HomeMy WebLinkAboutGE CAPITAL PUBLIC FINANCE - 2001-07-16GE CAPITAL PUBLIC FINANCE, INC.
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement"), dated as of the Agreement Date, is made and
entered into by and between GE Capital Public Finance, Inc., a corporation duly organized and
existing under the laws of the state of Delaware, as lessor ("Lessor"), whose principal business
address is as shown on the execution page hereof; and the lessee identified on the execution page
hereof, a political subdivision of the State, as lessee ("Lessee"), whose address is as shown on the
execution page hereof.
In consideration of the mutual covenants herein contained, the parties hereto recite and agree as
follows:
ARTICLE I: DEFINITIONS AND EXHIBITS
Section 1.1. Definitions. The following terms have the meanings specified below unless the
context clearly requires otherwise.
Agreement: This Master Lease Agreement and all Equipment Schedules hereto.
Agreement Date: The date so designated on the execution page hereof.
Contractor: Each of the manufacturers or vendors from whom Lessee has ordered or with whom
Lessee has contracted for the manufacture, delivery and/or installation of the Equipment.
Counsel: An attorney duly admitted to the practice of law before the highest court of the State.
Date of Issue: With respect to each Lease, the date Interest starts to accrue as indicated in the
related Exhibit A.
Equipment: All items of personal property described in Equipment Schedules and subject to this
Agreement.
Equipment Group: The Equipment listed in a single Exhibit A.
Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A
and B which have been completed with respect to an Equipment Group and executed by Lessor and
Lessee.
Events of Default: With respect to each Lease, those events described in Section 12.1.
Fiscal Year: The 12-month fiscal period of Lessee which commences in every year and ends in
every year on the dates shown on the execution page hereof.
Funding Date: With respect to each Lease, the date Lessor makes payment to the Contractor(s) for
the purchase price of the related Equipment Group or, if the procedure described in Section 3.3 is
utilized, the date Lessor deposits funds into an Escrow Account.
Interest: The portion of any Rental Payment designated as and comprising interest as shown in any
Exhibit A.
1doc.j1m%Hunt CA 4c 1 7/20/01
Lease: With respect to each Equipment Group, this Agreement and the Equipment Schedule
relating thereto, which shall constitute a separate contract relating to such Equipment Group. This
Agreement contains the general terms and conditions with respect to each Lease. Lessor may
assign its rights under various Leases to different assignees. Each such assignee has the rights
only in the Lease it owns; a Non -Appropriation or Event of Default under a Lease owned by Lessor
or an assignee does not affect any of the Leases not owned by Lessor or by such assignee.
Lease Date: The date so designated in each Exhibit A.
Lease Term: With respect to any Equipment Group, the period during which the related Lease is in
effect as specified in Section 4.1.
Lessor: GE Capital Public Finance, Inc. and, for purposes of determining the ownership of a Lease,
shall include Lessor, General Electric Capital Corporation and their affiliates.
Lien: Any mortgage, security interest, lease, lien, pledge, charge, encumbrance or claim of any kind.
Net Proceeds: Any insurance proceeds or condemnation awards paid with respect to any
Equipment remaining after payment therefrom of all expenses incurred in the collection thereof.
Non -Appropriation: With respect to each Lease, the failure of Lessee or Lessee's governing body to
appropriate money for any Fiscal Year of Lessee sufficient for the continued performance by Lessee
of all of Lessee's obligations under a Lease, as evidenced by the passage of an ordinance or
resolution or other official action specifically prohibiting Lessee from performing its obligations under
a Lease with respect to any Equipment, and from using any moneys to pay any Rental Payments
due under a Lease for a designated Fiscal Year and all subsequent Fiscal Years.
Payment Date: The date upon which any Rental Payment is due and payable as provided in any
Exhibit A.
Principal: The portion of any Rental Payment designated as principal in any Exhibit A.
Prepayment Price: With respect to any Lease, as of the Payment Dates specified in the Exhibit A
relating thereto, the amount so designated and set forth opposite each such date in such Exhibit A.
Rental Payment: With respect to any Lease, the payment due from Lessee to Lessor on each
Payment Date during the Lease Term as shown in the Exhibit A relating thereto.
Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered
any Equipment from a Contractor.
State: The state in which Lessee is located.
State and Federal Law or Law: The Constitution and any law of the State and any charter,
ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the
United States, and any rule or regulation of any federal agency.
Section 1.2. Exhibits.
Exhibit A: Form of schedule executed by Lessor and Lessee describing an Equipment Group, and
setting forth the Rental Payments and Prepayment Prices.
Exhibit B: Form of Certificate of Acceptance executed by Lessee.
Woc.jWHunt CA 4c 2 7/20/01
Exhibit C: Form of Opinion of Counsel to Lessee.
ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations. Warranties and Covenants of Lessee. Lessee represents and
warrants and covenants as follows;
(a) Lessee is a political subdivision of the State, duly organized and existing under the
Constitution and laws of the State, and is authorized under the Constitution and laws of the State to
enter into this Agreement, each Lease and the transactions contemplated hereby and thereby, and
to perform all of its obligations under this Agreement and each Lease.
(b) The execution and delivery of this Agreement and each Lease by the officer of
Lessee executing such documents has been duly authorized by a duly adopted resolution of
Lessee's governing body, or by other appropriate official action, and such action is in compliance
with all public bidding and other State and Federal Laws applicable to this Agreement, each Lease
and the acquisition and financing of the Equipment by Lessee. All requirements have been met and
procedures have occurred in order to ensure the enforceability of this Agreement and each Lease
against Lessee.
(c) Lessee will have the sole use and possession of the Equipment. Lessee will use the
Equipment only to perform essential governmental or proprietary functions of Lessee within the
scope of Lessee's authority. Lessee will not permit the Equipment to be used in, for or by any
private commercial activity.
(d) Lessee will take no action that would cause the Interest portion of the Rental
Payments to become includable in gross income of the recipient for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder (the "Regulations"), and Lessee will take and will cause its officers,
employees and agents to take all affirmative actions legally within its power necessary to ensure that
the Interest portion of the Rental Payments does not become includable in gross income of the
recipient for federal income tax purposes under the Code and Regulations; all as amended from time
to time (including, without limitation, the calculation and payment of any rebate required to preserve
such exclusion). Lessee will submit to the Secretary of the Treasury information reporting
statements and other information relating to each Lease at the times and in the forms required by
the Code and the Regulations.
(e) Lessee reasonably expects that it will not sell or otherwise dispose of all or part of an
Equipment Group during the related Lease Term.
(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity,
before or by any court, regulatory agency, public board or body pending or, to the best of Lessee's
knowledge, threatened against or affecting Lessee, which challenges Lessee's authority to enter into
this Agreement or any Lease or any other action wherein an unfavorable ruling or finding would
adversely affect the enforceability of this Agreement or any Lease hereunder or any other
transaction of the Lessee which is similar hereto, or the exclusion of the Interest from gross income
for federal tax purposes under the Code, or would materially and adversely affect any of the
transactions contemplated by this Agreement or any Lease, including, but not limited to, Lessee's
acquisition of Equipment.
(g) Upon execution of this Agreement and each Exhibit A, Lessee will provide to Lessor
an Opinion of its Counsel in the form attached hereto as Exhibit C and a copy of the resolution
adopted by its governing body with respect to this Agreement and each Lease or evidence of
Woc,jlm\Hunt CA 4c 3 7120101
another official action authorizing this Agreement and each Lease when such resolution or evidence
of another official action is prepared and released by the City Clerk of Lessee in the ordinary course
of business.
(h) Lessee has not and will not create or establish any sinking fund, reserve fund or
other similar fund to pay Rental Payments.
(i) Unless otherwise indicated on an Equipment Schedule, Lessee owns the real estate
and facilities where the Equipment will be located free and clear of any Liens and, during the Lease
Term, will continue to own such property and shall keep it free and clear of Liens.
Q) Lessee acknowledges that (i) under Article XII of this Agreement, upon an Event of
Default, Lessor or the assignee, if any, of the related Lease may elect to terminate the related
Lease and each other Lease that is owned by Lessor or such respective assignee and (H) upon a
Non -Appropriation the related Lease and each other Lease that is owned by Lessor or such
respective assignee shall terminate and Lessee is required upon the occurrence of (i) or (ii) to
deliver all Equipment subject to the affected Leases as instructed by Lessor or such respective
assignee under Section 12.3 hereof.
ARTICLE III: LEASE OF EQUIPMENT
Section 3.1. Acquisition of E ui ment. Lessee shall advise Lessor of its desire to acquire
equipment, the equipment cost, the Contractor of the equipment, expected delivery date and the
desired acquisition terms for such equipment. By execution hereof, Lessor has made no
commitment to lease any equipment to Lessee. Nothing herein shall obligate Lessor to lease any
equipment to Lessee until Lessor has executed an Exhibit A relating thereto. If Lessor, in its sole
discretion, determines the proposed equipment may be subject to a Lease hereunder, Lessor shall
furnish to Lessee a proposed Exhibit A relating to the Equipment Group completed insofar as
possible. Lessee shall order the Equipment Group from the appropriate Contractor or Contractors.
In no event shall Lessee enter into any contract with any Contractor or issue a purchase order which
references Lessor. Lessor shall have no obligation to make any payment to a Contractor or
reimburse Lessee for any payment it made to a Contractor for an Equipment Group (or, if the
alternative procedure described in Section 3.3 hereof is utilized, consent to a disbursement by the
Escrow Agent) until five (5) business days after Lessor has received all of the following in form and
substance satisfactory to Lessor: (a) an Exhibit A executed by Lessor and Lessee; (b) a Certificate
of Acceptance (however, if the alternative procedure in Section 3.3 is utilized, a Certificate of
Acceptance is not required until the entire Equipment Group is accepted); (c) evidence of official
action taken by or on behalf of the Lessee to authorize the acquisition of the Equipment Group on
the terms provided in Exhibit A (one official action may authorize several Leases); (d) evidence of
insurance with respect to the Equipment Group in compliance with Articles VI of this Agreement;
(e) Contractor invoice(s) and/or bill of sale relating to the Equipment Group and if such invoices have
been paid by Lessee, evidence of payment thereof and, if applicable, evidence of official intent to
reimburse such payment as required by the Regulations; (f) as applicable, the original certificate of
title or manufacturer's certificate of origin and title application if any of the Equipment Group is
subject to certificate of title laws; (g) a completed and executed Form 8038-G or -GC or evidence of
filing thereof with the Secretary of Treasury; (h) an Opinion of Counsel and (i) any other documents
or items reasonably required by Lessor.
Section 3.2. Lease; Enjoyment; Inspection. Lessor hereby leases to Lessee each Equipment
Group made subject to an Equipment Schedule, and Lessee hereby leases from Lessor such
Equipment Group, upon the terms and conditions set forth in this Agreement and in the related
Equipment Schedule. During the Lease Term, Lessee shall peaceably and quietly have and hold
and enjoy the Equipment Group, except as expressly set forth in this Agreement. Lessee agrees
that Lessor and its agents shall have the right at all reasonable times to examine and inspect the
1docJ1m%Hunt CA 4c 4 7/20/01
Equipment, and Lessor and its agents shall have such rights of access to the Equipment as may be
reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by
Lessee to perform its obligations hereunder. Notwithstanding the designation of GE Capital Public
Finance, Inc. as Lessor, GE Capital Public Finance, Inc. does not own the Equipment and by this
Agreement and each Lease is merely financing the acquisition thereof for Lessee. Lessor has not
been in the chain of title of the Equipment, does not operate, control or have possession of the
Equipment and has no control over the Lessee or the Lessee's operation, use, storage or
maintenance of the Equipment. Lessee is solely responsible for the selection of the Equipment, and
the manufacturer and vendor thereof, and is solely responsible for the use, maintenance, operation
and storage of the Equipment.
Section 3.3. Alternative Procedure; Escrow Agreement. Notwithstanding the provisions of
Section 3.1, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired
and leased by Lessee under this Agreement, Lessor and Lessee enter into an escrow agreement
with an escrow agent establishing an account from which the Equipment Group cost is to be paid
(the "Escrow Account") (a) Lessor and Lessee shall immediately complete and execute an Exhibit A
relating to the Equipment Group; (b) the amount deposited by Lessor into the Escrow Account shall
be repaid by the Rental Payments due under the related Lease; and (c) the Rental Payments
relating to the Equipment Group shall have an aggregate Principal component equal to the amount
of Lessors deposit into the Escrow Account and shall be due and payable as provided in the related
Exhibit A commencing upon the deposit of funds by Lessor into the Escrow Account. Lessee
acknowledges and agrees that no disbursements shall be made from an Escrow Account except for
portions of the Equipment Group which are operationally complete and functionally independent and
which may be utilized by Lessee without regard to whether the balance of the Equipment Group is
delivered and accepted.
ARTICLE IV: TERM
Section 4.1. Term. This Agreement shall be in effect from the Agreement Date and is incorporated
by reference into each Equipment Schedule executed hereunder; provided, however, no Equipment
Schedules shall be executed after any Non -Appropriation or Event of Default. Each Lease with
respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease
Date and ending as provided in Section 4.6.
Section 4.2. Termination by Lessee. In the sole event of Non -Appropriation, the Lease as to
which the Non -Appropriation occurred and each Lease hereunder, owned by the same entity that
owns the Lease as to which the Non -Appropriation occurred, shall terminate, in whole, but not in
part, as to all Equipment subject to the affected Leases, effective upon the last day of the Fiscal
Year for which funds were appropriated, in the manner and subject to the terms specified in this
Article. Lessee may effect such termination by giving Lessor or the affected assignee a written
notice of termination and by paying any Rental Payments and other amounts which are due and
have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to
give notice of such termination not less than sixty (60) days prior to the end of the Fiscal Year for
which appropriations were made, and shall notify Lessor or the affected assignee of any anticipated
termination. In the event of termination of any Leases as provided in this Section, Lessee shall
comply with the instructions received from Lessor in accordance with Section 12.3.
Section 4.3. Intent To Continue Lease Term: Appropriations. Lessee presently intends to
continue each Lease hereunder for its entire Lease Term and to pay all Rental Payments relating
thereto. The person or entity in charge of preparing Lessee's budget will include in the budget
request for each Fiscal Year the Rental Payments to become due in -such Fiscal Year. The parties
acknowledge that appropriation for Rental Payments is a governmental function which Lessee
cannot contractually commit itself in advance to perform and this Agreement does not constitute
1doc.1WHunt CA 4c 5 7120101
such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to
make all Rental Payments can and will lawfully be appropriated and made available to permit
Lessee's continued utilization of the Equipment in the performance of its essential functions during
the applicable Lease Terms. Lessee will use funds appropriated for this Agreement for no other
purpose other than to pay Rental Payments and other amounts due hereunder.
Section 4.4. Effect of Termination. Upon termination of a Lease as provided in this Article,
Lessee shall not be responsible for the payment of any additional Rental Payments coming due in
succeeding Fiscal Years, but if Lessee has not complied with the instructions received from Lessor
in accordance with Section 12.3, the termination shall nevertheless be effective, but Lessee shall be
responsible for the payment of damages in an amount equal to the amount of the Rental Payments
that would thereafter have come due if this Agreement had not been terminated and which are
attributable to the number of days after which Lessee fails to comply with Lessor's or the related
assignee's reasonable instructions and for any other reasonable loss suffered by Lessor or the
related assignee as a result of Lessee's failure to take such reasonable actions as required.
Section 4.5. Reserved.
Section 4.6. Termination of Lease Term. The Lease Term with respect to any Lease will
terminate upon the occurrence of the first of the following events: (a) the termination of a Lease by
Lessee in accordance with Section 4.2; (b) the payment of the Prepayment Price by Lessee
pursuant to Article X; (c) an Event of Default by Lessee and Lessor's or the related assignee's
election to terminate such Lease pursuant to Article XII; or (d) the payment by Lessee of all Rental
Payments and all other amounts authorized or required to be paid by Lessee pursuant to such
Lease.
ARTICLE V: RENTAL PAYMENTS
Section 5.1. Rental Payments. Lessee agrees to pay Rental Payments with respect to the Lease
of an Equipment Group during the related Lease Term in the amounts and on the dates specified in
the Exhibit A relating thereto. A portion of each Rental Payment is paid as and represents the
payment of Interest as set forth in Exhibit A of each Lease, and the first Rental Payment will include
Interest accruing from the Date of Issue. Lessor is authorized to insert the due date of the first
Rental Payment on Exhibit A. All Rental Payments shall be paid to Lessor, or to such assignee(s) to
which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor
or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay
the Rental Payments exclusively from moneys legally available therefor, in lawful money of the
United States of America.
Section 5.2. Current Expense. The obligations of Lessee, including its obligation to pay the Rental
Payments due in any Fiscal Year of a Lease Term, shall constitute a current expense of Lessee for
such Fiscal Year and shall not constitute an indebtedness of Lessee within the meaning of the
Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes
or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of
Lessee for this Agreement and the Net Proceeds of the Equipment) to the payment of any Rental
Payment or other amount coming due hereunder.
Section 5.3. Rental Payments To Be Unconditional. Except as provided in Section 4.2, the
obligation of Lessee to make Rental Payments or any other payments required hereunder shall be
absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor
or between Lessee and Contractor or any other person, Lessee shall make all Rental Payments and
other payments required hereunder when due and shall not withhold any Rental Payment or other
payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or
1doc.j1m\Hunt CA 4c 6 7/20/01
counterclaim against its obligation to make Rental Payments or other payments required hereunder.
Lessee's obligation to make Rental Payments or other payments shall not be abated through
accident, unforeseen circumstances, failure of the Equipment to be delivered or to perform as
desired, damage or destruction to the Equipment, loss of possession of the Equipment or
obsolescence of the Equipment.
ARTICLE VI: INSURANCE AND RISK OF LOSS
Section 6.1. Liability and Property Insurance. Lessee shall, at its own expense, maintain
continuously in effect during each Lease Term: (a) self-insurance for liability for personal injuries,
death or damage to or loss of property arising out of or in any way relating to the Equipment
sufficient to protect Lessor from liability in all events, with a coverage limit of not less than
$1,000,000 with a $25 million commercial insurance umbrella for liability claims, and (b) self-
insurance for property damage up to $25,000.00 with commercial umbrella coverage for damage in
excess of $25,000.00 and up to a maximum of $45 million.
Section 6.2. Workers' Compensation Insurance. If required by State Law, Lessee shall carry
workers' compensation insurance covering all employees on, in, near or about the Equipment, and
upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Lease
Term.
Section 6.3. Requirements for All Insurance. All umbrella commercial insurance policies required
by this Article shall be taken out and maintained with insurance companies reasonably acceptable to
Lessor; and shall contain a provision that the insurer shall not cancel or revise coverage thereunder
without giving written notice to the insured parties at least thirty (30) days before the cancellation or
revision becomes effective. No insurance shall be subject to any co-insurance clause. Each
umbrella insurance policy required by this Article shall name Lessor as an additional insured party
and loss payee without regard to any breach of warranty or other act or omission of Lessee and shall
include a lender's loss payable endorsement for the benefit of Lessor. Prior to the delivery of
Equipment, Lessee shall deposit with Lessor evidence reasonably satisfactory to Lessor of such
insurance and, prior to the expiration thereof, shall provide Lessor evidence of all renewals or
replacements thereof.
Section 6.4. Risk of Loss. As between Lessor and Lessee, Lessee assumes all risks and liabilities
from any cause whatsoever, whether or not covered by insurance, for loss or damage to any
Equipment and for injury to or death of any person or damage to any property, whether such injury
or death be with respect to agents or employees of Lessee or of third parties, and whether such
property damage be to Lessee's property or the property of others. Whether or not covered by
insurance, Lessee hereby assumes responsibility for and agrees to reimburse Lessor and its
assignees for and, to the extent permitted by law, will indemnify and hold Lessor and its assignees
harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions,
costs and expenses (including reasonable attorneys' fees) of whatsoever kind and nature, imposed
on, incurred by or asserted against Lessor that in any way relate to or arise out of this Agreement,
the transactions contemplated hereby and the Equipment, including but not limited to, (a) the
selection, manufacture, purchase, acceptance or rejection of Equipment or the ownership of the
Equipment, (b) failure of Equipment to be delivered, the delivery, lease, possession, maintenance,
use, condition, return or operation of the Equipment, (c) the condition of the Equipment sold or
otherwise disposed at the time Lessee relinquishes possession of the Equipment, (d) the conduct of
Lessee, its officers, employees and agents, (e) a breach of Lessee of any of its covenants or
obligations hereunder and (f) any claim, loss, cost or expense involving alleged damage to the
environment relating to the Equipment, including, but not limited to investigation, removal, cleanup
and remedial costs, except such loss or damage caused by or resulting from the gross negligence or
Woc,jlm\Hunt CA 4c 7 7120101
willful misconduct of Lessor or its assignees, or Lessor's or any of Lessor's assignee's breach of this
Agreement. This provision shall survive the termination of this Agreement.
Section 6.5. Damage to or Destruction of Equipment. Lessee shall provide a complete written
report to Lessor within five (5) business days of any loss, theft, damage or destruction of any
Equipment and of any accident involving any Equipment which Lessee reasonably believes exceeds
$7,500.00, or when combined with prior losses exceeds $7,500.00. If all or any part of the
Equipment is lost, stolen, destroyed or damaged beyond repair ("Damaged Equipment"), Lessee
shall as soon as practicable after such event either: (a) replace the same at Lessee's sole cost and
expense with equipment having substantially similar Specifications and of equal or greater value to
the Damaged Equipment immediately prior to the time of the loss occurrence, such replacement
equipment to be subject to Lessor's reasonable approval, whereupon such replacement equipment
shall be substituted in the applicable Lease and the other related documents by appropriate
endorsement or amendment; or (b) pay the applicable Prepayment Price of the Damaged Equipment
determined as set forth in the related Exhibit A. Lessee shall notify Lessor of which course of action
it will take within fifteen (15) days after the loss occurrence. If, within forty-five (45) days of the loss
occurrence, (a) Lessee fails to notify Lessor; (b) Lessee and Lessor fail to execute an amendment to
the applicable Equipment Schedule to delete the Damaged Equipment and add the replacement
equipment which failure is caused by Lessee or (c) Lessee has failed to pay the applicable
Prepayment Price, then Lessor may, at its sole but reasonable discretion, declare the applicable
Prepayment Price of the Damaged Equipment, to be immediately due and payable, and Lessee is
required to pay the same. The Net Proceeds of insurance with respect to the Damaged Equipment
shall be made available by Lessor to be applied to discharge Lessee's prepayment obligation under
this Section or to replace the Damaged Equipment if Lessee selects this option. The payment of the
Prepayment Price and the termination of Lessor's interest in the Damaged Equipment is subject to
the terms of Section 10.3 hereof.
ARTICLE VII: OTHER OBLIGATIONS OF LESSEE
Section 7.1. Use; Permits. Lessee shall exercise due care in the installation, use, operation and
maintenance of the Equipment, and shall not install, use, operate or maintain the Equipment
improperly, carelessly or for a purpose or in a manner contrary to that contemplated by this
Agreement. Lessee shall operate and maintain the Equipment fully in accordance with any
insurance policy provision, applicable prevailing industry standards and, if applicable, the
manufacturer's specifications therefor. Lessee shall obtain all permits and licenses necessary for
the installation, operation, possession and use of the Equipment. Lessee shall comply with all State
and Federal Laws applicable to the installation, use, possession and operation of the Equipment,
and if compliance with any such State and Federal Law requires changes or additions to be made to
the Equipment, such changes or additions shall be made by Lessee at its expense. Lessee shall not
use any item of Equipment to haul, convey, store, treat, transport or dispose of any "hazardous
substances" or "hazardous waste" as such terms are defined in any federal, state or local law, rule
or regulation pertaining to the protection of the environment (together, "Environmental Laws").
Lessee agrees that if Lessee is required to deliver any item of Equipment to Lessor or Lessor's
agent, the Equipment shall be delivered free of all substances which are regulated by or foram a basis
for liability under any Environmental Law. Lessee shall comply with all license and copyright
requirements of any software used in connection with the Equipment.
Section 7.2. Maintenance of Equipment by Lessee. Lessee shall keep the Equipment at the
address specified in the respective Exhibit A and shall notify Lessor in writing prior to moving the
Equipment to another address. Lessee shall, at its own expense, maintain, preserve and keep the
Equipment in good repair, working order and condition, and shall from time to time make all repairs
and replacements necessary to keep the Equipment in such condition, and in compliance with State
and Federal Laws, ordinary wear and tear excepted. Lessee shall maintain Equipment in a condition
IdocJ1m\Hunt CA 4c 8 7/20/01
suitable for certification by the manufacturer thereof (if certification is available). In the event that
any parts or accessories forming part of any item or items of Equipment become worn out, lost,
destroyed, damaged beyond repair or otherwise rendered unfit for use, Lessee, at its own expense
and expeditiously, will replace or cause the replacement of such parts or accessories by
replacement parts or accessories free and clear of all liens and encumbrances and with a value and
utility at least equal to that of the parts or accessories being replaced (assuming that such replaced
parts and accessories were otherwise in good working order and repair). All such replacement parts
and accessories shall be deemed to be incorporated immediately into and to constitute an integral
portion of the Equipment and, as such, shall be subject to the terms of this Agreement. Lessor shall
have no responsibility for any of these repairs or replacements.
Section 7.3. Taxes, Other Governmental Charges and Utility Charges. Except as expressly
limited by this Section, Lessee shall pay all taxes and other charges of any kind which are at any
time lawfully assessed or levied against or with respect to the Equipment, or any part thereof, or
which become due during the Lease Term, when assessed against Lessee. Lessee shall also pay
when due all utilities and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Equipment, and all special assessments and charges lawfully made by any
governmental body that may be secured by a lien on the Equipment; provided that with respect to
special assessments or other governmental charges that may lawfully be paid in installments over a
period of years, Lessee shall be obligated to pay only such installments as are required to be paid
during the Lease Term as and when the same become due. Lessee shall not be required to pay any
federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts,
profit, excess profit, capital stock, corporate, or other similar tax payable by Lessor, its successors or
assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge
which is the obligation of Lessee under this Section.
Section 7.4. Advances. If Lessee shall fail to perform any of its obligations under this Article,
Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure,
including the advancement of money, and Lessee shall be obligated to repay all such advances on
demand, with interest at the rate of 18% per annum or the maximum rate permitted by law,
whichever is less, from the date of the advance to the date of repayment.
ARTICLE VIIL TITLE; SECURITY INTEREST; LIENS
Section 8.1. Title. During the Lease Term, legal title to and ownership of all Equipment and any
and all repairs, replacements, substitutions and modifications thereto shall be in Lessee and Lessee
shall take all actions necessary to vest such title and ownership in Lessee.
Section 8.2. Security Interest. Lessee grants to Lessor a continuing, first priority security interest
in and to the Equipment, all repairs, replacements, substitutions and modifications thereto or thereof
and all proceeds of the foregoing in order to secure Lessee's payment of all Rental Payments and
the performance of all other obligations to be performed by Lessee. Each Equipment Group
constitutes security and collateral for Lessee's obligations under all Leases that are owned by the
same entity. Lessee will join with Lessor in executing such financing statements or other documents
and will perform such acts as Lessor may reasonably request to establish and maintain a valid first
lien and perfected security interest in the Equipment. Lessee shall deliver or cause to be delivered
to Lessor the original certificates of title relating to all vehicular Equipment. If requested by Lessor,
Lessee shall obtain a landlord and/or mortgagee's consent and waiver with respect to the
Equipment. If requested by Lessor, Lessee shall conspicuously mark the Equipment with
appropriate lettering, labels or tags, and maintain such markings during the Lease Term, so as
clearly to disclose Lessor's security interest in the Equipment. Upon termination of a Lease with
respect to any Equipment Group through exercise of Lessee's option to prepay pursuant to
Articles X or through payment by Lessee of all Rental Payments and other amounts relating thereto,
Idoc.irm\Hunt CA 4c 9 7/20/01
Lessor's security interest in such Equipment Group shall terminate, and Lessor shall execute and
deliver to Lessee such documents as Lessee may reasonably request to evidence the termination of
Lessor's security interest in such Equipment Group. Lessee agrees this is a security agreement
under the State's Uniform Commercial Code ("UCC") and Lessor may file financing statements with
respect to the Equipment as permitted by the UCC.
Section 8.3. Liens. During the Lease Term, Lessee shall not, directly or indirectly, create, incur,
assume or suffer to exist any Lien on or with respect to the Equipment, other than the respective
rights of Lessor and Lessee as herein provided. Except as expressly provided in Section 7.3 and
this Article, Lessee shall promptly, at its own expense, take such action as may be necessary to duly
discharge or remove any such Lien. Lessee shall reimburse Lessor for any reasonable expenses
incurred by Lessor to discharge or remove any Lien.
Section 8.4. Modification of Equipment. Lessee will not, without the prior written consent of
Lessor, which consent will not be unreasonably withheld, affix or install any accessory equipment or
device on any of the Equipment if such addition will change or impair the originally intended
functions, value or use of the Equipment.
Section 8.5. Personal Property. The Equipment is and shall at all times be and remain personal
property and not fixtures.
ARTICLE 1X: WARRANTIES
Section 9.1. Selection of Equipment. The Equipment and the Contractor have been selected by
Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment,
the ordering of the Equipment, its suitability for the use intended by Lessee, the acceptance by the
Contractor or its sales representative of the order submitted, or any delay or failure by the Contractor
or its sales representative to manufacture, deliver or install the Equipment for use by Lessee.
Section 9.2. Contractor's Warranties. Lessor hereby assigns to Lessee for and during the related
Lease Term, all of its interest, if any, in all Contractor's warranties, guarantees and patent indemnity
protection, express or implied, issued on or applicable to an Equipment Group, and Lessee may
obtain the customary services furnished in connection with such warranties and guarantees at
Lessee's expense. Lessor has no obligation to enforce any Contractor's warranties or obligations on
behalf of itself or Lessee.
Section 9.3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT IT SELECTED THE
EQUIPMENT WITHOUT ASSISTANCE OF LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE EQUIPMENT,
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT.
IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE
EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT.
ARTICLE X: OPTION TO PREPAY
Section 10.1. When Available. Provided there has been no Non -Appropriation or Event of Default,
Lessee shall have the option to prepay its obligations under any Lease on any Payment Date for the
then applicable Prepayment Price set forth in Exhibit A relating thereto. In addition, in the event an
Escrow Account is established for a Lease as described in Section 3.3 hereof, funds remaining in
\doc.jim\Hunt CA 4c 10 7/20/01
such Escrow Account may be applied to prepay the Lease, in whole or in part, as provided in the
related escrow agreement.
Section 10.2. Exercise of O tion. Except with respect to a prepayment with funds remaining in an
Escrow Account, Lessee shall give notice to Lessor of its intention to exercise its option with respect
to any Lease not less than thirty (30) days prior to the Payment Date on which the option will be
exercised and shall deposit with Lessor on the date of exercise an amount equal to all Rental
Payments and any other amounts then due or past due under the related Lease (including the
Rental Payment due on the Payment Date on which the option is exercised) and the applicable
Prepayment Price set forth in the related Exhibit A.
Section 10.3. Release of Lessor's Interest. On receipt of the Prepayment Price in good funds
with respect to any Equipment Group, the Lease with respect to such Equipment Group shall
terminate and all rights and interests of Lessor in such Equipment Group shall cease and Lessor will
deliver to Lessee all documents reasonably requested by Lessee to evidence the termination of all of
Lessor's interest in the Equipment Group. Upon termination of Lessor's interest in the Equipment
Group, Lessee shall become entitled to such Equipment Group AS IS, WHERE IS, WITHOUT
WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE
USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any
lien or encumbrance created by or arising through Lessor. To the extent any Contractor's warranties
inured to the benefit of Lessor, Lessor hereby assigns them (without guaranty or any representation
as to such warranties) to Lessee.
ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment by Lessor. All of Lessor's right, title and/or interest in and to this
Agreement or any Lease hereunder, including, but not limited to, the Rental Payments and other
amounts payable by Lessee and Lessor's interest in the Equipment, its rights upon Non -
Appropriation and Events of Default and its rights to provide consents under a Lease may be
assigned and reassigned to one or more assignees or subassignees by Lessor at any time, without
the consent of Lessee, provided 100% of Lessors rights in a Lease must be assigned in whole to a
single assignee. Upon assignment of a Lease by Lessor, Lessor's assignee shall have all rights of
Lessor in and to the assigned Lease. No such assignment shall be effective as against Lessee
unless and until written notice of the assignment is provided to Lessee and such notice must be
provided as soon as reasonably practical after the assignment. If requested, Lessee will
acknowledge in writing receipt of such notice. Lessee shall keep a complete and accurate record of
all such assignments; provided, however, in the event Lessor assigns its interest in this Agreement
or in a Lease to an affiliate or to another entity related to Lessor, Lessor shall maintain a record of
such assignment for the benefit of Lessee.
Section 11.2. Assignment and Subleasing by Lessee. Neither this Agreement nor any Lease
hereunder or any Equipment may be sold, assigned, subleased, transferred, pledged or mortgaged
by Lessee.
ARTICLE XII: EVENTS OF DEFAULTAND REMEDIES
Section 12.1. Events of Default Defined. The following are Events of Default under each Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid
when due and the continuation of said failure for a period of ten (10) days (other than by reason of
Nan -Appropriation).
1doc.jlmlHunt CA 4c 11 7/20/01
(b) Failure by Lessee to maintain insurance as required by Article VI.
(c) Failure by Lessee to observe and perform any covenant, condition or agreement on
its part to be observed or performed hereunder, other than as referred to in Clauses (a) and (b) of
this Section, for a period of thirty (30) days after written notice specifying such failure and requesting
that it be remedied has been received by Lessee from Lessor, unless Lessor shall agree in writing to
an extension of such time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to
an extension of such time if corrective action is instituted by Lessee within the applicable period and
diligently pursued until the default is corrected.
(d) The determination by Lessor that any representation or warranty made by Lessee in
this Agreement was untrue in any material respect upon execution of this Agreement or any
Exhibit A or Exhibit B provided Lessee is given the opportunity to cure as set forth in Section 12.1(c)
hereof.
(e) The filing of a petition in bankruptcy by or against Lessee, or failure by Lessee
promptly to lift any execution, garnishment or attachment of such consequence as would impair the
ability of Lessee to carry on its governmental functions or assignment by Lessee for the benefit of
creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by
a court of competent jurisdiction of any adjustment of indebtedness of Lessee, or the dissolution or
liquidation of Lessee.
Section 12.2. Remedies on Default. Whenever any Event of Default shall have occurred, Lessor
shall have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor, with or without terminating any Lease, may declare all Rental Payments due
or to become due with respect to any or all Leases owned by it or an assignee of Lessor may
declare all Rental Payments due or to become due with respect to all Leases owned by such
assignee during the Fiscal Year in effect when the default occurs to be immediately due and payable
by Lessee, whereupon such Rental Payments shall be immediately due and payable.
(b) Lessor and its assignees, with or without terminating any Lease, may enter the
premises where the Equipment is kept and disable the Equipment subject to all Leases owned by it
or the same assignee to prevent further use thereof by Lessee and/or may repossess any or all of
the Equipment by giving Lessee written notice to deliver the Equipment in the manner provided in
Section 12.3; or in the event Lessee fails to do so within ten (10) days after receipt of such notice,
Lessor may enter upon Lessee's premises where the Equipment is kept and take possession of such
Equipment and charge Lessee for the reasonable costs incurred in repossessing the Equipment,
including reasonable attorneys' fees. Lessee hereby expressly waives any reasonable damages
occasioned by such repossession. Notwithstanding the fact that Lessor has taken possession of the
Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect
thereto during the Fiscal Year then in effect.
(c) If Lessor or its assignees terminates any Lease and, in its discretion, takes
possession and disposes of the Equipment or any portion thereof, the proceeds of any such
disposition shall be applied to pay the following items in the following order: (i) all reasonable costs
(including, but not limited to, reasonable attorneys' fees) incurred in securing possession of the
Equipment; (ii) all reasonable expenses incurred in completing the disposition; (iii) any sales or
transfer taxes; and (iv) the applicable Prepayment Prices of the Equipment Groups. Any disposition
proceeds remaining after the requirements of Clauses (i), (ii), (iii) and (iv) have been met shall be
paid to Lessee.
IdocJ1m\Hunt CA 4c 12 7120101
(d) Lessor may take any other remedy available, at law or in equity, with respect to such
Event of Default, including those requiring Lessee to perform any of its obligations or to pay any
moneys due and payable to Lessor and Lessee shall pay the reasonable attorneys' fees and
expenses incurred by Lessor in enforcing any remedy hereunder.
Section 12.3. Return of Equipment: Release of Lessee's Interest. Upon termination of any
Lease hereunder prior to the payment of all Rental Payments or the applicable Prepayment Price in
accordance with each Exhibit A. (i) Lessor may enter upon Lessee's premises where the Equipment
is kept and disable the Equipment to prevent its further use by Lessee and (ii) Lessee shall promptly,
but in any event within ten (10) days after such termination, at its own cost and expense: (a) perform
any reasonable testing and repairs required to place the Equipment in the condition required by
Article VII; (b) if deinstallation, disassembly or crating is required, cause the Equipment to be
deinstalled, disassembled and crated by an authorized manufacturer's representative or such other
service person as is reasonably satisfactory to Lessor; and (c) deliver the Equipment to a location in
the continental United States specified by Lessor, freight and insurance prepaid by Lessee. If
Lessee refuses to deliver the Equipment in the manner designated, Lessor may repossess the
Equipment and charge to Lessee the reasonable costs of such repossession. Upon termination of a
Lease in accordance with Article IV or Article XI I hereof, at the election of Lessor and upon Lessor's
written notice to Lessee, full and unencumbered legal title and ownership of the Equipment subject
thereto shall pass to Lessor, Lessee shall have no further interest therein and Lessee shall execute
and deliver to Lessor such documents as Lessor may reasonably request to evidence the passage
of legal title and ownership to Lessor and termination of Lessee's interest in the Equipment.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this
Article is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement. 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 by Lessor.
Section 12.5. Late Charge. Whenever any Event of Default under Section 12.1, Clause (a) shall
have happened and be continuing, Lessor shall have the right, at its option and without any further
demand or notice, to require a late payment charge accruing from the tenth day after the Payment
Date until the payment is made equal to the lesser of five cents ($.05) per dollar of the delinquent
amount per month or the lawful maximum, and Lessee shall be obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor; provided, however, that this Section
shall not be applicable if or to the extent that the application thereof would affect the validity of this
Agreement.
ARTICLE XIII: ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, or other communications hereunder shall be
sufficiently given and shall be deemed received when (a) personally delivered; or (b) three (3)
business days after being deposited in the United States mail in registered form with postage fully
prepaid; or (c) one (1) business day after being sent by reputable overnight courier, in each case to
the addresses specified on the execution page hereof; provided that Lessor and Lessee, by notice
given hereunder, may designate different addresses to which subsequent notices, certificates, or
other communications will be sent.
Section 13.2. Financial Information. Lessee will provide Lessor with current financial statements,
budgets, proof of appropriation for the ensuing Fiscal Year and such other financial information
reasonably necessary and relating to the ability of Lessee to continue this Agreement and any Lease
as may be requested by Lessor.
1doc.j1m\Hunt CA 4c 13 7120/01
Section 13.3. Binding Effect. This Agreement and each Lease hereunder shall inure to the benefit
of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.4. SeverabilitW. In the event any provision of this Agreement or any Lease shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
Section 13.5. _Entire Agreement, Amendments, Changes and Modifications. This Agreement
constitutes the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous writings, understandings, agreements, solicitation
documents and representations, express or implied, with respect to the subject matter hereof. This
Agreement may be amended or modified only by written documents duly authorized, executed and
delivered by Lessor and Lessee.
Section 13.6. Captions. The captions or headings in this Agreement are for convenience only and
in no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses
hereof.
Section 13.7. Further Assurances and Corrective Instruments. Lessor and Lessee agree that
they will, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Equipment
hereby leased or intended so to be, or for otherwise carrying out the expressed intention of this
Agreement.
Section 13.8. Execution in Counterparts. This Agreement may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument, provided that only the original of this Agreement and each Equipment
Schedule marked "Original - Chattel Paper" on the execution page thereof shall constitute chattel
paper under the Uniform Commercial Code.
Section 13.9. Applicable Law and Venue. This Agreement and each Lease shall be governed by
and construed in accordance with the laws of the State of California and any and all actions initiated
under this Agreement or concerning a dispute of its terms shall be brought solely and exclusively in
a court of competent jurisdiction in the County of Orange, California, and no other court.
Section 13.10. Financing Statement. A carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement in the State to perfect the security interests granted
to Lessor.
Section 13.11. U.. surv. It is the intention of the parties hereto to comply with any applicable usury
laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary herein or in any
Exhibit A, in no event shall this Agreement or any Lease hereunder require the payment or permit
the collection of Interest or any amount in the nature of Interest or fees in excess of the maximum
amount permitted by applicable law. Any such excess Interest or fees shall first be applied to reduce
Principal, and when no Principal remains, refunded to Lessee. In determining whether the Interest
paid or payable exceeds the highest lawful rate, the total amount of Interest shall be spread through
the applicable Lease Term so that the Interest is uniform through such term.
Section 13.12. Lessee's Performance. Time is of the essence. A parry's failure at any time to
require strict performance by the other of any obligations shall not waive or diminish such party's
rights thereafter to demand strict compliance by the other.
1docJJm%Hunt CA 4c 14 7/20101
Section 13.13. Third Party Beneficiaries. Nothing herein shall be construed or interpreted to give
any person other than Lessee and Lessor any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Lease. Lessor and Lessee agree that no Contractor is a third party
beneficiary of this Agreement and there are no third party beneficiaries of this Agreement.
Section 13.14. Waiver of Jury Trial. Lessor and Lessee hereby waive any right to trial by jury
in any action or proceeding with respect to, in connection with or arising out of this
Agreement or any Lease.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
1docJ1mlHunt CA 4c 15 7120/01
GE CAPITAL PUBLIC FINANCE, INC.
EXECUTION PAGE OF MASTER LEASE AGREEMENT
Agreement Date: July 16, 2001
Fiscal Year Commencement Date: October 1
Fiscal Year End Date: September 30
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name
by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by
its duly authorized officer.
CITY OF HUNTINGTON BEACH, a municipal GE CAPITAL PUBLIC FINANCE, INC.,
corporation of the State of California, Lessor
Lessee Q
7 '
_ B
Mayor
ATTEST:
City Clerk 61 Oval IF
APPROVED AS TA FORM:
I'M II
City Attorney
0f :�'�Z�i}
Name: Thomas E. Murphy
Title: Vice President
Date:
By:
Name:
Title:
INITIATED AND APPRO D: Date:
Fire Chief/Information Systems Director
REVIEWED AND APPROVED:
City AdmipWrator
Address: 2000 Main Street
Huntington Beach, CA 92648
-a5-0
and
Joanne L. Manthe
Secretary i
C? 5--o1
Address: 8400 Normandale Lake Blvd.
Suite 470
Minneapolis, MN 55437-1079
Idoc.jWHunt GA 4c 16 7/20101
•
•
Attention: Evonne Travers
Interim Network Manager
Telephone: 714-374-1701
Facsimile: 714-374-1614
Attention: Risk Management
Telephone: 800-346-3164
Facsimile: 952-897-5601
,,doc.jlmftnt GA 4c 17 7/20/01
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. «ADDOW
EXHIBIT A
Schedule of Equipment, Rental Payments, Etc.
The following Equipment comprises an Equipment Group which is the subject of the Master Lease
Agreement dated as of July 16, 2001 (the "Agreement"), between the undersigned Lessor and
Lessee. The Agreement is incorporated herein in its entirety, and Lessee hereby reaffirms all of its
representations and warranties contained in the Agreement. Lessee warrants that no Non -
Appropriation and no Event of Default or any event which, with the passage of time or the giving of
notice, would constitute a default has occurred under any Lease subject to the Agreement. In
accordance with the requirements of applicable State Law, Lessee has appropriated or obtained
sufficient appropriations to pay the Rental Payments due under this Lease in the current Fiscal Year
and such funds have not been expended for any other purpose.
Lease Date: ((LEASE DATE»
EQUIPMENT GROUP
K,
Location. The Equipment Group is located at the following address. If requested by Lessor,
Lessee will provide the complete legal descriptions of the property where the Equipment
Group is located. Prior to relocation of the Equipment Group or portion thereof during the
Lease Term, Lessee will provide written notice to Lessor.
Use. Lessee will use the Equipment Group to perform the following essential
governmental or proprietary functions:
3. Description. The following description of the Equipment Group is supplemented by the
description of items of Equipment in the Contractor's invoices delivered by Lessee to Lessor
and/or by the description of Equipment in Payment Request Forms executed by Lessor to
authorize disbursements from an Escrow Account.
W00 jim\Hunt CA 4c 1 7/20/01
A. DELIVERABLE EQUIPMENT
Quanti Cost Per Unit Description Serial Number*
((EQUIPMENT))
B. NONDELIVERABLE EQUIPMENT
Qua nti Cost Per Unit Description Serial Number'
((EQUIPMENT))
*If serial numbers are not available at the date of signing this Exhibit A, Lessee hereby authorizes
Lessor to insert the serial numbers when available and Lessor shall provide Lessee with a copy of
the completed Exhibit A.
RENTAL PAYMENTS
Lessee will make Rental Payments consisting of Principal and Interest at the annual rate as set forth
in the attached schedule.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
Attachment: Payment Schedule
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Title: Vice President
Date:
and
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
Original - Chattel Paper
ldoc jlm%Hunt CA 4c 2 7/20/01
GE CAPITAL PUBLIC FINANCE, INC.
PAYMENT SCHEDULE RELATING TO EQUIPMENT SCHEDULE NO. «ACCTNUMD
Date of Issue: , 200_
Funding Date: , 200_
Payment Payment Total Principal Interest Prepayment
Number Date Payment Com o�nent Component Price*
After payment of Rental Payment due on such date.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Title: Vice President
Date:
and
By.
Name: Joanne L. Manthe
Title: Secretary
Date:
Idoc_jlm\Hunt CA 4c
7/20/01
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. «ADDON»
EXHIBIT B
Certificate of Acceptance
I, the undersigned, hereby certify that I am the duly qualified and acting officer of the Lessee
identified below and, with respect to the above -referenced Equipment Schedule dated
<LEASE_DATE)) to the Master Lease Agreement dated as of July 16, 2001 (the "Agreement", and
together with such Equipment Schedule, the "Lease"), by and between Lessee and GE Capital
Public Finance, Inc. ("Lessor"), that:
9. The equipment described in Exhibit A (the "Equipment Group") has been delivered
and installed in accordance with Lessee's Specifications, is in good working order and is fully
operational and has been fully and finally accepted by Lessee on or before the date indicated below.
2. Rental Payments are due and payable by Lessee on the dates and in the amounts
indicated on Exhibit A of the above -referenced Equipment Schedule as such Exhibit is completed by
the parties.
CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California
Lessee
By:
Title:
Date:
Woc.jlmlHunt CA 4c 7120101
GE CAPITAL PUBLIC FINANCE, INC.
EXHIBIT C
Opinion of Counsel
(to be typed on letterhead of counsel) SAMPLE
[insert date which is date on or after date of Lessee's execution of documents]
GE Capital Public Finance, Inc. City of Huntington Beach
8400 Normandale Lake Blvd., Suite 470 2000 Main Street
Minneapolis, MN 55437 Huntington Beach, CA 92648
Re: Master Lease Agreement dated as of July 16, 2001 by and between GE Capital Public
Finance, Inc. ("Lessor") and the City of Huntington Beach ("Lessee")
[Counsel to expand opinion to include executed Addenda to Lease, if applicable,
and delete reference to Escrow Agreement, if not applicable]
Ladies and Gentlemen:
I have acted as counsel to Lessee with respect to the Master Lease Agreement described above
and various related matters, and in this capacity have reviewed a duplicate original or certified copy
thereof, Equipment Schedule No. «ADDONu attached thereto and executed pursuant thereto
(together, the "Lease") and the Escrow Agreement dated as of (the "Escrow
Agreement") among Lessor, Lessee and , as escrow agent. Based upon the
examination of these and such other documents as I deem relevant, it is my opinion that:
1. Lessee is a political subdivision of the state of <(STATE>) (the "State"), duly
organized, existing and operating under the Constitution and laws of the State.
2. Lessee is authorized and has power under applicable law to enter into the Lease and
the Escrow Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3. The Lease and the Escrow Agreement have been duly authorized, approved,
executed and delivered by and on behalf of Lessee, and are legal, valid and binding contracts of
Lessee enforceable in accordance with their terms, except to the extent limited by State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights.
4. The authorization, approval and execution of the Lease and the Escrow Agreement
and all other proceedings of Lessee relating to the transactions contemplated thereby have been
performed in accordance with all applicable open meeting, public records, public bidding and all
other laws, rules and regulations of the State.
5. The execution of the Lease and the Escrow Agreement and the appropriation of
moneys to pay the Rental Payments coming due thereunder for the current Fiscal Year of Lessee do
not and will not result in the violation of any constitutional, statutory or other limitation relating to the
manner, form or amount of indebtedness which may be incurred by Lessee.
\doc.jlm\Hunt CA 4c 1 7/20/01
. % 0
6. There is no litigation, action, suit or proceeding pending or before any court,
administrative agency, arbitrator or governmental body that challenges the organization or existence
of Lessee; the authority of Lessee or its officers or its employees to enter into the Lease or the
Escrow Agreement; the proper authorization, approval and/or execution of the Lease, the Escrow
Agreement and other documents contemplated thereby; the appropriation of moneys to make Rental
Payments under the Lease for the current Fiscal Year of Lessee; or the ability of Lessee otherwise
to perform its obligations under the Lease, the Escrow Agreement and the transactions
contemplated thereby and, to the best of my knowledge, no such litigation or actions are threatened.
7. The equipment financed by the Lease is personal property, and when used by the
Lessee will not be or become fixtures under the laws of the State.
8. The City Council of Lessee approved the transaction described in the Lease at a
meeting on , 20_, and such action has not been amended, modified,
supplemented or repealed and remains in full force and effect.
9. This opinion may be relied upon by assignees of Lessor.
Very truly yours,
SAMPLE -
(type name and title under signature)
1doc.jlmlHunl CA 4c 2 7/20/01
COMPUTER ADDENDUM
THIS ADDENDUM dated as of , 24_ to Equipment Schedule No.
«ACCTNUM» (the "Equipment Schedule") to the Master Lease Agreement dated as of July
16, 2001 (the "Agreement') is made and entered into by and between GE Capital Public
Finance, Inc. ("Lessor") and the City of Huntington Beach, a municipal corporation of the
State of California ("Lessee").
Capitalized terms not otherwise defined herein have the meanings ascribed to them in the
Equipment Schedule.
The following provisions are hereby incorporated into and made part of the Equipment
Schedule.
1. Provided there has been no Non -Appropriation or Event of Default under the Lease,
at least ninety (90) days but not more than one hundred twenty (120) days prior to
[insert date of last scheduled payment], (the "Termination Date"), or thirty
(30) days prior to the date Lessee exercises its option to pay the Prepayment Price, Lessee
may, at its option, provide written notice to Lessor that Lessee has elected to have Lessor
provide the Remarketing Assistance described below. The election shall be with respect to
the entire Equipment Group.
Remarketing Assistance. Within thirty (30) days after the Termination Date or within thirty
(30) days after the Prepayment Price is paid, Lessee shall deliver the entire Equipment
Group with the exception of the items of the Equipment Group described in the Equipment
Schedule under the caption "Nondeliverable Equipment' (the "Nondeliverable Equipment") to
Lessor or its designee upon the following terms and conditions.
(i) Lessee has paid Lessor all amounts due under the Equipment Schedule by
payment of all Rental Payments due thereunder or payment of the Prepayment Price and
has fully discharged its payment obligations thereunder;
(ii) Lessee delivers the Equipment Group (with the exception of the
Nondeliverable Equipment) in the manner and to the location as directed by Lessor or its
designee in the condition required by Section 7.2 of the Agreement and in accordance with
the following:
(a) Lessee, at least five (5) business days prior to its delivery of the
Equipment Group, provides Lessor a detailed written list of all components of the Equipment
Group (with the exception of the Nondeliverable Equipment), including a listing of model and
serial numbers for all components and a detailed listing of all internal circuit boards by both
the model and serial number for all hardware comprising the Equipment Group and a listing
of all software features listed individually.
(b) Upon request of Lessor, Lessee provides or causes the vendors or
manufacturers of the Equipment to provide Lessor the following documents: (1) one set of
service manuals and operating manuals, including replacements andlor additions thereto,
such that all documentation is up to date; and (2) one set of documents detailing Equipment
configuration, operating requirements, maintenance records and other technical data
concerning the set-up and operation of the Equipment, including replacements and/or
additions thereto, such that all documentation is up to date.
1doc.j1m\Hunt Comp Addendum 3c 1 716101
(c) Lessee shall cause all Equipment to be clean and cosmetically
acceptable, and in such condition so that it may be immediately installed and placed into use
in a similar environment.
(d) Lessee shall properly remove all of Lessee -installed markings that
are not necessary for the operation, maintenance or repair of the Equipment.
(e) Lessee shall provide for the deinstallation, packing, transporting and
certifying of the Equipment (exclusive of Nondeliverable Equipment) to the location in the
continental United States specified by Lessor or its designee. Lessee shall obtain and pay for
a policy of transit insurance for the delivery of the Equipment Group (exclusive of
Nondeliverable Equipment) in an amount equal to the replacement value of such Equipment
and Lessor and Lessee shall be named as the loss payees on all such policies of insurance.
Upon receipt of the Equipment by Lessor or Lessor's agent, the risk of loss therefor shall
pass to Lessor.
(iii) Lessor or its designee shall arrange for the commercially reasonable sale of
the delivered Equipment and Lessee hereby authorizes Lessor to arrange for a commercially
reasonable sale and hereby authorizes Lessor or its designee to execute a bill of sale for the
delivered Equipment in the form of Exhibit 1 hereto.
(iv) Upon sale of the delivered Equipment, Lessor shall provide written notice to
Lessee of the gross sale proceeds.
(v) Lessor shall pay all "Net Sale Proceeds" (gross sale proceeds less all costs,
expenses, fees, taxes, appraisals, including, but not limited to, all maintenance, repair and
remarketing fees) of the sold Equipment to Lessee within ten (10) business days after the
sale. The fees and expenses in the parenthetical in the prior sentence shall not exceed
of the gross sale proceeds.
2. All terms and conditions of the Lease remain in full force and effect.
3. If Lessor assigns the Equipment Schedule to which this Addendum relates, the rights
and obligations of Lessor under this Addendum are not sold to the assignee of the
Equipment Schedule but remain the rights and obligations of Lessor.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum as of the date
referenced above by their duly authorized representatives.
CITY OF HUNTINGTON BEACH, a municipal GE CAPITAL PUBLIC FINANCE, INC.,
corporation of the State of California, Lessor
Lessee
By:
Name:
Title:
Date:
By:
Name: Thomas E. Murphy
Title: Vice President
Date:
ldoc_jlmlHunt Comp Addendum 3c 2 716/01
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
1doc.jIrMHunt Camp Addendum 3c 3 716101
1
Exhibit I
BILL OF SALE
In consideration of the sum of $ (the "Purchase Price"), receipt of which is hereby
acknowledged, the City of Huntington Beach, a municipal corporation of the State of California ("Seller")
does hereby sell and transfer to (`Buyer") the personal property described in
Attachment A (the "Equipment"). The Equipment is in a used condition. Seller is neither a manufacturer of,
nor distributor of, nor a dealer or merchant in said Equipment or similar property.
Seller makes no warranty of merchantability with respect to the Equipment and the Equipment is sold in an
"AS IS, WHERE IS" condition, with all faults. By payment of the Purchase Price to Seller, Buyer affirms that
it has not relied on Seller's skill or judgment to select or furnish the Equipment for any particular purpose and
that Seller makes no warranty that the Equipment is fit for any particular purposes and there are no
representations or warranties, expressed, implied or statutory, except that Seller represents and warrants
that it owns the Equipment, the Equipment is free and clear of all liens and encumbrances arising through
Seller and Seller has full power, right and authority to sell the Equipment.
This is a final and exclusive expression of the agreement of Seller and Buyer and no course of dealing or
usage of trade or course of performance shall be relevant to explain or supplement any term expressed in
this Bill of Sale.
IN WITNESS WHEREOF, Seller has executed this instrument the _ day of ,
Attachment A
CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of
California, Seller
7I61o1
CITY OF HUNTINGTON BEACH
INTER -DEPARTMENT COMMUNICATION
To: Ray Si ministrator
From: Michael P. Dolder, Fire Chief/information Systems Director
Date: August 30, 2001
SUBJECT: REVISED CONTRACT — GE CAPITAL PUBLIC FINANCE
The attached contract with GE Capital Public Finance, Inc. was approved by the City
Council on July 16, 2001 and executed by the Mayor and City Clerk. The RGA included a
paragraph which allowed the City Attorney to make changes if necessary, Additional minor
changes to the attached documents may be required Staff requests that Council approve
the master lease agreement and ancillary documents in substantially the same form as set
forth in the attached documents, allowing minor changes, if any, without further Council
approval, but subject to approval of the City Attorney. Th ad
the contract (tabbed and highlighted in ye on the original} and they
4aaMoeneinWcorporated into a REVISED contract. As a result, your approval is required
on the revised contract.
If you have any questions, please call me at ext. 5401.
MPDlcgs
sImAdolderlmemo silver revised ge contract
Attachments
cc: Evonne Travers, Interim Network Coordinator
Colleen Keith, Acting Information Systems Manager
� t�v�►ns � s .5
..
Council/Agency Meeting Held: 41- 1►n-1
Q
Deferred/Continued to:
0—:i
A proved ❑ Conditionally Approved ❑ Denied
Arf- W Cler s Signature
Council Meeting Date: July 16, 2001
Department ID Number: FD 01-014
CITY OF HUNTINGTON BEACH
o
REQUEST FOR COUNCIL ACTION " ='
s c_,
0 �-<C-
SUBMITTED TO: HONORABLE MAYOR AND CITY OUNCIL MEMBERS z-Gc�
C.7rc
_Q n�:
SUBMITTED BY: RAY SILVER, City Administrat,�
n
w s
PREPARED BY: MICHAEL P. DOLDER, Fire Chief/Information Systems Direct
SUBJECT: APPROVE MASTER LEASE AGREEMENT WITH GE CAPITAL
PUBLIC FINANCE FOR NETWORK HARDWARE REPLACEMENT
Statement of issue, Funding Source, Recommended Action, Alternative Action(sj, Analysis, Environmental Status, Attachments]
Statement of Issue: Should the City of Huntington Beach enter into a master lease
agreement with GE Capital Public Finance in the amount of $375,000 annually, with a pre -
approved line of credit up to $2 million dollars, for the purpose of replacing five hundred
existing workstation computers, network servers and data switches which are at "end of life"?
Funding Source: The funds are not budgeted in the current fiscal year; funding will be from
the Equipment Replacement Fund (account number 553.31110) in the amount of $375,000
annually.
Recommended Action: MOTION TO:
1. Approve and authorize the Mayor and City Clerk to approve and execute a master
lease agreement with GE Capital Public Finance, Inc. in the amount of $375,000
annually from the Equipment Replacement Fund, with a pre -approved line of credit
up to $2 million dollars, with a maximum term not to exceed five years in
substantially the same form as the attached agreement.
2. Approve the City's obligation to indemnify GE Capital Public Finance and its
assignees pursuant to Section 6.4 of the master lease agreement.
3. Authorize Michael Dolder, Fire Chief/Information Systems Director, to execute all
ancillary documents on behalf of the City, without further approval of City Council
required, in substantially the same form as the attached documents.
4. Authorize City Attorney Gail Hutton to execute Exhibit C to the master lease
agreement, entitled "Opinion of Counsel", in substantially the same form as the
attached document.
Alternative Action(s): Deny the request and continue with current replacement/purchasing
practices.
REQUEST FOR COIL ACTION
MEETING DATE: July 16, 2001 DEPARTMENT ID NUMBER: FD 01-01
Analysis: A JD Edwards status report update was presented to the City Council at the
April 16, 2001 Study Session. A portion of that presentation identified computer
infrastructure issues affecting citywide system performance and replacement needs. The
severity of the current computer infrastructure hardware deficiencies requires an immediat{
action in order to assure viable computer operations. Waiting for the normal equipment
replacement budget cycle approvals jeopardizes the continued operational viability of the
City's computer system. Three major areas contribute to the computer infrastructure
deficiencies which include: mixed and outdated operating systems and workstation comp
hardware, outdated and unsupported network server hardware, and unsupported router a
data switch hardware.
Operating Systems and Workstation Computer Hardware
During recent years, the City has replaced workstation computers as needed, based on
funding availability. Unscheduled replacements have also occurred due to upgrades in
software programs that require higher speed processors. These changes have created
inconsistency in standardization not only in hardware, but in operating systems as well.
Currently, there are four operating systems in place; Windows 95, Windows 98, Windows
and Windows 2000. This mixture of operating systems and underpowered desktop corr,1
hardware makes it difficult to maintain and, in many cases, has impacted the communicat
link between programs such as JD Edwards, the City's new business financial system.
Utilizing numerous operating systems further dilutes an already lean IT support staff.
Microsoft support for Windows 95 will end in December 2001 making the migration to
Windows 2000 more critical.
Network Server Hardware
The City's network servers that process electronic e-mail, calendaring information, and V-
network backbone are also at "end of life." The existing server hardware is over six yea;
and has become unreliable. Replacement parts are difficult to obtain and, in many case;
are completely unavailable due to manufacturers' discontinuance. Server sizing and
operating capacity also requires resizing due to increases in the number of users and
operational dependency. Network servers are now primarily performing processing time
once provided by the Legacy mainframe computer. This increased dependency makes
replacement more critical.
Router and Data Switch Hardware
Associated with the server issue is the Gandalf Communication equipment, which enablf
communication between remote City sites and City Hall. Due to the age of this equipme
each component now requires continual rebooting on a daily basis to maintain Wide Are
Network connectivity. Rebooting takes as long as two hours per day to complete. The
manufacturer of the Router and Switch hardware within City Hall has also stopped mak°
the hardware. Complete replacement is necessary to continue wide area network and Ic
area network coverage.
FD01 014 GE Capital Network Hardware Replacement Dolder
71912001 3:21 PM
` ' I &QUEST FOR COUNCIL AC*N
MEETING DATE: July 16, 2001 DEPARTMENT ID NUMBER: FD 01-014
Lease Agreement
A master lease agreement (Attachment 3) has been proposed for the Fiscal Year 2001/2002
Equipment Replacement budget. The Fleet Management Committee and the City
Administrator has reviewed and recommended this request. However, due to the rapid
decline in equipment condition and urgency of replacement needs discussed above, it is
recommended that the master lease agreement be implemented ahead of schedule.
Additionally, the City will be able to take advantage of competitive interest rates that are
currently being offered while at the same time ensuring an across the board standardization
of operating systems, software programs, network hardware which are critical in maintaining
the daily operations of the City.
The master lease agreement allows the City to enter into different payment schedules with
different vendors providing the greatest purchasing flexibility to acquire the right hardware, at
the best price, and in the shortest time frame. The master lease provides funding for
complete replacement of network servers necessary to replace the legacy mainframe, the
installation of 500 desktop computers per year, and replacement routers and data switch
hardware. The interest rates being offered (Attachment 2) are 4.5% for 3 years and 4.8% for
5 years. With the current interest rate established at 5.9% the3 year lease interest will save
the City approximately $75,000. If the City chooses a 5-year lease, the interest rate would be
higher resulting in lower savings.
The master lease agreement includes an indemnification provision, Section 6.4, whereby the
City agrees to reimburse and indemnify GE Capital Public Finance and its assignees for all
claims arising out of the master lease agreement, the transactions contemplated therein, and
the equipment. The master lease agreement also includes a provision, Section 12.2{d),
whereby the City agrees to pay GE Capital Public Finance's reasonable attorney's fees and
expenses incurred in enforcing the master lease agreement. This provision deviates from
the City's standard each-party-pays-its-own-attorney's-fees provision. Additionally, pursuant
to Section 12.2(a) of the master lease agreement, if the City defaults on its payment
obligations under any payment schedule for equipment purchased from a specific vendor,
GE Capital Public Finance will be able to declare all payments immediately due and payable
under the payment schedules for equipment purchased from all vendors during the current
fiscal year.
Additional minor changes to the attached documents may be required. Staff requests that
Council approve the master leaae pgreenvmt and ancillary documents in substantially the
same form as set forth in the attached documents, egg minor changes, if any, without
further Council approval, but subject to approval of the City Attorney.
Environmental Status: None.
FD01 014 GE Capital Network Hardware Replacement Dolder -3-
719/2001 3:21 PM
s j ' 4DEQUEST FOR COUNCIL AQWN
MEETING DATE: July 16, 2001 DEPARTMENT 4D NUMBER: FD 41-014
Attach menus):
1. Financial Impact Statement
2. July 5, 2001 letter from GE Capital Public Finance setting forth the
terms of the transaction, including the interest rate and amount of the
line of credit
3. Master Lease Agreement with GE Capital Public Finance with its
accompanying exhibits
4. 1 Computer Addendum with its aceompanvinq exhibit
RCA Author: Travers/Madrigal/Dolder
FD01 014 GE Capital Network Hardware Replacement Dolder -4-
719/2001 3:21 PM
+ ,4*'►
GE CAPITAL PUBLIC FINANCE, INC.
EXECUTION PAGE OF MASTER LEASE AGREEMENT
Agreement Date: July 16, 2001
Fiscal Year Commencement Date: October 1
Fiscal Year End Date: September 30
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name
by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by
its duly authorized officer.
CITY OF HUNTINGTON BEACH, a municipal GE CAPITAL PUBLIC FINANCE, INC.,
corporation of the State of California, Lessor
Lessee
%AvM B
Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
.,,City Attorney
Name: Thomas E. Murphy
Title: Vice President
Date: !2 fo fD I
and
By: YL.0 4-1�
Name: Joanne L. Manthe
Title:
INITIATED AND APPR VED: Date:
Fire Chief/information stems Director
INITIATED AND APPROVED:
Ci as r
City Administrator
Secretajy
% o�Le
1doe jftHunt CA 3c 16
716101
4"
It
•
t o=uVn, John
From: Fuji!, John
Sent: Tuesday, July 24, 2001 2:54 PM
To: Dolder, Michael P.; Travers, Evonne
Subject: GE Capital Public Finance Agreement
I am sending you copies of the revised agreement with GE, which I received via FAX yesterday_ GE also sent a redline
document comparing the revised agreement to the one approved by City Council on July 16. 1 am sending you that redline
document as well.
GE will be sending us newly revised signature pages via Federal Express. Once we receive them, we will have to obtain
new signatures from the Mayor, etc.
Any questions, please call me.
John
Tracking: Recipient
Dolder, Michael P.
Travers, Evonne
Delivery
Delivered: 7/24/01 2:54 PM
Delivered: 7/24/01 2:54 PM
JUL 23 '01 09:06 FR GE=CPF/EXEC 552 697 5631 TO 917143741590 P.01
Y
f
1 J
GE Capital Public Finance, Inc.
8400 Normandale Lake Blvd., Suite 470
Minneapolis, MN 55437 �� ��� � � �
Phone: 952-897-5600 800-346-3164 ., ..
FAX 952-897-5631
TO:
Name:
Company:
Telephone:
Fax:
FACSIMILE TRANSMITTAL SHEET
14 614
Number of Pages Inctuding this Cover Sheet:
2q1 II
Name: ❑ Deb Frodl
Joanne Manthe
❑ Tom Murphy
I]
COMMENTS:
.16
Date: Q O!
Time: 9 r m CST
E 4 ;25
15g0
phone
952-897-5611
952-897-5603
952-897-5620
952-897-56
THIS FACSIMILE MESSAGE MAY CONTAIN INFORMATION WHICH IS PRIVILEGED,
CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAWS AND IS
INTENDED ONLY FOR THE USE OF THE INDIVIDUAL NAMED ABOVE AND OTHERS WHO HAVE
BEEN SPECIFICALLY AUTHORIZED TO RECEIVE IT. IF YOU ARE NOT THE INTENDED
RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR
COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS
COMMUNICATION IN ERROR, OR IF ANY PROBLEMS OCCUR WITH TRANSMISSION, PLEASE
NOTIFY US BY TELEPHONE, AND RETURN THE ORIGINAL MESSAGE TO US AT THE ABOVE
ADDRESS. THANK YOU.
JUL-23-2301 07:12
952 997 5631
98i
P.01
JUL 23 '01 09:15 FR GECPF/EXEC
•
952 697 5631 T❑ 917143741590
Is
P.25
O L
, 0-�
GE CAPIT
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement"), dated as of the Agreement Date, is made and
entered into by and between GE Capital Public Finance, Inc., a corporation duly organized and
existing under the laws of the state of Delaware, as lessor ("Lessor"), whose principal business
address is as shown on the execution page hereof, and the lessee identified on the execution page
hereof, a political subdivision of the State, as lessee ("Lessee"), whose address is as shown on the
execution page hereof.
In consideration of the mutual covenants herein contained, the parties hereto recite and agree as
follows:
ARTICLE I: DEFINITIONS AND EXHIBITS
Section 1.1. Definitions. The following terms have the meanings specified below unless the
context clearly requires otherwise.
Agreement: _ ement: This Master Lease Agreement and all Equipment Schedules hereto.
A reement Date: The date so designated on the execution page hereof.
Contractor: Each of the manufacturers or vendors from whom Lessee has ordered or with whom
Lessee has contracted for the manufacture, delivery and/or installation of the Equipment.
Counsel: An attomey duly admitted to the practice of law before the highest court of the State.
Date of Issue: With respect to each Lease, the date Interest starts to accrue as indicated in the
related Exhibit A_
Equipment: All items of personal property described in Equipment Schedules and subject to this
Agreement.
l uipment Gmup: The Equipment listed in a single Exhibit A.
Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A
and B which have been completed with respect to an Equipment Group and executed by Lessor and
Lessee.
Events of Default: With respect to each Lease, those events described in Section 12.1.
Fiscal Year: The 12-month fiscal period of Lessee which commences in every year and ends in
every year on the dates shown on the execution page hereof.
Funding Date: With respect to each Lease, the date Lessor makes payment to the Contractor(s) for
the purchase price of the related Equipment Group or, if the procedure described in Section 3.3 is
utilized, the date Lessor deposits funds into an Escrow Account.
Interest: The portion of any Rental Payment designated as and comprising interest as shown in any
Exhibit A.
1docjlmUHunt CA 4c 1 7120/01
JUL-23-2001 e7:21
552 e97 5631 96%
P.25
JUL 23 '01
GECFF/EXEC
9
TO 917143741590
Lease: With respect to each Equipment Group, this Agreement and the Equipment Schedule
relating thereto, which shall constitute a separate contract relating to such Equipment Group. This
Agreement contains the general terms and conditions with respect to each Lease. Lessor may
assign its rights under various Leases to different assignees. Each such assignee has the rights
only in the Lease it owns; a Non -Appropriation or Event of Default under a Lease owned by Lessor
or an assignee does not affect any of the Leases not owned by Lessor or by such assignee.
Lease Date: The date so designated in each Exhibit A.
Lease Term: With respect to any Equipment Group, the period during which the related Lease is in
effect as specified in Section 4,1.
Lessor: GE Capital Public Finance, Inc. and, for purposes of determining the ownership of a Lease,
shall include Lessor, General Electric Capital Corporation and their affiliates.
Lien: Any mortgage, security interest, lease, lien, pledge, charge, encumbrance or claim of any kind.
Net Proceeds: Any insurance proceeds or condemnation awards paid with respect to any
Equipment remaining after payment therefrom of all expenses incurred in the collection thereof.
Non -Appropriation: With respect to each Lease, the failure of Lessee or Lessee's governing body to
appropriate money for any Fiscal Year of Lessee sufficient for the continued performance by Lessee
of all of Lessee's obligations under a Lease, as evidenced by the passage of an ordinance or
resolution or other official action specifically prohibiting Lessee from performing its obligations under
a Lease with respect to any Equipment, and from using any moneys to pay any Rental Payments
due under a Lease for a designated Fiscal Year and all subsequent Fiscal Years.
Payment Date: The date upon which any Rental Payment is due and payable as provided in any
Exhibit A.
Principal: The portion of any Rental Payment designated as principal in any Exhibit A_
Prepayment Price: With respect to any Lease, as of the Payment Dates specified in the Exhibit A
relating thereto, the amount so designated and set forth opposite each such date in such Exhibit A.
Rental Pa ment: With respect to any Lease, the payment due from Lessee to Lessor on each
Payment Date during the Lease Term as shown in the Exhibit A relating thereto.
Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered
any Equipment from a Contractor.
State: The state in which Lessee is located.
State and Federal Law or Law: The Constitution and any law of the State and any charter,
ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the
United States, and any rule or regulation of any federal agency.
Section 1.2. Exhibits.
Exhibit A: Form of schedule executed by Lessor and Lessee describing an Equipment Group, and
setting forth the Rental Payments and Prepayment Prices,
Exhibit B: Form of Certificate of Acceptance executed by Lessee.
%doc.i(mlHunt CA do
JUL-23-2001 07:21
952 897 5631
99%
7/20/01
P.2E
JUL 23 '01 09:16 FR GECPF/EXEC 952 897 5631 TO 91
r
t
Exhibit G. Form of Opinion of Counsel to Lessee.
ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations, Warranties and Covenants of Lessee. Lessee represents and
warrants and covenants as follows:
(a) Lessee is a political subdivision of the State, duly organized and existing under the
Constitution and laws of the State, and is authorized under the Constitution and laws of the State to
enter into this Agreement, each Lease and the transactions contemplated hereby and thereby, and
to perform all of its obligations under this Agreement and each Lease.
(b) The execution and delivery of this Agreement and each Lease by the officer of
Lessee executing such documents has been duly authorized by a duly adopted resolution of
Lessee's governing body, or by other appropriate official action, and such action is in compliance
with all public bidding and other State and Federal Laws applicable to this Agreement, each Lease
and the acquisition and financing of the Equipment by Lessee. All requirements have been met and
procedures have occurred in order to ensure the enforceability of this Agreement and each Lease
against Lessee.
(c) Lessee will have the sole use and possession of the Equipment. Lessee will use the
Equipment only to perform essential governmental or proprietary functions of Lessee within the
scope of Lessee's authority. Lessee will not permit the Equipment to be used in, for or by any
private commercial activity.
(d) Lessee will take no action that would cause the Interest portion of the Rental
Payments to become includable in gross income of the recipient for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder (the "Regulations"), and Lessee will take and will cause its officers,
employees and agents to take all affirmative actions legally within its power necessary to ensure that
the Interest portion of the Rental Payments does not become includable in gross income of the
recipient for federal income tax purposes under the Code and Regulations; all as amended from time
to time (including, without limitation, the calculation and payment of any rebate required to preserve
such exclusion). Lessee will submit to the Secretary of the Treasury information reporting
statements and other information relating to each Lease at the times and in the forms required by
the Code and the Regulations.
(e) Lessee reasonably expects that it will not sell or otherwise dispose of all or part of an
Equipment Group during the related Lease Term.
(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity,
before or by any court, regulatory agency, public board or body pending or, to the best of Lessee's
knowledge, threatened against or affecting Lessee, which challenges Lessee's authority to enter into
this Agreement or any Lease or any other action wherein an unfavorable ruling or finding would
adversely affect the enforceability of this Agreement or any Lease hereunder or any other
transaction of the Lessee which is similar hereto, or the exclusion of the Interest from gross income
for federal tax purposes under the Code, or would materially and adversely affect any of the
transactions contemplated by this Agreement or any Lease, including, but not limited to, Lessee's
acquisition of Equipment.
(9) Upon execution of this Agreement and each Exhibit A, Lessee will provide to Lessor
an Opinion of its Counsel in the form attached hereto as Exhibit C and a copy of the resolution
adopted by its governing body with respect to this Agreement and each Lease or evidence of
1doc.ilmlHunt CA 40
7120101
JUL-23-2201 07:21 952 B97 5G31 ge% P•27
JELL 23 ' 01 09:16
another official action authorizing this Agreement and each Lease when such resolution or evidence
of another official action is prepared and released by the City Clerk of Lessee in the ordinary course
of business.
(h) Lessee has not and will not create or establish any sinking fund, reserve fund or
other similar fund to pay Rental Payments.
W Unless otherwise indicated on an Equipment Schedule, Lessee owns the real estate
and facilities where the Equipment will be located free and clear of any Liens and, during the Lease
Term, will continue to own such property and shall keep it free and clear of Liens.
0) Lessee acknowledges that (i) under Article XII of this Agreement, upon an Event of
Default, Lessor or the assignee, if any, of the related Lease may elect to terminate the related
Lease and each other Lease that is owned by Lessor or such respective assignee and (ii) upon a
Non -Appropriation the related Lease and each other Lease that is owned by Lessor or such
respective assignee shall terminate and Lessee is required upon the occurrence of (i) or (il) to
deliver all Equipment subject to the affected Leases as instructed by Lessor or such respective
assignee under Section 12.3 hereof.
ARTICLE Ili: LEASE OF EQUIPMENT
Section 3.1. A_cguisitign _of, Equipment. Lessee shall advise Lessor of its desire to acquire
equipment, the equipment cost, the Contractor of the equipment, expected delivery date and the
desired acquisition terms for such equipment. By execution hereof, Lessor has made no
commitment to lease any equipment to Lessee. Nothing herein shall obligate Lessor to lease any
equipment to Lessee until Lessor has executed an Exhibit A relating thereto. If Lessor, in its sole
discretion, determines the proposed equipment may be subject to a Lease hereunder, Lessor shall
furnish to Lessee a proposed Exhibit A relating to the Equipment Group completed insofar as
possible. Lessee shall order the Equipment Group from the appropriate Contractor or Contractors.
In no event shall Lessee enter into any contract with any Contractor or issue a purchase order which
references Lessor. Lessor shall have no obligation to make any payment to a Contractor or
reimburse Lessee for any payment it made to a Contractor for an Equipment Group (or, if the
alternative procedure described in Section 3.3 hereof is utilized, consent to a disbursement by the
Escrow Agent) until five (5) business days after Lessor has received all of the following in form and
substance satisfactory to Lessor. (a) an Exhibit A executed by Lessor and Lessee; (b) a Certificate
of Acceptance (However, if the alternative procedure in Section 3.3 is utilized, a Certificate of
Acceptance is not required until the entire Equipment Group is accepted); (c) evidence of official
action taken by or on behalf of the Lessee to authorize the acquisition of the Equipment Group on
the terms provided in Exhibit A (one official action may authorize several Leases); (d) evidence of
insurance with respect to the Equipment Group in compliance with Articles V1 of this Agreement;
(e) Contractor invoice(s) and/or bill of sale relating to the Equipment Group and if such invoices have
been paid by Lessee, evidence of payment thereof and, if applicable, evidence of official intent to
reimburse such payment as required by the Regulations; (f) as applicable, the original certificate of
title or manufacturer's certificate of origin and title application if any of the Equipment Group is
subject to certificate of title laws; (9) a completed and executed Form 8038-G or -GC or evidence of
filing thereof with the Secretary of Treasury; (h) an Opinion of Counsel and (i) any other documents
or items reasonably required by Lessor.
Section 3.2. Leases Enjoyment: Inspection. Lessor hereby leases to Lessee each Equipment
Group made subject to an Equipment Schedule, and Lessee hereby leases from Lessor such
Equipment Group, upon the terms and conditions set forth in this Agreement and in the related
Equipment Schedule. During the Lease Term, Lessee shalt peaceably and quietly have and hold
and enjoy the Equipment Group, except as expressly set forth in this Agreement. Lessee agrees
that Lessor and its agents shall have the right at all reasonable times to examine and inspect the
%doc.ilmkHunt GAAC 4 7120J01
JLiL--23-2001 07:22 952 897 5631 9e% P.2e
Equipment, and Lessor and its agents shall have such rights of access to the Equipment as may be
reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by
Lessee to perform its obligations hereunder. Notwithstanding the designation of GE Capital Public
Finance, Inc. as Lessor, GE Capital Public Finance, Inc. does not own the Equipment and by this
Agreement and each Lease is merely financing the acquisition thereof for Lessee. Lessor has not
been in the chain of title of the Equipment, does not operate, control or have possession of the
Equipment and has no control over the Lessee or the Lessee's operation, use, storage or
maintenance of the Equipment. Lessee is solely responsible for the selection of the Equipment, and
the manufacturer and vendor thereof, and is solely responsible for the use, maintenance, operation
and storage of the Equipment.
Section 3.3. Alternative Procedure. Escrow Agreement Notwithstanding the provisions of
Section 3.1, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired
and leased by Lessee under this Agreement, Lessor and Lessee enter into an escrow agreement
with an escrow agent establishing an account from which the Equipment Group cost is to be paid
(the "Escrow Account") (a) Lessor and Lessee shall immediately complete and execute an Exhibit A
relating to the Equipment Group; (b) the amount deposited by Lessor into the Escrow Account shall
be repaid by the Rental Payments due under the related Lease; and (c) the Rental Payments
relating to the Equipment Group shall have an aggregate Principal component equal to the amount
of Lessor's deposit into the Escrow Account and shall be due and payable as provided in the related
Exhibit A commencing upon the deposit of funds by Lessor into the Escrow Account. Lessee
acknowledges and agrees that no disbursements shall be made from an Escrow Account except for
portions of the Equipment Group which are operationally complete and functionally independent and
which may be utilized by Lessee without regard to whether the balance of the Equipment Group is
delivered and accepted.
ARTICLE IV: TERM
Section 4.1. Term. This Agreement shall be in effect from the Agreement Date and is incorporated
by reference into each Equipment Schedule executed hereunder; provided, however, no Equipment
Schedules shall be executed after any Non -Appropriation or Event of Default. Each Lease with
respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease
Date and ending as provided in Section 4,6,
Section 4.2. Termination by Lessee. in the sole event of Nan -Appropriation, the Lease as to
which the Non -Appropriation occurred and each Lease hereunder, owned by the same entity that
owns the Lease as to which the Non -Appropriation occurred, shall terminate, in whole, but not in
part, as to all Equipment subject to the affected Leases, effective upon the last day of the Fiscal
Year for which funds were appropriated, in the manner and subject to the terms specified in this
Article. Lessee may effect such termination by giving Lessor or the affected assignee a written
notice of termination and by paying any Rental Payments and other amounts which are due and
have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to
give notice of such termination not less than sixty (60) days prior to the end of the Fiscal Year for
which appropriations were made, and shall notify Lessor or the affected assignee of any anticipated
termination. In the event of termination of any Leases as provided in this Section, Lessee shall
comply with the instructions received from Lessor in accordance with Section 12.3.
Section 4.3. Intent To Continue Lease Term* Appropriations, Lessee presently intends to
continue each Lease hereunder for its entire Lease Term and to pay all Rental Payments relating
thereto. The person or entity in charge of preparing Lessee's budget will include in the budget
request for each Fiscal Year the Rental Payments to become due in -such Fiscal Year. The parties
acknowledge that appropriation for Rental Payments is a governmental function which Lessee
cannot contractually commit itself in advance to perform and this Agreement does not constitute
Idoc.ilmtHunt CA 4c 5 7/20101
JUL-23-2001 27:23 952 G97 5631 ge% P.29
JUL 23 '01 03:17 FIR GECPF/EXEC 952 697 5631 TO 9:
such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to
make all Rental Payments can and will lawfully be appropriated and: made available to permit
Lessee's continued utilization of the Equipment in the performance of its essential functions during
the applicable Lease Terms. Lessee will use funds appropnated for this Agreement for no other
purpose other than to pay Rental Payments and other amounts due hereunder.
Section 4.4. Effect of Termination. Upon termination of a Lease as provided in this Article,
Lessee shall not be responsible for the payment of any additional Rental Payments coming due in
succeeding Fiscal Years, but if Lessee has not complied with the instructions received from Lessor
in accordance with Section 12.3, the termination shall nevertheless be effective, but Lessee shall be
responsible for the payment of damages in an amount equal to the amount of the Rental Payments
that would thereafter have come due if this Agreement had not been terminated and which are
attributable to the number of days after which Lessee fails to comply with Lessor's or the related
assignee's reasonable instructions and for any other reasonable loss suffered by Lessor or the
related assignee as a result of Lessee's failure to take such reasonable actions as required.
Section 4.5. Reserved,
Section 4.6. Termination of Lease Term, The Lease Term with respect to any Lease will
terminate upon the occurrence of the first of the following events. (a) the termination of a Lease by
Lessee in accordance with Section 4.2; (b) the payment of the Prepayment Price by Lessee
pursuant to Article X; (c) an Event of Default by Lessee and Lessor's or the related assignee's
election to terminate such Lease pursuant to Article Xll; or (d) the payment by Lessee of all Rental
Payments and all other amounts authorized or required to be paid by Lessee pursuant to such
Lease.
ARTICLE V: RENTAL PAYMENTS
Section S.I. Rental Payments. Lessee agrees to. pay Rental Payments with respect to the Lease
of an Equipment Group during the related Lease Term in the amounts and on the dates specified in
the Exhibit A relating thereto. A portion of each Rental Payment is paid as and represents the
payment of Interest as set forth in Exhibit A of each Lease, and the first Rental Payment will include
Interest accruing from the Date of Issue. Lessor is authorized to insert the due date of the first
Rental Payment on Exhibit A. All Rental Payments shall be paid to Lessor, or to such assignee(s) to
which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor
or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay
the Rental Payments exclusively from moneys legally available therefor, in lawful money of the
United States of America.
Section 5.2. Current9xpense. The obligations of Lessee, including its obligation to pay the Rental
Payments due in any Fiscal Year of a Lease Term, shall constitute a current expense of Lessee for
such Fiscal Year and shall not constitute an indebtedness of Lessee within the meaning of the
Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes
or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of
Lessee for this Agreement and the Net Proceeds of the Equipment) to the payment of any Rental
Payment or other amount coming due hereunder.
Section 5.3. Rental Payments To Be Unconditional, Except as provided in Section 4.2, the
obligation of Lessee to make Rental Payments or any other payments required hereunder shall be
absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor
or between Lessee and Contractor or any other person, Lessee shall make all Rental Payments and
other payments required hereunder when due and shall not withhold any Rental Payment or other
payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or
1doc.iim\Hunt CA 4c 6 7/20/01
JUL-23-2081 07:23 952 897 5631 3e% P.30
JUL 23 '01 09:18 FIR 5ECPF/EXEC 952 897 5631 TC 917143741590 P.31
counterclaim against its obligation to make Rental Payments or other payments required hereunder.
Lessee's obligation to make Rental Payments or other payments shall not be abated through
accident, unforeseen circumstances, failure of the Equipment to be delivered or to perform as
desired, damage or destruction to the Equipment, loss of possession of the Equipment or
obsolescence of the Equipment.
ARTICLE VI: INSURANCE AND RISK OF LOSS
Section 6.1. Liability and Property Insurance. Lessee shall, at its own expense, maintain
continuously in effect during each Lease Term: (a) self-insurance for liability for personal injuries,
death or damage to or loss of property arising out of or in any way relating to the Equipment
sufficient to protect Lessor from liability in all events, with a coverage limit of not less than
$1,000,000 with a $25 million commercial insurance umbrella for liability claims, and (b) self-
insurance for property damage up to $25,000.00 with commercial umbrella coverage for damage in
excess of S25,000_00 and up to a maximum of $45 million.
Section 6.2. Workers' Compensation Insurance. If required by State Law, Lessee shall carry
workers' compensation insurance covering all employees o+), in, near or about the Equipment, and
upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Lease
Term_
Section 6.3. Requirements for All Insurance, All umbrella commercial insurance policies required
by this Article shall be taken out and maintained with insurance companies reasonably acceptable to
Lessor: and shall contain a provision that the insurer shall not cancel or revise coverage thereunder
without giving written notice to the insured parties at least thirty (30) days before the cancellation or
revision becomes effective. No insurance shall be subject to any co-insurance clause. Each
umbrella insurance policy required by this Article shall name Lessor as an additional insured party
and loss payee without regard to any breach of warranty or other act or omission of Lessee and shall
include a lender's loss payable endorsement for the benefit of Lessor. Prior to the delivery of
Equipment, Lessee shall deposit with Lessor evidence reasonably satisfactory to Lessor of such
insurance and, prior to the expiration thereof, shall provide Lessor evidence of all renewals or
replacements thereof.
Section 6.4. Risk of Loss. As between Lessor and Lessee, Lessee assumes all risks and liabilities
from any cause whatsoever, whether or not covered by insurance, for loss or damage to any
Equipment and for injury to or death of any person or damage to any property, whether such injury
or death be with respect to agents or employees of Lessee or of third parties, and whether such
property damage be to Lessee's property or the property of others, whether or not covered by
insurance, Lessee hereby assumes responsibility for and agrees to reimburse Lessor and its
assignees for and, to the extent permitted by law, will indemnify and hold Lessor and its assignees
harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions,
costs and expenses (including reasonable attorneys' fees) of whatsoever kind and nature, imposed
on, incurred by or asserted against Lessor that in any way relate to or arise out of this Agreement,
the transactions contemplated hereby and the Equipment, including but not limited to, (a) the
selection. manufacture, purchase, acceptance or rejection of Equipment or the ownership of the
Equipment, (b) failure of Equipment to be delivered, the delivery, lease, possession, maintenance,
use, condition, return or operation of the Equipment, (c) the condition of the Equipment sold or
otherwise disposed at the time Lessee relinquishes possession of the Equipment, (d) the conduct of
Lessee, its officers, employees and agents, (e) a breach of Lessee of any of its covenants or
obligations hereunder and (f) any claim, loss, cost or expense involving alleged damage to the
environment relating to the Equipment, including, but not limited to investigation, removal, cleanup
and remedial costs, except such floss or damage caused by or resulting from the gross negligence or
\doc.j1M\Hun% CA 4c 7 7120/0 3
JUL-23-2001 07:24 952 897 5631 9E% P.31
JUL 23 '01 09:18 FR GECPF/EXEC
952 897 5631 TO 9171437415(30 P.32
willful misconduct of Lessor or its assignees, or Lessor's or any of Lessors assignee's breach of this
Agreement. This provision shall survive the termination of this Agreement.
Section 6.5. Damage to or Destruction of Equipment. Lessee shall provide a complete written
report to Lessor within five (5) business days of any loss, theft, damage or destruction of any
Equipment and of any accident involving any Equipment which Lessee reasonably believes exceeds
$7,500.00, or when combined with prior losses exceeds $7,500.00. If all or any part of the
Equipment is lost, stolen, destroyed or damaged beyond repair ("Damaged Equipment"), Lessee
shall as soon as practicable after such event either. (a) replace the same at Lessee's sole cost and
expense with equipment having substantially similar Specifications and of equal or greater value to
the Damaged Equipment immediately prior to the time of the loss occurrence, such replacement
equipment to be subject to Lessor's reasonable approval, whereupon such replacement equipment
shall be substituted in the applicable Lease and the other related documents by appropriate
endorsement or amendment; or,(b) pay the applicable Prepayment Price of the Damaged Equipment
determined as set forth in the related Exhibit A. Lessee shall notify Lessor of which course of action
it will take within fifteen (15) days after the loss occurrence. If, within forty-five (45) days of the loss
occurrence, (a) Lessee fails to notify Lessor; (b) Lessee and Lessor fail to execute an amendment to
the applicable Equipment Schedule to delete the Damaged Equipment and add the replacement
equipment which failure is caused by Lessee or (c) Lessee has failed to pay the applicable
Prepayment Price, then Lessor may, at its sole but reasonable discretion, declare the applicable
Prepayment Price of the Damaged Equipment, to be immediately due and payable, and Lessee is
required to pay the same. The Net Proceeds of insurance with respect to the Damaged Equipment
shall be made available by Lessor to be applied to discharge Lessee's prepayment obligation under
this Section or to replace the Damaged Equipment if Lessee selects this option_ The payment of the
Prepayment Price and the termination of Lessor's interest in the Damaged Equipment is subject to
the terms of Section 10.3 hereof.
ARTICLE VII: OTHER OBLIGATIONS OF LESSEE
Section 7.1. Use Permits. Lessee shall exercise due care in the installation, use, operation and
maintenance of the Equipment, and shall not install, use, operate or maintain the Equipment
improperly, carelessly or for a purpose or in a manner contrary to that contemplated by this
Agreement. Lessee shall operate and maintain the Equipment fully in accordance with any
insurance policy provision, applicable prevailing industry standards and, if applicable, the
manufacturer's specifications therefor. Lessee shall obtain all permits and licenses necessary for
the installation, operation, possession and use of the Equipment. Lessee shall comply with all State
and Federal Laws applicable to the installation, use, possession and operation of the Equipment,
and if compliance with any such State and Federal Law requires changes or additions to be made to
the Equipment, such changes or additions shall be made by Lessee at its expense. Lessee shall not
use any item of Equipment to haul, convey, store, treat, transport or dispose of any "hazardous
substances" or "hazardous waste" as such terms are defined in any federal, state or local law, rule
or regulation pertaining to the protection of the environment (together, "Environmental Laws").
Lessee agrees that if Lessee is required to deliver any item of Equipment to Lessor or Lessons
agent, the Equipment shall be delivered free of all substances which are regulated by or form a basis
for liability under any Environmental Law. Lessee shall comply with all license and copyright
requirements of any software used in connection with the Equipment.
Section 7.2. Maintenance of Equipment by Lessee. Lessee shall keep the Equipment at the
address specified in the respective Exhibit A and shall notify Lessor in writing prior to moving the
Equipment to another address. Lessee shall, at its own expense, maintain, preserve and keep the
Equipment in good repair, working order and condition, and shall from time to time make all repairs
and replacements necessary to keep the Equipment in such condition, and in compliance with State
and Federal Laws, ordinary wear and tear excepted. Lessee shall maintain Equipment in a condition
%doc.jlmlHunt CA as 8 7/20/01
JUL-23-2001 07:24 952 997 5631 98%, P.32
JUL 23 '01 09:19 FR GECFF/EXEC
0
952 897 5631 TU r. »
suitable for certification by the manufacturer thereof (if certification is available). in the event that
any parts or accessories forming part of any item or items of Equipment become warn out, lost,
destroyed, damaged beyond repair or otherwise rendered unfit for use, Lessee, at its own expense
and expeditiously, will replace or cause the replacement of such parts or accessories by
replacement parts or accessories free and clear of all liens and encumbrances and with a value and
utility at least equal to that of the parts or accessories being replaced (assuming that such replaced
parts and accessories were otherwise 'in good working order and repair). All such replacement parts
and accessories shall be deemed to be incorporated immediately into and to constitute an integral
portion of the Equipment and, as such, shall be subject to the terms of this Agreement. Lessor shall
have no responsibility for any of these repairs or replacements.
Section 7.3. Taxes, Other Governmental Charges and Utility Charges. Except as expressly
limited by this Section, Lessee shall pay all taxes and other charges of any kind which are at any
time lawfully assessed or levied against or with respect to the Equipment, or any part thereof, or
which become due during the Lease Term, when assessed against Lessee. Lessee shall also pay
when due all utilities and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Equipment, and all special assessments and charges lawfully made by any
governmental body that may be secured by a lien on the Equipment; provided that with respect to
special assessments or other governmental changes that may lawfully be paid in installments over a
period of years, Lessee shall be obligated to pay only such installments as are required to be paid
during the Lease Term as and when the same become due. Lessee shall not be required to pay any
federal, state or local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts,
profit, excess profit, capital stock, corporate, or other similar tax payable by Lessor, its successors or
assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge
which is the obligation of Lessee under this Section.
Section 7.4. Advances. If Lessee shall fail to perform any of its obligations under this Article,
Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure,
including the advancement of money, and Lessee shall be obligated to repay all such advances on
demand, with interest at the rate of 18% per annum or the maximum rate permitted by law,
whichever is less, from the date of the advance to the date of repayment.
ARTICLE Vill: TITLE; SECURITY INTEREST; LIENS
Section 8.1. Title. During the Lease Term, legal title to and ownership of all Equipment and any
and all repairs, replacements, substitutions and modifications thereto shall be in Lessee and Lessee
shall take all actions necessary to vest such We and ownership in Lessee.
Section 8.2. Security interest Lessee grants to Lessor a continuing, first priority security interest
in and to the Equipment, all repairs, replacements, substitutions and modifications thereto or thereof
and all proceeds of the foregoing in order to secure Lessee's payment of all Rental Payments and
the performance of all other obligations to be performed by Lessee. Each Equipment Group
constitutes security and collateral for Lessee's obligations under all Leases that are owned by the
same entity. Lessee will join with Lessor in executing such financing statements or other documents
and will perform such acts as Lessor may reasonably request to establish and maintain a valid first
lien and perfected security interest in the Equipment. Lessee shall deliver or cause to be delivered
to Lessor the original certificates of title relating to all vehicular Equipment. If requested by Lessor.
Lessee shall obtain a landlord and/or mortgagee's consent and waiver with respect to the
Equipment. If requested by Lessor, Lessee shall conspicuously mark the Equipment with
appropriate lettering, labels or tags, and maintain such markings during the Lease Term, so as
clearly to disclose Lessor's security interest in the Equipment. Upon termination of a Lease with
respect to any Equipment Group through exercise of Lessee's option to prepay pursuant to
Articles X or through payment by Lessee of all Rental Payments and other amounts relating thereto,
1doc.jlmMunt CA do
JLL-23-2001 07 : 25
E7
952 897 5631
99%
7/20101
P.33
0
Lessors security interest in such Equipment Group shall terminate, and Lessor shall execute and
deliver to Lessee such documents as Lessee may reasonably request to evidence the termination of
Lessors security interest in such Equipment Group. Lessee agrees this is a security agreement
under the State's Uniform Commercial Code ("UCC") and Lessor may file financing statements with
respect to the Equipment as permitted by the UCC.
Section 8.3. Liens. During the Lease Term, Lessee shall not, directly or indirectly, create, incur,
assume or suffer to exist any Lien on or with respect to the Equipment, other than the respective
rights of Lessor and Lessee as herein provided. Except as expressly provided in Section 7.3 and
this Article, Lessee shall promptly, at its own expense, take such action as may be necessary to duly
discharge or remove any such Lien. Lessee shall reimburse Lessor for any reasonable expenses
incurred by Lessor to discharge or remove any Lien.
Section 8.4. Modification of Equipment. Lessee will not, without the prior written consent of
Lessor, which consent will not be unreasonably withheld, affix or install any accessory equipment or
device on any of the Equipment if such addition will change or impair the originally intended
functions, value or use of the Equipment.
Section 8.5. Personal Property. The Equipment is and shall at all times be and remain personal
property and not fixtures.
ARTICLE IX: WARRANTIES
Section 9.1. Selection of Equipment. The Equipment and the Contractor have been selected by
Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment,
the ordering of the Equipment, its suitability for the use intended by Lessee, the acceptance by the
Contractor or its sales representative of the order submitted, or any delay or failure by the Contractor
or its sales representative to manufacture, deliver or install the Equipment for use by Lessee.
Section 9.2. Contractors Warranties. Lessor hereby assigns to Lessee for and during the related
Lease Term, all of its interest, if any, in all Contractor's warranties, guarantees and patent indemnity
protection, express or implied, issued on or applicable to an Equipment Group, and Lessee may
obtain the customary services furnished in connection with such warranties and guarantees at
Lessee's expense. Lessor has no obligation to enforce any Contractor's warranties or obligations on
behalf of itself or Lessee.
Section 9.3, Disclaimer of Warranties. LESSEE ACKNOWLEDGES THAT IT SELECTED THE
EQUIPMENT WITHOUT ASSISTANCE OF LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE EQUIPMENT,
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT.
IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE
EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT.
ARTICLE X: OPTION TO PREPAY
Section 10.1. When Available. Provided there has been no Non -Appropriation or Event of Default,
Lessee shall have the option to prepay its obligations under any Lease on any Payment Date for the
then applicable Prepayment Price set forth in Exhibit A relating thereto. In addition, in the event an
Escrow Account is established for a Lease as described in Section 3.3 hereof, funds remaining in
1doc.jlm\Hunt CA 4c 10 7120/01
JUL-23-2001 07:25 552 B97 5631 98% P.34
JUL 23 '01 09:20 FIR OECPF/EXEC 952 897 5631 TO 917143741590 P.35
• •
such Escrow Account may be applied to prepay the Lease, in whole or in part, as provided in the
related escrow agreement.
Section 10.2. Exercise of Option. Except with respect to a prepayment with funds remaining in an
Escrow Account, Lessee shall give notice to Lessor of its intention to exercise its option with respect
to any Lease not less than thirty (30) days prior to the Payment Date on which the option will be
exercised and shall deposit with Lessor on the date of exercise an amount equal to all Rental
Payments and any other amounts then due or past due under the related Lease (including the
Rental Payment due on the Payment Date on which the option is exercised) and the applicable
Prepayment Price set forth in the related Exhibit A.
Section 10.3. Release of Lessor's Interest. On receipt of the Prepayment Price in good funds
with respect to any Equipment Group, the Lease with respect to such Equipment Group shall
terminate and all rights and interests of Lessor in such Equipment Group shall cease and Lessor will
deliver to Lessee all documents reasonably requested by Lessee to evidence the termination of all of
Lessor's interest in the Equipment Group. Upon termination of Lessors interest in the Equipment
Group, Lessee shall become entitled to such Equipment Group AS IS, WHERE IS, WITHOUT
WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE
USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any
lien or encumbrance created by or arising through Lessor. To the extent any Contractor's warranties
inured to the benefit of Lessor, Lessor hereby assigns them (without guaranty or any representation
as to such warranties) to Lessee.
ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment -by Lessor. All of Lessor's right, title and/or interest in and to this
Agreement or any Lease hereunder, including, but not limited to, the Rental Payments and other
amounts payable by Lessee and Lessor's interest in the Equipment, its rights upon Non -
Appropriation and Events of Default and its rights to provide consents under a Lease may be
assigned and reassigned to one or more assignees or subassignees by Lessor at any time, without
the consent of Lessee, provided 100% of Lessors rights in a Lease must be assigned in whole to a
single assignee. Upon assignment of a Lease by Lessor, Lessor's assignee shall have all rights of
Lessor in and to the assigned Lease. No such assignment shall be effective as against Lessee
unless and until written notice of the assignment is provided to Lessee and such notice must be
provided as soon as reasonably practical after the assignment. If requested, Lessee will
acknowledge in writing receipt of such notice. Lessee shall keep a complete and accurate record of
all such assignments; provided, however, in the event Lessor assigns its interest in this Agreement
or in a Lease to an affiliate or to another entity related to Lessor, Lessor shall maintain a record of
such assignment far the benefit of Lessee.
Section 11.2. Assignment and Subleasing by Lessee. Neither this Agreement nor any Lease
hereunder or any Equipment may be sold, assigned, subleased, transferred, pledged or mortgaged
by Lessee.
ARTICLE XII: EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The following are Events of Default under each Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid
when due and the continuation of said failure for a period of ten (10) days (other than by reason of
Non -Appropriation).
Woc,ilmVl unt CA 4c t 1 7/20101
JUL-23-2001 07:26 552 897 5631 99% P.35
•
•
(b) Failure by Lessee to maintain insurance as required by Article VI.
(c) Failure by Lessee to observe and perform any covenant, condition or agreement on
its part to be observed or performed hereunder, other than as referred to in Clauses (a) and (b) of
this Section, for a period of thirty (30) days after written notice specifying such failure and requesting
that it be remedied has been received by Lessee from Lessor, unless Lessor shall agree in writing to
an extension of such time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to
an extension of such time if corrective action is instituted by Lessee within the applicable period and
diligently pursued until the default is corrected.
(d) The determination by Lessor that any representation or warranty made by Lessee in
this Agreement was untrue in any material respect upon execution of this Agreement or any
Exhibit A or Exhibit B provided Lessee is given the opportunity to cure as set forth in Section 12.1(c)
hereof.
(e) The filing of a petition in bankruptcy by or against Lessee, or failure by Lessee
promptly to lift any execution, garnishment or attachment of such consequence as would impair the
ability of Lessee to carry on its governmental functions or assignment by Lessee for the benefit of
creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by
a court of competent jurisdiction of any adjustment of indebtedness of Lessee, or the dissolution or
liquidation of Lessee.
Section 12.2. Remedies on Default. Whenever any Event of Default shall have occurred, Lessor
shall have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor, with or without terminating any Lease, may declare all Rental Payments due
or to become due with respect to any or all Leases owned by it or an assignee of Lessor may
declare all Rental Payments due or to become due with respect to all Leases owned by such
assignee during the Fiscal Year in effect when the default occurs to be immediately due and payable
by Lessee, whereupon such Rental Payments shall be immediately due and payable.
(b) Lessor and its assignees, with or without terminating any Lease, may enter the
premises where the Equipment is kept and disable the Equipment subject to all Leases owned by it
or the same assignee to prevent further use thereof by Lessee and/or may repossess any or all of
the Equipment by giving Lessee written notice to deliver the Equipment in the manner provided in
Section 12.3; or in the event Lessee fails to do so within ten (10) days after receipt of such notice,
Lessor may enter upon Lessee's premises where the Equipment is kept and take possession of such
Equipment and charge Lessee for the reasonable costs incurred in repossessing the Equipment,
including reasonable attorneys' fees. Lessee hereby expressly waives any reasonable damages
occasioned by such repossession. Notwithstanding the fact that Lessor has taken possession of the
Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect
thereto during the Fiscal Year then in effect.
(c) If Lessor or its assignees terminates any Lease and, in its discretion, takes
possession and disposes of the Equipment or any portion thereof, the proceeds of any such
disposition shall be applied to pay the follow'mg items in the following order: (i) all reasonable costs
(including, but not limited to, reasonable attorneys' fees) incurred in securing possession of the
Equipment; (ii) all reasonable expenses incurred in completing the disposition; (iii) any sales or
transfer taxes; and (iv) the applicable Prepayment Prices of the Equipment Groups. Any disposition
proceeds remaining after the requirements of Clauses (i), (ii), (iii) and (iv) have been met shall be
paid to Lessee.
1doc.jlm\Hunt CA AC 12 7/20101
JUL-23-2001 07:26 952 e97 5631 99%, P.36
JUL 23 '01 09:21 FR GECPF/EXEC
9
952 e97 5631 TO 917143741590
0
P.37
(d) Lessor may take any other remedy available, at law or in equity, with respect to such
Event of Default, including those requiring Lessee to perform any of its obligations or to pay any
moneys due and payable to Lessor and Lessee shall pay the reasonable attorneys' fees and
expenses incurred by Lessor in enforcing any remedy hereunder.
Section 12.3. Return of Equipment; Release of Lessee's Interest. Upon termination of any
Lease hereunder prior to the payment of all Rental Payments or the applicable Prepayment Price in
accordance with each Exhibit A: (i) Lessor may enter upon Lessee's premises where the Equipment
is kept and disable the Equipment to prevent its further use by Lessee and (ii) Lessee shall promptly,
but in any event within ten (10) days after such termination, at its own cost and expense: (a) perform
any reasonable testing and repairs required to place the Equipment in the condition required by
Article VII; (b) if deinstallation, disassembly or crating is required, cause the Equipment to be
deinstalled, disassembled and crated by an authorized manufacturer's representative or such other
service person as is reasonably satisfactory to Lessor; and (c) deliver the Equipment to a location in
the continental United States specified by Lessor, freight and insurance prepaid by Lessee. If
Lessee refuses to deliver the Equipment in the manner designated, Lessor may repossess the
Equipment and charge to Lessee the reasonable costs of such repossession. Upon termination of a
Lease in accordance with Article IV or Article XI1 hereof, at the election of Lessor and upon Lessor's
written notice to Lessee, full and unencumbered legal title and ownership of the Equipment subject
thereto shall pass to Lessor, Lessee shall have no further interest therein and Lessee shall execute
and deliver to Lessor such documents as Lessor may reasonably request to evidence the passage
of legal title and ownership to Lessor and termination of Lessee's interest in the Equipment.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this
Article is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement. 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 by Lessor.
Section 12,5. late Charge. Whenever any Event of Default under Section 12.1, Clause (a) shall
have happened and be continuing, Lessor shall have the right, at its option and without any further
demand or notice, to require a late payment charge accruing from the tenth day after the Payment
Date until the payment is made equal to the lesser of five cents ($.05) per dollar of the delinquent
amount per month or the lawful maximum, and Lessee shall be obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor; provided, however, that this Section
shall not be applicable if or to the extent that the application thereof would affect the validity of this
Agreement.
ARTICLE XIII: ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, or other communications hereunder shall be
sufficiently given and shall be deemed received when (a) personally delivered; or (b) three (3)
business days after being deposited in the United States mail in registered form with postage fully
prepaid; or (c) one (1) business day after being sent by reputable overnight courier, in each case to
the addresses specified on the execution page hereof; provided that Lessor and Lessee, by notice
given hereunder, may designate different addresses to which subsequent notices, certificates, or
other communications will be sent.
Section 13.2. Financial Information. Lessee will provide Lessor with current financial statements,
budgets, proof of appropriation for the ensuing Fiscal Year and such other financial information
reasonably necessary and relating to the ability of Lessee to continue this Agreement and any Lease
as may be requested by Lessor.
1doc.jlmlHunt CA 4t 13 MOM
JUL-23-2001 07:27
952 997 5631 g@;,
P.37
JUL 23 '01 09:21 FR GECPF/EXEC
0
952 697 5631 TO 917143741590
0
P.38
Section 13.3. Binding Effect. This Agreement and each Lease hereunder shall inure to the benefit
of and shall be binding upon Lessor and Lessee and their respective successors and assigns_
Section 13.4. Severability. In the event any provision of this Agreement or any Lease shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
Section 13.5. Entire Agreement, Amendments Changes and Modifications. This Agreement
constitutes the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous writings, understandings, agreements, solicitation
documents and representations, express or implied, with respect to the subject matter hereof_ This
Agreement may be amended or modified only by written documents duly authorized, executed and
delivered by Lessor and Lessee.
Section 13.6. Captions. The captions or headings in this Agreement are for convenience only and
in no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses
hereof.
Section 13.7. Further Assurances and Corrective Instruments. Lessor and Lessee agree that
they will, from time to time, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Equipment
hereby leased or intended so to be, or for otherwise carrying out the expressed intention of this
Agreement.
Section 13.8. Execution in Counterparts. This Agreement may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument, provided that only the original of this Agreement and each Equipment
Schedule marked "Original - Chattel Paper" on the execution page thereof shall constitute chattel
paper under the Uniform Commercial Code.
Section 13.9. Applicable Law and Venue. This Agreement and each Lease shall be governed by
and construed in accordance with the laws of the State of California and any and all actions initiated
under this Agreement or concerning a dispute of its terms shall be brought solely and exclusively in
a court of competent jurisdiction in the County of Orange, California, and no other court.
Section 13.10. Financing Statgment. A carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement in the State to perfect the security interests granted
to Lessor.
Section 13.11. U_ s_u_r�c. It is the intention of the parties hereto to comply with any applicable usury
laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary herein or in any
Exhibit A, in no event shall this Agreement .or any Lease hereunder require the payment or permit
the collection of Interest or any amount in the nature of Interest or fees in excess of the maximum
amount permitted by applicable law. Any such excess Interest or fees shall first be applied to reduce
Principal, and when no Principal remains, refunded to Lessee. In determining whether the Interest
paid or payable exceeds the highest lawful rate, the total amount of Interest shall be spread through
the applicable Lease Term so that the Interest is uniform through such term.
Section 13.12. Lessee's Performance. Time is of the essence. A party's failure at any time to
require strict performance by the other of any obligations shall not waive or diminish such party's
rights thereafter to demand strict compliance by the other.
wac.jlm\Hunt CA 4c 14 7/20101
JUL-23-2001 07:27 952 997 5631 98% P.38
JUL. 23 '01 09:22 FR UECPF/EXEC 952 897 5631 TO 917143741590 P.39
•
•
Section 13.13. Third Party Beneficiaries. Nothing herein shall be construed or interpreted to give
any person other than Lessee and Lessor any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Lease. Lessor and Lessee agree that no Contractor is a third party
beneficiary of this Agreement and there are no third party beneficiaries of this Agreement.
Section 13.14. Waiver of Jury Trial. Lessor and Lessee hereby waive any right to trial by jury
in any action or proceeding with respect to, in connection with or arising out of this
Agreement or any Lease.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
1doc.jlmlHunt CA 4C
JUL-23-2001 07:27
15
952 897 5631
997
7/20/01
P.39
JUL 23 '01 09:22 FR GECPF/EXEC 352 897 5631 TO 917143741590 P.40
GE CAPITAL PUBLIC FINANCE, INC.
EXECUTION PAGE OF MASTER LEASE AGREEMENT
Agreement Date: July 16, 2001
Fiscal Year Commencement Date: October 1
Fiscal Year End Date: September 30
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name
by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by
its duly authorized officer.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
Mayor
ATTEST:
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Name: Thomas E. Murphy
Title: Vice President
Date:
City Clerk
and
APPROVED AS TO FORM:
City Attorney
INITIATED AND APPROVED:
Fire ChieflInformation Systems Director
REVIEWED AND APPROVED:
City Administrator
Address: 2000. Main Street
Huntington Beach, CA 92648
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
Address: 8400 Normandale Lake Blvd.
Suite 470
Minneapolis. MN 55437-1079
1doc.j1mlHunt CA 4c
JLJL-23-2001 07:27
16
952 B97 5631
99%
7I20/01
P.40
JUL 23 '01 09:22 FK 5ECPF/EXEC 952 697 5631 TO 917143741550
4
P. 41
Attention: Evonne Travers Attention: Risk Management
Interim Network Manager
Telephone: 714-374-1701 Telephone: 800-346-3164
Facsimile: 714-374-1614 Facsimile: 952-897-5601
Original - Chattel Paper
ldoo jlmlHunt CA 4c
JLL-23-2001 07:29
17
952 897 5631 99%
7120101
P.41
JUL 23 '01 09:22 FR GECPF/EXEC 952 697 5631 TO 9171437415130 P.42
0 0
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. «ADDOW
EXHIBIT A
Schedule of Equipment, Rental Payments, Etc.
The following Equipment comprises an Equipment Group which is the subject of the Master Lease
Agreement dated as of July 16, 2001 (the "Agreement"), between the undersigned Lessor and
Lessee. The Agreement is incorporated herein in its entirety, and Lessee hereby reaffirms all of its
representations and warranties contained in the Agreement. Lessee warrants that no Non -
Appropriation and no Event of Default or any event which, with the passage of time or the giving of
notice, would constitute a default has occurred under any Lease subject to the Agreement. In
accordance with the requirements of applicable State Law, Lessee has appropriated or obtained
sufficient appropriations to pay the Rental Payments due under this Lease in the current Fiscal Year
and such funds have not been expended for any other purpose.
Lease Date: ((LEASE DATE)>
EQUIPMENT GROUP
Location. The Equipment Group is located at the following address. If requested by Lessor,
Lessee will provide the complete legal descriptions of the property where the Equipment
Group is located_ Prior to relocation of the Equipment Group or portion thereof during the
Lease Term, Lessee will provide written notice to Lessor.
2. Use. Lessee will use the Equipment Group to perform the following essential
governmental or proprietary functions:
3. Description, The following description of the Equipment Group is supplemented by the
description of items of Equipment in the Contractor's invoices delivered by Lessee to Lessor
andlor by the description of Equipment in Payment Request Forms executed by Lessor to
authorize disbursements from an Escrow Account.
1doc.jlmwunt GA 4c
7120/01
JLL-23-2001 07:28 952 897 5631 98% P.42
JUL 23 '01 05:23 FIR GECPF/EXEC
952 897 5631 TO 917143741590 P.43
0
A. DELIVERABLE EQUIPMENT
Quanti Cost Per Unit
B. NON DELIVER_ASLE E0IPMENT
Quanti Cost Per Unit
Description Serial Number`
((EQUIPMENT))
Description Serial Number'
uEQUIPMENT))
'If serial numbers are not available at the date of signing this Exhibit A, Lessee hereby authorizes
Lessor to insert the serial numbers when available and Lessor shall provide Lessee with a copy of
the completed Exhibit A.
RENTAL PAYMENTS
Lessee will make Rental Payments consisting of Principal and Interest at the annual rate as set forth
in the attached schedule.
CITY OF HUNTINGTON 6EACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
Attachment: Payment Schedule
1doc.jlmlHunt CA 4c
JUL-23-2001 07:2e
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Title: Vice President
Date:
and
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
Original -Chattel Paper
2
952 997 5631
7120/01
98Y
P.43
JUL 23 '01 09:23 FR GECPF/F-XEC
4 t
952 897 5631 TO 917143741550
0
GE CAPITAL PUBLIC FINANCE, INC.
PAYMENT SCHEDULE RELATING TO EQUIPMENT SCHEDULE NO. «ACCTNUW
Date of Issue_ , 200
Funding Date: 200`
Payment Payment Total Principal Interest Prepayment
Number Date Payment Component Component Price'
After payment of Rental Payment due on such date.
CITY OF HUNTINGTON BEACH, a municipal GE CAPITAL PUBLIC FINANCE, INC.,
corporation of the State of California, Lessor
Lessee
By: By:
Title: Title: Vice President
Date: Date:
and
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
1doa.jlrnlHunt CA 4c 7/20/01
JUL-23-2201 07:28
952 897 5631
99%
P.44
•
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. uADDON-D
EXHIBIT B
Certificate of Acceptance
i, the undersigned, hereby certify that I am the duly qualified and acting officer of the Lessee
identified below and, with respect to the above -referenced Equipment Schedule dated
aLEASE_DATE* to the Master Lease Agreement dated as of July 16, 2001 (the "Agreement", and
together with such Equipment Schedule,, the "Lease"), by and between Lessee and GE Capital
Public Finance, Inc. ("Lessor"), that:
1. The equipment described in Exhibit A (the "Equipment Group") has been delivered
and installed in accordance With Lessee's Specifications, is in good working order and is fully
operational and has been fully and finally accepted by Lessee on or before the date indicated below.
2. Rental Payments are due and payable by Lessee on the dates and in the amounts
indicated on Exhibit A of the above -referenced Equipment Schedule as such Exhibit is completed by
the parties.
CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California
Lessee
By:
Title:
Date:
\doo.yim\Hunt CA 4c
7/2o/01
JUL-23-2eOl 07:29 952 897 5631 98/1 P.45
JUL 23 '01 @9:23 FR UECPF/EXEC 952 897 5631 TO 51714374159@ P.46
0 0
GE CAPITAL PUBLIC FINANCE, INC.
EXHIBIT C
Opinion of Counsel
(to be typed on letterhead of counsel) SAMPLE
(insert date which is date on or after date of Lessee's execution of documents]
GE Capital Public Finance, Inc. City of Huntington Beach
8400 Normandale Lake Blvd., Suite 470 2000 Main Street
Minneapolis, MN 55437 Huntington Beach, CA 92648
Re: Master Lease Agreement dated as of July 16, 2001 by and between GE Capital Public
Finance, Inc. ("Lessor") and the City of Huntington Beach ("Lessee")
[Counsel to expand opinion to include executed Addenda to Lease, if applicable,
and delete reference to Escrow Agreement, if not applicable]
Ladies and Gentlemen:
I have acted as counsel to Lessee with respect to the Master Lease Agreement described above
and various related matters, and in this capacity have reviewed a duplicate original or certified copy
thereof, Equipment Schedule No. ((ADDON)) attached thereto and executed pursuant thereto
(together, the "Lease") and the Escrow Agreement dated as of (the "Escrow
Agreement") among Lessor, lessee and , as escrow agent. Based upon the
examination of these and such other documents as I deem relevant, it is my opinion that'.
. 1. Lessee is a political subdivision of the state of uSTATEv (the "State"), duly
organized, existing and operating under the Constitution and laws of the State.
2. Lessee is authorized and has power under applicable law to enter into the Lease and
the Escrow Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3. The Lease and the Escrow Agreement have been duly authorized, approved,
executed and delivered by and on behalf of Lessee, and are legal, valid and binding contracts of
Lessee enforceable in accordance with their terms, except to the extent limited by State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights.
4. The authorization, approval and execution of the Lease and the Escrow Agreement
and all other proceedings of Lessee relating to the transactions contemplated thereby have been
performed in accordance with all applicable open meeting, public records, public bidding and all
other laws, rules and regulations of the State.
5. The execution of the Lease and the Escrow Agreement and the appropriation of
moneys to pay the Rental Payments coming due thereunder for the current Fiscal Year of Lessee do
not and will not result in the violation of any constitutional, statutory or other limitation relating to the
manner, form or amount of indebtedness which may be incurred by Lessee.
1doc.j1m\Hunt CA 4C t 7/20101
JUL-23-2001 07:29 952 897 5631 98% P.46
JUL 4�-� " b1 Uy; 24 rK 5tc� thy'( 7b.51 I U '71 r14,) (4i:)7u t. 4 f
6. There is no litigation, action, suit or proceeding pending or before any court,
administrative agency, arbitrator or governmental body that challenges the organization or existence
of Lessee; the authority of Lessee or its officers or its employees to enter into the Lease or the
Escrow Agreement; the proper authorization, approval and/or execution of the tease, the Escrow
Agreement and other documents contemplated thereby; the appropriation of moneys to make Rental
Payments under the Lease for the current Fiscal Year of Lessee; or the ability of Lessee otherwise
to perform its obligations under the Lease, the Escrow Agreement and the transactions
contemplated thereby and, to the best of my knowledge, no such litigation or actions are threatened.
7. The equipment financed by the Lease is personal property, and when used by the
Lessee will not be or become fixtures under the laws of the State.
8. The City Council of Lessee approved the transaction described in the Lease at a
meeting on . 20____, and such action has not been amended, modified,
supplemented or repealed and remains in full force and effect.
9. This opinion may be relied upon by assignees of Lessor.
Xdoc.jlmlHunt CA 4c
Very truly yours,
SAMPLE -
(type name and title under signature)
2
7/20101
** TOTAL PAGE.47 **
3UL-23-2001 07:29 9S2 e97 5631 9?% P.47
JUL 23 '01 09:06 FR GECFF/EXEC
952 857 5631 TO 917143741590 P.02
01
Rt r
GE CAPITAL PUBLIC FINANCE, INC.
MASTER LEASE AGREEMENT
THIS MASTER LEASE AGREEMENT ("Agreement'), dated as of the Agreement Date, is made and
entered into by and between GE Capital Public Finance, Inc., a corporation duly organized and
existing under the laws of the state of Delaware, as lessor ("Lessor"), whose principal business
address is as shown on the execution page hereof; and the lessee identified on the execution page
hereof, a political subdivision of the State, as lessee ("Lessee"), whose address is as shown on the
execution page hereof.
In consideration of the mutual covenants herein contained, the parties hereto recite and agree as
follows:
ARTICLE 1: DEFINITIONS AND EXHIBITS
Section 1.1. Definitions. The following terms have the meanings specified below unless the
context clearly requires otherwise_
Agreement: This Master Lease Agreement and all Equipment Schedules hereto.
Agreement Date: The date so designated on the execution page hereof.
Contractor: Each of the manufacturers or vendors from whom Lessee has ordered or with whom
Lessee has contracted for the manufacture, delivery and/or installation of the Equipment.
Counsel: An attorney duly admitted to the practice of law before the highest court of the State.
Date of Issue: With respect to each Lease, the date Interest starts to accrue as indicated in the
related Exhibit A.
E ui ment: All items of personal property described in Equipment Schedules and subject to this
Agreement.
Equipment Group: The Equipment listed in a single Exhibit A.
Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A
and B which have been completed with respect to an Equipment Group and executed by Lessor and
Lessee.
Events of Default: With respect to each Lease, those events described in Section 12.1.
Fiscal Year: The 12-month fiscal period of Lessee which commences in everyyear and ends in
every year on the dates shown on the execution page hereof.
Funding Date: With respect to each Lease, the date Lessor makes payment to the Contractor($) for
the purchase price of the related Equipment Group or, if the procedure described in Section 3.3 is
utilized, the date Lessor deposits funds into an Escrow Account.
Interest: The portion of any Rental Payment designated as and comprising interest as shown in any
Exhibit A.
1doc.jlmkHunt CA 3c_q 1 7/62201
JUL-23-2001 07:12
552 897 5631
Sex
a
JUL
Lease: With respect to each Equipment Group, this Agreement and the Equipment Schedule
relating thereto, which shall constitute a separate contract relating to such Equipment Group. This
Agreement contains the general terms and conditions with respect to each Lease. Lessor may
assign its rights under various Leases to different assignees. Each such assignee has the rights
only in the Lease it owns; a Non -Appropriation or Event of Default under a Lease owned by Lessor
or an assignee does not affect any of the Leases not owned by Lessor or by such assignee.
Lease Date: The date so designated in each Exhibit A.
Lease Term: With respect to any Equipment Group. the period during which the related Lease is in
effect as specified in Section 4,1.
Lessor: GE Capital Public Finance, Inc. and, for purposes of determining the ownership of a Lease,
shall include Lessor, General Electric Capital Corporation and their affiliates.
Lien: Any mortgage, security interest, lease, lien, pledge, charge, encumbrance or claim of any kind.
Net Proceeds: Any insurance proceeds or condemnation awards paid with respect to any
Equipment remaining after payment therefrom of all expenses incurred in the collection thereof.
Non -Appropriation: With respect to each Lease, the failure of Lessee or Lessee's governing body to
appropriate money for any Fiscal Year of Lessee sufficient for the continued performance by Lessee
of all of Lessee's obligations under a Lease, as evidenced by the passage of an ordinance or
resolution or other official action specifically prohibiting Lessee from performing its obligations under
a Lease with respect to any Equipment, and from using any moneys to pay any Rental Payments
due under a Lease for a designated Fiscal Year and all subsequent Fiscal Years -
Payment -Date: The date upon which any Rental Payment is due and payable as provided in any
Exhibit A.
Princi al: The portion of any Rental Payment designated as principal in any Exhibit A.
Prepayment Price: With respect to any Lease, as of the Payment Dates specified in the Exhibit A
relating thereto, the amount so designated and set forth opposite each such date in such Exhibit A.
Rental Payment: With respect to any Lease, the payment due from Lessee to Lessor on each
Payment Date during the Lease Tenn as shown in the Exhibit A relating thereto.
Specifications: The bid specifications and/or purchase order pursuant to which Lessee has ordered
any Equipment from a Contractor.
State: The state in which Lessee is located.
State and Federal Law or Law: The Constitution and any law of the State and any charter,
ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the
United States, and any rule or regulation of any federal agency.
Section 1.2. Exhibits.
Exhibit A: Form of schedule executed by Lessor and Lessee describing an Equipment Group, and
setting forth the Rental Payments and Prepayment Prices.
Exhibit B: Form of Certificate of Acceptance executed by Lessee.
1doc.jLrn%Hunt CA 3ck
2
7192Q/01
JUL-23-2001 07:12 952 897 5631 98% P.03
JUL 23 '01 09:07 FIR GECPF/EXEC 952 B97 5531 TC 917143741590 P.04
Exhibit C: Form of Opinion of Counsel to Lessee.
ARTICLE ll: REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Reg3resentations, Warranties and Covenants of Lessee. Lessee represents and
warrants and covenants as follows:
(a) Lessee is a political subdivision of the State, duly organized and existing under the
Constitution and laws of the State, and is authorized under the Constitution and laws of the State to
enter into this Agreement, each Lease and the transactions contemplated hereby and thereby, and
to perform all of its obligations under this Agreement and each Lease.
(b) The execution and delivery of this Agreement and each Lease by the officer of
Lessee executing such documents has been duly authorized by a duly adopted resolution of
Lessee's governing body, or by other appropriate official action, and such action is in compliance
with all public bidding and other State and Federal Laws applicable to this Agreement, each Lease
and the acquisition and financing of the Equipment by Lessee. All requirements have been met and
procedures have occurred in order to ensure the enforceability of this Agreement and each Lease
against Lessee.
(c) Lessee will have the sole use and possession of the Equipment. Lessee will use the
Equipment only to perform essential governmental or proprietary functions of Lessee within the
scope of Lessee's authority. Lessee will not permit the Equipment to be used in, for or by any
private commercial activity.
(d) Lessee will take no action that would cause the Interest portion of the Rental
Payments to become includable in gross income of the recipient for federal income tax purposes
under the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations
promulgated thereunder (the "Regulations"), and . Lessee will take and will cause its officers,
employees and agents to take all affirmative actions legally within its power necessary to ensure that
the Interest portion of the Rental Payments does not become includable in gross income of the
recipient for federal income tax purposes under the Code and Regulations; all as amended from time
to time (including, without limitation, the calculation and payment of any rebate required to preserve
such exclusion). Lessee will submit to the Secretary of the Treasury information reporting
statements and other information relating to each Lease at the times and in the forms required by
the Code and the Regulations.
(e) Lessee reasonably expects that it will not sell or otherwise dispose of all or part of an
Equipment Group during the related Lease Term.
(f) There is no action, suit, proceeding, claim, inquiry or investigation, at law or in equity,
before or by any court, regulatory agency, public board or body pending or, to the best of Lessee's
knowledge, threatened against or affecting Lessee, which challengiegg Lessee's authority to enter
into this Agreement or any Lease or any other action wherein an unfavorable ruling or finding would
adversely affect the enforceability of this Agreement or any Lease hereunder or any other
transaction of the Lessee which is similar hereto, or the exclusion of the Interest from gross income
for federal tax purposes under the Code, or would materially and adversely affect any of the
transactions contemplated by this Agreement or any Lease, including, but not limited to, Lessee's
acquisition of Equipment.
(g) Upon execution of this Agreement and each Exhibit A, Lessee will provide to Lessor
an Opinion of its Counsel in the form attached hereto as Exhibit C and a copy of the resolution
adopted by its governing body with respect to this Agreement and each Lease or evidence of
%doc.iimwunt CA 3cAc 3 7/6ZWO1
JUL-23-2001 07:13 952 997 5G31 58% P.04
JUL 23 '01 09:08 FIR GECFF/EXEC 952 897 5631 TO 917143741590 P.05
another official action authorizing this Agreement and each Lease when such resolution or evidence
of another official action is prepared and released by the City Clerk of Lessee in the ordinary course
of business.
(h) Lessee has not and will not create or establish any sinking fund, reserve fund or
other similar fund to pay Rental Payments.
(i) Unless otherwise indicated on an Equipment Schedule, Lessee owns the real estate
and facilities where the Equipment will be located free and clear of any Liens and, during the Lease
Terra, will continue to own such property and shall keep it free and clear of Liens.
0) Lessee acknowledges that (i) under Article XII of this Agreement, upon an Event of
Default, Lessor or the assignee, if any, of the related Lease may elect to terminate the related
Lease and each other Lease that is owned by Lessor or such respective assignee and (ii) upon a
Non -Appropriation the related Lease and each other Lease that is owned by Lessor or such
respective assignee shall terminate and Lessee is required upon the occurrence of (i) or (ii) to
deliver all Equipment subject to the affected Leases as instructed by Lessor or such respective
assignee under Section 12.3 hereof.
ARTICLE III. LEASE OF EQUIPMENT
Section 3.1. Acquisition of Equipment. Lessee shall advise Lessor of its desire to Wise -
equipment, the equipment cost, the Contractor of the equipment, expected delivery date and the
desired lea6a terms for such equipment. By execution hereof, Lessor has made no
commitment to lease any equipment to Lessee. Nothing herein shall obligate Lessor to lease any
equipment to Lessee until Lessor has executed an Exhibit A relating thereto. If Lessor, in its sole
discretion, determines the proposed equipment may be subject to a Lease hereunder, Lessor shall
furnish to Lessee a proposed Exhibit A relating to the Equipment Group completed insofar as
possible. Lessee shall order the Equipment Group from the appropriate Contractor or Contractors.
In no event shall Lessee enter into any contract with any Contractor or issue a purchase order which
references Lessor. Lessor shall have no obligation to make any payment to a Contractor or
reimburse Lessee for any payment it made to a Contractor for an Equipment Group (or, if the
alternative procedure described in Section 3.3 hereof is utilized, consent to a disbursement by the
Escrow Agent) until five (5) business days after Lessor has received all of the following in form and
substance satisfactory to Lessor: (a) an Exhibit A executed by Lessor and Lessee; (b) a Certificate
of Acceptance (however, if the alternative procedure in Section 3.3 is utilized, a Certificate of
Acceptance is not required until the entire Equipment Group is accepted); (c) evidence of official
action taken by or on behalf of the Lessee to authorize the acquisition of the Equipment Group on
the terms provided in Exhibit A I acfion may authorize several Leases , (d) evidence of
insurance with respect to the El�uipment Group in c this Agreement;
(e) Contractor invoice(s) and/or bill of sale relating to the Equipment Group and if such invoices have
been paid by Lessee, evidence of payment thereof and, if applicable, evidence of official intent to
reimburse such payment as required by the Regulations; (f) as applicable, the original certificate of
title or manufacturers certificate of origin and title application if any of the Equipment Group is
subject to certificate of title laws: (g) a completed and executed Form 8038-G or -GC or evidence of
filing thereof with the Secretary of Treasury; (h) an Opinion of Counsel and (i) any other documents
or items reasonably required by Lessor.
Section 3.2. Lease, Enjoyment-, Inspection, Lessor hereby leases to Lessee each Equipment
Group made subject to an Equipment Schedule, and Lessee hereby leases from Lessor such
Equipment Group, upon the terms and conditions set forth in this Agreement and in the related
Equipment Schedule. During the Lease Term, Lessee shall peaceably and quietly have and hold
and enjoy the Equipment Group, except as expressly set forth in this Agreement. Lessee agrees
that Lessor and its agents shall have the right at all reasonable times to examine and inspect the
Idoc.ilm\Hunt CA aCA—f 4 7/62Q01
JUL-23-2001 07*13 552 897 5631 P•05
JUL 23 '01 09:08 FR 5ECPF/EXEC 952 897 5631 TO 91
Equipment, and Lessor and its agents shall have such rights of access to the Equipment as may be
reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by
Lessee to perform its obligations hereunder. Notwithstanding the designation of GE Capital Public
Finance, Inc. as Lessor, GE Capital Public Finance, Inc. does not own the Equipment and by this
Agreement and each Lease is merely financing the acquisition thereof for Lessee. Lessor has not
been in the chain of title of the Equipment, does not operate, control or have possession of the
Equipment and has no control over the Lessee or the Lessee's operation, use, storage or
maintenance of the Equipment. Lessee is solely responsible for the selection of the Equipment, and
the manufacturer and vendor thereof, and is solely responsible for the use, maintenance, operation
and storage of the Equipment.
Section 3.3. Alternative Procedure, _Escrow Agreement. Notwithstanding the provisions of
Section 3.1, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired
and leased by Lessee under this Agreement, Lessor and Lessee enter into an escrow agreement
with an escrow agent establishing an account from which the Equipment Group cost is to be paid
(the "Escrow Account") (a) Lessor and Lessee shall immediately complete and execute an Exhibit A
relating to the Equipment Group; (b) the amount deposited by Lessor into the Escrow Account shall
be repaid by the Rental Payments due under the related Lease; and (c) the Rental Payments
relating to the Equipment Group shall have an aggregate Principal component equal to the amount
of Lessor's deposit into the Escrow Account and shall be due and payable as provided in the related
Exhibit A commencing upon the deposit of funds by Lessor into the Escrow Account. Lessee
acknowledges and agrees that no disbursements shall be made from an Escrow Account except for
portions of the Equipment Group which are operationally complete and functionally independent and
which may be utilized by Lessee without regard to whether the balance of the Equipment Group is
delivered and accepted.
ARTICLE IV: TERM
Section 4.1. Term. This Agreement shall be in effect from the Agreement Date and is incorporated
by reference into each Equipment Schedule executed hereunder; provided, however; no Equipment
Schedules shall be executed after any Non -Appropriation or Event of Default. Each Lease with
respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease
Date and ending as provided in Section 4.6.
Section 4.2. Termination by Lessee. In the sole event of Non -Appropriation, the Lease as to
which the Non -Appropriation occurred and each Lease hereunder, owned by the same entity that
owns the Lease as to which the Non -Appropriation occurred, shall terminate, in whole, but not in
part, as to all Equipment subject to the affected Leases, effective upon the last day of the Fiscal
Year for which funds were appropriated, in the manner and subject to the terms specified in this
Article. Lessee may effect such termination by giving Lessor or the affected assignee a written
notice of termination and by paying any Rental Payments and other amounts which are due and
have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to
give notice of such termination not less than sixty (60) days prior to the end of the Fiscal Year for
which appropriations were made, and shall notify Lessor or the affected assignee of any anticipated
termination. In the event of termination of any Leases as provided in this Section, Lessee shall
comply with the instructions received from Lessor in accordance with Section 12.3.
Section 4.3. Intent To Continue Lease Term ro riations. Lessee presently intends to
continue each Lease hereunder for its entire Lease Term and to pay all Rental Payments relating
thereto. The person or entity in charge of preparing Lessee's budget will include in the budget
request for each Fiscal Year the Rental Payments to become due in -such Fiscal Year. The parties
acknowledge that appropriation for Rental Payments is a governmental function which Lessee
cannot contractually commit itself in advance to perform and this Agreement does not constitute
1doc.iim\Hunt CA 464f 5 7162 Ol
IUL-23-2001 07:14 952 997 5631 P.06
JUL 23 '01 09:09 FIR GECPF/EXEC
0
952 897 5531 TC 917143741590
0
such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to
make all Rental Payments can and will lawfully be appropriated and made available to permit
Lessee's continued utilization of the Equipment in the performance of its essential functions during
the applicable Lease Terms. Lessee will use funds appropriated for this Agreement for no other
purpose other than to pay Rental Payments and other amounts due hereunder.
Section 4.4. Effect of Termination. Upon termination of a Lease as provided in this Article,
Lessee shall not be responsible for the payment of any additional Rental Payments coming due in
succeeding Fiscal Years, but if Lessee has not complied with the instructions received from Lessor
in accordance with Section 12.3, the termination shall nevertheless be effective, but Lessee shall be
responsible for the payment of damages in an amount equal to the amount of the Rental Payments
that would thereafter have come due if this Agreement had not been terminated and which are
attributable to the number of days after which Lessee falls to comply with Lessors or the related
assignee's reasonable instructions and for any others naabl_e loss suffered by Lessor or the
related assignee as a result of Lessee's failure to take such reasonable actions as required.
Section 4.5. Reserved.
Section 4.5. Termination of Lease Term. The Lease Term with respect to any Lease will
terminate upon the occurrence of the first of the following events: (a) the termination of a Lease by
Lessee in accordance with Section 4.2; (b) the payment of the Prepayment Price by Lessee
pursuant to Article X; (c) an Event of Default by Lessee and Lessor's or the related assignee's
election to terminate such Lease pursuant to Article XI I, or (d) the payment by Lessee of all Rental
Payments and all other amounts authorized or required to be paid by Lessee pursuant to such
Lease.
ARTICLE V; RENTAL PAYMENTS
Section 5.1. Rental Payments. Lessee agrees to.pay Rental Payments with respect to the Lease
of an Equipment Group during the related Lease Term in the amounts and on the dates specified in
the Exhibit A relating thereto. A portion of each Rental Payment is paid as and represents the
payment of Interest as set forth in Exhibit A of each Lease, and the first Rental Payment will include
Interest accruing from the Date of Issue. Lessor is authorized to insert the due date of the first
Rental Payment on Exhibit A. All Rental Payments shall be paid to Lessor, or to such assignee(s) to
which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor
or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay
the Rental Payments exclusively from moneys legally available therefor, in lawful money of the
United States of America.
Section 5.2. Current Expense. The obligations of Lessee, including its obligation to pay the Rental
Payments due in any Fiscal Year of a Lease Term, shall constitute a current expense of Lessee for
such Fiscal Year and shall not constitute an indebtedness of Lessee within the meaning of the
Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes
or other moneys (other than moneys lawfully appropriated from time to time by or for the benefit of
Lessee for this Agreement and the Net Proceeds of the Equipment) to the payment of any Rental
Payment or other amount coming due hereunder,
Section 5.3, Rental Payments To Be Unconditional. Except as provided in Section 4.2, the
obligation of Lessee to make Rental Payments or any other payments required hereunder shall be
absolute and unconditional in all events. Notwithstanding any dispute between Lessee and Lessor
or between Lessee and Contractor or any other person, Lessee shall make all Rental Payments and
other payments required hereunder when due and shall not withhold any Rental Payment or other
payment pending final resolution of such dispute nor shall Lessee assert any right of set-off or
1dotilm\Hunt CA 3c� 6 7I620/01
7UL-23-2001 07:14 952 897 5631 9e% P.O?
JUL 23 '01 09:09 FR GECPF/EXEC 952 897 5631 TO 917143741590 P.08
0 0
counterclaim against its obligation to make Rental Payments or other payments required hereunder.
Lessee's obligation to make Rental Payments or other payments shall not be abated through
accident, unforeseen circumstances, failure of the Equipment to be delivered or to perform as
desired, damage or destruction to the Equipment, loss of possession of the Equipment or
obsolescence of the Equipment.
ARTICLE VI: INSURANCE AND RISK OF LOSS
Section 6.1. Liability and Property Insurance. Lessee shall, at its own expense, maintain
continuously in effect during each Lease Term: (a) self-insurance for liability for personal injuries,
death or damage to or loss of property arising out of or in any way relating to the Equipment
sufficient to protect Lessor from liability in all events, with a coverage limit of not less than
$1,000,000 with a $25 million commercial insurance umbrella for liability claims, and (b) self-
insurance for property damage up to $25,000.00 with commercial umbrella coverage for damage in
excess of $25,000.00 and up to a maximum of $45 million.
Section 6.2. Workers' Compensation Insurance. If required by State Law, Lessee shall carry
workers' compensation insurance covering all employees on, in, near or about the Equipment, and
upon request, shall furnish to Lessor certificates evidencing such coverage throughout the Lease
Term.
Section 6.1 Requirements for All Insurance. All umbrella commercial insurance policies required
by this Article shall be taken out and maintained with insurance companies reasonably acceptable to
Lessor; and shall contain a provision that the insurer shall not cancel or revise coverage thereunder
without giving written notice to the insured parties at least thirty (30) days before the cancellation or
revision becomes effective. No insurance shall be subject to any co-insurance clause. Each
umbrella insurance policy required by this Article shall name Lessor as an additional insured party
and loss payee without regard to any breach of warranty or other act or omission of Lessee and shall
include a lender's loss payable endorsement for the benefit of Lessor. Prior to the delivery of
Equipment, Lessee shall deposit with Lessor evidence reasonably satisfactory to Lessor of such
insurance and, prior to the expiration thereof, shall provide Lessor evidence of all renewals or
replacements thereof.
Section 6.4. Risk of Loss. As between Lessorand Lessee, Lessee assumes all risks and liabilities
from any cause whatsoever, whether or not covered by insurance, for loss or damage to any
Equipment and for injury to or death of any person or damage to any property, whether such injury
or death be with respect to agents or employees of Lessee or of third parties, and whether such
property damage be to Lessee's property or the property of others. Whether or not covered by
insurance, Lessee hereby assumes responsibility for and agrees to reimburse Lessor and its
assignees for and, to the extent permitted by law, will indemnify and hold Lessor and its assignees
harmless from and against all liabilities, obligations, losses, damages, penalties, claims, actions,
costs and expenses (including reasonable attorneys' fees) of whatsoever kind and nature, imposed
on, incurred by or asserted against Lessor that in any way relate to or arise out of this Agreement,
the transactions contemplated hereby and the Equipment, including but not limited to, (a) the
selection, manufacture, purchase, acceptance or rejection of Equipment or the ownership of the
Equipment, (b) failure of Equipment to be delivered, the delivery, lease, possession, maintenance,
use, condition, return or operation of the Equipment, (c) the condition of the Equipment sold or
otherwise disposed at the time Lessee relinquishes possession of the Equipment, (d) the conduct of
Lessee, its officers, employees and agents, (e) a breach of Lessee of any of its covenants or
obligations hereunder and (f) any claim, loss, cost or expense involving alleged damage to the
environment relating to the Equipment, including, but not limited to investigation, removal, cleanup
and remedial costs, except such loss or damage caused by or resulting from the gross negligence or
1dcajlmlHunt CA 3641 7 7l62Q/01
JUL-23-2001 07:15 952 897 5631 96% P.08
willful misconduct of Lessor or its assignees, or Lessor's or any of Lessor's assignee's breach of this
Agreement. This provision shall survive the termination of this Agreement.
Section 6.5. Damage to or Destruction of Equipment. Lessee shall provide a complete written
report to Lessor immediawly erg _. 5 b_� in any loss, theft, damage or
destruction of any Equipment and of any accident involving any Equipment which Lessee reasonably
believes exceeds $7,500.00, or when combined with prior losses exceeds $7,500.00. If all or any
part of the Equipment is lost, stolen, destroyed or damaged beyond repair ("Damaged Equipment"),
Lessee shall as soon as practicable after such event either. (a) replace the same at Lessee's sole
cost and expense with equipment having substantially similar Specifications and of equal or greater
value to the Damaged Equipment immediately prior to the time of the loss occurrence, such
replacement equipment to be subject to Lessor's reasonable approval, whereupon such replacement
equipment shall be substituted in the applicable Lease and the other related documents by
appropriate endorsement or amendment; or (b) pay the applicable Prepayment Price of the
Damaged Equipment determined as set forth in the related Exhibit A. Lessee shall notify Lessor of
which course of action it will take within fifteen (15) days after the loss occurrence. If, within forty-
five (45) days of the loss occurrence, (a) Lessee fails to notify Lessor; (b) Lessee and Lessor fail to
execute an amendment to the applicable Equipment Schedule to delete the Damaged Equipment
and add the replacement equipment which failure is caused by Lessee or (c) Lessee has failed to
pay the applicable Prepayment Price, then Lessor may, at its sole but reasonable discretion, declare
the applicable Prepayment Price of the Damaged Equipment, to be immediately due and payable,
and Lessee is required to pay the same. The Net Proceeds of insurance with respect to the
Damaged Equipment shall be made available by Lessor to be applied to discharge Lessee's
prepayment obligation under this Section or to replace the Damaged Equipment if Lessee selects
this option. The payment of the Prepayment Price and the termination of Lessor's interest in the
Damaged Equipment is subject to the terms of Section 10.3 hereof.
ARTICLE VII: OTHER OBLIGATIONS OF LESSEE
Section 7.1. Use:Permits. Lessee shall exercise due care in the installation, use, operation and
maintenance of the Equipment, and shall not install, use, operate or maintain the Equipment
improperly, carelessly or for a purpose or in a manner contrary to that contemplated by this
Agreement. Lessee shall operate and maintain the Equipment fully in accordance with any
insurance policy provision, applicable prevailing industry standards and, if applicable, the
manufacturer's specifications therefor. Lessee shall obtain all permits and licenses necessary for
the installation, operation, possession and use of the Equipment. Lessee shall comply with all State
and Federal Laws applicable to the installation, use, possession and operation of the Equipment,
and if compliance with any such State and Federal Law requires changes or additions to be made to
the Equipment, such changes or additions shall be made by Lessee at its expense. Lessee shall not
use any item of Equipment to haul, convey, store, treat, transport or dispose of any "hazardous
substances" or "hazardous waste" as such terms are defined in any federal, state or local law, rule
or regulation pertaining to the protection of the environment (together, "Environmental Laws").
Lessee agrees that if Lessee is required to deliver any item of Equipment to Lessor or Lessor's
agent, the Equipment shall be delivered free of all substances which are regulated by or form a basis
for liability under any Environmental Law, Lessee shall comply with all license and copyright
requirements of any software used in connection with the Equipment.
Section 7.2. Maintenance of Equipment by Lessee. Lessee shall keep the Equipment at the
address specified in the respective Exhibit A and shall notify Lessor in writing prior to moving the
Equipment to another address. Lessee shall, at its own expense, maintain, preserve and keep the
Equipment in good repair, working order and condition, and shall from time to time make all repairs
and replacements necessary to keep the Equipment in such condition, and in compliance with State
and Federal Laws, ordinary wear and tear excepted. Lessee shall maintain Equipment in a condition
IdocJlm\Munt CA 3G& 8 7162g101
:tJL-23-2001 07=15 952 997 5631 9e% P.09
JUL 23 '01 09:10 FR GECPF/EXEC
0
952 897 5E31 TO 917143741590
0
suitable for certification by the manufacturer thereof (if certification is available). In the event that
any parts or accessories forming part of any item or items of Equipment become worn out, lost,
destroyed, damaged beyond repair or otherwise rendered unfit for use, Lessee, at its own expense
and expeditiously, will replace or cause the replacement of such parts or accessories by
replacement parts or accessories free and clear of all liens and encumbrances and with a value and
utility at feast equal to that of the parts or accessories being replaced (assuming that such replaced
parts and accessories were otherwise in good working order and repair). All such replacement parts
and accessories shall be deemed to be incorporated immediately into and to constitute an integral
portion of the Equipment and, as such, shall be subject to the terms of this Agreement. Lessor shall
have no responsibility for any of these repairs or replacements.
Section 7.3. Taxes. Other Governmental Charges and Utility Charges. Except as expressly
limited by this Section, Lessee shall pay all taxes and other charges of any kind which are at any
time lawfully assessed or levied against or with respect to the Equipment, or any part thereof, or
which become due during the Lease Term, when assessed against Lessee. Lessee shall also pay
when due all utilities and other charges incurred in the operation, maintenance, use, occupancy and
upkeep of the Equipment, and all special assessments and charges lawfully made by any
governmental body that may be secured by a lien on the Equipment; provided that with respect to
special assessments or other governmental charges that may lawfully be paid in installments over a
period of years, Lessee shall be obligated to pay only such installments as are required to be paid
during the Lease Term as and when the same become due. Lessee shall not be required to pay any
federal, state or local income, inheritance, estate, succession, transfer, gift, Franchise, gross receipts,
profit, excess profit, capital stock, corporate, or other similar tax payable by Lessor, its successors or
assigns, unless such tax is made in lieu of or as a substitute for any tax, assessment or charge
which is the obligation of Lessee under this Section.
Section 7.4. Advances. if Lessee shall fail to perform any of its obligations under this Article,
Lessor may, but shall not be obligated to, take such action as may be necessary to cure such failure,
including the advancement of money, and Lessee shall be obligated to repay all such advances on
demand, with interest at the rate of 18% per annum or the maximum rate permitted by law,
whichever is less, from the date of the advance to the date of repayment.
ARTICLE Vill: TITLE; SECURITY INTEREST; LIENS
Section 8.1. Title. During the Lease Term, legal title to and ownership of all Equipment and any
and all repairs, replacements, substitutions and modifications thereto shall be in Lessee and Lessee
shall take all actions necessary to vest such title and ownership in Lessee.
Section 8.2. Security Interest. Lessee grants to Lessor a continuing, first priority security interest
in and to the Equipment, all repairs, replacements, substitutions and modifications thereto or thereof
and all proceeds of the foregoing in order to secure Lessee's payment of all Rental Payments and
the performance of all other obligations to be performed by Lessee. Each Equipment Group
constitutes security and collateral for Lessee's obligations under all Leases that are owned by the
same entity. Lessee will join with Lessor in executing such financing statements or other documents
and will perform such acts as Lessor may reasonably request to establish and maintain a valid first
lien and perfected security interest in the Equipment. Lessee shall deliver or cause to be delivered
to Lessor the original certificates of title relating to all vehicular Equipment. If requested by Lessor,
Lessee shall obtain a landlord and/or mortgagee's consent and waiver with respect to the
Equipment. If requested by Lessor, Lessee shall conspicuously mark the Equipment with
appropriate lettering, labels or tags, and maintain such markings during the Lease Term, so as
clearly to disclose Lessor's security interest in the Equipment. Upon termination of a Lease with
respect to any Equipment Group through exercise of Lessee's option to prepay pursuant to
Articles X or through payment by Lessee of all Rental Payments and other amounts relating thereto,
1doc.i1mlHunt CA 3c4r 9 7/6?.0
JUL-23-2031 07:16
952 897 5631
ge%
P.10
JUL 23 '01 09:11 FR GECPF/EXEC
0
952 897 5631 Ta 917143741590
•
P.11
Lessor's security interest in such Equipment Group shall terminate, and Lessor shall execute and
deliver to Lessee such documents as Lessee may reasonably request to evidence the termination of
Lessor's security interest in such Equipment Group. Lessee agrees this is a security agreement
under the State's Uniform Commercial Code ("UCC") and Lessor may file financing statements with
respect to the Equipment as permitted by the UCC.
Section 8.3. Liens. During the Lease Term, Lessee shall not, directly or indirectly, create, incur,
assume or suffer to exist any Lien on or with respect to the Equipment, other than the respective
rights of Lessor and Lessee as herein provided. Except as expressly provided in Section 7.3 and
this Article, Lessee shall promptly, at its own expense, take such action as may be necessary to duly
discharge or remove any such Lien. Lessee shall reimburse Lessor for any rggA9gW&expenseS
incurred by Lessor to discharge or remove any Lien.
Section 8.4. Modification of Equipment. Lessee will not, without the prior written consent of
Lessor, which consent will not be unreasonably withheld, affix or install any accessory equipment or
device on any of the Equipment if such addition will change or impair the originally intended
functions, value or use of the Equipment.
Section 8.5. Personal Property. The Equipment is and shall at all times be and remain personal
property and not fixtures.
ARTICLE IX: WARRANTIES
Section 9.1. Selection of Equipment. The Equipment and the Contractor have been selected by
Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment,
the ordering of the Equipment, its suitability for the use intended by Lessee, the acceptance by the
Contractor or its sales representative of the order submitted, or any delay or failure by the Contractor
or its sales representative to manufacture, deliver or install the Equipment for use by Lessee.
Section 9.2. Contractor"s Warranties. Lessor hereby assigns to Lessee for and during the related
Lease Term, all of its interest, if any, in all Contractor's warranties, guarantees and patent indemnity
protection, express or implied, issued on or applicable to an Equipment Group, and Lessee may
obtain the customary services furnished in connection with such warranties and guarantees at
Lessee's expense. Lessor has no obligation to enforce any Contractor's warranties or obligations on
behalf of itself or Lessee.
Section 9.3, Disclaimer, of Warranties. LESSEE ACKNOWLEDGES THAT IT SELECTED THE
EQUIPMENT WITHOUT ASSISTANCE OF LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE EQUIPMENT,
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE EQUIPMENT.
IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTAL OR CONSEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR THE
EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT.
ARTICLE X: OPTION TO PREPAY
Section 10.1. When Available. Provided there has been no Non -Appropriation or Event of Default,
Lessee shall have the option to prepay its obligations under any Lease on any Payment Date for the
then applicable Prepayment Price set forth in Exhibit A relating thereto. In addition, in the event an
Escrow Account is established for a Lease as described in Section 3.3 hereof, funds remaining in
1doc.i1m\Hunt GA 3G41 10 7I67&01
7UL-23-2001 07:16 952 897 5631 98r P.11
JUL 23 '01 09:11 FR OECPF/EXEC 952 997 5631 TO 917143741590 P.12
9 0
such Escrow Account may be applied to prepay the Lease, in whole or in part, as provided in the
related escrow agreement.
Section 10.2. Exercise of Option; Except with respect to a prepayment with funds remaining in an
Escrow Account, Lessee shall give notice to Lessor of its intention to exercise its option with respect
to any Lease not less than thirty (30) days prior to the Payment Date on which the option will be
exercised and shall deposit with Lessor on the date of exercise an amount equal to all Rental
Payments and any other amounts then due or past due under the related Lease (including the
Rental Payment due on the Payment Date on which the option is exercised) and the applicable
Prepayment Price set forth in the related Exhibit A.
Section 10.3. Release of Lessor's Interest. On receipt of the Prepayment Price in good funds
with respect to any Equipment Group, the Lease with respect to such Equipment Group shall
terminate and all rights and interests of LesseaSr in such Equipment Group shall cease and Lessor
will deliver to Lessee all documents reasonably requested by Lessee to evidence the termination of
all of Lessor's interest in the Equipment Group. Upon termination of Lessor's interest in the
Equipment Group, Lessee shall become entitled to such Equipment Group AS IS, WHERE IS,
WITHOUT WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE
USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any
lien or encumbrance created by or arising through Lessor. To the extent any Contractor's warranties
inured to the benefit of Lessor, Lessor hereby assigns them (without guaranty or any representation
as to such warranties) to Lessee.
ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assigr►rnent_ bY_ Lessor. All of Lessor's right, title and/or interest in and to this
Agreement or any Lease hereunder, including, but not limited to, the Rental Payments and other
amounts payable by lessee and Lessor's interest in the Equipment, its rights upon Non -
Appropriation and Events of Default and its rights to provide consents under a Lease may be
assigned and reassigned to one or more assignees or subassignees by Lessor at any time, without
the consent of Lessee, provided 100% of Lessors rights in a Lease must be assigned in whole to a
single assignee. Upon assignment of a Lease by Lessor, Lessor's assignee shall have all rights of
Lessor in and to the assigned Lease. No such assignment shall be effective as against Lessee
unless and until written notice of the assignment is provided to Lessee and such notice must be
provided as soon as reasonably practical after the assignment. If requested, Lessee will
acknowledge in writing receipt of such notice. Lessee shall keep a complete and accurate record of
all such assignments; provided, however, in the event Lessor assigns its interest in this Agreement
or in a Lease to an affiliate or to another entity related to Lessor, Lessor shall maintain a record of
such assignment for the benefit of Lessee.
Section 11.2. Assignment and Subleasing by Lessee. Neither this Agreement nor any Lease
hereunder or any Equipment may be sold, assigned, subleased, transferred, pledged or mortgaged
by Lessee.
ARTICLE XII: EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The following are Events of Default under each Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid
when due and the continuation of said failure for a period of ten (10) days (other than by reason of
Non -Appropriation).
ldoc,jlmlHunt CA U4.c 11 71raZW01
JUL-23-2001 07:17 952 e97 5631 9e% P.12
JUL 23 '01 09:12 FR GECPF/F-XEC 952 697 5631 TO 917143741590 P.13
(b) Failure by Lessee to maintain insurance as required by Article VI.
(c) Failure by Lessee to observe and perform any covenant, condition or agreement on
its part to be observed or performed hereunder, other than as referred to in Clauses (a) and (b) of
this Section, for a period of thirty (30) days after written notice specifying such failure and requesting
that it be remedied has been received by Lessee from Lessor, unless Lessor shall agree in writing to
an extension of such time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to
an extension of such time if corrective action is instituted by Lessee within the applicable period and
diligently pursued until the default is corrected.
(d) The determination by Lessor that any representation or warranty made by Lessee in
this Agreement was untrue in any material respect upon execution of this Agreement or any
Exhibit A or Exhibit B provided Lessee is given the opportunity to cure as set forth in Section 12.1(c)
hereof.
(e) The filing of a petition in bankruptcy by or against Lessee, or failure by Lessee
promptly to lift any execution, gamishment or attachment of such consequence as would impair the
ability of Lessee to carry on its governmental functions or assignment by Lessee for the benefit of
creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by
a court of competent jurisdiction of any adjustment of indebtedness of Lessee, or the dissolution or
liquidation of Lessee.
Section 12.2. Remedies on Default. Whenever any Event of Default shall have occurred, Lessor
shall have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor, with or without terminating any Lease, may declare all Rental Payments due
or to become due with respect to any or all Leases owned by it or an assignee of Lessor may
declare all Rental Payments due or to become due with respect to all Leases owned by such
assignee during the Fiscal Year in effect when the default occurs to be immediately due and payable
by Lessee, whereupon such Rental Payments shall be immediately due. and payable.
(b) Lessor and its assignees, with or without terminating any Lease, may enter the
premises where the Equipment is kept and disable the Equipment subject to all Leases owned by it
or the same assignee to prevent further use thereof by Lessee and/or may repossess any or all of
the Equipment by giving Lessee written notice to deliver the Equipment in the manner provided in
Section 12.3; or in the event Lessee fails to do so within ten (10) days after receipt of such notice,
Lessor may enter upon Lessee's premises where the Equipment is kept and take possession of such
Equipment and charge Lessee for the reasonable costs incurred in repossessing the Equipment,
including reasonable attorneys' fees. Lessee hereby expressly waives any reasonable damages
occasioned by such repossession. Notwithstanding the fact that Lessor has taken possession of the
Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect
thereto during the Fiscal Year then in effect.
(c) If Lessor or its assignees terminates any Lease and, in its discretion, takes
possession and disposes of the Equipment or any portion thereof, the proceeds of any such
disposition shall be applied to pay the following items in the following order: (i) all reasonable costs
(including, but not limited to, tl ptaft attomeys' fees) incurred in securing possession of the
Equipment; (ii) all reasonable expenses incurred in completing the disposition; (iii) any sales or
transfer taxes; and (iv) the applicable Prepayment Prices of the Equipment Groups. Any disposition
proceeds remaining after the requirements of Clauses (i), (ii), (iii) and (iv) have been met shall be
paid to Lessee.
1dcc.jrmlHunt CA 3c4t 12 7/62001
JUL-23-2eO1 07:17 952 997 5631 98% P.13
JUL 23 '01 09:12 FIR GECPF/EXEC 952 B97 5631 7O 9:
0 0
(d) Lessor may take any other remedy available, at law or in equity, with respect to such
Event of Default, including those requiring Lessee to perform any of its obligations or to pay any
moneys due and payable to Lessor and Lessee shall pay the reasonable attorneys' fees and
expenses incurred by Lessor in enforcing any remedy hereunder.
Section 12.3. Return of Equipment; Release of Lessee's Interest. Upon termination of any
Lease hereunder prior to the payment of all Rental Payments or the applicable Prepayment Price in
accordance with each Exhibit A: (i) Lessor may enter upon Lessee's premises where the Equipment
is kept and disable the Equipment to prevent its further use by Lessee and (ii) Lessee shall promptly,
but ^a, a any event within ten (10) days after such termination, at its own cost and expense:
(a) perform any os testing and repairs required to place the Equipment in the condition
required by Article VII; (b) if deinstallabon, disassembly or crating is required, cause the Equipment
to be deinstalled, disassembled and crated by an authorized manufacturer's representative or such
other service person as is reasonably satisfactory to Lessor; and (c) deliver the Equipment to a
location in the continental United States specified by Lessor, freight and insurance prepaid by
Lessee. If Lessee refuses to deliver the Equipment in the manner designated, Lessor may
repossess the Equipment and charge to Lessee the reasonable costs of such repossession. Upon
termination of a Lease in accordance with Article IV or Article X11 hereof, at the election of Lessor
and upon Lessor's written notice to Lessee, full and unencumbered legal title and ownership of the
Equipment subject thereto shall pass to Lessor, Lessee shall have no further interest therein and
Lessee shall execute and deliver to Lessor such documents as Lessor may reasonably request to
evidence the passage of legal title and ownership to Lessor and termination of Lessee's interest in
the Equipment.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this
Article is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement. 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 by Lessor.
Section 12.5. Late Charge. Whenever any Event of Default under Section 12.1, Clause (a) shall
have happened and be continuing, Lessor shall have the right, at its option and without any further
demand or notice, to require a late payment charge accruing from the tenth day after the Payment
Date until the payment is made equal to the lesser of five cents ($.05) per dollar of the delinquent
amount per month or the lawful maximum, and Lessee shall be obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor; provided, however, that this Section
shall not be applicable if or to the extent that the application thereof would affect the validity of this
Agreement.
ARTICLE XIII: ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, or other communications hereunder shall be
sufficiently given and shall be deemed received when (a) personally delivered; or (b) three (3)
business days after being deposited in the United States mail in registered form with postage fully
prepaid; or (c) one (1) business day after being sent by reputable overnight courier, in each case to
the addresses specified on the execution page hereof; provided that Lessor and Lessee, by notice
given hereunder, may designate different addresses to which subsequent notices, certificates, or
other communications will be sent.
Section 13.2. Financial Information. Lessee will provide Lessor with current financial statements,
budgets, proof of appropriation for the ensuing Fiscal Year and such other financial information
1do4:J1m\Hurnr CA 3s4r 13 7162f01
JUL-23-2001 07:18 952 897 5631 98x P.14
reasonably necessary and relating to the ability of Lessee to continue this Agreement and any Lease
as may be requested by Lessor.
Section 13.3. Binding Effect. This Agreement and each Lease hereunder shall inure to the benefit
of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.4. Severability. In the event any provision of this Agreement or any Lease shall be
held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
Section 13.5. Entire Agreement, Amendments, Ch_a_nges and Modifications. This Agreement
constitutes the entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous writings, understandings, agreements, solicitation
documents and representations, express or implied, with respect to the subject matter hereof. This
Agreement may be amended or modified only by written documents duly authorized, executed and
delivered by Lessor and Lessee.
Section 13.6. Captions. The captions or headings in this Agreement are for convenience only and
in no way define, limit or describe the scope or intent of any provisions, Articles, Sections or Clauses
hereof.
Section 13.7. Further Assurances and Corrective Instruments. Lessor and Lessee agree that
they will, from time to time. execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Equipment
hereby leased or intended so to be, or for otherwise carrying out the expressed intention of this
Agreement.
Section 13.8. Execution I_n Counterparts. This Agreement may be simufitaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument, provided that only the original of this Agreement and each Equipment
Schedule marked "Original - Chattel Paper" on the execution page thereof shall constitute chattel
paper under the Uniform Commercial Code.
Section 13.9. Applicable Law and Venue. This Agreement and each Lease shall be governed by
and construed in accordance with the laws of the State of California and any and all actions initiated
under this Agreement or concerning a dispute of its terms shall be brought solely and exclusively in
a court of competent jurisdiction in the County of Orange, California, and no other court.
Section 13,10. Financing Statement. A carbon, photographic or other reproduction of this
Agreement is sufficient as a financing statement in the State to perfect the security interests granted
to Lessor.
Section 13.11. Usury. It is the intention of the parties hereto to comply with any applicable usury
laws; accordingly, it is agreed that, notwithstanding any provisions to the contrary herein or in any
Exhibit A, in no event shall this Agreement or any Lease hereunder require the payment or permit
the collection of Interest or any amount in the nature of Interest or fees in excess of the maximum
amount permitted by applicable law. Any such excess Interest or fees shall first be applied to reduce
Principal, and when no Principal remains, refunded to Lessee. In determining whether the Interest
paid or payable exceeds the highest lawful rate, the total amount of Interest shall be spread through
the applicable Lease Term so that the Interest is uniform through such terra.
Woc.Ilm\Hunt GA 3G& 14 7/6WO1
JUL-23-2001 o7:ie 952 e97 5631 98i P.15
JUL 23 'U1 09:13 FR GECPF/EXEC 952 897 5631 TO 917143741590 iJ.1b
•
•
Section 13.12. Lessee's Performance. Time is of the essence. A party's failure at any time to
require strict performance by the other of any obligations shall not waive or diminish such party's
rights thereafter to demand strict compliance by the other.
Section 13.13. Third Party Beneficiaries. Nothing herein shall be construed or interpreted to give
any person other than Lessee and Lessor any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Lease. Lessor and Lessee agree that no Contractor is a third party
beneficiary of this Agreement and there are no third party beneficiaries of this Agreement.
Section 13.14. Waiver of Jury Trial. Lessor and Lessee hereby waive any right to trial by jury
in any action or proceeding with respect to, in connection with or arising out of this
Agreement or any Lease.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
%doc.jlm\Hunt C4 3qE
15
JUL-23-2901 07:16 952 897 5631 98%
7/62.Q101
P.16
JUL 23 '01 09:13 FR GECPF/EXEC 952 997 5631 TO 917143741590 P.17
GE CAPITAL PUBLIC FINANCE, INC.
EXECUTION PAGE OF MASTER LEASE AGREEMENT
Agreement Date: July 16, 2001
Fiscal Year Commencement Date: October 1
Fiscal Year End Date: September 30
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name
by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by
its duly authorized officer.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attomey
INITIATED AND APPROVED:
Fire ChieVinformation Systems Director
REVIEWED AND APPROVED:
City Administrator
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Name: Thomas E.-Murphy
Title, Vice President
Date:
and
By:
Name: Joanne L. Manthe
Title, Secretary
Date:
%doc.jlmlHunt CA 3s4r
.TUL-23-2001 37:19
16
952 E97 5631
96%
7/62,0 01
P . 17
JUL 23 'U1 09113 FR 5ECPFXaXaC 952 897 5631 TO 917143741590 P.16
Address:
2000 Main Street
Huntington Beach, CA 92648
Attention:
Evonne Travers
Interim Network Manager
Telephone_
714-374-1701
Facsimile:
714-374-1614
Address: 8400 Normandale Lake Blvd.
Suite 470
Minneapolis, MN 55437-1079
Attention: Risk Management
Telephone: 800-346-3164
Facsimile: 952-897-5601
Original - Chattel Paper
ldoc,jWHunt CA 3rAg
JUL-23-2001 07: 19
17
952 897 5631
96''
7/65W01
GECPF/EXEC 552 897 5631 TC 9:
0 0
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. uADDON))
EXHIBIT A
Schedule of Equipment, Rental Payments, Etc.
The following Equipment comprises an Equipment Group which is the subject of the Master Lease
Agreement dated as of July 16, 2001 (the "Agreement"), between the undersigned Lessor and
Lessee. The Agreement is incorporated herein in its entirety, and Lessee hereby reaffirms all of its
representations and warranties contained in the Agreement. Lessee warrants that no Non -
Appropriation and no Event of Default or any event which, with the passage of time or the giving of
notice, would constitute a default has occurred under any Lease subject to the Agreement. In
accordance with the requirements of applicable State Law, Lessee has appropriated or obtained
sufficient appropriations to pay the Rental Payments due under this Lease in the current Fiscal Year
and such funds have not been expended for any other purpose.
Lease Date, S(LEASE DATE))
EQUIPMENT GROUP
Location. The Equipment Group is located at the following address. If requested by Lessor,
Lessee will provide the complete legal descriptions of the property where the Equipment
Group is located. Prior to relocation of the Equipment Group or portion thereof during the
Lease Term, Lessee will provide written notice to Lessor.
2, Use. Lessee will use the Equipment Group to perform the following essential
governmental or proprietary functions:
3. Description. The following description of the Equipment Group is supplemented by the
description of items of Equipment in the Contractors invoices delivered by Lessee to Lessor
and/or by the description of Equipment in Payment Request Forms executed by Lessor to
authorize disbursements from an Escrow Account.
Idoc.jlmlHunt CA eG4[
7/620/01
JUL-23-2001 07:19 952 897 5631 9E% P.19
JUL 23 '01 09:14 FR GECPF/EXE
952
•
A. DELIVERABLE EQUIPMENT
uanti Cost Per Unit
S. NONDELIVERABLE EQUIPMENT
Description Serial Number'
«EQUIPMENT»
Quantity Cost Per Unit Description Serial Number'
oEQUIPMENT�)
�If serial numbers are not available at the date of signing this Exhibit A, Lessee hereby authorizes
Lessor to insert the serial numbers when available and Lessor shall provide Lessee with a copy of
the completed Exhibit A.
RENTAL PAYMENTS
Lessee will make Rental Payments consisting of Principal and Interest at the annual rate as set forth
in the attached schedule.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title,
Date:
Attachment: Payment Schedule
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By.
Title: Vice President
Date:
and
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
Original - Chattel Paper
1doc.j1m\Hurt CA 3cR
JUL-23-2001 27:19
2
952 697 5631
96%
7165W01
P . 20
GE CAPITAL PUBLIC FINANCE, INC.
PAYMENT SCHEDULE RELATING TO EQUIPMENT SCHEDULE No. (<ACCTNUMs
Date of issue: , 200_
Funding Date: , 2D0—
Payment Payment Total Principal Interest Prepayment
Number Date Payment Comaonent Component Price
After payment of Rental Payment due on such date.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
1doc.j1m\Hun1 CA de4r
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
By.
Title: Vice President
Date:
and
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
716aOl
7UL-23-2001 07:19
952 e97 5631
9G%
P.21
JUL G.S "ell b'J;iQ rK ut�rr�rx��
•
d`J' ( I U 7i r lH..]
C7
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. trADDON)w
EXHIBIT B
Certificate of Acceptance
I, the undersigned, hereby certify that I am the duly qualified and acting officer of the Lessee
identified below and, with respect to the above -referenced Equipment Schedule dated
eLEASE DATEb to the Master Lease Agreement dated as of July 16, 2001 (the "Agreement", and
together with such Equipment Schedule, the "Lease"), by and between Lessee and GE Capital
Public Finance, Inc. ("Lessor"), that-
1 . The equipment described in Exhibit A (the "Equipment Group") has been delivered
and installed in accordance with Lessee's Specifications, is in good working order and is fully
operational and has been fully and finally accepted by Lessee on or before the date indicated below.
2. Rental Payments are due and payable by Lessee on the dates and in the amounts
indicated on Exhibit A of the above -referenced Equipment Schedule as such Exhibit is completed by
the parties.
1doc.iim\Nunt CA 3c i
CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of California
Lessee
By;
Title:
Date:
T/6M/01
JUL-23-2001 07:20
S52 897 5631 ge%
P.22
JUL. 23 '01 09:14 FR GECPF/EXEC
0
952 8`J7 5631 TO 917143741590
•
P.23
GE CAPITAL PUBLIC FINANCE, INC.
EXHIBIT C
Opinion of Counsel
(to be typed on letterhead of counsel) SAMPLE
[insert date which is date on or after date of Lessee's execution of documents)
GE Capital Public Finance, Inc. City of Huntington Beach
8400 Normandale Lake Blvd., Suite 470 2000 Main Street
Minneapolis, MN 55437 Huntington Beach, CA 92648
Re: Master Lease Agreement dated as of July 16, 2001 by and between GE Capital public
Finance, Inc. ("Lessor") and the City of Huntington Beach ("Lessee")
[Counsel to expand opinion to include executed Addenda to Lease, if applicable,
and delete reference to Escrow Agreement, if not applicable]
Ladies and Gentlemen:
I have acted as counsel to Lessee with respect to the Master Lease Agreement described above
and various related matters, and in this capacity have reviewed a duplicate original or certified copy
thereof, Equipment Schedule No. «ADDQNrr attached thereto and executed pursuant thereto
(together, the "Lease") and the Escrow Agreement dated as of (the "Escrow
Agreement") among Lessor, Lessee and , as escrow agent. Based upon the
examination of these and such other documents as [deem relevant, it is my opinion that:
1. Lessee is a political subdivision of the state of aSTATED (the "State"), duly
organized, existing and operating under the Constitution and laws of the State.
2. Lessee is authorized and has power under applicable law to enter into the Lease and
the Escrow Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3_ The Lease and the Escrow Agreement have been duly authorized, approved,
executed and delivered by and on behalf of Lessee, and are legal, valid and binding contracts of
Lessee enforceable in accordance with their terms, except to the extent limited by State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights.
4. The authorization, approval and execution of the Lease and the Escrow Agreement
and all other proceedings of Lessee relating to the transactions contemplated thereby have been
performed in accordance with ail applicable open meeting, public records, public bidding and all
other laws, rules and regulations of the State.
5. The execution of the Lease and the Escrow Agreement and the appropriation of
moneys to pay the Rental Payments coming due thereunder for the current Fiscal Year of Lessee do
not and will not result in the violation of any constitutional, statutory or other limitation relating to the
manner, form or amount of indebtedness which may be incurred by Lessee.
Woc.jimlHunt CA ec& 1 716W01
ILL-23-2001 07:20
952 e9'7 5631 981
P.23
6. There is no litigation, action, suit or proceeding pending or before any court,
administrative agency, arbitrator or governmental body that challenges the organization or existence
of Lessee; the authority of Lessee or its officers or its employees to enter into the Lease or the
Escrow Agreement, the proper authorization, approval and/or execution of the Lease, the Escrow
Agreement and other documents contemplated thereby; the appropriation of moneys to make Rental
Payments under the Lease for the current Fiscal Year of Lessee; or the ability of Lessee otherwise
to perform its obligations under the Lease, the Escrow Agreement and the transactions
contemplated thereby and, to the best of my knowledge, no such litigation or actions are threatened.
7. The equipment financed by the Lease is personal property, and when used by the
Lessee will not be or become fixtures under the laws of the State.
8. The City Council of Lessee approved the transaction described in the Lease at a
meeting on , 20_, and such action has not been amended, modified,
supplemented or repealed and remains in full force and effect_
9. This opinion may be relied upon by assignees of Lessor.
Very truly yours, . SAMPLE
(type name and title under signature)
Woc.jlm\Hunt CA 3c r
2
7/62-OJ01
JLL-23-2001 07:20 952 897 5631 9ey P.24
Strook, Carolyn G.
To: Travers, Evonne
Subject: FW: GE Public Finance
Would you please have someone take the packet for Rs si ature to his office Friday
morning. 1 just ran out of time.
The "packet" will be on your chair when -you get in Friday. Thank you.
-----Original Message -----
From: Fujii, John
Sent: Thursday, August 30, 2001 3:57 PM
To: 'Travers, Evonne; Strook, Carolyn G.
Subject: GE Public Finance
Please have GE send us Exhibit C electronically and then if one of you could fill in the blanks I would appreciate it. I also
sent the redline of tthe Agreement to Carolyn.
•
•
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
CALIFORNlA 92648
OFFICE OF THE CITY CLERK
CONNIE BROCKWAY
CITY CLERK
LETTER OF TRANSMITTAL OF ITEM APPROVED BY THE CITY COUNCIL/
REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH
DATE: July 18, 2001
TO: GE Capital Public Finance, Inc. ATTENTION: Thomas E. _Murphy___
Name
8400 Normandale Lake Blvd, Ste. 470 DEPARTMENT:
Street
Minneapolis, MN 55437-1079 REGARDING: Master Lease Agreement
City, State, Zip
See Attached Action Agenda Item E-23 Date of Approval 7-16-01
Enclosed For Your Records Is An Executed Copy Of The Above Referenced Agenda Item.
Remarks:
4� 0 W�;; � —
Connie Brockway
City Clerk
Attachments: Action Agenda Page
x Agreement
x
Bonds
Insurance
RCA
Deed
Other
CC: E.
Travers
I.S.
x
x
�l F .A
Name
Department
RCA
Agaement
Insurance Other
M.
Dolder
Fire
x
x
P'it A
Name
Department
RCA
Ageement
Insurance Other
D.
Madri al
Fire
x
x
Name
Department
RCA
Agreement
Insurance Other
--G-.}iutton
City Att
x
x
Name
Department
RCA
Agreement
Insurance Other
Name
Department
RCA
Insurance
(Telephone: 714.5363227 )
W 0 0
STATEMENT OF ACTION OF THE CITY COUNCIL
CITY OF HUNTINGTON BEACH
****** - Indicates Portions of the Meeting not included in the Statement of Action
5:00 P.M. — Room B-8
7:00 P.M. — Council Chambers
Civic Center, 2000 Main Street
Huntington Beach, California 92648
Monday, July 16, 2001
An audiotape of the 5:00 p.m. portion of this meeting
and a videotape of the 7:00 p.m. portion of this meeting
are on file in the Office of the City Clerk.
The regular meeting of the City Council and the Redevelopment Agency of the City of
Huntington Beach was called to order at 5:08 p.m.
City Council/Redevelopment Agency Roll Call
Present: Green, Boardman, Cook, Julien Houchen, Dettloff, Bauer (Garofalo arrived at
5:09 p.m.)
Absent: None
Reconvene City Council/Redevelopment Agency Meeting — 7:20 P.M.
City Council/Redevelopment Agency Roll Call
Present: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff, Bauer
Absent: None
Consent Calendar— Items Approved
On motion by Green, second Garofalo, Council approved the following Consent Calendar items
as recommended by the following roll call vote:
AYES: Green, Boardman, Cook, Julien Houchen, Garofalo, Dettloff, Bauer
NOES: None
ABSTAIN: None
ABSENT: None
(City Council) Approved Master Lease Agreement Between the City and GE Capital Public
Finance for Network Hardware Replacement — Authorized the Fire Chief/Information
Systems Director to Execute All Ancillary Documents — Approved City's Insurance
Indemnification Obligations (600.10) —1. Approved and authorized the Mayor and City Clerk
to approve and execute a Master Lease Agreement with GE Capital Public Finance, Inc. in the
amount of $375,000 annually from the Equipment Replacement Fund, with a pre -approved line
r
•
•
of credit up to $2 million dollars, with a maximum term not to exceed five years in substantially
the same form as the attached agreement; and 2. Approved the City's obligation to indemnify
GE Capital Public Finance and its assignees pursuant to Section 6.4 of the Master Lease
Agreement; and 3. Authorized Michael Dolder, Fire Chief/Information Systems Director, to
execute all ancillary documents on behalf of the City, without further approval of City Council
required, in substantially the same form as the attached documents; and 4. Authorized City
Attorney Gail Hutton to execute Exhibit C Opinion of Council agreement, in substantially the
same form as the attached document.
Adjournment — City Council/Redevelopment Agency
The meeting adjourned to Monday, July 23, 2001, at 5:00 p.m., in Council Chambers, Civic
Center, 2000 Main Street, Huntington Beach, California.
ATTEST:
/s/ Connie Brockway
City Clerk -Clerk
STATE OF CALIFORNIA }
County of Orange ) ss:
City of Huntington Beach )
/s/ Connie Brockway
City Cleric and ex-officio Clerk of
the City Council of the City of
Huntington Beach and Clerk of the
Redevelopment Agency of the City
of Huntington Beach, California
/s/ Pam Julien Houchen
Mayor -Chairman
I, Connie Brockway, the duly elected City Clerk of the City of Huntington Beach, California, do
hereby certify that the above and foregoing is a true and correct Statement of Action of the City
Council of said City at their regular meeting held on July 16, 2001.
Witness my hand and seal of the said City of Huntington Beach this 18th day of July, 2001.
/s/ Connie Brockway
City Clerk and ex-officio Clerk of
the City Council of the City of
Huntington Beach and Clerk of the
Redevelopment Agency of the City
of Huntington Beach, California
B:
DOWty Ci r
•
•
File Notes
Off ice of the City Clerk
Huntington Beach, California
T1 To � 10Us C�n� 05 OF fNQu \!
-E _T&41I*,=14-S ! 1.9
o7 u
Council/Agency Meeting Held: 61- k-0)
Deferred/Continued to:
XA proved ❑ Conditionally Approved ❑ Denied
DcfCler s Signature
Council Meeting Date: July 16, 2001
Department ID Number: FD 01-014
CITY OF HUNTINGTON BEACH z
N
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY qOUNCIL MEMBERS —- - "
Lj n
SUBMITTED BY: RAY SILVER, City Administratt�
w �
PREPARED BY: MICHAEL P. DOLDER, Fire Chief/Information Systems Direct gr
SUBJECT: APPROVE MASTER LEASE AGREEMENT WITH GE CAPITAL
PUBLIC FINANCE FOR NETWORK HARDWARE REPLACEMENT
Ement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue: Should the City of Huntington Beach enter into a master lease
agreement with GE Capital Public Finance in the amount of $375,000 annually, with a pre -
approved line of credit up to $2 million dollars, for the purpose of replacing five hundred
existing workstation computers, network servers and data switches which are at "end of life"?
Funding Source: The funds are not budgeted in the current fiscal year; funding will be from
the Equipment Replacement Fund (account number 553.31110) in the amount of $375,000
annually.
Recommended Action: MOTION TO:
1. Approve and authorize the Mayor and City Clerk to approve and execute a master
lease agreement with GE Capital Public Finance, Inc. in the amount of $375,000
annually from the Equipment Replacement Fund, with a pre -approved line of credit
up to $2 million dollars, with a maximum term not to exceed five years in
substantially the same form as the attached agreement.
2. Approve the City's obligation to indemnify GE Capital Public Finance and its
assignees pursuant to Section 6.4 of the master lease agreement.
3. Authorize Michael Dolder, Fire Chief/Information Systems Director, to execute all
ancillary documents on behalf of the City, without further approval of City Council
required, in substantially the same form as the attached documents.
4. Authorize City Attorney Gail Hutton to execute Exhibit C to the master lease
agreement, entitled "Opinion of Counsel", in substantially the same form as the
attached document.
Alternative Action(s): Deny the request and continue with current replacement/purchasing
practices.
0
REQUEST FOR COUNCIL ACAN
MEETING DATE: July 16, 2001 DEPARTMENT ID NUMBER: FD 01-014
Analysis: A JD Edwards status report update was presented to the City Council at the
April 16, 2001 Study Session. A portion of that presentation identified computer
infrastructure issues affecting citywide system performance and replacement needs. The
severity of the current computer infrastructure hardware deficiencies requires an immediate
action in order to assure viable computer operations. Waiting for the normal equipment
replacement budget cycle approvals jeopardizes the continued operational viability of the
City's computer system. Three major areas contribute to the computer infrastructure
deficiencies which include: mixed and outdated operating systems and workstation computer
hardware, outdated and unsupported network server hardware, and unsupported router and
data switch hardware.
Operating Systems and Workstation Computer Hardware
During recent years, the City has replaced workstation computers as needed, based on
funding availability. Unscheduled replacements have also occurred due to upgrades in
software programs that require higher speed processors. These changes have created
inconsistency in standardization not only in hardware, but in operating systems as well.
Currently, there are four operating systems in place, Windows 95, Windows 98, Windows NT,
and Windows 2000. This mixture of operating systems and underpowered desktop computer
hardware makes it difficult to maintain and, in many cases, has impacted the communication
link between programs such as JD Edwards, the City's new business financial system.
Utilizing numerous operating systems further dilutes an already lean IT support staff.
Microsoft support for Windows 95 will end in December 2001 making the migration to
Windows 2000 more critical.
Network Server Hardware
The City's network servers that process electronic e-mail, calendaring information, and the
network backbone are also at "end of life." The existing server hardware is over six years old
and has become unreliable. Replacement parts are difficult to obtain and, in many cases,
are completely unavailable due to manufacturers' discontinuance. Server sizing and
operating capacity also requires resizing due to increases in the number of users and
operational dependency. Network servers are now primarily performing processing time
once provided by the Legacy mainframe computer. This increased dependency makes
replacement more critical.
Router and Data Switch Hardware
Associated with the server issue is the Gandalf Communication equipment, which enables
communication between remote City sites and City Hall. Due to the age of this equipment,
each component now requires continual rebooting on a daily basis to maintain Wide Area
Network connectivity. Rebooting takes as long as two hours per day to complete. The
manufacturer of the Router and Switch hardware within City Hall has also stopped making
the hardware. Complete replacement is necessary to continue wide area network and local
area network coverage.
F1301 014 GE Capital Network Hardware Replacement Dolder .2.
7/912001 3:21 PM
0
REQUEST FOR COUNCIL ACAN
MEETING DATE: July 16, 2001 DEPARTMENT ID NUMBER: FD 01-014
Lease Agreement
A master lease agreement (Attachment 3) has been proposed for the Fiscal Year 2001/2002
Equipment Replacement budget. The Fleet Management Committee and the City
Administrator has reviewed and recommended this request. However, due to the rapid
decline in equipment condition and urgency of replacement needs discussed above, it is
recommended that the master lease agreement be implemented ahead of schedule.
Additionally, the City will be able to take advantage of competitive interest rates that are
currently being offered while at the same time ensuring an across the board standardization
of operating systems, software programs, network hardware which are critical in maintaining
the daily operations of the City.
The master lease agreement allows the City to enter into different payment schedules with
different vendors providing the greatest purchasing flexibility to acquire the right hardware, at
the best price, and in the shortest time frame. The master lease provides funding for
complete replacement of network servers necessary to replace the legacy mainframe, the
installation of 500 desktop computers per year, and replacement routers and data switch
hardware. The interest rates being offered (Attachment 2) are 4.5% for 3 years and 4.8% for
5 years. With the current interest rate established at 5.9% the3 year lease interest will save
the City approximately $75,000. If the City chooses a 5-year lease, the interest rate would be
higher resulting in lower savings.
The master lease agreement includes an indemnification provision, Section 6.4, whereby the
City agrees to reimburse and indemnify GE Capital Public Finance and its assignees for all
claims arising out of the master lease agreement, the transactions contemplated therein, and
the equipment. The master lease agreement also includes a provision, Section 12.2(d),
whereby the City agrees to pay GE Capital Public Finance's reasonable attorney's fees and
expenses incurred in enforcing the master lease agreement. This provision deviates from
the City's standard each-party- pays-its-own-attorney's-fees provision. Additionally, pursuant
to Section 12.2(a) of the master lease agreement, if the City defaults on its payment
obligations under any payment schedule for equipment purchased from a specific vendor,
GE Capital Public Finance will be able to declare all payments immediately due and payable
under the payment schedules for equipment purchased from all vendors during the current
fiscal year.
Additional minor changes to the attached documents may be required. Staff requests that
Council approve the master lease agreement and ancillary documents in substantially the
same form as set forth in the attached documents, allowing minor changes, if any, without
further Council approval, but subject to approval of the City Attorney.
Environmental Status: None.
FD01 014 GE Capital Network Hardware Replacement Dolder -3-
7/9/2001 3:21 PM
0
REQUEST FOR COUNCIL ACION
MEETING DATE: July 16, 2001
Attachment(s):
DEPARTMENT ID NUMBER: FD 01-014
1. Financial Impact Statement
2. July 5, 2001 letter from GE Capital Public Finance setting forth the
terms of the transaction, including the interest rate and amount of the
line of credit
3. Master Lease Agreement with GE Capital Public Finance with its
accompanying exhibits
4. Computer Addendum with its accompanying exhibit
RCA Author: Travers}MadrlgaliDatder
FD01 014 GE Capital Network Hardware Replacement Dolder -4-
7f912001 3:21 PM
•
•
In ATTACHMENT 1
7
0
CITY OF HUNTINGTON BEACH
INTERDEPARTMENTAL COMMUNICA TION
To: Ray Silver, City Administrator
From: Clay Martin, Director of Administrative Services
Subject: FIS 2001-53 -- Approve Master Lease Agreement With GE
Capital Public Finance for Network Hardware Replacement
Date: July 9, 2001
As required by Resolution 4832, this Fiscal Impact Statement has
been prepared for "— Approve Master Lease Agreement With GE
Capital Public Finance for Network Hardware Replacement."
If the City Council approves this request (total appropriation
$375,OOO), the estimated working capital of the Equipment
Replacement Fund at September 30, 2001 will be reduced to
$314,000.
Clay Marsh,
DirectVof Administrative Services
•
•
ATTACHMENT 2
JUL 06 2001 12:08 FR GE CAPITRU PUBLIC FIN952 eq? 5601 TO 917143?41614 P.02iO4
i •
GE Capital
July 5, 2001
Ms. Evonne Travers
City of Huntington Beach
2000 Main Street
Huntington Beach, CA 92648
Dear Ms. Travers:
GE C*taf PWic Finatuv, k.
A aril of Ganerai Electric Capital Corporation
M Narmvdala iaka Rw10 dial Suile 470
Minnoapalls. MN55437.1079
952 697 MM, Fax 952 897-5501
We are pleased to advise you that GE Capital Public Finance, Inc. has appmved and makes the following
proposal to provide fmancing for various essential use equipment, structured as a tax-exempt Master
Lease Agreement ("Master Lease") based on the following principal terms and conditions:
1. PROPOSED TRANSACTIQ : $2,000,000 Pre -Approved Line of Credit
2. TERM: The proposed transaction will be documented using multiple schedules under the
Master Lease, repayable ovef three or five years with monthly payments. The first payment will
be due on the first day of the month that is at least one month after fending, with the remaining
payments due on the first clay of each month thereaftcr.
3. LESSQR: GE Capital Public Finance, Inc. ("GECPF"), its affiliates or assignees
4. LESSEE: City of Huntington Beach, CA ("Lessee")
S. EQUIPMENT: Information Technology Equipment (the "Equipment") with the finalized
equipment list subject to GECPF review and approval.
6. IlV'I`EMT RATE: The current Base Rates are:
3 year: 4.50%
5 year: 4.81 %
The Interest Rate will be determined at the time of funding of each Schedule based on the
following formula:
[(Current U.S. Treasury Swap Rate - Base U.S. Treasury Swap Rate) x .56] + Base Interest Rate
= Fixed Interest Rate
Base Scrap Base U.S. Treasury
interest Rate: Rate Term: Swap Rate:
3 year = 4.501/a 3 years 5.09%
5 year = 4.81 % 5 years 5.60%
JUL 06 2001 12:09 FR GE CAPITAL PUBLIC FIN952 B97 5601 TO 917143741614 P.03r04
Current U.S. Treasury Swap Rate: Current U.S. Treasury rate posted from the most recently
published Federal Reserve Statistical Release H,15(519) one week prior to the Funding Date.
US. Treasury Note Term: The U.S. Treasury Note used to establish a Base Rate from which to
Index and reflects market conditions at the time of this proposal.
Base U.S. Treasury Rate; The average life U.S. Treasury Note rate from the Federal Reserve
Statistical Release H.15(519) dated July 2, 2001, for the week ending June 29, 2001.
Sample Calculation: If Current Base U.S. Treasury Swap Rate = 6,00%
[(4.50% . 4.63%) x .56 t 4.50% = 4.43% fixed rate.
7. ELECTRONIC PAYMENTS: If desired, the Lessee can elect GECPF's electronic payment
system for the making of monthly payments.
8. PREPA) MENT OPTIONS: Each Lease may be prepaid on any payment date at 102% of the
then outstanding principal balance plus all accrued interest and any other amounts then due.
9. INSURANCE: As a condition to closing, Lessee will be required to provide evidence of
property damage insurance with a coverage limit for the higher of the Equipment replacement
cost or the outstanding principal balance. GECPF shall be named as loss payee, and the insurer
will provide GECPF a minimum of 30 days notice in the event of cancellation or non renewal.
The City has indicated that it is self -insured for liability coverage.
10. NET FINANCING: The proposed financing will be a net financing. Without limiting the
generality of the foregoing, Lessee will be responsible for all expenses, maintenance, insurance
and taxes (other than taxes based solely upon the net income of GECPF) relating to the purchase,
possession and use of the Equipment.
11. LIEN PERFECTION; GECPF will require a first priority security interest in the Equipment
financed.
This proposal is delivered in express reliance on the financial statements, projections or other statements
regarding the conditions, operation, and affairs of Lessee, or regarding the Equipment to be purchased as
noted in the Equipment list provided by Lessee, and is based on the understanding that Lessee has agreed
to complete the transaction with GECPF.
This proposal is subject to and conditioned upon (i) the execution by the Lessee all documentation
required by GECPF, all of which documentation must be in form and substance satisfactory to GECPF in
its' sole discretion; (ii) the accuracy and completeness of all financial and operating information
delivered to GECPF regarding the Lessee and the Equipment; and (iii) no material adverse change in the
financial or operating condition of the Lessee.
JUL 06 2001 12:09 FR GE CAPITAL PUBLIC FIN952 89? 5601 TO 91?143?41614 P.04iO4
R
This letter supersedes and replaces in its entirely any previous letter relating to the financing proposed
hereby, any of which previous letters are of no further force or effect.
if you have any questions, please call Rebecca Lowe at (900) 954-2792 or the undersigned at (952) 897-
5620. GECPF appreciates the opportunity to provide the proposed financing.
Sincerely,
Thomas E. Murphy
Vice President
** TOTAL PAGE.04 **
0
ATTACHMENT 3
w � i
•
u
GE CAPITAL PUBLIC FINANCE, INC.
MASTER LEASE AGREEMENT
THIS MASTER LSE AGREEMENT ("Agreement'), dated as of the Agreement Date, is made and
entered into by an4, between GE Capital Public Finance, Inc., a corporation duly organized and
existing under the iavys of the state of Delaware, as lessor ("Lessor"), whose principal business
address is as shown orh.the execution page hereof; and the lessee identified on the execution page
hereof, a political subdivision of the State, as lessee ("Lessee"), whose address is as shown on the
execution page hereof.
In consideration of the mutuakpovenants herein contained, the parties hereto recite and agree as
follows:
ARTICLE I: DEFINITIONS AND EXHIBITS
Section 1.1. Definitions. The following terms have the meanings specified below unless the
context clearly requires otherwise.
Agreement: This Master Lease Agreement and all Equipment Schedules hereto.
Agreement Date: The date so designated on the execution page hereof.
Contractor: Each of the manufacturers or vendors from whom Lessee has ordered or with whom
Lessee has contracted for the manufacture, delivery and/or installation of the Equipment.
Counsel: An attorney duly admitted to the practice of law before the highest court of the State.
Date of Issue: With respect to each Lease, the date Interest starts to accrue as indicated in the
related Exhibit A.
Equipment: All items of personal property described in Equipment Schedules and subject to this
Agreement.
Equipment Group: The Equipment listed in a single Exhibit A.
Equipment Schedule: A schedule consisting of the separate but like numbered pages of Exhibits A
and B which have been completed with respect to an Equipment Group and executed by Lessor and
Lessee.
Events of Default: With respect to each Lease, those events described in Section 12.1.
Fiscal Year: The 12-month fiscal period of Lessee which commences in every year and ends in
every year on the dates shown on the execution page hereof.
Funding Date: With respect to each Lease, the date Lessor makes payment to the Contractors) for
the purchase price of the related Equipment Group or, if the procedure described in Section 3.3 is
utilized, the date Lessor deposits funds into an Escrow Account.
Interest: The portion of any Rental Payment designated as and comprising interest as shown in any
Exhibit A.
0
fKDM
N1�FM�o
M
IdocJ1m\Hunt CA 3c 1 7/6/01
Lease: With respect to each Equipment Group, this Agreement and the Equipment Schedule
lating thereto, which shall constitute a separate contract relating to such Equipment Group. This
A eement contains the general terms and conditions with respect to each Lease. Lessor may
ass* its rights under various Leases to different assignees. Each such assignee has the rights
only in he Lease it owns; a Non -Appropriation or Event of Default under a Lease owned by Lessor
or an assignee nee does not affect any of the Leases not owned by Lessor or by such assignee.
Lease Date:'` -The date so designated in each Exhibit A.
Lease Term: W1 respect to any Equipment Group, the period during which the related Lease is in
effect as specified Ii� Section 4.1.
Lessor: GE Capital Pu is Finance, Inc. and, for purposes of determining the ownership of a Lease,
shall include Lessor, Gen ral Electric Capital Corporation and their affiliates.
Lien: Any mortgage, security'nterest, lease, lien, pledge, charge, encumbrance or claim of any kind.
Net Proceeds: Any insurance proceeds or condemnation awards paid with respect to any
Equipment remaining after paymen therefrom of all expenses incurred in the collection thereof.
Non-AeProoriation: With respect to eaN Lease, the failure of Lessee or Lessee's governing body to
appropriate money for any Fiscal Year o essee sufficient for the continued performance by Lessee
of all of Lessee's obligations under a L se, as evidenced by the passage of an ordinance or
resolution or other official action specifically rohibiting Lessee from performing its obligations under
a Lease with respect to any Equipment, and om using any moneys to pay any Rental Payments
due under a Lease for a designated Fiscal Year Ind all subsequent Fiscal Years.
Payment Date: The date upon which any Rental
Exhibit A.
Principal: The portion of any Rental Payment
Prepayment Price: With respect to any Lease, as of the
relating thereto, the amount so designated and set forth ox
is due and payable as provided in any
principal in any Exhibit A.
ent Dates specified in the Exhibit A
each such date in such Exhibit A.
Rental Payment: With respect to any Lease, the payment du�from Lessee to Lessor on each
Payment Date during the Lease Term as shown in the Exhibit A reldt*ng thereto.
Specifications: The bid specifications and/or purchase order pursuanf o which Lessee has ordered
any Equipment from a Contractor.
State: The state in which Lessee is located.
State and Federal Law or Law: The Constitution and any law of the S*e and any charter,
ordinance, rule or regulation of any agency or political subdivision of the State; "and any law of the
United States, and any rule or regulation of any federal agency.
r'r
Section 1.2. Exhibits.
Exhibit A: Form of schedule executed by Lessor and Lessee describing an Equipment oup, and
setting forth the Rental Payments and Prepayment Prices.
Exhibit B: Form of Certificate of Acceptance executed by Lessee.
1doc.j1m%Hunt CA 3c 2 716101
Exhibit C: Form of Opinion of Counsel to Lessee.
ARTICLE II: REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1. Representations, Warranties and Covenants of Lessee. Lessee represents and
warrants and covenants as follows:
(a) Less'ee is a political subdivision of the State, duly organized and existing under the
Constitution and laws �Qf the State, and is authorized under the Constitution and laws of the State to
enter into this Agreemeht, each Lease and the transactions contemplated hereby and thereby, and
to perform all of its obligations under this Agreement and each Lease.
(b) The execution and delivery of this Agreement and each Lease by the officer of
Lessee executing such documents has been duly authorized by a duly adopted resolution of
Lessee's governing body, or by other appropriate official action, and such action is in compliance
with all public bidding and other St*e and Federal Laws applicable to this Agreement, each Lease
and the acquisition and financing of the Equipment by Lessee. All requirements have been met and
procedures have occurred in order to ensure the enforceability of this Agreement and each Lease
against Lessee.
(c) Lessee will have the sole use' nd possession of the Equipment. Lessee will use the
Equipment only to perform essential governmental or proprietary functions of Lessee within the
scope of Lessee's authority. Lessee will not permit the Equipment to be used in, for or by any
private commercial activity.
(d) Lessee will take no action that wo d cause the Interest portion of the Rental
Payments to become includable in gross income of tN recipient for federal income tax purposes
under the Internal Revenue Code of 1986, as amende ' (the "Code"), and Treasury Regulations
promulgated thereunder (the "Regulations"), and Lessee will take and will cause its officers,
employees and agents to take all affirmative actions legally ''thin its power necessary to ensure that
the Interest portion of the Rental Payments does not beco includable in gross income of the
recipient for federal income tax purposes under the Code and R ulations; all as amended from time
to time (including, without limitation, the calculation and payment f any rebate required to preserve
such exclusion). Lessee will submit to the Secretary of the Treasury information reporting
statements and other information relating to each Lease at the times and in the forms required by
the Code and the Regulations.
(e) Lessee reasonably expects that it will not sell or otherwise'dispose of all or part of an
Equipment Group during the related Lease Term.
(f) There is no action, suit, proceeding, claim, inquiry or investigati n, at law or in equity,
before or by any court, regulatory agency, public board or body pending or, to a best of Lessee's
knowledge, threatened against or affecting Lessee, challenging Lessee's authority, to enter into this
Agreement or any Lease or any other action wherein an unfavorable ruling �r finding would
adversely affect the enforceability of this Agreement or any Lease hereunde�'or any other
transaction of the Lessee which is similar hereto, or the exclusion of the Interest frorn'Toss income
for federal tax purposes under the Code, or would materially and adversely affect'\any of the
transactions contemplated by this Agreement or any Lease, including, but not limited tc�Lessee's
acquisition of Equipment. 11,
(g) Upon execution of this Agreement and each Exhibit A, Lessee will provide to Lessor
an Opinion of its Counsel in the form attached hereto as Exhibit C and a copy of the resolutior
adopted by its governing body with respect to this Agreement and each Lease or evidence\Q
ldoc.jlm\Hunt CA 3c 3 716l01
another official action authorizing this Agreement and each Lease when such resolution or evidence
of another official action is prepared and released by the City Clerk of Lessee in the ordinary course
of business.
(h) Lessee has not and will not create or establish any sinking fund, reserve fund or
other similar fund to pay Rental Payments.
(i) Unless otherwise indicated on an Equipment Schedule, Lessee owns the real estate
and facilities where the Equipment will be located free and clear of any Liens and, during the Lease
Term, will continue to own such property and shall keep it free and clear of Liens.
Q) Lessee acknowledges that (i) under Article XII of this Agreement, upon an Event of
Default, Lessor or the as if any, of the related Lease may elect to terminate the related
Lease and each other Lease that is owned by Lessor or such respective assignee and (il) upon a
Non -Appropriation the related Lease and each other Lease that is owned by Lessor or such
respective assignee shall terminate and Lessee is required upon the occurrence of (1) or (ii) to
deliver all Equipment subject to' the affected Leases as instructed by Lessor or such respective
assignee under Section 12.3 hereof:-,
ARTICLE III: LEASE OF EQUIPMENT
Section 3.1. Acquisition of Equipment. Lessee shall advise Lessor of its desire to lease
equipment, the equipment cost, the Contractor of the equipment, expected delivery date and the
desired lease terms for such equipment. By execution hereof, Lessor has made no commitment to
lease any equipment to Lessee. Nothing herein°,shall obligate Lessor to lease any equipment to
Lessee until Lessor has executed an Exhibit A relating thereto. If Lessor, in its sole discretion,
determines the proposed equipment may be subject to a Lease hereunder, Lessor shall furnish to
Lessee a proposed Exhibit A relating to the Equipment Group completed insofar as possible.
Lessee shall order the Equipment Group from the appropriate Contractor or Contractors. in no
event shall Lessee enter into any contract with any Contractor or issue a purchase order which
references Lessor. Lessor shall have no obligation to rake any payment to a Contractor or
reimburse Lessee for any payment it made to a Contractor for an Equipment Group (or, if the
alternative procedure described in Section 3.3 hereof is utilized; consent to a disbursement by the
Escrow Agent) until five (5) business days after Lessor has received all of the following in form and
substance satisfactory to Lessor: (a) an Exhibit A executed by Lessor and Lessee; (b) a Certificate
of Acceptance (however, if the alternative procedure in Section 3.3., is utilized, a Certificate of
Acceptance is not required until the entire Equipment Group is accept6o); (c) evidence of official
action taken by or on behalf of the Lessee to authorize the acquisition of\the Equipment Group on
the terms provided in Exhibit A; (d) evidence of insurance with respect to flee Equipment Group in
compliance with Articles VI of this Agreement; (e) Contractor invoice(s) and/&.bill of sale relating to
the Equipment Group and if such invoices have been paid by Lessee, evidenc�;of payment thereof
and, if applicable, evidence of official intent to reimburse such payment a�,, required by the
Regulations; (f) as applicable, the original certificate of title or manufacturer's certifi to of origin and
title application if any of the Equipment Group is subject to certificate of title laws;( ) a completed
and executed Form 8038-G or -GC or evidence of fling thereof with the Secretary\,of Treasury;
(h) an Opinion of Counsel and (i) any other documents or items reasonably required by L'Okssor.
Section 3.2. Lease; Enioyment; Inspection. Lessor hereby leases to Lessee each E ipment
Group made subject to an Equipment Schedule, and Lessee hereby leases from Lesso such
Equipment Group, upon the terms and conditions set forth in this Agreement and in the re ted
Equipment Schedule. During the Lease Term, Lessee shall peaceably and quietly have and h Id
and enjoy the Equipment Group, except as expressly set forth in this Agreement. Lessee agre
that Lessor and its agents shall have the right at all reasonable times to examine and inspect the
1doc.j1m\Hunt CA 3c 4 716101
Equipment, and Lessor and its agents shall have such rights of access to the Equipment as may be
reasonably necessary to cause the proper maintenance of the Equipment in the event of failure by
Lessee tb perform its obligations hereunder. Notwithstanding the designation of GE Capital Public
Finance, Inc. as Lessor, GE Capital Public Finance, Inc. does not own the Equipment and by this
Agreement and each Lease is merely financing the acquisition thereof for Lessee. Lessor has not
been in the chain of title of the Equipment, does not operate, control or have possession of the
Equipment and alas no control over the Lessee or the Lessee's operation, use, storage or
maintenance of the•Equipment. Lessee is solely responsible for the selection of the Equipment, and
the manufacturer and vendor thereof, and is solely responsible for the use, maintenance, operation
and storage of the Equipment.
Section 3.3. Altemative':Procedure; Escrow Agreement. Notwithstanding the provisions of
Section 3.1, if, upon agreement by Lessor and Lessee as to any Equipment Group to be acquired
and leased by Lessee under this Agreement, Lessor and Lessee enter into an escrow agreement
with an escrow agent establishing, an account from which the Equipment Group cost is to be paid
(the "Escrow Account") (a) Lessor and Lessee shall immediately complete and execute an Exhibit A
relating to the Equipment Group; (b)`the amount deposited by Lessor into the Escrow Account shall
be repaid by the Rental Payments clue under the related Lease; and (c) the Rental Payments
relating to the Equipment Group shall have an aggregate Principal component equal to the amount
of Lessor's deposit into the Escrow Account and shall be due and payable as provided in the related
Exhibit A commencing upon the deposit of., funds by Lessor into the Escrow Account. Lessee
acknowledges and agrees that no disbursements shall be made from an Escrow Account except for
portions of the Equipment Group which are operationally complete and functionally independent and
which may be utilized by Lessee without regard`tp whether the balance of the Equipment Group is
delivered and accepted.
ARTICLE IV: TERM
Section 4.1. Term. This Agreement shall be in effect frog the Agreement Date and is incorporated
by reference into each Equipment Schedule executed heret,inder; provided, however, no Equipment
Schedules shall be executed after any Non -Appropriation 6r Event of Default. Each Lease with
respect to an Equipment Group shall be in effect for a Lease Term commencing upon the Lease
Date and ending as provided in Section 4.6.
Section 4.2. Termination by Lessee. In the sole event of Norte., -Appropriation, the Lease as to
which the Non -Appropriation occurred and each Lease hereunder, 'gwned by the same entity that
owns the Lease as to which the Non -Appropriation occurred, shall tkminate, in whole, but not in
part, as to all Equipment subject to the affected Leases, effective upd'�i the last day of the Fiscal
Year for which funds were appropriated, in the manner and subject to�he terms specified in this
Article. Lessee may effect such termination by giving Lessor or the afcted assignee a written
notice of termination and by paying any Rental Payments and other amotlqts which are due and
have not been paid at or before the end of its then current Fiscal Year. Lessee shall endeavor to
give notice of such termination not less than sixty (60) days prior to the end o the Fiscal Year for
which appropriations were made, and shall notify Lessor or the affected assigne&of any anticipated
termination. In the event of termination of any Leases as provided in this Section, Lessee shall
comply with the instructions received from Lessor in accordance with Section 12.3. \
Section 4.3. Intent To Continue Lease Term; Appropriations. Lessee present intends to
continue each Lease hereunder for its entire Lease Term and to pay all Rental Payme is relating
thereto. The person or entity in charge of preparing Lessee's budget will include in th budget
request for each Fiscal Year the Rental Payments to become due in -such Fiscal Year. The arties
acknowledge that appropriation for Rental Payments is a governmental function which L see
cannot contractually commit itself in advance to perform and this Agreement does not eonsti to
IdocJ1mlHunt CA 3c 5 716101
such a commitment. However, Lessee reasonably believes that moneys in an amount sufficient to
make allental Payments can and will lawfully be appropriated and made available to permit
Lessee's tinued utilization of the Equipment in the performance of its essential functions during
the applicabl Lease Terms. Lessee will use funds appropriated for this Agreement for no other
purpose other ivan to pay Rental Payments and other amounts due hereunder.
Section 4.4. Effebt of Termination. Upon termination of a Lease as provided in this Article,
Lessee shall not be hasponsible for the payment of any additional Rental Payments coming due in
succeeding Fiscal Yeas but if Lessee has not complied with the instructions received from Lessor
in accordance with Sectidq 12.3, the termination shall nevertheless be effective, but Lessee shall be
responsible for the payment of damages in an amount equal to the amount of the Rental Payments
that would thereafter have &me due if this Agreement had not been terminated and which are
attributable to the number of after which Lessee fails to comply with Lessor's or the related
assignee's reasonable instructio and for any other loss suffered by Lessor or the related assignee
as a result of Lessee's failure to take such reasonable actions as required.
Section 4.5. Reserved.
Section 4.6. Termination of Lease m. The Lease Term with respect to any Lease will
terminate upon the occurrence of the first ol the following events: (a) the termination of a Lease by
Lessee in accordance with Section 4.2; (b)4he payment of the Prepayment Price by Lessee
pursuant to Article X; (c) an Event of Default',by Lessee and Lessor's or the related assignee's
election to terminate such Lease pursuant to Arli�le XII; or (d) the payment by Lessee of all Rental
Payments and all other amounts authorized or required to be paid by Lessee pursuant to such
Lease.
ARTICLE V: RENTAL PAYMENTS
Section 5.1. Rental Payments. Lessee agrees to pay Rental Payments with respect to the Lease
of an Equipment Group during the related Lease Term in the`,amounts and on the dates specified in
the Exhibit A relating thereto. A portion of each Rental Payment is paid as and represents the
payment of Interest as set forth in Exhibit A of each Lease, and tie first Rental Payment will include
Interest accruing from the Date of Issue. Lessor is authorized to insert the due date of the first
Rental Payment on Exhibit A. All Rental Payments shall be paid to Lessor, or to such assignee(s) to
which Lessor has assigned such Rental Payments as specified in Article XI, at such place as Lessor
or such assignee(s) may from time to time designate by written notice to Lessee. Lessee shall pay
the Rental Payments exclusively from moneys legally available therefb.r, in lawful money of the
United States of America.
Section 5.2. Current_ Expense. The obligations of Lessee, including its obligion to pay the Rental
Payments due in any Fiscal Year of a Lease Term, shall constitute a current e*,ense of Lessee for
such Fiscal Year and shall not constitute an indebtedness of Lessee within tf a meaning of the
Constitution and laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes
or other moneys (other than moneys lawfully appropriated from time to time by or f6.r the benefit of
Lessee for this Agreement and the Net Proceeds of the Equipment) to the payment'`Of any Rental
Payment or other amount coming due hereunder.
Section 5.3. Rental Payments To Be Unconditional. Except as provided in Secti6Y 4.2, the
obligation of Lessee to make Rental Payments or any other payments required hereunder' shall be
absolute and unconditional in all events. Notwithstanding any dispute between Lessee and'Lessor
or between Lessee and Contractor or any other person, Lessee shall make all Rental Payments and
other payments required hereunder when due and shall not withhold any Rental Payment or other
payment pending final resolution of such dispute nor shall Lessee assert any right of set-off'vr
:�
1doc.j1m\Hunt CA 3c 6 716101
counterclaim against its obligation to make Rental Payments or other payments required hereunder.
Lessee's obligation to make Rental Payments or other payments shall not be abated through
accident, unforeseen circumstances, failure of the Equipment to be delivered or to perform as
desired, damage or destruction to the Equipment, loss of possession of the Equipment or
obsolesbence of the Equipment.
ARTICLE VI: JNSURANCE AND RISK OF LOSS
Section 6.1. Liability and Property Insurance. Lessee shall, at its own expense, maintain
continuously in effect during each Lease Term: (a) self-insurance for liability for personal injuries,
death or damage to `or loss of property arising out of or in any way relating to the Equipment
sufficient to protect Leasor from liability in all events, with a coverage limit of not less than
$1,000,000 with a $25 'bullion commercial insurance umbrella for liability claims, and (b) self-
insurance for property dame up to $25,000.00 with commercial umbrella coverage for damage in
excess of $25,000.00 and up to a maximum of $45 million.
Section 6.2. Workers' Compeiisation Insurance. If required by State Law, Lessee shall carry
workers' compensation insurance covering all employees on, in, near or about the Equipment, and
upon request, shall furnish to Lessoi certificates evidencing such coverage throughout the Lease
Term.
Section 6.3. Re uirements for All Insura ce. All umbrella commercial insurance policies required
by this Article shall be taken out and maintaiited with insurance companies reasonably acceptable to
Lessor; and shall contain a provision that the i urer shall not cancel or revise coverage thereunder
without giving written notice to the insured partie at least thirty (30) days before the cancellation or
revision becomes effective. No insurance shall\�e subject to any co-insurance clause. Each
umbrella insurance policy required by this Articles II name Lessor as an additional insured party
and loss payee without regard to any breach of warran or other act or omission of Lessee and shall
include a lender's loss payable endorsement for the enefit of Lessor. Prior to the delivery of
Equipment, Lessee shall deposit with Lessor evidence asonably satisfactory to Lessor of such
insurance and, prior to the expiration thereof, shall provide Lessor evidence of all renewals or
replacements thereof. °E
Section 6.4. Risk of Loss. As between Lessor and Lessee, Lessee assumes all risks and liabilities
from any cause whatsoever, whether or not covered by insur ce, for loss or damage to any
Equipment and for injury to or death of any person or damage to a property, whether such injury
or death be with respect to agents or employees of Lessee or of t ird parties, and whether such
property damage be to Lessee's property or the property of others. Whether or not covered by
insurance, Lessee hereby assumes responsibility for and agrees to eimburse Lessor and its
assignees for and, to the extent permitted by law, will indemnify and hold essor and its assignees
harmless from and against all liabilities, obligations, losses, damages, pe alties, claims, actions,
costs and expenses (including reasonable attorneys' fees) of whatsoever kin and nature, imposed
on, incurred by or asserted against Lessor that in any way relate to or arise o of this Agreement,
the transactions contemplated hereby and the Equipment, including but not 'mited to, (a) the
selection, manufacture, purchase, acceptance or rejection of Equipment or the nership of the
Equipment, (b) failure of Equipment to be delivered, the delivery, lease, possession, maintenance,
use, condition, return or operation of the Equipment, (c) the condition of the Equip ent sold or
otherwise disposed at the time Lessee relinquishes possession of the Equipment, (d) th conduct of
Lessee, its officers, employees and agents, (e) a breach of Lessee of any of its cov ants or
obligations hereunder and (f) any claim, loss, cost or expense involving alleged damag to the
environment relating to the Equipment, including, but not limited to investigation, removal, cl anup
and remedial costs, except such loss or damage caused by or resulting from the gross negligen or
1doc.11m\Hunt CA 3c 7 7/6/01
;7
•
willful isconduct of Lessor or its assignees, or Lessor's or any of Lessor's assignee's breach of this
Agreem t. This provision shall survive the termination of this Agreement.
Section 6.b:. Damage to or Destruction of Equipment. Lessee shall provide a complete written
report to Lessor immediately upon any loss, theft, damage or destruction of any Equipment and of
any accident involving any Equipment which Lessee reasonably believes exceeds $7,500.00, or
when combined *ith prior losses exceeds $7,500.00. If all or any part of the Equipment is lost,
stolen, destroyed dr damaged beyond repair ("Damaged Equipment"), Lessee shall as soon as
practicable after sucl , event either: (a) replace the same at Lessee's sole cost and expense with
equipment having subs
ntially similar Specifications and of equal or greater value to the Damaged
Equipment immediately to the time of the loss occurrence, such replacement equipment to be
subject to Lessor's reaso\app'
pproval, whereupon such replacement equipment shall be
substituted in the applicablend the other related documents by appropriate endorsement or
amendment; or (b) pay the e Prepayment Price of the Damaged Equipment determined as
set forth in the related Exhessee shall notify Lessor of which course of action it will take
within fifteen (15) days afoss occurrence. If, within forty-five (45) days of the loss
occurrence, (a) Lessee fails to notify Lessor; (b) Lessee and Lessor fail to execute an amendment to
the applicable Equipment Schedule to elete the Damaged Equipment and add the replacement
equipment which failure is caused bylessee or (c) Lessee has failed to pay the applicable
Prepayment Price, then Lessor may, at it sole but reasonable discretion, declare the applicable
Prepayment Price of the Damaged Equipme t, to be immediately due and payable, and Lessee is
required to pay the same. The Net Proceeds insurance with respect to the Damaged Equipment
shall be made available by Lessor to be applied"tp discharge Lessee's prepayment obligation under
this Section or to replace the Damaged Equipment`s Lessee selects this option. The payment of the
Prepayment Price and the termination of Lessor's iiKerest in the Damaged Equipment is subject to
the terms of Section 10.3 hereof.
ARTICLE VII: OTHER OBLIGATIONS OF LESSEE
Section 7.1. Use; Permits. Lessee shall exercise due car in the installation, use, operation and
maintenance of the Equipment, and shall not install, use, Aerate or maintain the Equipment
improperly, carelessly or for a purpose or in a manner con ary to that contemplated by this
Agreement. Lessee shall operate and maintain the Equipm t fully in accordance with any
insurance policy provision, applicable prevailing industry scan ands and, if applicable, the
manufacturer's specifications therefor. Lessee shall obtain alt perm s and licenses necessary for
the installation, operation, possession and use of the Equipment. Less a shall comply with all State
and Federal Laws applicable to the installation, use, possession and o eration of the Equipment,
and if compliance with any such State and Federal Law requires changes additions to be made to
the Equipment, such changes or additions shall be made by Lessee at its ex ense. Lessee shall not
use any item of Equipment to haul, convey, store, treat, transport or disp a of any "hazardous
substances" or "hazardous waste" as such terms are defined in any federal, s to or local law, rule
or regulation pertaining to the protection of the environment (together, "En 'ronmental Laws").
Lessee agrees that if Lessee is required to deliver any item of Equipment to L ssor or Lessor's
agent, the Equipment shall be delivered free of all substances which are regulated b or form a basis
for liability under any Environmental Law. Lessee shall comply with all license and copyright
requirements of any software used in connection with the Equipment.
Section 7.2. Maintenance of Equipment by Lessee. Lessee shall keep the Equip nt at the
address specified in the respective Exhibit A and shall notify Lessor in writing prior to m ving the
Equipment to another address. Lessee shall, at its own expense, maintain, preserve and ep the
Equipment in good repair, working order and condition, and shall from time to time make all pairs
and replacements necessary to keep the Equipment in such condition, and in compliance with Late
and Federal Laws, ordinary wear and tear excepted. Lessee shall maintain Equipment in a condi n
Idoc_jlmlHunt CA 3c 8 716/01
suitable for 6rtification by the manufacturer thereof (if certification is available). In the event that
any parts or cessories forming park of any item or items of Equipment become worn out, lost,
destroyed, dam ed beyond repair or otherwise rendered unfit for use, Lessee, at its own expense
and expel )usl will replace or cause the replacement of such parts or accessories by
replacement parks accessories free and clear of all liens and encumbrances and with a value and
utility at least equal t hat of the parks or accessories being replaced (assuming that such replaced
parts and accessories re otherwise in good working order and repair). All such replacement parts
and accessories shall be eemed to be incorporated immediately into and to constitute an integral
portion of the Equipment an , as such, shall be subject to the terms of this Agreement. Lessor shall
have no responsibility for any°of these repairs or replacements.
Section 7.3. Taxes Other Go mmental Charges and Utility Charges. Except as expressly
limited by this Section, Lessee sh44 pay all taxes and other charges of any kind which are at any
time lawfully assessed or levied against or with respect to the Equipment, or any park thereof, or
which become due during the Lease Term, when assessed against Lessee. Lessee shall also pay
when due all utilities and other charges i curred in the operation, maintenance, use, occupancy and
upkeep of the Equipment, and all spe 'al assessments and charges lawfully made by any
governmental body that may be secured by lien on the Equipment; provided that with respect to
special assessments or other governmental c rges that may lawfully be paid in installments over a
period of years, Lessee shall be obligated to pN only such installments as are required to be paid
during the Lease Term as and when the same be me due. Lessee shall not be required to pay any
federal, state or local income, inheritance, estate, s cession, transfer, gift, franchise, gross receipts,
profit, excess profit, capital stock, corporate, or other 'milar tax payable by Lessor, Its successors or
assigns, unless such tax is made in lieu of or as a bstitute for any tax, assessment or charge
which is the obligation of Lessee under this Section.
Section 7.4. Advances. If Lessee shall fail to perforrn I
y of its obligations under this Article,
Lessor may, but shall not be obligated to, take such action as ay be necessary to cure such failure,
including the advancement of money, and Lessee shall be obli ated to repay all such advances on
demand, with interest at the rate of 18% per annum or thexnaximum rate permitted by law,
whichever is less, from the date of the advance to the date of repayVent.
ARTICLE Vill: TITLE; SECURITY INTEREST; LIENS
Section 8.1. Title. During the Lease Term, legal title to and ownershi of all Equipment and any
and all repairs, replacements, substitutions and modifications thereto shall1he in Lessee and Lessee
shall take all actions necessary to vest such title and ownership in Lessee.
Section 8.2. Security Interest. Lessee grants to Lessor a continuing, first p rity security interest
in and to the Equipment, all repairs, replacements, substitutions and modificaiio thereto or thereof
and all proceeds of the foregoing in order to secure Lessee's payment of all Re\Term,
ayments and
the performance of all other obligations to be performed by Lessee. Eachpment Group
constitutes security and collateral for Lessee's obligations under all Leases thatwned by the
same entity. Lessee will join with Lessor in executing such financing statements r documents
and will perform such acts as Lessor may reasonably request to establish and min valid first
lien and perfected security interest in the Equipment. Lessee shall deliver or cab delivered
to Lessor the original certificates of title relating to all vehicular Equipment. If red b Lessor,
Lessee shall obtain a landlord and/or mortgagee's consent and waiver wispect o the
Equipment. If requested by Lessor, Lessee shall conspicuously mark thuipmen with
appropriate lettering, labels or tags, and maintain such markings during the LTerm, s asclearly to disclose Lessor's security interest in theEquipment. Upon terminatia Lease threspect to any Equipment Group through exercise of Lessee's option to ppursuant
Articles X or through payment by Lessee of all Rental Payments and other amounts relating thereto,
ldoc.irm\Hunt CA 3c 9 716101
Lessor's security interest in such Equipment Group shall terminate, and Lessor shall execute and
deliver to L see such documents as Lessee may reasonably request to evidence the temnination of
Lessors sec 'ty interest in such Equipment Group. Lessee agrees this is a security agreement
under the Stat Uniform Commercial Code ("UCC") and Lessor may file financing statements with
respect to the Eq 'pment as permitted by the UCC.
Section 8.3. Liens\During the Lease Term, Lessee shall not, directly or indirectly, create, incur,
assume or suffer to e*t any Lien on or with respect to the Equipment, other than the respective
rights of Lessor and Lesee as herein provided. Except as expressly provided in Section 7.3 and
this Article, Lessee shall promptly, at its own expense, take such action as may be necessary to duly
discharge or remove any suLien. Lessee shall reimburse Lessor for any expenses incurred by
Lessor to discharge or remove'sny Lien.
Section 8.4. Modification of EWjprnent. Lessee will not, without the prior written consent of
Lessor, which consent will not be udYeasonably withheld, affix or install any accessory equipment or
device on any of the Equipment if 'such addition will change or impair the originally intended
functions, value or use of the Equipment_
Section 8.5. Personal Property. The Equipment is and shall at all times be and remain personal
property and not fixtures.
ARTICLE IX: WARRANTIES
Section 9.1. Selection of Equipment. The Equipment and the Contractor have been selected by
Lessee, and Lessor shall have no responsibility in connection with the selection of the Equipment,
the ordering of the Equipment, its suitability for the use intended by Lessee, the acceptance by the
Contractor or its sales representative of the order submitt ,, or any delay or failure by the Contractor
or its sales representative to manufacture, deliver or install the Equipment for use by Lessee.
Section 9.2. Contractor's Warranties. Lessor hereby assigns to Lessee for and during the related
Lease Term, all of its interest, if any, in all Contractor's warrantie , guarantees and patent indemnity
protection, express or implied, issued on or applicable to an Eq ipment Group, and Lessee may
obtain the customary services furnished in connection with such warranties and guarantees at
Lessee's expense. Lessor has no obligation to enforce any Contracts warranties or obligations on
behalf of itself or Lessee. \
Section 9.3. Disclaimer of Warranties. LESSEE ACKNOWLEDGES\FORNY
ECTED THE
EQUIPMENT WITHOUT ASSISTANCE OF LESSOR, ITS AGENTS ORS. LESSOR
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS , AS TO THE
VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BYLESSEQUIPMENT,
OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPEEQUIPMENT.
IN NO EVENT SHALL LESSOR BE LIABLE FOR ANY INCIDENTASEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIST OR THE
EQUIPMENT OR LESSEE'S USE OF THE EQUIPMENT.
ARTICLE X: OPTION TO PREPAY
Section 10.1. When Available. Provided there has been no Non -Appropriation or Event of D auIt,
Lessee shall have the option to prepay its obligations under any Lease on any Payment Date fo he
then applicable Prepayment Price set forth in Exhibit A relating thereto. In addition, in the event
Escrow Account is established for a Lease as described in Section 3.3 hereof, funds remaining i
1doc.l1m\Hunt CA 3c 10 716/01
such Escr9w Account may be applied to prepay the Lease, in whole or in part, as provided in the
related escctyw agreement.
Section 10.2. )Exercise of Option. Except with respect to a prepayment with funds remaining in an
Escrow Account, essee shall give notice to Lessor of its intention to exercise its option with respect
to any Lease not ss than thirty (30) days prior to the Payment Date on which the option will be
exercised and shal deposit with Lessor on the date of exercise an amount equal to all Rental
Payments and any oliher amounts then due or past due under the related Lease (including the
Rental Payment due oi�the Payment Date on which the option is exercised) and the applicable
Prepayment Price set forth, in the related Exhibit A.
Section 10.3. Release of L ssor's Interest. On receipt of the Prepayment Price in good funds
with respect to any Equipme t Group, the Lease with respect to such Equipment Group shall
terminate and all rights and interests of Lessee in such Equipment Group shall cease and Lessor will
deliver to Lessee all documents re4onably requested by Lessee to evidence the termination of all of
Lessor's interest in the Equipment �3,roup. Upon termination of Lessor's interest in the Equipment
Group, Lessee shall become entitled, to such Equipment Group AS IS, WHERE 1S, WITHOUT
WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOk,ANY PARTICULAR PURPOSE OR FITNESS FOR THE
USE CONTEMPLATED BY LESSEE, except that such Equipment Group shall not be subject to any
lien or encumbrance created by or arising thrb.ugh Lessor. To the extent any Contractor's warranties
inured to the benefit of Lessor, Lessor hereby`Vssigns them (without guaranty or any representation
as to such warranties) to Lessee.
ARTICLE XI: ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment by Lessor. All of Les§9i's right, title and/or interest in and to this
Agreement or any Lease hereunder, including, but note imited to, the Rental Payments and other
amounts payable by Lessee and Lessor's interest ik the Equipment, its rights upon Non -
Appropriation and Events of Default and its rights to pr6vide consents under a Lease may be
assigned and reassigned to one or more assignees or suba ignees by Lessor at any time, without
the consent of Lessee, provided 100% of Lessor's rights in a ase must be assigned in whole to a
single assignee. Upon assignment of a Lease by Lessor, Less is assignee shall have all rights of
Lessor in and to the assigned Lease. No such assignment sh II be effective as against Lessee
unless and until written notice of the assignment is provided to Lessee and such notice must be
provided as soon as reasonably practical after the assignment If requested, Lessee will
acknowledge in writing receipt of such notice. Lessee shall keep a co plete and accurate record of
all such assignments; provided, however, in the event Lessor assigns I interest in this Agreement
or in a Lease to an affiliate or to another entity related to Lessor, Lesso shall maintain a record of
such assignment for the benefit of Lessee.
Section 11.2. Assignment and Subleasing by Lessee. Neither this Agr&pment nor any Lease
hereunder or any Equipment may be sold, assigned, subleased, transferred,\require
tgaged
by Lessee.
ARTICLE XII: EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The following are Events of Defauease:
(a) Failure by Lessee to pay any Rental Payment or other paymebe paid
when due and the continuation of said failure for a period of ten (10) days (oason of
Non -Appropriation).
%doc.irm%Hunt CA 3c 11 7/6/01
E
(b) Failure by Lessee to maintain insurance as required by Article VI.
'M Failure by Lessee to observe and perform any covenant, condition or agreement on
its part toe observed or performed hereunder, other than as referred to in Clauses (a) and (b) of
this Section;:for a period of thirty (30) days after written notice specifying such failure and requesting
that it be rem�,Oied has been received by Lessee from Lessor, unless Lessor shall agree in writing to
an extension of`such time prior to its expiration; provided, however, if the failure stated in the notice
cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to
an extension of such time if corrective action is instituted by Lessee within the applicable period and
diligently pursued until the default is corrected.
(d) The determination by Lessor that any representation or warranty made by Lessee in
this Agreement was untrue` in any material respect upon execution of this Agreement or any
Exhibit A or Exhibit B provided''Lessee is given the opportunity to cure as set forth in Section 12.1(c)
hereof.
(e) The filing of a petition in bankruptcy by or against Lessee, or failure by Lessee
promptly to lift any execution, garnishment or attachment of such consequence as would impair the
ability of Lessee to carry on its governmental functions or assignment by Lessee for the benefit of
creditors, or the entry by Lessee into an agreement of composition with creditors, or the approval by
a court of competent jurisdiction of any adjustment of indebtedness of Lessee, or the dissolution or
liquidation of Lessee.
Section 12.2. Remedies on Default. Whenever any Event of Default shall have occurred, Lessor
shall have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) Lessor, with or without terminating any Leese, may declare all Rental Payments due
or to become due with respect to any or all Leases owned by it or an assignee of Lessor may
declare all Rental Payments due or to become due with respect to all Leases owned by such
assignee during the Fiscal Year in effect when the default occurs to be immediately due and payable
by Lessee, whereupon such Rental Payments shall be immediately due and payable.
(b) Lessor and its assignees, with or without terminating any Lease, may enter the
premises where the Equipment is kept and disable the Equipment subject to all Leases owned by it
or the same assignee to prevent further use thereof by Lessee and/or'may repossess any or all of
the Equipment by giving Lessee written notice to deliver the Equipment'i,n the manner provided in
Section 12.3; or in the event Lessee fails to do so within ten (10) days after receipt of such notice,
Lessor may enter upon Lessee's premises where the Equipment is kept and take possession of such
Equipment and charge Lessee for the reasonable costs incurred in repossessing the Equipment,
including reasonable attorneys' fees. Lessee hereby expressly waives any reasonable damages
occasioned by such repossession. Notwithstanding the fact that Lessor has takeri.possession of the
Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect
thereto during the Fiscal Year then in effect.
(c) If Lessor or its assignees terminates any Lease and, in its discretion, takes
possession and disposes of the Equipment or any portion thereof, the proceeds of `zany such
disposition shall be applied to pay the following items in the following order: (i) all reasonable costs
(including, but not limited to, attorneys' fees) incurred in securing possession of the Equipment;
(ii) all reasonable expenses incurred in completing the disposition; (ii!) any sales or transfer fixes;
and (iv) the applicable Prepayment Prices of the Equipment Groups. Any disposition proceds
remaining after the requirements of Clauses (i), (ii), (iii) and (iv) have been met shall be paid o
Lessee.
IdocJ1m%Hunt CA 3c 12 7/6/01
(d) Lessor may take any other remedy available, at law or in equity, with respect to such
Eventt,of Default, including those requiring Lessee to perform any of its obligations or to pay any
moneys, due and payable to Lessor and Lessee shall pay the reasonable attorneys' fees and
expense§jncuned by Lessor in enforcing any remedy hereunder.
Section 12.'3 Return of Equipment: Release of Lessee's Interest. Upon termination of any
Lease hereun)tr prior to the payment of all Rental Payments or the applicable Prepayment Price in
accordance withach Exhibit A: (i) Lessor may enter upon Lessee's premises where the Equipment
is kept and disable'the Equipment to prevent its further use by Lessee and (ii) Lessee shall promptly,
but reasonable in any event within ten (10) days after such termination, at its own cost and expense:
(a) perform any testing�,and repairs required to place the Equipment in the condition required by
Article Vll; (b) if deinstall'ation, disassembly or crating is required, cause the Equipment to be
deinstalled, disassembled and crated by an authorized manufacturer's representative or such other
service person as is reasonably satisfactory to Lessor; and (c) deliver the Equipment to a location in
the continental United States 'specified by Lessor, freight and insurance prepaid by Lessee. If
Lessee refuses to deliver the Equipment in the manner designated, Lessor may repossess the
Equipment and charge to Lessee the reasonable costs of such repossession. Upon termination of a
Lease in accordance with Article IV or Article XII hereof, at the election of Lessor and upon Lessor's
written notice to Lessee, full and unencumbered legal title and ownership of the Equipment subject
thereto shall pass to Lessor, Lessee shall have no further interest therein and Lessee shall execute
and deliver to Lessor such documents as Lessor may reasonably request to evidence the passage
of legal title and ownership to Lessor and termination of Lessee's interest in the Equipment.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this
Article is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement. 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 by Lessor.
Section 12.5. Late Charge. Whenever any Event of Default under Section 12.1, Clause (a) shall
have happened and be continuing, Lessor shall have the right, at its option and without any further
demand or notice, to require a late payment charge accruing from, the tenth day after the Payment
Date until the payment is made equal to the lesser of five cents ($.05) per dollar of the delinquent
amount per month or the lawful maximum, and Lessee shall be,. obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor; provided, however, that this Section
shall not be applicable if or to the extent that the application thereof would affect the validity of this
Agreement.
ARTICLE XIII: ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, or other communications hereunder shall be
sufficiently given and shall be deemed received when (a) personally delivered; 'or (b) three (3)
business days after being deposited in the United States mail in registered form with postage fully
prepaid; or (c) one (1) business day after being sent by reputable overnight courier, inv�pch case to
the addresses specified on the execution page hereof; provided that Lessor and Lesseby notice
given hereunder, may designate different addresses to which subsequent notices, certi ates, or
other communications will be sent.
Section 13.2. Financial Information. Lessee will provide Lessor with current financial statemdgts,
budgets, proof of appropriation for the ensuing Fiscal Year and such other financial information
reasonably necessary and relating to the ability of Lessee to continue this Agreement and any Lease
as may be requested by Lessor.
Woe.jlmNHunt CA 3c 13 7I6/01
Section 13.3. Binding Effect. This Agreement and each Lease hereunder shall inure to the benefit
of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.4. everabilit . In the event any provision of this Agreement or any Lease shall be
held invalid or un6QforGeable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforce ble any other provision hereof.
Section 13.5. Entire\Aareement, Amendments Changes and Modifications. This Agreement
constitutes the entire a reement of the parties with respect to the subject matter hereof and
supersedes all prior an contemporaneous writings, understandings, agreements, solicitation
documents and representatI ns, express or implied, with respect to the subject matter hereof. This
Agreement may be amended r modified only by written documents duly authorized, executed and
delivered by Lessor and Lessee.
Section 13.6. Captions. The caplilons or headings in this Agreement are for convenience only and
in no way define, limit or describe th scope or intent of any provisions, Articles, Sections or Clauses
hereof.
Section 13.7. Further Assurances an Corrective Instruments. Lessor and Lessee agree that
they will, from time to time, execute, 6
knowledge and deliver, or cause to be executed,
acknowledged and delivered, such supple ents hereto and such further instruments as may
reasonably be required for correcting any inladequate or incorrect description of the Equipment
hereby leased or intended so to be, or for oth ise carrying out the expressed intention of this
Agreement. 67
Section 13.8. Execution in Counterparts. This A reement may be simultaneously executed in
several counterparts, each of which shall be an origina Ind
all of which shall constitute but one and
the same instrument, provided that only the original f this Agreement and each Equipment
Schedule marked "Original - Chattel Paper" on the exec ion page thereof shall constitute chattel
paper under the Uniform Commercial Code.
Section 13.9. Applicable Law and Venue. This Agreement a d each Lease shall be governed by
and construed in accordance with the laws of the State of Califor 'a and any and all actions initiated
under this Agreement or concerning a dispute of its terms shall be nought solely and exclusively in
a court of competent jurisdiction in the County of Orange, California, nd no other court.
Section 13.10. Finaneina Statement. A carbon, photographic o other reproduction of this
Agreement is sufficient as a financing statement in the State to perfect th security interests granted
to Lessor.
Section 13.11. Usury. It is the intention of the parties hereto to comply wit any applicable usury
laws; accordingly, it is agreed that, notwithstanding any provisions to the con ry herein or in any
Exhibit A. in no event shall this Agreement or any Lease hereunder require the ayment or perrnit
the collection of Interest or any amount in the nature of Interest or fees in exces of the maximum
amount permitted by applicable law. Any such excess Interest or fees shall first be plied to reduce
Principal, and when no Principal remains, refunded to Lessee. In determining whet r the Interest
paid or payable exceeds the highest lawful rate, the total amount of Interest shall be sp ead through
the applicable Lease Term so that the Interest is uniform through such term.
Section 13.12. Lessee's Performance. Time is of the essence. A party's failure at an time to
require strict performance by the other of any obligations shall not waive or diminish such arty's
rights thereafter to demand strict compliance by the other.
ldocJ1m%Hunt CA 3c 14 716/01
Section 13.13. Third Party Beneficiaries. Nothing herein shall be construed or interpreted to give
any person other than Lessee and Lessor any legal or equitable right, remedy or claim under or in
respect of this Agreement or any Lease. Lessor and Lessee agree that no Contractor is a third party
beneficiary of this Agreement and there are no third party beneficiaries of this Agreement.
Section 13.14. Waiver of Jury Trial. Lessor and Lessee hereby waive any right to trial by jury
In any action or proceeding with respect to, in connection with or arising out of this
Agreement or any Lease.
[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS]
1docJ1m%Hunt CA 3c 15 7/6101
GE CAPITAL PUBLIC FINANCE, INC.
EXECUTION PAGE OF MASTER LEASE AGREEMENT
Agreement Date: ,Jlkly 16, 2001
Fiscal Year Commence ent Date: October 1
Fiscal Year End Date: S tember 30
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its corporate name
by its duly authorized officer, and Lessee has caused this Agreement to be executed in its name by
its duly authorized officer.
CITY OF HUNTINGTON BEACH, a rrtunicipal GE CAPITAL PUBLIC FINANCE, INC.,
corporation of the State of California,`... Lessor
Lessee
cuJ B
Mayor
ATTEST:
City Cleric
Name: Thomas E. Murphy
Title: Vice President
bate: � D
,.
AP ROVED AS TO FORM: By:
f� Name:
tCity Atto y
Title:
INITIATED AND A P OV D: Date:
w
Fire Chief/Information Systems Director
INITIATED AND APPROVED:
City T re
REVIEWED -AND APPROV
City Administrator
and
6101
Woc.jWHunt CA 3c 16 716101
C]
•
Address: 2000 Main Street
Huntington Beach, CA 92648
Attention: t, Evonne Travers
Interim Network Manager
Telephone: 714-374-1701
Facsimile: 714�74-1614
Address:
8400 Normandale Lake Blvd.
Suite 470
Minneapolis, MN 55437-1079
Attention:
Risk Management
Telephone:
800-346-3164
Facsimile:
952-897-5601
Original - Chattel Paper
Woc.jlm\Hunt CA 3c 17 7/6/01
GE CAPITAL PUBLIC !FINANCE, INC.
EQUIPMENT SCHEDULE NO. «ADDON»
EXHIBIT A
of Equipment, Rental Payments, Etc.
The following Equipment comprises an Equipment Group which is the subject of the Master Lease
Agreement dated as of July 16;� 2001 (the "Agreement"), between the undersigned Lessor and
Lessee. The Agreement is incorporated herein in its entirety, and Lessee hereby reaffirms all of its
representations and warranties contained in the Agreement. Lessee warrants that no Non -
Appropriation and no Event of Defaulfbr any event which, with the passage of time or the giving of
notice, would constitute a default has occurred under any Lease subject to the Agreement. In
accordance with the requirements of applicable State Law, Lessee has appropriated or obtained
sufficient appropriations to pay the Rental Payments due under this Lease in the current Fiscal Year
and such funds have not been expended for 911y other purpose.
Lease Date: ((LEASE DATE>)
EQUIPMENT GROUP
1. Location. The Equipment Group is located at the fol Awing address. If requested by Lessor,
Lessee will provide the complete legal descriptions �f the property where the Equipment
Group is located. Prior to relocation of the Equipment,Group or portion thereof during the
Lease Term, Lessee will provide written notice to Lessor.`,.
2.
Use. Lessee will use the Equipment Group to perform the following
governmental or proprietary functions:
3. DescrOtion. The following description of the Equipment Group is supplem ted by the
description of items of Equipment in the Contractors invoices delivered by Less to Lessor
and/or by the description of Equipment in Payment Request Forms executed by essor to
authorize disbursements from an Escrow Account.
Woc.jWHunt CA 3c 1 7/6/01
C�
•
A. \ DELIVERABLE EQUIPMENT
Quanti \ Cost Per Unit
description
((EQUIPMENT))
Serial Number*
B. NONDELIVE BLE EQUIPMENT
Quanti C68t Per Unit Description Serial Number
((EQUIPMENT»
*If serial numbers are not available t the date of signing this Exhibit A, Lessee hereby authorizes
Lessor to insert the serial numbers en available and Lessor shall provide Lessee with a copy of
the completed Exhibit A.
Lessee will make Rental Payments
in the attached schedule.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
Attachment: Payment Schedule
Principal and Interest at the annual rate as set forth
GE CAPITAL PUBLIC FINANCE, INC.,
Lessor
Title: Vice President
Date:
By:
Name:
Title:
Date:
Original - Chattel Paper
and
%doc.jlmlHunt CA 3c 2 7/6101
GE CAPITAL PUBLIC FINANCE, INC.
PAYMENT SCHEDULE RELATING TO EQUIPMENT SCHEDULE NO. eACCTNUM»
Date of Issue:
, 200_
Funding Date:
, 200_
Payment Paym
Total
Number Date
j
Payment
-After payment of Rental Payment due on such date.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Title:
Date:
Principal Interest Prepayment
Component Component Price*
GE OAPITAL PUBLIC FINANCE, INC.,
By:
Title:
Date:
By:
Name: Joanne L. Manthe
Title: Secretary
Date:
Idoc.jlm%Hunt CA 3c 7/6/01
•
•
GE CAPITAL PUBLIC FINANCE, INC.
EQUIPMENT SCHEDULE NO. «ADDON»
EXHIBIT B
Certificate of Acceptance
I, the undersigned, hereby cer+ that I am the duly qualified and acting officer of the Lessee
identified below and, with respect to the above -referenced Equipment Schedule dated
((LEASE_DATE)) to the Master Leasee Agreement dated as of July 16, 2001 (the "Agreement", and
together with such Equipment Sched)Ale, the "Lease"), by and between Lessee and GE Capital
Public Finance, Inc. ("Lessor"), that: 1.,
1. The equipment described in"Exhibit A (the "Equipment Group") has been delivered
and installed in accordance with Lessee's §pecifications, is in good working order and is fully
operational and has been fully and finally accepted by Lessee on or before the date indicated below.
2. Rental Payments are due and payable by Lessee on the dates and in the amounts
indicated on Exhibit A of the above -referenced Equipment Schedule as such Exhibit is completed by
the parties.
CITY OF HIVTINGTON BEACH, a
municipal co*ration of the State of California
Lessee
Titl
Da
1doc.j1mlHunt GA 3c 7/6/01
0
GE CAPITAL PUBLIC FINANCE, INC.
EXHIBIT C
Opinion of Counsel
(to be typed on letterhead of counsel) SAMPLE
[insert date which is date. on or after date of Lessee's execution of documents]
GE Capital Public Finance, Iic. City of Huntington Beach
8400 Normandale Lake Blvd.Suite 470 2000 Main Street
Minneapolis, MN 55437 �� Huntington Beach, CA 92648
Re: Master Lease Agreement c
Finance, Inc. ("Lessor") and
[Counsel to expand opinion to
and delete refs
Ladies and Gentlemen:
1 as of July 16, 2001 by and between GE Capital Public
City of Huntington Beach ("Lessee")
le executed Addenda to Lease, if applicable,
to Escrow Agreement, if not applicable]
have acted as counsel to Lessee with respect tQ the Master Lease Agreement described above
and various related matters, and in this capacity hay a reviewed a duplicate original or certified copy
thereof, Equipment Schedule No. ((ADDON)) attac'h@d thereto and executed pursuant thereto
(together, the "Lease") and the Escrow Agreement ted as of (the "Escrow
Agreement") among Lessor, Lessee and as escrow agent. Based upon the
examination of these and such other documents as I deem 41evant, it is my opinion that:
1. Lessee is a political subdivision of the staof ((STATE)) (the "State"), duly
organized, existing and operating under the Constitution and law of the State.
2. Lessee is authorized and has power under applicabldlaw to enter into the Lease and
the Escrow Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3. The Lease and the Escrow Agreement have been duly, authorized, approved,
executed and delivered by and on behalf of Lessee, and are legal, valid and binding contracts of
Lessee enforceable in accordance with their terms, except to the extent limited-�y State and Federal
laws affecting remedies and by bankruptcy, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights. `S
4. The authorization, approval and execution of the Lease and the Escr'Qw Agreement
and all other proceedings of Lessee relating to the transactions contemplated theeeb\ have been
performed in accordance with all applicable open meeting, public records, public bidding and all
other laws, rules and regulations of the State.
5. The execution of the Lease and the Escrow Agreement and the appropria ' n of
moneys to pay the Rental Payments coming due thereunder for the current Fiscal Year of Lesse'v, do
not and will not result in the violation of any constitutional, statutory or other limitation relating to f4e
manner, form or amount of indebtedness which may be incurred by Lessee.
Woc.jlm\Hunt CA 3c 1 7/6/01
•
•
6. There is no litigation, action, suit or proceeding pending or before any court,
administrative agency, arbitrator or governmental body that challenges the organization or existence
of Les e; the authority of Lessee or its officers or its employees to enter into the Lease or the
Escrow reement; the proper authorization, approval and/or execution of the Lease, the Escrow
Agreement nd other documents contemplated thereby; the appropriation of moneys to make Rental
Payments un r the Lease for the current Fiscal Year of Lessee; or the ability of Lessee otherwise
to perform its, obligations under the Lease, the Escrow Agreement and the transactions
contemplated the and, to the best of my knowledge, no such litigation or actions are threatened.
7. The i
Lessee will not be or
8. The City
it financed by the Lease is personal property, and when used by the
fixtures under the laws of the State.
meeting on
supplemented or repealed and
I of Lessee approved the transaction described in the Lease at a
—, 20_, and such action has not been amended, modified,
mains in full force and effect.
9. This opinion may Wr�elied upon by assignees of Lessor.
Very truly yours,
SAMPLE
(type name and title under signature)
1doc.jlm\Hunt CA 3c 2 7/6/01
•
•
ATTACHMENT 4
JUL 06 '01 15:12 FR 6F/EXEC
952 897 5631 TO 91714374159U P.06
0
SAMPLE
COMPUTF-R ADDENDUM
THIS ADDENDUM dated as of , 20_ to Equipment Schedule No.
«ACCTNUMu (the "Equipment Schedule") to the Master Lease Agreement dated as of July
16, 2001 (the "Agreement") is made and entered into by and between GE Capital Public
Finance, Inc. ("Lessor") and the City of Huntington Beach, a municipal corporation of the
State of California ("Lessee"),
Capitalized terms not otherwise defined herein have the meanings ascribed to them in the
Equipment Schedule.
The following provisions are hereby incorporated into and made part of the Equipment
Schedule.
1. Provided there has been no Non -Appropriation or Event of Default under the Lease,
at least ninety (90) days but not more than one hundred twenty (120) days prior to
[insert date of last scheduled payment), (the "Termination Date"), or thirty
(30) days prior to the date Lessee exercises its option to pay the Prepayment Price, Lessee
may, at its option, provide written notice to Lessor that Lessee has elected to have Lessor
provide the Remarketing Assistance described below. The election shall be with respect to
the entire Equipment Group.
Remarketing Assistance. Within thirty (30) days after the Termination Date or within thirty
(30) days after the Prepayment Price is paid, Lessee shall deliver the entire Equipment
Group with the exception of the items of the Equipment Group described in the Equipment
Schedule under the caption "Nondeliverable Equipment" (the `Nondeliverable Equipment") to
Lessor or its designee upon the following terms and conditions.
(i) Lessee has paid Lessor all amounts due under the Equipment Schedule by
payment of all Rental Payments due thereunder or payment of the Prepayment Price and
has fully discharged its payment obligations thereunder;
(ii) Lessee delivers the Equipment Group (with the exception of the
Nondeliverable Equipment) in the manner and to the location as directed by Lessor or its
designee in the condition required by Section 7.2 of the Agreement and in accordance with
the following.
(a) Lessee, at least five (5) business days prior to its delivery of the
Equipment Group, provides Lessor a detailed written list of all components of the Equipment
Group (with the exception of the Nondeliverable Equipment), including a listing of model and
serial numbers for all components and a detailed listing of all internal circuit boards by both
the model and serial number for all hardware comprising the Equipment Group and a listing
of all software features listed individually.
(b) Upon request of Lessor, Lessee provides or causes the vendors or
manufacturers of the Equipment to provide Lessor the following documents: (1) one set of
service manuals and operating manuals, including replacements and/or additions thereto,
such that all documentation is up to date; and (2) one set of documents detailing Equipment
configuration, operating requirements, maintenance records and other technical data
conceming the set-up and operation of the Equipment, including replacements and/or
additions thereto, such that all documentation is up to date.
Idoc.jlrn Hunt Camp Addendum 3c 1 716/01
inn, ncn nn�l cc71 001i P nr_
JUL 05 '01 15:12 FR GECPF/EXEC 952 897 5531 TO 917143741590 P.07
• 9.
(c) Lessee shall cause all Equipment to be clean and cosmetically
acceptable, and in such condition so that it may be immediately installed and placed into use
in a similar environment.
(d) Lessee shalt properly remove all. of Lessee -installed markings that
are not necessary for the operation, maintenance or repair of the Equipment.
(e) Lessee shall provide for the deinstallation, packing, transporting and
certifying of the Equipment (exclusive of Nondeliverable Equipment) to the location in the
continental United States specified by Lessor or its designee. Lessee shall obtain and pay for
a policy of transit insurance for the delivery of the Equipment Group (exclusive of
Nondeliverable Equipment) in an amount equal to the replacement value of such Equipment
and Lessor and Lessee shall be named as the loss payees on all such policies of insurance.
Upon receipt of the Equipment by Lessor or Lessor's agent, the risk of loss therefor shall
pass to Lessor.
(iii) Lessor or its designee shall arrange for the commercially reasonable sale of
the delivered Equipment and Lessee hereby authorizes Lessor to arrange for a commercially
reasonable sale and hereby authorizes Lessor or its designee to execute a bill of sale for the
delivered Equipment in the form of Exhibit 1 hereto.
(iv) Upon sale of the delivered Equipment, Lessor shall provide written notice to
Lessee of the gross sale proceeds.
(v) Lessor shall pay all "Net Sale Proceeds" (gross sale proceeds less all costs,
expenses, fees, taxes, appraisals, including, but not limited to, all maintenance, repair and
remarketing fees) of the sold Equipment to Lessee within ten (10) business days after the
sale. The fees and expenses in the parenthetical in the prior sentence shall not exceed
of the gross sale proceeds.
2. All terms and conditions of the Lease remain in full force and effect_
3. If Lessor assigns the Equipment Schedule to which this Addendum relates, the rights
and obligations of Lessor under this Addendum are not sold to the assignee of the
Equipment Schedule but remain the rights and obligations of Lessor.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum as of the date
referenced above by their duly authorized representatives.
CITY OF HUNTINGTON BEACH, a municipal
corporation of the State of California,
Lessee
By:
Name:
Title:
Date:
Idoc.j1M\Hunt Comp Addendum 3c 2
G€ CAPITAL PUBLIC FINANCE, INC.,
Lessor
By:
Name: Thomas -E.-Murphy
Title: Vice President
Date:
716101
SUL-06-2001 13:1e 952 997 5631 99% P.07
JUL 05 '01 15:13 FR GECPF/EXEC 952 897 5631 TO 917143741590 P.08
By:
Name: Joanne L. Manthe
Title: Secrets
Date:
1doo.JfmlHun! Comp Addendum 3c
3
JUL-06-2001 13t19 952 897 5631 99%
716161
P.09
JUL 06 '01 15:13 FIR 5ECPF/EXEC 952 897 5631 TO 917143741590 P.09
0 0
Exhibit I
BILL OF SALE
In consideration of the sum of $ (the "Purchase Price"), receipt of which is hereby
acknowledged, the City of Huntington Beach, a municipal corporation of the State of California ("Seller")
does hereby sell and transfer to ("Buyer") the personal property described in
Attachment A (the "Equipment"). The Equipment is in a used condition. Seller is neither a manufacturer of,
nor distributor of, nor a deafer or merchant in said Equipment or similar property.
Seller makes no warranty of merchantability with respect to the Equipment and the Equipment is sold in an
"AS IS, WHERE IS" condition, with all faults. By payment of the Purchase Price to Seller, Buyer affirms that
it has not relied on Seller's skill or judgment to select or furnish the Equipment for any particular purpose and
that Seller makes no warranty that the Equipment is fit for any particular purposes and there are no
representations or warranties, expressed, implied or statutory, except that Seller represents and warrants
that it owns the Equipment, the Equipment is free and clear of all liens and encumbrances arising through
Seller and Seller has full power, right and authority to sell the Equipment.
This is a final and exclusive expression of the agreement of Seller and Buyer and no course of dealing or
usage of trade or course of performance shall be relevant to explain or supplement any term expressed in
this Bill of Sale.
IN WITNESS WHEREOF, Seller has executed this instrument the _ day of
Attachment A
CITY OF HUNTINGTON BEACH, a
municipal corporation of the State of
California, Seller
716101
JUL-06-2001 13:18
952 897 5631 96/
** TOTAL PAGE.09 **
"
RCA ROUTING SHEET
INITIATING DEPARTMENT:
Fire/Information Systems
SUBJECT:
APPROVE MASTER LEASE AGREEMENT WITH GE
CAPITAL PUBLIC FINANCE FOR NETWORK HARDWARE
REPLACEMENT
COUNCIL MEETING DATE:
July 16, 2001
RCA ATTACHMENTS
STATUS
Ordinance (w/exhibits & legislative draft if applicable)
Not Applicable
Resolution (w/exhibits & legislative draft if applicable)
Not Applicable
Tract Map, Location Map and/or other Exhibits
Not Applicable
Contract/Agreement (wlexhibits if applicable)
(signed in full by the City Attome
Attached
Subleases, Third Party Agreements, etc.
(Approved as to form by Cit Attome
Not Applicable
Certificates of Insurance (Approved by the CityAttomey)
Not Applicable
Financial Impact Statement Unbud et, over $5,000
Attached
Bonds If applicable)
Not Applicable
Staff Report If applicable)
Not Applicable
Commission, Board or Committee Report if applicable
Not Applicable
Findings/Conditions for Approval and/or Denial
Not Applicable
EXPLANATION FOR "MISSING ATTACHAAEN7S
RCA Author: Travers/MadrigallDolder