Loading...
HomeMy WebLinkAbout04-27-2016 Master Lease-Purchase Agreement - City of SLO and PNC Equipment Finance, LLCE05 Master Lease - Purchase Agreement Between CITY OF SAN LUIS OBISPO AND PNC EQUIPMENT FINANCE, LLC DOCUMENT INDEX ❑ Master Lease - Purchase Agreement — Sign and provide title on the last page ❑ Lease Schedule with Schedule A -1 — Sign and title ❑ Vehicle Schedule Addendum —Sign and title ❑ Escrow Agreement o Exhibit 1 — General Investment Direction Letter o Exhibit 2 — Escrow Agent Fees and Expenses o Exhibit 3 — Requisition Request and Certificate of Acceptance o Money Market Escrow Investment Letter- Please sign or contact Scott Miller at 614 -849- 3402 with U.S Bank to select a different investment that meets your requirements. ❑ Incumbency Certificate and Resolution— List your authorized signor(s) and title(s); have secretary or appropriate trustee attest to the information and signature(s) provided by signing and printing his /her name, title and date. The person who validates the signatures should not sign the lease documents. The resolution must reflect the title(s) of the individual(s) who have authorization to sign the documents. ❑ Opinion of Counsel Letter — Enclosed is a template. Please ask your attorney to prepare on his /her letterhead, and include all of the items in the template. ❑ Title - The terms of your contract specify that the Lender be listed as the lienholder and hold the original title during the term of the lease. In addition, we will need a copy of the front and back of the MSO listing Oshkosh Capital, 995 Dalton Ave, Cincinnati, OH 45203 as first lien holder. ❑ Insurance Request Form — Fill in your insurer's information and sign. Please contact your insurer, prior to delivery, to obtain a certificate of insurance. Please enclose the certificate with the signed documentation or have the insurer fax the certificate directly to me. ❑ Three Party Agreement — Sign and title. ❑ Delivery & Acceptance Certificate — At point of delivery, fill out this form and fax it to me. Please return the original via US Postal Service. ❑ IRS FORM 8038 -G — Sign, date, and title ❑ Invoice for escrow payment — please send your check in the amount of $250.00, made payable to PNC Equipment Finance, LLC. ❑ Minutes of Governing Body (approving the purchase & finance of equipment) — Please return a copy with the documents. ❑ Sales Contract or Purchase Order - please provide a copy of the Sales Contract enter into with Pierce Manufacturing or a copy of the Purchase Order issued to Pierce Manufacturing Inc. - 1 - E05 MASTER LEASE - PURCHASE AGREEMENT Dated as of April 28, 2016 This Master Lease - Purchase Agreement together with all addenda, riders and attachments hereto, as the same may from time to time be amended, modified or supplemented ( "Master Lease ") is made and entered by and between PNC Equipment Finance, LLC ( "Lessor ") and the Lessee identified below ( "Lessee "). LESSEE: City of San Loris Obispo 1. LEASE OF EQUIPMENT. Subject to the terms and conditions of this Master Lease, Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, all Equipment described in each Schedule signed from time to time by Lessee and Lessor. 2. CERTAIN DEFINITIONS. All terms defined in the Lease are equally applicable to both the singular and plural form of such terms. (a) "Schedule" means each Lease Schedule signed and delivered by Lessee and Lessor, together with all addenda, riders, attachments, certificates and exhibits thereto, as the same may from time to time be amended, modified or supplemented. Lessee and Lessor agree that each Schedule (except as expressly provided in said Schedule) incorporates by reference all of the terms and conditions of the Master Lease. (b) "Lease" means each Schedule and this Master Lease as incorporated into said Schedule. (c) "Equipment" means the property described in each Schedule, together with all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto. (d) "Lien" means any security interest, lien, mortgage, pledge, encumbrance, judgment, execution, attachment, warrant, writ, levy, other judicial process or claim of any nature whatsoever by or of any person. 3. LEASE TERM. The term of the lease of the Equipment described in each Lease ( "Lease Term ") commences on the first date any of such Equipment is accepted by Lessee pursuant to Section 5 hereof and, unless earlier terminated as expressly provided in the Lease, continues until Lessee's payment and performance in full of all of Lessee's obligations under the Lease. 4. RENT PAYMENTS. 4.1 For each Lease, Lessee agrees to pay to Lessor the rent payments in the amounts and at the times as set forth in the Schedule A -1 attached to the Schedule ( "Rent Payments "). A portion of each Rent Payment is paid as and represents the payment of interest as set forth in the Schedule A -1. Rent Payments will be payable for the Lease Term in U.S. dollars, without notice or demand at the office of Lessor (or such other place as Lessor may designate from time to time in writing). 4.2 If Lessor receives any payment from Lessee after the due date, Lessee shall pay Lessor on demand as a late charge five per cent (5 %) of such overdue amount, limited, however, to the maximum amount allowed by law. 4.3 EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 6 HEREOF OR IN ANY WRITTEN MODIFICATION TO THE LEASE SIGNED BY LESSOR, THE OBLIGATION TO PAY RENT PAYMENTS UNDER EACH LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS AND SHALL NOT BE SUBJECT TO ANY SETOFF, DEFENSE, COUNTERCLAIM, ABATEMENT OR RECOUPMENT FOR ANY REASON WHATSOEVER. 5. DELIVERY; ACCEPTANCE; FUNDING CONDITIONS, 5.1 Lessee shall arrange for the transportation, delivery and installation of all Equipment to the location specified in the Schedule ( "Location ") by Equipment suppliers ( "Suppliers ") selected by Lessee. -2- E05 Lessee shall pay all costs related thereto unless Lessor otherwise agrees to pay such costs as stated in the Schedule. 5.2 Lessee shall accept Equipment as soon as it has been delivered and is operational. Lessee shall evidence its acceptance of any Equipment by signing and delivering to Lessor the applicable Schedule. If Lessee signs and delivers a Schedule and if all Funding Conditions have been satisfied in full, then Lessor will pay or cause to be paid the costs of such Equipment as stated in the Schedule ( "Purchase Price ") to the applicable Supplier. 5.3 Lessor shall have no obligation to pay any Purchase Price unless all reasonable conditions established by Lessor ( "Funding Conditions ") have been satisfied, including, without limitation, the following: (a) Lessee has signed and delivered the Schedule and its Schedule A -1; (b) no Event of Default shall have occurred and be continuing; (c) no material adverse change shall have occurred in the Internal Revenue Code of 1986, as amended, and the related regulations and rulings thereunder (collectively, the "Code "); (d) no material adverse change shall have occurred in the financial condition of Lessee or any Supplier; (e) the Equipment is reasonably satisfactory to Lessor and is free and clear of any Liens (except Lessor's Liens); (f) all representations of Lessee in the Lease remain true, accurate and complete; and (g) Lessor has received all of the following documents, which shall be reasonably satisfactory, in form and substance, to Lessor: (1) evidence of insurance coverage required by the Lease, (2) an opinion of Lessee's counsel; (3) reasonably detailed invoices for the Equipment; (4) Uniform Commercial Code (UCC) financing statements; (5) copies of resolutions by Lessee's governing body, duly authorizing the Lease and incumbency certificates for the person(s) who will sign the Lease; (6) such documents and certificates relating to the tax - exempt interest payable under the Lease (including, without limitation, IRS Form 8038G or 8038GC) as Lessor may request; and (7) such other documents and information previously identified by Lessor or otherwise reasonably requested by Lessor. 6. TERMINATION FOR GOVERNMENTAL NON - APPROPRIATIONS. 6.1 For each Lease, Lessee represents and warrants: that it has appropriated and budgeted the necessary funds to make all Rent Payments required pursuant to such Lease for the remainder of the fiscal year in which the Lease Term commences; and that it intends to make Rent Payments for the full Lease Term as scheduled on the applicable Schedule A -1 so long as funds are appropriated in each fiscal year by its governing body. Lessee reasonably believes that moneys in an amount sufficient to make all Rent Payments can and will lawfully be appropriated and made available therefor. All Rent Payments shall be payable out of the general funds of Lessee or out of other funds legally available therefor. Lessor agrees that the Leases will not be general obligations of Lessee and that the Leases shall not constitute pledges of either the full faith and credit of Lessee or the taxing power of Lessee. 6.2 If Lessee's governing body fails to appropriate sufficient funds in any fiscal year for Rent Payments or other payments due under a Lease and if other funds are not available for such payments, then a "Non- Appropriation Event" shall be deemed to have occurred. If a Non - Appropriation Event occurs, then: (a) Lessee shall give Lessor immediate notice of such Non - Appropriation Event and provide written evidence of such failure by Lessee's governing body; (b) on the Return Date, Lessee shall return to Lessor all, but not less than all, of the Equipment covered by the affected Lease, at Lessee's sole expense, in accordance with Section 21 hereof; and (c) the affected Lease shall terminate on the Return Date without penalty or expense to Lessee, provided, that Lessee shall pay all Rent Payments and other amounts payable under the affected Lease for which funds shall have been appropriated or are otherwise available, provided further, that Lessee shall pay month -to -month rent at the rate set forth in the affected Lease for each month or part thereof that Lessee fails to return the Equipment under this Section 6.2. "Return Date" means the last day of the fiscal year for which appropriations were made for the Rent Payments due under a Lease. 7. NO WARRANTY BY LESSOR. The Equipment is sold "AS IS ". LESSEE ACKNOWLEDGES THAT LESSOR DID NOT MANUFACTURE THE EQUIPMENT. LESSOR DOES NOT REPRESENT THE MANUFACTURER, OWNER, OR DEALER, AND LESSEE SELECTED THE EQUIPMENT BASED UPON LESSEE'S OWN JUDGMENT. LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE OR AS TO THE EQUIPMENT'S VALUE, DESIGN, CONDITION, USE, CAPACITY OR DURABILITY. LESSEE AGREES THAT REGARDLESS OF CAUSE, LESSOR IS NOT RESPONSIBLE FOR, AND LESSEE WILL NOT MAKE ANY CLAIM AGAINST LESSOR FOR, ANY DAMAGES, -3- E05 WHETHER CONSEQUENTIAL, DIRECT, SPECIAL OR INDIRECT INCURRED BY LESSEE IN CONNECTION WITH THE EQUIPMENT OR THIS MASTER LEASE — LEASE PURCHASE AGREEMENT. NEITHER THE MANUFACTURER, THE DEALER, NOR ANY SALESPERSON, EMPLOYEE OR AGENT OF THE DEALER OR MANUFACTURER, IS LESSOR'S AGENT OR HAS ANY AUTHORITY TO SPEAK FOR LESSOR OR TO BIND LESSOR IN ANY WAY. For and during the Lease Term, Lessor hereby assigns to Lessee any manufacturer's or Supplier's product warranties, express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary services furnished in connection with such warranties at Lessee's sole expense. Lessee agrees that (a) all Equipment will have been purchased by Lessor in accordance with Lessee's specifications from Suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to any manufacturer's or Supplier's product warranties or guaranties, (d) no manufacturer or Supplier or any representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or agreement made by any manufacturer or Supplier or any representative of said parties shall not be binding upon Lessor. 8. TITLE; SECURITY INTEREST. 8.1 Upon Lessee's acceptance of any Equipment under its Lease, title to the Equipment shall vest in Lessee, subject to Lessor's security interest therein and all of Lessor's other rights under such Lease including, without limitation, Sections 6, 20 and 21 hereof. 8.2 As collateral security for the Secured Obligations, Lessee hereby grants to Lessor a first priority security interest in any and all of the Equipment (now existing or hereafter acquired) and any and all proceeds thereof. Lessee agrees to execute and deliver to Lessor all necessary documents to evidence and perfect such security interest, including, without limitation, Uniform Commercial Code (UCC) financing statements and any amendments thereto. 8.3 "Secured Obligations" means Lessee's obligations to pay all Rent Payments and all other amounts due and payable under all present and future Leases and to perform and observe all covenants, agreements and conditions (direct or indirect, absolute or contingent, due or to become due, or existing or hereafter arising) of Lessee under all present and future Leases. 9. PERSONAL PROPERTY. All Equipment is and will remain personal property and will not be deemed to be affixed or attached to real estate or any building thereon. 10. MAINTENANCE AND OPERATION. Lessee agrees it shall, at its sole expense: (a) repair and maintain all Equipment in good condition and working order, in accordance with manufacturer's instructions, and supply and install all replacement parts or other devices when required to so maintain the Equipment or when required by applicable law or regulation, which parts or devices shall automatically become part of the Equipment; and (b) use and operate all Equipment in a careful manner in the normal course of its operations and only for the purposes for which it was designed in accordance with the manufacturer's warranty requirements, and comply with all laws and regulations relating to the Equipment. If any Equipment is customarily covered by a maintenance agreement, Lessee will furnish Lessor with a maintenance agreement by a party reasonably satisfactory to Lessor. No maintenance or other service for any Equipment will be provided by Lessor. Lessee will not make any alterations, additions or improvements ( "Improvements ") to any Equipment without Lessor's prior written consent unless the Improvements may be readily removed without damage to the operation, value or utility of such Equipment, but any such Improvements not removed prior to the termination of the applicable Lease shall automatically become part of the Equipment. 11. LOCATION; INSPECTION. Equipment will not be removed from, or if Equipment is rolling stock its permanent base will not be changed from, the Location without Lessor's prior written consent which will not be unreasonably withheld. Upon reasonable notice to Lessee, Lessor may enter the Location or elsewhere during normal business hours to inspect the Equipment. 12. LIENS, SUBLEASES AND TAXES -4- E05 12.1 Lessee shall keep all Equipment free and clear of all Liens except those Liens created under its Lease. Lessee shall not sublet or lend any Equipment or permit it to be used by anyone other than Lessee or Lessee's employees. 12.2 Lessee shall pay when due all Taxes which may now or hereafter be imposed upon any Equipment or its ownership, leasing, rental, sale, purchase, possession or use, upon any Lease or upon any Rent Payments or any other payments due under any Lease. If Lessee fails to pay such Taxes when due, Lessor shall have the right, but not the obligation, to pay such Taxes. If Lessor pays any such Taxes, then Lessee shall, upon demand, immediately reimburse Lessor therefor. "Taxes" means present and future taxes, levies, duties, assessments or other governmental charges that are not based on the net income of Lessor, whether they are assessed to or payable by Lessee or Lessor, including, without limitation (a) sales, use, excise, licensing, registration, titling, gross receipts, stamp and personal property taxes, and (b) interest, penalties or fines on any of the foregoing. 13. RISK OF LOSS. 13.1 Lessee bears the entire risk of loss, theft, damage or destruction of any Equipment in whole or in part from any reason whatsoever ( "Casualty Loss "). No Casualty Loss to any Equipment shall relieve Lessee from the obligation to make any Rent Payments or to perform any other obligation under any Lease. Proceeds of any insurance recovery will be applied to Lessee's obligations under this Section 13. 13.2 If a Casualty Loss occurs to any Equipment, Lessee shall immediately notify Lessor of the same and Lessee shall, unless otherwise directed by Lessor, immediately repair the same. 13.3 If Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair ( "Lost Equipment "), then Lessee shall either: (a) immediately replace the Lost Equipment with similar equipment in good repair, condition and working order free and clear of any Liens (except Lessor's Liens) and deliver to Lessor a bill of sale covering the replacement equipment, in which event such replacement equipment shall automatically be Equipment under the applicable Lease; or (b) on the next scheduled Rent Payment date, pay Lessor (i) all amounts owed by Lessee under the applicable Lease, including the Rent Payment due on such date plus (ii) an amount equal to the applicable Termination Value set forth in the Payment Schedule to the applicable Lease. If Lessee is making such payment with respect to less than all of the Equipment under a Lease, then Lessor will provide Lessee with the pro rata amount of the Rent Payment and Termination Value to be paid by Lessee with respect to the Lost Equipment. 13.4 Lessee shall bear the risk of loss for, shall pay directly, and shall defend against any and all claims, liabilities, proceedings, actions, expenses (including reasonable attorney's fees), damages or losses arising under or related to any Equipment, including, but not limited to, the possession, ownership, lease, use or operation thereof. These obligations of Lessee shall survive any expiration or termination of any Lease. Lessee shall not bear the risk of loss of, nor pay for, any claims, liabilities, proceedings, actions, expenses (including attorney's fees), damages or losses which arise directly from events occurring after any Equipment has been returned by Lessee to Lessor in accordance with the terms of the applicable Lease or which arise directly from the gross negligence or willful misconduct of Lessor. 14. INSURANCE. 14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all risks of loss or damage from every cause whatsoever for an amount not less than the Termination Value of the Equipment. Proceeds of any such insurance covering damage or loss of any Equipment shall be payable to Lessor as loss payee. (b) The Total Amount Financed as set forth on the Schedule A -1 does not include the payment of any premium for any liability insurance coverage for bodily injury and /or property damage caused to others and no such insurance will be purchased by Lessor. (c) Lessee at its sole expense shall at all times carry public liability and property damage insurance in amounts reasonably satisfactory to Lessor protecting Lessee and Lessor from liabilities for injuries to persons and damage to property of others relating in any way to any Equipment. Proceeds of any such public liability or property insurance shall be payable first to Lessor as additional insured to the extent of its liability, and then to Lessee. 14.2 All insurers shall be reasonably satisfactory to Lessor. Lessee shall promptly deliver to Lessor satisfactory evidence of required insurance coverage and all renewals and replacements thereof. -5- E05 Each insurance policy will require that the insurer give Lessor at least 30 days prior written notice of any cancellation of such policy and will require that Lessor's interests remain insured regardless of any act, error, misrepresentation, omission or neglect of Lessee. The insurance maintained by Lessee shall be primary without any right of contribution from insurance which may be maintained by Lessor. 15. PURCHASE OPTION. Upon thirty (30) days prior written notice by Lessee to Lessor, and so long as there is no Event of Default then existing, Lessee shall have the option to purchase all, but not less than all, of the Equipment covered by a Lease on any Rent Payment due date by paying to Lessor all Rent Payments then due (including accrued interest, if any) plus the Termination Value amount set forth on the Payment Schedule to the applicable Lease for such date. Upon satisfaction by Lessee of such purchase conditions, Lessor shall release its Lien on such Equipment and Lessee shall retain its title to such Equipment "AS -IS, WHERE -IS," without representation or warranty by Lessor, express or implied, except for a representation that such Equipment is free and clear of any Liens created by Lessor. 16. LESSEE'S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its Equipment, Lessee hereby represents and warrants to Lessor that: (a) Lessee has full power, authority and legal right to execute and deliver the Lease and to perform its obligations under the Lease, and all such actions have been duly authorized by appropriate findings and actions of Lessee's governing body; (b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligation of Lessee, enforceable in accordance with its terms; (c) the Lease is authorized under, and the authorization, execution and delivery of the Lease complies with, all applicable federal, state and local laws and regulations (including, but not limited to, all open meeting, public bidding and property acquisition laws) and all applicable judgments and court orders; (d) the execution, delivery and performance by Lessee of its obligations under the Lease will not result in a breach or violation of, nor constitute a default under, any agreement, lease or other instrument to which Lessee is a party or by which Lessee's properties may be bound or affected; (e) there is no pending, or to the best of Lessee's knowledge threatened, litigation of any nature which may have a material adverse effect on Lessee's ability to perform its obligations under the Lease; and (f) Lessee is a state, or a political subdivision thereof, as referred to in Section 103 of the Code, and Lessee's obligation under the Lease constitutes an enforceable obligation issued on behalf of a state or a political subdivision thereof. 17. TAX COVENANTS. Lessee hereby covenants and agrees that: (a) Lessee shall comply with all of the requirements of Section 149(a) and Section 149(e) of the Code, as the same may be amended from time to time, and such compliance shall include, but not be limited to, keeping a complete and accurate record of any assignments of any Lease and executing and filing Internal Revenue Form 8038G or 8038GC, as the case may be, and any other information statements reasonably requested by Lessor; (b) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act allow, any Lease to be an "arbitrage bond" within the meaning of Section 148(a) of the Code or any Lease to be a "private activity bond" within the meaning of Section 141(a) of the Code; and (c) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act allow, the interest portion of any Rent Payments to be or become includable in gross income for Federal income taxation purposes under the Code. (d) If Lessor either (i) receives notice, in any form, from the IRS; or (ii) reasonably determines, based on an opinion of independent tax counsel selected by Lessor and approved by Lessee, which approval Lessee shall not unreasonably withhold, that Lessor may not exclude the interest component of 2. E05 any Rent Payment under a Tax - Exempt Lease from federal gross income because Lessee breached a covenant contained herein, then Lessee shall pay to Lessor, within thirty (30) days after Lessor notifies Lessee of such determination, the amount which, with respect to Rent Payments previously paid and taking into account all penalties, fines, interest and additions to tax (including all federal, state and local taxes imposed on the interest component of all Rent Payments under such Tax - Exempt Lease due through the date of such event) that are imposed on Lessor as a result of the loss of the exclusion, will restore to Lessor the same after -tax yield on the transaction evidenced by such Tax - Exempt Lease (assuming tax at the highest marginal corporate tax rate) that it would have realized had the exclusion not been lost. Additionally, Lessee agrees that upon the occurrence of such an event with respect to a Tax - Exempt Lease, it shall pay additional rent to Lessor on each succeeding Rent Payment due date in such amount as will maintain such after -tax yield to Lessor. Lessor's determination of the amount necessary to maintain its after -tax yield as provided in this subsection (b) shall be conclusive (absent manifest error). Notwithstanding anything in a Tax - Exempt Lease to the contrary, any payment that Lessee is required to make pursuant to this subsection (b) shall be made only from Legally Available Funds. 18. ASSIGNMENT 18.1 Lessee shall not assign, transfer, pledge, hypothecate, nor grant any Lien on, nor otherwise dispose of, any Lease or any Equipment or any interest in any Lease or Equipment. 18.2 Lessor may assign its rights, title and interest in and to any Lease or any Equipment, and /or may grant or assign a security interest in any Lease and its Equipment, in whole or in part, to any party at any time. Any such assignee or lien holder (an "Assignee ") shall have all of the rights of Lessor under the applicable Lease. LESSEE AGREES NOT TO ASSERT AGAINST ANY ASSIGNEE ANY CLAIMS, ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER SIMILAR DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Unless otherwise agreed by Lessee in writing, any such assignment transaction shall not release Lessor from any of Lessor's obligations under the applicable Lease. An assignment or reassignment of any of Lessor's right, title or interest in a Lease or its Equipment shall be enforceable against Lessee only after Lessee receives a written notice of assignment which discloses the name and address of each such Assignee. Lessee shall keep a complete and accurate record of all such assignments in the form necessary to comply with Section 149(a) of the Code. Lessee agrees to acknowledge in writing any such assignments if so requested. 18.3 Each Assignee of a Lease hereby agrees that: (a) the term Secured Obligations as used in Section 8.3 hereof is hereby amended to include and apply to all obligations of Lessee under the Assigned Leases and to exclude the obligations of Lessee under any Non - Assigned Leases; (b) said Assignee shall have no Lien on, nor any claim to, nor any interest of any kind in, any Non - Assigned Leases; and (c) Assignee shall exercise its rights, benefits and remedies as the assignee of Lessor (including, without limitation, the remedies under Section 20 of the Master Lease) solely with respect to the Assigned Leases. "Assigned Leases" means only those Leases which have been assigned to an Assignee pursuant to a written agreement; and "Non- Assigned Leases" means all Leases excluding the Assigned Leases. 18.4 Subject to the foregoing, each Lease inures to the benefit of and is binding upon the heirs, executors, administrators, successors and assigns of the parties hereto. 19. EVENTS OF DEFAULT. For each Lease, "Event of Default" means the occurrence of any one or more of the following events as they may relate to such Lease: (a) Lessee fails to make any Rent Payment (or any other payment) as it becomes due in accordance with the terms of the Lease, and any such failure continues for ten (10) days after the due date thereof; (b) Lessee fails to perform or observe any of its obligations under Sections 12.1, 14 or 18.1 hereof; (c) Lessee fails to perform or observe any other covenant, condition or agreement to be performed or observed by it under the Lease and such failure is not cured within thirty (30) days after receipt of written notice thereof by Lessor; (d) any statement, representation or warranty made by Lessee in the Lease or in any writing delivered by Lessee pursuant thereto or in connection therewith proves at any time to have been false, misleading or erroneous in any material respect as of the time when made; (e) Lessee applies for or consents to the appointment of a receiver, trustee, conservator or liquidator of Lessee or of all or a substantial part of its -7- E05 assets, or a petition for relief is filed by Lessee under any federal or state bankruptcy, insolvency or similar law, or a petition in a proceeding under any federal or state bankruptcy, insolvency or similar law is filed against I essee and is not dismissed within sixty (60) days thereafter; or (f) Lessee shall be in default under any other Lease or under any other financing agreement executed at any time with Lessor. 20. REMEDIES. If any Event of Default occurs, then Lessor may, at its option, exercise any one or more of the following remedies: (a) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all amounts then currently due under all Leases and all remaining Rent Payments due under all Leases during the fiscal year in effect when the default occurs together with interest on such amounts at the highest lawful rate from the date of Lessor's demand for such payment. (b) Lessor may require Lessee to promptly return all Equipment to Lessor in the manner set forth in Section 21 (and Lessee agrees that it shall so return the Equipment), or Lessor may, at its option, enter upon the premises where any Equipment is located and repossess such Equipment without demand or notice, without any court order or other process of law and without liability for any damage occasioned by such repossession; (c) Lessor may sell, lease or otherwise dispose of any Equipment, in whole or in part, in one or more public or private transactions, and if Lessor so disposes of any Equipment, then Lessor shall retain the entire proceeds of such disposition free of any claims of Lessee, provided, that the net proceeds of any such disposition shall be applied to amounts payable by Lessee under clause (a) above of this Section only to the extent that such net proceeds exceed the applicable Termination Value set forth in the applicable Schedule A -1; (d) Lessor may terminate, cancel or rescind any Lease as to any and all Equipment; (e) Lessor may exercise any other right, remedy or privilege which may be available to Lessor under applicable law or, by appropriate court action at law or in equity, Lessor may enforce any of Lessee's obligations under any Lease; and /or (f) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all out -of- pocket costs and expenses incurred by Lessor as a result (directly or indirectly) of the Event of Default and /or of Lessor's actions under this section, including, without limitation, any attorney fees and expenses and any costs related to the repossession, safekeeping, storage, repair, reconditioning or disposition of any Equipment. None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy available to Lessor. Lessor's exercise of one or more remedies shall not preclude its exercise of any other remedy. No delay or failure on the part of Lessor to exercise any remedy under any Lease shall operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise of any remedy preclude any other exercise thereof or the exercise of any other remedy. 21. RETURN OF EQUIPMENT. If Lessor is entitled under the provisions of any Lease, including any termination thereof pursuant to Sections 6 or 20 of this Master Lease, to obtain possession of any Equipment or if Lessee is obligated at any time to return any Equipment, then (a) title to the Equipment shall vest in Lessor immediately upon Lessors notice thereof to Lessee, and (b) Lessee shall, at its sole expense and risk, immediately de- install, disassemble, pack, crate, insure and return the Equipment to Lessor (all in accordance with applicable industry standards) at any location in the continental United States selected by Lessor. Such Equipment shall be in the same condition as when received by Lessee (reasonable wear, tear and depreciation resulting from normal and proper use excepted), shall be in good operating order and maintenance as required by the applicable Lease, shall be free and clear of any Liens (except Lessor's Lien) and shall comply with all applicable laws and regulations. Until Equipment is returned as required above, all terms of the applicable Lease shall remain in full force and effect including, without limitation, obligations to pay Rent Payments and to insure the Equipment. Lessee agrees to execute and deliver to Lessor all documents reasonably requested by Lessor to evidence the transfer of legal and beneficial title to such Equipment to Lessor and to evidence the termination of Lessee's interest in such Equipment. 2.01 E05 22. LAW GOVERNING. Each Lease shall be governed by the laws of the state of the lessee (The "State "). 23. NOTICES. All notices to be given under any Lease shall be made in writing and either personally delivered or mailed by certified mail to the other party at its address set forth herein or at such address as the party may provide in writing from time to time. Any such notices shall be deemed to have been received five (5) days subsequent to mailing if sent by regular or certified mail, or on the next business day if sent by overnight courier, or on the day of delivery if delivered personally. 24. FINANCIAL INFORMATION; INDEMNITY; POWER OF ATTORNEY. Within thirty (30) days of their completion in each fiscal year of Lessee during any Lease Term, Lessee will deliver to Lessor upon Lessor's request the publicly available annual financial information of Lessee. To the extent permitted by law, Lessee shall indemnify, hold harmless and, if Lessor requests, defend Lessor and its shareholders, affiliates, employees, dealers and agents against all Claims directly or indirectly arising out of or connected with (a) the manufacture, installation, use, lease, possession or delivery of the Equipment, (b) any defects in the Equipment, any wrongful act or omission of Lessee, or its employees and agents, or (c) any claims of alleged breach by Lessee of this Master Lease or any related document. "Claims" means all losses, liabilities, damages, penalties, expenses (including attorney's fees and costs), claims, actions and suits, whether in contract, tort or otherwise. Lessee hereby appoints Lessor its true and lawful attorney -in -fact (with full power of substitution) to prepare any instrument, certificate of title or financing statement covering the Equipment or otherwise protecting Lessor's interest in the Equipment, to sign Lessee's name with the same force and effect as if signed by Lessee, and to file same at the proper location(s); and make claims for, receive payment of, and execute and endorse all documents, checks or drafts for loss, theft, damage or destruction to the Equipment under any insurance. 25. ANTI -MONEY LAUNDERING /INTERNATIONAL TRADE LAW COMPLIANCE. Lessee represents and warrants to Lessor, as of the date of this Master Lease, the date of each advance of proceeds pursuant to this Master Lease, the date of any renewal, extension or modification of this Master Lease or any Lease, and at all times until this Master Lease and each Lease has been terminated and all amounts thereunder have been indefeasibly paid in full, that: (a) no Covered Entity (i) is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (b) the proceeds of any Lease will not be used to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive enforced by any Compliance Authority; (c) the funds used to repay any Lease are not derived from any unlawful activity; and (d) each Covered Entity is in compliance with, and no Covered Entity engages in any dealings or transactions prohibited by, any laws of the United States, including but not limited to any Anti - Terrorism Laws. Lessee covenants and agrees that it shall immediately notify Lessor in writing upon the occurrence of a Reportable Compliance Event. As used herein: "Anti- Terrorism Laws" means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, all as amended, supplemented or replaced from time to time; "Compliance Authority' means each and all of the (a) U.S. Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S. Commerce Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S. Justice Department, and (g) U.S. Securities and Exchange Commission; "Covered Entity" means Lessee, its affiliates and subsidiaries, all guarantors, pledgors of collateral, all owners of the foregoing, and all brokers or other agents of Lessee acting in any capacity in connection with this Master Lease or any Lease; "Reportable Compliance Event" means that any Covered Entity becomes a Sanctioned Person, or is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law enforcement officials, in connection with any Anti - Terrorism Law or any predicate crime to any Anti - Terrorism Law, or self- discovers facts or circumstances implicating any aspect of its operations with the actual or possible violation of any Anti - Terrorism Law; "Sanctioned Country" means a country subject to a sanctions program maintained by any Compliance Authority; and "Sanctioned Person" means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including E05 but not limited to the blocking of property or rejection of transactions), under any order or directive of any Compliance Authority or otherwise subject to, or specially designated under, any sanctions program maintained by any Compliance Authority 26. USA PATRIOT ACT NOTICE. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each lessee that opens an account. What this means: when Lessee opens an account, Lessor will ask for the business name, business address, taxpayer identifying number and other information that will allow Lessor to identify Lessee, such as organizational documents. For some businesses and organizations, Lessor may also need to ask for identifying information and documentation relating to certain individuals associated with the business or organization. 27. SECTION HEADINGS. All section headings contained herein or in any Schedule are for convenience of reference only and do not define or limit the scope of any provision of any Lease. 28. EXECUTION IN COUNTERPARTS. Each Schedule to this Master Lease may be executed in several counterparts, each of which shall be deemed an original, but all of which shall be deemed one instrument. Only one counterpart of each Schedule shall be marked "Lessor's Original" and all other counterparts shall be deemed duplicates. An assignment of or security interest in any Schedule may be created through transfer and possession only of the counterpart marked "Lessor's Original." 29. ENTIRE AGREEMENT; WRITTEN AMENDMENTS. Each Lease, together with the exhibits attached thereto and made a part hereof and other attachments thereto, and other documents or instruments executed by Lessee and Lessor in connection therewith, constitute the entire agreement between the parties with respect to the lease of the Equipment covered thereby, and such Lease shall not be modified, amended, altered, or changed except with the written consent of Lessee and Lessor. Any provision of any Lease found to be prohibited by law shall be ineffective to the extent of such prohibition without invalidating the remainder of the Lease. 30. HEAVY -DUTY VEHICLE GREENHOUSE GAS EMISSION REDUCTION REGULATION. (a) If the equipment leased pursuant to the Lease is a tractor, the Lessee of this heavy -duty tractor understands that when using a heavy -duty tractor to pull a 53 -foot or longer box -type trailer on a highway within California, the heavy -duty tractor must be compliant with sections 95300- 95312, title 17, California Code of Re_ ulations, and that it is the responsibility of the Lessee to ensure this heavy -duty tractor is compliant. The regulations may require this heavy -duty tractor to have low- rolling- resistance tires that are U.S. Environmental Protection Agency (U.S. EPA) SmartWay Verified Technologies prior to current or future use in California, or may entirely prohibit use of this tractor in California if it is a model year 2011 or later tractor and is not a U.S. EPA SmartWay Certified Tractor. (b) If the equipment leased pursuant to the Lease is a trailer, the Lessee of this box -type trailer understands that when using a heavy -duty tractor to pull a 53 -foot or longer box -type trailer on a highway within California, the box -type trailer must be compliant with sections 95300 - 95312, title 17, California Code of Regulations, and that it is the responsibility of the Lessee to ensure this box -type trailer is compliant. The regulations may require this trailer to have low- rolling- resistance tires and aerodynamic technologies that are U.S. Environmental Protection Agency SmartWay Verified Technologies prior to current or future use in California. (c) Notwithstanding anything in the Lease to the contrary, the Lease does not prohibit the Lessee from modifying the trailer, at Lessee's cost, to be compliant with the requirements of the California Heavy - Duty Vehicle Greenhouse Gas Emission Reduction Regulation. 31. IMPORTANT INFORMATION ABOUT PHONE CALLS. By providing telephone number(s) to Lessor, now or at any later time, Lessee authorizes Lessor and its affiliates and designees to contact Lessee regarding Lessee account(s) with Lessor or its affiliates, whether such accounts are Lessee individual accounts or business accounts for which Lessee is a contact, at such numbers using any means, including but not limited to placing calls using an automated dialing system to cell, VoIP or other wireless phone number, or leaving prerecorded messages or sending text messages, even if charges -10- E24 RESOLUTION Municipality /Lessee: City of San Luis Obispv Principal Amount Expected To Be Financed: $1,141.468.09 WHEREAS, the Municipality is a political subdivision of the State in which Municipality is located (the "State ") and is duly organized and existing pursuant to the Constitution and laws of the State. WHEREAS, pursuant to applicable law, the governing body of the Municipality ( "Governing Body') is authorized to acquire, dispose of and encumber real and personal property, including, without limitation, rights and interest in property, leases and easements necessary to the functions or operations of the Municipality. WHEREAS, the Governing Body hereby finds and determines that the execution of one or more Master Lease - Purchase Agreements ( "Leases ") in the principal amount not exceeding the amount stated above for the purpose of acquiring the property ( "Equipment ") to be described in the Leases is appropriate and necessary to the functions and operations of the Municipality. WHEREAS, PNC Equipment Finance, LLC ( "Lessor') shall act as Lessor under said Leases. NOW, THEREFORE, Be It Ordained by the Governing Body of the Municipality: Section 1. Either one of the OR (each an "Authorized Representative ") acting on behalf of the Municipality, is hereby authorized to negotiate, enter into, execute, and deliver one or more Leases in substantially the form set forth in the document presently before the Governing Body, which document is available for public inspection at the office of the Municipality. Each Authorized Representative acting on behalf of the Municipality is hereby authorized to negotiate, enter into, execute, and deliver such other documents relating to the Lease as the Authorized Representative deems necessary and appropriate. All other related contracts and agreements necessary and incidental to the Leases are hereby authorized. Section 2. By a written instrument signed by any Authorized Representative, said Authorized Representative may designate specifically identified officers or employees of the Municipality to execute and deliver agreements and documents relating to the Leases on behalf of the Municipality. Section 3. The aggregate original principal amount of the Leases shall not exceed the amount stated above and shall bear interest as set forth in the Leases and the Leases shall contain such options to purchase by the Municipality as set forth therein. Section 4. The Municipality's obligations under the Leases shall be subject to annual appropriation or renewal by the Governing Body as set forth in each Lease and the Municipality's obligations under the Leases shall not constitute general obligations of the Municipality or indebtedness under the Constitution or laws of the State. Section 5. As to each Lease, the Municipality reasonably anticipates to issue not more than $10,000,000 of tax - exempt obligations (other than "private activity bonds" which are not "qualified 501(c)(3) bonds ") during the current calendar year in which each such Lease is issued and hereby designates each Lease as a qualified tax - exempt obligation for purposes of Section 265(b) of the Internal Revenue Code of 1986, as amended. E24 Section 6. This resolution shall take effect immediately upon its adoption and approval. ADOPTED AND APPROVED on this n 2016. The undersigned Secretary/Clerk of the above -named Municipality hereby certifies and attests that the undersigned has access to the official records of the Governing Body of the Municipality, that the foregoing resolutions were duly adopted by said Governing Body of the Municipality at a meeting of said Governing Body and that such resolutions have not been amended or altered and are in full force and effect on the date stated below. LESSEE: City of San Luis Obispo J��dwiK' [SEAL] Signature of Secretary/ lark of Municipality Print Name: P -e&; he_ C ood W IK- Official Title: Date: Ajpn I 2 ­7 o6 6 001.1145120 3 C914:i111l9C•1_1% 111461aIT1411►9 4=1►M Lessee: City of San Luis Obispo Lease Schedule No.: 196140000 Dated: April 28, 2016 E24 I, the undersigned Secretary/Clerk identified below, do hereby certify that I am the duly elected or appointed and acting Secretary/Clerk of the above Lessee (the "Lessee "), a political subdivision duly organized and existing under the laws of the State where Lessee is located, that I have the title stated below, and that, as of the date hereof, the individuals named below are the duly elected or appointed officers of the Lessee holding the offices set forth opposite their respective names. [NOTE: Use same titles as Authorized Representatives stated in Resolutions.] Derek Johnson Name J. Christine Dietrick Name Interim Director of Finance & Title City Attorney Title IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such Lessee as of the date set forth below. AMW [SEAL] Signature of Secretary/Clerk of Lessee Print Name: �C~� /mil' 627o OG�litilt--,— Official Title: Date: - ✓� r E05 may be incurred for the calls or text messages. Lessee consents that any phone call with Lessor may be monitored or recorded by Lessor. Cit of San Luis Obispo ("Lessee" By: / - A,-- Title: In erim Lector of Finance & I.T. Attention: Finance Director 990 Palm Street San Luis Obispo, CA 93401 - 11 - PNC Equipment Finance, LLC ( "Lessor ") M Title 155 East Broad Street, B4- B230 -05 -7 Columbus, OH 43215 E28 LEASE SCHEDULE NO. 196140000 Dated As Of April 28, 2016 This Lease Schedule (this "Schedule ") is attached and made a part of the Master Lease - Purchase Agreement referenced below, together with all exhibits, schedules, addenda, and other attachments thereto, executed by Lessee and Lessor (the "Lease "). Unless otherwise defined herein, capitalized terms will have the same meaning ascribed to them in the Master Lease. All terms and conditions of the Master Lease are incorporated herein by reference. To the extent that there is any conflict between the terms of the Lease and this Schedule, the terms of this Schedule shall control. Master Lease - Purchase Agreement dated April 28, 2016 1. EQUIPMENT DESCRIPTION. As used in the Lease, "Equipment" means all of the property described in Schedule A -1 attached to this Schedule and all attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions thereto. 2. RENTAL PAYMENTS; LEASE TERM. The Rental Payments to be paid by the Lessee to Lessor, the commencement date thereof and the lease term of this Lease Schedule are set forth on the Schedule A -1 attached to this Lease Schedule. 3. ESSENTIAL USE; CURRENT INTENT OF LESSEE. Lessee represents that the use of the Equipment is essential to Lessee's proper, efficient and economic functioning or to the services that Lessee provides to its citizens and the Equipment will be used by Lessee only for the purpose of performing its governmental or proprietary functions consistent with the permissible scope of its authority. Lessee currently intends for the full Lease Term: to use the Equipment; to continue this Lease; and (if applicable) to make Rent Payments if funds are appropriated in each fiscal year by its governing body. 4. ACCEPTANCE OF EQUIPMENT. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT (A) LESSEE HAS RECEIVED AND INSPECTED ALL EQUIPMENT; (B) ALL EQUIPMENT IS IN GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS, CONTRACTS AND SPECIFICATIONS; (C) LESSEE ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE "AS -IS, WHERE IS "; AND (D) LESSEE WAIVES ANY RIGHT TO REVOKE SUCH ACCEPTANCE. 5. BANK QUALIFIED. LESSEE CERTIFIES THAT IT HAS DESIGNATED THIS LEASE AS A QUALIFIED TAX- EXEMPT OBLIGATION IN ACCORDANCE WITH SECTION 265(b)(3) OF THE CODE, THAT IT HAS NOT DESIGNATED MORE THAN $10,000,000 OF ITS OBLIGATIONS AS QUALIFIED TAX- EXEMPT OBLIGATIONS IN ACCORDANCE WITH SUCH SECTION FOR THE CURRENT CALENDAR YEAR AND THAT IT REASONABLY ANTICIPATES THAT THE TOTAL AMOUNT OF TAX- EXEMPT OBLIGATIONS TO BE ISSUED BY LESSEE DURING THE CURRENT CALENDAR YEAR WILL NOT EXCEED $10,000,000. 6. RE- AFFIRMATION OF THE MASTER LEASE - PURCHASE AGREEMENT. Lessee hereby re- affirms all of its representations, warranties and obligations under the Master Lease Purchase Agreement (including, without limitation, its obligation to pay all Rental Payments, its disclaimers in Section 7 thereof and its representations in Section 6.1 and 16 thereof). City of San Luis Obispo ( "Lessee" By: Title: Int rim Director of Finance & I.T. PNC Equipment Finance, LLC ( "Lessor ") Z Title: E28 Schedule A -1 1. EQUIPMENT LOCATION & DESCRIPTION: City of San Luis Obispo 136 N Chorro San Luis Obispo, CA 93401 San Luis Obispo County 2016 Pierce Arrow XT 75' PUC VIN# TYMCO Model 600 Regenerative Air Street Sweeper VIN# 2. LEASE PAYMENT SCHEDULE. (a) Accrual Date: April 28, 2016 (b) Amount Financed: i. Purchase Price for Pierce Arrow XT 75" PUC $869,806.17 Purchase Price for Street Sweeper $219,535.00 Sales Tax $84.361 -92 Freight $9,000.00 ii. Purchase Price Deduction $0.00 Prepay Discounts $41235.00 Trade In $0.00 Total Amount Financed (Cash Sale Price minus $1,141,468.09 Purchase Price Deductions) E28 (c) Payment Schedule: Accrual Date: April 28, 2016 Rent Payment Rent Payment Rent Payment Interest Princial Portion p Termination Number Date Amount Portion Value 1 4/28/2017 240,067.42 19,404.96 220,662.46 948,429.80 2 4/28/2018 240,067.42 15,653.70 224,413.72 717,283.67 3 4/28/2019 240,067.42 11,838.66 228,228.76 482,208.04 4 4/28/2020 240,067.42 7,958.77 232,108.65 243,136.14 5 4/28/2021 240,067.42 4,012.92 236,054.50 1.00 Citv of San Luis Obispo PNC Equipment Finance, LLC ( "Lessee ") ( "Lessor ") By: By: Title: in rim Director of Finance & 13 Title: E28 VEHICLE SCHEDULE ADDENDUM Dated As Of April 28, 2016 Lease Schedule No. 196140000 Dated April 28, 2016 Lessee: City of San Luis Obispo Reference is made to the above Lease Schedule ( "Schedule ") to the Master Lease - Purchase Agreement identified in the Lease Schedule ( "Master Lease ") by and between PNC Equipment Finance, LLC ( "Lessor") and the above Lessee ( "Lessee "). This Addendum amends and modifies the terms and conditions of the Schedule and is hereby made a part of the Schedule. Unless otherwise defined herein, capitalized terms defined in the Master Lease shall have the same meaning when used herein. NOW THEREFORE, as part of the valuable consideration to induce the execution of the Schedule, Lessor and Lessee hereby agree to amend the Schedule as follows: 1. In the event that any unit of Equipment covered by the Schedule is a vehicle or trailer under applicable State law, then the following provisions shall also apply to the Schedule to the extent permitted by law, (a) each manufacturer's statement of origin and certificate of title shall state that Lessor has the first and sole lien on or security interest in such unit of Equipment; (b) the public liability and property damage insurance required by the terms of the paragraph titled "Insurance in the Master Lease shall be in an amount not less than $1,000,000.00 per person insured and '2.000,000.00 combined single limit per unit per occurrence (provided, that if the unit of Equipment is a bus or other passenger vehicle, then such insurance amount shall be such larger amount as may be reasonably required by Lessor) and $1, 000, 000.00 for damage to property of others; (c) Lessee shall furnish and permit only duly licensed, trained, safe and qualified drivers to operate any such unit of Equipment, and such drivers shall be agents of Lessee and shall not be agents of Lessor; and (d) Lessee shall cause each such unit of Equipment to be duly registered and licensed as required by applicable State law with Lessor noted as lien holder and Lessee as owner. 2. Except as expressly amended by this Addendum and other modifications signed by Lessor, the Schedule remains unchanged and in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first referenced above. Qtv of San Luis Obispo PNC Equipment Finance, LLC ("Lessee++ ( "Lessor ") By: r By: Title: In rim Director of Finance & I.T. Title: ESCROW RIDER Dated As of April 282016 Lease Schedule No. 196140000 Dated April 28, 2016 MASTER LEASE - PURCHASE AGREEMENT DATED APRIL 28, 2016 LESSEE: CITY OF SAN LUIS OBISPO Reference is made to the above Lease Schedule ( "Schedule ") to the Master Lease - Purchase Agreement identified in the Schedule ( "Master Lease ") by and between PNC Equipment Finance, LLC ( "Lessor ") and the above lessee ( "Lessee "). As used herein, "Lease" shall mean the Schedule and the Master Lease, but only to the extent that the Master Lease related to the Schedule. This Addendum amends and modifies the terms and conditions of the Lease and is hereby made a part of the Lease. Unless otherwise defined herein, capitalized terms defined in the Master Lease shall have the same meaning when used herein. NOW, THEREFORE, as part of the valuable consideration to induce the execution of the Lease, Lessor and Lessee hereby agree to amend the Lease as follows: "Escrow Agreement" means the Escrow Agreement relating to a Schedule, dated the Commencement Date under such Schedule and substantially in the form attached to this Master Lease, among Lessor, Lessee and the escrow agent therein identified, with respect to the Escrow Fund established and to be administered thereunder. "Escrow Fund" means the fund of that name established pursuant to an Escrow Agreement. 2. Lessee and Lessor together with a mutually acceptable escrow agent agree to enter into an escrow agreement (Escrow Agreement ") establishing a fund ( "Equipment Acquisition Fund ") from which the Purchase Price of the Equipment will be paid. The terms and conditions of the Escrow Agreement shall be satisfactory in form and substance, to Lessor and Lessee. 3. In order to provide financing to pay the costs to acquire and install the Equipment ( "Total Amount Financed") as described in a Schedule, Lessor and Lessee hereby agree to execute and deliver an Escrow Agreement relating to such Schedule on the date on which the Funding Conditions for such Schedule are satisfied as provided in Section 5.3. If Lessee signs and delivers a Schedule and an Escrow Agreement and if all Funding Conditions have been satisfied in full, then Lessor will deposit or cause to be deposited into an Escrow Fund under the related Escrow Agreement an amount (which may include estimated investment earnings thereon) equal to the Purchase Price for the Equipment to be financed under the related Schedule. 4. Lessee shall, at its sole expense, arrange for the transportation, delivery and installation of all Equipment to the location specified in the Schedule ( "Location') by Equipment suppliers ( "Suppliers') selected by Lessee. Lessee shall accept Equipment for purposes of the related Lease as soon as it has been delivered and is operational. Lessee shall evidence its acceptance of any Equipment by signing and delivering to Lessor a Certificate of Acceptance in the form and manner required by the applicable Escrow Agreement. 5. If a Non - Appropriation Event or an Event of Default occurs prior to Lessee's acceptance of all the Equipment under the related Schedule, the amount then on deposit in the Escrow Fund shall be applied to prepay the unpaid principal component of the Rent Payments in whole on the first business day of the month next succeeding the occurrence of either such Event plus accrued interest to the prepayment date; provided, however, that the amount to be prepaid by Lessee pursuant to this Section 5 shall first be paid from moneys in the related Escrow Fund and then from Legally Available Funds and other moneys available for such purpose as a result of the exercise by Lessor of its rights and remedies under the related Schedule. Any funds on deposit in the Escrow Fund on the prepayment date described in this Section 5 in excess of the unpaid principal component of the Rent Payments to be prepaid plus accrued interest thereon to the prepayment date shall be paid promptly to Lessee. 6. To the extent that Lessee has not accepted items of Equipment before the eighteen -month anniversary of the Commencement Date identified on the related Schedule, the amount then on deposit in the related Escrow Fund shall be applied to prepay the unpaid principal component of the Rent Payments in part, in inverse order of Rent Payments, on the first business day of the next month plus accrued interest to the prepayment date; provided, however, that the amount to be prepaid by Lessee pursuant to this Section 6 shall first be paid from moneys in the related Escrow Fund and then from Legally Available Funds. Notwithstanding any such partial prepayment, the related Schedule shall remain in full force and effect with respect to the portion of the Equipment accepted by Lessee during such eighteen -month period, and the portion of the principal component of Rent Payments remaining unpaid after such prepayment plus accrued interest thereon shall remain payable in accordance with the terms of the related Schedule. Upon Lessor's request, Lessee shall execute an amendment to the related Payment Schedule that reflects the change to the Rent Payments as a result of such partial prepayment. 7. As collateral security for Lessee's obligations to pay all Rent Payments and all other amounts due and payable under each Lease and to perform and observe all covenants, agreements and conditions (direct or indirect, absolute or contingent, due or to become due or existing or hereafter arising) of Lessee under such Lease, Lessee hereby grants to Lessor a first priority, exclusive security interest in any and all of the Equipment (now existing or hereafter acquired) under each Lease, moneys and investments held from time to time the Escrow Fund under each Escrow Agreement and any and all proceeds of any of the foregoing. Lessee agrees to execute and deliver to Lessor all necessary documents to evidence and perfect such security interest, including, without limitation, Uniform Commercial Code (UCC) financing statements and any amendments thereto and certificates of title or certificates of origin (or applications thereof) noting Lessor's interest thereon. 8. The Lease Term of the Lease shall commence on the earlier of the date specified in the Payment Schedule to the Lease or the date of Lessor's deposit of funds into the Equipment Acquisition Fund. Notwithstanding the statements regarding delivery and acceptance of the Equipment in the Schedule, the parties acknowledge that the Equipment will be delivered or installed as provided in the Escrow Agreement. 9. The delivery of documents and the satisfaction of any other conditions required by the Escrow Agreement or this Addendum shall be additional Funding Conditions for the Lease. 10. Upon Lessee's execution of the Escrow Agreement, Lessee hereby represents and warrants to Lessor that: -2- (a) Lessee has full power, authority and legal right to execute and deliver the Escrow Agreement and to perform its obligations under the Escrow Agreement, and all such actions have been duly authorized by appropriate findings and actions of Lessee's governing body; (b) the Escrow Agreement has been duly executed and delivered by Lessee and constitutes a legal, valid and binding obligations of Lessee, enforceable in accordance with its terms; and (c) the Escrow Agreement is authorized under, and the authorization, execution and delivery of the Escrow Agreement complies with, all applicable federal, state and local laws and regulations (including, but not limited to, all open meeting, public bidding and public investment (laws) and all applicable judgments and court orders. 11. The opinion of Lessee's legal counsel will include statements to the same effect as the representations of Lessee in paragraph 10 above. 12. It shall be an additional event of default under the Lease if lessee fails to pay or perform any of its obligations under the Escrow Agreement or this Addendum or if any of the representations of Lessee in the Escrow Agreement or this Addendum prove to be false, misleading or erroneous in any material respect. Except as expressly amended by this Rider and other modifications signed by Lessor, the Lease remains unchanged and in full force and effect. IN WITNESS WHEREOR, the parties hereto have executed this Rider as of the date first referenced above. City of San Luis Obispo (Lessee) By TITLE: Int im birecto r of Finance & 1. T. PNC Equipment Finance, LLC (Lessor) By TITLE: -3- ESCROW AGREEMENT THIS ESCROW AGREEMENT ( "Escrow Agreement') is made as of April 28, 2016 by and among PNC EQUIPMENT FINANCE, LLC ( "Lessor), City of San Luis Obispo ( "Lessee") and U.S. BANK NATIONAL ASSOCIATION, as escrow agent ( "Escrow Agent'). Lessor and Lessee have heretofore entered into that certain Master Lease - Purchase Agreement dated as of April 28, 2016 (the "Master Lease') and a Lease Schedule 196140000 thereto dated April 28, 2016 (the "Schedule" and, together with the terms and conditions of the Master Lease incorporated therein, the "Lease'). The Lease contemplates that certain equipment described therein (the "Equipment') is to be acquired from the vendor(s) or manufacturer(s) thereof. After acceptance of the Equipment by Lessee, the Equipment is to be leased by Lessor to Lessee pursuant to the terms of the Lease. The Lease further contemplates that Lessor will deposit an amount equal to the anticipated aggregate acquisition cost of the Equipment (the "Total Amount Financed'), being $246,817.80, with Escrow Agent to be held in escrow and applied on the express terms set forth herein. Such deposit, together with all interest and other additions received with respect thereto (hereinafter the "Escrow Fund') is to be applied to pay the vendor(s) or manufacturer(s) of the Equipment (the "Vendor) its invoice cost (a portion of which may, if required, be paid prior to final acceptance of the Equipment by Lessee); and, if applicable, to reimburse Lessee for progress payments already made by it to the Vendor of the Equipment. The parties desire to set forth the terms on which the Escrow Fund is to be created and to establish the rights and responsibilities of the parties hereto. Now, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) in hand paid, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. (a) Escrow Agent hereby agrees to serve as escrow agent upon the terms and conditions set forth herein. (b) The moneys and investments held in the Escrow Fund are irrevocably held in trust for the benefit of Lessee and Lessor, and such moneys, together with any income or interest earned thereon, shall be expended only as provided in this Escrow Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of either Lessee or Lessor. Lessor, Lessee and Escrow Agent intend that the Escrow Fund constitute an escrow account in which Lessee has no legal or equitable right, title or interest until satisfaction in full of all conditions contained herein for the disbursement of funds by the Escrow Agent therefrom. However, if the parties' intention that Lessee shall have no legal or equitable right, title or interest until all conditions for disbursement are satisfied in full is not respected in any legal proceeding, the parties hereto intend that Lessor have a security interest in the Escrow Fund, and such security interest is hereby granted by Lessee to secure payment of all sums due to Lessor under the Lease. For such purpose, Escrow Agent hereby agrees to act as agent for Lessor in connection with the perfection of such security interest and agrees to note, or cause to be noted, on all books and records relating to the Escrow Fund, the Lessor's interest therein. 2. On such day as is determined to the mutual satisfaction of the parties (the "Closing Date'), Lessor shall deposit with Escrow Agent cash in the amount of the Purchase Price, to be held in escrow by Escrow Agent on the express terms and conditions set forth herein. -4- On the Closing Date, Escrow Agent agrees to accept the deposit of the Purchase Price by Lessor, and further agrees to hold the amount so deposited together with all interest and other additions received with respect thereto, as the Escrow Fund hereunder, in escrow on the express terms and conditions set forth herein. 3. Escrow Agent shall at all times segregate the Escrow Fund into an account maintained for that express purpose, which shall be clearly identified on the books and records of Escrow Agent as being held in its capacity as Escrow Agent. Securities and other negotiable instruments comprising the Escrow Fund from time to time shall be held or registered in the name of Escrow Agent (or its nominee). The Escrow Fund shall not, to the extent permitted by applicable law, be subject to levy or attachment or lien by or for the benefit of any creditor of any of the parties hereto (except with respect to the security interest therein held by Lessor). 4. The cash comprising the Escrow Fund from time to time shall be invested and reinvested by Escrow Agent in one or more investments as directed by Lessee in Exhibit 1. Escrow Agent will use due diligence to collect amounts payable under a check or other instrument for the payment of money comprising the Escrow Fund and shall promptly notify Lessee and Lessor in the event of dishonor of payment under any such check or other instruments.. Interest or other amounts earned and received by Escrow Agent with respect to the Escrow Fund shall be deposited in and comprise a part of the Escrow Fund. 5. Upon request by Lessee and Lessor, Escrow Agent shall send monthly statements of account to Lessee and Lessor, which statements shall set forth all withdrawals from and interest earnings on the Escrow Fund as well as the investments in which the Escrow Fund is invested. 6. Escrow Agent shall take the following actions with respect to the Escrow Fund (a) Upon Escrow Agent's acceptance of the deposit of the Purchase Price, an amount equal to Escrow Agent's set -up fee, as set forth on Exhibit 2 hereto, shall be disbursed from the Escrow Fund to Escrow Agent in payment of such fee. (b) From time to time, Escrow Agent shall pay to the Vendor of the Equipment payments then due and payable with respect thereto upon receipt of duly executed Requisition Request and Certificate of Acceptance form attached as Exhibit 3 hereto, subject to Lessor's prior written approval of each such Requisition Request and Certificate of Acceptance. (c) If an Event of Default or Non - Appropriation Event occurs under the Lease prior to the Lessee's acceptance of all the Equipment or to the extent that funds have not been disbursed from the Escrow Fund within the eighteen -month period identified in the Lease, funds then on deposit in the Escrow Fund shall be applied to the prepayment of Rent Payments under the Lease as instructed by Lessor. (d) Upon receipt by Escrow Agent of written notice from Lessor that the purchase price of the Equipment has been paid in full, Escrow Agent shall apply the then remaining Escrow Fund, first, to all outstanding fees and expenses incurred by Escrow Agent in connection herewith as evidenced by its statement forwarded to Lessor and Lessee, and, second, to Lessor for application against the interest component of Rent Payments under the Lease as provided therein, unless otherwise agreed by Lessor. 7. The fees and expenses, including any legal fees, of Escrow Agent incurred in connection herewith shall be the responsibility of Lessee. The basic fees and expenses of Escrow Agent shall be as set forth on Exhibit 2 hereto and Escrow Agent is hereby authorized to deduct such fees and expenses from the Escrow Fund as and when the same are incurred without any further authorization from Lessee or Lessor. Escrow Agent may employ legal counsel - 5 - and other experts as it deems necessary for advice in connection with its obligations hereunder. Escrow Agent waives any claim against Lessor with respect to compensation hereunder. 8. Escrow Agent shall have no liability for acting upon any written instruction presented by Lessor in connection with this Escrow Agreement, which Escrow Agent in good faith believes to be genuine. Furthermore, Escrow Agent shall not be liable for any act or omission in connection with this Escrow Agreement except for its own negligence, willful misconduct or bad faith. Escrow Agent shall not be liable for any loss or diminution in value of the Escrow Fund as a result of the investments made by Escrow Agent. 9. Escrow Agent may resign at any time by giving thirty (30) days' prior written notice to Lessor and Lessee. Lessor may at any time remove Escrow Agent as Escrow Agent under this Escrow Agreement upon written notice. Such removal or resignation shall be effective on the date set forth in the applicable notice. Upon the effective date of resignation or removal, Escrow Agent will transfer the Escrow Fund to the successor Escrow Agent selected by Lessor. 10. This Escrow Agreement and the escrow established hereunder shall terminate upon receipt by Escrow Agent of the written notice from Lessor specified in Section 6(c) or Section 6(d) hereof. 11. In the event of any disagreement between the undersigned or any of them, and /or any other person, resulting in adverse claims and demands being made in connection with or for any moneys involved herein or affected hereby, Escrow Agent shall be entitled at its option to refuse to comply with any such claim or demand, so long as such disagreement shall continue, and in so refusing Escrow Agent may refrain from making any delivery or other disposition of any moneys involved herein or affected hereby and in so doing Escrow Agent shall not be or become liable to the undersigned or any of them or to any person or party for its failure or refusal to comply with such conflicting or adverse demands, and Escrow Agent shall be entitled to continue so to refrain and refuse so to act until: (a) the rights of the adverse claimants have been finally adjudicated in a court assuming and having jurisdiction of the parties and the moneys involved herein or affected hereby; or (b) all differences shall have been adjusted by agreement and Escrow Agent shall have been notified thereof in writing signed by all of the persons interested. 12. All notices (excluding billings and communications in the ordinary course of business) hereunder shall be in writing, and shall be sufficiently given and served upon the other party if delivered (a) personally, (b) by United States registered or certified mail, return receipt requested, postage prepaid, (c) by an overnight delivery by a service such as Federal Express or Express Mail from which written confirmation of overnight delivery is available, or (d) by facsimile with a confirmation copy by regular United States mail, postage prepaid, addressed to the other party at its respective address stated below the signature of such party or at such other address as such party shall from time to time designate in writing to the other party, and shall be effective from the date of mailing. 13. This Escrow Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. No rights or obligations of Escrow Agent under this Escrow Agreement may be assigned without the prior written consent of Lessor. 14. This Escrow Agreement shall be governed by and construed in accordance with the California laws of the state of California This Escrow Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no waiver, consent, modification or change of terms hereof shall bind any party unless in writing signed by all parties. -6- IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be duly executed as of the day and year first above set forth. PNC EQUIPMENT FINANCE, LLC, as Lessor By Name: Title: Address: 155 E. Broad St., 51h Floor Columbus, OH 43215 City of San Luis Obispo , as Lessee C By Name/ , ' l�'Yetr ,}�4tN� � 1-1/ Title: Interim Director of Finance & I.T. Attention: Finance Director Address: 990 Palm Street San Luis Obispo, CA 93401 U.S BANK NATIONAL ASSOCIATION, as Escrow Agent By Name: Title: Address: 10 West Broad Street, 12th Floor Columbus, OH 43215 -7- EXHIBIT 2 ESCROW AGENT FEES AND EXPENSES SET -UP FEES $250.00 payable from the Escrow Fund upon acceptance of escrow deposit. EXPENSES Any and all out -of- pocket expenses incurred by Escrow Agent will be the responsibility of Lessee and paid from the Escrow Fund. EXHIBIT 1 INVESTMENT DIRECTION LETTER U.S. Bank National Association 10 W. Broad St. CN OH TT4 Columbus, OH 43215 Re: Escrow Agreement dated as of April 28, 2016, among PNC Equipment Finance, LLC as Lessor, City of San Luis Obispo as Lessee, and U.S. Bank National Association, as Escrow Agent Ladies and Gentlemen: Pursuant to the above - referenced Escrow Agreement, $246,817.80 will be deposited in escrow with you on or about April 28, 216. Such funds shall be invested in one or more of the following qualified investments in the amounts indicated: AMOUNT OF PLEASE CHECK DESIRED QUALIFIED INVESTMENTS: INVESTMENT 1. Direct general obligations of the United States of ❑ America; 2 Obligations — the timely payment of the principal $ of and interest on which is fully and unconditionally guaranteed by the United States of America; 3 General obligations of the agencies and $ instrumentalities of the United States of America El acceptable to Lessor; 4 Money market funds whose investment $ 246.817.80 parameters target investments in securities as Id described above; IF NONE OF THE ABOVE BOXES ARE CHECKED, INVESTMENT SHALL BE MADE IN MONEY MARKET FUNDS AS DESCRIBED IN THE FOURTH CATEGORY ABOVE, UNTIL LESSEE DIRECTS OTHERWISE. Very truly yours, CITY OF SA UIS OBISPO AS LESSEE By. Name: 4e��k Johnson Title: Interim Director of Finance & I.T. IVY p i ISO City Attorney's Office 990 Palm Street, San Luis Obispo, CA 93401 -3249 805.781 . 7140 slocity org Date: April 26, 2016 Lessee: City of San Luis Obispo Lessor: PNC Equipment Finance, LLC Re: Lease Schedule No. 196140000 dated April 28, 2016, together with its Master Lease - Purchase Agreement dated April 28, 2016, by and between the above -named Lessee and the above -named Lessor Ladies and Gentlemen: I have acted as City Attorney for the Lessee with respect to the Lease Schedule, the Master Lease - Purchase Agreement and all other agreements described above or related thereto (collectively, the "Agreements ") and various related matters, and in this capacity have reviewed a duplicate original or certified copy of the Agreements and such other documents as I have deemed necessary for the purposes of this opinion. Based upon the examination of such documents, it is my opinion that: 1. Lessee is a political subdivision of the State of California (the "State ") duly organized, existing and operating under the Constitution and laws of the State. 2. Lessee is authorized and has power under State law to enter into all of the Agreements, and to carry out its obligations thereunder and the transactions contemplated thereby. 3. The Agreements and all other documents related thereto have been duly authorized, approved, and executed by and on behalf of Lessee, and each of the Agreements is a valid and binding contract of Lessee enforceable in accordance with its terms, except to the extent limited by State and Federal law affecting creditor's remedies and by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights. 4. The authorization, approval and execution of the Agreements and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all applicable Local, State and Federal laws (including open meeting laws and public bidding and property acquisition laws). 5. To the best of my knowledge, there is no litigation or proceeding pending before any court, administrative agency or governmental body, that challenges: the organization or existence of Lessee; the authority of its officers; the proper authorization; approval and execution of any of the Agreements or any documents relating thereto; the appropriation of monies to make payments under the Agreements for the current fiscal year; or the ability of Lessee otherwise to perform its obligations under the Agreements and the transactions contemplated thereby. 6. Lessee is a political subdivision of the State as referred to in Section 103 of the Internal Revenue Code of 1986, as amended, and the related regulations and rulings thereunder. The opinions set forth above are subject to the following qualifications- 1. The enforceability of the City's obligations under the Agreements may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity of at law). 2. No opinion is rendered with respect to federal or state tax laws; federal or state securities laws; blue sky laws; indemnification provisions or choice of law provisions. 3. The undersigned is a member of the Bar of the State of California and accordingly does not purport to be an expert on, or to be qualified to express any opinion herein concerning, nor does the undersigned express any opinions herein concerning any law other than the federal laws of the United States of America and the laws of the State of California, excluding however, federal and state securities laws, blue sky laws and federal and state tax laws. This letter is furnished to the Lessor pursuant to the Agreements. No attorney - client relationship has existed or exists between us and the Lessor by virtue of this letter. This letter is not to be used, circulated, quoted, or otherwise referred to, nor is it to be filed with any person or referred to, in whole or in part, in any other document; provided that a copy of this letter may be included with the transcript of proceedings relating to the Agreements. This letter is not intended to, and may not be, relied upon any party to whom it is not specifically addressed. Lessor, its Assignee and any of their assigns may rely upon this opinion however, the City hereby disclaims any obligation to update any of the matters addressed in this letter. Very r y y ours, X h tine Dietrick, City Attorney City of San Luis Obispo CALIFORNIA JOINT POWERS INSURANCE AUTHORITY CERTIFICATE OF LIABILITY" PROTECTION In accordance with the provisions of Article 1 1(a) of the Joint Powers Agreement creating the CALIFORNIA JOINT POWERS INSURANCE AUTHORITY, the Executive Committee has designated a Joint Liability Protection Program for the Members. City of San Luis Obispo including its , along with all its commissions, agencies and employees thereof, is protected in accordance with the terms and provisions of the CALIFORNIA JPIA Liability Protection Program. This Certificate is evidence of the Member's participation in the Liability Protection Program during the period of July 1, 2015 to July 1, 2016. The CALIFORNIA JOINT POWERS INSURANCE AUTHORITY will investigate, defend and /or pay all claims, settlements and final judgements which come within the provisions of the CALIFORNIA JPIA Memorandum of Coverage and any endorsements thereto. CA( IPOUNIA P - I A CALIFORNIA JOINT POWERS INSURANCE AUTHORITY Jonathan R. Shull, Chief Executive Officer CALIFORNIA JOINT POWERS INSURANCE AUTHORITY CERTIFICATE OF WORKERS' COMPENSATION PROTECTION AII101,�N. IA CALIFORNIA JOINT POWERS INSURANCE AUTHORITY has complied with the requirements of the Director of Industrial Relations under the provisions of Section 3700 of the Labor Code of the State of California. City of San Luis Obispo its employees, , and other legally authorized or appointed committees or commissions, are covered in accordance with California Labor Law for the period of July 1, 2015 to July 1, 2016. CALIFORNIA JOINT POWERS INSURANCE AUTHORITY Jonathan R. Shull, Chief Executive Officer THREE PARTY AGREEMENT Dated as of April 28, 2016 "Lessee" means City of San Luis Obispo "Schedule" means Lease Schedule No. 196140000 Dated April 28, 2016, together with its Schedule A -1 Reference is made to the Lease Schedule ( "Schedule ") and to the Master Lease - Purchase Agreement ( "Master Lease ") identified in said Lease Schedule, described above between PNC Equipment Finance, LLC ( "Lessor ") and the Lessee identified above which relates to Equipment described in Schedule A -1 to the Lease Schedule attached therein ( "Equipment ") to be supplied by Pierce Manufacturinq Inc. ( "Supplier "). For good and valuable consideration, receipt of which is hereby acknowledged, Lessee, Lessor and Supplier hereby agree as follows: 1. Notwithstanding anything to the contrary in the Lease Schedule, Lessee hereby notifies Lessor that the Equipment has not yet been delivered to Lessee and the Equipment has not yet been accepted by Lessee for purposes of the Lease Schedule. Lessee agrees to execute and deliver to Lessor a Delivery and Acceptance Certificate in the form attached hereto as Exhibit A upon the circumstances set forth in said Certificate. 2. All parties hereto agree that the Purchase Price of the Equipment shall be as set forth below if said Purchase Price is paid on or before the Advance Payment Date set forth below: Purchase Price: $869,806.17 Sales Tax: $66,079.12 Vendor Discounts: $41,235.00 Purchase Price to be Escrowed: $246,817.80 Advance Payment Date: April 28, 2016 3. Upon execution of the Lease Schedule and delivery of all documents relating thereto required by Lessor, Lessee agrees that it shall pay the Lessee Down Payment stated below and Lessor agrees that it shall pay the balance of the Purchase Price (the "Amount Financed ") stated below. Lessee agrees that the Lease Term and Lessee's obligation to pay Rent Payments shall commence on the date set forth in the Lease Schedule notwithstanding the delivery of the Equipment at a later date. Lessee Down Payment: $0.00 Trade In: $0.00 Amount Financed: $1,141,468.09 4. (a) Supplier anticipates that it shall deliver the Equipment to Lessee by the Anticipated Delivery Date set forth below. Anticipated Delivery Date. May 28, 2017 (b) Supplier hereby agrees that it shall deliver the Equipment to Lessee no later than the Outside Delivery Date set forth below and that such Equipment shall comply with all specifications and requirements of Lessee and with the terms and conditions of any purchase order /purchase agreement relating thereto. Outside Delivery Date: July 28, 2017 5. If for any reason whatsoever Supplier fails to comply with its agreements set forth in subparagraph 4(b) of this Agreement by the Outside Delivery Date for any piece of Equipment (the "Delayed Equipment "), and the Lessee has not agreed to revise the Outside Delivery Date with respect to such Delayed Equipment, then Supplier hereby agrees as follows only for the Delayed Equipment: (a) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessee the Lessee Down Payment for the Delayed Equipment plus interest at the Prime Rate plus one percent (1 %) per annum from the Advance Payment Date to the date of such payment; (b) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessor for the Delayed Equipment the Amount Financed plus interest at the Prime Rate plus one percent (1 %) per annum from the Advance Payment Date to the date of such payment; and (c) "Prime Rate" means the prime rate of interest as published from time to time in the Wall Street Journal. If there is more than one piece of Equipment subject to the Lease, and some of the Equipment is delivered in accordance with subparagraph 4(b) of this Agreement, the payments owed pursuant to the Lease shall be modified to reflect only the obligations due on the Equipment that was delivered pursuant to subparagraph 4(b) of this Agreement. The new payment obligation will be determined based on the amount financed for the Equipment delivered to the Lessee, and based on the interest rate in effect as of the date of Lease commencement. 6. If Supplier makes the payments described in paragraph 5 above for the Delayed Equipment under the circumstances set forth above and if Lessee has otherwise paid and performed its obligations under the Lease Schedule as of such payment date for the Delayed Equipment, then Lessee and Lessor agree that the Lease Schedule shall terminate as of the date of such payments by Supplier as to the Delayed Equipment only. Lessee's obligations shall continue unabated for the Equipment that was delivered pursuant to subparagraph 4(b) of this Agreement. 7. Supplier agrees that a Performance Bond will be issued which names the Supplier as Principal, the Lessee as Obligee and the Lessor as Additional Obligee. This Performance Bond will apply solely to the terms and conditions of the purchase order /purchase agreement, including related equipment specifications and warranties, as issued by the lessee and accepted by the Supplier. The "Contract Date" referred to in the Performance Bond shall be the date of the Three Party Agreement. Except as expressly set forth herein, the Lease Schedule and the terms and conditions of the purchase order /purchase agreement for the equipment remain unchanged and in full force and effect. 8. Except as expressly set forth herein, the Lease Schedule and terms and conditions of the purchase order /purchase agreement for the Equipment remain unchanged and in full force and effect. IN WITNESS WHEREOF, the duly authorized officers of the parties set forth below hereby execute and deliver this Agreement as of the date first written above. City of San Luis Obispo PNC Equipment Finance, LLC ( "Lessee ") ( "Lessor ") By: By: Title: Interim Director of Finance & I.T. Title: Pierce Manufacturing Inc. (" Supplie ') By: Title: ��nd ►!'&$u ^• Form 8038 -G Information Return for Tax - Exempt Governmental Obligations (Rev. September 2011) ► Under Internal Revenue Code section 149(e) OMB No. 1545 -0720 01- See separate instructions. Department of the Treasury P Internal Revenue Service Caution: If the issue rice is under $100,000, use Form 8038 -GC. MIMM Reporting Authority If Amended Return, check here ► CJ 1 Issuer's name 2 Issuer's employer identification number (EIN) City of San Luis Obispo 94.6000781 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions) 3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address) 990 Palm Street B City, town, or post office, state, and ZIP code San Luis Obispo, CA 93401 8 Name of issue Lease # 196140000 Room /suite 5 Report number (For IRS Use Only) 3 7 Date of issue 4/28/2016 9 CUSIP number 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b Telephone number of officer or other instructions) employee shown on 10a Vilma Warner- Finance Operations Manager 805 -781 -7127 Description of Obligations. Complete for the entire issue for which this form is being filed. a Final maturity Issue (c) Stated redemption (d) Weighted () y date () p rice price at maturity average maturity (e) Yield 21 412812021 1,141,468.09 $ 1,141,469.09 3.033710 years 1.70 0/❑ Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Type of Issue (enter the issue price). See the instructions and attach schedule. . . . . . . . . 11 12 13 14 15 16 17 18 19 20 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . Health and hospital . . . . . . . . . . . . . . . . . . . . . . . Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . Environment (including sewage bonds) . . . . . . . . . . . . . . . . Housing . . . . . . . . . . . . . . . . . . . . . Utilities . . . . . . . . . . . . . . . . . . . . Other. Describe ► If obligations are TANS or RANs, check only box 19a . . . . . . . . . . . . . If obligations are BANS, check only box 19b . . . . . . . . . . . . . . . If obligations are in the form of a lease or installment sale, check box . . . . . . . . . . . . . . . . . . . . . . ► ❑ ► ❑ ► ❑ 11 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 12 1,141,468 09 13 Proceeds used for bond issuance costs (including underwriters' discount) . . 24 14 1,141,468 09 15 Proceeds used for credit enhancement . . . . . . . . . . . . 25 16 17 Proceeds allocated to reasonably required reserve or replacement fund . 26 18 27 Description of Obligations. Complete for the entire issue for which this form is being filed. a Final maturity Issue (c) Stated redemption (d) Weighted () y date () p rice price at maturity average maturity (e) Yield 21 412812021 1,141,468.09 $ 1,141,469.09 3.033710 years 1.70 0/❑ Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . . . . . 22 23 Issue price of entire issue (enter amount from line 21, column (b)) . . . . . 23 1,141,468 09 24 Proceeds used for bond issuance costs (including underwriters' discount) . . 24 25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 29 Total (add lines 24 through 28) . . . . . . . . . . . . . . . . . . . . . . . 29 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . . 30 1,141,468 09 Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded ► years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . ► years 33 Enter the last date on which the refunded bonds will be called (MM /DD/YYYI) . . . . , , No- 34 Enter the date(s) the refunded bonds were issued ► (MM /DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 63773S Form 8038 -G (Rev. 9 -2011) Form 8038 -G (Rev. 9 -2011) Page 2 lll►fESC @f�aneOLls 35 Enter the amoulil of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 _ 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) . . . . . . . . . . . . 36a b Enter the final maturity date of the GIC Blo- c Enter the name of the GIC provider ► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . 37 38a If this issue is a loan made from the proceeds of another tax- exempt issue, check box ► ❑ and enter the following information: b Enter the date of the master pool obligation ► c Enter the EIN of the issuer of the master pool obligation ► d Enter the name of the issuer of the master pool obligation ► 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► ❑✓ 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . . . ► ❑ 41a If the issuer has identified a hedge, check here ► ❑ and enter the following information: b Name of hedge provider IN- C Type of hedge ► d Term of hedge No- 42 If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box . . . . . . . . ► ❑ 44 If the issuer has established written procedures to monitor the requirements of section 148, check box . . . . . ► ❑ 45a If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount of reimbursement . . . . . . . . . ► b Enter the date the official intent was adopted ► Signature and Consent Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS's disclosure of the issuer's return information, as necessary to process ti &&turn, to the person that I have authorized above. Paid Preparer Use Only Firm's name ► Firm's address ► 's authorized representative name I Preparer's signature Derek Johnson Interim Director of Finance type or print name and title Date Check ❑ if self - employed Firm's EIN ► Form 8038-G (Rev. 9-2011)