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ORJGJNAL
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson, City Manager
Subject: Resolution 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 Manager's Office
Date: March 6, 2006
Meeting Date: 4/03/05
Synopsis of Previous Council Action:
9/6/05
Mayor and Council adopted resolutions authorizing the submission of the
application to the California Infrastructure and Economic Development Bank for
financing of pavement reconstruction and rehabilitation and declaring the City's
official intent to reimburse certain expenditures from proceeds of obligation.
8/15/05
Mayor and Common Council adopted a resolution approving the FY 2005-
06/2009-10 Capital Improvement Program.
9/15/03
Mayor and Common Council adopted a resolution authorizing the submission of a
financing application to the California Infrastructure and Economic Development
Bank for financing of the Verdemont Fire Station.
Recommended motion:
IiI6
Adopt Resolution.
Contact person: Teri Baker
Phone:
5122
Supporting data attached: StatfReport, Resolution, Facility Lease, Ward:
& Siu;Lt:i:t:st:
All
FUNDING REQUIREMENTS: Amount: None in FY05/06; $218,300 in FY06/07; and
approximately $ I ,265,000 annually, thereafter, for nine years.
Source: (Acct. No.) 129-367-5504 and 126-369-5504
(Acct. Description) 1 /2 Cent Sales Tax and Gas Tax
Finance:
Council Notes: ~ ODt - gg
Lf~
Agenda Item No. I 0
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
Subiect:
Resolution authorizing the execution and delivery ofthe 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
Backl!round:
In September of 2005, Mayor and Council approved the submission of a $10 million loan
application to the !Bank for pavement rehabilitation and reconstruction. The !Bank Board
subsequently approved that application. As with the other !Bank loans, the loans are secured by
a lease arrangement between the City and the !Bank. Five of the City's fire stations have been
secured for this loan. The proceeds from this loan will be used for pavement reconstruction,
rehabilitation, engineering, architectural and design costs, tile and appraisal costs, and the !Bank
origination fee. The project consists of 3.4 miles of pavement reconstruction and 25.5 miles of
pavement rehabilitation on public streets throughout the city.
This resolution approves the Facility Lease Agreement and the Site Lease Agreement, which is
the final step before reimbursement from the state starts for the $lOM loan for pavement
rehabilitation and reconstruction. Once the agreement becomes effective on April I5'h, the City
may begin submitting for reimbursement for pavement projects. Public Services and
Development Services have previously developed a schedule for completion of these projects
which have been distributed to council. All of the projects are scheduled to be completed by the
end of2006.
Fiscal Impact:
The term of this loan is ten years with a rate of 2.37%. The loan will be repaid in semi-annual
payments. Interest only payments are due in February and principal and interest payments are
due in August of each year.
Total annual payments will be approximately $1,265,000. There will be no payment due in FY
05/06. In FY 06/07, principal and interest payments will be $218,300. It is anticipated that the
debt service payments will be paid through a combination of 1/2-Cent Sales Tax and Gas Tax.
Recommendation:
Adopt Resolution.
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RESOLUTION NO.
A RESOLUTION OF THE CITY 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
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, AS FOLLOWS:
Section I. The Mayor is authorized and directed to execute and deliver the Facility Lease,
dated as of April 15, 2006 (the "Facility Lease") and the Site Lease dated as of April 15, 2006
(the "Site Lease") proposed to be entered into by the City of San Bernardino and the
California Infrastructure and Economic Development Bank. 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, City Manager, Director of Finance, and City Attorney 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.
adoption.
This resolution shall lake effect from and after its passage, approval and
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.........
A RESOLUTION OF THE CITY 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
. 2006, by the following vote, to wit:
Council Members: A YES
NAYS
ABSTAIN
ABSENT
ESTRADA
BAXTER
MCGINNIS
DERRY
KELLEY
JOHNSON
MCCAMMACK
Rachel G. Clark
City Clerk
The foregoing resolution is hereby approved this
2006.
day of
Patrick J. Morris
Mayor
d as to form and legal content:
vn"-,,, f ~
James F. Penman
City Attorney
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Recording Requested By
And When Recorded Mail To:
)
)
)
)
California Infrastructure and Economic )
Development Bank )
Attn: Credit Support Unit )
1001 I Street, 19th floor
Sacramenlo, CA 95814
)
(Space above for Recorder's use)
This document is recorded for the benefit of the CALIFORNIA INFRASTRUCTURE AND
ECONOMIC DEVELOPMENT BANK and the recording is fee-exempt under section 27383 of
the California Government Code.
FACILITY LEASE
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by and between the
California Infrastructure and Economic Development Bank
and the
The City of San Bernardino
relating to ten million dollars ($10,000,000)
Agreement No. CIEDB B05-064
Dated as of April 15, 2006
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS, ..,.................." .."", ,......................................................,. ,........ 2
SECTION 1.01 Definitions ........................,......................................,..........................2
SECTION 1.02 Rules of Construction..............................................................."........ 6
ARTICLE II THE FACILITy..................,............................."......,...................................... 6
SECTION 2.01 Lease of the Facility ........................................................................... 6
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 Liens ..."................".........................................',..""".............".......... 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....................................................... II
SECTION 2.08
SECTION 2.09
SECTION 2.10
ARTICLE III TERM OF THE FACILITY LEASE ............................................................. II
SECTION 3.01 Commencement and Termination of the Facility Lease;
Vesting of Title..................."..............,.."",.,........................", ......... II
- 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 Paymenls ............................................................................... 13
SECTION 5,02 Annual Budgets ................................................................................15
SECTION 5.03 Application of Rental Paymenls....................................................... 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
SECTION 5.07 Fair Rental Value.............................................................................. 17
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 ...,..".................""....."",...,..........................................,.... 18
SECTION 6.04 Advances ....................................."..,.""".,............................."........ 20
SECTION 6.05 Title Insurance..................,....,.,........................................................ 21
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TABLE OF CONTENTS
(continued)
Page
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ARTICLE VII . DAMAGE, DESTRUCTION, TITLE DEFECT AND
CONDEMNATION ............ , ,......................................... "................ , ,............ 21
SECTION 7.01 Damage, Destruction, Title Defect and Condemnation; Use of
Net Proceeds ................""..,... ......... ................................ .......... ........ 21
ARTICLE VIII 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 and
the Proj ecl",.................,."".,............................,................................ 28
SECTION 11.10 Project Completion........................................................................... 28
ARTICLE XII AFFIRMATIVE COVENANTS OF THE LESSEE ..................................... 29
SECTION 12.01 Budgets and Punctual Payment ........................................................ 29
SECTION 12.02 Books and Accounls; Financial Statements ..................................... 29
SECTION 12,03 Notificalion to the Lessor ................................................................. 30
SECTION 12.04 Protection of Security and Rights..................................................... 30
SECTION 12.05 Management of Properties................................................................ 30
SECTION 12.06 Reserved .........,............................""..",..................."",..,................, 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 and Project Access .............................................................. 32
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TABLE OF CONTENTS
(continued)
Page
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SECTION 12.12
SECTION 12.13
SECTION 12,14
Performance and Payment Bonds..................................................... 32
Notice of Event of Default ............................................................... 32
Compliance with State Contract Requirements................................ 32
ARTICLE XIII NEGATIVE 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.................................................................. 35
SECTION 14.05 Nel Lease ",...................................,'.................................................. 35
SECTION 14.06 Amendments to Facility Lease .........................................................35
SECTION 14.07 Reserved. ............................, ,............................................................ 35
SECTION 14,08 Partial Invalidity ".............................................................""".......... 35
SECTION 14,09 California Law; Venue ..................................................................... 35
SECTION 14.10 Section Headings"......................................................,..................... 35
SECTION 14.11 No Merger ........................................................................................ 35
EXHIBIT A - Description of the Project ..................................................................................A-I
- EXHIBIT B - Description of the Site........................................................................................ B-1
EXHIBIT C - Form of Resolution of Lessee ............................................................................C-I
EXHIBIT C-I Form of Certificate of Resolution...................................................................... C-3
EXHIBIT D - Project Costs ...............................",......."...",....,......,.........................................D-I
EXHIBIT E - Conditions Precedent to Disbursement .............................................................. E-I
EXHIBIT F - Base Rental Payments......................................................................................... F-I
EXHIBIT G - State Contract Requirements..............................................................................G-I
EXHIBIT H - Tax Certificate,..............."".,..............................................,.."..............,............H-I
EXHIBIT I - Certificate of Chief Financial Officer of the City of San Bernardino
(the "Lessee") .............."...... ........... ............,.",..",...""""" ......................." .......... I-I
EXHIBIT J -Reserved ........................,...................,.........,.."""""............................................. J-I
EXHIBIT K- Form of Certificate of the City Manager ...........................................................K-I
EXHIBIT L - Legal Opinion..........."",.............................,.."..............................................",.. L-I
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FACILITY LEASE
This FACILITY LEASE (the "Facility Lease") is executed and entered into as of
the Effective Date, by and between the CALIFORNIA INFRASTRUCTURE AND ECONOMIC
DEVELOPMENT BANK (the "Lessor"), duly organized and existing pursuant to the Bergeson-
Peace Infrastructure and Economic Development Bank Act, constituting Division I of Title 6.7
of the California Government Code (commencing at section 63000 thereof) as now in effect and
as it may from lime 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").
WIT N E SSE T H:
WHEREAS, the Lessee and the Lessor desire to finance the construction,
acquisition and installation of the Pavement Reconstruction and Rehabilitation Project, as
described in Exhibit A attached hereto (the "Project");
WHEREAS, the Lessee owns the real property situated at 1201 9th Street, 2121
Medical Center Drive, 2641 North E Street, 1640 Kendall Street, 1290 North Del Rosa Avenue,
282 West 4th Street, 3398 East Highland Avenue and 450 Vanderbilt Way all in San Bernardino,
CA, on which property is located the Fire Stations #2, #3, #4, #5, #6, #7, #8, and #11, described
in Exhibit B attached thereto (collectively, the "Facility");
_ WHEREAS, the Lessee has leased the Facility to the Lessor pursuanl to the Site
Lease, dated as of the Effective Dale, 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 lhat 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, 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
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WHEREAS, all acts, conditions and things required by law to exist, to have
happened and 10 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;
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 Developmenl Bank Act,
constituting Division I 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 Pavrnents
....... "Additional Rental Payments" means all amounts payable by the Lessee pursuant to
Section 5.01(b) hereof.
Base Rental Pavrnents
"Base Rental Paymenls" means all amounts payable by the Lessee as Base Rental
pursuanl to Section 5,OI(a) hereof.
Business Dav
"Business Day" means any day, Monday through Friday, which is not a legal holiday of
the State or the Truslee,
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 regulalions of the
Uniled Slales Departmenl of the Treasury issued thereunder, and in this regard reference 10 any
particular section of the Code shall include reference 10 all successors to such section of the
Code.
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Effective Date
"Effective Date" means April 15, 2006, 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.
Exoiry Date
"Expiry Date" means April 14, 2016, 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).
Facility Lease
"Facility Lease" means this facility lease, dated as of the Effective Date, 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 I 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.
Indcoendent 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 Lessee 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 term hereof; except that the initial Lease Year means the period from the Effective
Date to and including June 30, 2006 and the last Lease Year shall be that period from July I to
and including the day that this Facility Lease expires or is earlier terminated 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.
Ooerating Budget
"Operating Budget" means the annual approved budget of the Lessee which includes
Base Rental Payments and Additional Rental Payments due during the year.
-.. Ooinion of Counsel
"Opinion of Counsel" means a written opinion of counsel of recognized national standing
in the field oflaw 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.
Permitted Encumbrances
"Permitted Encumbrances" means, as of any particular time:
(I) liens for general ad valorem taxes and assessments, if any, not then
delinquenl, or which lhe Lessee may, pursuant to Seclion 6.02, permit 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
lhat has not been filed or perfected in the manner prescribed by law;
(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 lhe Effective Date and are acceptable to the Lessor; and
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_ (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.
Proiect
"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 63010(q) and the
Act and more particularly described in Exhibit A.
Proiect Account
"Project Accounl" means the account or subaccount by that name established by the
Lessor pursuant to Section 2.08.
Proiect Amount
"Project Amount" means ten million dollars ($10,000,000).
Proiect Costs
"Project Costs" means the costs of construction, acquisition and installation of the
"-- Project, as approved by lhe 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:
(I) a stalement that the person or firm making or giving such Report has read lhe
pertinent provisions of this Facility Lease to which such Report relates;
(2) a brief statement as 10 the nature and scope of the examinalion or investigation
upon which the Report is based; and
(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 lhe subject matter referred to in the Report,
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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
"Sile Lease" means the site lease, dated as of the Effective Date, 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.
ARTICLE II
THE FACILITY
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SECTION 2.01. Lease ofthe Facilitv. The Lessor hereby leases to the Lessee, and
the Lessee hereby rents and hires from the Lessor, the Facility on the conditions and terms
herein, The Lessee hereby agrees and covenants that during the term hereof, except as
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~ hereinafter provided, it will use the Facility for public purposes so as to afford the public the
benefils contemplated hereby and so as to permit the Lessor to carry out its agreemenls 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 ofEntrv and Insoection. The Lessor shall have the right to
enler the Facility and the Project and inspect the Facility and the Project 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
olherwise 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, orovided 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
wilh granting such remedy lhe same shall be also granted hereunder by an amendment to this
Facility Lease which shall in all instances be prior to and superior 10 any such assignmenl,
transfer or sublease.
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SECTION 2.05 Liens. In the event the Lessee shall at any time during the term
hereof cause any improvemenls 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
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
relaling to the Facility and shall keep the Facility free of any and all liens against the Facility or
the Lessor's interest therein, In lhe 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 ifso stayed such
stay thereafter expires, the Lessee shall cause each such lien to be fully discharged and released
al the time the performance of any obligalion 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
7
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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 ofFacilitv.
(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:
(I) A Certificate of the Lessee containing a description of all or part of
the Facility to be released and, in the event ofa 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 oflegal 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 obligalions of the
Lessee enforceable in accordance wilh their lerms;
(4) In the evenl of a Substitution, a policy oftitle insurance covering
the Substituted Property in an amount at least equal to the proportionate share of the Base Rental
Payments and Additional Rental Payments represented by the Substitution, insuring the Lessor's
interest in the Substituled Property (except any portion thereof which is not real property)
subject to Permitted Encumbrances;
(5) In the event ofa 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
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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 interesl with respect to the Proceeds Bonds to 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 (I) and (2) of Section 6.03(a) hereofwith 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 (I) and (2) above.
SECTION 2.07
Construction Contracls.
Construction. Acauisition and Installation of the Proiect:
(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 thaI 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.
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(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
Projecl Costs.
SECTION 2.08
Proiect Account.
(a) The Lessor hereby agrees to eSlablish a Project Account for the benefit of
the Lessee, and the Lessee, pursuant 10 resolution previously adopted in form substantially
similar 10 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)
(1) Moneys in the Project Account shall be disbursed solely upon
receipt by the CIEDB of invoices documenting, to the satisfaction of the CIEDB, that the Lessee
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.
c_
9
_ (2) Except for preliminary expenditures, no expenditure shall be
reimbursed if paid prior to September 27,2005. "Preliminary expenditures," as used in this
section, means architectural, engineering, surveying, soil and environmental testing and reports,
studies (including environmental impact, rate and feasibility studies), CEQA reports, permits and
similar costs incident to commencement of construction of the Project. which are paid prior to
September 27, 2005. Reimbursement of preliminary expenditures incurred prior to September
27,2005, are limited to twenty percent (20%) of the Project Amount.
(3) Preliminary expenditures do not include land acquisition, site
preparation or similar costs incident to the commencement of construction; such costs may be
reimbursed only if paid on or after Seplember 27,2005 and are not subject to a limitation,
(c) The Lessor shall encumber an amount equal to the Project Amounl 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 musl both: (i) begin Project construction no later than twelve
months after September 27,2005 , and (ii) submit invoices to the Lessor for the entire Project
Amount no later than November 14,2008. Iflhe Lessee fails to meet either of these conditions,
the Lessor may withhold any and all undisbursed funds in the Project Account pursuant to
Seclion 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) ten million dollars ($10,000,000).
(t) 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 Amounl, and the Lessee shall nol be relieved of its obligation even if the Lessor reduces
the Project Amount pursuanl 10 any provision hereunder.
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SECTION 2,09 Disbursemenl ofProiect Amount. Upon receipt ofa written
request for disbursement, the Lessor will disburse moneys in the Project Account to the Lessee
no more than once a month, in amounts of at least five thousand dollars ($5,000) 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
Projecl funds 10 be disbursed. If Lessee is authorized 10 bill for the cost of Lessee's employees
pursuant to Exhibit D, the disbursement request shall include documentation, to the satisfaction
of the Lessor, that costs incurred are directly for the Project, are not billed to other sources, and
are billed at hourly rates not to exceed Lessee's actual costs of salary and benefits, In addition,
all requests for payment shall be accompanied by a certification by the Lessee lhat 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
10
-.. 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 Account 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 retention fund for final
payment to certain contractors, the Lessor shall disburse Project funds in 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
Withholding ofProiect Amount
(a) The Lessor may withhold all or any portion of the Project Amount in the
-..
evenllhat:
(I) 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
(2) The Lessee is unable to demonstrate, to the satisfaction of the Lessor
the ability to complete the Projecl or to maintain adequate and timely progress toward completion
thereof
(b) In the event thaI 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 Amounl 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 thaI the withheld amount be applied as a prepayment pursuant to Section
5.05.
ARTICLE III
TERM OF THE FACILITY LEASE
SECTION 3.01.
Commencement and Termination of the Facility Lease; Vesting 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 April 14, 2021, the maximum expiry date. Ifprior to the Expiry Date, the rental payable
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.
(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 vesting of record.
ARTICLE IV
USE OF PROCEEDS; TAX COVENANTS; CONTINUING DISCLOSURE
SECTION 4.01. Use ofProiect Amount. The parties hereto agree that the Lessor shall
'_ apply funds from the Project Amount to the Project Account in the amounl often million dollars
($10,000,000).
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 Continuinl! 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
Exchange Commission.
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ARTICLE V
RENTAL PAYMENTS
SECTION 5.01. Rental Payments. 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.
(I) The Lessee shall deposit with the Lessor not later than each
February I and August I, commencing August 1,2006, 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 on the undisbursed funds in the Project Amount or two and thirty-seven hundredths
percent (2,37%), whichever is lower. The Lessee may choose to prepay the Base Rental
_ Payments pursuant to Section 5.05.
(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:
(I) a payment of an annual 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 10 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 thaI the amounl 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 (I) above with
the Lessor nol later than August I 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 directly 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 ofthe 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.
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(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 the
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 rale authorized by law from the date when the same is due
hereunder unlil the same shall be paid, Notwithstanding any dispute between lhe Lessee and the
Lessor, the Lessee shall make all renlal payments when due, without deduclion or offset of any
kind, and shall not wilhhold any renlal payments pending the final resolution of any such
dispute. In the evenl of a determinalion 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 lime of such determination.
(e) A one-time Facility Lease origination fee in the amount of eighty-five
thousand dollars ($85,000) shall be due and payable by the Lessee at the time of the first
disbursement and shall be payable from, the Project Account.
(f) 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
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14
"-- 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. In 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
exceed the appropriations then contained in the Lessee's Operating Budget.
SECTION 5.03, Aoolication 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.
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
respecl 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. In 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
lhis Facility Lease as provided in subsection (d) of See lion 2.04. Any abatement of rental
payments pursuant to this Section shall not be considered an Event of Default. The Lessee
waives lhe benefits of Civil Code sections 1932(2) and 1933(4) and any and all olher rights to
terminate lhis Facility Lease by virtue of any such interference and this Facility Lease shall
continue in full force and effect. Such abalement shall continue for the period commencing wilh
the date of such damage, destruction, title defect or condemnation and ending with the
substantial complelion oflhe work of repair or replacement of the portions of the Facilily so
damaged, destroyed. defective or condemned.
In the event lhal rental is abated, in whole or in part, pursuant to this Section
5,04 due 10 damage, destruction, litle defect or condemnation of any part of the Facilily and lhe
Lessee is unable to repair, replace or rebuild lhe 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 disasler relief in order to obtain funds 10 repair, replace or rebuild the Facility.
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SECTION 5,05.
Preoayment 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 prepaymenl
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
percenl (101%) of the outstanding principal amount; and (ijj) if the prepayment date is on or
after twelve years after the Effective Dale, the prepayment amount shall be one hundred percent
(100%) of the outstanding principal amount, without premium. Lessee shall notify the Lessor at
least sixty (60) days prior the date fixed for any prepayment made pursuant to this subsection
(b).
(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) 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 that is otherwise permitted by Section 5,05 herein.
(e) Extraordinarv Preoayment. Subject to the provisions of Section 7.01, the
Lessee may prepay, from Nel 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 amounls of principal components of Base Rental Payments which shall
be payable after such prepayment date shall each be as nearly proportional as praclicable to lhe
aggregate annual amounts of principal components of Base Rental Payments with respect 10 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 official duty of such officials to enable the Lessee to carry out and perform the agreements
and covenants contained herein agreed to be carried out and performed by the Lessee.
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'- THE OBLIGATION OF THE LESSEE TO MAKE BASE RENTAL PAYMENTS AND
ADDITIONAL RENTAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION OF
THE LESSEE FOR WHICH THE LESSEE IS OBLIGATED TO LEVY OR PLEDGE ANY
FORM OF TAXATION OR FOR WHICH THE LESSEE HAS LEVIED OR PLEDGED ANY
FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE
BASE RENTAL PAYMENTS AND ADDITIONAL RENTAL PAYMENTS CONSTITUTES
AN INDEBTEDNESS OF THE LESSEE, THE COUNTY OF SAN BERNARDINO, THE
STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE
MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR
RESTRICTION.
SECTION 5.07. Fair Rental Value. Base Rental Payments for each Lease Year
during the term of this Facility Lease shall constitute the total rental for said Lease Year and
shall be paid by or on behalf of the Lessee in each Lease Year for and in consideration of the
right of use and occupancy of the Facility during each such Lease Year. The parties hereto have
agreed and determined that such total Base Rental Payments for each Lease Year represents no
more than the fair rental value of the Facility for each such Lease Year. In making such
determination, consideration has been given to costs related to the Facility, other obligations of
the parties under this Facility Lease, the uses and purposes that may be served by the Facility,
and the benefits therefrom which will accrue to the Lessee and the general public.
ARTICLE VI
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MAINTENANCE; TAXES;
INSURANCE AND OTHER CHARGES
SECTION 6.01. Maintenance of the Facility bv the Lessee. The Lessee agrees that,
al 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
il 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 with
respect to real and personal property, respectively. 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 lhat may lawfully
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17
_.
be paid in installments over a period of years, the Lessee shall be obligated to pay only such
installmenls 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
respective amounts:
(I) 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
the Facility which it previously has maintained, it will promptly so notify the Lessor. The insurance
described in this paragraph (I) 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 amounl of any one 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 10 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 and additional
insured.
(2) Use and occupancy insurance against loss, total or partial, of the use
and occupancy of the Facility as a result of any of the hazards covered by the insurance required by
paragraph (I) 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 (I) above, which policy may
provide that insurance proceeds paid for coverages contemplated by paragraph (I) 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 leasl equal to the cumulative
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18
,--. 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
a loss payee and an additional insured.
(3) Workers' compensation insurance covering all employees working in
or on the Facility and the Project, in the same amount and type as other workers' compensation
insurance maintained by the Lessee for similar employees doing similar work; and the Lessee shall
also require any other person or entity working in or on the Facility and the Project 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, 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 and the Project,
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 a loss payee and an additional insured.
The Lessee shall collect, adjust and receive all moneys which may become due
'-- and payable under any policies contemplated by paragraphs (I) 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. The Lessor shall not be
responsible for the sufficiency of any insurance herein required. The Lessor 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,
(b) Notwithstanding the provisions of Section 6.03(a), as an alternative to
providing the insurance required by paragraphs (I), (3) and (4) of Section 6.03(a), the Lessee
may provide a self-insurance or self-funding melhod 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 retenlion amounts greater than those contemplated by paragraphs (1), (3) or (4) of Section
6.03(a). Any such self-insurance or self-funding mainlained by the Lessee pursuant to the
foregoing Seclions shall comply with the following terms:
(I) 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 (I), (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
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19
,-.
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 I of each year that is a Lease Year, the Lessee shall provide to the
Lessor, a report by either the independent accountants which provide the audit report on the Lessee's
annual audited financial statements or by an Insurance Consultant, as selected by the Lessee, as to
the appropriateness of the reserving 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 reserve 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 reserve fund, as determined by
the Insurance Consultant, shall be maintained.
(c) Any insurance policy issued pursuant to paragraph (I) 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 7.0 I.
The net proceeds, ifany, of the insurance policy described in paragraph (2) of Section 6.03(a)
shall, to lhe 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
10 lhe 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 lhe insurance report described in section 6.03 (b) (2) and file a Certificate
of the Lessee with the Lessor as a condition of the first disbursement and not later than July I of
each year, certifying that the insurance required by this Section is in full force and effecl and thaI
the Lessor is named as loss payees and additional insured on each insurance policy which this
Facility Lease requires to be so endorsed.
SECTION 6.04. Advances. In lhe 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.
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20
_.
SECTION 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
CL T A 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
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.
ARTICLE VII
DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION
SECTION 7.01.
Proceeds.
Damage. Destruction. Title Defect and Condemnation: Use of Net
(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
Improvements") by a peril covered by a policy of insurance described in Section 6.03(a)(I)
hereof (an "Insured Peril"); or (ii) title to, or the lemporary 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:
(I) 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 Improvements (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 the
approval of the Lessor. 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 estimated costs
of Reconstruction, the Damaged Improvements 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
21
._ 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
notice thereof delivered to Lessor within thirty (30) days after the Lessee obtains the written
estimate(s),
(3) Net Proceeds Sufficient to Preoav All Unoaid Base Rental Pavrnents,
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 10 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 Prcoav All Unoaid Base Rental
Pavrnents. If the Lessee does not exercise the election to reconstruct pursuant to Section 7.01(a)(2)
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; orovided,
that if the Lessee elects not to appropriate funds for such prepaymenl, 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 Lessorfor the
prepayment of Base Rental Payments and due and owing Additional Rental Payments.
(5) Management of Reconstruction. Ifthe Facility or any part thereof
becomes Damaged Improvements, the Lessee shall promptly cause, manage and supervise the
Reconstruction,
(b) The proceeds of any policy of litle insurance or condemnalion award
received by the Lessor in respect of the Facility shall be applied 10 prepay Base Rental
Payments.
ARTICLE VIII
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE FACILITY
SECTION 8.01. Disclaimer of Warranties. THE LESSOR MAKES NO
AGREEMENT, WARRANTY OR REPRESENT A nON, EITHER EXPRESS OR IMPLIED,
AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE OR FITNESS FOR USE OF THE FACILITY, OR WARRANTY
WITH RESPECT THERETO. THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS
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22
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NOT A MANUFACTURER OF ANY PORTION OF THE FACILITY OR A DEALER
THEREIN, THAT THE LESSEE LEASES THE FACILITY AS-IS, IT BEING AGREED
THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE 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 ofthis 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 10 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 bv Lessee, This Facility Lease and the interest of the
Lessee in lhe Facility may nol 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, prolect, 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
lhereof, and expenses in connection therewith, including, without limitation, counsel fees and
expenses as incurred, penallies and interest (collectively, a "Claim"), arising out of or as the
result of entering into the Facility Lease, and the acquisition, construclion, operation, use,
condilion, or possession of the Facility or the Project and any portion thereof, including:
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23
--
(I) any accident in connection with the operation, use, condition or
possession of the Facility or the Project 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) patent, trademark or copyright infringement as a consequence of the
operation of the Facility or the Project;
(3) strict liability in tort as a consequence of the operation of the Facility or
the Project;
(4) any claim based upon environmental law or regulation relating to the
Facility or the Project;
(5) any claim of any nature directly arising from or related to the Facility or
the Project, which claim is based upon the operation of the Facility or the Project from and after the
Effective Date;
(6) the existence, placement, delivery, storage or release of hazardous
materials on the Facility or the Project 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
hereoffor 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
againsl 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
lhis Facility Lease and lhe terms Evenl of Default and "default" shall mean, whenever they are
used in lhis Facility Lease, anyone or more of the following events:
(I) 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 lhe 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;
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24
-..
(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
10 il pursuant 10 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 connection 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 oflaw 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 lhe part of the Lessor or its assignee 10 terminate
this Facility Lease.
(2) Without terminating this Facility Lease, (i) to collect each installment of
rent as il becomes due and enforce any other term or provision hereof 10 be kept or performed by the
Lessee and/or (ii) to exercise any and all rights 10 retake possession of the Facility. In the event the
Lessor or its assignee does not elect to lerminate this Facility Lease in the manner provided for in
subparagraph (I) hereof, the Lessee shall remain liable and agrees to keep or perform all covenants
and conditions herein contained 10 be kept or performed by the Lessee and, to pay the rent to the end
of the lerm of this Facility Lease or, in the event that the Facility is re-Iet, to pay any deficiency in
rent that results therefrom; and further agrees to pay said rent and/or rent deficiency punctually at lhe
same time and in the same manner as hereinabove provided for the paymenl of rent hereunder
(without acceleration), notwithstanding the fact that the Lessor or ils assignee may have received in
previous years or may receive thereafter in subsequent years rental in excess of the rental herein
specified and notwilhstanding 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 assignee for the purpose of
--
25
-..
'-
-
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-Ietting shall constitute a surrender or termination of this
Facility Lease irrespective of the use or the term for which such re-Ietting 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 lerminate 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-Ietting 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 ilems thereof necessary to place the Facility or any items thereof in condition for re-Ietting
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) lhe Lessee's interesl 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 oflaw; 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
amendmenl of such act or acts, eilher 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 effecl a composition or extension of time to pay its debts, or asks, seeks or prays for
a reorganization or 10 effect a plan of reorganization or for a readjustment of its debts or for any
other similar relief, or if the Lessee shall make a general or any assignment for the benefit of its
creditors; or (iii) the Lessee shall abandon or vacale the Facility or any portion thereof (except
26
~ 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: Aoolication 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 Binding: Aooroval bv 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
enforcemenl 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 affecled.
SECTION 11,04, No Litigation. There is no action, suit, proceeding or investigation
al 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 Stale 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, nole, 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 bOlh,
would conslitute a default or an event of default under any such instrument.
SECTION 11.06. No Consent. Aooroval or Permission Necessarv. No consent or
approval of any trustee or holder of any indebtedness of the Lessee, and no consent, permission,
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
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27
~'
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 stale 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 Ooeration of Facility and the
Proiect. The Lessee has obtained all licenses, permits and approvals from any governmental
agency or authority having jurisdiction over the Lessee required for the operation of the Facility
and will obtain all licenses, permits and approvals from any governmental agency or authority
having jurisdiction over the Lessee required for the operation of the Project.
'-
SECTION 11.10.
Proiect 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 lax 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" wilhin lhe meaning oflhe 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 interesl whalsoever in the Project or in lhe 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,
-
28
-..
ARTICLE XII
AFFIRMATIVE COVENANTS OF THE LESSEE
SECTION 12.01.
Budgets and Punctual Pavrnents.
(a) The Lessee will annually budget and appropriate the Base Rental
Payments and use its best efforts to maintain sufficient general fund revenues to provide moneys
to fund all necessary and appropriate general fund operations.
(b) Not later than sixty (60) 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.
(c) 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 Facility and the
Project (which maybe 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 CIEDB annually as soon as
practicable, but in any event not laler lhan two hundred ten (210) days after the close of each
Fiscal Year, so long as this Facility Lease has not been discharged by the CIEDB, an audited
financial statement of the Lessee relating to the Project Area for the preceding Fiscal Year,
prepared by an Independenl Accountant; provided, however, that in the event that such audited
financial statement is not available by the above-referenced filing date, an unaudited financial
statement may be substituted therefore. In the event an unaudited financial statement is
submitted, the Lessee shall file the audited financial stalement with the CIEDB as soon as it
becomes available, The Lessee will furnish to the CIEDB such reasonable number of copies of
such financial stalements as may be required by the CIEDB 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:
-
29
-
(I) 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;
(3) Certification that the Lessee is in compliance with the Tax
Certificate, as sel forth in Exhibit H; and
(4) Such other information as may be reasonably required.
(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.
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 Security and Rights. The Lessee shall preserve and
-.. prolect lhe 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 ofProDerties, The Lessee shall manage and operate
the Facility and the Project in a sound and business-like manner and in conformity with all valid
requirements of any governmental authority.
SECTION 12.06,
Reserved.
SECTION 12.07, Further Assurances. The Lessee will adopl, 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 righlS 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 Projecl or any portion thereof to fail to constitute a "public development facility"
within the meaning of the Act.
-
30
_ (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 idenlifY 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
completion by providing a Certificate of the Lessee to the Lessor stating that (i) construction of
the Projecl 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
lhird 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 lhe design, construclion, 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.
-
SECTION 12.10.
Lessee's Assurances and Commitments.
(a) Compliance with Laws and Regulations. 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 paymenl of the Base Rental Paymenls and Additional Rental Payments.
(b) Archeological or Historical Resources. Should a potential archeological
or hislorical resource be discovered during construclion, 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 has determined appropriate aclions regarding preservation of the resource.
(c) Construction Activities. The Lessee shall assure that adequale supervision
and inspection of Project construction activities are maintained. The Lessor or the Lessor's
designee reserves the right to conducl 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 10 be conducted by and a report prepared by an Independent
Accountant.
'-'
31
'-'
SECTION 12.11. Facility and Proiect Access. The Lessee shall assure that the
Lessor or its designee will have suitable access to the Facility and the Project 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 and the Project.
SECTION 12.12,
Performance and Payment Bonds.
(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 Lessee be named as loss payee and additional insured 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.
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 Evenl 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,
32
-..
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
et seq.) the provisions of Article 9.5, Chapter I, Part I, Division 3, Title 2 of the Govemment
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
10 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 and the
Project.
ARTICLE XIV
MISCELLANEOUS
SECTION 14,01. Notices. All written notices to be given hereunder shall be given
by firsl class mail to the party entitled thereto al its address sel forth below, or at such other
address as such party may provide to the other parties in writing from time to time, namely:
-
33
...........
If to the Lessor:
California Infrastructure and Economic Development Bank
Attn: Credit Support Manager, CIEDB B05-064
P.O. Box 2830
Sacramento, California 95812-2830
Or, if for purposes of overnight mail, to:
California Infrastructure and Economic Development Bank
Attn: Credit Support Manager, CIEDB B05-064
100 I I Street, 19th floor
Sacramento, California 95814
Or to such other address as may be designated in writing by the Lessor.
If to the Lessee:
The City of San Bernardino
300 North D Street
San Bernardino, CA 92418
Attn: City Manager
-..
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 interprelalion, performance, or payment for work performed under this
Facility Lease.
(b) The Lessee Project manager shall be the City Manager or such other
person as may be designaled in writing by the City Manager. 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. Binding Effect. This Facility Lease shall inure to the benefit of
and shall be binding upon lhe Lessor and lhe Lessee and their respective successors and
assIgnees.
--
34
-
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 absolutely 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,
SECTION 14,08, Partial Invalidity, If 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 extenl 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 Headings, All seclion headings contained herein are for
convenience of reference only and are not intended to define or limil the scope of any provision
hereof.
SECTION 14.11. No Merger. This Facility Lease shall not operate as a merger of
the Lessee's leasehold eslate in the Facility pursuanl to this Facility Lease and its fee estate in
the Site.
[The balance of this page is intentionally left blank.]
.........
35
-
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
THE CITY OF SAN BERNARDINO
-..
By
Patrick J. Morris
Mayor
Approved as to form and legal content:
~ J-'j
James F. Penman
City Attorney
."
Attest
By
Rachel G. Clark
City Clerk
-
36
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
M~;", D." (0'" Ad"Pf" r,}, eb
Vole: Ayes Nays
Change 10 motion 10 amend original documenls D
Item #
(0
.JD~b r ~g
Abslain
Resolulion #
Absenl
Companion Resolulions
NulllVoid After: days I
Resolulion # On Allachmenls: D
PUBLISH D
RECORD W/COUNTY D
Nole on Resolution of attachmenl slored separalely: D
POST D
Date Senl to Mayor: t{" Lt, €I b.
Dale of Mayor's Signature: \{t ~ ,ok,
Dale of Clerk/CDC Signalure: L{... s-=- {)b
By:
Reso. Log Updated: ~
Seal Impressed: ~/
Reso, # on SlaffReport c(
2nd Reminder Letter Sent:
Date Relumed: f)5;-/5-Ob
Nol Relumed: D
Date MemolLetter Sent for Signature:
I" Reminder LeIter Sent:
4-11-()(Q
Requesl for Council Aclion & Staff Report Altached:
Updated Prior Resolulions (Olher Than Below):
Updaled CITY Personnel Folders (6413,6429,6433, 10584, 10585, 12634):
Updaled CDC Personnel Folders (5557):
Updaled Traffic Folders (3985, 8234, 655, 92-389):
Copies Distributed to: ~
Animal Control rb'J EDA
City Administrator Facililies
City Attorney Finance
Code Compliance D Fire Departmenl D
Developmenl Services D Human Resources D
Olhers:
/
Yes
Yes
Yes
Yes
Yes
No_ By__
No /By_
No ~YY,_
NO~_
No By ~
Information Services D
Parks & Recreation D
Police Departmenl D
Public Services D
Waler Departmenl D
Notes:
(I.ttlhd ,'b~ ~tolj m.l\~ .5f!tD/o~ 10;~q
Ready to File: _
Date:
Revised 12/18/03
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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: 9Q9.384.5158
www.sbcity.org
'"
April 11,2006
Mr, Tom Martin, Loan Officer
California Infraslruclure and Economic Development Bank
100 I I Streel, 19th Floor
Sacramento, CA 95814
Dear Mr. Martin:
Al lhe Mayor and Common Council meeling of April 3, 2006, lhe City of San Bernardino adopted
Resolution 2006-88 - Resolution 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.
Enclosed are one (I) original Facility Lease and one (1) original Site Lease 10 be executed and nolarized
by Slanlon C. Hazelroth, Execulive Direclor, and Blake Fowler, Assislanl Executive Direclor for
California Infrastruclure and Economic Developmenl Bank. Please oblain signatures in lhe appropriale
localions and record lhe original Facility Lease and Sile Lease. Please forward a fully execuled
conformed copy 10 lhe City Clerk's Office, Attn: Eileen Gomez, P.O. Box 1318, San Bernardino, CA
92402, as soon as possible.
If you have any queslions, please do nol hesilale 10 conlacl me al (909) 384-5002.
Sincerely,
._--;;..,-'/7 ~
/
"'-----~T.""t~.:.;.;:::-..-./- ,.,/
(
Eileen Gomez
Senior Secrelary
,/'
Enclosure
Cc: Teri Baker, Senior Administralive Analysl
City Manager's Office, San Bernardino
CITY OF SAN BERNARDINO
ADOPTED SHARED VALUES: Integrity' Accountability' Respect for Human Dignity' Honesty
....
~
I BANK
California Infrastructure and Ecol&l)MiIfl~ttlClPll11ent Bank
2006 Mft,Y ! 5 PH 3: 23
May 9, 2006
Arnold Schwarzenegger
Governor City of San Bernardino, City Clerk's Office
Attn: Eileen Gomez
POBox 1318
San Bernardino, CA 92402
Board Members:
Sunne Wright McPeak
Chair
Secretary, Business,
Transportation and Housing
Agency
Philip Angelides
State Treasurer
Michael C. Genest
Director
Department of Finance
Rosario Marin
Secretary, State and
Consumer Services Agency
Executive Director:
Stanton C. Hazelroth
Mailing Address:
P.O. Box 2830
Sacramento, CA 95812-2830
Office Address:
10011 Street, 19'" Floor
Sacramento, CA 95814
(916) 322-1399
(916) 322-6314 FAX
www.ibank.ca.gov
RE:
Facility and Site Lease Agreements #CIEDB B05-064.
Dear Ms. Gomez:
Congratulations on the execution ofthe Facility and Site Lease Agreements
#CIEDB B05-064, between the California Infrastructure and Economic
Development Bank and the City of San Bernardino, dated April 15, 2006.
Enclosed are signed originals for your records. We sent the complete
original agreements to First American Title Company, attention: Gary R.
Chaffin at 323 Court Street, San Bernardino, CA 9240 I for recording today
(UPS Second Day delivery, lracking #K050 473 843 0). We also ordered
the title insurance required for this agreement. We asked Mr. Chaffin to call
Teri Baker al your office, prior to recording and issuing the title insurance.
Please note that we edited the amortization schedule (Exhibit F) slightly to
begin interest accrual on May 15,2006 (vs. April 15, 2006 in the original
draft). This was to set the interest accrual date closer to the date the
Agreements are recorded.
Before disbursements can be made, the items in Exhibit E, Conditions
Precedent to Disbursement, must be met. Another copy of this agreement
will be sent to you soon with a Desk Reference Manual designed to help
guide you through compliance with the Agreement.
Call me at (916) 322-6719, or tmartin@ibank.ca.gov regarding any
questions.
Sincerely,
~~
Tom Martin, Loan Officer
Enclosures
Cc: Teri Baker, Senior Administrative Analyst
Tom Martin
Loan Officer
P.O. Box 2830, Sacramento, CA 95812-2830
10011 Street, 19m Floor, Sacramento, CA 95814
9163226719 9163197788
tmartin@ibank.ca.gov
www.ibank.ca.gov