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HomeMy WebLinkAboutContracts & Agreements_126-2007_CCv0001.pdf Frit MUNICIPAL FINANCE CORPORATION 23945 Calabasas Road,Suite 103 Calabasas,CA 91302 Telephone(818)224-4787 Telecopier(818)224-4789 August 2 4 , 2007 www.munifinance.com CITY OF REDLANDS City Clerk' s Office P.O. Box 3005 Redlands, CA 92373 Re : Lease with Option to Purchase #07-038-AF dated August 7, 2007 ("Lease" ) To Whom It May Concern: Enclosed is the District ' s set of executed documents for the referenced Lease . The lease transaction was funded today. Please let me know if you have any questions regarding the enclosed. Very truly yours, Dixie M. Ma Manager of Administration DMM Enclosures 11 ,4 LEASE WITH OPTION TO PURCHASE #07-038-AF This LEASE WITH OPTION TO PURCHASE dated August 7, 2007 (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 acquire the property described herein for its own public purposes; and WHEREAS, it is intended that this Lease be treated as a tax-exempt 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. 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 4 0 _____—..=mmmmmammoMMONMWWWWWW.WWWWWWM. v‘ requirements have been met and procedures followed to ensure its enforceability. 5 (c) The execution, delivery and performance of this Lease do not 5 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. 2 4 i4 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 iii) 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 4 3 negligence or willful misconduct by Corporation, Corporation will not be held responsible for any investment losses for any reason whatsoever 4 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 4 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, 4 ti ttt municipal, police, and other laws, ordinances, and regulations in anyway relating to the possession, use, or maintenance of the Property. 44 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 Co/poration. 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 t4t Lessee as long as (i) the attachment is paid for in full by Lessee and 5 PI -----A,-*yg*g-oN,;,mwzziwzmps-fvNovifaanxmia; '1$0: (ii) Lessee agrees to remove the attachment and restore the Property to oo ol 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 4 (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 fk evidenced by a certificate of self insurance to be attached hereto in OR 6 rz _oo—0000000000000000000wO000VoOoOOOOOOMOOMSOWOMA t000t0000000aiogolOoloOliool 220 ,wry y self-insurance program acceptable to Corporation. provisions undera l with the p a payment of form and amount isaarticipant shall comply and in which Lessee a PSuch respecting cancellation andcive modification may aPPear. this Lease oration as its resp losseself- to the Corp maintained on a basis which is actuarially self-insurance shall be y Lessee' s risk manager or an Any established be dent sound as consultant which determination shall daysmofeLesseea becoming insurance deficiency shall be corrected within sixty aware of such deficiency. the Property Liens and Taxes . Lessee shall keep encumbrances and shall SECTIONn19 • liens, and and taxes (municipal, freeoand clear of all levies, charges, which may now or rote andy pay all fees, assessments,rsonal property taxes, P including P leasing, renting, sale, hereafter federal) , imposed upon the ownership, however, alln taxes, sae, hereafterProperty, excluding, possession, or use of the on or Corporation' s income . measured by Core California law concerning Indemnit . Subject to Lessee concerning SECTIONb20 . of indemnifications, contribution and enforceability oration harmless from any l against and hold Corporation expenses, damages, indemnify aims, actions, ag suits, proceedings, arising connected claims, actions, out of , and all attorneys' fees, use,ouoperation, or with liabilities, includingpossession, required or andfrom the selection, u or resulting excepting that Lessee shall not be damages areto return of the Propertyof indemn the event that suchintentional Y misconduct causedify theation s negligence or by gross Corporation, its agents or representatives. The term "Event of Default" , as the SECTION 21. Events of Default . The of any one or more of any usedoin this Lease, means the Rental Payment (or events: (a) Lessee fails to make any following days after the due dateothereof or or Lesseeser payment) withinpef fifteen ser Y other covenant, fails to perform or observe any eor observed by it hereunder and such condition failure performed or perform the covenant, agreement to ake Pthe payment days after written notice or to either cured within ten (10) statement, thagereof is po b Corporation discovers that any atement, representationreby Corporation; ( )made by Lessee in this Lease, Schedule Lessee pursuant hereto or in or or warranty or erroneoussa in anye material connection in any document ever deliveredrewith is false, a its material as res )hLessee becomes insolvent, is unable to pay respect; (c) assignment for the benefit of creditors, makes an assiq receiver, part of appy become due,nto the appointment of a c nsery or consents or liquidator of Lessee origffiled l or bYaLesseesubstantial under ederal conservator or a petition for relief its assets,uinsolvency or similar laws . bankruptcy, failure to cure an Event of Remedies . Upon Lessee' s oration' s written notice SECTw (10) days after Corp 4 Default within ten 7 F 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 in 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 Paymentsnot 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, CoLparation 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 . ft*11 8 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 ft4 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 ow) 9 --m,...kwr '.2*2aTO,VaM-Wrv'TaA,YW-*XA-,,s,'VAMWSWKWZ ,J10 N444 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 . Nonsubstitution. To the extent permitted by California law, if this Lease is terminated by Lessee with respect to the Property in accordance with Section 29, Lessee agrees not to purchase, lease or rent personal property to perform the same function or functions taking the place of, those performed by such Property and agrees not to permit such functions to be performed by its own employees or by any agency or entity affiliated with or hired by Lessee for a period of three hundred sixty-five (365) days succeeding such termination; provided, however, that these restrictions shall not be applicable in the event the Property shall be sold by Corporation and the amount received from such sale, less all costs of such sale, is sufficient to pay the then applicable purchase option price relating thereto as set forth on the Schedule; or if or to the extent that the application of these restrictions is unlawful and would affect the validity of this Lease. SECTION 31. 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 . tt 10 ,04 I t* wm __,_-_ swug*tatmmggmmzgtmmsrAvamaR Eat SI sw kgt, kk (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 At obligations the interest on which is excludable (under Section 103 (a) of the Code) from gross income for federal income tax pulposes tt (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 entities of Lessee, during calendar year 2007 . (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 federal government, to the extent that such section is applicable to this Lease. SECTION 32 , 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 33 . 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 34 . 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 35 . 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 36 . 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. Xi tt NT 11 44 N. Wq SECTION 37 , Further Assurances and Corrective Instruments. 4-3 Corporation and Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged 14 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 38 . 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 39. Time. Time is of the essence in this Lease and each and all of its provisions . SECTION 40 . 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 CITY OF REDLANDS 23945 Calabasas Road, Suite 103 P.O. Box 3005 Calabasas, CA 91302 Redlands, CA 92373 (lessor) (lessee) B:e;;; :// n Her son MANAGER OF Title ADMINISTMT4ON T' le Mayor Date ,V1,7///27/2 Date August 7, 2007 ATTEST: Lorre Poyz, ity Clerk N1 • 12 ma 038-AF - LEASE SCHEDULE #07" n to Purchase mm- Lease with Option pursuant to the undersigned. Tates Schedules ust 7, 20d 0 by and between the dated as of AugumA MA st City Hall VS A Property Location: 32 Cajon St . .k Redlands , CA 4 Ford Expedition 4 x Two (2) 2008 with appurtenant Description: vehicles Property Descrip command B. equipment and Address of Supplier (s) : SALES C Name DOWNTOWN FORD 525 N. 16th St . Sacramento, CA 95814 D. Financing Amount Summary: erty Cost $110 , 000 . 00 Estimated prop expenses) :(including related exp $110 , 000 . 00 Financing Amount : Schedule is for a period of this (60) months The full term sixty Lease Term. Date and concluding E. Issuance inserted in Lease Date shall be the Issuance commencing on the Lease Upon closing, thereafter • 2007 ) ' blank ( Au ust 24 due in five the following for this Schedule are Rental Payments Schedule Payments . with the Payment F Rentalostivor payments in accordance 4 5e per annum o f annual payor at the rate D (5) consecutive interest Amount in etion includes herein. Each payment balance . The Financing principal on the unpaid original principal balance • representst The cost for Lessee to acquire the Property Acquisition Cost .G. Lease term of this Schedule is $125 , 285 .40 . h full specifiede , overWV the } tAA wAacam--t.,ytiG'�" ,c- ,,- "�," '-a tis ii H. able annually in arrears #07-038-AF payment Schedule: Pay To To (1) Rental (2) Purchase princi•al Interest PMT Due Date Pa ent O•tion 4, 950 . 00 # 2 , 057 . 08 92, 140 .24 $20, 107 . 08 1 08/24/08 5 $ 70, 603 . 05 21, 011 . 90 4, 045 . 18 2 08/24/09 25, 057 . 08 3 25, 057 . 08 48, 096 . 68 22, 945 . 527 2 , 111 . 56 5 ,� 25 057 . 08 4 08/24/1 .43 3 , 099 . 65 1 25, 057 . 08 24, 577 .52 21, 957 08/24/11 0 . 00 23 978 . 07 1 079 . 01 5 C1� 00 � 1156285 . 40 e, 2L 2R5 0 .4Q - TOTALS : 1) Refer to the paragraph in the Lease entitled "Release of Liens" ( aragraph in the Lease entitled "Purchase Option and "Release of of (2) Refer to paragraph options are in addition to the rental "ReLiens. payment due on the same day. Approved and agreed to: CITY OF REDLANDS MUNICIPAL FINANCE CORPORATION (les ee) (les •r) /�' Alt ''' BY: n irk n //i1 By: ��� 1. ,..." •n Ha son MANAGER OF Title : Title Ma or - • ° �`0 7 Date : Au• st 7 2007 Date : • ATTEST: Lo, ie P• W City Clerk V G ri w e se ASSIGNMENT OF LEASE #07-038-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 (i) all of its right, title and interest in and to the attached Lease with Option to Purchase contract dated August 7, 2007 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 CoLporation 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 CoLporation 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. M 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 WO 2 prevailing party shall be k�. litigation, the p eXpenses, In the case of ling arty all costs and V Assigneeopposing p to recover from the ay be the allocable cont aHyl of o its entitledfees whichparty in exercising counsel: attorneys the prevailing conditions, counsel, incurred by of the terms, rights or remedies hereunder or enforcing any or provisions hereof . _ WHEREOF, Corporation has caused don the date this gspent of d IN WITNESS its duly authorized ag Lease to be executed by below. MUNICIPAL FINANCE CORPORATION (assignor) r //rd /4$/ £) By /r, Title MAA : • ADMINISTRA ION Date •�� ACKNOWLEDGEMENT OF ASSIGNMENT MUNICIPAL es the assignment ned hereby acknowledges BANK of byyat certain The undersigned August 7 , 2007 LeaseFINANCE CORPORATION over to CITIZENS MUNICIPAL FINANCE CORPORATION as withaOption r Purchase #07-038-AF dated as of Aug �� entered into between (the "Lease") , lessor and the undersigned as lessee. to pay, the Lease, the undersigned agrees a respect to Int, all rentals and Withifirst scheduled Rental PaYm with the under said Lease to CITIZENS BUSINESS Ber commencing Cp, 91764 and further agrees moneys due tAve. ,becoSuite due 250 , Ontario, it1 hNallh HavenvVo• 'terclaim or offset against rentals due thereunder have no conn further agrees that said Assignee shall nee and expressly set forth in shall to said Assig the obligations specifically ations or except for be liable for any of the oblig eg not (except of Lease) foregoing Assignment burdens of the lessor under said Lease. ment of d this dg IN WITNESS WHEREOF, the lessee has ca age t on he date e specified Assignment to be executed by its authorized below. CITY OF REDLANDS (les- e) BY Jon .rrison Ti e Mayor RJ no i Date August 7, 2007 CS ATTEST: 2 � � ity Clerk `v rie Poy �� Lo W C$ ARBITRAGE AND TAX CERTIFICATE #07-038-AF The undersigned hereby certifies that he/she is a duly appointed !i! 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 August 7, 2007 (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 date 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 $110, 000 . 00 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 . 5000000%. 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. $$ .1c 1$1 t-, q„ id ri 8 . The Property has not been, and is not expected during the -1 term of the Lease, to be sold or otherwise disposed of by the Lessee. '9 9. In the event the Lessee does not expend all Lease Proceeds within six months of the date hereof, Lessee will comply with the arbitrage rebate provisions under Section 148 of the Code with respect to timeliness and amounts that may be required for remittance to the United States Treasury. 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 C: .)' , ,A0071/t_- Jon 'I'rison Ti le Mayor .7 Date August 7, 2007 ATTEST.4- ) L rrie Po r,) City Clerk 4 f. g ft 2 CERTIFICATE OF LESSEE The undersigned, duly authorized representative of City of Redlands ("Lessee") as lessee under that Lease with Option to Purchase #07-038-AF dated as of August 7, 2007 ("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 2007 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 vided i the Lease. Harrison, ATTEST 40110 Jon Mayor P Lo ie PoyziOr ' ity Clerk 4 Date: August 7, 2007 •'&6t-4 2i INCUMBENCY AND SIGNATURE CERTIFICATE I do hereby certify that I 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 is the duly appointed officer of Lessee holding the office set forth opposite his/her respective name. I further certify that (i) the signature set forth opposite his/her respective name and title is true and authentic and (ii) such officer has the authority on behalf of Lessee to enter into that certain Lease with Option to Purchase #07- 038-AF dated August 7, 2007, between Lessee and Municipal Finance Corporation, and all documents relating thereto. Name Title Signature Jon Harrison Mayor IN WITNESS WHEREOF, I have duly executed this certificate hereto this 7th day of AUGUST , 2007. - eta-ry- fugai City Clerk, iffVfe Poyzer -;411 INCUMBENCY AND SIGNATURE CERTIFICATE I do hereby certify that I am the duly appointed and acting 74 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 is the duly appointed officer of Lessee holding the office set forth opposite his/her respective name . I further certify that (i) the signature set forth opposite his/her respective name and title is true and authentic and (ii) such officer has the authority on behalf of Lessee to enter into that certain Lease with Option to Purchase #07-038-AF dated August 7, 2007, between Lessee and Municipal Finance Corporation, and all documents relating thereto. Name Title Signature Tina Kundig Finance Director IN WITNESS WHEREOF, I have duly executed this certificate hereto this 17th day of August, 2007 . Lorrie, Poyzerj C: ty Clerk • INSURANCE AUTHORIZATION LETTER TO: Davis & Graeber Insurance Services 4 { 470 E. Highland Ave. , P.O. Box 40 Redlands, CA 92373 Attn: Roberta Reeves RE: Lease With Option To Purchase #07-038-AF dated August 7, 2007 between the undersigned as lessee, and MUNICIPAL FINANCE CORPORATION as lessor and CITIZENS BUSINESS BANK as Assignee of lessor. The Insurance Requirements listed below arc required to cover property described as follows: All Property covered by Lease#07-038-AF and further described as Two(2)2008 Ford Expedition 4 x 4 command vehicles with appurtenant equipment Located at:Pnaal,Pnaa2,Pnaa3 Evidence of insurance in the form of a binder or cover letter is acceptable until formal certificates can be issued. Mail this within five(5)working days to: CITIZENS BUSINESS BANK c/o Municipal Finance Corporation 23945 Calabasas Road,Suite 103 Calabasas,CA 91302 BODILY INJURY AND PROPERTY DAMAGE: A. $1,000,000 combined limits(primary plus umbrella)for Bodily Injury and Property Damage Coverage, B, Endorsement naming Assignee as an Additional Insured. C. Endorsement giving Assignee thirty(30)days written notice of any cancellation,reduction,or alteration of coverage. D. Endorsement stating: "It is understood and agreed that this insurance is primary insurance insofar as it relates to any and all equipment leased from Assignee." II. PHYSICAL DAMAGE REQUIREMENTS: A. All Risk Coverage for not less than the total cost ofSI10,000.00. B. Endorsement naming Assignee as Loss Payee. C. Endorsement giving Assignee thirty(30)days written notice of any cancellation,reduction,or alteration of coverage. D. Endorsement stating: "It is understood and agreed that this insurance is primary insurance insofar as it relates to any and all equipment leased from Assignee." The undersigned lessee hereby authorizes you to provide the lessor and Assignee with Certificates and Endorsements per the above. CITY OF ' •:LANDS ByOr 1j1► ,!'!/� ,/.%/� ATTEST: lek �...t 4 4r Har 4reon, Mayor Lorre Poyzerif y Clerk sate August 7, 2007 • ti VM SELF-INSURANCE CERTIFICATE#07-038-AF This self insurance certificate is issued pursuant to that certain Lease with Option to Purchase dated August 7, 2007("Lease") by and between Municipal Finance Corporation("Corporation"),a corporation duly organized and operating under the laws of the State of California as lessor and EM the City of Redlands, a municipal corporation duly organized and existing under the laws of the State of California ("Lessee") as lessee. The undersigned Lessee provides this Certificate as a description of its self-insurance program. I. Property Insurance Lessee is self-insured for damage or destruction to the Property. YES circle one) If yes,the dollar amount limit for property damage to the Property under e Lessee's self-insurance program is $ The Lessee maintains an umbrella insurance policy for claims in excess of Lessee's self-insurance limits for property damage to the Property as indicated above. YES NO (circle one) If yes,the umbrella policy provides coverage for all risk property damage.YES NO(circle one) If yes,the dollar limit for property damage to the Property under such umbrella policy is S Name of self-insurance consortium(if applicable) 2. Liability Insurance Lessee is self-insured for liability or death of any person or damage or loss arising out of or relating to the condition or operation of the Property.°NO (circle one) If yes, the dollar amount limit for liability coverage on the Property under the Lessee's self-insurance program is s 500,000 The Lessee maintains an umbrella insurance policy for aims in excess of Lessee's self-insurance limits for liability including injury or death of persons or damage to property as indicated above. YE NO (circle one) If yes,the umbrella policy provides coverag ar liabilities for injury and death to persons as well as damage or loss of property arising out of or relating to the condition of the Property.eb 0(circle one) If yes,the dollar amount of the umbrella policy's limits for such liability coverage is $ 10,000, 000 Name of self-insurance consortium(if applicable) 3A. Lessee maintains a self-insurance fund.10 NO (circle one) If yes,please complete the following: Moneys in the self-insurance fund are subject to annual appropriation. YES (.}(circle one) The total amount maintained in the self-insurance fund to cover Lessee's self-insurance liabilities is s 500,000 Amounts paid from the Lessee's self-insurance fund are subject to limitations for each claim. YE- 0 circle one) If yes,the dollar amount of limit per claim is S . 3B. if Lessee does not maintain a self-insurance fund,please complete the following: Lessee obtains funds to pay claims for which it has self-insurance from the following sources: The limitations on the amounts payable from the sources for claims are as follows: 4. The following entity or officer has authority to authorize payment for claim: City Council In the event the entity or officer in the prior response denies payment of a claim,does the claimant have recourse to another administrative officer,agency or the courts?0NO (circle one) If yes,to whom does the claimant have recourse? Courts IN WITNESS WHEREOF, Lessee has caused this Certificate to be executed and delivered by its duly authorized officer as of the date below written. CITY OF REDLANDS BY: / j J. Harris() TITLE: ayor ATTEST: ,. i� Lo ie Poy 'ty Clerk Date: August 7, 2007 INSURANCE DATA #07-038-AF Please provide the information requested below. A. Name, address, and phone number of the Agent handling Lessee ' s physical damage insurance. Name: Davis & Graeber Insurance Services Address : 470 E. Highland Ave. , P.O. Box 40 Redlands, CA 92373 Phone # : ( 909) 793-2373 Contact : Roberta Reeves B. Name, address, and phone number of the Agent handling Lessee ' s property damage/public liability insurance coverage. (If same as (A) , write "same") Name: "same" Address : Phone # : Contact : . By: mr, 3,011 Harrison, Mayor ) ATTEST:/,-Th / ! Lo ie PoyzrirC'ty Clerk '1 fizR CERTIFICATE OF ACCEPTANCE #07-038-AF This Certificate of Acceptance is issued pursuant to the Lease with 0 Option to Purchase dated as of August 7, 2007 (the "Lease" ) between the CITY OF REDLANDS (the "Lessee") as lessee and MUNICIPAL FINANCE CORPORATION (the "Corporation") as lessor. Lessee hereby acknowledges as of the date specified below, the receipt, inspection and acceptance of the Property described on Lease Schedule #07-038-AF. Lessee hereby certifies that the Property has been approved and inspected is now in Lessee' s possession and is in good order and repair (subject to any undischarged vendor/contractor warranty obligations) . Lessee further certifies that no event has occurred and is continuing which constitutes, or would constitute, an event of default but for any requirement of notice or lapse of time or both. Property Acceptance Date: , 20 IN WITNESS WHEREOF, the Lessee' s authorized agent confirms the Property acceptance date specified above by executing this Certificate of Acceptance . CITY OF REDLANDS (lessee)40, By dir,"304,/ ZO/1 Jo' Harrison Title -yor ATTEST: Lorre Poyzei w Clerk FA A A4 $, ; rAV ° -Ntttitct City of ..REcitanc13, : L AZOV0:4) August 7, 2007 Ms, Dixie Matte Manager of Administration Municipal Finance Corporation 23945 Calabasas Road, Suite 103 Calabasas, CA 91302 Re: Investment of Financing Amount Lease with Option to Purchase #07-038-AF Dear Dixie: Pursuant to Section 5 of Lease with Option to Purchase #07-038-AF dated August 7, 2007 between the City of Redlands (the "District") and Municipal Finance Corporation (the "Corporation") , the District hereby directs the Corporation (or its assignee) to open an Acquisition Account at: Fidelity Investments Public Sector Services Company 82 Devonshire Street Boston, MA 02109 The Financing Amount deposited to the Acquisition Account shall be invested in Treasury Portfolio, Class 1 (fund number 695) . The District hereby acknowledges a receipt of the fund prospectus for its file. The Financing Amount and interest earnings thereon shall remain invested in the Acquisition Account until such time as the District provides the Corporation further notice. Sincerely, +gig "Preserving the Past, Protecting the Future" P.O. BOX 3005 • REDLANDS, CA 92373 --4(eZIA-MaN Office of the Daniel J. McHugh City Attorney 1012117MIV City Attorney Michael Reiter Assistant City Attorney City of Redlands .!1 August 8, 2007 MUNICPAL FINANCE COPORATION 23945 Calabasas Road, Suite 103 Calabasas, CA 91302 RE: Lease with Option to Puchase# 07-038-AF dated as of August 7, 2007 by and between Municipal Finance Corporation, ("Corporation") as Lessor, and City of Redlands ("Lessee") as Lessess. Ladies and Gentlemen: I have acted as counsel to Lessee with respect to the Lease with Option to Purchase agreement described above (the "Lease") and in this capacity have reviewed a copy of the executed Lease and related documents or exhibits attached thereto. Based upon the examination of these and such other documents as I deem relevant, it is my opinion that: 1. Lessee is a municipal corporation and 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 the power under applicable law to enter into the Lease, and to carry out its obligations thereunder and the transactions contemplated thereby. 3The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee, and is a legal, valid and binding contract of Lessee enforceable in accordance with its terms, except to the extent limited by State and Federal laws affecting remedies and by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditor's rights. 4. A resolution duly authorizing the execution and delivery of the Lease and related documents was duly adopted by the governing body of Lessee on August 7, 2007 and such resolution has not been amended or repealed and remains in full force and effect Sincerely, Daniel J. McHugh Cc: N. Enrique Martinez, City Manager Tina Kundig, Finance Director P.O. Box 3005 • Redlands,CA 92373 (909)798-7595 • FAX(909)798-7503 ?-1-4 DThillarsWfuni Finance—Opinion 8/7/07 0 44 00 00 4044404040 0,000,0W0000,I0WW:Vill? RESOLUTION NO. 6643 AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE WITH OPTION TO PURCHASE, AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION THEREWITH 1$!: WHEREAS, the City of Redlands (the "City") is a municipal corporation organized and existing under and pursuant to the Constitution and laws of the State of California; and WHEREAS, the City desires to provide for financing in the approximate amount of$110,000 for the acquisition of 2 command vehicles and appurtenant equipment (the "Property"); and WHEREAS, Municipal Finance Corporation (the "Corporation") has proposed a cost-effective lease purchase financing arrangement at a 4.50% interest rate; WHEREAS, the City has determined that this lease financing arrangement is the most economical means for providing the Property to the City. NOW, THEREFORE, it is resolved by the City Council of the City of Redlands as follows: SECTION 1. Lease with Option to Purchase. The Mayor is hereby authorized to enter into a Lease with Option to Purchase (the "Lease") with the Corporation to finance the Property, subject to approval as to form by the City's legal counsel. SECTION 2. Attestations. The City Clerk or other appropriate City officer are hereby authorized and directed to attest the signature of the Mayor or of such other person or persons as may have been designated by the Mayor, and to affix and attest the seal of the City, as may be required or appropriate in connection with the execution and delivery of the Lease. SECTION 3. Other Actions, The Mayor, City Manager or the Finance Director of the City are each hereby authorized and directed, jointly and severally, to take any and all actions and to execute and deliver any and all agreements, documents and certificates which they may deem necessary or advisable in order to carry out, give effect to and comply with the terms of this Resolution and the Lease. Such actions are hereby ratified, confirmed and approved. SECTION 4. Qualified Tax-Exempt Obligations. The Lease is hereby designated as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), The City, together with all subordinate entities of the City, do not reasonably expect to issue during the calendar year in which the Lease is issued more than $10,000,000 of obligations which it could designate as "qualified tax-exempt obligations" under Section 265(b) of the Code. SECTION 5. Reimbursement of Prior Expenditures. The City declares its official intent to be reimbursed from the proceeds of the Lease approved hereby for a maximum principal amount of$110,000 of expenditures occurring no earlier than sixty days prior to the adoption of this Resolution. All • reimbursed expenditures will be capital expenditures as defined in Section 1.150-1(b) of the Federal Income Tax Regulations. $ il _ SECTION 6, Effect. This Resolution shall take effect immediately upon its passage. -4 24- ADOPTED, SIGNED AND APPROVED this 7th day of August, 2007. f.; CITY OF REDLANDS, CALIFORNIA 411K dr WOW ATTEST: Jo. arrison, ayor Lo Poyzer, 4ty l k I, Lorrie Poyzer, City Clerk of the City of Redlands, hereby certify that Resolution No. 6643 was duly adopted by the City Council at a regular meeting thereof held on the 7th day of August, 2007, by the following vote: AYES: Councilmembers Gilbreath, Gil, Gallagher, Aguilar; Mayor Harrison NOES: None ABSENT: None ABSTAIN: None CgLorrie Poyzer, t irk i 6 41 0 ,,.., -------„,-,,,,,z, -tmmvnvzngtmertwm-FIWMMV Il Form 8038-G Information Return for Tax-Exempt Governmental Obligations lo. Under Internal Revenue Code section 149(e) OMB No. 1545-0720 (Rev. November 2000) 10- See separate Instructions. 4. Departmen1 of the Treasury rg Caution: If the issue price is under$700,000, use Form 8038-GC. Internal Revenue SenAce ,....4. Part I Reporting Authority If Amended Return, check here 1 Issuer's name 2 Issuer's employer identification number a ,4.7. City of Redlands 95 6000766 3 Number and street(or P.O. box if mail is not delivered to street address) Room/suite 4 Report number P. O.Box 3005 3 2007-04 5 City, town, or post office, state, and ZIP code 6 Date of issue Redlands,CA 92373-1505 08-24-2007 7 Name of issue 8 CUSIP number Lease with Option to Purchase#07-038-AF NA 9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone number of officer or legal representative Tina Kundig, Finance Director ( 909 ) 978-7541 Part II Type of Issue (check applicable box(es) and enter the issue price) See instructions and attach schedule 11 0 Education 11 12 0 Health and hospital 12 13 0 Transportation 13 14 0 Public safety 14 15 0 Environment (including sewage bonds) 15 16 El Housing 16 17 0 Utilities 17 18 Other, Describe P. Two 2008 Ford Expedition vehicles 18 11 0 000 19 If obligations are TANs or RANs, check box PP. til If obligations are BANs, check box 20 If obligations are in the form of a lease or installment sale, check box Part III Description of Obligations. Complete for the entire issue for which this form is being filed. (c)Stated redemption (d)Weighted (a)Final maturity date (b)Issue price (e)Yield price at maturity average maturity 21 08-24-201 2 _ $ 110, 000 $ NA 5 years 4 . 5000 % Part IV Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 22 23 Issue price of entire issue (enter amount from line 21, column (b)) 23 11 0, 000 24 Proceeds used for bond issuance costs (including underwriters' discount) . 24 25 Proceeds used for credit enhancement . . . , . . . . . . . 25 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 , 27 Proceeds used to currently refund prior issues 27 28 Proceeds used to advance refund prior issues 28 I /4e, 29 Total (add lines 24 through 28) 29 30 Nonrefundinq proceeds of the issue (subtract line 29 from line 23 and enter amount here), 30 11 0, 000 Part V Description of Refunded Bonds (Complete this part only for refunding bonds.) 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . „ 1,- NA years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded , . , NA 10- years 33 Enter the last date on which the refunded bonds will be called . . . . , . , . . . . po. NA 34 Enter the date(s) the refunded bonds were issued P. NA Part VI Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 NA NA 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a b Enter the final maturity date of the guaranteed investment contract li. .1/A NA 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 110. Li and enter the name of the .. issuer 111. and the date of the issue II* .:., 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box . . 10' PS i39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box Po- 0 , ti 40 If the issuer has identified a hedge, check box 0. E] M 1 Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge 4-4 and belief, they are true, correct,and complete. Sign de Here 8/7/07 L Jon Harrison, Mayor g pr Srgnature of 7ss 75 i;uthorized representative Date Type or print name and the ril f1-1. For Paperwefk Reduction Act Notice, see page 2 of the Instructions. Cat. No. 63)735 Form 8038-G iRev 11 2000) Ael -------------- ommva:-o *WkISNiw5wmswtmpsaz,imitwomwwv ,-,,,, ,vau2tvvrfmr--asgta,Voroang