HomeMy WebLinkAbout13. Adopt Reso Approving Master Equip Lease for purchase of 7 Transit Buses-DowneylinkAPPROVED BY
To.
MAYOR AND MEMBERS OF THE CITY COUNCIL CITY MANAGER
FROM: OFFICE OF THE CITY MANAGER
BY: ANIL GANDHY, DIRECTOR OF FINANCE & INFORMATION TECHNOLOGY
PAMELA J. PASSOW, DIRECTOR OF PARKS & RECREATION
DATE: JUNE 26, 2018
SUBJECT: PROCUREMENT OF VEHICLES FOR DOWNEYLINK
A. Adopt Resolution NoA RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF DOWNEY APPROVING A MASTER EQUIPMENT LEASE PURCHASE
AGREEMENT AND SCHEDULE OF EQUIPMENT NO. 1 WITH COMMUNITY FIRST
NATIONAL BANK IN CONNECTION WITH THE ACQUISITION OF SEVEN TRANSIT
BUSES
R Approve the Escrow Agreement and Authorize the Mayor to xecu e t e greemen
C. Approve the Tax Compliance Agreement and No Arbitrage Certificate and Authorize the
Mayor to Execute the Agreement
The City operates a fixed route service for the community� Currently, we lease buses from MV
Transportation, Inc. who also operates the fixed route. The City has issued a Request for
Proposals for the operation of DowneyLink and currently needs to procure vehicles for the
operation of the system.
The proposed seven (7) CNG fueled Vehicles meet the California Air Resource Board's more
stringent exhaust emission standards and align with the California heavy-duty engine exhaust
emission standards and would be ideal for the DowneyLink operations.
The DowneyLink provides approximately 260,000 passenger trips per ear. owney in
operates daily from 6:30 a,m. to 6:30 p.m., within the boundary of the City Of Downey, with fo
'I
(4) circulating routes (Northeast, Southeast, Southwest, and Northwest) and service o
weekdays with the exception of designated holidays. During the highest volume of servic
otherwise known as "peak times", six (6) buses are operated with two "tripper" buses addin
additional support to the two busiest routes. Tripper buses follow the regular route and pick u
ir URN
JUNE 26, 2018
PAGE 2
the passengers that are unable to fit in the regular bus. During off peak times (9:00 a.m. to 2:00
p.m), the Southeast and Southwest combine, as well as the Northeast and Northwest routes
combine to make two routes (North and South) and are serviced by two (2) buses. As discussed
above, six (6) buses are needed each day at peak time. In addition to the six (6) buses needed,
an additional bus is needed for the service to be able to repair and maintain the buses and
relieve buses if there is a mechanical issue. Therefore, seven (7) buses are needed in total for
the Downeyl-ink operations.
The seven (7) buses are offered based upon the CalACT Heavy Duty bus bid from Creative Bus
Sales, Inc. It is recommended that the buses be financed through Community Leasing Partners.
The City has been using Community Leasing Partners for financing vehicles since they offer the
best rate and are a reputable company. The average life of the buses is twelve years and staff
is proposing a 10 year lease to own purchase.
7 ROTTIT W, 713-7-1w,
Thp tnfiql r.n--,t of thp -,iz%iPn M hi minq iq
$3,126,990.93. The Master Equ.,-
inment Lease Purchase
and Escrow Agreements provide for an annual payment of $374,879.76. Sufficient funds are
available in the proposed 2018-19 budget from Prop A funds under account number 55-4-0670.
Annual financing will be budgeted for in future year's transit operating budget from available
Prop A funds.
ATTACHMENTS
Resolution
Attachment A - Escrow Agreement
Attachment B - Tax Compliance Agreement and No Arbitrage Certificate
91
WHEREAS, the City Council, as the governing body of the City of Downey, has
determined that a true and very real need exists for the acquisition of seven El Dorado
National Class H Buses ("Equipment") described in the Master Equipment Lease
Purchase Agreement ,. • Schedule of • ', a _ is 1 presented • the City Council
this meeting and that it is appropriate to finance the acquisition of the Equipment in this
i
arrangeWHEREASi the City of Downey has taken the necessary steps under applicable law to
for the acquisitionand financing of • •.
NOW, - •-E THE CITY COUNCIL OF OF DOWNEY DOES
RESOLVEHEREBY • •
' Master EquipmentAgreement i Schedule
of Equipment No. 1 ("Agreement") attached hereto as Attachment "A" is hereby
approved as the best means for the City of Downey, as Lessee in the
Agreement, to finance the acquisition• ` such Equipment,and the City Council
designates • confirms that either individual• below is authi ` ` i to execute and
deliver on behalf of i •:ment Lease Purchase Agreement and any
related documents, including the Schedule of Equipment No. 1 ("Schedule"), deemed by
such person necessary to the consummation of the transactions contemplated by the
Agreement.-
SEAN
ASHTON, MAYOROR
CITY OF DOWNEY CITY OF DOWIJEY
SECTION' above-named ei t of . City held their position of .'.. i."
and City Manager at the time of such authorization, and at the present time hold their
respective offices as set forthi •
SECTIONmeeting of Downey City Councilat which the Agreement • t�.
Schedule were approved and authorized to be executed was duly called, regularly conven
isattended • • • ` requisite • •_ members thereof . • ` . 'i.
approving t • i `.• • authorizing i ' • i.
e ": i i ► !.
• of the date of ' • Iin adoption.
PAGE TWO
SECTION 5. All insurance required in accordance with the Agreement is currently
maintained by the City of Downey.
A
�IjECT!OA The City of Downey has, in accordance with the requirements of law,
fully budgeted and appropriated sufficient funds for the current budget year to make the rental
payments scheduled to come due during the Original Term (as defined in the Agreement) and
to meet its other obligations for the Original Term and such funds have not been expended for
other purposes.
S]ECTION�L The fiscal year o t e ity 0 Downey is July 1 to June 30.
81=-CTIgNj� The City Clerk shall certify to the adoption of this Resolution.
APPROVED AND ADOPTED this dav of 2018.
SEAN ASHTON, Mayor
MARIA ALICIA DUARTE, CMC
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City ouncil of
the City of Downey at a regular meeting held on the day of 2018, by th
following vote, to wit: I
AYES:
Council Members,
NOES:
Council Member:
ABSENT:
Council Member:
ABSTAIN:
Council Member:
MARIA ALICIA DUARTE, CMC
City Clerk
RECITALS
WHEREAS, Lessee desires to lease from Lessor—eprw
AM16i�
NAM. k� i
V
-J.y
J5.13L.I4.11 i I- I -
'W"M 16
and conditions of and for the purposes set forth in this Agreement.
W14EAEAS, the mlaIil between th-is rties shall be a cant lder" of ui ment ma be a to or deleted fro
I
Wet M-11101044 t IrM , .
M=9QLU9A=Mt1T,MMMi7OMM
WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement for the purposes set forth herein
10 1tK*AM1#MeA 1#1 1 - , . 1 0
ler�44pijr: -0-d)r(*-(TjCCL t TiFTY
. . . . . . . . ...............
(Im Waccor OW Itht et& siiereof.
"Code" means ihe Internal Revenue Code of 1986, as amended� and the United States Treasurl RequIaOuns �v% efferA theriauvAer.
"Commencement Date" means. with res tect to ang, Schedule the date wh,,:A the ternix Arlis A�.Irr
to pay rent under that Schedule Gommence, which date will be the earfler of (1) the date an which (lie Equipment listed in that Schedule is accepted by
— I —Mun!Std
the form of Exhibit D hereto or (ii) the date on which suffrclent moneys to
'Equipment" means the property described in the Schedules and Oil •' replacements, substitutions, repairs, restorations, modifications, attachments,
accessions, additions and improvements thereof or thereto. Whenever reference is made in this Agreement to Equipment listed in a Schedule, that reference
shall be deemed to include all replacements, repairs, restorations, modifications and improvements of or to that Equipment.
"Event of Default" means, with respect to any Lease, an Event of Default described in Section 10.01.
'Escrow Agreement" means" with respect to a given Schedule, an escrow agreement in form and substance satisfactory to Lessor, between Lessee, Lessor
and an escrow agent relating to the acquisition fund created thereunder.
"Lease" means, at any time, (1) if none of Lessor's Interest in, to and under any Schedule has been assigned pursuant to Section 9.01; or if all of Lessor's
Interest In, to and under this Agreement and all Schedules have been assigned to the same assignee without any reassignment, this Agreement, or (it) if
Lessors Interest in, to and under any Schedule or Schedules has been assigned or reassigned pursuant to Section 9.01, all Schedules that have: the same
Lessor and Ibis Agreement as It relates to talose Schedules and the Equipment listed therein, which shall constitute a separate single lease relating to that
Equipment.
"Lease Term" means, with respect to any Lease, the Original Term and all Renewal Terms of that Lease.
"Lessee" means the entity which is described in the first paragraph' of this Agreement, its successors and assigns,
"Lessor" means with respect to each Schedule and the Lease of which that Schedule is a Mart, (i) ifLessor's interest in, to and under that Schedule has not
been assigned pursuant to Section 9.01, the entity described as such in the first paragraph of this Agreement or its successor, or (ii) if Lessor's interest in,
to and under that Schedule has been assigned pursuant to Section 9.01, the assignee thereof or its successor.
"Net Procaetl '' means the amount remaining from the gross proceeds of any insurance claim or condemnation award after deducting all expenses (including
attorneys' fees) incurred In the coilec9lon of such claim or award,
"Original Term" means, with respect to any Lease, the period from the first Commencement Date for any Schedule under that Lease until the end of the
fiscal year of Lessee in effect at (het Commencement Date,
"Purchase Price" means, with respect to the Equipment listed on any Schedule, the amount set forth in that Schedule as the Purchase Price for that
Equipment.
"Renewal Terms" means, with respect to any Lease, the automatic renewal terms of that Lease, as provided for in Article iII of this Agreement, each having
a duration of one year and a term co -extensive with the Lessee's fiscal year except the last of such automatic renewal terms which shall end on the due date
of the last Rental Payment set forth in the Schedule.
"Rental Payments" means the basic rental payments payable by Lessee pursuant to Section 4.02.
"Stale" means the state in which Lessee Is to tedw
"Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing the
Equipment.
ARTICLE IIi LEASE TERM
mzm
)oinfi,tetedecisionwinelberdrnottobudgetorappropriate
_ - 1 I"very
die
G i 1- i i t . ♦ s. s r
Opinion of •unsel to Lessee in substantially the form attached heretoas Exhibitrespecting such ScheduleI otherwise satisfactoryo
Lessor;
necessary(c) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems
or 1 is ro that
(d) Such otherany, as are
_ fortsuchh is or are reasonably required by Lesson
I INS
[HAKfutwmiumimwim1 rjX
"allon, 46�1a666 the7t400me t and its contemplate usia and location and documentation or information concerning the financial status
of Lessee and other matters related to Lessee,
ARTICLE IV._ RENTAL PAYMENTS
Sect+can "13fenal Is rn ark t ons `t to a Ctrrrktrit Excfrrs of Lessor and Lessee understand and intend that the obligation of Lessee to pay
tctnttal rments horounder shall constitute a current pxparrse oaf Lassos and shall rat in any way be construed to be a debt of Lessee in contravention of
any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein
constitute a pledge of the general tax revenues, funds or monies of Lessee,
legs I vmstrlt f l errtat'ayrnents Lessee snail pay t eratat Paymenls, exctusively from legally available funds, in lawful money of the United
States of America, is Lesaor or, in dte event of assignment by t ossor, to its assignee, In the amounts and an the dates set forth in each Schadule, Rental'
Payments shall be in ronsideralion for Lessee"s use of tike Equipment durlrig the applicable year, in which such payments are dile. The Rental Payments will
be payable wlltrout notice or demand at the office of Leasor (or s ioh other place as Lessor may from time to time designate in writing). If any Rental Payment
or other sum payable under any Schedule is not paid when due, Lessee shall pay to Lessor accrued interest on such delinquent amount from the date due
thereof until paid at the greater of 10% or lite maximum rate allowed by law. In the event that it Is determined that any of the interest components of Rental
Pnvm&nrc mnu .neer ho ,,;,m 1, ...v.,.,:a::.ten ..ems n...- __ 1 ----- -_ -:
absent manifest error.'
rt n 'r P 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 repre,ents payment of, principal. Each Schedule will set forth the interest component and the principal component of
each Rental Payment during the Lease Term,
ae to make payment of the Rental Payments required under this Article IV and
!nts contained' herein, shall be absolute and unconditional in all events, except
=tween Lessee and Lessor, any `endor or any other dispute between Lessee
s of Rental Payments when due and shall not withhold any Rental Payments
set-off or counterclaim against Its obligation to make such payments required
the Original Term or the then -current Renewal Term for each Schedule shall
f an amount sufficient to retake all Rental Payments during The Original Term and each of the Renewal Terms for each Lease can be Qbitalned; Lessee;
further intends to do all things lawfully within its power to obtain and maintain funds bort which the Rental Payments may he made, Including making
provision for such payments to the extent necessary in each biannual or annual budget submitted and adopted in accordance with applicable provisions of
state law, to have such portion of the budget approved, and to exhaust all available reviews and appeals in the event such portion of the budget is not
approved
sq(ipn'gS pion aoarorfrlation Lessee Is obligated only to pay such Rental Payments under this Agreement (and any additional amounts due hereunder,
if applicable) 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 otherwise make available funds to pay Rental Payments under a Lease following the then current Original Term or Renewal Term,
that Lease shalt be deemed terminated at the and of the then current Original Tern or Renewal Term. Lessee agrees to deliver written notice to Lessor of
such termination at least 60 days prior to the and of the then current Original Term or Renewal Term, but failure to give such written notice shall not extend
the term beyond such Original Term or Renewal Term,
Section J.P1, Tille to 1ht91U1Qaq_nL Upon acceptance of the Equipment by Lessee, title to the Equipment and any and all additions, repairs, replacements
or modifications shall vest in Lessee, subject to the rights of Lessor under this Agreement, provided that title to the Equipment that is subject to any Lease'
shall thereafter immediately and without any action by Lessee vest in Lessor, and Lessee shall immediately surrender possession of that Equipment to
Lessor, upon (a) any termination of that Lease other than termination pursuant to Section 5.04, or (b) the occurrence of an Event of Default with respect to
that Lease. it is the intent of the parties hereto that any transfer of title to Lessor pursuant to this Section shall occur automatically without the necessity of
any bill of sale, certificate of title or other instrument of conveyance. Lessee shall, nevertheless, execute and deliver any such instruments as Lessor may
request to evidence such transfer.
Section 5• . h t roar To secure the payment of all Lassee"s obligations under this Agreement, Lessee grants to Lessor a security interest
constituting a first lien on (1) the Equipment and on all additions, attachments. accessions, that am considered to be an integral part of the equipment, and
substitutions thereto, and on any proceeds there from, and (it) the acquisition fund established under any Escrow Agreement entered Into In connection
therewith. Lessee agrees to execute such additional' documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish
and maintain its security interest in the Equipment. Lessee hereby authorizes the filing of financing statements under the Uniform Commercial Code in
connection with the security interest granted hereunder.
WrIPOng' t t'ronat irooenv Lessor and Lessee agree that the Equipment is and will remain personal property and will not be deemed to be affixed to
tr 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
thysically affixed of attacked to real estate at any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, fumish a waiver of any
merest in the Equipment from any party having an Interest In any such real estate or building.
'action 5.L4.rition to Purchase Lessee shall have the option to purchase Lessor's interest in all (but not less than all) of the Equipment described in any
ichedule, upon giving written notice to Lessor at least 60 (but not more than 180) days before the date of purchase, at the following times and upon the
allowing trams:
(a) On the date of the fast Rental PayMent set forlh in that Schedule (assuming this Agreement is renewed' at the end of the Original Terra and each
Renewal Term), If the Agreement is still in effect on such day, upon payment in full to Lessor of the Rental Payments and all other amounts then
due under that Schedule plus One Dollar;
(b) On the last day of the Original Term or any Renewal Term then in effect, upon payment in full to Lessor of the Rental Payments and all other
amounts then due under that Schedule plus the there applicable purchase Price set forth in that Schedule; or
(c) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in that Schedule an the day specified
in Lessee's written notice to Lessor of its exercise of the purchase option upon payment In full to Lessor of the Rental Payments and all other
amounts then due under that Schedule, including, without limitation, interest accrued to the date of payment, plus the then applicable Purchase
Price set forth in that Schedule.
tTICLE VI. DELIVERY, MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES
i n 1 lien tnirt' I i n n A n " f I m Lessee shall order the Equipment, cause the Equipment to be delivered and installed
lire torations specified in lire Schedules and pay any and all delivery and Installation costs In connection therewith, Wben the Equipment listed In any
,iodule rias been delivered and installed, Lessee shall Immediately accept such Equipment and evidence said acceptance by executing and delivering to
mor an Acceptance Certificate In the form attached hereto as Exhibit 0.
ct on t3.' Lor all r In g n. Once Installed, no item of the Equipment will be moved from the location specified for it in the Schedule on which that
n is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular
. 4 n . . M In ry rt f i rn . r1 Lessee agrees that at all times during the Lease Tern Lessee will, at Lessee's own cost and expense,
maintain, preSeNe and keep The Equipment in good fepair, working order and condition, and that Lessee will from time to time €Hake or cause to be made
all nerassary and proper repairs, replacements and renewals, Lessor shall have no responsibility in any of these smatters, or for the making of improvements
or additions to the Equipment. Lessee shall not make material modifications to the Equipment without the prior consent of Lessor.
See lion ft ff i t Errr Y g h r �a
%3ALheroes art ility Clw erre s Lessee shall keep the Equipment free of all hens, charges and encumbrances
atrcept those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary
ptirtaoser of Lessee and, therefore, that the Equipment will be exempt front all taxers pfeSenily assessed and levied with respect to personal prmpedy, In the
3—MuniStd
event that the use, possession or acquisition of (he Equipment is found to be subject to taxation in any form (except for income taxes of Lessor), Lessee will
pay, as the same respectively come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied
against or with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal or replacement of, or a
modincation, improvement or addiflon to the Equipment, as well as all gas, water, steam, electricity, heat, power, telephone, utility
and other charges Incurred in the operation, maintenance, use, occupancy and upkeep of the Equipment', provided that, with respeet to any governmental
charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as have accrued during the
Lease Term. Lessee will take no action that will cause the interest portion of any Rental payment to become Includable in gross income of the recipient for
purposes of federal Income taxation under the Code, and Lessee will take, and will cause Its officers, employees and agents to take, all affirmadve action
legally within its power to prevent such interest from being includable In gross income for purposes of federal income taxation under the
Code, Lessee acknowledges that Lessor's yield with respect to this Agreement is dependent upon the interest component of each Rental Payment being
ex ed from Les%or's, income pursuant to the Code.
�Prvl i�r &inn �rn , At its own expense, Lessee shall maintain (a) casualty insurance 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 Asks reasonably required
by Lessor, in an amount at least equal tip any amounts currently due, plus the then applicable Purchase Price of the Equipment, (b) liability insurance that
protects Lessor from liability in all events in form and amount satisfactory to Lessor and (c) workers' compensation coverage as required by the laws of the
State; provided that, with Lassoes prior written consent, Lessee may self -insure against the risks described in clauses (a) and (b): provided further that, if
Lessor provides such consent Lessee shall provide to Lessor information with respect to such self-insurance program as Lessor may request from lime to
lime. All insurance proceeds from casualty losses shall be payable as hereinafter provided. Lessee shall furnish to Lessor certificates evidencing such
coverage throughout the Lease Term, All such casualty and liability insurance shall be with insurers that are acceptable to Lessor, shall name Lessor as a
loss payee and an additional insured, respectively and shall contain a provision to the affect thatsuch insurance shall not be canceled or modified materially
without first giving written notice thereof to Lessor at least 30 days in advance of such cancellation or modification. All such casualty insurance shall contain
a provision making any losses payable to Lessee and Lessor as their respedive interests may appear.
In the event Lessee shall fall to maintain the full Insurance coverage required by this Agreement or shall fall to keep the Equipment
in good repair and operating condition, Lessor may (but shall be under no obligation to) purchase the required Insurance and pay the premiums an the same
or may make such repairs or replacements as are necessary and provide for payment thereof, and all amounts so advanced therefore by Lessor shall
constitute additional rent for the Itten-current Original Term or Renewal Term, and Lessee covenants and agrees to pay such amounts so advanced by
Lessor with interest thereon from the date advanced until paid at the rate of 18% per annum or the maximum interest rate permitted by law, whichever Is
less.
ARTICLE VII. DAMAGE, DESTRUCTION AND CONDEMNATION: USE OF NET PROCEEDS
Section 7,04 i i. I : Lessee is responsible for the entire risk of loss of or damage or destruction to the Equipment. No such loss. damage
destruction shall relieve Lessee ny obligation under this Agreement or any Lease.
$Addk7 Al e!Ano; Ih E I t 11
Q14 or n WW I WiN4-1ro,4,ed in wh mr In
1; a, QW
Net Proceeds remaining after such work has been completed shall be paid to Lessee.
Section 7,01., f N e rwo o�e (f the Met Proceeds am W-auffident to pay in full the cost of any replacement, repair, restoration, modificati
P
Iwo YWRIWOR W."I.N.W. WREN44. M W" 'i W-1 P -MIR., W. I A.
IM011111"M , i dwilli rm" I N 1
intea pircriatsing CeSsur 3 ititerest in ine, aq
of the amounts payable under Article IV.
Lessee will use substantially all the Equipment for the purpose of performing one or more governments[ or proprietary functions consistent with the
permissible scope of its authority.
ARTICLE IX. ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING
JQglLan , 1, A qs' naittiLky Wam—r. Lessor's Interest in, to, and under this Agreement; any Lease and the Equipment may be assigned and reassigned in
21 ... W _ _
whate or in pad to one or more assignees by Lessor at any time subsequent to 'its execution. Lessee hereby agrees to maintain a written record of each
such assignment in form necessary to comply with Section 149(a) of the Code. No such assignment shall be binding on Lessee until it has received written
notice from Lessor of the assignment disclosing the name and address of [he assignee. Lessee agrees to execute all documents, including chattel mortgages
or financing statements that may be reasonably requested by Lessor or any assignee to protect Its interests in the Equipment and in this Agreement, Lessee
shall not have the right to and shall not assert against any assignee any claim, counterclaim, defense, set-off or other tight Lessee may from time to time
have against Lessor,
BEiffugwtnm
�A&kaaing_gy_L4a=. None of Lessee's interest in, to and under this Agreement and in the Equipment may be sold,
assigned, subleased, pledged or otheFwise encumbered by Lessee without the prior written consent of Lessor.
rt I To the extent permitted by law, Lessee shall indemnify, protect, hold harmless, save and keep
harmless Lessor from and against any and all liabilities, obligations, losses, claims and damages whatsoever, regardless of cause thereof, and all expenses
in connection therewith (including, without limitation, counsel fees and expenses, penalties connected therewith imposed an interest received) arising out of
or as (a) result of the entering into of this Agreement, (b) the ownership of any item of the Equipment, (c) the manufacture, ordering, acquisition, use,
operation, condition, purchase, delivery, rejection, storage or return of any item of the Equipment, (d) or 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 herein or any material misrepresentaflon contained herein. The indemnification arising under this paragraph shall continue In full
force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason,
ARTICLE X. EVENTAULT,AND REMEDIg
j.QLDq&UJL0RJJngJ Subject to the provisions of Section 4.06, any of the following events shall constitute an "Event of Default" under
any Lease:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under that Lease at the time specified in that Lease;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed under that Lease, 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 that Lease or its execution, delivery or performance shall prove to
have been false, incorrect, misleading or breached in any material respect an the date when made;
(d) Any provision of that Lease shall at any time for any reason cease to be valid and binding an Lessee, or shall be declared to be null and void, or
the validity or enforceability thereof shall be contested by Lessee or any governmental agency or authority if the loss of such provision would
materially adversely affect the rights or security of Lessor, or Lessee shall deny that it has any further liability or obligation under that Lease.
(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, (111) 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
M An order, judgment or decree shall he entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee,
custodian or liquiddaluor -1. __ — — __ - --- —.1 - ----°- — 1- _ ____ ___-,_I --------
UI L-MWIM: W Ul du U1 d bUILIZIkaffludi JJdIL u® UIC abbt=b UR L_t:*ZDtM, 111 00611 %.db= WIUIUUL ILb dJJFIAIduU0I, PF -0.
and such order, judgment or decree shall continue unstayed and in effect for any period of 30 consecutive days.
Section 10M, Remedies an War& Whenever any Event of Default under any Lease exists, Lessor shall have the right, at its sale option without any
further demand or notice, to takeoneor any combination of the following remedial steps:
(a) By written notice to Lessee, declare all Rental Payments and other amounts payable by Lessee under that Lease to the end of the then current
Original Term or Renewal Term to be due;
(b) With or without terminating that Lease, Lessor may, upon 5 days written notice to Lessee, enter the premises where any Equipment that is subject
to that Lease is located and retake possession of that Equipment or require Lessee at Lessee's expense to promptly return any or all of the
Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease the Equipment or, for the
account of Lessee, sublease the Equipment, continuing to hold Lessee liable for the difference between (1) the Rental Payments and other amounts
payable by Lessee under that Lease plus the then -applicable Purchase Price for that Equipment and (I!) the net proceeds of any such sale, leasing
or subleasing (after deducting all expenses of Lessor in exercising its remedies under this Agreement, including without limitation all expenses of
taking possession, storing, reconditioning and selling or leasing the Equipment and all brokerage, auctioneers' and attorneys' fees) provided that
the amount of Lessee's liability under this subparagraph (b) shall not exceed the Rental Payments and other amounts otherwise due under that
Lease plus the remaining Rental Payments and other amounts payable by Lessee under that Lease to the end of the then current Original Term
or Renewal Term; and
(C) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under that Lease or as the owner of
any or all of the Equipment that is subject to that Lease.
In addition, whenever an Event of Defaultexists with respect to any Rental Payment required by a particular Schedule orwith respect to any otherpayment,
covenant, condition, agreement, statement, representation or warranty set forth in that Schedule or applicable to that Schedule or the Equipment listed
therein, 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:
(d) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to that Schedule and other amounts payable
by Lessee under this Agreement to the end of the then current Original Term or Renewal Term to be due;
(e) With or without terminating that Schedule, Lessor may, upon 5 days written notice to Lessee, enter the premises where the Equipment listed in
that Schedule is located and retake possession of that Equipment or require Lessee at Lessee's expense to promptly return any or all of that
Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease that Equipment or, for the
account of Lessee, sublease that Equipment, continuing to hold Lessee liable for the difference between (I) the Rental Payments payable by
Lessee pursuant to that Schedule and other amounts related to that Schedule or the Equipment listed therein that are payable by Lessee hereunder
plus the then applicable Purchase Price for that Equipment, and (I!) the net proceeds of any such sale, leasing or subleasing (after deducting all
expenses of Lessor in exercising its remedies under this Agreement, including without limitation all expenses of taking possession, storing,
reconditioning and selling or leasing such Equipment and all brokerage, auctioneers' and attorneys' fees) provided that the amount of Lessee's
liability under this subparagraph (a) shall not exceed the Rental Payments and other amounts otherwise due under that Schedule plus the
remaining Rental Payments and other amounts payable by Lessee under that Schedule to the and of the then current Original Term or Renewal
Term; and
M Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under that Schedule, this Agreement
with respect to that Schedule and the Equipment listed therein.
In addition to the remedies specified above, Lessor may charge interest on all amounts due to it at the rate of 10% per annum or the maximum amount
permitted by law, whichever is less. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities
under any other Schedules, this Agreement related to any other Schedule or the Equipment listed therein.
Section 10.03. No RemedyJeAgW§Jy%t, No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this lease. No delay or omission to exercise any righter power accruing upon
any default shall impair any such right or power or shall be construed to he a waiver thereof but any such right and power may be exercised from time to
time and as often as may be deemed expedient by Lessor or its assignee,
jZoDim If Lessee should default under any of the provisions hereof and Lessor should employ
attorneys or incur other expenses for the collection of moneys or for the enforcement of performance or observance of any obligation or agreement an the
part of Lessee contained in this Agreement, Lessee agrees, to the extent it is permitted by law to do so, that it will, if assessed by a court of competent
jurisdiction, pay to Lessor the reasonable fees of those attorneys and other reasonable expenses so incurred by Lessor.
— 5 —MuniStd
Sectio in 111. 5, Aonficationaf Monevs, Any net proceeds from the exercise at any remedy hereunder (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 Schedule, Equipment listed in that Schedule or rights under the Agreement related to
that Schedule, then to amounts due pursuant to that Schedule and other amounts related to that Schedule or that Equipment.
(b) If such remedy is exercised with respect to more than one Schedule, Equipment listed in more than one Schedule or rights under the Agreement
related to more than one Schedule, then to amounts due pursuant to those Schedules pro rats.
ARTICLE X1. MISCELLANEOUS
All notices, certificates or other communications hereunder 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.
aggLigg 11,02, Sinding Effacl,,Entirg Ag=rnent, Amendmea,(1,grAly ion
QAji;jLL This Agreement shall inure to the benefit of and shall be binding upon
Lessor and Lessee and their respective successors and assigns, The terms of this Agreement shall not be waived, altered, modified, supplemented or
amended in any manner whatsoever except by written instrument signed by (he Lessor and the Lessee, norshall any such amendment that affects the rights
of Lessor's assignee be effective without such assignee's consent. In the event any provision of this Agreement shall be held invalid or unenforceable by
any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any otherprovislon hereof.
This Agreement shall be governed by and construed in accordance with the laws of the late of California.
S tl nr 11.114, In the event any provision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
difications This Agreement may be amended, added to, changed or modified by written agreement duly
executed by Lessor and Lessee
Section 11,0, E:x li n in r This Agreement, including in writing each Schedule, maybe executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same instrument; except (1) to the extent that various Schedules and this
Agreement as it relates thereto constitutes separate Leases as provided in this Agreement and (2) that Lessors interest In, to and under any Schedule and
the Agreement as it relates to that Schedule, and the Equipment listed in that Schedule may be sold or pledged only by delivering possession of the original
counterpart of that Schedule marked "Counterpart No. I," which Counterpart No. I shall constitute chattel paper for purposes of the Uniform Commercial
Code.
Section 11.07. Usury. The parties hereto agree that the charges in this Agreement and any Lease shall not be a violation of usury or other law. Any such
excess charge shall be applied In such order as to conform this Agreement and such Lease to such applicable law.
Wiv r To the extent permitted by law, lessee agrees to waive its right to a trial by jury.
_gq_
agGlign 11.09. fj&ALmi&1 ntation Lessee agrees that a facsimile copy of this Agreement or any Lease with facsimile signatures may be treated as
Qocumentation
an original and will be admi s! le as evidence of this Agreement or such Lease.
The captions or headings in this Agreement are for convenience only and in noway define, limit or describe the scope or intent
of any provisions or sections of this Agreement.
Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives listed below -
11411 UN41 1
Sean Ashton, Mayor
Maria Alicia Duaiie. -CMC--
Signature
Name and Title
FI'll 1 11
V. Abich Garcia
— 6 —MuniStd
EXHIBIT A
SC EDULE OF • NO. 01, Dated7/612018
LESSOR'SCounterpart Nm 1,
TO AND UNDER THIS SCHEDULEAND THETO THIS SCHEDULE-
* r OR PLEDGED ONLY DELIVERING POSSESSION OF • - NO. 1 OF rULE, WHICH COUNTERPART
•. I SHALL CONSTITUTE CHATTEL PAPER FOR PURPOSES OF •-M COMMERCIAL CODE.�
Roll Master Equipment Lease Purchase Agreement, dated as of 7/512018, between Community First National Bank, as Lessor. and City of Downey, as
Lease NumberDOWCA2018-OSBE
LESSEE: LESSOR.
City of Downey Community First National Bank
Sean Ashton, Mayor Signature
Maria Alicia Duarte, CMC
Name and Title
Approved as to fb Cit Attorrte
tte M. A ich Garcia
ATTACHMENT 1
EQUIPMENT DESCRIPTION
RE. Schedule of Equipment No. 01, dated 715/2018, to Master Equipment Lease Purchase Agreement, dated as of
715/2018, between Community First National Bank, as Lessor, and City of Downey, as Lessee.
I
With a total acquisition cost of $3.126,990.93
tog6tMr Wth all add1rhink jv�
7hysical location where equipment will be stored after delivery: various locations within the City of Downey
Lefivin. Ism=
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CIVIC
A77rm e,
—W-f�Abic�hGarcfa
ATTACHMENT 2
PAYMENT SCHEDULE
1:FTi
17M
Amount Financed- $3,126,990.93
AkliORTIZATION SCHEDULE
Payment
Payment
Payment
Interest
Principal
Purchis
#umber
Date J
Amoun&
Portion
Portion
erice
1
8/15/2018
$187,684.31
$13,633.68
$174,050.63
Not Available
2
2/15/2019
$187,684.31
$57,936.69
$129,747.62
$2,879,656.54
3
8/15/2019
$187 ' 684.31
$55 ' 391.04
$132,293.27
$2,744,717.41
4
2115/2020
$18768431
$52795 ' 45
$134,888.86
$2,607,130.77
5
8115/2020
$187684".31
$50'.148.93
$1370535.38
$214661844.68
6
2/15/2021
$187,684.31
$47,450.48
$140,233.82
$2,323,806.18
7
8/15/2021
$187,684.31
$44,699.10
$142,985.21
$2,177i961.27
8
2/15/2022
$187,684.31
$41.893.73
$145,790.58
$2.029j254 ' 87
9
8/15/20
,033.31
$148,650.99
$1,877,630.86
10
2/15/2023
$187,684.31
$36,116.78
$151,567.52
$1,7231031.99
11
8/1512023
$187,684.31
$33,143.03
$154,541.28
$1,565,399.88
12
211512024
$187,684.31
$30,110.93
$1579573.38
$1,404,675.03
13
8/15/2024
$187 684.31
$27,019.34
$160,664.97
$1,240,796.77
14
2/15/2025
$187,684.31
$23,867.09
$163,817.22
$1,073 ' 703.20
15
8/15/2025
$187,684.31
$20,653 00$167
' 031.31
$903j331.27
16
2/15/2026
$187,684.31
$17,375 84
$170,308.46
$729,616.64
17
8/15/2026
$187,684.31
$14,034.39
$173,649.92
$552,493.72
18
2115/2027
$187,684.31
$10,627.38
$177,056.93
$371,895.65
19
8/15/2027
$187,684.31
$7,153.52
$180,530.78
$187i754.25
20
2/15/2028
$187,684.31
$3,611.51
$184,072.80
$0.00
Sean Ashton, Mayor
Attested by City Clerk
W VIFT"I'l ffgFl PIR-Timok
Approved as tofo
I
y
Ue
—V t I —eM M.
Abich Garcia
EXHIBIT
EXTRACT OF MINUTES
F GOVERNING Y
MASTER EQUIPMENT LEASE PURCHASE AGREEMENT AND SCHEDULE OF EQUIPMENT NO: I DATED 7/5/18
BETWEEN COMMUNITY FIRST NATIONAL BANK AS LESSOR AND CITY OF DOWNEY AS LESSEE.
I, the undersigned, the duly appointed and qualified City Clerk of the City of Downey ("Lessee), db hereby certify on this _ day of
, 2018 as follows:
(1) Lessee did, at a meeting of the governing body of the Lessee, held on pw _ 2015; by motion duly
made, seconded and carried, in accordance with all requirements of law, approve Resolution No. ("Resolution") approving
the Master Equipment Lease Purchase Agreement and Schedule of Equipment No;,dated 7/5/15 ("Agreement") and authorized the
execution and delivery of the Agreement and Schedule on behalf Lessee by either of the following Authorized Representatives of
the Lessee to witness:
SEAN ASHTON, MAYOR OR GILBERT A. L,IYA;S,;;CITY MANAGER
CITY OF DO EY Cf Y OF DO EY ",
(2) The governing body of Lessee resolved that each of
position of Mayor and City Manager at the time of such authorizatigh;,a
stated above.
(3) The governing body of Lessee rew ved that the rx (TI
and the Schedule were approved and authorized to be executed was duly
requisite majority of the members thereof, and that the action approving
execution thereof has not been altered or rescinded.
(4) The governing body oficssee resolved that no even
the lapse of time, or both; would constitute an, Evcm of I etauCt (as such
Resolution was adopted.
(5) The governing body of Lessee`'resolvet that all insut
maintained by Lessee.
sufficient font
the Agreeme
(7)
the above-named represeMat ves of City of Downey held the
nd at the present time, each hold.their respective offices as
convened, and attended throughout by the
i edule and authorizing the
`n that constitutes or, with the giving of notice or
ied in the Agreement), exists as of the date the
budgetedq,,with'ihe requirements of law, fully d appropriated
=0111yoft
d such fundsbeen d
Maria Alicia Duarte, CMC
City Clerk
June_, 2018
Community First National Bank
215 S. Seth Child Road
Manhattan, KS 66502
Re: Lessee: City of Downey
Ladies and Gentlemen:
i . i i �•
i • �` a i
Community i `r. i and Lesswhich
` ed as of 7/5;,�8m, Exhibits thereto and
t,ly, the i.reem eri�iy and between
• ' other things, provides
i' '•
among other things;; authorizes Lessee to execute the Agreement and (c) such other opinions,
documents and matters of law as I have deemed necessary in connection with the following opinions.
Based on the foregoing, 1 ars of the following opinions=
(1) Lessee's true and correct name is City of Downey;
(2) Lessee is a municipal torporation and charterity, duly organized and existing under the laws of
the State of California, and has a substantial amount of the following sovereign powers (a)the power to
tax; (b);thei power of eminent domain; and (c) police power.
(3) Lessee has the requisite power and authority to lease the Equipment with an option to purchase
and to execute -and deliverte Agreement and to perform its obligations under the Agreement.
(4) The Agreement and the either documents either attached thereto or required therein have been
duly authorized, approved and executed; by and on behalf of Lessee and the Agreementandother
documents either attached thereto or required therein are the valid and binding obligations of Lessee
enforceable in accordance with their terms.
(5) The authorization, approval and execution of the Agreement and all other proceedings of Lessee
relating to the transactions contemplated thereby have been performed in accordance with all open
meeting laws and all other applicable state or federal laws.
(6) To the best of my knowledge, and as of the date of this opinion, 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 Agreement or the
security interest of Lessor or its assigns, as the case may be, in the Equipment.
(7) The signatures of the officers which appear on the Agreement hold the offices set forth below
their names.
(8) No further approval, consent or withholding of objection is required from any federal, state or
local governmental authority with respect to the entering into or performance by the Lessee of the
Lease and the transaction contemplated thereby.
(9) The Equipment leased pursuant to the Agree ersonal property and when
M
icable law.
(10) The Lessee is a political subdivisio 11111 n within . th 103 of the Internal Revenul
K .......... •ru ings.
ru �M
eht unless
ke relie
R=or or anT r under the Agr"ent This
this opinion letter, I undertake n
1 pip] V41 1W 214DIM 1MMUMMMUMM on letter is limited to the atter
hi6n uld not be read as expressin
Sincerely,
Yvet
City
EXHIBIT D
ACCEPTANCE CERTIFICATE
TV,
RE: Schedule of Equipment No. 01, dated 7/,9/2018, to Master Equipment Lease Purchase Agreement, dated as of
71512018, between Community First National Bank, as Lessor, and City of Downey, as Lessee.
mant on its
(6) The govOiNnq bddy)bf Lotse6 hat 41?11t4� th� authbrizatidn, exeduti A - del" Of t
behalf by the authorized representative of Lessee who signed the Agreement.
(7) The Lessee will in a fimeiY falhion submit the appropriate paperwork to the State to have a fiffe to the Equipment
issued 16 ii�iejr name 94 owner and Lessor listedas- first lienholder. Such verification of perfected ownership and
security interest will be provided to Lessor no later than 90 days from delivery of the Equipment.
Lftmn- 1!0=
Sean Ashtori:Wa-yor
Attested by City Clerk
Approved as to form -City Attorn y
f
7�tte- �Abich Garcia
*if delivery is not immediate, keep until final deliverm
— 12 —MuniStd
BANK QUALIFIED CERTIFICATE
RE: Schedule of Eguigmenj Np, og i d1jed AJ112018- f
A
I&
1. Designation as Qualified Tax -Exempt Obligation. Pursuant to Section 265(b)(3)(13)(0 of the Internal Revenue Code
of 1986 as amended (the "Code�'), the Lessee hereby specifically designates the above referenced Agreement 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 Lessee hereby `• that the Lessee will not designate • than $10,000,000 ► obligations issued
by the Lessee in the calendar year during which the above referenced Agreement 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 Lessee hereby
represents that the Lessee (including all subordinate entities of the Lessee within the meaning of Section 265(b)(3)(E) of
the Code) reasonably anticipates not to issue in the calendar year during which the above referenced Agreement 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 • the Code) in an amount greater than $10,000,000.
* 6. , OT
Maria Alkil_�&_
Approved as to form -City Attorney
ff_A_bichGa"r_c__ia___71
INSURANCE COVERAGE REQUIREMENTS I
.............
City of Downey
Equipment to be insured: Seven O Now El Dorado National Clom H Buses
Policy should be issued and mailed to: Community First National Bank and/or Its Assigns
215 S. Seth Child Road
Manhattan, KS 66502
INSURANCE REQUIREMENTS:
1. LIABILITY
$10000,000.00
FM
P,vinj ininy
Single Limit per Occurrence
Bank andlor Its Assigns;M= be listed as 4ddI66nal insured and loss payee -1
Ve AM risk coverage to guarantee proc:oar
sufflcient to cover a Ot cost ofthii luipment.
,/ Community First National Bank andlor Its Assigns M
3. ENDORSEMENT 14U be listed as 4dd&na/ insured and loss payee.
n nuace Irom insurer M* cancellation or reduction
Of insur4nm coverego.
Deductibles should be listed on the 4��e of CovWoo
for'sdi i
FAXEO TO�r a4777.70�
Lefign. 8!2=
Sean'Ashtch, May r
Attested by City Clark
Maria Alicia Duarte, CIVIC
4 Approved as ko, fonn-Citt;yAtot ey
Y'veM. &Abich Garcia
RE: Schedule of Equipment No. 01, dated 7/5/2018, to Master Equipment Lease Purchase Agreement, dated as of
7/5/2018, between Community First National Bank, as Lessor, and City of Downey, as Lessee.
Lease Number: DOWCA2018.06BE
Equipment Description: Seven (7) New El Dorado National Class H Buses
Person/Department: Anil Gandhy, Director of Finance, City of Downey
P.O. Box/Street. 11111 Brookshire Avenue/P. 0. Box 7016
City, State, Zip
Telephone Number- 904-7264
Email Address- __.�gandhy@downeyca.si�.......
NOTICE OF ASSIGNMENT
City of Downey
I I I 11 Brookshire Ave
Downey, CA 90241
RE: Schedule of Equipment NO. 01, dated 715/2018. to Master Equipment Lease Purchase Agreement, dated as of
7/5/2018, between Community First National Bank, as Lessor, and City of Downey, as Lessee. Along with the Escrow
Agreement entered into as of 715/2018.
Please be advised that Community First National Bank has assigned all its right, title and interest in, to and
under the above referenced Master Equipment Lease Purchase Agreement (the "Agreement"), the
Equipment leased thereunder and the right to receive Rental Payments thereunder to the following
assignee:
sery
Communitv First National Bank will hp the ipinn tH lease and all Rental Paymerts Ad pay 'Ont f%f
I ---.•--- i - - is aid ym- 61
the Purchase Option Price due under the Agreement will be made to:
i ri
2115 S. Seth Child Road
Manhattan, KS 66502
Signature
Name and Title
ACKNOWLEDGED AND ACCEPTED:
U �_�
Leflurbils
Sean Ashton, Mayor
Attested by City Clerk
Approved as to faffn-City Attorney
Ma;;A__Iicia Duarte, CIVIC Yvette M. Abich Garcia
10111.1k NOON J141-59kLiki- low -
any changes in where to send the rental payments going forward. This assignment option is outlined in Article IX of the Master Equipme
Lease Purchase Agreement.
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, made and entered into as of 7/5/2018 by and among Community First National Bank, a national
ba6kiU a4s"iaticto Uscrow Aaeris:�, Comma 224�-
7VrXflR77WWW-0T-KWK"T-C�"n0 City of rowney ("LeSSOO-) 3 political subdMsion under the I"s ofthilit StA* of California
rs(#�L duly organized and ox"no un4w the Consfitutiont imid ta" Of the ttaltlii�
WITNESSETH
WHEREAS, the Equipment has or will be ordered from the Vendor, and there is expected to be a delay In delivery of the Equipment to Lessee; and
WHEREAS, in order to secure the obligations of Lessor under the Agreement, Lessee has requested Lessor to set aside in escrow with the Escrow Agent,
pursuant to the terms hereof, the anticipated purchase price of the Equipment; and
V1*4EREAS, Lessee, as agent for Lessor, will cause the Equipment to be acquired from Vendor in accordance with the purchase orders or contracts therefore;
and neither Lessor nor the Escrow Agent shall be obligated to assume or perform any obligation of the Lessee or Vendor with respect thereto or under the
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties agree as follows:
ARTICLE I. APPOINTMENT OF ESCROW AGENT: DEFINITIONS
set forth,
�ition td t l tin - The terms detined in this Section shall, for all purposes of this Escrow Agreement have the meanings specified below. Any
capitalized term not defined below shall have the meaning ascribed in the Agreement.
"Agreement"means the Schedule of Equipment No. 01, dated 71512018 to Master Equipment Lease Purchase Agreement dated 7/612018, by and between
Lessee and Lessor and any duty authorized and executed amendment thereto, the lerros of which are Incorporated herein by reference,
"Acquisition Costs" means, with respect to the Equipment. the contract price paid or to be paid to Vendor therefore upon acquisition Or delivery of any portion
engineering, legal, financial and
of the Equipment in accordance with the purchase order or contract therefore, Acquisition Costs include the administrative, engine -i a
"EquIpmeW means the personal property describer
acquired from the moneys hold in the Acquisition Fur
'Escrow Agent" means Community First National Sat
"Escrow Agreemenr means this Escrow Agreement,
"independent Counsel" means an attorney duty admi
is not an employee of Lessor„ the Escrow Agent at th
'Lessee Representallve" means the representative
Agreement.
"Lessor Representative"` means the President, any V1
M
agencies and In stnjmetatities of tt
acquisition, delivery and financing by Lessor of the Equipment.
in the form attached to the Agreement.
ed and held by the Escrow Agent pursuant to Article It of this Escrow Agreement.
the Escrow Agent the moneys required to be deposited pursuant to Article 11.
he Agreement. together with any and all modifications, additions and alterations thereto, to be
any successor thereto acting as Escrow Agent pursuant to this Escrow Agreement.
my duly authorized and executed amendment thereto.
o the practice of law before the highest court of the State in which he maintains an office and who
Me.
mseei or a person authorized by the Lessee to act an its behalf under or with respect to this
resident or Assistant Vice President of Lessor, or any person authorized to act on behalf of Lessor
ay a certificate contorting such authorization executed by the President, any Vice President or
, the Lessee Representative.
ayment under the Agreement is due and payable, as set forth In the Payment Schedule.
illy In the form attached hereto as Exhibit A to be executed by Lessee and Lessor and submitted
51
Clauses (1), (0) or (111): jv) money market funds, the assets of which
rated "Aaal* by Moody's Investors Service or"Am" or "Am-Grl by Star
`Renial Payments" means the basic payments payable by Lessee to
Playable in conjunction at the right of Lessee to use the Equipment di
"Term of the Agreement" means the time during which the Agreemef
"Vendor" means the manufacturer of the Equipment as well as the at
ordered the Equipment or with whom Lessor ties contracted for the a
92coon t -A�l m Each of the parties hereby represents
Agreement, and has taken all actions necessary to authorize the axe
ULU
)bIlitations Of Of guaranteed by the United States of Armrlca rind which funds are
I & Poor's Corporation,
$or pursuant to the provisions of the Agreement during the term thereof which are
l the then current portion of the term of the Agreement.
in effect, as provided in Article III of the Agreement.
; or dealers of the manufacturer from whom Lessor purchased will purchase or has
sition of the Equipment.
i warrants that it has full legal authority and is duly empowered to enter into this
in of this Agreement by the officers and person signing it.
to designated as the "Acquisition Fund"; shall keep such Acquisition Fund separate
r such funds as expressly provided hereunder.
shall deposit with the Escrow Agent the amount ofS�l Lt.. Escrow Agent
rl, applied and disbursed as herein provided.
and shall be expended for lhe Acquisition Costs of the Equipment. Escrow Agent
m, upon receipt from Lessee and Lessor the following items:
ant to a contract or purchase order, (1) a duly executed Payment Request
where applicable, a duplicate original of any change order approved by
Wwi K200"'I
Lessee and Lessor increasing Acquisition Costs in an amount in excess of the original purchase order or contract price, (3) receipts from
the Vendor showing proper application of prior requisitions, (4) bills of sale for any component of the Equipment for which a bill of sale
may be delivered, and (5) an Acceptance Certificate with respect to the Equipment for which disbursement is requested;
(b) in the case of any Acquisition Costs previously paid by Lessee for which it is seeking reimbursement, (1) a duly executed Payment
Request Form, (2) a true copy of Vel statement for such Acquisition Costs, (3) evidence of payment, and (4) evidence of Lessee's
declaration of official intent for reimbursement, which declaration shall have been made no later than 60 days after the Lessee paid the
Acquisition Costs; or
(c) in the case of payment of any other Acquisition Costs, a duly executed Payment Request Form.
�nmdensatlon As compensation for the services to be rendered hereunder, Lessee agrees to pay the Escrow Agent $200.00
("Escrow Agent's Compensation"). The Escrow Agent's Compensation shall be payable from interest earnings an the escrow account and will be paid upon
disbursement of proceeds to the vendor and closing of the escrow account. If the interest earnings an the escrow account are not sufficient to pay the Escrow
Agent's Compensation, Escrow Agent shall provide Lessee with an invoice for the shortfall and Lessee shall pay such amount to Escrow Agent upon demand.
If funds remain in the Acquisition Fund, excluding Acquisition Costs and Escrow Agent's Compensation, after the full delivery and acceptance of the
Equipment, then Lessee and Lessor agree such excess funds shall be retained by Escrow Agent as partial compensation for the performance of its
obligations hereunder.
Section 2.Q5. 1Lq=( Is _Unon Completi Upon the first to occur of (a) payment of all Acquisition Costs with respect to the Equipment; or (b) the one year
anniversary of the Closing Date, Escrow Agent shall apply all remaining moneys in the Acquisition Fund to the next Rental Payment(s) due under the
Agreement by paying such moneys directly to the Lessor or its assignees.
R Hon 06. Termination. If this Escrow Agreement is terminated by Lessor as authorized under Article VII and the Agreement, all moneys in the Acquisition
Fund shall be paid to Lessor or assignees for appfication against moneys due to Lessor under the Agreement. In the event that Lessor provides to the
Escrow Agent written notice of the occurrence of an Event of Default under the Agreement or the termination of the Agreement for any reason other than
Lessee's payment of the applicable Purchase Option Price, Escrow Agent shall immediately remit any and all funds in the Acquisition Fund to Lessor.
ARTICLE 111. MONEYS IN FUNDS: INVESTMENTS; TERMINATION
cliorl Held in IgUS1, The moneys and investments held by the Escrow Agent under this Escrow Agreement are irrevocably held intrust for the benefit
of the Lessee and for the purposes herein specified. Such moneys, and any income or interest earned thereon, shall be expended only as provided in this
Escrow Agreement, and shall not, to the extent permitted by applicable law, as otherwise expressly provided herein, be subject to levy or attachment or lien
by or for the benefit of any creditor of either Lessor or Lessee.
Moneys held by the Escrow Agent hereunder may be invested, and upon written order of the Lessee Representative
shall, be invested by the Escrow Agent in Qualified Investments. Such investments shall be registered in the name of the Escrow Agent and held by Escrow
Agent which may act as a purchaser or agent in making or disposing thereof. Such investments and reinvestments shall be made giving full consideration
for the time when funds will be required to be available for acquisition.
er bort x.03. Accatunllnrt:, The Escrow Agent shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it
in accordance with this Escrow Agreement.
&, i
11 j l n
ion 3 � - 4t V 12 V I Ji _In 1 l n f n t For the purpose of determining the amount in the Acquisition Fund, all Qualified Investments credited
to such fund shall be valued at cost (exclusive of accrued interest after the first interest payments following purchase). Escrow Agent may sell at the best
price obtainable, or present for redemption, any Qualified Investment so purchased by Escrow Agent, whenever it shall be necessary in order to provide
moneys to meet any required payment, transfer, withdrawal or disbursement from the Acquisition Fund to which such Qualified Investment is credited and
Escrow Agent shall not be liable or responsible for any loss resulting from such investment.
§_ecl 3SA&Wsit of Moneys in 6gqqjljHon Fund: All moneys held by the Escrow Agent in the Acquisition Fund established pursuant to this Agreement,
except such moneys which are at the time invested as herein provided, shall be deposited in demand or time deposits (which may be represented by time
certificates of deposit) in any bank or trust company authorized to accept deposits of public funds (including the banking department of the Escrow Agent),
and, as and to the extent required by law, shall be secured at all times by obligations which are eligible by law to secure deposits of public moneys. Such
obligations shall be deposited with such bank or banks as may be selected by Escrow Agent, and held by or for the account of the Escrow Agent as security
for such deposits.
aa ; . �Ttton Unless earlier terminated pursuant to Article VII, this Escrow Agreement shall terminate upon the final distribution of all moneys
in the Acquisition Fund.
ARTICLE IV. THE ESCROW AGENT
glgk"4 The Lessee and Lessor, by written agreement between themselves, may by written request, at any time and for
any reason, remove the Escrow Agent and any successor thereto, and shall thereupon appoint a successor or successors thereto, but any such successor
shall have capital (exclusive of borrowed capital) and surplus of at least Ten Million Dollars ($io,oca,aaa), and subject to supervision or examination by
federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to statute or to the requirements of any
federal or state supervising or examining authority, to, then for the purposes of this Section the combined capital and surplus of such bank or trust company
may be conclusively established for the purposes hereby in its most recent report of condition so published.
The Escrow Agent or any successor may at any time resign by giving written notice to the Lessee and Lessor
of its intention to resign and of the proposed date of resignation, which shall be a date not less than 60 days after such notice, unless an earlier resignation
date and the appointment of a successor Escrow Agent shall have been or are approved by Lessee and Lessor. Upon receiving such notice of resignation,
the Lessee and Lessor shall promptly appoint a successor Escrow Agent by an instrument in writing; provided however, that in the event the Lessee and
Lessor fail to appoint a successor Escrow Agent within 30 days following receipt of such written notice of resignation, Lessor may appoint a successor
Escrow Agent, and in the event that Lessor fail to appoint a successor Escrow Agent within 30 days following the expiration of such initial 30 -day period, the
resigning Escrow Agent may petition the appropriate court having jurisdiction to appoint a successor Escrow Agent. Any resignation or removal of the
Escrow Agent shall become effective only upon acceptance of appointment by the successor Escrow Agent.
A 11.1111 1 of Agent; The Escrow Agent may appoint an agent acceptable to the Lessee and Lessor to exercise any of the powers, rights or
remedies granted to the Escrow Agent under this Escrow Agreement, and to hold title to property or to take any other action which may be desirable or
necessary.
Section 4.(34. Mercer or Consolidation Any company into which the Escrow Agent maybe merged or converted, or with which it may be consolidated, or
any company resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which the Escrow Agent may sell or
transfer all or substantially all of its corporate trust business (provided that such company shall be eligible under Section 4.02) shall be the successor to the
Escrow Agent without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.
Section 4.05, Protection arid Rights of the Egerow Agent. The Escrow Agent shall be protected and shall incur no liability in acting or proceeding in good
Il upon any resolution. notice. telegram, request. consent, waiver, certificate, statement, affidavit, voucher, bond, requisition or other paper or document
which it shall in good faith believe to be genuine and to have been passed or signed by the proper board or person or to have been prepared and furnished
pursuant to any of the provisions of this Escrow Agreement, and the Escrow Agent shall be under no duty to make any investigation or inquiry as to any
statements contained or matters referred to in any such instrument, but may accept and rely upon the same as conclusive evidence of the truth and accuracy
of such statements. The Escrow Agent may consult with Independent Counsel who may be counsel to Lessor or Lessee, with regard to legal questions,
and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good
faith in accordance therewith.
— 18 --MulniStd
The recitals, statements and representations by Lessee and Lessor contained in this Agreement shall be taken and construed as made by and on the part
of the Lessee and Lessor,, as the case may be, and not by the Escrow Agent, and the Escrow Agent does not assume, and shall not have, any responsibility
or obligation for the Correctness of any thereof.
ARTICLE V. ASSIGNMENTS; AMENDMENTS
ail or any part or its interest in this Agreement and the Acquisition Fund established hereunder in connection with an as igt
subject to the provisions contained therein.
I( tr 0' ,,,,Amen rnen . This Escrow Agreement may be amended in writing by agreement among all of the parties.
ARTICLE VI. FURTHER ASSURANCES
1 E r Ar . Lessor and Lessee will make, execute and deliver any and all such further resolutions, instruments and assurances as
may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Escrow Agreement, and for better assuring and
confirming the rights and benefits provided herein.
ARTICLE VII. DEFAULT OR NON -APPROPRIATION
" ctlon y 1. Det #sit.
(a) Lessor shall have the right to terminate this Escrow Agreement upon an Event of Default under the Agreement, or termination of the Agreement
pursuant to Section 4.05 thereof, which right shall not be exercised less than 15 days after Lessor shall have given Lessee written notice of such
default or termination for non -appropriation. Upon receipt of notice of termination from Lessor, Escrow Agent shall pay to Lessor, or its assignee,
all moneys in the Acquisition Fund in accordance with Section 2.06.
(b) In the event of the failure by any party hereto to observe and perform any covenant, condition or agreement on its part to be observed or performed
under this Escrow Agreerrjent, any non -defaulting party hereto shall have all of the rights and remedies now or hereafter existing at law or in equity
against the defaulting panty.
(c) No delay or omission to exercise any such nghtor power accruing upon any default 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.
ARTt l,E IX. MISCr:LLAYg9VS
aato(irn Ot decor
The. Escrow Agent -shall keep complete and accurate records of all moneys received and disbursed under this Escrow Agreement,
which shall be available for inspection by the Lessee. Lessor, or the agent of either of them, at any time during regular business hours.
M 11 s. All written notice to be given under this Escrow Agreement shall be given by mail to the party entitled thereto at address set forth'
below, or at such address as the party may provide to the other parties in writing from time to time. Any such notice shall be deemed to have been received
72 (tours after deposit in the United Slates mail in registered or certified form, with postage fully prepaid.
t n f' v' rrtts' ur 'rhis Escrow Agreement shall be construed and governed in accordance with the laws of the Slate of Kansas.
res l r?I �t P rtva I' Any provision of this Escrow Agreement found to be prohibited by laws shall be ineffective only to the extent of such
prohibition, and shall not invalidate the remainder of this Escrow Agreement,
RA. PURAI APRI kloms lit
A w-- WNW
b0006t Of ilurrnikd SUMSOM and A"irmA or notAo onressed.
J-Q�r ris. This Escrow Agreement may be executed in several counterparts, each of which shall be an original and all of
one and the same aoteomont.
The headings or titles of the several Articles and Sections hereof, and any tables of contents appended to copies hereof, shall be
0,retmde and other wo�is of sM.1ar Im rt e#le to ft oreerne as a e (ticu Atdo, action or ArArl WWon heiodt
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the date and year first above writtem
ESCROW AGENT:
215 S. Seth Child Road
Manhattan, KS 66502
Signature
LESSOR:
12,ft r, 2: 21
215 S. Seth Child Road
Manhattan, KS 66502
Signature
11111111110MIIIA r1WRIM
Sean Ashton, Mayor
zMMz8zH=
Maria Alicia Duarte, CIVIC
Approved as to form -City Att' y
tq� —
11—k—fly, Abich Garcia
�M
EXHIBIT A
PAYMENT REQUEST FORM
at Ir- Kaio Kola] ale
By executing this Payment Request Form the Lessee hereby represents that the Payee or Payees listed above who are requesting payment have delivered
the Equipment or a portion of the Equipment or performed the services to the satisfaction of the Lessee and that the amounts requested above by the Payee
or Payees are proportionate with the value of the Equipment delivered or services rendered by the Payee or Payees.
Partial DisburstmoriL The undersigned certifies that the following documents are attached to this Payment Request Form when there is a request for a
partial release of funds from the Escrow Account to pay for a portion of the Equipment: (1) Invoice from the Vendor, (2) copy of the agreement between
Lessee and Vendor (if requested by the Lessor or Escrow AgenQ, (3) front and back copy of the original MSO/Tide (if payment from Escrow Account is for
a chassis) listing Community First Naflonal Bank and/or Its assigns as the first lien holder. By executing this Payment Request Form and attaching the
documents as required above, the Lessee shall be deemed to have accepted this portion of :I for all purposes under the Lease, including,
without limitation, the obligation of Lessee to make the Rental Payments with respect thereto in a proportionate amount of the total Rental Payment By
executing this Payment Request Form Lessee agrees that Lessee is One Ode owner to this portion of the Equipment and that in the event that any third party
makes a claim to such title that Lessee will take all measures necessary to secure Ode including, without limitation, the appropriation of additional funds to
secure title to this portion of the Equipment and keep the Lease in full force and effect.
Final DIsbutadmant The undersigned certifies that the following documents are attached to this Payment Request Form when there is a final release of
funds from the Escrow Account: (1) Final Vendor Invoice, (2) Signed Acceptance Certificate, (3) insurance Certificate, (4) front and back copy of the original
MSOMtle listing Community First National Bank and/or its assigns as first lien holder (if not already received). By executing this Payment Request Form
and attaching the documents as required above. the Lessee shall be deemed to have accepted the Equipment for ad purposes under the Lease, Including,
without Urriltation, the obligation of Lessee to make the Rental Payments with respect thereto. By executing this Payment Request Fbm*L4sseoceAAds
that Lessee is the fide owner to the Equipment and that in the event that any third party makes a claim to such i* OW teiiie will bft ad measures
necessary to secure title Including, without 11mitabon, the appropriation of addonal funds to secure Otte to the Equipment and keep the Lease in full force
and a ffeV,.
LORM-1fiso=
Seen Ashton, Mayor
Attested by City Clerk
4V
Maria Alicia Duarte, CMC 'v. . . . Abidi Garcia
— 21 —MuniStd
f
1.3. To the best Of the undersigned's knowledge, information and belief, the expectations contained in NSOOrtificatir are reasonable.
not be rallied upqdl
am ::i r1111jow Fildil of illiallungaltil,ofr k1l) Will [lot 1°
the some source, Of fistsis a* ft Onancing pursue to the Financing Documents.
Installing the
and delivered
}, } # }
IMUMM
art l6i OW A LeSsiat undelr tha Financing
essee shall not : r - f f r f e ♦-.': }' .1 f- FF r a: T-
0 -
k. t. Lessee expects, within six months from the date of issuance of the Financing Documents, (a) to have had disbursed from escrow an amount in excess
f the lesser 2 112% of the amount deposited by Lessor in escraw or $100,000, or (b) to enter" into binding obligations with third parties obligating Lessee to
)end such amount.
2, The, ordering and acceptance of the items of EqUIPMeAt will proceed with due diligence to the date of final acceptance of the Equipment.
3. The items of Equipment being acquired by Lessee will be delivered at various times. At least 1151/a of the sum of the amount deposited in escrow and
e reasonably anticipated interest earnings thereon will be used to pay the acquisition price of items of Equipment within six months from the date of
tveuy. rAny manses rvntclt arc earned from the investment of these
proanptly alter the date that Lessee accents the equipment.
rents to the vendor(s) or manufacturer(s) of the
tr the Financing Documents being treated as an
)t of the internal Revenue Code of 1985 as
shall be labeled as interest earned, All such
. Exen t tlso.
6,1. No part of the proceeds of the Financing Documents or the Equipment will be used in any "private business use" within the meaning of Section 141(b)(6)
of the Internal Revenue Code of 1986;; as amended.
6.2. No part of the proceeds of the Financing Documents will be used, directly or indirectly, to make or finance any loans to non-governmental entities or to
any governmental agencies other than Lessee.
7, N9 Fedefa) & ntees
7.1. Payment of the principal or interest due under the Financing Documents isnot directly or indirectly guaranteed, in whole or in part, by the United States
or an agency or instrumentality thereof.,
72. No portion of the proceeds under the Financing Documents shall be (i) used in making loans, the payment of principal of interest of which are to be
guaranteed, In whole or in part„ by the united States or any agency or instrumentality thereof, or (ii) invested, directly or indirectly, In federally insured
deposits or accounts tf Such investment would cause the financing under the Financing Documents to be federally guaranteed within the meaning of Section
149(b) of the Code.
8. Miscellaneaus.
8.1. Leasee agrees to comply with the rebate requirement set forth in Section 148(f) of the Code in the event that for any reason it is applicable to the
financing pursuant to Financing Documents,
82. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in corm and substance satisfactory to comply
with Section 149(a) of the Code unless Lessor or its assignee agrees to act as Lessee's agent for such purpose.
81. Lessee shalt maintain complete and accurate records establishing the expenditure of the proceeds of the Financing Documents and interest earnings
thereon for a period of five years atter payment in full under the Financing Documents.
IN WITNESS WHEREOF, this Tax Compliance Agreement and No Arbitrage Certificate has been executed on behalf of Lessee as of the date set forth
below.
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk Approved as to form -City Attorney
Maria Alicia Duarte, CMC y1ta lvt, mo arc
ForMS03" ' Information Return for Tax -Exempt Governmental Obligations
(Rev. September 2011) 1111, Under Internal Revenue Code section 149(e) OMB No. 1545-0720
Department of the Treasury 11b See separate instructions.
Internal Revenue 84NIce Caution: If the Issue price is under $100,000, use Form 8038 -GC.
I Issuer's name
aly of Downey
311 Nam than issuer) with whom the IRS may communicate about this return (see Instruc io
4 Number and street (or P.O. box if mail is not deliv
11111 Brookshire Ave
6 City, town� or post office, state, and ZIP code
06#qM CA 90241
8 Name of Issue
M, 0
wil&'d
10a Name and title of officer or other employee of the
instructions)
whom the IRS may call for more Information (see
wrinell mewd t"MMIt1, a 8f8j
2 Issuer's employer identification number (EIN)
95.1918226
3b Telephone number of other person shown an 3a
5 Report number (For IRS Use Onlo
3
7 Date of issue
71512018
9 CUSIP number
10b Telephone number of officer or other
employee shown an 10a
(d) Weighted
average maturity
Pert
V
MM"61111611161 III I
-III
Ir-IMMAHM-1111 I
Port,
V
A
For Paperwork Reduction Act Notice, see separate instructions . . . . . . . . . . CaL No. 63773S
Form 803