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Home My WebLink AboutOrdinance 1681 N.C.S. 04/06/1987.~~ ~ E~ ~~°6VE DATE APR 6 1987 13 `~~ ~ ~; ~~ n~(~ APR ° 6' ORDINANCE NO 1681. N. C. S. ~~Q~LI~tJ ~©~ U Introduced by - Seconded by Lynn [~oolsey ®ice Mayor Tenter AN ORDINANCE AUTHORIZING LEAS-E OF PARCELS OF REAL PROPERTY LOCATED AT 969 PETALUMA BOULEVARD NORT$, AND LUCCHESI PARK ON NORTH MCDOWELL AVENUE, PETALUMA, CALIFORNIA BE IT ORDAINED by the Council of the City of Petaluma as follows: Section 1. The real property located at (1) 969 Petaluma Boulevard North and (2) Lucchesi Park on North McDowell, Avenue (to be used for the community center), Petaluma, California, are hereby authorized to be leased under the terms and conditions set forth in the agreements entitled "Site Lease" and "Lease./Purchase Agreement" attached hereto as Exhibit "A", and available for review by the public at the office of the City Clerk. Section 2. This ordinance, by unanimous vote of the Councilmembers present, shall become. effective immediately as an urgency measure under Section 76A of the City Charter. The Council finds and declares that the immediate effectiveness of this ordinance is necessary fcr the immediate preservation of the public peace and safety in that a portion of the property to be leased is necessary for use as a police station,. and the lease transactions must be completed promptly in order to effectuate the financing in accordance with City needs. Section 3, The action of the City Clerk in posting a copy of this ordinance on the bulletin board at the City Hall for at least two days prior to the adoption hereof, by unanimous vote of the Counclmembers present, is approved; and the Council finds that such posting meets the requirements of Section 45 of the City .. >f ,~~ 'Charter. Section 4. The City Clerk be, and she is hereby directed to publish this ordinance for the period and in the manner as required by the City Charter. INTRODUCED AND ORDERED published this 6th day of April, 1987 by the following vote: AYES: Davis, Woolsey, Cavanagh, Balsha~o, Vice Mayor Tencer, Mayor Hilligoss NOES: ~ ABSENT: Sobel ATTEST: _--- . City Attorney 2 Mayor APPROVED: 1~~ 1 Y ' i ~.' t i , DRAFT OF 3/31/87 Recording Requested By: ) City of Petaluma ) When Recorded Mail To: Sturgis, Ness, Brunsela & Sperry ) a professional corporation ) P. 0. BOX 8808 ) Emeryville, CA 94662 ) Attn: Daniel C. Bort ) This document is recorded for the benefit of the City of Petaluma, and recording is fee exempt under §27383 of the Government Code. LEASE/PURCHASE AGREEMENT Dated as of April 15, 1987 between the CALIFORNIA PUBLIC FACI'LITLES & EQULPMENT LEASING CORPORAT30N as Lessor and the CITY OF PETALUMA as Lessee ~~ A o~~.1 s s i N c s i 'i TABLE OF CONTENTS Pacre ARTICLE I DEFINITIONS AND EXHIBITS SECTION 1.1 Definitions and Rules of.Construction ..... 3 SECTION 1.2 Exhibits .................. ................ 4 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 2.1 - Representations, Covenants, and "Warranties of the Less'e;e ................ 4 SECTION 2.2 Representations, Covenants and Warranties of the Lessor ................ 6 ARTICLE III ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT SECTION 3.1 Deposit of Certificate Proceeds ........... 7 SECTION 3.2 Acquisition, Construction and Improvement of the Project ............~• 7 SECTION 3.3 Compliance with Law .... ................. . 8 SECTION 3.4 Payment of Project Costs. .................. 8 SECTION 3.5 Completion Date; Ce°rtifca.tion ............ 8 SECTION 3.6 Su'bsti-ttttion ........... ................. 8 SECTION 3.7 Finan'eng Statements ...................... 8 SECTION 3.8 Furfhe"r Assurances and Corrective Instruments .................. 9 ARTICLE IV AGREEMENT TO LEASE; TERM OF LEASE;. LEASE PAYMENTS; TITLE TO THE PROJECT SECTION 4.1 Lease ..................................... 9 SECTION 4.2 Tear-m ...................................... 9 SECTION 4.3 Extension of Lease Term-. . ................. 10 SECTION 4.4 Lease Payments ............................ 10 SECTION 4.5 No Withholding ............................ 11 SECTION 4.6 Fair Rental Value ......................... 11 i 24$ 7004/2 -' Page SECTION 4.7 Budget and Appropriation .................. 11 SECTION 4.8 Assignment of Lease .Payments .............. 12 SECTION 4.9 Use and Possession ........................ 12 SECTION 4.10 Abatement of Lease Payments in Event-of Loss of Use .................... 12 SECTION 4.11 Additional Payments ....................... 13 - SECTION 4.12 Net-Net-Net Lease ........................ 13 ARTICLE V INSURANCE SECTION 5.1 Public Liability and Property :Damage ......................... 13 SECTION 5.2 Workers' Compensation ..................... 14 SECTION 5.3 Casuahty and Theft Insurance ............................... 14 SECTION 5.4 Rental Interruption Insurance ............. 15 SECTION 5.5 Title Insurance ........ .................. 15 SECTION 5.6 General Insurance Provisions .............. 16 SECTION 5,7 Cooperation ............................... 16 -- -- - ARTLCLE VI _ DAMAGE, DESTRUCTION AND EMINENT DOMAIN; -- USE OF NET PROCEEDS SECTION 6.1 Application of Net Proceeds ............... 17 ARTICLE VII COVENANTS WITH RESPECT TO THE PROJECT SECTION 7.1 Use of the Project ........................ 18 SECTION 7.2 Title to the Project ...................... 1S SECTION 7.3 Option to Purchase ....................... 19 :SECTION 7.4 Quiet Enjoyment. .. ........................ 19 SECTION 7.5 Installation of Lessee's Personal Property ....................... 20 SECTION 7.6 Access to the Project ..................... 20 SECTION 7.7 Maintenance, Utilities, Taxes and Assessments ......................... 20 SECTION 7.8 Modification of the Project ............... 21 SECTION 7.9 Liens ..................................... 22 ii 2487004/2 ~~. ~ 5~1 NCS • .~ Pa e SECTION 7.10 Lessor's Disclaimer of Warranties ......... 22 SECTION 7.11 Lessee's Right to Enforce Warranties of Vendors or Contractors ...... ...................... 23 ASSIGNMENT, SECTION 8.1 Assignment SECTION 8.2 Assignment by the 'Les SECTION 8.3 Amendments ARTICLE VIII SUBLEASING AND AMENDMENT by the Lessor ....... .......... 23 and Subleasing see ............................. 23 and Modifications .............. 24 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION 9.1 Events of Default Defined ................. 24 SECTION 9.2 Remedies on Default ....................... 25 SECTION 9.3 No Remedy Exclusive ....................... 28 SECTION 9.4 Agreement to Pay Attorneys' Fees and Expenses .... .. .............. . 28 SECTION 9.5 No Additional Waiver Implied by One Waiver ........................... 29 SECTION 9.6 Application of the Pr,o,ceeds from the Re-Lease of the Project ............. 29 SECTION 9.7 Trustee and Certificate Owners to Exercise Rights ...................... 29 ARTICLE X PREPAYMENT OF LEASE PAYMENTS SECTION 10.1 Mandatory Prepayment From Net Proceeds ............................ 29 SECTION 1:0.2 Optional Prepayment ..................... 29 SECTION 10.3 Credit for Amounts on Deposit ............. 30 SECTION 10.4 Effect of 'Prepayment ...................... 30 iii 2487004/2 ~~~~. ~. 6 ~ ~ N C S } Paqe ARTICLE XI MISCELLANEOUS SECTION 11.1 Notices ................................... 30 SECTION 11.2 Binding Effect ............................ 31 SECTION 11.3 Sever,ability ...... ....................... 31 SECTION 11.4 Execution in Counterparts ................. 31 SECTION 1.1.5 Applicable Law ............................ 31 SECTION 11.6 Amended and Restated Lease ................ 31 Exhibit A - Schedule of Lease Payments ................... A-1 Exhibit B - General Description of the Project ........... B-1 24:8700.4/2 iv LEASE/PURCHASE AGREEMENT THIS LEASE/PURCHASE AGREEMENT, dated as of April 15, 1987, by and between the CALIFORNIA PUBLLC FACILITIES & EQUIPMENT LEASING CORPORATION, a corporation duly organized and existing under the laws of the State of California, as lessor (the "Lessor"), and the.GITY OF PETALUMA, a charter city duly organized and existing under the Constitution and .laws of said State of California, a°s lessee (the ~"Lessee") ; W I T N E S S E T' H: REGARDING the refinancing of certain obligations: WHEREAS, the Lessee and the Lessor have heretofore er_tered into that certain Site-Lease dated as of June ~1, 1985 (the "1985 Site. Lease") and the Lease Agreement dated as of June 1, 1985 (the "1985 Lease") and that certain Trust Agreement dated as of June 1, 1985 was entered into by and between the Lessee and Seattle-First National Bank ("1985 Trustee") (the "1985 Trust Agreement") .and certain other documents were executed for the purpose of assisting the Lessee to finance the acQUisition and refurbishment of its police facilities building described in such documents (the "1985 Project"); and WHEREAS, at such time the Lessee and the 1985 Trustee caused to be executed and delivered certain Certificates of Participation (Petaluma Police Facilities Project) dated as of June 1, 1985 (the "`1,98.5 Certificates") to facilitate the financing of the 19,.8^5 Project; and WHEREAS, the. Lessee and the Lessor have determined that it would be in the best interests of the-Le see, the Lessor and the residents of the Lessee to refinance such 1985 Certificates and the 1985 Project; and WHEREAS, pursuant to its Charter and Sect-ion 37350 of the California Government Code the Lessee may enter into leases and agreements relating to real property and-buildings~to be used by the Lessee, including: (a) one or more buildings located or to be located on one or more sites; and (b) the construction of any building located on a site to be leased; 2487004/2 1 ~~~,168~NCS r WHEREAS, the Lessor and Lessee wish to provide financing for the acquisition, equipping and construction, as described herein, of a community described ~n Exhibit B hereto (the "Building'') by entering into this Lease and authorizing and directing the execution and delivery of Certificates of Participation, described below, evidencing an undivided and proportionate interest n~lease payments to be made. by the Lessee hereunder; and WHEREAS, t e Lessee has available the site upon which the Building is to be constructed (collectively with the site of the 1985 Project described above, the "°Site".more particularly described in Exhibit A to the Amended and Restated Site Lease referred to in the next paragraph); and WHEREAS, pursuant to its Charter and Section 37350 of the Government Code, the City Council of the Lessee has entered into an Amended and Restated Site Lease of even date herewith (the "Sit e. Lease") with the Lessor under which the Lessor has agreed to construct and equip or provide for the construction and equipping of the Building together with the Equipment described below and in Exhibit C hereto (collectively with the refinancing of the 1985 Project described above, the "Project") to be used~by the Lessee upon the Site (as provided in. Section 4 thereof `and. Section. 3.2 hereof) and lease back the Site to the Lessee pursuant to Section 4.1 hereof, and which Site Lease provide that the title to such Project shall vest in the Lesaee at the expiration of such Site Lease (as provided in-Section 7 thereof), and contains other terms ar_d conditions as the City~Council.of the Lessee deems to be in the best interest of the Lessee; and WHEREAS, th'eref ore, the Lessor has made or will make available said Site upon which the Project to be used by the Lessee is located and the Lessee owns such Site; and WHEREAS, the Lesaee proposes to acquire certain equipment (.the "Equipment'), described in Exhibit C hereto, by entering into this Lease; NOW, THEREFORE, in consider ati,on of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows: 2487004/2 2 ~~~.~681NCS i ARTICLE I DEFINITIONS AND EXHIBITS SECTION 1.1 Definitions and Rule's of Construction. Unless the context otherwise requires, the capitalized terms used herein shall, for-ail purposes of this Lease, have the meanings specified in the Trust Agreement, dated as of the date hereof, by and among Security Pacific National Bank, as Trustee thereunder, and the Lessee, together with any amendments thereof or supplements thereto permitted to be made thereunder; and the additional terms defined on this. Section shall, for all purposes of this Lease, have the meanings herein specified. Unless the context otherwise indicates, words importing the singular number shall~nclude the plural number and vice versa. The terms "hereby", "hereof", '"hereto", "herein", "hereunder" and any similar terms, as used in this Lease, refer to this Lease as a whole. "Agency Agreement" means the Agency Agreement, dated as of the date hereof by and between the Lessor and the Lessee, and any duly authorized and executed amendment thereto. "Building" means the Building described in Exhibit B hereto. "E'q-uipment" means the Equipment listed in Exhibit C hereto. "Project" means the Project described in Exhibit D hereto. "Permitted Encumbrances" means, as of any particular time: (i) Liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the Lessee may, pursuant to provisions of Article V hereof, permit to remain unpaid; (ii)-the Assignment Agreement, as it may be amended from time to time; (iii) this Lease, as it may b.e amended from time to time; (iv) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (v) easements, rights of way, mineral. rights, drilling rights and other rights, reservations, covenants,, conditions or restrictions which exist of record as of the Closing Date and which Lessee certifies in writing will not materahly impair the use of the Project by the-Lessee; and (vi) easements, rights of way, mineral rights, drilling rights and otrier rights, reservations, covenants, conditions or restrictions established following the date of recordation of this Lease and to which the Lessor and the Lessee consent in writing. "Site" means the site or sites descri-bed in Exhibit A to the Amended and Restated Site Lease, dated the date hereof between the Lessor and the Lessee. 2487004/2 3 ~~~~~ ~~~NCS "Vendors" or "Contractors" means the persons with whom the Lessor, or t`he Lessee as agent of the Lessor, has contracted for the acquisition, delivery or installation of the Equipment and the remodeling, rehabilitation and/or construction of the Buihdings. SECTION 1.2 Exhibits. .The following Exhibits are attached to, and by reference made a part of, this Lease: Exhibit A: S'ehedule of Lease Payment to be paid by the Lessee to-the Le sor, showing the Lease Payment Date and amount of each Lease Payment. Exhibit B: General Description of the Building. Exhibit C: General Description of the Equipment. Exhibit D: General Description of the Project. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRA,vTIES SECTION 2.1 Representations, Covenants as the L-essee,. The Lessee represents, covenants the Lessor. as follows: (a) Due Organization and Existence. charter city and municipal corporation of the organized and existing under the Consti ution State. zd Warranties of 'and warrants to The Lessee is a State, duly and laws of the (b) Autho'rzati.on; Enforceability. The Constitution and laws of the State authorize the Lessee to enter into this Lease, the Site Lease, the Agency Agreement, the Escrow Agreement and the Tr.uS`t Agreement and to enter into the transact-ions contemplated by and. to carry out its obligations under all of the aforesaid Agreements, and the Lessee has duly authorized and executed all of the aforesaid Agreements. This Lease, the Site Lease, the Agency Agreement, the Escrow Agreement. and the Trust Agreement constitute the legal, valid and binding obligations of the Lessee enforc'eabl.e in accordance with their respective: terms, except to the extent limited by appacable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affec ing the rights of creditors generally. ('c) No Conflicts or Default; No Liens or Encumbrances. Neither the execution and' delivery of this 2487004/2 4 ~~D.~6~~ ~C~ Lease, the Site Lease, the Escrow Agreement, the Agency Agreement or the Trust Agreement, nor the fulfillment of or compliance with the terms and cond=tions° hereof or thereof, nor the. consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restrict-..ion or any agr"cement or instrument to which. the Lessee is maw a party or by which the Lessee is bound, or constitutes a default under any of the foregoing, or results in the creation o imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Lessee, or upon the Project except for the pledges contained in the Trust Agreement and except for Permitted Encumbrances. (d) Executo_ri and Delivery. The Lessee has duly authorized and executed this Lease in accordance with the Constitution and laws of the State. (e) Indemnification of Lessor. The Lessee covenants. to def end, indemnify and hold harmless the Lessor and its directors and' employees (collectively, the "Indemnifi.ed Party") against any and all losses., claims, damages or liabilities, joint or several, including fees and expenses incurred in connection therew h, to which such Indemn"ified Party may become subject under any statute or at law or in equity or otherwise in connection with the transactions contemplated by this Lease, and sha.11 reimburse. any such Indemnified Party for any legal or other. expenses incurred by it in connection with investigating any claims against it and defending any actions, insofar as such losses, claims, damages, liabilities or actions arise out of the transactions contemplated by this Lease. In particular, without limitation, the Les ee shall and. hereby agrees to indemnify. and save the Indemnified Party harmless from and against a l claims, losses and damages, including legal fees and expenses, arising out of (i). the use, maintenance, condit;,on or management of, or from any work or thing done on the Project by the Lessee., (ii) any breach or default on the part of the Lessee in the performance of any of its obligations under this Lease, (iii)' any act or negligence of the Lessee or of any of its agents., contractors, servants, employees or licensees with respect to the Project, (iv) any act or n:egl,.gence of any assignee or sublessee of the Lessee with res;pect'to the Project, or (v) the acquisition and construction of the Project or the authorization of payment of the Project Costs by the Lessee: (f) General Tax and Arbitrage Covenant. The Lessee hereby covenants that, notwithstanding any other provision of this Agreement, it will make no use of the proceeds of the Certificates or of any .other amounts or property regardless of 2487004/2 ®4G \l~P ~ ~ V ~ ~ c the source or take any action or refrain from taking any action that may cause the obligations of the Lessee under this Agreement to be "arbitrage bonds" subject to federal income taxation by reason of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code."). --- In-addition, the Lessee covenants that it will not make any use of the proceeds of the ob gations provided herein or in the Trust Agreement or any other funds of the Lessee or take or omit to take any other act-ion that would cause such obligations to be a ''prix-ate activity bond" within the meaning of Section 141 of the Code, or "federally guaranteed" within the meaning of Section 1.49(b) of the Code. To that end, so long as any Lease Payment is unpaid, the Lessee, with respect to such proceeds and such other funds., will comply with all requirements of such Sections and all regulations of the United States Department of the Treasury issued thereunder and under Section 103 of the Internal Revenue Code of 1954, as amended, to the extent that such requirements are, at the time, applicable and in effect. SECTION 2.2 Rep'res,entations,~Covenants and Warranties of Lessor.. The Lessor represents, covenants and warrants to the Lessee as .follows: (a) No Conflicts or Defaults; No Liens or Encumbrances. Neither the execution and delivery of this Lease, the Site Lease, the Agency Agreement or the Assignment Agreement, nor the fulf lment of or compliance with the terms and conditions hereof o;r thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with. or results in a breach of the terms, conditions or provisions of the Articles of Incorporat"on or Bylaws of the Lessor or any restriction or any agreement or instrument to which the Lessor is now a party or by which the Lessor is bound, or constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge o:r encumbrance whatsoever upon any of the property or assets of the Lessor, or upon the Project except by the pledge contained in the Trust Agreement and except for Permitted Encumbrances. (b) Execution and Delivery. The Lessor has.duly authorized and executed this Lease in accord:anc,:e with the Constitution and laws of the State. (c) General Tax and Arbitrage Covenant. The .Lessor covenants that, notwithstanding any other provision of this Agreement,. it will make. no use of the proceeds of the Certificates or of any other amounts or property regardless of the source or take any action or refrai"n from taking any action 2487004/2 6 ®~~ey6~~NCS that may cause the obligations of the Lessee under this Agreement to be "arbitrage bonds" subjects to Federal income taxation by reason of Section 148 of the Internal Revenue Code of 1986, as amended. In addition, the Lessor covenants that it will rot make any use of the proceeds of the obligations provided herein or in the Trust. Agreement or any other funds of the Lessee or take or omit to take any other action that would cause such obligations to be .a "private activity bond" within the meaning of Section 141 of the Code, or "federally guaranteed" within the meaning of Section 149(b) of the Code. To that end, so long as any Lease Payment is unpaid, the Lessor with respect to such proceeds and such other funds, will comply with all requirements of such Sections and all regulations of the United States .Department of the Treasury issued thereunder and under Section 103 of the Internal Revenue Code of 1954, as amended, to the extent that such requirements are, at the time, applicable and in effect. ACQUISITION, ARTICLE III CONSTRUCTION AND IMPROVEMENT OF THE PROJECT SECTION 3.1 __:Depost of Certificate Proceeds. On the Closing.Date the Lessor agrees to p.ay or cause to be paid to the Lessee moneys-t;o be deposited with the Trustee as provided iri Section 2.07-of the Trust Agreement. -SECTION 3.2 Acquisition, Construction and Improvement of the Project. (a) By Lessor. The Lessor agrees to acquire, equip, construct, rehabilitate, remodel and improve or provide for the acquisition,-equipping, construction, rehabilitation, remodeling and improvement of the Project pursuant to the requirements of the Lessee. (b) By Lessee as Agent o,f Lessor. The Lessee as agent of the-Le s"or under the Agency Agreement will arrange for., supervise. and provide for, or cause. to be supervised and provided for, the acquisition:, equipping,, construction,. rehabilitation, remodeling and improvement of the Project. The Lessee shall enter into one or more contracts or purchase orders pr_ovid'ing for the acquisition, delivery and installation of the Equipment and the acquisition, .construction, rehabilitation, remodeling and improvement of the Project. 2487004/2 7 ~~~e ~. 6 ~ 1 ~ C S SECTION 3.3 Compliance with Law. The Lessee shall comply with all applicable provisions for bids and contracts prescribed'by law. SECTION 3.4 Payment of Project Costs. Payment of the Project Costs shall. be made from the moneys deposited with the Trustee in the Project Fund as pr-ovided in Section 3.1 hereof and Section 2.07 of the Trust Agreement, which shall be disbursed from the Project Fund in accordance and upon compliance with Article III of the Trust Agreement. SECTION 3.5' Com letion Date; Certification. (a) Com etion Date. It is contemplated that the Lessee will take possession of all portions of the Project on or before October 15, 1988. The Lessee has agreed pursuant. to the Agency Agreement to use its. best e~forts to acquire, construct and improve the Project by that date: (b) Certificate of Comn etion.. Upon acquisition, construction and improvement of the Project, satisfactory to the Lessee, the Lessee and the :Lessor shall deliver to the Trustee a Certificate of Completion., with respect thereto. On the date of filing the Certificate of Completion, as indicated therein, all excess moneys remaining in the Project Fund shall be transferred by the Trustee to the Lease Payment Fund as provided in Section 3.04. of the Trust Agreement for payment of principal-and interest w-th respect to the Certificates as provided in Section 5.04 of the Trust Agreement.. SECTION 3.6 Substitutiori. The City will operate, maintain and .preserve, or cause to be operated, maintained and preserved, the Proj':ect in good repair and working order and will operate the .Project in a sound, efficient and economical manner as public faci,ites and will not, during the term hereof, substitute other facilities for use as a community center or police services building without providing for continued pubT,ic use of the Project. SECTION 3.7 Financing Statements. Upon acquisition of the Equipment, the Lessor shall cause the Lessee, as agent for the Lessor, to execute and file with the Secretary of State a financing statement in form proper under the California Uniform Commercia Code for purposes of perfecting a security interest in the Equipment in favor of the Trustee, as assignee of the Lessor, for the benefit of the Owners. ,Each such financing statement shall name the Trustee as a secured party and the Lessee hereby consents to the filing of each such financing statement. Each such financing 2487004/2 8 ~~~e~ss~~c~ statement shall be updated between four -and one-half and five years of its date of filing, or sooner; if required; as provided in the California Uniform Commercial Code. SECTION 3.8 Further Assurance and Corrective Instrument The Lessor and the Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further .instruments a~s may reasonably be required for correcting any inadequate or incorrect description of the Project hereby leased or intended so to be or for carrying out the ,expressed intention of this Lease. ARTICLE IV AGREEMENT TO LEASE.; TERM OF LEASE;. LEASE PAYMENTS; TITLE TO THE~PROJECT SECTION 4.1 Lease. The Lessor hereby leases the Project and Site to the Lessee, and the Lessee hereby leases the Project .and Site from the Lessor, upon the terms and conditions set forth herein. SECTION 4.2 Term. The term of thin Lease shall commence on the date hereof and shall end on April LS, 2012, unless extended pursuant to Section 4.3, or unless terminated prior thereto upon the earliest of any of the following events: (a) Default and Termination. A default by the Lessee and the Lessor's eaection to terminate this Lease under Section 9.2(b) hereof; (b) Payment of All Lease Payments. The payment by the Lessee of a l Lease Payments required under Section 4.4 hereof and any Additional Payments required under Section 4.11 hereof; (c) Prepayment. The deposit. of funds or Federal Securities with the Trustee in amounts sufficient to pay all Lease Payments as the same shall become due, as provided by Section 10,1 hereof and as provided by Section 14.01 of the Trust Agreement; or (d) Burchase. Upon the exercise by the Lessee of its option to purchase all of the Project as provided in Section 7.3. p;rovi.ded, however, that the Lease shall be terminated with re pest to any item of or portion of the Equipment, title to which is transferred t`o the Lessee upon the end of its useful life and provided that this Lease shall 9 2487004/2 ~~~. ~. 6~ 1 N C S terminate with respect to any item or part of the Project upon the exercise by the Lessee of its purchase option with respect to such item or portion. The Lessee hereby represents, warrants and covenants that. the useful.life of any item of Equipment is correctly indicated on Exhibit C hereto. __ _ SECTION 4.3 Extension of Lease Term. If on April 15, 2012; the Certificates shall not be fualy paid, or if the Lease Payments hereunder shall have been abated at any time and for any reason, then the Term shall be extended until all Certificates shall be fully paid, except that the Term shall in no event be extended beyond. April 15, 2016; provided, however, that the Term shall not be so extended 'with respect to Equipment longer than the useful life thereof, or ten years, whichever is less. SECTION 4.4 Lease Payments. (a) Time and Amount. Subject to the provisions of Section 3.2 (regarding the acquisition, cons ruction and improvement of the Project or portions thereof), Section 4.10 (regarding abatement in event of loss of use of any portions of the Project) and Article X (regarding prepayment of Lease Payments), the Lessee. agrees to pay to the Lessor, its successors and assigns, as annual rental for. the use and .possession of the Project, the Lease Payments (denominated into components of principal and interest, the interest components .being paid semi-annually) in the amounts specified in Exhibit A, to be due and payable in arrears on the fifteenth day of the month (or if such day is not a Business Day, the next succeeding Business Day) immediately preceding the respective Certificate Payment. Dates specified in Exhibit A (the "Lease Payment Date") which are sufficient in both time and amount to pay when due the annual principal and interest represented by the Certificates. (b) Advance Rental. In regard.to portions of the Project to be acquired, constructed and improved from time to time, the Lessee shall pay advance rental for the use of the portions of the. Project in the ,amount of $ (funded to October 15, 1988) consisthg of interest only on the principal amount evidenced by the Certificates to a date not more than three momths after the portions of the Project are ac'quir:ed, constructed and improved. Such advance rental shall be paid solely from the proceeds of the sale of the Certificates. (c) Credits. Any amount held in the Lease. Payment Fund on any Le:ase'Payment Date (other than amounts resulting from the prepayment of the Lease Payments in part but not in 2487004/2 10 whole pursuant to Section 10.2 hereof and other amounts required for payment of past due principal or interest with respect to any Certificates not presented for. payment) shall. be credited tow,ards~the Lease Payment then due: and payable. No Lease Payment need be made on any Lease Payment Date if the amounts then held in the Lease Payment Fund are at least equal to the~Lease Payment then required to be p-aid. (d) .Rate on Overdue Payments. In the event the Lessee should fail~to make any of the Lease Payments required in this Section, the. Lease Payment in defau-lt shall continue as an obligation of the Lessee until the amount in default shall have been fully paid, and the Lessee agrees to pay the same with interest thereon, to the extent permitted by law, from the date such amount was originally payable at the rate equal to the original interest rate payable with respect to each Certificate which represents an inte-rest in the Lease Payments in default. SECTION 4.5 .No Withholding. Notwithstanding any dispute betweem the Lessor and the Lessee, including a dispute as to the failure of any portion of the Project in use by or possession of the Les ee .to perform the task for which it is leased, the Les'+ ee shall make all Lease Payments when due and shall not withhold any Lease Payments pending the final resolution of such dispute. SECTION 4.6 :Fair Rental Value.. The Lease Payments shall be paid by the Lessee in consideration~of the right of possession of, and the Conti-Hued quiet use and enjoyment of, the Project during: each such period f.or wn:ch said rental is to be paid. The parties hereto. have agreed and determined that such total rental represents the fair rental value of the Project. In making such determination, consideration has been given to the Project Costs, other obligations .of the parties under this Lease (including but not limited to costs of maintenance, taxes and insurance), the uses and purposes which may be served by the Project. and the benefias therefrom which will accrue to the Lessee and the general public. In the event that the Lessee and Trustee, as assignee of the Lessor, agree subsequent to the'date hereof that Lease Payments hereunder are less than the,f.air rental value of the Project, the Lessee and the Trustee may mutually agree that the Lessee shall .increase the Lease Payments payable hereunder to reflect such fair rental. value.. SECTIQN.4.7 Budget and Appropri_at.ion. The Lessee covenants to `take such action as may be necessary to include all Lease Payments (other than the Lease Payments of advance rental}and Additional Payments (to the extent such Additional 2487004/2 11 ~~~. 161 NCB Payments are known to the Lessee at the time its annual budget is proposed), due hereunder in its annual budget and to make the necessary annual appropriations for all such Lease Payments. During the Term, the Lessee will furnish to the Trustee copies of each proposed and final budget of the Lessee within 20 days after the filing or adoption thereof in accordance with Section 11.05 of the Trust Agreement. The covenants on the part of the Lessee herein contained shall be deemed to be and sha1:1 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 covenants and agreements in this Lease agreed to be carried out and performed by the Lessee. SECTION 4.8 Assignment of Lease Payments. All of the Lessor's rights under thi Lease, including the right to receive and enforce ,payment, of the Lease-Payments to be made by the Lessee hereunder, have been assigned to the Trustee, pursuant to the Assignment Agreement, to which assignment the Lessee hereby consents. The Lessor hereby directs the Lessee, and the Lessee hereby agrees to pay to the Trustee at the Trustee's corporate trust office in San Francisco, California, or to the Trustee at such other place as the Trustee shall direct in writing, all Lease Payments or prepayments thereof payable by the Lessee hereunder. The Lessor will not assign or pledge the Lease Payments or other amounts derived from the Project and from its other rights under this Lease except as provided under the terms of this .Lease, or its duties and obligations except as provided under the Assignment Agreement and the Trust Agreement. SECTION 4.9 Use and Possession. The total Lease Payments due in any Fiscal Year (other than the Lease Payments of advance rental) shall be for the use and possession of the Project for such Fiscal Year. SECTION 4.10 Abatement of :Lease Payments in Event of Loss of Use. The amount of Lease Payments shall be abated during any period in which by reason of damage,, destruction or taking by eminent domain or condemnation with respect to any item or portion of the Project there is substantial interference with the us,e and possession. of such item or portion of the Project by the Lessee. The amount of such abatement shall be agreed upon between the Lessee and the Trustee, as assignee of the Lessor, such that the resulting Lease Payments represent fair consideration for the use and possession of the item or portion of the Project not damaged, destroyed, or taken. 'Such abatemen shall continue for the period commencing with such 248700.4/2 12 ~~~. ~ 6 ~ 1 N C ~ damage, destruction or taking and ending with the substantial completion of the replacement or work or repair. Except as provided herein,"in the event of any such damage or destruction,.. this Lease shall continue. in full force and effect and the Le see waives any right to terminate this Lease by virtue of any such damage, destruction or taking. There shall be no abatement of~Lease-Payments .to the extent that moneys derived from any person as a result of any defect or delay in the construction or installation as applicable, of any item or portion of the Project, are available to pay the amount which would otherwise be abated. Notwithstanding the foregoing sentence, however, there shall be no abatement if the Reserve Fund and. the Lease Payment Fund are available to pay the amount which would otherwise be abated. SECTION 4.11 .Additional Payments. In addition to the Lease Payments,. the Lessee shall also pay such amounts ("Additional Payments") as shall be required for the payment of all administrative costs of the Lessor relating to the Project or the. Certificates, including without limitation all expenses, compensation and indemnification of the Trustee payable by the Lessee under the Trust Agreement, taxes of any sort whatsoever payable by~the Lessor as a result of it.s ownership of the Project or undertaking~of the transactions contemplated herein or in the: Trust Agreement, fees of auditors, accountants, attorneys or engineers, and all other neeess'ary administrative costs of the Lessor~or charges required to be paid by it in order to maintain it existence ox to comply with the terms of the Certificates or of-the Trust Agreement or to indemnify the Lessor and its officers and directors. SECTION 4.1.2 Net-Net-Net Lease. Thies Lease shall be deemed and construed to be a "net-net-net lease" and the Lessee hereby agrees that-the Lease Payments shall be an absolute net return to the Lessor, free: and clear of~any expenses, charges or set-offs whatsoever, except as expressly provided herein. ARTICLE V INSURANCE SECTION 5.1 Public Liability and Property Damaqe. (a) Coverage. The Lessee shall maintain or cause to be maintained, thr-oughout the Term hereof, a standard comprehensive general public liability and property damage insurance policy or policies in protection of the Lessee, its officers, agenta and employees. Said policy or policies shall provide for indemnification of said parties against direct or 2487004/2 13 ~~D~~6~1N~;S contingent loss or liability for damages fo;r bodily and personal injury, death or property darn'age occasioned by reason of the-use or operation of the Project. (b) _Limits. Said. policy or policies shall provide coverage in the minimum liability limits of $.1,000,000 for personal injury or death of each. person and. $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount. of $150,000 (subject to a deductible clause of not to exceed $:50,000) for damage to property resulting from each accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy covering all such risks in an amount equal to the greater of the aggregate principal amount of al Certificates Outstanding or the combined replacement cost of all components of the Project. (c) Joint or Self=.Insurance. Such .liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage. carried by the Lessee, and maybe maintained in the form of self-insurance by the Lessee. (d) Payment of Net Proceeds. The Net Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid. - SECTION 5.2 Workers' Compensation. The, Lessee shall also maintain workers' compensation insurance, issued by a responsible carrier authorized under-the laws of the State of California to insure its employees against liability for compensation under the Workers' Compensation. .Insurance and Safety Act now in force in California, or any act hereafter enacted as an amendment or supplement thereto or in lieu thereof (with provision for self-insurance of $100,000). SECTION 5.3 C`asua,lty and Theft Insurance. (a) Casualty and Theft Insurance: Coverage. The Lessee shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease, insurance against, to s or damage to any item or portion of the Project by fire and lightning, with extended cove-rage and vandalism and malicious misch.ie.f insurance, and against loss of Equipment by theft. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, a.r:cra£t, vehicle damage, smoke and such other hazards as are normally covered by such insurance.. 14 2487004/2 ®~.~, ~, ~ $1 N C S (b) Amount. Such insurance shall be in an amount equal to 1000 of the replacement cost of the Project (except that such irisur~ance may be subject to deductible clauses of not to exceed $5,000 for any one ioss); provided, however, that in no event shall .ouch insurance be maintained in an amount less than the aggregate.principal amount of Certificates at the time Outstanding. -- (c) Joint or .Self-Insurance,. Such insurance may be maintained as part of or in conjunction-with any other insurance carried or required to be carried by the Lessee, and may be maintained in the form of self-insurance by the Lessee. (d) Payment of .Net Proceeds. The Net Proceeds of such insurance shall be paid to the Trustee and deposited in the Net Proceeds Fund and applied as provided in Section 6.1. SECTION 5.4 _Rental Interrupt:-ion Insurance. (a) Coverage and.. Amount. The Le see shall maintain or cause to be ma-intained on or prior to the acquisition, construction, equipping and/or remodeling of the Project, in no event later than-stick time as the last advance rental payments made from.proceeds_of the sale of Certificates are paid, rental income or use and occupancy insurance in an amount not less than the maximum rema"fining scheduled Lease Payments in any future twenty-four-month period, to insure against loss of rental income from the Project caused by .perils covered by the insurance required:-to be maintained as provided in Section 5.3 hereof. Such insurance may be obtained as of the Closing Date or as each portion of the Project bec°omes subject to this Agreement. (b) Joint Insurance. Such insurance may be maintained as part of or in conjunction with any other rental income insurance carried by the Lessee. (c) Payment of Net Proceeds. The Net Proceeds of such insurance shall be paid to the Trustee and .deposited (1) in the Reserve Fund to make up any deficiencies therein, and (2) deposited in the Lease Payment Fund, to be credited towards the payment of the Lease Payments in the order in which such Lease Payments come due and payable. SECTION 5.5 Title Insurance. The Lessee shall, prior to the disbursement of amounts from the Project Fund to pay the costs of acquiring, constructing or remodeling real property included in the Project, obtain and, throughout the term of this Lease, maintain or cause to be maintained title insurance on any Site, in the form of a CLTA mortgage title policy, 2487004/2 15 ~~~.~.~~~~CS (including., if available, mechanics' lien coverage) in an amount equal to the costs of the•Buldings, issued by a company of recognized standing, duly authorized to issue the same, payable to the Trustee for the benefit. of the Owners, subject only to Permitted Encumbrances. The Net Proceeds of such insurance shall be applied as provided in Section 6.1(a). SECTION 5.6 General Insurance Provisions. (a) Form of Policies. All policies of insurance required to be procured and maintained pursuant to this Lease and any statements of elf-insurance. sha41 be in form certified by an insurance agent, broker or consultant to the Lessee to comply with the pr:ovi~sons hereof. A11•such policies shall provide that the Lessee shall give the Trustee 30 days' notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. Each policy of insurance required to be procured and maintained pursuant to Section 5,3 (regarding casualty, theft insurance), Section 5.4 (regarding business interruption insurance) and Section 5.5 (regarding title insurance) shall provide that all proceeds thereunder shall be pay-able to the Trustee for the benefit of the Owners. (b) Payment of Premiums. The Lessee shall pay or cause to be paid when.due the premiums for all insurance policies required by this Lease, and shall promptly furnish or cause to be furnished to the Trustee a certificate to such effect accompanied by evidence of such payments. (c) Protection of the Trustee.. The Trustee shall not be responsible for the sufficiency or adequacy of any insurance herein required and 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 Trustee. (d). Evidence of Insurance. The Lessee shall cause to be delivered to the Trustee annually evidence satisfactory to the Trustee that the .insurance policies required by this Lease are in full force and effect. SECTION 5.. ,7 Co,o,pera.tion. The Le sor shall cooperate fully with the.. Lessee. at the expense of the Lessee in filing any proof of loss with respect to any insurance policy maintained pursuant 'to this Article and in the prosecution or defense of any prospective or pending condemnation proceeding with respect to the Project or any portion thereof. 2487004/2 16 ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DONir'~IN; USE OF NET PROCEEDS SECTLON 6.1 Apr~lication of Net Proceeds. (a) Deposit 'n Net Proceeds. Fund. Pursuant to Section 7.0.1 of the Trust Agreement, the Trustee shall deposit Net Proceeds of insurance which it receives in the Net Proceeds Fund as provided in Section 5.3 (regarding casualty, theft insurance.) and Section 5.6 (x egarding title insurance) promptly upon receipt thereof. The Lessee and/or the Lessor shall transfer to the Trustee any other Net Proceeds received by the Lessee and/or Lessor in the event of any accident, destruction, theft or taking by eminent. domain or; condemnation with respect to the Project, for deposit in the Net Proceeds Fund. (b) Disbursement for Replacement or Repair of the Project. Upon receipt of the certification described in paragraph (1) below and the requisition described in paragraph (2) below, the Trustee shall di;sbur;se moneys in the Net Proceeds Fund to the person, firm or corporation named in the requisition as provided in Section 7.02 of the Trust Agreement. (1) Certification. The Lessee Representative must certify to the Lessor and the Trustee that: (i) Sufficiency of Net Proceeds. The Net Proceeds available for such piirpo e, together with any other funds supplied by the Lessee for such purpose, are sufficient therefor, and (ii) Timely Completion. In the event that damage, destruucton or taking resuats in an abatement of Lease Payments, such rep,la:cement or repair can be fully completed within a period not in excess of the period in which rental interruption insurance proceeds will be available to pay in full. all Lease Payments coming due during such period as described in Section 5.4. (2) Requisition. The Lessee Representative must state with respect to each payment to be made (i) the requisition number, (ii) the °name and address of the person, firm or corporation to whom payment is due, (iii) the amount to be paid and (iv) that each obligation mentoned'therein has been properly incurred, is a proper 248T004/2 17 ~~~, 16 ~ 1 N C ~ charge against the Net Proceeds Fund, has not been the basis=of any previous withdrawal, and specifying in reasonab e detail the nature of the obligation, accompanied by a bi1T or a statement of account for such obligation. Any balance~of the Net Proceeds remaining after such replacement or repair has been completed shall be paid to the Lessee. (c) Di bursement for Prepayment. If the Lessee Representative notifies the Trustee in writing of the Lessee's determination that the certification provided in Section 6.1(b)(1) cannot be made and replacement or repair of any item or portion of the Project is not economically feasible or in the best interest of the Lessee, then the Trustee shall promptly transfer the Net Proceeds to the Prepayment Fund as provided in Section 7.01 of the Trust. Agreement and apply them to prepayment of the Certificates as provided ~in Section 4.02 of the Trust Agreement and prepayment of Lease Payments as provided in Section 10.-2 hereof. ARTICLE VII COVENANTS WITH RESPECT TO THE PROJECT SECTION 7,1 Use of the Project. The Lessee represents and warrant's that it has an immediate need for, and expects to make immediate use of, all of the Project, which need is not temporary or expected to diminish in the foreseeable future. The Lessee agrees not to give priority in the appropriation of funds for the acquisition or use of any additional equipment or facilities, as the case may be, performing functions similar to that performed by the Project. SECTION 7.2 Title to the Project. (a) Lessor Holds Title Durnq Term. During the Term of this Lease, the Lessor shall hold either a leasehold interest in the Project or shall hold title to the Project and any and all additions which comprise remodeling, replacements or modifications. The Lessee shall take any and a 1 actions reasonably required, including but not` limited to executing and filing any .and alI documents, reasonably required to maintain and evdenee~the Lessor's title to and interest in the Project at all times during the Term of this Lease. (b) Title Transferred to Lessee at End of Term. Upon expiration of the Term. as provided in Section 4.2 hereof, all right., title and interest of the Lessor in and to all of the 2487004/2 18 ~~~.16 ~ 1 N C .. Project shall be transferred to and vest in the Lessee, without the necessity of any additional. document- of transfer. (c) Title Transferred to Lessee at End of Useful Life. In addition, as long as no event o;f default shall have occurred and be continuing hereunder., all right, title and interest of the 'Les'sor in and to any item or portion of the Project shall cease upon the expiration o`f the. useful life of such item or portion of the Project specified by the Lessee in Exhibit C, as amended, and upon the expira ion of 10 years with respect to Equipment, without the nece s~ity of any additional document of transfer. In any such event, if necessary, the Lessor shall authorize, execute and deliver to the Lessee any documents required to terminate this Lease with respect to any item or portion of the Project and consummate such transfer of title. SECTION 7.3 Option to Purchase. The Lessee shall have the option to.purchase the Lessor's interest in all or any part of the Project upon payment of an option price in an amount sufficient to provide .funds to pay the aggregate amount for the entire.remai`ning term of this Lease of the part of the total Lease Payments hereunder attributable to such part of the Project (determined by reference to t'he proportion which the total cost of such part of the Project bears to the total cost of all of the Project) consisting of principal, interest on such principal to the: applicable prepayment date, plus any applicable prepayment premium. Any such payment shall be made to-the Trustee and=shall be treated as an optional prepayment of Lease Payments, and shall be applied by the. Trustee to pay the interest and `principal components of the Certificates and to prepay Certificates on or after April 1`5, 1995, pursuant to the provisions of Section 4.03 of the Trust Agreement and Section 10.2 of th Lease. Upon the making of such payment to the Trustee, (a) the `interest and print-ipaT components of each semiannual installment of Lease Payments thereafter payable under this Lease shall be reduced~by the amount thereof attributable to such part of the Proj`ec and theretofore paid pursuant to Section 4,.4 hereof, (b) Section 3.06 and this Section of the Lease shall not thereafte-r be applicable to such part of the Project, (c) the insurance required by this Lease need not be maintained as to such part of the Project, and (d) title to 'such part of the Project shall vest in the Lessee and the term o€ this Lease shall end as to such part of the Project. S"ECTI'ON: 7.;4 Quiet Enjoyment. During the Term, the. Lessor shall provide the Lessee with quiet use and enjoyment of the Project, and the Le see shall during such Term peaceably and quietly have and hold and enjoy the Project, without suit, 2487004/2 19 trouble or hihdrance from the Lessor, or any person or entity claiming under or through the Lessor except as expressly set forth in this Lease or the Trust Agreement. The Lessor will, at the request of the Lessee, join in any legal action in which the Lessee asse is its right to such possession and enjoyment to the extent the Lessor may lawfully do so. Notwithstanding the foregoing, the Lessor shall have the right to inspect the Project as provided in Section 7.6 hereof. SECTLON 7.5 finstallation of Lessee's Personal Property. The Lessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon any po lion of the Project. All such items shall remain the sole personal property of the Lessee, regardless of the manner in which the same may be affixed to such portion of the Project, in wheh.ne'ither the Lessor nor the Trustee shall have any interest, and may be modified_ or removed by the Lessee at any time; provided that the Lessee sha-1-1 repair and restore any and all damage to such portion of the Project resulting from.the installation;, modification or removal of any such. items of equipment. No-thing in this Lease: shall prevent the Lessee from purchasing items to be installed pursuant to this Section, provided that no lien or security interest, attaching to such items shall attach to any part of the Project. SECTION 7,6 Access to the Project. The Lessee agrees that the.Lessor, any Lessor Repre entative and, the Lessor's successors or assigns,.-shall- have the right at all reasonable times to enter upon the Project or any portion thereof to examine and inspect .the Project. The Les ee further agrees that the Lessor, any Lessor Representative; and the. Lessor's successors or assigns shall have such rights of access to the Project as may be reasonably necessary to cause the proper maintenance of the Project in the event of failure by the Lessee to perform its obligations hereunder. .SECTION 7.7 Maintenance, Utilities, Taxes and Assessments. (aJ Maint.enance; Repair and Re: lacement. Throughout the Term of this Lease, as part of the consideration for the rental of the Project., all repair and maintenance of the Project shall be the responsibility of; the. Lessee, and the Lessee shall pay fo-r or otherwise arra=nge for the payment of the cost of the repair and replacement of the Project resulting from ordinary wear and tear or want of care on the part of the Lessee or any sublessee thereof. In exchange for the Lease Payments herein pr--;ovided, the Lessor agrees to provide only the Project, as hereinbefore more specifically set forth. The Lessee waives the benefits of subsections 1 and 2 of 2487004/2 20 ~~~.1~~~i~CS Section 1932 _of shall not limit of this Lease. the California Civil Code, but such waiver any of the rights of the Lessee under the terms The. Lessee covenants to repair or replace any portion of the Project.that is no longer suitable for its intended function due to-ordinary wear and tear or other cause prior to the end of its originally estimated useful life. (b) Tax and Assessments; Utility Charges. The Lessee shall also pay or cause to be paid all taxes and assessments, including but not limited to utility charge's of any type or nature charged to the, Lessor or the Lessee or levied, assessed or charged against any portion of the Project or the respective interests or estates therein; provided that with respect to special assessments ar other governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as are required to be_paid during the Term of this Lease as and when the same become due.- ('c) Contests. The Lessee may; at its expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal theref~~rom; provided that prior to such nonpayment it_.shall furnish the Lessor and the Trustee with the opinion of an Lndepen'dent Counsel, to the effect that, by nonpayment of any such items, the intere t of the Lessor in such portion of the Project will not be materially endangered and: that the Project will not be subject to loss or forfeiture. Otherwise, the Lessor shall promptly pay such taxes, assessments or charges or make provisions for the. payment thereof in form satisfactory to the Le sor. The Lessor will cooperate fully in such contest upon the request and at the expense of the Lessee. SECTLON 7.8 Modification of the Project. (a) Additons~~; Modifications and Improvements. The Lessee shall, at its own expense, have the right to make additions, modifications, and improvements to any portion of the. Project if such additions, modifications or improvements are necessary or beneficial for the use of such portion of the Project. A1~1 such additions, modifications and improvements shall thereafter compr-ise part of the Project and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way damage any portion of the Project or cause it to be used for purpo es other than those 2487004/2 21 ~~~a~.~~~- ~~~ authorized under the provisions of State and federal law or in any way which would impair the tax-exempt stratus of the interest compohents of the Lease Payineht,s or diminish the fair rental value of the Project; and the Project, upon completion of any additions, modifications and improvements made pursuant to th Section., sha`11 be of a value which is not substantially less .than thg value o:f the Project immediately prior to the making of such additions, modifications and improvements. (b) No--:Liens. The Lessee will not permit any mechanics' or other lien to be established or remain against the Project for labor or materials furnished in connection with any additions, modifications or improvements made by the Lessee pursuant to this S'ectiont provided that .f any such lien is established and the Le see shall first notify or cause to be notified the Lessor of, the Lessee's intention to do so, the Lessee may in good faith contest any lien filed or established against the Project, .,and 'in such event may permit the items so contested to remain undischarged and unsatisfied during the per-od of such contest and any appeal therefrom and shall provide the Lessor with full security against any loss or forfeiture which. might arise from the nonpayment of any such item, in form satisfactory to the Trustee as assignee of the Lessor. -The Lessor will cooperate fully in any such contest upon the request and at the expense of the Lessee. SECTION 7:9 Liens. Except as provided in this Article, {ineauding without limitation Section Z,8 hereof) the Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or cla-im, as applicable, on or with re pect to the Project, other than the respective rights of the:Les,sor .and the Lessee as herein prov'i'ded and except as to Permitted Encumbrances. Except as expressly provided in this Article, the Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien., charge, encumbrance or claim, for which it is responsible, if th:e same shall arise at any time; provided that the Lessee may contest such liens if it desires to do so. The Lessee sha,11 reimburse the Lessor for any expense incurred by it in order to discharge or remove any such mortgage, pledge, lien., change, encumbrance or claim. SECTION 7.1;'Q Le sor's Disclaimer of -Warranties. 'THE LESSOR MAKES 'N0 'WARRANTY OR REPRESENTATION,.EI'THER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR' ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED~BY THE LESSEE OF THE PROJECT OR ANY ITEM OR PORTION THEREOF. THE LESSEE ACKNOWLEDGES THAT THE LESSOR IS NOT A MANUFACTURER OF ITEMS OR PORTIONS OF THE PROJECT OR A 2487004/2 22 DEALER THEREIN, AND THAT THE LESSEE IS LEASING THE ITEMS OF THE PROJECT AS IS. In no event shall the Lessor be liable for incidental ,°"indirect., special or consequential damages, in connection with or arising out of this Lease, the Site Lease, the Agency, Agreement, t'he Assignment Agreement or the Trust Agreement for the exstAnce, fur-Wishing, functioning ar Lessee's use and possession of the Project. SECTION 7.11 Le'ss;ee's Right t;o Enf:or--ce Warxanties of Vendors or ;Contractor s'. The Lessor hereby irrevocably appoints the Lessee its agent and attorney-in-fact during the Term, so long as the Lessee shall not be in default hereunder, to assert from time to tame whatever claims and rights, including without limitation, warranty claims, claims for. indemnification and claims for breach of any representations, respecting the Project which the Lessor may have against any Vendor or Contractor. The Lessee's sole remedy for the breach of any such warranty, indemnification or representation shall be aganst_the Vendor. or.Contractor with respect thereto, and not against the Lessor, nor shall such matter have any effect whatsoever on the rights and obligations of the Lessor with r-expect to this Lease, including the right to receive full and timely Lease Payments. and to cause the Lessee to make all other payments due hereunder. The Lessee shall be entitled to retain any and al amounts recovered as a result of the assertion of any such claims and rights. The Lessor -shall, upon the. Le ee's request. and at the Lessee's expense, do all things and take all such actions as the .Lessee may request in connection with the assertion of any such claims and rights. ARTICLE VIII ASSIGNMENT, SUBLEASING AND AMENDMENT SECTION 8.1 Assignment by the Lessor. Except as provided herein and in the Trust Agreement, the Le s;or will not assign this Lease to.any other person, firm or corporation so as to impair or violate the representations, covenants and warranties contained in Section 2.2 hereof. SECT.I`ON-8.2 Assignment and Subleasing by the Lessee. (a) Assignment. This Lease may not be assigned by the Les ee unless the Lessee receives an opinion of Bond Counsel stating that such assignment does not adversely affect the tax=exempt status of the Certificates. In the. event that this Lease is a signed by the Lessee, the obligation to make Lease Payments hereunder shall remain the obligation of the Lessee . 2487004/2 23 (b) Sublease. The Lessee may sublease any portion of the P-roje,ct, with the written consent of'the Trustee as assignee of the Lessor, subject to all of the following conditions: -- (i) This Lease and the obligation of the Lessee to make Lease Payments hereunder shall remain obligations of the Lessee; ----- ~ ---- (ii}--'-The Lessee shall, within 30 days after the delivery thereof', furnish or cause to be furnished to the Lessor and the Trus-tee a tru°e and complete copy of such sublease; (iii) No sublease by the Lessee shall cause the Project to be used for a purpose other than a governmenta,I or proprietary function authorized under the provisions of the laws of the State; and --- _ (iv) No sublease shall cause the interest component of the Lease Payments due with respect to the Project. to become subject to federal income taxe - or. State of California personal income taxes. SECTION 8.3 Amendments and Modifications. This Lease may be amended in accordance with the Trust Agreement or any of its terms modified with the written consent of the Lessee and the Trustee as assignee of the Lessor. ARTICLE IX EVENTS OF DEFAULT AND REMEDIES SECTION 9.1 Event's .of Default Defined. The following shall be "events of default" under this hea~se and the terms "events of default" and "default" shall mean, whenever they are used in this Lease, any one or more of the following events: (a) Payment Default. Failure by the Lessee to pay any .Lease Payment required to be paid hereunder by the next succeeding Payment Date following each cor"responding Lease Payment Date; provided, however, that such failure shall not constitute an event. of default if the amounts so unpaid have been transferred from the ReserveFund or other spec:~al fund source to the Lease Payment Fund to make such Leas':e R'ayments pursuant to the terms of the Trust Agreement. (:b) Covenant Default. Failure by the Lessee to observe and perform any warranty, covenant, condition or 2487004/2 24 ~~~a~6~1I~CS agreement on its part to be observed or performed herein or otherwise with respect hereto or in the Trust Agreement or in.the Site Lease, other than as referred to in clause (a) o,:f this Section, for a period of 30 days after written notice specifying such failure and. requesting that it be remedied has been given to the Lessee by the Lessor, the Trustee or the Owners of not less than twenty percent (20%) in aggregate principal amount of Certificates then Outstanding; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee. as assignee of the Lessor or such Owners, as the case may be, shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected. (c) Bankruptcy or Insolvency. The filing by the Lessee of a case in bankruptcy, or the subjection of any right or interest of the Les-see under this Lease to any execution, garnishment or attachment., or adjudication of the Lessee as a bankrupt, or assignment by the Lessee for the benefit of creditors, or the entry by the Lessee into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to ;the. Lessee in any proceedings instituted -under the provisions of the federal bankruptcy code, as :-amended, or u-rider any similar.act which-may hereafter be enacted. SECTION 9.2 ~ Remedies on Default. Whenever any event of default referred to in Section 9.1 hereof shall have happened and be continuing, it shall be lawful for the Lessor to exercise any and all remedies available pursuant to law or granted pursuant to this Lease; provided, however, that notwithstanding a_nything_herein or in the Trust Agreement to the contrary, THERE SHALL BE NO RIGHT UNDER ANY CIRCUAISTANCES TO ACCELERATE THE LEASE PAYMENTS OR OTHERWISE DECLARE ANY LEASE PAYMENTS NOT THEN IN DEFAULT TO BE IMMEDIATELY DUE AND PAYABLE. After the occurrence of an event of default hereunder, the Lessee will surrender possession of the Project to the Lessor, if requested to do so by the Lessor, or by the Trustee or the Owners in accordance with the provisions of the Trust Agreement. (a) No Termination: Repossession and Re-Lease on Behalf o:f Lessee. In the event the Lessor does not elect to terminate this Leas e. in the manner hereinafter provided for in subparagraph (b) he%reof, the Lessor may, with the consent of the Lessee, which consent is hereby irrevocably given, 2487004/2 25 repose s the Project and re-lease it for the account of the Lessee, in which, event the Lessee's obligation will accrue from year-to'..y_ear in accordance with this Lease and the Lessee will continue to receive the value of the use of the Project from year to year in the form of credit against its obligation to pay Lease Payments: The obligations of the Lessee shall remain the same. as prior. to~such default, to pay fixed Lease Payments whet°her the Lessor re-enters or not.. The Lessee agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions contained herein and shall reimburse the Lessor for any deficiency arising out of the re-leasing of the Project, or, in the event the Lessor is unable to re-lease the Project, then for the full amount of all Lease Payments to the end of the .Term of this Lease, but said Lease Payments and/or deficiency shall be payable only at the same time and in the same manner as provided above for the payment of .Lease Payments hereunder, notwithstanding such repossession by the Lessor or any suit, brought by the Lessor for the purpose of effecting such repossession of the Project or the exercise of any other remedy by the Lessor. The Lessee hereby irrevocably appoints the Lessor as the agent. and attorney-in-fact of the Lessee to repossess and re-lease the Project in the event of default by the Lessee in the performance of any covenants contained herein to be performed_by the Lessee and to remove all personal property whatsoever situated upon the Project, to place such property in storage'or other suitable place in Sonoma County, for. the account of and at the expense of the Lessee, and the Lessee hereby exempts and agrees to save harmless the Lessor from any costs, loss or damage whatsoever arising or occasioned by any such repossession and re-leasing of the Proj,;ect. The Lessee hereby waives ariy and all claims for damage caused or which may be.caused by the Lessor in repo sessing the Project as provided herein and all claims for damages that may result from the destruction of or. the injury to the Project and all claims for damages to or loss. of any property belonging to the Lessee that may.be.in or upon the: Project. The Les-see agrees that the terms of this Lease constitute full and sufficient notice of the right of the Lessor to re-lease the Project in the event of such repos ession without effecting a surrender of this Lease, and further agrees that no acts of the Lessor in effecting such re-leasing shall constitute a surrender or termination of this Lease irrespective o'f the term for which such re-leasing is made or the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by the Lessee. the right to terminate this Lease shall vest in the Lessor to b'e effected in the sole and exclusive manner provided 2487004/2 26 ~~~~.~s~1~vc~ for in subparagraph (b).below. The Lessee further waives the right to any rental obtained by the Lessor in excess of the Lease Payments and hereby conveys and releases such excess to the Lessor as-compensation to the Lessor for its services in re-leasing the Project. In the event that-the liability of the Lessee under this subsection (a) is held to constitute indebtedness or liability in any year- exceeding in any year the income and revenue provided.for.such year, the Lessor, or the Trustee or the Certificate Owners as :assignees of the Lessor, shall not exercise the remedies provided in this subsection (a). (b) Termination: Repossession and Re-Lease. In the event of the termination of this Lease by the Lessor at its option and in the manner hereinafter provided on account of default by the Lessee-.(and notwithstanding any repossession of the Project by the Lessor in any manner whatsoever or the re-leasing of the Project), the Lessee nevertheless agrees to pay to the Lessor alI costs, losses or damages howsoever arising or occurring payable at the same time and in the same manner as is provided herein in the case of payment of Lease Payments. Any proceeds of the re-lease or other disposition of the Project by the'Lessor shall be deposited into the Lease Payment Fund and be applied in accordance with the provisions of Section.. 5.04 of the Trust Agreement. Any surplus received by the Lessor from such re-leasing shall be the absolute ,property of the Lessor and the Lessee sha l have no ricj.ht thereto, nor .shall the Lessee be entitled to any credit. in the event of a deficiency in the rentals received by the Lessor and/or the Project.- Neither notice to p,ay rent or to deliver up possession of the Project given pursuant to law nor any proceeding taken by the Lessor to recover possession of the Project shall..of :itself operate to terminate this Lease, and nc termination of t-his. Lease on account of default by the Lessee shall be or become effective by operation of law, or otherwise, unless and until the Lessor shall have given written notice to the Lessee of the eaecton on the part of the Lessor to terminate this Lease. The Lessee covenants and agrees that no surrender of the Rroject for the. remainder of the Term hereof or any termination of this Lease shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Lessor by such written notice. No such termination shall be effected either by operation of law or-.act of the parties hereto, except only in the manner herein expressly provided. The Lessor and Lessee hereby agree that Section 1951.2 of the California Civil Code shall apply to this Lease and that upon such termination, the Lessor may recover, in addition to all other damages available by contract or at law, from the 27 2487004/2 ~~~o ~.~~~ ~~~ Lessee: (i) the worth at the time of award of the unpaid rental which had been earned at the time of terminat-ion; (ii) the worth at~the.time of award~of the amount by which the unpaid rental f:or the balance of the term after the time of the award exceeds the amount of such rental boss that the Lessee proves could have been reasonably avoided; and (iii) any other amount necessary to compensate the Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligations under this Lease or which in th'e ordinary course of things would be like~y to result therefrom. The "worth at the time of award" of the amounts referred to in clauses (i), (ii) and (iii) above. is computed by allowing interest at the legal rate of interest per annum at which judgments for money in the State of California bear. interest.... In the event that the liability of the Lessee under this subsection (b) is held to constitute. indebtedness or liability in any year exceeding in any year the income and revenue provided for such year, the Lessor, or the Trustee or the Certificate Owners as assignees of the Lessor, shall not exercise the remedies provided in this subsection (b). (c) Opinion of Bond Counsel. The: re-leasing of the Project~as provided herein-shall be subject to the opinion o'f Bond Counsel that such re=leasing will not cause interest on the-Certificates to be subject to federal income tax. -~--SECTION 9.3 No Remedy Exclusive. No remedy conferred herein upon or reserved to the Le sor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity. No delay or omission to exerciae any right or power accruing upon any default shall impair any such right: or power or shall be construed to be a waiver thereof, but any such right and power may be exercised f.r.om time to time and: as often as may be deemed expedient. In order to entitle the'Lessor to exercise any remedy ,reserved to it in this Article it shall not be necessary tb give ang notice, other than such notice as .may be required in this Article or by law. SECTION 9.4 Agr.e:ement to Pay Attorneys' Fees and Expenses. Ln'the event either party to this Lease should default under any of the provisions hereof and the nondef.aultirig party should employ atto-neys or incur other expenses for the collection of moneys or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party contained her'ein,~the defaulting party agree that it will pay on demand to the nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred by the nondefaulting party. 248T004/2 28 SECTION 9.5 No Additional Waiver Implied by One Waiver. In the. event any agreement contained in this Lease should be breached by either party and thereafter waived by the other ;party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder' . .....SECTION 9.6 Application of the ,Proceeds from the Re-Lease of.the Project. All.amo.unts received by the. Lessor under this Article IX. (other than as provided in Section 9.2(b) herein regarding certain surplus) shall be deposited by the Trustee in the Lease Payment Fund and credited towards the Lease Payments in order of Lease Payment Date. SECTION 9.7 Trustee and Certificate Owners to Exercise R hts. Such rights and remedies as are given to the Lessor under this Article .IX have been. assigned by the Lessor to the Trustee under the Trust Agreement, to which assignment the Le see hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners as provided in the Trust ..Agreement. ARTICLE X PREPAYMENT OF LEASE PAYMENTS S'ECTTON 10.1 Mandatory Prepayment From Net Proceeds. The Lessee shall b,e obligated to prepay the Lease Payments in whole or in part on any Payment Date, from and to the extent of any Net Proceeds theretofore deposited in the-Net Proceeds Fund pursuant to Section 7'.0:1 of the Trust Agreement. The Lessee and.the Les or hereby agree that such Net Proceeds shall be credited towards the~Les'see's obligations hereunder (except in the case of such prepayment of the Leas"e Payments in whole) in the inverse order-of the of the Lease Payment Dates. SECTION 10.2 Optional Prepayment. Subject to the terms and conditions of this Section, the Lessor hereby grants an option to the Lessee to prepay in whole or in part, in inverse order of Lease Payment Dates, the principal amount of Lease Payments re ating to Certificates maturing in the years specified in Section 4.03 of the Trust Agreement, on the dates and-at the redemption ,prices provided therein. The Lessee shall execute sa-id option by giving written notice to the Trustee the~reo:f at least 45 days prior to the date of prepayment and depositing with said notice cash in the minimum amount of :$20,,'000, p us (1) accrued interest on the principal amount of Lease Payments to be prepaid to~the date of prepayment, plus (2) any Lease Payments then due but unpaid, plus (3) the prepayment premium described in such Section 4.03. 29 2487004/2 ~~t~.~.~~1~C~ SECTION .10.3 Credit for .Amounts on Deposit. In the event of prepayment of the Lease Payments in full under this Article X and the payment of all Additional Payments such that the Trust Agreement shall be discharged by its terms as a result of such prepayment, all amounts then on deposit in the. Lease Payment Fund, the Project Fund and the Reserve Fund shall be credited toward the amounts then required to be so prepaid. _SECTION 10.4 Effect of Prepayment. -- -(a) In Whole. In the event that the Lessee prepays all remaining Lease Payments pursuant to Section 10.3 (either by exercise of the pu.r,chase option described in Section 7.3 hereof or from Net. Proceeds as provided in Section 10.2 hereof)., the Lessee's obligations tinder this Lease shall thereupon cease and terminate, including but not limited to the Lessee's obligation to continue to pay Lease Payments under this Article X. (b) In Part. In the event the Lessee prepays less than all of the remaining principal components of the Lease Payments. (a) pursuant to Section 10.2 hereof (from Net Proceeds), the amount of such prepayment shall be applied to reduce the principal .components of the remaining Lease Payments in the inverse order due, corresponding t,o the resulting prepayment of principal with respect to the Certificates, or (b) ~purs:uant to Sec ion 7.3 hereof, the. obligation of the Lessee-to pay the.r'emaining Lease Payments shall be reduced as provided in such Section 7.3. - ARTICLE XI. MISCELLANEOUS SECTION 11.1 Notices., All notice ,, certificates or other communications hereunder to the Lessor:-and Lessee shall be sufficiently given and shall be deemed to have b'e:en received five business days after deposit in the United States mail in certified form, postage prepaid, to the Lessee or the Lessor, as the~case may be, at the following addresses provided in Section 14.0.4 of the Trust Agreement: If to the Lessee: 2487004/2 City of Petaluma 11 English Street Petaluma, CA 94953. Attn: City Manager 30 .`~dl' 1~647~/ a ~ ~ V' ~ ' V If.to the Lessor: California Public Facilities Equipment Leasing Corporation 20:.1 Purrington Road Petaluma., CA 94952 Attention: President If to the Trustee: Security Pacific National Bank Attention: All notices, certif,ica,tes and other communications to the Trustee shall be sufficiently given upon receipt by the Trustee. The Lessor; the Lessee and the Trustee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent. SECTION 11.2 Binding Effect. This Lease shall inure to the benefit of and shall be binding upon the- Lessor and the Lessee. and their re pect,ve successors and assigns. SECTION 11.3 Severability. In the event any provision of this Lease shall.be held invalid or unenforceable by a court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other prov.is.ion hereof. _ SECTION .11.4 Execution in Counterparts. This Lease may be executed in any number of counterparts,, each of which shall be an original and all of which shall constitute but one a_nd the same. instrument. SECTION 11.5 Applicable Law. This Agreement shall be governed by and construed in acc'ordarice with the laws of the State of California.. --SECTION 11.6 Amended and Restated Lease. This Lease shall be. deemed and construed to be an "amended and. restated lease"• and the Lessee and the Lessor hereby agree that this Lease is intended to amend and restate the 1985 Lease. IN WITNESS WHEREOF, the Lessor has caused this Lease to be executed in its name by its duly authorized officers, and the 31 2487004/2 ~d~.~D~~~~~ Lessee has caused this Lease to be executed in duly authorized officers, as of the date first CALIFORNIA PUBLIC EQUIPMENT LEASING Lessor -- - By CITY OF PETALUMA, as Lessee By: 2487004/2 32 its name by its above written. FACILITIES & CORPORATION, as President City Manager STATE OF CALIFORNIA ) ss. COUNTY ) On this day of ~ in the-year 1987 before me, the undersigned, a Notary Public in and for the State of California, personally appeared to me Donald M. Van Dyke, known to me to be (or proved to me on the basis of satisfactory evidence) the President, California Public Facilities & Equipment Leasing Corporation, the corporation that executed the within instrument,-and personally known to me (or proved on the basis of satisfactory evidence) to be the person who .executed the within instrument on behalf of said Corporation, and acknowledged to me that he executed the within instrument pursuant to a resolution of the~Board of Directors of said Corporation. WITNESS my hand and official seal. (Notarial Seal) 2487004/2 Notary Public in and for the State of California My commission expires 33 198 STATE OF CALIFORNIA ) ss. SONOMA COUNTY ) On this- day of in the. year 1987 before me, the undersigned, a Notary Public in and for the State of California, personally appeared to me John Schauer, known to me to be (or proved to me on the basis of satisfactory evidence) the City Manager. of the City of Petaluma, the public agency that executed the within instrument, and personally known to me (or proved on the. bas of satisfactory evidence) to be the person who executed the within instrument on behalf of said City, and acknowledged to me that he executed the within instrument pursuant to a resolution of said City. WITNES'S my hand and official seal. Notary Public in and for the State of California My commission expires 198 (Notarial Seal) 2'487004/2 34 EXHIBIT A SCHEDULE OF LEASE PAYMENTS Certificate Interest Principal Payment Date Component Component 24870D4/2 A-1 ~.,~c~~~NC~ EXHIBIT B GENERAL DESCRIPTION OF THE BUILDING B-1 2487004/2 ~~I)a ~ ~ g ~ ~~ r EXHIBIT C GENERAL DESCRIPTION _. OF THE EQUIPMENT Acquisition Acquisition Equipment Date Cost 2487004./2 C-1 Useful Liie EXHIBIT D 2487004/2 GENERAL DESCRIPTION OF THE PROJECT D-1 -'gib t ~+ . AMENDED AND RESTATED SITE LEASE (Petaluma Community Center and Police Refunding Project) THIS AMENDED AND RESTATED SITE LEASE (the "Site Lease"), dated as of April 15, 1.987,. by and be weep the CITY OF PETALUMA (the "City"), a municipal corporation of the State of California., as lessor, and CALIFORNIA PUBLIC FACILITIES ~ EQUIPMENT LEASTNG CbRPORATION, a California corporation (the "Corporation"), as lessee: W I T N E S S E T H WHEREAS, the City and the Corporation have previously entered into a Site Lease dated June 1, 1985 (the "1985 Site Lease") concerning the police services site ,at 969 Petaluma Boulevard North., in Petaluma in connection with the issuance of 1985 Certificates :of Participation (Petaluma~Police Facilities Project) (the "198.5 Cent==lfieates"); and WHEREAS, the City intends to participate in issuing 198'7 Certificates; of .Participation (.Petaluma Community Center and Police Refunding Project) which will., among other things, complete y defease he 1985 Certificates; and WHEREAS, the parties desire to supplant the 1985 Site Lease with this Amended and Restated Site Lease covering both the police facilities site and the community center; and WHEREAS, the-City and the Co--rporation propose to enter into a Lease/Purchase Agreement, to be dated. as of April 15, 1987 ('the "Lease"), pursuant to which the City will lease from the Corporation .and the Corporation Tease to the: City certain Facilities (the "'Project") to be acquired, constructed and installed at the site described in Exhibit A to thi"s Site .Lease (the "Situ"); and WHEREAS, the City is the owner in fee of the Site and has determined that,. to facilitate the purposes of the Lease, it is in tyre best interests of the residents of the City fo'r the City to lease the Site to the Corporation; and WHEREAS., pursuant to the Lease, the Corporation will XI~IT A ~~~. ~ s s 1 N r s lease the Site and the Project to the City; and WHERE9S~, the parties hereto intend that the City will defend and hold harmless the Corporation and its successors in interest and -their respective officers, agents, servants or employees from aYl suits, claims, obligations, demands, damages, liabilities, costs or expenses heretofore or hereafter arising from or incurred-as a result of or in connection with this Site Lease. NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:. Section 1. The Site. The City hereby leases to the Corporation anei t2e Corporation hereby hires from the City, on the terms and .conditions hereinafter set forth, the Site. Section 2.- Definitions. All capitalized terms used herein without definition shall-have the meanings set forth in the Lease. Section 3. Term• The term of this Site Lease shall commence on the date: of recordation hereof and shall end on April 15, 2012, unless such term is extended. or sooner terminated, as hereinafter provided. If (a) on April 15, 2012 any Certificate shall no be fully paid and retired, then the term of this Site Lease shall be extended until ten days after all the Ceti_f Cates shall be fully paid and retired.; and (b) if prior to April 15; 2012 all Certificates shall be fully paid, and retired, or defeased, pursuant to the Lease and Trust Agreements, the term of this Site .Lease shall end ten days thereafter or ten days after written notice by the City to the Corporation, whiehever`is earlier; provided, however, that notwithstanding the full payment. and .retirement of all Certificates, this. Site Lease shall continue in full force and effect to the extent necessary to effectuate the remedies provided in Article VII of the Lease; and provided, further, that the term of this Site Lease shall in no event be extended beyond April 15, 2017. Section~4. Rental. The Corporation City as and for .rental hereunder the sum of , on or before the date of commencement of the 2 shall pay to the term of this Site Lease. Section 5. Purpose. The Corporation shall use the site solely for the purpose of leasing the Site and the Project to the City pursuant to the Lease and for such purposes as may be incidental thereto; provided, that in the event of default by the City under the Lease, the Corporation may exexcise the remedies provided in the Lease. Section 6. Owner in Fee. The City covenants that it is the owner in fee of the Site. Section 7. A~~ gnments and Sublease IInless the City shall be in default under the Lease or the Lease shall have terminated as a result. of the failure to complete the acquisition, refurbishment-and installation of the Project as required by the Lease,. the Corporation may not assign rights under thi<s Site Lease or sublet the Site, without the written consent of the City, except that the City hereby expressly approves of the transfers and assignments contemplated by the Assignment Agreement dated as of April 1.5, 198'7, by and between the. Corporation and Security Pacific Nations]. Bank, as"Trustee (the "Trustee") under that certain Trust Agreement dated as of April 15, 1987, by .and between the Trustee and the City. Section 8. Right of Entrg. The City reserves the right for any of its duly author zed representatives to enter upon the Site at any time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. Section 9-. Termination. The Corporation agrees, upon the termination of this Site Lease, to quit and surrender the Site in the same good order and condition as the same was in at the time of completion of the project, reasonable wear and tear excepted. Section~l0. ortga¢e of Leasehold.. The Corporation is hereby granted the right to mortgage or hypothecate or otherwise encumber~this~Site Lease and any rights hereunder and the leasehold created hereby, by trust agreement, indenture or deed of trust. or otherwise. In the event of foreclosure or sale under any trust agreement, mortgage, deed of trus indenture or other instrument, the. Trustee or any purchaser at any sale under foreclosure or power of sale thereunder shall .have and possess 3 ~~~. ~ ~ ~ ~- ~ C all of the rights herein granted to the Corpo:r:ation. Section 11. Default. In the event the Corporation shall be in default in the performance of any ,obligation on its part to be:performed under the terms of this Site Lease, which default continues fbr 30 flays following notice and demand for correction ther,.eof to the Corporation, the City, subject to the provisions of Seeton 10 hereof, may exercise any and all remedies granted. by law, except that no merger of this Site Lease. and of the Lease shall be deemed to occur as a result thereof; provided, however, that the City shall have no power to terminate this Site Lease by reason of any default on the part of the Corporation if such termination would affect or impair any assignment or sublease of all or any part of the Site then in effect between the Corporation and any assignee or subtenant of the Corporation (other than the City under the Lease). So long as any Sueh assignee or subtenant of the Corporation shall duly perform the terms and conditions of this Site Lease and of its then existng~~sublease (if any), such assignee or subtenant shall be deemed to be and shall become the tenant of the City hereunder and Shall be entitled to all of the rights and privileges gr'ant`ed under any such assignment; provided, further, that so long as any indebtedness of the Corporation secured by a trust agreement, indenture or deed of trust or any Certificates are outstanding and unpaid in accordance with the terms thereof, the rentals or any part thereof payable to the 'Trustee under - such trust agreement, indenture or deed of, trust (by the terms of such trust agreement, assignment or sublease) shall continue to be paid to such trustee. Section 12. Ouiet,Enjogment. The Corporation at all times during the term of this Site Lease, subject to the provisions of Section 11 hereof, shall peaceably and quietly have, hold and enjoy all of the Site. Section. l3._W~.vPr of Personal_ Liability. All laabilities under this Sine Lease on the part of the Corporation or any successor in interest of the Corporation shall be solely corporate `liabilities of the Corporation or such successor, and the City hereby releases each and every member, director, officer, agent, servant and employee of the corporation and such successor of and from any personal or individual liability under this Site `Lease. No member, director, Officer, agent, servant and employee of the Corporation shall at any time or under any 4 ~~~.~6~~.N~~ circumstances be individually Site Lease to the City or to anything done or omitted to b successor hereunder.. or personally liable under this any .other party whomsoever .for e done by the Corporation or such Section 14. Taxes. The City covenants and agrees to pay any and all,assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Site (including both land and improvements). Sect"ion 15. Eminent Domain. In the event the whole or any part of the Site or the improvements thereon is taken by eminent domain proceedings, the interest of the Corporation shall be recognized in accordance with the terms of the Lease and of the Trust Agreement, and the balance of the award, if any, shall be paid to the City. Section 16. Validity. If any one or more of the terms, provisions, promises, covenants or conditions of this Site Lease shall to any extent be adjudged invalid, unenforceable, void or voidable for any reason whatsoever, by a court of competent jurisdiction, then each and all of the remaining terms, provisions, promises, `covenants and Condit-ions of this Site Lease shall not be affected thereby and shall be valid and enforceable to the fullest extent permitted by law. If for any reason this Site Lease shall be held by a court of competent jurisdiction void, voidable or unenforceable by the Corporation or by the City, then and in such event for and in consideration of the right of the Corporation to possess, occupy and use the Site, which right in such event is hereby granted, this Site .Lease shall thereupon become and shall be deemed to be a lease from year to year. Section 17.,~Totices. All notices under this Site Lease by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered by hand directly~to the offices named below or sent by United States registered mail, return receipt requested, postage prepaid and addressed as .follows: 5 ~~~..y6~1NCS ~: 'F {a) if tb the City, to: City of Petaluma Attention: City Manager 11 English Street Petaluma, CA 94952 (b) if to the Corporation, to: California Public Facilities ~ Equipment Leasing Corporation 201 Purrington Road. Petaluma, CA 94952 or to such other address or addresses as either party hereto may designate to the ocher by notice given in accordance with the provisions of this Section. Section 18. Execution and Recordation. This Site Lease may be; simultaneously executed in any number~of counterparts, each of which. when So executed shall be deemed to be an original, and all of which together shall. constitute one and the same Site Lease. The City shall promptly record a memorandum of this Site Lease upon the execution hereof. Section 1,9. Indemntg. The indemnity provisions of the Lease, whereby City agrees to indemnify and .hold Corporation (referxed to. in the. Lease as "Lessor") harmless, are incorporated by this reference herein, and City shall have the same obligation under this Site Lease to indemnify and hold Corporation harmless. Section 20. Law Governing. This Site Lease is made in the State of California under the Constitution and laws of the State and is to be o construed. Section 21. 19'8`5 Site Lease. The 1985 Site Lease is completely replaced by this Site Lease. IN WITNESS WHEREOF, the parties hereto have executed this Site Lease as of the day and year first above written. CITY OF PETALUMA 6 ~~~.16 8 ~. N ~ 8 4 a t (Official Seal) ATTEST: By City Clerk By John L. Scharer, City Manager CALIFORNIA PUBLIC FACILITIES ~ EQUIPMENT LEASING CORPORATION By Donald M. Van ,Dyke, President (Corporate Seal) 7