HomeMy WebLinkAbout56-Purchasing
CITY'" SAIl ....1WIiH~......-r FOR COUNCIIAcnoN
Fnxn: . Dean R. Meech, Purchasing Agent
Subject:
Lease Purchase Master Contracts
1. Cityicorp North America
2. G.E. Capital
3. MNC Government Finance
~_~: Purchasing
DIIt8:
Synopsis of Previoul Council ectIon:
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Recomrnendld motion: .
Adopt Resolutions.
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Signetu
Supporting dIIta .tr...hld:
Yes
Phone: 384-5085
W.-d: NIA
ConUlCt penon:
Dean R. Meech, Purchasing Agent
FUNDING REQUIREMENTS:
Amount:
1-4{1\
Soun:e: IAcct. No.1
IAcct. DncriDtionl
FinlllCl:
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leil Nollll:
'~.n'A'
Agen4~~6'0 s g-
CITY" SAN _RNARDIN~ REOJEST FOR COUNCILClcTION
STAFF REPORT
The proposed acti on is for p 1 aci ng three (3) lease Purchase Master
Contracts in place with the City of San Bernardino.
This li brary of fi nanci ng partners already approved by the Ci ty and in
pl ace wi 11 save an extraordi nary amount of time in the processi ng of
lease Purchase transactions.
When lease Purchase financing is solicited you have eager vendors who
pursue the potential. which in itself takes time. But in the final
stages the transaction is subject to corporate or portfolio directors
attitudes. The results are invested time in bringing the bid process and
final concluding actions to an end that can be negated by the vendors
policy. This type of procedure serves no purpose.
The best utilization of lease Purchase Master Contracts in place is to
procure the equipment. then approxinlately two (2) or three (3) weeks
before takedown of that equipment call several or all of our in place
finance partners and get current interest rates . Current interest rates
will be be good for thirty (30) days. Then simply add a payment schedule
to the already existing in place Master Contract with the lowest
interest rate.
These contracts cost us nothing until utilized. The 1ength1y time it
takes for legal to agree and approve the contracts before action can
take place is already done. The City can move with dispatch in
satisfying the departments equipment needs.
As the contracts grow in number that are acceptable to the City our
"range of competitive interest rates grows. The extraordinary tillll! to
secure a vendor who may wash out due to certain circumstances is
eliminated.
Once lease Purchase Master Contracts are in place it is recommended the
financing of equipllll!nt should be negotiable. not acquired through the
competitive bidding process. lease Purchase is too important to overall
operations of the City. Financing interest rates can and have been
adjusted downward to the City's advantage.
To secure our primary mission of best advantage to the City. financing
must be a negotiable item.
The three vendors for lease Purchase Master Contracts proposed for
council approval are as follows...
1. Citicorp North America
2. G.E. Capital
3. MNC Government Finance
75-0264
The above three vendor contracts have been approved by the City
Attorneys Office and returned to Purchasing for proposed Council Action.
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De" .:.", ....,-.."g g." .. - ,. jiif~~
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RESOLUTION NO.
RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE
PURCHASE MASTER CONTRACT FOR MNC GOVERNMENT FINANCE 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 MNC
GOVERNMENT FINANCE, 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 Purchasing Agent is hereby
authorized and directed to issue a purchase order for said Lease
Purchase Financing to said vendor; the Master Lease Purchase
Contract award shall only be effective upon the execution of an
Agreement by the Mayor of the City of San Bernardino and the
tender of a Purchase Order by the Purchasing Agent.
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.
SECTION 4. The City shall not be obligated hereunder until
a lease purchase schedule transaction for material, equipment,
DR:ms/MNCgovt.res
July 5, 1990
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RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE PURCHASE
MASTBR CON'l'IlACT FOR NMC GOVERNMENT FINANCE FOR THE FURNISHING OF
LEASE PURCHASE FINANCING.
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 meeting thereof, held on the
day of , 1990, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN
ESTRADA
REILLY
FLORES
MAUDSLEY
MINOR
POPE-LUDLAM
MILLER
22 City Clerk
23 I I I I I I I I I I I I I I I I I I I I I I
24 IIIIIIIIIIIIIIIIIIIIII
25 IIIIIIIIIIIIIIIIIIIIII
26 I I I I I I I I I I I I I I I I I I I I I I
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DR:ms/MNCgovt.res
July 5, 1990
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RESOLUTION OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE PURCHASE
MASTER CONTRACT FOR MNC GOVERNMENT FINANCE FOR THE FURNISHING OF
LEASE PURCHASE FINANCING.
The foregoing resolution is hereby approved this
day
of
, 1990.
w. R. HOlcomb, Mayor
City of San Bernardino
Approved as to
form and legal content:
JAMBS F. PENMAN,
City Attorney
DR:ma/MNCgovt.res
July 5, 1990
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EOU:rPMENT LEASE/PURCHASZ AdRZZMENT
~; ~~ LEAS~'~C:~:~G== ~"r.::.;:O~f A the
DIVISION OF MlfC CREDIT CORP ("Lea.or.) and CITY OF SAN
BERNARDINO, CALIFORNIA ("Le.....').
In con.id.ration ot the .utual covenant., tena .nd
condition. hereinatt.r contained, LePor hereby avnu to
1.... to Le...., and Lea...h.reby a9"''' to 1.... froll
Lea.or, the property (h.r.in.tter, tot.ther with .11
repl.....nts and .cc...ion. th..to, r.t~ to .. the
"B.d....nt.) ducribed in the ......ti.l U.. of BquipMftt
Lettft .ttached h.r.to and in ona or lIOn certifloat.. of
Acceptanc., in the tora attachlad, .xecuted .nd _11~
pUZ*uant h.r.to, .ubj.ct to the t.ras and conditions ..t torth
h.r.in.
Thi. Agr..m.nt is mad. upon the tollowing t.ras and
conditions:
1. TERM.
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(a) COIII_nce.ent ot T,~. This Agr....nt ..11 be
eff.ctiv. and the parti..' ob11g& iQn. hereQnder llball ..iM,
a. ot the date h.r.ot. Th. t.ra ot 1..,. urid.&' tlli. Agre..nt
with r.sp.ct to tho.. it... ot the Equi..-nt dPcrlbed on a
c.rtificat. ot Acceptanc. .hall coaaenoe on th..dll'ta on which
such it... ot the Equipm.nt ar. a.cc.pted by L9<<~" &.
indicated on the certificate ot Acc.pUnce (tIle.CO 'P"c.-nt
Date.), and .hall terainat. on the la.t bu.ineta day of
Le....'. then curr.nt fi.cal budget period '.uch period being
h.&,.inaft.r ret.rred to a. the .Original T.ra.). As used
h.r.in, "bu. in... day" m.ans any day on which CORR,rci.l banks
are open for the purpo.. of carrying on a co~i.l banking
busin..s in the stat. ot Lesse.'s location (th. "stat..).
(b) Renlll"at of Lease Term. The Original T.rm with
r.sp.ct to those it.ms of the Equip..nt d.scribed in a
Certificate of Acceptance will b. autoaatically and .uc-
ce.sively r.n.wed at the end of the original Term und.r the
same t.ras and conditions tor such numb.r of .ucc.ssiv.
r.n.wal p.riods ("Ren.wal Terms") as i. s.t forth on the
Sch.dul. ot paym.nt. ("SCh.dul.") ex.cut.d by Le.... and
attached to such c.rtificate ot Acc.ptance. . The la.t R.newal
T.rm shall end on the last day ot the Full Lea.. T.ra (as
sp.cified on the r.lat.d Sch.dule, provid.d that, for purposes
of this Agreem.nt, "Full Lease Term" .hall ..an the last
.xpiring Full Leas. T.rm speciti.d on a schedUl.)1 unl.ss
Lesse. gives written notice to Lessor not l.ss than sixty (60)
days prior to the end of the then curr.nt t.rm ot Lessee's
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i"ntion to t.rainate this .r._a pur.u.nt to a.otlon 10 0
h.r.of or .ub-part Ce) of this a.otion, a. th. ca.. may be.
Cc) T.~~nat:ion. Th. t.ra of th. 1.... her.und.r will
t.rminate upIIth. .arlie.t to occur of .ny of th. following
ev.nt.:' ..'~
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C~. .xpiration of the Origin.l T.rm or any
R.n.wal T.ra with r.sp.ct to all it... of th. Equipaant
d..cribed in th. c.rtificate. of Acceptanc. and th. nonren.wal
th.r.of in accordance with the t.ras and condition. of thi.
Agr._.ntr
(2) Th. purcha.e of all it... of th. Equipaent
d..cribed in th. C.rtificat.. of Acc.ptanc. by Lee... und.r
th. provi.ions of S.ction 8(C) or 10 of this Agreeaent,
(3) A d.fault by Le.... .nd La..or'. .l.otion to
t.rainat. this Agre.ment under S.ction 13' or
(4) The payment by La.... of all r.ntal payaent.
authoriz.d or r.quired to be paid by La.... bereunder with
r..pect to all items of the Equipment de.cribed in the
Certificates of Acceptance.
Cd) Continuation of Lea.. T.rm bv La,.... La....
intends, .ubj.ct to the provi.ion. of .ub-part ee) of thi.
S.ction, to continu. the term of th. l.a.e h.reUftdar through
th. original T.rm and all Ren.wal Term. for the FUll Lea.e
Term and to pay the rental payments her.under. Lee'"
r.a.onably beli.ves that l~ally avail.bl. fund. in an amount
.uffici.nt to make all rental payment. for the FUll Lea.eTerm
can.b. obtain.d. Le.see furth.r intend. and h.reby oovenanta
to do all thing. lawfully within it. pow.r to obtaln and
maintain fund. from which the rental payment. may be mad.,
including making provision for .uch rental payaent. to the
extent neces.ary in each budget submitted and .dopted in
accordance with law, to use its bona fide be.t .ffort. to bave
such portion of the budget approved, and to exh.ust .11
available reviews and appeal. in the event sucb portion of the
budget is not approved.
Ce) NonaDDrODriation. In the event suffici.nt fund. are
not appropriated for the payment of all rental payment.
required to be paid in the next succeeding Renewal Term
hereunder and Lessee has no funds legally available for
rental payment. from other sources, then Las.e. may terminat.
this Agr.em.nt at the end of the original Term or th. then
current Renewal Term, as the case may be, and La.... .hall not
be obligated to make payment of the rental payment. provided
for in this Agreement beyond the then current term. La....
agrees to deliver notice to Les.or of such termination at
least sixty'(60) days prior to the end of th. th.n current
term. If this Agreement is terminated under this .ub-part,
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~.. agr..., at Le....'. ~, .~.. and ri.k, peaceably ~
to d.liv.r .uch it... of the Equipllent to Le..or at .uch
location a. i. .p.cifi.d by Le..o~, in the condition required
by Sec:tion 5(b) her.of. To the .xtent lawful, Le....
covaaftta ~.it will not, until tb. date on whicb the next
.ucca.ed1rMJ tt"(r-val Term would bav. .nded, .xpend or coaait any
fund. for ~~~:purcba.e or u.. of equipllent to be u..d for the
.... ~., or a purpo.. functionally .quival.nt to, the
Equipll.nt. .
2. RENTAL PAYMENTS.
ea) R.nt:al pavmant:. t:o "..ft,~blt:. .t!u~tt~....
o~ Le~.... Le..or and Le.... unci..... aDd ~... ~ the
obU,.tion of Le.... to pay rental payaenu btan-'J:' aba11
conetitute a cun.nt expene. of Le.... and aba11'~ 1a any
way be con.trued to be a d.bt of Le.... in aofttJ:'a~lon of
any applicabl. con.titutional or .tatutoJ:'Y It.i'''~ OJ:'
requir...nt. concerning tb. creation of indebted.... by
L88a.e, nor .hall anything contained b.rein COft8t!~ a
pledge of the general tax revenue., fund. OJ:' 1IOfti.. of Le.....
(b) PaVlllent of Rental pa~en~.. Le.... 8ball pay
rantal payment. exclu.ively from l.gally .vailabl. r.nda, in
lawful mon.y of tbe United State. of America, to ~80J:' in the .
amount. and on the rent payment due date. .et forth in the ~
Scbedules without notice. t
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(c) Interest and PrinciDal CaaDonen~.. As..t forth
in tbe Schedule., a portion of each rental payment is paid aa,
and represent. payment of, Ointer..t, and the balanoa of each
rental payment i. paid as, and repre.ent. payment of,
principal.
(d) Rental pavaent. to be U9~ndi~i~~. The
obligation of Le.... to make rental pay.enu b8J:'ltUftder, and to
perform and ob.erve tbe covenant. and .9I:'....nta contained in
this Agreement, .ball be ab.olute and unconditionel in all
events, except a. expr..sly provided in tbi. Agreement.
Le.... shall not a...rt any right of .etoff, countercl.im, or
abat...nt again.t it. obligation. hereunder, including
(without limitation) bY r.a.on of equipllent failure, di.pute.
with the vendor(.) of the Equipment Qr Les.or, accident or any
unfore...n circum.tanc.s.
3. REPRESENTATIONS AND COVENANTS OF LESSEE. Le....
r.presents, covenants and warrants to Les.or a. follow.:
(a) Les.e. is a stat. or political .ubdivi.ion
thereof within the meaning of Section 103(c) of the Internal
Revenu. Code of 1986, as amend.d, (the "Code") and will do or
cause to be done all things nec.ssary to pre.erv. and keep in
full fore. and effect its existence as such.
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. (b) La.... is auth.iz.d Qd.r the con.titution andO
la. of the Stat. to .nt.r into thi. A9r._.nt and the
tran.action. cont..plat.d h.r.by and to p.rtora all of it.
obli..uon:i"":::~ncod by an a...-......... __
cut ion and .. 'lv.ry ot this Agr....nt by or on bebalf of '
La.... h.. . duly authoriz.d by all n.ce...ry .ction of the
governing body ot Le...., and Lea... ta.. obt.ined .ucla oth.r
approv.l. and con..nt. a. ar. n.c..safY to cona.....t:e this
Agr....nt. Le.... furth.r r.pr...nt., cov.nant.. and w.rrants
th.t all r.quir...nt. have tte.n ut, lti\d procedur.. bav.
occurred n.c....ry to .n.ur. the .nto1'C..bility of this
Agr._.nt again.t Les..e, and lA.... bas co.plied with such
public bidding require..nt. a. ..y b. applicabl. to ttals
Agr._.nt and th. acqui.ition by Le.... ot the Bquipaent
h.r.und.r.
(d) La.... .hall cau.. to b. .x.cuted
h.r.to an incuabency c.rtiticat. and .n opinion
in tora and .ub.tanc. .ati.tactory to Le..or.
.nd .ttacbed
of ita counHl
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(e) Le.... has d.t.rained that . pr...nt n.ed ..l.ta
tor the Equip..nt which n.ed is not t..porary or expedtedto
diminish in the near tutur.. Th. Equipment is ..sential to I."
and will be u.ed by Le..e. only tor the purpo.. of perfo~in9
on. or more gov.rn.ental tunction. ot Lea... con.i.t.nt with t
the perai..ibl. .cope ot lA....'. authority and will not be .
u.ed in a trade or bu. in... ot any p.r.on or entity. Lea...
.hall cau.. to b. .x.cut.d and attached h.r.to an ...enti.l
U.. ot Equipm.nt Lett.r in'sub.tantially the to~ attached.
(t) Upon r.qu..t during the p.riod this AgreeIlent i.
in tore., Le.... will annually provide Le..or with current
tinancial .tat...nt., budg.t., proot ot appropri.tion for the
.n.uing ti.cal y.ar and .uch oth.r tinancial information
r.lating to the ability ot Lessee to continu. this Agr....nt
as may r.a.onably b. r.qu..ted by Le..or.
(g) Th. Equipm.nt is, and .hall remain during the
period this Agr.ement i. in tore., per.onal property and, when
.ubject to u.. by Le..e. und.r this Agr..ment, will not be or
become tixtures.
(h) Le.... acknowl.dg.. that Le..or i. acting a. a
tinancing .ourc. only with r..p.ct to the Equipm.nt which baa
be.n .elect.d, and the relat.d .pecifications tor dev.lop.d,
by Lesse..
(i) Le.... will promptly and duly .x.cut. and
deliv.r to Les.or .uch turth.r docum.nt. (inCluding, without
limitation, an Internal Revenu. s.rvice Fora 8038-G or any
replacem.nt th.reof in .ub.tantially th. tora attaclaed),
instrum.nts and assurances and take .uch furth.r action a.
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Aor may from t1Jae to ti__aeanA1 reque.t in order to 0
carry out the intent and purpo.. of th . Agr......t and to
..tabli.h and prot.ct th. right. and ~..di.. created or
int.nd.d to b. cr.at.d in favor of La..or h.r.und.r.
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4. 'l'i~!& TO EQUIPMENT, SECURITY INTEREST.
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(a}t"'l'itle to the Rauimaent. During the t.ra of this
Agr....nt, title to the Bquipa~t .hall v..t in La....,
. .ubject to th. right. of La..or und.r thb Agre.....t. In the
event of a d.fault a. .et forth in s.ction 13 ~f or
nonappropriation a. ..t forth in S.ction 1(.) bereof, title to
the Bquipa.nt shall imm.diat.ly v..t in La..or, and La....
.hall (at it. .xpen.. and ri.k) p.ac.ably d.liv.r the
Equipa.nt to Le..or in th. condition r.quir.d pureuent to
Section 5(b) her.of, at .uch location a. i. .pecified by
La.ear.
Cb) Security Yntere.t. To .ecur. the pr~ pa,..nt
and perforaanc. a. and wh.n due of all at La....'. obl19ationa
und.r this Agr..m.nt, Le.... h.r.by grant. to Lasear a firet
priority ..curity inter..t in th. Equip..nt, all replaoeaent.,
sub.titution., acc..sion. proc.ed. (ca.h and non-ca.h),
including the proce.d. of all in.uranc. polici.., thereof.
La.... agr... that with r..p.ct to the Equip..nt Lassor shall
have all of th. right. and re..di.. ot a ..cured party under
. the unitorm Coma.rcial Cod. as in .ttect in the stat.. La....
may not dispo.e at any at the Equip..nt without the prior
written con..nt at Las.or, notwith.tanding the fact that
proc..ds constitut. a part ot the Equip..nt.
5. USE AND MAINTENANCE.
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Ca) YAI. Le.... .hall us. the Equipaent .01.11 for
the purpose ot pertorming on. or more gov.rnaeatal funct on.
at Le.... and in a caretul, proper and lawful unner
con.i.tent with the r.quir...nt. ot all applicabl. insuranc.
pOlici.s r.lating to the Equipment. La.... will not chang.
th. location at any Equipm.nt a. .pecified in the applicable
certificate at Acc.ptance without th. prior writt.n consent at
La..or, which con..nt shall not b. unrea.onablI withheld.
La.... .hall not attach or incorporate the Equ pa.nt to or in
any other it.m of .quipm.nt in such a mann.r that the
Equipm.nt b.com.s or may be de.med to have become an acc...ion
to or a part at such other item of equipm.nt.
(b) Maintenance. Lessee, at it. own .xpens., will
ke.p and maintain, or caus. to be kept and maintain.d, the
Equipa.nt in a. good operating condition a. wh.n deliv.red to
Le.se. hereunder, ordinary w.ar and t.ar r..ulting trom proper
use th.reof alone excepted, and will provide all maintenance
and service and make all repairs reasonably n.c....ry tor .uch
purpo.e. All replacement part. and acces.ion. .hall b. tree
and clear of all liens, encumbrances or right. at other. and
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ha'" a value and utility at tlLst .~l to th. part. or ~
acces.ion. r.placed. Le.... shall not aak. any _eerial
alt.ration. to th. Equipm.nt without th. prior written consent
of Le..or, wh~ch con..nt .hall not b. unr".onably witbbeld.
All additio-....t:o th. Equipm.nt which ar. ....nt:i.l to ita
op.rat:ion or..~Wbich cannot be d.tach.d without: ..tarially
int.rf.ring~t:b such op.ration or adv.rs.ly affecting th.
Equi~nt'. value and utility, shall be de..ed illCO~rated in
th. Equipm.nt and .ubj.ct to th. t.rm. of thi. Agr.eaent a. if
originally l....d h.r.under, and subj.ct to th. ..curit:y
int.r..t of Le..or.
Upon r.a.onabl. advance notic., I.e..or..hall have
th. right to. in.p.ct the Equipm.nt and all _int:enallCe reooM8
with r..p.ct th.r.to, if any, at any r.a.onabl. ti.. during
normal bu. in... hours.
6. FEES I TAXES; OTHER GOVERNMENTAL AND UTILITY CRUGBS,
LIENS.
(a) bU. Le.... .hall reimburse I.e..or for, and
agr... to hold I.e..or harml... from, all titling, recordation,
docuaentary .tamp and oth.r f..., ari.ing at any tt.e prior to
or during the Full Lea.. T.rm, or upon or r.lat:ing to th.
Equipaent or this Agr.em.nt. "
(b) Tax... Oth.r.Gov.rn..n~al ehara.. ~ Ut:ilit:v
Ch:1a... Th. part i.. cont.mplat. that the Bqgl,..at will be
u. for a gov.rna.ntal purpo.. of I.e.... and that the
Equi~t will be .x.mpt from all tax.. pr..ently ......ed and
l.vi.d with r..pect to p.r.onal property. In the ..ent: that:
the u.., po.....ion or acqui.ition of tb. BqUipaent i. found
to be .ubj.ct to taxation in any form (exc.pt: for nst: inooae
tax.. of Le..or), Le.... will pay a. th. .ame co.e du., all
tax.. and gov.rnm.ntal charge. of any kind whataOeY8r that: may
at any time b. lawfully a......d or l.vi.d during th. Full
Lea.. T.rm again.t or with r..p.ct to th. Bquipment a. w.ll as
all utility and oth.r"charg.s incurr.d in the operation and
us. of the Equipment.
(c) Li.n.. Le.... .hall k..p th. Equi~nt: fr.. and
cl.ar of all lien., l.vies and .ncumbranc.., .xc.pt tho..
cr.ated under this Agr..ment.
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7. INSURANCE.
(a) Ca.ualtv Insurance. At it. own expen.., I.e....
shall k..p the Equipment insur.d again.t 10.. or damage due to
fir. and the ri.ks normally includ.d in .xt.nded coverag.,
malicious mischi.f and vandali.m, for not 1... than the Full
In.urabl. Value of the Equip..nt. A. u.ed h.r.in, -Full
In.urabl. Valu." m.ans the full replac...nt value of th.
Equipment or the th.n applicabl. Purchas. price desi9Jlat.d as
such on the Schedules, whichever is gr.ater. All insuranc.
6
f~lO.. or da..g. .hall protlb. t~ 10...., if any, aball ~
payable to Leaaor and lA...., a. th.ir interut. ..y aJIIlar
and lA.... .hall utilize it. but .ffort. to have all Cbeok.
r.lating to any .uch 10.... d.liv.r.d proaptly to lA.ear. 'l'ba
N.t Proce._~ the in.uranc. required h.reby aball be applieel
a. provideel.'.... Section 8 h.reof. Aa u.ed her.in, -N.t
Proceed." ...... the a.ount r..aining froa the qroe. proc..da
of any inauriftaa claim or cond.anation award aftc deduction
of all .xpanau (including attorn.y.' f...) incurred in the
coll.ction of .uch claim or award.
(b) S.lf-In.uranc, Auain.t ca:y,ltv ~".. If Lea...
in.ur.. .imilar properti.. again.t caaua ty 1... by &elf-
in.uranc., La.... may .ati.fy it. obligationa with r.~ to
ca.ualty in.uranc. h.r.und.r by providing ..lfi~ with
r..pact to the Full In.urabl. Value of the I~i~nt by 8&aftS
of an adequate in.uranc. fund.
(c) Liabili~v In.uranc.. La.... shall .lso carry
public liability in.uranc., both p.rsonal injury and.pt:oparty
da..g., cov.ring the EquipMnt, in an amount .. ~.Ol" may.
from tiM to time rea.onably r.quir. on notice to lA..i....
Le..or .hall be named a. an additional in.ured with ~pect to
all .uch liability in.uranc.. Le......y .atisfy ita ~
Obligation. h.r.under by providing evidence of ..It-inaurance S
to the satisfaction of Lessor. !
.
.
Cd) Wor~.n's co~~n.ation. Le.... .hall carry
workmen's compen.ation insuranc. cov.ring all -.pl0f88S
working on, in, near or about the Equipment, ord~te to
the .ati.faction of Las.or'that ad.quate ..If-i~ i.
provided, and shall require any other per.on or utity working
on, in, n.ar or about the Equipment to carry .uch coycage,
and wil~ furni.h to Le..or certificat.. .videncing .uch
coverage throughout the Full Lea.e Term.
Ce) General Reauir..,nt.. All in.uranc. r.quired
under this Section 7 shall -.in form and amount and with
compani.. rea.onably .ati.factory to La..or. La.... shall pay
the premiums therefor and d.liver to La..or the policies of
insurance or duplicates th.reof, or oth.r .vid.nc. .ati.-
factory to Lessor of .uch insurance cov.ra,.. Each in.ur.r
shall agr.e, by endorsement upon the policy or polici.. i..u.d
by it or by indep.ndent in.trument furnish.d to La..or, that
Ca) it will give Les.or thirty (30) day.' prior writt.n notic.
of the effective date of any material alt.ration or
cancellation of such policy, and Cb) in.uranc. a. to the
int.re.t of any named additional insured or 10.. pay.. other
than Lessee shall not be invalidated by any action.,
inactions, breach of warranty or condition. or n.gligence of
Lessee with respect to such policy or policie..
7
. 8. RISK OF LOSS; DAMAG. DESA-rION AND CONDmoo.TION, 0
USE OF NB'l' PROCEEDS.
e.) Risk or Loss. Le.... ...um.s .11 ri.k of loes
of or ~a,"'1;o the Equip.nt frOll anycaus. wau.t.oever, and
no .uc:b loU'~f' or a..ge to the Bquipll4lftt, defect: therein, or
unfit..... ~..ol..c.ne. th.r.of, .hall reli.v. Le.... of its
obligation ~~k. r.nt.l p.yment. or perform .ny oth.r
Obligation. h.r.under.
eb) .Da..a.. ~tru~tion .~~ ~'iW'.....tion. It prior
to the t.rain.tion of the ru 1. EA....,... (1). thaBqQ1paut: or
any portion th.r.of is d..troyed (in whole or in Part) or is
daaaged by fir. or oth.r c..ualty; or (2) title to, or the
teaporary u.. of, the Equip..nt or any J!IIlrt th.reof or the
..tats of Le.... or Le..or in the BtUi.-nt or any part
th.reof .hall b. tak.n und.r the ..-rc1ae of the powec of
..in.nt deadn by any gov.r~ntal body or by any JMR'IlOft, fin
or cotpor.tion .cting und.r tov.rnaental authority, t..... and
Le..or will c.u.e the N.t 'roQ..d. of any in.urenoe clataor
condeanation .ward to b. appli.d to Le...... obligation.
pur.u.nt to .ub-p.rt (c) of this S.ction.
(c) Us. of Net Procead.. provid.d the Bqui,....t i.
not dj....d to b. . tot.l 10.., Le.... .hall, at its .xpens. t.
(.ub .ct to .pplic.tion of the N.t Proceed.), cau.. the
repair, replacem.nt or re.tor.tion of the aff.cted ~i~nt.
In the .v.nt of total d..truction of or da..g. to the
Equipaent, Le.... .hall pay to Le..or on the rent par-ent due
dat.. (a. ..t forth on the Sch~ul..) n.xt .UC~edin9 .~
d.t.. of .uch 10.. the amount of the Purch... trios applicabl.
to .uch r.nt paym.nt due dat.., plus the r.ntal pa,.,nta due
on .uch d.t.., plus any oth.r ..ount. th.n payable .))y .x..a..
h.r.und.r with r..p.ct to .uch Equi,..nt. upon.uch par-ent,
the t.rm of the 1.... .nd the ..curity int.r..t of L8*l.or in
the Bquip..nt .h.ll t.rmin.t., .nd Le.... will acquire full
.nd un.ncumb.r.d title to the Equipaent a. provided in section
10 h.r.of. If Le..ee is not th.n in d.f.ult h.reunder, any
portion of the N.t Proceed. in .xc... of the .mount requir.d
to pay in full Les.e.'s oblig.tion. .. ..t forth in this .ub-
p.rt (c) sh.ll be for the account of Le..... Le.... agr...
that if the Net proc.ed. ar. in.uffici.nt to pay in full
Le...... oblig.tions .s ..t forth in this .ubpart (e), Le....
sh.ll m.ke such p.yments to the .xtent of .ny d.fici.ncy.
9. DISCLAIMER OF WARRANTIES. LESSOR, NOT BEING A SELLER
(AS SUCH TERM IS DEFINED IN 'l'HE UNIFORM COMMERCIAL coDE AS
ENACTED IN 'l'HE STATE), NOR A SELLER'S AGENT. HBREBY BXPRESSLY
DISCLAIMS AND MAKES TO LESSEE NO WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, OF MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR O'l'HERWISE, INCLUDING, BUT NOT LIMITED
TO: 'l'HE FITNESS FOR USE, DESIGN OR CONDITION OF THE
EQUIPMENT: 'l'HE QUALITY OR CAPACITY OF THE EQUIPMENT; 'l'HE
WORKMANSHIP IN THE EQUIPMENT: THAT THE EQUIPMENT WILL SATISFY
8
ontRBQUIRBIIENTS OF ANY IAW, 'LE, QzCIFICATION OR "'-I'MC'l' 0
PQ'1'AINtNG'l'HERE'l'O' AND ANY GUARAN'1'Y OR WARRAN'l'Y AGADI8'1'
PA'tBIrr INFRINGEMENT OR IATBIIT DEFIC'l'S, it being a91"e. t:bat
all .uch ri.k., a. betw..n Le..or and Le._., ar., to be born.
by Le..... .Leaaor i. not r..pon.ibl. or liable for any
direct, indirect, incid.ntal or con..qu.ntial daaag. to or
10.... r..ul~lng from th. in.tallation, operation or u.. of
th. lquipaant or any product. manufactured th.reby. All
a..ignable warranti.. ..d. by th. v.ndor(.) or aanufact:urer(.)
to Le..or are h.r.by a..igned to Le.... for and during th.
Full Lea.. T.rm and Le.... agr... to r.aolv. all .ucb clat..
dir.ct:ly with th. v.ndor(.) or .anufactur.r(.). Provided t:bat
Le.... i. not then in d.fault her.und.r, Les.or .hall
cooperate fully with Le.... with re.pect: to th. resolution of
.uch clai.., in good faith and by appropriate proceedinq. at
Le...... expen... Any .uch claim .hall not aff.ct: in any
.anner the unconditional obligation of Le.... to aaka r.nt
paym.nt. h.reunder.
10. PURCHASE OF EQUIPMENT BY LESSEE. Provid.d t:bat
Le.... is not th.n in d.fault under thi. A9r_..nt, any
..curity inter..t of te..or in the applicabl. it... of th.
Equip.ent will b. terminated, this Agr....nt a. to sucb iteas
of th. E~.ip.ent will terminate and te.... will ac~'i~ title
to the applicable ite.. of the Equipment free and ~iesr of all f.,'
lien. and .ncumbrances created by, or ari.ing through or
under, Lessor:
...
(a> at the end of the Full Lea.. T.ra with re.pect:
to tho.e ite.. of the Equip..nt d..cribed on a certificate of
Acc.ptanc., upon payment in full of all r.ntal payaant:s and
oth.r amount. payable by Le.... h.reund.r for the Full Lea..
Term with r..pect to tho.e ite.. of the Equip..nt,
(b> on any rent paym.nt due date with r..p.ct to
tho.e ite.. of the Equip.ent d..crib.d on a c.rtificat. of
Acc.ptance, upon payment by Le.... of the th.n applicabl.
Purcha.. Price a. ..t forth on the applicabl. Sch.dul. plus
all oth.r amount. then due by Le.... her.und.r.
11. QUIET POSSESSION. Le.sor repr..ent. and cov.nant.
to Les.ee that Le..or has full authority to .nt.r into thi.
Agr....nt, and that, conditioned upon Le..e. perforaing all of
the covenant. and conditions hereof, as to claim. of Le..or or
per.on. clai.ing under Lessor, Lessee shall peaceably and
quietly hold, pos.ess and use the Equipment during th. term of
this Agreement subject to the terms and provision. her.of.
12. ASSIGNMENT: SUBLEASING: INDEMNIFICATION.
(a> Assianment bv Lessor. Thi. Agr..ment, and the
right. of Le.sor h.reunder, or in, to and und.r individual
Certificates of Acceptance, the item. of Equipm.nt de.crib.d
th.rein and the Schedules attached th.reto, may b.'a..ign.d
9
anc:l r~.ign.d in whole or in pat to o. or JIOre a..iCJll'" or
.uba..iCJll... by Le..or, it. a..ign.,- or .ub...ign... at any
ti.. without th. nece..iti of ob~.J.n~ the consent of Leea...
......or .9r... tf!!:;41v. not c. of ...1...."t to Lee." .nd upon
.:.ceipt of SUob'~,' ice, Le.... .9r....o ... .ny book .nui..
. r.quired a. a .. JlP!i' t of .uch a..i9....t to .ccur.t.ly recoJ:d
th. identity of~iCJlle. wh1ch Sh.ll be .ntiUed to th. rental
p.ya.nts ..t forth on th. schedule(.) ...i9aed, .nd to Nke
all p.ya.nt. to the ...1gn.. d..ignat.4, in th. ...1~t,
notwith.tanding .ny clai., def.ns., ..~off or count.rcl.1.
what.oev.r (wh.th.r arising fro. a br__ of this ACJr88UIlt or
oth.rwis.) that Le.... may frOll ti.. to ti.. hav. ag.inst
Le.sor or Le..or'. a..ign.... ~.....vr'" to ...cute all
document., including notic.. of'a..i~tand chatt.l
.ortga9.. or f in.ncing .tat...n, ts, whi~= re..onably be
r.qu..ted by Le..or, it. a..i,... or .1qne.. to protect
their int.rests in th. Equip..nt and in thi. Agr....nt.
(b) No Sa1.. u.ian~t: ~\' ~~~l't:~na bY T~.".
'l'bis Agr....nt and th. 1nt.rut of, LiI!II'" ',n the Equipment -y
not be .old, as.igned, subl.t or .ncujDered by Le.... without
the prior writt.n cons.nt of Le.sor.
(c) R.1.a.. and In~"'!I,.i~~=on ~.nant:.. '1'0 th.
.xt.nt p.rmitt.d by th. law. "" CO' , . tufton of the. state,
Le.... h.r.by a..u... and agr... to inJ.-nify, proteGt, AV.
and k..p harml... Le..or, it. a,.nt. abd employ..., from aAd
again.t any and all 10...., d"'9..' injuri.., cl.1a8, d.-.nd.
and .xp.n..., including l.gal .XJMhUI8., of what.oever kill\land
natur.,arising on account of (1) th. oJ:d.r1ng, aoqlll.1tlon,
d.liv.ry, in.tallation or r.jectionof th. Equipment. (2) th.
po.....ion, maint.nance, us., condition (including, without
li.itation, lat.nt and oth.r defect. wh.th.r or not
di.cov.rabl. by Le..or' or Le...., any claim in tort, including
action. for .trict liability, and any claim for pat.nt,
trad.mark or copyright infring...nt) or operation of any it..
of th. Equip..nt (by who.o.v.r u..d or op.rat.d)' or (3) th.
10.., da.age, d..truction, r.1IOVal, r.turn, .urrend.r, .al. or
oth.r di.position of the Equipment, or any it.. th.r.of. It
i. und.rstood and agr..d, hOWeV.r, that Le..or shall give
Le.... pro.pt notice of ~ny claim or liability h.reby
indemnified against and that Le.S.. .hall b. .ntitl.d to
control th. d.f.ns. ther.of, .0 long as Le.... i. not in
default hereund.r.
13. EVENTS OF DEFAULT AND REMEDIES.
ea) Event. of Default. The following .hall b.
"event. of default" under this Agr....nt and th. teras ".vent
of d.fault" and "default" shall ..an, wh.never th.y ar. \lAd
in this Agreement, anyone or more of the following .v.nt.:
10
o
....
'I
,
"
. (1) failure. Le.A to pay any rental 0
pa~nt or other payment required to be paid hereund.r at th.
ti.. .pecific herein; or
, .~ (2) failure by Le.... to ob..rv. .nd parforJI
.ny Otba:l':E.nt, condition or .gr....nt on ita part to be
ob..rved or fOrll.d h.r.und.r and .uch failure .b.ll con-
tinu. unr led for a p.riod of thirty (30) day. .ft.r
written notic. .p.cifying .uch failure and r.qu..ting that it
be r...died, unlee. Les.or .hall agr.. in writing to an
.xten.ion of .uch time prior to it. expiration, or
(3) any certificat., .tat...nt, r.pr~~tion,
warr.nty or .udit contain.d her. in or h.r.tofor. Or bereafter
furni.h.d with re.pect h.r.to by or on beh.lf of Le....
proving to h.v. b.en fal.e in any mat.ri.l r..pect .ttba tt..
a. of which the fact. ther.in ..t forth were .t.ted Or
c.rtified, or having omitt.d any sub.tantial conting.ntor
unliquidat.d liability or claim again.t Le...., or
(4) comm.nc.m.nt by Le.... of . c... or pro-
c..ding und.r the F.deral bankruptcy law. or filing ~ .Les...
of any petition or answ.r s.eking reorgania.tion, arra~,
cOllpo.ition, r.adju.tment, liquidation, moratoria oralal1ar
r.1i.f und.r any .xisting or future b.nkruptcy, inao1venay or i
oth.r .imilar law. or an answer admitting or not ~1n9 t
the mat.rial allegations of a p.tition fil.d again.t Le.... in t
any .uch proc.eding;
(5) a p.tition again.t Le.... in a proceeding
und.r any .xi.ting or future bankrup~, in.o1v.ncy Or oth.r
si.i1.r law. .ha1l b. fil.d and not withdrawn or di..i..ed
within sixty (60) days th.r.aft.r; or
(6) an attachm.nt, l.vy or .x.cution i.
thr.at.n.d or levied upon or again.t the Equip..nt or any it_
th.reof.
(b) Remedie. on Default. Wh.n.v.r any ev.nt of
d.fault .hall have occurred and b. continuing, Lessor .hal1
have the right, at it. sole option without any furth.r demand
or notice, to .xerci.e any on. or mol'. of the following
r.m.di.s:
(1) with or without t.rllinating this Agr....nt,
retake po.....ion of the Equipm.nt and ..11, 1.... or .ubl....
it... of the Equipm.nt for the account of Le...., with the net
amount of all proce.ds r.c.iv.d by Les.or to be applied to
Le....'. Obligation. h.reund.r including, but not limited to,
all paym.nt. due and to b.com. due during the Full Le... T.rII,
holding Le.... liable for the eXC... (if .ny) of (i) the
r.ntal paym.nt. and the amount. payab1. by Le.... h.r.und.r to
the .nd orth. original Term or then curr.nt R.n.wal T.rJI
(which.v.r is applicable) and any oth.r amount. then payab1.
11
b~.... b.r.und.r (inClUdi~but ~ li.it.d to .ttorn.y.' ~
t..., .xpen... .nd co.t. ot r.po.....ion), ov.r (ii) the n.t
purcb... price or r.nt .nd otb.r .lIOunt. p.id by . purcba_r,
. 1..... or .ubl..... ot .ucb .itua of th. Equipm.nt pursuant to
.ucb ..1., ~... or .ubl...., provided tb.t th. oc._ (if
.ny) ot .u~ J~lIOUnt. ov.r th. th.n applic.bl. Purcha.. Pric.
.nd tb. .IIO~. r.t.rred to in cl.u.. (i) .b.ll be p.id to
Le.... ; ."".
(2) r.quir. Le.... .t Le....'. ri.k .nd expense
pro.ptly to return the Equi,.ent in th. mann.r .nd condition
r.quir.d in S.ction 5(b) b.r.ot to .uch location .. i.
.peciti.d by Le..or;
(3) it Le..or i. un.bl. to r.~a..a th.
Equipm.nt tor .ny r..son, th. Equips.nt .h.ll be d....d .
tot.l 10.. .ndLe.... .h.ll p.y to Le..or the .lIOunt due
pur.u.nt to s.ction 8 bereot; and
(4) .xerci.e any otb.r right, r..-dy or privi-
l.g. wbicb .ay b. available to it und.r .pplicabl. lawa of the
st.t. or any otber applicabl. law or proce.d by .ppropriat.
court action to enforce tbe t.rms of this Aqr....nt or to
recover d.m.g.. for tbe breacb of tbi. Agr....nt or to re.cind
tbis Agr..m.nt as to tbe Equipm.nt. I
'!
~.
. .
In addition, Le.see will r.main li.bl. tor .11 leg.l
fe.s .nd otber co.ts and .xp.nse., including court coata,
incurr.d by Le..or witb resp.ct to tb. .nforceaent of .ny of
tb. remedi.s listed above or any otber rem.dy .v.il.bl. to
Les.or. .
(c) No Remedv Exclusive. No r.mady h.r.in conf.rr.d
upon or r..erv.d to Le.sor i. int.nd.d to be .xclusiv. and
every .ucb r.medy .ball be cumul.tiv. and sb.ll b. in .ddition
to .v.ry otb.r r.m.dy giv.n und.r tbis Agr....nt or now or
b.r.aft.r exi.ting at law or in equity. Le..or'. remedi..
b.r.under m.y be .x.rcis.d separately with r..pect to items of
tb. Equip.ent. No d.lay or omission to .x.rci.. .ny right or
pow.r accruing upon any detault sball impair .ny .uch right or
pow.r or shall b. construed to be a waiv.r tbereof, but .ny
such rigbt and pow.r may be exercised from time to time and .s
often as may be de.m.d expedient.
14. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Le....
fails to perform or comply witb any of it. agr....nts con-
tained berein, Lessor sball bave the rigbt, but sball not b.
obligated, to effect such performance or compli.nc., and th.
amount of any out of pocket expenses and oth.r r..son.bl.
expens.s of Les.or incurred in connection with tb. perfor-
mance of or compliance witb sucb agr..ment, tog.th.r witb
interest tbereon at tbe rate of one hundr.d tw.nty (120) p.r
cent of tbeprim. Rate on tbe date of paym.nt by Lessor (or
sucb lesser amount as may be permitted by law), sball be
12
-
- -
-
---.-..
-.....
~bl. by Le.... upon d.ma. A. CLd h.r.in, .Prt.e bu. 0
.ball mean the rat. of int.r..t from ti.. to ti.. announced by
Maryland National Bank, Baltiaore, M.ryl.nd, a. it. prt.e
r.t., wh.th.r or not such r.te i. oth.rwi.e publi.hed.
Withi~' ~-(10) days of receipt, Lea... ahall execuu,
endor.. and '-liv.r to Lessor .ny deed, conv.lanc., a..i9Jlll8ftt
or oth.r i . .nt in writing .. may be requ r.d to v..t in
Le..or any right, title or power whicb by the t.r.-
h.r.of ar. exp~e..ed to be conv.yed or conferred upon Lea8or,
inclUding, witbout limitation, (a) Uniform c~rcial Code
financing .tat..ent. (including continuation .tat..-nta), real
property waivers, (b) document. and checka or dratt. relatincJ
to or received in payment for any lo.s or d...ge under the
pOlici.. of insuranc. required by tbe provi.ion. of SeDtion 7
h.reof to the e~ent that tbe ..m. rel.te. to the ~'...nt'
.nd (c) upon d.fault or nonappropriation Or tt.e. ~
.. Le..or in it. sole and .b.olute di.cr.tion ..y detezaine,
of Le.... upon .ny bill of ..le, docum.nt, in.t~nt,
invoice, freigbt bill, bill of l.ding or .iailar docuaent
rel.ting to tbe Equipment in order to v..t title in Le..or and
tr.n.fer po.....ion to Lessor.
15. MISCELLANEOUS.
" (.) Notices. All notice. (.xcluding bUU",. ,and
co..unic.tion. in the ordin.ry cour.e of bu. in...) ~
.b.ll be in writing, ..nt by c.rtified ..il, retQJn ....1pt
reque.t.d, .ddr....d to the oth.r party at It. respective
.ddre.. .t.ted below the .1gnatur. of .uch p.rty or at 8\ICb
other .ddr... .. sucb party .b.ll from tlme to tt.e d"l9ft&u
in writing to tb. other p.rty, and .h.ll be .ffectlve froa the
d.t. of mal1lng.
(b) Bindina Eff.ct. Thi. Agr....nt .hall inure to
tbe b.n.fit of .nd .b.ll be blnding upon Le..or .nd t..... .nd
tbeir re.pective successor. and ...1gn..
(c) Severabilitv, Survival. Any provi.ion ofthi.
Agr.em.nt wbich 1. prohibit.d or un.nforc.abl. in any juri.-
diction .b.ll, .s to such juriSdiction, be in.ff.ctiv. to the
ext.nt of such prOhibition or un.nforce.bility wlthout
invalid.ting the remaining provisions h.r.of, and any .uch
problbitlon or unenforc.ability in .ny jurisclictlon .hall not
inv.lidat. or render unenforceable .uch provi.ion in .ny oth.r
juri.diction. To the extent permitted by .pplicabl. l.w,
Le.... h.reby waive. any provision of l.w which rend.r. .ny
provi.ion her.of prohibited or unenforc..bl. ln any r..pect.
Tbe repr..ent.tions, w.rr.nti.. .nd coven.nt. of
Le.... ber.in .hall be de.med to b. continulng .nd to .urvlv.
tbe clo.ing hereunder. Each execution by Le.... of a Sch.dul.
sball be deemed a reaffirmation and warranty th.t there sball
bave been no material adverse change in tbe fin.ncial
,-
:!Io,l
13
-.L
.....
-
--
...
cA:Ution of Le.... from theat. oO.x.cution her.of. Th. .
obligation. of Le.... und.r s.ction. 1(.), 6 and 12(c), wbiab
accru. during the t.rm of tbi. Ag~..m.nt, .hall .urviv. th.
t.rmination of this Agreem.nt.
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(it.Rx.cution in Count.rDart.. Thi. Agr.eMIlt -y
b. .x.cuted '0 ..v.ral count.rpart., .ach of which .hall be an
original a~l of which shall constitut. but on. and th.
.am. in.trum.nt.
(.) ADDlicabl. Law. Thi. Agr...ant: shall be
gov.m.d by and con.tru.d in accordanc. with th. law. of th.
stat..
(f) CaDUon.. Th. capUon. in thi. AgreeMllt an
for conv.ni.nc. of r.f.ranc. only and .ball not d.fin. or
li.it any of the t.rm. or provi.ion. b.reof.
(g) Entir~ Aar....nt. Thi. Agr....nt conatltut..
the .ntir. .gr...nt' b.tw..n Le..or .nd Lea.... No _lv.,
con..nt, modification or cbang. of t.ras of thi. Aljr....nt .
.ballbind .ith.r party unl.ss in writing .igned by botb
parti.., and th.n such w.iv.r, con..nt, aodification GC abang.
.ball be .ff.ctive only in the .pecific in.tanea and for th.
.pecific purpo.. given. Tb.re are no un4er.tandin;8, I
.gr..m.nt., repr.s.ntations or warr.a. nU.., .xpr... or 1911ed, .
not .pecifi.d h.rein regarding thi..Agr....nt or tbe.........nt ,
l....d h.r.und.r. Any t.rm. .nd condition. of any ~. .
ord.r or oth.r docum.nt (with tb. exc.ption of .UlPl_thU)
.ubmitted by Le.... in connection with thi. Agneunt which
are in addition to or incon.i.t.nt witb the t.ras and
condition. of this Agree..nt will not be binding on Le..or and
will not apply to this Agr....nt. Le.... by th. .lIQtun
b.low of it. authorized r.pr...ntativ. aQknowledg" that it
h.. r.ad this Agr....nt, und.r.tand. it, and .gr... to be
bound by it. term..and condition..
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IN WITNESS WHEREOF, the parties hereto have caused this
. Agree_nt to be duly executed as of the day and year fint
above set f~.
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ATTEST:
MNC LBASING, A DIVISION OF
MNC CREDIT CORP
Lessor
ATTEST:
By:
502 WashinClton Avenue
Towson, Maryland 21204
CITY OF SAN BERNARDINO,
CALIFORNIA
Les.ee
By:
300 North -D- street
San Bernardino, CA 12418
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Attached to and made a part of that c.rtain Bqui~nt
Lea../Purcha.. Agr....nt ("Agre..nt") date4 a. of
, 1.990 by and bet....n MHC I.BASDfG, A DIVISION OP
MHC CltBDIT CORP, a. l..sor, and' CITY 0.. SAIl BBIt1GRDIHO,
CALIPORNIA, a. 1......
RIDER NO.
1. Th. partie. a..ume that Le..or can elC1ude the
int.re.t compon.nt of the rental payaenta froa Pederal VZO-.
inco... Le.... cov.nants and agre.. that it will(!) uae a
book .ntry .ystem to regist.r the owner of this ~t so
a. to ..et the applicable r.quir...nt. of seation 14'(a) (3) of
the COd., (ii) timely file a Fo~ 8038-G (or, if the involoe
pric. of the Equip.ent is l.s. than $100,000, a ro~ I031-GC)
with the Internal Revenue Service in accordanoe with sectidn
14'(.) of the Code, (iii) not pe~it th..Bqui~ to be
directly or indir.ctly used for a private bu.i"'*. usa w~1n
the ..aning of S.ction 141 of the Cod.; and (iv) O;"'JI\ly"lth ,
all provi.ions and regulation. applicabl. to exe1udliV 1
int.r..t from Federal gross inco.. pursuant to seation103 of
the Code.
2. If Le.sor either (i) receive. notice, in any fOra,
from the Int.rnal Revenu. s.rvic.; or (11) reasonUJly......-
mines, based on an opinion of independ.nt tax counsel ....~ed
by Le.sor and approv.d by Le...., which approv-.1 Lu...tdaall
not uar.a.onably withhold, that Le..or may not exclude anr
int.re.t from F.d.ral gross inco.. becau.. Le.... br..Ghed a
cov.nant contained herein, then Le.s.e .hall pay to Le..or
within thirty (30) days aft.r Le..or notifi.. Lee... of.uch
d.terlllination an amount equal to the sum of (x) penaltl..,
fin.s, interest, and additions to tax (inclucUnq tax.. iIIpo..d
on the interest component of all rental payaent. due throUgh
the date of such event) that are impo.ed on Le.eor a. a ~sult
of the loss of the exclusion and that Le.sor cannot deduct in
computing its Federal income tax liability divided by on.
minus the high.st Federal regular marginal tax rata in .ff.ct
for the tax period for which Lessor lost the exclu.ion Qlua
(y) p.nalties, fines, interest, and addition. to tax that ar.
imposed on Les.or as a result of the loss of the exclu.ion and
that Lessor can deduct in computing its Fed.ral inco.. tax
liability. Additionally, Lessee agrees that upon the
occurrence of such an event, it shall pay additional .rent to
Le.sor on each succeeding rent payment due date in such amount
as will maintain Lessor's after-tax yield on the tran.action
evidenced by this Agreement.
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3. The obligations of Lesse~ hereunder which accrue
during the tera of this Agreement shall survive teraination of
this Agre~.
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The partie.:'jiree that this Rider is an integral part of the
Agreement. . ~':
Date:
MNC LEASING, A DIVISION 01' DC
CREDIT CORP
Lessor
By:
CITY OF SAN BERNARDINO,
CALIFORNIA
Lessee
By:
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