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HomeMy WebLinkAbout2006 CON Saulsbury Hill Financial - Caterpillar Loader PurchaseMASTER EQUIPMENT LEASE/PURCHASE AGREEMENT This Master Equipment Lease/Purchase Agreement (the "Agreement") dated as of March 24, 2006, and entered into between Saulsbury Hill Financial, LLC, a Colorado limited liability company ("Lessor"), and City of National City, California, a body corporate and politic existing under the laws of the State of California ("Lessee"). WITNESSETH: WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Schedule (as each such term is defined[ herein), subject to the terms and conditions of and for the purposes set forth in each Lease; and in the event of a conflict the terms of a Schedule prevail; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein; and WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement and the Schedules hereto for the purposes set forth herein; and WHEREAS, the governing body of Lessee has authorized the execution and delivery of this Agreement and the Leases pursuant to Resolution No. 2006-38, approved on March 07, 2006; Now, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise: "Acquisition Amount" means the amount specified in each Lease and represented by Lessee to be sufficient to acquire the Equipment listed in such Lease, which amount shall be not less than $95,000. "Acquisition Fund" means, with respect to any Lease, the fund established and held by the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any. "Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund Agreement, substantially in the form of Exhibit A attached hereto, in form and substance acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and administered. 1 "Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any Acquisition Fund Agreement, and its successors and assigns. "Acquisition Period" means, with respect to each Lease, that period stated in the Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be expended on Equipment Costs. "Agreement" means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to the Agreement pursuant to Section 13.05. "Code" means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder. "Commencement Date" means, for each Lease, the date when Lessee's obligation to pay rent commences under such Lease, which date shall be the earlier of (i) the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, and (ii) the date on which sufficient moneys to purchase the Equipment listed in such Lease are deposited for that purpose with an Acquisition Fund Custodian. "Equipment" means the property listed in each of the Leases and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. "Equipment Costs" means the total cost of the Equipment listed in each Lease, including all delivery charges, installation charges, capitalizable consulting and training fees approved by Lessor, legal fees, fmancing costs, and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set forth in each Lease, and otherwise incurred in connection with the financing provided by the lease -purchase of the Equipment as provided in each Lease; provided that in no event shall approved consulting and training fees or other non-capitalizable "soft" costs relating to the Equipment listed in any Lease which are to be financed by Lessor hereunder exceed 2% of the total cost of such Equipment as determined by Lessor; and provided further, that in no event shall capitalizable delivery charges, installation charges, taxes and similar capitalizable "soft costs" relating to such Equipment be included without Lessor's prior consent. "Event of Default" means an Event of Default described in Section 12.01. "Lease" means a Schedule and the terms of this Agreement which are incorporated by reference into such Schedule. Each Schedule shall constitute a separate and independent Lease. "Lease Proceeds" means, with respect to each Lease, the total amount of money to be paid by Lessor to the Acquisition Fund Custodian for deposit and application in accordance with such Lease and the Acquisition Fund Agreement. 2 "Lease Term" for each Lease means the Original Term and all Renewal Terms therein provided and for this Agreement means the period from the date hereof until this Agreement is terminated. "Lessee" means the entity referred to as Lessee in the first paragraph of this Agreement. "Lessor" means (a) the entity referred to as Lessor in the first paragraph of this Agree- ment or (b) any assignee or transferee of any right, title or interest of Lessor in and to the Equipment under a Lease or any Lease (including Rental Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform under a Lease. "Maximum Equipment Cost" means the amount specified in each Schedule. "Original Term" means the period from the Commencement Date for each Lease until the end of the fiscal year of Lessee in effect at such Commencement Date. "Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease. "Renewal Terms" means the renewal: terms of each Lease, each having a duration of one year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable thereto. "Rental Payments" means the basic rental payments payable by Lessee under each Lease pursuant to Section 4.01, in each case consisting of a principal component and an interest component. "Schedule" means each separately numbered Schedule of Property substantially in the form of Exhibit B-1 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit B-2 hereto. "State" means the State of California. "Utilization Period" means the date, with respect to each Lease not funded under an Acquisition Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the Equipment under such Lease as indicated in Section 3.04(b). "Vendor" means the manufacturer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer or supplier with whom Lessor arranged Lessee's acquisition and financing of the Equipment pursuant to the applicable Lease. ARTICLE II Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on th.e date hereof and as of the Commencement Date of each Lease as follows: 3 (a) Lessee is a political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State, with full power and authority to enter into this Agreement and each Lease and the transactions contemplated hereby and to perform all of its obligations hereunder and under each Lease. (b) Lessee has duly authorized the execution and delivery of this Agreement and each Lease by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and each Lease. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (e) Lessee has complied with such public bidding requirements as may be applicable to this Agreement and each Lease and the acquisition by Lessee of the Equipment as provided in each Lease. (f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under each Lease. (g) Lessee has kept, and throughout the Lease Term of any Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annualaudited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments to the financial statements) within 180 days of its fiscal year end, (ii) such other fmancial statements and information as Lessor may reasonably request, and (iii) its annual budget for the following fiscal year within 90 days of the current fiscal year end. The financial statements described in subsection (i) shall be accompanied by an unqualified opinion of Lessee's auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns. (h) Lessee has an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Lease Term to such item. (i) The payment of the Rental Payments or any portion thereof is not (under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property; or (y) on a present value 4 basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Equipment Costs for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (j) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee's financial condition or impairs its ability to perform its obligations hereunder. Lessee will, at its expense, maintain its legal existence in good standing and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor's security interest in the Equipment and Lessor's rights and benefits under this Lease. ARTICLE III Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to continue the Lease Term of each Lease through the Original Term and all Renewal Terms and to pay the Rental Payments thereunder. Lessee affirms that sufficient funds are available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law, to have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request is not approved. Section 3.03. Nonappropriation. Lessee is obligated only to pay such Rental Payments under each Lease as may lawfully be made from funds budgeted and appropriated for that purpose during Lessee's then current fiscal year. Should Lessee fail to budget, appropriate or 5 otherwise make available funds to pay Rental Payments under any Lease following the then current Original Term or Renewal Term, such Lease or Leases shall be deemed terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination at least 90 days prior to the end of the then current Original Term or Renewal Term, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If any Lease is terminated in accordance with this Section, Lessee agrees to peaceably deliver the Equipment to Lessor at the location(s) to be specified by Lessor. Section 3.04. Conditions to Lessor's Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease, Lessee shall deliver to Lessor the following: (i) A fully completed Schedule, executed by Lessee; (ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the Vendor upon execution of the Lease; (iii) A Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor; (iv) A certified copy of a resolution, ordinance or other official action of Lessee's governing body authorizing the execution and delivery of this Lease and performance by Lessee of its obligations hereunder; (v) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor; (vi) Evidence of insurance as required by Section 7.02 hereof; (vii) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02; (viii) A copy of a fully completed and executed Form 8038-G; (ix) An Essential Use/Source of Funds Certificate in substantially the form attached as Exhibit E; and (x) Such other items, if any, as are set forth in such Lease or are reasonably required by Lessor. (b) In addition, the performance by Lessor of any of its obligations pursuant to any Lease shall be subject to: (i) no material adverse change in the financial condition of Lessee since the date of this Lease, (ii) no Event of Default having occurred, and (iii) if no Acquisition 6 Fund has been established, the Equipment must be accepted by Lessee no later than December 31, 2006 (the "Utilization Period"). (c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing body, will reimburse Lessee for the prior payment of any such Acquisition Amounts by Lessee to the Vendor, upon receipt of the documents described in Sections 5.01(a) and (b); or if an Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor will deposit the Acquisition Amount for Equipment described in the Schedule with the Acquisition Fund Custodian. (d) This Agreement is not a commitment by Lessor to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into any proposed Lease shall be a decision solely within Lessor's discretion. (e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease. Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Lease. Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee. Section 3.05. Nonsubstitution. If Lessor terminates a Lease pursuant to Section 12.02 or Lessee terminates a Lease pursuant to Section 3.03, Lessee agrees, to the extent not prohibited by law, not to purchase, lease, rent or otherwise acquire equipment performing functions similar to those performed by the Equipment described in such Lease or obtain from any source the services or information that the Equipment described in such Lease was to perform or provide, in each case for a period equal to the shorter of (a) the longest period (if any) permitted by State law for such purpose or (b) 360 days after such termination or occurrence. ARTICLE IV Section 4.01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the dates and in such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental Payment not paid on the date such payment i.s due at the rate of 12% per annum or the maximum amount permitted by law, whichever is less, from such date. Lessee shall not permit the federal government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest payments as more fully detailed on each Schedule, the interest on which begins to accrue as of the Commencement Date for each such Schedule. Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the Lease Term. 7 Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee. Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, after it has been accepted by Lessee, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances. Section 4.05. Tax Covenants. (a) Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes. (b) In the event that Lessee does not spend the moneys in the Acquisition Fund within six (6) months of the date the deposit is made pursuant to Section 3.04(c), Lessee will, if required by section 148(f) of the Code to pay rebate: (i) establish a Rebate Account and deposit the Rebate Amount (as defined in Section 1.148-3(b) of the Federal Income Tax Regulations) not less frequently than once per year after the applicable Commencement Date; and (ii) rebate to the United States, not less frequently than once every five (5) years after the applicable Commencement Date, an amount equal to at least 90% of the Rebate Amount and within 60 days after payment of all Rental Payments or the Purchase Price as provided in Section 10.01(a) hereof, 100% of the Rebate Amount, as required by the Code and any regulations promulgated thereunder. Lessee shall determine the Rebate Amount, if any, at least every year and upon payment of all Rental Payments or the Purchase Price and shall maintain such determination, together with any supporting documentation required to calculate the Rebate Amount, until six (6) years after the date of the final payment of the Rental Payments or the Purchase Price. Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component shall be at a Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease. 8 For purposes of this Section, "Event of Taxability" means a determination that the interest component is includible for federal income tax purposes in the gross income of the owner thereof due to Lessee's action or failure to take any action. Section 4.07. Mandatory Prepayment. If the Lease Proceeds are deposited into an Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition Period and not applied to Equipment Costs, shall be applied by Lessor on the next Rental Payment date, pro rata to the prepayment of the principal component of the outstanding Rental Payments due under the applicable Schedule. ARTICLE V Section 5.01. Delivery, Installation and Acceptance of Equipment. (a) Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in the Leases and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. When the Equipment listed in any Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering to Lessor an Acceptance Certificate in the form attached hereto as Exhibit F. (b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of an Acceptance Certificate from Lessee, prepare a Schedule of Property and Rental Payment Schedule in the forms attached hereto as Exhibits B-1 and B-2. Lessee shall execute and deliver such Schedules to Lessor within 5 business days of receipt. Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Term. Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be relocated from the base location specified for it in the Lease on which such item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment. Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body;provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest (including the reversionary interest) of Lessor in and to the Equipment or its interest or rights under the Lease. 9 Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and working order, in accordance with manufacturer's recommendations. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. Upon the prior written consent of Lessor, which consent shall not be unreasonably withheld, Lessee may use another third party maintenance provider provided the maintenance contract between Lessee and such third party requires the third party to maintain the Equipment at the manufacturer's then current release, revision and engineering change levels, including hardware, software enhancements and microcode levels. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re -certify the Equipment as eligible for manufacturer's maintenance upon the return of the Equipment to Lessor as provided for herein. Lessee shall not alter any item of :Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor. ARTICLE VI Section 6.01. Title to the Equipment. During each Lease Term, and so long as Lessee is not in default under Article XII hereof, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions of the applicable Lease. Lessee shall at all times protect and defend, at its own cost and expense, its title in and to the Equipment from and against all claims, liens and legal processes of its creditors, and keep all Equipment free and clear of all such claims, liens and processes. Upon the occurrence of an Event of Default or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 12.02. Upon purchase of the Equipment under a Lease by Lessee pursuant to Section 10.01, Lessor's security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security interest in the Equipment subject to the related Lease. Section 6.02. Security Interest. To secure the payment of all of Lessee's obligations under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest constituting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and invest- ments held from time to time in the Acquisition Fund and (c) any and all proceeds of any of the foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest in the Equipment, the Acquisition Fund and the proceeds thereof. 10 Section 6.03. Personal Property. The Equipment is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. ARTICLE VII Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, liens, and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the Equipment will be used for a govern- mental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during each Lease Term. Section 7.02. Insurance. Lessee shall during each Lease Term maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the then applicable Purchase Price of the Equipment; (b) liability insurance naming Lessor as additional insured that protects Lessor from liability in all events in form and amount satisfactory to Lessor; and (c) worker's compensation coverage as required by the laws of the State; provided that, with Lessor's prior written consent, Lessee may self -insure against the risks described in clause (a). Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout each Lease Term. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancellation or modification. Whether or not Lessee provides self-insurance, Lessee hereby affirms that it assumes all risk of loss of, or damage to and liability related to injury or damage to persons or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Lease. Section 7.03. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may, but shall be under no obligation to, maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by, Lessor with interest thereon from the due date until paid at the rate of 12% per annum or the maximum amount permitted by law, whichever is less. 11 ARTICLE VIII Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. If Lessee elects to replace any itern of the Equipment (the "Replaced Equipment") pursuant to this Section, the replacement equipment (the "Replacement Equipment") shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. Lessor shall receive a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, d.ocumentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Lease. Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment date after the occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the damaged. equipment. For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or cause to be paid to Lessor the amount of the then applicable Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall terminate and Lessor's security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing such Equipment and such other Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV. 12 ARTICLE IX Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of the Equipment shall be on an "as is" basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item, product or service provided for in this Agreement or any Lease. Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attorney -in -fact during each Lease Term, so long as Lessee shall not be in default under the related Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely payments under a Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to the Equipment. ARTICLE X Section 10.01. Purchase Option. Lessee shall have the option to purchase all of the Equipment listed in a Lease, at the following times and upon the following terms: (a) From and after the date specified in the related Schedule (the "Purchase Option Commencement Date"), on the Rental Payment dates specified in each Lease, upon not less than 30 days' prior written notice, and upon payment in full of the Rental Payments then due under such Lease plus the then applicable Purchase Price, which may include a prepayment premium on the unpaid balance as set forth in the applicable Schedule; or (b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee's notice to Lessor of its exercise of the purchase option (which shall be the earlier of the next Rental Payment date or 60 days after the casualty event) upon payment in full to Lessor of the Rental Payments then due under such Lease plus the then applicable Purchase Price; or (c) Upon the expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other amounts then owing under the Lease, and the payment of $1.00 to Lessor. After payment of the applicable Purchase Price, Lessee will own the related Equipment, and Lessor's security interests in and to such Equipment will be terminated. 13 ARTICLE XI Section 11.01. Assignment by Lessor, (a) Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under any and all of the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the consent of Lessee;provided, that any such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made in a manner that conforms to any applicable State law. Nothing in this Section 11.01 shall be construed, however, to prevent Lessor from executing any such assignment, transfer or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust; provided such certificates are sold only on a private placement basis (and not pursuant to any "public offering") to a purchaser(s) who represent that (i) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such purchaser understands neither the Lease nor certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Rule 144A, and (iv) it is the intention of such purchaser to acquire such certificates (A) for, investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933; provided further, that in any event, Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with respect to matters arising under a Lease with or to more than one individual or entity. (b) No assignment, transfer or conveyance permitted by this Section 11.01 shall be effective until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, trust certificates or partnership interests with respect to the Rental Payments payable under a Lease, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank or trust company as trustee or paying agent. During each Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees designated in such register. Lessee shall not have the right to and shall not assert against, any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor's security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Lease, but such option does not permit the assignment of less than all of Lessor's interests in the Equipment listed in a single Lease. (c) If Lessor notifies Lessee of its intent to assign the Lease, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially 14 in the form of Exhibit G attached to this Lease within five (5) business days after its receipt of such request. Section 11.02. Assignment and Subleasing by Lessee. None of Lessee's right, title, and interest in, to and under any Lease or any portion of the Equipment may be assigned or encum- bered by Lessee for any reason. ARTICLE XII Section 12.01. Events of Default Defined. Any of the following events shall constitute an "Event of Default" under a Lease: (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under any Lease at the time specified herein; (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, 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; (c) Any statement, representation or warranty made by Lessee in or pursuant to any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement for borrowing money or receiving credit under which Lessee may be obligated as borrower, if such default consists of (i) the failure to pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder and gives the holder of the indebtedness the right to accelerate the indebtedness; (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days. 15 Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating the Lease Term under such Lease, Lessor may enter the premises where the Equipment listed in such Lease is located and retake possession of such Equipment or require Lessee at Lessee's expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment listed therein that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies under such Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees), subject, however, to the provisions of Section 3.03. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities under any other Lease or the Equipment listed therein; and (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease or as a secured party in any or all of the Equipment subject to such Lease. Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under a Lease now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall not be necessary to give any notice other than such notice as may be required in this Article. Section 12.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attorney's fees), shall be applied as follows: (a) If such remedy is exercised solely with respect to a single Lease, Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such Equipment. 16 (b) If such remedy is exercised with respect to more than one Lease, Equipment listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro rata. ARTICLE XIII Section 13.01. Notices. All notices, certificates or other communications under any Lease shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained' by Lessee. Section 13.02. Release and Indemnification. To the extent permitted by law, but only from legally available funds, Lessee shall indemnify, protect, hold harmless, save and keep harmless Lessor from and against any and all liability, obligation, loss, claim, tax and damage whatsoever, regardless of cause thereof, and all expenses in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) the entering into of this Agreement or any Lease, (b) the ownership of any item of the Equipment, (c) the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Equip- ment, (d) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (e) the breach of any covenant in a Lease or any material misrepresentation contained in a Lease. The indemnification arising under this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under all Leases or the termination of the Lease Term under all Leases for any reason. Section 13.03. Binding Effect. Eacjh Lease shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section .13.04. Severability. In the event any provision of 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 13.05. Amendments, Changes and Modifications. This Agreement and each Lease may only be amended by Lessor and Lessee in writing. Section 13.06. Execution in Counterparts. This Agreement and each Lease 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. Section 13.07. Applicable Law. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. 17 Section 13.08. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement or any Lease. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written. LESSOR: Saulsbury Hill Financial, LLC 1614 15a' Street - 3rd Floor Denver, CO 80202-1304 Attention: David J. Clamage Telephone: (303) 629-8777 Fax No.: (303) 629-7689 By: .....r Name: David J: Title: Mana List of Exhibits Exhibit A -- Exhibit B-1 -- Exhibit B-2 -- Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G LESSEE: City of National City, California 1243 National City Boulevard National City, CA 91950-4397 Attention: Bill Yeomans Telephone: (619) 336-4331 FaxNo.: (619) 336-4349 By: Name: Title: (Seal) Attest: Nick Inzunza Mayor By: Name: Margarita Luna Title: Associate Accountant/Notary Public Acquisition Fund Agreement Schedule of Property Rental Payment Schedule Certificate Opinion of Counsel Form Essential Use/Source of Funds Certificate Acceptance Certificate Notice and Acknowledgement of Assignment 18 EXHIBIT A ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT This Acquisition Fund and Account Control Agreement (this "Agreement"), dated as of March 24, 2006, by and among Saulsbury Hill Financial, LLC, a Colorado limited liability company (hereinafter referred to as "Lessor"), City of National City, California, a political subdivision of the state of California (hereinafter referred to as "Lessee") and Bank of America, N.A., a national banking association (hereinafter referred to as "Acquisition Fund Custodian"). Reference is made to that certain Master Equipment Lease/Purchase Agreement dated as of March 24, 2006 between Lessor and Lessee (hereinafter referred to as the "Lease"), covering the acquisition and lease of certain Equipment described therein (the "Equipment"). It is a requirement of the Lease that the Equipment Cost of the Equipment (an amount not to exceed $98,995.38) be deposited into an escrow under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment. The parties agree as follows: 1. Creation of Acquisition Fund. (a) There is hereby created a special trust fund to be known as the "City of National City, California Acquisition Fund" (the "Acquisition Fund") to be held in trust by the Acquisition Fund Custodian for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. (b) The Acquisition Fund Custodian shall invest and reinvest moneys on deposit in the Acquisition Fund in Qualified Investments in accordance with written instructions received from Lessee. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Acquisition Fund Custodian for the reinvestment of any maturing investment. Accordingly, neither the A.cquisition Fund Custodian nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Acquisition Fund, and Lessee agrees to and does hereby release the Acquisition Fund Custodian and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the investment of the moneys on deposit in the Acquisition Fund shall be borne by the Acquisition Fund. For purposes of this agreement, "Qualified Investments" means any investments which meet the requirements of California (c) Unless the Acquisition Fund is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of written authorization(s) from Lessor, as is more fully described in Section 2 hereof. If the 190584v6 19 amounts in the Acquisition Fund are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Acquisition Fund after March 24, 2007 (the "Acquisition Period") shall be applied as provided in Section 4 hereof. (d) The Acquisition Fund shall be terminated at the earliest of (i) the final distribution of amounts in the Acquisition Fund or (ii) written notice given by Lessor of the occurrence of a default or termination of the .Lease due to non -appropriation. (e) The Acquisition Fund Custodian may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Acquisition Fund Custodian shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Acquisition Fund Custodian, and for the disposition of the same in accordance herewith. (f) Unless the Acquisition Fund Custodian is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Acquisition Fund Custodian and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Acquisition Fund Custodian under this agreement; and in connection therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian against any and all expenses; including reasonable attorneys' fees and the cost of defending any action, suit or proceeding or resisting any claim. (g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund Custodian shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Acquisition Fund Custodian may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Acquisition Fund Custodian shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. (i) Lessee shall reimburse the Acquisition Fund Custodian for all reasonable costs and expenses, including those of the Acquisition Fund Custodian's attorneys, agents and employees incurred for extra -ordinary administration of the Acquisition Fund and the performance of the Acquisition Fund Custodian's powers and duties hereunder in connection 190584v6 20 with any Event of Default under the Lease, or in connection with any dispute between Lessor and Lessee concerning the Acquisition Fund. 2. Acquisition of Property. (a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Acquisition Fund. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts. Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. (b) Authorized Acquisition Fund Disbursements. Disbursements from the Acquisition Fund shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Acquisition Fund shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Acquisition Fund there shall be filed with the Acquisition Fund Custodian a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. Each such requisition shall be signed by an authorized representative of Lessee (an "Authorized Representative") and by Lessor, and shall be subject to the following: 1. Delivery to Lessor of a certificate of Lessee to the effect that: (i) an obligation in the stated amount has been incurred by Lessee, and that the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid; (ii) the Authorized Representative has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made; (iii) such requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date of such certificate, entitled to retain; and (iv) the Equipment is insured in accordance with the Lease. 2. Delivery to Lessor of an Acceptance Certificate executed by Lessee, together with any Purchase Agreement Assignment or bill of sale and invoice therefor as required by Section 3.04 of the Lease; 3. The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment; 190584v6 21 4. There shall exist no Event of Default (nor any event which, with notice or lapse of time or both, would become an Event of Default); and 5. No material adverse change in Lessee' s or any guarantor' s financial condition shall have occurred since the date of the Lease. 3. Deposit to Acquisition Fund, Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Lease Proceeds to be deposited in the Acquisition Fund. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Acquisition Fund. 4. Excessive Acquisition Fund. Following the final disbursement from the Acquisition Fund at the end of the Acquisition Period, or termination of the Acquisition Fund as otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the Acquisition Fund to Lessor for application to amounts owed under the Lease in accordance with Section 4.07 of the Lease. 5. Security Interest. The Acquisition Fund Custodian and Lessee acknowledge and agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any part thereof, is converted to investments as set forth in this agreement, such investments shall be made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest. 6. Control of Acquisition Account. In order to perfect Lessor's security interest by means of control in (i) the Acquisition Fund established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Acquisition Fund, (iii) all of Lessee's rights in respect of the Acquisition Fund, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the "Collateral"), Lessor, Lessee and Acquisition Fund Custodian further agree as follows: (a) All terms used in this Section 6 which are defined in the Commercial Code of the state of California ("Commercial Code") but are not otherwise defined herein shall have the meanings assigned to such terms it the Commercial Code, as in effect on the date of this Agreement. (b) Acquisition Fund Custodian will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee. (c) Acquisition Fund Custodian hereby represents and warrants (a) that the records of Acquisition Fund Custodian show that Lessee is the sole owner of the Collateral, (b) that Acquisition Fund Custodian has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, 190584v6 22 other than Lessor's claim pursuant to this Agreement, and (c) that Acquisition Fund Custodian is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Acquisition Fund Custodian is obligated to accept from Lessor under this Agreement and entitlement orders that Acquisition Fund Custodian, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Acquisition Fund Custodian will not enter into any agreement by which Acquisition Fund Custodian agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Acquisition Fund Custodian shall promptly notify Lessor if any person requests Acquisition Fund Custodian to enter into any such agreement or otherwise asserts or seeks to assert a lien, encumbrance or adverse claim against any portion or all of the Collateral. (e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Acquisition Fund Custodian may allow Lessee to effect sales, trades, transfers and exchanges of Collateral within the Acquisition Fund, but will not, without the prior written consent of Lessor, allow Lessee to withdraw any Collateral from the Acquisition Fund. Acquisition Fund Custodian acknowledges that Lessor reserves the right, by delivery of written notice to Acquisition Fund Custodian, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Acquisition Fund. Further, Acquisition Fund Custodian hereby agrees to comply with any and all written instructions delivered by Lessor to Acquisition Fund Custodian (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor's claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter. (f) Lessee hereby irrevocably authorizes Acquisition Fund Custodian to comply with all instructions and entitlement orders delivered by Lessor to Acquisition Fund Custodian. (g) Acquisition Fund Custodian will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Acquisition Fund Custodian will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Acquisition Fund Custodian and Lessee hereby agree that any property held in the Acquisition Fund shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Acquisition Fund Custodian may be a party. (i) Acquisition Fund Custodian is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 7 below, concurrently with the sending thereof to Lessee, duplicate copies pf any and all monthly Acquisition Fund statements or reports issued or sent to Lessee with respect to the Acquisition Fund. 190584v6 23 7. Miscellaneous. Capitalized meanings assigned to them in the Lease. Th signed by all parties hereto. This agreement of which shall be deemed to be an original i an original and all of which together consti same instrument. Notices hereunder shall b duly given when personally delivered or wh or delivered to an express carrier, charg confirmation, addressed to each party at its a If to Lessor: If to Lessee: If to Acquisition Fund Custodian: Saulsbury Hi 1614 15 Str Denver, CO Attn: Contr Telephone: Fax: City of Nati 1243 Nation National Cit Attention: Telephone: Fax No.: Bank of Am 333 S. Hope Los Angeles Attn: Mary Telephone: Fax: erms not otherwise deemed herein shall have the s agreement may not be amended except in writing may be executed in one or more counterparts, each strument and each shall have the force and effect of te, and shall be deemed to constitute, one and the made in writing and shall be deemed to have been n deposited in the mail, first class postage prepaid, s prepaid, or sent by facsimile with electronic dress below: 1 Financial, LLC et — 3rd Floor 80202-1304 ct Administration 303) 629-8777 303) 629-7689 al City, California City Boulevard , CA 91950-4397 Bill Yeomans (619) 336-4331 619 336-4349 rica, N.A. Street CA 90071 orrijos (213) 621-7136 (213) 621-3607 190584v6 24 In Witness Whereof, the parties h.ve executed this Acquisition Fund and Account Control Agreement as of the date first above written. Saulsbury Hill Financial, LLC as Lessor By: ^" a Title: / Bank of America, N.A. As Acquisition Fund Custodian By: ✓ Title: City of National City, California, as Lessee By: Title: Mayor 190584v6 25 In Witness Whereof, the parties have executed this Acquisition Fund and Account Control Agreement as of the date first above written. Saulsbury Hill Financial, LLC City of National City, California, as Lessor as Lessee c By: By: •aLaal Title: Bank of America, As Acquisition Fund Custodian By: UC10-k- Title: A VI: Cf' P--eff thi 190584v6 25 Title: Mayor SC EDULE 1 FORM OF DISB RSEMENT REQUEST Re: Master Equipment Lease/Purchase greement dated as of March 24, 2006 by and between Saulsbury Hill Financial, LLC, as Lessor and the City of National City, California, as Lessee (the "Lease") In accordance with the terms of the Acquisiti a n Fund and Account Control Agreement, dated as of March 24, 2006 (the "Acquisition Fund . d Account Control Agreement") by and among Saulsbury Hill Financial, LLC ("Lessor"), C y of National City, California ("Lessee") and Bank of America, N.A., 333 S. Hope Street, Los geles, CA 90071 branch (the "Acquisition Fund Custodian"), the undersigned hereby request the Acquisition Fund Custodian pay the following persons the following amounts from the Acq isition Fund created under the Acquisition Fund and Account Control Agreement (the "Acquisition Fund") for the following purposes. Payee's Name and Address Invoice Number Dollar Amount Purpose Hawthorne Machinery, Inc. 1945 Camino San Bernardo San Diego, CA 92l 27-2499 $98,995.38 The undersigned hereby certifies as fellows: (i) An obligation in the stated . .unt has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund or costs relating to the Equipment identified in the Lease, and has not been paid. Attached ereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authori.ed Representative, has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or ' ischarged before such payment is made. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the d te hereof, entitled to retain. B-1-1 (iv) The Equipment is insured in accordance with the Lease. (v) No Event of Default, and no would become an Event of Default, under t hereof. event which with notice or lapse of time, or both, ie Lease has occurred and is continuing at the date (vi) The disbursement shall occ4r during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: 3 r f 0 6. CITY OF NATIONAL CITY, CALIFORNIA Disbursement of funds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized SAULSBURY HILL FINANCIAL, LLC as Lessor under the Lease By: Title: Managing M- .er By: 11!:gc - Authorized R presentative B-1-2 E IBIT B-1 SCHEDULE 0 PROPERTY No. 001 Re: Master Equipment Lease/Pur•hase Agreement, dated as of March 24, 2006, between Saulsbury Hill Financial, LLC, as Lessor, and City of National City, California, as essee 1. Defined Terms. All terms us d herein have the meanings ascribed to them in the above -referenced Master Equipment Lea e/Purchase Agreement (the "Master Equipment Lease"). 2. Equipment. The following i ems of Equipment are hereby included under this Schedule of the Master Equipment Lease. Quantity Description Serial or VIN No. Model No. Location 1 Each Caterpillar Wheel Loader #924G City of National City Public Works Department 2100 Hoover Ave. National City, CA 91950 3. Payment Schedule. (a) Rental Payments. payable on such dates as set forth in the Re Exhibit B-2. Rental Payments shall comme Schedule is accepted by Lessee, as indicat form of Exhibit F to the Master Equipme purchase the Equipment are deposited for whichever is earlier. e Rental Payments shall be in such amounts and tal Payment Schedule attached to this Schedule as ce on the date on which the Equipment listed in this d in an Acceptance Certificate substantially in the Lease or the date on which sufficient moneys to hat purpose with an Acquisition Fund Custodian, (b) Purchase Price Sche '. ule. The Purchase Price on each Rental Payment date for the Equipment listed in this Sche ule shall be the amount set forth for such Rental Payment date in the "Purchase Price" col of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and covenants that its representations, Equipment Lease are true and correct as th Payments on this Schedule. Lessee furthe change in Lessee's financial condition has Lease. nd Covenants. Lessee hereby represents, warrants arranties and covenants set forth in the Master ugh made on the date of commencement of Rental represents and warrants that no material adverse occurred since the date of the Master Equipment B-1-3 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $98,995.38, of which $0.00 is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. It is expected that by twelve (12) months from the date of this Schedule No. 001, Lessee will have taken possession of all items of Equipment shown above and that a Lessee's Acceptance Certificate, or Acceptance Certificates, will be signed by Lessee and delivered to Lessor on or before twelve (12) months from the date of this Schedule No. 001. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end at the conclusion of the 12th month following the date hereof. 8. Lease Term. The Lease Term shall consist of the Original Term and 10 consecutive Renewal Terms, with the final Term ending on March 24, 2016. 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is June 24, 2006. Dated: March 2t., 2006 Saulsbury Hill Financial, LLC 1614 15Street - 3rd Floor Denver, CO 80202-1304 Attention: David J. Clamage Fax No.: 303-629-7689 By:`-.. . Name: Title: City of National City, California 1243 National City Boulevard National City, CA 91950-4397 Attention: Bill Yeomans FaxNo.: (619) 336-4349 By: ame: Nick Inzunza itle: Ma or (Seal) Attest: By: Name: Title: Associate Accoutant/Notary Public Gan llon • 1641272 16046. hf11e - CaMooria fen OigN cc Margarita Luna Counterpart No. 2- of 2- manually executed and serially numbered counterparts. To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1. B-1-4 Exhibit B-2 Rental Payment Schedu e Date Pa ment Interest Prin 1 6/24/2006 3,077.02 1,096.62 1,98 2 9/24/2006 3,077.02 1,074.68 2,00 3 12/24/2006 3,077.02 1,052.50 2,02 2006 Totals 9,231.06 3,223.80 6,00 1 Purchase al Price* .40 99,925.43 .34 97,863.02 .52 95,777.76 .26 4 3/24/2007 3,077.02 1,030.08 2,04•.94 93,669.42 5 6/24/2007 3,077.02 1,007.40 2,06s.62 91,537.71 6 9/24/2007 3,077.02 984.47 2,09e.55 89,382.38 7 12/24/2007 3,077.02 961.29 2,11..73 87,203.18 2007 Totals 12,308.08 3,983.24 8,32 .84 8 3/24/2008 3,077.02 937.86 2,1 9.16 84,999.84 9 6/24/2008 3,077.02 914.16 2,1:2.86 82,772.10 10 9/24/2008 3,077.02 890.20 2,1:6.82 80,519.67 11 12/24/2008 3,077.02 865.98 2,211.04 78,242.30 2008 Totals 12,308.08 3,608.20 8,6.9.88 12 3/24/2009 3,077.02 841.48 2,2 5.54 75,939.70 13 6/24/2009 3,077.02 816.72 2,2:0.30 73,611.59 14 9/24/2009 3,077.02 791.68 2,2:5.34 71,257.69 15 12/24/2009 3,077.02 766.37 2,3 0.65 68,877.72 2009 Totals 12,308.08 3,216.25 9,01.83 16 3/24/2010 3,077.02 740.77 2,3 6.25 66,471.38 17 6/24/2010 3,077.02 714.89 2,3 2.13 64,038.39 18 9/24/2010 3,077.02 688.72 2,3 8.30 61,578.44 19 12/24/2010 3,077.02 662.27 2,4 4.75 59,091.24 2010 Totals 12,308.08 2,806.65 9,5111.43 20 3/24/2011 3,077.02 635.52 2,4 1.50 56,576.50 21 6/24/2011 3,077.02 608.47 2,4.8.55 54,033.89 22 9/24/2011 3,077.02 581.13 2,4s5.89 51,463.13 23 12/24/2011 3,077.02 553.48 2,5'3.54 48,863.88 2011 Totals 12,308.08 2,378.60 9,9'9.48 24 3/24/2012 3,077.02 525.52 2,5 25 6/24/2012 3,077.02 497.26 2,5 26 9/24/2012 3,077.02 468.68 2,6 27 12/24/2012 3,077.02 439.79 2,6 2012 Totals 12,308.08 1,931.25 10,3 1 1.50 46,235.83 9.76 43,578.68 8.34 40, 892.09 7.23 38,175.74 6.83 28 3/24/2013 3,077.02 410.57 2,6.6.45 35,429.30 29 6/24/2013 3,077.02 381.04 2,6.5.98 32,652.44 30 9/24/2013 3,077.02 351.17 2,7+5.85 29,844.82 31 12/24/2013 3,077.02 320.98 2, 56.04 27,006.10 2013 Totals 12, 308.08 1,463.76 10, :44.32 32 3/24/2014 3,077.02 290.45 2, 86.57 24,135.93 33 6/24/2014 3,077.02 259.58 2, :17.44 21,233.97 34 9/24/2014 3,077.02 228.37 2,:48.65 18,299.86 35 12/24/2014 3,077.02 196.81 2, : 80.21 15, 333.24 2014 Totals 12,308.08 975.21 11, 32.87 B-2-1 Purchase Date Payment Interest Principal Price* 36 3/24/2015 3,077.02 164.91 2, 912.11 12, 333.77 37 6/24/2015 3,077.02 132.65 2,944.37 9,301.06 38 9/24/2015 3,077.02 100.03 2,976.99 6,234.77 39 12/24/2015 3,077.02 67.05 3,009.97 3,134.50 2015 Totals 12,308.08 464.64 11,843.44 40 3/24/2016 3,077.02 33.82 3,043.20 1.00 2016 Totals 3,077.02 33.82 3,043.20 Grand Totals 123,080.80 24,085.42 98,995.38 Prepayment Premium for purposes of Section 10.01(a) is 3.00%. For purposes of this Lease, "Taxable Rate," with respect to the interest component of Rental Payments, means an annual rate of interest equal to (0.9114%. *Purchase Price is after current payment has been made. Lessee: City of National City, Californi- By: Name: Title: Nick Inzunza Mayor B-2-2 C The undersigned, a duly elected California ("Lessee") certifies as follows: A. The following listed persons "Officials ") in the capacity set forth opposit signatures are true and correct as of the date B. The Officials are duly autho deliver the Master Equipment Lease/Purch Schedule(s) thereunder and all future Sche and Saulsbury Hill Financial, LLC, an Agreements of Lessee, enforceable in all res Name of Official Nick Inzunza William "Bill" Yeomans Dated: XHIBIT C RTIFICATE d acting Secretary of the City of National City, are duly elected and acting officials of Lessee (the their respective names below and that the facsimile ereof; 'zed, on behalf of Lessee, to negotiate, execute and se Agreement dated as of March 24, 2006 and the ule(s) (the "Agreements") by and between Lessee these Agreements are binding and authorized ects in accordance with their terms. Title Mayor .f the City of 'Nation:1 City Interim Finance Directo The signer of this Certificate cannot be liste By: Name: Title: .ze.Lit 114 Michael Dalla City Clark above as authorized to execute the Agreements. c-1 EXHIBIT D OPINION OF COUNSEL TO LESSEE Saulsbur' Hill Financial, LLC 1614 15 Street — 3`1Floor Denver, CO 80202-1304 Re: Schedule of Property No. 001, dated March 24, 2006, to Master Equipment Lease/Purchase Agreement, dated as of March 24, 2006, between Saulsbury Hill Financial, LLC, as Lessor, and City of National City, Califomia, as Lessee Ladies and Gentlemen: As legal counsel to City of National City, California ("Lessee"), I have examined (a) an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of March 24, 2006, and Exhibits thereto by and between Saulsbury Hill Financial, LLC ("Lessor") and Lessee (the "Agreement") and an executed counterpart of Schedule of Property No. 001, dated March 24, 2006, by and between Lessor and Lessee (the "Schedule"), which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment"), and a certain Acquisition Fund Agreement among Lessor, Lessee, and Bank of America, N.A., a national banking association as Acquisition Fund Custodian, dated March 24, 2006, (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease", and the Lease and the Acquisition Fund Agreement are referred to collectively as the "Transaction Documents." Based on the foregoing, I am of the following opinions: 1. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and is a political subdivision of a state within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the "Code") and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code. 2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Lease. 3. The Lease has been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are valid and binding obligations of Lessee enforceable in accordance with their respective terms. D-1 4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, public bidding laws and all other applicable state or federal laws; and 5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment or other collateral thereunder. All capitalized terms herein shall have the same meanings as in the Transaction Documents unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled to rely on this opinion. Printed Name: George H. Eiser, TTT Signature: 17 Firm: City of National City Dated: 3 -2c - D( Address: 1243 National City Boulevard National City, CA 91950 TelephoneNo.: (619) 396-4790 D-2 E ESSENTIAL USE/SOU Saulsbury Hill Financial, LLC 1614 15 Street — 3rd Floor Denver, CO 80202-1304 Re: Master Equipment Lease/Pur 2006, between Saulsbury Hill California ( "Lessee ") and Sc 2006 This certificate confirms and aff referenced above is essential to the functio citizens. Further, Lessee has an immediat substantially all such Equipment, which ne foreseeable future. Such Equipment will be one or more of Lessee's governmental or p scope of its authority. Lessee expects and anticipates adeq rent due after the current budgetary period. IBIT E CE OF FUNDS CERTIFICATE hase Agreement dated as of March 24, Financial, LLC, and City of National City, edule of Property No. 001 dated March 24, s that the Equipment described in the Agreement s of Lessee or to the services Lessee provides its need for, and expects to make immediate use of, d is not temporary or expected to diminish in the used by Lessee only for the purpose of performing oprietary functions consistent with the permissible to funds to be available for all future payments or Signature: Name: William "Bill" Yeomans Title: Interim Finance Director E-1 E:BIBIT F ACCEPTANCE CERTIFICATE Saulsbury Hill Financial, LLC 1614 15 Street— 3rd Floor Denver, CO 80202-1304 Re: Schedule of Property No. 001, dated March 24, 2006, to Master Equipment Lease/Purchase Agreement, dated as of March 24, 2006, between Saulsbury Hill Financial, LLC, as Lessor, and City of National City, California, as Lessee Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: 1. All of the Equipment (as such term is defined in the Agreement) listed in the above -referenced Schedule of Property (the "Schedule ") has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: (Seal) LESSEE: City of National City, California By: Name: William "Bill" Yeomans Title: Interim Finance Director F-1 E FORM OF NOTICE AND AC DATED Saulsbury Hill Financial, LLC ("Ass sold to Banc of America Leasing & Capital, interest in, to and under Schedule of Prope the Master Equipment Lease/Purchase Agre 2006, between Assignor and the City of Nati For purposes of this Notice "Acknowledgment"), "Lease" means collec exhibits, schedules, addenda and attachme documents delivered in connection therewi Schedules of Property entered into under th respect to the Schedule of Property identifie herein has the meaning set forth in the Maste 1. Lessee hereby acknowledge absolutely and unconditionally agrees to amounts coming due under the Lease in acc of this Acknowledgment. ISIT G OWLEDGMENT OF ASSIGNMENT ARCH 24, 2006 gnor") hereby gives notice that it has assigned and LC, ("Assignee ") all of Assignor's right, title and y No. 001, dated March 24, 2006 (the "Lease") to ment ("Equipment Lease") dated as of March 24, nal City, California ("Lessee"). and Acknowledgment of Assignment (the ively the Lease identified above, together with all is related thereto, and all certifications and other . The term "Lease" specifically excludes all other Master Lease and rental payments other than with above. Each capitalized term used but not defined Lease described above. the effect of the assignment of the Lease and eliver to Assignee all rental payments and other rdance with the terms thereof on and after the date 2. Lessee hereby agrees that: (iAssignee shall have all the rights of Lessor under the Lease and all related documents, includ. g, but not limited to, the rights to issue or receive all notices and reports, to give all consents or a eements to modifications thereto, to receive title to the equipment in accordance with the terms •f the Lease, to declare a default and to exercise all remedies thereunder; and (ii) except as prov ded in Section 3.03 of the Lease, the obligations of Lessee to make rental payments and to perf•rm and observe the other covenants and agreements contained in the Lease shall be absolute d unconditional in all events without abatement, diminution, deduction, set-off or defense. 3. Lessee agrees that, as of e date of this Acknowledgment, the following information about the Lease is true, accurate . d complete: Number of Rental Payments ' emaining — Amount of Each Rental Paymnnt Total Amount of Rents Rem. 'ng Frequency of Rental Payment Next Rental Payment Due Funds Remaining in Acquisi •n Fund — 40 $3,077.02 $123,080.80 Quarterly June 24, 2006 $98,995.38 G-1 4. The Lease remains in full force and effect, has not been amended and no nonappropriation or event of default (or event which with the passage of time or the giving of notice or both would constitute a default) has occurred thereunder. 5. Any inquiries of Lessee related to the Lease and any requests for escrow disbursements, if applicable, and all rental payments and other amounts coming due pursuant to the Lease on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee): Banc of America Leasing & Capital, LLC 555 California Street, 4th Floor Mail Code: CA5-705-04-01 San Francisco, CA 94104 Attention: Contract Administration ACKNOWLEDGED AND AGREED: LESSEE: City of National City, California By: Name: William "BillnvYanmans Title: Interim Finance Director ASSIGNOR: Saulsbury Hill Financial, LLC By: Name: Title: i o °%'r/i'&/ 04 ASSIGNEE: Banc of America Leasing & Capital, LLC By: Name: Title: Laura Pritchett .Assistant Vice Pros dent G-2 MEMORANDUM OF INSURANCE ISSUE DATE 3/22/2006 DRIVER ALLIANT INSURANCE SERVICES, INC. P.O. BOX 6450 NEW PORT BEACH, CA 92658-6450 (949) 756-0271 THIS MEMORANDUM IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE MEMORANDUM HOLDER. THIS MEMORANDUM DOES NOT AMEND, EXTEND, OR ALTER THE COVERAGE SHOWN BELOW. * SAN DIEGO POOLED INSURANCE COVERAGE AFFORDED BY INSURED PROGRAM AUTHORITY AND MEMBER AGENCY OF: LETTER A: INDIVIDUAL CITY'S SELF -INSURED RETENTION CITY OF NATIONAL CITY NATIONAL CITY JOINT POWERS FINANCING AUTHORITY 1243 NATIONAL CITY BLVD. LETTER B: "San Diego Pooled Insurance Program Authority, A Public Agency." NATIONAL CITY, CA 91950 * MEMBER AGENCY OF THE SAN DIEGO POOLED INSURANCE PROGRAM AUTHORITY COVERAGE PER CA. GOVERNMENT CODE SECTION 990.4(a), 990.8(c) THIS IS TO CERTIFY THAT A MEMORANDUM OF INSURANCE NAMED ABOVE AS AUTHORIZED BY CALIFORNIA GOVERNMENT THE PERIOD INDICATED NOTWITHSTANDING ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT MAY PERTAIN. THE COVERAGE AFFORDED BY THE TERMS, EXCLUSIONS, AND CONDITIONS OF THE SUCH BELOW HAS BEEN ENTERED INTO BY INSURED CODE SECTION 990.4(a) AND 990.8(c) FOR REQUIREMENT, TERM OR CONDITION OF ANY TO WHICH THIS MEMORANDUM MAY BE ISSUED OR CONTRACT DESCRIBED HERE IS SUBJECT TO ALL THE CONTRACT, LTR TYPE OF COVERAGE MEMORANDUM NUMBER MEMORANDUM EFFECTIVE DATE MEMORANDUM EXPIRATION DATE LIABILITY LIMITS IN THOUSANDS EACH OCCURRENCE AGGREGATE A GENERAL AND AUTOMOBILE LIABILITY SELF INSURED 07/01/05 07/01/06 BI 8 PD COMBINED 150, N/A PERSONAL INJURY INCL. B EXCESS LIABILITY* * SDC 0020 07/0 /05 07/01/06 BI&PD COMBINED 1,850, * * THE ABOVE NOTED MEMORANDUM OF INSUR CE IS A CLAIMS -MADE CONTRACT DESCRIPTION OF OPERATIONS / LOCATIONS / VEH CLES / SPECIAL ITEMS AGREEMENT WITH SAULSBURY HILL FINANCIAL FOR LEASE FI LOADER FOR THE PUBLIC WORKS DEPARTMENT. SUBJECT TO POLICY TERMS, ANCING FOR THE PURCHASE OF A CATERPILLAR 924G WHEEL CONDITIONS AND EXCLUSIONS Al MEMORANDUM HOLDER CANCELLATION SAULSBURY HILL FINANCIAL STREET DENENVERER, CO 80202-1304\ SHOULD ANY OF THE ABOVE DESCRIBED CONTRACTS BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF. THE AUTHORITY WILL ENDEAVOR TO MAIL 30 DAYS' WRITTEN NOTICE TO THE HOLDER NAMED HEREON BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE AUTHORITY, OR ITS REPRESENTATIVES. EXCEPT 10 DAYS FOR NON-PAYMENT OF PREMIUM. AUTHORIZED SIGNATURE st:49-1A1 C A i—A 4Nbo1,GroupSW PUNI1Saodplpa'Sd-babilily,Sd-Liab•cer,_Sdhiab-pri.doc Endorsement Per Contract Effective 7/1/05 Contract Number SDC 0020 ADDITIONAL INSURED ENDORSEMENT In consideration of the payment of premium, it .s agreed for claims occurring and reported after 7/1/98, that the following amendments / additi s ns apply: 1. Section III — Persons and/or Entities organization(s) when required in a w only for Personal Injury or Property Covered, is amended to include any person(s) or itten contract or agreement to provide coverage but amage liability which: a. is covered by this Memorandu of Insurance; and b. arises out of: 1. the normal course of the 2. ownership, maintenance to or leased to and occu 3. work performed for that or 4. that Covered Party's fi 5. the maintenance, operati equipment or Automobi 2. The limits of coverage afforded to such a. the minimum limits of coverage provide; or b. the limits of coverage of this Me Named Covered Party's operations; or or use of that part of the premises or land rented ied by, the Named Covered Party; or Covered Party by the Named Covered Party; ancial control of the Named Covered Party; or n or Use by the Named Covered Party of any e leased to you by such person(s) or Organization(s). erson(s) or organization(s) will be: hich the Named Covered Party agreed to orandum of Insurance, whichever is less. 3. Coverage provided under this Endorsem•nt may be primary over any applicable insurance, and the Authority may provid a notice of cancellation if requested. 4. Coverage provided under this Endorse nt expires: a. when the written contract or agre ment ceases; or b. when the Named Covered Part ceases to be a tenant in the premises. Attached to and forming part of Contrac number SDC 0020 of the San Diego Pooled Insurance Program Authority Memorandu of Insurance. Dated at: Newport Beach this 22 day of March � , 2006. By: Authorized Representative GJPLNII'.SANDPIPASS D-1.1M31I.J -VS1,1 I. B-C.EK,SU PCX)i. AI-END.DOC }a yl`r"5y4.: 'sip; {Z#- f 4 r _ 'y t't!Y, ram. ]" rh �l"V n. 5S^r •. . tr rr m t t rr .F,..Jr.a .`.?�'v.r,,ra, .. t' ..�.,..t -ir { ":r r. C 'r } Yr 'C�: `'." e' ♦ 'lY - .tr." ,. rr .*; a 'n + -' ISSUE DATE (MM,'OD/YYI `' d . V 6 r{ } } r { i`"t sr rt+' 03/22/06 ., i4 ik r �1 a• + ssth �` rr.rtn ;}:..,..:.? THIS IS EVIDENCE THAT INSURANCE AS IDE CONVEYS ALL THE RIGHTS AND PRIVILEGES TIFIED BELOW HAS BEEN ISSUED, IS IN FORCE, AND ° FFORDED UNDER THE POLICY. PRODUCER DRIVER ALLIANT INSURANCE SERVICES, INC. P.O. BOX 6450 NEWPORT BEACH, CA 92658-6450 PHONE (949) 756-0271 / FAX (949)756-2713 ,goDE ------._- __—_. -._.-_.._-...-.._sae&gDE INSURED PUBLIC ENTITY PROPERTY INSURANCE PROGRAM SAN DIEGO POOLED INSURANCE PROGRAM AUTHORITY (SANDPIPA) INCLUDING MEMBER: CITY OF NATIONAL CITY 1243 NATIONAL CITY BLVD. NATIONAL CITY, CA 91950 ; ! I 1 1 I i i COMPANY VARIOUS PER SEE ATTACHED SCHEDULE 3 LOAN NUMBER i POLICY NUMBER j VARIOUS EFFECTIVE DATE (MM/OD/YY) 07/01/05 THIS REPLACES PRIOR EVIDENCE EXPIRATION DATE IMM/DO/YY) i CONT, I TERMINATED 07/01/06 ; IF j UMIL CHECKED I DATED: 6B`!- pit!-�aRt u t . S.t•' i rKy�t�.• iii• _..T Yw i.` `�+si}.l >�`.{}i v '.F..:,f/iL.Y i" LOCATION /DESCRIPTION LOCATI v .DST AS RESPECTS: AGREEMENT WITH SAULSBURY HILL FINANCIAL FOR LE • WHEEL LOADER FOR THE PUBLIC WORKS DEPARTMENT } �y�'�+` `r {1 {. '"f,*S�jw', rt �Jls {'��.}[`,[,,i�r t}ram+ fp Z vL T' . MNMOMEY�E,4a� '�a. X '"l., i' .rF. '(nr,A�:y �I COVERAGE I PERILS! FORMS ALL RISKS OF DIRECT PHYSICAL LOSS OR DAMAGE. COVE' PERSONAL PROPERTY, RENTAL INCOME INCLUDING BOND BUSINESS INTERRUPTION, EXTRA EXPENSE AND ALL EXTE SHOWN ON MANUSCRIPT POLICY FORM. REPAIR OR REPLACEMENT COST VALUATION. 'EARTHQUAKE COVERAGE APPLIES ONLY IF COVERAGE IS ELECTED PER SCHEDULE. SUBJECT TO POLICY TERMS, CONDITIONS AND EXCLUSION `,f.{ {1''t '', :.•;S'x hrj` X 4 d s{.}'� N;.Lfyfi.'i:4 "" SE FINANCING FOR THE PURCHASE VALUE $120,672. /. } ^. y-e`Sr r �ti'+_a{. "ciC^'Y�f�Y'++'. f l li'X V' '5,, R<� %{. • GE INCLUDES REAL AND EVENUE REQUIREMENTS, SIONS OF COVERAGE AS NSURED'S PROPERTY •. d.�•f.V rr f.l. r, my,trjf itt�.{ IC {}i�, rr, {'iv4+.+.•fi OF A CATERPILLAR i{�{� r" rV.�r r �•R F 11 "P .i.SA+ ' 4A4ti 1 AMOUNT OF INSURANCE $1,000,000,000 LOSS LIMIT PER OCCURRENCE *$30,000,000 EARTHQUAKE &FLOOD DEDICATEE) LIMITS PER OCCURRENCE & SEPARATE ANNUAL AGGREGATES FOR ALL SANDPIPA MEMBERS. $100,000,000 BOILER & MACHINERY uj .wn }. 924G ,:cssa f n. ' DEDUCTIBLE ; SEE BELOW C,•'ksv.I � �. . _ l,TMg F{ DEDUCTIBLES:` ALL RISK "BASIC": $5,000 PER OCCURRENCE AUTO COMPREHENSIVE: $5,000 PER OCCURRENCE AUTO COLLISION: $5,000 PER OCCURRENCE FLOOD: $100,000 PER OCCURRENC $250,000 PER OCCURRENC EARTHQUAKE: 5% OF REPLACEMENT COS $100,000 MINIMUM PER OC 1940, AND ALL BUILDINGS I BOILER & MACHINERY: $10,000 — HIGHER DEDUCTIBL `' .R,..,V. yy ' '",':t': h.4..n1`aYl r r .•. 4{r�.y.''.. r.i r. EXCEPT FLOOD ZONES A&V; IN FLOOD ZONES A&V PER UNIT OF INSURANCE AT TIME OF LOSS, SUBJECT TO A URRENCE, EXCEPT 10% FOR THOSE STRUCTURES BUILT PRIOR TO ESIGNATED AS HISTORICAL BUILDINGS APPLIES BASED ON SPECIFIC OBJECT/SIZE/PERIL �I }M f,�a. �A ry_sr g.,) :i si '-Yxr. a •Y.�: z?y 1 rt��a1'it'k�:x.f4}.(,{?{{I.�.$•f.:`t'��:?NX. THE POLICY IS SUBJECT TOTHEPREMIUMS, FORMS, AND BE TERMINATED, THE COMPANY WILL GIVE THE ADDITION WILL SEND NOTIFICATION OF ANY CHANGES TO THE POLIC POLICY PROVISIONS OR AS REQUIRED�-BY LAW. *EXCEPT 10 4 3 y y'�.� sy,, �}}�ro'l�I:l�l�r`i�"r�A'xr:Kf,'�5..}Lv�.S.{. ULES IN EFFECT FOR EACH POLICY INTEREST IDENTIFIED BELOW THAT WOULD AFFECT THAT INTEREST, DAYS FOR NON-PAYMENTl_/OF �e �� r'a�dbd�X,�f✓r',rrx}J:.G!.�?{'.T�C}A}'rr PERIOD. SHOULD THE 30 DAYS* WRITTEN NOTICE, en.xir:.�l{ rr{}:i?Y' POLICY AND THE IN ACCORDANCE WITH PREMIUM. dill h11Xt4Hp .)F..* :'hl:�l}:•44. dT ;• 1':r .:{ ,, :}l t::' .t i2?: NAME AND AND ADDRESS SAULSBURY HILL FINANCIAL 1614 15TH STREET DENVER, CO 80202-1304 "J Syr rr'1r,,,5 ;tw', v }•' r'•}• •}"�--_-----' 4'rs: r>�• "n .r•l _ ZO, ��yi�'1***-.S``' �.1' rv5i2> �4 ,•`iMS iJ:'" :::.:, t•}:lJ :4:i NATURE OF INTEREST MORTGAGEE j ADDITIONAL INSURED , j ----------- � ; LOSS PA?fE? (OTHER) SIGNATURE OF AUTHQitIZE[I fiGENF OF COMPANY i a ! ,NboiVGroupsDPUnit\Sandpip dSd-PropertyS,J.Prop-cert_Sd-Prop-pri.doc S.F. FORM LENDER'S LOSS P- YABLE ENDORSEMENT Fornr 438BFLI NS (Rev. May 1, 1942) X 1. Loss or damage, if any, under this policy, shall he paid to t e Payee named on the first page of this policy, its successors and assigns, hereinafter referred to as "the Lender', in whatever form or apacity its interests may appear and whether said interest be vested in said Lender in its individual or in its disclosed or undisclosed fi iuciary or representative capacity, or otherwise, or vested in a nominee or trustee of said Lender. 2. The insurance under this policy, or any rider or endorsemen attached thereto, as to the interest only of the Lender, its successors and assigns, shall not be invalidated nor suspended: (a) by any err, omission, or change respecting the ownership, description, possession, or location of the subject of the insurance or the interest therein, .r the title thereto; (b) by the commencement of foreclosure proceedings or the giving of notice of sale of any of the property covered b, this policy by virtue of any mortgage or trust deed; (e) by any breach of warranty, act, omission, neglect, or non-compliance with any .f the provisions of this policy, including any and all riders now or hereafter attached thereto, by the named insured, the borrower, n o, tgag f r, trustor, vendee, owner, tenant, warehouseman, custodian, occupant, or by the agents of either or any of them or by the happening of a y event permitted by them or either of them, or their agents, or which they failed to prevent, whether occurring before or after the attach ent of this endorsement. or whether before or after a loss, which under the provisions of this policy of insurance or of any rider or endo :ement attached thereto would invalidate or suspend the insurance as to the named insured; excluding herefrom, however, any acts or omissions of the Lender while exercising active control and management of the property. 3. In the event of failure of the insured to pay any premium or additional premium which shall be or become due under the terms of this policy or on account of any change in occupancy or increase in hazard not permitted by this policy, this Company agrees to give written notice to the Lender of such non-payment of premium after si ty (60) days from and within one hundred and twenty (120) days after due date of such premium and it is a condition of the continuanc of the rights of the Lender hereunder that the Lender when so notified in writing by this Company of the failure of the insured to pay s ch premium shall pay or cause to be paid the premium due within ten (10) days following receipt of the Company's demand in writin_ therefor. If the Lender shall decline to pay said premium or additional premium, the rights of the Lender under this Lender's Loss Pa ble Endorscumnt shall not be terminated before ten (10) days after receipt of said written notice by the Lender. 4. Whenever this Company shall pay to the Lender any sum fo loss or damage under this policy and shall claim that as to the insured no liability therefor exists, this Company, at its option, may pay t the Lender the whole principal sum and interest and other indebtedness due or to become due from the insured, whether secured or unsecu ed, (with refund of all interest not accrued), and this Company, to the extent of such payment, shall thereupon receive a full assignment antransfer, without recourse, of the debt and all rights and securities held as collateral thereto. 5. If there be any other insurance upon the within described property, this Company shall be liable under this policy as to the Lender for the proportion of such loss or damage that the sum hereby insur.d bears to the entire insurance of similar character on said property under policies held by, payable to and expressly consented to by thr Lender. Any Contribution Clause included in any Fallen Building Clause Waiver or any Extended Coverage Endorsement attached to thicontract of insurance is hereby nullified, and also any Contribution Clause in any other endorsement or rider attached to this contract of i surance is hereby nullified except Contribution Clauses for the compliance with which the insured has received reduction in the rate char: d or has received extension of the coverage to include hazards other than fire and compliance with such Contribution Clause is made a .art of the consideration for insuring such other hazards. The Lender upon the payment to it of the full amount of its claim, will subrogate this Company (pro rata with all other insurers contributing to said payment) to all of the Lender's rights of contribution under said other ins ranee. 6. This Company reserves the right to cancel this policy at any t me, as provided by its terms, but in such case this policy shall continue in force for the benefit of the Lender for ten (10) days after writte notice of such cancellation is received by the Lender and shall then cease. 7. This policy shall remain in full force and effect as to the inte st of the Lender for a period of ten (10) days alter its expiration unless an acceptable policy in renewal thereof with loss thereunder paya le to the Lender in accordance with the terms dads Lender's Loss Payable Endorsement, shall have been issued by some insurance compa y and accepted by the Lender. 8. Should legal title to and beneficial ownership of any of the papery covered under this policy become vested in the Lender or its agents, insurance under this policy shalt continue for the term thereof .r the benefit of the Lender but, in such event, any privileges granted by this Lender's Loss Payable Endorsement which are not also granted the insured under the terms and conditions of this policy and/or under other riders or endorsements attached thereto shall not apply to the in.urancc hereunder as respects such property. 9. All notices herein provided to be give by the Company to t e Lender in connection with this policy and this Lender's Loss Payable Endorsement shall be mailed to or delivered to the Lender at its office or branch described on the first page of the policy. Approved: Board of Fire Underwriters of the Pacific, California Bankers' Association Committee on insurance. '-:.tilu)`Cin>uµsUPl niC..Sandpipa'Sd-Propenp'Sd-Prop-eee+, 4tanfi, .L.P. dnr, driver•alhant INSURANCE SERVICES PUBLIC ENTITY PROPERTY INSURANCE PROGRAM (PEPIP) JULY 1, 200 TO JULY 1, 2006 SC DULE #3 INSURAN E COMPANIES •; t - - 3' h ^. ra ifr'� - s4� t` J'- `,^J �. • `` ^. .r Y '''F>t by Ju,% t w r is 1 { t; rr r " i r r t tH!y.t tSS,H.Ht vhtjrx, y`i1 1F �.r: Y,J} _J;x ks�J%.-���G3J�i.Y�:�4�>}?;�"�,YS'��i_ +.�_ ..t�'':..t .' ;r}+.: R 4 1y "`4`.r'F ..c 1r „�, �t.�c.>.e.'nti :..� t ?. ,e S��'+�'^' t • ry R. fi,h5 :. +YJ✓.. ti; Primary $10,000,000 "All Risk" Including Earthquake and Flood, Including CA Earthquake Lexington Insurance Company 100% $ 10,000,000 RKS105900603 r$ f ti R'l V ".—''''''` { i ' try i:�`jY' {' . }; ,[ JJJ.✓, rf• f�.1„ �YJ� ��, � ... �� 5 1 JJtS 1.^ J' �. .. ,. h " 0 'J .. ft 1 rt yY.rl'.t' y 1 '`.rn5'r,": C.:? „1.. .��� s.}Jf{ 'a R�.J1Y}�_x�{rt}4 .S•�{i�`,� $30,000,000 x/s $10,000,000 "All Risk" Including Earthquake and Flood, Including CA Earthquake Allied World Assurance Co -Section A 27 .5% $ 8,250,000 RKS 105900603 rp -S J Jf r ..nrrsa'. :.s $40,000,000 x/s $10,000,000 "All Risk" Including Earthquake and Flood, Including CA Earthquake AXIS -Section A 6% $ 2,400,000 RKS105900603 Lloyds of London-Section'i A 16.5% $ 6,600,000 RKS 105900603 Y.T 1 . - ;?C: ''la J •'jj.%frr:aii;; f'l }N.•J}W: "1"'":!... S ''5:....r J. J''"r3.±! fJ_ >,e>�.,, ✓.,eti?F ��yp4xk.i. .: r r Y ,h J J 1 ,.: :,{ r �'J r J : ,;-....r, �. �'.."r,.��.� tX tY. r.....L`i�,.. `�.. :..... r. r� ..,r..s 4v r:.r. S10.000.000 xis $40.000,000 "All Risk" Including Earthquake and Flood, Including CA Earthquake Allied World Assurance Co -Section A 15% $ 1,500,000 RKS105900603 r rJ::-. ' yAnt''' JJ ryM1t sr . r ri H rH J'_'... x _ J}:%}.'%.' rJ. � ....._.e.. -..._....•._ n�., .i.�, .C#.:..., '._ :�'Q,. l..,; v r J..., .., _.,.J., �-'r '..J �.'.�'.'_'. =$�{ $85.000,000 x/s $40,000.000 "All Risk" Including Earthquake and Flood, Including CA Earthquake Sublimited to $125M Great Lakes (Certain) -Section B 12.5% $ 10,625,000 RKS 105900603 K r!{'":': M,rr! J `5J1fJ yYsF.1y.r f r_n.i. ±'t:. - J.r..nl 1. T{�J4 61't ��> .I..'.{ •'Jp' J 11F�M��'u j l Ht 'J 'Y 'y��yf ���y�y**,�,� ~' a iJitvi>}^r4-ttJJ`- \1i'tirrr �rle:. J_J. ���'kr �r;�, e�tl i���'n t.11t,'..�-rJ..4 nit.iyA. $75,000,000 x/s $50,000,000 "All Risk" Including Earthquake and Flood,Including CA Earthquake Sublimited to $125M AXIS -Section B 6% $ 4,500,000 RKS105900603 Lloyds of London -Section B 3: .5% $ 23,625,000 RK S105900603 r ♦ JJ JJr�J y I jJ�' 1M1 '� rJr "Y .rr rr r r } .. �'-'JJ:; w. Jl 1'4T r ,. r ' x r JJ�- :1: y ,' 4. t rr , r: e '+ ,. e -•• .;}���y� ry , rr. . r.l 1..' J }Stir .. � .. � $...+ . r J.. ?. �.. S90.000,000 x/s $10,000,000 "All Risk" Including Earthquake and Flood, including CA Earthquake Sublimited to $25M Commonwealth Insurance Company 20% $ 18,000,000 US5738 AXIS Specialty Insurance Corp. 12% $ 10,800,000 EAF71598701 Essex Insurance Corp. 10% $ 9,000,000 EPEP10049 Arch Insurance a% $ 7,200,000 ESP000834700 :l/. SrJ r}..l,t ..-.. .. J. 44. ... > ♦...,.t . Ri rv.`,.'�%• .-..yam � �. .. '' ''JJ..... fn.,: ,... $125,000,000 x/s $125,000,000 "All Risk" Including Earthquake and Flood, Excluding CA Earthquake AXIS -Section C 6% $ 7,500,000 RKS105900603 Montpelier Re -Section C 10% $ 12,500,000 RKS105900603 Great Lakes (Certain) -Section C 12.5% $ 15,625,000 RKS105900603 Lloyds of London -Section C 21.5% $ 26,875,000 RKS105900603 driver.aH a t INSURANCE SERVICES PUBLIC ENTITY PROPERT INSURANCE PROGRAM (PEPIP) JULY 1, 20 5 TO JULY 1, 2006 SC EDULE #3 INSURAN E COMPANIES r$'h - Y y r f F { r {' 4 t S4'''ti Kx,e!YI,t{�,:.. '' ✓ s V.+.`I�iy N fi',u jai .ti' 41'z `'i .? J rule o ...4. %•• }L .[},�.yFL. ,?Yh.!tri�ti...?rl ✓. °Y .4��h?,y✓.�5'}... Q4 o-.,w . {+'.•.h✓{T•SrA'l�U{✓` $150.000,000 x/s $100,000,000 "All Risk" Including Flood, Excluding CA Earthquake Commonwealth Insurance Company 25% $ 37,500,000 US5739 AXIS Specialty Insurance Corp 25% $ 37,500,000 98801 ,5 {�[�}�['re JC{e. h..M1} F+.F r � 4v. F r�� fh { ,�,2'/.j�,A ''-` ,{� -4. }`✓FFh'•'`iFi{,sr 'y{;;Sr- s�y'+r,v'i ri'rt,: . �.RF x �. igYf{�rtii,�;'Jraa�Fr�}����r�xY'�'A .. }Fh• n •.✓r .-..^t 4 i'r F r'? '. }� ✓ �y r�� f ��j. } Y •rf urtir.t ya•�r Y,S�, ���4�✓"y��Y. tih Yh�'rt�y=f Y�.�1F 4�{{• . $250,000.000 x/s $250,000,000 "All Risk" Excluding Earthquake and Flood AXIS -Section D .5% $ 37,500,000 RKS105900603 Montpelier Re -Section D 20% $ 50,000,000 RKS 105900603 Lloyds of London -Section D 65% $162,500,000 RKS105900603 ii✓'`Y• r rt ..<.n 'rj^•r ..., ;.r.4 Y•.'::r?•. ' v.r✓ {7,S.'' ' ' r J ��{{R;;rrn}�Jjl }]{f++%{{{Ye�,..F,r• rvir x .p::✓am✓ sY✓ l'.lr° $500.000,000 xis $500,000,000 "All Risk" Excluding Earthquake and Flood Insurance Company of the West 1 00% Z-V.".•;4!1 $ 500,000,000 CH0187181202 i}. $100,000.000 x/s $10,000,000 Terrorism only — Per Occurrence and Annual A,ggregate Lloyds of London 100% $100,000,000 RKS 105900614 ✓ r ✓ F'Y✓' YY✓r $'' { .: .... r,... x..... •, ..•..�x,• . +,.. '''�r +. J }• ......f ,+a...t... : 'j,' e. ...' .., r, ': , l... t$ �{r';',/ rr373:t!3�9IfST .... .rr r ..._ MAN'' err:, w v ,hr v'•;: �.x-,e..S.rh`{r r {.,rh kv:?:�ar' *BOILER & MACHINERY Primary $10,000,000 Lexington Insurance Company 100% r Fsi✓v ✓ ✓+}`i�t yy��r vF �r7f {�' y��'�F -s `Ftynz. ... ....^. .. .... 31`f�.ffl f✓: i}....x r:;1�U';�,,., ✓.A>'✓1r�{tn .. $ 10,000,000 RKS105900603 .D!.5. rL'Si4li %..Mtcwx6•;:.*;;a;MaiNgiO 50% of $90,000,000 x/s $10,000,000 CNA r•r 100% $ 45,000,000 BM1098667553 50% of $90,000,000 x/s $10,000,000 Great Lakes -Section A 50% $ 22,500,000 RKS105900603 Lloyds of London Section C $ 22 000 RKS105900603 q q50%(,-/ yam 'i=:f ,. `.: ✓ ! r , j:.. ii... ' *K iLlreh� g.,^,41 0 V:' :i ..: ^4 ., g5000� "37�Aill.:' h... ,. F *Applies if optional coverage is purchased RESOLUTION N RESOLUTION OF TH OF THE CITY OF N ACCEPTING THE LOWEST RESP FROM HAWTHORNE EQUIPME PURCHASE OF ONE CATERPIL PUBLIC WORKS DEPARTMENT IN WHEREAS, Section 2.60.260 of th agent to join with other public jurisdictions in coop WHEREAS, as a result of compe California where Hawthorne Equipment was responsible bidder and was awarded their bid f purchasing agent has recommended the purchas from Hawthorne Equipment. NOW, THEREFORE, IT IS HERE Thy of National City hereby awards the contract f the lowest responsive, responsible bidder, to wit: HAWTHORNE E BE IT FURTHER RESOLVED that hereby authorizes the Purchasing Agent to exe between Hawthorne Equipment and the City of N Caterpillar Wheel Loader for the Public Works Dep PASSED and ADOPTED this 7th da ATTEST: Mi hael R. ' al , City Clerk APPROVED AS TO FORM: ."1. George H. Eiser, III City Attorney . 2006 — 38 CITY COUNCIL TIONAL CITY NSIVE, RESPONSIBLE BID T AND AUTHORIZING THE R WHEEL LOADER FOR THE THE AMOUNT OF $97,057.88 Municipal Code authorizes the purchasing rative purchasing plans; and tive bids solicited by the City of Redlands, etermined to be the lowest responsive, r one 924 G Caterpillar Wheel Loader, the of one (1) 924 G Caterpillar Wheel Loader Y RESOLVED, that the City Council of the r one (1) 924 G Caterpillar Wheel Loader to UIPMENT the City Council of the City of National City to on behalf of the City a purchase order tional City for the purchase of one 924 G rtment in the amount of $97,057.88. of March, 2006. I 4 Nick Inzunza, ayor Passed and adopted by the Council of 'he City of National City, California, on March 7, 2006, by the following vote, to -wit: Ayes: Councilmembers Inzunza, Morrison, Natividad, Parra, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED :Y: NICK INZUNZA Mayorof the City of National City, California MICHAEL R. DALLA City Clerk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above a d foregoing is a full, true and correct copy of RESOLUTION NO. 2006-38 of the City f National City, California, passed and adopted by the Council of said City on March 7, .006. Citytlerk of the Cit f National City, California By: Deputy Form 8038-GC (Rev. November 2000) Department of the Treasury Internal Revenue Service Information Return Governmental Bond Issues, ► Under Internal Caution: If the issue price of the for Small Tax -Exempt Leases, and Installment Sales Revenue Code section 149(e) issue is $100,000 or more, use Form 8038-G. OMB No. 1545-0720 Part I Reporting Authority Check box if Amended Return ► IN 1 Issuer's name City of National City, California 2 Issuer's employer identification number 95: 6000749 3 Number and street (or P.O. box if mail is not delivered to street address) 1243 National City Boulevard Room/suite 4 City, town, or post office, state, and ZIP code National City, CA 91950-4397 5 Report number 5 01 6 Name and title of officer or legal representative whom the IRS may call Bill Yeomans, Interim Finance Director for more information 7 Telephone number of officer or legal representative ( 619 ) 336-4331 Part 11 Description of Obligations Check if reporting: a single issue A or on a consolidated basis ■ 8a Issue of obligation(s) (see instructions) ga 98,995.38 price b Issue date (single issue) or calendar year (consolidated) 9 Amount of the reported obligation(s) on line 8a: a Used to refund issue(s) (see instructions) ► March 24, 2006 9a 0 prior b Representing a loan from the of another tax-exempt obligation (e.g., bond bank) 9b 0 proceeds 10 If the issuer has designated any issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check this box I. ■ 11 If any obligation is in the form of a lease or installment 12 If the issuer has elected to pay a penalty in lieu of arbitrage . . sale, check this box ► J rebate, check this box ► ■ Sign Here Under penalties of perjury, I declare that I have examined this and belief, they are true, correct, and complete. return and accompanying schedules 3 (s b C and statements, and to the best of my knowledge Bill Yeomans, Interim Finance Di ' Issuer's authorized rep ntative Date Type or print name and title General Instructions Thus, an issuer 8038-GC for each Section references are to the internal issues and repor. Revenue Code unless otherwise noted. issues issued during consolidated Form Purpose of Form separate Form 8038-GC Form 8038-GC is used by the issuers of the IRS notice o tax-exempt govemmental obligations to in lieu of arbitrage provide the IRS with the information required When To File by section 149(e) and to monitor the requirements of sections 141 through 150. To file a separate on or before the Who Must File calendar month Issuers of tax-exempt governmental calendar quarter obligations with issue prices of less than To file a consolidated $100,000 must file Form 8038-GC. 8038-GC on or before Issuers of a tax-exempt governmental calendar year folowing obligation with an issue price of $100,000 or issue is issued. more must file Form 8038-G, Information Late filing. An issuer Return for Tax -Exempt Governmental extension of time Obligations. Section 3 of Rev. Filing a separate return. Issuers have the 635, if it is determined option to file a separate Form 8038-GC for on time is not due any tax-exempt governmental obligation with print at the top of an issue price of less than $100,000. Is Submitted in An issuer of a tax-exempt bond used to 88-10." Attach to finance construction expenditures must file a briefly stating why submitted to the separate Form 8038-GC for each issue to whether the obligation give notice to the IRS that an election was examination by the made to pay a penalty in lieu of arbitrage of any bond documents, rebate (see the line 12 instructions). sale documents. Filing a consolidated retum. For all tax-exempt governmental obligations with Where To File issue prices of less than $100,000 that are File Form 8038-GC, not reported on a separate Form 8038-GC, with the Internal an issuer must file a consolidated information may file a separate Form Other Forms That May Be Required of a number of small For rebating arbitrage (or paying a penalty in the remainder of small lieu of arbitrage rebate) to the Federal the calendar year on one government, use Form 8038-T, Arbitrage 8038-GC. However, a Rebate and Penalty in Lieu of Arbitrage must be filed to give Rebate. For private activity bonds, use Form the election to pay a penalty 8038, Information Return for Tax -Exempt rebate. Private Activity Bond Issues. Rounding to Whole Dollars return, file Form 8038-GC You may show the money items on this 15th day of the second return as whole -dollar amounts. To do so, after the close of the drop any amount less than 50 cents and in which the issue is issued. increase any amount from 50 to 99 cents to return, file Form the next higher dollar. February 15th of the the year in which the Definitions Obligations. This refers to a single may be granted an tax-exempt governmental obligation if Form to file Form 8038-GC under 8038-GC is used for separate reporting or to Proc. 88-10, 1988-1 C.B. multiple tax-exempt governmental obligations that the failure to file if the form is used for consolidated reporting. to willful neglect. Type or Tax-exempt obligation. This is a bond, the form, "This Statement installment purchase agreement, or financial Accordance with Rev. Proc. lease, on which the interest is excluded from the Form 8038-GC a letter income under section 103. the form was not IRS on time. Also indicate Tax-exempt governmental obligation. A in question is under tax-exempt obligation that is not a private IRS. Do not submit copies activity bond (see below) is a tax-exempt leases, or installment governmental obligation. This includes a bond See Where To File below. issued by a qualified volunteer fire department under section 150(e). Private activity bond. This includes an and any attachments, obligation issued as part of an issue in which: Revenue Service Center, • More than 10% of the proceeds are to be for any activity business use, Ogden, UT 842C1. return including all such issues issued within g the calendar year. used private and at. No. 64108E rector Form 8038-GC (Rev. 11-2000) UCC FINANCING STATEMENT FOLLOW INSTRUCTIONS (front and back) CAREFULLY A. NAME & PHONE OF CONTACT AT FILER (optional] 8. SEND ACKNOWLEDGMENT TO: (Name and Address) THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 1. DEBTORS EXACT FULL LEGAL NAME - insert only one debtor name (la or 11) - do not abbreviate or combine names le. ORGANIZATIONS NAME City of National City, California OR 1 b. INDNIDUALSS LAST NAME FIRST NAME MIDDLE NAME SUFFIX lc. MAILING 1243 ADDRESS National City Boulevard CRY National City STATE CA POSTAL CODE 91950-4397 COUNTRY USA 1d. TAX 95-6000749 ID #: SSN OR EIN ADM. INFO RE Ile. TYPE OF ORGANIZATION ORGAN DEBTOR nON'City 1`. JURISDICTION OF ORGANIZATION Ig. ORGANIZATIONAL ID #, if any nNONE 2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only cm) debtor name (2a or 2b) - do not abbreviate or combine names 2a. ORGANIZATION'S NAME OR 2b. INDIVIDUALS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 2o. MAILING ADDRESS CRY STATE POSTAL CODE COUNTRY 2d. TAX 10 #: SSN OR EIN ADD'L INFO RE Ile. TYPE OF ORGANIZATION ORGANIZATION DEBTOR I a. JURISDICTION OF ORGANIZATION 2g. ORGANIZATIONAL ID #, if any n NONE 3. SECURED PARTY'S NAME (or NAME of TOTAL ASSIGNEE of ASSIGNOR SIP - insert only � secured party name (3a or 3b) 3a. ORGANIZATION'S NAME Banc of America Leasing & Capital, LLC OR 3b INDIVIDUALSS LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c. MAILING ADDRESS CITY 2059 Northlake Parkway, 4th FL South Tucker STATE GA POSTAL CODE 30084 COUNTRY USA 4. This FINANCING STATEMENT covers the following collateral: Filing pursuant to a MASTER EQUIPMENT LEASE/PURCHASE ("Lessee") and Saulsbury Hill Financial, LLC ("Lessor") ("Assignee") dated March 24, 2006 for the following equipment Caterpillar Wheel Loader #924 G together with all accessories, Seriai/VIN: AGREEMENT between City of National City, California with Assignment to Banc of America Leasing & Capital, LLC attachments, substitutions and accessions. 5. ALTERNATIVE DESIGNATION if applimble):� ILESSEEILESSOR fl CONSIGNEE/CONSIGNOR BAILEE/BAILOR I JSELLERIBUYER �AG. LIEN NON-UCC FILING S. 11 ESTATE RECORDSATEAttach �Addendum�� ((�r record) (or recorded) rn)#�eoN 7• F DDm oNA FEEIT SEARCH REPOR}o� nel lebtor(s) I At Debtors' Debtor 1 I Debtor 2 8, OPTIONAL FILER REFERENCE DATA FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT (FDRM UCC1) (REV. 07/29/98) City of National City, California COUNCIL AGENDA STATEMENT 5 MEETING DATE March 7, 2006 AGENDA ITEM NO. ITEM TITLE RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH SAULSBURY HILL FINANCIAL FOR LEASE FINANCING FOR THE PURCHASE OF A CATERPILLAR 924G WHEEL LOADER FOR THE PUBLIC WORKS DEPARTMENT PREPARED BY Bill Yeomans �jf/ DEPARTMENT Finance x 4330 Interim Finance Dir r EXPLANATION In conjunction with the Purchasing Agent's purchase of a Caterpillar 924G Wheel Loader from Hawthorne Equipment for the Public Works Department, the Finance Department received proposals from four different lease financing vendors and selected Saulsbury Hill Financial because of its lowest interest rate, financing commitments and delivery requirements. The term of the lease financing is for 10 years at 4.431% for a quarterly principal and interest payment of $3,016.80 or $12,067.20 per year. Environmental Review X N/A Financial Statement The amount of $120,672.00 spread out for 10 years at $12,067.20 per year will be added to the Gas Tax, Sewer, Refuse and Parks Capital Funds. Account No. esze STAFF RECOMMENDATION Staff recommends to award the Lease Financing Contract to Saulsbury Hill Financial. BOARD / COMMISSION RECOMMENDATION ATTACHMENTS ( Listed Below ) Resolution Lease Proposal Summary Resolution No. Rne),C,,, A-200 (9/80) C. ,oOG RESOLU ION NO. 2006 - RESOLUTION •F THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH +AULSBURY HILL FINANCIAL FOR LEASE FINANCI G FOR THE PURCHASE OF A CATERPILLAR 924e WHEEL LOADER FOR THE PUBLIC WO KS DEPARTMENT WHEREAS, in conjunction wit the Purchasing Agent's purchase of a Caterpillar 924G Wheel Loader from Hawthorne quipment for the Public Works Department, the Finance Department has received proposals from four different lease financing vendors; and WHEREAS, after reviewing =ll proposals, staff recommends Saulsbury Hill Financial because it offers the lowest nterest rate, financing commitments and delivery requirements. NOW, THEREFORE, BE IT ESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a lease financing agreement with Saulsbury Hill Financial for the purc ase of a Caterpillar 924G Wheel Loader from Hawthorne Equipment for the Public orks Department. Said agreement is on file with the Office of the City Clerk. PASSED and ADOPTED this "' day of March, 2006. Nick lnzunza, Mayor ATTEST: Michael R. Dalla, City Clerk APPROVED AS TO FORM: George H. Eiser, III, City Attorney CAT Loader City of National City Public Works Principal $ 97,057.88 Years Rate Fund # % Gas Tax 109 50% 48,528.94 Sewer 125 25% 24,264.47 Refuse 172 15% 14,558.68 Parks 115 10% 9,705.79 5 4.398% Annual pmt. 5 years 10, 865.06 5,432.53 3,259.52 2,173.01 10 4.43% Annual pmt. 10 years 6,033.60 3,016.80 1,810.08 1,206.72 TOTAL 100% $ 97,057.88 $ 21,730.12 $ 12,067.20 Fund Line item 109 422-000 455 000 125 422-000 455 000 172 422-000 455 000 115 422-000 455 000 RESOLUTION NO. 2006 — 39 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH SAULSBURY HILL FINANCIAL FOR LEASE FINANCING FOR THE PURCHASE OF A CATERPILLAR 924G WHEEL LOADER FOR THE PUBLIC WORKS DEPARTMENT WHEREAS, in conjunction with the Purchasing Agent's purchase of a Caterpillar 924G Wheel Loader from Hawthorne Equipment for the Public Works Department, the Finance Department has received proposals from four different lease financing vendors; and WHEREAS, after reviewing all proposals, staff recommends Saulsbury Hill Financial because it offers the lowest i terest rate, financing commitments and delivery requirements. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes the Mayor to execute a lease financing agreement with Saulsbury Hill Financial for the purchase of a Caterpillar 924G Wheel Loader from Hawthorne Equipment for the Public Works Department. Said agreement is on file with the Office of the City Clerk. PASSED and ADOPTED this 7th day of March, 2006. ATTEST: >/ Mich. el R. Della, y Clerk APPROVED AS TO FORM: issot&. zip George H. Eiser, III City Attorney Passed and adopted by the Council of the City of National City, California, on March 7, 2006, by the following vote, to -wit: Ayes: Councilmembers Inzunza, Natividad, Parra, Zarate. Nays: None. Absent: Morrison. Abstain: None. AUTHENTICATED BY: NICK INZUNZA Mayor of the City of National City, California aL City CI rk of the City of ational City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2006-39 of the City of National City, California, passed and adopted by the Council of said City on March 7, 2006. City Clerk of the City of National City, California By: Deputy JUNE 6, 2006 TO: MIKE DALLA, CITY CLERK FROM: NORMA URIAS, FINANCE DEPT SUBJECT: MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT FOR CAT LOADER Please attach the following two documents to the original Master Equipment Lease/Purchase Agreement for the Cat Loader which is currently filed in your department: (1)Form of Disbursement Request — Schedule 1 — F-1 (2) Acceptance Certificate — Exhibit F — F-2 SCHEDULE 1 FORM OF DISBURSEMENT REQUEST Re: Master Equipment Lease/Purchase Agreement dated as of March 24, 2006 by and between Saulsbury Hill Financial, LLC, as Lessor and the City of National City, California, as Lessee (the "Lease") In accordance with the terms of the Acquisition Fund and Account Control Agreement, dated as of March 24, 2006 (the "Acquisition Fund and Account Control Agreement") by and among Saulsbury Hill Financial, LLC ("Lessor"), City of National City, California ("Lessee") and Bank of America, N.A., 333 S. Hope Street, Los Angeles, CA 90071 branch (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund and Account Control Agreement (the "Acquisition Fund") for the following purposes. Payee's Name and Address invoice Number Dollar Amount Purpose Hawthorne Machinery, Inc. 1945 Camino San Bernardo San Diego, CA 92127-2499 $98,995.38 The undersigned hereby certifies as follows: (i) An obligation in the stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authorized Representative, has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease. (v) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. (vi) The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: June 1, 2006 Disbursement of funds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized SAULSBURY HILL FINANCIAL, LLC as Lessor under the Lease By: Title: Managing Member CITY OF NATIONAL CITY, CALIFORNIA F-1 By: Authorized Re sentative CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of ...5,J/V/ On JT L(E 1, cg- .0, before Date personally appeared ts s. me, /I/14A64/ J /.U.CIfI, AIIT Y I'u8ue Name and Title of Officer (e.g., "Jane Doe, Notary Public") WJL-1—�'► Y811115 Name(s) of Signer(s) Place Notary Seal Above ❑ personally known to me ,proved to me on the basis of satisfactory evidence to be the persons whose nameei /ar<s subscribed to the within instrument and acknowledged to me that /ei4e/the- executed the same in /}ltlbs+r authorized capacity(), and that by 4/1 JttTeir signature(4 on the instrument the personO, or the entity upon behalf of which the personXt acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary ubllc OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Pviwfl 1 [ bt5,45445 42E % �ELbClE�3T Number of Pages: l Document Date: V JIJ4 / 0)t l Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — E Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here L.�:�.�=1.���^�!:`✓G�✓'+`�'"X�����G�fv4:'3s�nrf4�✓:�Z�':�:�:�ei: e].�Gv_XC�C�:C�✓C`✓L��b�%:�✓s�✓;4�✓:vCvy+:����n�lS�+:�f�i O 2004 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 Reorder: Call Toll -Free 1-800-876-6827 Exx[BIT F ACCEPTANCE CERTIFICATE Saulsbury Hill Financial, LLC 1614 15th Street — 3`d Floor Denver, CO 80202-1304 Re: Schedule of Property No. 001, dated March 24, 2006, to Master Equipment Lease/Purchase Agreement, dated as of March 24, 2006, between Saulsbury Hill Financial, LLC, as Lessor, and City of National City, California, as Lessee Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: 1. All of the Equipment (as such term is defined in the Agreement) listed in the above -referenced Schedule of Property (the "Schedule") has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: .Tung 1 , 2006 (Seal) LESSEE: City of National City. California By: Name: William "Rfr(1" Yvnmana ** Title: Budget & Investment Officer ** F-2 Bill Yeomans has been the Interim Finance Director for the City of National City but as of larch 20, 2006 his Title was changed to Budget and Investment Officer. CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT C.: c: <; c:.i:><S.cji!.>i�ai,�s� �i.f.�.�i,.�.�-;,zi,�ca. �> �> �: �i i �S �S �5,�-•�-i�c.��.��1crs�c.!s�5,�-.�e-�-.�;„�.�� Ta'�����S �. a��.a� aS �� �; s�S �i�-.].l= State of California County of '/J �1 D On �LIIJE 4 &cap , Date personally appeared before me, jiiMg#XLLJ , itoriKY Name and Title of Officer (e.g., "Jane Doe, Notary Public") J 1JILLl,nr1 yEDmiq/J3 Name(s) of Signer(s) Place Notary Seal Above ❑ personally known to me %proved to me on the basis of satis story evidence to be the person(,' whose name = avg subscribed to the within instrument and acknowledg to me that ®/si/th)9ye executed the same in her/their authorized capacity(jlj, and that by - heir signature* on the instrument the person*, or the entity upon behalf of which the person(i acted, executed the instrument. WITNESS y hand adofficial s OPTIONAL Signature of Notary Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document /��yy��Y,� _ �i �� Title or Type of Document: T41��✓iSt /6;Q- 1L T Document Date: cibuE J Signer(s) Other Than Named Above: 3 » ,itlacJL Number of Pages: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT TH OF S BPRINT ER Top of thumb here Signer's Name: E Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here �:2%':�✓<�%`�i�✓:�t�✓:�:�✓k�:L+.�✓5�.`�;�: cuC✓:�:v:i�G�%�L:�6�/,�:�:�::��4�=?S�✓4�✓:�:�%��✓G�%:�cr4�C0.✓:�✓2�✓: �✓:�✓t�,:�✓Y�i ® 2004 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907. Reorder: Call Tot -Free 1-800.876-6827 EXHIBIT F ACCEPTANCE CERTIFICATE Saulsbury Hill Financial, LLC 1614 15' Street — 3'd Floor Denver, CO 80202-1304 Re: Schedule of Property No. 001, dated March 24, 2006, to Master Equipment Lease/Purchase Agreement, dated as of March 24, 2006, between Saulsbury Hill Financial, LLC, as Lessor, and City of National City, California, as Lessee Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement (the "Agreement"), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: 1. All of the Equipment (as such term is defined in the Agreement) listed in the above -referenced Schedule of Property (the "Schedule") has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. Date: June 1, 2006 LESSEE: City of National City, California (Seal) MANGUM% UNA Convulsion 411641272 Nobly Pubic - caaomo ; Son ONOo County Conin.4'lisiiob26, 701 By: V" s Name: W i 11; am ttRIX7 n Yeomans ** Title: Budget & Investment Officer ** Bill Yeomans has been the Interim Finance Director for the City of National City but as of March 20, 2006 his Title was changed to Budget and Investment Officer. F-2 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of bit 4/6D On Date personally ' appeared before me, _frifAlegylkgfril 1-uM, Nor/KY Name and Title of Officer (e.g., "Jane Doe, Notary Public") jtV/ J1/n-1 YEZ))7Y/AZ Name(s) of Signer(s) Place Notary Seal Above ❑ personally known to me ,proved to me on the basis of satis ctory evidence to be the person(4 whose name =' alig subscribed to the within instrument and acknowledgPP��..dd to me that sf ithpy executed the same in ('I 'her/their authorized capacity(]061, and that by htefr signature* on the instrument the person('(, or the entity upon behalf of which the person(asT acted, executed the instrument. WITNESS hand andofficial s OPTIONAL Signature of Notary Public Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. _ ham' -' Description of Attached Document pr Title or Type' of Document: L,��°Tll, _ Document Date: ati-J& J J Liao Signer(s) Other Than Named Above: Afatii Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here Number of Pages: 1 Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THU OF SIC BPRINT ER Top of thumb here =�✓.:�:�5�:���:�^ATV .�✓:�:\✓':�:�:�SV G�✓:�:�:�✓4�✓G\�4�✓:`✓:��:�!:� ;�J:�G�: ei:�:�✓.:V :�:�:\'✓��S�G�:�✓L�. ��_✓.:�✓.G�i © 2004 National Notary Association - 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 Reorder: Call Toll -Free 1.800-876-6827 SCHEDULE 1 FORM OF DISBURSEMENT REQUEST Re: Master Equipment Lease/Purchase Agreement dated as of March 24, 2006 by and between Saulsbury Hill Financial, LLC, as Lessor and the City of National City, California, as Lessee (the "Lease") In accordance with the terms of the Acquisition Fund and Account Control Agreement, dated as of March 24, 2006 (the "Acquisition Fund and Account Control Agreement") by and among Saulsbury Hill Financial, LLC ("Lessor"), City of National City, California ("Lessee") and Bank of America, N.A., 333 S. Hope Street, Los Angeles, CA 90071 branch (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund and Account Control Agreement (the "Acquisition Fund") for the following purposes. Payee's Name and Address Invoice Number Dollar Amount Purpose Hawthorne Machinery, Inc. 1945 Camino San Bernardo San Diego, CA 92127-2499 $98,995.38 The undersigned hereby certifies as follows: (i) An obligation in the stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) The undersigned, as Authorized Representative, has no notice of any vendor's, mechanic's or other liens or rights to liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease. (v) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. (vi) The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: June 1, 2006 Disbursement of funds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized SAULSBURY HILL FINANCIAL, LLC as Lessor under the Lease By: CITY OF NATIONAL CITY, CALIFORNIA Title: Managing Member F- 1 By: Authorized Relisentative CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of .5 1AI .L 1 D On JD LIE 1, -CCXo, before Date personally appeared me, 0110-64 /17 La/04, ATOP P &- Name and Title of Officer (e.g., "Jane Doe, Notary Public') Name(s) of Signer(s) Place Notary Seal Above ❑ personally known to me 'proved to me on the basis of satisfactory evidence to be the personj,» whose nameggar6 subscribed to the within instrument and acknowledged to me that LalSe/tht executed the same in 4/ilt40ir authorized capacity(b ), and that by I /11etltIleir signature( on the instrument the personFS), or the entity upon behalf of which the person(4 acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: fD,'j'I bL- •aSF/n 6ues;IT Document Date: (Tajlf / „lxcl Number of Pages: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): D Partner — D Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner— ❑ Limited ❑ General E Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNER Top of thumb here © 2004 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Item No. 5907 Reorder: Call Toll -Free 1-800-876-6827