HomeMy WebLinkAboutR02-Economic Development Agency
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~EVELOPMENT DEPARTMEN'f>
OF THE CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
REOUEST FOR COMMlSSION/COUNCILACTION
FROM: KENNETII J. HENDERSON
Executive Director
SUBJECT: TRANSOCEAN FUNDING, INC
LEASE
DAm: September27,I994
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Svnonsls of Previous Commls.lon/CouncWCommittee AdIon(sl:
au July 20, 1994 the Communi1:y Deve10pment Commission approved and adopted the fisca1 year 1994/1995 Economic
Development Agency budget as recommended.
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Recommended Motlon(sl:
(Communltv Develonment Commission l
MOTION: RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDINO ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AUTHORIZING EXECUTION OF THE LEASE BY AND BETWEEN THE
ECONOMIC DEVELOPMENT AGENCY AND TRANSOCEAN FUNDING, INC.
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KENNETIlJ.HENDERSON I
Executive Dlreetor
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Contact Person(s): Barbara J. Lindseth
Phone:
5081
Project Area(s): All
Supporting Data Attached: StaffReoort:
F1JNDING REQUIREMENTS: Amount: $ NIA
Ward(s):
1-7
Source:
NIA
Budget Authority: NIA
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Commlsslon/CouneD Notes:
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BJL:lag: I 0-0 1-0 1.00c
COMMISSION MEETING AGENDA
MEETING DATE: 10/03/1994
Agenda Item Number: Z
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DEVELOPMENT DEPARTMENT
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Transocean Fundine. Inc. - Lease
On July 20,1994, the Community Development Commission adopted the Economic Development
Agency fiscal year 1994-95 budget, including a specific line item in the estimated amount of
$33,000 per year for five (5) years for the lease purchase of an imaging system to enhance the
current Wang main frame computer system ($1.00 buy-out at the end of the fifth year).
This imaging system is an Integrated Imaging System WIIS designed to electronically manage,
file, store and process all paper-bond information, either current (estimated at 800,000 pieces of
paper) or future, and will be directly attached to the current main frame system. The system will
consist of scanners, monitors, software, jukebox (for storage) and image workstations. Further,
this imaging system will allow for the off-site storage and disaster recover of all Agency
documents (agreements, notes, deeds, letters, memorandum, etc.) in the case of fire, earthquake
or other natural disaster.
In the currently adopted budget, the lease purchase was estimated at $33,000 per year; the actual
cost will be $34,145 per year for five (5) years. It is anticipated that there will be savings of
$1,145 in the current line item offixed assets to cover the additional costs of the lease.
Adoption of this resolution will allow staff to enter into the lease purchase agreement with
Transocean Funding, Inc., for the lease purchase of the Wang Imaging system.
Staff recommends adoption of the resolution.
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KENNEm J. HENDERSON, Executive Director
Development Department
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BJL:1ag: 10-01-0 1.cdc
COMMISSION MEETING AGENDA
MEETING DATE: 10/03/1994
Agenda Item Number: ~
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RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF SAN BERNARDINO ON
BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO AUTHORIZING EXECUTION OF THE LEASE
BY AND BETWEEN THE ECONOMIC DEVELOPMENT AGENCY
AND TRANSOCEAN FUNDING, INC.
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8 governing board of the Redevelopment Agency of the City of San
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WHEREAS, the Community Development Commission is the
Bernardino (the "Agency") and acts on behalf of the Agency; and
WHEREAS, the Agency desires to enter into a lease with
Transocean Funding (the "Lease") for the use of certain equipment
necessary for the operation of the Agency, specifically the
management and storage of documents; and
WHEREAS, the Agency has allocated funds for payments
under the Master Lease/Purchase Agreement which will be dated as
of August IS, 1994 (the "Lease Agreement") in its Fiscal Year
1994-95 Budget and as provided in the Lease Agreement would be
required to appropriate sufficient funds to pay the Lease each
year; and
WHEREAS,
the Agency has duly considered such
transactions and desires at this time to approve and provide for
the execution and delivery of the Lease Agreement in the public
interests of the Agency.
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12 Section 3. The Agency hereby approves the Lease
13 Agreement and further authorizes and directs that the form of
14 Lease Agreement presently on file with the Agency Secretary be
15 converted into the final form of Lease Agreement, together with
16 such changes or modifications as deemed necessary or desirable by
17 the Chairman or Agency Administrator upon the recommendation of
18 counsel. The Chairman, Agency Administrator, Acting Executive
19 Director or other such authorized officer of the Agency is hereby
20 authorized and directed to execute and deliver, and the Agency
21 Secretary or Acting Agency Secretary is hereby authorized and
22 directed to attest to, the final form of Lease Agreement when the
23 same has been prepared for and in the name of the Agency, and
24 such execution and delivery shall be deemed to be conclusive
25 evidence of the approval thereof. The Agency hereby authorizes
26 the delivery and performance of the Lease.
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NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION,
ACTING ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS
FOLLOWS:
Section 1. The Recitals hereinabove are true and
correct and are incorporated herein by this reference.
Section 2. The Agency hereby finds and determines
that the Lease will result in benefits to the Agency.
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1 Section 4. The Chairman, Agency Administrator,
2 Acting Executive Director, Agency Secretary or Acting Agency
3 Secretary, Counsel and any and all other officers of the Agency
4 are hereby authorized and directed, for and in the name and on
5 behalf of the Agency to do any and all things and take any and
6 all actions, including execution and delivery of any and all
7 assignments, certificates, agreements, notices, consents, and
8 other documents, which they, or any of them, may deem necessary
9 or advisable in order to consummate the Lease as described
10 herein.
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1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF
SAN BERNARDINO ON BEHALF OF THE REDEVELOPMENT AGENCY OF THE CITY
2 OF SAN BERNARDINO AUTHORIZING EXECUTION OF THE LEASE BY AND
BETWEEN THE ECONOMIC DEVELOPMENT AGENCY AND TRANSOCEAN FUNDING,
3 INC.
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Section 5.
Effective Date.
This
Resolution
shall take effect from and after its passage and adoption.
I HEREBY CERTIFY that the foregoing Resolution was duly
adopted by the Community Development Commission of the City of
San Bernardino at a
meeting
thereof, held on the
day of
1994, by the following vote, to wit:
Commission Members:
AYES
NAYS
ABSTAIN
ABSENT
NEGRETE
14 CURLIN
HERNANDEZ
OBERHELMAN
DEVLIN
POPE-LUDLAM
MILLER
day of
Secretary
The foregoing resolution is hereby approved this
, 1994.
Approved as to
form and legal content:
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By: ..._:..;/r..,'ly..,..-r\{....~;i7. "
Agency CbJiJisel
Tom Minor, Chairman
Community Development
Commission of the
City of San Bernardino
SBEO\OOOl\DOC\1020
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STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss
CITY OF SAN BERNARDINO )
I, Secretary of the Community
Development Commission of the City of San Bernardino, DO HEREBY
CERTIFY that the foregoing and attached copy of Community
Development Commission of the City of San Bernardino Resolution
No. is a full, true and correct copy of that now on
file in this office.
IN WITNESS WHEREOF, I have hereunto set my hand and
affixed the official seal of the Community Development Commission
of the City of San Bernardino this day of
, 1994.
Secretary of the
Community Development Commission
of the City of San Bernardino
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MASTER LEASE I PURCHASE AGREEMENT
dated as of AUGUST IS, 1994,
between
TRANSOCEAN FUNDING, INC.,
as Lessor I Issuer
and
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CITY OF SAN BERNADINO,
ECONOMIC DEVELOPMENT AGENCY,
as Lessee
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ARTICLE I
AGREEMENT TO LEASE
REPRESENTATIONS AND COVENANTS
City of San Bernardino, Economic Development Agency ("Lessee") requests Transocean Funding,
Inc. ("Lessor/Issuer") to acquire personal property as more fully described on an Exhibit B hereto and
incoIporated by reference herein (the "Equipment"). Lessee agrees to lease the Equipment from Lessor and
Lessor agrees to lease the Equipment upon written acceptance hereof signed at the Lessor's principal office by an
authorized officer upon the terms and conditions of the MASTER LEASElPURCHASE AGREEMENT (the
"Lease.). Lessee represents. covenants and warrants. and as requested by Lessor. will deliver an opinion of
counsel substantially in the form attached as Exhibit E hereto to the effect (i) that it is a public body cOIpOrllle and
politic. duly organized and validly existing under the laws of the State of California and has full power and
authority to execute and deliver this Lease. to enter into the ttansactions contemplated by this lease and to carty
out its obligations hereunder. and (ll) that the Lease has been duly authorized, executed and delivered by Lessee
and constitutes a legal. valid and binding agreement enforceable against Lessee in accordance with its teons.
Lessee agrees. declares and covenants that it will do, or cause to be done, all things necessary within its power to
preserve and keep the Lease in full force and effect. Lessee further represents, covenants and wammts that Lessee
has complied with all bidding requirements where necessary and by due notification presented this Lease for
approval and adoption as a valid obligation on its part; that Lessee has and will have sufficient appropriations or
other funds available to pay all amounts due hereunder; that the Equipment is necessary and essential to enable to
the Lessee to operate, maintain, and provide governmental services; and that the Lease Payments during the Lease
Term (as such terms are defined below) are equivalent to, and do not exceed, fair rental value for the Equipment
for a lease/purchase of the Equipment by the Lessee.
Pursuant to Section 265(8)(3)(111) of the Internal Revenue Code of 1986, as amended (the "Code"),
the Lessee hereby specifically designates the Lease as a "qualified tax-exempt obligation" for purposes of
Section 265(8)(3) of the Code.
In compliance with Section 265(8)(3)(0) of the Code, the Lessee hereby represents the Lessee will
not designate more than $10,000,000 of obligations issued by the Lessee in the calendar year during which
the Lease is executed and delivered as such "qualified tax-exempt obligations."
ARTICLE II
LEASE OF EQUIPMENT
Section 2.1.~. Lessor hereby leases and sells the Equipment to Lessee, and Lessee hereby leases
and purchases the Equipment from Lessor, upon the teons and conditions set forth in the this Lease.
Section 2.2. Possession and Eniovrnent. Lessor hereby covenants to provide Lessee during the term of
this Lease with the quiet use and enjoyment of the Equipment, and Lessee shall during the term of the Lease
peaceably and quietly have and hold and enjoy the Equipment, without suit or hindrance from Lessor, except as
expressly set forth in this Lease. Lessor will, at the request of Lessee and at Lessee's cost, join in any legal action
in which Lessee asserts its right to such possession and enjoyment to the extent Lessor lawfully may do so.
Section 2.3. Lessor Access to Eouioment. Lessee agrees that Lessor shall have the right at all reasonable
times to examine and inspect the Equipment. Lessee further agrees that Lessor shall have such rights of access to
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the Equipment as may be reasonably necessary to cause the proper maintenance of the Equipment in the event of
failure by Lessee to perform its obligations hereunder.
ARTICLE m
WARRANTIES
Lessor has provided Lessee with cenain written limited warranties with respect to the Equipment.
Except for such limited warranties, NEITHER LESSOR NOR ANY ASSIGNEE OF LESSOR MAKES ANY
WARRANTIES WITH RESPECf TO THE EQUIPMENT, EITHER EXPRESS OR IMPLIED,
INCLUDING IMPLIED WARRANTIES OF MERCHANTABll.ITY OR nTNESS FOR PARTICULAR
PURPOSE AND EXPRESSLY DISCLAIMS THE SAME, EXCEPT AS PROVIDED ABOVE, NEITHER
LESSOR NOR ANY ASSIGNEE OF LESSOR SHALL HAVE ANY LIABll.ITY TO LESSEE FOR ANY
CLAIM, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DmECTLY, INDIRECTLY,
INCIDENTALLY OR CONSEQUENTIALLY BY THE EQUIPMENT, BY ANY INADEQUACY
THEREOF OR DEFICIENCY OR DEFECf THEREIN, BY ANY INCIDENT WHATSOEVER IN
CONNECfION THEREWITH ARISING IN STRICf LIABll.ITY, FROM LESSOR'S NEGLIGENCE OR
OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING. OUT OF TIllS LEASE AND
EXPRESSLY DISCLAIM THE SAME. The obligation of Lessee to pay the Lease Payments as defined in
Section 4.2 below, shall not be abated, impaired or reduced by reason of any claims of Lessee with respect to the
condition, quality, workmanship, delivery, shipment, installation, defects or other matters involving the
Equipment.
ARTICLE IV
TERM OF LEASE; LEASE PAYMENTS;
TITLE TO EQUIPMENT; SECURITY INTEREST
Section 4.1. Lea.e Term. Following Lessee's execution of said Lease, this Lease shall become effective
upon the execution hereof by Lessor. The term of this Lease ("Lease Term") shall commence and end as defmed
in an Exhibit C applicable to the equipment.
Section 4.2. Lease Pavrnents.
(a) Lessee agrees to pay total lease payments ("Lease Payments") set forth in Exhibit C respecting the
specific schedules of equipment to which such exhibit relates, including interest, on the dates lind in the amounts
specified in an Exhibit C, for and in consideration for the right of possession of, and continued quiet use and
enjoyment of, the Equipment during each payment period. Said Lease Payments shall be payable without notice
or demand at the office of the Lessor specified on the cover page of the Lease (or such other place as Lessor may
from time to time designate in writing) on the 15th day of the month preceding the payment dates set forth in such
Exhibit C. Any notice, invoicing, purchase orders, quotation or other forms or procedures required by Lessee as
a condition precedent to payment shall be fully explained and provided to Lessor or its assignee sufficiently in
advance of payment due date for the completion thereof by Lessor or its assignee prior to such payment date.
Except as provided in Section 4.2(c) hereof, Lease Payments shall be paid absolutely and unconditionally in all
events and without assertion of any right to any set-off, defense or counterclaim.
(b) Lessee reasonably believes that funds will be available to make all Lease Payments during the Lease
Term and hereby represents that it intends to do all things lawfully within its power to obtain, maintain and
properly request and pursue funds from which the Lease Payments may be made, including making provision for
such payments in budgets submitted to its board for the purpose of obtaining funding, using its bona fide best
efforts to have such portion of the budget approved and exhausting all available administrative reviews and
appeal, if any, in the event such portion of the budget is not approved. It is Lessee's intent to make Lease
Payments for the full Lease Term to the extent it has legally available funds.
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(c) If sufficient funds are not appropriated by Lessee's Board and other funds, if any, are not legally
available for payment of the Lease Payments due during the succeeding fiscal year of Lessee and if Lessee
provides Lessor with written notice of such non-appropriation ninety (90) days prior to the expiration of the fiscal
year for which funds were appropriated, the Lease shaI1 terminate and be cancelled and Lessee shaI1 immediately,
upon the exhaustion of the funding authorized for the then current fiscal year, surrender possession of the
Equipment, or at Lessor's option, return the Equipment to Lessor, at Lessee's expense (including all freight
charges), in the same condition as when delivered to the Lessee, reasonable wear and tear excepted, to such place
or on board such carrier, packed for shipping, as Lessor may specify.
If the provisions of this Section 4.2(c) are exercised by Lessee, Lessee agrees not to purchase,lease, use
or rent equipment performing functions, or obtain service from any person using equipment, similar to those
performed by the Equipment period of three hundred sixty (360) days commencing with the first day of the fiscal
year for which sufficient funds have not been appropriated to pay the Lease Payments coming due during such
period.
Lease Payments for each payment period during the term of this Lease shaI1 constihlte the total amount
due for said payment period, and shaI1 be paid by Lessee for and in consideration of (1) the right of possession of,
and the continued quiet use and enjoyment of the Equipment during each such payment period, and (2) the option
to purchase the Equipment by payment of the amount prescribed in Article XI.
Lessor and Lessee understand and intend that the obligation of the Lessee to pay lease payments
hereunder shall constihlte a current expense of Lessee, and shall not in any way be construed to be a debt of
Lessee in contravention of any applicable constihltional or stahl tory limitations or requirements concerning the
creation of indebtedness by Lessee.
Section 4.3. Title to Eallipment. Securitv Interest. Title to the Equipment is deemed to be in Lessee so
long as Lessee shaI1 not be in default pursuant to Article XII below and/or this Lease shaI1 not have been
terminated pursuant to the provisions of Article XI. In the event of default by Lessee under Section 12.1, title
shaI1 be reverted immediately in and shaI1 revert to Lessor free of any right, title or interest of Lessee unless
Lessor elects otherwise. To secure all of its obligations hereunder, Lessee hereby grants to Lessor a security
interest in any and all right, title and interest of Lessee in the Equipment, agrees that this Lease may be filed as a
financing statement evidencing such security interest, and agrees to execute and deliver all financing statement
and other instruments necessary or appropriate to evidence such security interest. Lessee further agrees that the
Uniform Commercial Code shaI1 apply as between the parties hereto and assignees of Lessor.
Lessee shaI1 have no right, title or interest in the Equipment or any additions, repairs, replacements or
modifications thereto except as expressly set forth in the Lease.
ARTICLE V
USE; REPAERS; ALTERATION
Section 5.1. Use: Renairs. Lessee shaI1 use the Equipment in a careful manner and shaI1 comply with all
laws, ordinances and regulations relating to, and shaI1 pay all costs, claims, damages, fees and charges arising out
of, the Lease and the Equipment. Lessee, at its expense, shall keep the Equipment in good repair and furnish all
parts, mechanisms and devices required therefor.
Section 5.2. Alteration. Lessee shaI1 not make any alterations, additions or improvements to the
Equipment without Lessor's prior written consent unless such alterations, additions or improvement may be made
without diminishing the resale value of the Equipment.
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ARTICLE VI
LOSS; IRREPARABLE DAMAGE
Lessee shall bear the entire risk of loss or damage to the Equipment from any cause whatsoever, and no
such loss or damage to or condemnation of the Equipment nor defect therein nor Wlfitness or obsolescence thereof
shall relieve Lessee of the obligation to make Lease Payments or any other obligation under the Lease, except as
provided in subparagraph (b) below. In the event of damage to any item of Equipment, Lessee shall immediately
place the same in good repair. If Lessor determines that any item of Equipment is lost, stolen, destroyed or
damaged beyond repair, or condemned, Lessee at its option shall:
(a) replace the same with like equipment in good repair, or
(b) pay Lessor in cash all of the following: (i) all amounts then owed by Lessee to Lessor under this
Lease, and (ii) an amount equal to that portion of the total acquisition cost of the item of Equipment paid for by
Lessor plus any applicable premiums, non-asset Certificate funded amounts and costs incurred by Lessor in
reviewing such non-replacement less the principal component of the Lease Payments made for such item of
Equipment as determined by Lessor prior to payment of such portion of the Prepayment Purchase Price (in Exhibit
C) by Lessee (the "Proportionate Purchase Price"). Upon Lessor's receipt of such payment, Lessee shall be
entitled to whatever interest Lessor may have in said item in its then condition and location, without warranty
expressed or implied; and in the event of payment of such Proportionate Purchase Price, the portion of Lease
Payments relating to the destroyed or condemned item, in the amount determined by Lessor, shall be abated.
The risk of loss and damage that the Lessee agrees to assunte under this Section shall be insured against
under Article vn below respecting insurance. From Lessee's insurance proceeds (or other fundS if Lessee
breaches its obligation to insure), the Lessee is obligated to repair the Equipment, or if repair is not possible, to
either replace the Equipment or pay the Lessor the value of the portion of Equipment not replaced pursuant to the
procedure for the Proportionate Purchase Price set forth above.
When the Proportionate Purchase Price is paid to Lessor, the portion of the Lease Payment equivalent to
the lost or destroyed Equipment, for which the Proportionate Purchase Price is paid to Lessor, the portion of the
Lease Payment equivalent to the lost or destroyed Equipment, for which the Proportionate Purchase Price was
paid, shall be abated.
ARTICLE VII
INSURANCE
Lessee shall, during the term of this Lease, insure all Equipment under this Lease against casualty
occurrences, including the perils of tire, lightning, windstorm, hail, explosion, aircraft, vehicles, smoke, riot, civil
commotion, strikes, locked-out workmen or theft, burglary and water damage in an amount equal to the higher of
total unpaid balance of the acquisition cost at the time (plus any unpaid charges and expenses) or the cost of
replacement of all Equipment and shall insure public liability and property damage insurance sufficient to protect
Lessor from liability in all events. Insurance shall be maintained by self-insurance or with standatd insurers and
the Lessee shall give the Lessor thirty days notice of cancellation or non-renewal.
All payments for physical damage to Equipment shall be payable to the Lessor or other assignee as
additional insured as their interest may appear under the terms and conditions of the Lease. Upon acceptance of
the Equipment and upon each insurance renewal date, Lessee shall deliver to Lessor or its assignee a duly
authenticated Certificate evidencing such insurance. In the event of any loss, damage, injury or accident
involving the Equipment, Lessee shall promptly provide Lessor with written notice thereof and make available to
Lessor all information and documentation relating thereto.
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ARTICLE vm
LIENS AND TAXES
Lessee shall keep the Equipment free and clear of all levies and encumbrances. Lessee shal1 pay, when
due, all charges and taxes (local, state and federal) including, but not limited to sales, use, excise and property
taxes and penalties and interest advanced upon behalf of the Lessee which may now or thereafter be imposed upon
the ownership, leasing, rental, sale, purchase, possession or use of the Equipment, excluding, however. all taxes
on or measured by Lessor's net taxable income. If Lessee fails to pay said charges and taxes when due, Lessor
shal1 have the right, but shal1 not be obligated, to pay said charges and taxes. In the event the Lessor has paid
such charges or taxes, Lessee shal1 pay immediately Lessor the amount advanced upon behalf of the Lessee.
ARTICLE IX
INDEMNIFICATION
To the extent pennitted by law, Lessee shall indemnify Lessor againSt and hold Lessor harmless from any
and all claims, actions, proceedings. expenses, damages, liabilities, costs or similar charges of whatever nature.
including attorney's fees. arising out of or connection with the Equipment, including, without limitation, its
manufacture, selection, purchase, delivery, possession. use. operation or return and the recovery of claims under
insurance policies thereon.
To the extent peonitted by law. Lessee shall indemnify Lessor and hold Lessor harmless against any and
all claims. actions, proceedings, expenses. liabilities. damages. costs or similar charges of whatever nature.
including attorneys' fees. in connection with any property or sales taxes which may be assessed against the
Equipment or the transaction contemplated by this Lease.
Lessee represents, warrants and covenants that throughout the teon of this Lease it will not take or pennit
any of its officers, employees or agents to take any action which would cause the tax-exempt nature of the
obligations evidenced by this Lease to be contested. challenged or denied by applicable governmental authorities.
In the event any such action by Lessee results in the denial or revocation of the tax-exempt status of such
obligations. Lessee shal1 be responsible for all taxes. penalties, and interest arising in connection therewith to
Lessor or any assignee.
ARTICLE X
ASSIGNMENT AND SUBLEASING
Section 10.1. Assil!JUl\ent bv Le..sor. This Lease, and the obligations of Lessee to make payments
hereunder, may be assigned and reassigned in whole or in part to one or more assignees or subassignees
(INCLUDING HOLDERS OF CERTIFICATE OF PARTICIPATION, PAYING AGENTS OR
TRUSTEES) by Lessor at any time subsequent to this execution, without the necessity of obtaining the consent of
Lessee; provided, however. that no such assignment or reassignment shal1 be effective unless and until Lessee
shall have received notice of the assignment or reassignment diSClosing the name and address of the assignee or
subassignee. Upon receipt of notice of assignment, Lessee agrees to reflect in a book entry the assignee
designated in such notice of assignment, and to make all payments to the assignee designated in the notice of
assignment, notwithstanding any claim. defense. set-off or counterclaim whatsoever (whether arising from a
breach of this Agreement or otherwise) that Lessee may from time to time have against Lessor, or the assignee.
Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing
statements which may be reasonably requested by Lessor or its assignee to protect their interests in the Equipment
and in this Agreement. Upon assignment by the Lessor, Lessee shall make payments only to assignee or a
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designated agent of assignee. Lessee expressly acknowledges and consents to the issuance by the Lessor of
Certificate of Participation in this Lease or any amendments hereto through a private offering arranged by
the Lessor.
LESSOR HAS DETERMINED THAT IT SHALL DECLARE ITSELF AGENT ON BEHALF OF
REGISTERED OWNERS OF CERTIFICATE OF PARTICIPATION to be issued pursuant to a Paying Agent
Agreement between Lessor and Commercial Bank of San Francisco, as paying agent or any successor paying
agent. Pursuant to the Paying Agent Agreement, Lessor has agreed to maintain a register containing the names
and addresses of such registered owners. Lessor hereby agrees that upon execution and delivery of the Paying
Agent Agreement it will provide a confinnation of same to Lessee.
Section 10.2. Nn Sale. A..ilmment or SlIblea.in.. bv I_.ee. TIDS LEASE AND THE INTEREST
OF LESSEE IN THE EQUIPMENT MAY NOT BE SOLD, ASSIGNED, SUBLEASED OR
ENCUMBERED BY LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR. SUCH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD BY LESSOR AND SHALL BE SUBJECT
TO ASSUMPTION BY THE NEW ASSIGNEE OR SUBLESSEE OF LESSEE OF ALL TERMS OF THIS
LEASE, AND COMPLIANCE WITH THE TERMS THEREOF. ANY SUBLEASE SHALL BE
SUBORDINATE TO THIS LEASE AND SHALL NOT AFFECT ANY OBLIGATIONS OF LESSEE
HEREUNDER, AND LESSEE SHALL EXECUTE AND FILE SUCH EVIDENCES OF ASSIGNMENT AS
REASONABLY REQUESTED BY LESSOR.
ARTICLE XI
OPTION TO PURCHASE
Lessee shall have the option to purchase all the Equipment on a specific Exhibit or Schedule of
Equipment commencing on the first anniversary Lease Payment Date for such Exhibit or Schedule and on each
succeeding annual anniversary of such Lease Payment Date thereafter at the written request of the Lessee,
delivered to the corporate offices of the Lessor ninety (90) days prior the Lease Payment Date on which Lessee
intends to exercise its purchase option, at a price equal to the Prepayment Purchase Option Price set forth in
Exhibit C. The Prepayment Purchase Option Price set forth in Exhibit C assumes the Lease Payment due on the
same date has been paid. Upon payment of the Prepayment Purchase Option Price set forth in Exhibit C and any
Lease Payments due, and upon satisfaction of Lessor that Lessee is not on such date in default pursuant to any
term of this Lease, Lessor shall deliver to Lessee a full release of Lessor's right, title or interest of Lessor in and to
the Equipment.
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Event. of Default. An event of default ("Event of Default") under the Lease means the
occurrence of anyone or more the following events:
(a) Lessee fails to make any Lease Payment (or any other payment) as it becomes due in accordance with
the terms of this Lease, and any such failure continues for ten (10) days after the due date thereof;
(b) Lessee fails to perform or observe any other covenant, contlition, or agreement to be performed or
observed by it hereunder or under the Lease and such failure is not cured within thirty (30) days after written
notice by Lessor;
(c) The discovery by Lessor that any material statement, representation or warranty made by Lessee in
the Lease or in writing ever delivered by Lessee pursuant to or in connection with the Lease is false, misleading,
or erroneous in any material respect; or
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(d) Lessee becomes insolvent or admits in writing its inability 10 pay its debts as they mature or applies
for, consents 10, or acquiesces in the appoinbnent of a trustee, receiver or custodian for the Lessee or a substantial
part of its Equipment; or in the absence of such application, consent or acquiescence, a trustee, receiver or
custodian is appointed for Lessee or a substantial part of its Equipment and is not discharged within thirty (30)
days; or any bankruplCy, reorganization. debt arrangement, momtorium, or any proceeding under any bankruplCy
or insolvency law. or any dissolution or liquidation proceedings, is instituted by or against Lessee and, if instituted
against Lessee, is consented to or acquiesced in by Lessee or is not dismissed within thirty (30) days.
Section 12.2. Remedies. Upon the occurrence of an Event of Default under Section 12.1 of the Lease and
as long as such Event of Default is continuing, Lessor may, at its option, exercise any one or more of the
following remedies:
(a) By written notice 10 Lessee, declare all amounts becoming due and payable under the Lease and
during Lessee's current FISCal Period 10 be inunediately due and payable or declare all remaining Lease Payments
due during the Lease tenn 10 be inunediately due and payable 10 the extent permitted by State law, or due and
payable as liquidated damages, whereupon the same shall become inunediately due and payable;
(b) By written notice 10 Lessee, request Lessee 10, and Lessee agrees that it will, promptly surrender
possession of the Equipment to Lessor and permit Lessor or any party desigiuUed by Lessor quiet enjoyment and
use of the Equipment;
(c) By written notice 10 Lessee, request Lessee to, and Lessee agrees that it will, pack the Equipment and
ship it, freight prepaid and insured to any location in the continental United States designated by Lessor or its
assignee;
(d) Enter Lessee's property and take inunediate possession of and remove the Equipment;
(e) Sell or lease the Equipment for the account of Lessee or sublease the Equipment for the account of
Lessee, holding Lessee liable for all Lease Payments and other payments due to the effective date of such selling,
leasing, or subleasing and for the difference between the purchase price, rental and other amounts paid by the
purchaser, Lessee or subLessee pursuant to such sale, lease or sublease and the amounts payable by Lessee
hereunder for the remaining Lease Term; or
(f) Exercise any other right, remedy or privilege which may be available 10 it under applicable laws of the
State of California or any other applicable law, or proceed by appropriate court action 10 enforce the terms of the
Lease or to recover damages for the breach of the Lease, or to rescind the Lease as 10 any or all of the Equipment.
ARTICLE xm
TAX COVENANTS AND EXPECTATIONS
Section 13.1. Tax Covenants. Lessee covenants that it will not take or permit any of its officers,
employees or agents 10 take any action with respect 10 the Lease or the Equipment as described in an Exhibit B
(including allowing such equipment 10 be used in any private use), which would cause the Lease 10 be classified
as a "private activity bond" or an "arbitrage bond" or "federally guaranteed" within the meanings of Sections 141,
148 and 149 respectively of the Internal Revenue Code of 1986, as amended or superseded (the "Code"), and any
regulations from time 10 time adopted thereunder or which would cause the interest portion of the Lease Payments
to become includible in gross income under the Code, and the Lessee covenants that it will take all actions
necessary to maintain such exclusion from gross income under the Code. In addition, the Lessee hereby
represents that it is a public body corporate and politic and that all of the net proceeds of the Lease are to be used
for local governmental activities of the Lessee. The Lessee further covenants that it will comply with the
information reporting requirements of Section 149(e) of the Code, including filing of Form 8038-G or 8038-GC
with respect to the Lease.
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Section 13.2. Exnecmtions. Lessee represents, warrants and covenants as follows with regard 10 the
Lease, 10 its best infonnation, knowledge and belief:
(a) Lessee has entered into a contract 10 lease with option 10 purchase the Equipment. The acquisition of
the Equipment will proceed with due diligence and all proceeds received from the Lessor will be spent within six
months of the date of this Lease.
(b) No lease payment account has been or will be established with respect 10 the Lease. Lease Payments
will be paid directly 10 the Lessor or its Assignee.
(c) No escrow fund, reserve fund or similar fund has been or will be established by Lessee with respect 10
the Lease.
(d) Lessee has not established and does not expect to establish any sinking fund from which Lease
Payments under the Lease will be paid or any fund for which there is reasonable assurance that amounts therein
will be avai1able 10 pay such Lease Payments if Lessee encounters financial difficulties.
(e) Lessee has neither received notice that its certification may not be relied upon with respect 10 its
obligations, nor been advised that any adverse action by the Commissioner of Internal Revenue is contemplated
with respect thereto.
ARTICLE XIV
DELIVERY OF RELATED DOCUMENTS
Lessee will execute or provide, as required by Lessor, the following documents and information
satisfaclOry 10 Lessor:
(a) Documents evidencing acceptance and delivery;
(b) Essential Use Letter regarding Equipment;
(c) Uniform Commercial Code financing statements;
(d) Certificate of insurance or Certificate that the Lessee is self insured under its funded self insurance
program, as is acceptable to Lessor;
(e) Invoicing instructions;
(f) Current financial statements and copies of budget showing appropriations (as available);
(g) Certificate of incumbency;
(h) Resolution of Lessee approving this Lease;
(i) Acknowledgement and Consent to Assignment and/or appointment of the Paying Agent; and
(j) Other documents as reasonably requested by Lessor.
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ARTICLE XV
MISCELLANEOUS
Section 15.1. Notices. Except where another fonn of notice is specifically authorized in a section of this
Lease. all notices to be given under this Lease to Lessee shall be made in writing and mailed by certified mail.
return receipt requested to: CITY OF SAN BERNADINO, Economic Development Agency, 201 North E Street,
Thrid Floor. San Bernadino, CA 92401-1507. 909/384-5081. fax: 9091888-94 3. or at such address as the party
may provide in writing from time to time. Notices to Lessor shall be addressed to it at Lessor's address at
Transocean Funding. Inc.. 111 Anza Blvd.. Suite 107. Burlingame, CA 94010. 4151342-2266. Fax: 4151342-9719.
or at such other address as Lessor or Lessor's assignee may provide in writing from time to time. Any such notice
shall be deemed to have been received five (5) days subsequent to mailing.
Section 15.2. Section Headin2s. All section headings contained herein are for convenience of reference
only and are not intended to define or limit the scope of any provisions of this Lease.
Section 15.3. Govemin2 Law. This lease shall be governed by. and construed in accordance with. the
laws of the Slate of California.
Section 15.4. Inventorv: Re2istration. Lessee shall maintain a detailed inventory of each item of
Equipment, which inventory shall identify the item as being leased from Lessor pursuant to this Lease.
SECTION 15.5. AMRNTlMRNTS: MODlFJCA TTONS: I,RSSRR W A IVF.RS. ALL AMENDMENTS
OR MODIFICATIONS OF THE TERMS OF THE LEASE MUST BE AGREED TO IN WRITING 1N
ADVANCE BY LESSEE AND LESSOR OR ITS ASSIGNEE; PROVIDED, HOWEVER, THAT NO
AMENDMENTS OF THIS LEASE SHALL OPERATE TO REDUCE OR DELAY ANY LEASE
PAYMENTS TO BE MADE HEREUNDER WITHOUT CONSENT OF LESSOR AND ITS ASSIGNEE, IF
ANY, AT THE TIME OF AMENDMENT. THE PARTIES DO NOT INTEND THAT ARTICLE 2A TO
THE UNIFORM COMMERCIAL CODE APPLY TO THIS LEASE; PROVIDED THAT IF ARTICLE 2A
APPLIES AND TO THE EXTENT PERMITTED BY LAW, LESSEE WAIVES ALL RIGHTS AND
REMEDIES CONFERRED BY SECTIONS 2A-508 THROUGH 2A-522 OF ARTICLE 2A OF THE
UNIFORM COMMERCIAL CODE (CODIFIED AS COMMERCIAL CODE SECTIONS 10508
THROUGH 105221N CALIFORNIA).
Lessee's initials:
Section 15.6. Entire A=ent. Waiver. This Lease and the other attachments. documents or
instruments executed by Lessee and Lessor in connection herewith, including any applicable Exhibits A through H
(incorpornted by reference herein). constitute the entire agreement between the parties with respect to the
Equipment. There is no understanding or agreement, oral or written, which is not set forth herein. The waiver by
Lessor of any breach by Lessee of any tenn. covenant or condition hereof shall not operate as a waiver of any
subsequent breach thereof.
Section 15.7. Execution in Countemarts. This Lease may be executed in any number of counterparts.
each of which shall be an original and all of which shall constitute but one and the same instrument.
Section 15.8. Severabilitv Clause. In the event of a dispute. controversy or litigation arising under this
Agreement. the prevailing party shall be entitled to reasonable attorneys' fees. In the event any provision, phrase
or tenn of this Agreement shall be deemed unenforceable. such unenforceability shall not affect any of the other
tenns hereof and this Agreement shall be construed thereafter as including all provisions hereof except the
provision or tenn held unenforceable.
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Section 15.9. Soecial Resolution. Lessor and Lessee agree that the Resolution of Lessee identified on
Exhibit H hereto is incorporated by reference herein as if fully set forth and shall apply to this Lease and to
Lessor.
IN WITNESS WHEREOF. the Lessor has caused this Lease to be executed in its name by its duly
authorized officers. and the Lessee has caused this Lease to be executed in its name by its duly authorized
officers. as of the date set forth below.
TRANSOCEAN FUNDING, INC.,
as Lessor/Issuer
B~~""--
thomed 0 lcer
CITY OF SAN BERNADINO, ECONOMIC
DEVELOPMENT AGENCY,
as Lessee
By:
Authorized Officer
Attest:
By:
Secretary
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EXHIDIT A
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST IS, 1994
The followiog list of Exhibits are made a part of this Lease.
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Schedole of Eqoipment
Amortizatioo Schedole
Certificate of Acceptance
Opinioo of Lessee's Cooosel
Certificate of Esseotial Use
Proof of Iosoraoce
Resolutioo
UCCl
Form 8038G
Invoice I Veodors
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EXHmlT B
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASfER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST 15,1994
SCHEDm ,E OF E01JWMENT
The Equipment which is the subject of the attached MASTER LEASE I PURCHASE AGREEMENT is
as follows:
DeSCriDtiOn:
Wang Laboratories Computer Equipment. including:
(I) WllS-ENV-P-7 WllS Environment
(I) PACERUN/P-G Pace Run Time
(I) 50V67U 32 Port Serial
(I) 50V-APA24-6U 24 Port Add-on
(I) SU-60V-16U 5460-16 Memory
(I) 50V68E Port Cache
(I) 50V24 Image Trans. ConL
(I) SCSI-KIT-DIFF-I SCSI Sin. Adaptor
(I) WllS-ITC-04 SCSI Sin. Ended(JB)
(2) SC31 00 Scanners with Cont
(2) SC3100cTI.I-VS Controller
(I) 2278V-n OD JUKE w2/470
(6) W3-VS-IMGWS-E Image Workstation SW
(6) DTI33-210-8 48613318121ODOS/WIN/MOS
(6) MON-I64I-N FullPageMouitor
(6) ASI-WLOC-PKG WLOC/WINLOC SW
Located at:
CITY OF SAN BERNADINO. ECONOMIC DEVELOPMENT AGENCY
201 North E Street. Third Floor
San Bernadino, CA 92401-1507
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EXHmlT C
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST IS, 1994
SC-HEDlILE OF I.EASE PAYMENTS
This Exhibit applies to Equipment set forth on Exhibit B.
Maturity
Pavment Date
Payment
Amon'lt
Maturing
Prineinal
'nte~t
$
$
· Assumes payment on this date has been made.
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Prepayment
Pnreha~ Option.
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EXHmIT D
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST IS, 1994
CF.RTDnCATF.OFACCF.PTANCF.
I, the undersigned, hereby certify that I am the duly qualified and acting
of the CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY ("Lessee"); and. with respect
to the MASTER LEASWPURCHASE AGREEMENT dated as of AUGUST IS, 1994 (the "Lease"), by and
between Lessee and Transocean Funding, Inc. (the "Lessor"), certify that:
1. The equipment described in the Lease on Exhibit B (the "Equipment") has been delivered and
installed in accordance with Lessee's specifications (as that term in defmed in the Lease) and has been accepted by
Lessee.
2. Lessee has apptopriated necessary monies sufficient to pay all Lease Payments required to be paid
under the Lease during the current fISCal year of Lessee, and such monies will be applied in payment of all Lease
Payments due and payable during such current fISCal year. Lessee will budget for, request, appropriate, provide
and otherwise obtain and make available sufficient monies to pay all Lease Payments required to be paid under
the Lease during the Lease Term (as that phrase is defmed in the Lease), and such monies will be applied in
payment of such Lease Payments.
3. Lessee is exempt from all personal property taxes, and is subject to sales and/or use taxes with respect
to the Equipment and the Lease Payments.
4. During the Lease Term, the Equipment will be used by Lessee to perform only the essential
governmental functions specified in the Lease.
5. The Lease Payments on a lease to purchase basis (with a nominal buyout) for the Equipment under
the Lease and during the Lease Term do not exceed the fair rental value for the lease/purchase of the Equipment
by the Lease.
Dated: September I, 1994
LESSEE: CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
By:
Authorized Officer
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EXHmIT E
OPINION OF COUNSEL
ON COUNSEL'S LE'ITERHEAD
August IS, 1994
Lessee: CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
201 North E Street, Third Floor
San Bernadino, CA 92401-1507
Lessor: TRANSOCEAN FUNDING, INC.
III Anza Blvd., Suite 107
Burlingame, CA 94010
RE: MASTER lEASFJPURCHASE AGREEMENT dated as AUGUST IS, 1994, by and between
Transocean Funding, Inc. ("Lessor") and CITY OF SAN BERNADINO, ECONOMIC
DEVELOPMENT AGENCY ("Lessee")
Ladies and Gentlemen:
1 have acted as counsel to the Lessee with respect to the MASTER LEASFJPURCHASE
AGREEMENT described above (the "Lease") and various related matters, and in this capacity have reviewed a
duplicate original or certified copy of the Lease and the Exhibits attached thereto. Based upon the examination of
these and such other docwnents as 1 deem relevant, it is my opinion that:
1. Lessee is a municipal cOIpOration and political subdivision of the State of California (the "State"),
duly organized, existing and operating under the constitution and laws of the State. The Lessee is organized under
and pursuant to the Govenunent Code of California (Sections et seq.).
2. Lessee is authorized and has the power under State law to enter into the Lease, and to carry out its
obligations thereunder and the transactions contemplated thereby.
3. The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee,
and is a valid and binding contract of Lessee enforceable in accordance with its terms, except to the extent limited
by State and Federal laws affecting remedies and baulauptcy, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights.
4. The authorization, approval and execution of the Lease and all other proceedings of Lessee relating
to the transaction contemplated thereby have been performed in accordance with all open meeting, public bidding
and other laws, rules and regulations applicable to the Lessee.
5. The execution of the Lease and the appropriation of monies to pay the Lease Payments coming due
thereunder, do not result in the violation of any constitution, statutory or other limitation relating to the manner,
form or amount of indebtedness which may be incurred by Lessee.
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6. There is no litigation, action, suit or proceeding pending ~r before any court, administrative agency,
arbilnllor or govenunental body, that chalJenges the organization or existence of Lessee; the authority of its
officers, the proper authorization, approval and/or execution of the Lease, the Exhibits and other documents
contemplated thereby; the appropriation of monies, or any other action taken by Lessee to provide monies
sufficient, to make Lease Payments Wider the Lease; the performance by Lessee of all its obligations Wider the
Lease; the enforceability and enforcement of the Lease against the Lessee; or the ability of Lessee otherwise to
perform its obligations Wider the Lease and the lransactions contemplated thereby.
Very truly yours,
City Attorney
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EXHIBIT F
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST 15, 1994
CERTIFICATE OF ESSENTIAL USE
The undersigned, as , of CITY OF SAN
BERNADINO, ECONOMIC DEVELOPMENT AGENCY (the "Lessee"), hereby certifies that the Equipment
described in Exhibit B to MASTER LEASElPURCHASE AGREEMENT dated as of AUGUST IS, 1994, with
Transocean Funding, lnc. (the "Lease") is essential to the functions of the Lessee or to the services the Lessee
provides.
Further, the Lessee bas an inunediate need for, and expects to make inunediate use of, all such
Equipment. the need for which is not temporary or expected to diminish in the foreseeable future. Such
Equipment will be used by the Lessee only for the pwpose of performing one or more governmental or proprietary
functions consistent with the permissible scope of authority. Specifically, such Equipment was selected by the
Lessee to be used for the following governmental pUlposes:
I. Data Processing
2. Office and Administrative Services
3.
4.
This Exhibit relates to Exhibit B to the Lease.
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY,
as Lessee
By:
Authorized Officer
Date: AUGUST IS, 1994
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EXHIBIT G
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASE I PURCHASE AGREEMENT
DATED AS OF
AUGUST 15, 1994
PROOF OF INSURANCE COVERAGE REOUIRP.MRNTI:
1. In accordance with Article VI of the MASTER LEASElPURCHASE AGREEMENT between the
undersigned as Lessee and Traosocean Funding,loc. as Lessor ("Lease"), we have instructed the insurance agent
named below (please f1l1 in name, address and telephone nwnber).
to issue:
(a) All Risk Physical Damage Insurance on the Equipment as defined in the Lease, evidenced by a
Certificate of Insurance and Long Form Loss Payable Clause naming Lessor and/or its assigns as an Additional
Insured.
(b) Public Liability Insurance evidenced by a Certificate of Insurance naming Lessor and/or its assigns as
an Additional Insured.
OR
2. Pursuant to Article VI of the Lease we are self-insured for all risk, physical damage, and public
liability and will provide proof of such self-insurance in letter form together with a copy of the stawte authorizing
this form of insurance.
Proof of insurance coverage will be provided to you prior to the time that the Equipment is delivered and
accepted. TIlls pertains to Equipment set forth on Exhibit B to the Lease.
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
By:
Authorized Officer
Date: AUGUST 15, 1994
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EXHIBIT H
CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY
MASTER LEASFJPURCHASE AGREEMENT
DATED AS OF
AUGUST 15, 1994
RESOLUTION TO BE SUPPLIED
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INCUMBENCY CERTIFICATE
(in lieu of Resolution)
I, , do hereby =tify that I am the duly elected or appointed and acting Secretary
of the CITY OF SAN BERNADINO, ECONOMIC DEVELOPMENT AGENCY, that I have custody of the
records of such entity, and that, as of the date hereof, the individual named below is the duly elected or appointed
officer of such entity holding the office set forth opposite his or her name. I further certify that (i) the signature
set opposite his name and tide is his or her true and authentic signature and (ii) such officer has the authority on
behalf of such entity to enter into that certain Master LeaseJPurchase Agreement dated as of AUGUST 15, 1994,
between such entity and Transocean Funding, Inc. ("Lessor") and (ill) the authority is provided by a resolution of
the Board of the Lessee or an intemal policy of the Lessee.
PRINTED ~
I.ITI..B
SIGNATURE
IN WITNESS WHEREOF, I have duly executed this Certificate as of the fteSt day of September, 1994.
Authorized Signature
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