RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Nixon Peabody LLP
300 South Grand Avenue, Suite 4100
Los Angeles, California 90071
Attention: Danny Kim, Esq.
(Space above for Recorder's use)
This document is recorded for the benefit of the City of Placentia and the recording is fee -exempt under Section 6103 of the California Government Code and the recording is exempt under Section 27383 of the California Government Code and Section 11928 of the California Revenue and Taxation Code.
LEASE AGREEMENT
by and between the
PLACENTIA PUBLIC FINANCING AUTHORITY,
as Lessor
and the
CITY OF PLACENTIA,
as Lessee
relating to the
$
Placentia Public Financing Authority
Lease Revenue Bonds (Public Safety Center Project) Series 2023A Dated as of August 1, 2023
4816-4731-6694.3
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
Section 1.01 Definitions
ARTICLE II THE LEASED PROPERTY
Section 2.01
Section 2.02
Section 2.03
Section 2.04
Section 2.05
Section 2.06
Lease of the Leased Property
Quiet Enjoyment
Right of Entry and Inspection
Prohibition Against Encumbrance or Sale
Liens
Substitution or Removal of Leased Property
ARTICLE III TERM OF THE LEASE AGREEMENT
Section 3.01 Commencement of the Lease Agreement
ARTICLE IV USE OF PROCEEDS
Section 4.01 Use of Proceeds
ARTICLE V RENTAL PAYMENTS
Section 5.01 Rental Payments
Section 5.02 Annual Budgets; Reporting Requirements
Section 5.03 Application of Rental Payments
Section 5.04 Rental Abatement
Section 5.05 Prepayment of Rental Payments
Section 5.06 Obligation to Make Rental Payments
ARTICLE VI MAINTENANCE; TAXES; INSURANCE AND OTHER CHARGES Section 6.01 Maintenance of the Leased Property by the City Section 6.02 Taxes, Other Governmental Charges and Utility Charges Section 6.03 Insurance
Section 6.04 Advances
Section 6.05 Title Insurance
ARTICLE VII DAMAGE, DESTRUCTION, TITLE DEFECT AND
CONDEMNATION 13
Section 7.01 Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds 13
2 2
4 4
4 4
4 5
5 6
6 7
7 7
7 9
9 9
10 10
11 11
11 11
13 13
-i-
4816-4731-6694.3
TABLE OF CONTENTS
(continued)
Page
ARTICLE VIII DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY 14
Section 8.01 Disclaimer of Warranties 14
Section 8.02 Use of the Leased Property; Improvements 14 ARTICLE IX ASSIGNMENT AND INDEMNIFICATION 15
Section 9.01 Assignment by Authority 15
Section 9.02 Assignment by City 15
Section 9.03 Indemnification 15
ARTICLE X DEFAULT 16
Section 10.01 Default 16
ARTICLE XI MISCELLANEOUS 19
Section 11.01 Notices 19
Section 11.02 Binding Effect 19
Section 11.03 Trustee as Third Party Beneficiary 19
Section 11.04 Net Lease 19
Section 11.05 Amendments 20
Section 11.06 Discharge of City 20
Section 11.07 Partial Invalidity 21
Section 11.08 California Law 21
Section 11.09 Headings 21
Section 11.10 Execution 21
EXHIBIT A DESCRIPTION OF LEASED PROPERTY A- 1
EXHIBIT B BASE RENTAL PAYMENTS SCHEDULE B-1
4816-4731-6694.3
LEASE AGREEMENT
This Lease Agreement (this "Lease Agreement"), executed and entered into as of August 1, 2023, by and between the PLACENTIA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under and by virtue of the laws of the State of California (the "Authority"), as lessor, and the CITY OF PLACENTIA, a charter city duly organized and existing under the Constitution and laws of the State of California (the "City"), as lessee;
WITNES SETH:
WHEREAS, concurrently with the execution of this Lease Agreement, the City and the Authority are entering into a Site Lease (the "Site Lease"), dated as of August 1, 2023 (which is recorded concurrently herewith), whereby the Authority will lease certain real property and the improvements thereon or to be located thereon from the City, more particularly described in Exhibit A attached hereto (the "Real Property"), (such Real Property and the improvements thereon being collectively referred to herein as the "Leased Property"); WHEREAS, the City will then sublease the Leased Property back from the Authority pursuant to this Lease Agreement;
WHEREAS, concurrently with the execution of this Lease Agreement the Authority, the City and U.S. Bank National Association, as trustee (the "Trustee"), are entering into an Indenture, dated as of August 1, 2023 (the "Indenture"); WHEREAS, the Authority will issue its Lease Revenue Bonds (Public Safety Center Project) Series 2023A (the "Bonds"), in the aggregate principal amount of $ WHEREAS, the Bonds will be secured by the payments to be made by the City pursuant to this Lease Agreement;
WHEREAS, the City is authorized by law to sublease the Leased Property and the Leased Property is necessary and proper for public purposes; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER
VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
4816-4731-6694.3
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein. All other capitalized terms used herein without definition shall have the meanings as set forth in the Indenture.
Additional Payments
"Additional Payments" means all amounts payable by the City pursuant to Section
5.01(b) hereof.
Base Rental Payment Date
The term "Base Rental Payment Date" means the date five days preceding each Interest Payment Date.
Base Rental Payments
"Base Rental Payments" means all amounts payable by the City as Base Rental pursuant to Section 5.01(a) hereof.
Expiry Date
"Expiry Date" means June 1, 20
Insurance Consultant
"Insurance Consultant" means an individual or firm retained by the City as an independent insurance consultant, experienced in the field of risk management.
Leased Property
"Leased Property" means the Real Property and the improvements thereon (as the same may be changed from time to time by Removal or Substitution).
Lease Year
The term "Lease Year" means the period from each June 2 to and including the following June 1 during the term hereof; provided that the final Lease Year shall terminate on the Expiry Date.
Net Proceeds
The term "Net Proceeds" means any insurance or eminent domain award (including any proceeds of sale to a governmental entity under threat of the exercise of eminent domain powers), 2 4816-4731-6694.3
paid with respect to the Leased Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof.
Permitted Encumbrances
"Permitted Encumbrances" means, as of any particular time: (i) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to Section 6.02, permit to remain unpaid; (ii) the Assignment Agreement, as it may be amended from time to time; (iii) this Lease Agreement, as it may be amended from time to time; (iv) the Site Lease, as it may be amended from time to time; (v) the Indenture, as it may be amended from time to time; (vi) any right or claim of any mechanic, laborer, materialman, supplier or vendor filed or perfected in the manner prescribed by law; (vii) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the date of recordation of the Lease Agreement in the office of the County Recorder of the County of Orange; and (viii) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions, all of a non -monetary nature, established following the date of recordation of this Lease Agreement and to which the Authority and the City consent in writing and certify to the Trustee will not materially impair the ownership interests of the Authority or use of the Facilities by the City.
Real Property
"Real Property" means the real property described in Exhibit A hereto.
Removal
"Removal" means the release of all or a portion of the Leased Property from the leasehold hereof and of the Site Lease as provided in Section 2.06.
Site Lease
"Site Lease" means that certain Site Lease, executed and entered into as of August 1, 2023 (which is recorded concurrently herewith), by and between the City and the Authority, as originally executed and entered into and as it may from time to time be amended in accordance herewith and therewith.
Substitution
"Substitution" means the release of all or a portion of the Leased Property from the leasehold hereof and of the Site Lease, and the lease of substituted real property and improvements hereunder and under the Site Lease as provided in Section 2.06.
The singular form of any word used herein, including the terms defined in this Section 1.01, shall include the plural, and vice versa, unless the context otherwise requires. The use herein of a pronoun of any gender shall include correlative words of the other genders. All references herein to "Sections" and other subdivisions hereof are to the corresponding Sections or subdivisions of this Lease Agreement as originally executed; and the words "herein," "hereof," 3 4816-4731-6694.3
"hereunder" and other words of similar import refer to this Lease Agreement as a whole and not to any particular Section or subdivision hereof.
ARTICLE II
THE LEASED PROPERTY
Section 2.01 Lease of the Leased Property. The Authority hereby leases to the City, and the City hereby rents and hires from the Authority, the Leased Property, together with the right of access, ingress, and egress across Property A of the Leased Property after a certificate of occupancy has been issued for a public safety building located thereon, on the conditions and terms hereinafter set forth. The City hereby agrees and covenants that during the term hereof, except as hereinafter provided, it will use the Leased Property for public purposes so as to afford the public the benefits contemplated hereby and so as to permit the Authority to carry out its agreements and covenants contained herein and in the Indenture, and the City hereby further agrees and covenants that during the term hereof that it will not abandon or vacate the Leased Property.
Section 2.02 Ouiet Eniovment. The parties hereto mutually covenant that the City, so long as it observes and performs the agreements, conditions, covenants and terms required to be observed or performed by it contained herein and is not in default hereunder, shall at all times during the term hereof peaceably and quietly have, hold and enjoy the Leased Property without suit, trouble or hindrance from the Authority.
Section 2.03 Right of Entry and Inspection. The Authority shall have the right to enter the Leased Property and inspect the Leased Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority's rights or obligations hereunder and for all other lawful purposes.
Section 2.04 Prohibition Against Encumbrance or Sale. The City and the Authority will not create or suffer to be created any mortgage, pledge, lien, charge or encumbrance upon the Leased Property, except Permitted Encumbrances. The City and the Authority will not sell or otherwise dispose of the Leased Property or any property essential to the proper operation of the Leased Property, except as otherwise provided herein. Notwithstanding anything to the contrary herein contained, the City may assign, transfer or sublease any and all of the Leased Property or its other rights hereunder, provided that (a) the rights of any assignee, transferee or sublessee shall be subordinate to all rights of the Authority hereunder, (b) no such assignment, transfer or sublease shall relieve the City of any of its obligations hereunder, (c) the assignment, transfer or sublease shall not result in a breach of any covenant of the City contained in any other Section hereof, (d) any such assignment, transfer or sublease shall by its terms expressly provide that the fair rental value of the Leased Property for all purposes shall be first allocated to this Lease Agreement, as the same may be amended from time to time before or after any such assignment, transfer or sublease and (e) no such assignment, transfer or sublease shall confer upon the parties thereto any remedy which allows reentry upon the Leased Property unless concurrently with granting such remedy the same shall be also granted hereunder by an amendment to this Lease Agreement which shall in all instances be prior to and superior to any such assignment, transfer or sublease.
4 4816-4731-6694.3
Section 2.05 Liens. In the event the City shall at any time during the term hereof cause any improvements to the Leased Property to be constructed or materials to be supplied in or upon or attached to the Leased Property, the City shall pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon, about or relating to the Leased Property and shall keep the Leased Property free of any and all liens against the Leased Property or the Authority's interest therein. In the event any such lien attaches to or is filed against the Leased Property or the Authority's interest therein, and the enforcement thereof is not stayed or if so stayed such stay thereafter expires, the City shall cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due. If any such lien shall be reduced to final judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City shall forthwith pay and discharge or cause to be paid and discharged such judgment. The City shall, to the maximum extent permitted by law, indemnify and hold the Authority and its assignee and its directors, officers and employees harmless from, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorneys' fees) as a result of any such lien or claim of lien against the Leased Property or the Authority's interest therein.
Section 2.06 Substitution or Removal of Leased Property. (a) The City may amend this Lease Agreement and the Site Lease to substitute other real property and/or improvements (the "Substituted Property") for existing Leased Property and/or to remove real property (including undivided interests therein) and/or improvements from the definition of Leased Property, and upon compliance with all of the conditions set forth in subsection (b) below. After a substitution or removal, the part of the Leased Property for which the substitution or removal has been effected shall be released from the leasehold hereunder and under the Site Lease.
(b) Except for the removal described in Section 2.06(c) below, no substitution or removal shall take place hereunder until the City delivers to the Authority and the Trustee the following:
(1) A Certificate of the City containing a description of all or part of the Leased Property to be released and, in the event of a substitution, a description of the Substituted Property to be substituted in its place;
(2) A Certificate of the City (A) stating that the annual fair rental value of the Leased Property after a substitution or removal, in each year during the remaining term of this Lease Agreement, is at least equal to the maximum annual Base Rental Payments payable hereunder attributable to the Leased Property prior to said substitution or removal, as determined by the City on the basis of commercially reasonable evidence of the fair rental value of the Leased Property after said substitution or removal; and (B) demonstrating that the useful life of the Leased Property after substitution or removal equals or exceeds the remaining term of this Lease Agreement; 5 4816-4731-6694.3
(3) An Opinion of Counsel addressed to the City, the Authority and the Trustee to the effect that the amendments hereto and to the Site Lease contemplating substitution or removal have been duly authorized, executed and delivered and constitute the valid and binding obligations of the City and the Authority enforceable in accordance with their terms;
(4) (A) In the event of a Substitution, a policy of title insurance in an amount equal to the same proportion of the principal amount as the principal portion of the Base Rental Payments for the Substituted Property bears to the total principal portion of the Base Rental Payments payable hereunder, insuring the City's leasehold interest in the Substituted Property (except any portion thereof which is not real property) subject only to Permitted Encumbrances, together with an endorsement thereto making said policy payable to the Trustee for the benefit of the Owners of the Bonds, and (B) in the event of a partial Removal, evidence that the title insurance in effect immediately prior thereto is not affected;
(5) In the event of a Substitution, an opinion of the City Attorney of the City to the effect that the exceptions, if any, contained in the title insurance policy referred to in (4) above do not interfere with the beneficial use and occupancy of the Substituted Property described in such policy by the City for the purposes of leasing or using the Substituted Property; and
(6) Evidence that the City has complied with the covenants contained in clauses (1) and (2) of Section 6.03 hereof with respect to the Substituted Property. (c) Upon the issuance of a certificate of occupancy for the public safety center being constructed at the City's corporate yard located at 2999 E. La Jolla Avenue, Anaheim, California 92806, the Real Property shall automatically be modified as set forth in Exhibit A.
ARTICLE III
TERM OF THE LEASE AGREEMENT
Section 3.01 Commencement of the Lease Agreement. The effective date of this Lease Agreement is the Closing Date, and the term of this Lease Agreement shall expire on the later of (i) the Expiry Date; (ii) the date the last Base Rental Payment is made under the provisions hereof; or (iii) the date of discharge of all of the Bonds pursuant to Article X of the Indenture. Notwithstanding the foregoing, the term of this Lease Agreement shall automatically be extended for a period of ten (10) years, if, on the Expiry Date, the Base Rental Payments have not been fully paid or prepaid and any Additional Payment have not paid in full, and shall terminate on the date when the Base Rental Payments and Additional Payments have been fully paid or prepaid in accordance with the terms hereof.
6 4816-4731-6694.3
ARTICLE IV
USE OF PROCEEDS
Section 4.01 Use of Proceeds. The parties hereto agree that the proceeds of the Bonds will be used to finance the Project and to pay costs of issuance of the Bonds, as more fully set forth in the Indenture.
ARTICLE V
RENTAL PAYMENTS
Section 5.01 Rental Payments. The City agrees to pay to the Authority, its successors or assigns, without deduction or offset of any kind, as rental for the use and occupancy of the Leased Property, the following amounts at the following times:
(a) Base Rental. Subject to the immediately following sentence, the City shall pay to the Authority rental hereunder as Base Rental Payments for the use and occupancy of the Leased Property for each Lease Year or portion thereof, at the times and in the amounts set forth in the Base Rental Payment Schedule attached hereto as Exhibit B, and made a part hereof.
The interest components of the Base Rental Payments shall be paid by the City as and constitute interest paid on the principal components of the Base Rental Payments to be paid by the City hereunder. The obligation to make the Base Rental Payments set forth on Exhibit B attached hereto shall commence as of the Closing Date.
If the term of this Lease Agreement shall have been extended pursuant to Section 3.01 hereof, Base Rental Payment installments shall continue to be payable on the Base Rental Payment Dates, continuing to and including the date of termination of this Lease Agreement. Upon such extension of this Lease Agreement, the City shall deliver to the Trustee a Certificate setting forth the extended rental payment schedule, which schedule shall establish the Base Rental Payments at an amount sufficient to pay all unpaid principal and interest on the Bonds.
(b) Additional Payments. The City shall also pay in addition to the Base Rental Payments, to the Authority or the Trustee, as hereinafter provided, such amounts ("Additional Payments") in each year as shall be required for the payment of all costs and expenses incurred in connection with the execution, performance or enforcement of this Lease Agreement or the assignment hereof, the Indenture, or the respective interests in the Leased Property and the lease of the Leased Property by the Authority to the City hereunder, including but not limited to all fees, costs and expenses and all administrative costs of the Authority relating to the Leased Property including, without limiting the generality of the foregoing, salaries and wages of employees, overhead, insurance premiums, taxes and assessments (if any), rebate payments, expenses, compensation and indemnification of the Trustee (to the extent not paid or otherwise provided for out of the proceeds of the sale of the Bonds), fees of auditors, accountants, attorneys or engineers, 7 4816-4731-6694.3
insurance premiums, and all other reasonable and necessary administrative costs of the Authority or charges required to be paid by it to comply with the terms of the Bonds or the Indenture.
Such Additional Payments shall be billed to the City by the Authority or the Trustee from time to time. Amounts so billed shall be paid by the City within sixty (60) days after receipt of the bill by the City.
Any taxes levied against the Authority with respect to the Leased Property, the fees of the Trustee, and any other expenses directly attributable to the Leased Property shall be included in the Additional Payments payable hereunder. Any taxes levied against the Authority with respect to real property other than the Leased Property, the fees of any trustee or paying agent under any resolution securing bonds of the Authority or any Indenture other than the Indenture, and any other expenses directly attributable to any facilities other than the Leased Property shall not be included in the administrative costs of the Leased Property and shall not be paid from the Additional Payments payable hereunder.
Any expenses of the Authority not directly attributable to any particular project of the Authority shall be equitably allocated among all such projects, including the Leased Property, in accordance with sound accounting practice. In the event of any question or dispute as to such allocation, the written opinion of an independent firm of certified public accountants, employed by the Authority to consider the question and render an opinion thereon, shall be final and conclusive determination as to such allocation. The Trustee may conclusively rely upon a Certificate of the Authority in making any determination that costs are payable as Additional Payments hereunder, and shall not be required to make any investigation as to whether or not the items so requested to be paid are expenses of operation of the Leased Property.
(c) Consideration.
(i) Such payments of Base Rental Payments for each Lease Year or portion thereof during the term of this Lease Agreement shall constitute, together with the Additional Payments, the total amount due for such Lease Year or portion thereof and shall be paid or payable by the City for and in consideration of the right of the use and possession of, and the continued quiet use and enjoyment of, the Leased Property. On the Closing Date, the City shall deliver a certificate to the Authority and the Trustee, which shall set forth the annual fair rental value of the Leased Property. The parties hereto have agreed and determined that the annual fair rental value of the Leased Property is not less than the maximum Base Rental Payments payable hereunder in any year. In making such determinations of annual fair rental value, consideration has been given to a variety of factors including the replacement costs of the existing improvements on the Leased Property, other obligations of the parties under this Lease Agreement, the uses and purposes which may be served by the improvements on the Leased Property and the benefits therefrom which will accrue to the City and the general public. (ii) Notwithstanding anything to the contrary herein contained, this Lease Agreement may not be amended in a manner such that the sum of Base 8 4816-4731-6694.3
Rental Payments, including Base Rental Payments payable pursuant to such amendment, in any year is in excess of the annual fair rental value of the Leased Property and other land and improvements leased to the City hereunder. (d) Payment; Credit. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the corporate trust office of the Trustee in Los Angeles, California, or such other place as the Authority shall designate. Any such installment of rental accruing hereunder which shall not be paid when due shall remain due and payable until received by the Trustee. Notwithstanding any dispute between the City and the Authority, the City shall make all rental payments when due, without deduction or offset of any kind, and shall not withhold any rental payments pending the final resolution of any such dispute. In the event of a determination that the City was not liable for said rental payments or any portion thereof, said payments or excess of payments, as the case may be, shall, at the option of the City, be credited against subsequent rental payments due hereunder or be refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section 5.01(d) on any date shall be reduced to the extent of available amounts on deposit on such date in the Revenue Fund, the Interest Fund or the Principal Fund. Any payment scheduled to be made on a date which is not a Business Day shall be made on the next succeeding Business Day.
Section 5.02 Annual Budgets; Reporting Requirements. The City covenants to take such action as may be necessary to include all Base Rental Payments and Additional Payments due under this Lease Agreement in its operating budget for each fiscal year commencing after the date hereof (an "Operating Budget") and to make all necessary appropriations for such Base Rental Payments and Additional Payments.
Section 5.03 Annlication of Rental Payments. All Base Rental Payments received shall be applied first to the interest components of the Base Rental Payments due hereunder, then to the principal components (including any prepayment premium components) of the Base Rental Payments due hereunder and thereafter to all Additional Payments due hereunder, but no such application of any payments which are less than the total rental due and owing shall be deemed a waiver of any default hereunder.
Section 5.04 Rental Abatement. Except to the extent of (a) amounts held by the Trustee in the Revenue Fund, (b) amounts received in respect of rental interruption insurance, and (c) amounts, if any, otherwise legally available to the Trustee for payments in respect of the Bonds, during any period in which, by reason of material damage, destruction, title defect, or condemnation, there is substantial interference with the use and possession by the City of any portion of the Leased Property, Based Rental Payments due hereunder with respect to the Leased Property shall be abated to the extent that the annual fair rental value of the portion of the Leased Property in respect of which there is no substantial interference is less than the annual Base Rental Payments, in which case Base Rental Payments shall be abated only by an amount equal to the difference. In the event the City shall assign, transfer or sublease any or all of the Leased Property or other rights hereunder, as permitted by Section 2.04 hereof, for purposes of determining the annual fair rental value available to pay Base Rental Payments, annual fair rental value of the Leased Property shall first be allocated to this Lease Agreement as provided in clause (d) of Section 9 4816-4731-6694.3
2.04 hereof. Any abatement of Base Rental Payments pursuant to this Section shall not be considered an Event of Default as defined in Article X hereof. The City waives the benefits of Civil Code Sections 1932(2) and 1933(4) and any and all other rights to terminate this Lease Agreement by virtue of any such interference and this Lease Agreement shall continue in full force and effect. Such abatement shall continue for the period commencing with the date of such damage, destruction, title defect or condemnation and ending with the substantial completion of the work of repair or replacement of the portions of the Leased Property so damaged, destroyed, defective or condemned.
In the event that rental is abated, in whole or in part, pursuant to this Section due to damage, destruction, title defect or condemnation of any part of the Leased Property and the City is unable to repair, replace or rebuild the Leased Property from the proceeds of insurance, if any, the City agrees to apply for and to use its best efforts to obtain any appropriate state and/or federal disaster relief in order to obtain funds to repair, replace or rebuild the Leased Property.
Section 5.05 Prepayment of Rental Payments. The City may prepay, from eminent domain proceeds or net insurance proceeds received by it pursuant to Section 7.01 hereof, all or any portion of the components of Base Rental Payments payable hereunder relating to any portion of the Leased Property then unpaid, in whole on any date, or in part on any date in integral multiples of an Authorized Denomination so that the aggregate annual amounts of principal components of Base Rental Payments payable under this Lease Agreement represented by the Bonds which shall be payable after such prepayment date shall each be in an integral multiple of an Authorized Denomination and shall be as nearly proportional as practicable to the aggregate annual amounts of principal components of Base Rental Payments payable under this Lease Agreement represented by the Bonds.
The City may prepay, from any source of available moneys pursuant to Section 4.01(b) of the Indenture, all or any part (in an integral multiple of an Authorized Denomination) of the principal components of Base Rental Payments payable under this Lease Agreement then unpaid so that the aggregate annual amounts of principal components of Base Rental Payments under this Lease Agreement which shall be payable after such prepayment date shall be as nearly proportional as practicable to the aggregate annual amounts of principal components represented by the Bonds unpaid prior to the prepayment date, at a prepayment amount equal to the principal component prepaid plus accrued interest thereon to the date of prepayment plus any applicable premium.
Before making any prepayment pursuant to this Section, at least 45 days before the prepayment date the City shall give written notice to the Authority and the Trustee describing such event, specifying the order of Principal Payment Dates and specifying the date on which the prepayment will be made, which date shall be not less than 30 nor more than 60 days from the date such written notice is given to the Authority and the Trustee.
Section 5.06 Obligation to Make Rental Payments. The agreements and covenants on the part of the City contained herein 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 10 4816-4731-6694.3
of such officials to enable the City to carry out and perform the agreements and covenants contained herein agreed to be carried out and performed by the City.
THE OBLIGATION OF THE CITY TO MAKE BASE RENTAL PAYMENTS
AND TO PAY ADDITIONAL PAYMENTS DOES NOT CONSTITUTE AN OBLIGATION OF
THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF
TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. NEITHER THE BONDS NOR THE OBLIGATION TO MAKE BASE RENTAL
PAYMENTS AND TO PAY ADDITIONAL PAYMENTS CONSTITUTES AN
INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL
SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.
ARTICLE VI
MAINTENANCE; TAXES;
INSURANCE AND OTHER CHARGES
Section 6.01 Maintenance of the Leased Property by the City. The City agrees that, at all times during the term hereof, it will, at its own cost and expense, maintain, preserve and keep the Leased Property and every portion thereof in good repair, working order and condition and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Authority shall have no responsibility in any of these matters or for the making of additions or improvements to the Leased Property.
Section 6.02 Taxes, Other Governmental Charges and Utility Charges. The parties hereto contemplate that the Leased Property will be used for public purposes by the City and, therefore, that the Leased Property will be exempt from all taxes presently assessed and levied with respect to real and personal property, respectively. In the event that the use, possession or acquisition by the City or the Authority of the Leased Property is found to be subject to taxation in any form, the City will pay during the term hereof, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Leased Property and any other property acquired by the City in substitution for, as a renewal or replacement of, or a modification, improvement or addition to, the Leased Property, as well as all gas, water, steam, electricity, heat, power, air conditioning, telephone, utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Leased Property; provided, that with respect to any governmental charges or taxes that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are accrued during such time as this Lease Agreement is in effect.
Section 6.03 Insurance. The City shall secure and maintain or cause to be secured and maintained at all time with insurers of recognized responsibility all coverage on the Leased Property required by this Section 6.03. Such insurance shall consist of:
(1) standard commercial general liability insurance policy or policies or other comparable coverage form in protection of the City and its respective members, officers, agents, employees and assigns. Said policy or policies will provide for 11 4816-4731-6694.3
indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Leased Property should the City be legally liable. Such policy or policies must provide coverage with limits and subject to such deductibles as the City will deem adequate and prudent, and in all events in form and amount (including any deductibles). Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid.
(2) property insurance against loss or damage to all of the buildings situated on the Leased Property and owned by the City, in an amount at least equal to the lesser of the replacement value of the insured buildings and the aggregate principal amount of the Base Rental Payments outstanding. Such insurance must, as nearly as practicable, cover loss or damage by all "special form" perils. Earthquake insurance will only be carried if available from reputable insurers at a reasonable cost as determined by the Finance Director of the City. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, a self- insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Section
7.01. (3) So long as any Bonds are Outstanding, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Leased Property and the improvements situated thereon as a result of any of the hazards covered in the insurance required by Section 6.03(2), in an amount at least equal to the maximum Base Rental Payments coming due and payable during any immediately succeeding 24 month period.
Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such rental interruption insurance shall not be self-insured by the City. The City will apply the Net Proceeds of such insurance towards the payment of the Base Rental Payments allocable to the insured improvements as the same become due and payable.
(4) If required by applicable California law, the City shall carry worker's compensation insurance covering all employees on, in, near or about the Leased Property and, upon request, shall furnish to the Authority certificates evidencing such coverage throughout the Term of this Lease Agreement. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance
12 4816-4731-6694.3
All insurance policies (or riders) required by this Section 6.03 and provided by third party insurance carriers shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten (10) days before the cancellation or revision becomes effective. Each insurance policy or rider required by Sections
6.03 (1), 6.03(2) and 6.03(3) and provided by third party insurance carriers shall name the City as an insured party. Prior to the Closing Date, the City will provide policies (and riders and endorsements, if applicable) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Trustee evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article VI unless such insurance is no longer obtainable, in which event the City shall notify the Trustee of such fact.
Section 6.04 Advances. In the event the City shall fail to maintain the full insurance coverage required hereby or shall fail to keep the Leased Property in good repair and operating condition, the Authority may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by the Authority shall become Additional Payments, which amounts the City agrees to pay within 30 days of a written request therefor, together with interest thereon at the maximum rate allowed by law.
Section 6.05 Title Insurance. The City covenants and agrees to deliver or cause to be delivered to the Trustee on the Closing Date a CLTA or ALTA leasehold owner's policy or policies, or a commitment for such policy or policies, with respect to the Leased Property with liability in the aggregate amount of the principal component of all Base Rental Payments payable hereunder. Such policy or policies, when issued, shall name the Trustee as the insured and shall insure the leasehold estate of the City in the Leased Property subject only to such exceptions as do not materially affect the City's right to the use and occupancy of the Leased Property.
ARTICLE VII
DAMAGE, DESTRUCTION, TITLE DEFECT AND CONDEMNATION
Section 7.01 Damage, Destruction, Title Defect and Condemnation; Use of Net Proceeds. If prior to the termination of the term hereof (a) the Leased Property or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty; or (b) title to, or the temporary use of, the Leased Property or any portion thereof or the estate of the City or the Authority in the Leased Property or any portion thereof is defective or shall be taken under the exercise of the power of eminent domain by any governmental body or by any person or firm or Authority acting under governmental authority, then the City and the Authority will cause the net proceeds of any insurance claim or condemnation award to be applied to the prompt repair, restoration, modification, improvement or replacement of the damaged, destroyed, defective or condemned portion of the Leased Property, and any balance of the net proceeds remaining after such work has been completed shall be paid to the City; provided, that the City, at its option and 13 4816-4731-6694.3
provided the proceeds of such insurance or condemnation award together with any other moneys then available for the purpose are at least sufficient to prepay the aggregate annual amounts of principal and interest components of the Base Rental Payments due hereunder attributable to the portion of the Leased Property so destroyed, damaged, defective or condemned (determined by reference to the proportion which the annual fair rental value of the destroyed, damaged, defective or condemned portion thereof bears to the annual fair rental value of the Leased Property), may elect not to repair, reconstruct or replace the damaged, destroyed, defective or condemned portion of the Leased Property and thereupon shall cause said proceeds to be used for the redemption of Outstanding Bonds pursuant to the provisions of Section 4.01(a) of the Indenture. Notwithstanding any other provision herein, the City shall only prepay less than all of the principal component of the then -remaining Base Rental Payments if the annual fair rental value of the Leased Property after such damage, destruction, title defect or condemnation is at least equal to the aggregate annual amount of the principal and interest components of the Base Rental Payments not being prepaid.
In the event that the proceeds, if any, of said insurance or condemnation award are insufficient either to (i) repair, rebuild or replace the Leased Property so that the fair rental value of the Leased Property would be at least equal to the Base Rental Payments or (ii) to redeem all the Outstanding Bonds, both as provided in the preceding paragraph, then the City may, in its sole discretion, budget and appropriate an amount necessary to effect such repair, rebuilding or replacement or prepayment; provided that the failure of the City to so budget and/or appropriate shall not be a breach of or default under this Lease Agreement.
ARTICLE VIII
DISCLAIMER OF WARRANTIES;
VENDOR'S WARRANTIES; USE OF THE LEASED PROPERTY
Section 8.01 Disclaimer of Warranties. NEITHER THE TRUSTEE NOR THE
AUTHORITY MAKES ANY AGREEMENT, WARRANTY OR REPRESENTATION, EITHER
EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION,
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE LEASED PROPERTY, OR WARRANTY WITH RESPECT THERETO. THE CITY
ACKNOWLEDGES THAT NEITHER THE TRUSTEE NOR THE AUTHORITY IS A
MANUFACTURER OF ANY PORTION OF THE LEASED PROPERTY OR A DEALER
THEREIN, THAT THE CITY LEASES THE LEASED PROPERTY AS -IS, IT BEING AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the existence, furnishing, functioning or the City's use of the Leased Property as provided hereby.
Section 8.02 Use of the Leased Property; Improvements. The City will not use, operate or maintain the Leased Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. The City shall provide all permits and licenses, if any, necessary for the use of the Leased Property. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each portion of the Leased Property) with all laws of the jurisdictions in which its operations involving any portion of the Leased Property may extend and any legislative, executive, 14 4816-4731-6694.3
administrative or judicial body exercising any power or jurisdiction over the Leased Property; provided, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the City adversely affect the estate of the Authority in and to the Leased Property or its interest or rights hereunder.
ARTICLE IX
ASSIGNMENT AND INDEMNIFICATION
Section 9.01 Assignment by Authority. The parties understand that certain of the rights of the Authority hereunder and under the Site Lease will be assigned to the Trustee pursuant to the Assignment Agreement, and accordingly the City agrees to make all payments due hereunder to the Trustee, notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether arising from a breach hereof or otherwise) that the City may from time to time have against the Authority. The City agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by the Authority or the Trustee to protect their interests in the Leased Property during the term hereof.
Section 9.02 Assignment by City. This Lease Agreement and the interest of the City in the Leased Property may not be assigned or encumbered by the City except as permitted by Section 2.04 hereof.
Section 9.03 Indemnification. The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Authority and its directors, officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the issuance of the Bonds, the entering into of this Lease Agreement, the acquisition, construction, installation and use of the Leased Property and each portion thereof or any accident in connection with the operation, use, condition or possession of the Leased Property or any portion thereof resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the City or the Authority; any claim arising out of the use, presence, storage, disposal or release of any Hazardous Substances on or about the Leased Property; any claim for patent, trademark or copyright infringement; and any claim arising out of strict liability in tort. The indemnification arising under this Section 9.03 shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason. The City and the Authority mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following the learning thereof by such party. 15 4816-4731-6694.3
ARTICLE X
DEFAULT
Section 10.01 Default.
(a) The following events shall be "Events of Default" under this Lease Agreement and the terms "Event of Default" and "Default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events:
(1) The City shall fail to deposit with the Trustee any Base Rental Payment required to be so deposited by the close of business on the day such deposit is required pursuant to Section 5.01(a) hereof, provided, that the failure to deposit any Base Rental Payments abated pursuant to Section 5.04 hereof shall not constitute an Event of Default;
(2) The City shall fail to pay any item of Additional Payments when the same shall become due and payable pursuant to Section 5.01(b) hereof; or (3) The City shall breach any other terms, covenants or conditions contained herein or in the Indenture, and shall fail to remedy any such breach with all reasonable dispatch within a period of 30 days after written notice thereof from the Authority to the City; provided, however, that if the failure stated in the notice cannot be corrected within such period, then the Authority shall not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the City within such period and is diligently pursued until the default is corrected. (b) Upon the happening of any of the Events of Default specified in Section 10.01(a) or (d) hereof, it shall be lawful for the Authority or its assignee, subject to the terms of this Lease Agreement, to exercise any and all remedies available or granted to it pursuant to law or hereunder; provided, however, that notwithstanding anything herein or in the Indenture to the contrary, there shall be no right under any circumstances to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable. After the occurrence of an event of default hereunder, the City will surrender possession of the Leased Property to the Authority, if requested to do so by the Authority, or by the Trustee or the Owners in accordance with the provisions of the Indenture. (1) No Termination: Repossession and Reletting on Behalf of City. In the event the Authority does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (2) hereof, the Authority with the consent of the City, which consent is irrevocably given, may repossess the Leased Property and relet them for the account of the City, in which event the City's obligation will continue to accrue from year to year in accordance with the Lease and the City will continue to receive the value of the use of the Leased Property from year to year in the form of credits against its obligation to pay Base Rental Payments. The obligations of the City shall remain the same as prior to such default to pay Base Rental Payments whether the Authority re-enters or not. The City agrees to and shall remain liable for the payment of all Base Rental Payments 16 4816-4731-6694.3
and the performance of all conditions contained herein and shall reimburse the Authority for any deficiency arising out of the reletting of the Leased Property, or, in the event the Authority is unable to relet the Leased Property, then for the full amount of all Base Rental Payments to the end of the term of this Lease Agreement, but said Base Rental Payments and/or deficiency shall be payable only at the same time and in the same manner as provided above for the payment of Base Rental Payments hereunder, notwithstanding such repossession by the Authority or any suit, brought by the Authority for the purpose of effecting such repossession of the Leased Property or the exercise of any other remedy by the Authority. The City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to repossess and relet the Leased Property in the event of default by the City in the performance of any covenants contained herein to be performed by the City and to remove (any removal to be done with reasonable prudence) all personal property connected to or made a part of the Leased Property, to place such property in storage or other suitable place in the City of Placentia, for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising or occasioned by any such repossession and reletting of the Leased Property. The City hereby waives any and all claims for damages caused or which may be caused by the Authority in repossessing the Leased Property as provided herein and all claims for damages that may result from the destruction of or the injury to the Leased Property and all claims for damage to or loss of any property belonging to the City that may be in or upon the Leased Property.
The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to relet the Leased Property in the event of such repossession without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such reletting shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such reletting is made or the terms and conditions of such reletting 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 to be effected in the sole and exclusive manner provided for in subparagraph (2) below. The City further waives the right to any rental obtained by the Authority in excess of the Base Rental Payments and hereby conveys and releases such excess to the Authority as compensation to the Authority for its services in reletting the Leased Property. In the event that the liability of the City under this subsection is held to constitute indebtedness or liability in any year exceeding the income and revenue provided for such year, the Authority, or the Trustee or the Owners as assignees of the Authority, shall not exercise the remedies provided in this subsection. (2) Termination: Repossession and Reletting. In the event of the termination of this Lease Agreement by the Authority at its option and in the manner hereinafter provided on account of default by the City (and notwithstanding any repossession of the Leased Property by the Authority in any manner whatsoever or the sale or reletting of the Leased Property), the City nevertheless agrees to pay to the Authority all costs, losses or damages, but not Base Rental Payments, howsoever arising or occurring payable at the same time and in the same manner as is provided herein in the case of payment of Base Rental Payments. Any proceeds of the reletting or other disposition of the Leased Property or the sale of the improvements located on the Leased Property by the 17 4816-4731-6694.3
Authority shall, after payment of the fees and expenses of the Trustee and other Additional Payments, be deposited into the Revenue Fund and be applied in accordance with the provisions of the Indenture. Any surplus received by the Authority from such sale or reletting shall be the absolute property of the Authority and the City shall have no right thereto, nor shall the City be entitled to any credit in the event of a surplus in the rentals received by the Authority for the Leased Property. Neither notice to pay rent or to deliver up possession of the Leased Property given pursuant to law nor any proceeding taken by the Authority to recover possession of the Leased Property shall by 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 shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Leased Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. No such termination shall be effected whether by operation of law or acts of the parties hereto, except only in the manner herein expressly provided.
(c) The Authority expressly waives the right to receive any amount from the City pursuant to Section 1951.2(a)(3) of the California Civil Code. (d) In addition to any Event of Default resulting from breach by the City of any agreement, condition, covenant or term hereof, if the City's interest herein or any part thereof assigned, sublet or transferred without the written consent of the Authority (except as otherwise permitted by Section 2.04 hereof), either voluntarily or by operation of law; or the City or any assignee shall file any petition or institute any proceedings under any act or acts, state or federal, dealing with or relating to the subject of bankruptcy or insolvency or under any amendment of such act or acts, either as a bankrupt or as an insolvent or as a debtor or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of its debts or obligations, or offers to its creditors to effect a composition or extension of time to pay its debts, or asks, seeks or prays for a reorganization or to effect a plan of reorganization or for a readjustment of its debts or for any other similar relief, or if the City shall make a general or any assignment for the benefit of its creditors; or the City shall abandon or vacate the Leased Property or any portion thereof (except as permitted by Section 2.04 hereof); then in each and every such case the City shall be deemed to be in default hereunder. (e) Neither the City nor the Authority shall be in default in the performance of any of its obligations hereunder (except for the obligation to make Base Rental Payments pursuant to Section 5.01 hereof) unless and until it shall have failed to perform such obligation within 30 days after notice by the City of the Authority, as the case may be, to the other party properly specifying wherein it has failed to perform such obligation. (f) The City and Authority and its successors and assigns shall honor the exclusive rights of the City to use the Leased Property. 18 4816-4731-6694.3
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices. All written notices to be given hereunder shall be given by first class mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the Authority:
Placentia Public Financing Authority
401 E. Chapman Avenue
Placentia, California 92870
Attention: Executive Director
If to the City:
City of Placentia
401 E. Chapman Avenue
Placentia, California 92870
Attention: City Administrator
If to the Trustee:
U.S. Bank National Association
633 West 5th Street, 24th Floor
Los Angeles, California 90071
Attention: Global Corporate Trust
Section 11.02 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 11.03 Trustee as Third Party Beneficiary. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third -party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.
Section 11.04 Net Lease. It is the purpose and intent of the Authority and the City that Base Rental Payments hereunder shall be absolutely net to the Authority so that this Lease Agreement shall yield to the Authority the Base Rental Payments, free of any charges, assessments or impositions of any kind charged, assessed or imposed on or against the Leased Property, and without counterclaim, deduction, defense, deferment or set-off by the City except as herein specifically otherwise provided. The Authority shall not be expected or required to pay any such charge, assessment or imposition, or be under any obligation or liability hereunder except as herein expressly set forth, and all costs, expenses and obligations of any kind relating to the maintenance and operation of the Leased Property which may arise or become due during the term of this Lease 19 4816-4731-6694.3
Agreement shall be paid by the City. This Lease Agreement shall be deemed and construed to be a "Triple -Net Lease."
Section 11.05 Amendments. This Lease Agreement may be amended in writing as may be mutually agreed by the Authority and the City, subject to the written consent of the Trustee; provided, that no such amendment which materially adversely affects the rights of the Owners shall be effective unless it shall have been consented to by the Owners of more than 50% in principal amount of the Bonds Outstanding, and provided further, that no such amendment shall (a) extend the payment date of any Base Rental Payment, or reduce the interest, principal or prepayment premium component of any Base Rental Payment, without the prior written consent of the Owner of each Bond so affected, or (b) reduce the percentage of the principal amount of the Bonds Outstanding the consent of the Owners of which is required for the execution of any amendment hereof.
This Lease Agreement and the rights and obligations of the Authority and the City hereunder may also be amended or supplemented at any time by an amendment hereof or supplement hereto which shall become binding upon execution without the written consents of any Owners, and only to the extent permitted by law and only for any one or more of the following purposes:
(a) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein and other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein to or conferred herein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners;
(b) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith, and which shall not materially adversely affect the interests of the Owners;
(c) to effect a substitution or removal in accordance with Section 2.06 hereof; or
(d) to make any other addition, amendment or deletion which does not materially adversely affect the interests of the Owners.
Section 11.06 Discharge of City. Upon the payment of all Base Rental Payments and Additional Payments payable hereunder, all of the obligations of the City hereunder shall thereupon cease, terminate and become void and shall be discharged and satisfied; provided, however, if any Outstanding Bonds shall be deemed to have been paid by virtue of a deposit of Base Rental Payments hereunder pursuant to Section 10.01(b) of the Indenture, then the obligation of the City hereunder to make Base Rental Payments hereunder shall continue in full force and effect until the Outstanding Bonds so deemed paid have in fact been paid, but such payments shall be made solely and exclusively from moneys and securities deposited with the Trustee as 20 4816-4731-6694.3
contemplated by Section 10.01(b) of the Indenture, and that shall be the sole source of satisfaction of the City's obligation to make Base Rental Payments. The time period for giving notice by the City to the Authority and the Trustee specified in the third paragraph of Section 5.05 hereof shall not apply incident to the payment to the Owners of all Outstanding Bonds in accordance with Section 10.01, including Section 10.01(b), of the Indenture.
Section 11.07 Partial Invalidity. If any one or more of the agreements, conditions, covenants or terms hereof shall to any extent be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding or order or decree of which becomes final, none of the remaining agreements, conditions, covenants or terms hereof shall be affected thereby, and each provision of this Lease Agreement shall be valid and enforceable to the fullest extent permitted by law.
Section 11.08 California Law. This Lease Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California.
Section 11.09 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 hereof.
Section 11.10 Execution. This Lease Agreement may be executed and entered into in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
21 4816-4731-6694.3
IN WITNESS WHEREOF, the parties hereto have executed and entered into this Lease Agreement by their officers thereunto duly authorized as of the day and year first written above.
PLACENTIA PUBLIC FINANCING
AUTHORITY
By:
Executive Director
CITY OF PLACENTIA
By:
22 4816-4731-6694.3
City Administrator
EXHIBIT A
DESCRIPTION OF LEASED PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF PLACENTIA,
IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PRIOR TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY A")
[TO COME]
SUBSEQUENT TO ISSUANCE OF A CERTIFICATE OF OCCUPANCY FOR A PUBLIC SAFETY BUILDING LOCATED THEREON ("PROPERTY B")
[TO COME]
4816-4731-6694.3
A-1
EXHIBIT B
BASE RENTAL PAYMENTS SCHEDULE
Interest
Principal Component Component of
Interest of Base Rental Base Rental
Payment Date* Payment Payment
12/01/2023
06/01/2024
12/01/2024
06/01/2025
12/01/2025
06/01/2026
12/01/2026
06/01/2027
12/01/2027
06/01/2028
12/01/2028
06/01/2029
12/01/2029
06/01/2030
12/01/2031
06/01/2031
12/01/2031
06/01/2032
12/01/2032
06/01/2033
12/01/2033
06/01/2034
12/01/2034
06/01/2035
12/01/2035
06/01/2036
12/01/2036
06/01/2037
12/01/2037
06/01/2038
12/01/2038
06/01/2039
12/01/2039
06/01/2040
12/01/2040
06/01/2041
Total
* Due on each Base Rental Payment Date or that date five days preceding each Interest Payment Date.
B-1
4816-4731-6694.3
Interest
Principal Component Component of
Interest of Base Rental Base Rental
Payment Date* Payment Payment
12/01/2041
06/01/2042
12/01/2042
06/01/2043
12/01/2043
06/01/2044
12/01/2044
06/01/2045
12/01/2045
06/01/2046
12/01/2046
06/01/2047
12/01/2047
06/01/2048
12/01/2048
06/01/2049
12/01/2049
06/01/2050
12/01/2050
06/01/2051
12/01/2051
06/01/2052
12/01/2052
06/01/2053
Total
B-2
4816-4731-6694.3
Total
CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in real property conveyed by the Lease Agreement, dated as of August 1, 2023, by and between the Placentia Public Financing Authority (the "Authority") and the City of Placentia (the "City"), from the Authority to the City, is hereby accepted by the undersigned on behalf of the City pursuant to authority conferred by resolution of the City Council of the City adopted on , 2023, and the City consents to recordation thereof by its duly authorized officer.
Dated as of , 2023
CITY OF PLACENTIA
By:
4816-4731-6694.3
City Administrator
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature [SEAL]
4816-4731-6694.3
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss
COUNTY OF ORANGE )
On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature [SEAL]
4816-4731-6694.3
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF ORANGE
)
) ss
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On , 2023, before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature [SEAL]
4816-4731-6694.3