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HomeMy WebLinkAboutReso 39-1994RESOLUTION NO. 39-94 CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION APPROVING THE AMENDMENT OF LEASE AGREEMENT AND EXECUTION OF ALTERNATE CREDIT FACILITY AND EXECUTION OF SUPPLEMENTAL AGREEMENT RE CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY REVENUE BONDS FOR THE MAGNOLIA CENTER REHABILITATION PROJECT WHEREAS, the California Health Facilities Financing Authority (the "Authority") issued its California Health Financing Facilities Authority Revenue Bonds (County Program), 1986 Series B (the "Bonds") for the purpose of providing financial assistance to participating health institutions in the financing, refinancing and reimbursing of the costs of equipment and capital improvements constituting a project (as defined in the California Health Facilities Financing Authority Act); and WHEREAS, the Bonds were issued pursuant to an indenture of trust, dated as of August 1, 1986 (as heretofore amended and supplemented, the "Indenture"), between the Authority and Security Pacific National Bank predecessor to Bank of America National Trust and Savings Association, as trustee (the "Trustee"); and WHEREAS, in connection with the issuance of the Bonds, the Authority and the Trustee entered into a Letter of Credit and Reimbursement Agreement, dated as of August 1, 1986 (the "Original Reimbursement Agreement"), with Swiss Bank Corporation, San Francisco Branch (the "Original Credit Provider"), in order to provide credit support and liquidity for the Bonds; and WHEREAS, pursuant to the Original Reimbursement Agreement, the Original Credit Provider provided a Letter of Credit, dated August 7, 1986 (the "Original Credit Facility"), in order to provide credit support and liquidity for the bonds; and WHEREAS, the Original Credit Facility is scheduled to expire on August 10, 1994, and the Original Credit Provider has declined to further extend the term of the Original Credit Facility; and WHEREAS, a commitment has been secured from Cooperative Centrale Raiffeisen-Boerenleenback B.A. "Rabobank Nederland," New York branch, a federally licensed branch of a banking association organized under the laws of the Netherlands (the "Alternate Credit Provider"), to provide a letter of credit (the "Alternate Credit Facility"), to be executed by the Alternate Credit Provider and delivered to the Trustee, in order to provide credit support and liquidity for the Bonds; and WHEREAS, in connection with providing financial assistance to participating health institutions, the Authority has entered into a lease agreement, dated as of June 30, 1989 (the "Lease Agreement"), with the Lessee; and WHEREAS, in order to accommodate the Alternate Credit Facility, it is necessary to amend the Lease Agreement; and WHEREAS, the City Council of the Lessee deems it desirable to enter into a supplemental lease agreement, dated as of April 1, 1994 (the "Supplemental Agreement"), between the Authority and the Lessee, in order to modify and amend the Lease Agreement; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as follows: 1. The Lessee deems it desirable to approve the execution and delivery of the Alternate Credit Facility, to amend the Lease Agreement as set forth in the Supplemental Agreement as presented to this meeting, and to authorize all other actions necessary in connection therewith. 2. The execution and delivery of the Alternate Credit Facility by the Alternate Credit Provider is hereby approved. 3. The proposed form of Supplemental Agreement, between the Authority and the Lessee, as presented to this meeting is hereby approved. The Mayor or City Manager of the Lessee is hereby authorized and directed, for and on behalf of the Lessee, to execute and deliver to the Authority the Supplemental Agreement in substantially said form with such changes therein as such officer, with the advice of counsel to the Lessee, shall approve, such approval to be conclusively evidenced by the execution and delivery thereof. 4. The city Clerk or the Deputy City Clerk or the Assistant City Clerk is hereby authorized and directed, for and on behalf of the Lessee, to witness or attest the signature of the officer executing the Supplemental Agreement and to affix and attest the seal of the Lessee as may be required in connection with the execution and delivery of the Supplemental Agreement. 5. The proper officers, agents and employees of the Lessee are hereby authorized and directed, for and in the name and on behalf of the Lessee, to take any and all actions and execute, acknowledge and deliver any and all agreements, instruments or other documents, and revisions and corrections thereof and amendments thereto, as may in their discretion be deemed necessary or desirable to carry out and comply with the terms, provisions and intent of this Resolution and the Supplemental Agreement and any other agreements, instruments or documents entered into in connection with any of the foregoing. 2 I hereby certify that the foregoing Resolution was regularly introduced and adopted by the City Council of the City of South San Francisco at a reqular meeting held on the 13th day of AYES: NOES: ABSTAIN: ABSENT: April , 1994 by the following vote: Councilmembers Jack Drago, John R. Penna, Roberta Cerri Teglia, Robert Yee and Mayor Joseph A. Fernekes None None None Magnolia Ctr. Lse 3 EXHIBIT TO RESOLUTION NO. 39-94 FIRST SUPPLEMENTAL LEASE AGREEMENT Between CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY And CITY OF SOIYHt SAN FRANCISCO Dated as of April 1, 1994 TABLE OF CONTENTS Page Parties ................................................... 1 Preambles ................................................. 1 SECTION 1. Del'tuitions ....................................... 2 SECTION 2. Amendment of Certain Def'mitions ......................... 2 SECTION 3. Amendment of Section 11.01 ............................ 3 SECTION 4. Amendment of Section 11.13 ............................ 3 SECTION 5. Amendment and Restatement of Paragraph No. 2 of Exhibit E to the Lease Agreement ..................... 4 SECTION 6. Findings ......................................... 4 SECTION 7. Provisions of Lease Agreement Not Otherwise Modified ........... 4 SECTION 8. Sevembility ....................................... 4 SECTION 9. Counterparts ...................................... 4 SECTION 10. Governing Law; Venue ............................... 4 SECTION 11. Effective Date .................................... 5 Execution ................................................ 6 ATI'ACHMENT I Amended and Restated Paragraph No. 2 of Exhibit E to Lease Agreement SF2-28923.1 i FIRST SUPPLEM~NTAL LEASE AGREEMF~NT This First Supplemental 12atse Agreement, dated as of April 1, 1994 (this "Supplemental Lease Agreement"), between the California Health Facilities Financing Authority, a public instrumentality of the State of California (the "Authority"), created under the California Health Facilities Financing Authority Act (constituting Part 7.2 of Division 3 of Tire 2 of the Government Code of the State of California) (the "Act"), and the City of City of South San Francisco, a city organi?od and existing under the laws of the State of California (the "Lessee"); W1TNESSETH: WHEREAS, pursuant to a Lease Agreement, dated June 30, 1989 (the "Lease Agreement"), between the Authority and the Lessee, the Authority made available to the Lessee a portion of the proceeds of the California Health Facilities Financing Authority Revenue Bonds (County Program), 1986 Series B (the "Bonds"), issued pursuant to an Indenture of Trust, dated as of August 1, 1986 (as heretofore amended and supplemented, the "Indenture"), between the Authority and Security Pacific National Bank, predecessor to Bank of America National Trust and Savings Association, as trustee (the "Trustee"), in order to finance the cost of acquiring a project for the benefit of the Lessee; WHEREAS, in connection with the issuance of the Bonds, the Authority entered into a Letter of Credit and Reimbursement Agreement, dated as of August 1, 1986 (the "Original Reimbursement Agreement"), with Swiss Bank Corporation, San Francisco Branch (the "Original Credit Provider"); WI:IEREAS, pursuant to the provisions set forth in the Original Reimbursement Agreement, the Original Credit Provider delivered a Letter of Credit, dated August 7, 1986 (as amended, the "Original Credit Facility"), to the Trustee, in order to provide liquidity and credit support for the Bonds; WHEREAS, the Original Credit Provider has advised the Authority that the Original Credit Facility will not be extended beyond its scheduled expiration date, August 10, 1994; WHEREAS, pursuant to the provisions set forth in Section 5.14 of the Indenture, the Authority has secured a commitment from Cooperafieve Centrale Raiffeisen- Boerenleenhank B.A. "Rabobank Nederland," New York Branch, a federally licensed branch of a banking association organized under the laws of the Netherlands (the "Alternate Credit Provider"), to provide a Letter of Credit (the "Alternate Credit Facility") in order to provide credit support and liquidity for the Bonds; SP2-28923.1 WttEREAS, in connection with the replacement of the Original Credit Facility with the Alternate Credit Facility, it is necessary to amend and supplement the Lease Agreement as hereinafter set forth; WItEREAS, pursuant to Section 11.04 of the Lease Agreement and Section 13.01 of the Indenture, the Authority and the Lessee may amend the Le~se Agreement, and the Trustee may consent to any amendment of the Lease Agreement, in connection with any change which, in the judgment of the Trustee, is not to the material prejudice of the Trustee or the owners of the Bonds, provided that the Bank (as such term is defined in the Indenture), shall have consented to such amendment; and WHEREAS, the Original Credit Provider, the Alternate Credit Provider and the Trustee have consented to the execution and delivery of this Supplemental Lease Agreement; NOW, THEREFORE, for and in consideration of the foregoing and the premises hereinafter contained, the Authority and the Lessee hereby agree as follows: SECTION 1. Definitions. Unless otherwise specifically provided herein to the contrary, capitalized terms used in this Supplemental Lease Agreement shall have the meanings ascribed thereto in the Lease Agreement. SECTION 2. Amendment of Certain Definitions. The following del'tuitions set forth in Article I of the Lease Agreement are hereby amended to read as follows: "' Bank' means Cooperafieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland," New York Branch, a federally licensed branch of a banking association organized under the laws of the Netherlands, and any successor thereto or any financial institution which provides an Alternate Credit Facility for the Letter of Credit pursuant to Section 5.14 of the Indenture." "' Bank Rate' means a rate of interest per annum payable with respect to each Bank Bond, which, during the term of the Letter of Credit provided by Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland," New York Branch (and by the issuer of an Alternate Credit Facility unless otherwise provided in the related Credit Agreemen0, shall be the Prime Rate plus two percent (2%), calculated on a 365 or 366 day basis, as appropriate, for the actual number of days elapsed." "' Credit Agreement' means the Letter of Credit and Reimbursement Agreement, dated as of April 1, 1994, between the Bank and the Authority, as originally executed or as it may from time to time be supplemented or amended, or (to the extent applicable and appropriate) any similar agreement providing for an Alternate Credit Facility." SF2-2892.3.1 2 ' · Prime Rate' means, during the term of the Letter of Credit provided by Cooperafieve Centrale Raiffeisen-Boerenleenbank B.A. "Rabobank Nederland,' New York Branch (and by the issuer of an Alternate Credit Facility unless otherwise provided in the related Credit Agreement), the higher of (i) the rate of interest, as announced in New York, New York from time to time by the Bank as its base rate, and (ii) 1-1/2% above the overnight federal funds rate at which the Bank can acquire funds in New York, New York. Such Prime Rate shall change and become effective on the date of each change in the base rate announced by the Bank. Such Prime Rate is a reference rate only, and the Bank may make loans from time to time at interest rates above, equal to, or below the Prime Rate.' SECTION 3. Amendment of Section 11.01. The addresses for notices, certificates or other communications set forth in Section 11.01 of the Lease Agreement are hereby amended in their entirety to read as follows: "Authority: California Health Faeilides Financing Authority 915 Capitol Mall, Room 590 Sacramento, California 95814 Attention: Executive Director Rabobank Nederland 245 Park Avenue New York, New York 10067 Attention: Letters of Credit Department With a copy to: Rabobank Nederland Three Embarcadero Center, Suite 930 San Francisco, California 94111 "Trustee: Bank of America National Trust and Savings Association 333 South Beaudry Avenue, 25th Floor, #7170 Los Angeles, California 90017-3217 Attention: Ron Miller.' SECTION 4. Amendment of Section 11.13. The first paragraph of Section 11.13 of the Lease Agreement is hereby amended by the addition thereto of the following sentence as the last sentence of said paragraph: 8F2-28923.1 3 "Lessee hereby acknowledges that, notwithstanding any provision of this Lease Agreement or the Indenture, the Lessee has no right, rifle or interest in any funds deposited in the Letter of Credit Fund or any funds derived from the Letter of Credit and has no right to receive such funds under any circumstances." SECTION 5. Amendment and Restatement of Paragraph No. 2 of Exhibit E to the Lease Agreement. Paragraph No. 2 of Exhibit E to the Lease Agreement is hereby amended and restated to read in its entirety as set forth in Attachment I hereto. SECTION 6. Findings. Pursuant to Section 13.01 of the Indenture, the Authority and the Trustee have determined that the amendments contained herein are not to the material prejudice of the Trustee or the owners of the Bonds. Pursuant to Section 11.04 of the Lease Agreement, the Authority and the Lessee have secured the consent of the Trustee, the Original Credit Provider and the Alternate Credit Provider as evidenced by the execution of the Consent of the Trustee, the Consent of the Original Credit Provider and the Consent of the Alternate Credit Provider, each attached hereto. SECTION 7. Provisions of Lease Agreement Not Otherwise Modified. Except as specifically amended and supplemented by this Supplemental Lease Agreement, the Lease Agreement is hereby ratified, approved and conf'mned and remains in full force and effect, including, without limitation, the obligations of the Lessee under Article V of the Lease Agreement, and the Lessee specifically acknowledges that the Lessee is responsible for all Base Rental Payments and all Additional Rental Payments incurred in connection with the Lease Agreement. SECTION 8. Severability. If any provision of this Supplemental Lease Agreement shall be held or deemed to be illegal, inoperative or unenforceable, the same shall not affect any other provision herein contained or render the same invalid, inoperative or unenforceable to any extent whatsoever. SECTION 9. Counterparts. This Supplemental Lease Agreement may be simultaneously executed in several counterparts, each of which, when executed and delivered, shall be an original and all of which shall constitute but one and the same instrument. SECTION 10. Governing Law; Venue. This Supplemental Lease Agreement shall be governed by and construed in accordance with the laws of the State of California. This Supplemental Lease Agreement shall be enforceable in the State of California and any action arising out of this Supplemental Lease Agreement shall be fried and maintained in Sacramento County, California, unless the Authority waives this requirement. n ~ SECTION 11. Effective Date. This Supplemental Lease Agreement shall be effective on the date of delivery of the Alternate Credit Facility upon the execution hereof by the parties hereto and upon the execution of the Consent of the Trustee by the Trustee, the execution of the Consent of the Original Credit Provider by the Original Credit Provider and the execution of the Consent of the Alternate Credit Provider by the Alternate Credit Provider. 5F'2-28923.1 5 IN WITNESS WI~OF, the Authority has executed this Supplemental Lease Agreement with its seal hereunto affixed and attested by its duly authorized officers, and the Lessee has caused this Supplemental Lease Agreement to be executed in its name with its seal hereunto affixed and attested by its duly authorized officers, all as of the day and year first above written. CALIFORNIA HEALTH FACILITY FINANCING AUTHORITY, as Lessor By: Kathleen Brown, Chairperson [SEAL] By Deputy Attest: By Deputy Executive Director CITY OF SOUTH SAN FRANCISCO, [SEAL] By Its Attest: By Clerk Approved as to form: Counsel SF2-28923 6 ATTA~ I AMENDED AND RESTA~ PARAGRAPH NO. 2 OF EXHIBIT E TO LEASE AGIaF~F~MENT 2. The Lessee covenants and agrees to pay an annual credit fee to Rabobank Nederland, New York Branch, 24//Park Avenue, New York, New York 10067, Attention: Credit Department, in amount equal to .30% of the unpaid scheduled components of Base Rental Payments outstanding with respect to the Lease Agreement. Such fee shall be due and payable in quarterly installments in arrears on the first Business Day of each January, April, July and October, commencing July 1994, so long as the Letter of Credit was in effect for any or all of the preceding quarter and on the Credit Termination Date (as defined in the Letter of Credit), and shall be calcuhted by averaging the amount of unpaid scheduled components of Base Rental Payments outstanding on each day during the preceding quarter. In the event that any such payment is not received by the Bank when due and payable, it shall accrue interest at the Bank Rate until received by the Bank.