EQUIPMENT LEASE PURCHASE AGREEMENT
BETWEEN
ALLIANCE FUNDING SOLUTIONS, INC., a California corporation, as Lessor AND
CITY OF COMMERCE, as Lessee
DATED AS OF
[________________]
Article 1 DEFINITIONS 1
1.1 Acceptance Certificate 1
1.2 Acceptance Date 1
1.3 Authorized Representative 1
1.4 Code 1
1.5 Governing Body 2
1.6 Concluding Payment 2
1.7 Commencement Date 2
1.8 Costs of the Equipment 2
1.9 Default Rate 2
1.10 Equipment 2
1.11 Escrow Fund 2
1.12 Fiscal Year 2
1.13 Lease Term 2
Article 2 LEASE 2
Article 3 LEASE TERM 3
Article 4 RENTAL PAYMENTS 3
4.1 Amount and Times of Payment 3
4.2 Place of Payments 3
4.3 Late Charges 3
4.4 Abatement of Rental Payments 3
4.5 Allocation of Interest 3
4.6 Rental Adjustment 3
4.7 Covenant to Budget and Appropriate 4
4.8 Unconditional Current Obligation 4
Article 5 ESCROW FUND 4
5.1 Escrow Fund 4
5.2 Intentionally Omitted 5
5.3 Termination 5
Article 6 RESPONSIBILITIES OF LESSEE 5
6.1 Care and Use 5
6.2 Inspection 5
6.3 Utilities 5
6.4 Taxes 5
6.5 Alterations 6
6.6 Transportation and Installation Charges 6
6.7 Insurance 6
6.8 Risk of Loss 6
6.9 Performance by the Lessor of the Lessee’s Responsibilities 7
6.10 Financial Statements 7
Article 7 EQUIPMENT 7
7.1 Title 7
7.2 Security Agreement 8
7.3 Personal Property 9
7.4 Liens 9
7.5 Inspection 9
7.6 Use of Equipment; Maintenance and Repairs 9
7.7 Essentiality 10
7.8 Sublease 10
Article 8 WARRANTIES AND REPRESENTATIONS OF THE LESSEE 10 Article 9 WARRANTIES AND REPRESENTATIONS OF THE LESSOR 11 Article 10 INTENTIONALLY OMITTED 13
Article 11 TAX COVENANTS AND INDEMNIFICATION 13
11.1 Covenants 13
11.2 Further Covenants 13
11.3 Indemnification 13
Article 12 GENERAL INDEMNIFICATION 14
Article 13 INTENTIONALLY OMITTED 14
Article 14 DEFAULT AND REMEDIES 14
14.1 Definition of Default 14
14.2 Remedies on Default 15
14.3 Further Remedies 16
14.4 Reinstatement 16
Article 15 INTENTIONALLY OMITTED. 16
Article 16 ASSIGNMENT 16
16.1 Assignment By Lessee 16
16.2 Assignment By The Lessor 16
16.3 Escrow Assignment By the Lessor 17
Article 17 NATURE OF AGREEMENT 17
Article 18 OPTION TO PURCHASE 17
Article 19 MISCELLANEOUS 18
19.1 Waiver 18
19.2 Severability 18
19.3 Governing Law 18
19.4 Notice 18
19.5 Section Headings 19
19.6 Entire Agreement 19
19.7 Binding Effect 19
19.8 Time 19
19.9 Counterparts 19
19.10 No Third-Party Beneficiaries 19
19.11 Exhibits 19
Lease Documents:
Equipment Lease Purchase Agreement;
Exhibit A – Description of Equipment;
Exhibit B - Equipment Schedule, INCLUDING Schedule 1 (Rental Payment Schedule); Exhibit C – Notice and Acknowledgment of Assignment;
Exhibit D – Insurance Certification;
Exhibit E – Essential Use Certificate;
Exhibit F – Incumbency and Closing Certificate;
Exhibit G – Opinion of Lessee’s Counsel;
Exhibit H – Tax Opinion of Lessee’s Counsel;
Exhibit I - 1 – Form of Representation Letter;
[Exhibit I – 2 – Form of Capital One Public Funding, LLC Representation Letter;] Exhibit J – Post Issuance Tax Compliance Procedures;
Exhibit K – Escrow Agreement, including Schedule A (Notice and Acknowledgment of Assignment of Escrow Agreement); Exhibit L – City Council Meeting Resolution from Meeting Held on ____________ __, 20__; affidavit of publication for notice of public hearing; Exhibit M – IRS Form 8038-G; and
Exhibit N – Closing Memorandum/Payment Proceeds Direction.
Other Documents:
Installation Agreement
UCC-1 Financing Statement
CDIAC Filings
Lessee’s Form W-9
Insurance Certificates
Payment and Performance Bonds, with Dual Obligee Rider naming Lessor and its successors and assigns as additional insured
EQUIPMENT LEASE PURCHASE AGREEMENT
THIS EQUIPMENT LEASE PURCHASE AGREEMENT, (as amended or supplemented from time to time, this “Lease Agreement”) dated as of [_________, ____], between ALLIANCE FUNDING SOLUTIONS, INC., a California corporation, (together with its successors and/or assigns, the “Lessor”) whose mailing address is 12520 High Bluff Drive, Suite 345, San Diego, California 92130, and the CITY OF COMMERCE, a California municipal corporation, (the “Lessee”), whose mailing address is 2535 Commerce Way, Commerce, CA 90040.
WITNESSETH:
WHEREAS, the Lessor has agreed to purchase and lease the Equipment (as hereinafter defined) to the Lessee, and the Lessee has agreed to lease back and purchase the Equipment from the Lessor, pursuant to the terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants hereinafter contained, and other good and valuable considerations, the parties hereto agree as follows:
DEFINITIONS
For purposes of this Lease Agreement and any related documents, the following definitions will apply:
Acceptance Certificate and Payment Request
. A certificate in the form attached as Exhibit A to the Escrow Agreement attached hereto as Exhibit K by which the Lessee accepts delivery of all or a portion of the Equipment and requests payment from the Escrow Fund in payment thereof.
Authorized Representative
. Shall mean, with respect to the Lessee, the Mayor, the City Manager, or their authorized designees.
Code
. Shall mean the Internal Revenue Code of 1986, as amended.
Concluding Payment
. Shall have the meaning set forth in Article 18.
Commencement Date
. Shall have the meaning set forth on Exhibit B.
Costs of the Equipment
. $_________________, which is the total cost of acquisition and installation of the Equipment, including costs of issuance in connection with the execution and delivery of this Lease Agreement.
Default Rate
. Shall have the meaning set forth in Section 4.3.
Equipment
. The personal property and fixtures described in Exhibit A to this Lease Agreement that is now or may hereafter from time to time become attached hereto and incorporated herein by reference, together and with any and all additions, modifications, attachments, substitutions, repairs, accessories, replacements and parts thereof and all insurance and/or proceeds therefrom.
Escrow Fund
. The fund created under the Escrow Agreement, as provided in Article 5 hereof.
Fiscal Year
. Shall mean July 1 through June 30 of each year.
Governing Body
. Shall mean the City Council of the City of Commerce.
Lease Term
. Shall mean the period of time described in Article 3 of this Lease Agreement. [Permitted Encumbrances. Shall mean, as of any time, with respect to the real estate in, on or to which any Equipment is or will be located: (a) [List existing leases, licenses, or other use arrangements at the facilities]; (b) matters of record as of the Effective Date which do not prevent the City’s beneficial use of the Equipment; and (c) any Permitted Future Encumbrance. [City to confirm use arrangements at city facilities.] Permitted Future Encumbrance. Shall mean a mortgage, lien or other encumbrance or sale/leaseback or lease/leaseback arrangement that is recorded against or encumbers all or any portion of the real estate in, on, or to which any Equipment is or will be located (each a “Proposed Encumbrance”), in each case, only if the Proposed Encumbrance will not prevent the Lessor from having, at all times during the Original Term and upon an Event of Default, the right to enter onto the real estate in, on or to which any Equipment is or will be located for the purposes of inspecting, repairing or repossessing the Equipment and/or exercising Lessor’s remedies under this Agreement, including, without limitation, the right to physically detach and remove the Equipment from all or any portion of such real estate.
Rental Payments. The basic rental payments payable by the Lessee pursuant to Article 4 of this Lease Agreement.
State. Shall mean the State of California.
LEASE
The Lessor hereby demises, lets and leases to the Lessee, and the Lessee hereby rents, leases and hires from the Lessor, the Equipment listed on Exhibit A attached hereto and incorporated herein by reference. The Lessee shall be entitled to possession of each piece of the Equipment and may retain possession of the Equipment so long as the Lessee is not in default under this Lease Agreement. THIS LEASE AGREEMENT IS NOT A PLEDGE OF THE FULL FAITH AND CREDIT OF THE LESSEE, AND DOES NOT CREATE ANY OBLIGATION ON THE PART OF THE LESSEE EXCEPT AS SPECIFICALLY STATED HEREIN. Lessee shall make Rental Payments with respect to each Fiscal Year in consideration of the Lessee’s use and possession of the Equipment during such Fiscal Year, subject to abatement as described in Section 4.4. Except as expressly set forth in this Lease Agreement (including Section 4.4 hereof), the Lessee’s obligation to pay all Rental Payments payable hereunder and the Lessee’s obligations otherwise to perform its obligations under or with respect to this Lease Agreement and the other Lease Documents, (1) are payable exclusively from legally available funds, (2) shall not be construed to be an indebtedness within the meaning of any applicable constitutional or statutory limitation or requirement, and (3) shall not be subject to (i) any right of setoff, counterclaim, recoupment, defense or other right which the Lessee may have against the Lessor, the manufacturer or vendor of the Equipment, or any other Person, including those arising or allegedly arising out of claims (present or future, alleged or actual, and including claims arising out of strict liability in tort or negligence of the Lessor) of the Lessee against the Lessor under this Lease Agreement or otherwise, (ii) the existence of any collateral, guaranty or security interest, or (iii) any insolvency, bankruptcy, reorganization or similar proceedings by or against Lessee. It is the intention of the parties that all Rental Payments and other amounts due hereunder shall continue to be payable in all events in the manner and at the times set forth herein unless the obligation to do so shall have been abated or terminated pursuant to the express terms hereof.
LEASE TERM
The Lease Term shall commence on the Commencement Date and shall terminate, except as otherwise expressly provided herein, upon the first to occur of: the exercise by Lessee of the option to purchase the Equipment pursuant to Article 18 hereof and payment of the Concluding Payment and all amounts payable in connection therewith; a default by the Lessee and the Lessor’s election to terminate this Lease Agreement pursuant to Article 14; or (c) the payment by the Lessee of all Rental Payments authorized or required to be paid by the Lessee hereunder during the Lease Term.
RENTAL PAYMENTS
Amount and Times of Payment
. The Lessee hereby agrees to pay rental payments hereunder in the amounts and on the dates identified in Exhibit B. 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.
Rental Payments
. All rental payments required to be made to the Lessor hereunder shall be made by wire or other form of electronic payment in accordance with written instructions provided by Lessor or, with Lessor’s consent, by such other commercially reasonable method of payment. The Lessee shall pay the rental payments in lawful money of the United States of America from monies legally available therefor.
Late Charges
. Whenever any rental payment or other amount payable to Lessor by Lessee hereunder is not paid within ten (10) business days after such due date, Lessee agrees to pay Lessor a late charge on the delinquent amount at the “Default Rate,” which is one percent (1%) per month, or the maximum amount permitted under applicable law, whichever is less.
Abatement of Rental Payments
. If there is substantial interference with or loss of Lessee’s beneficial use or operation of the Equipment subject to this Lease Agreement (a “Loss of Use or Occupancy”), rental payments due hereunder and other amounts shall be subject to abatement during any period in which there is a Loss of Use or Occupancy in the same proportion that the portion of the Equipment unavailable for Lessee’s beneficial use and operation bears to all of the Equipment subject to this Lease Agreement; provided, however, that during such abatement, special sources of legally available and/or properly appropriated funds may, and the proceeds of funds derived from rental interruption insurance shall, be applied to pay the rental payments in accordance with the terms of this Lease, including, without limitation, Section 6.7 hereof. For each potential Loss of Use or Occupancy, decisions on (1) whether or not abatement shall apply; (2) the date upon which abatement shall commence; (3) the applicable portion of rental payments to be abated; and (4) the concluding date of the particular abatement, shall all be determined by agreement of Lessee and Lessor in their reasonable discretion. To the fullest extent permitted by applicable law, Lessee hereby waives the benefits of any and all rights to terminate this Lease Agreement (including California Civil Code Sections 1932 and 1933) by virtue of any such interference, and this Lease Agreement shall continue in full force and effect. Lessee shall notify Lessor in writing of any threat to its use or operation of the Equipment that will or may trigger an abatement hereunder within fifteen (15) days after it has knowledge of such threat. The obligation to make full rental payments with respect to the Equipment under this Lease Agreement shall recommence as of the date Lessee has regained beneficial use and operation of such Equipment, and the provisions of this Lease Agreement, including, but not limited to, dates on which rental payments are due, shall be extended for a period equal to the period the obligation to make rental payments was abated; provided, however, that the Lease Term shall not be extended for any period in excess of the greater of the estimated or actual useful life of the Equipment. Following an extension of the Lease Term pursuant to the provisions of this Section 4.4, the Rental Payment Schedule attached hereto as Schedule 1 to Exhibit B shall be deemed to be modified to reflect such extension.
Allocation of Interest
. A portion of each rental payment shall be allocated to interest, with the imputed interest based on a 360-day year consisting of twelve 30-day months.
Intentionally Omitted
.
Covenant to Budget and Appropriate
. Lessee covenants to take such action as may be necessary to include all rental payments due under this Lease Agreement in each of its budgets during the Lease Term and to make the necessary annual appropriations for all such rental payments. The covenants on the part of Lessee in this Section 4.7 shall be deemed to be and shall be construed to be a duty imposed by applicable law and it shall be the duty of each and every public official of Lessee to take such action and do such things as are required by applicable law in the performance of the official duty of such officials to enable Lessee to carry out and perform the covenants and agreements in this Lease Agreement and agreed to be carried out and performed by Lessee.
ESCROW FUND
Escrow Fund
. On the Commencement Date, Lessor and Lessee shall enter into an escrow agreement in form and substance attached hereto as Exhibit K (the “Escrow Agreement”) dated the Commencement Date, by and among Lessor, Lessee, and the escrow agent named therein, relating to the non-interest bearing escrow fund (an “Escrow Fund”) created thereunder. On the Commencement Date, Lessor shall deposit: $[________] into the Escrow Fund to be held in escrow and applied upon the express terms and conditions of the Escrow Agreement for the acquisition of the Equipment and payment of costs of issuance relating to the execution and delivery of this Lease Agreement which shall be disbursed as provided for in the Closing Memorandum attached hereto and the Escrow Agreement.
RESPONSIBILITIES OF LESSEE
Care and Use
. The Lessee shall use the Equipment in a careful and proper manner, in compliance with all applicable laws and regulations, and at its sole cost and expense, service, repair and maintain the Equipment so as to keep the Equipment in good condition, repair, appearance and working order for the purposes intended, ordinary wear and tear excepted, and shall replace any part of the Equipment as may from time to time become worn out, lost, stolen, destroyed or damaged or is unfit for use. Any and all additions to or replacements of the Equipment and all parts thereof shall constitute accessions to the Equipment and shall be subject to all the terms and conditions of this Lease Agreement and included in the term “Equipment” as used in this Lease Agreement. If requested by the Lessor, the Lessee shall enter into or cause to be entered into, and maintained in full force and effect during the term of this Lease Agreement, standard maintenance contracts satisfactory to the Lessor covering the Equipment and shall comply with all its obligations thereunder. The Lessee shall furnish evidence to the Lessor of such signed maintenance agreement at or prior to the date of this Lease Agreement and the payment of all charges and premiums therefor. Unless otherwise notified by Lessor in writing in accordance with this Agreement, Lessee may undertake maintenance of the Equipment by its employees in lieu of such a maintenance agreement. Substitute maintenance may be used if first approved by the Lessor in writing. Upon the early termination of this Lease Agreement pursuant to Article 14, the Lessee shall permit the Lessor to remove the Equipment from the premises in the same condition as originally received, ordinary wear and tear excepted, and in such a condition which will permit the Lessor to be eligible for such standard maintenance contract without incurring any expense to repair or rehabilitate the Equipment.
Inspection
. The Lessor shall have the right upon reasonable prior notice to the Lessee to enter into and upon the premises where the Equipment is located to inspect the Equipment and observe its use during normal business hours.
Utilities
. The Lessee shall pay all charges for gas, water, steam, electricity, light, heat or power, telephone or other utility service, if any, furnished to or used in connection with the Equipment during the term of this Lease Agreement. There shall be no abatement of rental payments on account of interruption of any such services due to nonpayment by Lessee.
Taxes
. The Lessee agrees to pay when due any and all taxes relating to the Equipment and the Lessee’s obligations hereunder, including but not limited to, all license or registration fees, gross receipts tax, sales and use tax, if applicable, license fees, documentary stamp taxes, rental taxes, assessments, charges, ad valorem taxes, excise taxes, and all other taxes, licenses and charges imposed on the ownership, possession or use of the Equipment by any governmental body or agency, together with any interest and penalties, other than taxes on or measured by the net income of the Lessor.
Alterations
. Without the prior written consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee shall not make any alterations, modifications or attachments to the Equipment which cannot be removed without materially damaging the functional capabilities or economic value of the Equipment. Upon return of the Equipment and at the Lessor’s request, the Lessee at its sole cost and expense, will remove all alterations, additions and attachments and repair the Equipment as necessary to return the Equipment to the condition in which it was furnished, ordinary wear and tear excepted.
Transportation and Installation Charges
. The Lessee shall be responsible for all charges relating to the transportation of the Equipment to the Lessee’s location and the installation at such location.
Insurance
. [Under review by City Risk Manager]
(a) The Lessee shall continuously maintain at its sole cost and expense or cause to be maintained (i) public liability insurance for death or injuries to persons, or damage to property arising out of or in any way related to the Equipment sufficient to protect Lessor and its assigns from liability in all events and shall name Lessor as an additional insured, (ii) property insurance on the Equipment covering such risks as are customarily insured against by reasonable and prudent government bodies of like size for such equipment, and in such amounts at a minimum equal to the greater of the outstanding principal amount under this Lease Agreement or the replacement value of the Equipment with such deductibles as required, and with such insurance companies as shall be reasonably satisfactory to the Lessor, and (iii) workers’ compensation coverage as required by the laws of the State. Lessor shall be named as an additional insured on the property insurance policy and all insurance for loss or damage shall provide that losses if any, shall be payable to the Lessor. Reasonable evidence of all required liability insurance shall be provided to the Lessor. The Lessee shall pay the premiums therefor and deliver to the Lessor a certification in the form of Exhibit D or other evidence reasonably satisfactory to the Lessor of such insurance coverage. Each insurer shall also agree by endorsement upon the policy or policies issued by it that it will give thirty (30) days prior written notice to the Lessor of cancellation, non-renewal, or material modification of such policy and ten (10) days prior written notice for non-payment of premium. The proceeds of property insurance shall be applied by Lessee and Lessor: toward the replacement, restoration or repair of the Equipment, or, if the Equipment cannot be replaced, restored, or repaired to at least the then outstanding principal amount of the remaining Rental Payments, then toward payment of the obligations of the Lessee hereunder. The Lessee hereby appoints the Lessor as the Lessee’s attorney-in-fact to make claim for, receive payment of, and execute all documents, checks or drafts received in payment of loss or damage under any such property insurance policy. In lieu of the insurance policies described above, and with the consent of the Lessor, which consent shall not be unreasonably withheld, the Lessee may self-insure the Equipment by means of a self-insurance program whereby funds are set aside and maintained for the purpose of self-insuring the property of the Lessee. If Lessee chooses to self-insure the Equipment, Lessee will, upon request by Lessor, provide Lessor with evidence of the self-insurance program in form and substance satisfactory to Lessor. (b) Lessee shall maintain or cause to be maintained at its expense, throughout the Lease Term, insurance against rental payment abatement and loss of use of the related Equipment or portions thereof, with coverage equal to the maximum total rental payments payable by Lessee hereunder for any consecutive twenty-four (24) month period. The policy shall insure against abatement of rental payments payable by Lessee hereunder resulting from Lessee’s loss of use of the Equipment or any substantial portion thereof and caused by damage or destruction of the Equipment covered by the City’s property insurance. Such insurance may be maintained in conjunction with or separate from any other similar insurance carried by Lessee; provided, however, Lessee shall not be permitted to self-insure with respect to the rental interruption insurance required by this subparagraph. The net proceeds of such insurance shall be applied to pay Rental Payments as and when such payments become due hereunder. (c) Lessee shall provide or cause the Vendor for the Equipment to provide to Lessor payment and performance bonds from the Vendor for procurement and installation of the equipment as specified in the Installation Agreement, each naming the Lessor as a dual oblige and issued by a surety company rated “A” or better by AM Best in an amount equal to the Equipment.
Risk of Loss
. If the Equipment or any portion thereof hereunder is destroyed (in whole or in part) or is damaged by fire or other casualty or title to, or the temporary use of, the Equipment or any part thereof hereunder is taken under the exercise of the power of eminent domain, Lessee shall immediately notify Lessor. Lessee and Lessor shall cause the net proceeds of any insurance claim (including self-insurance) or condemnation award to be applied to the prompt repair, restoration, modification or replacement of the Equipment so affected or, if the Equipment cannot be replaced, restored, or repaired to at least the then outstanding principal amount of the remaining Rental Payments, then toward payment of the obligations of the Lessee hereunder, to be applied as a prepayment of Rental Payments pursuant to Section 18.2. Any balance of net proceeds remaining after completion of such work or payment of all Rental Payments due and payable hereunder including the applicable Concluding Payment, if sufficient insurance or condemnation proceeds are available to make such payments pursuant to the preceding sentence, shall be paid promptly to Lessee. For the avoidance of doubt, Lessee’s obligations under this Section 6.8 are limited to available insurance or condemnation proceeds.
Performance by the Lessor of the Lessee’s Responsibilities . Any performance required of the Lessee or any payments required to be made by the Lessee, if not timely performed or paid, may be performed or paid by the Lessor, and in that event, the Lessor shall be immediately reimbursed by the Lessee for these payments and for any costs and expense, legal or otherwise, associated with the payments or other performance by the Lessor, with interest thereon at the Default Rate.
Financial Statements
. The Lessee agrees that it will furnish the Lessor at such reasonable times as the Lessor shall request, but in no event later than thirty (30) days after the end of each Fiscal Year, the Lessee’s annual budget, budget spending resolution, or other proof of appropriation for the ensuing Fiscal Year evidencing Lessee’s ability to continue the Lease Term for the next succeeding Fiscal Year. Additionally, Lessee shall furnish to Lessor, upon request, as soon as available, but in no event later than 270 days after the end of each Fiscal Year, the audited financial statements of Lessee (or unaudited financial statements, if audited financial statements are not available), in customary and reasonable detail including the report provided by Lessee’s auditor. Posting the Lessee’s budget and audited and unaudited financial statements to the Lessee’s website or https://emma.msrb.org/ shall satisfy the Lessee’s obligation hereunder to deliver such materials to the Lessor. The Lessee represents and warrants to the Lessor that all financial statements which have been delivered to the Lessor, if any, accurately reflect the Lessee’s financial condition as of the date of such financial statements.
EQUIPMENT
Title
. Title to the Equipment and any and all additions, repairs, replacements or modifications thereto, shall be deemed to be vested in the Lessee subject to the rights of the Lessor hereunder from and after the date of the acceptance of the Equipment so long as the Lessee shall not be in default hereunder, and shall vest permanently in the Lessee upon the completion of all rental payments, free and clear of any lien or security interest of the Lessor therein. Immediately upon the occurrence of an Event of Default by the Lessee hereunder, title to the Equipment (and all additions, repairs, replacements or modifications thereto) shall revert to the Lessor, free and clear of any right, title or interest of the Lessee unless the Lessor elects otherwise, without the necessity of any further action or the execution of any documents by the parties. Lessee will, nevertheless, execute and deliver any such instruments as Lessor may request to evidence such transfer. Lessee irrevocably designates, makes, constitutes and appoints Lessor and its assignee as Lessee’s true and lawful attorney (and agent infact) with power, at such time of termination or times thereafter as Lessor in its sole and absolute discretion may determine, in Lessee’s or Lessor’s or such assignee’s name, to endorse the name of Lessee upon any bill of sale, document, instrument, invoice, freight bill, bill of lading or similar document relating to the Equipment in order to vest title in Lessor and transfer possession to Lessor when and if required under this Section 7.1.
Security Agreement
.
The provisions of this Section 7.2(a) apply generally to all Equipment, regardless of the type, and the Escrow Fund: To secure the performance of all of Lessee’s obligations hereunder, Lessee hereby grants to Lessor, and Lessor shall have and retain, a security interest constituting a first priority and perfected lien and security interest on the Equipment delivered hereunder and on any attachments, proceeds therefrom. Lessee agrees to execute (as applicable) and use its reasonable, good faith efforts to deliver such additional documents, including, without limitation, opinions of counsel, financing statements, landlord-tenant or mortgagee waivers, notices and similar instruments, in form satisfactory to Lessor, that Lessor deems necessary or appropriate to establish and maintain its security interest in the Equipment or for the confirmation or perfection of Lessor’s rights hereunder. As further security therefor, Lessee hereby grants to Lessor a first priority security interest in the cash and negotiable instruments from time to time in the Escrow Fund and all proceeds (cash and non-cash) thereof, and agrees with respect thereto that Lessor shall have all the rights and remedies of a secured party under the applicable provisions of the Uniform Commercial Code as enacted in the applicable state. Lessee, at its expense, will protect and defend Lessee’s rights in the Equipment and Lessor’s rights and interests therein and will keep the Equipment free and clear from any and all claims, liens, encumbrances and legal processes of Lessee’s creditors and other persons. Lessee agrees that financing statements may be filed with respect to the security interest in the Equipment.
During the Lease Term, ownership and legal title of all of the Equipment and all substitutions, repairs, modifications, and replacements shall be in Lessee, and Lessee shall take all necessary action to vest such ownership and title in Lessee. Lessor does not own the Equipment, and, by this Lease Agreement, Lessor is merely financing the acquisition of the Equipment for the Lessee. Lessor has not been in the chain of title, does not operate, control or have possession or control over the Equipment, or Lessee’s use, maintenance, operation, storage, or maintenance of the Equipment. Lessee is entitled to use and possession of the Equipment, subject to the rights of Lessor hereunder (including its interest in the Equipment as the lessor hereunder). If Lessor terminates this Lease Agreement pursuant to the terms hereof, all rights, title, and interests in the Equipment shall immediately vest in Lessor free and clear of any right, title or interest of Lessee. [Note to Drafter: the deleted sentence repeated language in Section 7.2(a)] Personal Property; No Encumbrances
. Lessee and Lessor hereby agree that the Equipment (other than the portion thereof described as envelope improvements on Exhibit A hereto) is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to, or imbedded in, or permanently resting upon, real property or any building thereon or any fixtures, or attached in any manner to what is permanent by any means of cement, plaster, nails, bolts, screws or otherwise. Following the Commencement Date, Lessee shall not create, incur or assume any new mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on any of the real estate where the Equipment is or will be located or enter into any agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished with a waiver of interest in the Equipment acceptable to Lessor or its assigns in its discretion from any party taking an interest in any such real estate prior to such interest taking effect, such consent shall not unreasonably withheld. [Lessor acknowledges and agrees that certain real property where Equipment is located is subject to lease and/or license agreements entered into prior to the date hereof (such as the Permitted Encumbrances) and Lessor hereby expressly consents to all such arrangements] [and further consents to Permitted Future Encumbrance at all real properties where Equipment will be located that do not conflict with Lessor’s rights and security hereunder; provided that (i) no existing arrangement is changed and (ii) no future agreement is made in a manner that would violate the covenant against private business use contained in subsection (iv) of Section 11.1.] [City confirming whether lease, license or use arrangements exist at the facilities] Liens
. The Lessee shall not directly or indirectly create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, security interest, encumbrance or claim on or with respect to the Equipment or any interest therein, except for the lien and security interest of the Lessor therein created under this Lease Agreement. The Lessee shall promptly, at its own expense, take such action as may be necessary to duly discharge any such mortgage, pledge, lien, security interest, charge, encumbrance or claim if the same shall arise at any time during the Lease Term.
Inspection; Acceptance and Written Notice Defects
. Immediately upon receipt and installation of the Equipment, the Lessee shall inspect the Equipment. Unless the Lessee gives the Lessor written notice of each defect or other proper objection to the Equipment before the execution of the Acceptance Certificate and Payment Request, it shall be conclusively presumed upon execution of an Acceptance Certificate and Payment Request, as between the Lessor and the Lessee, that Lessee has fully inspected and acknowledged that the Equipment described in the Acceptance Certificate and Payment Request is in good condition and repair, has been properly installed and is performing satisfactorily, and that the Lessee is satisfied with and has accepted such Equipment in such good condition and repair.
Use of Equipment; Maintenance and Repairs
. Lessee shall keep the Equipment within the State specified on Exhibit B in the “Equipment Location” section and Lessee shall not remove any of the Equipment therefrom without Lessor’s prior written consent. Lessee shall use the Equipment for the purpose for which such Equipment was designed. Lessee shall at all times and at the Lessee’s sole cost and expense operate, maintain, service and repair the Equipment in good operating order, repair and condition (A) in accordance and consistent with (1) the manufacturer’s warranties, recommendations and all maintenance and operating manuals or service agreements, whenever furnished or entered into, including any subsequent amendments or replacements thereof, issued by the manufacturer, (2) the requirements of all applicable insurance policies, (3) preserving all rights to any warranties, indemnities or other rights or remedies (such service to include monitoring the degradation of the Equipment and enforcing or assisting with the enforcement of the applicable warranties with respect to such degradation), (4) all applicable laws, ordinances, regulations or requirements of any governmental authority, official, board or department relating to its installation, possession, use or maintenance, and (5) prudent industry standards; and (B) without limiting the foregoing, so as to cause the Equipment to be in at least the same condition as when delivered to the Lessee hereunder, except for ordinary wear and tear. Lessee shall not make any alterations, additions, or improvements to the Equipment that are not readily removable without causing damage to or reducing the value of the Equipment. All alterations, additions, or improvements not readily removable shall become part of the Equipment leased by Lessor to Lessee hereunder. Notwithstanding anything to the contrary in this Agreement, including Section 16.1, with 30 days’ prior written notice to Lessor, Lessee may relocate the Equipment to another location within the City of Commerce, California; provided that (1) Lessee shall take reasonable care not to damage the Equipment, (2) the relocation of the Equipment by Lessee shall not constitute an abatement event under Section 4.4 hereof, and (3) Lessee shall deliver an opinion of a nationally recognized counsel in the area of tax exempt municipal obligations satisfactory to Lessor confirming that such relocation will not adversely affect the exclusion of the interest components of the Rental Payments from gross income for federal income tax purposes.
Essentiality
. Lessee represents that, with respect hereto, the use and operation of the Equipment is essential to its proper, efficient, and economic governmental operation and the functions performed by the Equipment could not be transferred to other equipment available for its use. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last rental payment scheduled to be paid hereunder. On the Commencement Date, Lessee shall complete and provide Lessor a certificate in the form of Exhibit E.
Sublease
. Lessee will not sublease or otherwise in any manner transfer, deliver or, except as expressly consented to by Lessor, relinquish possession (except on a temporary basis for repair or maintenance) or use of the Equipment without the prior written consent of Lessor. [Notwithstanding anything herein to the contrary, Lessor acknowledges and agrees that certain real property where Equipment is located is subject to lease and/or license agreements entered into prior to the date hereof and Lessor hereby expressly consents to all such arrangements and further consents to future lease and license agreements at such real properties that do not conflict with Lessor’s rights and security hereunder; provided that (i) no existing arrangement is changed and (ii) no future agreement is made in a manner that would violate the covenant against private business use contained in subsection (iv) of Section 11.1.] No Warranties
. As between Lessor and Lessee, Lessee acquires the leasehold interest in the Equipment “AS IS”; however, Lessee’s acceptance of the Equipment from the seller or manufacturer thereof is not governed by this Lease Agreement. Lessee acknowledges that Lessor did not manufacture the Equipment. Lessor does not represent the manufacturer, supplier, owner or dealer, and Lessee selected the Equipment based upon Lessee’s own judgment and based on advice from consultants. Lessor makes no warranties, express or implied, including warranties of merchantability or fitness for a particular purpose or otherwise or as to the Equipment’s value, design, condition, use, capacity or durability. Lessee agrees that regardless of cause, Lessor is not responsible for, and Lessee will not make any claim against Lessor for, any damages, whether consequential, direct, special or indirect incurred by Lessee in connection with the Equipment. Neither the manufacturer, supplier or dealer nor any salesperson, employee or agent of the manufacturer, supplier or dealer is Lessor’s agent or has any authority to speak for Lessor or to bind Lessor in any way. For and during the Lease Term, Lessor assigns to Lessee any manufacturer’s or supplier’s product warranties, express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary services furnished in connection with such warranties at Lessee’s sole expense. Lessee agrees that (a) all Equipment will have been purchased in accordance with Lessee’s specifications from suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to any manufacturer’s or supplier’s product warranties or guaranties, (d) no manufacturer or supplier or any representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or agreement made by any manufacturer or supplier or any representative of said parties shall not be binding upon Lessor.
WARRANTIES AND REPRESENTATIONS OF THE LESSEE
The Lessee warrants and represents to the Lessor as follows, which representations and warranties shall be continuing. [Under review by the City] The Lessee is a political subdivision of the State of California within the meaning of Section 103(c) of the Code and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as such. Lessee has a substantial amount of one or more of the following sovereign powers: (i) the power to tax, (ii) the power of eminent domain, and (iii) police power.
The Lessee is authorized under the Constitution and laws of the State of California to enter into this Lease Agreement and the transactions contemplated hereby and to perform all of its obligations hereunder.
The execution and delivery of this Lease Agreement by or on behalf of the Lessee has been duly authorized by all necessary action of the Governing Body, and the Lessee has obtained such other approvals and consents as are necessary to consummate this Lease Agreement. The Lessee further represents and warrants that all requirements have been met and procedures have been followed in order to ensure the enforceability of this Lease Agreement in accordance with its terms.
The Lessee has complied with such public bidding requirements as may be applicable to this Lease Agreement and has complied or will comply with such requirements for the acquisition of the Equipment hereunder.
The Lessee shall cause to be executed and delivered to the Lessor (1) an incumbency and closing certificate in substantially the form attached as Exhibit F hereto, (2) an Opinion of Lessee’s Counsel in substantially the form attached as Exhibit G hereto and (3) a Tax Opinion of Lessee’s Counsel in substantially the form attached as Exhibit H hereto.
The Lessee has an immediate need for, and expects to make immediate use of all of the Equipment which need is not temporary or expected to diminish during the term of this Lease Agreement.
The execution, delivery and performance of this Lease Agreement and transactions contemplated herein will not violate any judgment, order, law or regulation applicable to the Lessee or result in any breach of, or constitute a default under, any indenture, mortgage, deed of trust, bond, loan or credit agreement or other instrument to which the Lessee is a party or by which it is bound.
There are no actions, suits or proceedings pending or, to the knowledge of the Lessee, threatened against or affecting the Lessee in any court or before any governmental commission, board or authority which, if adversely determined, would have a material adverse effect on the ability of the Lessee to perform its obligations hereunder.
The Equipment is essential to and will be used only for the purpose of performing one or more governmental functions of the Lessee consistent with the scope of the Lessee’s authority and will not be used in a trade or business of any person or entity. The Lessee shall execute and deliver to Lessor an Essential Use Certificate dated as of the Commencement Date in form and substance reasonably satisfactory to the Lessor.
The Lessee will promptly and duly execute and deliver to the Lessor such further documents, instruments and assurances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Lessor hereunder.
The Lessee has sufficient funds in its budget for the current Fiscal Year to pay the aggregate amount of the rental payments due under this Lease Agreement during the current Fiscal Year. The Lessee has never failed to pay payments coming due under any bond issue, lease purchase agreement or other indebtedness obligation of Lessee. [City to confirm] Lessee has not experienced any Loss of Use or Occupancy, which would adversely impact its beneficial use and operation of the Equipment and adversely affect its obligation to make full rental payments with respect to the Equipment under this Lease Agreement otherwise permit an abatement of Rental Payments under this Lease Agreement. (n) The useful life of the Equipment will not be less than the Lease Term. (o) The total estimated cost of the Equipment is $____________. Lessee will pay all costs of acquiring the Equipment in excess of the amount deposited by Lessor in the Escrow Fund allocated to payment of costs of the Equipment ($____________). Lessee agrees with Lessor that no moneys shall be disbursed from the Escrow Fund for costs of the Equipment until Lessee has provided to Lessor evidence of Lessee’s payment for costs of the Equipment over the amount deposited by Lessor in the Escrow Fund. (p) Lessee is the fee owner of the real estate where the Equipment is and will be located and has good and marketable title thereto, and other than the Permitted Encumbrances, there exists no mortgage, pledge, lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such real estate. The Equipment is not a replacement, repair, substitution or proceeds of any equipment or personal property subject to a prior lien or security interest of a third party.
WARRANTIES AND REPRESENTATIONS OF THE LESSOR
The Lessor warrants and represents to the Lessee as follows, which representations and warranties shall be continuing.
The Lessor is a corporation duly incorporated under the laws of the State of California and is in good standing with the State of California and is duly authorized to enter into the transactions contemplated by this Lease Agreement and to carry out its obligations hereunder; The Lessor has full power and authority to enter into this Lease Agreement and all other documents relating thereto and the performance of the Lessor’s obligations hereunder have been duly and validly authorized, executed and delivered by the Lessor and approved under all laws, regulations and procedures applicable to Lessor and this Lease Agreement constitutes a valid, legal and binding obligation of the Lessor, enforceable in accordance with its terms; Lessor hereby assigns to Lessee, to the extent that it may lawfully do so, so long as no Event of Default shall have occurred and be continuing hereunder, all rights and benefits that Lessor may have under any warranty, guaranty or the like that may be made with respect to the Equipment by the manufacturer, seller and/or supplier (collectively, the “Vendor”) thereof. To the fullest extent permitted by applicable law, Lessor shall not be liable to Lessee or any third party for any loss, damage, injury or expense of any kind or nature caused directly or indirectly by any of the Equipment or the use or maintenance thereof or any defect therein, the failure of operation thereof or by any interruption of service or loss of use thereof or for any loss of business or damage whatsoever and howsoever caused. Lessor makes no warranty as to the treatment of this Lease for tax or accounting purposes or as to the compliance of the Equipment with applicable government regulations or requirements. Lessee agrees to look solely to the Vendor for any claim arising from any defect, breach of warranty, failure or delay in delivery, mis-delivery or inability to use the Equipment for any reason whatsoever and Lessee’s obligations to Lessor hereunder shall not in any manner be affected thereby, including (without limitation) Lessee’s obligations to pay Lessor all rental payments and other amounts payable hereunder, subject to Section 4.8 hereof. Lessee has selected both the Equipment and the Vendor and acknowledges that Lessor has not participated in any way in Lessee’s selection of the Equipment or the Vendor. Lessor has no obligation to install, erect, test, adjust, service or maintain the Equipment.
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY LESSEE HAS SELECTED EACH ITEM, TYPE, QUALITY, QUANTITY AND SUPPLIER OF THE EQUIPMENT BASED UPON RECOMMENDATIONS OF ITS INDEPENDENT CONSULTANTS PRIOR TO HAVING REQUESTED LESSOR TO FINANCE THE SAME AND THAT LESSOR HAS NOT MADE ANY, AND MAKES NO, WARRANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED, AS TO ANY MATTER RELATING TO THE SUITABILITY OF THE EQUIPMENT, ITS VALUE, DESIGN, CONDITION, DURABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, MERCHANTABILITY, OPERATION, MATERIALS, WORKMANSHIP AND/OR ITS QUALITY. AS BETWEEN LESSEE AND LESSOR, LESSEE LEASES, PURCHASES AND ACQUIRES THE EQUIPMENT “AS IS” “WHERE IS” AND “WITH ALL FAULTS.” Lessee agrees that Lessor shall have no liability or be obligated in any manner for any obligation, loss, expense, claim, damage, action, suit or proceeding arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, installation, possession, condition, lease, use, operation or return of the Equipment, notwithstanding the full payment of all obligations under this Lease Agreement.
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TAX COVENANTS AND INDEMNIFICATION
[Under review by City]
Covenants
. The parties assume that the Lessor can exclude the interest component of the rental payments from Federal gross income. The Lessee covenants and agrees that it will rebate an amount equal to any excess earnings on the Escrow Fund to the Federal Government if required by, and in accordance with, Section 148(f) of the Code, and make the annual determinations, and maintain the records required by and otherwise comply with all regulations applicable thereto; register in writing the owner of this Lease Agreement so as to meet the applicable requirements of Section 149(a)(3) of the Code; timely file a Form 8038-G with the Internal Revenue Service in accordance with Section 149(e) of the Code; not permit the Equipment to be directly or indirectly used for a private business use within the meaning of Section 141 of the Code; and comply with all provisions and regulations applicable to excluding interest from Federal gross income pursuant to Section 103 of the Code.
Further Covenants
. The Lessee further covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest portion of the rental payments made hereunder under Section 103 of the Code. The Lessee will not directly or indirectly use or permit the use of any proceeds available from the Lessor or any other funds of the Lessee, or take or omit to take any action that would cause the lease purchase obligation evidenced by this Lease Agreement to be an “arbitrage bond” within the meaning of Section 148(a) of the Code. To that end, the Lessee will comply with all requirements of Section 148 of the Code to the extent applicable to the lease purchase obligation evidenced by this Lease Agreement.
Indemnification
. If the Lessor receives notice, in any form, from the Internal Revenue Service that it has determined that the Lessor may not exclude any interest paid hereunder from Federal gross income because the Lessee breached a covenant contained herein, then the Lessee shall pay to the Lessor, within ninety (90) days after the Lessor notifies the Lessee of such determination, an amount which, with respect to the rental payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the interest component of all rental payments due through the date of such event), will restore to the Lessor its after-tax yield (assuming tax at the highest marginal tax rate and taking into account the time of receipt of payments and reinvestment at the after-tax yield rate) on the transaction evidenced by this Lease Agreement through the date of such payment. Additionally, the Lessee agrees that upon the occurrence of such an event, it shall pay as additional rent to the Lessor on such succeeding rental payment due date such amount as will maintain such after-tax yield to the Lessor.
GENERAL INDEMNIFICATION
The Lessee hereby agrees to indemnify, protect and save the Lessor (but not Alliance Building Solutions, Inc.) harmless, to the extent permitted by law, from all liability, obligations, losses, claims, damages, actions, suits, proceedings, costs and expenses, including attorneys’ fees, arising out of, connected with, or resulting directly or indirectly from the Equipment, including without limitation, the manufacture, selection, delivery, possession, condition, lease, use, operation or return of the Equipment. The indemnification arising under this section shall continue in full force and effect notwithstanding the full payment of all obligations due under this Lease Agreement. Notwithstanding the foregoing, the Lessee does not waive any sovereign immunity or other defense which may be available to it under applicable law.
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DEFAULT AND REMEDIES
Definition of Default
. The Lessee shall be deemed to be in default hereunder upon the happening of any of the following events of default, which default (other than a monetary default under Section 14.1(a) or failure to maintain insurance under Section 14.1(e))is not cured within thirty (30) days after receipt of written notice thereof (an “Event of Default”).
The Lessee shall fail to make any rental payment or pay any other sum under this Lease Agreement when due or shall fail to perform or observe any term or condition or covenant of this Lease Agreement, subject to the last paragraph of this Section 14.1.
Proceedings under any bankruptcy, insolvency, reorganization or similar litigation shall be instituted by or against the Lessee, or a receiver, custodian or similar officer shall be appointed for the Lessee or any of its property, and such proceedings or appointments shall not be vacated, or fully stayed, within sixty (60) days after the institution or occurrence thereof.
Any warranty, representation or statement made by the Lessee is found to be incorrect or misleading in any material respect on the date made.
An attachment, levy or execution is levied upon or against the Equipment.
Any insurance carrier cancels any insurance on the Equipment which is required hereunder without the Lessee first providing replacement coverage.
The Equipment or any part thereof is abused, illegally used, misused, lost, destroyed or damaged beyond repair.
The failure of the officer charged with the preparation of the Lessee’s budget to include in the budget for each Fiscal Year of the Lessee during the Lease Term a request that the Governing Body appropriate in such Fiscal Year the amount of the rental payments and other payments due under this Lease Agreement during such Fiscal Year.
Remedies on Default
. Upon the occurrence of any Event of Default, the Lessor may exercise any one or more of the following remedies as the Lessor in its sole discretion shall elect. [Intentionally Omitted]
Proceed by appropriate court action to enforce performance by the Lessee of the applicable covenants of this Lease Agreement or to recover for the breach thereof including the payment of Rental Payments as they come due and payable hereunder.
With or without terminating this Lease Agreement, enter the premises where the Equipment is located and retake possession of the Equipment wherever situated or require Lessee at Lessee’s expense to promptly return any or all of the Equipment to the possession of Lessor at a place specified by Lessor, without any court order or other process of law and without liability for entering the premises and sell, lease, sublease or make other disposition of the same in a commercially reasonable manner for the account of the Lessee, and apply the proceeds of any such sale, lease, sublease, or other disposition, after deducting all costs and expenses, including court costs and reasonable attorneys’ fees, incurred with the recovery, repair, storage and other sale, lease, sublease or other disposition costs, toward the Rental Payments due under this Lease Agreement, holding Lessee liable for the difference between (i) the Rental Payments and other amounts payable by Lessee hereunder, and (ii) the net proceeds of any such sale, lease or sublease; provided that the amount of Lessee’s liability under this subparagraph (c) shall not exceed the Rental Payments and other amounts otherwise due hereunder plus the remaining Rental Payments and other amounts payable by Lessee to the end of the Lease Term, subject to abatement of such Rental Payments to the extent provided in Section 4.4 hereof; and provided further that any liabilities for such remaining Rental Payments and other amounts shall be required to be paid by Lessee only at the times provided for the payment of such amounts under the provisions of this Lease Agreement.
Terminate this Lease Agreement as to all or any part of the Equipment and use, operate, lease or hold the Equipment as the Lessor in its sole discretion may decide.
Provide written notice of the occurrence of an Event of Default to the Escrow Agent, and the Escrow Agent shall thereupon promptly remit to Lessor the entire balance of the Escrow Fund.
Further Remedies
. A termination hereunder shall occur only upon notice by the Lessor to the Lessee and only with respect to such portion or portions of the Equipment as the Lessor specifically elects to terminate in such notice. Except as to those parts of the Equipment with respect to which there is a termination, this Lease Agreement shall remain in full force and effect and the Lessee shall be and remain liable for the full performance of all its obligations hereunder. All remedies of the Lessor are cumulative and may be exercised concurrently or separately. The exercise of any one remedy shall not be deemed an election of such remedy or preclude the exercise of any other remedy.
Reinstatement
. Notwithstanding the exercise of any remedy granted by this Article 14, if all amounts that have become due and payable to the Lessor have been paid, all other things have been performed in respect of which there was a default and there has been paid the reasonable fees and expenses of the Lessor, including administrative expenses and attorneys’ fees paid or incurred, then the Event of Default shall be waived without further action on the part of any party hereto. Upon such payment and waiver, this Lease Agreement shall be fully reinstated, as if it had never been terminated, and the Lessee shall be restored to the use and possession of the Equipment.
INTENTIONALLY OMITTED.
ASSIGNMENT
Assignment By Lessee
. The Lessee agrees not to sell, assign, lease, sublease, pledge or otherwise encumber or suffer a lien or encumbrance upon or against any interest in this Lease Agreement or the Equipment (except for the lien and security interest of the Lessor therein) or to remove the Equipment from its place of installation without the Lessor’s prior written consent which shall not be unreasonably withheld and an opinion of nationally recognized counsel in the area of tax exempt municipal obligations satisfactory to Lessor that such subleasing will not adversely affect the exclusion of the interest components of the Rental Payments from gross income for federal income tax purposes. The Lessee’s interest herein may not be assigned or transferred by operation of law.
Assignment By The Lessor
.
Lessor’s interest in, to and under this Lease Agreement and the Equipment may be assigned and reassigned in whole or in part to one or more assignees by Lessor without the necessity of obtaining the consent of Lessee (except as provided in Section 16.2(b) below); and such assignment, transfer or conveyance shall be made only to (i) an affiliate of Lessor or (ii) banks, insurance companies, trusts, custodians or other financial institutions or their affiliates, but no such assignment, transfer or conveyance shall be effective as against Lessee unless and until Lessor has delivered to Lessee written notice thereof that discloses the name(s) and address(es) of the assignee(s) or the Lease Servicer (as hereafter provided). Nothing herein shall limit the right of Lessor or its assignees to sell, assign or grant participation interests in this Lease Agreement to one or more entities listed in (i) or (ii); provided that if such assignment is made pursuant to a participation, custodial or similar agreement under which multiple ownership interests in this Lease Agreement are created, it shall establish a single entity, owner, servicer or other fiduciary or agent to act on behalf of all of the holders of such participation interests (herein referred to as the “Lease Servicer”) with respect to the rights and interests of such holders hereunder, including the exercise of rights and remedies thereunder upon the occurrence of an event of default, and further including the maintenance of a register by which a record of the names and addresses of such holders as of any particular time is kept and agrees, upon request of Lessee, to furnish such information to Lessee. Lessee will retain all notices of assignment as a register of all assignees and will make all payments to the assignee, assignees or Lease Servicer designated in such register. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor or any assignee to protect its interest in the Equipment and in this Lease Agreement and agrees to the filing of financing statements with respect to the Equipment and this Agreement. Lessee will not have the right to and will not assert against any assignee any claim, counterclaim, defense, set-off or other right Lessee may have against Lessor.
No assignment, transfer or conveyance permitted by this Section 16.2 shall be effective as against Lessee until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee, identifies the new sole Lease Servicer, if applicable, and a representation letter in substantially the form attached as Exhibit I-1 attached hereto (the “Representation Letter”); provided, however, [Capital One Public Funding, LLC] shall be permitted to deliver to Lessee a representation letter in substantially the form attached hereto as Exhibit I -2 in connection with any assignment, transfer or conveyance where [Capital One Public Funding, LLC] is the assignee. Notices of assignment provided pursuant to this Section 16.2(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 16.2(a) hereof. During the Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the Lease Servicer (for the benefit of the assignee or assignees, as the case may be) last designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor’s security interest in and to the Equipment and all rights in, to and under this Agreement related to such Equipment.
NATURE OF AGREEMENT
The Lessor and the Lessee agree that it is their intention that, for federal income tax purposes, the interest of the Lessor in the Equipment is as a secured party and the interest of the Lessee is as a debtor, and that the Lessor neither has nor will have any equity in the Equipment. It is the agreement of the Lessor and the Lessee that the aggregate rental payments provided for hereunder constitute the purchase price of the Equipment together with the interest on the unamortized amount thereof over the term of this Lease Agreement, that each installment of Rental Payments constitutes principal and interest, which fully amortizes the purchase price of the Equipment, together with interest, over the term of this Lease Agreement, and that upon the due and punctual payment and performance of the rental payments and other amounts and obligations under this Lease Agreement, title to the Equipment shall vest permanently in Lessee as provided in this Lease Agreement, free and clear of any lien or security of the Lessor therein.
OPTION TO PURCHASE
18.1 At the option of Lessee, and provided that no Event of Default has occurred and is continuing hereunder, Lessor’s interest in all, but not less than all, of the Equipment will be transferred, conveyed and assigned to Lessee, thereby vesting title to the Equipment permanently in Lessee, and this Lease shall terminate: upon payment in full of the rental payments and all other payments then due hereunder or on any rental payment date hereunder, by paying to Lessor, in addition to the rental payment due on such date, an amount equal to the concluding payment (the “Concluding Payment”) shown for such rental payment date in the rental payment schedule in Schedule 1 to Exhibit B attached hereto. Lessee shall not have the option to purchase the Equipment hereunder as provided in the foregoing clause (b) on any rental payment date hereunder for which a Concluding Payment is not stated in the rental payment schedule. Notwithstanding anything to the contrary contained herein, the purchase option in this Article 18 is non-assignable and non-transferrable.
This option to purchase may be exercised by the Lessee on any Payment Date on or after [_________] and is conditioned upon:
the Lessee’s having performed all of the terms and conditions of the Lease Agreement between the parties other than the payment of monies not yet due and payable under this Lease Agreement; the Lessee’s giving written notice to the Lessor of its election to exercise the option not less than thirty (30) days prior to the date of exercise of the option by the Lessee; and the Lessee’s payment of the Concluding Payment in cash at the time of the exercise of the option.
18.2 Lessee may prepay the unpaid portion of Rental Payments, in whole or in part, at par, upon thirty (30) days prior written notice to Lessor from any net proceeds payable to Lessee under Sections 6.7(a) or 6.8 herein. Any prepayment in part permitted by this Section 18.2 shall be applied to the outstanding principal components of Rental Payments in inverse order of their due dates. Upon application of such partial prepayment, the Rental Payment Schedule shall be revised accordingly.
MISCELLANEOUS
Waiver
. No covenant or condition of this Lease Agreement can be waived except by the written consent of the Lessor. Any failure of the Lessor to require strict performance by the Lessee or any waiver by the Lessor of any terms, covenants or agreements herein shall not be construed as a waiver of any other breach of the same or of any other term, covenant or agreement herein.
Severability
. In the event any portion of this Lease Agreement shall be determined to be invalid under any applicable law, such provision shall be deemed void and the remainder of this Lease Agreement shall continue in full force and effect.
Governing Law
. This Lease Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of California.
Notice
. All notices made or required to be given pursuant to this Lease Agreement shall be in writing and shall be deemed duly served if and when mailed, certified or registered mail, postage prepaid, return receipt requested, to the other party at its address set forth above or at such other address as such party shall hereafter designate in writing.
If to the Lessor, address to:
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
Attention: Brad Chapman
Email: [email protected]
If to the Lessee, address to:
City of Commerce
2535 Commerce Way
Commerce, CA 90040
Attention: Edgar P. Cisneros
Email:
With a copy to:
Alvarez-Glasman & Colvin
13181 Crossroads Pkwy, North Tower – Suite 400
City of Industry, CA 91746
Attention: Noel Tapia
Section Headings
. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement.
Entire Agreement
. This Lease Agreement, together with any schedules hereto, constitutes the entire agreement between the parties and shall not be modified, amended, altered or changed except by written agreement signed by the parties.
Binding Effect
. Subject to the specific provisions of this Lease Agreement, this Lease Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
Further Assurances
. The Lessee will promptly and duly execute and deliver to the Lessor such further documents, instruments and assurances and take such further action as the Lessor may from time to time reasonably request in order to carry out the intent and purpose of this Lease Agreement and to establish and protect the rights and remedies created or intended to be created in favor of the Lessor hereunder.
Time
. Time is of the essence of this Lease Agreement.
Counterparts
. This Lease Agreement, and any exhibit hereto, may be executed in one or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument.
No Third-Party Beneficiaries
. This Lease Agreement and any documents or certificates executed in connection with, or pursuant to it, are intended only for the benefit of the Lessor, the Lessee and the Escrow Agent, and no rights are intended, or shall be deemed to be, granted to any other parties thereby.
Exhibits
. This Lease Agreement includes the Exhibits attached hereto, all of which Exhibits are made a part hereof for all purposes. Lessee and Lessor agree that if any Exhibit to this Lease Agreement contains blanks, the same shall be completed correctly and in accordance with this Lease Agreement prior to or at the time of the execution and delivery thereof.
19.13 Electronic Transactions. The parties agree that the transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.
19.14 Lessee’s Notice Filings Related to this Agreement for SEC Rule 15c2-12. In connection with Lessee’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by Lessee on and after February 27, 2019, pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), Lessor acknowledges that Lessee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its successor (“EMMA”), notice that Lessee has incurred obligations under this Lease Agreement and notice of certain subsequent events reflecting financial difficulties in connection with this Lease Agreement. Lessee agrees that it shall not file or submit, or permit to be filed or submitted, with EMMA any documentation that includes the following unredacted sensitive or confidential information about Lessor or its affiliates: address and account information of Lessor or its affiliate, e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of Lessor or its affiliates, or any account information for any related escrow agreement, unless otherwise required for compliance with the Rule or otherwise required by law. Lessee acknowledges that Lessor is not responsible for Lessee’s compliance or noncompliance with the Rule or any Continuing Disclosure Agreement. [Remainder of page intentionally left blank signature pages follow] IN WITNESS WHEREOF, the parties hereto have caused this Lease Agreement to be executed as of the day and year first above written.
LESSOR:
ALLIANCE FUNDING SOLUTIONS, INC., a California corporation By: ______________________________
Name: Brad Chapman
Title: President
LESSEE:
CITY OF COMMERCE, a California municipal corporation
By: ______________________________
Name: Edgar P. Cisneros
Title: City Manager
EXHIBIT A
DESCRIPTION OF EQUIPMENT
The Equipment shall mean [___________________________].
EXHIBIT B
EQUIPMENT SCHEDULE
1. Lease Agreement: Equipment Lease Purchase Agreement dated as of ____________ __, 20__, between the City of Commerce, as lessee, and Alliance Funding Solutions, Inc., as lessor.
2. Description of the Equipment: See Exhibit A
3. Equipment Locations: See Scope of Work attached to Exhibit A.
4. Principal Amount: $___________________
5. Rental Payment Schedule: The Rental Payments for the Equipment shall be made as set forth in Schedule 1 to Exhibit B attached hereto.
6. Interest Rate: [______]%
7. Commencement Date: [______]
8. Final Rental Payment: _________________,20__
9. Lessee’s current Fiscal Year extends from July 1 through June 30 of each year.
10. Lessee hereby represents, warrants, and covenants that, as of the date hereof, (i) its representations, warranties, and covenants set forth in the Lease Agreement are true and correct as though made on the date of execution of this Equipment Schedule, (ii) sufficient funds have been appropriated by Lessee for the payment of all Rental Payments coming due during the current Fiscal Year under the Lease Agreement, and (iii) there has been no Loss of Use or Occupancy or other event which would adversely impact the Lessee’s obligation to make Rental Payments..
Date of Equipment Schedule: _______ __, 2023.
CITY OF COMMERCE, ALLIANCE FUNDING SOLUTIONS,
as Lessee as Lessor
By: By:
Name: Edgar P. Cisneros Name: Brad Chapman
Title: City Manager Title: President
SCHEDULE 1 TO EXHIBIT B
RENTAL PAYMENT SCHEDULE
Rental
Payment Date
Total
Rental Payment
Interest
Portion
Principal
Portion
Purchase
Price *
[INSERT RENTAL PAYMENT SCHEDULE]
_________________
* Lessee may exercise its option to purchase pursuant to Article 18 of the Lease Agreement. Assumes that all Rental Payments and additional rentals due on and prior to that date have been paid.
EXHIBIT C
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF LEASE AGREEMENT AND ESCROW AGREEMENT
Alliance Funding Solutions, Inc. (“Lessor”) and City of Commerce (“Lessee”) have entered into that certain Equipment Lease Purchase Agreement dated [________] (the “Lease Agreement”), under which Lessee has, or will have prior to its execution hereof, leased equipment (the “Equipment”) described therein.
Lessee is informed by Lessor that Lessor has assigned its right, title, and interest in and to the Lease Agreement, the leased Equipment, and the rental payments to [Capital One Public Funding, LLC] (“Assignee”).
Lessor hereby directs Lessee expressly and irrevocably to pay any and all rental payments and other amounts due under the Lease Agreement to Assignee, as directed by Assignee in writing delivered to Lessee. Lessee will also direct any and all correspondence, notice and servicing requests to the Assignee at the following address:
[___________]
[___________]
[___________]
Attention: [____________]
Email: [____________]
By signing this Notice and Acknowledgment, Lessee agrees that it will pay all rental payments and other amounts due under the Lease Agreement as directed by Lessee without any set-off notwithstanding any defect in, damage to or requisition of any of the Equipment leased under the Lease Agreement, any other similar or dissimilar event, any defense, set-off, counterclaim or recoupment arising out of any claim against Lessor or Assignee.
Lessee further acknowledges that Assignee has not assumed any of Lessor’s obligations or duties under the Lease Agreement or made any warranties whatsoever as to the Lease Agreement or the Equipment. Lessee agrees that no change may be made to the Lease Agreement without the prior written consent of Assignee.
Lessee acknowledges that Assignee is acting solely as Assignee for its own loan account and not as a fiduciary for Lessee or in the capacity of broker, dealer, placement agent, municipal securities underwriter or municipal advisor. Assignee has not provided, and will not provide, financial, legal, tax, accounting or other advice to or on behalf of Lessee with respect to its purchase of the Lease Agreement. Lessee has sought and obtained financial, legal, tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters) with respect to the Lease Agreement from its financial, legal and other advisors (and not Assignee) to the extent that Lessee desired to obtain such advice. [SIGNATURE PAGE FOLLOWS]
By signing this Notice and Acknowledgment, Lessee warrants that its representations and warranties under the Lease Agreement are true and correct on the date hereof.
Date: [___________] ALLIANCE FUNDING SOLUTIONS, INC.
By:
Name:
Title:
Date: [___________] CITY OF COMMERCE, as Lessee
By:
Name: Edgar P. Cisneros
Title: City Manager
EXHIBIT D
INSURANCE CERTIFICATION
[Under review by City Risk Manager]
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
[_____ __, 20__]
Re: That certain Equipment Lease Purchase Agreement dated [____________] In connection with the above referenced Lease Agreement, the City of Commerce, as lessee (the “Lessee”) certifies that it has instructed the insurance agent named below:
Name of Agent: [____________]
Address: [____________]
Phone: [____________]
to issue the following insurance coverages:
1. Liability Insurance. Lessee is required to maintain public liability insurance, personal injury and property damage with policy limits of $3,000,000. The policy should be endorsed to name [____________] (the “Additional Insured”) as an additional insured.
2. Property Insurance. Lessee is required to maintain all risk extended coverage, malicious mischief and vandalism insurance for the Equipment described in the above-referenced Lease Agreement in an amount not less than the greater of [____________] or the full replacement cost of the Equipment. Such insurance shall be endorsed to name the Additional Insured and its successors and or assigns as an additional insured and co-loss payee with respect to such Equipment.
3. Rental Interruption Insurance. Lessee is required to maintain insurance against rental payment abatement and loss of use of the Equipment or portions thereof, with coverage equal to the maximum total rental payments payable by Lessee under the above-referenced Lease Agreement for any consecutive twenty-four (24) month period. Such insurance shall name the Additional Insured and its successors and assigns as an additional insured.
The required insurance should also be endorsed to give the Additional Insured at least 30 days prior written notice of the effective date of any material alteration or cancellation of coverage, and an endorsement confirming that the interest of the Additional Insured shall not be invalidated by any actions, inactions, breach of warranty or conditions or negligence of Lessee. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
Proof of insurance coverage will be provided to the Additional Insured prior to and/or commensurate with the later of the Commencement Date of the Lease Agreement or the delivery and acceptance of the Equipment.
Very truly yours,
CITY OF COMMERCE, as Lessee
By:
Name: Edgar P. Cisneros
Title: City Manager
EXHIBIT E
ESSENTIAL USE CERTIFICATE
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
[________ __, ____]
Re: Equipment Lease Purchase Agreement dated [____________]
1. What is the specific use of the Equipment?
2. What increased capabilities will the Equipment provide?
3. Why is the Equipment essential to your ability to deliver governmental services?
4. Does the Equipment replace existing equipment?
(If so, please explain why you are replacing the existing equipment)
5. Why did you choose this specific Equipment?
6. For how many years do you expect to utilize the Equipment? Very truly yours,
City of Commerce, as Lessee
By:
Name: Edgar P. Cisneros
Title: City Manager
EXHIBIT F
INCUMBENCY AND CLOSING CERTIFICATE
I, Lena Shumway, do hereby certify that I am the City Clerk of the City of Commerce (“Lessee”), which is a California municipal corporation duly established and validly existing under the laws of the State of California.
I hereby certify that, as of the date hereof, the individual named below is the duly elected or appointed officer of the Lessee holding the office set forth opposite their respective name. I further certify that:
(i) The signature set opposite such officer’s name and title is such officer’s true and authentic signature, and (ii) Such officer has the authority on behalf of Lessee to:
a. Enter into that certain Equipment Lease Purchase Agreement dated [____________] (the “Lease Agreement”), between Lessee and Alliance Funding Solutions, Inc., as lessor, and that certain Escrow Agreement dated as of [____________] (the “Escrow Agreement”) by and among Lessee, Alliance Funding Solutions, Inc., and [____________], as escrow agent; and b. Execute certificate, documents, and agreements relating to the Lease Agreement and Escrow Agreement on behalf of Lessee.
Name
Title
Signature
Edgar P. Cisneros
City Manager
(iii) The meeting of the City Council of the City of Commerce at which the Lease Agreement and the Escrow Agreement were approved and authorized to be executed was duly called, regularly convened and attended throughout by the requisite majority of the members thereof or by other appropriate official approval, and the action approving the Lease Agreement and the Escrow Agreement and authorizing the execution thereof has not been altered or rescinded. Attached hereto is a true and correct copy of the resolution or other documents constituting such official action, together with notice of public hearing. (iv) Since June 30, 2022 (date of Lessee’s last audited financial statements), Lessee has not entered into any direct or contingent bond debt, lease, installment purchase or loan obligation, other than those listed below: None (v) The correct billing address for Rental Payments is as follows:
[___________]
[___________]
[___________]
Attention: ________________
IN WITNESS WHEREOF, I have duly executed this Certificate on behalf of the Lessee. [______ __, ____]
Name: Lena Shumway
Title: City Clerk
EXHIBIT G
[Print on Counsel Letterhead]
[Under review by City Attorney]
OPINION OF LESSEE’S COUNSEL
[________ __, ____]
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
Re: Equipment Lease Purchase Agreement dated as of [__________, 2023], between the City of Commerce, as lessee, and Alliance Funding Solutions, Inc., as lessor Ladies and Gentlemen:
As counsel to the City of Commerce (the “Lessee”), I have examined that certain Equipment Lease Purchase Agreement dated as of [____________] (the “Lease Agreement”), between the Lessee and Alliance Funding Solutions, Inc., as lessor (“Lessor”), the Escrow Agreement dated as of ________ __, 20__, together with the form of Certificate of Acceptance and Payment Request (collectively, the “Escrow Agreement”), the Installation Agreement dated ___________ __, 20__ (the “Installation Agreement”), between the Lessee and Alliance Building Solutions, Inc., the proceedings taken by the Governing Body of the Lessee to authorize on behalf of the Lessee the execution and delivery of the Lease Agreement, the Escrow Agreement and the Installation Agreement, and such other documents and matters of law as I have deemed necessary in connection with the following opinions. The Lease Agreement, the Escrow Agreement and the Installation Agreement are herein collectively referred to as the “Transaction Documents.” Based upon the foregoing examination and upon an examination of such other documents and matters of law as we have deemed necessary or appropriate, I am of the opinion that:
1. The Lessee is a California municipal corporation and operates under the laws of the State of California with full power and authority to purchase the Equipment and to enter into the Transaction Documents and perform its obligations thereunder.
2. The Transaction Documents have each been duly authorized, executed, and delivered by the Lessee. Assuming due authorization, execution and delivery thereof by Lessor, the Transaction Documents constitute legal, valid, and binding obligations of the Lessee, enforceable against the Lessee in accordance with their respective terms, subject to any applicable bankruptcy, insolvency, moratorium or other laws or equitable principles affecting the enforcement of creditors’ rights generally.
3. The Lessee has complied with any applicable public bidding requirements and other applicable State of California and federal laws, including [Note to Counsel: reference applicable California energy savings statute], in connection with the Transaction Documents and the transactions contemplated thereby. By proper action, the Governing Body of the Lessee authorized the execution and delivery of the Transaction Documents and certain other matters, which actions were duly taken at a meeting that was held in compliance with all applicable laws relating to the holding of open and public meetings.
4. No litigation or proceeding is pending or, to the best of my knowledge, threatened to restrain or enjoin the execution, delivery, or performance by the Lessee of the Transaction Documents or in any way to contest the validity of the Transaction Documents, to contest or question the creation or existence of the Lessee or the Governing Body of the Lessee or the authority or ability of the Lessee to execute or deliver the Transaction Documents or to comply with or perform its obligations thereunder, or the security interest of Lessor or its assigns, as the case may be, in the Equipment.. There is no litigation pending or, to the best of my knowledge, threatened seeking to restrain or enjoin the Lessee from annually appropriating sufficient funds to pay the Rental Payments or other amounts contemplated by the Lease Agreement or which would cause a Loss of Use or Occupancy, which would affect Lessee’s obligations to make payments under the Lease Agreement.
5. The entering into and performance of the Transaction Documents do not and will not violate any judgment, order, law, or regulation applicable to the 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 upon any assets of the Lessee or on the Equipment (as such term is defined in the Lease Agreement) pursuant to any indenture, mortgage, deed of trust, bank loan or credit agreement, or other instrument to which the Lessee is a party or by which it or its assets may be bound. Notwithstanding the foregoing, upon the due and timely filing of a UCC-1, the Lessor will have a perfected security interest in the Equipment.
6. The authorization, execution, delivery and performance of the Transaction Documents by the Lessee do not require submission to, approval of, or other action by any governmental authority or agency which action has not been taken and is final and non-appealable.
Capitalized terms used herein shall have the same meanings set forth in the Lease Agreement. This opinion may be relied upon by Lessor and purchasers and assignees of Lessor’s interests in the Lease Agreement.
Respectfully submitted,
EXHIBIT H
Tax Opinion – Form to be provided by Tax Counsel
[AFS or Capital One to provide draft for review.]
EXHIBIT I -1
FORM OF REPRESENTATION LETTER
I, __________________, of ____________ (the “Assignee”) do hereby certify for and on behalf of the Assignee as follows with respect to that certain $____________ Equipment Lease Purchase Agreement, dated as of ____________, 2023 (the “Agreement”) between Alliance Funding Solutions, Inc., as Lessor, and the City of Commerce, California, as Lessee:
1. The Assignee is a Qualified Institutional Buyer as defined in Rule 144A promulgated under the Securities Act of 1933, as amended or an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended. The Assignee has such knowledge and experience in financial and business matters in general, and in transactions such as the financial arrangements contemplated by the Agreement in particular, that it is capable of evaluating and has evaluated the merits and risks of entering into the financial arrangements contemplated by the Agreement and the Assignee understands the risks of its purchase of the Agreement.
2. The Assignee has conducted its own investigation of the financial condition of the Lessee, the purpose for which the Agreement is being entered into and of the security for payment of the Rental Payments due under the Agreement, and has obtained such information regarding the Agreement and the Lessee and its operations, financial condition and financial prospects as the Assignee deems necessary to make an informed lending decision with respect to its acquisition of the Agreement. The Assignee acknowledges that no official statement, offering memorandum or other disclosure document is being provided by the Lessee or Lessor in connection with the Agreement.
3. The Assignee is acquiring the Agreement for its own account and without a present intention to sell any portion thereof to any other person, provided that the Assignee retains the right at any time to dispose of the Agreement or any interest therein as it may determine to be in its best interests, provided further that any subsequent resale shall be made only in accordance with the restrictions on transferability and resale set forth in Section 16.2 of the terms of the Agreement.
4. The Assignee acknowledges and agrees that the obligation of the Lessee to pay Rental Payments in each Fiscal Year under the Agreement shall constitute a current expense of the Lessee for such Fiscal Year, subject to abatement, and shall not in any way be construed to be a debt of the Lessee in contravention of any applicable constitutional or statutory limitations or requirements concerning the creation of indebtedness by the Lessee, nor shall anything contained in the Agreement constitute a pledge of the full faith and credit or taxing power of the Lessee.
Dated this _______ day of __________, 20__.
[Assignee]
By:
Name:
Title:
EXHIBIT I -2
FORM OF REPRESENTATION LETTER
(Capital One Public Funding LLC)
[For use if COPF is Assignee of the Lease]
I, Catherine DeLuca, Vice President of Capital One Public Funding, LLC, Melville, New York (“COPF”), do hereby certify as follows with regard to the Equipment Lease Purchase Agreement in the principal amount of $__________ (the “Loan Obligation”), entered into between COPF, as assignee of Alliance Funding Solutions, Inc., as lessor, and the City of Commerce, California, as lessee (the “Borrower”)
1. COPF has full power and authority to carry on its business as now conducted, deliver this Certificate and make the representations and certifications contained herein.
2. COPF is a lender that regularly extends credit to state and local governments by making loans and repayment obligations which are evidenced by obligations such as the Loan Obligation; has knowledge and experience in financial and business matters that make it capable of evaluating the Borrower, the Loan Obligation and the risks associated with the extension of credit evidenced by the Loan Obligation; has the ability to bear the economic risk of extending the credit evidenced by the Loan Obligation; and is a limited liability company engaged in the primary business of extending credit and making loans to state and local governments and non-profit entities and has total assets in excess of $1 billion. COPF is not acting as a broker, dealer, municipal securities underwriter, municipal advisor or fiduciary in connection with its extension of credit evidenced by the Loan Obligation.
3. COPF has conducted its own investigation of the financial condition of the Borrower, the purpose for which the Loan Obligation is being executed and delivered and of the security for the payment of the principal of and interest on the Loan Obligation, and has obtained such information regarding the Loan Obligation and the Borrower and its operations, financial condition and financial prospects as COPF deems necessary to make an informed lending decision with respect to its extension of credit evidenced by the Loan Obligation.
4. COPF is extending credit to the Borrower evidenced by the Loan Obligation as a vehicle for making a commercial loan for its own loan account and without any present intention of distributing or selling any interest therein or portion thereof, provided that COPF retains the right at any time to dispose of the Loan Obligation or any interest therein or portion thereof, but agrees that any such sale, transfer or distribution by COPF shall be made in accordance with applicable law and the provisions of the Loan Obligation and related documents to (a) an affiliate of COPF or (b) one or more banks, insurance companies, trusts, custodians or other financial institutions.
5. COPF acknowledges that the Loan Obligation (a) has not been registered under the Securities Act of 1933, as amended, and has not been registered or otherwise qualified for sale under the securities laws of any state, (b) will not be listed on any securities exchange and (c) there is no established market for the Loan Obligation and that none is likely to develop. COPF understands and acknowledges that (i) its extension of credit evidenced by the Loan Obligation is not intended to be subject to the requirements of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended and (ii) in connection with its extension of credit evidenced by the Loan Obligation, the Borrower has not prepared or caused to be prepared, any official statement, private placement memorandum or other offering document.
6. COPF is acting solely for its own loan account and not as a fiduciary for the Borrower or in the capacity of broker, dealer, placement agent, municipal securities underwriter, municipal advisor or fiduciary. It has not provided, and will not provide, financial, legal (including securities law), tax, accounting or other advice to or on behalf of the Borrower (including to any financial advisor or any placement agent engaged by the Borrower) with respect to the structuring or delivery of the Loan Obligation. COPF has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to the Borrower with respect to the transactions relating to the structuring or delivery of the Loan Obligation and the discussions, undertakings and procedures leading thereto. Each of the Borrower, its financial advisor and its placement agent has sought and shall seek and obtain financial, legal (including securities law), tax, accounting and other advice (including as it relates to structure, timing, terms and similar matters and compliance with legal requirements applicable to such parties) with respect to the Loan Obligation from its own financial, legal, tax and other advisors (and not from the undersigned or its affiliates) to the extent that the Borrower, its financial advisor or its placement agent desires, should or needs to obtain such advice. The undersigned expresses no view regarding the legal sufficiency of its representations for purposes of compliance with any legal requirements applicable to any other party, including but not limited to the Borrower’s financial advisor or placement agent, or the correctness of any legal interpretation made by counsel to any other party, including but not limited to counsel to the Borrower’s financial advisor or placement agent, with respect to any such matters. The transactions between the Borrower and COPF are arm’s length, commercial transactions in which COPF is acting and has acted solely as a principal and for its own interest and COPF has not made recommendations to the Borrower with respect to the transactions relating to the Loan Obligation.
DATED this ___ day of ____________, 2023.
CAPITAL ONE PUBLIC FUNDING, LLC
By: _____________________________________
Name: [Catherine DeLuca]
Title: [Vice President]
EXHIBIT J
Post Issuance Tax Compliance Procedures – Form to be provided by Tax Counsel
EXHIBIT K
ESCROW AGREEMENT
LESSOR:
Alliance Funding Solutions, Inc.
12520 High Bluff Drive, Suite 345
San Diego, California 92130
ESCROW AGENT:
[_____________]
[_____________]
[_____________]
LESSEE:
City of Commerce
53990 Enterprise Way
Commerce, CA 92236
THIS ESCROW AGREEMENT (this “Escrow Agreement”) is made as of [_____________], between Alliance Funding Solutions, Inc. (“Lessor”), the City of Commerce (“Lessee”), and [_____________] (the “Escrow Agent”).
Lessor and Lessee have heretofore entered into that certain Equipment Lease Purchase Agreement dated as of [__________, 2023] (including all exhibits thereto, the “Lease Agreement”).
The Lease Agreement contemplates that Lessor will deposit with the Escrow Agent the amount of [$_____________] (the “Deposit Amount”), for deposit into the escrow fund (the “Escrow Fund”), to be held in escrow by the Escrow Agent and applied on the express terms and conditions set forth herein. Such deposit into the Escrow Fund, together with all interest and additions received with respect thereto, is to be applied from time to time to pay the vendor(s) or manufacturer(s) of the Equipment (as defined in the Lease Agreement) its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee) and to pay certain costs of entering into the Lease Agreement. The Escrow Agent shall have no responsibility to review the purpose of any disbursement. Lessee has granted to Lessor a first priority and perfected lien on and security interest in the Escrow Fund and any all proceeds, interest and other earnings thereon and investments therein to the Lessor by virtue of the execution of this Escrow Agreement and the Lease Agreement without the need for any additional filings or financing statements.
The parties desire to set forth the terms on which the escrow is to be created and to establish the rights and responsibilities of the parties hereto.
NOW, THEREFORE, the parties agree as follows:
The Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein.
There is hereby created a special account to be known as the “City of Commerce Escrow Fund” (the “Escrow Fund”) to be held in trust by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof.
To the limited extent required to perfect the first, priority security interest granted by Lessee to Lessor in the cash and negotiable instruments from time to time held in the Escrow Fund, Lessor hereby appoints the Escrow Agent as its security agent, and the Escrow Agent hereby accepts the appointment as security agent, and agrees to hold physical possession of such cash and negotiable instruments on behalf of Lessor.
On the Commencement Date (as defined in the Lease Agreement), Lessor shall deposit with the Escrow Agent the amount of the Deposit Amount to be held by the Escrow Agent on the express terms and conditions set forth herein. The Escrow Agent agrees to accept the deposit of the Deposit Amount by Lessor with the Escrow Agent, and further agrees to hold the amount so deposited together with all interest and other additions received with respect thereto in escrow on the express terms and conditions set forth herein.
The Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified on the books and records of the Escrow Agent as being held in its capacity as Escrow Agent. Deposits held in the Escrow Fund from time to time shall be held or registered in the name of the Escrow Agent (or its nominee). Escrow Agent shall provide monthly statements for the Escrow Fund to the Lessee showing the current account balance and all transactions (withdrawals and deposits) from the month reflected in the statement, and shall provide current deposit information regarding the Escrow Fund to Lessee periodically upon request.
5. Lessee hereby directs the Escrow Agent to invest the cash held in the Escrow Fund from time to time in a non-interest bearing demand deposit account with no fees or costs or, in the event such fund is not at the time available, such other investments as Lessee may specify in writing, to the extent the same are at the time legal for investment of the funds being invested. No investment shall be made that would cause the Lease Agreement to be deemed to be an arbitrage bond within the meaning of Section 148(a) of the Internal Revenue Code of 1986, as amended.
6. Lessor and Lessee hereby authorize the Escrow Agent to take the following actions with respect to the Escrow Fund:
a. From time to time, the Escrow Agent shall pay via wire transfer the vendor or manufacturer of the Equipment payments then due and payable, or reimburse Lessee for amounts that it has paid to the vendor or manufacturer of the Equipment, upon receipt of the following: (a) a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A hereto executed by the Lessee and approved for payment by the Lessor, (b) the vendor(s) or manufacturer(s) invoice(s) specifying the acquisition price of the Equipment described in the requisition request, and (c) any additional documentation required by Lessor. Escrow Agent will rely solely upon a duly executed Certificate of Acceptance and Payment Request in the form attached as Exhibit A hereto executed by the Lessor and Lessee in order to disburse funds within 3 business days of receipt, and Escrow Agent shall make the payments described in such document without further inquiry. Without limiting the foregoing, Lessor shall not be required to approve any such payment unless and until Lessee shall have provided or caused to be provided to Lessor (i) certificates of insurance evidencing coverage in accordance with the Lease Agreement and satisfactory to Lessor; and (ii) payment and performance bonds naming Lessor and its successors and assigns as an additional obligee and issued by a surety company rated “A” or better by AM Best in form and substance satisfactory to Lessor. Further, Lessee agrees with Lessor that no moneys shall be disbursed from the Escrow Fund until Lessee has provided to Lessor evidence of payment of the portion of costs of the Equipment to be paid by Lessee from its own funds pursuant to Article 8 of the Lease Agreement. b. If Lessor provides to the Escrow Agent (with a copy to Lessee) a written certification stating (i) that an Event of Default by Lessee has occurred under the Lease Agreement, (ii) the nature of the Event of Default, and (iii) that Lessor provided notice of the subject breach and the applicable cure period, if any, under the Lease Agreement has expired without the breach having been cured by the Lessee, then the Escrow Agent shall thereupon remit to Lessor the entire balance of the Escrow Fund pursuant to written instructions provided by Lessor to Escrow Agent. c. Upon receipt by the Escrow Agent of a duly executed Certificate of Acceptance and Payment Request identified as the final such request, the moneys remaining in the Escrow Fund following final payment of all vendor and manufacturer invoices and all other amounts coming due under the Installation Agreement shall be paid to Lessor on the next Rental Payment Date to pay all or a portion of the Rental Payments then due and owing, and any remaining amounts shall be applied by the Lessor as prepayment to the remaining principal balance owing under the Lease Agreement in inverse order of Rental Payment Dates pursuant to Section 18.2 of the Lease Agreement, unless Lessor directs that payment of such amount be made in such other manner directed by Lessor that, in the opinion of nationally recognized counsel in the area of tax exempt municipal obligations satisfactory to Lessor, will not adversely affect the exclusion of the interest components of Rental Payments from gross income for federal income tax purposes. If any such amount is used to prepay principal, the Payment Schedule attached to the Lease Agreement will be revised accordingly as specified by Lessor.
7. The Escrow Agent shall have no liability for acting upon any written instruction presented by Lessee and/or Lessor in connection with this Escrow Agreement that the Escrow Agent in good faith believes to be genuine. Furthermore, the Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own gross negligence, willful misconduct, or bad faith. The Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Fund as a result of the investments made pursuant to Section 4.
8. To the extent authorized by law, Lessee hereby agree to indemnify and save the Escrow Agent harmless against any liabilities that it may incur in the exercise and performance of its powers and duties hereunder and that are not due to the Escrow Agent’s gross negligence or willful misconduct. No indemnification will be made under this Section or elsewhere in this Escrow Agreement for damages arising solely out of gross negligence, willful misconduct, or bad faith by the Escrow Agent, its officers, agents, employees, successors or assigns.
9. The Escrow Agent may at any time resign by giving at least 30 days’ prior written notice to Lessee and Lessor, but such resignation shall not take effect until the appointment of the successor Escrow Agent, with such appointment to take place not later than 90 days after Escrow Agent’s resignation If such appointment does not timely occur, Escrow Agent shall be entitled to file a suit in interpleader in Los Angeles, California, and the Lessee agree to indemnify Escrow Agent for all costs (including and not limited to attorneys’ fees) arising out of or relating to such action in interpleader. The substitution of another bank or trust company to act as Escrow Agent under this Escrow Agreement may occur by written agreement of Lessor and Lessee. In addition, the Escrow Agent may be removed at any time, with or without cause, by instrument in writing executed by Lessor and Lessee. Such notice shall set forth the effective date of the removal. In the event of any resignation or removal of the Escrow Agent, a successor Escrow Agent shall be appointed by an instrument in writing executed by Lessor and Lessee. Such successor Escrow Agent shall indicate its acceptance of such appointment by an instrument in writing delivered to Lessor, Lessee and the predecessor Escrow Agent.
Upon the effective date of resignation or removal, the Escrow Agent will transfer the Escrow Fund then held by it to the successor Escrow Agent selected by Lessor and Lessee.
10. This Escrow Agreement shall terminate upon receipt by the Escrow Agent of the written notice from Lessor specified in Section 5(b) or Section 5(c) hereof.
11. All notices hereunder shall be in writing, sent by certified mail, return receipt requested, or by mutually recognized overnight carrier addressed to the other party at its respective address shown on page 1 of this Escrow Agreement or at such other address as such party shall from time to time designate in writing to the other parties; and shall be effective on the date or receipt.
12. This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of the Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor and Lessee.
13. This Escrow Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification, or change of terms hereof shall bind any party unless in writing signed by all parties.
14. The Escrow Agent may employ agents, attorneys and accountants in connection with its duties hereunder and shall not be liable for any action taken or omitted in good faith in accordance with the advice of counsel, accountants, or other skilled persons.
15. This Escrow Agreement shall be governed by and be construed and interpreted in accordance with the internal laws of the State of California.
16. This Escrow Agreement may be executed in several counterparts, each of which so executed will be an original. In addition, the parties agree that the transaction described herein may be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. [Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth.
LESSOR: ALLIANCE FUNDING SOLUTIONS, INC.
By:
Name: Brad Chapman
Title: President
LESSEE: CITY OF COMMERCE
By:
Edgar P. Cisneros
City Manager
ESCROW AGENT ESCROW AGENT: [_____________]
By:
[_____________]
[_____________]
EXHIBIT A TO ESCROW AGREEMENT
CERTIFICATE OF ACCEPTANCE AND PAYMENT REQUEST
The following payment request is directed to [_____________] (the “Escrow Agent”), as escrow agent under that certain Escrow Agreement dated [_____________] (the “Escrow Agreement”), between the City of Commerce (“Lessee”), Alliance Funding Solutions, Inc. (together with its successors and assigns, “Lessor”), and the Escrow Agent.
The Escrow Agent is hereby requested to pay from the Escrow Fund established and maintained under the Escrow Agreement the amount set forth below to the named payee(s). The amount shown is due and payable under a purchase order or contract (or has been paid by and not previously reimbursed to Lessee). The equipment described below is part or all of the Equipment leased pursuant to that certain Equipment Lease Purchase Agreement and Equipment Schedule both dated [_____________] (the “Lease Agreement”), between Lessor and Lessee:
QUANTITY
DESCRIPTION OF UNITS OF EQUIPMENT
AMOUNT
PAYEE
Lessee hereby certifies and represents to and agrees with Lessor as follows with respect to the Equipment described above: (i) [except for the amounts due and owing to Lessor pursuant to Lessor’s mobilization, engineering, predevelopment, bonding and insurance invoice,] the amount to be disbursed is not being paid in advance of the time, if any, fixed for any payment, and does not include any retained percentage entitled to be retained by Lessee at this time; (ii) no amount requested to be disbursed was included in any payment request previously filed with the Escrow Agent for which payment was actually made by the Escrow Agent; (iii) Lessee has made such investigation of such sources of information as are deemed necessary and is of the opinion that the applicable portion of the Equipment and related work has been fully paid for, and no claim or claims exist against the Lessee or the Vendor out of which a lien based on furnishing labor or material exists or might arise; (iv) acquisition and installation of the applicable portion of the Equipment for which payment is being requested has been completed in accordance with plans and specifications approved by the Lessee and in accordance with the terms and conditions of the Installation Agreement dated [_________________] (the “Installation Agreement”), between Lessee and Alliance Building Solutions, Inc., and said applicable portion of the Equipment is suitable and sufficient for the expected uses thereof, however, this statement is made without prejudice to any rights against third parties which exist at the date hereof or which may subsequently come into being; (v) the amount remaining in the Escrow Fund will, after payment of the amount requested, be sufficient to pay the remaining costs of the Equipment; (vi) a present need exists for the Equipment, which need is not temporary or expected to diminish in the near future; (vii) the Equipment is essential to and will be used by Lessee only for the purpose of performing one or more governmental functions of Lessee consistent with the permissible scope of Lessee’s authority; (viii) the estimated useful life of the Equipment based upon the manufacturer’s representations and Lessee’s projected needs is not less than the term of the Lease Agreement; (ix) Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes as of the date of this Certificate; (x) the Equipment is covered by insurance in the types and amounts required by the Lease Agreement; (xi) no Event of Default, as such term is defined in the Lease Agreement, and no event that with the giving of notice or lapse of time or both, would become an Event of Default, has occurred and is continuing on the date hereof; and (xii) sufficient funds have been appropriated by Lessee for the payment of all rental payments due under the Lease Agreement during Lessee’s current Fiscal Year.
Based on the foregoing, the Escrow Agent is hereby authorized and directed to fund the acquisition of the Equipment set forth above by paying, or causing to be paid, the manufacturer(s)/vendor(s) the amounts set forth on the attached invoices from the Escrow Fund held under the Escrow Agreement in accordance with its terms.
The following documents are attached hereto and made a part hereof: (a) Original Invoice(s) and (b) lien waivers, if applicable.
IF REQUEST IS FOR REIMBURSEMENT, CHECK HERE . Lessee paid an invoice prior to the Commencement Date identified in the Lease Agreement and is requesting reimbursement for such payment. A copy of evidence of such payment together with a copy of Lessee’s declaration of official intent and other evidence required by Lessor prior to Lessor’s approval hereof that Lessee has satisfied the requirements for reimbursement set forth in Treas. Reg. 1.1502 is hereby attached. Lessor’s approval hereof shall evidence that Lessee has delivered to Lessor such required documentation. [Remainder of page intentionally left blank]
IF REQUEST IS FINAL REQUEST, CHECK HERE . Lessee hereby certifies that (a) all of the Equipment described in the Lease Agreement has been received in good condition and has been installed in accordance with the Installation Agreement, (b) as between Lessor and Lessee, such Equipment is accepted “AS-IS, WHERE-IS”; (c) Lessee has inspected the Equipment, and determined that it is in good working order and complies with all purchase orders, contracts and specifications; (d) Lessee has fully and satisfactorily performed all covenants and conditions to be performed by it as of this date under the Lease Agreement with regard to such Equipment; (e) Lessee waives any right to revoke its acceptance; and (f) the Equipment is fully insured in accordance with the Lease Agreement. This certificate is made without prejudice to any rights against third parties which may exist as of the date hereof or which may subsequently come into being.
Date: ______________
Approved for Payment:
[_____________], as Lessor
CITY OF COMMERCE, as Lessee
By:
By:
Name:
Name:
Title:
Title:
SCHEDULE A TO ESCROW AGREEMENT:
NOTICE AND ACKNOWLEDGEMENT OF
ASSIGNMENT OF ESCROW AGREEMENT
Alliance Funding Solutions, Inc. (“Lessor”), City of Commerce (“Lessee”), and [_____________] (“Escrow Agent”) have entered into an Escrow Agreement dated [_____________] (the “Escrow Agreement”), pursuant to which Lessor, or its Assignee (as defined below), has deposited cash into the Escrow Fund established thereunder, which funds are to be used by Lessee to acquire certain Equipment.
Escrow Agent is hereby notified that Lessor has assigned all of its right, title, and interest in and to the Escrow Agreement to [_____________] (“Assignee”), including, in particular, but without limitation, Lessor’s security interest in the Escrow Fund and Lessor’s right to approve all payment requests submitted by Lessee.
Any and all correspondence and notices to be delivered by Escrow Agent to Assignee should be provided to Assignee as set for the below:
[ASSIGNEE INFO]
[__________________]
[__________________]
[__________________]
Email: _______________________
Date: [_____________]
LESSOR: ALLIANCE FUNDING SOLUTIONS, INC.
By:
Name: Brad Chapman
Title: President
LESSEE: CITY OF COMMERCE
By:
Edgar P. Cisneros
City Manager
Acknowledged:
ESCROW AGENT: [_____________]
By:
[_____________]
[_____________]
EXHIBIT L
Resolution and affidavit of publication for notice of public hearing– TO BE PROVIDED BY LESSEE
EXHIBIT M
IRS FORM 8038-G
[To be prepared and filed by Tax Counsel--Please provide draft for review.]
EXHIBIT N
CLOSING MEMORANDUM/PAYMENT PROCEEDS DIRECTION
$[_____________].00] Lease For [_____________]
Pursuant To That [_____________] Equipment Lease Purchase Agreement And Equipment Schedule Thereto Both Dated [_____________] Between City of Commerce, As Lessee, And
Alliance Funding Solutions, Inc., As Lessor
Pre-Closing: Pre-Closing will be held at the Lessee’s convenience, on or before [_____________]. All documents will be executed and two originals will be overnighted to Alliance Funding Solutions, Inc., Attn.: Brad Chapman12520 High Bluff Drive, Suite 345, San Diego, California 92130, for delivery no later than 9:00 am on the morning of [_____________] and held in trust until such time as the wires and original documents are released by the Parties.
Closing: (1) By wire transfer, on the morning of [_____________], the Lessor shall wire or cause to be wired the Total Lease Proceeds in the amount of $_______________ to the Escrow Agent, as follows:
Bank Name: [_____________]
ABA No: [_____________]
Account No [_____________]
Account Name: [_____________]
(2) After receipt of the wire from Lessor referenced above, on ____________ __, 2022, the Escrow Agent is authorized by Lessee to transfer via wire the Issuance Costs in the amount of $_______ to Lessor as follows:
Bank Name: [___________________]
ABA Number: [________]
Account Number: [________]
Account Name: [Alliance Funding Solutions, Inc.]
Alliance Funding Solutions, Inc. will confirm disbursement of funds to the Lessee’s escrow account and then release all of the original documents held in trust to its assignee and forward a copy to the Lessee.
Sources and Uses of Funds:
Principal Amount of Lease [_____________]
TOTAL SOURCES [_____________]
Total Equipment Cost: [_____________]
Issuance Costs: $25,000.00
TOTAL LEASE PROCEEDS [_____________]
Attest:
CITY OF COMMERCE
By: ____________________________
Name: Edgar P. Cisneros
Title: City Manager
4860-1398-9765v4/022053-0009
Exhibit E-1
4860-1398-9765v4/022053-0009
Exhibit F-1
4860-1398-9765v4/022053-0009
Exhibit G-1
4860-1398-9765v4/022053-0009
Exhibit H-1
4860-1398-9765v4/022053-0009
Exhibit I-1-1
4860-1398-9765v4/022053-0009
Exhibit I-2-1
4860-1398-9765v4/022053-0009
Exhibit J-1
4860-1398-9765v4/022053-0009
Exhibit K-1
4860-1398-9765v4/022053-0009
Certificate Of Acceptance And Payment Request 1
4860-1398-9765v4/022053-0009
Schedule A To Escrow Agreement
4860-1398-9765v4/022053-0009
-1-
4860-1398-9765v4/022053-0009
Exhibit L-1
4860-1398-9765v4/022053-0009
Exhibit M-1
4860-1398-9765v4/022053-0009
Exhibit N-1
4860-1398-9765v4/022053-0009
-1-
4860-1398-9765v4/022053-0009
2 4860-1398-9765v4/022053-0009
4860-1398-9765v4/022053-0009
Exhibit A-1
4860-1398-9765v4/022053-0009
Exhibit B-1
4860-1398-9765v4/022053-0009
Exhibit C-1
4860-1398-9765v4/022053-0009
Exhibit D-1-1
4860-1398-9765v4/022053-0009
NTD – to be revised depending on deal if authorization achieved through different method (i.e. council meeting).
Stradling Comments (10/26/23)
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