HomeMy WebLinkAbout14. Adopt Reso Approving Master Equip Lease for purchase of two AmbulancesTO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: OFFICE OF THE CITY MANAGER
BY: MARK GILLASPIE, FIRE CHIEF APPROVED 13y
DATE: JUNE 26, 2018 CITY MANAGER
SUBJECT: APPROVAL OF A PURCHASE OF TWO REPLACEMENT AMBULANCES ANQ
A MASTER EQUIPMENT LEASE PURCHASE AGREEMENT WITH COMMUNIT]
FIRST NATIONAL BANK
A. Adopt Resolution No. : A 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 TW4
AMBULANCES
I IT! i I! I I I i I i I! I I is
C. Approve the Tax Compliance Agreement and No Arbitrage Certificate and Authorize the
Mayor to Execute the Agreement
The Fire Department transports more than 6,000 sick and injured patients to local hospitals'
emergency rooms annually. The fire department's ambulance fleet is comprised of seven
ambulances, which currently average approximately 92,000 miles and 8 years in age. Four
ambulances serve as front-line apparatus while three is ambulances routinely alternate in
reserve. Reliability is a vital requirement when providing life-saving transportation to those in
despair. Mechanical failures during emergency incidents must be avoided whenever possible.
The estimated cost for one 2018 Ford F-450 Type III Road Rescue Ultramedic 168 ambulance is
$229,743.65. Staff recommends replacing two ambulances. The Fire Department's apparatus
committee selected the Road Rescue ambulance over other manufacturers (Leader and Braun)
due to van cab configuration, shorter wheel base, uniformity of spare parts, modular box,
standardized compartments, and satisfaction with the department's other similar ambulances.
Personnel have not been pleased with prior ambulances from other manufacturers and the fire
mechanic has found dissimilar ambulances to be more costl-�yj due to fleet inconsistencies as such
standardization of the ambulance fleet was a major reason Road Rescue was selected.
Emergency Vehicle Group, Inc. (EVG) is the local vendor which has manufactured and supported
the department's current ambulance fleet. EVG meets the department's ambulance specifications
and shall ensure consistency within the ambulance fleet.
FIRE DEPARTMENT REPLACEMENT AMBULANCES
JUNE 26, 2018
PAGE2
Staff also thoroughly evaluated reputable financing companies and determined that the attached
agreement with Community Leasing Partners contains more favorable terms for the City. This
program is essentially a loan whereby the City borrows funds in order to acquire expensive
piece(s) of equipment, The ability to acquire this equipment was made possible by the lease
purchase program, preserving the City's capital.
FISCAL IMPACT
Total purchase price for two ambulances is $459,487.30 including taxes and Department of
Motor Vehicle fees. A five year lease payment for these apparatus is recommended. The lease
agreement would require five annual payments of $100,370.33 at an interest rate of 3.87% with
the first payment upon acceptance of the vehicles (estimated November 1, 2018). At the end o
the lease term, the City has the option to retain ownership ofthe •
ATTACHMENTS
Attachment A - Emergency Vehicle Group (EVG) Offer and Purchase Agreement
Attachment B - Resolution and Master Equipment Lease Purchase Agreement
Attachment C - Escrow Agreement
Attachment D - Tax Compliance Agreement and No Arbitrage Certificate
�
The Following is ~ an Offer and Purchase Agreement for:
Downey Fire Department To Purchase
Two (2) Road Rescue Type 1U Ultramnedic 168 Ammbulance(s) on 2018 Ford E450\4 x 2, Gasoline
Powered Cutaway Van(s)
May 4, 2018
All prices are quoted to include Ford GPC Rebates. Pricing is subject to change ifthe current rebate/GPComount
changes orbecomes unavailable per vehicle. |fthe Ford rebates amount changes, the difference will beinvoiced tu
the Downey Fire Department. Price is subject to change and will be recalculated if additional options are
Description My Price Each Extended Price
Two (2) Road Rescue Type III Ultramedic 168 2 $208,774.00 $417,548.00
Ambulance(s) on 2018 Ford E450' 4 x Z' Gasoline
Powered Cutaway Van Chassis
Chassis VIN mumbe,(s): TxoeDetermined After Production
Start '
Tax (Based onRate of1OY6) 2 $20,877.40 $41,754.80
Tire Fee 2 $12.25 $24.50
Document Fee Z $80.00 $160.00
Total Purchase Price 2 $229,743.65 $459,487.30
�
This constitutes acontract for the purchase and sale of Two (2) Road Rescue Type III Ultramedic 168 Ambulance(s)
on 2018 Ford E4504xZ,Gasoline Powered Cutaway Van chassis between Emergency Vehicle Group, Inc. (Seller)
and the Downey Fire Department (Buve/)inthe total amount of:
Four Hundred Fifty Nine Thousand Four Hundred Eighty Seven Dollars and Thirty Cents
$459,487.30
Offer based on work order/specification reference number 01085f2VV5N4 and any associated drawing(s) as
provided. A final approval work order/specification and drawing will be provided after all Pre -Construction changes
are completed (if applicable). Pre -Construction changes may incur an additional cost.
Payment Terms: 100% payment of the contract is due at the time of delivery. Failure to pay the contract in full may
result in interest accruing at an annual percentage rate of 0%. Proof of insurance and approved financing or
payment will berequired toexecute this contract.
Delivery Time: Delivery shall be 120 days after receipt of chassis and approved work order and production drawings
ofthe vehicle.
Signature below represents acceptance ofabove contract and terms:
[Signature Date M
Emergency Vehicle Gnuum�
5/4/2018
Signature Date
Chris
Regional Account Manager
Tit e Titre--
2883scoronaduSt.mmheim,m92806
Tel: 714-238-0110 Fax: 714-238-0120
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APPR01T4VJ9JV41QkSXEbt-�I Pill E-1-14 LEASE P1KG?iAb-E-AUKt"lLr1 I
AND SCHEDULE OF EQUIPMENT NO. 1 WITH COMMUNITY FIRST
NATIONAL BANK IN CONNECTION WITH THE ACQUISITION OF TWO
AMBULANCES
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 two Ford E450
Road Rescue Type 3 Ambulances ("Equipment") described in the Master Equipment
Lease Purchase Agreement and Schedule of Equipment No. 1 presented to the City
Council this meeting and that it is appropriate to finance the acquisition of the Equipment in
this manner; and
WHEREAS, the City of Downey has taken the necessary steps under applicable law to
arrange for the acquisition and financing of such Equipment.
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF DOWNEY DOES
HEREBY RESOLVE AS FOLLOWS:
SECTION 1. That the Master Equipment Lease Purchase Agreement and 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 of such Equipment, and the City Council
designates and confirms that either individual listed below is authorized to execute and
deliver on behalf of the City the Master Equipment 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, MAYOR OR GILBERT A. LIVASi CITY MANAGER
CITY OF DOWNEY CITY OF DOWNEY
SECTION 2. The above-named representatives of the City held the r posit on o ayor
and City Manager at the time of such authorization, and at the present time hold their
respective offices as set forth above.
SECTION 3. The meeting of the Downey City Council at which the Agreement and the
Schedule were approved and authorized to be executed was duly called, regularly convened
and attended throughout by the requisite majority of the members thereof and that the action
approving the Agreement and the Schedule and authorizing the execution thereof has not
been altered or rescinded.
SECTION 4. No event or condition that constitutes, or with the giving of notice or the
lapse of time or both would constitute, an Event of Default (as such term is defined in the
Agreement), exists as of the date of this Resolution adoption.
SECTION 5. All insurance required in accordance with the Agreement is currently
maintained by the City of Downey.
SECTION 6. 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.
SECTION 7. The fiscal year of the City of Downey is July 1 to June 30.
SECTION 8, The City Clerk shall certify to the adoption of this Resolution.
APPROVED AND ADOPTED this _day of 201&
SEAN ASHTON, Mayor
MARIA ALICIA DUARTE, CMC
City Clerk
I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council of
the City of Downey at a regular meeting held on the day of 2018, by the
following vote, to wit:
AYES:
Council Members:
NOES:
Council Member:
ABSENT:
Council Member:
ABSTAIN:
Council Member:
MARIA ALICIA DUARTE, CMC
City Clerk
ATTACHMENT A
This Master Equipment Lease Purchase Agreement, including all exhibits and schedules hereto whether currently inexistence
or hereafter executed (the "Agreement"), dated as of 7/5/2018, and entered into between Community First National Bank 215 S.
Seth Child Rd, Manhattan, KS 66502 ("Lessor'), and City of Downey, 11111 Brookshire Ave, Downey, CA 90241 a municipal
corporation and charter city duly organized and existing under the laws of the State of California ("Lessee");
RECITALS
WHEREAS, Lessee desires to lease from Lessor certain equipment described in the schedules to this Agreement, substantially in the form of Exhibit A
hereto, that are executed from time to time by the parties hereto (such schedules are hereby incorporated herein and are hereinafter collectively referred
to as the "Schedules", and the items of equipment leased to Lessee hereunder, together with all substitutions, proceeds, replacement parts, repairs,
additions, attachments, accessories and replacements thereto, thereof or therefore, are hereinafter collectively referred to as the "Equipment") subject to
the terms and conditions of and for the purposes set forth in this Agreement.
WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to or deleted from the Equipment from
time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein.
WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement for the purposes set forth herein.
NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows:
ARTICLE I. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE
Sect+on 1.81. Lessee reoresents, oavenartts and warrents. fear the benefit of Lessor and its assidngas, as tollowss
(a) Lessee is a municipal corporate and charter city, duly organized and existing under the Constitution and laws of the State.
(b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and affect its existence as a body corporate and politic.
Lessee is a political subdivision of the State within the meaning of Section 103(a) of the Code.
(c) Lessee has full power and authority under the Constitution and laws of the State to enter into this Agreement and the transactions contemplated
hereby, and to perform all of its obligations hereunder.
(d) Lessee has duly authorized the execution and delivery of this Agreement by proper action by its governing body at a meeting duly called,
regularly convened and attended throughout by the requisite majority of the members thereof, or by other appropriate official approval, and all
requirements have been met and procedures have occurred in order to ensure the enforceability of this Agreement.
(e) Lessee has complied or will comply with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee
of the Equipment.
(f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing one or more essential governmental or
proprietary functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any
person or entity other than Lessee.
(g) During the Lease Term, Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing
fiscal year and such other financial information relating to the ability of Lessee to continue this Agreement as may be reasonably requested by
Lessor.
(h) The Equipment will have a useful life in the hands of Lessee that is substantially in excess of the Original Term and all Renewal Terms.
(i) The Equipment is, and during the Lease Term will remain personal property and when subjected to use by the Lessee, will not be or become
fixtures.
The Equipment is essential to the function of the Lessee and the services provided to its citizens, and will be used throughout the period that this
Agreement is in force for the purpose of performing one or more governmental or proprietary functions consistent with the permissible scope of its
authority.
(k) During the term of this Agreement, Lessee will not dispose of or sell any part of the Equipment.
(1) Lessee has not terminated a lease, rental agreement, installment purchase contract, or any other print of such agreement in the past five (5)
years as a result of insufficient funds being appropriated for payments due under such an agreement.
(m) This Agreement constitutes the legal, valid and binding obligation of Lessee enforceable in accordance with its terms, except to the extent limited
by applicable bankruptcy, insolvency, reorganization or other laws affecting creditors' rights generally.
(n) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the
date of this Agreement.
(0) Lessee has, in accordance with the requirements of law, fully budgeted and appropriated sufficient funds for the current fiscal year to make the
Rental Payments scheduled to come due during the current fiscal year and to meet its other obligations under this Agreement for the current
fiscal year, and such funds have not been expended for other purposes.
(p) As of the date of this Agreement there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public
board or body, pending or threatened against or affecting Lessee, nor to the best knowledge of Lessee is there any basis therefore, wherein an
unfavorable decision, ruling or finding would materially adversely affect the transactions contemplated by this Agreement or any other document,
agreement or certificate which is used in the consummation of the transactions contemplated by this Agreement or materially adversely affect the
financial condition or properties of Lessee.
(q) All authorizations, consents and approvals of governmental bodies or agencies required in connection with the execution and delivery by Lessee
of this Agreement or in connection with the carrying out by Lessee of its obligations hereunder have been obtained.
(r) The entering into and performance of this Agreement or any other document or agreement contemplated hereby to which Lessee is or is to be a
party will not violate any judgment, order, law or regulation applicable to Lessee or result in any breach of, or constitute a default under, or result
in the creation of any lien, charge, security interest or other encumbrance on any assets of Lessee or the Equipment pursuant to any indenture,
mortgage, deed of trust, bank loan or credit agreement or other instrument to which Lessee is a party or by which it or its assets may be bound,
except as herein provided,
ARTICLE II. DEFINITIONS
"Agreement" means this Master Equipment Lease Purchase Agreement, including the Schedules and any other schedule, exhibit or escrow agreement
made a part hereof by the parties hereto, whether currently in existence or hereafter executed, as the same may be supplemented or amended from time
to time in accordance with the terms hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and the United States Treasury Regulations in effect thereunder.
"Commencement Date" means, with respect to any Schedule, the date when the term of this Agreement with respect to that Schedule and Lessee's
obligation to pay rent under that Schedule commence, which date shall be the earlier of (i) the date on which the Equitment listed in that Schedule is
accepted by Lessee in the manner described in an Acceptance Certificate substantially in the form of Exhibit D hereto, or (ii) the date on which sufficient
moneys to purchase the Equipment listed on that Schedule are deposited by Lessor for that purpose with an escrow agent.
"Equipment" means the property described in the Schedules and all 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, (i) 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 (ii) if
Lessor's 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 this Agreement as it relates to those 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 part, (i) if Lessor'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 Proceeds" 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 collection 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 that 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.
"State" means the state in which Lessee is located.
"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 Ill. LEASE TERM
Section 3.01. Leas, �ofE ui �ment. Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor, the Equipment
listed in each Schedule in accordance with this Agreement and that Schedule for the Lease Term for the Lease of which that Schedule is a part. The
Lease Term for each Lease may be continued at the end of the Original Term or any Renewal Term for an additional Renewal Term; provided, however,
that at the end of the Original Term and at the end of each Renewal Term, Lessee shall be deemed to have continued that Lease for the next Renewal
Term unless Lessee shall have terminated that Lease pursuant to Section 4.06 or Section 5.04. The terms and conditions during any Renewal Term
shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the Schedules. Lessor
hereby covenants to provide Lessee during the Lease Term with quiet use and enjoyment of the Equipment, and Lessee shall during the Lease Term
peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor, except as expressly set forth in this
Agreement.
�Jectioa 3.02. Continuation of LegIg Term, Lessee currently intends, subject to Section 4.06, to continue the Lease Term for each Lease through the
Original Term and all of the Renewal Terms and to pay the Rental Payments hereunder. Lessee reasonably believes that legally available funds in an
amount sufficient to make all Rental Payments during the Lease Term for each Lease can be obtained. The responsible financial officer of Lessee shall do
all things lawfully within his or her power to obtain and maintain funds from which the Rental Payments may be made, including making provision for the
Rental Payments to the extent necessary in each proposed annual budget submitted for approval in accordance with applicable procedures of Lessee and to
exhaust all available reviews and appeals in the event such portion of the budget is not approved. Notwithstanding the foregoing, the decision whether or
not to budget or appropriate funds or to extend a Lease for any Renewal Term is solely within the discretion of the then current governing body of Lessee,
Spetion 3,0 3. Return of on TerminAtipin. Upon expiration or earlier termination of any Schedule under any provision of this Agreement at a
time when Lessee does not exercise its option to purchase the Equipment described in that Schedule under the provisions of this Agreement, Lessee shall
deliver, at Lessee's expense, the Equipment described in that Schedule to Lessor in the same condition as existed at the Commencement Date, ordinary
wear and tear expected, packaged or otherwise prepared in a manner suitable by shipment by truck or rail common carrier at a location specified by
Lessor.
Section 3,04, Conditions to Lessor's Performance under Schedules:, As a prerequisite to the performance by Lessor of any of its obligations pursuant to
the execution and delivery of any Schedule, Lessee shall deliver to Lessor the following:
(a) A Lessee Resolution executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as
Exhibit B, completed to the satisfaction of Lessor;
(b) An Opinion of Counsel to Lessee in substantially the form attached hereto as Exhibit C respecting such Schedule and otherwise satisfactory to
Lessor;
(c) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems
necessary or appropriate at that time;
(d) Such other items, if any, as are set forth in such Schedule or are reasonably required by Lessor.
This Agreement is not a commitment by Lessor to enter into any Schedule not currently in existence, and nothing in this Agreement shall be construed to
impose any obligation upon Lessor to enter into any proposed Schedule, it being understood that whether Lessor enters into any proposed Schedule shall
be a decision solely within Lessors discretion.
Lessee will cooperate with Lessor in Lessor's review of any proposed Schedule. Without limiting the foregoing, Lessee will provide Lessor with any
documentation or information Lessor may request in connection with Lessor's review of any proposed Schedule. Such documentation may include,
without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the
financial status of Lessee and other matters related to Lessee.
ARTICLE IV. RENTAL PAYMENTS
Section 4.01, Rental Payments to Constitute -A_ Current, ExgAnw of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to
pay Rental Payments hereunder shall constitute'a current expense of Lessee and shall not 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.
— 2 —MuniStd - LCR
Section 4.02, Payment of Rental Payments. Lessee shall pay Rental Payments, exclusively from legally available funds, in lawful money of the United
States of America, to Lessor or, in the event of assignment by Lessor, to its assignee, in the amounts and on the dates set forth in each Schedule. Rental
Payments shall be in consideration for Lessee's use of the Equipment during the applicable year in which such payments are due. The Rental Payments
will be payable without notice or demand at the office of Lessor (or such 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 the maximum rate allowed by law. In the event that it is determined that any of the interest components
of Rental Payments may not be excluded from gross income for purposes of federal income taxation, Lessee agrees to pay to Lessor promptly after any
such determination and on the date of each Rental Payment thereafter an additional amount determined by Lessor to compensate Lessor for the loss of
such excludability (including without limitation, compensation relating to interest expense, penalties or additions to tax), which determination shall be
conclusive absent manifest error.
Section 4.03. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the balance of
each Rental Payment is paid as, and represents payment of, principal. Each Schedule will set forth the interest component and the principal component of
each Rental Payment during the Lease Term.
Section 4.04. Rental Payments to be Unconditionat The obligations of Lessee to make payment of the Rental Payments required under this Article IV
and other sections hereof, and to perform and observe the covenants and agreements contained herein, shall be absolute and unconditional in all events,
except as expressly provided under this Agreement. Notwithstanding any dispute between Lessee and Lessor, any Vendor or any other dispute between
Lessee and Lessor, any Vendor or any other person, Lessee shall make all payments of Rental Payments when due and shall not withhold any Rental
Payments pending final resolution of such dispute, nor shall Lessee assert any right of set-off or counterclaim against its obligation to make such
payments required under this Agreement. Lessee's obligation to make Rental Payments during the Original Term or the then -current Renewal Term for
each Schedule shall not be abated through accident or unforeseen circumstances.
Section 4.05. Continuation of Lease Term by Lessee. Lessee intends, subject to the provisions of Section 4.06, to continue the Lease Term for each
Lease through the Original Term and all of the Renewal Terms and to pay the Rental Payments hereunder. Lessee reasonably believes that legally
available funds of an amount sufficient to make all Rental Payments during the Original Term and each of the Renewal Terms for each Lease can be
obtained. Lessee further intends to do all things lawfully within its power to obtain and maintain funds from which the Rental Payments may be 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.
Section 4.06. Non appropriation, 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 shall be deemed terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver written
notice to Lessor of such termination at least 60 days prior to the end 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.
ARTICLE V. TITLE TO EQUIPMENT; SECURITY INTEREST; OPTION TO PURCHASE
Section 5.01. Title to the _ffiquipMant. Upon acceptance of the Equipment by Lessee, title to the Equipment and any and all additions, repairs,-
replacements
epairs,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.
aqgticrn 5.02. Security Interest: To secure the payment of all Lessee's obligations under this Agreement, Lessee grants to Lessor a security interest
constituting a first lien on (i) the Equipment and on all additions, attachments, accessions, that are considered to be an integral part of the equipment, and
substitutions thereto, and on any proceeds there from, and (ii) 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.
Section 5.03._ Personal Prqperty, Lessor and Lessee agree that the Equipment is and will remain personal property and will not be deemed to be affixed
to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any
manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a
waiver of any interest in the Equipment from any party having an interest in any such real estate or building.
Section 5,04. Lessee shall have the option to purchase Lessor's interest in all (but not less than all) of the Equipment described in
any Schedule, 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 following terms:
(a) On the date of the last Rental Payment set forth in that Schedule (assuming this Agreement is renewed at the end of the Original Term 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 then 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 on 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.
ARTICLE V1. DELIVERY, MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES
Section 6.01, Deliverv. Installation and Acceptance of EgOpment, Lessee shall order the Equipment, cause the Equipment to be delivered and installed
at the locations specified in the Schedules and pay any and all delivery and installation costs in connection therewith. When the Equipment listed in any
Schedule has been delivered and installed, Lessee shall immediately accept such Equipment and evidence said acceptance by executing and delivering
to Lessor an Acceptance Certificate in the form attached hereto as Exhibit D.
Section 6,02, Locatiom Ins action. Once installed, no item of the Equipment will be moved from the location specified for it in the Schedule on which that
item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during
regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment.
Seption 6.03, Maintenance of Equipment by Lessee. Lessee agrees that at all times during the Lease Term Lessee will, at Lessee's own cost and
expense, maintain, preserve and keep the Equipment in good repair, working order and condition, and that Lessee will from time to time make or cause to
be made all necessary and proper repairs, replacements and renewals. Lessor shall have no responsibility in any of these matters, 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.
Section 6.04. Lions, Taxes, Other Govemmentat Lessee shall keep the Equipment free of all liens, charges and
encumbrances except those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a governmental or
-- 3 —MuniStd - LCR
proprietary purpose of Lessee and, therefore, that the Equipment will be exempt from all taxes presently assessed and levied with respect to personal
property. In the event that the use, possession or acquisition of the 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 modification, improvement or addition 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 respect 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
affirmative 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
excluded from Lessor's income pursuant to the Code.
Section 6,05. Provisions RegaLdjqqjaggMnM 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 risks reasonably
required by Lessor, in an amount at least equal to 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 Lessor's 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 time to time. 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 effect that such 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 respective interests may appear.
Section 6.06. Advances. In the event Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail 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
on 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 then -current Original Term or Renewal Term, and Lessee covenants and agrees to pay such amounts so
advanced by Lessor with interest thereon from the date advanced until paid at the rate of 18% per annum or the maximum interest rate permitted by law,
whichever is less,
ARTICLE V11. DAMAGE, DESTRUCTION AND CONDEMNATION: USE OF NET PROCEEDS
Section 7.01, Disk of Lpss. Lessee is responsible for the entire risk of loss of or damage or destruction to the Equipment. No such loss, damage or
destruction shall relieve Lessee of any obligation under this Agreement or any Lease.
Section 7 0. Damacte Destruction and Condemnation. if (a) the Equipment listed on any Schedule or any portion thereof is destroyed, in whole or in
part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall betaken under the exercise of
the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and
Lessor will cause the Net Proceeds of any insurance claim or condemnation award to be applied to the prompt replacement, repair, restoration,
modification or improvement of that Equipment, unless Lessee shall have exercised its option to purchase that Equipment pursuant to Section 5.04. Any
balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee.
Section 7.03, Insufficiepgy of Net Proceeds, If the Net Proceeds are insufficient to pay in full the cost of any replacement, repair, restoration, modification
or improvement referred to in Section 7,02, Lessee shall either complete such replacement, repair, restoration, modification or improvement and pay any
costs thereof in excess of the amount of the Net Proceeds, unless Lessee, pursuant to Section 5.04, purchases Lessors interest in the Equipment
destroyed, damaged or taken and any other Equipment listed in the same Schedule. The amount of the Net Proceeds, if any, remaining after completing
such repair, restoration, modification or improvement or after purchasing Lessor's interest in the Equipment shall be retained by Lessee. If Lessee shall
make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefore from Lessor nor shall Lessee be entitled to any
diminution of the amounts payable under Article IV.
ARTICLE Vill. DISCLAIMER OF WARRANTIES, VENDOR'S WARRANT1115% USE OF THE EQUIPMENT
Section 8.01. Disclaimer of Warranties. LESSEE HAS SELECTED THE EQUIPMENT AND THE VENDORS. LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR WARRANTY OR REPRESENTATION WITH RESPECT THERETO. In no
event shall Lessor be liable for an incidental, indirect, special or consequential damage in connection with or arising out of this Agreement or the existence,
furnishing, functioning or Lessee's use of any item or products or service provided for in this Agreement.
Sertion,8.02, �Lendor*s Aarraritfe_sLessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term, so long as Lessee
shall not be in default hereunder, to assert from time to time whatever claims and rights, including warranties of the Equipment, which Lessor may have
against the Vendor of the Equipment. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor
of the Equipment, and not against Lessor, nor shall such matter have any effect, whatsoever on the rights and obligations of Lessor with respect to this
Agreement, including the right to receive full and timely payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made no
representation or warranties whatsoever as to the existence or availability of such warranties of the Vendor of the Equipment.
Section 8.03. Use of the Equil2fflent- Lessee will not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable
law or in a manner contrary to that contemplated by this Agreement. Lessee shall provide all permits and licenses, if any, necessary for the installation and
operation of the Equipment. In addition, Lessee agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and
operation of each item of the Equipment) with all laws of the jurisdictions in which its operations involving any item of Equipment may extend and any
legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Equipment; provided, however, that Lessee
may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of Lessor, adversely
affect the title of Lessor in and to any of the items of the Equipment or its interest or rights under this Agreement.
Section 8,04. Essential Mature Lessee confirms and affirms that the Equipment is essential to the function of Lessee and the services
provided to its citizens, that there is an immediate need for the Equipment which is not temporary or expected to diminish in the foreseeable future, and
that Lessee will use substantially all the Equipment for the purpose of performing one or more governmental or proprietary functions consistent with the
permissible scope of its authority.
ARTICLE IX ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING
Section 9,01, Assignment by Leagor. Lessor's interest in, to, and under this Agreement; any Lease and the Equipment may be assigned and reassigned
in whole or in part to one or more assignees by Lessor at anytime 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 the 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 right Lessee
may from time to time have against Lessor.
— 4 —MuniStd - LCR
Seotion 9 02. Assignment and Subleasing by Lessee. None of Lessee's interest in, to and under this Agreement and in the Equipment may be sold,
assigned, subleased, pledged or otherwise encumbered by Lessee without the prior written consent of Lessor:
Section 9,03. Release and Indemnification Covenants; 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 on 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 misrepresentation 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. EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Defaut Defined; 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 on the date when made;
(d) Any provision of that Lease shall at any time for any reason cease to be valid and binding on 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, (iii) make a
general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a
voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any
insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency
proceeding; or
(f) An order, judgment or decreeshallbe entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee,
custodian or liquidator of Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent,
and such order, judgment or decree shall continue unstaged and 1n effect for any period of 30 consecutive days.
Section 10,02. Remedies on Default. Whenever any Event of Default under any Lease exists, Lessor shall have the right, at its sole option without any
further demand or notice, to take one or any combination of the following remedial steps:
(a) By written notice to Lessee, 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 (i) the Rental Payments and other
amounts payable by Lessee under that Lease plus the then -applicable Purchase Price for that Equipment and (ii) 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 oras the owner of
any or all of the Equipment that is subject to that Lease.
In addition, whenever an Event of Default exists with respect to any Rental Payment required by a particular Schedule or with respect to any other
payment, 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 (ii) 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 (e) 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 end of the then current Original Term or
Renewal Term; and
(f) 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.
Sectior+ 1t).0 Flo Remedy Exclusive. No remedy conferred upon or reserved to Lessor by this Article is intended to be exclusive and every such remedy
shall be cumulative and shall be in addition to every other remedy given under this lease. No delay or omission to exercise any right or power accruing
upon any default shall impair any such right or power or shall be construed to be a waiver thereof but any such right and power may be exercised from
time to time and as often as may be deemed expedient by Lessor or its assignee:,
Section 4004 Actreement to Pay Attorneys Fees and Expenses 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 on the
-- 5 —MuniStd - LCR
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.
Section 10-05. ��fication �&Mon�qs. Any net proceeds from the exercise of 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 rata.
ARTICLE I. MISCELLANEOUS
50don 11-1.01--NotigLes- 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.
Section 11.02. Binding Effe& Er tfLe 6greement; Amendments and Modification & 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 the Lessor and the Lessee; nor shall 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 other provision hereof.
Section 11.03, Apglicable Law, This Agreement shall be governed by and construed in accordance with the laws of the state of California.
Sections 11,04. Severabft 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.
Sectionl IJ35. Amendments, Changes and Modifications, This Agreement may be amended, added to, changed or modified by written agreement duly
executed by Lessor and Lessee.
Section 11,06. Executf'ori_jn_CQu_nteWLarts, Chattel aoer This Agreement, including in writing each Schedule, may be 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 Lessor's 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. 1," which Counterpart No. 1 shall constitute chattel paper for purposes of the Uniform
Commercial Code.
Section i 1,07. 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.
Section 11.08. Jury Trial LLaiver, To the extent permitted by law, lessee agrees to waive its right to a trial by jury.
Section 11,09. Facsimile Documentation. Lessee agrees that a facsimile copy of this Agreement or any Lease with facsimile signatures may be treated
as an original and will be admissible as evidence of this Agreement or such Lease.
Section _1 1,10, Capfipns, The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent
of any provisions 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.
Sean Ashton, Mayor
Attested by City Clerk
LESSOR:
Signature
Name and Title
. JYZL 44 h -
Maria Alicia Duarte, CMC Yvttte M. Abich Garcia
— 6 —MuniStd - LCR
Counterpart No. 1,
• • •- r r • r - -• • • • -• •IMMIR
•, IN QIV Le'n IVI I F.11 I WAL01 ... .. ..• • •- • •r
Re: Master Equipment Lease Purchase Agreement, dated as of 7/5/2018, between Community First National Bank, as Lessor, and City of Downey, as
Lessee.
1. Defined Terms. All terms used herein have the meanings ascribed to them in the above referenced Master Equipment Lease Purchase
Agreement (the "Master Equipment Lease").
2. Equipment. The Equipment included under the Schedules of Equipment is comprised of the items described in the Equipment Description
attached hereto as Attachment 1, together with all replacements, substitutions, repairs, restorations, modifications, attachments, accessions,
additions and improvements thereof or thereto.
3, Payment Schedule. The Rental Payments and Purchase Option Prices under the Schedules of Equipment are set forth in the Payment
Schedule attached as Attachment 2 hereto.
4:r Representations, Warranties and Covenants. Lessee hereby represents, warrants, and covenants that its representations, warranties and
covenants set forth in the Agreement are true and correct as though made on the date of commencement of Rental Payments on this
Schedule.
51 The Master Equipment Lease. This Schedule is hereby made as part of the Master Equipment Lease and Lessor and Lessee hereby ratify
and confirm the Master Equipment Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate
solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated by reference and made a part hereof.
,,• r� r r.
. r.
LESSOR:
Community First National Bank
Sean Ashton, Mayor Signature
Attested by City Clerk
Name and Title
Approved as to form -City Attorney
Maria Alicia Duarte, CMC Yv e M. Abich Garcia
7-MuniStd LCR
ATTACHMENT I
EQUIPMENT DESCRIPTION
RE: Schedule of Equipment No. 01, dated 7/5/2018, to Master Equipment Lease Purchase Agreement, dated as of
7/5/2018, • Lessor, and City of Downey,
Lease Number: DOWCA2018-06AE
Two (2) New Ford E450 Road Rescue Type 3 Ambulances
With a total acquisition cost of $459,487.30; together with all additions, accessions and replacements thereto. Lessee hereby certifies the
description of the personal property set forth above constitutes an accurate description of the "Equipment", as defined in the attached
Master Equipment Lease Purchase Agreement and the Equipment is located on the premise of the Lessee unless otherwise noted by the
Lessee.
Physical location where equipment will be stored after delivery: Downey Fire Station 1
Paramount v
Downey, CA 90242
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form City ome
%0,
—77V M. Abich Garcia
8-MuniStd - LCR
ATTACHMENT 2
PAYMENTSCHEDULE
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: DOWCA2018-06AE
t
AMORTIZATION SCHEDULE
FPayment
Payment
Payment
Interest
Principal
Purchase
Number _
Date
Amount
Portion
,. Portion
Price
1
11/1/2018
$100,370.33
$5,818.64
$94,551.69
Not Available
2
11/1/2019
$100,370.33
$14,341.97
$86,028.36
$284,485.40
3
11/1/2020
$100,370.33
$10,961.06
$89,409.27
$193,287.95
4
11/1/2021
$100,370.33
$7,447.27
$92,923.06
$98,506.43
5
11/1/2022
$100,370.33
$3,795.39
$96,574.93
$0.00
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorne
Yvett Abich Garcia
9—MuniStd LCR
OF GOVERNING BODV
Inn
I; the undersigned, the duly appointed and qualified City Clerl< of the City of Downey ("Lessee), do hereby certify on this day of
2018 as follows:
(1) Lessee did, at a meeting of the governing body of the Lessee, held on _ , 2018, by motion duly
made, seconded and carried, in accordance with all requirements of law, approve Resolution No. ("Resolution") approving
the Diaster Equipment Lease Purchase Agreement and Schedule of Equipment No. l dated 7/5118 ("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. L1VAS, CITY MANAGER
CITY OF DOWNEY CITY OF DOWNEY
(2) The governing body of Lessee resolved that each of the above-named representatives of City of Downey held the
position of Mayor and City Manager at the time of such authorization, and at the present time, each hold their respective offices as
stated above.
(3) The governing body of Lessee resolved that the meeting of the governing body of Lessee at which the Agreement
and the Schedule were approved and authorized to be executed was duly called, regularly convened, and attended throughout by the
requisite majority of the members thereof, and that the action approving the Agreement and the Schedule and authorizing the
execution thereof has not been altered or rescinded.
(4) The governing body of Lessee resolved that no event or condition that constitutes or, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default (as such term is defined in the Agreement), exists as of the date the
Resolution was adopted.
(5) The governing body of Lessee resolved that all insurance required in accordance with the Agreement is currently
maintained by Lessee.
(b) The governing body of Lessee 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.
(7) The governing body of Lessee resolves that the fiscal year of Lessee is July 1 to June 30.
Late
�_- _ Maria Alicia Duarte, CMC
City Clerk
F:ffUV-3
Community First National Bank
2155. Seth Child Road
Manhattan, KS 66502
Re: Lessee: City of Downey
Ladies and Gentlemen:
As legal counsel to City of Downey (the "Lessee"), I have examined (a) an executed counterpart of a
certain Master Equipment Lease Purchase Agreement, dated as of 7/5/2018, Exhibits thereto and
Schedule of Equipment No. 01, dated 7/5/2018 (collectively, the "Agreement"), by and between
Community First National Bank (the "Lessor") and Lessee, which among other things, provides for the
lease with option to purchase by the Lessee of certain property listed in the Schedule of Equipment No:
1 (the "Equipment"); (b) an executed counterpart of the ordinances or resolutions of Lessee which,
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, I am of the following opinions:
(1) Lessee's true and correct name is City of Downey;
(2) Lessee is municipal corporation and charter city, 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) the 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 deliver the Agreement and to perform its obligations under the Agreement.
(4) The Agreement and the other documents either attached thereto or required therein have been
duly authorized, approved and executed by and on behalf of Lessee and the Agreement and other
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 ufthe officers which appear onthe Agreement hold the offices set forth below
their names.
/8> Nofurther approvo|,00nsentor withholding of objectionlsrequired 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.
(A) The Equipment leased pursuant tothe Agreement constitutes personalproperty and when
subjected to use bvLessee will not beorbecome fixtures underapplicable law.
(10) The Lessee is a political subdivision within the meaning of Section 103 of the Internal Revenue
Code mf19Q6aoamended and the related regulations and rulings.
All capitalized terms herein shall have the same meanings asinthe foregoing Agreement
` unless
otherwise provided herein. The above opinion is for the sole benefit of the Lessor and can only be relied
upon by the Lessor or any permitted assignee or sub -assignee of Lessor under the Agreement. This
opinion letter speaks only as of the date set forth above. in rendering this opinion letter, I undertake no
obligation to supplement orupdate this letter inthe future. This opinion letter islimited to the matters
on which the Lessor has requested my opinion, and this opinion letter should not be read as expressing
any opinion except onthe matters expressly set forth herein.
Sincerely,
CITY OF DOWNEY
Yvette M. Abich Garcia
UIT9191 42 CA 0 tog 4LIC4A 11111
Community First National Bank
215 S. Seth Child Road
Manhattan, KS 66502
Ladies and Gentlemen,
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.
In accordance with the Master Equipment Lease Purchase Agreement (the "Agreement"), the undersigned Lessee
hereby certifies and represents to, and agrees with Lessor as follows:
(1) All of the Equipment (as such term is defined in the Agreement) listed in the above referenced Schedule of
Equipment (the "Schedule") has been delivered, installed and accepted on the date hereof.
(2) Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems
necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes.
(3) Lessee is currently maintaining the insurance coverage required by Section 6.05 of the Agreement.
(4) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of
Default (as defined in the Agreement) exists at the date hereof.
(5) Lessee has appropriated and/or taken other lawful actions necessary to provide moneys sufficient to pay all
Rental Payments required to be paid under the Agreement during the current Budget Year of Lessee, and such
moneys will be applied in payment of all Rental Payments due and payable during such current Budget Year.
(6) The governing body of Lessee has approved the authorization, execution and delivery of this Agreement on its
behalf by the authorized representative of Lessee who signed the Agreement.
(7) The Lessee will in a timely fashion submit the appropriate paperwork to the State to have a title to the
Equipment issued in their name as owner and Lessor listed as 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.
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorney
J�� aL
Y tte M. Abich Garcia
*If delivery is not immediate, keep until final delivery,
-- 12--MuniStd - LCR
BANK QUALIFIED CERTIFICATE
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.
Whereas, Lessee hereby represents it is a "Bank Qualified" Issuer for the calendar year in which this Agreement 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 $10,000,000 dollars of tax-exempt obligations during the calendar year).
Now, therefor, Lessee hereby designates the above referenced Schedule 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 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 represents that the Lessee will not designate more than $10,000,000 of
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 of the Code) in an amount greater than
$10,000,000.
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorn
ut,u, kA
Yv t M. Abich Garcia
13-MuniStd - LCR
INSURANCE i
Lessee: City of Downey
Please mark one of the following:
( ) Pursuant to Section 6.05 of the Agreement, you have agreed to provide us evidence of insurance covering the property
in the Agreement. A Certificate of Insurance naming all insured parties and coverage must be provided to us as soon as
possible, but no later than the date on which delivery of equipment occurs.
( ) Pursuant to Section 6.05 of the Agreement, we are self-insured for all risk, physical damage, and public liability and will
provide proof of such self-insurance in letter form, together with a copy of the statute authorizing this form of insurance.
Coverage must be provided to us as soon as possible, but no later than the date on which delivery of equipment occurs.
Equipment to be insured: Two (2) New Ford E450 Road Rescue Type 3 Ambulances
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
✓ $1,000,000.00 Aggregate Bodily injury
✓ $1,000,000.00 Combined Single Limit per Occurrence
✓ Community First National Bank and/or Its Assigns MUS be listed as additional insured and loss payee.
2. PHYSICAL DAMAGE
✓ All risk coverage to guarantee proceeds sufficient to cover the replacement cost of the equipment.
✓ Community First National Bank and/or its Assigns MUS be listed as additional insured and loss payee.
3. ENDORSEMENT
✓ Lessor will receive at least thirty (30) days written notice from Insurer prior to alteration, cancellation or
reduction of insurance coverage.
✓ Deductibles should be listed on the Certificate of Coverage
THE CERTIFICATE SHOULD BE
E AtLO TO cir urnoiapg
r
OR FAXED T : 888.777J875
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorney
La-
��vjfe-M. Abich Garcia
N 14-MuniStd - LCR
11 a
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: DOWCA2018-06AE
Equipment Description: Two (2) New Ford E450 Road Rescue Type 3 Ambulances
`- provide contact information for billing and invoicing purposes.
Persoh/Department: Anil Gandhyl Finance Director/Finance Department
P.O. Box/Street: City of Downey
City, State, Zip 11111 Brookshire Ave-,/P.O. Box 7017
Telephone Number: 562-904-7265
Email Address: agandh
NOTICE OF ASSIGNMENT
June 15, 2018
City of Downey
11111 Brookshire Ave
Downey, CA 90241
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. Along with the
Escrow Agreement entered into as of 7/5/2018.
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:
Community First National Bank will be the servicing this lease and all Rental Payments and payment of
the Purchase Option Price due under the Agreement will be made to:
Community First National Ban
215 S. Seth Child Road
Manhattan, KS 66502 1
ACKNOWLEDGED AND ACCEPTED:
LESSEE:
City of Downey
Sean Ashton, Mayor
Attested by City Clerk
Community First National Bank
Signature
Name and Title
Approved as to form -City Attorney
Maria Alicia Duarte, CMC Yvette M. Abich Garcia
'Lessor may at a future date desire to assign this lease agreement. At this time, a specific Assignee is undetermined. At such time Lessor
determines a need to assign this lease; Lessee will be provided with a completed copy of this page for their records and be made aware
of any changes in where to send the rental payments going forward. This assignment option is outlined in Article IX of the Master
Equipment Lease Purchase Agreement.
16 —MuniStd - LCR
ESCROW AGREEMENT
WHEREAS, Lessee and Lessor have entered into a Schedule of Equipment No. 01, dated 7/5/2018 to Master Equipment Lease Purchase Agreement
dated as of 7/5/2018 ("Agreement"), a duplicate original of which has been furnished to each of the parties, whereby Lessor has agreed to acquire certain
equipment described therein ("Equipment"), and to sell the Equipment to the Lessee, and Lessee has agreed to purchase the Equipment from Lessor, in
the manner and on the terms set forth in the Agreement; and
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
WHEREAS, 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 1. APPOINTMENT OF ESCROW AGENT: DEFINITIONS
1.0
-1., -Anpointment of E§gMwqn kg t, Lessor and Lessee hereby appoint and employ Escrow Agent, to receive, hold, invest and disburse the
L _
moneys to be paid to it pursuant to this Escrow Agreement and the Agreement, and to perform certain other functions, all as hereinafter provided. By
executing and delivering this Escrow Agreement, Escrow Agent accepts the duties and obligations of Escrow Agent provided herein, but only upon the
terms and conditions set forth.
Section 1,02. Definitions. The terms defined 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 7/5/2018 to Master Equipment Lease Purchase Agreement dated 7/5/2018, by and between
Lessee and Lessor and any duly authorized and executed amendment thereto, the terms 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 of the Equipment in accordance with the purchase order or contract therefore. Acquisition Costs include the administrative, engineering, legal,
financial and other costs incurred by the Lessee in connection with the acquisition, delivery and financing by Lessor of the Equipment.
"Acceptance Certificate" means an acceptance certificate in the form attached to the Agreement.
"Acquisition Fund" means the fund by that name established and held by the Escrow Agent pursuant to Article 11 of this Escrow Agreement.
"Closing Date" means the day when Lessor deposits with the Escrow Agent the moneys required to be deposited pursuant to Article 11.
"Equipment" means the personal property described in the Agreement, together with any and all modifications, additions and alterations thereto, to be
acquired from the moneys held in the Acquisition Fund.
"Escrow Agent" means Community First National Bank or any successor thereto acting as Escrow Agent pursuant to this Escrow Agreement.
"Escrow Agreement" means this Escrow Agreement and any duly authorized and executed amendment thereto.
"Independent Counsel" means an attorney duly admitted to the practice of law before the highest court of the State in which he maintains an office and
who is not an employee of Lessor, the Escrow Agent or the Lessee.
"Lessee Representative" means the representative of Lessee or a person authorized by the Lessee to act on its behalf under or with respect to this
Agreement.
"Lessor Representative" means the President, any Vice President or Assistant Vice President of Lessor, or any person authorized to act on behalf of
Lessor under or with respect to this Agreement, as evidenced by a certificate conferring such authorization executed by the President, any Vice President
or Assistant Vice President of Lessor, given to the Lessee or the Lessee Representative.
"Payment Date" means the date upon which any Rental Payment under the Agreement is due and payable, as set forth in the Payment Schedule.
"Payment Request Form" means the document substantially in the form attached hereto as Exhibit A to be executed by Lessee and Lessor and submitted
to Escrow Agent to authorize payment of Acquisition Costs,
"Qualified Investments" means (i) direct general obligations of the United States of America; (ii) obligations guaranteed by the United States; (iii) general
obligations of the agencies and instrumentalities of the United States; (iv) certificates of deposit, time deposits or demand deposits with a bank or savings
institution qualified as a depository of public funds in the State of Kansas, provided that such certificates of deposit, time deposits or demand deposits, if
not insured by the Federal Deposit Insurance Corporation of the Federal Savings and Loan Insurance Corporation, are fully secured by obligations
described in Clauses (i), (ii) or (iii); (v) money market funds, the assets of which are obligations of or guaranteed by the United States of America and
which funds are rated "Aaa" by Moody's Investors Service or "Am" or "Am -G" by Standard & Poors Corporation.
"Rental Payments" means the basic payments payable by Lessee to Lessor pursuant to the provisions of the Agreement during the term thereof which are
payable in conjunction of the right of Lessee to use the Equipment during the then current portion of the term of the Agreement.
"Term of the Agreement" means the time during which the Agreement is in effect, as provided in Article III of the Agreement.
"Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased will purchase or
has ordered the Equipment or with whom Lessor has contracted for the acquisition of the Equipment.
Section 1.08. Authorlzaion. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this
Agreement, and has taken all actions necessary to authorize the execution of this Agreement by the officers and person signing it.
ARTICLE 11. ACQUISITION FUND
Spoon ?.P1, 8cguisifion Fund. Escrow Agent shall establish a special fund designated as the "Acquisition Fund"; shall keep such Acquisition Fund
separate and apart from all other funds and moneys held by it; and shall administer such funds as expressly provided hereunder.
Section x.02. _Dep by Less 87.LO. Escrow Agent
otit of , o . At the Closing Date, Lessor shall deposit with the Escrow Agent the amount of
shall credit said amount to the Acquisition Fund established and to be held, applied and disbursed as herein provided.
The Acquisition Fund shall be expended for the Acquisition Costs of the Equipment. Escrow Agent
shall pay from the Acquisition Fund the Acquisition Costs of the Equipment, upon receipt from Lessee and Lessor the following items:
(a) in the case of payment of any Acquisition Costs to Vendor pursuant to a contract or purchase order, (1) a duly executed Payment
Request Form, with a true copy of the Vendor's statement attached, (2) where applicable, a duplicate original of any change order
— 17 —MuniStd - LCR
Attachment 11C11
approved by 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 maybe 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 Vendor's 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.
Section 2.04. Escrow Anent's e
Como 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 on the escrow account and will be
paid upon disbursement of proceeds to the vendor and closing of the escrow account. If the interest earnings on 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 2.05. Transfers Uppn Qgmaletion. 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.
Section 2.06, 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 application 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 Ill. MONEYS IN FUNDS: INVESTMENTS; TERMINATION
Section -3,01.,bleld, in Trust. The moneys and investments held by the Escrow Agent under this Escrow Agreement are irrevocably held in trust 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.
Section 3,02. Investments Authorized. 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.
Section 3.03- &ccouritIVA. 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.
eotio 3.04, Volts tson and Dis sits n f rove tm nte: 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.
_Section 3,05, Deposit of Moneys in AcQuisidon 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.
Section 3.0. Ternnfriation. 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
Section 4,01, Re
- jngyAl of Esgrow, Agent. 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 ($10,000,000), 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,
Secfion d 0, Rftg!gnattorr of Escrrrw Anent. 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.
.5g&fipn 4,03, 812gointment 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 4.04, Mena,eftcraor Consoficlatio . Any company into which the Escrow Agent may be 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 . The Escrow Agent shall be protected and shall incur no liability in acting or proceeding in good
faith 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 —MuniStd - LCR
Whenever in the administration of its duties under this Escrow Agreement, the Escrow Agent shall deem it necessary or desirable that a matter be proved
or established prior to taking or suffering any action hereunder, such matters (unless other evidence in respect thereof be herein specifically prescribed),
shall be deemed to be conclusively proved and established by the certificate of the Lessee Representative or the Lessor Representative and such
certificate shall be full warranty to the Escrow Agent for any action taken or suffered under the provisions of this Escrow Agreement upon the faith thereof,
but in its discretion the Escrow Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem
reasonable.
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.
The Escrow Agent may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or
receivers, and shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder, and the Escrow Agent shall not be answerable
for the default or misconduct of any such attorney, agent, or receiver selected by it with reasonable care. The Escrow Agent shall not be answerable for
the exercise of any discretion or power under this Escrow Agreement or for anything whatsoever in connection with the funds and accounts established
hereunder, except only for its own willful misconduct or gross negligence.
ARTICLE V. ASSIGNMENTS; AMENDMENTS
Sec ton 5.01. As�sinmentt. Except as expressly herein provided to the contrary; the rights and duties of each of the parties under this Escrow Agreement
shall not be assignable to any person or entity without the written consent of all of the other parties, Notwithstanding the above, Lessor may freely assign
all or any part of its interest in this Agreement and the Acquisition Fund established hereunder in connection with an assignment by Lessor of the
Agreement, subject to the provisions contained therein.
Section 5,02. Amendments. This Escrow Agreement may be amended in writing by agreement among all of the parties.
ARTICLE VI. FURTHER ASSURANCES
Section 6.01. Further Assurances. 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
Section 7.01. Default.
(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 Agreement, 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 party.
(c) No delay or omission to exercise any such right or 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.
ARTICLE Vill. LIMITATION OF LIABILITY
gection-.8,01, 0LnjWq Og!§Jit of Escrow Agent. Escrow Agent shall have no obligation or liability to any of the other parties under this Escrow Agreement
for the failure or refusal of any other party to perform any covenant or agreement made by any of it hereunder or under the Agreement, but shall be
responsible solely for the business -like performance of the duties expressly imposed upon Escrow Agent hereunder, The recitals of facts, covenants and
agreements herein contained pertaining to Lessee and Lessor shall be taken as statement, covenants and agreements of the Lessee or Lessor (as the
case may be), and Escrow Agent assumes no responsibility for the correctness of the same, or makes any representation as to the validity or sufficiency of
this Escrow Agreement, or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein imposed upon it.
Escrow Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful default.
Section 8.02. Indemnification. To the extent permitted by applicable law, Lessee agrees to indemnify and save Escrow Agent harmless from and against
all claims, suits and actions brought against it, or to which it is made a party, and from all losses and damages, including without limitation reasonable,
attorney fees and court costs suffered by it as a result thereof, where such claim, suit or action arises in connection with this Escrow Agreement, the
transactions described herein and in the Agreement or the Escrow Agent's employment as an Escrow Agent by Lessee and Lessor. Notwithstanding the
foregoing, such indemnification shall not extend to claims, suits and actions brought against the Escrow Agent for failure to perform and carry out the
duties specifically imposed upon and to be performed by it pursuant to this Escrow Agreement and claims, suits or actions arising from events solely and
directly attributable to acts of Lessor. In the event the Lessee is required to indemnify Escrow Agent as herein provided, Lessee shall be subrogated to the
rights of the Escrow Agent to recover such losses or damages from any other person or entity.
Section 8.03. Discretion of Escrow Ant to Fite Civil Agpon in the Event of Disouig. If Lessor or Lessee are in disagreement about the interpretation of
this Escrow Agreement, or about the rights and obligations, or the propriety of any action contemplated by Escrow Agent hereunder, Escrow Agent may,
but shall not be required to, file an appropriate civil action to resolve the disagreement. Escrow Agent shall be indemnified by Lessee in accordance with
Section 8.02 for all costs in connection with such civil action, and shall be fully protected in suspending all or part of its activities under this Escrow
Agreement until a final judgment in such action is received.
Section 8.04.oinion of Counsel: Before being required to take any action, the Escrow Agent may require (I) an opinion of Independent Counsel
acceptable to the Escrow Agent, which counsel may be counsel to any of the parties hereto, and which opinion shall be made available to the other parties
hereto, or (ii) a verified certificate of any party hereto, or (iii) both (i) and (ii), concerning the proposed action. Escrow Agent shall be absolutely protected
in relying thereon if it does so in good faith.
Section Limitation - i hts 0 Parties. Nothing in this Escrow Agreement, expressed or implied, is intended or shall be construed to give any person
.8,05. Limit , n of RA L
other than the Lessee, Lessor or the Escrow Agent any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant,
condition or provision hereof; and all such covenants, conditions and provisions are and shall be for the sole and exclusive benefit of the Lessee, Lessor
and Escrow Agent.
ARTICLE IX MISCELLANEOUS
SLO!2ko—M 9-01 Records 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.
Section 9,02. Notices. All written notice to be given under this Escrow Agreement shall be given by mail to the party entitled thereto at its 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 hours after deposit in the United States mail in registered or certified form, with postage fully prepaid.
Section 9.03. Gove ntg Laws. This Escrow Agreement shall be construed and governed in accordance with the laws of the State of Kansas.
— 19 —MuniStd - LCR
Section 9,04. Parti@1 Invalidity, 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.
Section 9,05, Binding Effect, SuccessM. This Escrow Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns. Whenever in this Escrow Agreement any party hereto is named or referred to, such references shall be deemed to include
permitted successors or assigns thereof, and all covenants and agreements contained in this Escrow Agreement by or on behalf of any party hereto shall
bind and inure to the benefit of permitted successors and assigns thereof whether or not so expressed.
Section 9.06. Exegution in GognigMarts. This Escrow Agreement may be executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same agreement
Section aD7_14eadings. The headings or titles of the several Articles and Sections hereof, and any tables of contents appended to copies hereof, shall be
solely for convenience of reference and shall not affect the meaning, construction or effect of this Escrow Agreement. All references herein to "Articles",
"Sections", and other subdivisions are to the corresponding Articles, Sections, or subdivisions of this Escrow Agreement; and the words "herein", "hereof',
"hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof.
IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the date and year first above written.
ESCROW AGENT:
215 S. Seth Child Road
Manhattan, KS 66502
Signature
Name and Title
Signature
Sean Ashton, Mayor
3101STAM
Maria Alicia Duarte, CIVIC
Approved as to form -City Attor
Tto M. Abich Garcia
— 20 —MuniStd - LCR
EXHIBIT A
PAYMENT REQUEST FORM
Community First National Bank, Escrow Agent under an Escrow Agreement dated as of 7/5/2018, by and among
the said Escrow Agent, Community First National Bank (Lessor), and the City of Downey, (Lessee) is hereby
requested to pay, from the Equipment Acquisition Fund held under said Escrow Agreement, to the persons,
firms or i f i . i designated i' i payee, the amountforth opposite each such person's or
corporation's name, in payment of the Acquisition Costs (as defined in said Escrow Agreement) of the
Equipment described on the attached page(s) designated opposite such Payee's name and account.
Zi 1 1, 11 9 11111111 1 11 1111111211! ; iii ,- •
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 Disbursement. 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 Agent), (3) front and back copy of the original MSO/Title (if payment from Escrow Account is for
a chassis) listing Community First National 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 the Equipment 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 the title 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 title 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 Disbursement. 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 MSO(fitle 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 all purposes under the Lease,
including, without limitation, the obligation of Lessee to make the Rental Payments with respect thereto. By executing this Payment Request Form Lessee
certifies that Lessee is the title owner to 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 title including, without limitation, the appropriation of additional funds to secure title to the Equipment and keep the Lease in
full force and effect.
eflui
• a. -
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorney
I�A Q09
ette M. Abioh Garcia
21 --Mun std - LCR
TAX COMPLIANCE AGREEMENT AND NO ARBITRAGE CERTIFICATE
This Tax Compliance Agreement and No Arbitrage Certificate is issued in connection with that certain Schedule of Equipment
No. 01, dated 7/5/2018 to Master Equipment Lease Purchase Agreement dated as 7/5/2018 by and between Community First
National Bank, ("Lessor") and City of Downey ("Lessee").
1. In General.
1.1. This Certificate is executed for the purpose of establishing the reasonable expectations of Lessee as to future events regarding the financing of certain
equipment by Lessee as described in the Schedule of Equipment No. 01, dated 7/5/2018 to Master Equipment Lease Purchase Agreement dated as of
7/5/2018 (the "Lease") between Lessor and Lessee and all related documents executed pursuant thereto and contemporaneously herewith with respect to the
financing of the acquisition of Two (2) New Ford E450 Road Rescue Type 3 Ambulances of equipment (the "Equipment") by Lessor for Lessee (the Lease and
such other documents are hereinafter collectively referred to as the "Financing Documents").
1.2. The individual executing this Certificate on behalf of Lessee is an officer of Lessee delegated with the responsibility of reviewing and executing the Financing
Documents.
1.3. To the best of the undersigned's knowledge, information and belief, the expectations contained in this Certificate are reasonable.
1.4. Lessee has not been notified of any listing or proposed listing of it by the Internal Revenue Service as an issuer whose certifications as to arbitrage
may not be relied upon.
1.5. The rental payments due under the Financing Documents will be made with monies retained in Lessee's general operating fund (or an account or sub
account therein). No sinking, debt service, reserve or similar fund or account will be maintained for the payment of the rental payments due under the
Financing Documents or pledged as security therefor.
1.6. If any other governmental obligations were or are being issued by or on behalf of Lessee within fifteen (15) days of the date of issuance of the
Financing Documents, such obligations either (i) were not or are not being issued or sold pursuant to a common plan of financing with, or (ii) will not be
paid out of substantially the same source of funds as, the financing pursuant to the Financing Documents.
2. PurpAse-of the Financing -Oggiamenils.
2.11. The Financing Documents are being entered into for the purpose of providing funds for financing the cost of acquiring, equipping and installing the
Equipment which is essential to the governmental functions of Lessee, which Equipment is described in the Equipment Description executed and delivered
by Lessee pursuant to the Financing Documents. The principal amount represented by the Financing Documents, or 115a_487.30 will be deposited in
escrow by Lessor at closing and held by Community First National Bank, as Escrow Agent (the "Escrow Agent") pending acquisition of the Equipment
under the terms of that certain Escrow Agreement dated as of 7/5/2018 (the "Escrow Agreement"), by and among Lessor, Lessee and Escrow Agent.
2.2. No portion of the principal amount represented by the Financing Documents will be used as a substitute for other funds which were otherwise to be
used as a source of financing for the Equipment, or will be used, directly or indirectly, to replace funds used by Lessee to acquire investments which
produce a yield materially higher than the yield to Lessor under the Financing Documents.
2.3. Lessee does not expect to sell or otherwise dispose of the Equipment, in whole or in part, at a date which is earlier than the final rental payment due
under the Financing Documents.
3. Source and Disbursement of Funds.
3.1. The principal amount represented by the Financing Documents does not exceed the amount necessary for the governmental purpose for which the
Financing Documents were entered into. Such funds are expected to be needed and fully expended for payment of the costs of acquiring, equipping and
installing the items of Equipment.
3.2. It is contemplated that the entire amount deposited in escrow will be used to pay the acquisition cost of Equipment to the vendors or manufacturers
thereof, provided that a portion of the principal amount may be paid to Lessee within such period as reimbursement for Acquisition Costs already made by
it so long as the conditions set forth in Section 3,3 below are satisfied.
3.3. Lessee shall not request that it be reimbursed for Equipment acquisition cost payments already made by it unless the following conditions have been
satisfied:
(a) Lessee made a declaration of its reasonable intention to reimburse the acquisition cost payment sought to be reimbursed with the
proceeds of a borrowing not later than sixty (60) days after the date on which it made the payment, which declaration satisfies the "Official
Intent Requirement" set forth in Trees. Reg. Sec.l. 150-2;
(b) The reimbursement being requested will be made by written allocation before the later of eighteen (18) months after the acquisition cost
payment was made or eighteen (18) months after the items of Equipment to which such payment relates were placed in service;
(c) The entire payment with respect to which reimbursement is being sought is a capital expenditure, being a cost of type properly chargeable
to a capital account under general federal income tax principles; and
(d) Lessee will use any reimbursement payment for general operating expenses and not in a manner which could be construed as an artifice
or device under Trees. Reg. Sec. 1. 148-10 by, virtue of, among other things, use to refund, or to create or increase a sinking, reserve or
replacement fund with respect to, any other obligations issued by it.
4, Tem pora ly Period,
4.1. 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 of the lesser 2 1/2% of the amount deposited by Lessor in escrow or $100,000, or (b) to enter into binding obligations with third parties obligating
Lessee to spend such amount.
4.2. The ordering and acceptance of the items of Equipment will proceed with due diligence to the date of final acceptance of the Equipment.
4.3. The items of Equipment being acquired by Lessee will be delivered at various times. At least 15% of the sum of the amount deposited in escrow and
the reasonably anticipated interest earnings thereon will be used to pay the acquisition price of items of Equipment within six months from the date of
issuance of the Financing Documents; at least 60% of the sum of the amount deposited in escrow and the reasonably anticipated interest earnings
thereon will be used to pay the acquisition cost of items of Equipment within 12 months from the date of issuance of the Financing Documents; and 100%
of the amount deposited in escrow and interest earnings thereon will be used to pay the acquisition cost of items of Equipment prior to 18 months from the
date of issuance of the Financing Documents.
4.4. The total acquisition cost of the Equipment is not required to be paid to the vendors or manufacturers thereof until the Equipment has been accepted
by Lessee,
5. Escrow Account.
5.1. The Financing Documents provide that the monies deposited in escrow shall be invested until payments to the venclor(s) or manufacturer(s) of the
Equipment are due. Lessee will ensure that such investment will not result in Lessee's obligations under the Financing Documents being treated as an
.'arbitrage bond" or a "federally guaranteed bond" within the meaning of Section 148(a) or Section 149(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), respectively. Any monies which are earned from the investment of these funds shall be labeled as interest earned. All such
monies will be disbursed on or promptly after the date that Lessee accepts the equipment.
— 22 —MuniStd - LCR
rIANnATI-1 Wil
6. Exempt Use.
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. No Federal Guarantee.
7.1. Payment of the principal or interest due under the Financing Documents is not directly or indirectly guaranteed, in whole or in part, by the United
States or an agency or instrumentality thereof.
7.2. No portion of the proceeds under the Financing Documents shall be (i) used in making loans, the payment of principal or 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 if 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. Miscellaneous.
8.1. Lessee 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.
8.2. Lessee shall keep a complete and accurate record of all owners or assignees of the Financing Documents in form 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.
8.3. Lessee shall 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 after 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.
EME=
Sean Ashton, Mayor
Attested by City Clerk
Maria Alicia Duarte, CMC
Approved as to form -City Attorney
Y�vee M. Abich Garcia'
— 23 —MuniStd - LCR
Form8038'-G Information Return for Tax -Exempt Governmental Obligations
(Rev. September 2011) 0- Under Internal Revenue Code section 149(e) OMB No. 1545-0720
Department of the Treasury No -See separate instructions.
Internal Revenue Service Caution: If the issue price is under $100,000, use Form 8038 -GC.
Repotting Authority If Amended Return, check here DO- F1
I issuer's name 2 Issuer's employer identification number (EIN)
City of Downey 1 95-1918226
33 Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) I 3b Telephone number of other person shown on 3a
4 Number and street (or P.O. box if mail is not delivered to street address)
11111 Brookshire Ave
6 City, town, or post office, state, and ZIP code
Downey CA 90241
-Room/suite 5 Report number (For IRS Use Only)
I
8 Name of issue
Master Equipment Lease Purchase Agreement
10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see
instructions)
11
12
13
14
15
16
17
18
19
K11
1,31
7 Date of issue
7/5/2018
9 CUSIP number
10b Telephone number of officer or other
employee shown on 1 Oa
I Issue (enter the issue price). Seethe instructions and attach schedule.
Education . . . . . . . . . . . . . . . . .
Health and hospital . . . . . . . .
Transportation . . . . . . . . . . . . . .
Public safety i. i . . * * . . . . . . . . . . . . . . .
Environment (including sewage bonds)
Housing . . . . . . . . . .
Utilities . . . . . . . . . . . . . .
Other. Describe lllio
If obligations are TANS or RANs, check only box 19a . . . . . . . IIN❑
-
If obligations are BANS, check only box 19b . . . . . . . . 00. ❑
If obligations are in the form of a lease or installment sale, check box . . . . ► El
Description of Obligations. Complete for the entire issue for which this form is beil
(a) Final maturity date (b) Issue price (c) Stated redemption (d) Weighted
price at maturity average maturity
21 11/112022 !9 459,487.30 1 NIA 4.38 ve
=_ Uses of Proceeds of Bond Issue (including underwriters' discount) ------ —
22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . 22
23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . . 23
24 Proceeds used for bond issuance costs (including underwriters' discount) 24
25 Proceeds used for credit enhancement . . . . . . . . . . . . 25
26 Proceeds allocated to reasonably required reserve or replacement fund 26
27 Proceeds used to currently refund prior issues . . . . . . . . 27
28 Proceeds used to advance refund prior issues . . . . . . . . . 28
29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29
30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) 30
3escrjptjon of Refunded Bonds. Complete this part only for refundi ig bonds - ------- – ------
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . 00. years
32 Enter the remaining weighted average maturity of the bonds to be advance refunded ► years
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) IIIN-
34 Enter the dates) the refunded bonds were issued 00- (MM/DD/YYYY)
For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038-G (Rev. 9-2011)
Form 8038-G (Rev. 9-2011) Page 2
[� Miscellaneous
35 Enter the amount of the state volume cap allocated to the issue under section 141 (b)(5) . . . . 35
36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract
b Enter the final maturity date of the GIC Do-
c Enter the name of the GIC provider 1111�
37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box lo- 0 and enter the following information:
b Enter the date of the master pool obligation Do-
c Enter the BWofthe issuer ofthe master pool obligation Ol-
d Enter the name ofthe issuer ofthe master pool obligation 11110.
39 |fthe issuer has designated the issue under section 205(b)C3)(B)(i)(||V(small issuer exoeption).check box
40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . ^ "x� �' °� �� []
41a |fthe issuer has identified ahedge, check here lo- LJ and enter the following information:
b Name ofhedge provider Do-
c Type ofhedge Po-
d Term ofhedge 0o-
42 |fthe issuer has ouperimueQmuedthe hedge, check box . . . . . . . . . . . . . . . . . . . . . F1
43 If the issuer has established vvhuen procedures to ensure that all nonqualified bonds of this issue are ,emediated
according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . 10. []
44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . No- []
45a If some portion of the proceeds was used to reimburse expenditures, check here Do- [] and enter the amount
of reimbursement . . . . . . . . .no-