior written notice on February 15 of each year during the term thereof by paying an amount which together with amounts on deposit under the Indenture will be sufficient to pay the principal of and interest on the Certificates due on such date. MIC Covenants of Cit The City will, at the City's own cost and expense, service, repair and maintain the Project in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and will replace any part of the Project as may from time to time become worn out, lost, stolen, destroyed, damaged or unfit for use. There will be no abatement or reduction of the obligations of the City to make payment of'the Lease Payments required under the Lease except as expressly provided. Nonappropriation of Funds In the event no funds or insufficient funds are appropriated and budgeted or are otherwise available by any means whatsoever in any fiscal period for Lease Payments due under the Lease, then the City will immediately notify FCFC or its assignee of such occurrence and the Lease will terminate on the last day of the fiscal period for which appropriations were received without penalty or expense to the City of any kind whatsoever, except as to the portions of Lease Payments for which funds will have been appropriated and budgeted or are otherwise available. The City will have no right to terminate the Lease if, during the fiscal period that termination of the Lease would have otherwise occurred, any funds are appropriated to it, or by it, for the acquisition, retention or operation of the Project or any other facilities (real or personal) or equipment performing functions similar to the Project. Nonsubstitution During the Lease Term, the City will not give priority to the application of funds for the acquisition, retention or operation of any real or personal property or facilities performing functions similar to the Project. If the City terminates the Lease, the City has agreed not to purchase, lease, rent or otherwise acquire the use of any real or personal property or facilities performing functions similar to the Project during the period commencing on the date of termination of the Lease and ending on last day of the fiscal period follow- ing the fiscal period during which the termination occurred. -10- Title Subject to the Base Lease and the Lease, title to the Project and all additions, repairs, replacements or modifications thereto will rest with the City so long as the City is not in default under the Lease and the Lease has not been terminated pursuant to its terms. Taxes, Other Governmental Changes, Utility Charges The City shall pay all property and excise taxes and other governmental charges of any kind whatsoever which are at any time lawfully assessed or levied against or with respect to the Project or any part thereof or the Lease Payments, which become due during the term of the Lease. The City shall also pay when due all gas, water, steam, electricity, heat, power, telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project, and all special assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Project; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Lease term as and when the same become due. The City shall not be required to pay any Federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit, excess profit, capital stock, corporate, or other similar tax payable by FCFC, its successors or assigns, unless such tax is made in lieu of or as a substitute for any real estate tax upon the Project. The City may, at the City's expense and in the City's name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Trustee shall notify the City that, in the opinion of independent counsel, by nonpayment of any such items the interest of the Trustee in the Project will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or provide the Trustee with full security against any loss which may result from nonpayment, in form satisfactory to the Trustee. -11- Indemnification They City shall defend, and indemnify FCFC against, and hold FCFC harmless from, any and all claims, actions, proceedings, expenses, damages or liabilities, including attorneys' fees, court costs, judgments and interest thereon, arising out of, or in any way related to, the Project, including, but not limited to, its selection, purchase, delivery, possession, use, operation, condition, or existence, provided, however, the City's duty to defend, indemnify and hold FCFC harmless shall not extend to claims or lawsuits arising out of the sole and exclusive negligence, or willful misconduct, of FCFC or its employees. The City shall, through its established program of self-insurance, promptly investigate and process all claims for bodily injury or property damage that are in any way related to the project. The City shall notify FCFC, in writing, or any claim or loss that has a reasonable judgment potential in excess of $100,000.00 and, upon request, will make all information relative to the claim or lawsuit available to FCFC. Events of Default Under the Lease, the term "Event of Default" means the occurrence of any one or more of the following events: (a) the City fails to make any Lease Payment (or any other payment) as it becomes due in accordance with the terms thereof; (b) the City fails to perform or observe any other covenant, condition, or agreement to be performed or observed by it thereunder and such failure is not cured within twenty (20) days after written notice thereof; or, (c) the discovery by FCFC that any statement, representa- tion, or warranty made by the City in the Lease or in any writing ever delivered by the City in connection therewith is false, misleading, or erroneous in any material respect. Remedies Upon the occurrence of an Event of Default, and as long as such Event of Default is continuing, the Trustee may, at its option, exercise any one or more of the following remedies: (a) By written notice to the City, declare an amount equal to all amounts then due under the Lease and all remaining Lease -12- Payments due during the Lease Term to be immediately due and pay- able, whereupon the same shall become immediately due and pay- able; (b) By written notice to the the City, request the City to, at the City's expense, promptly return the Project to the Trustee and the Trustee, at its option, may enter upon the Project and take immediate possession thereof; (c) Sell or lease the Project or sublease it for the account of the City, holding* the City liable for all Lease Payments and other payments due to the effective date of such selling, leasing or subleasing and for the difference between the purchase price, rental and other amounts paid by the purchaser, lessee or sublessee pursuant to such sale, lease or sublease and the amounts payable by the City thereunder; and, (d) Exercise any other right, remedy or privilege which may be available to it under applicable laws of the State of California or any other applicable law or proceed by appropriate court action to enforce the terms of the Lease or to recover damages for the breach of the Lease or to rescind the Lease. In addition, the City will remain liable for all covenants and agreements under the Lease and for all legal fees and other costs and expenses, including court costs, incurred by FCFC with respect to the enforcement of any of the remedies listed above or any other remedy available to FCFC. THE TRUST INDENTURE The following is a summary of certain provisions of the Indenture. This summary is qualified in all respects by reference to the Indenture for a complete description of the rights and obligations of the City, FCFC and the Trustee thereunder. Copies of the Trust Indenture may be obtained from the Trustee. Application of Certificate Proceeds There shall be delivered to the Trustee at the time the Certificates are executed and delivered a closing statement executed by an authorized officer of FCFC showing: (a) the amount of the proceeds of the sale of the Certificates, including accrued interest, if any; (b) the amounts of accrued and capitalized interest, if any, on the Certificates to be deposited in the Certificate Fund; (c) the amount to be deposited in the Project Acquisition Fund; (d) the amount to be deposited to the -13- Reserve Fund and (e) amounts payable with respect to the issuance costs of the Certificates. The closing statement shall be accompanied by the investment instructions, which shall contain a statement with respect to the disposition of moneys received by the Trustee. Project Acquisition Fund Pending the acquisition of the Project site and the subsequent construction and completion of the Project, the Trustee will create and maintain a special fund to be designated as "The City of Newport Beach, California Parking Facility Project Acquisition Fund." The Trustee will disburse from the Project Acquisition Fund from time to time, pursuant to written instructions signed by FCFC and the City, amounts sufficient to pay, in whole and in part, the Project Costs. In making such disbursement, the Trustee may rely on such written instructions without further investigation or inquiry. Upon the occurrence of the earlier of January 15, 1991, or the final payment of the Project Cost, the Trustee will transfer all funds on deposit in the Project Acquisition Fund (in integral multiples of $5,000) to the Certificate Fund for redemption of Certificates on February 15, 1991, or if transferred earlier on the next succeeding Distribution Date. If such transfer is made prior to January 15, 1991, any amounts then remaining in the Project Acquisition Fund shall be transferred also to the Certificate Fund to be applied to the Distribution due on the next succeeding Distribution Date. Reserve Fund The Reserve Fund shall be maintained by the Trustee until such time as (i) the Lease Payments are paid in full pursuant to the terms of the Lease, (ii) the Lessee has paid the entire Concluding Payment Amount in accordance with the Lease, or (iii) the Indenture is terminated. If on any Distribution Date the amount in the Certificate Fund shall be less than the amount required to pay the Lease Payment in full, the Trustee shall withdraw from the Reserve Fund to the extent necessary to make good the deficiency. Any amounts so transferred from the Reserve Fund shall not be considered payment in full of a Lease Payment and shall, upon receipt of the delinquent Lease Payment, be repaid from such Lease Payment to the Reserve Fund. Whenever the amount in the Reserve Fund, together with the amount in the Certificate Fund, is sufficient to pay in full all Outstanding Certificates in accordance with their terms, the funds on deposit in the Reserve Fund shall be transferred to the Certificate Fund. -14- Certificate Fund On each Distribution Date, the Trustee shall disburse to the Registered Owners (but solely from and to the extent of moneys on deposit in the funds established hereunder) an amount sufficient to make all payments of the principal of and interest on the Certificates becoming due on such Distribution Date. If on any Distribution Date, the amount of all payments due and payable on the Certificates exceeds the amount on hand in the Certificate Fund, taking into account any transfers made from the Reserve Fund, the Trustee shall apply the moneys on hand therein first to the payment of all interest due with respect to all Certificates, pro rata if necessary, and second to the payment of that portion of the unpaid principal balance of each Certificate which is then due, pro rata if necessary. RISK FACTORS THE FOLLOWING CONSIDERATIONS OR OCCURRENCES COULD ADVERSELY AFFECT THE ABILITY OF THE TRUSTEE TO PAY THE PRINCIPAL OF AND INTEREST ON THE CERTIFICATES. THE CONSIDERATIONS OR OCCURRENCES DESCRIBED IN THE FOLLOWING PARAGRAPHS SHOULD BE CAREFULLY WEIGHED BY A POTENTIAL PURCHASER OF THE CERTIFICATES. Non -Appropriation In the event that the City fails to budget and have avail- able sufficient funds to make the Lease Payments and to meet its other obligations under the Lease, the City may elect not to renew the Lease. In the event of such non -appropriation, the obligation of the City to make further Lease Payments under the Lease shall cease and the City shall have no further obligations thereunder, other than to surrender the Project. Uncertainty Of Remedies In the event of a default by the City or a failure to budget and have available sufficient funds to make Lease Payments under the Lease, it is possible that the City would seek and obtain, on the ground that the City could not properly function without the Project, injunctive relief restraining FCFC or the Owners of the Certificates from repossessing the Project or otherwise enforcing their rights under the Lease. There is little or no precedent in this area, therefore no prediction can be made as to the extent to which such equitable relief might be available to the City or the circumstances in which such equitable relief may be granted. -15- Investment of Monies The Deposits will be invested from the time that such Deposits are received until the time they are required to be paid transferred to the Trustee to pay Distributions when due. In the event that payment of the Deposits is delinquent, the Trustee may not have available sufficient monies to make Distributions when due. Disposition of Collateral In the event that the Project is repossessed for any reason, there can be no assurance that the Project can be leased, sold or otherwise disposed of for a net amount equal to the cost of disposition, the then outstanding aggregate principal amount of the Certificates and accrued interest on the Certificates to the date of redemption. Failure to Acquire Project Site It is anticipated that the City will acquire fee simple title to the Project site on or about April 1, 1988, subject only to the Base Lease, the Lease and the lien of the Indenture. There is no assurance however that the Project site will be acquired on such date or on any date prior to February 15, 1991. (See "The Certificates - Redemption.") Failure to so acquire the Project site may result in an event of non -appropriation or otherwise cause the Certificates to be called for redemption prior to maturity. TAX EXEMPTION On the date of original delivery of the Certificates, Dorsey & Whitney, Minneapolis, Minnesota, Special Tax Counsel, will render its legal opinion that, based upon federal laws, regula- tions, rulings and decisions then in effect, the amount of each Lease Payment designated as and comprising interest and received by the registered Owners of the Certificates is not includable in gross income of such recipients for United States income tax pur- poses. Such opinion will further state that the interest portion of each Lease Payment is includable in reported profits or book income of corporations for the purpose of a corporate alternative minimum tax for taxable years beginning after December 31, 1986, and that such interest portion is also includable in the computa- tion of alternative minimum taxable income for purposes of an environmental tax imposed by Section 59A of Internal Revenue Code of 1986 (the "Code") on corporations for taxable years beginning after December 31, 1986. In the opinion of Dorsey & Whitney, 0i -IC S4 such interest portion also may be includable in the income of foreign corporation for purposes of the branch profits tax imposed by Section 884 of the Code, and in the case of an insur- ance company subject to the tax imposed by Section 831 of the Code, for taxable years beginning after February 15, 1986, the amount which would otherwise be taken into account as losses incurred under Section 832(b) (5) of the Code must be reduced by an amount equal to fifteen percent of such interest portion that is received or accrued during the taxable year. Noncompliance by the City with certain continuing requirements of the Code may result in inclusion of such interest portion in gross income of the registered Owners of the Certificates for United States income tax purposes. Dorsey & Whitney will express no opinion as to the validity and enforceability of the Lease, the Agreement or the other documents contemplated thereby, and will rely upon the legal opinion of Robert Burnham, City Attorney, as to the matters stated therein. OTHER LEGAL MATTERS On the date of the original delivery of the Certificates, Robert Burnham, City Attorney for the City, will render his legal opinion that the Lease constitutes a valid and binding obligation of the City, enforceable in accordance with its terms except as such enforceability may be limited by applicable bank- ruptcy, insolvency, moratorium, reorganization or similar laws, from time to time in effect, and equitable principles. MISCELLANEOUS Any statements in this Offering Circular involving matters of opinion or estimates, whether or not expressly so stated, are intended as such and not as representations of fact. No repre- sentation is made that any of such statements will be realized. This Offering Circular is not to be construed as a contract or agreement between the City and the Owners and has not been authorized or executed by the City. This Offering Circular is submitted only in connection with the sale of the Certificates and may not be reproduced or used in whole or in part for any other purpose. -17- Appendix A FINANCIAL STATEMENT For the Fiscal Year Ended June 30, 1987 Intentionally Omitted ARBITRAGE AND TAX CERTIFICATE We, the undersigned do hereby certify that we are the duly qualified M/q and ei-ry MAN46-E2 , respectively, of Newport Beach, California (the "City"), and that in our official capacity as such officers we are familiar with the execution and delivery, on behalf of the City of Newport Beach, California of that certain Real Property Lease/Purchase Agreement No. 87-0340 (the "Lease"), dated as of February 15, 1988, by and between First Continental Financial Corporation, as lessor (the "Lessor"), and the City. This Certificate is being issued pursuant to Section 148 of the Internal Revenue Code of 1986 (the "Code"), and Treasury. Regulations, Sections 1.103-13, 1.103-14 and 1.103-15 promulgated thereunder (the "Regulations"). The following facts, estimates and circumstances are in existence on the date of this Certificate or are reasonably expected to occur hereafter. 1. Under the Lease, the Lessor will lease and sell to the City a certain paved, metered municipal parking facility (the "Project") and the City is required to lease and purchase the Project from the Lessor by making Lease Payments, comprised of both principal and interest, on the dates and in the amounts set forth in Exhibit "B" to the Lease, subject to the terms and conditions of the Lease. 2. The Project is an integral part of the City's plans to revitalize the Cannery Village area, and the Site is designated for use as a public parking facility on the Cannery Village Specific Area Plan and other official documents of the City. 3. For the purpose of meeting its obligations under the Lease and to make available to the City the moneys required to pay the costs of the Project, the Lessor will cause to be issued pursuant to a Trust Indenture, dated as of February 15, 1988, by and between the Lessor and Sovran Bank, N.A., as Trustee, certificates of participation in the aggregate principal amount of $795,000 (the "Certificates"). 4. The net amount of proceeds received by.City on February 25, 1988 (the "Closing Date") as a result of the delivery of the Lease and the sale of the Certificates will be $792,407.22 (the "Net Proceeds") (principal amount of $795,000, less a placement fee charged by Shearson Lehman Hutton, Inc. of $3,975, plus accrued interest of $1,382.22, and is necessary to accomplish the purposes set forth in paragraph 1 above. 5. An amount of the Net Proceeds equal to $79,500 will be deposited on the date hereof in the Reserve Fund as a reasonably required reserve for the payment of debt service under the Lease Agreement. Such amount does not exceed the lesser of (i) 10% of the proceeds of the issue, (ii) 125% of the average annual debt service under the Lease Agreement, or (iii) the maximum annual debt service under the Lease Agreement. Investment earnings on amounts in the Reserve Fund will be immediately deposited upon receipt in the Certificate Fund. 6. The remainder of the Net Proceeds ($712,907.22) will be deposited on the date hereof in the Project Acquisition Fund and will be expended on the acquisition of the Project on or before February 15, 1991. In addition to the Net Proceeds, the City will cause the sum of $500,000 to be deposited with the Trustee for application as follows: (a) $12,907.22 will be disbursed to First Continental Financial Corporation to pay its fees and certain costs associated with the issuance of the Certificates; and (b) the balance thereof shall be deposited to the Project Acquisition Fund applied in accordance with the terms of the Indenture 7. Investment earnings on amounts in the Project Acquisition Fund will be immediately deposited upon receipt in the Certificate Fund. 8. The City intends to acquire the site of the Project from the current owner thereof pursuant to a certain "Contract for Sale of Real Property, the terms of which are being presently negotiated. If the City is unable to so acquire the Project, the City intends to exercise its powers of condemnation to acquire the Project site. Proceeds of the Lease and the Certificates in the approximate amount of $500,000 will be used to fund a portion of the purchase price of the Project site and the remainder of such purchase price will be funded directly by the City from other legally available funds. 9. Work on the remaining portion of the Project will proceed with due diligence to the completion thereof. The choice of the date of delivery and principal amount of the Lease Agreement was motivated by bona fide economic considerations, IWAM including market conditions and economies of issuance costs, and not by potential arbitrage earnings with respect to unexpended monies. 10. The City has incurred, or will incur within six months of the date hereof, binding obligations involving expenditures in excess of $100,000 for the acquisition of the Project. 11. The Certificate Fund will be used primarily to achieve a proper matching of revenues of City and debt service under the Lease Agreement within each year and will be depleted at least once a year except for a reasonable carryover amount not to exceed the greater of (i) one year's earnings on the Certificate Fund, or (ii) one -twelfth of annual debt service under the Lease Agreement. 12. Lease Payments will be paid from general revenues of City. Since the general revenues of City for any year will exceed the Lease Payments for such year, it is assumed that current debt service will be paid entirely from current revenues. Except for the Certificate Fund, and the Reserve Fund, City has not created or established or caused to be created or established, and will not create or establish or cause to be created or established, any sinking fund or other similar fund with respect to the Lease Agreement or the Certificates. 13. No portion of the amounts received from the delivery of the Lease Agreement and the Certificates will be used as a substitute for other funds which were otherwise to be used as a source of financing for the acquisition of the Project, and which have been or will be used to acquire, directly or indirectly, obligations producing a yield in excess of the yield on the Lease Agreement. 14. If, on the date which is 180 days after the date thereof, unexpended Net Proceeds exceed the lesser of five percent (5%) of the Net Proceeds or $100,000; or if, on the date which is one year following the date hereof, the Net Proceeds amounts deposited to the Project Acquisition Fund have not been totally expended, the City shall take all steps as may be required by special tax counsel selected by Lessor to comply with the arbitrage rebate requirements of the Tax Reform Act of 1986, including without limitation Section 148(f) thereof. 15. The Project has not been, and is not expected during the term of the Lease, to be sold or otherwise disposed of by the City. -3- 16. To the best of the knowledge and belief of the under- signed, the expectations of the City, as set forth above, are reasonable; and there are no present facts, estimates and circum- stances which would change the foregoing expectations. 17. The City has not been notified of the listing or pro- posed listing of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon. WITNESS our hands as of the 15th day of February, 1988. THE CITY: Ne ort Beach, California By: ignature Name: ROBERT L. WYNN Title: —GiTY PLNNA6ER By: Signature Name: Title: -4- GENERAL CERTIFICATE OF NEWPORT BEACH, CALIFORNIA The undersigned do hereby certify that we are the duly elected or appointed and acting officials of Newport Beach, California (the "Lessee") holding the respective offices set forth below our signatures and do hereby execute and deliver this certificate for the benefit of all persons interested in that certain Real Property Lease/Purchase Agreement No. 87-0340, dated as of February 15, 1988 (the "Lease"), by and between the City and First Continental Financial Corporation (the "Lessor"). Terms defined in the Lease are used in this certificate with the same meanings as in the Lease. We do further certify as follows: 1. We are the duly chosen, qualified and acting officers of the City for the offices shown beneath our signa- tures, and in such capacities we are familiar with and have personal knowledge of the matters hereinafter stated. 2. The City is a political subdivision of the State of California, duly created and existing under the constitution and laws thereof. 3. The following named persons hold the respective offices appearing below and the signatures appearing opposite their names are the true and genuine signatures of such persons. OFFICE TITLE// NAME I' -1 4. The Lease and all certificates and other documents, (collectively, the "Financing Documents") to which the City is a party, as executed and delivered have been executed and delivered by the above mentioned duly authorized officers of the City acting in their official capacities. 5. To the best of our knowledge, (i) the representations and warranties of the City in the Lease are true and correct on and as of the date hereof as though made on and as of the date hereof and (ii) the City has complied with all terms on its part to be performed or satisfied by it under the Lease at or prior to the date hereof. 6. To the best of our knowledge no litigation is pending or, to our knowledge, threatened in any court to restrain or enjoin the issuance or delivery of the Certificates or the payment of the Lease Payments, or in any way contesting or affecting the validity of the Certificates, the operating budget or the Lease, or contesting the powers of the City or contesting the authorization of the Certificates, the Lease or the operating budget or the acquisition of the Project. 7. On the date hereof, each of the persons signing this Certificate is the duly elected or appointed, qualified and acting officer of the City holding the office set forth below such person's signature, and each such person's signature appearing below is true and genuine. 8. The City has taken all actions necessary to appropriate or otherwise provide for all amounts required to be paid under the Lease during the Lessee's current fiscal period ending June 30, 1988 and the City has or expects to have sufficient unexhausted funds to make such payments as the same become due. 9. The Project will be used by the City only for the purpose of performing one or more of its governmental functions consistent with the permissible scope of its authority. No portion of the Project will be leased to or operated by any person in connection with a non- governmental trade or business, nor will the City take anv action which will cause the Certificates or the Lease to become "Arbitrage Bonds" or "Private Activity Bonds" as such terms are defined in the Code. 10. The Project is an integral part of the City's plans to revitalize the Cannery Village area, and the Site is designated for use as a public parking facility on the Cannery Village Specific Area Plan and other official documents of the City. The City has an immediate need for and expects to make immediate use of substantially all the Project, which is not temporary or expected to diminish in the foreseeable future. The City intends to acquire the Site, either through purchase from the present owner thereof, pursuant to a "Contract for Sale of Real Property" or, through the exercise of its powers of condemnation. 11. The City will prepare or cause to be prepared and will file or cause to be filed a Form 8038-G in the manner and within the time provided by Section 149(e) of the Internal Revenue Code of 1986. 12. The Federal Taxpayer Identification number of the City is 95 6000 751 "- WITNESS OUR HANDS AND THE OFFICIAL SEAL OF THE LESSEE as of the 05-14 day of 1988. yyy Title: ROBERT L. WYNN Title: CITY MANAGER (SEAL) INCUMBENCY CERTIFICATE OF LESSOR I, Dana Juergensen, do hereby certify that I am the duly elected or appointed and acting Secretary of First Continental Financial Corporation ("FCFC"), a corporation duly organized and existing under the laws of the State of Texas, that I have custody of the records of such company. In connection with the financing by the City of Newport Beach, California (the "Lessee") of certain equipment (the "Equipment") pursuant to a certain Real Property Lease/Purchase Agreement, dated as of February 15, 1988, by and between FCFC and Lessee, I do further certify that: 1. FCFC is a corporation duly organized and validly existing under the laws of the State of Texas, with all requisite power and authority to own its properties and carry on its bus- iness as now being conducted. 2. The following named persons hold the respective offices appearing below and the signatures appearing opposite their names are the true and genuine signatures of such persons: OFFICE TITLE SIGNATURE Chief Executive Officer Barry L. Friedman Vice President Barbara A. Friedman�s�ti_s, The above named persons shall serve in such capacity until such time as their successors shall have been appointed. 3. The Vice President and the President, and each of them, have the authority on behalf of FCFC to execute and deliver all documents and certificates required to be executed in connection with the Lease, the issuance of the $795,000 Certificates of Participation - Lease Rentals (City of Newport Beach, California, Parking Facility Project) and the assignment of the Lease to the registered, owners of the certificates. IN WITNESS WHEREOF, I have duly executed this cert'ficate and affixed the seal of FCFC hereto as of the aS'�day of 1988. Dana Juergense Se etary 10.05 February 15, 1988 First Continental Financial Corporation 8080 N. Central Expressway; Suite 850 Dallas, Texas 75206 Re: Invoicing Procedure for Project Lease -Purchase Agreement No. 87-0340, dated as of February 15, 1988 (the "Lease"), by and between Newport Beach, California ("Lessee") and First Continental Financial Corporation ("Lessor") Gentlemen: Reference is hereby made to the above-described Lease. Outlined below is the procedure we have elected for invoicing. A. City requires the following number of invoice copies: two (2) B. Address to submit invoices to: City of Newport Beach 3300 Newport Boulevard P.O. Box 1768 Newport Beach, California 92658-8915 Attn: Tele: C. For our internal processing, we require receipt of the invoice at least 30 days prior to payment date. First Continenta' 'inancial Corporation February 15, 1988 - Page 2 of 2 D. We require the following information on the invoice for identification purposes: Project Lease -Purchase Agreement No. 87-0340 Sincerely, Newport Beach, California S ig ature ) Name: ROBERT L. WYNN (Please Type) Title: CITY MANAGER (Please Type) CLOSING STATEMENT February 22, 1988 This Closing Statement is delivered pursuant to Section 3.02 of the Trust Indenture, dated as of February 15, 1988, by and between First Continental Financial Corporation in favor of Sovran Bank, N.A., as trustee (the "Trustee"), in connection with the issuance and delivery of "$795,000 Certificates of Participation - Lease Rentals (City of Newport Beach, California, Parking Facility Project)" (the "Certificates"). On February 24, 1988 the Trustee will receive a wire transfer from City National Bank, 3388 Via Lido, Newport Beach, California 92663 (Steve Stogsdill; (714) 675-9940) in the amount of $500,000 representing the City's contribution to the Project Costs. The Trustee is directed to deposit such funds to the Project Acquisition Fund. The Purchase Price of the Certificates is $792,407.22 repre- senting the par amount of the Certificates less a placement fee of $3,975.00 plus accrued interest of $1,382.22. On February 25, 1988 (the "Closing Date"), Shearson Lehman Hutton, Inc. will deliver to the Trustee immediately available funds in the amount of the Purchase Price. The Trustee is authorized and directed to deposit from such funds $79,500 to the Reserve Fund and to deposit the remainder of such funds (totalling $712,907.22) to the Project Acquisition Fund. From the amounts deposited to the Project Acquisition Fund, the Trustee is authorized and directed to make the following trans- fers and disbursements: 1. $1,200,000 shall be invested in accordance with the Investment Instructions delivered pursuant to the Indenture 2. $12,907.22 shall be wire transferred to: Deposit Guaranty Bank for deposit into the account of First Continental Financial Corporation, Account # 0109827, ABA Routing # 111000973. FIRST CONTINENTAL FINANCIAL CORPORATION By: ` Authorized Officer 1 1: INVESTMENT INSTRUCTIONS February 25, 1988 These investment instructions are delivered pursuant to Section 3.02 of the Trust Indenture (the "Indenture") dated as of February 15, 1988, by and between First Continental Financial Corporation ("FCFC") in favor of Sovran Bank, N.A., as trustee (the "Trustee") in connection with the issuance of delivery of $795,000 Certificates of Participation - Lease Rentals (City of Newport Beach, California, Parking Facility Project): 1. The Trustee is hereby authorized and directed to invest moneys deposited from time to time to the Certificate Fund (as defined in the Indenture), and immediately upon such deposit, with the Investment Bankds (as defined in the Indenture), pursuant to and in accordance with Investment Agreements, (as defined in the Indenture). All funds so invested pursuant to this paragraph shall be transfered by wire transfer to Provident Bank - Dallas, which shall immediately transfer a pro rata amount of such transfer to the other Investment Banks. 2. The Trustee is hereby authorized and directed to invest the Reserve Fund ($79,500) in a Certificate of Deposit issued by Provident Bank - Dallas, Dallas, Texas having a maturity of February 15, 1993, and bearing interest at the rate of 9.0% per annum. 3. The moneys remaining on deposit in the Project Acquisition Fund, after making the disbursements described in the Closing Statement (as defined in the Indenture), shall be deposited in an Eligible Investment, consisting of: Certificate of Deposit maturing April 1, 1988 at a rate not less than 6.5%. FIRST CONTINENTAL FINANCIAL CORPORATION Authorized Officer "Diffim% THE STATE OF VIRGINIA COUNTY OF RICHMOND k TRUSTEE'S CLOSING CERTIFICATE The undersigned officer of Sovran Bank, N.A., Richmond, Virginia (the "Trustee") hereby certifies as follows: (1) That all capitalized terms used in this Certificate, including this paragraph, have the same meanings defined for and assigned to them in that certain Trust Indenture (the "Agreement"), dated as of February 15, 1988, and executed between Sovran Bank, N.A., and First Continental Financial Corporation (FCFC) . (2) That the Agreement has been properly executed and delivered by the undersigned and both of such persons are duly qualified officers of the Trustee having proper, lawful authority to execute and deliver the Agreement and to bind the Trustee thereto. (3) That the execution and delivery and performance of its obligations under the Agreement has been authorized by and are in full conformity with the terms and requirements of all corporate documents of the Trustee governing the same. (4) That the following persons are authorized to authenticate the Certificates, and the signature appearing opposite their names and titles are true and correct specimens of their signatures: Name ROBERT D. HORNER KAREN NOONAN Title ASSiStant Vice Presicent TRUST OFFICER Specimen Signatures (5) The purchase price for the Certificates, as provided in the Closing Statement, has been received, and such moneys have been deposited as provided in the Closing Statement. 10.06 (6) The Certificates, dated February 15, 1988, and serially numbered R-1 through R- 55 inclusive, have this day been authenticated and delivered to the Purchasers thereof, as set forth in the Closing Statement. IN WITNESS WHEREOF, the undersigned have executed this certificate as of the ' ,�t/ day of n 19��. SOVRAN BANK, N.A., as Trustee By: Name: fJ-12o L P/4-�. rn E 2 Title: Pre --S: L.'-+—