Loading...
HomeMy WebLinkAbout1984-210 (South Valle Public Improvements Project)RESOLUTION NO. 84-210 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING THE ISSUANCE BY THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO OF ITS CERTIFICATES OF PARTICIPATION, 1984 (SOUTH VALLE PUBLIC IMPROVEMENTS PROJECT), APPROVING AND MAKING CERTAIN DETERMINATIONS RELATING THERETO WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a redevelopment agency (a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Community Redevelopment Law (Part 1 of Division 24 (commencing with Section 33000) of the Health and Safety Code of the State of California) and the powers of the Agency include the power to enter into lease agreements with the City of San Bernardino (the "City") and to authorize a Trustee to issue participation interests in such lease agreement in furtherance of any of its corporate purposes; and WHEREAS, the City has previously adopted Resolution No.84-184 on May 14, 1984, approving the form of the Trust Agreement with the Trustee and the Lease Agreement with the Agency; and WHEREAS, the Community Development Commission of the City of San Bernardino acting on behalf of the Agency has adopted its Resolution entitled: ; and "RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO, CALIFORNIA, APPROVING AND AUTHORIZING THE EXECUTION OF A CERTAIN LEASE AGREEMENT AND A REIMBURSEMENT AGREEMENT AND APPROVING A CERTAIN ASSIGNMENT AND TRUST AGREEMENT AS TO FORM IN CONNECTION WITH THE SOUTH VALLE PUBLIC IMPROVEMENTS PROJECT" WHEREAS, under and pursuant to the above Resolution and the Trust Indenture, the Agency has authorized the issuance of $2,740,000 Certificates of - 1 - Participation, 1984 (South Valle Public Improvements Project) (the "Certificates of Participation"). NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, CALIFORNIA, AS FOLLOWS: Section 1. Approval of Issuance of Certificates of Participation. The issuance of a principal amount of $2,740,000 of Certificates of Participation, 1984 (South Valle Public Improvements Project), for the corporate purposes of the Agency aiding in the financing of the Lease Agreement dated May 1, 1984, and for other purposes related thereto, all of which constitute a "redevelopment activity", as such term is defined in Health and Safety Code Section 33678, is hereby authorized and approved pursuant to Health and Safety Code Section 33640. Section 2. Approval of Documents. The City hereby approves the final form of the Lease Agreement by and between the City and the Agency, and the Trust Agreement by and among the City, the Agency and the Trustee and authorizes the execution of the final form of such documents when the same shall be presented for execution by the Mayor and the City Clerk or such other appropriate City official after approval of same by the City Attorney substantially in the form of the documents as attached hereto as Exhibits "A" and "B", respectively. Section 3. Effective Date. This Resolution shall take effect upon adoption. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a regular _ meeting thereof, held on the 4_t_h_ __ _ day of -111„e , 1984, by the following vote, to wit: -2- AYES: Council Members CastanedaL_Reill:. Hernandez, T_ Marks, Frazier, Strickler NAYS: None ABSENT: Council Member nuiel Clt� Clerk The foregoing resolution is hereby approved this vie day of June , 1984. May r of the Ci y of San Bernardino Approved as to form: =• City Attorney -3- Upa"90 b71 . Wow%#. Suite 100 Woodland Hills, CA 91367 TRUSTEE AGREEMENT THIS AGREEMENT, made and entered into as of the day of June, 1984, by and between the Redevelopment Agency of the City of San Bernardino (hereinafter called the "Agency") and Bank of California (hereinafter -eaUed the "Bank'): WITH ESSETH: WHEREAS, the Agency intends to issue Two Million Seven Hundred Forty Thousand Dollars ($2,740,000) principal amount of its Certificates of Participation, 1984 (South Valle Public Improvements Proejct) (the "Certificates of Participation"); and WHEREAS, the Bank, upon request of the Agency, is willing to act as Trustee and as Paying Agent for said Certificates of Participation at the Bank's offices located in the City of San Francisco, California; and WHEREAS, it is mutually desirable that an Agreement be entered into between the parties to provide for such trustee and Paying Agent services. NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants herein contained, agree as follows: Section 1. The Bank shall perform such duties as are imposed on it as Trustee pursuant to the Trust Agreement by and among the City, the Agency and the Trustee dated as of June 1, 1984 (the "Trust Agreement"). Section 2. The Bank shall cause the principal of the Certificates of Participation to be paid in accordance with the terms thereof upon presentation of the same for payment or for collection upon maturity to the Bank. The Bank shall cause the interest on the Certificates of Participation to be paid by check or draft mailed to the registered owner as his or her name appears in the register to be maintained by the Bank. The Agency shall cause to be made available to the Bank all funds necessary in order to so honor said Certificates of Participation and the -1- interest payments thereon, provided that this paragraph shall not in any instance (1) require the Agency to make available funds other than from the payments to be made by the City pursuant to the Lease Agreement and as provided in the Trust Agreement or (2) require payment or disbursement of any funds in excess of the amount then on deposit for payment of said Certificates of Participation and the interest thereon. Section 3. Subject to the provisions of Section 2 hereof, the Agency will cause to be deposited, at least five (5) days prior to the next installment date of said interest payments and/or maturing Certificates of Participation, with the Corporate Trust Department of the Bank, funds for payment of said installment of interest payments and/or maturing Certificates of Participation. Said funds are to be deposited to an account designated as the "Certificate Fund". The funds so deposited shall be held by the Bank in its Corporate Trust Department and applied to the payment of interest payments and/or maturing Certificates of Participation and for such other purposes as are set forth in the Trust Agreement. From said funds the Bank agrees to pay the interest payments and/or maturing Certificates of Participation presented to it for payment (except that interest on the Certificates of Participation is payable by check or draft mailed to the registered owner as his or her name appears on the register maintained by the Bank), and to cancel them when paid. Section 4. The Bank shall render to the Agency monthly statements showing amounts deposited, paid or disbursed, and annually shall deliver all cancelled Certificates of Participation to the Agency or destroy them and furnish a destruction certificate as directed by the Agency. Section 5. The Agency shall pay to the Bank, on a semiannual basis, the fees set forth in Exhibit "A" attached hereto, plus all incidental expenses for which reimbursement is claimed pursuant to Section 6 hereof. The schedule of fees attached hereto as Exhibit "A" is subject to renegotiation should conditions warrant, and charges for services not specifically set forth in Exhibit "A" shall be established by mutual written agreement of the parties. Section 6. In addition to the fees provided in Section 5, the Agency shall reimburse the Bank for the cost of reasonable out-of-pocket expenses -2- incurred in the performance of its duties hereunder, including, but not limited to, services of counsel, stationery, postage, insurance, registration fees and telephone tolls. Section 7. At least ten (10) days prior to the first payment or disbursement of principal or interest on the Certificates of Participation under the provisions of this Agreement, the Agency shall furnish the Bank with three (3) _ specimen Certificates of Participation. Section 6. The terms and conditions of this Agreement are intended for the mutual benefit of the Agency and the Bank exclusively, and are not intended to give any third party any rights or claims, contractual or otherwise, hereunder. Section 9. The Agency agrees that the Bank shall not be required to honor any request made by anyone other than the Agency itself to stop payment on any lost, destroyed, mutilated, or stolen Certificates of Participation, or to pay any such Certificates of Participation or interest thereon upon which there may be an adverse claimant. The Agency will in such instances give the Bank written instructions as to the disposition of such adverse claim as the circumstances may warrant, and hereby agrees to hold the Bank harmless from any and all claims whenever the Bank acts in accordance with such instructions. IN WITNESS WHEREOF the parties hereto have caused these presents to be duly executed as of the day and year first above written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: T �_ Chairman By: Secretary (SEAL) BANK OF CALIFORNIA By: Title: -3- 5/07/84 RECORDING REQUESTED BY ) AND WHEN RECORDED RETURN TO: ) ) LAW OFFICES OF ) TIMOTHY J. SABO ) Suite 100 ) 5855 Topanga Canyon Boulevard ) Woodland Hills, California 91367 ) ) or recorder's use LEASE AGREEMENT CITY OF SAN BERNARDINO (South Valle Public Improvements Project) THIS LEASE AGREEMENT dated as of May 1, 1984, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency") and the City of San Bernardino, California, a municipal corporation, organized and existing under and by virtue of the laws of the State of California (the "City"). WITNESSETH: That for and in consideration of the mutual promises and agreements herein contained, the parties hereto agree as follows: Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this Lease, have the meanings herein specified. "Additional Rental" means that rental due for the Project as defined in Section 6(b) of this Lease. "Assignment and Trust Agreement" means that certain Assignment and Trust Agreement dated as of June 1, 1984, by and among the Agency, the City and Security Pacific National Bank (the "Trustee") pertaining to the assignment of the Agency's rights pursuant to this Lease Agreement to the Trustee on behalf of the holders of the Certificates of Participation and the form of and manner of payment with respect to the Certificates of Participation. "Base Rental" means the total rental due for the Project when completed, but does not include Additional Rental. "Certificates of Participation" mean those certain Certificates of Participation evidencing a proportionate ownership interest in the Lease Agree- ment as authorized pursuant to the Trust Agreement. "Construction Contract" means the construction contract or contracts providing for the construction of the Facilities, including, without limitation, the plans and specifications, any addenda thereto, and other construction documents, a copy of which is or will be on file in the office of the City Clerk of the City and the Secretary of the Agency and which is incorporated herein by referenee:r -1- "Facilities" means all public street improvements and drainage facilities together with structures, improvements and all facilities and improve- ments related thereto or provided therefor, together with all facilities appurtenant thereto or provided therefor as more particularly identified in the Construction Contract. "Fiscal Year" means the fiscal year as established from time to time by the City, being on the date of the Assignment and Trust Agreement the period from July 1 to and including the following June 30. "Project" means the Site and Facilities thereon. Said Project is sometimes referred to as "Leased Premises". "Reimbursement Agreement" means that certain agreement entered Into by and between the Agency and the City dated as of May 1, 1984, pursuant to which the Agency has obligated itself to make certain payments of tax increment revenues to the City as reimbursement for Base Rental payments hereunder. "Site" means that certain real property located in the City of San Bernardino, County of San Bernardino, State of California, consisting of real property on which the Facilities described herein are to be located, and more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. "Term" means the term of this Lease as provided in Section 3 hereof. "Treasurer" means the Treasurer of the Agency. "Trustee" means the trustee appointed under and defined by the Assignments and Trust Agreement and any successor appointed as therein provided. Section 2. Site Lease. For and in consideration of the sum of one dollar ($1.001, all -of which rental shall be payable in full within ten (10) days of the issuance of the Certificates of Participation, the City hereby leases the Site to the Agency, and the Agency hereby leases the Site from the City for a term commencing on June 1, 1984 (the "Site Lease"). The term of the Site Lease shall end on (i) June 1, 1987, or (ii) one (1) day after the payment or the provision for the payment of the Certificates of Participation or other indebtedness of the Agency incurred to acquire the Site and construct the Facilities and to discharge the Assignment and Trust Agreement by its terms, whether earlier or later than (i), but in no event later than June 1, 1987. The Site Lease may be amended by the approval and execution of a subsequent site lease in a manner and for the purposes similar with respect to the approval and execution of subsequent project leases as provided in Section 5 hereof. Section 3. Pulse of Site Lease. The Agency shall use the Site solely for the purpose -of constructing the Facilities thereon and leasing the Site and the Facilities to the City pursuant to the Project Lease set forth in Section 4 hereof; provided, however, that in the event of default by the City under the Project Lease, the Agency may exercise the remedies provided in Section 21 hereof. MIC Section 4. Pro act Lease. The Agency hereby leases the Project to the City and the City hereby leases the Project from the Agency, subject to the terms and conditions hereof (the "Project Lease"). Section 5. Term; Transfer of Title. The term of this Project Lease shall commence on June 1, 1984, provided all of the Facilities are substantially completed and written notice thereof has been served on the City, or on any later date of such substantial completion, including, without limitation, any extension of the completion date as may be provided under any Construction Contract. Although this contemplates all the Facilities being substantially completed and the City taking possession of them on the same date, it shall not preclude the City and the Agency from agreeing that the City may take possession of all or part of the parts thereof being substantially completed, and, in such case, the term of this Lease shall commence upon such occupancy. This Project Lease shall terminate on June 1, 1987, or such earlier date when the Certificates of Participation have been retired or provision for payment has been provided for pursuant thereto, and, at such time, any surplus funds remaining in the hands of the Trustee shall be paid to the Agency and the City pro rate in relation to the amount of Base Rental paid by the City hereunder and the amount of the tax increment revenues paid by the Agency to the City under the Reimbursement Agreement as of the date of the retirement of the outstanding Certificates of Participation. It is hereby expressly acknowledged and agreed by and between the Agency and the City that the City shall lease the Facilities pursuant to this Project Lease for a period of three (3) years through and including June 1, 1987, for the Base Rental payments in an amount equal to that as shall be set forth on Exhibit "B" together with Additional Rental payments as provided in Section 6(b) hereof. The Agency shall utilize its best efforts to issue tax allocation bonds, notes or other forms of indebtedness payable in whole or in part from the tax Increment revenues of the proposed South Valle Redevelopment Project, if and when the same may have been duly approved by the Agency and the City, for the purpose of providing funds for the exercise by the City of the purchase option as provided in Section 27 hereof and to thus refund, redeem prior to maturity or otherwise pay the Outstanding principal amount of the Certificates on or before the maturity date thereof. In the event the Agency has not, on or before June 1, 1987, either refunded the outstanding Certificates of Participation or otherwise provided for the payment of all principal thereof to become due and payable on or before the maturity date of the Certificates of Participation, the Agency and the City hereby agree to utilize best faith efforts to negotiate and execute a subsequent lease agreement including therein a subsequent project lease upon such terms and conditions, including payment of rental amounts, that would permit the Agency to issue its refunding certificates of participation or other refunding obligations to thereby provide for the payment of the then outstanding principal amount of the Certificates of Participation. Upon the City paying all Base Rental payments as required by this Agreement or exercising its option to purchase the Project as described in Section 27 of this Lease and the retirement of the Certificates of Participation and the expiration or termination of the term hereof, title to the Facilities and any Improvements thereon or additions thereto shall be transferred directly to the City In accordance with the provisions of the Assignment and Trust Agreement. - Section 6. Rental. The City shall pay the Base Rental and the Additional Rental to the Trustee as assignee of the Agency in the amounts, at the -3- times and in the manner set forth herein, said amounts constituting in the aggregate the total of the annual rentals payable under this Lease as follows: (a) Base Rental. For the period commencing on (1) June 1, 1986,.or (2) the date on which the City takes possession of all of the Facilities, whichever (1) or (2) occurs later, the City agrees to pay to the Trustee for the account of the holders of the Certificates of Participation rent for each Fiscal 'Year on November 1 of each Fiscal Year during the term hereof consisting o;interest at e times and in the amounts specified in Exhibiiit"1111 attached hereto and Incorporated herein, and rent shall cease when the Certificates of Participation have been retired or provision for payment has been made. Said Exhibit "B" shall be_eompleted at such time as the Certificates of Participation shall be sold at public sale and the interest rate per annum payable thereon shall have been determined after such public sale. (b) Additional Rental. In addition to and after the eommencment of the Base Rental hereinabove set forth, the City shall pay to the Trustee for the account of the Agency an amount or amounts (hereinafter called "Additional Rental") equivalent to the sum of the following: (i) All taxes and assessments of any nature whatsoever, including, but not limited to, excise taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes, if any, levied upon the Project or upon the Agency's and City's interest therein or upon the Agency's and City's operation thereof or the Agency's and City's rental income derived therefrom. (it) All expenses (not otherwise paid or provided for out of the proceeds of the sale of the Certificates of Participation of the Agency) incidental to the execution and delivery of the Certificates of Participation and all administrative costs of the Agency, including without limiting the generality of the foregoing, all reasonable and necessary salaries, wages, expenses, compensation and indemnification of the Trustee as provided in and in furtherance of its duties under the Assignment and Trust Agreement, fees and charges of auditors, accountants, architects, attorneys and engineers and all other necessary administrative charges of the Agency or charges required to be paid by it in order to comply with the terms of the Certificates of Participation or of the Assignment and Trust Agreement and to defend the Agency and its members and any other redevelopment related costs directly or indirectly attributable to the Project which the City may loan or advance to the Agency including site preparation costs, certain redevelopment planning and implementation costs and other public improvement costs which pay or provide for the payment thereof. (iii) All costs and expenses which the Agency may incur in consequence of or because of any default by the City under this Lease, including reasonable attorneys' fees and costs of suit in equity or action at law to enforce the terms and conditions of this Lease. The Additional Rental payable hereunder shall be paid by the City within ten (10) days after notice in writing from the Agency to the City stating the amount of Additional Rental then due and payable and the purpose thereof; provided that the City's liability for Additional Rental shall be limited to the -4- balance due under the Assignment and Trust Agreement. Nothing herein contained shall prevent the City from making from time to time contributions or advances to the Agency for any purpose now or hereafter authorized by law. (c) Consideration. The payments of Base Rental and Additional Rental hereunder or each Fiscal Year of the term of this Lease shall constitute the total rental for said Fiscal Year and shall be paid by the City for and in consideration of the right of use and occupancy, and the continued quiet use and enjoyment, of the Leased Premises for and during said Fiscal Year. The parties hereto have agreed and determined that such total rental represents the fair rental value of the Leased Premises. In making such determination, consideration has been given to the costs of acquisition, construction and financing of the Facilities, the uses and purposes which will be served by the Facilities and the benefits therefrom which will accrue to the parties to the Agreement and the general public by reason of the Facilities. (d) Budget. The City shall take such action as may be necessary to include and maintain all such total rental payments (Base Rental and Additional Rental) due hereunder in each Fiscal Year commencinZ in the 1986-87 Fiscal Year in its budget for such Fiscal Year or pursuant to separate resolution and fu7r7—er shall make the necessary appropriations for all such rental payments. The City shall furnish to the Agency and to the Trustee under the Assignment and Trust Agreement copies of the budget or such yA -X - other evidence of the City taking formal action with respect to the appropriation of money to pay Base Rental and Additional Rental hereunder at least fifteen (15) days before final adoption thereof. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be ministerial duties imposed by law and it shall be the ministerial duty of each and every public official of the City to take such action and do such things as are required by law in the performance of such official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease agreed to be carried out and performed by the City. (e) Pavment. Each Base Rental payment and each Additional Rental payment shall be paid in lawful money of the United States of America, by warrant or check drawn against funds of the City, at the office of the Trustee in Los Angeles, California, or at such other place or places as may be set forth in the Assignment and Trust Agreement. Any Base Rental payment, or portion thereof, which is not paid when due shall remain due and payable until received by the Trustee. Each Base Rental payment and each Additional Rental payment which is not paid when due shall bear interest at a rate which is the same as the average interest rate per annum with respect to the Certificates of Participation from the date on which the Base Rental payment or Additional Rental payment, as the case may be, becomes due until the same is paid. Notwithstanding any dispute between the Agency and the City hereunder, the City shall make all rental payments when due and shall not withhold any rental payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said rental payments or any portion thereof, said payments or excess of payments as the case may be shall be credited against subsequent rental payments due hereunder. (f) Credit on Base Rental. There shall be credited against Base Rental any amount required to be so credited under the Assignment and Trust Agreement. (g) Advance Rental. In addition to the payment of Base Rental and Additional Rental, the City shall pay advance rental for the use and occupancy of the Facilities in an amount equal to the interest payable on the Certificates of Participation for the period from the date of the delivery of the Certificates of Participation to and including June 1, 1986. Such advance rental shall be paid in whole or in part from the proceeds of the sale of the Certificates of Participation. Section 7. Construction of Project. The Agency or its agent shall diligently proceed to construct, or cause to be constructed, the Facilities on the Site in the manner required by the Construction Contract. The Agency shall appoint a construction agent with respect to the construction of the Project and is hereby authorized to award and execute the Construction Contract, submit requisitions for payment from the Construction Fund created and established in the Assignment and Trust Agreement, apply for any and all governmental permits and take all actions required under the California Environmental Quality Act of 1970 and take any and all other actions reasonable and necessary in connection with the construction of the Facilities. The Construction Contract shall be awarded to a contractor or contractors licensed under the laws of the State of California and such Construction Contract shall be awarded after competitive bidding following -5- the procedures required by the applicable laws of the State of California relating to the awarding of contracts of a similar nature by the Agency and in accordance with the standard bid and contract award procedures of the City. For the purpose of paying the cost of construction of the Facilities on the Site and all costs and expenses incidental thereto, including, but not limited to, architectural fees for design of the Facilities, the Agency shall authorize the sale, execution and delivery of the Certificates of Participation pursuant to the Assignment and Trust Agree- ment. Such construction shall be substantially completed within three (3) years of the date of complete execution hereof; provided, however, that such completion date shall be extended for such further period if the Agency and the City, or any contractor or contractors, are delayed by: (1) acts or omissions of the City or the Agency or of any employee or agent of the City or the Agency, including changes ordered in the work, or (2) litigation brought against the City or the. Agency which enjoins the construction, or (3) any act of God which the City or the Agency could not reasonably have foreseen and provided for, or (4) any strikes, boycotts, or like obstructive actions by employee or labor organizations which are beyond the control of the City or the Agency and which the City or the Agency cannot overcome with reasonable effort and could not reasonably have foreseen and provided for, or (5) any war or declaration of a state of national emergency, or (6) the imposition by government action or authority of restrictions upon the procurement of labor or materials necessary for the completion of the Facilities. All work, construction and materials shall be in accordance with the Construction Contract; provided, however, that subsequent to the delivery of the Certificates of Participation, neither party hereto may make changes, additions, deletions or modifications in the plans and specifications which result in an increase in the cost of constructing the Facilities without the prior approval of the other party; provided, however, that unless sufficient additional funds are provided therefor (i) the cost of the Project shall not exceed that which is established at the time when the Certificates of Participation are delivered, and GO the cost of change orders shall not exceed the reserve therefor established at such time. Neither party shall take action which extends the period of construction beyond the period for which the Agency has funded interest on the Certificates of Participa- tion unless sufficient additional funds are provided therefor by the party requesting such extension. Any moneys remaining in the Construction Fund to be established under the Assignment and Trust Agreement after the construction and completion of the Facilities shall be applied by the Agency as provided in the Assignment and Trust Agreement. Section B. Maintenance and Operation. The City shall, at its own expense, maintain or cause to be maintained the Leased Premises and all improvements thereon in good order, condition and repair. It is understood and agreed that in consideration of the payment by the City of the rental herein provided for, the Agency is only obligated to furnish the Leased Premises, and the Agency shall have no obligation to incur any expenses of any kind or character in connection with the management, operation or maintenance of the Leased Premises during the term of this Lease. The City shall keep the Leased Premises and any and all improvements thereto free and clear of all liens, charges and encumbrances. -6- Section 9. Additions and Improvements. The City shall have the right during the term his this ease to make any additions or improvements to the Leased Premises, to attach fixtures, structures or signs, and to affix any personal property to the improvements on the Leased Premises, provided the use of the Leased Premises for the purposes contemplated in this Lease are not impaired. Title to all personal property placed in any of the improvements on the Leased Premises shall remain in the City. Section 10. Insurance. The City shall maintain or cause to be maintained such policies of insurance as the City customarily maintains with regard to other public improvements which are similar in nature to the Project including public liability insurance against claims for bodily injury or death, or damage to property occurring upon, in or about the Project, and such other insurance as may be agreed upon from time -to -time by the City and the Agency. All insurance herein provided for shall be affected under policies issued by insurers of recognized responsibility, licensed or admitted to do business in the State of California. All policies or certificates shall name the City, the Agency and the Trustee as named insureds. All policies or certificates issued by the respective insurers for insurance shall provide that such policies or certificates shall not be cancelled or materially changed without at least thirty (30) days' prior written notice to the Trustee, and shall carry loss payable endorsements in favor of the Trustee where applicable. Certified copies of such policies (or other evidence of coverage satisfactory to the Trustee) shall be deposited with the Trustee by the Agency, together with appropriate evidence of payment of the premiums therefor; and, at least ten (10) days prior to the expiration dates of expiring policies or certificates, certified copies of renewal or new policies or certificates (or other evidence of coverage satisfactory to the Trustee) shall be deposited with the Trustee. All premiums and charges due and payable for all of the aforesaid insurance, which are not paid as a part of the Construction Contract or from the proceeds of the sale of the Certificates of Participation, shall be paid by the City as Additional Rental hereunder. Any such premium for a period partly within such period shall be prorated. The Agency shall cause the City to carry such other insurance as is required by the Assignment and Trust Agreement. Notwithstanding the generality of the foregoing, the City shall not be required to maintain or cause to be maintained more insurance than is specifically referred to above or any insurance unless the same is insurance which is available from reputable insurers on the open market. The phrase "insurance 'which is available from reputable insurers on the open market" means standard policies of insurance with standard deductibles offered by reputable insurers in a competitive market. In the event the City fails to maintain the insurance required to be maintained hereunder, the Agency shall have the right to procure and maintain L. -T- such insurance and charge the City for the cost thereof as Additional Rental under Section 6(b) of this Lease. Section 11. Damage by Fire, Earthquake. It is expressly understood and agreed that the rentals hereunder shall become due only in consideration of the right to occupy and use the Leased Premises from year to year, and, except as herein provided, it is the responsibility of the Agency to provide such right at all times. In the event of destruction or damage to the Leased Premises by fire or earthquake or other casualty or events so that they become wholly or partly unusable, the Agency, at its option, may do either of the following: (1) Rebuild and repair the Leased Premises so that they shall be restored to use, in which case this Lease shall remain in full force and effect. Any excess of insurance proceeds resulting from such destruction or damage in excess of the amount expended for such repairing or rebuilding, shall be paid to the Trustee, or (2) Declare this Lease to the City terminated and use any money collected from insurance against the destruction of or damage to the Leased Premises to the extent necessary to retire any outstanding Certificates of Participation; provided, however, that if the Agency shall have sufficient funds from the proceeds of insurance or otherwise for the necessary repairing or rebuilding, the Agency shall not proceed under this option without the City's consent. During such time as the Leased Premises are unusable, rent shall cease. No further rental payments shall accrue until such Leased Premises are again available for lease in a suitable condition and payments already made, if any, shall be equitably abated and adjusted accordingly. In the event of partial damage to, or destruction of, the Leased Premises, so as to render a portion thereof unusable by the City, such rental payments (including those already made, if any) shall during the period of the partial unusability of the Leased Premises be in an amount that represents the fair market rental value of the remainder of the Leased Premises usuable by the City. Section 12. Assignment Sublease and Certificates of Participation. Neither this Lease nor any interest of the City herein shall, at any time ter the date hereof, without the prior written consent of the Agency, be mortgaged, pledged, assigned or transferred by the City by voluntary act or by operation of law, or otherwise, except as specifically provided herein. The City shall at all s times remain liable for the performance of the covenants and conditions on its part to be performed, notwithstanding any assigning, transferring or subletting which may be made. The City shall have the right -to sublease or permit the use of all or any part of the Leased Premises, but nothing herein contained shall be construed to relieve the City from any other obligations contained herein. In no event shall the City sublease or permit the use of all or any part of the Leased Premises so as to cause the interest component of Base Rental payments to be subject to federal or California personal income tax. = -8- The Agency sha11 have the right to assign its interest in this Lease to the Trustee on behalf of the holders of the Certificates of Participation pursuant to the Trust Agreement. The parties hereto agree to execute any and all documents necessary and proper in connection therewith. Any items required or permitted to be done by the Agency may, is so provided under the Assignment and Trust Agreement, be performed by the Trustee thereunder. Section 13. Eminent Domain. If the whole of the Leased Premises, or so much thereof as to render the remainder unusable for the purposes for which the same was constructed, shall be taken under the power of eminent domain, then this Lease shall terminate as of the day possession shall be so taken. if less than the whole of the Leased Premises shall be taken under the power of eminent domain, and the remainder is usable for the Project purposes, then this Lease shall continue in full force and effect and shall not be terminated by virtue of such taking (and the parties waive the benefit of any law to the contrary), in which event there shall be a partial abatement of the rent hereunder in an amount equivalent to the amount by which the annual payments of the principal of, and interest on, the outstanding Certificates of Participation will be reduced in any applicable year by the application of the award in eminent domain to the call for redemption of outstanding Certificates of Participation. Any award made in eminent domain proceedings for the taking or damaging of the Leased Premises in whole or in part shall be paid to the Trustee for the direct benefit of the holders of the Certificates of Participation and shall be used by the Trustee (together with any other money which shall be or may be made available for such purpose) to call a principal amount of Certificates of Participation in each of the remaining maturities so that, as nearly as possible in the discretion of the Trustee, equal annual payments of principal and interest on the outstanding Certificates of Participation remaining will be maintained after said call. In the event the amount so paid to the Trustee shall be more than sufficient to retire the Certificates of Participation then outstanding any such excess shall be paid by the Trustee to the Agency and the City pro reta in relation to the total amount of Base Rental paid by the City hereunder and the total amount of tax increment paid by the Agency under the Reimbursement Agreement as of the date of the retirement of the outstanding Certificates of Participation. Section 14. Right of Entrv. The Agency and its designated representa- tives shall have the right to enter upon the Leased Premises during reasonable business hours (and in emergencies at all times): (i) to inspect the same, (ii) for any purpose connected with the Agency's rights or obligations under this Lease, or (iii) for all other lawful purposes. Section 15. Liens. Except for payments made or required to be made under the Assignment and Trust Agreement, the City shall pay or cause to be paid, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment alleged to have been furnished or to be furnished to or for, in, upon or about the Leased Premises and which may be secured by any mechanics', materialman's or other lien against the Leased Premises, the City's and/or Agency's interest therein, and shall cause 4each such -9- lien to be fully discharged and released; provided, however, that if the City and/or the Agency desires to contest any such lien, this may be done, and if such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof, is not promptly stayed, or if so stayed and said stay thereafter expires, then, and in any such event, the City shall forthwith pay and discharge said judgment Section 16. Taxes. The parties understand and agree that the Leased Premises constitute public property free and exempt from all taxation; however, the Agency agrees to take whatever steps may be necessary, upon written request by the City, to contest any proposed tax or assessment, or to take steps necessary to recover any tax or assessment paid. The City agrees to reimburse the Agency for any and all costs and expenses thus incurred by the Agency. Section 17. uiet Enjoyment. The parties hereto mutually covenant and agree that the City, by keeping and performing the convenants and agreements herein contained, shall at all times during the term, peaceably and quietly, have, hold and enjoy the Leased Premises. Section 18. Law Governir . This Lease is made in the State of California under the Constitution and laws of such State and is to be so construed. Section 19. Notices. All notices, statements, demands, requests, consents, approvals, authorizations, offers, agreements, appointments or designa- tions hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party, if sent by United States registered mail, return receipt requested, postage prepaid and addressed as follows: City: City Clerk, City of San Bernardino 300 North "D" Street San Bernardino, Caifornia 92418 Agency: Secretary of the Redevelopment Agency of the City of San Bernardino 300 North "D" Street San Bernardino, Caifornia 92418 Section 20. Waiver. The waiver by the Agency of any breach by the City of any term, covenant or condition hereof shall not operate as a waiver of any subsequent breach of the same or any other term, covenant or condition hereof. Section 21. Default by the City. If (a) the City shall fail to pay any rental payable hereunder within fifteen 15) days from the date such rental is payable, or (b) the City shall fail to keep any such other terms, covenants or conditions contained herein for a period of twenty-five (25) days after written notice thereof from the Agency to the City, or (c) the City shall abandon or vacate the Leased Premises, or (d) the City's interest in this Lease or any part thereof shall be assigned or transferred without the written consent of the Agency, either voluntarily or by operation of law, or (e) the City shall file any petition or1nstitute any proceedings wherein or, whereby the City asks or seeks or prays to be -10- adjudicated a bankrupt, or to be discharged from any or all of its debts or obligations, or offers to the City's creditors to effect a composition or extension of time to pay the City's debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization, or for a readjustment of the City's debts, or for any other similar relief, or (f) any such petition or any such proceedings of the same or similar kind or character shall be filed, instituted or taken against the City, then and in any of such events the City shall be deemed to be in default hereunder. - in accordance with Civil Code Section 1951.4, notwithstanding the breach, if any, by the City of any terms, covenants or conditions hereof and notwithstanding any abandonment by the City of the Leased Premises, the Project Lease shall continue in full force and effect for such period of time as the Agency does not terminate the right of the City to possession of the Leased Premises, and the Agency may at any time enforce any or all rights granted to the Agency hereunder, including the right to recover the full amounts of the Base Rental and the Additional Rental with respect to the Leased Premises as the same becomes due and payable hereunder. If the City should, after notice of such default, fail to remedy any default with all reasonable dispatch within thirty (30) days of the date of such event of default, then the Agency shall have the right, at its option, without any further demand or notice (i) to terminate this Lease and to re-enter the Leased Premises and eject all parties in possession thereof therefrom, using all necessary force so to do, and sell the Facilities subject to the Site Lease or GO to re-enter the Leased Premises and eject therefrom, using all necessary force so to do, and, without terminating this Lease, re -let the Leased Premises, or any part thereof, as the agent and for the account of the City upon such terms and conditions as the Agency may deem advisable, in which event the rents received on such re letting shall be applied first to the expenses of re -letting and collection, including necessary renovation and alteration of the Leased Premises, reasonable attorneys' fees, and any real estate commissions actually paid, and thereafter toward payment of all sums due or to become due to the Agency hereunder, and if a sufficient sum shall not be thus realized to pay such sums and other charges, the City shall pay the Agency annually any cumulative net deficiency existing on the date when Base Rental and/or Additional Rental are due hereunder. The foregoing remedies of the Agency are in addition to and not exclusive of any other remedy of the Agency. Any such re-entry shall be allowed by the City without hindrance and the Agency shall not be liable in damages for any such re-entry or be guilty of trespass. The Agency shall not exercise its remedies hereunder so as to cause the interest component of Base Rental payments to be subject to federal or California personal income taxes. Section 22. 'Net -Net -Net Lease. This Lease shall be deemed and construed to be a "net -net -net lease_"_in" that the City hereby agrees that the rentals provided for herein shall be an absolute net return to the Agency, free and clear of any expenses, charges or set -offs whatsoever related to the operation, maintenance and repair of the Project. Section 23. Execution. This Lease may be simultaneously executed in any dumber of counterparts, each of which when so executed shall be deemed to be an original, but all together shall constitute but one and the same Lease, and it is also understood and agreed that separate counterparts of this Lease may be separately executed by the Agency and the City, all with the same full force and effect as though the same counterpart had been executed simultaneously by both the Agency and the City. Section 24. Validit If any one or more of the terms, provisions, promises, covenants or conditions of this Lease shall to any extent be -adjudged invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, each and all of the remaining terms, provisions, promises, covenants and conditions of this Lease shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. If for any reason this Lease shall be held be a court of competent jurisdiction void, voidable or unenforceable by the Agency or by the City, or if for any reason it is held by such a court that the covenants and conditions of the City hereunder, including the covenant to pay rents hereunder, is unenforceable for the full term hereunder, then and in such event for and in consideration of the right of the City to possess, occupy and use the Leased Premises, which right in such event is hereby granted, this Lease shall thereupon become, and shall be deemed to be, a lease from year to year under which the annual rentals herein specified will be paid by the City. If the Treasurer of the Agency is substituted for the Trustee pursuant to the Assignment and Trust Agreement, all references herein to Trustee shall be deemed to mean the Treasurer as the case may be. Section 25. Headings. Any headings preceding the texts of the several Sections hereof shall be solely for convenience of reference and shall not constitute a part of this Lease, nor shall they affect its meaning, construction or effect. Section 26. Non-discrimination. The City covenants by and for itself, its administrators and assigns, and all persons claiming under or through it, and this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy., tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased. Section 27. Option to Purchase. The City shall have the option to purchase the Project prior to June 1, 1987, but only if it is not in default hereunder with respect to the Project and only in the manner provided in this Section. The City may exercise its option to purchase the Project on any prepayment date by paying the prepayment price applicable to the Project as shown in Exhibit "C" attached hereto and incorporated herein, together with the interest component of -12- the Base Rental payment required to be paid on such prepayment date. Such prepayment price shall be deposited by the Trustee in the Certificate Fund to be applied to the redemption of Certificates of Participation pursuant to Section 3.12 of the Assignment and Trust Agreement. The City shall give the Trustee notice of Its intention to exercise its option not less than sixty (60) days in advance of the date of exercise, and shall deposit the prepayment price, together with the interest component of the Base Rental payment required to be paid on such prepayment date. If the City exercises its option to purchase the Project pursuant to this Section on any prepayment date, (1) the City shall not be required to pay the principal component of the Base Rental payment required to paid on such prepayment date, and (2) any amount then on hand in the Construction Fund, the Reserve Fund or the Certificate Fund established pursuant to Article VI of the Assignment and Trust Agreement, shall be applied towards the payment of the applicable prepayment price by the City. Upon exercise of its option by the City and the redemption of the Certificates of Participation, all right, title and interest of the Agency in and to the Project shall be transferred to the City. IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed and attested by their proper officers thereunto duly authorized, and their official seals to be hereto affixed, all as of the day and year first above written. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO By: Chairman (SEAL) ATTEST: Secretary CITY OF SAN BERNARDINO, CALIFORNIA By: - Mayor (SEAL) ATTEST: By. _ City Clerk -13- STATE OF CALIFORNIA as, COUNTY OF SAN BERNARDINO On this day of , before me, a Notary Public, State of C i ornia, duly commissioned and sworn, personally appeared and -, known to me to be the Chairman and Secretary, respectively, of the Redevelopment Agency of the City of San Bernardino, a public corporation, that executed the within instrument on behalf of said public corporation therein named, and acknowledged to me that such public corporation executed the within instrument pursuant to a resolution of the Members of said public corporation. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year in this certificate first above written. Notary Public State of California (SEAL) STATE OF CALIFORNIA ss. COUNTY OF SAN BERNARDINO On this day of , before me, a Notary Public, State of California, duly commissioned and sworn, personally appeared and known , to me to be the —Mayor and City Clerk, respectively, o�the City of San Bernardino, California, a municipal corporation, that executed the within instrument on behalf of said municipal corporation therein named, and acknowledged to me that such public corporation executed the within instrument pursuant to a resolution of its city council. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year in this certificate first above written. (SEAL) 'notary Public T State of California -14- EXHIBIT "A" LEGAL DESCRIPTION OF LEASED PREMISES N -15- EXHIBIT "B" Accumulation Date for Year Ending 1 BASE RENTAL PAYMENTS Principal or Sinking Fund Components -16- Interest Component Total Pavments EXHIBIT "C" CITY OF SAN BERNARDINO OPTION TO PURCHASE - PREPAYMENT SCHEDULE -17-