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HomeMy WebLinkAboutLease Agreement- City of Brea ' CORDING REQUESTED �/ L BY STEWART TITLE 13128-01 JHHW:BDQ:kla Recorded in the County Of Orange, California Gary L. Granville, Clerk/Recorder AFTER RECORDATION PLEASE RETURN TO: IIIIIINil IIIIIIIIIII II IIIIIIIIIIIIIIIII IIIIIIII No Fee Jones Hall Hill &White, 19960386988 08:00AM 07/30/96 A Professional Law Corporation 005 285333 12 50 STE Four Embarcadero Center, 19th Floor L03 36 7.00 105.00 0.00 0.00 0.00 0.00 San Francisco,CA 94111 Attention: Brian D. Quint, Esq. THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX I� PURSUANT TO SECTION 11922 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 6103 OF THE CALIFORNIA GOVERNMENT CODE. 9(3} 5 5 111 LEASE AGREEMENT f C Dated as of July 1,1996 by and between the COUNTYWIDE PUBLIC FINANCING AUTHORITY, as Lessor and the CITY OF BREA, as Lessee Relating to $27,725,000 Countywide Public Financing Authority 1996 Revenue Bonds TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions 2 Section 1.2. Exhibits 3 ARTICLE II REPRESENTATIONS,COVENANTS AND WARRANTIES Section 2.1. Representations,Covenants and Warranties of the City 4 Section 2.2. Representations, Covenants and Warranties of Authority 5 ARTICLE III ISSUANCE OF THE BONDS Section 3.1. The Bonds 7 Section 3.2. Application of Advance Rental Payment 7 ARTICLE IV LEASE OF LEASED PREMISES;TERM OF THIS LEASE AGREEMENT;LEASE PAYMENTS Section 4.1. Lease of Leased Premises 8 Section 4.2. Term of Lease 8 Section 4.3. Lease Payments 8 Section 4.4. No Optional Prepayment 9 Section 4.5. Quiet Enjoyment 9 Section 4.6. Title 9 Section 4.7. Additional Payments 10 ARTICLE V MAINTENANCE,TAXES,INSURANCE AND OTHER MATTERS Section 5.1. Maintenance,Utilities,Taxes and Assessments 11 Section 5.2. Modification of Leased Premises 11 Section 5.3. Public Liability and Property Damage Insurance 12 Section 5.4. Fire and Extended Coverage Insurance 12 Section 5.5. Rental Interruption Insurance 12 Section 5.6. Recordation Hereof; Title Insurance 13 Section 5.7. Net Proceeds of Insurance;Form of Policies 13 Section 5.8. Installation of Personal Property 13 Section 5.9. Liens 13 Section 5.10. Tax Covenants 14 Section 5.11. Continuing Disclosure 14 ARTICLE VI DAMAGE,DESTRUCTION AND EMINENT DOMAIN;ABATEMENT OF LEASE PAYMENTS Section 6.1. Application of Net Proceeds 15 Section 6.2. Abatement of Lease Payments 15 _i_ ARTICLE VII DISCLAIMER OF WARRANTIES;ACCESS Section 7.1, Disclaimer of Warranties 16 Section 7.2. Rights of Access 16 Section 7.3. Release and Indemnification Covenants 16 ARTICLE VIII ASSIGNMENT,LEASING AND AMENDMENT Section 8.1. Assignment by the Authority 17 Section 8.2. Assignment and Subleasing by the City 17 Section 8.3. Amendment of Lease 17 ARTICLE IX EVENTS OF DEFAULT;REMEDIES Section 9.1. Events of Default Defined 20 Section 9.2. Remedies on Default 20 Section 9.3. Limitation on Remedies 21 Section 9.4. No Remedy Exclusive 21 Section 9.5. Agreement to Pay Attorneys' Fees and Expenses 21 Section 9.6. No Additional Waiver Implied by One Waiver 22 Section 9.7. Trustee and Bond Owners to Exercise Rights 22 ARTICLE X MISCELLANEOUS Section 10.1. Notices 23 Section 10.2. Notices to be Given to the Municipal Bond Insurer 23 Section 10.3. Binding Effect 23 Section 10.4. Severability 23 Section 10.5. Net-net-net Lease 24 Section 10.6. Further Assurances and Corrective Instruments 24 Section 10.7. Execution in Counterparts 24 Section 10.8. Applicable Law 24 Section 10.9. Authorized Representatives 24 Section 10.10. Captions 24 EXHIBIT A: Description of the Site. EXHIBIT B: Description of the Facility. EXHIBIT C: Schedule of Lease Payments. • -ii- LEASE AGREEMENT This LEASE AGREEMENT (this "Lease Agreement"), dated as of July 1, 1996, is by and between the COUNTYWIDE PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under and by virtue of the laws of the State of California, as lessor (the "Authority"), and the CITY OF BREA, a municipal corporation and general law city organized and existing under the laws of the State of California, as lessee (the. 'City"); WITNESSETH : WHEREAS, the City is proceeding to finance its share of a countywide 800 MHz communications system and to finance capital improvements throughout the geographic boundaries of the City and, for the purpose of providing moneys for such purposes, the City has leased certain real property, more particularly described in Exhibit A attached hereto and incorporated herein as if set forth in full in this place (the "Site"), and improvements, more particularly described in Exhibit B attached hereto and incorporated herein as if set forth in full in this place (the "Facility")(collectively, the "Leased Premises"), to the Authority pursuant to a Site and Facility Lease, dated as of the date hereof and recorded concurrently herewith (the "Site and Facility Lease"), for an advance rental payment in an amount not exceeding the current appraised value of the Leased Premises (the "Advance Rental Payment"), to be paid to the City upon the execution and delivery of the Site and Facility Lease; and WHEREAS,in order to raise the amount required to make the Advance Rental Payment, the Authority has proposed to issue its Countywide Public Financing Authority 1996 Revenue Bonds in the aggregate principal amount of$27,725,000 (the "Bonds"); and WHEREAS, in order to provide a portion of the revenues necessary to enable the Authority to pay debt service on the Bonds as it becomes due, the Authority has proposed to lease the Leased Premises back to the City upon the terms and conditions set forth herein; and WHEREAS,the Authority and the City have duly authorized the execution and delivery of this Lease Agreement; NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein,the capitalized terms in this Lease Agreement shall have the respective meanings specified in Section 1.01 of the Indenture (hereinafter defined). In addition, the following terms heretofore defined in this Lease Agreement and the following terms defined in this Section 1.1 shall,for all purposes of this Lease Agreement,have the respective meanings herein specified. "Additional Payments" means the amounts payable by the City pursuant to Section 4.7. "City Continuing Disclosure Certificate" shall mean that certain Continuing Disclosure Certificate executed by the City and dated the Closing Date, as originally executed and as it may be amended from time to lime in accordance with the terms thereof. "City's Pro Rata Portion" means the product of the total cost multiplied by a fraction, the numerator of which is the aggregate principal amount of the Bonds issued for the benefit of the City, and the denominator of which shall be the aggregate principal amount of the Bonds issued. "Event of Default" means any of the events of default defined as such in Section 9.1. "Facility"means those certain improvements more particularly described in Exhibit B to the Site and Facility Lease and in Exhibit B to this Lease Agreement. "Fiscal Year"means the twelve-month period beginning on July 1 of any year and ending on June 30 of the next succeeding year, or any other twelve-month period established by the City as its fiscal year pursuant to written notice filed with the Authority and the Trustee. "Indenture" means the Indenture of Trust dated as of July 1, 1996, by and between the Authority and the Trustee, authorizing the issuance of the Bonds, together with any duly authorized and executed amendments thereto. "Lease Payment Date" means, with respect to any Interest Payment Date, the fifteenth (15th) calendar day of the month preceding such Interest Payment Date. "Lease Payments" means the amounts payable by the City pursuant to Section 4.3(a), including any prepayment thereof pursuant hereto and including any amounts payable upon a delinquency in the payment thereof. "Leased Premises"means,collectively,the Site and the Facility. "Net Proceeds" means amounts derived from any policy of casualty insurance or title insurance with respect to the Leased Premises, or the proceeds of any taking of the Leased Premises or any portion thereof in eminent domain proceedings (including sale under threat of such proceedings), to the extent remaining after payment therefrom of all expenses incurred in the collection and administration thereof. "Participating Underwriter" shall have the meaning ascribed thereto in the City Continuing Disclosure Certificate. -2- "Permitted Encumbrances" means, as of any time: (a) liens for general ad valorem taxes and assessments, if any,not then delinquent, or which the City may permit to remain unpaid pursuant to Article V; (b) the Site and Facility Lease, this Lease Agreement, the Indenture and any other agreement or document contemplated hereunder to be recorded against the Leased Premises; (c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (d) encumbrances shown on the CLTA title insurance policy issued with respect to the Leased Premises on the Closing Date which the City hereby certifies will not materially impair the use of the Leased Premises for their intended purposes; and (e) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which the City certifies in writing will not materially impair the use of the Leased Premises for their intended purposes. "Site" means that certain real property more particularly described in Exhibit A to the Site and Facility Lease and in Exhibit A to the Lease Agreement. "Site and Facility Lease" means the Site and Facility Lease dated as of July 1, 1996, by and between the City as lessor of the Leased Premises, and the Authority as lessee, together with all amendments thereto. "State" means the State of California. "Term of this Lease Agreement" means the time during which this Lease Agreement is in effect, as provided in Section 4.2. "Trustee" means U.S. Trust Company of California, N.A., or any successor thereto acting as Trustee pursuant to the Indenture. Section 1.2. Exhibits. The following exhibits are attached to, and by this reference made a part of, this Lease Agreement: Exhibit A: Description of the Site. Exhibit B: Description of the Facility. Exhibit C: Schedule of Lease Payments. -3- ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1. Representations, Covenants and Warranties of the City. The City makes the following covenants, representations and warranties to the Authority as of the date of the execution and delivery of this Lease Agreement: (a) Due Organization and Existence. The City is a municipal corporation and general law city duly organized and validly existing under the laws of the State, has full legal right, power and authority under the laws of the State to enter into this Lease Agreement and the Site and Facility Lease and to carry out and consummate all transactions contemplated hereby and thereby, and by proper action the City has duly authorized the execution and delivery of this Lease Agreement and the Site and Facility Lease. (b) Due Execution. The representatives of the City executing this Lease Agreement and the Site and Facility Lease have been fully authorized to execute the same pursuant to a resolution duly adopted by the City Council of the City. (c) Valid, Binding and Enforceable Obligations. This Lease Agreement and the Site and Facility Lease have been duly authorized,executed and delivered by the City and constitute the legal,valid and binding obligations of the City enforceable against the City in accordance with their respective terms. (d) No Conflicts. The execution and delivery of this Lease Agreement and the Site and Facility Lease, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof and thereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both)under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation,breach,default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Lease Agreement and the Site and Facility Lease, or the financial condition,assets, properties or operations of the City. (e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Lease Agreement and the Site and Facility Lease, or the consummation of any transaction herein or therein contemplated, except as have been obtained or made and as are in full force and effect. (f)No Litigation. There is no action,suit,proceeding,inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the City after reasonable investigation,threatened against or affecting the City or the assets,properties or operations of the City which, if determined adversely to the City or its interests,would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Lease Agreement and the Site and Facility Lease, or upon the financial condition, assets, properties or operations of the City, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of -4- any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Lease Agreement and the Site and Facility Lease, or the financial conditions, assets,properties or operations of the City. (g) Status of Leased Premises. The Leased Premises are fully functional,operational,and in sound condition. Section 2.2. Representations, Covenants and Warranties of Authority. The Authority makes the following covenants,representations and warranties as the basis for its undertakings herein contained: (a) Due Organization and Existence. The Authority is a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State; has power to enter into this Lease Agreement, the Site and Facility Lease and the Indenture; is possessed of full power to own and hold,improve and equip real and personal property, and to lease and lease back the same; and has duly authorized the execution and delivery of each of the aforesaid agreements and such agreements constitute the legal, valid and binding obligations of the Authority,enforceable against the Authority in accordance with their respective terms. (b) Due Execution. The representatives of the Authority executing this Lease Agreement, the Site and Facility Lease and the Indenture are fully authorized to execute the same pursuant to official action taken by the governing body of the Authority. (c) Valid, Binding and Enforceable Obligations. This Lease Agreement, the Site and Facility Lease and the Indenture have been duly authorized, executed and delivered by the Authority and constitute the legal, valid and binding agreements of the Authority with the Authority, enforceable against the Authority in accordance their respective terms. (d) No Conflicts. The execution and delivery of this Lease Agreement, the Site and Facility Lease and the Indenture, the consummation of the transactions herein and therein contemplated and the fulfillment of or compliance with the terms and conditions hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the Authority is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the Authority, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Lease Agreement, the Site and Facility Lease and the - Indenture or the financial condition,assets,properties or operations of the Authority. (e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the Authority,and no consent,permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Lease Agreement, the Site and Facility.Lease and the Indenture, or the consummation of any transaction herein or therein contemplated, except as have been obtained or made and as are in full force and effect. (f)No Litigation. There is no action,suit,proceeding,inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or, to the knowledge of the Authority after reasonable investigation, threatened against or affecting the Authority or the assets, properties or operations of the Authority which, if determined -5- adversely to the Authority or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Lease Agreement, the Site and Facility Lease or the Indenture, or upon the financial condition, assets, properties or operations of the Authority, and the Authority is not in default with respect to any order or decree of any court or any order,regulation or demand of any federal,state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Lease Agreement, the Site and Facility Lease or the Indenture or the financial conditions, assets, properties or operations of the Authority. 6- ARTICLE III ISSUANCE OF THE BONDS Section 3.1. The Bonds. The Authority has authorized the issuance of the Bonds pursuant to the Indenture in the aggregate principal amount of twenty-seven million seven hundred twenty-five thousand dollars ($27,725,000). The Authority agrees that the proceeds of sale of the Bonds shall be paid to the Trustee on the Closing Date for deposit pursuant to the terms and conditions of the Indenture. The City hereby approves the Indenture, the assignment to the Trustee of the rights of the Authority assigned or purported to be assigned thereunder, and the issuance of the Bonds by the Authority thereunder. Section 3.2. Application of Advance Rental Payment. On the Closing Date, the Authority shall direct the Trustee to deposit into the Project Fund the amount of $24,062,048.99 ($1,000,000.00 of which is allocable to the City) from the proceeds of the Bonds in accordance with section 3.02 of the Indenture and Section 4 of the Site and Facility Lease. Amounts on deposit in the Project Fund allocable to the City shall be expended by the City upon written requisitions submitted to the Trustee for such purpose in accordance with Section 3.04 of the Indenture. -7- ARTICLE IV LEASE OF LEASED PREMISES; TERM OF THIS LEASE AGREEMENT; LEASE PAYMENTS Section 4.1. Lease of Leased Premises. The Authority hereby leases the Leased Premises to the City, and the City hereby leases the Leased Premises from the Authority,upon the terms and conditions set forth in this Lease Agreement. Section 4.2. Term of Lease. This Lease Agreement shall take effect on the date hereof, and shall end on the earlier of August 1, 2006, or such earlier date on which the Bonds shall no longer be Outstanding under the Indenture. If, on August 1, 2006, the Indenture shall not be discharged by its terms or if the Lease Payments payable hereunder shall have been abated at any time and for any reason, then the Term of this Lease Agreement shall be extended until there has been deposited with the Trustee an amount sufficient to pay all obligations due under the Lease Agreement, but in no event shall the Term of this Lease Agreement extend beyond August 1, 2016. Notwithstanding the foregoing, the Term of the Lease Agreement shall not end so long as any amounts are owed to the Municipal Bond Insurer with respect to the Municipal Bond Insurance Policy. Section 4.3. Lease Payments. (a) Obligation to Pay. In consideration of the lease of the Leased Premises from the Authority hereunder and subject to the provisions of Section 6.2, the City agrees to pay to the Authority, its successors and assigns, as rental for the use and occupancy of the Leased Premises during each Fiscal Year, the Lease Payments (denominated into components of principal and interest) for the Leased Premises in the respective amounts specified in Exhibit C hereto, to be due and payable on the respective Lease Payment Dates specified in Exhibit C hereto. Any amount held in the Bond Fund, the Interest Account or the Principal Account allocable to the City on any Lease Payment Date shall be credited towards the Lease Payment then due and payable. The Lease Payments coming due and payable in any Fiscal Year shall be for the use of the Leased Premises for such Fiscal Year. (b) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4.3, the payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment at the highest rate of interest borne by any Outstanding Bond. Such interest,if received, shall be deposited in the Bond Fund. (c) Fair Rental Value. The Lease Payments and Additional Payments coming due and payable in each Fiscal Year shall constitute the total rental for the Leased Premises for each Fiscal Year and shall be paid by the City in each Fiscal Year for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of, the Leased Premises during each Fiscal Year. The Authority and the City hereby agree and determine that the total Lease Payments do not exceed the fair rental value of the Leased Premises. In making such determination, consideration has been given to the obligations of the parties under this Lease Agreement, the value of the Leased Premises,the uses and purposes which may be served by the Leased Premises and the benefits therefrom which will accrue to the City and the general public. -8- (d) Source of Payments; Budget and Appropriation. The Lease Payments shall be payable from any source of available funds of the City, subject to the provisions of Section 6.2. The City covenants to take such action as may be necessary to include all Lease Payments due hereunder in each of its budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for all such Lease Payments, The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be ministerial duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such official to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City. During the term of this Lease Agreement, the City shall furnish to the Authority and the Trustee, no later than ten days following the adoption of a budget for the current Fiscal Year, a certificate stating that the Lease Payments due in that Fiscal Year have been included in the budget approved by the City Council for such Fiscal Year. (e) Assignment. The City understands and agrees that all Lease Payments have previously been assigned by the Authority to the Trustee in trust, pursuant to Section 5.01 of the Indenture, for the benefit of the Owners of the Bonds, and the City hereby assents to such assignment. The Authority hereby directs the City, and the City hereby agrees, to pay all of the Lease Payments to the Trustee at its Office. (f) Security Deposit. Notwithstanding any other provision of this Lease Agreement, the City may on any date secure the payment of the Lease Payments for the Leased Premises in whole or in part by depositing with the Trustee an amount of cash which, together with other available amounts, including but not limited to amounts on deposit in the Bond Fund and the Reserve Fund, is either (i) sufficient to pay such Lease Payments, including the principal and interest and premium, if any, components thereof, in accordance with the Lease Payment schedule set forth in Exhibit C, or (ii) invested in whole or in part in Defeasance Obligations in such amount as will, in the opinion of an Independent Accountant, together with interest to accrue thereon and together with any cash which is so deposited,be fully sufficient to pay such Lease Payments when due hereunder,as the City shall instruct at the time of said deposit. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease Agreement. Section 4.4. No Optional Prepayment. The City shall have no option to prepay the principal components of the Lease Payments. Section 4.5. Ouiet Enjoyment. During the Term of this Lease Agreement, the Authority shall provide the City with quiet use and enjoyment of the Leased Premises, and the City shall, during such Term,peaceably and quietly have and hold and enjoy the Leased Premises without suit, trouble or hindrance from the Authority, except as expressly set forth in this Lease Agreement. The Authority will,at the request of the City and at the City's cost,join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Authority may lawfully do so.Notwithstanding the foregoing,the Authority shall have the right to inspect the Leased Premises as provided in Section 7.2. Section 4.6. Title. If the City pays all of the Lease Payments and Additional Payments during the Term of this Lease Agreement as the same become due and payable, or if the City posts a security deposit for payment of the Lease Payments pursuant to Section 4.3(g), and if the City has paid in full all of the Additional Payments coming due and payable as of the such date,and provided in any event that no Event of Default shall have occurred and be continuing, all right,title and interest of the Authority in and to the Leased Premises shall be transferred to and vested in the City. The Authority agrees to take any and all steps and execute and record -9- any and all documents reasonably required by the City to consummate any such transfer of title. Section 4.7.Additional Payments In addition to the Lease Payments,the City shall pay. when due the following Additional Payments: (a) The City's Pro Rata Portion of any fees and expenses incurred by the Authority in connection with or by reason of its leasehold estate in the Leased Premises as and when the same become due and payable; (b) The City's Pro Rata Portion of any amounts due to the Trustee pursuant to Section 8.06 of the Indenture for all services rendered under the Indenture and for all reasonable expenses,charges,costs,liabilities,legal fees and other disbursements incurred in and about the performance of its powers and duties under the Indenture; (c) The City's Pro Rata Portion of any costs and expenses of the Municipal Bond Insurer; (d) The City's Pro Rata Portion of any reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Authority or the Trustee to prepare audits, financial statements, reports, opinions or provide such other services required under this Lease Agreement or the Indenture;and (e) The City's Pro Rata Portion of any reasonable out-of-pocket expenses of the Authority in connection with the execution and delivery of this Lease Agreement or the Indenture, or in connection with the issuance of the Bonds, including any and all expenses incurred in connection with the authorization, issuance, sale and delivery of the Bonds, or incurred by the Authority in connection with any litigation which may at any time be instituted involving this Lease Agreement, the Site and Facility Lease, the Bonds, the Indenture or any of the other documents contemplated hereby or thereby,or incurred by the Authority in connection with the continuing disclosure certificate required to be prepared by the Authority pursuant to Section 6.09 of the Indenture,or otherwise incurred in connection with the administration hereof or thereof. -10- ARTICLE V MAINTENANCE, TAXES, INSURANCE AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease Agreement, as part of the consideration for the rental of the Leased Premises, all improvement,repair and maintenance of the Leased Premises shall be the responsibility of the City and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Leased Premises which may include,without limitation,janitor service,security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Leased Premises resulting from ordinary wear and tear or want of care on the part of the City or any assignee or lessee thereof. In exchange for the Lease Payments herein provided, the Authority agrees to provide only the Leased Premises, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1932 of the California Civil Code,but such waiver shall not limit any of the rights of the City under the terms of this Lease Agreement. The City shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Leased Premises 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 this Lease Agreement as and when the same become due. The City may, at the City's expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes,assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in the reasonable opinion of the Authority, by nonpayment of any such items, the interest of the Authority in the Leased Premises will be materially endangered or the Leased Premises 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 and the Trustee. Section 5.2. Modification of Leased Premises. The City shall, at its own expense, have the right to make additions, modifications and improvements to the Leased Premises. All additions, modifications and improvements to the Leased Premises shall thereafter comprise part of the Leased Premises and be subject to the provisions of this Lease Agreement. Such additions,modifications and improvements shall not in any way damage the Leased Premises -or cause the Leased Premises to be used for purposes other than those authorized under the provisions of State and federal law;and the City shall file with the Trustee and the Authority a Written Certificate of the City stating that the Leased Premises, upon completion of any additions, modifications and improvements made thereto pursuant to this Section 5.2, shall be of a value which is not substantially less than the value of the Leased Premises immediately prior to the making of such additions, modifications and improvements. The City will not permit any mechanic's or other lien to be established or remain against the Leased Premises for labor or materials furnished in connection with any remodeling, additions, modifications, improvements,repairs, renewals or replacements made by the City pursuant to this Section 5.2; provided that if any such lien is established and the City shall first notify or cause to be notified the Authority of the City's intention to do so, the City may in good faith contest any lien filed or established against the Leased Premises, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any -11- appeal therefrom and shall provide the Authority with full security against any loss or forfeiture which might arise from the nonpayment of any such item,in form satisfactory to the Authority. The Authority will cooperate fully in any such contest, upon the request and at the expense of the City. Section 5.3. Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained throughout the Term of this Lease Agreement, a standard comprehensive general insurance policy or policies in protection of the Authority,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 Premises. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of $100,000 (subject to a deductible clause of not to exceed $5,000) for damage to property resulting from each accident or event. Such public liability and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City,and such liability insurance may be maintained in whole or in part in the form of self-insurance by the City, subject to the provisions of Section 5.7, 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 shall be applied by the City toward extinguishment or satisfaction of the liability with respect to which paid. Section 5.4. Fire and Extended Coverage Insurance.The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, insurance against loss or damage to the improvements constituting a part of the Leased Premises by fire and lightning, with extended coverage and vandalism and malicious mischief insurance. Said extended coverage insurance, if required, shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance, and shall include earthquake coverage if such coverage is available at reasonable cost from reputable insurers in the judgment of the City. Such insurance shall be in an amount at least equal to the lesser of (a) one hundred percent (100%) of the replacement cost of all of the insured improvements, or(b) the aggregate principal amount of the City's Pro Rata Portion of the outstanding Bonds. 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 however, that such insurance may not be maintained by the City in the form of self-insurance. The Net Proceeds of such insurance shall be applied as provided in Section 6.1(a). Section 5.5. Rental Interruption Insurance.The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Premises as a result of any of the hazards covered in the insurance required by Section 5.4, in an amount at least equal to the maximum Lease Payments coming due and payable during any future twenty-four (24) month period. 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 in the form of self-insurance. The proceeds of such insurance, if any, shall be paid to the Trustee and deposited in the Bond Fund, and shall be credited towards the payment of the Lease Payments as the same become due and payable. -12_ Section 5.6. Recordation Hereof; Title Insurance. On or before the Closing Date the City shall, at its expense, (a) cause this Lease Agreement and the Site and Facility Lease, or a memorandum hereof or thereof, and a memorandum of the assignment made pursuant to Section 5.01 of the Indenture,in each case in form and substance approved by Bond Counsel, to be recorded in the office of the Orange County Recorder, and (b) obtain a CLTA policy of title insurance which insures the City's leasehold estate in the Leased Premises in art amount equal to the aggregate principal amount of the Bonds allocable to the City. All Net Proceeds received under said policy shall be deposited with the Trustee in the Redemption Fund and shall be. applied to the redemption of Bonds pursuant to Section 4.01(b) of the Indenture. A copy of such policy shall be delivered by the City to the Municipal Bond Insurer. Section 5.7. Net Proceeds of Insurance; Form of Policies. Each policy of insurance maintained pursuant to Sections 5.4, 5.5 and 5.6 shall name the Trustee as loss payee so as to provide that all proceeds thereunder shall be payable to the Trustee and shall name the Municipal Bond Insurer as an additional insured. All required insurance policies shall be provided by a commercial insurer rated "A" or better by A.M. Best & Company or rated in one of the two highest rating categories by Moody's and S&P (without regard to designations of plus (+) or minus (-). The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Lease Agreement. All such policies shall provide that the Trustee shall be given thirty (30) days' notice of each expiration, any intended cancellation thereof or reduction of the coverage provided thereby. The Trustee shall not be responsible for the sufficiency or amount of any insurance or self-insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment,compromise or settlement of any loss. The City shall cause to be delivered to the Trustee and the Municipal Bond Insurer annually, no later than August 1 in each year, a certificate stating that all of the insurance policies required by this Lease Agreement are in full force and effect and identifying whether any such insurance is then maintained in the form of self-insurance. In the event that any insurance maintained pursuant to Section 5.3 shall be provided in the form of self-insurance, the City shall file with the Trustee annually,within ninety (90) days following the close of each Fiscal Year, a statement of 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. In the event that any such insurance shall be provided in the form of self-insurance by the City, the City shall not be obligated to make any payment with respect to any insured event except from such reserves. The results of such review shall be filed with the Trustee and the Municipal Bond Insurer. Section 5.8. Installation of Personal Property. The City may, at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon any portion of the Leased Premises. All such items shall remain the sole property of the City,in which neither the Authority nor the Trustee shall have any interest, and may be modified or removed by the City at any time provided that the City shall repair and restore any and all damage to the Leased Premises resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement shall prevent the City from purchasing or leasing items to be installed pursuant to this Section 5.8 under a lease or conditional sale agreement, 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 Premises. Section 5.9. Liens. Neither the City nor the Authority shall, directly or indirectly, create, incur, assume or suffer to exist any mortgage,pledge,lien, charge,encumbrance or claim on or with respect to any portion of the Leased Premises, other than the respective rights of the Authority and the City as provided herein and Permitted Encumbrances. Except as expressly provided in this Article V, the City and the Authority shall promptly, at their own expense, -13- take such action as may be necessary to duly discharge or remove arty such mortgage, pledge, lien,charge,encumbrance or claim,for which it is responsible,if the same shall arise at any time. The City shall reimburse the Authority for any expense incurred by it in order to discharge or remove any such mortgage,pledge,lien,charge,encumbrance or claim. Section 5.10. Tax Covenants. (a) Private Activity Bond Limitation. The City shall assure that proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of section 141(b) of the Code or the private loan financing test of section 141(c) of the Code. (b) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause any of the Bonds to be "federally guaranteed"within the meaning of section 149(b) of the Code. (c) Rebate Requirement. The City shall take any and all actions necessary to assure compliance with section 148(f) of the Code,relating to the rebate of excess investment earnings, if any,to the federal government,to the extent that such section is applicable to the Bonds. (d) No Arbitrage. The City shall not take, or permit or suffer to be taken by the Trustee or otherwise, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date would have caused the Bonds to be "arbitrage bonds" within the meaning of section 148 of the Code. (e)Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the • exclusion of interest with respect to the Bonds from the gross income of the Owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the Closing Date. Section 5.11.Continuing Disclosure. (a) The City shall timely supply the information required by section 6599.1 of the California Government Code to the California Debt Advisory Commission ("CDAC") and to the Authority, all such information to be supplied annually and at such other time as required by said section 6599.1 on forms to be provided by CDAC or at such other time and in such other manner as shall comply with the provisions of said section 6599.1. (b) The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the City Continuing Disclosure Certificate. Notwithstanding any other provision of this Lease Agreement, failure of the City to comply with the City Continuing Disclosure Certificate shall not constitute an Event of Default hereunder;provided, however, that. any Participating Underwriter or any Owner or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance by the City of its obligations under this Section 5.11, including seeking mandate or specific performance by court order. -14- ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN; ABATEMENT OF LEASE PAYMENTS Section 6.1. Application of Net Proceeds. (a)From Insurance Award. The Net Proceeds of any insurance award resulting from any damage to or destruction of the Leased Premises by fire or other casualty shall be paid by the City to the Trustee and shall be deposited in the Insurance and Condemnation Fund by the Trustee and applied as set forth in Section 5.07 of the Indenture. (b) From Eminent Domain Award. If the Leased Premises or any portion thereof shall be taken permanently or temporarily under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Net Proceeds resulting therefrom shall be deposited in the Insurance and Condemnation Fund and applied as set forth in Section 5.07 of the Indenture. (c) From Title Insurance Award. The Net Proceeds of any title insurance award shall be paid to the Trustee, deposited in the Insurance and Condemnation Fund and applied as set forth in Section 5.07 of the Indenture. Section 6.2. Abatement of Lease Payments. (a)Abatement Due to Damage or Destruction. The Lease Payments shall be abated during any period in which by reason of damage to or destruction of the Leased Premises (other than by eminent domain which is hereinafter provided for)which causes substantial interference with the use and occupancy by the City of the Leased Premises or any portion thereof. The amount of such abatement shall be an amount agreed upon by the City and the Authority, upon consultation with the Municipal Bond Insurer,such that the resulting Lease Payments represent fair consideration for the use and occupancy of the portions of the Leased Premises not damaged or destroyed. 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, this Lease Agreement shall continue in full force and effect and the City waives any right to terminate this Lease Agreement by virtue of any such damage and destruction. There shall be no abatement of the Lease Payments to the extent that moneys derived from any person as a result of such damage or destruction are available to pay the amount which would otherwise be abated or if there is any money available in the Bond Fund or the Reserve Fund to pay the amount which would otherwise be abated. (b) Abatement Due to Eminent Domain. If all of the Leased Premises shall be taken permanently under the power of eminent domain or sold to a government threatening to exercise the power of eminent domain, the Term of this Lease Agreement shall cease with respect to the Leased Premises as of the day possession shall be so taken. If less than all of the Leased Premises shall be taken permanently, or if all of the Leased Premises or any part thereof shall be taken temporarily under the power of eminent domain, (a) this Lease Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (b) there shall be a partial abatement of Lease Payments in an amount to be agreed upon by the City and the Authority such that the resulting Lease Payments for the Leased Premises represent fair consideration for the use and occupancy of the remaining usable portion of the Leased Premises. -15- ARTICLE VII DISCLAIMER OF WARRANTIES; ACCESS Section 7.1. Disclaimer of Warranties. THE AUTHORITY MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF THE LEASED PREMISES, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE LEASED PREMISES. IN NO EVENT SHALL THE AUTHORITY AND ITS ASSIGNS BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS LEASE, THE SITE AND FACILITY LEASE OR THE INDENTURE FOR THE EXISTENCE,FURNISHING,FUNCTIONING OR THE CITY'S USE OF THE LEASED PREMISES. Section 7.2. Rights of Access. The City agrees that the Authority and any Authorized Representative of the Authority, and the Authority's successors or assigns, shall have the right at all reasonable times to enter upon and to examine and inspect the Leased Premises. The City further agrees that the Authority, any Authorized Representative of the Authority, and the Authority's successors or assigns shall have such rights of access to the Leased Premises as may be reasonably necessary to cause the proper maintenance of the Leased Premises in the event of failure by the City to perform its obligations hereunder;provided,however, that the Authority's assigns shall not be required to cause such proper maintenance. Section 7.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Authority, the Trustee and their respective officers, agents, successors and assigns,harmless from and against all claims,losses and damages,including legal fees and expenses, arising out of(a) the use,maintenance, condition or management of,or from any work or thing done on the Leased Premises by the City, (b) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (c) any act or negligence of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Leased Premises, (d) any act or negligence of any lessee of the City with respect to the Leased Premises, or (e) the performance by the Trustee of its duties hereunder or under the Indenture. No indemnification is made under this Section 7.3 or elsewhere in this Lease Agreement for willful misconduct or negligence under this Lease Agreement by the Authority, the Trustee or any of their respective officers or employees. The indemnification hereunder shall survive removal or resignation of the Trustee,termination of this Lease Agreement or discharge of the Bonds. -16- ARTICLE VIII ASSIGNMENT, LEASING AND AMENDMENT Section 8.1. Assignment by the Authority. Certain rights of the Authority under this Lease Agreement, including the right to receive and enforce payment of the Lease Payments to be made by the City under this Lease Agreement, have been pledged and assigned to the Trustee for the benefit of the Owners of the Bonds pursuant to the Indenture, to which pledge and assignment the City hereby consents. The assignment of this Agreement to the Trustee is solely in its capacity as Trustee under the Indenture and the duties, powers and liabilities of the Trustee in acting hereunder shall be subject to the provisions of the Indenture,including,without limitation, the provisions of Article VIII thereof. Section 8.2. Assignment and Subleasing by the City. This Lease Agreement may not be assigned by the City. The City may sublease the Leased Premises or any portion thereof, but only with the written consent of the Municipal Bond Insurer and subject to, and delivery to the Authority of a certificate as to, all of the following conditions: (a) This Lease Agreement and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City; (b) The City shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) No such sublease by the City shall cause the Leased Premises to be used for a purpose other than as may be authorized under the provisions of the laws of the State;and (d) The City shall furnish the Authority and the Trustee with a written opinion of Bond Counsel, stating that such sublease is permitted by this Lease Agreement and the Indenture,and will not cause the interest on the Bonds to become included in gross income for federal income tax purposes. Section 8.3. Amendment of Lease. (a) Substitution of Site or Facility. The City shall have, and is hereby granted, the option at any time and from time to time during the Term of this Lease Agreement to substitute other land (a "Substitute Site") and/or a substitute facility or substitute facilities (a "Substitute Facility") for the Site (the "Former Site"), or a portion thereof, and/or the Facility (the "Former Facility"), or a portion thereof, provided that the City shall satisfy all of the following requirements which are hereby declared to be conditions precedent to such substitution: (i) The City shall file with the Authority and the Trustee an amended Exhibit A to the Site and Facility Lease which adds thereto a description of such Substitute Site and deletes therefrom the description of the Former Site; (ii) The City shall file with the Authority and the Trustee an amended Exhibit A to this Lease Agreement which adds thereto a description of such Substitute Site and deletes therefrom the description of the Former Site; (iii) The City shall file with the Authority and the Trustee an amended Exhibit B to the Site and Facility Lease which adds thereto a description of such Substitute Facility and deletes therefrom the description of the Former Facility; -17- (iv) The City shall file with the Authority and the Trustee an amended Exhibit B to this Lease Agreement which adds thereto a description of such Substitute Facility and deletes therefrom the description of the Former Facility; (v) The City shall certify in writing to the Authority and the Trustee that such Substitute Site and/or Substitute Facility serve the purposes of the City, constitutes property that is unencumbered (or the portion of such property to be to substituted is unencumbered),subject to Permitted Encumbrances, and constitutes property which the City is permitted to lease under the laws of the State; (vi) The City delivers to the Trustee and the Authority evidence that the Substitute Site and/or Substitute Facility (or the portions to be to substituted), together with the portions of the Site and/or Facility not to be substituted, are of equal or greater value than the then Outstanding principal component of Bonds allocable to the City; (vii) The Substitute Site and/or Substitute Facility shall not cause the City to violate any of its covenants,representations and warranties made herein; (viii) The City shall obtain an amendment to the title insurance policy required pursuant to Section 5.6 hereof which adds thereto a description of the Substitute Site and deletes therefrom the description of the Former Site; (ix) The City shall certify that the Substitute Site and/or the Substitute Facility is of the same or greater essentially to the City as was the Former Site and/or the Former Facility; and (x) The City shall obtain the prior written consent of the Municipal Bond Insurer of such substitution and notice of such consent shall be given by the City to any rating agency then rating the Bonds. (b)Release of Site. The City shall have,and is hereby granted, the option at any time and from time to time during the Term of the Lease Agreement to release any portion of the Site, provided that the City shall satisfy all of the following requirements which are hereby declared to be conditions precedent to such release: (i) The City shall file with the Authority and the Trustee an amended Exhibit A to the Site and Facility Lease which describes the Site, as revised by such release; (ii) The City shall file with the Authority and the Trustee an amended Exhibit A to this Lease Agreement which describes the Site,as revised by such release; (iii) The City delivers to the Trustee and the Authority evidence that the Site, as revised by such release, together with the Facility, has a total at least equal to the portion of the Bonds then outstanding which are allocable to the City; (iv) The City shall obtain an amendment to the title insurance policy required pursuant to Section 5.6 hereof which describes the Site,as revised by such release; and (v) The City shall obtain the prior written consent of the Municipal Bond Insurer of such release and notice of such consent shall be given by the City to any rating agency then rating the Bonds. (c) GeneralIy. The Authority and the City may at any time amend or modify any of the provisions of this Lease Agreement,but only (a) with the prior written consents of the Owners -18- of a majority in aggregate principal amount of the Outstanding Bonds, or (b) without the consent of any of the Bond Owners,but only if such amendment or modification is for any one or more of the following purposes: (i) to add to the covenants and agreements of the City contained in this Lease Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; (ii) to make such provisions for the purpose of curing any ambiguity,or of curing, correcting or supplementing any defective provision contained herein, or in any other respect whatsoever as the Authority and the City may deem necessary or desirable, provided that, in the opinion of Bond Counsel, such modifications or amendments will not materially adversely affect the interests of the Owners of the Bonds; or (iii) to amend any provision thereof relating to the Tax Code, to any extent whatsoever but only if and to the extent such amendment will not adversely affect the exclusion from gross income of interest on the Bonds under the Code,in the opinion of Bond Counsel. Written notice of any such amendment or modification shall be given by the City to Moody's and S&P at least thirty (30) days prior to the effective date of such amendment or modification. -19- ARTICLE IX EVENTS OF DEFAULT; REMEDIES Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Lease Agreement: (a) Failure by the City to pay any Lease Payment required to be paid hereunder at the time specified herein. (b) Failure by the City to make any Additional Payment required hereunder and the continuation of such failure for a period of thirty (30) days. (c) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in the preceding clauses (a) or (b), for a period of sixty (60) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if in the reasonable opinion of the City the failure stated in the notice can be corrected,but not within such sixty (60) day period, such failure shall not constitute an Event of Default if the City shall commence to cure such failure within such sixty (60) day period and thereafter diligently and in good faith shall cure such failure in a reasonable period of time. (d) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors,or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of applicable federal bankruptcy law,or under any similar acts which may hereafter be enacted. Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section 9.1 shall have happened and be continuing, it shall be lawful for the Authority to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement; provided, however, that notwithstanding anything to the contrary herein or in the Indenture, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable or to terminate this Lease Agreement or to cause the fee interest or the leasehold interest of the City in the Leased Premises to be sold, assigned or otherwise alienated. Each and every covenant hereof to be kept and performed by the City is expressly made a condition and, upon the breach thereof, the Authority may exercise any and all rights of entry and re-entry upon the Leased Premises. The City hereby irrevocably consents to the Authority's repossession of the Lease Premises if such an Event of Default shall occur and consents to the Authority's re-letting. of the Lease Premises for the account of the City. In the event of such default and notwithstanding any re-entry by the Authority, the City shall, as herein expressly provided, continue to remain liable for the payment of the Lease Payments and/or damages for breach of this Lease Agreement and the performance of all conditions herein contained and,in any event, such rent and/or damages shall be payable to the Authority at the time and in the manner as herein provided,to wit: (a) The City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained and shall reimburse the Authority for any deficiency arising out of the re-leasing of the Leased Premises, or, in the event the Authority is unable to re-lease the Leased Premises, then for the full amount of all Lease Payments to the end of the Term of this Lease Agreement, but said Lease Payments and/or deficiency shall be -20- payable only at the same time and in the same manner as hereinabove provided for the payment of Lease Payments hereunder,notwithstanding such entry or re-entry by the Authority or any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Leased Premises or the exercise of any other remedy by the Authority. (b) The City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to enter upon and re-lease the Leased Premises in the event of default by the City in the performance of any covenants herein contained to be performed by the City and to remove all personal property whatsoever situated upon the Leased Premises to place such property in storage or other suitable place in Orange County, 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 or occasioned by any such entry upon and re-leasing of the Leased Premises and the removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. (c) 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 Premises as herein provided and all claims for damages that may result from the destruction of or injury to the Leased Premises and all claims for damages to or loss of any property belonging to the City that may be in or upon the Leased Premises. (d) The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-lease the Leased Premises in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-leasing shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such re-leasing is made or the terms and conditions of such re-leasing,or otherwise. (e) The City further waives the right to any rental obtained by the Authority in excess of the Lease Payments and hereby conveys and releases such excess to the Authority as compensation to the Authority for its services in re-leasing the Leased Premises. Section 9.3. Limitation on Remedies. Notwithstanding the foregoing provisions of Section 9.2,neither the Authority nor the Trustee shall exercise any remedies against the Leased Premises to the extent such remedies would generate funds which are subject to such lien and which are not available to satisfy the obligations of this Lease Agreement or the Indenture. Section 9.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall, except as herein expressly provided to the contrary,be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article IX it shall,not be necessary to give any notice,other than such notice as may be required in this Article IX or by law. Section 9.5. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Lease Agreement should default under any of the provisions hereof and the nondefaulting party should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor -21- pay to the nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred by the nondefaulting party. Section_9.6._No_Additional Waiver Implied by One Waiver.In the event any agreement _ contained in this Lease Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breath hereunder. Section 9.7. Trustee and Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article IX have been assigned by the Authority to the Trustee under the Indenture, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners of the Bonds as provided in the Indenture.In the event that this Lease Agreement shall be amended pursuant to Section 8.3(b)in connection with the issuance of additional bonds, notes, leases or other obligations, the rights and remedies granted under this Article IX shall be exercised as well by the owners of such bonds,notes,leases or other obligations, or by a fiduciary on their behalf, on a parity with the Trustee and the Bond Owners. -22- ARTICLE X MISCELLANEOUS Section 10.1.Notices. All written notices to be given under this Lease Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, confirmed by telephone, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority, the City or the Trustee may,by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. If to the Authority: Countywide Public Financing Authority 20 Civic Center Plaza Santa Ana,CA 92701 Attn: Treasurer If to the City: City of Brea Number One Civic Center Circle, 3rd Floor Brea,CA 92621-5758 Attn: Financial Services Director If to the Trustee: U.S. Trust Company of California,N.A. 515 South Flower Street,Suite 2700 Los Angeles,CA 90071 Attn:Corporate Trust Department If to the Municipal Bond Insurer: MBIA Insurance Corporation 113 King Street Armonk, NY 10504 Attention:Insured Portfolio Management The Authority, the City, the Trustee and the Municipal Bond Insurer, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent. Section 10.2. Notices to be Given to the Municipal Bond Insurer. While the Municipal Bond Insurance Policy is in effect, the City shall furnish, or cause to be furnished, to the Municipal Bond Insurer such information it may reasonably request. The City will permit the Municipal Bond Insurer to discuss the affairs, finances and - - accounts of the City or any information the Municipal Bond Insurer may reasonably request regarding the security for the Bonds with appropriate officers of the City. The City will permit the Municipal Bond Insurer to have access to the Leased Premises at any reasonable time upon reasonable notice. Section 10.3. Binding Effect. This Lease Agreement shall inure to the benefit of and shall be binding upon the Authority and the City and their respective successors and assigns. Section 10.4. Severability. In the event any provision of this Lease Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. -23- Section 10.5. Net-net-net Lease. This Lease Agreement shall be deemed and construed to be a "net-net-net lease" and the City hereby agrees that the Lease Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever. Section 10.6. Further Assurances and Corrective Instruments. The Authority and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Leased Premises hereby leased or intended so to be or for carrying out the expressed intention of this Lease Agreement. Section 10.7. Execution in Counterparts. This Lease Agreement may be executed in several counterparts,each of which shall be an original and all of which shall constitute but one and the same instrument. Section 10.8. Applicable Law. This Lease Agreement shall be governed by and construed in accordance with the laws of the State. Section 10.9. Authorized Representatives. Whenever under the provisions of this Lease Agreement the approval of the Authority or the City is required, or the Authority or the City is required to take some action at the request of the other, such approval or such request shall be given for the Authority by an Authorized Representative of the Authority and for the City by an Authorized Representative of the City, and any party hereto shall be authorized to rely upon any such approval or request. Section 10.10. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define,limit or describe the scope or intent of any provisions or Section of this Lease Agreement. -24- IN WITNESS WHEREOF, the Authority has caused this Lease Agreement to be executed in its corporate name by its duly authorized officers and sealed with its corporate seal; and the City has caused this Lease Agreement to be executed in its name by its duly authorized officers and sealed with its corporate seal, as of the date first above written. COUNTYWIDE PUBLIC FINANCING AUTHORITY, as Lessor AillrL, j1—ill 6 0.erick t.Coloma Tre,surer [S E A L] Attest: ���tamce .Guy Secretary CITY OF BREA, as Lessee By Lawrence D. Hurst Financial Services Director [SEAL] Attest: Elaine Capps City Clerk -25- IN WITNESS WHEREOF,the Authority has caused this Lease Agreement to be executed in its corporate name by its duly authorized officers and sealed with its corporate seal; and the City has caused this Lease Agreement to be executed in its name by its duly authorized officers and sealed with its corporate seal, as of the date first above written. COUNTYWIDE PUBLIC FINANCING AUTHORITY, as Lessor By Roderick R.Coloma Treasurer [S E A L] Attest: Janice C. Guy Secretary CITY OF BREA, as Lessee By ed/(V_A Lawrence D. Hurst Financial Services Director [S E A L] Attest: - 46;(4(-E Elaine C p s City Clerk -25- CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange On 7-22-96 before me, Aida E. Renta DATE AIDA E.RENTA,DEPUTY CLERK personally appeared Roderick R. Coloma and Janice C. Guy NAME(S)OF SIGNERS) • ir personally known to me - OR - 0 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 AN2' , signature(s) on the instrument the person(s), or ther entity upon behalf of which the person(s) acted, ie ® Pe D��A Y1 executed the instrument. • 0 J 1958 tto s L , _ s i9 y' j `1 cRGA“' * �R11 9, ��i WITNESS my hand and official seal. SIGNATURE OF D UIY CLERK STATE OF CALIFORNIA ) ) ss. COUNTY OF CI ---- - -) - On 23 (e' before me, latrruack- W9td Notary Public, personally appeared Lawrence D. Hurst and Elaine Capps, personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. y� DEBORAH L.WHITE Nota OOMM.p #1017928 .y� / ORANIEC Ca rila Signature C.J"V V1./-k. VL frY`M.e. MY Comm.Expires FEB 13, 1pg8 EXHIBIT A DESCRIPTION OF THE SITE • The following parcels of land situated in the County of Orange, State of California, described as follows: THAT PORTION OF SECTION 7, TOWNSHIP 3 SOUTH, RANGE 9 WEST, SAN BERNARDINO BASE AND MERIDIAN, IN THE RANCHO SAN JUAN CAJON DE SANTA ANA, IN THE CITY OF BREA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51 PAGE 7 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT POINT "A" AS DESCRIBED IN PARCEL 1 OF THE DEED TO THE CITY OF BREA RECORDED OCTOBER 11, 1984 AND AS SHOWN ON EXHIBIT "B" TO SAID DEED; THENCE EASTERLY ALONG THE NORTHERLY LINE OF ANNEXATION NO. 3-76' TO THE CITY OF BREA BY RESOLUTION NO. 77-45 ADOPTED BY THE CITY COUNCIL MAY 17, 1977 AND CERTIFIED BY THE SECRETARY OF STATE ON JUNE 28, 1977, SOUTH 89 ' 53 ' 50" EAST 141 .59 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE CONTINUING ALONG SAID NORTHERLY LINE SOUTH 89° 53 ' 50" EAST 198 .41 FEET TO A LINE PARALLEL WITH AND 340. 00 FEET EASTERLY, MEASURED AT RIGHT ANGLES, FROM THE EASTERLY BOUNDARY OF TRACT NO. 9577, AS PER MAP RECORDED IN BOOK 438 PAGES 4 THROUGH 12, INCLUSIVE, OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY; THENCE SOUTH 0° 06 ' 10" WEST 272 .23 FEET ALONG SAID PARALLEL LINE TO A POINT ON A CURVE CONCAVE NORTHEASTERLY AND HAVING A RADIUS OF 2,440. 00 FEET CONCENTRIC WITH THE NORTHERLY LINE OF LAMBERT ROAD, 60.00 FEET IN WIDTH, AS DESCRIBED IN AN EASEMENT FOR ROAD PURPOSES FROM UNION OIL OF CALIFORNIA TO THE CITY OF BREA RECORDED DECEMBER 9, 1977 AS INSTRUMENT NUMBER 12703 IN BOOK 12487 PAGE 31 OF OFFICIAL RECORDS OF SAID ORANGE COUNTY, A RADIAL LINE THROUGH SAID POINT BEARS NORTH 4° 40 ' 30" EAST; THENCE NORTHWESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 4° 07 ' 28" AN ARC LENGTH OF 175. 64 FEET; THENCE NORTH 50° 23' 20" WEST 31 .07 FEET TO A LINE BEING PARALLEL AND 141.59 FEET EASTERLY, MEASURED AT RIGHT ANGLES, FROM THE EASTERLY BOUNDARY OF SAID TRACT NO. 9577; THENCE NORTHERLY ALONG SAID PARALLEL LINE NORTH 0° 06 ' 10" EAST 232 . 18 FEET TO THE • TRUE POINT OF BEGINNING. EXCEPT THAT PORTION OF SAID REAL PROPERTY LYING BELOW A DEPTH OF 500 FEET MEASURED VERTICALLY FROM THE SURFACE THEREOF, WITH NO RIGHT OF SURFACE ENTRY THEREON, AS EXCEPTED IN THE DEED FROM UNION OIL COMPANY OF CALIFORNIA, A CALIFORNIA CORPORATION, RECORDED OCTOBER 11, 1984 AS INSTRUMENT NO. 84-421550 OF OFFICIAL RECORDS. Exhibit A Pagel EXHIBIT B DESCRIPTION OF THE FACILITY Brea Fire Station#3,located at 400 North Kraemer Boulevard,Brea. Exhibit B EXHIBIT C SCHEDULE OF LEASE PAYMENTS Principal Interest Lease Payment Date Component Component Total 01/15/97 — $27,586.16 $ 27,586.16 07/15/97 $ 95,000.00 27,433.75 122,433.75 01/15/98 — 25,486.25 25,486.25 07/15/98 100,000.00 25,486.25 125,486.25 01/15/99 — 23,436.25 23,436.25 07/15/99 100,000.00 23,436.25 123,436.25 01/15/00 — 21,286.25 21,286.25 07/15/00 105,000.00 21,286.25 126,286.25 01/15/01 — 18,871.25 18,871.25 07/15/01 110,000.00 18,871.25 128,871.25 01/15/02 — 16,258.75 16,258.75 07/15/02 115,000.00 16,258.75 131,258.75 01/15/03 — 13,441.25 13,441.25 07/15/03 120,000.00 13,441.25 133,441.25 01/15/04 — 10,441.25 10,441.25 07/15/04 125,000.00 10,441.25 135,441.25 01/15/05 — 7,253.75 7,253.75 07/15/05 135,000.00 7,253.75 142,253.75 01/15/06 — 3,710.00 3,710.00 07/15/06 140,000.00 3,710.00 143,710.00 Exhibit C CERTIFICATE OF ACCEPTANCg This is to certify that the interest in real property conveyed by the Lease Agreement, dated as of July 1, 1996,from the Countywide Public Financing Authority,as lessor,to the City of Brea, a public agency and/or governmental agency, as lessee, is hereby accepted by the undersigned officer on behalf of the City of Brea pursuant to authority conferred by resolution of the City Council of the City of Brea adopted June 4, 1996, and the lessee consents to recordation thereof by its duly authorized officer. Dated:. July 1, 1996 CITY OF BREA By Z(60 D JC2•Q, g- Lawrence D.Hurst Financial Services Director Attest: By `'`(7 '/.etel Elaine Ca n City Clerk • STATE OF CALIFORNIA O ) ss. COUNTY OF Att On Qb'i(,dJ Mi4 l w l 2z, Kq before me, f644-1. (,U , Notary Public, personally appeared Lawrence D. Hurst and Elaine Capps, personally known to me (or proved to me on the basis of satisfactory evidence) to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacities, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. WITNESS my hand and official seal. rot," L WHITE -"u; ro A 101742g z ^ ,2 Notary Public—California v � ORAiNGtEreCeOFUE313, I 8rSignature :WU I" 6 .1/4 F9