HomeMy WebLinkAboutRedline Facility Lease - City of San Luis Obispo 2018 LRRBOH&S Draft 1/2229/18
4125-4518-0943.30943.4
Recording requested by
and return to:
CITY OF SAN LUIS OBISPO
c/o Orrick, Herrington & Sutcliffe LLP
1120 NW Couch St., Suite 200
Portland, Oregon 97209
Attention: Angie Gardner, Project Manager
This transaction is exempt from California documentary transfer tax pursuant to Section
11929 of the California Revenue and Taxation Code. This document is recorded for the
benefit of the City of San Luis Obispo and the recording is fee-exempt under Section 6103 of
the California Government Code.
FACILITY LEASE
between the
SAN LUIS OBISPO PUBLIC FINANCING AUTHORITY
and the
CITY OF SAN LUIS OBISPO
Dated as of MarchApril 1, 2018
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FACILITY LEASE
This Facility Lease, dated as of MarchApril 1, 2018, between the SAN LU IS
OBISPO PUBLIC FINANCING AUTHORITY (the “Authority”),a joint exercise of powers
authority organized and existing pursuant to the laws of the State of California, as lessor, and the
CITY OF SAN LUIS OBISPO (the “City”), a municipal corporation duly organized and validly
existing under the Constitution and laws of the State of California, as lessee;
W I T N E S S E T H:
WHEREAS, the Authority intends to assist the City in refinancing the Prior Leases
and defeasing and refunding the Prior Bonds by issuing its Lease Revenue Refunding Bonds,
Series 2018 (the “Series 2018 Bonds”);
WHEREAS, the Authority and the City desire to lease the Leased Property
pursuant to the terms of the Site Lease, dated as of MarchApril 1, 2018, and to lease back the
Leased Property pursuant to the terms of the Facility Lease;
WHEREAS, under the Facility Lease, the City w ill be obligated to make base rental
payments to the Authority for the lease of the Leased Property;
NOW, THEREFORE, in consideration of the mutual covenants herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.Definitions.
Unless the context otherwise requires, the terms defined in this Section shall, for all
purposes of the Facility Lease, have the meanings herein specified, which meanings shall be
equally applicable to both the singular and plural forms of any of the terms herein defined.
Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in
the Trust Agreement.
Additional Payments
The term “Additional Payments” means all amounts payable to the Authority o r the
Trustee or any other person from the City as Additional Payments pursuant to Section 3.02 hereof.
Authority
The term “Authority” means (i) San Luis Obispo Public Financing Authority,
acting as lessor hereunder; (ii) any surviving, resulting or transferee entity; and (iii) except where
the context requires otherwise, any assignee of the Authority.
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Base Rental Payments
The term “Base Rental Payments” means all amounts payable to the Authority
from the City as Base Rental Payments pursuant to Section 3.01 hereof.
Base Rental Payment Schedule
The term “Base Rental Payment Schedule” means the schedule of Base Rental
Payments payable to the Authority from the City pursuant to Section 3.01 hereof and attached
hereto as Exhibit B.
Bonds
The term “Bonds” means the bonds issued by the Authority under and pursuant to
the Trust Agreement.
City
The term “City” means the City of San Luis Obispo, California, a municipal
corporation and charter city duly organized and existing under the Constitution and laws of the
State of California.
Closing Date
The term “Closing Date” means [___________], 2018.
Code
The term “Code” means the Internal Revenue Code of 1986.
Continuing Disclosure Certificate
The term “Continuing Disclosure Certificate” means the Continuing Disclosure
Certificate of the City, dated the date of issuance and delivery o f Bonds, as originally executed and
as it may be amended from time to time in accordance with the terms thereof.
Event of Default
The term “Event of Default” shall have the meaning specified in Section 6.01
hereof.
Facility Lease
The term “Facility Lease” means this Facility Lease, as originally executed and
recorded or as it may from time to time be supplemented, modified or amended pursuant to the
provisions hereof and of the Trust Agreement.
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Insurance Consultant
The term “Insurance Consultant” means a third party who is in fact independent
from the City and the Authority with recognized expertise in the field of commercial or
governmental insurance or self-insurance, as appropriate, and who may be the City’s or the
Authority’s insurance broker or the administrator of any self-insurance program in which the City
or the Authority participates.
Leased Property
The term “Leased Property” means that certain real property and improvements
thereon situated in the City of San Luis Obispo, State of California, described in Exhibit A
attached hereto and made a part hereof, together with any additional real property added thereto by
any supplement or amendment hereto, or any real property substituted for all or any portion of the
Leased Property i n accordance with the Facility Lease and the Trust Agreement;subject, however,
to any conditions, reservations, and easements of record or known to the City.
Outstanding
The term “Outstanding,” when applied to Bonds, shall have the meaning ascribed
to such term in the Trust Agreement.
Permitted Encumbrances
The term “Permitted Encumbrances” means (1) liens for general ad valorem taxes
and assessments, if any, n ot then delinquent, or which the City m ay, pursuant to the Facility Lease,
permit to remain unpaid; (2) easements, rights of way, mineral rights, drilling rights and other
rights, reservations, covenants, conditions or restrictions which exist of record as of the date of
recordation of the Facility Lease in the office of the County Recorder of San Luis Obispo County
and which the City certifies in writing will not materially i mpair the use of the Leased Property; (3)
the Site Lease, as it may be amended from time to time; (4) the Facility Lease, as it may be
amended from time to time; (5) the Trust Agreement, as it may be amended from time to time; (6)
any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected
in the manner prescribed by law; (7) easements, rights of way, mineral rights, drilling rights and
other rights, reservations, covenants, conditions or restrictions to which the Authority and the City
consent in writing and (8) liens relating to special assessments levied with respect to the Leased
Property.
Permitted Investments
The term “Permitted Investments” shall have the meaning ascribed to such term in
the Trust Agreement.
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Prior Bonds
The term “Prior Bonds” means, collectively, the 2005 Bonds, the 2006 Bonds and
the 2009 Bonds.
Prior Leases
The term “Prior Leases means, collectively, the 2005 Lease, the 2006 Lease and the
2009 Lease.
Series 2018 Bonds
The term “Series 2018 Bonds” means the bonds issued on the Closing Date by the
Authority under and pursuant to the Trust Agreement, the proceeds of which are for the
refinancing of the Prior Leases and the defeasance and redemption of the Prior Bonds.
Site Lease
The term “Site Lease” means that lease, entitled “Site Lease,” dated as of
MarchApril 1, 2018,and recorded concurrently herewith,between the City, as lessor, and the
Authority, as lessee, as originally executed and recorded or as it may from time to time be
supplemented, modified or amended pursuant to the provisions thereof and of the Trust
Agreement.
Standard & Poor’s
The term “Standard & Poor’s” means S&P Global Ratings, a corporation duly
organized and existing under and by virtue of the laws of the State of New York, and its successors
and assigns, except that if such corporation shall be dissolved or liquidated or shall no longer
perform the functions of a securities rating agency, then the term Standard & Poor’s Corporation
shall be deemed to refer to any other nationally recognized securities rating agency s elected by t he
City.
State
The term “State” means the State of California.
Supplemental Trust Agreement
The term “Supplemental Trust Agreement” means any supplement or amendment
to the Trust Agreement hereafter duly authorized and entered into between the Authority and the
Trustee in accordance with the provisions of the Trust Agreement.
Tax Certificate
The term “Tax Certificate” shall have the meaning ascribed to such term in the
Trust Agreement.
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Trust Agreement
The term “Trust Agreement” means the trust agreement, entitled “Trust
Agreement,” dated as of MarchApril 1, 2018, between the Authority and the Trustee, pursuant to
which the Trustee will deliver the Series 2018 Bonds, as originally executed or as it may f rom time
to time be supplemented, modified or amended by a Supplemental Trust Agreement entered into
pursuant to the provisions of the Trust Agreement.
Trustee
The term “Trustee” means U.S. Bank National Association, appointed as trustee
pursuant to the Trust Agreement, and any successor appointed under the Trust Agreement.
Written Request of the Authority
The term “Written Request of the Authority” means an instrument in writing signed
by or on behalf of the Authority by its Chair, Vice-Chair, Secretary, Treasurer or Executive
Director or by any other person (whether or not an officer of the Authority) who is specifically
authorized by resolution of the Authority to sign or execute such a document on its behalf.
Written Request of the City
The term “Written Request of the City” means an instrument in writing signed by
the Mayor of the City, the City Manager of the City, the Finance Director of the City, or any such
officer’s duly authorized designee, or by an y other officer or employee of the City duly authorized
by the City for that purpose.
2005 Bonds
The term “2005 Bonds” means the City of San Luis Obispo Capital Improvement
Board 2005 Refunding Lease Revenue Bonds, issued pursuant to an Indenture of Trust, dated as of
May 1, 2005, by and between the Board and the U.S. Bank National Association, as trustee.
2005 Lease
The term “2005 Lease” means the First Amended and Restated Lease Agreement,
dated as of May 1, 2005, by and between the City and the Board.
2006 Bonds
The term “2006 Bonds” means the City of San Luis Obispo Capital Improvement
Board 2006 Lease Revenue Bonds (919 Palm Street Public Parking and City Office Project),
issued pursuant to an Indenture of Trust, dated as of April 1, 2006, by and between the Board and
the U.S. Bank National Association, as trustee.
2006 Lease
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The term “2006 Lease” means the Lease Agreement, dated as of April 1, 2006, by
and between the City and the Board.
2009 Bonds
The term “2009 Bonds” means the City of San Luis Obispo Capital Improvement
Board 2009 Lease Revenue Bonds (Public Safety Communications and Emergency Operations
Center Project) (Bank Qualified), issued pursuant to an Indenture of Trust, dated as of March 1,
2009, by and between the Board and the U.S. Bank National Association, as trustee.
2009 Lease
The term “2009 Lease” means the Lease Agreement, dated as of March 1, 2009, by
and between the City and the Board.
ARTICLE II
LEASE OF LEASED PROPERTY;
TERM; SUBSTITUTION
SECTION 2.01.Lease of Leased Property. The Authority hereby leases to
the City and the City hereby leases from the Authority the Leased Property, subject,however, to
all easements, encumbrances, and restrictions that exist at the time of the commencement of the
term of the Facility Lease. The City hereby agrees and covenants during the term of the Facility
Lease that, except as hereinafter provided, it will use the Leased Property for public and City
purposes so as to afford the public the benefits contemplated by the Facility Lease.
The leasing by the City to the Authority of the Leased Property shall not effect or
result in a merger of the City’s leasehold estate pursuant to the Facility Lease and its fee estate as
lessor under the Site Lease, and the Authority shall continue to have and hold a leasehold estate in
said Leased Property pursuant to the Site Lease throughout the term thereof and the term of the
Facility Lease. As to said Leased Property the Facility Lease shall be deemed and constitute a
sublease.
SECTION 2.02.Term; Occupancy. The term of the Facility Lease shall
commence on the date of recordation of the Facility Lease in the office of the County Recorder of
San Luis Obispo County, State of California, or on the Closing Date, whichever is earlier, and shall
end on June 1, 20[__], unless such term is extended or sooner terminated as hereinafter provided.
If on June 1, 20[__], the Bonds shall not be fully paid, or if the rental payable hereunder shall have
been abated at any time and for any reason, then the term of the Facility Lease shall be extended
until ten (10) days after all Bonds shall be fully p aid, except that the term of the Facility Lease shall
in no event be extended beyond June 1, 20[__]. If prior to June 1, 20[__], all Bonds shall be fully
paid, or provision therefor made, the term of the Facility Lease shall end ten (10) days thereafter or
ten (10) days after written notice by the City to the Authority, whichever is earlier.
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The City a grees that it will take possession of and occupy t he Leased Property a t the
commencement of the term of the Facility Lease and that construction or improvement of the
Leased Property will not interfere with the City’s use and occupancy of the Leased Property.
SECTION 2.03.Substitution and Release of Property.
(a)The City and the Authority may substitute real property as part of the
Leased Property for purposes of the Site Lease and the Facility Lease, but only after the City shall
have filed with the Authority and the Trustee all of the following:
(i)Executed copies of the Site Lease and the Facility Lease or
amendments thereto containing the amended description of the Leased Property, including the
legal description of the Leased Property as modified if necessary.
(ii)A Certificate of the City with copies of the Site Lease and the
Facility Lease, if needed, or amendments thereto containing the amended description of the Leased
Property stating that such documents have been duly recorded in the official records of the County
Recorder of San Luis Obispo County.
(iii)A CLTA leasehold owner’s policy or policies or a commitment for
such policy or policies or an amendment or endorsement to an existing policy or policies resulting
in title insurance with respect to the Leased Property after such substitution in an amount at least
equal to the amount of such insurance provided with respect to the Leased Property prior to such
substitution; each such insurance instrument, when issued, shall name the Trustee as the insured,
and shall insure the leasehold estate of the Authority in such substituted property subject only to
such exceptions as do not substantially interfere with the City’s right to use and occupy such
substituted property and as will not result in an abatement of Base Rental Payments payable by t he
City under the Facility Lease, as evidenced by a Certificate of the City.
(iv)A Certificate of the City stating (i) that the City has beneficial use
and occupancy of the Leased Property, (ii) that the essentiality to the City of the Leased Property
after such substitution is comparable to its essentiality before the substitution, (iii) that the
remaining useful life of the Leased Property is at least as long as the remaining term of the Bonds;
and (iv) that the annual fair rental value of the property that will constitute Leased Property after
such substitution will be at least equal to the maximum annual amount of Base Rental Payments
becoming due for the remaining term of the Facility Lease.
(v)An Opinion of Counsel (as such term is defined in the Trust
Agreement) stating that such amendment or modification (i) is authorized or permitted by laws of
the State and the Facility Lease; (ii) complies with the terms of the Facility Lease; (iii) will, upon
the execution and delivery thereof, be valid and binding upon the Authority and the City in
accordance with its terms; and (iv) will not in and of itself cause the interest on the Bonds to be
included in gross income for federal income tax purposes.
(b)Additionally, with the consent of the Trustee, the City shall have, and is
hereby granted, the option at any time to release any portion of the Leased Property, provided that
the City shall have filed with the Authority and the Trustee all of the following documents:
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(i)Executed copies of the Site Lease and the Facility Lease or
amendments thereto containing the amended description of the Leased Property, including the
legal description of the Leased Property as modified if necessary.
(ii)A Certificate of the City with copies of the Site Lease and the
Facility Lease, if needed, or amendments thereto containing the amended description of the Leased
Property stating that such documents have been duly recorded in the official records of the County
Recorder of San Luis Obispo County.
(iii)A CLTA leasehold owner’s policy or policies or a commitment for
such policy or policies or an amendment or endorsement to an existing policy or policies resulting
in title insurance with respect to the Leased Property after such release in an amount at least equal
to the aggregate principal amount of the Series 2018 Bonds Outstanding as of the date of such
release; each such insurance instrument, when issued, shall name the Trustee as the insured, and
shall insure the leasehold estate of the Authority in the Leased Property, as revised by s uch release,
subject only to such exceptions as do not substantially interfere with the City’s right to use and
occupy such Leased Property, as revised by such release, and as will not result in an abatement of
Base Rental Payments payable by the City under the Facility Lease, as evidenced by a Certificate
of the City.
(iv)A certification of the City evidencing that the annual fair rental
value of the Leased Property after such amendment will be at least equal to one hundred per cent
(100%) of the maximum amount of the Base Rental Payments becoming due in the then current or
in any subsequent year ending on May 31;
(v)A certification of the City stating that (1) such release does not
adversely affect the City’s use and occupancy of the Leased Property and (2) the useful life of the
Leased Property after any such release meets or exceeds the remaining term hereof; and
(vi)An Opinion of Counsel (as such term is defined in the Trust
Agreement) stating that such amendment or modification (i) is authorized or permitted by laws of
the State and the Facility Lease; (ii) complies with the terms of the Facility Lease; (iii) will, upon
the execution and delivery thereof, be valid and binding upon the Authority and the City in
accordance with its terms; and (iv) will not in and of itself cause the interest on the Bonds to be
included in gross income for federal income tax purposes.
(c)The Authority will provide written notification of any substitution or
release to any rating agency then providing a rating on the Bonds at the request of the Authority.
ARTICLE III
BASE RENTAL PAYMENTS; USE OF PROCEEDS
SECTION 3.01.Base Rental Payments. The City agrees to pay to the
Authority, as Base Rental Payments for the use and occupancy of the Leased Property (subject to
the provisions of Sections 3.04, 3.06 and 7.01 of the Facility Lease) semi-annual rental payments,
all in accordance with the Base Rental Payment Schedule attached hereto as Exhibit B and made a
part hereof. Although payable in unequal semi-annual installments as set forth in Exhibit B, Base
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Rental Payments shall be calculated on an annual basis, for the twelve-month period commencing
on June 1 and ending on May 31, except that the first Base Rental Payment period shall commence
on the Closing Date and end on May 31, 2018. Each Base Rental Payment will be payable on the
third (3rd) day preceding its Due Date (as defined in Exhibit B attached hereto). Each annual
amount of Base Rental shall be for the use of the Leased Property during each such Base Rental
Payment period.
If the term of the Facility Lease shall have been extended pursuant to Section 2.02
hereof, Base Rental Payment installments shall continue to be due and payable on the third (3rd)
day preceding June 1 and December 1 in each year, as hereinabove described, continuing to and
including the date of termination of the Facility Lease, in an amount equal to the amount of Base
Rental Payments for the twelve-month period ending May 31, 20[__], and payable fifteen days
prior to June 1, 20[__].
SECTION 3.02.Additional Payments. The City shall also pay such
amounts (herein called the “Additional Payments”) as shall be required by the Authority for the
payment of all costs and expenses incurred by the Authority in connection with the execution,
performance or enforcement of the Facility Lease or any assignment hereof, the Trust Agreement,
the Site Lease, its interest in the Leased Property and the lease of the Leased Property to the City,
including but not limited to payment of all fees, costs and expenses and all administrative costs of
the Authority related to the Leased Property, including, without limiting the generality of the
foregoing, salaries and wages of employees, all expenses, compensation and indemnification of
the Trustee payable by the Authority under the Trust Agreement, fees of auditors, accountants,
attorneys or architects, and all other necessary administrative costs of the Authority or charges
required to be paid by it in order to maintain its existence or to comply with the terms of the Bonds
or of the Trust Agreement or hereof; but not including any Additional Payments amounts required
to pay the principal of and interest on the Bonds.
Such Additional Payments shall be billed to the City b y the Authority or the Trustee
from time to time, together with a statement certifying that the amount billed has been paid by the
Authority or by the Trustee on behalf of the Authority, for one or more of the items above
described, or that such amount is then payable by the Authority or the Trustee for such items.
Amounts so billed shall be paid by the City within thirty (30) days after receipt of the bill by the
City. The City reserves the right to audit billings for Additional Payments although exercise of
such right shall in no way affect the duty of the City to make full and timely payment for all
Additional Payments.
The Authority may in the future issue bonds and enter into leases to finance
facilities other than the Leased Property. The administrative costs of the Authority shall be
allocated among said facilities and the Leased Property, as hereinafter in this paragraph provided.
The fees of the Trustee under the Trust Agreement, and any other expenses directly attributable to
the Leased Property shall be included in the Additional Payments payable hereunder. The fees of
any trustee or paying agent under any indenture securing bonds of the Authority or any trust
agreement other than the Trust Agreement, and any other expenses directly attributable to any
facilities other than the Leased Property, shall not be included in the administrative costs of the
Leased Property and shall not be paid from the Additional Payments payable hereunder. Any
expenses of the Authority not directly attributable to any particular project of the Authority shall
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be equitably allocated among all such projects, including the Leased Property, in accordance with
sound accounting practice. In t he event of any question or dispute as to such allocation, the written
opinion of an independent firm of certified public accountants, employed by the Authority to
consider the question and render an opinion thereon, shall be a final and conclusive determination
as to such allocation. The Trustee may conclusively rely upon the Written Request of the
Authority, in making any determination that costs are payable as Additional Payments hereunder,
and shall not be required to make any investigation as to whether or not the items so requested to
be paid are expenses of operation of the Leased Property.
SECTION 3.03.Fair Rental Value. Such payments of Base Rental
Payments for each rental period during the term of the Facility Lease shall constitute the total
rental for said rental period and shall be paid by the City in each rental payment period for and in
consideration of the right of use and occupancy of, and continued quiet use and enjoyment of, the
Leased Property during each such period for which said rental is to be paid. The parties hereto
have agreed and determined that such total rental payable for each twelve-month period beginning
June 1 represents no more than the fair rental value of the Leased Property for each such period. In
making such determination, consideration has been given to the fair market value of the Leased
Property, other obligations of the parties under the Facility Lease, the uses and purposes which
may be served by the Leased Property, the expected revenues to be generated by the Leased
Property, and the benefits therefrom which will accrue to the City and the general public.
SECTION 3.04.Payment Provisions. Each installment of rental payable
hereunder shall be paid in lawful money o f the United States of America to or upon the order of the
Authority at the corporate trust office of the Trustee, or such other place as the Trustee shall
designate. Any such installment of rental accruing hereunder which shall not be paid when due
and payable under the terms of the Facility Lease shall bear interest at the rate of twelve percent
(12%) per annum, or such lesser rate of interest as may be permitted by law, from the date when
the same is due hereunder until the same shall be paid. Notwithstanding any dispute between the
Authority and the City, the City shall make all rental payments when due without deduction or
offset of any kind and shall not withhold any rental payments pending the final resolution of such
dispute. In the event of a determination that the City was not liable for said rental payments or any
portion thereof, said payments or excess of payments, as the case may be, shall be credited against
subsequent rental payments due hereunder or refunded at the time of such determination.
Amounts required to be deposited by the City with the Trustee pursuant to this Section on any d ate
shall be reduced to the extent of amounts on deposit in the Revenue Fund and available therefor.
Rental is subject to abatement as provided in Section 3.06 hereof.
Nothing contained in the Facility Lease shall prevent the City from making from
time to time contributions or advances to the Authority for any purpose now or hereafter
authorized by law, including the making of repairs to, or the restoration of, the Leased Property in
the event of damage to or the destruction of the Leased Property.
SECTION 3.05.Appropriations Covenant; Base Rental Payments and
Additional Payments to Constitute a Current Expense of the City; No Pledge. The City
covenants to take such action as may be necessary to include all such Base Rental Payments and
Additional Payments due hereunder in its annual budgets, and to make necessary annual
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appropriations for all such Base Rental Payments and Additional Payments. The City will deliver,
by letter substantially in the form of Exhibit C,to the Authority and the Trustee copies of the
portion of each annual City budget relating to the payment of Base Rental Payments and
Additional Payments hereunder no later than May 31 of each year. The covenants on the part of
the City h erein contained shall be deemed to be and shall be construed to be duties imposed by l aw
and it shall be the duty of each and every public official of the City t o 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
City to carry out and perform the covenants and agreements in the Facility Lease agreed to be
carried out and performed by the City.
The Authority and the City understand and intend that the obligation of the City to
pay Base Rental Payments and Additional Payments hereunder shall constitute a current expense
of the City and shall not in any way be construed to be a debt of the City in contravention of any
applicable constitutional or statutory limitation or requirement concerning the creation of
indebtedness by the City, nor shall anything contained herein constitute a pledge of the general tax
revenues, funds or moneys of the City. Base Rental Payments and Additional Payments due
hereunder shall be payable only from current funds which are budgeted and appropriated or
otherwise legally available for the purpose of paying Base Rental Payments and Additional
Payments or other payments due hereunder as consideration for use of the Leased Property. The
Facility Lease shall not create an immediate indebtedness for any aggregate payments which may
become due hereunder in the event that the term of the Lease is continued. The City has not
pledged the full faith and credit of the City, the State of California or any agency or department
thereof to the payment of the Base Rental Payments and Additional Payments or any other
payments due hereunder.
SECTION 3.06.Rental Abatement. The Base Rental Payments shall be
abated proportionately, during any period in which by reason of any damage or destruction (other
than by condemnation which is hereinafter provided for) there is substantial interference with the
use and occupancy o f the Leased Property b y the City, in the proportion in which the initial cost of
that portion of the Leased Property rendered unusable bears to the initial cost of the whole of the
Leased Property. Such abatement shall continue for the period commencing with such damage or
destruction and ending with the substantial completion of the work of repair or reconstruction. In
the event of any such damage or destruction, the Facility Lease shall continue in full force and
effect and the City w aives any right to terminate the Facility Lease by v irtue of any s uch damage or
destruction.
SECTION 3.07.Use of Proceeds. The parties hereto agree that the proceeds
of the Bonds will be used to refinance the Prior Loans and defease and redeem the Prior Bonds.
ARTICLE IV
MAINTENANCE; ALTERATIONS AND ADDITIONS
SECTION 4.01.[Reserved].
SECTION 4.02.Maintenance and Utilities. During such time as the City is
in possession of the Leased Property, all maintenance and repair, both ordinary and extraordinary,
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of the Leased Property shall be the responsibility of the City, which shall at all times maintain or
otherwise arrange for the maintenance of the Leased Property in first class condition, and the City
shall pay for or otherwise arrange for the payment of all utility services supplied to the Leased
Property, which may include, without limitation, janitor service, security, power, gas, telephone,
light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or
otherwise arrange for payment of the cost of the repair and replacement of the Leased Property
resulting from ordinary wear and tear or want of care on the part of the City or any assignee or
sublessee thereof or any other cause and shall pay for or otherwise arrange for the payment of all
insurance policies required to be maintained with respect to the Leased Property. In exchange for
the rental herein provided, the Authority agrees to provide only the Leased Property.
SECTION 4.03.Changes to the Leased Property. T he City s hall, at its own
expense, have the right to remodel the Leased Property or to make additions, modifications and
improvements to the Leased Property. All such additions, modifications and improvements shall
thereafter comprise part of the Leased Property and be subject to the provisions of the Facility
Lease. Such additions, modifications and improvements shall not in any way damage the Leased
Property or cause it to be used for purposes other than those authorized under the provisions of
state and federal law; and the Leased Property, upon completion of any additions, modifications
and improvements made pursuant to this Section, shall be of a value which is at least equal to the
value of the Leased Property i mmediately prior to the making of such additions, modifications and
improvements.
SECTION 4.04.Installation of City’s Equipment. The City and any
sublessee 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 the
Leased Property. All such items shall remain the sole property of such party, in which neither the
Authority n or the Trustee shall have any interest, and may b e modified or removed by s uch party a t
any time provided that such party shall repair and restore any and all damage to the Leased
Property resulting from the installation, modification or removal of any s uch items. Nothing in the
Facility Lease shall prevent the City from purchasing items to be installed pursuant to this Section
under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security
agreement as security for the unpaid portion of the purchase price thereof, provided that no such
lien or security interest shall attach to any part of the Leased Property.
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ARTICLE V
INSURANCE
SECTION 5.01.Liability and Property Damage Insurance. The City s hall
maintain or cause to be maintained through the Term of the Facility Lease, but only if and to the
extent available from reputable insurers at a reasonable cost in the reasonable opinion of the City,
a standard commercial general liability insurance policy or policies in protection of the Authority,
the City and their respective members, officers, agents, employees and assigns. Said policy or
policies shall provide for indemnification of said parties against direct or contingent loss or
liability for damages for bodily and personal injury, death or property damage occasioned by
reason of the operation of the Leased Property. Such policy or policies shall provide coverage in
such liability limits and be subject to such deductibles as the City deems adequate and prudent.
Such insurance may be maintained as part of or in conjunction with any other insurance coverage
carried by the City, and may be maintained in whole or in part in the form of self-insurance by the
City, subject to the Provisions of Section 5.04, or in the form of the participation by the City in a
joint powers agency or other program providing pooled insurance. The proceeds of such liability
insurance must be applied toward extinguishment or satisfaction of the liability with respect to
which paid.
SECTION 5.02.Casualty Insurance. The City shall procure and maintain,
or cause to be procured and maintained, throughout the Term of the Facility Lease, casualty
insurance against all loss or damage to all buildings situated on the Leased Property, in an amount
at least equal to the lesser of (a) 100% of the replacement value of the insured buildings, or (b)
100% of the aggregate principal amount of the Outstanding Bonds. S uch insurance must, 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, but earthquake
insurance,if any, will be provided at the discretion of the City. Such insurance may be subject to
such deductibles as the City deems adequate and prudent. Such insurance may be maintained as
part of or in conjunction with any other insurance coverage carried by the City, and may be
maintained in whole or in part in the form of the participation by the City in a joint powers agency
or other program providing pooled insurance; provided that such insurance may not be maintained
by the City in the form of self-insurance. The net proceeds of such insurance must paid to the
Trustee and applied as set forth in Section 4.04 of the Trust Agreement.
SECTION 5.03.Rental Interruption Insurance. The City shall procure
and maintain, or cause to be procured and maintained, throughout the Term of the Facility Lease,
rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of any
portion of the Leased Property constituting buildings or other improvements as a result of any of
the hazards covered in the insurance required by Section 5.02, in an amount at least equal to the
maximum such Base Rental Payments coming due and payable during any consecutive two Fiscal
Years. Such insurance may be maintained as part of or in conjunction with any other insurance
coverage carried by the City, and may be maintained in whole or in part in the form of the
participation by the City in a joint powers agency or other program providing pooled insurance;
provided that such insurance may not be maintained by t he City in the form of self-insurance. The
proceeds of such insurance, if any, must be paid to the Trustee and deposited in the Revenue Fund
(as defined in the Trust Agreement), to be applied as a credit toward the payment of the Base
Rental Payments allocable to the insured improvements as the same become due and payable.
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SECTION 5.04.Title Insurance. On or before the date of delivery of the
Series 2018 Bonds, the City s hall, at its expense, (a) cause the Site Lease and this Facility Lease, or
a memorandum hereof or thereof in form and substance approved by Bond Counsel, to be recorded
in the office of the San Luis Obispo County R ecorder, and (b) obtain a CLTA title insurance policy
insuring the City’s leasehold estate hereunder in the Leased Property, subject only to Permitted
Encumbrances, in an amount at least equal to the aggregate principal amount of the Series 2018
Bonds. All proceeds received under any such title insurance policy must be deposited with the
Trustee in the Revenue Fund to be credited toward the prepayment of the remaining Base Rental
Payments under Section 7.02.
SECTION 5.05.Insurance Proceeds; Form of Policies. All policies of
insurance required by S ections 5.02, 5.03 and 5.04 hereof must name the Trustee as a loss payee so
as to provide that all proceeds thereunder are payable to the Trustee. The City s hall pay o r cause to
be paid when due the premiums for all insurance policies required by the Facility Lease. All such
policies shall provide that the Trustee be given 30 days’ notice of each expiration, any intended
cancellation thereof or reduction of the coverage provided thereby. The City must file with the
Trustee annually, within 90 days following the close of each Fiscal Year, a certificate of the City,
substantially in the form of Exhibit D, stating that all policies of insurance required hereunder are
then in full force and effect. The Trustee has no responsibility for the sufficiency, adequacy or
amount of any insurance or self-insurance herein required and is fully protected in accepting
payment on account of such insurance or any adjustment, compromise or settlement of any loss.
If any insurance maintained under Section 5.01 is provided in the form of self-insurance,
the City must file with the Trustee annually, within 90 days following the close of each Fiscal
Year, a statement of the risk manager of the City or an independent insurance adviser engaged by
the City identifying the extent of such self-insurance and stating the determination that the City
maintains sufficient reserves with respect thereto. If any such insurance is provided in the form of
self-insurance by the City, the City has no obligation to make any payment with respect to any
insured event except from those reserves.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01.Defaults and Remedies.
(a)If the City shall fail to pay any rental payable hereunder when the same
becomes due and payable, time being expressly declared to be of the essence of the Facility Lease,
or the City shall fail to keep, observe or perform any other term, covenant or condition contained
herein to be kept or performed by the City for a period of thirty (30) days after notice of the same
has been given to the City by the Authority, or the Trustee or for such additional time as is
reasonably required, in the sole discretion of the Trustee, to correct the same, or upon the
happening of any of the events specified in subsection (b) of this Section (any such case above
being an “Event of Default”), the City shall be deemed to be in default hereunder and it shall be
lawful for the Authority to exercise any and all remedies available pursuant to law or granted
pursuant to the Facility Lease. Upon any such default, the Authority, in addition to all other rights
and remedies it may have at law, shall have the option to do any of the following:
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(1)To terminate the Facility Lease in the manner hereinafter provided on
account of default by the City, notwithstanding any re-entry o r re-letting of the Leased Property as
hereinafter provided for in subparagraph (2) hereof, and to re-enter the Leased Property and
remove all persons in possession thereof and all personal property whatsoever situated upon the
Leased Property and place such personal property in storage in any warehouse or other suitable
place located within the City of San Luis Obispo, California. In the event of such termination, the
City agrees to surrender immediately possession of the Leased Property, without let or hindrance,
and to pay the Authority all damages recoverable at law that the Authority may incur by reason of
default by the City, including, without limitation, any costs, loss or damage whatsoever arising out
of, in connection with, or incident to any such re-entry upon the Leased Property and removal and
storage of such property by the Authority or its duly authorized agents in accordance with the
provisions herein contained. Neither notice to pay rent or to deliver up possession of the Leased
Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in
unlawful detainer, or otherwise, brought by t he Authority f or the purpose of effecting such re-entry
or obtaining possession of the Leased Property nor the appointment of a receiver upon initiative of
the Authority to protect the Authority’s interest under the Facility Lease shall of itself operate to
terminate the Facility Lease, and no termination of the Facility Lease on account of default by the
City shall be or become effective by operation of law or acts of the parties hereto, or otherwise,
unless and until the Authority shall have given written notice to the City of the election on the part
of the Authority to terminate the Facility Lease.
(2)Without terminating the Facility Lease, (i) to collect each installment of
rent as it becomes due and enforce any other terms or provision hereof to be kept or performed by
the City, regardless of whether or not the City has abandoned the Leased Property, or (ii) to
exercise any and all rights of re-entry upon the Leased Property. In the event the Authority does
not elect to terminate the Facility Lease in the manner provided for in subparagraph (1) hereof, the
City shall remain liable and agrees to keep or perform all covenants and conditions herein
contained to be kept or performed by the City and, if the Leased Property is not re-let, to pay the
full amount of the rent to the end of the term of the Facility Lease or, in the event that the Leased
Property i s re-let, to pay a ny d eficiency i n rent that results therefrom; and further agrees to pay s aid
rent and/or rent deficiency punctually at the same time and in the same manner as hereinabove
provided for the payment of rent hereunder (without acceleration), notwithstanding the fact that
the Authority may have received in previous years or may receive thereafter in subsequent years
rental in excess of the rental herein specified, and notwithstanding any entry or re-entry by the
Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of
effecting such entry or re-entry or obtaining possession of the Leased Property. Should the
Authority elect to enter or re-enter as herein provided, the City hereby irrevocably appoints the
Authority as the agent and attorney-in-fact of the City to re-let the Leased Property, or any part
thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and
conditions and for such use and period as the Authority may deem advisable, and to remove all
persons in possession thereof and all personal property whatsoever situated upon the Leased
Property and to place such personal property in storage in any warehouse or other suitable place
located in the City o f San Luis Obispo, California, for the account of and at the expense of the City,
and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or
damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and
re-letting of the Leased Property and removal and storage of such property by the Authority or its
duly authorized agents in accordance with the provisions herein contained. The City agrees that
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the terms of the Facility Lease constitute full and sufficient notice of the right of the Authority to
re-let the Leased Property and to do all other acts to maintain or preserve the Leased Property as
the Authority deems necessary or desirable in the event of such re-entry without effecting a
surrender of the Facility Lease, and further agrees that no acts of the Authority in effecting such
re-letting shall constitute a surrender or termination of the Facility Lease irrespective of the use or
the term for which such re-letting is made or the terms and conditions of such re-letting, or
otherwise, but that, on the contrary, in the event of such default by the City the right to terminate
the Facility Lease shall vest in the Authority to be effected in the sole and exclusive manner
provided for in sub-paragraph (1) hereof. The City further waives the right to any rental obtained
by the Authority in excess of the rental herein specified and hereby conveys and releases such
excess to the Authority as compensation to the Authority for its services in re-letting the Leased
Property or any part thereof.
The City hereby waives any and all claims for damages caused or which may be
caused by the Authority in re-entering and taking possession of the Leased Property as herein
provided and all claims for damages that may result from the destruction of the Leased Property
and all claims for damages to or loss of any property belonging to the City, or any other person,
that may be in or upon the Leased Property.
(b)If (1) the City’s interest in the Facility Lease or any part thereof be assigned
or transferred, either voluntarily o r by o peration of law or otherwise, without the written consent of
the Authority, as hereinafter provided for, or (2) the City or any assignee shall file any petition or
institute any proceeding under any act or acts, state or federal, dealing with or relating to the
subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either
as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the
City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of
the City’s debts or obligations, or offers to the City’s creditors to effect a composition or extension
of time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of
reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any
such petition or any such proceedings of the same or similar kind or character be filed or be
instituted or taken against the City, or if a receiver of the business or of the property o r assets of the
City shall be appointed by any court, except a receiver appointed at the instance or request of the
Authority,or if the City shall make a general or any assignment for the benefit of the City’s
creditors, or if (3) the City shall abandon or vacate the Leased Property, then the City shall be
deemed to be in default hereunder.
(c)The Authority s hall in no event be in default in the performance of any o f its
obligations hereunder or imposed by any statute or rule of law unless and until the Authority shall
have failed to perform such obligations within thirty (30) days or such additional time as is
reasonably required to correct any such default after notice by the City to the Authority properly
specifying wherein the Authority h as failed to perform any s uch obligation. In the event of default
by the Authority, the City shall be entitled to pursue any remedy provided by law.
(d)In addition to the other remedies set forth in this Section, upon the
occurrence of an event of default as described in this Section, the Authority, shall be entitled to
proceed to protect and enforce the rights vested in the Authority by the Facility Lease or by law.
The provisions of the Facility Lease and the duties of the City and of its trustees, officers or
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employees shall be enforceable by the Authority by mandamus or other appropriate suit, action or
proceeding in any court of competent jurisdiction. Without limiting the generality of the
foregoing, the Authority shall have the right to bring the following actions:
(1)Accounting. By action or suit in equity to require the City and its trustees,
officers and employees and its assigns to account as the trustee of an express trust.
(2)Injunction. By action or suit in equity to enjoin any acts or things which
may be unlawful or in violation of the rights of the Authority.
(3)Mandamus. By mandamus or other suit, action or proceeding at law or in
equity t o enforce the Authority’s rights against the City (and its board, officers and employees) and
to compel the City to perform and carry out its duties and obligations under the law and its
covenants and agreements with the City as provided herein.
The exercise of any rights or remedies under this Facility Lease shall not permit
acceleration of Base Rental Payments.
Each and all of the remedies given to the Authority hereunder or by any l aw now or
hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege
hereunder shall not impair the right of the Authority to other or further exercise thereof or the
exercise of any o r all other rights, powers or privileges. The term “re-let” or “re-letting” as used in
this Section shall include, but not be limited to, re-letting by means of the operation by the
Authority of the Leased Property. If any statute or rule of law validly shall limit the remedies
given to the Authority h ereunder, the Authority nevertheless shall be entitled to whatever remedies
are allowable under any statute or rule of law.
In the event the Authority shall prevail in any action brought to enforce any of the
terms and provisions of the Facility Lease, the City agrees to pay a reasonable amount as and for
attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to
the Authority hereunder, whether or not a lawsuit has been filed and whether or not any lawsuit
culminates in a judgment.
SECTION 6.02.Waiver. Failure of the Authority to take advantage of any
default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any
custom or practice which may develop between the parties in the course of administering this
instrument be construed to waive or to lessen the right of the Authority to insist upon performance
by t he City o f any term, covenant or condition hereof, or to exercise any rights given the Authority
on account of such default. A waiver of a particular default shall not be deemed to be a waiver of
the same or any subsequent default. The acceptance of rent hereunder shall not be, or be construed
to be, a waiver of any term, covenant or condition of the Facility Lease.
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
SECTION 7.01.Eminent Domain. If the whole of the Leased Property o r so
much thereof as to render the remainder unusable for the purposes for which it was used by the
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City shall be taken under the power or threat of eminent domain, the term of the Facility Lease
shall cease as of the day that possession shall be so taken. If less than the whole of the Leased
Property shall be taken under the power or threat of eminent domain and the remainder is usable
for the purposes for which it was used by t he City a t the time of such taking, then the Facility Lease
shall continue in full force and effect as to such remainder, and the parties waive the benefits of
any law to the contrary, and in such event there shall be a partial abatement of the rental due
hereunder in an amount equivalent to the amount by which the annual payments of principal of and
interest on the Bonds then Outstanding will be reduced by the application of the award in eminent
domain to the redemption of Outstanding Bonds. So long as any of the Bonds shall be
Outstanding, any award made in eminent domain proceedings for taking the Leased Property or
any portion thereof shall be paid to the Trustee and applied to the prepayment of the Base Rental
Payments as provided in Section 7.02 hereof. Any such award made after all of the Base Rental
Payments and Additional Payments have been fully p aid, or provision therefor made, shall be paid
to the City.
SECTION 7.02.Prepayment.
(a)The City shall prepay on any date from insurance and eminent domain
proceeds, to the extent provided in Sections 5.01 and 7.01 hereof, and from proceeds of title
insurance obtained in connection with the Leased Property (provided, however, that in the event of
partial damage to or destruction of the Leased Property caused by p erils covered by i nsurance, if in
the judgment of the Authority t he insurance proceeds are sufficient to repair, reconstruct or replace
the damaged or destroyed portion of the Leased Property, such proceeds shall be held by the
Trustee and used to repair, reconstruct or replace the damaged or destroyed portion of the Leased
Property, pursuant to the procedure set forth in Section 5.01 for proceeds of insurance), all or any
part (in an integral multiple of $5,000) of Base Rental Payments then unpaid so that the aggregate
annual debt service on the Bonds which shall be payable after such prepayment date shall be as
nearly proportional as practicable to the aggregate annual debt service on the Bonds unpaid prior to
the prepayment date, at a prepayment amount equal to the principal of and interest on the Bonds to
the date of redemption.
(b)The City may prepay, from any source of available funds, all or any portion
of Base Rental Payments by depositing with the Trustee moneys or securities as provided in
Article IX of the Trust Agreement sufficient to make such Base Rental Payments when due;
provided that the City furnishes the Trustee with an opinion of counsel that such deposit will not
cause interest on the Bonds to be includable in gross income for federal income tax purposes. The
City agrees that if following such prepayment the Leased Property is damaged or destroyed or
taken by eminent domain, it is not entitled to, and by such prepayment waives the right of,
abatement of such prepaid Base Rental Payments and shall not be entitled to any reimbursement of
such Base Rental Payments.
(c)Before making any prepayment pursuant to this article, the City shall,
within five (5) days following the event creating such right or obligation to prepay, give written
notice to the Authority and the Trustee describing such event and specifying the date on which the
prepayment will be made, which date shall be not less than sixty (60) days from the date such
notice is given.
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(d)When (1) there shall have been deposited with the Trustee at or prior to the
Due Dates of the Base Rental Payments or date when the City may exercise its option to purchase
the Leased Property or any portion or item thereof, in trust for the benefit of the Holders of the
Bonds and irrevocably appropriated and set aside to the payment of the Base Rental Payments or
option price, sufficient moneys and Permitted Investments satisfying the requirements of Section
9.01(b) of the Trust Agreement, not redeemable prior to maturity, the principal of and interest on
which when due will provide money sufficient to pay all principal of and interest on the Bonds to
the due date of the Bonds or date when the City may exercise its option to purchase the Leased
Property, as the case may be; and (2) an agreement shall have been entered into with the Trustee
for the payment of its fees and expenses so long as any of the Bonds shall remain unpaid; then and
in that event the right, title and interest of the Authority herein and the obligations of the City
hereunder shall thereupon cease, terminate, become void and be completely discharged and
satisfied (except for the right of the Authority and the obligation of the City to have such moneys
and such Permitted Investments applied to the payment of the Base Rental Payments or option
price) and the Authority’s interest in and title to the Leased Property or applicable portion or item
thereof shall be transferred and conveyed to the City. In such event, the Authority shall cause an
accounting for such period or periods as may b e requested by t he City t o be prepared and filed with
the Authority and evidence such discharge and satisfaction, and the Authority shall pay over to the
City as an overpayment of Base Rental Payments all such moneys or Permitted Investments held
by it pursuant hereto other than such moneys and such Permitted Investments as are required for
the payment or prepayment of the Base Rental Payments or the option price and the fees and
expenses of the Trustee, which moneys and Permitted Investments shall continue to be held by the
Trustee in trust for the payment of Base Rental Payments or the option price and the fees and
expenses of the Trustee, and shall be applied by the Authority to the payment of the Base Rental
Payments or the option price and the fees and expenses of the Trustee.
SECTION 7.03.Option to Purchase; Sale of Personal Property. The City
shall have the option to purchase the Authority’s interest in any part of the Leased Property upon
payment of an option price consisting of moneys or securities satisfying the requirements of
Section 9.01(b) of the Trust Agreement (not callable by the issuer thereof prior to maturity) in an
amount sufficient (together with the earnings and interest on such securities) to provide funds to
pay t he aggregate amount for the entire remaining term of the Facility Lease of the part of the total
rent hereunder attributable to such part of the Leased Property (determined by reference to the
proportion which the refinancing of the acquisition, design and construction cost of such part of
the Leased Property bears to the refinancing of the acquisition, design and construction cost of all
of the Leased Property). Any such payment shall be made to the Trustee and shall be treated as
rental payments and shall be applied by the Trustee to pay the principal of and interest on the
Bonds and to redeem Bonds if such Bonds are subject to redemption pursuant to the terms of the
Trust Agreement. Upon the making of such payment to the Trustee, (a) the Base Rental Payments
thereafter payable under the Facility Lease shall be reduced by the amount thereof attributable to
such part of the Leased Property and theretofore paid pursuant to this Section, (b) Section 3.06 and
this Section of the Facility Lease shall not thereafter be applicable to such part of the Leased
Property, (c) the insurance required by Sections 5.01, 5.02 and 5.03 of the Facility Lease need not
be maintained as to such part of the Leased Property, and (d) title to such part of the Leased
Property and of the portion of the Leased Property upon which such part of the Leased Property is
located shall vest in the City and the term of the Facility Lease shall end as to the portion of the
Leased Property upon which such part of the Leased Property is located.
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The City, in its discretion, may request the Authority to sell or exchange any
personal property which may at any time constitute a part of the Leased Property, and to release
said personal property from the Facility Lease, if (a) in the opinion of the City the property so sold
or exchanged is no longer required or useful in connection with the operation of the Leased
Property, (b) the consideration to be received from the property is of a value substantially equal to
the value of the property to be released, and (c) if the value of any such property shall, in the
opinion of the Authority, exceed the amount of $50,000, the Authority shall have been furnished a
certificate of an independent engineer or other qualified independent professional consultant
(satisfactory to the Authority) certifying the value thereof and further certifying that such property
is no longer required or useful in connection with the operation of the Leased Property. In the
event of any such sale, the full amount of the money or consideration received for the personal
property so sold and released shall be paid to the Authority. Any money so paid to the Authority
may, so long as the City is not in default under any of the provisions of the Facility Lease, be used
upon the Written Request of the City t o purchase personal property, which property s hall become a
part of the Leased Property leased hereunder. The Authority may require such opinions,
certificates and other documents as it may deem necessary before permitting any s ale or exchange
of personal property subject to the Facility Lease or before releasing for the purchase of new
personal property money received by it for personal property so sold.
ARTICLE VIII
COVENANTS
SECTION 8.01.Right of Entry. The Authority and its assignees shall have
the right (but not the duty) to enter upon and to examine and inspect the Leased Property during
reasonable business hours (and in emergencies at all times) (a) to inspect the same, (b) for an y
purpose connected with the Authority’s or the City’s rights or obligations under the Facility Lease,
and (c) for all other lawful purposes.
SECTION 8.02.Liens. In t he event the City s hall at any time during the term
of the Facility Lease cause any changes, alterations, additions, improvements or other work to be
done or performed or materials to be supplied, in or upon the Leased Property, the City shall pay,
when due, all sums of money t hat may become due for, or purporting to be for, any l abor, services,
materials, supplies or equipment furnished or alleged to have been furnished to or for the City in,
upon or about the Leased Property and shall keep the Leased Property free of any and all
mechanics’ or materialmen’s liens or other liens against the Leased Property or the Authority’s
interest therein. In the event any such lien attaches to or is filed against the Leased Property or the
Authority’s interest therein, the City shall cause each such lien to be fully discharged and released
at the time the performance of any obligation secured by any such lien matures or becomes due,
except that if the City desires to contest any such lien it may do so in good faith. If any such lien
shall be reduced to final judgment and such judgment or such process as may be issued for the
enforcement thereof is not promptly s tayed, or if so stayed and said stay t hereafter expires, the City
shall forthwith pay and discharge said judgment. The City agrees to and shall, to the maximum
extent permitted by law, indemnify and hold the Authority and the Trustee and their respective
members, directors, agents, successors and assigns, harmless from and against, and defend each of
them against, any claim, demand, loss, damage, liability or expense (including attorney’s fees and
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expenses) as a result of any such lien or claim of lien against the Leased Property or the
Authority’s interest therein.
SECTION 8.03.Quiet Enjoyment. The parties hereto mutually covenant
that the City, by k eeping and performing the covenants and agreements herein contained and if not
in default hereunder, shall at all times during the term of the Facility Lease peaceably and quietly
have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority.
SECTION 8.04.Authority Not Liable. The Authority and its members,
directors, officers, agents, employees and assignees shall not be liable to the City or to any other
party whomsoever for any death, injury or damage that may result to any person or property by or
from any cause whatsoever in, on or about the Leased Property. The City, to the extent permitted
by law, shall indemnify and hold the Authority, the Trustee and its members, directors, officers,
agents, employees and assignees, harmless from, and defend each of them against, any and all
claims, liens and judgments arising from the construction or operation of the Leased Property,
including, without limitation, death of or injury to any person or damage to property whatsoever
occurring in, on or about the Leased Property regardless of responsibility for negligence, but
excepting the active negligence of the person or entity seeking indemnity.
SECTION 8.05.Assignment and Subleasing. Neither the Facility Lease
nor any interest of the City hereunder shall be mortgaged, pledged, assigned, sublet or transferred
by the City by voluntary act or by operation of law or otherwise, except with the prior written
consent of the Authority; provided that the Trustee shall have also received an opinion of
nationally-recognized bond counsel to the effect that such subletting shall not affect the
tax-exempt status of the Bonds. No such mortgage, pledge, assignment, sublease or transfer shall
in any event affect or reduce the obligation of the City to make the Base Rental Payments and
Additional Payments required hereunder.
SECTION 8.06.Title to Leased Property. During the term of the Facility
Lease, the Authority shall hold leasehold title to the Leased Property and any and all additions
which comprise fixtures, repairs, replacements or modifications thereof, except for those fixtures,
repairs, replacements or modifications which are added thereto by the City and which may be
removed without damaging the Leased Property, and except for any items added to the Leased
Property by the City pursuant to Section 4.04 hereof. This provision shall not operate to the
benefit of any insurance company if there is a rental interruption covered by insurance pursuant to
Section 5.03 hereof. During the term of the Facility Lease, the Authority shall have a leasehold
interest in the Leased Property pursuant to the Site Lease.
Upon the termination or expiration of the Facility Lease (other than as provided in
Sections 6.01 and 7.01 of the Facility Lease), title to the Leased Property shall vest in the City
pursuant to the Site Lease. Upon any such termination or expiration, the Authority shall execute
such conveyances, deeds and other documents as may be necessary to effect such vesting of
record.
SECTION 8.07.Tax Covenants. The City and the Authority will not make
any use of the proceeds of the Bonds or any other funds of the City or the Authority which will
cause such obligations to be “arbitrage bonds” subject to federal income taxation by reason of
22
4125-4518-0943.30943.4
Section 148 of the Code. The City and the Authority will not make any use of the proceeds of the
Bonds or any other funds of the City or the Authority which will cause such obligations to be
“federally guaranteed” and subject to inclusion in gross income for federal income tax purposes by
reason of Section 149(b) of the Code. To that end, so long as any rental payments are unpaid, the
City and the Authority, with respect to such proceeds and such other funds, will comply with all
requirements of such Sections 148 and 149(b) and all regulations of the United States Department
of the Treasury issued thereunder to the extent that such requirements are, at the time, applicable
and in effect.
The City further covenants that it will not use or permit the use of the facilities
financed by the Prior Bonds by any person not an “exempt person” within the meaning of Section
141(a) of the Code or by an “exempt person” (including the City) in an “unrelated trade or
business”, in such manner or to such extent as would result in the inclusion of interest on the Bonds
in gross income for federal income tax purposes under Section 103 of the Code.
If at any time the City is of the opinion that for purposes of this Section it is
necessary to restrict or limit the yield on or change in any way the investment of any moneys held
by the Trustee or the City or the Authority under the Facility Lease or the Trust Agreement, the
City shall so instruct the Trustee or the appropriate officials of the City in writing, and the Trustee
or the appropriate officials of the City, as the case may be, shall take such actions as may be
necessary in accordance with such instructions.
In furtherance of the covenants of the City set forth above, the City will comply
with the Tax Certificate and will direct the Trustee in a manner that complies with the Tax
Certificate. The Trustee and the Authority may conclusively rely o n any such written instructions,
and the City hereby agrees to hold harmless the Trustee and the Authority for any loss, claim,
damage, liability or expense incurred by the Authority for any actions taken by the Authority in
accordance with such instructions.
The City and the Authority shall at all times do and perform all acts and things
permitted by law which are necessary or desirable in order to assure that the interest on the Bonds
will be excluded from gross income for federal income tax purposes and shall take no action that
would result in such interest not being excluded from gross income for federal income tax
purposes.
SECTION 8.08.Purpose of Lease. The City covenants that during the term
of the Facility Lease, except as hereinafter provided, (a) it will use, or cause the use of, the Leased
Property for public purposes and for the purposes for which the Leased Property is customarily
used, (b) it will not vacate or abandon the Leased Property or any part thereof, and (c) it will not
make any use of the Leased Property which would jeopardize in any way the insurance coverage
required to be maintained pursuant to Article V hereof.
23
4125-4518-0943.30943.4
SECTION 8.09.Continuing Disclosure. The City hereby covenants and
agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure
Certificate. Notwithstanding any other provision of the Facility Lease, failure of the City to
comply with the Continuing Disclosure Certificate shall not be considered a default; however, the
Trustee at the written request of any Participating Underwriter (as defined in the Continuing
Disclosure Certificate) or the Holders of at least 25% aggregate principal amount in Outstanding
Bonds shall, but only upon payment of its fees and expenses, including counsel fees and expenses
and receipt of indemnification satisfactory t o it, or any Holder or Beneficial Owner may t ake such
actions as may be necessary and appropriate, including seeking specific performance by court
order, to cause the City t o comply with its obligations under this Section 8.09. F or purposes of this
Section, “Beneficial Owner” means any person which has the power, directly or indirectly, to vote
or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding
Bonds through nominees, depositories or other intermediaries).
ARTICLE IX
DISCLAIMER OF WARRANTIES;
VENDOR’S WARRANTIES; USE OF THE LEASED PROPERTY
SECTION 9.01.Disclaimer of Warranties. THE AUTHORITY MAKES
NO AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY, FITNESS
FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY OR
WARRANTY WITH RESPECT THERETO. THE CITY ACKNOWLEDGES THAT THE
AUTHORITY IS NOT A MANUFACTURER OF THE LEASED PROPERTY OR A DEALER
THEREIN, THAT THE CITY LEASES THE LEASED PROPERTY AS-IS, IT BEING
AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE
CITY. In no event shall the Authority and Trustee be liable for any incidental, indirect, special or
consequential damage in connection with or arising out of the Facility Lease or the existence,
furnishing, functioning or the City’s use of any item or products or services provided for in the
Facility Lease.
SECTION 9.02.Vendor’s Warranties. The Authority hereby irrevocably
appoints the City i ts agent and attorney-in-fact during the term of the Facility Lease, so long as the
City shall not be in default hereunder, to assert from time to time whatever claims and rights,
including warranties of the Leased Property, which the Authority may have against the
manufacturers, vendors and contractors of the Leased Property. The City’s sole remedy for the
breach of such warranty, indemnification or representation shall be against the manufacturer or
vendor or contractor of the Leased Property, and not against the Authority, nor shall such matter
have any effect whatsoever on the rights and obligations of the Authority with respect to the
Facility Lease, including the right to receive full and timely payments hereunder. The City
expressly acknowledges that the Authority makes, and has made, no representation or warranties
whatsoever as to the existence or availability of such warranties of the manufacturer, vendor or
contractor.
24
4125-4518-0943.30943.4
SECTION 9.03.Use of the Leased Property. The City will not install, use,
operate or maintain the Leased Property improperly, carelessly, in violation of any applicable law
or in a manner contrary to that contemplated by the Facility Lease. The City shall provide all
permits and licenses, if any, necessary for the installation and operation of the Leased Property. In
addition, the City a grees to comply i n all respects (including, without limitation, with respect to the
use, maintenance and operation of the Leased Property) with all laws of the jurisdictions in which
its operations may e xtend and any legislative, executive, administrative or judicial body e xercising
any power or jurisdiction over the Leased Property; provided, however, that the City may contest
in good faith the validity or application of any such law or rule in any reasonable manner which
does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to the
Leased Property or its interest or rights under the Facility Lease.
ARTICLE X
MISCELLANEOUS
SECTION 10.01.Law Governing. The Facility Lease shall be governed
exclusively by the provisions hereof and by the laws of the State as the same from time to time
exist.
SECTION 10.02.Notices. All notices, statements, demands, consents,
approvals, authorizations, offers, designations, requests, agreements or promises or other
communications hereunder by either party to the other shall be in writing and shall be sufficiently
given and served upon the other party if delivered personally or if mailed by United States
registered mail, return receipt requested, postage prepaid:
If to the City:
City of San Luis Obispo
990 Palm Street
San Luis Obispo, California 93401
Attention: Secretary/City Clerk
If to the Authority:
San Luis Obispo Public Financing Authority
990 Palm Street
San Luis Obispo, California 93401
Attention: Secretary/City Clerk
25
4125-4518-0943.30943.4
If to the Trustee:
U.S. Bank National Association
633 W. Fifth Street, 24th Floor
Los Angeles, CA 90071
Attention: Global Corporate Trust Services
or to such other addresses as the respective parties may from time to time designate by notice in
writing. A copy of any such notice or other document herein referred to shall also be delivered to
the Trustee.
SECTION 10.03.Validity and Severability. If for any reason the Facility
Lease shall be held by a court of competent jurisdiction to be void, voidable, or unenforceable by
the Authority or by t he City, or if for any reason it is held by such a court that any of the covenants
and conditions of the City hereunder, including the covenant to pay rentals hereunder, is
unenforceable for the full term hereof, then and in such event the Facility Lease is and shall be
deemed to be a lease under which the rentals are to be paid by t he City annually i n consideration of
the right of the City to possess, occupy and use the Leased Property, and all of the rental and other
terms, provisions and conditions of the Facility Lease, except to the extent that such terms,
provisions and conditions are contrary to or inconsistent with such holding, shall remain in full
force and effect.
SECTION 10.04.Triple Net Lease. The Facility Lease shall be deemed and
construed to be a “net-net-net lease” and the City h ereby a grees that the rentals provided for herein
shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs
whatsoever.
SECTION 10.05.Taxes. The City shall pay or cause to be paid all taxes and
assessments of any type or nature charged to the Authority or affecting the Leased Property 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 City
shall be obligated to pay only such installments as are required to be paid during the term of the
Facility Lease as and when the same become due.
The City shall also pay directly such amounts, if any, in each year as shall be
required by the Authority for the payment of all license and registration fees and all taxes
(including, without limitation, income, excise, license, franchise, capital stock, recording, sales,
use, value-added, property, occupational, excess profits and stamp taxes), levies, imposts, duties,
charges, withholdings, assessments and governmental charges of any nature whatsoever, together
with any additions to tax, penalties, fines or interest thereon, including, without limitation,
penalties, fines or interest arising out of any d elay o r failure by t he City t o pay a ny o f the foregoing
or failure to file or furnish to the Authority for filing in a timely manner any returns, hereinafter
levied or imposed against the Authority or the Leased Property, the rentals and other payments
required hereunder or any parts thereof or interests of the City or the Authority or the Trustee
therein by any governmental authority.
26
4125-4518-0943.30943.4
The City may, at the City’s expense and in its name, in good faith contest any such
taxes, assessments and other charges and, in the event of any such contest, may permit the taxes,
assessments or other charges so contested to remain unpaid during the period of such contest and
any appeal therefrom unless the Authority shall notify the City that, in the opinion of independent
counsel, by n onpayment of any s uch items, the interest of the Authority i n the Leased Property will
be materially endangered or the Leased Property, or any part thereof, will be subject to loss or
forfeiture, in which event the City shall promptly pay such taxes, assessments or charges or
provide the Authority with full security against any loss which may result from nonpayment, in
form satisfactory to the Authority.
SECTION 10.06.Section Headings. All section headings contained herein
are for convenience of reference only and are not intended to define or limit the scope of any
provision of the Facility Lease.
SECTION 10.07.Amendment or Termination. The Authority and the City
may at any time agree to the amendment or termination of the Facility Lease; provided, however,
that the Authority and the City agree and recognize that the Facility Lease is entered into in
accordance with the terms of the Trust Agreement, and accordingly, that any such amendment or
termination shall only be made or effected in accordance with and subject to the terms of the Trust
Agreement.
SECTION 10.08.Execution. The Facility Lease may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all together shall
constitute but one and the same Lease. It is also agreed that separate counterparts of the Facility
Lease may s eparately be executed by the Authority and the City, all with the same force and effect
as though the same counterpart had been executed by both the Authority and the City.
[Remainder of page intentionally left blank]
Signature Page to Facility Lease
4125-4518-0943.30943.4
IN WITNESS WHEREOF, the Authority and the City have caused the Facility
Lease to be executed by their respective officers thereunto duly authorized, all as of the day and
year first above written.
SAN LUIS OBISPO PUBLIC FINANCING
AUTHORITY, as Lessor
By
Xenia Bradford, Treasurer
CITY OF SAN LUIS OBISPO, as Lessee
By
Derrick J. Johnson, City Manager
4125-4518-0943.30943.4
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy or validity of that document.
State of )
County of )
On before me, , Notary Public (here
insert name and title of the officer), personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
4125-4518-0943.30943.4
ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the
individual who signed the document to which this certificate is attached, and not the
truthfulness, accuracy or validity of that document.
State of )
County of )
On before me, , Notary Public (here
insert name and title of the officer), personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature (Seal)
4125-4518-0943.30943.4
CERTIFICATE OF ACCEPTANCE
In accordance with section 27281 of the California Government Code, this is to certify that
the interest in the real property conveyed from the San Luis Obispo Public Financing Authority, a
joint exercise of powers authority organized and existing pursuant to the laws of the State of
California (the “Authority”), to the City of San Luis Obispo, a municipal corporation duly
organized and validly existing under the Constitution and laws of the State of California (the
“City”), under the Facility Lease between the Authority and the City dated as of MarchApril 1,
2018, is hereby accepted by the undersigned on behalf of the City as authorized by a resolution of
the City Council adopted on February 20,2018, and the City consents to recordation of this
Facility Lease by its duly authorized officer.
Dated: [___________], 2018
CITY OF SAN LUIS OBISPO
By:
Derrick J. Johnson, City Manager
A-1
4125-4518-0943.30943.4
EXHIBIT A
LEASED PROPERTY
The land referred to herein is situated in the State of California, County o f San Luis Obispo, City o f
San Luis Obispo and is described as follows:
Legal Description:
[TO COME]
(End of Legal Description)
B-1
4125-4518-0943.30943.4
EXHIBIT B
BASE RENTAL PAYMENT SCHEDULE
CITY OF SAN LUIS OBISPO
Semiannual
Period Ending*
Semiannual
Base Rental ($)
6/1/2018
12/1/2018
6/1/2019
12/1/2019
6/1/2020
12/1/2020
6/1/2021
12/1/2021
6/1/2022
12/1/2022
6/1/2023
12/1/2023
6/1/2024
12/1/2024
6/1/2025
12/1/2025
6/1/2026
12/1/2026
6/1/2027
12/1/2027
6/1/2028
12/1/2028
6/1/2029
12/1/2029
6/1/2030
12/1/2030
6/1/2031
12/1/2031
6/1/2032
12/1/2032
6/1/2033
12/1/2033
6/1/2034
12/1/2034
6/1/2035
12/1/2035
6/1/2036
12/1/2036
6/1/2037
12/1/2037
6/1/2038
B-2
4125-4518-0943.30943.4
Semiannual
Period Ending*
Semiannual
Base Rental ($)
12/1/2038
6/1/2039
Total
________________
* Each Base Rental Payment is payable on or before the 3rd day preceding the applicable
semiannual period end date set forth above (each, a “Due Date”). See Section 3.01.
C-1
4125-4518-0943.30943.4
EXHIBIT C
LETTER OF THE CITY DELIVERING ANNUAL CITY BUDGET
$[___________]
San Luis Obispo Public Financing Authority
Lease Revenue Refunding Bonds,
Series 2018
San Luis Obispo Public Financing Authority
San Luis Obispo, California
U.S. Bank National Association
Los Angeles, California
Re: City of San Luis Obispo Annual Budget
Ladies and Gentleman:
Pursuant to Section 3.05 of the Facility Lease, dated as of MarchApril 1, 2018, by and
between the City of San Luis Obispo (the “City”) and the San Luis Obispo Public Financing
Authority (the “Facility Lease”), the City hereby delivers a copy of the portion of the annual City
budget relating to the payment of Base Rental Payments and Additional Payments under the
Facility lease.
Capitalized terms not otherwise defined herein shall have the meanings assigned to such
terms in the Facility Lease.
Dated: ________________CITY OF SAN LUIS OBISPO
By: ________________________________
Authorized Officer
D-1
4125-4518-0943.30943.4
EXHIBIT D
CERTIFICATE OF THE CITY REGARDING INSURANCE
$[___________]
San Luis Obispo Public Financing Authority
Lease Revenue Refunding Bonds,
Series 2018
CERTIFICATE OF THE CITY REGARDING INSURANCE
The undersigned hereby states and certifies:
(i)that the undersigned is the _____________ of the City o f San Luis Obispo (the “City”),
and as such, is familiar with the facts herein certified and is authorized to certify the
same;
(ii)that the undersigned has read and is familiar with the provisions of Sections 5.01, 5.02,
5.03 and 5.04 of that certain lease, entitled “Facility Lease,” dated as of MarchApril 1,
2018 (the “Facility Lease”), between the San Luis Obispo Public Financing Authority,
as lessor, and the City, as lessee.
(iii)that the undersigned has also reviewed and is familiar with the policies of insurance or
certificates evidencing such insurance obtained by the City, as lessee, as required by
Sections 5.02, 5.03 and 5.04 of the Facility Lease.
(iv)that, in the undersigned’s opinion, the insurance policies satisfy the requirements of
Sections 5.01, 5.02, 5.03 and 5.04 of the Facility Lease, and insurance in the amounts
and covering the risks as required by Sections 5.01, 5.02, 5.03 and 5.04 of the Facility
Lease is now in effect.
Capitalized terms not otherwise defined herein shall have the meanings assigned to such
terms in the Facility Lease.
Dated: ________________CITY OF SAN LUIS OBISPO
By: ________________________________
Authorized Officer
TABLE OF CONTENTS
Page
-i-
4125-4518-0943.30943.5
ARTICLE I
DEFINITIONS
SECTION 1.01.Definitions.....................................................................................1
ARTICLE II
LEASE OF LEASED PROPERTY;
TERM; SUBSTITUTION
SECTION 2.01.Lease of Leased Property .............................................................6
SECTION 2.02.Term; Occupancy .........................................................................6
SECTION 2.03.Substitution ...................................................................................7
ARTICLE III
BASE RENTAL PAYMENTS; USE OF PROCEEDS
SECTION 3.01.Base Rental Payments ..................................................................8
SECTION 3.02.Additional Payments ....................................................................8
SECTION 3.03.Fair Rental Value .........................................................................9
SECTION 3.04.Payment Provisions ......................................................................9
SECTION 3.05.Appropriations Covenant; Base Rental Payments and
Additional Payments to Constitute a Current Expense of the
City; No Pledge ...........................................................................10
SECTION 3.06.Rental Abatement .......................................................................10
SECTION 3.07.Use of Proceeds ...........................................................................11
ARTICLE IV
MAINTENANCE; ALTERATIONS AND ADDITIONS
SECTION 4.01.[Reserved]....................................................................................11
SECTION 4.02.Maintenance and Utilities ..........................................................11
SECTION 4.03.Changes to the Leased Property................................................11
SECTION 4.04.Installation of City’s Equipment ...............................................11
ARTICLE V
INSURANCE
SECTION 5.01.Liability and Property Damage Insurance...............................12
TABLE OF CONTENTS
(continued)
Page
-ii-
4125-4518-0943.30943.5
SECTION 5.02.Casualty Insurance .....................................................................12
SECTION 5.03.Rental Interruption Insurance ..................................................12
SECTION 5.04.Title Insurance ............................................................................13
SECTION 5.05.Insurance Proceeds; Form of Policies .......................................13
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01.Defaults and Remedies ...............................................................13
SECTION 6.02.Waiver .........................................................................................16
ARTICLE VII
EMINENT DOMAIN; PREPAYMENT
SECTION 7.01.Eminent Domain .........................................................................17
SECTION 7.02.Prepayment .................................................................................17
SECTION 7.03.Option to Purchase; Sale of Personal Property .......................18
ARTICLE VIII
COVENANTS
SECTION 8.01.Right of Entry .............................................................................19
SECTION 8.02.Liens .............................................................................................19
SECTION 8.03.Quiet Enjoyment .........................................................................20
SECTION 8.04.Authority Not Liable ..................................................................20
SECTION 8.05.Assignment and Subleasing .......................................................20
SECTION 8.06.Title to Leased Property.............................................................20
SECTION 8.07.Tax Covenants ............................................................................21
SECTION 8.08.Purpose of Lease .........................................................................22
SECTION 8.09.Continuing Disclosure ................................................................22
ARTICLE IX
DISCLAIMER OF WARRANTIES;
VENDOR’S WARRANTIES;USE OF THE LEASED PROPERTY
SECTION 9.01.Disclaimer of Warranties ...........................................................22
SECTION 9.02.Vendor’s Warranties ..................................................................22
TABLE OF CONTENTS
(continued)
Page
-iii-
4125-4518-0943.30943.5
SECTION 9.03.Use of the Leased Property ........................................................23
ARTICLE X
MISCELLANEOUS
SECTION 10.01.Law Governing ...........................................................................23
SECTION 10.02.Notices ..........................................................................................23
SECTION 10.03.Validity and Severability ...........................................................24
SECTION 10.04.Triple Net Lease ..........................................................................24
SECTION 10.05.Taxes ............................................................................................24
SECTION 10.06.Section Headings .........................................................................25
SECTION 10.07.Amendment or Termination ......................................................25
SECTION 10.08.Execution .....................................................................................25
EXHIBIT A
LEASED PROPERTY
EXHIBIT B
BASE RENTAL PAYMENT SCHEDULE
EXHIBIT C
LETTER OF THE CITY DELIVERING ANNUAL CITY BUDGET
EXHIBIT D
CERTIFICATE OF THE CITY REGARDING INSURANCE
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