HomeMy WebLinkAboutOrdinance 1621 N.C.S. 06/03/19857 ~i' '_ 'Iti~+,s'
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Lntroduced by
Vice Mayor Bond
JUN 31985 ~'
ORDINANCE NO. 1621 N. C. S
Seconded by
Councilman Balshaw
AN ORDINANCE AUTHORIZING LEASE OF REAL
PROPERTY LOCATED AT 96.9 PETALITMA BOULEVARD
NORTH, PETALUMA, CALIFORNIA
BE IT ORDAINED by the Council of the City of Petaluma as follows:
Section 1. The real property located at 969 Petaluma
Boulevard North., Petaluma, California, is hereby authorized to be
leased under the terms and conditions set forth in the agreement
entitled "Lease 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 for the .immediate preservation of the public
peace and safety in that the property to be leased is necessary for
use as a police station.
Section 3. The action of the City Clerk in posting a copy
of this ordinance on the bulletin board at the City Mall for at
least two days prior to the adoption hereof, by unanimous vote of
the Councilmembers present, is approved; and the Council finds that
such posting meets the requirements of Section 45 of the City
Charter.
Section 4. The City Clerk be, and she is hereby directed
to publish this ordinance for the period and in the manner as
Ord No 162.1 N.C.S_
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required by the City Charter.
INTRODUCED AND ORDERED published this 3rd day of June ,
1.985 by the following vote:
AYES• Balshaw/Davis/Tencer/V.M. Bond/Mayor Mattei
NOES: None
ABSENT: Cavanagh/Woolsey
Ord No 1621. N.C.S. 2
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DRAFT OF
3/31/87
Recording Requested By: )
City of Petaluma )
When Recorded Mail To: )
Sturgis, Ness, Brunsell & 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 FACLLITIES & EQUIPMENT
LEASING CORPORAT-.ION
as Lessor
and the
CITY OF PETALUlti1A
as Lessee
EXHIBPf A
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TABLE OF CONTENTS
Pa e
ARTICLE I
'--. DEFINITIONS AND EXHIBITS
SECTION~1.1~ Definitions and Rules of Construction ..... 3
SECTION 1.2 Exhib'its .................................. 4 .-
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES -
SECTION~2~.1-.. Representations, Covenants and
-. ..-. "Warranties of the Lessee ................ 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; Certification ............ 8
SECTION 3.6 Substitution .............................. 8
SECTION 3.7 Financing Statements ...................... 8
SECTION 3.8 Further Assurances and
Corrective Instruments .................. 9
ARTICLE IV
AGREEMENT TO LEASE; TERM OF
LEASE; LEASE PAY[~'IENTS; TITLE TO THE PROJECT
SECTION 4.1 Lease ..................................... 9
SECTION 4.2 Term ...................................... 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
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SECTION 4.7 Budget and Appropriation .................. 11
SECTION 4.8 Assignment of Lease Payments .............. 12
SECTI'.ON 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
INSUR~tCE
SECTION 5.1 Public Liability and
Property Damage ......................... 13
SECTION 5.2 Workers.' Compensation ..................... 14
SECTION 5.3 Casualty and Theft
Insurance .............. ............... 14
SECTION 5.4 Rental Interruption Insurance ............. 15
SECTION 5.5 Title Insurance ........................... 15
SECTION 5.6 Genera_1 Insurance Provisions .............. 16
SECTION 5.7. Cooperation ............................... 16
- -- -- - ARTICLE 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 ...................:.. 18
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
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SECTION 7.10 Lessor's Disclaimer of Warranties ......... 22
SECTION 7.11 Lessee's Right to Enforce
Warranties of Vendors or
Contractors ............................. 23
- ~ ARTICLE VIIII
ASSIGNMENT, SUBLEASING AND AMENDMENT
SECTION 8.1 Assignment by the Lessor ............... .. 23
SECTION 8.2 Assignment and Subleasing
by the Lessee ............................. 23
SECTION 8.3 Amendments 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 Proceeds 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 10,_2 Optional Prepayment ....................... 29
SECTION 10.3 Credit for Amounts on Deposit ............. 30
SECTION 10.4 Effect of Prepayment ...................... 30
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Notices ......................... ......... 30
SECTION 11.2 Binding Effect .......... ................. 31
SECTION 11.3 Severability .............................. 31
SECTION .11.4 Execution in Counterparts ................. 31
.SECTION 11.5 Applicable Law ............................ 31
SECTION 11.6 Amended. and Restated Lease ................ 3.1
Exhibit A - Schedule of Lease Payments ................... A-1
Exhibit B - General Description of the Project ........... B-1
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LEASE/PURCHASE AGREEMENT
THIS LEASE/PURCHASE AGREEMENT, dated as of April 15, 1987,
by and between the CALIFORNIA PUBLIC FACILITIES & EQUIPMENT
LEASING CORPORATION, a corporation duly organized and existing
under the laws of the State. of California, as lessor (the
"Lessor"), and the CITY .OF PETALU'KA, a charter city duly
organized and existing under the Constitution and laws of said
State of California,_as lessee (the "Lessee");
W I T N E S S E T H:
REGARDING the refinancing of certain obligations:
WHEREAS, the Le see and the Lessor have heretofore entered
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 accxuisition
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 "1.985 Certificates") to facilitate the
financing of the 1985 Project; and
WHEREAS, the Les-see and the Lessor have determined that it
would. be in the best interests of the Lessee, the Lessor and
the residents of the Lessee to refinance such 1985 Certificates
and the 1985 Project; and
WHEREAS, pursuant to its Charter and Section 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;
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WHEREAS, the Lessor and Lessee wish to provide financing
for the acquisition, equipping and construction, as described
herein, of a community described in 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 in-lease payments to be made by the
Lessee hereunder; and
WHEREAS, the 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 "Site 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 provides that the title to such Project shall vest
in the.-Lessee at the expiration of such Site Lease (as Drovided
in-Section 7 thereof), and contains other terms and conditions
as the City Council of the Lessee deems to be in the best
interest of the Lessee; and
WHEREAS, therefore, 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 Lessee proposes to acquire certain equipment
(the "Equipment:'), described in Exhibit C hereto, by entering
into this Lease;
NOW, THEREFORE, in consideration of the above premises and
of the mutual covenants hereinafter contained and for other
good and valuable consideration, the parties hereto agree as
follows:
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ARTICLE I
" DEFINITIONS AND EXHIBITS
SECTION 1.1 Definitions and Rules of Construction. Unless
the context otherwise requires, the capitalized terms used
herein shall, for all 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 include 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.
"Equipment" means the Equipment listed in Exhibit C hereto.
"Project" means tiie~Prbject described in Exhibit D hereto.
"Perm'itted 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 be amended from time to
time; (iv) any right or claim of any mechanic, laborer,
materialman, supplier or vendor not f"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 materially impair the use of the Project by the Lessee; and
(vi) easements, rights of way, mineral rights, drilling rights
and other 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 described in Exhibit A to
the Amended and Restated Site Lease, dated the date hereof
between the Lessor and the Lessee.
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"Vendors" or "Contractors" means the persons with whom the
Lessor, or the 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
Buildings.
.SECTION 1.2 Exhibits. ~_The following Exhibits are
attached to, and. by reference made a part of, this Lease:
-_. Exhibit A: -Schedule of Lease Payments to be paid by
the Lessee to the Lessor, 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 WARRANTIES
SECTION 2.1 Representations, Covenants _a
the Lessee. The Lessee represents, covenants
the Lessor as follows:
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(a) Due Organization and Existence.
charter city and municipal corporation of the
organized and existing under the Constitution
State.
zd Warranties of
and warrants to
The Lessee is a
State, duly
and laws of the
(b) .Authorization; 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 Trust Agreement and to enter into the
transactions 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 enforceable' in accordance
with their respective terms, except to the extent limited by
app icable bankruptcy, insolvency, reorganization, moratorium
or similar laws or equitable principles affecting the rights of
creditors generally.
(c) No Conflicts or Default; No Liens or
Encumbrances. Neither the execution and delivery of this
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Lease,, the Site Lease.,. the .Escrow Agreement, the Agency
Agreement or the Trust Agreement, nor the fulfillment of or
compliance with the terms and conditions 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 re tricton or any agreement or
instrument to wh.ch_the Lessee is now a party or by which the
Lessee is bound., or constitutes a default under any of the
foregoing, or re uhts in the creation or 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 t:he Trust Agreement and except for
Permitted Encumbrances.
(d) Execution 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 defend, indemnify and hold harmless the Lessor and its
directors and employees (collectively, the ".Indemnified Party")
against any and all los ~es, claims, damages or liabilities,
joint or several, incl-tiding fees and expenses incurred in
connection therewith, to which such Indemnified 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 shall 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 los sea, claims, damages, liabilities or actions
arise out of the transactions contemplated by this Lease. In
particular, without limitation, the Lessee shall and hereby
agrees to indemnify and save the Indemnified Party harmless
from and against .all claims, losses. and damages, including
legal fees and expenses, arising out of (i) the use,
maintenance, condition 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 negligence of any assignee or sublessee of the Lessee
with respect 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 Agr-eernent, it will make no use of the proceeds of the
Certificates or of any other amounts or property regardless of
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the source or take any action or refrain from taking any action
that may cause-the obligations of the Lessee under thin
Agreement to be "arbitrage bonds" subject to federal income
taxation by reason of Section 148 of the Lnternal 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 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 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,
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applicable and-in effect.
SECTION 2.2 ReRresentations, 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 fulfillment of or compliance with the terms
and conditions hereof or thereof, nor the consummation of the
transactions contemplated hereby or thereby, conflicts with or
results in a br--each o_f the terms, conditions or provisions of
the articles of Incorporation 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 or 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 accordance 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 refrain from taking any action
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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 r_ot
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 "federa ly 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 al,l 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.
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_~ ._ .ARTICLE I I I
- -ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE PROJECT
SECTION 3.1 _Deposit of Certificate Proceeds. On the
Cl:os:ing__Date the Lessor agrees to pay or cause to be paid to
the Lessee moneys-to 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, rehabi it ate, 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 of Lessor. The Lessee as
agent of the Lessor under the Agency Agreement will arrange
far, 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 providing for the acquisition, delivery and installation
of the Equipment and the acquisition, construction,
rehabilitation, remodeling and improvement of the Project.
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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 provided 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 Completion Date; Certification.
(a) Completion Date. It is contemplated that the
Lessee will take po session of all portions of the Project on
or before October 15, 1.988. The Lessee has agreed pursuant to
the Agency Agreement to use its best efforts to acquire,
construct and improve the Project by that date.
(b) Certificate of Completion. Upon acquisition,
construction and improvement of the Project, satisfactory to
the Lessee, the Le see 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 with respect to the Certificates as
provided in Section 5.04 of the Trust Agreement.
SECTION 3.6 Substitution. The City will operate, maintain
and..preserve, or cause to be operated, maintained and
preserved, the Project in good repair and working order and
will operate the..Project in a sound, efficient. and economical
manner as public facilities and will not, during the term
hereof, substitute other .facilities for use as a community
center or police services building without providing for
continued public 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 Commercial 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
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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 Assurances and Corrective
Instruments. 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 as 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
on the date hereof and shall end
extended pursuant to Section 4.3,
thereto upon the earliest of any
of this Lease shall commence
on April 15, 2012, unless
or unless terminated prior
of the following events:
(a) Default and Termination. A de-fault by the Lessee
and the Lessor's e ection to terminate this Lease under
Sect-ion 9.2(b) hereof;
(b) Payment of All Lease Payment The payment by
the Lessee of all 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) Purchase. Upon the exercise by the Lessee of its
option to purchase all of the Project as provided in
Section 7.3; provided, however, that the Lease shall be
terminated with respect to any item of or portion of the
Equipment, title to which is transferred to the Lessee upon the
end of its useful life and provided that this Lease shall
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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 fully 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., construction and
improvement of the Project or portions thereof), Section 4.10
(regarding abatement in event of loses o€ 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) consisting of interest only on
the principal amount evidenced by the Certificates to a date
not more than three months after the portions of the Project
are acquired, 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 Lease Payment Date (other than amounts resulting
from the prepayment of the Lease Payments in part but not in
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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 towards 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 paid.
-.._ (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 default 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 interest in the Lease Payments
in default.
SECTION 4.5 No Withholding. Notwithstanding any dispute
between 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 Lessee to perform the task for which it is
leased, the Lessee shall make all Lease Payments when due and
shall not withhold any Lease Payments pending the final
resoaution 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 continued quiet. use and enjoyment of,
the Project during each such period for which said rental is to
be paid. The parties hereto have agreed and determined that.
such total rental represents the fair renta 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 1-,mted to costs of
maintenance, taxes and insurance), the uses and purposes which
may be served by the Project and the benefits 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 fair 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.
SECTION 4.7 Budget and Appropriation. The Lessee
covenants to take: such action as may be necessary to include
all Lease Payment (other than the Lease Payments of advance
rental). and Additional Payments (to the extent such Additional
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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.shall.be.construed.to be duties imposed by law
- - -
and-it shall be the.duty of each and every public official of
the Lessee~to take such action and do such things as are _
required by law in the performance of the official duty of such
officials to enable the Lessee to carry out and perform the
covenants and agreements in this Lease agreed to be carried out
and performed by the Lessee. ~ -
SECTION 4.8 As• ignment of Lease Payments. All of the
Lessor's rights under this 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.hexeby agrees to pay to the Trustee at the
Trustee's. corporate trust .office in Sah Francisco, California,
o n 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 use 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
abatement shall continue for the period commencing with such
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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 Lessee 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 necessary administrative
costs of the Lessor or charges required to be paid by it in
order to-maintain its existence or to comply with the terms of
the Certificates or of the Trust Agreement or to indemnify the
Lessor and its officers and directors.
SECTION 4.12 Net-Net-Net Lease. This 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 Damacre.
(a) Coverage. The Lessee shall maintain or cause to
be maintained, throughout the Term hereof, a standard
comprehensive general public liability and property damage
insurance policy or policies in protection of the Lessee, its
officers, agents: and employees. Said policy or policies shall
provide for indemnification of said parties against direct or
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contingent loss or liability for damages for bodily and
personal injury, death or property damage 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 all 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 may be 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 Casualty 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 loss or damage to any item or portion of the Project by
fire and lightning, with extended coverage and vandalism and
malicious mischief 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, aircraft, vehicle damage, smoke and such other hazards as
are normally covered by such insurance.
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2487004/2
(b) e'lmount. Such insurance shall be in an amount
equal to 1000 of the replacement cost of the Project (except
that such insur-ance may be subject to deductible clauses of not
to exceed $5,000 for any one ioss); provided, however, that in
no event shalh-such 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 Interruption Insurance.
(a) Cove-rage and Amount. The Lessee shall maintain
or cause to be maintained on or prior to the acquisition,
construction, equipping and/or remodeling of the Project, in no
event later than such 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 remaining 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 becomes 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,
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2487004/2
(including, if available, mechanics' lien coverage) in an
amount equal to the costs of the Buildings, 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 self-insurance shall be in form certified
by an insurance agent, broker or consultant to the Lessee to
comply with the provisions hereof. All 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 payable 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 Cooperation. The Lessor 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 condemnatiorL proceeding with respect
to the Project or any portion thereof.
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16
A ~
ARTICLE VI
DAMAGE, DESTRUCTION AND EMINENT DOMAIN;
USE OF NET PROCEEDS
SECTION 6.1 Application of Net Proceeds.
(a) Deposit in Net Proceeds .Fund. Pursuant to
Section 7.01 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 (regarding 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 disburse 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 purpose, together with any
other funds supplied by the Lessee for such purpose,
are sufficient therefor, and
(ii) Timely Completion. In the event that
damage, destruction or taking results in an abatement
of Lease Payments, such replacement 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
mentioned therein has been properly incurred, is a proper
2487004/2
17
~ ~
charge against the Net Proceeds Fund, has not been the
basis of any previous withdrawal, and specifying in
reasonable detail the nature of the obligation, accompanied
by a bill 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) Disbursement 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
warrants 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. During Term. During the Term
of this Lease, the Le sor 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 all actions
reasonably required, including but not limited to executing and
filing any and all documents, reasonably required to maintain
and evidence 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
Y'
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 of default shall have
occurred and be continuing hereunder, all right, title and
interest of the Lessor in and to any item or portion of the
Project shall cease. upon the expiration of the useful life of
such item or portion of the Project specified by the Lessee in
Exhibit C, as amended, and upon the expiration of 10 years with
respect to Equipment, without the necessity 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 f-ands to pay the aggregate amount for the
entire remaining term of this Lease of the part of the total
Lease Payments hereunder attributable to such part of the
Project (determined by reference to the 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 15, 1995, pursuant to
the provisions of Section 4.03 of the Trust Agreement and
Section 10.2 of this Lease. Upon the making of such payment to
the Trustee, (a) the interest and principal 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 Project and theretofore paid
pursuant to Section 4.4 hereof, (b) Section 3.06 and this
Section of the Lease shall not thereafter 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 of this Lease shall end as to such part of the
Project.
SECTION 7.4 Quiet Enjoyment. During the Term, the Lessor
shall provide the Lessee with quiet use and enjoyment of the
Project, and the Lessee shall during such Term peaceably and
quietly have and .hold and enjoy the Project, without suit,
2487004/2
19
trouble or hindrance 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 asserts 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.
SECTION 7.5 Installation 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 portion 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 which neither 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 shall 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. Nothing 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:Lesisor Representative-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 inspeet:.the. Project. The Lessee 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.
(a) Maintenance; Repair and Replacement. Throughout
the Term of th-s 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 for or otherwise arrange 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 provided, the Lesso-r agrees to provide only the
Project., as hereinbefore more specifically set forth. The
Lessee waives the benefits of subsections 1 and 2 of
20
248T004/2
-.
Section 1932. 'o f. the California Civil Code, but such waiver
shall not limit any of the rights of the Lessee under the terms
of this Lease. -
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 charges 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 or 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 om other charges so
contested to remain unpaid during the period of such contest
and any appeal therefrom; provided that prior to such
nonpayment it...sha11 furnish .the Lessor and the Trustee with the
opinipn of an Independent Counsel, to the effect that, by
nonpayment of any such items, the intereat 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 ..inform satisfactory to the Lessor. The Lessor
will cooperate fully in .such contest upon-the request and at
the expense of the Lessee.
SECTION 7.8 Modification of the Project.
(a) Additions; 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. All such additions, modifications and improvements
shall thereafter comprise 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
21
2487004/2
authorized under the provisions of State and federal law or in
any way which. would impair the tax-exempt status of the
interest components of the Lease Payments or diminish the fair
rental value of the. Project; and the Project, upon completion
of any additions, modifications and improvements made pursuant
to this Section, shall be of a value which is not substantially
less than the vaiue-of 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 Section; provided that if any such lien is
established and the Lessee 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
period 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 provi-ded in this Article,
(including without limitation Section 7.8 hereof) the Lessee
shall not, directly or indirectly, create, incur, assume or
suffer to exist any mortgage, pledge, lien,. charge, encumbrance
or claim, as applicable, on or with respect to the Project,
other than-the respective rights of the Lessor and the Lessee
as herein provided and except as to .Permit ed 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 the same shall arise at any time; provided that
the Lessee may contest such liens if it desires to do so. The
Lessee shall 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 7.10 Lessor's Disclaimer of Warranties. THE
LESSOR MAKES NO WARRAI'~1TY OR REPRESENTATION, EITHER 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
22
2487004/2
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, the Assignment Agreement or the Trust
Agreement for. the existence, furnishing, functioning or
Lessee's use and possession of the Project.
SECTION 7.11 Lessee's Right to Enforce Warranties of
Vendors or Contractors. 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 time 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
against_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
respect. .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 all amounts recovered as a result of the assertion of
any such claims and rights. The Lessor shall, upon the
Lessee'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 Ass,gnment by the Lessor. Except as provided
herein and in the Trust Agreement, the Lessor 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.
SECTION 8.2 Assignment and Subleasing by the Lessee.
(a) Assignment. This Lease may not be assigned by
the Lessee. unless the Lessee receives an opinion of Bond
Counsel stating that such assignment does not adversely affect
the tax-exempt status of the Certificsates. In the event that
this Lease is assigned by the Lessee, the obligation to make
Lease Payments hereunder shall remain the obligation of the
Lessee.
23
2487004/2
(b) Sublease. The Lessee may sublease any portion of
the Project, 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 Trustee a true 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
governmental 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 taxes
~- - 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
SECTLON 9.1 Events of Default Defined. The following
shall be "events ofdefault" under this Lease 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 corresponding Lease
Payment Date; provided, however, thaw such failure sYiall
not constitute. an event of default if the amounts so unpaid
have been transferred from the Reserve Fund or other
special fund source to the Lease Payment Fund to make such
Lease Payments pursuant to the terms of the Trust Agreement.
(b) Covenant Default. Failure by the Lessee to
observe and perform any warranty, covenant, condition or
24
2487004/2
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) of 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 Lessee 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 under 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 anything herein or in the Trust Agreement to
the contrary, THERE SHALL BE NO RIGHT UNDER ANY CIRCUMSTANCES
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
T-rustee or the Owners in accordance with the provisions of the
Trust Agreement..
(a) No Termination: Repossession and Re-Lease on
Behalf of Less:ee. In the event the Lessor does not elect to
terminate this Lease in the manner hereinafter provided for in
subparagraph (b) hereof, the Lessor may, with the consent of
the Lessee, which consent is hereby irrevocably given,
25
2487004/2
repossess the Project and re-lease it for the account of the
Lessee, in which .event the Lessee's obligation will accrue from
year-to-year 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 credits 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
whether 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 Project. The Lessee
hereby waives any and ala claims for damage caused or which may
be caused by the Lessor in repossessing 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 Lessee 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 repossession 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 of 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 be effected in the sole and exclusive manner provided
2487004/2
26
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 all 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. shall have no right
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 pay 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 election on the part of the Lessor to
terminate this Lease. The ..Lessee covenants and agrees that no
surrender of the Project 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
Lessee: (i)-the worth at the time of award of the unpaid rental
which had been earned at the time of termination; (ii) the
worth at the time of award of the amount by which the unpaid
rental for the balance of the term after the time of the award
exceeds the amount of-such rental loss 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 the ordinary course of
things would be likely 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. interes-t. - -...--. -
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 of
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 Lessor 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
riow or~hereafter existing at law or in equity. No delay or
omission to exercise 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 from 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 to give any notice, other than such notice as may be
required in this Article or by law.
SECTION 9.4 Agreement to Pay Attorneys' Fees and
Expenses. In the event either party to this Lease should
default under any of the provisions hereof and the
nondefaulting party should employ attorneys 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 herein,-the defaulting
party agrees 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.
28
2487004/2
,v
~~
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'.5 Application of the Proceeds from the Re-Lease
of_the Project. All. amounts 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
Ri 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
Lessee 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
plus (3) the prepayment premium described-in such Section 4.03.
SECTION 10.1 Mandatory Prepayment From Net Proceeds. The
Lessee shall be 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'.01 of the Trust Agreement. The Lessee
and the Lessor hereby agree that such Net Proceeds. shall be
credited. towards the Lessee's obligations hereunder (except in
the~case of such prepayment of the Lease 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 relating 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 staid option by giving written notice to the
Trustee thereof at least 45 days prior to the date of
prepayment and depositing with said notice cash in the minimum
amount of $20,000, plus (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,
2487004/2
29
O 9
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 purchase option described in Section 7.3
hereof or from Net Proceeds as provided in Section 10.2
hereof), the Lessee's obligations under 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 al 1. 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 principa3 components of the remaining Lease Payments
in the inverse order due, corresponding to the resulting
prepayment of principal with respect to the Certificates, or
(b) pursuant to SeCt,ion 7.3 hereof, the obligation of the
Lessee-to pay the remaining Lease Payments shall be reduced as
.- _.
provided in such. Section 7.3.
-- - - ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Notices. All notices, certificates or other
communications hereunder to the Lessor and Lessee shall be
sufficiently given and shall be deemed to have been 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 14.04 of the Trust Agreement:
If to the Lessee: City of Petaluma
11 English Street
Petaluma, CA 94953.
Attn: City Manager
30
2487004/2
A ~
If to the Lessor: California Public Facilities &
Equipment Leasing Corporation
201 Purrington Road
Petaluma, CA 94952
Attention: President
If to the Trustee: Security P,ac;ific National Bank
Attention:
All notices, certificates 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 respective 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 provision 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 and the
same instrument.
SECTION 11.5 Applicable Law. This Agreement shall be
governed by and construed in accordance 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
- ~.
Lessee has caused this Lease to be executed in its name by its
duly authorized officers, as of the date first above written.
CALIFORNIA PUBLIC FACILITIES &
EQUIPMENT LEASING CORPORATION, as
Lessor
_ . _ _._ By, ....
President
CITY OF PETALUMA,
as Lessee
By:
City Manager
32
2487004/2
s
/ • 7 ~;
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.
Notary Public in and for the
State of California
i~1y commission expires
198
(Notarial Seal)
33
2487004/2
~~
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 basis 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.
WITNESS my hand and official seal.
Notary Public in and for the
State of California
My commission expires
(Notarial Seal)
2487004/2
34
198
a
e,
i ~
L~VTSTaTR7 T
SCHEDULE OF LEASE PAYMENTS
Certificate Interest Principal
Payment Date Component Component
A-1
2487004/2
EXHIBIT B
2487004/2
GENERAL DESCRIPTION OF THE BUILDING
B-1
_ ~. 4
1) ~.
~ , r ~.
EXHIBIT C
GENERAL DESCRIPTION
- _.. .
OF THE
EQUIPMENT
Acquisition Acquisition Useful
Equipment Date Cost Life
C-1
.2487004/2
~ . ~; ^.l
r r ~..
EXHIBIT D
2487004/2
GENERAL DESCRIPTION
OF THE PROJECT
D-1
:^iy~
-a. `,
t
AMENDED AND RESTATED
SITE LEASE
(Petaluma Community Center and Police Refunding Project)
THSS' AMENDED AND RESTATED SITE LEASE (the "Site
Lease"), dated as of April 15, 1987, bg and between the CITY OF
PETALIIMA (the "City"), a municipal corporation of the State of
California., as lessor, and CALIFORNIA PUBLIC'FACILITIES ~
EQUIPMENT LEASING CORPORATION, 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 "1.985 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 "1985 Certificates''); and
WHEREAS,, the City intends to participate in issuing
1987 Certificates of Participation (Petaluma Community Center
and. Police Refunding Pro;~ect) which will, among other things,
completely defease the 1`985 Certificates; and
WHEREAS, the parties desire to supplant the 1985 Site
Lease with this Amended and Restated Site Lease covering both
the police facilities mite and the community center; and
WHEREAS, the City and the Corporation 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 lease to the City certain
Facilities (the "Project") to be acquired, constructed and
installed at the site described in Exhibit A to this Site Lease
(the "Site"); 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 the best interests of the residents of the City for the
City to lease the Site to the Corporation; and
WHEREAS, pursuant to the Lease, the Corporation will
~~.I$IBIT A
dip Ic.o~l ~1~S
lease the Site and the Project to the City; and
WHEREAS, 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 all 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 and the 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 de'f'inition shall have the meanings set forth in
the Lease.
Section 3. ~rm 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 not be fully paid and retired, then the
term of this Site Lease shall be extended until ten days after
all the Cetificates 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 daysafter written notice by the City to the
Corporation, whichever: is earlier; provided, however, that
notwithstanding the full payment and retirement of all
Certificates, this. Site. Lease shall continue in full force and
eff.ec.t 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 f,or rental hereunder the sum of
on or before the date of commencement of the
shall pay to the
term of this Site
2
Lease.
Section 5. Pur~ose• 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 exercise 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. Assignments and Subleases Unless 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 this 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 15, 1987, by and between
the Corporation and .Security Pacific National 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 Entry. The. City reserves the right
for any of its duly authorized 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 Cor-potation 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. Mortgage 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 trust, indenture or
other instrument, the Trustee or any purchaser at any sale under
foreclosure or power of sale thereunder shall have and possess
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all of the rights herein granted to the Corporation.
Section ll. 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 for 30 days following notice and demand for
correction thereof to the Corporation,, the City., subject to the
provisions of Section 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 C y 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 qr any part of the Site then
in effect between the Corporation and any assignee or subtenant
of the Corporation (other. than the Citg under the Lease). So
long as any such assignee or subtenant of the Corporation shall
duly perform the terms and conditions of this Site Lease and of
its then existing sublease (if any), such assignee or subtenant
shall be deemed to be~and shall become the tenant of the City
hereunder and shall be,.entitled to all of the rights and
privileges granted 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 1.2. Quiet Enjoyment., The Corporation at all
times during the term of thus Site Lease., subject to the
provisions of Section 11 hereof, shall peaceably and quietly
have, hold and enjoy all of the Site.
Section 13. ..Waiver of Personal Liability. All
liabilities under this. Site Lease on the part of the Corporation
or any successor in interest of the Corporation .shall be solely
corporate aablties 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
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circumstances be individually or personally liable under this
Site Lease to the City or to any other party whomsoever for
anything done or omitted to be done by the Corporation or such
successor hereunder.
Section 14.. Taxes. The City covenants and agrees to
pay any and. all assessments of any kind or character and also
all taxes, incl-udng possessory interest taxes., levied or
assessed upon the Site (including both land and improvements).
Section 15. Eminent Domain... Tn 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 baliance of the award, if
any, shall be paid to the City.
Section 1'6. Validitg. 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 conditi-ons of this Site
Lease shall no,t 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 r-fight 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. notices. 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:
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a
_•' -
(a) if to the City, to:
City of~Petaluma
Attention: City Manager
11 English Street
Petaluma, CA 94952
(b) if to the Corporation, to:
Ca1if'ornia Public Facilities ~
Equipment Leasing Corporation
201. Purrington Road
:Petaluma, CA 9495.2
or to such other. address or addresses as either party hereto may
designate to the other by notice given. in accordance with the
provisions of this S'eetion.
Section 18.. Execut-ion 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 19. indemni g. The indemnity provisions of the
Lease,. whereby City agrees to indemnify and hold Corporation
(ref erred. to in the Lease as "Lessor") harmless, are
incorporated by this r:aference 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 so construed.
S-eGtion 21. 1.9.85 Site Lease. The 1985 Site Lease is
comple ely replaced by~ths Site .Lease.
=~ ZN WITNESS' WHEREOF, the parties hereto have executed this
Site Lease as of the day and. year first above written.
CITY OF PETALUMA.
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.~
.-~:,~
~z
(Official Seal)
ATTEST:
By
City Clerk
(Corporate Seal)
By
John L. Scharer, City Manager
CALIFORNIA.-PUBLIC FACILITIES ~ _
EQUIPMENT LEASSNG CORPORATION
By
Donald M. Van Dyke., President
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