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HomeMy WebLinkAboutContracts & Agreements_47-2008_CCv0001.pdf LEASE WITH OPTION TO PURCHASE 403-026 This LEASE WITH OPTION TO, PURCHASE dated April 2008 (this "Lease") is by and between MUNICIPAL FINANCE CORPORATION, ("Corporaticn") a corporat-i-on duly organized and operating under the j 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 ('IT e3see") as lessee. RECITALS : WHEREAS, Lessee deems it- essential for Lessee to acquire the property descr 4 bed 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 mutua1ly cooperate now _L 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 con S4 -Lderation of the mutual covenants hereinafter set forth, the parties hereto agree as follows : SECTION 1 . Lease. Corporation hereby leases to Lessee, and T essee hereby lease�_sand hires from Corporation all property (the Property") described in the schedule or schedules (collectively, tLhe "Schedule"! executed by the parties concurrently herewith and hereafter and made a part hereof- Hereinafter, reference to Corporation means Coroorat4 .1-on and Corporation 's assigns for those rights, and obligations -that may be assigned by Corporation. SEC'TICN 2 . Term. The terms and conditions of this Lease shall become effective upon the authorized execution of t-1-1jS T ease by the parties hereto. The rental term of the- Prorje-rty ! eased 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 subdiV4 ' ision, duly Organized and existing under the Constitution and laws of the State of California with authority to enter into this T erf7crm� all of its ob 1 4 - �ease and to p igations hereunder. 'b', Lessee ' s governing body has duly authorized, the execu�-4 on f t h Ji S T -ease and fu�rther represents and w_arrants that Li requirements have been met and procedures enforceability. ollowed to ensure its C) The execution, delivery and performance of this Lease do not n and will not result in any breac' 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 L provisions of the California Public Contract Code applicable to the acquisition OIL the Property leased hereunder. (f) The Property being leased is essential to Lessee in the performance of its governmental functions and ir-'s estimated useful li 'e to Lessee exceeds the 'term of this Lease. (9) 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 Staf--e'of California, with 'Lull 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, dei-livery and performance of this Lease I- �Iave been dully _L authorized by a! necessary corporat e actions on t-h e part of Corporation and do not require any lurther approvals or consents . kc) The exeCutjLon, delivery and Performance of this T ease do not and will not -res, It , Ij u , 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 threatened action or of Corporatl� on, agency wh i c h W4 - i Proceeding iDel`ore anv court - or adr,-,inlistrative Coroorat4on �_L_L materially ad-,,erseiy ' -1�-' 1 4 � _L to perform jt-q the a-_L_L 47 ga: t, y 01 ions under this Lease . 2 SECTION 5 . Property Acguisition. Corporation hereby appo Lessee as its Purchasing agen t -1-n-ts and Lessee here' by accepts to acquire the Property 'eased hereunder j _L - ter, the "Agency") . The Agency said appointment (hereinaf� is limited to i) negotiation of terms, conditions and aca.uLsition cost of acquiring the Property from suppliers and contractors (collectively, -the "Supplier") selected by Lessee; ii) to j the inspect-Lon 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. SECTION 6. Lease Proceeds . Monevs available to Pay Property Costs set forth on Th_e__Sc�heduile are def .ned as the "Lease Proceeds" . dDisbursement Of Lease Proceeds to Pay Proplerty costs can be made either 4 _Lrectly to the Supplier or to Les expend 4 see as a reimbursement of its Prior _Ltures for Property costs . Lessee shall deliver to f, - 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. Disbursements of Lease Proceeds in advance of Lessee exe CUt4 Certificate of Acceptance may be made pursuant to the fol -I-ng a ilowing terms and conditior�s : (a) the principal amount of each disbursement shall accrue interest (4n+-erim rent) at the interest rate referred to on the Schedule from the disbursement date to the Property acceptance (b) the total principal amount o date; f the disbursements shall not exceed the Lease Proceeds amount referred to on the Schedule, and disbursement shall be made on or after three months (c) no this Lease . from the date of SECTION 7. Rental - Payments . LESSEE SHALL PAY RENTAL PAYMENTS (-�­ CORPORA7T Payments" - -ON ) 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 -0 TIME DES-1-,NATE 1N WRITING. Should Lessee , _L -Lail to Pay any Part of Rental Payments herein within fifteen (15) days I- the 1--om the due date thereof, Lessee shall upon Corporation 's written request, pay interes't on such delinquent Rental Payment from the date said Rental Payment was due unti'L paid at the rate Of twelve percent (12%) per annum or maximum legal -ate, what-ever is less . Lessee shall pay Rental the exclusively from legal' Payments Ly 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 cons­t'rued to be a debt of Lessee in contravention of any ap-ij — le const` t- or reaU4 Pi-cabl �­utlonal Or statutory Ij _ -ations . �rements concerning the creation of ,, I m' t L_L shai! anything �ndeb-_edness 'by Less�_e, nor ccnI:ained herein constitute a piedge Of the general revenues 0-F Lessee. Exce-Q� as specif4l cally proTlrided tax obligation of T - :n Section 29, -t - Lessee to PaY tlhe Ren _L -ne t,a] Payments wj­ be absolute a nd j-I�L 3 unconditional in a 11 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 4 +-S fair value occupancy of 'the Property. Lor the Possession, use and/or SECTION 8 . S_ecur ty Interest . As security for the bl,gat,o all of Lessee 's ns payment Of er eunder, Lessee hereby grants he Property, its accessions and attachments thereto and replacements Corporation, its successors or assigns, a security interest in t ' thereof and substitutions therefor and all proceeds of any of the foregoing. Lessee agrees to execute such additional document , _L - such financing statements, which Corporation deems necessar or appropriate including financing statements, and authorizes Corporation to file s y 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, municipal, Police, and other lawsf 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. hours prior notice, the Upon forty-eight (48) Corporation s�_allat any and all t 4 mes during normal business hours have the right to enter into and upon T premises where the Property is located for the purpose 1�esseels t the same or observing its of inspecting notice of any a4- use . Lessee shall give Corporation -immediiate Ltachment or other judicial Property. process affecting the SECTION 12 . � rcperty Selection and Ordering. Lessee has I selected or wiiii seiect the type and quantitv Of the Property _11eas­ed nereunder. Lessee shall ensure 'that ail p ro_ erty is properly to Corporation. Corporat - invoiced tion shall not be ! Jable for, nor shall the validity, enforceability or effectiveness of - any delay this Lease be affected by, ii n 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 _L J_j_ or warranted by the Supp' ' er, or is unsatisfactory for any reason, Lessee shai'L make any c IL a im on account thereof solely against the SUPP-lier. T L assumes the risks, burdens and Obligations to the J-1essee hereby SuPP1 _' er On account -he Property and/or cancellation of of nonaccept-ance of t �rlls Lease and upon tl` 3 occurrence C-F any such event, Cor oration wil 11 p assIgn to Lessee, without recourse or warranty, 4 +- s rigjhts and to the Property and any docu-ments re1ated therer--c. 4 SECTION 13 . Disclaimer 04� Warranty. CORPORATION NOT MANUFACTURER OR SU 1� BEING THE h'eLiLH OF THE PROPERTY NOR A DEALER IN SIMILLAR PROPERTY, HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATICN,_ WARRANTY, OR COVENANT, EXPRESS OR IMPLIE'D, 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 CORPORATION. SUCH CLAIMS AGAINST SECTION 11-4 . 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 (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 Corpora t4 on. SECTION 15 . Relocation. Lessee shall provide Corporation prior written notice of iCs'intent to relocate the Proper all risks ty. Lessee assumes Of loss to the Properjty attendant to 4 tS relocation. The Property location shall be under Less�eels full control for its L own governmental purpose. movement and SECTION 16 . Maintenance and R Ilessee, and expense, shall furnish necessary at 4 ts own cost the Property in good repair, labor and materials to maintain -L condition, and workincr order. Lessee 's obligations to maintain +the Property does not reliev e the its responsibility to Supplier of fully perform with respect_- .0 al1 applicable Property warranties and guarantees . SECTION 17 . R21-sk 0�c - exception oil acts L LOSS; D amage; Destruction. With -esuiting from j -entional misconduct or gross the negligence by Corporation its agents' and representatives T hereby assumes and shall bear the entire Lessee risk ollf loss and damage to the Property from any and every cause wh tsoever. 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 effec wa 4 _Lves the benefit t. Lessee Of Civil Code Sections 1932t2) and 1933 (4) and any and all other rights to terminate thisLLease by virtue of any damage destruC-4 tion to the Property. Or SECTION 18 . Pk, , I - -11 YrS I Ca- L;amage/Public Lliabilitw -nsurance shall keen the Prone -Y insur1=1 rL Lessee as near.-i-y as practicable, ;_:49ainst- risk Of 1033 or darrnage -from aT-ly Peril covered ,�nder an ffalj ­� �sk" insurance Policy for not- ' -Ss than ti,,e fj _eD-lacement va'Lue the-recf, and 5 shall carry public liability and property damage insurance cover4 ng the Property. All said 4 nsurance 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 -,- L� L � certification of said pojilcies therefore and deliver to Corporation. Each insurer shall agree, by endorsement upon the Policy or Policies issued by it or by independent instrument furn1shed 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) (b) above, as applicable. L� or option Should Lessee replace,, restore, or repair the Property as set out in option (a) abovet this Lease shall continue in full force and effect . Lessee may self-insure UP to specified limits as _L� evidenced by a certificate of self insurance to be attached hereto in form and amount acceptable to Corporation. Any self-insurance program in which Lessee is a partic 1 p'ant shall comply with -he provisions under this Lease respecting cancellation and mod- ficat'- _J_ ion 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 T essee 's risk manager or an Independent insurance consultant which determination shall be made annually. Any deficiency shall be corrected within sixty ('00) days of Lessee becoming aware of such deficiency. 4� SECTION 19. Liens and Taxes . Lessee shall keep the free and clear of I I Property all ievies, liens, and encumbrances and shall promptiv pay all fees, assessments, charges, and taxes fmunicipal, state and federal) , including personal property taxes, which �may now or hereafter be imposed Upon the ownersh 4 _L- possesS4 P, leasing, renting, �_on, or use of the Propertyf exclud-ing ' sale, measured by Corpera-4 1 - , nowever, all taxes on or L-Lon's income . SECTION 20 . T demnity. Subject to Calliforni _t J - contribution and enforceability OF 4 a law concerning � indemnifications, Lessee shall indemnify Corporation against and hold CorPor_-t4 L�L -on harmless from any and a' ' claims, actions, suits, proceedings, costs, expenses, damages, and liabilities, including attorneys , fees, arising out of, connected with or resulting from th-e selection, Possessi' onr Use, opera-Lion, or return of the Property excepting that Lessee shall not be required to 4 _Lndemnify Corporation in the event that such liabi caused by the Qrcss negligence or 114t-v or damages are Cc-rporat4 _Lntentiona-IL misconduct -F -Lon, its aczent_-s or reoresen-tat"ves . SECTION ­ L IN Even-ts Delffauj, , . The term "Event of Default ', used in this T ease, means the oc-Carrence _s _1�01 1 1 one or Mare of 0 any L -iowlng events : (a , Lessee fa I', I S t 0 mak,-e any Rent al pay-re -t �or , ny 6 other Payment) with4 n fifteen (15-1 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, cond 4 tion 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 T ease, 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 liqU4 idator of Lessee or of all or a subs its assets, or a petition tantial part of -L for relief is filed by Lessee under federal bankruptcy, insolvency or similar laws . SECT-ION 22 . Remedies . Upon Lessee 's failure to cure an Event of Default within ten (10) days after CorporatiLon ' s written notJ thereof, Lessee ' s rights under this Lease shall M4 'ce Corporation w4 ter -L nate and the L11 become entitled to retain all Rental Payments previously paid and to recover all Past due payment s 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 eqU4 ty inclUd4 J- �ng, but not I-iLmited 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 cumu-1 ative of every other right or remedy given hereunder or now or hereafter existing at and may be enforced concurrent' in equity or by statute or otherwise, law or therewith or from time to time; proV4 ded, however, y any provisions to t- that not-withstan d4 -Lng he contrary herein, Corporation shall not under any circumstances have the right to accelerate the Rental Payments that L fall due in future rental periods or otherwise declare any Rental L ' Payments not then in default to be JLrrmediately due and payable . SECTION 93 . Non-Waiver. No covenant or condition to be Performed by Lessee under —this Lease can be wa-' written consent 0 4� ived except by Coruorat4 the on. Fo--bearance or indulgence by Corporation in any regard whatso�ever shall not constitute aj- waiver of the covenant or condition in question. Unt4j 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 C�r in equity despite said forbearance or indulgence. SECTION 24 . Assignment and Subleasing. Lessee shall not ass-icrn, transfer, pf*ecige, or hvp-o-r---':--- any part thereof, Or any 4 -ecate -this --ease, the -Property, therein, or i'b) sublet or lend Property or any part thereof except wj t,� ith t-le or 4 or Corporat-Lion which, i - I -L - wrLt,en consent --f - I Ln the case of s,ublei�:ting, s-hall not be unreasonably ��,Iithheld; P ded sublettj-ng shall not the tax-exe--mot St-atus of t'-�= fnterest ccmponent ,s c )F the Rental Payments payable by 7 Lessee hereunder. No such pledge, assignment, sublease or any Other transfer shall in any event affect or reduce the obligation of T essee to make the Rental Payments due hereunder. Consent 4 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 ass'lgn its obligations under this Lea'se with the except- on 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 Corporation or its assigns shally . Any such assignment by Sections 5950-5955 cOmPlY with the requirements of of the California Government Code. No such assignment shall be effective as aaa , . inst Lessee unless and until Corporation shall have filed with Lessee a copy of suc-L SS4 h a gnment 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 fii-ed with Lessee. During this Lease term, Lessee shall keep a complete and accurate record of all such assignments or notices of assignment . Subject to the 4� _,creg04 lng, this Lease inures to the benefit of, and is binding upon, the successors and assigns of the parties hereto. SEC-TON 25 . Ownership. The Property is and shall at all be and remain the _�o_lean� exclusive t ime s _T property of Corporation, and essee 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 be4 L acquired by Lessee hereunder, whether _ ng acting on be by Lessee or by a third party half of Lessee, 4 s vested In Corporation. SECTION 26 . Personal Propert . — L a7 ' �mes be and rema 4 y Ine Properly is and sh I-L or any part �­a t — �n personai property notwithstanding t, at all thereoF may now be or hereafter . . Lne Property affixed or attached to or imbedded 4 become in any manner n, or permanent-1 real property o- - y resting upon, any building thereon, or attached in any manner to what is permanent by means of cement, Plaster, nails otherw-ise. , bolts, screws or 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 +- -" for the specifJ -he specified dates and Led amounts set forth in the Schedule . � The Option price specified for a particu ; urchase ar date is in addition to the Rental- Payment- due on the same date . S-7 C 0 N 2,8 . Re-lease of T T f_'Ie Rental pavments - Liens . Upon �essee either rmaking a3l Z�lr PaYment, scheduled herein or making a purchase _L _L rporation, its sluccesscrs or aSS4C Option -L,Tns shall ' 1 1 ecra ca-use 8 title to the Property to be transferred to Lessee and ii) the release Of all liens, encumbrances or securit interests on the Property Y created Pursuant to Corporationts rights under this Lease. SECTION 29. Early Termination. Lessee may terminate this Lease in its entirety as .of t Lessee ' s failure to app Ile end Of any fiscal Year based solely Upon rcpriate funds for the subsequent fiscal year 's Rental Payments after exercising reasonable efforts funds from any and all of its legally available sources . Lessee agrees to deliver notice to appropriate adoption to Corporation Of such termination promptly therein Of Lessee 's final budget if no appropriation is upon included 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 designated location within the State Of California by Corporation in substantially as received, normal wear an good a Leasef Corporati d tear excepted. If Lesseecotnedition as when on may retain all amounts Previously rminates this may coliect and retain any amounts due and Paid by Lessee and Lessee 's then current unpaid to the end of any proceeds fiscal year* Corporation shall remit from the subsequen t sale Of the to Lessee then applicable Purchase Option price. Property in excess Of the SECTION 30 . Nonsubstitution. To the extent permitted by California law, if the ��his L�ease J , is terminated by Lessee with respect to Property in accordance with Section 29, Lessee Purchase, lease or rent personal P roperty to perform the agrees not to or functions taking the place of, same function agrees not those performed by such Property and to permit such functions employees or by an to be Performed by its own Y 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 the amount received from such sal Corporation sufficient pp,i e, less ail and to Pay the then costs Of such sale, is cable 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 validity of this Lease. would affect the SECTION 31 . Tax Cove ants . taken (a) G Lessee shall not take any any action within its control which action or permit to be the Passage Of time if not would cause or which, with of the Rental Payments to be cured would causef the interest components income tax Purposes . come includable in gross income for federal (b) private Activity Bond Limitatio Lease Proceeds Lessee shall assure that the are not so used as private business tests to cause this Lease Of Section 141 (b) to satisfy the Of the Internal Revenue Code 9 Of 19861 amended Section 141 (c) (the "Code") , Of the Code . Or the private loan financing test of (c) NO Arbitrage Lessee will not take any action or omit a r,y a c t 10 Of thi n which action Or omission, s Lease, would have caused this Lease to be an "arbitrage bond" withinI to take if reasonably expected on the date the meaning Of Section 148 (a) Of the Code. (d) Federal Guarantee Prohibit - directly guarantee ion. The Rental or !n ! irec United State, 0 tlY guaranteed in whole Payments are not r any agen or in part by the as to cause the Rental p cy Or instrumentality of ayments to be "federally guaranteed" within the meaning of Section 149 (b) Of the code. the United States so (e) Reimbursement reimbursement of p , Re u ations The Lease Proceeds used for rior expenditures compliance with Income Tax Regulations will be made Pursuant Section 1 - 150-2 . to and in (f) Bank Qualifie Lessee hereby designates this Lease Purposes Of Paragraph (3) that not more of Section 265 (b) obligations the in than Of the Code and represe for terest �10' 0001000 aggregate Principal nts Of the Code) from On which Is excludable amount of (excluding gross income for federal (under Section 103 (a) (i) private activity bon income ds, as defined in Section 141 Of the Code, except qualified tax Purposes Code and 501 (c) (3) b Onds as defined in Section 145 Of the (ii) current refunding ob I the refunding obl ' igations to the extent the amount of Igation does not exceed the Outstanding amount Of the refunded obligation) , including thi by Lessee, including al Is Lease, has been or will be issued calendar Year 2008 . 1 subordinate entities of Lessee, during SECTION 32 . Extraordina Prevailing Party shall be e [4 gosts - In the case of litigation, ail costs and expenses, - itled to recover from the the allOcabie cost of , including attorneys , Opposing party in-house fees (which may be the in exercising counsel) incurred by the Of the terms, any of its rights or remedies hereunder Prevailing party conditions or provi siOns hereof. or enforcing any SECTION 33. Severabilit r�Ceaa b"I e. Y a be held invalid or utnen - bIf any Provision Of this Lease shall -such holdings shall not invalidate or render jurisdiction, provision Court Of competent Of this Lease unenforceable any other unless elimination Of such provision materially alters the right's and obligations embodied in this Lease. SECTION 34 . !Emntire A , ;�­-,,�-,�Are�ement This Lease, the Schedule, and any agreements that specifically refer t * by authorized agen 0 this Lease that are duly executed ts Of the parties hereto constitute the entire properly authorized agreement between Corporation and Lessee, and it shall not be further amended, altered, or changed except by a written agreement that is and executed by the Parties hereto. 10 SECTION 35 . Notices. Service shall be sufficient at If given Personallof all notices under this Lease its respect hereinafter y set i,e address or mailed to the Party involved such party may provide forth mailed to such address in writing from time or at such address as mail to time- Any such States shall be effective when deposited in notice , duly addressed and with Postage prepaid. the United SECTION 36. 1 CTities . The titles to the Sections are solely for the onvenience If the parties and are not an aid in the interpretation thereof. Of this Lease SECTION 37 . Further Corporation Assurances -- ""uE"n �and and Les—s—ee and Corrective �ag�ree that the y wij fro,� InSt�ruments d d i v�. will, from time execute, acknowledge and y _1, Instrumen�ts. oments hereto and such ed may be to time and delivered, such suppi deliver or cause to be executed, acknowledg ' reasonably required for correcting further instrument 3 as description Of the Pr ope any inadequate or carrying out rty hereby leased or incorrect the expressed intention intended so SECTION 38 . Execution Of this Lease. to be or for c unt in Counter executed in several ---------- a r t s - This Lease may be all Of which shall consti erparts, each Of which shall be original and SECTION 39. tute but one and the same instrument. and all Time. Time is Of the essence in this Lease and each of its provi-317-0—ns . SECTION 40 . obligation, Lease Interpretation. Of the �t ------------------- This with the laws of t Par ies — Lease and the rights and he State laereunder shall be determined IN WITNESS WHEREOF, of California . in accordance authorized agents the Parties hereto have caused their to execute this Lease on the dates specified belo MUNICIPAL FINANCE CORPORATION CITY OF REDLANDS 23945 Caiabasas Road, Suite 103 35 Cajon St . ; Calabasas, CA 91302 (lessor) Redlands, P- 0- Box 3005 CA 92373-1505 By (lessee) By Title _�W(H I I.'.'..,.",.............. J "Harrison Titl V M __ Date _Mayor ---------- Date _. Ai2ril 15 2008 ATTEST: Cit Clerk LEASE SCHEDULE 408-026 This Schedule is issued Pursuant to the Lease with Option to Purchase dated as Of April 15, 2008 by and between the undersigned. A* Property Location: Redlands Police Department 35 Cajon, Suite 6 B* Property Description: Redlands, CA 92373 Four Ford Crown Victoria sedans C* Name and Address and one Ford Explorer of Supplier: D* Lease Proceeds Summary: Estimated Property cost (including related expenses) : $126, 486. 13 Lease Proceeds : E. Lease Term. The $126, 486. 13 full term of this Schedule is commencing on the date Lessee for a Period and concluding thirty-six acknowledges acceptance Of the Property (36) months thereafter. F- Rental Payments . Rental Payments for this Scheduie are due In three (3) consecutive annual payments in accordance with the Payment Schedule herein. Each Payment includes interest at the rate Of 4 - 259o, Per annum on the unpaid Principal balance. The Financing represents the origInal Principal balance. Amount in Section D G. Lease Acquisition Cost. The cost for Lessee to acquire the Property Over the full specified term of this Schedule ' Is $131, 785- 68 Payment Schedule: Payable annually in advance r------- PMT Due Date # I i 1�entai (2) Purchase #08-026 1 a ent 0 1 To 2 $43 ::1 1 — Ption To , !:? 3 .-56 Princi al Interest 3 43, 928 - 56 43 , 191 . 15 $43, 928 . 56 0. 00 TOTALS : 40, 419. 86 3 508 . '70 42, 137 71 1 790 . 85 (1) Refer to the paragraph in the Lease e IUA �1 1��a=t�aa ease of Liens', (2) Refer to the paragraph in the Lease entitled "Purchase Option and "Release of ntitled "Rel Liens. ,, Purchase Options are in addition to the rental Payment due on the day. same Approved and agreed to: MUNICIPAL FINANCE CORPORATION (lessor) CITY OF REDLANDS By: (lessee) Title: BY: n JjHar� is6ri' - ------- Title: Date : z yor Date: April 15, 2008 ATTEST: IRISH ASSIGNMENT OF LEASE #08-026 FOR VALUE RECEIVED, MUNICIPAL FINANCE CORPORATION (,,Corporation,,) as assignor without recourse does hereby sell, assign, and transfer to WILLIAM A. MORTON AND ANJA NOLTING MORTON, TRUSTEES OF THE WILLIAM A. MORTON AND ANJA NOLTING MORTON REVOCABLE TRUST DATED MAY 17, 2001 ("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 April 15, 2008 between the Corporation as lessor and CITY OF R'DLANDS ("Lessee") as lessee (hereinafter said lease and any extension Supplements, amendments, additions thereof and any 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, ob-1 igatiOn 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 performance Of any of the covenants, agreements, for the specified in the Lease to be kept, or obligations paid or performed by Corporation with exception Of Assignee 's obligation to - Ssue not ' default Of the Lease and to convey ices upon Lessee 's Lessee 's exercise of its title t1O the leased Property conformance with the terms of option to Purchase said Property upon and warrants the Lease. in that as of t Corporation further represents he 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 Lesse terms thereunder. e is not in default Of any Corporation hereby constitutes and the true and lawful irrevocably appoints Assignee endorse payments and attorney Of Corporation to demand, receive and either to give receipts, releases and sat same manner and isfactions in the name of Assignee or in the name Of Corporat with the same effect as ion in the could do been made. Within fifteen (15) days after Assignment Of Lease had not Corporation receiving its if this Assignee shall cause to be reieasteo each Schedule covered hereby, full bargain with respect interest in the Property thereto. d to Lessee its vested This Assignment Of Lease shail be accordance with the laws construed and governed in this Assignment Of the State Of California . Any provision of only to to be Prohibited by ineffective Of Lease found the extent law shall be 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 an accordance with the Municipal Lease Placemen d assigns in January 1, and is made case 1999 entered into between Corpora t Agreement dated as of Of litigation, the prevailing tiOn and Assignee . In Party shall be entitled to the recover �rom the OPPOS-Ling party aj, Costs and expenses, inCluding attorneys I fees which may be the allocable cost of in-house counsel, incurred by the prevailing Party in exerci sing any of its rights or remedies- hereunder or enforcing any of the terms, hereof. conditions, or provi lslons 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 WILLIAM A. MORTON AND ANJA NOLTING MORTON, TRUSTEES OF THE WILLIAM A. MORTON AND ANJA NOLTING MORTON TRUST DATED MAY 17, 2001 REVOCABLE of that certain Lease with Option to Purchase #08-026 dated as of April 15, 2008 (the 'IT ease") , 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 WIT LIAM A. MORTON AND JA ANT NOLTING MORTON, TRUSTEES OF THE WILLIAM A. MORTON AND ANJA NOLTING MORTON REVOCABLE TRUST DATED MAY 17, 2001, c/o Municipal Finance Corporation, 23945 Calabasas Road, Suite 103, Calabasas, CA 91302 and further agrees it shall have no counterclaim due thereunder as to said Assign L or offset acfajnst rentals S_ 'a 4 d Assignee shall not ee and expressly further agrees t-ha�t- for the obligations spec except. -ort-h in the foregoing Assignment - if' caliy set of Lease) be liable for any of the obliqations or burdens of the lessorunder said Lease. IN WITNESS WHEREOF, the 'Lessee has caused th 4 s Acknowledgment of _L Assignment to be executed by its authorized agent on the date specified below. CITY OF REDLANDS (lespee) B y —Ha�� _ J 0 ATTEST- �' r ison Ci�ty;Clerk /1 DD a-t e April 15 , 20o8 2 CERTIFICATE OF LESSEE The undersigned, duly authorized representative of City of Redlands ("Lessee") as lessee under that Lease with Option to Purchase #08-C as of April 1-5, 2008 ("Lease") with Mun -L 26 dated hereby certifies as follows: iciPai F4 inance Corporation as lessor, 1 . 1 have been duly authorized to execute and deliver, on behalf of Lessee, 'the Lease and related documents Pursuant to' a resolut - Lessee's governing body, which resolution is in ion adopted by 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 hereof, as if made on 'his date. as Of the 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; in any way contesting the existence or powers of Lessee, as such ex(ics)tence or Powers in any way relate to the issuance Of the Lease or Lessee's Lease, or (d) could material obligations under 'he ily adversely affect of Lessee. the financial pos4t � � ion 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 l- 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 2008 and including the Tax-Exem L information Return for p Governmental Obligations Form 8038-G filed wi'th the Internal Revenue Service for the Lease, Lessee has filed -L __ Information Return Fcrm(s) 8038-G With the Internal Revenue Service. The meaning of the capitalized terms in this Certificate are those prov�ded 19/the Lease. the same as ATIT: By: 7jo�L� /—ARE on arrison, Mayor -� Y Date A ril 15, 2008 Cit Clerk N OR'! INCjMBENCY AND SIGNATURE CERTTFICATE do hereby certify that I am the -ISecretary/ClLerk o4z duly appointed and acting � 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 #08-026 dated April 15, 2008, between Lessee and Municipal Finance Corporation, and all documents relating thereto. Name Title Signature .Tnn Wn�-4--- M,1 V n 7r -this IN WITNESS WHEREOF, I have duly executed this certificate hereto 15th day of Apri_l , 2008 . Cit-Y INCUMBENCY AND SIGNATURE CERTIFICATE do hereby certify that I am the duly appointed and acting Secretary/Clerk of the validly existing City Of Redlands, a municipal California under the Constitution and laws corporation ("Lessee") , and that, as Of the State of named below is the Of the date hereof, the individual set forth Opposite duly appointed Officer of Lessee holding the Office 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 #08-026 dated April 15, 2008, between Lessee and Municipal Finance and ail documents relating thereto. Corporation, Name Title Signature Tina T. Kund- Fitance _Director V- this IN WITNESS WHEREOF, I have duly executed this certificate hereto 15th day of April 2008 . CitY Clerk !NSURANCE AUTHORIZATICN LETTER TO. Davis & Graeber Insurance Services Inc 470 E Highland Ave, PO Box 40 Redlands , CA 92373 Attra, Roberta Reeves RE: Lease With Option To Purchase 408-026 dated April 15, 2008 between the undersigned as lessee, and MUNICIPAL FINANCE CORPORATION as lessor and WILLIAM A. MORTON AND ANJA NOLTING MORTON, TRUSTEES OF THE WILLIAM A. MORTON AND ANJA NOLTING MORTON REVOCABLE TRUST DATED MAY 17, 2001 ,-as Assignee of lessor. The insurance Requirements listed below are required to cover property described as follows: All Property covered by Lease 408-026 and further described as four Ford Crown Victoria sedans and one Ford Explorer Located at: Redlands Police Department Evidence of insurance in the form of a binder or cover letter is acceptable unt-1 forr-nal certificates can be issued. Mail this within five (5) working days to: WILLIAM A. MORTON AND ANJA NOLTING MORTON, TRUSTEES OF THE WILLIAM A. MORTON AND ANjA NOLTING MORTON REVOCABLE TRUST DATED MAY !7, 2001 c/o MnnLcipal Finance corporation 23945 Calabasas Road, Suite 103 Calabasas, CA 91302 BODILY 1NjURY AND PROPERTY DAMAGE: A. $1,000,000 combined limits (primary plus -:mbrelia) for Bodily Injury and PrcpE-,-rty Damage Coverage. B. Endorsement naming Assignee as an AiditLonal in3ured. C. Endorsement giving Assic jnee Lji r�- (�30 of any cancelLation, reduction, or alteration of coverage. D. Endorsement stating: "it is understood and agreed that tnis insurance is priiaarry insurance insofar as it relates to any and all equipment !eased from Assignee.'' PHYSICAL DAMAGE REQUIREMENTS: A. All Risk Coverage for not less than the total cost of $126,486.13. B, fndorsemenwt, naming Assignee a,"; L— C. Endorsement giving Assignee thirt yo) days wri _nctice of any cancellation, reduction, or alteration of coverage. D. Endorsement stating: "it is understood and agreed that this insurance "s 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 Celzti-iCates, and Endorsements per the above. ATTEST: Z o lfa:' rison, Mayor lerk n Ka" April -15, 2008 SELF-INSURANCE CERTIFICATE #08-026 This self insurance certificate is issued pursuant to that certain Lease W�Ah OptLOn �O P',IrCha�'s dawd Ap"I 15, 2008 ',"Lease"� by and between Municipal FiuduC'-' ­0fP0rati3u �"Corperat-'on"� , a corporation duly organized and operating under the Aws of t4e State of California as le��sor and rne City of 11�ediands, & mun,,cipa, corporation duly orqani:ed and existing under the iaws of the State of California ;"Lessee") as lessee. The undersigned Lessee provides this Certificate as a description of its self-insurance program. 1. Property insurance Lessee is self-insured for damage or destruction to the Property. YES (IS) (circle one) if yes, the dollar amount limit for property damage to the Property under the 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 $ (if applicable) Name of self-insurance Consortium 2. Liabillil-ty insuranc Lossee is self-insured for liability or death of any person or damage or loss arising out of or '07 reiating no the condition or operation cf the Property. NEW NO (circle one) If yes, the dollar amount limit for liability coverage on the Property ander the Lessee's self- insurance program is $ 1500 , 000 -nsui -7 in excess of Lessee's selt- -h e Lessee maintains an -�,.mbrella policy for cla-as insurance limits fa,lLability including injury or death of por,,,ons or damaqe to property as indicated above. 611j) NO (circle one) if yes, the umbrella policy provides coverage for liabilities for injury and death to persons as -,,iell as_damage or loss of property arising out of or feiating to the condition of the Property. (YES) NO tcircle one) if ves, the dollar amount of the umbrella policy's limits for such liability covorage is 00 , 000 , 000 Name of self-insurance consorvium (if applicable)_ 37— Lessee maintains a self-insurance Eund. (fjj) NO :circle one) if yes, please complete the following: YES NO Moseys Ln the self-insurance fund are subject to annual appropriatio" (circle one) The total �>.,rrount maintained in. the self-insurance fund to cor�ef Lessee's insurance liabilities is , 500 . 000 Amounts paid from the Lessee's self-insurance fund are subject to limitations for each claim. YES(W) (circle on.) if yes, the dollar amount of limit per claim is $ 3S. 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 folmwing entity or officer has aurhoriiy to aurtcrize payment for claim: City Council In the event the enti-tv Of Off--cer in tlie prior re.sponse denles payment of a c'La�-m, dces t'�(? cialmant have reCouzse to ano�her aclim--nistrative Officer, -agency or the court�3? YES N 0 Courts tf yes, to �-,,ho_­, dces -he cla�mant ha�,e reccurse? IN WITNESS WHEREOF, T�essee has caused rhis Cert,_flicate to be exec-_ited and cle ive red by _Jt_�5 cl-,ily ,�,,t,,0rfzE,rj O�lftl_e- ,is of th�l. da�e below written. CITY OF REDLANDS BY, on rri n Ma or Ma o TITLE:__�; r ATTEST'.',----\ r4 k Cler INSURANCE DATA #08-026 Please provide the information requested below. A. Name, address, and phone number of the Agent handling Lessee' s -physical damage insurance . vices Inc Name: Davis & Graeber Insurance Ser Address : 470 E Highland Ave, PO 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: 11same" Address : Phone # : Contact : By: Jon Harr1son,--Mayor ATTEST C;it C 1 e r k�'/, Daniel J. McHugh Office of the City Attorney Michael Reiter Attorney city Assistant City Attorney City of Redlands April 28, 2008 Municipal Finance Corporation 23945 Calabasas Road, Suite 103 Calabasas, CA 91302 RE: Lease with Option to Purchase #08-026 dated as of April 15, 2008 by and between MUNICIPAL FINANCE CORPORATION, ("Corporation") as lessor, and CITY OF REDLANDS ("Lessee") as lessee. Ladies and Gentleman: 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. 3. The 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 April 1, 2008 and such resolution has not been amended or repealed and remains in full force and effect. P.O. Box 3005 - Redlands, CA 92373 - (909) 798-7595 - FAX (909) 798-7503 MUNICIPAL FINANCE CORPORATION RE: Lease with Option to Purchase 908-026 dated as of April 15, 2008 by and between MUNICIPAL FINANCE CORPORATION, (-Corporation") as lessor, and CITY OF REDLANDS ("Lessee") as lessee. April 28, 2008 Page 2 5. There is no litigation, action, suit or proceeding pending or, to the best of my knowledge after due inquiry, threatened before any court, administrative agency., arbitrator or governmental body that challenges the authority of Lessee to enter into the Lease or the transactions contemplated thereby. This opinion may be relied upon by Municipal Finance Corporation, its successors and assigns. Dated: April 28, 2008 Sincerely, Daniel J. �, cHuggh City Attorney for the City of Redlands DOCUMENTATION INSTRUCTIONS AND REFERENCE The following documents represent the complete Lease documentation package: 1. Lease With Option to Purchase 2. Lease Schedule 3. Assignment of Lease and Acknowledgment of Assignment 4. Certificate of Lessee 5. Incumbency and Signature Certificate overty) 6. Certificate of Acceptance (executed upon final acceptance of Pr _ - All of the above documents shall be executed with original signatures. The signatory should be the officer(s) referenced in the resolution, in addition to the above documents, the following additional items are required: ,/Resolution Please send an original or certified copy of the resolution adopted by the governing body. Legal opinion Please forward the Lease documentation to your counsel for legal review and the issuance of a legal opinion like the sample provided. The legal opinion should be on the counsel's letterhead and bear an original signature. Insurance Please fill out the Insurance Authorization Letter, the Insurance Data Form and the Self-Insurance Certificate (if applicable) . FAX the Insurance Authorization Letter to your insurance agent(s) and to MFC ASAP. Return completed original along with the insurance Data Form, the Self-Insurance Certificate and other Lease documents. 8038-G Form Sign and date. MFC will file the form upon funding. Vendor Invoice include original invoice for each disbursement to be made to vendor. Sign on each invoice ,Approved as to Payment" . Attach to Authorization to Disburse form. Authorization to Disburse or Reimburse Sion applicable form and attach to invoice or copies of appropriate backup ""invoice and check) documents. Please call Dixie Matte, manager of Administration 4 f you have any questions regarding documentation procedures.