Contract - Roto - 2003-08-14 LEASE WITH OPTION TO PURCHASE #03-059
This LEASE WITH OPTION TO PURCHASE dated August 14 2003 ( Lease )
is by and between MUNICIPAL FINANCE CORPORATION ( Corporation ) a
corporation duly organized and operating under the laws of the State of
California as lessor and COSTA MESA SANITARY DISTRICT a sanitary
district duly organized and existing under the laws of the State of
California ( Lessee ) as lessee
RECITALS
WHEREAS Lessee deems it essential for Lessee to refinance and retain
the property described herein for its own public purposes and
WHEREAS it is intended that this Lease be treated as a tax exempt
obligation of Lessee for federal income tax purposes and
WHEREAS Lessee and Corporation agree to mutually cooperate now and
hereafter to the extent possible in order to sustain the intent of
this Lease and the bargain of both parties hereto
WITNESSETH
NOW THEREFORE in consideration of the mutual covenants
hereinafter set forth the parties hereto agree as follows
SECTION 1 Lease Corporation hereby leases to Lessee and
Lessee hereby leases and hires from Corporation all property (the
Property' ) described in the schedule or schedules (collectively the
Schedule ) executed by the parties concurrently herewith and hereafter
and made a part hereof Hereinafter reference to Corporation means
Corporation and Corporation s assigns for those rights interests and
obligations that may be assigned by Corporation
SECTION 2 Term The terms and conditions of this Lease shall
become effective upon the authorized execution of this Lease by the
parties hereto The rental term of the Property leased hereunder
commences and terminates on the dates specified in the Schedule
SECTION 3A Representations and Warranties of Lessee The
Lessee represents and warrants to Corporation tha,_
(a) Lessee is a sanitary district and political subdivision duly
organized and existing under the Constitution and laws of the State of
California with authority to enter into this Lease and to perform all
of its obligations hereunder
(b) Lessee s governing body has duly authorized the execution and
delivery of this Lease and further represents and warrants that all
requirements have been met and procedures followed to ensure its
enforceability
(c) The execution delivery and performance of this Lease do not
and will not result in any breach of or constitute a default under any
indenture mortgage contract agreement or instrument to which Lessee
is a party by which it or its property is bound
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(d) There is no pending or to the knowledge of Lessee
threatened action or proceeding before any court or administrative
agency which will materially adversely affect the ability of Lessee to
perform its obligations under this Lease
(e) The Property being leased is essential to Lessee in the
performance of its governmental functions and its estimated useful life
to Lessee exceeds the term of this Lease
SECTION 3B Budget and Appropriation Lessee shall take such
action as may be necessary to include all rental payments in its annual
budget and annually to appropriate an amount necessary to make such
rental payments During the term of this Lease Lessee will furnish to
Corporation if so requested copies of each proposed budget of Lessee
within thirty (30) days after it is filed and of each final budget of
the Lessee within thirty (30) days after it is printed The covenants
on the part of Lessee shall be -deemed and construed to be duties
imposed by law and it shall be the duty of each and every public
official of Lessee to take such action and do such things as are
required by law in the performance of the official duty of such
officials to enable Lessee to carry out and perform the covenants and
agreements in this Lease agreed to be carried out and performed by
Lessee
SECTION 4 Representations and Warranties of Corporation
Corporation represents and warrants to Lessee that
(a) Corporation is duly organized validly existing and in good
standing under the laws of the State of California with full corporate
power and authority to lease and own real and personal property
(b) Corporation has full power authority and legal right to
enter into and perform its obligations under this Lease and the
execution delivery and performance of this Lease have been duly
authorized by all necessary corporate actions on the part of
Corporation and do not require any further approvals or consents
(c) The execution delivery and performance of this Lease do not
and will not result in any breach of or constitute a default under any
indenture mortgage contract agreement or Instrument to which
Corporation is a party by which it or its property is bound
(d) There is no pending or to the knowledge of Corporation,
threatened action or proceeding before any court or administrative
agency which will materially adversely affect the ability of
Corporation to perform its obligations under this Lease
SECTION 5 Property Acquisition. Lessee currently has
possession of the Property pursuant to a Lease with Option to Purchase
dated July 12 2001 between Municipal Finance Corporation as lessor
( Lessor ) and the Lessee (the Refunded Lease )
SECTION 6 Financing Amount The monies available to pay for
the Property set forth on the Schedule are defined as the Financing
Amount Disbursement of the Financing Amount will be made directly to
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City National Bank as paying agent of Lessor under the Refunded Lease
to pay the purchase option price of the Property
SECTION 7 Rental Payments LESSEE SHALL PAY CORPORATION
RENTAL PAYMENTS (the Rental Payments ) IN THE AMOUNTS AND AT THE TIMES
SET FORTH IN THE SCHEDULE AT THE OFFICE OF CORPORATION OR TO SUCH
OTHER PERSON OR AT SUCH OTHER PLACE AS CORPORATION MAY FROM TIME TO
TIME DESIGNATE IN WRITING Should Lessee fail to pay any part of the
Rental Payments herein reserved within fifteen (15) days from the due
date thereof Lessee shall upon Corporation' s written request pay
interest on such delinquent payment from the date said payment was due
until paid at the rate of twelve percent (12%) per annum or the maximum
legal rate whatever is less Lessee shall pay Rental Payments
exclusively from legally available funds in lawful money of the United
States of America to the Corporation The obligation to pay Rental
Payments will be absolute and unconditional in all events and will not
be subject to set-off defense abatement reduction counterclaim, or
recoupment for any reason whatsoever
SECTION 8 Reserved
SECTION 9 Security Interest As additional security for the
payment of all of Lessee s obligations hereunder Lessee hereby grants
Corporation its successors or assigns a security interest in the
Property its accessions and attachments thereto and replacements
thereof and substitutions therefor and all proceeds of the Acquisition
Account and all proceeds and products of any of the foregoing Lessee
agrees to execute such additional documents including financing
statements which Corporation deems necessary or appropriate to
establish and maintain Corporation s security interest
SECTION 10 Use Lessee shall cause the Property to be used in
a careful and proper manner and shall comply with and conform to all
national state municipal police and other laws ordinances and
regulations in anyway relating to the possession use or maintenance
of the Property
SECTION 11 Acceptance Lessee has accepted the Property and
acknowledges that the Property is in good working order normal wear
and tear excepted
SECTION 12 Reserved
SECTION 13 Property Selection Lessee has negotiated and
facilitated the acquisition of the Property to be leased hereunder
Corporation shall have no duty to inspect the Property If the Property
has not been properly installed does not operate as represented or
warranted by any Contractor or is unsatisfactory for any reason,
Lessee shall make any claim on account thereof solely against said
Contractor
SECTION 14 Disclaimer of Warranty CORPORATION NOT BEING THE
MANUFACTURER OR SUPPLIER OF THE PROPERTY NOR A DEALER IN SIMILAR
PROPERTY HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATION WARRANTY
OR COVENANT EXPRESS OR IMPLIED WITH RESPECT TO THE DESIGN
DURABILITY FITNESS FOR USE SUITABILITY OR MERCHANTABILITY OF THE
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PROPERTY IN ANY RESPECT AND AS BETWEEN CORPORATION AND LESSEE ALL
PROPERTY SHALL BE ACCEPTED AND LEASED BY LESSEE WHERE IS " AS IS "
AND 'WITH ALL FAULTS " AND CORPORATION SHALL NOT BE RESPONSIBLE FOR ANY
PATENT OR LATENT DEFECTS THEREIN LESSEE AGREES TO SETTLE DIRECTLY SUCH
CLAIMS WITH THE SUPPLIER AND WILL NOT ASSERT ANY SUCH CLAIMS AGAINST
CORPORATION
SECTION 15 Alterations and Attachments All additions and
improvements that are made to the Property shall belong to and become
the property of the Corporation except that separately identifiable
attachments added to the Property by Lessee may remain the property of
Lessee as long as (i) the attachment is paid for in full by Lessee and
(ii) Lessee agrees to remove the attachment and restore the Property to
substantially as good condition as when received, normal wear and tear
excepted if and when the Property may be returned to Corporation
SECTION 16 Reserved
SECTION 17 Maintenance and Repairs Lessee at its own cost
and expense shall furnish necessary labor and materials to maintain
the Property in good repair condition and working order Lessee s
obligations to maintain the Property does not relieve the Supplier of
its responsibility to fully perform with respect to all applicable
Property warranties and guarantees
SECTION 18 Risk of Loss ; Damage; Destruction With the
exception of acts resulting from intentional misconduct or gross
negligence by Corporation its agents and representatives Lessee
hereby assumes and shall bear the entire risk of loss and damage to the
Property from any and every cause whatsoever No loss or damage to the
Property or any part thereof shall impair any obligation of Lessee
under this Lease which shall continue in full force and effect Lessee
waives the benefit of Civil Code Sections 1932 (2) and 1933 (4) and any
and all other rights to terminate this Lease by virtue of any damage or
destruction to the Property
SECTION 19 Physical Damage/Public Liability Insurance Lessee
shall keep the Property insured against risk of loss or damage from any
special form peril for not less than the applicable purchase option
value in the Schedule and Lessee shall carry public liability and
property damage insurance covering the Property All said insurance
shall be in form and amount and with reputable companies and shall name
Corporation as an additional insured and loss payee Lessee shall pay
the premiums therefor and deliver certification of said policies to
Corporation Each insurer shall agree by endorsement upon the policy
or policies issued by it or by independent instrument furnished to
Corporation that it will give Corporation thirty (30) days written
notice before the policy or policies shall be altered or canceled The
proceeds of such insurance at the option of Lessee shall be applied
(a) toward the replacement restoration or repair of the Property or
(b) toward payment of the total remaining obligations of Lessee
hereunder provided however that Lessee shall be responsible for the
amount by which such insurance proceeds are insufficient to satisfy the
cost of option (a) or option (b) above as applicable Should Lessee
replace restore or repair the Property as set out in option (a)
above this Lease shall continue in full force and effect Lessee may
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self-insure up to specified limits as evidenced by a certificate of
self insurance to be attached hereto in form and amount acceptable to
Corporation Any self insurance program in which Lessee is a
participant shall comply with the provisions under this Lease
respecting cancellation and modification and payment of losses to the
Corporation as its respective interests may appear Such self insurance
shall be maintained on a basis which is actuarially sound as
established by Lessee s risk manager or an independent insurance
consultant which determination shall be made annually Any deficiency
shall be corrected within sixty (60) days of Lessee becoming aware of
such deficiency
SECTION 20 Reserved.
SECTION 21 Liens and Taxes Lessee shall keep the Property
free and clear of all levies liens and encumbrances and shall
promptly pay all fees assessments charges and taxes (municipal
state and federal) which may now- or hereafter be imposed upon the
ownership leasing renting sale possession or use of the Property
excluding however all taxes on or measured by Corporation s income
SECTION 22 Indemnity Subject to California law concerning
contribution and enforceability of indemnifications Lessee shall
indemnify Corporation against and hold Corporation harmless from any
and all claims actions suits proceedings costs expenses damages
and liabilities including attorneys fees arising out of connected
with or resulting from the selection possession use operation or
return of the Property excepting that Lessee shall not be required to
indemnify Corporation in the event that such liability or damages are
caused by the gross negligence or intentional misconduct of
Corporation its agents or representatives
SECTION 23 Events of Default The term Event of Default as
used in this Lease means the occurrence of any one or more of the
following events (a) Lessee fails to make any Rental Payment (or any
other payment) within fifteen (15) days after the due date thereof or
Lessee fails to perform or observe any other covenant condition or
agreement to be performed or observed by it hereunder and such failure
to either make the payment or perform the covenant condition or
agreement is not cured within ten (10) days after written notice
thereof by Corporation (b) Corporation discovers that any statement
representation or warranty made by Lessee in this Lease the Schedule
or in any document ever delivered by Lessee pursuant hereto or in
connection herewith is false misleading or erroneous in any material
respect (c) Lessee becomes insolvent is unable to pay its debts as
they become due makes an assignment for the benefit of creditors
applies or consents to the appointment of a receiver trustee
conservator or liquidator of Lessee or of all or a substantial part of
its assets or a petition for relief is filed by or against Lessee
under federal bankruptcy insolvency or similar laws
SECTION 24 Remedies Upon the occurrence of an Event of
Default Corporation may at its option exercise any one or more of
the following remedies (a) by written notice to Lessee request Lessee
to (and Lessee agrees that it shall ) at Lessee s expense promptly
return the Property to Corporation freight prepaid and insured to any
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location in the State of California as designated by Corporation or
Corporation at its option may enter upon Lessee s premises where the
Property is located and take immediate possession of and remove the
same without liability to Corporation or its agents for such entry or
for damage to property or otherwise (b) sell or lease the Property or
sublease it for the account of the Lessee holding Lessee liable for
all Rental Payments and other payments due to the effective date of
such selling leasing or subleasing plus any accrued interest to the
date of termination and (c) exercise any other right remedy or
privilege which may be available to it under applicable law including
the right to (i) proceed by appropriate court action to enforce the
terms of this Lease (ii) recover damages for the breach of this Lease
and (iii) rescind this Lease as to any portion of or all of the
Property No right or remedy herein conferred upon or reserved to
Corporation is exclusive of any other right or remedy herein but each
shall be cumulative of every other right or remedy given hereunder or
now or hereafter existing at law or in equity or by statute or
otherwise and -may be enforced concurrently therewith or from time to
time
SECTION 25 Non Waiver No covenant or condition to be
performed by Lessee under this Lease can be waived except by the
written consent of Corporation Forbearance or indulgence by
Corporation in any regard whatsoever shall not constitute a waiver of
the covenant or condition in question Until performance by Lessee of
said covenant or condition is complete Corporation shall be entitled
to invoke any remedy available to Corporation under this Lease or by
law or in equity despite said forbearance or indulgence
SECTION 26 Assignment Without the prior written consent of
Corporation Lessee shall not (a) assign transfer pledge or
hypothecate this Lease the Property or any part thereof or any
interest therein or (b) sublet or lend the Property or any part
thereof or permit the Property or any part thereof to be used in a
material way by anyone other than Lessee or Lessee s employees Consent
to any of the foregoing prohibited acts applies only in the given
instance and is not a consent to any subsequent like act by Lessee or
any other person Corporation shall not assign its obligations under
this Lease with the exception of its obligation to issue default
notices and its obligations pursuant to Section 30 Corporation may
assign its right title and interest L.. this Lease the Rental Payments
and other amounts due hereunder and the Property in whole or in part to
one or more assignees or subassignees at any time without the consent
of Lessee Any such assignment by Corporation or its assigns shall
comply with the requirements of Sections 5950-5955 of the California
Government Code No such assignment shall be effective as against
Lessee unless and until Corporation shall have filed with Lessee
written notice thereof Lessee shall pay all Rental Payments hereunder
pursuant to the direction of Corporation or the assignee named in the
most recent assignment or notice of assignment filed with Lessee
During this Lease term Lessee shall keep a complete and accurate
record of all such notices of assignment Subject always to the
foregoing this Lease inures to the benefit of and is binding upon,
the heirs legatees personal representatives successors and assigns
of the parties hereto
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SECTION 27 Ownership The Property is and shall at all times
be and remain the sole and exclusive property of Corporation and
Lessee shall have no right title or interest therein or thereto
except as expressly set forth in Sections 29 and 30 Lessee shall take
all actions necessary to insure that legal title to the Property being
acquired by Lessee hereunder whether by Lessee or by a third party
acting on behalf of Lessee is vested in Corporation
SECTION 28 Personal Property The Property is and shall at all
times be and remain personal property notwithstanding that the Property
or any part thereof may now be or hereafter become in any manner
affixed or attached to or imbedded in or permanently resting upon
real property or any building thereon or attached in any manner to
what is permanent by means of cement plaster nails bolts screws or
otherwise
SECTION 29 Purchase Option If Lessee is not in default of any
term, condition or payment specified hereunder Lessee may exercise
options to prepay this Lease and purchase not less than all of the
Property in as is and where is condition on the specified dates and
for the specified amounts set forth in the Schedule annexed hereto
Each purchase option payment specified for a particular date is
exclusive of the Rental Payment due on the same date
SECTION 30 Release of Liens Upon Lessee either making all of
the Rental Payments scheduled herein or making a purchase option
payment Corporation its successors or assigns shall cause i) legal
title to the Property to be transferred to Lessee and ii) the release
of all liens encumbrances or security interests on the Property
created pursuant to Corporation s rights under this Lease
SECTION 31 Reports/Tax Covenants Lessee shall cooperate with
Corporation to comply with any and all reporting requirements that may
be mandated by agencies of the United States of America or the State of
California including the timely filing of IRS Form #8038-G or #8038-
GC Lessee covenants to Corporation that
(a) Throughout the term of the Lease the Property will be used
for performing one or more governmental functions consistent with the
permissible scope of Lessee s authority and will not be used in a trade
or business of any person or entity other than Lessee except for uses
by community services organizations as prescribed in the California
Government Code
(b) Lessee will not take any action or omit to take any action
which action or omission, if reasonably expected on the date of this
Lease would have caused this Lease to be an arbitrage bond within
the meaning of Section 148 of the Internal Revenue Code of 1986 (as
amended) (the Code )
(c) The Rental Payments are not directly guaranteed or indirectly
guaranteed in whole or in part by the United States or any agency or
instrumentality of the United States so as to cause the Rental Payments
to be federally guaranteed within the meaning of Section 149 (b) of
the Code
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(d) The Lease Proceeds used for reimbursement of prior
expenditures will be made pursuant to and in compliance with Income Tax
Regulations Section 1 150 2
(e) Lessee hereby designates this Lease for purposes of paragraph
(3) of Section 265 (b) of the Code and represents that not more than
$10 000 000 aggregate principal amount of obligations the interest on
which is excludable (under Section 103 (a) of the Code) from gross
income for federal income tax purposes (excluding (i) private activity
bonds as defined in Section 141 of the Code except qualified
501 (c) (3) bonds as defined in Section 145 of the Code and (ii) current
refunding obligations to the extent the amount of the refunding
obligation does not exceed the outstanding amount of the refunded
obligation) including this Lease has been or will be issued by
Lessee including all subordinate entities of Lessee during calendar
year 2003
SECTION 32 Extraordinary Costs In the case of li tigation the
prevailing party shall be entitled to recover from the opposing party
all costs and expenses including attorneys fees (which may be the
allocable cost of in-house counsel) incurred by the prevailing party
in exercising any of its rights or remedies hereunder or enforcing any
of the terms conditions or provisions hereof
SECTION 33 Severability If any provision of this Lease shall
be held invalid or unenforceable by a court of competent jurisdiction,
such holdings shall not invalidate or render unenforceable any other
provision of this Lease unless elimination of such provision
materially alters the rights and obligations embodied in this Lease
SECTION 34 Entire Agreement This Lease the Schedule and any
agreements that specifically refer to this Lease that are duly executed
by authorized agents of the parties hereto constitute the entire
agreement between Corporation and Lessee and it shall not be further
amended altered or changed except by a written agreement that is
properly authorized and executed by the parties hereto
SECTION 35 Notices Service of all notices under this Lease
shall be sufficient if given personally or mailed to the party involved
at its respective address hereinafter set forth or at such address as
such party may provide in writing from time to time Any such notice
mailed to such address shall be effective when deposited in the United
States mail duly addressed and with postage prepaid
SECTION 36 Titles The titles to the Sections of this Lease
are solely for the convenience of the parties and are not an aid in the
interpretation thereof
SECTION 37 Further Assurances and Corrective Instruments
Corporation and Lessee agree that they will from time to time
execute acknowledge and deliver or cause to be executed acknowledged
and delivered, such supplements hereto and such further instruments as
may be reasonably required for correcting any inadequate or incorrect
description of the Property hereby leased or intended so to be or for
carrying out the expressed intention of this Lease
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SECTION 38 Execution in Counterparts This Lease may be
executed in several counterparts each of which shall be original and
all of which shall constitute but one and the same instrument
SECTION 39 Time Time is of the essence in this Lease and each
and all of its provisions
SECTION 40 Lease Interpretation This Lease and the rights of
the parties hereunder shall be determined in accordance with the laws
of the State of California
IN WITNESS WHEREOF the parties hereto have caused their authorized
agents to execute this Lease on the dates specified below
MUNICIPAL FINANCE CORPORATION COSTA MESA SANITARY DISTRICT
23945 Calabasas Road, Suite 103 77 Fair Drive 3rd Floor
Calabasas CA 91302 Costa Mesa CA 9 626
(lessor) A (lessle)
By BY _ . s LED -_ _L. .0
Arlene Sc afer
Title Title
Date Date August 14, 2003
By
James Ferrym
Title Secretary
Date August 14, 2003
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LEASE SCHEDULE #03-059
This Schedule is issued pursuant to the Lease with Option to Purchase
dated as of August 14 2003 by and between the undersigned
A Property Location City wide
B Property Description Roll out carts (approximately 44 000)
C Name and Address of Supplier(s)
ROTO INDUSTRIES INC
1251 North Jefferson ST
Anaheim, CA 92807
D Financing Amount Summary
Original Property Cost
(including related expenses) $2 200 000 00
Less Capital Contribution from
Prior lease payments (312 829 16)
Financing Amount $1 887 170 84
E Lease Term The term of this Schedule is for a period of ninety
six (96) months commencing on and concluding
ninety six (96) months thereafter
F Rental Payments The Rental Payments for this Schedule are due in
sixteen (16) consecutive semi-annual payments in accordance with the
Payment Schedule herein Each payment includes interest at the rate
of 3 65% per annum on the unpaid principal balance based upon an
initial principal equal to the Financing Amount shown in Section D
G Payment Schedule Payable semi annually in #03 059
arrears
I PMT Due Date (1) Rental (2) Purchase To To
# Payment Option Principal Interest
1 $137 070 99 1 829 154 24 $102 630 12 34 440 87
2 137 070 99 1 722 038 54 104 503 12 32 567 87
3 137 070 99 1 612 967 98 106 410 30 30 660 69
4 137 070 99 1 501 906 89 108 352 29 28 718 70
5 137 070 99 1 388 818 92 110 329 72 26 741 27
6 137 070 99 1 273 667 10 112 343 24 24 727 75
7 137 070 99 1 156 413 76 114 393 50 22 677 49
8 137 070 99 1 037 020 55 116 481 18 20 589 81
9 137 070 99 915 448 41 118 506 97 18 464 02
10 137 070 99 791 657 58 120 771 54 16 299 45
11 137 070 99 665 607 57 122 975 62 14 095 37
12 137 070 99 537 257 14 125 219 93 11 851 06
13 137 070 99 406 564 32 127 505 19 9 565 80
14 137 070 99 273 486 36 129 832 16 7 238 83
15 137 070 99 137 979 72 132 201 60 4 869 39
16 137, 070 . 99 0 00 134 , 614 36 2, 456 . 63
TOTALS $2, 193, 135 . 34 $1 887 170 84 t3_9_5_,_.9_6_5_10
(1) Refer to the paragraph in the Lease entitled Release of Liens
(2) Refer to the paragraph in the Lease entitled Purchase Option and
Release of Liens Purchase options are in addition to the rental
payment due on the same day
Approved and agreed
co
MUNICIPAL FINANCE CORPORATION COSTA MESA SANITARY DISTR_CT
(lessor) s e)
By B. JA l 6,2nyug.
Arlene Schafer
Title . Title President
Date Date August 14 2003
By James F ym i
U!1 e ryman
Title Secretary
Date August 14, 2003
ASSIGNMENT OF LEASE #03 059
FOR VALUE RECEIVED MUNICIPAL FINANCE CORPORATION ( Corporation )
as assignor without recourse does hereby sell assign and transfer to
CITIZENS BUSINESS BANK ( Assignee ) as assignee and its successors and
assigns (i) all of its right title and interest in and to the
attached Lease with Option to Purchase #03 059 dated August 14 2003
between Corporation as lessor and COSTA MESA SANITARY DISTRICT
( 'Lessee ) as Lessee (hereinafter said lease and any supplements
amendments additions thereof and any extension or renewals thereof is
referred to as the Lease ) and the Property subject to the Lease and
(ii) all moneys sums and amounts now due or hereinafter to become due
under the Lease Corporation represents that the Lease and Lease
Schedule (s) delivered to Assignee are one of two duly executed
duplicate originals that the duplicate originals comprise the entire
writing obligation and agreement between Corporation and Lessee and
that the holder of the second duly executed original of the Lease and
Lease Schedule (s) is Lessee
Corporation further represents and warrants that it has made no
prior sale or assignment of any interest covered hereby that the
Lease is genuine and in all respects is what it purports to be that
Assignee shall not be liable for and does not assume responsibility
for the performance of any of the covenants agreements or
obligations specified in the Lease to be kept paid or performed by
Corporation with exception of Assignee s obligation to issue notices
upon Lessee ' s default of the Lease and to convey title to the leased
Property upon Lessee s exercise of its option to purchase said
Property in conformance with the terms of the Lease Corporation
further represents and warrants that as of the date this assignment is
made the Lease is in full force and effect has not been amended
except as set forth in instrument delivered to Assignee and Lessee is
not in default of any terms thereunder
Corporation hereby constitutes and irrevocably appoints Assignee
the true and lawful attorney of Corporation to demand receive and
endorse payments and to give receipts releases and satisfactions
either in the name of Assignee or in the name of Corporation in the
same manner and with the same effect as Corporation could do if this
Assignment of Lease had not been made Within fifteen (15) days after
receiving its full bargain with respect to each Schedule covered
hereby Assignee shall cause to be released to Lessee its vested
interest in the Property thereto
This Assignment of Lease shall be construed and governed in
accordance with the laws of the State of California Any provision of
this Assignment of Lease found to be prohibited by law shall be
ineffective only to the extent of such prohibition and shall not
invalidate the remainder of this Assignment of Lease
This Assignment shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns and is made in
accordance with the Municipal Lease Placement Agreement dated as of
January 1 1999 as amended entered into between Corporation and
Assignee In the case of litigation the prevailing party shall be
entitled to recover from the opposing party all costs and expenses,
including attorneys ' fees which may be the allocable cost of in house
counsel incurred by the prevailing party in exercising any of its
rights or remedies hereunder or enforcing any of the terms
conditions or provisions hereof
IN WITNESS WHEREOF Corporation has caused this Assignment of
Lease to be executed by its duly authorized agent on the date
specified below
MUNICIPAL FINANCE CORPORATION
(assignor)
By
Title
Date
ACKNOWLEDGEMENT OF ASSIGNMENT
The undersigned hereby acknowledges the assignment by MUNICIPAL
FINANCE CORPORATION over to CITIZENS BUSINESS BANK of that certain
Lease with Option to Purchase #03 059 dated as of August 14 2003 (the
Lease ) entered into between MUNICIPAL FINANCE CORPORATION as lessor
and the undersigned as lessee
With respect to the Lease the undersigned agrees to pay
commencing with the first scheduled Rental Payment all rentals and
moneys due or to become due under said Lease to CITIZENS BUSINESS
BANK, 701 North Haven Avenue Suite 350 Ontario CA 91764 and further
agrees it shall have no counterclaim or offset against rentals due
thereunder as to said Assignee and expressly further agrees that said
Assignee shall not (except for the obligations specifically set forth
in the foregoing Assignment of Lease) be liable for any of the
obligations or burdens of the lessor under said Lease
IN WITNESS WHEREOF the lessee has caused this Acknowledgment of
Assignment to be executed by its authorized agent on the date
specified below
COSTA MESA SANITARY DISTRICT
(le -e) i
By By I/ A _Lei, .
James err an Ar ene cha er
Title Secretary Title President
Date August 14 2003 Date August 14, 2003
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ARBITRAGE CERTIFICATE #03-059
I certify that I am a duly authorized officer of the
Costa Mesa Sanitary District (the Lessee ) and that in my
official capacity as such officer I am responsible for executing
and delivering on behalf of the Lessee the Lease with Option to
Purchase #03 059 dated as of Dat (the Lease ) by and between
Municipal Leasing Associates Inc as lessor (the Corporation )
and the Lessee as lessee This Certificate is being issued
pursuant to Section 148 of the Internal Revenue Code of 1986 (the
Code ) and Treasury Regulations promulgated thereunder (the
Regulations ) The following facts estimates and circumstances
are in existence on the date of this Certificate or are
reasonably expected to occur hereafter
1 Under the Lease the Corporation is required to
lease and sell certain property (the Property ) described in
Lease Schedule #03-059 (the Schedule ) to the Lessee and the
Lessee is required to lease and purchase the Property from the
Corporation by making Rental Payments with respect thereto
comprising principal and interest on the dates and in the
amounts set forth in the Schedule
2 Pursuant to the Lease and for the purpose of meeting
its obligations thereunder and assuring the Lessee of the
availability of moneys needed to pay the cost of refinancing the
Property by paying the purchase option price under the Lessee s
present lease obligation (the Refunded Lease ) the Corporation
has assigned all of its rights in and to the Lease and the Rental
Payments due thereunder to Citizens Business Bank (the
Assignee ) pursuant to Assignment of Lease #03 059 dated as of
August 14 2003
3 On the date hereof the Assignee will pay not less
than $1 887 170 84 for the Lease to pay the cost of refinancing
the Property
4 The Lessee expended all of the proceeds of the
Refunded Lease to pay the cost of the Property and costs of
issuance of the Refunded Lease by October 15 2002
5 All of the spendable proceeds of the Lease will be
expended on the costs of refinancing of the Property and costs of
issuance of the Lease on the date hereof
6 The original proceeds of the Lease do not exceed or
in any event do not exceed by more than 5% the amount necessary
for the governmental purpose for which the Lease is entered into
7 No sinking fund will be maintained for the payment
of the Rental Payments due under the Lease
8 The Property has not been and is not expected
during the term of the Lease to be sold or otherwise disposed of
by the Lessee
9 To the best of the knowledge and belief of the
undersigned the expectations of the Lessee as set forth above
are reasonable and there are no present facts estimates and
circumstances which would change the foregoing expectations
10 The Lessee has not been notified of the listing or
proposed listing of it by the Internal Revenue Service as an
issuer whose arbitrage certificates may not be relied upon
COSTP,/M SA SANIT• \Y DI• TRIC,
By l
rlene c a er
Title President
Date August 14, 2003
By dames Fe yman
Title Secretary
Date August 14, 2003
2
Transfer of Legal Title #92 109 01
City National Bank ( Bank ) holds legal title to the property
described on schedule #01-074 AF of Lease with Option to Purchase
dated July 12 2002 ( Lease ) made with COSTA MESA SANITARY DISTRICT
as lessee In consideration of the Bank receiving its full bargain for
prepayment of the Lease as of and pursuant to
the direction and authority given the bank by COSTA MESA SANITARY
DISTRICT the Bank hereby transfers to MUNICIPAL °INANCE CORPORATION
free and clear of any liens or encumbrances all rights interests and
legal title to the property that is stipulated on attached schedule
#01 074 AF and generally described below
Roll out carts (approximately 44 000)
CITY NATIONAL BANK COST SA ANITAR DI TRI T
By BY I A.
Title Arlene Schafer
Title
Date _ Date August 14, 2003
By
James Ffe7r7mrrt
Title Secretary
Date August 14, 2003
AUTHORIZATION TO DISBURSE AND CERTI=ICATION
OF VALUE RECEIVED #03-059
Pursuant to the terms of Section 6 of that certain Lease with Option
to Purchase dated August 14 2003 between MUNICIPAL FINANCE
CORPORATION ( Corporation ) and COSTA MESA SANITARY DISTRICT
( Lessee ) the undersigned hereby authorizes the Corporation or its
assignee to disburse $1 887 170 84 to C_ty National Bank in
consideration of refunding Lease with Option to Purchase dated July
12 2001 ( Lease ) The total Rental Payment due on
in the amount of $140 591 00 for Lease Schedule
#01 074 AF will be paid directly by the Lessee to City National Bank
on or before said due date
COSTA ES SANITAec�C D STRRICT
By •n �J\ Y7� s Oti/
Arlene Schafer
Title Pr-sident
Date August 14, 2003
---B _
By —
ames rerryma
Title Secretary
Date August 14, 2003