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HomeMy WebLinkAbout10-City Manager 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. - "- -.. CCOfP1f 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 III III III III III III III III /1\ No L' iJ /3 / [) 0J -.. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 '- ......... 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 - 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 '- 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 "- TABLE OF CONTENTS Page - 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 - TABLE OF CONTENTS (continued) Page -""-- 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 --- ii TABLE OF CONTENTS (continued) Page -- 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 -- iii -.. 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 "'- 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. - 2 - 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. - 3 "- 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 -.. 4 _ (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, - 5 - 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 '- 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 6 ~ 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. -.. 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 - 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; - (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 - 8 '- 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. -- (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. -.. 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. - 11 "- (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. -.. 12 - 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. - 13 - (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. -- (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 - 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. - 15 ........ 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. - 16 '- 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 - 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 '- 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 -- 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 -.. 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. -.. 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 -.. 22 - 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: -.. 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; -.. 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 - 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 FecEx, USA Airbill Express FadE> T,aoking Numb., 830720229950 From PlosS8prinr.nrJpressna,d. Sender'sFedEx Date 04/11/06 Account Number Eileen Gomez Sender's N,m, City Clerk 1302-1453-3 Ph,,, 1 909 1 384-5102 Comoanv City of Soan Rp-TTl3rdino 300 North "n" Street, City Clerk, 2nd Floor Address DeptJAoorlSuitelRoOOl San Bernardino ~- CA 92415 '''"' ZIP 2 Your Internal Billing Reference Rrst24charoct.",...llapl"'aro"or'\",co Resolution No. 2006-88 3 ro Recipient's N,m, Hr. Tom. Hartin Ph,,, 1916 1322-6719 Loan Officer ~nv California Infrastructure * Economic Developm.ent Bank. Addre" 1001 I Street 19th Floor TO-HOW"..FedEJci<H:II1ioo,primFedExadd'." Wec,"notoelivo'lllP,O,box..orP_D.ZIP,ode,. Sacramento OeplJAoor/Suits/Room COy Sacramento StateCA 95814 ZIP Questions 1 Visit our Web site at fedex.com or call l'800.Go.FedEx" l800}463-3339. Byusingtl1isAirbillyouagre_etothessrvicecondrtionsonthebackofthisAirbill and in our cUJTentSeMcBGulde.lndudlngtermsthatllm~ourllabllrty, form I.D.No 0200 ~ ~~-t--1 + Over'lirJllt Piickifgesuptu 15lJlbs. 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DtherPkg loc.lu.;e,F,JE, Bp,'o,& T"bB,and """",,e, "'" 2 ,HOLDWeekda_v -.Jat FedExLocahOll --, HOLD Saturday I at FedExLocatmn n ~ , 6 Special Handling l J SA~~Y.~:ivety . ~J SUN~YDelivery A,'''.-a''eo"lyl,),F.obPrlOr~i ~"rn'g\1t,";F,u&10"j ',,,leclllp,,:I., Doasthisshipme~ICO"lnin dnngarousgoods? ~ r- iX~:er"I",'hed '_J ~~,~CiUNl645_ Shi~pe(' Do,I,,,I,on Q,oger""Good'i,rcl,O",Ir.oico,mC'10",n'ppoo"FeoExp."'9in(iOrwit'lFedExb:(r,Ho'J"'''''ce N,",v"lablewrttl F"II,f"",(h'emigbl CargD kg Aircraft Only " < ~ " ;:;; g w ", 7 Payment BilftD: ~r 'IRecipient A'clNc.'I'Sec\lOn Iwllo,bille, 'I Third Party L_ i Credit Card Cash/Check "" ~ Total Packages f ToIBlDeclaredValuet ---- .00 TotalWeight - $ T(llIrliabilrtyislimrtedto$lOOlJolessyaudeclareahigherv.lue,Seeb,dlordmail' 8 Release Signature S,gow.,11I1orileaeiiverywithouluDlilmingSJgn,,",< Bysigoing~O,uauthD'i'eU'lOdel,"er1hisShipmemwitt1outobta;ningasignature ,nd,greetomdemoifvandlloldusharmlessfromany,esuttillgcl"ms 0:".- :',,, I"DO.P,," 'Io':r.llo.'~:"8S~ 731JC f,dE,.PRINTfD IN U S.A G8FE 7101 f<>dExU,eOnlv 14041 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