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HomeMy WebLinkAbout13- Finance CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Barbara Pachon, Director of Finance Subject: Approval of Master Lease-Purchase Agreement Dept: Finance Date: June 3, 1998 ORIGINAL Synopsis of Previous Council Action: None Recommended Motion: Adopt resolution -z-e-z4".% ignature Contact Person: John P. Murphy, Purchasing Manager Phone: (909) 384-5086 Supporting data attached: Staff Report Ward: City Wide FUNDING REQUIREMENTS: Amount: -0- Source: (ACCT. No.) N/A (Acct. Description) N/A Finance: Council Notes: Agenda Item No. 113 .110ig CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT: Approval of Lease-Purchase Master Agreement BACKGROUND: First Municipal Leasing Corporation ("FMLC") has requested to be given the opportunity to provide financing for our capital purchases. The past practice has been for the Mayor and Common Council to approve a Master Lease-Purchase Agreement first, before any rate quotes are solicited from any financial institution. Exhibit "A" is the proposed Master Lease-Purchase Agreement for this vendor. Once a Master Lease-Purchase Agreement is approved, that vendor is allowed to quote on any subsequent financing opportunities. There are ten approved Master Leases currently in effect. FINANCIAL IMPACT: This action does not obligate any funds. Individual leases are individually presented to the Mayor and Common Council for approval. RECOMMENDATION: The Mayor and Common Council adopt the resolution approving the Master Lease- Purchase Agreement for FMLC. OOFT 1 RESOLUTION NO. . 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN 3 BERNARDINO ACCEPTING LEASE PURCHASE MASTER AGREEMENT FOR FIRST MUNICIPAL LEASING CORPORATION FOR THE FURNISHING OF LEASE PURCHASE 4 FINANCING. 5 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 6 SECTION t. That Equipment Lease-Purchase Master Agreement with First Municipal 7 Leasing Corporation (the "Agreement"), a copy of which is attached hereto and incorporated herein as Exhibit"A", is approved by the City of San Bernardino for the furnishing of Lease- 8 Purchase Financing. SECTION 2. The City shall not be obligated under the Agreement unless and until 9 actual financing is required for a specific lease purchase. 10 SECTION 3. No transactions shall be initiated under this Master Lease Agreement without the approval by the Mayor and Common Council as a separate schedule under the 11 Master Lease Agreement. 12 13 14 uui 15 16 17 18 19 loll 20 uiu 21 nui 22 nui 23 iuu 24 uai 25 mu 26 27 3 28 / 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACCEPTING LEASE PURCHASE MASTER AGREEMENT FOR FIRST . 2 MUNICIPAL LEASING CORPORATION FOR THE FURNISHING OF LEASE PURCHASE FINANCING. 3 4 1 HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and Common 5 Council of the City of San Bernardino at a meeting thereof held on the day of , 199_, by the following vote, to wit: 6 7 COUNCILMEMBERS AYES NAYS ABSTAIN ABSENT 8 ESTRADA 9 LIEN 10 ARIAS 11 SCHNETZ 12 DEVLIN 13 ANDERSON • 14 MILLER 15 16 Rachel Clark, City Clerk 17 18 The foregoing resolution is hereby approved this day of 19 19 20 21 Judith Valles, Mayor City of San Bernardino 22 23 Approved as to form and legal content: 24 25 JAMES F. PENMAN City Attorney 26 By. 27 � 28 LEASE WITH OPTION TO PURCHASE AGREEMENT • THIS LEASE WITH OPTION TO PURCHASE AGREEMENT (this Lease) dated as of this ____ day of 1999, is made and entered into by and between First Municipal Leasing Corporation, a corporation duly organized and existing under the laws of the state of Colorado as lessor(Lessor), whose principal business address is as shown on the execution page hereof; and the City of San Bernardino, a political subdivision of the state of California as lessee (Lessee), whose address is as shown on the execution page hereof. ARTICLE I: DEFINITIONS AND EXHIBITS Section 1.1. Definitio Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease, have the meanings herein specified. Contractor Each of the manufacturers or vendors from whom Lessee has ordered or will order or with whom Lessee has contracted or will contract for the manufacture, delivery and/or installation of an Equipment Group or any portion thereof. Equipment Group. An item or items of personal property designated from time to time by Lessee which are described in an Equipment Schedule, and which are being or will be leased with option to purchase by Lessee pursuant to this Lease. • FFouipment Schedule: A schedule consisting of the separate but hire numbered pages in the form provided in Exhibits A and B which have been completed with respect to an Equipment Group and executed by Lessor and Lessee as indicated therein. Fiscal Year: The twelve month fiscal period of Lessee which commences on in every year and ends on the following Interest: The portion of any Rental Payment designated as and comprising interest as shown in any Equipment Schedule. Lease: With respect to each Equipment Group, this Lease with Option to Purchase Agreement and the Equipment Schedule in which such Equipment Group is described, which shall constitute a separate contract relating to such Equipmenrt Group. • Interest: The portion of any Rental Payment designated as and comprising • interest as shown in any Equipment Schedule. Lease: With respect to each Equipment Group, this Lease with Option to Purchase Agreement and the Equipment Schedule in which such Equipment Group is described, which shall constitute a separate contract relating to such Equipment Group. Net Proceeds: Any insurance proceeds or condemnation award, paid with respect to any Equipment Group, remaining after payment therefrom of all expenses incurred in the collection thereof. Non-Appropriation: The failure of Lessee's governing body to appropriate money for any Fiscal Year of Lessee sufficient for the continued performance of this Lease by Lessee with respect to any Equipment Group as evidenced by the passage of a resolution by Lessee's governing body specifically prohibiting Lessee from paying the Rental Payments due with respect to any Equipment Group in a specified Fiscal Year and all subsequent Fiscal Years during the Term of this Lease with respect thereto. Payment Date: The date upon which any Rental Payment is due and payable as provided in any Equipment Schedule. Permitted Encumbrances: As of any particular time: (i) liens for taxes and assessments not then delinquent, (ii) this Lease and amendments hereto, and (iii) Lessor's • interest in any Equipment Group. Principal: The portion of any Rental Payment designated as principal in any Equipment Schedule. Purchase Option Price: With respect to any Equipment Group, as of the Payment Dates specified in the Equipment Schedule relating thereto, the amount so designated and set forth opposite each such date in such Equipment Schedule. Rental Payment: With respect to any Equipment Group, the payment due from Lessee to Lessor on each Payment Date during the Term of this Lease, as shown in the Equipment Schedule relating thereto. Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered any Equipment Group from a Contractor. State: The State of California. • . LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 2 State and Federal Law or Laws: The Constitution and any law of the State • and any charter, ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the United States, and any rule or regulation of any federal agency. Term of this Lease or Lease Term: With respect to any Equipment Group, the period during which this Lease is in effect as specified in Section 4.1. Section 1.2. Exhibits. The following Exhibits are attached to and by reference made a part of this Lease: Exhibit A: A form of schedule describing an Equipment Group being leased by Lessee pursuant to this Lease, and setting forth the date and amount of each Rental Payment coming due during the Lease Term with respect to the Equipment Group, the amount of such Rental Payments comprising Principal and Interest, and the price at which Lessee may exercise its option to purchase Lessor's interest in such Equipment Group in accordance with Article X. The serial or other identifying numbers relating to the Equipment Group, if any, and the due date of each Rental Payment shall be inserted when available. Exhibit B: A form of Certificate of Acceptance of Lessee indicating that the Equipment Group described therein has been delivered and installed in accordance with the Specifications, and has been accepted by Lessee, the date on which Rental Payments shown in the page of Exhibit A relating thereto shall commence, and that certain other requirements have been met by Lessee. Exhibit C: A form of opinion of counsel to Lessee as to the organization, nature and powers of Lessee, the validity, execution and delivery of this Lease and various related documents; the absence of litigation; and related matters. ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS Section 2.1. Representations, Warranties and Covenants of Lessee. Lessee represents and warrants to and covenants with Lessor with respect to this Lease and each Equipment Group, as follows: (a) Lessee is a political subdivision of the State, duly organized and existing under the Constitution and laws of the State, and is authorized under the Constitution and laws of the State to enter into this Lease and the transactions contemplated hereby, and to perform all of its obligations hereunder. (b) The execution and delivery of this Lease (and all documentation relating to any Equipment Group) by the officer of Lessee executing it has been duly authorized by a duly adopted resolution of Lessee's governing body, or by other appropriate official • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 3 action, and such action has complied and/or will comply with all public bidding and other • State and Federal Laws applicable to this Lease and the acquisition and financing of the Equipment Group(s) by Lessee. (c) Lessee will use the Equipment Group(s) during the Lease Term relating thereto only to perform essential governmental functions. (d) Lessee will take no action that would cause the Interest portion of the Rental Payments to become includible in gross income of the recipient for federal income tax purposes under the Internal Revenue Code of 1986, as amended (the Code) and Treasury Regulations promulgated thereunder (the Regulations), and Lessee will take and will cause its officers, employees and agents,to take all affirmative actions legally within its power necessary to ensure that the Interest portion of the Rental Payments does not become includible in gross income of the recipient for federal income tax purposes under the Code and Regulations. (e) Lessee will submit to the Secretary of the Treasury information reporting statements and other information relating to this Lease and each Equipment Group at the times and in the forms required by the Code and the Regulations. (f) Upon delivery and installation of any Equipment Group, Lessee will provide to Lessor a completed and executed copy of a Certificate of Acceptance relating thereto in the form attached hereto as Exhibit B, and an opinion of its legal counsel in the • form attached hereto as Exhibit C, provided that if Lessor and Lessee agree to use the Alternative Procedure set forth in Section 3.4 hereof such legal opinion shall be provided to Lessor upon execution of the Escrow Agreement. (g) Lessee has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all Rental Payments required to be paid under the Lease during the current fiscal year of Lessee, and such moneys will be applied in payment of all such Rental Payments due and payable during such current fiscal year. Section 2.2. Representations and Warranties of Lessor. Lessor represents and warrants to Lessee as follows: (a) Lessor is a corporation duly organized, existing and in good standing under and by virtue of the laws of the state of Colorado, and if necessary is duly qualified, in good standing as a foreign corporation and authorized to transact business in the State; has power to enter into this Lease; is possessed of full power to own and hold real and personal property, and to lease the same; and has duly authorized the execution and delivery of this Lease. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 4 (b) Neither the execution and delivery of this Lease, nor the fulfillment of or compliance with the terms and conditions thereof, nor the consummation of the transactions contemplated thereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which Lessor is now a party or by which Lessor is bound, constitutes a default under any of the foregoing, or results in the creation or imposition of any lien, charge or encumbrance whatsoever upon any of the property or assets of Lessor, or upon any Equipment Group except Permitted Encumbrances. ARTICLE III: LEASE OF EQUIPMENT GROUP Section 3.1. Acquisition of Equipment Group. Lessee shall advise Lessor of its desire to lease an Equipment Group and of the desired lease terms. Upon agreement by Lessor and Lessee as to the lease of the Equipment Group and such terms, Lessee shall order the Equipment Group from the appropriate Contractor or Contractors and notify Lessor in writing of the Equipment Group cost and the estimated delivery period, whereupon Lessor shall furnish to Lessee a proposed schedule in the form attached Exhibit A relating to the Equipment Group completed insofar as possible. Nothing herein shall obligate Lessor to lease any Equipment Group to Lessee until Lessor shall have so concurred in writing to the lease of any Equipment Group. Section 3.2. Equipment Group Delivery: Documentation. Upon delivery of any Equipment Group, Lessee shall inspect such Equipment Group, and if such Equipment • Group meets Lessee's Specifications, Lessee shall within three (3) business days from the date of delivery of the Equipment Group provide to Lessor a completed and executed copy of a Certificate of Acceptance relating thereto in the form attached hereto as Exhibit B, and a completed and executed copy of the related Exhibit A. Simultaneously with the delivery, Lessor and Lessee shall take all actions necessary to vest legal title to the Equipment Group in Lessee, and to perfect a security interest therein in favor of Lessor or a person, firm or corporation designated by it. Section 3.3. Lease: Enjoyment: Inspection. Lessor hereby leases each Equipment Group made subject to this Lease to Lessee, and Lessee hereby leases such Equipment Group from Lessor, upon the terms and conditions set forth in this Lease. Lessor hereby covenants to provide Lessee during the Term of this Lease with the quiet use and enjoyment of the Equipment Group, and Lessee shall during the Term of this Lease peaceably and quietly have and hold and enjoy the Equipment Group, without suit, trouble or hindrance from Lessor, except as expressly set forth in this Lease. Lessor will, at the request of Lessee and at Lessee's cost, join in any legal action in which Lessee asserts its right to such possession and enjoyment to the extent Lessor lawfully may do so. Lessee agrees that Lessor shall have the right at all reasonable times to examine and inspect the Equipment Group. Lessee further agrees that Lessor shall have such rights of access to the LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 5 Equipment Group as may be reasonably necessary to cause the proper maintenance of the • Equipment Group in the event of failure by Lessee to perform its obligations hereunder. Section 3.4. Alternative Procedure: Escrow Agreement. Notwithstanding the provisions of Sections 3.1 and 3.2, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired and leased by Lessee under this Lease, Lessor and Lessee enter into an escrow agreement establishing a fund from which the Equipment Group cost is to be paid, and an amount sufficient, together with anticipated interest earnings thereon, to pay such cost is deposited therein by Lessor: (a) Lessor and Lessee shall immediately complete and execute an Exhibit A relating to the Equipment Group, and (b) the Rental Payments relating to the Equipment Group shall be due and payable commencing upon execution of and as provided in such Exhibit,A. ARTICLE IV: TERM OF LEASE Section 4.1. Lease Term. This Lease shall be in effect for a Term commencing upon its date of execution and ending when the Term applicable to all Equipment Groups subject hereto has ended as provided in Section 4.5. This Lease shall be in effect with respect to each Equipment Group for a Term commencing upon the date of execution of the Equipment Schedule relating thereto and ending as provided in Section 4.5. Section 4.2. Termination by Lessee. In the sole event of Non-Appropriation with respect to an Equipment Group, Lessee shall have the right to terminate this Lease with respect to such Equipment Group, at the end of any Fiscal Year of Lessee, in the manner and subject to the terms specified in this Section and Sections 4.4 and 4.5. Lessee may effect such termination by giving Lessor a written notice of termination and by paying to Lessor any Rental Payments and other amounts with respect to the Equipment Group which are due and have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to give notice of such termination not less than sixty (60) days prior to the end of such Fiscal Year, and shall notify Lessor of any anticipated termination. In the event of termination of this Lease with respect to an Equipment Group as provided in this Section, Lessee shall deliver possession of such Equipment Group to Lessor in accordance with Section 12.3, and shall convey to Lessor or release its interest in such Equipment Group within thirty (30) days after the termination of this Lease with respect thereto. Section 4.3. Intent to Continue Lease Term; Appropriations. Lessee presently intends to continue this Lease for its entire Term with respect to each Equipment Group made subject hereto and to pay all Rental Payments relating thereto. The person or entity in charge of preparing Lessee's budget will include in the budget request for each Fiscal Year the Rental Payments to become due in such Fiscal Year with respect to each Equipment Group, and will use all reasonable and lawful means available to secure the appropriation of money for such Fiscal Year sufficient to pay all such Rental Payments • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 6 coming due therein, and Lessee reasonably believes that moneys in an amount sufficient to • make all such Rental Payments can and will lawfully be appropriated and made available for this purpose. Section 4.4. Effect of Termination. Upon termination of this Lease with respect to an Equipment Group as provided in Section 4.2, Lessee shall not be responsible for the payment of any additional Rental Payments relating thereto coming due in succeeding Fiscal Years, but if Lessee has not delivered possession of the Equipment Group to Lessor in accordance with Section 12.3 and conveyed to Lessor or released its interest in such Equipment Group within thirty (30) days after the termination of this Lease with respect thereto, the termination shall nevertheless be effective, but Lessee shall be responsible for the payment of damages in an amount equal to the amount of the Rental Payments thereafter coming due with respect to such Equipment Group which are attributable to the number of days after such thirty (30) day period during which Lessee fails to take such actions and for any other loss suffered by Lessor as a result of Lessee's failure to take such actions as required. Section 4.5. Termination of Lease Term. The Term of this Lease with respect to any Equipment Group will terminate upon the occurrence of the first of the following events: (a) the termination of this Lease by Lessee in accordance with Section 4.2; (b) the exercise by Lessee of its option to purchase Lessor's interest in the Equipment Group pursuant to Article X; (c) a default by Lessee and Lessor's election to terminate this Lease pursuant to Article XII; or (d) the payment by Lessee of all Rental Payments and all • other amounts authorized or required to be paid by Lessee hereunder with respect to the Equipment Group. ARTICLE V: RENTAL PAYMENTS Section 5.1. Rental Payments. Lessee agrees to pay Rental Payments with respect to each Equipment Group during the Term of this Lease relating thereto, in the amounts and on the dates specified in the Equipment Schedule relating thereto. A portion of each Rental Payment is paid as and represents the payment of Interest. Exhibit A of each Equipment Schedule sets forth the Interest component of each Rental Payment. All Rental Payments shall be paid to Lessor, or to such other person(s) or entity(ies) to which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor or such assignee may from time to time designate by written notice to Lessee. Lessee shall pay the Rental Payments exclusively from moneys legally available therefor, in lawful money of the United States of America. Section 5.2. Current Expense. The obligations of Lessee under this Lease, including its obligation to pay the Rental Payments due with respect to any Equipment Group, in any Fiscal Year for which this Lease is in effect, shall constitute a current expense of Lessee for such Fiscal Year and shall not constitute indebtedness of Lessee within the • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 7 meaning of the Constitution and laws of the State. Nothing herein shall constitute a pledge . by Lessee of any taxes or other moneys, other than moneys lawfully appropriated from time to time by or for the benefit of Lessee for this purpose and the proceeds or Net Proceeds of the Equipment Group, to the payment of any Rental Payment or other amount coming due hereunder. Section 5.4. Rental Payments to be Unconditional. Except as provided in Section 4.2, the obligation of Lessee to make Rental Payments or any other payments required hereunder shall be absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor or any other person, Lessee shall make all Rental Payments and other payments required hereunder when due and shall not withhold any Rental Payment or other payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or counterclaim against its obligation to make such Rental Payments or other payments required under this Lease. Lessee's obligation to make Rental Payments or other payments during the Lease Term shall not be abated through accident or unforeseen circumstances. However, nothing herein shall be construed to release Lessor from the performance of its obligations hereunder; and if Lessor should fail to perform any such obligation, Lessee may institute such legal action against Lessor as Lessee may deem necessary to compel the performance of such obligation or to recover damages therefor. ARTICLE VT: INSURANCE AND NEGLIGENCE Section 6.1. Liability Insurance. Upon ordering any Equipment Group and • prior to receipt of possession of the Equipment Group, Lessee shall take such measures as may be necessary to ensure that any liability for injuries to or death of any person or damage to or loss of property arising out of or in any way relating to the condition or the operation of the Equipment Group or any part thereof, is covered by a blanket or other general liability insurance policy maintained by Lessee. The Net Proceeds of all such insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which any Net Proceeds may be paid. Section 6.2. Property Insurance. Upon receipt of possession of any Equipment Group, Lessee shall have and assume the risk of loss with respect thereto. Lessee shall procure and maintain continuously in effect during the Term of this Lease, all- risk insurance, subject only to the standard exclusions contained in the policy, in such amount as will be at least sufficient so that a claim may be made for the full replacement cost of any part of the Equipment Group damaged or destroyed and to pay the applicable Purchase Option Price of the Equipment Group. Such insurance may be provided by a rider to an existing policy or under a separate policy. Such insurance may be written with customary deductible amounts. The Net Proceeds of insurance required by this Section shall be applied to the prompt repair, restoration or replacement of the Equipment Group, or to the purchase of the Equipment Group, as provided in Section 6.7. Any Net Proceeds not needed for those purposes shall be paid to Lessee. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 8 • Section 6.3. Worker's Compensation Insurance. If required by State law, Lessee shall carry worker's compensation insurance covering all employees on, in, near or about any Equipment Group, and upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Term of this Lease. Section 6.4. Requirements For All Insurance. All insurance policies (or riders) required by this Article shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State; and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten (10) days before the cancellation or revision becomes effective. Each insurance policy or rider required by this Article VI shall name Lessor as an additional insured party and loss payee. Lessee shall deposit with Lessor policies (and riders) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), Lessee shall furnish to Lessor evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article, unless such insurance is no longer obtainable in which event Lessee shall notify Lessor of this fact. Section 6.5. Self-Insurance. Notwithstanding the provisions of Sections 6.1 through 6.3, Lessee may elect to meet the requirements of any such section through self- insurance provided by a Qualified Self-Insurance Program having coverage limits equal to • or greater than those specified in such Section. In such event Lessee shall give Lessor notice of such election and provide to Lessor a full, true and correct copy of all documents providing for the establishment and administration of the Qualified Self-Insurance Program. As used herein, Qualified Self-Insurance Program means a program of self-insurance which has been established by Lessee, or by Lessee and other political subdivisions of the State, pursuant to a State law specifically authorizing the program, and which is funded in a manner similar to commercial insurance or in a manner specified in such State law. Section 6.6. Lessee's Negligence. Lessee assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to any Equipment Group and for injury to or death of any person or damage to any property, whether such injury or death be with respect to agents or employees of Lessee or of third parties, and whether such property damage be to Lessee's property or the property of others, which is proximately caused by the negligent conduct of Lessee, its officers, employees and agents. Lessee hereby assumes responsibility for and agrees to reimburse Lessor for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorney's fees) of whatsoever kind and nature, imposed on, incurred by or asserted against Lessor that in any way relate to or arise out of a claim, suit or proceeding based in whole or in part upon the negligent conduct of Lessee, its officers, employees and agents, to the maximum extent permitted by law. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 9 • Section 6.7. Damage to or Destruction of Equipment Group. If after delivery of any Equipment Group to Lessee all or any part of the Equipment Group is lost, stolen, destroyed or damaged beyond repair, Lessee shall as soon as practicable after such event either: (a) replace the same at Lessee's sole cost and expense with equipment of equal or greater value to the Equipment Group immediately prior to the time of the loss occurrence, such replacement equipment to be subject to Lessor's reasonable approval, whereupon such replacement shall be substituted in this Lease by appropriate endorsement; or (b) pay the applicable Purchase Option Price of the Equipment Group as set forth in Exhibit A. Lessee shall notify Lessor of which course of action it will take within fifteen (15) days after the loss occurrence. If Lessee fails or refuses to notify Lessor within the required period, Lessor may, at its option, declare the applicable Purchase Option Price of the Equipment Group set forth in Exhibit A immediately due and payable, and Lessee shall be obligated to pay the same. The Net Proceeds of all insurance payable with respect to the Equipment Group shall be available to Lessee and shall be used to discharge Lessee's obligation under this Section. On payment of the Purchase Option Price with respect to any Equipment Group, this Lease shall terminate with respect to such Equipment Group and Lessee thereupon shall become entitled to such Equipment Group AS IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any lien or encumbrance created by or arising through Lessor. • ARTICLE VII: OTHER OBLIGATIONS OF LESSEE Section 7.1. Use: Permits. Lessee shall exercise due care in the installation, use, operation and maintenance of all Equipment Groups, and shall not install, use, operate or maintain the Equipment Groups improperly, carelessly, in violation of any State and Federal Law or for a purpose or in a manner contrary to that contemplated by this Lease. Lessee shall obtain all permits and licenses necessary for the installation, operation, possession and use of the Equipment Groups. Lessee shall comply with all State and Federal Laws applicable to the installation, use, possession and operation of the Equipment Groups, and if compliance with any such State and Federal Law requires changes or additions to be made to the Equipment Groups, such changes or additions shall be made by Lessee at its expense. Section 7.2. Maintenance of Equipment Group by Lessee. Lessee shall, at its own expense, maintain, preserve and keep the Equipment Groups in good repair, working order and condition, and shall from time to time make all repairs and replacements necessary to keep the Equipment Groups in such condition. Lessor shall have no responsibility for any of these repairs or replacements. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 10 Section 7.3. Taxes Other Governmental Charges and Utility Charges. • Except as expressly limited by this Section, Lessee shall pay all taxes and other governmental charges of any kind which are at any time lawfully assessed or levied against or with respect to any Equipment Group, the Rental Payments or any part thereof, or which become due during the Term of this Lease, whether assessed against Lessee or Lessor Lessee shall also pay when due all gas, water, steam, electricity, heat, power, telephone, and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment Groups, and all special assessments and charges lawfully made by any governmental body for public improvements that may be secured by a lien on the Equipment Groups; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as are required to be paid during the Term of this Lease as and when the same become due. Lessee shall not be required to pay any federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit, excess profit, capital stock, corporate, or other similar tax payable by Lessor, its successors or assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge which is the obligation of Lessee under this Section. Section 7.4. Advances. If Lessee shall fail to perform any of its obligations under this Article, Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure, including the advancement of money, and Lessee shall be obligated to repay all such advances on demand, with interest at the rate of 18% per annum or the maximum rate permitted by law, whichever is less, from the date of the advance to • the date of repayment. ARTICLE VIII: TITLE, SECURITY INTEREST; LIENS Section 8.1. Title. During the Term of this Lease with respect to any Equipment Group, and so long as Lessee is not in default under Article XII, legal title to the Equipment Group and any and all repairs, replacements, substitutions and modifications to it shall be in Lessee. Upon termination of this Lease with respect to any Equipment Group pursuant to Section 4.2 or Article XII hereof, full and unencumbered legal title to such Equipment Group shall pass to Lessor, and Lessee shall have no further interest therein. In either of such events, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of legal title to such Equipment Group to Lessor and the termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment Group to Lessor in accordance with Section 12.3. Upon termination of this Lease with respect to any Equipment Group through exercise of Lessee's option to purchase pursuant to Article X or through payment by Lessee of all Rental Payments and other amounts relating thereto, Lessor's security or other interest in such Equipment Group shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security or other interest in such Equipment Group. • LEASE WYM OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page l I • Section 8.2. Security Interest. Lessee grants to Lessor a continuing, first priority security interest under the Uniform Commercial Code or, if applicable, other State law in each Equipment Group, the proceeds thereof and all repairs, replacements, substitutions and modifications thereto or thereof made pursuant to Section 8.5, in order to secure Lessee's payment of all Rental Payments with respect thereto due during the Term of this Lease and the performance of all other obligations herein to be performed by Lessee. Lessee will join with Lessor in executing such financing statements or other documents and will perform such acts as Lessor may request to establish and maintain a valid first lien and perfected security interest in each Equipment Group. If requested by Lessor, Lessee shall conspicuously mark each Equipment Group with appropriate lettering, labels or tags, and maintain such markings during the Term of this Lease, so as clearly to disclose Lessor's security interest in the Equipment Group. Section 8.3. Liens. During the Term of this Lease, Lessee shall not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Equipment Groups, other than the respective rights of Lessor and Lessee as herein provided and Permitted Encumbrances. Except as expressly provided in Section 7.3 and this Article, Lessee shall promptly, at its own expense, take such action as may be necessary duly to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim if the same shall arise at any time. Lessee shall reimburse Lessor for any expense incurred by Lessor in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. • Section 8.4. Installation of Lessee's Equipment. Lessee may at any time and from time to time, in its sole discretion and at its own expense, install other items of equipment in or upon any Equipment Group, which items shall be identified by tags or other symbols affixed thereto as property of Lessee, shall remain the sole property of Lessee, and may be modified or removed by Lessee at any time provided that Lessee shall repair and restore any and all damage to the Equipment Group resulting from the installation, modification or removal of any such items. Section 8.5. Modification of Equipment Grou . Lessee shall, at its own expense, have the right to make repairs to the Equipment Group, and to make repairs, replacements, substitutions and modifications to all or any of the parts thereof All such work and any part or component used or installed to make a repair or as a replacement, substitution or modification, shall thereafter comprise part of the Equipment Group and be subject to the provisions of this Lease. Such work shall not in any way damage the Equipment Group or cause it to be used for purposes other than those authorized under the provisions of State and Federal Law or those contemplated by this Lease; and the Equipment Group, upon completion of any such work shall be of a value which is not less than the value of the Equipment Group immediately prior to the commencement of such work. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 12 • Section 8.6. Personal Propert y. Each Equipment Group is and shall at all times be and remain personal property notwithstanding that the Equipment Group or any part thereof may be or hereafter become in any manner affixed or attached to or embedded in or permanently rested upon real property or any building thereon or attached in any manner to what is permanent by means of cement, plaster, nails, bolts, screws or otherwise. ARTICLE IX: WARRANTIES Section 9.1. Selection of Equipment Group. Each Equipment Group and the Contractor therefor have been selected by Lessee, and Lessor shall have no responsibility in connection with the selection of such Equipment Group, its suitability for the use intended by Lessee, the acceptance by the Contractor or its sales representative of the order submitted, or any delay or failure by the Contractor or its sales representative to manufacture, deliver or install the Equipment Group for use by Lessee. Lessee authorizes Lessor to add the serial number of any item in the Equipment Group to Exhibit A when available. Section 9.2. Installation and Maintenance of Equipment Group. Lessor shall have no obligation to install, erect, test, inspect, service or maintain the Equipment Group under any circumstances, but such actions shall be the obligation of Lessee or the Contractor. • Section 9.3. Contractor's Warranties. Lessor hereby assigns to Lessee for and during the Term of this Lease, all of its interest, if any, in all Contractor's warranties and guarantees, express or implied, issued on or applicable to any Equipment Group, and Lessor hereby authorizes Lessee to obtain the customary services furnished in connection with such warranties and guarantees at Lessee's expense. Section 9.4. Patent Infringement. Lessor hereby assigns to Lessee for and during the Term of this Lease all of its interest, if any, in patent indemnity protection provided by any Contractor with respect to any Equipment Group. Such assignment of patent indemnity protection by Lessor to Lessee shall constitute the entire liability of Lessor for any patent infringement by Equipment Groups furnished pursuant to this Lease. Section 9.5. Disclaimer of Warranties. EACH EQUIPMENT GROUP IS DELIVERED AS IS, AND LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF ANY EQUIPMENT GROUP, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO ANY EQUIPMENT GROUP. IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL OR • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 13 CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS LEASE OR ANY EQUIPMENT GROUP OR LESSEE'S USE OF ANY • EQUIPMENT GROUP. ARTICLE X: OPTION TO PURCHASE Section 10.1. When Available. Lessee shall have the option to purchase any Equipment Group on any Payment Date relating thereto, for the then applicable Purchase Option Price set forth in the page of Exhibit A relating thereto, but only if Lessee is not in default under this Lease, and only in the manner provided in this Article. Section 10.2. Exercise of Option. Lessee shall give notice to Lessor of its intention to exercise its option to purchase with respect to any Equipment Group not less than thirty (30) days prior to the Payment Date on which the option is to be exercised and shall deposit with Lessor on the date of exercise an amount equal to all Rental Payments and any other amounts relating to such Equipment Group then due or past due (including the Rental Payment relating thereto due on the Payment Date on which the option is to be exercised) and, the applicable Purchase Option Price set forth in the Equipment Schedule relating thereto. The closing shall be on the Payment Date on which the option is to be exercised at the office of Lessor. Section 10.3. Release of Lessor's Interest. Upon exercise of the purchase option with respect to any Equipment Group by Lessee, Lessor shall convey or release to • Lessee, all of its right, title and/or interest in and to the Equipment Group by delivering to Lessee such documents as Lessee reasonably deems necessary for this purpose. ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING Section 11.1. Assignment by Lessor. Lessor shall not assign its obligations under this Lease, and no purported assignment thereof shall be effective. All of Lessor's right, title and/or interest in and to any Equipment Schedule, Equipment Group, the Rental Payments and other amounts due with respect thereto, and the right to exercise all rights under this Lease relating to such Equipment Schedule and Group may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor at any time, without the consent of Lessee. No such assignment shall be effective as against Lessee unless and until the assignor shalt have filed with Lessee a copy or written notice thereof identifying the assignee. During the Lease Term Lessee shall keep a complete and accurate record of all such assignments. In the event Lessor assigns participations in its right, title and/or interest in and to any Equipment Schedule, Equipment Group, the Rental Payments and other amounts due with respect thereto, and the rights granted under this Lease relating thereto, such participants shall be considered to be Lessor with respect to their participated shares thereof, and Lessee hereby authorizes assignment in such participation form, subject to Lessor's notice obligations as set forth in this Section 11.1. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 14 • Section 11.2. Assignment and Subleasinyby Lessee. Neither this Lease nor Lessee's interest in an Equipment Group may be sold, assigned, transferred, pledged or mortgaged by Lessee without the written consent of Lessor. However, Equipment Group may be subleased by Lessee to a State agency or other political subdivision of the State for the performance of essential government services by such agency or subdivision without the consent of Lessor, provided that: (a) this Lease and the obligation of Lessee to make Rental Payments hereunder shall remain obligations of Lessee, and (b) the sublessee assumes the obligations of Lessee under the Lease with respect to the Equipment Group subleased to the extent of the interest subleased. Lessee shall immediately furnish to Lessor a true and complete copy of such sublease. No sublease shall cause the Interest component of the Rental Payments due with respect to,the Equipment Group to become includible in gross income of the recipient for federal income tax purposes. ARTICLE XH: EVENTS OF DEFAULT AND REMEDIES Section 12.1. Events of Default Defined. The following shall be "events of default" under this Lease and the terms "events of default" and "default" shall mean, whenever they are used in this Lease, any one or more of the following events: (a) Except as provided in Section 4.2, failure by Lessee to pay any Rental Payment or other payment required to be paid under this Lease with respect to any Equipment Group at the time specified herein and the continuation of said failure for a period of thirty (30) days. (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed with respect to any Equipment Group, other than as referred to in Clause (a) of this Section, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided, however, 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) The determination by Lessor that any representation or warranty made by Lessee in Section 2.1 was untrue in any material respect upon execution of this Lease. (d) The filing by Lessee of a voluntary petition in bankruptcy, or failure by Lessee promptly to lift any execution, garnishment or attachment of such consequence as would impair the ability of Lessee to carry on its governmental function or adjudication of Lessee as a bankrupt, or assignment by Lessee for the benefit of creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by a court of • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Berardino Page 15 competent jurisdiction of a petition applicable to Lessee in any proceedings instituted under • the provisions of the United States Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted. The provisions of this Section 12.1 and Section 12.2 are subject to the following limitation: if by reason of force majeure Lessee is unable in whole or in part to carry out its obligations under this Lease, other than its obligation to pay Rental Payments which shall be paid when due notwithstanding the provisions of this paragraph, Lessee shall not be deemed in default during the continuance of such inability. The term "force maieure" as used herein shall mean, without limitation, the following: acts of God; strikes, lockouts or other labor disturbances; acts of public enemies, orders or restraints of any kind of the government of the United States of America or the State or their respective departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides, earthquakes; fires, storms; droughts; floods; explosions; breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Lessee and not resulting from its negligence. Lessee agrees, however, to remedy with all reasonable dispatch the cause or causes preventing Lessee from carrying out its obligations under this Lease; provided that the settlement of strikes, lockouts and other labor disturbances shall be entirely within the discretion of Lessee and Lessee shall not be required to make settlement of strikes, lockouts and other labor disturbances by acceding to the demands of the opposing party or parties when such course is in the judgment of Lessee unfavorable to Lessee. • Section 12.2. Remedies on Default. Whenever any event of default referred to in Section 12.1 hereof shall have happened and be continuing, Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps: (a) With or without terminating this Lease, declare all Rental Payments with respect to each Equipment Group to which such event of default relates due or to become due during the Fiscal Year in effect when the default occurs to be immediately due and payable by Lessee, whereupon such Rental Payments shall be immediately due and payable. (b) With or without terminating this Lease, repossess any Equipment Group to which such event of default relates by giving Lessee written notice to deliver such Equipment Group to Lessor, whereupon Lessee shall return such Equipment Group to Lessor in accordance with Section 12.3, at Lessee's expense; or in the event Lessee fails to do so within ten (10) days after receipt of such notice, Lessor, at its option, may enter upon the premises where the Equipment Group is located and take immediate possession of and remove the same without liability to Lessor or its agents for such entry or for damage to property or otherwise. Notwithstanding the fact that Lessor has taken possession of any Equipment Group, Lessee shall continue to be responsible for the Rental Payments due with respect thereto during the Fiscal Year then in effect. If this Lease has not been terminated, • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 16 Lessor shall return the Equipment Group to Lessee at Lessee's expense when the event of default is cured. (c) If Lessor terminates this Lease and takes possession of any Equipment Group, within sixty (60) days thereafter use its best efforts to sell such Equipment Group or any portion thereof in a commercially reasonable manner at public or private sale in accordance with applicable State laws. Lessor shall apply the proceeds of such sale to pay the following items in the following order: (i) all costs incurred in securing possession of the Equipment Group; (ii) all expenses incurred in completing the sale; (iii) the applicable Purchase Option Price of the Equipment Group; and (iv) the balance of any Rental Payments owed by Lessee during the Fiscal Year then in effect with respect thereto. Any sale proceeds remaining after the requirements of Clauses (i), (ii), (iii) and (iv) have been met shall be paid to Lessee. (d) Exercise any other right, remedy or privilege which may be available to it under applicable law or in equity. Section 12.3. Return of Equipment Group. Upon the expiration or termination of this Lease with respect to any Equipment Group prior to the payment of all Rental Payments due with respect thereto, Lessee shall return such Equipment Group to Lessor in the condition, repair, appearance and working order required in Section 7.2, in the following manner as may be specified by Lessor: (a) by delivering the Equipment Group at Lessee's cost and expense to such place within the State as Lessor shall specify; or (b) by • loading such portions of the Equipment Group as are considered movable at Lessee's cost and expense, on board such carrier as Lessor shall specify and shipping the same, freight prepaid, to the place within the State specified by Lessor. If Lessee refuses to return the Equipment Group in the manner designated, Lessor may repossess the Equipment Group and charge to Lessee the costs of such repossession or pursue any remedy described in Section 12.2. Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease. 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 and power may be exercised from time to time and as often as may be deemed expedient by Lessor or its assignee. Section 12.5. Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Lease should default under any of the provisions hereof and the nondefaulting party should employ attorneys and/or incur other expenses for the collection of moneys or for the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 17 that it will be responsible for all reasonable costs and expenses, including attorneys' fees, as determined by court order or mutual agreement. The costs, salary and expenses of the • Lessee's City Attorney and members of his office in enforcing this contract on behalf of the Lessee shall be considered as"attorney's fees' for the purposes of this paragraph. Section 12.6. Late Charge. Whenever any event of default referred to in Section 12.1. Clause (a) hereof shall have happened and be continuing with respect to any Equipment Group, Lessor shall have the right, at its option and without any further demand or notice, to require a late payment charge for each thirty (30) day period or part thereof during which such event of default occurs equal to four percent (4 1/6) of the delinquent amount and Lessee shall be obligated to pay the same immediately upon receipt of Lessor's written invoice therefor, provided, however, that this Section 12.6 shall not be applicable if or to the extent that the application thereof would affect the validity of this Lease. ARTICLE XIII: ADMINISTRATIVE PROVISIONS Section 13.1. Notices. All notices, certificates, legal opinions or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in registered form with postage fully prepaid to the addresses specified on the execution page hereof provided that Lessor and Lessee, by notice given hereunder, may designate different addresses to which subsequent notices, certificates, legal opinions or other communications will be sent. Section 13.2. Financial Information. During the Term of this Lease, Lessee annually will provide Lessor with current financial statements, budgets, proof of • appropriation for the ensuing Fiscal Year and such other financial information relating to the ability of Lessee to continue this Lease as may be requested by Lessor or its assignee. Section 13.3. Binding Effect. This Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 13.4. Severabilily. in the event any provision of this 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 13.5. Amendments, Changns_and Modifications. This Lease may be amended or any of its terms modified only by written document duly authorized, executed and delivered by Lessor and Lessee. Section 13 6. CaR i n . The captions or headings in this Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses of this Leasc. LEASE WTM OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San tienuirdino Pagc 18 Section 13.7. Further Assurances and Corrective 1nstrum=. Lessor and • Lessee agree that they will, from time to time, exewte, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such fiuther instruments as may reasonably be required for correcting any inadequate or incorrect description of any Equipment Group hereby leased or intended so to be, or for otherwise carrying out the expressed intention of this Lease. Section 13.8. Execution in Countermn This Lease may be simultaneously executed in several counterparts, eaa of which shall be an original and all of which shall constitute but one and the same instrument. Section 13.9. Anficable Law. This Lease shall be governed by and construed in accordance with the laws of the State. • LEASE Wrni ornoN TO PURCUME AGRID50OWi First Mumapai Laaaing Cg9oratioa/City of San Bernardino • Page l9 • IN WITNESS WHEREOF, Lessor has caused this Lease to be executed in its corporate name by its duly authorized officer; and Lessee has caused this Lease to be executed in its name by its duly authorized officer, as of the date first above written. CITY OF SAN BERNARDINO, Lessee FIRST MUNICIPAL LEASING CORPORATION, Lessor By: By: Title: Title Address: Address: 300 North D Street 1905 Foothills Drive South San Bernardino, CA 92418 Golden, CO 80401 • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 20 EXHIBIT A • EQUIPMENT SCHEDULE NO. SCHEDULE OF EQUIPMENT GROUP, RENTAL PAYMENTS, ETC. The following equipment comprises an Equipment Group which is the subject of the Lease with Option to Purchase Agreement dated as of 1998, between the undersigned Lessor and Lessee: uantit Description Serial Number • • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 21 SCHEDULE OF RENTAL PAYMENTS RELATING TO EQUIPMENT GROUP • Annual Percentage Rate: % Interest Accrual Commencement Date Purchase Payment Due Total Principal Interest Option Number Date Paymen t m nent Component Prig • 'After payment of Rental Payment due on such date. CITY OF SAN BERNARDINO, Lessee FIRST MUNICIPAL LEASING CORPORATION, Lessor By: By: Title: Title Date: Date: • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 22 EXHIBIT B • EQUIPMENT SCHEDULE NO. CERTIFICATE OF ACCEPTANCE I, the undersigned, hereby certify that I am the duly qualified and acting of (Lessee); and, with respect to the above-referenced Equipment Schedule to the Lease With Option to Purchase Agreement dated as of , 1998 (the Lease), by and between Lessee and First Municipal Leasing Corporation (Lessor), that: 1. The following equipment described in the above-referenced Equipment Schedule Exhibit A, Item page A-_ (the Equipment Group) has been delivered and installed in accordance with Lessee's Specifications (as that term is defined in the Lease) and has been accepted by Lessee: • 2. The rental payments provided for in the above-referenced Equipment Schedule Exhibit A, page A- (the Rental Payments) shall commence and be due and payable on and each thereafter, in the amounts shown on such Equipment Schedule. 3. Lessee has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all Rental Payments required to be paid under the Lease during the current fiscal year of Lessee, and such moneys will be applied in payment of all such Rental Payments due and payable during such current fiscal year. 4. (Lessee has obtained from a reputable insurance company qualified to do business in the State of insurance with respect to all risks required to be covered by, and in accordance with, Article VI of the Lease.) (Lessee is providing self-insurance with respect to all risks required to be covered by, and in accordance with, Sections 6. 1, 6.2 and 6.4 of the Lease.)* 5. Lessee is exempt from all personal property taxes, and is (exempt from) (subject to)* sales and/or use taxes with respect to the Equipment Group and the Rental Payments. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 23 6. During the Lease Term (as defined in the Lease) the Equipment Group will be • used by Lessee to perform essential governmental functions. Such functions are: 7. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Lessee; the authority of Lessee or its officers or its employees to enter into the Lease with respect to the Equipment Group; the proper authorization, approval and execution of the Lease with respect to the Equipment Group and other documents contemplated thereby; the appropriation of moneys, or any other action taken by Lessee to provide moneys sufficient to make Rental Payments coming due under the Lease in Lessee's current fiscal year with respect to the Equipment Group; or the ability of Lessee otherwise to perform its obligations under the Lease and the transactions contemplated thereby with respect to the Equipment Group. Dated: , 19_. CITY OF SAN BERNARDINO, Lessee • By: Title: • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 24 • EXHIBIT C OPIMON OF COUNSEL (to be typed on letterhead) [Address to Lessee] [Address to Lessor] Re: Lease with Option to Purchase Agreement dated as of 199, by and between First Municipal Leasing Corporation(Lessor) and the City of San Bernardino (Lessee) Ladies and Gentlemen: I have acted as counsel to Lessee with respect to the Lease With Option to Purchase Agreement described above [and the Addendum for Escrow Funding]* (the Lease) and various related matters, and in this capacity have reviewed a duplicate original or certified copy of the Lease and the Exhibits attached thereto, and Equipment Schedules Nos. through_ (the Equipment Schedules) executed pursuant to the Lease [and an Escrow Agreement dated as of (the Escrow Agreement), by and between , as escrow agent, Lessor and Lessee]*. Based upon the examination of these • and such other documents as I deem relevant, it is my opinion that: I. Lessee is a political subdivision of the state of California (the State), duly organized, existing and operating under the Constitution and laws of the State. 2. Lessee is authorized and has power under applicable law to enter into the Lease and the Equipment Schedules [and the Escrow Agreement]*, and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Lease and the Equipment Schedules [and the Escrow Agreement)* have been duly authorized, approved, executed and delivered by and on behalf of Lessee, and are a valid and binding contract of Lessee enforceable in accordance with their terms, except to the extent limited by State and Federal laws affecting remedies and by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights. 4. The authorization, approval and execution of the Lease and such Equipment Schedules [and the Escrow Agreement]* and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all applicable open meeting, public bidding and all other laws, rules and regulations of the State. • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 25 • 5. The execution of the Lease and the Equipment Schedules and the appropriation of moneys to pay the Rental Payments coming due thereunder do not and will not result in the violation of any constitutional, statutory or other limitation relating to the manner, form or amount of indebtedness which may be incurred by Lessee. 6. There is no litigation, action, suit or proceeding pending or before any court, administrative agency, arbitrator or governmental body, that challenges the organization or existence of Lessee; the authority of Lessee or its officers or its employees to enter into the Lease and the Equipment Schedules [and the Escrow Agreement]*; the proper authorization, approval and/or execution of the Lease, the Equipment Schedules, [the Escrow Agreement]* and other documents contemplated thereby, the appropriation of moneys to make Rental Payments under the Lease for the current fiscal year of Lessee; or the ability of Lessee otherwise to perform its obligations under the Lease, the Equipment Schedules [the Escrow Agreement]* and the transactions contemplated thereby. Dated 19_. Very truly yours, • • LEASE WITH OPTION TO PURCHASE AGREEMENT First Municipal Leasing Corporation/City of San Bernardino Page 26 T< C r v o f 0 an Bernardino R A C H E L 0 _ A R K C I T Y C L E R K July 9, 1998 First Municipal Leasing Corporation 1905 Foothills Drive South Golden, CO 80401 At the Mayor and Common Council meeting of July 6, 1998, the City of San Bernardino adopted Resolution 98-178 accepting lease purchase master agreement for the furnishing of lease purchase financing. Enclosed are one (1) original agreement, and two (2) duplicate original agreements. Please obtain signatures where indicated and return the (1) original and one (1) duplicate original agreements to the City Clerk's Office, P.O. Box 1318, San Bernardino, CA, 92418 as soon as possible. Please keep one (1) fully executed duplicate original agreement for your files. If you have any questions, please do not hesitate to contact Melanie Miller at (909) 384- 5002. Sincerely, 74,e lf � � L, Rachel Clark City Clerk RC:mam Enclosures P . O . BOX 1318 , SAN 8E R N A R DI NO , CA 92402 3 0 0 N O R T H D S T R E E T S A N 8 E R N A R D I N 0 . C A L I F O R N I A 9 2 4 1 8 - 0 0 0 1 ( 9 0 9 ) 3 9 4 . 5 0 0 2 ( 9 0 9 ) 3 8 4 • 5 1 0 2 F A X . ( 9 0 9 ) 3 8 4 -5 1 5 8 T D D I T T Y - (9 0 9) 3 0 4 - S 5 4 0 L1VLJ FIRST MUNICIPAL LEASING CORPORATION® July 22, 1998 Rachel Clark City Clerk City of San Bernardino P. O. Box 1318 San Bernardino, CA 92418 Dear Rachel: Enclosed are one original and one duplicate original of the First Municipal Leasing Corporation / City of San Bernardino Lease With Option to Purchase Agreement. These copies are returned for your records, and are to be considered a matter of record to form the basis for future transactions. They do not constitute a current commitment by First Municipal Leasing Corporation to enter into a specific financing with the City. Any subsequent financing will be subject to approval of the financed equipment and the City's credit by the Lessor in such transaction on a case by case basis. First Municipal Leasing Corporation appreciates the opportunity to compete for the City's financing business. Should there be any questions, please call me on the toll tree line. �10 Sincerely nn I 'VE' I I IlUfu LYNN P. BARTSCH OO P. sc FIRST MUNICIPAL LEASING CORPORATION P sident 303-526-5851 lynn @fmlc.com 888-FAX-FMLC 888-456-0046 FAX 303-526-0529 CC w/o attachments: John Murphy 1905 Foothills Drive South • Golden, CO 80401 Purchasing Manager CITY OF SAN BERNARDINO 1905 Foothills Drive South • Golden, CO 80401 303-526-5851 • 888-456-0046 • 888-FAX-FMLC • FAX 303-526-0529