1993-0601_FOOTHILL/ EASTERN TRANS CORRIDOR AGENCY_Security Agreement(Execution Copy)
SECURITY AGREEIxt+•*3'r
WHEREAS, the Foothill/Eastern Transportation Corridor
Agency ("Agency") and Morgan Guaranty Trust Company of New York
("Bank") are parties to that certain Letter of Credit Agreement
dated as of June 1, 1993 (the "Letter of Credit Agreement"),
whereby Bank has agreed to issue the Letter of Credit for the
account of Agency;
WHEREAS, Bank has agreed to issue the Letter of Credit
on the condition that Agency enters into this Security Agreement -
and grants Bank a security interest the Collateral, as defined
below;
WHEREAS, to the extent not specifically defined or used
herein to the contrary, the capitalized terms herein shall have
the same meaning as utilized in the Letter of Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing and
other good and valuable consideration, Agency hereby represents
and agrees as follows:
1. GRANT OF SECURITY INTEREST. To secure the
Obligations, Agency hereby pledges and assigns to Bank, and
grants and transfers to Bank a security interest in the
Collateral, as defined in Section 2 hereof.
2. THE COLLATERAL. The Collateral shall consist of
all of Agency's right, title and interest now existing or
hereafter arising in and to all accounts, deposit accounts,
accounts receivable, chattel paper, instruments, certificates of
deposit, money, securities, uncertificated securities, documents
and general intangibles (as each of the foregoing terms is
defined in the California Uniform Commercial Code) or other
rights to payment consisting of, relating to or arising from:
(a) all present and future (i) rights to Development Impact Fees,
including proceeds from collection and rights to future
collection of Development Impact Fees, (ii) rights of Agency
under Article IV of the Joint Powers Agreement (collectively,
with the property described in clause (i), "DIF Rights to
Payment") and (iii) rights of Agency to Tolls, including proceeds
from collection and rights to future collection of Tolls under
the Toll Collection and Revenue Management System Agreement
(other than Tolls, as defined in the Indenture, arising from
operation of the Pledged Facilities, as defined in the Indenture)
(collectively with DIF Rights to Payment, "Rights to Payment");
(b) all Pledged Funds, as defined in the Indenture, excluding any
such funds held in the Series 1993 Bonds Interest Account or the
Series 1993 Bonds Principal Account, as each such term is defined
in the Indenture, which are proceeds of a draw by the Trustee on
the Letter of Credit (the "Pledged Funds"); (c) all property now
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expenses incurred by the Collateral Agent and the Lock Box Bank
or their successors in connection with the receipt or collection
of funds or investments by the Collateral Agent or the Lock Box
Bank, including expenses of accounting, correspondence, filing,
recording, record keeping and expenses incidental thereto; (i) to
cause all Pledged Investments and Proceeds to be held by the
Collateral Agent pursuant to the Collateral Agency Agreement -
dated as of the date hereof by and among Agency, Bank and the_
Treasurer of the County of Orange ("Collateral Agency Agreement")
or by the Trustee pursuant to the Indenture, provided that until.
an Event of Default has occurred and the Bank has provided
written notice of such Event of Default to the Collateral Agent7.
or the Trustee, as appropriate, such Collateral may be withdrawn
by the Agency pursuant to the terms of the Collateral Agency
Agreement or the Indenture, as applicable, (j) not to amend or_
modify the Lock Box Agreement (as defined below) or suffer the-
breach by Collateral Agent or the Lock Box Bank of its
obligations under the Collateral Agency Agreement or the LockBox
Agreement, (k) and to comply with all terms of the Collateral_
Agency Agreement and the Lock Box Agreement and (1) to provide-=
any service and do any other acts or things necessary to keep -
Rights to Payment free and clear of all defenses, rights of
offset and counterclaims.
The "Lock Box Agreement" means that certain agreement
relating to lock box services dated as of June 1, 1993 among
Agency, Bank and Bank of America National Trust and Savings
Association ("Lock Box Bank"), the Wholesale Lock Box Service -
Agreement dated as of July 9, 1992, including the attachments
thereto and the Funds Transfer Standing Instructions Agreement
related thereto dated as of June 1, 1993, as each such agreement
may be amended from time to time with the consent of Bank or any
agreement substituted for such agreements in the future with the
consent of Bank.
6. POWERS OF BANK. To the extent permitted by law,
Agency hereby appoints Bank its true attorney in fact to perform
any of the following powers, which are coupled with an interest,
are irrevocable until termination of this Agreement and may be
exercised from time to time by Bank's officers and employees, or
any of them, upon the occurrence and during the continuance of an
Event of Default: (a) to perform any obligation of Agency
hereunder in Agency's name or otherwise; (b) to give notice of
Bank's rights under the Rights to Payment, to enforce the same
and make extension agreements with respect thereof; (c) to
liquidate any Pledged Investment prior to its maturity date and
apply the proceeds thereof to repayment of the Obligations,
notwithstanding the fact that such liquidation may give rise to
penalties for early withdrawal of funds; (d) to resort to
security in any order; (e) to prepare, execute, file, record or
deliver notes, assignments, schedules, designation statements,
financing statements, continuation statements, termination
statements, statements of assignment, applications for
registration or like papers to perfect, preserve or release
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Bank's interest in the Collateral; (f) to verify facts concerning
Rights to Payment by inquiry of obligors thereon, or otherwise,
in its own name or a fictitious name; (g) to enforce, collect,
deliver and receive payment under instruments for the payment of
money; (h) to receive, endorse and collect all instruments made
payable to Agency representing any dividend, interest payment or
other distribution in respect of the Collateral or any part
thereof and to give full discharge for the same; (i) to exercise
all rights, powers and remedies which Agency would have, but for
this Agreement, under all Collateral; and (j) to do all acts and
things and execute all documents in the name of Agency or
otherwise, deemed by Bank as necessary, proper and convenient in
connection with the preservation, perfection or enforcement of -
its rights hereunder.
Agency hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of
attorney is a power coupled with an interest and shall be
irrevocable. The powers conferred on Bank hereunder are solely
to protect its interests in the Collateral and shall not impose
any duty upon Bank to exercise any such powers. Such care as
Bank gives to the safekeeping of its own property of like kind.
shall constitute reasonable care of the Collateral when in Bank's
possession; provided, however, that Bank shall not be required to
make any presentment, demand or protest, or give any notice and
need not take any action to preserve any rights against any.prior
party or any other person in connection with the Obligations or -
with respect to the Collateral. Bank shall be accountable only
for amounts that it actually receives as a result of the exercise
of such powers and in no event shall Bank or any of its officers,
directors, employees or agents be responsible to Agency for any
act or failure to act, except for gross negligence or willful
misconduct.
7. PAYMENT OF PREMIUMS, TAXES, CHARGES, LIENS AND
ASSESSMENTS. Agency agrees to pay, prior to delinquency, all
insurance premiums, taxes, charges, liens and assessments against
the Collateral, and upon the failure of Agency to do so, Bank at
its option may pay any of them and shall be the sole judge of the
legality or validity thereof and the amount necessary to
discharge the same. Any such payments made by Bank shall be
obligations of Agency to Bank, due and payable immediately
without demand, together with interest at the rate for late
payments of principal or interest determined in accordance with
Subparagraph 2.06(c) of the Letter of Credit Agreement.
8. REMEDIES.
(a) Upon the occurrence of any Event of Default, Bank
shall have all rights set forth in the Letter of Credit
Agreement, all other rights, privileges, powers and remedies
provided by this Agreement or by law, including without
limitation (i) the rights of a secured creditor under Division 9
of the California Uniform Commercial Code, (ii) the right to
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contact all persons obligated to Agency on Rights to Payment and
to instruct such persons to deliver all Proceeds directly to
Bank, (iii) the right to exercise all rights under the Collateral
Agency Agreement and the Lock Box Agreement, including, without
limitation, the right to deliver the notices to the Collateral
Agent and the Lock Box Bank contemplated by the Collateral Agency
Agreement and the Lock Box Agreement, (iv) the right to require
Agency to assemble and deliver all Collateral and books and
records pertaining thereto, to Bank at a reasonably convenient
place designated by Bank, (iv) the right to foreclose or
otherwise enforce Bank's security interest in any manner
permitted by law, (v) the right to sell, lease or otherwise
dispose of any Collateral at one or more public or private sales,
for cash or credit or future delivery on such terms and in such
manner as Bank may determine, (vi) the right to transfer the
Collateral or any part thereof to its own name or to the name of
a nominee.
(b) Agency acknowledges and recognizes that Bank may
be unable to effect a public sale of all or a part of the Pledged
Investments and may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obligated
to agree, among other things, to acquire the Pledged Investments
for their own account, for investment and not with a view to the
distribution or resale thereof. Agency acknowledges that any
such private sales may be at prices and on terms less favorable
to Bank than those of public sales, and agrees that such private
sales shall be deemed to have been made in a commercially
reasonable manner and that Bank has no obligation to delay sale
of any Pledged Investment to permit the issuer thereof to
register it for public sale under the Securities Act of 1933, as
amended.
(c) Proceeds from the sale of the Collateral or any
part thereof shall be applied by Bank, first to the payment of
the costs and expenses of collection and sale incurred by Bank,
including, without limitation, reasonable attorneys' fees and all
other reasonable expenses, liabilities and costs incurred by Bank
in connection therewith; second, to the payment of the portion of
the obligations representing interest, third, to the payment of
all other Obligations; and finally, to the payment to Agency of
any surplus then remaining from such proceeds.
(d) To the extent permitted by law, Agency expressly
waives any right to hearing prior to the time Bank takes
possession or disposes of the Collateral as provided in this
Section 8.
9. SEPARATE ACCOUNTS. Agency shall, and shall cause
the Trustee and the Collateral Agent to, maintain accounts in
which all Tolls and all earnings and income thereon are
deposited, which accounts shall remain separate from and shall
not be commingled with any accounts in which DIF Rights to
Payment or other funds of the Agency may be deposited such that
SF3-25816.2 5 13%9-AC147=93
Tolls and the earnings thereon will remain identifiable and
separate from any other funds of Agency.
10. RIGHTS CUMULATIVE; WAIVER. All rights,
privileges, powers and remedies of Bank shall be cumulative. No
delay, failure or discontinuance of Bank in exercising any right,
privilege, power or remedy under this Agreement shall affect or
operate as a waiver of such right, privilege, power or remedy;
nor shall any single or partial exercise of any such right,
privilege, power or remedy preclude, waive or otherwise affect
any other or future exercise thereof or the exercise of any other
right, privilege, power or remedy. Any waiver, permit, consent
or approval of any kind by Bank of any default hereunder, or any
such waiver of any provisions or conditions hereof, must be in
writing and shall be effective only to the extent set forth in
writing.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Agency shall
reimburse Bank for all payments, advances, charges, costs and
expenses, including reasonable attorneys' fees, made or incurred
by Bank in exercising any right, power, privilege or remedy
conferred by this Agreement or in the enforcement thereof.
12. NOTICES. All notices or demands of any kind which
Bank may be required or desires to serve upon Agency under the
terms of this Agreement shall be given in accordance with
Paragraph 7.01 of the Letter of Credit Agreement.
13. SUCCESSORS AND ASSIGNS. All rights of Bank
hereunder shall inure to the benefit of Bank's successors and
assigns, and all obligations of Agency shall bind its successors
and assigns.
14. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of
California.
15. SEVERABILITY. If any provision of this Agreement
shall be held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the
remainder of such provision or any remaining provisions of this
Agreement.
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IN WITNESS WHEREOF Agency has executed this Agreement
as of the date set forth below.
Dated: July 7, 1993 FOOTHILL/EASTERN TRANSPORTATION
CORRIDOR AGENCY
By:
Title:
SF3-25816.2 7 1356.9 -RC1 -07/07/93
This Notice and Acknowledgement is subject to California law and given is in order to perfect
a security interest in the Development Impact Fees.
Dated: July 7, 1993 FOOTHILL/EASTERN TRANSPORTATION
CORRIDOR AGENCY
By:
Chief Executive Officer
Acknowledged and Agreed:
C
B
T
Dated:
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By: IY��-�
Title: Vice President
K130708A.93
0
MEMBER NOTICE AND ACKNOWLEDGEMENT
City of San Juan Capistrano
32400 paseo Adelanto
San Juan Capistrano, CA 92675
Notice is hereby given to City of San Juan Ca iso trano ("Member") that pursuant to the Security
Agreement, dated as of June 1, 1993, substantially in the form attached hereto as Exhibit A (the
"Security Agreement"), the Foothill/Eastern Transportation Corridor Agency ("Agency") has
granted a security interest to Morgan Guarantee Trust Company of New York ("Bank") in and
to the Collateral (as defined in the Agreement), including, without limitation, all of Agency's
present or future rights to receive Development Impact Fees, as defined below, and rights under
Article IV of the Joint Powers Agreement, as defined below.
By signing below, Member hereby acknowledges Bank's security interest in the Development
Impact Fees and such rights under the Joint Powers Agreement and agrees that (i) immediately
upon receipt by Member of any Development Impact Fees, all rights thereto shall simultaneously
and automatically pass to Agency and become the property of Agency; (ii) such Development
Impact Fees are the property of Agency and member has no beneficial interest therein; (iii) until
such Development Impact Fees have been paid to Agency, Member shall hold all such
Development Impact Fees intrust for the benefit of Agency and Bank; (iv) Member shall
segregate the Development Impact Fees from its other revenues and identify on its books and
records the Development Impact Fees as belonging to Agency; (v) upon receipt of written notice
signed by Bank, Member shall pay all Development Impact Fees directly to the depository
institution the address of and account or lockbox number for which shall be set forth in such
notice.
For purposes of this Notice and Acknowledgement, "Development Impact Fees" means the fees
imposed by and required to be paid to Member as a condition of approval of a final map or as
a condition of approval of a building permit as adopted by Member pursuant to Section 66484.3
of the California Government Code and Article IV of the Joint Powers Agreement; and "Joint
Powers Agreement" means the First Amended and restated Joint Exercise Powers Agreement,
dated as of October 17, 1988, among the County of Orange and the Cities which are parties
thereto, as amended.
San Joaquin Hills Foothill/Eastern
Corridor Agency Corridor Agency
Chairman: Chairman:
John Cox Scott Diehl
Newport Beach San Clemente
July 22, 1993
0
E
AAk
TRANSPORTATION CORRIDOR AGENCIES
Mr. George Scarborough
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Dear Mr. Scarborough:
William Woollen Jr.
Chief Executive Officer
Walter D. Kreutzen
Executive Vice President
Finance & Administration
Gregory G. Henk
Executive Vice President
Design & Construction
Enclosed is a fully executed Member Notice and 'Acknowledgement for your files. Thank you
for your assistance in meeting our short time schedule.
Sincerely,
&ar-"
Kathy ard, Manager
Administrative Services
Enclosure
345 Clinton Street, Costa Mesa, CA 92626 7141557-3298 FAX 7141557-9104
JUL 2 31993
Members: Anaheim Costa Mesa County of Orange Dana Point Irvine Lake Forest Laguna Hills Laguna Niguel
Mission Viejo Orange Newport Beach Santa Ana San Clemente San Juan Capistrano Tustin Yorbo Linda
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