Full Book Entry on Countywide Public Financing Authority (1996)

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obligations which may constitute additional charges against its general revenues and thereby adversely affect the availability of funds to make Lease Payments. Financial Condition of Members Many of the Members are heavily dependent on intergovernmental revenues from the State and the federal government, which sources of revenue may themselves be dependent on the transferring government's budgetary and financial condition. In addition, property and other forms of taxation comprising an additional significant source of revenue for many Members are subject to statutory and constitutional limitations which may impede their growth and availability for Member expenditures. In particular, if any Member were to exceed or to approach exceeding its appropriations limit described in Article XIIIB of the California Constitution, such Member could choose to fund other expenditures to the exclusion of the Lease Payments. See "Constitutional Limitations on Taxation and Appropriation" below for a discussion of certain California constitutional and statutory provisions imposing limitations on the taxing and appropriation powers of California political subdivisions. See "THE MEMBERS AND THE LEASED PREMISES" and "APPENDIX B - Information Concerning the Members and Description of Leased Premises" for certain general, financial and economic information relating to the Members. No Member has covenanted to pay the Lease Payments of any other Member or to make up any deficit in the payment to registered owners of the Bonds which occurs by reason of another Member's nonpayment; provided, however, that moneys in the Reserve Account will be used for such purpose, if available. For this reason, one Member's default in the payment of its Lease Payments will cause a default in the payments of principal of and interest on the Bonds in the event that moneys in the Reserve Account are insufficient to make up the deficit caused by such nonpayment. Abatement The Lease Payments under each Lease Agreement will be abated during any period in which, by reason of damage or destruction (other than by eminent domain, as discussed below), there is substantial interference with the applicable Member's use and occupancy of all or any portion of its Leased Premises. The amount of such abatement will be agreed upon by the Member and the Authority such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of the Leased Premises. Such abatement will continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction. In the event of any such damage or destruction, the applicable Lease Agreement will continue in full force and effect and each Member has waived any right to terminate the Lease Agreement by virtue of any such damage or destruction. Pursuant to each Lease Agreement, if all of the applicable Leased Premises is taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the term of the Lease Agreement will cease with respect to such Leased Premises as of the day possession shall be so taken. If less than all of the Leased Premises is taken permanently, or if all of the Leased Premises or any part thereof is taken temporarily under the power of eminent domain, (i) the Lease Agreement will continue in full force and effect and will not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (ii) there will be a partial abatement of Lease Payments in an amount to be agreed upon by the Member and the Authority such that the resulting Lease Payments for such Leased Premises represent fair consideration for the use and occupancy of the remaining usable portion of such Leased Premises. 13