R2011-136 AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT

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Section 6.02 Taxes, Other Governmental Charges and Utility Charges. The Property will be used for a governmental or proprietary purpose of Lessee and, therefore, the Property is anticipated to be exempt from all taxes presently assessed and levied on personal property. In the event the use, possession or acquisition of the Property is found to be subject to taxation in any form Lessee will pay during the Lease Term, as the same respectively come due, all taxes and charges of any kind that may be lawfully assessed or levied against or with respect to the Property. In all events, Lessee shall pay all utility and other charges incurred in the operation, maintenance and use of the Property. Section 6.03 Insurance. At its own expense Lessee shall cause casualty, public liability and property damage insurance to be carried and maintained in an amount sufficient to protect the Full Insurable Value (the applicable Purchase Price), and to protect Lessor from liability in all events. All insurance proceeds from casualty losses shall be payable as provided in Article VII hereof. Lessee shall furnish to Lessor certificates evidencing such coverage throughout the Lease Term. Alternatively, Lessee may insure the Property under a blanket insurance policy or policies which cover not only the Property but other properties. All insurance shall name Lessee and Lessor as named insureds and loss payees as their respective interests may appear and shall provide for at least ten (10) days prior written notice by the insurance company to the Lessor in the event of cancellation or expiration. RTICLE VII: DAMAGE, DESTRUCTION AND CONDEMNATION: PROCEEDS. Section 7.01 Damage, Destruction and Condemnation. If prior to the termination of the Lease Term (a) the Property is destroyed (in whole or in part) or is damaged by fire or other casualty or (b) the Property or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body or by any party acting under governmental authority, Lessee and Lessor will cause the proceeds of any insurance claim or condemnation award, after deducting all expenses (including attorneys' fees) incurred in the collection of such claim or award ("Net Proceeds"), to be applied to Lessee's obligations pursuant to Section 7.02 hereof. Section 7.02 Application of Net Proceeds. Provided the Property is not deemed to be a total loss, Lessee shall, if Lessee is not in default hereunder, cause the repair, replacement or restoration of the Property and pay the cost thereof. In the event of total destruction or damage to the Property, whether or not Lessee is in default, at Lessor's option, Lessee shall promptly pay to Lessor the amount of the Purchase Price as set forth in the Payment Schedule attached hereto applicable to such date, plus the Rent Payment due on such date, plus any other amounts payable by Lessee hereunder, and, upon payment in full of such amounts, the Lease Term shall terminate and Lessor's security interest in the Property shall terminate. Net proceeds in excess of the then applicable Purchase Price, if any, shall be retained by Lessee. Lessee agrees that if the Net Proceeds are insufficient to pay in full Lessee's obligations hereunder, Lessee shall make such payments to the extent of any deficiency. 5