HomeMy WebLinkAbout1995-032
1 RESOLUTION NO. 95-32
2 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING MASTER
LEASE WITH OPTION TO PURCHASE AGREEMENT FOR ACCESS PUBLIC FUNDING,
3 INC. FOR THE FURNISHING OF LEASE PURCHASE FINANCING AND REPEALING
RESOLUTION NO. 94-301.
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5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
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7 SECTION 1. Resolution No. 94-301 is hereby repealed.
8 SECTION 2. That Equipment Master Lease with Option to
9 Purchase Agreement with Access Public Funding, Inc. (the
10 "Agreement"), a copy of which is attached hereto and incorporated
11 herein as Exhibit "A", is approved by the City of San Bernardino
12 for the furnishing of Lease-Purchase Financing; pursuant to this
13 determination, said Master Lease with Option to Purchase Agreement
14 award shall only be effective upon the execution of an Agreement
15 by the Mayor of the City of San Bernardino.
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SECTION 3.
The City shall not be obligated under the
17 Agreement unless and until the Agreement is fully executed and no
18 oral agreement relating thereto shall be implied or authorized.
19 The authorization to execute the above referenced Agreement is
20 rescinded if the parties fail to execute it within sixty (60) days
2] of the passage of this resolution.
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SECTION 4.
No transactions shall be initiated under the
23 Master Lease contained in the Agreement without the approval of
24 the Mayor and Common Council.
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95-32
1 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING MASTER LEASE
WITH OPTION TO PURCHASE AGREEMENT FOR ACCESS PUBLIC FUNDING, INC.
2 FOR THE FURNISHING OF LEASE PURCHASE FINANCING AND REPEALING
RESOLUTION NO. 94-301.
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SECTION 5. The city shall not be obligated until a lease-
purchase schedule transaction for material, equipment, supplies
or contracted services is executed with the vendor under this
Agreement.
SECTION 6. The Director of Finance is hereby authorized to
execute such documents as necessary for the administration of
transactions under the Agreement.
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95-32
1 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING MASTER LEASE
WITH OPTION TO PURCHASE AGREEMENT FOR ACCESS PUBLIC FUNDING, INC.
2 FOR THE FURNISHING OF LEASE PURCHASE FINANCING AND REPEALING
RESOLUTION NO. 94-301.
I HEREBY CERTIFY that the foregoing resolution was duly
adopted by the Mayor and Common Council of the city of San
Bernardino at a regular
meeting thereof, held on the 6th
day of February
, 1995, by the following vote, to wit:
COUNCIL MEMBERS
NEGRETE
AYES NAYS
x
x
x
x
x
x
x
ABSTAIN
ABSENT
CURLIN
HERNANDEZ
OBERHELMAN
DEVLIN
POPE-LUDLAM
MILLER
~~d. CL.-~
CI CLERK
of
The foregoing resolution is hereby approved this
February I 1995.
day
9th
--;;~;:rJt{/li^
Tom Minor, Mayor
City of San Bernardino
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roved as :~. form
1.egaryOtc:ent:
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ES F.' PENMAN
ity Attorney
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MASTER LEASE WITH OPTION TO PURCHASE AGREEMENT
NUMBER M 2596
TIllS MASTER LEASE WITII OPTION TO PURCHASE AGREEMENT ("Lease"), dated as of
this 5th day of December, 1994, is made and entered into by and between Access Public Funding,
Inc., a corporation duly organized and existing under the laws of the state of California, ("Lessor")
whose principal business address is 501 Second Street, Suite 330, San Francisco, CA 94107; and
City of San Bernardino, C'Lessee") a political subdivision of the state of California, whose address
is 300 North "D" Street, San Bernardino, CA 92418.
In consideration of the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I: DEFINITIONS AND EXHIBITS
SECTION 1.1. Definitions. Unless the context otherwise requires, the terms defined in the
Section shall, for all purposes of this Lease have the meanings herein specified.
Contractor: Each of the manufacturers or vendors from whom Lessee (or Lessor at Lessee' s
request) has ordered or will order or with whom Lessee (or Lessor at Lessee's request) has
contracted or will contract for the manufacture, delivery and/or installation of the Equipment.
Equipment or Equipment Group: An item or items of personal property designated from time to
time by Lessee which are described in an Equipment Schedule, and which are being or will be
leased with option to purchase by Lessee pursuant to this Lease. An Equipment Group consists of
the Equipment listed on any single page or set of pages of Exhibit A.
Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits
A,'B and C which have been completed with respect to an Equipment Group and executed by
Lessor and Lessee as indicated herein.
Fiscal Year: The 12-month fiscal period of Lessee which commences on July 1st in every year and
ends on the following June 30th.
Counsel: An attorney duly admitted to the practice of law before the highest court of the State
who may be a full-time employee of Lessor or Lessee.
Interest: The portion of any Rental Payment designated as and comprising interest as shown in
any Equipment Schedule.
Lease: With respect to each Equipment Group, this Master Lease With Option To Purchase
Agreement and the Equipment Schedule in which such Equipment Group is described, which
shall constitute a separate contract relating to such Equipment Group, and which shall be
separately assignable and enforceable.
Net Proceeds: Any insurance proceeds or condemnation award, paid with respect to any
Equipment, remaining after payment therefrom of all expenses incurred in the collection thereof.
Non-Appropriation: The failure of Lessee or Lessee's governing body to appropriate money for
any Fiscal Year of Lessee sufficient for the continued performance of this Lease by Lessee with
respect to any Equipment Group, as evidenced by the passage of an ordinance or resolution
specifically prohibiting Lessee from performing its obligations under this Lease with respect to
such Equipment Group, and from using any moneys to pay the Rental Payments due under this
l.ease with respect to such Equipment Group for a designated Fiscal Year and all subsequent Fiscal
Years.
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Pavrnent Date: The date upon which any Rental Payment is due and payable as provided in any
Equipment Schedule.
Permitted Encumbrances: As of any particular time: (i) liens for taxes and assessments not then
delinquent, (ii) this Lease and amendments hereto, and (iii) Lessor's interest in the Equipment.
Principal: The portion of any Rental Payment designated as principal in any Equipment
Schedule.
Purchase Option Price: With respect to any Equipment Group, as of the Payment Dates specified
the Equipment Schedule relating thereto, the amount so designated and set forth opposite each
such date in such Equipment Schedule.
Rental Pavrnent: With respect to any Equipment Group, the payment due from Lessee to Lessor
on each Payment Date during the Term of this Lease, as shown in the Equipment Schedule
relating thereto.
Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered
any Equipment from a Contractor.
State: The State of California.
State and Federal Law or Laws: The Constitution and any law of the State and any charter,
ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the
United States, and any rule or regulation of any federal agency.
Term of this Lease or Lease Term: With respect to any Equipment Group, the period during
which this Lease is in effect as specified in Section 4.1.
Section 1.2. Exhibits.
Exhibit k A schedule executed by Lessor and Lessee describing an Equipment Group being leased
by Lessee pursuant to this Lease. Lessee hereby consents to and authorizes Lessor to insert the serial
or other identifYing numbers relating to the Equipment.
Exhibit B: A payment schedule executed by Lessor and Lessee setting forth the date and amount
of each Rental Payment coming due during the Lease Term with respect to the Equipment Group,
the amount of such Rental Payments comprising Principal and Interest, and the price at which
Lessee may exercise its option to purchase Lessor's interest in such Equipment Group in
accordance with Article X.
Exhibit C: A form of Certificate of Acceptance of Lessee indicating that the Equipment Group
described therein has been delivered and installed in accordance with the Specifications, and has
been accepted by Lessee and that certain other requirements have been met by Lessee.
Exhibit 0: A form of opinion of counsel to Lessee as to the organization, nature and powers of
Lessee; the validity, execution and delivery of this Lease and various related documents; the
absence of litigation; and related matters.
Exhibit E: A form of resolution of the governing body of Lessee relating to the Lease and, if
applicable, certain federal tax matters.
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ARTICLE II: REPRESENTATIONS, WARRANTIES, AND COVENANTS
Section 2.1. Representations. Warranties and Covenants of Lessee. Lessee represents and
warrants to and covenants with Lessor with respect to this Lease and each Equipment Schedule, as
follows:
(a) Lessee is a political subdivision of the State, duly organized and existing under the
Constitution and laws of the State, and is authorized under the Constitution and laws of the State
to enter into this Lease and the transactions contemplated hereby, and to perform all of its
obligations hereunder.
(b) The execution and delivery of this Lease by the officer of Lessee executing it has been
duly authorized by a duly adopted resolution of Lessee' s governing body, or by other appropriate
official action, and such action has complied and/or will comply with all public bidding and
other State and Federal Laws applicable to this Lease and the acquisition and financing of the
Equipment by Lessee.
(c) Lessee will use the Equipment during the Lease Term only tb perform essential
governmental functions.
(d) Lessee will take no action that would cause the Interest portion of the Rental
Payments to become includable in gross income of the recipient for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the "Code") and Treasury Regulations
promulgated thereunder (the "Regulations"), and Lessee will take and will cause its officers,
employees and agents to take all affirmative actions legally within its power necessary to ensure
that the Interest portion of the Rental Payments does not become includable in gross income of
the recipient for federal income tax purposes under the Code and Regulations; all as amended
from time to time (including, without limitation, the calculation and payment of any rebate
required to preserve such exclusion).
(e) Lessee will submit to the Secretary of the Treasury information reporting statements
and other information relating to this Lease and each Equipment Schedule at the times and in the
forms required by the Code and the Regulations; and if applicable, Lessee will cause a resolution
substantially in the form attached hereto as Exhibit E to be adopted by its governing body with
respect to this Lease and each Equipment Schedule.
(f) Upon delivery and installation of any Equipment Group, Lessee will provide to Lessor
a completed and executed copy of a Certificate of Acceptance relating thereto in the form attached
hereto as Exhibit C, and upon execution of this Lease and/or each Acceptance Certificate Lessee
will provide to Lessor an opinion of its legal counsel in the form attached hereto as Exhibit D.
ARTICLE III: LEASE OF EQUIPMENT
Section 3.1. Acquisition of Equipment. Lessee shall advise Lessor of its desire to lease
Equipment and of the desired lease terms for the Equipment Group. Upon agreement by Lessor
and Lessee as to the lease of the Equipment and such terms, Lessor shall furnish to Lessee a
proposed Exhibit A relating to the Equipment Group completed insofar as possible. Lessee (or
Lessor at Lessee' s request) shall order the Equipment Group from the appropriate Contractor or
Contractors and notify Lessor in writing of the Equipment cost and the estimated delivery period.
Nothing herein shall obligate Lessor to lease any Equipment to Lessee until Lessor shall have so
concurred in writing.
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City of San Bernardino
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Section 3.2. Equipment Deliverv: Documentation. Lessor and Lessee shall complete and
execute an Exhibit A and Exhibit B with respect to each Equipment Group. Upon delivery of any
Equipment Group, Lessee shall inspect such Equipment, and if such Equipment meets Lessee's
Specifications, Lessee shall provide to the Lessor a completed and executed copy of a Certificate of
Acceptance relating thereto in the form attached hereto as Exhibit C. Simultaneously with the
delivery, Lessor and Lessee shall take all actions necessary to vest legal title to the Equipment
Group in Lessee, and to perfect a security interest therein in favor of Lessor or a person, firm or
corporation designated by it.
Section 3.3. Lease: Eniovment: Inspection. Lessor hereby leases each Equipment Group
made subject to this Lease to Lessee, and Lessee hereby leases such Equipment Group from Lessor,
upon the terms and conditions set forth in this Lease. Lessor hereby covenants to provide Lessee
during the Term of this Lease with the quiet use and enjoyment of the Equipment, and Lessee
shall during the Term of this Lease peaceably and quietly have and hold and enjoy the Equipment,
without suit, trouble or hindrance from Lessor, except as expressly set forth in this Lease. Lessor
will, at the request of Lessee and at Lessee' s cost, join in any legal action in which Lessee asserts its
right to such possession and enjoyment to the extent Lessor lawfully may do so. Lessee agrees that
Lessor shall have the right at all reasonable times to examine and inspect the Equipment. Lessee
further agrees that Lessor shall have such rights of access to Equipment as may be reasonably
necessary to cause the proper maintenance of the Equipment in the event of failure of Lessee to
perform its obligations hereunder.
Section 3.4. Alternative Procedure: Escrow Agreement. Notwithstanding the provisions of
Sections 3.1 and 3.2, if, upon agreement by Lessor and Lessee as to any Equipment Group to be
acquired and leased by Lessee under this Lease, Lessor and Lessee enter into an escrow agreement
establishing a fund from which the Equipment Group cost is to be paid, and an amount equal to
such cost is deposited therein by Lessor: (a) Lessor and Lessee shall immediately complete and
execute an Exhibit A relating to the Equipment Group; and (b) The Rental Payments relating to
the Equipment Group shall be due and payable commencing upon the date of said deposit of
funds as provided in Exhibit B.
ARTICLE N: TERM OF LEASE
Section 4.1. Lease Term. This lease shall be in effect for a Term commencing upon its date of
execution and ending as provided in Section 4.6. This Lease shall be in effect with respect to each
Equipment Group for a Term commencing upon the date of execution of Exhibit C of the
Equipment Schedule relating thereto and ending as provided in Section 4.6.
Section 4.2. Termination bv Lessee. In the sole event of Non-Appropriation relating to any
particular Equipment Group, Lessee shall have the right to terminate the Lease with respect to
such Equipment Group, at the end of any Fiscal Year of Lessee, in the manner and subject to the
terms specified in this Section and Sections 4.4 and 4.5. Lessee may effect such termination by
giving Lessor a written notice of termination with respect to such Equipment Group and by
paying to Lessor any Rental Payments and other amounts with respect to such Equipment Group
which are due and have not been paid at or before the end of its then current Fiscal Year. Lessee
shall endeavor to give notice of such termination not less than sixty (60) days prior to the end of
such Fiscal Year, and shall notify Lessor of any anticipated termination. In the event of
termination of this Lease with respect to any Equipment Group as provided in this Section, Lessee
shall deliver possession of such Equipment Group to Lessor in accordance with Section 12.3, and
shall convey to Lessor or release its interest in such Equipment Group within ten (10) days after
the termination of this Lease with respect to such Equipment Group.
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City of San Bernardino
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Section 4.3. Intent to Continue Lease Term: ApproDriations. Lessee presently intends to
continue this Lease for its entire Term with respect to each Equipment Group made subject hereto
and to pay all Rental Payments relating thereto. The person or entity in charge of preparing
Lessee's budget will include in the budget request for each Fiscal Year the Rental Payments to
become due in such Fiscal Year with respect to each Equipment Group, and will use all reasonable
and lawful means available to secure the appropriation of money for such Fiscal Year sufficient to
pay all such Rental Payments coming due therein, and Lessee reasonably believes that moneys in
an amount sufficient to make all such Rental Payments can and will lawfully be appropriated and
made available for this purpose.
Section 4.4. Effect of Termination. Upon termination of this Lease with respect to any
Equipment Group as provided in section 42, Lessee shall not be responsible for the payment of
any additional Rental Payments relating thereto coming due in succeeding Fiscal Years, but if
Lessee has not delivered possession of such Equipment Group to Lessor in accordance with section
12.3 and conveyed to Lessor or released its interest in the Equipment Group within ten (10) days
after the termination of this Lease with respect thereto, the termination shall nevertheless be
effective, but Lessee shall be responsible for the payment of damages in an amount equal to the
amount of the Rental Payments thereafter coming due with respect to such Equipment Group
which are attributable to the number of days after such ten (10) day period during which Lessee
fails to take such actions and for any other loss suffered by Lessor as a result of Lessee's failure to
take such actions as required.
Section 4.5. Nonsubstitution. If this Lease is terminated by Lessee with respect to any
Equipment Group in accordance with Section 42, to the extent permitted by State law, Lessee
agrees not to purchase, lease, or rent personal property to perform the same function as, or
functions taking place of, those performed by such Equipment Group, and agrees not to permit
such functions to be performed by its own employees or by any agency or entity affiliated with or
hired by Lessee, for a period of three hundred sixty-five (365) days succeeding such termination;
provided, however, that these restrictions shall not be applicable in the event the Equipment
Group shall be sold by Lessor and the amount received from such sale, less all costs of such sale, is
sufficient to pay the then applicable Purchase Option Price relating thereto and set forth in
Exhibit A; or if or to the extent that the application of these restrictions is unlawful and would
affect the validity of this Lease.
Section 4.6. Termination of Lease Term. The termination of this Lease with respect to any
Equipment Group will terminate upon the occurrence of the first of the following events: (a) The
termination thereof by Lessee with respect to the Equipment Group in accordance with Section
4.2; (b) the exercise by Lessee of its option to purchase Lessor's interest in the Equipment Group
pursuant to Article X; (c) a default by Lessee with respect to the Equipment Group and Lessor's
election to terminate this Lease with respect to the Equipment Group pursuant to Article XII; or
(d) the payment by Lessee of all Rental Payments and all other amounts authorized or required to
be paid by Lessee hereunder with respect to the Equipment Group.
ARTICLE Y: RENTAL PAYMENTS
Section 5.1. Rental Payments. Lessee agrees to pay Rental Payments with respect to each
Equipment Group during the Term of this Lease, in the amounts and on the dates specified in the
Equipment Schedule relating thereto. Lessee authorizes Lessor to insert the due dates of the
Rental Payments when determined on Exhibit B. A portion of each Rental Payment is paid as
and represents the payment of Interest as set forth in Exhibit B of each Equipment Schedule. All
Rental Payments shall be paid to Lessor; or to such other assignee(s) to which Lessor has assigned
such Rental Payments as specified in Article XI, at such place as Lessor or such assignee(s) may
from time to time designate by written notice to Lessee. Lessee shall pay the Rental Payments
exclusively from moneys legally available therefor, in lawful money of the United States of
America.
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Section 5.2. Current Expense. The obligations of Lessee under this Lease, including its
obligation to pay the Rental Payments due with respect to any Equipment Group, in any Fiscal
Year for which this Lease is in effect, shall constitute a current expense of Lessee for such Fiscal
Year and shall not constitute an indebtedness of Lessee within the meaning of the Constitution
and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes or other
moneys, other than moneys lawfully appropriated from time to time by or for the benefit of
Lessee for this purpose and the proceeds or Net Proceeds of the Equipment, to the payment of any
Rental Payment or other amount coming due hereunder.
Section 5.3. Rental Pavments to be Unconditional. Except as provided in Section 4.2, the
obligation of Lessee to make Rental Payments or any other payments required hereunder shall be
absolute and unconditional in all events. Notwithstanding any disputes between Lessee and Lessor
or any other person, Lessee shall make all Rental Payments and other payments required
hereunder when due and shall not withhold any Rental Payment or other payment pending final
resolution of such dispute, nor shall Lessee assert any right of set-off or counterclaim against its
obligation to make such Rental Payments or other payments required under this Lease. Lessee's
obligation to make Rental Payments or other payments during the Lease Term shall not be abated
through accident or unforeseen circumstances. However, nothing herein shall be construed to
release Lessor from the performance of its obligations hereunder; and if Lessor should fail to
perform any such obligation, Lessee may institute such legal action against Lessor as Lessee may
deem necessary to compel the performance of such obligation or to recover damages therefor.
ARTICLE VI: INSURANCE AND NEGLIGENCE
Section 6.1. Liability Insurance. Upon ordering any Equipment Group and prior to receipt of
possession of the Equipment Group, Lessee shall take such measures as may be necessary to ensure
that any liability for injuries to or death of any person or damage to or loss of property arising
out of or in any way relating to the condition or the operation of the Equipment Group or any
party thereof, is covered by a blanket or other general liability insurance policy maintained by the
Lessee, with a coverage limit of not less than $1,000,000 per occurrence. The Net Proceeds of all
such insurance shall be applied toward extinguishment or satisfaction of the liability with respect
to which any Net Proceeds must be paid.
Section 6.2. Property Insurance. Upon receipt of possession of any Equipment Group, Lessee
shall have and assume the risk of loss with respect thereto. Lessee shall procure and maintain
continuously in effect during the Term of this Lease, all-risk insurance, subject only to the
standard exclusions contained in the policy, in such amount as will be at least sufficient so that a
claim may be made for the full replacement cost of any part of the Equipment damaged or
destroyed and to pay the applicable Purchase Option Price of the Equipment. Such insurance
may be provided by a rider to an existing policy or under a separate policy. Such insurance may
be written with customary deductible amounts acceptable to Lessor. The Net Proceeds of
insurance required by this Section shall be applied to the prompt repair, restoration or
replacement of the Equipment, or to the purchase of the Equipment, as provided in Section 6.7.
Any Net Proceeds not needed for those purposes shall be paid to Lessee.
Section 6.3. Worker's Compensation Insurance. If required by State law, Lessee shall carry
worker's compensation insurance covering all employees on, in, near or about the Equipment,
and upon request, shall furnish to the Lessor certificates evidencing such coverage throughout the
Term of this Lease.
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Section 6.4. Requirements For All Insurance. All insurance policies (or riders) required by
this Article shall be taken out and maintained with responsible insurance companies organized
under the laws of one of the states of the United States and qualified to do business in the State;
and shall contain a provision that the insurer shall not cancel or revise coverage thereunder
without giving written notice to the insured parties at least ten (10) days before the cancellation or
revision becomes effective. Each insurance policy or rider required by this Article VI shall name
Lessor or its assigns as an additional insured party and loss payee. Prior to delivery of the
Equipment to the Lessee, Lessee shall deposit with Lessor, policies (and riders) evidencing any
such insurance procured by it, or by a certificate or certificates of the respective insurers stating
that such insurance is in full force and effect. Before the expiration of any such policy or rider,
Lessee shall furnish to Lessor evidence that the policy has been renewed or replaced by another
policy conforming to the provisions of this Article.
Section 6.5. Self-Insurance. Notwithstanding the provisions of Sections 6.1 through 6.3, Lessee
may elect to meet the requirements of any such section through self-insurance provided by a
Qyalified Self-Insurance Program having coverage limits equal to or greater than those specified in
such Section. In such event, Lessee shall give Lessor notice of such election and provide to Lessor
a full, true and correct copy of all documents providing for the establishment and administration
of the Qyalified Self-Insurance Program and shall execute an addendum to this Lease. As used
herein, Qualified Self-Insurance Program means a program of self-insurance which has been
established by Lessee, or by Lessee and other political subdivisions of the State, pursuant to a State
law specifically authorizing the program, and which is funded in a manner similar to commercial
insurance or in a manner specified in such State law.
Section 6.6. Lessee' s Negligence. Lessee assumes all risks and liabilities, whether or not
covered by insurance, for loss or damage to any Equipment and for injury to or death of any
person or damage to any property, whether such injury or death be with respect to agents or
employees of Lessee or of third parties, and whether such property damage be to Lessee's property
or to the property of others, which is proximately caused by the negligent conduct of Lessee, its
officers, employees, and agents. Lessee hereby assumes responsibility for, indemnifies Lessor
against and agrees to reimburse Lessor for all liabilities, obligations, losses, damages, penalties,
claims, actions, costs, and expenses (including reasonable attorney's fees) of whatsoever kind and
nature, imposed on, incurred by or asserted against Lessor that in any way relate to or arise out of
a claim, suit, or proceedings based in whole or in part upon the negligent conduct of Lessee, its
officers, employees and agents, or based upon the possession, use, operation, condition, or storage
of the Equipment (unless caused by Lessor or its agents) to the maximum extent permitted by law.
Section 6.7. Damage to or Destruction of Equipment. If after delivery of any Equipment to
Lessee all or any part of the Equipment is lost, stolen, destroyed, or damaged beyond repair, Lessee
shall as soon as practicable after such event either: (a) replace the same at Lessee's sole cost and
expense with equipment of equal or greater value to the Equipment immediately prior to the time
of the loss occurrence, such replacement equipment to be subject to Lessor's reasonable approval,
whereupon such replacement shall be substituted in this Lease by appropriate endorsement; or (h)
pay the applicable Purchase Option Price of the Equipment Group to which such Equipment
belongs as set forth in Exhibit B. Lessee shall notifY Lessor of which course of action it will take
within fifteen (15) days after the loss occurrence. If Lessee fails or refuses to notifY Lessor within
the required period, Lessor may, at its option, declare the applicable Purchase Option Price of the
Equipment Group to which such Equipment belongs set forth in Exhibit B immediately due and
payable, and Lessee shall be obligated to pay the same. The Net Proceeds of all insurance payable
with respect to the Equipment shall be available to the Lessee and shall be used to discharge
Lessee's obligation under this Section. On payment of the Purchase Option Price with respect to
any Equipment Group, this Lease shall terminate with respect to such Equipment and Lessee
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thereupon shall become entitled to such Equipment AS IS, WITHOUT WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILIlY OR FITNESS FOR ANY
PARTICUIAR PURPOSE OR FITNESS FOR THE USE CONTEMPIATED BY LESSEE, except
that such Equipment shall not be subject to any lien or encumbrance created by or arising through
Lessor.
ARTICLE VII: OTHER OBLIGATIONS OF LESSEE
Section 7.1. Use: Permits. Lessee shall exercise due care in the installation, use, operation and
maintenance of the Equipment, and shall not install, use, operate, or maintain the Equipment
improperly, carelessly, in violation of any State and Federal Law or for a purpose or in a manner
contrary to that contemplated by this Lease. Lessee shall obtain all permits and licenses necessary
for the installation, operation, possession, and use of the Equipment. Lessee shall comply with all
State and Federal Laws applicable to the installation, use, possession and operation of the
Equipment, and if compliance with any such State and Federal Law requires changes or additions
to be made to the Equipment, such changes or additions shall made by Lessee at its expense.
Section 7.2. Maintenance of Eauipment by Lessee. Lessee shall, at its own expense, maintain,
preserve and keep the Equipment in good repair, working order and condition, and shall from
time to time make all repairs and replacements necessary to keep the Equipment in such
condition. Lessor shall have no responsibility for any of these repairs or replacements.
Section 7.3. Taxes. Other Governmental Charges and Utility Chanes. Except as expressly
limited by this Section, Lessee shall pay all taxes and other charges of any kind which are at any
time lawfully assessed or levied against or with respect to the Equipment, the Rental Payments or
any part thereof, or which become due during the Term of this Lease, whether assessed against
Lessee or Lessor. Lessee shall also pay when due all gas, water, steam, electricity, heat, power,
telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep
of the Equipment, and all special assessments and charges lawfully made by any governmental
boay for public improvements that may be secured by a lien on the Equipment; provided that
with respect to special assessments or other governmental charges that may lawfully be paid in
installments over a period of years, Lessee shall be obligated to pay only such installments as are
required to be paid during the Term of this Lease as and when the same become due. Lessee shall
not be required to pay any federal, state or local income, inheritance, estate, succession transfer,
gift, franchise, gross receipts, profit, excess profit, capital stock, corporate, or other similar tax
payable by Lessor, its successors or assigns, unless such tax is made in lieu of or as a substitute for
any tax, assessment or charge which is the obligation of Lessee under this Section.
Section 7.4. Advances. If Lessee shall fail to perform any of its obligations under this Article,
Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure,
including the advancement of money, and Lessee shall be obligated to repay all such advances on
demand, with interest at the rate of 18% per annum or the maximum rate permitted by law,
whichever is less, from the date of the advance to the date of repayment.
ARTICLE VIII: TITLE, SECURIlY INTEREST; LIENS
Section 8.1. Title. During the Term of this Lease with respect to any Equipment Group, and so
long as Lessee is not in default under Article XII, legal title to the Equipment Group and any and
all repairs, replacements, substitutions and modifications to it shall be in Lessee. Upon
termination of this Lease with respect to any Equipment Group pursuant to Section 42 or Article
XII hereof, full and unencumbered legal title to such Equipment Group shall pass to Lessor, and
Lessee shall have no further interest therein. In either of such events, Lessee shall execute and
deliver to Lessor such documents as Lessor may request to evidence the passage of legal title to
such Equipment Group to Lessor and the termination of Lessee's interest therein, and upon
request by Lessor shall deliver possession of the Equipment Group to Lessor in accordance with
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Section 12.3. Upon termination of this Lease with respect to any Equipment Group, through
exercise of Lessee's option to purchase pursuant to Article X or through payment by Lessee of all
Rental Payments and other amounts relating thereto, Lessor's security or other interest in such
Equipment Group shall terminate, and Lessor shall execute and deliver to Lessee such documents
as Lessee may request to evidence the termination of Lessor's security or other interest in such
Equipment Group.
Section 8.2. Security Interest. Lessee grants to Lessor a continuing, first priority security
interest in and to the Equipment, the proceeds thereof and all repairs, replacements, substitutions
and modifications thereto or thereof made pursuant to Section 8.5, in order to secure Lessee's
payment of all Rental Payments due during the Term of this Lease and the performance of all
other obligations herein to be performed by Lessee. Lessee will join with Lessor in executing such
financing statements or other documents and will perform such acts as Lessor may request to
establish and maintain a valid first lien and perfected security interest in the Equipment. If
requested by Lessor, Lessee shall conspicuously mark the Equipment with appropriate lettering,
labels or tags, and maintain such markings during the Term of this Lease, so as clearly to disclose
Lessor's security interest in the Equipment.
Section 8.3. Liens. During the Term of this Lease, Lessee shall not, directly or indirectly, create,
incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or
with respect to the Equipment, other than the respective rights of Lessor and Lessee as herein
provided and Permitted Encumbrances. Except as expressly provided in Section 7.3 and this
Article, Lessee shall promptly, at its own expense, take such action as may be necessary duly to
discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same
shall arise at any time. Lessee shall reimburse Lessor for any expense incurred by Lessor in order
to discharge or remove any such mortgage, pledge, lien charge, encumbrance or claim.
Section 8.4. Installation of Lessee' s EauiDment. Lessee may at any time and from time to
time, in its sole discretion and at its own expense, install other items of equipment in or upon the
Equipment, which items shall be identified by tags or other symbols affixed thereto as property of
Lessee, shall remain the sole property of Lessee, and may be modified or removed by Lessee at any
time provided that Lessee shall repair and restore any and all damage to the Equipment resulting
from the installation, modification or removal of any such items.
Section 8.5. Modification of Eauipment. Lessee shall, at its own expense, have the right to
make repairs to the Equipment and to make repairs ,replacements, substitutions and modifications
to all or any of the parts thereof. All such work and any part or component used or installed to
make a repair or as a replacement, substitution or modification, shall thereafter comprise part of
the Equipment and be subject to the provision of this Lease. Such work shall not in any way
damage the Equipment or cause it to be used for purposes other than those authorized under the
provisions of State and Federal law or those contemplated by this Lease; and the Equipment, upon
completion of any such work shall be of a value which is not less than the value of the Equipment
immediately prior to the commencement of such work.
Section 8.6. Personal Property. The Equipment is and shall at all times be and remain
personal property, not withstanding that the Equipment or any part thereof may be or hereafter
become in any manner affixed or attached to or embedded in or permanently rested upon real
property of any building thereon, or attached in any manner to what is permanent by means of
cement, plaster, nails, bolts, screws, or otherwise.
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ARTICLE IX: WARRANTIES
Section 9.1. Selection of Eauipment. The Equipment and the Contractor b.ave been selected
by Lessee, and Lessor shall have no responsibility in connection with the selection of the
Equipment, its suitability for the use intended by Lessee, the acceptance by the Contractor or its
sales representative of the order to be submitted, or any delay or failure by the Contractor or its
sales representative to manufacture, deliver or install the Equipment for use by Lessee. Lessee
authorizes Lessor to add the serial number of the Equipment to Exhibit A when available.
Section 9.2. Installation and Maintenance of Equipment. Lessor shall have no obligation to
install, erect, test, inspect, service or maintain the Equipment under any circumstances, but such
actions shall be the obligation of Lessee or the Contractor.
Section 9.3. Contractor' s Warranties. Lessor hereby assigns to Lessee for and during the
Term of this Lease all of its interest, if any, in all Contractor's warranties and guarantees, express
or implied, issued on or applicable to the Equipment, and Lessor hereby authorizes Lessee to
obtain the customary services furnished in connection with such warranties and guarantees at
Lessee's expense.
Section 9.4. Patent Infringement. Lessor hereby assigns to Lessee for and during the Term of
this Lease, all of its interest, if any, in patent indemnity protection provided by any Contractor
with respect to the Equipment. Such assignment of patent indemnity protection by Lessor to
Lessee shall constitute the entire liability of Lessor for any patent infringement by Equipment
furnished pursuant to this Lease.
Section 9.5. Disclaimer of Warranties. THE EQUIPMENT IS DELNERED AS IS, AND
LESSOR MAKES NO WARRAN1Y OR REPRESENTATION, EITHER EXPRESS OR IMPUED,
AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABIU1Y OR FITNESS FOR ANY
PARTICUlAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE
EQUIPMENT, OR ANY OTHER REPRESENTATION OR WARRAN1Y WITH RESPECf TO
THE EQUIPMENT. IN NO EVENT SHAll LESSOR BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES IN CONNECl10N WITH OR ARISING OUT OF THIS
LEASE OR THE EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT.
ARTICLE X: OPTION TO PURCHASE
Section 10.1. When Available. Lessee shall have the option to purchase Lessor's interest in
any Equipment Group on any Payment Date relating thereto for the then applicable Purchase
Option Price set forth in the page of Exhibit B relating thereto, but only if Lessee is not in default
under this Lease, and only in the manner provided in this Article.
Section 10.2. Exercise of Option. Lessee shall give notice to Lessor of its intention to exercise
its option with respect to any Equipment Group not less than thirty (30) days prior to the
Payment Date on which the option is to be exercised and shall deposit with Lessor on the date of
exercise an amount equal to all Rental Payments and any other amounts relating to such
Equipment Group then due or past due (including the Rental Payment relating thereto due on the
Payment Date on which the option is to be exercised) and the applicable Purchase Option Price
set forth in the Equipment Schedule relating thereto. The closing shall be on the Payment Date
on which the option is to be exercised at the office of Lessor.
Section 10.3. Release of Lessor's Interest. Upon exercise of the purchase option with respect
to any Equipment Group by Lessee, Lessor shall conveyor release to Lessee, all of its right, title,
and/or interest in and to the Equipment Group by delivering to Lessee such documents as Lessee
deems necessary for this purpose.
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ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment bv Lessor. Lessor shall not assign its obligations under this Lease,
and no purported assignment thereof shall be effective. All of Lessor's right, title and/or interest
in and to any Equipment Schedule, Equipment Group, the Rental Payments and other amounts
due with respect thereto, and the right to exercise all rights under this Lease relating to such
Equipment Schedule and Group may be assigned and reassigned in whole or in part to one or
more assignees or subassignees by Lessor at any time, without the consent of Lessee. No such
assignments shall be effective as against Lessee unless and until the assignor shall have filed with
Lessee a copy or written notice thereof identifying the assignee. During the Lease Term, Lessee
shall keep a complete and accurate record of all such assignments. In the event Lessor assigns
participations in its right, title and/or interest in and to any Equipment Schedule, Equipment
Group, the Rental Payments and other amounts due with respect thereto, and the rights granted
under this Lease relating thereto, such participants shall be considered to be Lessor with respect to
their participated shares thereof.
Section 11.2. Assignment and Subleasing bv Lessee. Neither this Lease nor Lessee's interest
in an Equipment Group may be sold, assigned, subleased, transferred, pledged or mortgaged by
Lessee without the written consent of Lessor. However, Equipment may be subleased by Lessee to
a State agency or other political subdivision for the performance of essential government services
by such agency or subdivision without the consent of Lessor, provided that: (a) this Lease and the
obligation of Lessee to make Rental Payments hereunder, shall remain obligations of Lessee and
(b) the sublessee assumes the obligations of Lessee with respect to the Equipment subleased. Lessee
shall immediately furnish to Lessor a true and complete copy of such sublease. No sublease shall
cause the interest component of the Rental Payments due with respect to the Equipment Group to
become includable in gross income of the recipient for federal income tax purposes.
ARTICLE XII: EVENTS OF DEFAULTS AND REMEDIES
Section 12.1. Events of Default Defined. The following shall be "events of default" under this
Lease with respect to any Equipment Group and the Equipment Schedule relating thereto, and the
terms "events of default" and "default" shall mean, whenever they are used in this Lease, with
respect to any Equipment Group, anyone or more of the following events:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid
under this Lease with respect to any Equipment Group at the time specified herein and the
continuation of said failure for a period of ten (10) days.
(b) Failure by Lessee to observe and perform any covenant, condition, or agreement on its
part to be observed or performed with respect to any Equipment Group, other than as referred to
in Clause (a) of this Section, for a period of thirty (30) days after written notice specifying such
failure and requesting that it be remedied has been given to Lessee by Lessor, unless Lessor shall
agree in writing to an extension of such time prior to its expiration; provided, however, if the
failure stated in the notice cannot be corrected within the applicable period, Lessor will not
unreasonably withhold its consent to an extension of such time if corrective action is instituted by
Lessee within the applicable period and diligently pursued until the default is corrected.
(c) The determination by Lessor that any representation or warranty made by Lessee in
this Lease was untrue in any material respect upon execution of this Lease or any Equipment
Schedule.
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(d) The filing by Lessee of a voluntary petition in bankruptcy, or failure by Lessee
promptly to lift any execution, garnishment or attachment of such consequence as would impair
the ability of Lessee to carry on its governmental functions or adjudication of Lessee as a
bankrupt, or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an
agreement of composition with creditors, or the approval by a court of competent jurisdiction of a
petition applicable to Lessee in any proceedings instituted under the provisions of the United
States Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted.
An event of default with respect to one Equipment Group shall not constitute an event of default
with respect to any other Equipment Group.
Section 12.2. Remedies on Default. Whenever any event of default referred to in Section 12.1
hereof shall have happened and be continuing with respect to any Equipment Group, Lessor shall
have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor, with or without terminating this Lease with respect to such Equipment Group,
may declare all Rental Payments due or to become due with respect to such Equipment Group
during the Fiscal Year in effect when the default occurs to be immediately due and payable by
Lessee, whereupon such Rental Payments shall be immediately due and payable.
(b) Lessor, with or without terminating this Lease with respect to such Equipment Group,
may repossess the Equipment Group by giving Lessee written notice to deliver such Equipment
Group to Lessor, whereupon Lessee shall return the Equipment Group in the manner provided in
Section 12.3; or in the event Lessee fails to do so within ten (10) days after receipt of such notice,
Lessor may enter upon Lessee's premises where the Equipment Group is kept and take possession
of the Equipment Group and charge Lessee for costs incurred in repossessing the Equipment
Group, including reasonable attorney's fees. Lessee hereby expressly waives any damages
occasioned by such repossession. If the Equipment Group or any portion of it has been destroyed
or'damaged bcyond repair, Lessee shall pay the applicable Purchase Option Price of the
Equipment Group as set forth in the Equipment Schedule relating thereto (less credit for Net
Proceeds), to Lessor. Notwithstanding the fact that Lessor has taken possession of the Equipment
Group, Lessee shall continue to be responsible for the Rental Payments due with respect thereto
during the Fiscal Year then in effect. If this Lease has not been terminated with respect to such
Equipment Group, Lessor shall return the Equipment to Lessee at Lessee's expense when the event
of default is cured.
(c) If Lessor terminates this Lease with respect to such Equipment Group and takes
possession of such Equipment contained therein, Lessor shall within sixty (60) days thereafter use
its best efforts to sell such Equipment or any portion thereof in a commercially reasonable manner
at public or private sale in accordance with applicable State laws. Lessor shall apply the proceeds
of such sale to pay the following items in the following order: (i) all costs incurred in securing
possession of the Equipment Group; (ii) all expenses incurred in completing the sale; (iii) the
applicable Purchase Option Price of the Equipment Group; and (iv) the balance of any Rental
Payments with respect to such Equipment Group owned by Lessee during the Fiscal Year then in
effect. Any sales proceeds remaining after the requirements of Clauses (i), (ii), (iii), and (iv) have
been met shall be paid to Lessee.
(d) Lessor may take any other remedy available at law or in equity with respect to such
event of default, including those requiring Lessee to perform any of its obligations hereunder or to
pay any moneys due and payable to Lessor hereunder.
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Section 12.3. Return of Equipment. Upon the expiration or termination of this Lease with
respect to any Equipment Group prior to the payment of all Rental Payments in accordance with
Exhibit B, Lessee shall return such Equipment Group to Lessor in the condition, repair,
appearance and working order required in Section 7.2, in the following manner as may be
specified by Lessor: (a) by delivering the Equipment Group, at Lessee's cost and expense, to such
place within the State as Lessor shall specifY; or (b) by loading such portions of the Equipment
Group as are considered movable, at Lessee's cost and expense, on board such carrier as Lessor
shall specifY and shipping the same, freight prepaid, to the place specified by Lessor. If Lessee
refuses to return the Equipment Group in the manner designated, Lessor may repossess the
Equipment Group and charge to Lessee the costs of such repossession or pursue any remedy
described in Section 12.2.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this
Article is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Lease. 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 by Lessor or its assignee.
Section 12.5. Agreement to Pay Attorney's Fees and Expenses. In the event either party to
this Lease should default under any of the provisions hereof and the nondefaulting party should
employ attorneys and/or incur other expenses for the collection of moneys or for the enforcement
of performance or observance of any obligation or agreement on the part of the defaulting party
herein contained, the defaulting party agrees that it will on demand therefor pay to the
nondefaulting party the reasonable fees of such attorneys and/or such other reasonable expenses so
incurred by the nondefaulting party.
Section 12.6. Late Charge. Whenever any event of default referred to in Section 12.1, Clause
(a) hereof shall have happened and be continuing with respect to any Equipment Group, Lessor
shall have the right, at its option and without any further demand or notice, to require a late
payment charge for each thirty (30) day period or part thereof during which such event or default
occurs equal to four percent (4%) of the delinquent amount, and Lessee shall be obligated to pay
the same immediately upon receipt of Lessor's written invoice therefor; provided, however, that
this Section 12.6 shall not be applicable if or to the extent that the application thereof would
affect the validity of this Lease.
ARTICLE XIII: ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, legal opinions or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the
United States mail in registered form with postage fully prepaid to the addresses specified on the
execution page hereof, provided that Lessor and Lessee, by notice given hereunder, may designate
different addresses to which subsequent notices, certificates, legal opinions or other
communications will be sent.
Section 13.2. Financial Information. During the Term of this Lease, Lessee annually will
provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing
Fiscal Year and such other financial information relating to the ability of Lessee to continue this
Lease as may be requested by Lessor or its assignee.
Section 13.3. Binding Effects. This Lease shall inure to the benefit of and shall be binding
upon Lessor and Lessee and their respective successors and assigns.
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Section 13.4. Severabilitv. In the event any provision of this Lease shall be held invalid or
unenforceable by any court or competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provisions hereof.
Section 13.5. Amendments. Changes and Modifications. This Lease may be amended or any
of its terms modified only by written document duly authorized, executed, and delivered by Lessor
and Lessee.
Section 13.6. Caotions. The captions or headings in this Lease are for convenience only and in
no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses
of this Lease.
Section 13.7. Further Assurances and Corrective Instruments. Lessor and Lessee agree that
they will, from time to time, execute, acknowledge and deliver, such supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate or incorrect
description of the Equipment hereby leased or intended so to be, or for otherwise carrying out the
expressed intention of this Lease.
Section 13.8. Execution in Counterparts. This Lease may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one
and the same instrument. Upon Lessor' s request, Lessee agrees to execute additional counterparts
of the Lease that may be required for the assignees of Equipment Schedules issued hereafter.
Section 13.9. Aoolicable Law. This Lease shall be governed and construed with the laws of the
State.
Section 13.10. Financing Statement. A carbon, photographic or other reproduction of this
Lease or of any financing statements signed by Lessee is sufficient as a financing statement in any
st~te to perfect the security interests granted in this Lease.
IN WITNESS WHEREOF, Lessor has caused this Lease to be executed in its corporate name by its
duly authorized officer; and Lessee has caused this Lease to be executed in its name by its duly
elected officer, as of the date first above written.
CITY OF SAN BERNARDINO
Lessee ~~
~87~ IJvH
ACCESS PUBLIC FUNDING
Lessor
By:
--:v-
Its: Ma yor
Its:
Date:
2-27-95
Date:
7- //('/"15:'
Approved as to form and content, as amended.
James F. Penman, City Attorney
By: ~~_7 -&~
{J
ATTEST:
~~~
Rae 1 Clar~ Clty Clerk
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