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Home My WebLink About19- Public Services CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACOII G I N A L From: Randy Kuettle, Acting Director Subject: Resolution of the Mayor and Common Council of the City of San Dept: Public Services Bernardino authorizing the execution of an Agreement and issuance of a Date: April 28, 2010 Purchase Order to Fairview Ford of San Bernardino, pursuant to Section 3.04.010-133 of the City of San Bernardino Municipal Code for the purchase of ten (10) refuse trucks and award a lease-purchase agreement to Bank of America. Meeting Date: May 3, 2010 Synopsis of Previous Council Action On August 21, 2006, per Resolution 2006-300, the Mayor and Common Council approved the purchase of twenty refuse trucks from Fairview Ford. On November 19, 2007, per Resolution 2007-454, the Mayor and Common Council approved the purchase of sixteen refuse trucks from Fairview Ford. On January 20, 2009, per Resolution 2009-9, the Mayor and Common Council approved the purchase of twelve refuse trucks from Fairview Ford. Recommended Motion: Adopt Resolution. Signature Contact person Don Johnson, Fleet Manager Phone: 5220 Supporting data attached: Staff Report, Quotes, Agreement and Resolution. Ward: All FUNDING REQUIREMENTS: Amount: $3,279,956.47 Plus lease costs Source: FY10/11 Estimated Lease Payments $287,900 Semi-Annually 527-412-5803/527-413-5803 Finance: Council Notes: Agenda Item No. .� S'_13 10 CITY OF SAN BERNARDINO OFFICE OF THE PUBLIC SERVICES DIRECTOR INTER-OFFICE MEMORANDUM TO: Charles McNeeley, City Manager FROM: Don Johnson, Public Services Fleet Division DATE: April 28, 2010 SUBJECT: City Managers Approval of Process — Purchases made pursuant to Section 3.04.010(8)(3) and Section 3.04.075 of the City's Municipal Code (Purchases approved by the Mayor and Common Council and emergency purchases approved by the City Manager). DDL Number 82. COPIES: Randy Kuettle, Acting Director of Public Services Fairview Ford was selected as a Sole Source for the following reasons: 1. Fairview Ford is the same local vendor that has supplied all forty-eight (48) LNG powered refuse trucks purchased since 2006. 2. The IWM Division currently operates forty (40) Labrie Automizer Refuse trucks, twelve (12) McNeilus Frontloaders and eight (8) McNeilus Rolloffs. Fleet staff has found it to be more cost effective to standardize types of vehicles and equipment for better operational economy. Fewer brands of parts must be stocked and mechanic training is specialized and more thorough. 3. Fairview will use sub-contractors, Arata / Labrie Equipment of San Carlos, and McNeilus Truck of Colton, for the installation of the refuse bodies. Los Angeles Freightliner of Fontana, will supply the AUTOCAR chassis and conversion to LNG (Liquefied Natural Gas), as required by South Coast Air Quality Management District (SCAQMD) rule 1193. A Request for Council Action entitled, "Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an Agreement and issuance of a Purchase Order to Fairview Ford of San Bernardino, pursuant to Section 3.04.010-63 of the City of San Bernardino Municipal Code for the purchase of ten (10) refuse trucks and award a lease-purchase agreement to Bank of America" has been submitted and placed on the May 3, 2010 agenda calendar for review and approval. Don W. Johnson Fleet Services Division Manager Approved By: C es McNeeley City Manager V CITY OF SAN BERNARDINO—REQUEST FOR COUNCIL ACTION Staff Report SUBJECT: Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an Agreement and issuance of a Purchase Order to Fairview Ford of San Bernardino, pursuant to Section 3.04.010-113 of the City of San Bernardino Municipal Code for the purchase of ten(10)refuse trucks and award a lease-purchase agreement to Bank of America. BACKGROUND: The IWM Division currently utilizes eighty-nine (89) refuse trucks, seven(7) of these are 2002 year model Labrie Sideloaders, one (1) 1994 model Amrep Rolloff, two (2) 2000 year model Frontloader refuse trucks from various manufacturers on a daily basis. These ten (10) units have far surpassed their useful life and have become unreliable and expensive to operate. Therefore, these ten (10) units will be placed in surplus for auction. Number of Year Type Unit Numbers Units 1 1994 Roll-off 1202 2 2000 Frontloaders 191, 193 7 2002 Sideloaders 01112, 01113, 01114, 01115, 01116, 01117, and 01119. During the FY 06/07 budget preparation, Fleet staff developed a multi-year long term replacement schedule for the IWM Division that was approved as part of the FY 06/07 IWM Division Budget. The replacement of these aging units is the next phase of that schedule. The IWM Division currently operates forty (40) Labrie Automizer Refuse trucks, twelve (12) McNeilus Frontloaders and eight (8) McNeilus Rolloffs. Fleet staff has found it to be more cost effective to standardize types of vehicles and equipment for better operational economy. Fewer brands of parts must be stocked and mechanic training is specialized and more thorough. Therefore, staff is recommending that the purchase of ten (10)refuse trucks be approved. Due to the specialized nature of this equipment there are no local vendors able to supply the trucks. However, Fleet staff has negotiated with Fairview Ford of San Bernardino to be the primary vendor for this purchase. The vehicles and subsequent build up will be purchased through Fairview Ford for a total amount of $3,279,956.47 including tax plus lease costs. Fairview will use sub- contractors, Arata / Labrie Equipment of San Carlos, and McNeilus Truck of Colton, for the installation of the refuse bodies. Los Angeles Freightliner of Fontana, will supply the AUTOCAR chassis and conversion to LNG (Liquefied Natural Gas), as required by South Coast Air Quality Management District(SCAQMD)rule 1193. The following is a break down of the pricing per type of unit: 1 Rolloff truck @$207,297 each 1 2 Front loaders @ $256,388 each 7 Side loaders @ $326,930 each Attached "A" for your review is the quote from Fairview Ford and Los Angeles Freightliner. Standard chassis warranty is one (1) year. Included is a 5-year extended Allison Transmission warranty, and a 5-year / 150,000 mile extended Cummins Engine warranty as well as an Enhanced Warranty/Service package (See Attachments "1"& "2"). LEASE/PURCHASE FINANCING: Staff issued a request for rate quote RFQ LQ - 1002 to the four financing/leasing companies that have existing master lease agreements in place with the City and four financing/leasing companies that don't have existing master lease agreements in place with the City. RFQ LQ — 1002 was for a total amount of$3,579,720.89 for ten (10) Autocar refuse truck chassis' & body and one (1) 2009 Schwarze M6000 Broom Sweeper powered by Compressed Natural Gas. The RFQ requested an amortization schedule of seven years with semi-annual payments. The seven year repayment is within the City's established replacement schedule for the vehicles. RFQ LQ — 1002 was sent out on February 21, 2010 and due back on March 2, 2010. Of the eight lenders solicited, Finance received two "no bids" and five "no responses". Finance staff called the lenders to obtain explanations for the lack of responses. All provided various reasons why bids were not submitted. Summarized below are the rate quote results (seven-year term with semi-annual payments): Lease Purchase Financing Provider Rate Quote Semi-Annual Payment Bank of America 3.78% $268,834.94 Comerica Leasing Corporation No Bid FMLC No Bid Ford Credit Municipal Finance No Responses Koch Financial Corporation No Responses SunTrust Leasing Corporation No Res onses Union Bank No Res onses Wells Fargo No Responses Comerica Leasing Corporation is currently only lending to depositors that maintain a balance equal to or greater than 15% of the amount requested. FMLC is a financing broker and the banks associated with FMLC were either not interested in the City's request or received the RFQ directly from the City. Ford Credit Municipal Finance declined to bid because they're only bidding on deals that meet their criteria for essential use and finance structure. Koch Financial Corporation declined to bid because of their corporate decision to only fund specific deals. SunTrust Leasing Corporation declined to bid and did not respond to requests for information about their decision to not bid. Union Bank declined to bid because the RFQ was too small and they're only financing small deals for existing customers. Wells Fargo declined to bid because the RFQ did not meet their set criteria. 2 The lack of bids submitted can be tied to the current state of our economy and based upon the information received from the lenders, they have adjusted their policies for which type of lease- purchases they will fund. Though Bank of America provided the sole bid, it is staff's recommendation to award the bid and enter a lease-purchase contract (Exhibit °B" to the Resolution) with Bank of America. Within a twelve month period Bank of America was awarded three lease-purchase financing bids by the City. The three bids Bank of America won were also bid competitively and won against other submitted jbids. Therefore, staff considers Bank of America to be a responsible and qualified lender. j FINANCIAL IMPACT: I No lease payments are scheduled for this fiscal year. Funds for the lease payment will be budgeted next fiscal year in the Integrated Waste Management Fund, account number 527-400-5803-0000- 0095 ($209,820.97) and 527-400-5803-0000-0096 (59,013.97). The semi-annual payment is $268,834.94. RECOMMENDATION: Adopt Resolution. ( i j3 I 3 3 f 1 1 1 { t 3 I RESOLUTION NO. COPY © 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 3 AND ISSUANCE OF A PURCHASE ORDER TO FAIRVIEW FORD OF SAN BERNARDINO, PURSUANT TO SECTION 3.04.010-113 OF THE CITY OF SAN 4 BERNARDINO MUNICIPAL CODE FOR THE PURCHASE OF TEN (10) REFUSE 5 TRUCKS, AND AWARD A LEASE-PURCHASE AGREEMENT TO BANK OF AMERICA. 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE 7 CITY OF SAN BERNARDINO AS FOLLOWS: 8 SECTION 1. The City Manager of the City of San Bernardino is hereby authorized to 9 execute on behalf of said City an Agreement between the City of San Bernardino and Fairview 10 Ford, a copy of which is attached hereto, marked Exhibit "A" and incorporated herein by i iI 12 reference as fully as though set forth at length. 13 SECTION 2. This purchase is exempt from the formal contract procedures of Section 14 3.04.010 of the Municipal Code, pursuant to Section 3.04.010. B.3 of said Code "Purchases 15 approved by the Mayor and Common Council". 16 SECTION 3. That Fairview Ford has offered a purchase price of$3,279,956.47 17 including tax pursuant to Section 3.04.010 B-3 of the Municipal Code for(10) Year 18 2010 AUTOCAR ACX64 chassis and refuse bodies with LNG conversion. 19 20 SECTION 4. The Purchase Order shall reference this Resolution Number and shall 21 read, "Purchase of ten (10) Year 2010 Autocar ACX64 chassis to include refuse bodies and 22 LNG fuel conversion, P.O. not to exceed $3,279,956.47' and shall incorporate the terms and 23 conditions of the Agreement. 24 25 26 27 28 �% 9 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 2 AND ISSUANCE OF A PURCHASE ORDER TO FAIRVIEW FORD OF SAN BERNARDINO, PURSUANT TO SECTION 3.04.010-113 OF THE CITY OF SAN 3 BERNARDINO MUNICIPAL CODE FOR THE PURCHASE OFTEN (10) REFUSE TRUCKS, AND AWARD A LEASE-PURCHASE AGREEMENT TO BANK OF 4 AMERICA. 5 6 SECTION 5. That Bank of America provided the lowest rate quote for the lease- 7 purchase of a ten (10) Autocar ACX64 chassis to include refuse bodies and LNG fuel 8 conversion, marked Exhibit `B". Pursuant to this determination the Director of Finance is 9 hereby authorized to execute lease-purchase documents with Bank of America. 10 SECTION 6. The authorization to execute the above referenced Purchase Order and 11 12 agreement is rescinded if not issued within sixty (60) days of the passage of this Resolution. 13 © 14 15 16 17 18 19 20 21 22 23 24 25 26 O 27 28 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 2 AND ISSUANCE OF A PURCHASE ORDER TO FAIRVIEW FORD OF SAN BERNARDINO, PURSUANT TO SECTION 3.04.010-113 OF THE CITY OF SAN 3 BERNARDINO MUNICIPAL CODE FOR THE PURCHASE OF TEN (10) REFUSE TRUCKS, AND AWARD A LEASE-PURCHASE AGREEMENT TO BANK OF 4 AMERICA. 5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor 6 and Common Council of the City of San Bernardino at a meeting thereof, held 7 8 on the day of 2010, by the following vote,to wit: 9 Council Members: AYES NAYS ABSTAIN ABSENT 1() MARQUEZ 11 BESJTiwRvS 12 BRINKER 13 SHORETT Q 14 KELLEY 15 16 JOHNSON 17 MCCAMMACK 18 19 20 Rachel G. Clark, City Clerk 21 The foregoing resolution is hereby approved this day of 2010. 22 23 Patrick J. Moms, Mayor 24 City of San Bernardino Ap oved as to form: 25 26 J es F. Penman, City Attorney 27 28 i 1 VENDOR SERVICE AGREEMENT 2 This Vendor Service Agreement is entered into this 3rd day of May 2010, by and 3 4 between Fairview Ford ("VENDOR") and the City of San Bernardino ("CITY" or "San 5 Bernardino"). 6 WITNESSETH: 7 WHEREAS,the Mayor and Corrunon Council have determined that it is in the best i 8 9 interest of the CITY to contract for the purchase of ten (10) 2010 AUTOCAR ACX64 chassis 10 and refuse bodies with LNG fuel conversion; and 11 WHEREAS, the City of San Bernardino has determined that vendor possesses the 12 professional skills and ability to provide said services for the City; 13 NOW, THEREFORE,the parties hereto agree as follows: 14 1. SCOPE OF SERVICES. 15 16 For the remuneration stipulated in paragraph 2, San Bernardino hereby engages the 17 services of VENDOR to provide those products and services as set forth in its proposal dated I8 January 19, 2010, attached hereto, marked Attachment "1" and incorporated herein by this 19 reference as fully as though set forth at length. 20 2. COMPENSATION AND EXPENSES. 21 a. For the services delineated above, the CITY, upon presentation of an invoice, shall 22 23 pay the VENDOR up to the amount of$3,279,956.47 to provide and perform those 24 products and services described in Section I above. 25 b. No other expenditures made by VENDOR shall be reimbursed by CITY. 26 3. TERM. 27 The term of this agreement shall be for a period of one (1) year. 28 Exhibit"A" -1- I This Agreement may be terminated at any time by thirty(30) days prior written notice © 2 by either party. The terms of this Agreement shall remain in force unless amended by written 3 agreement of the parties executed on or before date of expiration of current term of the 4 agreement. 5 4. INDEMNITY. 6 Vendor agrees to and shall indemnify and hold the City, its elected officials, employees, 7 8 agents or representatives, free and harmless from all claims, actions, damages and liabilities of 9 any kind and nature arising from bodily injury, including death, or property damage, based or 10 asserted upon any or alleged act or omission of Vendor, its employees, agents, or 11 subcontractors, relating to or in any way connected with the accomplishment of the work or 12 performance of service under this Agreement, unless the bodily injury or property damage was 13 actual] caused b the sole negligence of the Ci its elected officials, employees, agents or Y Y City, P 14 representatives. As part of the foregoing indemnity, Vendor agrees to protect and defend at its 15 16 own expense, including attorney's fees the City, its elected officials, employees, agents or 17 representatives from any and all legal actions based upon such actual or alleged acts or 18 omissions. Vendor hereby waives any and all rights to any types of express or implied 19 indemnity against the City, its elected officials, employees, agents or representatives, with 20 respect to third party claims against the Vendor relating to or in any way connected with the 21 accomplishment of the work or performance of services under this Agreement. 22 5. INSURANCE. 24 While not restricting or limiting the foregoing, during the term of this Agreement, 25 VENDOR shall maintain in effect policies of comprehensive public, general and automobile 26 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory © 27 worker's compensation coverage, and shall file copies of said policies with the CITY'S Risk 28 Exhibit"A" 2 1 Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an 2 additional named insured in each policy of insurance provided hereunder. The Certificate of 3 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or 4 termination in the policy. Insurer shall give CITY 30 days notice prior to enactment and any 5 change or termination of policy. 6 6. NON-DISCRIMINATION. 7 In the performance of this Agreement and in the hiring and recruitment of employees, 8 9 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in, 10 discrimination in employment of persons because of their race, religion, color, national origin, 11 anccs.;y, age, mental or physical disability,medical conditions, marital status, sexual gender or 12 sexual orientation, or any other status protected by law, except as permitted pursuant to Section 13 12940 of the California Government Code. 14 15 7. INDEPENDENT CONTRACTOR. 16 VENDOR shall perform work tasks provided by this Agreement, but for all intents and 17 purposes VENDOR shall be an independent contractor and not an agent or employee of the 18 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of 19 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment 20 Compensation, and other payroll deductions for VENDOR and its officers, agents, and 21 employees, and all business licenses, if any are required, in connection with the services to be 22 23 performed hereunder. 24 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. 25 VENDOR warrants that it possesses or shall obtain, and maintain a business registration 26 certificate pursuant to Chapter 5 of the Municipal Code, and any other license, permits, f 27 �✓ 28 Exhibit"A" -3- I qualifications, insurance and approval of whatever nature that are legally required of VENDOR © 2 to practice its business or profession. 3 9. NOTICES. 4 Any notices to be given pursuant to this Agreement shall be deposited with the United 5 States Postal Service,postage prepaid and addressed as follows: 6 TO THE CITY: Public Services Director 7 300 North"D" Street San Bernardino, CA 92418 8 Telephone: (909) 384-5140 9 TO THE VENDOR: Fairview Ford Sales Inc. 10 808 West 2nd Street San Bernardino, CA 92412-5516 11 Tcicphonc: (909) 386-001 Attn: Todd Eff 12 13 10. ATTORNEYS' FEES 14 In the event that litigation is brought by any party in connection with this Agreement, Err 15 the prevailing parry shall be entitled to recover from the opposing party all costs and expenses, 16 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of 17 its rights or remedies hereunder or the enforcement of any of the terms, conditions or 18 provisions hereof. The costs, salary and expenses of the City Attorney and members of his 19 a 20 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' 21 fees" for the purposes of this paragraph. 22 11. ASSIGNMENT. 23 VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior 25 I written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void 26 O27 and shall constitute a breach of this Agreement and cause for the termination of this 28 Exhibit"A" -4- 1 Agreement. Regardless of CITY'S consent,no subletting or assignment shall release VENDOR 2 of VENDOR's obligation to perform all other obligations to be performed by VENDOR 3 hereunder for the tern of this Agreement. 4 12. VENUE. 5 The parties hereto agree that all actions or proceedings arising in connection with this 6 Agreement shall be tried and litigated either in the State courts located in the County of San 7 8 Bernardino, State of California or the U.S. District Court for the Central District of California, 9 Riverside Division. The aforementioned choice of venue is intended by the parties to be the 10 mandatory and not permissive in nature. 11 13. GOVERNING LAW. 12 This Agreement shall be governed by the laws of the State of California. 13 14. SUCCESSORS AND ASSIGNS. 14 This Agreement shall be binding on and inure to the benefit of the parties to this 15 16 Agreement and their respective heirs,representatives, successors, and assigns. 17 15. HEADINGS. 18 The subject headings of the sections of this Agreement are included for the purposes of 19 convenience only and shall not affect the construction or the interpretation of any of its j 20 provisions. g 21 16. ENTIRE AGREEMENT; MODIFICATION. 22 23 This Agreement constitutes the entire agreement and the understanding between the 24 parties, and supercedes any prior agreements and understandings relating to the subject manner 25 of this Agreement. This Agreement may be modified or amended only by a written instrument 26 executed by all parties to this Agreement. �^ 27 111 �✓ 28 Exhibit"A" -5- 1 VENDOR SERVICE AGREEMENT FAIRVIEW FORD SALES INC. 2 3 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day 4 and date set forth below. 5 Dated: , 2010 Fairview Ford Sales, Inc. 6 By: 7 8 9 Dated , 2010 CITY OF SAN BERNARDINO 10 By: Charles E. McNeely, City Manager 11 Approved as to Form: 12 By: 13 James F. Penman, City Attorney 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Exhibit"A" -6- Exhibit`B" MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT This Master Equipment Lease/Purchase Agreement No. 2114500-06000 (the "Agreement") dated as of May 10, 2010, and entered into between Bank of America, National Association, a national banking association (`Lessor'), and City of San Bernardino, a body corporate and politic existing under the laws of the State of California("Lessee'). WIPNESSETH: - WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment described in each Schedule (as each such term is defined herein), subject to the terms and conditions of and for the purposes set forth in each Lease, and in the event of a conflict the terms of a Schedule prevail; and WHEREAS, the relationship between the parties shall be a continuing one and items of equipment may be added to the Equipment from time to time by execution of additional Schedules by the parties hereto and as otherwise provided herein, -ed WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into this Agreement and the Schedules hereto for the purposes set forth herein, NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I Section 1.01. Definitions. The following temis will have the meanings indicated below unless the context clearly requires otherwise: "Acquisition Amount" means the amount specified in each Lease and represented by Lessee to be sufficient to acquire the Equipment listed in such Lease. "Acquisition Fund" means, with respect to any Lease, the fund established and held by the Acquisition Fund Custodian pursuant to the related Acquisition Fund Agreement, if any. "Acquisition Fund Agreement" means, with respect to any Lease, an Acquisition Fund and Account Control Agreement, substantially in the form of Exhibit A attached hereto, in form and substance acceptable to and executed by Lessee, Lessor and the Acquisition Fund Custodian, pursuant to which an Acquisition Fund is established and administered. "Acquisition Fund Custodian" means the Acquisition Fund Custodian identified in any Acquisition Fund Agreemert, and its successors and assigns. #765674v1 (BAPCC/CA Abatement Lease Template) I [CA Abatement] "Acquisition Period" means, with respect to each Lease, that period stated in the '© Schedule to such Lease during which the Lease Proceeds attributable to such Lease may be expended on Equipment Costs. "Agreement" means this Master Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to the Agreement pursuant to Section 13.05. "Code" means the lmemal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the United States Treasury Regulations proposed or in effect thereunder. "Commencement Date" means, for each Lease, the date when Lessee's obligation to pay rent commences under such Lease, which date shall be the earlier of(i)the date on which the Equipment listed in such Lease is accepted by Lessee in the manner described in Section 5.01, and (ii)the date on which sufficient moneys to purchase the Equipment listed in such Lease are deposited for that purpose with an Acquisition Fund Custodian. "Contract Rate"means the rate identified as such in the applicable Schedule. "Equipment" means the property listed in each of the Leases and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article V. Whenever reference is made in this Agreement to Equipment listed in O a Lease, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. "Equipment Costs"means the total cost of the Equipment listed in each Lease, including soft costs such as freight, installation and taxes paid up front by Lessor and all capitalizable consulting and training fees approved by Lessor, legal fees, financing costs, and other costs necessary to vest full, clear legal title to the Equipment in Lessee, subject to the security interest granted to and retained by Lessor as set froth in each Lease, and otherwise incurred in connection with the financing provided by the lease-purchase of the Equipment as provided in each Lease; provided that (i) any such soft costs on a cumulative basis shall not exceed a percentage of the Maximum Equipment Cost approved by Lessor and (ii) in no event shall capitalizable delivery charges,installation charges, taxes and similar capitalizable soft costs relating to such Equipment be included without Lessor's prior consent "Event ofDefault"means an Event of Default described in Section 12.01. Lease" means a Schedule and the terms of this Agreement which are incorporated by reference into such Schedule. Each Schedule shall constitute a separate and independent Lease. "Lease Proceeds" means, with respect to each Lease, the total amount of money to be paid by Lessor to Vendor. "Lease Term" for each Lease means the Original Term and all Renewal Terms therein © provided and for this Agreement means the period from the date hereof until this Agreement is terminated.. #765674A (BAPCOCA Abatement Lease Template) 2 O "Lessee"means the entity referred to as Lessee in the first paragraph of this Agreement. "Lessor" means (a)the entity referred to as Lessor in the first paragraph of this Agree- ment or (b) any assignee or transferee of any right, title or interest of Lessor in and to the Equipment under a Lease or any Lease (including Rental Payments thereunder) pursuant to Section 11.01, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform under a Lease. "Material Adverse Change" means (prior to the Utilization Period Expiration, a downgrade in Lessee's external debt rating of two or more subgrades by either Moody's Investors Service, Inc., or Standard & Poor's Ratings Group or any equivalent successor credit rating agency, or any downgrade by either such agency that would cause Lessee's credit rating to be below investment grade, and (be) thereafter, any change in Lessee's creditworthiness that could have a material adverse effect on (i) the financial condition or operation of Lessee [and its subsidiaries taken as a whole], or (ii) Lessee's ability to perform its obligations under this Agreement or any Lease. "Maximum Equipment Cost" means the cumulative amount specified in the latest Schedule executed under this Agreement. "Original Term" means the period from the Commencement Date for each Lease until the end of the fiscal year of Lessee in effect at such Commencement Date. © "Purchase Price" means, with respect to the Equipment listed on a Lease, the amount that Lessee may pay to Lessor to purchase such Equipment as provided in such Lease. "Renewal Terms"means the renewal terms of each Lease, each having a duration of one year and a term coextensive with Lessee's fiscal year, as specified in the Schedule applicable thereto. "Rental Payments"means the basic rental payments payable by Lessee under each Lease pursuant to Section 4.01, in each case consisting of a principal component and an interest component. "Schedule" means each separately numbered Schedule of Property substantially in the form of Schedule of Property No. 2 hereto together with a Rental Payment Schedule attached thereto substantially in the form of Exhibit A-1 hereto. "State"means the State of California. "Utilization Period" means the date, with respect to each Lease not funded under an Acquisition Fund Agreement, by which Lessee must deliver an Acceptance Certificate for the Equipment under such Lease as indicated in Section 3.04(b). "Vendor" means the manufacturer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer or supplier from whom Lessor arranged ® Lessee's acquisition and financing of the Equipment pursuant to the applicable Lease. #765674vl (BAPCC/CA Abatement Lease Template) 3 © ARTICLE II Section 1.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof and as of the Commencement Date of each Lease as follows: (a) Lessee is a state or a political subdivision thereof within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State with full power and authority to enter into this Agreement and each Lease and the transactions contemplated hereby and to perform all of its obligations hereunder and under each Lease. (b) Lessee has duly authorized the execution and delivery of this Agreement and each Lease by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of this Agreement and each Lease. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic. (e) Lessee has complied with such pubic bidding req uirements as may be applicable to this Agreement and each Lease and the acquisition by Lessee of the Equipment as provided in each Lease. (f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee's authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid under each Lease. (g) Lessee has kept and throughout the Lease Term of any Lease shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor(i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows and notes, and (4) schedules and attachments to the financial statements) within 180 days of its fiscal end, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) its annual budget for the following fiscal year when approved but not later than 30 days prior to its current fiscal year end. The financial statements described in subsection (i) shall be accompanied by an unqualified opinion of Lessees's auditor. Credit information relating tot Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assign. O (h) Lessee has an immediate need for the Equipment listed on each Schedule and expects to make immediate use of the Equipment listed on each Schedule. Lessee's need for the #765674v1 (BAPCC/CA Abatement Lease Template) 4 Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Lease Term to such item. (i) The payment of the Rental Payments or any portion thereof is not(under the terms of any Lease or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payment in respect of such property; or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Equipment Cost for the Equipment will be used, directly or indirectly, to make or finance loans to any person other than Lessee. Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (j) There is no pending litigation,tax claim,proceeding or dispute that may adversely affect Lessee's financial condition or impairs its ability to perform its obligation hereunder. Lessee will, at its expense, maintain its legal existence in good standing and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor's security interest in the Equipment and Lessor's rights and benefits under this Lease. © ARTICLE III Section 3.01. Lease of Equipment. Subject to the terms of this Master Lease, Lessor agrees to provide the funds specified in each Lease to be provided by it to acquire the Equipment, up to an amount equal to the Maximum Equipment Cost. Upon the execution of each Lease, Lessor demises, leases, transfers and lets to Lessee, and Lessee acquires, rents and leases from Lessor, the Equipment as set forth in such Lease and in accordance with the terms thereof. The Lease Term for each Lease may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Lease Term set forth in such Lease. At the end of the Original Term and at the end of each Renewal Term until the maximum Lease Term has been completed, Lessee shall be deemed to have exercised its option to continue each Lease for the next Renewal Term unless Lessee shall have terminated such Lease pursuant to Section 3.03 or Section 10.01. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the applicable Lease. Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to continue the Lease Term of each Lease and to pay the Original Term and all Renewal Terms and to pay the Rental Payments thereunder. Lessee affirms that sufficient funds are available for the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Lease Term of each Lease can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget v or appropriation request submitted and adopted in accordance with applicable provisions of law, #765674vl (BAPCC/CA Abatement Lease Template) 5 to have such portion of the budget or appropriation request approved and to exhaust all available reviews and appeals in the event such portion of the budget or appropriation request is not approved. Section 3.03. Abatement. During any period in which, by reason of material damage or destruction or taking under the power of eminent domain (or sale to any entity threatening the use of such power) or material title defect with respect to any Equipment, there is substantial interference with the use and possession by Lessee of such Equipment,the rent applicable to such Equipment shall be abated proportionately in whole or in part. Lessee shall immediately notify Lessor upon the occurrence of any event causing substantial interference with Lessee's use and possession of any Equipment, and such notice shall be provided prior to the abatement of any rent. The amount of abatement shall be such that the remaining rental obligation for each rental period represents fair consideration for the use and possession of the portions of the Equipment that are not affected by such interference. Such abatement shall commence on the date that Lessee's use and possession of the affected Equipment is restricted because of such interference and end on the earlier of (i) the date on which the use and possession thereof are restored to Lessee, or(ii) the date on which Lessee either(x) replaces the affected Equipment or (y)uses the proceeds of insurance or condemnation award to pay the applicable Purchase Price therefor. Notwithstanding any such interference with Lessee's use and possession of a portion of the Equipment, this Lease shall continue in full force and effect with respect to any remaining Equipment. Lessee waives the benefits of Civil Code Sections 1932 and any and all other rights to terminate this Lease by virtue of any interference with the use and possession of any Equipment. © Section 3.04. Conditions to Lessor's Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations pursuant to any Lease,Lessee shall deliver to Lessor the following: (i) A fully completed Schedule, executed by Lessee; (ii) An Acquisition Fund Agreement, executed by Lessee and the Acquisition Fund Custodian, unless Lessor pays 100% of the Acquisition Amount directly to the Vendor upon execution of the Lease; (iii) A Certificate executed by the Clerk or Secretary or other comparable officer of Lessee, in substantially the form attached hereto as Exhibit C, completed to the satisfaction of Lessor; (iv) A certified copy of a resolution, ordinance or other official action of Lessee's governing body authorizing the execution and delivery of this Lease and performance by Lessee of its obligations hereunder; (v) An opinion of counsel to Lessee in substantially the form attached hereto as Exhibit D respecting such Lease and otherwise satisfactory to Lessor; 10 (vi) Evidence of insurance as required by Section 7.02 hereof; #765674A (BAPCC/CA Abatement Lease Template) 6 (vii) All documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or appropriate at that time pursuant to Section 6.02; (viii) A copy of a fully completed and executed Form 8038; (ix) If any Equipment units are motor vehicles, properly competed certificates of title for such vehicles; and (x) Such other items, if any, as are set forth in such Lease or are reasonably required by Lessor. (b) In addition, the,performance by Lessor of any of its obligations pursuant to any Lease shall be subject to: (i)no material adverse change in the financial condition of Lessee since the date of this Lease, (ii) no Event of Default having occurred, and (iii)if no Acquisition Fund has been established, the Equipment must be accepted by Lessee no later than date listed as the Utilization Period Expiration in the applicable Schedule. (c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount for Equipment described in a Schedule to the Vendor or, if authorized by Lessee's governing body, will reimburse Lessee for the prior payment of any such Acquisition Amounts by Lessee to the Vendor, upon receipt of the documents described in Sections 5.01(a) and (b); or if an Acquisition Fund has been established pursuant to an Acquisition Fund Agreement, Lessor will © deposit the Acquisition Amount for Equipment described in the Schedule with the Acquisition Fund Custodian. (d) This Agreement is not a commitment by Lessor to enter into any Lease not currently in existence, and nothing in this Agreement shall be construed to impose any obligation upon Lessor to enter into any proposed Lease, it being understood that whether Lessor enters into any proposed Lease shall be a decision solely within Lessor's discretion. (e) Lessee will cooperate with Lessor in Lessor's review of any proposed Lease. Without limiting the foregoing, Lessee will provide Lessor with any documentation or information Lessor may request in connection with Lessor's review of any proposed Lease. Such documentation may include, without limitation, documentation concerning the Equipment and its contemplated use and location and documentation or information concerning the financial status of Lessee and other matters related to Lessee. ARTICLE IV Section 4.01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the dates and in such amounts as provided in each Lease. Lessee shall pay Lessor a charge on any Rental Payment not paid on the date such payment is due at the rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less, from such date. Lessee shall not permit the federal government to guarantee any Rental Payments under any Lease. Rental Payments consist of principal and interest payments as more fully detailed on each #765674vl (BAPCGCA Abatement Lease Template) 7 © Schedule, the interest on which begins to accrue as of the Commencement Date for each such Schedule. Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the Balance of each Rental Payment is paid as, and represents payment of, principal. Each Lease shall set forth the principal and interest components of each Rental Payment payable thereunder during the Lease Term. Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments under each Lease shall constitute a current expense of Lessee payable solely from its general fund or other funds that are legally available for that purpose and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein or in a Lease constitute a pledge of the general tax revenues, funds or moneys of Lessee. Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in each Lease shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, after it has been accepted by lessee, any defects, malfunctions, breakdowns or infirmities in the equipment or any accident, condemnation or unforeseen circumstances. Lessee's obligations to make Rental Payments or pay other amounts hereunder shall not be abated on account of obsolescence or failure of the Equipment to perform as desired. Section 4.05. Tax Covenant. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes, nor will it omit to take or cause to be taken, in timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for federal income tax purposes. Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component shall be at a Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for federal income tax purposes, and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate identified in the related Lease. For purposes of this Section, "Event of Taxability" means a determination that the interest component is includible for federal income tax purposes in the gross income of the owner thereof due to Lessee's action or failure to take any action. Section 4.07. Mandatory Prepayment. If the Lease Proceeds are deposited into an Acquisition Fund, any funds remaining in the Acquisition Fund on or after the Acquisition O Period and not applied to Equipment Costs, shall be applied, in Lessor's discretion based upon the amount remaining in such Fund, on the next Rental Payment date to either: (i) all or a portion #765674vl (BAPCC/CA Abatemem Lease Template) 8 i ® of the next Rental Payment and if such amount is in excess of the next Rental Payment then, any remaining balance shall be applied to all or a portion of the next succeeding Rental Payments until fully applied; or (ii) as prepayment to the remaining principal balance owing under the Schedule in the inverse order of maturity. ARTICLE V Section 5.01. Delivery, Installation and Acceptance of Equipment. (a) . Lessee shall order the Equipment, cause the Equipment to be delivered and installed at the location specified in the Leases and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. When the Equipment listed in any Lease has been delivered and installed, Lessee shall promptly accept such Equipment and evidence said j acceptance by executing and delivering to Lessor an acceptance certificate in the form attached i hereto as Exhibit E. (b) Lessee shall deliver to Lessor original invoices and bills of sale (if title to such Equipment has passed to Lessee) relating to each item of Equipment accepted by Lessee. With respect to Equipment not purchased through an Acquisition Fund, Lessor shall, upon receipt of an Acceptance Certificate from Lessee, prepare a Schedule of Property and Rental Payment Schedule in the forms attached hereto as Exhibits B-1 and B-2. Lessee shall execute and deliver such Schedules to Lessor within 5 business days of receipt. i Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default under the related Lease, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee's quiet use and enjoyment of the Equipment during the Lease Tern. Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be relocated from the base location specified for it in the Lease on which such item is listed without Lessor's consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property of Lessee for the purpose of inspecting the Equipment. Section 5.04. Use and Maintenance of the Equipment. Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by the related Lease. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body, provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest (including the reversionary interest) of Lessor in and to the Equipment or its interest or rights under the Lease. I Lessee agrees that it will maintain, preserve, and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to rectify #765674v1 (BAPCC/CA Abatement Lease Template) 9 ! © the Equipment as eligible for manufacturer's maintenance upon the return of the Equipment to Lessor as provided for herein. Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the interest of Lessor therein. ARTICLE VI Section 6.01. Title to the Equipment. During each Lease Term, and so long as Lessee is not in default under Article XII hereof, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions of the applicable Lease. Lessee shall at all times protect and i defend, at its own cost and expense, its title in and to the Equipment from and against all claims, i liens, and legal processes of its creditors, and keep all Equipment free and clear of all such claims, liens, and processes. Upon the occurrence of an Event of Default or upon termination of a Lease pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall pass to Lessor, and Lessee shall have no further interest therein. In addition,upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such i documents as Lessor may request to evidence the passage of such legal title to Lessor and the j termination of Lessee's interest therein, and upon request by Lessor shall deliver possession of C the Equipment to Lessor in accordance with Section 12.02. Upon purchase of the Equipment under a Lease by Lessee pursuant to Section 10.0 1, Lessor's security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may request to evidence the termination of Lessor's security interest in the Equipment subject to the related Lease. . Section 6.02. Security Interest. To secure the payment of all of Lesssee's obligations under each Lease, upon the execution of such Lease, Lessee grants to Lessor a security interest constituting a first lien on (a) the Equipment applicable to such Lease, (b) moneys and investments held from time to time in the Acquisition Fund and (c) any and all proceeds of any of the foregoing. Lessee agrees to execute and authorizes Lessor to file such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor's security interest ! in the Equipment,the Acquisition Fund and the proceeds thereof. Section 6.03. Personal Property. The Equipment is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it may be situated notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Upon the request of Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Equipment from any party having an interest in any such real estate or building. #765674vl (BAPCOCA Abatement Lease Template) 10 ARTICLE VII Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, liens, and encumbrances except those created by each Lease. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt j from all property taxes. If the use, possession or acquisition of any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with respect to such Equipment. Lessee shall pay all utility and other charges incurred in the use and maintenance of the Equipment. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during each Lease Term. Section 7.02. Insurance. Lessee covenants that it is an authorized self-insured public entity for purposes of general liability, automobile liability, worker's compensation and property coverage including but not limited to rental interruption coverage in an amount which shall cover Rental Pavments for no less than 24 months in the event Lessee exercises it rights to abate any Rental Payments or portions thereof pursuant to Section 3.03 of the Agreement and warrants that through its program of self-insurance, it has adequate coverage or resources to protect against liabilities arising out of the terms, conditions and obligations of this Agreement. Lessee shall famish to Lessor evidence of such self-insurance coverage through each Lease Term. Lessee shall not cancel or modify such self-insurance coverage in anyway that would affect the interests of Lessor without first giving written notice thereof to Lessor at least 30 days in advance of such cancelled or modification. Section 7.03 Risk of Loss. Subject to Section 3.03, whether or not covered by insurance of self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any person or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Lease. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest receive) arising out of or as s result of(a) entering into of this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, conditions, purchase, delivery, acceptance, rejection, storage or return of any item the Equipment, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee in connection with a Lease or any material misrepresentation provided by Lessee in connection with a Lease. The provisions of this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under all Leases or the termination of the Lease Term under Lease for © any reason. #765674v1 (BAPCC/CA Abatement Lease Template) I I A © Section 7.04. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order, Lessor may,but shall be under no obligation to,maintain and repair the Equipment and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest thereon from the due date until paid at a rate equal to the Contract Rate plus 5% per annum or the maximum amount permitted by law, whichever is less.. ARTICLE Vile Section 8.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase Price as provided in the related Lease, if, prior to the termination of the applicable Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment. Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. If Lessee elects to replace any item of the Equipment (the "Replaced Equipment") pursuant to this Section,the replacement equipment (the "Replacement Equipment") shall be of similar type, utility and condition to the Replaced Equipment and shall be of equal or greater value than the Replaced Equipment. Lessor shall receive a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, liens, security interests and encumbrances, excepting only those liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor's security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute "Equipment" for purposes of this Agreement and the related Lease. Lessee shall complete the documentation of Replacement Equipment on or before the next Rent Payment date after the occurrence of a casualty event, or be required to exercise the Purchase Option with respect to the damaged equipment. For purposes of this Article, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys' fees, incurred in the collection thereof. Section 8.02 Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in © full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or 4765674v 1 (BAPCC/CA Abatement Lease Tamplate) 12 improvement and pay any costs thereof in excess of the amount of the Net Proceeds,or(b) pay or pcause to be paid to Lessor the amount of the then applicable Purchase Price for the Equipment, and, upon such payment, the applicable Lease Term shall terminate and Lessor's interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after purchasing such Equipment and such other Equipment shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV. ARTICLE IX i Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee's acquisition of the Equipment shall be on an"as is"basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, any Lease, the Equipment or the existence, furnishing, functioning or Lessee's use of any item, product or service provided for in this Agreement Lease or any Lease. Section 9.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attomey-in-fact during each Lease Term, so long as Lessee shall not be in default under the related Lease, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against Vendor. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor with respect to any Lease, including the right to receive full and timely payments under a Lease. Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability Ty of s u ch warranties anties by Lessor of th e Equipment. ARTICLE X Section 10.01. Purchase Option. Lessee shall have the option to purchase all of the Equipment listed in a Lease, upon giving written notice to Lessor at least 30, but not more than 120, days before the date of purchase, at the following times and upon the following terms: (a) From and after the date specified in the related Schedule (the "Purchase Option Commencement Date"), on the Rental Payment dates specified in each Lease, upon payment in full of the Rental Payments then due under such Lease plus the then applicable Purchase Price, which may include a prepayment premium on the unpaid balance as set forth in the applicable Schedule; or ® (b) In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment listed in a Lease, on the day specified in Lessee's notice to #765674vl (BAPMCA Abatement Lease Template) 13 Lessor of its exercise of the purchase option upon payment in full to Lessor of the Rental © Payments then due under such Lease plus the then applicable Purchase Price; or (c) Upon the expiration of the Lease Term, upon payment in full of all Rental Payments then due and all other amounts then owing under the Lease, and the payment of$1.00 to Lessor. After payment of the applicable Purchase Price, Lessee will own the related Equipment, and Lessor's right, title and interests in and to such Equipment will be transferred and terminated in accordance with Section 6.01. ARTICLE XI Section 11.01. Assignment by Lessor. (a) Lessor's right, title and interest in and to Rental Payments and any other amounts payable by Lessee under any and all of the Leases, its security interest in the Equipment subject to each such Lease, and all proceeds therefrom may be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor, without the necessity of obtaining the consent of Lessee;provided, that any such assignment, transfer or conveyance to a trustee for the benefit of owners of certificates of participation shall be made in a manner that conforms to any applicable State law. Nothing in this Section 11.01 shall be construed, however, to prevent Lessor from executing any such assignment, transfer or conveyance that does not involve funding through the use of certificates of participation within the meaning of applicable State law, including any such assignment, transfer or conveyance as part of a multiple asset pool to a partnership or trust;provided such certificates are sold only on a private placement basis (and not pursuant to any "public offering") to a purchaser(s) who represent that (i) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment, (ii) such purchaser understands neither the Lease nor certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an "accredited investor"within the meaning of Regulations D under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Rule 144A, and I(iv) it is the intention of such purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933; provided further, that in any event, Lessee shall not be required to make Rental Payments, to send notices or to otherwise deal with respect to matters arising under a Lease with or to more than one individual on entity. (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 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, trust certificates or partnership interests with respect to the Rental Payment payable under a Lease, it shall thereafter be sufficient that Lessee receives notices of the name and address of the bank or trust company as trustree or paying agent. During each 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 Sectopm 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make 5765674vt (BAPCC/CA Abatement Lease Template) 14 i i all payments to the assignee or assignees designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor's security interest in and to the Equipment listed in a particular Lease and all rights in, to and under the Lease related to such Equipment. The option granted in this Section may be separately exercised from time to time with respect to the Equipment listed in each Lease, but such option does not permit the assignment of less than all of Lessor's interests in the Equipment listed in a single Lease. (c) If Lessor notifies Lessee of its intent to assign the Lease,Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit F attached to this Lease 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 any Lease or any portion of the Equipment may be assigned or encum- bered by Lessee for any reason. ARTICLE XII Section 12.01. Events ofDefault Defined. Any of the following events shall constitute an "Event ofDefault"under a Lease: © (a) Failure by Lessee to pay any Rental Payment or other payment required to be paid under any Lease at the time specified herein; (b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subparagraph (a) above, for a period of 30 days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected; (c) Any statement, representation or warranty made by Lessee in or pursuant to any Lease or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement with Bank of America, N.A. and its affiliates for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor under which there is outstanding, owing or committed an aggregate amount of a least 10% of Lessee's aggregate current long- and short-term indebtedness, if such default consists of(i) the failure to pay any indebtedness when due or (ii) the failure to perform any other obligation thereunder and gives the holder of the indebtedness the right to accelerate Cthe indebtedness; N765674v] (BAPCGCA Abatement Lease Template) 15 (e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, © custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii)be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy,reorganization or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator or 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 30 consecutive days. Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps: (a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee pursuant to such Lease and other amounts payable by Lessee under such Lease to the end of the then current Original Term or Renewal Term to be due; (b) With or without terminating the Lease Term under such Lease, Lessor may enter the premises where the Equipment listed in such Lease 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 hold Lessee liable, but solely from legally available funds, for the difference between (i)the Rental Payments payable by Lessee pursuant to such Lease and other amounts related to such Lease or the Equipment listed therein 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 under such Lease, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer's and attorney's fees), subject, however, to the provisions of Section 3.03. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities under any other Lease or the Equipment listed therein; (c) Lessor may take whatever action at law or in equity may appear necessary or desirable to enforce its rights under such Lease or as a secured party in any or all of the Equipment subject to such Lease; and (d) by action pursuant to the California Code of Civil Procedure, or as otherwise provided by law, obtain the issuance of a writ of mandamus enforcing, for the entire balance of the remaining Lease Term, the duty of Lessee to appropriate and take all other administrative steps necessary for the payment of rents, and other amounts due hereunder. �/ 4765674vl (BAPCC/CA Abatement Lease Template) 16 Section 12.03. No Remedy Exclusive. No remedy herein conferred 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 under a Lease 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 it shall not be necessary to give any { notice other than such notice as may be required in this Article. Section 11.04. Application of Moneys. Any net proceeds from the exercise of any remedy under this Agreement, including the application specified in Section 12.02(b)(ii) (after deducting all expenses of Lessor in exercising such remedies including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing Equipment and all brokerage, auctioneer's or attorney's fees), shall be applied as follows: I (a) If such remedy is exercised solely with respect to a single Lease, Equipment listed in such Lease or rights thereunder, then to amounts due pursuant to such Lease and other amounts related to such Lease or such Equipment. (b) If such remedy is exercised with respect to more than one Lease, Equipment listed in more than one Lease or rights under more than one Lease, then to amounts due pursuant to such Leases pro rata. ARTICLE XIII Section 13.01. Notices. All notices, certificates or other communications under any Lease 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. Each Lease 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 any Lease 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 and each Lease may only be amended by Lessor and Lessee in writing. Section 13.05. Execution in Counterparts. This Agreement and each Lease 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. t1765674vl (BAPCC/CA Abatement Lease Template) 17 O Section 13.06. Applicable Law. This Agreement and each Lease shall be governed by and construed in accordance with the laws of the State. Section 13.07. Captions. The captions or headings in this Agreement and in each Lease are for convenience only and in no way define, limit or describe the scope or intent of any Provisions or sections of this Agreement or any Lease. IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as of the date first above written. LESSOR: - - LESSEE: Bank of America, National Association City of San Bernardino 555 California Street, 4th Floor 300 North D Street San Francisco, California 94104 San Bernardino,CA 92418 By By Title Title (Seal) Attest: By OTitle #765674vl (BAPCC/CA Abatement Lease Template) 18 Exhibit A ACQUISITION FUND AND ACCOUNT CONTROL AGREEMENT This Acquisition Fund and Account Control Agreement (this "Agreement'), dated as of May 10, 2010, by and among Bank of America, National Association, a national banking association (hereinafter referred to as "Lessor"), City of San Bernardino, a political subdivision of the state of California(hereinafter referred to as "Lessee") and Deutsche Bank National Trust Company, a national trust company (hereinafter referred to as "Acquisition Fund Custodian"). Reference is made to that certain Master Equipment Lease/Purchase Agreement No. 2114500-06000 dated as of May 10, 2010, 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 Equipment Cost of the Equipment (an amount not to exceed $3,597,720.89) be deposited into an escrow 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. The parties agree as follows: 1. Creation of Acquisition Fund. (a) There is hereby created a special trust fund to be known as the "City of San Bernardino #2114500-06000 (Schedule No. 2) Acquisition Fund" (the "Acquisition Fund") to be held in trust by the Acquisition Fund Custodian 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) The Acquisition Fund Custodian shall invest and reinvest moneys on deposit in the Acquisition Fund in Qualified Investments in accordance with written instructions received from Lessee. 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 Acquisition Fund Custodian for the reinvestment of any maturing investment. Accordingly,neither the Acquisition Fund Custodian 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 Acquisition Fund, and Lessee agrees to and does hereby release the Acquisition Fund Custodian and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Acquisition Fund shall become part of the Acquisition Fund, and gains and losses on the investment of the moneys on deposit in the Acquisition Fund shall be home by the Acquisition Fund. For purposes of this agreement, "Qualified Investments"means any investments which meet the requirements of [state law citation]. IN THE ABSENCE OF WRITTEN INSTRUCTIONS,THE ACQUISITION FUND CUSTODIAN IS HEREBY AUTHORIZED AND DIRECTED TO INVEST AND RE-INVEST ALL FUNDS ON HAND IN FDIC INSURED CERTIFICATES OF DEPOSITS(4)WEEKS MATURITY AND WITH AN AUTOMATIC FOUR(4)WEEKS ROLL-OVER UNTIL OTHERWISE DIRECTED. k765408vl (BAPCC/AFA General) 1 (c) Unless the Acquisition Fund is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Acquisition Fund shall be disbursed by the Acquisition Fund Custodian in payment of amounts described in Section 2 hereof upon receipt of written authorization(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Acquisition Fund 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 Acquisition Fund after May 10, 2011 (the "Acquisition Period") shall be applied as provided in Section 4 hereof. (d) The Acquisition Fund shall be terminated at the earliest of (i) the final distribution of amounts in the Acquisition Fund or (ii) written notice given by Lessor of the occurrence of a default or termination of the Lease due to non-appropriation. (e) The Acquisition Fund Custodian 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 Acquisition Fund Custodian 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, authority, 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 Acquisition Fund Custodian,and for the disposition of the same in accordance herewith. (f) Unless the Acquisition Fund Custodian is guilty of gross negligence or O willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Acquisition Fund Custodian 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 Acquisition Fund Custodian under this agreement; and in connection therewith, does to the extent permitted by law indemnify the Acquisition Fund Custodian 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 Acquisition Fund Custodian hereunder, the Acquisition Fund Custodian may, but shall not be required to, file an appropriate civil action to resolve the disagreement. The Acquisition Fund Custodian shall be reimbursed by Lessee for all costs, including reasonable attorneys' fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under the Lease until a final judgment in such action is received. (h) The Acquisition Fund Custodian may consult with counsel of its own choice and shall have full and complete authorization and protection with the opinion of such counsel. The Acquisition Fund Custodian 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. #765408v1 (BAPCCIAFA General) 2 (i) Lessee shall reimburse the Acquisition Fund Custodian for all reasonable costs and expenses, including those of the Acquisition Fund Custodian's attorneys, agents and employees incurred for extra-ordinary administration of the Acquisition Fund and the performance of the Acquisition Fund Custodian's powers and duties hereunder in connection with any Event of Default under the Lease, or in connection with any dispute between Lessor and Lessee concerning the Acquisition Fund. 2. Acquisition of Property. (a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, of cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Acquisition Fund. 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 th ereof. (b) Authorized Acquisition Fund Disbursements. Disbursements from the Acquisition Fund 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) the cost of acquiring the Equipment. (c) Requisition Procedure. No disbursement from the Acquisition Fund shall be made unless and until Lessor has approved such requisition. Prior to disbursement from the Acquisition Fund there shall be filed with the Acquisition Fund Custodian 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. Each such requisition shall be signed by an authorized representative of Lessee (an "Authorized Representative") and by Lessor, and shall be subject to the following: 1. Delivery to Lessor of a certificate of Lessee to the effect that: (i) an obligation in the stated amount has been incurred by Lessee, and that the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid; (ii) the 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; (iii) such requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date of such certificate, entitled to retain; and (iv) the Equipment is insured in accordance with the Lease. 2. Delivery to Lessor of an Acceptance Certificate executed by Lessee, together with any Purchase Agreement Assignment or bill of sale and © invoice therefor as required by Section 3.04 of the Lease; 4765408v1 (BAPCGAFA General) 3 3. The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment; 4. There shall exist no Event of Default (nor any event which, with notice or lapse of time or both, would become an Event of Default); and 5. No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. 3 D aos t to Acquisition a und. rr cr sa.:sacLion f re cor',.,�_,, specified in , u , Section 3.04 of the Lease, Lessor will cause the Lease Proceeds to be deposited in the Acquisition Fund. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Acquisition Fund. -- 4. Excessive Acquisition Fund. Following the final disbursement from the Acquisition Fund at the end of the Acquisition Period, or termination of the Acquisition Fund as otherwise provided herein, the Acquisition Fund Custodian shall transfer any remainder from the Acquisition Fund to Lessor for application to amounts owed under the Lease in accordance with Section 4.07 of the Lease. 5. Security Interest. The Acquisition Fund Custodian and Lessee acknowledge and agree that the Acquisition Fund and all proceeds thereof are being held by Acquisition Fund Custodian for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Acquisition Fund, and all proceeds thereof, and all investments made with any amounts in the Acquisition Fund. If the Acquisition Fund, or any part thereof, is converted to investments as set forth in this agreement, such investments shall be made in the name of Acquisition Fund Custodian and the Acquisition Fund Custodian 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. 6. Control of Acquisition Account. In order to perfect Lessor's security interest by means of control in (i) the Acquisition Fund established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Acquisition Fund, (iii) all of Lessee's rights in respect of the Acquisition Fund, 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 Acquisition Fund Custodian further agree as follows: (a) All terms used in this Section 6 which are defined in the Commercial Code of the state of California ("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) Acquisition Fund Custodian 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. H7654o6v1 (BAPCC/AFA General) 4 (c) Acquisition Fund Custodian hereby represents and warrants (a) that the records of Acquisition Fund Custodian show that Lessee is the sole owner of the Collateral, �y (b)that Acquisition Fund Custodian 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 (c) that Acquisition Fund Custodian is not presently obligated to accept any entitlement order from any person with respect to the Collateral., except for entitlement orders that Acquisition Fund Custodian is obligated to accept from Lessor under this Agreement and entitlement orders that Acquisition Fund Custodian, subject to the provisions of paragraph(e) below,is obligated to accept from Lessee. (d) Without the prior written consent of Lessor, Acquisition Fund Custodian will not enter into any agreement by which Acquisition Fund Custodian 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. Acquisition Fund Custodian shall promptly notify Lessor if any person requests Acquisition Fund Custodian 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, Acquisition Fund Custodian may allow Lessee to effect sales, trades, transfers and exchanges of Collateral within the Acquisition Fund, but will not, without the prior written consent of Lessor, allow Lessee to withdraw any Collateral from the Acquisition Fund. Acquisition Fund Custodian acknowledges that Lessor reserves the right, by delivery of written notice to Acquisition Fund Custodian, 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 Acquisition Fund. Further, Acquisition Fund Custodian hereby agrees to comply with any and all written instructions delivered by Lessor to Acquisition Fund Custodian (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any 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 existence of any defaults under such agreements, or any other matter. (f) Lessee hereby irrevocably authorizes Acquisition Fund Custodian to comply with all instructions and entitlement orders delivered by Lessor to Acquisition Fund Custodian. (g) Acquisition Fund Custodian 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 Acquisition Fund Custodian 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) Acquisition Fund Custodian and Lessee hereby agree that any property held in the Acquisition Fund shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Acquisition Fund oCustodian may be a party. #765408v1 (BAPCC/AFA General) 5 (i) Acquisition Fund Custodian is hereby authorized and instructed, and hereby agrees,to send to Lessor at its address set forth in Section 7 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Acquisition Fund statements or reports issued or sent to Lessee with respect to the Acquisition Fund. 7. Miscellaneous. Capitalized terns 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 instrument 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, fast 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: If to Lessor: Bank of America, National Association 555 California Street, 4th Floor Mail Code: CA5-705-04-01 San Francisco, CA 94104 Attn: Contract Administration Fax: (415) 765-7373 If to Lessee: City of San Bernardino © 300 North D Street San Bernardino,CA 92418 Attn: Mr. Michael Gomez Fax: (909)384-5043 If to Acquisition Fund Custodian: Deutsche Bank National Trust Company 101 California Street, 46 Floor San Francisco, CA 94111 Attn: Raafat Albert Sarkis Phone:(415) 617-2801 Fax: (415) 617-4270 4765408vl (BAPCC/AFA General) 6 In Witness Whereof, the parties have executed this Acquisition Fund and Account '© Control Agreement as of the date first above written. Bank of America,National Association, City of San Bernardino, as Lessor as Lessee By: By: Title: Title: Deutsche Bank National Trust Company As Acquisition Fund Custodian By: Title: By: Title: 4765408v1 (BAPCC/AFA General) 7 Schedule 1 SCHEDULE 2 FORM OF DISBURSEMENT REQUEST Re: Master Equipment Lease/Purchase Agreement No. 2114500-06000, dated as of May 10, 2010,by and between Bank of America,National Association, as Lessor and City of San Bernardino, as Lessee (the"Lease") In accordance with the terms of the Acquisition Fund and Account Control Agreement, dated as of May 10, 2010, (the "Acquisition Fund and Account Control Agreement") by and among Bank of America, National Association ("Lessor"), City of San Bernardino ("Lessee") and Deutsche Bank National Trust Company (the "Acquisition Fund Custodian"), the undersigned hereby requests the Acquisition Fund Custodian pay the following persons the following amounts from the Acquisition Fund created under the Acquisition Fund and Account Control Agreement(the"Acquisition Fund") for the following purposes. Payee's Name and Address Invoice Numbcr Dollar Amount Purpose The undersigned hereby certifies as follows: (i) An obligation in the stated amount has been incurred by Lessee, and the same is a proper charge against the Acquisition Fund for costs relating to the Equipment identified in the Lease, and has not been paid. Attached hereto is the original invoice with respect to such obligation. (ii) 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. (iii) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain. (iv) The Equipment is insured in accordance with the Lease. (v) 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. #765408v1 (BAPCC/AFA Ganaap 1 (vi) The disbursement shall occur during the Acquisition Period set forth in the Schedule applicable to such Equipment. (vii) No material adverse change in Lessee's or any guarantor's financial condition shall have occurred since the date of the Lease. Dated: CITY OF SAN BERNARDINO By: Authorized Representative Disbursement of funds from the Acquisition Fund in accordance with the foregoing Disbursement Request hereby is authorized © BANK OF AMERICA,NATIONAL ASSOCIATION as Lessor under the Lease By: Title: Assistant Vice President K765408vl (BAPCC/AFA General) 2 QEXHIBIT A-1 RENTAL PAYMENT SCHEDULE Rental Rental Interest Payment Payment Portion Principal Purchase Date Amount 3.7800% Portion Price 5/10/2010 - 3,597,720.89 11/10/2010 294,883.05 67,996.92 226,886.13 3,370,834.76 5/1012011 294,883.05 63,708.78 231,174.27 3,139,660.49 11/10/2011 294,863.05 59,339.58 235,543.47 2,904,117.02 5/1012012 294,883.05 54,887.81 239,995.24 2,664,121.78 11/10/2012 294,883.05 50,351.90 244,531.15 2,419,590.64 5/10/2013 294,883.05 45,730.26 249,152.79 2,170,437.85 11/1012013 294,883.05 41,021.28 253,861.78 1,916,576.07 5/10/2014 294,883.05 36,223.29 258,659.76 1,657,916.31 11/10/2014 294,883.05 31,334.62 263,548.43 1,394,367.88 5/10/2015 294,883.05 26,353.55 268,529.50 1,125,838.38 11/10/2015 294,883.05 21,278.35 273,604.71 852,233.67 5/10/2016 294,883.05 16,107.22 278,775.83 573,457.84 11/10/2016 294,883.05 10,838.35 284,044.70 289,413.14 5/10/2017 294,883.05 5,469.91 289,413.14 (0.00) v TOTAL 4128 362.71 530 641.82 3,597,720.89 Prepayment Premium for purposes of Section 10.01 (a)is 0%. For purposes of this Lease, "Taxable Rate", with respect to the interest component of Rental Payments, means an annual rate of interest equal to 5.5048% LESSEE: City of San Bernardino By Title G CERTIFICATE The undersigned, a duly elected and acting Secretary of ("Lessee's certifies as follows: A. The following listed persons are duly elected and acting officials of Lessee (the "Officials") in the capacity set forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof, B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement No. 2114500-06000, dated as of May 10, 2010, and the Schedule(s) thereunder and all future Schedule(s) (the "Agreements') by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By Title (The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) Exhibit A • 1 SCHEDULE OF PROPERTY No. 2 C Re: Master Equipment Lease/Purchase Agreement No. 2114500-06000 dated as of May 10,2010,between Bank of America,National Association, as Lessor, and City of San Bernardino, as Lessee 1. Defined Terms. All terms used herein have the meanings ascribed to them in the above-referenced Master Equipment Lease/Purchase Agreement (the "Master Equ'-- ert Lease 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Ten (10) Autocar Refuse Truck Chassis and Body One(1) Schwarze M-6000 Sterling Chassis Street Sweeper 3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-1. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian,whichever is earlier. (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule (including the Rental Payment shown on the same line in the Rental Payment Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. O #765674vl (BAPCC/CA Abat=mt i, se T=plate) A-1 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $3,597,720.89, of which $0.00 is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end on May 10, 2011. 8. Lease Term. The Lease Tenn shall consist of 84 months, ending on May 10, 2017. 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease,the Purchase Option Commencement Date is May 10, 2017- JO. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price,which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. 11. Registration. Any Equipment that is a motor vehicle is to be registered and titled as follows: © (a) Reeistered Owner: City of San Bernardino (b) Lienholden Bank of America,N. A. 2059 Northlake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #t765674vl (BAPCCICA Abatement Lease Template) A-2 Dated: May 10,2010 LESSOR: LESSEE: Bank of America,National Association City of San Bernardino 555 California Street,4th Floor 300 North D Street San Francisco, California 94104 San Bernardino, CA 92418 By By Title Title (Seal) Attest: By Title #765674v1 (BAPMCA Abatement Lease Template) A-3 EXHIBIT A-1 RENTAL PAYMENT SCHEDULE Rental Rental Interest Principal Purchase Payment Payment Portion Portion Price Date Amount 1 ...M. Prepayment Premium for purposes of Section 10.01(a)is 0%. For purposes of this Lease, "Taxable Rate, " with respect to the interest component of Rental Payments,means an annual rate of interest equal to %. [ LESSEE: By DO NOT EXECUTE Title i 4765674v1 (BAPCC/CA Abatement Lease Tanplate) A-1-1 Exhibit B • 1 and E x h 11 b Ell to B - 2 EXMIT A SCHEDULE OF PROPERTY NO. Re: Master Equipment Lease/Purchase Agreement, dated as of ,between Bank of America,National Association, as Lessor, and , as Lessee I. Defined Terms. All tens used herein have the meanings ascribed to then; in tie above-referenced Master Equipment Lease/Purchase Agreement (the "Master Equipment Lease'). 2. Equipment. The following items of Equipment are hereby included under this Schedule of the Master Equipment Lease. Quantity Description Serial No. Model No. Location O3. Payment Schedule. (a) Rental Payments. The Rental Payments shall be in such amounts and payable on such dates as set forth in the Rental Payment Schedule attached to this Schedule as Exhibit A-1. Rental Payments shall commence on the date on which the Equipment listed in this Schedule is accepted by Lessee, as indicated in an Acceptance Certificate substantially in the form of Exhibit B to the Master Equipment Lease or the date on which sufficient moneys to purchase the Equipment are deposited for that purpose with an Acquisition Fund Custodian, whichever is earlier. j (b) Purchase Price Schedule. The Purchase Price on each Rental Payment date for the Term Estate in the Equipment listed in this Schedule shall be the amount set forth for such Rental Payment date in the "Purchase Price" column of the Rental Payment Schedule attached to this Schedule. The Purchase Price is in addition to all Rental Payments then due under this Schedule(including the Rental Payment shown on the same line in the Rental Payment d Schedule). 4. Representations, Warranties and Covenants. Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Master Equipment Lease are true and correct as though made on the date of commencement of Rental Payments on this Schedule. Lessee further represents and warrants that no material adverse © change in Lessee's financial condition has occurred since the date of the Master Equipment Lease. #765674v1 (BAPCC/CA Abatement Lease Template) A-1 5. The Lease. The terms and provisions of the Master Equipment Lease (other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. 6. Lease Proceeds. The Lease Proceeds which Lessor shall pay to the Acquisition Fund Custodian in connection with this Schedule is $ , of which $ is for deposit to the Expense Fund and the balance is for deposit to the Acquisition Fund. 7. Acquisition Period. The Acquisition Period applicable to this Schedule shall end on December i6, 2010. 8. Lease Term. The Lease Term shall consist of _ months, ending on 9. Purchase Option Commencement Date. For purposes of Section 10.01 of the Lease, the Purchase Option Commencement Date is 10. Pre-Payment Premium. On any Rental Payment Date after the first half of the lease term, Lessee shall have the option to purchase all Equipment under a Schedule upon payment in full of the Rental Payments then due under such Schedule plus the then applicable Purchase Price, which will not include a prepayment premium on the unpaid balance as set forth in the applicable Schedule. 11. Registration. Any Equipment that is a motor vehicle is to be registered and titled © as follows: (a) Reeistered Owner: City of San Bernardino (b) Lienholder: Bank of America,N. A. 2059 Northlake Parkway Mail Code GA3-003-04-01 Tucker, GA 30084-5399 Lessee shall be responsible for the correct titling of all Equipment leased hereunder. Lessee will cause the original Certificates of Title to be delivered to Lessor for retention in Lessor's files throughout the term of the Lease. #765674v1 (BAPCC/CA Abatement Lease Template) A-2 © Dated: LESSOR: LESSEE: Bank of America,National Association 555 California Street,4th Floor San Francisco, California 94104 By By DO NOT EXECUTE Title Title (Seal) Attest: By Title Counterpart No. of manually executed and serially numbered counterparts. To the extent that this Lease constitutes chattel paper (as defined in the Uniform Commercial Code), no security interest herein may be created through the transfer or possession of any © Counterpart other than Counterpart No. 1. #765674vl (BAFCC/CA Abatement Lease Template) A-3 © EXHIBIT A-1 RENTAL PAYMENT SCHEDULE Rental Rental Merest Principal Purchase Payment Payment Portion Portion Price Date Amount Prepayment Premium for purposes of Section 10.01(a) is 0%. For purposes of this Lease, "Taxable Rate, " with respect to the interest component of Rental Payments,means an annual rate of interest equal to %. QLESSEE: By DO NOT EXECUTE Title i1765674v1 (BAl'CC/C'AAhatemen(Leace T�"plate) A-1-1 Exhibit C EXHIBIT C C - CERTIFICATE The undersigned, a duly elected and acting Secretary of ("Lessee's certifies as follows: A. The following listed persons are duly elected and acting officials of Lessee (the "Officials') in the capacity set'forth opposite their respective names below and that the facsimile signatures are true and correct as of the date hereof, B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute and deliver the Master Equipment Lease/Purchase Agreement dated as of and the Sebedule(s) thereunder and all future Schedule(s) (the "Agreements") by and between Lessee and Bank of America, National Association and these Agreements are binding and authorized Agreements of Lessee, enforceable in all respects in accordance with their terms. Name of Official Title Signature Dated By DO NOT EXECUTE Title (The signer of this Certificate cannot be listed above as authorized to execute the Agreements.) V #765674vl (BAPCC/CA Abatement Lease Template) C-1 Exhibit D EXHMIT D OPINION OF COUNSEL TO LESSEE Bank of America,National Association 555 California Street, 4th Floor San Francisco, California 94104 Re: Schedule of Property No. dated to Master Equipment Lease/Purchase Agreement, dated as of ,between Bank of America,National Association, as Lessor, and as Lessee Ladies and Gentlemen: As legal counsel to ("Lessee'), I have examined (a)an executed counterpart of a certain Master Equipment Lease/Purchase Agreement, dated as of , and Exhibits thereto by and between Bank of America, National Association ("Lessor') and Lessee (the "Agreement'), [and] an executed counterpart of Schedule of Property No. ' dated , by and between Lessor and Lessee (the "Schedule', which, among other things, provides for the lease of certain property listed in the Schedule (the "Equipment'), [and an executed counterpart of that certain Acquisition Fund and Account Control Agreement dated by and among Lessee, Lessor and the Custodian named therein (the "Acquisition Fund Agreement")] (b) an executed counterpart of the ordinances or resolutions of Lessee which, among other things, authorize Lessee to execute the Agreement and the Schedule and(c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Schedule and the terms and provisions of the Agreement incorporated therein by reference together with the Rental Payment Schedule attached to the Schedule are herein referred to collectively as the "Lease". [The Lease and the Acquisition Fund Agreement are referred to herein collectively as the "Lease Documents"]. Based on the foregoing,I am of the following opinions: 1. Lessee is a public body corporate and politic, duly organized and existing under the laws of the State, and [has a substantial amount of the following sovereign powers: (a)the power to tax, (b) the power of eminent domain, and (c)police power][is apolitical subdivision of a state within the meaning of Section 103(c) of the Intemal 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 Lease [Documents] and to perform its obligations under the Lease © [Documents]; #765674vl (BAPCC/CA Abatement lease Template) E-1 C 3. The Lease [Documents] has [have] been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Lease [Documents are] [is] a valid and binding obligation of Lessee enforceable in accordance with its [their]terns; 4. The authorization, approval, execution and delivery of the Lease [Documents] and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws,public bidding laws and all other applicable state or federal laws; and 5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Lease Documents or the interest of Lessor or its assigns, as the case maybe,in the Equipment thereunder. [6. The portion of rentals designated as and constituting interest paid by Lessee and received by Lessor is excluded from Lessor's gross income for federal income tax purposes under Section 103 of the Code and is exempt from State of personal income taxes; and such interest is not a specific item for purposes of the federal individual or corporate alternative minimum taxes.] All capitalized terms herein shall have the same meanings as in the Lease unless otherwise provided herein. Lessor and its successors and assigns, and any counsel rendering an opinion on the tax-exempt status of the interest components of the Rental Payments, are entitled Cto rely on this opinion. Printed Name Signature DO NOT EXECUTE Firm Dated Address Telephone No. ° #337849v4 (CA Abatement Lease Template) E-2 1 Exhibit E EXHIBIT B ACCEPTANCE CERTIFICATE Bank of America,National Association 555 California Street,4th Floor San Francisco, California 94104 Re: Schedule of Property No. dated to Master Equipment Lease/Purchase Agreement, dated as of between Bank of America, National Association, as Lessor, and as Lessee. Ladies and Gentlemen: In accordance with the Master Equipment Lease/Purchase Agreement(the "Agreement the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows: 1. All of the Equipment (as such term is defined in the Agreement) listed in the above-referenced Schedule of Property (the "Schedule") has been delivered, installed and accepted on the date hereof. 2. Lessee has conducted such inspection and/or testing of the Equipment listed in the Schedule as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement. 4. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default (as defined in the Agreement) exists at the date hereof. i Date: LESSEE: By DO NOT EXECUTE Title (Seal) V #765674vl (BAPCOCA Abatement Lease Template) B-1 a 1 VENDOR SERVICE AGREEMENT © 2 This Vendor Service Agreement is entered into this 3rd day of May 2010, by and 3 between Fairview Ford ("VENDOR") and the City of San Bernardino ("CITY" or "San 4 5 Bernardino'). 6 WITNESSETH: 7 8 WHEREAS,the Mayor and Common Council have determined that it is in the best 9 interest of the CITY to contract for the purchase of ten (10) 2010 AUTOCAR ACX64 chassis 10 and refuse bodies with LNG fuel conversion; and 11 WHEREAS, the City of San Bernardino has determined that vendor possesses the 12 professional skills and ability to provide said services for the City; 13 NOW, THEREFORE,the parties hereto agree as follows: 14 15 I. SCOPE OF SERVICES. 16 For the remuneration stipulated in paragraph 2, San Bernardino hereby engages the 17 services of VENDOR to provide those products and services as set forth in its proposal dated 18 January 19, 2010, attached hereto, marked Attachment "1" and incorporated herein by this 19 reference as fully as though set forth at length. 20 2. COMPENSATION AND EXPENSES. 21 a. For the services delineated above, the CITY, upon presentation of an invoice, shall 22 23 pay the VENDOR up to the amount of$3,279,956.47 to.provide and perform those 24 products and services described in Section 1 above. 25 b. No other expenditures made by VENDOR shall be reimbursed by CITY. 26 3. TERM. © 27 The term of this agreement shall be for a period of one (1)year. 28 1 I This Agreement maybe terminated at any time by thirty (30) days prior written notice 2 by either parry. The terms of this Agreement shall remain in force unless amended by written 3 agreement of the parties executed on or before date of expiration of current term of the 4 agreement. 5 4. INDEMNITY. 6 Vendor agrees to and shall indemnify and hold the City, its elected officials, employees, 7 agents or representatives, free and harmless from all claims, actions, damages and liabilities of 8 9 any kind and nature arising from bodily injury, including death, or property damage, based or 10 asserted upon any or alleged act or omission of Vendor, its employees, agents, or 11 subcontractors, relating to or in any way connected with the accomplishment of the work or 12 performance of service under this Agreement, unless the bodily injury or property damage was 13 actually aused b the sole negligence of the Ci employees, agents or y y City, its elected officials, em 14 representatives. As part of the foregoing indemnity, Vendor agrees to protect and defend at its 15 16 own expense, including attorney's fees the City, its elected officials, employees, agents or 17 representatives from any and all legal actions based upon such actual or alleged acts or 18 omissions. Vendor hereby waives any and all rights to any types of express or implied 19 indemnity against the City, its elected officials, employees, agents or representatives, with 20 respect to third party claims against the Vendor relating to or in any way connected with the 21 accomplishment of the work or performance of services under this Agreement. 22 5. INSURANCE. 23 24 While not restricting or limiting the foregoing, during the term of this Agreement, 25 VENDOR shall maintain in effect policies of comprehensive public, general and automobile 26 liability insurance, in the amount of $1,000,000.00 combined single limit, and statutory C27 worker's compensation coverage, and shall file copies of said policies with the CITY'S Risk 28 I Manager prior to undertaking any work under this Agreement. CITY shall be set forth as an 2 additional named insured in each policy of insurance provided hereunder. The Certificate of 3 Insurance furnished to the CITY shall require the insurer to notify CITY of any change or 4 termination in the policy. Insurer shall give CITY 30 days notice prior to enactment and any 5 change or termination of policy. 6 6. NON-DISCRIMINATION. 7 8 In the performance of this Agreement and in the hiring and recruitment of employees, 9 VENDOR shall not engage in, nor permit its officers, employees or agents to engage in, 10 discrimination in employment of persons because of their race, religion, color, national origin, 11 ' ancestry, age, mental or physical disability, medical conditions, marital status, sexual gender or 12 sexual orientation, or any other status protected by law, except as permitted pursuant to Section 13 12940 of the California Government Code. 14 15 7. INDEPENDENT CONTRACTOR. 16 VENDOR shall perform work tasks provided by this Agreement,but for all intents and 17 purposes VENDOR shall be an independent contractor and not an agent or employee of the 18 CITY. VENDOR shall secure, at its expense, and be responsible for any and all payment of 19 Income Tax, Social Security, State Disability Insurance Compensation, Unemployment 20 Compensation, and other payroll deductions for VENDOR and its officers, agents, and 21 employees, and all business licenses, if any are required, in connection with the services to be 22 23 performed hereunder. 24 8. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS. 25 VENDOR warrants that it possesses or shall obtain, and maintain a business registration 26 certificate pursuant to Chapter 5 of the Municipal Code, and any other license, permits, �^` 27 �V 28 -3- 1 qualifications, insurance and approval of whatever nature that are legally required of VENDOR 2 to practice its business or profession. 3 9. NOTICES. 4 Any notices to be given pursuant to this Agreement shall be deposited with the United 5 States Postal Service, postage prepaid and addressed as follows: 6 TO THE CITY: Public Services Director 7 300 North"D" Street San Bernardino, CA 92418 8 Telephone: (909)384-5140 9 TO THE VENDOR: Fairview Ford Sales Inc. 10 808 West 2nd Street San Bernardino, CA 92412-5516 ii Telephone: (909) 386-0281 Attn: Todd Eff 12 13 10. ATTORNEYS' FEES 14 In the event that litigation is brought by any party in connection with this Agreement, 15 the prevailing party shall be entitled to recover from the opposing party all costs and expenses, 16 including reasonable attorneys' fees, incurred by the prevailing party in the exercise of any of 17 its rights or remedies hereunder or the enforcement of any of the terms, conditions or 18 provisions hereof. The costs, salary and expenses of the City Attorney and members of his 19 20 office in enforcing this Agreement on behalf of the CITY shall be considered as "attorneys' 21 fees" for the purposes of this paragraph. 22 11. ASSIGNMENT. 23 VENDOR shall not voluntarily or by operation of law assign, transfer, sublet or 24 encumber all or any part of the VENDOR's interest in this Agreement without CITY's prior 25 written consent. Any attempted assignment, transfer, subletting or encumbrance shall be void 26 and shall constitute a breach of this Agreement and cause for the termination of this C�'^� 27 28 -4- I Agreement. Regardless of CITY'S consent, no subletting or assignment shall release VENDOR 2 of VENDOR's obligation to perform all other obligations to be performed by VENDOR 3 hereunder for the term of this Agreement. 4 12. VENUE. 5 The parties hereto agree that all actions or proceedings arising in connection with this 6 Agreement shall be tried and litigated either in the State courts located in the County of San 7 8 Bernardino, State of California or the U.S. District Court for the Central District of California, 9 Riverside Division. The aforementioned choice of venue is intended by the parties to be the 10 mandatory and not permissive in nature. 11 13. GOVERNING LAW. 12 This Agreement shall be governed by the laws of the State of California. 13 14. SUCCESSORS AND ASSIGNS. 14 15 This Agreement shall be binding on and inure to the benefit of the parties to this 16 Agreement and their respective heirs,representatives, successors, and assigns. 17 15. HEADINGS. 18 The subject headings of the sections of this Agreement are included for the purposes of 19 convenience only and shall not affect the construction or the interpretation of any of its 20 provisions. 21 16. ENTIRE AGREEMENT; MODIFICATION. 22 23 This Agreement constitutes the entire agreement and the understanding between the 24 parties, and supercedes any prior agreements and understandings relating to the subject manner 25 of this Agreement. This Agreement may be modified or amended only by a written instrument 26 executed by all parties to this Agreement. C 27 28 5 1 VENDOR SERVICE AGREEMENT FAIRVIEW FORD SALES INC. `. 2 3 IN WITNESS THEREOF, the parties hereto have executed this Agreement on the day 4 and date set forth below. 5 Dated: , 2010 Fairview Ford Sales, Inc. 6 By: 7 8 9 Dated 12010 CITY OF SAN BERNARDINO 10 By: Charles E. McNeely, City Manager 11 Approved as to Form: 12 By: � '0�, 13 es F. Penman,City Attorney 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- Attachment "1" Fairview Ford Sales, Inc. P.O.Box 5516 SAN BERNARDINO,CALIF.92412 Telephone (909)994.9261 • • e January 19, 2010 City of San Bernardino Fleet Division 182 S. Sierra Way San Bernardino, CA. 92408 RE: Purchase of(10)Autocar Refuse Trucks Dear Mr.Johnson, He;e is the breakdatun for the above referenced purchase: 1 Roll Off @$207,297.00 each. $207,297.00 2 Front Loaders @ $256,388.00 each. 5512,676.00 7 Automizers @ $326,930.00 each. $2,288,510.00 Doc and Handling Fee $4500.00 TOTAL $3,008,483.00 Sales Tax(9%) $270,763.47 Fed Excise Tax EXEMPT DMV $500.00 Ca.Tire Fee $210.00 GRAND TOTAL $3,279,956.47 Thank you for this opportunity, Todd Eff 6 Commercial Fleet Manager Fairview Ford FwDONEOHNRON pip qd ByjMff DALTON OF SANBHRNARDINO QOraeid;QALCQ7W34 1 QRO¢N1mb :00011338 sllVcFGok 0111 M010 Quote Summary All{figures am in US dollars Canadian dealers require Canadian dollars RAW TOTAL &QI/IPF 333,830 ACX6/ SWGLERIGETRANDDRN CAB z15V ADDITIONALPDRCHASBD COYP.RAG a EPASURCHARGE 11 ADDPIIO,A KOEADIU3Ttfl V PACIORYCONTRACTMODn'1CATION 0 OUTSIUECORTRACTFRMGM 0 LATWANCELLA' M-As a ADDIDONA Sua BARD 11950 37manT Q OUANnT - 32fi.930 21RA510 TOTALF,QUPM3ENT R (0) TRA IN EAM TOTAL OTHRR CHARM V f� 0 FETAMOUNTTOTAL V V STATETAII/OMERFEBS Z2n,510 TOULQUOTE Deakr Sign Cuslomer Signamrc Dme Dae day,Iaanary 18,3010 pap 16 of 23 P[im levd:1A09042421110A pAaa6:3921 PM EST 1 p¢purd Hy lFR&Y DALTON PccmadF CITY OF SAN BN O INO Qw¢Id:QALH6TM Qwu:Number:000113M 0111=010 Ouote Summa7y All figures are in US dollars Canadian dealers requi=Canadian dollars EACH TOTAL EQUIPMENT M,197 AC%69 SINGLELFFfBMDDa VECAa AMMONALPURCIIASBD COVERAGES 2.39J U EPA SURCHARGE pDDRTONAL PRICE ADNSITWNT .. U FACTORYCONTR MODIFICATION . U OUTSIDE CONTRACT FRETGirf U LATPKANC°LIATION FaPS n ADDrnONALSURCHAAGE L9so FREIGHT O QUANTITY � an.241 vn.+sT TOTAL FgUIl+A4Nf PSICE (U) TRADE IN EACH 70TAL ` 07HER CHARGES U FSf U Fm AmO Ir TOTAI. U p STATETAXIDIFiCRPEPS 2a]Y1 TOTALQUME DmIer SigA " Customer Sigroryrc Dare Da c Movdap,I.0 y 18,2010 Page I of 1 Puccievd:2009087A7DlDA 2,540 PM PST pmpsad Far : Y DALTON Y S O EN M =Id"4011 CFEL 0111=010 Quote Summary Ail figures are in US dollars Canadian dealers require Canadian dollars EACH TOTAL EQULPMENT 251,198 W]cA.CAE-S OtzL Dam z7a0 ADDTTIONALPURCHASBDCOVPBAOPS 0 EPA SURCHARGE 0 ADDUT@IAL MCE ADnTSTMEN 0 FACTORY CONTRACT MODMCATTON 0 O=MBCONTRACTF RWGHT 0 LAIFJCANLTI[L.ATfONFEPS 0 ADI)MONALSURCHARGE 1.950 T'<WSM T QUANMT O 25039 siz675 TiYTALEQURUMCMUCE (0) TRADE W EACH TOTAL 07HU CHARGES U �T 0 PETAMOUNTTOTAL 0 0 6TATETAMOTHERFEES 5IZ615 TOTALQUOTS Dealer Sigwture Customer Signaarc pate DNe Mavday.I=,y, l&2010 Page 2 of 2 pmx Lsd:200804072009A 5:05:27 PM PSI i y