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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson, City Administrator
Subject: Resolution of the Mayor and
Common Council of the City of San
Bernardino authorizing the execution and
delivery of the Facility Lease and the Site
Lease by and between the City of San
Bernardino and the California Infrastructure
and Economic Development Bank and
approving certain matters in connection
therewith.
Dept: City Administrator's Office
Date: July 8, 2004- -
ORiGiNAL
MCC Date: August 2, 2004
Synopsis of Previous Council Action:
1/22/02 MCC adopt a resolution authorizing execution of a contract with WLC
Architects Inc. for professional design services for the Verdemont Fire Station
6/17/02
MCC approve the offer for the purchase of Parcel No. 0261-19106 for the
Verdemont Fire Station
4/21/03
MCC approve a resolution to increase in the Verdemont Infrastructure Fee from $1500 to
$3000 to provide revenue to repay a loan for construction of the new station
7/21/03
MCC approve plans and design for the Verdemont Fire Station and authorize the City
Engineer to solicit bids for construction.
9/15/03
MCC approve a resolution authorizing submission of a financing application to the
California Infrastructure and Economic Development Bank for financing of the
Verdemont Fire Station.
3/15/04 MCC approve a resolution awarding a contract to Eberhardt Construction Inc., for
construction of the Verdemont Fire Station.
Recommended motion:
Adopt Resolution
:JfuL (j Li(~ (lei IE> )
Signature
Contact person: Teri Baker
Phone:
5122
Supporting data attached: Staff Report, Resolution, Site Lease, Ward: 5
FacUhy Lt:asc, and rcl'd.u:d d"tn;;wm:ms
FUNDING REQUIREMENTS: Amount: 2004/05 - $37.000 (interest onM. Twentv-
five (25) vear debt. See Exhibit F to the Facilitv Lease for schedule of 25 vear debt service
pavrnents.
Source: (Acet. No.) 311-000-4512
Council Notes: i2~~coA.-2{+
(Acct. Description) Fire Station Debt Service ~
Finance:~~~
Age"'. Item Nii%
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
Subiect
Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the
execution and delivery of the Facility Lease and the Site Lease by and between the City of San
Bernardino and the California Infrastructure and Economic Development Bank and approving
certain matters in connection therewith.
Baclmround:
The State of California Infrastructure and Economic Development Bank (CIEDB) provides low
rate infrastructure loans for terms up to twenty-five years. The Mayor and Common Council
authorized submittal of a loan application to fund construction of the Verdemont Fire Station in
September oflast year. The application was approved by the CIEDB Board in October. As you
may recall, the original amount of the loan was $2,000,000. However, because construction bids
came in higher than expected, the loan amount was increased to $2,550,000.
Approval ofthe loan application by CIEDB allowed construction to begin prior to the final loan
documents being approved. A construction contract was awarded in March of this year and a
groundbreaking ceremony took place on April 6, 2004. It is anticipated that the Verdemont Fire
Station construction will complete by January 2005.
The loan is secured by a lease/leaseback arrangement for the Verdemont Fire Station. The City
leases the fire station to the State for one dollar ($1.00) in the Site Lease. The State leases the
fire station back to the City for the payments on the loan in the Facility Lease. The Facility Lease
is equivalent to a loan document for this transaction. The leases end ten days (10) after the
discharge of the City's loan obligation. In order to finalize this loan and begin submitting draw
requests, Mayor and Council must approve the attached Site and Facility Leases and
accompanying resolution.
Fiscal Impact:
The Two Million Five Hundred Fifty Thousand dollars ($2,550,000) loan is being financed for a
term of twenty-five (25) years at an interest rate of two and ninety-two hundredths percent
(2.92%) per annum. This loan has an interest only component through July 31, 2006 (per CIEDB
policy). Exhibit F to the Facility Lease Agreement is a schedule of payments over the life of the
loan. Interest only payments for 2004/05 will total $37,000 and $82,100 in 2005/06. Beginning
in 2006/07 through August 2008, total payments will be approximately $160,000 per year.
In April 2003, the Verdemont Infrastructure Fee for new development was increased from $1500
to $3000 to assist with the loan payments. To date, $67,500 has been collected from the
increased V.1.F. and this revenue will be used to pay the FY 04-05 debt payment.
Recommendation
Adopt Resolution.
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t~I~Y
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BER.~ARDINO AUTHORIZING THE EXECUTION AND DELIVERY OF THE
FACILITY LEASE AND THE SITE LEASE BY AND BETWEEN THE CITY OF SAN
BERNARDINO AND THE CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK AND APPROVING CERTAIN OTHER MATTERS IN
CONNECTION THEREWITH.
WHEREAS, the City of San Bernardino ("City") has prepared and submitted an application
for financing assistance to the California Infrastructure and Economic Development Bank
("CIEDB") as part of a plan to provide for the construction, plus certain related costs, of the
Verdemont Pire Stativn;
WHEREAS, on October 27, 2004, CIEDB approved the terms and conditIOns on which certain
funds of the ClEDB in an amount not to exceed Two Million, Five Hundred Fifty Thousand
dollars ($2,550,000) may be provided to the City for use and application in connection with the
construction of the Verdemont Fire Station;
WHEREAS, a bid for constructia,] of the Verdemont Fire Station was awarded by the Mayor
and Common Council on March 15.2004; and
WHEREAS, it is appropriate at this time for the Mayor and Common Councll to authorize the
execution and delivery of an instrument entitled. "Site Lease" by and between the California
Infrastructure aed Economic Development Bank, as the tenant and the City as the lessor of the
Verdemont Fire Station, and to authorize the execution and delivery of an instrument entitled,
"Faci'ity Leas<:-" by and betwee;l the California Infrastructure and Economic Development
Bank as the lessee of the Verdemont Fire Station, and to approve and authorizt, other matters as
set forth be:ow in connection with the Site Lease and the Facility Lease ami the financing being
provided to the City under the temlS of such Site Lease and suei' Facility Lease by the
Caiifomia Infmslructure and Economic Development Bank for the Verdemont FIre Station
Project.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAlIi BERNARDINO AS FOLLOWS:
Section I. The Mayor is authorized and directed to execute and deliver the Facility Lease, dated
as of August 2, 2004 (the "Facility Lease") and the Site Lease dated as of August 2, 2004 (the
"Site Lease") proposed to be enle'red into by the City of San Bernardino and the California
Infrastructure and Economic Development Bank, dated as of August 2, 2004, for and on behalf
of City of Sar. Bemardino, together with such technical and conforming changes to the forms of
the Site Lease and the Facility Lease, as may be requested by the CIEDB and arproved by the
Mayor in consultation with the City Attorney.
Section 2. All actions of the City staff as taken with respect to the Verdemont Fire Station
Project and the Site Lease and the Facility Lease prior to the date of adoption of this
Resolution, are hereby ratified and c0ufirmed by the Common Council. Each of the following
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(ii)
(iii)
(iv)
(v)
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXECUTION AND DELIVERY OF THE
FACILITY LEASE AND THE SITE LEASE BY AND BETWEEN THE CITY OF SAN
BERNARDINO AND THE CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK AND APPROVING CERTAIN OTHER MATTERS IN
CONNECTION THEREWITH.
officers, employees or agents of the City is hereby authorized and directed to provide the
CIEDB concurrently with the delivery of the Site Lease and the Facility Lease as executed by
the Mayor on behalf of the City, the information, written certifications and other documents set
forth below:
(i)
the Mayor shall execute the final form of the "Lessee Tax Certificate" substantially in
the form as attached as Exhibit "H" to the Facility Lease;
the Finance Director shall execute the final form of the certificate of the City
substantially in the form attached as Exhibit "I" to the Facility Lease;
Risk Management shall cause to be provided to the C1EDB the evidence of insurance
and insurance certificate(s) required by Section 6.03 of the Facility Lease;
the City Attorney shall provide the C1EDB with an opinion that the City has legal
authority to enter into the Site Lease and the Facility Lease and that the Site Lease and
the Facility Lease are legal, binding, and enforceable agreements of the City; and
such other officers or employees or agents of the City as the Mayor may designate shall
provide the C1EDB with all other written documents or certifications not enumerated
above under (i) through (v) which are otherwise required or requested by the C1EDB for
each disbursement of funds to the City under the Facility Lease.
Section 3. This resolution shall take effect from and after its passage, approval and adoption.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE EXECUTION AND DELIVERY OF THE
FACILITY LEASE AND THE SITE LEASE BY AND BETWEEN THE CITY OF SAN
BERNARDINO AND THE CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK AND APPROVING CERTAIN OTHER MATTERS IN
CONNECTION THEREWITH.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof, held on the
_ day of
, 2004, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN ABSENT
ESTRADA
LIEN-LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MCCAMMACK
City Clerk
2004.
The foregoing resolution is here?y approved this
day of
Approved as to
Form and legal content:
Judith Valles, Mayor
City of San Bernardino
JAMES F. PENMAN,
City Attorney
1. f
By:
Recording Requested By and Return To:
to CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK
Attn: Credit Support Manager
P.O. Box 2830
Sacramento, CA 95812-2830
This document is recorded for the benefit of the CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK and the recording is fee-exempt under Section 6103 of
the California Government Code.
SITE LEASE
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Dated as of August 2, 2004
by and between the
CITY OF SAN BERNARDINO, as lessor
and the
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK, as lessee
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SITE LEASE
THIS SITE LEASE, dated as of August 2, 2004, by and between the CITY OF
SAN BERNARDINO, a charter city duly organized and validly existing under and by virtue of
the laws of the State of California (herein called the "Site Lessor") and the CALIFORNIA
INFRASTRUcruRE AND ECONOMIC DEVELOPMENT BANK, duly organized and
existing pursuant to the Bergeson-Peace Infrastructure and Economic Development Bank Act,
constituting Division 1 of Title 6.7 of the California Government Code (commencing at Section
63000 thereof) as now in effect and as it may from time to time hereafter be amended (the "Act")
(herein called the "CIEDB");
WITNESSETH:
WHEREAS, the CIEDB intends to assist the Site Lessor pursuant to the Act by
financing the construction, plus certain related costs, of the Verdemont Fire Station (herein
called the "Project") on the Site, as hereinafter defined (the Site and Project are together herein
called the "Facility"); and
WHEREAS, the CIEDB intends to lease the Project to the Site Lessor by a
facility lease (herein called the "Facility Lease") and the Site Lessor intends to enter into such a
lease with the CIEDB as a material consideration for the CIEDB's agreement to finance the
construction of the Project for and on behalf of the Site Lessor;
NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED as follows:
SECTION 1. Site.
The Site Lessor hereby leases to the CIEDB and the CIEDB hereby hires from the
Site Lessor, on the terms and conditions hereinafte.r set forth, the real property situated in San
Bernardino County, State of California, and described in Exhibit A attached hereto and made a
part hereof and all improvements thereon (herein called the "Site").
SECTION 2. Assignment bv the CIEDB.
The Site Lessor acknowledges that the CIEDB has authority to issue tax-exempt
bonds, that the Facility may be used to secure such bonds and that certain of the rights of the
CIEDB hereunder will be assigned to a trustee under an indenture (the "Indenture"). The Site
Lessor agrees to execute all documents which may be reasonably requested by the CIEDB or the
trustee to protect their interests in the Facility during the term hereof.
SECTION 3. Term.
The term of this lease shall commence on the earlier of the date'of recordation of
this lease in the office of the County Recorder of San Bernardino County, State of California, or
August 2, 2004, and shall end on August 1, 2029, unless such term is extended or sooner
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terminated as hereinafter provided. If on such date, the indebtedness of or advance for
construction costs of the Project and related costs provided by or owed to the CmDB (the
"CIEDB Obligation") shall not be fully paid, or if the rental payable under the Facility Lease
shall have been abated at any time and for any reason, then the term of this lease shall be
extended until ten days after the CmDB Obligation shall be fully paid pursuant to the Facility
Lease or the Indenture, except that the term of this lease shall in no event be extended beyond
August 1, 2034. If prior to August 1, 2034, the cmDB Obligation is discharged by its terms, the
term of this lease shall end ten days thereafter or ten days after written notice by the Site Lessor
to the CmDB, whichever is earlier.
SEcrION 4. Rental.
The CmDB shall pay to the Site Lessor as and for rental hereunder the sum of
One Dollar ($1), all of which rental shall be payable in full within ten days of the recordation
hereof. In addition to the foregoing rental payment, the CmDB may pay to the Site Lessor as
and for rental hereunder such surplus moneys, if any, as shall be paid over to the Site Lessor
pursuant to the Facility Lease.
SEcrION 5. PUlpose.
The CmDB shall use the Site solely for the purpose of permitting the construction
of the Project thereon and leasing the Facility to the Site Lessor pursuant to the Facility Lease
and for such purposes as may be incidental thereto, including the demolition of any
improvements which are designated for demolition in the plans and specifications for the Project;
provided, that in the event of default by the Site Lessor under the Facility Lease the CIEDB may
exercise the remedies provided in the Facility Lease.
SEcrION 6. Right of Entrv.
The Site Lessor reserves the right for any of its duly authorized representatives to.
enter upon the Site at any reasonable time to inspect the same or to make any repairs,
improvements or changes necessary for the preservation thereof.
SEcrION 7. Termination.
The cmDB agrees, upon the termination or expiration of this lease, to quit and
surrender the Site in the same good order and condition as the same was in at the time of
commencement of the term hereunder, except for acts of God and reasonable wear and tear and
any actions taken by the Site Lessor that may affect the condition of the Site, and agrees that any
permanent improvements and structures existing upon the Site at the time of such termination or
expiration of this lease shall remain thereon and title thereto shall vest in the Site Lessor.
SECTION 8. Default.
In the event the CmDB shall be in default in the performance of any obligation on
its part to be performed under the terms of this lease, which default continues for sixty (60) days
following notice and demand for correction thereof to the CmDB, the Site Lessor may exercise
any and all remedies granted by law, except that no merger of this lease and of the Facility Lease
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shall be deemed to occur as a result thereof; provided, however, that the Site Lessor shall have
no power to terminate this lease by reason of any default on the part of the CIEOB if such
termination would affect or impair any assignment or sublease of all or any part of the Site then
in effect between the CIEOB and any assignee or subtenant of the CIEOB (other than the Site
Lessor under the Facility Lease); and provided further, that so long as the CIEOB Obligation is
outstanding and unpaid in accordance with the terms of the Facility Lease or the Indenture, the
rentals or any part thereof payable to the CIEOB or its assignees shall continue to be paid to the
CIEOB or its assignees. So long as any assignee or subtenant of the CIEOB shall duly perform
the terms and conditions of this lease and of its then existing sublease (if any), such assignee or
subtenant shall be deemed to be and shall become the tenant of the Site Lessor hereunder and
shall be entitled to all of the rights and privileges granted under any such assignment or sublease;
provided further, however, that so long as the CIEOB Obligation is outstanding and unpaid in
accordance with the terms of the Facility Lease or the Indenture, the rentals or any part thereof
payable to the CIEOB or its assignees (by the terms of such assignment or sublease) shall
continue to be paid to the CIEOB or its assignees.
SECTION 9. Ouiet Enjovrnent.
The CIEOB at all times during the term of this lease, subject to the provisions of
Section 8 hereof, shall peaceably and quietly have, hold and enjoy all of the Site.
SECTION 10. Waiver of Personal Liability.
All liabilities under this lease on the part of the CIEOB are solely liabilities of the
CIEOB as an entity of state government, and the Site Lessor hereby releases each and every
member, officer, agent and employee of the CIEOB of and from any personal or individual
liability for negligence under this lease. All liabilities under this lease on the part of the Site
Lessor are solely liabilities of the Site Lessor as a local government entity under the laws of the
State of California, and the CIEOB hereby releases each and every member, officer, agent and
employee of the Site Lessor of and from any personal or individual liability for negligence under
this lease.
SECTION 11. Taxes.
The Site Lessor covenants and agrees to pay any and all assessments of any kind
or character and also all taxes, including possessory interest taxes, levied or assessed upon the
Site (including both land and improvements); provided, however, that the Site Lessor shall not
pay any possessory interest taxes levied as a result of any assignment or sublease of all or any
part of the Site then in effect between the CIEOB and any assignee or subtenant of the CIEOB
(other than the Site Lessor under the Facility Lease).
SECTION 12. Eminent Oomain.
In the event the whole or any part of the Site or the improvements thereon
(including the Facility) is taken permanently or temporarily under the power of eminent domain,
the interest of the CIEOB shall be recognized and is hereby determined to be the amount of the
then unpaid indebtedness incurred or advanced by the CIEOB to finance or refinance the
construction of the Project, including the unpaid principal of and interest on the CIEOB
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Obligation, and shall be paid as required by the Facility Lease or the Indenture. The term
"unpaid indebtedness," as used in the preceding sentence, includes the face amount of the
indebtedness evidenced by the CIEDB Obligation, together with the interest thereon and all other
payments required to be made pursuant to the Facility Lease or the Indenture, until such
indebtedness, together with the interest thereon, has been paid in full in accordance with the
terms thereof.
SECTION 13. License to Access Site Utilities and Parkin!!.
The Site Lessor hereby irrevocably grants to the CIEDB and the CIEDB hereby
accepts from the Site Lessor, during the term of this lease, a license for ingress and egress to the
Facility.
The Site Lessor agrees to provide or cause to be provided to the CIEDB, at
reasonable rates and charges payable by the CIEDB, its assigns or sublessees, adequate parking
spaces and such utility services, including electricity, gas, water, sewer, garbage disposal,
heating, air conditioning and telephone, as the Site Lessor provides or causes to be provided to
structures similar to the Project.
SECfION 14. Partial Invalidity.
If anyone or more of the terms, provisions, covenants or conditions of this lease
shall to any extent be declared invalid, unenforceable, void or voidable for any reason
whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes
final, none of the remaining terms, provisions, covenants and conditions of this lease shall be
affected thereby, and each provision of this lease shall be valid and enforceable to the fullest
extent permitted by law.
SECTION 15. Notices.
All notices, statements, demands, consents, approvals, authorizations, offers, designations,
requests, agreements or promises or other communications hereunder by either party to the other
shall be in writing and shall be sufficiently given and served upon the other party if delivered
personally or if mailed by United States certified or registered mail, return receipt requested,
postage prepaid, and, if to the Site Lessor, addressed to the City of San Bernardino, Attn: City
Administrator, 300 North "D" Street, San Bernardino, CA 92418, or, if to the CIEDB, addressed
to the CIEDB at California Infrastructure and Economic Development Bank, Attn: Credit
Support Manager, P.O. Box 2830, Sacramento, CA 95812-2830 or if by personal delivery or
overnight mail, to California Infrastructure and Economic Development Bank, Attn: Credit
Support Manager, 1001 I Street, 19th Floor, Sacramento, CA, 95814, with a copy to the trustee
for the bonds issued by the CIEDB, if any, at such address as may be provided by such trustee
for such purpose, or to such other addresses as the respective parties may from time to time
designate by notice in writing.
SECfION 16. Section Headin!!s.
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All section headings contained herein are for convenience of reference only and
10 are not intended to define or limit the scope of any provision of this lease.
SECTION 17. Amendment.
This lease may only be amended by a written instrument duly authorized and
executed by the CIEOB and the Site Lessor.
SECTION 18. Execution.
This lease may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all together shall constitute but one and the same lease. It is also
agreed that separate counterparts of this lease may separately be executed by the CIEOB and the
Site Lessor, all with the same force and effect as though the same counterpart had been executed
by both the CIEOB and the Site Lessor.
[The balance of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Site Lessor and the CIEDB have caused this lease
to be executed by their respective officers thereunto duly authorized, all as of the day and year
first above written.
Attest
By
Attest
By
CITY OF SAN BERNARDINO, as Site Lessor
By
Judith Valles
Mayor
Rachel Clark
City Clerk
CALIFORNIA INFRASTRUcruRE AND
ECONOMIC DEVELOPMENT BANK, as lessee
By
Stanton C. Hazelroth
Executive Director
Blake Fowler
Assistant Executive Director
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IN WITNESS WHEREOF, the Site Lessor and the CIEDB have caused this lease
to be executed by their respective officers thereunto duly authorized, all as of the day and year
first above written.
CITY OF SAN BERNARDINO, as Site Lessor
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
CAUFORNIA INFRASTRUcruRE AND
ECONOMIC DEVELOPMENT BANK, as lessee
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
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IN WITNESS WHEREOF, the Site Lessor and the CmDB have caused this lease
to be executed by their respective officers thereunto duly authorized, all as of the day and year
first above written.
CITY OF SAN BERNARDINO, as Site Lessor
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK, as lessee
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
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IN WITNESS WHEREOF, the Site Lessor and the CIEDB have caused this lease
to be executed by their respective officers thereunto duly authorized, all as of the day and year
first above written.
CITY OF SAN BERNARDINO, as Site Lessor
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK, as lessee
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
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STATE OF CALIFORNIA
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COUNTY OF SACRAMENTO
On , 2004, before me, Veronica Gonzalez, a Notary Public in and for the
State of Cali fomi a, personally appeared STANTON C. HAZELROTH, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the same in his
authorized capacity, and that by his signature on the instrument the person or the entity on behalf
of which the person acted, executed the instrument.
Witness my hand and official seal
[SEAL]
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STATE OF CALIFORNIA
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COUNTY OF
On , 2004, before me, a Notary Public in and for the
State of California, personally appeared JUDITH VALLES, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument the person or the entity on behalf of
which the person acted, executed the instrument.
Witness my hand and official seal
[SEAL]
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EXHIBIT A
Property Description
Street address:
Just north of the comer of Palm Avenue and Kendall Drive within the Verdemont area of the
City of San Bernardino. APN: 0261-191-06
Legal Description:
The land r.;fem~d to IS situated in the County of San Bernardino, City of San Bernardino, State
of Califofnla, and is described as follows:
PARCEL 1:
ALL THAT PORTION Of LOT 1, BLOCK 61, IRVINGTON LAND AND WATER CCJt.1PANY
SUBDMSION, IN THE COUNTY OF SAN BERNARDINO, STATE Of CALIFORNIA, AS PER PLAT
RECORDED IN BOOK 3 Of NAPS, PAGE 9, RECORDS OF SAID COUNTY (AND THAT PORTION
OF THE NORTH 1/2 Of CAlON AVENUE AS VACATED BY THE COUNTY BOARD OF
SUPERVISORS ADJOINING ON THE SOUTH) AND THAT PORTION Of PAL~1 AVENUE AS
VACATED BY THE COUNTY OF SAN BERNARDINO BOARD Of SUPERVISORS ON FEBRUARY 21.
1910 ADJOINING SAID LOT ON THE NORTHWEST, WHICH WOULD PASS BY OPERATION Of
LAW WITH A CONVEYANCE Of SAID PROPERTY, DESCRIBED AS fOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT;
THENCE EAST ALONG THE SOUTH LINE Of SAID LOT 335.25 FEET;
THENCE NORTH 185 FEET;
THENCE WEST AT RIGHT ANGLES 335,25 fEET TO THE WEST LINE OF SAID LOT;
THENCE SOUTH ALONG SAID WEST LINE 185 FEET TO THE POINT OF BEGINNING,
PARCEL 2:
AN EASEl-lENT FOR DRIVEWAY PURPOSES OVER A STRIP OF'LAND 15 FEET IN WIDTH OVER
AND ACROSS A PORTION OF LOT 1, BLOCK 6,IRVINGTON LAND AND WATER Cor.1PANY
SUBDMSION, IN THE COUNTY OF SAN 8ERNARDINO, STATE Of CALIfORNIA, AS PER PLAT
RECORDED IN BOOK 3 OF NAPS, PAGE 9, RECORDS OF SAID COUNTY, It~['lEDlATELY
ADJOINING THE fOLLOWING DESCRIBED PROPERTY ON THE NORTH:
THAT PORTION Of LOT I, BLOCK 61, IRVINGTON LAND AND WATER CONPANY SUBDMSlON,
IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIfORNIA, AS PER PLAT RECORDED IN
BOOK 3 OF ['lAPS, PAGE 9, RECORDS Of SAID COUNTY DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID LOT;
THENCE EAST ALONG THE SOUTH LINE OF SAID LOT, 335,25 FEET;
THENCE NORTH 185 FEET;
THENCE WEST AT RIGHT ANGLES 335,25 FEET TO THE WEST LINE OF SAID LOT;
THENCE SOUTH ALONG SAID LINE 185 FEET TO THE POINT OF BEGINNING,
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Recording Requested By )
And When Recorded Mail To: )
)
)
California Infrastructure and Economic )
Development Bank )
Attn: Credit Support Unit )
P.O. Box 2830 )
Sacramento, California 95812-2830 )
)
(Space above for Recorder's use)
This document is recorded for the benefit of the CAUFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK and the recording is fee-exempt under section 6103 of
the California Government Code.
FACILITY LEASE
by and between the
California Infrastructure and Economic Development Bank
and the
City of San Bernardino
relating to $2,550,000
Agreement No. CIEDB B04-051
Dated as of August 2, 2004
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ................................................................................................. 2
SECTION 1.01 Definitions .......................................................................................... 2
SECTION 1.02 Rules of Construction ......................................................................... 6
ARTICLE II THE FACIUTY ...............................................................................................7
SECTION 2.01 Lease of the Facility............................................................................ 7
SECTION 2.02 Quiet Enjoyment................................................................................. 7
SECTION 2.03 Right of Entry and Inspection............................................................. 7
SECTION 2.04 Prohibition Against Encumbrance or Sale.......................................... 7
SECTION 2.05 IJens ................................................................................................... 7
SECTION 2.06 Substitution or Removal of Facility.................................................... 8
SECTION 2.07 Construction, Acquisition and Installation of the Project;
Construction Contracts ....................................................................... 9
Project Account .................................................................................. 9
Disbursement of Project Amount .....................................................10
Withholding of Project Amount ....................................................... 11
SECTION 2.08
SECTION 2.09
SECTION 2.10
ARTICLE ill TERM OF THE FACIUTY LEASE ............................................................. 11
SECTION 3.01 Commencement and Termination of the Facility Lease;
Vesting of Title ................................................................................. 11
() ARTICLE IV USE OF PROCEEDS; TAX COVENANTS; CONTINUING
DISCLOSURE ............................................................................................... 12
SECTION 4.01 Use of Project Amount ..................................................................... 12
SECTION 4.02 Tax Covenant.................................................................................... 12
SECTION 4.03 Continuing Disclosure ...................................................................... 12
ARTICLE V RENTAL PAYMENTS .................................................................................13
SECTION 5.01 Rental Payments ............................................................................... 13
SECTION 5.02 Annual Budgets ................................................................................ 15
SECTION 5.03 Application of Rental Payments ....................................................... 15
SECTION 5.04 Rental Abatement ............................................................................. 15
SECTION 5.05 Prepayment of Base Rental Payments .............................................. 16
SECTION 5.06 Obligation to Make Rental Payments............................................... 16
ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES....... 17
SECTION 6.01 Maintenance of the Facility by the Lessee........................................ 17
SECTION 6.02 Taxes, Other Governmental Charges and Utility Charges ............... 17
SECTION 6.03 Insurance...........................................................................................17
SECTION 6.04 Advances .......................................................................................... 20
SECTION 6.05 Title Insurance ..........................................................:....................... 20
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TABLE OF CONTENTS
(continued)
Page
ARTICLE vn DAMAGE, DESTRUCTION, TITLE DEFECT AND
CONDEMNATION ....................................................................................... 21
SECTION 7.01 Damage, Destruction, Title Defect and Condemnation; Use of
Net Proceeds ..................................................................................... 21
ARTICLE vm DISClAIMER OF WARRANTIES; VENDOR'S WARRANTIES;
USE OF THE FACILITY .............................................................................. 22
SECTION 8.01 Disclaimer of Warranties.................................................................. 22
SECTION 8.02 Use of the Facility............................................................................. 23
ARTICLE IX ASSIGNMENT AND INDEMNIFICATION................................................ 23
SECTION 9.01 Assignment by Lessor....................................................................... 23
SECTION 9.02 Assignment by Lessee ...................................................................... 23
SECTION 9.03 Indemnification................................................................................. 23
ARTICLE X DEFAULT...................................................................................................... 24
SECTION 10.01 Events of Default .............................................................................. 24
ARTICLE XI REPRESENTATIONS AND WARRANTIES OF THE LESSEE................ 27
SECTION 11.01 Organization; Authority; Application Correct.................................. 27
SECTION 11.02 Agreement Valid and Binding; Approval by Lessee ........................ 27
SECTION 11.03 No Conflict in Execution of Facility Lease ...................................... 27
SECTION 11.04 No litigation..................................................................................... 27
SECTION 11.05 No Breach or Default........................................................................ 27
SECTION 11.06 No Consent, Approval or Permission Necessary.............................. 27
SECTION 11.07 Information Submitted to the Lessor ................................................ 28
SECTION 11.08 Financial Statements of the Lessee................................................... 28
SECTION 11.09 licenses, Permits and Approvals for Operation of Facility.............. 28
SECTION 11.10 Project Completion........................................................................... 28
ARTICLE XII AFFIRMATIVE COVENANTS OF THE LESSEE...................................... 29
SECTION 12.01 Punctual Payment ............................................................................. 29
SECTION 12.02 Books and Accounts; Financial Statements...................................... 29
SECTION 12.03 Notification to the Lessor ................................................................. 30
SECTION 12.04 Protection of Security and Rights ..................................................... 30
SECTION 12.05 Management of Properties ................................................................30
SECTION 12.06 Payment from Tax-Exempt Deb!...................................................... 30
SECTION 12.07 Further Assurances ........................................................................... 30
SECTION 12.08 Project Documentation ..................................................................... 30
SECTION 12.09 Lessee's General Responsibility..............................,........................ 31
SECTION 12.10 Lessee's Assurances and Commitments........................................... 31
SECTION 12.11 Facility Access.................................................................................. 31
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TABLE OF CONTENTS
(continued)
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SECTION 12.12 Performance and Payment Bonds..................................................... 31
SECTION 12.13 Notice of Event of Default................................................................ 32
SECTION 12.14 Compliance with State Contract Requirements................................ 32
ARTICLE XIII NEGA TlVE COVENANTS OF THE LESSEE ............................................ 32
SECTION 13.01 Nondiscrimination ............................................................................ 32
ARTICLE XIV MISCELLANEOUS.......................................................................................33
SECTION 14.01 Notices ..............................................................................................33
SECTION 14.02 Contact Persons ................................................................................ 34
SECTION 14.03 Binding Effect...................................................................................34
SECTION 14.04 Third Party Beneficiaries .................................................................. 34
SECTION 14.05 Net Lease ..........................................................................................34
SECTION 14.06 Amendments to Facility Lease ......................................................... 34
SECTION 14.07 Reserved. ..........................................................................................34
SECTION 14.08 Partial Invalidity ............................................................................... 35
SECTION 14.09 California Law; Venue ..................................................................... 35
SECTION 14.10 Section Headings .............................................................................. 35
SECTION 14.11 Execution .......................................................................................... 35
SECTION 14.12 No Merger......................................................................................... 35
o EXlllBIT A - Description of the Project...................................................................................A-l
EXlllBIT B - Description of the Site ........................................................................................ B-1
EXlllBIT C - Form of Resolution of Lessee............................................................................. C-l
EXlllBIT C - Form of Certificate of Resolution....................................................................... C-3
EXlllBIT D - Budget of Project Costs ......................................................................................D-l
EXlllBIT E - Conditions Precedent to Disbursement............................................................... E-l
EXlllBIT F - Base Rental Payments ......................,.................................................................. F-l
EXlllBIT G - State Contract Requirements ..............................................................................G-l
EXlllBIT H - Tax Certificate ....................................................................................................H-l
EXlllBIT I - Form of Certificate of Chief Financial Officer
of the City of San Bernardino (the "Lessee")......................................................... I-I
EXlllBIT J -Legal Opinion ........................................................................................................J-l
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FACIUfY LEASE
This FACIUTY LEASE (the "Facility Lease") is executed and entered into as of
August 2, 2004, by and between the CAUFORNIA INFRASTRUCfURE AND ECONOMIC
DEVELOPMENT BANK (the "Lessor"), duly organized and existing pursuant to the Bergeson-
Peace Infrastructure and Economic Development Bank Act, constituting Division 1 of Title 6.7
of the California Government Code (commencing at section 63000 thereof) as now in effect and
as it may from time to time hereafter be amended (the "Act") and the CITY OF SAN
BERNARDINO, a charter city and municipal corporation duly organized and existing under the
laws of the State of California (the "Lessee").
WITNESSETH:
WHEREAS, the Lessee and the Lessor desire to finance the construction,
acquisition and installation of the Verdemont Fire Station, as described in Exhibit A attached
hereto (the "Project"), which Project will be located on real property owned by the City of San
Bernardino and described in Exhibit B attached hereto (the "Site" and together with the Project,
the "Facility");
WHEREAS, the Lessee has leased the Site to the Lessor pursuant to the Site
Lease, dated as of August 2, 2004, between the Lessee, as lessor and the Lessor, as lessee;
WHEREAS, the Lessee has determined that it is in the public interest,
convenience and welfare and for the common benefit of the inhabitants of the Lessee that the
Lessee finance the Project through the delivery of this Facility Lease (as defined in section 1.01);
WHEREAS, the Lessee is authorized by law to lease the Facility and the Facility
is necessary and proper for public purposes;
WHEREAS, the Lessor has issued tax-exempt bonds ("Proceeds Bonds" as
defined in Section 1.01), the proceeds of which will be used to fund the Project;
WHEREAS, the Lessor may pledge its rights under this Facility Lease to secure
bonds ("Secured Bonds" as defined in Section 1.01);
WHEREAS, the Lessee acknowledges that the issuance of both the Secured
Bonds and Proceeds Bonds impacts its rights and obligations as described herein, and Lessee
hereby agrees to adhere to the requirements contained in this Facility Lease necessary in order to
maintain the tax-exempt status of the Proceeds Bonds; 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
entering into of this Facility Lease to exist, have happened and have been performed in a regular
and due time, form and manner as required by law, the parties hereto are now duly authorized to
execute and enter into this Facility Lease;
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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 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.
Act
"Act" means the Bergeson-Peace Infrastructure and Economic Development Bank
Act, constituting Division 1 of Title 6.7 of the California Government Code (commencing at
section 63000 thereof) as now in effect and as it may from time to time hereafter be amended.
Additional Rental Payments
"Additional Rental Payments" means all amounts payable by the Lessee pursuant
to Section 5.01(b) hereof.
o Base Rental Payments
"Base Rental Payments" means all amounts payable by the Lessee as Base Rental
pursuant to Section 5.01(a) hereof.
Business Dav
"Business Day" means any day, Monday through Friday, which is not a legal
holiday of the State or the Trustee.
Caoitalized Interest Account
"Capitalized Interest Account" means the Account established pursuant to Section
5 .01( e).
Certificate of the Lessee
"Certificate of the Lessee" means a request or certificate, in writing, signed by a
duly authorized representative of the Lessee.
Code
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations of the United States Department of the Treasury issued thereunder, and in this regard
reference to any particular section of the Code shall include reference to all successors to such
section of the Code.
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Effective Date
"Effective Date" means August 2, 2004, the date on which this Facility Lease
becomes effective and binding upon the Lessee and the Lessor.
Event of Default
"Event of Default" means any of the events described in Section 10.01.
Expiry Date
"Expiry Date" means August 1, 2029, except as extended or sooner terminated
pursuant to Section 3.01 hereof.
Facility
"Facility" means the Site and any and all improvements thereon, as described in
Exhibit B hereto (as the same may be changed from time to time by Removal or Substitution as
provided in Section 2.06).
Facilitv Lease
"Facility Lease" means this facility lease, dated as of August 2, 2004, by and
between the Lessor and the Lessee, as originally executed and as it may from time to time be
amended or supplemented in accordance with the terms hereof.
Fiscal Year
"Fiscal Year" means any twelve month period extending from July 1 in one
calendar year to June 30 of the succeeding calendar year, both dates inclusive, or any other
twelve month period selected and designated by the Lessee as its official fiscal year period.
Independent Accountant
"Independent Accountant" means any certified public accountant or firm of
certified public accountants duly licensed or registered or entitled to practice and practicing as
such under the laws of the State, appointed by the L.essee who, or each of whom:
(1) is in fact independent and not under the control of the Lessee or the Lessor;
(2) does not have any substantial interest, direct or indirect, in the Lessee or the
Lessor; and
(3) is not connected with the Lessee or the Lessor as an officer or employee of the
Lessee or the Lessor, but who may be regularly retained to make reports to the Lessee or the
Lessor.
Insurance Consultant
"Insurance Consultant" means an individual or firm either retained by the Lessee
as an independent insurance consultant or an employee of the Lessee, experienced in the field of
risk management.
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Lease Year
"Lease Year" means the period from each July 1 to and including the following
June 30, during the tenn hereof; except that the initial Lease Year means the period from the
Effective Date to and including June 30, 200S and the last Lease Year shall be that period from
July 1 to and including the day that this Facility Lease expires or is earlier tenninated as provided
herein.
Lessee
"Lessee" means the City of San Bernardino, a charter city and municipal
corporation duly organized and existing under the laws of the State.
Lessor
"Lessor" means the California Infrastructure and Economic Development Bank,
and its successors and assignees.
Net Proceeds
"Net Proceeds" means, collectively, the net proceeds of any insurance or
condemnation award resulting from any damage or destruction of any portion of the Facility
payable in accordance with Section 7.01.
Operatine: Bude:et
"Operating Budget" means the annual approved budget of the Lessee which
includes Base Rental Payments and Additional Rental Payments due during the year.
Opinion of Counsel
"Opinion of Counsel" means a written opinion of counsel of recognized national
standing in the field of law relating to municipal bonds, appointed by the Lessee or the Lessor
and in all cases paid for by the Lessee and acceptable to the Lessor.
Owner
"Owner" means the registered owner of any outstanding Proceeds Bond.
Pennitted Encumbrances
"Pennitted Encumbrances" means, as of any particular time:
(1) liens for general ad valorem taxes and assessments, if any, not then delinquent,
or which the Lessee may, pursuant to Section 6.02, pennit to remain unpaid;
(2) this Facility Lease, as it may be amended from time to time;
(3) any right or claim of any mechanic, laborer, materialman, supplier or vendor
that has not been filed or perfected in the manner prescribed by law;
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(4) easements, rights of way, mineral rights, drilling rights and other rights,
reservations, covenants, conditions or restrictions, all of a non-monetary nature, which exist of
record as of the Effective Date and are acceptable to the Lessor; and
(5) easements, rights of way, mineral rights, drilling rights and other rights,
reservations, covenants, conditions or restrictions, all of a non-monetary nature, established
following the date of recordation of this Facility Lease and to which the Lessor and the Lessee
consent in writing.
Proceeds Bonds
"Proceeds Bonds" means bonds issued by the Lessor the proceeds of which will
be used, in whole or part, to fund the Project.
Project
"Project" means the public development facility to be constructed by the Lessor
for the Lessee pursuant to this Facility Lease, authorized by Government Code section 630l0(q)
and the Act and more particularly described in Exhibit A.
Project Account
"Project Account" means the account or subaccount by that name established by
the Lessor pursuant to Section 2.08.
Project Amount
"Project Amount" means two million five hundred fifty thousand dollars
($2,550,000).
Project Costs
"Project Costs" means the costs of construction, acquisition and installation of the
Project, as approved by the Lessor and set forth in Exhibit D.
Removal
"Removal" means the release of all or a portion of the Facility from the leasehold
hereof as provided in Section 2.06.
Report
"Report" means a document in writing signed by an Independent Consultant or an
Independent Accountant, and including:
(1) a statement that the person or firm making or giving such Report has read the
pertinent provisions of this Facility Lease to which such Report relates;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the Report is based; and
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(3) a statement that, in the opinion of such person or firm, sufficient examination
or investigation was made as is necessary to enable said consultant to express an informed
opinion with respect to the subject matter referred to in the Report.
Secured Bonds
"Secured Bonds" means bonds of one or more series issued by the Lessor to
which certain rights of the Lessor under this Facility Lease may be from time to time pledged
directly or indirectly.
Site
"Site" means the real property described in Exhibit B attached hereto.
Site Lease
"Site Lease" means the site lease, dated as of August 2, 2004, by and between the
Lessee, as lessor and the Lessor, as lessee, of the Site as originally executed and as it may from
time to time be amended or supplemented.
State
"State" means the State of California.
Substitution
"Substitution" means the removal, and the lease of substituted real property and
improvements hereunder as provided in Section 2.06.
Tax Certificate
"Tax Certificate" means the tax certificate as set forth in Exhibit H executed and
delivered by the Lessee as of the Effective Date setting forth certain conditions, covenants,
expectations and elections of the Lessee with respect to the Facility Lease in accordance with the
Code.
Trustee
"Trustee" means the trustee acting in its capacity as such in connection with the
Proceeds Bonds and Secured Bonds, or any successor or assignee as therein provided, including
the Lessor.
SECTION 1.02 Rules of Construction. The singular form of any word used
herein, including the terms defined in this Section 1.01, shall include the plural, and vice versa,
unless the context otherwise requires. The use herein of a pronoun of any gender shall include
correlative words of the other genders. All references herein to "Sections" and other
subdivisions hereof are to the corresponding Sections or subdivisions of this Facility Lease as
originally executed; and the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Facility Lease as a whole and not to any particular Section or subdivision
hereof.
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ARTICLE II
THE FACILITY
SECTION 2.01. Lease of the Facility. The Lessor hereby leases to the Lessee,
and the Lessee hereby rents and hires from the Lessor, the Facility on the conditions and terms
hereinafter set forth. The Lessee hereby agrees and covenants that during the term hereof, except
as hereinafter provided, it will use the Facility for public purposes so as to afford the public the
benefits contemplated hereby and so as to permit the Lessor to carry out its agreements and
covenants contained herein, and the Lessee hereby further agrees and covenants that during the
term hereof that it will not abandon or vacate the Facility.
SECTION 2.02. Ouiet Eniovrnent. The parties hereto mutually covenant that
the Lessee, so long as it observes and performs the agreements, conditions, covenants and terms
required to be observed or performed by it contained herein and is not in default hereunder, shall
at all times during the term hereof peaceably and quietly have, hold and enjoy the Facility
without suit, trouble or hindrance from the Lessor.
SECTION 2.03. Right of Entry and Inspection. The Lessor shall have the right
to enter the Facility and inspect the Facility during reasonable business hours (and in
emergencies at all times) for any purpose connected with the Lessor's rights or obligations
hereunder and for all other lawful purposes.
SECTION 2.04. Prohibition Against Encumbrance or Sale. The Lessee and the
Lessor will not create or suffer to be created any mortgage, pledge, lien, charge or encumbrance
upon the Facility except Permitted Encumbrances. The Lessee and the Lessor will not sell or
otherwise dispose of the Facility or any property essential to the proper operation of the Facility
except as otherwise provided herein. Notwithstanding anything to the contrary herein contained,
the Lessee may assign, transfer or sublease any and all of the Facility or its other rights
hereunder, provided that (a) the rights of any.. assignee, transferee or sublessee shall be
subordinate to all rights of the Lessor hereunder, (b) no such assignment, transfer or sublease
shall relieve the Lessee of any of its obligations hereunder, (c) the assignment, transfer or
sublease shall not result in a breach of any covenant of the Lessee contained in any other Section
hereof, or in the Tax Certificate, (d) any such assignment, transfer or sublease shall by its terms
expressly provide that the fair rental value of the Facility for all purposes shall be first allocated
to this Facility Lease, as the same may be amended from time to time before or after any such
assignment, transfer or sublease and (e) no such assignment, transfer or sublease shall confer
upon the parties thereto any remedy which allows reentry upon the Facility unless concurrently
with granting such remedy the same shall be also granted hereunder by an amendment to this
Facility Lease which shall in all instances be prior to and superior to any such assignment,
transfer or sublease.
SECTION 2.05 Liens. In the event the Lessee shall at any time during the term
hereof cause any improvements to the Facility to be constructed or materials to be supplied in or
upon or attached to the Facility, the Lessee shall payor cause to be paid when due all sums of
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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 Lessee in, upon, about or
relating to the Facility and shall keep the Facility free of any and all liens against the Facility or
the Lessor's interest therein. In the event any such lien attaches to or is filed against the Facility
or the Lessor's interest therein, and the enforcement thereof is not stayed or if so stayed such stay
thereafter expires, the Lessee shall 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. 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 Lessee shall forthwith pay and discharge or cause to be paid and discharged such
judgment.
SECTION 2.06 Substitution or Removal of Facilitv.
(a) The Lessee and the Lessor may amend this Facility Lease to either
substitute alternative real property and/or improvements (the "Substituted Property") for the
property comprising the Facility and/or to remove real property (including undivided interests
therein) or improvements from the definition of Facility ("Removal"), in each case upon
compliance with all of the conditions set forth in subsection (b). After a Substitution or
Removal, the part of the Facility for which the Substitution or Removal has been effected shall
be released from the leasehold hereunder.
(b) No Substitution or Removal shall take place hereunder until the Lessee
delivers to the Lessor the following:
(1) A Certificate of the Lessee containing a description of all or part of
the Facility to be released and, in the event of a Substitution, a description of the Substituted
Property constituting the Substitution;
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(2) A Certificate of the Lessee stating that the annual fair rental value
of the Facility after a Substitution or Removal, in each year during the remaining term of this
Facility Lease, is at least equal to the maximum annual Base Rental Payments and Additional
Rental Payments attributable to the Facility during the remaining term of this Facility Lease.
Annual fair rental value shall be determined by the Lessee on the basis of an appraisal of the
Facility after said Substitution or Removal conducted by a member of the American Institute of
Real Estate Appraisers or the American Society of Appraisers designated by the Lessee (or on
such other basis and with such other evidence of annual fair rental value as may be approved by
the Lessor in its discretion);
(3) An opinion of legal counsel to the effect that the Facility Lease and
Site Lease amendment containing the Substitution or Removal have been duly authorized,
executed and delivered by the Lessee and constitute the valid and binding obligations of the
Lessee enforceable in accordance with their terms;
(4) In the event of a Substitution, a policy of title insurance covering
o the Substituted Property in an amount at least equal to the proportionate share of the Base Rental
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Payments and Additional Rental Payments represented by the Substitution, insuring the Lessor's
interest in the Substituted Property (except any portion thereof which is not real property) subject
to Permitted Encumbrances;
(5) In the event of a Substitution, an opinion of the attorney of the
Lessee or endorsement by a title company acceptable to the Lessor to the effect that the
exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere
with the beneficial use and occupancy of the Substituted Property described in such policy by the
Lessee for the purposes of leasing or using the Substituted Property;
(6) An Opinion of Counsel nationally recognized as having expertise
in the exemption of interest from gross income under the Code that the Substitution or Removal
does not cause the interest with respect to the Proceeds Bondsto be includable in gross income of
the Owners thereof for federal income tax purposes;
(7) A Certificate of the Lessee stating that the Lessee has complied
with the covenants contained in subsections (1) and (2) of Section 6.03(a) hereof with respect to
the Substituted Property; and
(8) Evidence that the Lessee has delivered to the Lessor copies of the
certificates and appraisal described in subsections (1) and (2) above.
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SECTION 2.07 Consttuction. Acquisition and Installation of the Project:
Construction Contracts.
(a) The Lessee hereby agrees to cause the Project to be constructed, acquired
and installed as agent of the Lessor. The Lessee shall enter into contracts and provide for, as
agent of the Lessor, the complete construction, acquisition and installation of the Project. The
Lessee hereby agrees that it will cause the construction, acquisition and installation of the Project
to be diligently performed in accordance with the terms and conditions of this Facility Lease.
(b) All construction contracts shall be let to the lowest responsible bidder at a
fixed price subject to increase only for allowable extra work, change orders approved by Lessee,
and damages or delays authorized by the laws of the State. Lessee shall not approve any change
orders resulting in an increase in Project Costs without having funds committed for the increased
Project Costs.
SECTION 2.08 Project Account.
(a) The Lessor hereby agrees to establish a Project Account for the benefit of
the Lessee, and the Lessee, pursuant to resolution previously adopted in form substantially
similar to Exhibit C, hereby agrees to utilize the Project Account, as the agent of the Lessor, to
construct, acquire and install the Project, subject to the covenants, agreements, provisions and
conditions herein.
(b) Moneys in the Project Account shall be disbursed solely upon receipt by
o the Lessor of invoices documenting, to the satisfaction of the Lessor, that the Lessee, acting as
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agent for the Lessor, has incurred costs that constitute both reasonable and necessary components
of the Project and which are consistent with the cost categories, amounts and requirements
described in Exhibit D hereto; provided, however, that no disbursements shall be approved until
and unless the Lessee has complied with the conditions precedent to disbursement set forth in
Exhibit E hereto, and, no invoice shall be dated prior to the January 29, 2004.
(c) The Lessor shall encumber an amount equal to the Project Amount in the
Project Account and make such amounts available to the Lessee as provided herein. Funds in the
Project Account paid to Lessee ("Disbursed Funds") plus funds not yet paid to Lessee
("Undisbursed Funds") shall together equal the Project Amount.
(d) Lessee must both: (i) begin Project construction no later than twelve
months after October 30, 2003, and (ii) submit invoices to the Lessor for the entire Project
Amount no later than February 17, 2007. If the Lessee fails to meet either of these conditions,
the Lessor may withhold any and all undisbursed funds in the Project Account pursuant to
Section 2.10 herein.
(e) Notwithstanding any contrary provisions of this Facility Lease or any other
documents, under no circumstances will the Lessor be obligated to make disbursements in excess
of the lesser of (i) the actual Project Costs incurred in connection with the completion of the
Project or (ii) two million five hundred fifty thousand dollars ($2,550,000).
(f) The Lessee agrees to pay any and all costs connected with the Project,
including, without limitation, any and all Project Costs as defined in the Act exceeding the
Project Amount, and the Lessee shall not be relieved of its obligation even if the Lessor reduces
the Project Amount pursuant to any provision hereunder.
SECTION 2.09 Disbursement of Project Amount. Upon receipt of a
written request for disbursement, the Lessor will disburse moneys in the Project Account to the
Lessee no more than once a month and only .after specific compliance with all Exhibit E
conditions precedent and only after the Lessee presents evidence that a Project Cost has been
incurred. All requests for payment shall be accompanied by information and documentation as
may be required by the Lessor to determine the amount of Project funds to be disbursed. In
addition, all requests for payment shall be accompanied by a certification by the Lessee that the
Project funds so requested are for eligible Project Costs as defined in the Act and this Facility
Lease; are incurred in the amounts and for the purposes represented; and that the work or
materials for which payment has been requested are satisfactory. The Lessor will provide the
Lessee with a description of the documentation required for payment. Further, not more than
ninety percent (90%) of each invoice payable from the Project Amount designated for
construction shall be disbursed until the Lessor receives a recorded notice of completion for the
Project or other evidence satisfactory to the Lessor; and the Lessee has met all conditions
precedent to final disbursement set out in Exhibit E; provided that if the Lessee demonstrates to
the satisfaction of the Lessor that the Lessee is obliged by law to make payments to certain
construction contractors of one hundred percent (100%) of invoiced amounts or to establish a
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retention fund for final payment to certain contractors, the Lessor shall disburse Project funds in
o the amount required by law.
Each disbursement request shall specify one or more of the following for costs
included in the disbursement request:
(1) Lessee previously paid the costs and is requesting reimbursement;
(2) Lessee will pay the costs directly upon receipt of funds from the Lessor; or
(3) Lessor is requested to pay the disbursement directly to the party owed the
funds instead of Lessee.
SECTION 2.10 Withholdine: of Proiect Amount
(a) The Lessor may withhold all or any portion of the Project Amount in the
event that:
(1) The Lessee has substantially violated any of the terms, provisions,
conditions or commitments of this Facility Lease, or if an Event of Default has occurred; or
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(2) The Lessee is unable to demonstrate, to the satisfaction of the Lessor
the ability to complete the Project or to maintain adequate and timely progress toward completion
thereof.
(b) In the event that any portion of the Project Amount is withheld from the
Lessee, the Lessor shall notify the Lessee of the reasons and advise the Lessee that the Lessee has
thirty (30) days in which to remedy the failure or violation.
(c) If any portion of the Project Amount is withheld pursuant to this section,
the Lessee remains obligated to repay the entire Project Amount, but to the extent applicable, the
Lessee may request that the withheld amount be applied as a prepayment pursuant to Section
5.05.
ARTICLE ill
TERM OF THE FACIUTY LEASE
SECTION 3.01. Commencement and Termination of the Facility Lease: Vestine:
of Title.
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(a) The term of this Facility Lease shall commence on the Effective Date, and
shall end on the Expiry Date, unless the Expiry Date is extended or is sooner terminated as
hereinafter provided. If on the Expiry Date the rental payable hereunder shall not be fully paid,
or if the rental payable hereunder shall have been abated at any time and for any reason, then the
term of this Facility Lease shall be extended until ten days after the rental payable hereunder shall
be fully paid, except that the term of this Facility Lease shall in no event be extended beyond
August 1, 2034, the maximum expiry date. If prior to the Expiry Date, the rental payable
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hereunder shall be fully paid in accordance with the terms of the Facility Lease, the term of this
Facility Lease shall end ten days thereafter or ten days after written notice by the Lessor to the
Lessee to the effect that the rental payable hereunder has been fully paid, whichever is earlier,
and this Facility Lease shall thereupon terminate.
The Lessee shall take possession of the Facility as soon as the Project is
substantially complete and the obligation of the Lessee to pay Base Rental Payments and
Additional Rental Payments shall commence on the Effective Date, subject to the limitations set
forth in Section 5.04 hereof.
(b) Upon the termination or expiration of this Facility Lease (other than as
provided in Article X), full and complete title to the Facility shall vest in the Lessee, free of any
leasehold or other encumbrance established hereunder. Upon such termination or expiration, the
Lessor shall execute such conveyances, deeds and other documents as may be necessary or
appropriate to evidence such jurisdiction and vesting of record.
ARTICLE IV
USE OF PROCEEDS; TAX COVENANTS; CONTINUING DISCLOSURE
SECTION 4.01. Use of Proiect Amount. The parties hereto agree that the
Lessor shall apply funds from the Project Amount as follows:
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(1) to the Project Account in the amount of two million four hundred
forty-four thousand five hundred dollars ($2,444,500); and
(2) to the Capitalized Interest Account in the amount of one hundred
five thousand five hundred dollars ($105,500).
SECTION 4.02 Tax Covenant. The Lessee recognizes that the Project
Amount consists of proceeds of a tax-exempt financing program. In order to maintain the tax-
exempt status of the financing, the Lessee will not take any action, or fail to take any action, if
such action or failure to take such action would adversely affect the exclusion from gross income
of the interest on the Proceeds Bonds, and the Lessee specifically agrees to comply with all terms
and conditions contained in the Tax Certificate. The Lessee shall provide annual certification of
its compliance with the Tax Certificate.
The provisions of this Section 4.02 shall survive the discharge of the Lessor's obligations
hereunder and shall apply to any trustee or other successor or assignee described in Section 9.01.
SECTION 4.03 Continuing Disclosure. Upon the request of the Lessor, the
Lessee covenants to furnish certain financial and operating data pertaining to the Lessee that may
be required to either: (i) enable the Lessor to issue any Secured Bonds; or (ii) enable any
underwriter of any Secured Bonds to comply with Rule 15c2-12(b)(5) of the Securities and
o Exchange Commission.
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ARTICLE V
RENTAL PAYMENTS
SECTION 5.01. Rental Pavrnents. The Lessee agrees to pay to the Lessor, its
successors or assignees, without deduction or offset of any kind, as rental for the use and
occupancy of the Facility, the following amounts at the following times:
(a) Base Rental. The Lessee shall pay to the Lessor rental hereunder as Base
Rental Payments with respect to the Facility at the times and in the amounts set forth in the Base
Rental Payment schedule attached hereto as Exhibit F and made a part hereof.
(1) The Lessee shall deposit with the Lessor not later than each
February 1 and August 1, commencing August 1, 2004, the Base Rental Payments due in the then
current fiscal year (as set forth in Exhibit F) and the same shall be held by the Lessor as security
for the Base Rental Payments due on such dates.
(2) Base Rental Payments shall consist of both an interest component
and a principal component based upon the Project Amount, but Lessee shall receive a credit
against any Base Rental Payment due and payable hereunder for the actual interest earned by the
Lessor up to the rate of two and ninety-two hundredths percent (2.92%) on the undisbursed funds
in the Project Amount. The Lessee may choose to prepay the Base Rental Payments pursuant to
Section 5.05(a).
(b) Additional Rental Payments. The Lessee shall pay as Additional Rental
Payments as rental hereunder in addition to the Base Rental Payments, to the Lessor as
hereinafter provided:
(1) a payment of an annl!lli fee due with the principal payment each year
during the term of this Facility Lease in an amount equal to three-tenths of one percent (.3%) of the
outstanding principal component of the remaining Base Rental Payments as of the first day of the
month prior to the month in which the principal payment is due as set forth in Exhibit F; and
(2) amounts in each year as shall be required by the Lessor for the
payment of extraordinary expenses of the Lessor in connection with an Event of Default, the
enforcement of this Facility Lease or any amendments thereto requested by the Lessee, including all
expenses, fees of accountants, trustees, attorneys, litigation costs, insurance premiums, taxes,
assessments (if any), and all other extraordinary costs of the Lessor. Extraordinary expenses and
extraordinary costs are those expenses and costs related to this Facility Lease in excess of ordinary
and customary expenses incurred as part of the annual fee pursuant to Section 5.01(b)(1). Such
additional payments shall be billed by the Lessor from time to time, together with a statement
certifying that the amount so billed has been paid by, or will be paid by, the Lessor for one or more
of the items above described, or that such amount is then payable by the Lessor for such items.
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(3) Lessee shall deposit the amount required pursuant to (1) above with
the Lessor not later than August 1 of each year; if billed pursuant to (2) above, Lessee shall deposit
the amount billed within thirty (30) days after receipt of the bill by the Lessee. Any amount billed
and not deposited within thirty (30) days of billing or due date shall accrue interest at the lesser of
twelve percent (12%) per annum or the maximum rate permitted by law.
(4) The Lessor may issue bonds and may enter into leases to finance
facilities other than the Project. Any taxes levied against the Lessor with respect to real property
other than the Facility, or the fees of any trustee or paying agent under any resolution securing
bonds of the Lessor and any other expenses directIy attributable to any facilities other than the
Facility shall not be included in the administrative costs of the Facility and shall not be paid from
the Additional Rental Payments payable hereunder. The Trustee may conclusively rely upon a
written certificate of the Lessor in making any determination that costs are payable as Additional
Rental Payments hereunder, and shall not be required to make any investigation as to whether or
not the items so requested to be paid are expenses of operation of the Facility.
(c) Consideration. Such payments of Base Rental Payments and Additional
Rental Payments for each Lease Year or portion thereof during the term of this Facility Lease shall
constitute the total rental for such Lease Year or portion thereof and shall be paid or payable by the
Lessee for and in consideration for the right of the use and possession of, and the continued quiet
use and enjoyment of, the Facility. The parties hereto have agreed and determined that the annual
fair rental value of the Facility is not less than the maximum Base Rental Payments and Additional
Rental Payments payable hereunder in any year.
(d) PaYment: Credit. Each installment of Base Rental Payments and
Additional Rental Payment payable hereunder shall be paid in lawful money of the United States
of America to or upon the order of the Lessor at such place as the Lessor shall designate. Any
such installment of rental accruing hereunder which shall not be paid when due shall remain due
and payable until received by the Lessor, except as provided in Section 5.04 hereof, and to tlie
extent permitted by law shall bear simple interest at the rate of the lesser of (i) twelve percent
(12%) per annum or (ii) the maximum rate authorized by law from the date when the same is due
hereunder until the same shall be paid. Notwithstanding any dispute between the Lessee and the
Lessor, the Lessee shall make all rental payments when due, without deduction or offset of any
kind, and shall not withhold any rental payments pending the final resolution of any such dispute.
In the event of a determination that the Lessee was not liable for said rental payments or any
portion thereof, said payments or excess of payments, as the case may be, shall, at the option of
the Lessee, be credited against subsequent rental payments due hereunder or be refunded at the
time of such determination.
(e) Capitalized Interest Account. In consideration for the agreements and
covenants of the Lessee herein, upon the date of the first disbursement pursuant to Exhibit E, the
amount of one hundred five thousand five hundred dollars ($105,500), which is equal to the
maximum aggregate amount of the Base Rental Payments due hereunder through and including
July 31, 2006, shall be held by the Lessor and applied to payment of certain of the Base Rental
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Payments due from the Lessee, as shown in the Rental Payment schedule attached hereto as
o Exhibit F and made a part hereof.
(1) A one-time Facility Lease origination fee in the amount of twenty-one
thousand six hundred seventy-five dollars ($21,675) shall be due and payable by the Lessee on or
before the first disbursement and shall be payable from, the Project Account.
(g) All payments hereunder shall be payable by the Lessee in immediately
available funds which constitute lawful money of the United States of America. Such payments
shall be unsecured, and amounts for the payment thereof shall be paid to, or upon the order of,
the Lessor as set forth in this Article.
SECTION 5.02. Annual Budgets. The Lessee covenants to take such action as
may be necessary to include all Base Rental Payments and Additional Rental Payments due under
this Facility Lease in its Operating Budget for each fiscal year commencing after the Effective
Date and to make all necessary appropriations for such Base Rental Payments and Additional
Rental Payments. 10 addition, to the extent permitted by law, the Lessee covenants to take such
action as may be necessary to amend or supplement the budget appropriations for payments
under this Facility Lease at any time and from time to time during any Fiscal Year in the event
that the actual Base Rental Payments and Additional Rental Payments to be paid in any fiscal
year exceeds the appropriations then contained in the Lessee's Operating Budget.
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SECTION 5.03. Application of Rental Payments. All Base Rental Payments
received shall be applied first to the interest component of Base Rental Payments, then to the
principal component of Base Rental Payments due hereunder (including any prepayment
premium components) and thereafter to all Additional Rental Payments due hereunder, but no
such application of any payments which are less than the total rental due and owing shall be
deemed a waiver of any default hereunder.
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SECTION 5.04. Rental Abatement. Except to the extent of, (i) amounts
received in respect of use and occupancy insurance, and (ii) amounts, if any, otherwise legally
available to the Lessee for payments due hereunder during any period in which, by reason of
material damage, destruction, title defect or condemnation there is substantial interference with
the use and possession by the Lessee of any portion of the Facility, rental payments due
hereunder with respect to the Facility shall be abated to the extent that the annual fair rental value
of the portion of the Facility in respect of which there is no substantial interference is less than
the annual Base Rental Payments and Additional Rental Payments, in which case rental payments
shall be abated only by an amount equal to the difference. 10 the event the Lessee shall assign,
transfer or sublease any or all of the Facility or other rights hereunder, as permitted by
Section 2.04 hereof, for purposes of determining the annual fair rental value available to pay
Base Rental Payments and Additional Rental Payments, annual fair rental value of the Facility
shall first be allocated to this Facility Lease as provided in subsection (d) of Section 2.04. Any
abatement of rental payments pursuant to this Section shall not be considered an Event of
Default. The Lessee waives the benefits of Civil Code sections 1932(2) and 1933(4) and any and
all other rights to terminate this Facility Lease by virtue of any such interference and this Facility
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Lease shall continue in full force and effect. Such abatement shall continue for the period
commencing with the date of such damage, destruction, title defect or condemnation and ending
with the substantial completion of the work of repair or replacement of the portions of the
Facility so damaged, destroyed, defective or condemned.
In the event that rental is abated, in whole or in part, pursuant to this Section
5.04 due to damage, destruction, title defect or condemnation of any part of the Facility and the
Lessee is unable to repair, replace or rebuild the Facility from the Net Proceeds, if any, the
Lessee agrees to promptly apply for and to use its best efforts to obtain any appropriate State
and/or federal disaster relief in order to obtain funds to repair, replace or rebuild the Facility.
SECTION 5.05. Prepavrnent of Base Rental Payments.
(a) Lessee may at any time request Lessor's approval for Lessee to prepay all
or a portion of the principal component of Base Rental Payments. A request for reduction in the
Project Amount is a request for a prepayment. The Lessor shall promptly respond to any such
request, and shall make every effort to accommodate the request, subject to the prepayment
restrictions of the Secured Bonds.
(b) Notwithstanding subsection (a), Lessee shall be authorized to prepay all or
a portion of the principal amount of Base Rental Payments, as follows: (i) If the prepayment date
is on or after ten years after the Effective Date but prior to eleven years after the Effective Date,
the prepayment amount shall be one hundred two percent (102%) of the outstanding principal
amount; (ii) if the prepayment date is on or after eleven years after the Effective Date, but prior to
twelve years after the Effective Date, the prepayment amount shall be one hundred one percent
(101 %) of the outstanding principal amount; and (iii) if the prepayment date is on or after twelve
years after the Effective Date, the prepayment amount shall be one hundred percent (100%) of
the outstanding principal amount, without premium.
(c) Notwithstanding the prepayment provisions of this section, the Lessee
may, on any date, provide for the legal defeasance of the amount outstanding hereunder by
providing amounts sufficient to pay, in full, Base Rental Payments and Additional Payments
when due, until the dates set forth in subsection (b).
(d) Extraordinary Prepavrnent. Subject to the provisions of Section 7.01, the
Lessee may prepay, from Net Proceeds, all or any portion of the components of Base Rental
Payments relating to any portion of the Facility then unpaid on any date, in whole or in part, so
that the aggregate annual amounts of principal components of Base Rental Payments which shall
be payable after such prepayment date shall each be as nearly proportional as practicable to the
aggregate annual amounts of principal components of Base Rental Payments with respect to the
portion of the Facility so prepaid
SECTION 5.06. Obligation to Make Rental Payments. The agreements and
covenants on the part of the Lessee contained herein shall be deemed to be and shall be construed
to be duties imposed by law and it shall be the duty of each and every public official of the
Lessee to take such action and do such things as are required by law in the performance of the
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official duty of such officials to enable the Lessee to carry out and perform the agreements and
o covenants contained herein agreed to be carried out and performed by the Lessee.
THE OBUGATION OF THE LESSEE TO MAKE BASE RENTAL
PAYMENTS AND ADDmONAL RENTAL PAYMENTS DOES NOT CONSTlTUTE AN
OBUGATION OF THE LESSEE FOR WlllCH THE LESSEE IS OBUGATED TO LEVY OR
PLEDGE ANY FORM OF TAXATION OR FOR WlllCH THE LESSEE HAS LEVIED OR
PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBUGATION
TO MAKE BASE RENTAL PAYMENTS AND ADDmONAL RENTAL PAYMENTS
CONSTITUTES AN INDEBTEDNESS OF THE LESSEE, THE COUNTY OF SAN
BERNARDINO, THE STATE OF CALIFORNIA OR ANY POUTICAL SUBDMSION
THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATIJTORY DEBT
UMITATION OR RESTRICTION.
ARTICLE VI
MAINTENANCE; TAXES;
INSURANCE AND OTHER CHARGES
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SECTION 6.01. Maintenance of the Facility bv the Lessee. The Lessee agrees
that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve
and keep the Facility and every portion thereof in good repair, working order and condition and
that it will from time to time make or cause to be made all necessary and proper repairs,
replacements and renewals. The Lessor shall have no responsibility in any of these matters or for
the making of additions or improvements to the Facility.
SECTION 6.02. Taxes. Other Governmental Charges and Utility Charges. The
parties hereto contemplate that the Facility will be used for public purposes by the Lessee and,
therefore, that the Facility will be exempt from all taxes presently assessed and levied wiih
respect to real and personal property, respective!y. In the event that the use, possession or
acquisition by the Lessee or the Lessor of the Facility is found to be subject to taxation in any
form, the Lessee will pay during the term hereof, as the same respectively become due, all taxes
and governmental charges of any kind whatsoever that may at any time be lawfully assessed or
levied against or with respect to the Facility and any other property acquired by the Lessee in
substitution for, as a renewal or replacement of, or a modification, improvement or addition to,
the Facility, as well as all gas, water, steam, electricity, heat, power, air conditioning, telephone,
utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of
the Facility; provided, that with respect to any governmental charges or taxes that may lawfully
be paid in installments over a period of years, the Lessee shall be obligated to pay only such
installments as are accrued during such time as this Facility Lease is in effect.
SECTION 6.03. Insurance.
(a) The Lessee shall procure or cause to be procured and maintain or cause to
be maintained throughout the term hereof insurance against the following risks in the following
o respective amounts:
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(1) Insurance against loss or damage to the Facility caused by fire,
lightning or earthquake, with an extended coverage endorsement covering the risk of vandalism and
malicious mischief, sprinkler system leakage and boiler loss; provided that earthquake coverage
shall be required only if: (i) available from reputable insurers at commercially reasonable rates; and
(ii) the Facility cannot satisfy any earthquake standards which may be imposed by any rating agency
then rating the Secured Bonds. In the event the Lessee is unable to obtain earthquake coverage on
any Facility which it previously has maintained, it will promptly so notify the Lessor. The
insurance described in this paragraph (1) shall be in an amount equal to the lesser of (i) replacement
cost (without deduction for depreciation) of improvements located or to be located on the Facility
or (ii) the remaining unpaid principal amount owed under this Facility Lease outstanding plus the
amount of use and occupancy coverage described in paragraph (2) below, except that such
insurance may be subject to deductible clauses of not to exceed the first one hundred thousand
dollars ($100,000) subject to Lessor's approval of the amount of anyone loss {or ten percent (10%)
of the amount insured, in the case of earthquake}. Insurance described in this paragraph (1) and in
paragraph (2) below may be in the form of a policy which covers the Facility and one or more
additional parcels of real property insured by the Lessee; provided that the amount of coverage
available thereunder shall be at least equal to the cumulative replacement values of the Facility and
any other such property which is the subject of a lease, installment purchase or other financing
arrangement ("Financed Property'') for which bonds, certificates of participation or other
obligations shall have been issued ("Obligations'') plus the amount of use and occupancy coverage
required by paragraph (2) below; in the event the Lessee elects to obtain insurance for the Facility
and one or more additional parcels of real property and the amount of the insurance proceeds
available to pay all claims thereunder is not sufficient to cover the replacement values of all such
properties, then any such proceeds shall be used first to rebuild or repair the Facility and all
Financed Properties or to repay all Obligations and the Secured Bonds. The Lessor shall be named
as loss payee.
(2) Use and occupancy insurance against loss, total or partial, of the uSe
and occupancy of the Facility as a result of any of tile hazards covered by the insurance required by
paragraph (1) hereof, in an amount sufficient to pay the Base Rental Payments attributable to the
Facility for a twenty-four (24) month period; provided, that the amount of such insurance need not
exceed the total remaining Base Rental Payments attributable to the Facility; provided further, that
such insurance may be part of a policy permitted under paragraph (1) above, which policy may
provide that insurance proceeds paid for coverages contemplated by paragraph (1) above may
reduce amounts payable under coverage required by this paragraph (2), and vice-versa; the Lessee
may obtain use and occupancy insurance covering the Facility as well as other parcels of property
owned by the Lessee, provided that the cumulative amount thereof is at least equal to the
cumulative amount of use and occupancy insurance required by this paragraph (2) and any
agreements relating to Financed Property in respect of which Obligations are outstanding. The
Lessor shall be named as an additional insured.
(3) Workers' compensation insurance covering all employees working
in or on the Facility, in the same amount and type as other workers' compensation insurance
o maintained by the Lessee for similar employees doing similar work; and the Lessee shall also
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require any other person or entity working in or on the Facility to carry the foregoing amount of
workers' compensation insurance; any such policy maintained by the Lessee may provide for a
deductible so long as the deductible is covered by a self-insurance or self-funding method or plan
permitted by this Section.
(4) A standard, commercial general liability insurance policy or policies
in protection of the Lessor, the Lessee and their directors, officers and employees and the Trustee,
indemnifying and defending such parties against direct or contingent loss or liability for damages
for personal injury, death or property damage related to the possession, operation or use of the
Facility, with a minimum combined single limit of one million dollars ($1,000,000) for personal
injury or death of one or more persons, and for property damage, in each accident or event (subject
to a deductible clause of not to exceed one hundred thousand dollars ($100,000) or such greater
amount as may be covered by any self-insurance or self-funding method or plan permitted by this
Section). The Lessor shall be named as an additional insured.
The Lessee shall collect, adjust and receive all moneys which may become due
and payable under any policies contemplated by paragraphs (1) and (2) above, may compromise
any and all claims thereunder and, subject to the provisions of Section 7.01 hereof, shall transfer
such Net Proceeds to the Lessor for application as provided herein. Neither the Lessor nor the
Trustee shall be responsible for the sufficiency of any insurance herein required. The Lessor and
the Trustee shall be fully protected in accepting payment on account of such insurance or any
adjustment, compromise or settlement of any loss agreed to by the Lessee.
o (b) Notwithstanding the provisions of Section 6.03(a), as an alternative to
providing the insurance required by paragraphs (1), (3) and (4) of Section 6.03(a), the Lessee
may provide a self-insurance or self-funding method or plan of protection for any part or all of
the requirements for such insurance and, through such a plan or method, provide for deductible
or retention amounts greater than those contemplated by paragraphs (1), (3) or (4) of Section
6.03(a). Any such self-insurance or self-funding maintained by the Lessee pursuant to tlie
foregoing Sections shall comply with the following terms:
(1) The self-insurance or self-funding program shall be approved by an
Insurance Consultant;
(2) The self-insurance or self-funding program shall include a
reasonable claims reserve fund out of which each self-insured or self-funded claim and any
deductible amount authorized by paragraphs (1), (3) and (4) of Section 6.03(a) shall be paid; prior
to the end of the first Lease Year, the adequacy of each such fund shall be evaluated by an Insurance
Consultant who shall also evaluate the appropriateness of the reserving and funding methods and
practices employed in establishing and maintaining each such fund; any deficiencies in any claims
reserve fund shall be remedied in accordance with the recommendation of the Insurance Consultant
and any recommended changes in the reserving or funding methods or practices shall be adopted in
accordance with the recommendation of the Insurance Consultant; after the first Lease Year, at least
annually and not later than July 1 of each year that is a Lease Year, the Lessee shall provide to the
o Lessor, a report by either the independent accountants which provide the audit report on the
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Lessee's annual audited financial statements or by an Insurance Consultant, as selected by the
Lessee, as to the appropriateness of the reselVing and funding methods and practices employed by
the Lessee in funding the claims funds, and any changes recommended by the report shall promptly
be implemented by the Lessee;
(3) The claims reselVe fund shall be held in a separate fund by the
Lessee or by the self-insurance program; and
(4) In the event the self-insurance or self-funding program shall be
discontinued, the soundness of its claim and deductible or retention reselVe fund, as determined by
the Insurance Consultant, shall be maintained.
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(c) Any insurance policy issued pursuant to paragraph (1) of Section 6.03(a)
shall be so written or endorsed as to make losses, if any, payable to the Lessee and the Lessor as
their respective interests may appear and the Net Proceeds of the insurance required by that
paragraph shall be applied as provided in Section 7.01 hereof. The net proceeds, if any, of the
insurance policy described in that paragraph shall, to the extent that such proceeds are paid on
account of loss or damage to the Facility, be payable and applied as described in Section 7.01.
The net proceeds, if any, of the insurance policy described in paragraph (2) of Section 6.03(a)
shall, to the extent that such proceeds relate to the use and occupancy of the Facility, be payable
to the Lessor. Each insurance policy provided for in the Facility Lease shall contain a provision
to the effect that the insurance company shall not cancel the policy or modify it materially and
adversely to the interests of the Lessor without first giving written notice thereof to the Lessor at
least sixty (60) days in advance of such intended cancellation or modification.
(d) The Lessee shall provide copies of policy endorsement, or in the case of
self-insurance, provide the insurance report described in section 6.03 (b) (2) and file a Certificate
of the Lessee with the Lessor, not later than July 1 of each year commencing July 1, 2004,
certifying that the insurance required by this Section is in full force and effect and that the Lessor
is named as loss payees and/or additional insured on each insurance policy which this Facility
Lease requires to be so endorsed.
SECTION 6.04. Advances. In the event the Lessee shall fail to maintain the full
insurance coverage required by Section 6.03 hereof or shall fail to keep the Facility in good
repair and operating condition, the Lessor may (but shall be under no obligation to) purchase the
required policies of insurance and pay the premiums on the same or may make such repairs or
replacements as are necessary and provide for payment thereof; and all amounts so advanced
therefor by the Lessor shall become Additional Rental Payments, which amounts the Lessee
agrees to pay within thirty (30) days of a written request therefor, together with interest thereon at
the lesser of (i) twelve percent (12%) per annum; or (ii) the maximum rate allowed by law.
SECI'lON 6.05. Title Insurance. The Lessee covenants and agrees to deliver or
cause to be delivered to the Lessor upon recordation of this Facility Lease and the Site Lease, a
CTLA policy or policies with appropriate endorsements with respect to the Facility with liability
() in the aggregate amount equal to the Project Amount. Such policy or policies shall name the
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Lessor as the insured and shall insure the Lessor's interests in the Facility subject only to such
exceptions as do not materially affect the Lessee's right to the use and occupancy of the Facility.
Further, an updated title policy with standard endorsement 116 shall be provided as a condition
precedent to final disbursement.
ARTICLE vn
DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION
SECTION 7.01. Damal!e. Destruction. Title Defect and Condemnation: Use
of Net Proceeds.
(a) If prior to the termination of the term hereof (i) the Facility or any other
improvements in or on the Facility are damaged (each of which is hereinafter called "Damaged
hnprovements") by a peril covered by a policy of insurance described in Section 6.03(a)(1)
hereof (an "Insured Peril"); or (ii) title to, or the temporary use of, the Facility or any portion
thereof or the estate of the Lessee or the Lessor in the Facility or any portion thereof is defective
or shall be taken under the exercise of the power of eminent domain by any governmental body
or by any person or firm or corporation acting under governmental authority, then the Lessee and
the Lessor will cause the Net Proceeds of any insurance claim (other than rental interruption
insurance pursuant to Section 6.03(a)(2) hereof which shall be directly transferred to the Lessor
for deposit pursuant to Section 6.03 hereof) or condemnation award to be transferred to the
Lessor and applied as follows:
(1) Net Proceeds Exceeding Costs. Within one hundred twenty (120)
days of the date of said Insured Peril, the Lessee shall obtain written estimate(s) of the (i) cost of the
repair, replacement and reconstruction of the Damaged hnprovements (collectively referred to
herein as the "Reconstruction"), and (ii) Net Proceeds available to pay such costs. Copies of such
estimate(s) shall be provided to the Lessor. If the one hundred twenty (120) day period is
insufficient to obtain said estimates, the period may be reasonably extended by the Lessee upon tlie
approval of the Lessor. If the Net Proceeds (not inc.luding proceeds of any policy of title insurance
or condemnation award received by the Lessor in respect of the Facility) exceed the estimated costs
of Reconstruction, the Damaged hnprovements shall be repaired, replaced and reconstructed to the
same or better quality as existed before the damage occurred. The Lessee shall commence and
manage the Reconstruction and shall complete the Reconstruction as soon as reasonably possible
after the occurrence of such damage. Any balance of Net Proceeds remaining after the
Reconstruction has been completed shall be transferred to the Lessor for the payment of unpaid
Base Rental Payments and Additional Rental Payments. Net Proceeds remaining after payment of
the amounts specified in the previous sentence shall be transferred to Lessee.
(2) Costs Exceeding Proceeds. If the estimated costs of Reconstruction
exceed the Net Proceeds (not including proceeds of any policy of title insurance or condemnation
award received by the Lessor in respect of the Facility), the Lessee, in its sole discretion, may elect
to budget and appropriate to the Reconstruction the amount of such excess, and to manage the
Reconstruction as set forth in Section 7.01(a)(5). The Lessee shall exercise this election by written
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notice thereof delivered to Lessor within thirty (30) days after the Lessee obtains the written
estimate( s).
(3) Net Proceeds Sufficient to Prepay All Unpaid Base Rental Payments.
If the Lessee does not exercise the election to reconstruct pursuant to Section 7.01(a)(2) and Net
Proceeds are at least sufficient to prepay all unpaid Base Rental Payments, such Net Proceeds shall
be transferred to the Lessor to prepay such Base Rental Payments. If the Net Proceeds (not
including proceeds of any policy of title insurance or condemnation award received by the Lessor in
respect of the Facility) exceed the amount necessary to prepay the unpaid Base Rental Payments
and any due and owing Additional Rental Payments, the Lessee shall be entitled to the amount of
proceeds remaining after such prepayment.
(4) Net Proceeds Insufficient to Prepav All Unpaid Base Rental
Payments. If the Lessee does not exercise the election to reconstruct pursuant to Section 7.01 (a X2)
and Net Proceeds are insufficient to prepay the unpaid Base Rental Payments hereunder, the Lessee,
in its sole discretion, may elect to budget and appropriate funds to cause the prepayment of the Base
Rental Payments and due and owing Additional Rental Payments and the Net Proceeds, together
with such funds, shall be transferred to the Lessor with directions to apply the proceeds to the
prepayment of the Base Rental Payments and due and owing Additional Rental Payments;
provided, that if the Lessee elects not to appropriate funds for such prepayment, the Lessee shall
apply Net Proceeds (not including proceeds of any policy of title insurance or condemnation award
received by the Lessor in respect of the Facility) to the Reconstruction. If the Lessee, in its sole
discretion, elects to budget or appropriate funds for the prepayment of the unpaid Base Rental
Payments and due and owing Additional Rental Payments, the Lessee shall transfer such funds to
the Lessor for the prepayment of Base Rental Payments and due and owing Additional Rental
Payments.
(5) Management of Reconstruction. If the Facility or any part thereof
becomes Damaged Improvements, the Lessee shall promptly cause, manage and supervise t1ie
Reconstruction.
(b) The proceeds of any policy of title insurance or condemnation award
received by the Lessor in respect of the Facility shall be applied to prepay Base Rental Payments.
ARTICLE vm
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE FACIUfY
SECTION 8.01. Disclaimer of Warranties. THE LESSOR MAKES NO
AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPliED,
AS TO THE VALUE, DESIGN, CONDmON, MERCHANTABIUfY OR FITNESS FOR
PARTICUlAR PURPOSE OR FITNESS FOR USE OF THE FACIUfY, OR WARRANTY
WITH RESPECT THERETO. THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS
NOT A MANUFACTURER OF ANY PORTION OF THE FACIUfY OR A DEALER
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TIlEREIN, THAT TIlE LESSEE LEASES TIlE FACIUTY AS-IS, IT BEING AGREED THAT
ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY TIlE LESSEE. In no
event shall the Lessor or its assignees be liable for any incidental, indirect, special or
consequential damage in connection with or arising out of this Facility Lease or the existence,
furnishing, functioning or the Lessee's use of the Facility as provided hereby.
SECTION 8.02. Use of the Facility. The Lessee will not use, operate or
maintain the Facility improperly, carelessly, in violation of any applicable law or in a manner
contrary to that contemplated hereby. The Lessee shall provide all permits and licenses, if any,
necessary for the use of the Facility. In addition, the Lessee agrees to comply in all respects
(including, without limitation, with respect to the use, maintenance and operation of each portion
of the Facility) with all laws of the jurisdictions in which its operations involving any portion of
the Facility may extend and any legislative, executive, administrative or judicial body exercising
any power or jurisdiction over the Facility; provided, that the Lessee may contest in good faith
the validity or application of any such law or rule in any reasonable manner which does not, in
the opinion of the Lessee adversely affect the estate of the Lessor in and to the Facility or its
interest or rights hereunder.
ARTICLE IX
ASSIGNMENT AND INDEMNIFICATION
SECTION 9.01. Assignment bv Lessor. The parties understand that certain of
the rights of the Lessor hereunder may, at the Lessor's discretion, be assigned to the Trustee.
Accordingly, the Lessee agrees to make all payments due hereunder to the Trustee when so
directed by the Lessor, notwithstanding any claim, defense, setoff or counterclaim whatsoever
(whether arising from a breach hereof or otherwise) that the Lessee may from time to time have
against the Lessor. The Lessee agrees to execute all documents, including notices of assignment
and chattel mortgages or financing statements, which may be reasonably requested by the Lessor
or the Trustee to protect their interests in the Facility during the term hereof.
SECTION 9.02. Assignment by Lessee. This Facility Lease and the interest of
the Lessee in the Facility may not be assigned or encumbered by the Lessee except as permitted
by Section 2.04 hereof.
SECTION 9.03. Indemnification. The Lessee shall, to the full extent permitted
by law, indemnify, protect,hold harmless, save and keep harmless the Lessor and its members,
directors, officers, employees and agents, and the Trustee and any underwriter for the Proceeds
Bonds and Secured Bonds and its respective 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, counsel fees and
expenses as incurred, penalties and interest (collectively, a "Claim"), arising out of or as the
result of entering into the Facility Lease, and the acquisition, construction, operation, use,
condition, or possession of the Facility and any portion thereof, including:
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(1) any accident in connection with the operation, use, condition or
possession of the Facility 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 Lessee or the Lessor;
(2)
operation of the Facility;
patent, trademark or copyright infringement as a consequence of the
(3)
strict liability in tort as a consequence of the operation of the
Facility;
(4) any claim based upon environmental law or regulation relating to the
Facility;
(5) any claim of any nature directly arising from or related to the
Facility, which claim is based upon the operation of the Facility from and after the Effective Date;
(6) the existence, placement, delivery, storage or release of hazardous
materials on the Facility or contamination of property, arising therefrom; and
(7) the Trustee's acceptance or administration of the trusts in connection
with the Proceeds Bonds and Secured Bonds, including performance of the Trustee's duties, to the
extent provided herein and as assigned by the Lessor.
The indemnification arising under this Section 9.03 shall continue in full force
and effect notwithstanding the full payment of all obligations hereunder or the termination hereof
for any reason or the resignation or removal of the Trustee. Any party seeking indemnity
hereunder shall promptly give notice to the Lessee of any claim or liability hereby indemnified
against upon learning of any circumstances giving rise to any such claim or liability. .
ARTICLE X
DEFAULT
SECTION 10.01. Events of Default.
(a) Each of the following events shall constitute an Event of Default under
this Facility Lease and the terms Event of Default and "default" shall mean, whenever they are
used in this Facility Lease, anyone or more of the following events:
(1) The Lessee shall fail to deposit with the Lessor or its assignee any
Base Rental Payment or Additional Rental Payment required to be so deposited by the close of
business on the day such deposit is required pursuant to Section 5.01(a) hereof, provided, that the
failure to deposit any Base Rental Payment abated pursuant to Section 5.04 hereof shall not
constitute an Event of Default; or
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(2) The Lessee shall breach any other terms, covenants or conditions
contained herein, and shall fail to remedy any such breach with all reasonable dispatch within a
period of thirty (30) days after written notice thereof from the Lessor to the Lessee; provided,
however, that if the failure stated in the notice cannot be corrected within such period, then the
Lessor shall not unreasonably withhold its consent to an extension of such time if corrective action
is instituted by the Lessee within such period and is diligently pursued until the default is corrected.
Upon the happening of any of the events specified in subsection (a) or (c) of this
Section (in either case an "Event of Default"), it shall be lawful for the Lessor or its assignee,
subject to the terms of this Facility Lease, to exercise any and all remedies available or granted to
it pursuant to law or hereunder.
(b) The Lessor or its assignee, in addition to all other rights and remedies it
may have at law, shall have the option to do any of the following:
(1) To terminate this Facility Lease in the manner hereinafter provided
on account of default by the Lessee, notwithstanding any retaking of possession or re-letting of the
Facility as hereinafter provided for in subparagraph (2) hereof, and to retake possession of the
Facility. In the event of such termination, the Lessee agrees to surrender immediately possession of
the Facility, without let or hindrance, and to pay the Lessor or its assignee all damages recoverable
at law that the Lessor or its assignee may incur by reason of default by the Lessee, including,
without limitation, any costs, loss or damage whatsoever arising out of, in coMection with, or
incident to any such retaking possession of the Facility. Neither notice to pay rent nor to deliver up
possession of the Facility given pursuant to law nor any proceeding in unlawful detainer, or
otherwise, brought by the Lessor or its assignee for the purpose of obtaining possession of the
Facility nor the appointment of a receiver upon initiative of the Lessor or its assignee to protect the
Lessor's or its assignee's interest under this Facility Lease shall of itself operate to terminate this
Facility Lease, and no termination of this Facility Lease on account of default by the Lessee shall be
or become effective by operation of law or acts of the parties hereto, unless and until the Lessor or
its assignee shall have given written notice to the Lessee of the election on the part of the Lessor or
its assignee to terminate this Facility Lease.
(2) Without terminating this Facility Lease, (i) to collect each
installment of rent as it becomes due and enforce any other term or provision hereof to be kept or
performed by the Lessee and/or (ii) to exercise any and all rights to retake possession of the Facility.
In the event the Lessor or its assignee does not elect to terminate this Facility Lease in the manner
provided for in subparagraph (1) hereof, the Lessee shall remain liable and agrees to keep or
perform all covenants and conditions herein contained to be kept or performed by the Lessee and, to
pay the rent to the end of the term of this Facility Lease or, in the event that the Facility is re-let, to
pay any deficiency in rent that results therefrom; and further agrees to pay said rent and/or rent
deficiency punctually at the same time and in the same manner as hereinabove provided for the
payment of rent hereunder (without acceleration), notwithstanding the fact that the Lessor or its
assignee may have received in previous years or may receive thereafter in subsequent years rental in
excess of the rental herein specified and notwithstanding any retaking of possession of the Facility
by the Lessor or its assignee or suit in unlawful detainer, or otherwise, brought by the Lessor or its
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assignee for the purpose of obtaining possession of the Facility. Should the Lessor or its assignee
elect to retake possession of the Facility as herein provided, the Lessee hereby irrevocably appoints
the Lessor or its assignee as the agent and attorney-in-fact of the Lessee to re-let the Facility, or any
items thereof, from time to time, either in the Lessor's or its assignee's name or otherwise, upon
such terms and conditions and for such use and period as the Lessor or its assignee may deem
advisable and the Lessee hereby indemnifies and agrees to hold harmless the Lessor or its assignee
from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any
retaking of possession of and re-letting of the Facility by the Lessor or its assignee or its duly
authorized agents in accordance with the provisions herein contained. The Lessee agrees that the
terms of this Facility Lease constitute full and sufficient notice of the right of the Lessor or its
assignee to re-let the Facility in the event of such reentry without effecting a surrender of this
Facility Lease, and further agrees that no acts of the Lessor or its assignee in effecting such
re-letting shall constitute a surrender or termination of this Facility Lease irrespective of the use or
the term for which such re-letting is made or the terms and conditions of such re-letting, or
otherwise, but that on the contrary, in the event of such default by the Lessee the right to terminate
this Facility Lease shall vest in the Lessor or its assignee to be effected in the sole and exclusive
manner provided for in subparagraph (1) hereof. The Lessee further waives the right to rental
obtained by the Lessor or its assignee in excess of the rental herein specified and hereby conveys
and releases such excess to the Lessor or its assignee as compensation to the Lessor or its assignee
for its services in re-letting the Facility or any items thereof. The Lessee further agrees to pay the
Lessor or its assignee the cost of any alterations or repairs to the Facility or any items thereof
necessary to place the Facility or any items thereof in condition for re-letting immediately upon
notice to the Lessee of the completion and installation of such alterations or repairs.
The Lessee hereby waives any and all claims for damages caused or which may be
caused by the Lessor or its assignee in taking possession of the Facility as herein provided and all
claims for damages that may result from the destruction of or injury to the Facility and all claims
for damages to or loss of any property belonging to the Lessee, or any other person, that may be
on or about the Facility.
The Lessor expressly waives the right to receive any amount from the Lessee
pursuant to section 1951.2(a)(3) of the California Civil Code.
(c) In addition to any default resulting from breach by the Lessee of any
agreement, condition, covenant or term hereof, if (i) the Lessee's interest herein or any part
thereof be assigned, sublet or transferred without the written consent of the Lessor (except as
otherwise permitted by Section 2.04 hereof), either voluntarily or by operation of law; or (ii) the
Lessee or any assignee shall file any petition or institute any proceedings under any act or acts,
State or federal, dealing with or relating to the subject of bankruptcy or insolvency or under any
amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any
similar capacity, wherein or whereby the Lessee asks or seeks or prays to be adjudicated a
bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its
creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a
reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any
o other similar relief, or if the Lessee shall make a general or any assignment for the benefit of its
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creditors; or (Hi) the Lessee shall abandon or vacate the Facility or any portion thereof (except as
permitted by Section 2.04 hereof); then in each and every such case the Lessee shall be deemed
to be in default hereunder.
ARTICLE XI
REPRESENTATIONS AND WARRANTIES OF THE LESSEE
SECTION 11.01. Organization: Authority: Application Correct. The Lessee is
duly organized and existing under the laws of the State and has all necessary power and authority
to enter into and perform its duties under this Facility Lease. The application for the financing,
including all attachments, amendments and clarifications submitted by the Lessee to the Lessor,
were accurate and correct at the time of submission and as of the Effective Date.
SECTION 11.02. Agreement Valid and Bindinl!:: Approval by Lessee. This
Facility Lease has been duly authorized, executed and delivered by the Lessee and constitutes the
legal, valid and binding obligation of the Lessee, enforceable in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws or equitable principles relating to or limiting creditors' rights generally. The legislative
body of the Lessee has authorized the Lessee to enter into this Facility Lease by duly adopting a
resolution in substantially the form attached hereto as Exhibit C.
SECTION 11.03. No Conflict in Execution of Facility Lease. The execution and
delivery by the Lessee of this Facility Lease and compliance with the provisions hereof will not
conflict with or constitute a breach of or default under any law, administrative regulation, court
decree, resolution, charter, by-law or any agreement to which the Lessee is subject or by which it
is bound or by which its properties may be affected.
SECTION 11.04. No Litigation. There is no action, suit, proceeding or
investigation at law or in equity before or by any court or governmental agency or body pending
or threatened against the Lessee to restrain or enjoin the execution or delivery of this Facility
Lease, or in any way contesting or affecting the validity of this Facility Lease, or contesting the
powers of the Lessee to enter into or perform its obligations under this Facility Lease.
SECTION 11.05. No Breach or Default. The Lessee is not in breach of or in
default under any applicable law or administrative regulation of the State or the United States,
the Constitution of the State (including article XVI, section 18 thereof), any applicable judgment
or decree, any loan agreement, indenture, bond, note, resolution, agreement or other instrument
to which the Lessee is a party or is otherwise subject which would have a material adverse
impact on the Lessee's ability to perform its obligations under this Facility Lease and no event
has occurred and is continuing which, with the passage of time or the giving of notice, or both,
would constitute a default or an event of default under any such instrument.
SECTION 11.06. No Consent. Approval or Permission Necessary. No consent or
approval of any trustee or holder of any indebtedness of the Lessee, and no consent, permission,
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authorization, order or licenses of, or filing or registration with, any governmental authority is
necessary in connection with the execution and delivery of this Facility Lease or the
consummation of any transaction contemplated herein, except as have been obtained or made and
as are in full force and effect.
SECTION 11.07. Information Submitted to the Lessor. The information relating
to the Lessee, the Site, the Project and the Facility submitted by the Lessee to the Lessor,
including, but not limited to, all information in the application, was true at the time submitted to
the Lessor and as of the date of this Facility Lease, remains true and correct in all material
respects, and such information does not contain any untrue or misleading statement of a material
fact or omit to state any material fact necessary to make the statements therein not misleading in
light of the circumstances under which they were made.
SECTION 11.08. Financial Statements of the Lessee. The Lessee's financial
statements furnished to the Lessor have been prepared in conformity with generally accepted
accounting principles and fairly present in all material respects the financial condition of the
Lessee as of the date thereof and the results of its operations for the period covered thereby.
There has been no material adverse change in the business, condition (financial or otherwise) or
operations of the Lessee since the date of such financial statements.
SECTION 11.09. Licenses. Permits and Approvals for Operation of Facilitv and
the Proiect. The Lessee will obtain all licenses, permits and approvals from any governmental
agency or authority having jurisdiction over the Lessee required for the operation of the Facility
and the Project.
SECTION 11.10. Project Completion.
(a) The Project is described in Exhibit A and the Lessee shall make no
changes thereto or to the operation thereof which would affect the qualification of the Project as
a "public development facility" within the meaning of the Act or the qualification of the Project
for tax exempt financing under the Code.
(b) The Lessee intends to utilize the Project or cause the Project to be utilized
as a "public development facility" within the meaning of the Act.
(c) The Project will be located wholly within the corporate limits of the
Lessee.
(d) To the best of the Lessee's knowledge, no officer or official of the Lessor
has any material interest whatsoever in the Project or in the transactions contemplated by this
Facility Lease.
(e) All applicable local governmental agency, State and federal government
certificates, approvals, permits and authorizations with respect to the construction of the Project
have been obtained or will be obtained as soon as practicable.
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ARTICLE XII
AFFIRMATIVE COVENANTS OF THE LESSEE
SECTION 12.01. Punctual Payment. The Lessee will punctually pay, or cause to
be paid, all payments required hereunder in strict conformity with the terms of this Facility
Lease, and it will faithfully observe and perform all of the conditions, covenants and
requirements of this Facility Lease.
SECTION 12.02. Books and Accounts: Financial Statements.
(a) The Lessee will keep proper books of record and accounts in which
complete and correct entries shall be made of all transactions relating to the Project (which may
be consolidated with other activities of the Lessee). Such books of record and accounts shall at
all times during business hours be subject to the inspection of the Lessor. To the extent that any
continuing disclosure reports required by Section 4.03 herein sets out the information required by
subsections (b) and (d) of this Section 12.02, the Lessee shall not be obliged to provide separate
statement setting forth the requested information.
(b) The Lessee will prepare and file with the Lessor annually as soon as
practicable, but in any event not later than two hundred ten (210) days after the close of each
Fiscal Year, so long as this Facility Lease has not been discharged by the Lessor, an audited
financial statement of the Lessee for the preceding Fiscal Year, prepared by an Independent
Accountant. The Lessee will furnish to the Lessor such reasonable number of copies of such
audited financial statements as may be required by the Lessor for distribution (at the expense of
the Lessee).
(c) Simultaneously with the delivery of the annual audited financial
statements, the Lessee will deliver to the Lessor a Certificate of the Lessee stating the following:
(1) Certification that no Event of Default has occurred and no event has
occurred which, with the passing of time would constitute an Event of Default;
(2) Notification of any other event or circumstance that would materially
affect completion of the Project and/or the payment of the Base Rental Payments; and
(3) Certification that the Borrower is in compliance with the Tax
Certificate, as set forth in Exhibit H; and
(4) Such other information as may be reasonably requested.
(d) The Lessee shall, upon request, furnish to the Lessor, in a format specified
by the Lessor, information concerning employment and other public benefits connected to the
Project.
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(e) Not later than thirty (30) days after the start of each Fiscal Year, the Lessee
will adopt and deliver to the Lessor, a budget approved by the governing board of the Lessee
setting forth the estimated revenues, expenses and debt service for the current Fiscal Year;
provided, that any such budget may be amended at any time during the Fiscal Year and such
amended budget shall be delivered to the Lessor or its designee.
SECTION 12.03. Notification to the Lessor. The Lessee agrees to notify the
Lessor, immediately, by telephone promptly confirmed in writing, if any representation made in
this Facility Lease or in the application for financing to the Lessor shall at any time so long as the
Facility Lease is outstanding prove untrue or incorrect in any manner. Further, the Lessee agrees
to notify the Lessor, immediately, by telephone promptly confirmed in writing, if there is a stop
notice, litigation or any other legal proceeding which may impact the completion of the Project.
SECTION 12.04. Protection of Securitv and Rights. The Lessee shall preserve
and protect the security of the Facility Lease and the rights of the Lessor. From and after the
Effective Date hereof, the Facility Lease shall be incontestable by the Lessee.
SECTION 12.05. Management of Properties. The Lessee shall manage and
operate the Facility in a sound and business-like manner and in conformity with all valid
requirements of any governmental authority.
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SECTION 12.06. Payment from Tax-Exempt Debt. The Lessee hereby
covenants to notify the Lessor at least forty-five (45) days before making any repayment or
prepayment of this Facility Lease from the proceeds of any tax-exempt debt incurred by the
Lessee.
SECTION 12.07. Further Assurances. The Lessee will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be reasonably
required by the Lessor as necessary or proper to carry out the intention or to facilitate the
performance of this Facility Lease and for the better assuring and confirming unto the Lessor of
the rights and benefits provided in this Facility Lease.
SECTION 12.08. Proiect Documentation.
(a) The Lessee may supplement or amend the Project description with written
approval from the Lessor from time to time, provided that no such supplement or amendment
shall cause the Project or any portion thereof to fail to constitute a "public development facility"
within the meaning of the Act.
(b) At any time, upon request of the Lessor, the Lessee agrees to make
available to the Lessor for review and copying all then current plans and specifications for the
Project. The Lessee may identify any proprietary information in such plans and specifications
and, to the extent legally permissible, the Lessor agrees to keep such information confidential.
(c) As soon as the Project is completed, the Lessee shall evidence such
o completiOn by providing a Certificate of the Lessee to the Lessor stating that (i) construction of
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the Project has been completed substantially in accordance with the final plans and specifications
therefor and all labor, services, materials and supplies used in construction have been paid for,
and (ii) all other facilities necessary in connection with the Project have been constructed,
acquired and installed in accordance with the final plans and specifications therefor and all costs
and expenses incurred in connection therewith have been paid. Notwithstanding the foregoing,
such certificate may state that it is given without prejudice to any rights of the Lessee against
third parties for the payment of any amount not then due and payable which exist at the date of
such certificate or which may subsequently exist.
SECTION 12.09. Lessee's General Responsibilitv. The Lessee is solely
responsible for the design, construction, operation and maintenance of the Project. Any review
or approval of plans, specifications, bid documents or other construction documents by the
Lessor is solely for the purpose of proper administration of Project funds by the Lessor and shall
not be deemed to relieve or restrict the Lessee's responsibility or result in any duty, obligation or
responsibility on the part of the Lessor or the officers and agents thereof.
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SECTION 12.10. Lessee's Assurances and Commitments.
(a) Compliance with Laws and Rel!Ulations. The Lessee shall at all times
comply and require its contractors and subcontractors to comply with all applicable federal and
State laws, rules and regulations, and all applicable local ordinances, specifically including, but
not limited to, prevailing wage, environmental, procurement and safety laws, rules, regulations,
and ordinances. Lessee agrees that its failure to act in accordance with the provisions of this
subsection (a) will not result in any duty, obligation or responsibility on the part of the Lessor or
the officers and agents thereof. The Lessee will comply with all laws of the State so as not to
adversely affect the payment of the Base Rental Payments and Additional Rental Payments.
(b) Archeolol!ical or Historical Resources. Should a potential archeological or
historical resource be discovered during construction, the Lessee agrees that all work in the area
of the find will cease until a qualified archeologist has evaluated the situation and the Lessee hits
determined appropriate actions regarding preservation of the resource.
(c) Construction Activities. The Lessee shall assure that adequate supervision
and inspection of Project construction activities are maintained. The Lessor or the Lessor's
designee reserves the right to conduct an audit of Lessee's construction expenditures during
construction and up to three years following receipt by Lessor of notice of completion. The
Lessor, at its discretion, may require the Lessee to conduct an interim and/or a final audit at the
Lessee's expense, such audit to be conducted by and a report prepared by an Independent
Accountant.
SECTION 12.11. Facilitv Access. The Lessee shall assure that the Lessor or its
designee will have suitable access to the Facility at all reasonable times throughout the term of
this Facility Lease and shall include provisions assuring such access in all contracts and
subcontracts relating to the Facility.
o
SECTION 12.12. Performance and Payment Bonds.
31
o
(a) The Lessee shall require its contractor to certify under penalty of perjury,
and provide the Lessee with a copy of such certification, which shall be available for the Lessor's
inspection, if requested, that it has obtained a bond or bonds by one or more authorized surety
companies satisfactory to the Lessee has been obtained; surety companies must be authorized to
do business in California and have an agent for service of process in California. The Lessee shall
require that the Lessor and Lessee be named as an additional payee and shall provide the Lessor
with a copy of the bonds to that effect.
(b) Said bond shall be in the amounts and for the following purposes: (i) an
amount not less than one hundred percent (100%) of the total estimated cost of the Project
construction contract amount conditioned upon the faithful performance of the terms of the
construction agreement for the Project including the maintenance of the work for a period of one
year from the date of final acceptance of work or improvements by the Lessee against any
defective work or labor done, or defective materials furnished, and (ii) an additional amount not
less than one hundred percent (100%) of the estimated cost of the Project securing payment to the
subcontractors and to persons renting equipment or furnishing labor or materials to them for the
Project.
o
SECTION 12.13. Notice of Event of Default. The Lessee covenants that it will
deliver to the Lessor, immediately after the Lessee shall have obtained knowledge of the
occurrence of an Event of Default or failure as described in Section 10.01(a)(2), a Certificate of
the Lessee setting forth the details of such Event of Default or failure and the action which the
Lessee proposes to take with respect thereto.
SECTION 12.14. Compliance with State Contract Reauirements. The Lessee
shall comply with all provisions contained in Exhibit G throughout the term of this Facility
Lease.
ARTICLE XIII
NEGATIVE COVENANTS OF THE LESSEE
SECTION 13.01. Nondiscrimination.
(a) During the performance of this Facility Lease, Lessee, any contractor and
its subcontractors shall not deny the contracts' benefits to any person on the basis of religion,
color, ethnic group identification, sex, age, physical or mental disability, nor shall they
discriminate unlawfully against any employee or applicant for employment because of race,
religion, color, national origin, ancestry, physical handicap, mental disability, medical condition,
marital status, age or sex. The Lessee, any contractor and its subcontractor shall insure that the
evaluation and treatment of employees and applicants for employment are free of such
discrimination.
(b) The Lessee, any contractor and its subcontractors shall comply with the
provisions of the Fair Employment and Housing Act (Government Code section 12900 et seq.),
() the regulations promulgated thereunder (Title 2, California Code of Regulations, section 7285.0
32
et seq.) the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government
o Code (sections 11135-11139.5) and any regulations promulgated thereunder.
(c) The Lessee, any contractor and its subcontractors shall not knowingly give
preferential treatment of any kind whatsoever in connection with any business transaction related
to the construction or operation of the Project to any of its affiliates or to any business enterprise
in which Lessee has any financial interest, but in such business transactions shall deal at all times
with such affiliates and enterprises on the same basis as though Lessee were dealing with any
other parties.
(d) The Lessee, any contractor and its subcontractors shall, with respect to the
Project described herein, give written notice of their obligations under this section to labor
organizations representing employees of the Lessee and any contractor or subcontractor
performing work on the Project which have a collective bargaining or other contract with the
Lessee, such contractor or subcontractor.
(e) The Lessee, any contractor and its subcontractors shall include the
provisions of this section in all subcontracts to perform work with respect to the Facility.
ARTICLE XIV
MISCELLANEOUS
o SECTION 14.01. Notices. All written notices to be given hereunder shall be
given by first class mail 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 Lessor:
California Infrastructure anll: Economic Development Bank
Attn: Credit Support Manager, CIEDB 804-051
P.O. Box 2830
Sacramento, CA 95812-2830
For overnight mail or personal delivery only:
California Infrastructure and Economic Development Bank
Attn: Credit Support Manager, CIEDB B04-051
1001 I Street, 19' floor
Sacramento, CA 95814
Or to such other address as may be designated in writing by the Lessor.
If to the Lessee:
o
33
o
o
o
City of San Bernardino
Atto: City Administrator
300 North "D" Street
San Bernardino, CA 92418
Or to such other address as may be designated in writing by the Lessee.
SECTION 14.02 Contact Persons.
(a) The executive director of the Lessor or such other person as designated in
writing by the Lessor shall manage this Facility Lease for the Lessor and shall have authority to
make determinations and findings with respect to each controversy arising under or in connection
with the interpretation, performance, or payment for work performed under this Facility Lease.
(b) The Lessee Project manager shall be the city administrator or such other
person as may be designated in writing by Lessee's Mayor. The Lessee Project manager shall be
the Lessee's representative for the administration of this Facility Lease and shall have full
authority to act on behalf of the Lessee and may designate in writing another person or persons
authorized to request disbursement of Project Amounts. All communications given to the Lessee
Project manager shall be as binding as if given to the Lessee.
SECTION 14.03. Bindinl!: Effect. This Facility Lease shall inure to the
benefit of and shall be binding upon the Lessor and the Lessee and their respective successors
and assignees.
SECTION 14.04. Third Party Beneficiaries. The Trustee is hereby expressly
designated as a third party beneficiary hereunder for the purpose of enforcing any of the rights
hereunder assigned to the Trustee and for the purpose of the Trustee enforcing its own rights.
SECTION 14.05. Net Lease. It is the purpose and intent of the Lessor and the
Lessee that lease payments hereunder shall be ab!iOlutely net to the Lessor so that this Facility
Lease shall yield to the Lessor the lease payments, free of any charges, assessments or
impositions of any kind charged, assessed or imposed on or against the Facility, and without
counterclaim, deduction, defense, deferment or set-off by the Lessee except as herein specifically
otherwise provided. The Lessor shall not be expected or required to pay any such charge,
assessment or imposition, or be under any obligation or liability hereunder except as herein
expressly set forth, and all costs, expenses and obligations of any kind relating to the
maintenance and operation of the Facility which may arise or become due during the term of this
Facility Lease shall be paid by the Lessee.
SECTION 14.06. Amendments to Facility Lease. This Facility Lease may be
amended by the parties in writing.
SECTION 14.07. Reserved.
34
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SECTION 14.08. Partial Invaliditv. H anyone or more of the agreements,
conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void
or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order
or decree of which becomes final, none of the remaining agreements, conditions, covenants or
terms hereof shall be affected thereby, and each provision of this Facility Lease shall be valid and
enforceable to the fullest extent permitted by law.
SECTION 14.09. California Law: Venue. This Facility Lease shall be
governed by and construed and interpreted in accordance with the laws of the State. Any
proceeding pertaining to this Facility Lease shall be filed in the Superior Court of Sacramento
County, unless otherwise expressly agreed to by the Lessor in its discretion.
SECTION 14.10. Section Headinl!:s. All section headings contained herein
are for convenience of reference only and are not intended to define or limit the scope of any
provision hereof.
SECTION 14.11. Execution. This Facility Lease may be executed and
entered into in several counterparts, each of which shall be deemed an original, and all of which
shall constitute but one and the same instrument.
SECTION 14.12. No Mer~er. This Facility Lease shall not operate as a
merger of the Lessee's leasehold estate in the Facility pursuant to this Facility Lease and its fee
estate in the Site.
[The balance of this page is intentionally left blank.]
35
()
o
()
IN WITNESS WHEREOF, the parties hereto have executed and entered into
this Facility Lease by their officers thereunto duly authorized as of the day and year first written
above.
CALIFORNIA INFRASTRUCfURE AND
ECONOMIC DEVELOPMENT BANK
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
36
()
o
o
IN WITNESS WHEREOF, the parties hereto have executed and entered into
this Facility Lease by their officers thereunto duly authorized as of the day and year first written
above.
CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
36
o
o
o
IN WITNESS WHEREOF, the parties hereto have executed and entered into
this Facility Lease by their officers thereunto duly authorized as of the day and year first written
above.
CALIFORNIA INFRASTRUCfURE AND
ECONOMIC DEVELOPMENT BANK
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
36
o
o
o
IN WITNESS WHEREOF, the parties hereto have executed and entered into
this Facility Lease by their officers thereunto duly authorized as of the day and year first written
above.
CALIFORNIA INFRASTRUCI1JRE AND
ECONOMIC DEVELOPMENT BANK
By
Stanton C. Hazelroth
Executive Director
Attest
By
Blake Fowler
Assistant Executive Director
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
Attest
By
Rachel Clark
City Clerk
36
o
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o
STATE OF CALIFORNIA
)
) ss
)
COUNTY OF SACRAMENTO
On ,2004, before me, Veronica Gonzalez, a Notary Public in and for the
State of California, personally appeared STANTON C. HAZELROTH, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person or the entity on behalf of which
the person acted, executed the instrument.
Witness my hand and official seal
[SEAL]
37
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STATE OF CALIFORNIA
COUNTY OF
)
) ss
)
On , 2004, before me, a Notary Public in and for the
State of California, personally appeared JUDITH VAlLES, personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument the person or the entity on behalf of
which the person acted, executed the instrument.
Witness my hand and official seal
[SEAL]
38
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EXHIBIT A
DESCRIPTION OF THE PROJECT
Project Title:
Verdemont Fire Station
Project Description:
The purchase of land, the construction of an approximately 7,900 square foot fire station
with a two bay garage to store firefighting equipment, and the purchase of two new fire
engines.
A-I
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EXHIBIT B
DESCRIPTION OF THE SITE
County Assessors Parcel #0261-191-06.
B-1
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EXHIBIT C
RESOLUTION NO.
A RESOLUTION OF TIlE COMMON COUNCIL OF TIfE
CITY OF SAN BERNARDINO
AUTHORIZING TIlE EXECUTION
AND DEUVERY OF TIlE FACILITY LEASE AND TIlE SITE LEASE BY AND BETWEEN
TIfE CITY OF SAN BERNARDINO AND TIlE CALIFORNIA INFRASTRUcruRE AND
ECONOMIC DEVELOPMENT BANK
AND APPROVING
CERTAIN OTIfER MATTERS IN CONNECTION TIfEREWlTII
NOW, TIlEREFORE, BE IT RESOLVED BY TIfE COMMON COUNCIL OF
TIlE CITY OF SAN BERNARDINO, AS FOLLOWS:
Section 1. The Mayor is authorized and directed to execute and deliver the Facility Lease,
dated as of August 2, 2004 (the "Facility Lease") and the Site Lease dated as of August 2, 2004
(the "Site Lease") proposed to be entered into by the City of San Bernardino and the California
Infrastructure and Economic Development Bank, dated as of August 2, 2004, for and on behalf of
City of San Bernardino. As executed and delivered, such documents shall be in substantially the
form presented at this meeting, with such minor additions thereto or minor changes therein as the
officers executing such document shall require or approve, such approval to be conclusively
evidenced by the execution and delivery thereof.
Section 2. The Mayor and City Administrator are hereby each authorized and directed, in the
name and on behalf of the City of San Bernardino, to take any and all steps and to execute and
deliver any and all certificates, contracts and other documents which they might deem necessary
or appropriate in order to consummate the delivery of the Facility Lease and the Site Lease and
otherwise to effectuate the purposes of this resolution, including the execution of a tax certificate,
and such actions previously taken by the employees of the Lessee are hereby ratified and
confirmed.
Section 3.
This resolution shall take effect from and after its passage, approval and adoption.
PASSED, APPROVED and ADOPTED this _ day of
the following vote:
, by
Ayes:
Noes:
Absent:
Abstain:
c-!
o
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Attest
By
Rachel Clark
City Clerk
C-2
Judith Valles
Mayor
o
o
o
Attest
By
Rachel Clark
City Clerk
Judith Valles
Mayor
C-2
o
o
o
Attest
By
Rachel Clark
City Clerk
Judith Valles
Mayor
C-2
o
o
o
Attest
By
Rachel Clark
City Clerk
Judith Valles
Mayor
C-2
o
o
o
CERTIFICATION OF RESOLUTION
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting of the City of San
Bernardino (the "Lessee"), and, as such, am familiar with the facts herein certified and am fully
authorized to certify the same.
(2) Attached hereto is a true, correct and complete copy of the resolution of the governing
body of the Lessee authorizing the execution and delivery of the Facility Lease dated as of
August 2, 2004, by and between the Lessee and the California Infrastructure and Economic
Development Bank, and the Site Lease dated as of August 2, 2004, by and between the Lessee
and the California Infrastructure and Economic Development Bank, adopted at a meeting thereof
duly held on the date set forth in such resolution, of which meeting all of the members of said
governing body had due notice and at which a quorum was present and acting throughout.
(3) I further certify that I have carefully compared the attached copy of the resolution with the
original minutes of said meeting on file and of record in my office; that said copy is a true,
correct and complete copy of the original resolution duly adopted by said governing body at said
meeting and entered in said minutes; and that said resolution has not been amended, modified or
rescinded since its adoption and is in full force and effect as of the date hereof.
(4) I further certify that in accordance with Government Code section 54954.2, the agenda of
the meeting contained a brief description of the resolution to be considered at the meeting, and a
copy thereof was posted at least seventy-two (72) hours before the meeting in a location freely
accessible to members of the public.
Dated:
'-
CITY OF SAN BERNARDINO
By
Name
Title
C-3
o
o
o
CERTIFICATION OF RESOLUTION
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting of the City of San
Bernardino (the "Lessee''), and, as such, am familiar with the facts herein certified and am fully
authorized to certify the same.
(2) Attached hereto is a true, correct and complete copy of the resolution of the governing
body of the Lessee authorizing the execution and delivery of the Facility Lease dated as of
August 2, 2004, by and between the Lessee and the California Infrastructure and Economic
Development Bank, and the Site Lease dated as of August 2, 2004, by and between the Lessee
and the California Infrastructure and Economic Development Bank, adopted at a meeting thereof
duly held on the date set forth in such resolution, of which meeting all of the members of said
governing body had due notice and at which a quorum was present and acting throughout.
(3) I further certify that I have carefully compared the attached copy of the resolution with the
original minutes of said meeting on file and of record in my office; that said copy is a true,
correct and complete copy of the original resolution duly adopted by said governing body at said
meeting and entered in said minutes; and that said resolution has not been amended, modified or
rescinded since its adoption and is in full force and effect as of the date hereof.
(4) I further certify that in accordance with Government Code section 54954.2, the agenda of
the meeting contained a brief description of the resolution to be considered at the meeting, and a
copy thereof was posted at least seventy-two (72) hours before the meeting in a location freely
accessible to members of the public.
Dated:
'-
CITY OF SAN BERNARDINO
By
Name
Title
C-3
o
o
o
CERTIFICATION OF RESOLUTION
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting of the City of San
Bernardino (the "Lessee"), and, as such, am familiar with the facts herein certified and am fully
authorized to certify the same.
(2) Attached hereto is a true, correct and complete copy of the resolution of the governing
body of the Lessee authorizing the execution and delivery of the Facility Lease dated as of
August 2, 2004, by and between the Lessee and the California Infrastructure and Economic
Development Bank, and the Site Lease dated as of August 2, 2004, by and between the Lessee
and the California Infrastructure and Economic Development Bank, adopted at a meeting thereof
duly held on the date set forth in such resolution, of which meeting all of the members of said
governing body had due notice and at which a quorum was present and acting throughout.
(3) I further certify that I have carefully compared the attached copy of the resolution with the
original minutes of said meeting on file and of record in my office; that said copy is a true,
correct and complete copy of the original resolution duly adopted by said governing body at said
meeting and entered in said minutes; and that said resolution has not been amended, modified or
rescinded since its adoption and is in full force and effect as of the date hereof.
(4) I further certify that in accordance with Government Code section 54954.2, the agenda of
the meeting contained a brief description of the resolution to be considered at the meeting, and a
copy thereof was posted at least seventy-two (72) hours before the meeting in a location freely
accessible to members of the public.
Dated:
'-
CITY OF SAN BERNARDINO
By
Name
Title
C-3
o
o
o
CERTIFICATION OF RESOLUTION
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting of the City of San
Bernardino (the "Lessee"), and, as such, am familiar with the facts herein certified and am fully
authorized to certify the same.
(2) Attached hereto is a true, correct and complete copy of the resolution of the governing
body of the Lessee authorizing the execution and delivery of the Facility Lease dated as of
August 2, 2004, by and between the Lessee and the California Infrastructure and Economic
Development Bank, and the Site Lease dated as of August 2, 2004, by and between the Lessee
and the California Infrastructure and Economic Development Bank, adopted at a meeting thereof
duly held on the date set forth in such resolution, of which meeting all of the members of said
governing body had due notice and at which a quorum was present and acting throughout.
(3) I further certify that I have carefully compared the attached copy of the resolution with the
original minutes of said meeting on file and of record in my office; that said copy is a true,
correct and complete copy of the original resolution duly adopted by said governing body at said
meeting and entered in said minutes; and that said resolution has not been amended, modified or
rescinded since its adoption and is in full force and effect as of the date hereof.
(4) I further certify that in accordance with Government Code section 54954.2, the agenda of
the meeting contained a brief description of the resolution to be considered at the meeting, and a
copy thereof was posted at least seventy-two (72) hours before the meeting in a location freely
accessible to members of the public.
Dated:
'-
CITY OF SAN BERNARDINO
By
Name
Title
C-3
o
o
o
EXHIBIT D
PROJECT COSTS
Project Costs:
CIEDB"
$237,560
$2,202,825
$220,000
$140,000
$431,854
$1,300
$105,500
$21,675
$2,550,000
$810,714
Modifications to any Project sources and uses Project line item financed by the CIEOB shall
require the written approval of the CIEOB. The CIEOB credit support unit manager shall
provide a revised Project sources and uses chart for approved cumulative modifications that are
less than ten percent (10%) of the Project Amount. Approved cumulative modifications to the
CIEOB Project budget that are ten percent (10%) or greater than ten percent (10%) of the Project
Amount shall require an amendment to the Facility Lease.
The Lessor shall not be responsible for the payment of any cost overruns.
The Lessee shall submit invoices only for expenses incurred. Expenses contained in the invoices
shall be listed according to the categories contained in the above Project Costs. The Lessor shall
pay ninety percent (90%) of all approved invoices for construction costs submitted by the Lessee
prior to compliance with the conditions precedent to final disbursement; provided, that if the
Lessee demonstrates to the satisfaction of the Lessor that the Lessee is obliged by law to make
payments to certain construction contractors for one hundred percent (100%) of invoiced
amounts or to establish a retention fund for final payment to certain contractors, the Lessor shall
disburse Project funds in the amount required by law.
Lessee shall not approve any change orders resulting in an increase in Project Costs of the
original construction contract amount without having funds committed for the increased Project
Costs.
Costs of the Project not covered by this Facility Lease will be paid by the Lessee.
No costs of the Project to be paid by the Lessor can be incurred prior to January 29, 2004.
D-1
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EXHIBIT E
CONDITIONS PRECEDENT TO DISBURSEMENT
( a) Initial Disbursement. Disbursement for the Lessor origination fee shall be made upon the
initial disbursement. No other funds shall be disbursed pursuant to this Facility Lease until and
unless Lessee, in the good faith judgment of the Lessor, has specifically complied with the
following:
(1) An opinion of legal counsel that Lessee has the legal authority to enter into this
Facility Lease and Site Lease and that the Facility Lease and Site Lease are legal, binding and
enforceable agreements of Lessee in a form substantially similar to Exhibit J;
(2) Resolution adopted by Lessee in a form substantially similar to Exhibit C and
Certification of Resolution in a form substantially similar to page C-2 of Exhibit C;
(3)
Exhibit I;
Certificate of the Lessee's chief financial officer in a form substantially similar to
(4)
Insurance certificates, as required by Section 6.03;
(5) CLTA title policy in an amount not less than the Project Amount meeting the
requirements of Section 6.05; and
(6)
Tax Certificate executed by Lessee in a form substantially similar to Exhibit H.
(b) Construction Costs. No funds shall be disbursed pursuant to this Facility Lease until and
unless Lessee has, in the good faith judgment of the Lessor, provided Lessor with all the
documents required in section (a) herein and the following documents:
(1) Certificate of the Lessee's city manager, legal counselor other designated
representative that Lessee has obtained any and all lands, rights-of-way, easements, lot line
adjustments, and orders of possession which are required for construction and operation of the
Project;
(2) Certificate of the Lessee's city manager, legal counselor other designated
representative that all required permits have been obtained for the construction of the Project;
(3) Performance and Payment Bonds complying with Section 12.12.
(4) Certificate of the Lessee's city manager, legal counselor other designated
representative that:
(A) All construction contracts and subcontracts necessary for Project
construction have been awarded, and were awarded pursuant to competitive
E-l
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bidding and Lessee procedures normally required for similar construction
projects;
(B) Costs are consistent with the Exhibit 0 budget;
(C) All prime contracts require the contractor to maintain appropriate builder's
risk insurance and name Lessor and Lessee as an additional insured and loss
payee, require the contractor to maintain liability insurance and name the Lessor
and Lessee as an additional insured, and include the performance and payment
bond provisions set forth in Section 12.12 of this Facility Lease and name the
Lessor and Lessee as an additional payee; and
(0) All construction contracts are let to the lowest responsible bidder at a fIxed
price subject to increase only for allowable extra work, change orders approved by
Lessee, and damages or delays authorized by the laws of the State. Lessee shall
not approve any change orders resulting in an increase in Project costs without
having funds committed for the increased Project costs;
(E) All construction contracts require payment of prevailing wage rates and
compliance with Chapter 1 (commencing with section 1720) of Part 7 of
Division 2 of the California Labor Code;
(F)
All construction contracts require payment of workers' compensation
insurance by contractors and subcontractors;
(G) All construction contracts include the nondiscrimination provisions set
forth in Section 13.01; and
(H) Lessee utilized contractor pre-qualifIcation forms developed by the
Director of Industrial Relations as set forth in AB 574 (Chapter 972 of the Statutes
of 1999) codifIed in Public Contract Code section 20101 et seq.
(c) Final disbursement: The fInal disbursement of Project funds shall not be made until and
unless Lessee, in the good faith judgment of the Lessor, has specifIcally complied with each and
every one of the following, and provided a copy of the specifIed document or certifIcate to the
Lessor:
(1) Recorded Project notice of completion or other evidence of completion
satisfactory to the Lessor;
(2) Lien waivers for the Project, or passage of the applicable statutory time periods
for filing mechanics and other similar liens;
(3) CertifIcation by the Lessee that the Project has been completed according to its
approved fInal plans and specifIcations, that the completed Project is consistent with the
E-2
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definition of Project in this Facility Lease and is acceptable to the Lessee and that the
requirements of Section 12.08(c) have been met;
(4) Certification of Recycled Content as set out in Section 6 of Exhibit F;
(5) Certification that the Lessee has obtained all licenses and permits (including
operating permits), and approvals from any governmental agency or authority having jurisdiction
over the Lessee in connection with the Facility and
(6) Title insurance policy with standard endorsement 116.
E-3
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EXHIBIT F
BASE RENTAL PAYMENTS
NOTE: The Base Rental Payments below shall conform to the following guidelines:
This schedule is based on a term of twenty-five (25) years from the Effective Date at an interest rate of two and
ninety-two hundredths percent (2.92%) per annum and indicates what the Base Rental Payments will be over the
course of the Facility Lease. Base Rental Payments shall have an interest only component through July 31, 2006.
The interest component of each Base Rental Payment shall be calculated on the basis of a 360-day year of twelve 30-
day months. Any installment of a principal component or an interest component of a Base Rental Payment that is not
paid when due shall continue to accrue interest at the lesser of twelve percent (12%) per annum or the maximum rate
permitted by law from and including the Base Rental Payment date with respect to which such principal component
or interest component is payable to but not including the date of actual payment.
Payment billing statements will be mailed to the Lessee reflecting the actual amount owed prior to each Base Rental
Payment due date. With the exception of the annual fee, any Additional Rental Payments will be billed separately as
the cost is incurred.
Ji . )2-' ...i ... i'" i..:i A~~ltiQ~.1 .... i' r~IF'/iIymellt
........~t< " )< i' . <i fl~ < j~l<.i Fl$C$IY_
. ..... ) ": < ....)\7;.'7<.. '1'!"riHliI\ ............ ..jiz i<< l,':i1!1l!HI~
ay ......
2-Aug-2004
1-Feb-2oo5 $37,023.1 $37,023.1 f $37,023.1 $37,023.1
1-Aug-2005 $37,230.0C $37,230.00 $7,650.0C $44,880.0C
1-Feb-2006 $37,230.0C $37,230.00 $37,230.OC $82,110.0C
1-Aug-2006 $74,816.29 $37,230.0C $112,046.29 $7,650.0C $119,696.2~
1-Feb-2oo7 $36,137.68 $36,137.68 $36,137.68 $155,833.9
1-Aug-2oo7 $77,000.9 $36,137.68 $113,138.61 $7.425.5~ $120,564.16
1-Feb-2oo8 $35,013.4 $35,013.4 $35.013.4 $155,577.6
1-Aug-2oo8 $79,249.35 $35,013.4 $114,262.82 $7,194.5~ $121.457.3
1-Feb-2009 $33,856.4 $33,856.4 $33,856.4 $155,313.8C
1-Aug-2009 $81,563.44 $33,856.4~ $115,419.8f $6,956.80 $122,376.68
1-Feb-2010 $32,665.60 $32,665.6C $32,665.60 $155,042.2
1-Aug-2010 $83,945.09 $32,665.60 $116,610.6~ $6,712.11 $123,322.80
1-Feb-2011 $31,440.00 $31,440.0C $31,440.00 $154,762.8C
1-Aug-2011 $86.396.28 $31,440.00 $117,836.29 $6,460.2 $124,296.56
1-Feb-2012 $30,178.62 $30,178.6 $30,178.62 $154,475.18
1-Aug-2012 $88,919.06 $30,178.62 $119,097.6 $6,201.09 $125,298.76
1-Feb-2013 $28,880.40 $28,880.40 $28,880.40 $154,179.16
1-Aug-2013 $91,515.49 $28,880.40 $120,395.89 $5,934.3 $126,330.22
1-Feb-2014 $27,544.27 $27,544.2 $27,544.27 $153,874.49
1-Aug-2014 $94,187.74 $27,544.27 $121,732.0 $5.659.78 $127,391.80
1-Feb-2015 $26,169.13 $26,169.1 $26,169.1 $153,560.9
1-Aug-2015 $96,938.0 $26,169.1 $123,107.16 $5,377.22 $128,484.38
1-Feb-2016 $24,753.84 $24,753.84 $24,753.84 $153,238.21
1-Aug-2016 $99,768.6 $24,753.84 $124,522.45 $5,086.40 $129,608.86
1-Feb-2017 $23,297.2 $23,297.2 $23;297.22 $152,906.0
1-Aug-2017 $102,681.86 $23,297.2 $125,979.08 $4,787.10 $130,766.17
1-Feb-2018 $21,798.06 $21,798.06 $21,798.06 $152,564.24
1-AuQ-2018 $105,680.1 $21,798.06 $127,478.2 $4,479.05 $131,957.28
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Paymen! PriJ!cipal Interest Base Rental Addiliooal Total Total Payment
Rental . Fiscal Year
Date COItlPOl'llmt . ... Compoll$ll . Paynlllm Paymem P~ Endioll 3Q.Jun
1-Feb-2019 $20,255.1, $20,255.1 $20,255.1 $152,212.41
1-Aug-2019 $108,766.03 $20,255.1 $129,021.1E $4,162.01 $133.183.1
1-Feb-2020 $18,667.11 $18,667.1! $18,667.11 $151,850.3.
1-Aug-2020 $111,942.0( $18,667.11 $130,609.1 ! $3,835.71 $134,444.8E
1-Feb-2021 $17,032.71 $17,032.71 $17,032.7! $151,477.6!
1-Aug-2021 $115,210.71 $17,032.71 $132,243.5C $3,499.81 $135,743.31
1-Feb-2022 $15,350.7 $15,350.7 $15,350.1' $151,094.1C
1-Aug-2022 $118,574.8E $15,350.7 $133.925.5 $3,154.26 $137,079.8,
1-Feb-2023 $13,619.52 $13,619.52 $13,619.5 $150,699.3E
1-Aug-2023 $122,037.2~ $13,619.5 $135,656.7 $2,798.5 $138,455.3C
1-Feb-2024 $11,837.76 $11,837.78 $11,837.78 $150,293.06
1-Aug-2024 $125,600.7 $11,837.76 $137,438.51 $2,432.42 $139,870.9
1-Feb-2025 $10,004.01 $10,004.01 $10,004.01 $149.874.94
1-Aug-2025 $129.268.2 $10,004.01 $139,272.21 $2,055.62 $141,327.9C
1-Feb-2026 $8,116.69 $8,116.61 $8,116.69 $149,444,59
1-Aug-2026 $133,042.91 $8,116.69 $141,159.6C $1,667.81 $142,827.41
1-Feb-2027 $6,174.2 $6,174.2 $6,174.2 $149.001.68
1-Aug-2027 $136.927.76 $6,174.2 $143,102,0 $1,268.68 $144,370.71
1-Feb-2028 $4,175.1 $4,175.10 $4,175.1 $148,545.8
1-Aug-2028 $140,926.0! $4,175.1 $145,101.1 $857.9C $145,959.0
1-Feb-2029 $2,117.6C $2,117.6C $2,117.6C $148,076.6
1-Aug-2029 $145,041.01 $2,117.6C $147,158.69 $435.12 $147,593.81 $147,593.81
Total Payments: $2,550,OOO.OC $1.106,884.16 $3,656.884.16 $113.742.22 $3.770.626.3E $3,770,626.38
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EXHIBIT G
STATE CONTRACT REOUffiEMENTS
SECTION 1.
Record Establishment. Access and Retention.
(a) The Lessee agrees that the Lessor shall have the right to review, obtain,
and copy all records pertaining to performance of this Facility Lease. The Lessee agrees to
provide the Lessor with any relevant information requested and shall permit the access to its
premises, upon reasonable notice, during normal business hours for the purpose of interviewing
employees and inspecting and copying such books, records, accounts, and other material that may
be relevant to a matter under investigation for the purpose of determining compliance with
Government Code section 8546.7. The Lessee further agrees to maintain records concerning
costs paid with State funds for three years following the Lessor's receipt of a notice of
completion or payment of an invoice, whichever is later. In the event of a Facility Lease
performance or payment dispute, the three year minimum shall automatically be extended until
the dispute is resolved.
(b) Upon inspection, the Lessee shall promptly implement any corrective
measures recommended by the Lessor, its representatives, or the Bureau of State Audits ("BSA")
regarding the requirements of this section.
(c) The Lessee shall keep all books, records, accounts and documents
pertaining to this Facility Lease separate from other activities unrelated to this Facility Lease.
SECTION 2. Nondiscrimination Clause and Compliance Statement.
(a) By signing this Facility Lease, the Lessee and its contractors agree that
each shall not, during the performance of this Facility Lease, unlawfully discriminate, harass or
allow harassment, against any employee or applicant for employment because of sex, race, color,
ancestry, religious creed, national origin, disability"(including HIV and AIDS), medical condition
(cancer), age, marital status, denial of family and medical care leave or denial of pregnancy
disability leave. The Lessee and its contractors shall ensure that the evaluation and treatment of
their employees and applicants for employment are free from such discrimination and
harassment. The Lessee and its contractors shall comply with the provisions of the Fair
Employment and Housing Act (Government Code section 12900 et seq.), and the applicable
regulations promulgated thereunder (Title 2, California Code of Regulations, section 7285.0 et
seq.). The applicable regulations of the Fair Employment and Housing Commission
implementing Government Code section 12990 (a) through (f), set forth in Chapter 5 of Division
4 of Title 2 of the California Code of Regulations are incorporated into this Facility Lease by
reference and made a part hereof as if set forth in full. The Lessee and its contractor shall give
written notice of their obligations under this clause to labor organizations with which they have a
collective bargaining or other Facility Lease.
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(b) The Lessee shall include the nondiscrimination and compliance provisions
o as detailed in clause (a) of this section, in all contracts to perform work under this Facility Lease.
SECTION 3. Americans with Disabilities Act Certification. By signing this
Facility Lease, the Lessee assures the Lessor that it complies with the Americans with
Disabilities Act ("ADA") of 1990 (42 V.S.C. 12101 et seq.), which prohibits discrimination on
the basis of disability, as well as all applicable regulations and guidelines issued pursuant to the
ADA.
SECTION 4. National Labor Relations Board Certification. By signing this
Facility Lease, the Lessee does swear under the penalty of peljury that no more than one final
unappealable finding of contempt of court by a federal court has been issued against the Lessee
within the immediately preceding two year period because of the Lessee's failure to comply with
an order of a federal court which orders the Lessee to comply with an order of the National Labor
Relations Board.
SECTION 5. Certification of Drug Free Workplace.
(a) By signing this Facility Lease, the Lessee hereby certifies under penalty of
peljury under the laws of the State of California that the Lessee shall comply with the
requirements of the Drug Free Workplace Act of 1990 (Government Code section 8350 et seq.)
and shall provide a drug free workplace by:
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(1) publishing a statement notifying employees that unlawful
manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited
and specifying actions to be taken against employees for violations, as required by Government
Code section 8355(a).
(2) establishing a Drug Free Awareness Program as required by
Government Code section 8355(b), to inform employees about:
(A) the dangers of drug abuse in the workplace;
(B) the person's or organization's policy of maintaining a drug-
free workplace;
(C) any available counseling, rehabilitation and employee
assistance programs; and,
(D) penalties that may be imposed upon employees for drug
abuse violations; and,
(3) providing, as required by Government Code section 8355(c), that
every employee who performs work under this Lessee shall:
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(A) receive a copy of the Lessee's drug-free policy statement;
and,
(B) agree to abide by the terms of the Lessee's statement as a
condition of employment under this Facility Lease.
(b) In addition to any other consequences specified in this Facility Lease,
failure to comply with these requirements may result in the Lessee being ineligible for award of
any future State Contracts if the Lessor determines that the Lessee:
(1) has made a false certification; or,
(2) violates the certification by failing to carry out the requirements as
noted above.
SECTION 6. Certification of Recvcled Content. The Lessee shall certify in
writing, under penalty of perjury, the minimum, if not exact, percentage of recycled content of
both post-consumer material and secondary material as defined in Public Contract Code sections
12161 and 12200, in materials, goods or supplies offered, or products used in the performance of
this Facility Lease, regardless of whether the product meets the required recycled product
percentage as defined in Public Contract Code sections 12161 and 12200. The Lessee may
certify that the product contains zero recycled content. The Recycle Certification shall be
delivered to the Lessor not more than thirty (30) calendar days following the date of the notice of
completion.
SECTION 7.
Child Support Compliance Act.
(a) The Lessee recognizes the importance of child and family support
obligations and shall fully comply with all applicable State and federal laws relating to child and
family support enforcement, including, but not limited to, disclosure of information and
compliance with earnings assignment orders, as provided in Chapter 8 (commencing with section
5200) of Part 5 of Division 9 of the Family Code; and
(b) The Lessee, to the best of its knowledge, is fully complying with the
earnings assignment orders of all employees and is providing the names of all new employees to
the New Hire Registry, maintained by the California Employment Development Department.
SECTION 8.
Welfare Recipients.
(a) The Lessee shall give priority consideration in filling vacancies in
positions funded by the Lessee to qualified recipients of aid under Chapter 2 (commencing with
section 11200) of Part 3 of Division 9 of the Welfare and Institutions Code in accordance with
Article 3.9 (commencing with section 11349) of Chapter 2 of Part 3 of Division 9 of the Welfare
and Institutions Code.
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(b) Nothing in this provision shall be construed to:
(1)
bargaining agreements;
interfere with or create a violation of the terms of valid collective
(2) require the Lessee to hire an unqualified recipient of aid;
(3) interfere with or create a violation of any federal affirmative action
obligation of the Lessee for hiring disabled veterans or veterans of the Vietnam era; or,
(4) interfere with or create a violation of the requirements of
Government Code section 12990.
SECTION 9.
Prevailing Wal!:es.
(a) By signing this Facility Lease, the Lessee agrees to comply with the
provisions of section 1720 et seq. of the California Labor Code in the award of public works
contracts and subcontracts involving the expenditure of funds provided in this Facility Lease, and
to insure that its contractor and subcontractors meet the requirements of those enactments.
(b) The Lessee shall comply with Labor Code provisions that include but are
not limited to the following requirements: The Lessee shall obtain, from the Director of the
Department of Industrial Relations, the general prevailing rate of per diem wages and the general
prevailing rate for holiday and overtime work in the locality in which the public work is to be
performed for each craft, classification, or type of worker needed to execute the Facility Lease.
The Lessee shall either specify the general prevailing rates in bid and contract documents or
include a statement in those documents that such information is available; take cognizance of any
violations of prevailing wage law and notify the Department of Industrial Relations of such
violations; require that the contractor and subcontractors keep adequate payroll and other records
and withhold funds pending investigation of violations.
(c) The Lessee shall require its contractor and subcontractors to adhere to
prevailing wage requirements, including but not limited to the following requirements: contracts
between the contractor and subcontractors must include provisions regarding prevailing wage;
the contractor shall monitor subcontractors' payment of prevailing wage by periodically
reviewing certified payroll records and diligently taking corrective action if the subcontractors
fail to pay prevailing wage; contractor and subcontractors shall maintain certified payroll records
and time records. The contractor to whom a contract is awarded, and any subcontractor under
him, shall not pay less than the specified prevailing wage; contractor and subcontractors are
subject to penalties for violations of prevailing wage provisions.
(d) The Lessee acknowledges that it has been informed by the Lessor that the
Lessor may contract with the Department of Industrial Relations to conduct random audits of
some contracts to assure compliance with prevailing wage requirements. The Lessee shall
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require its contractor and subcontractors to cooperate in an audit if requested to do so by the
Lessor and shall infonn its contractor and subcontractors that spot audits are planned.
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EXHIBIT H
TAX CERTIFICATE
This Tax Certificate is executed and delivered by the City of San Bernardino (the
"Lessee") in connection with the Facility Lease between the Lessee and the California
Infrastructure and Economic Development Bank (the "Lessor"), dated as of August 2, 2004 (the
"Obligation") in the amount of two million five hundred fifty thousand dollars ($2,550,000).
The Lessee certifies, covenants, warrants and represents as follows:
ARTICLE I. IN GENERAL
1.1 Tbe Lessee. The Lessee is a charter city duly organized and existing
under the laws of the State of California.
1.2 Purpose of Tax Certificate. The Lessor has issued bonds (the "Bonds")
that will be used to fund the Obligation. The Lessee is delivering this Tax Certificate to the
Lessor with the understanding that the Lessor will rely in part upon this Tax Certificate in
obtaining an opinion from bond counsel that interest on the Bonds is excluded from gross income
for federal income tax purposes under section 103 of the Code (as defined below).
1.3 Purpose of Financing. The Obligation is being issued to finance the
Verdemont Fire Station on the Lessee's property (the "Project"), as described in more detail in
the application of the Lessee to the Lessor, dated September 5, 2003, including amendments
thereto and in Exhibit D of the Obligation.
1.4 Defmitions. Unless the context otherwise requires, the following
capitalized terms have the following meanings:
"Code" means the Internal Reveaue Code of 1986 (including amendments
thereto).
"Current Revenues" has the meaning given thereto in Section 2.7 hereof.
"Governmental Unif' means any state, or political subdivision of a state, but
excludes the United States and its agencies or instrumentalities.
"Investment Property" means any security or obligation, any annuity contract, or
any other investment-type property, but does not include any Tax-Exempt Bond unless
such obligation is a "specified private activity bond" within the meaning of section
57(a)(5)(C) of the Code.
"Nongovernmental Person" means any person or entity other than a Governmental
Unit.
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"Payment Account " has the meaning given thereto in Section 2.7 hereof.
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"Preliminary Expenditures" means architectural, engineering, surveying, soil
testing, and similar costs paid with respect to the Project in an aggregate amount not
exceeding twenty percent (20%) of the Obligation. However, Preliminary Expenditures
do not include land acquisition, site preparation or similar costs incident to the
commencement of construction.
"Tax-Exempt Bond" means any obligation the interest on which is excluded from
gross income for federal income tax purposes pursuant to section 103 of the Code or
section 103 of the Internal Revenue Code of 1954, as amended, and Title xm of the Tax
Reform Act of 1986, as amended, as well as stock in a regulated investment company to
the extent at least ninety-five percent (95%) of income to the stockholder is treated as
interest that is excludable from gross income under section 103 of the Code.
ARTICLE II. TAX LIMITATIONS
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2.1 Expenditure of Proceeds. Proceeds of the Obligation shall be used
exclusively for the following purposes: (i) architectural, engineering, surveying, soil testing, and
similar costs paid with respect to the Project incurred prior to the commencement of construction
and in an aggregate amount not exceeding twenty percent (20%) of the Obligation; (ii) capital
expenditures originally paid by the Lessee on or after the date hereof, (iii) interest on the
Obligation through the later of three years after the date hereof or one year after the Project is
placed in service, and (iv) initial operating expenses directly associated with the Project (in
aggregate amount not exceeding five percent (5%) of the amount of the Obligation).
2.2 Governmental Bond Status. The Lessee will not loan any of the
proceeds of the Obligation to one or more Nongovernmental Persons. The Lessee will not allow
more than five percent (5%) of proceeds of the Obligation or more than five percent (5%) of tlie
Project to be used directly or indirectly by any NOl!govemmental Person, other than as a member
of the general public. In addition, a Nongovernmental Person will be treated as "using" proceeds
of the Obligation to the extent the Nonexempt Person:
(i) borrows proceeds of the Obligation, or
(ii) uses the Project (~, as owner, lessee, service provider, operator or
manager).
2.3 Change in Use. The Lessee reasonably expects to use all proceeds of the
Obligation and all of the Project as set forth in Section 2.1 for the entire stated term to maturity
of the Obligation. Absent written agreement by the Lessor, the Lessee in fact will use all
proceeds of the Obligation and all of the Project as set forth in Section 2.1.
2.4 Federal Guarantee. The Lessee will not directly or indirectly use or
o permit the use of any proceeds of the Obligation or take or omit to take any action that would
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cause the Bonds to be obligations that are "federally guaranteed" within the meaning of section
149(b) of the Code. In furtherance of this covenant, the Lessee will not allow the payment of
principal or interest with respect to the Obligation to be guaranteed (directly or indirectly) in
whole or in part by the United States or any agency or instrumentality thereof. The Lessee will
not use five percent (5%) or more of the proceeds of the Obligation to make or finance loans the
payment of principal or interest with respect to which is guaranteed in whole or in part by the
United States or any agency or instrumentality thereof.
2.5 No Refunding. Proceeds of the Obligation will not be used directly or
indirectly to make principal, interest or premium payments with respect to any tax-exempt
obligation.
2.6 No Hedge Bonds. The Lessee reasonably expects that more than eighty-
five percent (85%) of proceeds of the Obligation will be expended for the purposes of the
Obligation within three years.
2.7 Rental Payments. "Payment Account" means the funds or accounts (or
any portions of any funds or accounts) that will hold monies that are expected by the Lessee to be
used to pay rental payments on the Obligation. "Current Revenues" means revenues which are
both received by the Lessee and utilized for the payment of rental payments on the Obligation
within a six month period. All amounts used to fund the Payment Account will be deemed to
have been made from the Payment Account by using a last-in, first-out accounting method.
Lessee agrees that the amounts used to pay rental payments shall be both received by the Lessee
and utilized for the payment of rental payments on the Obligation within a thirty (30) day period.
The Payment Account will be used primarily to achieve a proper matching of revenues and rental
payments within each year; a matching of revenues means that revenue and rental payments
come in and go out at approximately the same level and the Payment Account is cleared out to a
very low balance at least one time during the year. Current Revenues in the Payment Account
shall be invested without regard to yield so long as Lessee complies with this section.
2.8 No Other Replacement Proceeds. The Lessee will not use any proceeds
of the Obligation to replace funds of the Lessee which are or will be used to acquire Investment
Property reasonably expected to produce a yield that is materially higher than the yield on the
Obligation.
2.9 No Expected Sale. It is not expected that the Project or any part thereof
will be sold or otherwise disposed of so long as the Obligation is outstanding.
2.10 Tax Covenant. The Lessee will not take any action, or fail to take any
action, if such action or failure to take such action would adversely affect the exclusion from
gross income of the interest on the Bonds pursuant to section 103 of the Code and specifically
(i) the Lessee will not directly or indirectly use or make any use of the proceeds of the Bonds or
any other funds of the Lessee or take or omit to take any action that would cause the Bonds or to
be "arbitrage bonds" subject to federal income taxation by reason of section 148 of the Code or
obligations subject to federal income taxation because they are "federally guaranteed" as
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provided in section 149(b) of the Code, as applicable; and (ii) to that end the Lessee, with respect
to the proceeds of the Bonds will comply with all requirements of such sections of the Code to
the extent that such requirements are, at the time, applicable and in effect; provided, that if the
Lessee shall obtain an Opinion of Counsel nationally recognized in the area of the exemption of
interest from gross income under the Code to the effect that any action required under this
Section is no longer required, or to the effect that some further action is required, to maintain the
exclusion from gross income of the interest evidenced and represented by the Bonds pursuant to
section 103 of the Code, as applicable, the Lessee may rely conclusively on such opinion in
complying with the provisions hereof.
2.11 Private Use. No more than five percent (5%) of the Project (determined
both on the basis of space and cost) shall be used for private use. Private use includes use in the
trade or business of any nongovernmental persons, but does not include the portion of the
proceeds properly allocable to facilities expected to be used by an organization described in
section 501(c)(3) of the Code in a manner that does not constitute an unrelated trade or business
of such organization, as defined in section 513(a) of the Code. For purposes of this section, the
federal government is considered a nongovernmental person.
(a) For purposes of this section, private use shall include any contract for the
management or operation of any portion of the Project unless each of the following conditions is
met: (i) the term of such contract (including renewal options) does not exceed five years; (ii) the
manager or operator under such contract is not compensated on the basis of a share of net profits;
(Hi) the compensation of the manager or operator is reasonable; (iv) the Lessee must be able to
cancel such contract without penalty or cause at the end of the third year of the contract; and
(v) neither the Lessee nor the manager or operator may control more than twenty percent (20%) of
the voting power of the other's governing board; and
(b) The service provider's compensation for management or operation
services rendered must be pursuant to one of the following four methods: (i) at least fifty percent
(50%) of annual compensation is based on a periodic fIXed fee; (ii) the compensation is based on a
capitation fee or a combination of a capitation fee and a periodic fIXed fee; (Hi) in the case of certain
contracts with a term not longer than three years, the compensation is based on a per-unit fee or a
combination of a per-unit fee and periodic fIXed fee and the contract is cancelable after two years;
and (iv) in the case of certain contracts with a term not longer than two years, the compensation is
based on a percentage of fees charged and the contract is cancelable after one year.
(c) The term "renewal option" as used in this Section, means a provision
under which the service provider has a legally enforceable right to renew the contract. Thus, for
example, a provision under which a contract is automatically renewed for one year periods absent
cancellation by either party is not a renewal option (even if it is expected to be renewed).
ARTICLE III. OTHER MATTERS
3.1 Expectations. The undersigned is an authorized representative of the
Lessee acting for and on behalf of the Lessee in executing this Tax Certificate. To the best of the
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knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that
would materially change the expectations as set forth herein, and said expectations are
reasonable.
3.2 Amendments. Notwithstanding any other provIsion of this Tax
Certificate, the Lessee may amend this Tax Certificate and thereby alter any actions allowed or
required by this Tax Certificate if such amendment is signed by an authorized officer and is
supported by formal written agreement by the Lessor.
3.3 Survival of Defeasance. Notwithstanding any provision in this Tax
Certificate to the contrary, the obligation to comply with all requirements contained in this Tax
Certificate shall survive defeasance or prepayment of the Obligation.
Dated:
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
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knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that
would materially change the expectations as set forth herein, and said expectations are
reasonable.
3.2 Amendments. Notwithstanding any other provIsion of this Tax
Certificate, the Lessee may amend this Tax Certificate and thereby alter any actions allowed or
required by this Tax Certificate if such amendment is signed by an authorized officer and is
supported by fonnal written agreement by the Lessor.
3.3 Survival of Defeasance. Notwithstanding any provIsion in this Tax
Certificate to the contrary, the obligation to comply with all requirements contained in this Tax
Certificate shall survive defeasance or prepayment of the Obligation.
Dated:
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
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knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that
would materially change the expectations as set forth herein, and said expectations are
reasonable.
3.2 Amendments. Notwithstanding any other provIsion of this Tax
Certificate, the Lessee may amend this Tax Certificate and thereby alter any actions allowed or
required by this Tax Certificate if such amendment is signed by an authorized officer and is
supported by formal written agreement by the Lessor.
3.3 Survival of Defeasance. Notwithstanding any provIsion in this Tax
Certificate to the contrary, the obligation to comply with all requirements contained in this Tax
Certificate shall survive defeasance or prepayment of the Obligation.
Dated:
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
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knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that
would materially change the expectations as set forth herein, and said expectations are
reasonable.
3.2 Amendments. Notwithstanding any other provIsion of this Tax
Certificate, the Lessee may amend this Tax Certificate and thereby alter any actions allowed or
required by this Tax Certificate if such amendment is signed by an authorized officer and is
supported by formal written agreement by the Lessor.
3.3 Survival of Defeasance. Notwithstanding any provision in this Tax
Certificate to the contrary, the obligation to comply with all requirements contained in this Tax
Certificate shall survive defeasance or prepayment of the Obligation.
Dated:
CITY OF SAN BERNARDINO
By
Judith Valles
Mayor
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EXIllBIT I
FORM OF CERTIFICATE OF
CHIEF FINANCIAL OFFICER of CITY OF SAN BERNARDINO (the "Lessee")
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting chief [mancial officer of the Lessee, and, as such, am
familiar with the facts herein certified and am fully authorized to certify the same.
(2) The financial data submitted to the California Infrastructure and Economic Development
Bank (the "Lessor") by Lessee in the application for financing (including supplements thereto) in
connection with the Facility Lease by and between the Lessor and the Lessee (the "Facility
Lease") was true at the time submitted to Lessor and as of the date of this certification, remains
true and correct in all material respects, and such information did not and does not contain any
untrue or misleading statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under which they were
made.
(3) The Lessee is not in breach of or in default under any bond indenture, loan agreement,
note, lease or other instrument to which it is a party.
(4) The representations and warranties made in the Facility Lease are true and correct as if
made on the date of this certificate.
(5) All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Facility Lease.
Dated:
'-
CITY OF SAN BERNARDINO
By
1-1
o
o
o
EXHIBIT I
FORM OF CERTIFICATE OF
ClllEF FINANCIAL OFFICER of CITY OF SAN BERNARDINO (the "Lessee")
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting chief [mancial officer of the Lessee, and, as such, am
familiar with the facts herein certified and am fully authorized to certify the same.
(2) The financial data submitted to the California Infrastructure and Economic Development
Bank (the "Lessor") by Lessee in the application for financing (including supplements thereto) in
connection with the Facility Lease by and between the Lessor and the Lessee (the "Facility
Lease") was true at the time submitted to Lessor and as of the date of this certification, remains
true and correct in all material respects, and such information did not and does not contain any
untrue or misleading statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under which they were
made.
(3) The Lessee is not in breach of or in default under any bond indenture, loan agreement,
note, lease or other instrument to which it is a party.
(4) The representations and warranties made in the Facility Lease are true and correct as if
made on the date of this certificate.
(5) All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Facility Lease.
Dated:
'-
CITY OF SAN BERNARDINO
By
1-1
o
o
o
EXHIBIT I
FORM OF CERTIFICATE OF
CHIEF FINANCIAL OFFICER of CITY OF SAN BERNARDINO (the "Lessee")
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting chief financial officer of the Lessee, and, as such, am
familiar with the facts herein certified and am fully authorized to certify the same.
(2) The financial data submitted to the California Infrastructure and Economic Development
Bank (the "Lessor") by Lessee in the application for fmancing (including supplements thereto) in
connection with the Facility Lease by and between the Lessor and the Lessee (the "Facility
Lease") was true at the time submitted to Lessor and as of the date of this certification, remains
true and correct in all material respects, and such information did not and does not contain any
untrue or misleading statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under which they were
made.
(3) The Lessee is not in breach of or in default under any bond indenture, loan agreement,
note, lease or other instrument to which it is a party.
(4) The representations and warranties made in the Facility Lease are true and correct as if
made on the date of this certificate.
(5) All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Facility Lease.
Dated:
'-
CITY OF SAN BERNARDINO
By
[-1
o
o
o
EXHIBIT I
FORM OF CERTIFICATE OF
CHIEF FINANCIAL OFFICER of CITY OF SAN BERNARDINO (the "Lessee")
The undersigned hereby states and certifies:
(1) I am the duly qualified and acting chief financial officer of the Lessee, and, as such, am
familiar with the facts herein certified and am fully authorized to certify the same.
(2) The financial data submitted to the California Infrastructure and Economic Development
Bank (the "Lessor") by Lessee in the application for financing (including supplements thereto) in
connection with the Facility Lease by and between the Lessor and the Lessee (the "Facility
Lease") was true at the time submitted to Lessor and as of the date of this certification, remains
true and correct in all material respects, and such information did not and does not contain any
untrue or misleading statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under which they were
made.
(3) The Lessee is not in breach of or in default under any bond indenture, loan agreement,
note, lease or other instrument to which it is a party.
(4) The representations and warranties made in the Facility Lease are true and correct as if
made on the date of this certificate.
(5) All capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Facility Lease.
Dated:
CITY OF SAN BERNARDINO
By
1-1
o
o
o
EXHIBIT J
Attorney letterhead
Date [after Lessee's resolution)
City of San Bernardino
AUn: City Administrator
300 North "D" Street
San Bernardino, CA 92418
California Infrastructure and Economic Development Bank
Attn: Credit Support Unit, CIEDB B04-051
P.O. Box 2830
Sacramento, CA 95812-2830
Facility Lease, By and Between the City of San Bernardino, as Lessee and the California Infrastructure
and Economic Development Bank, as Lessor, Dated as of August 2, 2004, Agreement No. CIEDB B04-
051 in the amount of two million five hundred and fifty thousand dollars ($2,550,000), for the
Verdemont Fire Station and Site Lease, Dated as of August 2,2004.
Ladies and Gentlemen:
In my capacity as counsel to the City of San Bernardino (the "Public Agency") and in connection
with the above described Facility Lease and Site Lease (together the "Agreements"), I have
examined the laws pertaining to the Public Agency; the originals of the Agreements, signed by
the Public Agency; the Public Agency's resolution adopted August 2, 2004 (the "Resolution");
and such other information and documents as I considered necessary to render this opinion.
Based upon the foregoing, it is my opinion that:
(i) the Public Agency is a body public and corporate, and a public instrumentality of the State of
California duly organized and validly existing pursuant to the laws of the State of California;
(ii) the Resolution and other actions of the Public Agency approving and authorizing the
execution and delivery of the Agreements were duly adopted at a meeting of the governing body of the
Public Agency which was called and held pursuant to law and with all public notice required by law and
at which a quorum was present and acting throughout;
1-1
10
o
o
(iii) the Public Agency has full right and lawful authority to execute and deliver the Agreements
and the Agreements have been duly authorized and executed on behalf of the Public Agency and the
Agreements are the legal, valid and binding obligations of the Public Agency enforceable in accordance
with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium,
or similar laws, or by legal or equitable principles relating to or limiting creditors' rights generally;
(iv) to the best of my knowledge, after due inquiry, the execution and delivery of the Agreements
and compliance with the provisions thereof, under the circumstances contemplated thereby, do not and
will not in any material respect conflict with or constitute on the part of the Public Agency a breach of or
default under any agreement or other instrument to which the Public Agency is a party or by which it is
bound or any existing law, regulation, court order or consent decree to which the Public Agency is
subject; and
(v) to the best of my knowledge, after due inquiry, there is no action, suit, proceeding, inquiry or
investigation before or by any court or public body pending or threatened against or affecting the Public
Agency: 1) challenging or questioning the transactions contemplated by the Agreements or any other
agreement, document or certificate related to such transactions; 2) challenging or questioning the
creation, organization, existence or powers of the Public Agency; 3) seeking to enjoin or restrain the
execution of the Agreements or the building of the Project defined in the Agreements or the collection of
any of the Revenues pledged under the Agreements; 4) in any way questioning or affecting any of the
rights, powers, duties or obligations of the Public Agency with respect to the Revenues pledged under
the Agreements; 5) in any way questioning or affecting any authority for the execution of the
Agreements or validity or enforceability of the Agreements; or 6) in any way questioning or affecting
any other agreement or instrument concerning the Agreements to which the Public Agency is a party.
I do not render any opinion as to any federal or state securities or tax law. I am furnishing this
letter solely for your benefit. This letter is not to be used, circulated, quoted or otherwise referred to for
any other purpose.
The opinions expressed herein may be affec:ted by actions taken or events occurring after the date
hereof. The undersigned has not undertaken to determine or to inform any person whether any such
subsequent actions or events are taken or occur.
Sincerely,
Counsel for the Public Agency
J-2
Arnold
Schwarzenegger
Governor
Board Members:
California Infrastructure and Economic Development Bank
July 9, 2004
Teri Baker, City Administrator
City of San Bernardino
300 North "0" Street
San Bernardino, CA 92418
Dear Ms. Baker:
Re: Facility Lease and Site Lease (Financing Agreements), between the City of San
Philip Angelides Bernardino and the California Infrastructure and Economic Development Bank,
State Treasurer dated as of August 2, 2004:
Donna Arduln
Director, Department of
Finance
Executive Director:
Stanton C. Hazelroth
1001 I Street, 19th Roor
Sacramento, CA 95814
P. O. 80x 2830
Sacramento, CA 95812-2830
(916) 322-1399
(916) 322-6314 FAX
www.ibank.ca.gov
Enclosed is one complete original Financing Agreement. Please sign where indicated or
substitute other, agreed upon, signed documentation (resolution(s), legal opinion, etc.).
Also enclosed are additional signature pages, which will be collated for other complete
originals (a total of four). Please have all signature pages signed (and dated where
indicated) in blue ink. Please note that one original of the Facility Lease and Site Lease
signatures needs to be notarized for recording in the County Records. Please return the
signed documents to:
California Infrastructure and Economic Development Bank
Attn: Tom Martin
1001 I Street, 19th Floor
Sacramento, CA 95814
Upon receipt of the signed original and signature pages, I will have the documents
signed by CIEOB and will have an original sent to you.
Call me at (916) 322-6719, or tmartin@ibank.ca.gov regarding any questions.
ulY'
~~~
Torn Martin, Loan Officer
Enclosures
OFFICE OF THE CITY CLERK
RACHEL G. CLARK, C.M.C. - CITY CLERK
300 North "D" Street. San Bernardino. CA 92418-0001
909.384.5002. Fax: 909.384.5158
www.cLsan-hernardino.ca.us
'"
August 9, 2004
Mr. Tom Martin
California Infrastructure and Economic Development Bank
1001 I Street, 19th Floor
Sacramento, CA 95814
Dear Mr. Martin:
Enclosed is one (1) complete original Financing Agreement. All signature pages have been
signed and dated, or substituted with other signed documentation. The Facility Lease and Site
Lease have been notarized.
It is my understanding that after final execution, an original agreement will be returned. Please
forward the fully executed original agreement to:
Michelle Taylor
City of San Bernardino
City Clerk's Office
300 North "D" Street
San Bernardino, CA 92418
If you have any questions, please do not hesitate to contact me at (909)384-5002.
Sincerely,
C(Jif cte'tft ,,~ (LA__
Michelle Taylor '
Senior Secretary
Enclosure
. CITY OF SAN BERNARDINO
ADOPTED SHARED VALUES: Integrity. Accountability. Respect for Human Dignity. Honesty
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I BANK
Arnold Schwarzenegger
Governor
Board Members:
Sunne Wright McPeak
Chair
Secretary, Business,
Transportation and
Housing Agency
Philip Angelldes
State Treasurer
Donna Arduln
Director, Department of
Finance
California Infrastructure and Economic Development Bank
August 24, 2004
Teri Baker, City Administrator
City of San Bernardino
300 North "0" Street
San Bernardino, CA 92418
Re: Facility Lease and Site Lease (Financing Agreement), between the City of San
Bernardino and the California Infrastructure and Economic Development Bank,
dated as of August 2, 2004:
Dear Ms. Baker:
Enclosed is a complete executed original Financing Agreement for your files.
Please note that we have replaced the Amortization Schedule (Exhibit F of the
Facility Lease) with a new one to indicate the interest accrual beginning on August
18,2004, notwithstanding an Effective Date of August 2, 2004.
We also added the complete legal description to the Description of the Site (Exhibit B
of the Facility Lease).
Executive Director: Call me at (916) 322-6719, or tmartin@ibank.ca.gov regarding any questions.
Stanton C. Hazelroth
Mailing Address:
P.O. Box 2830
Sacramento, CA 95812.2830
Office Address:
1001 I Stroe~ 19" Floor
Sacramento, CA 95814
(916) 322.1399
(916) 322.Q14 FAX
www.lbank.ca.goY
Sincerely,
(;i;i;/lt/tf~/Y~
Tom Martin, Loan Officer
Enclosure
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted): )( -'2:-04 Item # 10 Resolution # 2004 - 241
Vote: Ayes)- '\ Nays.e- Abstain...e Absent -e-
Change to motion to amend original documents D Companion Resolutions
NulI/Void After: days I
Resolution # On Attachments: D
PUBLISH D
POST D
Note on Resolution of attachment stored separately: D
RECORD W/COUNTY D By:
Date Sent to Mayor: <;? - -4 -oL\-
Date of Mayor's Signature: (.. 5- O~
Date ofClerklCDC Signature: ~--5-04
Reso. Log Updated:
Seal Impressed:
B'"
~
Date MemolLetter Sent for Signature:
1'1 Reminder Letter Sent:
~ -4 -6~ Date Returned: 'i5 ' i':G -<J cl Not Returned: D
2nd Reminder Letter Sent:
Request for Council Action & Staff Report Attached: YesL No By
Updated Prior Resolutions (Other Than Below): Yes NoL By
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634): Yes NoL By
Updated CDC Personnel Folders (5557): Yes Noi By
Updated Traffic Folders (3985, 8234, 655, 92-389): Yes No By
Copies Distributed to:
Animal Control D EDA D Information Services D
City Administrator I!i Facilities D Parks & Recreation D
City Attorney [!( Finance I2r Police Department D
Code Compliance D Fire Department D Public Services D
Development Services D Human Resources D Water Department D
Others: -3
Notes:
Ready to File: _
Date:
Revised 12/18/03