HomeMy WebLinkAboutCC Resolution 11493 (Purchase 2 Fire Pumper Trucks)RESOLUTION NO. 11493
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL AUTHORIZING THE EXECUTION AND DELIVERY OF A
LEASE WITH OPTION TO PURCHASE TWO FIRE PUMPER
TRUCKS WITH LASALLE NATIONAL LEASING 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
$668,134.00 for the acquisition of two fire pumper trucks (the "Property"); and
WHEREAS, the LaSalle National Leasing Corporation has proposed a cost-effective
lease purchase financing arrangement at a 2.92% interest rate;
NOW, THEREFORE, it is resolved by the City Council as follows:
SECTION 1. Lease with Option to Purchase. The Mayor or 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 Obligations. 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. Lessee reasonably expects to
reimburse the following original expenditures(s) with the proceeds of a tax-exempt financing:
AMOUNT DESCRIPTION
$668,134 Two Fire pumper trucks
PAYEE
City of San Rafael
The original expenditures were made from the Lessee's Vehicle Replacement Fund. The
project to which the original expenditure (s) relates can generally be described as purchase of
two fire pumper engines. The maximum principal amount of the obligations expected to be
issued for the project is $668,134. This resolution is being entered into as a result of an
intention to finance this equipment per the January 21, 2003 agenda report item No. 6 as
presented to the City Council.
SECTION 6. Effect. This Resolution shall take effect immediately upon its passage.
1, 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 reciular meeting of the City
Council of said City held on Mondav, the 2nd day of February , 2004 , by the following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
JEA NE M. LEONC NI, City Clerk
Finance ale/Council Material/Resolutions\2004\city\fire truck lease reso.doc
EQUIPMENT LEASE/PURCHASE AGREEMENT
THIS EQUIPMENT LEASE/PURCHASE AGREEMENT ("Agreement") is made
as of March 10, 2004 by and between LASALLE BANK NATIONAL ASSOCIATION
("Lessor") and CITY OF SAN RAFAEL ("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 the Certificate 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:
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 the Equipment is accepted
by Lessee, as indicated on the Certificate of Acceptance (the "Commencement Date"),
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
(4) The payment by Lessee of all rental payments to be paid by
Lessee hereunder with respect to the Equipment.
f i''
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(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) Nonaooropriation. 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 Pavments to Constitute a Current Exoense 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) Pavment of Rental Pavments. 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.
(d) Rental Pavments 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
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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
of California 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
budgets, proof of appropriation for the ensuing fiscal year and such other financial
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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.
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) Securitv 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 of California. 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.
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
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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 Utilitv Charaes. 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, as well as all utility and other charges incurred in the operation and use of
the Equipment.
(c) Liens. Lessee shall keep the Equipment free and clear of all liens,
levies and encumbrances, except those created under this Agreement.
7. INSURANCE.
(a) Casualtv 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,
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shall be payable to Lessor and Lessee, as their interests may appear, and 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) Liabilitv 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
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) Damaae. 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
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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,
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,
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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
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. Assianment 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 of California, 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
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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
(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 or any item thereof.
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(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 of California 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.
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 Remedv 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.
GW W:BETH96:113137.1:3/1/042:33 PM 10
(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) 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; (ii) 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; (iii) 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; (iv) 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 (v) 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-
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
GWW:BETH96:113137.1:3/1/042:33 PM 11
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.
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) Severabilitv; 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
GWW:BETH96:113137.1:3/1/042:33 PM 12
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,
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.
GWW:BETH96:113137.1:3/1/042:33 PM 13
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
Address: 135 S. LaSalle Street
Suite 545
Chicago, Illinois 60603
Fax No.: (312) 904-8408
ATTEST: CITY OF SAN RAFAEL
LesseeK�
\
I�
Ken Nordhoff
J anne M. Leoncini, City Clerk
Assistant City Manager
Address: 1400 Fifth Avenue
San Rafael, California 94915
Fax No.: (415) 485-3100
14
INCUMBENCY CERTIFICATE
I do hereby certify that I am the duly elected or appointed and acting
Secretary/Clerk of City of San Rafael, a body corporate and politic duly organized and
existing under the laws of the State of California, that I have custody of the records of
such entity, and that, as of the date hereof, the individuals named below are the duly
elected or appointed officers of such entity holding the offices set forth opposite their
respective names. I further certify that (i) the signatures set opposite their respective
names and titles are their true and authentic signatures, and (ii) such officers have the
authority on behalf of such entity to enter into that certain Equipment Lease/Purchase
Agreement dated as of March 10, 2004 (the "Agreement") between such entity and
LaSalle Bank National Association.
NAME TITLE UR
Rod Gould City Manager P
Ken Nordhott Assist. City Manager
Dennis Shives Assist. Dir. Mqmt. Serv..
I hereby further certify that the individual named below holds the office set forth
opposite his name and is duly authorized to execute Certificates of Acceptance,
Requisition Requests, and other documents relating to the Agreement.
NAME TITLE S I RE I'
Rod Gould City Manager��-
Ken Nordhoff Assist. City Manager
Dennis Shives Assist. Di -r. Mgmt. Serv. uyl,�
IN WITNESS WHEREOF, I have duly executed this Certificate and affixed the
seal of City of San Rafael hereto thislothday of March, 2004.
[SEAL] v?s-w•.�
(Secretary/Clerk)
Jeanne M. Leoncini, City Clerk
(other than the person signing the documents)
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
WILLIAM C GALLA
FIRST OUI— �SIDENT
Address: 135 S. LaSalle Street
Suite 545
Chicago, Illinois 60603
Fax No.: (312) 904-8408
ATTEST: CITY OF SAN RAFAEL
Lessee k�� N)
4
By: Ken rdhof f
a�M. Leoncini, City Clerk Assistant Cit Manager
Ass y
Address: 1400 Fifth Avenue
San Rafael, California 94915
Fax No.: (415) 485-3100
14
RIDER NO. 1 DUPLICATE
Attached to and made a part of that certain Equipment Lease/Purchase
Agreement ("Agreement") dated as of March 10, 2004, by and between LaSalle Bank
National Association, as lessor, and City of San Rafael, as lessee.
1. Lessee represents and warrants that it has general taxing powers and that
it reasonably anticipates that it and its subordinate entities will not issue, tax-exempt
obligations (including the Agreement) in the amount of more than $5,000,000 during the
current calendar year.
The parties agree that this Rider is an integral part of the Agreement.
LASALLE BANK NATIONAL ASSOCIATION
Lessor
By: �•C.GCce-w•
CITY OF SAN RAFAEL
Lessee
By: ,.., �' `.'
Ker,4I dhoff, Ass nt City Manager
CITY OF Mayor
Albert J. Boro
Council Members
Paul M. Cohen
Barbara Heller
Cyr N. Miller
Gary 0. Phillips
March 9, 2004
LaSalle Bank National Association
135 S. LaSalle Street, Suite 545
Chicago, Illinois 60603 D /Pi
T�
RE: Addendum to Equipment lease/Purchase Agreement dated as of March 10,
2004 by and between LaSalle Bank National Association, as lessor, and City
of San Rafael, as lessee — Self Insurance.
Paragraph 7 (e) Self -Insurance. Provisions of evidence of self-insurance shall satisfy
Lessee's insurance obligations under Section 7 of this agreement.
LASALLE BANK NATIONAL ASSOCIATION
Lessor
By:
cr-
CITY OF SAN RAFAEL
Lessee
By.
I v
Ken N�rdhoff, Assistant Ci I
M,ar�ager
1400 Fifth Ave., P.O. Box 151560, San Rafael, CA 94915-1560
Phone: (415) 485-3054 Fax. (415) 485-3100 TDD: (415) 485-3198