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HomeMy WebLinkAboutCC Resolution 10606 (Purchase Aerial Fire Truck)RESOLUTION NO. 10606 A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE WITH OPTION TO PURCHASE ONE AERIAL FIRE TRUCK WITH IBIS SECURITIES LLC AND MUNICIPAL FINANCE CORPORATION, AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the City of San Rafael (the "City") is a city organized and existing under and pursuant to the Constitution and laws of the State of California (the "State"); and WHEREAS, the City desires to provide for financing in the approximate amount of $500,570.00 for the acquisition of a fire truck (the "Property"); and WHEREAS, IBIS Securities LLC and Municipal Finance Corporation (the "Corporation") have proposed a cost-effective lease purchase financing arrangement at a 5.65% interest rate; NOW, THEREFORE, it is resolved by the City Council as follows: SECTION 1. Lease with Option to Purchase. The Mayor and City Manager, or his designee, are hereby authorized to enter into a Lease with Option to Purchase (the "Lease") with the Corporation, subject to approval as to form by the City Attorney. SECTION 2. Attestations. The City Clerk is hereby authorized and directed to attest the signature of the Mayor or City Manager or of such other person or persons as may have been designated by the Mayor or City Manager, and to affix and attest the seal of the City, as may be required or appropriate in connection with the execution and delivery of the Lease. SECTION 3. Other Actions. The Mayor, City Manager and other officers of the City are each hereby authorized and directed, jointly and severally, to take any and all actions and to execute and deliver any and all agreements, documents and certificates which they may deem necessary or advisable in order to carry out, give effect to and comply with the terms of this Resolution and the Lease. Such actions are hereby ratified, confirmed and approved. SECTION 4. Qualified Tax -Exempt Obliaations. The Lease is hereby designated 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"). The City, together with all subordinate entities of the City, do not reasonably expect to issue during the calendar year in which the Lease is issued more than $10,000,000 of obligations which it could designate as "qualified tax- exempt obligations" under Section 265(b) of the Code. SECTION 5. Reimbursement of Prior Expenditures. The City declares its official intent to be reimbursed from the proceeds of the Lease approved hereby for a maximum principal amount of $505,000.00 of expenditures occurring no earlier than sixty days prior to the adoption of this Resolution. All reimbursed expenditures will be capital expenditures as defined in Section 1.150-1(b) of the Federal Income Tax Regulations. SECTION 6. Effect. This Resolution shall take effect immediately upon its passage. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a reaular meeting of the City Council of said City held on Mondav the 20th day of March , 20 00 , by the following vote, to wit: AYES: COUNCILMEMBERS: Cohen, Miller, Phillips and Vice -Mayor Heller NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Mayor Qoro A dP JEARVE M. LEONCINI, City Clerk resolutions\2000\city\fire truck lease reso.doc LEASE WITH OPTION TO PURCHASE #00 -027 -AF This LEASE WITH OPTION TO PURCHASE dated March 20, 2000 ("Lease") is by and between MUNICIPAL FINANCE CORPORATION, ("Corporation") a corporation duly organized and operating under the laws of the State of California as lessor and CITY OF SAN RAFAEL, a municipal corporation duly organized and existing under the laws of the State of California ("Lessee") as lessee. RECITALS: WHEREAS, Lessee deems it essential for Lessee to acquire the property described herein for its own public purposes; and WHEREAS, it is intended that this Lease be treated as a tax-exempt obligation of Lessee for federal income tax purposes; and WHEREAS, Lessee and Corporation agree to mutually cooperate now and hereafter, to the extent possible, in order to sustain the intent of this Lease and the bargain of both parties hereto. WITNESSETH: NOW, THEREFORE in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows: SECTION 1. Lease. Corporation hereby leases to Lessee, and Lessee hereby leases and hires from Corporation all property (the "Property") described in the schedule or schedules (collectively, the "Schedule") executed by the parties concurrently herewith and hereafter and made a part hereof. Hereinafter, reference to Corporation means Corporation and Corporation's assigns for those rights, interests and obligations that may be assigned by Corporation. SECTION 2. Term. The terms and conditions of this Lease shall become effective upon the authorized execution of this Lease by the parties hereto. The rental term of the Property leased hereunder commences and terminates on the dates specified in the Schedule. SECTION 3. Representations and Warranties of Lessee,. Lessee represents and warrants to Corporation that: (a) Lessee is a municipal corporation and political subdivision, duly organized and existing under the Constitution and laws of the State of California with authority to enter into this Lease and to perform all of its obligations hereunder. (b) Lessee's governing body has duly authorized the execution and delivery of this Lease and further represents and warrants that all requirements have been met and procedures followed to ensure its enforceability. (c) The execution, delivery and performance of this Lease do not and will not result in any breach of or constitute a default under any indenture, mortgage, contract, agreement or instrument to which Lessee is a party or by which it or its property is bound. (d) There is no pending or, to the knowledge of Lessee, threatened action or proceeding before any court or administrative agency which will materially adversely affect the ability of Lessee to perform its obligations under this Lease. (e) The Property being leased is essential to Lessee in the performance of its governmental functions and its estimated useful life to Lessee exceeds the term of this Lease. SECTION 4. Representations and Warranties of Corporation. Corporation represents and warrants to Lessee that: (a) Corporation is duly organized, validly existing and in good standing under the laws of the State of California, with full corporate power and authority to lease and own real and personal property. (b) Corporation has full power, authority and legal right to enter into and perform its obligations under this Lease, and the execution, delivery and performance of this Lease have been duly authorized by all necessary corporate actions on the part of Corporation and do not require any further approvals or consents. (c) The execution, delivery and performance of this Lease do not and will not result in any breach of or constitute a default under any indenture, mortgage, contract, agreement or instrument to which Corporation is a party by which it or its property is bound. (d) There is no pending or, to the knowledge of Corporation, threatened action or proceeding before any court or administrative agency which will materially adversely affect the ability of Corporation to perform its obligations under this Lease. SECTION 5. ProAerty Acouisition: DeDosit of Monevs. Corporation hereby appoints Lessee as its purchasing agent to acquire the Property leased hereunder and Lessee hereby accepts said appointment (hereinafter, the "Agency"). The Agency is limited to i) negotiation of terms, conditions and acquisition cost of acquiring the Property from suppliers and contractors (collectively, the "Supplier") selected by Lessee; ii) to the inspection and acceptance of the Property upon its delivery and installation; and iii) to the exercise of any rights or remedies with respect to Property warranties or guarantees. All warranties and guarantees, either express or implied, that inure to Corporation by virtue of the Agency are hereby passed through to Lessee to prosecute at Lessee's sole discretion. The costs associated with the acquisition and installation of the Property including appurtenant work and related expenses are set forth in the Schedule. Corporation and Lessee agree that, in order to ensure 2 that moneys sufficient to pay all costs will be available for this purpose when required, Corporation shall cause the financing amount designated on the Schedule (the "Financing Amount") to be deposited to a custodial account (the "Acquisition Account") and held in the name of Corporation as custodian for the benefit of Lessee. The date said Financing Amount is initially deposited to the Acquisition Account is defined as the Lease Issuance Date. Disbursements may be made either directly to the Supplier or to Lessee as a reimbursement of its prior expenditures for Property costs. Lessee shall deliver to Corporation a disbursement authorization form along with Supplier invoices and required reconciliation documents prior to Corporation making a disbursement to the Supplier or a reimbursement to Lessee. Corporation shall receive a $50 fee per disbursement, which Corporation shall deduct from the Acquisition Account without any further authorization from Lessee. Corporation shall retain at least ten percent (100) of the Financing Amount in the Acquisition Account until Lessee delivers to Corporation a Certificate of Acceptance. Any moneys that remain in the Acquisition Account (including future earnings thereon) after completing the disbursements for Property costs shall apply towards the payment or prepayment (with applicable premium) of the principal component of succeeding Rental Payments. Upon final disbursement from the Acquisition Account that shall occur no later than three years from the Lease Issuance Date, the Acquisition Account shall be closed. SECTION 6. Lease Proceeds. The Financing Amount deposited to the Acquisition Account may be invested in interest bearing instruments pursuant to written direction and authority given by Lessee. Permitted investments are those specified in Government Code Sections 53601 and 53635. Principal and interest earnings from each investment will be deposited directly to the Acquisition Account. The Financing Amount plus earnings thereon shall constitute the Lease Proceeds available for acquiring the Property (the "Lease Proceeds"). Corporation shall be responsible for the safekeeping of deposit certificates and other investment confirmation documents. With the exception of acts of gross negligence or willful misconduct by Corporation, Corporation will not be held responsible for any investment losses for any reason whatsoever and is indemnified and held harmless by Lessee. In the event the Lease Proceeds are not sufficient to pay for the Property due to insufficient investment earnings or an increase in such costs subsequent to the Lease Issuance Date, Lessee shall deposit additional moneys in the Acquisition Account immediately upon request of Corporation or its assignee sufficient to pay the remaining Property costs. Failure by Lessee to deposit the additional moneys will constitute a default under the Lease. SECTION 7. Rental Pavments. LESSEE SHALL PAY CORPORATION RENTAL PAYMENTS (the "Rental Payments") IN THE AMOUNTS AND AT THE TIMES SET FORTH IN THE SCHEDULE, AT THE OFFICE OF CORPORATION OR TO SUCH OTHER PERSON OR AT SUCH OTHER PLACE AS CORPORATION MAY FROM TIME TO TIME DESIGNATE IN WRITING. Should Lessee fail to pay any part of the Rental Payments herein reserved within fifteen (15) days from the due date thereof, Lessee shall upon Corporation's written request, pay interest on such delinquent payment from the date said payment was due until paid at the rate of twelve percent (12%) per annum or the maximum 3 legal rate, whatever is less. Lessee shall pay Rental Payments exclusively from legally available funds, in lawful money of the United States of America to the Corporation. The obligation of Lessee to pay Rental Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues of Lessee. Except as specifically provided in Section 29, the obligation to pay Rental Payments will be absolute and unconditional in all events, and will not be subject to set-off, defense, abatement, reduction, counterclaim, or recoupment for any reason whatsoever. The periodic Rental Payments paid by Lessee shall be conclusive as to its fair value for the possession, use and/or occupancy of'the Property. SECTION 8. Securitv Interest. As security for the payment of all of Lessee's obligations hereunder, Lessee hereby grants Corporation, its successors or assigns, a security interest in the Property, its accessions and attachments thereto and replacement thereof and substitutions therefor and all proceeds of the Acquisition Account and all proceeds and products of any of the foregoing. Lessee agrees to execute such additional documents, including financing statements, which Corporation deems necessary or appropriate to establish 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 laws, ordinances, and regulations in anyway relating to the possession, use, or maintenance of the Property. SECTION 10. Acceptance. Lessee shall acknowledge receipt and inspection of the Property by executing a "Certificate of Acceptance". SECTION 11. Corporation's Inspection. Upon forty-eight (48) hours prior notice, the Corporation shall at any and all times during normal business hours have the right to enter into and upon Lessee's premises where the Property is located for the purpose of inspecting the same or observing its use. Lessee shall give Corporation immediate notice of any attachment or other judicial process affecting the Property. SECTION 12. Property Selection and Orderina_. Lessee has selected or will select the type and quantity of the Property leased hereunder. Lessee shall ensure that all Property is properly invoiced to Corporation. Corporation shall not be liable for, nor shall the validity, enforceability or effectiveness of this Lease be affected by, any delay in or failure of delivery of the Property. Lessee acknowledges that it is solely responsible for determining the suitability of the Property for its intended use. Corporation shall have no duty to inspect the Property. If the Property is not properly installed, does not operate as represented or warranted by the Supplier, or is unsatisfactory for any reason, Lessee shall make any claim on account thereof solely against the Supplier. Lessee hereby assumes the risks, burdens and obligations to the Supplier on account 4 of nonacceptance of the Property and/or cancellation of this Lease and upon the occurrence of any such event, Corporation will assign to Lessee, without recourse or warranty, its rights and title to the Property and any documents related thereto. SECTION 13. Disclaimer of Warrantv. CORPORATION NOT BEING THE MANUFACTURER OR SUPPLIER OF THE PROPERTY NOR A DEALER IN SIMILAR PROPERTY, HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION, WARRANTY, OR COVENANT, EXPRESS OR IMPLIED, WITH RESPECT TO THE DESIGN, DURABILITY, FITNESS FOR USE, SUITABILITY, OR MERCHANTABILITY OF THE PROPERTY IN ANY RESPECT, AND AS BETWEEN CORPORATION AND LESSEE, ALL PROPERTY SHALL BE ACCEPTED AND LEASED BY LESSEE "WHERE IS," "AS IS," AND "WITH ALL FAULTS," AND CORPORATION SHALL NOT BE RESPONSIBLE FOR ANY PATENT OR LATENT DEFECTS THEREIN. LESSEE AGREES TO SETTLE DIRECTLY SUCH CLAIMS WITH THE SUPPLIER AND WILL NOT ASSERT ANY SUCH CLAIMS AGAINST CORPORATION. SECTION 14. Alterations and Attachments. All additions and improvements that are made to the Property shall belong to and become the property of the Corporation except that separately identifiable attachments added to the Property by Lessee may remain the property of Lessee as long as (i) the attachment is paid for in full by Lessee and (ii) Lessee agrees to remove the attachment and restore the Property to substantially as good condition as when received, normal wear and tear excepted, if and when the Property may be returned to Corporation. SECTION 15. Relocation. Lessee shall provide Corporation prior written notice of its intent to relocate the Property. Lessee assumes all risks of loss to the Property attendant to its movement and relocation. The Property location shall be under Lessee's full control for its own governmental purpose. SECTION 16. Maintenance and Repairs. Lessee, at its own cost and expense, shall furnish necessary labor and materials to maintain the Property in good repair, condition, and working order. Lessee's obligations to maintain the Property does not relieve the Supplier of its responsibility to fully perform with respect to all applicable Property warranties and guarantees. SECTION 17. Risk of Loss: Damaae: Destruction. With the exception of acts resulting from intentional misconduct or gross negligence by Corporation, its agents and representatives, Lessee hereby assumes and shall bear the entire risk of loss and damage to the Property from any and every cause whatsoever. No loss or damage to the Property or any part thereof shall impair any obligation of Lessee under this Leas, which shall continue in full force and effect. Lessee waives the benefit of Civil Code Sections 1932 (2) and 1933 (4) and any and all other rights to terminate this Lease by virtue of any damage or destruction to the Property. SECTION 18. Phvsical Damage/Public Liabilitv Insurance. Lessee shall keep the Property insured against risk of loss or damage from any "special form" peril for not less than the applicable purchase option value in the Schedule, and Lessee shall carry public liability and k property damage insurance covering the Property. All said insurance shall be in form and amount and with reputable companies and shall name Corporation as an additional insured and loss payee. Lessee shall pay the premiums therefore and deliver certification of said policies to Corporation. Each insurer shall agree, by endorsement upon the policy or policies issued by it or by independent instrument furnished to Corporation, that it will give Corporation thirty (30) days' written notice before the policy or policies shall be altered or canceled. The proceeds of such insurance, at the option of Lessee, shall be applied: (a) toward the replacement, restoration, or repair of the Property, or (b) toward payment of the total remaining obligations of Lessee hereunder; provided, however, that Lessee shall be responsible for the amount by which such insurance proceeds are insufficient to satisfy the cost of option (a) or option (b) above, as applicable. Should Lessee replace, restore, or repair the Property as set out in option (a) above, this Lease shall continue in full force and effect. Lessee may self -insure up to specified limits as evidenced by a certificate of self insurance to be attached hereto in form and amount acceptable to Corporation. Any self-insurance program in which Lessee is a participant shall comply with the provisions under this Lease respecting cancellation and modification and payment of losses to the Corporation as its respective interests may appear. Such self-insurance shall be maintained on a basis which is actuarially sound as established by Lessee's risk manager or an independent insurance consultant which determination shall be made annually. Any deficiency shall be corrected within sixty (60) days of Lessee becoming aware of such deficiency. SECTION 19. Liens and Taxes. Lessee shall keep the Property free and clear of all levies, liens, and encumbrances and shall promptly pay all fees, assessments, charges, and taxes (municipal, state and federal) which may now or_hereafter be imposed upon the ownership, leasing, renting, sale, possession, or use of the Property, excluding, however, all taxes on or measured by Corporation's income. SECTION 20. Indemnitv. Subject to California law concerning contribution and enforceability of indemnifications, Lessee shall indemnify Corporation against and hold Corporation harmless from any and all claims, actions, suits, proceedings, costs, expenses, damages, and liabilities, including attorneys' fees, arising out of, connected with or resulting from the selection, possession, use, operation, or return of the Property excepting that Lessee shall not be required to indemnify Corporation in the event that such liability or damages are caused by the gross negligence or intentional misconduct of Corporation, its agents or representatives. SECTION 21. Events of Default. The term "Event of Default", as used in this Lease, means the occurrence of any one or more of the following events: (a) Lessee fails to make any Rental Payment (or any other payment) within fifteen (15) days after the due date thereof or Lessee fails to perform or observe any other covenant, condition or agreement to be performed or observed by it hereunder and such failure to either make the payment or perform the covenant, condition or agreement is not cured within ten (10) days after written notice thereof by Corporation; (b) Corporation discovers that any statement, representation or warranty made by Lessee in this Lease, the Schedule or in any document ever delivered by Lessee pursuant hereto or in connection herewith is false, misleading or erroneous in any material respect; (c) Lessee becomes insolvent, is unable to pay its debts as they become due, makes an assignment for the benefit of creditors, applies or consents to the appointment of a receiver, trustee, conservator or liquidator of Lessee or of all or a substantial part of its assets, or a petition for relief is filed by Lessee under federal bankruptcy, insolvency or similar laws. SECTION 22. Remedies. Upon Lessee's failure to cure an Event of Default within ten (10) days after Corporation's written notice thereof, Lessee's rights under this Lease shall terminate and the Corporation will become entitled to retain all Rental Payments previously paid and to recover all past due payments together with interest thereon to the end of Lessee's current fiscal year. The Corporation may pursue all of its available remedies at law and in equity including, but not limited to, the repossession and sale of the Property. No right or remedy conferred upon Corporation is exclusive of any other right or remedy, but each shall be cumulative of every other right or remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise, and may be enforced concurrently therewith or from time to time; provided, however, that notwithstanding any provisions to the contrary herein, Corporation shall not under any circumstances have the right to accelerate the Rental Payments that fall due in future rental periods or otherwise declare any Rental Payments not then in default to be immediately due and payable. SECTION 23. Non -Waiver. No covenant or condition to be performed by Lessee under this Lease can be waived except by the written consent of Corporation. Forbearance or indulgence by Corporation in any regard whatsoever shall not constitute a waiver of the covenant or condition in question. Until performance by Lessee of said covenant or condition is complete, Corporation shall be entitled to invoke any remedy available to Corporation under this Lease or by law or in equity despite said forbearance or indulgence. SECTION 24. Assignment. Without the prior written consent of Corporation, Lessee shall not (a) assign, transfer, pledge, or hypothecate this Lease, the Property, or any part thereof, or any interest therein, or (b) sublet or lend the Property or any part thereof, or permit the Property or any part thereof to be used in a material way by anyone other than Lessee or Lessee's employees. Consent to any of the foregoing prohibited acts applies only in the given instance and is not a consent to any subsequent like act by Lessee or any other person. Corporation shall not assign its obligations under this Lease with the exception of its obligation to issue default notices and its obligations pursuant to Section 28. Corporation may assign its right, title and interest in this Lease, the Rental Payments and other amounts due hereunder and the Property in whole or in part to one or more assignees or subassignees at any time, without the consent of Lessee. Any such assignment by Corporation or its assigns shally comply with the requirements of Sections 5950-5955 of the California 7 Government Code. No such assignment shall be effective as against Lessee unless and until Corporation shall have filed with Lessee written notice thereof. Lessee shall pay all Rental Payments hereunder pursuant tb the direction of Corporation or the assignee named in the most recent assignment or notice of assignment filed with Lessee. During this Lease term, Lessee shall keep a complete and accurate record of all such notices of assignment. Subject always to the foregoing, this Lease inures to the benefit of, and is binding upon, the heirs, legatees, personal representatives, successors, and assigns of the parties hereto. SECTION 25. Ownership. The Property is and shall at all times be and remain the sole and exclusive property of Corporation, and Lessee shall have no right, title, or interest therein or thereto except as expressly set forth in Sections 27 and 28. Lessee shall take all actions necessary to insure that legal title to the Property being acquired by Lessee hereunder, whether by Lessee or by a third party acting on behalf of Lessee, is vested in Corporation. SECTION 26. Personal Property. The Property is and shall at all times be and remain personal property notwithstanding that the Property or any part thereof may now be or hereafter become in any manner affixed or attached to or imbedded in, or permanently resting upon, real property or any building thereon, or attached in any manner to what is permanent by means of cement, plaster, nails, bolts, screws or otherwise. SECTION 27. Purchase Option. If Lessee is not in default of any term, condition or payment specified hereunder, Lessee may exercise options to prepay this Lease and purchase not less than all of the Property in "as -is" and "where -is" condition on the specified dates and for the specified amounts set forth in the Schedule annexed hereto. Each purchase option payment specified for a particular date is exclusive of the Rental Payment due on the same date. SECTION 28. Release of Liens. Upon Lessee either making all of the Rental Payments scheduled herein or making a purchase option payment, Corporation, its successors or assigns shall cause i) legal title to the Property to be transferred to Lessee and ii) the release of all liens, encumbrances or security interests on the Property created pursuant to Corporation's rights under this Lease. SECTION 29. Earlv Termination. Upon written notice to the Corporation given not later than thirty (30) days prior to the end of any fiscal year of Lessee, Lessee may terminate this Lease in its entirety as of .the end of that fiscal year based solely upon Lessee's failure to appropriate funds for the subsequent years' Rental Payments after exercising reasonable efforts to appropriate funds from any and all of its legally available sources. Upon termination of this Lease due to Lessee's failure to budget and appropriate funds, Lessee, at its expense, shall redeliver the Property to the Corporation at a location within the State of California designated by Corporation in substantially as good a condition as when received, normal wear and tear excepted. If Lessee terminates this Lease, Corporation may retain 8 all amounts previously paid by Lessee and may collect and retain any amounts due and unpaid to the end of Lessee's then current fiscal year. Corporation shall remit to Lessee any proceeds from the subsequent sale of the Property in excess of the then applicable purchase option price. SECTION 30. Nonsubstitution. To the extent permitted by State law, if this Lease is terminated by Lessee with respect to the Property in accordance with Section 29, Lessee agrees not to purchase, lease or rent personal property to perform the same function or functions taking the place of, those performed by such Property and agrees not to permit such functions to be performed by its own employees or by any agency or entity affiliated with or hired by Lessee for a period of three hundred sixty-five (365) days succeeding such termination; provided, however, that these restrictions shall not be applicable in the event the Property shall be sold by Corporation and the amount received from such sale, less all costs of such sale, is sufficient to pay the then applicable purchase option price relating thereto as set forth on the Schedule; or if or to the extent that the application of these restrictions is unlawful and would affect the validity of this Lease. SECTION 31. Reports/Tax Covenants. Lessee shall cooperate with Corporation to comply with any and all reporting requirements that may be mandated by agencies of the United States of America or the State of California, including the timely filing of IRS Form #8038-G or #8038 - GC. Lessee covenants to Corporation that: (a) Throughout the term of the Lease, the Property will be used for performing one or more governmental functions consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any person or entity other than Lessee except for uses by community services organizations as prescribed in the California Government Code. (b) Lessee will not take any action or omit to take any action which action or omission, if reasonably expected on the date of this Lease, would have caused this Lease to be an "arbitrage bond" within the meaning of Section 148 of the Internal Revenue Code of 1986 (as amended) (the "Code"). (c) The Rental Payments are not directly guaranteed or indirectly guaranteed in whole or in part by the United States or any agency or instrumentality of the United States so as to cause the Rental Payments to be "federally guaranteed" within the meaning of Section 149(b) of the Code. (d) The Lease Proceeds used for reimbursement of prior expenditures will be made pursuant to and in compliance with Income Tax Regulations Section 1.150-2. (e) Lessee hereby designates this Lease for purposes of paragraph (3) of Section 265(b) of the Code and represents that not more than $10,000,000 aggregate principal amount of obligations the interest on which is excludable (under Section 103(a) of the Code) from gross income for federal income tax purposes (excluding (i) private activity VA bonds, as defined in Section 141 of the Code, except qualified 501(c)(3) bonds as defined in Section 145 of the Code and (ii) current refunding obligations to the extent the amount of the refunding obligation does not exceed the outstanding amount of the refunded obligation), including this Lease, has been or will be issued by Lessee, including all subordinate entities of Lessee, during calendar year 2000. SECTION 32. Extraordinary Costs. In the case of litigation, the prevailing party shall be entitled to recover from the opposing party all costs and expenses, including attorneys' fees (which may be the allocable cost of in-house counsel), incurred by the prevailing party in exercising any of its rights or remedies hereunder or enforcing any of the terms, conditions or provisions hereof. SECTION 33. Severabilitv. If any provision of this Lease shall be held invalid or unenforceable by a court of competent jurisdiction, such holdings shall not invalidate or render unenforceable any other provision of this Lease, unless elimination of such provision materially alters the rights and obligations embodied in this Lease. SECTION 34. Entire Aqreement. This Lease, the Schedule, and any agreements that specifically refer to this Lease that are duly executed by authorized agents of the parties hereto constitute the entire agreement between Corporation and Lessee, and it shall not be further amended, altered, or changed except by a written agreement that is properly authorized and executed by the parties hereto. SECTION 35. Notices. Service of all notices under this Lease shall be sufficient if given personally or mailed to the party involved at its respective address hereinafter set forth or at such address as such party may provide in writing from time to time. Any such notice mailed to such address shall be effective when deposited in the United States mail, duly addressed and with postage prepaid. SECTION 36. Titles. The titles to the Sections of this Lease are solely for the convenience of the parties and are not an aid in the interpretation thereof. SECTION 37. Further Assurances and Corrective Instruments,. Corporation and Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to'be executed, acknowledged and delivered, such supplements hereto and such further instruments as may be reasonably required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Lease. SECTION 38. Execution in Counterparts. This Lease may be executed in several counterparts, each of which shall be original and all of which shall constitute but one and the same instrument. SECTION 39. Time. Time is of the essence in this Lease and each and all of its provisions. 10 SECTION 40. Lease Interpretation. This Lease and the rights of the parties hereunder shall be determined in accordance with the laws of the State of California. IN WITNESS WHEREOF, the parties hereto have caused their authorized agents to execute this Lease on the dates specified below. MUNICIPAL FINANCE CORPORATION 23945 Calabasas Road, Suite 103 Calabasas, CA 91302 (1 ssor) By •`�jJ,, Titlj MANAGER OF AUMIIVIb I ht' Date / CITY OF SAN RAFAEL 1400 Fifth Street San Rafael, CA 94901 s By ROD GOULD Title City Manaqer Date March 20, 2000 11 —EASE SCHEDULE 400 -027 -AF This Schedule is issued pursuant to the Lease with Option to Purchase dated as of March 20, 2000 by and between the undersigned. A. Property Location: Station 7 3530 Civic Center Dr. San Rafael, CA 94903 B. Property Description: Fire Truck C. Name and Address of Supplier(s): SMEAL FIRE APPARATUS CO. P. 0. Box 8 Highway 91 West Snyder NE 68664 D. Financing Amount Summary: Estimated Property Cost (including related expenses): $500,750.00 Financing Amount: $500,750.00 E. Lease Term. The full term of this Schedule is thirty-six (36) months commencing on the Lease Issuance Date and concluding thirty-six (36) months thereafter. Upon closing, the Lease Issuance Date shall be inserted in the following blank ( April 10, 2000 ) . F. Rental Payments. Rental Payments for this Schedule are due in three (3) consecutive annual payments in accordance with the Payment Schedule herein. Each payment includes interest at the rate of 5.65% per annum on the unpaid principal balance. The Financing Amount in Section D represents the original principal balance. G. Lease Acquisition Cost. The cost for Lessee to acquire the Property over the full specified term of this Schedule is $ 558,370.89 H. Payment Schedule: Payable annually in arrears #00 -027 -AF PMT Due Date (1) Rental (2) Purchase To To # Payment Option Principal Interest 1 04/10/01 $186,123.63 351, 491.72 $157,831.25 28,292.38 2 04/10/02 186, 123 .63 180, 574.28 166, 748 .72 19,374.91 3 04/10/03 186, 123 .63 0.00 176, 170.03 9,953.60 TOTALS: $558,_73 0.89 $500,750.00 $57.620.89 (1) Refer to the paragraph in the Lease entitled "Release of Liens" (2) Refer to the paragraph in the Lease entitled "Purchase Option and "Release of Liens." Purchase options are in addition to the rental payment due on the same day. Approved and agreed to: MUNICIPAL FINANCE CORPORATION CITY OF SAN RAFAEL (les or) ZD By: 10D� By: ADMINISTRATION qGOULD Title: Title: Citv Manaaer Date: Date: Date: March 20, 2000 NOTICE OF ASSIGNMENT #00 -027 -AF MUNICIPAL FINANCE CORPORATION (the "Assignor") hereby gives notice to CITY OF SAN RAFAEL (the "Lessee") of an assignment by Assignor over to WESTAMERICA BANK, (the "Assignee") in which (i) Assignor assigns to Assignee all of its rights, title and interest in and to that certain Lease with Option to Purchase #00 -027 -AF dated as of March 20, 2000 (the "Lease") as it relates specifically to Lease Schedule #00 -027 -AF annexed thereto; (ii) Assignor assigns to Assignee all of its rights in and to the Rental Payments and other amounts due or coming due from Lease Schedule #00 -027 -AF commencing with the first scheduled Rental Payment; and (iii) Assignor assigns to Assignee all other payments or amounts resulting from the Lease as it relates specifically to Lease Schedule #00 -027 -AF. Lessee is instructed to pay and remit Rental Payments to WESTAMERICA BANK, Credit Admin. Dept. (A -2D), P. 0. Box 1200, Suisun City, CA 94585-1200. MUNICIPAL FINANCE CORPORATION ( signor) By / MANAGER OF Title _ MAI s ATION Date ACKNOWLEDGMENT OF ASSIGNMENT CITY OF SAN RAFAEL hereby acknowledges receipt of the Notice of Assignment #00 -027 -AF by MUNICIPAL FINANCE CORPORATION assigning over to WESTAMERICA BANK all right, title and interest in and to that certain Lease with Option to Purchase #00 -027 -AF dated as of March 20, 2000 as it relates to Lease Schedule #00 -027 -AF, Rental Payments coming due under Lease Schedule #00 -027 -AF commencing with the first scheduled Rental Payment and all other amounts payable under the Lease as it relates to Lease Schedule #00 -027 -AF. CITY OF SAN RAFAEL (Lessee) By iOD GOULD Title City Manager Date March 20, 2000 ARBITRAGE AND TAX CERTIFICATE #00 -027 -AF The undersigned hereby certifies that he/she is a duly appointed authorized agent, of the CITY OF SAN RAFAEL (the "Lessee"), for the purpose of executing and delivering, on behalf of the Lessee, the Lease with Option to Purchase dated March 20, 2000 (the "Lease"), by and between MUNICIPAL FINANCE CORPORATION (the "Corporation") as lessor and the Lessee as lessee. This Certificate is being issued pursuant to Section 148 of the Internal Revenue Code of 1986 (the "Code"), and Treasury Regulations, Sections 1.148-1 through 1.148-11 promulgated thereunder (the "Regulations"). The following facts, estimates and circumstances are either in existence on the date of this Arbitrage and Tax Certificate or are reasonably expected to occur hereafter. 1. Under the Lease, the Corporation is required to acquire the property described in the schedule attached to the Lease (the "Property"), and to lease and sell the Property to the Lessee; and the Lessee is required to lease and purchase the Property from Corporation by making Rental Payments with respect thereto, comprising principal and interest, on the dates and in the amounts set forth in the Lease. 2. On the date of Lease issuance, the Lessee will receive not less than $500,750.00 from the Corporation. Such moneys will be deposited with the Lessee and used, together with interest earnings thereon, to pay the Property costs. 3. The Lessee on behalf of the Corporation, will proceed to acquire and install the Property with due diligence and, based upon the provisions of the purchase contracts, delivery and acceptance of the Property is scheduled to occur on or before six months after the date hereof but in no case later than three years from the date hereof, and it is expected that all Lease proceeds will be spent by such date. 4. The original proceeds of the Lease plus the interest earned thereon, will not exceed by more than 5% the amount necessary for the governmental purpose for which the Lease is issued. 5. The yield of the Lease, without taking into account costs of issuance thereon, and on the basis of the initial reoffering price of the Lease to the Assignee, is not less than 5.30000%. 6. No sinking fund will be maintained for the payment of the Rental Payments due under the Lease. 7. The term of the Lease is not longer than is reasonably necessary for the governmental purpose of the Lease, and the weighted average maturity of the Lease does not exceed 120 percent of the average reasonably expected economic life of the leased Property. 8. The Property has not been, and is not expected during the term of the Lease, to be sold or otherwise disposed of by the Lessee. 9. The Lessee and its subordinate entities (as defined in the Code) will not, in the aggregate, issue more than $5,000,000 of tax- exempt obligations during calendar year 2000 and, thus, qualifies for the arbitrage rebate exemption provided for in Section 148(f)(4)(c) of the Code. 10. To the best of the knowledge and belief of the undersigned, the expectations of the Lessee, as set forth above, are reasonable, and there are no present facts, estimates and circumstances which would change the foregoing expectations. IN WITNESS WHEREOF, the party agent to execute this Arbitrage specified below. CITY OF SAN RAFAEL (lessee) By or -ROD GOULD Title Citv Manaaer hereto has caused its authorized and Tax Certificate on the date 2 DESIGNATION OF QUALIFICATION #00 -027 -AF This designation by the CITY OF SAN RAFAEL (the "Lessee") as lessee is issued pursuant to that certain Lease with Option to Purchase agreement dated March 20, 2000 (the "Lease") for the financing of governmental use property. The Lessee hereby designates the Lease as a qualified tax-exempt obligation pursuant to Section 265(b) of the Internal Revenue Code of 1986 and the Lessee agrees that it will not designate more than $10,000,000 of qualified tax-exempt obligations during calendar year 2000 pursuant to Section 265 (b) (3) (D) of the Code. Further, the Lessee reasonably expects that the aggregate principal amount of all tax-exempt obligations issued by the Lessee and its subordinate entities will not exceed $10,000,000 for all of calendar year 2000. CITY OF SAN RAFAEL (lessee) By ROD GOULD Title Citv Manaaer Date March 20, 2000 This designation was submitted to and approved by the Lessee's governing body at a meeting duly held on March 20, 2000. CERTIFICATE OF LESSEE The undersigned, duly authorized representative of City of San Rafael ("Lessee") as lessee under that Lease with Option to Purchase #00 -027 -AF dated as of March 20, 2000 ("Lease") with Municipal Finance Corporation as lessor, hereby certifies as follows: 1. I hold the position noted below and have been duly authorized to execute and deliver, on behalf of Lessee, the Lease and related documents pursuant to a resolution adopted by Lessee's governing body, an original or certified copy of which is attached hereto. ROD GOULD Name of Authorized Representative (Print or Type) City Manager Title (Print or Type) 2. Lessee has complied with all agreements and covenants and satisfied all conditions contemplated by the Lease on its part to be performed or satisfied on or before the date hereof. 3. The representations, warranties and covenants of Lessee contained in the Lease are true and correct in all material respects as of the date hereof, as if made on this date. 4. No litigation is pending or, to the best of my knowledge, threatened (either in state or federal courts) (a) tb restrain or enjoin the issuance and delivery of the Lease or the collection of revenues to be used to meet Lessee's obligatioAs under the Lease; (b) in any way contesting or affecting the authority for the execution or delivery of the Lease, or the validity of the Lease; (c) in any way contesting the existence or powers of Lessee, as such existence or powers in any way relate to the issuance of the Lease or Lessee's obligations under the Lease, or (d) could materially adversely affect the financial position of Lessee. S. The Property being leased pursuant to the Lease is essential to the function of Lessee and is immediately needed by Lessee. Such need is neither temporary nor expected to diminish during the Lease term. The Property is expected to be used by Lessee for a period in excess of the Lease term. 6. The scheduled Rental Payments for the Property do not exceed the fair rental value of the Property. The meaning of the capitalized those provided in the Lease. By ROD GOULD, City Manager Date: March 20, 2000 terms in this Certificate are the same as INCUMBENCY CERTIFICATE CITY OF SAN RAFAEL I do hereby certify that I am the duly appointed and acting City Clerk of the City of San Rafael, a political subdivision validly existing under the Constitution and laws of the State of California (the "City"), and that, as of the date hereof, the individual named below is the duly appointed officer of the City 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 the City to enter into that certain Lease with Option to purchase #00 -027 - AF dated March 20, 2000, between the City and Municipal Finance Corporation, and all documents relating thereto. Name Title Signature ROD GOULD CITY MANAGER IN WITNESS WHEREOF, I have duly executed this certificate and of f ixed the seal of the City hereto this 4th day of APRIL , 2000. Ci clerk (SEAL)