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HomeMy WebLinkAbout39-Public Services ORIGINAL CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Ken Fischer, Director Subject: Resolution authorizing the execution of an agreement and issuance of a purchase order to Fairview Ford of San Bernardino pursuant to Section 3.04.010 B- 3 of the Municipal Code for the purchase of twenty-eight (28) 2009 Ford Crown Victoria Police Interceptors utilized by the Police Department; and authorizing the Finance Director or her designee to solicit lease- purchase rate quotes and award a lease- purchase to the lowest responsible leasing company. Dept: Public Services Date: March 16, 2009 Meeting Date: April 20, 2009 Synopsis of Previous Council Action Motion approved January 9, 2006 Reso 2006-80 March 20, 2006 Reso 2007-80 March 5, 2007 Reso 2008-102 April 7, 2008 Five additional PD vehicles FY06/07 Purchase 23 PD Interceptors Purchase of 42 PD interceptors Purchase of 27 PD interceptors Recommended Motion: Adopt Resolution ~~~ Signature Contact person: Don Johnson, Fleet Manager Phone: 5220 Supporting data attached: Staff Report, Specifications, Agreement, Resolution Ward: All FUNDING REQUIREMENTS: Amount: $753,875.36 Plus lease costs; Lease payments to be budgeted over a three (3) year period Source: 635-341-5803 Lease Payments FY 2009/2010, FY 2010/2011, FY 2011/2012 Council Notes: Finance: ~o 2cJO?- ?? Agenda Item No. ~ LI"u) -fJ, CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report SUBJECT: Resolution authorizing the execution of an agreement and issuance of a purchase order to Fairview Ford of San Bernardino pursuant to Section 3.04.010 B.3. of the Municipal Code for the purchase of twenty-eight (28) Year 2009 Ford Crown Victoria Police Interceptors utilized by the Police Department; and authorizing the Finance Director or her designee to solicit lease-purchase rate quotes and award a lease-purchase to the lowest responsible leasing company. BACKGROUND: The Mayor and Common Council approved Resolution 2008-102 on April 7, 2008 authorizing the purchase of twenty-seven (27) 2008 Crown Victoria Police Interceptors from Fairview Ford. Fleet staff has completed the patrol vehicle replacement model for 2009. Based on current usage and mileage Fleet is recommending the purchase of thirty-eight (38) Year 2009 Ford Crown Victoria Police Interceptors as replacements for the high mileage units that will be removed from service beginning in FY 2009/2010. This replacement number was reduced by ten vehicles as part of the Police Department budget savings plan; therefore this purchase will be for a total of twenty-eight (28) units. In February, 2009 staff requested a quotation from Fairview Ford for twenty-eight (28) Year 2009 model Crown Victoria Police Interceptors, and negotiated a base price of $24,693 plus tax for each vehicle ordered. Protech Ballistic panels for both front doors and installation are included in this quote as it is now offered as an option from Ford Motor Company. Total cost is $26,924.12 for each vehicle including tax. See attachment 1 : Base price as quoted by Fairview Ford Tax @ 9% Tire Fee Total price $24,693.00 each vehicle $ 2,222.37 each vehicle $ 8.75 each vehicle $26,924.12 each vehicle Ford Motor Company is the only manufacturer of the Crown Victoria Police Interceptor model, which has been the specified standard for the Police Department for over ten years. Fairview Ford of San Bernardino is the sole local Ford dealer. The following illustrates the record of purchases of Crown Victoria Police Interceptors for the last four years (excluding tax). Year 2005 2006 2007 2008 Quantitv 19 23 42 27 Vendor Fairview Ford, San Bernardino Fairview Ford, San Bernardino Fairview Ford, San Bernardino Fairview Ford, San Bernardino $ Per Unit $24,580.00 $24,580.00 $24,732.00 $25,591.00 For comparison as always Fleet staff has reviewed the State contract awarded this year through the Department of General Services; it is the statewide contract that is bid from all dealerships. The two configurations from the State contract that have similar specifications to the City's are priced as follows, $27,388.00 and $27,842.00 including tax. Fairview Ford's price for the units is $26,924.12 including tax, Fairview's base price this year is also $898.00 less than last year. In the opinion of the Fleet Manager the price quoted by Fairview Ford, which was the lowest quote last year is a competitive price. Staff is therefore recommending approval of a purchase order to Fairview Ford in the amount of $26,924.12 per unit for twenty-eight (28) vehicles amounting to a total cost of $753,875.36 plus lease costs pursuant to Municipal Code Chapter 3.04.010 Section B.3. Exemptions: #3. Purchases approved by the Mayor and Common Council. FINANCIAL IMPACT: Funds for the lease payment of twenty-eight (28) replacement vehicles will be budgeted in the Police Department budget as an internal service charge for Fleet. In turn, Fleet Services will budget and pay the actual lease payments for these vehicles. These twenty-eight (28) Year 2009 Ford Police vehicles have an estimated delivery date of July or August 2009. The lease payments will be structured so they will not begin until after the vehicles are delivered. RECOMMENDATION: Adopt Resolution 2 '(-0 , C I T Y 0 F SAN BE R N A R DIN 0 RECEIVED-CITY eLf:RV INTEROFFICE MEMORANDUM 2009 APR 20 PH 12: 53 FINANCE DEPARTMENT DATE: Rachel Clark, City Clerk ill, II i'v Barbara Pachon, Director of Finance ~l...~ April 20, 2009 TO: FROM: SUBJECT: Agenda Items 35 & 39 COPIES: Mark Weinberg, Interim City Manager John Wilson, Sr. Assistant City Attorney After review of contract documents related to the lease-purchase financing of refuse trucks and patrol cars by the City Attorney's Office, it has been determined that the following changes should be read into the record at the time of consideration of the following items on the Council Agenda for April 20'h, 2009. The motion to adopt should be that adoption is subject to the changes announced: Item #35. Resolution A (master lease aereement with B of A): this resolution is deleted. Item #35. Resolution B (financine of 12 refuse trucks): On page 3 of the Lease/Purchase Agreement is the definition of "Schedule" It should read: "Means each separately numbered Schedule of Property substantially in the form of Schedule of Property No.1 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit A-I hereto. Item #39. Resolution (financine of28 Crown Victorias for Police Dent.): On page 3 of the Lease/Purchase Agreement is the definition of "Schedule" It should read: "Means each separately numbered Schedule of Property substantially in the form of Schedule of Property No. :z hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit A-I hereto. Clark Ra From: Sent: To: Cc: Subject: Pachan Ba Manday-:- April 20, 2009 12:59 PM Sassaan_La; Wheeler_Ka Clark_Ra; Weinberg_Ma; McNeelLCh; Fischer_Ke RE: Agenda Item #35 and #39 Yes, at this point we just need these items to be approved to get the financing set up before the equipment arrives. Having a set master lease agreement in place would have simplified implementation of any future leases with Bank of America but we will deal with that down the road if we have that situation. We did hear back from John Wilson and he gave is Ok so I have distributed a memo to City Clerk, City Manager's Office and to John Wilson that I hope now puts us all on the same page so these two items can be approved. Thanks Barbara -----Original Message----- From: SassQon La Sent: Monday, April 20, 2009 12:48 PM To: Pachon Ba; Wheeler Ka Cc: Clark Ra; Weinberg-Ma; McNeely Ch; Fischer Ke Subject: Re: Agenda Item #35 and #39 Is this ok with u barbara? -----Original Message----- From: Pachon_Ba <Pachon Ba@sbclty.org> To: Wheeler_Ka <Wheeler_Ka@sbcity.org> CC: Clark Ra <Clark Ra@sbcity.org>; Weinberg Ma <Weinberg Ma@sbcity.org>; Sassoon Lo <Sassoon Lo@sbclty.org>; McNeely Ch <McNeely-Ch@sbcity.org>; Fischer Ke <Fischer_Ke@sbcity.org> - Sent: Mon Apr 20 12:06:26 2009 Subject: Agenda Item #35 and #39 There are going to be changes to the motions for items #35 and #39 which are the financing for the refuse trucks and the police vehicles. The City Attorney Office decided they do not want a Master Lease document approved so Motion A for item #35 will be tabled. Since we are not going to have a master lease we need to make a change to the wording on page 3 of the Lease/Purchase Agreement for the definition of "Schedule". We are currently waiting on approval from the City Attorney Office on the wording for the definition of "Schedule". Once we get this approved by the City Attorney Office (Bank of American has already approved this) we will send you all a memo with the wording change that has to be read into the motion on the floor by the City Clerk. Thanks Barbara 1 Clark Ra From: Sent: To: Cc: Subject: Pachon_Ba Monday, April 20, 2009 12:06 PM Wheeler Ka Clark_Ra; Weinberg_Ma; Sassoon_Lo; McNeely_Ch; Fischer_Ke Agenda Item #35 and #39 There are going to be changes to the motions for items #35 and #39 which are the financing for the refuse trucks and the police vehicles. The City Attorney Office decided they do not want a Master Lease document approved so Motion A for item #35 will be tabled. Since we are not going to have a master lease we need to make a change to the wording on page 3 of the Lease/Purchase Agreement for the definition of "Schedule". We are currently waiting on approval from the City Attorney Office on the wording for the definition of "Schedule". Once we get this approved by the City Attorney Office (Bank of American has already approved this) we will send you all a memo with the wording change that has to be read into the motion on the floor by the City Clerk. Thanks Barbara 1 Exhibit "B" MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT This Master Equipment Lease/Purchase Agreement (the "Agreement") dated as of APril 30, 2009, and entered into between Bank of America, National Association, a national banki1\g association ("Lessor "), and City of San Bernardino, a body corporate and politic existing und1r the laws of the State of California ("Lessee "). ' WITNESSETH: WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule prevail; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein; and WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement and the Schedules hereto for the purposes set forth herein; NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Acquisition Amount" means the amount specified in each Lease and represented by Lessee to be sufficient to acquire the Equipment listed in such Lease. "Acquisition Fund" means, with respect to any Lease, the fund established and held by the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any. "Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund and Account Control Agreement, substantially in the form of Exhibit A attached hereto, in form and substance acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and administered. "Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any Acquisition Fund Agreement, and its successors and assigns. #765674vl (BAPCCICA Abatement Lease Template) ICA Abatement] "Acquisition Period" means, with respect to each Lease, that period stated in the Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be expended on Equipment Costs. "Agreement" means this Master Equipment LeaselPurchase Agreement, including the exhibits hereto, together with any amendments and modifications to the Agreement pursuant to Section 13.05. "Code" means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder. "Commencement Date" means, for each Lease, the date when Lessee's obligation to pay rent commences under such Lease, which date shall be the earlier of (i) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, and (ii) the date on which sufficient moneys to purchase the Equipment listed in such Lease are deposited for that purpose with an Acquisition Fund Custodian. "Contract Rate" means the rate identified as such in the applicable Schedule. "Equipment" means the property listed in each of the Leases and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. "Equipment Costs" means the total cost of the Equipment listed in each Lease, including soft costs such as freight, installation and taxes paid up front by Lessor and all capitalizable consulting and training fees approved by Lessor, legal fees, financing costs, and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set froth in each Lease, and otherwise incurred in connection with the financing provided by the lease-purchase of the Equipment as provided in each Lease; provided that (i) any such soft costs on a cumulative basis shall not exceed a percentage of the Maximum Equipment Cost approved by Lessor and (ii) in no event shall capitalizabJe delivery charges, installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor's prior consent "Event of Default " means an Event of Default described in Section 12.01. "Lease" means a Schedule and the terms of this Agreement which are incorporated by reference into such Schedule. Each Schedule shall constitute a separate and independent Lease. "Lease Proceeds" means, with respect to each Lease, the total amount of money to be paid by Lessor to Vendor. "Lease Term" for each Lease means the Original Term and all Renewal Terms therein provided and for this Agreement means the period from the date hereof until this Agreement is terminated.. #765674vl (BAPCC/CA Abatement Lease Template) 2 "Lessee" means the entity referred to as Lessee in the first paragraph of this Agreement. "Lessor" meanS (a) the entity referred to as Lessor in the first paragraph of this Agreement or (b) any assignee or transferee of any right, title or interest of Lessor in and to the Equipment under a Lease or any Lease (including Rental Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform under a Lease. "Material Adverse Change" means (prior to the Utilization Period Expiration, a downgrade in Lessee's external debt rating of two or more sub grades by either Moody's Investors Service, Inc., or Standard & Poor's Ratings Group or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee's credit rating to be below investment grade, and (be) thereafter, any change in Lessee's creditworthiness that could have a material adverse effect on (i) the financial condition or operation of Lessee [and its subsidiaries taken as a whole], or (ii) Lessee's ability to perform its obligations under this Agreement or any Lease. "Maximum Equipment Cost" meanS the cumulative amount specified in the latest Schedule executed under this Agreement. "Original Term" meanS the period from the Commencement Date for each Lease until the end of the fiscal year of Lessee in effect at such Commencement Date. "Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease. "Renewal Terms" means the renewal terms of each Lease, each having a duration of one year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable thereto. "Rental Payments" means the basic rental payments payable by Lessee under each Lease pursuant to Section 4.01, in each case consisting of a principal component and an interest component. "Schedule" means each separately numbered Schedule of Property substantially in the form of Exhibit B-1 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit A-2 hereto. "State.. means the State of California. "Utilization Period.' means the date, with respect to each Lease not funded under an Acquisition Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the Equipment under such Lease as indicated in Section 3.04(b). "Vendor" means the manufacturer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer or supplier from whom Lessor arranged Lessee's acquisition and financing of the Equipment pursuant to the applicable Lease. #765674vl (BAPCC/CA Abatement Lease Template) 3 ARTICLE II Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows: (a) Lessee is a state or a political subdivision thereof within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and each Lease and the transactions contemplated hereby and to perform all of its obligations hereundcr and under each Lease. (b) Lessee has duly authorized the execution and delivery of this Agreement and each Lease by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and each Lease. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (e) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and each Lease and the acquisition by Lessee ofthe Equipment as provided in each Lease. (f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under each Lease. (g) Lessee has kept and throughout the Lease Term of any Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments to the financial statements) within 180 days of its fiscal end, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) its annual budget for the following fiscal year when approved but not later than 30 days prior to its current fiscal year end. The financial statements described in subsection (i) shall be accompanied by an unqualified opinion of Lessees's auditor. Credit information relating tot Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assign. (h) Lessee has an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the #765674vl (BAPCCICA Abatement Lease Template) 4 Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Lease Tenn to such item. (i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payment in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Equipment Cost for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (j) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee's financial condition or impairs its ability to perform its obligation hereunder. Lessee will, at its expense, maintain its legal existence in good standing and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect -Lessor's security interest in the Equipment and Lessor's rights and benefits under this Lease. ARTICLE III Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Tenn for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to continue the Lease Term of each Lease and to pay the Original Term and all Renewal Terms and to pay the Rental Payments thereunder. Lessee affirms that sufficient funds are available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, to #765674vt (BAPCC/CA Abatement Lease Template) 5 to have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request is not approved. Section 3.03. Abatement. During any period in which, by reason of material damage or destruction or taking under the power of eminent domain (or sale to any entity threatening the use of such power) or material title defect with respect to any Equipment, there is substantial interference with the use and possession by Lessee of such Equipment, the rent applicable to such Equipment shall be abated proportionately in whole or in part. Lessee shall immediately notify Lessor upon the occurrence of any event causing substantial interference with Lessee's use and possession of any Equipment, and such notice shall be provided prior to the abatement of any rent. The amount of abatement shall be such that the remaining rental obligation for cach rental period represents fair consideration for the use and possession of the portions of the Equipment that are not affected by such interference. Such abatement shall commence on the date that Lessee's use and possession of the affected Equipment is restricted because of such interference and end on the earlier of (i) the date on which the use and possession thereof are restored to Lessee, or (ii) the date on which Lessee either (x) replaces the affected Equipment or (y) uses the proceeds of insurance or condemnation award to pay the applicable Purchase Price therefor. Notwithstanding any such interference with Lessee's use and possession of a portion of the Equipment, this Lease shall continue in full force and effect with respect to any remaining Equipment. Lessee waives the benefits of Civil Code Sections 1932 and any and all other rights to terminate this Lease by virtue of any interference with the use and possession of any Equipment. Section 3.04. Conditions to Lessor's Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations puisuant to any Lease, Lessee shall deliver to Lessor the following: (i) A fully completed Schedule, executed by Lessee; (ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the Vendor upon execution of the Lease; (iii) A Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor; (iv) A certified copy of a resolution, ordinance or other official action of Lessee's governing body authorizing the execution and delivery of this Lease and perfonnance by Lessee of its obligations hereunder; (v) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor; (vi) Evidence of insurance as required by Section 7.02 hereof; #765674vl (BAPCC/CA Abatement Lease Template) 6 (vii) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02; (viii) A copy of a fully completed and executed Form 8038; (ix) If any Equipment units are motor vehicles, properly competed certificates of title for such vehicles; and (x) Such other items, if any, as are set forth in such Lease or are reasonably required by Lessor. (b) In addition, the performance by Lessor of any of its obligations pursuant to any Lease shall be subject to: (i) no material adverse change in the financial condition of Lessee since the date of this Lease, (ii) no Event of Default having occurred, and (iii) ifno Acquisition Fund has been established, the Equipment must be accepted by Lessee no later than date listed as the Utilization Period Expiration in the applicable Schedule. (c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing body, will reimburse Lessee for the prior payment of any such Acquisition Amounts by Lessee to the Vendor, upon receipt of the documents described in Sections 5.01(a) and (b); or if an Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor will deposit the Acquisition Amount for Equipment described in the Schedule with the Acquisition Fund Custodian. (d) This Agreement is not a cornmitment by Lessor to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into any proposed Lease shall be a decision solely within Lessor's discretion. (e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease. Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Lease. Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee. ARTICLE IV Section 4.01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the dates and in such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental Payment not paid on the date such payment is due at the rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less, from such date. Lessee shall not permit the federal government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest payments as more fully detailed on each Schedule, the interest on #765674vl (BAPCC/CA Abatement Lease Template) 7 Schedule, the interest on which begins to accrue as of the Commencement Date for each such Schedule. Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the Lease Term. Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee. Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, after it has been accepted by lessee, any defects, malfunctions, breakdowns or infirmities in the equipment or any accident, condemnation or unforeseen circumstances. Lessee's obligations to make Rental Payments or pay other amounts hereunder shall not be abated on account of obsolescence or failure of the Equipment to perform as desired. Section 4.05. Tax Covenant. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes. Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component shall be at a Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease. For purposes of this Section, "Event of Taxability" means a determination that the interest component is includible for federal income tax purposes in the gross income of the owner thereof due to Lessee's action or failure to take any action. Section 4.07. Mandatory Prepayment. If the Lease Proceeds are deposited into an Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition Period and not applied to Equipment Costs, shall be applied, in Lessor's discretion based upon the amount remaining in such Fund, on the next Rental Payment date to either: (i) all or a portion of #765674vl (BAPCClCA Abatement Lease Template) 8 of the next Rental Payment and if such amount is in excess of the next Rental Payment then, any remaining balance shall be applied to all or a portion of the next succeeding Rental Payments until fully applied; or (ii) as prepayment to the remaining principal balance owing under the Schedule in the inverse order of maturity. ARTICLE V Section 5.01. Delivery, Installation and Acceptance of Equipment. (a) Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in the Leases and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. When the Equipment listed in any Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an acceptance certificate in the form attached hereto as Exhibit E. (b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of an Acceptance Certificate from Lessee, prepare a Schedule of Property and Rental Payment Schedule in the forms attached hereto as Exhibits B-1 and B-2. Lessee shall execute and deliver such Schedules to Lessor within 5 business days of receipt. Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Term. Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be relocated from the base location specified for it in the Lease on which such item is listed without Lessor's consent, which consent shall not be umeasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment. Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body; provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest (including the reversionary interest) of Lessor in and to the Equipment or its interest or rights under the Lease. Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to rectifY the Equipment as #765674vl (BAPCCICA Abatement Lease Template) 9 the Equipment as eligible for manufacturer's maintenance upon the retnm of the Equipment to Lessor as provided for herein. Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the interest of Lcssor therein. ARTICLE VI Section 6.01. Title to the Equipment. During each Lease Term, and so long as Lessee is not in default under Article XII hereof, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions of the applicable Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title in and to the Equipment from and against all claims, liens, and legal processes of its creditors, and keep all Equipment free and clear of all such claims, liens, and processes. Upon the occurrence of an Event of Default or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor iri accordance with Section 12.02. Upon purchase of the Equipment under a Lease by Lessee pursuant to Section 10.01, Lessor's security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security interest in the Equipment subject to the related Lease. Section 6.02. Security Interest. To secure the payment of all of Lesssee's obligations under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest constitnting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and investments held from time to time in the Acquisition Fund and (c) any and all proceeds of any of the foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest in the Equipment, the Acquisition Fund and the proceeds thereof Section 6.03. Personal Property. The Equipment is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be sitnated notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. #765674vl (BAPCC/CA Abatement Lease Template) 10 ARTICLE VII Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, liens, and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges. that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during each Lease Term. Section 7.02. Insurance. Lessee covenants that it is an authorized self-insured public entity for purposes of general liability, automobile liability, worker's compensation and property coverage including but not limited to rental interruption coverage in an amount which shall cover Rental Payments for no less than 24 months in the event Lessee exercises it rights to abate any Rental Payments or portions thereof pursuant to Section 3.03 of the Agreement and warrants that through its program of self-insurance, it has adequate coverage or resources to protect against liabilities arising out of the terms, conditions and obligations of this Agreement. Lessee shall furnish to Lessor evidence of such self-insurance coverage through each Lease Term. Lessee shall not cancel or modify such self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancelled or modification. Section 7.03 Risk of Loss. Subject to Section 3.03, whether or not covered by insurance of self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any person or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest receive) arising out of or as s result of (a) entering into of this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, conditions, purchase, delivery, acceptance, rejection, storage or return of any item the Equipment, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee in connection with a Lease or any material misrepresentation provided by Lessee in connection with a Lease. The provisions of this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under all Leases or the termination of the Lease Term under Lease for any reason. #765674vl (BAPCC/CA Abatement Lease Template) 1] Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less.. ARTICLE VIII Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. If Lessee elects to replace any item of the Equipment (the "Replaced Equipment ') pursuant to this Section, the replacement equipment (the "Replacement Equipment ') shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. Lessor shall receive a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Lease. Lessee shall complete the documentation of Replacement Equipment on or before the next Rent Payment date after the occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the damaged equipment. For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement #765674vl (BAPCCICA Abatement Lease Template) 12 improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) payor cause to be paid to Lessor the amount of the then applicable Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall terminate and Lessor's interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing such Equipment and such other Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article lV. ARTICLE IX Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of the Equipment shall be on an "as is" basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item, product or service provided for in this Agreement Lease or any Lease. Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during each Lease Term, so long as Lessee shall not be in default under the related Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely payments under a Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties by Lessor of the Equipment. ARTICLE X Section 10.01. Purchase Option. Lessee shall have the option to purchase all of the Equipment listed in a Lease, upon giving written notice to Lessor at least 30, but not more than 120, days before the date of purchase, at the following times and upon the following terms: (a) From and after the date specified in the related Schedule (the "Purchase Option Commencement Date "), on the Rental Payment dates specified in each Lease, upon payment in full of the Rental Payments then due under such Lease plus the then applicable Purchase Price, which may include a prepayment premium on the unpaid balance as set forth in the applicable Schedule; or (b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee's notice to #765674vl (BAPCC/CA Abatement Lease Template) 13 Lessor of its exercise of the purchase option upon payment in full to Lessor of the Rental Payments then due under such Lease plus the then applicable Purchase Price; or (c) Upon the expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other amounts then owing under the Lease, and the payment of $1.00 to Lessor. After payment of the applicable Purchase Price, Lessee will own the related Equipment, and Lessor's right, title and interests in and to such Equipment will be transferred and terminated in accordance with Section 6.01. ARTICLE XI Section 11.01. Assignment by Lessor. (a) Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under any and all of the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made in a manner that conforms to any applicable State law. Nothing in this Section 11.01 shall be construed, however, to prevent Lessor from executing any such assignment, transfer or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust; provided such certificates are sold only on a private placement basis (and not pursuant to any "public offering") to a purchaser(s) who represent that (i) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such purchaser understands neither the Lease nor certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an "accredited investor" within the meaning of Regulations D under the Securities Act of 1933, or a qualified institutional buyer within the mearilng of Rule 144A, and I(iv) it is the intention of such purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933; provided further, that in any event, Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with respect to matters arising under a Lease with or to more than one individual on entity. (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, trust certificates or partnership interests with respect to the Rental Payment payable under a Lease, it shall thereafter be sufficient that Lessee receives notices of the name and address of the bank or trust company as trustree or paying agent. During each Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Sectopm 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments #765674vl (BAPCCICA Abatement Lease Templa'e) 14 all payments to the assignee or assignees designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor's security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Lease, but such option does not permit the assignment of less than all of Lessor's interests in the Equipment listed in a single Lease. (c) If Lessor notifies Lessee of its intent to assign the Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit F attached to this Lease within five (5) business days after its receipt of such request. Section] 1.02. Assignment and Subleasing by Lessee. None of Lessee's right, title, and interest in, to and under any Lease or any portion of the Equipment may be assigned or encum- bered by Lessee for any reason. ARTICLE XII Section 12.01. Events of Default Defined. Any of the following events shall constitute an "Event of Default" under a Lease: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under any Lease at the time specified herein; (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c) Any statement, representation or warranty made by Lessee in or pursuant to any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement with Bank of America, N.A. and its affiliates for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor under which there is outstanding, owing or committcd an aggregate amount of a least 10% of Lessee's aggregate current long- and short-term indebtedness, if such default consists of (i) the failure to pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder and gives the holder of the indebtedness the right to accelerate the indebtedness; #765674v 1 (BAPCC/CA Abatement Lease Template) 15 (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days. Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating the Lease Term under such Lease, Lessor may enter the premises where the Equipment listed in such Lease is located and retake possession of such Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment listed therein that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under such Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees), subject, however, to the provisions of Section 3.03. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities under any other Lease or the Equipment listed therein; (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease or as a secured party in any or all of the Equipment subj ect to such Lease; and (d) by action pursuant to the California Code of Civil Procedure, or as otherwise provided by law, obtain the issuance of a writ of mandamus enforcing, for the entire balance of the remaining Lease Term, the duty of Lessee to appropriate and take all other administrative steps necessary for the payment of rents, and other amounts due hereunder. #765674vl (BAPCClCA Abatement Lease Template) ]6 Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice as may be required in this Article. Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section l2.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attomey's fees), shall be applied as follows: (a) If such remedy is exercised solely with respect to a single Lease, Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such Equipment. (b) If such remedy is exercised with respect to more than one Lease, Equipment listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro rata. ARTlCLE XIII Section 13.01. Notices. All notices, certificates or other communications under any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee. Section 13.02. Binding Effect. Each Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 13.03. Severability. In the event any provision of any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 13.04. Amendments, Changes and Modifications. This Agreement and each Lease may only be amended by Lessor and Lessee in writing. Section 13.05. Execution in Counterparts. This Agreement and each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. #765674vl (BAPCC/CA Abatement Lease Template) 17 Section 13.06. Applicable Law. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. Section 13.08. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written. LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: City of San Bernardino 300 North D Street San Bernardino, CA 924] 8 ~~~'V~~r~Q:7 By Title (Seal) Attest: By Title #765674vl (BAPCCICA Abatement Lease Template) 18 EXHffiIT A SCHEDULE OF PROPERTY No. Re: Master Equipment Lease/Purchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and , as Lessee I. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the "Master Equipment Lease "). 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Quantity Description Serial No. Model No. Location 3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such datcs as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-I. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier. (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Term Estate in the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schcdule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. #765674vl (BAPCC/CA Abatement Lease Template) A-I 5. The Lease. The terms and provisions ofthe Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $ , of which $ lS for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end on December 31, 2009. 8. Lease Term. The Lease Term shall consist of _ months, ending on 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is 10. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price, which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. ]] follows: Registration. Any Equipment that is a motor vehicle is to be registered and titled as (a) Registered Owner: City of San Bernardino (b) Lienholder: Bank of America, N. A. 2059 Northlake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #765674vl (BAPCC/CA Abatement Lease Template) A-2 Dated: LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: By Title By DO NOT EXECUTE Title (Seal) Attest: By Title Counterpart No. of manually executed and serially numbered counterparts. -- To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No.1. #765674vl (BAPCC/CA Abatement Lease Template) A-3 EXHffiIT A-I RENTAL PAYMENT SCHEDULE Rental Rental interest Principal Purchase Payment Payment Date Amount Portion Portion Price Prepayment Premium for purposes of Section 10.01 (a) is 0%. For purposes of this Lease, "Taxable Rate, " with respect to the interest component of Rental Payments, means an annual rate of interest equal to _%. LESSEE: By DO NOT EXECUTE Title #765674vl (BAPCC/CA Abatement Lease Template) A-I-l EXHIBIT B ACCEPTANCE CERTIFICATE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No. , dated to Master Equipment LeaselPurchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and , as Lessee. Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement''), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: 1. All of the Equipment (as such term is defined in the Agreement) listed in the above- referenced Schedule of Property (the "Schedule '') has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: LESSEE: By DO NOT EXECUTE Title (Seal) #765674v 1 (BAPCC/CA Abatement Lease Template) B-] EXHIBIT C CERTIFICATE The undersigned, a duly elected and acting ("Lessee ") certifies as follows: Secretary of A. The following listed persons are duly elected and acting officials of Lessee (the "Officials ") in the capacity set forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements ") by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By DO NOT EXECUTE Title (The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) #765674vl (BAPCC/CA Abatement Lease Template) C-l EXHIBIT D OPINION OF COUNSEL TO LESSEE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No. , dated _ to Master Equipment Lease/Purchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and , as Lessee Ladies and Gentlemen: As legal counsel to ("Lessee"), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of and Exhibits thereto by and between Bank of America, National Association ("Lessor ") and Lessee (the "Agreement "), [and] an executed counterpart of Schedule of Property No. , dated , by and between Lessor and Lessee (the "Schedule "), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment "), [and an executed counterpart of that certain Acquisition Fund and Account Control Agreement dated by and among Lessee, Lessor and the Custodian named therein (the "Acquisition Fund Agreement")] (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease". [The Lease and the Acquisition Fund Agreement are referred to herein collectively as the "Lease Documents"]. Based on the foregoing, I am of the following opinions: I. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) police power][is a political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) ofthe Code, notwithstanding Section 103(b) o[the Code); 2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Lease [Documents] and to perform its obligations under the Lease [Documents]; #765674vl (BAPCCICA Abatement Lease Template) E-I 3. The Lease [Documents] has [have] been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Lease [Documents are] [is] a valid and binding obligation of Lessee enforceable in accordance with its [their] terms; 4. The authorization, approval, execution and delivery of the Lease [Documents] and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and 5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect thc transactions contemplated by the Lease Documents or the interest of Lessor or its assigns, as the case may be, in the Equipment thereunder. [6. The portion of rentals designated as and constituting interest paid by Lessee and received by Lessor is excluded from Lessor's gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item for purposes of the federal individual or corporate alternative minimum taxes.] All capitalized terms herein shall have the same meanings as in the Lease unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Printed Name Firm Address Telephone No. Signature DO NOT EXECUTE Dated #337849v4 (CA Abatement Lease Template) E-2 SCHEDULE OF PROPERTY NO.2 Re: Master Equipment LeaselPurchase Agreement, dated as of April 30,2009, between Bank of America, National Association, as Lessor, and City of San Bernardino, as Lessee 1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment LeaselPurchase Agreement (the "Master Equipment Lease '). 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Twenty-eight (28) Ford Crown Victoria Police Interceptors 3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-I. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier. (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Term Estate in the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $753,875.36, of which #765674v 1 (BAPCClCA Abatement Lease Template) A- I $0.00 is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end on December 31, 2009. 8. 30,2012. Lease Term. The Lease Term shall consist of 36 months, ending on April 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is April 30, 2012. 10. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price, which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. J J. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows: (a) Registered Owner: City of San Bernardino (b) Lienholder: Bank of America, N. A. 2059 Northlake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #765674vl (BAPCClCA Abatement Lease Template) A-2 Dated: LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: City of San Bernardino 300 North D Street San Bernardino, CA 92418 BY@1u~ /~~Jm P{ Title \J U!. rQx.s'lrl ~dt- By Title (Seal) Attest: By Title Counterpart No. _ of _ manually executed and serially numbered counterparts. To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. I. #765674v\ (BAPCC/CA Abatement Lease Template) A-3 EXHIBIT A-I RENTAL PAYMENT SCHEDULE Rental Payment Date Rental Payment Amount Interest Portion 3.23% Principal Portion 4/30/2009 10/30/2009 4/30/2010 10/30/2010 4/30/2011 10/30/2011 4/30/2012 132,842.82 12,175.06 120,667.75 132,842.82 10,226.28 122,616.53 132,842.82 8,246.03 124,596.79 132,842.82 6,233.80 126,609.02 132,842.82 4,189.06 128,653.75 132,842.82 2,111.31 130,731.51 797,056.91 43,181.55 753,875.36 TOTAL Prepayment Premium for purposes of Section 10.01 (a) is 0%. Purchase Price 753,875.36 633,207.61 510,591.07 385,994.28 259,385.26 130,731.51 (0.00) For purposes of this Lease, "Taxable Rate," with respect to the interest component of Rental Payments, means an annual rate of interest equal to 4.6468%. LESSEE: City of San Bernardino By Title CERTIFICATE The undersigned, a duly elected and acting San Bernardino ("Lessee") certifies as follows: Secretary of City of A. The following listed persons are duly elected and acting officials of Lessee (the "Officials") in the capacity set forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of April _, 2009, and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements") by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By Title (The signer of this Certificate cannot be listed above as authorized to execute the Agreements. ) #765674vl (BAPCaCA Abatement Lease Template) C-l ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT This Acquisition Fund and Account Control Agreement (this "Agreement"), dated as of April 30, 2009, by and among Bank of America, National Association, a national banking association (hereinafter referred to as "Lessor"), City of San Bernardino, a political subdivision of the state of California (hereinafter referred to as "Lessee") and Deutsche Bank National Trust Company, a national trust company (hereinafter referred to as "Acquisition Fund Custodian"). Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as of April 30, 2009, between Lessor and Lessee (hereinafter referred to as the "Lease"), covering the acquisition and lease of certain Equipment described therein (the "Equipment"). It is a requirement of the Lease that the Equipment Cost of the Equipment (an amount not to exceed $4,393,013.00) be deposited into an escrow under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment. The parties agree as follows: I. Creation of Acquisition Fund. (a) There is hereby created a special trust fund to be known as the "City of San Bernardino 2009 Acquisition Fund" (the "Acquisition Fund") to be held in trust by thc Acquisition Fund Custodian for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. (b) The Acquisition Fund Custodian shall invest and reinvest moneys on deposit in the Acquisition Fund in Qualified Investments in accordance with written instructions received from Lessee. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Acquisition Fund Custodian for the reinvestment of any maturing investment. Accordingly, neither the Acquisition Fund Custodian nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Acquisition Fund, and Lessee agrees to and does hereby release the Acquisition Fund Custodian and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the investment of the moneys on deposit in the Acquisition Fund shall be borne by the Acquisition Fund. For purposes of this agreement, "Qualified Investments" means any investments which meet the requirements of [state law citation]. IN TIlE ABSENCE OF WRITTEN INSTRUCTIONS, THE ACQUISITION FUND CUSTODIAN IS HEREBY AUTHORIZED AND DIRECTED TO INVEST AND RE- INVEST ALL FUNDS ON HAND IN THE GOLDMAN SACHS FINANCIAL SQUARE (FSQ) MONEY MARKET FUNDS, TREASURY OBLIGATIONS, FUND#470 (AAAmI Aaa). #765408vl (BAPCC/AFA General) (c) Unless the Acquisition Fund is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of written authorization(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Acquisition Fund are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Acquisition Fund after December 31, 2009 (the "Acquisition Period") shall be applied as provided in Section 4 hereof. (d) The Acquisition Fund shall be terminated at the earliest of (i) the final distribution of amounts in the Acquisition Fund or (ii) written notice given by Lessor of the occurrence of a default or termination of the Lease due to non-appropriation. (e) The Acquisition Fund Custodian may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in sueh a writing or instrument. The Acquisition Fund Custodian shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Acquisition Fund Custodian, and for the disposition of the same in accordance herewith. (f) Unless the Acquisition Fund Custodian is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Acquisition Fund Custodian and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Acquisition Fund Custodian under this agreement; and in connection therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian against any and all expenses; including reasonable attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim. (g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund Custodian shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in connection with such civil action, and shall be fully protected in suspending all Dr part of its activities under the Lease until a final judgment in such action is received. (h) The Acquisition Fund Custodian may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Acquisition Fund Custodian shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. #765408vl (BAPCC/AFA General) 2 (i) Lessee shall reimburse the Acquisition Fund Custodian for all reasonable costs and expenses, including those of the Acquisition Fund Custodian's attorneys, agents and employees incurred for extra-ordinary administration of the Acquisition Fund and the performance of the Acquisition Fund Custodian's powers and duties hereunder in connection with any Event of Default under the Lease, or in connection with any dispute between Lessor and Lessee concerning the Acquisition Fund. 2. Acquisition of Propertv. (a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Acquisition Fund. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. (b) Authorized ACQuisition Fund Disbursements. Disbursements from the Acquisition Fund shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Acquisition Fund shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Acquisition Fund there shall be filed with the Acquisition Fund Custodian a requisition for such payment in the form of Disbursement Request attached hereto as Schedule I, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. Each such requisition shall be signed by an authorized representative of Lessee (an "Authorized Representative") and by Lessor, and shall be subject to the following: I. Delivery to Lessor of a certificate of Lessee to the effect that: (i) an obligation in the stated amount has been incurred by Lessee, and that the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid; (ii) the Authorized Representative has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made; (iii) such requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date of such certificate, entitled to retain; and (iv) the Equipment is insured in accordance with the Lease. 2. Delivery to Lessor of an Acceptance Certificate executed by Lessee, together with any Purchase Agreement Assignment or bill of sale and invoice therefor as requircd by Section 3.04 of the Lease; #765408vl (BAPCCIAFA General) 3 3. The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment; 4. There shall exist no Event of Default (nor any event which, with notice or lapse of time or both, would become an Event of Default); and 5. No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. 3. Deposit to Acquisition Fund. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Lease Proceeds to be deposited in the Acquisition Fund. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Acquisition Fund. 4. Excessive Acquisition Fund. Following the final disbursement from the Acquisition Fund at the end of the Acquisition Period, or termination of the Acquisition Fund as otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the Acquisition Fund to Lessor for application to amounts owed under the Lease in accordance with Section 4.07 ofthe Lease. 5. Securitv Interest. The Acquisition Fund Custodian and Lessee acknowledge and agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any part thereof, is converted to investments as set forth in this agreement, such investments shall be made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest. 6. Control of Acquisition Account. In order to perfect Lessor's security interest by means of control in (i) the Acquisition Fund established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Acquisition Fund, (iii) all of Lessee's rights in respect of the Acquisition Fund, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the "Collateral"), Lessor, Lessee and Acquisition Fund Custodian further agree as follows: (a) All terms used in this Section 6 which are defined in the Commercial Code of the state of California ("Commercial Code") but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement. (b) Acquisition Fund Custodian will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. #765408vl (BAPCC/AFA General) 4 (c) Acquisition Fund Custodian hereby represents and warrants (a) that the records of Acquisition Fund Custodian show that Lessee is the sole owner of the Collateral, (b) that Acquisition Fund Custodian has not been served with any notice oflevy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor's claim pursuant to this Agreement, and (c) that Acquisition Fund Custodian is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Acquisition Fund Custodian is obligated to accept from Lessor under this Agreement and entitlement orders that Acquisition Fund Custodian, subject to the provisions of paragraph ( e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Acquisition Fund Custodian will not enter into any agreement by which Acquisition Fund Custodian agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Acquisition Fund Custodian shall promptly notify Lessor if any person requests Acquisition Fund Custodian to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph ( e) and subject to Section 1 (b) hereof, Acquisition Fund Custodian may allow Lessee to effect sales, trades, transfers and exchanges of Collateral within the Acquisition Fund, but will not, without the prior written consent of Lessor, allow Lessee to withdraw any Collateral from the Acquisition Fund. Acquisition Fund Custodian acknowledges that Lessor reserves the right, by delivery of written notice to Acquisition Fund Custodian, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Acquisition Fund. Further, Acquisition Fund Custodian hereby agrees to comply with any and all written instructions delivered by Lessor to Acquisition Fund Custodian (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor's claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter. (t) Lessee hereby irrevocably authorizes Acquisition Fund Custodian to comply with all instructions and entitlement orders delivered by Lessor to Acquisition Fund Custodian. (g) Acquisition Fund Custodian will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Acquisition Fund Custodian will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Acquisition Fund Custodian and Lessee hereby agree that any property held in the Acquisition Fund shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Acquisition Fund Custodian may be a party. #765408vl (BAPCC/AFA General) 5 (i) Acquisition Fund Custodian is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 7 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Acquisition Fund statements or reports issued or sent to Lessee with respect to the Acquisition Fund. 7. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This agreement may not be amended except in writing signed by all parties hereto. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an cxpress carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below: If to Lessor: Bank of America, National Association 555 California Street, 4th Floor Mail Code: CA5-705-04-01 San Francisco, CA 94104 Attn: Contract Administration Fax: (415) 765-7373 If to Lessee: City of San Bernardino 300 North D Street San Bernardino, CA 92418 Attn: Mr. Michael Gomez Fax: (909) 384-5043 If to Acquisition Fund Custodian: Deutsche Bank National Trust Company 101 California Street, 46th Floor San Francisco, CA 94111 Attn: Raafat Albert Sarkis Phone: (415) 617-2801 Fax: (415) 617-4270 #765408yl (BAPCCIAFA General) 6 In Witness Whereof, the parties have executed this Acquisition Fund and Account Control Agreement as of the date first above written. Bank of America, National Association, as Lessor City of San Bernardino, as Lessee By ~~'~ ~~!O Title: I 0 .'0 +- By: Title: Deutsche Bank National Trust Company As Acquisition Fund Custodian By: Title: By: Title: #765408vl (BAPCC/AFA General) 7 SCHEDULE 1 FORM OF DISBURSEMENT REQUEST Re: Master Equipment Lease/Purchase Agreement dated as of April_, 2009, by and between Bank of America, National Association, as Lessor and City of San Bernardino, as Lessee (the "Lease") In accordance with the terms of the Acquisition Fund and Account Control Agreement, dated as of April _, 2009, (the "Acquisition Fund and Account Control Agreement") by and among Bank of America, National Association ("Lessor"), City of San Bernardino ("Lessee") and Deutsche Bank National Trust Company (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund and Account Control Agreement (the "Acquisition Fund") for the following purposes. Payee's Name and Address Invoice Number Dollar Amount Puroose The undersigned hereby certifies as follows: (i) An obligation in the stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authorized Representative, has no notice of any vendor's, mechanic's or other licns or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iii) This requisition contains no itcm representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease. (v) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. #765408vl (BAPCC/AFA General) (vi) The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: CITY OF SAN BERNARDINO By: Authorized Representative Disbursement of funds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized BANK OF AMERICA, NATIONAL ASSOCIATION as Lessor under the Lease By: Title: Vice President #765408vl (BAPCC/AFA General) 2 Fo= W-9 Request for Taxpayer Identification Number and Certification Give form to the requester. Do not send to the IRS. (Aev. November 2005) Deparlmenlotlhe Treasury Internal Revenue Sei"'lice N $ '" ~ 0. c o ~ 0 0.5 ~'';: "0 02 Ei ._ c 0:-;:; '" .u . 0. II) . . Cf) Name (as shOwn on your income tax retum) Business name, if different from above o IndividuaV 0 Corporation Check appropriate box: Sole proprietor Address (number, street, and apt. or suite no.) City. state, and ZIP code list account number(s) here {optionan Taxpayer Identification Number IN) D Partnership 0 Other'" ______u.......... o Exempt from backup withholding Requester's name and address (optional) Enter your TIN in the appropriate box. The TIN provided must match the name given on Une 1 to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose number to enter. ~ or Certification Under penalties of perjury, I certify that: 1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue SelVice (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S. person (including a U_S. resident alien). Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (See the instructions on page 4.) Sign I Signature of Here ,u.S. person ... Date ... Purpose of Form A person who is required to file an information return with the IRS, must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. U.S. person. Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. In 3 above, if applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income. Note. If a requester gives you a fonn other than Form W-9 to request your TIN, you must use the requester's form jf it is substantially similar to this Form W-9. For federal tax purposes, you are considered a person if you are: . An individual who is a citizen or resident of the United States. . A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, or . Any estate (other than a foreign estate) or trust. See Regulations sections 301. 7701-6(a) and 7(a} for additional infonnation. Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax on any foreign partners' share of income from such business. Further, in certain cases where a Form W-9 has not been received, a partnership is required to presume that a partner is a foreign person, and pay the withholding tax. Therefore, if you are a U.S. person that is a partner in a partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid withholding on your share of partnership income. The person who gives Form W-9 to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States is in the following cases: . The U.S. owner of a disregarded entity and not the entity, Form W-9 (Rev. 11-2005) Cat No. 10231X Form W-g (Rev_ 11-2005) Page 2 . The U.s. grantor or other owner of a grantor trust and not the trust, and . The U.S. trust (other than a grantor trust) and not the beneficiaries of the trust. Foreign person. If you are a foreign person, do not use Form W-9. Instead, use the appropriate Form W-8 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities). Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types of income even after the recipient has otherwise become a U.S. resident alien for tax purposes. If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items: 1. The treaty country. Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. 4. The type and amount of income that qualifies for the exemption from tax. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty article. Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U.S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However. paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, t 984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax on his or her scholarship or fellowship income would attach to Form W-9 a statement that includes the information described above to support that exemption. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester the appropriate completed Form W-8. What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 28% of such payments (after December 31, 2002). This is called "backup withholding." Payments that may be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN, make the proper certifications, and report all your taxable interest and dividends on your tax return. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, 2. You do not certify your TIN when required (see the Part II instructions on page 4 for details), 3. The IRS tells the requester that you furnished an incorrect TIN, 4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only). Certain payees and payments are exempt from backup withholding. See the instructions below and the separate Instructions for the Requester of Form W-9. Also see Special rules regarding partnerships on page 1. Penalties Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil penally for false infonnation with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penalty. Criminal penally for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties. Specific Instructions Name If you are an individual, you must generalty enter the name shown on your income tax return. However, if you have changed your last name, for instance, due to marriage without informing the Social Security Administration of the name change, enter your first name, the last name shown on your social security card, and your new last name. If the account is in joint names, list first, and then circle, the name of the person or entity whose number you entered in Part I of the form. Sole proprietor. Enter your individual name as shown on your income tax return on the "Name" line. You may enter your business, trade, or "doing business as (DBA)" name on the "Business name" line. Limited liability company (LLC). If you are a single-member LLC (including a foreign LLC with a domestic owner) that is disregarded as an entity separate from its owner under Treasury regulations section 301.7701-3, enter the owner's name on the "Name" line. Enter the LLC's name on the "Business name" line. Check the appropriate box for your filing status (sole proprietor, corporation, etc.), then check the box for "Other" and enter "LLC" in the space provided. Other entities. Enter your business name as shown on required federal tax documents on the "Name" line. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on the "Business name" line. Note. You are requested to check the appropriate box for your status (individual/sole proprietor, corporation, etc.). Exempt From Backup Withholding If you are exempt, enter your name as described above and check the appropriate box for your status, then check the "Exempt from backup withholding" box in the line following the business name, sign and date the form. Form W-9 (Rev. 11-2005) Page 3 Generally. individuals (including sole proprietors) are not exempt from backup withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends. Note. If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding. Exempt payees. Backup withholding is not required on any payments made to the following payees: 1. An organization exempt from tax under section 501 (a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401 (t)(2), 2. The Unrted States or any of its agencies or instrumentalities, 3. A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities. 4. A foreign government or any of its political subdivisions, agencies, or instrumentalities, or 5. An international organization or any of its agencies or instrumentalities. Other payees that may be exempt from backup withholding include: 6. A corporation, 7. A foreign central bank of issue, 8. A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States, 9. A futures commission merchant registered with the Commodity Futures Trading Commission, 10. A real estate investment trust, 11. An entity registered at all times during the tax year under the Investment Company Act of 1940, 12. A common trust fund operated by a bank under section 584(a), 13. A financial institution, 14. A middleman known in the investment community as a nominee or custodian, or 15. A trust exempt from tax under section 664 or described in section 4947. The chart below shows types of payments that may be exempt from backup withholding. The chart applies to the exempt recipients listed above, 1 through 15. IF the payment is for. . . THEN the payment is exempt for.. . Interest and dividend payments All exempt recipients except for 9 Broker transactions Exempt recipients 1 through 13. Also, a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker Barter exchange transactions and patronage dividends Exempt recipients 1 through 5 Payments over $600 required to be reported and direct sales over $5,0001 'See Fonn 1099-MISC, Miscellaneous Income, and its instructions. , However, the following payments made to a corporation (inCluding gross proceeds paid to an attorney under section 6045(f), even if the attorney is a corporation) and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys' fees; and payments for services paid by a federal executive agency. Generally, exempt recipients 1 through 7 2 Part I. Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to ~et an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. if you do not have an ITIN, see How to get a TIN below. If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN. If you are a single-owner LLC that is disregarded as an entity separate from its owner (see Limited liability company (LLC) on page 2), enter your SSN (or EIN, if you have one). If the LLC is a corporation, partnership, etc., enter the entity's EIN. Note. See the chart on page 4 for further clarification of name and TIN combinations. How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local Social Security Administration office or get this form online at www.socia/security.gov. You may also get this form by calling '-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer 10 Numbers under Related Topics. You can get Forms W-7 and SS-4 from the IRS by visiting www.irs.90vorbycalling 1-800-TAX-FORM (1-800-829-3676). If you are asked to complete Form W-9 but do not have a TIN. write "Applied For" in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 50-day nule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester. Note. Writing "Applied For" means that you have already applied for a TIN or that you intend to apply for one soon. Caution: A disregarded domestic entity that has a foreign owner must use the appropriate Form W-8. Form W-g (Rev. 11-2005) Page 4 Part II. Certification To establish to the withholding agent that you are a U.S. person, or resident ahen, sign Form W-9, You may be requested to sign by the withholding agent even jf items 1, 4, and 5 below indicate otherwise. For a joint account, only the person whose TIN is shown in Part I should sign (when required). Exempt recipients, see Exempt From Backup Withholding on page 2. Signature requirements. Complete the certification as indicated in 1 through 5 below. 1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification_ 2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply_ If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form, 3. Real estate transactions. You must sign the certification_ You may cross out item 2 of the certification, 4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. "Other payments" include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations). 5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, but you do not have to sign the certification. What Name and Number To Give the Requester For this type of account: 1. Individual 2. Two or more individuals Uoint account) 3. Custodian account of a minor (Uniform Gift to Minors Act) 4. a. The usual revocable savings trust (grantor is also trustee) b. So-called trust account that is not a legal or valid trust under state taw S. Sole proprietorship or single-owner LLC Give name and SSN of: The individual The actual owner of the account or, if combined funds, the first individual on the account 1 The minor .2 The grantor-trustee 1 The actual owner \ The owner 3 For this type of account: 6. Sole proprietorship or single-owner LLC 7. A valid trust, estate, or pension trust 8. Corporate or LLC electing corporate status on Form 8832 9. Association, club, religious, charitable, educational, or other tax-exempt organization 10. Partnership or multi-member LLG 11. A broker or registered nominee 12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments Give name and EIN of: The owner 3 Legal entity 4 The corporation The organization The partnership The broker or nominee The public entity 'Ust first and circle the name of the person whose number you fumish. tf only one person on a joint account has an SSN. that person's number must be fumished. ~Circle the minor's name and furnish the minor's SSN. "You must show your individual name and you may also enter your business or "DBA" name on the second name line. You may use either your SSN or EIN (if you have one). If you are a sole proplietor, IRS encourages you to use your SSN. 4 Ust first and circle the name of the legal trust, estate, or pension trust. (Do not furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account title.) Also see Special rules regarding partnerships on page 1. Note. If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed. Privacy Act Notice Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA, or Archer MSA or HSA The IRS uses the numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil and crimJnallitigation, and to cities, states, the District of Columbia, and U.S, possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism, You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to a payer. Certain penalties may also apply. ON LEGAL COUNSEL'S LETTERHEARD OPINION OF COUNSEL TO LESSEE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No.2, dated April 30, 2009, to Master Equipment LeaselPurchase Agreement, dated as of April 30, 2009 between Bank of America, National Association, as Lessor, and City of San Bernardino, as Lessee Ladies and Gentlemen: As legal counsel to City of San Bernardino ("Lessee "), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of April 30, and Exhibits thereto by and between Bank of America, National Association ("Lessor") and Lessee (the "Agreement"), [and] an executed counterpart of Schedule of Property No.2, dated April 30, 2009, by and between Lessor and Lessee (the "Schedule "), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment "), [and an executed counterpart of that certain Acquisition Fund and Account Control Agreement dated April 30, 2009 by and among Lessee, Lessor and the Custodian named therein (the "Acquisition Fund Agreement")] (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease". [The Lease and the Acquisition Fund Agreement are referred to herein collectively as the "Lease Documents"]. Based on the foregoing, I am of the following opinions: I. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) police powerllis a political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) ofthe Code]; 2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Lease [Documents] and to perform its obligations under the Lease [Documents]; #337849v4 (eA Abatement Lease Template) B-2 3. The Lease [Documents] has [have] been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Lease [Documents are] [is] a valid and binding obligation of Lessee enforceable in accordance with its [their] terms; 4. Thc authorization, approval, execution and delivery of the Lease [Documents] and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and 5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Lease Documents or the interest of Lessor or its assigns, as the case may be, in the Equipment thereunder. [6. The portion of rentals designated as and constituting interest paid by Lessee and received by Lessor is excluded from Lessor's gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item for purposes of the federal individual or corporate alternative minimum taxes.) All capitalized terms herein shall have the same meanings as in the Lease unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Signature DO NOT Printed Name EXECUTE Firm Address Telephone No. Dated #337849v4 (eA Abatement Lease Template) B-3 Information Return for Tax-Exempt Governmental Obligations .... Under Internal Revenue Code section 149(e) .... See separate Instructions. Caution: If the issue price is under $100,000, use Form B038-GC. If Amended Return, check here ~ 0 2 Issuer's employer identification number 95 : 6000772 Room/suite 4 Report number Fo'm 8038-G (Rev. November 2000) Department ollhe Treasury lnlemal Revenue Service Issuer's name CITY OF SAN BERNARDINO 3 Number and street (or P.O. box if mail is not delivered to street address) 300 NORTH D STREET OMS No. 1545-0720 5 City, town, or post office, state, and lIP code SAN BERNARDINO, CA 92418-001 7 Name of issue LEASE WITH OPTION TO PURCHASE AGREEMENT 3 6 Date of issue 04-30-09 8 CUS1P number NONE Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative MICHAEL GOMEZ, FINANCIAL ANALYST ( 909 ) 384-5146 T e of Issue (check a licable box(es) and enter the issue price) See instructions and attach schejLJI~u 11 12 13 14 15 16 17 18 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions) Enter the final maturity date of the guaranteed investment contract.... N/A Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a 0.00 If this issue is a toan made from the proceeds of another tax~exempt issue. check box.... 0 and enter the name of the issuer.... and the date of the issue .... If the issuer has designated the issue under section 265(b)(3)(B)(i)(lIl) (small issuer exception). check box If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box If the issuer has identified a hed e. check box 753,875.36 (e) Yield 3.23 % 0.00 753,875.36 0.00 753,875.36 N/A N/A N/A N/A years years 9 o o o [;z] o o o o Other. Describe ~ If obligations are TANs or RANs. check box ~ 0 If obligations are BANs. check box ~ 0 If obli atiens are in the form of a lease or installment sale, check box .... D Oescri tion of Obli ations. Com lete for the entire issue for which this form is bein Education Health and hospital Transportation . Public safety. Environment (including sewage bonds) Housing . Utilities (c) Stated redemption price at maturity (d) Weighted average maturity 0.00 0.00 ~1lJ ~D ~D (b) Issue price 03/30/2016 $ 753,875.36 $ Uses of Proceeds of Bond Issue (includin N/A 3.000 underwriters' discount) ears 22 23 24 25 26 27 28 29 30 31 32 33 34 Proceeds used for accrued interest . Issue price of entire issue (enter amount from line 21, column (b)) Proceeds used for bond issuance costs (including underwriters' discount) Proceeds used for credit enhancement . Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to currently refund prior issues Proceeds used to advance refund prior issues Total (add lines 24 through 28) . Nonrefundin roceeds of the issue (subtract line 29 from line 23 and enter amount here) . Oescri tion of Refunded Bonds (Com lete this art onl for refundin bonds. Enter the remaining weighted average maturity of the bonds to be currently refunded .. Enter the remaining weighted average maturity of the bonds to be advance refunded ... Enter the last date on which the refunded bonds will be called .. Enter the date(s) the refunded bonds were issued ... Miscellaneous 24 25 26 27 28 0.00 0.00 0.00 0.00 0.00 35 36a b 37 b 38 39 40 Sign Here Under penalties of perjury. I declare that I have examined this return and accompanying schedules and statements. and to Ihe best of my knowledge and belief. they are true. correct. and complete. ~ Signature of issuer's authorized representative Date ~ Barbara S. Pachon, Director of Financt ,. Type or print name and title Cat No. 63773S Form 8038wG (Rev. 11-2000) For Paperwork Reduction Act Notice, see page 2 of the Instructions. @ RESOLUTION NO. torPY 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT AND ISSUANCE OF A PURCHASE ORDER TO FAIRVIEW FORD OF SAN BERNARDINO PURSUANT TO SECTION 3.04.010 B-3 OF THE MUNICIPAL CODE FOR THE PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS UTILIZED BY THE POLICE DEPARTMENT; AND AWARD A BID FOR lEASE PURCHASE FINANCING TO BANK OF AMERICA FOR THE PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCil OF THE CITY OF SAN BERNARDINO AS FOllOWS: SECTION 1. The City Manager of the City of San Bernardino is hereby authorized to execute on behalf of said City an Agreement between the City of San Bernardino and Fairview Ford of San Bernardino, which is attached hereto, marked Exhibit "A" and incorporated herein by reference as fully as though set forth at length. SECTION 2. This purchase is exempt from the formal contract procedures of Section 3.04.010 of the Municipal Code, pursuant to Section 3.04.010. B.3 of said Code "Purchases approved by the Mayor and Common Council". SECTION 3. That Fairview Ford of San Bernardino has offered a purchase price of $26,924.12 including tax pursuant to Section 3.04.010 B-3 of the Municipal Code for the purchase of twenty-eight (28) 2009 Ford Crown Victoria Police Interceptors. Pursuant to this determination the Finance Director is hereby authorized to issue a purchase order to Fairview Ford of San Bernardino, in the amount of $753,875.36, which will facilitate the procurement of the twenty-eight (28) 2009 Ford Crown Victoria Police Interceptors. III III III ~-:l-O-o'1 .:II ;,~ 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT AND 2 ISSUANCE OF A PURCHASE ORDER TO FAlRVIEW FORD OF SAN BERNARDINO PURSUANT TO SECTION 3.04.010 B-3 OF THE MUNICIPAL CODE FOR THE 3 PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS UTILIZED BY THE POLICE DEPARTMENT; AND AWARD A BID 4 FOR LEASE PURCHASE FINANCING TO BANK OF AMERICA FOR THE PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS 5 6 SECTION 4. The Purchase Order shall reference this Resolution Number and shall read, 7 "Purchase of twenty-eight (28) 2009 Ford Crown Victoria Police Interceptors, P.O. not to exceed 8 $753,875.36" and shall incorporate the terms and conditions of the Agreement. 9 SECTION 5. That Bank of America provided the lowest rate quote for the lease-purchase 10 of twenty-eight (28) 2009 Ford Crown Victoria Police Interceptors. Pursuantto this determination II the Director of Finance is hereby authorized to execute lease purchase documents with Bank of 12 America in the form set forth as Exhibit "B" attached hereto and by this reference made a part 13 hereto. 14 SECTION 6. The authorization to execute the above referenced Purchase Order and 15 agreement is rescinded ifnot issued within one sixty (60) days of the passage of this Resolution, 16 or if, with respect to the lease purchase document, applicable interest rate has increased above that 17 hereby approved. 18 III 19 III 20 III 21 III 22 III 23 III 24 III 25 III 26 III 27 III 28 III JEG/[Gndcr\Resos\CrimeFreeZone.Res] 1 1 2 3 4 5 6 7 8 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT AND ISSUANCE OF A PURCHASE ORDER TO FAIRVIEW FORD OF SAN BERNARDINO PURSUANT TO SECTION 3.04.010 B-3 OF THE MUNICIPAL CODE FOR THE PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS UTILIZED BY THE POLICE DEPARTMENT; AND AWARD A BID FOR LEASE PURCHASE FINANCING TO BANK OF AMERICA FOR THE PURCHASE OF TWENTY-EIGHT (28) 2009 FORD CROWN VICTORIA POLICE INTERCEPTORS I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a , 2009, by the day of meeting thereof, held on the 9 following vote, to wit: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 ArJl?roved as to form: ~rf~ 271~esF.Penman 28jilty Attorney Council Members: AYES NAYS ABSTAIN ABSENT ESTRADA BAXTER BRINKER SHORETT KELLEY JOHNSON MCCAMMACK Rachel G. Clark, City Clerk The foregoing resolution is hereby approved this ,2009. day of Patrick J. Morris, Mayor City of San Bernardino 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VE:\'DOR SERVICE AGREEMENT This Vendor Service Agreement is entered into this 20th day of April 2009, by and between Fairview Ford ("VENDOR") and the City of San Bernardino ("CITY" or "San Bernardino"). WITNESSETH: WHEREAS, the Mayor and Common Council have detemlined that it is in the best interest of the CITY to contract for the purchase of twenty-eight (28) Year 2009 Ford Crown Victoria Police Interceptors; and WHEREAS, the City of San Bernardino has detemlined that vendor possesses the professional skills and ability to provide said services for the City; NOW, THEREFORE, the parties hereto agree as follows: 1. SCOPE OF SERVICES. F or the remuneration stipulated in paragraph 2, San Bernardino hereby engages the services of VENDOR to provide those products and services as set forth in its proposal dated February 26, 2009, attached hereto, marked Attachment ''1'' and incorporated herein by this reference as fully as though set forth at length. 2. COMPENSATION AND EXPENSES. a. For the services delineated above, the CITY, upon presentation of an invoice, shall pay the VENDOR up to the amount of S753,875.36 to provide and perfornl those products and services described in Section 1 above. b. No other expenditures made by VENDOR shall be reimbursed by CITY. 3. TERM, The term of this agreement shall be for a period of one (I) year to April 1 9,2009. Exhibit "A" -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This Agreement may be terminated at any time by thirty (30) days prior written notice by either party. The terms of this Agreement shall remain in force unless amended by written agreement of the parties executed on or before date of expiration of current term of the agreen1ent. 4. I"'DEMNITY. Vendor agrees to and shall indemnify and hold the City, its elected officials, employees, agents or representatives, free and harmless from all claims, actions, damages and liabilities of any kind and nature arising from bodily injury, including death, or property damage, based or asserted upon any or 'alleged act or omission of Vendor, its employees, agents, or subcontractors, relating to or in any way connected with the accomplishment of the work or performance of service under this Agreement, unless the bodily injury or property damage was actually caused by the sole negligence of the City, its elected officials, employees, agents or representatives. As part of the foregoing indemnity, Vendor a~'Tees to protect and defend at its own expense, including attomey's fees the City, its elected officials, employees, agents or representatives from any and all legal actions based upon such actual or alleged acts or omiSSIons. Vendor hereby waives any and all rights to any types of express or implied indemnity against the City, its elected officials, employees, agents or representatives, with respect to third party claims against the Vendor relating to or in any way connected with the accomplishment of the work or performance of services under this Agreement. 5. INSURANCE. While not restricting or limiting the foregoing, during the term of this Agreement, VENDOR shall maintain in effect policies of comprehensive public, general and automobile liability insurance, in the amount of $1,000,000.00 combmed single limit, and statutory worker's compensation coverage, and shall file copies of said policies with the CITY's Risk Exhibit "A" -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an additional named insured in each policy of insurance provided hereunder. The Certificate of Insurance furnished to the CITY shall require the insurer to notify CITY of any change or ternlination in the policy. Insurer shall give CITY 30 days notice prior to enactment and an\ change or termination of policy. 6. NON-DISCRIMINATION. In the perfornlance of this Agreement and in the hiring and recruitment of employees. VE1\'DOR shall not engage in, nor permit its officers, employees or agents to engage in. discrimination in employment of persons because of their race, religion, color, national origin. ancestry, age, mental or physical disability, medical conditions. marital status, sexual gender or sexual orientation, or any other status protected by law, except as pernlitted pursuant to Section 12940 of the California Government Code. 7. INDEPENDENT CONTRACTOR. VENDOR shall perform work tasks provided by this Agreement, but for all intents and purposes VENDOR shall be an independent contractor and not an agent or employee of the CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll deductions for VENDOR and its officers, agents, and employees, and all business licenses, if any are required, in connection with the services to be performed hereunder. 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. VENDOR warrants that it possesses or shall obtain, and maintain a business registration certificate pursuant to Chapter 5 of the Municipal Code, and any other license, permits, Exhibit "A" -3- 6 7 8 9 10 11 12 13 10. 1 qualifications, insurance and approval of whatever nature that are legally required of VE?\'DOR 2 to practice its business or profession. 3 9. 4 5 :'-IOTICES. Any notices to be given pursuant to this Agreement shall be deposited with the United States Postal Service, postage prepaid and addressed as follows: TO THE CITY: Public Services Director 300 North "D" Street San Bernardino. CA 92418 Telephone: (909) 384-5140 TO THE VENDOR: Fairview Ford Sales Inc. 808 West 2nd Street San Bernardino, CA 92412-5516 Telephone: (909) 386-0281 Attn: Todd Eff ATTOR.'\'EYS' FEES. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In the event that litigation is brought by any party in connection with this Agreement. the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' fees" for the purposes of this paragraph. 11. ASSIGNMENT. VE!',mOR shall not voluntarily or by operation of law assign, transfer, sublet or encumber all or any part of the VENDOR's interest in this Agreement without CITY's ptior written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for the termination of this Exhibit "A" -4- 1 Agreement. Regardless of CITY's consent, no subletting or assignment shall release VE~DOR 2 of VENDOR's obligation to perform all other obligations to be perfornled by VE!\l)OR 3 hereunder for the term of this Agreement. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12. VENUE. The parties hereto agree that all actions or proceedings arising in connection with this Aareement shall be tried and litigated either in the State courts located in the County of San '='..... ~ Bernardino, State of California or the U.s. District Court for the Centra] District of Califomia. Riverside Division. The aforementioned choice of venue is intended by the parties to be the mandatory and not permissive in nature. 13. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective heirs, representatives, successors. and assigns. 15. WARRANTY. Vendor expressly warrants that all products and services supplied to City by Vendor under this Agreement shall conform to the specifications, drawings or other description upon which this PlTRSHASE is based, shall be fit and sufficient for the purpose intended, merchantable, of good material and workmanship, free from defects and free and clean of all liens or encumbrances. Inspection, testing, acceptance or use of the goods by the City shilll not affect Vendor's obligations under this warranty. and such shall SUf\'!'e inspection, testing, acceptance and use. Vendor agrees to replace or correct promptly defects of any goods or sef\'ices not conforming to the foregoing warranty \vithout expense to the City, when notified of such non-conformity by City. 1f Vendor fails to correct the defects in or replace non- Exhibit 'X' -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 conforming goods or services promptly, City may, after reasonable notice to Vendor, make such corrections or effect cover, or cure, at Vendor's expense. "Reasonable notice" for purposes of this section shall not be deemed to require more than 60 calendar days notice before commencement of efforts by the City to effect cover or a cure except upon written agreement of the Parties. 16. El\TIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire agreement and the understanding between the parties. and supercedes any prior agreements and understandings relating to the subject manner of this Agreement. This Agreement may be modified or amended only by a written instrument executed by all parties to this Agreement. i/I ii' /1/ III 20 III 21 'I' '" 22 23 24 III 25 26 27 28 Exhibit "A" -6- VENDOR SERVICE AGREEMENT FAlRVIEW FORD SALES INC. 1 2 3 4 5 6 7 8 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day and date set forth below. ,2009 Dated: 9 Dated ,2009 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Approved as to Form: By: James F. Penman, City Attorney VE~l)OR By: Its: CITY OF SA:t\ BER-"iARDINO By: City Manager Exhibit "A" -7- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VENDOR SERVICE AGREEMENT This Vendor Service Agreement is entered into this 20th day of April 2009, by and between Fairview Ford ("VENDOR") and the City of San Bemardino ("CITY" or "Sal1 Bemardino"). WITC'lESSETH: WHEREAS, the Mayor and Common Council have detemlined that it is in the best interest of the CITY to contract for the purchase of twenty-eight (28) Year 2009 Ford Crown Victoria Police Interceptors; and WHEREAS, the City of San Bemardino has detemlined that vendor possesses the professional skills and ability to provide said services for the City; NOW, THEREFORE, the parties hereto agree as follows: 1. SCOPE OF SERVICES. For the remuneration stipulated in paragraph 2, San Bemardino hereby engages the services of VENDOR to provide those products and services as set forth in its proposal dated Febmary 26, 2009, attached hereto, marked Attachment '"I" and incorporated herein by this reference as fully as though set forth at length. 2, COMPENSATION AND EXPENSES. a. For the services delineated above, the CITY, upon presentation of an invoice, shall pay the VENDOR up to the amount of 5753,875.36 to provide and perfoml those products and services described in Section I above. b. No other expenditures made by VE"-<TIOR shall be reimbursed by CITY. 3. TER..I\I. The term of this agreement shall be for a period of one (l) year to April 19, 2009. -1- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 This Agreement may be terminated at any time by thirty (30) days prior written notice by either party. The terms of this Agreement shall remain in force unless amended by written agreement of the parties executed on or before date of expiration of current tenn of the agreement. 4. INDEMNITY. Vendor agrees to and shall indemnify and hold the City. its elected officials. employees. agents or representatives, free and hannless from all claims, actions, damages and liabilities of any kind and nature arising from bodily injury, including death, or property damage, based or asscl1ed upon any or alleged act or omission of Vendor, its employees, agents, or subcontractors, relating to or in any way connected with the accomplishment of the work or performance of service under this Agreement, unless the bodily injury or property damage was actually caused by the sole negligence of the City, its elected officials, employees, agents or representatives. As part of the foregoing indenmity, Vendor agrees to protect and defend at its own expense, including attorney's fees the City, its elected officials, employees, agents or representatives from any and all legal actions based upon such actual or alleged acts or 18 omIssIons. Vendor hereby waives any and all rights to any types of express or implied 19 20 21 22 23 24 25 26 27 28 indemnity against the City, its elected officials, employees, agents or representatives, WIth respect to third party claims against the Vendor relating to or in any way connected with the accomplishment of the work or performance of services under this Agreement. 5. INSURA1"lCE. While not restricting or limiting the foregoing, during the tern1 of this Agreement. VENDOR shall maintain in effect policies of comprehensive public, general and automobile Iiabilitv insurance, in the amount of $1,000,000.00 combined single limit. and statutorv p '- w. worker's compensation coverage, and shall file copies of said policies with the CITY's Risk -2- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an additional named insured in each policy of insurance provided hereunder. The Certificate of Insurance furnished to the CITY shall require the insurer to notify CITY of any change or termination in the policy. Insurer shall give CITY 30 days notice prior to enactment and any change or termination of policy. 6. NON-DISCRIMINATION. In the performance of this Agreement and in the hiring and recruitment of employees. VENDOR shall not engage in, nor permit its officers, employees or agents to engage in. discrimination in employment of persons because of their race, religion. color, national origin, ancestry, age, mental or physical disability, medical conditions. marital status, sexual gender or sexual orientation, or any other status protected by law, except as permitted pursuant to Section 12940 of the California Government Code. 7. INDEPENDENT CONTRACTOR. VENDOR shall perform work tasks provided by this Agreement, but for all intents and purposes VENDOR shall be an independent contractor and not an agent or employee of the CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of Income Tax, Social Security, State Disability Insurance Compensation, Unemployment Compensation, and other payroll deductions for VENDOR and its officers, agents, and employees, and all business licenses, if any are required, in cOlmection with the services to be performed hereunder. 8. BUSINESS REGISTRATIOl'\ CERTIFICATE AND OTHER REQUIREMENTS. VENDOR warrants that it possesses or shall obtain, and maintain a business registration certificate pursuant to Chapter 5 of the Municipal Code, and any other license, pemlits. , -~- 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 qualifications, insurance and approval of whatever nature that are legally required ofVE'\l)OR 2 to practice its business or profession. 3 9. 4 5 NOTICES. Any notices to be given pursuant to this Agreement shall be deposited with the United States Postal Service, postage prepaid and addressed as follows: TO THE CITY: Public Services Director 300 North "D" Street San Bernardino, CA 92418 Telephone: (909) 384-5140 TO THE VENDOR: Fairview Ford Sales Inc. 808 West 2nd Street San Bernardino. CA 92412-5516 Telephone: (909) 386-0281 Attn: Todd Eff 10. ATTORNEYS' FEES. In the event that litigation is brought by any party in connection with this Agreement. the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of its rights or remedies hereunder or the enforcement of any of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and members of his office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' fees" for the purposes of this paragraph. 11. ASSIGNMENT. VENDOR shall not voluntarily or by operation of law assign, transfer. sublet or encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void and shall constitute a breach of this Agreement and cause for the termination of this -4- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Agreement. Regardless of CITY's consent, no subletting or assignment shall release \T\TIOR of VEl'.'DOR's obligation to perform all other obligations to be perforn1ed by VE'\DOR hereunder for the term of this Agreement. 12. VENUE. The parties hereto agree that all actions or proceedings arising in connection with this Agreement shall be tried and litigated either in the State courts located in the Countv of San - - . Bernardino, State of California or the U.S. District Court for the Central District of California. Riverside Division. The aforementioned choice of venue is intended by the parties to be the mandatory and not permissive in nature. 13. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective heirs. representatives, successors, and assigns. 17 15. 18 19 WARRANTY. Vendor expressly warrants that all products and services supplied to City by Vendor under this Agreement shall conform to the specifications, drawings or other description upon 20 21 22 23 24 25 26 27 28 which this PlJRSHASE is based, shall be fit and sufficient for the purpose intended, merchantable, of good material and workmanship, free from defects and free and clean of all liens or encumbrances. Inspection, testing, acceptance or use of the goods by the City shall not affect Vendor's obligations under this warranty, and such shall survive inspection, testing, acceptance and use. Vendor agrees to replace or correct promptly defects of any goods or services not conforming to the foregoing warranty without expense to the City. when notified of such non-conformity by City. If Vendor fails to conect the defects in or replace nOIl- -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 conforming goods or services promptly, City may, after reasonable notice to VendoL make such corrections or effect cover, or cure. at Vendor's expense. "Reasonable notice" for purposes of this section shall not be deemed to require more than 60 calendar days notice before commencement of efforts by the City to effect cover ora cure except upon written agreement of the Parties. 16. E'\'TIRE AGREEMENT; MODIFICATIO:\'. This Agreement constitutes the entire agreement and the understanding between the parties, and supercedes any prior agreements and understandings relating to the subject manner of this Agreement. This Agreement may be modified or amended only by a written instrument executed by all parties to this Agreement. i/,/ /1/ /l/ '/ III III 21 /1/ 22 23 24 III 25 26 27 III 28 -6- 1 2 3 4 5 6 7 8 VENDOR SERVICE AGREEMEl\'T F AIRVIEW FORD SALES INC. IN WITNESS THEREOF. the parties hereto have executed this Agreement on the day and date set forth below. ,1009 Dated: 9 Dated .2009 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Approved as to Form: ~ By: ~ fa ( / VENDOR By: Its: CITY OF SAN BERl'\'ARDINO By: City Manager -7- 03/13/2009 10:52 9093850292 VAL EFF Attachment "1" r'A~c. ti.:::: @ FAIRVIEW FORD FLEET &: TRUCK CENTER 808 W. %ad SrREET P.O. Box 5516 SAN BERNARDINO. CA. !n4U (909) 386-0281 or FlU: (909) 386-0292 -> VEHICLE OIlDEI\ CONFIIOO\TION 02/26/09 15:51:20 Dealer: ....1156 paqe: 1 of 2 Price Level: 920 Order No: 0000 Priority: Ord Code: 730A Cast/FIt Name: RETAIL p71 POLICE INTERCtP $27275 A: M6640A B: H6373L C: n CLTH BUCKETS/RR N CHARCOAL BLACK 730A ORDER CODt .llUJ\L I!:XlIAUST .17" STEEL SPARE .!ll\NUAL AIR CCIiD .tNG IDLE METER .4.6L OHC FFV V8 . ELEC ADD TRANS . P235/55R17 BS" Cl\L. BOARO FEES l4T TRtlNJ< PACK FRT LICENSE BKT 99V 440 TCl => 2009 CROWN VICTORIA Ord FIN: QC414 Order Type: 58 CITY OF SB PO Number: (65) 175 177 21A 423 435 HORN/SIREN PRtP SILICONE HOSES PIIR DRIVER SEAT CAL EM NOT REaO KEY CODE 1294X RETAIL $40 320 380 50 TOTAL BASE AND OPTIONS TOTAL DSO/SPO OPTIONS TOTAL 32155 907 33062 NC NC NC NC 190 NC VEHICLE OIUlER CONFllOO\TION 02/26/09 15:51:27 Dealer: ....1156 paqe: 2 of 2 Price Level: 920 Order No: Ord Code: 2009 CROWN VICTORIA Ord FIN: OC414 CIn OF SB Order Type: 5B PO NUlIlber: 0000 Priority: 730A cust/Flt Name: RETAIL RETAIL 478 C/Ll\KPS DISABLE $20 SP FLT ACCT CR 5a DUAL SPOT Ll\MPS 340 4 U.S. GIlL GI\S 53M NOISE SUPPRESS 95 B4A NET INV FLT OPT NC 61H DECKLD REt n/D 60 PRICED DORA NC 63B SMOKERS PACI<l\GE 10 DEST AND DELIV 875 67!>. RR DR IlND lNOP 25 7€A . BLACK BtlMPERS NC TOTAL BASE AND OPTIONS 32155 794 PRICE CONCESSI' TOTAL DSO/SPO OPTIONS 907 90B LR/M PANELS 2485 TOTAL 33062 936 Cl\L SEI\ VEH EXP NC 948 RR WINDOlf OEL 25 968 FRT MLDG UNINST 30 DSO/SPO OPTIONS SPZ13 PAINT CIIl\RGE 907 SP DLR ACCT ADJ ~3/13/2~~~ l~:~" ':ItJ':l.:H:::IbtJL':lL ",..,1... L<' @ 3-13-09 Attachment "1" FAIRVISW FORD - RETAIL - work Sheet ;;;=======~:;::=====~=:..;;;===~==..;========s.~=======s..;========:========:=====~= CUstomer: Home Ph#: Work Ph#: Salespsn: =============a==========_:..=========CC==========..==========:=========:=========~== Stock #: <NEW> Purchase: Trade-In: N/A Bank Price 24,693.00 Aceessories .00 9% Sales Tax 2,222. J7 Service Agreement .00 casn price 26,915.37 OMV .00 Tire Fee 8.75 InBurance PremiumB .00 Total Purchase 26,924.12 Trade-In .00 LesS pay-Off .00 Net. Trade-In .00 Deferred Down .00 Amount !'ai-a Now .00 Total oownpayment .00 Amount Financed 26,924.12 Gt:.H . CUSTOMER'S ACCEPTANCE Exhibit "B" MASTER EQUlPME!,;T LEASE/PURCHASE AGREEMENT This Master Equipment Lease/Purchase Agreement (the "Agreement'') dated as of Arpl 30, 2009, and entered into between Bank of America, National Association, a national bankiI\g association ("Lessor "), and City of San Bernardino, a body corporate and politic existing undf the laws of the State of California ("Lessee "). ' WIT!';ESSETH: WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule prevail; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein; and WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement and the Schedules hereto for the purposes set forth herein; NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as foJlows: ARTICLE I Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Acquisition Amount" means the amount specified in each Lease and represented by Lessee to be sufficient to acquire the Equipment listed in such Lease. "Acquisition Fund" means, wIth respect to any Lease, the fund established and held by the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any. "Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund and Account Control Agreement, substantially in the form of Exhibit A attached hereto, in form and substance acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and administered. "Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any Acquisition Fund lH~reement, and its successors and assigns. - - #765674vl (BAPCClCA Abatement Lease Template) ICA Abatement] "Acquisition Period" means, with respect to each Lease, that period stated in the Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be expended on Equipment Costs. "Agreement" means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to the Agreement pursuant to Section 13.05. "Code" means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder. "Commencement Date" means, for each Lease, the date when Lessee's obligation to pay rent commences under such Lease, which date shall be the earlier of (i) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, and (ii) the date on which sufficient moneys to purchase the Equipment listed in such Lease are deposited for that purpose with an Acquisition Fund Custodian. "Contract Rate" means the rate identified as such in the applicable Schedule. "Equipment" means the property listed in each of the Leases and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. "Equipment Costs" means the total cost of the Equipment listed in each Lease, including soft costs such as freight, installation and taxes paid up front by Lessor and all capitalizable consulting and training fees approved by Lessor. legal fees, financing costs, and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set froth in each Lease, and otherwise incurred in connection with the financing provided by the lease-purchase of the Equipment as provided in each Lease; provided that (i) any such soft costs on a cumulative basis shall not exceed a percentage of the Maximum Equipment Cost approved by Lessor and (ii) in no event shall capitalizable delivery charges, installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor's prior consent "Event of Default" means an Event of Default described in Section 12.01. "Lease" means a Schedule and the terms of this Agreement which are incorporated by reference into such Schedule. Each Schedule shall constitute a separate and independent Lease. "Lease Proceeds" means, with respect to each Lease, the total amount of money to be paid by Lessor to Vendor. "Lease Term" for each Lease means the Original Term and all Renewal Terms therein provided and for this Agreement means the period fr~m the date hereof until this Agreement is terminated.. #765674vl (BAPCC/CA Abatement Lease Template) 2 "Lessee" means the entity referred to as Lessee in the first paragraph of this Agreement. "Lessor" means (a) the entity referred to as Lessor in the first paragraph of this Agreement or (b) any assignee or transferee of any right, title or interest of Lessor in and to the Equipment under a Lease or any Lease (including Rental Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform under a Lease. "Material Adverse Change" means (prior to the Utilization Period Expiration, a downgrade in Lessee's external debt rating of two or more sub grades by either Moody's lnvestors Service, lne.. or Standard & Poor's Ratings Group or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee's credit rating to be below investment grade, and (be) thereafter, any change in Lessee's creditworthiness that could have a material adverse effect on (i) the financial condition or operation of Lessee [and its subsidiaries taken as a whole], or (ii) Lessee's ability to perform its obligations under this Agreement or any Lease. "Maximum Equipment Cost" means the cumulative amount specified in the latest Schedule executed under this Agreement. "Original Term" means the period from the Commencement Date for each Lease until the end of the fiscal year of Lessee in effect at such Commencement Date. "Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease. "Renewal Terms" means the renewal terms of each Lease, each having a duration of one year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable thereto. "Rental Payments" means the basic rental payments payable by Lessee under each Lease pursuant to Section 4.01, in each case consisting of a principal component and an interest component. "Schedule" means each separately numbered Schedule of Property substantially in the form of Exhibit B-1 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit A-2 hereto. "State" means the State of California. "Utilization Period" means the date, WIth respect to each Lease not funded under an Acquisition Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the Equipment under such Lease as indicated in Section 3 .04(b) "Vendor" means the manufacturer or supplier of the Equipment or any other person as weil as the agents or dealers of the manufacturer or supplier fTOm whom Lessor arranged Lessee's acquisition and financing of the EqUIpment pursuant to the applicable Lease. #'765674vl (BA.PCC/CA Abatement Lease Template) 3 ARTICLE II Section 2.01. Representations and Covenants oj Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows: (a) Lessee is a state or a political subdivision thereof within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and each Lease and the transactions contemplated hereby and to perform all of its obligations hereunder and under each Lease. (b) Lessee has duly authorized the execution and delivery of this Agreement and each Lease by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability ofthis Agreement and each Lease. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (e) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and each Lease and the acquisition by Lessee of the Equipment as provided in each Lease. (f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential goverrunental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under each Lease. (g) Lessee has kept and throughout the Lease Term of any Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (I) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments to the financial statements) within 180 days of its fiscal end, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) its annual budget for the following fiscal year when approved but not later than 30 days prior to its current fiscal year end. The financial statements described in subsection (i) shall be accompanied by an unqualified opinion of Lessees's audItor. Credit information relating tot Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assign. (h) Lessee has an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the #765674vl (BAPCCICA Abatement Lease Template) 4 Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Lease Term to such item. (i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in allY activity canied on by any person other than a state or local governmental unit or payment in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity canied on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Equipment Cost for the Equipment will be used, directly or indirectly, to make or fmance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. Ul There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee's financial condition or impairs its ability to perform its obligation hereunder. Lessee will, at its expense, maintain its legal existence in good standing and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor's security interest in the Equipment and Lessor's rights and benefits under this Lease. ARTICLE III Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed. Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to continue the Lease Term of each Lease and to pay the Original Term and all Renewal Terms and to pay the Rental Payments thereunder. Lessee affirms that sufficient funds are available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, to #765674\'1 (BAPCCICA Abatement Lease Template) 5 to have such portion of the budget or appropriation request approved and to exhaust all available reviews and .appeals in the event such portion of the budget or appropriation request is not approved. Section 3.03. Abatement. During any period in which, by reason of material damage or destruction or taking under the power of eminent domain (or sale to any entity threatening the use of such power) or material title defect with respect to any Equipment there is substantial interference with the use and possession by Lessee of such Equipment, the rent applicable to such Equipment shall be abated proportionately in whole or in part. Lessee shall immediately notifY Lessor upon the occurrence of any event causing substantial interference with Lessee's use and possession of any Equipment, and such notice shall be provided prior to the abatement of any rent. The amount of abatement shall be such that the remaining rental obligation for each rental period represents fair consideration for the use and possession of the portions of the Equipment that are not affected by such interference. Such abatement shall commence on the date that Lessee's use and possession of the affected Equipment is restricted because of such interference and end on the earlier of (i) the date on which the use and possession thereof are restored to Lessee, or (ii) the date on which Lessee either (x) replaces the affected Equipment or (y) uses the proceeds of insurance or condemnation award to pay the applicable Purchase Price therefor. Notwithstanding any such interference with Lessee's use and possession of a portion of the Equipment, this Lease shall continue in full force and effect with respect to any remaining Equipment. Lessee waives the benefits of Civil Code Sections 1932 and any and all other rights to terminate this Lease by virtue of any interference with the use and possession of any Equipment. Section 3.04. Conditions to Lessor's Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to Lessor the following: (i) A fully completed Schedule, executed by Lessee; (ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the Vendor upon execution of the Lease; (iii) A Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor; (iv) A certified copy of a resolution, ordinance or other official action of Lessee's governing body authorizing the execution and delivery of this Lease and perfonnance by Lessee of its obligations hereunder; (v) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor; (vi) Evidence of insurance as required by Section 7.02 hereof: #765674vl (BAPCClCA Abatement Lease Template) 6 (vii) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02; (viii) A copy of a fully completed and executed Form 8038; (ix) If any Equipment units are motor vehicles, properly competed certificates of title for such vehicles; and (x) Such other items, if any, as are set forth in such Lease or are reasonably required by Lessor. (b) In addition, the performance by Lessor of any of its obligations pursuant to any Lease shall be subject to: (i) no material adverse change in the financial condition of Lessee since the date of this Lease, (ii) no Event of Default having occurred, and (iii) if no Acquisition Fund has been established, the Equipment must be accepted by Lessee no later than date listed as the Utilization Period Expiration in the applicable Schedule. (c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing body, will reimburse Lessee for the prior payment of any such Acquisition Amounts by Lessee to the Vendor, upon receipt of the documents described in Sections 5.01(a) and (b); or if an Acquisition Fund has been established pursuant to an Acquisition Fund Agreement. Lessor will deposit the Acquisition lUllount for Equipment described in the Schedule with the Acquisition Fund Custodian. (d) This Agreement is not a commitment by Lessor to enter into any Lease not currently In existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into any proposed Lease shall be a decision solely within Lessor's discretion. (e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease. Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Lease. Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other mallers related to Lessee. ARTICLE IV Section 4 01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay Rental Payments, in lawful money of the United States of l\.l11erica, to Lessor on the dates and in such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental Payment not paid on the date such payment is due at the rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less, from such date. Lessee shall not permit the federal government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest payments as more fully detailed on each Schedule, the interest on #765674vl (BAPCC/CA Abatement Lease Template) 7 Schedule, the interest on which begins to accrue as of the Commencement Date for each such Schedule. Section 4.02. interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the Lease Term. Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under eaeh Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee. Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for anv reason, including without limitation any failure of the Equipment, after it has been accepted by lessee, any defects, malfunctions, breakdowns or infirmities in the equipment or any accident, condemnation or unforeseen circumstances. Lessee's obligations to make Rental Payments or pay other amounts hereunder shall not be abated on account of obsolescence or failure of the Equipment to perform as desired. Section 4.05. Tax Covenant. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes. Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component shall be at a Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease. For purposes of this Section, "Event of Taxability" means a determination that the interest component is includible for federal income tax purposes in the gross income of the owner thereof due to Lessee's action or failure to take any action. Section 4.07. Mandatory Prepayment. If the Lease Proceeds are depos1 ted into an Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition Period and not applied to Equipment Costs, shall be applied, in Lessor's discretion based upon the amount remaining in such Fund, on the next Rental Payment date to either: (i) all or a portion of #765674vl (SAPeClCA Abatement Lease Template) 8 of the next Rental Payment and if such amount is in excess of the next Rental Payment then, any remaining balance shall be applied to all or a portion of the next succeeding Rental Payments until fully applied; or (ii) as prepayment to the remaining princIpal balance owing under the Schedule m the inverse order of maturity. ARTICLE V Section 5.01. Delivery, InstallatIOn and A cceptance of Equipment. (a) Lessee shall order the Equipment cause the Equipment to be delivered and installed at the location specified in the Leases and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. When the Equipment listed in any Lease has been delivered and mstalled, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an acceptance certificate in the form attached hereto as Exhibit E. (b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of an Acceptance Certificate from Lessee. prepare a Schedule of Property and Rental Payment Schedule in the forms attached hereto as Exhibits B-1 and B-2. Lessee shall execute and deliver such Schedules to Lessor within 5 business days of receipt Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Term. Section 5.03. Location: Inspection. Once installed, no item of the Equipment will be relocated from the base location specified for it in the Lease on which such item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, m violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment In addition, Lessee agrees to comply in all respects with all applicable laws. regulations and rulings of any legislative, executive, admmistrative, or Judicial body: provided that Lcssee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest (including the reversionary interest) of Lessor in and to the Equipment or its interest or mum under the Lease. Lessee agrees that it will maintain, preserve. and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to rectify the Equipment as #7656i4vl (BAPCCiCA Abatement Lease Template) 9 the Equipment as eligible for manufacturer's maintenance upon the return of the Equipment to Lessor as provided for herein. Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs. parts. accessories. equipment and devices furnished. affixed to or installed on any Equipment. excluding temporary replacements. shall thereupon become subject to the interest of Lessor therein. ARTICLE "1 Section 6.01. Tit/e to the Equipment. During each Lease Term, and so long as Lessee is not in default under Article XII hereof all right title and interest in and to each item of the Equipment shall be vested in Lessee im:nediatcly ~pon its acceptance of each item of Equipment, subject to the terms and conditions of the applicable Lease Lessee shall at all times protect and defend, at its own cost and expense, its title in and to the Equipment from and against all claims, liens, and legal processes of its creditors, and keep all Equipment free and clear of all such claims, liens, and processes. Upon the occurrence of an Event of Default or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination Lessee shall execute and deliver to Lessor such , documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section l2.02. Upon purchase of the Equipment under a Lease by Lessee pursuant to Section 10.01, Lessor's security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security interest in the Equipment subject to the related Lease. Section 6.02. Security Interest. To secure the payment of all of Less see's obligations under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest constituting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and investments held from time to time in the Acquisition Fund and (c) any and all proceeds of any of the foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assigrunent, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest in the Equipment, the Acquisition Fund and the proceeds thereof. Section 6.03. Persona/Property. The Equipmcnt is and will remam personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. #765674vl (BAPCClCA Abatement Lease Template) 10 ARTICLE VII Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies. liens, and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes afld governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charge~ that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during each Lease Term. Section 7.02. Insurance. Lessee covenants that it is an authorized self-insured public entity for purposes of general liability, automobile liability, worker's compensation and property coverage including but not limited to rental interruption coverage in an amount which shall cover Rental Payments for no less than 24 months in the event Lessee exercises it rights to abate any Rental Payments or portions thereof pursuant to Section 3.03 of the Agreement and warrants that through its program of self-insurance, it has adequate coverage or resources to protect against liabilities arising out of the terms, conditions and obligations of this Agreement. Lessee shall furnish to Lessor evidence of such self-insurance coverage through each Lease Term. Lessee shall not cancel or modify such self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancelled or modification. Section 7.03 Risk of Loss. Subject to Section 3.03, whether or not covered by insurance of self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injUry or damage to any person or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest receive) arising out of or as s result of (a) entering into of this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, conditions, purchase, delivery, acceptance, rejection, storage or return of any item the Equipment, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee in connection with a Lease or any material misrepresentation provided by Lessee in connection with a Lease. The provisions of this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under all Leases or the termination of the Lease Term under Lease for any reason. #765674......1 fBAPCCiCA Abatement Lease Template) 11 Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less.. ARTICLE VIII Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any goverrunental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. If Lessee elects to replace any item of the Equipment (the "Replaced Equipment ") pursuant to this Section, the replacement equipment (the "Replacement Equipment") shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. Lessor shall receive a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Lease. Lessee shall complete the documentation of Replacement Equipment on or before the next Rent Payment date after the occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the damaged equipment. For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in thc collection thereof. Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement #765674v1 (BAPCClCA Abaternt:nt Lease Template) 12 improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) payor cause to be paid to Lessor the amount of the then applicable Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall tenninate and Lessor's interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing such Equipment and such other Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV. ARTICLE IX Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of the Equipment shall be on an "as is" basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item, product or service provided for in this Agreement Lease or any Lease. Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during each Lease Term, so long as Lessee shall not be in default under the related Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely payments under a Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties by Lessor of the Equipment. ARTICLE X Section 10.01. Purchase Option. Lessee shall have the option to purchase all of the Equipment listed in a Lease, upon giving written notice to Lessor at least 30, but not more than 120, days before the date of purchase, at the following times and upon the following terms: (a) From and after the date specified in the related Schedule (the "Purchase Option Commencement Date "), on the Rental Payment dates specified in each Lease, upon payment in full of the Rental Payments then due under such Lease plus the then applicable Purchase Price, which may include a prepayment premium on the unpaid balance as set forth in the applicable Schedule; or (b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee's notice to #765674vl (BAPCC/CA Abatement Lease Template) 13 Lessor of its exercise of the purchase option upon payment in full to Lessor of the Rental Payments then due under such Lease plus the then applicable Purchase Price; or (c) Upon the expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other amounts then owing under the Lease, and the payment of $1.00 to Lessor. After payment of the applicable Purchase Price, Lessee will own the related Equipment, and Lessor's right, title and interests in and to such Equipment will be transferred and terminated in accordance with Section 6.01. ARTICLE XI Section 11.01. Assignment by Lessor. (a) Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under any and all of the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the consent of Lessee; provided, that any such assignment transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made in a manner that conforms to any applicable State law. Nothing in this Section 11.01 shall be construed, however, to prevent Lessor from executing any such assignment, transfer or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust; provided such certificates are sold only on a private placement basis (and not pursuant to any "public offering") to a purchaser(s) who represent that (i) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such purchaser understands neither the Lease nor certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an "accredited investor" within the meaning of Regulations D under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Rule 144A, and l(iv) it is the intention of such purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933; provided further, that in any event, Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with respect to matters arising under a Lease with or to more than one individual on entity. (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by thIs Section 11.01 shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, trust certificates or partnership interests with respect to the Rental Payment payable under a Lease, it shall thereafter be sufficient that Lessee receives notices of the name and address of the bank or trust company as trustree or paying agent. During each Lease Term, Lessee shall keep, or cause to be kept. a complete and accurate record of all such assignments in form necessary to comply with Sectopm 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments #765674\'1 (B.A...PCCICA Abatement Lease Template) 14 all payments to the assignee or assi,,'I1ees designated in such re",;ster. Lessee shall not have the nght to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor's security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Lease, but such optton does not permit the assignment of less than all of Lessor's interests in the Equipment listed in a single Lease. (c) If Lessor notifies Lessee of its intent to assign the Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit F attached to this Lease within five (5) business days after its receipt of such request. Secrion 11.02. Assignment and Subleasing by Lessee. None of Lessee's right, title, and interest in, to and under any Lease or any portion of the Equipment may be assigned or encum- bered by Lessee for any reason, ARTICLE XII Section 12 OJ. Events of Default Defined, Any of the following events shall constitute an "Event of Default" under a Lease: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under any Lease at the time specified herein; (b) Failure by Lessee to observe and perform any covenant. condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writmg to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c) Any statement, representation or warranty made by Lessee in or pursuant to any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made: (d) lillY default occurs under any other agreement with Bank of America, N.A. and its affiliates for borrowmg money, lease financmg of property or otherwise receiving credit under which Lessee is an obligor under which there is outstanding, owing or committed an aggregate amount of a least 10% of Lessee's aggregate current long- and short-term indebtedness, if such default consists of (i) the failure to pay any indebtedncss when due or (ii) the failure to perform any other obligation thereunder and gives the holder of the indebtedness the right to accelerate the indebtedness; - - - #765674vl (BAPCClCA Abatement Lease Tlwplate) 15 (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or lIquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing Its inabilIty generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary pel1tion in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (I) An order, judgment or decree shall be entered by any court of competent jurisdiction, approvmg a petition or appointing a receiver, trustee, custodian or liquidator or Lessee or of all or a substantial part of the assets of Lessee, in each case without its applIcation, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days. Section 12.02. Remedies on DefilUlt. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating the Lease Term under such Lease, Lessor may enter the premises where the Equipment listed in such Lease is located and retake possession of such Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specifY, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee lIable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment listed therein that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under such Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees), subject. however, to the provisions of Section 3.03. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other lIabilities under any other Lease or the Equipment listed therein; (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease or as a secured party in any or all of the Equipment subject to such Lease; and (d) by action pursuant to the California Code of Civil Procedure, or as otherwise provided by law, obtain the issuance of a writ of mandamus enforcing, for the entire balance of the remaining Lease Term, the duty of Lessee to appropriate and take all other administrative steps necessary for the payment of rents, and other amounts due hereunder. #765674vl (BAPCCICA Abatement Lease Template) ] 6 Seclion 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice as may be required in this Article. Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attorney's fees), shall be applied as follows: (a) If such remedy is exercised solely with respect to a single Lease, Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such Equipment. (b) If such remedy is exercised with respect to more than one Lease, Equipment listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro rata. ARTICLE XlII Section 13.01. Notices. All notices, certificates or other communications under any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee. Section 13.02. Binding Effect. Each Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 13.03. Severabilitv. In the event any provision of any Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof Secrion 13.04. Amendmenrs, Changes and Modlficarions. This Agrecment and each Lcase may only be amended by Lessor and Lessee in writing. Section 13.05. Execution in Counrerparrs. This Agreement and each Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. #765674vl (BAPCClCA Abatement Lease Template) 17 See/ion 13.06. Applicable Law. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the Slate. See/ion 13.08. Cap/ions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written. LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: City of San Bernardino 300 North D Street San Bernardino, CA 92418 ~itESJv~~~+J;.~0 By Title (Seal) Attest: By Title #765674vl (B.AJ>CCICA Abatement Lease Template) 18 EXHIBIT A SCHEDULE OF PROPERTY No. Re: Master Equipment LeaselPurchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and , as Lessee 1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment LeaselPurehase Agreement (the "Master Equipment Lease "). 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Quantity Description Serial No. Model No. Location 3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-I. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier. (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Term Estate in the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, \varranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. #765674v] (BAPCClCA Abatement Lease Template) A-I 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is S , of which $ IS for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period TIle Acquisition Period applicable to tliis Schedule shall end on December 31,2009. 8. Lease Term. The Lease Term shall consist of _ months, ending on 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is 10. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price, which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. 11. follows: Registration. Any Equipment that is a motor vehicle is to be registered and titled as (a) Registered Owner: City of San Bernardino (b) Lienholder: Bank of America, N. A. 2059 Northlake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #765674vl (BAPCC/CA Abatement Lease Template) A-2 Dated: LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: By DO NOT EXECUTE Title By Title (Seal) Attest: By Title Counterpart No. _ of _ manually executed and serially numbered counterparts. To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No.1. #765674vl (BAPCC/CA Abatement Lease Template) A-3 EXHIBIT A-I RENTAL PAYIIIENT SCHEDULE Rental Rental Interest Principal Purchase Pajm1ent Pajm1ent Portion Portion Price Date Amount . Prepajm1ent Premium for purposes of Section 10.01(a) is 0%. For purposes of this Lease, "Taxable Rate, " with respect to the interest component of Rental Pajm1ents, means an annual rate of interest equal to _ %. LESSEE: By DO NOT EXECUTE Title #765674vl (BAPCC/CA Abatement Lease Template) A-l-l EXHIBIT B ACCEPTANCE CERTIFICATE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No. , dated to Master Equipment LeaselPurchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and , as Lessee. Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement "), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: l. All of the Equipment (as such term is defined in the Agreement) listed in the above- referenced Schedule of Property (the "Schedule ") has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection andlor testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: LESSEE: By DO NOT EXECUTE Title (Seal) #765674vl (BAPCCICA Abatement Lease Tcmplate) B.I EXIIIBIT C CERTIFICATE TIle undersigned, a duly elected and actmg ("Lessee ") certifies as follows: Secretary of A. The following listed persons are duly elected and acting officials of Lessee (the "OjJicials '') in the capacity set forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof; B. The Officials arc duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements ") by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By DO NOT EXECUTE Title (The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) #765674vl (BAPCC/CA Abatement Lease Template) C-I EXHIIlIT D OPINION OF COUNSEL TO LESSEE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No. , dated to Master Equipment Lease/Purchase Agreement, dated as of , between Bank of America, National Association, as Lessor, and . as Lessee Ladies and Gentlemen: As legal counsel to ("Lessee "), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of and Exhibits thereto by and between Bank of America, National Association ("Lessor ") and Lessee (the "Agreement "), [and] an executed counterpart of Schedule of Property No. , dated , by and between Lessor and Lessee (the "Schedule ''), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment "), [and an executed counterpart of that certain Acquisition Fund and Account Control Agreement dated by and among Lessee, Lessor and the Custodian named therein (the "Acquisition Fund Agreement")] (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease". [The Lease and the Acquisition Fund Agreement are referred to herein collectively as the "Lease Documents"]. Based on the foregoing, I am of the following opinions: I. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) police powerJ(is a political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under thc Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Codel; 2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Lease [Documents] and to perform its obligations under the Lease [Documents] ; #765674vl (BAPCClCA Abatement Lease Template) E-I 3. The Lease [Documents] has [have] been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Lease [Documents are] [is] a valid and binding obligation of Lessee enforceable in accordance with its [their] terms; 4. The authonzation, approval, execution and delivery of the Lease [Documents] and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and 5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Lease Documents or the interest of Lessor or its assigns, as the case may be, in the Equipment thereunder. [6. The portion of rentals designated as and constituting interest paid by Lessee and received by Lessor is excluded from Lessor's gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item for purposes of the federal individual or corporate alternative minimum taxes.] All capitalized terms herein shall have the same meanings as in the Lease unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Printed Name Firm Address Telephone No. Signature DO NOT EXECUTE Dated #337849v4 leA Abatement Lease Template) E-2 SCHEDULE OF PROPERTY NO.2 Re: Master Equipment Lease/Purchase Agreement, dated as of April 30, 2009, between Bank of America, National Association, as Lessor, and City of San Bernardino, as Lessee 1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the "Master Equipment Lease 'j. 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Twenty-eight (28) Ford Crown Victoria Police Interceptors 3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-I. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier. (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Term Estate in the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $753,875.36, of which #765674vl (BAPCClCA Abatement Lease Template) A-I $0.00 is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end on December 31, 2009. 8. 30,2012. Lease Term. The Lease Term shall consist of 36 months, ending on April 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is April 30, 2012. IO. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price, which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. II. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows: (a) Registered Owner: City of San Bernardino (b) Lienholder: Bank of America, N. A. 2059 North1ake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #765674vl (BAPCC/CA Abatement Lease Template) A-2 Dated: LESSOR: Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 LESSEE: City of San Bernardino 300 North D Street San Bernardino, CA 92418 By~tkJ-.- /~~_,o~ PC \ ) -Rn.' K . Title : CL ( .f S ll: ~dt- By Title (Seal) Attest: By Title Counterpart No. of manually executed and serially numbered - - counterparts. To the extent that this Lease constitutes chattel paper (as defmed in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. I. #765674vl (BAPCC/CA Abatement Lease Template) A-3 EXHIBIT A-I RENTAL PAYMENT SCHEDULE Rental Payment Date Rental Payment Amount Interest Portion 3.23% Principal' Portion 4/30/2009 10/30/2009 4/30/2010 10/30/2010 4/30/2011 10/30/2011 4/30/2012 132,842.82 12,175.06 120,667.75 132,842.82 10,226.28 122,616.53 132.84282 8,246.03 124,59679 132,842.82 6,233.80 126,609.02 132,842.82 4,189.06 128,653.75 132,842.82 2,111.31 130,731.51 797,056.91 43,181.55 753,875,36 TOTAL Prepayment Premium for purposes of Section 10.01 (a) is 0%. Purchase Price 753,875.36 633,207.61 510,591.07 385,994.28 259,385.26 130,731.51 (0.00) For purposes of this Lease, "Taxable Rate," with respect to the interest component of Rental Payments, means an annual rate of interest equal to 4.6468%. LESSEE: City of San Bernardino By Title CERTIFICATE The undersigned, a duly elected and acting San Bernardino ("Lessee ") certifies as follows: Secretary of City of A. The following listed persons are duly elected and acting officials of Lessee (the "Ojficials ") in the capacity set forth opposite their respective names below and that the facsimile signatures arc true and correct as of the date hereof; B. The Oftlcials arc duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of April _, 2009, and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements ") by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By Title (The signer of this Certificate cannot be listed abovc as authorized to execute the Agreements.) #765674vl (BAPCC/CA Abatement Lease Template) C-l ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT This Acquisition Fund and Account Control Agreement (this "Agreement"), dated as of April 30, 2009, by and among Bank of America, National Association, a national banking association (hereinafter referred to as "Lessor"), City of San Bernardino, a political subdivision of the state of California (hereinafter referred to as "Lessee") and Deutsche Bank National Trust Company, a national trust company (hereinafter referred to as "Acquisition Fund Custodian"). Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as of April 30, 2009, between Lessor and Lessee (hereinafter referred to as the "Lease"), covering the acquisition and lease of certain Equipment described therein (the "Equipment"). It is a requirement of the Lease that the Equipment Cost of the Equipment (an amount not to exceed $4,393,013.00) be deposited into an escrow under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment. The parties agree as follows: I. Creation of Acquisition Fund. (a) There is hereby created a special trust fund to be known as the "City of San Bernardino 2009 Acquisition Fund" (the "Acquisition Fund") to be held in trust by the Acquisition Fund Custodian for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. (b) The Acquisition Fund Custodian shall invest and reinvest moneys on deposit in the Acquisition Fund in Qualified Investments in accordance with written instructions received from Lessee. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Acquisition Fund Custodian for the reinvestment of any maturing investment. Accordingly, neither the Acquisition Fund Custodian nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Acquisition Fund, and Lessee agrees to and does hereby release the Acquisition Fund Custodian and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the investment of the moneys on deposit in the Acquisition Fund shall be borne by the Acquisition Fund. For purposes of this agreement, "Qualified Investments" means any investments which meet the requirements of [state law citationJ. IN THE ABSENCE OF WRITTEN INSTRUCTIONS, THE ACQUISITION FUND CUSTODIAN IS HEREBY AUTHORIZED AND DIRECTED TO INVEST AND RE- INVEST ALL FUNDS ON HAND IN THE GOLDMAN SACHS FINANCIAL SQUARE (FSQ) MONEY M-',RKET FUNDS, TREASURY OBLIGATIONS, FUND#470 (AAAm! Aaa). "765408v1 lBAPCClAFA General) (c) Unless the Acquisition Fund is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of written authorization(s) from Lcssor, as is morc fully dcscribed in Section 2 hereof. If thc amounts in the Acquisition Fund are insufficient to pay such amounts, Lessce shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Acquisition Fund after December 3 I, 2009 (the "Acquisition Period") shall be applied as provided 10 Section 4 hereof. (d) The Acquisition Fund shall be terminated at the earliest of (i) the final distribution of amounts in the Acquisition Fund or (ii) written notice given by Lessor of the occurrence of a default or tcrmination of the Lease due to non-appropriation. (e) Thc Acquisition Fund Custodian may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Acquisition Fund Custodian shall not be liable in any manner for the sufficiency or correctness as to form, manncr of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Acquisition Fund Custodian, and for the disposition of the same in accordance herewith. (f) Unless the Acquisition Fund Custodian is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Acquisition Fund Custodian and hold it harmless from any and all claims, Iiabilitics, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Acquisition Fund Custodian under this agreement; and in connection therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian against any and all expenses; including reasonable attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim. (g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund Custodian shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Acquisition Fund Custodian may consult WIth counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Acquisition Fund Custodian shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any aets or omissions of any kind unless caused by its willful misconduct. #7fi5408vl (BAPCC/AFA General) 2 (i) Lessee shall reimburse the Acquisition Fund Custodian for all reasonable costs and expenses, including thosc of the Acquisition Fund Custodian's attorneys, agents and employees incurred for extra-ordinary administration of the Acquisition Fund and the performance of the Acquisition Fund Custodian's powers and duties hereunder in connection with any Event of Default under the Lease, or in connection with any dispute between Lessor and Lessee concerning the Acquisition Fund. 2. Acquisition of Property. (a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Acquisition fund. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. (b) Authorized Acquisition Fund Disbursements. Disbursements from the Acquisition Fund shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Acquisition Fund shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Acquisition Fund there shall be filed with the Acquisition Fund Custodian a requisition for such payment in the form of Disbursement Request attached hereto as Schedule I, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. Each such requisition shall be signed by an authorized representative of Lessee (an "Authorized Representative") and by Lessor, and shall be subject to the following: I. Delivery to Lessor of a certificate of Lessee to the effect that: (i) an obligation in the stated amount has been incurred by Lessee, and that the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid; (ii) the Authorized Representative has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made; (iii) such requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date of such certificate, entitled to retain; and (iv) the Equipment is insured in accordance with the Lease. 2. Delivery to Lessor of an Acceptance Certificate executed by Lessee, together with any Purchase Agreement Assignment or bill of sale and invoice therefor as required by Section 3.04 of the Lease; ti7h\40Svl (BAPCClAFA General) 3 3. The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment; 4. There shall exist no Event of Default (nor any event which, with notice or lapse of time or both, would become an Event of Default); and 5. No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Leasc. 3. Deposit to Acquisition Fund. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Lease Proceeds to be deposited in the Acquisition Fund. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Acquisition Fund. 4. Excessive Acquisition Fund. Following the final disbursement from the Acquisition Fund at the end of the Acquisition Period, or termination of the Acquisition Fund as otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the Acquisition Fund to Lessor for application to amounts owed under the Lease in accordance with Section 4.07 of the Lease. 5. Securitv Interest. The Acquisition Fund Custodian and Lessee acknowledge and agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any part thereof, is converted to investments as set forth in this agreement, such investments shall be made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest. 6. Control of Acquisition Account. In order to perfect Lessor's security interest by means of control in (i) the Acquisition Fund established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Acquisition Fund, (iii) all of Lessee's rights in respect of the Acquisition Fund, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the "Collateral"), Lessor, Lessee and Acquisition Fund Custodian further agree as follows: (a) All terms used in this Section 6 which are defined in the Commercial Code of the state of California ("Commercial Code") but are not otherwise defined herein shall have the meanings assigned to such terms in the Conunercial Code, as in effect on the date of this Agreement. (b) Acquisition Fund Custodian will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. #765408v1 (BAPCClAFA General) 4 (c) Acquisition Fund Custodian hereby represents and warrants (a) that the records of Acquisition Fund Custodian show that Lessee is the sole owner of the Collateral, (b) that Acquisition Fund Custodian has not been served with any notice of levy or rcccived any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor's claim pursuant to this Agrccmcnt, and (c) that Acquisition Fund Custodian is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Acquisition Fund Custodian is obligated to accept from Lessor under this Agreement and entitlement orders that Acquisition Fund Custodian, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Acquisition Fund Custodian will not enter into any agreement by which Acquisition Fund Custodian agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Acquisition Fund Custodian shall promptly notifY Lessor if any person requests Acquisition Fund Custodian to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph (e) and subject to Section 1 (b) hereof, Acquisition Fund Custodian may allow Lessee to effect sales, trades, transfers and exchanges of Collateral within the Acquisition Fund, but will not, without the prior written consent of Lessor, allow Lessee to withdraw any Collateral from the Acquisition Fund. Acquisition Fund Custodian acknowledges that Lessor reserves the right, by delivery of written notice to Acquisition Fund Custodian, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Acquisition Fund. Further, Acquisition Fund Custodian hereby agrees to comply with any and all written instructions delivered by Lessor to Acquisition Fund Custodian (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor's claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter. (I) Lessee hereby irrevocably authorizes Acquisition Fund Custodian to comply with all instructions and entitlement ordcrs delivered by Lessor to Acquisition Fund Custodian. (g) Acquisition Fund Custodian will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Acquisition Fund Custodian will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Acquisition Fund Custodian and Lessee hereby agree that any property held in the Acquisition Fund shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-] 02 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agrecment to which Acquisition Fund Custodian may be a party. "765408vl (BAPCC/AFA General) 5 (i) Acquisition Fund Custodian is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 7 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Acquisition Fund statements or reports issued or sent to Lessee with respect to the Acquisition Fund. 7. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This agreement may not be amended except in writing signed by all parties hereto. This agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below: If to Lessor: Bank of America, National Association 555 California Street, 4th Floor Mail Code: CA5-705-04-01 San Francisco, CA 94104 Attn: Contract Administration Fax: (415) 765-7373 If to Lessee: City of San Bernardino 300 North D Street San Bernardino, CA 92418 Attn: Mr. Michael Gomez Fax: (909) 384-5043 If to Acquisition Fund Custodian: Deutsche Bank National Trust Company 101 California Street, 46th Floor San Francisco, CA 94111 Attn: Raafat Albert Sarkis Phone: (415) 617-2801 Fax: (415)617-4270 #765408v1 (BAPCC/AFA General) 6 In Witness Whereof, the parties have executed this Acquisition Fund and Account Control Agreement as of the date first above wrillen. Bank of America, National Association, as Lessor City of San Bernardino, as Lessee Bydt,~~~~ t;~Jc TItle. I V\cU.) .'.1 +- By: Title: Deutsche Bank National Trust Company As Acquisition Fund Custodian By: Title: By: Title: #765408vl (BAPCC!AF A General) 7 SCHEDULE 1 FORM OF DISBURSEMENT REQUEST Rc: Mastcr Equipmcnt Lcase/Purchase Agreement dated as of April_, 2009, by and between Bank of America, National Association, as Lessor and City of San Bemardino, as Lessee (the "Lease") In accordance with the terms of the Acquisition Fund and Account Control Agreement, dated as of April _, 2009, (the "Acquisition Fund and Account Control Agreement") by and among Bank of America, National Association ("Lessor"), City of San Bemardino ("Lessee") and Deutsche Bank National Trust Company (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund and Account Control Agreemcnt (the "Acquisition Fund") for the following purposes. Payee's Name and Address Invoice Number Dollar Amount Purpose The undersigned hereby certifies as follows: (i) An obligation in the ,stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authorized Representative, has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease, (v) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. #765408v1 (BAPCC/AFA General) (vi) The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: CITY OF SAN BERNARDINO By: Authorized Representative Disbursement offimds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized BANK OF AMERICA, NA nONAL ASSOCIA nON as Lessor under the Lease By: Title: Vice President #765408vl (BAPCClAFA General) 2 '0= W-9 Request for Taxpayer Identification Number and Certification Give form to the requester. Do not send to the IRS. (Rev. November 2005) Department of the Treasury Internal Revenue Service N $ '" ro 0. C o . ~ 0.5 ,.,.- - - " u 02 cUi ._ c a:~ .0 . 0. II) . . <f) Name (as shown on your iocome tax return) Business name, if different from abo\'e D IndivlduW Check appropriate box: Sole proprietor o Corporation Address (number, street, and apt or suite no.) City. slate. arm ZIP code List account number(s) here (opliOna~ Taxpayer Identification Number (TIN) o Partnership 0 Other .... o Exempt from backup Withholding Requester's name and address (optional) ~ or Enter your TIN in the appropriate box. The TIN provided must match the name given on Une 1 to avoid backup withholding. For individuals, this is your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the Part I instructions on page 3. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN on page 3. Note. If the account is in more than one name, see the chart on page 4 for guidelines on whose number to enter. Certification Under penalties of perjury, I certify that: 1. The number shown on this fonn is my correct taxpayer identification number (or I am waiting for a number to be issued to me), and 2. I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to baCkup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and 3. I am a U.S_ person (including a U.S. resident alien). Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the Certification, but you must provide your correct TIN. (See the instructions on page 4.) Sign I Signature of Here u.s. person'" Date ... Purpose of Form A person who is required to file an information return with the IRS, must obtain your correct taxpayer identification number (TIN) to report, for example, income paid to you, real estate transactions, mortgage interest you paid, acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA. U.S. person. Use Form W-9 only if you are a U.S. person ~ncluding a resident alien), to provide your correct TIN to the person requesting it (the requester) and, when applicable, to: 1. Certify that the TIN you are giving is correct (or you are waiting for a number to be issued), 2. Certify that you are not subject to backup withholding, or 3. Claim exemption from backup withholding if you are a U.S. exempt payee. In 3 above, if applicable, you are also certifying that as a U.S. person, your allocable share of any partnership income from a U.S. trade or business is not subject to the withholding tax on foreign partners' share of effectively connected income. Note. If a requester gives you a form other than Form W.g to request your TIN, you must use the requester's form if it is substantially similar to this Form W.g. For federal tax purposes, you are considered a person if you are: . An individual who is a citizen or resident of the United States, . A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States, or . Any estate (other than a foreign estate) or trust. See Regulations sections 301.7701-6(a) and 7(a) for additional infonnation. Special rules for partnerships. Partnerships that conduct a trade or business in the United States are generally required to pay a withholding tax on any foreign partners' share of income from such business. Further, in certain cases where a Form W-g has not been received, a partnership is required to presume that a partner is a foreign person, and pay the withholding tax. Therefore, if you are a U.S. person that is a partner in a.partnership conducting a trade or business in the United States, provide Form W-9 to the partnership to establish your U.S. status and avoid withholding on your share of partnership income. The person who gives Form W-g to the partnership for purposes of establishing its U.S. status and avoiding withholding on its allocable share of net income from the partnership conducting a trade or business in the United States is in the following cases: . The U.S. owner of a disregarded entity and not the entity, Form W-9 (Rev. 11.2005) Cat. No 10231 X Form W-9 (Rev. 11-2005) Page 2 . The U.S. grantor or other owner of a grantor trust and not the trust, and . The U.S. trust (other than a grantor trust) and not the beneficiaries of the trust Foreign person. If you are a foreign person, do not use Form W-9. Instead, use the appropriate Form W-8 (see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities). Nonresident alien who becomes a resident alien. Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on certain types of income. However, most tax treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for certain types.of income even after the recipient has otherwise become a U.S. resident alien for tax purposes. If you are a U.S. resident alien who is relying on an exception contained in the saving clause of a tax treaty to claim an exemption from U.S. tax on certain types of income, you must attach a statement to Form W-9 that specifies the following five items: 1. The treaty country_ Generally, this must be the same treaty under which you claimed exemption from tax as a nonresident alien. 2. The treaty article addressing the income. 3. The article number (or location) in the tax treaty that contains the saving clause and its exceptions. 4. The type and amount of income that qualifies for the exemption from tax. 5. Sufficient facts to justify the exemption from tax under the terms of the treaty article. Example. Article 20 of the U.S.-China income tax treaty allows an exemption from tax for scholarship income received by a Chinese student temporarily present in the United States. Under U,S. law, this student will become a resident alien for tax purposes if his or her stay in the United States exceeds 5 calendar years. However, paragraph 2 of the first Protocol to the U.S.-China treaty (dated April 30, 1984) allows the provisions of Article 20 to continue to apply even after the Chinese student becomes a resident alien of the United States. A Chinese student who qualifies for this exception (under paragraph 2 of the first protocol) and is relying on this exception to claim an exemption from tax. on his or her scholarship or fellowShip income would attach to Form W-9 a statement that includes the information described above to support that exemption. If you are a nonresident alien or a foreign entity not subject to backup withholding, give the requester the appropriate completed Form W-8. What is backup withholding? Persons making certain payments to you must under certain conditions withhold and pay to the IRS 28% of such payments (after December 31, 2002). This is called "backup withholding." Payments that may be subject to backup withholding include interest, dividends, broker and barter exchange transactions, rents, royalties, nonemployee pay, and certain payments from fishing boat operators. Real estate transactions are not subject to backup withholding. You will not be subject to backup withholding on payments you receive if you give the requester your correct TIN. make the proper certifications, and report all your taxable interest and dividends on your tax return. Payments you receive will be subject to backup withholding if: 1. You do not furnish your TIN to the requester, 2. You do not certify your TIN when required (see the Part 11 instructions on page 4 for details), 3. The IRS teUs the requester that you furnished an incorrect TIN, 4. The IRS tells you that you are subject to backup withholding because you did not report all your interest and dividends on your tax return (for reportable interest and dividends only), or 5. You do not certify to the requester that you are not subject to backup withholding under 4 above (for reportable interest and dividend accounts opened after 1983 only). Certain payees and payments are exempt from backup withholding. See the instructions below and the separate Instructions for the Requester of Form W-9. Also see Special rules regarding partnerships on page 1. Penalties Failure to furnish TIN. If you fail to furnish your correct TIN to a requester, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. Civil penalty for false infonnation with respect to withholding. If you make a false statement with no reasonable basis that results in no backup withholding, you are subject to a $500 penaity. Criminal penalty for falsifying information. Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. Misuse of TINs. If the requester discloses or uses TINs in violation of federal law, the requester may be subject to civil and criminal penalties. Specific Instructions Name If you are an individual, you must generally enter the name shown on your income tax return. However, if you have changed your last name, for instance, due to marriage without informing the Social Security Administration of the name change, enter your first name, the last name shown on your social security card, and your new last name. If the account is in joint names, list first, and then circle, the name of the person or entity whose number you entered in Part I of the form. Sole proprietor. Enter your individual name as shown on your income tax return on the "Name" line. You may enter your business, trade, or "doing business as (DBA)" name on the "Business name" line. Limited liability company (LlC). If you are a single-member LLC (including a foreign LLC with a domestic owner) that is disregarded as an entity separate from its owner under Treasury regulations section 301.7701-3, enter the owner's name on the "Name" line. Enter the LLC's name on the "Business name" line. Check the appropriate box for your filing status (sole proprietor, corporation, etc.), then check the box for "Other" and enter "LLC" in the space provided. Other entities. Enter your business name as shown on required federal tax documents on the "Name" line. This name should match the name shown on the charter or other legal document creating the entity. You may enter any business, trade, or DBA name on the "Business name" line. Note. You are requested to check the appropriate box for your status (individual/sole proprietor, corporation, etc.). Exempt From Backup Withholding If you are exempt, enter your name as described above and check the appropriate box for your status, then check the "Exempt from backup withholding" box in the line following the business name, sign and date the form. Form W-9 (Rev. 11-2005) Page 3 Generally, individuals (including sole proprietors) are not exempt from backup withholding. Corporations are exempt from backup withholding for certain payments, such as interest and dividends. Note. If you are exempt from backup withholding, you should still complete this form to avoid possible erroneous backup withholding. Exempt payees. Backup withholding is not required on any payments made to the following payees: 1. An organization exempt from tax under section 501 (a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401 (f)(2), 2. The United States or any of its agencies or instrumentalities, 3. A state, the District of Columbia, a possession of the United States, or any of their political subdivisions or instrumentalities, 4. A foreign government or any of ITS political subdivisions, agencies, or instrumentalities, or 5. An international organization or any of its agencies or instrumentalities. Other payees that may be exempt from backup withholding include: 6. A corporation, 7. A foreign central bank of issue, 8. A dealer in securities or commodities required to register in the United States, the District of Columbia, or a possession of the United States, 9. A futures commission merchant registered with the Commodity Futures Trading Commission, 10. A real estate investment trust, 11. An entity registered at all times during the tax year under the Investment Company Act of 1940, 12. A common trust fund operated by a bank under section 584(a), 13. A financial institution, 14. A middleman known in the investment community as a nominee or custodian, or 15. A trust exempt from tax under section 664 or described in section 4947. The chart below shows types of payments that may be exempt from backup withholding. The chart applies to the exempt recipients listed above, 1 through 15. IF the payment is for. . _ THEN the payment is exempt for.. . Interest and dividend payments All exempt recipients except for 9 Broker transactions Exempt recipients 1 through 13. Also, a person registered under the Investment Advisers Act of 1940 who regularly acts as a broker Barter exchange transactions and patronage dividends Exempt recipients 1 through 5 Payments over $600 required to be reported and direct sales over $5,000 1 'See Form 1099-MISC, Miscellaneous Income, and its instructions_ , However, the following payments made to a corporation (including gross proceeds paid to an attorney under section 6045{f), even if the attorney is a corporation) and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments. attorneys' fees; and payments for services paid by a leder<tl execuli....e agency Generally, exempt recipients 1 through 71 Part I. Taxpayer Identification Number (TIN) Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below. If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN. However, the IRS prefers that you use your SSN. If you are a single-owner LLC that is disregarded as an entity separate from its owner (see Umited liability company (LLC) on page 2), enter your 55N (or EIN, if you have one). If the LLC is a corporation, partnership, etc., enter the entity's EIN. Note. See the chart on page 4 for further clarification of name and TIN combinations. How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form 55-5, Application for a Social Security Card, from your local Social Security Administration office or get this form online at www.socialsecurity.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IR5 Individual Taxpayer Identification Number, to apply for an ITIN, or Form 55-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/businesses and clicking on Employer 10 Numbers under Related Topics. You can get Forms W-7 and 55-4 from the IR5 by visifing www.irs.govor by calling 1-800-TAX-FORM (1-800-829-3876). If you are asked to complete Form W-9 but do not have a TIN, write "Applied For" in the space for the TlN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withhoiding on payments. The 50-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester. Note. Writing "Applied For" means that you have already applied for a TIN or that you intend to apply for one soon. Caution: A disregarded domestic entity that has a foreign owner must use the appropriate Form W-8. Form \'11-9 (Rev_ 11-2005) Part II. Certification Page 4 To establish to the withholding agent that you are a U.S. person, or resident allen, sign Form W-9. You may be requested to sign by the withholding agent even if items 1, 4, and 5 below indicate otherwise. For a joint account, only the person whose TIN is shown in Part I should sign (when required). Exempt recipients, see Exempt From Backup Withholding on page 2. Signature requirements. Complete the certification as indicated in 1 through 5 below. 1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification. 2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form. 3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification. 4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. "Other payments" include payments made in the course of the requester's trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations). 5. Mortgage interest paid by you, acquisition or abandonment of secured property, cancellation of debt, qualified tuition program payments (under section 529), IRA, Coverdell ESA, Archer MSA or HSA contributions or distributions, and pension distributions. You must give your correct TIN, .but you do not have to sign the certification. What Name and Number To Give the Requester For this type of account: Give name and SSN of: 1. Individual 2 Two or more individuals Ooint account) 3. Custodian account of a minor (Uniform Gift to Minors Act) 4. a. The usual revocable savings trust (grantor is also trustee) b. So-called trust account that is not a legal or valid trust under state law 5. Sole proprietorship or single-owner LLC The individual The actual owner of the account or, if combined funds, the first individual on the account' The minor 2 The grantor.trustee 1 The actual owner 1 The owner 3 For this type of account 6. Sole proprietorship or single-owner LLC 7. A valid trust, estate, or pension trust 8. Corporate or LLC electing corporate status on Form 8832 9. Association, club, religious. charitable, educational, or other tax-exempt organization 10. Partnership or multi-member LLC 11. A broker or registered nomrnee 12. Account with the Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments Give name and EIN of: The owner 3 Legal entity ~ The corporation The organization The partnership The broker or nominee The public entity 1 Ust first and circle the name of the person whose number you fumish. If only one person on a Joint account has an SSN, that person's number must be fumished 'Circle the minor's name and furnish the minor's SSN. "You must show your individual name and you may also enter your business or ~OBA" name on the second name line. You may use either your SSN or EIN (If you have orle)_ It you are a sole proprietor. IRS encourages you to use your SSN . Ust first and circle the name of the legal trust. estate. or pension trust. (Do not- furnish the TIN of the personal representative or trustee unless the legal entity itself is not designated in the account tille.) Also see Special rules regarding partnerships on page 1. Note. If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed. Privacy Act Notice Section 6109 of the Internal Revenue Code requires you to provide your correct TIN to persons who must file information returns with the IRS to report interest, dividends, and certain other income paid to you, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt, or contributions you made to an IRA, or Archer MSA or HSA. The IRS uses the numbers for identification purposes and to help verity the accuracy of your tax return. The IRS may also provide this information to the Department of Justice for civil and criminal litigation, and to cities, states, the District of Columbia, and U.S. possessions to carry out their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat terrorism. You must provide your TIN whether or not you are required to file a tax return. Payers must generally withhold 28% of taxable interest, dividend, and certain other payments to a payee who does not give a TIN to a payer. Certain penalties may also apply. ON LEGAL COUNSEL'S LETTERHEARD OPINION OF COUNSEL TO LESSEE Bank of America, National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No.2, dated April 30, 2009, to Master Equipment LeaselPurchase Agreement, dated as of April 30, 2009 between Bank of America, National Association, as Lessor, and City of San Bernardino, as Lessee Ladies and Gentlemen: As legal counsel to City of San Bernardino ("Lessee "), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of April 30, and Exhibits thereto by and between Bank of America, National Association ("Lessor") and Lessee (the "Agreement "), [and] an executed counterpart of Schedule of Property No.2, dated April 30, 2009, by and between Lessor and Lessee (the "Schedule "), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment "), [and an executed counterpart of that certain Acquisition Fund and Account Control Agreement dated April 30, 2009 by and among Lessee, Lessor and the Custodian named therein (the "Acquisition Fund Agreement")] (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease". [The Lease and the Acquisition Fund Agreement are referred to herein collectively as the "Lease Documents"]. Based on the foregoing, I am of the following opinions: I. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a) the power to tax, (b) the power of eminent domain, and (c) police power][is a political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code]; 2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Lease [Documents] and to perform its obligations under the Lease [Documents]; #337849v4 (CA Abatement Lease Template) B-2 3. The Lease [Documents] has [have] been dul y authorized, approved, executed and delivered by and on behalf of Lessee and the Lease [Documents are] [is] a valid and binding obligation of Lessee enforceable in aceordance with its [their] terms; 4. The authorization, approval, execution and delivery of the Lease [Documents] and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordanee with all open meeting laws, public bidding laws and all other applicable state or federal laws; and 5. There is no proeeeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely 'determined, would adversely affect the transactions contemplated by the Lease Documents or the interest of Lessor or its assigns. as the case may be, in the Equipment thereunder. The portion of rentals designated as and constituting interest paid by received by Lessor is excluded from Lessor's gross income for federal purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item for purposes ofthe federal individual or corporate alternative minimum taxes,) [6. Lessee and income tax All capitalized terms herein shall have the same meanings as in the Lease unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Printed Name EXECUTE Firm Address Telephone No. Signature DO NOT Dated #337849v4 (eA Abatement Lease Temptate) B-3 Information Return for Tax-Exempt Governmental Obligations .. Under Internal Revenue Code section 149(e) ... See separate Instructions. Caution: ff the issue price is under $100,000, use Form B038-CG. If Amended Return. check here ~ 0 2 Issuer's employer identification number 95 . 6000772 rom> 8038.6 (Rev. November 2000) Issuer's name CITY OF SAN BERNARDINO OMS No 1545-0720 3 Number and street (or P.O. box if mail is not delivered to street address) 300 NORTH 0 STREET 5 City. town. or post office. state, and ZIP code SAN BERNARDINO. CA 92418-001 7 Name of issue LEASE WITH OPTION TO PURCHASE AGREEMENT Room/suite 4 Report number 3 6 Date of issue 04-30-09 8 CUSiP number NONE 9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative MICHAEL GOMEZ. FINANCIAL ANALYST ( 909 I 384-5146 T e of Issue (check a licable box(es) and enter the issue rice) See instructions and attach schedule 22 Proceeds used for accrued interest . 23 Issue price of entire issue (enter amount from line 21, column (b)) 24 Proceeds used for bond issuance costs (including underwriters' discount) 24 25 Proceeds used for credit enhancement . 25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to currently refund prior issues 27 28 Proceeds used to advance refund prior issues 28 29 Total (add lines 24 through 28) . 30 Nonrefundin roceeds of the issue (subtract line 29 from line 23 and enter amount here). Oescri tion of Refunded Bonds (Com lete this art onl for refundin bonds.) 31 Enter the remaining weighted average maturity of the bonds to be currently refunded .... 32 Enter the remaining weighted average maturity of the bonds to be advance refunded .... 33 Enter the last date on which the refunded bonds will be called ~ 34 Enter the datels) the refunded bonds were issued ~ Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 0.00 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed rnvestment contract (see Instructions) 0.00 b Enter the final maturity date of the guaranteed investment contract.... N/A 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a 0.00 b If this issue is a loan made from the proceeds of another tax-exempt issue, check box.... D and enter the name of the issuer'" and the date of the issue .... 38 If the issuer has designated the issue under section 265Ib)(3)(B)(i)(lIl) (small issuer exception), check box ~ III 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate. check box ~ 0 40 If the issuer has identified a hed e, check box ... 0 Under penalties of perJUry, I declare that I have examined this return and accompanYing schedules and statements. and to the best of my knowledge and belief. they are true. correcl, and complete. Education Health and tlospltal Transportation Public safety. Environment (including sewage bonds) HOUSing Utilities 11 12 i 13 14 15 16 17 18 (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity 03/30/2016 $ 753.875.36 $ Uses of Proceeds of Bond Issue (includin N/A 3.000 underwriters' discount) ears 753.875.36 Ie) Yield 3.23 % 0.00 753,875.36 0.00 753,875.36 N/A N/A N/A N/A years years Sign Here ~ Signature of issuer's authorized representative Date ~ Barbara S. Pachon, Director of Financ( , Type or pnnt name and title For Paperwork Reduction Act Notice, see page 2 of the Instructions. @ Cat No. 63773S Form 80J8-G (Rev_ 11.2000)