The URL can be used to link to this page

151 of 1986 - Lease, Sublease, & Special Reserve Agreements with Housing Authority of SLC R 86-1 C 85=564 Resolution No. 151 1986 RESOLUTION APPROVING THE FORM OF AND EXECUTION OF A LEASE AGREEMENT, A SUBLEASE AGREEMENT AND A SPECIAL RESERVE AGREEMENT IN CONNECTION WITH THE HOUSING AUTHORITY OF SALT LAKE CITY ADJUSTABLE/FIXED RATE HOUSING BONDS ,' 1985 SERIES A; AND AUTHORIZING THE MAYOR AND OTHER OFFICERS TO DO ALL OTHER THINGS DEEMED NECESSARY OR ADVISABLE WHEREAS , the Housing Authority of Salt Lake City (the "Authority" ) pursuant to Title 55, Chapter 18, of the Utah Code (hereinafter defined as the "Act") has issued its bonds to finance the acquisition and construction of low-rent housing and related facilities for elderly persons of medium and low income (the "Project") ; and WHEREAS, in order to assist in such financing, the City will lease the Project from the Housing Development Corporation of Salt Lake City (the "Corporation") , pursuant to the Lease Agreement, dated as of January 20, 1987 (the "Lease Agreement") (a copy of which has been presented to the City Council) , and sublease the Project to the Authority, pursuant to the Sublease Agreement, dated as of January 20, 1987, (the "Sublease Agreement") (a copy of which has been presented to the City Council) ; and WHEREAS, in order to assure the availability of funds for the operation, maintenance and repair of the Project and the repay- ment of amounts paid by the City pursuant to the Lease Agreement, the City will enter into a Special Reserve Agreement, dated as of January 15 , 1987 (the "Reserve Agreement" ) by and among the 2 Authority, the Corporation, Moore Trust Company, as escrow bank, and the City; and WHEREAS, the Authority is intending to sublease the Project from the City; and WHEREAS, the Project is intended to provide low and moder- ate income housing for elderly persons not being provided by the pri- vate sector; and WHEREAS, the Project shall provide up to approximately 330 units, at a total cost of approximately fourteen million nine hundred thousand dollars, of which it is intended that at least 66 units shall be rented to elderly persons of low and moderate income; and WHEREAS, if the cost of the Project exceeds fifteen million dollars, the Project is subject to review by the Mayor and the City Council of the Salt Lake City Corporation. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF SALT LAKE CITY AS FOLLOWS: SECTION 1. The form of the Lease Agreement, as submitted to this meeting and made a part of this resolution as though set forth in full herein, attached hereto as Exhibit A, be and the same is hereby approved. The Mayor is authorized to execute the Lease Agreement on behalf of the City and the City Recorder is authorized to cause the seal of the City to be affixed to the Lease Agreement and to attest to the same. The Lease Agreement may be modified, prior to its execution and delivery, by the Mayor with the advice of 3 the City Attorney, provided that such modification is consistent with the terms thereof. The Mayor's approval of such modifications shall be conclusively established by his execution of the Lease Agreement. SECTION 2. The form of the Sublease Agreement, as submit- ted to this meeting and made a part of this resolution as though set forth in full herein, attached hereto as Exhibit B, be and the same is hereby approved. The Mayor is authorized to execute the Sublease Agreement on behalf of the City and the City Recorder is authorized to cause the seal of the City to be affixed to the Sublease Agreement and to attest to the same. The Sublease Agreement may be modified, prior to its execution and delivery, by the Mayor with the advice of the City Attorney, provided that such modification is consistent with the terms thereof. The Mayor's approval of such modifications shall be conclusively established by his execution of the Sublease Agreement. SECTION 3. The form of the Reserve Agreement, as submit- ted to this meeting and made a part of this resolution as though set forth in full herein, attached hereto as Exhibit C, be and the same is hereby approved. The Mayor is authorized to execute the Reserve Agreement on behalf of the City and the City Recorder is authorized to cause the seal of the City to be affixed to the Reserve Agreement and to attest to the same. The Reserve Agreement may be modified, prior to its execution and delivery, by the Mayor with the advice of 4 the City Attorney, provided that such modification is consistent with the terms thereof. The Mayor's approval of such modifications shall be conclusively established by his execution of the Reserve Agreement. SECTION 4. The Mayor is hereby authorized and directed to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this resolution. The Mayor, City Attorney, City Finance Director, City Treasurer, any Secretary, any Assistant Secretary and the City Recorder are hereby authorized and directed to execute such other documents and certificates in order to consummate any of the transac- tions contemplated by this Resolution and the agreements approved herein. SECTION 5. This resolution shall become effective immediately. ' J 5 Passed by the City Council of Salt Lake City this day of December, 1986. Salt Lake City Council By: Ch i person Attest: MC *tf4R(Trder WS A�y�D i i /' ♦ l?� EXHIBIT A J HOUSING DEVELOPMENT CORPORATION OF SALT LAKE CITY and /!PPF', `"'-D SALT LAKE CITY CORPORATION DEC 9 1995 CITY RECORDER LEASE AGREEMENT Dated as of January 20, 1987 In C412T U, T r � X�k RRURN TO CITY RECORDER i 324 South State, 5th Floor Salt Lake City, Utah 84111 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . 2 ARTICLE 2 PROJECT AND TERM OF LEASE . . . . . . . . 3 ARTICLE 3 RENT . . . . . . . . . . . . . . . . . . 3 ARTICLE 4 NATURE OF OBLIGATIONS OF THE CITY . . . . 4 ARTICLE 5 CONSTRUCTION OF BUILDINGS . . . . . . . . 6 ARTICLE 6 CORPORATION'S RIGHT TO PERFORM CITY'S COVENANTS . . . . . . . . . . . . 6 ARTICLE 7 ASSIGNMENT, SUBLETTING AND SALE OF THE PROJECT . . . . . . . . . . . . . . . 6 ARTICLE 8 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES . . . . . . . . . . 7 ARTICLE 9 OPTION TO PURCHASE THE CORPORATION'S INTEREST IN PROJECT . . . . . . . . . . . 9 ARTICLE 10 SPECIAL COVENANTS AND INDEMNIFICATION . . . . . . . . . . . . . 10 ARTICLE 11 NOTICES . . . . . . . . . . . . . . . . . 13 ARTICLE 12 CERTIFICATES BY CORPORATION AND CITY . . 14 ARTICLE 13 SURRENDER AT END OF LEASE . . . . . . . . 14 ARTICLE 14 QUIET ENJOYMENT . . . . . . . . . . . . . 15 ARTICLE 15 INVALIDITY OF CERTAIN PROVISIONS . . . . 15 ARTICLE 16 INSURANCE . . . . . . . . . . . . . . . 15 ARTICLE 17 MISCELLANEOUS . . . . . . . . . . . . . . 17 CITY RECORDEK 7 s c 1 0",P'y' , -i- RETURN TO 90NAWNWAKS 324 South State, 5th Floor Salt Lake City, Utah 84111 TABLE OF CONTENTS, Continued Page Exhibit "A-1" through "A-9" - Description of Land . . . . . . . . i Exhibit "B" - Title Matters . . . . . . . . . . . . . i C TY I itrr C 4"—" RETURN TO Namueftt", CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 -ii- AIJJJHQVED DEC 9 1986 CITY RECORDER AGREEMENT OF LEASE made as of the 20th day of January, 1987 , between the SALT LAKE CITY CORPORATION (the "City") , and THE HOUSING DEVELOPMENT CORPORATION OF SALT LAKE CITY, a Utah not-for- profit Corporation (the "Corporation") . W I T N E S S E T H WHEREAS, the City intends to lease certain low rent hous- ing and related facilities for elderly persons of low and moderate income financed through the issuance of tax exempt bonds by the Housing Authority of Salt Lake City (the "Project" ) from the Corporation, and to sublease the Project to the Housing Authority of Salt Lake City (the "Authority") ; and WHEREAS, the City intends to lease the Project from the Corporation pursuant to this Lease and proposes to sublease the Project to the Authority pursuant to the terms and conditions set forth in the Sublease; and WHEREAS, the parties hereto intend that the Project shall provide low and moderate income housing for elderly persons not being provided by the private sector; and WHEREAS, the Project shall provide up to approximately 330 units at a total cost of approximately fourteen million nine hundred thousand dollars, of which it is intended that at least 66 units shall be rented to elderly persons of low and moderate income; and WHEREAS, if the cost of the Project shall exceed fifteen million dollars, the Project is subject to review by the Mayor and the City Council of Salt Lake City Corporation; and WHEREAS, to aid in the financing of the Project so that a maximum number of units will be available to elderly persons of low income, the City and the Authority shall actively pursue a HODAG grant or other subsidy. It is hereby mutually covenanted and agreed by and between the parties hereto that this Lease is made upon the agreements, terms, covenants and conditions hereinafter set forth. CITY RECORDEK S ETON �U �I MNW944441*2 111 da D CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 r ARTICLE 1 DEFINITIONS Section 1.01. Definitions. Unless the context clearly requires otherwise and except as defined herein, all terms used herein shall have the meanings set forth in the Trust Indenture dated as of December 1 , 1985, entered into between the Issuer and the Trustee. The terms defined in this Article 1 shall, for all purposes of this Lease and all agreements supplemental hereto, have the mean- ings herein specified. "Authority" shall mean the Housing Authority of Salt Lake City, a body corporate and politic of the State of Utah, and its per- mitted successors and assigns. "City" shall mean Salt Lake City Corporation. "Commencement Date" shall mean the date of commencement of the Term as set forth in Article 2 of this Lease. "Corporation" shall mean The Housing Development Corporation of Salt Lake City, a not-for-profit corporation incorpo- rated under and pursuant to Utah law and its permitted successors and assigns. "Event of Default" shall have the meaning provided in Section 8 . 02 hereof. "Expiration Date" shall have the meaning provided in Article 2 hereof. "Initial Term" shall mean the period from the Commencement Date to and including June 30, 1587 . "Mayor" shall mean the mayor of Salt Lake City Corporation. "Net Revenues" shall mean all revenues received by the Authority in connection with the Project, including but not limited to any monies received by the Authority under any sub-sublease, less the operating and maintenance expenses incurred in connection with the Project. "Renewal Term" shall mean any one year term succeeding the Initial Term, such term being subject to the City's option to termi- nate the Term of this Lease pursuant to Section 2 . 01 hereof. Each renewal term shall be one year in duration. CITY RECON"DEN"S -2- RETURN TO %W=AUftG9 324 Sauth State, 5th Floor Salt lake City, Utah 84111 "Sublease" shall mean the sublease agreement, dated as of January 20, 1987 , between the City and the Authority, as amended or supplemented from time to time. ARTICLE 2 PROJECT AND TERM OF LEASE Section 2.01. The Corporation does hereby demise and lease to the City, and the City does hereby hire and take from the Corporation, the Project. TO HAVE AND TO HOLD unto the City, its successors and assigns, for a Term which shall commence on the date hereof ("Commencement Date") and shall expire on June 30, 1987 , provided that the term hereof shall be extended automatically for successive periods of one (1) year each (a "Renewal Term") from July 1 of each year through June 30, of each succeeding year until June 30, 2031, unless this Lease shall be terminated pursuant to its terms; pro- vided, further, that the City may elect not to extend or further extend the term of this Lease. The City may elect not to extend or further extend the term of this Lease by giving written notice to the Corporation not less than sixty (60) nor more than ninety (90) days prior to the expiration of the initial term, or of the then-current extended term, as the case may be. During each Renewal Term, the City shall be subject to the same terms and conditions as herein specified for the Initial Term. The phrase "Term of this Lease" as used herein shall mean the Initial Term and any Renewal Terms. ARTICLE 3 RENT Section 3.01. Subject to the provisions of Sections 4 .02 and 4 . 03 of this Lease, the City shall pay to the Corporation during the Term of this Lease, as rent for the Project, on or before the twenty-eighth day of each month, or if such twenty-eighth day is not a Business Day, on the immediately preceding Business Day, an amount equal to the Net Revenues received by the City from the Authority pursuant to the Sublease. Section 3.02. Subject to the provisions of Sections 4.02 and 4 . 03 of this Lease, the City shall pay to the Corporation during the Term, as additional rent for the Project, such sum or sums, if any, as shall be necessary to maintain the Debt Service Reserve Fund at an amount equal to the Debt Service Reserve Fund Requirement. Subject to the provisions of Sections 4 . 02 and 4 . 03 of this Lease, All CITY RECU#%rR%DPR1^ Ukvi §' m� LU 'u -3- RETURN TO 324 South State, 5th Floor Salt Lake City, Utah 84111 such payment will be made by the City to the Corporation within twelve (12) months from the date the City initially receives notice of a shortfall in the Debt Service Reserve Fund pursuant to Article 11 hereof. Section 3.03. Each installment of rent payable hereunder shall be paid by check, draft or wire transfer in monies which at the time of payment constitute legal tender for private and public debts in the United States of America. Section 3.04. Until all of the Bonds shall have been paid in full, there is expressly reserved to the City the right, and the City is authorized and permitted, at any time it may choose, to pay rent in addition to the rent otherwise payable under Sections 3 .01 and 3 . 02. The City has the right to require that all sums paid by it pursuant to this Section 3 . 04 be applied to the purchase or redemp- tion of Bonds. Such additional rental payments shall then be so deposited to the Bond Fund and applied to the redemption or purchase of Bonds in the manner and to the extent permitted under the Trust Indenture. ARTICLE 4 NATURE OF OBLIGATIONS OF THE CITY Section 4.01. Except as hereinafter provided in this Article, the obligation of the City to pay rent shall be absolute and unconditional , and such shall be payable without any rights of set-off, recoupment or counterclaim the City might have against the Corporation or any assignee thereof or any other person, whether or not the Project is completed or used or occupied by or through the City or available for use or occupancy by or through the City, whether or not this Lease or the Sublease shall have been terminated and whether or not the Corporation shall be in default of its obliga- tions hereunder or thereunder. The City shall not be precluded from bringing any action it may otherwise have against the Corporation. Section 4.02. Notwithstanding anything in this Lease to the contrary, the obligation of the City to pay rent or to pay or expend any other sum of money hereunder shall be subject to and dependent upon annually budgeted appropriations being lawfully made by the City for such specific purpose. The City's liability hereun- der with respect thereto shall be limited to such appropriation. Upon a written request from the Corporation to the Mayor, the City shall place on the City Council of Salt Lake City Corporation ' s agenda, for discussion purposes, in its budget review process, an item with respect to an appropriation for the payment of rents due and owing pursuant t of Section 3 . 01 and Section 3 . 02 hereof; � LL U w -4- RETURN TO - CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 provided, however, that nothing herein shall be construed as implying or creating an obligation to make any appropriation or include such item in any approved budget. The rental payments due and owing pur- suant to Section 3 . 01 hereof are limited solely to the Net Revenues paid by the Authority pursuant to the Sublease. Any rental payments due and owing pursuant to Section 3.02 hereof are limited as to pay- ment from current revenues received by the City in the fiscal year of the City immediately succeeding the Initial Term or any Renewal Term. Nothing herein shall be construed as requiring the City to approve any requested budget item or to appropriate any money to pay any rental hereunder. If the City fails to pay any portion of the rentals due hereunder, the City will immediately quit and vacate the Project, and the rental and other obligations of the City hereunder shall thereupon cease. It is understood between the parties that neither the State of Utah nor any political subdivision thereof, except the City as provided herein, is obligated to pay any rental due to the Corporation hereunder. Should the City fail to pay any portion of the required rentals pursuant to Sections 3 . 01 or 3 . 02 hereof and then neglect to quit and vacate the Project, after legal notice to do so, the Corporation may immediately bring legal action to evict the City from the Project (but not for money damages includ- ing assessment of costs or attorneys ' fees) . No judgment may be entered against the City, the State of Utah, or any political subdi- vision of the State of Utah for failure to pay any rentals hereunder. Section 4.03. The obligation of the City to pay rent hereunder or to pay or expend any other sum of money hereunder shall not constitute a debt of the City within the meaning of any Constitutional or statutory provision and shall be deemed executory only to the extent of monies made available to the City and no liability on account thereof shall be incurred by the City beyond the monies received, budgeted, appropriated and available for the purpose thereof. Section 4.04. During the period the Bonds are outstand- ing, the City will not terminate this Lease, during the Term of this Lease, for any cause, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute an evic- tion or constructive eviction, failure of consideration, failure of title, or frustration of purpose, or any damage to or destruction of the Project, or the taking by eminent domain of title to, or any interest in, or the right of temporary use of all or any part of the Project, or the sale or other disposition of all or any part of the Project, or the failure of the Corporation to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with this Lease. ' PY C 01�ITY RECU0`FK`PU" ERS CU" } -5- RETURNTO CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 The delegation by the City to any other subtenant of any of its obligations or the performance of its covenants hereunder shall not be deemed or construed as a release of the City from its obliga- tions under this Lease. ARTICLE 5 CONSTRUCTION OF BUILDINGS Section 5.01. The Corporation shall diligently undertake and complete the studies, site acquisition, planning, design, con- struction, renovation, and development of the Project in accordance with the terms and conditions set forth in this Lease. The City does not have any obligation to complete the studies, planning, design, construction, acquisition or development of the Project. Section 5.02. The City shall not be liable in any manner for payment or otherwise to any contractor, subcontractor, laborer or supplier of materials in connection with the purchase of any materi- als to be incorporated into the Project. ARTICLE 6 CORPORATION'S RIGHT TO PERFORM CITY'S COVENANTS Section 6.01. If the City at any time shall be in default in the performance of its obligations under this Lease, then the Corporation, without waiving or releasing the City from any obliga- tion of the City, may (but shall be under no obligation to) perform such obligation on the City' s behalf. ARTICLE 7 ASSIGNMENT, SUBLETTING AND SALE OF THE PROTECT Section 7.01. This Lease may be assigned and the Project may be subleased as a whole or in part, subject, however, to the fol- lowing conditions: (a) no assignment or sublease shall relieve the City from the primary liability for its obligation to pay the rent required hereunder, and in the event of any such assignment or sublease, the City shall remain primarily liable for the payment of such rent, but solely as provided in Sections 3 . 01, 3 . 02 , 4 . 02 and 4 . 03 of this Lease; OVA COPY -6- CITY RECUR' E RETURN TOZ9VffHMP=K_- CITY RECORDER 324 South State, 5th Floor SAIS LAD pity, Wah 841.11 (b) the assignee or sublessee shall assume the obligations of the City hereunder to the extent of the interest assigned or sub- leased; (c) no such assignment or sublease , other than the Sublease, shall become effective without the prior written consent of the Trustee, the Corporation, the Credit Facility Issuer, if any, and the Liquidity Facility Issuer, if any, which consent shall be accom- panied by an opinion of counsel which shall be an attorney or firm of attorneys of favorable reputation in the field of law relating to municipal bonds to the effect that such assignment or sublease (i) will not adversely affect the exemption of interest on the Bonds from Federal income taxation, and (ii) will not impair or result in any diminution of the obligations of the City under this Lease; and (d) the City shall , within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the Corporation and the Trustee a true and complete copy of each such assignment or sublease. Section 7.02. The Corporation may, subject to the provi- sions of the Trust Indenture, sell or otherwise dispose of all or any part of the Project subject to this Lease, provided, however, that the Corporation shall obtain the prior written consent of the City, which consent shall not be unreasonably withheld. ARTICLE 8 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES Section 8.01. An "Event of Non-Appropriation" shall occur hereunder if, as a result of a failure by the City to appropriate monies and pay said monies to the Corporation pursuant to Sections 3. 01 or 3.02 hereof, the City fails to make said payments as required to be paid hereunder. Section 8.02. Either of the following events shall be an "Event of Default" hereunder: (a) if for any reason other than a failure by the City to appropriate monies pursuant to this Lease, the City shall fail to pay when due the rent required to be paid hereunder; (b) if, for any reason other than a failure by the City to appropriate monies pursuant to Sections 3.01 or 3.02 hereof, the City shall fail to perform any covenant or agreement on its part required to be performed (other than the covenant to pay rent pursuant to c .� ' -7- 5,q 1 m r,lTY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 • Sections 3 . 01 and 3 . 02 hereof) and such failure shall have continued for thirty (30) days after notice of such failure has been given by the Corporation to the City. Section 8.03. If an Event of Non-Appropriation described s in Section 8 . 01 hereof hall occur, the Corporation, subject to the provisions of the Trust Indenture, upon thirty (30) days notice to the City and the Mayor, may terminate this Lease without any liabil- ity to the City. Section 8.04. If an Event of Default described in Section 8 . 02 hereof shall occur, the Corporation, subject to the pro- visions of the Trust Indenture, may take any action at law or in equity to enforce performance and observance of any obligation, agreement or covenant of the City under this Lease. Section 8.05. The rent payable by the City hereunder and each and every installment thereof, shall be and is hereby declared to constitute a valid lien upon the interest of the City in this Lease and in the Project. To secure the performance of its obliga- tions under this Lease, the City hereby pledges all right, title and interest of the City in the Sublease, including any amendments and supplements thereto, including, but not limited to, the right to make claim for, collect, and receive any of the sums, amounts or revenues payable under the Sublease (except for the payments provided for in Article 9 of the Sublease) , to bring actions thereunder or proceed- ings for the enforcement thereof, or to do any and all things which the City is or may be entitled to due under the Sublease. Section 8.06. Notwithstanding any termination of this Lease in accordance with the provisions hereof, unless the Corporation shall have conveyed the Corporation' s interest in the Project to another Person, or shall have entered into a firm bilat- eral agreement providing for the leasing of the Project for a period of at least one year, the Corporation may, subject to the applicable provisions of the Trust Indenture, upon payment by the City of all rent in respect of which any Event of Non-Appropriation or Event of Default shall have occurred, waive such Event of Non-Appropriation or Event of Default. Upon such payment and waiver, this Lease shall be fully reinstated as if it had never been terminated, and the City shall be restored to the use , occupancy and possession of the Project. Section 8.07. (a) The remedies conferred upon or reserved to the Corporation under Sections 8 . 03 and 8.04 hereof shall be the sole and exclusive remedies available to the Corporation. (b) No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or YA M. ` s I To CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 ' shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient in order to entitle the Corporation to exercise any remedy reserved to it in this Article 8 . ARTICLE 9 OPTION TO PURCHASE THE CORPORATION'S INTEREST IN PROJECT Section 9.01. (a) When all rents due or to become due hereunder shall have been paid to the Corporation in accordance with the terms hereof and the Trustee certifies to the Corporation and the City that all Bonds shall have been paid or provision has been made for such payment in accordance with the provisions of the Trust Indenture, the City shall have the option to purchase for ten dollars ($10 . 00) the Corporation's interest in the Project on a date of set- tlement (not more than sixty (60) days after such payment or provi- sion for payment and written notice to the Mayor) and at a place to be mutually agreed upon by the Corporation and the City; upon which event the Corporation shall transfer, convey, sublease, assign and set over to the City all of the Corporation's right, title and inter- est in and to the Project by a good and sufficient quit-claim deed and such other legal instruments as may be required therefore. The City shall bear all costs and expenses in connection with the prepa- ration of the documents of conveyance and the delivery thereof and, to the extent required by law, all fees, assessments and taxes pay- able in connection with the conveyance of title to such interest to the Corporation' s interest in the Project. Upon conveyance of title to such interest and payment therefor as aforesaid, this Lease shall cease and terminate and all obligations of the City under this Lease shall be terminated and extinguished. (b) In order to exercise the option to purchase the Corporation ' s interest in the Project pursuant to Section 9 . 01 hereof, the City shall give written notice to the Corporation at least five (5) but no more than sixty (60) days prior to the date of the exercise of such option. � { 33 � RET RIN TWMM*tfi@G,-- CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 -9- ARTICLE 10 SPECIAL COVENANTS AND INDEMNIFICATION Section 10.01. The City makes no representations whatso- ever in connection with the condition or suitability. of the Project or the adequacy of funds to acquire or construct the Project. The City shall not be liable for any defects therein. The Corporation shall cause to be furnished to the City upon the City's prior written request therefor , all plans and specifications held by the Corporation relating to the Project. Section 10.02. The Corporation and the City covenant that they shall not enter into a long term management or operating con- tract with any entity or person which is not an exempt person, as defined in Section 103 (b) of the Internal Revenue Code of 1954, as amended, or with an exempt person with respect to an unrelated trade or business, as defined in Section 513 (a) of the Internal Revenue Code of 1954 , as amended, without the prior written consent of the Corporation. Section 10.0,3. The Corporation and the City covenant that they shall take no action, nor shall they approve the Trustee ' s taking any action or making any investment or use of the proceeds of Bonds , which would cause the Bonds or any series of Bonds to be "arbitrage bonds" within the meaning of Section 103 (c) of the Internal Revenue Code of 1954, as amended, and any proposed or final regulations thereunder as are applicable to the Bonds at the time of such action, investment or use. Section 10.04. The Corporation and the City shall at all times do and perform all acts and things necessary or desirable and within its power in order to assure that interest paid on the Bonds shall , for the purposes of Federal income taxation, be excludable from the gross income of the recipients thereof and exempt from such taxation. Section 10.05. The Corporation hereby agrees that the City Council of Salt Lake City shall have the final approval of the site plan and design of the Project. Section 10.06. The Corporation hereby covenants that it shall permit the Salt Lake City Department of Finance or its agents to audit the Corporation's books and records at any time upon reason- able notice. The Corporation shall submit its annual budget to the City Council of Salt Lake City Corporation for review prior to its adoption. Al3 R r `� _10- 9^9 a i ri a!3J F.'t 7- , i e r—t --r— CITY RECORDER 324 South State, 5th Floor Salt lake City, Utah 84111 Section 10.07. The Corporation releases the City from, and agrees that the City shall not be liable for, and agrees to indemnify and hold the City free and harmless from, any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatsoever pertaining to the Project or the financing thereof, except in any case as a result of willful misconduct of the City. None of the officers or employees of the City are acting in other than a representative capacity and, therefor, no personal liability shall attach to them hereunder. The parties intend that no general obligation or liabilities or charge against the general credit or taxing power of the City shall occur by reason of making this agreement, issuance of the Bonds, performing or failing to perform any act requested of it by the Corporation or by reason of the representations of the City contained in this agree- ment, or any other agreement or documents relating to the issuance and sale of the Bonds. Nevertheless, if the City or any of its offi- cers, officials, employees, agents or attorneys shall incur any pecu- niary liabilities or whatsoever, then in such event the Corporation shall indemnify and hold the City harmless by reason thereof, except for willful misconduct of the City. This Lease and the Sublease are being executed solely on behalf of the City. None of the officers or employees of the City. are acting in other than a representative capacity and therefore, no personal liability attaches to them. In case any action shall be brought against the City in respect of which indemnity may be sought against the Corporation, the City shall promptly notify the Corporation, in writing, of such action and the Corporation shall promptly assume the defense thereof, including the employment of counsel, and the payment of all expenses, provided that the Corporation shall have the exclusive right to nego- tiate and consent to settlement and provided, further, that the City shall cooperate with the Corporation in asserting such defense. Should the Corporation refuse or fail to provide counsel for the City ' s defense and the City thereafter obtains counsel , the Corporation shall pay for such counsel fees. The City shall have the right to employ separate counsel in any such action and to partici- pate in the defense thereof, but the fees and expenses of such coun- sel shall be at the expense of the City unless the employment of such counsel has been specifically authorized by the Corporation. The Corporation shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the Corporation or if there be a final judgment for the plaintiff in any such action with or without consent, the Corporation agrees to indem- nify and hold harmless the City and its agents and employees from and against any loss or liability by reason of such settlement or judgment. Section 10.08. The Corporation will indemnify and hold the City free and harmless from any loss , claim, damage, tax, CITI v1 RECORDER'S aafttl=e a In A -11- RETURN TO JW4 lfflr RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 i penalty, liability, disbursement, litigation expenses, attorneys ' fees and expenses or court costs arising out of, or in any way relat- ing to, the execution or performance of this agreement, any mortgage, the issuance or sale of' the Bonds, actions taken or forborne under the Indenture or with respect to the acceptance or administration of the trust thereunder or any cause whatsoever pertaining to the Project except in any case, as to the liability of the City as to its willful misconduct. Section 10.09. Without limiting the foregoing, the Corporation further agrees to pay, and to indemnify the City and its agents and employees against, any and all liabilities, losses, dam- ages, claims or actions of any nature whatsoever (including all rea- sonable attorneys ' fees and expenses of the Corporation and the City) , incurred by the Corporation arising from or in connection with the performance or observance by it of the terms and conditions of this agreement or the Indenture, including, without limitation, (a) any injury to or the death of any person or any damage to prop- erty on the project or upon adjoining sidewalks, streets or ways, or in any manner growing out of or connected with the use, non use, con- dition or occupation of the Project or any part thereof or resulting from the condition thereof or of adjoining sidewalks, streets or ways, (b) any other act or event occurring upon or affecting, any part of the Project, (c) violation by the Corporation of any con- tract, agreement or restriction affecting the Project or the use thereof of which the Corporation has notice and which shall have existed at the date hereof or shall have been approved by the Corporation or of any law, ordinance or regulation affecting the Project or any part thereof or the ownership, occupancy or use there- of, (d) liabilities, losses, damages, claims or actions arising out of the offer and sale of the bonds or a subsequent sale or distribu- tion of any of the Bonds, (e) liabilities, losses, damages, claims or actions arising out of the interest on the Bonds being includible in the regular income of the holders thereof for purposes of federal income taxation, or (f) any warranty, representation or certificate made by the City arising from the issuance or sale of the Bonds. The Corporation hereby further agrees that the City shall not incur any liability to the Corporation, and shall be indemnified against all liability, in exercising or refraining from, asserting, maintaining or exercising any right, approval or power given to the City under the Indenture, except in any case as a result of willful misconduct of the City. The covenant of indemnity by the Corporation contained in this paragraph shall extend to the City, officers, employees, attorneys and agents of the City and shall survive the termination of this Agreement. Section 10.10. The Corporation hereby covenants to obtain performance and payment bonds for the Project for the full value of each contract. CITY RECORDEK S r -12-V � 1,1 RETURN' TO j ft • i 324 South State, 5th Floor Salt Lake City, Utah 84111 Section 10. 11. The Corporation covenants that in the event the City elects not to renew this Lease Agreement pursuant to Section 2 . 01 or this Lease Agreement is terminated, the Corporation will lease the Project to the Authority upon substantially the same terms and conditions contained in the Sublease. ARTICLE 11 NOTICES Section 11.01. Whenever it is provided herein that notice, demand, request, consent, approval, or other communication shall or may be given to or served upon either of the parties by the other, or whenever either of the parties shall desire to give or serve upon the other any notice, demand, request, consent, approval, or other communication with respect hereto or to the Project, each such notice, demand, request, consent, approval, or other communica- tion shall be in writing and, any law or statute to the contrary not- withstanding, shall be effective for any purpose if given or served as follows: (a) If by the Corporation, by mailing the same to the City and the Mayor by certified mail, postage prepaid, return receipt requested, addressed to the City at Room 300 City & County Building, 451 South State Street , Salt Lake City, Utah 84111, Attention: Mayor, or to such other address as the City may from time to time designate by notice given to the Corporation by certified mail as aforesaid. (b) If by the City, by mailing the same to the Corporation by certified mail , postage prepaid , return receipt requested, addressed to the Corporation at 1800 South West Temple, Suite 302, Salt Lake City, Utah 84115 or to such other address(es) and attorneys as the Corporation may from time to time designate by notice given to the City by certified mail as aforesaid. Section 11.02. Every notice, demand, request, consent, approval , or other communication hereunder shall be deemed to have been given or served three days after the time that the same shall have been deposited in the United States mails, postage prepaid, in the manner aforesaid. Section 11.03. During the period of any postal strike or other interference with the mails, personal service (with receipt acknowledged in writing) shall be substituted for certified mail . Section 11.04. The Corporation covenants to immediately give the City notice by telephone, promptly confirmed in writing, if CITI vi RECORDER'S -13- RETU TO T R 324 South State, 5th Floor Salt Lake City, Utah 8411 t it has notice or knowledge of any deficiency in the Debt Service Reserve Fund held under the Trust Indenture. ARTICLE 12 CERTIFICATES BY CORPORATION AND CITY Section 12.01. The City agrees at any time and from time to time upon not less than thirty (30) days ' prior notice by the Corporation to execute, acknowledge and deliver to, or cause the Trustee to execute, acknowledge and deliver to the Corporation or any other party specified by the Corporation, a statement in writing cer- tifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same, as modified, is in full force and effect and stating the modifications) and the date to which the rent payable by the City hereunder has been paid, and stating whether or not to the best knowledge of the signer of such certificate, the Corporation is in default in performance of any cov- enant, agreement or conditions contained in this Lease, and, if so, specifying in detail each such default of which the signer may have knowledge. Section 12.02. The Corporation agrees at any time and from time to time upon not less than thirty (30) days' prior notice by the City to execute, acknowledge and deliver to the City a state- ment in writing certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same, as modified , is in full force and effect and stating the modifications) and the date to which the rent payable by the City hereunder has been paid, and stating whether or not the City is in default in the payment of such rent, and, if so, specifying the amount thereof. Any failure by the Corporation to provide any such certification shall not alter the Corporation' s rights to receive rent under this Lease. ARTICLE 13 SURRENDER AT END OF LEASE Section 13.01. Subject to Article 2 and Article 9 hereof, on the last day of the Term or upon any earlier termination of this Lease, or upon a re-entry by the Corporation upon the Project pursu- ant to Article 8 hereof, the City shall well and truly surrender and deliver up to the Corporation and the Corporation shall accept the Project in then "as is" condition. b4 C1% �CITY REC0`DNR' RETURN CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 ARTICLE 14 QUIET ENJOYMENT Section 14.01. The Corporation covenants that, if and as long as the City shall faithfully perform the agreements, terms, cov- enants and conditions hereof, the City shall and may peaceably and quietly have, hold and enjoy the Project for the term hereby granted without molestation or disturbance by or from the Corporation or any person claiming through the Corporation and free of any encumbrance created or suffered by the Corporation and those as to which this Lease is subject and subordinate. ARTICLE 15 INVALIDITY OF CERTAIN PROVISIONS Section 15.01. Except as set forth in the following sen- tence, if any term or provision of this Lease or the application thereof to any person or circumstances shall , to any extent, be invalid or unenforceable, the remainder of this Lease, or the appli- cation of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. This Section does not apply, however, if the application of Sections 4 . 02 and 4 . 03 to any person or circumstances shall, to any extent, be invalid or unforceable. If Sections 4 . 02 and 4 . 03 are found to be invalid or unenforceable, the remainder of this Lease shall no longer be valid or enforceable. ARTICLE 16 INSURANCE Section 16.01. The Corporation agrees to insure the Project or cause it to be insured with insurance companies licensed to do business in the State of Utah in such amounts and in such manner and against such loss, damage and liability, including liabil- ity to third parties, as is customary with entities in the same or similar business. To the extent premiums for such insurance are not paid by a contractor for the construction or acquisition of any part of the Project , then the Corporation agrees to pay the premiums thereon. The Corporation further agrees that it will at all times carry public liability insurance with insurance companies licensed to do business in the State of Utah with respect to the Project in minimum amounts of $1 , 000 , 000 for death or bodily injury in CITY RLUU4 UU1 -15- RETORN TO ' CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 connection with each occurrence and $1,000,000 for property damage in connection with each occurrence. The Corporation further agrees to obtain and at all times carry full extended coverage fire, flood, earthquake and hazard insurance for the Project for an amount not less than that reasonably required by the City and with a deductible of not more than $50, 000. Such insurance shall be provided by repu- table insurance companies licensed to do business in the State of Utah . In the event of loss or damage to the Project, the Net Proceeds of any insurance provided hereunder shall be applied as set forth in Section 406 of the Indenture; in the event of a public liability occurrence, the Net Proceeds of any insurance provided hereunder shall be applied toward extinguishment or satisfaction of such liability. At all times during the term of this Lease Agreement the Corporation shall comply with the laws of the State relating to workmen' s compensation with respect to the Project. In addition, the Corporation shall obtain and carry builder's risk insurance coverage at all times during the construction of the Project. The Corporation will deliver to the Trustee, with a copy to the City, the insurance certificates evidencing proof of coverages as indicated above upon commencement of each Renewal Term. Each insurance policy required to be maintained pursuant to this Section shall contain a provision that such policy shall not be cancelled unless the Trustee is notified at least 30 days prior to such cancellation. At least 15 days prior to the expiration of any such policy, the Corporation shall furnish evidence satisfactory to the Trustee that such policy has been renewed or replaced or is no longer required by this Lease Agreement. At all times during the Term of this Lease Agreement, the Corporation shall comply with the Loan Agreement, dated December 1, 1985 , between the Corporation and the Authority. Section 16.02. With respect to the liability insurance required pursuant to Section 16.01 hereof, the City shall be named as an additional insured party. Di.R S COI Y C,ITY w RETURN TO0 -IN ni r%1% CITY RECORDER - 324 South State, 5th Floor Salt Lake City, Utah 84111 -16- ARTICLE 17 MISCELLANEOUS Section 17.01. The captions of this Lease are for conve- nience of reference only and in no way define, limit or describe the scope of intent of this Lease or in any way affect this Lease. Section 17.02. The Table of Contents is for the purpose of convenience of reference only and is not to be deemed or construed in any way as part of this Lease or as supplemental thereto or amen- datory thereof. Section 17.03. The use herein of the words "successors and assigns" or "successors or assigns" of the Corporation or the City shall be deemed to include the legal representatives and assigns of the Corporation or the City. Section 17.04. The City ( i ) acknowledges that the Corporation will pledge all of its right, title and interest in this Lease to the Authority, pursuant to the terms and provisions of the Loan Agreement, dated December 1, 1985 between the Corporation and the Authority, and (ii) consents to such pledge. Section 17.05. Except with the consent of the City or as otherwise expressly provided in this Lease, there shall be no merger of this Lease or the subleasehold estate created hereby with the fee estate in the Project or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Lease or the subleasehold estate created hereby or any interest in this Lease or in such subleasehold estate as well as the fee estate in the Project. Section 17.06. Each of the parties represents to the other that it has not dealt with any broker in connection with this lease transaction. Section 17.07. This Lease cannot be changed, modified or terminated orally, but only by a written instrument of change, modi- fication or termination executed by the party against whom enforce- ment of any change, modification, or termination is sought. Section 17.08. This Lease shall be governed by and con- strued in accordance with the laws of the State of Utah. Section 17.09. The agreements, terms, covenants and con- ditions herein shall be binding upon, and shall inure to the benefit of , Corporation and City and their respective successors and assigns. CITIvi RECOR, P,.)F,.R, , 'S COPY _17- RETURN TOW' lu CITY RECORDER 324 South State, Sth Floor Salt Lake City, Utah 84111 Section 17. 10. All references in this Lease to "Articles" or "Sections" shall refer to the designated Article(s) or Section(s) , as the case may be, of this Lease. Section 17. 11. The Corporation and the City, upon the written request of the other party, shall join in the execution of a memorandum of lease in proper form for recordation. Section 17.12. This Lease shall not become effective until the Sublease is duly and validly executed and delivered by the City and the Authority. Section 17.13. It is understood and agreed that nothing contained in this Lease shall be construed as a waiver on the part of the parties, or any of them, of any right not explicitly waived in this Lease. In the event any agreement contained in this Lease shall be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. `E S COPY C11 I KEuUR'V* RETURN TO 11r. ARMEn -61 CITY RECORDER 324 South State, 5th Plot Salt Lake City, Utah 84111 -18- r IN WITNESS WHEREOF, the Corporation and the City have exe- cuted this Lease as of the date and year first above written. HOUSING DEVELOPMENT CORPORATION OF SALT LAKE CITY By: SALT LAKE CITY CORPORATION By: MAYOR ATTEST D: APPROVED C T R C DER DEC 9 1986 By: CITY RECORDER APPROVED AS TO FORM: By: City Attorney PpP�OpPapM�Nt G�O„� a• '+$yA�'� �5.'�'FJ/}Aar A (�,. td'47Q CITY RECONUEW1 S CU y RETURN TU Tvv CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 STATE OF UTAH ) ss. . COUNTY OF ) On the day of January, 1987, before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides at that he is the of the Housing Development Corporation of Salt Lake City, the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order of the board of trustees of said corporation. STATE OF UTAH ) ss. . COUNTY OF SALT LACE !CITY ,�arV 1 AQ-On theDECi 9 a"19 aay6 of � �_07, before me personally came PALMER DeFAULIS , to me known, who, being by me duly sworn, did depose and say that he resides at SALT LACE CITY , that he is the Mayor of the Salt Lake City Corporation, the body politic described in and which executed the foregoing instrument; that he had authority to sign the same and he acknowl- edged to me that he executed the same as the act and deed of the People of the City of Salt Lake for the uses and purposes therein mentioned. vA �. OF v'Vr� ,' UTY Fi�'YTA RETURN J U i p ER ° 324 South State Salt take Crt , 5th Floor Y° Utah 84111 —20— EXHIBIT B A P R 0 :D DEC 9 1986 CITY RECORDER SALT LAKE CITY CORPORATION and THE HOUSING AUTHORITY OF SALT LAKE CITY SUBLEASE AGREEMENT Dated as of January 20, 1987 sot AI tt � RETURN CITY RECORDER 324 South State, 5th Floor 9 4 8 9 5 . 2 . 2 9 0 2 . 0 G : 7 Salt Lake City, Utah 64111 \ V \ TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . 2 ARTICLE 2 PROJECT AND TERM OF SUBLEASE . . . . . . 3 ARTICLE 3 NET REVENUES . . . . . . . . . . . . . . 3 ARTICLE 4 NATURE OF OBLIGATIONS OF AUTHORITY . . . 4 ARTICLE 5 CITY'S RIGHT TO PERFORM SUBTENANT'S COVENANTS . . . . . . . . . . . . . . . . 5 ARTICLE 6 ASSIGNMENT, SUBLETTING AND SALE OF THE PROJECT . . . . . . . . . . . . . . . 5 ARTICLE 7 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES . . . . . . . . . . 6 ARTICLE 8 OPTION TO PURCHASE CITY'S INTEREST IN PROJECT . . . . . . . . . . . . . . . 7 ARTICLE 9 SPECIAL COVENANTS . . . . . . . . . . . . 8 ARTICLE 10 NOTICES . . . . . . . . . . . . . . . . . 10 ARTICLE 11 CERTIFICATES BY CITY AND AUTHORITY . . . 11 ARTICLE 12 SURRENDER AT END OF SUBLEASE . . . . . . 12 ARTICLE 13 QUIET ENJOYMENT . . . . . . . . . . . . . 12 ARTICLE 14 INVALIDITY OF CERTAIN PROVISIONS . 12 ARTICLE 15 INSURANCE . . . . . . . . . . . . . . . . 12 ARTICLE 16 MISCELLANEOUS . . . . . . . . . . . . . . 14 Exhibit "A-1" ME, � CITY RECORDER -1 324 South State, 5th Floor Salt Lake City, L4ah 84,11 TABLE OF CONTENTS, Continued Page through "A-9" - Description of Land . . . . . . . . . . i Exhibit "B" - Title Matters . . . . . . . . . . . . . i , e UNw s 617y RECORDER Satt ' lt South State, 5th Fbm Lake City, Utah 801 -ii- APPROVIED DEC 9 1986 r a3`('r CITY RECC RDER AGREEMENT OF SUBLEASE made as of the 20th day of January, 1987 , (the "Sublease") between the HOUSING AUTHORITY OF SALT LAKE CITY (the "Authority") , a body corporate and politic of the State of Utah, having an office at 1800 South West Temple, Salt Lake City, Utah, and SALT LAKE CITY CORPORATION (the 11City11) . W I T N E S S E T H : WHEREAS, the City intends to lease certain low rent housing and related facilities for elderly persons of low and moderate income financed through the issuance of tax-exempt bonds by the Housing Authority of Salt Lake City (the "Project" ) from the Housing Development Corporation of Salt Lake City (the "Corporation") , and to sublease the Project to the Authority pursuant to this Sublease; and WHEREAS , the City intends to lease the Project from the Corporation pursuant to the Lease and proposes to sublease the Project to the Authority pursuant to the terms and conditions set forth in this Sublease; and WHEREAS, the parties hereto intend that the Project shall provide low and moderate income housing for elderly persons not being provided by the private sector; and WHEREAS, the Project shall provide up to approximately 330 units at a total cost of approximately fourteen million nine hundred thousand dollars, of which it is intended that at least 66 units shall be rented to elderly persons of low and moderate income; WHEREAS , if the cost of the Project exceeds fifteen million dollars , the Project is subject to review by the Mayor and City Council of Salt Lake City Corporation; and WHEREAS, to aid in the financing of the Project so that a maximum number of units will be available to elderly persons of low income, the City and the Authority shall actively pursue a HODAG grant or other subsidy. It is hereby mutually covenanted and agreed by and betrieen the parties hereto that this Sublease is made upon the agreements, terms, covenants and conditions hereinafter set forth. CITY RECORDER • 324 South State, 5th Floor 9 4 8 9 5 . 2 . 2 9 0 2 . 0 6 : 7 Salt Lake City, Utah 84111 ARTICLE 1 DEFINITIONS Section 1.01. Definitions. Unless the context clearly requires otherwise and except as defined herein, all terms used herein shall have the meanings set forth in the Trust Indenture dated as of December 1 , 1985, entered into between the Issuer and the Trustee. The terms defined in this Article 1 shall, for all purposes of this Sublease and all agreements supplemental hereto, have the meanings herein specified. "Authority" shall mean the Housing Authority of Salt Lake City, a body corporate and politic of the State of Utah, and its per- mitted successors and assigns. "City" shall mean Salt Lake City Corporation. "Commencement Date" shall mean the date of commencement of the Term as set forth in Article 2 hereof. "Corporation" shall mean the Housing Development Corporation of Salt Lake City, a not-for-profit Corporation, incorpo- rated under and .pursuant to Utah law and its permitted successors and assigns . "Event of Default" shall have the meaning provided in Section 7 . 01 hereof. "Lease" shall mean the lease agreement, dated as of January 20, 1987, between the Corporation and the City, as amended or supplemented from time to time. "Mayor" shall mean the mayor of Salt Lake City Corporation. "Net Revenues" shall mean all revenues received by the Authority in connection with the Project, including but not limited to any monies received by the Authority under any sub-sublease, less the operating and maintenance expenses incurred in connection with the Project. "Term" shall mean the term of this Sublease as set forth in Article 2 hereof. CITt I REC RETURN �o -2- ciry s Salt SO h SSta��FR 94895 . 2 . 2902 . 06 : 7 S take 04t Ut S4F� ARTICLE 2 PROJECT AND TERM OF SUBLEASE The City does hereby demise and sublease to Authority, and the Authority does hereby hire and take from City the Project. TO HAVE AND TO HOLD unto the Authority, its successors and assigns, for a term (the "Term") which shall commence on the date hereof (the "Commencement Date" ) and shall expire on June 30, 1987, provided that the term hereof shall be extended automatically for successive periods of one (1) year each (a "Renewal Term") from July 1 of each year through June 30 of each succeeding year until June 30, 2031, unless this Sublease shall be terminated pursuant to its terms; provided, further, that there shall be no renewal of this Sublease if the Lease has been terminated pursuant to its terms or if the City elects not to renew the term of the Lease. During the Renewal Terms, the Authority shall be subject to the same terms and conditions as specified herein for the initial term. ARTICLE 3 NET REVENUES Section 3 .01. The Authority shall pay to the City on or before the fifteenth (15th) day of each month during the Term except if such fifteenth (15th) day is not a Business Day, on the immedi- ately preceding Business Day, as rent for the Project, all Net Revenues received by the Authority in connection with the Project. The City directs that the Authority shall make such rental payments directly to the Corporation , as lessor under the Lease . The Authority upon making each and every rental payment hereunder shall send a written statement of the amount and the date of such payment to the City. Section 3.02. Each installment of rent due and payable pursuant to this Sublease shall be paid by check, draft or .,Tire transfer in monies which at the time of payment constitute legal tender for private and public debts in the United States of America. CIT R Eri, Dr fH'B d� i t aid RCTUR ro -3- S South St at, SF? 94895 . 2 . 2902 . 06 : 7 ake63" th4�or Ut h ARTICLE 4 NATURE OF OBLIGATIONS OF AUTHORITY Section 4. 01. Except as hereinafter provided in this Article, the obligation of the Authority to pay the rent to the City shall be absolute and unconditional, and such shall be payable with- out any rights of set-off, recoupment or counterclaim the Authority might have against the City or any assignee thereof or any other person, whether or not the Project is completed or used or occupied by or through the Authority or available for use or occupancy by or through the Authority, whether or not this Sublease or the Lease shall have been terminated and whether or not the City shall be in default of its obligations hereunder or thereunder. The Authority shall not be precluded from bringing any action it may otherwise have against the City. Section 4.02. The obligation of the Authority to pay the rent to the City hereunder or to pay or expend any other sum of money hereunder shall be a special obligation of the Authority limited to the amounts received by the Authority in connection with the Project. Section 4.03. During the period the Bonds are outstand- ing, the Authority will not terminate this Sublease during the term of this Sublease for any cause, including, without limiting the gen- erality of the foregoing, any acts or circumstances that may consti- tute an eviction or constructive eviction, failure of consideration, failure of title, or frustration of purpose, or any damage to or destruction of the Project, or the taking by eminent domain of title to, or any interest in, or the right of temporary use of all or any part of the Project, or the sale or other disposition of all or any part of the Project, or the failure of the City to perform and observe any agreement or covenant, whether expressed or implied, or any duty, liability or obligation arising out of or connected with this Sublease. The delegation by the Authority to any other subtenant of any of its obligations or the performance of its covenants hereunder shall not be deemed or construed as a release of the Authority from its obligations under this Sublease. A. Gil Y RETURIJ Y J L `ryE t h �1& -4- CITY 1 324 South SeGORph R 9 4 8 9 5 . 2 . 2 9 0 2 . 0 6 : 7 `S��fake City, Utah 84111 ARTICLE 5 CITY'S RIGHT TO PERFORM SUBTENANT'S COVENANT'S Section 5.01. If the Authority at any time shall be in default of any of its obligations under this Sublease, then the City, without waiving or releasing the Authority from any obligation of the Authority contained in this Sublease, may (but shall be under no obligation to) perform such obligation on the Authority' s behalf. ARTICLE 6 ASSIGNMENT, SUBLETTING AND SALE OF THE PROJECT Section 6.01. This Sublease may be assigned and the Project may be subleased as a whole or in part, so long as the entire Project remains subject to the provisions of this Sublease, subject, however, to the following conditions: (a) no assignment or sublease shall relieve the Authority from the primary liability for its obligations hereunder, and in the event of any such assignment or sublease, the Authority shall remain primarily liable for the payment of all Net Revenues to the City; (b) the assignee or sublessee shall assume the obligations of the Authority hereunder to the extent of the interest assigned or subleased; (c) no such assignment or sublease, shall become effective without the prior written consent of the City and the Trustee, which consent shall be accompanied by an opinion of counsel which shall be an attorney or firm of attorneys of favorable reputation in the field of law relating to municipal bonds to the effect that such assignment or sublease (i) will not adversely affect the exemption of interest on the Bonds from Federal income taxation, and (ii) will not impair or result in any diminution of the obligations of Authority under this Sublease; and (d) the Authority shall, within thirty (30) days after the delivery thereof, furnish or cause to be furnished to the City and the Trustee a true and complete copy of each such assignment or sublease. ril f� � a TUD d k A lu -5- 32,1 !Tj?&Co Rp 9 4 8 9 5 . 2 . 2 9 0 2 . 0 6 : 7 Salt �etCtstau,te -' F/Go? ih 34-x1 ARTICLE 7 EVENTS OF DEFAULT, CONDITIONAL LIMITATIONS, REMEDIES Section 7.01. Either of the following events shall be an "Event of Default" hereunder: (a) if, for any reason, the Authority shall fail to pay when due the rent required to be paid hereunder. (b) if, for any reason, the Authority shall fail to per- form any covenant or agreement on its part required to be performed (other than the covenant to pay rent hereunder) and such failure shall have continued for thirty (30) days after notice of such fail- ure has been given by the City to the Authority. Section 7.02. (a) If an Event of Default described in Section 7 . 01 hereof shall occur, the City, to the extent permitted by law, subject to the provisions of the Trust Indenture and Title 78, Chapter 36, Section 3 of the Utah Code, may re-enter and repossess the Project using such force for the purpose as may be necessary without being liable to indictment, prosecution or damages therefor and may dispossess the Authority. (b) If an Event of Default described in Section 7 . 01 hereof shall occur, the City, subject to the provisions of the Trust Indenture and Title 78 , Chapter 36, Section 3 of the Utah Code, may take any action at law or in equity to enforce performance and obser- vance of any obligation, agreement or covenant of the Authority under this Sublease. The Authority shall pay to the City all rent payable here- under to the date upon which this Sublease and the Term shall have expired and come to an end or to the date of re-entry upon the Project by City, as the case may be. The rent payable under this Sublease shall be limited to Net Revenues as provided in Article 3 hereof. Section 7.03. The taking of possession or reletting of the Project, or any part thereof, pursuant to Sections 7.01 and 7 .02 hereof, shall not relieve the Authority of its liabilities and obli- gations hereunder, all of which shall survive such expiration, termi- nation, repossession or reletting. Section 7. 04. The rent payable by the Authority hereunder and each and every installment thereof, shall be and is hereby declared to constitute a valid lien upon the interest of the Authority in this Sublease and in the Project. 94895 . 2 . 2902 . 06 : 7 RE-TURN TO C l TY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 Section 7.05. Unless the City shall have conveyed the. City ' s interest in the Project to another Person, or shall have entered into a firm bilateral agreement providing for the leasing of the Project for a period of at least one year, the City may, subject to the applicable provisions of the Trust Indenture, upon payment by the Authority of all rent in respect of which any Event of Default shall have occurred, waive such Event of Default. Upon such payment and waiver, this Sublease shall be fully reinstated as if it had never been terminated, and the Authority shall be restored to the use, occupancy and possession of the Project. Section 7. 06. (a) The remedies conferred upon or reserved to the City under this Article 7 shall be the sole and exclusive rem- edies available to the City. (b) No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the City to exercise any remedy reserved to it in this Article 7, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. ARTICLE 8 OPTION TO PURCHASE CITY'S INTEREST IN PROTECT Section 8.01. (a) When the rents shall have been paid to the City in accordance with Article 3 hereof and the Trustee certi- fies to the City and the Authority that all Bonds shall have been paid or provision has been made for such payment in accordance with the provisions of the Trust Indenture, the Authority shall have the option to purchase for ten dollars ($10 . 00) City ' s interest in the Project on a date of settlement (not more than sixty (60) days after such payment or provision for payment and written notice to the Mayor) and at a place to be mutually agreed upon by the City and the Authority; upon which event the City shall transfer, convey, release, assign and set over to Authority all of City ' s right, title and interest in and to the Project by a good and sufficient quit-claim deed and such other legal instruments as may be required therefor. The Authority shall bear all costs and expenses in connection with the preparation of the documents of conveyance and the delivery thereof and, to the extent required by law, all fees, assessments and taxes payable in connection with the conveyance of title to such interest to the City' s interest in the Project. Upon conveyance of title to such interest and payment therefor as aforesaid, this -7— - t5 E ' 'sTY ['. 94095 . 2 . 2902 . 06 . 7 L 1 '0 CITY RECORDER 324 South State, 5th Floor Bait Lake City, Utah 84111 Sublease shall cease and terminate and all obligations of the Authority under this Sublease shall be terminated and extinguished. (b) In order to exercise the option to purchase the City's interest in the Project pursuant to Section 8 . 01 (a) hereof, the Authority shall give written notice to the Mayor at least five (5) but no more than sixty (60) days prior to the date of the exercise of such option. ARTICLE 9 SPECIAL COVENANTS Section 9.01. The City makes no representations whatso- ever in connection with the condition or suitability of the Project or to the adequacy of funds to acquire or construct the Project. The City shall not be liable for any defects therein or for any inade- quacy thereof. Section 9.02. The Authority and the City covenant that they shall not enter into a long term management or operating con- tract with any entity or person which is not an exempt person, as defined in Section 103 (b) of the Internal Revenue Code of 1954, as amended, or with an exempt person with respect to an unrelated trade or business, as defined in Section 513 (a) of the Internal Revenue Code of 1954 , as amended, without the prior written consent of City. The Authority further covenants that it will not enter into any long term management contracts for the Project without the prior written consent of the City , which consent shall not be unreasonably withheld. Section 9. 03. The City and the Authority covenant that they shall take no action, nor shall they approve the Trustee ' s taking any action or making any investment or use of the proceeds of Bonds , which would cause the Bonds or any series of Bonds to be "arbitrage bonds" within the meaning of Section 103 (c) of the Internal Revenue Code of 1954, as amended, and any proposed or final regulations thereunder as are applicable to the Bonds at the time of such action, investment or use. Section 9. 04. The City and the Authority shall at all times do and perform all acts and things necessary or desirable and within its power in order to assure that interest paid on the Bonds shall , for the purposes of Federal income taxation, be excludable from the gross income of the recipients thereof and exempt from such taxation. � l �rt . 94895 . 2 . 2902 . 06 : 7 ggrad' ^ ��r� 6 `Y� CITY ReCORDER 324 Sovth State, 5th Floor Salt Lake City, Utah 84111 Section 9.05. The Authority hereby agrees that the City Council of Salt Lake City Corporation shall have the final approval of the site plan and design of the Project. Section 9. 06. The Authority hereby covenants that it shall permit the Salt Lake City Department of Finance or its agents to audit the Authority ' s books and records, at any time upon reason- able notice, and shall submit its budget to the City Council of Salt Lake City Corporation for review prior to its adoption. Section 9.07. The Authority releases the City from, and agrees that the City shall not be liable for, and agrees to indemnify and hold the City and its agents and employees free and harmless from, any liability for any loss or damage to property or any injury to or death of any person that may be occasioned by any cause whatso- ever pertaining to the Project or the financing thereof, except in any case as a result of willful misconduct of the City. The parties intend that no general obligation or liabilities or charge against the general credit or taxing power of the City shall occur by reason of making this agreement, issuance of the Bonds, performing or fail- ing to perform any act requested of it by the Authority or by reason of the representations of the City contained in this agreement, or any other agreement or documents relating to the issuance and sale of the Bonds . Nevertheless, if the City or any of its officers, offi- cials , employees , agents or attorneys shall incur any pecuniary liabilities or whatsoever, then in such event the Authority shall indemnify and hold the City harmless by reason thereof, except for willful misconduct of the City. This Lease and the Sublease are being executed solely on behalf of the City. None of the officers or employees of the City are acting in other than a representative capacity and therefore, no personal liability attaches to them. In case any action shall be brought against the City in respect of which indemnity may be sought against the Authority, the City shall promptly notify the Authority, in writing, of such action and the Authority shall promptly assume the defense thereof, includ- ing the employment of counsel, and the payment of all expenses, pro- vided that the Authority shall have the exclusive right to negotiate and consent to settlement and provided, further, that the City shall cooperate with the Authority in asserting such defense. Should the Authority refuse or fail to provide counsel for City's defense and the City thereafter obtains counsel, the Authority shall pay for such counsel fees. The City shall have the right to employ separate coun- sel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the City unless the employment of such counsel has been specifically authorized by the Authority. The Authority shall not be liable for any settlement of any such action effected without its consent, but if settled with the consent of the Authority or if a final judgment ` 94895 . 2 . 2902 . 06 . 7 3 ; Lis' Qn�:� " . CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111. is entered for the plaintiff in any such action with or without the Authority ' s consent, the Authority agrees to indemnify and hold harm- less the City and its agents and employees from and against any loss or liability by reason of such settlement or judgment. Section 9. 08. The City and the Authority covenant that in the event the City elects not to renew the Lease pursuant to Section 2 . 01 of the Lease, or if the Lease is terminated pursuant to its terms, the Authority will lease the Project from the Corporation upon substantially the same terms and conditions contained in this Sublease. In the event the Authority leases the Project from the Corporation, the Authority agrees to use its best efforts to operate the Project in such a manner so as to ensure the timely payment of principal of, premium, if any, and interest on the Bonds in accor- dance with the terms of the Trust Indenture. ARTICLE 10 NOTICES Section 10.01. Whenever it is provided herein that any notice, demand, request, consent, approval , or other communication shall or may be given to or served upon either of the parties by the other, or whenever either of the parties shall desire to give or serve upon the other any notice, demand, request, consent, approval, or other communication with respect hereto or to the Project, each such notice, demand, request, consent, approval, or other communica- tion shall be in writing and, any law or statute to the contrary not- withstanding, shall be effective for any purpose if given or served as follows: (a) If by the City, by mailing the same to the Authority by certified mail , postage prepaid, return receipt requested, addressed to Authority at 1800 South West Temple, Suite 302 , Salt Lake City, Utah 84115, Attention: Executive Director, or to such other address as the Authority may from time to time designate by notice given to the City by certified mail as aforesaid. (b) If by the Authority, by mailing the same to City by certified mail , postage prepaid, return receipt requested, addressed to the City at Room 300 City & County Building, 451 South State Street, Salt Lake City, Utah 84111, Attention: Mayor, or to such other address (es) and attorneys as the City may from time to time designate by notice given to the Authority by certified mail as aforesaid. Section 10.02. Every notice, demand, request, consent, approval , or other communication hereunder shall be deemed to have Y L!23 j r ' 94895 . 2 . 2902 . 06 : 7 6 g 6�1�o °m @� V �6..GTi.6s CITY RECORDER 324 South State, 5th Floor Salt Luke City, Utah 84111 been given or served three days after the time that the same shall have been deposited in the United States mails, postage prepaid, in the manner aforesaid. Section 10.03. During the period of any postal strike or other interference with the mails, personal service (with receipt acknowledged in writing) shall be substituted for certified mail . ARTICLE 11 CERTIFICATES BY CITY AND AUTHORITY Section 11.01. Authority agrees at any time and from time to time upon not less than thirty (30) days' prior notice by City to execute, acknowledge and deliver to City or any other party specified by City, a statement in writing certifying that this Sublease is unmodified and in full force and effect (or if there have been modi- fications, that the same, as modified, is in full force and effect and stating the modifications) and the date to which the Net Revenue payable by Authority hereunder has been paid, and stating whether or not to the best knowledge of the signer of such certificate, City is in default in performance of any covenant, agreement or conditions contained in this Sublease, and, if so, specifying in detail each such default of which the signer may have knowledge. Section 11. 02. City agrees at any time and from time to time upon not less than thirty (30) days' prior notice by Authority to execute, acknowledge and deliver to Authority a statement in writ- ing certifying that this Sublease is unmodified and in full force and effect (or if there have been modifications, that the same, as modi- fied, is in full force and effect and stating the modifications) and the date to which the Net Revenues payable by Authority hereunder have been paid, and stating whether or not Authority is in default in the payment of such rent, and, if so, specifying the amount thereof. Any failure by the City to provide any such certification shall not alter the City ' s rights to receive rent under this Sublease. Section 11.03. The City and the Authority agree that the notice required to be given by the City in Section 11 . 02 is the responsibility of the Trustee. Any failure to give such notice cannot be considered a breach on the part of the City. r gi p Ti gP gym,0 2I G .✓ N h a CITY RECORDER -11- 324 South State, 5th Floor Salt Lake City, Utah 84111 94895 . 2 . 2902 . 06 : 7 ARTICLE 12 SURRENDER AT END OF SUBLEASE Section 12. 01. Subject to the provisions of Article 2 and Article 8 hereof, on the last day of the Term or any Renewal Term or upon any earlier termination of this Sublease, the Authority shall well and truly surrender and deliver up to the City and the City shall accept the Project in then "as is" condition. ARTICLE 13 QUIET ENJOYMENT Section 13.01. The City covenants that, if and as long as Authority shall faithfully perform the agreements, terms, covenants and conditions hereof, and as long as the Lease is in full force and effect, the Authority shall and may peaceably and quietly have, hold and enjoy the Project for the term hereby granted without molestation or disturbance by or from the City or any person claiming through the City and free of any encumbrance created or suffered by the City and those as to which this Sublease is subject and subordinate. ARTICLE 14 INVALIDITY OF CERTAIN PROVISIONS Section 14. 01. If any term or provision of this Sublease or the application thereof to any person or circumstances shall, to any extent , be invalid or unenforceable, the remainder of this Sublease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and pro- vision of this Sublease shall be valid and be enforced to the fullest extent permitted by law. ARTICLE 15 INSURANCE Section 15.01. The Authority agrees to insure the Project or cause it to be insured with insurance companies licensed to do business in the State of Utah in such amounts and in such manner and against such loss, damage and liability, including liability to third parties , as is customary with entities in the same or similar business. To the extent premiums for such insurance are not paid by PI-12- 0' �! t.9 L-r q a,� PY C I T1v1 R E C 0 94895 . 2 . 2902 . 06 : 7 rT11F) T n-; F r. U, `4 i U 6 a ��1 V CITY RECORDER 324 South State, 5th Floor Salt take City, Utah 84111 a contractor for the construction or acquisition of any part of the Project, then the Authority agrees to pay the premiums thereon. The Authority further agrees that it will at all times carry public liability insurance with insurance companies licensed to do business in the State of Utah with respect to the Project in minimum amounts of $1, 000, 000 for death or bodily injury in connection with each occurrence and $1, 000,000 for property damage in connection with each occurrence. The Authority further agrees to obtain and maintain full extended coverage fire, flood, earthquake and hazard insurance with respect to the Project , for an amount not less than and with a deductible not more than that reasonably required by the City. Such insurance shall be provided by reputable insurance companies licensed to do business in the State of Utah. In the event of loss or damage to the Project, the Net Proceeds of any insurance provided hereunder shall be applied as set forth in Section 406 of the Indenture; in the event of a public liability occurrence, the Net Proceeds of any insurance provided hereunder shall be applied toward extinguishment or satisfaction of such liability. At all times during the term of this Sublease Agreement, the Authority shall comply with the laws of the State relating to workmen ' s compensation with respect to the Project. In addition, the Authority shall obtain and carry builder's risk insurance coverage at all times during the construction of the Project. The Authority shall deliver insurance certificates evidencing proof of coverages as indicated above. Each insurance policy maintained pursuant to this Section shall contain a provision that such policy shall not be cancelled unless the Trustee is notified at least 30 days prior to such cancel- lation, and at least 15 days prior to the expiration of any such policy the Authority shall furnish evidence satisfactory to the Trustee that such policy has been renewed or replaced or is no longer required by this Sublease Agreement. The Authority need not maintain any of the insurance cover- age required by this Section 15 . 01 if and to the extent the Corporation has provided such insurance coverage (upon the same terms as required under this Sublease) . Section 15.02. With respect to any and all liability insurance required pursuant to Section 15. 01 hereof, the City shall be named as an additional insured party. nC ol 'S a t ly RL IL CITY RECORDER -13- 324 South State, 5th Floor Salt Lake City, Utah 84111 94895 . 2 . 2902 . 06 : 7 ARTICLE 16 MISCELLANEOUS Section 16.01. The captions of this Sublease are for con- venience of reference only and in no way define, limit or describe the scope of intent of this Sublease or in any way affect this Sublease. Section 16.02. The Table of Contents is for the purpose of convenience of reference only and is not to be deemed or construed in any way as part of this Sublease or as supplemental thereto or amendatory thereof. Section 16.03. The use herein of the words "successors and assigns" or "successors or assigns" of the City or the Authority shall be deemed to include the legal representatives and assigns of the City or the Authority. Section 16.04. The Authority (i) acknowledges that the City will pledge all of its right , title and interest in this Sublease to the Corporation pursuant to the terms and provisions of the Lease, and (ii) consents to such pledge. Section 16. 05. Except with the consent of the City and as otherwise expressly provided in this Sublease, there shall be no merger of this Sublease or the subleasehold estate created hereby with the fee estate in the Project or any part thereof by reason of the same Person acquiring or holding, directly or indirectly, this Sublease or the subleasehold estate created hereby or any interest in this Sublease or in such subleasehold estate as well as the fee estate in the Project. Section 16.06. This Sublease cannot be changed, modified or terminated orally, but only by a written instrument of change, modification or termination executed by the party against whom enforcement of any change, modification, or termination is sought. Section 16.07. This Sublease shall be governed by and construed in accordance with the laws of the State of Utah. Section 16.08. The agreements, terms, covenants and con- ditions herein shall be binding upon, and shall inure to the benefit of, the City and the Authority and their respective successors and assigns. Section 16.09. All references in this Sublease to "Articles" or "Sections" shall refer to the designated Article(s) or Section (s) , as the case may be, of this Sublease. PYU, 9 :__M u 94895 . 2 . 2902 . 06 : 7 � �..� r %''`�;�; �' r RET CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 Section 16.10. The City and the Authority, upon the writ- ten request of the other, shall join in the execution of a memorandum of sublease in proper form for recordation. Section 16.11. It is understood and agreed that nothing contained in this Sublease shall be construed as a waiver on the part of the parties, or any of them, of any right not explicitly waived in this Sublease. In the event any agreement contained in this Sublease shall be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. CITY RECORDER 324 South State, 5th Floor Salt Lake City, Utah 84111 -15- 94895 . 2 . 2902 . 06 : 7 IN WITNESS WHEREOF, the City and the Authority have exe- cuted this Sublease as of the date and year first above written. HOUSING AUTHORITY OF SALT LAKE CITY By: SALT LAKE CITY CORPORATION MAYOR ATTEST: CI R C DER DEC 9 1986 CITY RECORDER By: APPROVED AS TO FORM: OTU ij CITY By. City Attorney RETURN TO �� '�� CITY RECORDER 324 South State, Sth Flom Salt Lake City, Utah 84111 -16- 94895 . 2 . 2902 . 06 : 7 t STATE OF UTAH ) ss . . COUNTY OF ) On the day of January, 1987 , before me personally came , to me known, who, being by me duly sworn, did depose and say that he resides at that he is the of the Housing Authority of Salt Lake City, the corporation described in and which executed the fore- going instrument; and that he signed his name thereto by order of the board of trustees of said corporation. STATE OF UTAH ) ss. . COUNTY OF SALT LAKE PITY . On the day of 198 before me personally came PALMER DePAULIS , to me known, who, being by me duly sworn, did depose and say that he resides at SALT LAKE CITY , that he is the Mayor of the Salt Lake City Corporation, the body politic described in and which executed the foregoing instrument; that he had authority to sign the same and he acknowl- edged to me that he executed the same as the act and deed of the People of the City of Salt Lake City for the uses and purposes therein mentioned. _ AR � 7 OF U'i ;i C17 Y RECORDER 324 South State, 5th Floes Salt take City, Utah 8411, -17- 94895 . 2 . 2902 . 06 : 7 APPROVE SPECIAL RESERVE AGREEMENT DEC 9 1986 CITY RECIORDER Special Reserve Agreement, dated as of January 15, 1987, by and among the Housing Authority of Salt Lake City ( the "Authority") , the Housing Development Corporation of Salt Lake City ( the "Corporation" ) , Salt Lake City Corporation ( the "City" ) and Moore Trust Company (the "Bank") . WHEREAS, the City intends to enter into a lease agreement with the Corporation ( the "Lease") with respect to certain low rent housing facilities for elderly persons of low and moderate income (the "Project") to be financed through the issuance by the Authority of $14, 900, 000 Adjustable/Fixed Rate Housing Revenue Bonds (Housing Development Corporation of Salt Lake City Housing for the Elderly Project) 1985 Series A ( the "Bonds" ) ; and WHEREAS, the City intends to enter into a Sublease Agreement with the Authority with respect to the Project; and WHEREAS, in order to assure the availability of adequate funds for the operation, maintenance, and repair of the Project and the repayment of debt service with respect to the Project, the Authority, the Corporation and the City wish to provide for a Special Reserve Fund , to be funded by the Authority and adminis- tered by the Bank. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as fo 1 l ows . 4 �'i tj"�: Ct7Y RECOR E 324 South State, 5th Floor `Salt Lake City, Utah 64111 1. There is hereby created and established with the Bank a special fund designated the "Special Reserve Fund" (the "Special Fund" ) to be held by the Bank separate and apart from all other funds of the Authority , the Corporation, the City and the Bank . 2. The Authority and the Corporation will deposit or cause to be deposited in the Special Fund from Project revenues, which Project revenues shall be measured to include earnings on the Special Fund and on all funds created under the Trust Indenture , dated as of December 1, 1985 (the " Indenture" ) , between the Authority and the Bank, as trustee , net of operating costs ( the "Net Revenues" ) , all Net Revenues ( exclusive of monies held under the Indenture) in excess of the amounts required to be paid by the Corporation pursuant to Section 5. 2 of the Loan Agreement, dated as of December 1, 1985 (the " Loan Agreement") between the Authority and the Corporation. 3. Any monies in the Special Fund shall be applied by the Authority to pay or repay: ( i) unless waived in writing by the City , any amounts advanced at any time by the City pursuant to the Lease; ( ii) the costs of unanticipated replacements and repairs to the Project; ( iii) the costs of operating and main- taining the Project ; and ( iv) the amounts due from the Corpora- tion pursuant to Section 5. 2 of the Loan Agreement. 4. The Bank shall invest or reinvest in accordance with the instructions of the Treasurer of the City any monies or interest earnings held by the Bank under this Agreement . s,L f a s "a �,v, S 1_ `�1�1`O4!6O�D 324 South State, 5th Floor Salt Lake City, Utah 84111 5. This Agreement is made for the benefit of the Authority, the Corporation and the City and shall not be repealed , revoked , altered or anended without the written consent of the Authority, the Corporation and the City. 6. In consideration of the services rendered by the Bank under this Agreement , the Authority agrees to and shall pay to the Bank its proper fees and expenses, including all reasonable expenses , charges , counsel fees and other disbursements incurred by the Bank or by its attorneys , agents and employees in and about the performance of their powers and duties hereunder, from any monies of the Authority lawfully available therefor. The Authority further agrees to indemnify and save the Bank harmless against any liabilities which the Bank may incur in the exercise and performance of its powers and duties hereunder, and which are not due to its negligence or default. 7. Monies from the Special Fund may be released to the Authority upon demonstration by the Authority to the satisfaction of the City that the annual Net Revenues , plus amounts on deposit in the Special Fund , are expected to equal or exceed 1 . 25 times the maximum annual amount of principal and interest due on the Bonds . Such amounts may thereafter be released to the Authority by the Mayor, with the advice and consent of the City Council , for any lawful corporate purpose of the Authority, including calling Bonds and initiating new construction . 8. This Agreement shall terminate when all Bonds have been q �� a -3- CITY K U, C 0 E L 6 >n u � ti SCR 324 South State, 5th Floor chit I aka Riiv Utah 84111 paid and discharged in accordance with their terms . Upon such termination, all monies remaining in the Special Fund shall be released to the Authority. 9. This Agreement shall be governed by the applicable laws of the State of Utah. 10. If any one or more of the covenants or agreements provided in this Agreement on the part of the Authority or the Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law , such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agree- ment. 11. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instru- ment. IN WITNESS WHEREOF , the parties hereto have each caused this Agreement to be executed by their duly authorized officers or officials and their seals to be hereunder affixed and attested as of the date first above written . RETURN TO IWM M, CITY RECORDER 324 South State, Sth Floor -4- Salt Lake City, Utah 84111 ( S E A L ) HOUSING AUTHORITY OF SALT LAKE CITY Attest: By ( S E A L ) HOUSING DEVELOPMENT CORPORATION OF SALT LAKE CITY Attes f 1 By w4t'Lt,,' ( S E ) SALT LAKE CITY CORPORATION Attest: By ( S E A L ) MOORE TRUST COMPANY Attest: By cm149 APPROVED SEC 9 1986 ; CITY RECORDER R9 t � ? i r cffyRecoAOEa , ` - c7 uth State. 5th Floor c� rs 324 So Utah g4111 Salt Lake City, j J�