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HomeMy WebLinkAboutJT25S - 4TH DISTRICT COURT ~ COUNCil/FINANCING ~ AUTHORITY /REDEV ElOPM ENT AGENCY ACTION REQUEST FOR CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: JUNE 20, 2005 TITLE: APPROVED o As Recommended o As Amended o Ordinance on 15t Reading o Ordinance on 2nd Reading o Implementing Resolution o Set Public Hearing For ~ RELOCATION OF 4TH DISTRICT COURT OF APPEAL FACILITY/CONSTRUCTION OF PARKING GARAGE " 'Li u ()a~ CITY MANAGER CONTINUED TO FILE NUMBER RECOMMENDED ACTION CITY COUNCIL ACTION 1. Authorize the Ci ty Manager and Clerk of the Council to execute a revised Purchase and Sale Agreement, and related documents, and approve the actions necessary for the sale of approximately two acres of Civic Center land to the California Judicial Council for construction of a new facility to house Division Three of the California Fourth District Court of Appeal. 2. Direct the City Attorney to prepare and authori ze the City Manager and Clerk of the Council to execute a second amendment to the professional services agreement with Gordon & Williams, Inc. to provide program management service for construction of the replacement parking garage for an approximate total project cost of $6.0 million. 3. Adopt a resolution authorizing and directing the execution of certain lease financing documents related to construction of the parking garage, and authorizing and directing certain actions with respect thereto. SANTA ANA FINANCING AUTHORITY ACTION Adopt a resolution authorizing and directing the execution of certain lease financing documents related to construction of the parking garage, and authorizing and directing certain actions with respect thereto. JT25S-1 Fourth District Court of Appeal June 20, 2005 Page 2 REDEVELOPMENT AGENCY ACTION Adopt a resolution authorizing and directing the execution of reimbursement agreement in connection with certain financing proceedings by the City of Santa Ana and approving related documents and official actions. DISCUSSION The Fourth District Court of Appeal, based in San Diego, is the intermediate state appellate court serving Santa Ana and Orange County. Division Three of that court was established in 1982 to provide justices and facilities to directly serve Orange County. Since its establishment, Division Three has been located in Santa Ana. Originally housed in a commercial office building on Santa Ana Boulevard, the Court is currently located in a facility at 925 N. Spurgeon Street in the Midtown Area. Division Three has now outgrown its Spurgeon Street courthouse and is seeking a new permanent location. A county-wide search conducted by the California Judicial Council resulted in the selection of a two acre site at the northwest corner of Santa Ana Boulevard and Ross Street in the Santa Ana Civic Center. (See Exhibit 1) The site is now occupied by the vacant temporary city jail and a portion of the City Hall parking lot. Under the terms of the proposed purchase and sale agreement, the City will sell the site for the courthouse to the State of California for a nominal fee. Further, the City will be responsible for the demolition of the vacant jail facility and the preparation of the site for the State-funded construction. The City will also construct a 300 space parking garage in front of City Hall. This new garage will provide approximately 70 spaces dedicated to Courthouse operations and personnel, with the balance of the spaces designed to accommodate the parking stalls displaced by the courthouse construction. As the agreement is one that is prepared by the State, it is recommended that the Council approve this agreement with the provision that non-substantive changes to the terms and conditions may be authorized by the City Manager and the City Attorney. In 2002, in anticipation of this project, the City Council approved a program management agreement with the parking garage design and construction firm of Gordon & williams. Under that agreement, Gordon & Williams 1S responsible for designing the garage and administering demolition and construction contracts for the project. On February 7, 2005 the City Council approved an amendment to the agreement for a total cost of $5.21 million. After final negotiation with State of California for the proposed Appellate JT25S-2 Fourth District Court of Appeal June 20, 2005 Page 3 Court, the scope and costs of the proj ect has expanded, and a second amendment is necessary to enhance the scope of work to cover the $6.0 million in construction costs. Upon approval by the State Public Works Board (PWB) and the State Judicial Council, Gordon & Williams, under the supervision of the Public Works Agency, will immediately begin preparing plans and specifications for the garage and be prepared to contract for demolition and site clearance. It is anticipated that the parking garage will be completed in 13 months, or approximately October 2006. The State plans to begin construction of the courthouse facility by early spring 2007 and move the court personnel into their new permanent home in the Santa Ana Civic Center by Fall 2008. The design, construction and financing of the parking garage are estimated to cost a total of $6 million, in order to complete the financing, the firm of Quint and Thimmig will serve as bond counsel and Northcross, Hill & Ach will perform financial advisor services. Upon project approval by the State, the City would seek competitive lease-purchase financing quotes in an amount not to exceed five percent. FISCAL IMPACT Funds for construction of the parking garage and preparation of the courthouse development site will be generated from the financing and available in the capital projects account for the Civic Center Parking Structure Project (account no. 51-012-6621, Project No. 2740). CONCUR: APPROVED AS TO FUNDS AND ACCOUNTS: ~t1~ ~rancisco Gutierrez 0- Executive Director, Finance and Management Services ~~~- tric . Whi take. I Executi e Director Community Development Agency JT25S-3 ..._.";,_~~!o...:~:":-__.., L_ F.......~ lr' "'Y"'J (I iii lii,':", 1""'iF:.::'. I i:l i!l!i II::i!;!! : i/ij l'II,I:i"i) 'i/ Iw ROSS fi' I' :i'!.1" I a:: ; ~~ ANNEX tl f~." ; ! ti ..-.-.;' ~~~??,.~<:~~"...::::~::-~,--:;,~.- ;:' :, :;'. >,.~. ,: ,~,..,c. i~~~~i~=h'A",~&;jJ~:~' ; -~::.. ~(~~:il I 'IT-~'!U_'::';: 'L.i:':'t1::B'.':,:r: {"; i " I~ :;."...:! \ '~rK';;':L-!:..r . " . .. j"{~~~~~~~~S'~f ',-~-,~-_." .);.J"',5~'t~ ! 0 , ", ,.,h,/.'. '.,,-- '" ".", ,',--,"" ./;--"..",~J: ." . ,. .., \ a:: 'r:~--c;:=:1=-:3f:~=~t( J/;r~-i;; i ''',,-)1'.-;' ~R . ~ """: :1,', '7t. . 1 . , . ., PROPOSED ~~J."f I ;::~~ !j!~OL'J} , ! . ~~ f-' ;, ~ i."'-\~\~.'.. '. \.~. ;_.' j . . ;:: ,~J~~i ...::, f.,' EXISTING STATE BULDING ri"" " POOf.i!OSED ~~"". _.. ~ ~ m_., 1 ;-----:;- '. ' ,J' , .' :~J " t ,"';' .': <.... ,.:/ .;" . '. .' ,;'~<<;:' ; ,.~. ,,\~/ ' ':,~<:) , '. ;/ >/ <()~ ",,":":/.>~f.;-;}~/, '~Jt~' .,. ..". ..,~.. n'l '. l. \,;.~~?;~~ ,;' .....:K~ ,.' ..- \k.r:;,,::'Y:' . '<o"<~"~'. ' .. -,.- .." . .p _\,= ~ .' ',...-::::::':::::::::"':' -' .' -_.....,.._.,,~....,''''"'----- ~'1 .. ---.,.,.,. :'... -------0-...-. r'"~ ~, i__~. ..,,\-.:;.~_.-J.--- -,.......'" - .-:,...~.~~ \) ,', ,>:' .') '..<", -" EXHIBIT 1 SANTA ANA , PW A t , , -.: ..s ACbCY CITY COl..ta.. AQEN)A DAlE: .JANJAFN 3. 2005 Title: CIVIC CENTER PARKING STRUCTIJRE AND 4TH DISTRICT COURT OF APPEALS JT25S-4 RESOLUTION NO. 2005-062 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING AND DIRECTING THE EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council (the "Council") of the City of Santa Ana (the "City") hereby finds, determines and declares as follows: A. The City proposes to finance the costs of the construction of a parking structure on City-owned property located adjacent to the proposed State Appellate Court Building in Santa Ana, California (the "Improvements"); B. The City has determined to finance the Improvements by entering into a site lease (the "Site Lease") and a lease agreement (the "Lease Agreement") with the Santa Ana Financing Authority (the "Authority") ; C. The Authority intends to assign its rights under the Site Lease and the Lease Agreement to one or more purchasers to be determined; D. It is in the public interest and for the public benefit that the City authorize and direct execution of the Site Lease and the Lease Agreement with the Authority and certain other financing documents in connection therewith; and E. The documents below specified have been filed with the City and the members of the Council, with the aid of its staff, shall review said documents; Section 2. Resolution No. 2005-020, previously adopted by the Council on February 7, 2005, relating to the financing of the Improvements is hereby rescinded. Section 3. The below-enumerated documents be and are hereby approved, and the Mayor, the City Manager, the Finance Director, or the designee of any such official, is hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, and the City Clerk is hereby authorized and directed to attest to such official's signature: Resolution No. 2005-062 Page 1 of 3 JT25S-5 A. The Site Lease, by and between the City, as lessor, and the Authority, as lessee, pursuant to which the City will lease certain real property (the "Site") to the Authority; B. The Lease Agreement, by and between the Authority, as lessor, and the City, as lessee, pursuant to which the Authority will lease the Site and the Improvements back to the City, in such principal amount as shall be required to finance the Improvements, so long as the term of the Lease Agreement does not exceed thirty years, the total cost of the Improvements does not exceed $6,000,000 and the interest rate payable with respect to the Lease Agreement does not exceed 5%; and C. A reimbursement agreement, by and between the City and the Community Redevelopment Agency of the City of Santa Ana (the "Agency"), pursuant to which the Agency will agree to reimburse the City for payments made by the City under the Lease Agreement, to the extent such amounts are available. Section 3. The firm of Northcross Hill & Ach Inc. is hereby retained as financial advisor to the City in connection with the lease financing approve by this resolution. The Mayor, the City Manager, the Finance Director, or the designee of any such official, is authorized to execute a financial advisory agreement with such firm in such form as shall be approved by the City Attorney. Section 4. The firm of Quint & Thimmig LLP is hereby retained as bond counsel to the City in connection with the lease financing approve by this resolution. The Mayor, the City Manager, the Finance Director, or the designee of any such official, is authorized to execute a financial advisory agreement with such firm in such form as shall be approved by the City Attorney. Section 5. The Mayor, the City Manager, the Finance Director, the City Clerk and all other appropriate officials of the City are hereby authorized and directed to execute such other agreements, documents and certificates as may be necessary to effect the purposes of this resolution and the financing herein authorized. Section 6. This Resolution shall take effect upon its adoption by this Council. ADOPTED this 20th day of June, 2005. Miguel A. Pulido Mayor Resolution No. 2005-062 Page 2 of 3 JT25S-6 APPROVED AS TO FORM: Joseph W. Fletcher, City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2005-062 to be the original resolution adopted by the City Council of the City of Santa Ana on June 20, 2005. Date: Clerk of the Council City of Santa Ana Resolution No. 2005-062 Page 3 of 3 JT25S-7 Quint & Thimmig LLP 01/31/05 04/29/05 06/13/05 AFTER RECORDATION RETURN TO: Quint & Thimmig LLP One Embarcadero Center, Suite 2420 San Francisco, CA 94111-3737 Attention: Brian D. Quint, Esq. THIS TRANSACTION REFERRED TO IN THIS MEMORANDUM IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11929 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. SITE LEASE THIS SITE LEASE (this "Site Lease"), dated as of , 2005, is by and between the CITY OF SANTA ANA, a municipal corporation and chartered city duly organized and existing under and by virtue of the laws of the State of California (the "City"), as lessor, and the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under and by virtue of the laws of the State of California (the" Authority"), as lessee; WITNESSETH: WHEREAS, the Authority intends to assist the City in undertaking the financing of the costs of a parking structure on City-owned property located adjacent to the proposed State Appellate Court Building in Santa Ana, California (the "Improvements"), by leasing certain existing real property and the Improvements to be constructed thereon to the City pursuant to a Lease Agreement, dated as of . 2005 (the "Lease Agreement"); and WHEREAS, the City proposes to enter into this Site Lease with the Authority as a material consideration for the Authority's agreement to lease such real property and the Improvements to the City; NOW, THEREFORE, IT IS HEREBY MUTUALLY AGREED, as follows: Section 1. Definitions. Capitalized terms used, but not otherwise defined, in this Site Lease shall have the meanings ascribed to them in the Lease Agreement. Section 2. Site Lease. The City hereby leases to the Authority and the Authority hereby leases from the City, on the terms and conditions hereinafter set forth, that certain parcel of real 19014.06 JT25S-8 property situated in the City of Santa Ana, Orange County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the "Site"). Section 3. Term. The term of this Site Lease shall commence on ,2005, and shall end on , 20---, unless such term is extended or sooner terminated as hereinafter provided. If, on , 20---, the aggregate amount of Lease Payments (as defined in and as payable under the Lease Agreement) shall not have been fully paid, or provision shall not have been made for their payment, then the term of this Site Lease shall be extended until such Lease Payments shall be fully paid or provision made for such payment. If, prior to , 20---, all Lease Payments shall be fully paid or provision made for such payment in accordance with the Lease Agreement, the term of this Site Lease shall end ten (10) days thereafter. Section 4. Advance Rental Payment. The City agrees to lease the Site to the Authority in consideration of the payment by the Authority of a advance rental payment of $ . The City and the Authority agree that, by reason of the assignment of the Lease Payments to the Assignee and the Assignee's payment to or to the order of the Authority pursuant to the provisions of the Assignment Agreement, the advance rental payment referenced in the preceding sentence shall be deemed to have been paid. Section 5. Purpose. The Authority shall use the Site solely for the purpose of leasing the Site and the Improvements to the City pursuant to the Lease Agreement and for such purposes as may be incidental thereto; provided, however, that in the event of default by the City under the Lease Agreement, the Authority and its assigns may exercise the remedies provided in the Lease Agreement, including, without limitation, the right to re-lease the Site and the Improvements to a third party for any lawful purpose. Section 6. City's Interest in the Site. The City represents and warrants to the Authority and its assigns that it is the owner in fee of the Site and that the Site is free and clear of all liens and encumbrances other than Permitted Encumbrances. The Site constitutes a legal parcel and has access to a physically open street. Section 7. Assignments and Subleases. Unless the City shall be in default under the Lease Agreement, the Authority may not assign its rights under this Site Lease or sublet the Site, except to the Assignee or as otherwise provided in the Lease Agreement, without the written consent of the City. Section 8. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Site at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof. Section 9. Termination. The Authority agrees, upon the termination of this Site Lease, to quit and surrender the Site in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted. Section 10. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for thirty (30) days following notice and demand for correction thereof to the -2- JT25S-9 Authority, the City may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease Agreement shall be deemed to occur as a result thereof. Section 11. Quiet Enjoyment. The Authority, at all times during the term of this Site Lease, shall peaceably and quietly have, hold and enjoy all of the Site subject to the provisions of this Site Lease and the Lease Agreement. Section 12. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority or the Assignee are solely liabilities of the Authority or the Assignee, respectively, and the City hereby releases each and every, member, director, officer, employee and agent of the Authority and the Assignee of and from any personal or individual liability under this Site Lease. No member, director, officer, employee or agent of the Authority or the Assignee shall at any time or under any circumstances be individually or personally liable under this Site Lease for anything done or omitted to be done by the Authority or the Assignee hereunder. Section 13. Taxes. All assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Site (including both land and improvements) will be paid in accordance with the Lease Agreement. Section 14. Use of the Proceeds. The City and the Authority hereby agree that the lease to the Authority of the City's right and interest in the Site pursuant to Section 1 serves the public purposes of the City by providing funds to enable the City to finance the Improvements. The City hereby agrees that the proceeds of the assignment of the Lease Payments shall be used solely for the purpose of paying the costs of financing the Improvements. Section 15. Partial Invalidity. If anyone or more of the terms, provisions, covenants or conditions of this Site Lease shall, to any extent, be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding, order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law. Section 16. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests 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, and, if to the City, addressed to the City in care of the City Manager, City of Santa Ana, 20 Civic Center Plaza, Santa Ana, CA 92702, or if to the Authority, addressed to the Authority in care of the Executive Director, Santa Ana Financing Authority, 20 Civic Center Plaza, Santa Ana, CA 92702, or to such other addresses as the respective parties may from time to time designate by notice in writing; provided, however, that the party giving notice to the other under this Site Lease shall also give such notice to the Assignee at , 275 Broadhollow Road, Melville, NY 11747, Attention: Jonathan Lewis, or at such other address as the Assignee may from time to time designate by notice in writing. -3- JT25S-1 0 Section 17. 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 this Site Lease. Section 18. Applicable Law. This Site Lease shall be governed by and construed in accordance with the laws of the State of California. Section 19. Execution in Counterparts. This Site 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 instrument. -4- JT25S-11 IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written. CITY OF SANTA ANA, as Lessee By Name Title Attest: Patricia E. Healy City Clerk SANTA ANA FINANCING AUTHORITY, as Lessor By Name Title Attest: Patricia E. Healy Secretary -5- JT25S-12 [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] JT25S-13 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in the City of Santa Ana, Orange County, State of California, described as follows: That portion of Blocks A, B, C, and D of the Ross Addition to Santa Ana as shown on the map filed in Book 3, Pages 534 and 535 of Miscellaneous Records of Los Angeles County, California, together with those portions of Fifth Street, 60 feet wide, Sixth Street, 60 feet wide, Van Ness Street, 60 feet wide, and Parton Street, 60 feet wide, all being shown on said map of the Ross Addition to Santa Ana, as abandoned by Resolution No. 69-27 of the City Council of the City of Santa Ana, a certified copy of which was recorded February 19,1969 in Book 8878, Page 863 of Official Records of said Orange County, all in the City of Santa Ana, County of Orange, State of California, described as follows: Beginning at the intersection of the centerline of Santa Ana Boulevard (108 feet wide) with the centerline of Ross Street (106 feet wide) as shown on Record of Survey 95-1031, filed in Book 149, Pages 49 and 50 of Records of Survey, Records of said County; thence South 49002'03" West 248.90 feet along said centerline of Santa Ana Boulevard; thence North 40057'57" West 54.00 feet to the northwesterly line of said Santa Ana Boulevard and the True Point of Beginning, said northwesterly line also being the northwesterly line of Parcell as described in Resolution No. 68-186 of the City Council of the City of Santa Ana recorded December 18, 1968 in Book 8819, Page 934 of Official Records of said Orange County, said point being the beginning of a curve concave northwesterly having a radius of 746.00, a radial bearing to said beginning bears South 40057'57" East; thence southwesterly along said curve and said northwesterly line 401.75 feet through a central angle of 30051'21"; thence leaving said northwesterly line North 0005'22" West 53.21 feet; thence North 54013'46" East 27.92 feet; thence North 0005'22" West 36.93 feet; thence South 54013'46" West 64.85 feet to the centerline of said Parton Street (abandoned); thence North 0005'22" West 186.31 feet along said centerline to an angle point therein; thence continuing along said centerline North 0003'00" West 310.62 feet to the intersection with the centerline of said Sixth Street (abandoned) thence North 89058'20" East 309.89 feet to an angle point therein; thence continuing along said centerline North 89057' 41" East 246.29 feet to the westerly line of Ross Street, 106 feet wide; thence South 0037'23" East 235.48 feet along said westerly line to a curve concave northwesterly having a radius of 25.00 feet; thence southerly and southwesterly along said curve 21.67 feet through a central angle of 49039'26" to the northwesterly line of said Santa Ana Boulevard; thence South 49002'03" West 213.66 feet along said northwesterly line to the True Point of Beginning. Except that portion of said land lying easterly of the following described line: Beginning at a point on the curved northwesterly line of said Santa Ana Boulevard having a radius of 746.00 feet, as described above, said point being an arc distance of 74.14 feet southwesterly from the northeasterly terminus of said curve; thence North 0037'23" West 342.65 feet; thence North 89022'37" East 66.00 feet; thence North 0037'23" West 51.08 feet to a non-tangent curve concave westerly having a radius of 33.00 feet, a radial line to said curve bears South 57047'22" East; thence northerly along said curve 19.53 feet through a central angle of 33054'20"; thence North 1041'42" West 5.71 feet to a curve concave southeasterly having a radius of 18.00 feet; thence northerly and northeasterly along said curve 14.69 feet through a central angle of 46044'51"; thence North 45003'09" East 11.84 feet to a point on the centerline of said Sixth Street (abandoned). Also except that portion of said land described as follows: Beginning at the angle point in the centerline of Parton Street (abandoned) as described above; thence South 0005'22" East 23.18 feet along said centerline; thence North 89058'59" East 17.31 feet to the True Exhibit A JT25S-14 Point of Beginning of this exception; thence continuing North 89058'59" East 136.50 feet; thence North 0001'01" West 193.00 feet; thence South 89058'59" West 136.50 feet; thence South 0001'01" East 193.00 feet to the True Point of Beginning. Said parcel contains 267,010 square feetj6.1297 acres, more or less. Exhibit A JT25S-15 Quint & Thimmig LLP 01/31/05 04/29/05 06/13/05 LEASE AGREEMENT Dated as of , 2005 by and between the SANTA ANA FINANCING AUTHORITY, as Lessor and the CITY OF SANTA ANA, as Lessee 19014.06 JT25S-16 Section 1.1. Section 1.2. Section 2.1. Section 2.2. Section 3.1. Section 3.2. TABLE OF CONTENTS ARTICLE I DEFINITIONS AND EXHIBITS Definitions....................................................................................................................... ................ 2 Exhibits....................................................................................................................... ..................... 2 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Representations, Covenants and Warranties of the City .......................................................... 3 Representations, Covenants and Warranties of Authority....................................................... 3 ARTICLE III DEPOSIT OF MONEYS; DISBURSEMENT Deposit of Moneys......................................................................................................................... 5 Disbursement.................................................................................................................................. 5 ARTICLE IV AGREEMENT TO LEASE; TERM OF THIS LEASE AGREEMENT; LEASE PAYMENTS Section 4.1. Section 4.2. Section 4.3. Section 4.4. Section 4.5. Section 4.7. Lease .............................................................................................................................. .................. 7 Term of Agreement........................................................................................................................ 7 Possession .............................................................................................................................. ......... 7 Lease Payments.............................................................................................................................. 7 Quiet Enjoyment. ........................................................................................................................... 8 Additional Payments..................................................................................................................... 9 ARTICLE V MAINTENANCE; TAXES; INSURANCE; USE LIMIT A TIONS; AND OTHER MATTERS Section 5.1. Section 5.2. Section 5.3. Section 5.4. Section 5.5. Section 5.6. Section 5.7. Section 5.8. Section 5.9. Section 5.10. Section 5.11. Section 5.12. Section 5.13. Section 5.14. Section 5.15. Maintenance, Utilities, Taxes and Assessments....................................................................... 10 Modification of Property............................................................................................................. 10 Public Liability and Property Damage Insurance.................................................................... 11 Fire and Extended Coverage Insurance ....................................................................................11 Rental Interruption Insurance.................................................................................................... 12 Title Insurance .............................................................................................................................. 12 Insurance Net Proceeds; Form of Policies................................................................................. 12 Advances....................................................................................................................................... 13 Installation of City's Equipment ................................................................................................13 Liens......................................................................................................................... ...................... 13 Private Activity Bond Limitation............................................................................................... 13 Federal Guarantee Prohibition................................................................................................... 13 Rebate Requirement..................................................................................................................... 13 No Arbitrage................................................................................................................................. 13 Maintenance of Tax-Exemption................................................................................................. 14 -i- JT25S-17 ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET PROCEEDS Section 6.1. Section 6.2. Section 6.3. Section 7.1. Section 7.2. Section 7.3. Section 8.1. Section 8.2. Section 8.3. Section 9.1. Section 9.2. Section 9.3. Section 9.4. Section 9.5. Section 9.6. Section 9.7. Section 9.8. Section 10.1. Section 10.2. Section 11.1. Section 11.2. Section 11.3. Section 11.4. Section 11.5. Section 11.6. Section 11.7. Section 11.8. Section 11.9. Eminent Domain.................... ...................................................................................................... 15 A pplication of Net Proceeds....................................................................................................... 15 Abatement of Lease Payments in the Event of Damage or Destruction............................... 15 ARTICLE VII DISCLAIMER OF WARRANTIES; ACCESS; INDEMNIFICATION Disclaimer of Warranties............................................................................................................ 17 Access to the Property................................................................................................................. 17 Release and Indemnification Covenants................................................................................... 17 ARTICLE VIII ASSIGNMENT, SUBLEASING AND AMENDMENT Assignment by the Authority .....................................................................................................18 Assignment and Subleasing by the City ...................................................................................18 Amendment of Lease Agreement.............................................................................................. 18 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Events of Default Defined........................................................................................................... 21 Remedies on Default.................................................................................................................... 21 Waiver of Statutory Remedies.................................................................................................... 23 No Remedy Exclusive................................................................................................................. 23 Agreement to Pay Attorneys' Fees and Expenses ...................................................................23 No Additional Waiver Implied by One Waiver....................................................................... 23 Application of Proceeds.............................................................................................................. 23 Assignee to Exercise Rights........................................................................................................ 23 ARTICLE X PREP A YMENT OF LEASE PAYMENTS Prepayment Option..................................................................................................................... 25 Mandatory Prepayment From Net Proceeds of Insurance, Title Insurance or Eminent Domain.......................................................................................................................... 25 ARTICLE XI MISCELLANEOUS Notices....................................................................................................................... .................... 26 Binding Effect............................................................................................................................... 26 Severability........................................................................................................................ ...........26 Net-net-net Lease......................................................................................................................... 27 Further Assurances and Corrective Instruments..................................................................... 27 Execu tion in Counterparts.......................................................................................................... 27 A pplicable Law............................................................................................................................ 27 Authority and City Representatives ................................. ......... .... ........................... .................27 Captions.................................................................................................................................. ...... 27 -ii- JT25S-18 EXHIBIT A: EXHIBIT B: EXHIBIT C: EXHIBIT D: EXHIBIT E: DEFINITIONS DESCRIPTION OF THE SITE DESCRIPTION OF THE IMPROVEMENTS LEASE PAYMENT SCHEDULE FORM OF DISBURSEMENT CERTIFICATE -iii- JT25S-19 LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease Agreement"), dated as of , 2005, is by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority organized and existing under the laws of the State of California, as lessor (the" Authority"), and the CITY OF SANTA ANA, a municipal corporation and chartered city duly organized and existing under the laws of the State of California, as lessee (the "City"); WITNESSETH: WHEREAS, pursuant to that certain Site Lease, dated as of July 12005 (the "Site Lease"), the City has leased those certain parcels of real property situated in the City of Santa Ana, Orange County, State of California, more particularly described in Exhibit B attached hereto and made a part hereof (the "Site"), to the Authority, all for the purpose of enabling the City to finance the construction of a parking structure on the Site which is located adjacent to the proposed State Appellate Court Building in Santa Ana, California (the "Improvements"); WHEREAS, the Authority proposes to lease the Site and the Improvements (collectively, the "Property") back to the City pursuant to this Lease Agreement and to assign its right to receive lease payments under this Lease Agreement (the "Lease Payments"), its right to enforce payment of the Lease Payments and otherwise to enforce its interest and rights under this Lease Agreement in the event of a default hereunder by the City, to , as assignee (the" Assignee"), pursuant to that certain Assignment Agreement, dated as of July 1 2005, by and between the Authority and the Assignee; and WHEREAS, the proceeds of the assignment of this Lease Agreement, together with other available moneys, will be applied by the City to finance the costs of the Improvements; JT25S-20 ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions. The terms defined in Exhibit A attached hereto and by this reference incorporated herein, as used and capitalized herein, shall, for all purposes of this Lease Agreement, have the meanings ascribed to them in said Exhibit A unless the context clearly requires some other meaning. Section 1.2. Exhibits. The following exhibits are attached to, and by this reference made a part of, this Lease Agreement: Exhibit A: Exhibit B: Exhibit C: Exhibit D: Definitions Description of the Site Description of the Improvements The schedule of Lease Payments to be paid by the City hereunder with respect to the Property, showing the Lease Payment Date and amount of each such Lease Payment Form of Disbursement Certificate Exhibit E: -2- JT25S-21 ARTICLE II REPRESENT A TIONS, COVENANTS AND WARRANTIES Section 2.1. Representations, Covenants and Warranties of the City. The City represents, covenants and warrants to the Authority and the Assignee as follows: (a) Due Organization and Existence. The City is a municipal corporation and chartered city, duly organized and existing under the laws of the State. (b) Authorization. The laws of the State authorize the City to enter into the Site Lease and this Lease Agreement and to enter into the transactions contemplated by and to carry out its obligations under all of the aforesaid agreements; the City has duly authorized and executed all of the aforesaid agreements and such agreements constitute the legal, valid and binding agreements of the City, enforceable against the City in accordance with their respective terms. All procedures and requirements, including any legal bidding requirements, have been met by the City prior to the execution of this Lease Agreement in order to insure the enforceability of this Lease Agreement, and all Lease Payments and other payment obligations will be paid out of funds legally available for such purpose. The governing body of the City has complied with all applicable open public meeting and notice laws and requirements with respect to the meeting at which the City's execution of this Lease Agreement was authorized. (c) No Violations. Neither the execution and delivery of the Site Lease or this Lease Agreement, nor the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction, agreement or instrument to which the City is now a party or by which the City is bound, constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrances whatsoever upon any of the property or assets of the City, or upon the Property, except Permitted Encumbrances. (d) Execution and Delivery. The City has duly authorized and executed this Lease Agreement in accordance with the laws of the State. (e) Essential Nature of Property. The Property is essential to the City's operations. (f) Use of the Property. The City will use the Property for the purpose of performing one or more governmental or proprietary functions of the City consistent with the permissible scope of the City's authority. (g) Value of the Property. The value of the Property is approximately $12,000,000. Section 2.2. Representations, Covenants and Warranties of Authority. The Authority represents, covenants and warrants to the Assignee and the City as follows: -3- JT25S-22 (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 the Site Lease, this Lease Agreement and the Assignment Agreement; is possessed of full power to own and hold, improve and equip real and personal property and to lease and sell the same; has duly authorized the execution and delivery of all of the aforesaid agreements and such agreements constitute the legal, valid and binding agreements of the Authority, enforceable against the Authority in accordance with their respective terms. (b) No Encumbrances. The Authority will not pledge the Lease Payments or other amounts derived from the Property and from its other rights under this Lease Agreement and will not mortgage or encumber the Property, except as provided under the terms of this Lease Agreement. (c) No Violations. Neither the execution and delivery of the Site Lease, this Lease Agreement or the Assignment Agreement, the fulfillment of or compliance with the terms and conditions hereof or thereof, nor the consummation of the transactions contemplated hereby or thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound, constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of the Authority, or upon the Property, except Permitted Encumbrances. (d) No Assignments. Except for its assignment to the Assignee or as otherwise provided herein, the Authority will not assign this Lease Agreement, its right to receive Lease Payments from the City or its duties and obligations hereunder to any other person, firm or corporation so as to impair or violate the representations, covenants and warranties contained in this Section 2.2. (e) Execution and Delivery. The Authority has duly authorized and executed this Lease Agreement in accordance with the laws of the State. -4- JT25S-23 ARTICLE III DEPOSIT OF MONEYS; DISBURSEMENT Section 3.1. Deposit of Moneys. On the Closing Date, the Authority shall cause the Assignee to transfer the amount of $ to or to the order of the Authority. [Upon receipt of such amounts, the Authority will (a) transfer the amount of $ to or to the order of the City (the "Funding Amount") for the payment or reimbursement for the payment of the Improvements, (b) transfer the amount of $ to Quint & Thimmig LLP, for bond counsel services, and (c) transfer the amount of $ to Northcross Hill & Ach LLC, for financial advisory services.] Section 3.2. Disbursement. (a) The City agrees to establish, on or prior to the Closing Date, an account with the State of California Local Agency Investment Fund which accounts shall be used solely for the payment of costs of the Improvements and for no other purpose, the "Improvement Account." On or prior to the Business Day following the Closing Date, the Funding Amount shall be deposited in the Improvement Account. Evidence of such deposit shall be provided by the City to the Assignee. (b) At least five Business days before any withdrawal by the City from the Improvement Account shall be made, the City shall file with the Assignee a disbursement certificate, substantially in the form attached hereto as Exhibit E, stating: (i) the name of the payee or payees to whom each such payment is due, which may be the City in the case of reimbursement for costs theretofore paid by the City; (ii) if such disbursement is for reimbursement to the City, evidence of prior payment; (iii) the respective amounts to be paid; (iv) the purpose for which each obligation to be paid was incurred; (v) that obligations in the stated amounts have been incurred by the City and are presently due and payable and that each item thereof is a proper charge against the Improvement Account, and has not been previously paid therefrom; (vi) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the amounts payable to any of the persons named in such requisition, which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen's or mechanics' liens accruing by mere operation of law; -5- JT25S-24 (vii) that the component of the Improvements for which such payment relates is satisfactory to the City, and (viii) that the balance remaining in the Improvement Account after payment of such amounts, together with any investment income reasonably anticipated to be deposited in the Improvement Account and any other funds reasonably anticipated to be available therefor, will be sufficient to pay the costs of the Improvements. Upon receipt of each such document, the Assignee shall provide its approval of such payment by countersigning such document and transmitting it back to the City. -6- JT25S-25 ARTICLE IV AGREEMENT TO LEASE; TERM OF THIS LEASE AGREEMENT; LEASE PAYMENTS Section 4.1. Lease. The Authority hereby leases the Property to the City, and the City hereby leases the Property from the Authority, upon the terms and conditions set forth in this Lease Agreement. Section 4.2. Term of Agreement. The Term of the Lease Agreement shall commence on the date hereof, and shall end on , 20-, unless such term is extended as hereinafter provided. If, on , 20-, the Lease Payments payable hereunder shall have been abated at any time and for any reason, or if an Event of Default shall have occurred under this Lease Agreement and, as a result, any obligation under this Lease Agreement remains unpaid, then the Term of the Lease Agreement shall be extended until there has been deposited with the Assignee an amount sufficient to pay all obligations due under the Lease Agreement, but in no event shall the Term of the Lease Agreement extend beyond March 1, 2040. Section 4.3. Possession. The City hereby agrees to accept and take possession of the Property on or prior to the date hereof. The first Lease Payment shall be due on September 1,2006. Section 4.4. Lease Payments. (a) Obligation to Pay. Subject to the provisions of Articles VI and X hereof, the City agrees to pay to the Authority, its successors and assigns, as rental for the beneficial use and occupancy of the Property during each Rental Period, the Lease Payments (denominated into components of principal and interest) in the respective amounts specified in Exhibit D hereto, to be due and payable on the respective Lease Payment Dates specified in Exhibit D hereto. Notwithstanding any dispute between the City, the Authority or any other party, the City will make all Lease Payments when due, without withholding any portion of such rent, pending final resolution of such dispute by mutual agreement between the parties thereto or by a court of competent jurisdiction. (b) Effect of Prepayment. In the event that the City prepays all remaining Lease Payments in full pursuant to Article X hereof, the City's obligations under this Lease Agreement shall thereupon cease and terminate including, but not limited to, the City's obligation to pay Lease Payments under this Section 4.4. (c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4.4, 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, to the extent permitted by law, from the date of such default to the date of payment at the rate of twelve percent (12%) per annum. (d) Fair Rental Value. The Lease Payments for the Property for each Rental Period shall constitute the total rental for the Property for each such Rental Period and shall be paid by the -7- JT25S-26 City in each Rental Period for and in consideration of the right of the use and occupancy, and the continued quiet use and enjoyment, of the Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments for the Property do not exceed the fair rental value of the Property. In making such determination, consideration has been given to the obligations of the parties under this Lease Agreement, the uses and purposes which may be served by the Property, the total amounts which have been expended on the Property, the value of the Property and the benefits therefrom which will accrue to the City and the general public. (e) Source of Payments; Budget and Appropriation. Lease Payments shall be payable from any source of available funds of the City, subject to the provisions of Articles VI and X hereof. 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 the 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 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 officials 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. (f) Assignment. The City understands and agrees that all Lease Payments have been assigned by the Authority to the Assignee pursuant to the Assignment Agreement, and the City hereby assents to such assignment. The Authority hereby directs the City, and the City hereby agrees to pay to the Assignee at the following address, all payments payable by the City pursuant to this Section 4.4 and all amounts payable by the City pursuant to Article X hereof, in the respective amounts for each Assignee as set forth in Exhibit D hereof: 275 Broadhollow Road Melville, NY 11747 Attention: Jonathan Lewis Wire Information: [TO COME] or such other account as shall be provided to the City by the Assignee upon request In addition, all references herein to the Authority, when the context implies the Assignee, shall be assumed to also refer to the Assignee, even if not specifically so indicated. Section 4.5. Quiet Enjoyment. During the Term of the Lease Agreement, the Authority shall provide the City with quiet use and enjoyment of the Property and the City shall, during such Term, peaceably and quietly have and hold and enjoy the Property 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 Property as provided in Section 7.2 hereof. -8- JT25S-27 Section 4.6. Additional Payments. In addition to the Lease Payments, the City shall pay when due all costs and expenses incurred by the City and the Authority to comply with the provisions of this Lease Agreement, or otherwise arising from the leasing of the Property, compensation and indemnification due to the Authority and the Assignee, and all costs and expenses of auditors, engineers, attorneys and accountants. -9- JT25S-28 ARTICLE V MAINTENANCE; TAXES; INSURANCE; USE LIMITATIONS; AND OTHER MATTERS Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of the Lease Agreement, as part of the consideration for the rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City and the City shall pay, or otherwise arrange for the payment of, all utility services supplied to the Property 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 Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Lease Payments herein provided, the Authority agrees to provide only the Property, 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 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 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 opinion of Independent Counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the 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 5.2. Modification of Property. The City shall, at its own expense, have the right to remodel the Property or to make additions, modifications and improvements to the Property. All additions, modifications and improvements to the Property, but not any additional buildings or improvements, shall thereafter comprise part of the Property and be subject to the provisions of this Lease Agreement. Such additions, modifications and improvements shall not in any way damage the Property, substantially alter its nature, cause the interest component of Lease Payments to be subject to federal income taxes or cause the Property to be used for purposes other than those authorized under the provisions of State and federal1aw; and the Property, upon completion of any additions, modifications and improvements made thereto pursuant to this Section 5.2 (but excluding any additional buildings or improvements that do not comprise part of the Property), shall be of a value which is not substantially less than the value of the Property 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 -10- JT25S-29 remain against the Property 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 the Authority of the City's intention to do so, the City may in good faith contest any lien filed or established against the Property, and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide the 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 the Lease Agreement, insurance policies, including a standard comprehensive general insurance policy or policies in protection of the Authority, the City and the Assignee and their respective members, officers, agents and employees. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained through a joint exercise of powers authority created for such purpose or in the form of self-insurance by the City. Said policy or policies shall provide for indemnification of said parties against direct or consequential loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in each accident or event, and in a minimum amount of $150,000 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. Deductibles, if any, shall be in such amounts as may reasonably be obtained by a city in California of comparable size to the City, insuring risks comparable to those that are the subject of said insurance coverage, but shall in no circumstance be in excess of amounts that would be reasonable in the exercise of prudence and good judgment by the City. The proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the proceeds of such insurance shall have been 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 the Lease Agreement, insurance against loss or damage to any structures constituting part of the Property by fire and lightning, with extended coverage and vandalism and malicious mischief insurance, with the Authority and the Assignee named as loss payees. Said extended coverage insurance shall, as nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage, smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an amount equal to one hundred percent (100%) of the replacement cost of such structures. Such insurance may be subject to deductible clauses of not to exceed $100,000 for anyone loss. Such insurance may be maintained as part of or in conjunction with any other fire and extended coverage insurance carried by the City and may be maintained in whole or in part in the form of insurance maintained through a joint exercise of powers authority created for such purpose or in the form of self-insurance by the City. The Net Proceeds of such insurance shall be applied as provided in Sections 5.6 and 6.2(a) hereof. -11- JT25S-30 Section 5.5. Rental Interruption Insurance. The City shall procure and maintain, or cause to be maintained, throughout the Term of the Lease Agreement, rental interruption insurance to cover loss, total or partial, of the use of any part of the Property during the Term of the Lease Agreement as a result of any of the hazards covered in the insurance required by Section 5.4 hereof, with the Authority and the Assignee named as additional insureds, in an amount at least equal to the maximum amount of Lease Payments payable in anyone year period in the case of equipment, and otherwise in any two year period. Such insurance may be carried in conjunction with, and may be subject to the same provisions as, the insurance required under Section 5.4. The City hereby assigns to the Authority all right of the City, if any, to collect and receive Net Proceeds under any of said policies, which right has been assigned by the Authority to the Assignee pursuant to the Assignment Agreement. The Net Proceeds of such insurance shall be paid to the Assignee and shall be credited towards the payment of the Lease Payments in the order in which such Lease Payments come due and payable. Section 5.6. Title Insurance. (a) The City shall provide, on the Closing Date, an ALTA title insurance policy covering, and in the amount of not less than the principal amount of the Lease Agreement, insuring the City's leasehold estate in the Property, subject only to Permitted Encumbrances. A copy of such policy shall be delivered to the Assignee. (b) The Net Proceeds of such title insurance shall be applied as provided in Section 6.2(c) hereof. Section 5.7. Insurance Net Proceeds; Form of Policies. In the event that the City is not self-insured as hereinafter provided, the City, at its expense, shall throughout the term of this Lease Agreement keep the Property insured against theft, fire, collision (in the case of vehicles) and such other risks as may be customary for each item of Property in the amounts and for the coverage set forth in this Lease Agreement, with carriers acceptable to the Authority, under a policy or policies containing a loss payable endorsement in favor of the Authority and the Assignee, and affording to the Authority such additional protection as the Authority shall reasonably require. The City shall further, at its expense, maintain in effect throughout the term of this Lease Agreement a policy or policies of comprehensive public liability and property damage insurance in the amounts and for the coverage set forth in this Lease Agreement, with carriers satisfactory to the Authority. Such insurance may be maintained as part of or in conjunction with any other insurance carried by the City and may be maintained in whole or in part through a joint exercise of powers authority created for such purpose. The policies required hereby shall provide that they may not be canceled or materially altered without at least 30 days prior written notice to the Authority and the Assignee. The City shall deliver to the Authority and the Assignee copies or other evidence satisfactory to the Authority or the Assignee, as applicable, of each insurance policy and each renewal thereof. Failure by the Authority or the Assignee to request evidence of such insurance policies or renewals, or otherwise to verify the existence of such insurance, shall not constitute a waiver of the requirements hereof. The Authority, the Assignee and the City shall jointly make claim for, receive payment of and execute and endorse all documents, checks or drafts received in payment for loss or damage under said insurance policies. -12- JT25S-31 Section 5.8. Advances. If the City shall fail to perform any of its obligations under this Article V, the Authority or the Assignee may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as soon as possible, with interest at the rate of twelve percent (12 %) per annum from the date of the advance to the date of repayment. Section 5.9. Installation of City's Equipment. 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 Property. All such items shall remain the sole property of the City in which neither the Authority nor the Assignee 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 Property 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 5.9 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 Property. Section 5.10. Liens. The City shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Property, 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 shall promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. 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 5.11. Private Activity Bond Limitation. The City shall assure that proceeds of the Lease Agreement are not so used as to cause the Lease Agreement 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. Section 5.12. 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 the Lease Agreement to be "federally guaranteed" within the meaning of section 149(b) of the Code. Section 5.13. 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 Lease Agreement. Section 5.14. No Arbitrage. The City shall not take, or permit or suffer to be taken, any action with respect to the proceeds of the Lease Agreement which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the effective date of the Lease Agreement, would have caused the Lease Agreement to be "arbitrage bonds" within the meaning of section 148 of the Code. -13- JT25S-32 Section 5.15. Maintenance of Tax-Exemption. The City shall take all actions necessary to assure the exclusion of interest with respect to the Lease Agreement from the gross income to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the effective date of the Lease Agreement. -14- JT25S-33 ARTICLE VI DAMAGE, DESTRUCTION AND EMINENT DOMAIN; USE OF NET PROCEEDS Section 6.1. Eminent Domain. If all of the Property 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 as of the day possession shall be so taken. If less than all of the Property shall be taken permanently, or if all of the Property or any part thereof shall be taken temporarily under the power of eminent domain, (1) 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 (2) there shall be a partial abatement of Lease Payments as a result of the application of the Net Proceeds of any eminent domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon by the City and the Authority, and so certified by such parties to the Assignee, such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property. Section 6.2. Application of Net Proceeds. (a) From Insurance Award. The Net Proceeds of any insurance award resulting from any damage to or destruction of any portion of the Property by fire or other casualty shall be paid by the City to the Assignee, as assignee of the Authority under the Assignment Agreement, and applied to the prepayment of Lease Payments as described in Section 10.2 hereof. (b) From Eminent Domain Award. The Net Proceeds of any eminent domain award resulting from any event described in Section 6.1 hereof shall be paid by the City to the Assignee, as assignee of the Authority under the Assignment Agreement, and applied to the prepayment of Lease Payments as described in Section 10.2 hereof. (c) From Title Insurance. The Net Proceeds of any title insurance award shall be paid by the City to the Assignee, as assignee of the Authority under the Assignment Agreement, and applied to the prepayment of Lease Payments as described in Section 10.2 hereof. Section 6.3. Abatement of Lease Payments in the Event of Damage or Destruction. Lease Payments shall be abated during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the City of the Property or any portion thereof (other than any additional buildings or improvements that do not comprise part of the Property as described in Section 5.2 hereof) to the extent to be agreed upon by the City and the Authority. The parties agree that the amounts of the Lease Payments under such circumstances shall not be less than the amounts of the unpaid Lease Payments as are then set forth in Exhibit D, unless such unpaid amounts are determined to be greater than the fair rental value of the portions of the Property not damaged or destroyed (giving due consideration to the factors identified in the last sentence of Section 4.4(d)), based upon the opinion of an MAl appraiser with expertise in valuing such properties or other appropriate method of valuation, in which event the Lease Payments shall be abated such that they represent said fair rental value. 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. -15- JT25S-34 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. Notwithstanding the foregoing, there shall be no abatement of Lease Payments under this Section 6.3 to the extent that the proceeds of rental interruption insurance are available to pay Lease Payments which would otherwise be abated under this Section 6.3, it being hereby declared that such proceeds and amounts constitute special funds for the payment of the Lease Payments. -16- JT25S-35 ARTICLE VII DISCLAIMER OF WARRANTIES; ACCESS; INDEMNIFICATION Section 7.1. Disclaimer of Warranties. NEITHER THE AUTHORITY NOR ITS ASSIGNS MAKES ANY 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 PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY. IN NO EVENT SHALL THE AUTHORITY OR ITS ASSIGNS BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THE SITE AND FACILITY LEASE OR THIS LEASE AGREEMENT FOR THE EXISTENCE, FURNISHING, FUNCTIONING OR THE CITY'S USE OF THE PROPERTY. Section 7.2. Access to the Property. The City agrees that the Authority and any Authority Representative, and the Authority's successors or assigns (including the Assignee), shall have the right at all reasonable times to enter upon and to examine and inspect the Property. The City further agrees that the Authority, any Authority Representative, and the Authority's successors or assigns (including the Assignee) shall have such rights of access to the Property as may be reasonably necessary to cause the proper maintenance of the Property in the event of failure by the City to perform its obligations hereunder. Section 7.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Authority, the Assignee 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 or from (i) the use, maintenance, condition or management of any work or thing done on the Property by the City, (ii) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (iii) any act or omission of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Property, (iv) any act or omission of any sublessee of the City with respect to the Property, or (v) the payment of costs of the Property. No indemnification is made under this Section 7.3 or elsewhere in this Lease Agreement for willful misconduct, negligence or breach of duty under this Lease Agreement by the party seeking indemnity or any of its officers, agents or employees. -17- JT25S-36 ARTICLE VIII ASSIGNMENT, SUBLEASING AND AMENDMENT Section 8.1. Assignment by the Authority. The Authority's rights 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 assigned to the Assignee, pursuant to the Assignment Agreement and the City hereby consents to such assignment. Section 8.2. Assignment and Subleasing by the City. This Lease Agreement may not be assigned by the City. The City may not sublease the Property or any portion thereof. Section 8.3. Amendment of Lease Agreement. (a) Substitution of Site or Improvements. 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 substitute other land (a "Substitute Site") and/or a substitute facility or substitute Improvements (a "Substitute Improvements") for the Site (the "Former Site"), or a portion thereof, and/ or the Improvements (the "Former Improvements"), or a portion thereof, provided that the City shall satisfy all of the following requirements (to the extent applicable) which are hereby declared to be conditions precedent to such substitution: (i) If a substitution of the Site, the City shall file with the Authority and the Assignee an amended Exhibit A to the Site Lease which adds thereto a description of such Substitute Site and deletes therefrom the description of the Former Site; (ii) If a substitution of the Site, the City shall file with the Authority and the Assignee an amended Exhibit B to this Lease Agreement which adds thereto a description of such Substitute Site and deletes therefrom the description of the Former Site; (iii) If a substitution of the Improvements, the City shall file with the Authority and the Assignee an amended Exhibit B to the Site Lease which adds thereto a description of such Substitute Improvements and deletes therefrom the description of the Former Improvements; (iv) If a substitution of the Improvements, the City shall file with the Authority and the Assignee an amended Exhibit C to this Lease Agreement which adds thereto a description of such Substitute Improvements and deletes therefrom the description of the Former Improvements; (v) The City shall certify in writing to the Authority and the Assignee that such Substitute Site and/or Substitute Improvements serve the purposes of the City, constitutes property that is unencumbered, subject to Permitted Encumbrances, it is a legal parcel, has access to a physically open street and constitutes property which the City is permitted to lease under the laws of the State; -18- JT25S-37 (vi) The City delivers to the Assignee and the Authority evidence that the Substitute Site and/ or Substitute Improvements are of equal or greater value than the Former Site and Former Improvements; (vii) The Substitute Site and/ or Substitute Improvements 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 Improvements is of the same or greater essentiality to the City as was the Former Site and/ or the Former Improvements; (x) The City shall have received the prior written consent of the Assignee to such substitution; and (xi) The City shall furnish the Authority and the Assignee with a written opinion of nationally-recognized bond counsel, which shall be an Independent Counsel, stating that such substitution does not cause the interest components of the Lease Payments to become subject to federal income taxes or State personal income taxes. (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 Assignee an amended Exhibit A to the Site Lease which describes the Site, as revised by such release; (ii) The City shall file with the Authority and the Assignee an amended Exhibit B to this Lease Agreement which describes the Site, as revised by such release; (iii) The City delivers to the Assignee and the Authority evidence that the Site, as revised by such release, is a legal parcel, has access to a physically open street and is of a value at least equal to the value of the Site as of the Oosing Date; (iv) Such release shall not cause the City to violate any of its covenants, representations and warranties made herein; (v) 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 (vi) The City shall have received the prior written consent of the Assignee to such release; and -19- JT25S-38 (b) Generally. Neither the City nor the Authority will alter, modify or cancel, or agree or consent to alter, modify or cancel this Lease Agreement, except in connection with a substitution or release permitted by this Section 8.3 or upon their mutual consent with the prior written consent of the Assignee. -20- JT25S-39 ARTICLE IX EVENTS OF DEFAULT AND REMEDIES Section 9.1. Events of Default Defined. The following shall be "Events of Default" under this Lease Agreement and the terms "Events of Default" and "Default" shall mean, whenever they are used in this Lease Agreement, anyone or more of the following events: (a) Failure by the City to pay any Lease Payment or other payment required to be paid hereunder at the time specified herein. (b) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed under this Lease Agreement, other than as referred to in clause (a) of this Section 9.1, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Assignee; provided, however, if the failure stated in the notice can be corrected, but not within the applicable period, the Authority and the Assignee shall not unreasonably withhold their consent to an extension of such time, for a period not to exceed ninety (90) days, if corrective action is instituted by the City within the applicable period and diligently pursued until the Default is corrected. (c) 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 the Federal Bankruptcy Act, as amended, 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 hereof shall have happened and be continuing, it shall be lawful for the Authority or the Assignee to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement; provided, however, that notwithstanding anything herein to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable. 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 or the Assignee may exercise any and all rights of entry and re-entry upon the Property, and also, at its option, with or without such entry, may terminate this Lease Agreement; provided, that no such termination shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. In the event of such Default and notwithstanding any re-entry by the Authority or the Assignee, 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 Assignee at the time and in the manner as herein provided, to wit: -21- JT25S-40 (a) In the event the Authority or the Assignee does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (b) hereof, 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 Assignee for any deficiency arising out of the re-leasing of the Property, or, in the event the Authority or the Assignee are unable to re- lease the Property, then for the full amount of all Lease Payments to the end of the Term of the Lease Agreement, but said Lease Payments and/ or deficiency shall be 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 the Assignee or any suit in unlawful detainer, or otherwise, brought by the Authority or the Assignee for the purpose of effecting such re-entry or obtaining possession of the Property or the exercise of any other remedy by the Authority or the Assignee. The City hereby irrevocably appoints the Authority and the Assignee as the agent and attorney-in-fact of the City to enter upon and re-lease the Property 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 Property, to place such property in storage or other suitable place in Orange County, California, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority and the Assignee from any costs, loss or damage whatsoever arising or occasioned by any such entry upon and re-leasing of the Property and the removal and storage of such property by the Authority or the Assignee or their duly authorized agents in accordance with the provisions herein contained. The City hereby waives any and all claims for damages caused or which may be caused by the Authority or the Assignee in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City that may be in or upon the Property. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority and the Assignee to re-lease the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority or the Assignee in effecting such re-Ieasing 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-Ieasing, or otherwise, but that, on the contrary, in the event of such Default by the City the right to terminate this Lease Agreement shall vest in the Authority and the Assignee to be effected in the sole and exclusive manner hereinafter provided for in paragraph (b) hereof. The City further waives the right to any rental obtained by the Authority or the Assignee in excess of the Lease Payments and payments due pursuant to Section 4.7 hereof and hereby conveys and releases such excess to the Authority or the Assignee, as applicable, as compensation to the Authority or the Assignee for their services in re-leasing the Property. (b) In an Event of Default hereunder, the Authority or the Assignee at their option may terminate this Lease Agreement and re-lease all or any portion of the Property. In the event of the termination of this Lease Agreement by the Authority or the Assignee at their option and in the manner hereinafter provided on account of Default by the City (and notwithstanding any re-entry upon the Property by the Authority or the Assignee in any manner whatsoever or the re-leasing of the Property), the City nevertheless agrees to pay to the Authority or the Assignee, as applicable, all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as is herein provided in the case of payment of Lease Payments. Any surplus received by the Authority or the Assignee from such re-leasing shall be credited -22- JT25S-41 towards the Lease Payments next coming due and payable. Neither notice to pay rent or to deliver up possession of the premises given pursuant to law nor any proceeding in unlawful detainer taken by the Authority or the Assignee shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of Default by the City shall be or become effective by operation of law, or otherwise, unless and until the Authority or the Assignee shall have given written notice to the City of its election to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property and/ or of the remainder of the Term of the Lease Agreement or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Assignee by such written notice. Section 9.3. Waiver of Statutory Remedies. Pursuant to California Civil Code section 1952.6(b), the City hereby waives, to the fullest extent permitted by law, all of the remedies for a breach of this Lease Agreement provided in sections 1951 to 1952.2, inclusive, of the California Civil Code, and contracts instead for the remedies set forth in this Article IX. Section 9.4. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority or the Assignee is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement 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 or the Assignee 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 that any party to this Lease Agreement should default under any of the provisions hereof and the non- defaulting 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 pay to the non-defaulting party the reasonable fees of such attorneys and such other expenses so incurred by the non-defaulting 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 breach hereunder. Section 9.7. Application of Proceeds. All net proceeds received from the re-lease or other disposition of the Property under this Article IX, and all other amounts derived by the Authority or the Assignee as a result of an Event of Default hereunder, shall be transferred to the Assignee promptly upon receipt thereof and after payment of all fees and expenses of the Assignee, including attorneys fees, shall be applied to the Lease Payments in order of payment date. Section 9.8. Assignee 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 Assignee, under the -23- JT25S-42 Assignment Agreement, to which assignment the City hereby consents. Such rights and remedies shall be exercised solely by the Assignee as provided in the Assignment Agreement and herein. -24- JT25S-43 ARTICLE X PREP A YMENT OF LEASE PAYMENTS Section 10.1. Prepayment Option. The Authority hereby grants an option to the City to prepay the principal component of the Lease Payments in full, by paying the aggregate unpaid principal components of the Lease Payments as set forth in Exhibit D hereto, in a prepayment amount equal to the principal amount of Lease Payments to be prepaid, without premium. Said option may be exercised on any date on and after December 1, 2002. Said option shall be exercised by the City by giving written notice to the Authority and the Assignee of the exercise of such option at least sixty (60) days prior to said date. Such option shall be exercised by depositing with said notice cash in an amount sufficient to pay the aggregate unpaid principal component of the Lease Payments on said Lease Payment Date as set forth in Exhibit D hereto, together with any Lease Payments then due but unpaid and any accrued interest to such prepayment date. Section 10.2. Mandatory Prepayment From Net Proceeds of Insurance, Title Insurance or Eminent Domain. The City shall be obligated to prepay the Lease Payments, in whole on any date or in part on any Lease Payment Date, from and to the extent of any Net Proceeds of an insurance, title insurance or condemnation award with respect to the Property. The City, the Authority and the Assignee hereby agree that such Net Proceeds shall be applied first to the payment of any delinquent Lease Payments, and thereafter shall be credited towards the City's obligations under this Section 10.2. Lease Payments due after any such partial prepayment shall be in the amounts set forth in a revised Lease Payment schedule which shall be provided by, or caused to be provided by, the City to the Assignee which is reasonably acceptable to the Assignee and which shall represent an adjustment to the schedule set forth in Exhibit D attached hereto taking into account said partial prepayment. -25- JT25S-44 ARTICLE XI MISCELLANEOUS Section 11.1. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed to have been received upon actual receipt after deposit in the United States mail in first-class form with postage fully prepaid: If to the Authority: Santa Ana Financing Authority 20 Civic Center Plaza Santa Ana, CA 92702 Attention: Executive Director Phone: (714) _-_ Fax: (714) _-_ If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92702 Attention: Phone: (714) _-_ Fax: (714)_-_ If to the Assignee: Attention: Phone: (_) _-_ Fax: (_)_-_ with a copy to Attention: Phone: (_) _-_ Fax: (_)_-_ The Authority, the City and the Assignee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent. Any party giving notice to the other pursuant to this Lease Agreement shall also give such notice to the Assignee. Section 11.2. 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 11.3. 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. -26- JT25S-45 Section 11.4. 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 or the Assignee, free and clear of any expenses, charges or set-offs whatsoever. Section 11.5. 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 Property hereby leased or intended so to be or for carrying out the expressed intentions of this Lease Agreement. Section 11.6. 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 11.7. Applicable Law. This Lease Agreement shall be governed by and construed in accordance with the laws of the State. Section 11.8. Authority and City 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 a Authority Representative and for the City by a City Representative, and each party hereto shall be authorized to rely upon any such approval or request. Section 11.9. 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. -27- JT25S-46 IN WITNESS WHEREOF, the Authority has caused this Lease Agreement to be executed in its corporate name by its duly authorized officers; and the City has caused this Lease Agreement to be executed in its name by its duly authorized officers, as of the date first above written. SANTA ANA FINANCING AUTHORITY, as Lessor By Name Title Attest: Patricia E. Healy Secretary CITY OF SANTA ANA, as Lessee By Name Title Attest: Patricia E. Healy City Clerk -28- JT25S-47 EXHIBIT A DEFINITIONS "Assignee" means , as assignee, or any successor thereto. "Assignment Agreement" means the Assignment Agreement, dated as of July 1 2005, by and between the Authority and the Assignee, together with any duly authorized and executed amendments thereto. "Authority" means the Santa Ana Financing Authority, a joint exercise of powers authority organized and existing under the laws of the State. "Authority Representative" means the Chairman, the Vice Chairman, the Executive Director, the Treasurer or any other person authorized by resolution of the Board of Directors of the Authority to act on behalf of the Authority under or with respect to the Site Lease, the Lease Agreement and the Assignment Agreement. "Bond Counsel" means (a) Quint & Thimmig LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally-recognized experience in the issuance of obligations of public entities. "Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the state in which the Assignee is located are closed or are required to close or a day on which the New York Stock Exchange is closed. "City" means the City of Santa Ana, a municipal corporation and chartered city duly organized and existing under and by virtue of the constitution and laws of the State. "City Representative" means the Mayor, the Mayor Pro Tern, the City Manager, the Finance Director, or the designee of any such official, or any other person authorized to act on behalf of the City under or with respect to the Site Lease and/ or the Lease Agreement and identified as such to the Assignee in writing. "Code" means the Internal Revenue Code of 1986. "Event of Default" means an event of default under the Lease Agreement, as defined in Section 9.1 thereof. "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 selected by the City as its fiscal year. "Independent Counsel" means an attorney duly admitted to the practice of law before the highest court of the state in which such attorney maintains an office and who is not an employee of the City, the Authority or the Assignee. Exhibit A Page 1 JT25S-48 "Improvements" means those improvements to be to be financed with the proceeds of the Lease Agreement and constructed on the Site more particularly described in Exhibit C to the Lease Agreement. "Interest Payment Date" means the 15th day of each March and September, commencing September 1, 2006. "Lease Agreement" means the Lease Agreement, dated as of July 1 2005, by and between the Authority, as lessor, and the City, as lessee, together with any duly authorized and executed amendments thereto. "Lease Payments" means all payments required to be paid by the City pursuant to Section 4.4 of the Lease Agreement, including any prepayment thereof pursuant to Article X of the Lease Agreement, which payments consist of an interest component and a principal component. "Net Proceeds," when used with respect to insurance or condemnation proceeds, means any insurance proceeds or condemnation award paid with respect to the Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof. "Permitted Encumbrances" means, as of any particular time: (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article V of the Lease Agreement, permit to remain unpaid; (b) the Assignment Agreement; (c) the Lease Agreement; (d) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (e) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Closing Date and which the City certifies in writing will not materially impair the use of the Property; and (f) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the date of recordation of the Lease Agreement (or a memorandum thereof) and to which the Assignee and the City consent in writing. "Property" means, collectively, the Site and the Improvements. "Rental Period" means each twelve-month period during the Term of the Lease Agreement commencing on March 2 in any year and ending March 1 in the next succeeding year. "Site" means that certain real property more particularly described in Exhibit A to the Site Lease and in Exhibit B to the Lease Agreement. "Site Lease" means the Site Lease, dated as of July 1 2005, by and between the City, as lessor, and the Authority, as lessee, together with any duly authorized and executed amendments thereto. "State" means the State of California. Exhibit A Page 2 JT25S-49 "Term of the Lease Agreement" means the time during which the Lease Agreement is in effect, as provided in Section 4.2 of the Lease Agreement. Exhibit A Page 3 JT25S-50 EXHIBIT B DESCRIPTION OF THE SITE All that certain real property situated in the City of Santa Ana, Orange County, State of California, described as follows: That portion of Blocks A, B, C, and D of the Ross Addition to Santa Ana as shown on the map filed in Book 3, Pages 534 and 535 of Miscellaneous Records of Los Angeles County, California, together with those portions of Fifth Street, 60 feet wide, Sixth Street, 60 feet wide, Van Ness Street, 60 feet wide, and Parton Street, 60 feet wide, all being shown on said map of the Ross Addition to Santa Ana, as abandoned by Resolution No. 69-27 of the City Council of the City of Santa Ana, a certified copy of which was recorded February 19,1969 in Book 8878, Page 863 of Official Records of said Orange County, all in the City of Santa Ana, County of Orange, State of California, described as follows: Beginning at the intersection of the centerline of Santa Ana Boulevard (108 feet wide) with the centerline of Ross Street (106 feet wide) as shown on Record of Survey 95-1031, filed in Book 149, Pages 49 and 50 of Records of Survey, Records of said County; thence South 49002'03" West 248.90 feet along said centerline of Santa Ana Boulevard; thence North 40057'57" West 54.00 feet to the northwesterly line of said Santa Ana Boulevard and the True Point of Beginning, said northwesterly line also being the northwesterly line of Parcell as described in Resolution No. 68-186 of the City Council of the City of Santa Ana recorded December 18, 1968 in Book 8819, Page 934 of Official Records of said Orange County, said point being the beginning of a curve concave northwesterly having a radius of 746.00, a radial bearing to said beginning bears South 40057'57" East; thence southwesterly along said curve and said northwesterly line 401.75 feet through a central angle of 30051'21"; thence leaving said northwesterly line North 0005'22" West 53.21 feet; thence North 54013'46" East 27.92 feet; thence North 0005'22" West 36.93 feet; thence South 54013'46" West 64.85 feet to the centerline of said Parton Street (abandoned); thence North 0005'22" West 186.31 feet along said centerline to an angle point therein; thence continuing along said centerline North 0003'00" West 310.62 feet to the intersection with the centerline of said Sixth Street (abandoned) thence North 89058'20" East 309.89 feet to an angle point therein; thence continuing along said centerline North 89057' 41" East 246.29 feet to the westerly line of Ross Street, 106 feet wide; thence South 0037'23" East 235.48 feet along said westerly line to a curve concave northwesterly having a radius of 25.00 feet; thence southerly and southwesterly along said curve 21.67 feet through a central angle of 49039'26" to the northwesterly line of said Santa Ana Boulevard; thence South 49002'03" West 213.66 feet along said northwesterly line to the True Point of Beginning. Except that portion of said land lying easterly of the following described line: Beginning at a point on the curved northwesterly line of said Santa Ana Boulevard having a radius of 746.00 feet, as described above, said point being an arc distance of 74.14 feet southwesterly from the northeasterly terminus of said curve; thence North 0037'23" West 342.65 feet; thence North 89022'37" East 66.00 feet; thence North 0037'23" West 51.08 feet to a non-tangent curve concave westerly having a radius of 33.00 feet, a radial line to said curve bears South 57047'22" East; thence northerly along said curve 19.53 feet through a central angle of 33054'20"; thence North r41'42" West 5.71 feet to a curve concave southeasterly having a radius of 18.00 feet; thence northerly and northeasterly along said curve 14.69 feet through a central angle of 46044'51"; thence North 45003'09" East 11.84 feet to a point on the centerline of said Sixth Street (abandoned). Also except that portion of said land described as follows: Beginning at the angle point in the centerline of Parton Street (abandoned) as described above; thence South 0005'22" East 23.18 feet along said centerline; thence North 89058'59" East 17.31 feet to the True Exhibit B Page 1 JT25S-51 Point of Beginning of this exception; thence continuing North 89058'59" East 136.50 feet; thence North 0001'01" West 193.00 feet; thence South 89058'59" West 136.50 feet; thence South 0001'01" East 193.00 feet to the True Point of Beginning. Said parcel contains 267,010 square feetj6.1297 acres, more or less. Exhibit B Page 2 JT25S-52 EXHIBIT C DESCRIPTION OF THE IMPROVEMENTS The Improvements consist of a three hundred (300) vehicle 3 level parking facility one hundred and twenty-four feet (124') wide by two hundred and seventy feet (270') long comprising one on grade level and two elevated levels. The structure shall be long-span, cast-in-place concrete with post-tensioned slabs and beams, cast-in-place columns, slab on grade with concrete foundations. The structure is a two bay 3 level parking facility designed for two-way traffic flow and 90-degree parking. The parking structure is designed as an above-grade "open" parking structure of Group S Division 4 Occupancy; of Type I fire resistive construction per the 2001 California Building Code. The primary use of the structure is to offset the parking lost by the sale of the adjacent property to the State Appellate Court. The ground floor will be designated for the self-parking of seventy (70) automobiles of Appellate Court Staff. 230 spaces will be provided on the two remaining elevated levels for general Civic Center parking. The northeast corner of the facility will be devoted to stairs, one elevator and the elevator machine room for the vertical circulation of pedestrians. A second stair will be located at the southwest corner of the parking facility. The vertical vehicle circulation is achieved by means of short ramps that rise one half floor level before turning and rising another half level to the next level. The short ramps are required because of the limited site available for the parking facility. The north end of the facility is depressed below grade one half level to allow vehicles entering the facility at the southwest corner at grade level to ramp up half a level a point one full level above the parking below at the north end. Vehicles entering on grade at the southeast corner will ramp down one half level to a point one full level below the parking above at the north end. Exhibit C JT25S-53 Lease Payment Date 9/1/06 3/1/07 9/1/07 3/1/08 9/1/08 3/1/09 9/1/09 3/1/10 9/1/10 3/1/11 9/1/11 3/1/12 9/1/12 3/1/13 9/1/13 3/1/14 9/1/14 3/1/15 9/1/15 3/1/16 9/1/16 3/1/17 9/1/17 3/1/18 9/1/18 3/1/19 9/1/19 3/1/20 9/1/20 3/1/21 9/1/21 3/1/22 9/1/22 3/1/23 9/1/23 3/1/24 9/1/24 3/1/25 EXHIBIT D LEASE PAYMENT SCHEDULE Principal Component Interest Component* *Interest component is computed at 4.79% per annum. Exhibit D JT25S-54 Total Lease Payment EXHIBIT E FORM OF DISBURSEMENT CERTIFICATE $ LEASE AGREEMENT Dated as of . 2005, by and between the Santa Ana Financing Authority, as Lessor, and the City of Santa Ana, as Lessee, Assigned to . as Assignee DISBURSEMENT CERTIFICATE NO. The undersigned hereby states and certifies: (i) that the undersigned is the duly appointed, qualified and acting of City of Santa Ana, a municipal corporation and charter city, organized and existing under the laws of the State of California (the IfCitylf), and as such, is familiar with the facts herein certified and is authorized to certify the sam,e on behalf of the City; (ii) that, pursuant to Section 3.2 of that certain Lease Agreement, dated as of _, 2005 (If Lease Agreement"), by and between the Santa Ana Financing Authority, as lessor (the If Authoritylf), and the City, as assigned to , as assignee (the If Assigneelf), the Assignee is hereby requested to approve the disbursement this date from the Improvement Account (as defined in Lease Agreement) to the payees designated on Exhibit A attached hereto and by this reference incorporated herein, at the addresses set forth below such payee name, the sum set forth opposite such payee, for payment or reimbursement for costs of the Improvements (as defined in Lease Agreement) as specified; (ill) that if such disbursement is for reimbursement to the City, evidence of prior payment is attached hereto; (iv) that obligations in the stated amounts have been incurred by the City and are presently due and payable and that each item thereof is a proper charge against the Improvement Account, and has not been previously paid therefrom; (v) that there has not been filed with or served upon the City notice of any lien, right to lien or attachment upon, or claim affecting the right to receive payment of, any of the amounts payable to any of the persons named in such requisition, which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen's or mechanics' liens accruing by mere operation of law; City; (vi) that the component of the Improvements for which such payment relates is satisfactory to the (vii) that the balance remaining in the Improvement Account after payment of such amounts, together with any investment income reasonably anticipated to be deposited in the Improvement Account and any other funds reasonably anticipated to be available therefor, will be sufficient to pay the costs of the Improvements; and Exhibit 0 JT25S-55 (viii) that capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Lease Agreement. Dated: CITY OF SANTA ANA By Name Title APPROVED: By Name Title Exhibit D JT25S-56 EXHIBIT A DISBURSEMENT CERTIFICATE NO. Payee Name and Address Purpose of Obligation Amount Exhibit D JT25S-57 Quint & Thimmig LLP 04/29/05 06/13/05 REIMBURSEMENT AGREEMENT by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA and the CITY OF SANTA ANA Dated as of , 2005 (Central City Redevelopment Project) 19014.06 JT25S-58 REIMBURSEMENT AGREEMENT THIS REIMBURSEMENT AGREEMENT, dated as of ,2005, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA (the" Agency") and the CITY OF SANTA ANA (the "City"); WITNESSETH: WHEREAS, the Agency is a duly constituted redevelopment agency under the laws of the State of California and pursuant to such laws has duly proceeded with redevelopment activities within the Central City Redevelopment Project (the "Project Area") within the City; and WHEREAS, the redevelopment plan for the Project Area provides for tax increment financing in accordance with the provisions of Chapter 6, Part 1 of Division 24 of the California Health and Safety Code and Section 16 of Article XVI of the Constitution of the State of California; and WHEREAS, the Agency is authorized, with the consent of the City Council of the City, to pay all or part of the value of the land for and the cost of the installation and construction of any building, facility, structure or other improvements which are publicly owned, upon a determination by the Agency and said City Council that such buildings, facilities, structures or other improvements are of benefit to the Project Area; and WHEREAS, when the value of such land or the cost of the installation and construction of such building, facility, structure or other improvement, or both, has been or will be paid or provided for initially by the City, the Agency may enter into a contract with the City under which it agrees to reimburse the City for all or part of the value of such land or all or part of the cost of such building, facility, structure or other improvement, or both, by periodic payments over a period of years; and WHEREAS, the obligation of the Agency under such contract shall constitute an indebtedness of the Agency for the purpose of carrying out the redevelopment project for the Project Area, which indebtedness may be made payable out of taxes levied in the Project Area and allocated to the Agency under subdivision (b) of section 33670 of the California Health and Safety Code, or out of any other available funds; and WHEREAS, the City has undertaken the financing of certain public parking facilities (the "Project") a portion of which will be of substantial benefit to the Project Area; and WHEREAS, the parties hereto in consideration of their mutual undertakings, past and present, herein and otherwise, desire to provide for repayment by the Agency to the City of the moneys paid as Lease Payments under and as defined in the Lease Agreement (each as hereinafter defined), entered into between the Santa Ana Financing Authority and the City in the amounts specified in Exhibit A attached hereto and incorporated herein, which Lease Agreement provided financing for the Project; and 19014.06 JT25S-59 WHEREAS, the Agency and the City have previously determined by resolution that the Project is of benefit to the Project Area; NOW, THEREFORE, in consideration of the mutual covenants herein contained it is agreed by and between the parties hereto as follows: Section 1. Definitions. Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this Reimbursement Agreement and of any amendment hereto, and of any certificate, opinion, estimate or other document herein mentioned, have the meanings herein specified. Any capitalized term not defined herein shall have the meaning given to such term in the Lease Agreement. "Agency" means the Community Redevelopment Agency of the City of Santa Ana, a redevelopment agency and public body, corporate and politic, duly organized and existing under and by virtue of the laws of the State of California. "Authority" means the Santa Ana Financing Authority, a joint exercise of powers authority, duly organized and existing under and by virtue of the laws of the State of California. "Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the state in which the Assignee is located are closed or are required to close or a day on which the New York Stock Exchange is closed. "City" means the City of Santa Ana, a general law city and municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of California. "Fiscal Year" means each twelve-month period beginning on July 1 of any year and ending on June 30 of the succeeding year, or any other twelve-month period hereafter adopted by the City as its official fiscal year period. "Law" means the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code and the acts amendatory thereof and in supplement thereto. Whenever reference is made in this Reimbursement Agreement to the Law, reference is made to the Law as in force on the date of the execution of this Reimbursement Agreement, unless the context otherwise requires. "Lease Agreement" means that certain lease entitled "Lease Agreement" by and between the Authority, as lessor, and the City, as lessee, dated as of , 2005. "Lease Payments" means all amounts paid by the City as lease payments pursuant to Section 4.4 of the Lease Agreement. "Project Area" means the Central City Redevelopment Project of the Agency. -2- JT25S-60 "Tax Increment Revenues" means all taxes allocated to, and paid into a special fund of the Agency for the Project Area pursuant to Article 6 of Chapter 6 of the Law and Section 16 of Article XVI of the Constitution of the State of California, and as provided in the redevelopment plan for the Project Area, including all payments and reimbursements, if any, to the Agency specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations, but excluding any amounts required to be paid to other taxing agencies pursuant to section 33401 of the Law and any amounts required to be used to improve the communities supply of low or moderate income housing pursuant to Section 33334.2 of the Law. Section 2. Reimbursement; Other Payments. Subject to pledges of Tax Increment Revenues heretofore or hereafter made by the Agency (this Agreement being subordinate to any such pledge), the Agency and the City agree that, to the extent necessary but only to the extent available, and not in excess of the amounts specified in Exhibit A attached hereto and incorporated herein, in any Fiscal Year, Tax Increment Revenues shall be used and applied to repay the City such portion of all current or previously unreimbursed Lease Payments made by the City to the Authority under the Lease Agreement. In addition, the Agency may apply other legally available moneys to make repayments hereunder. This Reimbursement Agreement may be amended from time to time by the parties hereto for any purpose and with any effect whatsoever. If, in any year, there are insufficient Tax Increment Revenues for the Agency to fully reimburse the City for Lease Payments made in such year, such deficiency shall be carried forward to each succeeding year until the Agency has sufficient Tax Increment Revenues to make up all Carried over amounts. Available Tax Increment Revenues shall first be used to reimburse the City for current year Lease Payments then for carried over amounts. Section 3. Default by Agency. If the Agency has available Tax Increment and shall fail to repay the City or shall fail to pay any other payment required to be paid hereunder at the time specified herein, and such failure shall continue for a period of ten (10) days, then the City or, if applicable, any assignee, shall be entitled to exercise any and all remedies available pursuant to law. Section 4. Remedies Not Exclusive. No remedy herein conferred upon the City shall be exclusive of any other remedy and each and every remedy shall cumulative and shall be in addition to every other remedy given hereunder or hereafter conferred on the City. -3- JT25S-61 IN WITNESS WHEREOF, the parties hereto have executed this Reimbursement Agreement as of the day and year first above written. COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA By Name Title Attest: Patricia E. Healy Secretary CITY OF SANTA ANA, as Lessee By Name Title Attest: Patricia E. Healy City Clerk -4- JT25S-62 Lease Payment Date 9/1/06 3/1/07 9/1/07 3/1/08 9/1/08 3/1/09 9/1/09 3/1/10 9/1/10 3/1/11 9/1/11 3/1/12 9/1/12 3/1/13 9/1/13 3/1/14 9/1/14 3/1/15 9/1/15 3/1/16 9/1/16 3/1/17 9/1/17 3/1/18 9/1/18 3/1/19 9/1/19 3/1/20 9/1/20 3/1/21 9/1/21 3/1/22 9/1/22 3/1/23 9/1/23 3/1/24 9/1/24 3/1/25 EXHIBIT A AMOUNTS TO BE REIMBURSED Principal Component Interest Component Exhibit A Page 1 JT25S-63 Total Lease Payment RESOLUTION NO. SAFA 2005-002 RESOLUTION APPROVING, AUTHORIZING AND DIRECTING PREPARATION AND EXECUTION OF CERTAIN LEASE FINANCING DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO BE IT RESOLVED BY THE SANTA ANA FINANCING AUTHORITY AS FOLLOWS: Section 1. The Board of Directors (the "Board") of the Santa Ana Financing Authority (the "Authority") finds, determines and declares as follows; A. The City of Santa Ana (the "City") proposes to finance the costs of the construction of a parking structure on City-owned property located adjacent to the proposed State Appellate Court Building in Santa Ana, California (the "Improvements"); B. The City has determined to finance the Improvements by entering into a site lease (the "Site Lease") and a lease agreement (the "Lease Agreement") with the Authority; C. The Authority intends to assign its rights under the Site Lease and the Lease Agreement to one or more purchasers to be determined (the "Assignee"); and D. The documents below specified shall be filed with the Authority and the members of the Board, with the aid of its staff, shall review said documents; Section 2. Resolution No. SAFA 2005-001 previously adopted by the Board on February 7, 2005, relating to the financing of the Improvements is hereby rescinded. Section 3. The below-enumerated documents, substantially in the forms on file with the Secretary, be and are hereby approved, and the Executive Director is hereby authorized and directed to execute said documents, with such changes, insertions and omissions as may be approved by such official, and the Secretary is hereby authorized and directed to attest to such official's signature: A. The Site Lease, by and between the City, as lessor, and the Authority, as lessee, pursuant to which the City will lease certain real property (the "Site") to the Authority; B. The Lease Agreement, by and between the Authority, as lessor, and the City, as lessee, pursuant to which the Authority will lease the Site and the Improvements back to the City; and Resolution No. SAFA 2005-002 Page 1 of 2 JT25S-64 C. An assignment agreement, by and between the Authority and the Assignee, pursuant to which the Authority will assign certain of its rights under the Lease Agreement, including its right to receive lease payments thereunder, to the Assignee. Section 4. The Executive Director, the Secretary and other officials of the Authority are hereby authorized and directed to execute such other agreements, documents and certificates as may be necessary to effect the purposes of this resolution and the lease financing herein authorized. Section 5. This Resolution shall take effect upon its adoption by the Authority Board, and the Secretary shall attest to and certify the vote adopting this Resolution. ADOPTED this 20th day of June, 2005. Miguel A. Pulido Chairperson APPROVED AS TO FORM: Joseph W. Fletcher, Authority Counsel AYES: Authoritymembers NOES: Authoritymembers ABST AI N: Authoritymembers NOT PRESENT: Authoritymembers CERTIFICATION OF ATTESTATION AND ORIGINALITY I, PATRICIA E. HEALY, Secretary of the Authority, do hereby attest to and certify the attached Resolution No. 2005-_ to be the original a resolution duly adopted by the Santa Ana Financing Authority on the 20th day of June, 2005. Date: Authority Secretary Resolution No. SAFA 2005-002 Page 2 of 2 JT25S-65 Quint & Thimmig LLP 01/31/05 04/29/05 06/13/05 AFTER RECORDA nON RETURN TO: Quint & Thimmig LLP One Embarcadero Center, Suite 2420 San Francisco, CA 94111-3737 Attention: Brian D. Quint, Esq. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE. ASSIGNMENT AGREEMENT THIS ASSIGNMENT AGREEMENT, made and entered into as of , 2005, is by and between the SANTA ANA FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California, as assignor (the " Authority"), and , as assignee (the" Assignee"); WITNESSETH: In the joint and mutual exercise of their powers, in consideration of the mutual covenants herein contained and for other valuable consideration, the parties hereto recite and agree as follows: Section 1. Recitals. (a) The City of Santa Ana (the "City"), as lessor, and the Authority, as lessee, have entered into a site lease, dated as of , 2005 (the "Site Lease"), whereby the City has leased to the Authority, and the Authority has agreed to lease from the City, certain property more particularly described in Exhibit A attached hereto (the "Site"), in the manner and on the terms set forth in the Site Lease. (b) The Authority, as lessor, and the City, as lessee, have entered into a lease agreement, dated as of , 2005 (the "Lease Agreement"), whereby the Authority has agreed to lease to the City, and the City has agreed to lease from the Authority, the Site and certain improvements to be constructed on the Site, more particularly described in Exhibit B attached hereto (the "Improvements" and, with the Site, the Property"), in the manner and on the terms set forth in the Lease Agreement, which terms include, without limitation, the obligation of the City to pay Lease Payments (as defined in the Lease Agreement) to the Authority in consideration of the City's use and enjoyment of the Property. 19014.06 JT25S-66 (c) Under the Lease Agreement, the Authority is required to cause to be deposited with the City certain sums of money to be paid to the City for the payment or reimbursement of the costs of the Improvements. (d) Each of the parties has authority to enter into this Assignment Agreement and has taken all actions necessary to authorize its officers to execute it. Section 2. Assignment. The Authority hereby transfers, assigns and sets over to the Assignee all of the Authority's rights, but none of its obligations, under the Site Lease and the Lease Agreement (excepting only the Authority's rights under Sections 5.7, 7.3 and 9.4 of the Lease Agreement), including without limitation (i) the right to receive and collect all of the Lease Payments from the City under the Lease Agreement, (ii) the right to receive and collect any proceeds of any insurance maintained thereunder and of any condemnation award rendered with respect to the Property, and (iii) the right to exercise such rights and remedies conferred on the Authority pursuant to the Lease Agreement as may be necessary or convenient (A) to enforce payment of the Lease Payments, or (B) otherwise to protect the interests of the Assignee in the event of a default by the City under the Lease Agreement. Section 3. Acceptance. The Assignee hereby accepts the assignments made herein. Section 4. Application of Proceeds. In consideration of the Assignee's right to receive a portion of the Lease Payments, as described above, the Assignee shall, on the Closing Date, transfer the amount of $ to or to the order of the Authority. Section 5. Conditions. This Assignment Agreement shall not confer rights upon the Assignee beyond those expressly provided in the Site and Facility Lease or the Lease Agreement, nor shall it impose any duties on the Assignee. The Assignee assumes no responsibility for the accuracy of the recitals herein. Section 6. Applicable Law. This Assignment Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 7. Execution in Counterparts. This Assignment Agreement 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 instrument. -2- JT25S-67 IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their duly authorized officers as of the day and year first written above. SANTA ANA FINANCING AUTHORITY By Name Title , as Assignee By Name Title -3- JT25S-68 [NOTARY ACKNOWLEDGMENTS TO BE ATTACHED] JT25S-69 EXHIBIT A DESCRIPTION OF THE SITE All that certain real property situated in the City of Santa Ana, Orange County, State of California, described as follows: That portion of Blocks A, B, C, and D of the Ross Addition to Santa Ana as shown on the map filed in Book 3, Pages 534 and 535 of Miscellaneous Records of Los Angeles County, California, together with those portions of Fifth Street, 60 feet wide, Sixth Street, 60 feet wide, Van Ness Street, 60 feet wide, and Parton Street, 60 feet wide, all being shown on said map of the Ross Addition to Santa Ana, as abandoned by Resolution No. 69-27 of the City Council of the City of Santa Ana, a certified copy of which was recorded February 19,1969 in Book 8878, Page 863 of Official Records of said Orange County, all in the City of Santa Ana, County of Orange, State of California, described as follows: Beginning at the intersection of the centerline of Santa Ana Boulevard (108 feet wide) with the centerline of Ross Street (106 feet wide) as shown on Record of Survey 95-1031, filed in Book 149, Pages 49 and 50 of Records of Survey, Records of said County; thence South 49002'03" West 248.90 feet along said centerline of Santa Ana Boulevard; thence North 40057'57" West 54.00 feet to the northwesterly line of said Santa Ana Boulevard and the True Point of Beginning, said northwesterly line also being the northwesterly line of Parcell as described in Resolution No. 68-186 of the City Council of the City of Santa Ana recorded December 18, 1968 in Book 8819, Page 934 of Official Records of said Orange County, said point being the beginning of a curve concave northwesterly having a radius of 746.00, a radial bearing to said beginning bears South 40057'57" East; thence southwesterly along said curve and said northwesterly line 401.75 feet through a central angle of 30051'21"; thence leaving said northwesterly line North 0005'22" West 53.21 feet; thence North 54013'46" East 27.92 feet; thence North 0005'22" West 36.93 feet; thence South 54013'46" West 64.85 feet to the centerline of said Parton Street (abandoned); thence North 0005'22" West 186.31 feet along said centerline to an angle point therein; thence continuing along said centerline North 0003'00" West 310.62 feet to the intersection with the centerline of said Sixth Street (abandoned) thence North 89058'20" East 309.89 feet to an angle point therein; thence continuing along said centerline North 89057'41" East 246.29 feet to the westerly line of Ross Street, 106 feet wide; thence South 0037'23" East 235.48 feet along said westerly line to a curve concave northwesterly having a radius of 25.00 feet; thence southerly and southwesterly along said curve 21.67 feet through a central angle of 49039'26" to the northwesterly line of said Santa Ana Boulevard; thence South 49002'03" West 213.66 feet along said northwesterly line to the True Point of Beginning. Except that portion of said land lying easterly of the following described line: Beginning at a point on the curved northwesterly line of said Santa Ana Boulevard having a radius of 746.00 feet, as described above, said point being an arc distance of 74.14 feet southwesterly from the northeasterly terminus of said curve; thence North 0037'23" West 342.65 feet; thence North 89022'37" East 66.00 feet; thence North 0037'23" West 51.08 feet to a non-tangent curve concave westerly having a radius of 33.00 feet, a radial line to said curve bears South 57047'22" East; thence northerly along said curve 19.53 feet through a central angle of 33054'20"; thence North 1041'42" West 5.71 feet to a curve concave southeasterly having a radius of 18.00 feet; thence northerly and northeasterly along said curve 14.69 feet through a central angle of 46044'51"; thence North 45003'09" East 11.84 feet to a point on the centerline of said Sixth Street (abandoned). Also except that portion of said land described as follows: Beginning at the angle point in the centerline of Parton Street (abandoned) as described above; thence South 0005'22" East 23.18 feet along said centerline; thence North 89058'59" East 17.31 feet to the True Exhibit A JT25S-70 Point of Beginning of this exception; thence continuing North 89058'59" East 136.50 feet; thence North 0001'01" West 193.00 feet; thence South 89058'59" West 136.50 feet; thence South 0001'01" East 193.00 feet to the True Point of Beginning. Said parcel contains 267,010 square feet/6.1297 acres, more or less. Exhibit A JT25S-71 EXHIBIT B DESCRIPTION OF THE IMPROVEMENTS The Improvements consist of a three hundred (300) vehicle 3 level parking facility one hundred and twenty-four feet (124') wide by two hundred and seventy feet (270') long comprising one on grade level and two elevated levels. The structure shall be long-span, cast-in-place concrete with post-tensioned slabs and beams, cast-in-place columns, slab on grade with concrete foundations. The structure is a two bay 3 level parking facility designed for two-way traffic flow and 90-degree parking. The parking structure is designed as an above-grade "open" parking structure of Group S Division 4 Occupancy; of Type I fire resistive construction per the 2001 California Building Code. The primary use of the structure is to offset the parking lost by the sale of the adjacent property to the State Appellate Court. The ground floor will be designated for the self-parking of seventy (70) automobiles of Appellate Court Staff. 230 spaces will be provided on the two remaining elevated levels for general Civic Center parking. The northeast corner of the facility will be devoted to stairs, one elevator and the elevator machine room for the vertical circulation of pedestrians. A second stair will be located at the southwest corner of the parking facility. The vertical vehicle circulation is achieved by means of short ramps that rise one half floor level before turning and rising another half level to the next level. The short ramps are required because of the limited site available for the parking facility. The north end of the facility is depressed below grade one half level to allow vehicles entering the facility at the southwest corner at grade level to ramp up half a level a point one full level above the parking below at the north end. Vehicles entering on grade at the southeast corner will ramp down one half level to a point one full level below the parking above at the north end. Exhibit B JT25S-72 RESOLUTION NO. CRA 2005- 004 A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AUTHORIZING AND DIRECTING THE EXECUTION AND DELIVERY OF A REIMBURSEMENT AGREEMENT IN CONNECTION WITH CERTAIN FINANCING PROCEEDINGS OF THE CITY OF SANTA ANA, AND APPROVING RELATED DOCUMENTS AND OFFICIAL ACTIONS BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The Community Redevelopment Agency of the City of Santa Ana (the "Agency") hereby finds, determines and declares as follows: A. The City of Santa Ana (the "City"), working together with the Santa Ana Financing Authority (the "Authority"), is proposing to proceed with a lease financing; B. The City proposes to finance the costs of the construction of a parking structure on City-owned property located adjacent to the proposed State Appellate Court Building in Santa Ana, California (the "Improvements"); C. For the purpose of obtaining the moneys required for such purposes, the City proposes to lease certain real property and the Improvements to be constructed thereon (collectively, the "Property"), to the Authority and to lease the Property back from the Authority under a lease agreement (the "Lease Agreement"), the payments under which will be assigned to one or more purchasers to be determined; and D. The documents below specified have been filed with the Agency and the members of the Agency, with the aid of its staff, have reviewed said documents; Section 2. The Agency hereby approves a reimbursement agreement, by and between the City and the Agency, pursuant to which the Agency will agree to reimburse the City, from tax increment revenues allocated to the Agency's Central City Redevelopment Project, for the payments to be made by the City under the Lease Agreement, in substantially the form on file with the Secretary, together with any changes therein or additions thereto deemed advisable by the Chairperson, the Executive Director or the Treasurer, whose execution thereof shall be conclusive evidence of the approval of any such changes or additions. The Chairperson, the Executive Director or the Treasurer is hereby authorized and directed for and in the name and on behalf of the Agency to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the foregoing document. Resolution No. eRA 2005-004 Page 1 of 3 JT25S-73 Section 3. The Chairperson, the Executive Director, the Treasurer, the Secretary and all other officers of the Agency are each authorized and directed in the name and on behalf of the Agency to make any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate any of the transactions contemplated by the documents approved pursuant to this Resolution. Whenever in this Resolution any officer of the Agency is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. Section 4. This Resolution shall take effect immediately upon its adoption by the Agency, and the Secretary of the Agency shall attest to and verify the vote adopting this Resolution. ADOPTED this 20th day of June, 2005. Miguel A. Pulido Chairperson APPROVED AS TO FORM: Joseph W. Fletcher, Agency Counsel AYES: Agency members NOES: Agency members ABSTAIN: Agency members NOT PRESENT: Agency members CERTIFICATION OF ATTESTATION AND ORIGINALITY Resolution No. eRA 2005-004 Page 2 of 3 JT25S-74 I, PATRICIA E. HEALY, Secretary of the Authority, do hereby attest to and certify the attached Resolution No. 2005-004 to be the original a resolution duly adopted by the Santa Ana Financing Authority on the 20th day of June, 2005. Date: Agency Secretary Resolution No. eRA 2005-004 Page 3 of 3 JT25S-75 JT25S-76