HomeMy WebLinkAbout1994-325
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94-325
RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO APPROVING A
LEASE/PURCHASE EQUIPMENT AGREEMENT WITH SMITH/MITCHELL LEASING
SERVICES GROUP, LTD. FOR THE LEASE/PURCHASE FINANCING OF THE 800
MHZ TRUNKED RADIO COMMUNICATIONS SYSTEM INCLUDING RADIO BACKBONE
SYSTEM AND MOBILE DATA TERMINALS.
BE IT RESOLVED BY THE MAYOR AND CO~ON COUNCIL OF THE CITY OF
SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Mayor is hereby authorized and directed to
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trunked radio communications system including radio backbone system
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execute on behalf of the city an agreement by and between the City
of San Bernardino and the Smith/Mitchell Leasing Services Group,
Ltd. for the lease/purchase financing of equipment for the 800 MHz
and mobiie data terminals.
SECTION 2.
That Smith/Mitchell Leasing Services Group, Ltd.
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is the lowest and best responsible bidder for the financing of the
800 MHz trunked radio communication system and equipment in the
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total amount of $2,133,069.71 at 6.30% interest payable in annual
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payments as noted on Schedule A (payment schedule) ;and for the
refinancing of three hundred 800 Mhz portable radios in the total
amount of $320,228.85 at 6.30% interest payable in annual payments
as noted
on Schedule B
to this
(payment
schedule) ;
pursuant
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determination, the Mayor of the City of San Bernardino is hereby
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authorized and directed to execute on behalf of said City a Lease
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Purchase agreement containing
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said terms upon approval
of the
A copy of said agreement will be
Agreement by the City Attorney.
attached to this resolution as Exhibit "A".
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SECTION 3. The authorization to execute the above referenced
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agreement is rescinded if it is not issued within sixty (60) days
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of the passage of this resolution.
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',RESOtUTION AUTHORI ZING AGREEMENT WITH SMITH/MITCHELL.
94-325
2 I HEREBY CERTIFY that the foregoing resolution was duly
3 adopted by the Mayor and Common Council of the City of San
7 Councilmembers
8 NEGRETE
9 CURLIN
10 HERNANDEZ
11 OBERHELMAN
12 DEVLIN
13 POPE-LUDLAM
14 MILLER
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Bernardino at a
regular
17th
meeting thereof, held on the
day
of October
, 1994, by the following vote, to wit:
AYES
NAYS
ABSTAIN
ABSENT
x
x
x
x
x
x
x
~4it~
The foregoing resolution is hereby approved this..{e> 17- day of
October
~~~~<"[!,.,. '"'o<~.
City of San Bernardino
, 1994.
Approved as to form
22 and legal content:
23 JAMES F. PENMAN
City Attorney
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By:
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Investment Group Inc.
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October 12, 1994
Mr, Fred Wilson
Assistant City Administrator
City of San Bernardino
300 North "0" Street
San Bernardino, California 92418
Re: City of San Bernardino
800 Megahertz Communication System
Dear Mr, Wilson,
As a follow-up to our letter dated September 21. 1994, Smith Mitchell confirms its interest
in providing financing for the above-captioned issue, Due to interest rate changes in the
municipal market since our prior letter, Smith Mitchell recommends the City approve a
not-to-exceed, all in annual percentage rate of 6.69% for the financing of the City's 800
Megahertz Communication System, The attached graph depicts the change in interest
rates for the two month period ending October 12, 1994, Since mid-September interest
rates on ten year treasuries, a basis for which municipals are priced, has increased .35%,
from 7.3 5% to 7,70%, The 6,69% cap allows the City to lock in this low rate in the event
that interest rates continue to rise but does not preclude Smith Mitchell from providing a
lower all in interest cost if market conditions improve,
Our financing is structured to meet the City's needs, with a general outline of terms and
conditions listed below:
Financed Amount:
$2,133,069,71 New Money
$ 274,166,00 Refinancing
Equipment:
800 Megahertz Equipment
Based on Equipment Schedule provided by the City on
Septem ber 21, 1994
Term:
Ten (10) years
Annual Percentage Rate:
6,69% maximum, not to exceed APR - All-in-cost.
Subject to favorable readjustment based on current market
conditions.
Payments:
Monthly, Except the first payment
Tracy A. Me Williams
Vice President
135 MainSrreet
Suite 1120
San Francisco, CA 94105
tel 415.247.5880
fax 415-247-5892
Los AnRfies, CA
West Palm Bew:.h, FL
C~,IL
Moniswwn, NJ
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SeaaLe,WA
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Investment Group Inc.
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October 12, 1994
Mr, Fred Wilson
Assistant City Administrator
City of San Bernardino
300 North "D" Street
San Bernardino, California 92418
Re: City of San Bernardino
800 Megahertz Communication System
Dear Mr. Wilson.
As a follow-up to our letter dated September 21, 1994, Smith Mitchell confirms its interest
in providing financing for the above-captioned issue, Due to interest rate changes in the
municipal market since our prior letter, Smith Mitchell recommends the City approve a
not-to-exceed, all in annual percentage rate of 6,69% for the financing of the City's 800
Megahertz Communication System, The attached graph depicts the change in interest
rates for the two month period ending October 12, 1994, Since mid-September interest
rates on ten year treasuries, a basis for which municipals are priced, has increased .35%,
from 7.35% to 7,70%, The 6,69% cap allows the City to lock in this low rate in the event
that interest rates continue to rise but does not preclude Smith Mitchell from providing a
lower all in interest cost if market conditions improve,
Our financing is structured to meet the City's needs, with a general outline of terms and
conditions listed below:
Financed Amount:
$2,133,069.71 New Money
$ 274,166,00 Refinancing
Equipment:
800 Megahertz Equipment
Based on Equipment Schedule provided by the City on
Septem ber 2 1, 1994
Term:
Ten (10) years
Annual Percentage Rate:
6,69% maximum, not to exceed APR - AlI-in-cost.
Subject to favorable readjustment based on current market
conditions,
Payments:
Monthly, Except the first payment
..
Tracy A. McWilliams
Vice President
l35~ainStree[
"<Suite 1120
San Francisco, CA 9410S
tel 415-247-5880
fax 415-247-5892
Lo5 Angeles, CA
West Palm Beach, fL
Chicago,IL
MarrislOWIl,N]
DaJ/as,TX
Seartle,WA
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Investment Group Inc.
Financing Expiration:
The proposal must be accepted by October 18, 1994
If an acceptance is not received by the above date, the
quoted interest rate will adjust to then current market
conditions,
If acceptance is received prior to expiration, the rate is
firm through November 18, 1994, All funding must occur
on or before this date to hold this interest rate, If the
transaction is not funded by this date, the quoted interest
rate will adjust to current market conditions,
Given the timeframe allotted to Smith Mitchell for due diligence, approval of any funding
for the City's project is subject to credit review and the negotiation of definitive structure
and documents including a legal opinion or opinions satisfactory to our counsel. No rights,
liabilities or obligations shall arise as a result of this letter prior to the execution of
definitive documents and the satisfaction of each precondition to closing. This letter sets
forth Smith Mitchell's willingness to seek additional approvals, if necessary for the
transaction,
The attached Master Lease Agreement sets forth preliminary .financing information for the
City's project. This information is preliminary based on financing assumptions supplied
by the City to Smith Mitchell Investment Group Inc. Smith Mitchell is relying on the City
of San Bernardino to provide accurate project cost and other related information to finalize
the Master Lease Agreement,
Proposal Accepted By:
Cityofsa~
Signature: . / ~Uj(d~
..---I AV-,'
Name:' / c ,n'"\ (/ , \ L r--o> y-
Title: ~<.A.)#~ ~! ,PA- ~ ~~
If you have any questions or need additional information, feel free to call me at (800) 422-
9942,
Sincerely,
-d;lifJ(/'~
~~~, McWilliams
Vice President
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MASTER LEASE AGREEMENT SUPPLEMENT NO.1
LESSOR:
Smith Mitchell Leasing Services Group Ltd,
135 Main Street. Suite 1120
San Francisco, California 94105
LESSEE:
City of San Bernardino
300 North "D" Street
San Bernardino. California 92418
This Master Lease Agreement Supplement is dated as of October _, 1994 by and between Smith Mitchell
Leasing Services Group Ltd, ("Lessor"), and the City of San Bernardino ("Lessee"), a political subdivision duly
organized and existing under the laws of the State of California ("State");
WITNESSETII:
WHEREAS. Lessor desires to lease the Equipment, as hereinafter defined. to Lessee, and Lessee desires to
lease the Equipment from Lessor, subject to the terms and conditions of and for the purposes set forth below:
NOW, TIIEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained
and for other good and valuable consideration, the parties hereto agree as follows:
A, Incorooration of the Standard Terms and Provisions, The terms and provisions of the Master Lease
Agreement (the "Master Lease Agreement") attached to this Supplement are incorporated herein by this reference as
though fully set forth in this Supplement, The Master Lease Agreement, together with this Supplement are collectively
referred to herein as the "Lease Agreement," Capitalized terms used in the Supplement and not otherwise defined shall
have the meanings ascribed thereto in the Master Lease Agreement.
B. Lease of Eauioment.
described Equipment:
There is hereby subject to the terms of this Lease Agreement the following
DESCRIPTION OF EOUlPMENT:
Eauioment:
800 MHz Equipment
Integration
Contingency
Refuse Department Fixed Mobile Equipment
Cost
$1.681,951.82
$ 285.000,00
$ 49bJO,oo
$ 116,617,89
TOTAL:
$2.133.069,71
Refinancing of Mobiles and Portables
$ 274.166,00
TOTAL:
$ 274,166,00
Useful Life of Eauipment:
Ten Years
The Lessee certifies that the Equipment being acquired will, immediately after its acquisition by Lessee as agent
for the Lessor, be owned by the Lessor free and clear of all liens or claims of others, except for the rights of the Lessee
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under the Lease Agreement, The Lessee further certifies that such Equipment is not currently owned or leased by the
Lessee and that the Lessee is prepared to accept the Equipment from the Vendor thereof upon delivery and satisfaction
of performance criteria, if any.
C, Deoosits to Funds, On the Closing Date, Lessor shall cause $2,133,069,71 to be deposited in the
Acquisition Fund,
D, Acauisition Date and Lease Term, The Equipment shall be acquired by April 3D, 1995 (the
"Acquisition Date") and the Lease Term shall commence on October ,1994, and shall. subject to Section 5,03 of
the Master Lease Agreement, expire on October, _ 2004 (the "Termination Date"),
E, Base Rental Pavments, Base Rental Payments shall be payable monthly on the last day of every month
January through December, for the twelve-month period ending on June 30 each year, beginning May 3D, 1995 until
the Termination Date or earlier prepayment as provided for herein except, the first base rental payment will be due on
April 3D, 1995 will be a semi-annual payment,
Such Base Rental shall be comprised of principal components and interest components paid in accordance with
the following schedule:
INTEREST AND PRINCIPAL COMPONENT PAYMENT SCHEDULE
Base Rental
Due Date
Principal
Component
Interest
Component
Total Base
Rental Payment
(See Attached Schedule)
F, Fair Rental Value, The Lessee hereby certifies that the foregoing Base Rental Payments plus Additional
Rental Payments payable pursuant to Section 6,02 of the Master Lease Agreement represents, on an annual basis, the
fair rental value of the Equipment specified herein. In making this determination. consideration has been given to the
cost of the acquisition and installation of the Equipment to be financed by the Lessor, other obligations of the parties
under the Lease Agreement, the uses and purposes which may be served by the Equipment, and the benefits therefrom
which will accrue to the Lessee and the general public,
G, Preoavment Terms, The Base Rental Payments are subject to prepayment as provided in Section 6,06
of the Master Lease Agreement, Optional prepayments pursuant to Section 6,06(c) of the Master Lease Agreement may
be made on any Payment Date beginning April 30. 1995 at the prepayment listed in the attached schedule,
H. Entire Al!reement. This Lease Agreement, together with Exhibits, constitutes the entire agreement
between Lessee and Lessor. No waiver. consent, modification or change of terms of this Lease Agreement shall bind
either party unless in writing signed by both parties. and then such waiver. consent, modification or change shall be
effective only in the specific instance and for the specific purpose given. There are no understandings, agreements,
representations or warranties, express or implied. not specified herein regarding this Lease Agreement or the Equipment
acquired hereunder. Any terms and conditions of any purchase order or other document submitted by Lessee in
connection with this Lease Agreement which are in addition to or inconsistent with the terms and conditions of this Lease
Agreement will not be binding on Lessor and will not apply to this Lease Agreement, Lessee by the signature below
of its authorized representative acknowledges that it has read this Lease Agreement, understands it, and agrees to be
bound by its terms and conditions.
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94-325
IN WITNESS WHEREOF. Lessor has executed this Lease Agreement in its corporate name with its corporate
seal hereunto affixed and arrested by its duly authorized officers. and Lessee has caused this Lease Agreement to be
executed in its name with its seal hereunto affixed and attested by its duly authorized officers. All of the above occurred
as of the date first wrillen above,
LESSOR: SMITH MITCHELL LEASING SERVICES
GROUP LTD,
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ATTEST:
By:
Title:
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LESSEE: AU.HI:BA COUln, ?!2TY of.5#J BCfN'lI../JDJO
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By: /-f'?i1/L /llciW\......
Title: Torn Mln6r
Mayor, City of San Bernardino
ATTEST:
By:
Title:
r4~.~
CJ.ty Clerk
City of San Bernardino
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MASTER LEASE AGREEMENT
The following terms and provisions of the Master Lease Agreement have been incorporated into the Supplement
to which these provisions are attached, The Supplement and the Master Lease Agreement are collectively referred to
as the Lease Agreement, Capitalized terms used herein and not otherwise defined shall have the meanings given to such
terms in Article II hereof,
ARTICLE I
COVENANTS OF LESSEE AND LESSOR
Section 1.01 Covenants of the Lessee. Lessee represents, covenants and warrants, for the benefit of Lessor and
its assignees, as follows:
(a) Lessee is a political subdivision, duly organized and existing under the Constitution and laws of the State of
California,
(b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence
as a political subdivision,
(c) Lessee is authorized under the Constitution and laws of the State to enter into this Lease Agreement and the
transaction contemplated hereby, and to perform all of its obligations hereunder,
(d) Lessee has been duly authorized to execute and deliver this Lease Agreement by appropriate official approval,
and further represents and warrants that all requirements have been met, and proceedings have been taken in order to
ensure the enforceability of this Lease Agreement, Lessee shall cause to be executed an opinion of its counsel
substantially in the form attached hereto as Exhibit _'
(e) Except as expressly provided in this Lease Agreement, Lessee's obligation to pay all rent and other amounts
payable hereunder and to perform its duties with respect hereto shall be absolute and unconditional, and shall not be
subject to, without limitation, any of the following: (i) any set off, counterclaim. recoupment, defense or other right
which Lessee may have against Lessor. the manufacturer. vendor. or supplier of any Equipment or anyone else for any
reason whatsoever; or (ii) any other event or circumstances whatsoever, whether or not similar to the foregoing.
(I) During the term of this Lease Agreement, the Equipment will be used by Lessee only for the purpose of
performing one or more governmental or proprietary functions of Lessee consistent with the permissible scope of
Lessee's authority and will not be used in a trade or business of any person or entity other than the Lessee.
(g) During the period this Lease Agreement is in force, Lessee will annually provide Lessor with current financial
statements, budgets, or proof of appropriation as requested, for the ensuing fiscal year, and such other financial
information relating to the ability of Lessee to perform its obligations under this Lease Agreement as may be reasonably
requested by Lessor or its assignee.
(h) The Equipment will have a useful life in the hands of the Lessee that is in excess of the Term.
(i) To the Lessee's best knowledge there are no pending or threatened investigations, actions or proceedings before
any court or administrative agency or other tribunal or body, which seek to question or set aside any of the transactions
contemplated by this Lease Agreement, or which if adversely determined would materially affect the Lessee's ability to
perform its obligations hereunder;
G) To the best of the Lessee's knowledge the Lessee is not in default in the payment or performance of any of its
obligations or in the performance of any contract, agreement or other instrument to which it is a party or by which it
CCR244P:OPT AGREE.2:060994
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or any of its assets may be bound, which default would materially adversely affect the Lessee's ability to perform its
obligations hereunder;
(k) To the best of the Lessee's knowledge, no authorization, consent, approval, license, exemption of or filing or
registration with any court, governmental unit or department. commission. board. bureau. agency. instrumentality or the
like. other than as has been obtained. is required or necessary for the valid execution and delivery of this Lease
Agreement,
(1) This Lease Agreement, having been duly authorized. executed and delivered to the Lessor. constitutes, and any
accompanying documents. upon due authorization. execution and delivery to the Lessor. will constitute, legal, valid and
binding obligations of the Lessee, enforceable against the Lessee in accordance with the terms thereof except as such
terms may be limited by bankruptcy. reorganization, insolvency. moratorium or judicial discretion, and sovereign police
powers of the State of California. the constitutional power of the United States of America, other laws affecting the
enforcement of creditors' rights in general and to the application of principles of equitable remedies. The Lease does
not constitute an indebtedness of the Lesee within the meaning of any constitutional debt limitation provision,
(m) Except as expressly provided in this Lease Agreement, Lessee will include in its annual budget and appropriate
sufficient funds to meet on a timely basis all Rental Payments due under this Lease Agreement for the period covered
by such budget,
Section 1.02 Covenants of the Lessor,
and the assignees of the Lessor as follows:
Lessor represents, covenants and warrants for the benefit of the Lessee
(a) Lessor is a corporation duly qualified to conduct its business under the laws of the State of California; and
(b) Lessor is authorized under the laws of the State of California and its articles of incorporation and bylaws to
enter into this Lease Agreement and the transactions contemplated hereby and to perform all of its obligations
hereunder.
ARTICLE II
DEFINITIONS
Section 2,01 Definitions, The following terms will have meanings indicated below unless the context clearly
requires otherwise:
"Acquisition Costs" means, with respect to any item of Equipment, the contract price paid or to be paid to the
Vendors therefor upon acquisition, or delivery of any portion of the Equipment (together with delivery of a Certificate
of Acceptance to the Lessor), in accordance with the purchase order of or contracts therefor, plus an amount equal to
the interest component to be paid with respect to this Lease Agreement executed and delivered with respect to such
Equipment prior to the date of acquisition thereof, and initially shall be not greater than the amount set forth as the
Acquisition Cost of such Equipment herein; which sum may be increased if any additional amount is due the Vendors
by reason of any properly authorized change orders, Acquisition Costs also include the administrative. legal. financial
and other costs, incurred by the Lessee, Lessor and the Vendors in connection with the acquisition, delivery and
financing of the Equipment,
"Acquisition Fund" means the fund by that name established by the Lessee pursuant to Section 3,02 of this Lease
Agreement,
"Additional Rental" or "Additional Rental Payments" means the Rental Payments payable by Lessee pursuant to the
provisions of this Lease Agreement pursuant to Section 6,02 (b) hereof,
CCR244P:OPT AGREE,2:060994
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"Base Rental" or "Base Rental Payments" means the Base Rental Payments payable by Lessee pursuant to the
provisions of this Lease Agreement pursuant to Section 6.02 (a) hereof.
"Capitalized Interest Fund" means the fund by that name established by the Lessee pursuant to Section 3,09 of this
Lease Agreement.
"Certificate of Acceptance" means a Certificate of Acceptance in substantially the form attached hereto as Exhibit
C. whereby Lessee acknowledges receipt of an item of the Equipment in good condition,
"Closing Date" means the date on which Lessor deposits with the Lessee the funds required to be deposited by
Section 3,01 of this Lease Agreement,
"Code" means the Internal Revenue Code of 1986, as amended, or any successor statute thereto, and any regulations
promulgated thereunder, or relative thereto,
"Commencement Date" means (1) when used with respect to the Equipment acquired on the date of execution of this
Lease Agreement, the date hereof. and (ii) when used with respect to the Equipment to be acquired subsequent to the
date of execution of this Lease Agreement, the first day following the date on which the Equipment is acquired,
"Equipment" means the property described in Paragraph B of the Supplement and which is the subject of this Lease
Agreement.
"Equipment Acceptance Date" means that date upon which Lessee acknowledges receipt in good condition of an
item of Equipment as indicated on the applicable Certificate of Acceptance,
"Equipment Costs" means the estimated cost of the Equipment, and financing, legal, and other costs of the Lessee.
as described herein,
"Insurance Consultant" means any independent person with a national reputation in consulting on the insurance
requirements of governmental entities of the general size and character of the Lessee, selected by the Lessee,
"Lease Agreement" means this Lease Agreement, including the Supplement, the Master Lease Agreement and the
other Exhibits attached hereto as the same may be supplemented or amended from time to time in accordance with the
terms hereof.
"Lease Fund" means the fund by that name established by the Lessee pursuant to Section 3,02 of this Lease
Agreement,
"Lease Term" or "Term" means the Term of Lease for each item of Equipment as specified in this Lease Agreement
under Article V.
"Lessee" means the municipality identified as the Lessee in the applicable Supplement. which is leasing the
Equipment from Lessor under the provisions of this Lease Agreement.
"Lessee Representative" means any representative of the Lessee authorized to act on its behalf under or with respect
to this Lease Agreement.
"Lessor" means (i) Smith Mitchell Leasing Services Group Lid,; (il) any surviving, resulting or transferee
corporation; and (ili) except where the context requires otherwise, any assignee(s) of Lessor,
"Lessor Representative" means the President or any Vice President or Associate Vice President of Lessor. or any
other person authorized to act on behalf of Lessor under or with respect to this Lease Agreement, as evidenced by a
CCR244P:OPT AGREE,2:060994
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certificate conferring such authorization executed by the President or any Vice President or Associate Vice President of
Lessor, given to the Lessee or the Lessee Representative,
"Net Proceeds" shall have the meaning given to such term in Section 9,01 hereof,
"Nonarbitrage and Tax Certificate" means, with respect to the Lease, a certificate relating to Section 148(1) of the
Code, executed by the Lessee on the date of delivery of such Lease to the Lessor, as originally delivered and as it may
be amended from time to time,
"Opinion of Counsel" means a written opinion of counsel of recognized national standing in the field of law relating
to municipal bonds. appointed and paid by the Lessee or the Lessor.
"Payment Date" means with respect to any year the due dates in such year for the payment of Base Rental Payments
as set forth in the Lease Agreement,
"Permitted Encumbrances" means as of any particular time: (i) liens for general ad valorem taxes and assessments,
if any, not then delinquent; (ii) this Lease Agreement and any leases, subleases and assignments superior or subordinate
thereto which are in accordance therewith; and (Hi) any right or claim of any mechanic, laborer. materialman, supplier
or vendor filed or perfected in the manner prescribed by law, other than any lien arising through any of the Vendors,
"Prepayment Date" means any date on which the Lessee may exercise its option to purchase an item of Equipment
as set forth in Section 6,06 hereof,
"Purchase Price" means the amount which Lessee shall pay to Lessor in order to purchase an item of Equipment,
as set forth in Section 6,06 hereof,
"Qualified Investments" means and includes those investments permitted under California Government Code Section
53601 or such other laws relating to investments by local government agencies, as now existing or as hereafter amended
and to the extent permitted by law. with respect to moneys pledged to and held in trust for payment of or for security
this Lease Agreement, Qualified Investments means and includes any other prudent investment,
"Rebate Requirement" means the Rebate Requirement defined in the Nonarbitrage and Tax Certificate,
"Rental Payments" means the Base Rental Payments and Additional Rental Payments payable by Lessee pursuant
to the provisions of this Lease Agreement during the Lease Term, payable in consideration of the right of Lessee to use
each item of Equipment during the Lease Term, Rental Payments shall be payable by Lessee to the Lessor or its assignee
in the amounts and at the time, during the Lease Term, as set forth herein.
"Supplement" means the Supplement attached to this Master Lease Agreement describing the Equipment and setting
out the payment schedule therefor.
"Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom
Lessor purchased or is purchasing the Equipment,
CCR244P:OPT AGREE, 2 :060994
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ARTICLE III
DEPOSIT OF MONIES; ACQUISITION
OF EQUIPMENT
Section 3,01. DeDosit of Monies, On the Closing Date, Lessor shall cause to be deposited in the Acquisition Fund
and the Capitalized Interest Fund, the amounts set forth in Section C of the Supplement,
Section 3,02, Acnuisition Fund, The Lessee shall establish a special fund designated as the "Acquisition Fund"
(the "Acquisition Fund"); shall keep such fund separate and apart from all other funds and moneys held by it; and shall
administer such fund as provided in this Section and Article IV hereof. The Acquisition Fund shall be held and applied
by or on behalf of the Lessee in accordance herewith,
Section 3,03, Puroose, Moneys in the Acquisition Fund shall be expended for Acquisition Costs of the Equipment,
Section 3,04 Acnuisition of the EnuiDment, Lessee will supervise and provide for, as agent for Lessor, the
acquisition of the Equipment pursuant to the terms hereof, Lessee agrees that the Equipment will be acquired in
accordance with the specifications therefor and on file with the Lessee, Lessee further agrees that it will cause the
acquisition of the Equipment to be diligently performed after the deposit of funds with the Lessee pursuant to Section
3,01 hereof, and that each item of Equipment will be substantially acquired in accordance with said specification within
six months from the Closing Date provided, however, that the Lessee may elect to pos:pone the acquisition of any item
of Equipment so long as the amounts on deposit in the Acquisition Fund, together with the earnings thereon, will be
sufficient to pay the portion of the Base Rental Payments attributable to such item or items of Equipment.
Upon acquisition of each item of Equipment to the satisfaction of the Lessee. but in any event not later than thirty
(30) days following acceptance of such acquisition. Lessee shall deliver to the Lessor a Certificate of Acceptance in
substantially the form set forth as Exhibit _'
Section 3,05 Substitution of EnuiDment, The Lessee may substitute an item of Equipment for an item listed
herein, if the substituted item has the same or a greater useful life and is of equal or greater value and, if such
substitution will result in an increased Equipment Cost, the Lessee shall deposit in the Acquisition Fund an amount
sufficient to pay such cost,
Section 3,06, DeDosit of Funds; Payment of Acnuisition Cost, There shall be credited to the Acquisition Fund
the moneys required to be deposited therein pursuant to Section 3.01 hereof, and any other funds deposited with the
Lessee for such purpose, The Lessee shall pay the Acquisition Costs from the Acquisition Fund, as hereinafter provided,
upon receipt of the following items with respect thereto:
(a) in the case of payment of any Acquisition Cost pursuant to a contract or purchase order. (1) a true copy of the
Vendor's statement: (2) where applicable, a duplicate original of any change order approved by the Lessee increasing
Acquisition Costs in an amount in excess of the original purchase order or contract price; (3) waivers of any liens and
claims executed by the Vendors and any subvendor which has provided work or materials for the Equipment, showing
payment of all costs incurred in providing work or materials for the Equipment. in an amount equal to the amount
requested for payment; and (4) bills of sale for any component of the Equipment for which a bill of sale may be
delivered; or
(b) in the case of payment of any other Acquisition Cost, a true copy of the payee's statement,
Acquisition Costs will be paid directly to the Vendors or payee unless the Lessee determines that payments should
be made to the Vendors or payee and another party jointly,
Section 3,07, Transfers UDon AcceDtance, On the business day preceding the Payment Date occurring after
the filing with the Lessor of the Certificate of Acceptance indicating all Equipment has been acquired, or in any event
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no later than three (3) years from the Closing Date, the Lessee shall transfer all remaining moneys in the Acquisition
Fund to be applied to the payment of principal evidenced and represented by the Base Rental Payments,
Section 3,08 Quiet Eniovment, The Lessor hereby covenants to provide the Lessee during the Lease Term with
quiet use and enjoyment of the Equipment, and the Lessee shall during the Term peaceably and quietly have and hold
and enjoy the Equipment, without suit, trouble or hindrance from the Lessor. except as expressly set forth in this Lease
Agreement, Any Owner shall not interfere with such quiet use and enjoyment during the Lease Term so long as the
Lessee is not in default hereunder.
Section 3,09 CaDitalized Interest Fund, The Lessee shall establish a special fund designated as the Capitalized
Interest Fund (the "Capitalized Interest Fund"); shall keep such fund separate and apart from all other funds and moneys
held by it; and shall administer such fund ( or cause such fund to be administered) as provided in Article III and Article
IV hereof, The moneys placed in the Capitalized Interest fund pursuant to Section 3,01 hereof shall be applied and used
by the Lessee to pay the interest portion of the Base Rental Payments in the amounts and at the times set forth in
paragraph E of the Supplement. Investment earnings and any other moneys remaining in the Capitalized Interest Fund
after the payments described above have been made. shall be set aside and transferred to the Acquisition Fund,
ARTICLE IV
MONEYS IN FUNDS; INVESTMENT
Section 4,01. Held In Trust. The moneys and investments held by the Lessee under this Lease Agreement are
irrevocably held in trust for the benefit of the Lessee, Lessor, and for the purposes herein specified. and such moneys
and any income or interest earned thereon, shall be expended only as provided for in this Lease Agreement. and shall
not be subject to levy or attachment or lien by or for the benefit of any creditor of either Lessor or the Lessee or either
of them,
Section 4,02, Investments Authorized, Moneys held by or on behalf of the Lessee hereunder may be invested
in Qualified Investments, Such investments and reinvestments shall be made giving full consideration for the time at
which funds are required to be available,
Section 4.03 DiSDosition of Investments. Any income received on the investment of moneys from the Acquisition
Fund shall be credited to said fund,
Section 4.04 Valuation and DisDosition of Investments. For the purpose of determining the amount in the
Acquisition Fund or the Capitalized Interest Fund, all Qualified Investments credited to such account shall be valued at
cost (exclusive of accrued interest after the first interest payments following purchase). The Lessee may sell at the best
price obtainable, or present for redemption, any Qualified Investment so purchased by the Lessee, whenever it shall be
necessary in order to provide moneys to meet any required payment. transfer, withdrawal or disbursement from the
applicable fund, and, to the extent permitted by law, the Lessee shall be liable or responsible for any difference in
amount resulting from such investment.
Section 4,05 DeDosit of Monevs, All moneys held by the Lessee in the Acquisition Fund or the Capitalized
Interest Fund, except such moneys which are at the time invested in Qualified Investments, shall be deposited in demand
or time deposits (which may be represented by time certificates of deposit) in any bank or trust company authorized to
accept deposits of public funds and , as and to the extent required by law, shall be secured at all times by obligations
which are eligible by law to secure deposits of public moneys, Such obligations shall be deposited with such bank or
banks as may be selected by the Lessee as security for such deposits,
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Section 4,06, Tax Mallers,
(a) The Lessee covenants to comply with each applicable requirement of Section 103 and Sections 141 through ISO
of the Code, in that the Lessee agrees to comply with the covenants contained in, and instructions given pursuant to, the
Nonarbitrage and Tax Certificate dated as of the date of execution and delivery of the Lease Agreement, as a source of
guidance for compliance with such provisions.
(b) Notwithstanding any provision of this Section 4,07, if the Lessee shall provide to the Lessor an Opinion of
Counsel to the effect that no action is required under this Section, or to the effect that some further action is required.
or that it is necessary to restrict the yield on the investment of any moneys held under the Lease Agreement to maintain
the exclusion from gross income of the interest represented by the Lease Agreement pursuant to Section 103 of the Code,
the Lessee and Lessor may rely conclusively on such Opinion of Counsel in complying with the provisions hereof,
(c) Notwithstanding any other provision of this Lease Agreement to the contrary, upon the Lessee's failure to
observe, or refusal to comply with, the foregoing covenant, no person other than the Lessor as the Lessor's assignees
shall be entitled to exercise any right or remedy provided to the Owners under this Lease Agreement on the basis of the
Lessee's failure to observe. or refusal to comply with, the covenant,
ARTICLE V
TERM
Section 5,01. Lease of Eouioment, Lessor hereby demises. leases and lets to Lessee, and Lessee rents. leases
and hires from Lessor. the Equipment, in accordance with the provisions of this Lease Agreement, to have and to hold
for the Term,
Section 5,02, Commencement of Term, The Term of this Lease Agreement with respect to any item of
Equipment shall commence on the applicable Commencement Date and shall terminate as specified in Section 5,03,
If the Lessor, for any reason whatsoever, cannot deliver possession of any item of Equipment to the Lessee by the
Acquisition Date such item of Equipment is required to be so delivered, this Lease Agreement shall not be void or
voidable, nor shall the Lessor be liable to the Lessee from any loss or damage resulting therefrom; but in that event the
rent payable hereunder shall be abated proportionately, in the proportion in which the acquisition and installation costs
of the item of Equipment not yet delivered to the Lessee bears to the acquisition and installation costs of all of the
Equipment, with respect to the period between said date and the time when Lessor delivers possession, except to the
extent of amounts held in the Capitalized Interest Fund and except to the extent that the fair market rental value of the
Equipment delivered to the Lessee shall equal or exceed the Base Rental Payments then payable,
Section 5,03, Termination of Term,
following events:
This Lease Agreement will terminate upon the earliest of any of the
(a) A default by Lessee and Lessor's election to terminate this Lease Agreement under Article Xlll; or
(b) The payment by Lessee of all Rental Payments and any other amounts authorized or required to be paid by
Lessee hereunder; or
(c) Prepayment by Lessee of all Rental Payments in accordance with Section 6,06 hereof; or
(d) The latest Termination Date set forth in Paragraph D of the Supplement(s),
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ARTICLE VI
RENTAL PAYMENTS
Section 6.01. Rental Payments to Constittlte 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 limitations
or requirements 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 6,02, Pavment of Rental Pavments, Notwithstanding anything to the contrary in this Lease Agreement,
Lessee's obligation to make Base Rental Payments is contingent upon Lessee's receipt and acceptance of the Equipment,
and Lessee's continued right to the possession and use of such Equipment except as set forth in Sections 5,02 and 6,05,
The Lessee agrees to pay to the Lessor, its successor or assigns, without deduction or offset of any kind, as rental for
the use of the Equipment, the following amounts at the following times:
(a) Base Rental. The Lessee shall pay to the Lessor, or in the event of assignment by Lessor, to its assignee as
a base rental (herein called the "Base Rental ") annual rental payments with principal and interest components, paid semi-
annually listed in Section E of the Supplement, Each Base Rental Payment shall be payable not less than the business
day preceding its due date, The interest components of the Base Rental Payment shall be paid by the Lessee as and
constitute interest paid on the principal components of the Base Rental Payments to be paid by the Lessee hereunder
computed on the basis of a 360-day year composed of twelve 30-day months, Each annual payment of Base Rental (to
be payable in two installments as foresaid) shall be for the agreement of the Lessor to acquire and install or cause to be
made available for the use by the Lessee the Equipment and, following completion of the provision of the Equipment,
for the use of the Equipment for the twelve-month period as specified in Section E of the Supplement,
(h) Additional Rental. The Lessee shall pay as Additional Rental Payments hereunder in addition to the foregoing
Base Rental, to the Lessor such amounts (herein called the "Additional Rental Payments") in each year as shall be
required by the Lessor for the payment of any costs and expenses incurred by the Lessor in connection with the
execution, performance or enforcement of this Lease Agreement, the ownership of the Equipment and the lease of the
Equipment to the Lessee, the use of the Equipment, including but not limited to payment of all fees, costs and expenses
(excluding all administrative costs) of the Lessor in connection with the Equipment, expenses (including, without
limitation, attorney's fees and disbursements), compensation and indemnification of the Assignor, if any and its counsel
payable under the Assignment Agreements, fees of auditors or attorneys, insurance premiums not otherwise paid
hereunder moneys required to be related to the U.S. Government pursuant to the Code, amounts required to be paid
pursuant to Section 8.02 hereof, and all other necessary administrative costs of the Lessor or charges required to be paid
by it in order to comply with the terms of this Lease Agreement. Lessee shall not be responsible for Lessor's separate
expenses associated with its management of this Lease Agreement. This shall include costs incurred as a result of
assignment or re-assignment of this Lease Agreement, auditing in connection with Lessor's federal or state tax
requirements or other expenses not assessable solely against the requirement of this Lease Agreement. Such Additional
Rental shall be billed to the Lessee by the Lessor from time to time, together with a statement certifying that the amount
so billed has been paid by the Lessor for one or more of the items above described, or that such amount is then payable
by the Lessee within thirty (30) days after receipt of the bill by the Lessee, Amounts so billed shall be due and payable
by the Lessee within 30 days after receipt of the bill by the Lessee,
Such payments of Base Rental and Additional Rental for each rental payment period during the term of this Lease
Agreement shall constitute the total rental for such rental payment period, and shall be paid by the Lessee in each rental
period, following completion of the acquisition, installation and provision of the Equipment, for and in consideration of
the right to the use and the continued quiet enjoyment of the Equipment during each such rental payment period for which
such rental is paid, The parties hereto have agreed and determined that such total rental represents the fair rental value
of the Equipment. In making such determination, consideration has been given to the costs of the acquisition and
installation of the Equipment to be financed by the Lessor, other obligations of the parties under this Lease Agreement,
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the uses and purposes which may be served by the Equipment and the benefits therefrom which will accrue to the Lessee
and the general public,
Each installment of rental payable hereunder shall be paid in lawful money of the United States of America to or
upon the order of the Lessor at such place as is designated by the Lessor, To the extent permitted by law, any such
installment of rental accruing hereunder, including the interest and principal components of the Base Rental, which shall
not be paid when due shall bear interest at the rate of twelve per cent (12 %) per annum from the date when the same
is due hereunder until the same shall be paid. Notwithstanding any dispute between the Lessee and the Lessor. any
Vendor or any other person and except as set forth in Section 6.05, the Lessee shalt make all Rental Payments when
due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of
such dispute,
Section 6,03, Annual Budgets, The Lessee covenants to take such action as may be necessary to include all such
Rental Payments due hereunder in its annual budgets and to make the necessary annual appropriations for all such Rental
Payments, Lessee reasonably believes that legally available funds of an amount sufficient 10 make all Rental Payments
during the Lease Term can be obtained. The obligation of the Lessee to make Rental Payments does not constitute a debt
of the Lessee or of the State of California or of any political subdivision thereof within the meaning of any constitutional
or statutory debt limitation or restriction.
The covenants on part of the Lessee herein contained shall be deemed to be and shall be construed to be duties
imposed by law and it shall be the duty of each and every public official of the Lessee to take such action and do such
things as are required by law in the performance of the official duty of such officials to enable the Lessee to carry out
and perform the agreements and covenants in this Lease Agreement agreed to be carried out and performed by the
Lessee.
Section 6,04, A"olication of Rental Pavments, All Rental Payments shall be applied first to the interest components
of the Base Rental due hereunder, then to the principal components of the Base Rental due hereunder and thereafter to
all Additional Rental due hereunder, but no such application of any payments which are less than the total rental due and
owing shall be deemed a waiver of any default hereunder.
Section 6,05, Abatement, In the event of damage, theft, destruction or loss of use through eminent domain of the
Equipment, Lessee's obligation to pay Rental Payments hereunder shall abate to the extent of such damage, theft,
destruction or loss of use, and Lessor shall be entitled to the benefits of Article IX of this Lease Agreement, In the event
of abatement, the amount of abatement will be such that the resulting rental payment represents fair consideration for
the use of the portions of the Equipment as to which damage, theft. destruction. or loss of use, does not substantially
interfere with the use and right of possession of the Lessee. If a portion of the Base Rental Payments remain abated. the
unabated Base Rental Payments shall constitute the total Base Rental Payments due under this Lease Agreement. In the
event of abatement, Base Rental Payments shall be paid from rental interruption insurance proceeds or other legally
available funds, if any.
Such abatement shall continue for the period commencing with such damage or destruction and ending with the
completion by the Lessor of the work of repair or replacement. To the extent permitted by law, the Lessee waives the
benefits of Civil Code Sections 1932 (2) and 1933 (4) and any and all other rights to terminate this Lease Agreement
by virtue of any such damage, theft. destruction or loss of use; provided. however, that such waiver shall not constitute
a waiver of the abatement of Rental Payments as set forth in the preceding paragraph.
Section 6.06. Preoavment. (a) The Lessee may prepay in accordance with Section 9.01 hereof from eminent
domain proceeds received pursuant to Section 9.01 hereof. together with other moneys then available for the purpose
of prepayment, the principal components of Base Rental Payments then unpaid relating to the items of Equipment which
have been taken by cond~mnation. in whole or in part on any date, in amounts in each year selected by the Lessee and
furnished to the Lessor. at a prepayment price equal to the sum of the principal components prepaid, without premium.
plus accrued interest thereon to the date fixed for prepayment.
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(b) The Lessee may prepay in accordance with Section 9.01 hereof, from moneys transferred from net insurance
proceeds received pursuant to Sections 8.03 hereof, together with other moneys then available for the purpose of
prepayment. the principal components of Base Rental Payments then unpaid relating to the items of Equipment for which
such insurance proceeds were received, in whole or in part on any date, in amounts in each year selected by the Lessee
and furnished to the Lessor, at a prepayment price equal to the sum of the principal components prepaid. without
premium, plus accrued interest thereon to the date fixed for prepayment.
(c) The Lessee may also prepay. in accordance with this Section 6,06(c) the principal components of Base Rental
Payments then unpaid in whole or in part from any source of funds, at a prepayment price equal to the sum of the
principal component prepaid plus accrued interest thereon to the prepayment date, plus the applicable premium listed in
the Supplement,
ARTICLE VII
TITLE TO EQUIPMENT
Section 7,01. Title to the Eauipment. During the Term of this Lease Agreement. and so long as Lessee is not
in default hereunder. legaltille to the Equipment and any and all repairs, replacements, substitutions and modifications
to it may be held in the name of the Lessee. Upon termination of this Lease with respect to any Equipment pursuant
to Article XIII (default), full and unencumbered legaltille to such Equipment shall pass to Lessor, and Lessee shall have
no further interest therein. Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence
the passage of legal title to such Equipment to Lessor and the termination of Lessee's interest therein and upon request
by Lessor shall deliver possession of the Equipment to Lessor in accordance. Upon termination of this Lease with
respect to any Equipment through exercise of Lessee's option to purchase the Equipment or through payment by Lessee
of all Base Rental Payments and other amounts hereunder, Lessor's security and other interest in such Equipment shall
terminate, and Lessor shall execute and deliver to lessee such documents as Lessee may request to evidence the
termination of Lessor's security and other interest in such Equipment.
Section 7,02, Security Interest, To secure the payment of all of the Lessee's obligations under this Lease
Agreement. in the event that it is determined that this Lease Agreement is intended as security. which determination shall
not be affected by this Section 7,02, the Lessee hereby grants to the Lessor a security interest constituting a first lien on
the Equipment and on all repairs, replacements or modifications thereto, and on any proceeds therefrom, except for those
additions to the Equipment made by the Lessee and which may be removed without damaging the Equipment. The Lessee
agrees to execute such additional documents, including financing statements, affidavits, notices and similar instruments,
in form satisfactory to the Lessor, necessary or appropriate to establish and maintain such security interest and the
security interest of any assignees of the Lessor in the Equipment.
ARTICLE VIII
MAINTENANCE; TAXES;
INSURANCE AND OTHER CHARGES
Section 8.01. Maintenance of Eouioment bv Lessee. Lessee agrees that at all times during the Lease Term, Lessee
will, at Lessee's own cost and expense, maintain, preserve and keep the Equipment in good repair, working order and
condition, and that Lessee will from time to time make or cause to be made all necessary and proper repairs,
replacements and renewals. Lessor shall have no responsibility in any of these maners, or for the making of
improvements or additions to the Equipment.
Section 8.02. Taxes. Other Governmental Charges and Utility Charges. The parties to this Lease Agreement
contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and, therefore, that
the Equipment will be exempt from all taxes presently assessed and levied with respect to personal property. In the event
that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form (except for income
taxes of Lessor), Lessee will pay during the Lease Term, as Additional Rental, as the same respectively come due, all
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taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or
with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal
or replacement of. or a modification, improvement or addition to the Equipment. as well as all gas, water, steam,
electricity, heat, power, telephone. utility and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Equipment; provided that, with respect to any governmental charges that may lawfully be paid in
installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during the
time this Lease Agreement is in effect.
Section 8.03 Insurance. The Lessee shall secure and maintain or cause to be secured and maintained at all times
with insurers of recognized responsibility or through a program of self-insurance to the extent specifically permined in
this Section. all coverage with respect to the Equipment required by this Section,
Such insurance shall consist of:
(I) A policy or policies of insurance against loss or damage to the Equipment known as "all risk," including theft,
earthquake and flood, Such insurance shall be maintained at any time in an amount not less than the lesser of (i) the full
replacement value of the Equipment or (ii) the aggregate nnpaid principal component of Base Rental allocable to the
Equipment. Such insurance may at any time include a deductible clause providing for a deductible not to exceed
$1,000,000 for all losses in any year; provided, however. that the Lessee's obligation under this clause (I) shall be
satisfied by self-insurance under the City's Equipment Replacement Reserve Fund;
(2) Comprehensive general liability coverage against claims for damages including death, personal injury, bodily
injury, or property damage arising from the condition of, or operations involving, the Equipment. Such insurance shall
afford protection with a combined single limit of not less than $1,000,000 per occurrence with respect to bodily injury,
death or property damage liability, or such greater amount as may from time to time be recommended by the Lessee's
risk management officer or an independent insurance consultant retained by the Lessee for that purpose; provided,
however, that the Lessee's obligations under this clause (2) may be satisfied by self-insurance;
(3) Workers' compensation insurance issued by a responsible carrier authorized under the laws of the State to insure
employers against liability for compensation under the Labor Code of the State, or any act hereafter enacted as an
amendment or supplement thereto or in lieu thereof, such workers' compensation insurance to cover all persons employed
by the Lessee in connection with the Equipment and to cover full liability for compensation under any such act aforesaid;
provided, however, that the Lessee's obligations under this clause (3) may be satisfied by self-insurance; and
Further, Lessee shall maintain or cause to be maintained at its expense throughout the Lease Term, rental
interruption insurance against loss of use of the Equipment or portions thereof with coverage equal to the maximum total
Base Rental Payments payable by Lessee for any consecutive 24 month period. The policy shall insure against abatement
of Base Rental Payments payable by Lessee resulting from Lessee's loss of use of the Equipment or any substantial
portion thereof and caused by any and all perils, either insured or uninsured, including acts of God. Such insurance shall
be payable to Lessor in amounts proportionate to Lessee's loss of use of the Equipment and the corresponding rental
abatement, if any, and shall supplement Lessee's applicable Base Rental Payments, if any, during the restoration period
in sufficient amount to make Lessor whole.
All policies or certificates issued by the respective insurers for insurance, with the exception of workers'
compensation insurance, shall provide that such policies or certificates shall not be canceled or materially changed without
at least 30 days' prior written notice to the Lessor.
Annually, and upon the provision of any new insurance policy or the renewal of any existing policy, the Lessee shall
provide the Lessor with a certificate stating that the Lessee is in full compliance with the requirements of this Section.
The Lessor shall be entitled to rely upon any certificate so provided as to the Lessee's compliance with this Section, and
the Lessor shall have no further duties in that regard.
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All policies or cenificates of insurance provided for herein shall name, where applicable, the Lessee as a named
insured, and the Lessor as additional insured.
Notwithstanding the generality of the foregoing, the Lessee shall not be required to maintain or cause to be
maintained more insurance than is specifically referred to above or any policies of insurance other than standard policies
of insurance with standard deductibles offered by reputable insurers at a reasonable cnst on the open market; provided,
however, that if the Lessee determines that any such insurance is not offered by reputable insurers at a reasonable cost
on the open market. or for any other reason the Lessee elects. with respect to those risks set forth above for which self-
insurance is permitted. not to maintain the insurance with outside insurers as described above, it will self-insure those
risks for which insurance is otherwise required. If the Lessee is permitted to and does self-insure under this provision,
then, except for any self-insurance for workers' compensation to which this sentence shall not apply, the Lessee will
establish and fund reserves which, in the opinion of the Lessee's risk manager, are adequate and such reserves shall be
valued annually by the Lessee's risk manager and a report of such valuation delivered to the Lessor.
ARTICLE IX
DAMAGE, DESTRUCTION, THEFI' AND CONDEMNATION:
USE OF NET PROCEEDS
Section 9,01. Damage, Destruction, Theft and Condemnation: Use of Net Proceeds, Unless Lessee shall have
exercised its option to purchase the Equipment hy making payment of the Purchase Price as provided herein, if prior to
the termination of the Lease Term (a) the Equipment or any portion therenf 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 or the estate
of Lessee or Lessor in the Equipment or any part thereof shall be taken under the exercise of the power of eminent
domain by any governmental body or by any person, firm, or corporation acting under governmental authority, Lessee
and Lessor will cause the Net Proceeds of any insurance claims or condemnation award to be applied to the prompt
repair, restoration. modification, improvement or replacement of such Equipment. Any balance of the Net Proceeds
remaining after such work has been completed shall be paid to Lessee.
For purposes of this Article IX. the term "Net Proceeds" shall mean the amount remaining from the gross proceeds
of any insurance claim or condemnation award after deducting all expenses (including attorneys' fees) incurred in the
collection of such claim or award.
Alternatively, the Lessee. at its option, with the written consent of the Lessor, may elect not to repair. reconstruct
or replace the damaged, stolen, destroyed or condemned Equipment and thereupon shall cause said proceeds to be used
for the prepayment, in accordance with Section 6,06 hereof, of the Base Rental Payments,
ARTICLE X
DISCLAIMER OF WARRANTIES; VENDORS'
WARRANTIES; USE OF THE EQUIPMENT
Section 10,01. Disclaimer of Warranties, LESSOR MAKES NO WARRANTY OR REPRESENTATION,
EITHER 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 an incidental, indirect, special or consequential damage
in connection with or arising out of this Lease Agreement or the existence, furnishing, functioning or Lessee's use of
any item or product or services provided for in this Lease Agreement.
THE LESSEE CONFIRMS THAT IT HAS MADE (OR WILL MAKE) THE SELECTION OF EACH ITEM OF
EQUIPMENT ON THE BASIS OF ITS OWN JUDGMENT AND EXPRESSLY DISCLAIMS RELIANCE UPON ANY
STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY THE LESSOR, THE LESSOR SHALL NOT
BE LIABLE TO THE LESSEE FOR ANY MATTER RELATING TO THE ORDERING, MANUFACTURE,
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PURCHASE, DELIVERY, ASSEMBLY, INSTALLATION, TESTING, OWNERSHIP. USE, POSSESSION,
OPERATION OR SERVICING OF THE EQUIPMENT OR FOR ANY CLAIM, LOSS, DAMAGE OR EXPENSE OF
ANY KIND CAUSED BY THE EQUIPMENT,
Section 10,02 Vendor's Warranties, Lessor hereby irrevocably appoints Lessee its agent and anorney-in-factduring
the Lease Term, so long as Lessee shall not be in default hereunder, to assert from time to time whatever claims and
rights. including warranties of the Equipment. which Lessor may have against the Vendor of the Equipment, 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, nor shall such maner have any effect whatsoever on the rights and obligations of
Lessor with respect to this Lease Agreement, including the right to receive full and timely payments hereunder. Lessee
expressly acknowledges that Lessor makes, and has made. no representation or warranties whatsoever as to the existence
or availability of such warranties of the Vendor of the Equipment.
Section 10,03, Use of the Eouioment, Lessee will not knowingly install, use, operate or maintain the Equipment
in violation of any applicable law or in a manner contrary to that contemplated by this Lease 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 (including, without limitation, with respect to the use, maintenance and operation
of each item of the Equipment) with all laws of the jurisdictions in which its operations involving any item of Equipment
may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the
items of the Equipment; provided, however, that Lessee may contest in good faith the validity or application of any such
law or rule in any reasonable manner which does not, in the opinion of Lessor, adversely affect the estate of Lessor in
and to any of the items of the Equipment or its interest or rights under this Lease Agreement.
ARTICLE XI
OPTION TO PURCHASE
Section 11.01 Ootion to Purchase, At the request of Lessee, Lessor's security interest in an item of Equipment
will be terminated and this Lease Agreement shall terminate with respect thereto as follows:
<a) at the end of the Lease Term with respect to such item of Equipment upon payment in full of Rental Payments
due hereunder; or
(b) in the event of total damage, destruction or condemnation of an item of Equipment and,
(c) if Lessee is not on such date in default under this Lease Agreement, upon payment of the Purchase Price of
such item of Equipment to the Lessor in accordance with Sections 6,06 and 9,01 hereof,
ARTICLE XII
ASSIGNMENT, SUBLEASING, INDEMNIFICATION
MORTGAGING AND SELLING
Section 12.01. Assignment bv Lessor. Lessee acknowledges and consents to Lessor's assignment of its right to
receive Base Rental Payments and certain of its rights to enforce payment hereunder to various assignees and hereby
agrees to make Base Rental Payments to such address in the United States as shall be designated by Lessor.
Section 12.02. No Sale. AssilIoment or Subleasing bv Lessee. This Lease Agreement and the interest of Lessee
in the Equipment may not be sold, assigned or encumbered by Lessee without the prior wrinen consent of Lessor and
Assignor,
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The Lessee represents that the Equipment shall be and at all times shall remain separately identifiable personal
property, The Lessee shall. at its expense. take such action as may be necessary to prevent any third party from acquiring
any right to or interest in the Equipment by virtue of the Equipment being deemed to be real property or a part of other
personal property, If requested by Lessor, the Lessee shall attach to and maintain on the Equipment a conspicuous plate,
label or marking disclosing the ownership interest of the Lessor therein and disclosing any security interest therein
entered into under Section 7,02 hereof,
Section 12,03, Release and Indemnification Covenants, To the extent permitted by the laws and Constitution of
the State. Lessee shall protect, hold harmless and indemnify Lessor and its assignees from and against any and all
liability, obligations, losses, claims and damages whatsoever arising in connection with this Lease Agreement, regardless
of cause thereof, and expenses in connection therewith, including, without limitation, counsel fees and expenses,
penalties and interest arising out of or as the result of the Lessee entering into of this Lease Agreement (except if arising
out of the Lessor's negligence or willful misconduct), the ownership of any item of the Equipment, the ordering.
acquisition. use, operation. condition, purchase, delivery. rejection. storage or return of any item of the Equipment 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. The indemnification arising under this paragraph
shall continue in full force and effect notwithstanding the full payment of all obligations under this Lease Agreement or
the termination of the Lease Term for any reason, To the extent permitted by law. Lessee agrees not to withhold or
abate any portion of the payments required pursuant to this Lease Agreement by reason of any defects. malfunctions,
breakdowns or infirmities of the Equipment. The Lessee and the Lessor mutually agree to promptly give notice to each
other of any claim or liability hereby indemnified against following knowledge thereof,
ARTICLE XIII
EVENTS OF DEFAULT AND REMEDIES
Section 13,01 Events of Default Defined, The following shall be "events of default" under this Lease Agreement
and the terms "event of default" and "default" shall mean. whenever they are used in this Lease Agreement. anyone or
more of the following events:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time
specified herein; and
(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 Section 13.01(a), for a period of 30 days after wrinen 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. 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.
If by reason of force maieure Lessee is unable in whole or in part to carry out its agreement on its part herein
contained, other than the obligations on the part of Lessee contained in Article VI hereof, Lessee shall not be deemed
in default during the continuance of such inability. The term "force majeure" as used herein shall mean, without
limitation. the following: acts of God, strikes, lockouts or other industrial disrurbances; acts of public enemies, orders
or restraints of any kind of the government of the United States of America or of the state wherein Lessee is located or
any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides;
earthquakes; fires; storms; droughts; floods; or explosions.
CCR244P:OPT AGREE,2:060994
14
94 325
Section 13,02, Remedies on Default, Whenever any event of default referred to in Section 13,01 hereof shall have
happened and be continuing. Lessor shall have the right, at its sole option without further demand or notice. to take one
or any combination of the following remedial steps:
(a) To terminate this Lease Agreement, or, with the consent of the Lessee which consent shall not be unreasonably
withheld, to keep this Lease Agreement in full force and effect. and in either event, to retake possession of the Equipment
and sell, lease or sublease the Equipment for the account of Lessee upon such terms and conditions as the Lessor may
deem advisable. in which event the rental received on such re-lening shall be applied first to the expenses of re-letting
and collection, including expenses necessary for repair or restoration of the Equipment or any portion thereof to its
original condition (taking into account normal wear and tear), and then to the payment of Base Rental and Additional
Rental Payments then due. and if a sufficient sum shall not be thus realized to pay all Base Rental and Additional Rental
payments then due, then. if this Lease Agreement shall not have been terminated. the Lessee shall pay to the Lessor any
net deficiency existing on the date when Base Rental or Additional Rental is due hereunder;
(b) To take whatever action at law or in equity may appear necessary or desirable to enforce its rights as the owner
of the Equipment and to collect the Rental Payments then due or thereafter to become due during the Lease Term or to
enforce performance and observance of any obligation, agreement or covenant of the Lessee hereunder,
The Lessee hereby waives any and all claims for damages caused or which may be caused by the Lessor in taking
possession of the Equipment as herein provided and all claims for damages that may result from the destruction of or
injury to the Equipment and all claims for damages to or loss of any property belonging to the Lessee, or any other
person, that may be on or about the Equipment.
In the event that either party brings an action to enforce any of the terms and provisions of this Lease Agreement.
the non-prevailing party agrees to pay a reasonable amount as and for anorney's fees incurred by that in attempting to
enforce any of the remedies available to that party hereunder. whether or not a lawsuit has been filed and whether or
not any lawsuit culminates in a judgment,
Section 13,03 No Remedv Exclusive, No remedy herein conferred upon or reserved to either party 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 Agreement or now or hereafter existing at law Of 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 and power may be exercised from time to time and as often as may be deemed expedient.
ARTICLE XIV
MISCELLANEOUS
Section 14.01. Notices. 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 at their respective
places of business.
Section 14,02, Binding Effect, This Lease Agreement shall inure to the benefit of and shall be binding upon
Lessee and Lessor and their respective successors and assigns.
Section 14.03. Severabilitv. In the event any provision of this Lease Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other
provision hereof.
Section 14.04. Amendments. The terms of this Lease Agreement may be waived, altered, modified.
supplemented or amended by a written instrument signed by the Lessor and the Lessee; provided that no such waiver,
alteration. modification, supplement or amendment shall be made which impairs the obligation to make Base Rental
Payments as affects the amount of such Base Rental Payments.
CCR244P:OPT AGREE,2 :060994,
15
94 325
Section 14.05. Access to Premises. The Lessor and its designee shall have the right to eoter the premises where
the Equipment is located during reasonable business hours (and in emergencies at all times) (i) to inspect the same and
(ii) for purposes connected with the Lessor's rights or obligations hereunder,
Section 14,06, Net-net-net Lease, This Lease Agreement shall be deemed and construed to be a "net-net-net
lease" and the Lessee hereby agrees that the Rental Payments shall be an absolute net rernrn to the Lessor, free and clear
of any expenses, charges or set-offs whatsoever, except to the extent expressly provided in this Lease Agreement,
Section 14,07, Further Assurances and Corrective Instruments, The Lessee and the Lessor agree that they will,
from time to time, execute, acknowledge and deliver, or cause to be executed. acknowledged and delivered, 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 to be so leased or for carrying out the expressed intention of this
Lease Agreement.
Section 14.08, Execution in Countemarts. This Lease Agreement may be executed in several counterparts, each
of which shall be an original and all of which shall constirnte but one and the same instrument.
Section 14,09, ADDlicable Law, This Lease Agreement shall be governed by and construed in accordance with
the laws of the State of California,
Section 14.10. CaDtions. The captions or headings in this Lease Agreement are for convenience only and in no
way define, limit or describe the scope or intent of any provisions or section of this Lease Agreement.
"'."'End of Master Lease Agreement"'..
CCR244P:OPT AGREE,2:060994
16
94 325
EXHIBIT
CERTIF1CATE OF ACCEPTANCE
The undersigned, as Lessee (the "Lessee") under the Master Lease Agreement Supplement (the "Supplement") dated
as of , 19_. with Smith Mitchell Investment Group Inc,. as Lessor, acknowledges receipt in good
condition of the portion of the Equipment described in the Supplement set forth below on , 19_. and
further certifies that Lessor has fully and satisfactorily performed all of its covenants and obligations required under the
Lease Agreement of which the Supplement is a part,
Purchase Order No,
Ouantitv
Cost
Total
Description of
Equipment:
Useful Life of
Equipment:
CCR244P:OPT AGREE,2:060994
--1
-.>,-<><.
r .
" ')5
JiW
EXHIBIT B
OPINION OF COUNSEL
Lessee:
Lessor: Smith Mitchell Leasing Services Group Ud.
135 Main Street. Suite 1120
San Francisco, California 94105
Re: Master Lease Agreement by and between Smith Mitchell Leasing Services Group Ud.
("Lessor").~d [Lessee] ("Lessee")
Ladies and Gentlemen:
I have acted as counsel to the Lessee with respect to the Master Lease Agreement and the Master Lease
Supplement No, _ (together the "Lease") and various related matters. and in this capacity have reviewed
a duplicate original or Certified copy thereof among Lessor and Lessee. Based upon the examination of
these and such other documents as I deem relevant, it is my opinion that:
(I) Lessee is a political subdivision of the state of California (the "State"), duly organized,
existing and operating under the-Constitution and laws of the State,
(2) Lessee is authorized and has power under applicable law to enter into the Lease, and to
carry out its obligations thereunder and the transactions contemplated thereby,
(3) The Lease has been duly authorized, approved, executed and delivered by and on behalf
of the Lessee, and are legal, valid, binding contracts of the Lessee enforceable in accordance with their
terms, except to the extent limited by State and Federal laws affecting remedies and bankruptcy,
reorganization or other laws of general application relating [0 or affecting the creditors' rights.
(4) The authorization. approval and execution of the Lease and all other proceedings of
Lessee relating to the transaction contemplated thereby have been performed in accordance with all
applicable open meeting, public records, public bidding and all other laws, rules and regulations of the
State.
.
(5) The execution of the Lease and the appropriation of moneys to pay the Rental Payments
coming due thereunder do not and will not result in the violation of any constitutional, statutory or other
limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee,
(6) There is no litigation, action suit or proceeding pending or before any court.
administrative agency, arbitrator or governmental body, that chaIlenges the organization or existence of
the Lessee; the authority of its officers or its employees to enter into the Lease and other documents
contemplated thereby; the appropriation of moneys to make Rental Payments under the Lease for the
current fiscal year of Lessee; or the ability of Lessee [0 otherwise perform its obligations under the
Lease, and the transactions contemplated thereby,
(7) Resolution No, _ of the governing body of Lessee was duly and validly adopted by
such governing body on . 19_. and such resolution has not been amended, modified,
supplemented or repealed and remains in full force and effect.
Very truly yours
SEP 21 '94 05:16PM SMITH MITCHELL L.R. P.2
94 325
SCHEDULE A
City of San Barnardino
800 MHO RadIo Syst...
propolad Equlponont l.... FInancing
L.... P.yment Schedule
---------.......---......--.-------...........................................
Int.r..t
"llmlnl Monthly Portion at prlncipel EndIng
Oat. .Itene. P_t 6.300X Port i on Illlnee
04130/95 2,133,070.00 150,000.00 67,191.71 82,808.30 2,050,261.71
05130195 2,050,261.71 25,300.00 10,763.87 14,536.13 2,035,725.58
06130/95 2,035,725.58 25,300.00 10,687.56 14,612.44 2,021,113.14
07/30/95 2,021,113.14 25,300.00 10,610.84 14,689.16 2,006,423.98
08130/95 2.006,423.98 25,300.00 10,533.73 14,766.27 1,991,657.71
09130/95 1,991.657.71 25,300.00 10.456.20 14,843.80 1,976,813.91
10/30/95 1,976,813.91 25,300.00 10,378.27 14,921.73 1,961,892.18
11/30/95 1,961,892.18 25,300.00 10,299.93 15,000.07 1,946,892.12
12/30195 1,946,892.12 25,300.00 10,221.18 15,078.82 1,931,813.30
01/30/96 1,931,813.30 25,300.00 10,142.02 15,157.98 1,916,655.32
02/28196 1,916,655.32 25,300.00 10,062.44 15,237.56 1,901,417.76
03130/96 1,901,417.76 25,300.00 9,982.44 15,317.56 1.886,100.21
04/30/96 1,886,100.21 25,300.00 9,902.03 15,397.97 1,870,702.23
05/30/96 1,870,702.23 25,300.00 9,821. ,9 15,478.81 1,855,223.42
06/30/96 1,855,223.42 25,300.00 9,739.92 15,560.08 1,839,663.34
07/30/96 1,839,663.34 25,300.00 9,658.23 15,641.77 1,824,021.57
08130/96 1,824,021.57 25,300.00 9,576.11 15,723.89 1,808,297.69
09/30/96 1,808.297.69 25,300.00 9,493,56 15.806.44 1,792,491.25
10130/96 1,792,491.25 25.300.00 9,410.58 15.889.42 1,776,601.83
11130/96 1,776.601.83 25,300.00 9,327.16 15,972.84 1,760,628.99
12/30/96 1,760,628.99 25,300.00 9,243.30 16,056.70 1,744.572.29
01/30/97 1.744,572.29 25.300.00 9,159.00 16,141.00 1,728,431.30
02128/97 1,728,431.30 25,300.00 9,074.26 16,225.74 1,712,205.56
03/30/97 1,712,205.56 25,300.00 8,989.08 16,310.92 1,695,894.64
04/30/97 ',695,894.64 25,300.00 8,903.45 16,396.55 1,679,498.09
05/30/97 1,679,498.09 25,300.00 8,817.36 16,482.64 1,663.015.45
06/30/97 1,663,015.45 25.300.00 8,730.83 16,569.17 1.646,446.28
07130/97 1,646,446.28 25,300.00 8,643.84 16,656.16 1,629,790.12
08130/97 1,629,790.12 25.300.00 8,556.40 16,743.60 1,613,046.52
09/30/97 1,613,046.52 25,300.00 8,468.49 16,831.51 1,596,215.02
10/30/97 1,596,215.02 25,300.00 8,380.13 16,919.87 1,579,295.15
11130/97 1,579,295.15 25,300.00 8,291.30 17,008.70 1,562,286.45
12130/97 1,562,286.45 25,300.00 8,202.00 17,098.00 1,545,188.45
01/30198 1,545,188.45 25,300.00 8,112.24 17,187.76 1,528.000.69
02/28/98 1,528.000.69 25,300.00 8,022.00 17,278.00 1,510,722.69
03/30/98 1,510,722.69 25,300.00 7,931.29 17,368.71 1,493.353.99
04130/98 1,493,353.99 25,300.00 7,840.11 17,459.89 1,475,894.09
05/30/98 1,475,894.09 25,300.00 7,748.44 17,551.56 1,458,342.54
06/30/98 1,458,342.54 25.300.00 7,656.30 17,643.70 1,440,698.84
07130/98 1,440,698.84 25,300.00 7,563.67 17,736.33 1,422,962.51
08/30/98 1,422,962.51 25,300.00 7,470.55 17,829.45 , ,405,133.06
09130/98 1,405.133.06 25,300.00 7,376.95 17,923.05 1,387,210.01
10130/98 1,387,210.01 25,300.00 7,282.85 18,017.15 1,369.192.86
11/30/98 1,369,192.86 25,300.00 7,188.26 18,111.74 1,351,081.12
smith M;tchell Investment Group Inc. 09/21/94 P... 1
SEP 21 '94 05:17PM SMITH MITCHELL L.A. P.3
94 325
City of San .ernardtno
800 MHz .ldlo'Syitom
Propo.." Equipment Lei" Financing
Lei" Payment Schedule
....----------.----..------.....---....-----..--.-----.......--..----.........
tnt.reat
Bl1Iiming Month! y porttan at PrincipII Ending
Date SIlane. P.'/IIIOf1t 6.300" Porti on allane.
12130/98 1.351,081.12 25,300.00 7,093.18 18,206.82 1 ,332,874.30
01130/~ 1.332,874.30 25,300.00 6,997.59 18,302.41 1,314,571.89
02/28/~ 1,314,571.89 25,300.00 6,901.50 18,398.50 1,296,173.39
03/30/99 1,296,173.39 25,300.00 6,804.91 18,495.09 1,2n,678.30
04/30/99 1,2n,678.30 25,300.00 6,707.81 18,592.19 1,259,086.11
05/30/99 1,259,086.11 ~,300.00 6,610.20 18,689.80 1.240,396.31
06/30/99 1,240,396.31 25,300.00 6,512.08 18,787.92 1,221,608.39
07130/99 1.221,608.39 25,300.00 6,413.44 18,886.56 1,202,721.84
08130199 1,202,721.84 25,300.00 6.314.29 18,985.71 1,183.736.13
09130/99 1,183,736.13 25,300.00 6,214.61 19,085.39 1,164,650.74
10/30/99 1,164,650.74 25,300.00 6,114.42 19,185.58 ',145,465.16
11/30/99 1,145,465.16 25,300.00 6,013.69 19,286.31 1,126,178.85
12/30/99 1,126,178.85 25,300.00 5,912.44 19,387.56 1,106,791.29
01/30/2000 1, 106, ~1 .29 25,300.00 5,810.65 19,489.35 1,087,301.95
02/28/2000 1,087,301.95 25.300.00 5,708.34 19,591.66 1,067,710.28
03/30/2000 1,067.710.28 25,300.00 5,605.48 19,694.52 1,048,015.76
04/30/2000 1,048,015.76 25,300.00 5,502.08 19,~7.92 1.028,217.84
05130/2000 1,028,217.84 25,300.00 5,398.14 19,901.86 1,008.315.99
06/30/2000 1,008,315.99 25,300.00 5.293.66 20,006.34 988,309.64
07130/2000 988,309.64 25,300.00 5,188.63 20,111.37 968,198.27
08/30/2000 968,198.27 25,300.00 5,083.04 20,216.96 947,981.31
09/30/2000 947,981.31 25,300.00 4,976.90 20,323.10 927,658.21
10/30/2000 927,658.21 25.300.00 4,870.21 20,429.79 907,228.42
11/30/2000 907,228.42 25.300.00 4,762.95 20,537.05 886,691.37
12130/2000 886,691.37 25,300.00 4,655.13 20,644.87 866,046.50
01/30/2001 866,046.50 25,300.00 4,546.74 20,753.26 845,293.24
02/28/2001 845,293.24 25,300.00 4,437.79 20,862.21 824,431.03
03130/2001 824,431.03 25.300.00 4,328.26 20,971.74 803,459.29
04/30/2001 803,459.29 25,300.00 4,218.16 21,081.84 782,3n .46
05/30/2001 782,3n .46 25,300.00 4,107.48 21,192.52 761.184.94
. 06130/2001 761,184.94 25,300.00 3,996,22 21,303.78 739.881. 16
07130/2001 739,881.16 25.300.00 3,884.38 21,415.62 718,465.53
08/30/2001 718,465.53 25,300.00 3,n1.94 21,528.06 696,937.48
09/30/2001 696.937.48 25,300.00 3,658.92 21,641.08 675,296.40
10/30/2001 675,296.40 25.300.00 3,545.31 21,754.69 653,541. 71
11/30/2001 653,541.71 25,300.00 3,431.09 21,868.91 631,672.80
12/30/2001 631,672.80 25,300.00 3,316.28 21.983,72 609,689,08
01/30/2002 609,689.08 25,300.00 3,200.87 22.099.13 587,589.95
02/28/2002 587,589.95 25,300.00 3,084.85 22,215.15 565,374.80
03130/2002 565,374.80 25,300.00 2,968.22 22,331.78 543,043.01
04/30/2002 543,043.01 25,300.00 2,850.98 22,449.02 520,593.99
05130/2002 520,593.99 18,800.97 2,733.12 16,067.85 504,526.14
06130/2002 504,526.14 18,800.97 2,648,76 16,152.21 488,373.93
07/30/2002 488,373.93 18,800.97 2,563.96 16,237.01 472,136.92
Smith Mitchell Inve.tment Group Inc. 09/21/94 PIge 2
SEP 21 '94 05:18PM SMITH MITCHELL L.A. P.4
94 325
City of Sin B.rn.~tnQ
800 MHI Rodi 0 .VU"
Propoaod Equlpnont L.... finoncl",
L.la. Plynont Schedul.
.....~-._...-..........................------_..._--_........-.--...----......
Inter.at
8.glnning Month IV portton It Prlneipol Ending
Dot. Blllne. PlVNnt 6.3001 Portion Bllance
01/30/2002 472,136.92 11.800.97 2,478.72 16,322.25 455,114.67
09/30/2002 455,114.67 11.800.97 2,393.03 16.407.94 439,406.73
10/30/2002 439,406.73 18.800.97 2,306.89 16,494.01 422,912.65
11/30/2002 422,912.65 11,800.97 2,220.29 16,580.68 406,331.97
12/30/2002 406.331.97 11,100.97 2,133.24 16.667.73 389,664.24
01/30/2003 389,664.24 18,800.97 2,045.74 16,755.23 372,909.01
02/28/2003 372,909.01 18,800.97 1,957.77 16,843.:!0 356.065.81
03/30/2003 356,065.81 18,800.97 1,869.35 16,931. ;2 339,134.18
04/30/2003 339,134.18 18,800.97 1,780.45 17,D20.i2 322,113.67
05/30/2003 322,113.67 18,800.97 1,691.10 17,109.87 305,003.80
06/30/2003 305,003.80 18,800.97 1,601.27 17,199.70 287,804.10
07/30/2003 287,804.10 18,800.97 1,510.97 17,290.00 270,514.10
08130/2003 270,514.10 18,800.97 1,420.20 17,380.77 253,133.33
09/30/2003 253,133.33 18.800.97 1,328.95 17,472.02 235.661.31
10/30/2003 235,661.31 18.800.97 1,237.22 17,563.75 218,097.56
11/30/2003 218,097.56 18,800.97 1,145.01 17,655.96 200,441.60
12/30/2003 200.441.60 18,800.97 1,052.32 17,748.65 182.692.95
01130/2004 182,692.95 18,800.97 959.14 17,841.83 164,851.12
02/28/2004 164,851.12 11,800.97 865.47 17,935.50 146,915.62
0313012004 146,915.62 18,800.97 771.31 18,029.66 128,885.95
04/30/2004 128,885.95 18,800.97 676.65 18,124.32 110,761.63
05130/2004 110,761.63 18,800.97 581.50 18,219.47 92,542.16
06/30/2004 92,542.16 18,800.97 485.85 18,315.12 74,227.04
07/30/2004 74,227.04 18,800.97 389.69 18.411.28 55,815.76
08/30/2004 55,815.76 18,800.97 293.03 18.507.94 37,307.82
09130/2004 37,307.82 18.800.97 195.87 18,605.10 18,702.72
10/30/2004 18,702.72 18,800.91 98.19 18,702.72 0.00
-------..... ............ ---....---.. ---..---.--- ...-.........
2,133.070.002.839,229.04 706,159.042,133,070.00 0.00
===se=...... ~=.W2==~=== ============ ============ ....--..-------
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SmIth Mltch.ll Inv.atmont Group Inc.
09/21194
Pig. 3
94 325
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