22 prior written notice, and upon payment in full of the sum of all Rental Payments then due plus the then applicable Prepayment Price, which shall include a prepayment premium on the unpaid Outstanding Balance as set forth in the Payment Schedule plus all other amounts then owing hereunder; or
(ii) Casualty or Condemnation Prepayment. In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment, on the day specified in Lessee’s notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the next Rental Payment Da te or sixty (60) days after the casualty event) upon payment in full to Lessor of (A) in the event such prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then due plus (ii) the then applicable Casualty Value plus (iii) all other amounts then owing hereunder OR, (B) in the event such prepayment occurs on a date other than a Rental Payment Date, the sum of (i) the applicable Casualty Value shown on the Payment Schedule for the Rental Payment Date immediately preceding the applicable date of such prepayment (or if the date of such prepayment occurs prior to the first Rental Payment Date, the earliest Casualty Value shown on the Payment Schedule) plus (ii) accrued interest at the Contract Rate (or the Taxable Rate if then in effect) on the Outstanding Balance as of the Rental Payment Date immediately preceding the applicable date of such prepayment from such Rental Payment Date (or if the date of such prepayment occurs prior to the first Rental Payment Date, the Commencement Date) to the date of such prepayment plus (iii) all other amounts then owing hereunder; or (iii) Extraordinary Prepayment in Part. Prior to August 28, 2028, on any Rental Payment Date following the Lessee’s receipt of the Project Grant, upon not less than thirty (30) days prior written notice, the Lessee may exercise a one -time extraordinary prepayment up to a total amount of $3,600,000 which shall be applied by Lessor to the applicable unpaid Principal Portion of Rental Payments owing hereunder (on a pro rata basis) at a price of 100% of such prepaid Principal Portion plus accrued interest thereon to the prepayment date. In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule and deliver the same to the Lessee, wh ich shall be binding, absent manifest error.
(b) Payment in Full. Lessor’s security interests in and to the Equipment will be terminated and Lessee will own such Equipment free and clear of Lessor’s security interest in such Equipment after either (i) payment of either (A) the applicable Prepayment Price and all other amounts then owing hereunder in accordance with Section 10.01(a)(i) of this Agreement or (B) the applicable Casualty Value and all other amounts then owing hereunder in accordance with Section 10.01(a)(ii) of this Agreement or (ii) upon the expiration of the Scheduled Term and payment in full of all Rental Payments then due and all other amounts then owing hereunder in accordance with this Agreement. Notwithstanding anything herein to the contrary, no portion of Lessor’s security interests in and to the Equipment or other Collateral will be terminated due to any partial prepayment pursuant to Section 10.01(a)(iii) of this Agreement.
23 ARTICLE XI
Section 11.01. Assignment by Lessor . (a) Lessor’s right, title and interest in and to this Agreement, the Rental Payments and any other amounts payable by Lessee hereunder, the Escrow Agreement, its security interest in the Collateral (collectively, the “Assigned Rights”), may be assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or sub-assignees without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of wh om Lessor reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulga ted under the Securities Act of 1933, as amended, and in either case is purchasing the Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Assigned Rights (or interest therein), subject to ea ch investor’s right at any time to dispose of the Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Assigned Rights or the creation of any interest in the Assigned Ri ghts in an aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to make Rental Payments, to send notices or otherwise to deal with respect to matters arising hereunder or under the Escrow Agreement with or to more tha n one Lease Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Assigned Rights are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease Servicer”) to act on their behalf with respect to the Assigne d Rights, including with respect to the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or an Event of Non-appropriation under this Agreement. Lessor and Lessee hereby acknowledge and agree tha t the restrictions and limitations on transfer as provided in this Section 11.01 shall apply to the first and subsequent assignees and sub-assignees of any of the Assigned Rights (or any interest therein). (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 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; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partner ship interests with respect to the Rental Payments payable under this Agreement, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank, trust company or other entity that acts as the Lease Servicer. Notices of a ssignment provided pursuant to this Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 11.01(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 assignee or assignees or Lease Servicer last designated in such regi ster. 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
24 in and to the Equipment and all rights in, to and under this Agreement related to such Equipment, and all of Lessor’s security interest in and to the Collateral, or all rights in, to and under the Escrow Agreement.
(c) If Lessor notifies Lessee of its intent to assign this Agreement, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit H attached hereto within five (5) business days after its receipt of such request.
Section 11.02. Assignment and Subleasing by Lessee . None of Lessee’s right, title, and interest in, to and under this Agreement or any portion of the Equipment, the Escrow Agreement, the Escrow Account or any of the other Collateral may be assigned, encumbered or subleased by Lessee for any reason, and any purported assignment, encumbrance or sublease without Lessor’s prior written consent shall be null and void.
ARTICLE XII
Section 12.01. Events of Default Defined . Any of the following events shall constitute an “Event of Default” under this Agreement:
(a) Failure by Lessee to (i) subject to Section 3.03 and Section 8.02, pay any Rental Payment or other payment required to be paid under this Agreement within ten (10) days after the date when due as specified herein, (ii) maintain insurance as required herein, or (iii) observe and perform any covenant, condition or agreement on its part to be observed or performed under Section 6.01 or 6.02 hereof;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement contained in this Agreement on its part to be observed or performed, other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicabl e period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Lessor or any affiliate of Lessor, or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $100,000.00; provided, that agreements and obligations referenced in
25 the preceding sentence do no t include bonds issued by Lessee solely as a conduit issuer and special tax or assessment bonds and other similar obligations for which Lessee is never ultimately responsible to pay from its own funds;
(e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, liquidation, readjustment, reorganization, moratorium or insolvency proceeding; or (f) An order, judgment or decre e shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days.
Section 12.02. Remedies on Default . Whenever any Event of Default exists, Lessor shall have the right, at its sole option w ithout any further demand or notice, to take one or any combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee and other amounts payable by Lessee hereunder to the end of the then current Original Term or Renewal Term to be immediately due and payable; (b) With or without terminating the Lease Term, Lessor may enter the premises where the Equipment is located and retake possession of such Equipment or require Lessee at Lessee’s expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hol d Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee and other amounts hereunder that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies hereunder, including without limitation all expenses of taking possession, storing, reconditioning and selling or l easing such Equipment and all brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of Section 3.03 of this Agreement. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities hereunder or with respect to the Equipment;
(c) Lessor may terminate the Escrow Agreement and apply any proceeds in the Escrow Account to the Rental Payments scheduled to be paid hereunder; and/or
26 (d) Lessor may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under this Agreement or the Escrow Agreement or as a secured party in any or all of the Equipment or the Escrow Account.
Section 12.03. No Remedy Exclusive . No remedy herein conferre d upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article XII it shall not be necessary to give any notice other than such notice as may be required in this Article XII.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this Agreement shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.
Section 13.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.03. Severability. In the event any provision of this Agree ment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.
Section 13.04. Amendments, Changes and Modifications . This Agreement may only be amended by Lessor and Lessee in writing.
Section 13.05. Execution in Counterparts. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument; provided, that only Counterpart No. 1 of this Agreement shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.
Section 13.06. Applicable Law; Venue; Waiver of Jury Trial . This Agreement shall be governed by and construed in accordance with the laws of the State. The parties hereto consent and submit to the jurisdiction of the State and venue in any state court in Solano County or Federal court in Sacramento County for the purposes of any suit, action or other proceeding arising in connection with this Agreement, and each party expressly waives any objections that it may have to the venue of such courts. The parties hereto expressly waive any right to trial by jury in a ny action brought on or with respect to this Agreement. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby
27 directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.
Section 13.07. Captions. The captions or headings in this Agree ment are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.
Section 13.08. No Advisory or Fiduciary Relationship . In connection with all aspects of each transaction contemplated by this Agreement (including in connection with any amendment, waiver or other modification hereof or of any other related document), the Lessee acknowledges and agrees that: (a) (i) the transactions regarding this Agreement provided by the Lessor and any affiliate thereof are arm’s -length commercial transactions between the Lessee, on the one hand, and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and by the other related documents; (b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated by this Agreement except those obligations expressly set forth herein and in the other related documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent permitted by law, the Lessee, hereby waives and releases any claims that it may have against the Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated by this Agreement.
Section 13.09. Entire Agreement. The parties agree that this Agreement constitutes the final and entire agreement between the parties superseding all conflicting terms or provisions of any prior proposals, term sheets, solicitation documents, requests for proposals, award notices, approval letters or any other agreements or understandings between the parties.
Section 13.10. Electronic Signatures . The Related Documents may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of the Related Documents and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes. Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [Signature Page Follows]
[Signature Page to Equipment Lease/Purchase Agreement]
IN WITNESS WHEREOF, Lessor and Lessee have caused this Equipment Lease/Purchase Agreement to be executed in their names by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF FAIRFIELD
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
Fairfield City Hall
1000 Webster Street
Fairfield, CA 94533
Attention: Director of Finance
Telephone: ________________
Fax No.: ________________
Email: [email protected]
By: ________________________________
Name: __________________________
Title: ___________________________
By: ________________________________
Name: __________________________
Title: ___________________________
Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that this Agreement constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security interest or ownership herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
LIST OF EXHIBITS
EXHIBIT A — Form of Equipment Schedule
EXHIBIT B — Form of Payment Schedule
EXHIBIT C-1 — Form of Authorizing Resolution
EXHIBIT C-2 — Form of Incumbency and Authorization Certificate EXHIBIT D-1 — Form of Opinion of General Counsel to Lessee EXHIBIT D-2 — Form of Opinion of Special Counsel to Lessee EXHIBIT E — Form of Final Acceptance Certificate
EXHIBIT F — Reserved
EXHIBIT G — Reserved
EXHIBIT H — Form of Notice and Acknowledgement of Assignment EXHIBIT I — Form of Escrow and Account Control Agreement
EXHIBIT A
EQUIPMENT SCHEDULE
Location of Equipment:
Equipment Description (Scope of Work):
[City will allocate equity to:
Community Center
Willow Hall
Downtown Theater
Adult Rec Center
City Parks
Cordelia Library
Rancho Solano Club
Paradise Valley Club
Transportation Center]
The Equipment/Collateral will consist of:
Civic Center Complex Central Utility Plant (CUP)
City Hall
Council Chambers
Corp Yard Admin
AW Aquatics
AW Sports Center
Police Training Facility
Police Department
Fire Departments
EXHIBIT B
PAYMENT SCHEDULE
RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PREPAYMENT
PRICE
(including
prepayment
premium, if
any)
CASUALTY
VALUE
(including
casualty
premium, if any)
8/29/25 $21,309,756.00 NA $21,735,951.12
8/29/26 $ 995,506.99 $ 854,947.41 $ 140,559.58 21,169,196.42 NA 21,592,580.35 2/28/27 995,506.99 424,654.08 570,852.91 20,598,343.51 NA 21,010,310.38 8/29/27 995,506.99 413,202.77 582,304.22 20,016,039.29 NA 20,416,360.08 2/29/28 995,506.99 401,521.75 593,985.24 19,422,054.05 NA 19,810,495.13 8/29/28 995,506.99 389,606.40 605,900.59 18,816,153.46 NA 19,192,476.53 2/28/29 995,506.99 377,452.04 618,054.95 18,198,098.51 18,562,060.48 18,562,060.48 8/29/29 995,506.99 365,053.86 630,453.13 17,567,645.38 17,918,998.29 17,918,998.29 2/28/30 995,506.99 352,406.97 643,100.02 16,924,545.36 17,263,036.27 17,263,036.27 8/29/30 995,506.99 339,506.38 656,000.61 16,268,544.75 16,593,915.65 16,593,915.65 2/28/31 995,506.99 326,347.01 669,159.98 15,599,384.77 15,911,372.47 15,911,372.47 8/29/31 995,506.99 312,923.66 682,583.33 14,916,801.44 15,215,137.47 15,215,137.47 2/29/32 995,506.99 299,231.04 696,275.95 14,220,525.49 14,504,936.00 14,504,936.00 8/29/32 995,506.99 285,263.74 710,243.25 13,510,282.24 13,780,487.88 13,780,487.88 2/28/33 995,506.99 271,016.26 724,490.73 12,785,791.51 12,913,649.43 12,913,649.43 8/29/33 995,506.99 256,482.98 739,024.01 12,046,767.50 12,167,235.18 12,167,235.18 2/28/34 995,506.99 241,658.16 753,848.83 11,292,918.67 11,405,847.86 11,405,847.86 8/29/34 995,506.99 226,535.95 768,971.04 10,523,947.63 10,629,187.11 10,629,187.11 2/28/35 995,506.99 211,110.39 784,396.60 9,739,551.03 9,836,946.54 9,836,946.54 8/29/35 995,506.99 195,375.39 800,131.60 8,939,419.43 9,028,813.62 9,028,813.62 2/29/36 995,506.99 179,324.75 816,182.24 8,123,237.19 8,204,469.56 8,204,469.56 8/29/36 995,506.99 162,952.14 832,554.85 7,290,682.34 7,363,589.16 7,363,589.16 2/28/37 995,506.99 146,251.09 849,255.90 6,441,426.44 6,505,840.70 6,505,840.70 8/29/37 995,506.99 129,215.01 866,291.98 5,575,134.46 5,630,885.80 5,630,885.80 2/28/38 995,506.99 111,837.20 883,669.79 4,691,464.67 4,738,379.32 4,738,379.32 8/29/38 995,506.99 94,110.78 901,396.21 3,790,068.46 3,827,969.14 3,827,969.14 2/28/39 995,506.99 76,028.77 919,478.22 2,870,590.24 2,899,296.14 2,899,296.14 8/29/39 995,506.99 57,584.04 937,922.95 1,932,667.29 1,951,993.96 1,951,993.96 2/29/40 995,506.99 38,769.31 956,737.68 975,929.61 985,688.91 985,688.91 8/29/40 995,506.76 19,577.15 975,929.61 0.00 0.00 0.00 TOTAL $28,869,702.48 $7,559,946.48 $21,309,756.00
Contract Rate. The Contract Rate is 4.012%% per annum.
B-2
Prepayment Option Commencement Date. For purposes of Section 10.01 of the Agreement, the Prepayment Option Commencement Date is February 28, 2029.
[Signature Page to Payment Schedule]
LESSOR: LESSEE:
BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF FAIRFIELD
By: ________________________________
Name: __________________________
Title: ___________________________
By: ________________________________
Name: __________________________
Title: ___________________________
EXHIBIT C-1
FORM OF AUTHORIZING RESOLUTION
See Item #3(a) in Transcript.
EXHIBIT C-2
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Fairfield (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dat ed as of August 29, 2025 by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of August 29, 2025 by and among Lessor, Lessee and UMB Bank, National Association , as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreem ents of Lessee, enforceable in all respects in accordance with their respective terms.
NAME OF OFFICIAL TITLE SIGNATURE
David Gassaway City Manager _____________________
John Furtado Finance Director _____________________
_____________________ _____________________ _____________________ Dated: August 29, 2025 By: ____________________________________ Name: ______________________________
Title: _______________________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)
EXHIBIT D-1
FORM OF OPINION OF GENERAL COUNSEL TO LESSEE
(TO BE TYPED ON LETTERHEAD OF CITY ATTORNEY)
[Closing Date]
City of Fairfield
1000 Webster Street
Fairfield, CA 94533
Banc of America Public Capital Corp
11333 McCormick Road
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Jones Hall LLP
4 West 4th Avenue, Suite 406
San Mateo, CA 94402
Re: Equipment Lease/Purchase Agreement,
dated as of August 29, 2025, by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Fairfield, as Lessee
Ladies and Gentlemen:
As City Attorney to the City of Fairfield ( “Lessee”), I have examined (a) an executed counterpart of that certain Equipment Lease/Purchase Agreement, dated as of August 29, 2025, and Exhibits thereto by and between Banc of America Public Capital Corp (“Lessor”) and Lessee (the “Agreement”), which, among other things, provides for the lease of certain property (the “Equipment”) and a certain Escrow and Account Control Agreement dated as of August 29, 2025 by and among Lessor, Lessee, and UMB Bank, National Association as Escrow Agent (the “Escrow Agreement”), (b) an executed counterpart of the ordinances or resolutions of Lessee with respect to authorization of the transaction contemplated by the Agreement, the Escrow Agreement and documents related thereto, and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Agreement, the Escrow Agreement, and the documents relating thereto are herein collectively referred to as the “Transaction Documents”.
Based on the foregoing, I am of the following opinions:
C-1-2
1. Lessee is a general law city, duly organized and existing under the laws of the State, and is a political subdivision of the State within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”) and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.
2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Transaction Documents.
3. The Transaction Documents have been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except to the extent limited by state and federal law af fecting creditor’s remedies and by bankruptcy, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights.
4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws.
5. There is no proce eding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment, the Escrow Account or other Collateral thereunder.
All capitalized terms herein shall have the same meanings as in the Transaction Documents unless otherwise provided herein. Lessor and its successors and assigns are entitled to rely on this opinion.
Sincerely,
EXHIBIT D-2
FORM OF OPINION OF SPECIAL COUNSEL TO LESSEE
(TO BE TYPED ON LETTERHEAD OF SPECIAL COUNSEL)
City Council
City of Fairfield
1000 Webster Street
Fairfield, CA 94533
Banc of America Public Capital Corp
11333 McCormick Road
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
OPINION: $________ aggregate principal amount of Rental Payment obligations of the City of Fairfield under that certain Equipment Lease/Purchase Agreement, dated as of August 29, 2025, by and between City of Fairfield and Banc of America Public Capital Corp
Ladies and Gentlemen:
We have acted as special counsel to the City of Fairfield (the “City”) in connection with the delivery by the City of the Equipment Lease/Purchase Agreement, dated as of August 29, 2025 (the “Agreement”), by and between the City and Banc of America Public Capital Corp (the “Lessor”). The City is obligated under the Agreement to pay certain rental payments thereunder (the “Rental Payments”) to Lessor. This opinion is being delivered in our capacity as special counsel to the City, and not as counsel to the other addressee.
We have examined the Agreement and such other documents and matters of law as we have deemed necessary in connection with the following opinions.
As to questions of fact material to our opinion, we have relied upon representations of the City contained in the Agreement, and in certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.
Regarding certain questions of law material to our opinion, we have assumed the correctness of certain legal conclusions contained in the written opinions of the city attorney to the City, and others, without undertaking to verify the same by independent investigation.
Based on the foregoing, we are of the opinion, under existing law, as follows:
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1. The portion of the Rental Payments designated as interest and received by Lessor is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. The opinion set forth in the preceding sentence is subject to the condition that the City comply with all requirements of the Tax Code that must be satisfied subsequent to the execution and delivery of the Agreement in order that the interest with respect thereto be, and continue to be, excludable from gross income for federal income tax purposes. The City has made certain representations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of delivery of the Agreement.
2. The portion of the Rental Payments designated as interest and received by Lessor is exempt from personal income taxation imposed by the State of California.
We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Agreement.
The rights of the Lessor under the Agreement and the enforceability of the Agreement are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and by equitable principles, whether considered at law or in equity.
This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the Internal Revenue Service or any court; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions, and any assumptions expressed herein, and in reliance upon the representations, and covenants referenced above. Our engagement with respect to this matter has terminated as of the date hereof.
Respectfully submitted,
EXHIBIT E
FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of August 29, 2025, by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Fairfield, as Lessee
Ladies and Gentlemen:
In accordance with the above -referenced Equipment Lease/Purchase Agreement (the “Agreement”), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows:
1. All of the Equipment has been delivered, installed and unconditionally accepted on the date hereof.
2. 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 and the Equipment has been delivered, installed and is unconditionally accepted for all purposes by Lessee, and title to the Equipment has transferred to Lessee and any security interest of Vendor therein has been released.
3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.
4. Lessee hereby reaffirms that the representations, warranties and covenants contained in the Agreement are true and correct as of the date hereof.
5. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default exists at the date hereof.
6. No Material Adverse Change has occurred since the date of the execution and delivery of the Agreement.
7. No Event of Non-appropriation has occurred or been threatened.
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Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have the same meanings as when such terms are used in the Agreement.
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Date: ____________________
LESSEE:
CITY OF FAIRFIELD
By: ____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT F
RESERVED
EXHIBIT G
RESERVED
EXHIBIT H
FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated ____________________
Banc of America Public Capital Corp (“Assignor”) hereby gives notice that it has assigned and sold to _________________________ (“Assignee”) all of Assignor’s right, title and interest in, to and under the Equipment Lease/Purchase Agreement dated as of August 29, 2025 (the “Agreement”), by and between Assignor and the City of Fairfield ( “Lessee”), together with all exhibits, schedules, addenda and attachments related thereto, and all cer tifications and other documents delivered in connection therewith, the Rental Payments and other amounts due under the Agreement, all of Assignor’s right, title and interest in the Equipment (as defined in the Agreement), and all of Assignor’s right, title and interest in, to and under the Escrow and Account Control Agreement dated as of August 29, 2025 (the “Escrow Agreement”) by and among Lessee, Assignor and UMB Bank, National Association , as Escrow Agent, together with the Escrow Account and other Collateral (collectively, the “Assigned Property”). Each capitalized term used but not defined herein has the meaning set forth in the Agreement.
1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property and absolutely and unconditio nally agrees to deliver to Assignee all Rental Payments and other amounts coming due under the Agreement in accordance with the terms thereof on and after the date of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have all the righ ts of Lessor under the Agreement and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the Equipment in accordance with the terms of the Agreement, to declare a default and to exercise all rights and remedies thereunder in connection with the occurrence of an Event of Non-appropriation or an Event of Default; and (ii) except as provided in Section 3.03 and Section
8.02 of the Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in the Agreement shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Notice and Acknowledgment of Assignment (this “Acknowledgement”), the following information about the Agreement is true, accurate and complete:
Number of Rental Payments Remaining ________________
Amount of Each Rental Payment $_______________
Total Amount of Rental Payments
Remaining $_______________
Frequency of Rental Payments ________________
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Next Rental Payment Due ________________
Funds Remaining in Escrow Account $_______________
4. The Agreement remains in full force and effect, has not been amended, no Event of Default (or event which with the passage of time or the giving of notice or both would constitute an Event of Default) has occurred thereunder and no Event of Non-appropriation has occurred or is threatened with respect thereto.
5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of the Agreement and confirms that the assignment to Assignee has been made in accordance with the provisions of that Section.
6. Any inquiries of Lessee related to the Agreement and any requests for disbursements from the Escrow Account, if applicable, and all Rental Payments and other amounts coming due pursuant to the Agreement on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee):
______________________________
______________________________
______________________________
ACKNOWLEDGED AND AGREED:
LESSEE: CITY OF FAIRFIELD
By: _________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP
By: _________________________________
Name: ___________________________
Title: ____________________________
EXHIBIT I
ESCROW AND ACCOUNT CONTROL AGREEMENT
See Item #4 in Transcript.
1161786842,,,Proposed Escrow and Account Agreement
2329431
ESCROW AND ACCOUNT CONTROL AGREEMENT
This Escrow and Account Control Agreement (this “Agreement”), dated as of August 29, 2025, by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), City of Fairfield, a city existing under the laws of the State of California (hereinafter refe rred to as “Lessee”) and UMB Bank, National Association, a national banking association organized under the laws of the United States of America (hereinafter referred to as “Escrow Agent”).
Reference is made to that certain Equipment Lease/Purchase Agreement dated as of August 29, 2025 between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount ($ 21,309,756.00) be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment (with the final $500,000 of the Acquisition Amount disbursed only after payment of the Lessee’s Contribution in accordance with Section 4.08 of the Lease).
NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable con sideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Creation of Escrow Account. (a) There is hereby created an escrow fund to be known as the “City of Fairfield Escrow Account ” (the “Escrow Account”) to be held 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. (b) Lessee may, from time to time, provide written instructions for Escrow Agent to use any available cash in the Escrow Account to purchase any money market fund or liquid deposit investment vehicle that Escrow Agent from time to time makes available to the parties hereto .
Such written instructions shall be provided via delivery to Escrow Agent of a signed and completed Escrow Account Investment Selection Form (such form available from Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in such short -term investments (as more parti cularly described in Escrow Agent ’s Escrow Account Investment Selection Form) shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement . The Escrow Agent is hereby authorized and directed to sell or redeem any such investments as it deems necessary to make any payments or distributions required under this Agreement. The Lessee acknowledges that neither the Escrow Agent nor the Lessor is providing investment supervision, recommendations, or advice. If any cash is received for the Escrow Account after the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in Chicago, Illinois, Fairfield, California or New York, New York . In the absence of written instructions from Lessee (on Escrow Agent ’s Escrow Account Investment Selection Form) designating a short-term investment of cash in the Escrow Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized. Escrow Agent shall have no obligation
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to pay interest on cash in respect of any period during which it remains uninve sted. Lessee shall be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment . Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or cla im. Interest on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account . The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any a ction with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of California Government Code Sections 53600 et seq. (c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of writt en instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account and the Lessee’s Contribution are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes a Final Acceptance Certificate shall be applied as provided in Section 4 hereof.
(d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease or termination of the Lease due to an Event of Non-appropriation. Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed.
(e) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument . The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authorit y, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith .
Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with
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and rely upon any notices, instructions or other communications believed by it to have been sent or given by the parties or by a person or pers ons authorized by the parties . The Escrow Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, to the extent permitted by law, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys ’ fees) (collectively, “Losses”) incurred or sustained by the Escrow Agent as a result of or in c onnection with the Escrow Agent’s reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, with regards to the execution of the instructions or directions in question, it being understood that forbearance on the part of the Escrow Agent to verify or confirm that the person giving the instructions or directions, is, in fact, an authorized person shall not be deemed to constitute gross negligence or willful misconduct.
In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, t he Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Escrow Agent and its directors, officers, employees and agents and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law indemnify the Escrow Agent against any and all expenses; including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement . The Escrow Agent shall be reimbursed by Lessee for all costs, including reasonable attorneys ’ fees, in connection with such civil action, and shall be full y protected in suspending all or part of its activities under this Agreement until a final judgment in such action is received. (h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct. The Escrow Agent may act through attorneys or agents and shall not be responsible for the acts or omissions of any such attorney or agent appointed with due care.
(i) The compensation fee for Escrow Agent’s services under this Agreement is $0.00.
Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of
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the Escrow Agent ’s attorneys, agents and employees incurred for non -routine administration of the Escrow Account , execution of the directions provided by the Lessee and Lessor and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. The terms of this paragraph shall survive termination of this Agreement and/or the earlier resignation or removal of the Escrow Agent.
(j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account.
(k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties responsibilities or obligations shall be read into this Agreement. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument, or document other than this Agreement, whether or not an original or a copy of such agreement has been provided to the Escrow Agent.
(l) The permissive rights of the Escrow Agent to do things enumerated in this Agreement shall not be construed as a duty and, with respect to such permissive rights, the Escrow Agent shall not be answerable for other than its gross negligence or willful misconduct. (m) Nothing in this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder.
(n) In no event shall the Escrow Agent be responsible or liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of pr ofit) irrespective of whether the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. (o) In the event that any of the funds in the Escrow Account shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the funds in the Escrow Account, the Escrow Agent is hereby expressly authorized to respond as it deems appropriate or to comply with all writs, orders or decrees so entered or issued, or which it is advised by legal counsel of its own choosing is binding upon it, whether with or without jurisdiction. To the extent permitted by law, the Escrow Agent shall inform the Lessor and Lessee in writing about any such attachment, garnishment, levy, court order, judgment or decree within ten (10) business days of its receipt of any such attachment, garnishment, levy, court order,
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judgment or de cree. In the event that the Escrow Agent obeys or complies with any such writ, order or decree, it shall not be liable to any of the other parties to this Agreement or to any other person, firm or corporation, should, by reason of such compliance notwiths tanding, such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.
Section 2. Acquisition and Installation of Equipment.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment as provided in Section 4.08 of the Lease with moneys available in the Escrow Account , provided that the final $500,000 of the Acquisition Amount shall not be disbursed from the Escrow Account un til Lessee has provided written evidence satisfactory to Lessor that Lessee has paid and distributed at least $1,199,631 (or such other amount approved by the Lessor) towards the cost of the Equipment from the Lessee’s Contribution. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts .
Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof . Escrow Agent shall have no duty to inquire as to the performance or nonperformance of any provision of any other agreement, instrument, or document other than this Agreement or monitor or enforce Lessee ’s compliance with the foregoing covenant.
(b) Authorized Escrow Account Disbursements . It is agreed as between Lessee and Lessor that disbur sements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described, other than for any amount paid or to be paid by Lessee from the Lessee’s Contribution) the cost of acquiring the Equipment , provided that the final $500,000 of the Acquisition Amount shall not be disbursed from the Escrow Account until Lessee has provided written evidence satisfactory to Lessor that Lessee has paid and distributed at least $1,199,631 (or such other amount approved by the Lessor) towards the cost of the Equipment from the Lessee’s Contribution.
(c) Requisition Procedure. The final $500,000 of the Acquisition Amount shall not be disbursed from the Escrow Account unless and until Lessee has satisfied its covenant set forth in Section 4.08 of the Lease to pay the Lessee’ s Contribution and Lessor has approved in writing such requisition. Lessee shall provide written evidence satisfactory to Lessor that Lessee has paid and distributed at least $1,199,631 (or such other amount approved by the Lessor) towards the cost of the Equipment from the Lessee’s Contribution before the final $500,000 of the Acquisition Amount may be disbursed from the Escrow Account. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call -back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any
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call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request subm itted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.
Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition executed by Lessee and Lessor is delivered to it:
1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1;
2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale therefor or other evidence of title transfer, and release by Vendor of any security interest, therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor; and
3. The disbursement shall occur during the Acquisition Period.
Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied.
Section 3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account and the Lessee’s Contribution. The Escrow Agent shall not be liable for any amount in excess of the Acquisition Amount.
Section 4. Excess Proceeds in Escrow Account . Upon receipt of written instruction s from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earlier of (a) the expiration of the Acquisition Period or (b) the date on which Lessee executes a Final Acceptance Certificate, or upon a termination of the Escrow Account as provided in this Agreement, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.
Section 5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.
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Section 6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee ’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:
(a) All terms used in this Se ction 6 which are defined in the California Commercial Code (the “Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee.
(c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (i) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (ii) that Escrow Agent has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (iii) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for e ntitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral . Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a Lien, encumbrance or adverse claim against any portion or all of the Collateral.
(e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account . Escrow Agent acknowledges that Lessor reserves the right, by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any
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action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor ’s claims against or agreements with Lessee, the exi stence of any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Unifo rm Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party. (i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.
Section 7. Information Required Under USA PATRIOT ACT. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA PATRIOT ACT) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA PATRIOT ACT, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
Section 8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This Agreement may not be amended except in writing signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original i nstrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.
Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice shall be attached to an email message in PDF format and
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provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient . For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose her eunder or admissible as evidence of receipt.
If a court of competent jurisdiction declares any provision hereof invalid, it will be ineffective only to the extent of such invalidity, so that the remainder of the provision and Agreement will continue in full force and effect.
This Agreement and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersede all prior agreements and understandings, oral or written.
If to Lessor: Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
If to Lessee: City of Fairfield
Fairfield City Hall
1000 Webster Street
Fairfield, CA 94533
Attention: Director of Finance
Telephone: ________________
Fax No.: ________________
Email: [email protected]
If to Escrow Agent: UMB Bank, National Association
3070 Bristol Street, Suite 300
Costa Mesa, CA 92526
Attention: Chris Johnson, Vice President
Telephone: (949) 807-1033
E-mail: [email protected]
Section 9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties he reunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W -8 as described above . The Escrow Agent will comply with any U.S . tax withholding or backup withholding and reporting requirements that are required by law . With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S . tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt
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from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable law.
With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law . The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and Lessee as payee. Escrow Agent shall recognize Lessee as the designated party for regulatory reporting purposes.
Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amount s of imputed interest income, as determined pursuant to Code Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.
Section 10. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the parties hereto consent to jurisdiction in the State of California and venue in any state or Federal court located in the State of California, and each party expressly waives any objections that it may have to the venue of such courts. THE PARTIES
HERETO EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.
Section 11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow busines s, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding . Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.
Section 12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.
Section 13. No party hereto shall assign its rights h ereunder until its assignee has submitted to the Escrow Agent (i) PATRIOT ACT disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.
Section 14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, L essee and Lessor authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever
-11-
situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process . For the avoidance of doubt, nothing herein prohibits any individual from communicating or disclosing information regarding suspected violations of laws, rules, or regulations to a governmental, regulatory, or self-regulatory authority without any notification to any person.
Lessee will treat the terms of this Agreement as confidential except on a “need to know” basis to persons within or outside Lessee ’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.
Section 15. This Agreement may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format ( “PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of this Agreement and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes.
Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [SIGNATURE PAGES TO FOLLOW]
[Signature Page to Escrow and Account Control Agreement] IN WITNESS WHEREOF, the parties have executed this Escrow and Account Control Agreement as of the date first above written.
BANC OF AMERICA PUBLIC CAPITAL CORP,
as Lessor
CITY OF FAIRFIELD, as Lessee
By: ________________________________
Name: ___________________________
Title: ____________________________
By: ________________________________
Name: ___________________________
Title: ____________________________
UMB BANK, NATIONAL ASSOCIATION, as
Escrow Agent
By: ________________________________
Name: ___________________________
Title: ____________________________
SCHEDULE 1
TO THE ESCROW AND ACCOUNT CONTROL AGREEMENT
FORM OF DISBURSEMENT REQUEST
Re: Equipment Lease/Purchase Agreement dated as of August 29, 2025 by and between Banc of America Public Capital Corp, as Lessor, and the City of Fairfield, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of August 29, 2025 (the “Escrow and Account Control Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), the City of Fairfield ( “Lessee”) and UMB Bank, National Association (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow and Account Control Agreement for the following purposes:
DISBURSEMENT AMOUNTS:
Payee’s Name and Address
(if disbursement via wire,
must include wire transfer
instructions)
INVOICE NUMBER DOLLAR AMOUNT PURPOSE
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
Schedule I-2
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address information is
required. Payee Bank information
only to be included for wire/EFT>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> [<mobilization fee that is
payable to the Vendor under the
Vendor Agreement>]
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required..>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(i) Each obligation specified in the table herein titled as “Disbursement Amounts” (a) has been incurr ed by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for Equipment Costs relating to the Equipment identified above and has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof , in whi ch event Lessee further certifies that the requested reimbursement is not with respect to any amount previously paid from the Lessee’s Contribution), and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof), and the Equipment relating to such obligation has been delivered, installed and accepted by Lessee . [For COI Disbursement only: Each obligation specified in the table herein titled as “Disbursement Amounts” (a) has been incurred by Lessee in the stated amount, an d (b) the same is a proper charge against the Delivery Costs Subaccount for costs of delivery of the Lease identified above and has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof, in which event Lessee further certifies that the requested reimbursement is not with respect to any amount previously paid from the Lessee’s Contribution).]
Schedule I-3
(ii) For each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” (a) Lessee has c onducted such inspection and testing of the Equipment as it deems appropriate in order to unconditionally accept such Equipment, (b) such Equipment has been delivered, installed, and unconditionally accepted for all purposes by Lessee and title thereto has transferred to Lessee and any security interest of Vendor therein has been released and (c) the date on which Equipment acceptance occurred is __________, 20__ . Attached hereto is a copy of the original invoice, and certification from Vendor as to title transfer and release by Vendor of any security interest with respect to such obligation and the related AIA forms. (iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other Liens or rights to Liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee). (v) The Equipment is insured in accordance with the Lease. (vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof . No Event of Non -appropriation has occurred or is threatened with respect to the Lease.
(vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x) The information in this D isbursement Request regarding each Payee, including their respective name, address and wiring instructions (collectively, the “Payee Information”), is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information. Lessee hereby acknowledges and agrees that any call -back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above.
(xi) [Following the disbursement of all obligations specified in the table herein titled as “Disbursement Amounts”, at least $500,000 of the Acquisition Amount shall still remain in the Escrow Account.]
Schedule I-4
[Lessee has previously paid and disbursed the full amount of the Lessee’s Contribution equal to $1,199,631 in accordance with Section 4.08 of the Lease and Lessee has provided written evidence satisfactory to Lessor that Lessee has paid and distributed at least $1,199,631 towards the cost of the Equipment from the Lessee’s Contribution.]
[Signature Page to Disbursement Request]
Dated: ________________
CITY OF FAIRFIELD
By: ____________________________________
Name: ______________________________
Title: _______________________________
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized
BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:
Name:
Title:
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Fairfield (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dated as of August 29, 2025 by and between Lessee and Banc o f America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of August 29, 2025 by and among Lessor, Lessee and UMB Bank, National Association , as Escrow Agent, all documents related thereto and delivered in connection therew ith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee , enforceable in all respects in accordance with their respective terms.
NAME OF OFFICIAL TITLE SIGNATURE
________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ ________________________ Dated: August 29, 2025
By: ____________________________________
Name: ______________________________
Title: _______________________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)
[AN “EXHIBIT A-2” MUST BE COMPLETED AN D EXECUTED AT TIME O F EXECUTION OF THE AGREEMENT]
EXHIBIT A-2
ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF AUGUST 29, 2025 BY AND AMONG
BANC OF AMERICA PUBLIC CAPITAL CORP, AS LESSOR, THE CITY OF FAIRFIELD, AS LESSEE AND
UMB BANK, NATIONAL ASSOCIATION, AS ESCROW AGENT
CERTIFICATE OF AUTHORIZED REPRESENTATIVES – [LESSOR]
Name: Candy Tam Name: Nancy Nusenko
Title: Authorized Agent Title: Authorized Agent
Phone: 415-765-7492 Phone: 443-541-3646
Facsimile: 415-633-0183 Facsimile:
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others Name: Nancy K. Hepner Name: Arlene Sobieck
Title: Authorized Agent Title: Authorized Agent
Phone: 443-541-3645 Phone: 443-541-3643
Facsimile: 804-553-2407 Facsimile:
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others The Escrow Agent is authorized to comp ly with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.
BANC OF AMERICA PUBLIC CAPITAL CORP
By:
Name:
Title:
Date: August 29, 2025
Agenda Item No: M.3
AGENDA REPORT
DATE: August 19, 2025
TO: Mayor and Council
FROM: David Gassaway, City Manager
SUBJECT: Resolution 2025-171 FN Appeal to Determine the Delinquent Transient Occupancy Tax for Motel Located at 2170 North Texas St
[Approving/Sustaining] [Denying/Overruling] the Appeal of the City of Fairfield Administrative Hearing Determination Regarding Interest on Delinquent Transient Occupancy and Tourism Tax Assessment for Quality Inn Previously Known as Super 8 Motel Located at 2170 North Texas Street, Fairfield, CA 94533 Owners: Shri Guru Hari, LLC and Shri Mahant, LLC and Marie Parunjanwala
Funding Source: N/A
Contact: John Furtado, (707) 428-7629
RECOMMENDED ACTION
Hold a public hearing and adopt resolution.
STATEMENT OF ISSUE
The Fairfield Municipal Code allows the operator to appeal the assessment of the tax to the council. Fairfield Municipal Code section 18.20 requires the council to conduct a hearing and approve/sustain or deny/overrule the appeal.
DISCUSSION
On April 2, 2025, the City of Fairfield issued a letter of Notice of Assessment and Hearing Rights for Interest on Delinquent Transient Occupancy Tax (Attachment 3) to the operator of Super 8 (now renamed Quality Inn) located at 2170 North Texas Street for $ 34,327.15. The current operator of the motel, Shri Guri Hari, LLC, through their attorney Frank A. Weiser, appealed the assessment to the finance director (in his capacity of tax administrator) on April 9, 2025, and was granted a date of hearing on May 5, 2025, at 11 a.m. to have the appeal heard.
The tax administrator was provided with an appeal letter (Attachment 4) which was discussed during the hearing.
The C ity’s finance director, acting in their delegated capacity as the City tax administrator, reviewed and verified the information and documentation provided on behalf of the client by Mr. Weiser and determined that the request for relief of the total tax ass essment amount was denied and the proper interest amount on the tax to be remitted remains in the full amount of $34,327.15 (Attachment 5).
Similar to the two past appeals, the appeal contended that the client has no financial rapport with the prior hotel owner(s), was unaware of the outstanding Transient Occupancy and Tourism Tax (TOT) amount and is not responsible for such delinquent amounts. Pursuant to Chapter 18, Article III, Section 18.17.1(c) and (d) of the Fairfield Municipal Code, any person purch asing an ongoing hotel business may apply to the Tax Administrator for a tax clearance certificate showing the tax due, if any, from the selling operator. Suppose an operator is liable for delinquent taxes or penalties under this article and sells its busi ness. In that case, its successor shall withhold a sufficient portion of the purchase price to satisfy the delinquency.
On June 5, 2025, Shri Guri Hari, LLC, Shri Mahant, LLC, and Marie Parunjanwala, through their attorney Frank A. Weiser appealed the ass essment to the city clerk and are granted a date of hearing of August 19, 2025, at 6:00 p.m. to have the appeal heard by the council (Attachment 6 and 7).
On February 18, 2025, the owner/operator filed a lawsuit in Solano County. By their lawsuit, the Owners seek relief from the prior two decisions of the council on the TOT assessments; allege that the Fairfield Municipal Code’s provisions on Transient Occupancy Tax are unconstitutional; and seek damages in the amount of $10 million. The lawsuit has not yet been served on the City, so this matter is not stayed, and the City must move forward with its administrative process on this appeal of the finance director’s decision. The issues and arguments of the complaint are not before the council. The current operator of the motel, Shri Guri Hari, LLC, through their attorney Frank A. Weiser, previously had appealed the assessment for $686,542.98 and $58,356.15 to the finance director (in his capacity of tax administrator) and council an d both appeals were denied on April 12, 2023 , and August 12, 2024 , by the finance director and on August 15, 2023 , and November 19, 2024 , by the council, respectively. Since no payments were received after the respective denials, a lien for $686,613.98 and $58,427.15 was placed on February 15, 2024, and March 25, 2025 (Attachment 8).
Fairfield Municipal Code 18.20 states:
18.20 Appeal from decision of tax administrator; findings conclusive.
Any operator aggrieved by any decision of the tax administrator with respect to the amount of such tax, interest, and penalties, if any, may appeal to the council by filing a notice of appeal with the city clerk within fifteen days of serving or mailing of the determination of tax due. The council shall fix a time and place for hearing such appeal and the city clerk shall give notice in writing to
such operator at his last known place of address. The findings of the council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice.
FINANCIAL IMPACT
The financial impact is minimal, as the hearing will occur during a regularly scheduled City Council meeting. However, approving the appeal would cost the City $34,327.15 in lost TOT revenue, and could adversely impact the original amount due to the City ($686,613.98 and $58,356.15 ) that was sustained on the same grounds.
PUBLIC CONTACT/ADVISORY BODY RECOMMENDATION
N/A
ALTERNATIVE ACTION
By operation of the Fairfield Municipal Code, the council must issue a ruling to approve/sustain or deny/overrule the appeal.
COORDINATED WITH
City Attorney’s Office
STAFF CONTACT
John Furtado, Finance Director
(707) 428-7629
[email protected]
ATTACHMENTS
Attachment 2: Proposed Resolution
Attachment 3: City of Fairfield Notice of Third Assessment and Hearing Rights Attachment 4: Operator Request for Appeal to Director of Finance Attachment 5: City of Fairfield Notice of Decision Regarding Administrative Hearing on Delinquent Transient Occupancy Tax Assessment
Attachment 6: Operator’s Attorney Letter to City Council Attachment 7: Appeal Notice Hearing with Council
Attachment 8: Lien Executed in the Past
CITY OF FAIRFIELD
RESOLUTION NO. 2025-171
[APPROVING/SUSTAINING] [DENYING/OVERRULING] THE APPEAL OF THE CITY OF FAIRFIELD
ADMINISTRATIVE HEARING DETERMINATION REGARDING INTEREST ON DELINQUENT
TRANSIENT OCCUPANCY AND TOURISM TAX ASSESSMENT FOR QUALITY INN PREVIOUSLY KNOW AS SUPER 8 MOTEL LOCATED AT 2170 NORTH TEXAS STREET, FAIRFIELD, CA 94533 OWNERS: SHRI GURU HARI, LLC AND SHRI MAHANT, LLC AND MARIE PARUNJANWALA
WHEREAS, on April 2, 2025, the City of Fairfield issued a Notice of Assessment and Hearing Rights for interest due on delinquent Transient Occupancy Tax to the operator of Super 8 (now renamed Quality Inn ) located at 2170 North Texas Street for $ 34,327.15. The current operator of the Motel, Shri Guri Hari, LLC, t hrough their Attorney Frank A. Weiser, appealed the assessment to the finance director (in his capacity of tax administrator) on April 9, 2025, and was granted a date of hearing of May 5, 2025, at 11 a.m. to have the appeal heard; and
WHEREAS, on May 29, 2025, the City’s finance director, acting in their delegated capacity as the City tax administrator, reviewed and verified the information and documentation provided on behalf of the client by Mr. Weiser and determined that the request for relief of the to tal tax assessment amount is denied and the proper tax to be remitted remains in the full amount of $34,327.15; and
WHEREAS, Fairfield Municipal Code Section 18.20 states, “Any operator aggrieved by any decision of the tax administrator with respect to th e amount of such tax, interest and penalties, if any, may appeal to the council by filing a notice of appeal with the city clerk within fifteen days of serving or mailing of the determination of tax due. The council shall fix a time and place for hearing such appeal, and the city clerk shall give notice in writing to such operator at his last known place of address. The findings of the council shall be final and conclusive and shall be served upon the appellant in the manner prescribed above for service of notice of hearing. Any amount found to be due shall be immediately due and payable upon the service of notice”; and WHEREAS, the Motel Operator, Shri Guri Hari, LLC, Shri Mahant, LLC , and Marie Parunjanwala, through their attorney Frank A. Weiser have timely exercised their right of appeal to the council through delivery to the City requesting an appeal of the Transient Occupancy Tax on or about June 5, 2025; and
WHEREAS, Fairfield Municipal Code section 18.20 requires the council to “fix a time and place for hearing such appeal and the collector shall give notice in writing to such person of the time and place of the hearing by serving it personally or by depositing it in the post office in the city, postage prepaid, addressed to such person at the address appearing on his last license or application;” and
RES. NO. 2025-171
WHEREAS, the council has held the hearing on the appeal of the d etermination regarding delinquent Transient Occupancy and Tourism Tax Assessment by hearing and considering sworn testimony from all parties wishing to be heard and receiving and considering all evidence lawfully admitted before it.
NOW, THEREFORE, THE COUNCIL OF THE CITY OF FAIRFIELD HEREBY RESOLVES:
Section 1. The council finds that the appeal brought by The Motel Operator, Shri Guri Hari, LLC, Shri Mahant, LLC , and Marie Parunjanwala regarding delinquent Transient Occupancy and Tourism Tax Assessment is (choose one): APPROVED/SUSTAINED or DENIED/OVERRULED.
Section 2. City Staff for the City of Fairfield are authorized to do all things proper and necessary consistent with the findings of this resolution.
Section 3. A copy of this resolution shall be served on the hotel operator by serving it personally or depositing it in the post office in the city, postage prepaid, addressed to such person at the address appearing on the Grant Deed or application within 10 business days of this hearing.
The city clerk is directed to keep a copy of the proof of service.
PASSED AND ADOPTED this 19th day of August 2025, by the following vote:
AYES: MEMBERS: MOY/BERTANI/CARR/PANDURO/SANDHU/TONNESEN/WILLIAMS NOES: MEMBERS: _________________________________________________ ABSENT: MEMBERS: _________________________________________________ ABSTAIN: MEMBERS: _________________________________________________
_________________________________________________
MAYOR
ATTEST:
___________________________
CITY CLERK
Julia B. Shakoori
T 415.421.8484
F 415.421.8486
E [email protected]
1 Sansome Street, Suite 2050
San Francisco, CA 94104-4811
rwglaw.com
July 23, 2025
Shri Guru Hari, LLC and Shir Mahant, LLC and Marie
Parunjawala
Quality Inn
2170 N. Texas Street
Fairfield, CA
94533
4105 Canyon Creek Ct
Fairfield, CA
94534
Re: Notice of Appeal Hearing for Quality Inn (Formerly Super 8) at 2170 N.
Texas Street, Fairfield
To Whom It May Concern:
On behalf of the City Clerk of the City of Fairfield, this letter serves as your written notice under Section 18.20 of the Fairfield Municipal Code, for the appeal hearing challenging the decision of the tax administrator regarding your business, Quality Inn, located at 2170 N. Texas Street in Fairfield.
The City Council has fixed the time and place for a hearing on your appeal for:
Date: Tuesday, August 19, 2025
Time: 6:00 pm
Location: City Council Chambers - 1000 Webster Street, Fairfield, CA 94533
Please bring your attorney and any evidence you wish to present to the City Council at the hearing.
Shri Guru Hari, LLC and Shir Mahant, LLC and
Marie Parunjawala
4105 Canyon Creek Ct
July 23, 2025 Page | 2
Please arrive no later than 6:00 PM for the hearing but note that your hearing will be preceded by other City Council business, so your hearing may not start until after 7:00 PM. If you have any questions or concerns, please have your attorney, Mr. Weiser, contact the City Attorney’s office prior to the hearing date.
Very truly yours,
Julia B. Shakoori
cc: Frank Weiser via email as requested [email protected] Karen L. Rees, City Clerk
11245-0001\3139712v1.doc