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HomeMy WebLinkAbout1991-488 I 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. 91-488 RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE PURCHASE MASTER CONTRACT FOR MUNICIPAL LEASING CORPORATION FOR THE FURNISHING OF LEASE PURCHASE FINANCING. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. That Lease Purchase Master Contract from Municipal Leasing Corporation, a copy of which is attached hereto and incorporated herein as Exhibit "A", is accepted by the City of San Bernardino for furnishing of Lease Purchase Financing; pursuant to this determination, the Master lease Purchase Contract award shall only be effective upon the execution an Agreement by the Mayor of the City of San Bernardino. SECTION 2. This Agreement shall not take effect until fully signed and executed by both parties. The City shall not be obligated hereunder unless and until the Agreement is fully executed and no oral agreement relating thereto shall be implied or authorized. The authorization to execute the above referenced agreement is rescinded if the parties to the agreement fail to execute it within sixty (60) days of the passage of this resolution. SECTION 3. No transactions shall be initiated under the Master Lease contained in this agreement without the approval of the Mayor and Common Council. / / / / / / / / / / / / / / / / / / / / / / / / 11-13-91 -1- 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 PURCHASE MASTER CONTRACT FOR MUNICIPAL LEASING THE FURNISHING OF LEASE PURCHASE FINANCING. ACCEPTING LEASE CORPORATION FOR SECTION 4. The City shall not be obligated hereunder until a lease purchase schedule transaction for material, equipment, supplies or contracted services is executed with the vendor under this contract. SECTION 5. The Purchasing Agent, Director of Finance and the City Attorney are hereby authorized to execute such documents as are necessary for the administration of this transaction. I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a reqular meeting thereof, held on the , 199 1 , by the following 2nd day of December vote, to wit: ABSENT Council Members: NAYS ABSTAIN AYES ESTRADA x REILLY x HERNANDEZ x MAUDSLEY x x MINOR POPE-LUDLAM x MILLER x /fartlwl /(w.J!Wfi ~ ',cfrlnc/fl,;)!{f}( . City' 1 rk II. -+- LLt tlJUUf ! 0' 11{'-.. ) 11-13-91 -2- 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 ACCEPTING LEASE PURCHASE MASTER CONTRACT FOR MUNICIPAL LEASING CORPORATION FOR THE FURNISHING OF LEASE PURCHASE FINANCING. is hereby approved this 5th day The foregoing resolution of December ,1991 . /m <~d _ / /p(f-y / W. . olc mb, Mayor City 0 Sa Bernardino Approved as to form and legal content: James F. Penman, Ci ty ,!I']t torney, , 1 , 11-13-91 -3- , .. \, City of S Bdno Res. 91-488 CONDITIONAL SALE AGREEMENT NO.1 08 TI-IIS CONDmONAL SALE AGREEMENT No. 108 dated as of October 28, 1991 by and between Municipal Leasing Corporation ("Seller"), a Virginia corporation whose principal place of business is 11150 Sunset Hills Road, Suite 240, Reston, Virginia 22090 and the City of San Bernardino ("Purchaser"). Purchaser is located at: City of San Bernardino, 300 North 0 Street, San Bernardino, CA 92418. WHEREAS Seller desires to sell the Equipment, as hereinafter defined, and Purchaser agrees to purchase the Equipment and to perform under the Conditional Sale Agreement Terms and Conditions (1/91) attached hereto and made a part hereof, the parties hereby agree as follows: _ The foregoing addresses shall be used for all correspondence and notices from one party to the other and may be changed only by notifying the other party in writing. All notices shall be sent by registered mail, return receipt requested. Purchaser is a Political Subdivision of the State of California eState"). Purchaser's Fiscal Period is from July 1 to June 30. The name and title of the Purchaser's Authorized Signatory is Dean Meech, Purchasinq Agent, City of San Bernardino _ The name and title of the SeUer'sAuthorized Signatory is Bruce M. Bowen, President. This Conditional Sale Agreement consists of this signature page ("Page 1"), the Conditional Sale Agreement Terms and Conditions (1/91) consisting of 10 pages numbered 2 to 11, and the Riders listed below, all of which are intended together to constitute one instrument. Each transaction hereunder shall be evidenced by the parties' execution of a Schedule, as herein defined, which, together with the Exhibits annexed thereto, shall constitute a separate agreement between Purchaser and Seller. By its execution below, Purchaser represents that (i) it has read and understands the attached Conditional Sale Agreement Terms and Conditions (1/91) and Riders listed below and (ii) as of the date of execution hereof, all of the covenants, warranties and representations set forth herein apply with full force and effect. Annexed hereto are the following Riders, the terms and conditions of which shall govern in the event of any conflict or inconsistency with the Conditional Sale Agreement Terms and Conditions 0/91): none applicable. IN WITNESS WHEREOF, the parties hereto have caused this Conditional Sale Agreement No. 108 to be executed by their duly authorized representatives as of the day and year first written above. MUNICI~~ASING.C~RPORATION BY ,I / 4u_c fll 1lu.u. NAME: &0"" 11~ I~' '" ( ,.J TITLE: ,04 U 1vJ~~r DATE:-1it,liJ/}y('f 'Z, /qqL ) AP'P~OVED AS TO FORM AND LEGAL CONTENT. BY-~ y NAM: 7 TITLE: Ma DATE: Attest: OA ~~ );"mc:) F. Penman" ",,;" ~ ;g::: 7- I~-- of San Bernardino ~ 1 - CONDITIONAL SALE AGREEMENT TERMS AND CONDITIONS (1/91) Agreement No. 108 1.0 Definitions For purposes of the Agreement and the Transaction Documents, the following definitions will apply: "Acceptance Date" is the date upon which Purchaser, after opportunity for inspection as provided herein, certifies the Equipment to be accepted and in conformity with the criteria set forth in the Acceptance Certificate attached hereto. Unless otherwise established in writing between the parties hereto, Purchaser (i) agrees that reasonable opportunity for inspection shall be five (5) working days, inclusive, from the date the Equipment is delivered; and (ii) agrees to deliver the Acceptance Certificate, duly completed and executed, promptly upon acceptance of the Equipment, or to notify Seller of rejection of the Equipment within such five-day inspection period. Upon delivery of the Acceptance Certificate or failure of Purchaser to notify Seller of rejection as set forth above, it shall be conclusively presumed for the purposes of the Agreement that the Equipment meets Purchaser's requirements in all substantial respects. "Agreement" consists of (i) a Schedule and the Exhibits annexed thereto and (ii) these Conditional Sale Agreement Terms and Conditions and any Riders specified on the signature page ("Page 1") hereof, which together are incorporated into the Schedule. "Assignee" means the entity to whom, as further described in Section 9.0 hereof, the rights, title and interest of Seller in, to and under the Agreement may be transferred and its assignee. "Assignment Agreement" means the Assignment Agreement which, in connection with the execution of the Agreement, Seller may enter into with the Assignee, pursuant to which Seller may assign all of its right, title and interest in and to the Agreement, including, without limitation, Purchaser's obligation hereunder to make the Payments for the Equipment under the Agreement, and Assignment Agreements transferring the rights and interests of Assignee in the Agreement to subsequent Assignees, as further described in Section 9.0 and 9.1 hereof. "Authorized Signatory" means the person whose title is specified as "Authorized Signatory" on Page 1 hereof, or the duly authorized designee thereof. "Commencement Date" means the Commencement Date set forth in each Schedule and upon which the term of such Schedule begins. "Equipment" means the property described on Exhibit A to the Schedule. If serial numbers are not initially provided, Purchaser hereby authorizes Seller to insert, when available, actual serial numbers on Seller's copy of Exhibit A to the Schedule. "Equipment Costs" means all costs of payment of, or reimbursement for, acquisition and financing of the Equipment, including but not limited to, administrative costs and capital expenditures related to financing payments, initial fees and charges of the Assignee, financing discounts, legal fees and charges of Seller or Assignee, financial and other professional consulting fees, costs of rating agencies or credit ratings, fees for execution, transportation and safekeeping of assignment documents and charges and fees in connection with the foregoing. "Exhibit" means one or more Exhibits attached to and incorporated into each Schedule entered into by and between Purchaser and Seller. "Fiscal Period" means the period of time, commencing on the dates set forth on Page 1 hereof, over which funds are regularly and periodically appropriated by or for Purchaser. "Payments" means all Payments per period payable by Purchaser pursuant to the provisions of the Agreement during the Term and in consideration of the right of Purchaser to use the Equipment during the then current portion of the Term. Payments shall be payable by Purchaser to Seller in the amounts and at the times during the Term as set forth on Exhibit B to the Schedule. "Purchase Price" means, as of any date of calculation, the amount calculated in accordance with Section 8.1 hereof, which Purchaser may pay to Seller as of such date in order to purchase the Equipment "Purchaser" means the entity described as "Purchaser" on Page 1 hereof, its successors and assigns, which is organized and existing under and by virtue of the authorizing statute or constitutional provisions of the State as so designated and which is purchasing the Equipment from Seller under the Provisions of the Agreement 2 "Schedule" means each Schedule, substantially in the form of the Schedule attached hereto, entered into by and between Purchaser and Seller and which incorporates these Conditional Sale Agreement Terms and Conditions and any Rider thereto. The Schedule describes, among other things, the Equipment and payment terms for each transaction. "Seller" means (i) Municipal Leasing Corporation, which is a corporation organized and existing under and by virtue of the laws of the Commonwealth of Virginia, acting as Seller of the Equipment hereunder; (ii) any surviving, resulting or transferee corporation; and (iii) except where the context requires otherwise, Assignee and its subsequent assigns. ''Transaction Documents" means the Agreement and the documents required to be delivered by Purchaser under Section 5.6 hereof. "Term" means the period of time from the Commencement Date until termination of the Agreement as set forth in Section 3.0 hereof. "Termination Date" means the date of termination under Section 3.0 hereof. 2.0 Implementation For purposes of construing a transaction as an integrated agreement, and for the purposes of Section 9.0 hereof, the following shall be considered a single transaction and a legal and binding agreement: (a) These Conditional Sale Agreement Terms and Conditions including any Rider specified on Page 1 hereof; (b) A Schedule incorporating the Conditional Sale Agreement Terms and Conditions and any Rider thereto; (c) The Exhibits specified on the Schedule and incorporated therein. In the event of conflict or inconsistency between the above listed documents, the terms and conditions of each Agreement shaH be determined by giving precedence first to the Schedule, then to the Exhibits, then to any rider listed on Page 1, and finally to these Conditional Sale Agreement Terms and Conditions. 3.0 Termination of Term The Term and the Agreement will terminate upon the earliest of any of the following events: (a) Purchaser's compliance with Section 8.0 herein by reason of failure of appropriation of adequate funds to pay the Payments due during Purchaser's next succeeding Fiscal Period; (b) Payment by Purchaser under the provisions of Section 8.1 through 8.3 inclusive, of the Agreement; (c) Default by Purchaser and Seller's election to terminate the Agreement under Section 7.1 hereof; or (d) Payment by Purchaser of all Payments authorized or required to be paid by Purchaser hereunder. 4.0 Amount and Times of Payment Purchaser agrees to pay the Purchaser's Cost indicated in the Schedule, in the Payment amounts and at the times set forth thereon. Charges will accrue as specified in the Schedule. By its execution of each Schedule, Purchaser finds and determines that, in each Fiscal Period of the Term, the Payment amounts set forth on the Schedule are equal to the fair rental value of the Equipment during the respective Fiscal Period in which such Payments are made. 4.1 Interest A portion of each Payment is paid as, and represents payment of, interest as specified on Exhibit B to the Schedule. 4.2 Late Charges Payments received after the due date will be subject to a late charge at the rate of 1.5% per month (or at the highest rate allowed by law, if less) on any outstanding amount thereof from the payment due date until the date of receipt by Seller. 3 4.3 Abatement of Payments Except as expressly provided herein, there will be no abatement or reduction of Payments by the Purchaser for any reason. It is the intention of the parties that the Payments be made in all events, unless the obligations to pay such amounts are terminated as provided herein. 4.4 Payments to be Unconditional The obligations of Purchaser to make the Payments required under these Sections 4.0 through 4.4, inclusive, and other Sections hereof and to perform and observe the other covenants and agreements contained herein shall be absolute and unconditional in all events except as expressly provided under the Agreement. Notwithstanding any dispute between or among Purchaser, Seller, or any other person, Purchaser shall make all Payments when due and shall not withhold any Payments pending final resolution of such dispute, nor shall Purchaser assert any right of set-off or counterclaim against its obligation to make such payments required under the Agreement. 5.0 Care and Use of Equipment Purchaser, at its own expense, will obtain remedial and preventive maintenance during the term of the Agreement to keep the Equipment in good operating condition and appearance. The Purchaser agrees to use and provide maintenance for the Equipment only in the manner and to standards contemplated by the Equipment manufacturer. Purchaser agrees not to relocate the Equipment without the prior written permission of Seller. 5.1 Inspection With reasonable prior notice, Purchaser will allow Seller to enter the premises where the Equipment is located during normal business hours to inspect the Equipment in order to determine whether Purchaser is fulfilling its responsibilities hereunder. 5.2 Release and Responsibility Covenants Except as may directly result from Seller's gross negligence or willful misconduct, Purchaser, and not Seller or it Assignee, shall bear responsibility for any and all liability, obligation, losses, claims, and damages whatsoever, 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 entering into the Agreement, Purchaser's failure to declare and pay any tax or fee as provided in this Agreement, the manufacture or 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 resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent or other defects, whether or not discoverable by Seller or Purchaser; any claim for patent, trademark or copyright infringement; and any claim arising out of liability in tort. Purchaser's responsibility under this Section shall continue in full force and effect notwithstanding the full payment of all obligations under the Agreement or the termination of the Term thereof for any reason. Purchaser agrees not to withhold or abate any portion of the Payments required pursuant to the Agreement by reason of any defects, malfunctions, breakdowns or infirmities of the Equipment. Promptly upon learning of any claim or liability arising hereunder, Purchaser and Seller agree to give the other party prompt notice thereof. Purchaser agrees to prepare and deliver to Seller within a reasonable time prior to the required date of filing (or, to the extent permissible, file on behalf of Seller) any and all reports, other than income tax returns to be filed by Seller, with any federal, state or other regulatory authority by reason of the sale by Seller of the items of the Equipment hereunder. 5.3 Taxes and Licenses Purchaser will comply with all laws and declare and pay all taxes relating to Equipment and Purchaser's obligations hereunder, including, but not limited to, sales and use taxes, gross receipts taxes (including business and occupational taxes which are based on Seller's gross revenues related to this transaction), registration fees, license fees, documentary stamp taxes, personal property and ad valorem taxes and all other taxes, licenses and charges imposed on the ownership, possession of or use of the Equipment during the term of the Agreement, together with interest and penalties. Notwithstanding the foregoing, Purchaser will not be obligated to pay taxes based solely upon Seller's net income, nor shall Purchaser be required to pay taxes it contests in good faith and by appropriate proceedings with any taxing authority, if nonpayment under such circumstances involves no risk of forfeiture or encumbrance of the Equipment. 4 5.4 Tax Covenants Pursuant to the provisions of the Internal Revenue Code of 1986, as amended, related rulings and regulations thereunder, and any amendments or restatements of same (collectively, "Code"), the Purchaser hereby certifies, with respect to each Agreement the following: (a) The Purchaser will not receive any proceeds or other consideration for its payment of the Payments pursuant to the Agreement other than the use of the Equipment. It is reasonably expected that the Purchaser will not sell or othetwise dispose of the Equipment prior to the termination of the Agreement. (b) It is expected that Payments under the Agreement will be paid from periodic appropriations of the Purchaser deposited into the general fund of the Purchaser, that such appropriations will equal the Payments due during each fiscal year of Purchaser, and that all amounts paid for Payments will be from an appropriation made by the Purchaser during the fiscal year in which such Payment is made. No other fund or account, authorized or established pursuant to the Agreement, or otherwise, will be used directly or indirectly to pay Payments under the Agreement nor is any other fund pledged as security for the payment of Payments under the Agreement. (c) No more than ten percent (10%) of the use of any unit of the Equipment in any month will be by persons or entities other than the Purchaser or its employees on matters relating to such employment, and no more than five percent (5%) of the use of any unit of the Equipment in any month will be unrelated to use by or for the Purchaser. No management contract shall be entered into with respect to any unit of the Equipment unless (i) at least half the compensation is on a periodic, fixed-fee basis; (ii) no compensation is based on a share of net profits; and (Hi) the Purchaser is able to terminate the contract without penalties at the end of any three years. (d) In compliance with federal statutes relating to tax exempt obligations, Purchaser agrees to cooperate with the Seller in the assimilation and verification of information with regard to any matters whatsoever concerning the Agreement, and further agrees to execute, deliver and provide Seller with satisfactory evidence of the filing of such documentation as may be required for the purpose of properly reporting the Agreement, including without limitation, IRS forms 8038-G or 8038-Ge, as required under the Code. Purchaser understands and agrees that the Payments hereunder have been bargained for in consideration of Purchaser's fulfillment of the obligations described immediately above, in addition to its other obligations hereunder. (e) The Commissioner of Internal Revenue has not published notice that the Purchaser is disqualified and may not certify obligations under Treasury Regulations 1.103-13(a)(2), nor has the Purchaser been advised that such action is contemplated. (f) To the best of the knowledge and belief of the Purchaser, there are no other facts, estimates, or circumstances which would materially change the expectations of the Purchaser as set forth herein and such expectations are reasonable. 5.5 Assignment by Purchaser Without the prior written consent of Seller and Assignee, Purchaser agrees not to lease, assign or transfer all or any part of its rights and obligations under the Agreement or in the Equipment. 5.6 Delivery of Related Documents Purchaser will sign or provide, at the time specified below, the following documents satisfactory to Seller: a) Prior to Equipment installation (i) An Opinion of Counsel as described in Section 10, and substantially in the form of Exhibit E; (ii) Essential Use Questionnaire in the form of Exhibit F. b) Promptly upon Equipment Acceptance (i) An Acceptance Certificate in the form of Exhibit C, confirming Purchaser's acceptance of the Equipment; (ii) An acknowledged IRS form 8038-G or -GC as provided by Seller and in the form of Exhibit D; (iii) Purchaser's maintenance contract for the Equipment; (iv) An insurance certificate confirming coverage as described in Section 5.8, unless Seller has agreed to Purchaser's self-insurance. c) Promptly upon Seller's written request (i) Financing statements or other documents perfecting Seller's or its Assignee's security interest under the Agreement; (ii) If Seller has agreed to Purchaser's self-insurance, detailed description of Purchaser's self-insurance plan in the form of Exhibit H, including a confirmation that such plan covers the Equipment; (Hi) A certificate by Purchaser confirming and disclosing to potential Assignees of Seller the accuracy and completeness of information contained in the transaction documents and of material facts concerning the purchase and the terms of this transaction; (iv) Notice of Assignment in the form of Exhibit G, or as directed by Seller, (v) Other documents as reasonably requested by Seller for the purpose of carrying out the transactions described in the Agreement. 5.7 Transportation and Installation Charges Purchaser shall be responsible for all charges relating to the transportation of Equipment to Purchaser's location and installation at such location. Seller may at its option either prepay such charges and invoice Purchaser or forward to Purchaser transportation and installation invoices as they are received, whereupon Purchaser shall remit payment to Seller in a timely manner. 5 5.8 Insurance Purchaser shall, at its own expense, insure the Equipment against all risks, including, but not limited to, war risk, earthquake and flood damage, in such amounts as Seller shall reasonably require (but not less than the Purchase Price described in Section 8.1 hereof). Purchaser shall obtain coverage with an insurance carrier licensed to provide property, casualty and liability insurance in the state where the Equipment is located. An insurance carrier not so licensed or self-insurance by Purchaser shall not be acceptable unless Seller, in its sole discretion, shall so consent in writing. The policy of insurance shall maintain a loss payable endorsement in favor of Seller and any lender or assignee of Seller affording them such additional protection as they may reasonably require. All such insurance policies shall provide such coverages in amounts satisfactory to Seller, shall name Purchaser, Seller, and Seller's lender or assignee as additional insureds under a standard mortgage type clause and as toss payees, as their interests may appear, and shall provide that they may not be canceled or altered without at least thirty (30) days prior written notice to Seller and its lender or assignee. Purchaser's liability for loss under Section 8.3 shall not be diminished by any insurance payment less than the actual amount of the loss. Purchaser shall carry Workmen's Compensation insurance, as required, covering all employees on, in, near or about the Equipment and shall require any other person or entity working on, in, near or about the Equipment to carry such coverage, and will furnish to Seller, upon request, certificates evidencing such coverage throughout the Term of the Agreement. 5.9 Advances Not Applicable. 6.0 Title Title to the Equipment will pass to the Purchaser on the Acceptance Date. Title will revert to Seller upon termination pursuant to Section 7.1 or 8.0. 6.1 Security Interest Purchaser grants to Seller and Seller retains a purchase money security interest in the Equipment. Purchaser will not change or remove any insignia or lettering which Seller may place on the Equipment to indicate its interest therein. Until all Payments are made or prepayment in accordance with Sections 8.1 and 8.2 hereof is complete, Purchaser will keep the Equipment free from any lien, encumbrance or legal process and Purchaser will promptly discharge any claim which might become a lien or charge against the Equipment. 6.2 Filing Purchaser authorizes Seller to make Seller's security interest a matter of public record by filing with the appropriate authority a copy of the Agreement or of any other documents Seller deems necessary for that purpose. Purchaser shall be responsible for any costs associated therewith. Purchaser agrees to sign or execute such documents on Purchaser's behalf for the sole purpose of perfecting Seller's security interest hereunder. 6.3 Personal Property The Equipment will remain personal property and will not be so affixed to realty as to change its character to a fixture or realty. Purchaser shall obtain, as to any place where the Equipment is located, a waiver from the landlord and/or mortgagee thereof with respect to any rights that either may have under local law to levy or distrain on the Equipment and shall obtain the legal description of the real estate upon request by Seller. 6.4 Alterations, Additions, Attachments In the event title to the Equipment reverts to Seller, and at Seller's request, Purchaser, at its expense, will remove all alterations, additions, and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was furnished, reasonable wear and tear excepted. Any replacement/repair parts are Equipment subject to the terms of the Agreement. 6.5 Eqnipment Retnrn Purchaser is responsible for the return costs related to the termination of the Agreement pursuant to Sections 7.1 or 8.0, including deinstallation, rigging, drayage, freight, and insurance to destination specified by Seller within the continental United States. If the Equipment was not maintained under a manufacturer's maintenance agreement prior to the Equipment's return, the Purchaser will pay for such repairs as are necessary to make the Equipment acceptable for maintenance under the manufacturer's standard maintenance agreement. 6 7.0 Defanlt Definition Any of the following events shall constitute a default under the Agreement: (a) Purchaser fails to make any payment required hereunder when due; or (b) Purchaser fails to observe or perform any other covenant, condition, agreement or warranty of the Agreement and such failure continues for ten (10) days without cure after Seller provides Purchaser written notice of such failure; or (c) Purchaser becomes insolvent, makes an assignment for the benefit of creditors, applies for or consents to the appointment of a receiver, trustee, conservator or liquidator of Purchaser or of all or a substantial part of its assets, or a petition is filed by or against Purchaser under the federal bankruptcy laws or any similar state or federal laws providing for the relief of debtors. 7.1 Remedies Upon the occurrence of an event of a default, without further notice or demand, Seller may at its option do any or all of the following: (a) Terminate the Agreement by providing written notice to Purchaser; (b) Take possession of the Equipment wherever situated without liability for entering the premises where the Equipment is located; (c) Sell, lease, rent or use the Equipment at its sole discretion. Purchaser remains liable for arrears of payments, the costs of taking possession including storage, repair, Equipment return pursuant to Section 65, court costs and attorney's fees, sale or lease costs, and the balance due under the Agreement. The proceeds of such sale or lease of the Equipment shall be applied toward the balance due after deducting the aforementioned costs and payments. For the purposes of this provision, the balance due shall be equal to the Purchase Price determined pursuant to Section 8.1 as of the date of default; (d) Declare immediately due and payable aU monies due during the Term by providing written notice to Purchaser; and (e) Take any court action at law or in equity to enforce performance of the obligations or covenants of the Agreement and to recover damages for the breach thereof. Purchaser shall remain liable for reasonable damages provided by law including all costs and expenses incurred by Seller due to the default by Purchaser, and interest at the rate of 1.5% per month (or the highest rate allowed by law, ifless) on any amounts due, or costs and expenses incurred by Seller, from the date, such amounts, costs or expenses were due or incurred, until receipt by Seller of payment therefor. 7.2 No Remedy Exclnsive No remedy herein conferred upon or reserved to Seller is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under the 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 Seller to exercise any remedy reserved to it in Section 7.1, it shall not be necessary to give any notice, other than such notice as may be required therein. 8.0 Termination for Non-Appropriations Purchaser intends, subject to the provisions of Section 3.0 (a), to continue the Agreement for the Term, and to pay the Payments and make other payments due hereunder. Purchaser reasonably believes that legally available funds in an amount sufficient to make all Payments during the Term can be obtained. Purchaser further intends to do all things lawfully within its power to obtain and maintain funds from which the Payments maybe made. Notwithstanding the foregoing, Purchaser's obligations to pay any amounts due for those fiscal periods succeeding the Fiscal Period first in effect at the commencement of the Term are contingent upon legislative appropriation or approval of funds for that purpose. Therefore, the Purchaser may terminate the Agreement with respect to not less than all of the Equipment hereunder effective as of the end of any of its succeeding fiscal periods (the "Termination Date") by giving Seller and its assigns thirty (30) days prior written notice that the Agreement will terminate in accordance with the provisions of Section 8.0 by reason of failure of appropriation of adequate funds to pay the Payments to be due on or after the Termination Date, and advising Seller of the location(s) where the Equipment may be found on the Termination Date. All obligations of Purchaser to make Payments specified on the Schedule to be due after the Termination Date will cease and all interests of Purchaser in the Equipment will terminate. Notwithstanding the foregoing, Purchaser agrees (i) not to terminate the Agreement under the provision if any funds are appropriated to it for the Fiscal Period in question for the acquisition (by purchase, lease, or otherwise) of the equipment of functionally similar equipment or equipment petforming similar applications and procedures; (ii) subject to the provisions of Section 3.0 (a) and without creating a pledge, lien or encumbrance upon funds available to Purchaser in other than its current Fiscal Period, that it will use its best efforts to obtain appropriation of the necessary funds to avoid termination of the Agreement by taking all appropriate action including the inclusion in Purchaser's budget request for each Fiscal Period during the Term hereof a request for 7 adequate funds to meet its obligations and to continue the Agreement in force; (iH) that it will not give priority or parity in the application of funds to any other functionally similar equipment for use by the Purchaser, and; (iv) that if the Agreement is terminated pursuant to Section 8.0, the Purchaser will not for a period of ninety (90) days purchase, lease or rent equipment performing functions similar to those performed by the Equipment. Purchaser represents and warrants it has adequate funds to meet its obligations during the first fiscal appropriation period of the Term. Seller and Purchaser understand and intend that the obligation of Purchaser to pay Payments hereunder shall constitute a current expense of Purchaser and shall not in any way be construed to be a debt of Purchaser in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Purchaser, nor shall anything contained herein constitute a pledge of the general revenues, funds or monies of Purchaser beyond the Fiscal Period for which sufficient funds have been appropriated to pay Payments hereunder. 8.1 Prepayment So long as Purchaser is not in default, Purchaser will have the right, upon providing Seller with sixty (60) days prior written notice, to prepay its obligation for not less than all of the Equipment prior to completion of the Term, by paying concurrently with and in addition to the periodic Payment due on any Payment date, the Purchase Price specified for such Payment date on Exhibit B to the Schedule. 8.2 Purchaser's Rights on Prepayment or Payment in Full Upon (i) Purchaser's exercise of its right of prepayment and/or (ii) Purchaser's having satisfied all of its monetary and other obligations hereunder, Seller will release its security interest in the Equipment. 8.3 Risk of Loss (a) With regard to any item of Equipment, commencing upon delivery and continuing throughout the Term, Purchaser hereby assumes, and shall bear, the risk of loss with respect to any damage, destruction, loss, theft, or governmental taking, whether partial or complete and whether through any fault or neglect of Purchaser or otherwise. Except as provided in this Section 8.3, no event of loss shall relieve Purchaser of its obligation to pay Payments under any Agreement. (b) If any item of Equipment is damaged, Purchaser shall promptly notify Seller and shall, at Purchaser's expense, within sixty (60) days of such damage, cause to be made such repairs as are necessary to return such item to its previous condition. Purchaser shall then be entitled to receive from Seller or its assigns, as the case may be, any insurance or other recovery received by Seller in connection with such damage. (c) In the event any item of Equipment is destroyed, damaged beyond repair, lost, stolen, or taken by governmental action for a stated period extending beyond the term of any schedule (an "Event of Loss"), Purchaser shall promptly notify Seller and pay to Seller, on the next Rental Payment date following such Event of Loss, an amount equal to the Purchase Price, described in Section 8.1, then in effect as set forth for such item on the Schedule. After payment of such purchase price and all Payments due and owing on or before such Payment date, Purchaser's obligation to pay further Payments allowable to the item which suffered the Event of Loss shall cease, After paying such Purchase Price to Seller or its assigns, Purchaser shall be entitled to receive from Seller any insurance or other recovery received by Seller and its assigns in connection with such Event of Loss. (d) In the event of a governmental taking of an item of Equipment for an indefinite period or a stated period which does not extend beyond the Lease Term, all obligations of the Purchaser with respect to such item (including payment of Payments) shall continue. So long as Purchaser is not in default hereunder, Seller shall pay to Purchaser all sums received by Seller from the government by reason of such taking. 9.0 Assignment Purchaser understands that Seller may assign its right, title and interest in the Agreement, the Equipment listed on Exhibit A to the Schedule, and all rights to receive further payments to an Assignee, which may upon notice to Purchaser subsequently re-assign same to its assignee, subject to the rights of Purchaser hereunder. Purchaser consents to such assignments and agrees to send all Agreement notices to both Seller and its Assignee. All rights of and indemnifications to Seller will inure to such Assignee. Purchaser agrees to make payments required under the Agreement directly to such Assignee without abatement or reduction of any kind. Purchaser agrees to appoint Seller or its Assignee as Purchaser's agent for the purpose of maintaining a book entry system as required by the Internal Revenue Code of 1986. 9.1 Advice of Assignment Upon assignment of Seller's interests to an Assignee, Seller will cause a written notice of such assignment to be sent to Purchaser which shall be sufficient if it discloses the name of the Assignee and the address to which further payments hereunder shall be made. No further action will be required by Seller, and Purchaser's consent to the assignment is not required. Notwithstanding the foregoing, no such subsequent Assignment shall be effective against the 8 Purchaser unless Purchaser receives notification in writing of such assignment designating the name and address of any such subsequent Assignee. Purchaser agrees to affix a copy of each notification of assignment to the Purchaser's counterpart of the Agreement. 10.0 Warranties and Representations of Purchaser Purchaser represents, covenants and warrants for the benefit of Seller and its Assignee(s) and will (regarding subsections (a) through (i)below) deliver an opinion of counsel as follows: (a) Purchaser is an entity as described on Page 1 hereof and is organized and existing under and by virtue of the authorizing statute or constitutional provisions of the State so designated; (b) Purchaser is authorized under the Constitution and laws of the State as designated on Page 1 of the Agreement to enter into the transactions contemplated hereby and to perform all of its obligations hereunder; (c) No approval, consent or withholding of objection is required from any governmental authority with respect to the entering into or performance by the Purchaser of the Agreement and the transactions contemplated thereby; (d) Purchaser represents that execution and delivery of the Agreement has been duly authorized, and further represents, covenants and warrants that all requirements have been met and procedures have occurred in order to ensure the enforceability of the Agreement (except as such enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors' rights generally, and by the application of equitable principles if equitable remedies are sought), and Purchaser has complied with such public bidding requirement as may be applicable to the Agreement and the acquisition by Purchaser of the Equipment hereunder; (e) The entering into and performance of the Agreement will not violate any judgment, order, law or regulation applicable to Purchaser or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon any assets of Purchaser or on the Equipment subject to the Agreement pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement or other instrument to which Purchaser is a party or by which it or its assets may be bound; (f) There are no actions, suits or proceedings pending or, to the knowledge of Purchaser, threatened against or affecting Purchaser in any court or before any governmental commission, board or authority which, if adversely determined, will have a material, adverse effect on the ability of Purchaser to perform its obligations under the Agreement; (g) The Purchaser is a political subdivision within the meaning of Section 103 of the Internal Revenue Code and the related regulations and rulings, and the portion of payments identified as deferred interest charges to maturity, upon receipt, will not be includable in Federal gross income under statutes, regulations, court decisions and rulings existing on the date of the Agreement and consequently will be exempt from present Federal income taxes and income taxes of the State as designated on Page 1 hereof; (h) The Equipment is personal property and when subjected to use by Purchaser, will not be or become fixtures under the laws of the State or jurisdiction where the Equipment will be located; and (i) The purchase and use of the Equipment are essential to Purchaser's proper, efficient and economic operation. 11.0 Disclaimer of Warranties The Purchaser acknowledges that the Equipment is of a size, design, capacity, and manufacture selected by the Purchaser. Seller MAKES NO WARRANTIES OR REPRESENTATIONS OF ANY KIND, EXPRESS OR IMPLIED, RELATING TO THE EQUIPMENT OR PATENTS RELATING THERETO; AND SELLER HAS EXPRESSLY MADE NO WARRANTY AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OF THE EQUIPMENT. Seller and its Assignee will not be liable to the Purchaser for any liability, loss or damage, including consequential damages, caused or alleged to be caused, directly or indirectly, by the Equipment or by any inadequacies thereof or deficiency or defect therein, by any incident whatsoever in connection therewith or in any way related to or arising out of the Agreement. With respect to warranties which are not assignable, Seller agrees to take, at Purchaser's request and expense, such reasonable actions against third parties as are necessary to enforce such warranties for Purchaser's benefit. 12.0 Waiver No delay or omission by the parties in exercising any right in any of the Transaction Documents shall operate as a waiver of that or any other right and no single or partial exercise of any right shall preclude the parties from any or further exercise of any right or remedy. 12.1 Interpretation All section headings contained herein are for convenience of reference only and are not intended to define, limit or describe the scope of any provision of the Agreement. Terms used in the plural include the singular, and vice versa, unless the context otherwise requires. 9 12.2 Severability In the event any portion of the Agreement shall be finally determined by any court of competent jurisdiction to be invalid or unenforceable, such provision shall be deemed void and the remainder of the Agreement shall continue in full force and effect. 12.3 Ambiguity The parties to the Agreement, and each of them, hereby represent that the language contained herein is to be construed as jointly proposed and jointly accepted, and in the event of any subsequent determination of ambiguity, all parties shall be treated as equally responsible for any such ambiguity. 12.4 Governing Laws The Agreement shall be construed in accordance with and governed by the laws of the Purchaser's State as specified on Page 1 hereof. 12.5 Amendment Any of the Transaction Documents may only be amended in writing by obtaining the signature of the parties. No assigned Transaction Document may be modified without the prior written consent of Assignee. 12.6 Execntion Each Agreement may be executed in any number of counterparts but only the counterpart that is labeled "Original" will be deemed to be the original Agreement for purposes of perfection of a security interest therein and shall be the only counterpart which may be transferred and given to transfer the rights of Seller thereunder. 12.7 Formation of Agreement Seller shall not be bound by the Agreement until it is executed by an Authorized Signatory of Seller. 12.8 Complete Agreement Each Agreement entered into hereunder shall constitute the complete Agreement between the parties for the purchase of the Equipment referenced therein and shall supersede all prior agreements, written or oral, with regard to the matters addressed therein. 12.9 Binding Effect The Agreement shall inure to the benefit of and shall be binding upon Seller and Purchaser and their respective successors and assigns. 12.10 Notices All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, return receipt requested, at the addresses as set forth on Page 1 hereof. 12.11 Point of Sale The point of sale is the City of San Bernardino. -REMAINDER OF TIllS PAGE INIENTIONALL Y LEFT BIANK- 10 Agreement No. 108 Schedule No.1 Dated as of October 28, 1991 THIS SCHEDULE is issued to the above Conditional Sale Agreement dated as of October 28, 1991 between the parties thereto to authorize installation of the Equipment listed herein. As further described in Section 2.0 of the Conditional Sale Agreement Terms and Conditions (1/91), this Schedule incorporates the provisions of the above-referenced Conditional Sale Agreement, any Riders specified on Page 1 thereof, and the Exhibits listed below. All terms used herein have the meanings ascribed to them in the Conditional Sale Agreement, unless otherwise noted. 1. Equipment Location: 2. End User of Equipment (if different from Purchaser) 3. Invoicing Address: 4. Commencement Date: 5. Period of Payment: Payments. 6. Number of Payments: 7. Equipment Financed Amount: $ The following Exhibits are annexed hereto and made a part hereof: A, B, C, D, E, F, G, and H. The Schedule and the documents incorporated herein constitute a separately assignable obligation of Purchaser. By its execution below, Purchaser represents that (i) it has read and understands all documents listed above and (ii) as of the date of execution hereof, all of the covenants, warranties and representations therein apply to this Schedule with full force and effect. IN WITNESS WHEREOF, the parties hereto have caused this Schedule No.1 to be executed by their duly authorized representatives as of the day and year fIrst written above. SELLER: MUNICIPAL LEASING CORPORATION PURCHASER: CITY OF SAN BERNARDINO BY: BY: NAME: NAME: TITLE: TITLE: DATE: DATE: Exhibit A. EQUIPMENT Equipment List: Purchaser's Total Cost: $ SELLER: MUNICIPAL LEASING CORPORATION PURCHASER: CITY OF SAN BERNARDINO BY: BY: NAME: NAME: TITLE: TITLE: Reference purposes to the Conditional Sale Agreement Terms and Conditions (1/91) only. Agreement No. l08-Scbednle No.1 Exhibit B. PAYMENT SCHEDULE SELLER: MUNICIPAL LEASING CORPORATION PURCHASER: CITY OF SAN BERNARDINO BY: BY: NAME: NAME: TITLE: TITLE: Exhibit C. ACCEPTANCE CERTIFICATE Municipal Leasing Corporation 11150 Sunset Hills Road, Suite 240 Reston, Virginia 22090-5321 This certificate is in reference to that certain Schedule No.1 dated as of October 28, 1991 (the "Schedule") to Conditional Sale Agreement No. 108, dated as of October 28, 1991 ("Agreement") between Municipal Leasing Corporation, and the City of San Bernardino. Pursuant to the above-mentioned Agreement, the undersigned hereby certifies (i) that the Eqnipment described on Exhibit A of the Schedule has been delivered to the Purchaser, has been inspected by authorized representatives of the Purchaser, has been fully and finally accepted by Purchaser under the Agreement and has been found to be in good working order and to be the Equipment described in Exhibit A to the Schedule, (ii) the Date of Acceptance for such Equipment under the Agreement is . The first Payment under the Agreement shall be due on the Date of Acceptance and subsequent Payments are due on the date of each period which corresponds to the Acceptance Date (e.g., if the Acceptance Date is January 15 and the period is "monthly", then the next Payment is due February 15; or if the Acceptance Date is January 15 and the period is "quarterly" then the next Payment is due April 15, etc.) during the Lease Term, and (iii) that, as authorized signatory of Purchaser, I have executed and attached Internal Revenue Service form 8038- G, filling in the Acceptance Date thereon in Section 6, and authorize Seller to take such steps as are necessary to file a completed form in accordance with Internal Revenue Service instructions. CITY OF SAN BERNARDINO By: Title: Date: Exhibit E. SAMPLE OPINION LEITER TO BE EXECUTED ON COUNSEL'S LEITERIIEAD Municipal Leasing Corporation 11150 Sunset Hills Road, Suite 240 Reston, Virginia 22090-5321 Gentlemen: We are counsel to the City of San Bernardino (the "Purchaser") and, in that capacity, we have examined a Conditional Sale Agreement No. 108 dated as of October 28, 1991, including Schedule No.1 thereto, dated as of October 28, 1991 (collectively the "Agreement"), between the Purchaser and Municipal Leasing Corporation ("Seller"), As a result of our examination of the Agreement and such other examinations as we have deemed appropriate, we are of the opinion as follows: (a) Thc Purchaser is a public body corporate and politic and is authorized by the Constitution and laws of the State of California to carry out its obligations under the Agreement; (b) The Agreement has been duly authorized, executed and delivered by constitutes a valid, legal and binding agreement, enforceable in accordance with its terms; , and (c) No approval, consent or withholding of ohjection is reqnired from any govermnental authority with respect to the entering into or performance by the Purchaser of the Agreement and the transactions contemplated thereby; (d) The entering into and performance of the Agreement will not violate any judgment, order, law or regulation applicable to the Purchaser or result in any breach of, or constitute a default under, or result in the creation of any lien, charge, security interest or other encumbrance upon any assets of the Purchaser or on the equipment subject to the Agreement pursuant to any instrument to which the Purchaser is a party or by which it or its assets may be bound; (e) The eqnipment is personal property and when subject to use by the Purchaser will not be or become fIXtures under the law of the State of California; (f) The Purchaser is a political subdivision within the meaning of Section 103 of the Internal Revenue Code and the related regulations and rulings and that the portion of payments identified as deferred interest charges to maturity, upon receipt, will not be includable in Federal gross income under statutes, regulations, court decisions and rulings existing on the date of this opinion and consequently will be exempt from present Federal income taxes and income tax of the State of California; and (g) There are no actions, snits or proceedings pending or to our knowledge, threatened against or affecting the Purchaser in any court or before any governmental commission, board or authority which, if adversely determined, will have a material, adverse effect on the ability of the Purchaser to perform its obligations under the Agreement. Very truly yours, Attorney's Signature Exhibit F. ESSENTIAL USE LETTER TO BE SUBMITTED ON PURCHASER'S LETTERHEAD Date: Municipal Leasing Corporation 11150 Sunset Hills Road, Suite 240 Reston, Virginia 22090-5321 RE: That certain Schedule No.1 to Conditional Sale Agreement No. 108 dated as of October 28, 1991, between Municipal Leasing Corporation ("Seller") and the City of San Bernardino ("Purchaser"). Gentlemen: This lettcr is being written with respect to the use of the property (herein so called) to be leased to the undersigned under the above-referenced Agreement. The property will be used by Purchaser for the following purposes: The property is essential to Purchaser's obligation/duty to perform the following: (a) Without this property the Purchaser would not be able to perform this function. The Equipment (is)(is not) replacing property which performed the same of similar function. (a) If yes, what happened to the prior equipment? The undersigned hereby represents that the use of the property is essential to its proper, efficient and economic operation. Very truly yours, CITY OF SAN BERNARDINO By: Title: Exhibit G. SAMPLE NOTICE OF ASSIGNMENT LEITER Date: TO: City of San Bernardino RE: That certain Schedule No.1 to Agreement No. 108 dated as of October 28, 1991 (the "Agreement") between Municipal Leasing Corporation ("Seller") and the City of San Bernardino ("Purchaser"). Gentlemen: Please be advised that pursuant to the Agreement, Municipal Leasing Corporation ("Seller") is assigning all of its right, title and interest in, to and under the Agreement to: SAMPLE All payments and notices in connection with the Agreement are to be sent to: SAMPLE with a copy of any notices to Seller. The terms of the Assignment specify that Seller shall continue to perform all obligations and duties required of it under the Agreement, and the Assignee shall not be responsible for performance of any such obligations or duties. In compliance with Section 149( e) of the Internal Revenue Code, the Purchaser agrees to affIx a copy of each notification of assignment to the Purchaser's counterpart of the Agreement. We request that this notice of assignment be acknowledged by signing in the space provided below and returning a copy to us. Sincerely, Bruce M. Bowen, President ACKNOWLEDGED AND AGREED: CITY OF SAN BERNARDINO BY: NAME: TITLE: DATE: . , Exhibit H. QUESTIONNAIRE ON SELF-INSURANCE These questions are to be used as a guideline for a description of the Purchaser's self-insurance program. While a response to each question is not required, a written statement covering the areas of concern below would be appreciated. Please provide responses in a letter signed by your appropriate representative. 1) Does the Purchaser intend to self-insure for: a) damage or destruction to the property; b) liability for injury (including death) to persons? 2) What are the limits (in dollars) of the liability the Purchaser proposes to assume for claims under 1) above? 3) Does the Purchaser maintain an umbrella insurance policy for claims in excess of Purchaser's self-insurance limits under question 2) above? If so, a) Does the umbrella policy provide all-risk property damage coverage and coverage for liability for injuries, including death, to persons? b) What are the umbrella policy's limits for such property damage and liability coverage? 4) From what source does the Purchaser obtain funds to pay its self-insured liabilities? a) Does the Purchaser maintain a self-insurance fund? If so, i) Are the monies in this fund subject to annual appropriations? ii) What total amount is maintained in the fund to cover the Purchaser's self-insurance liabilities? iii) Are amounts paid from the fund subject to limitations per each claim? iv) If the Purchaser does not maintain an umbrella policy, are claims limited only to amounts available in the fund, or may a claimant pursue other avenues of relief against the Purchaser? v) Who or what is the decision making authority for payment of claims submitted against the Purchaser? vi) If a claimant receives an adverse decision from the entity described in 4.a)v) above, does the claimant have recourse to the courts or to another administrative agency (i.e. who/what is the authority of last resort for paying a claim against the Purchaser's self-insurance liability?). b) If the Purchaser does not maintain a self-insurance fund, from what source(s) does the Purchaser obtain funds to pay claims against its self-insured liability? i) What are the limitations and amounts payable for claims against these funding sources? ii) Who/What is the entity authorizing payment from a claim against the Purchaser's self-insurance liability? iii) WhofWhat is the authority of last resort for paying a claim against the Purchaser's self-insurance liability?