R 4453 RESOLUTION NO. 4453
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE APPROVING THE LEASE
PURCHASE AGREEMENT BETWEEN THE CITY OF
ARROYO GRANDE AND KANSAS STATE BANK OF
MANHATTAN FOR THE PURCHASE OF A SEWER
VACTOR TRUCK
WHEREAS, the City Council has determined that a true and very real need exists for
the acquisition of the equipment described on Exhibit A of the Government Obligation
Contract dated as of May 16, 2012, between the City of Arroyo Grande, California
(Obligor) and Kansas State Bank of Manhattan (Obligee); and
WHEREAS, the City Council has determined that the Contract, substantially in the form
presented to this meeting, is in the best interests of the City for the acquisition of such
equipment, and the City Council hereby approves the entering into of the Contract by
the Obligor and hereby designates and authorizes the following person to execute and
deliver the contract on the Obligor's behalf with such changes thereto as such person
deems appropriate, and any related documents, including any Escrow Contract,
necessary to the consummation of the transaction contemplated by the Contract.
Authorized Individual: Steven Adams. City Manager
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby determine that a true and very real need exists for the acquisition
of the equipment described on Exhibit A of the Government Obligation Contract dated
as of May 16, 2012, between the City of Arroyo Grande, California and Kansas State
Bank of Manhattan and has determined that the Contract, substantially in the form
presented to this meeting, is in the best interests of the City for the acquisition of such
equipment, and the City Council hereby approves the entering into of the Contract by
the City and hereby designates and authorizes the City Manager to execute and deliver
the contract on the City's behalf.
On motion of Council Member Ray, seconded by Council Member Brown, and on the
following roll call vote, to wit:
AYES: Council Members Ray, Brown, Guthrie, and Mayor Ferrara
NOES: None
ABSENT: Council Member Costello
the foregoing Resolution was passed and adopted this 12th day of June 2012.
RESOLUTION NO. 81`153
PAGE 2
r
TONY FE , MAYOR
ATTEST:
/1111/t ! ` , gA
KELLY ET ;PRE, CITY CLERK
APPROVED AS TO CONTENT:
STEV N ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TI THY J EL, CITY ATTORNEY
EXHIBIT A
CA Standard 051612
GOVERNMENT OBLIGATION CONTRACT
Obligor Obligee
City of Arroyo Grande, California Kansas State Bank of Manhattan
300 E. Branch Street 1010 Westloop, P.O.Box 69
Arroyo Grande, California 93420 Manhattan, Kansas 66505-0069
Dated as of May 16,2012
This Government Obligation Contract dated as of the date listed above Is between Obligee and Obligor listed directly above. Obligee desires to finance the purchase of the
Equipment described In Exhibit'A'to Obligor and Obligor desires to finance the purchase of the Equipment from Obligee subject to the terms and conditions of this Contract
which are set forth below.
I. Definitions:
Section 1.01. Definition. The following terms will have the meanings Indicated below unless the context deafly requires otherwise'
-Additional Schedule"refers to the proper execution of additional Schedules to Exhibit A.Exhibit B.Exhibit C and Exhibit 0 as well as other exhibits or documents that may be
required by the Obligee all of which relate to a financing of additional Equipment
"Budget Year'means the Obligors fiscal year
'Commencement Date'is the date when Obligors obligation to pay Contract Payments begins.
'Contract'means this Government Obligation Contract.all Exhibits,and all documents relied upon by Obligee prior to execution of this Contract
"Contract Payments"means the payments Obligor is required to make under this Contract as set forth on Exhibit"B"
'Contract Term'means the Original Term and all Renewal Terms.
"Equipment"means all of the Items of Equipment listed on Exhibit"A"and all replacements,restorations,modifications and improvements.
'Government'as used in the title hereof means a State or a political subdivision of the State within the meaning of Section 103(a)of the Internal Revenue Code 011986,as
emended("Coda"),ore constituted authonty or distnct authorized to issue obligations of on behalf of the State or political subdivision of the State within the meaning of
Treasury Regulation 1.103-1(b),ore qualified volunteer fire company within the meaning of section 150(e)(1)of the Code
"Obligee means the entity originally listed above as Obligee or any of its assignees.
"Obligor"means the entity listed above as Obligor and which is financing the Equipment from Obligee under the provisions of this Contract
"Onginal Term"means the period from the Commencement Date until the end of the Budget Year of Obligor.
"Renewal Term"means the annual term which begins at the end of the Original Term and which Is simultaneous with Obligors Budget Year
"State"means the state in which Obligor is located.
II. Obligor Warranties
5ectIon 2 01 Obllaor represents.warrants and covenants as follows for the benefit of Obligee or Its asslanee8:
(a) Obligor is an"Issuer of tax exempt obligations"because Obligor Is the State ore political subdivision of the State within the meaning of Section 103(a)of the Internal
Revenue Code 011986,as amended,(the"Code")or because Obligor is a constituted authority or district authorized to issue obligations on behalf of the State or political
subdivision of the State within the meaning of Treasury Regulation 1.103-1(b)
(b) Obligor is authorized under the Constitution and laws of the State to enter Into this Contract,and has used such authority to properly execute and deliver this Contract.
Obligor has followed all proper procedures of its governing body in executing this Contract. The Officer of Obligor executing this Contract has the authority to execute and
deliver this Contract, This Contract constitutes a legal.valid,binding and enforceable obligation of the Obligor In accordance with its terms.
(e) Obligor has complied with all statutory laws and regulations that may be applicable to the execution of this Contract.
(d) Obligor shall use the Equipment only for essential,traditional government purposes.
(e) Should the IRS disallow the tax-exempt status of the Interest Portion of the Contract Payments as a result of the failure of the Obligor to use the Equipment for
governmental purposes,then Obligor shall be required to pay additional sums to the Obligee or its assignees so as to bring the after tax yield to the same level as the
Obligee or Its assignees would attain if the transaction continued to be tax-exempt
(f) Should the Obligor cease to be an Issuer of tax exempt obligations or if the obligation of Obligor created under this Contract ceases to be a tax exempt obligation for any
reason,then Obligor shall be required to pay additional sums to the Obligee or its assignees so as to bring the after tax yield on this Contract to the same level as the
Obligee or its assignees would attain if the transaction continued to be tax-exempt.
(g) Obligor has never non-appropriated funds under an Contract similar to this Contract.
(h) Obligor will submit to the Secretary of the Treasury an Information reporting statement as required by the Code.
(I) Upon request by Obligee,Obligor will provide Obligee with current financial statements,reports,budgets or other relevant fiscal information
(1) Obligor shall retain the Equipment free of any hazardous substances as defined in the Comprehensive Environmental Response,Compensation and Liability Act,42
U S C.9601 et,sect as amended and supplemented
(k) Obligor presently Intends to continue this Contract for the Original Term and ail Renewal Terms as set forth on Exhibit"B'hereto. The official of Obligor responsible for
budget preparation will Include In the budget request for each Budget Year the Contract Payments to become due In such Budget year,and will use all reasonable and
lawful means available to secure the appropriation of money for such Budget Year sufficient to pay the Contract Payments coming due therein. Obligor reasonably
believes that moneys can and will lawfully be appropriated and made available for this purpose
,Section 2.02. Escrow Contract In the event both Obligee and Obligor mutually agree to utilize an Escrow Account,than Immediately following the execution and delivery of
this Contract,Obligee and Obligor agree to execute and deliver and to cause Escrow Agent to execute end deliver the Escrow Contract. This Contract shall take effect only
upon execution and delivery of the Escrow Contract by the parties thereto Obligee shall deposit or cause to be deposited with the Escrow agent for credit to the Equipment
Acquisition Fund the sum of$E12,,which shall be held,invested and disbursed in accordance with the Escrow Contract.
111. Acquisition of Equipment.Contract Payments and the Purchase Option Price
Section 3.01 Acquisition and Acceptance. Obligor shall be solely responsible for the ordering of the Equipment and for the delivery and installation of the Equipment.
Execution of the Acceptance Certificate by an employee,official or agent of the Obligor having managenal,supervisory or procurement authority with respect to the Equipment
shall constitute acceptance of the Equipment on behalf of the Obligor.
Section 3.02. Contract Pavment4 Obligor shall pay Contract Payments exclusively to Obligee or its assignees in lawful,legally available money of the United States of
America. The Contract Payments shall be sent to the location specified by the Obligee or its assignees The Contract Payments shall constitute a current expense Of the
Obligor and shall not constitute an indebtedness of the Obligor The Contract Payments are due as set forth on Exhibit B. Obligee shall have the option to charge interest at
the highest lawful rate on any Contract Payment received later than the due date for the number of days that the Contract Payment(s)were late,plus any additional accrual on
the outstanding balance for the number of days that the Contract Payment(s)were late. Obligee shall also have the option,on monthly payments only,to charge a late fee of
up to 10%of the monthly Contract Payment that Is past due. The Contract Payments will be payable without notice or demand.Furthermore.Obligor agrees to pay any
additional fees/costs incurred by Obligee relating to Obligors requirement that a certain payment mechanism be utilized.
section 3.03 Contract Payments Unconditional. Except as provided under Section 4.01,THE OBLIGATIONS OF OBLIGOR TO MAKE CONTRACT PAYMENTS AND TO
PERFORM AND OBSERVE THE OTHER COVENANTS CONTAINED IN THIS CONTRACT SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT
ABATEMENT,DIMINUTION,DEDUCTION,SET-OFF OR DEFENSE
section 3.04 Purchase Option Pnce. Upon thirty(30)days written notice, Obligor shall have the option to pay, In addition to the Contract Payment, the corresponding
Purchase Option Price which is listed on the same line on Exhibit B This option Is only available to the Obligor on the Contract Payment date and no partial prepayments are
allowed If Obligor chooses this option and pays the Purchase Option Price to Obligee then Obligee will transfer any and all of Its rights,title and interest in the Equipment to
Obligor
Section 3.05. Contract Term, The Contract Term of the Contract shall be the Original Term and all Renewal Terms until all the Contract Payments are paid as set forth on
Exhibit B except as provided under Section 4.01 and Section 9.01 below If,after the end of the budgeting process which occurs at the end of the Original Term or any
Renewal Term,Obligor has not non-appropriated as provided for in this Contract then the Contract Term shall be extended Into the next Renewal Term and the Obligor shall be
obligated to make all the Contract Payments that come due dunng such Renewal Term.
Beam 3.06. Disclaimer of Warranties OBLIGEE MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN,
CONDITION,MERCHANTABILITY.FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER WARRANTY WITH RESPECT TO THE EQUIPMENT. OBLIGEE SHALL NOT
BE LIABLE FOR ANY INCIDENTAL, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGE ARISING OUT OF THE INSTALLATION, OPERATION. POSSESSION,
STORAGE OR USE OF THE EQUIPMENT BY OBLIGOR
IV. Non-Appropriation
Section 4 01 Non-Aporoanatiort If Insufficient funds are available in Obligor's budget for the next Budget Year to make the Contract Payments for the next Renewal Term and
the funds to make such Contract Payments are otherwise unavailable by any lawful means whatsoever,then Obligor shall have the option to non-appropriate the funds to pay
the Contract Payments for the next Renewal Term. Lack of a sufficient appropriation shell be evidenced by the passage of an ordinance or resolution by the governing body of
Obligor specifically prohibiting Obligor from performing Its obligations under this Contract and from using any moneys to pay the Contract Payments due under this Contract for
a designated Budget Year and all subsequent Budget Years If Obligor chooses this option,then all obligations of the Obligor under this Contract regarding Contract Payments
for all remaining Renewal Terms shall be terminated at the end of the then current Original Term or Renewal Term without penalty or liability to the Obligor of any kind provided
that if Obligor has not delivered possession of the Equipment to Obligee as provided herein and conveyed to Obligee or released Its Interest In the Equipment by the end of the
last Budget Year for which Contract Payments were paid,the termination shall nevertheless be effective but Obligor shall be responsible for the payment of damages in an
amount equal to the amount of the Contract Payments thereafter coming due under Exhibit'13'which are attnbutable to the number of days after such Budget Year during
which Obligor fails to take such actions and for any other loss suffered by Obligee as a result of Obligor's failure to take such actions as required Obligor shall Immediately
notify the Obligee as soon as the decision to non-appropriate is made. If such non-appropriation occurs,then Obligor shall deliver the Equipment to Obligee as provided below
In Section 9.04. Obligor shall be liable for all damage to the Equipment other than normal wear and tear. If Obligor falls to deliver the Equipment to Obligee,then Obligee may
enter the premises where the Equipment Is located and take possession of the Equipment and charge Obligor for costs incurred
V. Insurance,Damage,Insufficiency of Proceeds
Section 5 01 insurance Obligor shall maintain both casualty insurance and liability Insurance at Its own expense with respect to the Equipment Obligor shall be solely
responsible for selecting the insurers)and for making all premium payments and ensuring that all policies are continuously kept in effect during the period when Obligor is
required to make Contract Payments. Obligor shall provide Obligee with a Certificate of Insurance which lists the Obligee and/or assigns as a loss payee and an additional
Insured on the policies with respect to the Equipment.
(a) Obligor shall insure the Equipment against any 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 Obligee In en amount at least equal to the then applicable Purchase Option Price of the Equipment Alternatively.
Obligor may insure the Equipment under a blanket insurance policy or policies
(b) The liability insurance shall insure Obligee from liability and property damage in any form and amount satisfactory to Obligee.
(e) Obligor may self-Insure against the casualty risks and liability risks described above. If Obligor chooses this option,Obligor must furnish Obligee with a certificate
and/or other documents which evidences such coverage.
(d) All insurance policies issued or affected by this Section shall be so written or endorsed such that the Obligee and its assignees are named additional insureds and
loss payees and that all losses are payable to Obligor and Obligee or Its assignees as their interests may appear. Each policy issued or affected by this Section
shall contain a provision that the insurance company shall not cancel or materially modify the policy without first giving thirty(30)days advance notice to Obligee or
its assignees. Obligor shall furnish to Obligee certificates evidencing such coverage throughout the Contract Term
Section 5 02 Damage to or Destruction of Eaulomenf Obligor assumes the risk of loss or damage to the Equipment. If the Equipment or any portion thereof is lost,stolen.
damaged,or destroyed by fire or other casualty,Obligor will Immediately report all such losses to all possible insurers and take the proper procedures to attain all insurance
proceeds At the option of Obligee,Obligor shall either(1)apply the Net Proceeds to replace,repair or restore the Equipment or(2)apply the Net Proceeds to the applicable
Purchase Option Pnce. For purposes of this Section and Section 5.03,the term Net Proceeds shall mean the amount of insurance proceeds collected from all applicable
Insurance policies after deducting all expenses Incurred In the collection thereof.
Section 5.03 insufficiency of Net Proceeds. If there are no Net Proceeds for whatever reason or If the Net Proceeds are Insufficient to pay In full the cost of any replacement,
repair, restoration, modification or improvement of the Equipment, then Obligor shall, at the option of Obligee, either(1)complete such replacement. repair, restoration,
modification or Improvement and pay any costs thereof In excess of the amount of the Net Proceeds or(2)apply the Net Proceeds to the Purchase Option Price and pay the
deficiency,If any,to the Obligee
Section 5.04. Obligor Neallaence, Obligor assumes all risks and liabilities,whether or not covered by Insurance,for loss or damage to the Equipment and for injury to or death
of any parson or damage to any property whether such injury or death be with respect to agents or employees of Obligor or of third parties,and whether such property damage
be to Obligors property or the property of others(Including,without limitation,liabilities for loss or damage related to the release or threatened release of hazardous substances
under the Comprehensive Environmental Response,Compensation and Liability Act,the Resource Conservation and Recovery Act or similar or successor law or any State or
local equivalent now existing or hereinafter enacted which in any manner arise out of or are incident to any possession,use,operation,condition or storage of any Equipment
by Obligor)which Is proximately caused by the negligent conduct of Obligor. Its officers,employees and agents. Obligor hereby assumes responsibility for and agrees to
reimburse Obligee for all liabilities,obligations,losses,damages,penalties,claims,actions,costs and expenses(including reasonable attorneys'fees)of whatsoever kind and
nature,imposed on,Incurred by or asserted against Obligee that In any way relate to or arise out of a claim,suit or proceeding,based In whole or in part upon the negligent
conduct of Obligor,Its officers,employees and agents,to the maximum extent permitted by law
VI. Title and Security Interest
Section 6.01. Tllle. Title to the Equipment shall vest In Obligor when Obligor acquires and accepts the Equipment. Title to the Equipment will automatically transfer to the
Obligee In the event Obligor nonappropnates under Section 4 01 or in the event Obligor defaults under Section 9 01. In either of such events,Obligor shall execute and deliver
to Obligee such documents as Obligee may request to evidence the passage of legal title to the Equipment to Obligee
Section 6.02 Security Interest To secure the payment of all Obligors obligations under this Contract,as well as all other obligations,debts and liabilities,whether now
existing or subsequently created.Obligor hereby grants to Obligee a security Interest under the Uniform Commercial Code constituting a first lien on the Equipment described
more fully on Exhibit'A'.Furthermore,Obligor agrees that any and all Equipment listed on any other Exhibit A,whether prior to or subsequent hereto,secures all obligations,
debts and liabilities of every kind and character,plus interest thereon,whether now existing or hereafter arising, Obligor agrees that any Equipment listed on Exhibit'A'will
remain personal property and will not become a fixture even if attached to real property The security interest established by this section includes not only additions,
attachments,repairs and replacements,to the Equipment but also all proceeds therefrom. Obligor authorizes Obligee to prepare and record any Financing Statement required
under the Uniform Commercial Code to perfect the security interest created hereunder.
VII. Assignment
Section 7.01. Asslanment by Obliaea All of Obligee's rights,title and/or Interest in and to this Contract may be assigned and reassigned in whole or in part to one or more
assignees or sub-assignees(including a Registered Owner for Participation Certificates)by Obligee at any time without the consent of Obligor No such assignment shall be
effective as against Obligor until the assignor shall have filed with Obligor written notice of assignment identifying the assignee Obligor shall pay all Contract Payments due
hereunder relating to such Equipment to or at the direction of Obligee or the assignee named In the notice of assignment. Obligor shall keep a complete and accurate record of
all such assignments.
Section 7.02. Aselanment by Obliao( None of Obligor's nght,title and Interest under this Contract and In the Equipment may be assigned by Obligor unless Obligee approves
of such assignment in writing before such assignment occurs and only after Obligor first obtains an opinion from nationally recognized counsel stating that such assignment will
not jeopardize the tax-exempt status of the obligation.
VIII. Maintenance of Equipment
Section 801, Obligor shall keep the Equipment In good repair and working order. Obligee shall have no obligation to inspect, test, service, maintain, repair or make
Improvements or additions to the Equipment under any circumstances Obligor will be liable for all damage to the Equipment,other than normal wear and tear,caused by
Obligor.Its employees or Its agents Obligor shall pay for and obtain all permits,licenses and taxes necessary for the Installation,operation,possession,storage or use of the
Equipment If the Equipment includes any titled vehide(s),then Obligor Is responsible for obtaining such title(s)from the State and also for ensuring that Obligee Is listed as
First Lienholder on all of the title(s). If any fees are required to be paid by the California Debt&Investment Advisory Commission then such fees shall be paid directly from the
Obligor to the California Debt 8 Investment Advisory Commission. Obligor shall not during the term of this Contract create,incur or assume any levies,liens or encumbrances
of any kind with respect to the Equipment except those created by this Contract.Obligor agrees that Obligee or its Assignee may execute any additional documents including
financing statements,affidavits,notices,and similar instruments,for and on behalf of Obligor which Obligee deems necessary or appropriate to protect Obligee's Interest in the
Equipment and in this Contract.The Equipment is and shell at all times be and remain personal property. Obligor shall allow Obligee to examine and inspect the Equipment at
all reasonable times.
Ix. Default
Section 9.01. Events of Default defined. The following events shall constitute an"Event of Default"under this Contract
(a) Failure by Obligor to pay any Contract Payment listed on Exhibit"B"for fifteen(15)days after such payment Is due according to the Payment Date listed on Exhibit
"B'
(b) Failure to pay any other payment required to be paid under this Contract at the time specified herein and a continuation of said(allure for a period of fifteen(15)
days after written notice by Obligee that such payment must be made If Obligor continues to fall to pay any payment after such period,then Obligee may,but will
not be obligated to,make such payments and charge Obligor for all costs incurred plus interest at the highest lawful rate
(e) Failure by Obligor to observe and perform any warranty,covenant,condition,promise or duly under this Contract for a period of thirty(30)days after written notice
specifying such failure is given to Obligor by Obligee.unless Obligee agrees In writing to an extension of time. Obligee will not unreasonably withhold its consent to
an extension of time if corrective action is Instituted by Obligor. Subsection(e)does not apply to Contract Payments and other payments discussed above.
(d) Any statement,matenal omission,representation or warranty made by Obligor In or pursuant to this Contract which proves to be false,incorrect or misleading on the
date when made regardless of Obligor's intent and which materially adversely effects the rights or security of Obligee under this Contract.
(e) Any provision of this Contract which ceases to be valid for whatever reason and the loss of such provision would materially adversely effect the rights or security of
Obligee
(1) Obligor admits in wnting its inability to pay its obligations Obligor defaults on one or more of Its other obligations. Obligor applies or consents to the appointment of
a receiver or a custodian to manage Its affairs. Obligor makes a general assignment for the benefit of creditors.
section 9.02. Remedies on Default Whenever any Event of Default exists,Obligee shall have the right to take one or any combination of the following remedial steps.
(a) With or without terminating this Contract,Obligee may declare all Contract Payments and other amounts payable by Obligor hereunder to the end of the then current
Budget Year to be immediately due and payable
(b) With or without terminating this Contract,Obligee may require Obligor at Obligor's expense to redeliver any or all of the Equipment to Obligee as provided below in
Section 9 04 Such delivery shall take place within fifteen(15)days after the event of default occurs.If Obligor fails to deliver the Equipment,Obligee may enter the
premises where the Equipment is located and take possession of the Equipment and charge Obligor for cost incurred. Notwithstanding that Obligee has taken
possession of the Equipment, Obligor shall still be obligated to pay the remaining Contract Payments due up until the end of the then current Original Term or
Renewal Term. Obligor will be liable for any damage to the Equipment caused by Obligor or its employees or agents
(c) Obligee may take whatever action at law or in equity that may appear necessary or desirable to enforce its rights Obligor shall be responsible to Obligee for all
costs Incurred by Obligee in the enforcement of its rights under this Contract including,but not limited to,reasonable attorney fees.
Section 9.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Obligee is intended to be exclusive and every such remedy shall be cumulative and shall
be in addition to every other remedy given under this Contract now or hereafter existing at law or in equity. No delay or omission to exercise any nght or power accruing upon
any default shall impair any such right or shell be construed to be a waiver thereof
Section 9 04 Return of Eauloment and Storage,
(a) Surrender, The Obligor shall, at Its own expense, surrender the Equipment to the Obligee in the event of a default or a non-appropriation by delivering the
Equipment to the Obligee to a location accessible by common carrier and designated by Obligee In the ease that any of the Equipment consists of software.
Obligor shall destroy all intangible items constituting such software and shall deliver to Obligee all tangible items constituting such software At Obligees request,
Obligor shall also certify in a form acceptable to Obligee that Obligor has complied with the above software return provisions and that they will immediately cease
using the software and that they shall permit Obligee end/or the vendor of the software to inspect Obligor's locations to verify compliance with the terms hereto.
(b) Delivery'The Equipment shall be delivered to the location designated by the Obligee by a common carrier unless the Obligee agrees in writing that a common
tamer is not needed When the Equipment is delivered into the custody of a common carrier,the Obligor shall arrange for the shipping of the item and its insurance
in transit in accordance with the Obligee's instructions and at the Obligors sole expense Obligor at its expense shall completely sever and disconnect the
Equipment or its component parts from the Obligor's property all without liability to the Obligee Obligor shall pack or crate the Equipment and all of the component
parts of the Equipment carefully and in accordance with any recommendations of the manufacturer The Obligor shall deliver to the Obligee the plans,specifications
operation manuals or other warranties and documents furnished by the manufacturer or vendor on the Equipment and such other documents in the Obligor's
possession relating to the maintenance and methods of operation of such Equipment.
(c) Condition When the Equipment is surrendered to the Obligee it shall be in the condition and repair required to be maintained under this Contract. It will also meet
all legal regulatory conditions necessary for the Obligee to sell or lease it to a third party and be free of all liens, If Obligee reasonably determines that the
Equipment or an item of the Equipment,once it Is returned,is not In the condition required hereby,Obligee may cause the repair,service,upgrade,modification or
overhaul of the Equipment or an item of the Equipment to achieve such condition and upon demand,Obligor shall promptly reimburse Obligee for all amounts
reasonably expended in connection with the foregoing.
(d) Storage.Upon written request by the Obligee,the Obligor shall provide free storage for the Equipment or any item of the Equipment for a period not to exceed 80
days after the expiration of its Contract Term before returning it to the Obligee The Obligor shall arrange for the insurance described to continue in full force and
effect with respect to such item dunng its storage period and the Obligee shall reimburse the Obligor on demand for the Incremental premium cost of providing such
insurance
X. Miscellaneous
section 10 01. Notice All notices shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail,postage prepaid,to the parties at their
respective places of business as first set forth herein ores the parties shall designate hereafter In writing
section 10.02. Blndlna Effect Obligor acknowledges this Contract Is not binding upon the Obligee or its assignees unless the Conditions to Funding listed on the
Documentation Instructions have been met to Obligee's satisfaction,and Obligee has executed the Contract Thereafter,this Contract shall Inure to the benefit of and shall be
binding upon Obligee and Obligor and their respective successors and assigns.
Section 10 03 Severablllty In the event any provision of this Contract 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 10.04. Amendments.Addenda Chancres or Modification. This Contract may be amended,added to,changed or modified by written Contract duly executed by
Obligee and Obligor. Furthermore,Obligee reserves the right to charge Obligor a fee,to be determined at that time,as compensation to Obligee for the additional
administrative expense resulting from such amendment,addenda,change or modification.
Section 10.05. Execution in Counterparts This Contract 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 10.06. Captions The captions or headings in this Contract do not define,limit or describe the scope or intent of any provisions or sections of this Contract
Section 10 07 Master Contract This Contract can be utilized as a Master Contract. This means that the Obligee and the Obligor may agree to the financing of additional
Equipment under this Contract at some point in the future by executing one or more Additional Schedules to Exhibit A, Exhibit B, Exhibit C and Exhibit D as well as other
exhibits or documents that may be required by Obligee Additional Schedules will be consecutively numbered on each of the exhibits which make up the Additional Schedule
and all the terms and conditions of the Contract shall govern each Additional Schedule
Section 10.08. Entire Writing. This Contract constitutes the entire writing between Obligee and Obligor No waiver,consent,modification or change of terms of this Contract
shall bind either party unless in writing and signed by both parties,and then such waiver,consent,modification or change shall be effective only in the specific Instance and for
the specific purpose given. There are no understandings,Contracts,representations,conditions,or warranties,express or implied,which are not specified herein regarding this
Contract or the Equipment financed hereunder.Any terms and conditions of any purchase order or other documents submitted by Obligor in connection with this Contract which
are in addition to or inconsistent with the terms and conditions of this Contract will not be binding on Obligee and will not apply to this Contract
Obligee and Obligor have caused this Contract to be executed in their names by their duly authorized representatives listed below
CITY OF ARROYO GRANDE,CALIFORNIA KANSAS STATE BANK OF MANHATTAN
Signature Signature
Marsha Jarvis.Vice President
Typed Name and Title Typed Name and Title
Schedule (011
EXHIBIT A
DESCRIPTION OF EQUIPMENT
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee)and City of Arroyo Grande.California (Obligor)
Below is a detailed description of all the items of Equipment including quantity, model number and serial number where
applicable:
One(1)2012 Freightliner Vactor 2110 with Jet Rodder,VIN/SN:
Location of Equipment: 1375 Ash Street,Arroyo Grande, CA 93420
Schedule (01)
EXHIBIT B
PAYMENT SCHEDULE
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee)and City of Arroyo Grande.California (Obligor)
Date of First Payment: July 31, 2012
Original Balance: $69,076.68
Total Number of Payments: Five (5)
Number of Payments Per Year: One (1)
Pmt Due Contract Applied to Applied to *Purchase
No. Date Payment Interest Principal Option Price
1 31-Jul-12 $15,001.63 $453.83 $14,547.80 $56,496.98
2 31-Jul-13 $15,001.63 $2,149.52 $12,852.11 $42,882.35
3 31-Jul-14 $15,001.63 $1,642.89 $13,358.74 $28,933.48
4 31-Jul-15 $15,001.63 $1,116.29 $13,885.34 $14,642.17
5 31-Jul-16 $15,001.63 $568.94 $14,432.69 $0.00
City of Arroyo Grande.California
Signature
Typed Name and Title
'Assumes all Contract Payments due to date am paid
Schedule (01)
EXHIBIT C
CERTIFICATE OF ACCEPTANCE
RE: Government Obligation Contract dated as of May 16. 2012, between Kansas State Bank of Manhattan
(Obligee)and City of Arroyo Grande.California (Obligor)
I, the undersigned, hereby certify that I am a duly qualified representative of Obligor and that I have been given the
authority by the Governing Body of Obligor to sign this Certificate of Acceptance with respect to the above referenced
Contract. I hereby certify that:
1. The Equipment described on Exhibit A has been delivered and installed in accordance with Obligor's specifications.
2. Obligor has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and
hereby acknowledges that it accepts the Equipment for all purposes.
3. Obligor has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all
Contract Payments required to be paid under the Contract during the current Budget Year of Obligor, and such
moneys will be applied in payment of all Contract Payments due and payable during such current Budget Year.
4. Obligor has obtained insurance coverage as required under the Contract from an insurer qualified to do business in
the State.
5. No event or condition that constitutes or would constitute an Event of Default exists as of the date hereof.
6. The governing body of Obligor has approved the authorization, execution and delivery of this Contract on its behalf
by the authorized representative of Obligor who signed the Contract.
7. Please list the Source of Funds (Fund Item in Budget)for the Contract Payments that come due under Exhibit B of
this Contract.
City Sewer Fund
If the above Source of Funds is solely a grant type fund, then the Obligor, by signing below, hereby authorizes the
General Fund of the Obligor as a backup source of funds from which the Contract Payments can be made.
City of Arroyo Grande.California
Signature
Typed Name and Title
Schedule (01)
EXHIBIT D
OBLIGOR RESOLUTION
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee)and City of Arroyo Grande.California (Obligor)
At a duly called meeting of the Governing Body of the Obligor (as defined in the Contract) held on
the following resolution was introduced and adopted:
BE IT RESOLVED by the Governing Body of Obligor as follows:
1. Determination of Need. The Governing Body of Obligor has determined that a true and very real need exists for the
acquisition of the Equipment described on Exhibit A of the Government Obligation Contract dated as of May 16, 2012,
between City of Arroyo Grande,California (Obligor)and Kansas State Bank of Manhattan (Obligee).
2. Approval and Authorization. The Governing Body of Obligor has determined that the Contract, substantially in the
form presented to this meeting, is in the best interests of the Obligor for the acquisition of such Equipment, and the
Governing Body hereby approves the entering into of the Contract by the Obligor and hereby designates and
authonzes the following person(s)to execute and deliver the Contract on Obligor's behalf with such changes thereto as
such person(s) deem(s) appropriate, and any related documents, including any Escrow Contract, necessary to the
consummation of the transaction contemplated by the Contract.
Authorized Individuat(e):
(Printed or Typed Name and Title of individual(s)authorized to execute the Contract)
3. Adoption of Resolution. The signatures below from the designated individuals from the Governing Body of the
Obligor evidence the adoption by the Governing Body of this Resolution.
Signature:
(Signature of Secretary, Board Chairman or other member of the Governing Body)
Typed Name&Title
(Typed Name and Title of individual who signed directly above)
Attested By:
(Signature of one additional person who can witness the passage of this Resolution)
Typed Name&Title:
(Typed name of individual who signed directly above)
Schedule (01)
EXHIBIT E
BANK QUALIFIED CERTIFICATE
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee)and City of Arroyo Grande.California,(Obligor)
Whereas, Obligor hereby represents that it is a °Bank Qualified" Issuer for the calendar year in which this Contract is
executed by making the following designations with respect to Section 265 of the Internal Revenue Code. (A "Bank
Qualified Issuer" is an issuer that issues less than ten million ($10,000,000) dollars of tax-exempt obligations during the
calendar year)
Now, therefor, Obligor hereby designates this Contract as follows:
1. Designation as Qualified Tax-Exempt Obligation. Pursuant to Section 265(b)(3)(B)(i) of the Internal Revenue Code
of 1986 as amended (the "Code"), the Obligor hereby specifically designates the Contract as a "qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the Code. In compliance with Section 265(b)(3)(D) of the Code, the
Obligor hereby represents that the Obligor will not designate more than $10,000,000 of obligations issued by the
Obligor in the calendar year during which the Contract is executed and delivered as such "qualified tax-exempt
obligations".
2. Issuance Limitation. In compliance with the requirements of Section 265(b)(3)(C) of the Code, the Obligor hereby
represents that the Obligor(including all subordinate entities of the Obligor within the meaning of Section 265(b)(3)(E)
of the Code) reasonably anticipates not to issue in the calendar year during which the Contract is executed and
delivered, obligations bearing interest exempt from federal income taxation under Section 103 of the Code (other than
"private activity bonds°as defined in Section 141 of the Code) in an amount greater than $10,000,000.
City of Arroyo Grande.California
Signature
Typed Name and Title
I ^
OFFICIAL CERTIFICATION
I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San
Luis Obispo, State of California, do hereby certify under penalty of perjury, that
Resolution No. 4453 is a true, full, and correct copy of said Resolution passed
and adopted at a regular meeting of the City Council/Successor Agency to the
Dissolved Arroyo Grande Redevelopment Agency of the City of Arroyo Grande
on the 12th day of June 2012.
WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 13th
day of June 2012.
KELLY ET O RE, CITY CLERK