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SR-800-005-03 ... . LEASE AGREE~Et\l RELATI~G TO AIRPORT FAC:~ITIES . ,gtJtJ ~ tJtJS---~ 3 by and bet.ween SECwRITY PACIFIC ~ATIONAL BANK, as Lessor and CITY OF SANTA MO~ICA, as Lessee DatEd as of October 1, 1985 , . . TABLE OF CONTENTS ARTICLE I RECITALS 10l. 102. 103 104 105 106 Status and Powers of Lessor .... ....., .. ... .. Status and Powers of Cay .... . . . . .. ....... Purpose of Agreement ... ......... ... . ... .... ..... . . Issuance of Certifl.cates ..... .. . .. . .. .. ...... Related Agreements ....... .. . Constructl.on of thl.s Agreement ARTICLE II DEFI~ITIONS AND GE~ERAL PROVISIO~S 20l. 202. Definl.tl.ons in General . Rules of Constructl.on " ARTICLE II I RIGHT OF E~1RY; CO~STRUCTIO~ OF FACILITIES 301 302 303. 304. 305. 306 Depos1.t of Moneys ...... ... ..... ... . ...... Ground Lease of Sl.te .. ..... . ...... .. . .......... R1.ght of Entry .. .... . . . . . . .. ..... .. ...... . . . Constructl.on of Fac1.l1.t1.es . ..... ... ..... ...... .... Payment of Dell.very Costs ... ........ " Unexpended Moneys ... .. .. .......... . ........ .. .. ARTICLE IV LEASE OF FACILITIES AND S~BLEASE OF SITE, LEASE PAYME\TS 40l. 402. 403. 404. 405. 406. 407. 408. 409. Term of Agreement ..... . .... .. ... .... ...... Sublease of Slte and Lease of Fac1.l1.ties .. ..... Lease Payments . . . . . . . . . . . . . . . . . . . . . . . . . .. ........... Prepayment of Lease Payments ..... .... . ... .. Interest Component .... ..... . ... ..,.. . . . .. ...... Payment 1.n Lawful Money, No Set-Off. ,. .... ..... ... Covenant to Budget and Appropriate .. .. ... .......... Security Deposl.t ....... ..... . . . . . . . . .. .. Ground Lease ................... . . . " .. . . . . . . . . . . . i Page 1 1 1 1 2 2 3 6 7 7 7 7 8 8 10 10 10 11 13 13 13 13 14 . . ARTI CLE V COVEt.;A~TS 501. 502. 503. 504. 505. 506. 507. 508 509. 510. Improvements .... ............ . . . . . . .. ..... ........ Ma~ntenance and Ut~lltles ..... .. ..... . ...... ..... Publ~c L~ab~lity Insurance ... ........... ... . . .... Workers I Compensat~on Insurance ....... ........ .... . F~re and Spec~al Extended Coverage Endorsement .. '" . Rental Interruptlon Insurance ... .... .... Form of Insurance PohCJ.es, Delivery. ................ Appl~cat~on of Net Proceeds of Insurance ..... .. ..... T~tle Insurance. .. ........ ........ ....... Appl~cat~on of ~et Proceeds of T~tle Insurance or CondemnatIon . .. ....... ....... .......... Payment of Lease Payments .... ...... . ..... ... .. ... Compliance ~~th th~s Agreement ...... ...... Payment of Taxes . ............. ..... . . .. .... Observance of La~s and Regulatlons .. .... MaintaIn and Preserve the FacI2ItIes . ........ ....... Other Liens .......... ..... .. ... _ . . . . . . . . . . . . . AgaInst Encumbrances or Sales. .. .. .. .. ..... Prosecution and Defense of SUIts ....... ... . Recordatlon and Fll~ng .... ..... ............ ..... ... Wa1ver of Laws ..... .. ........... . . . . . . .. ......... Compllance wlth Cond~t~ons Precedent .... .. .. ........ Power to Enter lnto Agreement, '" .. " Further Assurances ... ...... . . . . . .. .............. Flnanc~al Reports ." ............ ........... .. ..... Lessor Not Llable ........ ..... . . . . . . .. ... . '. ... Net Lease .......... ...... ... . . . . . . . . . .. .. .. ... Trustee Fees ... . . . . . . . . , . . .. . . . .. ......... 51l. 512. 513. 514. 515 516. 517. 518. 519. 520. 521 522 523. 524. 525. 526. 527. ARTICLE VI DISCLAIMER OF WARRANTIES, ASSIGN1E~1, SUBLEASING; ACCESS; A~END~E~l 60l. 602. 603. 601.. 605. 606. Discla~mer of Warrantles .... ........ . ...... ......... Ass1gnment by Lessor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ass~gnment and Subleas1ng by C1ty ... ... .............. Transfer of Tax Beneflts ...... .. .... ...... ..... Access to 51te and the Facll1tIes ............. Amendment .. .................. . . .. . . . . . . . . . . . . . 11 Page 15 15 15 15 15 16 16 17 18 18 19 19 19 20 20 20 21 21 21 21 22 22 22 22 22 23 23 24 24 24 24 25 25 . ARTICLE VII EVE~TS OF DEFACLT A~D RE~EDIES 701. 702. 703. 704. 705. 706. Events of Default Remed~es on Default Su~ts at Law or ~n Equ~ty and Non-Wa~ver.. . ... ....... Remed~es ~ot Exclus~ve Status Quo Ante Mandamus ARTICLE VIII AD~I~ISTRATIVE PROVISIO~S 801. 802 803 804. 805. 806. 807. 808. 809. 810 811. 812. . Preservat~on and Inspectlon of Documents Part~es of Interest.. '.". ..... No Recourse Under Agreement ................ Not~ces .. ..... . . . . . . .. . ... . . ..... .... B~nd~ng Effect .. ............ ......... ........ Severab~l~ty. ..... ..... . ...... .. .. .. Head~ngs . ....... . ...... .. .. ApplIcable Law... Lessor and C~ty Representat~ves .......... .... ... Further Assurances.. ........ Farm of CertIf~cate of Officers BUSIness Days... . . ...... ... Exh1.bIt A Exh~bit B: Descr~pt~on of SIte Lease Payments ~I~ Page 26 27 28 29 29 29 30 30 30 30 31 31 31 31 31 31 32 32 . . 11679 00000002/089266-L LEASE AGREEMENT RELATI~G TO AIRPORT FACILITIES THIS LEASE AGREE~E~T RELATI~G TO AIRPORT FACILITIES 1S made and entered into as of October 1, 1985, by and between SECURITY PACIFIC NATIO~AL BMIK, a natlonal banklng asSOCial:lon (hereln called "Lessor"), and the CITY OF SANTA MO~ICA, a munlclpal corporation organlzed and oper- al:lng under the laws of the State of Callfornla and the C1ty Charter (hereln called "Clty"). wl:ThESSETH. In conslderation of the mutual covenants herelnafter conta1ned and for other valuable conslderatlon, the part1es hereto hereby agree as follows: ARTICLE I RECITALS 101. Status and Powers of Lessor Lessor lS a natlonal banklng assoclation duly organized and valldly eXlst1ng under the laws of the Unlted States and has full power, authorlty and legal rlght to enter lnto and perform ltS obl1gatlons pursuant to thlS Lease Agreement. 102. Status and Powers of Clty. Clty lS a charter city and rnunlCl- pal corporatlon organlzed and operatlng pursuant to the laws of the Sl:ate of Callfornla and the Clty Charter and lS authorized by Callfornla Gov- ernment Code Sectlon 37350 to acqUlre and lease property for the common benefit and ln furtherance of ltS publlc purposes. 103 Purpose of Agreement. Pursuant to the "Ground Lease" (as here- lnafter deflned) by and between Clty, as lessor, and Lessor, as lessee, Clty has demlsed and leased to Lessor, and Lessor has taken and hlred from Clty, the "Site" (as herelnafter def~ned). In order to prov~de for lts governmental and proprletary needs and ln furtherance of ltS publlC purposes, City des~res to sublease the Slte and lease the "Fac~l~tles" (as herelnafter deflned). Lessor lS able and ~llllng, for adequate con- slderatlon, to sublease the Slte and lease the Facilitles to C~ty. 104. Issuance of Certlflcates Certlflcates of partlcipaClon (the "Certiflcatestl), representlng the dlrect and propon.lonate interests of the reglstered owners thereof 1n payments to be made by Clty as rental for the Slte and the Facllltles pursuant to thls Agreement, will be . . issued and delIvered pursuant to a Trust Agreeffient RelatIng to AIrport FacIhtIes, dated concurrently herewIth (the "Trust Agreement"), by and among CIty, Lessor and the trustee under the Trust Agreement (the "Trustee"). 105. Related Agreements. The partIes hereto acknowledge the follow- ing Bgreements Bnd hereby approve of, and consent to, the terms thereof (a) the ASSIgnment Agreement pursuant to whIch Lessor aSSIgns all of ItS rIghts and Interest In thIS Agreement to the Trustee, and (b) the Trust Agreement pursuant to whIch the Trustee, Lessor and CIty agree to implement thIS Agreement by prOVIding for the delIvery of the CertifIcates, for the admInIstratIon of funds and for the exerCIse of rIghts and remedIes. 106. ConstructIon of This Agreement. ExceptIng the oblIgation to acqUIre, construct and Install the FaCIlItIes as prOVIded In SectIon 304 hereof, for all purposes of thIS Agreement, reference to the "aSSIgnee" of Lessor means the Trustee actIng on behalf of the Owners of the Cer- tIfIcates delIvered pursuant to the Trust Agreement So long as the ASSIgnment Agreement shall be In effect, references hereIn to Lessor or Its aSSIgnee shall be deemed to also refer to the Trustee as ~sslgnee of Lessor. 2 . . ARTICLE II DEFINITIO~S AND GE~ERAL PROVISIONS 201 Deflnltions In General The terms deflned In thlS Section 201 shall, for all purposes of thlS Agreement, have the meanlngs ascrlbed to them herein, as follows. AcqUlsltlon and Constructlon Account The term "Acqulsltlon and Constructlon Account" means the account by that name estabhshed under, and held by the Trustee pursuant to, Sectlon 402 of the Trust Agreement. AcqUlsltlon and Construction Costs The term "Acqulsitlon and Constructlon Costs" means all costs of payment of, or relmbursement for, acqulsltlon, constructlon and lnstallatlon of the Facilltles, lncludlng but not Ilmlted to, archltect, englneerlng, project manager and construc- tlon supervlslon costs, constructlon contractor payments, and costs of feaslblllty, envlronmental and other reports, bUllders' rlsk lnsurance premiums, lnltlal hazard and llablllty lnsurance premlums, title lnsur- ance costs, lnspectlon costs, permlt fees and flling and recordlng costs, and, In addltlon, Dellvery Costs to the extent that the amounts on deposlt ln the Dellvery Costs Account are lnsufflcient to pay all Dellv. ery Costs In full. Asslgnment A~reement. The term "Asslgnment Agreement" means the Asslgnment Agreement Relating to A1rport Facllitles, dated as of October 1, 1985, by and between Lessor and the Trustee, as now or here- af'ter amended. Author1zed Off1cer. The term "Author1zed Off1cer", when used w1th respect to Lessor, means any Vlce Pres1dent of Lessor or any other off1cer of Lessor who 1S deslgnated by the Lessor as an Author1zed Off1- cer for purposes of the Lease Agreement. The term "Author1zed Offlcer," ~hen used w1th respect to C1ty, means the ~ayor, Clty Manager, C1ty Flnance Dlrector or A1rport D1rector or thelr deputles or ass1stants or any other ofIlcer or employee of Clty who 15 des1gnated by th~ Glty Coun- cll or the Clty Manager as an Author1zed Offlcer for purposes of thlS Agreement. Cert1f1cates. The term "Cert1f1cates" means the certif1cates of part1c1patlon prepared and dellvered by the Trustee pursuant to the Trust Agreement. C1ty. The term "G1ty" means the City of Santa Monlca, Cahforn1a. Dehvery Costs. The term "Dellvery Costs" means all costs of payment of or relmbursement for execut1on, sale and dellvery of the Lease 3 . . Agreement and the Certlflca~es, lncludlng, but not 11mlted to, costs pald or lncurred by Cl~Y, Lessor or the Trustee for flllng costs, prlntlng costs, reproduction and blndlng costs, fees and charges of the Trustee, flnanclng dlscounts, legal fees and charges and relmbursements, flnanclal and other professlonal consultant fees and charges and relmbursements, audltors fees and charges and relmbursements, costs of ratlng agencles for credlt ratlngs, fees for executlon, reglstratlon, transportatlon and safekeeplng of Certificates, munlclpal bond lnsurance premlums, if any, and other charges and fees in connectlon wlth the foregolng Dellvery Costs Account. The term "Dellvery Costs Account" means the account by ~hat name establlshed under and held by the Trustee pursuant to Sectlon 403 of the Trust Agreement. Event of Default. The term "Event of Default" means an eVent of default under the Lease Agreement as set forth In Sectlon 701 of the Lease Agreement. Faclllties. The term "Facllitles" means the facilltles located and to be located on and In the Slte conslstlng generally of a hangar and an alrport admlnlstratlon bUlldlng. Federal Securltles. The term "Federal Securltles" means Unlted States Treasury notes, bonds, bllls or certlflcates of lndebtedness or obllgations for WhlCh the full falth and credlt of the Vnited States are pledged for the payment of prlnclpal and lnterest. lncludlng Unlted States Treasury (book entry) certlflcates, notes and bonds, state and local government serles. Ground Lease. The term "Ground Lease" means the Ground Lease dated as of October 1, 1985 by and between Clty. as lessor, and Lessor, as lessee, pertalnlng to the Slte Lease Al;reement. The terms "Lease Agreement" or "Agreement" mean thlS Lease Agreement Relatlng to Alrport Facllitles, dated as of October 1, 1985, by and between Lessor, as lessor, and Clty, as lessee, as now or hereafter amended Lease Payment Account. The term "Lease Payment Account" means the account by that name establlshed under, and held by the Trustee pur- suant to, Sectlon 404 of the Trust Agreement. Lease Payments The term "Lease Payments" means lease payments payable by Clty for the use of the Slte and the Facllltles pursuant to the Lease Agreement. Lessor The term "Lessor" means Securlty Paciflc Natlonal Bank, a nat10nal banklng assoclatlon 4 . . Net Proceeds. The term "Net Proceeds," lo'hen used 10'1 th respect to any ~nsurance or condemnat~on award, means the gross proceeds from the ~nsurance or condemnat~on award wIth respect to whIch that term IS used rema~n~ng after payment of all expenses ~ncurred ~n the collectIon of such gross proceeds. OutstandIng. The term "OutstandIng" when used w~th reference to the CertIfIcates and as of any partIcular date means all CertIfIcates theretofore delIvered except. (a) any CertIfIcate cancelled by the Trus- tee at or before said date and (b) any CertIfIcate in lIeu of or in sub- stItutIon for whIch another CertIfIcate shall have been delIvered pursuant to the Trust Agreement. Owner. The term "Owner" or "Cert~ficate o..'l1er" or "Owner of CertIficates" or any simIlar term, when used WIth respect to the Cer- t~fIcates, means any person who shall be the reg~stered owner of any Out- stand~ng CertIfIcate or, in the event of amendment of the Trust Agreement to perm~t Cert~flcates payable to bearer, any person who shall be the bearer of any Outstanding CertIfIcate not regIstered. Payment Date The term "Pa}""1Ilent Date" means AprIl 1 and October 1 of each year commenCIng WIth AprIl I, 1986. PermItted Encumbrances The term "Permitted Encumbrances" means ~f and to the exteni permItted by law and by any pol~cy gu~del~nes promulgated by C~ty. (1) Ad valorem taxes and assessments for the current fIscal year of CIty. (iI) Easements, rIghts-of-way, mineral rights and other rIghts, covenants, condItIons of restrIctIons whIch 1n the Judgment of CIty do not lmpaIr or Impede or othe~'lse adversely affect constructIon or operatIon of the FaCIlitIes or access to the FaCIlItIes by Lessor or Its Bss1gnee. (ill) The Lease Agreement (1V) The ASSIgnment Agreement. PrinCIpal Office. The term "PrInCIpal OffIce" means the pr1ncIpal corporate trust offIce of the Trustee ~n Los Angeles, Cahfornia. RedemptIon Fund. The term "RedemptIon Fund" means the fund by ~ that name establIshed under and held by the Trustee pursuant to Sec- tion 615 of the Trust Agreement. 5 . . Reserve Account. The term "Reserve Account" means the account by that name establ~shed under, and held by the Trustee pursuant to. Sect~on 405 of the Trust Agreement. Reserve Requ~rement The term "Reserve Requ~rementn means an amount equal to the largest of the annual Lease Payments as shown ~n Exh~b~t B to this Lease Agreement S~te The term "S~te" means the land more particularly descr~bed ~n Exh~bit ~ attached to th~s Lease Agreement. Spec~al Redempt~on Account. The term "Spec:l8l Redempt~on Account" means the account by that name establ~shed under. and held by the Trustor pursuant to, Sect~on 406 of the Trust Agreement. Substant~al Complet~on. The term "substantl.al completlon" or "substant~ally corrplete," when used wl.th respect to the Fac~l~t~es. shall mean complet~on of the acquis~tion, construction, l.nstallat~on and equ~p- p~ng of the Fac~l~tl.es ~n accordance w~th the plans and specl.f~cat~ons therefor, except for such minor ~tems as shall not prevent the full occupancy and ut~l~zat~on of the Fac~l~t~es by C~ty Trust Agreement. The term "Trust Agreement" means the Trust Agreement Relat~ng to Alrport Fac~l~t~es, dated as of October 1, 1985, by and among the Trustee, Lessor and Cl.ty, as now or hereafter amended. Trustee Trust and Sav~ngs or Its successors Agreement The term "Trustee" means Bank of America t\at~onal ASSOCIatIon, a natIonal trust and saVIngs assoclat~on, l.n Interest Bct~ng as Trustee under the Trust Usable. The term "usable," ",hen used wlth respect to the Fac~l~tl.es, means tenantable and avallable for use for the normal opera- tIon of such Facl.ll.tles. 202 Rules of ConstructIon Words of the mascul1ne gender shall be deemed and construed to ~nclude correlat~ve ",ords of the fem~nlne and neuter genders. Unless the context other"'~se 1ndl.cates, words l.mport~ng the sl.ngular number shall ~nclude the plural number and Vl.ce versa, and words 1mport1ng persons shall 1nclude corporatIons and assoc1Bt1on, ~ncludlng publl.c bodl.es, as well as natural persons. The terms "hereby," "hereof," "hereto," "here1n," "hereunder" and any sl.m~lar terms, as used in thls Agreement, refer to th~s Agreement. 6 . . ARTICLE III RIGHT OF ENTRY, CO,STRUCTION OF FACILITIES 301 DepOSAt of Honeys In order to lnduce CAty to sublease the Slte and lease the FacAlltles from Lessor and to assure CAty that the moneys needed to pay the Acqulsltlon and Constructlon Costs and Dellvery Costs ~111 be avallable for thlS purpose without delay, Lessor or its ass1gnee, lmrned1ately followlng dellvery of thlS Agreement by Clty to the Trustee, shall cause to be deposlted wlth the Trustee, from the proceeds of the Certificates, the sum of S Of thlS amount an amount equal to 1nterest with respect to the Certlf1cates for a per10d of t~o and one-half years lS requ1red to be depos1ted 1n the Lease Payment Account, an amount equal to the Reserve Requ1rernent 1S requ1red to be deposlted ln the Reserve Account, an amount equal to estlmated Del1very Costs lS requlred to be deposlted ln the Dellvery Costs Account, and the balance thereof is reqUlred to be deposlted In the Acquls1tlon and Constructlon Account. 302. Ground Lease of Slte. Prlor to the executlon of th1s Agreement, Clty, as lessor, and Lessor, as lessee, shall execute a Ground Lease of the Slte by which Clty shall, ln cons1deratlOn of One Dollar (~1) per annum and other addit1ona1 rent pald by the Lessor, ground lease the Slte to Lessor. Such Ground Lease shall expressly permit the suble se .of the Slte to the Clty pursuant to thls Agreement. A memorandum of such Ground Lease shall be recorded on the date of recordatlon of a memorandum of thlS Lease Agreement. 303. R1ght of Entry In order to enable Lessor to carry out the terms of thls Agreement and to fac~lltate the exerClse pursuant to Sec- tlon 702 hereof of remedles upon an Event of Default by Clty hereunder, Clty hereby grants a r~ght of entry to Lessor, ltS agents and lts ass~gn- ees to the Slte and the Fac1lltles, exerclsable (except as other~ise prov1ded in Section 702 hereof) on reasonable notice to City and durlng normal buslness hours. C1ty represents that lt lS empo~ered to grant such rlght of entry to Lessor. 304. Construct~on of Facll~tles. Lessor shall construct and lnstall or cause the constructlon and lnstallatlon of the Facllitles ln Bccordance with plans Bnd speclflcatlons approved by Clty Dlsbursements for acqulsltlon, construction and lnstallatlon shall be from the ACqUlSl- tion and Construction Account establ1shed and held by the Trustee pursuant to the Trust Agreement and in accordance wlth the procedures set forth In Sectlon 402 of the Trust Agreement for sald dlsbursements. C1ty may, at any tlme, approve modlfications or change orders to plans and speclflcatlons for the Facillties provlded that amounts ln the Acquis1tlon and Constructlon Account (lnclud1ng, w1thout 11mltatlon, any amounts deposlted thereln by the C1ty, at 1tS optlon, for payment of 7 . . addItIonal constructIon costs) are suffIcIent to pay construction costs resultIng from such modIfIcatIons or change orders Lessor agrees that It shall cause the acquIsItion. construction and InstallatIon of the FaCIlItIes to be substantIally completed by AprIl 2. 1988. Lessor further agrees to assure that contractors carry such per- formance bonds, and agree to such lIqUIdated damages for constructIon delays as may be reqUIred by CIty and comply WIth workers' compensatIon laws applIcable to CIty and affIrmatIve actIon standards of CIty. Pro- ceeds of lIqUIdated damages, If any, receIved by Lessor shall be deposIted In the Lease Pa}~ent Account to be held for Lease Payments, prOVIded, however, that If lIqUIdated damages are to be Imposed through WIthholdIng payment from contractors, then Lessor shall dIrect the Trustee to WIthdraw from the AcqUISItion and ConstructIon Account an amount equal to saId lIquidated damages and to depOSIt such amount In the Lease Payment Account for the benefIt of CIty. CIty agrees that Lessor may cause the aforesaId stIpulated comple- tIon date to be extended for a perIod equal to any extenSIons of tIme to whIch contractors are entItled under contracts therefor and any delays In constructIon resultIng from other causes and events not WIthIn the reasonable control of CIty or Lessor. CIty shall take posseSSIon of the FaCIlItIes upon substantIal completIon of constructIon thereof. If, however, Lessor, for any reason ~hatsoever, cannot delIver pos- seSSIon of the FaCIlItIes as substantIally complete to C1ty In a condl- t10n acceptable to CIty by the aforesaId stIpulated completIon date, thIS Agreement shall not be VOId or v01dable, nor shall Lessor be lIable to the C1ty for any loss or damage resulting therefrom; but In such event the remain1ng Lease Payments pertaInIng to the FaCIlItIes shall be abated, In the proportIon that the AcquIs1tIon and ConstructIon Costs of the portIon of the FaCIlItIes not so substantially completed bears to the entIre AcqUIsitIon and ConstructIon Costs, with respect to the period between the aforesa1d stIpulated completIon date and the tIme when Lessor IS able to delIver possess10n of the port1on of the Fac1l1tles not so substantIally completed, prOVIded, however, that there shall be no abatement to the extent of amounts on depos1t In the Lease Payment Account or the Reserve Account, it being ackno~ledged that saId Accounts constItute speCIal funds for the payment of amounts pursuant to thIS Agreement. 305. Payment of DelIvery Costs Payment of DelIvery Costs shall be made from moneys depOSIted WIth the Trustee In the DelIvery Costs Accoun~ and shall be d1sbursed in accordance WIth and upon complIance WIth Sec- tIon 403 of the Trust Agreement. 306. Unexpended Moneys Lessor agrees that unexpended moneys rernaln1ng 1n the DelIvery Costs Account shall, upon the earlIer of (1) payment In full of DelIvery Costs or (11) AprIl 2, 1986, be 8 . . transferred to the ACqUISItIon and ConstructIon Account and that excess moneys, If any, remaInIng In the AcquIsItIon and ConstructIon Account shall, upon the earlIer of (1) receIpt by the Trustee of the cert1f1cate of substantIal completIon referenced In SectIon 402(e) of the Trust Agreement or (11) Aprll 2, 1988, be transferred by the Trustee to the Lease Payment Account and be applIed as a credIt agaInst the prInCIpal component of the next subsequent Lease Payments, as more partIcularly descr1bed 1n Sect10n 402(e) of the Trust Agreement. . 9 . . ARTICLE IV LEASE OF FACILITIES AKD SUBLEASE OF SITE, LEASE PAYMENTS 401. Term of Agreement. The term of this Lease Agreement shall commence as of the date hereof and shall end on the earller of (1/ October I, 2007 or (li) the date upon ~hlch Lease Payments are pald ln full, unless ex-. ~ended or termlnated earller ln accordance wlth the provlsions hereof. If on October I, 20071 the Certlflcates have not been pald or provlslon Ifor the payment thereof has not been made, then the term of thlS Lease Agreement shall be extended until ten (10) days after all the Certlfl- cates have been pald or prOV1Slon therefo.r has b.een made, except that In no event shall the term hereof be !l~~ended_ byondOctobe~ I, 2017. 402. Sublease of Slte and Lease of Facllltles. In conslderatlon of the payment by Clty to Lessor or lts asslgnee of the Lease Payments and for other valuable conslderatlon, Lessor hereby subleases the Site and leases the Facl11tles to Clty 403. Lease Payments. For the rlght to possesslon and use of the Slte and the Facllltles, Clty shall pay to Lessor the Lease Payments set forth ln Exhlblt ~ attached hereto and by thlS reference lncorporated hereln. Each Lease Payment shall be for the right to possess the Slte and the Facllltles for the annual perlod commenclng the second day of October of each calendar year and endlng on the flTSt day of October of the fol- lowlng calendar year, except that the Lease Payments attrlbutable to the perlod through and inc1udlng April 1, 1988 shall constltute advance Lease Payments ln conslderatlon of Lessor's agreement to sublease the Slte and lease the Facllitles to Clty, shall be deemed to be made on October I, 1985, and shall be pald from moneys ln the Lease Payment Account, lt be~ng hereby acknOwledged that sald moneys constItute speclal funds held by the Trustee pursuant to thlS Lease Agreement and the Trust Agreement. For each annual rental per10d commenclng with the perlod beglnn1ng on the date hereof, Clty shall make Lease Payments durlng sald annual perlod as more partlcularly set forth In Exhlblt B, as Exhlblt B may from t1me to t~me be modlfled by the Trustee, as asslgnee of Lessor, follo~1ng prepay- ment of Lease Payments. Lease Payments for each annual payment perIod during the terms of this Agreement shall constItute the total amount due for saId payment perlod, and shall be paid by C1ty for and ln conslderatlon of the rlght of possesslon of, and the contlnued qUlet use and enjoyment of, the Site and the FaCIlitIes durlng each such annual payment perlod An amount equal to the Lease Payment attrlbutable to each annual payment perIod shall be due on the flrst day of September ln each year as speclfled ln Exhlblt B; provlded however, that, with respect to Lease 10 . . Payments const1tut1ng advance rental as referenced above, there shall be app11ed as a cred1t an amount equal to the amount then on depOS1t 1n the Lease Payment Account therefor; and prov1ded, further, that commenc1ng w1th the f1rst Payment Date follo~1ng the date upon WhlCh the Acqu1s1t1on and Construction Account 15 closed pursuant to Sectlon 402(e) of the Trust Agreement and for each Payment Date thereafter, there shall be applled as a credlt (provlded there are no dellnquent Lease Payments) agalnst the LeaSe Payments payable on such date an amount equal to the sum of (1) the amount of interest or lncorne, lf any, theretofore earned on the Lease Payment Account and Redemptlon Fund Slnce the date of the preVlOUS report made by the Trustee 1n accordance wlth the prOV1Slons of Sectlon 408 of the Trust Agreement, plus (11) the amount of interest or 1ucome, lf any, earned on the Reserve Account Sluce the date of the pre- VlOUS report made by the Trustee In accordance ~lth the prOV1S1ons of Sect10n 408 of the Trust Agreement, plus (111) the amount, 1f any, then on deposit in the Lease Payment Account, wh1ch total cred1t shall have been reported on the preceding August 31 by the Trustee to Clty pursuant to Sect10u 408 of the Trust Agreement. In the event that the total amount of credit exceeds the Lease Pay~ent due on the Payment Date fol- lowlug sa1d report, the amount of sa1d excess shall be appl1ed as a credlt agalnst subsequent Lease Payments. In addlt1on, the amount 1n the Reserve Account shall be applled as a cred1t agalnst the last Lease Pay- ments due prlor to the eXplrat10n of the term of th1S Agreement. Should any Lease Payment be made later than the Payment Date to ~h1ch such Lease Payment perta1ns, such Lease Payment shall bear 2nterest at the same rate as the rate represented by the lnterest component of sald Lease Payment from such Payment Date to the date of actual payment. Lessor dlrects that C1ty shall make the Lease Payments dlrectly to the Trustee as asslgnee of Lessor for depos1t 1n the Lease Payment Account. 404. Prepayment of Lease Payments. (a) The prlnclpal component of Lease Payments shall be prepa1d on any Payment Date (but not 1n a total amount of less than $5,000 at any one t1me) in inverse order of Payment Date, wlthout prem1um or penalty at the pr1nclpal amount thereof, together w1th lnterest accrued to sa1d Payment Date, from the Net Proceeds of lnsurance or condemnatlon not used for repa1r, reconstruction or replacement and deposited 1n the Lease Payment Account pursuant to Sectlons 508(a), 508(b), 510(a) and 510(b), lt belng acknowledged that such ~et Proceeds so depos1ted constltute a special fund for the payment of Lease Payments. (b) The pr1ncipal component of Lease Payments shall be prepald In full on October 1, 1986, under the Clrcumstances descrlhed in Sectlon 614(b) of the Trust Agreement, w1thout premium or penalty at the prlnc1pal amount thereof, together ~lth accrued interest to October 1, 1986, from amounts on depos2t 1n the Speclal Redempt10n Account, it be1ng 11 . . acknowledged that such amounts const1tute a special fund for the payment of Lease Payments. (c) Subject to the terms and cond1tlons of thIS Sectlon, Lessor hereby grants an optIon to CIty to prepay the Lease Payments In full by paYIng the stlpulated value (as set forth In Exh1b1t B) of the Lessor's Interest in the Ground Lease and the FacilItIes, In whole or in part, SaId optIon may be exercIsed ~Ith respect to Lease Payments due on and after October I, 1996, on any Payment Date commencIng on October I, 1995. Sald optIon shall be exerc1sed by CIty by gIVIng wrItten notIce to Lessor or Its ass1gnee of the exerCIse of such option on or before the f1rst day of February or August pr10r to the selected Payment Date Such opt10n shall be exercIsed, In the event of prepayment in full, by e1ther (1) fIlIng WIth saId notIce a certIfIed copy of a resolutIon of the CIty apprOVIng the Issuance of refund1ng bonds or notes, the proceeds of wh1ch pursuant to such resolutIon are required to be applIed to redemptIon of CertIfIcates and are suffICIent to redeem the CertIfIcates at the premI. urns payable as prov1ded in the Trust Agreement on the date fIxed for redemptIon thereof, or (1i) deposlt1ng on the date saId notIce IS glven cash In the amount suffIc1ent to pay the stIpulated value of the Ground Lease and the FaC11ItIes on saId Payment Date as set forth In ExhIbIt B together ~1th any Lease Payments then due but unpaId, or, In the event of prepayment in part, by depOSItIng WIth sald notIce an amount dIVISIble by $5,000 equal to the amount descrIbed to be prepaId, together WIth any Lease Payments then due but unpaId, and the Interest component of Lease Payments accrued to the selected Payment Date. In any event, saId cash deposit shall be accompanIed by an amount equal ~o the follOWIng amount (expressed as a percentage of the amount prepaId) consti~utIng a prepay- ment penalty Date of Prepayment Penal ty August 1, 1995 and February I, 1996 2-1/2% August: 1, 1996 and February I, 1997 2% August: I, 1997 and February I, 1998 1-1/2% August 1, 1998 and February I, 1999 1% August I, 1999 and February I, 2000 1/2% August 1, 2000 and thereafter -0- In the event of prepayment 1n part, the partial prepayment shall be applIed by Lessor or 1tS aSSIgnee agaInst the pr1nc1pa1 component of Lease Payments in inverse order of theIr Payment Dates, and the Trustee, as ass1gnee of Lessor, shall prOVIde to CIty a revlsed schedule of Lease. Payments reflect1ng saId partIal prepayment. 12 . . 405 Interest Component. Allor a port~on of each Lease Payment ~s pald as, and represents payment of, 1nterest The 1nterest component of each Lease Payment is set forth in Exhiblt B. 406. Payment ln Lawful Money; Ko Set-Off. Each Lease Payment shall be pald by Clty ln lawful money of the Unlted States of A~erlca, WhlCh at the time of payment lS legal tender for the payment of publlC and prlvate debts, to or upon the order of Lessor or ltS assignee at the Prlnclpal Offlce af the Trustee or at such other place as Lessor or lts asslgnee shall deslgnate. Notwlthstandlng any dlspute between Clty and Lessor, Clty shall make or cause to be made each and all Lease Payments ~hen due and shall not wlthhold or permlt to be wlthheld any Lease Payments pendlng the flnal resolutlon of such dlspute nor shall Clty assert nor permlt to be asserted any r1ght of setoff or counterclalm agalnst the obllgatlon to make Lease Payments as set forth hereln. 4Q7. Covenant to Budget and Appropriate. Clty covenants to take such actlon as may be necessary to lnclude all Lease Payments (other than the amount of any Lease Payment whlch 1S subject to a credlt from funds deposlted with the Trustee, as reported by the Trustee to the City pursu- ant ~o Sectlon 408 of the Trust Agreement) and other payments requlred to be made hereunder pursuant to thls Agreement ln lts annual budget and annually to approprlate an amount necessary to make such Lease Payments Durlng the term of th~s Agreement, Clty ~111 furnish to the Trustee, as asslgnee of Author1ty, a certlflcate statlng that the flnal budget for such flscal year contalns an approprlatlon of amounts sufflclent to m ~e the Lease Payments payable durlng such f1scal year, wlthln twenty (20) days after each flnal budget of Clty lS prlnted. The covenants on the part of Clty hereln contalned shall be deemed to be and shall be con- strued to be mlnlsterlal duties lmposed by law and it shall be the duty of each and every publlC offlclal of Clty to take such actlon and do such th1ngs as are requlred by law 1n the performance of the off1clal duty of such offlC1als to enable Clty to carry out and perform the covenants and agreements In this Agreement agreed to be carr led out and performed by Clty. 408. Securlty Deposit. Notwlthstandlng any other prov1slon of this Agreement, Clty may on any date secure the payment of all or a portlon of Lease Payments by a deposlt wlth the Trustee, as escrow holder under an escrow deposlt and trust agreement as referenced ln Sectlon 802(d) of the Trust Agreement. of either (1) an amount, lf any. WhlCh, together wlth amounts on deposit in the Lease Payment Account and the Reserve Account, is sufflc1ent to pay all unpald Lease Payments, lncludlng the pr1nclpal and lnterest components thereof, 1n accordance wlth the Lease Payments schedule set forth ln Exhibit B, or (il) Federal Securltles, together wlth cash, if requlred, ln such amount as wlll, ln the opinion of counsel whose opinlon is acceptable by underwriters lD the marketlng of tax- exempt obl1gat1ons or of an lndependent certlfled public accountant, together w1th lnterest to accrue thereon and, If requlred, all or a 13 . . pcrt~on of moneys or Federal Secur~t~es then on depos~t ~n the Lease Payment Account and Reserve Account, be fully suff~c~ent to pay all ~npa~d Lease Payments on the1r Payment Date 409. Ground Lease. It 1S expressly understood, acknowledged and agreed by City that 1n add~t~on to the terms, condltions and covenants stated herein, all of the other terms, COndlt~OnS and covenants of th~s Lease Agreement shall be those stated 1n the Ground Lease and any amend- ments and mod~f~catlons thereto as of the date of thlS Lease Agreement, prov~ded, however, that ~n the event of any inconsistenc~es bet~een any of the provis~ons of th1S Lease Agreement and the Ground Lease, the terms of th~s Lease Agreement shall govern Lessor shall have an obl1gatlon to maintain the Ground Lease 1n full force and effect durlng the term of th1s Lease Agreement. Whenever the prov~s1ons of the Ground Lease wh~ch have been lncorporated as prov~s1ons of thlS Lease Agreement require the ~ritten consent of the Lessor, said provlsions shall be construed to require the written consent of both the lessor under the Ground Lease and the Lessor. 14 . . ARTICLE V COVE~A~TS 501. Improvements. C~ty shall have the r~ght dur~ng the term of thlS Agreement to make, or perm~t to be made, lmprovements to the Site and the Fac~lltles If such are necessary or beneflclal to the S~te and the Facll1tles. 502. Halntenance and Utilltles. All malntenance and repalr of the Facllltles shall be the responslblllty of Clty, and City shall pay for, or otherWlse arrange for the payment for, any necessary utlllty serVlces supplled to the Facllltles, all costs of operatlon of the Facll~tles and all costs of repalr and replacement of the Facilltles resulting from ordlnary wear and tear or want of care on the part of Clty In exchange for the Lease Payments hereln provlded, Lessor agrees to provlde only the Slte and the Facl11tles. 503. PubllC Liablllty Insurance. Clty shall maintain or cause to be malntalned, throughout the term of thlS Agreement, a comprehenslve general publlc llablllty insurance POllCY or pollcies agalnst dlrect or contlngent loss or llablllty for damages for personal lnJury, death or property damage occasloned by reason of the construction or operatlon of the Site or the FaClllties. Sald POllCY or pollcles for comprehenslve general public 11ablllty lnsurance shall provldF a total coverage of not less than $10,000,000 combined single limit of bodily lnjury, personal injury and property damage lncludlng umbrella excess 11ablllty, and may be subject to~deductlble amount or self-lnsured retentlon ~n an a~ount not ~o exceed $500,000, or such lesser amount, as may be author1zed by ~Clty s 11abll~ty lnsurance program1 provlded ~hat any self~lnsured Fetentlon shall be actuar1ally sound 504. workers' Compensatlon Insurance. Clty shall maintain or cause to be maintalned, follo~ln& substantlal complet1on of the Facl11tles and thereafter throughout the term of thlS Agreement, workers' Compensat1on Insurance or self-lnsurance to cover all persons employed in connectlon ~lth the Facllltles who are not otherWlse covered as requlrec by the Labor Code of the State of Cal1fornla, or any act hereafter enacted as an amendment or supplement thereto or ln 11eu thereof. 505. Flre and Speclal Extended Coverage Endorsement. Clty shall malntaln or cause to be malnta1ned, throughout the term of thls Agreement~ flre, lightnlng and special extended coverage lnsurance, whlch lncludes vandalism and mallcious m1schlef on all 1mprovements constltutlng any part of the Facl1ltles in an amount equal to the greater of one hundred percent (100%) of the replacement cost of such lmprovements or the out- standlng princlpal component of Lease Payments. All insurance required to be malntalned pursuant to thlS Sect10n may be subject to~deductible amount ,or self-lnsured retentlon ln an amount not to exceed ~500,OOO, or 15 . . ,such lesser amount as may be authorlzed by Clty'S llablllty lnsurance program~ provlded that any self-lnsured retentlon shall be actuarlally . sound Each such POllCY of lnsurance shall contain a standard replacement cost e~dorsement provldlng for no deductlon for depreclatlon and a StlpU- lated amount ehdorsement 506 Rental Interruptlon Insurance Clty shall malntaln or cause to be maintalned throughout the term of thls Agreement rental lnterruption 1nsurance ln an amount not less than the maXlmum total Lease Payments payable by Clty on any two consecut1ve Payment Dates, to lnsure agalnst loss of Lease Payments to Lessor or ltS asslgnee caused by perl 15 covered by the lnsurance requlred by Sectlon 505 hereof 507. Form of Insurance Pollcies, Delivery. (a) Any pollcles of lnsurance dellvered In satlsfaction of the requlrements of Sectlons 503 through 506 shall provide that all Net Pro- ceeds thereunder shall be payable to Clty and to the Trustee, as asslgnee of Lessor, as their lnterests may appear. Sald pollcles shall permlt the Trustee ln the absence of any actlon by Clty in accordance ~lth thlS Agreement, to adjust, collect and recelve all moneys which may become due and payable under any such pollcles, to compromlse any and all clalms thereunder and to apply the ~et Proceeds of such lnsurance as provlded ln thlS Agreement All pollcles of lnsurance requlred by thlS Agreement shall provlde that Clty and the Trustee shall be glven thlrty (30) days' notlce of any lntended cancellatlon "nereof or reductlon of the coverage provlded thereby. (b) C1ty shall del1ver, or cause to be dellvered, to the Trustee as asslgnee of Lessor ln the month of September 1n each year a schedule, In such detall as Lessor or lts ass~gnee may request, settlng forth the lnsurance pollcles then ln force pursuant to thlS Agreement, the names of the lnsurers wh1ch have issued the pollc1es, the amounts thereof and the property and rlsks covered thereby. If so requested In wrltlng by the Trustee as ass1gnee of Lessor, Clty shall also dellver, or cause to be dellvered to the Trustee, dupllcate orlglnals or certlfled coples of each lnsurance policy descrlbed 10 such schedule, provided that dellvery of the lnsurance pollcles under the provls1ons of th1s Sectlon shall not confer responslbll1ty upon Lessor or the Trustee as ltS asslgnee as to the suff1clency of coverage or amounts of sald pollc1es ~efore a plan, of self-insurance may be provlded by Clty, and prior to any change ln such plan, there shall be flIed with the Trustee a certlf1cate of an actuary, an lndependent insurance consultant or other quallfled person acceptable to the Trustee statlng that, ln the op1nlon of the slgner, the plan of self.1nsurance or change ln such plan, when effectlve, would afford adequate protectlon to C1ty, Lessor and lts dlrectors, offlcers and employees and the Trustee agalnst loss and damage from the hazards and rlsks requlred to be covered hereby 16 . . 508 ApplIcatIon of Net Proceeds of Insurance. Any Net Proceeds of any insurance required by thlS Agreement relating to an accident to or destructlon of any part of the FaCIlItIes Whlch IS collected by C1ty ln consequence of any such accldent or destruct10n shall be deposited by Clty ln a specIal fund to be held in trust by the Trustee as asslgnee of Lessor and shall be applIed and dlsbursed as set forth below: (e) If CIty determlnes that such Net Proceeds are to be Utl- lized for the repair, reconstructlon or replacement of the damaged or destroyed portIon of the Facl11tles, evidenced by a certlflcate executed by an AuthorIzed Offlcer of Clty and flIed WIth the Trustee, then CIty shall cause such portion of the Facl11ties to be repaired, reconstructed or replaced to at least the same good order, repalr and condltlon as 1t eXIsted prlor to the damage or destructIon, lnsofar as the same may be accompllshed by the use of said Net Proceeds, and shall dIrect the Trustee to withdraw sald Net Proceeds from sald special fund held by the Trustee from time to time and to pay such Net Proceeds to City for the purpose of such repaIr, reconstrUCtIon or replacement. City shall dlrect the Trustee to depOSIt any balance of said Net Proceeds remainlng In saId speCIal fund and not reqUIred for such repa1r, reconstructlon or replace- ment lnto the Lease Payment Account as a prepayment of Lease Payments, In accordance wlth SectIon 404(a) hereof. Subject to the provlsions of sub- sect10ns (b) and (c) of thIS SectIon, CIty shall be oblIgated to contlnue to make Lease Payments requlred by thlS Agreement notwithstandIng aCCl~ dent to or destruction of :11 or a portlon of the Facllltles; proVlded, however, that ln the event that accldent or damage to any portlon of the Facllltles IS such as to cause such portlon not to be usable, then such Lease Payments shall be abated, In the proportIon to WhlCh the unusable portIon of the FacII~tIes bears to the entlre Fac111tles, untll repair of such damaged portIon 1S completed to such an extent as to enable use thereof, except that there shall be no abatement so long as moneys then on depos1t 1n the Lease Payment Account or ~n the Reserve Account, or ~et Proceeds of insurance, are suffiCIent for the maklng of Lease Payments when and as due It beIng hereby declared that such moneys and Net Pro. ceeds constitute speCIal funds for the payment of Lease Payments. (b) In 11eu of repair, reconstructLon or replacement of the damaged or destroyed portIon of the Facl1ltles, CIty may, by a certIfI- cate executed by an Authorized Offlcer of CLty and flIed w1th the Trus- tee, direct the Trustee to apply the Net Proceeds of Insurance to the exerC1se ln whole to the extent of saId Net Proceeds, on the next suc- ceeding Payment Date to the prepayment of Lease Payments in accordance WIth SectIon 404(a) hereof. For the purposes of th1s subsectIon, Sec. tlon 404(a) of this Lease Agreement shall be deemed to requlre prepayment wlthout premlum on the Payment Date follOWIng the date WhlCh IS SIxty - (60) days subsequent to recelpt by the Trustee of the Net Proceeds of Lnsurance and of saId cert1flcate of an AuthorLzed Off1cer of City. 17 . . (c) Any Net Proceeds of rental ~nterruptlon lnsurance reqUIred by thls Agreement shall be used flrst to relmburse Clty for Lease Payments theretofore pald during any period In whlch abatement of Lease Payments would otherwlse have occurred not~lthstandlng accldent to or destructlon of all or a portIon of the Facllltles Any balances remalnlng shall be paId by CIty to the Trustee, as assIgnee of Lessor, for deposlt In the Lease Payment Account and applled as a credlt agalnst the next subsequent Lease Payments. 509. Title Insurance. Clty shall provlde, or cause to be provlded, at ltS own expense a Callfornla Land TItle Assoclatlon tItle lnsurance polIcy wIth endorsement so as to be payable to the Trustee (as AssIgnee of Lessor pursuant to the AssIgnment Agreement). Such polIcy shall Insure City's subleasehold tItle to the Slte and leasehold tItle to the FacIlItIes, subject only to Permltted Encumbrances. SaId tItle Insurance pollcy shall be In a prlnclpal amount equal to the aggregate unpaId prln- clpal component of Lease Payments set forth In Exhlblt B. 510 Appllcation of Net Proceeds of Tltle Insurance or Condemnatlon All Net Proceeds recelved under the tItle Insurance pollcy prOVIded for by thIs Agreement or In any condemnation proceedlng undertaken by any governmental agency relatlng to all or a portlon of the Slte or the FacIlItIes shall be paId to the Trustee pursuant to the Trust Agreement and shall be applied and dlsbursed as set forth below: (a) If CIty determines that such tItle defect or condemnatlon has not materIally affected the operatlon of the FaCl1ltles or the abll- Ity of Clty or ltS asslgnee to meet any of the obllgatlons hereunder or If such Net Proceeds are insufflClent to enable Clty to prepay Lease Pay- ments ln full pursuant to SectIon 404(a) hereof, as set forth ln a cer- t~flcate exercIsed by an Authorlzed Offlcer of Clty and flIed wlth the Trustee, CIty shall dlrect the Trustee by sa~d certlflcate of an Autho- rlzed Offlcer, to hold such Net Proceeds in the Lease Payment Account and apply such Net Proceeds as a prepayment 1n part of Lease Payments pur- suant to Sectlon 404(a) hereof. For the purposes of thlS subsect1on, Sectlon 404(a) of thlS Lease Agreement shall be deemed to permlt prepayment WIthout premIum or penalty en the Payment Date followlng the date ~hlCh IS thlrty (30) days subsequent to recelpt by the Trustee of Net Proceeds of tltle Insurance or condemnatIon and of said certlflcate of an Autho- rized OffIcer of City Subject to the prOVlSlons of 5ubsectlon (b) of thlS Sectlon, Clty shall be oblIgated to contlnue to make Lease Payments reqUIred by thIS Lease Agreement notwithstandlng condemnation of or a tl~le defect relatIng to a portlon of the Slte or the FacIlltles; provlded, however, that in the event that such condemnatIon or defect lS to such extent as to cause such portlon not to be usable, then such Lease Pay- ments shall be abated, In the proportlon to whlch the unusable portlon of the Facilities bears to the entlre Facllities, except that abatement shall not result so long as moneys then on depOSIt ln the Lease Payment Account or Reserve Account or Net Proceeds of tltle lnsurance or condem- 1B . . natIon are suffICIent for the makIng of Lease Payments, It belng hereby declared that such moneys and ~et Proceeds constltute speclal funds for the payment of Lease Payments. (b) If Clty determlnes that such title defect or condem- nation has materially affected the operation of the FacIlitIes or the abIlity of CIty to meet any of the oblIgatIons hereunder as set forth In a certIfIcate executed by an Authorlzed Offlcer of CIty, and flIed ~lth the Trustee, or If such Net Proceeds are suffICIent to enable CIty to prepay In full as set forth in Section 404(a) hereof as set forth In a certlflcate exerclsed by an Authorlzed Offlcer of City and flIed wIth the Trustee, CIty shall dIrect the Trustee, by said certifIcate of an Authorlzed OffIcer, to treat such ~et Proceeds as the prepayment, on the Payment Date followIng the date ~hlCh IS thIrty (30) days subsequent to receIpt by the Trustee of Net Proceeds of tItle Insurance or condemnatlon, and of saId certlflcate of an Authorized OffIcer of CIty, of Lease Payments In full. (c) In the event of condemnatIon of the Slte and the FacilItles, CIty WIll use all efforts to assure that any award made as a result of sald condemna"lon IS sufflcient to pay the stIpulated value (as set forth In ExhIbIt B hereof) of the Lessor's Interest in the Ground Lease ar.d the FaCIlIties 511. Payment of Lease Payments CIty shall duly and punctually pay or cause to be paId the Lease Payments, at the dates and places and In the manner prOVIded In thIS Lease Agreement accordIng to the true Intent and meanlng hereof and shall not dlrectly or Indlrectly extend or assent to the extension of the Payment Dates of any Lease Payments. 512. ComplIance WIth thls Agreement. Each of City and Lessor WIll faIthfully observe and perform thelr respectIve covenants, condltlons and reqUIrements of th~s Lease Agreement. CIty will not suffer or permIt any default to occur hereunder, nor do or permIt to be done In, upon or about the SIte or the Facllltles or any part thereof, anything that mlght in any way weaken, dlmlnlsh or ImpaIr the operatIon of the Faclllt1es. Clty wlll not do or perm1t anythlng to be done, or omlt or refra1n from dOlng anythlng, in any case where any such act done or perm1tted to be done, or any such omlSSlon of or refraInIng from actIon, would or mIght be a ground for cancellatIon or termInatIon of this Lease Agreement. 513. Payment of Taxes. CIty WIll payor cause to be paId all taxes, assessments and other governmental charges, If any, that may be leVIed, assessed or charged upon the SIte or the Facllitles or any part thereof, promptly as and when the same shall become due and payable; provlded, however, that Clty shall not be requlred to pay any such tax, assessment, or charge, If the valldlty thereof shall concurrently be contested 1n good fa1th by approprIate proceedIngs, and ~f CIty shall set aside, or cause to be set aSIde, reserves deemed by It to be adequate WIth respect 19 . . thereto and provlded further, that Clty, upon the commencement of any proceed~ngs to foreclose the lien of any such tax, assessment, or charge, wlll forthw~th pay, or cause to be pa~d, any such tax, assessment or charge, unless contested 1n good f81th as aforesa1d. C~ty wlll not suffer the Slte or the FaCllltles or any part thereof to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor. Nothing hereln contalned shall be deemed to lmpose any llab1lity to pay taxes, assessments or charges where none 1S lmposed by law 514 Observance of Laws and Regulatlons. Clty will well and truly keep, observe and perform all valld and lawful obllgat1ons or regulatlons now or hereafter 1mposed on 1t by contract, or prescr1bed by any law of the Unlted States, or of the State of Cal1forn~a, or by any off~cer, board or comm1SSlon hav1ng Jur1sd1ct1on or control, as 8 condltlon of the continued enjoyment of any and every rlght, prlvilege or franchise now owned or hereafter acqu1red by Clty, includlng ~ts right to eX1st and carryon buslness as a publlc body, corporate and pol1tlC, to the end that such rlghts, prlvileges and franchlses shall be malntalned and pre- served, and shall not become abandoned, forfelted or ln any manner lmpalred. 515 ~alntaln and Preserve the Faclllt1es. Clty wlll operate, maln- taln and preserve, or cause to be operated, malntalned and preserved, the Facllities in good repair and worklng order and will operate, or cause to be operated, the Facllltles ln an efflclent and economlcal manner. 516. Other Llens. C1ty shall keep the Facillt1es and all parts thereof free from Judgments, from mechanlcs' and materlalmen's llens (except those mechanlcs' and materlaImen's Ilens arls1ng from construc- t10n of all or a portlon of the Facll1tles) and, except as to Permltted Encumbrances, free from all llens, clalms, demands and encumbrances of whatsoever nature or character, to the end that the Slte and the Facill- tles may at all times be malntained and preserved, and City shall keep the Slte and Facllltles free from any clalm or llabillty wh1ch, In the reasonable Judgment of Lessor or its asslgnee, mlght impair or impede the operatlon of the Fac1llt1es; prov1ded, however, that Clty shall not be requlred to pay any such llens, clalms or demands ~f the valldlty thereof shall concurrently be contested in good faith by approprlate proceedlngs, and lf Clty shall set aside or cause to be set aside reserves deemed by lt to be adequate wlth respect thereto and provlded further, that Clty upon the Commencement of any proceed1ngs to foreclose the lien of any such charge or clalm, will forthwith payor cause to be paid any such charge or clalm unless contested ln good fa1th as aforesa1d. Lessor, or 1tS ass 19nee , at its optlon (after flrst glVlng Clty ten (10) days' wrlt-. ten notlce to comply there~ith and fallure of Clty or its asslgns to so comply wlthln sald ten-day perlod) may defend agalnst any and all actlons or proceedlngs in whlch the valldlty of thlS Agreement 1S or might be questioned, or may payor ccmpromlse any clalm or demand asserted ln any 20 . . such act~ons or proceed~n&s, prov~ded, however, that, ~n defend~n& aga~nst such act~ons or proceed~ngs or in pay~ng or comprom~s~n& such cla~ms or demands, ne~ther Lessor nor ~ts ass~gns shalJ in any event be deemed to have wa1ved or released C~ty from l~ab~l~ty for or on account of any of ~ts covenants and warrant~es contatned here~n, or from 1tS 1~ab1ltty hereunder to defend the valid~ty of thlS Agreement and the pledge herein made to perform such covenants and warrant~es. 517. Aga1nst Encumbrances or Sales. Except as permitted in thls Agreement and except as to Perm1tted Encumbrances, C1ty w1ll not create or suffer to he created any mortgage, pledge, l1en, charge or encumbrance upon the S1te or Fac~lit~es or any part thereof, or upon any real or personal property essent~al to the operat~on of the Facil~t1es C~ty w1l1 not sell or otherw~se d~spose of the S1te or the Fac~lit1es or any property essentlal to the proper operatlon of the Fac~lltles, except as otherwise provlded ~n thlS Agreement 518 Prosecutton and Defense of Suits. Ctty shall promptly, upon request of Lessor or ltS ass1gnee, from tlrne to tlme take or cause to be taken such actlon as may be necessary or proper to remedy or cure any defect 1n or cloud upon the title to the Slte or the FaCl11t1es whether now eX1st~ng or hereafter develop1ng and shall prosecute all such SUltS, actions and other proceedlngs as may be approprlate for such purpose and shall indemn~fy or cause to be 1ndemnlf1ed Lessor and its asslgns for all loss, cost, damage and expense, inc1ud1ng attorneys' fees, Wh1Ch they or any of them may lncur by reason of any such defect, cloud, SU1t, actlon or proceedlngs. City shall defend, or cause to be defended, every suit, aet10n or proceedlng at any t~me brought agalnst Lessor or ltS asslgnee upon any cla~m arls~ng out of the reeelpt, appllcatlon or dlsbursement of any amounts held by the Trustee or lnvolvlng the rlghts of Lessor or 1ts asslgnee under th1S Agreement; prov1ded, that Lessor and 1tS ass1gnee at the1r electlon may appear 1n and defend any such sU1t, aetlon or pro- ceedlng. Clty shall lndemnlfy or cause to be lndemnlfled Lessor and ltS asslgnee agalnst any and all liab11~ty claimed or asserted by any person, arlslng out of such recelpt, appllcatlon or d~sbursement. 519 Recordatlon and Fllin&. C1ty shall record and flle, or cause to be recorded and filed, a memorandum of th1S Agreement and all such supplemental 1nstruments and other documents as may be requlred by law (together wlth whatever else may be necessary or be reasonably requ1red by Lessor or lts asslgnee), 1n such manner, at such tlmes and ln such places as may be required by law 1n order fully to preserve and protect the rlghts of Lessor and lts asslgnee under th1s Agreement. 520 Wa1ver of Laws. Clty shall not at any t1me 1ns1st upon or plead ln any manner whatsoever, or clalm or suffer or take the beneflt or advantage of any stay or extens10n law now or at any tlme hereafter ln 21 . . force wh~ch may adversely affect the covenants and agreements conta1ned in th~s Agreement and the benef1~ and advantage of any such law or laws ~s hereby e~pressly ~aLved by CLty to the extent that C1ty may legally make such wa1ver. 521. Compliance wLth Conditions Precedent. ~pon the date of delLvery of th1s Agreement, all condlt1ons, acts and thIngs requlred by law or by thls Lease Agreement to have happened or to have been performed precedent to or 1n the execution of thLs Lease Agreement shall eXlst, have happened and have been performed, and thLs Lease Agreement shall be wLth1n every l~mLt prescrLbed by law 522. Power to Enter 1nto A~reement. City is duly authorized pursuant to the law to enter Lnto thLS Agreement The provLsIons of thIS Lease Agreement are and WIll be the valLd and legally enforceable spec1al obl1gatLons of Clty In accordance wlth thelr terms and the terms of th1s Lease Agreement. 523. Further Assurances Whenever and so often as requested so to do by any party or LtS assLgnee the other party will upon wrLtten request by such party or 1ts assLgnee and follow1ng reasonable notice execute and del1ver or cause to be executed and delLvered all such other and further Instruments, documents or assurances, and do or cause to be done all such other and further thIngs, as may be necessary or reasonably requ1red 1n order further and more fully to vest In such party or its aSSIgnee, all r~ghts, Interest, powers, beneflts, privLleges and advantages conferred or Intended to be conferred upon such party by thLs Agreement 524. FInanc1al Reports W1thIn one hundred e1ghty (180) days after the close of each fLscal year of C1ty, CLty WIll furnIsh, or cause to be furnIshed, to the Trustee as ass1gnee of Lessor deta1led certLf1ed reports of audLt, based on an exarn1nat10n suff1cLently complete, prepared by an Lndependent certLfLed publlc accountant cover1ng the operat10ns of the CIty for said fIscal year show1ng the general funds, revenUes and expenses for such perIod. Such aud1t report shall 1nclude statements of the status of each fund establ1shed by CIty pertainLng to thLs Agreement or the Fac~llt1es, shOWIng the amount and source of deposlts there1n, the amount and purpose of the WIthdrawals therefrom and the balance thereLn at the begLnnLng and end of the fLscal year. Such aud~t reports may be combLned wLth the aud1ts made for Clty'S general busLness and operatLons. 525. Lessor ~ot L1able. Ne1ther Lessor nor 1ts members, offIcers, ~ agents, employees, or assLgnee shall be l1able to CIty or to any other party whomsoever for any death, Lnjury or damage that may result to any person or property by or from any cause whatsoever in, on or about the SLte or the FaCIlities C1ty shall LndemnLfy or cause to be 1ndemnLf1ed and hold Lessor, its members, offLcers, agents, employees and Its aSSlgnee harmless from, and defend or cause each of them to be defended agaLnst any and all claIms, lIens and Judgments for death of or injury to 22 . . any person or damage to property ~hatsoever occurrlng in, on or about the Slte or the Facil1t1es, except for clalms, llens or judgments of any nature whatsoever ar1s1ng from the gross negllgence or w1llful m1sconduct of Lessor or 1ts asslgnee and thelr respect1ve members, offlcers, agents and employees. 526. Net Lease. It 1S the purpose and lntent of Lessor and Clty that Lease Payments shall be absolutely net to Lessor so that thlS Lease Agreement shall Yleld to Lessor the Lease Payments, free of any charges, assessments, or lmpos1t1ons of any k1nd charged, assessed, or lmposed on or agalnst the Slte or the Facil1ties, and wlthout abatement, caunter- cla1ffi, deduction, defense, deferment or set-off by Clty, except as herein speclf1cally otherWlse provlded, and Lessor shall not be expected or requ1red to pay any such charge, assessment or 1mposlt1on, or be under any obllgatlon or Ilabil1ty hereunder except as hereln expressly set forth, and that all costs, expenses and obllgat1ons of any klnd relatlng to the ma1ntenance and operation of the Slte and the Fac1lltles which may arlse or become due durlng the term of thlS Lease Agreement shall be pald by Clty. To that end, Clty shall 1ndemnlfy and hold Lessor, lts members, offlcers, agents and employees, and lts assignee harmless from and agalnst any and all costs, expenses and obl1gatlons (lnclud1ng, wlthout Ilm~tatlon. reasonable attorneys' fees) that may be lmposed on or asserted agBlnst Lessor relat1ng to the maintenance and operat1on of the Site and the FaCll1t~es pursuant to th1S Lease Agreement and the Ground Lease, except for costs, expenses and obl~gatlons ar~slng from the gross negllgence or wlllful mlsconduct of Lessor or lts assignee and thelr respect1ve members, off1cers, agents and employees. 527 Trustee Fees. Clty shall payor cause to be pa1d to the Trus- tee reasonable fees and cornpensat1on due under the Trust Agreement upon perlodlc bill1ng therefor by Trustee. 23 . . ARTICLE VI DISCLAI~ER OF ~ARRA~TIES. ASSIGSME~; SUBLEASI~G, ACCESS; A~EKD~E'l 601. DISCLAmER OF I.'ARRA\lIES. NEITHER LESSOR ~OR ITS ASSIG'\EE 'lAKE A\~ wARRAKTY OR REPRESEKTATIO~, EITHER EAPRESS OR IMPLIED, AS TO THE VALeE, DtSIG", COKDITIOK, MERCHA~TABILITY OR FITNESS FOR ASY PARTICLLAR PL~POSE OR FIT\ESS FOR THE USE CONTE'fPLATED BY CITl. OF THE FACILITIES OR AKY PORTIOK THEREOF, OR AKY OTHER REPRESE"TATIO~ OR "ARRA\lY ~ITH RESPECT TO THE FACILITIES OR A~Y PORTION THEREOF. IN "0 EVE~l SHALL LESSOR OR ITS ASSIGKEE BE LIABLE FOR I"CIDE~lAL, I\DIRECT, SPECIAL OR CO\SEQCE~lIAL DA~AGES, IN CO"SECTIO~ I.'ITH THIS AGREE~E~T OR THE EXISTESCE, FCR"ISHI\G, OR FUKCTIOKI'\G OF THE FACILITIES OR CITY'S USE OF THE FACILITIES, EXCEPT SUCH DA~lAGES AS MAY ARISE BY REASO,," OF LESSOR'S BREACH OF THIS AGREE~jE'\T 602. Asslgnment by Lessor. Lessor's rlghts under thlS Agreement, lncludlng the rlght to receIve and enforce payment of the Lease Payments to be made by the Clty under thlS Agreement, may be asslgned and reas- slgned, In conformance ~Ith the terms and condltlons of thlS Agreement, ln whole or In part to one or more asslgns by Lessor at any tlme, wlthout the consent of Clty. Lessor agrees to pro,~de prompt wrltten nOclce of any such asslgnment to Clty 603 Asslgnment and Subleaslng by Clty. Except as prOVIded herelD, this Agreement may not be asslgned by Clty ~lthout the wrltten consent of the Trustee as assignee of Lessor. Such ~r~tten consent shall not be unreasonably wlthheld. NotWlthstandlng any other provlslon of thlS Agreement the S~te and the Facllltles may be subleased by Clty, subject to PermItted Encum- brances, ln whole or ln part, wlthout the consent of Lessor, subject, however, to each of the followlng condltlons: (a) ThlS Agreement and the obllgatlon of Clty to make Lease Payments hereunder, shall not be adversely affected, and (b) No such sublease shall cause the lnterest component of the Lease Payments to become subject to Federal lncome taxes, provlded that Clty may 1D enterlng lnto any such sublease rely upon the oplnlon of counsel whose opinlon is acceptable by underwrIters ln the marketlng of tax-exempt obligatlons wlth respect to the effect, If any, of such sublease. 604 Transfer of Tax BenefIts. Nothlng hereln shall be deemed to prevent Clty from enterlng lnto any agreement or maklng any dlSposlt1on for the sole purpose of transferrlng to one or more corporatlons, part- nershIps or 1ndlvlduals Federal or state lncome tax beneflts whlch would 24 . . be avallable for the FaCll1tles if o~ned by a prlvate person, subject, however, to each of the follo~lng condltlons. (a) ThlS Agreement and the obl1gatlon of Clty to make Lease Payments hereunder shall not be adversely affected; (b) No such agreement or d1Sposltlon shall cause the interest component of the Lease Payments to become subject to Federal lncome taxes; and (e) Th~ transaCClon ~111 h~ so struccuced as to assur~ chac in the event of bankruptcy of the transferee, the Lease Payments shall not become a part of the transferee's estate under Sect10n 362a, 547b and 552a of the Federal Bankruptcy Code or any slIDllar successor Sectlons ~hlCh may hereafter be enacted. 605. Access to Slte and Facilltles. Clty agrees that Lessor and lts assignee shall have the r1ght at all reasonable tlmes and upon reasonable notlce to exaID1ne and 1nspect the Slte and the Facll1ties and the r1ght of access to the Slte and the Facll1t1es for such purpose. 606 Amendment. Th1S Lease Agreement may be amended 1n wr1t1ng by the partles hereto or by the1r ass1gnees on th~lr behalf or in the1r name for the purpose of (a) cur1ng any amblgu1ty or of curlng, correct1ng or supplementlng any defect1ve prov1s1on eontalned here1n, or (b) 1TI regard to questlons arls1ng under thlS Agreement whlch Clty may deem necessa J or deslrable and not lnconslstent ~lth the prOVls~ons of thlS agreement, provlded, ho~ever, that no such amendment shall adversely affect the exempt10n from Federal 1ncome caxat10n of the 1nterest component of Lease Payments or the lnterests of the Certlficate Owners, and provlded, fur- ther, that the partles hereto or thelr ass1gnees may rely in enterlng lnto any such amendment pursuant to this Sect10n 606 upon the op1nion of counsel whose oplnlon is acceptable by underwrlters ln the marketlng of tax-exempt obllgat~ons statlng that the requlrements of th~s sentence have been met w1th respect to such amendment. Th~s Lease Agreement may be amended in wrlt1ng by the partles hereto or by thelr asslgnees on thelr behalf or in thelr nam~ wlth respect to matters not included ~n (8) or (b) above upon approval of a maJorlty 1n aggregate prlnclpal amount of the Owners of the Certiflcates then Out- standlng; provided that no such amendment shall lmpalr the rlght of any Owner to recelve hlS proportlonate share of any Lease Payment 1n accor- dance with h1S Certlflcate Notwlthstand1ng the foregolng, no amendment~ to thlS Lease Agreement may confer any addltlonal obllgatlons on Lessor w~thout the prlor wrltten consent of Lessor, to be granted in 1tS sole dlscretion. 25 . . ARTICLE VII EVE~lS OF DEFA~LT A~D REHEDIES 701. Ev"nts of Default The follO\.:1ng shall b" "Ev"nts of Default" under thls Agreement and the term "Event of Default" shall mean, ~henever It 1S used In thls Agreement anyone or more of the fallo~lng events' (a) Fallure by C1ty to pay any Lease Payment required to be pald hereunder at the tlme spec1fled hereln and the cont1nuatlon of sald fallure to the Payment Date to whlch such Lease Payment pertalnSj or (b) Failure by Clty to observe and perform any covenant, condltlon or agr"ement on ltS part to be observed or performed, other than as referred to ln clause (a) of the SeCtlOn 701, for a p"rlod of thlrty (30) days after ~rltten notlce speclfYlng such fallure and requestlng that It b" remedled has been glven to City by Lessor or ltS asslgnee, unless Lessor or lts asslgnee shall agree ln wrltlng to an extenslon of such tlme prlor to its explratlon, provlded, however, lf the fallure stated ln the notlce cannot be corrected wlthln the appllcable perlod, Lessor or ltS asslgnee wlll not: unreasonably wlthhold ltS consent to an extension of such tlme If correctlve actlon lS institut~d by Clty w1thln the appllcable perlod and dlllgently pursued untll the default lS corrected, or (c) A court havlng Jur1sdictlon in the premlses shall enter a decree or order for rellef In respect of City In an lnvoluntary case under any appl~cable bankruptcy, lnsolvency or other slm~lar law now or hereafter in effect, or appolntlng a recelver, llquldator, asslgnee, custod1an, trustee, sequestrator (or slrollar offlc~al) of Clty or for any substant~al part of ltS property, or orderlng the w~nd~ng up or llqulda- tlon of 1tS affa~rs, and such decree or order shall remaln unstayed and 1n effect for a perlod of Slxty (60) days, or (d) Clty shall commence a voluntary case under any appll- cable bankruptcy, lnsolvency or other slmllar law no~ or hereafter In effect, or shall consent to the entry of an order for rellef In an invol- untary case under any such law, or shall consent to the appolntment of or taklng posseSSlon by a recelver, l1quldator, asslgnee, trustee, custodlan, sequestrator (or slmllar off~clal) of City or for any substantial part of its property, or shall make any general asslgnment for the benefIt of credltors, or shall fall generally to pay lts debts as they become due or shall take any corporate actlon In furtherance of any of the foregolng. 26 . . 702. Remed~es on Default. (a) Upon the happen~ng of any of the Events of Default spec1f1ed 1n Sect10n 701 hereof, Lessor or 1tS ass1gnee may eXerc~se any and all remed1es ava1lable pursuant to law or granted pursuant to th1S Agreement. In the event of an Event of Default, C1ty shall, as here1n expressly prov~ded, contlnue to rema1n llable for the payment of Lease Payments and damages for breach of th1S Agreement and the performance of all condit1ons here1n contalned and, 1n any event, such Lease Payments and damages shall be payable to the Lessor or 1ts asslgnee at the t~me and 1n the manner set forth 1n paragraphs (1) and (2) of thlS subsectlon (1) In the event that Lessor or ltS ass1gnee does not elect to term1nate th1S Agreement pursuant to paragraph (2) belo~, CLty agrees ta and shall remalr. llable for the payment of Lease Pa~~ents and the performance of all condltlons herein contalned and shall relm- burse Lessor or lts asslgnee for any deflclency arls1ng out of the relet- tlng of the Slte and the Faclllties, or, 1n the event that Lessor or 1ts assignee lS unable to relet the Slte and the Fac111t1es, then for the full amount of the Lease Payments to the end of the term of th1S Agree- ment, but sa1d Lease Payments or deflc1ency shall be payable only at the same t1me and ln the same manner as provlded 1n Sectlon 403, not~~th- stand1ng any SUlt ln unla~ful detalner, or otherwlsq, brought by Lessor or its asslgnee for the purpose of obta1ning possess10n of the Slte and the Fac1lltles or the exerClse of any other remedy by the Lessor or ltS ass~gnee City hereby 1rrevocably appolnts LeS50r or ~ts ass1gnee as the agent and attorney-~n-fact of Clty to enter upon and relet the S~te and the Faclllt~es 1n the event of default by C1ty Clty hereby exempts and agrees to save harmless Lessor and ltS aSS1gnee from any costs, loss or damage whatsoever (lnclud1ng, wlthout Ilmltat1on, reasonable attorneys' fees) ar1s1ng or occas10ned by any such entry upon and lett~ng of the Slte and the Facilitles, except for any such costs, loss or damage arising from the gross negl1gence or w1l1ful mlsconduct of Lessor or lts asslgnee. C1ty hereby wa~ves any and all cla1ms for damages caused, or WhlCh may be caused, by Lessor or ~ts ass1gnee 1n tak~ng possession of the S~te and the Fac11~tles, for all clalms for damages that may result from the destructlon of or lnjury to the Slte and the Facillt1es, and all cla1ms for damages to or loss of any property belonging to Clty that may be 1n or upon the S~te and the FaClllt1es, except for damages or loss arlslng from the gross negllgence or w1l1ful mlsconduct of Lessor or lts asslgnee C1ty agrees that the terms of th1S Agreement const~tute full and sufflc1ent not1ce of the rlght of Lessor or ltS ass1gnee to relet the Site and the Fac11lt1eS w1thout effectlng a surrender of th1S Agreement, .~ and further agrees that no acts af Lessor or 1ts ass~gnee 1n effect~ng such relett1ng shall canst1tute a surrender or term1nat1on of th1S Agree- . ment 1rrespect1ve of the term for whlch such relett1ng 1S made, or of the terms and cond1tlons of such relett1ng, or otherw~se, but that, on the contrary, In the event of such default by Clty, the right to termlnate thls Agreement shall vest 1n Lessor or lts ass1gnee to be effected 1n the 27 . . sole and eXcluslve manner herelnafter provlded for ln paragraph (2) below. (2) Upon an Event of Default, Lessor or its assignee may, at ltS optlon, termlnate thlS Agreement followlng ten (10) days' wrltten notlce thereof to City. In the event of termlnatlon of thlS Agreement by Lessor or ltS assignee on account of an Event of Default (and notwlthstandlng any resublettlng of the Slte and the Facllltles), Clty nevertheless agrees to pay to Lessor or to lts asslgnee all costs, loss or damages howsoever (lncludlng, wlthout Ilmitatlon, reasonable attorneys' fees) arlslng or occurrlng payable at the same tlme and In the same manner as in the case of payment of Lease Payments hereunder. Lessor or ltS asslgnee may resublet the Slte and the FaCllltleS. ~aneys recelved from such resublettlng and any surplus recelved by Lessor or ltS asslgnee from such resublettlng shall be the absolute property of Lessor or lts asslgnee and Clty shall have no rlght thereto. Nelther notlce to pay rent or to deliver up possession of the Site and the Faclllties glven pursuant to law nor any proceedlng ln unlawful detalner taken by Lessor or its asslgnee shall of ltself operate to termlnate thlS Agreement, and no termlnatlon of thls Agreement on account of default by Clty shall be or become effectlve by operatlon of law, or otherWlse, unless and until Lessor or lts asslgnee shall have glven wrltten notlce to Clty of the electlon on the part of Lessor or ltS asslgnee to termlnate thlS Agreement (b) Each and all of the remedles given to Lessor and lts asslgnee hereunder or by any law now or hereafter enacted are cumulatlve and the exerClse of one rlght or remedy shall not lmpalr the rlght to Lessor or ltS ass~gnee to exerClse any or all other remedies. 703 Suits at Law or ln Eq~lty and Mandamus In addltlon to the remedles set for~h In Secclon 702 hereof, In case one or more of the Events of Default shall happen, then and 1n every such case, Lessor and ltS asslgnee shall be entltled to proceed to protect and enforce the rlghts vested ln Lessor and lts ass1gnee by th1S Agreement by such appro- prlate Judlc1al proceed1ng as Lessor or lts asslgnee shall deem most effectual to protect and enforce any such rlght, ~lther by SUlt ln equlty or by actlon at law, whether for the speciflc performance of any covenant or agreement con~alned In ~hlS Agreement, or to enforce any o~her legal or equ1table rlght vested ln Lessor and its asslgnee by thlS Agreemen~ or by law. The provislons of thlS Agreement and the dutles of Clty and of the members, offlcers and employees thereof shall be enforceable by Lessor or 1tS asslgnee by mandamus or other appropriate SUlt, actlon or proceedlng ln any court of competent ]urlsdlctlon (a) Wlthout llmltlng the generallty of the foregOlng, Lessor and ltS asslgnee shall have the rlght: 28 . . (1) Accountln~. By act10n or SU1t 1n equity to requ1re the C1ty and 1tS officers, agent and employees and its ass1gns to account as the trustee of an express trust. (11) InJunctlon. enjOin any acts or things ~hich may r1ghts of Lessor or 1tS asslgnee By actlon or SUlt ln equlty to be unla~ful or in violation of the (111) Mandamus By mandamus or other su~t. actlon or proceeding at law or in equlty to enforce ltS or their rlghts aga1nst City and its and any of lts officers, agents, and employees and ltS aSSigns, and to compel it or them to perform and carry out its and the1r dut1es and obligations under the law and 1tS and the1r covenants and agreements w1th Lessor as prov1ded here1n 704. Non-~a1ver. ~oth1ng in thlS Artlcle VII or ln any other provls1on of thlS Agreement shall affect or lmpalr the obl1gat1on of Clty to pay the Lease Payments, as herein prOVided. ~o delay or om1SSion of Lessor or ltS aSSignee to exerCise any rlght or power arls1ng upon the happening of any event of default shall impalr any such right or power or shall be construed to be a waiver of any such event of default or any acquiescence therein, and every power and remedy given by th1s Artlcle VII to Lessor and ltS asslgnee may be exerc1sed from tlme to t1me and as often as shall be deemed expedlent by Lessor or its asslgnee. 705. Remedles nOl ExclUSive. No remedy hereln or by law con- ferred upon or reserved to Lessor and ltS aSSignee lS intended to be exclus~ve of any other remedy, but each such remedy 1S cUmulat~ve and ln addltlon to every other remedy, and every remedy glven hereunder or now or hereafter eXlstlng, at law or ~n equlty or by statute or otherw~se ~ay be exerCised ~lthout exhausting and w1thout regard to any other remedy conferred or by any law. 706 Status Quo Ante In case any SUlt, action or proceedlng to enforce any rlght or exerC1se any rewedy shall be brought or taken and then discontinued or abandoned, then, and ln every such case, Lessor and lts aSSignee and Clty shall be restored to its and thelr former posltlon and rights and remedles as if no such SU~t, actlon or proceedlngs had been brought or taken. 29 . . ARTICLE VIII AD~IKISTRATIVE PROVISIO~S 801 Preservat~on and Inspect~on of Documents. All documents rece1ved by Lessor or 1tS ass1gnee or C1ty under the prov1s1ons of th~s Agreement shall be reta~ned 1n the1r respect1ve possessIons and shall be subject at all reasonable t~mes to the InspectIon of the other party hereto and 1ts aSSIgns, agents and representatIves, any of whom may make cop~es thereof 802 PartIes in Interest Noth~ng 1n thIS Agreement, expressed or ~mpI1ed, ~s Intended to or shall be construed to confer upon or to gIVe to any person or party other than Lessor and Its ass~gnee and C~ty any rIghts, remedIes or claIms under or by reason of thIS Agreement or any covenants, cond~tlon or stIpulatIon hereof; and all covenants, stlpulat1ons, promIses and agreements In thIS Agreement contaIned by or on behalf of Lessor or CIty shall be for the sole and exclUSIVe benef~t of Lessor and 1tS aSSIgnee and C~ty 803 No Recourse Under Agreement. All covenants, st~pulat~ons, promISes, agreements and obllgat~ons of the partIes hereto contaIned ~n thIS Agreement shall be deemed to be the covenants, stIpulatIons, promIses, agreements and obl~gat~ons of the partIes hereto, respectively, and not of any "ember, off1cer, employee or agent of the partIes hereto In an 1ndIv~dual capaCIty, and no recourse shall be had for the payment of the Lease Payments or for any claIm based thereon or under th~s Agreement agaInst any member, offIcer, employee or agent of the partIes hereto. 804. Notices. All notIces, certIf1cates or other commun~cations hereunder shall be suffIc~ently g~ven and shall be deemed g1ven when delIvered or depOSIted In the Un1ted States mail w~th postage fully prepaid. If to Lessor: Secur~ty PacIf~c NatIonal Bank 300 South Grand Avenue 21st Floor 8-211 Los Angeles, CA 90071 Attn: Richard H. Clark If to C~ty: CIty of Santa MonIca 1685 Ma~n Street Santa ~onIca, CA 90401-3295 Attn CIty Manager 30 ~ . . w~th a copy ~o: C~ty of San~a ~on~ca 1685 Ma~n Street Santa Mon~ca, CA 90401-3295 Attn C~ty Attorney Santa ~on~ca A~rport 3200 A~rport AVenue Santa ~on~ca, CA 90405 Attn: A~rport D~rector The parties hereto, by notlce glven hereunder, may, respectlvely, deslgnate d~fferent addresses to wh~ch subsequent notlces, cert~f~cates or other commun~cat~ons wlll be sent. A copy of all notices to one party tD th~s Agreement shall be transm~tted to the other party tD th~s Agreement, and to the Trustee 805 B~nd~ng Effect. ThlS Agreement shall inure to the beneflt Df and be b~ndlng upon LessDr and C~ty and thelr respect~ve successors and ass~gns. 806. Severab~llty. If anyone or more of the cDvenants, st~pu- lat~Dns, prom~ses, agreements or obl~gat~ons prDvided In th~s Agreement Dn the part of Lessor or Clty tD be performed should be determ~ned by a court Df competent Jurlsdlctlon to be contrary to law, then such cove- nant, st~pulatlon, promlse, agreement or obllgatlon shall be deemed and construed to be severable from the remainlng covenants, stlpulat~ons, promlses, agreements and obllgatlons here~n contalned and shall ln no ~ay affect the valldlty of the other provlslons of thls Agreement. B07. Headlngs. Any head~ngs preced~ng the text Df the several Art~cles and Sect~ons hereDf, and any table of contents or marglnal notes appended to coples hereof, shall be solely for conven~ence Dr reference and sijall not constltute a part of thlS Agreement, nor shall they affect lts meaning, constructlon or effect. B08, Appllcable Law. This Agreement shall be governed by and construed ~n accordance wlth the laws of the State of Callfornla 809. Lessor and City Representat~ves. Whenever under the praVls~ons of thlS Agreement the approval of Lessor or C~ty ~s requlred or Lessor or Cl~y are reqUlred ~o take some aC~lon a~ ~he request of the other, such approval of such request may be glven for Lessor by an Author~zed Offlcer of Lessor and for C~ty by an Author~zed Offlcer of Clty, and any party hereto shall be author1zed to rely upon any such approval or request 810. Further Assurances Lessor and Clty agree that they will, from tlme to tlme, execute, acknowledge and de11ver, or cause to be executed, acknowledged and del1vered, such supplements hereto and such 31 - . . further instruments as may reasonably be requIred for correctIng any Inadequate or Incorrect descrIptIon of the SIte and the FaCIlItIes hereby leased or Intended so to be or for carrYIng out the expressed IntentIon of thIs Agreement 811. Form of CertIfIcate of OffIcers Every certifIcate ~Ith respect to complIance wIth a condItIon or covenant prOVIded for In thIS Agreement and ~hIch is precedent to the takIng of any action under thIS Agreement shall Include: (a) A statement that the person makIng or gIVIng such certIfIcate has read such covenant or condItIon and the defInItIons hereIn relatIng thereto; (b) A brIef statement as to the nature and scope of the examInatIon or InvestIgatIon upon ~hlch the statements or opInIons con- taIned In such certIfIcate are based, (c) A statement that, In the opinIon of the SIgner, SIgner has made or caused to be made such examInatIon or InvestIgatIon as IS necessary to enable the SIgner to express an Informed opInIon as to whether or not such covenant or condItIon has been complIed WIth, and (d) A statement as to whether, In the opInIon of the SIgner, such condItIon or covenant has been complIed WIth. A certifIcate may be based, Insofar as It relates to legal ~atters, upon a certIfIcate or opInIon of or representatIons by counsel, unless the persons prOVIdIng the certIfIcate know that the certIfIcate or representatIons WIth respect to the matters upon whIch the certIfIcate may be based are erroneous, or In the exerCIse of reasonable care should have known that the same were erroneous. 812. BUSIness Days. Any act or thIng reqUIred to be done or eXIst on any date set forth hereIn ~hlch does not constItute a bUSIness day In any year shall be deemed to be done or to eXIst on such date If such act or thIng IS done or eXIsts on the next date ~hICh constItutes a business day of banks 1n the C1ty of Los Angeles, Ca11forn1B 32 ~, - - . IN ~IT\ESS hHEREOF, the partles hereto have caused this Agree- ment to be executed In thelr respectlve names by thelr duly authorlzed offlcers as of the date flrst above ~rltten SECLRITY PACIFIC ~ATIO\AL BA~K. as Lessor By Vlce Presldent By . V:lce Presldent APPROVED AS TO FORM. CITY OF SA!'\TA HO'\ICA, as Lessee By Clt)' Manager Robert M ~yers Clty Attorney [SEAL] Attest: Clty Clerk 33 ~ . :: TRUST AGREE~lE"T RtLATIKG TO AIRPORT FACILITIES by and among . BA\I\ OF A~lERICA J\ATIO\AL TRUST A!\D SAVIJ\GS ASSOCIATIOK. as Trust.ee and THE CITY OF SA\TA ~OKICA and SEC[RITY PACIFIC ~ATIO~AL BA~K, as Lessor Dated as of October 1, 1985 . . TABLE OF CO\iE\'TS ARTICLE I RECITALS A~D REPRESE\TATIO~S 101 102 103. 104. Ground Lease. . . . . Lease Agreement . . . AssIgnment Agreement Condl:lons Precedent SatIsfIed. ARTICLE II DEFl~ITI0~S ~,~ RCLES OF CO~SiRUCTI0~ 201- 202 DefInitIons . . . . . Rules of ConstructIon ARTICLE III APPQl~~fE\'T or TRUSTEE 301 302. AppOIntment of Trustee Acceptance of ApPOIntment and Trust ARTICLE IV ESTABLIS~~E~'T A~D AD~I~ISTRATION OF FU~~S k~D ACCOC~iS 4Cl 402 AIrport FaCIlItIes Trust Fund. . . . . . EstablIshment of AcqUISItIon and ConstructIon Account; Payment of AcqUISItIon and Construction Costs . . . . . EstablIshment and ApplIcatIon of DelIvery Costs Account EstablIshment and ApplIcation of Lease Payment Account EstablIshment and ApplIcation of Reserve Account EstablIshment and ApplIcatIon of SpeCIal RedemptIon Account . . . No Cnauthorlzed Transfers . . DepOSIt and Investment of Moneys in Accounts Credit Against Lease Payments . . 403 404. 405. 406. 407. 408. 409. i Page 1 1 1 1 2 6 6 7 7 7 10 10 11 12 12 12 14 . . ARTICLE V THE TRLSTEE 501-. 502. 503 Trustee, DutIes, Removal and ResIgnatlon Compensaclon of the Trustee Protectlon to the Trustee ARTICLE VI CERTIFICATES TERMS A~~ PROVISIO~S 601. 602. 603. 604 Preparatlon of CertIfIcates . form, Denominatlon, ~edIum of Payment Date of CertIfIcates Pay~ent of PrIncIpal and Interest wIth Respect to CertIfIcates Place of Payment ~umbers; Legend3 ExecutIon Transfer and Exchangp of CertIfIcates RegulatIon WIth Respect to Exchange and Transfers CertIfIcate RegIster Temporary CertIfIcates CertIficates MutIlated, Lost, Destroyed or Stolen EVIdence of SIgnatures of CertIfIcate Owners and Ownershlp of CertIfIcates RedemptIon Redemptlon Fund ~otIce of RedemptIon Payment on RedemptIon of CertlfIcates Partlal Redemptlon of CertIfIcates. 60S 606 607. 608 609 610 611 612. 613 614 615 616 617. 618. ARTICLE VII COvLNA~TS: LIMITATION OF LIABILITY 701 702 703. 704. 705. Clty to Perform Lease Agreement . Lessor to Perform Lease Agreement ActIon on Default. . . . . . . . No Obllgatlon by CIty to Owners . No Obllgatlon WIth Respect to Performance by Trustee Ii Pa~e 14 15 15 16 17 17 17 18 18 18 18 19 19 19 20 21 21 22 23 23 24 24 24 24 24 25 . 706 707 70B ~o LI8b~1~ty to Owners for Payment No Responslbll~ty for SufflcIency Indemnlf~cat~on to Trustee ARTICLE VIII . AME~D~E\l: DErEASA~CE. AD~I~ISTRATIVE PROVISIOKS 801 802 803. 804. 805. 806. 807. 808. 809 810 Amendment Defeasance Record~ng and FIlIng. Trustee to Keep Records NotIces . Californ18 La.... SeverabIlny. . BIndIng on Successors HeadIngs Counterparts ExhIbIt A' Form of CertIfIcate of PartIcIpation ill Page 25 25 25 25 26 27 27 27 28 28 28 28 28 . . 11679 00000002/091136-L TRUST AGREEMEt-.'T RELATING TO AIRPORT FACILITIES THIS TRUST AGREEME~'T RELATI~G TO AIRPORT FACILITIES (the "Ag.:reement") is made and en'tered ~nto as of Oc'tober 1, 19B5, by and among BA\~ OF AMERICA ~ATIO~AL TRUST A~D SAVINGS ASSOCIATION, a nat~onal trust and sav~ngs assoc~at~on under the la~s of the Un~ted States of A~er~ca and qual~f~ed to accept trusts of the type here~n set forth (here~n called "Trustee"), SECURITY PACIFIC NATIOI\AL BAIW. a natlonal banklng assoclatlon. (here:m called "Lessor"), and the CITY OF SA~"'TA 'JOKICA, a charter Clty and munlclpal corporatlon organized and operatlng under the 1a".s of the State of Cahfornla (hereln called "Clty"), wITKESSETH In conslderation of the mutual covenants hereln contalned and for other valuable conslderat~on, the partles hereto do hereby agree as follows. ARTICLE I RECITALS A~~ REPRESE\lATIO~S 10I. Lease, agreed Ground Ground Lease C~ty and Lessor have entered 1nto the Ground whereby Clty has agreed to lease the SIte to Lessor and Lessor has to lease the Slte from C~ty for the consIderat1on stated 1n the Lease. 102. Agreement, Facll~tles Fac~l1tIes Lease Agreement. Lessor and C~ty have entered into the Lease whereby Lessor has agreed to sublease the S~te and lease the to C~ty and City has agreed to sublease the S~te and lease the from Lessor and to make Lease Payments therefor. 103. Ass1gnment Agreement. For ~he purpose of obta~n1ng ~he moneys requ~red to be depOSIted by ~t ~lth the Trus~ee, Lessor has ass~gned and transferred its r1ghts and interest 1n the Lease Agreement to the Trustee, pursuant to the Ass1gnment Agreement, and 1n conslderatlon of such aSSIgnment and the execut10n of thIS Agreemen~, the Trustee has agreed to execute and delIver Certlflcates, each eVldenclng an 1nterest in the Lease Pa}~ents, as set forth ~n such Cert~fIcates. 104. Cond~tions Precedent Satlsf~ed. All th1ngs, conditions and acts reqUIred by law to eXIst, happen and be performed precedent to and in connectlon WIth the executIon and enter~ng Into of th1S Agreement do eX1st, have happened and have been performed 1n regular and due tIme, . . form and manner as required by law and the partles hereto are now duly empowered to execute and enter into thlS Agreement. ARTICLE II DEFI~ITIO~S ~~D ReLES OF CO~STRUCTION 201. Deflnltlons. The terms def1ned 1n th1S Sect10n 201 shall have the meanlTIgs, for the purpose of thlS Agreement, hereln speclfled, as follows. AcQUls1tion and Constructlon Account. The term "Acqulsltlon and Constructlon Account" means the account by that name estabhshed under, and held by the Trustee pursuant to, Section 402 of this Trust Agreement. AcqulSltlOn and Constructlon Costs The term "Acquls1tlon and Con- struct10n Costs" means all costs of payment of, or relmbursement for, acquls1tlon, constructlon and lnstallatlon of the Facl1ltleS, lnclud1ng but not I1mlted to, archltect, engineer, project manager and constructlon supervislon costs, construct1on contractor payments, and costs of feasl- bl11ty, env1ronmental and other reports, bUllders' rlsk lnsurance premlums, lnlt1a1 hazard and 11abl11ty lnsurance premlums, tltle lnsurance costs, lnspectlon costs, permlt fees and flllng dnd record1ng costs, and, 1n addlt10n, Del1very Costs to the extent that the arr0unt on deposlt ln the Delivery Costs Account are lnsufflc1ent :0 pay all Dellvery Costs In full. Asslgnment Agreement The term "Asslgnment Agreement" means the Asslgnment Agreement Relatlng to Alrport Facllltles, dated as of October 1, 1985, by and between Lessor and the Trustee, as now or here- after amended. Authorlzed Offlcer. The term "Author12.ed Off1cer", when used 1o.:1th respect to Lessor means any Vlce Pres1dent of Lessor or any other offlcer of Lessor who is des1gnated by the Lessor as an Authorized Offlcer for purposes of the Lease Agreement. The term "Authorized Offlcer," 1,;hen used wlth respec~ to C1ty, means the Mayor, C1ty Manager, Clty F1nance D1rector or A1rport Director or thelr deputles or asslstants or any other off1cer or employee of C1ty ~ho is des1gnated by the C1ty Councll or the C1ty Manager as an Authorlzed Offlcer for purposes of thlS Agreement. Certlflcate Reg1ster The term "Cert1flcate Reglster" means ~he books for reg1straLlon malntalned by the Trustee pursuant to Section 610 of Lhe Trust Agreement. 2 . . Certlflcates. The term "Certlflcates" means the certiflcates of partlclpatlon prepared and dellvered by the Trustee pursuant to the Trust Agreement. Clty. The term "Clty" means the Clty of Santa Honlea, Californla. Dell\'ery Costs. The term "Dellvery Costs" means all costs of pay. meRL of or relmbursement for executlon, sale and dellvery of the Lease Agreement and the Certificates, lncludlng, but not llmited to, costs paid or incurred by C1ty, Lessor or the Trustee for f1llng costs, prlntlng costs, reproductlon and b1ndlng costs, fees and charges of the Trustee, flnanclng dlscounts, legal fees and charges and relmbursements, flnanclal and other professlonal consultant fees and charges and relmbursements, audltors fees and charges and relmbursements, costs of ratlng agencles or credlt ratlngs, fees for executlon, reglstratlon, transportatlon and safekeeplng of Certlflcates, munlclpal bonds lnsurance premlums, lf any, and other charges and fees 1n connectlon wlth the foregolng. Dellvery Costs Account. The term "Dellvery Costs Account" means the account by that name establlshed under and held by the Trustee pursuant to Sectlon 403 of the Trust Agreement. Event of Default The term "Event of Default" means an event of default under the Lease Agreement as set forth 1n Sectlon 701 of the Lease Agreement. FaClllt1es. The term "Facllltles" means the alrport facllltles located and to be located on the Slte conslstlng generally of a hangar and an admlnlstratlon bUlldlng. Federal Securltles. The term "Federal Securltles" means Unlted States Treasury notes, bonds, bllls or certlflcates of lndebtedness or obllgatlons for whlch the full falth and credlt of the Unlted States are pledged for the payment of princ1pal and interest, 1ncludlng Unlted States Treasury (book entry) certlflcates, notes and bonds, state and local government serles. Lease Agreement. The term "Lease Agreement" means the Lease Agree- men~ Relatlng to Alrport Fac1lltles, dated as of October 1 1985, by and between Lessor as lessor, and C1ty, as lessee, as now or hereafter amended. Lease PaYMent Account. The term "Lease Payment Account" means the account by that name establlshed under, and held by the Trustee pursuant to, Sect10n 404 of the Trust Agreement. Lease Pavments. The term "Lease Payments" means lease payments payable by Ci~y for the use of the Slte and the Faclllt1es pursuant to the Lease Agreement. 3 . . Lessor. The term "Lessor" means Securlty Paclflc Natlonal Bank, a natlonal banklng assoclatlon, as Lessor under the Lease Agreement. I'et Proceeds The term "Net Proceeds", when used "'lth respect to any Insurance or condemnation award. me3ns the gross proceeds from the lnsurance or condemnatlon a~ard "'lth rpspect to ",hlCh that term 15 used remalnlng after payment of all expenses Incurred In the collection of such gross proceeds. .. Outstandlng. The term "Outstandlng" Ioihen used loath reference to the Certlflcates and as of any partlcular date means all Certlflcates theretofore dellvered except. (a) any Certlflcate cancelled by the Trustee at or before saId date and (b) any certlficate ln lleu of or in Substltutlon for whlch another certlflcate shall have been dellvered pursuant to the Trust Agreement. OIoner. The term "()>;oner" or "CertIflcate ()>;oner" or "(l\.mer of Cer'tlflcates" or any slmllar term when used Ioilth respect to the Certlflcates. means any person who shall be the reglstered owner of any Outstandlng Certlflcate Payment Date. The term "Payment Date" means Apn.l 1 and October 1 of each year commenclng WIth Aprl1 1, 1986. Permitted Encumbrances The term "Permlt~ed Encumbrances" means If and to the ex'tent permltted by law and by any POlICY gUIdelInes promul- gated by Clty. (1) Ad valorem taxes and assessments for the current flscal year of Cny. (li) Easements, rlghts-of-way, mlneral rIghts and other rIghts. covenants, condltlonS of restrlct~ons WhlCh in the Judgment of Clty do not Impalr or ~rnpedp or otherwlse adversely affect constructlon or oper- at~on of the Faclllt~es or access to the Fac1lltles by Lessor or ItS ass1gnee. (lli) Lease Agreement. (IV) The Asslgnment Agreement. Permltted Investments. The term "Permltted Investments" means. (1) Federal Securltles, (il) Obllgatlons of the Export-Import Bank of the Unlted States, the Unlted States Postal Servlce, the Government NatIonal Mortgage Assoclatlon, the Federal Natlonal Mortgage ASSOclatlon, the Federal Farm eredlt Bank, the Federal Flnancing Bank, the Federal Intermedlate Credlt Banks, the Federal Banks for Cooperatlves, the 4 . . Federal Land Banks, ~he Farmers Home Admlnlstratlon and the Federal Home Loan Mortgage Corporatlon, ~he Student Loan MarketIng Associatlon or any agency or InstrumentalIty of the federal government ~hICh shall be establlshed for the purposes of acqulrIng the obllgations of the foregoIng or othe~'lse provldlng fInancIng therefor, (Ill) PrOject notes Issued by publIC agencles or munIcIpalltles aqd fully secured as to the payment of both prlnclpal and Interest by a requISItIon or payment agreement wlth the unIted Statesj (lV) Negotiable certlflcates of deposlt or tIme deposIts (In- cludlng, ~Ithout 11mltatIon, certlflcates of deposlt) Issued by any bank, organlzed under the la~s of any State of the Unlted Sta~es of Amerlca or any natIonal banking assoclatlon IncludIng the Trustee, provIded ~hat such deposIts shall be (1) contInuously and fully Insured by the Federal Deposit Insurance Corporatlon, or (11) Issued by any bank organIzed under the laws of any state of the Unlted States, or any natIonal banklng asso- clatlon (Includlng the Trustee), whlch is rated, or ~hose general oblIga- tIons are rated,~or better by :1oody's Investors SerVIce, Inc. <"'1ood}-'s") or AA or better by Standard & Poor's Corporatlon ("S&P"), or (Ill) any , bank, trust company or savlngs and loan assocIatIon contlnuously and fully secured by such securltles as are descrlbed above in clauses (1) or (11) of thIS deflnltlon. ~hlch securlties shall have a market value (ex. cluslve of accrued Interest) at all tImes at least equal to the prlnclpal amount of such certIflcates of deposlt; (v) Any repurchase agreement wlth any bank or trust company organIzed under the laws of any state of the Unlted States or any natlonal banklng assoclatlon (lncludlng the Trustee) or government bond dealer reportlng to, tradIng ~lth and recognlzed as a prImary dealer by, the Federal Reserve Bank of Ke~ Yorkr~h1Ch IS rated, or ~~ose ~eneral obll- ~atlons are ratedl A-lor better by '1oody's or A+ or better by S&P1 whlch agreement IS secured by anyone or more of the securltles descrIbed 1n clauses (i) or (ii) of th1S def1nitlon, prov1ded the underlYlng securi- ties are requlred by the repurchase agreement to be held by any such bank, trust company or prlmary dealer havlng a comblned capltal and sur- plus of at least $500,000,000, and provlded the securitIes are marked to market at least every two weeks and maIntaIned on such marked to market basls at a market value not less than the amount so lnvested, and (vi) Bills of exchange or tlme drafts drawn on and accepted by a commerclal bank ~~lch IS rated, or whose ~eneral obl1~atlons are rated, .A-I or better by ~oody's or A+ or better by S&pl othe~'lse known as bankers acceptances, whIch are ellglble for purchase by the Federal Reserve System. Such bankers acceptances may not exceed 181 days maturIty. Prlnclpal DfflC~. The term "Pn_nclpal OffIce" means the prlncipal corporate trust offlce of the Trustee In Los Angeles, Callfornla. s . . RedemptIon Fund. The term "RedemptIon Fund" means the fund by that name establ1shed under, and held by the Trustee pursuant to, Sect10n 615 of th1s Trust Agreement. Reserve Account The term "Reserve Account" means the account by that name establ1shed under, and held by the Trustee pursuan~ to, Sect10n 405 of th1s Trust Agreement. Reserve Requ1rement The term "Reserve Reql.arement" means an amount equal to the largest of the annual Lease Payments as sho~n 1n Exh1b1t B to the Lease Agreement. SIte. The term "Sne" means the real property more partIcularly descr1bed In Exh1b1t B attached to the Lease Agreement. Special RedemptIon Account. The term "Special Redempt10n Account" means the account by that name establ1shed under, and held by the Trustee pursuant to, Sect10n 406 of th1s Trust Agreement. Trust Agreement. The term "Trust Agreement" means the Trust Agree- ment RelatIng to A1rport FacIllt1es, dated as of October I, 1985, by ~~d among the Trustee, Lessor and CIty, as now or hereafter amended. Trustee The term "frustee" means Bank of AmerIca I'at10nal Trust and Sa.lngs AssocIatIon or ItS successors In Interest actIng as Trustee under the Trust Agreem nt. 202 Rules of ConstructIon Words of the masculine gender shall be deemed and construed to Include correlatIve words of the fem1n1ne and neuter genders. Unless the context otherw1se IndIcates, ~ords 1mportlng the slngular number shall 1nclude the plural number and V1ce versa, and words ImportIng persons shall Include corporat1ons and aSSoc1at1ons, 1ncludlng publIC bodIes, as well as natural persons. The terms "hereby," "hereof," "hereto," "here1n," "hereunder," and any SImIlar terms, as used 1n th1S Agreement, refer to thIS Agreement. ARTICLE II I APPDlt\'TI1E"-'T OF TRUSTEE 301 AppOIntment of Trustee. In cons1derat10n of the recItals hereInabove set forth and for other valuable conslderac10n, Lessor and CIty hereby appo1nt the Trustee to receIve, hold, 1nvest and dIsburse the Lease Payments to be paId to it pursuant to the Lease Agreement 1n trust to have and to hold for the benef1t of the Cert1f1cate ~~ers for cred1t to the varIOUS funds and accounts establIshed by thIS Agreement; to pre- pare, execute, delIver and deal ~lth the Cert1f1cates, and to apply and 6 . . d1sburse the Lease Payments to the ~ners of Certif1cates, and to perform certain other funct10ns, all as herelnafter provlded and subject to the terms and condltlons of thlS Agreement. 302 Acceptance of Appointment and Trust In cons1derat1on of the compensatlon herelnafter provlded for, the Trustee accepts the appoint- ment and trust above referred to subject to the terms and cond1t1ons of tlus Agreement. ARTICLE IV ESTABLISH~E\~ A~~ AD~I~ISTRATION OF FU~DS ~~~ ACCO[\~S 401. A1rport Fac1l1t1es Trust Fund. There is hereby establ1shed lnth the Trustee a spec1al trust fund to be designated the "A1rport FacIl1t1es Trust Fund". The Trustee shall keep sald A1rport Fac1l1tIes Trust Fund separate and apart from all other funds and moneys held by 1t. *lthln the Alrport Fac1lIt1es Trust Fund, there are hereby establlshed the Acqulsltlon and Construct1on Account more partIcularly descrlbed In SectIon 402, the Del1very Costs Account more particularly descrlbed 1n Sect10n 403, the Lease Payment Account more particularly descr1bed 1n SectIon 404, the Reserve Account more part1cularly descrIbed In Sec- t10n 405 and the Spec1al Redemption Account more particularly descr1bed in Sectlon 406. On the date of del1very of the Lease Agreement, the Trustee, as asslgnee of Lessor under the Asslgnment Agreement, agrees to depOSIt, from the proceeds of the Certlflcates, an amount equal to est1- mated Del1very Costs ln the Del1very Costs Account, an a~ount equal to 1nterest accrulng on CertlfIcates for a per10d of two and one-half years In the Lease Payment Account, an amount equal to the Reserve Requ~rement in the Reserve Account, and the remalnder of such proceeds 1n the Acqul- s~tion and Constructlon Account. 402. Establishment of Acquislt10n and ConstructIon Account; Payment of AcqUISItIon and Construct10n Costs (a) W1th1n the Alrport FacIl1ties Trust Fund, there 1S establIshed by Sect10n 401 a speclal account to be des~gnated "AcquIsit1on and Con- struct10n Account". The Trustee shall keep the AcquIsltIon and Construc- t10n Account separate and apart from all other funds and accounts held by ~t and shall adm1n1s~er the Acqu~sltion and Construct1on Account as pro- vided in thIS SectIon 402. (b) Amounts 1n the Acquisition and ConstructIon Account shall be disbursed for AcquIsltlon and Construction Costs. Subject to the requ1rements of subsectlon (c), d1sbursernents from the Acqulsitlon and Constrnct1on Account shall he made by the Trustee upon receipt of a certIf1cate requesting dIsbursement executed by an AuthorIZed Offlcer of Lessor or its agent. Each such certIflcate shall: 7 . . (1) set forth the amounts to be disbursed for payment or re1m- bursement of prevlous payments of Acqulsltlon and Constructlon Costs and the person or persons to whom sald amounts are to be dlsbursed; (11) state that the amounts to be dlsbursed constitute ACqUlSl- tlon and Constructlon Costs as sald term IS deflned in the Lease Agreement, that sald amounts are requlred to be d~sbursed pursuant to a contract entered lnto therefor by Lessor and were necessarlly and reasonably lncurred; and that sald amounts are not belng pald ln advance of the tlme, if any, flxed for payment; (111) state that no amount set forth In the certlficate was included In any certiflcate requestlng dlsbursement prevlously flIed wlth the Trustee pursuant to thls Sectlon; (lV) state that the amount remainlng In the Acquisltion and ConstructIon Account, together WIth estlmated Interest earnlngs thereon, wlll, after payment of the aIDount set forth ln the certIfIcate requestIng dIsbursement, be suffICIent to pay all remalnlng Acqulsltlon and ConstructIon Costs as then estlmated; (v) state that, If llquldated damages are to be Imposed through WIthholding payment from contractors, the Trustee shall WIthdraw fro~ the AcquIsltlon and Constructlon Account and transfer to the Trustee for deposit In the Lease Payment Account, and for appllcatlon as a credlt ~galnst Lease Payments, an amount equal to sald lIquidated damages; (vi) state that no Event of Default or event whIch, wlth the passage of tlme or givlng of notlce or both would constItute an Event of Default, has occurred and lS contlnulng; and (vil) state that no mechanlCS llens or stop notIces have been received or flIed ~lth respect to the Facllltles, except for liens or clalms as to whlch Clty has set aSlde or caused to be set aSlde reserves adequate for the payment thereof, provided that upon any proceedlngs to foreclose such l1ens or clalms Lessor or 1ts agent wlll promptly payor cause to be pald such llens or clalms unless contested In good falth by C1ty by approprlate proceedlngs. (c) Prlor to the lnltlsl disbursement of funds from the Acqulsitlon and Constructlon Account followlng recordatlon of the Lease Agreement, Clty shall depOSIt wlth the Trustee: (1) the tltle lnsurance policy requlred by Sectlon 509 of the Lease Agreement, (11) the oplnlon of counsel to Clty statlng that all approvals, consents, llcenses, certlflcates and permlts, whlch are condltlons prece. dent to the acqulSltlon, constructlon and lnstallatlon of the FaCllltles, 8 . . of any government or agency or bureau thereof, includlng Clty, havlng Jurlsdlctlon wlth respect to the Facllltles have been obtalnedj (111) complete plans and speciflcatlons for the constructlon of tpe Facllltles; (lV) the certlflcate of an Authorlzed Offlcer of the Clty statlng that such Authorlzed Offlcer has revlewed the plans and speci- flcatlons for the constructlon of the Facllltles, that such plans and speclflcatlons represent the complete plans and speclflcat10ns for the Faclllt1es (except as such cert1flcate may lndlcate) and that the slte on WhlCh the Fac1lltles are to be constructed pursuant to such plans and speclflcatlons lS the Slte descrlbed in Exhlblt A attached to the Lease Agreement, and (v) a fully executed contract for the constructlon of the Facllltles. (d) Each certlflcate requestlng dlsbursement whlch 1S submltted pursuant to subsectlon (b) and WhlCh relates to dlsbursement for con- structlon or lnstallatlon of a portion of the Fac1llt1es shall be accom- pan1ed by the certlflcate of an Authorlzed Offlcer of the Clty approvlng the certlflcate request1ng dlsbursement and certlfYlng that lnsofar as such certlf1cate relates to payment for work, materlsls, equ1pment or supplles, such work was actually performed, or such materlals, equlpment or supplles were actually lnstalled In furtherance of the constructlon and lnstallatlon of the Facllltles or dellvered to the Slte for such purpose, or dellvered for storage or fabrlcatlon at a place approved by Lessor. In addltlon, each certlflcate requestlng dlsbursement for con- struction of a portlon of the Facilltles represented by a contract there- for shall, prior to the lnltlal dlsbursement (made after the date of recordatlon of thls Agreement) under such contract be accompanled by the certlflcate of an Authorlzed Offlcer of the Clty statlng that such Autho- rlzed Offlcer has revlewed the flnal plans and speclflcatlons for sald portlon of the Facllltles and that the contract for constructlon thereof lS In accordance wlth SBld plans and speciflcatlons (e) Upon the earller of (i) the date of recelpt of the certlflcate of an Authorlzed Offlcer of Lessor that the construction of the FaClll- tles has been substantlally completed in accordance ~lth the plans and speclficatlons therefor or (11) Aprll 2, 1988, the Trustee shall transfer any amounts remalning ln the Acqulsltion and Constructlon Account into the Lease Payment Account and shall close the Acquislt10n and Con- structlon Account. Upon transfer of sald amounts to the Lease Payment Account, sald amounts shall be segregated into a separate subaccount and applled 8S a Credlt agalnst the prlnclpal component of the Lease Payments due by City foll~lng the date of such deposlt ln successive order untll full dlsbursement of sald amounts, proVlded that If prior to August 15, 1986, the Trustee shall not have recelved the documents requlred by sub- 9 . . sectIon (c), such amounts shall be transferred to the Special RedemptIon Account and applIed to redeem CertIfIcates In whole pursuant to SectIon 614(b) Upon such transfer the Trustee shall provIde wrItten notIce to CIty of the amount of such transfer WhIle held in such sub- account, saId amounts shall not be Invested at a YIeld In excess of the yield ~Ith respect to the CertIfIcates whIch IS produced by the Lease Agreement 403. EstablIshment and ApplIcatIon of DelIvery Costs Account (a) WIthIn the AIrport FacilItIes Trust Fund, there IS establIshed by SectIon 401 a speCIal account to be deSIgnated the "DelIvery Costs Account." The Trustee shall keep the DelIvery Costs Account separate and apart from all other funds and accounts held by it and shall admInIster the DelIvery Costs Account as prOVIded In thIS SectIon 403 (b) Amounts in the DelIvery Costs Account shall be dIsbursed for DelIvery Costs DIsbursements from the DelIvery Costs Account shall be made by the Trustee upon receIpt of a certIfIcate requestIng dIsburserr-ent executed or approved by an AuthorIzed Officer of CIty. SubJect to sub- sectIon (c) hereof, each such certIfIcate shall: (1) set forth the amounts to be dIsbursed for payment or reIm- bursement of preVIOUS payments of DelIvery Costs and the person or persons to whom saId amounts are to be dIsbursed; (11) state that the amounts to be dIsbursed constitute DelIvery Costs, that saId amounts are reqUIred to be dIsbursed pursuant to a con- tract entered Into therefor by or on behalf of Lessor or CIty, or were necessarIly and reasonably incurred, and that said amounts are not beIng paid In advance of the tIme, if any, fIxed for payment, (111) state that no amount set forth in the certifIcate was Included In any certIfIcate requestIng dIsbursement prevIously flIed WIth the Trustee pursuant to thIS SectIon; and (IV) state that the amount remaInIng in the Dellvery Costs Account WIll, after payment of the amount set forth In the CertIfIcate requeselng dIsbursement, be sufflc1ent to pay all rema1nIng DelIvery Costs as then est1mated. (c) Upon the earlIer of (i) the date of receIpt of s CertIfIcate executed by an AuthorIzed Offlcer of CIty seatIng that all Dellvery Costs have been paId or prOV1SIon for payment thereof has been made or (li) AprIl I, 1986, the Trustee shall transfer any amounts remaIning in the DelIvery Costs Account to the AcqUISItIon and ConSeructIon Account and the DelIvery Costs Account shall be closed 10 . . 404. EstablIshment and ApplIcatIon of Lease Payment Account (a) WIthIn the AIrport FaCIlItIes Trust Fund, there is establIshed by SectIon 401 a separate account to be deSIgnated the "Lease Pa}~ent Account". Such account shall be maIntaIned by the Trustee untIl the Lease Payments are paId In full pursuant to the terms of the Lease Agree- ment. Lease Payments paId to the Trustee, as aSSIgnee of Lessor pursuant to the Lease Agreement and to the ASSIgnment Agreement, shall be d~posIted by the Trustee In the Lease Payment Account. (b) The Trustee shall ~Ithdra~ from the Lease Payment Account, on each Payment Date, that amount of the annual Lease Payment due on the September 1 prIor to such Pay~ent Date as ~IIl be suffICIent for the purpose of, and shall cause the same to be applIed to, the payment of prIncIpal and interest payments due WIth respect to the Certlflcates on such Payment Date (d) Whenever there has been a prepayment, for any reaSDn, of Lease Payments, the Trustee shall prepare and transmIt to CIty and Lessor a reVIsed LeaSe Payment schedule reflectIng such prepayment, whIch schedule shall be labeled "Amended ExhIbIt B to Lease Agreement". 405 EstablIshMent and ApplIcatIon of Reserve Account. (a) WIthIn the Alrp~rt FaCIlItIes Trust Fund, there is establIshed by SectIon 401 a separate account to be deSIgnated the "Reserve Account " Such account shall be maIntaIned by the Trustee untIl the Lease Payments are paId In full pursuant to the terms of the Lease Agreement. (b) If on any Payment Date the amounts In the Lease Payment Account are less ~han the Lease Payments then due, the Trustee shall transfer from the Reserve Account to the Leasa Pa}-ment Account an amount suff1Clent to make up such defIciency In the event of any such transfer, the Trustee shall, WIthIn f1ve (5) days after makIng such transfer, prov1de wr1tten notIce to CIty of the amount and date of such transfer and CIty shall thereupon pay delinquent Lease Pa>~ents. (c) Moneys In the Reserve Account shall be (1) applied as a credIt aga~nst the last remaInIng 1nstallroents of Lease Payments and for that purpose shall be transferred to the Lease Payment Account by the Trustee not later than the f1rst day of the month prlor to the Payment Dates pertaInIng to such lnstallments, or (11) used for the purpose of mak1ng up defICIenCIes In the Lease Payment Account in the event that moneys 1n the Lease Payment Account are less than the Lease Payments then due on any Payment Date, and for the latter purpose moneys may be WIthdrawn from the Reserve Account and transferred to the Lease Payment Account, as proVlded In subsectIon (b). 11 . . (d) If on any Pa}~ent Date, the amount of all payments due and payable wlth respect to the Certlflcates exceeds the amount on hand In the Lease Payment Account, taklng Into account any transfers made from the Reserve Account pursuant to subsectlon (c), the Trustee shall apply the moneys on hand thereln flrst to the payment of all lnterest past due wlth respect to all Certlflcates, and second to the payment of that por- tlon of the unpald prInclpal balance of each CertIflcate whlch lS then p~st due, pro rata If necessary. Upon recelpt of any dellnquent Lease Payment wlth respect to whlch moneys have been advanced from the Reserve Account, such Lease Payment shall be deposlted ln the Reserve Account. 406 EstablIshment and Appllcatlon of Speclal Redewptlon Account. (a) Wlthln the Alrport Facllltles Trust Fund, there lS establIshed by Sectlon 401 a speclal account to be deslgnated the "Speclal Redemptlon Account." The Trustee shall keep the Speclal Redemptlon Account separate and apart from all other funds and accounts held by lt and shall admlnls- ter the Speclal Redemptlon Account as provlded in this Sectlon 406. (b) On the date of closlng of the sale of the Certlflcates, Clty shall pay to the Trustee, from any legally avallable funds (other than proceeds of the sale of the Certlflcates),ARn a~~unt suff~~~~~t. when cpmblned wlth amounts avallable l~ other accounts wlthln the A~rport Facllltles Trust Fund, to redeem the Certlflcates pursuant to Sectlon 6l4(b/l and the Trustee shall deposl> such sum ln the Speclal Redemptlon Account (c) Amounts ln the Speclal Redemption Account shall be used to redeem Certlflcates in whole ln the event of mandatory redemptIon pur- suant to Sectlon 6l4(b) and for no other purpose (d) If at any tlme prlor to August 15, 1986 the Trustee shall have recelved the documents requlred by Sectlon 402(c), and if all other sums payable by Clty hereunder shall be pald, the Trustee shall promptly pay any amounts (lncludlng Interest or other lncome as provlded ln Sectlon 408(b)) remalnlng In the Speclal Redemptlon Account to the Clty and shall close the SpeCIal RedemptIon Account. 407. No Unauthorlzed Transfers transferred from or pa1d out of any Agreement expressly provlded. No amount shall be WIthdrawn or fund or account except as In thlS 408. Deposit and Investment of Moneys 1n Accounts. (a) All moneys held by the Trustee In any of the funds or accounts establlshed pursuant to thls Agreement shall be deposlted or invested In Permitted Investments maturln2 not later than the date on whlch it lS j!.nticlpated that such moneys shall be reguued for the purposes of tlas_ _A~reernen~ Such lnvestments shall be made at the d1rectIon of the Clty 12 . . or, 1n the absence of timely dlrect10n as prov1ded below, ln Perm1tted Investments selected by the Trustee 1n its sole d1scret1on, and shall be held by the Trustee. The Trustee shall make 1nvestments in Perm1tted Investments 1n ac~ordance w1th wr1tten or telephone 1nstructlons (con. f1rmed the next day 1n wr1t1ng) prov1ded by an Author1zed Offlcer of the City not less than two (2) bus1ness days pr10r to the date on WhlCh each 1nvestment is made, provlded that such lnstruct10ns are not inconsistent w1th the Trustee's f1duc1ary obligatons hereunder. Moneys 1n each of the Acquis1tion and Constructlon Account, Reserve Account and Speclal Redemp- t~n Account in1t1ally shall be lnvested 1n Perm1tted Investments matur1n~ on Septe~ber 30, 1986, or on such earl1er date on Wh1Ch 1t lS ant1c1pated ~h~t the moneYS 1n such account shall be recu1red. (b) All 1nterest and other 1ncome rece1ved by the Trustee on 1nvestment of the Lease Payment Account or Redemption Fund shall, pr10r to the date of rece1pt of the cert1f1cate referenced in Sect10n 4 02(e) hereof, be transferred on or prlor to August 31 of each year, to the Acqu1s1tlon and Construct10n Account and, after said date, shall be retained in the Lease Payment Account or Redemptlon Fund and be applled as set forth 1n Sect10n 404 and Section 615 hereof, respect1vely, provlded, however, that ln the event that amounts on deposlt in the Reserve Account are less than the Reserve Requ1rement, sa1d lnterest or lncome recelved after the date of receipt of the cert1ficate referenced in Sect10n 402(e) hereof, shall be depos1ted ln the Reserve Account unt11 there is on depos1t in the Reserve Account an an~unt equal to the Reserve Requ1rement. All interest and other lncome received by the Trustee on lnvestment of the Reserve Account shall be reta1ned in the Reserve Account ln the event that amounts on depos1t ln the Reserve Account are less than the Reserve Requ1rement. In the event that amounts then on deposlt In the Reserve Account equal or exceed the Reserve Requ1rement, such excess shall, prlor to the date of recelpt of the cert1f1cate referenced in Sectlon 402(e) hereof, be transferred to the Acqu1s1tlon and Construction Account and, follow~ng sald date, be transferred to the Lease Payment Account Transfers to the Lease Payment Account shall be made by the Trustee on or prlor to August 31 of each year, commenc~ng wlth the flrst of such dates follow1ng the date of rece1pt of the cert~flcate referenced 1n Sect10n 402(e) hereof, and shall be appl1ed as set forth hereln. Provlded that there are no dellnquent Lease Payments, amounts reta~ned or deposlted 1n the Lease Payment Account pursuant to th1S subsection (b) shall be applled as a credlt aga1nst the Lease Payments due from City pursuant to the Lease Agreement on the Payment Date following the date of depos~t. At the tlme of deposit of sald moneys ln the Lease Payment Account, the Trustee shall, pursuant to Sec- tion 409, report the amount of said credlt to Clty All 1nterest or other income derlved from investments of the Acqulsit10n and Constructlon Account, the DeI~very Costs Account and the Speclal Redemption Account shall be deposlted in the Acqu1s1t1on and Constructlon Account, the Dellvery Costs Account, and the Spec1al Redemptlon Account, respectlvely, 13 . . unt~l said accounts are closed pursuant to Sections 402, 403 and 406 hereof, respect~vely. (c) The Trustee may act as pr~nclpal or agent in mak1ng or disposp 1ng of any 1nvestment. The Trustee shall not be 11able for any loss ~esultlng from the maklng or dlSposltlon of any 1nvestment made in compliance ~lth thlS Sect1on, and any such losses shall be charged to the a;~ount ~lth respect to wh~ch such lnvestment was made. Investments in any and all funds and accounts may be comm~ngled ~n a separate fund or funds for purposes of mak~ng, hold~ng and dlspos~ng of ~nvestments. not~~thstand~ng prov~s~ons here~n for transfer to or holding ~n or to the cred~t of part~cular funds or accounts of amounts rece~ved or held by the Trustee hereunder, prov~ded that the Trustee shall at all tlmes account for such investments str~ctly ~n accordance with the funds and accounts to WhlCh they are cred~ted and otherwlse as provlded ln thls Indenture. 409. ~redlt Agslnst Lease Payments On or prlor to August 31 of each year, the Trustee shall report to City the amount of the cred~t against Lease Payments ava1lable to Clty under the Lease Agreement. Such cred1t shall be an amount equal to the sum of (~) the amount of ~nterest and other 1ncome earned on the Lease Payment Account (provlded there lS then on depoSlt in the Reserve Account an amount equal to the Reserve Requ1rement) Slnce the date of the preVlOUS report made bv the Trustee pursuant to this Sectlon 409, plus (~~) the amount of 1nterest an~ other lncome earned on the Reserve Account (provided there 1S then on deposlt ln the Reserve Account an amount equal to the Reserve Requlre~ent) since the date of the previous report made by the Trustee pursuant to thlS Sectlon 409, plus (111) the amount, lf any, then on depos1t ln the Lease Payment Account. In addition to the credit referenced ~n the preceding sentence, the Trustee and Lessor acknowledge that, pursuant to Sectlon 403 of the Lease Agreement, there shall be appl1ed as a cred1t against Lease Payments payable on Payment Dates pr10r to the date of recelpt of the certlf1cate referenced ln Sect~on 402(e) hereof, an amount equal to the amount then on deposlt 1n the Lease Payment Account and that the amount 1n the Reserve Account shall be appl1ed as a credlt aga1nst the last Lease Payments due prlor to the exp1rat1on of the term of the Lease Agreement. In the event that the total amount of the credlt exceeds the Lease Payment due on the Payment Date follo~~ng sa1d report, the amount of said excess shall be applled as a credlt agalnst the next subsequent Lease Payments. 14 . . ARTICLE V ~EnCSTIE . 501. Trustee; D~ties, Removal and Reslgnatlon. By executing and dellverlng thls Agreement, the Trustee accepts the dutles and obllgatlons of the Trustee provlded ln thlS Agreement, but only upon the terms and condltlons set forth In thls Agreement. Lessor and Clty may by wrltten agreement between themselves, or the ~'ners of a majority 1n aggregate prlnc1pal amount of all Certlflcates Outstandlng may by wrltten request, remove the Trustee lnltlally a party to thls Agreement and any successor thereto and may appolnt a successor Trustee, but any such successor shall be a bank or trust company dOlng buslness and havlng an offlce in Los Angeles, Callfornla, havlng a com. blned cap1tal (excluslve of borrowed capltal) and surplus of at least F1fty M1ll1on Dollars (S5D,DDD,OOD) and subject to superv1s10n or examl- natlon by federal or state authorlty If such bank or trust company publ1shes a report of condltlon at least annually, pursuant to law or to the requlrements of any supervislng or examlnlng authorlty above referred to, then for the purposes of thlS Sectlon the comblned capltal and sur- plus of such bank or trust company shall be deemed to be ltS comblned capltal and surplus as set forth 1n ltS most recent report of condltlon so publ1shed The Trustee may at any tlme reslgn by glvlng wrlt'en notlce of reslgnatlon by mall postage prepald to Lessor and Clty and to the Certlf1cate Ow~ers at thelr addresses shown on the Cert1flcate Reglster. Sald notlce shall be rnalled not less than Dlnety (90) days prlor to the proposed effectlve date of reslgnatlon. Upon recelvlng such notlce of reslgnatlon, C1ty shall promptly appolnt a successor Trustee by an lnstrument ln wrltlng, provlded, however, that In the event that Clty does not appolnt a successor Trustee ~lthln Slxty (60) days follo~lng recelpt of such notlce of reslgnatlon, Lessor may appoint a successor Trustee and In the event that Lessor does not appolnt, wlthln thlrty (30) days thereafter, such successor Trustee, the reslgning Trustee may petltlon the approprlate court hav1ng Jurlsdlctlon to appoint a successor Trustee. Any reslgnatlon or removal of the Trustee and appOIntment of a successor Trustee shall become effectlve upon acceptance of appolntrnent by the successor Trustee. 502. Compensatlon of the Trustee. Clty shall from tlme to tlme, on demand, pay to the Trustee reasonable compensatlon for Its serVlces and shall relmburse the Trustee for all ltS advances and expendltures, lncluding but not IlMlted to advances to and fees and expenses of lndependent appralsers, accountants, consultants, counsel, agents and attorneys-at-Ia~ or other experts employed by lt In the exerCIse and performance of its powers and dutles hereunder. 15 . . 503 Protect1on to the Trustee. The Trustee shall be protected and shall lncur no llablllty In actlng or proceedlng In good faIth upon any resolutlon, notlce, telegram, request, consent, waIver, certlflcate, statement, afflcavlt, voucher, bond, requls1tlon or other paper or docu- ment whlch lt shall ln good falth belleve to be genulne and to have been passed or slgned by the proper board o~ person or to have been prepared and furn1shed pursuant to any of the provlslons of thIS Agreement, and the Trustee shall be under no duty to make any InvestIgatIon or 1nqulry as to any statements conta1ned or matters referred to In any such 1nstru- ment, but may accept and rely upon the same as concluslve eV1dence of the truth and accuracy of such statements. The Trustee may consult ~lth counsel w1th regard to legal questlons and the oplnlon of such counsel shall be full and complete author1zatlon and protectlon ln respect of any aCLlon taken or suffered by lt hereunder ln good fa1th 1n accordance there~lth whenever ln the admlnlstratlon of ltS dutleS under thIS Agree~ent, the Trustee shall deem It necessary or deslrable that a matter wlthln the kno~ledge and control of CIty or Lessor be proved or establIshed prIor to taklng or sufferIng any actlon hereunder, such matter (unless other eVIdence In respect thereof be hereln speclflcally prescrIbed) shall be deemed to be conclUSIvely proved and establlshed by the certIflcate of an Authorlzed Offlcer of Clty or Lessor and such certlflcate shall be full warrapty to the Trustee for any actlon taken Oi suffered under the p~ovls1ons of thIS Agreement upon the falth thereof, but 1n its d1scret2on the Trustee may, in lleu thereof accept other eV2dence of such matter or may reqUIre such addltlonal eVldence as to it may seem reasonable The Trustee may buy, sell, o~~, hold and deal in any of the Certlfl- cates provlded pursuant to thls Agreement, and may ]Oln In any act10n ~hlch any Owner may be entItled to take with llke effect as If the Trustee were not a party to th~s Agreement The Trustee, elther as prlnclpal or agent, may also engage ln or be interested ln any flnanclal or other transBctlon wlth Clty and may act as depository, trustee, or agent for any commlttee or body of Owners of CertlflCates or other obllgatlons of the Clty as freely as If it were not Trustee hereunder. The Trustee may execute any of the trusts or powers hereof and per- form the dutIes requlred of ~t hereunder by or through attorneys, agents, or recelvers, and shall be entltled to advlce of counsel concernlng all matters of trust and ItS duty hereunder, and the Trustee shall not be answerable for the negllgence or mlsconduct of any such attorney, agent, or recelver selected by it wlth reasonable care The Trustee shall not be answerable for the exerCIse of any dIscretIon or power under this Agreement or for anythlng whatever 1n connectlon wlth the funds and accounts establlshed hereunder, except only for ltS own WIllful m1scon- duct or neglIgence or breach of duty. 16 . . The partzes hereto acknowledge that any recltals herezn contalned are not made by the Trustee. ARTICLE VI CERTIFICATES TER~S A~~ PROVISIO~S 601. Preparatlon of CertifIcates The Trustee is hereby dzrected. upon wrztten request from CIty executed by an Authorlzed Offzcer of Clty, to prepare, execute and delIver to PalneWebber Incorporated, In an aggre- gate prInclpal amount of Dollars ($ ) eVIdencIng undlVlded ownershlp Interests In the Lease Payments to be pald by Czty under the Lease Agreement, as set forth zn such CertIfIcates. Clty hereby certIfies. recztes and declares that all thIngs, condltlons and acts requIred by the constItutIon and statutes of the State of CaII- fornla and the Lease Agreement and thIS Agreement to eXIst, to have happened and to have been performed precedent to and in the dellvery of thIS CertIfIcate, eXIst, have happened and have been performed In due tIme, form and manner as requIred by law. 602 Form, DenomInatIon, ~edIum of Payment The CertIfIcates shall be delIvered In the form of fully regIstered CertIfIcates WIthout coupons in the denoIDlnatIon of $5,000 each or any whole multIple thereof (whIch form shall be substantIally ln the form set forth ln ExhIbIt A hereto attached and by thIS reference h reIn Incorporated). The CertIfIcates shall be payable zn lawful money of the UnIted States of AmerIca whIch at the tzrne of payment zs legal tender for the payment of publIC and prIvate debts. 603. Date of CertIfIcates. The CertIfIcates shall be dated as of October 1, 1985. 604. Payment of PrInCIpal and Interest WIth Respect to CertIfIcates The prInCIpal of the CertIfIcates shall be payable from the prInCIpal component of Lease Payments on October 1 ~n each of the years and In the amounts set forth below. Interest wlth respect to the CertIfIcates shall be payable semlannually on Aprll 1 and October 1 of each year, commenCIng on Apr11 I, 1986, to and Includlng the date of prInCIpal payment or redemptIon, whlchever ~s earlIer. Interest WIth respect to the Certlfl. cates is payable from the Payment Date ImmedIately precedIng the date of authentlcatlon thereof, unless such date of authentIcatIon 1S a Payment Date, in ~hlCh event lnterest shall be payable from such Payment Date, or~ unless such date of authentIcat10n IS after the fIfteenth day of the month precedIng a Payment Date and prIor to such Payment Date, in whIch event lnterest shall be payable from such Payment Date, or unless such date of authent1cation is on or before March IS, 1986. ln WhICh event lnterest shall be payable from October 1, 1985, provlded, however, that If as of the date of authentlcatlon of any CertIficate Interest Wlth 17 . . respect thereto 1S in default, such lnterest shall be payable from the Payment Date to whlch lnterest has prevlously been pald or made aval1able for payment. Said lnterest shall represent the portlon of Lease Payments deslgnated as lnterest comlng due on the September 1 prlor to each of sald October 1 and April 1 dates, computed at the rates set forth below Year Pr1nc1pa1 Amou~t Interest Rate Year Prlncipa1 A~ount Interest Rate 1986 1987 1988 1989 1990 1991 1992 1993 -0- -0- 1994 1995 1996 1997 1998 1999 2006 2007 605 Place of Payment The pr1nc1pal wlth respect to all Certlf1- cates shall be payable at the Prlnc1pal Off1ce of the Trustee. Interest wlth respect to the Certlf1cates shall be payable by check or draft of the Trustee ma11ed to the Owners thereof prov1ded, however, that the Owners of the Cert1flcates shown on the Cert1flcate Reglster on the flf- teenth day of the month precedlng the Payment Date shall be deemed to be the Owners of the Certlf1cates on sald Payment Date for the purpose of the payment of intere~t. 606. Numbers, Legends. The Cert1f1cates may be numbered by such method as shall be determ1ned by the Trustee. The Cert1f1cates may con- ta1n or have endorsed thereon such prOV1Slons, spec1flcatlons and descrlptlve words not lncons1stent w1th the prOVlsions of thlS Agreement as may be necessary or des1rable to comply wlth custom, or otherwlse, as may be determlned by C1ty pr10r to the de11very thereof. 607. ExecutIon. The Cert1f1cates shall be executed 1n the name of, and by, the Trustee, as trustee under th1s Agreement, by the manual s1gnature of an authorlzed offlcer of the Trustee. 608. Transfer and Exchange of Cert1fIcates (a) The reg1strat1on of each Cert1f1cate shall be transferable only upon the Certlflcate Reglster, ~hlCh shall be kept for that purpose at the Prlncipal Offlce of the Trustee, upon surrender thereof together w1th a wr1tten lnstrument of transfer satIsfactory to the Trustee duly exe- cuted by the Owner or hls duly authorlzed attorney. Upon the registrat10n of the transfer, and the surrender, of any such Certif1cate. the Trustee shall prepare, In the name of the transferee, a new 18 . . Certlflcate or Certlflcates, of the same aggregate princlpal amount and prlnclpal Payment Date as the surrendered Certlflcate. (b) Certlflcates may be exchanged at the Principal Office of the Trustee for a llke aggregate prlnclpal amount of Certlflcates of other authorlzed denomlnatlons payable as to prlnclpal on the same Payment Date as the prlnclpal of the exchanged CertIfIcates Upon the request for exchange, and the surrender, of any CertIfIcates, the Trustee shall pre- pare in the name of the Owner requestIng exchange a new CertlfIcate or CertlfIcates of the same aggregate prInclpal amount and prlnc1pal Payment Date as the Cert1flcate belng exchanged. 609. Regulat10n ~:th Respect to Exchange and Transfers. In all cases of regIstrat10n of transfer or exchange of CertIflcates, the Trus- tee shall execute and deliver Certlficates In accordance WIth the provl- Slons of thIS Artlcle All CertIflcates surrendered In any transfer or exchange shall forthw1th be cancelled and returned to CIty by the Trustee. ^ot~lthstandIng any other prOVISIon of thIS Agreement, the cost of preparlng each new CertIflcate upon the first reg1stratIon of transfer or exchange followlng delIvery pursuant to Sectlon 601 hereof, and any other expenses of Clty or the Trustee lncurred in connection there~ith (except any appl1cable tax, fee or other governmental charge other than one Imposed by CIty) shall be paId by CIty. The Trustee shall not be obllged to mak~ any such reg1stration of transfer or exchange of Certlficates durIng the fifteen (15) days next precedlng AprIl I or October 1 o~ any year, or durIng the fifteen (15) days next precedIng the mailIng of a nOtICe of redemptIon, or of any CertifIcate called for redemptlon. 610 CertlfIcate Reglster. (a) The Trustee shall keep or cause to be kept at ltS PrinCIpal OffIce a Certlflcate Reg1ster, wh1ch shall at all tlmes be open to lnspectlon by Clty and ~ners of Certlf1cates, and, upon presentatlon for such purpose, the Trustee shall, under such reasonable regulatlons as it may prescribe, reglster the transfer or cause to be reglstered the transfer on the Certlflcate RegIster, Certlflcates as hereInbefore prOVided (b) The Trustee shall deem and treat the person in whose name any Outstandlng Certlflcate shall be reglstered upon the Certlflcate Register as the absolute owner of such Certlflcate, whether such Certlflcate shall be overdue or notJ for the purpose of recelvlng payment of, or on account~ of, the prInclpal and lnterest payments wlth respect to such CertifIcate and for all other purposes, and all such payments so made to any such Owner or upon hIS order shall be val1d and effectual to satIsfy and dlS- charge the lisblllty upon such Certlf1cate to the extent of the sum or sums so pald, and nelther Clty nor the Trustee shall be affected by any notice to the contrary 19 . . 611. Temporary Certlflcates Pending preparatlon of the deflnltlve CertIfIcates, any Certlflcates delIvered under thIS Agreement may be InItIally delIvered In temporary form exchangeable for defInitIve Cer- tIfIcates ~hen ready for delIvery. The temporary CertIfIcates may be prInted, lIthographed or type~rltten, shall be of such denomInatIons as m~y be determIned by Clty, shall be wlthout coupons and may contaIn such reference to any of the prOV1Slons of thIS Agreement as may be approprl- ate. Every temporary CertIfIcate shall be executed by the Trustee and be dellvered by the Trustee upon the same condItIons and In substantIally the same manner as defInItIve CertIfIcates. If the Trustee delIvers temporary CertIfIcates, It shall execute and furnIsh defInItIve CertIfI- cates WIthout delay and, thereupon, the te~porary CertIfIcates shall be surrendered for cancellatIon at the PrInCIpal OffIce of the Trustee and the Trustee shall delIver in excharge for such temporary CertIficates an equal aggregate prlnclpal amount of definItIve CertIfIcates of authorIzed denomInatIons and of the same prinCIpal Payment Date and Interest rate or rates UntIl so exchanged, the te~porary CertIfIcates shall be entItled to the same benefIts under thIS Agreement as defInItIve CertIfIcates delIvered pursuant hereto. 612. CertIfIcates MutIlated, Lost, Destroyed or Stolen. If any CertIfIcate shall become mutIlated, the Trustee, at the expense of the ~~er of sald CertIfIcate, shall execute and delIver a new CertIfIcate of lIke tenor, prInCIpal Payment Date and number In exchange and substItu- tIon for the CertIfIcate so mutllated, but only upon surrender to the Trustee of the CertIf1cate so mutIlated Every mutIlated Certificate so ~tirrendered to the Trustee shall be cancelled by It and either destroyed or delIvered upon the order of CIty. If any CertIfIcate shall be lost, destroyed or stolen, eVIdence of such loss, destructIon or theft may be submItted to the Trustee, and, 1f such eVloence IS satIsfactory to the Trustee and if an IndemnIty satIS- factory to the Trustee shall be gIven, the Trustee, at the expense of the CertIfIcate ~ner. shall execute and delIver a ne~ Certlflcate of lIke tenor and prInCIpal Payment Date and numbered as the Trustee shall deter- mIne in lIeu of and 1n substItutIon for the CertifIcate so lost, destroyed or stolen. The Trustee may reqUIre payment by the ~.ner of an appropriate fee for each new Certlf1cate delIvered under thIS SectIon and of the expenses whIch may be incurred by the Trustee In carrY1ng out the duties under thIS SectIon 612. Any CertIfIcate delIvered under the prov1s10ns of this Section 1n lIeu of any CertIficate alleged to be lost, destroyed or stolen shall be equally and proportIonately entItled to the benefits of thIS Agreement ~lth all other Certlflcates delIvered under thIS Agreement. The Trustee shall not be reqUIred to treat both the original CertIfIcate and any duplIcate Certlf1cate as be1ng OutstandIng for the purpose of determInIng the prInCIpal amount of CertIfIcates WhICh may be delIvered hereunder or for the purpose of determinIng any percentage of 20 . . C~rtlflcates Outstandlng hereunder, but both the orlglnal and dupllcate C~rtlflcate shall be treated as one and the same. Notwlthstandlng any other provlslon of this Section 612, in lleu of deliverlng a new Certlflcate for ~hlCh prlnclpal has or is about to become due for a Certlflcate whlch has been mutllated, lost, destroyed or stolen, the Trustee may make payment of such Certlflcate in accordance wl~h its terms. 613 Evidence of Slgnatures of Certiflcate Owners and ~nershlp of Certlflcates. Any request, dlrectlon, consent, revocatlon of consent, or ot~er lnstrument In wrltlng requlred or permltted by thlS Agreement to be signed or executed by Certlflcate Owners may be ln any number of concurrent lnstruments of slrnllar tenor, and may be slgned or executed by such Certlflcate ~'ners 1n person or by thelr attorneys or agents appolnted by an lnstrurnent ln wrltlng for that purpose Proof of the exeCUtlon of any such lnstrument, or of any lnstrument appOlntlng any such attorney or agent, and of the ownershlp of Certlflcates shall be sufflclent for any purpose of thlS Agreement (except as other~lse hereln provlded), lf made ln the followlng manner: (a) The fact and date of the executlon by a~y Certlflcate Owner or hlS attorney or agent of any such lnstrument and of any lnstrument app01TItlng any such attorney or agent, may be proved by a certlflcate, whi~n need not be acknowledged or verlfled, of an offlcer of any bank or trust company located wlthln the ~nlted States of Amerlca, or of any notary publlc, or other offlcer authorlzed to take ackno~ledgewents of deeds to be recorded In such JurlsdlCtlOnS that the persons slgnlng such lnstruments ackno~ledged before hlm the executlon thereof. ~here any such lnstrument 1S executed by an offlcer of a corporat1on or assoclatlon or a member of a partnershlp on behalf of such corporatlon, aSSOClatlon or partnershlp, such certlflcate shall also constltute sufflclent proof of hlS authorlty. (b) The fact of the o~nershlp of Cert1flcates by any Cert1flcate ~ner and the a~ount, the prlnclpal Payment Date and the numbers of such Certlflcates and the date of hls ownershlp of the same shall be proved by th~ Certlflcate Reglster held by the Trustee under the prOV1Slons of thlS Agreement 614. Rede~ptlon. (a) The Certlflcates are subject to mandatory redemption In ~hole or in part on any Payment Date (but not in a total redemptlon amount of less than $5,000 at anyone tlme), ln lnverse order of prlnclpal Payment Date and by lot as to any prlnclpal Payment Date, wlthout premlum, at the prlncipal amount, together ~lth accrued lnterest to the Payment Date f1xed for redemptlon from (1) the Net Proceeds of lnsurance or condemna~ tlOn ln an amount of $5,000 or more deposlted wlth the Trustee pursuant 21 . . to the prov~s~ons of Sec~~ons 508{a), S08(b), S10(a) and 510(b) of ~he Lease Agreement, and (~I) amounts receIved by ~he Trustee upon an Event of Default and termIna~lon of the Lease Agreement (b) The CertIfIcates are subject to mandatory redemption in whole au Oc~ober I, 19B6, wI~hou~ pre~lum, at the princIpal amount, together wIth accrued Interest to such date, from amounts In the SpecIal RedemptIon Account, ~n ~he event that ~he documen~s reqUIred by SectIon 402(c) shall not have been deposIted wIth the Trustee prIor to August IS, 1986 (c) In addItIon to redemptIon pursuant to subsectIons (a) and (b) of thIS Sect~on 614, ~he CertIfIcates haVIng a prInCIpal Payment Date on and after October 1, 1996 are subject to redemptIon In whole or In part In Inverse order of prInCIpal Payment Date and by lot WIthIn B prInCIpal Payment Date on any Payment Date on or after October I, 1995, at the prInCIpal amount payable with respect thereto, together ~Ith the premIum set forth below (expressed as a percentage of the total amount redeemed), and accrued Interest to the Payment Date fIxed for rede~ptIon from the proceeds of optIonal prepayments of Lease Payments made by CIty pursuant to the Lease Agreement: Pay~ent Date of Rede~ptIon PremIum Octob~r I, 1995 or AprIl I, 1996 2-1/2% October I, 1996 or AprIl I, 1997 2% October 1, 1997 or AprIl I, 1998 1-1/2% October I, 199B or AprIl 1, 1999 1% October I, 1999 and AprIl 1, 2000 1/2% October 1, 2000 and ~hereafter -0- Cd) RedemptIon by lot shall be In such manner 8S the Trustee shall determIne; provlded, ho~ever, that the portIon of any Cert1fIcate to be redeemed shall be 1n the prInCIpal amount of $5,000 or any mu1t1ple thereof, and that in selecting portIons of CertIficates for redemption, the Trustee shall treat each such CertIfIcate as representIng that number of CertIflcates Whlch IS obtalned by dIVIdIng the prInCIpal amount wlth respect to such CertIfIcate by $5,000. (e) Upon redempt10n pursuant to thls SectIon, the Trustee shall, In accordance wlth Section 404(c) hereof, provlde CIty Wlth a reVIsed schedule of Lease Payments wr.Ich schedule shall take lnto account such redemptIon and shall be and become for all purposes thereafter ExhIbIt B ~ to the Lease Agreement. 615. RedemptIon Fund. Honeys to be used for redemptIon of CertIfi- cates shall be transferred by the Trustee from the Lease Payment Account (or, ln the case of redemptIon pursuant to SectIon 614Cb), from the SpeCIal RedemptIon Account) and depos1ted In a Redemptlon Fund, whIch 22 . . shall be a specIal fund to be held In trust by the Trustee, separate and apart from all other funds. SaId moneys shall be set aSIde in the RedemptIon Fund solely for the purpose of redeemIng the CertIficates In advance of theIr prIncIpal Payment Date and shall be applIed on or after the Payment Da~e deslgna~ed for redemp~lon to the payment of principal of, premIum, if any, and Interest (from the last Payment Date) WIth respect to, the CertIfIcates to be redeemed upon presentatIon and suxrender of such CertIfIcates. 616. Notice of Rede~ptlon ~hen redemption is authorIzed or re- qUIred pursuant to the prOVISIons hereof (except when redemptIon IS reqUIred follo~ing an Event of Default and termInatIon of the Lease Agreement), the Trustee shall gIve to the CertIfIcate Owners notIce at the expense of the CIty of the redemptIon of the CertIfIcates. Such notIce shall specIfy. (a) that the whole or a deSIgnated portion of the CertIfIcates IS to be redeemed, (b) the Payment Date of redemptIon, and (c) the place or places where the redemptIon WIll be made. Such notIce shall further state that on the speCIfIed date of redemptIon there shall become due and payable WIth respect to each CertIfIcate or portIon thereof to be redeemed, the prIncIpal with respect thereto and premIum, If any, together WIth interest accrued from the next precedIng Payment Date to whIch Interest has been paId and that from and after such date of redemptIon Interest WIth respect thereto shall cease to accrue and be payable. NotIce of such redemptIon shall be gIven (at the expense of CIty) by mall, postage prepaId, not more than SIxty (60) days nor less than thIrty (30) days prIor to saId date of redemptIon, to the ~'ners of any CertIfIcates whIch are to be redeemed Such maIlIng shall not be a condI- tIon precedent to such redemptIon, and faIlure to mall any such notIce, or any defect In such notIce as mailed, shall not affect the valIdIty of the proceedIngs for the redemptIon of the CertIficates 617 Payment on Rede~ptIon of CertIfIcates. Not~ce hav~ng been gIven as aforesaId, and the moneys for the redemptIon, IncludIng Interest accrued from the next precedIng Payment Date to the appl~cable date of redemptIon, haVIng been set aSIde In the Redemption Fund, the CertIfIcates to be redeemed shall become due and payable on sa1d date of redemptIon, and, upon presentatIon and surrender thereof at the offIce or offlces speCIfIed In saId notIce, saId CertIfIcates shall be paId at the unpaid prInCIpal amount ~lth respect thereto, plus any such unpaId and accrued Interest to saId date of redemptIon, saId lnterest to be paId In accordance w~th SectIon 605 hereof. If, on said Payment Date of redemptIon, moneys for the redemptIon of all the CertIfIcates to be redeemed, together WIth ~nterest to said Pay. ment Date of redemptIon, shall be held by the Trustee so as to be ava~l. able therefor on such Payment Date, and, If notIce of redemptlon thereof shall have been gIven as aforesaId, then, from and after sald Payment 23 . . Date, ~nterest with respect to the Certif~cates to be redeemed shall cease to accrue and become payable. If sa~d moneys shall not be so avallable on sald Payment Date, ~nterest wlth respect to such Certlflcates shall continue to be payable untll pald at the same rates as it would have been payable had the Certlficates not been called for iedemptlon. All moneys held by or on behalf of the Trustee for the redemptlon of partlcular Certlflcates shall be held 1n trust for the aacount of the Owners of the Certlflcates so to be redeemed 618. Partlal Redemptlon of Certlflcates. Upon surrender of any Certlflcate redeemed ln part only, the Trustee shall execute, and dellver to the ~ner thereof, at the expense of Clty, a new Certlflcate or Certl" f1cates of authorlzed danomlnatlon equal 1n aggregate pr~nc1pal amount to the unredeemed portlon of the Certlflcate surrendered and of the same lnterest rate and the same prlnclpal Payment Date. Such partlal redemp- tlon shall be valld upon payment of the amount thereby requlred to be pald to such Owner, and Clty, Lessor and the Trustee shall be released and dlscharged from all llabll1ty to the extent of such payment ARTICLE VII COvL~A~lS LIMITATIO~ OF LIABILITY 701. Clty to Perform Lease Agre~ment Clty covenants and agrees wlth the Owners of the Certlflcates, to perform all obllgatlons and dutles lrnposed on lt under the Lepse Agreement to the extent so lmposed. 702. Lessor to Perform Lease AgreeMent Lessor covenants and agrees wlth the ~.ners of the Certlflcates, to perform all obllgat1ons and dutles 1mposed on lt under the Lease Agreement to the extent so lrnposed 703. Actlon on Default. Upon the occurrence of an Event of Default by Clty under Se~tlon 701 of the Lease Agreement. and 1n each and every such case dUrlng the contlnuance of such Event of Default, the Trustee shall, wlth respect to any Event of Default other than an Event of Default pursuant to subsectlon (b) of Sectlon 701 of the Lease Agreement, and may, ~1th respec~ ~o an Event of Defaul~ pursuant to sald subsect10n (b) of Sect10n 701 of the Lease Agreement (or shall, 1n the event of a request therefor by the ~~ers of not less than twenty-flve percent (25%) 1n aggregate princlpal amount wlth respect to Cert1flcates at the tlme Outstandlng), upon notice in ~rltlng to Clty exercise the remedles provlded in the Lease Agreement ~h~~h remedles have been asslgned to the Trustee pursuant to the Asslgnment Agreement. 704 No Obl1g8tlon by Clty to ~'ners Except for the payment of Lease Payments when due 1n accordance wlth the Lease Agreement and the performance of the other covenants and agreements of Clty conta1ned in sald Lease Agreement, City shall have no obllgatlon or llabl1lty to any 24 . . of the other partles or to the ~ners of the Certlflcates wIth respect to this Agreement or the terms, executlon, dellvery or transfer of the Cer. tIflcates, or the dlstrlbutlon of Lease Payments to the Owners by the Trustee 705. No Obllgatlon wlth Respect to Perfor~ance by Trustee. Except a$.otherwlse provIded hereIn, neIther CIty nor Lessor shall have any obligatIon or lIabIllty to any of the other partIes, or to the ~ners of the CertIfIcates WIth respect to the performance by the Trustee of any duty Imposed upon It under thIS Agreement. 706 No LIablllty to ~~ers for Payment Except as provIded In thIS Agreement, neIther Lessor nor the Trustee shall have any oblIgatIon or lIabIlIty to the ~ners of the CertIfIcates with respect to the payment of the Lease Payments by CIty ~hen due, or WIth respect to the per- formance by CIty of any other covenants made by it In the Lease Agreement 707. No Responslblllty for SuffICIency. The Trustee shall not be responSIble for the sufflclency of the Lease Agreement or of the asslgnment made to It pursuant to the Asslgnment Agreement, or for the value of or tltle to the FaCIlItIes. 70B. Inde~nlflcatlon to Trustee CIty sha'l Indemnify and save the Trustee harmless fro~ and agaInst all claIms, losses and damages, includ- Ing legal fees and expenses, arISIng out of (1) the use, maIntenance, condltlon or management of, or from any work or thIng done on, the FaCIlItIes by CIty, (11) any breach or default on the part of CIty In the performance of any of Its oblIgatIons under this Agreement, (ill) any act of neglIgence of City or of any of Its agents, contractors, servants, employees or lIcensees WIth respect to the FacilItIes, (IV) any act of neglIgence of any assignee or lessee of CIty or of any of Its agents, contractors, servants, employees or lIcensees WIth respect to the Facill- tIes, or (V) the constructlon or InstallatIon of the Facllltles or the authorlzation of payment of the Acquisition and Construction Costs by CIty, all to the extent permItted by law. IndemnIfIcatIon for any tort mentIoned ~n thIS SectIon shall be lImIted to the extent and ln the amounts prOVIded by Callfornla law. No indemnIfIcatIon WIll be made under thIS SectIon or else~here in thIS Agreement for WIllful mlsconduct or gross neglIgence, by the Trustee, Its offIcers, agents, employees, successors or aSSIgns. ARTICLE VIII A~E~~XE~T, DEFEASA~CE, AD~INlSTRATIVE PROVISIONS 801. Amendment. ThIS Agreement may be amended In wrIting by agree- ment among all of the partIes, but no such amendment shall become effec. 25 . . t~ve as to the Owners of Cert~f~cates then Outstand~ng unless and unt~l approved by a major1ty 1n aggregate pr~nc1pal amount w1th respect to Cert~f1cates Outstand1ng; prov1ded that no such amendment shall imps1r the r~ght of any Owner to rece1ve h~s proport1onate share of any Lease Payment in accordance ~1th h1s Cert1flcate Not~1thstand1ng the fbrego1ng, th1s Agreement and the r1ghts and ob11gat1ons prov1ded thereby may also be mod1f~ed or amended at any t1me w1thout the consent of any OwDers of the Cert~f1cates, but only (1) for the purpose of cur1ng any amb1gu1ty, or of curlng, correct1ng or supplementlng any defect1ve pro~ vis~on contalned ln this Agreement, or (2) ln regard to quest10ns ar1s1ng under thlS Agreement wh1ch the C1ty may deem necessary or desirable and not 1ncons1stent ~1th thlS Agreement, provlded that no such amendment shall adversely affect the 1nterests of the ~~ners of the Cert1f1cates; prov1ded that Lessor, C1ty and the Trustee may rely ln enter1ng lnto any such amendment hereof upon the op1n1on of recogn1zed counsel whose op1n1on lS acceptable by under~r1ters ln the market1ng of tax-exempt obl1gat10ns of polltlcal subd1v1s1ons statlng that the requ1rements of th1s sentence shall have been met w1th respect to such amendment. 802 Defeasance If all Outstandlng Certificates shall be pald and d1scharged ~n anyone or more of the follow1ng ways: (a) by well and truly paYlng or caus1ng to be pa1d the prln- c1pal w~th respect to and lnterest w1th respect to all Cert1f1cates Outstand1ng, as and when the same become due and payable; (b) by deposit1ng with the Trustee, ln trust. at or before matur1ty, moneys ln an amount wh~ch, together w1th the amounts then on depos1t ~n the Lease Payment Account and the Reserve Account, are fully suff~c1ent to pay all Cert1f1cates Outstand1ng, lncludlng all prlnc~pal and lnterest a1th respect thereto, (c) by depOS1tlng w~th the Trustee, In trust, Federal Secur~- t1es 1n such amount as w111. together with the 1nterest to be recelved thereon and moneys then on depos1t in the Lease Payment Account and the Reserve Account, lf requ1red, together w1th the lnterest to be recelved thereon, be fully suff1clent to pay and d1scharge all Cert~f1cates (1nclud1ng all pr~nclpal and lnterest) at or before thelr respectlve pr~nc~pal Pa}~ent Dates; or (d) by depos~t1ng w1th the Trustee, under an escrow deposlt and trust agreement, secur1ty for the payment of all Lease Pa)~ents as more part1cularly descrlbed ~n Sect~on 408 of the Lease Agreement, SB1d securlty to be held by the Trustee, as agent for Clty, and to be applled by the Trustee to Lease Payments represent1ng the ob11gat1on of C1ty under the Lease Agreement as descrlbed ln Sect~on 408 of the Lease Agreement; 26 . . not~~thstand~ng that any Certlflcates shall not have been surrendered for payment, all obllgatlons of Lessor, the Trus~ee and Clty under this Agreement ~lth respect to all Outstandlng Certlflcates shall cease and termlnate, except only the obllgation of the Trustee to payor cause to be pald, from Lease Payments pald by or on behalf of Clty from deposlts pursuant to paragraphs (b) through Cd) of thlS Sectlon, to the Owners of the Certlflcates not so surrendered and pald all sums due wlth respect thereto, and that ln the event of depoSlts pursuant to paragraphs (b) through Cd) of thlS Sectlon, the Certlflcates shall contlnue to represent dlrect and proportionate interests of the Owners thereof In Lease Payments under the Lease Agreement. Any funds held by the Trustee, at the tlme of one of the events descrlbed In subsections (a) through Cd) above, whlch are not requlred for the payment to be made to ~'ners, or for payments to be made to the Trustee by elty, shall be pald over to Clty 803. Recordlng and Fll1ng. The Trustee shall not be responslble for the record~ng or flllng of the Lease Agreement or Assignment Agreement or of any flnanclng staternen~s, contlnuatlon statements, supplemental lnstruments or documents. 804 Trustee to Keep Records The Trustee shall keep books and records of all moneys recelved and dlsbursed under thlS Agreement, ~hlCh shall be avallable for lnspectlon by the Clty or Lessor, or the~r re pec- tlve appolnted audltors or agents, or flve percent (5r1 in aggregate prlnclpal amo&nt of Certlflcate ~.ners or thelr respectlve deslgnees, at any reasonable tlme durlng regular buslness hours. 805. ~otlces. All ~rltten notlces, certlflcates, reports or state- ments to be glven under thlS Agreement shall be glven by mall or personal dellvery to the party entltled thereto, wlth a copy to each of the other partles to thls Agreement, at its address set forth below, or at such address as the parties may provlde to the other partles in wrltlng from tlme to tlme. Notlce shall be effectlve upon deposlt in the Cnlted States mall, postage prepald or, ln the case of personal dellvery, upon dellvery, to the address set forth below: If to Lessor: Securlty Paclflc ~atlonal Bank 300 South Grand Avenue, 21st Floor 8.211 Los Angeles, CA 90071 Attentlon: Rlchard H. Clark If to Clty' Clty of Santa Monlca 1685 Maln Street Santa Monlca, CA 90401-3295 Attention Clty Manager 27 . . w~th a copy to: C~ty of Santa Mon~ca 1685 ~a~n Street Santa Mon~ca, CA 90401-3295 Attentlon: Clty Attorney Santa Monlca Alrport 3200 Alrport Avenue Santa Monlca, CA 904C5 Attentlon Alrport Dlrector If to Trustee' Bank of Amerlca ~atlona1 Trust and and Savlngs AssOclation 555 South FlOwer Street Flfth Floor Los Angeles, CA 90071 Attent~on: Corporate Trust #8510 806. CallfornlB Law ThlS Agreement shall be construed and governed ln accordance wlth the laws of the State of Callfornia. 80i Severa~lllty Any provlslon of this Agreement found to be prohlblted by law shall be lneffectlve only to the extent of such prohl- bltlon, and shall not lnvalldate the remalnder of this Agreement. 808 Blndlng on Successors and lnure to the beneflt of the and asslgns. ThlS Agreement shall be blnclng upon partles and thelr respectlve successors 809. Headlngs Head~ngs precedlng the text cf the several Artlcles and Sectlons hereof, and the table of contents, are solely for convenlence of reference and shall not constltute a part of thlS Agreement or affect lts meanlng, constructlon or effect. 810 Counterparts This Agree~ent may be executed in counterparts and each of Bald counterparts shall be deemed an orlglnal for all 28 . . purposes of th1s Agreement All of such counterparts taken together shall be deemed to be one and the same 1nstrument. I~ ~IT~ESS ~HEREOF. the part1es have executed th1s Agreement by ~heir offlcers thereunto duly author1zed as of the date and year f1rst wr1tten above. TRcsrrE BA~K OF A~ERICA ~ATIO~AL TReST ASD SAVl~GS ASSOCIATION By V1ce Pres1dent LESSOR SECURITY PACIFIC ~ATIO~AL BA\~ By V1ce Pres1dent By V1ce Presldent CITY. APPR8VED AS TO FOR~ CITY OF SA\lA MO~ICA By Robert!1 Hyers Cny Attorney ~ayor Attest C1ty Clerk 29 . . EXHIBIT A (Form of Cert~f~cate of PaTt~c~patlon) CERTIFICATE OF PARTICIPATION (AIRPORT FACILITIES) EV1denclng a Proport~onate Interest of the ~.ner Hereof 1n Lease Payments to be Made by the CITY OF SA~lA MO~ICA (Cabforn1a) to SEC~RITY PACIFIC ~ATIO~AL BA~K $ THIS IS TO CERTIFY THAT' .l.S the reglstered OI,;ner (the "OI..'ner) of th1S Certlf.l.cate of Partlclpatlon (tt>e "Cert1f.l.cate") and 15 entl.tled to recelve on October I, (the "Certlflcate Payment Date") DOLLARS Th~s Certlflcate eVldences an Undl.V1ded proportl.onate l.nterest ln the rlght to recel.ve certal.n Lease Payments under, and as def1ned In, that eertaln Lease Agreement Relatl.ng to Alrport Facl.Il.t1es, by and between Seeurl.ty Pacifl.c \atl.onal Bank, a national bankl.ng assoelat~on ("Lessor"), and the Clty of Santa MOTIlea, a charter eay and munl.clpal eorporatlon duly organlzed and operating under the laws of the State of Cahfornla (the "Cny"), dated as of October 1,1985 (the "Lease Agree- ment"), the Lease Pa}~ents to be made thereunder having been assl.gned to Bank of Amerlca Natlonal Trust and Savings Assoel.atl.on, as trustee (the "Trustee"), havlng a prlncl.pal corporate trust office In Los Angeles, Call.fornle (sald prlnc1pal corporate trust offl.ce bel.ng herel.n referred to as the "Prlncipal Offlce"). The aforesaid payment lS payable subject to the terms of the Lease Agreement and represents a port10n of the Lease Payments deslgnated as pr1nclpal comlng due on and pr10r to the Cert1fl- care Payment Date. The Owner is also entltled to recel.ve, subject to the . terms of the Lease Agreement, sem1annually on Apr11 1 and October 1 of each year (here.l.nafter referred to as the "Payment Dates"), commenc1ng Aprl1 I, 1986, to and lncludlng the Certiflcate Payment Date or the A-I . . Payment Date of redempt10n, Whlchever 1S earl1er, the Owner's proport10nate share of the Lease Payments designated as 1nterest coming due wIth respect to each of the Payment Dates, prOVIded that Interest wIth respect hereto shall be payable from the Payment Date next precedIng the date of authentIcatIon of th1S CertifIcate unless (1) this CertIfIcate IS authenticated on a Payment Date, In WhICh event Interest shall be payable from such Payment Date, or (11) this CertIfIcate is authentIcated after the close of bUSIness on the fIfteenth day of the month im~edlately precedIng a Payment Date and prIor to such Payment Date, in whIch event Interest shall be payable from such Payment Date, or (111) this CertIfIcate IS authentIcated on or before ~arch IS, 1986, In ~hIch event Interest shall be payable from October 1, 1985 SaId share 15 the result of the multIplIcatIon of the prInCIpal amount hereof by the rate of percent C_____%) SaId a~ounts are payable in lawful money of the Dnlted States of America, ~hlCh at the tIme of payment IS legal tender for the payment of publIC and prIvate debts The arrounts representIng prInCIpal are payable at the PrInCIpal OffIce of the Trustee and the amounts representIng interest are payable by check or draft of the Trustee ma1led en each Payment Date to the ~'ner of record on the fIfteenth day of the month precedIng the Pay- ment Date. RtFERE~CE IS HEREBY MADE TO THE FCRTrlER PROVISIO~S OF THIS CERTIFI- CATE SET FC.,7H O~ THE REVERSE HEREOF WHICH FCRTHER PROVISIO~S SHALL FOR ALL PCRPCSES HA\~ THE SA~E EFFECT AS IF SEr fORTH IN THIS PLACE The Trustee has ne oblIgation or lIabIlIty to the Certlf1cate ~ners to make payments of prInCIpal or Interest ~lth respect to the CertIfIcates. The Trustee's sole oblIgat10ns are to admInISter, for the benefIt of the CertIfIcate Owners, the varIOUS funds and accounts establIshed under the Trust Agreement. The CIty has certIfIed, reCIted and declared that all Bcts, condI- tIons and thIngs reqUIred by the constItution and statutes of the State of CalifornIa, the Lease Agreement and the Trust Agreement to eXIst, to have happened and to have been performed precedent to and in the delIvery A-2 . . of th1s Cert1f1cate, eX1st, have happened and have been performed 1n due t1me, form and manner as requ1red by la~ I~ ~ITKESS ~HEREOF, th1S Cert1flcate has been executed by the manual 51gnature of the Trustee all as of the date set forth below. Au~hent1cat1on Date: BA~K or A~ERICA NATIO~AL TRUST A~D SA\I~GS ASSOCIATIOS, as Trustee By: Author1zed Off1cer A-3 r_ ~ . . Reverse S~de of Form of Cert~f~cate of Part~c~pat~on) CERTIFICATE OF PARTICIPATION (AIRPORT fACILITIES) Ev~denc~ng a Proport~onate Interest of the Owner Hereof in Lease Payments to be ~ade by the CITY OF SA~lA MOXICA (Cahforraa) to SECCRITY PACIFIC ~ATIOKAL BAKK The Clty 1S author1zed to enter 1nto the Lease Agreement by Cal~forn1a Government Code Sectlon 37350. The Lessor has aSSlgned 1ts r~ghts to Lease Payments to the Trustee pursuant to an Asslgnment Agree- ment Relat~ng to A~rport FaCllltles, by and between the Lessor and the Trustee, dated as of October I, 1985 (the "Ass~gnment Agreement") and a Trust Agreement relat~ng to A~rport racllit~es, by and among the Trustee, the Lessor and the Clty, dated as of October 1, 1985 (the "Trust Agreement"). Th1S Cert1f1cate has been executed by the Trustee pursuant to the terms of the Trust Agreement. Caples of the Lease Agreement, the Asslgn- ment Agreement and the Trust Agreement are on f~le at the offlce of the Clty and at the Prlnclpal Offlce of the Trustee, and reference to the Lease Agreement, the Asslgnment Agreement, and the Trust Agreement and any and all amendments to Sdld agreements, 1S made for a descrlptlon of the pledges and covenants of the Clty secur1ng the Lease Payments, the nature, extent and manner of enforcement of such pledges and covenants, the rlghts and remedles of the OM'ners of the Cert1f~cates ~1th respect thereto and the terms and condltlonS upon wh1ch the Gertlf~cates are de11vered thereunder. To the extent and 1n the manner permltted by the terms thereof, the prOV1Slons of the Lease Agreement and the Trust Agree- ment may be amended by the partles thereto wlth the wrltten consent of the ~ners of at least a majorlty ln prlnc1pal amount w1th respect to the Cert1f~cates then outstand~ng, or w1thout such consent wlth respect to an amendment not adversely affecting the 1nterests of the ~ners of the Cert~flcates. The reglstratlon of th1s Certiflcate shall be transferable only upon the Certlf1cate reg1ster, wh1ch shall be kept for that purpose at the Pr1ncipal Offlce of the Trustee, upon surrender hereof together w1th a wrltten 1nstrument of transfer 3atlsfactory to the Trustee duly executed by the Owner of thlS Certlflcate or his duly authorlzed attorney. Upon the reg~stratlon of the transfer and the surrender of thlS Cert1f1cate, the Trustee shall provlde In the name of the transferee, a new fully A-4 ,- . . reg~stered Cert~f~cate or Cert~f1cates of the same aggregate pr1nc~pal amount and pr~nClpal Payment Date as the surrendered Cert1f1cate. The Cert1flcates are dellvered in the form of fully registered Certlflcates 1n denom1nat1oDs of $5,DOO each or any lntegral mult1ple thereof, and upon surrender thereof at the Pr1nc1pal Offlce of the Trus- tee ~lth a ~rltten request of exchange satlsfactory to the Trustee duly executed by the Owner or hlS attorney duly authorized ln wrlting, may, at the optlon of the ~ner thereof, be exchanged for an equal aggregate princlpal amount of Certificates of any other authorized denominatlons and of the same prlnclpal Payment Date. The Certlf~cates are subject to mandatory redemptlon in whole or ln part from t~me to tlme, ln 1nverse order of prlnclpal Payment Date and by lot wlthln a prloclpal Payment Date, on any Payment Date, wlthout premlum, at the prlDclpal amount thereof, together ~lth accrued lnterest to the date flxed for redemptlon from (1) the Net Proceeds of 1Dsurance or condemnat~on, as defloed and descrlbed in the Lease Agreement, and (11) amounts recelved by the Trustee upon an Event of Default (as def1ned ln the Lease Agreement) and upon termlnatlon of the Lease Agreement. In addlt1on, the Certlflcates are subject to redemptlon in whole on October I, 1986, at the princlpal amount thereof, together with accrued 1Dterest to sur~ date, from amounts transferred from the Special Redemptlon Account under the Trust Agreement upon fallure to satlsfy the condltions to the lDltlal dlsbursement from the Acquls~tlon and Constructlon Account prlor to August 15, 1986, pursuant to the Trust Agreement. In add1tlon, the Certlflcates havlng a prlnc1pa1 Payment Date on and after October I, 1996 are subject to redempt~on ln whole or 1n part ln ~nverse order of prlncipal Payment Date and by lot with1n a prlnclpal Payment Date on any Payment Date on or after October 1, 1995, at the prlDclpa1 amount payable wlth respect thereto, together w1th the premium set forth below, (expressed as a percentage of the total amount redeemed), and accrued ~nterest to the Payment Date flxed for redemptlon from the proceeds of optlonal prepay~ents of Lease Payments made by City pursuant to the Lease Agreement" Payment Date of Redemptlon Prem~um October I, 1995 and Apnl I, 1996 2-1/2% October I, 1996 and Apnl I, 1997 2% October I, 1997 and April I, 1998 1-1/2% October I, 1998 and Apnl 1, 1999 1% October 1, 1999 and Apnl I, 2000 1/2% October I, :WOD and thereafter -0- A-5 . ~ ~ . . Redemptlon by lot shall be in such manner as the Trustee shall determlne, provlded, however, that the portlon of any Certlf1cate to be redeemed shall be 1n the prlnclpal amount of $5,000 or any multlple thereof, and that 1n select1ng portlons of Certlflcates for rede~ptlon, the Trustee shall treat each such Certiflcate as represent1ng that number of Certlflcates whlch is obtalned by dlvldlng the princlpal amount of such Certlflcates by $5,000. ~hen redempt10n 15 authorlzed or requlred (except when redemptlon 15 requlred fcllowlng an Event of Default under, and as def1ned ln, the Lease Agreement and except mandatory slnklng fund redemptlon), the Trust- ee shall glve to the Owners notlce at the expense of the Clty of the redemptlon of the Cert1flCates Such notlce shall speclfy: (a) that the whole or a deslgnated portlon of the Certlflcates is to be redeemed, (b) the Payment Date of redernptlon, and (c) the place or places where the redemption wlll be made. Such notlce shall further state that on the speclfled date of redemptlon there shall become due and payable with respect to each Certlflcate or portlon thereof to be redeemed, the prln- clpal wlth respect thereto, premlum, If any, and interest accruec from the next precedlng Payment Date to whlch lnterest has been pald to sald Payment Date of rede~ptlon, and that from and after such Payment Date of redemptlon lnterest shall cease to accrue and be payable ~OtlCe of such redemptlcn shall be mailed, postage prepald, not more than Slxty (60) days nor .ess than thlrty (30) days prlor to sald Payment Date of redemptlon, to the ~'ners of any Certlflcates whose Certlflcates are to be redeemed. Such malllngs shall not be a condltlon precedent to such rede~ption, and fallure so to mall any such notice, or any defect ln such notlce as malled, shall not affect the Valldl!Y of the proceeclngs for the redemptlon of the Certlflcates. The obllgat10n of the CIty to make Lease Payments under the Lease Agreement lS a speCIal obllgatlon, subject to annual app~oprIatlons of the Clty WhlCh appropr1atlons the CIty ln the Lease Agreement has cove- nanted to make. The obllgatlon of the Clty under the Lease Agreement does not con- stltute a debt of the Lessor, of the Trustee, of the Clty, of the State of Callfornla or of any other polltlcal subdlv1slon of the State Or a pledge of the faIth and credIt of the Clty or of the Lessor, of the Trustee, of the State of Callfornla or of any other pollt1cal subdlvlsion of sald State A-6 ~ . . (Form of Asslgnment) ASS!G~~E~i For value recelved the underslgned do(es) hereby sell, asslgn and ~ransfer unto the ~lth~n-mentloned Cert~f~cate and hereby ~rrevocably constltute(s) and apPolnt(s) attorney, to transfer the same on the Cert~flcate reglster of the Trustee wlth full power of substltutlon ln the prem~ses. Dated: Slgnature Guaranteed Note' The slgnature(s) on thlS Asslgnment must correspond wlth the name(s) as wrltten on the face of the wlthln-mentloned CerttflCa~e lTI every partlcular w~tr.out alteratlon or enlargement or any change whatsoever. A-7 . - jco/ f}tJ5>~3 11679 00000002/091268-L GROUND LEASE THIS GROUND LEASE is made and entered ~nto as of October 1, 1985, by and between the CITY OF SANTA MONICA, a mun~clpal corporat~on organ~zed and operat~ng under the laws of the State of Cal~fornia and the C~ty Charter (as and here- ~nafter called "Clty"), and SECURITY PACIFIC NATIONAL BANK, a natlonal banking assoc~at~on (as and here~nafter called "Lessee") . WIT N E SSE T H WHEREAS, C~ty lS the owner of that certa~n land located 1n the County of Los Angeles, state of Callfornla, more partlcularly descr1bed 1n Exh~b~t A attached hereto and made a part hereof, and Lessee 1S des~rous of leaslng sald land from C~ty on the terms and condlt1ons here1nafter set forth. NOW, THEREFORE, in consideratlon of the premlses and the respectlve undertaklngs of the part~es hereinafter set forth, lt is hereby agreed as follows: 1. Deflnitlons. As used herein, the followlng terms have the follow~ng meanlngs: A. "Agreement" means that certaln "Lease Agree- ment Relatlng to Alrport Facllltles" dated as of October 1. 198~, by and between C~ty, as sublessee of the Slte and lessee of the Facllltles, and Lessee, as sublessor of the S~te and lessor of the Facllltles, as now or hereafter amended. B. "Facilltles" means the Facllltles as deflned In the Agreement. C. "Site" means the land descr1bed in Exhlblt A attached hereto and all easements, licenses, prlvlleges, rlghts and appurtenances related thereto. There are cur- rently no bUlldlngs, structureS or lmprovements now sltuated or erected on the Slte. D. "Sublease" means any lease, sublease, llcense or concession agreement (other than thls Ground Lease) lnvolvlng the use or occupancy of the Slte or any part thereof, lncludlng, without llmltatlon, the Agreement. E. "Rent" includes the "Base Rent" and "Addl- tional Rent" (both as here1nafter deflned). 2. Lease vi the Slte. Clty hereby leases to Lessee, and Lessee hereby takes and hlres from City, the Slte, in consideratlon of the rents, covenants and agree- ments, and upon the terms and condltions set forth hereln, subject to any and all existing and future encumbrances, condltlons, covenants, easements, restrictions, rlghts-of- way, and all other existlng and future matters of any nature affectlng the Site (in each case whether or not of record) durlng the "Termu (as herelnafter defined), such matters as \ , . . - may be d1sclosed by an inspection or survey, and all zon1ng, land use, subd1vis1on, and all other laws, rules, regulations and ]ud1c1al or adm1n1strative orders now or hereafter appl1cable to the S1te or any part thereof or any use or occupancy thereof (herein collectively called "Exceptions"). 3. Term. The term of th1S Lease ("Term") shall commence on the date hereof and terrn1nate on the earlier of (1) Octobe-r 1, 2007, or (11) the date upon which all "Lease Payments" (as def1ned 1n the Agreement) shall have been pa1d ln full or (1ii) the date upon wh1ch the Agreement shall have been terminated for any reason whatsoever, unless terminated earller in accordance w1th the provisions hereof. 4. Rent. As rental for the Site, Lessee shall pay the sums hereinafter set forth: A. Base Rent. Lessee shall pay to City dur1ng the Term a min1mum net annual rent ("Base Rent") ln the amount of One Dollar ($1) per year, which Base Rent 1S pay- able as more fully descr1bed 1n Paragraph 4C below. B. Additional Rent. Lessee shall also payor cause to be pald w1thout not1ce, except as may otherwlse be required 1n th1s Ground Lease, and w1thout abatement, deduc- t10n or set-off, as addlt10nal rent ("Addltlonal Rent"), any add1t1onal sums, 1mpos1t1ons, costs, expenses and other pay- ments whlch Lessee assumes or agrees to pay in any of the prOV1S1ons of this Ground Lease, and 1n the event of any nonpayment thAreof, City shall have (in add1t1on to all other rlghts and remed1es) all the r1ghts and remed1es provlded f0r hereln or by law in the case of nonpayment of rent. C. Rent Payments. All payments of Base Rent, Addlt10nal Rent and other payments requlred to be made to Clty shall be ln lawful money of the Unlted States of Amer1ca and shall be paid to City at C1ty's address for notices set forth 1n Paragraph 34 or at such other place as City may des1gnate by not1ce in writing from time to t1me and may be made by check or draft payable to the order of such payee, Wh1Ch check or draft must be pa1d in full when presented. All payments of Base Rent shall be made without deduct10n or offset and w1thout notice in annual installments 1n advance on October 1 of each and every year dur1ng the Term, com- menclng on the date of execut10n of th1S Lease (the "Rent Commencement Date"). If the Rent Commencement Date shall be a day other than October 1, Base Rent for the year ln WhlCh the Rent Commencement Date occurs shall be apportioned and shall be pald on such Rent Commencement Date. Notwlthstand- 1ng any d1spute between Lessee and C~ty, Lessee shall make or cause to be made each and all Rent payments when due and shall not w1thhold or permit to be withheld any Rent payments pending the flnal resolutlon of such d1spute nor shall Lessee assert nor permlt to be asserted any r~ghts to setoff or counterclaim agalnst the obli9at~on to make Rent payments as set forth hereln. D. Net Lease. It is the purpose and intent of City and Lessee that Rent payable hereunder shall be abso- lutely net to Clty so that this Ground Lease shall Y1eld to Clty the Rent specified, free of any charges, assessments, or 2 ':.-, . .. 1mpos1tions of any k1nd charged, assessed, or imposed on or aga1nst the Site, and without abatement, counterclaIm, deduc- tIon, defense, deferment or set-off by the Lessee, except as hereIn specifically otherwIse provided, and C1ty shall not be expected or required to pay any such charge, assessment or impos1tlon, or be under any obligation or 11abilIty hereunder except as hereIn expressly set forth, and that all costs, expenses and oblIgations of any kind relating to the malntenance and operatlon of the SIte, includIng all altera- t1ons, repalrs and replacements as here1nafter provided, WhlCh may arlse or become due during the Term shall be paId by Lessee. Lessee covenants that it will remaIn obl1gated under this Ground Lease in accordance WIth 1tS terms and WIll take no actIon to terminate, rescind or avoid thIS Ground Lease for any reason, notwlthstand1ng the bankruptcy, 1nso1- vency, reorganlzation, compositIon, readjustment, llqulda- tlon, dissolutIon, wIndlng-up or other proceed1ng affectlng Clty or any actlon WIth respect to thIS Ground Lease WhICh may be take~ by any trustee or receiver of City In any such proceed1ng, or by any court in any such proceedIng. Lessee wa1ves all rights wh1ch may at any time eXIst by law to qUIt, termInate or surrender th1s Ground Lease or all or any part of the SIte, or to any abatement, dIminution or reductIon of rent or any other sums payable by Lessee under thIS Ground Lease. Lessee expressly waIves the proviSIons and benefIts of Sections 1932(2) and 1933(4) of the Ca11forn1a CIV11 Code, and any s1m1lar statute or rule of law now or hereafter In effect Wh1Ch would rel1eve the Lessee from any obl1gat1ons to pay Rent or other sums under thIS Ground Lease on account of any damage or destructlon to the SIte. Noth~ng 1n thIS Para- graph 4D shall constItute a waIver by Lessee of Its rIght to br1ng an independent cause of action aga~nst CIty f~r any default or breach by CIty under th1s Ground Lease or under any other agreement to which CIty and the Lessee may be par- tles; prOVIded, however, that no such cause of act10n shall under any c1rcurnstances entItle the Lessee to offset, abate, deduct from or defer the pa1~ent of Rent, or such other sums as are payable by 1t under thIS Ground Lease. 5. Use of The site. A. Lessee shall have the rIght durIng the Term hereof to construct the Fac111t~es and to use the Slte ln accordance WIth the provlslons of the Agreement. B. Lessee shall well and truly keep, observe and perform, or cause to be kept, observed and performed, all valId and lawful obl1gatlons or regulatIons now or hereafter 1rnposed on 1t by contract, or prescrIbed by any law of the UnIted States, or of the State of Californ~a, or by any off1- cer, board or comm1SS1on haVIng ]urisdlction or control, as a condit1on of the contlnued enJoyment of any and ever~ rIght, prlvllege or franchlse now owned or hereafter acquired by Lessee, includ1ng 1tS rlght to exist and carryon bUSIness as a national bank1nq aSSOCIatIon, to the end that such r1ghts, pr1v1leges and franchises shall be maintalned and preserved, and shall not become abandoned, forfeited or in any manner lmpalred. 6. Utillties. All maintenance and repalr of the SIte and the Facilities shall be the responslblllty of 3 ~ . . Lessee, and Lessee shall pay for, or otherw1se arrange for the payment for, any necessary ut~l~ty serv~ces suppl~ed to the S~te and the Facilit~es, all costs of operat~on of the S~te and the Fac~lities and all costs of repair and replacement of the 51te and the Fac~lltles resultlng from ord~nary wear and tear or want of care on the part of Lessee. In exchange for the rent payments hereln prov~ded, C~ty agrees to prov1de only the Slte. 7. Taxes. Lessee will payor cause to be paid all taxes, assessments and other governmental charges, lf any, that may be levled, assessed or charged upon the Slte or the Facl11tles or any part thereof, promptly as and when the same shall become due and payable; provided, however, that Lessee shall not be requ~red to pay any such tax, assessment, or charge ~f the valld~ty thereof shall concurrently be contested ~n good fa~th by appropr~ate proceed~ngs, and lf Lessee shall set as~de, or cause to be set as~de, reserves deemed by lt to be adequate wlth respect thereto and prov~ded further, that Lessee, upon the commencement of any proceed- lngs to foreclose the lien of any such tax, assessment, or charge, wll1 forthw~th pay, or cause to be pald, any such tax, assessment or charge, unless contested ~n good falth as aforesa~d. Lessee wll1 not suffer the Slte or the Facll1tles or any part thereof to be sold for any taxes, assessments or other charges whatsoever, or to be forfeited therefor. Noth- ing here~n contained shall be deemed to impose any 11ab~1~ty to pay taxes, assessments or charges where none 1S imposed by law. 8. Insurance. At all t~mes during the Term of thlS Ground Lease, Lessee shall procure arj ma~nta~n or cause to be procured and ma~nta~ned ~nsurance aga~nst the hazards and 11ab~llt~es, and ~n the amounts, set forth 1n the Agree- ment. Cert~f~cates of all pol1cles eV1denc~ng such ~nsurance shall be del1vered to C1ty, w~thout demand. All pol~c1es of ~nsurance prov1ded for herein shall be 1n such form and ~nclude such deduct~bles, endorsements and wa1vers and be w~th such 1nsurance companies as shall be set forth 1n the Agreement. All such pol1cles shall name Clty and Lessee as 1nsureds thereunder, and shall provide that the same may not be cancelled or amended wlthout at least thirty (30) days pr~or written notice be~ng g~ven by the 1nsurer to all ~n- sureds thereunder. 9. No Warranties by C1ty. Lessee acknowledges that Lessee has full knowledge of all matters pertaln~ng to the S~te, ~nclud~ng, but not l~m~ted to, the cond~t~on of t~tle to the same and the phys~cal condition of the same, and that Lessee is leaslng the S~te "AS IS." C~ty makes no war- ranty of any kind or nature, express, implied, or otherwlse, or any representations or covenants of any klnd or nature ln connectlon with the tltle to or conditlon of the Site or any part thereof, and Clty shall not be liable for any latent or patent defects therein or be obllgated 1n any way whatsoever to correct or repair any such latent or patent defects. 10. Restoratlon and Maintenance. A. Lessee shall operate, maintaln and preserve, or cause to be operated, mainta~ned and preserved, the Slte 4 . " and the Facllitles 1n good repair and working order and will operate or cause to be operated the Slte and the Facl11tles 1n an efflc1ent and economlcal manner. B. City shall have no obligation to make any repalrs, decoratlng, replacements, restoratlons, alteratlons, addlt10ns or 1mprovements whatsoever unto or about the Site and the Faclllties or any part thereof, or to restore the same or any part of the same 1n the event of Its loss, destructlon or damage, and Lessee hereby waives any right It may have to make repairs at the expense of City WhICh may be provJded for by any applicable present or future law or Judlclal declslon, lncludlng, wlthout limltatlon, the provlslons of California CIVil Code SS 1932, 1933, 1941 and 1942. 11. Interference. Lessee shall have no cla1m against CIty for any damage, nor shall Lessee (except as otherwise expressly herein provlded) be released from any of the terms, covenants or prOVIsions of thIS Ground Lease should Lessee's possession of the Site or any part thereof be disturbed or interfered wlth or affected in any manner by reason of the acts or omlSSlons of any person, or by reason of the enactment or adoption of any law, ordinance or regula- tlon or by reason of any other act of any governmental authorltYi prOVided, however, that the forego1ng shall not llmlt City's liablllty for Clty's wrongful 1nterference wlth the rights of Lessee under thiS Ground Lease. 12. Liens. Lessee shall keep or cause to be kept the Slte and the Facllltles and all part3 thereof free from Judgments, from mechan~cs' and ~,ater~almen's liens and, except as to Except1ons, free from all liens, clalms, de~ands and encumbrances of whatsoever nature or character, to the end that the Site and the Facll1tles may at all times be malntalned and preserved, and Lessee shall keep or cause to be kept the Slte and Facllitles free from any cla~m or 11a- billty WhlCh, ln the judgment of C1ty might lmpalr or impede the operatlon of the Site and the Facil1t1es; provlded, how- ever, that Lessee shall not be requlred to pay any such llens, clalffis or demands if the valldlty thereof shall con- currently be contested ln good falth by approprlate proceed- lngs, and lf Lessee shall set aside or cause to be set aside reserves deemed by lt to be adequate with Iespect thereto and provided further, that Lessee upon the commencement of any proceedlngs to foreclose the llen of any such charge or clalm, will forthWIth payor cause to be pald any such charge or claim unless contested in good falth as aforesald. C~ty, at its optlon (after flrst givlng Lessee ten (10) days' wrlt- ten notlce to comply therewith and fallure of Lessee to so comply wlthin said ten-day perlod) may defend agalnst any and all actions or proceedlngs In which the valld1ty of thlS Ground Lease is or mlght be quest~oned, or may payor com- p~c~lse any claim or demand asserted ln any such actions or proceedlngs; provided, however, that, in defending against such actions or proceedings or in paying or compromising such clalms or demands, City shall in no event be deemed to have walved or released Lessee from liab~lity for or on account of any of its covenants and warrantles contaIned herein, or from ltS liablllty hereunder to defend the validity of thlS Ground j ~ . " Lease and the pledge here1n made to perform such covenants and warrant1es. 13. Encumbrances or Sales. Except as to Excep- t~ons, Lessee will not create or suffer to be created any mortgage, pledge, l~en, charge or encumbrance upon the S1te or Fac11it~es or any part thereof, or upon any real or per- sonal property essent~al to the operat~on of the Site or the Fac~11t1es. Lessee w111 not sell or otherwise d1spose of the S~te or the Fac11it1es or any property essential to the proper operat1on of the S1te or the Faci11t1es, except as otherw1se prov1ded here~n. 14. Prosecution and Defense of Suits. Lessee shall promptly, upon request of C1ty, from t~me to t1me take or cause to be taken such action as may be necessary or proper to remedy or cure any defect in or cloud upon the t1tle to the S1te or the Faci11t1es whether now eX1sting or hereafter develop~ng and shall prosecute all such suits, act10ns and other proceed1ngs as may be appropr1ate for such purpose and shall indemn1fy or cause to be 1ndemn1f1ed C1ty and ~ts ass1gns for all loss, cost, damage and expense, includ1ng reasonable attorneys' fees, Wh1Ch they or any of them may incur by reason of any such defect, cloud, SU1t, act10n or proceed~ngs. 15. Recordation and F1ling. Lessee shall record and f11e, or cause to be recorded and filed, a memorandum of th1S Ground Lease and all such supplemental 1nstrurnents and other documents a~ may be required by law (together w1th whatever else may be necessary or be reasonably required by C1ty or 1tS ass~gnee), in such manner, at such t~mes and 1n such places as may be required by law in order fully to pre- serve and protect the rights of C1ty hereunder. 16. Wa1ver of Laws. Lessee shall not at any t~me ins~st upon or plead ~n any manner whatsoever, or cla1m or suffer or take the benef~t or advantage of any stay or exten- sion law now or at any time hereafter 1n force which may adversely affect the covenants and agreements conta1ned here1n and the benef1t and advantage of any such law or laws is hereby expressly wa1ved by Lessee to the extent that Lessee may legally make such wa1ver. 17. Comp11ance with Cond1tions Precedent. Upon the date of del1very of this Ground Lease, all conditions, acts and things required by law or by th~s Ground Lease to have happened or to have been performed precedent to or ~n the execut~on hereof shall exist, have happened and have been performed, and th1S Ground Lease shall be w1thin every l~mit prescribed by law. 18. Power t.o Enter into Ground Lease. Lessee is duly author1zed pursuant to the law to enter 1nto this Ground Lease. The prov1s1ons of th1S Ground Lease are and will be the valid and legally enforceable ob11gations of Lessee in accordance W1th the1r terms. 19. Further Assurances. Whenever and so often as requested so to do by any party, the other party w111, upon wr1tten request by such party follow1ng reasonable notice, 6 . . execute and del~ver or cause to be executed and del~vered all such other and further instruments, documents or assurances, and do or cause to be done all such other and further th~ngs, as may be necessary or reasonably requ1red in order to fur- ther and more fully to vest ~n such party all r~ghts, Inter- est, powers, benef1ts, prIvileges and advantages conferred or Intended to be conferred upon such party hereunder. 20. Condemnation; Damage or DestructIon. A. In the event of damage or destruction to the SIte or the Facll1tles or any part thereof or In the event a proceedlng in emlnent domaln or condemnatIon 15 lnstltuted aga~nst the SIte or the Fac~l~ties or any part thereof, the Agreement shall eIther cont1nue or termInate pursuant to the terms of the Agreement; if the Agreement terminates (Lessee acknowledlng that CIty, as sublessee of the Slte and lessee of the FaCIlItIes, shall have the option, at Its sole dlscre- t1on, to exerClse or not exerClse any r1ghts ccnta1ned 1n the Agreement), thIS Ground Lease shall also terminate and all "Net Proceeds" (as defined In the Agreement) of any Insurance or condemnatIon award shall be allocated In accordance WIth the prOVISIons of the Agreement. If the Agreement does not termInate (Lessee acknowledlng that CIty, as sublessee of the SIte and lessee of the FaCIlItIes, shall have the optIon, at lts sole discretIon, to exerCIse or not exerClse any rIghts contained In the Agreement), the provlsions of the Agreement WIth respect to repalLs or restoratIon and the allocatlon of Net proceeds of any Insurance or condemnatlon award shall govern. NotWl thstandlng tl'e foregOIng, In the event that for any reason the Agreement has been termInated and this Gro~nd Lease IS contlnulng, Lessee shall not be entItled to the Net Proceeds of any lnsurance or condernnatlon award or any portIon thereof and all of the same shall be the property of Clty. 21. Assignment and Subletting by Lessee. Other than as contemplated by the Agreement, Lessee shall not (1) assign or otherwlse transfer thIS Ground Lease or any part thereof or lnterest thereln, or permIt the same to be asslgned or otherwlse transferred, or (11) enter Into Sub- lease(s) for the use and occupancy of the site or leases for the use and occupancy of the Facilities or portIons thereof, whether voluntarIly or involuntarlly, by operatIon of law or othennse. 22. Default. A. E~ents of Default. The follOWIng shall be "Events of Default" hereunder and the term "Event of Default" shall mean, whenever It 1S used hereIn, anyone or more of the follOWIng events: (a) FaIlure by Lessee to pay any Rent required to be paId hereunder at the tlme specifIed herein and the continuatIon of said fa1lure for a period of thirty (30) days after written not1ce specifYIng such failure and requesting that It be remedied has been given to Lessee by Clty, unless city shall agree in writing to an extenSIon of such perl ad prior to ltS explration; or 7 . .. (b) Failure by Lessee to observe and perform any covenant, cond1t1on or agreement on 1tS part to be observed or performed, other than as referred to in clause (a) of th1S Paragraph 22, for a per10d of th1rty (30) days after written not1ce specifY1ng such fa1lure and request1ng that it be remed1ed has been given to Lessee by C1ty, unless C1ty shall agree in wr1ting to an extens10n of such t1me pr10r to 1t5 expiration; provided, however, if the fa1lure stated 1n the not1ce cannot be corrected wlth1n the appl1ca- ble period, City w1ll not unreasonably w1thhold its consent to an extension of such t1me 1f correct1ve act10n 1S inst1- tuted by Lessee with1n the app11cable per10d and d111gently pursued unt1l the default 15 corrected; or (c) A court hav1ng jurisdiction 1n the prem- 1ses shall enter a decree or order for rel1ef in respect of Lessee 1n an 1nvoluntary case under any app11cable bankruptcy, 1nsolvency or other slm1lar law now or hereafter 1n effect, or appo1nt1ng a rece1ver, l1quidator, ass1gnee, custodian, trustee, sequestrator (or sim11ar offlc1al) of Lessee or for any substantial part of 1ts property, or order1ng the wind1ng up or 11qu1dat1on of 1tS affa1rs, and such decree or order shall rema1n unstayed and 1n effect for a per10d of S1xty (60) days; or (d) Lessee shall commence a voluntary case under any app11cable bankruptcy, 1nsolvency or other s1m1lar law now or hereafter 1n effect, or shall consent to the entry of an order for r~l1ef ln an 1nvoluntary case under any such law, or shall consent to the appOln~ent of or taklng posses- Slon by a rece\ver, llqu1dator, asslgnee, trustee, custodlan, sequestrator (or sim11ar offlcial) of Lessee or for any sub- stantlal part of 1ts property, or shall make any general asslgnment for for the benef1t of cred1tors, or shall fall generally to pay its debts as they become due or shall take any corporate act10n ln furtherance of any of the forego1ng. B. Remedies on Default. (I) Upon the happening of any of the Events of Default spec1fied above, City may exercise any and all remed1es avallable pursuant to law or granted pursuant to thlS Ground Lease. In the event of an Event of Default, Lessee shall, as here1n expressly provided, continue to remain liable for the payment of Rent and damages for breach hereof and the performance of all condltions hereln contained and, 1n any event, such Rent payments and damages shall be payable to the City at the time and 1n the manner set forth 1n paragraphs (a) and (b) of this subsection. (a) In the event that City does not elect to terminate th1S Ground Leas~ pursuant to paragraph (b) below, ~essee agrees to and shall remain llable for the payment of Rent payments and the performance of all cond1tions here1n contained and shall re1mburse City for any deflciency ar1s1ng out of the relett1ng of the S1te and the Facll1t1es, or, in the event that City or 1ts assignee is unable to relet the S1te and the Facilities, then for the full amount of the Rent payments to the end of the term of th1S Ground Lease, but sa1d Rent payments or def1ciency shall be payable only at the same t1me and in the same manner as 8 ~ . - provided herein, notw~thstanding any suit in unlawful deta~ner, or otherwise, brought by City for the purpose of obta~n~ng possession of the site and the Facilities or the exerc~se of any other remedy by the C~ty. Lessee heleby irrevocably appoints C~ty as the agent and attorney-~n-fact of Lessee to enter upon and relet the Site and the Fac~l~t~es in the event of default by Lessee. Lessee hereby exempts and agrees to save harmless C~ty from any costs, loss or damage whatsoever aris~ng or occas~oned by any such entry upon and lett1ng of the S~te and the Fac~11t1es, except for any such costs, loss or damage ar~s~ng from the gross negligence or willful mIsconduct of CIty. Lessee hereby waives any and all cla1ms for damages caused by City in tak~ng possess~on of the S~te and the FacII~t~es, for all cla~ms for damages that may result from the destruction of or ~nJury to the S~te and the Fac~lltles, and all claims for damages to or loss of any property belonging to Lessee that may be in or upon the S~te and the Faclllties, except for damages or loss ar1s1ng from the gross negl1gence or willful m~sconduct of C~ty. Lessee agrees that the terms of th~s Ground Lease constitute full and suff~C1ent not1ce of the rIght of Clty to relet the Slte and the Fac11~t~es w~thout effect~ng a surrender of th~s Ground Lease, and further agrees that no acts of City or ~ts ass1gnee 1n effect~ng such reletting shall const~tute a surrender or termlnatlon of this Ground Lease ~rrespectlve of the term for Wh1Ch such relett1ng is made, or of the terms and cond1t~ons of such reletting, or otherwise, but that, on the contrary, in the event of such defa~lt by Lessee, the r1ght to termInate th1S Ground Lease shall vest in C1ty to be effected 1n the sole and exclusive manner here1nafter prov1ded for 1n Paragraph (b) below. (b) Upon an Event of Default, Clty may, at its option, term~nate thIS Ground Lease follOWIng ten (10) days' wr~tten not~ce thereof to Lessee. In the event of ter- m~nat~on of th~s Ground Lease by C~ty on account of an Event of Default (and notwithstand1ng any reletting of the Site and the Fac~lltles), Lessee nevertheless agrees to pay to C1ty all costs, loss or damages howsoever arising or occurring payable at the same t1me and ~n the same manner as In the case of payment of Rent payments hereunder. C~ty may relet the S~te and the FaCIlities. Moneys rece~ved from such relett~ng and any surplus received by City from such relet- ting shall be the absolute property of CIty and Lessee shall have no r1ght or cla1m thereto. Neither not~ce to pay rent or to delIver up possession of the S~te and the FacIl1t~es g~ven pursuant to law nor any proceed~ng in unlawful deta1ner taken by City shall of itself operate to term~nate this Ground Lease, and no termInat~on of th~s Ground Lease on account of default by Lessee shall be or become effectIve by operation of law, or otherwise, unless and unt1l c~ty shall have glven written notice to Lessee of the electIon on the part of City to terminate th~s GrQ4nd Lease. eC) Suits at Law or in Equity and Mandamus. In addition to the remedIes set forth above, 1n case one or more of the Events of Default shall happen, then and in every such case, C~ty shall be ent~tled to proceed to protect and enforce the r~qhts vested 1n City by this Ground Lease by such appropriate judic1al proceed~ng as City shall deem most effectual to protect and enforce any such r1ght, eIther by 9 .~ . " SUIt in equIty or by action at law, whether for the specIfic performance of any covenant or agreement contained In thIS Ground Lease, or to enforce any other legal or equItable rIght vested in CIty by thIS Ground Lease or by law. The provIsions of thIS Ground Lease and the dutIes of Lessee and of the members, offIcers and employees thereof shall be enforceable by CIty by mandamus or other appropriate SUIt, actIon or proceedIng In any court of competent JurIsdIctIon. (1) WIthout 1Imlt1ng the general1ty of the foregoing, CIty shall have the rIght: (a) AccountIng. By actIon or SUIt in equIty to requIre the Lessee and Its offIcers, agents and employees to account as the trustee of an express trust. (b) InJunction. By actIon or suit In e~~ity to enJOIn any acts or thIngs Wh1Ch may be unlawful or 1n v1olat1on of the rIghts of C1ty. (c) Mandamus. By mandamus or other SUIt. act10n or proceed1ng at law or In eqUIty to enforce ItS or theIr rIghts against Lessee and Its and any of ItS offI- cers, agents, and employees, and to compel it or them to perform and carry out Its and the1r dutIes and oblIgations under the law and Its and their covenants and agreements WIth CIty as prOVIded herein. D. Non-Waiver. Noth1ng 1n th1s Paragraph 22 or 1n any other prov1sion of this Ground Lease shall affect or Impa1r the oblIgatIon of Lessee to pay the Rent pa}~ents, as hereIn provided. No delay or omISSIon of CIty to exerCIse any rIght or power arIs1ng upon the happening of any event of default shall 1mpa1r any such right or power or shall be construed to be a waIver of any such event of default or any acquIescence thereIn, and every power and remedy gIven by thIS Paragraph 22 to CIty may be exercised from tIme to tIme and as often as shall be deemed expedIent by CIty. E. RemedIes not Exclusive. No remedy herein or by law conferred upon or reserved to City IS 1ntended to be exclUSIve of any other remedy, but each such remedy IS cum- ulatIve and 1n addltlon to every other remedy, and every remedy gIven hereunder or now or hereafter eX1stIng, at law or In equIty or by statute or otherwise may be exercIsed WIthout eXhausting and wlthout regard to any other remedy conferred by any law. F. status Quo Ante. In case any suit, actIon or proceeding to enforce any rlght or exercise any remedy shall be brought or taken and then dIscontInued or abandoned, then, and 1n every such case, City and Lessee shall be restored to Its and their former positIon and rIghts and remedIes as If no such SUIt, actIon or proceedlngs had been brought or taken. 10 .~ . .. 23. Vestlng of Facilltles and Other Property and Interests; Removal of Personal Property. A. During the Term hereof, the Fac1litles shall be, as between C1ty and Lessee, the property of Lessee, but Lessee shall have no rlght to remove the same from the Slte wlthout C1ty'S pr10r wrltten consent. However, upon the exp1rat1on or sooner termlnatlon of th1S Ground Lease, Lessee's rlght, t1tle and lnterest in the Facllltles shall automatlcally, wlthout compensat1on to Lessee, vest solely ln Clty. In add1tlon, upon ana as of the expiration or sooner termlnatlon of th1s Ground Lease, all intanglble property selected by Clty wlthln SlXty (60) days after such termlna- tlon and owned or held by Lessee at such termlnatlon ln con- nectlon wlth the Slte or the Facllltles or any part thereof shall automatlcally, w1thout compensatlon to Lessee, vest solely ln Clty. Nothlng hereln conta1ned shall be deemed to requlre Clty to succeed to Lessee's lnterest in any such lntanglble property, nor to become obllgated or liable thereunder ln any respect or at all, except as selected by Clty. In no event wlll Clty be llable for any default of Lessee under the Agreement or ln connectlon w1th any such intanglble property WhlCh occurred prior to the later of the termlnatlon of thlS Ground Lease or the selectlon of the partlcular item of 1ntanglble property by Clty as aforesald wlth respect to WhlCh such default relates. Lessee shall upon Clty'S demand del1ver to Clty such asslgnments. deeds, instruments and documents as Clty shall request to conflrm C1ty's ownershlp of the Fac1l1tles and the other ltems acquired by Clty as aforesaid. 24. Preservatlon and Inspectlon of Documents. All documents recelved by Clty or Lessee under the provlslons hereof shall be retalned in the respectlve possession of City or Lessee, as the case may be, and shall be subJect at all reasonable times to inspection by the other party hereto and ltS asslgns, agents and representatlves, any of whom may make copies thereof. 25. Parties in Interest. Nothlng hereln expressed or implled 1S intended to or shall be construed to confer upon or to give to any person or party other than C1ty and Lessee any r1ghts, remedles or claims under or by reason hereof or any covenants, condltlon or st1pulation hereof; and all covenants, stlpulat1ons, promises and agreements here1n contained by or on behalf of Clty or Lessee shall be for the sole and exclusive benef1t of C1ty and Lessee. 26. No Reco~rse Under Ground Lease. All covenants, stipulat1ons, promlses, agreements and obligat1ons of the parties hereto conta1ned herein shall be deemed to be tha covenants, st1pulat1ons, promises, agreements and obllgations of the part1es hereto, respectlvely, and not of any member, officer, employee or agent of the parties hereto in an 1ndlvldual capac1ty, and no recourse shall be had for the payment of the Rent payments or for any clalm based thereon or hereunder against any member, officer, employee or agent of the partles hereto. 11 . .. 27. Binding Effect. This Ground Lease shall 1nure to the benefit of and be blndlnq upon City and Lessee and their respectlve successors and assigns. 2B. severabllity. If anyone or more of the cove- nants, stlpulatlons, prornlses, agreements or obllgatlons provlded hereln on the part of C1ty or Lessee to be performed should be determlned by a court of competent jur1sdlctlon to be contrary to law, then such covenant, stlpulatlon, prom1se. agreement or obllgatlon shall be deemed and construed to be severable from the remalning covenants, stipulations, prom- 1ses, agreements and obllgatlons herein conta1ned and shall 1n no way affect the validlty of the other provlsions hereof. 29. Headlngs. Any headings preceding the text of the several Articles and Sectlons hereof, and any table of contents or marglnal notes appended to coples hereof, shall be solely for convenience or reference and shall not con- stltute a part hereof, nor shall they affect its meanlng, construct1on or effect. 30. Applicable Law. This Ground Lease shall be governed by and construed In accordance with the laws of the State of Callfornla. 31. tlflcate wlth nant provlded of any actlon Form of Certlflcate of Offlcers. Every cer- respect to compllance with a condltlon or cove- for hereln and WhlCh is precedent to the taklng hereunder shall lnclude: (a) A statement that the person making or glvlng such certlflcate has read such covenant or condltlon and the deflnltlons hereln relatlnq thereto; (b) A brlef statement as to the nature and scope of the eX~~lnation or 1nvestlgatlon upon which the statements or oplnions contalned in such certlflcate are based; (c) A statement that, in the oplnlon of the slgner, signer has made or caused to be made such examlnation or lnvestigatlon as is necessary to enable the slgner to express an lnformed opinion as to whether or not such cove- nant or cond1tlon has been compIled wlth; and (d) A statement as to whether. in the opin~on of the signer, such condltlon or covenant has been complied Wlth. A certlf1cate may be based, insofar as it relates to legal matters, upon a certiflcate or oplnion of or repre- sentatlons by counsel, unless the persons providlnq the cer- tificate know that tl,e certificate or representations Wlth re~pect to the matters upon which the certiflcate may be based are erroneous, or 1n the exerClse of reasonable care should have known that the same were erroneous. 32. Miscellaneous. (a) This Ground Lease contalns the entlre agreement between the partles respectlng the matters herein 12 ~ . . set forth and supersedes all prior agreements between the part~es hereto respect~ng such matters. (b) Time 1S of the essence w~th respect to all matters prov~ded ~n th~s Ground Lease. (c) No waiver by C~ty of any default of Lessee or of any event, clrcumstance or condition permlttlng Clty to term~nate thlS Ground Lease shall be lmplied or ~nferred and no wrltten walver thereof shall constitute a walver of any other default of Lessee or of any other event, Clrcumstance or condltlon permlttlng such term~nation, whether of the same or of any other nature or type and whether precedlng, concurrent or succeed~ngi and no fa~lure on the part of City to exerClse any r~ght ~t may have by the terms hereof or by law upon the default of Lessee, and no delay in the exercise of such rlght, shall prevent the exer- Clse thereof by Clty at any time when Lessee shall contlnue to be 50 10 default and no such fallure or delay and no walVer of default shall operate as a waiver of any other default, or as a modlficat~on in any respect of the provi- Slons of this Ground Lease. The subsequent acceptance of any payment or performance pursuant to th~s Ground Lease (lnclud- lng, but not l~m~ted to, the acceptance of Rent pursuant to thls Ground Lease) shall not const~tute a wa~ver of any pre- V10US default by Lessee or of any prevlous event, circum- stance or cond~t~on or of any rlght of Clty to termlnate thls Ground Lease on account of such default, event, c~rcurnstance or condltlon, other than the default ln the payment of the partlcular payment or the performance of the partlcular mat- ter ~o accepted, regardless of C~ty's knowledge of the prev~- ous default or the prevlous event, Clrcumstance or cond~t~on, at the t~rne of accept~ng such payment or performance. nor shall Clty's acceptance of such payment or performance after termlnatlon constltute a relnstatement, extenslon or renewal of thls Ground Lease or revocatlon of any notlce or other act by Clty. (d) As used herein, "City" means the per- son(s), partnersh~p(s), corporatlonCs) or entltY(les) who is or are the owner or owners of the Slte at the tlme in ques- tlon, whether singular or plural ~n number and whether named ln th~s Ground Lease as City or having become the successor or successors in interest of the same. In the event City conveys ltS interest in the site, then lt shall thereupon be automatlcally freed and relleved from all obligat~ons under th~s Ground Lease which ar~se or accrue after the date of such conveyance. (e) "Lessee" as used hereln means the per- sones), partnership (5) , corporat~on(5), or ent1ty(ies) who lS named as Lessee 1n thlS Ground Lease and the person, partner- ShlP, corporation or ent~ty who at the time ~n question ~s a successor or successo~s 10 interest of such Lessee, whether slngular or plural in number; provided. however, that Lessee does not include any persoo(s), partnersh~p(s), corporation(s) or entity(ies) clalming under any assignment or other transfer proh~b~ted by th~s Ground Lease and thlS def~oition does not alter the provisions of th~s Ground Lease relat~nq to ass~gnment or subletting. If there shall be more than one person constltutlng Lessee, the~r obligatlons shall 13 ,". . . be jOlnt and several, and any notice requlred or permitted by the terms of this Ground Lease may be glven by or to anyone thereof, and shall have the same force and effect as lf glven by or to all thereof. (f) Each obllgation of Lessee under thlS Ground Lease constitutes both a covenant and a cond1t1on to 1tS rlghts under this Ground Lease. (g) Neither this Ground Lease nor anything conta1ned herein shall be deemed to make city 1n any way or for any purpose a partner, jOlnt venturer or assoc1ate 1n any relat1onsh1p w1th Lessee other than that of landlord and tenant, nor shall thlS Ground Lease or any provis1on thereof be construed to authorize elther to act as agent for the other except as expressly prov1ded in thlS Ground Lease. (h) The consent or approval by C1ty to or of a~y act by the Lessee requlrlng the Clty'S consent to approval shall not be deemed to waive or render unnecessary Clty'S consent or approval to or of any subsequent slmllar acts by the Lessee. (i) The locat1ve adverbs "here1n," "here- under," "hereto," "hereby," "here1nafter," and llke words wherever the same appear herein, mean and refer to thls Ground Lease 1n 1tS entirety and not to any speciflc para- graph or subparagraph hereof unless otherwise expressly des1gnated 1n context. Reference 1n th1S Ground Lease to the "obl1gatlons" of Lessee, and words of like 1mport, shall mean the covenant~ to pay Rent under th1s Ground Lease and all other covenants, agreements. terms, condltlons, limltatlons, exceptlons and reservatlons contalned in thlS Ground Lease appllcable to Lessee. The term "Lessee's obllgat:l.Ons here- under" and words of like import shall mean all obl1gatlons to thlS Ground Lease WhlCh are to be performed, observed or kept by Lessee. The terms "lnclude" "includlng" and slm1lar terms shall be construed as if followed by the phrase "w~thout be1ng l1m1ted to." (j) No surrender to City of thlS Ground Lease or of the Slte. or any part thereof or of any 1nterest thereln. shall be valld or effective unless provided for 1n thlS Ground Lease or otherwise agreed to and accepted in writlng by City and no act by Clty or any representat1ve or agent of city, other than such a written acceptance by C1ty, shall constltute an acceptance of any such surrender. (k) The covenants and agreements of th1s Lease cannot be altered, changed, modif1ed or added to, except in wr~t1ng s~qn~d by C1ty and Lessee. 33. ~er9"er. If both City's and Lessee's estates in the Slte or the Facilities or both become vested in the same owner wh~le the the Slte or the Facilit1es or the estate of City or Lessee there~n shall be Subject to one or more mortgages or deeds of trust, this Ground Lease shall nevertheless not be destroyed by the appllcation of the doctrine of merger except 14 \. . .. at the election of the mortgagee or beneficiaries under all such mortgages and deeds of trust. 34. Notices. Any not~ce, demand or document which any party ~s requ1red or may deslre to give to the other party shall be 1n wr1t1ng, and may be personally del1vered or g1ven or made by Un1ted states reg1stered or certlf1ed mall, return recelpt requested, addressed as follows: To Lessee: To C1ty: Wlth a copy to: Securlty Paciflc Natlonal Bank 330 South Grand Avenue 21st Floor 8-211 Los Angeles, California 90071 Attn: R1chard H. Clark C1ty of Santa Monlca 1685 Maln Street Santa Monica, CA 90401-3295 Attn: C1ty Manager City of Santa Monica 1685 Main street Santa Mon1ca, CA 90401-3295 Attn: C1ty Attorney Santa Monlca Airport 3200 A1rport Avenue Santa Monlca, CA 90405 Attn: Alrport Director subJect to the rlght of elther party to des1gnate a d1fferent address for 1tself by notlce slmllarly glven. Any notlce, demand or document so glven by Unlted States mall Shall be deemed to have been glven on the fifth day after the same 1S depos1ted in the Un1ted States mail as reg1stered or certi- fled matter, addressed as above provlded, wlth postage there- on fully prepaid, except that any payments of Rent shall be deemed to have been made only when actually received by Clty. Any such not1ce, demand or document not given by registered or certifled mail as aforesald shall be deemed to be glven, dellvered or made only upon receipt of the same by the party or partles to whom the same 1S to be glven, delivered or made. 35. Offset Statements. Any party hereto shall dellver to any other party hereto, w1thln flfteen (15) days after rece1pt of a wrltten request therefor, an offset state- ment stating the date to WhlCh Rent has been pald, the amount of any prepaid Rent, and stating whether such party has any ac~ual knowledge that th1S Ground Lease is not in full force and effect, whether such party or any other party is 1n default hereunder, and whether thlS Ground Lease has been modified or amended. 36. Attorneys' Fees. In the event that elther Clty or Lessee fails to perform any of its obligatlons under thlS Ground Lease or in the event a dispute arises concernlng 15 1t . the meaning or interpretation of any prov~s~on of th~s Ground Lease, the default~ng party or the party nct prevaLlLng in such dLspute, as the case may be, shall pay any and all costs and expenses incurred by the other party ~n enforc~ng or estab11sh~ng its rights hereunder, includ1ng, w1thout 11m~ta- t~on, court costs and reasonable counsel fees. The r1ght of C~ty or Lessee, as the case may be, to all costs and expenses 1ncurred by it in enforc1ng or establish1ng 1tS rights here- under pursuant to the provis1ons of th1s Paragraph 36 shall 1nclude, w1thout limltat1on, all costs and expenses 1ncurred by C1ty or Lessee, as the case may be (includlng, without l1mltatlon, court costs and reasonable counsel fees) 1n the enforcement of all obllgat1ons of Lessee or City, as the case may be, under this Ground Lease or otherwise wlth respect to the Site, whether or not legal action was commenced, and LncludLng all such costs and expenses incurred 1n an actlon or part1clpation 1n, or in co~~ectlon wlth, a case or pro- ceedlng under Chapter 7 or 11 of the Bankruptcy Code, or any successor statute thereto. IN WITNESS wEEREOF, the partles have executed this Ground Lease as of the day and year f1rst above wr1tten. Approved as to form: "Lesseelt SECURITY PACIFIC NATIONAL B&~K Robert M. Myers, Esg. Clty Attorney :e ,. i . Vice Presldent By: Vice President "Clty" CITY OF SANTA MONICA By: C~ty Manager Attest: City Clerk 16 ,. ~o. ~ ,-. ." EXHIBIT A (LEGAL DESCRIPTION) LEGAL DFSCRIPTION SANTA MONICA AIRPORT ADMINISTRATION ....ND SPECIAl. TV f.B.O. PARCEL Commencing at the most southerly corner cl Tract No. )4609 In the- City 01 Santa Monica, County 01 Los Angeles, filed in Book 199, Pages} and 6, in OUlce 01 the County R~cords of s&ld County; thenc~ South 31;047'}'" East along the nortl'leasterly city limits line, City of Santa Monica 280.62 feet; thence South lt402I'1&" West "1.57.73 feet; thence South 45038'1;2" East 705.15 feet to the TRUE POINT OF BE GI"~Ir--;G for this pa.rcel; thel'lc~ South 41;021'18" West 156.'0 feet; thence South 1j.5038'42" East 2.50,00 feet to the beginnmg of a curve concave northe-rly having a ra~Jll5 of .57..50; thence ea.ster)y along said curve through a central angle 01 90000'00" an arc distance of 9::.32 feet; thence North 1I1,'02J'18" East 636..50 feet the beginning of a. cur"", cC>l'lca\le tlorth....este~ly haVIng a radius of 212.50 teet; thence northwesterly a)o'lg sale curve through a central angle of ,,006'17" an arc distance of 63.111, feet; tne"'ce ,'ort/', 4.5038'42" V, est 298.10 feet to the TRUE POlr>;T OF BEGINNING. e - /Pp.- ,!/,t:JS- -~3 . 1 AGREEM.E~'T FOR S~B~EASE OF AIRSPACE AND CONSTR0C~IO~, OPERATIO~ AND MAINTEN~CE OF PARKING FACILITIES THIS AGREE.'1ENT (" Scl~lease") mace- as of the day of , 1979, ~f an~ betwee~ tr:e CI':'Y OF SA~TA MONIC.I; (t:Je "Ci ty"), a rr:.:nlcipal co:pora~lOr. orga"lze~ and existlng under a Charter aao~tec and approvec unae: the Cons~l~Jtio~ of the S~ate of Callfornla, and TE~EKL~- PROD0CTIO~S, INC., a CalifornIa corporatIon ("Tenant"), WIT!'lESSETS: WHEREAS, Tenant intends to develOp an eleven story offlce and co~~erclal buildIng and related lmprove~ents (the "ProJect") on property located at the IntersectIon 0: Ocean anc Arizona Avenues in the Clty of Santa Monlca, which development necessitates provlsion of both on-site and off-SIte vehlcular parklng facllities; and WHEREAS, a portIon of the Project is located wlthln the Parking and Buslness Improve~ent Area assessment district of the City of Santa Monica; and WHEREAS, the C1ty has entered into or 1S concurre~tly entering Into an agreement with the Parklng AuthorIty of the City of Santa Monica (the "Authority") provld1ng for the leasing by the Authority to the City of a certain alrspace parcel (the npremlsesn) described 1n Exhibit A hereto, in which will be built offstreet H P 'I l::;Jj l e e ~ vehIc~lar parkIng facIlities of approximately 304 spaces (the "M!2~e~ parkIng FacilitIes") in part for the purpose of servIng the proJect and In part to provide adGl~lO~a~ pUDl:8 parKIng facIlIties to the extent there is a demand therefor, a true and correct copy of which agree~ent (the "Master Lease") is attached hereto as Exhib1t B; and WHEREAS, the CIty and Tena~t desire tc enter I~to tnls Agreeme~c f~: t~e p~rpose ~f provlcl~; cer~al~ parkl~g fa~llltles by s~~leas:ng to ~ena~t a pcr~lon c: the Premises the "Developer Premises," is descrIbed in EX~lbit C hereto) and provIding for the construction and operatIon thereon anc therein of approximately 2-1/3 levels of vehicular parking contaInIng approxl~ately 204 pari<ln; 5p~ce= l:.he I-Developer S?a:::es"); WHEREAS, the Developer PremIses and the Developer Spaces are sometimes hereinafter referred to collectively as the "Property"; and WHEREAS, the 100 remaining parkIng spaces of the Master ParkIng FaCIlIties, toge~her WIth the airspace In W~IC~ they are located, here1nafter referred to as the "?~jlic Spaces", are depIcted 1n Exhibit D hereto and are lntended to be for the unrestr1cted use of the C1ty anc are not s~~leasea hereby. NOW, THEREFORE, In consideration of the mutual pro~~ses and agreements hereIn contained, the parties hereto agree as follows: Section 1. Lease of premIse~ and Agreement to Build. Subject to the Master Lease, Tenant hereby subleases from the Clty and the CIty hereDy demises and suoleases to the Tenant the Property. Appurtenant to the Property are easements over, across, through and under partlcular portions of the PubllC Spaces and the eXIstIng 2 e e ~ parking structure (t~e "ExIsting Structure") upon whIch the Master ParKlng FacIlitIes are to be constructed, WhICh easements are for purposes of support and ingress from and egress to public streets. Tenant hereby agrees wltP the CIty tha~ It WIll bUlld or ca~se to be built, in accordance wIth plans and specifications satisfactory to and approved by t~e CIty, the Master ParKIng FacIlItIes ~oge~~er Wl~~ necessary modlflca~ions ana Improvements to the EXlstlDS Struct~re, it bel~S exp:essly u~de~stood a~= agreed th~t fee title to the Developer Spaces shall be anc remaIn ;n Tenant for the term of thIS Sublease, and that fee title to the Public Spaces shall be in the City and/or the A~thorlty as their Interests may ap2ear. Such co~struction WIll be co~menced and thereafter be prosecuted dlllgently and continuously in manner desIgned to permlt completion thereof concurrently with completlon of th2 Project, subject to unavoidable delays. Section 2. Te~m. The term of this Lease shall ca~~ence on the date hereof and shall expire at midnight on the last day of the 480th mant~ af~er the date ("Completion Date") the Master Parklng FaCllltIes are substantially completed, as evidenced by a ce~tlficate of substantial completion executed by the archltect or general contractor for the Master ParKing Facilities and approved in writing by the City, unless extended or sooner terminated as herein provlded. upon the determination of the Completion Date hereunder, the parties shall execute an approprlate document, in recorda~le form, setting forth the expiratlon date of the term of this Sublease. 3 L e e Sectlon 3. Use; Covenant of Availability. (al Use. The Premlses shall be used by Tenan~ t~ const:uc~ tne Master Par~lng Facilltles, wnlch in turn shall be used, (i) as to the PUblic spaces, for pUbllC parkIng and, (il) as to the Developer Spaces, to provlde vehIcuLar par'lng In connection with the PrOject for Tenant, the tenants of the ProJect, 1tS anc thelr e~?:o~ees, ln~:~e~5 a~~ llce~se~5, anc Te.a:t's s~~teja~:s a~d aS51g~eesl a~c fa: no other p~~pose3 ~:tho~t t~c consent of the Cit~. Such use of the Developer Spaces shall ~e exclUS1.e as to Tenant and the other partles enumerated In the preceding sentence during the hours from 7:0Q a.m. to 6:00 p.m., Mondays t~roug~ Fridays, holIdays ge~er~::y observej by the Sar.ta Monica ana Los Angeles b~SI~ess co~~~nitles excepted; d~ring other hours and on Saturdays, Sundays and such holldays, such use of the Developer Spaces shall be non-excluslve and in co~W.on with memoers of the general public. (~) Cove~ants of Avallabllity. The Clty cave~ants, for itself a~d its successors and assigns, that sa long as (1) the Master Parking Facilities are 1n eXl.stence, (11) thIS Sublease is In effect, (lll) Ten3.;'Jt's rental pay~ents are paid as herein provided and (iv) Tenant is not in default under this Sublease, the Property shall be avallable to Tenant for the uses speCIfied hereln and Tenant may use and shall quietlY enjoy the Property wlthout hlnderance or molestation from anyone whomsoever. Section 4. Rental. (a) Base Rental. Tenant agrees to pay rent ("Base Rental") to the City for the Property for the portion Of term hereof commencing on the Completion Date 4 l e e l~ the agg~ega:e sum of $1.00 per annum, payable in advance en the Completion Date and each annIversary t,erec:. (b) AddItional Rent. Co~~enclng on the Completion Date and thereafter d~ring the term of t~IS Su~lease, Tena~t agrees to pay to the City as addItIonal rental ("AdditIonal Rent") hereunde~. as compensatio:: to the CIty fo~ the serVlces tc be p:ov:dec by t~E CIty p~:S~3nt to SectloD 5 be~a~, the s~r of S18,OCO pe~ a~n~~, Increased on an annually co~pounded basis for each year of the term hereof after the fIrst year following the Comple~lon Date, by the percentage increase in the Consumer PrIce Index (All Urban Consumers) for the Los Angeles--Long Beach--Anahel~ MetropolItan Area (or, in the event of discontInuance thereof, such other index, m~tually acceptable to the City and Tenant, pUblIshed by an agenc~ cr instrumentallty of the U.S. government to measure cha~ges in the cost of living in the Los Angeles metropolItan area) for the immediately preceding year. A~,ual AddItional Rent shall be red~ced by an amount WhICh is equal, during each given year, to the positIve clfference, If any, betwee~ (a) the surr-s assessed a~c levied agaInst the land and improvements constitutIng the Project and agalnst the Master ParKlng Facilities and the Pre~lses pursuant to or by reason of t~eir whole or partlal Incluslon In the ParKIng and Business Improve~ent Area assessment district of Santa Monica for the year in question and (b) the sums assessed and levied against the land on WhICh the project is being constructed and t~e improvements thereon, if any, pursuant to or by reason of their whole or partial inclusion in the parking and Business Improvement Area assessment dIstrlct of Santa 5 f ~ e e ~onlca fer the fiscal year enolng June 30, 1979. Annual Aaa:tlor.~l Rent sh~~l in no event be reduced below zero by reaso~ of ttlS provlsior.. Such annual s~rr, If ar.y s~a~l be pc:~ ln equal quarterannual installments in advance on January 1 and Aprll 1 and July I and October 1 of each year followlng the Completion Date untll expiratlon or ter~l~at:c~ of t~lS S~bleasei provide= that if the C~N?ie~lO~ Da~= IE o~~er t~~~ Ja~~ary 1 or Apr~l 1 O~ July I or Oc~c~er 1, the first and last quartera~,~a: installme~ts shall be prorated on a cailY 365 day year ba~l~, and the flrst such qUarteral.n~al insta~lme~t s~all be a~e a-= payable not later than 30 days after the Completion Date. Se=~lC~ s. Rtpair a~~ ~ai~~€~a~ce. T~e Ci~v s~al~ re~alr and maintain, GJring the ter~ of thlS SUbleaSE, the Developer Spaces in good order and repair anc shall pay, (i) all charges for utllitles respectlng the Developer Spaces, a~d (ii) all charges for maintenance and repalrs, and (ill) lnsurance pre~i~ms on the insurance speclfled i~ Section 9 hereof required to be provided and ~alr,tal~ed by the Clty. The standards of maintenance req~irec under thlS Su~lease s~all be such as could be expected of prudent and conscientlous operators of off-site par~ing facilities such as to maintain the Develc?~r Spaces in a reasonably neat, clean and a2st~:tically pleasant condition. To comply wlth this Sectlon, the City shall not be required to expend any sum in any year in excess of Additional Rent for such year oefore any adjustment thereto pursuant to the second sentence of Sectlon 4(b) above, nor shall the City be required to provide security for the Property, The City agrees to keep the Property free and clear of all llens 6 e e and enc~mbrances, except for those caused or consented to by t~e Autbority and by Tenant and except that the Clty may pledge revenues to be derlved therefrom. It 15 understood and agreed that it shall be the responsibility of Tenant to pay and discharge any and all taxes a~d assessments properly lev led against the Property. Sectlo~ 6. Charges for Par~~ng. Tenant may c~a~;e a~d collect SJC~ pay~e:.ts as It way desire for pa~ki~g priv:le~~3 l~ tje Developer Soa=e~ fro~ the partles enumerated 1n clause (11) of the first sentence of Sect10n 3 (a) above (the "Sect:1on 3 (al (ill Pecties"). The City shall not impose or collect any charge from the Sectlon 3(a) (11; Partles for use of the Developer Spaces; but the City may, dW~lng days and ho~rs when use of the Developer Spaces is not excl~5ive as to the Sectlon 3(a) (11) Part1es, 1mpose and collect charges for u~e 0= t~e Developer Spaces from other than Se.=tion 3 (a) (li) Parties. Sectlon 7. Adoltions and I~?rove~ents. (a) By t~e Clty. T~e City s~all have the rlght GU~lns t~e term of this Sublease, at its own expense, to m~~e or permlt to be made, any addlt10n to ~r lmprove~ents to the Master Parking Facilities which do not lmpair the utllity thereof for use as parking facilities and for other purposes which are now or may hereafter be permitted ~y law, to attach fixt~res, structures or signs thereto, and to place any personal property on or in the Master parKlng Fac1lities, provided the utlllty and use of the Master ParKing Fac1lities as parking faC1litles 1S not unreaso~ably interferred with and provided that no such worK by the City shall be inconsistent with the operation of the Master Par~lng Facllities, Title to all such 7 l - e pErsonal property and flxtures shall remain in the Clty or ln s~ch person as may be legally entitled thereto. (~l B; Te~a~~. ~ith the consent of the Clty (which consent shall not be un:easonably withheld), Tenant during the term of this Sublease may, at its own expense, ma~e or periliit to be made, any addition to or improve~ents to t~e Master Par~lng FaCil1ti~s whlch do not impalr t~e utlllty t~e:ecf for use as pa:~l~; fa=lll~lesl a~a ~a~ attac~ f:x~~~e5, s~ruct~res or SlglS t~ere~81 a~~ p'~~~ ~~~~ any personal property on or in the Master Parhing FaCllltles, provldec the utlllty and use of the Maste_ Par~lng Faclllties as parKlng faCIlities is not unreaso~ably Interfered wlth. Tltle to all suc~ personal property or flxtJreS whlch, may be re~oved wlt~o~t da~age to t~e Master Pa~King FaCllitles shall remain l~ Tenant or In s~ch person as may be legallY entitled thereto. Section 8. policles and Rules. The City shall establish and malntaln such reasonable general pollcles, rules and regulations for the repalr, management, maintenan~e, operatlon a~d use of the Master Par~lng Fa=:ll~ies cons~stent wlth the provlsions of th15 Sublease a~a the Master Lease as may be necessary. Such pcl1cies, rules an~ regulatlons shall be submittec to Tenant prlor to their effective da~e and shall become effective 30 days afte~ the date of such dellvery. The inltial general pollcies, rules and regulations shall be submitted to Tenant not less than 60 days prior to the anticipated Co~~encement Date. Sectlon 9. Insurance. (a) Obllgations of Tenant. Tenant shall, with respect to the Master Par~ing Facilities during only the perlod of construction of the Master Parking Facilities, 8 I l e e a~d after con~tru~tloP with respect o~ly Lo ]l~l'Jllt les a~lsips fro~ sucij construction and Tenant's operation of (~ut not Wlt~ respect to the Clty'S actlvltles l~ malntalnlng) the Developer Spaces: (i) Keep or cause to be kept a POllCY or pollCles of insurance against loss or damage to the ~aster ParKlng FaCllltles or Developer Spaces, as the case may be (t~e "Appllca~le S~ructu~e"), res~ltl~g frore fIre, lig~tnlns, va~j3:is~, rr3:1~ioJ~ ffilschlef, rlot a~j clv~l commotion, and such perlls ordlnarlly included In "extended coverage" poliCIes of flr€ insurance. Such lnsurance shall be maintalned in an amount not less than the f~ll Insu=a~le value of the Appllca~le St:~cture (as defIned below In Subsectlon (b) of this Sectlon 9} (s~ch value to Include amounts spent for construction of the AppllCaQle Structure, and architectural, eng1neering, legal an~ admlnistratlve fees and inspection and superVlslon), subJect to deductible provisions of not to exceed $10,000 for anyone loss; and (il) Maintain or cause to be maintaIned putllC lia~lllty insurance agalnst claims for bodily InJU:y or death, or damage to property OCCur:1Dg upo~, in or about the Applicable Struct~ret such insurance to afford protection to a limit of not less than $5,000,000 wIt~ respect to bodily inJury to or death of any number of persons in a given occurrence anc property damage insurance in an amount not less than $100,000 per occurrence; and (11i) Malntain or cause to be maintained workmen's compensation insurance issued by a responsible carrier authorized under the laws of the State of Callfornia to insure employers agaInst lIability for 9 ~ e e corr,pensatlon under the Workrr,e')'s compensation Insuran~e and Safety Act now in force in Californ1a, or any act herea:~er enc2tec as an ame~d~ent or supple~~nt the~eto or 1n lieu thereof, such workmen's compensatlo~ insurance to cover all persons employed 1n connection w1th the Appl1caole Structure and to cover full liability for co~pe,sat:on under a~y s~ch act aforesaid, based upon aeat~ or ~~j~lj i~J~~2 c:a:u~ ~~ds t~'1 f8r 0: OJ be~~~f cf a~y perS8~ incu:~ln9 O~ s~E:e:l'S In:u~j 0: deat~ du~iDS or In connectlOn wlth the Applicable Structure or the operatlon thereof by t~e Authority, rhe C1ty or Tenant. (bJ Definit10n of Term "Full Insurable Valued, The term "full 1nsurable va:ue" as used in this Sect1o~ 9 sha:l ~ea~ the actual replace~e~t cost, using the 1te~s of value set forth above (includ1ng the cost of restorlng the surface grounds owned or leased by the Au~horlty but excluding the cost of restoring trees, plants and shrubs), less phys1cal depreciation. Sald "full l~surable value" shall be determined from time to t1me but not less freque~tly tha~ once in every 36 months. (c} O~119ations of City. With respect to the Clty'S o~llgation to malntaln the Developer Spaces (but net Wlt~ respect to Tenant's operation or use of the Developer Spaces), the Clty shall: (i) Maintain or cause to be ma1~talned pu~lic lla~lllty ins~rance against claims for bod1ly inJury or deat~, or da~age to property occurring In{ upon or about the Developer Spaces, such 1nsurance to afford protection to a 11mlt of not less than $1,000,000 with respect to bOCllY 1nJury to or death of any num~er of persons in a given occurrence and property damage 10 - - lnsura~ce in a~ am~u~t net less tha~ $100.000 p~r ccc..::rence; an:: (1:) M2:~ta:~ or ca~se t~ DE ~a:r~2~n~= ~=:~~e~f5 c~-?e,5a~ic~ lns..::a~=e iS5~e~ by a res2=~s:~:e ca~r:e= a~~~=:lze= u~oer the la~s 0: tP€ S~at€ c: Cal:f~!~lS to ln5~re e~~loyers a;al~st lia~:lity fc= cc=?e~satio~ u~5e: the ~~:k~e~'5 C07?e~satlor I-5..::a~=E a~~ Sa~e:~ A:: n=~ l~ f==ce i~ Callfo:~:e, c: e-~ a=t he=ea:~e: e-=~:e: G~ a- a-E~=~~~~ C~ 5~~;:e-~-: t~~:e~: c: 1- ::e~ the:~~:, 5~~: W==K~~~t~ co~?e~S~~lC- l~E~~a~=€ t~ c=~e= a~~ p~~~~-E e-~:c~'e~ 1- c~~ne=tlO- ~lt~ t~E D€;~:=~~: S~a:EE a-~ tc co~~: fJ:: lia~:lit~ fc: c=-~~-~~-:~- ~~:e= a-~ . - s;c- a:: a:c=e~~l~r l)6.ce:: ~e~~' c: bO~~:~ l~J~ry clai~~ m~~e ty, fo~ C~ 0- be~a:f o~ a~y pe:s=- l~=~:rln; 0: suffe:lng i~Ju:y or aeat~ d~:ln; c: :r ~~~~e=~lO~ ~lt~ trE Deve:op€: Spa=es or the c~;:~::~~ t~€:e:: b; t~e A_~~~~~ty, the Clty or ~e~~~~. (e) Ge"e:1O~ Provls:o-:S. A:l ins~:a~ce provloee uncer S~~se=~lO~S (a) a~~ (C" 0: t;-;lS Sectio:l 9 c:.~-" "'! _ Q_J. be for the be:le::t of Teia-.t. t~~ A;~~O!lty aie the Clty, as na~ee insJrees. c~rin9 t~e te:- c: t~e ~a~:e: Lease 10-:: t~e:ea:te: f=: the bene::t c: t~e C:.. t.y I the A'..lthQr~ ty O~ the 'Iena~t as na:nec ~r::s.J.rec.5 as thelr respeetLve lnsurable lnterests appear. All lns~ra~ce prov~6ed under S~bseetlons (a) ane (e) 0= t~lS Sectlon 9 sr.all be perlodlcally revle~ed by the partles for the purpose of m~tually lncreaslng the ~lnl~~~ Ilmits of such lnsura~ce, fro~ tl~e to tL~eJ to amO;,lI:ts ...':-.lch rr,ay be reaso:1able and custo:r.ar:y for Sl:T\llar faCllltles 0= llke Slze and operation. All insurance herein provlded for ~~der thls Sectlon 9 shall be provided under policies lssued by lnsurers wlth a Best's pollcyholder's ratlng of A or -11- e e b~ttert licensed or permltted to do business in the State of Callfornia. All policIes or certificates iss~ed by the respective ins~rers shall provide that such policies or certificates shall not be cancelled or materially change~ wlthQ~t at least 30 days' prior W!ltten notice to ~e~a~tt the Clty and the Authorlty. Copies of such pollcles shall be deposited w:t~ the Clty a~c the A~t~JritYt toget~e: w:t~ ap?=op~iate eVlde~ce of paj~ent of t~e preDl~~5 therefor; and, at least 3D days prior to eXpIratlon dates of explrlng policies or contracts held bl t~e AuthorIty, c09les or renewal or new polices or contracts or certlflcates shall be oepos:ted with the Authority. All proceeds o! insurance with respect to loss or da~age to the Master Parklng Facllities during the term of the Master Lease shall be held in trust for rebUIlding of tte De~~loper Spaces; provided, however, that if the City or Authority fails, withIn 180 days after it ~s first physlcally a~d legally posslDle to do so, to co~~ence reconstructlon of the underlying Structure and Public Spaces, suc~ proceeds shall be paid to Tena~t free of any trust. If Tenan~ falls to CO~Tience reco~structlOn of the Develoger Spaces wlthln 180 days after the da~e it is first p~ysically and legally possible to do so, such ~nsurance proceeds shall be paid to the City free of any t~ust. (e} Self Insurance. To the extent customary as a matter of general Clty policy, and to the extent permlttea by law the Clty may self-insure any or all of the risks enumerated in this Section 9. 12 L e e SectIon 10. A~ateme~t of Rental. Tre Base Rental and Add1tional Rent hereunder shall abate dur1ng any perIod In W~lC~ by reason of a~y dawage or destructIon, or by reason of a ta~ing by power of effii~e~t domai~, there IS a substantIal interference wlth the use and occupancy of the Developer Spaces by Tenant a~c the SectIon 3 (a) (11) partIes, s'Jch a::Jatement to be on t~e ~a5:s 0: t~e p0:tiO~ of the Develop~r Spaces re~je:e= u~~sa~le by reasJ~ 0: S~~~ c~~ase, desLr~c~ion or ta~~;~~ SectIon 11. Ass19nment and S~blease. Tenant may mortgage, pledge, assIgn or transfer its Interest under thIS Su~lease by way of mortgage, deed of trust, sale and leaseback or any other form 0: conveyance or security agree~ent req~lred for any reasonable and customary method of co~s~ruction or lo~g term flnancing of the Project, and tne CIty agrees not to unreasonably withhold Its conse~~ tc c~a~ges in th1S Suolease reasona~ly requested by any such lender prOVIded that no additional o~ligation or burjen 15 imposed on the Authority or the C1ty as a result thereof and provided no rental or other payment by Tenant hereunder 1S thereby reduced; and provldec further, that all rIg~ts acqUIred under any such mortgage, plecge, asslgn~e~t or transfer shall ~e subject to each and all oE the covenants, conditions and restrictions set forth In this Sublease, and to all rights and Interests of the Authorit2 and the CIty hereIn, none of which covenants, conditions or restrictions is or shall be waived by the City by reason of giving Its consent hereunder. The City further agrees that Tenant may assign its entIre Interest herein to (a) a general partnership or joint venture in which Tenant is a partner, and (b) with the City's consent, which the City agrees not to unreasonably 13 e e ~lthhold, any successor to its Interest In the ProJect ID WhIC~ event Tenant shall be released from any and all ob:lgatlons hereunder accruI~g after the date of s~c~ asslgnme~t or other transfer or devolution. In additio~, Tenant may su~let or assign all or part of the Property as contemplatec by and conslstent Wlth SectIon 3(a) above, but In the case of such su=lettlng or assignment, Tenait sha~l a~ a:: tlrres re~21j lla~l~ fo~ t~e per:or~~~c€ 0: t~e c~Ve~a~ts a~d condl~lors O~ lts part to be ps~for~e~ hereu~der; and, except in respect of subletting of InolvIdual parKing spaces to Sectlo~ 3(a) (ill PartIes, any such SublettIng or assignment shall be subJect to the CIty's consent, w~lch consent the CIty agrees not to unre~SC~30:Y wit~~old. N2t i~co~e receivec from no~ SectIon 3(a) (11) PartIes shall be shared equally by CIty and Tenant. Section 12. ~,inent DQ~ain. If the whole of the P~operty or any part thereof shall be taken under the pOwer of eminent doma:n or sold to any governmental agency threatening to exerCIse the power of eminent do~ai~, the p~OV1SJOnS of t~e Mas~er Lease shall govern. Section 13. VolJntary Termlnatlon; Surrender. (al Volu~tar~.Ter~ination. SU~Ject to the consent of the A~thority, the City and Tenant may mutually terminate this Sublease or may modlfy the terms and provisions here~f, (b) Surrender Upon Termination. Upon the termInation of thlS Sublease. Tenant agrees that it shall surrender to the Clty the Master Parklng Facilities In good order and condition and in a state of repair that is conslstent with prudent use except for reasonable wear and tear and damage by casualty or the elements. 14 e . Se'tl0~ 14. LIens. Tenant and the CI~Y each respectively agree to pay, when due, all su~s of money t~at mav beco~e d~e for a~y laber, servIces, ~~~erlals, supplIes or equIpment furnIshed or to be furnishes to or for Tenant Or the CIty, as the case may be, in, upon or about the Property and which may be secured by mechanics', materialree,'s or other liens agaInst the Proper~y, a,djor the 1~te~est5 of the Cit1 Or AJtho:lty or Te~a~~ t~ere:r, a~c wl~l caJse each 5UC~ lle~ to be f~:ly dlsc~~rged and released at the time the performance of any obligatIon secured by s~ch lIen matures and/or beco~es due; provIded, however, that if Tenant or the City, as the case may be, deSIres to contest any such lle~, it may do so upon pro,ld:r.g the other party with a bend or other law:Jl securltv such as a guarantee, in form and amount satisfactory to such party, to guarantee payment of such lIen ane provIded, furthert that notwIthstanding any s~c~ contest, if any such lien shall be reduced to final Jucgillent and suc~ Judgment or s~ch process as may be iss~ed for the enforceme~t thereof is not promp~ly stayed, or if so stayed and said stay thereafter expIres, then and In such even~ the Tenant or the CIty, as the case may be, shall forthwith pay and dIscharge said judgMent. Section 15. Vestlng. Anything to the contrary in thIS Sublease notwithstancIng, the interest provided for In thIS S~blease shall vest, and the term thereof begin, if at all, not later than the number of years specifIed and set forth in Section 715.2 of the CIvil Code of the State of California, said specIfic perIod of years to be meas~red from the date of this Sublease. Section 16. Law Governing. ThIS Sublease shall be governed by the laws of the State of California, 15 l e e su~)ect to the waivers, excl~sions a~d provisions he~el~ co~tained. 5eCtlor: 17. Nctlces. All notlces, state~e,ts, demands, requests, consents, approvals, authorizatlons, offers, agreeme~ts, appointments or deslgnatlons hereu~de~ by elther party to the other shall be in writln~ and shall be deemed glven and served upon the other party 3 bUSlness days fol:c~:~; dep~sit in t~e U~lte~ States re;i5~erea mall, retur~ rece:?t re~uestec, postage p~e?ald a~c addressed as follows: Clty - Ci~y Manager and Clty A~tor~ey 1685 Main Street Sa"ta Monlca, Ca11fornla 90401 Tenant - Ted R. Lennon, Executlve Vice Presldent TeleKle~ Prod~ctions, I~c. 100 Wllshlre Boulevard Santa Monlca, Callfornla 90401 or at su~h other address as either party shall later deslgnate for such purpose by written notice to the other party. Sectlo~ 18. Waiver. The waiver by the City of a~y breach by Tenant of any term, covenant or conaitlon hereo: sha~l not operate as a waiver of any subsequent breach of the same or any other term, covenant or condition hereof. Sectlon 19. Default by Tenant. If (a) Tenant shall fall to pay any rental payable hereunder within 15 days frorr. the date such rental is payable, or (b) Tenant shall fail to observe or perform any such other terms, covenants or concltlons contalned hereln for a period of 30 days after written notice thereof from the City to the Tenant, or (el Tenant shall abandon or vacate the Property or (d) Tenant's interest in this Sublease or any part 16 e e hereof sholl be assigneo or transferred with0ut the written consent of the CIty, when requlred herein, eIther vo~u~~arlly or by operatIon of law, or (e) Tena~t shall fIle any petItion or institute any proceedIngs whereIn or wherebY Tenant aSKS or see~s or prays to be adJudIcated a ban~rupt, or to be discharged from any or all of its debts or obligatlo~s, or offers to the Tenant's creditors to e~fect a CO~?~SltlO~ O~ ex~ens:on of tirr~ to pay the Tenal~'s d~~~sl or as~s, see~s or prays f0r a reorganIzation or to effect a pl~n or reorganIzation, or for a readJustment of the Tena-t's debts, or far any other sImilar relIef, then and In any of such events, the Tenant sha:: be deerr-ed to be In cefa~l~ hereunder. If the Tenant sho~lc, after notIce of such cefaJlt, f311 to remedy any defa~lt or co~~ence the correctIon thereof WIth all reasonable dIspatch, In not exceeding 30 days, then the City shall have the right, at Its optIon, WIthout any further demand or notice to ter~lnate thIS Su~lease, and to re-enter the property and eJect all partIes in posseSSIon of said property therefrom. Upon such termination or otherwise, the CIty 5~5:1 have anc be e~tltled to exerClse a:l rernecles per~ltted by applIcable law and, to the exte~t permItted by law, the City's remedies are to be cumulative. WIthout llmltatlon, the CIty shall be entltled to receive from Tenait a~c Tenant agrees to pay all costs which the Clty may reasonably incur in consequence of or because of default by Tenant under thIS SUblease, Includlng reasonaole attorneys' fees and costs of SUIt to enforce the terms a~d conoitions of this Sublease. 17 e e Section 20. ~1tS of Others to Cure Defau}t by Tenant. (a) By Te:1a:1t's Mortga:;ee. (1) The City shall, upon serv1ng Te~a~t w1th any notIce of default under thiS Sublease, simultaneously serve a copy of said notice upon any mortgagee or securec lender of Tenant (as referred to l~ S9~t~O- 11 0: t~lS S~tlease~ re~~esti~g sale ~O~l~e ~i W=l:l~C. S3:j ro::=e s~a~l be gl~ej to Lender lr ~~e sa~e manner as prOVIded 11". SectIon 17 here1nab~ve. SaId mor tc:agee or secured lender shall there"pon have 15 addit10nal days to cure any such default or co~~ence the correction thereof In accordance With the terms of thIS S~~lease, and the City shall accept such performa,ce by or at t~e 1~5tiga~lon of sald mortgagee or secured lender as 1f the sa~e had been done by Tenant. (iil Anything herein contained no~withstandlng, whIle suc~ mortgagee or secured lender (as referred to in Section 11 of this Suble3se) rema1ns u~satlsf1ed of record, lf a, event or events of default shall occur, WhICh under any provIsion of this SUDlease shall entitle Ci~Y to terminate thlS Sublease, and if before the expiratlon of 15 days from the date of serVlce of said notice, suer. mortgagee or secured lender shall have pald to the City all rental and add1tional rental and o~her pay~ent5 herein provlced for and the~ in default, and shall have complied or shall have engaged in the wor~ of complying With all of the other requirements of this Sublease wlthin the time limIts prescribed hereIn, if any are the~ i~ default, then i~ sucb eve~t the City shall not be entitled to termlnate thlS SUblease and any notice of 18 e e te:rr;natlOn theretofore given shall be VOla and of no effect. (I i 1 ) If the City shall elect to te:~lna~e t~lS S~~lease by reason of any defa~lt of Tenant, such mortgagee or secured lender shall not only have and be subrogated to any and all rights of Tena~t w~th respect to curin~ Such de:a~lt, but shall also have the rig~t to psstp~~e an~ exte~~ :~e Sp€c:flec aa~E fc~ t~e te~~~~2:1C~ 0: t~ls Sucleas~ as flxej bv t~e Clt~' In Its notice 0: termInation, for a period of not more than 6 months, prOVIded such mortgagee or se~~red lender shall ~ure or cause to be cured any then existing money defaults ana meanwhile pay the rent, addItional rent and comply '..1- Wl ,-_I a~d p€rf~:l a:l 0: t~? othe: te:7s, CO~dltio~s a~c prOVISions of t~lS Sublease or. the Tenan~'s part to be complied with and performed, and If no further cefa~lts shall occ~r hereunder during such extended perioc, and mortgagee or secured lender shall forthwith ta~e steps to acq~lre the Tenant's interest hereln, the time of said mortgagee or secured lender to comply with the provlslons 0: t~is Section shall be extended for such period as shall be necessa~y to complete such steps with due diligence and contl~ulty, provided that duri~g any such extensions no further default by the Tenant or mortgagee or sec~=ed lender shall be permitted to continue hereunder. (lV) City agrees withln 30 days after the request in writing by Tenant or such mortgagee or secured lender, to furnish the party requesting same with a wrltten statement duly acknowledged of the fact that this Su~lease is in full force and effect and that there are no defaults hereunder by Tenant, if such is the fact. If any defaults then exist, City agrees that In such statement lt 19 e e WIll specify the p~~tl~ular default or defaults wnlC!. Clty claIms to exist. (v) City ag:ees t~at In the eve~t of termInatIon of thIS S~blease by reaso~ of any default by Tenant other than for non-payment of rent or additIonal rent and other payments herein provided for, that the CIty WIll ac~now:ecge tbe holder of a!"oO " mort;a;e 0: tr'Jst deec permlttec unce: Se=~lO~ 1: of t~lS S~~~ea5E 0: l~S n~~~iee [tne mortga;ee 0: trustee) as t~e s~bstlt~te teDa~t w~t~ all of the rights and obligatlons of Tenant hereunder for the remai~de: of the t~rrn, effective as of the date of such termInatIo~, at the rent and additional rent and upon the terms, provisIons, covenants and agreements as hereIn c~~~al~e= a~d s~=~ect o~ly to the 5a~e concl~io~s of t:tle as thIS Sublease is SUbJect on the date of the execution hereof, and to the rights, if any, of any parties then in posseSSIon of any part of the Par~ing FacilIties, provIded: (aal Bald mortgagee shall make wr itten request upon CIty for such substltutlon wlthin thirty (3D) days after the date of such terminatlo~ and such written reques':. lS accoIrpanied by payrrtent to the City of sums then d~e to the Clty under this Su~lease. (bb) SaId mortgagee shall pay to the City at such time of substItution any and all sums which would at the time of such substit'Jtion be due under this Sublease b~t foe such termlnatIon and in addition thereto any expenses lncludlng legal and attorneys' fees to which the City shall have been subjected by reason of such default. (ee) Said mortgagee or Its nomlnee shall perform and observe all covenants hereln contalned On the Tenant's part to be performed and shall further remedy any 20 e e Ol~~1 :ondllions wh]c~ the pIlor Tenant was obligated to perform under the terms of this Sublease. (dc) Tena~t ~jde~ suc~ s~bstitutl0j s~a:: have the same rig~t, title and interest in anc tc t~e bU1ldlngs anc improvements on the leased premIses as the Tenant had uncer th1S Su~lease. (v~} As usee 1n t~lS Section, all refere~ce to a nro~:t;age" sjall be deemed to l~clude a Deed of Trus~, and all re~e!ence to the 1'~older11 of a wo!tgagee or to a "mortgagee~ shall be deemed to include t~e beneficlary and/or trustee under a Deed of Trust. SectIon 21. Net Lease. Th1S Sublease shall be dee~ed and co~strued to be a "net lease" and Tenant hereby acrees that tbe BaS1C Re~ta: a~a Addltio~al Ren~ provldec f~r herein shall be an absolute net return to the City free and clear of any expenses, charges or setoffs w~atsoever except as provided in Section 4(bJ hereof in respect of Additional Rent and subject to Section 10 hereof. Sectlon 22. Nondlscrimlnation. Tenant covenants by and fa: itself, administrators a~d assigns, and all persons clairnlng under or throug~ it, and this S~olease is made and accepted upon and s~bject to the following conditior.s: That there shall be no dlscrimination against or segregation of any person or group of persons, on account of sex, race, color, creed, rellgion, marital status, natlonal origin, or ancestry, in the leasing, su~leasing, transferr1ng, use, occupancy, tenure, or enJoyment of the premises herein leased nor shall Tenant itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or 21 " e e segregatIon WIth reference to the selection, lOC&~IO~J number, use or occupancy, of tenants, lessees, sublessees, su~te~a~ts, or vendees i~ the prewIses herei~ lease~. Sectio~ 23. Inde~nIfIcatior.. The City and the Authority shall not be liable at any time for any loss, damage, or InJury to the property or person of any persQ~ whomsoever at any time occasIoned by or arISIng o~t of a~y a~~ 0: o~:ss:o~ 0: Te~a~~, or 0: a~yo~e holGl~= U~~~= t~e Tenant or tte occu?a~cy or use of the Propert; or a~y par~ thereof by or under the Tenant, or directly or IndIrectly from a,y state or condItIon of the Master ParkIng FaCIlitIes or any part thereof during the term of thlS SJ~lease except for the IntentIonal acts or o~lssions of t~e CIty or the Authority, Notwithstancl~g anythI~g to the contrary under thIS Sublease, and IrrespectIve of any insurance carrIed by the Tenant for the benefIt of the City and the AuthorIty, the Tenant agrees to protect, defend, indemnIfy and hold the City and the Authority anc the Master Parking FacilitIes harmless from any and all damages or lla~llities of whatsoever nature ariSIng under the terms of t~lS SUblease or ariSIng out of or in connection with the operation carrIed on by Tenant on, or the use anc occupancy by or throug~ Tenant of, the Master parkIng FaCIlities. Section 24. ExecutIO~. This Sublease may be simUltaneously executed in any number of counterparts, each of WhIC~ when so executed shall be deemed to be an original, but all together shall constitute but one and the same Sublease, and it is also understood and agreed that separate counterparts of this Sublease may be separately executed by the City and the Tenant, all WIth 22 e e th~ same full force and effect as though the same counterpart had bee~ executea simultaneously by both the c:tv 3~C t~e Te~a~t. Section 25. Yalidlty. If anyone or more of the terms, provisions, promlses, covenants, conditions or option proviSions of thiS SUblease shall to any exte~t b~ adjudged invalid, unenforceable, void or voidaole for any reas~~ w~a~soe~~~ b:" a C8Jr~ o~ co=?e~e~~ jJrls~:=t~o~1 each a~~ all or the re~a:~~~s te~~s, provislc~S, pro~ise=, covenants, condltions, and optlon provisions of thiS Suolease s~all not be affecteo thereby and shall be valid ana enforceable to the fullest extent permitted by law. If Ear any reaso~ t11S Sutlease shall be held by a C8U:t of co~?ete'~ ju~iS=~ctlon, VOle, VOlda~le, or ~nenforceabl~ by the City or by Tenant, or if for any reason it is held by such court that the covenants and ccncltlons of the Tenant hereunder, including the covenant to pay rent hereunder, is unenforceable for the full ter~ hereunder, then and ln such event for ana in co~slderation of the right of the Tenant to possess, occ~py and use the par~ing Facilities, which right in such event is hereby granted, thiS Sublease sha~l thereupon become, and shall be deemed to be, a lease from year to year under WhiCh the annual rentals herein specified Will be paid by the Tenant. Section 26. Bindins Effect. This Sublease, and the ter~f. provislons, promlses, covenants, conditions and option provisions hereof, shall be binding upon and shall inure to the benefit of the parties hereto and their respective helrs, legal representatives, successors and assigns. Section 27. Tax Reduction. The City confirms and agrees with Tenant that Tenant is and shall be 23 e e entltled to an annual reauctlon in fees, taxes ano assessme~ts paya~le to the parking distrlct purs~ant to ResolutlOr. 3357 CCS Section 5 of the Santa Monica Municlpal Code by applying the total sauare footage of the Public Spaces. Section 28. No Thlrd Part~ Beneflclarles. ThlS S~slease sna:: be for the be;efl~ 0: onlj t~e naTe= partles hereto and to cnelr per~lt~ea successors and asslgns and shall not, except as expressly otherWlse provlded herein, create a~y rights in or duties on the part of any tnlrd party. IN WIT~~SS wnEREOF, the parties hereto have caused thlS Su~lease to be executed and attested by their proper offlcers thereunto auly aJthOrlze5, and their oEflclal seals to be hereto afflxed, as of the day and year first above written. CITY OF SANTA MONICA By City Manager C1CY ClerK TELEKLEW PRODUCTIONS, INC. By EXHIBITS A, Description of Premises B. Master Lease C. 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'.';::' ''\, A ~ - tz~C::/l" ~ V,t ,<:" ~ ;;:)~t ~ "-/.>: 1, '>... ~ lc /) ,~ "-fN, >- I -.....c..- ~ /n.;// I " ~l'<> : A/j f ~~ '~ ">>i{',, ii A~' ,,'c ~~ \ U', ~,~" ~ AYI"~ ~~ ;/ ~ 01'i ~V ~j '.'~~ '~ ,~~ "~/ ~ j~;.; ..\. ~ ~ , . - ..- I s: ..c "J'" , .~\:: -- /;j- / /~:/ t...: :> ~ k ~> \- <-- " IC':- ,"-..;: .......;. /-"". c.r ~ ~ ~ ...'\,. ~! I I ''\, : 0;:: ':"\../-l ~ ~ .::" . L;.. " ) :: ,f) ~ '~,'C. : > 'y' ",' c:..: '~') C ~,. ~ /-y,>: ! / ,i~, ("; ! l- e V' l- lr es;- , / . >;,/ kcS'c' ~;:;. '''~ ?~, I "~r lr,\, i y-' L --r"'" ~I~.:--"'''.. ~~) '~-"~ ~';ViV.", {s./j/ / /,-c > ~~2 ::<:: l- 0;:: D.. i ''-..~ / \: f-,!'"....-.....:- /f'"\.... ...' ~- -::::-'..... ~..~ - -.::: - L~ <2~/~~.-( !,'=""" /~;~~/ Kl' :&-....... /~'t)/"'/ r"'''-...... "'v" ,. r.....".~-/ -"'r" , /\:~' "'y ~ /,..,~...lC . " v... ,.~.:>; /:~',/ t1$~ ,:};J::y ~;~('r" ~ X J /~ ~>/ r/~. .' ' s- '~~N.1;:->:o . __ ..... I..."J 0:'/ ~~L.. '~f(/ [t'rx-:-; "-.... '--;-u~':~> I ,~..:J -..........:::: . ~ w.; c... ...J L.LJ > 1= '" Ll.l if " 0__ r:--~~ ;'~ -....'- ',-'- ' , ,,-'" , " ~ :. ~or . ;-~ /r-'\:)-/ e/ /~~ [;:~/ I Y/ /''''/ '\."/ /.'C' "~// 7,cc ):~- o v . ~'\u ... --;.:":-/ ::<:: ....- c:; c.... c:; UJ C- o ...J UJ > UJ ~ I EXHIBIT "C" DEvELOPER PREMISE~ ,--~ ~~Z~\'~i 'x//'.-t:' '. /0"") X/"-..(-- a.. ',/", [ ':~~' ~:,- : ''i-_' ~ ~ - ~ .~..~ ? / ~~,'- "'...: -: '\. ~ ,*}~:'~ "," 0jt'S;:', , <r / " ~ "":: c'-' '(c' ~S'6'-, ~ ,f')" i<e ""2,," - ~c't{~. '<'< "," . , c-,>, "\".. ~ ... ~ ~~~~c" '- "'~ '>~> '~~ ,,~~ ~!IL"~_. <"'-........ ~~ ; - '-.......... (~: , / 1:-, \ I /~c.c.~j.~ V' ~/// /i i'" ..... \11. '\.. / Y. ,,-' <--'of '. V , /.~.:;... , ,,\-;/' ,..... ,r- .../1 *~<t.. E ~'~(l /...; , /~. '- ' '< /,) -,,";;/ - ,~,' / C>'/. I' / \:: .:;- >>" " 'y; / _ 'co/' ~ I /.. C>~Vi "/ ~' ~ j/ /.~,.r S;-: ~ 1-~/)'3:. ~/; 'r x.. \:): ~' , - /. <C'. , 'Y' ~ ,', ~ 'y:' I /, Ie, .... /, ~ /-"'/ ...,'" ~- C/..:;:' /0. ), 0: ~/j ',,"':;- ~VS f . )-; /-~ / ~/....""'\,. ~ ~ > '" /'" <'~I ~ V ' -' k) >' V", ':::~/V ~~ /~.~* ~~'Y~ ~~S';l ".::;,;/ /[ 'C! ~ ~t I '- g '" C l-~ '- -0 +.J g - "i:: J ....('2- Y , /~ - I ~c:-~f :- ~...... ! ,,{~/1 ;~~ /~I: ,,- /" ) -K,-~ r- '.~ , lE-~ ! ~ 28~' "" ..:: "- :> "'.....".>>"--_JO.r-"'to. e ~~ /1,: ~ ~~>) ~~~ j h; -(,!:-, ,'/' " \ '-:>;. J .;. .... c.. ._ ...... /~..." ~,' <( -c." /; / =-//; '--../s-'. -.: v i i~" .....c; J '" ''''''or.' 5/ C /<,..l,).. ".-:'"~, /v/.,,~, "~/I <1-/ _ "".. I , /t:,~: -::' ,<~, ~;; E (,:c J ~{~" ....A;. ':~~ ,,~~~~ J'j/ ~ ;\>~j ~ f~~ jJ ,~~ ~ 05i~~ '~1 - r~" -('-1 .. ri / ~ ~IJ ;/1 :;~t~* ~~1 ~ =: 1'<9'., ~'" /~ :: / E )( 1 </ ~-,,'C 'i C- .. ~'/v1 ,> j :?' .~, /.$~~ '- E 'C> '" , < -' , /,) " c' '" < ,,-~ ,,</ '(, /-; i ~ r( >-- '0-' ,. .. / '", r~~ ; ~~< ':y ~; (5'~r <~~ j- LL -r- ~ -.;/ ~/ (> ' ~,~. ) :' ~ ~~ r--~ "i I: :0 c E c. .. I ! .:,)r k5~ . ! : ~ ~ ~~\>./ r j, ~ I~ <:: ,,/\> 0.. .'C' v. / /Io~ u / .....J / .~'C/ g; /~ c.. '\. /~/j '" ". J ',,), ~ C- ", /':". " c~, '-(' -:"" '" ,...l "" ;> ~ ...., ~- e 1[2: ~~~~ y~< <C' ~-~~>- ~ % '<--"- '\.->'>-'. {;'" ~ /l -. "/ '\.' '!'fr-' i ~~)~~' '~J}~. ;'c~. ,[; ~ ! / c:: ~.Y, L C', ~~~/""-'\-"f'f ~c I'{~' ~~;% ;~~" Z~1 '. ~ "\,"c', c '\.C'... C't? C "c' r', "".f' ;,;;... <'c' .~C". ~l~A t~ ~, ~~~ I ~~ ~~'i '/ " ^./ /'::)/1 /fJ 5/1 );;~ ~ ~p ~~1 Z--1 "'". ~ 2&1 [ '280 202 204 EXH I B IT "nil PUBLIC SPACE~ j ( I ... ' c c' t::C.i cc &J :> ~ ,..l - ]1 ,0 .. "" :::> ~ f. -~.~ ~:~ ~':i '-~""', ~<..... ._ . ~ - . . '. ~,' -,:"~~ -.;.~.-...' '- It:.~ ,,"'f~. fll! ~~"'~:"';"~~ll-,*~'?' ..'. .~~;;,~,'3l. ""':'.,y...--;.~_"",---=J.._,..~~ J -- r l e e flf)/f}tJb~-t2 3 MASTER LEASE AGREEMENT THIS LEASE AGREEMENT ~s made as of 1979, by and between the PARKING AUTHORITY OF THE CITY OF SANTA MONICA (the "Author~ ty"), a public body corporate and pol~t1C organlzed and eXIstIng under the laws of the state of Callforn1a, and the CITY OF SANTA MONICA (the "C1ty"), a rnunIc1pal corporat1on duly organIzed and eX1sting under its Charter and the laws of the State of Callforn1a. RECITALS 1. The AuthorIty 1S a publ1C corporation created under and eXerc~slng its powers pursuant to the ParkIng Law of 1949, Part 2 of D1V1SIon 18, cornrnenc1ng at SectIon 32500, of the Streets and Highways Code of the state of Cal1forn1a, and under sa1d Law has the power to sell, lease, exchange, transfer, ass1gn or otherwIse dlspose of any real property or any Interest thereIn; and 2. The AuthorIty presently owns certaIn parkIng faCIlIties on land descrIbed In ExhIbIt A hereto (referred to hereIn as the "SIte") and proposes to lease to the CIty a portIon of the aIrspace above the SIte, together WIth access and support easements through the Site, as more particularly descr~bed In ExhIbIt B hereto (referred to herein collectively as the "Leased Premises"). e e 3. The Author~ty has found and determ1ned that the lease of the Leased Prem1ses to the C1ty ~s for a publ~c use and purpose, 1n that the Leased Prem~ses will be used to supply add1tional pub11c park~ng fac~lit~es to the extent there 1S a demand therefor. 4, Under sa~d Park1ng Law of 1949 and Sect~on 32957 thereof in particular, the Authority has the power to lease the Leased Prem~ses to the City w~thout necess~ty of ~nv~t~ng b1ds. AGREEMENT Sect~on 1. Lease. The C1ty leases from the Author1ty and the Author1ty dem1ses and leases unto the C1ty, the Leased Prem~ses. Sect~on 2. Term, Rent. (a) Term. The term of this Lease Agreement shall commence on the date first above written and shall terminate on the later of (~) forty (40) years after commencement of the term, or (ii) upon the term~nat~on of that certain "Agreement for Sublease of Airspace and Construction, Operat~on and Ma~ntenance of Park1ng Fac~11ties" (referred to herein as the "Sublease") between the City and Teleklew Product~ons, Inc. dated as of , 1979; provided, that th1s Lease Agreement may be earlier terminated pursuant to Sec- tions 8 or 13 hereof. 2. r e e (b) Rent. The C~ty agrees to pay to the Authority as rent the aggregate sum of $1.00, rece~pt of wh~ch ~s hereby acknowledged by the Authorlty. (c) Tltle at End of Lease Term. Upon term~natlon of thlS Lease Agreement, t~tle to the Leased Prem~ses shall revest ln the Authorlty. Sectlon 3. Encurrbrances. The Clty shall keep the Leased Premlses free and clear of all llens and encumbrances, except those caused or consented to by the Authorlty. The Authorlty covenants that lt shall hold fee title to the Leased Premlses, subJect to such condltlons, reservations, exceptlons and rights of way to record as do not substantially lnterfere wlth the use of the Leased Premlses by the Clty. Sectlon 4. Non-Dlscrimlnatlon. The Clty herein convenants by and for ltself, ~ts successors, and assigns, and all persons clalmlng under or through it, and th1s Lease Agreement 1S made and accepted upon and subject to the followlng condltlons: That there shall be no dlscrimlnat10n agalnst or segregatlon of any person or group of persons, on account of sex, race, color, creed, rellgion, sex, mar1tal status, national orlg1n, or ancestry, in the leaslng, subleaslng, transferrlng, use, occupancy, tenure, or enJoyment of the Leased Premises nor shall the city itself, or any person 3. [ e e cla1ming under or through It, establish or permlt any such pract1ce or pract1ces of d1scrimlnat1on or segregatlon w1th reference to the select1on, locat1on, number, use, or occu- pancy, of tenants, lessees, sublessees, subtenants, or vendees 1n the Leased Prem15es. Sect10n 5, Addltlons and Improvements, The Clty (and any sublessee or permittee of city under Section 7 hereof) shall have the r1ght dur1ng the terms of this Lease Agreement, at lts own expense, to make or perm1t to be made any add1t1ons or 1mprovements to the Leased Prem1ses, to attach flxtures, structures or SlgnS thereto, and to place any personal property on or 1n the Leased Prem1ses. Tltle to all such personal property or to fixtures WhlCh may be removed wlthout damage to the Slte shall remain in the Clty or 1n such other person as may be legally entitled thereto. Sect10n 6. Insurance. The Author1ty shall be named as an add1tlonal lnsured party under any pollcles of lnsurance as may be required by the Sublease. Sectlon 7. Asslgnment and Sublease. Ne1ther th1S Lease Agreement nor any interest of the C1ty hereln shall, at any tlme after the date hereof, wlthout the prlor wrltten consent of the Authorlty, be mortgaged, pledged, asslgned or transferred by the City by voluntary act or otherwlse, except as speclflcally provided herein. The Clty shall at all times remain liable for the performance of the covenants 4. ( e e and cond~t~ons on ~ts part to be performed, notw~thstand~ng any ass~gn~ng, transferr~ng or sublett~ng wh~ch may be made. The c~ty shall have the rlght to sublease or permlt the use by others of all or any part of the Leased Prem~ses but nothlng here~n conta~ned shall be construed to rel~eve the C~ty from ~ts obl~gat~ons as prov~ded 1n thls Lease Agreement. Sect10n 8, Em~nent Doma~n. If the whole of the Leased Prem1ses, or so much thereof as to render the re- ma1nder thereof unusable for the purposes of th1S Lease Agreement, shall be taken under the power of eminent doma1n or sold to any governmental agency threaten1ng to exerc~se the power of em~nent doma~n, th~s Lease Agreement shall terminate. If less than the whole of the Leased Premises shall be so taken or sold and the rema1nder is usuable for the purposes of th~s Lease Agreement, this Lease Agreement shall cont1nue 1n full force and effect as to such rema1nder and the parties wa~ve the benef~t of any law to the contrary. Sect~on 9, R1ght of Entry. The Authority and its des~gnated representat1ves shall have the r~ght to enter upon the Leased Premises during reasonable bus~ness hours (and in emergencies at all times) (1) to inspect the same, (11) for any purpose connected wlth the Authority's r~ghts or obl1gat1ons under thls Lease Agreement and (111) for any other lawful purpose. Section 10. QU1et Enjoyment. The part1es hereto mutually covenant and agree that the C1ty, by keep1ng and 5. e e performlng the covenants and agreements hereln contained, shall at all tlmes durlng the term, peaceably and qllletly have, hold and enJoy the Leased Premises, wlthout SUlt, trouble or hlndrance from the Authorlty. Sectlon 11. Law Governlng. ThlS Lease Agreement shall be governed excluslvely by the provlslons hereof and by the laws of the state of Callfornla, subJect to any walvers, excluslons and provlslons herein contalned. Sectlon 12. Walver. The walver by the Authorlty of any breach by the Clty of any term, covenant or condltlon hereof shall not operate as a walver of any subsequent breach of the same or any other term, covenant or condltlon hereof. Sectlon 13. Default by the city. If (a) the City shall fail to observe or perform any other terms, covenants or condltlons contalned hereln for a perlod of 35 days after wrltten notlce thereof from the Authorlty to the Clty, or (b) the Clty shall abandon or vacate the Leased Premlses, or (c) the Clty's interest In this Lease Agreement or any part thereof shall be assigned or transferred without the written consent of the Authority, either VOluntarily or by operatlon of law, except as permltted hereunder, or (d) the Clty shall flle any petltlon or institute any proceedings wherein the Clty seeks to be adJudlcated a bankrupt, or to be discharged from any or all of its debts or obllgatlons, or offers to 6. I e e the Clty'S credltors to effect a compositlon or extenslon of time to pay the c~ty's debts, or seeks a reorganlzation or a readJustment of the C1ty's debts, or for any other Slmllar rellef, then and ln any of such events, the Clty shall be deemed to be 1n default hereunder. If the C1ty shall, after not1ce of such default, fall to remedy or commence the correction thereof w1th all reasonable d1spatch, 1n not exceed1ng 30 days, then the Authority shall have the r1ght, at 1ts option, W1thout any further demand or notlce (1) to termlnate thlS Lease Agreement and to re-enter the Leased Premlses and eJect all part1es 1n posseSS1on thereof or (11) to re-enter the Leased Prem1ses and eJect all part1es therefrom and, W1thout terminatlng thlS Lease Agreement, re-Iet the Leased Premises, or any part thereof, as the agent and for the account of the City upon such terms and condltions as the Authority may deem advisable, 1n WhlCh event the rents recelved on such re- lett1ng shall be appl1ed flrst to the expenses of re-lett1ng and collectlon, 1nclud1ng any necessary renovation and alterat10n of the Leased Premlses, reasonable attorneys' fees, and any real estate cornm1ssions actually pald, and lf a sufflc1ent sum shall not be thus realized to pay such sums and other charges the City shall promptly pay to the Authorlty any cumulatlve net dlflciency eXlstlng. The foregolng remedies of Authorlty are 1n addltion to and not exclusive of any other remedy of the Authorlty. 7. e e Sectlon 14. Executlon. This Lease Agreement may be slmultaneously executed In any number of counterparts, each of WhlCh when so executed shall be deemed to be an orlg1nal, but all together shall constltute but one and the same Lease Agreement, and 1t 1S also understood and agreed that separate counterparts of thlS Lease Agreement may be separately executed by the Authorlty and the Clty, all wlth the same full force and effect as though the same counterpart had been executed slmultaneously by both the Author1ty and the city. Sectlon 15. Notices. All notlces, statements, demands, requests, consents, approvals, authorlzatlons, offers, agreements, appolntments or des1gnat1ons hereunder by e1ther party to the other shall be 1n wrlt1ng and shall be suff1Clently glven and served upon the other party, lf sent by Unlted states reglstered mall, return rece1pt re- quested, postage prepald and addressed as follows; C1ty - city Hall Santa Monlca, Callforn1a 90401 Attentlon; Clty Manager Author1ty - Authorlty Off1ce city Hall Santa Monlca, Callfornia 90401 Attentlon: Executlve Dlrector Sect10n 16. Validity. If anyone or more of the terms, provisions, promlses, or covenants or condltions of this Lease Agreement Shall to any extent be adJudged invalld, unenforceable, void or voidable for any reason whatsoever by 8. e e a court of competent Jur~sd~ct~on, each and all of the rema~n~ng terms, prOV1Slons, promises, covenants and con- d~tlons of thls Lease Agreement shall not be affected thereby and shall be valid and enforceable to the fullest extent perm~tted by law. If for any reason th~s Lease Agreement shall be held by a court of competent jurisdlction vOld, vo~dable or unenforceable by the Author~ty or by City, or lf for any reason ~t ~s held by such a court that the covenants and condltlons of the City hereunder are unenforceable for the full term hereunder, then and ln such event for and ln conslderatlon of the r~ght of the Clty to possess, occupy and use the Leased Prem~ses, wh~ch rlght in such event is hereby granted, and ln conSlderation of the City providlng add~tional publ~c parklng facillties to the extent there 1S a demand therefor, thls Lease Agreement shall thereupon become, and shall be deemed to be, a lease from year to year, IN WITNESS WHEREOF, the partles hereto have caused thlS Lease Agreement to be executed and attested by thelr proper officers thereunto duly authorized, and their officlal 9. e e seals to be hereto aff~xedF as of the day and year f~rst above wrltten, PARKING AUTHORITY OF THE CITY OF SANTA MONICA By Chalrman Attest: secretary (SEAL) CITY OF SANTA MONICA By Clty Manager Attest: C~ty Clerk (SEAL) 10. " r- :Ii:! !:~, ~ .c-~i!; i October 31, 1979 ~ ~o = -=; -t- ....... ... ~ :Xo ~... :>: ':::'" {~ W C>'" m:t Ul ",.... ~ -'"' (IlX XJl" Co :J: -n", - ",- -~ --J ~;p. c..o racquetball and health cl~b for r'len onci 'fJo'!Jen Dear Counc11 ~embers, I am wr1t1ng thlS letter to descr1be our preV10US proposal 1n greater detall, As I mentloaed 111 my letter of October g, 1979, The SlJort& Connect1on would llke to lease 17,729 square feet of land d1rectly south of our eXlst1ng health club ln the Santa Monlca Buslness Park located at 2929 31st Street. The Clty owned land lS adJacent to our own and lt would be a tremendous addltlon to our club and the aqulsition of the land would be easlly accompl1shed as your land directly abuts to our club and we could use the south wall of our bUlldlng to facllltate encloslng the entlre pool area. We have sent all members of the councll complete drawlngs and speClflcatlons of the proJect slte for your scrutlny. These plans have also been presented to Mr. John Jalllll and Mr, John Herner of the Envlronmental Services Department and were drafted wlth their express recommendations and ideas. After dlseussing the proJect ln great detall wlth Mr. Herner, I belleve thelr department lS ln favor of thlS land lease, Should the Clty Counell agree to grant our proposal, I belleve we could work effeetlvely wlth Environmental Services to produce an acceptable lease and a quallty development WhlCh would maintaln the integrlty of the Santa Monlca Buslness Park. We would be able to lease the 17,729 square feet of ground for an annual rental of $35,458 per year WInch would be based on a ground value of $20.00 per square foot. We would llke a 10 year lease wlth three (3) f1ve year options, We could also pay 1ncreases ln the rent adJusted every flve years w1th maX1mum 1ncreases per year not to exceed 6%. Th1S lease would be ldentlcal to the lease tve have at the Santa Mon1ca Bus1ness Park except the land valuatlon on thelr lease was on only $8,00 per square foot in 1978, I am looklng forward to meet1ng w1th you on November 13 and we w111 be brlnglng all the necessary lnformatlon for your study or qUeStlonlng. Slncerely, ~llke Talla Presldent /~I) ~m- ~--C-<- NOV 1 :3 197a 3350 ocean park boulevard, sUite 210, santa monica, california 90405 . (213) 450.5074