HomeMy WebLinkAboutContracts & Agreements_207-2006LEASE WITH OPTION TO PURCHASE f06 -060 -AF
This LEASE WITH OPTION TO PURCHASE dated September 5, 2006 (this
"Lease") is by and between MUNICIPAL FINANCE CORPORATION,
("Corporation") a corporation duly organized and operating under the
laws of the State of California as lessor and CITY OF REDLANDS, a
municipal corporation duly organized and existing under the laws of the
State of California ("Lessee") as lessee
RECITALS
WHEREAS, Lessee deems it essential for Lessee to
property described herein for its own public purposes, and
WHEREAS, it is intended that this Lease be treated as
obligation of Lessee for federal income tax purposes, and
WHEREAS, Lessee and Corporation agree to mutually cooperate now
and hereafter, to the extent possible, in order to sustain the intent
of this Lease and the bargain of both parties hereto
aoquiie the
a tax-exempt
WITNESSETH
NOW, THEREFORE in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows
SECTION 1 Lease Corporation hereby leases to Lessee, and
Lessee hereby leases and hires from Corporation all property (the
"Property") described in the schedule or schedules (collectively, the
"Schedule") executed by the parties concurrently herewith and hereafter
and made a part hereof Hereinafter, reference to Corporation means
Corporation and Corporation's assigns for those rights, interests and
obligations that may be assigned by Corporation
SECTION 2 Term The terms and conditions of this Lease shall
become effective upon the authorized execution of this Lease by the
parties hereto The rental term of the Property leased hereunder
commences and terminates on the dates specified in the Schedule
SECTION 3 Representations, Covenants and Warranties of
Lessee. Lessee represents, covenants and warrants to Corporation that
(a) Lessee is a municipal corporation and political subdivision,
duly organized and existing under the Constitution and laws of the
State of California with authority to enter into this Lease and to
perform all of its obligations hereunder
(b) Lessee's governing body has duly authorized the execution and
delivery of this Lease and further represents and warrants that all
requirements have been met and procedures followed to ensure its
enforceability
(c) The execution, delivery and performance of this Lease do not
and will not result in any breach of or constitute a default under any
indenture, mortgage, contract, agreement or instrument to which Lessee
is a party or by which it or its property is bound
(d) There is no pending or, to the knowledge of Lessee,
threatened action or proceeding before any court or administrative
agency which will materially adversely affect the ability of Lessee to
perform its obligations under this Lease
(e) Lessee has complied with all public bidding laws or
provisions of the California Public Contract Code applicable to the
acquisition of the Property leased hereunder
(f) The Property being leased is essential to Lessee in the
performance of its governmental functions and its estimated useful life
to Lessee exceeds the term of this Lease
(g) Within one hundred eighty (180) days of the end of each
fiscal year of Lessee during the term hereof, Lessee shall provide
Corporation with a copy of its audited financial statements for such
fiscal year
SECTION 4 Representations and Warranties of Corporation
Corporation represents and warrants to Lessee that:
(a) Corporation is duly organized, validly existing and in good
standing under the laws of the State of California, with full corporate
power and authority to lease and own real and personal property
(b) Corporation has full power, authority and legal right to
enter into and perform its obligations under this Lease, and the
execution, delivery and performance of this Lease have been duly
authorized by all necessary corporate actions on the part of
Corporation and do not require any further approvals or consents
(c) The execution, delivery and performance of this Lease do not
and will not result in any breach of or constitute a default under any
indenture, mortgage, contract, agreement or instrument to which
Corporation is a party by which it or its property is bound.
(d) There is no pending or, to the knowledge of Corporation,
threatened action or proceeding before any court or administrative
agency which will materially adversely affect the ability of
Corporation to perform its obligations under this Lease
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SECTION 5 Property Acquisition, Deposit of Moneys
Corporation hereby appoints Lessee as its purchasing agent to acquire
the Property leased hereunder and Lessee hereby accepts said
appointment (hereinafter, the "Agency") The Agency is limited to i)
negotiation of terms, conditions and acquisition cost of acquiring the
Property from suppliers and contractors (collectively, the "Supplier")
selected by Lessee, ii) to the inspection and acceptance of the
Property upon its delivery and installation, and 111) to the exercise
of any rights or remedies with respect to Property warranties or
guarantees. All warranties and guarantees, either express or implied,
that inure to Corporation by virtue of the Agency are hereby passed
through to Lessee to prosecute at Lessee's sole discretion.
The costs associated with the acquisition and installation of the
Property including appurtenant work and related expenses are set forth
in the Schedule. Corporation and Lessee agree that, in order to ensure
that moneys sufficient to pay all costs will be available for this
purpose when required, Corporation shall cause the financing amount
designated on the Schedule (the "Financing Amount") to be deposited to
a custodial account (the "Acquisition Account") and held in the name of
Corporation as custodian for the benefit of Lessee The date said
Financing Amount is initially deposited to the Acquisition Account is
defined as the Lease Issuance Date Disbursements may be made either
directly to the Supplier or to Lessee as a reimbursement of its prior
expenditures for Property costs Lessee shall deliver to Corporation a
disbursement authorization form along with Supplier invoices and
required reconciliation documents prior to Corporation making a
disbursement to the Supplier or a reimbursement to Lessee Corporation
shall receive a $50 fee per disbursement, which Corporation shall
deduct from the Acquisition Account without any further authorization
from Lessee Corporation shall retain at least ten percent (10%) of the
Financing Amount in the Acquisition Account until Lessee delivers to
Corporation a Certificate of Acceptance Any moneys that remain in the
Acquisition Account (including future earnings thereon) after
completing the disbursements for Property costs shall apply towards the
payment or prepayment (with applicable premium) of the principal
component of succeeding Rental Payments Upon final disbursement from
the Acquisition Account that shall occur no later than three years from
the Lease Issuance Date, the Acquisition Account shall be closed
SECTION 6 Lease Proceeds The Financing Amount deposited to
the Acquisition Account may be invested in interest bearing instruments
pursuant to written direction and authority given by Lessee Permitted
investments are those specified in Government Code Sections 53601 and
53635 Principal and interest earnings from each investment will be
deposited directly to the Acquisition Account The Financing Amount
plus earnings thereon shall constitute the Lease Proceeds available for
acquiring the Property (the "Lease Proceeds") Corporation shall be
responsible for the safekeeping of deposit certificates and other
investment confirmation documents With the exception of acts of gross
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negligence or willful misconduct by Corporation, Corporation will not
be held responsible for any investment losses for any reason whatsoever
and is indemnified and held harmless by Lessee In the event the Lease
Proceeds are not sufficient to pay for the Property due to insufficient
investment earnings or an increase in such costs subsequent to the
Lease Issuance Date, Lessee shall deposit additional moneys in the
Acquisition Account immediately upon request of Corporation or its
assignee sufficient to pay the remaining Property costs Failure by
Lessee to deposit the additional moneys will constitute a default under
the Lease
SECTION 7 Rental Payments LESSEE SHALL PAY CORPORATION
RENTAL PAYMENTS (the "Rental Payments") IN THE AMOUNTS AND AT THE TIMES
SET FORTH IN THE SCHEDULE, AT THE OFFICE OF CORPORATION OR TO SUCH
OTHER PERSON OR AT SUCH OTHER PLACE AS CORPORATION MAY FROM TIME TO
TIME DESIGNATE IN WRITING Should Lessee fail to pay any part of the
Rental Payments herein within fifteen (15) days from the due date
thereof, Lessee shall upon Corporation's written request, pay interest
on such delinquent Rental Payment from the date said Rental Payment was
due until paid at the rate of twelve percent (12%) per annum or the
maximum legal rate, whatever is less Lessee shall pay Rental Payments
exclusively from legally available funds, in lawful money of the United
States of America, to Corporation The obligation of Lessee to pay
Rental Payments hereunder shall constitute a current expense of Lessee
and shall not in any way be construed to be a debt of Lessee in
contravention of any applicable constitutional or statutory limitations
or requirements concerning the creation of indebtedness by Lessee, nor
shall anything contained herein constitute a pledge of the general tax
revenues of Lessee. Except as specifically provided in Section 29, the
obligation of Lessee to pay the Rental Payments will be absolute and
unconditional in all events, and will not be subject to set-off,
defense, abatement, reduction, counterclaim, or recoupment for any
reason whatsoever The periodic Rental Payments paid by Lessee shall be
conclusive as to its fair value for the possession, use and/or
occupancy of the Property.
SECTION 8 Security Interest As security for the payment of
all of Lessee's obligations hereunder, Lessee hereby grants
Corporation, its successors or assigns, a security interest in the
Property, its accessions and attachments thereto and replacements
thereof and substitutions therefor and all proceeds of the Acquisition
Account and all proceeds of any of the foregoing Lessee agrees to
execute such additional documents, including financing statements, and
authorizes Corporation to file such financing statements, which
Corporation deems necessary or appropriate to establish, perfect and
maintain Corporation's security interest
SECTION 9 Use. Lessee shall use the Property in a careful and
proper manner and shall comply with and conform to all national, state,
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municipal, police, and other laws, ordinances, and regulations in
anyway relating to the possession, use, or maintenance of the Property
SECTION 10 Acceptance Lessee shall acknowledge receipt,
inspection and acceptance of the Property by executing a "Certificate
of Acceptance"
SECTION 11 Corporation's Inspection Upon forty-eight (48)
hours prior notice, the Corporation shall at any and all times during
normal business hours have the right to enter into and upon Lessee's
premises where the Property is located for the purpose of inspecting
the same or observing its use Lessee shall give Corporation immediate
notice of any attachment or other judicial process affecting the
Property.
SECTION 12 Property Selection and Ordering Lessee has
selected or will select the type and quantity of the Property leased
hereunder Lessee shall ensure that all Property is properly invoiced
to Corporation Corporation shall not be liable for, nor shall the
validity, enforceability or effectiveness of this Lease be affected by,
any delay in or failure of delivery of the Property Lessee
acknowledges that it is solely responsible for determining the
suitability of the Property for its intended use Corporation shall
have no duty to inspect the Property If the Property is not properly
installed, does not operate as represented or warranted by the
Supplier, or is unsatisfactory for any reason, Lessee shall make any
claim on account thereof solely against the Supplier Lessee hereby
assumes the risks, burdens and obligations to the Supplier on account
of nonacceptance of the Property and/or cancellation of this Lease and
upon the occurrence of any such event, Corporation will assign to
Lessee, without recourse or warranty, its rights and title to the
Property and any documents related thereto
SECTION 13 Disclaimer of Warranty CORPORATION NOT BEING THE
MANUFACTURER OR SUPPLIER OF THE PROPERTY NOR A DEALER IN SIMILAR
PROPERTY, HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION, WARRANTY,
OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE DESIGN,
DURABILITY, FITNESS FOR USE, SUITABILITY, OR MERCHANTABILITY OF THE
PROPERTY IN ANY RESPECT, AND AS BETWEEN CORPORATION AND LESSEE, ALL
PROPERTY SHALL BE ACCEPTED AND LEASED BY LESSEE "WHERE IS," "AS IS,"
AND "WITH ALL FAULTS," AND CORPORATION SHALL NOT BE RESPONSIBLE FOR ANY
PATENT OR LATENT DEFECTS THEREIN LESSEE AGREES TO SETTLE DIRECTLY SUCH
CLAIMS WITH THE SUPPLIER AND WILL NOT ASSERT ANY SUCH CLAIMS AGAINST
CORPORATION
SECTION 14 Alterations and Attachments. All additions and
improvements that are made to the Property shall belong to and become
the property of the Corporation except that separately identifiable
attachments added to the Property by Lessee may remain the property of
Lessee as long as (i) the attachment is paid for in full by Lessee and
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(ii) Lessee agrees to remove the attachment and restore the Property to
substantially as good condition as when received, normal wear and tear
excepted, if and when the Property may be returned to Corporation
SECTION 15. Relocation Lessee shall provide Corporation prior
written notice of its intent to relocate the Property Lessee assumes
all risks of loss to the Property attendant to its movement and
relocation The Property location shall be under Lessee's full control
for its own governmental purpose
SECTION 16. Maintenance and Repairs Lessee, at its own cost
and expense, shall furnish necessary labor and materials to maintain
the Property in good repair, condition, and working order Lessee's
obligations to maintain the Property does not relieve the Supplier of
its responsibility to fully perform with respect to all applicable
Property warranties and guarantees
SECTION 17 Risk of Loss, Damage, Destruction. With the
exception of acts resulting from intentional misconduct or gross
negligence by Corporation, its agents and representatives, Lessee
hereby assumes and shall bear the entire risk of loss and damage to the
Property from any and every cause whatsoever No loss or damage to the
Property or any part thereof shall impair any obligation of Lessee
under this Lease, which shall continue in full force and effect Lessee
waives the benefit of Civil Code Sections 1932(2) and 1933(4) and any
and all other rights to terminate this Lease by virtue of any damage or
destruction to the Property.
SECTION 18 Physical Damage/Public Liability Insurance Lessee
shall keep the Property insured, as nearly as practicable, against risk
of loss or damage from any peril covered under an "all-risk" insurance
policy for not less than the full replacement value thereof, and Lessee
shall carry public liability and property damage insurance covering the
Property All said insurance shall be in form and amount and with
reputable companies and shall name Corporation as an additional insured
and loss payee. Lessee shall pay the premiums therefore and deliver
certification of said policies to Corporation Each insurer shall
agree, by endorsement upon the policy or policies issued by it or by
independent instrument furnished to Corporation, that it will give
Corporation thirty (30) days' written notice before the policy or
policies shall be altered or canceled The proceeds of such insurance,
at the option of Lessee, shall be applied (a) toward the replacement,
restoration, or repair of the Property, or (b) toward payment of the
total remaining obligations of Lessee hereunder, provided, however,
that Lessee shall be responsible for the amount by which such insurance
proceeds are insufficient to satisfy the cost of option (a) or option
(b) above, as applicable Should Lessee replace, restore, or repair the
Property as set out in option (a) above, this Lease shall continue in
full force and effect Lessee may self -insure up to specified limits as
evidenced by a certificate of self insurance to be attached hereto in
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form and amount acceptable to Corporation Any self-insurance program
in which Lessee is a participant shall comply with the provisions under
this Lease respecting cancellation and modification and payment of
losses to the Corporation as its respective interests may appear Such
self --insurance shall be maintained on a basis which is actuarially
sound as established by Lessee's risk manager or an independent
insurance consultant which determination shall be made annually. Any
deficiency shall be corrected within sixty (60) days of Lessee becoming
aware of such deficiency
SECTION 19 Liens and Taxes Lessee shall keep the Property
free and clear of all levies, liens, and encumbrances and shall
promptly pay all fees, assessments, charges, and taxes (municipal,
state and federal), including personal property taxes, which may now or
hereafter be imposed upon the ownership, leasing, renting, sale,
possession, or use of the Property, excluding, however, all taxes on or
measured by Corporation's Income
SECTION 20. Indemnity Subject to California law concerning
contribution and enforceability of indemnifications, Lessee shall
indemnify Corporation against and hold Corporation harmless from any
and all claims, actions, suits, proceedings, costs, expenses, damages,
and liabilities, including attorneys' fees, arising out of, connected
with or resulting from the selection, possession, use, operation, or
return of the Property excepting that Lessee shall not be required to
indemnify Corporation in the event that such liability or damages are
caused by the gross negligence or intentional misconduct of
Corporation, its agents or representatives.
SECTION 21 Events of Default The term "Event of Default", as
used in this Lease, means the occurrence of any one or more of the
following events (a) Lessee fails to make any Rental Payment (or any
other payment) within fifteen (15) days after the due date thereof or
Lessee fails to perform or observe any other covenant, condition or
agreement to be performed or observed by it hereunder and such failure
to either make the payment or perform the covenant, condition or
agreement is not cured within ten (10) days after written notice
thereof by Corporation, (b) Corporation discovers that any statement,
representation or warranty made by Lessee in this Lease, the Schedule
or in any document ever delivered by Lessee pursuant hereto or in
connection herewith is false, misleading or erroneous In any material
respect, (c) Lessee becomes insolvent, is unable to pay its debts as
they become due, makes an assignment for the benefit of creditors,
applies or consents to the appointment of a receiver, trustee,
conservator or liquidator of Lessee or of all or a substantial, part of
its assets, or a petition for relief is filed by Lessee under federal
bankruptcy, insolvency or similar laws
SECTION 22 Remedies Upon Lessee's failure to cure an Event of
Default within ten (10) days after Corporation's written notice
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thereof, Lessee's rights under this Lease shall terminate and the
Corporation will become entitled to retain all Rental Payments
previously paid and to recover all past due payments together with
interest thereon to the end of Lessee's current fiscal year The
Corporation may pursue all of its available remedies at law and an
equity including, but not limited to, the repossession and sale of the
Property. No right or remedy conferred upon Corporation is exclusive of
any other right or remedy, but each shall be cumulative of every other
right or remedy given hereunder or now or hereafter existing at law or
in equity or by statute or otherwise, and may be enforced concurrently
therewith or from time to time, provided, however, that notwithstanding
any provisions to the contrary herein, Corporation shall not under any
circumstances have the right to accelerate the Rental Payments that
fall due in future rental periods or otherwise declare any Rental
Payments not then in default to be immediately due and payable
SECTION 23 Non -Waiver. No covenant or condition to be
performed by Lessee under this Lease can be waived except by the
written consent of Corporation Forbearance or indulgence by
Corporation .in any regard whatsoever shall not constitute a waiver of
the covenant or condition in question. Until performance by Lessee of
said covenant or condition is complete, Corporation shall be entitled
to invoke any remedy available to Corporation under this Lease or by
law or in equity despite said forbearance or indulgence
SECTION 24 Assignment and Subleasing Lessee shall not (a)
assign, transfer, pledge, or hypothecate this Lease, the Property, or
any part thereof, or any interest therein, or (b) sublet or lend the
Property or any part thereof except with the prior written consent of
Corporation which, in the case of subletting, shall not be unreasonably
withheld, provided such subletting shall not affect the tax --exempt
status of the interest components of the Rental Payments payable by
Lessee hereunder No such pledge, assignment, sublease or any other
transfer shall in any event affect or reduce the obligation of Lessee
to make the Rental Payments due hereunder Consent to any of the
foregoing acts applies only in the given instance and is not a consent
to any subsequent like act by Lessee or any other person Corporation
shall not assign its obligations under this Lease with the exception of
its obligation to issue default notices and its obligations pursuant to
Section 28 Corporation may assign its right, title and interest in
this Lease, the Rental Payments and other amounts due hereunder and the
Property in whole or in part to one or more assignees or subassignees
at any time, without the consent of Lessee Any such assignment by
Corporation or its assigns shally comply with the requirements of
Sections 5950-5955 of the California Government Code No such
assignment shall be effective as against Lessee unless and until
Corporation shall have filed with Lessee a copy of such assignment or
written notice thereof Lessee shall pay all Rental Payments hereunder
pursuant to the direction of Corporation or the assignee named in the
most recent assignment or notice of assignment filed with Lessee
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During this Lease term, Lessee shall keep a complete and accurate
record of all such assignments or notices of assignment Subject to the
foregoing, this Lease inures to the benefit of, and is binding upon,
the successors and assigns of the parties hereto
SECTION 25 Ownership The Property is and shall at all times
be and remain the sole and exclusive property of Corporation, and
Lessee shall have no right, title, or interest therein or thereto
except as expressly set forth in Sections 27 and 28 Lessee shall take
all actions necessary to insure that legal title to the Property being
acquired by Lessee hereunder, whether by Lessee or by a third party
acting on behalf of Lessee, is vested in Corporation
SECTION 26 Personal Property The Property is and shall at all
times be and remain personal property notwithstanding that the Property
or any part thereof may now be or hereafter become in any manner
affixed or attached to or Imbedded in, or permanently resting 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
SECTION 27 Purchase Option If Lessee is not in default of any
term, condition or payment specified hereunder, Lessee may exercise
options to prepay this Lease and purchase not less than all of the
Property in "as -is" and "where -is" condition on the specified dates and
for the specified amounts set forth in the Schedule The purchase
option price specified for a particular date is in addition to the
Rental Payment due on the same date
SECTION 28. Release of Liens. Upon Lessee either making all of
the Rental Payments scheduled herein or making a purchase option
payment, Corporation, its successors or assigns shall cause i) legal
title to the Property to be transferred to Lessee and ii) the release
of all liens, encumbrances or security interests on the Property
created pursuant to Corporation's rights under this Lease
SECTION 29 Early Termination. Lessee may terminate this Lease
in its entirety as of the end of any fiscal year based solely upon
Lessee's failure to appropriate funds for the subsequent fiscal year's
Rental Payments after exercising reasonable efforts to appropriate
funds from any and all of its legally available sources Lessee agrees
to deliver notice to Corporation of such termination promptly upon
adoption of Lessee's final budget if no appropriation is included
therein to make Rental Payments as set forth in the Schedule Upon
termination of this Lease due to Lessee's failure to budget and
appropriate funds, Lessee, at its expense, shall redeliver the Property
to the Corporation at a location within the State of California
designated by Corporation in substantially as good a condition as when
received, normal wear and tear excepted If Lessee terminates this
Lease, Corporation may retain all amounts previously paid by Lessee and
9
may collect and retain any amounts due and unpaid to the end of
Lessee's then current fiscal year. Corporation shall remit to Lessee
any proceeds from the subsequent sale of the Property in excess of the
then applicable purchase option price
SECTION 30 Tax Covenants
(a) Generally Lessee shall not take any action or permit to be
taken any action within its control which would cause or which, with
the passage of time if not cured would cause, the interest components
of the Rental Payments to become includable in gross income for federal
income tax purposes
(b) Private Activity Bond Limitation. Lessee shall assure that the
Lease Proceeds are not so used as to cause this Lease to satisfy the
private business tests of Section 141(b) of the Internal Revenue Code
of 1986, as amended (the "Code"), or the private loan financing test of
Section 141(c) of the Code
(c) No Arbitrage Lessee will not take any action or omit to take
any action which action or omission, If reasonably expected on the date
of this Lease, would have caused this Lease to be an "arbitrage bond"
within the meaning of Section 148(a) of the Code
(d) Federal Guarantee Prohibition The Rental Payments are not
directly guaranteed or indirectly guaranteed in whole or in part by the
United States or any agency or instrumentality of the United States so
as to cause the Rental Payments to be "federally guaranteed" within the
meaning of Section 149(b) of the Code.
(e) Reimbursement Regulations. The Lease Proceeds used for
reimbursement of prior expenditures will be made pursuant to and in
compliance with Income Tax Regulations Section 1 150-2
(f) Bank Qualified. Lessee hereby designates this Lease for
purposes of paragraph (3) of Section 265(b) of the Code and represents
that not more than $10,000,000 aggregate principal amount of
obligations the interest on which is excludable (under Section 103(a)
of the Code) from gross income for federal income tax purposes
(excluding (i) private activity bonds, as defined in Section 141 of the
Code, except qualified 501(c)(3) bonds as defined in Section 145 of the
Code and (ii) current refunding obligations to the extent the amount of
the refunding obligation does not exceed the outstanding amount of the
refunded obligation), including this Lease, has been or will be issued
by Lessee, including all subordinate entitles of Lessee, during
calendar year 2006
(g) Arbitrage Rebate Lessee shall take any and all actions
necessary to assure compliance with Section 148(f) of the Code,
relating to the rebate of excess investment earnings, if any, to the
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federal government, to the extent that such section is applicable to
this Lease.
SECTION 31 Extraordinary Costs In the case of litigation, the
prevailing party shall be entitled to recover from the opposing party
all costs and expenses, including attorneys' fees (which may be the
allocable cost of in-house counsel), incurred by the prevailing party
in exercising any of its rights or remedies hereunder or enforcing any
of the terms, conditions or provisions hereof
SECTION 32 Severability If any provision of this Lease shall
be held invalid or unenforceable by a court of competent jurisdiction,
such holdings shall not invalidate or render unenforceable any other
provision of this Lease, unless elimination of such provision
materially alters the rights and obligations embodied in this Lease
SECTION 33 Entire Agreement This Lease, the Schedule, and any
agreements that specifically refer to this Lease that are duly executed
by authorized agents of the parties hereto constitute the entire
agreement between Corporation and Lessee, and it shall not be further
amended, altered, or changed except by a written agreement that is
properly authorized and executed by the parties hereto
SECTION 34 Notices Service of all notices under this Lease
shall be sufficient if given personally or mailed to the party involved
at its respective address hereinafter set forth or at such address as
such party may provide in writing from time to time Any such notice
mailed to such address shall be effective when deposited in the United
States mail, duly addressed and with postage prepaid
SECTION 35. Titles The titles to the Sections of this Lease
are solely for the convenience of the parties and are not an aid in the
interpretation thereof
SECTION 36 Further Assurances and Corrective Instruments
Corporation and Lessee agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged
and delivered, such supplements hereto and such further instruments as
may be reasonably required for correcting any inadequate or incorrect
description of the Property hereby leased or intended so to be or for
carrying out the expressed intention of this Lease
SECTION 37 Execution in Counterparts This Lease may be
executed in several counterparts, each of which shall be original and
all of which shall constitute but one and the same instrument.
SECTION 38 Time Time is of the essence in this Lease and each
and all of its provisions
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SECTION 39 Lease Interpretation This Lease and the rights and
obligations of the parties hereunder shall be determined in accordance
with the laws of the State of California
IN WITNESS WHEREOF, the parties hereto have caused their
authorized agents to execute this Lease on the dates specified below
MUNICIPAL FINANCE CORPORATION
23945 Calabasas Road, Suite 103
Calabasas, CA 91302
(lessor)
By
Title
Date
CITY OF REDLANDS
35 Cajon St , P 0 Box 3005
Redlands, CA 92373-1505
(les _: e)
By
J
Ha i
Harr "son
Tit - Mayor
Date September 27, 2006
ATTEST•
Lor e Poyz
12
ty Clerk
LEASE SCHEDULE #06 -060 -AF
This Schedule is issued pursuant to the Lease with Option to Purchase
dated as of September 5, 2006 by and between the undersigned
A. Property Location Fire Station 264, 1270 W Park Ave ,
Redlands, CA
B Property Description One (1) Ford F550 Light Rescue vehicle
C Name and Address of Supplier(s).
Boise Mobile Equipment
Boise, Idaho
D Financing Amount Summary
Estimated Property Cost
(including related expenses) $125,000 00
Financing Amount $125,000 00
• Lease Term. The full term of this Schedule is for a period
commencing on the Lease Issuance Date and concluding sixty (60) months
thereafter. Upon closing, the Lease Issuance Date shall be inserted in
the following blank (
F Rental Payments Rental Payments for this Schedule are due in five
(5) consecutive annual payments in accordance with the Payment Schedule
herein Each payment includes interest at the rate of 4.35% per annum
on the unpaid principal balance. The Financing Amount in Section D
represents the original principal balance
G Lease Acquisition Cost The cost for Lessee to acquire the Property
over the full specified term of this Schedule is $141,775 20
H
1
2
3
4
5
TOTALS
(1)
(2)
Payment Schedule Payable annually in arrears
#06 -060 -AF
PMT Due Date
(1) Rental
Payment
(2) Purchase
Option
$28,355 04
28,355 04
28,355 04
28,355 04
28,355 04
104,634 52
80,122 21
54,543 61
27,852 35
0 00
To
Principal
41 775 2_.Q
Refer to the paragraph in the
Refer to the paragraph in the
"Release of Liens " Purchase
payment due on the same
day
Approved and agreed to•
MUNICIPAL FINANCE CORPORATION
(lessor)
By
Title
Date•
Lease entitled
Lease entitled
options are in
By
To
Interest
$22,917 54
23,914 45
24,954 73
26,040 26
27,173 02
5,437.50
4,440 59
3,400 31
2,314 78
1,182 02
a 2,000 Q,(2
"Release of Liens"
"Purchase Option and
addition to the rental
CITY OF REDLANDS
(lessee,) /
Jon Harris
Title Mplor
Date September 27, 2006
ATTEST
(7 -.L -)0-6.6U
Lorre Poyz
ity Clerk
ASSIGNMENT OF LEASE #06 -060 -AF
FOR VALUE RECEIVED, MUNICIPAL FINANCE CORPORATION ("Corporation")
as assignor without recourse does hereby sell, assign, and transfer to
CITIZENS BUSINESS BANK ("Assignee") as assignee and its successors and
assigns (1) all of its right, title and interest in and to the attached
Lease with Option to Purchase contract dated September 5, 2006 between
the Corporation as lessor and CITY OF REDLANDS ("Lessee") as lessee
(hereinafter said lease and any supplements, amendments, additions
thereof and any extension or renewals thereof is referred to as the
"Lease") and (ii) all moneys, sums and amounts now due or hereinafter
to become due under the Lease. Corporation represents that the Lease
and Lease Schedule(s) delivered to Assignee are the only duly executed
duplicate originals and comprise the entire writing, obligation and
agreement between Corporation and Lessee
Corporation further represents and warrants that it has made no
prior sale or assignment of any interest covered hereby, that the Lease
is genuine and in all respects is what it purports to be, that Assignee
shall not be liable for and does not assume responsibility for the
performance of any of the covenants, agreements, or obligations
specified in the Lease to be kept, paid or performed by Corporation
with exception of Assignee's obligation to issue notices upon Lessee's
default of the Lease and to convey title to the leased Property upon
Lessee's exercise of its option to purchase said Property in
conformance with the terms of the Lease Corporation further represents
and warrants that as of the date this assignment is made, the Lease is
in full force and effect, has not been amended except as set forth in
instrument delivered to Assignee and Lessee is not in default of any
terms thereunder
Corporation hereby constitutes and irrevocably appoints Assignee
the true and lawful attorney of Corporation to demand, receive and
endorse payments and to give receipts, releases and satisfactions
either in the name of Assignee or in the name of Corporation in the
same manner and with the same effect as Corporation could do if this
Assignment of Lease had not been made Within fifteen (15) days after
receiving its full bargain with respect to each Schedule covered
hereby, Assignee shall cause to be released to Lessee its vested
Interest in the Property thereto
This Assignment of Lease shall be construed and governed in
accordance with the laws of the State of California Any provision of
this Assignment of Lease found to be prohibited by law shall be
ineffective only to the extent of such prohibition, and shall not
invalidate the remainder of this Assignment of Lease.
This Assignment shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns and is made in
accordance with the Municipal Lease Placement Agreement dated as of
January 1, 1999, as amended, entered into between Corporation and
Assignee In the case of litigation, the prevailing party shall be
entitled to recover from the opposing party all costs and expenses,
including attorneys' fees which may be the allocable cost of in-house
counsel, incurred by the prevailing party in exercising any of its
rights or remedies hereunder or enforcing any of the terms, conditions,
or provisions hereof
IN WITNESS WHEREOF, Corporation has caused this Assignment of
Lease to be executed by its duly authorized agent on the date specified
below.
MUNICIPAL FINANCE CORPORATION
(assignor)
By
Title
Date
ACKNOWLEDGEMENT OF ASSIGNMENT
The undersigned hereby acknowledges the assignment by MUNICIPAL
FINANCE CORPORATION over to CITIZENS BUSINESS BANK of that certain
Lease with Option to Purchase #06 -060 --AF dated as of September 5, 2006
(the "Lease"), entered into between MUNICIPAL FINANCE CORPORATION as
lessor and the undersigned as lessee
With respect to the Lease, the undersigned agrees to pay,
commencing with the first scheduled Rental Payment, all rentals and
moneys due or to become due under said Lease to CITIZENS BUSINESS BANK,
701 North Haven Avenue, Suite 250, Ontario, CA 91764 and further agrees
it shall have no counterclaim or offset against rentals due thereunder
as to said Assignee and expressly further agrees that said Assignee
shall not (except for the obligations specifically set forth in the
foregoing Assignment of Lease) be liable for any of the obligations or
burdens of the lessor under said Lease.
IN WITNESS WHEREOF, the lessee has caused this Acknowledgment of
Assignment to be executed by its authorized agent on the date specified
below
CITY OF REDLANDS
esse:/
By An 4e / %
Joxf Ham on
Title/ Mayor
Date September 27, 2006
ATTEST
2
ARBITRAGE AND TAX CERTIFICATE f06 -060 -AF
The undersigned hereby certifies that he/she is a duly appointed
authorized agent, of the CITY OF REDLANDS (the "Lessee"), for the
purpose of executing and delivering, on behalf of the Lessee, the Lease
with Option to Purchase dated September 5, 2006 (the "Lease"), by and
between MUNICIPAL FINANCE CORPORATION (the "Corporation") as lessor and
the Lessee as lessee This Certificate is being issued pursuant to
Section 148 of the Internal Revenue Code of 1986 (the "Code"), and
Treasury Regulations, Sections 1 148-1 through 1 148-11 promulgated
thereunder (the "Regulations") The following facts, estimates and
circumstances are either in existence on the dale of this Arbitrage and
Tax Certificate or are reasonably expected to occur hereafter
1 Under the Lease, the Corporation is required to acquire the
property described in the schedule attached to the Lease (the
"Property"), and to lease and sell the Property to the Lessee, and the
Lessee is required to lease and purchase the Property from Corporation
by making Rental Payments with respect thereto, comprising principal
and interest, on the dates and in the amounts set forth in the Lease
2 On the date of Lease issuance, the Lessee will receive not
less than $125,000 from the Corporation Such moneys will be deposited
with the Lessee and used, together with interest earnings thereon, to
pay the Property costs
3 The Lessee on behalf of the Corporation, will proceed to
acquire and install the Property with due diligence and, based upon the
provisions of the purchase contracts, delivery and acceptance of the
Property is scheduled to occur on or before six months after the date
hereof but in no case later than three years from the date hereof, and
it is expected that all Lease proceeds will be spent by such date.
4 The original proceeds of the Lease plus the interest earned
thereon, will not exceed by more than 5% the amount necessary for the
governmental purpose for which the Lease is issued
5 The yield of the Lease, without taking into account costs of
issuance thereon, and on the basis of the initial reoffering price of
the Lease to the Assignee, is not less than 4 3500000%
6 No sinking fund will be maintained for the payment of the
Rental Payments due under the Lease
7 The term of the Lease is not longer than is reasonably
necessary for the governmental purpose of the Lease, and the weighted
average maturity of the Lease does not exceed 120 percent of the
average reasonably expected economic life of the leased Property
8 The Property has not been, and is not expected during the
term of the Lease, to be sold or otherwise disposed of by the Lessee.
9 The Lessee and its subordinate entities (as defined in the
Code) will not, in the aggregate, issue more than $5,000,000 of tax-
exempt obligations during calendar year 2006 and, thus, qualifies for
the arbitrage rebate exemption provided for in Section 148(f)(4)(D) of
the Code
10 To the best of the knowledge and belief of the undersigned,
the expectations of the Lessee, as set forth above, are reasonable, and
there are no present facts, estimates and circumstances which would
change the foregoing expectations
IN WITNESS WHEREOF, the party hereto has caused its authorized
agent to execute this Arbitrage and Tax Certificate on the date
specified below
CITY OF REDLANDS
(lessee)
By
Jon Ham
Title MM or
Date September 27, 2006
ty Clerk
2
CERTIFICATE OF LESSEE
The undersigned, duly authorized representative of City of Redlands
("Lessee") as lessee under that Lease with Option to Purchase #06 -060 -AF
dated as of September 5, 2006 ("Lease") with Municipal Finance Corporation as
lessor, hereby certifies as follows
1 I have been duly authorized to execute and deliver, on behalf of Lessee,
the Lease and related documents pursuant to a resolution adopted by
Lessee's governing body, which resolution is in full force and effect
and has not been amended, modified, supplemented or rescinded as of the
date hereof
2 Lessee has complied with all agreements and covenants and satisfied all
conditions contemplated by the Lease on its part to be performed or
satisfied on or before the date hereof
3 The representations, warranties and covenants of Lessee contained in the
Lease are true and correct in all material respects as of the date
hereof, as if made on this date
4 No litigation is pending or, to the best of my knowledge, threatened
(either in state or federal courts) (a) to restrain or enjoin the
issuance and delivery of the Lease or the collection of revenues to be
used to meet Lessee's obligations under the Lease, (b) in any way
contesting or affecting the authority for the execution or delivery of
the Lease, or the validity of the Lease, (c) in any way contesting the
existence or powers of Lessee, as such existence or powers in any way
relate to the issuance of the Lease or Lessee's obligations under the
Lease, or (d) could materially adversely affect the financial position
of Lessee
5 The Property being leased pursuant to the Lease is essential to the
function of Lessee and is immediately needed by Lessee Such need is
neither temporary nor expected to diminish during the Lease term The
Property is expected to be used by Lessee for a period in excess of the
Lease term
6 The scheduled Rental Payments for the Property do not exceed the fair
rental value of the Property
7 Lessee's federal tax identification number is 95-6000766
8 That for calendar year 2006 and including the Information Return for
Tax -Exempt Governmental Obligations Form 8038-G filed with the Internal
Revenue Service for the Lease, Lessee has filed Information
Return Form(s) 8038-G with the Internal Revenue Service.
The meaning of the capitalized terms in this Certificate are the same as
those provi.ed in t e Lease
By
/ i e
Jon Harrison, Mayor
Date September 27, 2006
ATTEST.
Lorjie Poy ,lity Clerk
INCUMBENCY AND SIGNATURE CERTIFICATE
I do hereby certify that 1 am the duly appointed and acting
Secretary/Clerk of the City of Redlands, a municipal corporation
validly existing under the Constitution and laws of the State of
California ("Lessee"), and that, as of the date hereof, the individual
named below 1s the duly appointed officer of Lessee holding the office
set forth opposite his/her respective name I further certify that (1)
the signature set forth opposite his/her respective name and title is
true and authentic and (11) such officer has the authority on behalf of
Lessee to enter into that certain Lease with Option to Purchase #06 --
060 -AF dated SepLember 5, 2006, between Lessee and Municipal Finance
Corporation, and all documents relating thereto
Name
Title Signature
Jon Harrison Mayor
IN WITNESS WHEREOF, 1 have duly executed this certificate hereto
this 27th day of Sept 27 , 2006.
Lorre Poyze ty Clerk
Farm 8038-G
(Rev November 2000)
nellmtment of the T:easery
ernes RevenUL Servem
JJReporting Authority
1 Issues 4 risme
City of Redlands
3 Nutnbur and street (or P 0 box if rrt nl v, riot Flt livt,rcd to street nicht ss)
P 0 Box 3005
5 City town or post office. state Ind IIP rode.
Redlands, CA 92373 1505
Information Return for Tax -Exempt Governmental Obligations
► Under Internal Revenue Code section 149(e)
► See separate Instructions
Caution. if the issue price is under $100 000 use Form 8038 GC
7 Name of issue
Lease with Option to Purchase #06 060 -AF
OMB No 1545 0120
If Amended Return, check here ► ❑
2 Issuer's employer identification number
Room/suite
4 Rt port number
3
6 Odic of issue
9 Mimi, dnd title, of efflux or legal reproscnultivta whom thE_ IRS may call for marc. information
8 CUSIP numbt.r
10 Telephant. riumtms of offices or legal representative
( )
rEM Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule
11
12
11 ❑ Education
12 ❑ Health and hospital
13 ❑ Transportltion
14 ❑ Public safety
15 ❑ Environment (including sewage bonds)
16 ❑ Housing
17 ❑ Utilities
18 ❑ Other Describe 1
19 If obligations are TANS or RANs check box O. ❑ if obligations are BANs check box : ❑❑
20 If obligations are in the form of a lease or installment sale check box
Description of Obligations Complete for the entire issue for which this form is
Part 111
(a) Final in iturity bate
(b) P -ate price
(c) 'tutted redemption
price alt maturity
(d) weighted
tveragc. maturity
13
14
15
16
17
18
being filed
(e) Yield
21 $ -
Uses of Proceeds of Bond Issue (including underwriters' discount)
22 Proceeds used for accrued interest
23 Issue price of entire issue (enter amount from line 21, column (b))
24 Proceeds used for bond issuance costs (including underwriters discount)
25 Proceeds used for credit enhancement
26 Proceeds allocated to reasonably required reserve or replacement fund
27 Proceeds used to currently refund prior Issues
28 Proceeds used to advance refund prior issues
29 Total (add lines 24 through 28)
30 Nonrefundinq proceeds of the issue (subtract line 29 from line 23 and enter amount here)
Description of Refunded Bonds (Complete this part only for refunding
Part IV
24
years
0
22
0
23
25
0
26
0
27
0
28
0
Part V
29
0
30
bonds)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded 1
32 Enter the remaining weighted average maturity of the bonds to be advance refunded 1
33 Enter the last date on which the refunded bonds will be called ►
34 Enter the date(s) the refunded bonds were issued ►
Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5)
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (see instructions)
b Enter the final maturity date of the guaranteed investment contract ► rA
37 Pooled financings a Proceeds of this Issue that are to be used to make loans to other governmental units 37a
b If this issue is a loan made from the proceeds of another tax exempt issue check box ► 0 and inter the name of the
Issuer 1 and the date of the issue 1,-
38
38 If the Issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception) (,heck box ► 0
39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box 1 0
21
40 If the issuer has identified a hedge, check box
Under penalties of perjury I declare that I have examined this return and accompanying schedules and statements and to the best of my knowledge
and belief the yele true correct a d complete
years
years
35
36a
Sign
Here
/Sign, tire of issue tuthorizcd representative
For Paperw6k Reduction Act Notice, see page 2 of the Instructions
Jon Harrison, Mayor
Date rType or print name Ind title
ATTE
Cast No 637735 corm 8038-G (Rev 11 2000)
i
Clerk
Lor ie P 1 y