Stradling
Draft of 2/9/2026
4929-5435-0221v3/022217-0004
INSTALLMENT SALE AGREEMENT
by and between the
CITY OF BARSTOW,
as Purchaser
and the
PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA,
as Seller
for the
CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE
CERTIFICATES OF PARTICIPATION, SERIES 2026
Dated as of May 1, 2026
TABLE OF CONTENTS
Page
i
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions.............................................................................................................. 1 Section 1.02 Terms defined in the Trust Agreement ................................................................... 6
ARTICLE II
THE PROJECT
Section 2.01 Design, Acquisition, Construction and Sale of the Projects................................... 6
ARTICLE III
2026 INSTALLMENT SALE PAYMENTS; ADMINISTRATION FEE
Section 3.01 Purchase Price and Administration Fee.................................................................. 7 Section 3.02 Payment of 2026 Installment Sale Payments and Administration Fee ................... 7 Section 3.03 Prepayment of 2026 Installment Sale Payments .................................................. 10
ARTICLE IV
ADDITIONAL CONTRACTS
Section 4.01 Additional Contracts............................................................................................. 11
ARTICLE V
REPRESENTATIONS AND COVENANTS OF THE CITY AND THE CORPORATION Section 5.01 Authority; Compliance with Installment Sale Agreement and Trust Agreement ............................................................................................................ 11 Section 5.02 Use of Proceeds of Certificates ............................................................................ 12 Section 5.03 Against Encumbrances......................................................................................... 12 Section 5.04 Maintenance of Measure I Revenues ................................................................... 13 Section 5.05 Tax Covenants...................................................................................................... 13 Section 5.06 Prompt Acquisition and Construction of the Projects .......................................... 14 Section 5.07 Accounting Records and Financial Statements.................................................... 14 Section 5.08 Protection of Security and Rights of the Corporation and the Trustee................. 14 Section 5.09 Further Assurances............................................................................................... 14 Section 5.10 Continuing Disclosure .......................................................................................... 14
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.01 Events of Default and Acceleration of Principal .................................................. 15 Section 6.02 Application of Measure I Receipts Upon Acceleration ........................................ 16 Section 6.03 Other Remedies.................................................................................................... 16 Section 6.04 Non-Waiver .......................................................................................................... 16 Section 6.05 Remedies Not Exclusive....................................................................................... 17
TABLE OF CONTENTS
(Continued)
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ARTICLE VII
DISCHARGE OF OBLIGATIONS
Section 7.01 Discharge of Obligations...................................................................................... 17
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Liability of City Limited to Measure I Receipts .................................................. 18 Section 8.02 Benefits of Installment Sale Agreement............................................................... 18 Section 8.03 Successor Is Deemed Included in all References to Predecessor......................... 18 Section 8.04 Waiver of Personal Liability................................................................................. 18 Section 8.05 Article and Section Headings, Gender and References........................................ 18 Section 8.06 Partial Invalidity ................................................................................................... 19 Section 8.07 Assignment........................................................................................................... 19 Section 8.08 Net Contract.......................................................................................................... 19 Section 8.09 California Law...................................................................................................... 19 Section 8.10 Indemnification..................................................................................................... 19 Section 8.11 Funds.................................................................................................................... 19 Section 8.12 Notices.................................................................................................................. 20 Section 8.13 [Notices to Insurer; Miscellaneous Insurer Provisions......................................... 20 Section 8.14 Agreement Represents Complete Agreement; Amendments................................ 21 Section 8.15 Effective Date....................................................................................................... 21 Section 8.16 Electronic Signatures............................................................................................ 21 Section 8.17 Execution in Counterparts.................................................................................... 21 EXHIBIT A – INSTALLMENT SALE PAYMENTS SCHEDULE..................................................A-1 EXHIBIT B – DESCRIPTION OF PROJECT..................................................................................B-1 4929-5435-0221v3/022217-0004
INSTALLMENT SALE AGREEMENT
This INSTALLMENT SALE AGREEMENT (the “Installment Sale Agreement”), dated as of May 1, 2026, by and between the CITY OF BARSTOW, a municipal corporation organized and existing under the Constitution of the State of California (the “City”), and the PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California (the “Corporation”), W I T N E S S E T H:
WHEREAS, the City has determined that the design, acquisition, installation, and construction of certain public capital improvements located in various sites in the City, including the projects described in Exhibit B attached hereto (collectively, the “Projects”) is necessary and proper for City purposes and uses, and under the terms of applicable law, the payment for such Projects may be made from Measure I Receipts, as hereinafter defined, and is for the common benefit of the City as a whole; WHEREAS, the Corporation has agreed to assist the City to finance the Projects; WHEREAS, the City has determined to make the 2026 Installment Sale Payments as hereinafter described to the Corporation for the repayment of the costs of the design, acquisition and construction of the Projects and the incidental costs and expenses related thereto paid by the Corporation; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Sale Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Sale Agreement;
WHEREAS, as security for the Certificates, pursuant to the Trust Agreement, the Corporation has assigned the rights to receive all 2026 Installment Sale Payments, and the Corporation and the City have granted a security interest in all moneys held by the Trustee under the Trust Agreement to the Trustee for the benefit of the Owners of Certificates and any Additional Certificates executed and delivered under this Trust Agreement; and
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any opinion or report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein:
“Accountant’s Report” means a report signed by an Independent Certified Public Accountant. 2 4929-5435-0221v3/022217-0004
“Acquisition Fund” means the fund by that name established pursuant to Section 2.11 of the Trust Agreement.
“Administration Fee” means an amount equal to the sum of the Trustee’s fees, the Rebate Analyst fees and any other similar fee payable in connection with the administration of this Installment Sale Agreement and the Trust Agreement, payable on the 15th day of the month preceding each Interest Payment Date.
“Authorized City Representative” means the Mayor of the City, the Mayor Pro Tem of the City, the City Manager of the City, the Finance Director of the City or the City Clerk of the City, or any other person at the time designated to act on behalf of such City by written certificate furnished to the Trustee, containing the specimen signature of such person and signed on behalf of such City by an Authorized City Representative.
“Authorized Corporation Representative” means the Chairman, Treasurer and Secretary of the Corporation, or any other person authorized by the Board of Directors of the Corporation to act on behalf of the Corporation under or with respect to this Installment Sale Agreement. “Business Day” means any day of the year, other than (i) a Saturday, (ii) a Sunday, (iii) a day on which banks located in the city in which either the designated corporate trust office of the Trustee is located is required or authorized by law to be closed, or (iv) a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is not operational. “Certificates” means the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026, issued in accordance with the Trust Agreement. “City” means the City of Barstow, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means May ___, 2026.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Closing Date, executed by the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Contracts” means this Installment Sale Agreement and all other installment sale contracts, capital leases or similar obligations of the City authorized and executed by the City under and pursuant to applicable law, the interest and principal and prepayment premium, if any, payments under and pursuant to which are payable from Measure I Receipts on a parity with the payment of the 2026 Installment Sale Payments.
“Corporation” means the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California, and its successors and assigns as provided in this Trust Agreement. “Debt Service” means, for any Fiscal Year, the sum of that portion of the Installment Sale Payments required to be made at the times provided in the Contracts that would have accrued during 3 4929-5435-0221v3/022217-0004
such Fiscal Year if such Installment Sale Payments were deemed to accrue daily in equal amounts from, in each case, the next preceding Installment Sale Payment Date of interest or principal or the date of the pertinent Contract, as the case may be; provided, that (a) if any of the Installment Sale Payments due under any such Contracts bear interest payable pursuant to a variable interest rate formula, the interest rate on such Contracts for periods when the actual interest rate cannot yet be determined, shall be assumed to be equal to the greater of (i) the actual rate on the date of calculation, or if such Contracts are not yet outstanding, the initial rate (if then established and binding), (ii) if the Contracts have been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii)(1) if interest on such Contracts is excludable from gross income under the applicable provisions of the Code, the most recently published “Bond Buyer 25 Bond Revenue Index” (or comparable index if no longer published), or (2) if interest is not so excludable, the interest rate on direct U.S. Treasury obligations with comparable maturities; (b) if any of the Contracts is secured by an irrevocable letter of credit issued by a bank having a combined capital and surplus of at least $75,000,000, the principal payments or deposits with respect to such Contracts nominally due in the last Fiscal Year in which such Contracts mature may, at the option of the City, be treated as if they were due as specified in any loan agreement or reimbursement agreement issued in connection with such letter of credit or pursuant to the prepayment provisions of such letter of credit and interest on such Contracts after such Fiscal Year shall be assumed to be payable pursuant to the terms of such loan agreement or reimbursement agreement or prepayment provisions and (c) if any of such Contracts is not secured by a letter of credit as described in clause (b) of this definition and 20% or more of the original principal of the Installment Sale Payments due under such Contracts is not due until the final stated maturity of the Installment Sale Payments due under such Contracts, such principal may, at the option of the City, be treated as if it were due based upon a level amortization of such principal over the term of such Installment Sale Payments or 30 years, whichever is greater. “Event of Default” means an event described in Section 6.01. “Federal Securities” means United States of America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the full faith and credit of the United States of America are pledged for the payment of interest and principal and interest strips of the Resolution Funding Corporation for which separation of principal and interest is maintained in book-entry form. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other annual accounting period hereafter selected and designated by the City Council of the City as the Fiscal Year of the City. “Independent Certified Public Accountant” means any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State or a comparable successor, appointed and paid by the City, and who, or each of whom:
(1) is in fact independent according to the Statement of Auditing Standards No. 1 and not under the domination of the City;
(2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as a member, officer or employee of the City, but who may be regularly retained to audit the accounting records of and make reports thereon to the City. 4 4929-5435-0221v3/022217-0004
“Insolvency Proceeding” has the meaning set forth in the Trust Agreement “Installment Sale Agreement” and “Agreement” means this installment sale agreement by and between the City and the Corporation, dated as of May 1, 2026, as originally executed and as it may from time to time be amended or supplemented in accordance herewith and with the terms of the Trust Agreement.
“Installment Sale Payments” means the installment sale, rental or other periodic payments scheduled to be paid by the City under and pursuant to the Contracts. “Installment Sale Payment Date” means, (i) any date on which Installment Sale Payments are scheduled to be paid by the City under and pursuant to any Contract, and (ii) each 2026 Installment Sale Payment Date.
[“Insurance Policy” means the Municipal Bond Insurance Policy issued by the Insurer, dated ______, 2026.
“Insured Certificates” means the Certificates maturing on June 1 of the years 20__ through 20__, inclusive, the scheduled payment of principal of and interest on the which, when due, will be guaranteed under the Insurance Policy.
“Insurer” means ____________ insurance company, or any successor thereto or assignee thereof.]
“Interest Payment Date” means a date on which interest represented and evidenced by the Certificates is due and payable, being June 1 and December 1 of each year, commencing [December 1, 2026].
“Late Payment Rate” has the meaning set forth in the Trust Agreement. “Maximum Annual Debt Service” means, as of any date of calculation, the greatest total Debt Service payable in any Fiscal Year during the period commencing with the then current Fiscal Year and terminating with the latest Fiscal Year in which payments are due under any Contract. “Measure I Ordinance” means Ordinance No. 04-01, titled, “An Ordinance Providing for the Continuation of a One-Half of One Percent Retail Transaction and Use by the San Bernardino County Transportation Authority for Local Transportation Purposes and the Transportation Expenditure Plan” passed on June 2, 2004 including any extensions of the transportation transaction and use tax previously extended by Ordinance No. 04-01.
“Measure I Project” means a capital project for which Measure I Receipts may be expended pursuant to the Measure I Ordinance and the Transportation Expenditure Plan attached thereto as originally adopted or amended, including the related Administration Fee. “Measure I Receipts” means Measure I Revenues allocated by the San Bernardino County Transportation Authority to the City as the City’s share of local program funding pursuant to the Transportation Expenditure Plan attached to the Measure I Ordinance. “Measure I Receipts Fund” means the fund by that name established as provided in Section 3.02 hereof.
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“Measure I Revenues” means revenues of the San Bernardino County Transportation Authority pursuant to the Measure I Ordinance derived from a retail transactions and use tax imposed in the County of San Bernardino pursuant to Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code of the State of California and Section 180050 et seq. of the Public Utilities Code of the State of California, as now in effect and as it may from time to time hereafter be amended or supplemented. Collection of the Measure I Revenues commenced on April 1, 1990 and by terms of the Measure I Ordinance will terminate on March 31, 2040 including any extensions of the transportation transaction and use tax previously extended by Ordinance No. 04-01. “Opinion of Counsel” means a written opinion of counsel of national reputation generally recognized to be well qualified in the field of law relating to municipal obligations such as the Certificates, retained by the City and satisfactory to the Trustee (who shall be under no liability by reason of such approval).
“Other Available Revenues” means revenues, other than Measure I Receipts as herein defined, legally available to the City to make 2026 Installment Sale Payments, if any. [“Policy Costs” has the meaning set forth in the Trust Agreement.] “Project” or “Projects” means, as the context suggests, the design, acquisition, installation, and construction of one or more of the public capital improvements located in various sites in the City and financed with proceeds of the Certificates, all as described more particularly in Exhibit B, attached hereto and incorporated herein.
“Purchase Price” means the total of all 2026 Installment Sale Payments owed by the City to the Corporation under the conditions and terms hereof for the costs of the design, acquisition and construction of the Projects and the incidental costs and expenses related thereto paid by the Corporation (including amounts owed to the Insurer in connection with the Insurance Policy and the Reserve Policy).
“Rebate Amount” means, for any given period, the amount determined by the Rebate Analyst as required to be rebated or paid as a yield reduction payment to the United States of America with respect to the Certificates.
“Rebate Analyst” means that firm or individual designated by the City to satisfy its obligation to perform the rebate calculations that may be required to be made from time to time with respect to the Certificates.
“Rebate Fund” means the fund by that name established in Section 4.06 of the Trust Agreement.
“Reserve Account” means the account by that name established pursuant to Section 3.03 of the Trust Agreement.
“Reserve Account Requirement” means, as of any date of calculation, an amount equal to the least of (i) 10% of the initial stated principal amount (within the meaning of Section 148 of the Code) represented and evidenced by the Certificates; (ii) 125% of the average annual Debt Service (as defined in this Agreement) represented and evidenced by the Certificates, or (iii) the Maximum Annual Debt Service, as defined in this Agreement.
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[“Reserve Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the Insurer, dated _____, 2026, and credited to the Reserve Account.] “2026 Installment Sale Payment Date” means the periodic payment dates upon which the 2026 Installment Sale Payments are required to be deposited with the Trustee as provided in Section 3.02 of this Agreement.
“2026 Installment Sale Payments” means the periodic payments scheduled to be paid by the City under and pursuant to this Installment Sale Agreement. “Tax Certificate” means the Tax Certificate dated the Closing Date and executed and delivered by the City.
“Trust Agreement” means that certain Trust Agreement dated as of May 1, 2026, by and among the Corporation, the Trustee and the City, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, acting in its capacity as trustee under and pursuant to the Trust Agreement, and its successors and assigns as provided in the Trust Agreement.
Section 1.02 Terms defined in the Trust Agreement. Capitalized terms not otherwise defined herein have the meanings set forth in the Trust Agreement.
ARTICLE II
THE PROJECT
Section 2.01 Design, Acquisition, Construction and Sale of the Projects. The Corporation hereby agrees to cause the design, acquisition and construction of the Projects for, and to sell the Projects to, the City; and the City agrees to transfer whatever real or personal property interest it may possess which may be required in order for the Corporation to cause such design, acquisition and construction of the Projects. In order to implement this provision, the Corporation hereby appoints the City as its agent for the purpose of such design, acquisition and construction, and the City hereby agrees to enter into such engineering, design and construction contracts and purchase orders as may be necessary, as agent for the Corporation, to provide for the complete design, acquisition and construction of the Projects. The City hereby agrees that as such agent it will cause the acquisition and construction of the Projects to be diligently completed after the deposit of funds in the Acquisition Fund for such purpose pursuant to Section 2.11 of the Trust Agreement, and that it will use its best efforts to cause the design, acquisition and construction of the Projects to be completed by [May __, 2029] [three years from Closing Date]. The Corporation hereby agrees to sell, and hereby sells, the Projects to the City. The City hereby agrees to purchase, and hereby purchases, the Projects from the Corporation. Notwithstanding the foregoing, it is hereby expressly understood and agreed that the Corporation shall be under no liability of any kind or character whatsoever for the payment of any costs or expenses incurred by the City (whether as agent for the Corporation or otherwise) for the acquisition and construction of the Projects and that all such costs and expenses shall be paid by the City, regardless of whether the funds deposited in the Acquisition Fund are sufficient to cover all such costs.
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ARTICLE III
2026 INSTALLMENT SALE PAYMENTS; ADMINISTRATION FEE
Section 3.01 Purchase Price and Administration Fee.
(a) The Purchase Price to be paid by the City to the Corporation hereunder is the sum of the principal amount of the City’s obligation hereunder plus the interest to accrue on the unpaid balance of such principal amount from the date hereof over the term hereof, subject to prepayment as provided in Section 3.03.
(b) The principal amount of the Purchase Price to be paid by the City to the Corporation hereunder is $_______.
(c) The interest to accrue on the unpaid balance of such principal amount shall be paid by the City as and shall constitute interest paid on the principal amount of the City’s Purchase Price obligation hereunder.
(d) Interest on the unpaid balance of the principal amount of the Purchase Price shall accrue, from the date of the initial execution and delivery of the Certificates, on the principal of each 2026 Installment Sale Payment at the following rates calculated on the basis of a 360-day year comprised of twelve 30-day months:
Principal Payment
Due Date (June 1)
Principal
Amount
Interest
Rate
2027 $ %
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
(e) In addition, the City shall pay the Administration Fee for the administrative cost of the Projects and the financing.
Section 3.02 Payment of 2026 Installment Sale Payments and Administration Fee. The City shall, subject to prepayment as provided in Section 3.03, pay the Corporation or the Trustee, as appropriate, the Purchase Price, without offset or deduction of any kind, by paying (i) the principal installments of the 2026 Installment Sale Payments, which principal installments shall be due annually each on its payment date, (ii) the interest installments of the 2026 Installment Sale Payments, which interest installments shall be due semiannually on each 2026 Installment Sale Payment Date and 8 4929-5435-0221v3/022217-0004
(iii) the Administration Fee which shall be due semiannually on each 2026 Installment Sale Payment Date. The 2026 Installment Sale Payments Schedule is set forth in Exhibit A attached hereto. Each 2026 Installment Sale Payment and the Administration Fee shall be payable on and shall be required to be deposited with the Trustee on or before the fifteenth day of the calendar month immediately preceding June 1 and December 1 of each year, commencing [December 1, 2026.] The obligation of the City to pay the Purchase Price by paying the 2026 Installment Sale Payments and the Administration Fee is, subject to Section 8.01, absolute and unconditional, and until such time as the 2026 Installment Sale Payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Section 7.01), the City will not discontinue or suspend any 2026 Installment Sale Payments or Administration Fee required to be paid by it under this Section when due, whether or not the Projects or any part thereof is complete, or its use is suspended, interfered with, reduced, curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party to any agreement for any cause whatsoever. [The City shall pay or reimburse the Insurer, from Measure I Receipts or Other Available Revenues, any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in the Trust Agreement or this Installment Sale Agreement (each a “Related Document”); (ii) the pursuit of any remedies under the any Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to any Related Document whether or not executed or completed, or (iv) any litigation, proceeding (including an Insolvency Proceeding) or other dispute in connection with any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of any Related Document. Amounts payable hereunder shall bear interest at the Late Payment Rate (related to the Insurance Policy) from the date such amount is paid or incurred by the Insurer until the date the Insurer is paid in full. The obligation to reimburse the Insurer shall survive discharge or termination of the Related Documents.] The City has established the “Measure I Receipts Fund,” which the City agrees and covenants to maintain in accordance with the Measure I Ordinance and this Installment Sale Agreement so long as any 2026 Installment Sale Payments remain unpaid, and all money on deposit therein shall be applied and used only as provided herein including, without limitation, to pay the Purchase Price by paying the 2026 Installment Sale Payments and the Administration Fee. The City agrees and covenants that all Measure I Revenues received by it shall be deposited when and as received in the Measure I Receipts Fund and held therein in trust and applied in accordance with this Agreement for the benefit of the Trustee (as assignee of the rights of the Corporation hereunder), the Insurer and the Bond Owners, and for the benefit of the owners of any Contracts.
The City covenants and agrees to apply Measure I Revenues as received to the payment of 2026 Installment Sale Payments prior to any other expenditure of such funds, subject to the release for expenditure as provided in this section below, and only in an amount not exceeding the Measure I Receipts.
[The City covenants and agrees to include all Insurer Reimbursement Amounts (as more fully described in the Trust Agreement), amounts due to the Insurer pursuant to the third full paragraph under this Section 3.02 and Policy Costs (as more fully described in the Trust Agreement and the Insurance 9 4929-5435-0221v3/022217-0004
Agreement) in its calculation of 2026 Installment Sale Payments and shall pay all such payments from the Measure I Receipts.]
All of the Measure I Receipts and all money in the Measure I Receipts Fund, and in the funds or accounts so specified and provided for in this Installment Sale Agreement, are hereby irrevocably pledged to the punctual payment of the Installment Sale Payments (including 2026 Installment Sale Payments) and the Administration Fee, and the Measure I Receipts shall not be used for any other purpose while any of the 2026 Installment Sale Payments remain outstanding; subject to the provisions of this Installment Sale Agreement permitting application thereof as set forth below and for the purposes and on the terms and conditions set forth herein. This pledge shall constitute a first lien on the Measure I Receipts for the payment of the Installment Sale Payments (including 2026 Installment Sale Payments) and the Administration Fee in accordance with the terms hereof.
Notwithstanding the foregoing, the City may satisfy its obligation to deposit 2026 Installment Sale Payments with the Trustee by depositing Other Available Revenues with the Trustee, and if and when so deposited such Other Available Revenues, shall be irrevocably pledged to the payment of 2026 Installment Sale Payments.
All Measure I Receipts on deposit in the Measure I Receipts Fund shall be transferred to the Trustee and otherwise applied at the following times in the following order of priority, and all moneys in each of such funds shall be held in trust and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section:
(a) Interest and Principal Account Deposits. On or before the 15th day preceding each Interest Payment Date, the City shall, from the Measure I Receipts in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Interest Account within the Revenue Fund established under the Trust Agreement, a sum equal to the interest becoming due and payable hereunder on the next succeeding Interest Payment Date, except that no such deposit need be made if the Trustee then holds money in the Interest Account equal to the amount of interest becoming due and payable hereunder on the next succeeding Interest Payment Date; and on or before the 15th day preceding each Interest Payment Date, the City shall, from the Measure I Receipts in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Principal Account within the Revenue Fund established under the Trust Agreement, a sum equal to the principal becoming due and payable hereunder on the next succeeding Interest Payment Date, except that no such deposit need be made if the Trustee then holds money in the Principal Account equal to the amount of Principal becoming due and payable hereunder on the next succeeding Interest Payment Date; and all money on deposit in the Interest Account and the Principal Account shall be used to make and satisfy the 2026 Installment Sale Payments due on each date and such payments shall be deposited by the Trustee to the Interest Account or the Principal Account, as the case may be, as defined in, created under and in accordance with the terms of, the Trust Agreement. The City shall also, from the moneys in the Measure I Receipts Fund, transfer to the applicable trustee for deposit in the applicable payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Debt Service in accordance with the provisions of the Contract, bond, resolution or indenture relating thereto.
(b) Reserve Account Deposit. On or before the 15th day of each month, the City shall, from remaining moneys in the Measure I Receipts Fund, thereafter, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to (a) the Trustee for deposit in the Reserve Account that sum, if any, necessary to 10 4929-5435-0221v3/022217-0004
restore the Reserve Account to an amount equal to the Reserve Account Requirement, all in accordance with and subject to the terms and conditions of Section 3.03 of the Trust Agreement, and (b) the applicable trustee for deposit to reserve funds or accounts established in connection with Contracts an amount that is equal to the amount required to be deposited therein. [The City further agrees to pay to the Insurer all amounts owed to it pursuant to Section 3.05 of the Trust Agreement in connection with any draw on the Reserve Policy, and all related reasonable expenses incurred by the Insurer and shall pay interest thereon from the date of payment by the Insurer at the Late Payment Rate, in each case solely from available Measure I Receipts and subject to the first pledge of and lien upon the Measure I Receipts for the payment of the 2026 Installment Sale Payments.] [Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy.
If the City shall fail to pay any Policy Costs in accordance with the requirements above, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Trust Agreement and this Installment Sale Agreement other than (i) acceleration of the maturity of the Certificates or (ii) remedies which would adversely affect owners of the Certificates.
Neither the Trust Agreement nor this Installment Sale Agreement shall be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The City’s obligation to pay such amounts shall expressly survive payment in full of the Certificates.] (c) Administration Account Deposit. On or before the 15th day preceding each Interest Payment Date, the City shall, from the remaining Measure I Receipts on deposit in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Administration Account a sum equal to the Administration Fee, as determined in a Request of the City to be provided to the Trustee, becoming due and payable hereunder on the next Interest Payment Date, and all money on deposit in the Administration Account shall be used to pay the Administration Fee due on such Interest Payment Date, in accordance with the terms of the Trust Agreement.
At any time that Measure I Receipts remain in the Measure I Receipts Fund after providing (or otherwise reserving) for (i) all deposits required by subsection (a) (for that year ending June 1), subsection (b), and subsection (c) above, (ii) debt service on any Contracts (for that year ending June 1), and except as may be provided to the contrary in any Contracts, and (iii) amounts then owed to the Insurer in connection with any draw on the Reserve Policy, and so long as the City is not in default hereunder or thereunder, then any amount remaining on deposit in the Measure I Receipts Fund shall be released from the pledge and lien hereunder and shall be applied by the City in accordance with the Measure I Ordinance.
Section 3.03 Prepayment of 2026 Installment Sale Payments. The City may prepay from any source of available funds as a whole or in part on any date, on or after June 1, 20__, all or any part 11 4929-5435-0221v3/022217-0004
of the principal amount of the unpaid 2026 Installment Sale Payments becoming due on or after June 1, 20__, in such order of prepayment as the City may determine upon written direction to the Corporation and the Trustee (or, if the City fails to designate the order of prepayment, on a proportionate basis as determined by the City among the 2026 Installment Sale Payments and by lot within a 2026 Installment Sale Payment Date), at a prepayment price equal to the principal amount prepaid and Certificates to be prepaid, plus accrued interest to the date of prepayment. Before making any prepayment pursuant to this section, the City shall give written notice to the Corporation and the Trustee describing such event and specifying the date on which the prepayment will be paid and the order thereof, which date shall be not less than thirty (30) days nor more than sixty (60) days from the date such notice is given.
ARTICLE IV
ADDITIONAL CONTRACTS
Section 4.01 Additional Contracts. So long as the City is not in default hereunder, the City may at any time execute any Contract or amend any Contract, the Installment Sale Payments under and pursuant to which, as the case may be, are payable from, and secured by a pledge and lien on, the Measure I Receipts on a parity with the payment by the City of the 2026 Installment Sale Payments as provided herein; provided, that the [lesser of (i)] audited Measure I Receipts for the Fiscal Year next preceding the date of the adoption by the City Council of the City of the resolution authorizing the execution of such Contract and [(ii) San Bernardino County Transportation Authority estimates (if prepared and made available to the City) of the City’s share of Measure I Revenues for the current Fiscal Year,] shall have produced a sum equal to at least [150%] of the Maximum Annual Debt Service on all Contracts outstanding after the execution of such amendment or Contract as calculated in writing by the City and a third-party financial consultant to the City. Notwithstanding the foregoing provisions, there shall be no limitations on the ability of the City to execute any Contract at any time to refund any outstanding Contract where such refunding results in a reduction in annual payment on such Contract.
Policy Costs due and owing to the Insurer, and similar costs due and owing to any other provider of a municipal bond insurance policy or debt service reserve insurance policy or surety with respect to all Contracts outstanding and to be outstanding after the execution of such amendment or Contract, shall be included in the Maximum Annual Debt Service requirement for purposes of the foregoing calculation and the calculation of Maintenance of Revenues in Section 5.04 herein.
Notwithstanding the foregoing provisions, there shall be no limitations on the ability of the City to execute any Contract at any time to refund any outstanding Contract.
The City covenants not to request the San Bernardino County Transportation Authority to issue obligations on its behalf payable from Measure I Revenues as provided in the Measure I Ordinance.
ARTICLE V
REPRESENTATIONS AND COVENANTS OF THE CITY AND THE CORPORATION Section 5.01 Authority; Compliance with Installment Sale Agreement and Trust Agreement. The City is a municipal corporation organized and existing under the Constitution of the State of California, with full legal right, power and authority to execute, deliver and perform its obligations under this Installment Sale Agreement, and compliance with the provision hereof will not materially conflict with or constitute a material breach of or default under any applicable provision of law, or any applicable regulation or agreement to which the City is a party or may be subject. 12 4929-5435-0221v3/022217-0004
The City will punctually pay the 2026 Installment Sale Payments in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, and will not terminate this Installment Sale Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Projects, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of California or any political subdivision of either or any failure of the Corporation to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force majeure, including Acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lockouts, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities.
The Corporation will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Trust Agreement required to be observed and performed by it, and it is expressly understood and agreed by and among the parties to this Installment Sale Agreement and the Trust Agreement that each of the agreements, conditions, covenants and terms contained in each such agreement is an essential and material term of the obligation of the City to repay the costs of the acquisition and construction of the Projects and the costs and expenses incidental thereto paid by the Corporation pursuant to, and in accordance with, and as authorized under law and this Installment Sale Agreement.
Section 5.02 Use of Proceeds of Certificates. The Corporation and the City agree that the proceeds of the Certificates deposited in the Acquisition Fund will be used by the City, as agent for the Corporation, to pay the costs of the acquisition and construction of the Projects and to pay the incidental costs and expenses related thereto as provided herein and in the Trust Agreement.
Section 5.03 Against Encumbrances. The City will pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor, services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for the City payable from the Measure I Receipts or which may impair the security for the 2026 Installment Sale Payments and will keep the Measure I Receipts free of any and all liens against any portion of the Measure I Receipts. In the event any such lien attaches to or is filed against any portion of the Measure I Receipts, the City will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that if the City desires to contest any such lien it may do so. If any such lien shall be reduced to final judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City will forthwith pay or cause to be paid and discharged such judgment. The City will, to the maximum extent permitted by law, indemnify and hold the Corporation and the Trustee harmless from, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorneys’ fees) as a result of any such lien or claim of lien against any portion of the Measure I Receipts.
The City may pledge, encumber or otherwise secure its obligations with the Measure I Receipts, provided, that except as permitted by Section 4.01 hereof, in all instances any such pledge, lien or security is wholly subordinate and junior to the obligations of the City contained herein. 13 4929-5435-0221v3/022217-0004
Section 5.04 Maintenance of Measure I Revenues. The City will use its best efforts to comply with all provisions of law and any regulations issued thereunder relating to the Measure I Revenues, including, but not limited to, the Measure I Ordinance, any applicable congestion management plans relating to the City and the California Environmental Quality Act (CEQA) relating to the Projects, and will take any and all reasonable actions required in order to maintain the City’s ability to receive the Measure I Revenues and apply the same as provided herein; provided, that nothing herein shall require the City to take any action or expend any City funds to comply with any such requirements deemed unreasonable in the sole discretion of the City, so long as failure to take such action or expend such funds will not cause the amount of estimated Measure I Revenues to be received by the City in the next Fiscal Year to be less than [150%] of Maximum Annual Debt Service. The City’s receipt of 2026 Installment Sale Payments is subordinate to certain obligations of the San Bernardino County Transportation Authority as provided in the Measure I Ordinance.
Section 5.05 Tax Covenants. Notwithstanding any other provision of the Indenture or the Installment Purchase Agreement, absent an opinion of Bond Counsel that the exclusion from gross income of the interest on the Certificates will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code that are necessary to preserve such exclusion from gross income with respect to the Certificates and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The City will take no action and refrain from taking any action, and the Corporation will make no use of the proceeds of the Certificates or of any other moneys or property, which would cause the Certificates to be “private activity Certificates” within the meaning of Section 141 of the Code;
(2) Arbitrage. The City will make no use of the proceeds of the Certificates or of any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, which will cause the Certificates to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(3) Federal Guarantee. The City will make no use of the proceeds of the Certificates, and the City will not take or omit to take any action, that would cause the Certificates to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (4) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code which is necessary to preserve the exclusion of interest on the Certificates pursuant to Section 103(a) of the Code; (5) Hedge Bonds. The City will make no use of the proceeds of the Certificates or any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, that would cause the Certificates to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City takes all necessary actions to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest represented and evidenced by the Certificates for federal income tax purposes; and (5) Miscellaneous. The City will not take any action or refrain from taking any action which is inconsistent with its expectations stated in the Tax Certificate executed by the City in connection with the execution and delivery of the Certificates and will comply with the covenants and requirements that are stated therein and incorporated by reference herein. 14 4929-5435-0221v3/022217-0004
This Section and the covenants that are set forth herein shall not be applicable to, and nothing that is contained herein shall be deemed to prevent the City from providing for or causing the issuance of revenue bonds or issuing bonds or executing and delivering contracts that are payable on a parity with the 2026 Installment Sale Payments, the interest with respect to which has been determined to be subject to federal income taxation.
Section 5.06 Prompt Acquisition and Construction of the Projects. The City will take all necessary and appropriate steps to acquire and construct the Projects, as agent of the Corporation, with all practicable dispatch and in an expeditious manner and in conformity with law so as to complete the same as soon as possible.
Section 5.07 Accounting Records and Financial Statements. (a) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Measure I Receipts and the Projects, which records shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions.
(b) The City will prepare annually within six months after the close of each Fiscal Year or, if not then available, as soon thereafter as possible, audited financial statements of the City for the preceding Fiscal Year. The Trustee shall have no responsibility to review any such accounting records or audited financial statements.
Section 5.08 Protection of Security and Rights of the Corporation and the Trustee. The City will preserve and protect the security hereof and the rights of the Corporation, the Insurer and the Trustee to the 2026 Installment Sale Payments hereunder and will warrant and defend such rights against all claims and demands of all persons.
Section 5.09 Further Assurances. The City will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Corporation of the rights and benefits provided to it herein.
Section 5.10 Continuing Disclosure. The City hereby covenants and agrees that it will enter into and comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Installment Sale Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default hereunder; however, the Trustee shall at the written request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Owner of at least 25% aggregate principal amount of Outstanding Certificates, or any Owner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section. For purposes of this Section, “Beneficial Owner” means any person which has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Certificates (including persons holding Certificates through nominees, depositories or other intermediaries).
When the Trustee incurs expenses or renders services pursuant to this Section, the Trustee shall be entitled to reasonable compensation for such expenses and services rendered. 15 4929-5435-0221v3/022217-0004
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.01 Events of Default and Acceleration of Principal. If one or more of the following “Events of Default” shall happen, that is to say -- (1) if default shall be made in the due and punctual payment of any 2026 Installment Sale Payment or any Contract when and as the same shall become due and payable; (2) if default shall be made by the City in the performance of any of the agreements or covenants contained herein required to be performed by it, and such default shall have continued for a period of 30 days after the City shall have been given notice in writing of such default by the Corporation or the Trustee;
(3) if the City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if under the provisions of any other law for the relief or aid of debtors any court of competent jurisdiction shall assume custody or control of the City or of the whole or any substantial part of its property; or (4) if payment of the principal of any Contract is accelerated in accordance with its terms; then and in each and every such case during the continuance of such Event of Default specified in clause (1) above, the Corporation shall, and for any other such Event of Default the Corporation may (with the prior written consent of the Insurer), by notice in writing to the City and the Insurer, declare the entire principal amount of the unpaid 2026 Installment Sale Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding. This subsection is subject to the condition, however, that if at any time after the entire principal amount of the unpaid 2026 Installment Sale Payments or the unpaid payment of any other Contract referred to in clause (1) above due prior to such declaration and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the money due shall have been obtained or entered the City shall deposit with the Corporation a sum sufficient to pay the unpaid principal amount of the 2026 Installment Sale Payments or the unpaid payment of any other Contract referred to in clause (a) above due and payable prior to such declaration and the accrued interest thereon, with interest on such overdue installments at the rate or rates applicable to such unpaid principal amounts of the 2026 Installment Sale Payments or such Contract if paid in accordance with their terms, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of the entire principal amount of the unpaid 2026 Installment Sale Payments and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Corporation or provision deemed by the Corporation to be adequate shall have been made therefor, then and in every such case the Corporation, by written notice to the City, may rescind and annul such declaration and its consequences; but no such rescission and annulment shall extend to or shall affect any subsequent default or shall impair or exhaust any right or power consequent thereon.
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Section 6.02 Application of Measure I Receipts Upon Acceleration. All Measure I Receipts upon the date of the declaration of acceleration by the Trustee as provided in Section 6.01 and all Measure I Receipts thereafter received shall be applied in the following order -- First, to the payment of the costs and expenses of the Trustee and the Corporation, if any, in carrying out the provisions of this article, including reasonable compensation to its agents, accountants and counsel and including any indemnification expenses; Second, to the payment of the interest then due and payable on the entire principal amount of the unpaid 2026 Installment Sale Payments and Contracts, and, if the amount available shall not be sufficient to pay in full all such interest then due and payable, then to the payment thereof ratably, according to the amounts due thereon without any discrimination or preference; Third, to the payment of the unpaid principal amount of the 2026 Installment Sale Payments and the unpaid principal amount of all Contracts which has become due and payable, whether on the original due date or upon acceleration, with interest on the overdue principal and interest amounts of the unpaid 2026 Installment Sale Payments and such Contracts at the rate or rates of interest then applicable to such 2026 Installment Sale Payments and such Contracts if paid in accordance with their terms, and, if the amount available shall not be sufficient to pay in full all the amounts due with respect to the 2026 Installment Sale Payments and all Contracts on any date, together with such interest, then to the payment thereof ratably, according to the principal amount due on such date, without any discrimination or preference; and
[Fourth, to the payment of amounts due to the Insurer not paid pursuant to Second and Third above.]
Section 6.03 Other Remedies. The Trustee shall have the right -- (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any councilmember, officer or employee thereof, and to compel the City or any such councilmember, officer or employee to perform and carry out its or his duties under law and the agreements and covenants required to be performed by it or him contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Corporation or the Trustee; or
(c) by suit in equity upon the happening of an Event of Default to require the City and its council members, officers and employees to account as the trustee of an express trust.
Section 6.04 Non-Waiver. Nothing in this article or in any other provision hereof shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the 2026 Installment Sale Payments from the Measure I Receipts to the Trustee at the respective due dates or upon prepayment, or shall affect or impair the right of the Trustee, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.
A waiver of any default or breach of duty or contract by the Trustee shall not affect any subsequent default or breach of duty or contract or impair any rights or remedies on any such subsequent default or breach of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or 17 4929-5435-0221v3/022217-0004
remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Trustee, the Corporation and the City and the Trustee shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 6.05 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. The exercise of remedies hereunder shall be subject to the provisions of the Trust Agreement, including Articles VII and IX thereof.
ARTICLE VII
DISCHARGE OF OBLIGATIONS
Section 7.01 Discharge of Obligations.
(a) If the City shall pay or cause to be paid all the 2026 Installment Sale Payments at the times and in the manner provided herein, and all amounts owed the Insurer shall have been paid in full, the right, title and interest of the Corporation herein and the obligations of the City hereunder shall thereupon cease, terminate, become void and be completely discharged and satisfied. (b) Any unpaid principal installment of the 2026 Installment Sale Payments shall on its payment date or date of prepayment be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if the City makes payment of such 2026 Installment Sale Payments and the prepayment premium, if applicable, in the manner provided herein. (c) All or any portion of unpaid principal installments of the 2026 Installment Sale Payments shall, prior to their payment dates or dates of prepayment, be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if (i) notice is provided by the City to the Trustee as required by the Trust Agreement, (ii) there shall have been deposited with the Trustee either money in an amount which shall be sufficient, or Defeasance Obligations (as that term is defined in the Trust Agreement), the interest on and principal of which when paid will provide money which, together with money, if any, deposited with the Trustee, shall be sufficient, in the opinion of an Independent Certified Public Accountant, to pay when due the interest to become due with respect to the principal installments of such 2026 Installment Sale Payments and the principal installments of such 2026 Installment Sale Payments or such portions thereof on and prior to their payment dates or their dates of prepayment, as the case may be, and the prepayment premiums, if any, applicable thereto and (iii) an opinion of nationally recognized bond counsel is filed with the Trustee to the effect that the action taken pursuant to this subsection will not cause the interest evidenced and represented by the Certificates to be includable in gross income under the Code for federal income tax purposes.
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(d) After the payment of all 2026 Installment Sale Payments and prepayment premiums, if any, as provided in this section, and payment of all fees and expenses of the Trustee, the Trustee, upon request of the City, shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and the Corporation and shall execute and deliver to the City and the Corporation all such instruments as may be necessary or desirable to evidence such total discharge and satisfaction of this Installment Sale Agreement, and the Trustee shall pay over and deliver to the City, as an overpayment of 2026 Installment Sale Payments, all such money or investments held by it pursuant hereto other than such money and such investments as are required for the payment or prepayment of the 2026 Installment Sale Payments, which money and investments shall continue to be held uninvested by the Trustee in trust for the payment of the 2026 Installment Sale Payments and shall be applied by the Trustee pursuant to the Trust Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Liability of City Limited to Measure I Receipts. Notwithstanding anything contained herein, the City shall not be required to advance any moneys derived from any source of income other than the Measure I Receipts for the payment of the 2026 Installment Sale Payments or for the performance of any agreements or covenants required to be performed by it contained herein.
The obligation of the City to make the 2026 Installment Sale Payments is a special obligation of the City payable solely from the Measure I Receipts as provided herein, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.
Section 8.02 Benefits of Installment Sale Agreement. Nothing contained herein, expressed or implied, is intended to give to any person other than the Corporation, the City, the Insurer or the Trustee any right, remedy or claim under or pursuant hereto, and any agreement or covenant required herein to be performed by or on behalf of the Corporation, the City or the Trustee shall be for the sole and exclusive benefit of the other parties. The Insurer is a third party beneficiary of this Installment Sale Agreement. [This Installment Sale Agreement shall not be amended, supplemented or modified without the prior written consent of the Insurer.] Section 8.03 Successor Is Deemed Included in all References to Predecessor. Whenever any of the Corporation or the City or the Trustee is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Corporation or the City or the Trustee, and all agreements and covenants required hereby to be performed by or on behalf of the Corporation or the City or the Trustee shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 8.04 Waiver of Personal Liability. No councilmember, officer or employee of the City shall be individually or personally liable for the payment of the 2026 Installment Sale Payments, but nothing contained herein shall relieve any councilmember, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby.
Section 8.05 Article and Section Headings, Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words 19 4929-5435-0221v3/022217-0004
of any gender shall be deemed and construed to include all genders. All references herein to “Articles,” “Sections,” “Exhibits” and other subdivisions or clauses are to the corresponding articles, sections, exhibits, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith” and other words of similar import refer to the Installment Sale Agreement as a whole and not to any particular article, section, exhibit, subdivision or clause hereof.
Section 8.06 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Corporation or the City shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. The Corporation and the City hereby declare that they would have executed this Installment Sale Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 8.07 Assignment. The Installment Sale Agreement and any rights hereunder shall be assigned by the Corporation to the Trustee as provided in the Trust Agreement; to which assignment the City hereby expressly acknowledges and consents. Any other assignment without the consent of the Trustee and the Insurer shall be void.
Section 8.08 Net Contract. The Installment Sale Agreement shall be deemed and construed to be a net contract, and the City shall pay absolutely net during the term hereof the 2026 Installment Sale Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off whatsoever.
Section 8.09 California Law. The Installment Sale Agreement shall be construed and governed in accordance with the laws of the State of California.
Section 8.10 Indemnification. The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Corporation and its directors, officers and employees and the Trustee and its directors, officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof, and expenses in connection therewith, including, without limitation, reasonable counsel fees and expenses, penalties and interest arising out of or as the result of the acquisition, construction, installation and use of the Projects and each portion thereof or any accident in connection with the operation, use, condition or possession of the Projects or any portion thereof resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the City or the Corporation; any claim for patent, trademark or copyright infringement; and any claim arising out of strict liability in tort. The indemnification arising under this Section shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason. The City agrees not to withhold or abate any portion of the payments required pursuant hereto by reason of any defects, malfunctions, breakdowns or infirmities of the Projects. The City and the Corporation mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following either’s learning thereof.
Section 8.11 Funds. Any fund required to be established and maintained herein by the City may be established and maintained in the accounting records of the City either as an account or a fund, 20 4929-5435-0221v3/022217-0004
and may, for the purpose of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to any such fund shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Certificates and the rights of the owners of such Certificates.
Section 8.12 Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Barstow
220 E Mountain View St A
Barstow, CA 92311
Attention: City Manager
If to the Corporation: Public Property Financing Corporation of California 2945 Townsgate Road, Suite 200
Westlake Village, CA 91361
Attention: Bill Morton
If to the Insurer: [TO COME]
Section 8.13 [Notices to Insurer; Miscellaneous Insurer Provisions. The Insurer shall be provided with the following information by the City:
(a) Annual audited financial statements within 180 days after the end of the City’s fiscal year (together with a certification of the City that it is not aware of any default or Event of Default under the Installment Sale Agreement or the Trust Agreement), and the City’s annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time;
(b) Notice of the commencement of any Insolvency Proceeding; (c) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal or interest on the Certificates;
(d) All reports, notices and correspondence to be delivered to Owners under the terms of this Agreement; and
(e) All information furnished pursuant to the Continuing Disclosure Certificate entered into in connection with the Certificates shall also be provided to the Insurer, simultaneously with the furnishing of such information (the provision of which may be by posting with the MSRB). 21 4929-5435-0221v3/022217-0004
The Insurer shall have the right to receive such additional information as it may reasonably request.
The City will permit the Insurer to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the City and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the City on any Business Day upon reasonable prior notice.]
Section 8.14 Agreement Represents Complete Agreement; Amendments. This Installment Sale Agreement (together with the Trust Agreement) represents the entire contract between the parties. This Installment Sale Agreement may not be effectively amended, changed, modified, altered or terminated except by the written agreement of the City and the Corporation, given in accordance with the provisions of the Trust Agreement.
Section 8.15 Effective Date. This Installment Sale Agreement shall become effective upon its execution and delivery, and shall terminate when the Purchase Price shall have been fully paid (or provision for the payment thereof shall have been made pursuant to Article VII).
Section 8.16 Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this Installment Sale Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent (i) that, by signing this Installment Sale Agreement using an electronic signature, it is signing, adopting and accepting this Installment Sale Agreement, and (ii) that signing this Installment Sale Agreement using an electronic signature is the legal equivalent of having placed the undersigned officer’s handwritten signature on this Installment Sale Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Installment Sale Agreement in a usable format.
Section 8.17 Execution in Counterparts. This Installment Sale Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment Sale Agreement by their officers thereunto duly authorized as of the day and year first written above.
CITY OF BARSTOW
By:
City Manager
ATTEST
By: ______________________________
City Clerk
PUBLIC PROPERTY FINANCING
CORPORATION OF CALIFORNIA
By:
Chairman
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EXHIBIT A
2026 SALE PAYMENTS SCHEDULE
2026 Installment
Sale Payment Date*
Interest
Installment
Principal
Installment
Total 2026
Installment Sale
Payments
* Each 2026 Installment Sale Payment shall be payable on and shall be required to be deposited with the Trustee on or before the fifteenth day of the calendar month immediately preceding the respective June 1 and December 1 payment dates as provided in Section 3.02.
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EXHIBIT B
DESCRIPTION OF PROJECTS
FISCAL YEAR 25-26 STREET REHABILITATION PROJECT
Street Rehabilitation Project - Base Bid $ 3,649,866.88 Street Rehabilitation - Alternate #1 - West Section 7 Phase 2 2,849,315.76 Street Rehabilitation - Alternate #2 - West Section 7 Phase 3 2,434,223.13 Street Rehabilitation - Alternate #3 - West Section 7 Phase 4 2,217,744.55 Street Rehabilitation - Alternate #4- Rimrock Road / H to Agarita & Agarita to End 2,714,124.70 Street Rehabilitation - Alternate #5 -Rimrock Road / Agarita to Barstow 1,104,988.70 Street Rehabilitation - Alternate #6 Rimrock Road / Class IV Bike Lane 1,353,523.75 Construction Management Estimate 1,632,378.75
Total Project Cost $ 17,956,166.22
Estimated Co-op Agreement w/San Bern. County Transportation Auth. (SBCTA) (2,001,166.55) Estimated Co-op Agreement w/San Bern. County/Dept. of Public Works (SBCDPW) (897,087.90) Co-op Agreement w/SBCTA (Transportation Development Act (TDA) Funds) (490,000.00) Remaining Amount Due $ 14,567,911.77
The City may add, delete or substitute other improvements for the Projects described above by filing with the Corporation and Trustee a Certificate of the City, provided the project is a Measure I Project.
PED, BICYCLE, AND SAFETY ACTIVE TRANSPORTATION PROGRAM
(ATP)
Project Estimate $ 4,140,000.00
Project Contingency Estimate 207,000.00
Construction Management Estimate 434,700.00
Total Project Cost Estimate $ 4,781,700.00
Active Transportation Program (ATP) Funding (Reimbursable) (4,440,000.00) Remaining Amount Due $ 341,700.00
MAIN STREET & BARSTOW ROAD TRAFFIC SIGNAL UPGRADES
Project Estimate $ 1,086,980.00
Project Contingency Estimate 54,349.00
Construction Management Estimate 128,580.00
Project Management Estimate 17,119.94
Total Project Cost Estimate $ 1,287,028.94
Highway Safety Improvement Program (HSIP) (Reimbursable) (711,524.00) Remaining Amount Due $ 575,504.94
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SAFE ROUTES TO SCHOOL (SRTS) ACTIVE TRANSPORTATION
PROGRAM (ATP)
Project Estimate $ 6,902,000.00
Project Contingency Estimate 345,100.00
Construction Management Estimate 724,710.00
Project Management Estimate 108,706.50
Total Project Cost Estimate $ 8,080,516.50
Active Transportation Program (ATP) Funding (Reimbursable) (6,500,000.00) Remaining Amount Due $ 1,580,516.50
FORT IRWIN ROAD - COUNTY COOPERATIVE AGREEMENT
Project Estimate $ 42,000.00
Total Project Cost Estimate $ 42,000.00
Remaining Amount Due $ 42,000.00
LENWOOD CHANNEL
Project Estimate $ 40,000.00
Total Project Cost Estimate $ 40,000.00
Remaining Amount Due $ 40,000.00
NORTH FIRST AVE. BRIDGE - MOJAVE RIVER & OVERFLOW
Estimated Project Management $ 90,000.00
Total Project Cost Estimate $ 90,000.00
Remaining Amount Due $ 90,000.00
TOTAL FISCAL YEAR 26 CAPITAL IMPROVEMENT PROJECT
SUMMARY
Total Project Cost Estimate (All FY 26 Projects Listed) $ 32,277,411.65 LESS Cooperative Agreement and Reimbursable Funding $ (15,039,778.45) Total Funding Needed to Complete FY 26 Proposed Projects $ 17,237,633.20 FISCAL YEAR 26 PROJECT FUNDING ALLOCATED BY COUNCIL
Measure I $ 1,180,000.00
SB-1 1,219,788.00
Development Impact Fees (Fund 425) 250,201.00
Total FY 26 Budgeted CIP Funding $ 2,649,989.00
Adjusted FY 26 CIP (Total Funding Needed - FY 26 Budgeted Funding) 14,587,644.20 LESS: Council Appropriated Fund Balance (6,205,492.56)
Total FY 26 CIP Funding Required $ 8,382,151.64
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