HomeMy WebLinkAboutReso 99-028 - Auth Execution and Delivery of an Equip Lease/Purchase agreement, and related instruments, with Lasalle National Bank pertaining to the Convention Center Energy Retrofit RFP# 3251 . • �
RESOLUTION NO. 99- 2�'
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
REDDING AUTHORIZING THE EXECUTION AND DELIVERY OF AN
EQUIPMENT LEASE/PURCHASE AGREEMENT, AND RELATED
INSTRUMENTS, WITH LASALLE NATIONAL BANK PERTAINING TO
THE CONVENTION CENTER ENERGY RETROFIT (REQUEST FOR
PROPOSALS #3251).
WHEREAS, the City Council of the City of Redding has determined that a true and
very real need exists for the Equipment ("Equipment") described in the proposed Equipment
Lease/Purchase Agreement ("Agreement") between LaSalle National Bank as Lessor and the
City of Redding as Lessee, presented to this meeting; and
WHEREAS, the City of Redding has taken the necessary steps, including those
relating to any applicable legal bidding requirements, to arrange for the acquisition of the
Equipment; and
WHEREAS, the City Council proposes entering into the Agreement with LaSalle
National Bank, substantially in the proposed form presented to this meeting;
NOW, THEREFORE, IT IS HEREBY RESOLVED by the City Council of the City
of Redding as follows:
1. It is found and determined that, subject to form approval by the City Attorney,
the terms of the Agreement, substantially in the form presented to this meeting and
incorporated herein, are in the best interests of the City of Redding for the acquisition of the
Equipment. The final Agreement, to be form approved by the City Attorney, is hereby
approved.
2. The Mayor is authorized to execute, acknowledge and deliver the Agreement,
and any additional and subsequent documentation relating thereto, upon form approval by the
City Attorney, with any changes, insertions and omissions therein as may be approved by the
officers who execute the Agreement, such approval to be conclusively evidenced by such
execution and delivery of the Agreement. The City Clerk is authorized to affix the official
seal of the City of Redding to the documentation and attest the same.
3. The Mayor and City Clerk are hereby authorized and directed to execute and �
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deliver any and all papers, instruments, opinions, certificates, affidavits and other documents, c�
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EQUIPMENT LEASE/PURCHASE AGREEMENT
LASALLE NATIONAL BANK
CONVENTION C�NTER ENERGY RETROFIT
and to do or cause to be done any and all other acts and things necessary or proper for carrying
out this resolution and the Agreement.
4. The City Council hereby designates the Agreement as a "qualified tax-exempt
obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as
amended.
I HEREBY CERTIFY that the foregoing resolution was introduced, read and adopted
at a regular meeting of the City Council of the City of Redding on the 16th�ay Of February ,
1999, by the following vote:
AYES: COiJNCILMEMBERS: Cibula, Kight , McGeorge, Pohlmeyer and Anderson
NOES: COiJNCIL MEMBERS: None
ABSENT: COi7NCII.MEMBERS: None
ABSTAIN: COi7NCIL MEMBERS: None
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ROBERT C. ANDERSON, Mayor
Attest:
Connie Strohmayer, ty Clerk
Form Approved:
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�!�-'tl -,�'�,,.���,� . �
W. Leonard Wingate, ty Attorney
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EQUIPMENT LEASE/PURCHASE AGREEMENT
THIS EQUIPMENT LEASE/PURCHASE AGREEMENT ("Agreement") is
made as of DATE by and between LASALLE NATIONAL BANK ("Lessor") and
LXE ("Lessee").
In consideration of the mutual covenants, terms and conditions hereinafter
contained, Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees
to lease from Lessor, the property (hereinafter, together with all replacements
and accessions thereto, referred to as the "Equipment") generally described in
the Preliminary Description of Equipment attached hereto and to be more
specifically described in one or more Certificates of Acceptance, in the form
attached, to be executed and delivered pursuant hereto, subject to the terms and
conditions set forth herein.
This Agreement is made upon the following terms and conditions:
1 . TERM.
(a) Commencement of Term. This Agreement shall be
effective, and the parties' obligations hereunder shall arise, as of the date hereof.
The term of lease under this Agreement (the "Lease Term") shall commence on
the date on which Lessor deposits into escrow the purchase price anticipated to
be required in connection with the acquisition of the Equipment (the
"Commencement Date"), irrespective of when the Equipment is accepted by
Lessee.
(b) Termination of Lease Term. The Lease Term wili terminate
upon the earliest to occur of any of the following events:
(1) The payment by Lessee of all rental payments to be
paid by Lessee hereunder with respect to the Equipment, as set forth on
the Schedule of Payments (the "Schedule") executed by Lessee and
attached hereto, and all other amounts authorized or required to be paid
hereunder with respect to the Equipment
(2) The payment by Lessee of the Prepayment Price
under the provisions of Section 10 hereof; or
(3) A default by Lessee and Lessor's election to
terminate this Agreement under Section 13 hereof. • .
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2. RENTAL PAYMENTS.
(a) Rental Payments to Constitute a Current Expense of
Lessee. Lessor and Lessee understand and intend that the obligation of Lessee
to pay rentai payments hereunder shall constitute a current expense of Lessee
and shail not in any way be construed to be a debt of Lessee in contravention of
any appiicable constitutional or statutory limitations or requirements concerning
the creation of indebtedness by Lessee, nor shall anything contained herein
constitute a piedge of the general tax revenues, funds or monies of Lessee.
(b) Payment of Rental Payments. Lessee shali pay rental
payments exciusively 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. In the event that all or any portion of a rentai payment due hereunder
shall be abated and not paid, the term hereunder shall be extended until Lessee
has paid all rental payments set forth on the Schedule and Lessee shail pay rent
for the extended term at the rate equal to the amount of abatement on the next
succeeding anniversaries of the rental payment due dates set forth on the
Schedule.
(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 Payments to be Unconditional. The obligation of
Lessee to make rental payments hereunder, and to perform and observe the
covenants and agreements contained in this Agreement, shall be absolute and
unconditional in all events, except as expressly provided in this Agreement.
Lessee shall not assert any right of setoff, counterclaim, or abatement against its
obligations hereunder, including (without limitation) by reason of equipment
failure, disputes with the vendor(s) or manufacturer(s) of the Equipment or
Lessor, accident or any unforeseen circumstances.
(e) Fair Rental Value. Rental payments and other -payments
due hereunder shall be paid by Lessee in consideration of the right of �
possession of, and the continued quiet use and enjoyment of, the Equipment
during each rental period. Lessee has determined that such rental is not in
excess of the fair rental value of the Equipment. In making such determination,
consideration has been given to the fair market value of the Equipment, other
obligations of the parties under this Agreement, the uses and purposes which
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may be served by the'"'"Equipment and the benefits therefrom which will accrue to
Lessee and the general public. The total rental due hereunder shall be paid for
and in consideration of the right to use and occupy the Equipment and in
consideration of the continued right to the quiet use and enjoyment thereof
during each rental period for which rental is to be paid.
(f) Appropriations Covenant. Lessee covenants to include ail
rental payments due hereunder in its annual budgets and to make necessary
annual appropriations for all such rental payments. Such covenants on the part
of Lessee shall be deemed and construed to be a duty imposed by law and it
shall be the duty of each and every public official of Lessee to take such action
and do such things as are required by law in the performance of the official duty
of such officials to enable Lessee to carry out the covenants and agreement
agreed to be carried out and performed by Lessee in this Agreement.
(g) Rental Abatement. Rental payments due hereunder with
respect to the Equipment shall be subject to abatement during any period in
which there is substantial interference with the use and right or possession by
Lessee of the Equipment or any substantial portion thereof. Lessee shall
immediately notify Lessor upon the occurrence of any event causing substantial
interference with Lessee's use and possession of the Equipment. For each
potential incident of substantial interference, decisions on (a) whether or not
abatement shall apply; (b) the date upon which abatement shall commence; (c)
the applicable portion of rental payments to be abated; and (d) the concluding
date of the particular abatement, shall all be subject to determinations by Lessee
and Lessor in concert with the provider of the insurance issued pursuant to
Section 7(d) hereof. The amount of rental abatement shall be such that the
rental payments paid by Lessee during the period of substantial interference with
its use and possession of the Equipment do not exceed the fair rental value on
the usable portions of the Equipment. The actual amount of rental payments
paid by Lessee shall be conclusive as to its fair value. In the event of any
damage or destruction to the Equipment, this Agreement shall continue in full
force and effect notwithstanding any abatement of rental payments pursuant to
this subsection. Lessee waives the benefits of California Civil Code Sections
1932 and 1933 and any and all other rights to terminate this Agreement or the
Escrow Agreement by virtue of any interference with the use and possession of
any Equipment.
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.
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(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) As evidenced by an attachment hereto, the execution and
delivery of this Agreement by or on behaif 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 ail
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.
(d) 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.
(e) 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.
(f) 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 information relating to the ability of Lessee to continue
this Agreement as may reasonably be requested by Lessor.
(g) 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.
(h) Lessee acknowledges that Lessor is acting only as a
financing source with respect to the Equipment, which has been selected by
Lessee. . .
(i) 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.
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(j) Lessee shall pay the excess (if any) of the actual acquisition
price of the Equipment over the amount initially deposited by Lessor in escrow
and interest earnings thereon.
(k) Lessee has reviewed the areas within its business and
operations which could be adversely affected by, and has developed or is
developing a program to address on a timely basis, the "Year 2000 Problem"
(that is, the risk that computer applications used by Lessee may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999), and has made related
appropriate inquiry of material suppliers and vendors. Based on such review and
program, Lessee believes that the "Year 2000 Problem" will not have a Material
Adverse Effect. As used herein, "Material Adverse Effect" shail mean (1) a
materially adverse effect on the business, condition (financiai or otherwise),
operations, performance or properties of Lessee, or (2) a material impairment of
the ability of Lessee to perform its obligations under or to remain in compiiance
with this Agreement or any of the documents executed in connection therewith.
From time to time, at the request of Lessor, Lessee shall provide to Lessor such
updated information or documentation as is requested regarding the status of its
efforts to address the Year 2000 problem.
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, title
shall immediately vest in Lessor.
(b) Security Interest. To secure the prompt payment and
performance as and when due of all of Lessee's obligations under this
Agreement, Lessee hereby grants to Lessor a first priority security interest in the
Equipment, all replacements, substitutions, accessions and proceeds (cash and
non-cash), including the proceeds of all insurance policies, thereof. Lessee
agrees that with respect to the Equipment Lessor shall have all of the rights and
remedies of a secured party under the Uniform Commercial Code as in effect in
the State 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.
As further security therefor, Lessee hereby grants to Lessor a first
priority security interest in the cash and negotiable instruments from time to time '
comprising the Escrow Fund (as such term is defined in that certain Escrow
Agreement dated as of the date hereof among the financial institution acting as
escrow agent, Lessee and Lessor), and all proceeds (cash and non-cash)
thereof, and agrees that with respect thereto Lessor shall have all rights and
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remedies of a secured party under the Uniform Commercial Code as in effect in
the State of California.
5. USE AND MAINTENANCE.
(a) Use. Lessee shali 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 shali not
be unreasonably withheld. Lessee shail not attach or incorporate the Equipment
to or in any other item of equipment in such a manner that the Equipment
becomes or may be deemed to have become an accession to or a part of such
other item of equipment.
(b) Maintenance. Lessee, at its own expense, will keep and
maintain, or cause to be kept and maintained, the Equipment in as good
operating condition as when delivered to Lessee hereunder, ordinary wear and
tear resulting from proper use thereof alone excepted, and will provide all main-
tenance 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 Lease Term, br upon or
relating to the Equipment or this Agreement.
(b) Taxes, Other Governmental Charqes and Utility Charges.
The parties contemplate that the Equipment will be used for a governmental
purpose of Lessee and that the Equipment will be exempt from all taxes
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p y e d h esp o 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 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 and the Escrow
Fund free and clear of all liens, levies and encumbrances, except those created
under this Agreement.
7. INSURANCE.
(a) Casualty lnsurance. 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 rentai payment due date as
designated on the Schedule, whichever is greater. All insurance for loss or
damage shall provide that losses, if any, shall be payable to Lessor and Lessee,
as their interests may appear, and Lessee shall utilize its best efforts to have all
checks relating to any losses delivered promptly to Lessor. If Lessee insures
similar prope�ties 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
coilection of such claim or award.
(b) Liability Insurance. Lessee shall also carry public liability
insurance, both personal injury and property damage, covering the Equipment in
an amount as Lessor may from time to time reasonably require on notice to
Lessee. Lessor shall be named as an additional insured with respect to all such
liability insurance. With Lessor's prior consent, Lessee may satisfy its obligations
with respect to liability insurance hereunder by maintaining a funded self-
insurance plan.
(c) Worker's Compensation. Lessee shall carry' worker's '
compensation insurance covering all employees working on, in, near or about
the Equipment, or demonstrate to the satisfaction of Lessor that adequate self-
insurance is provided, and shall require any other person or entity working on, in,
near or about the Equipment to carry such coverage throughout the Lease Term.
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' d Rental Abatement Insuran �
( ) ce. Lessee shall maintain or
cause to be maintained at its expense, throughout the Lease Term, insurance
against rental payment abatement and loss of use of the Equipment or portions
thereof, with coverage equai to the maximum total rental payments payable by
Lessee for any consecutive 24-month period. The policy shall insure against
abatement of rental payments payable by Lessee resulting from Lessee's loss of
use of the Equipment or any substantial portion thereof and caused by any and
all other perils either insured or uninsured, including earthquakes and other acts
of God.
(e) 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
shali 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 Lease Term. Each insurer shall agree, by
endorsement upon the policy o� 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.
(f) Self-Insurance. With Lessor's prior written consent, Lessee
may satisfy its obligations with respect to casualty and liability insurance here-
under by maintaining a funded self-insurance plan acceptable to Lessor in its
sole discretion, which acceptance shall not be unreasonably denied. Lessee
shall not be permitted to self-insure its obligations under subsection (d) above.
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 shall relieve Lessee of its obligation to make rental payments or
perform any other obligations hereunder. Lessee waives the benefit of California
Civil Code Sections 1932 and 1933 and any other rights to terminate this
Agreement by virtue of any damage or destruction or condemnation of the .
Equipment. '
(b) Damage, Destruction and Condemnation. If prior to the
termination of the 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
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Lessee or Lessor in the E ui ment or an art thereof shall be taken un r
q p y p de 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 wiil 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 appiication of
the Net Proceeds), cause the prompt repair, replacement or restoration of the
affected Equipment. in the event that the Equipment is totaliy 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 rentaf 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 insuf-
ficient 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 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
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expense. Any such claim shall not affect in any manner the unconditional obli-
gation of Lessee to make rental payments hereunder.
10. PURCHASE OF EQUIPMENT BY LESSEE/PREPAYMENT.
Provided that Lessee is not then in default under this Agreement, this Agreement
will terminate, the security interest of Lessor in the Equipment will be terminated,
and Lessee will acquire title to the Equipment free and ciear of all liens and
encumbrances created by, or arising through or under, Lessor:
(a) at the end of the Lease Term, upon payment in full of all
rental payments and other amounts payabie by Lessee hereunder for the 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 pius the
rental payment due on such date and ali 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.
Additionally, upon receipt by Lessor of amounts remaining in the Escrow
Fund after payment in full of the purchase price of the Equipment, such amounts
shall be applied against the next succeeding rental payments due under this
Agreement or as may otherwise be agreed by Lessor and Lessee.
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.
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f . 12. ASSIG�ENT� SUBLEASING� INDE
, , MNIFIC/�TION.
(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 �essee may from time to time have against Lessor or Lessor's
assignees. Lessee agrees to execute all documents, including
acknowledgments of assignment, which may reasonabiy be requested by Lessor
or its assignees to protect their interests in the Equipment and in this Agreement.
(b) No Sale, Assignment or Subleasinq 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 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:
11
� . � �
(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 pa�t 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, any item thereof, or the Escrow Fund.
(b) Remedies on Defauit. 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 o� 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 hereunder, holding Lessee liable for the excess (if any) of (i) the
rental payments and 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
12
� , � �
such sale, lease or sublease, provided that the excess (if any) of the
amounts referred to in clause (ii) over 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 shail be deemed a totai 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 appiicable 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 Remedy Exclusive. No remedy herein conferred upon or
reserved to Lessor is intended to be exclusive and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity. Lessor's remedies
hereunder may be exercised separately with respect to items of the Equipment.
No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be exercised from time to time and as often as
may be deemed expedient.
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14. TAX COVENANTS.
(a) The parties assume that Lessor can exclude the interest
component of the rental payments from federal gross income. Lessee covenants
and agrees that it will (i) rebate an amount equal to excess earnings on the
Escrow Fund to the federal government if required by, and in accordance with,
Section 148(f) of the Code, and make the determinations and maintain the
records required by the regulations applicable thereto; (ii) use a book entry
system to register the owner of this Agreement so as to meet the applicable
requirements of Section 149(a)(3) of the Code; (iii) timely file an IRS Form 8038-
G (or, if the invoice price of the Equipment is less than $100,000, a Form 8038-
GC) with the Internal Revenue Service ("IRS") in accordance with Section 149(e)
of the Code; (iv) not permit the Equipment to be directiy or indirectly used for a
private business use within the meaning of Section 141 of the Code including,
without limitation, use by private persons or entities pursuant to contractual
arrangements which do not satisfy the IRS' guidelines for permitted management
contracts, as the same may be amended from time to time; (v) ensure that the
monies deposited by Lessor in escrow are not invested in such manner so as to
result in this Agreement being treated as an "arbitrage bond" or "federally
guaranteed bond" within the meaning of Section 148(a) or Section 149(b) of the
Code, respectively; (vi) comply with all provisions and regulations applicabie to
excluding the interest component of the rental payments from federal gross
income pursuant to Section 103 of the Code; and (vii) cause to be completed,
executed and delivered to Lessor a Tax Compliance Agreement and No
Arbitrage Certificate substantially in the form provided by Lessor.
(b) If Lessor either (i) receives riotice, 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.
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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 obiigated, to effect such perfo�mance or
compliance, and the amount of any out of pocket expenses and other
reasonabie expenses of Lessor incurred in connection with the performance of or
compliance with such agreement, together with interest thereon at the rate of
twelve percent (12%) per annum (or, if such rate is in excess of the maximum
rate permitted by law, the maximum rate permitted by law), shall be payable by
Lessee upon demand.
Within ten (10) days of receipt, Lessee shail 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, inciuding,
without limitation: (a) Uniform Commerciai 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.
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 ce�tified 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.
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(b) Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon Lessor and Lessee and their respective successors
and assigns.
(c) Severability; Survival. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. To the extent permitted by applicable
law, Lessee hereby waives any provision of law which renders any provision
hereof prohibited or unenforceable in any respect.
The representations, warranties and covenants of Lessee herein
shail 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 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 shalf 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 connectior�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.
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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 NATIONAL BANK
Lessor
By:
Address: 135 S. LaSalle Street
Suite 520
Chicago, Illinois 60603
Fax No.: (312) 904-8408
ATTEST: LXE
Lessee
By:
Address: LXE ADDRESS
LXE FAX:
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PRELIMINARY DESCRIPTION OF EQUIPMENT
ENERGY CONSERVATION MEASURES
MEASURE MEASiJAE DESCftIPT10N PROJECT COST
NUMBER
1 Lighting Retrofit $162,540
2 Facilities Automation System �128,950
3 Instail HCFC Energy Efficient Chiller, DX Cooling for S-8 & 10 �155,040
4 Install Boiler 50,400
TOTAL
$496,850
MISCELLANEOUS
Project Management $11,000
Technical Energy Study Inc.
Bonds
$8,887
S'�� $516,737
Contract Nlanagement and Lighting Upgrade SI;674
Total Project. $568,411
: • � �
CERTIFICATES OF ACCEPTANCE TO FOLLOW
� �. I � • i
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�
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ClTY OF REDDING, CALIFORNIA
i
REVISED TRANSACTION SUMMARY
February 11, 1999
�
Structure: This financing will be structured as a Califomla Renta�
Abatement lease/purchase transaction. �
Lessor. �aSalle National Bank, or it's Assigns
�
Lessee: . City of Redding, CA !
�
P�%ct Description: Energy Retrofit Project for the Redding Conventtan'
Center
Esti►nated
Funding Amount: $568,411
rerm: Fifteen (15) years i
Funding: The Lessor will fund the transaction prior to final
equipment acceptance by placing proc�eds in an
inte�est bearing escrow account.
All interest earnings during the escrow period will be
for the account of Lessee. LaSalle Nativnal Bank can
act as Escrow Agent on the Project for no fee.
Escrow funding is assumed to occur on vr before:
March 1, 1999 with final acceptance of the project,
within twelve (12) to eighteen (18) months. �
�
Lease Payments: The Lessee wil! be required to make thirty (30) semi-�I
annual payments, each in arrears, comprised of I
principal and interest. Based upon the estimated �
funding amount of $568,411.00, the semi-annual �
lease payments would equal $28,476.18. : These '
payments equate to an annual percentage�rate of
5,503% (see attached Schedule of Payments).
. �
The initial payment wiA be due six (6) months from the
date of escrow funding.
The above quoted rates wit! expire on
March '1, '1999.
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City of Redding, CA
Transaction Summary
Page Twv
Purchase Option: At the end of the lease, the Lesse� wiil have th ,
option to purchase tfie equipment for one dolla
(�1.00}. The Lessee will also have the option t
purchase the equipment on any payment date for th ,
amount indicated on the attached Schedule(s} o�
Payments. '�
Lessor agrees that Lessee may execute a one tim
only prepayment of 2�°� of the then outstandin�
principal balance. This prapayment is assumed ta
occur on or before March 2000.
T1tlelSecurity: The Lessee will retain t�tle to the equipment
throughout the term. The �essor wiil retain a firsfi
priority security interest in the equipment until the'
Lessee has performed all duties required under the�
lease, �
Lessee's �
Responsibilities: All responsibilities imposed by the ownership or�
possession of the equipment including, but not limited�
to, taxes, insurance and equipment maintenance,
shall be borne by Lessee,
Dvcumenfatron: In addition to the LeaselPurchase Agreement, the�
Lessor will prepare and require the following ancillary
documents:
� Opinion of Counsel
• Incumbency Certificate
• Certificate of Resolutions '
• Acceptance Ce�tificate
• Schedule of Payments �
• UCC Financing Statements
• Evidence of Insurance • •
� I RS Form 8038-G ' '
� Essential Use Letter
• Escrow Agreement j
�
Final documentation will be subject to the approval of
all parties.
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City of Redding, CA �
Transaction Summary
Page Three �
1
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Expenses: The l.essor wii! be respansible for its legai costs. Th
Lessee will be responsibie for expenses associate
with #he rendering of the opinion by its counsel an
any escrow agent fees if LaSal(e National Bank is no�
selected as Escrow Agent.
Condit�'ons: This Proposal is subject to the revi�w and
approval of the Senlor Management of LaSalle
National Bank and/or it's Assigns.
�
ACKNOWLEDGED:
1
a
By: .
Its: �
�
This Transactlon Summary is not intended to be a binding commitment or a flnal agreemert4 wlth LaSalle
National Bank{the "Bank") or it's Aaslgns. This Proposal is not Intended to and does not con�er any rights
upon the Lessee/lssuor or any third parties. The ternns and conditions set fo�th in this Pr pvsal are for
negotiation purpoaes only and are subJect to change. This Proposal is Intended only to expr s the curre�tt
intention of the Bank a�d/or It's Assigns and the Leasee/faauer to proceed to negot;ate, to p epare and, If
acceptahle to each party, to execute agraements, which�if executed,wQl entirely supercede th Proposal.
�
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1
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City of Redding - Revised Schedule of Payments �
c
�
Nominai Annuai Rate 5.503 �/,
Purchase �
# te Pa ent Interest Principal Option Price i
_ �
1 01-Sep-99 28,076.18 15,639.83 12,436.35 567,094.14 '
� 4�-Mar-0O 28,076.18 15,297.64 12,7?g,54 554,060.03 �
3 01-Sep-0O 28,076.18 14,946.04 13,130.14 540,667,29 !
4 01-Mar-01 28,076.18 14,584.77 13,491.4t 526,906.05
5 01-Sep-01 28,076.18 14,213.55 13,862.63 512,766.17
6 O1-Mar-02 28,076.16 13,832.12 14,244,06 498,237.23 ;
7 01�ep-02 28,076.18 13,440.19 14,635.99 483,308.52 '
8 01-Mar-03 28,076.18 13,037.48 15,038.70 467,969.04
9 01$ep-03 28,076,18 12,623.69 9 5,452.49 4S2,2a7.50
10 �1-Mar-04 28,676.18 12,198.52 15,877.66 436,012.29
11 09-Sep-Q4 28,076.18 11,761.65 16,314.53 419,371.47
12 01-Mar-05 28,076.18 11,312.75 16,763.43 402,272.77 �
13 01Sep-05 28,076.18 10,851.51 17,224.67 384,703.61
14 01-Mar-0B 28,076,18 10,377,57 17,898.61 366,651.03
15 01-Sep-06 28,076.18 9,890.59 18,185.59 348,101.72
16 01-Mar-07 28,076.18 9,390.21 18,685.97 329,042.03 �
17 01-Sep-07 28,Q76.18 8,876.07 19,200.11 309,457.92
18 01-Mar-0B 29,076.18 8,347,78 19,728.40 289,334.95 �
19 01-Sep-0B 28,076.18 7,804,95 20,271.23 268,658.30
20 01-Mar-09 28,0�6.18 7,247,19 20,826.98 247,412.73
21 01-Sep-09 28,076.18 6,674.08 21,402.10 225,582.59
22 01-Mar-10 28,076.18 6,08520 21,990.98 203,151.79 �
23 01-Sep-10 28,076.18 5,480.12 22,596.08 180,103.81
24 01-Mar-11 28,076.18 4,858,39 23,217.79 iS8,421.66
25 01-Sep-11 28,076.18 4,219.55 23,858.63 132,087.90
26 01-Mar-12 28,076.18 3,563.14 24,553.04 107,Q84.60
27 01-Sep-12 28,076.18 2,888.6fi 25,187.52 81,393.33 �
28 01-Mar-13 28,076.18 2,195.62 25,880.56 54,995.16 �
29 01-Sep-13 28,076.18 1.483.52 26,592.66 27,870.64 '
3d 01-Mar-14 28,076.18 752.02 27,324,16 0.00
Grand Totais 842,265,40 273,874.40 568,411.00 0.00 �
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