HomeMy WebLinkAbout06-332 - Resolutions RESOLUTION NO. 06-332
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RANCHO CUCAMONGA, CALIFORNIA, AUTHORIZING THE
EXECUTION AND DELIVERY OF AN EQUIPMENT
LEASE/PURCHASE AGREEMENT, AND RELATED
INSTRUMENTS, AND DETERMINING OTHER MATTERS IN
CONNECTION THEREWITH
WHEREAS, the governing body of the City of Rancho Cucamonga ('Lessee")
has determined that a true and very real need exists for the Equipment (the "Equipment")
described in the proposed Equipment Lease/Purchase Agreement (the "Agreement") by and
between LaSalle Bank National Association, as lessor, and Lessee, as lessee, presented to this
meeting; and
WHEREAS, Lessee has taken the necessary steps, including those relating to
any applicable legal bidding requirements, to arrange for the acquisition of the Equipment; and
WHEREAS, Lessee reasonably anticipates that it and its subordinate units will
not issue tax-exempt obligations in the face amount of more than $10,000,000 during the
current calendar year; and
WHEREAS, Lessee proposes to enter into the Agreement with LaSalle Bank
National Association substantially in the proposed form presented to this meeting.
NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF
LESSEE AS FOLLOWS:
SECTION 1: It is hereby found and determined that the terms of the Agreement
in the form presented to this meeting and incorporated in this
resolution, are in the best interests of Lessee for the acquisition of
the Equipment.
SECTION 2: The Agreement is hereby approved. The Mayor of Lessee and
any other officer of Lessee who shall have power to execute
contracts on behalf of Lessee be, and each of them hereby is,
authorized to execute, acknowledge and deliver the Agreement
with any changes, insertions and omissions therein as may be
approved by the officers who execute the Agreement, such
approval to be conclusively evidenced by such execution and
delivery of the Agreement. The Mayor of Lessee and any other
officer of Lessee who shall have power to do so be, and each of
them hereby is, authorized to affix the official seal of Lessee to the
Agreement and attest the same.
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SECTION 3: The proper officers of Lessee be, and each of them hereby is,
authorized and directed to execute and deliver any and all papers,
instruments, opinions, certificates, affidavits and other documents
and to do or cause to be done any and all other acts and things
necessary or proper for carrying out this resolution and the
Agreement.
SECTION 4: Lessee hereby designates the Agreement as a "qualified tax-
exempt obligation" within the meaning of Section 265(b)(3) of the
Internal Revenue Code of 1986, as amended.
The project to which the original expenditure(s) relates can be
generally described as one (AZ-480) Asphalt Zipper, an asphalt
grinding machine. The original expenditure(s) will be made from
Lessee's general operating account. The maximum principal
amount of the obligations expected to be issued for the project is
$90,000.00. This resolution is being entered into on or before, or
not later than 60 days after, the date on which the original
expenditure(s) to be reimbursed will or have been paid. This
resolution is intended to be a declaration of official intent within the
meaning of Treasury Regulations Section 1.150-2.
The undersigned further certifies that the above resolution has not
been repealed or amended and remains in full force and effect
and further certifies that the Equipment Lease/Purchase
Agreement by and between LaSalle Bank National Association, as
lessor, and Lessee, as lessee, is the same as presented at said
meeting of the governing body of Lessee, excepting only such
changes, insertions and omissions as shall have been approved
by the officers who executed the same.
Please see the following page
for formal adoption,certification and signatures
Resolution No. 06-332
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D ADOPTED this 1s' da
PASSED, APPROVED, AN y of November 2006.
AYES: Alexander, Gutierrez, Spagnolo, Williams
NOES: None
ABSENT: Michael
ABSTAINED: None
��QD D—"L – I
William J. Alexa der, Mayor
ATTEST:
De ra J. Ada MC, City Clerk
I, DEBRA J. ADAMS, CITY CLERK of the City of Rancho Cucamonga,
California, do hereby certify that the foregoing Resolution was duly passed, approved and
adopted by the City Council of the City of Rancho Cucamonga, California, at a Regular Meeting
of said City Council held on the 1"day of November 2006.
Executed this 2nd day of November 2006, at Rancho Cucamonga, California.
41. / , '�"' �—
Debra J. Ada MC, City Clerk
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EQUIPMENT LEASE/PURCHASE AGREEMENT
THIS EQUIPMENT LEASE/PURCHASE AGREEMENT ("Agreement") is made
as of DATE by and between LASALLE BANK NATIONAL ASSOCIATION ("Lessor")
and CITY OF RANCHO CUCAMONGA ("Lessee").
In consideration of the mutual covenants, terms and conditions hereinafter
contained, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to
lease from Lessor, the property (hereinafter, together with all replacements and
accessions thereto, referred to as the "Equipment") generally described in the
Preliminary Description of Equipment attached hereto and to be more specifically
described in one or more Certificates of Acceptance, in the form attached, to be
executed and delivered pursuant hereto, subject to the terms and conditions set forth
herein.
This Agreement is made upon the following terms and conditions:
1. TERM.
(a) Commencement of Term. This Agreement shall be effective, and
the parties' obligations hereunder shall arise, as of the date hereof. The term of lease
under this Agreement shall commence on the date on which Lessor deposits into
escrow the purchase price anticipated to be required in connection with the acquisition
of the Equipment (the "Commencement Date"), irrespective of when the Equipment is
accepted by Lessee, and shall terminate on the last business day of Lessee's then
current fiscal budget period (such period being hereinafter referred to as the "Original
Term").
(b) Renewal of Term. Subject to the provisions of Section 10 hereof
and sub-part (e) of this Section, the Original Term will be automatically and successively
renewed at the end of the Original Term under the same terms and conditions for
successive renewal periods ("Renewal Terms"), with the last of such Renewal Terms to
end on the last day of the Full Lease Term, as specified on the Schedule of Payments
executed by Lessee and attached hereto (the "Schedule").
(c) Termination of Term. The term of lease will terminate upon the
earliest to occur of any of the following events:
(1) The expiration of the Original Term or any Renewal Term
and the nonrenewal thereof in accordance with the terms and conditions of this
Agreement;
(2) The purchase of the Equipment by Lessee under the
provisions of Sections 8(c) or 10 of this Agreement;
(3) A default by Lessee and Lessor's election to terminate this
Agreement under Section 13; or
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(4) The payment by Lessee of all rental payments to be paid by
Lessee hereunder with respect to the Equipment.
(d) Continuation of Lease Term by Lessee. Lessee intends, subject to
the provisions of sub-part (e) of this Section, to continue the term of the lease hereunder
through the Original Term and all Renewal Terms for the Full Lease Term and to pay
the rental payments hereunder. Lessee reasonably believes that legally available funds
in an amount sufficient to make all rental payments for the Full Lease Term can be
obtained and further intends to do all things lawfully within its power to obtain and
maintain funds from which the rental payments may be made.
(e) Nonappropriation. In the event sufficient funds are not appropriated
for the payment of all rental payments required to be paid in the next succeeding
Renewal Term, then Lessee may terminate this Agreement at the end of the Original
Term or the then current Renewal Term, as the case may be, and Lessee shall not be
obligated to make payment of the rental payments provided for in this Agreement
beyond the then current term. Lessee agrees to give notice to Lessor of such
termination at least sixty (60) days prior to the end of the then current term or, if
nonappropriation has not occurred by that date, promptly upon the occurrence of
nonappropriation. If this Agreement is terminated under this sub-part, Lessee agrees,
at Lessee's sole cost and expense, peaceably to deliver the Equipment to Lessor at
such location as is specified by Lessor, in the condition required by Section 5(b) hereof,
on or before the effective date of termination.
2. RENTAL PAYMENTS.
(a) Rental Payments to Constitute a Current Expense of Lessee.
Lessor and Lessee understand and intend that 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, funds or monies of Lessee.
(b) Payment of Rental Payments. Lessee shall pay rental payments
exclusively from legally available funds, in lawful money of the United States of
America, to Lessor in the amounts and on the rental payment due dates set forth in the
Schedule without notice. In the event that any rental payment is not received by Lessor
on or before the due date therefor, Lessee agrees to pay a late charge determined on
the basis of accrued interest on the delinquent amount at the rate of one percent (1%)
per month (or, if such rate is in excess of the maximum rate permitted by law, the
maximum rate permitted by law) from the date of delinquency to the date that the rental
payment is received by Lessor.
(c) Interest and Principal Components. As set forth in the Schedule, a
portion of each rental payment is paid as, and represents payment of, interest, and the
balance of each rental payment is paid as, and represents payment of, principal.
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(d) Rental Payments to be Unconditional. The obligation of Lessee to
make rental payments hereunder, and to perform and observe the covenants and
agreements contained in this Agreement, shall be absolute and unconditional in all
events, except as expressly provided in this Agreement. Lessee shall not assert any
right of setoff, counterclaim, or abatement against its obligations hereunder, including
(without limitation) by reason of equipment failure, disputes with the vendor(s) or
manufacturer(s) of the Equipment or Lessor, accident or any unforeseen circumstances.
3. REPRESENTATIONS AND COVENANTS, OF LESSEE. Lessee
represents, covenants and warrants to Lessor as follows:
(a) Lessee is a state or political subdivision thereof within the meaning
of Section 103(c) of the Internal Revenue Code of 1986, as amended, (the "Code") and
will do or cause to be done all things necessary to preserve and keep in full force and
effect its existence as such.
(b) Lessee is authorized under the Constitution and laws of the STATE
to enter into this Agreement and the transactions contemplated hereby and to perform
all of its obligations hereunder.
(c) Lessee's name as indicated in the opening paragraph and on the
signature page of this Agreement is its true, correct, and complete legal name.
(d) As evidenced by an attachment hereto, the execution and delivery
of this Agreement by or on behalf of Lessee has been duly authorized by all necessary
action of the governing body of Lessee, and Lessee has obtained such other approvals
and consents as are necessary to consummate this Agreement. Lessee further
represents, covenants and warrants that all requirements have been met, and
procedures have occurred, necessary to ensure the enforceability of this Agreement
against Lessee, and that Lessee has complied with such public bidding requirements as
may be applicable to this Agreement and the acquisition of the Equipment by Lessee
hereunder.
(e) Lessee shall cause to be executed and attached hereto an
incumbency certificate and an opinion of its counsel in form and substance satisfactory
to Lessor.
(f) Lessee has determined that a present need exists for the
Equipment which need is not temporary or expected to diminish in the near future. The
Equipment is essential to and will be used by Lessee only for the purpose of performing
one or more governmental functions of Lessee consistent with the permissible scope of
Lessee's authority and will not be used in a trade or business of any person or entity.
Lessee shall cause to be executed and attached hereto an Essential Use of Equipment
Letter in form and substance satisfactory to Lessor.
(g) Within one hundred fifty (150) days of the end of each fiscal year of
Lessee during the term hereof, Lessee shall provide Lessor with a copy of its audited
financial statements for such fiscal year. Additionally, Lessee shall provide Lessor with
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budgets, proof of appropriation for the ensuing fiscal year and such other financial
information relating to the ability of Lessee to continue this Agreement as may
reasonably be requested by Lessor.
(h) The Equipment is, and shall remain during the period this
Agreement is in force, personal property and when subject to use by Lessee under this
Agreement will not be or become fixtures.
(i) Lessee acknowledges that Lessor is acting only as a financing
source with respect to the Equipment, which has been selected by Lessee.
(j) Lessee will promptly and duly execute and deliver to Lessor such
further documents, instruments and assurances and take such further action as Lessor
may from time to time reasonably request in order to carry out the intent and purpose of
this Agreement and to establish and protect the rights and remedies created or intended
to be created in favor of Lessor hereunder.
(k) Lessee shall pay the excess (if any) of the actual acquisition price
of the Equipment over the amount initially deposited by Lessor in escrow and interest
earnings thereon.
4. TITLE TO EQUIPMENT; SECURITY INTEREST.
(a) Title to the Equipment. During the term of this Agreement, title to
the Equipment shall vest in Lessee, subject to the rights of Lessor under this
Agreement. In the event of a default as set forth in Section 13 hereof or
nonappropriation as set forth in Section 1(e) hereof, title shall immediately vest in
Lessor.
(b) Security Interest. To secure the prompt payment and performance
as and when due of all of Lessee's obligations under this Agreement, Lessee hereby
grants to Lessor a first priority security interest in the Equipment, all ,replacements,
substitutions, accessions and proceeds (cash and non-cash), including the proceeds of
all insurance policies, thereof. Lessee agrees that with respect to the Equipment Lessor
shall have all of the rights and remedies of a secured party under the Uniform
Commercial Code as in effect in the STATE. Lessee may not dispose of any item of the
Equipment without the prior written consent of Lessor, notwithstanding the fact that
proceeds constitute a part of the Equipment.
As further security therefor, Lessee hereby grants to Lessor a first priority
security interest in the cash and negotiable instruments from time to time comprising the
Escrow Fund (as such term is defined in that certain Escrow Agreement dated as of the
date hereof among the financial institution acting as escrow agent, Lessee and Lessor),
and all proceeds (cash and non-cash) thereof, and agrees that with respect thereto
Lessor shall have all rights and remedies of a secured party under the Uniform
Commercial Code as in effect in the STATE.
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5. USE AND MAINTENANCE.
(a) Use. Lessee shall use the Equipment solely for the purpose of
performing one or more governmental functions of Lessee and in a careful, proper and
lawful manner consistent with the requirements of all applicable insurance policies
relating to the Equipment. Lessee will not change the location of any items of the
Equipment as specified in the applicable Certificate of Acceptance without the prior
written consent of Lessor, which consent shall not be unreasonably withheld. Lessee
shall not attach or incorporate the Equipment to or in any other item of equipment in
such a manner that the Equipment becomes or may be deemed to have become an
accession to or a part of such other item of equipment.
(b) Maintenance. Lessee, at its own expense, will keep and maintain,
or cause to be kept and maintained, the Equipment in as good operating condition as
when delivered to Lessee hereunder, ordinary wear and tear resulting from proper use
thereof alone excepted, and will provide all maintenance and service and make all
repairs reasonably necessary for such purpose. All replacement parts and accessions
shall be free and clear of all liens, encumbrances or rights of others and have a value
and utility at least equal to the parts or accessions replaced. Lessee shall not make any
material alterations to the Equipment without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. All additions to the Equipment which are
essential to its operation, or which cannot be detached without materially interfering with
such operation or adversely affecting the Equipment's value and utility, shall
immediately be deemed incorporated in the Equipment and subject to the terms of this
Agreement as if originally leased hereunder, and subject to the security interest of
Lessor.
Upon reasonable advance notice, Lessor shall have the right to inspect
the Equipment and all maintenance records with respect thereto, if any, at any
reasonable time during normal business hours.
6. FEES; TAXES; OTHER GOVERNMENTAL AND UTILITY CHARGES;
LIENS.
(a) Fees. Lessee shall be liable to reimburse Lessor for, and agrees to
hold Lessor harmless from, all titling, recordation, documentary stamp and other fees
arising at any time prior to or during the Full Lease Term, or upon or relating to the
Equipment or this Agreement.
(b) Taxes, Other Governmental Charges and Utility Charges. The
parties contemplate that the Equipment will be used for a governmental purpose of
Lessee and that the Equipment will be exempt from all taxes presently assessed and
levied with respect to personal property. In the event that the use, possession or
acquisition of the Equipment is found to be subject to taxation in any form (except for
net income taxes of Lessor), Lessee will pay, as the same come due, all taxes and
governmental charges of any kind whatsoever that may at any time be lawfully
assessed or levied during the Full Lease Term against or with respect to the Equipment,
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as well as all utility and other charges incurred in the operation and use of the
Equipment.
(c) Liens. Lessee shall keep the Equipment and the Escrow Fund free
and clear of all liens, levies and encumbrances, except those created under this
Agreement.
7. INSURANCE.
(a) Casualty Insurance. At its own expense, Lessee shall keep the
Equipment insured against loss or damage due to fire and the risks normally included in
extended coverage, malicious mischief and vandalism, for not less than the Full
Insurable Value of the Equipment. As used herein, "Full Insurable Value" means the full
replacement value of the Equipment or the Prepayment Amount applicable to the
immediately preceding rental payment due date as designated on the Schedule,
whichever is greater. All insurance for loss or damage shall provide that losses, if any,
shall be payable to Lessor and Lessee, as their interests may appear,Iand Lessee shall
utilize its best efforts to have all checks relating to any losses delivered promptly to
Lessor. If Lessee insures similar properties against casualty loss by self-insurance, with
Lessor's prior consent Lessee may satisfy its obligations with respect to casualty
insurance hereunder by means of a self-insurance fund reasonably acceptable to
Lessor. The Net Proceeds of the insurance required hereby shall be applied as
provided in Section 8 hereof. As used herein, "Net Proceeds" means the amount
remaining from the gross proceeds of any insurance claim or condemnation award after
deduction of all expenses (including attorneys' fees) incurred in the collection of such
claim or award.
(b) Liability Insurance. Lessee shall also carry public liability
insurance, both personal injury and property damage, covering the Equipment in an
amount as Lessor may from time to time reasonably require on notice to Lessee.
Lessor shall be named as an additional insured with respect to all such liability
insurance. With Lessor's prior consent, Lessee may satisfy its obligations with respect
to liability insurance hereunder by maintaining a funded self-insurance plan.
(c) Worker's Compensation. Lessee shall carry worker's
compensation insurance covering all employees working on, in, near or about the
Equipment, or demonstrate to the satisfaction of Lessor that adequate self-insurance is
provided, and shall require any other person or entity working on, in, near or about the
Equipment to carry such coverage throughout the Full Lease Term.
(d) General Requirements. All insurance required under this Section 7
shall be in form and amount and with companies reasonably satisfactory to Lessor
except as otherwise expressly provided herein. Lessee shall pay the premiums therefor
and deliver to Lessor the policies of insurance or duplicates thereof, or other evidence
satisfactory to Lessor of such insurance coverage, annually throughout the Full Lease
Term. Each insurer shall agree, by endorsement upon the policy or policies issued by it
or by independent instrument furnished to Lessor, that (a) it will give Lessor thirty (30)
days' prior written notice of the effective date of any material alteration or cancellation of
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such policy; and (b) insurance as to the interest of any named additional insured or loss
payee other than Lessee shall not be invalidated by any actions, inactions, breach of
warranty or conditions or negligence of Lessee with respect to such policy or policies.
8. RISK OF LOSS; DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS.
(a) Risk of Loss. Lessee assumes all risk of loss of or damage to the
Equipment from any cause whatsoever, and no such loss of or damage to the
Equipment, defect therein, or unfitness or obsolescence thereof, shall relieve Lessee of
its obligation to make rental payments or perform any other obligations hereunder.
(b) Damage, Destruction and Condemnation. If prior to the termination
of the Full Lease Term (1) the Equipment or any portion thereof is destroyed (in whole
or in part) or is damaged by fire or other casualty; or (2) title to, or the temporary use of,
the Equipment or any part thereof or the estate of Lessee or Lessor in the Equipment or
any part thereof shall be taken under the exercise of the power of eminent domain by
any governmental body or by any person, firm or corporation acting under governmental
authority; Lessee and Lessor will cause the Net Proceeds of any insurance claim or
condemnation award to be applied to Lessee's obligations pursuant to sub-part (c) of
this Section.
(c) Use of Net Proceeds. Provided the Equipment is not deemed to be
a total loss, Lessee shall, at its expense (subject to application of the Net Proceeds),
cause the prompt repair, replacement or restoration of the affected Equipment. In the
event that the Equipment is totally destroyed or damaged and Lessee is unable to make
arrangements satisfactory to Lessor for the prompt replacement thereof, Lessee shall
pay to Lessor, on the rental payment due date next succeeding the date of such loss,
the Prepayment Amount applicable to such rental payment due date plus the rental
payment due on such date and any other amounts then payable by Lessee hereunder.
Upon such payment, the term of the lease and the security interest of Lessor in the
Equipment shall terminate, and Lessee will acquire full and unencumbered title to the
Equipment as provided in Section 10 hereof. If Lessee is not then in default hereunder,
any portion of the Net Proceeds in excess of the amount required to pay in full Lessee's
obligations as set forth in this sub-part (c) shall be for the account of Lessee. Lessee
agrees that if the Net Proceeds are insufficient to pay in full Lessee's obligations as set
forth in this sub-part (c), Lessee shall make such payments to the extent of any
deficiency.
9. DISCLAIMER OF WARRANTIES. LESSOR, NOT BEING A SELLER (AS
SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE), NOR A
SELLER'S AGENT, HEREBY EXPRESSLY DISCLAIMS AND MAKES TO LESSEE NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR
OTHERWISE, INCLUDING, BUT NOT LIMITED TO: THE FITNESS FOR USE,
DESIGN OR CONDITION OF THE EQUIPMENT; THE QUALITY OR CAPACITY OF
THE EQUIPMENT; THE WORKMANSHIP IN THE EQUIPMENT; THAT THE
EQUIPMENT WILL SATISFY THE REQUIREMENTS OF ANY LAW, RULE,
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SPECIFICATION OR CONTRACT PERTAINING THERETO; AND ANY GUARANTY
OR WARRANTY AGAINST PATENT INFRINGEMENT OR LATENT DEFECTS, it being
agreed that all such risks, as between Lessor and Lessee, are to be borne by Lessee.
Lessor is not responsible or liable for any direct, indirect, incidental or consequential
damage to or losses resulting from the installation, operation or use of the Equipment or
any products manufactured thereby. All assignable warranties made by the vendor(s)
or manufacturer(s) to Lessor are hereby assigned to Lessee for and during the Full
Lease Term and Lessee agrees to resolve all such claims directly with the vendor(s) or
manufacturer(s). Provided that Lessee is not then in default hereunder, Lessor shall
cooperate fully with Lessee with respect to the resolution of such claims, in good faith
and by appropriate proceedings at Lessee's expense. Any such claim shall not affect in
any manner the unconditional obligation of Lessee to make rental payments hereunder.
10. PURCHASE OF EQUIPMENT BY LESSEE/PREPAYMENT. Provided
that Lessee is not then in default under this Agreement, this Agreement will terminate,
the security interest of Lessor in the Equipment will be terminated, and Lessee will
acquire title to the Equipment free and clear of all liens and encumbrances created by,
or arising through or under, Lessor:
(a) at the end of the Full Lease Term, upon payment in full of all rental
payments and other amounts payable by Lessee hereunder for the Full Lease Term; or
(b) on any rental payment due date, upon payment by Lessee of the
then applicable Prepayment Amount as set forth on the Schedule plus the rental
payment due on such date and all other amounts then due by Lessee hereunder,
provided Lessee shall have given Lessor not less than thirty (30) days' prior notice of its
intent to make such payment.
11. QUIET POSSESSION. Lessor represents and covenants to Lessee that
Lessor has full authority to enter into this Agreement, and that, conditioned upon Lessee
performing all of the covenants and conditions hereof, as to claims of Lessor or persons
claiming under Lessor, Lessee shall peaceably and quietly hold, possess and use the
Equipment during the term of this Agreement subject to the terms and provisions
hereof.
12. ASSIGNMENT; SUBLEASING; INDEMNIFICATION.
(a) Assignment by Lessor. This Agreement, and the rights of Lessor
hereunder and in and to the Equipment and the Schedule, may be assigned and
reassigned in whole or in part to one or more assignees by Lessor or its assignees at
any time without the necessity of obtaining the consent of Lessee; provided, however,
no such assignment or reassignment shall be effective unless and until Lessee shall
have been given written notice of assignment disclosing the name and address of the
assignee or its agent authorized to receive payments and otherwise service this
Agreement on its behalf. Upon receipt of notice of assignment, Lessee agrees to record
the same in records maintained for such purpose, and further, to make all payments as
designated in the assignment, notwithstanding any claim, defense, setoff or
counterclaim whatsoever (whether arising from a breach of this Agreement or
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otherwise) that Lessee may from time to time have against Lessor or Lessor's
assignees. Lessee agrees to execute all documents, including acknowledgments of
assignment, which may reasonably be requested by Lessor or its assignees to protect
their interests in the Equipment and in this Agreement.
(b) No Sale Assignment or Subleasing by Lessee. This Agreement
and the interest of Lessee in the Equipment may not be sold, assigned, sublet or
encumbered by Lessee without the prior written consent of Lessor.
(c) Release and Indemnification Covenants. To the extent permitted
by the laws and Constitution of the STATE, Lessee hereby assumes and agrees to
indemnify, protect, save and keep harmless Lessor, its agents and employees, from and
against any and all losses, damages, injuries, claims, demands and expenses, including
legal expenses, of whatsoever kind and nature, arising on account of (1) the ordering,
acquisition, delivery, installation or rejection of the Equipment; (2) the possession,
maintenance, use, condition (including without limitation, latent and other defects
whether or not discoverable by Lessor or Lessee, any claim in tort, including actions for
strict liability, and any claim for patent, trademark or copyright infringement) or operation
of any item of the Equipment (by whomsoever used or operated); or (3) the loss,
damage, destruction, removal, return, surrender, sale or other disposition of the
Equipment, or any item thereof. It is understood and agreed, however, that Lessor shall
give Lessee prompt notice of any claim or liability hereby indemnified against and that
Lessee shall be entitled to control the defense thereof, so long as Lessee is not in
default hereunder.
13. EVENTS OF DEFAULT AND REMEDIES.
(a) Events of Default. The following shall be "events of default' under
this Agreement and the terms "event of default' and "default' shall mean, whenever
they are used in this Agreement, any one or more of the following events:
(1) failure by Lessee to pay any rental payment or other
payment required to be paid hereunder within five (5) days of the due date
therefor; or
(2) failure by Lessee to observe and perform any other
covenant, condition or agreement on its part to be observed or performed
hereunder and such failure shall continue unremedied for a period of thirty (30)
days after written notice specifying such failure and requesting that it be
remedied, unless Lessor shall agree in writing to an extension of such time prior
to its expiration; or
(3) any certificate, statement, representation, warranty or audit
contained herein or heretofore or hereafter furnished with respect hereto by or on
behalf of Lessee proving to have been false in any material respect at the time as
of which the facts therein set forth were stated or certified, or having omitted any
substantial contingent or unliquidated liability or claim against Lessee; or
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(4) commencement by Lessee of a case or proceeding under
the Federal bankruptcy laws or filing by Lessee of any petition or answer seeking
relief under any existing or future bankruptcy, insolvency or other similar laws or
an answer admitting or not contesting the material allegations of a petition filed
against Lessee in any such proceeding; or
(5) a petition against Lessee in a proceeding under any existing
or future bankruptcy, insolvency or other similar laws shall be filed and not
withdrawn or dismissed within sixty (60) days thereafter; or
(6) an attachment, levy or execution is levied upon or against
the Equipment, any item thereof, or the Escrow Fund.
(b) Remedies on Default. Whenever any event of default shall have
occurred and be continuing, Lessor shall have the right, at its sole option without any
further demand or notice, to exercise any one or more of the following remedies:
(1) with or without terminating this Agreement, retake
possession of the Equipment or items thereof and sell, lease or sublease items of
the Equipment for the account of Lessee, with the net amount of all proceeds
received by Lessor to be applied to Lessee's obligations hereunder including, but
not limited to, all payments due and to become due during the Full Lease Term,
holding Lessee liable for the excess (if any) of (i) the rental payments payable by
Lessee hereunder to the end of the Original Term or then current Renewal Term
(whichever is applicable) and any other amounts then payable by Lessee
hereunder (including but not limited to attorneys' fees, expenses and costs of
repossession), over (ii) the net purchase price or rent and other amounts paid by
a purchaser, lessee or sublessee of the Equipment pursuant to such sale, lease
or sublease, provided that the excess (if any) of such amounts over the
Prepayment Amount applicable to the last rental payment due date of the
Original Term or Renewal Term (whichever is applicable) and the amounts
referred to in clause (i) shall be paid to Lessee;
(2) require Lessee at Lessee's risk and expense promptly to
return the Equipment to Lessor in the manner and in the condition set forth in
Section 5(b) hereof at such location as is specified by Lessor;
(3) if Lessor is unable to repossess the Equipment for any
reason, the Equipment shall be deemed a total loss and Lessee shall pay to
Lessor the amount due pursuant to Section 8 hereof; and
(4) exercise any other right, remedy or privilege which may be
available to it under applicable laws of the STATE or any other applicable law or
proceed by appropriate court 'action to enforce the terms of this Agreement, to
recover damages for the breach of this Agreement, or to rescind this Agreement
as to the Equipment.
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Resolution No. 06-332
Page 14 of 19
In addition, Lessee will remain liable for all legal fees and other costs and
expenses, including court costs, incurred by Lessor with respect to the enforcement of
any of the remedies listed above or any other remedy available to Lessor.
(c) No Remedy Exclusive. No remedy herein conferred upon or
reserved to Lessor is intended to be exclusive and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this Agreement or
now or hereafter existing at law or in equity. Lessor's remedies hereunder may be
exercised separately with respect to items of the Equipment. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may
be exercised from time to time and as often as may be deemed expedient.
14. TAX COVENANTS.
(a) The parties assume that Lessor can exclude the interest
component of the rental payments from federal gross income. Lessee covenants and
agrees that it will (i) rebate an amount equal to excess earnings on the Escrow Fund to
the federal government if required by, and in accordance with, Section 148(f) of the
Code, and make the determinations and maintain the records required by the
regulations applicable thereto; (ii) use a book entry system to register the owner of this
Agreement so as to meet the applicable requirements of Section 149(a)(3) of the Code;
(iii) timely file an IRS Form 8038-G (or, if the invoice price of the Equipment is less than
$100,000, a Form 8038-GC) with the Internal Revenue Service ("IRS") in accordance
with Section 149(e) of the Code; (iv) not permit the Equipment to be directly or indirectly
used for a private business use within the meaning of Section 141 of the Code
including, without limitation, use by private persons or entities pursuant to contractual
arrangements which do not satisfy the IRS' guidelines for ,permitted management
contracts, as the same may be amended from time to time; (v) ensure that the monies
deposited by Lessor in escrow are not invested in such manner so as to result in this
Agreement being treated as an "arbitrage bond" or "federally guaranteed bond" within
the meaning of Section 148(a) or Section 149(b) of the Code, respectively; (vi) comply
with all provisions and regulations applicable to excluding the interest component of the
rental payments from federal gross income pursuant to Section 103 of the Code; and
(vii) cause to be completed, executed and delivered to Lessor a Tax Compliance
Agreement and No Arbitrage Certificate substantially in the form provided by Lessor.,
(b) . If Lessor either (i) receives notice, in any form, from the Internal
Revenue Service; or (ii) reasonably determines, based on an opinion of independent tax
counsel selected by Lessor and approved by Lessee, which approval Lessee shall not
unreasonably withhold, that Lessor may not exclude the interest component of any
rental payment from federal gross income because Lessee breached a covenant
contained herein, then Lessee shall pay to Lessor, within thirty (30) days after Lessor
notifies Lessee of such determination, the amount which, with respect to rental
payments previously paid and taking into account all penalties, fines, interest and
additions to tax (including all federal, state and local taxes imposed on the interest
component of all rental payments due through the date of such event) that are imposed
on Lessor as a result of the loss of the exclusion, will restore to Lessor the same after-
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Resolution No. 06-332
Page 15 of 19
tax yield on the transaction evidenced by this Agreement (assuming tax at the highest
marginal corporate tax rate) that it would have realized had the exclusion not been lost.
Additionally, Lessee agrees that upon the occurrence of such an event, it shall pay
additional rent to Lessor on each succeeding rental payment due date in such amount
as will maintain such after-tax yield to Lessor.
(c) Lessee has not issued, and reasonably anticipates that it and its
subordinate entities will not issue, tax-exempt obligations (including this Agreement) in
the amount of more than $10,000,000 during the current calendar year; hereby
designates this Agreement as a "qualified tax-exempt obligation" within the meaning of
Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"); and
agrees that it and its subordinate entities will not designate more than $10,000,000 of
their obligations as "qualified tax-exempt obligations" during the current calendar year.
15. LESSOR'S RIGHT TO PERFORM FOR LESSEE. If Lessee fails to
perform or comply with any of its agreements contained herein, Lessor shall have the
right, but shall not be obligated, to effect such performance or compliance, and the
amount of any out of pocket expenses and other reasonable expenses of Lessor
incurred in connection with the performance of or compliance with such agreement,
together with interest thereon at the rate of twelve percent (12%) per annum (or, if such
rate is in excess of the maximum rate permitted by law, the maximum rate permitted by
law), shall be payable by Lessee upon demand.
Within ten (10) days of receipt, Lessee shall execute, endorse and deliver to
Lessor any deed, conveyance, assignment or other instrument in writing as may be
required to vest in Lessor any right, title or power which by the terms hereof are
expressed to be conveyed or conferred upon Lessor, including, without limitation: (a)
Uniform Commercial Code financing statements (including continuation statements),
real property waivers; (b) documents and checks or drafts relating to or received in
payment for any loss or damage under the policies of insurance required by the
provisions of Section 7 hereof to the extent that the same relate to the Equipment; and
(c) upon default or nonappropriation or times thereafter as Lessor in its sole and
absolute discretion may determine, any bill of sale, document, instrument, invoice,
freight bill, bill of lading or similar document relating to the Equipment in order to vest
title in Lessor and transfer possession to Lessor. Further, to the extent permitted by
law, Lessee appoints Lessor as its attorney-in-fact for the limited purpose of, and with
the full authority to, execute and file Uniform Commercial Code financing statements
(including continuation statements) in the name and on behalf of Lessor, and agrees
that photocopies of originally executed Uniform Commercial Code financing statements
(including continuation statements) may be filed in the appropriate recordation offices as
originals. In addition, the Lessee hereby authorizes the Lessor to prepare and file
Uniform Commercial Code financing statements (including continuation statements)
naming Lessee as debtor and Lessor as secured party without the signature of the
Lessee to the extent permitted by law.
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Resolution No. 06-332
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16. MISCELLANEOUS.
(a) Notices. All notices (excluding billings and communications in the
ordinary course of business) hereunder shall be in writing, and shall be sufficiently given
and served upon the other party if delivered (i) personally, (ii) by United States
registered or certified mail, return receipt requested, postage prepaid, (iii) by an
overnight delivery by a service such as Federal Express or Express Mail from which
written confirmation of overnight delivery is available; or (iv) by facsimile with a
confirmation copy by regular United States mail, postage prepaid, addressed to the
other party at its respective address stated below the signature of such party or at such
other address as such party shall from time to time designate in writing to the other
party, and shall be effective from the date of mailing.
(b) Binding Effect. This Agreement shall inure to the benefit of and
shall be binding upon Lessor and Lessee and their respective successors and assigns.
(c) Severability: Survival. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, Lessee hereby waives any
provision of law which renders any provision hereof prohibited or unenforceable in any
respect.
The representations, warranties and covenants of Lessee herein shall be
deemed to be continuing and to survive the closing hereunder. Each execution by
Lessee of a Certificate of Acceptance shall be deemed a reaffirmation and warranty that
there have been no material adverse change in the financial condition of Lessee from
the date of execution hereof. The obligations of Lessee under Sections 1(e), 6, 12(c)
and 14, which accrue during the term of this Agreement, shall survive the termination of
this Agreement.
(d) Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall constitute
but one and the same instrument.
(e) Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
(f) Captions. The captions in this Agreement are for convenience of
reference only and shall not define or limit any of the terms or provisions hereof.
(g) Entire Agreement. This Agreement constitutes the entire
agreement between Lessor and Lessee. No waiver, consent, modification or change of
terms of this Agreement shall bind either party unless in writing signed by both parties,
and then such waiver, consent, modification or change shall be effective only in the
specific instance and for the specific purpose given. There are no understandings,
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Resolution No. 06-332
Page 17 of 19
agreements, representations or warranties, express or implied, not specified herein
regarding this Agreement or the Equipment leased hereunder. Any terms and
conditions of any purchase order or other document (with the exception of supplements)
submitted by Lessee in connection with this Agreement which are in addition to or
inconsistent with the terms and conditions of this Agreement will not be binding on
Lessor and will not apply to this Agreement. Lessee by the signature below of its
authorized representative acknowledges that it has read this Agreement, understands it,
and agrees to be bound by its terms and conditions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above set forth.
ATTEST/WITNESS: LASALLE BANK NATIONAL ASSOCIATION
Lessor
By:
Address: 135 S. LaSalle Street
Suite 545
Chicago, Illinois 60603
Fax No.: (312) 904-8408
ATTEST: CITY OF RANCHO CUCAMONGA
Lessee
By:
Address: 10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Fax No.: (909) 477-2845
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Resolution No. 06-332
Page 18 of 19
PRELIMINARY
DESCRIPTION OF EQUIPMENT
Attached to and made a part of that certain
Equipment Lease/Purchase Agreement dated as of
November 1, 2006
by and between LaSalle Bank National Association, as lessor,
and City of Rancho Cucamonga, as lessee
The items of Equipment to become subject to the Agreement can be generally
described as follows:
ONE (AZ-480) ASPHALT ZIPPER, AN ASPHALT GRINDING MACHINE
LOCATION OF EQUIPMENT:
City of Rancho Cucamonga
City Yard
91539 th Street
Rancho Cucamonga, CA 91730
ANTICIPATED PURCHASE PRICE: $90,000.00
Resolution No. 06-332
Page 19 of 19
City of Rancho Cucamonga, CA
Nominal Annual Rate: 4.830%
Purchase
Lease
# Date Payment Interest Principal Option Price
Commencement 11/1/2006
1 5/1/2007 10,238.17 2,173.50 8,064.67 83,574.04
2 11/1/2007 10,238.17 1,978.74 8,259.43 75,149.42
3 5/1/2008 10,238.17 1,779.27 8,458.90 66,521.34
4 11/1/2008 10,238.17 1,574.99 8,663.18 57,684.90
5 5/1/2009 10,238.17 1,365.77 8,872.40 48,635.05
6 11/1/2009 10,238.17 1,151.51 9,086.66 39,366.66
7 5/1/2010 10,238.17 932.06 9,306.11 29,874.42
8 11/1/2010 10,238.17 707.32 9,530.85 20,152.96
9 5/1/2011 10,238.17 477.15 9,761.02 10,196.72
10 11/1/2011 10,238.17 241.39 9,996.78 0.00
Grand Totals 102,381.70 12,381.70 90,000.00 0.00