HomeMy WebLinkAbout18- Public Services CITY OF SAN BERNARDINO — REQUEST FOR COUNCIL ACU I " i i v /"'1 L
From: Randy Kuettle, Acting Director Subject: Resolution of the Mayor and
Common Council of the City of San
Dept: Public Services Bernardino authorizing the execution of
an agreement and issuance of a
Date: April 28, 2010 purchase order to Crest Chevrolet of
San Bernardino pursuant to section
3.04.010-133 of the Municipal Code, for
one (1) 2009 Schwarze M6000 Broom
Sweeper nnwe rarl by rnmpressed
Natural Gas to be utilized by the Public
Services Department Street Division
and award a lease-purchase agreement
to Bank of America.
Meeting Date: May 3, 2010
Synopsis of Previous Council Action:
Reso 2006-440 December 18, 2006 Approved purchase of three Street
Sweepers from Crest Chevrolet.
Reso 2007-395 September 17, 2007 Approved purchase of one Street
Sweeper from Crest Chevrolet.
Recommended Motion:
Adopt Resolution.
n re
Contact person: Don Johnson, Fleet Manager Phone: 5220
Supporting data attached:
Staff Report, Resolution, Agreement, Ward: All
Quote and Specifications.
FUNDING REQUIREMENTS: Amount: $317,764.42
Plus lease costs to
be paid over 7
years.
Source: 527-414-5803
Lease payments
Finance:
Council Notes: /' GSO 0Z0- 72
Agenda Item No.
3- $-20lb
CITY OF SAN BERNARDINO
OFFICE OF THE PUBLIC SERVICES DIRECTOR
INTER-OFFICE MEMORANDUM
TO: Charles McNeeley, City Manager
FROM: Don Johnson, Public Services Fleet Division
DATE: April 28, 2010
SUBJECT: City Manager's Approval of Process — Purchases made pursuant to
Section 3.04.010(B)(3) and Section 3.04.075 of the City's Municipal Code
(Purchases approved by the Mayor and Common Council and emergency
purchases approved by the City Manager). DDL Number 82.
COPIES: Randy Kuettle, Acting Director of Public Services
Crest Chevrolet was selected as a Sole Source for the following reasons:
1. Crest Chevrolet is the same vendor that has supplied all six Street Sweepers
purchased since 2003.
2. The Street Division currently operates four (4) 2007 Schwarze sweepers, and two
(2) 2003 Elgin sweepers. Fleet staff has found it to be more cost effective to
standardize types of vehicles and equipment for better operational economy. Fewer
brands of parts must be stocked and mechanic training is specialized and more
thorough.
3. Crest will use sub-contractor, Kelly Equipment of Upland, Ca. to supply the
Schwarze M6000 broom sweeper. Kelly Equipment of Upland is the regional dealer
for Schwarze sweepers. This new Sweeper will be powered by CNG (Compressed
natural gas), as required by South Coast Air Quality Management District
(SCAQMD) rule 1186.1.
A Request for Council Action entitled, "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 Crest Chevrolet of San Bernardino pursuant to section 3.04.010-133 of
the Municipal Code, for one (1) 2009 Schwarze M6000 Broom Sweeper powered by
Compressed Natural Gas to be utilized by the Public Services Department Street
Division and award a lease-purchase agreement to Bank of America' has been
submitted and placed on the May 3, 2010 agenda calendar for review and approval.
Don W. Johnson
Fleet Services Division Manager
Approved By:
Cha s McNeeley
City Manager
CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION
Staff Report
SUBJECT:
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 Crest Chevrolet of San Bernardino
pursuant to section 3.04.010-B3 of the Municipal Code, for one (1) 2009 Schwarze M6000 Broom
Sweeper powered by Compressed Natural Gas to be utilized by the Public Services Department
Street Division and award a lease-purchase agreement to Bank of America.
BACKGROUND:
The Street Division has a total of seven sweepers to complete their assigned work. One of these is
unit #490 a 2000-year model Athey/Mobil M-9 Street Sweeper with 45,592 curb miles. This unit
has far surpassed its useful life and has become unreliable and an economic burden to operate.
Many repair parts are no longer available and the unit does not meet the California Air Resource
Board(CARB) requirements. Therefore this unit will be placed in surplus for auction and needs to
be replaced.
During the FY 06/07 budget preparation, Fleet staff developed a multi-year long term replacement
schedule for the Refuse and Street Divisions that was approved as part of the FY 06/07 Refuse and
Street Division Budgets. On December 18, 2006 Council approved the purchase of three street
sweepers from Crest Chevrolet as the first phase. The replacement of this aging unit is the next
phase of that schedule.
Staff had several different sweepers demonstrated on the City's sweeping routes, and it was
determined that the Schwarze M6000 was the best broom sweeper for the City.
Due to the specialized nature of this equipment there are no local vendors able to supply the
Sweeper. However, pursuant to section 3.04.010-B3 of the Municipal Code "purchases approved
by the Mayor and Common Council", Fleet staff has negotiated with Crest Chevrolet of San
chase. The vehicle and subsequent build u will
ino to be the rim vendor for this purchase.Bernardino primary p 4 P
III be purchased through Crest Chevrolet for a total amount of$317,764.42 including tax, plus lease
costs. Crest will use sub-contractor, Kelly Equipment of Upland, Ca. to supply the Schwarze
M6000 broom sweeper. Kelly Equipment of Upland is the regional dealer for Schwarze sweepers.
This new Sweeper will be powered by CNG (Compressed natural gas), as required by South Coast
Air Quality Management District (SCAQMD) rule 1186.1. Attached for your review is the quote
from Crest Chevrolet and Kelly Equipment. (See Attachments "1"& "2").
LEASE/PURCHASE FINANCING:
Staff issued a request for rate quote RFQ LQ - 1002 to the four financing/leasing companies that
have existing master lease agreements in place with the City and four financing/leasing companies
that don't have existing master lease agreements in place with the City. RFQ LQ— 1002 was for a
total amount of$3,579,720.89 for ten (10) Autocar refuse truck chassis' & body and one (1) 2009
Schwarze M6000 Broom Sweeper powered by Compressed Natural Gas. The RFQ requested an
amortization schedule of seven years with semi-annual payments. The seven year repayment is
within the City's established replacement schedule for the vehicles.
I
RFQ LQ— 1002 was sent out on February 21, 2010 and due back on March 2, 2010. Of the eight
lenders solicited, Finance received two "no bids" and five "no responses". Finance staff called the
lenders to obtain explanations for the lack of responses. All provided various reasons why bids
were not submitted.
Summarized below are the rate quote results (seven-year term with semi-annual payments):
Lease Purchase Financing Provider Rate Quote Semi-Annual Payment
Bank of America 3.78% $26,048.11
Comerica Leasing Corporation No Bid
FMLC No Bid
Ford Credit Municipal Finance No Responses
Koch Financial Corporation No Responses
SunTrust Leasing Corporation No Responses
Union Bank No Res ones
Wells Faro No Res ones
Comerica Leasing Corporation is currently only lending to depositors that maintain a balance equal
to or greater than 15% of the amount requested. FMLC is a financing broker and the banks
associated with FMLC were either not interested in the City's request or received the RFQ directly
from the City. Ford Credit Municipal Finance declined to bid because they're only bidding on
deals that meet their criteria for essential use and finance structure. Koch Financial Corporation
declined to bid because of their corporate decision to only fund specific deals. SunTrust Leasing
Corporation declined to bid and did not respond to requests for information about their decision to
not bid. Union Bank declined to bid because the RFQ was too small and they're only financing
small deals for existing customers. Wells Fargo declined to bid because the RFQ did not meet
their set criteria.
The lack of bids submitted can be tied to the current state of our economy and based upon the
information received from the lenders, they have adjusted their policies for which type of lease-
purchases they will fund.
Though Bank of America provided the sole bid, it is staff s recommendation to award the bid and
enter a lease-purchase contract (Exhibit `B" to the Resolution) with Bank of America. Within a
twelve month period Bank of America was awarded three lease-purchase financing bids by the
against other
City. The three bids Bank of America won were also bid competitively and won a g
submitted bids. Therefore, staff considers Bank of America to be a responsible and qualified
lender.
FINANCIAL IMPACT:
No lease payments are scheduled for this fiscal year. Funds for the lease payment will be budgeted
next fiscal year in the Integrated Waste Management Fund, account number 527-400-5803-0000-
0097. The semi-annual payment is $26,048.11.
RECOMMENDATION:
Adopt Resolution
I
i
2
RESOLUTION NO. COPY
RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT
1
AND ISSUANCE OF A PURCHASE ORDER TO CREST CHEVROLET OF SAN
2 BERNARDINO PURSUANT TO SECTION 3.04.010-113 OF THE MUNICIPAL CODE,
FOR ONE (1) 2009 SCHWARZE M6000 BROOM SWEEPER POWERED BY
3 COMPRESSED NATURAL GAS TO BE UTILIZED BY THE PUBLIC SERVICES
DEPARTMENT STREET DIVISION; AND AWARD A LEASE-PURCHASE
4 AGREEMENT TO BANK OF AMERICA.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
6 CITY OF SAN BERNARDINO AS FOLLOWS:
7 SECTION 1.That the City Manager of the City of San Bernardino is hereby authorized
8 to execute on behalf of said City an Agreement between the City of San Bernardino and Crest
9 Chevrolet, a copy of which is attached hereto, marked Exhibit "A" and incorporated herein by
10
reference as fully as though set forth at length.
1i
12 SECTION 2. That this purchase is exempt from the formal contract procedures of
13 Section 3.04.010 of the Municipal Code, pursuant to Section 3.04.010-B3 of said Code
14 "Purchases approved by the Mayor and Common Council'.
15 SECTION 3. That Crest Chevrolet has offered a negotiated purchase price of
16 $317,764.42 including tax pursuant to Section 3.04.010-B3 of the Municipal Code for one (1)
17 Year 2009 Schwarze M6000 Broom Sweeper powered by Compressed Natural Gas (CNG).
18
Pursuant to this determination the Director of Finance or her designee is hereby authorized to
19
20 issue a Purchase order to Crest Chevrolet of San Bernardino, in the amount of $317,764.42,
21 "Which will facilitate the procurement of the vehicle; and award a bid for lease purchase
22 financing to Bank of America.
23 SECTION 4. That the Purchase Order shall reference this Resolution Number
24 and shall read,"One 2009 CNG powered Schwarze M6000 Broom Sweeper." P.O. not to
25
exceed$317,764.42 and shall incorporate the terms and conditions of the Agreement.
26
27
28
RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT
AND ISSUANCE OF A PURCHASE ORDER TO CREST CHEVROLET OF SAN
I BERNARDINO PURSUANT TO SECTION 3.04.010-133 OF THE MUNICIPAL CODE,
FOR ONE (1) 2009 SCHWARZE M6000 BROOM SWEEPER POWERED BY
2 COMPRESSED NATURAL GAS TO BE UTILIZED BY THE PUBLIC SERVICES
DEPARTMENT STREET DIVISION; AND AWARD A LEASE-PURCHASE
3 AGREEMENT TO BANK OF AMERICA.
4 SECTION 5. That Bank of America provided the lowest rate quote for the lease-
5 purchase of a one (1) Schwarze M6000 Broom Sweeper powered by Compressed Natural Gas
6
(CNG), marked Exhibit`B°. Pursuant to this determination the Director of Finance is hereby
7
8 authorized to execute lease-purchase documents with Bank of America.
9 SECTION 6. The authorization to execute the above referenced Purchase
10 Order and Agreement is rescinded if it is not issued within sixty (60) days of the
11 passage of this Resolution.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT
AND ISSUANCE OF A PURCHASE ORDER TO CREST CHEVROLET OF SAN
1 BERNARDINO PURSUANT TO SECTION 3.04.010-B3 OF THE MUNICIPAL CODE,
FOR ONE (1) 2009 SCHWARZE M6000 BROOM SWEEPER POWERED BY
2 COMPRESSED NATURAL GAS TO BE UTILIZED BY THE PUBLIC SERVICES
DEPARTMENT STREET DIVISION; AND AWARD A LEASE-PURCHASE
3 AGREEMENT TO BANK OF AMERICA.
4 1 HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
5 and Common Council of the City of San Bernardino at a meeting thereof, held
6
on the day of 2010,by the following vote,to wit:
7
Council Members: AYES NAYS ABSTAIN ABSENT
8
9 MARQUEZ
10 DESJARDINS
11 BRINKER
12 SHORETT
13 KELLEY
14
JOHNSON
15
16 MCCAMMACK
17
18
Rachel G. Clark, City Clerk
19
20 The foregoing resolution is hereby approved this day of
2010.
21
22 Patrick J. Morris, Mayor
23 City of San Bernardino
24 Ap roved as to Form:
25
26 J es F. Penman, City Attorney
27
28
VENDOR SERVICE AGREEMENT
1 This Vendor Service Agreement is entered into this 3rd day of May 2010, by and
2
between Crest Chevrolet ("VENDOR") and the City of San Bernardino ("CITY" or "San
3
4 Bernardino").
5 WITNESSETH:
6 WHEREAS, the Mayor and Common Council has determined that it is advantageous
7 and in the best interest of the CITY to contract for the purchase of one (1) 2009 Schwarze
8 M6000 (CNG)powered Broom Sweeper; and
9 WHEREAS, the City of San Bernardino did not solicit and accept quotes from
10
available vendors for the purchase of one (1) 2009 Schwarze M6000 (CNG) powered Broom
11
12 Sweeper; and,
13 NOW,THEREFORE, the parties hereto agree as follows:
14 1. SCOPE OF SERVICES.
15 For the remuneration stipulated, San Bernardino hereby engages the services of
16 VENDOR to provide those products and services as set forth in its quote, a copy of which is
17
attached hereto as Attachment "I"and incorporated by this reference.
18
2. COMPENSATION AND EXPENSES.
19
20 a. For the services delineated above, the CITY, upon presentation of an invoice, shall
21 pay the VENDOR up to the amount of $317,764.42, for the purchase of one (1)
22 2009 Schwarze M6000 (CNG) powered Broom Sweeper.
23 b. No other expenditures made by VENDOR shall be reimbursed by CITY.
24 3. TERM; TERMINATION.
25
The term of this agreement shall be for one year.
26
27
28 Exhibit "A"
1
This Agreement may be terminated at any time by thirty (30) days prior written notice
1 by either party. The terms of this Agreement shall remain in force unless amended by written
2
agreement of the parties executed on or before date of expiration of current term of the
3
4 agreement.
5 4. WARRANTY
6 Vendor expressly warrants that all products and services supplied to City by Vendor
7
under this Agreement shall conform to the specifications, drawings or other description upon
8
9 which this purchase is based, shall be fit and sufficient for the purpose intended, merchantable,
10 of good material and workmanship, free from defects and fee and clear of all liens or
11 encumbrances. Inspection, testing, acceptance or use of the goods by the City shall not affect
12 Vendor's obligations under this warranty, and such warranty shall survive inspection, testing,
13 acceptance and use. Vendor agrees to replace or correct promptly defects of any goods or
14
services not conforming to the foregoing warranty without expense to the City, when notified
15
of such non-conformity by City. If Vendor fails to correct the defects in or replace non-
16
17 conforming goods or services promptly, City may, after reasonable notice to Vendor, make
18 such corrections or effect cover, or cure, at Vendor's expense. "Reasonable notice" for
19 purposes of this section shall not be deemed to require more than 60 calendars days notice
20 before commencement of efforts by the City to effect cover or a cure except upon written
21 agreement of the Parties.
22
5. INDEMNITY.
23
24 Vendor agrees to and shall indemnify and hold the City, its elected officials, employees,
25 agents or representatives, free and harmless from all claims, actions, damages and liabilities of
26 any kind and nature arising from bodily injury, including death, or property damage, based or
27 asserted upon any or alleged act or omission of Vendor, its employees, agents, or
28 Exhibit"A"
2
subcontractors, relating to or in any way connected with the accomplishment of the work or
1 performance of service under this Agreement, unless the bodily injury or property damage was
2
actually caused by the sole negligence of the City, its elected officials, employees, agents or
3
representatives. As part of the foregoing indemnity, Vendor agrees to protect and defend at its
4
5 own expense, including attorney's fees the City, its elected officials, employees, agents or
6 representatives from any and all legal actions based upon such actual or alleged acts or
7 omissions. Vendor hereby waives any and all rights to any types of express or implied
8 indemnity against the City, its elected officials, employees, agents or representatives, with
9 respect to third party claims against the Vendor relating to or in any way connected with the
10
accomplishment of the work or performance of services under this Agreement.
11
6. INSURANCE.
12
13 While not restricting or limiting the foregoing, during the term of this Agreement,
14 VENDOR shall maintain in effect policies of comprehensive public, general and automobile
15 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory
16 worker's compensation coverage, and shall file copies of said policies with the CITY's Risk
17 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an
18
additional named insured in each policy of insurance provided hereunder. The Certificate of
19
20 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or
21 termination in the policy. Insurer shall give CITY 30 days notice prior to enactment and any
22 change or termination of policy.
23 7. NON-DISCRIMINATION.
24 In the performance of this Agreement and in the hiring and recruitment of employees,
25
VENDOR shall not engage in, nor permit its officers, employees or agents to engage in,
26
27 discrimination in employment of persons because of their race, religion, color, national origin,
28 Exhibit"A"
3
ancestry, age, mental or physical disability, medical conditions, marital status, sexual gender or
1 sexual orientation, or any other status protected by law.
2 8. INDEPENDENT CONTRACTOR
3
VENDOR shall perform work tasks provided by this Agreement, but for all intents and
4
5 purposes VENDOR shall be an independent contractor and not an agent or employee of the
6 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of
7 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment
8 Compensation, and other payroll deductions for VENDOR and its officers, agents, and
9 employees, and all business licenses, if any are required, in connection with the services to be
10
performed hereunder.
11
9. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS.
12
13 VENDOR warrants that it possesses or shall obtain,and maintain a business registration
14 certificate pursuant to Chapter 5 of the Municipal Code, and any other licenses, permits,
15 qualifications, insurance and approval of whatever nature that are legally required of VENDOR
16 to practice its business or profession.
17 NOTICES.
18
Any notices to be given pursuant to this Agreement shall be deposited with the United
19
20 States Postal Service,postage prepaid and addressed as follows:
21 TO THE CITY: Public Services Director
300 North"D" Street
22 San Bernardino, CA 92418
Telephone: (909) 384-5140
23
24 TO THE VENDOR: Crest Chevrolet
909 West 21st Street
25 San Bernardino, CA 92402-0501
Telephone: (909) 883-8833
26 Attn: Dan Zank
27
28 Exhibit"A"
4
10. ATTORNEYS' FEES.
1 In the event that litigation is brought by any party in connection with this Agreement,
2
the prevailing party shall be entitled to recover from the opposing parry all costs and expenses,
3
4 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of
5 its rights or remedies hereunder or the enforcement of any of the terms, conditions or
6 provisions hereof The costs, salary and expenses of the City Attorney and members of his
7 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys'
8 fees"for the purposes of this paragraph.
9 11. ASSIGNMENT.
10
VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or
11
12 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior
13 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void
14 and shall constitute a breach of this Agreement and cause for the termination of this
15 Agreement. Regardless of CITY's consent,no subletting or assignment shall release VENDOR
16 of VENDOR's obligation to perform all other obligations to be performed by VENDOR
17
hereunder for the term of this Agreement.
18
12. VENUE.
19
20 The parties hereto agree that all actions or proceedings arising in connection with this
21 Agreement shall be tried and litigated either in the State courts located in the County of San
22 Bernardino, State of California or the U.S. District Court for the Central District of California,
23 Riverside Division. The aforementioned choice of venue is intended by the parties to be
24 mandatory and not permissive in nature.
25
13. GOVERNING LAW.
26
27 This Agreement shall be governed by the laws of the State of California.
28 Exhibit"A"
5
14. SUCCESSORS AND ASSIGNS.
1 This Agreement shall be binding on and inure to the benefit of the parties to this
2
Agreement and their respective heirs,representatives, successors, and assigns.
3
15. HEADINGS.
4
5 The subject headings of the sections of this Agreement are included for the purposes of
6 convenience only and shall not affect the construction or the interpretation of any of its
7 provisions.
8 16. SEVERABILITY.
9 If any provision of this Agreement is determined by a court of competent jurisdiction to
10
be invalid or unenforceable for any reason, such determination shall not affect the validity or
11
12 enforceability of the remaining terms and provisions hereof or of the offending provision in any
18 other circumstance, and the remaining provisions of this Agreement shall remain in full force
!4 and effect.
15 17. ENTIRE AGREEMENT; MODIFICATION.
16 This Agreement constitutes the entire agreement and the understanding between the
17
parties, and supercedes any prior agreements and understandings relating to the subject manner
18
of this Agreement. This Agreement may be modified or amended only by a written instrument
19
20 executed by all parties to this Agreement.
21
22
23
24
25
26
27
28 Exhibit"A"
6
VENDOR SERVICE AGREEMENT
1 CREST CHEVROLET
2
IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day and
3
date set forth below.
4
5 Dated: 2010 Crest Chevrolet
6
By:
7
8
9 Dated 2010 CITY OF SAN BERNARDINO
10 By:
Charles E. McNeely, City Manager
11 Approved as to Form:
12
13 By:
James F. Penman, City Attorney
14
15
16
17
18
19
20
21
22
23
24
25
26
2
28 Exhibit"A"
7
Exhibit`B"
MASTER EQQII'MENT LEASE/PURCHASE AGREEMENT
This Master Equipment Lease/Purchase Agreement No. 2114500-06000 (the
`Agreement') dated as of May 10, 2010, and entered into between Bank of America, National
Association, a national banking association ("Lessor'), and City of San Bernardino, a body
corporate and politic existing under 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 (BAPCCKAAbatement Lease Template) 1 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 from the date hereof until this Agreement is
terminated..
#765674vl (BAPCC/CAAbatemen(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 Agree-
ment 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 subgrades 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], (ii) essee's ability], ( ) t tty 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 Schedule of Property No. 2 hereto together with a Rental Payment Schedule attached
thereto substantially in the form of Exhibit A-1 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.
p70674v1 (BAPCC/CAAbatenlentLuse Template) 3
ARTICLE II
Section.1:01. 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 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 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 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 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
i 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
#765674v1 (BAPCC/CA 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 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.
0) 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,
0765674v1 (BAPCCCA Abatemen( Lease l'empla(e) 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
performance 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;
#765674vi (BAPCCICA Abatement Leasc'remplate) 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 Amount 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 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
P765674v1 (BAPCC/CAAbatemen( Lease Template) 7
Schedule, the interest on which begins to accrue as of the Commencement Date for each such
Schedule.
Section 4.01. 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
V65674v1 (BAPCOCA Abatement lease Template) 8
i
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 oJ'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 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, 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
0656741l (BAPCC/CA 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 V1
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 in accordance with Section 12.02. Upon purchase of the Equipment
under a Lease by Lessee pursuant to Section 10.0 1, 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
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 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 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.
#765674v1 (BAPCCl('A 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
Us 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.
#765674v1 (BAPCC/CA Ahaleimm 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
i
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 "Nel 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
tl765674vl (BAPCC/CA Abatement Lease Template) 12
improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or(b)pay or
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 rV.
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 (BAPMCA 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 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
4765674vl (BAPCC/CA Abatement Lease Template) 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 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 12.01. 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 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 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;
I
�
4765674v1 (B.4PCC/C.4 Abatement Lease Tanplate) IS
1
(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 Tern 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.
p765674v1 (nAPCC/CAAbatement Lease Template) 16
I
i
i
I
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 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.
I
ARTICLE 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.
#765674v1 (BAPCC/CA Abatement Lease Teinplate) 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 13.07. 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: LESSEE:
Bank of America,National Association City of San Bernardino
555 California Street, 4th Floor 300 North D Street
San Francisco,California 94104 San Bernardino, CA 92418
By By
Title Title
(Seal)
Attest:
By
Title
#765674v1 (BAPCC/CA Abatement Lease Template) 18
Exhibit A
ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT
This Acquisition Fund and Account Control Agreement (this "Agreement'),
dated as of May 10, 2010, 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 No.
2114500-06000 dated as of May 10, 2010, 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 $3,597,720.89) 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:
1. Creation of Acquisition Fund.
(a) There is hereby created a special trust fund to be known as the "City of
San Bernardino #2114500-06000 (Schedule No. 2) 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 home by the Acquisition Fund. For purposes of this
agreement,"Qualified Investments"means any investments which meet the requirements of
[state law citation]. 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 FDIC INSURED CERTIFICATES OF DEPOSITS (4) WEEKS MATURITY AND WITH AN
AUTOMATIC FOUR(4)WEEKS ROLL-OVER UNTIL 0"FIiERWISF DIRECTED.
0765409v1 (BAPCC/AFA General) I
(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 May 10, 2011 (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 such 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 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 acts or omissions of any kind unless caused by its willful
misconduct.
k76_4U5v1(BAPCC/AFA General) 2
i
I
(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 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 1, 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:
1. 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;
N765408v1 (BAITUAFA Ceneral) 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 of the Lease.
5. Security 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.
I
4765408v1 (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 of levy 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.
(f) 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.
P765408v1 (nAPCC/AFA G<nual) 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
sigmed 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 ail 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
4765409N I (BAPCC/AFA GenUdl) 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, City of San Bernardino,
as Lessor as Lessee
By: By:
Title: Tide:
Deutsche Bank National Trust Company
As Acquisition Fund Custodian
By:
Title:
By:
Tide:
1
i
065408v1 (BAPCC/AFA General) 7
Schedulel
SCHEDULE2
FORM OF DISBURSEMENT REQUEST
Re: Master Equipment Lease/Purchase Agreement No. 2114500-06000, dated as of May 10,
2010,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 May 10, 2010, (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 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.
,7654080 (BAPCGAFA General) 1
(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: Assistant Vice President
#765408v1 (BAPCC/AFA General) 2
EXHIBIT A-1
RENTAL PAYMENT SCHEDULE
Rental Rental Interest
Payment Payment Portion Principal Purchase
Date Amount 3.7800% Portion Price
5/10/2010 3,597,720.89
11/10/2010 294,883.05 67,996.92 226,886.13 3,370,834.76 -
5/10/2011 294,883.05 63,708.78 231,174.27 3,139,660.49
11/10/2011 294,883.05 59,339.58 235,543.47 2,904,117.02
5/1012012 294,883.05 54,887.81 239,995.24 2,664,121.78
11/10/2012 294,883.05 50,351.90 244,531.15 2,419,590.64
5/1012013 294,883.05 45,730.26 249,152.79 2,170,437.85
11/10/2013 294,883.05 41,021.28 253,861.78 1,916,576.07
5/1012014 294,883.05 36,223.29 258,659.76 1,657,916.31
11/1012014 294,883.05 31,334.62 263,548.43 1,394,367.88
5/1012015 294,883.05 26,353.55 268,529.50 1,125,838.38
11/10/2015 294,883.05 21,278.35 273,604.71 852,233.67
5110/2016 294,883.05 16,107.22 278,775.83 573,457.84
11/10/2016 294,883.05 10,838.35 284,044.70 289,413.14
5/1012017 294,883.05 5,469.91 289,413.14 (0.00)
TOTAL 4,128,362.71 530,641.82 3,597,720.89
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 5.5048%
LESSEE:
City of San Bernardino
By
Title
Exhibit A • 1
SCHEDULE OF PROPERTY NO. 2 "
Re: Master Equipment Lease/Purchase Agreement No.2114500-06000
dated as of May 10, 2010,between Bank of America, National
Association, as Lessor, and City of San Bernardino, 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.
Ten(10) Autocar Refuse Truck Chassis and Body
One(1) Schwarze M-6000 Sterling Chassis Street Sweeper
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-1. 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 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.
#765674v1 (BAPCC%CAAbalument Lease Template) A-)
6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the
Acquisition Fund Custodian in connection with this Schedule is $3,597,720.89, of which
$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 May 10,2011.
8. Lease Term. The Lease Term shall consist of 84 months, ending on May
10, 2017.
9. Purchase Option Commencement Date. For purposes of Section 10.01 of
the Lease,the Purchase Option Commencement Date is May 10,2019.
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. 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.
#765674v1 (BAPCCJCA Abatement Lease Template) A-2
Dated: May 10,2010
LESSOR: LESSEE:
Bank of America,National Association City of San Bernardino
555 California Street, 4th Floor 300 North D Street
San Francisco, California 94104 San Bernardino, CA 92418
By By
Title Title
(Seal)
Attest:
By
Title
N765674vl (BAPCC/CA Abatement Lease Template) A-3
EXHIBIT A-1
RENTAL PAYMENT SCHEDULE
Rental Rental
Payment Payment Interest Principal Purchase
Portion Portion Price
Date Amount
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
065674v) (BAPCCiC.AAh;nemmif,,,,Timipl:uc) A-1-I
Exhibit B • 1
and
Exhibit B • 2
ExHIBIT 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
1. D f.ned i crrrrss. 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 dates as set forth in the Rental Payment Schedule attached to this Schedule as
Exhibit A-1. 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_
#765674v1 (BAPCC/CA Ahetetnent Lcesc Template) A-I
i
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 $ , of which $
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 16, 2010.
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
0. 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. 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.
N765674A (BAPCGCA Abatement Lease Template) A-2
Dated:
LESSOR: LESSEE:
Bank of America,National Association
555 California Street,4th Floor
San Francisco, California 94104
By By DO NOT EXECUTE
Title 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.
9765674vl (BAPCC%CA Abatement Lease Template) A-3
EXHIBIT A-1
RENTAL PAYMENT SCHEDULE
Rental Rental Interest Principal Purchase
Payment Payment
Portion Portion Price
Date Amount
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 amoral rate of interest equal to %.
LESSEE:
By DO NOT EXECUTE
Title
N765074al (BAI'CCiC.A:\Iciiemcm Lcasc Tcn�platcl A-1-1
Exhibit C
i
EXHIBIT C
CERTIFICATE
The undersigned, a duly elected and acting Secretary of
("Lessee') certifies as follows:
A. The following listed persons are duly elected and acting officials of Lessee (the
Of
icials") 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 ByDO NOT EXECUTE
Title
(The signer of this Certificate cannot be listed above as authorized to execute the
Agreements.)
9765674vl (B.411CCiCAAbatcment Lease Template) C-t
CERTIFICATE
The undersigned, a duly elected and acting Secretary of
("Lessee') certifies as follows:
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 No. 2114500-06000, dated as of May ]q 2010, 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.)
Exhibit D
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 Nu. , 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:
1. 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];
#765674v1 (BAPCOCA 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] terns;
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 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 Signature DO NOT EXECUTE
Firm Dated
Address
Telephone No.
t037849v4 (CA Abatement Lease Template) E-2
Exhibit E
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 Lease/Purchase 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)
N765674v1 (BAPCC/CA Abatement Lease Template) B-1
VENDOR SERVICE AGREEMENT
1 This Vendor Service Agreement is entered into this 3rd day of May 2010, by and
2
between Crest Chevrolet ("VENDOR") and the City of San Bernardino ("CITY" or "San
3
4 Bernardino").
5 WITNESSETH:
6 WHEREAS, the Mayor and Common Council has determined that it is advantageous
7 and in the best interest of the CITY to contract for the purchase of one (1) 2009 Schwarze
8 M6000 (CNG)powered Broom Sweeper; and
9 WHEREAS, the City of San Bernardino did not solicit and accept quotes from
10
available vendors for the purchase of one (1) 2009 Schwarze M6000 (CNG) powered Broom
as
12 Sweeper; and,
13 NOW,THEREFORE,the parties hereto agree as follows:
14 1. SCOPE OF SERVICES.
15 For the remuneration stipulated, San Bernardino hereby engages the services of
16 VENDOR to provide those products and services as set forth in its quote, a copy of which is
17
attached hereto as Attachment"1"and incorporated by this reference.
18
2. COMPENSATION AND EXPENSES.
19
20 a. For the services delineated above, the CITY, upon presentation of an invoice, shall
21 pay the VENDOR up to the amount of $317,764.42, for the purchase of one (1)
22 2009 Schwarze M6000 (CNG)powered Broom Sweeper.
23 b. No other expenditures made by VENDOR shall be reimbursed by CITY.
24 3. TERM; TERMINATION.
25
The term of this agreement shall be for one year.
26
27
28
1
This Agreement may be terminated at any time by thirty (30) days prior written notice
1 by either party. The terms of this Agreement shall remain in force unless amended by written
2
agreement of the parties executed on or before date of expiration of current term of the
3
4 agreement.
5 4. WARRANTY
6 Vendor expressly warrants that all products and services supplied to City by Vendor
7
under this Agreement shall conform to the specifications, drawings or other description upon
8
9 which this purchase is based, shall be fit and sufficient for the purpose intended, merchantable,
10 of good material and workmanship, free from defects and fee and clear of all liens or
11 encumbrances. Inspection, testing, acceptance or use of the goods by the City shall not affect
12 Vendor's obligations under this warranty, and such warranty shall survive inspection, testing,
13 acceptance and use. Vendor agrees to replace or correct promptly defects of any goods or
14 services not conforming to the foregoing warranty without expense to the City, when notified
15
16
of such non-conformity by City. If Vendor fails to correct the defects in or replace non-
17 conforming goods or services promptly, City may, after reasonable notice to Vendor, make
18 such corrections"or effect cover, or cure, at Vendor's expense. "Reasonable notice" for
19 purposes of this section shall not be deemed to require more than 60 calendars days notice
20 before commencement of efforts by the City to effect cover or a cure except upon written
21 agreement of the Parties.
22
5. INDEMNITY.
23
24 Vendor agrees to and shall indemnify and hold the City, its elected officials, employees,
25 agents or representatives, free and harmless from all claims, actions, damages and liabilities of
26 any kind and nature arising from bodily injury, including death, or property damage, based or
27 asserted upon any or alleged act or omission of Vendor, its employees, agents, or
28
2
subcontractors, relating to or in any way connected with the accomplishment of the work or
1 performance of service under this Agreement, unless the bodily injury or property damage was
2
actually caused by the sole negligence of the City, its elected officials, employees, agents or
3
4 representatives. As part of the foregoing indemnity,Vendor agrees to protect and defend at its
5 own expense, including attorney's fees the City, its elected officials, employees, agents or
6 representatives from any and all legal actions based upon such actual or alleged acts or
_ 7 omissions. Vendor hereby waives any and all rights to any types of express or implied
8 indemnity against the City, its elected officials, employees, agents or representatives, with
9 respect to third party claims against the Vendor relating to or in any way connected with the
10
accomplishment of the workw performance of services under this Agreement.
11
12 6. INSURANCE.
13 While not restricting or limiting the foregoing, during the term of this Agreement,
14 VENDOR shall maintain in effect policies of comprehensive public, general and automobile
15 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory
16 worker's compensation coverage, and shall file copies of said policies with the CITY's Risk
17
Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an
18
19 additional named insured in each policy of insurance provided hereunder. The Certificate of
20 Insurance famished to the CITY shall require the insurer to notify CITY of any change or
21 termination in the policy. Insurer shall give CITY 30 days notice prior to enactment and any
22 change or termination of policy.
23 7. NON-DISCRIMINATION.
24 In the performance of this Agreement and in the hiring and recruitment of employees,
25
26 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in,
27 discrimination in employment of persons because of their race, religion, color, national origin,
28
3
ancestry, age, mental or physical disability,medical conditions, marital status, sexual gender or
1 sexual orientation, or any other status protected by law.
2
8. INDEPENDENT CONTRACTOR
3
4 VENDOR shall perform work tasks provided by this Agreement, but for all intents and
5 purposes VENDOR shall be an independent contractor and not an agent or employee of the
6 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of
7 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment
8 Compensation, and other payroll deductions for VENDOR and its officers, agents, and
9 employees, and all business licenses, if any are required, in connection with the services to be
10
performed hereunder.
11
12 9. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS.
13 VENDOR warrants that it possesses or shall obtain, and maintain a business registration
14 certificate pursuant to Chapter 5 of the Municipal Code, and any other licenses, permits,
15 qualifications, insurance and approval of whatever nature that are legally required of VENDOR
16 to practice its business or profession.
17
NOTICES.
18
19 Any notices to be given pursuant to this Agreement shall be deposited with the United
20 States Postal Service, postage prepaid and addressed as follows:
21 TO THE CITY: Public Services Director
300 North"D" Street
22 San Bernardino,CA 92418
23 Telephone: (909) 384-5140
24 TO THE VENDOR: Crest Chevrolet
909 West 21 st Street
25 San Bernardino, CA 92402-0501
Telephone: (909) 883-8833
26 Attn: Dan Zank
27
28
4
10. ATTORNEYS' FEES.
1 In the event that litigation is brought by any party in connection with this Agreement,
2
the prevailing party shall be entitled to recover from the opposing party all costs and expenses,
3
4 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of
5 its rights or remedies hereunder or the enforcement of any of the terms, conditions or
6 provisions hereof The costs, salary and expenses of the City Attorney and members of his
7 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys'
8 fees" for the purposes of this paragraph.
9 11. ASSIGNMENT.
10
VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or
11
12 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior
13 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void
14 and shall constitute a breach of this Agreement and cause for the termination of this
15 Agreement. Regardless of CITY's consent, no subletting or assignment shall release VENDOR
16 of VENDOR's obligation to perform all other obligations to be performed by VENDOR
17
hereunder for the term of this Agreement.
18
12. VENUE.
19
20 The parties hereto agree that all actions or proceedings arising in connection with this
21 Agreement shall be tried and litigated either in the State courts located in the County of San
22 Bernardino, State of California or the U.S. District Court for the Central District of California,
23 Riverside Division. The aforementioned choice of venue is intended by the parties to be
24 mandatory and not permissive in nature.
25
13. GOVERNING LAW.
26
27 This Agreement shall be governed by the laws of the State of California.
28
5
14. SUCCESSORS AND ASSIGNS.
1 This Agreement shall be binding on and inure to the benefit of the parties to this
2
Agreement and their respective heirs,representatives, successors, and assigns.
3
4 15. HEADINGS.
5 The subject headings of the sections of this Agreement are included for the purposes of
6 convenience only and shall not affect the construction or the interpretation of any of its
7 provisions.
8 16. SEVERABILITY.
9 If any provision of this Agreement is determined by a court of competent jurisdiction to
10
be invalid or unenforceable for any reason, such determination shall not affect the validity or
i1
12 enforceability of the remaining terms and provisions hereof or of the offending provision in any
13 other circumstance, and the remaining provisions of this Agreement shall remain in full force
14 and effect.
15 17. ENTIRE AGREEMENT; MODIFICATION.
16 This Agreement constitutes the entire agreement and the understanding between the
17
parties, and supercedes any prior agreements and understandings relating to the subject manner
18
19 of this Agreement. This Agreement may be modified or amended only by a written instrument
20 executed by all parties to this Agreement.
21
22
23
24
25
26
27
28
6
VENDOR SERVICE AGREEMENT
1 CREST CHEVROLET
2
IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day and
3
date set forth below.
4
5 Dated: 2010 Crest Chevrolet
6
By:
7
8
9 Dated 2010 CITY OF SAN BERNARDINO
10 By:
Charles E. McNeely, City Manager
11 Approved as to Form:
12
13 By:
J F. Penman, City Attorney
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
7
Attachment'f' ........... ..........
Amok" ,, CREST
TODplq'
909W.21stSt.•PO.BOZ501
w .cresichevy.com Son Bernordino.,CA 92402-0501
Phone(909)883-8833 i
FAX (9D9)885.4418 i•n••••••••o•ww••i
DON JOHNSON
CITY OF SAN BERNARDINO
182 S SIERRA WAY
SAN BERNARDINO
SUB=:SCff;ARZE M-6000 GNG 2009 STERLING CHASSIS
DEAR MR JOHNSON,
AS PER OUR CONVERSATION CREST CHEVROLET WILL HANDLE TEE DIN
PAPERWORK FOR A FEE OF $250.00 THIS IS A LIST OF THE CHARGES FROM
KELLY,THE DMV PAPERWORK,AND THE CALIFORNIA STATE TIRE FEE FOR
EACH UNIT.
BASE PRICE $291,288.00
SALES TAR 9% 26,215.92
SUB TOTAL, 317,514.42
TIRE FEE 10.50
CREST CHARGE FOR DMV PAPERWORK 250.00
TOTAL, $317,764.42
ME IF YOU HAVE ANY QUESTIONS
1CY
L
DANNY ZANK
FLEET MANAGER
Factory Authorized Sales and Service
SALES SERVICE PARTS RENTALS
1884 WOODLAWN STREET,UPLAND,CA 91786
� � TEL 909.920.4557 FAX.909.920.4558 TF.800.288.7933
Equipment WWW.KELLYEOUIPMENT.COM SUPPORTOKELLYEWIPMENT.COM
PROPOSAL
Contact: Don Johnson Proposal Date:9-Nov-2009- Terms: COD or Finance
Company:City of San Bernardino Created By:S.McElvy Status: New Order
Address:300 N.D Street Manufacturer: Scl warze Delivery:270-300 Days ARO
City,State ZJp: San Bamanllno CA 92418 Unit Model: M-6000ONG Stock#: Order
Telephone: ChassisRrect ir:Sterling ACadre Expires:28-Feb-10
Fax: FOB Point.Upland,CA
E-Mall Address: Special Instructions: Pricing Valid through November 28,2009
Unit Sp 'f adons Model: New Schwarze M-60DOCNG
S.000bk Yard Hgh Dump Hopper Single Engine Deegn -
Dump Height 16-Inches to 139-Inches Variable Conveyor Type Ekveror wah Chain and steadiest Drive Squeegee
14,00016x.Hopper Ult Capital Winch Main Boom
Duld4e-Inch Gutter Brooms Pneumatic Main Broom Pattern Control,In Cab Adjustment
Dual Gutter Broom ril Hydraulic.In Cab Control 3-Way Passive ElaysIx AdjunmsM
Pneumatic Gutter Braom Down Pressure Contra[ Elevator Jam Alarm anti IMlmtor
3004tallon Water Storage Tank 35-Gallon Hydraulic Resewolr
From Mounted Spray Bar Dual Gutter Broom Flood Ughts
Main Boom Spry Bar Rear Mounted Main Broom Flood Lights
Goner Boom Spray BaKsl Rear Mounted Stobe Beason with Guard
Water level Gauge In Cab Cad Mounted Strabe Beacon wgb Guard
12-Volt Electric Water Pump standard 124hanih Warranty
AQ5 Pule 1186 and 1186.1 Certified(PM-10 Cardfied) Paint Standard Whtte
T et r Sp '9 tt s Model:2009 Sterling Aelem Conventional Chassis
Dummpm 6.9 Leer CNG Engine 131truh wheel Base Conven0or,tl Cheuu
Allison ROS-35W SSpead Automffiic Transmission Dual Steering and Contrail
33.000 to,GV WR Chassis Dual AV Rise Seals
Air Conditioned Cab Cmiv Control
AMIFMICO sm.. spreaders
2-Speed Rear Ade Grey Vinyl Interim
Chalmers Rear Suspension system Standard 2-Year UNimited Mile Chit Warranty
Paled Standard While Standard 1Year Transmisebn Warranty
24 nth Towing Warranty,Slerlinp Chassis Warranty:Allison Transmission,SYasm
Auto Lube System Womanly:Cummins Engine,&Years.303.000 Maps
options[Equipment Available included with Proposal
On Site Service and Operator Training No Chame $
On she Warranty Repair Sweeper No Charge $
5 $
Unit Pricing:
�® y Unit Price: $ 284,770.00
--; % other: San eemardim Pncing Structure 83435 S (a,980.OD)
Una Tobk $ 285,788.00
Fil l M,Delive and PDI $ 5,500.03
B 7
__y. 4 Dawmee Tale,Fee: E
State Tire Tae,Per Tue 8 � S1.7S E 10.50
;" Celifumie Smad Sales Tax: 8.75X Rate E 25.006.45
Total Pnce FOB Destination S 316,]00.85
Financing I i
Lease or Loan: Amoum to Finance: $ - Down Payment $
Length of Term: Lease Residual: $ Doc Fee $
Proposed Lander.. Interest Rate: Monthly Payment $ Pkil
Order Terms and Conditions
PosevaneforerJayaW dea sbemisa.... above.Tamsare CODpr60self aalgleny financing nil" re Instock uNK aresWid dIdmvia.nstlameart btu
eSlimala endaWjen tp delays beyad our contra. FlnrtranB teTro Promised for budpaMry Wmasa aNy anti one vMepis metlil epprpvel. Hew aWipmaM is geaaO wNb ail slmtlard
biumearternso. Aadilpnel warten118a Tray Ce avalladk but am nal pan of a,is gOposBl unlCJ9 eU2wise sr]IM. MuIY Mlt ersreCiriC UNl dlacWnlsrNy rtgrPre puKlKe denea
more units. A15:4 nwrrduMWde Iroaty deposit is r&ryYeb for all spatial Order ek,vo,a 1.
Kelly Equipment Customer
Signature Signature
Name Name
This Title