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HomeMy WebLinkAbout1995-169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 95-169 RESOLUTION OF THE CITY OF SAN BERNARDINO AWARDING A LEASE PURCHASE AGREEMENT TO KOCH FINANCIAL CORPORATION FOR THE FINANCING OF THREE (3) EACH, AUTOMATED FRONT LOADING REFUSE TRUCK CAB AND CHASSIS AND BODIES, TO BE UTILIZED BY THE PUBLIC SERVICES DEPARTMENT IN ACCORDANCE WITH BID SPECIFICATION F-95-20 AND F-95- 21. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. That Koch Financial corporation is the lowest and best responsible bidder for the financing of three (3) each, front loading refuse truck cab and chassis and bodies in accordance with Bid Specification F-95-20 and F-95-21 for the amount of $374,512.06 at 5.845% interest payable six (6) months in arrears over five (5) years for a total payment of $437,307.70; pursuant to this determination, the Purchasing Manager is hereby authorized and directed to issue Schedule 95-002 addendum to Master Lease Purchase Agreement Number 9037, for said financing of three (3) each, automated front loading refuse truck cab and chassis and bodies to said lowest and best responsible bidder; such award shall only be effective upon the issuance of a Schedule 95-002 Addendum to Master Lease Purchase Agreement Number 9037 by the Purchasing Manager and all other quotations therefore are hereby rejected. SECTION 2. The authorization to execute the above referenced Lease Purchase Agreement is rescinded if the parties to the agreement fail to execute it within sixty (60) days of the passage of this resolution. 1 c"'_// q I v {;, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 . RESOLUTION OF THE CITY OF SAN BERNARDINO AWARDING SCHEDULE A LEASE PURCHASE AGREEMENT TO KOCH FINANCIAL CORPORATION FOR THE FINANCING OF THREE (3) EACH, AUTOMATED FRONT LOADING REFUSE TRUCK CAB AND CHASSIS AND BODIES, TO BE UTILIZED BY THE PUBLIC SERVICES DEPARTMENT IN ACCORDANCE WITH BID SPECIFICATION F-95-20 AND F-95- 21. 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 5th day of June , 1995, by the following vote, to wit: COUNCIL MEMBERS ABSTAIN ABSENT AYES NAYS NEGRETE x CURLIN x HERNANDEZ x OBERHELMAN x DEVLIN x POPE-LUDLAM x MILLER x f2~~ CIT'r CLERK of The foregoing resolution is hereby approved this June 1995. 71L day -~ -----~ / , ~ / ?'7".n-Z U .c::,?L'.-C\... Tom Minor, Mayor City of San Bernardino Approved as to form and legal content: JAMES F. PENMAN City Attorney n By: Ik"V>v<.7 I / / VI (I J~"V~ 2 95-169 MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT Master Equipment Lease/Purchase Agreement (this Master Equipment Lease/Purchase Agreement, including all exhibits and schedules hereto whether currently in existence or hereafter executed, being hereinafter referred to as the "Agreement") dated as of . and entered into between Koch Financial Corporation, a corporation ("Lessor"), and the City of San Bernardino, a body corporate and politic existing under the laws of the State of California ("Lessee"). WITNESSETH: WHEREAS, Lessee desires to lease certain equipment from the Lessor described in the schedules to this Agreement, substantially in the form of Exhibit B hereto, that currently exist or are hereafter executed from time to time by the parties hereto (such schedules, whether now or hereafter executed, are hereby incorporated herein and are hereinafter collectively referred to as the "Schedules," and the items of equipment leased to Lessee hereunder, together with all substitutions, proceeds, replacement parts, repairs, additions, attachments, accessories and replacements thereto, thereof or therefor, are hereinafter collectively referred to as the "Equipment") subject to the terms and conditions of and for the purposes set forth in this Agreement; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to or deleted from the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein; and WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement for the purposes set forth herein; NOW, THEREFORE, for and in consideration ofthe premises hereinafter contained, the parties hereby agree as follows: ARTICLE I Section 1.01. Defmitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Agent" means any agent for the Registered Owners, if any, to which all or a portion of Lessor's right, title and interest in, to and under the Agreement and any Schedule or any Equipment may be assigned for the benefit of the Registered Owners. "Agreement" means this Master Equipment Lease/Purchase Agreement, including the Schedules, the Tax Designations and Certificate as to Arbitrage and any other schedule, exhibit or escrow agreement made a part hereof by the parties hereto, whether currently in existence or hereafter executed, together with any amendments to the Agreement pursuant to Section 13,06. "Code" means the Internal Revenue Code of 1986, as amended, "Commencement Date" is the date when the term of this Agreement and Lessee's obligation to pay rent commence, which date shall be the earlier of (i) the date on which the Equipment listed in a Schedule is accepted by Lessee in the manner described in Section 5.01 in an Acceptance Certificate substantially in the form of Exhibit D hereto, or (ii) the date on which sufficient moneys to purchase the Equipment listed in a Schedule is deposited for that purpose with an escrow agent "Equipment" means the property listed in the Schedules and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.0 I or Article X. Whenever reference is made in this Agreement to Equipment listed in a Schedule, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment "Event of Default" means an Event of Default described in Section 12.0 I. "Lease Participation Certificates" means certificates evidencing a right to receive a pro rata share of Rental Payments and Purchase Price Payments. "Lease Term" means the Original Term and all Renewal Terms, "Lessee" means the entity described as such in the first paragraph of this Agreement, its successors and its assigns. 41"'_/;."" .' '", " "Lessor" means the entity described as such in the first paragraph of this Agreement, its successors and its assigns. "Original Term" means the period from the Commencement Date until the end of the budget year of Lessee in effect at the Commencement Date. "Purchase Price" means, with respect to the Equipment listed on any Schedule, the amount that Lessee may, in its discretion, pay to Lessor to purchase such Equipment. "Registered Owners" means the registered owners of Lease Participation Certificates. "Renewal Terms" means the renewal terms of this Agreement, each having a duration of one year and a term coextensive with Lessee's budget year, "Rental Payments" means the basic rental payments payable by Lessee pursuant to Section 4.01, "Rental Payment Period" means the period beginning on the day a Rental Payment is due and ending the day before the next Rental Payment is due. The first Rental Payment Period for each Schedule shall begin on the Commencement Date for such Schedule in all cases. If Rental Payment Periods are monthly, subsequent Rental Payment Periods shall begin on the same day of each month after the Commencement Date. If Rental Payment Periods are quarterly, subsequent Rental Payment Periods shall begin on the same day of each third month after the Commencement Date. If Rental Payment Periods are semiannual, subsequent Rental Payment Periods shall begin on the same day of each sixth month after the Commencement Date, If Rental Payment Periods are annual, subsequent Rental Payment Periods shall begin on the anniversary of the Commencement Date in each year. If the Commencement Date is the 29th, 30th or 31st day of a month, any subsequent Rental Payment Period that would otherwise begin on the 29th, 30th or 31 st day of a month that does not include such a date shall begin on the last day of that month. "Schedule" means any schedule to this Agreement, substantially in the form of Exhibit B hereto, executed from time to time by the parties hereto, "State" means the state in which Lessee is located. "Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing such Equipment. ARTICLE II Section 2.01. Renresentations and Covenants of I,essee. Lessee represents, covenants and warrants for the benefit of Lessor and any Registered Owners (as hereinafter defined) as follows: (a) Lessee is a public body corporate and politic duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder. (b) Lessee has duly authorized the execution and delivery of this Agreement by proper action by its governing body at a meeting duly called, regularly convened and attended throughout by the requisite majority of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement. ( c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (e) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment listed on the Schedules that currently exist. 2 45' _/t.L1 (I) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. (g) Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing budget year and such other financial information relating to the ability of Lessee to continue this Agreement as may be requested by Lessor. (h) Lessee has an immediate need for the Equipment listed on the Schedules that currently exist and expects to make immediate use of the Equipment listed on the Schedules that currently exist. Lessee's need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish in the foreseeable future induding the maximum Lease Term applicable to such item. ARTICLE III Section 3.0 I, Lease of Eouipment. Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor, the Equipment in accordance with this Agreement and the Schedule for such items of Equipment for the Lease Term, The Lease Term may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for an additional Renewal Term up to the maximum Lease Term set forth in said Schedule, At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue this Agreement for the next Renewal Term unless Lessee shall have terminated this Agreement pursuant to Section 3,03 or Section 10,01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in said Schedule, Section 3,02. Continuation of Lease Term, Lessee intends, subject to Section 3.03, to continue the Lease Term through the Original Term and all Renewal Terms and to pay the Rental Payments hereunder. Lessee reasonably believes that legally available funds in an amount sufficient to make all Rental Payments during the entire Lease Term can be obtained. Lessee further intends to do all things lawfully within its power to obtain and maintain funds from which the Rental Payments may be made, induding making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, to have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request is not approved. Section 3.03. Nonannropriation. Lessee is obligated only to pay such Rental Payments under this Agreement as may lawfully be made from funds budgeted and appropriated for that purpose during Lessee's then current budget year. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments following the then current Original Term or Renewal Term, this Agreement shall be deemed terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination at least 90 days prior to the end of the then current Original Term or Renewal Term, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term, If this Agreement is terminated in accordance with this Section, Lessee agrees to peaceably deliver the Equipment to Lessor at the location(s) to be specified by Lessor. Section 3.04, Nonsubstitution. To the extent permitted by law, Lessee agrees that if this Agreement is terminated in accordance with Section 3.03, Lessee will not purchase, Lease or rent equipment performing functions similar to those performed by the Equipment for a period of90 days following the end of the then current Original Term or Renewal Term; provided this restriction shall not be applicable in the event the Equipment shall be sold, released or otherwise disposed of by Lessor and the amount received from such disposition, less all costs of such sale or disposition, is sufficient to pay the then applicable Purchase Price of all Schedules. This Section shall remain in full force and effect notwithstanding the termination of this Agreement. Section 3.05. Conditions to Lessor's Performance Under Schedules. As a prerequisite to the performance by Lessor of any of its obligations pursuant to the execution and delivery of any Schedule, Lessee shall deliver to Lessor the following: (a) A Municipal Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor. (b) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit A respecting such Schedule and otherwise satisfactory to Lessor. 3 ;';;_/1" a (c) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 7.02. (d) Such other items, if any, as are set forth in such Schedule or are reasonably required by Lessor. This Agreement is not a commitment by Lessor to enter into any Schedule not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Schedule, it being understood that whether Lessor enters into any proposed Schedule shall be a decision solely within Lessor's discretion. Lessee will cooperate with Lessor in Lessor's review of any proposed Schedule, Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Schedule, Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee. ARTICLE IV Section 4,01. Rental Payments. Lessee shall promptly pay Rental Payments, exclusively from legally available funds, in lawful money of the United States of America to Lessor on the Commencement Date and on the first day of each Rental Payment Period thereafter, in such amounts and on such dates as set forth in the Schedules. Section 4.02. Rental Payments to Constitute a Current Exnense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or moneys of Lessee, Section 4.03. RENTAL PAYMENTS TO BE UNCONDITIONAL. EXCEPT AS PROVlDED IN SECT10N 3,03, THE OBLIGATIONS OF LESSEE TO MAKE RENTAL PAYMENTS AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED HEREIN SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON, INCLUDING WITHOUT LIMITATION ANY FAILURE OF THE EQUIPMENT TO BE DELIVERED OR INSTALLED, ANY DEFECTS, MALFUNCTIONS, BREAKDOWNS OR INFIRMITIES IN THE EQUIPMENT OR ANY ACClDENT, CONDEMNATION OR UNFORESEEN CIRCUMSTANCES, Section 4.04, Interest Comnonent. A portion of each Rental Payment is paid as, and represents payment of, interest, and each Schedule hereto sets forth the interest component of each Rental Payment specified in such Schedule during the Lease Term, ARTICLE V Section 5,01, Deliverv Installation and Acceptance of Equipment. Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in the Schedules and pay any and all delivery and installation costs in connection therewith, When the Equipment listed in any Schedule has been delivered and installed, Lessee shall immediately accept such Equipment and evidence said acceptance by executing and delivering to Lessor an acceptance certificate in the form attached hereto as Exhibit D. Section 5.02. Enioyment of Rauinment. Lessor shall provide Lessee with quiet use and enjoyment of the Equipment during the Lease Term, and Lessee shall peaceably and quietly have, hold and enjoy the Equipment during the Lease Term, without suit, trouble or hindrance from Lessor, except as otherwise expressly set forth in this Agreement. No Registered Owner shall interfere with such quiet use and enjoyment during the Lease Term so long as Lessee is not in default under this Agreement. Section 5,03, Location'Inspection, Once installed, no item of the Equipment will be moved from the location specified for it in the Schedule on which such item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment. 4 :/-"":'- :'~ Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Agreement. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative or judicial body; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights under this Agreement. Lessee agrees that it will, at Lessee's own cost and expense, maintain, preserve and keep the Equipment in good repair and working order. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. Upon the request of Lessor, Lessee will enter into a maintenance contract for the Equipment with Vendor. ARTICLE V1 Section 6,0 I. Title to the Equipment. Upon acceplance of the Equipment by Lessee, title to the Equipment shall vest in Lessee subject to Lessor's rights under this Agreement; provided that title shall thereafter immediately and without any action by Lessee vest in Lessor, and Lessee shall immediately surrender possession of the Equipment to Lessor, upon (a) any termination of this Agreement other than termination pursuant to Section 10.0 I or (b) the occurrence of an Event of Default. It is the intent of the parties hereto that any transfer of title to Lessor pursuant to this Section shall occur automatically without the necessity of any bill of sale, certificate of title or other instrument of conveyance. Lessee shall, nevertheless, execute and deliver any such instruments as Lessor may request to evidence such transfer. Section 6,02, Security Interest. To secure the payment of all of Lessee's obligations under this agreement, Lessee hereby grants to Lessor a security interest constituting a first lien on the Equipment and on all additions, attachments, accessions thereto, substitutions therefor and proceeds therefrom. Lessee agrees to execute such additional documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain its security interest and the security interest of any assignee of Lessor in the Equipment. Section 6,03, Personal Properly. The Equipment is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon, Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building, ARTICLE VII Section 7,0 I. Liens Taxes, Other Governmental Charges and Utility Char~es, Lessee shall keep the Equipment free of all levies, liens and encumbrances except those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. Ifthe use, possession or acquisition of the Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to the Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the Lease Term. Section 7,02, Insurance. At its own expense, Lessee shall maintain (a) casualty insurance insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the then applicable Purchase Price of the Equipment, (b) liability insurance that protects Lessor from liability in all events in form and amount satisfactory to Lessor and (c) worker's compensation coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may self-insure against the risks described in clauses (a) and (b). Lessor hereby acknowledges that the Lessee shall self-insure against risk described herein, Lessee shall furnish to Lessor evidence of such self-insurance coverage throughout the Lease Term, The Lessee shall not materially modify or cancel such self-insurance coverage without first giving written notice thereof to Lessor at least 10 days in advance of such cancellation or modification. 5 a ,!:- /ie- '? , Section 7,03. Advances, In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at the rate of 18% per annum or the maximum amount permitted by law, whichever is less. ARTICLE VllI Section 8,01. Dama~e, Destruction and Condemnation. If (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any govemmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment, unless Lessee shall have exercised its option to purchase the Equipment pursuant to Section 10.01. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. Section 8.02 Insufficiency of Net Proceeds, If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pursuant to Section 10.01 purchase Lessor's interest in the Equipment and any other Equipment listed in the same Schedule. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing Lessor's interest in the Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV. ARTICLE IX Section 9,01 DISCLAIMER OF WARRANTIES. LESSOR MAKES NO WARRANTY OR REPRESENTATION, ElTHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR WARRANTY WITH RESPECT THERETO. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE EXISTENCE, FURNISHING, FUNCTIONING OR LESSEE'S USE OF ANY ITEM, PRODUCT OR SERVICE PROVIDED FOR IN THIS AGREEMENT. Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term, so long as Lessee shall not be in default hereunder, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against the Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties by the Vendor of the Equipment. ARTICLE X Section 10.0 I. Purchase Ontion. Lessee shall have the option to purchase Lessor's interest in all of the Equipment listed in any Schedule, upon giving written notice to Lessor at least 60 days before the date of purchase, at the following times and upon the following terms: (a) On the date of the last Rental Payment set forth in such Schedule (assuming this Agreement is renewed at the end of the Original Term and each Renewal Term), if the Agreement is still in effect on such day, upon payment in full of Rental Payments due on such Schedule and the payment of One (1) Dollar to Lessor; 6 '-',<- /-? (b) On the Rental Payment Dates specified in the Schedules hereto, upon payment in full of the Rental Payments then due hereunder plus the then applicable Purchase Price plus $1.00 to Lessor; or (c) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in such Schedule, on the day specified in Lessee's notice to Lessor or its exercise of the purchase option upon payment in full to Lessor of the Rental Payments then due under such Schedule plus the then applicable Purchase Price set forth in such Schedule, ARTICLE XI Section 11.01. Assignment bv Lessor. Lessor's right, title and interest in, to and under this Agreement and the Equipment may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor and, to the extent of its interest, by any Registered Owner, without the necessity of obtaining the consent of Lessee; provided that (a) any assignment, other than an assignment to or by a Registered Owner, shall not be effective until Lessee has received written notice, signed by the assignor, of the name, address and tax identification number of the assignee, and (b) any assignment to or by a Registered Owner shall not be effective until it is registered on the registration books kept by the Agent as agent for Lessee, Lessee shall retain all such notices as a register of all assignees (other than Registered Owners) and shall make all payments to the assignee or assignees designated in such register or, in the case of Registered Owners, to the Agent Lease Participation Certificates may be executed and delivered by the Agent to Registered Owners, if any, Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor or any assignee to protect its interests in the Equipment and in this Agreement and Schedule. Lessee shall not have the right to and shall not assert against any assignee or Registered Owner any claim, counterclaim or other right Lessee may have against Lessor. Assignments in part may include without limitation assignment of all or a portion of Lessor's right, title and interest in, to and under the Equipment listed in a particular Schedule and all rights in, to and under the Agreement related to such Equipment The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Schedule, but such option does not permit the Assignment of less than all of Lessor's interests in all of the Equipment listed in a single Schedule that is at the time subject to this Agreement Section 11,02. Assi~nment and Subleasing bv Lessee. None of Lessee's right, title and interest in, to and under this Agreement and in the Equipment may be assigned or encumbered by Lessee for any reason; except that Lessee may sublease all or part of the Equipment if Lessee obtains the prior written consent of Lessor and an opinion of nationally recognized counsel in the area of tax exempt municipal obligations satisfactory to Lessor that such subleasing will not adversely affect the exclusion of the interest components of the Rental Payments from gross income for federal income purposes, Any such sublease of all or part of the Equipment shall be subject to this Agreement and the rights of the Lessor in, to and under this Agreement and the Equipment ARTICLE Xli Section 12.01. Events of Default Defined. Subject to the provisions of Section 3.03, any of the following events shall constitute an "Event of Default" under this Agreement: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time specified herein; (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, 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) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or its execution, delivery or performance shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made; (d) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (Ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (Iii) make a general assignment for the benefit of creditors, (iv) have an order for relief 7 'i.-_ "., entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (e) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days. Section 12,02, Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments and other amounts payable by Lessee under this Agreement to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating this Agreement, Lessor may enter the premises where any Equipment is located and retake possession of the Equipment or require Lessee at Lessee's expense to promptly return any or all of the Equipment to the possession of Lessor at such place within the United States as Lessor shall specifY, and sell or lease the Equipment or, for the account of Lessee, sublease the Equipment, continuing to hold Lessee liable for the difference between (I) the Rental Payments and other amounts payable by Lessee hereunder to the end of the then current Original Term or Renewal Term and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under this Agreement, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing the Equipment and all brokerage, auctioneers and attorneys' fees); and (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under this Agreement or as the owner of any or all of the Equipment In addition, whenever an Event of Default exists with respect to any Rental Payment required by a particular Schedule or with respect to any other payment, covenant, condition, agreement, statement, representation or warranty set forth in such Schedule or applicable to such Schedule or the Equipment listed therein, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Schedule and other amounts payable by Lessee under the Agreement to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating this Agreement, Lessor may enter the premises where the Equipment listed in such Schedule is located and retake possession of such Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specifY, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable for the difference between (i) the Rental Payments payable by Lessee pursuant to such Schedule and other amounts related to such Schedule or the Equipment listed therein that are payable by Lessee hereunder to the end of the then current Original Term or Renewal, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under this Agreement, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees). The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities under the Agreement related to any other Schedule or the Equipment listed therein; and (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under this Agreement or as the owner of any or all of the Equipment. Section 12.03, No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement now or hereafter existing at law or in equity, 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 or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice as may be required in this Article, 8 95-/~O Section 12.04. Apolication of Moneys. Any net proceeds from the exercise of any remedy hereunder (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attorney's fees) shall be applied as follows: (a) If such remedy is exercised solely with respect to a single Schedule, Equipment listed in such Schedule or rights under the Agreement related to such Schedule, then to amounts due pursuant to such Schedule and other amounts related to such Schedule or such Equipment. (b) If such remedy is exercised with respect to more than one Schedule, Equipment listed in more than one Schedule or rights under the Agreement related to more than one Schedule or Equipment listed in more than one Schedule, then to amounts due pursuant to such Schedules pro rata. ARTICLE XIII Section 13,0 I. ~, All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party), to any assignee at its address as it appears on the registration books maintained by Lessee or by the Agent and to any Registered Owner at its address as it appears on the registration books maintained by the Agent. Section 13,02, Release and Indemnification, To the extent pennitted by law, Lessee shall indemnify, protect, hold hannless, save and keep harmless Lessor from and against any and all liability, obligation, loss, claim tax and damage whatsoever, regardless of cause thereof, and all expenses in connection therewith (including, without limitation, counsel fees and expenses, penalties connected therewith imposed on interest received) arising out of or as (a) result of the entering into of this Agreement, (b) the ownership of any item of the Equipment, (c) the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Equipment, (d) or any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (e) the breach of any covenant herein or any material misrepresentation contained herein. The indemnification arising under this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the tennination of the Lease Tenn for any reason. Section 13.03. BindinQ Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 13,04, Severability, In the event any provision of this Agreement sball be held invalid or unenforceable by any court of competent jurisdiction, sucb bolding shall not invalidate or render unenforceable any other provision hereof. Section 13.05. Amendments Cham!es and Modifications. This Agreement may be amended by Lessor and Lessee; provided that no amendment that affects the rights of the Registered Owners shall be effective unless it shall have been consented to by tbe Registered Owners ofa majority, in principal amount, of the Lease Participation Certificates, if any, then outstanding, Section 13,06. Execution in Counteq>arts. This Agreement may be simultaneously executed in several counterparts, each of whicb shall be an original and all of which shall constitute but one and the same instrument. Section 13.07. Applicable Law. This Agreement sball be governed by and construed in accordance with the laws of the State. Section 13.08, Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as ofthe date first above written. 9 1.; -If/"" (LESSOR) Koch Financial Corporation By Title (SEAL) Attest: By Title Address: 4111 East 37th St.,North Wichita, Kansas 67220 (LESSEE) City of San Bernardino By Title (SEAL) Attest: By Title Address: 300 North "D" Street San Bernardino, California 92418 10 15-1(// EXHIBIT A Koch Financial Corporation 4111 East 37th Street North Wichita, KS 67220 Re: Schedule of Property No, _, dated 1995, to Master Equipment Lease/Purchase Agreement dated as of May 4,1995, between Koch Financial Corporation, as Lessor, and the City of San Bernardino, as Lessee, Gentlemen: As legal counsel to the City of San Bernardino, (the "Lessee"), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of , 1995, and Exhibits thereto by and between Koch Financial Corporation (the "Lessor") and Lessee (the "Agreement") and Schedule of Property No, _' dated _1995, by and between Lessor and Lessee (the "Schedule"), which, among other things, provides for the lease to with option to purchase by the Lessee of certain property listed in the Schedule (the "Equipment"), (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorizes Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. Based on the foregoing, I am ofthe following opinions: (1) Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) police power; (2) Lessee has the requisite power and authority to lease the Equipment with an option to purchase and to execute and deliver the Agreement and the Schedule and to perform its obligations under the Agreement and the Schedule; (3) The Agreement, the Schedule and the other documents either attached thereto or required therein have been duly authorized, approved and executed by and on behalf of Lessee and the Agreement and the Schedule are valid and binding obligations of Lessee enforceable in accordance with their terms; (4) The authorization, approval and execution of the Agreement and the Schedule and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and (5) There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Agreement or the Schedule or the security interest of Lessor or its assigns, as the case may be, in the Equipment. All capitalized terms herein shall have the same meanings as in the foregoing Agreement unless otherwise provided herein, Lessor, its successors and assigns, including without limitation any Registered Owners, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Printed Name: Signature: Firm: Address: Dated: Telephone No.: 11 r::-/t.a EXHIBIT B SCHEDULE OF PROPERTY NO, Re: Master Equipment Lease/Purchase Agreement, dated as of _ 1995, between Koch Financial Corporation, as Lessor, and the City of San Bernardino, as Lessee. 1. Defined Terms, All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment LeaselPurchase Agreement (the "Master Equipment Lease"). 2. Eauioment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease, Ouantitv 3 3 Descriotion / Sl:rilll Hll. / MlllW Hll. Location White/GMC Vehicle cab and chassis (PO #006388) AMREP Front loading refuse vehicle body (PO #006387) 3, Pavment Schedule, The following is the Rental Payment Schedule and Purchase Price Schedule under this Schedule to the Master Equipment Lease: a. Rental Pavments. The Rental Payments shall be in the amounts set forth in the "Rental Payment" column of the Payment Schedule contained in this Schedule, Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee as indicated in an Acceptance Certificate substantially in the form of Exhibit D to the Master Equipment Lease or the date on which sufficient moneys to purchase said Equipment are deposited for that purpose with an escrow agent, whichever is earlier, and shall be semi-annually in sequence for the duration of the Lease Term, b. Purchase Price Schedule, The Purchase Price at any particular time for the Equipment listed in this Schedule shall be the amount set forth for such time in the "Purchase Price" column of the payment Schedule contained in this Schedule, The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Payment Schedule). c, Pavment Schedule. The Payment Schedule is as set forth below. Although a Purchase Price is shown for each Payment Number, the Equipment listed in this Schedule may be purchased only as provided and at such times as set forth in Section 10.01 of the Master Equipment Lease. RENTAL PAYMENT SCHEDULE Rental Payment !2lll< Rental Payment Amlllmt ~ Portion Princinal .&u1ion ~ Price 'Sa cttL~[ eN C C 4. Representations Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement are true and correct as though made on the date of commencement of Rental Payments on this Schedule, 5. Certification as to Abitra~e. Lessee hereby represents as follows: a. The estimated total costs of the Equipment listed in this Schedule will not be less than the total Principal Portion of the Rental Payments listed in this Schedule. 12 u;::: /I,::~:' ,~- b. The Equipment listed in this Schedule has been ordered or is expected to be ordered within six months of the commencement of this Schedule and the Equipment is expected to be delivered and installed, and the Vendor fully paid, within one year from the commencement ofthis Schedule. c, Lessee has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (i) that is reasonably expected to be used to pay the Rental Payments listed in this Schedule, or (ii) that may be used solely to prevent a default in the payment of the Rental Payments listed in this Schedule. d, The Equipment listed in this Schedule has not been and is not expected to be sold or otherwise disposed of by Lessee, either in whole or in major part, prior to the last maturity of the Rental Payments listed in this Schedule. e, To the best of our knowledge, information and belief, the above expectations are reasonable. f, Lessee has not been notified of any listing or proposed listing of it by the Internal Revenue Service as an issuer whose arbitrage certificates may not be relied upon. 6, The Master Eauipment Lease, This Schedule is hereby made as part of the Master Equipment Lease and Lessor and Lessee hereby ratify and confirm the Master Equipment Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated by reference and made a part hereof, 7. Tax Designations and Covenants and Certificate as to Arbitrage, Lessee will comply with all applicable provisions of the Code, including without limitation Sections 103 and 148 thereof, and the applicable regulations of the Treasury Department to maintain the exclusion of the interest components of Rental Payments from gross income for purposes of federal income taxation. Lessee will use the proceeds of this Schedule as soon as practicable and with all reasonable dispatch for the purpose for which this Schedule has been entered into. No part of the proceeds of this Schedule shall be invested in any securities, obligations or other investments or used, at any time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of this Schedule, would have caused any portion of this Schedule to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 148 of the code and the applicable regulations of the Treasury Department. Lessee hereby designates this Schedule as a "qualified tax-exempt obligation" as defined in Section 265(b)(3)(B) of the Code, The aggregate face amount of all tax-exempt obligations (excluding private activity bonds other than qualified 501(c)(3) bonds) issued or to be issued by Lessee and all subordinate entities thereof during the calendar year of commencement of this Schedule (the "Issuance Year") is not reasonably expected to exceed $10,000,000. Lessee and all subordinate entities thereof will not issue in excess of $10,000,000 of qualified tax-exempt obligations (including this Schedule but excluding private activity bonds other than qualified 501(c)(3) bonds) during the Issuance Year without first obtaining an opinion of nationally recognized counsel in the area of tax- exempt municipal obligations acceptable to Lessor that the designation of this Schedule as a "qualified tax-exempt obligation" will not be adversely affected. Dated: (LESSOR) Koch Financial Corporation 4111 E. 37th St., North Wichita, Kansas 67220 (LESSEE) The City of San Bernardino 300 North "D" Street San Bernardino, California 92418 By By Title Title (SEAL) (SEAL) Attest: Attest: 13 ?'~- ;' /~ /~ (v . . EXHIBIT C CERTIFICATE OF CLERK OR SECRETARY OF LESSEE I, the undersigned, do hereby certify (i) that the officer of Lessee who executed the foregoing Agreement of behalf of Lessee and whose genuine signature appears thereon, is the duly qualified and acting officer of Lessee as stated beneath his or her signature and has been authorized to execute the foregoing Agreement on behalf of Lessee, and (ii) that the budget year of Lessee is from to Dated: 14 By: Title: :>r'--~. EXHIBIT D ACCEPTANCE CERTIFICATE Koch Financial Corporation 4111 East 37th Street North Wichita, KS 67220 Gentlemen: Re: Schedule of Property No._, dated 1995, to Master Equipment Lease/Purchase Agreement, dated as of May 4, 1995, between Koch Financial Corporation, as Lessor, and the City of San Bernardino, as Lessee, In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: (I) All of the Equipment (as such term is defined in the Agreement) listed in the above-referenced Schedule of Property (the "Schedule") has been delivered, installed and accepted on the date hereof. (2) Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes, (3) Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. (4) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: City of San Bernardino By: [SEAL] Title: 15 95-169 EXHIBIT B TO EQUIPMENT LEASE/PURCHASE AGREEMENT SCHEDULE OF RENTAL PAYMENTS Rental Payment Rental Payment Interest Principal Purchase Number Amount Portion Portion Price I $43,730.77 $10,945.11 $32,785.65 $348,560.94 2 $43,730,77 $9,986,95 $33,743.81 $314,142.25 3 $43,730,77 $9,000.79 $34,729.98 $278,717,67 4 $43,730.77 $7,985.81 $35,744.96 $242,257.81 5 $43,730,77 $6,941.16 $36,789.61 $204,732.41 6 $43,730.77 $5,865.99 $37,864,78 $166, II 0.33 7 $43,730.77 $4,759.39 $38,971.38 $126,359.53 8 $43,730.77 $3,620.45 $40,110.32 $85,447.00 9 $43,730,77 $2,448.22 $41,282.54 $43,338.81 10 $43,730.77 $1,241.74 $42,489.03 $1.00 Totals: $437,307,68 $62,795.62 $374,512.06