HomeMy WebLinkAboutGrand Terrace Lions Club-2006-21 (3) Cs (C -2COLa —I
The Ike\lunnl'ain City
Grand Terrace
CALIFORNIA
July 11, 2006
22795 Barton Road
Grand Terrace Mr. James Manning
California 92313 Zions Bank
One South Main Street, Suite 1660
Civic Center Salt Lake City,UT 84111
(909)430-2212
Fax (909)783-7629 Dear Mr. Manning:
Enclosed herewith are two original Fixed-Rate Equipment Lease/Purchase
Agreements by and between Zions First National Bank and the City of Grand
City Clerk's Terrace. Please send me a fully executed copy of the Agreement once completed.
Department
If you have any questions, or need further assistance,please feel free to contact
me at 909 430-2212.
Sincerely,
iJet_ittieii-1494 Ic
Tracey Martinez
Deputy City Clerk
enclosures
$170,000.00
FIXED-RATE EQUIPMENT LEASE/PURCHASE AGREEMENT
Dated as of June 28, 2006
by and between
ZIONS FIRST NATIONAL BANK, as Lessor
and
CITY OF GRAND TERRACE as Lessee
BANK QUALIFIED
ARTICLE VII 17
Section 7.1 Assignment by the Bank 17
Section 7.2 Assignment and Subleasing by the Lessee 17
ARTICLE VIII 17
Section 8.1 Events of Default Defined 17
Section 8.2 Remedies on Default 18
Section 8.3 No Remedy Exclusive 18
Section 8.4 Agreement to Pay Attorneys'Fees and Expenses 18
Section 8.5 Waiver of Certain Damages 18
ARTICLE IX 18
Section 9.1 Extraordinary Prepayment From Net Proceeds 18
Section 9.2 Prepayment 19
ARTICLE X 19
Section 10.1 Notices 19
Section 10.2 System of Registration 20
Section 10.3 Instruments of Further Assurance 20
Section 10.4 Bindinv Effect 20
Section 10.5 Amendments 20
Section 10.6 Section Headings 20
Section 10.7 Severability 20
Section 10.8 Entire Agreement 20
Section 10.9 Execution in Counterparts 21
Section 10.10 Arbitration 21
Section 10.11 Applicable Law 21
EXHIBIT A SCHEDULE OF LEASE PAYMENTS
EXHIBIT B DESCRIPTION OF LEASED PROPERTY
EXHIBIT C RESOLUTION OF GOVERNING BODY
EXHIBIT D OPINION OF LESSEE'S COUNSEL
EXHIBIT E SECURITY DOCUMENTS
EXHIBIT F DELIVERY AND ACCEPTANCE CERTIFICATE
EXHIBIT G: FORM 8038
LEASE/PURCHASE AGREEMENT
This Lease/Purchase Agreement,dated as of June 28,2006,by and between ZIONS FIRST
NATIONAL BANK,a national banking association duly organized and existing under the laws of the
United States of America, as lessor(the`Bank"),and CITY OF GRAND TERRACE,as lessee(the
"Lessee"), a public agency duly organized and existing under the Constitution and laws of the State of
California(the"State");
WITNESSETH:
WHEREAS,the Lessee desires to finance the acquisition of the equipment and/or other personal
property described as the"Leased Property"in Exhibit B("Leased Property") by entering into this
Lease/Purchase Agreement with the Bank("Lease"); and
WHEREAS,the Bank agrees to lease the Leased Property to the Lessee upon the terms and
conditions set forth in this Lease,with rental to be paid by the Lessee equal to the Lease Payments
hereunder; and
WHEREAS,all acts,conditions and things required by law to exist,to have happened and to have
been performed precedent to and in connection with the execution and delivery of this Lease do exist,
have happened and have been performed in regular and due time, form and manner as required by law,
and the parties hereto are now duly authorized to execute and enter into this Lease;
NOW,THEREFORE,in consideration of the above premises and of the mutual covenants
hereinafter contained and for other good and valuable consideration,the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1 Definitions and Rules of Construction
Unless the context otherwise requires,the capitalized terms used herein shall,for all purposes of
this Lease,have the meanings specified in the definitions below. Unless the context otherwise indicates,
words importing the singular number shall include the plural number and vice versa. The terms"hereby",
"hereof',"hereto", "herein", "hereunder"and any similar terms, as used in this Lease,refer to this Lease
as a whole.
"Advance"shall have the meaning set forth in Section 2.1(1)(i)(D)hereof.
"Authorizing Resolution"means the Resolution adopted by the Governing Body authorizing this
Lease,in substantially the form attached hereto as Exhibit C.
"Bank"shall have the meaning set forth in the Preamble hereof.
"Business Day"means any day except a Saturday, Sunday, or other day on which banks in Salt
Lake City,Utah or the State are authorized to close.
"Code"means the Internal Revenue Code of 1986,as amended.
"Commencement Date"means the date this Lease is executed by the Bank and the Lessee.
"Fiscal Year"means the period extending from July 1 of each calendar year to June 30 of the
subsequent calendar year.
"Governing Body"means the governing body of the Lessee.
"Lease"shall have the meaning set forth in the Whereas clauses hereof.
"Lease Payment Date"shall have the meaning set forth in Section 3.4(a)hereof.
"Lease Payments"means the rental payments described in Exhibit A hereto.
"Leased Property"shall have the meaning set forth in the Whereas clauses hereof and in
Exhibit B.
"Lessee"shall have the meaning set forth in the Preamble hereof.
"Net Proceeds"means insurance or eminent domain proceeds received with respect to the
Leased Property,less expenses incurred in connection with the collection of such proceeds.
"Obligation Instrument"shall have the meaning set forth in Section 2.1(c)hereof.
"Permitted Encumbrances"means,as of any particular time: (i)liens for general ad valorem
taxes and assessments,if any,not then delinquent,or which the Lessee may,pursuant to provisions of
Section 6.3 hereof,permit to remain unpaid; (ii)this Lease; (iii)any contested right or claim of any
mechanic, laborer,materialman, supplier or vendor filed or perfected in the manner prescribed by law to
the extent permitted under Section 6.4(b)hereof; (iv)easements,rights of way,mineral rights,drilling
rights and other rights,reservations,covenants,conditions or restrictions which exist of record as of the
execution date of this Lease and which the Lessee hereby certifies will not materially impair the use of the
Leased Property by the Lessee; and(v)easements,rights of way,mineral rights,drilling rights and other
rights,reservations,covenants,conditions or restrictions established following the date of execution of
this Lease and to which the Bank and the Lessee consent in writing.
"Rebate Exemption"shall have the meaning set forth in Section 2.1(l)(ii)(A)hereof.
"Regulations"shall have the meaning set forth in Section 2.1(1)(i)hereof.
"Term"means the term of this Lease as described in Section 3.2 hereof.
"State"shall have the meaning set forth in the Preamble hereof.
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Section 1.2 Exhibits.
The Exhibits attached to this Lease are by this reference made a part of this Lease.
ARTICLE II
REPRESENTATIONS,COVENANTS AND WARRANTIES
Section 2.1 R_pe resentations,Covenants and Warranties of the Lessee.
The Lessee represents,covenants and warrants to the Bank as follows:
(a) Due Organization and Existence. The Lessee is a public agency of the State duly
organized and existing under the Constitution and laws of the State.
(b) Authorization;Enforceability. The Constitution and laws of the State authorize the
Lessee to enter into this Lease and to enter into the transactions contemplated by,and to carry out its
obligations under,this Lease. The Lessee has duly authorized,executed and delivered this Lease in
accordance with the Constitution and laws of the State. This Lease constitutes the legal,valid and
binding special obligation of the Lessee enforceable in accordance with its terms,except to the extent
limited by applicable bankruptcy, insolvency,reorganization,moratorium or similar laws or equitable
principles affecting the rights of creditors generally,to the exercise of judicial discretion in appropriate
cases and to limitations on legal remedies against public agencies in the State.
(c) No Conflicts or Default;Other Liens or Encumbrances.Neither the execution and
delivery of this Lease nor the fulfillment of or compliance with the terms and conditions hereof,nor the
consummation of the transactions contemplated hereby(i)conflicts with or results in a breach of the
terms,conditions,provisions,or restrictions of any existing law, or court or administrative decree, order,
or regulation,or agreement or instrument to which the Lessee is now a party or by which the Lessee is
bound,including without limitation any agreement or instrument pertaining to any bond,note,
lease,certificate of participation,debt instrument,or any other obligation of the Lessee(any such
bond,note,lease, certificate of participation, debt instrument,and other obligation being referred to
herein as an"Obligation Instrument"),(ii)constitutes a default under any of the foregoing,or(iii)results
in the creation or imposition of any pledge,lien,charge or encumbrance whatsoever upon any of the
property or assets of the Lessee,or upon the Leased Property except for Permitted Encumbrances.
By way of example,and not to be construed as a limitation on the representations
set forth in the immediately preceding paragraph:
(A) no portion of the Leased Property is pledged to secure any Obligation
Instrument;and
(B) the interests of the Bank in the Leased Property hereunder do not violate the
terms,conditions or provisions of any restriction or revenue pledge in any
agreement or instrument pertaining to any Obligation Instrument.
If any Obligation Instrument existing on the date of execution of this Lease creates any
pledge,lien, charge or encumbrance on any revenues,property or assets associated with the Leased
Property that is higher in priority to the Bank's interests therein under this Lease,the Bank hereby
subordinates its interests therein,but only to the extent required pursuant to such existing Obligation
Instrument.
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(d) Compliance with Open Meeting Requirements. The Governing Body has complied with
all applicable open public meeting and notice laws and requirements with respect to the meeting at which
the Lessee's execution of this Lease was authorized.
(e) Compliance with Bidding Requirements. Either there are no procurement or public
bidding laws of the State applicable to the acquisition and leasing of the Leased Property pursuant to this
Lease,or the Governing Body and the Lessee have complied with all such procurement and public
bidding laws as may be applicable hereto.
(t) No Adverse Litigation. There are no legal or governmental proceedings or litigation
pending, or to the best knowledge of the Lessee threatened or contemplated(or any basis therefor)
wherein an unfavorable decision,ruling, or finding might adversely affect the transaction contemplated in
or the validity of this Lease.
(g) Opinion of Lessee's Counsel. The letter attached to this Lease as Exhibit D is a true copy
of the opinion of Lessee's Counsel.
(h) Governmental Use of Leased Property. During the Term of this Lease,the Leased
Property will be used solely by the Lessee,and only for the purpose of performing one or more
governmental or proprietary functions of the Lessee consistent with the permissible scope of the Lessee's
authority,and the Leased Property will not be subject to any direct or indirect private business use.
(i) Other Representations and Covenants. The representations, covenants,warranties,and
obligations set forth in this Article are in addition to and are not intended to limit any other
representations,covenants,warranties, and obligations set forth in this Lease.
(j) No Defaults. The Lessee has never non-appropriated or defaulted under any of its
payment or performance obligations or covenants,either under any municipal lease of the same general
nature as this Lease,or under any of its bonds,notes,or other obligations of indebtedness for which its
revenues or general credit are pledged.
(k) No Legal Violation. The Leased Property is not,and at all times during the Term of this
Lease will not be in violation of any federal,state or local law, statute,ordinance or regulation.
(I) General Tax and Arbitrage Representations and Covenants
(i) The certifications and representations made by the Lessee in this Lease are
intended,among other purposes,to be a certificate permitted in Section 1.148-
2(b)of the Treasury Regulations promulgated pursuant to Section 148 of the
Code(the"Regulations"),to establish the reasonable expectations of the Lessee
at the time of the execution of this Lease made on the basis of the facts,estimates
and circumstances in existence on the date hereof. The Lessee further certifies
and covenants as follows:
(A) The Lessee has not been notified of any disqualification or proposed
disqualification of it by the Commissioner of the Internal Revenue
Service as an issuer which may certify bond issues.
(B) To the best knowledge and belief of the Lessee,there are no facts,
estimates or circumstances that would materially change the conclusions,
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certifications or representations set forth in this Lease, and the
expectations herein set forth are reasonable.
(C) The Scheduled Term of this Lease does not exceed the useful life of the
Leased Property, and the weighted average term of this Lease does not
exceed the weighted average useful life of the Leased Property.
(D) Each advance of funds by the Bank to finance Leased Property under this
Lease(each an"Advance")will occur only when and to the extent that
the Lessee has reasonably determined and identified the nature,need,
and cost of each item of Leased Property pertaining to such Advance.
(E) No use will be made of the proceeds of this Lease or any such Advance,
or any funds or accounts of the Lessee which may be deemed to be
proceeds of this Lease or any such Advance,which use, if it had been
reasonably expected on the date of the execution of this Lease or of any
such Advance,would have caused this Lease or any such Advance to be
classified as an"arbitrage bond"within the meaning of Section 148 of
the Code.
(F) The Lessee will at all times comply with the rebate requirements of
Section 148(f)of the Code as they pertain to this Lease, to the extent
applicable.
(G) In order to preserve the status of this Lease and the Advances as other
than"private activity bonds"as described in Sections 103(b)(1)and 141
of the Code,as long as this Lease and any such Advances are outstanding
and unpaid:
(I) none of the proceeds from this Lease or the Advances or any
facilities or assets financed therewith shall be used for any
"private business use"as that term is used in Section 141(b)of
the Code and defined in Section 141(b)(6)of the Code;
(II) the Lessee will not allow any such"private business use"to be
made of the proceeds of this Lease or the Advances or any
facilities or assets financed therewith;and
(III) none of the Advances or Lease Payments due hereunder shall be
secured in whole or in part,directly or indirectly,by any interest
in any property used in any such"private business use"or by
payments in respect of such property, and shall not be derived
from payments in respect of such property.
(H) The Lessee will not take any action, or omit to take any action,which
action or omission would cause the interest component of the Lease
Payments to be ineligible for the exclusion from gross income as
provided in Section 103 of the Code.
(I) The Lessee is a"governmental unit"within the meaning of Section
141(6)(6)of the Code.
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(3) The obligations of the Lessee under this Lease are not federally
guaranteed within the meaning of Section 149(b)of the Code.
(K) This Lease and the Advances to be made pursuant hereto will not
reimburse the Lessee for any expenditures incurred prior to the date of
this Lease and do not constitute a"refunding issue"as defined in Section
1.150-1(d)of the Regulations, and no part of the proceeds of this Lease
or any such Advances will be used to pay or discharge any obligations of
the Lessee the interest on which is or purports to be excludable from
gross income under the Code or any predecessor provision of law.
(L) In compliance with Section 149(e)of the Code relating to information
reporting,the Lessee will file or cause to be filed with the Internal
Revenue Service Center, Ogden,UT 84201,within fifteen(15)days
from the execution of this Lease,IRS Form 8038-G or 8038-GC,as
appropriate,reflecting the total aggregate amount of Advances that can
be made pursuant to this Lease.
(M) None of the proceeds of this Lease or the Advances to be made
hereunder will be used directly or indirectly to replace funds of the
Lessee used directly or indirectly to acquire obligations at a yield
materially higher than the yield on this Lease or otherwise invested in
any manner. No portion of the Advances will be made for the purpose of
investing such portion at a materially higher yield than the yield on this
Lease.
(N) Inasmuch as Advances will be made under this Lease only when and to
the extent the Lessee reasonably determines, identifies and experiences
the need therefor,and will remain outstanding and unpaid only until such
time as the Lessee has moneys available to repay the same,the Lessee
reasonably expects that(I)the Advances will not be made sooner than
necessary; (II)no proceeds from the Advances will be invested at a yield
higher than the yield on this Lease;and(III)the Advances and this Lease
will not remain outstanding and unpaid longer than necessary.
(0) The Lessee will either(i)spend all of the moneys advanced pursuant to
this Lease immediately upon receipt thereof,without investment, on the
portion of the Leased Property that is to be financed thereby; or(ii)
invest such moneys at the highest yield allowable and practicable under
the circumstances until they are to be spent on the portion of the Leased
Property that is to be financed thereby,and track,keep records of,and
pay to the United States of America,all rebatable arbitrage pertaining
thereto,at the times,in the amounts,in the manner,and to the extent
required under Section 148(t)of the Code and the Treasury Regulations
promulgated in connection therewith. At least five percent(5%)of the
total amount of moneys that are expected to be advanced pursuant to this
Lease are reasonably expected to have been expended on the Leased
Property within six(6)months from the date of this Lease. All moneys
to be advanced pursuant to this Lease are reasonably expected to have
been expended on the Leased Property no later than the earlier of: (I)the
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date twelve(12)months from the date such moneys are advanced; and
(II)the date three(3)years from the date of this Lease.
(P) This Lease and the Advances to be made hereunder are not and will not
be part of a transaction or series of transactions that attempts to
circumvent the provisions of Section 148 of the Code and the regulations
promulgated in connection therewith(I)enabling the Lessee to exploit
the difference between tax-exempt and taxable interest rates to gain a
material financial advantage, and(II)overburdening the tax-exempt bond
market,as those terms are used in Section 1.148-10(a)(2) of the
Regulations.
(Q) To the best of the knowledge, information and belief of the Lessee,the
above expectations are reasonable. On the basis of the foregoing,it is
not expected that the proceeds of this Lease and the Advances to be
made hereunder will be used in a manner that would cause this Lease or
such Advances to be"arbitrage bonds" under Section 148 of the Code
and the regulations promulgated thereunder,and to the best of the
knowledge, information and belief of the Lessee,there are no other facts,
estimates or circumstances that would materially change the foregoing
conclusions.
(ii) Arbitrage Rebate Under Section 148(0 of the Code. With respect to the arbitrage
rebate requirements of Section 148(0 of the Code,either(check applicable box):
r tr ) Lessee Oualifies for Small Issuer Exemption from Arbitrage Rebate.
J The Lessee hereby certifies and represents that it qualifies for the
exception contained in Section 148(f)(4)(D)of the Code from the
requirement to rebate arbitrage earnings from investment of proceeds of
the Advances made under this Lease(the"Rebate Exemption")as
follows:
(1) The Lessee has general taxing powers.
(2) Neither this Lease, any Advances to be made hereunder,nor any
portion thereof are private activity bonds as defined in Section
141 of the Code("Private Activity Bonds").
(3) Ninety-five percent(95%)or more of the net proceeds of the
Advances to be made hereunder are to be used for local
government activities of the Lessee(or of a governmental unit,
the jurisdiction of which is entirely within the jurisdiction of the
Lessee).
(4) Neither the Lessee nor any aggregated issuer has issued or is
reasonably expected to issue any tax-exempt obligations other
than Private Activity Bonds(as those terms are used in Section
148(0(4)(D)of the Code)during the current calendar year,
including the Advances to be made hereunder,which in the
aggregate would exceed$5,000,000 in face amount, or
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$15,000,000 in face amount for such portions, if any,of any tax-
exempt obligations of the Lessee and any aggregated issuer as
are attributable to construction of public school facilities within
the meaning of Section 148(f)(4)(D)(vii)of the Code.
For purposes of this Section,"aggregated issuer"means any entity which
(a)issues obligations on behalf of the Lessee,(b)derives its issuing
authority from the Lessee,or(c)is subject to substantial control by the
Lessee.
The Lessee hereby certifies and represents that it has not created,does
not intend to create and does not expect to benefit from any entity
formed or availed of to avoid the purposes of Section 148(f)(4)(D)(i)(IV)
of the Code.
Accordingly,the Lessee will qualify for the Rebate Exemption granted to
governmental units issuing less than $5,000,000 under Section
148(0(4)(D)of the Code($15,000,000 for the financing of public school
facilities as described above),and the Lessee shall be treated as meeting
the requirements of Paragraphs(2)and(3)of Section 148(f)of the Code
relating to the required rebate of arbitrage earnings to the United States
with respect to this Lease and the Advances to be made hereunder.
-or-
fit$.' Lessee Will Keep Records of and Will Rebate Arbitrage. The Lessee
does not qualify for the small issuer Rebate Exemption described above,
and the Lessee hereby certifies and covenants that it will account for,
keep the appropriate records of,and pay to the United States,the rebate
amount,if any,earned from the investment of gross proceeds of this
Lease and the Advances to be made hereunder,at the times, in the
amounts,and in the manner prescribed in Section 1480)of the Code and
the applicable Regulations promulgated with respect thereto.
(m) Qualified Tax-Exempt Obligations. Based on the following representations of the
Lessee,the Lessee hereby designates this Lease and the interest components of the Lease Payments
hereunder as"qualified tax-exempt obligations"within the meaning of Section 265(6)(3)of the Code:
(i) this Lease and the Lease Payments hereunder are not private activity bonds
within the meaning of Section 141 of the Code;
(ii) the Lessee reasonably anticipates that it,together with all aggregated issuers,will
not issue during the current calendar year obligations(other than those
obligations described in clause(iii)below)the interest on which is excluded from
gross income for federal income tax purposes under Section 103 of the Code
which,when aggregated with this Lease, will exceed an aggregate principal
amount of$10,000,000;
(iii) and notwithstanding clause(ii)above,Lessee and its aggregated issuers may
have issued in the current calendar year and may continue to issue during the
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remainder of the current calendar year private activity bonds other than qualified
501(c)(3)bonds as defined in Section 145 of the Code.
For purposes of this subsection,"aggregated issuer"means any entity which(a)issues
obligations on behalf of the Lessee,(b)derives its issuing authority from the Lessee, or(c)is subject to
substantial control by the Lessee. The Lessee hereby certifies and represents that it has not created,does
not intend to create and does not expect to benefit from any entity formed or availed of to avoid the
purposes of Section 265(b)(3)(C)or(D)of the Code.
Section 2.2 Representations,Covenants and Warranties of the Bank.
The Bank is a national banking association,duly organized,existing and in good standing under
and by virtue of the laws of the United States of America, has the power to enter into this Lease,is
possessed of full power to own and hold real and personal property,and to lease and sell the same,and
has duly authorized the execution and delivery of this Lease. This Lease,constitutes the legal,valid and
binding obligation of the Bank,enforceable in accordance with its terms,except to the extent limited by
applicable bankruptcy,insolvency,reorganization,moratorium or similar laws or equitable principles
affecting the rights of creditors generally.
ARTICLE III
AGREEMENT TO LEASE; TERM OF LEASE; LEASE PAYMENTS
Section 3.1 Lease.
The Bank hereby leases the Leased Property to the Lessee, and the Lessee hereby leases the
Leased Property from the Bank,upon the terms and conditions set forth herein.
Concurrently with its execution of this Lease,the Lessee shall deliver to the Bank fully completed
documents substantially in the forms attached hereto as Exhibits.
Section 3.2 Term.
The Term of this Lease shall commence on the date of execution hereof and shall end on (the
"Maturity Date"), unless extended pursuant to Section 3.3,or unless terminated prior thereto upon the
earliest of any of the following events:
(a) Default and Termination. A default by the Lessee and the Bank's election to terminate
this Lease under Section 8.2 hereof;
(b) Payment of All Lease Payments. The payment by the Lessee of all Lease Payments
required under Section 3.4 hereof;
(c) Prepayment. Upon a prepayment of Lease Payments pursuant to Article IX hereof.
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Section 3.3 Extension of Lease Term.
If on the Maturity Date,the Lease Payments shall not be fully paid, or if the Lease Payments
hereunder shall have been abated at any time and for any reason,then the Term shall be extended until all
Lease Payments shall be fully paid, except that the Term shall in no event be extended ten years beyond
the Maturity Date.
Section 3.4 Lease Payments.
(a) Time and Amount. Subject to the provisions of Section 3.8(regarding abatement in event
of loss of use of any portion of the Leased Property), and Article IX(regarding prepayment of Lease
Payments),the Lessee agrees to pay to the Bank,its successors and assigns,as annual rental for the use
and possession of the Leased Property, the Lease Payments(denominated into components of principal
and interest)in the amounts specified in Exhibit A,to be due and payable in arrears on each payment date
identified in Exhibit A(or if such day is not a Business Day,the next succeeding Business Day) specified
in Exhibit A(the"Lease Payment Date").
In the event that the Lessee does not pay a Lease Payment due on the respective Lease
Payment Date,the Bank shall provide prompt written notice to the Lessee of such failure to pay;
provided,however, that failure to give such notice shall not excuse any event of default under such
Section 8.1 hereof.
(b) Rate on Overdue Payments. In the event the Lessee should fail to make any of the Lease
Payments required in this Section,the Lease Payment in default shall continue as an obligation of the
Lessee until the amount in default shall have been fully paid,and the Lessee agrees to pay the same with
interest thereon,to the extent permitted by law,from the date such amount was originally payable at the
rate equal to the original interest rate payable with respect to such Lease Payments.
(c) Additional Payments. Any additional payments required to be made by the Lessee
hereunder,including but not limited to Sections 4.1,4.2,4.3,and 6.3 of this Lease, shall constitute
additional rental for the Leased Property.
Section 3.5 Fair Rental Value.
The Lease Payments shall be paid by the Lessee in consideration of the right of possession of,and
the continued quiet use and enjoyment of,the Leased Property during each such period for which said
Lease Payments are to be paid. The parties hereto have agreed and determined that such total rental
represents the fair rental value of the Leased Property. In making such determination,consideration has
been given to the value of the Leased Property,other obligation of the parties under this Lease(including
but not limited to costs of maintenance,taxes and insurance),the uses and purposes which may be served
by the Leased Property and the benefits therefrom which will accrue to the Lessee and the general public,
and the transfer of the Bank's leasehold interest in the Leased Property at the end of the Term.
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Section 3.6 Budget and Appropriation.
Subject to the provisions of Section 3.8,the Lessee covenants to take such action as may be
necessary to include all Lease Payments due hereunder in its annual budget and to make the necessary
annual appropriations therefor,and to maintain such items to the extent unpaid for that Fiscal Year in its
budget throughout such Fiscal Year. The covenants on the part of the Lessee herein contained shall be
deemed to be and shall be construed to be duties imposed by law and it shall be the ministerial duty of
each and every public official of the 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 the Lessee to carry out and perform the
covenants and agreements in this Lease agreed to be carried out and performed by the Lessee.
Section 3.7 Use and Possession.
The total Lease Payments due in any Fiscal Year shall be for the Lessee's right to use and
possession of the Leased Property for such Fiscal Year.
Section 3.8 Abatement of Lease Payments in Event of Loss of Use.
(a) Period. The obligation of the Lessee to pay Lease Payments shall be abated during any
period in which by reason of damage,destruction or taking by eminent domain or condemnation with
respect to any portion of the Leased Property there is substantial interference with the Lessee's right to use
and possession of such portion of the Leased Property.
(b) Amount. The amount of such abatement shall be determined by the Lessee such that the
resulting Lease Payments represent fair consideration for the Lessee's right to use and possession of the
portion of the Leased Property not damaged,destroyed or taken. Such abatement shall commence with
such damage,destruction or taking and end with the substantial completion of the replacement or work or
repair;provided,however,that during abatement, special sources of money, including without limitation
proceeds of rental interruption insurance,shall be applied to pay the Lease Payments.
(c) Repair or Replacement. In the event of such abatement, the Lessee will use its best
efforts to repair or replace the damaged or destroyed or taken portion of the Leased Property,as the case
may be, from Net Proceeds, subject to the requirements of Section 5.1 hereof,or special funds of the
Lessee or other moneys the application of which would not result in the obligations of the Lessee
hereunder constituting indebtedness of the Lessee in contravention of the Constitution and laws of the
State.
Section 3.9 Possession of Leased Property Upon Termination.
Upon termination of this Lease pursuant to Section 3.2(a), the Lessee shall transfer the Leased
Property to the Bank in such manner as may be specified by the Bank, and the Bank shall have the right to
take possession of the Leased Property by virtue of the Bank's ownership interest as lessor of the Leased
Property.
To the extent the Leased Property is equipment,the Lessee at the Bank's direction shall ship the
Leased Property to the destination designated by the Bank, by loading the Leased Property at the Lessee's
cost and expense,on board such carrier as the Bank shall specify.
11
Section 3.10 No Withholding.
Notwithstanding any dispute between the Bank and the Lessee,including a dispute as to the
failure of any portion of the Leased Property in use by or possession of the Lessee to perform the task for
which it is leased,the Lessee shall make all Lease Payments when due and shall not withhold any Lease
Payments pending the final resolution of such dispute.
Section 3.11 Net-Net-Net Lease.
This I pace shall be deemed and construed to be a"net-net-net lease"and the Lessee hereby
agrees that the Lease Payments shall be an absolute net return to the Bank,free and clear of any expenses,
charges or set-offs whatsoever,except as expressly provided herein.
Section 3.12 Offset.
Subject to the provisions of Section 3.8,Lease Payments or other sums payable by the Lessee
pursuant to this Lease shall not be subject to offset or counterclaim and the Lessee shall not be entitled to
any credit against such Lease Payments or other sums by reason of any dispute between the Lessee and
the Bank,any vendor or manufacturer of any part of the Leased Property,or any other person.
ARTICLE IV
INSURANCE
Section 4.1 Casualty and Theft Insurance.
(a) Casualty and Theft Insurance: Coverage. The Lessee shall procure and maintain,or
cause to be procured and maintained,throughout the Term of this Lease,insurance against loss or damage
to any portion of the Leased Property caused by fire and lightning,with extended coverage and theft,
vandalism and malicious mischief insurance. Said extended coverage insurance shall,as nearly as
practicable, cover loss or damage by explosion,windstorm,riot,aircraft,vehicle damage,smoke and such
other hazards as are normally covered by such insurance.
(b) Amount. Such insurance shall be in an amount(except that such insurance may be
subject to deductible clauses of not to exceed$50,000 for any one loss)not less than the replacement cost
of the Leased Property.
(c) Joint or Self-Insurance. Such insurance may be maintained as part of or in conjunction
with any other insurance carried or required to be carried by the Lessee, and, subject to Bank's consent
and compliance with Section 4.3(b)hereof,may be maintained in the form of self-insurance by the
Lessee.
(d) Payment of Net Proceeds. The Net Proceeds of such insurance shall be applied as
provided in Section 5.1.
Section 4.2 Rental Interruption Insurance.
(a) Coverage and Amount. The Lessee shall maintain or cause to be maintained,rental
income or use and occupancy insurance in an amount not less than the maximum Lease Payments payable
in any one year period (calculated based upon the maximum principal component hereunder as provided
12
in Exhibit A and an interest rate as provided in Exhibit A hereto),to insure against abatement of Lease
Payments caused by perils covered by the insurance required to be maintained as provided in Section 4.1
hereof.
(b) Joint Insurance. Such insurance may be maintained as part of or in conjunction with any
other rental income insurance carried by the Lessee.
(c) Payment of Net Proceeds. The Net Proceeds of such rental interruption insurance shall
be paid to the Bank to be credited towards the payment of the Lease Payments in the order in which such
Lease Payments come due and payable.
Section 4.3 General Insurance Provisions.
(a) Payment of Premiums. The Lessee shall pay or cause to be paid when due the premiums
for all insurance policies required by this Lease.
(b) Self Insurance. The Lessee may only self insure against the risks described in Section 4.1
hereof if and to the extent such self-insurance method or plan of protection shall afford reasonable
protection to the Bank in light of all circumstances,giving consideration to cost,availability and similar
plans or methods of protection adopted by other public agencies in the State other than the Lessee.
Insurance provided through a California joint powers authority of which the Lessee is a member or with
which the Lessee contracts for insurance shall be deemed to be self-insurance for purposes hereof. Any
self-insurance maintained by the Lessee pursuant to this Article IV shall comply with the following terms:
(I) The self-insurance program shall include an actuarially sound claims reserve
fund out of which each self-insured claim shall be paid; the adequacy of such
fund shall be evaluated on an annual basis by an independent insurance
consultant; and any deficiencies in any self-insured claims reserve fund shall be
remedied in accordance with the recommendation of such independent insurance
consultant;
(2) [Reserved]
(3) In the event that the self-insurance program shall be discontinued,the actuarial
soundness of its claims reserve fund, as determined by an independent insurance
consultant,shall be maintained.
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ARTICLE V
DAMAGE,DESTRUCTION AND EMINENT DOMAIN; USE OF NET PROCEEDS
Section 5.1 Application of Net Proceeds.
If Net Proceeds received by the Lessee are expected to equal at least 110%of the projected costs
of replacement or repair, as demonstrated in an attached reconstruction budget provided at the time,and,
in the event that damage,destruction or taking results or is expected to result in an abatement of Lease
Payments, such replacement or repair can be fully completed within a period not in excess of the period in
which rental interruption insurance proceeds,as described in Section 4.2 together with other identified
available moneys,will be available to pay in full all Lease Payments coming due during such period as
demonstrated in an attached reconstruction schedule provided at the time,then such Net Proceeds shall be
used by the Lessee to replace or repair the damaged or taken facilities.
If the Lessee cannot make the representations regarding repair or reconstruction in the paragraph
above or replacement or repair of any portion of the Leased Property is not economically feasible or in the
best interest of the Lessee,then the Net Proceeds shall be applied to prepayment of Lease Payments as
provided in Article IX hereof;provided that in the event of damage or destruction in whole of the Leased
Property and in the event such Net Proceeds,together with any other funds then on hand are not sufficient
to prepay all the Lease Payments then outstanding,then the Lessee shall not be permitted to certify that
repair,replacement or improvement of all of the Leased Property is not economically feasible or in the
best interest of the Lessee. In such event,the Lessee shall proceed to repair,replace or improve the
Leased Property as described herein from legally available funds in the then current Fiscal Year.
ARTICLE VI
COVENANTS WITH RESPECT TO THE LEASED PROPERTY
Section 6.1 Use of the Leased Property.
The Lessee represents and warrants that it has an immediate need for,and expects to make
immediate use of,all of the Leased Property to carry out and give effect to the public purposes of the
Lessee, which need is not temporary or expected to diminish in the foreseeable future.
Section 6.2 Interest in the Leased Property and the Lease.
(a) Bank Holds Leasehold Interest During Term. During the Term of this Lease,the Bank
does and shall hold an ownership interest in the Leased Property as lessor thereof. The Lessee shall take
any and all actions reasonably required, including but not limited to executing and filing any and all
documents reasonably required,to maintain and evidence such title and interest at all times during the
Term of this Lease.
(b) Title Transferred to Lessee at End of Term. Upon expiration of the Term as provided in
Section 3.2(b)or 3.2(c)hereof, all right, title and interest of the Bank in and to all of the Leased Property
shall be transferred to and vest in the Lessee,without the necessity of any additional document of transfer.
14
Section 6.3 Maintenance.Utilities.Taxes and Assessments.
(a) Maintenance;Repair and Replacement. Throughout the Term of this Lease,as part of
the consideration for the rental of the Leased Property, all repair and maintenance of the Leased Property
shall be the responsibility of the Lessee,and the Lessee shall pay for or otherwise arrange for the payment
of the cost of the repair and replacement of the Leased Property resulting from ordinary wear and tear or
want of care on the part of the Lessee or any sublessee thereof. In exchange for the Lease Payments
herein provided,the Bank agrees to provide only the Leased Property,as hereinbefore more specifically
set forth. The Lessee waives the benefits of subsections 1 and 2 of Section 1932 of the California Civil
Code,but such waiver shall not limit any of the rights of the Lessee under the terms of this Lease.
(b) Tax and Assessments; Utility Charges. The Lessee shall also pay or cause to be paid all
taxes and assessments,including but not limited to utility charges, of any type or nature charged to the
Lessee or levied,assessed or charged against any portion of the Leased Property or the respective
interests or estates therein;provided that with respect to special assessments or other governmental
charges that may lawfully be paid in installments over a period of years,the Lessee shall be obligated to
pay only such installments as are required to be paid during the Term of this Lease as and when the same
become due.
(c) Contests. The Lessee may,at its expense and in its name, in good faith contest any such
taxes,assessments,utility and other charges and,in the event of any such contest,may permit the taxes,
assessments or other charges so contested to remain unpaid during the period of such contest and any
appeal therefrom;provided that prior to such nonpayment it shall furnish the Bank with the opinion of an
independent counsel acceptable to the Bank to the effect that,by nonpayment of any such items,the
interest of the Bank in such portion of the Leased Property will not be materially endangered and that the
Leased Property will not be subject to loss or forfeiture. Otherwise,the Lessee shall promptly pay such
taxes,assessments or charges or make provisions for the payment thereof in form satisfactory to the Bank.
Section 6.4 Modification of the Leased Property.
(a) Additions,Modifications and Improvements. The Lessee shall,at its own expense,have
the right to make additions,modifications,and improvements to any portion of the Leased Property if
such improvements are necessary or beneficial for the use of such portion of the Leased Property. All
such additions,modifications and improvements shall thereafter comprise part of the Leased Property and
be subject to the provisions of this Lease. Such additions,modifications and improvements shall not in
any way damage any portion of the Leased Property or cause it to be used for purposes other than those
authorized under the provisions of State and federal law or in any way which would impair the State
tax-exempt status or the exclusion from gross income for federal income tax purposes of the interest
components of the Lease Payments;and the Leased Property, upon completion of any additions,
modifications and improvements made pursuant to this Section,shall be of a value which is not
substantially less than the value of the Leased Property immediately prior to the making of such additions,
modifications and improvements.
(b) No Liens. Except for Permitted Encumbrances,the Lessee will not permit(i)any liens or
encumbrances to be established or remain against the Leased Property or(ii)any mechanic's or other lien
to be established or remain against the Leased Property for labor or materials furnished in connection with
any additions,modifications or improvements made by the Lessee pursuant to this Section;provided that
if any such mechanic's lien is established and the Lessee shall first notify or cause to be notified the Bank
of the Lessee's intention to do so, the Lessee may in good faith contest any lien filed or established
against the Leased Property,and in such event may permit the items so contested to remain undischarged
15
and unsatisfied during the period of such contest and any appeal therefrom and shall provide the Bank
with full security against any loss or forfeiture which might arise from the nonpayment of any such item,
in form satisfactory to the Bank. The Bank will cooperate fully in any such contest.
Section 6.5 Permits.
The Lessee will provide all permits and licenses necessary for the ownership,possession,
operation, and use of the Leased Property,and will comply with all laws,rules,regulations,and
ordinances applicable to such ownership,possession,operation, and use. If compliance with any law,
rule,regulation,ordinance,permit,or license requires changes or additions to be made to the Leased
Property,such changes or additions will be made by the Lessee at its own expense.
Section 6.6 Bank's Right to Perform for Lessee.
If the Lessee fails to make any payment or to satisfy any representation,covenant,warranty,or
obligation contained herein or imposed hereby,the Bank may(but need not)make such payment or
satisfy such representation,covenant,warranty,or obligation, and the amount of such payment and the
expense of any such action incurred by the Bank,as the case may be,will be deemed to be additional rent
payable by the Lessee on the Bank's demand.
Section 6.7 Bank's Disclaimer of Warranties.
The Bank has played no part in the selection of the Leased Property,the Lessee having selected
the Leased Property independently from the Bank. The Bank,at the Lessee's request,has acquired or
arranged for the acquisition of the Leased Property and shall lease the same to the Lessee as herein
provided,the Bank's only role being the facilitation of the financing of the Leased Property for the
Lessee. THE BANK MAKES NO WARRANTY OR REPRESENTATION,EITHER EXPRESS OR
IMPLIED,AS TO THE VALUE,DESIGN,CONDITION,QUALITY,DURABILITY, SUITABILITY,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE
USE CONTEMPLATED BY THE LESSEE OF THE LEASED PROPERTY, OR ANY PORTION
THEREOF. THE LESSEE ACKNOWLEDGES THAT THE BANK IS NOT A MANUFACTURER OR
VENDOR OF ALL OR ANY PORTION OF THE LEASED PROPERTY,AND THAT THE LESSEE IS
LEASING THE LEASED PROPERTY AS IS. In no event shall the Bank be liable for incidental,direct,
indirect, special or consequential damages, in connection with or arising out of this Lease, for the
existence, furnishing, functioning or Lessee's use and possession of the Leased Property.
Section 6.8 Indemnification.
To the extent permitted by applicable law,the Lessee hereby agrees to indemnify and hold
harmless the Bank,its directors, officers,shareholders, employees, agents,and successors from and
against any loss,claim,damage,expense, and liability resulting from or attributable to the acquisition,
construction, or use of the Leased Property. Notwithstanding the foregoing,the Bank shall not be
indemnified for any liability resulting from the gross negligence or willful misconduct of the Bank.
Section 6.9 Annual Financial Information.
During the term of this Lease,the Lessee covenants and agrees to provide the Bank as soon as
practicable when they are available;(i) a copy of the Lessee's final annual budget for each fiscal year; (ii)
a copy of the Lessee's most recent financial statements; and(iii) any other financial reports the Bank may
request from time to time.
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ARTICLE VII
ASSIGNMENT AND SUBLEASING
Section 7.1 Assignment by the Bank.
The parties hereto agree that all rights of Bank hereunder may be assigned,transferred or
otherwise disposed of,either in whole or in part,provided that notice of any such assignment, transfer or
other disposition is given to Lessee.
Section 7.2 Assignment and Subleasing by the Lessee.
The Lessee may not assign this Lease or sublease all or any portion of the Leased Property unless
both of the following shall have occurred: (i)the Bank shall have consented to such assignment or
sublease; and(ii)the Bank shall have received assurance acceptable to the Bank that such assignment or
sublease: (A)is authorized under applicable state law,(B)will not adversely affect the validity of this
Lease,and(C)will not adversely affect the exclusion from gross income for federal income tax purposes
of the interest components of the Lease Payments.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default Defined.
The following shall be"events of default"under this Lease and the terms"events of default"and
"default"shall mean,whenever they are used in this Lease,any one or more of the following events:
(a) Payment Default. Failure by the Lessee to pay any Lease Payment required to be paid
hereunder by the corresponding Lease Payment Date.
(b) Covenant Default. Failure by the Lessee to observe and perform any warranty,covenant,
condition or agreement on its part to be observed or performed herein or otherwise with respect hereto
other than as referred to in clause(a)of this Section, for a period of 30 days after written notice
specifying such failure and requesting that it be remedied has been given to the Lessee by the Bank;
opr vided,however,if the failure stated in the notice cannot be corrected within the applicable period,the
Bank shall not unreasonably withhold their consent to an extension of such time if corrective action is
instituted by the Lessee within the applicable period and diligently pursued until the default is corrected.
(c) Bankruptcy or Insolvency. The filing by the Lessee of a case in bankruptcy,or the
subjection of any right or interest of the Lessee under this Lease to any execution,garnishment or
attachment,or adjudication of the Lessee as a banlwpt,or assignment by the Lessee for the benefit of
creditors,or the entry by the Lessee into an agreement of composition with creditors,or the approval by a
court of competent jurisdiction of a petition applicable to the Lessee in any proceedings instituted under
the provisions of the federal bankruptcy code,as amended,or under any similar act which may hereafter
be enacted.
17
Section 8.2 Remedies on Default.
Whenever any event of default referred to in Section 8.1 hereof shall have happened and be
continuing,it shall be lawful for the Bank to exercise any and all remedies available pursuant to law or
granted pursuant to this Lease. Notwithstanding anything herein to the contrary,THERE SHALL BE NO
RIGHT UNDER ANY CIRCUMSTANCES TO ACCELERATE THE LEASE PAYMENTS OR
OTHERWISE DECLARE ANY LEASE PAYMENTS NOT THEN IN DEFAULT TO BE
IMMEDIATELY DUE AND PAYABLE.
Section 8.3 No Remedy Exclusive.
No remedy conferred herein upon or reserved to the Bank is intended to be exclusive and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or
now or hereafter existing at law or in equity. 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. In order to entitle the Bank to exercise any remedy reserved to it in this Article it shall not be
necessary to give any notice,other than such notice as may be required in this Article or by law.
Section 8.4 Agreement to Pay Attorneys'Fees and Expenses.
In the event either party to this Lease should default under any of the provisions hereof and the
nondefaulting party should employ attorneys or incur other expenses for the collection of moneys or the
enforcement of performance or observance of any obligation or agreement on the part of the defaulting
party contained herein,the defaulting party agrees that it will pay on demand to the nondefaulting party
the reasonable fees of such attorneys and such other expenses so incurred by the nondefaulting party.
Section 8.5 Waiver of Certain Damages.
With respect to all of the remedies provided for in this Article VIII,the Lessee hereby waives any
damages occasioned by the Bank's repossession of the Leased Property upon an event of default.
ARTICLE IX
PREPAYMENT OF LEASE PAYMENTS
Section 9.1 Extraordinary Prepayment From Net Proceeds.
The Lessee shall be obligated to prepay the Lease Payments in whole or in part on any Lease
Payment Date, from and to the extent of any Net Proceeds or other moneys pursuant to Section 5.1
hereof. The Lessee and the Bank hereby agree that such Net Proceeds or other moneys shall be credited
towards the Lessee's obligations hereunder(except in the case of such prepayment of the Lease Payments
in whole)pro rata among Lease Payments so that following prepayment,the remaining annual Lease
Payments will be proportional to the initial annual Lease Payments.
18
Section 9.2 Prepayment.
Subject to the terms and conditions of this Section,the Bank hereby grants an option to the
Lessee to prepay in whole or in part on any Lease Payment Date at a prepayment price equal to the
outstanding principal component of the Lease Payments,without premium,plus the accrued interest
component of the Lease Payments to such prepayment date.To exercise this option, the Lessee must
deliver to the Bank written notice specifying the date on which the prepayment is to be made(the
"Closing Date"),which notice must be delivered to the Bank at least thirty(30)days prior to the Closing
Date specified therein.
ARTICLE X
MISCELLANEOUS
Section 10.1 Notices.
Unless otherwise specifically provided herein, all notices shall be in writing addressed to the
respective party as set forth below(or to such other address as the party to whom such notice is intended
shall have previously designated by written notice to the serving party), and may be personally served,
telecopied,or sent by overnight courier service or United States mail:
If to Bank:
Zions First National Bank
Public Financial Services
One South Main, 17th Floor
Salt Lake City,Utah 84111
Attention: Mark Tsuyuki
If to the Lessee:
City of Grand Terrace
22795 Barton Road
Grand Terrace, CA 92313
Attention: Steve Berry,Assistant City Manager
Such notices shall be deemed to have been given: (a)if delivered in person,when delivered;(b)if
delivered by telecopy,on the date of transmission if transmitted by 4:00 p.m.(Salt Lake City time) on a
Business Day or,if not, on the next succeeding Business Day; (c)if delivered by an overnight courier
service,two Business Days after delivery to such courier properly addressed;or(d)if by United States
mail, four Business Days after depositing in the United States mail,postage prepaid and properly
addressed.
19
Section 10.2 System of Registration.
The Lessee shall be the Registrar for this Lease and the rights to payments hereunder. The Bank
shall be the initial Registered Owner of rights to receive payments hereunder. If the Bank transfers its
rights to receive payments hereunder,the Registrar shall note on this Lease the name and address of the
transferee.
Section 10.3 Instruments of Further Assurance.
To the extent, if any,that the Bank's interest in the Leased Property as lessor under this Lease is
deemed to be a security interest in the Leased Property,then the Lessee shall be deemed to have granted,
and in such event the Lessee does hereby grant,a security interest in the Leased Property to the Bank,
which security interest includes proceeds,and this Lease shall constitute a security agreement under
applicable law. Concurrently with the execution of this Lease,the Lessee has executed,delivered, and
filed and/or recorded all financing statements,UCC forms,mortgages,deeds of trust,notices, filings,
and/or other instruments,in form required for filing and/or recording thereof,as are required under
applicable law to fully perfect such security interest of the Bank in the Leased Property(collectively,
"Security Documents"). Attached hereto as Exhibit E are copies of all such Security Documents. The
Lessee will do,execute, acknowledge,deliver and record,or cause to be done,executed,acknowledged,
delivered and recorded, such additional acts,notices,filings and instruments as the Bank may require in
its sole discretion to evidence,reflect and perfect the title,ownership,leasehold interest,security interest
and/or other interest of the Bank in and to any part or all of the Leased Property, including without
limitation the filing and/or recording of this Lease,to the extent necessary,promptly upon the request of
the Bank.
Section 10.4 Binding Effect.
This Lease shall inure to the benefit of and shall be binding upon the Bank and the Lessee and
their respective successors and assigns.
Section 10.5 Amendments.
This Lease may be amended or modified only upon the written agreement of both the Bank and
the Lessee.
Section 10.6 Section Headings.
Section headings are for reference only,and shall not be used to interpret this Lease.
Section 10.7 Severability.
In the event any provision of this Lease shall be held invalid or unenforceable by a court of
competent jurisdiction,to the extent permitted by law,such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 10.8 Entire Agreement.
This Lease and the attached Exhibits constitute the entire agreement between the Bank and the
Lessee and supersedes any prior agreement between the Bank and the Lessee with respect to the Leased
20
Property,except as is set forth in an Addendum, if any,which is made a part of this Lease and which is
signed by both the Bank and the Lessee.
Section 10.9 Execution in Counterparts.
This Lease may be executed in any number of counterparts,each of which shall be an original
and all of which shall constitute but one and the same instrument.
Section 10.10 Arbitration.
To the extent permitted by law,any dispute,controversy or claim arising out of or based upon the
terms of this Lease or the transactions contemplated hereby shall be settled exclusively and finally by
binding arbitration. Upon written demand for arbitration by any party hereto,the parties to the dispute
shall confer and attempt in good faith to agree upon one arbitrator. If the parties have not agreed upon an arbitrator within thirty(30)days after receipt of such written demand,each party to the dispute shall
appoint one arbitrator and those two arbitrators shall agree upon a third arbitrator. Any arbitrator or
arbitrators appointed as provided in this section shall be selected from panels maintained by,and the
binding arbitration shall be conducted in accordance with the commercial arbitration rules of,the
American Arbitration Association(or any successor organization), and such arbitration shall be binding
upon the parties. The arbitrator or arbitrators shall have no power to add or detract from the agreements
of the parties and may not make any ruling or award that does not conform to the terms and conditions of
this Lease. The arbitrator or arbitrators shall have no authority to award punitive damages or any other
damages not measured by the prevailing party's actual damages. Judgement upon an arbitration award
may be entered in any court having jurisdiction. The prevailing party in the arbitration proceedings shall
be awarded reasonable attorney fees and expert witness costs and expenses,unless the arbitrator or
arbitrators shall for good cause determine otherwise.
Section 10.11 Applicable Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of
California.
21
IN WITNESS WHEREOF,the Bank has caused this Lease to be executed in its name by its duly
authorized officer, and the Lessee has caused this Lease to be executed in its name by its duly authorized
officer, as of the date first above written.
ZIONS FIRST NATIONAL BANK,as Lessor
By
Title
CITY OF GRAND TERRACE, as Lessee
By
Aut ri O er
22
EXHIBIT A
SCHEDULE OF LEASE PAYMENTS
1. Interest.
Interest components have been computed at the rate of percent(%)per annum calculated based
on actual number of days elapsed during a 360 day year.
2. Payment Dates and Amounts.
SEE ATTACHED PAYMENT SCHEDULE,WHICH BREAKS OUT PRINCIPAL AND
INTEREST SEPARATELY.
1
CITY OF GRAND TERRACE
$170,000 Equipment Lease
Dated June 28, 2006
Lease Payment Schedule
Date Principal Coupon Interest Total P+I
12/012006 102912.60 4.840% 3,496 90 14,409.50
06/012007 10,559.59 4.840% 3,849 92 14,409.51
12/012007 10,815.13 4.840% 3,594.37 14,409.50
06/012008 11,076.86 4.840% 3,332.65 14,409.51
_ 12/012008 11,344.92 4.840% 3,064.59 10,409.51
06/01/2009 11,619.46 4.840% 2,790.04 142409.50
12/012009 11,900.65 4.840% 2,508.85 14,409.50
06/012010 12,188.65 4.840% 2,220.85 14,409.50
12/012010 12,483.61 4.840% 1,925.89 14,409.50
06/01/2011 12,785.72 4.840% 1,623.78 _ 14,409.50
12/012011 13,095.13 4.840% 1,314.37 14,409.50
06/012012 13,412.04 4.840% 997.47 14,409.51
12/012012 13,736.61 4.840% 672.90 14,409.51
06/01/2013 14,069.03 4.840% 340.47 14,409.50
Total $170,000.00 - $31,733.05 5201,733.05
Yield Statistics
Bond Year Dollars S655.64
—-- ---Avenge Life - 3.857 Years
Average Coupon 4_84000149°_
Net Interest Cost(NIC) 4.8400014%
True Interest CostATIC) 6.8410679°0
Bond Yield for Arbitrage Purposes 4 8410679%
All Inclusive Cost(AIC) _..._._...__ 4.8410679%
IRS Form 8038
Net Interest Cost 4.8400014%
Weighted Average Maturity 3.857 Years
LRY OF GRAND TERRACE I SINGLE PURPOSE 16V16Rn[6 I 3:17 PM
Ferrand Consulting Group, Inc.
Public Finance
EXHIBIT B
DESCRIPTION OF LEASED PROPERTY
See attached
Scope of Work:CONTRACTOR shall provide the following Equipment(as further defined in Section 18.4)and Services(as further defined in Section 18.5)
(collectively`the Work")in accordance with the attached work scope documents and terms and conditions Scope of Work(Attachment A)and General Terms
and Conditions, which font, a part of this Agreement. Services CONTRACTOR will provide under this Agreement specifically exclude inspection,
investigation,discovery,identification,prevention or remediation of Hazardous Substances(as defined in Section 18.1)or Mold(as defined in Section 18.2),
conditions caused by Hazardous Substances or Mold,or conditions that might cause or promote the accumulation, concentration,growth or dispersion of
Hazardous Substances or Mold.:
Under this Contractor Municipal Facilities Agreement, Contractor will replace the mechanical HVAC equipment
and mechanical controls listed below.
All new and exisitng equipment on attachment "A" will be comprehensively Serviced and Maintained under the
Contractor Municipal Facilities Agreement for a fixed schedule term of 10 years.
Scope of Work: Removal and Replacement of the following HVAC units:
A. Child Care Center—One (1)5-ton unit-Carrier Model#48HJM006
B. City Hall— Two (2) 10-ton units-Carrier Model#4811JD012
Three(3)5-ton units-Carrier Model#48HJM006
One (1)40-ton unit-Carrier Model#50-AK040-EQ51HH.
C. Fire Station— Two (2)4-ton units-Carrier Model#48HJM005
❑ Disconnect and dispose of nine (9) existing A/C units from existing curbs. Remove electrical, condensate drains, control
wiring,smoke detectors and ductwork if required.
O Furnish and install nine(9)new Carrier A/C units to existing curbs. Curb transitions will be provided if required. We will
provide two (2)pitched curbs for the 10-ton units, three (3)new disconnects for three (3) 5-ton units,Re-connect existing
electrical,condensate drains,control wiring, smoke detectors and ductwork if required.
❑ Evacuate refrigerant and remove per code and provide receipt to Contractor.
❑ Furnish and install new rigid ductwork per SMACNA standards.
O Private wage project.
❑ Rigging of new units.
❑ Start-up of new units.
❑ Material handling and Trucking.
❑ Mechanical Permit and cost if required.
O Labor and Supervision.
❑ Bond cost.
Note:All new units are equal or less in weight than the units being replaced.
Exclusions:
❑ All cutting,coring,sealing,patching and framing of roof for ductwork or piping penetrations.
❑ Electrical conduit,disconnects,starters,wiring or hook-up not stated above.
❑ No Premium time is included in this proposal.
❑ Combination smoke/fire dampers.
❑ No new DDC or V VT controls work are included in this proposal.
❑ Structural work or calculations.
❑ Fire life safety controls,time clocks and equipment interlocks.
❑ Asbestos abatement,encapsulation or work in asbestos environment.
❑ No insulation of existing ductwork, fittings,DX,CHW or HW piping is included in this proposal.
❑ Curb leveling devices,platforms or platform covers.
❑ Any existing HVAC code violations
❑ Any work below the roofline.
Replacment of the(13) remaining City Hall Mechanical Controls
Contractor will retrofit the remaining(13) electric VAV zone controls in the City Hall.
(13) 120V 9"LEADS 2 SECONDARY SCREW TERMINALS-TRADELINE
(13)ML7I74A2001 IN"CUSTOM PACK'
(13)VALVE DCA FOR V5011A&C,SELF-CONTAINED,SELF-ADJUSTING LINEAR ACTUATOR
(13)T7984C1 053,LOCAL THERMOSTAT
(13)1/2"NPT,2-WAY SCREWED VALVE 4.0CV D.A.,=%FLOW,SINGLE SEATED,ANSI150
Inhaled by Customer dale: Initialed by Contractor. date:
Page 1 of 13
(13)BRONZE BODY,40-250F,3/4"TRAVEL
Preferred Mechanical Maintenance Services
1.1 Scope-CONTRACTOR will maintain the mechanical systems,components,and hardware listed below:
List of Covered Equipment:
DESCRIPTION
List of Covered Equipment:
1 1 Library Roof Package Unit 10 Ton Carder
2 1 Meeting Room/Roof Package Una 10 Ton Carrier
3 1 Council Chambers/Roof Package Unit 5 Ton Carrier
4 1 City Hall Package Unit 5 Ton Carder
5 1 City Hall Package Unit 5 Ton Carrier
6 1 Admin/Roof Package Unit 40 Ton Carrier
7 1 Fire Station/Roof Package Unit 4 Ton Carrier
8 1 Fire Station/Roof Package Unit 4 Ton Carrier
9 1 Equipment Room Boiler 25HP Bryant
10 1 Equipment Room Pump 3HP Unknown
11 2 Equipment Room Pump 1HP Unknown
1 1 Child Care Package Unit 4 Ton Carder
2 1 Child Care Package Unit 5 Ton Carder
3 1 Child care Package Una 5 Ton Carrier
4 1 Child Care Package Unit 3 Ton Carder
5 I Child Care Package Unit 3 Ton Carrier
6 1 Childcare Electronic Time ClocN/A Unknown
1 2 Seniorcntr Split Unit 4 Ton Rheem
2 1 Senior Cnv Package Unit 4 Ton Carder
3 1 Senior Cntr Package Unit 2.5 Ton Carrier
4 1 Senior Cntr Electronic lime Cloc!N/A N/A
1.2 Preventive Maintenance - Each preventive maintenance call will be scheduled by a computer-generated service
report detailing the tasks to perform,the skill levels required,and the special tools and instrumentation required to maintain the
systems. Maintenance intervals will be determined by either equipment run time or a frequency determined from consideration
of equipment operation, application,location, or criticality of end use. Upon completion of each service call, a summary of the
preventive maintenance tasks completed will be provided to CUSTOMER.
13 Component Replacements - CONTRACTOR will maintain CUSTOMER'S presently installed system within the
functional limitations of presently installed hardware,firmware,and software found on CUSTOMER'S system(s).
CONTRACTOR will repair or replace serviceable components and parts found on the List of Covered Equipment that have
been found to be defective or have failed. Replaced components will be new or reconditioned components of compatible
design as required to maintain CUSTOMER'S system. At CONTRACTOR'S sole discretion, marginal components may also
be repaired or replaced. These replacements will be based upon commercial availability of parts and/or components. All
exchanged parts shall become the property CONTRACTOR. Automatic valve and damper maintenance and repair are included
in this Agreement.
Notwithstanding the foregoing, at initial inspection, at initial seasonal start-up, or following twelve(12) months of service, if
any individual component cannot, in the sole or exclusive opinion of CONTRACTOR, be properly repaired, due to
obsolescence, lack of commercial availability of standard parts, and/or excessive wear or deterioration, CONTRACTOR may
Proposal Number:
Page 2 of 13
remove said component from the List of Covered Equipment, with sixty (60) days written notice. Non-maintainable
components will be eliminated from coverage under this Agreement and CONTRACTOR shall adjust the price accordingly.
1.4 Emergency Service - Activities performed under this Agreement are designed to minimize the incidence of
emergency situations. However, should an emergency arise, CONTRACTOR personnel will assess the situation either by
phone or remote diagnostics, or both, and will determine the required course of action with CUSTOMER. If it is determined
that a site visit is required, CONTRACTOR personnel will arrive at CUSTOMER site within F.r ort-Heftroace sour—ot II
fetg&hours. If the resolution of the emergency service call requires CONTRACTOR to provide service for equipment that is
not listed in Article 1.1 above,CUSTOMER will be liable for charges prevailing for such service.
Emergency Service will be provided during the following periods during the term of this Agreement (check box for desired
level of emergency service coverage):
Continuous Emergency Service:
24 hours per day,seven days per week, federal holidays included
❑ Extended Hours Emergency Service:
12 hours per day,five days per week, federal holidays excluded.
Specified hours: 6:00 a.m.-6:00 p.m.,Monday through Friday.
❑ Regular Business Hours Emergency Service:
8.5 hours per day,five days per week,federal holidays excluded.
Specified hours: 8:00 ant-4:30 pm.,Monday through Friday.
1.5 Performance Review - A review of the Services provided within this Agreement will be performed by
CONTRACTOR on an annual basis at CUSTOMER'S request. CONTRACTOR and CUSTOMER will discuss work
performed since the last review, answer questions pertaining to Service delivery, and identify opportunities to further improve
performance of the Equipment.
1.6 Contractor ServicePortal—CONTRACTOR will provide customer access to an Internet-based application that will
allow the CUSTOMER to securely submit non-emergency service requests online; view status of all service calls, whether
scheduled,open or closed;view appointments and task detail of work performed on contracted service calls;and view contract
and equipment coverage details (12 month history and includes only service performed per the CONTRACTOR contract).
Functionality enhancements or deletions are at the discretion of CONTRACTOR.
Proposal Number:
Page 3 of 13
Air Filter Services
1.1 Scope - CONTRACTOR will famish and install air filters appropriate for the design condition of CUSTOMER'S
ventilation systems. Media for the fan system units listed in this section will be replaced according to the following schedule:
List of Covered Equipment:
Changes per year
AC Equipment Quantity Size 11 Type (1,2,4,6,or 12)
Units 1-17 44 2x20x30 Pleated 6
1.2 Coverage-It is understood that the air filter media replacement services apply only to the fan system units listed in
Article 1.1 above. If this Agreement is terminated, CONTRACTOR will remove any CONTRACTOR-supplied frames from
the facility,or offer CUSTOMER the opportunity to purchase them at the current market value.
1.3 Frequency of Air Filter Media Replacement - Should filter loading experience indicate a need to adjust the
frequency of media changes for the fan systems listed in Article 1.1 above, the frequency will be changed, and the Agreement
amended to reflect the new media change frequency. The Agreement price will be adjusted to account for the revised media
change frequency.
1.4 Performance Review - A review of the Services provided within this Agreement will be performed by
CONTRACTOR on an annual basis at CUSTOMER'S request. CONTRACTOR and CUSTOMER will discuss work
performed since the last review, answer questions pertaining to Service delivery, and identify opportunities to further improve
performance of the Equipment.
Contract Effective Date:
Periodic Payment:(See Attachment B),(plus applicable taxes)
Payment Terms: Quarterly in Advance
Number of Payments: 40 payments
Contract Term:_Ten_ L10j years from the Contract Effective Date. Customer Contractor (INITIALS)
Submitted by CONTRACTOR:(signature)
Name:
Title:
Date:
This proposal is valid for 30 days.
Acceptance:This proposal and the pages attached shall become an Agreement in accordance with Article 13 below and only upon signature below by an
authorized representative of CONTRACTOR and CUSTOMER.
Accepted by:
CONTRACTOR CUSTOMER:
Signature: Signature:
Name: Name:
Title: Title:
Date: Date:
Proposal Number:
Page 4 of 13
General Terms and Conditions 42 CUSTOMER is responsible for maintaining its own liability and property
insurance at levels at least corresponding to the levels in 4.1.CUSTOMER shall
1. WORKING HOURS keep the Equpment insured against all risks of loss or damage fromevery
cause whatsoever for an amount equal to or greater than the Termination
Unless othenvse stated,all Work under this Agreement MI be performed during the hours of Amount(as defined in Section 17.4),and shall provide evidence thereof to
8:00 a.m.-4:30 p.m.local time Monday through Friday,exdudir federal holidays. If for any CONTRACTOR.
reason CUSTOMER requests CONTRACTOR to furnish Work a Aside of the hours of 8:00
am.-4:30 p.m.local time Monday through Friday(or on federal holidays),any overtime or 4.3 Risks ofLoss - CUSTOMER shall beer all risks of loss or damage to the
additional expenses,suit as repairs or material costs not inducted in this Agreement will be Equipment from any cause from the dale of the shipment of the Equipment to
billed to and paid by CUSTOMER. the CUSTOMER. The omnrence of any such loss or damage shall not relieve
the CUSTOMER of any obligation hereunder,including the obligation to
2. TAXES continue to make all payments hereunder. CUSTOMER shall notify
CONTRACTOR of any damage to or destruction of the Equipment In the event
The parties to this Agreement contemplate that the Equipment will be used solely for a of loss or damage,CUSTOMER,at CONTRACTOR's sole option,shall:(a)
governmental of proprietary purpose of the CUSTOMER and therefore,the Equipment will repair the damaged Equipment or b)replace lost orunrepairable Equipment.
be exempt fmm all taxes presently assessed and levied with respect to personal proper. In
the event the use.pnswsain,ownership or acquisition of the Equipment is fond to be 5. HAZARDOUS SUBSTANCES,MOLD AND UNSAFE WORKING CONDITIONS
subject to taxation in any form,CUSTOMER vol pay during the Contact Term as the same
come due,all taxes and governmental charges of any kind whatsoever that may at any time 5.1 Suspension and Termination on Discovery of Hazardous Substances or Mold.
be lawfully assessed or levied against or with respect to the Equipment and to the extent CONTRACTOR has the right to suspend performance of is Services under this Agreement if
permitted by law,file all required tax forms,returns and reports relating thereto and will CONTRACTOR discovers or otherwise becomes aware of Hazardous Substances or Mold,
provide CONTRACTOR with proof of filing and payment thereof. or conditions CONTRACTOR reasonaby believes may cause Hazardous Substances or
Mold to be released,accumulated,concentrated or dispersed at a Site,under dwmstances
3. PROPRIETARY INFORMATION that CONTRACTOR reasonably believes may be hazardous,violate applicable laws,orgse
rise to claims of any khd against CUSTOMER or CONTRACTOR ('Adverse
3.1 All proprietary information(as defined herein)obtained by CUSTOMER from Ciwmstancesi. If CONTRACTOR suspends performance under this Section,
CONTRACTOR in connection with this Agreement will remain the property of CONTRACTOR is not obligated to continue is Services until CUSTOMER provides evidence
CONTRACTOR.and CUSTOMER wO not divulge such Information to any third party without that Hazardous Substances or Mold do not exist at the Site under Adverse Circumstances.
prbrwritten consent of CONTRACTOR. The term'proprietary information"means written CONTRACTOR has the right to terminate this Agreement with respect to any Site
information(or oral information reduced to writing),or information In machine-readable form, immediately upon delemanatlon that Hazardous Substances or Mold are present at the Site
Including but not limited to software supplied to CUSTOMER,which CONTRACTOR deems under Adverse Circumstances that CUSTOMER cannot or MI not remove or otherwise
proprietary or antitlental and characterizes as proprietary at the time of disclosure to remediate within slaty (60) days after discovery. The right to suspend or terminate
CUSTOMER by marking orlabehg the same'Pmprietary,'Confdantial',or'Sensitie'.The performance under the Sections solely for the benefit of CONTRACTOR. Nothing in this
CUSTOMER shall incur no obligations hereunder with respect to proprietary information Section shall be construed to require CONTRACTOR to discover or report Hazardous
whidn:(a)was in the CUSTOMERS possession Cr was known to the CUSTOMER prior to its Substances,Mold or Adverse Circumstances. Failure of CONTRACTOR to discover,report
receipt from CONTRACTOR;(b)is indepandentiy developed by the CUSTOMER without the or suspend or terminate upon discovery of Hazardous Substances, Moth or Adverse
utilization of suds proprietary informaton of CONTRACTOR;(a)is or becomes public Circumstances,will not relieve CUSTOMER of its indemnification obligations under Section
knowledge through no fault of the CUSTOMER;(die or becomes available to the 5.7 of this Agreement.
CUSTOMER from a source other than CONTRACTOR;(ale or becomes avertable on an
unrestricted base to a third party from CONTRACTOR or from someone acting under its 5.2 Except as discussed below,CUSTOMER represents and warrants that at the
control. Sites where CONTRACTOR will undertake Wok, there are no Hazardous Substances,
except those generated, labeled, stored, used, and disposed in strict accordance with
3.2 CUSTOMER agrees that CONTRACTOR may use nonproprietary information applicable law.
pertaining to the Agreement and the Work performed under the Agreement,for press
releases,case studies,data analyse,promotional purposes,and other similar documents or 5.3 CUSTOMER has not observed or received notice from any source(including
statements to be publicly released,as long as CONTRACTOR submits any such document wido(/l limitation formal or informal complaints of employees or visitors)of(a)Hazardous
or statement to CUSTOMER for is approval,which MI not be unreasonably withheld. Substances or Mold, either airborne or on or within the walls, floors, ceilings, heating,
ventilation and air conditioning systems,thumbing systems.structure,and other components
4. INSURANCE OBLIGATIONS of the Site.or within fumihre,fixtures,equipment,containers or pipelines h a Site;or(b)
conddbns that to CUSTOMER'S knowledge, might cause or promote accumulation,
4.1 CONTRACTOR shall,at its own expense,cany and maintain in force at all times concentration,growth or dispersion of Hazardous Substances or Mold on or within such
from the effective date of the Agreement through final completion of the Work the following locations.
insurance. It is agreed,however,that CONTRACTOR has the right to insure or self-insure
any of the insurance coverage listed below: 5.4 In areas in which CONTRACTOR will be performing its Work, there are no
conditions or dwmotances subject to seedal precautions or equipment required by federal,
(a) Commercial General Liability Insurance to include contractual liastiy, state or local health or safety regulations or unsafe working conditions.
products/completed operations liabMtty with a combined single limit of USD
$5,000,000 per occurrence. Such policywitl bewrillm on an occurrence form Exceptions to Representations and Warranties in 5.1,5.2,and 5.3:
basis;
(b) If automobiles are used in the execution of the Agreement AubmoMe Liability
Insurance with a minimum combined single limit of USD$5.000,000 per
occurrence. Coverage will include all owned,leased,non-owned and hired CUSTOMER shall notify CONTRACTOR of any changes in conditions or regulations that
vehicles. occur during the course of the Agreement that affect the foregoing representations and
(c) Where applicable, Risk'Property Insurance,including Builders Risk insurance, warranties,including without limitation discovery of Hazardous Substances or Moth at a Site.
for physical damage to proper who't is assumed in the Agreement
(d) Workers'Compensation Insurance Coverage A-Statutory limits and Coverage B- 5.5 CUSTOMER acknowledges that CUSTOMER has not retained CONTRACTOR
Employer's Liability Insurance with Omits of USD$1,000,000 for bodily injury each to discover, inspect investigate. identify, prevent or remedate Hazardous Substances or
accident or disease. Mold,conditions caused by Hazardous Substances or Mold,or conditions that might muse
or promote accumulation.concentration,growth or dispersion of Hazardous Substances or
Prior to the commencement of the Agreement CONTRACTOR will furnish evidence of said Mold.CUSTOMER agrees that CONTRACTOR is not responsible for any such discovery,
insurance coverage in the farm of a Memorandum o Insurance which is accessible at inspection,investigation,Identification,prevention or remedition,or for any damages arising
httotrelaces.Conlractor.coMmol. All insurance required in the section will be written by from or related to the existence of Hazardous Substances or Mold at a Site.
companies with a rating of no less than'A-,XII"by A.M.Best or equivalent rating agency.
CONTRACTOR will endeavor to provide a thirty(30)day notice of cancellation or non- 5.6 CUSTOMER acknowledges that the operation of the Covered Equipment (as
renewal to the CUSTOMER. In the event that a self-insured program is implemented, defined in Section 18.3)may control or affect temperature,humidity,and ventilation at the
CONTRACTOR will provide adequate proof of financial responsibility, Site, which may adversely affect accumulation, concentration, growth or dispersion of
Hazardous Substances or Mold,whether or not there are defects in the Covered Equipment
Inhaled by Customer date: Initialed by Contractor: date:
Page 5 of 13
or the Services.CUSTOMER agrees that CONTRACTOR S responsible for maintaining the performance of the Wok required under this Agreement provided tat such indemnity
Covered Equgment in a good working order In accordance with manufacturers obligation is vaNd only to the extent(i)CUSTOMER gives CONTRACTOR immediate notice
specifications and recommendations,but CONTRACTOR is not responsible for determining in writing of any such dains and permits CONTRACTOR,through counsel of its choice and
whether the Covered Equipment or the temperawre,humidity and ventilation settings used CONTRACTOR'S sole cost and expense,to answer the claims and defend any related sut
by CUSTOMER, are appropriate for CUSTOMER and the Site except as specifically and(ii)CUSTOMER gives CONTRACTOR all needed information.assistance and authority,
provided n an alached Scope of Work(Attachment A).CONTRACTOR S not responsible at CONTRACTORS expense,to enable CONTRACTOR to defend such sit
for any adverse affects of temperahtre,humidity and ventilation conditions created by the CONTRACTOR is not responsible for any settlement without its written consent
Covered Equipment. CONTRACTOR Is not liable for loss or damage caused by the negligence of CUSTOMER or
any other parry or such perils employees or agents.This obligation shall survive terrmation
5.7 TO THE FULLEST EXTENT ALLOWED BY LAW, CUSTOMER SHALL of this Agreement. Notwithstanding the foregoing,CUSTOMER agrees that CONTRACTOR
INDEMNIFY AND HOLD CONTRACTOR HARMLESS FROM AND AGAINST ANY AND ALL will not be responsible for any damages caused by Mold or any other Nngus or biological
CLAIMS AND COSTS OF WHATEVER NATURE, INCLUDING BUT NOT LIMITED TO, material or agent Including but not limited to property damage,personal injury,loss of
CONSULTANTS' AND ATTORNEYS' FEES, DAMAGES FOR BODILY INJURY AND income,emotional distress,death,loss ofuse,loss of value,adverse heath effect or any
PROPERTY DAMAGE, FINES, PENALTIES. CLEANUP COSTS AND COSTS special,consequential,punitive,exemplary or other damages,regardless of whether such
' ASSOCIATED WITH DELAY OR WORK STOPPAGE, THAT IN ANY WAY RESULTS damages may be caused by or otherwise associated with defects In the Work
FROM OR ARISES UNDER THE BREACH OF THE REPRESENTATIONS AND
WARRANTIES IN THIS SECTION 5, THE EXISTENCE OF MOLD OR A HAZARDOUS D. LIMITATION OF LABII ITT
SUBSTANCE AT A SITE.OR THE OCCURRENCE OR EXISTENCE OF THE SITUATIONS
OR CONDITIONS DESCRIBED IN THIS SECTION 5.WHETHER OR NOT CUSTOMER 8.1 IN NO EVENT SHALL CONTRACTOR BE LIABLE FOR ANY SPECIAL,
PROVIDES CONTRACTOR ADVANCE NOTICE OF THE EXISTENCE OR OCCURRENCE INCIDENTAL,INDIRECT.SPECULATIVE,REMOTE,CONSEQUENTIAL,PUNITIVE OR
AND REGARDLESS OF WHEN THE HAZARDOUS SUBSTANCE OR OCCURRENCE IS EXEMPLARY DAMAGES,WHETHER ARISING OUT OF OR AS A RESULT OF BREACH
DISCOVERED OR OCCURS. THIS INDEMNIFICATION SHALL SURVIVE TERMINATION OF CONTRACT,WARRANTY,TORT(INCLUDING NEGLIGENCE),STRICT LIABILITY,
OF THIS AGREEMENT FOR WHATEVER REASON. NOTHING IN THIS SECTION 5 MOLD,MOISTURE,INDOOR AIR QUALITY.OR OTHERWISE,ARISING FROM,
SHALL BE CONSTRUED TO REQUIRE THAT CUSTOMER INDEMNIFY AND HOLD RELATING TO,OR CONNECTED WITH THE SERVICES,EQUIPMENT.MATERIALS,OR
HARMLESS CONTRACTOR FROM CLAIMS AND COSTS RESULTING FROM THE ANY GOODS PROVIDED HEREUNDER.
NEGLIGENT USE BY CONTRACTOR OF ANY HAZARDOUS SUBSTANCE BROUGHT TO
THE SITE BY CONTRACTOR (AND CUSTOMER ACKNOWLEDGES THAT 8.2 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
CONTRACTOR MAY BRING TO THE SITE LUBRICANTS OR OTHER MATERIALS THAT CONTRACTORS TOTAL LIABILITY ARISING OUT OF OR AS A RESULT OF ITS
ARE ROUTINELY USED IN PERFORMING MAINTENANCE AND THAT MAY BE PERFORMANCE UNDER THIS AGREEMENT SHALL NOT EXCEED THE AMOUNT
CLASSIFIED AS HAZARDOUS). PAYABLE TO CONTRACTOR UNDER THIS AGREEMENT.
5.8 CUSTOMER S responsible for the containment of any and ail refrigerant stored 9. EXCUSABLE DELAY$,
on or about the Site. CUSTOMER accepts all responsthliy for and agrees to indemnify
CONTRACTOR against any and all claims.damages,or causes of action that arise out of CONTRACTOR is not liable for damages caused by delay or insrmption in the Work due to
the storage,consumption,loss and/or deposal of refrigerant,except to the extent fire,flood.conosh a substances in the air,strike,lockout,dispute with workmen,inability to
CONTRACTOR has brought refrigerant onste and is directly and solely negligent for is obtain material or services.commotion.war,acts of God,the presence of Hazardous
mishandling. Substances or Mold,Of any other cause beyond CONTRACTORS reasonable control.
Should any part of the system or any Equipment be damaged by fire,water,lightning.acts of
6. WARRANTY AND LIMRATION OF LIABILITY God,the presence of Hazardous Substances or Mold third parties a any other cause
beyond the ontrd of CONTRACTOR,any repairs or replacement will be paid for by
6.1 CONTRACTOR will replace or repair any Equipment CONTRACTOR provides CUSTOMER.In the event of any such delay,date of shipment or performance will be
under this Agreement that fails Whin the warranty period(one)1 year because of defective extended by a period equal to the time lost by reason of such delay,and CONTRACTOR will
workmanship Of materials.except to the extent the failure results from CUSTOMER be entitled to recover from CUSTOMER Its reasonable costs.overhead,and profit arising
negligence,or from fire lighthing,water damage or any other cause beyond the control of from such delay;provided however,in no event shall such events delay CUSTOMER's
CONTRACTOR. This warranty applies to all Equipment CONTRACTOR provides under this obligations to make payments hereunder.
Agreement whether or not manufactures by CONTRACTOR. The warranty S°Rectve as of
the date of CUSTOMER acceptance of the Equipment or the date CUSTOMER begins 10, PATENT INDEMNITY
beneficial use of the Equipment whichever occurs firm.
10.1 CONTRACTOR shalt at its expense,deiced or,at its option,settle any suit that
6.2 THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE.AND may be instituted against CUSTOMER for alleged Infringement of any United States patents
CONTRACTOR EXPRESSLY DISCLAIMS AND CUSTOMER EXPRESSLY WAIVES ALL relates to the Equipment manufactured and provided by CONTRACTOR under this
OTHER WARRANTIES,WHETHER WRITTEN OR ORAL,IMPLIED OR STATUTORY, Agreement,provided that a)such alleged infringement consists only in the use of such
INCLUDING BUT NOT LIMITED TO,ANY WARRANTY OF WORKMANSHIP, Equipment by itself and not as part of,or in combination with,any other devices,parts or
CONSTRUCTION,MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, software not provided by CONTRACTOR hereunder,b)CUSTOMER gives CONTRACTOR
WITH RESPECT TO THE SERVICES AND EQUIPMENT PROVIDED HEREUNDER. immediate notice In writing of any such suit and permits CONTRACTOR,through counsel of
CONTRACTOR SHALL NOT BE LIABLE FOR AM'PROPERTY DAMAGE,PERSONAL is choice,to answer the charge of infringement and defend such sut and c)CUSTOMER
INJURY,LOSS OF INCOME,EMOTIONAL DISTRESS.DEATH,LOSS OF USE.LOSS OF gives CONTRACTOR all needed information,assistance and authority,at CONTRACTORS
VALUE,ADVERSE HEALTH EFFECT OR ANY SPECIAL,INCIDENTAL,INDIRECT, expense,to enable CONTRACTOR to defend such sut
SPECULATIVE,REMOTE,CONSEQUENTIAL PUNITIVE,OR EXEMPLARY DAMAGES,
ARISING FROM,OR RELATING TO,THIS LIMITED WARRANTY OR ITS BREACH. 10.2 If such a suit has occurred,or in CONTRACTORS opinion S likely to ocour,
CONTRACTOR may,at its election and expense:a)obtain for CUSTOMER the right to
6.3 CONTRACTOR makes no representation or warranty,express.implied or continue using such Equipment b)replace,correct or modify it so that it s not infringing;or
otherwise,regarding Hazardous Substances or Mold. CONTRACTOR shall have no duty. c)remove such Equipment and grant CUSTOMER a aedtthehfae,as depredated.
obligation or liability,all of which CUSTOMER expressly waives.or any damage ordaim,
whether known or unknown,including but not limited to properly damage.personal injury, 10.3 In the case of a final award of damages in any such suit,CONTRACTOR will
loss of Income,emotional distress.death,loss of use,loss of value.adverse heath effect or pay such award. CONTRACTOR will not however,be responsible for any settlement made
any spedal,consequential punitive.exemplary or other damages,regardless of whether without is write consent.
such damages may be caused by orothewvise associated with defects In the Services,in
whole or in part due to or arising from any investigation,testing,analysis,monitoring, 10.4 THIS ARTICLE STATES CONTRACTOR'S TOTAL LIABILITY AND
cleaning,removal,disposal,abatement remediation,decontamination,repair,replacement CUSTOMER'S SOLE REMEDY FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF
relocation.loss of use of buYJing,or equipment and systems,or personal Injury,death or ANY PATENT BY THE HARDWARE MANUFACTURED AND PROVIDED BY
disease in any way associated with Hazardous Substances or Mold. CONTRACTOR HEREUNDER.
7. INDEMNITY 11. SOFTWARE LICENSE
CONTRACTOR agrees to indemnify and hold CUSTOMER and its agents and employees All software provided in connection with this Agreement shall be licensed and not dd. The
harmless from all claims for bodily injury and properly damages to the extent such claims enduser of the software will be required to sign a license agreement with pov'abra liming
result from or arise under CONTRACTOR'S negligent actions or willful misconduct in its use of the software to the Equipment provided under these spc/ atons,liming copylg,
Proposal Number:
Page 6 of 13
preserving confidentially,and prohibiting transfer to a third party. Licenses of this type are interest in the Equipment. CUSTOMER hereby authorizes CONTRACTOR or its assignees,
standard or computer-based equipment of the type covered by this Agreement to cause this Agreement or any statement or other instrument in respect to this Agreement
CUSTOMER sham be expected to grant CONTRACTOR access to the end user for purposes including Uniform Commercial Code financing statements,to be filed or recorded,and grants
of obtaining the necessary software license. CONTRACTOR or its assignees the right to execute CUSTOMER's name thereto.
12. DISPUTE RESOLUTION 15. COVERAG3
With the exception of any controversy or claim arising out of or related b the installation, 15.1 CUSTOMER agrees to provide access to all Covered Equipment
monitoring,and/or maintenance of fire and/or security systems,the Parties agree that any CONTRACTOR will be free to start and stop all primary equipment incidental to the operation
conboversy ordaim between CONTRACTOR and CUSTOMER arising out of of relating to of the mechanical,control.automation and life safety system(s)as arranged with
the Work provided under this Agreement or the breath tiered,will be settled by arbitration CUSTOMERS representative.
in a neutral venue,conducted in accordance with the Construction Industry Arbitration Rules
of the American Arbitration Association. The parties agree that such settlement shall not 15.2 CONTRACTOR will not reload software,nor make repairs or replacements
affect CUSTOMER'S oblation to pay the obligations pursuant to Section 16. Any award necessitated by reason of negligence or misuse of the Equipment by persons other than •
rendered by the arbitrator will be final,and judgment may be entered upon A In accordance CONTRACTOR or its employees.or caused by lightning,electrical storm.or other violent
with applicable law h any court having jurisdiction thereof Any controversy or claim arising weather or by any other cause beyond CONTRACTOR'S control. CONTRACTOR will
out of or related to the Installation monitoring,andon maintenance of systems associated provide such services at CUSTOMER'S request and at an additional charge. CUSTOMER is
with security and/or the detection of,and/or reduction of risk of loss associated with fire will entitled to receive CONTRACTOR'S then current preferred-CUSTOMER labor rates for such
be resolved in a court of competentjurisdicton. services.
13. ACCEPTANCE OF THE AGREEMENT 15.3 CONTRACTOR may Instill diagnostic devices and/or software at CONTRACTOR'S
expense to enhance system operation and support Upon termination of this Agreement,
The Proposal to which these General Terms and Conditions are attached shall become an CONTRACTOR may remove these devices and return the system to it original operation.
agreement only upon signature above by CONTRACTOR and CUSTOMER.The terms and CUSTOMER agrees to provide,at is sole expanse,connection to the switched telephone
conditions of the Agreement are expressly limited to the provisions of the Proposal, these network for the diagnostic devices and/or software.
General Terms and Conditions and AtrachmensA and B hereto.notwithstanding receipt of
orad owledgment by,CONTRACTOR of any purchase order,specification,orother 15.4 This Agreement assumes that the systems and/or Covered Equipment included
document issued by CUSTOMER.Any additional or different terms set brth or referenced in in the Scope of Work(Attachment A)are in maintainable condition.unless otherwise noted.
CUSTOMERS purchase order are hereby objaded to by CONTRACTOR and shall be If repairs are necessary upon initial inspection or initial seasonal start-up,repatr charges will
teened a material alteration of these tenor and sham not be a part of any resulting be submitted for approval. Should these charges be declined those non-maintainable'trams
Agreement. will be eliminated from coverage under this Agreement and the price adjusted accordingly.
14. MISCELLANEOUS 15.5 In the event that the system or any equipment component thereof is altered,
modified changed or moved this Agreement may be immediately adjusted or terminated,at
14.1 TM Proposal,General Terms and Conditions and Attachments A and B hereto CONTRACTOR'S sot option. CONTRACTOR is not responsible for any damages resulting
represent the entire Agreement between CUSTOMER and CONTRACTOR for the Work from such alterations,modifications,changes or movement
deathbed herein and therein and supersedes all Oa negotiations,representations or
agreements between the Parties related to the Work described herein. 15.6 CONTRACTOR is rot responsible for maintaining a supply of,fumishhg and/or
replacing lost or needed chlorofuomcarbon(CFC)based refrgerans not otherwise required
14.2 None of the provisions of this Agreement shall be modified,altered,changed or under this Agreement CUSTOMER is solely responsible ter the cost of material and labor at
voided by any subsequent purchase order or other document unilaterally issued by any such refrigerant not otherwise provided for under this Agreement at current market rates.
CUSTOMER that relates to the subject matter of this Agreement This Agreement may be
amended only by written Instrument signed by both Parties. 15.7 Unless otherwise specifies,CUSTOMER retains all responsibility for maintaining
LANs,WAN%leased lines and/or other communication mediums incidental or essential to
14.3 This Agreement is governed by the law of the State where the Work is to be the operation of thesystem(s)or Equipment found included in the attached List of Covered
performed. Equipment.
14.4 Any provision or pas of this Agreement held to be void or unenforceable under 15.8 CUSTOMER will promptly nosy CONTRACTOR of any llaluncton in the
any laws or regulations will be deemed thicken,and all remaining provisions wit continue to system(s)or Equipment covered under this Agreement that comes to CUSTOMERS
be valid and binding upon CONTRACTOR and CUSTOMER,who agree that this Agreement attention.
shall be reformed to replace such slacken provsbn a pad thereof with a valid and
enforceable provision that comes as dose as possible to expressing the intention of the 16.TERMS OF PAYMENT
slacken provision.
16.1 Notwithstanding anything in Section 20 to the contrary and except for Non
14.5 CUSTOMER may not assign is rights o delegate 8s obligations under this Appropriation,CUSTOMER wiv pay or cause to be paid to CONTRACTOR the full price for
Agreement in whole or in part without the prior written consent of CONTRACTOR. the Work in the amounts and at the times specified in Attachment B to this Agreement.
CONTRACTOR will submit invoices to CUSTOMER in advance and payment shall be due
14.6 Assignment by CONTRACTOR within twenty(20)days after CUSTOMER'S receipt of each such invoice. Payment for the
Work past due more than five(5)days shall amine interest from the due date to the date of
(a) CUSTOMER acknowledges and agrees that CONTRACTOR may assign any payment at the rate of one and one-half percent(1.5%)per month,compounded monthly,or
rights,entitlement, indemnifications or interests in.under or in relation to this the highest legal rate then allowed. CUSTOMER will pay all attorney and%or collection fees
Agreement or the Equipment indudhg without limitation the right to receive incurred by CONTRACTOR in collecting any past due amounts.
any payments from CUSTOMER.
(b) Upon request by CONTRACTOR. CUSTOMER will cooperate with 16.2 Except for Nonappropriason.CUSTOMER acknowledges and agrees it has no
right to make partial prepayments hereunder or to terminate or cancel this Agreement in pad
CONTRACTOR in relation to any such assignment, including, without during the Contract Term.
limitation,by executing any d uments or agreements reasonably necessary to
give effect to the proposed assignment. 16.3 Except or Nona pompations CUSTOMER'S obligationsoteto make paymentsand
CUSTOMER's yother monetary obligations hereundercc are aim for and
unconditional and are
(c) CUSTOMER
shall not refuse to execute
to any documents or agreementsthement whichu not subject to any abatement,selatt,defense or carhterdaim fa any reason whatsoever.
are not materially less favourable to CUSTOMER than the document
disclosed to CUSTOMER at the date of this Agreement 16.4 CUSTOMER represents that the obligation of the CUSTOMER to pay the
payments hereunder shall constitute an expense of the CUSTOMER and shall not In any
14.7 Title way be construed to be be a debt of the CUSTOMER in contravention of any applicable
constitutional or statutory limitations or requirements concerning the creation of indebtedness
Title to the Equipment will pass to CUSTOMER upon del'ery. To secure its obligations
the CUSTOMER,nor shall anything contained In the Agreement constitute pledgeof
under this Agreement,CUSTOMER hereby grants to CONTRACTOR a first priority security the general lox revenues,funds or monies of the CUSTOMER.
Proposal Number:
Page 7 of 13
165 CUSTOMER,by signing this Agreement certifies that all (a) CUSTOMER will pay to CONTRACTOR on the date of the termination of this
payments in excess of Agreement the Termination Amount as specified on Attachment B Schedule of
zero due under Attachment B Schedule of Payments and Temiination through the end of the Payments and Termination(Termination Amount).
CUSTOMER'S first fiscal year in which this Agreement commences are or will be available In
an unexhausle ,unencumbered apgopdation for payment thereof. CUSTOMER reasonably (b) The parties ad odedge that the Temnatien Amount constitutes a genuine
believes that funds can be obtained sufficient to make all subsequent fiscal year payments estimate of the loss suffered by CONTRACTOR and/or its assigns,as a result
during the Contract Term and hereby covenants that twill do all things lawfully within its of the termination of this Agreement
poxes to obtain,maintain and property request and pursue funds from which the payments
may be made,including making provisions forsurh payments to the extent necessary or (c) Upon payment of the Termination Amount CONTRACTOR and / or its
desirable in each budget submitted by the CUSTOMER for the purpose of obtaining funding, assignees will release any liens on the Equipment
using its bona Me best efforts to have such potion of each such budget approved and
exhausting all available administrative reviews and appeals in the event such portion of any 18. DEFINITIONS
such budget in not approved.
18.1 'Hazardous Substance"indudes all of the following,and any byyraduct of or
17,TERMINATION from any of the following, whether nafurely ocuning or manufactured, in quantities,
conditions or concentrations that have,are alleged to have,or are believed to have an
17.1 CUSTOMER may termnate this Agreement for cause H CONTRACTOR defaults adverse effect on human health.habitability of a Site,or the environment(a)any dangerous,
in the pedorTapce of any material term of this Agreement or fait or neglects to carry hazardous or toxic pollutant contamlant chemical, material or substance defined as
forward the Work in accordance with this Agreement after giving CONTRACTOR written hazardous or toxic or as a pollutant or contaminant under state or federal law, (b) any
notice of its intent to terminate.t,within thiry(30)days following receipt of such notice, petroleum product nuclear fuel or material, carcinogen, asbestos, urea formaldehyde,
CONTRACTOR fails to cure or perform is obligations,CUSTOMER may,by written notice to foamed-in-place insulation,poychbrinated biphenyl(PCBs),and(c)any other chemical or •
CONTRACTOR,terminate this Agreement. biological material or organism, that has, is alleged to have, or is believed to have an
adverse effect on human health,habitability of a Site,or the environment
17.2 In the event insufficient funds are appropriated for the payments and the
CUSTOMER has no funds legally avatable for payments from other sarces,then the 18.2 "Mold" means any type or form of fungus or biological material or agent
CUSTOMER may terminate this Agreement at the end of its then current fiscal year,and including mold, mildew, moisture, yeast and mushrooms, and any mycohxins, spores,
after having returned the Equipments CONTRACTOR or is assgns,in accordance with scents,or by-products produced or released by any of the foregoing. This includes any
Section 17.3,paying all payments due under this Agreement tar the current fiscal year,and related or any such condeans caused by third parties.
delivering the opinion of counsel desmbed below,CUSTOMER shall not be ablgated to
make subsequent payments on this Agreement('Nonappropriatien"1. CUSTOMER agrees 10.3 'Covered Equipment'means the equipment and software to be covered under
to deliver notice to CONTRACTOR of such termination within ten(10)business days form this Agreement and is identified in the Scope of Work(Attachment A).
the determination by the CUSTOMER of the event of Non-Appropriation. II this Agreement Is
terminated under this Section 17.2,CUSTOMER agrees that,tithe extent lawful,itshall not 18.4 'Equgmenr means all equipment and parts to be provided by CONTRACTOR,
appropriate or expend any funds for the purchase or use of equipment or services similar to together with all additions, attachments, improvements, substitutions, replacements and
the Work until after the end of the next sorsentlkg fiscal year or lesser period of time as accessions thereto,2long with their installation and other costs and which are required to
permitted by applicable law. perform the Work.
In the event CUSTOMER elects to terminate this Agreement pursuant to this Section 17.2, 18.5 'Services'means terse services and obligations to be undertaken by
then the CUSTOMER agrees to provide CONTRACTOR or is assigns with a written opinion CONTRACTOR in support of or to maintain,the Covered Equipment as more fully detailed
from its counsel as to such matters relating to NonAppropriaton as CONTRACTOR or is in the Scope of Work(Attachment A).
assigns may reasonaby request.
The CUSTOMER shall make all payments due during the fecal period immediately 18.6 "Agreement'means upon Acceptance as provided In Section 13,the Proposal,
preceding the fiscal period for which sufficient funds were not appropriated. the General Terms and Conditions and Attachments A and B,as the same may be
amended,modified or supplemented from time to time.
Upon return of the Equipment and receipt by CONTRACTOR or is assigns of such opinion
and the payment deserted above,this Agreement shall be terminated as of the first day of 18.7 "Acceptance'means acceptance althe Equipment by CUSTOMER by the
the fiscal period for which funds have not been apprapriabtl. In the event the CUSTOMERS issuance of an acceptance certificate in a form acceptable to CONTRACTOR or deemed
final budget for such ensuing fiscal years not enacted prior to the expiration of the fecal year, acceptance In aavdance with Section 20.1.
the Agreement shall be deemed continued pending the enactment of such final budget
unless written notice is given by the CUSTOMER to the contrary. 19. CHANGES IN THE WORK
17.3 In the event of termination of this Agreement in accordance with Section 17.2 19.1 A Change Order is a written order signed by CUSTOMER and CONTRACTOR
hereto,CUSTOMER agrees,at is expense,to transfertb to the Equipment to authorizing a flange in the Work or adjustment h the price or a change to thesdedule
CONTRACTOR or its assigns,and peaceably surrender possession of the Equipment to ('Change Order).
CONTRACTOR,or is assigns,on the effective date of such termination,in good working
ocndnon,reasonable war and tear excepted,assented and packed for shipment in 19.2 CUSTOMER may request CONTRACTOR to submit pr
oposals ch os s changes in
accordance with maand
ebreya ylaa tiomandsbinentl Uned at CUSTOMER'Sexpense, the
chhhasubject he Work
or wit be by CONTRACTOR. IneO CUSTOMER csoothe to ryMe ed,
freight ACTOaor insured,to any location In to continental United States so specified by such changesiedtWonwillb bthopzedsya Change submits a probe
CONTRACTOR or its assigns. specifically agreed btCbSTothER choffes ntRACocee CUSTOMER
USTO ER al
pursuant tar rrequestlost CUSTOMERORforamoan proceed,tsshallCUSTOMER issue
174 COMRARTORmay to terminatepaymentsagreedcause
notreimburseCUfaiure es herei myrfleexercise of proposal.
power o(emhenttloman by CUSTOMER)after giving CUSTOMER written mace of its
intent to terminate.It within thirty(30)days following receipt of such notice,CUSTOMER 19.3 CONTRACTOR may make a written request to CUSTOMER to modify this
failsto make the payments then due.orotherwte faits to are or perform its obligations, Agreement based on the receipt of,or the discovery of,information that CONTRACTOR
CONTRACTOR may,by mitten notice to CUSTOMER,terminate this Agreement believes will causes change to the scope,price,schedule,level of performance,or other
facet of the Agreement.CONTRACTOR we submit its request to CUSTOMER within a
17.5 This Agreement may be terminated at CONTRACTORS option in the event reasonable time after receiptot or the discovery of,info'nation that CONTRACTOR
Coveted Equipment on CUSTOMER'S Slte is destroyed or substantially damaged. Likewise, believes will cause a change to the scope.Ode,schedule,level of performance,or other
this Agreement may be terminated at CUSTOMER'S option in the event CUSTOMERS Site facet of the Agreement The request shall be submitted by CONTRACTOR before
is destroyed. proceeding to execute the Work,except in an emegency endangering lie or property,in
which case CONTRACTOR shall have the authority to act,in its discretion,to prevent
17.6 Consequences of Termination threatened damage,injury or toss. CONTRACTOR'S request will induce information
Upon termination of this Agreement prior to its expirretion by any party under the terms of necessarytosubstantiatethe effect of the change and any Impacts to the Welk,including
Sections 4.3,5.1,155,17.1.17 4,or 17.5; any change in schedule or price.If CONTRACTOR'S request is acceptable to CUSTOMER,
CUSTOMER will issue a Change Order consistent therewith. If CUSTOMER and
CONTRACTOR cannot agree on the amount of the adjustment in the price or the schedule,it
Proposal Number:
Page 8 of 13
shall be determined pursuant to Section 12 of this Agreement Any change in the price or (b) CUSTOMER has been duly authorized to execute, deliver and perform this
the schedule resulting from such claim shall be authorhed by Change Order. Such changes Agreement under the Constitution and laws of the Star and under the terms
must be finalized prior to Aoeptance of the Equipment and provisions of the resolution of is go✓eming body,or b other*s
prite
epmptale
official approval, the enforemens have been and will tothat this to followed
20. ACCEPTANCE O THE EQUIPMENT in order to ensure the enforceability of this Agreement that Agreement
represents a valid deferred payment obligation for the total amount payable
Upon receipt of notice by CONTRACTOR that the Equipment is ready for final inspection and hereunder, and CUSTOMER has complied with such pubs biddi
ac aptance,CUSTOMER will make such final inspection and issue
an aptancece*ate requirements as may be appliceble to this Agreement and the aoqusitbn by the
In a form acceptable to Contractor within three(3)business days.stating that to the best of CUSTOMER of the Work hereunder and that no lease, rental agreement or
CUSTOMER'S knowledge,Information and belief,and on the basis of CUSTOMER'S co-site contract for purchase, to which CUSTOMER has been a party, at any lime
visits and inspections,the Equipment has been fully romp**in aoxrdance with the terms dump the past five(5)years, has been terminated by the CUSTOMER as a
and conditions of this Agreement. if CUSTOMER finds the Equipment unacceptable due to result of insufficient funds being appropriated.
noncompliance with a material element of this Agreement which non-compliance is due
solely to the fault of CONTRACTOR,CUSTOMER will no*CONTRACTOR in writing within (c) During the Contract Term,the Equipment will be used by the CUSTOMER only
three(3)business days sang forth the specific masons for non-acceptance. CUSTOMER for lawful purposes of performing one or more governmental or proprietary
agrees that failure to inspect and/or fatiure to Issue proper notice of nonacceptance within functions of CUSTOMER consistent with the permissible scope of
three(3)business days shall constitute final acceptance of the Equipment under this CUSTOMER'S authority and will not be used in a trade or business of any
Agreement CUSTOMER further agrees that partial or beneficial use of the Equpment by person or entity other than the CUSTOMER.
CUSTOMER prior to final inspection and acceptance will constitute Acceptance of the
Equipment untied*Agreement (d) During the Contract Term, CUSTOMER will annually provide
2I. REPRESENTATIONS AND WARRANTIES. CONTRACTOR or its assigns with currentfinancial statements, budges, or
proof of appropriation for the ensuing fiscal year and such other financial
information resting to the ad'lity of the CUSTOMER to perform this Agreement
21.1 CUSTOMER hereby represents and warrants to CONTRACTOR and ib assigns as may be reasonably requested.
that
le) CUSTOMER executed only one(1)original of this Agreement(which was
(a) CUSTOMER is a public body, corporate and polls, or an authorized On- delivered to Contactor),and the CUSTOMER currently has no orgmal
BMall-Of-Agency within the meaning of the Internal Revenue Code of 1986, manually executed Agreement in is possession which is not marked
as amended and the regulations promulgated thereunder,duy organized and 'DUPLICATE ORIGINAL:
existing under the laws of the State in which It is domiciled('Stale')and will m
or cause to be done all things necessary to preserve and keep in full force and
effect sae existence
Proposal Number:
Page 9 of 13
Attachment A-Scope of Work
UPGRADE
Under this Contractor Municipal Facilities Agreement, Contractor will replace the mechanical HVAC equipment
and mechanical controls listed below.
All new and exisitng equipment on attachment "A" will be comprehensive Serviced and Maintained under the
Contractor Municipal Facilities Agreement for a fixed schedule term of 10 years.
Scope of Work: Removal and Replacement of the followinu HVAC units:
A. Child Care Center—One (1)5-ton unit-Carrier Model#48HJM006
B. City Hall— Two (2) 10-ton units-Carrier Model#48HJD012
Three(3)5-ton units-Carrier Model#48HJM006
One (1)40-ton unit-Carrier Model#50-AK040-EQ51 HH.
C. Fire Station— Two (2)4-ton units-Carder Model#48HJM005
❑ Disconnect and dispose of nine (9) existing A/C units from existing curbs. Remove electrical, condensate drains, control
wiring,smoke detectors and ductwork if required.
❑ Furnish and install nine(9)new Carrier A/C units to existing curbs. Curb transitions will be provided if required. We will
provide two(2)pitched curbs for the 10-ton units, three(3)new disconnects for three (3) 5-ton units,Reconnect existing
electrical,condensate drains,control wiring, smoke detectors and ductwork if required.
❑ Evacuate refrigerant and remove per code and provide receipt to Contractor.
❑ Furnish and install new rigid ductwork per SMACNA standards.
❑ Private wage project.
❑ Rigging of new units.
❑ Start-up of new units.
❑ Material handling and Trucking.
❑ Mechanical Permit and cost if required.
❑ Labor and Supervision.
❑ Bond cost.
Note:All new units are equal or less in weight than the units being replaced.
Exclusions:
❑ All cutting,coring,sealing,patching and framing of roof for ductwork or piping penetrations.
❑ Electrical conduit,disconnects,starters,wiring or hook-up not stated above.
O No Premium time is included in this proposal.
❑ Combination smoke/fire dampers.
❑ No new DDC or VVT controls work are included in this proposal.
❑ Structural work or calculations.
❑ Fire life safety controls,time clocks and equipment interlocks.
❑ Asbestos abatement,encapsulation or work in asbestos environment.
U No insulation of existing ductwork,fittings,DX,CHW or HW piping is included in this proposal.
❑ Curb leveling devices,platforms or platform covers.
❑ Any existing HVAC code violations
❑ Any work below the roofline.
Replacment of the(13) remaining City Hall Mechanical Controls
Contractor will retrofit the remaining(13) electric VAV zone controls in the City Hall.
(13)120V 9"LEADS 2 SECONDARY SCREW TERMINALS-TRADELINE
(13)ML7174A2001 IN**CUSTOM PACK'
(13)VALVE DCA FOR V5011A&C,SELF-CONTAINED,SELF-ADJUSTING LINEAR ACTUATOR
(13)T7984C1053,LOCAL THERMOSTAT
(13) 1/2"NPT,2-WAY SCREWED VALVE 4.00V D.A.,=%FLOW,SINGLE SEATED,ANSII50
(13)BRONZE BODY,40-250F,3/4"TRAVEL
Preferred Mechanical Maintenance Services
Maintenance Component:
1.1 Scope-CONTRACTOR will maintain the mechanical systems,components,and hardware listed below:
List of Covered Equipment:
DESCRIPTION
List of Covered Equipment:
1 1 Library Roof Package Unit 10 Ton Carrier
2 1 Meeting Room/Roof Package Unit 10 Ton Carrier
3 1 Council Chambers/Roof Package Unit 5 Ton Carrier
4 1 City Hall Package Unit 5 Ton Carrier
5 1 City Hall Package Unit 5 Ton Carrier
6 1 Admin/Roof Package Unit 40 Ton Carrier
7 1 Fire Station/Roof Package Unit 4 Ton Carrier
8 1 Fire Station/Roof Package Unit 4 Ton Carrier
9 1 Equipment Room Boiler 25HP Bryant
10 1 Equipment Room Pump 3HP Unknown
11 2 Equipment Room Pump 1HP Unknown
1 1 Child Care Package Unit 4 Ton - Carrier
2 1 Child Care Package Unit 5 Ton Carrier
3 1 Child Care Package Unit 5 Ton Carrier
4 1 Child Care Package Unit 3 Ton Carrier
5 1 Child Care Package Unit 3 Ton Carrier
6 1 Child Care Electronic lime Cloc N/A Unknown
1 2 Senior cmr Split Unit 4 Ton Rheem
2 1 Senior Cnn Package Unit 4 Ton Carrier
3 1 Senior cmr Package Unit 2.5 Ton Carrier
4 1 SeniorCmr Electronic Time Cloc1N/A N/A
1.2 Preventive Maintenance - Each preventive maintenance call will be scheduled by a computer-generated service
report detailing the tasks to perform,the skill levels required,and the special tools and instrumentation required to maintain the
systems. Maintenance intervals will be determined by either equipment run time or a frequency determined from consideration
of equipment operation,application,location, or criticality of end use. Upon completion of each service call,a summary of the
preventive maintenance tasks completed will be provided to CUSTOMER.
1.3 Component Replacements - CONTRACTOR will maintain CUSTOMER'S presently installed system within the
functional limitations of presently installed hardware,firmware,and software found on CUSTOMER'S system(s).
CONTRACTOR will repair or replace serviceable components and parts found on the List of Covered Equipment that have
been found to be defective or have failed. Replaced components will be new or reconditioned components of compatible
design as required to maintain CUSTOMER'S system. At CONTRACTOR'S sole discretion, marginal components may also
be repaired or replaced. These replacements will be based upon commercial availability of parts and/or components. All
exchanged parts shall become the property CONTRACTOR. Automatic valve and damper maintenance and repair are included
in this Agreement. The labor required for their removal and installation is not included.
Notwithstanding the foregoing, at initial inspection, at initial seasonal start-up, or following twelve (12) months of service, if
any individual component cannot, in the sole or exclusive opinion of CONTRACTOR, be properly repaired, due to
obsolescence, lack of commercial availability of standard parts, and/or excessive wear or deterioration, CONTRACTOR may
remove said component from the List of Covered Equipment, with sixty (60) days written notice. Non-maintainable
components will be eliminated from coverage under this Agreement and CONTRACTOR shall adjust the price accordipply.
1.4 Emergency Service - Activities performed under this Agreement are designed to minimize the incidence of
emergency situations. However, should an emergency arise, CONTRACTOR personnel will assess the situation either by
phone or remote diagnostics, or both, and will determine the required course of action with CUSTOMER. If it is determined
that a site visit is required, CONTRACTOR personnel will arrive at CUSTOMER site within Error! Reference source not
found.hours. If the resolution of the emergency service call requires CONTRACTOR to provide service for equipment that is
not listed in Article 1.1 above,CUSTOMER will be liable for charges prevailing for such service.
Emergency Service will be provided during the following periods during the term of this Agreement (check box for desired
level of emergency service coverage):
❑ Continuous Emergency Service;
24 hours per day,seven days per week,federal holidays included
❑ Extended Hours Emergency Service:
12 hours per day,five days per week,federal holidays excluded.
Specified hours: 6:00 a.m. -6:00 pm,Monday through Friday.
❑ Regular Business Hours Emergency Service:
8.5 hours per day,five days per week,federal holidays excluded.
Specified hours: 8:00 ant-4:30 p.m.,Monday through Friday.
1.5 Performance Review - A review of the Services provided within this Agreement will be performed by
CONTRACTOR on an annual basis at CUSTOMER'S request. CONTRACTOR and CUSTOMER will discuss work
performed since the last review, answer questions pertaining to Service delivery, and identify opportunities to further improve
performance of the Equipment.
1.6 Contractor ServicePortal—CONTRACTOR will provide customer access to an Internet-based application that will
allow the CUSTOMER to securely submit non-emergency service requests online; view status of all service calls, whether
scheduled,open or closed;view appointments and task detail of work performed on contracted service calls;and view contract
and equipment coverage details (12 month history and includes only service performed per the CONTRACTOR contract).
Functionality enhancements or deletions are at the discretion of CONTRACTOR.
Air Filter Services
1.1 Scope - CONTRACTOR will furnish and install air filters appropriate for the design condition of CUSTOMER'S
ventilation systems. Media for the fan system units listed in this section will be replaced according to the following schedule:
List of Covered Equipment:
Changes per year
AC Equipment Quantity Size Type (1,2,4,6,or 12)
Units 1-17 44 2x20x30 Pleated 6
1.2 Coverage-It is understood that the air filter media replacement services apply only to the fan system units listed in
Article 1.1 above. If this Agreement is terminated, CONTRACTOR will remove any CONTRACTOR-supplied frames from
the facility,or offer CUSTOMER the opportunity to purchase them at the current market value.
1.3 Frequency of Air Filter Media Replacement - Should filter loading experience indicate a need to adjust the
frequency of media changes for the fan systems listed in Article 1.1 above, the frequency will be changed, and the Agreement
amended to reflect the new media change frequency. The Agreement price will be adjusted to account for the revised media
change frequency.
1.4 Performance Review-A review of the Services provided within this Agreement will be performed by CONTRACTOR on an annual
bads at CUSTOMER'S request. CONTRACTOR and CUSTOMER will discuss work performed since the last review,answer questions
pertaining to Service delivery,and Identify opportunities to further improve performance of the Equipment.
EXHIBIT C
RESOLUTION OF GOVERNING BODY
A resolution approving the form of the Lease/Purchase Agreement with
Zions First National Bank,Salt Lake City,Utah
and authorizing the execution and delivery thereof.
Whereas, the City Coucil(the"Governing Body")of City of Grand Terrace(the"Lessee")have
determined that a true and very real need exists for the leasing of the property described in the
Lease/Purchase Agreement presented to this meeting;and
Whereas,the Lessee has reviewed the form of the Lease/Purchase Agreement and has found the
terms and conditions thereof acceptable to the Lessee; and
Whereas,the Governing Body has taken the necessary steps under applicable law to arrange for
the leasing of such property under the Lease/Purchase Agreement; and
• Be it resolved by the Governing Body as follows:
Section 1.
The terms of said Lease/Purchase Agreement are in the best interests of Lessee for the leasing of
the property described therein.
Section 2.
The appropriate officers and officials of the Lessee are hereby authorized and directed to execute
and deliver the Lease/Purchase Agreement in substantially the form presented to this meeting and any
related documents and certificates necessary to the consummation of the transactions contemplated by the
Lease/Purchase Agreement for and on behalf of the Lessee. The officers and officials of the Lessee may
make such changes to the Lease/Purchase Agreement and related documents and certificates as such
officers deem necessary or desirable,such approval to be conclusively evidenced by the execution and
delivery thereof.
Section 3.
The officers and officials of the Governing Body and the Lessee are hereby authorized and
directed to fulfill all obligations under the terms of the Lease/Purchase Agreement.
t
I hereby certify that the foregoing is a full, true and correct copy of a resolution duly adopted by
the City Coucil of the City of Grand Terrace at a meeting thereof on June 22,2006 by the following vote
of the members thereof:
AYES: Councilmembers Hilkey, Garcia, and Miller; Mayor Pro Tem Cortes and
Mayor Fern
NOES: None
ABSENT: None
CITY OF TERRACE
By
Print Name Q r t t
•
Title SC.
Attest:
Secretary of the Board
2
EXHIBIT D
FORM OF OPINION OF COUNSEL TO LESSEE
To: Zions First National Bank
One South Math Street
Salt Lake City,Utah 84111
Gentlemen:
As counsel for City of Grand Terrace ("Lessee"), I have examined duly executed originals of the
Lease/Purchase Agreement(the "Lease") dated this 28th day of June, 2006, between the Lessee and Zions
First National Bank, Salt Lake City, Utah ("Bank"), and the proceedings taken by Lessee to authorize and
execute the Lease (the "Proceedings"). Based upon such examination as I have deemed necessary or
appropriate,I am of the opinion that:
1. Lessee is a body corporate and politic, legally existing under the laws of the State of California
(the"State").
2. The Lease and the Proceedings have been duly adopted, authorized, executed, and delivered by
Lessee,and do not require the seal of Lessee to be effective,valid,legal,or binding.
3. The governing body of Lessee has complied with all applicable open public meeting and notice
laws and requirements with respect to the meeting at which the Proceedings were adopted and the Lessee's
execution of the Lease was authorized.
4. The Lease is a legal,valid,and binding obligation of Lessee,enforceable against the Lessee in
accordance with its terms except as limited by the state and federal laws affecting remedies and by
bankruptcy,reorganization, or other laws of general application affecting the enforcement of creditor's
rights generally.
5. Either there are no usury laws of the State applicable to the Lease,or the Lease is in accordance
with and does not violate all such usury laws as may be applicable.
6. Either there are no procurement or public bidding laws of the State applicable to the acquisition
and leasing of the Leased Property (as defined in the Lease) from the Bank under the Lease, or the
acquisition and leasing of the Leased Property from the Bank under the Lease comply with all such
procurement and public bidding laws as may be applicable.
7. There are no legal or governmental proceedings or litigation pending or, to the best of my
knowledge, threatened or contemplated (or any basis therefor) wherein an unfavorable decision, ruling or
finding might adversely affect the transactions contemplated in or the validity of the Lease.
8. The adoption, execution and/or delivery of the Lease and the Proceedings, and the compliance
by the Lessee with their provisions,will not conflict with or constitute a breach of or default under any court
decree or order or any agreement, indenture, lease or other instrument or any existing law or administrative
regulation,decree or order to which the Lessee is subject or by which the Lessee is or may be bound.
9. Although we are not opining as to the ownership of the Leased Property or the priority of liens
thereon, it is also our opinion that the Security Documents attached as Exhibit E to the Lease are
sufficient in substance, form, and description, and indicated place, address, and method of filing and/or
D-1
recording, to completely and fully perfect the security interest in every portion of the Leased Property
granted under the Lease, and no other filings and/or recordings are necessary to fully perfect said security
interest in the Leased Property. '..
Attorney for Les
D-2
EXHIBIT E
SECURITY DOCUMENTS
[Attach Security Documents here]
EXHIBIT F
DELIVERY AND ACCEPTANCE CERTIFICATE
To: Zions First National Bank
Reference is made to the fixed rate Equipment Lease Agreement between the undersigned
("Lessee"),and Zions First National Bank("Lessor"),dated June 28,2006, ("the Lease")and to the
Equipment as such term is defined therein. In connection therewith we are pleased to confirm to you the
following:
1. All of the Equipment has been delivered to and received by the undersigned; all installation or
other work necessary prior to the use thereof has been completed; said Equipment has been examined
and/or tested and is in good operating order and condition and is in all respects satisfactory to the
undersigned and as represented,and that said Equipment has been accepted by the undersigned and
complies with all terms of the Lease.Consequently,you are hereby authorized to pay for the Equipment
in accordance with the terms of any purchase orders for the same.
2. In the future,in the event the Equipment fails to perform as expected or represented we will
continue to honor the Lease in all respects and continue to make our rental and other payments thereunder
in the normal course of business and we will look solely to the vendor,distributor or manufacturer for
recourse.
3. We acknowledge that Bank is neither the vendor nor manufacturer or distributor of the
Equipment and has no control,knowledge or familiarity with the condition,capacity, functioning or other
characteristics of the Equipment.
4. The serial number for each item of Equipment which is set forth on Exhibit"B"to the Lease is
correct.
This certificate shall not be considered to alter, construe,or amend the terms of the Lease.
Lessee:
CITY OF GRAND TERRACE
By:
(Autthh-_ S ature)
Date: Q '�"
2
EXHIBIT H
FORM 8038
(Attached)
1
Form 8038-G Information Return for Tax-Exempt Governmental Obligations
► Under internal Revenue Code section 149(e) OMB No. 1545-0720
(Rev.November 2000) I. See separate Instructions.
Department of the Treasury Caution:Ifthe issue Interne Revenue SepiaMee is under Y700,000,use Form B03H-GC.
Part I Reporting Authority If Amended Return,check here ► ❑
1 Issuer's name 2 Issuer's employer identification number
3 Number and street(or P.O. box if mail is not delivered to street address) Room/suite 4 Report number
3
5 City,town, or post office,state,and ZIP code 6 Date of issue
7 Name of Issue
8 CUSIP number
9 Name and title of officer or legal representative whom the IRS may call for more information 10 Telephone nunbe of officer or legal representative
1 1
P.r II Type of Issue (check applicable box(es)and enter the issue price) See instructions and attach schedule
11 ❑ Education 11
12 0 Health and hospital 12
13 0 Transportation 13
19 0 Public safety 14
15 0 Environment(including sewage bonds) 15
16 ❑ Housing 16
17 0 Utilities 17
18 0 Other. Describe ► 18
19 If obligations are in Ns or mRANs, check box ► 0 If obligations are BANs, check box ► 0 /jam j/�jjA
19 If obligations are T the form lease or installment check box ► 0 //'���j
P.r III Description of Obligations. Complete for the entire issue for which this form is being fled.
la)Final maturityDate 0l Issue pace Co Stated redemption (a)weighted
price at maturity average maturity le)Yield
21 $ $ years %
Part IV Uses of Proceeds of Bond Issue(including underwriters'discount)
22 Proceeds used for accrued interest 22
23 Issue price of entire issue(enter amount from line 21, column (b)) 23
24 Proceeds used for bond issuance costs(including underwriters'discount) 24
25 Proceeds used for credit enhancement 25
26 Proceeds allocated to reasonably required reserve or replacement fund 26
27 Proceeds used to currently refund prior issues 27
28 Proceeds used to advance refund prior issues 28
29 Total (add lines 24 through 28). 29
30 Nonrefundinq proceeds of the issue(subtract line 29 from line 23 and enter amount here). 30
P.rt V Description of Refunded Bonds (Complete this part only for refunding bonds.)
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . S. years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ► years
33 Enter the last date on which the refunded bonds will be called ►
34 Enter the dateis)the refunded bonds were issued ►
P r I Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract(see instructions) 36a
b Enter the final maturity date of the guaranteed investjnetit,boptract► FA
37 Pooled financings: a Proceeds of this issue that are to8etjsed td+npke,1oans z•ber governmental units 37a
b If this issue is a loan made from the proceeds .tax-evertt g}` _ . ck box I. 0 and enter the name of the
Issuer ► d tit.. anirlf ne issue I.
38 If the issuer has designated the issue under sectl 2 vn; 6, j(a)(e op) st-M a,r exception), check box , . . I. ❑
39 If the issuer has elected to pay a penalty in iieLI arbkrage rebate, O. ❑
40 If the issuer has identified a hedge, check box tot ► 0
under penalties of perjury.I declare that I have examined this h rr and au educes and statements,and to the best of my knowledge
and belief,they are true.correct,and complete.
sign 54eu-e, a0rl
HHere III" 7�iii 0--± a.- • k C -I ✓I 1 e
signature.igs aurrodz•. a Date 'Type or print name and ntpp .J
For Paperwork Reduction Act Notice, -0: of the Instructions. Cat.No.63773S Form 8038-G (Rev.11.2o130)
REIMBURSEMENT RESOLUTION OF GOVERNING BODY
A resolution expressing the Governing Body's current intention to advance funds to
finance certain property and/or improvements and to reimburse such advance with proceeds of a
Lease/Purchase Agreement or other obligation the interest on which will be exempt from federal
income taxation.
Whereas, the (the "Governing Body") of (the "City") desires to express its current
intention to advance moneys (the "Advance") from its General Fund
(the"Fund")to provide interim financing for the following described project(the"Project"):
Description of Project
Description of Facility[ies]and Proposed Function or Purpose: City Hall HVAC unit
Estimated Number of Units: 88 tons
Estimated Size [number of stories,square footage,etc.]: 20,000 square feet
Estimated Location: 22795 Barton Road, Grand Terrace, CA 92313
Other:
and to subsequently enter into a Lease/Purchase Agreement or other obligation in the currently
estimated maximum principal amount of$ , the interest on which will be
exempt from federal income taxation(the"Lease or Other Obligation"),and to use proceeds there
from to reimburse the Advance.
Be it resolved by the Governing Body as follows:
SECTION 1. The Governing Body hereby expresses its current intention to, and
authorizes and consents to, the Advance from the Fund to provide interim financing for the
acquisition and/or construction of the Project,and the subsequent execution of the Lease or Other
Obligation in the currently estimated maximum principal amount specified above, and the
reimbursement of all or a portion of the Advance from the proceeds of the Lease or Other
Obligation; provided, however, that such reimbursement shall be evidenced by an allocation
made by or on behalf of the City in writing:
(a) not later than eighteen(18)months after the later of:
(1) the date the original expenditure is paid; or
(ii) the date the Project is "placed in service" (as that teen is defined in
Section 1.150-2(c) of the U.S. Treasury Regulations [the "Regulations"]) or
abandoned;
(b) but in no event more than three(3)years after the original expenditure is paid;
and further provided that only the following types of expenditures shall be reimbursed with
proceeds of the Lease or Other Obligation:
(I) Subsequent Expenditures: all expenditures incurred with respect to the Project on or
after the date hereof: plus
(II) Prior Expenditures: the following types of expenditures incurred with respect to the
Project prior to the date hereof:
(A) capital expenditures made no earlier than sixty(60) days prior to the date hereof;
plus
(B) "preliminary expenditures" as described in Section 1.150-2(f)(2) of the
Regulations, not in excess of twenty percent(20%)of the aggregate"issue price"(as that term is
defined in Section 1.148-1(b) of the Regulations) of the Lease or Other Obligation for
architectural, engineering, surveying, soil testing,reimbursement bond issuance, and similar costs
that are incurred prior to the commencement of acquisition and/or construction of the Project,
other than land acquisition, site preparation, and similar costs incident to commencement of
construction;plus
(C) the lesser of$100,000 or five percent(5%) of the proceeds of the Lease or Other
Obligation;
(collectively, "Reimbursable Expenditures").
SECTION 2. This Resolution is intended, among other things, to be a declaration of
official intent with respect to the City's present, reasonable intention and expectation to proceed
with the acquisition and/or construction of the Project, the execution of the Lease or Other
Obligation to finance the same, and the reimbursement with proceeds of the Lease or Other
Obligation of the aforementioned expenditures with respect thereto, under the applicable
provisions of Section 1.150-2 of the Regulations,but shall not be construed to obligate the City to
execute or cause to be executed the Lease or Other Obligation unless the Governing Body
determines, under the particular circumstances then in effect, to proceed with the issuance of the
Lease or Other Obligation for the purposes herein expressed.
I hereby certify that the foregoing is a full, true and correct copy of a resolution duly
adopted by the Governing Board of the Agency Name at a meeting thereof on the
22nd of June,2006,by the following vote of the members thereof:
AYES: Councilmembers Hilkey, Garcia, and Miller; Mayor Pro Tem Cortes and
Mayor Ferre
NOES: None
ABSENT: None
By
Print Name //��`� -� 11 1 ( n
Title /VS51, C.,-' i rl()(' e`
Attest:
By,// 199�CLM J
—/' °
Secretary of the Board