HomeMy WebLinkAboutItem No. 19 Auth to Refinance the 2018 Streetlight Financing AgreementCity Council Agenda Report
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 21-287
Agenda Date: 8/10/2021 Status: Approval FinalVersion: 1
File Type: Council Business
Item
In Control: City Council / Successor Agency
Agenda Number: 19)
Authorization to Refinance the 2018 Streetlight Financing Agreement with Banc of America
Leasing & Capital
Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA,
AUTHORIZING THE EXECUTION AND DELIVERY OF AN AMENDED AND RESTATED EQUIPMENT
LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA LEASING & CAPITAL, LLC AND AN
AMENDED AND RESTATED PAYING AGENT AGREEMENT; AND AUTHORIZING CERTAIN ACTIONS
IN CONNECTION THEREWITH.
Page 1 City of Lake Elsinore Printed on 8/5/2021
REPORT TO CITY COUNCIL
To: Honorable Mayor and Members of the City Council
From: Jason Simpson, City Manager
Prepared by: Shannon Buckley, Director of Administrative Services
Date: August 10, 2021
Subject: Authorization to Refinance the 2018 Streetlight Financing Agreement with
Banc of America Leasing & Capital
Recommendations
Adopt RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE,
CALIFORNIA, AUTHORIZING THE EXECUTION AND DELIVERY OF AN AMENDED AND
RESTATED EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC OF AMERICA
LEASING & CAPITAL, LLC AND AN AMENDED AND RESTATED PAYING AGENT
AGREEMENT; AND AUTHORIZING CERTAIN ACTIONS IN CONNECTION THEREWITH.
Background and Discussion
As part of the City’s ongoing effort to implement budgetary savings and reduce costs, staff has
identified an opportunity to take advantage of favorable interest rates to refinance the
outstanding 2018 Lease. This refinancing will save the City’s General Fund more than $468,795
in total gross savings. The new Lease will be secured by Rental Payments assets and
structured under a “master lease” bond structure.
The City entered into the 2018 Equipment Lease/Purchase Agreement (the “2018 Lease”) in
November 2018 with Banc of America Leasing & Capital LLC. The 2018 Lease was originally
issued to finance the acquisition of certain streetlights and the installation of certain energy
savings equipment (the “Improvements”). The 2018 Lease is secured by the City’s General
Fund.
The 2018 Lease is currently outstanding in the approximate principal amount of $3,371,468 with
a fixed interest rate of 5.58%. While the 2018 Lease’s final maturity is December 1, 2033, the
2018 Lease is eligible to be refinanced.
Implementation of monetary policies by the U.S. Federal Reserve have resulted in lower interest
rates in an effort to provide further stimulus to the economy. The City’s municipal advisor, Urban
Futures, Inc., explored the opportunity to realize long-term interest expense savings and
improve cash flow by refinancing the costs of the Improvements by prepaying the 2018 Lease.
In order to achieve savings from the current low interest rate environment, staff’s
recommendation is to enter into the Amended and Restated Equipment Lease/Purchase
Agreement (the “2021 Lease”) at a lower interest rate than the 2018 Lease. Through the City’s
municipal advisor, the City secured an interest rate lock of 3.07% expiring on August 17, 2021
Streetlight Refinance with Banc of America Leasing & Capital, LLC
August 10, 2021
Page 2
from the existing lender of the 2018 Lease, Banc of America Leasing & Capital LLC (the
“Bank”). The 2021 Lease will not extend the final term and will maintain the same final maturity
date of December 1, 2033.
In terms of the economics of the proposed refinancing transaction, the total cash flow savings is
estimated to be approximately $468,795 over the term of the 2021 Lease. Average annual cash
flow savings will be approximately $37,504. The present value savings are estimated at 12.06%
as a percentage of the refunded principal amount. Typically, issuers of refunding bonds should
consider refunding outstanding debt when net present value savings exceed a minimum
threshold of 3%-5%. The current proposed refunding transaction, 2021 Lease, is above the
minimum threshold. The actual refunding savings will be finalized once the final issuance
expenses and closing costs are confirmed.
The 2021 Lease will not require a bond credit rating or a preliminary and final official statement
as the 2021 Lease will be directly purchased by the existing Bank. The City signed the Bank’s
offer letter to lock-in the interest rate through August 17, 2021, with such letter contingent upon
the City Council approving the Resolution authorizing the issuance of the 2021 Lease. The
proposed 2021 Lease is expected to close on August 17, 2021.
Fiscal Impact
All refinancing-related costs will be paid from the 2021 Lease proceeds. The estimated average
annual cash flow savings will be approximately $37,504. The total estimated cash flow savings
will be approximately $468,795 over the term of the financing. If approved, the budget revisions
will be presented to the City Council as part of the quarterly budget review process.
Exhibits
A - Resolution - Authorizing Amended and Restated Equipment Lease-Purchase Agreement
B - Amended Restated Lake Elsinore Taxable Streetlights Lease Agreement (LETSLA)
C – Exhibit A to Amended and Restated LETSLA – Good Faith Estimates
D – Amended and Restated Paying Agent Agreement
4818-5944-3188v4/022042-0040
RESOLUTION NO. _____
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
ELSINORE, CALIFORNIA, AUTHORIZING THE EXECUTION
AND DELIVERY OF AN AMENDED AND RESTATED
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH BANC
OF AMERICA LEASING & CAPITAL, LLC AND AN AMENDED
AND RESTATED PAYING AGENT AGREEMENT; AND
AUTHORIZING CERTAIN ACTIONS IN CONNECTION
THEREWITH
Whereas, the City of Lake Elsinore (the “City”) is a municipal corporation and general law city
duly organized and existing under and pursuant to the Constitution and laws of the State of
California; and
Whereas, the City previously financed the acquisition of certain street lights and the installation
of certain energy savings equipment thereto (the “Improvements”); and
Whereas, in order to accomplish such financing, the City entered into an Equipment
Lease/Purchase Agreement, dated as of November 1, 2018, (the “Prior Agreement”) with Banc
of America Leasing & Capital, LLC (“Banc of America”); and
Whereas, the City desires to refinance the costs of the Improvements by prepaying the Prior
Agreement; and
Whereas, the City is in receipt of an offer for proposed financing dated July 29, 2021 (the “Term
Sheet”) from Banc of America providing material terms related to the refinancing of the costs of
the Improvements and prepayment of the Prior Agreement; and
Whereas, the City has determined that it would be in the best interest of the City and the
residents of the City to authorize the execution and delivery of an Amended and Restated
Equipment Lease/Purchase Agreement (the “Agreement”) between Banc of America and the
City for the purpose of prepaying the Prior Agreement pursuant to the Term Sheet, together with
an Amended and Restated Paying Agent Agreement (the “Paying Agent Agreement”) among
Banc of America, the City, the Western Riverside Council of Governments and Wilmington
Trust, National Association.
NOW, THEREFORE, THE CITY COUNCIL DOES HEREBY RESOLVE, ORDER AND
DETERMINE AS FOLLOWS:
Section 1. Each of the above recitals is true and correct.
Section 2. The form of each of the Agreement and the Paying Agent Agreement presented
at this meeting is hereby approved, and the Mayor, the City Manager, and any designee thereof
(the “Authorized Officers”), are each hereby authorized and directed, for and in the name of the
City, to execute and deliver the Agreement and the Paying Agent Agreement in substantially
said forms, with such changes, insertions and omissions therein as the Authorized Officer
executing the same may require or approve, such approval to be conclusively evidenced by the
execution and delivery thereof; provided, however, that the principal amount of the Agreement
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shall not exceed $3,700,000 and the interest rate on the Agreement shall not exceed 3.4%
(except in the case of any increase due to a late payment or a default).
Section 3. The City Clerk or other appropriate City officer is hereby authorized and directed
to attest the signature of the Authorized Officers or of such other person or persons as may
have been designated by the Authorized Officers, and to affix and attest the seal of the City, as
may be required or appropriate in connection with the execution and delivery of the Agreement
and the Paying Agent Agreement.
Section 4. The officers, employees and agents of the City are hereby authorized and
directed, jointly and severally, to do any and all things which they may deem necessary or
advisable and to execute and deliver any and all documents which they may deem necessary
and advisable in order to consummate the entry into the Agreement and the Paying Agent
Agreement and otherwise to carry out, give effect to and comply with the terms and intent of this
Resolution. All actions heretofore taken by the officers, employees and agents of the City with
respect to the transactions set forth above, including, but not limited to, the execution of the
Term Sheet, are hereby approved, confirmed and ratified.
Section 5. The City Council acknowledges that the good faith estimates required by Section
5852.1 of the California Government Code are attached hereto as Exhibit A and are available to
the public at the meeting at which this Resolution is approved. The City Council hereby finds
that the requirements of Section 5852.1 have been satisfied.
Section 6. The Authorized Officers are each hereby designated to act as authorized
representatives of the City, as Lessee, for purposes of the Agreement and the Paying Agent
Agreement until such time as the governing body of the City, as Lessee, shall designate any
other or different authorized representative for purposes of the Agreement and the Paying Agent
Agreement.
Section 7. This Resolution shall be effective immediately upon adoption.
Passed and Adopted on this 10th day of August, 2021.
_____________________________
Robert E. Magee
Mayor
ATTEST:
__________________________
Candice Alvarez, MMC
City Clerk
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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF LAKE ELSINORE )
I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, do hereby certify
that Resolution No. 2021-______ was adopted by the City Council of the City of Lake Elsinore,
California, at the Regular meeting of August 10, 2021, and that the same was adopted by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Candice Alvarez, MMC, City Clerk
4818-5944-3188v4/022042-0040
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Amended and
Restated Equipment Lease/Purchase Agreement with Banc of America Leasing & Capital, LLC
(the “Agreement”), in accordance with California Government Code Section 5852.1. Such good
faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to
the City (the “Municipal Advisor”), each with respect to the Agreement.
Principal Amount. The Municipal Advisor has informed the City that, based on the
City’s financing plan and current market conditions, its good faith estimate of the aggregate
principal amount of the Agreement is $3,371,468.46 (the “Estimated Principal Amount”).
True Interest Cost of the Agreement. The Municipal Advisor has informed the City
that, assuming the Estimated Principal Amount, and based on the interest rate provided by
Banc of America Leasing & Capital, LLC, at the time of preparation of such estimate, its good
faith estimate of the true interest cost of the Agreement, which means the rate necessary to
discount the amounts payable on the respective principal and interest payment dates to the
purchase price received for the Agreement, is 3.07%.
Finance Charge of the Agreement. The Municipal Advisor has informed the City that,
assuming the Estimated Principal Amount, and based on the interest rate provided by Banc of
America Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith
estimate of the finance charge for the Agreement, which means the sum of all fees and charges
paid to third parties (or costs associated with the Agreement), is $40,000.00.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City
that, assuming the Estimated Principal Amount, and based on the interest rate provided by
Banc of America Leasing & Capital, LLC, at the time of preparation of such estimate, its good
faith estimate of the amount of proceeds expected to be received by the City, less the finance
charge of the Agreement, as estimated above, and any reserve fund funded with proceed s of
the Agreement, is $3,331,468.46.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming
the Estimated Principal Amount, and based on the interest rate provided by Banc of America
Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith estimate of the
total payment amount, which means the sum total of all payments the City will make to pay debt
service on the Agreement, plus the finance charge for the Agreement, as described above, not
paid with the proceeds of the Agreement, calculated to the final maturity of the Agreement, is
$4,059,064.76.
The foregoing estimates constitute good faith estimates only. The actual principal
amount of the Agreement, the true interest cost thereof, the finance charges thereof, the amount
of proceeds received therefrom and total payment amount with respect thereto may differ from
such good faith estimates due to (a) the actual closing date being different than the date
assumed for purposes of such estimates, (b) the actual original principal amount being different
from the Estimated Principal Amount, (c) the actual debt service payments on the Agreement
being different than the debt service payments assumed for purposes of such estimates, (d) the
actual interest rate being different than the interest rate estimated for purposes of such
A-2
4818-5944-3188v4/022042-0040
estimates, (e) other market conditions, or (f) alterations in the City’s financing plan, or a
combination of such factors. The actual closing date of the Agreement and the actual principal
amount will be determined by the City based on the timing of the need for proceeds and other
factors. Market interest rates are affected by economic and other factors beyond the control of
the City.
@BCL@5011D12F
2267060
AMENDED AND RESTATED EQUIPMENT LEASE/PURCHASE AGREEMENT
(IMPLEMENTATION AGREEMENT)
This Amended and Restated Equipment Lease/Purchase Agreement (the “Agreement”)
dated as of August 17, 2021, and entered into between Banc of America Leasing & Capital,
LLC, a Delaware limited liability company (together with its successors, assigns and transferees,
and as more particularly defined herein, “Lessor”), and the City of Lake Elsinore, a city existing
under the laws of the State of California (“Lessee”).
W I T N E S S E T H:
WHEREAS, Lessee and Lessor previously entered into that certain Equipment
Lease/Purchase Agreement dated as of November 1, 2018 (the “Original Agreement”) to finance
the acquisition, installation and retrofitting of certain Equipment (as such term is defined herein)
to be leased by Lessee, subject to the terms and conditions thereof;
WHEREAS, Lessee wishes to amend and restate certain terms in the Original Agreement,
and the Lessor has agreed to do so, on the terms set forth herein; and
WHEREAS, Lessee is authorized under the constitution and laws of the State to enter into
this Agreement for the purposes set forth herein.
NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which
is hereby acknowledged, and in consideration of the premises hereinafter contained, the parties
hereby agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below
unless the context clearly requires otherwise:
“Acquisition Amount” means $3,371,468.46.
“Additional Lessee-Owned Streetlights” means all streetlights and related fixtures owned
by Lessee and located within the City of Lake Elsinore as of the Commencement Date, described
on Exhibit G attached hereto, and all replacements, repairs, restorations, modifications and
improvements thereof or thereto; provided that “Additional Lessee-Owned Streetlights” shall not
include Lessee-Owned Streetlights or Retired Streetlights. As of the Commencement Date, the
total amount of Additional Lessee-Owned Streetlights described on Exhibit G is equal to [___]
streetlights.
“Agreement” means this Amended and Restated Equipment Lease/Purchase Agreement,
including the exhibits hereto, together with any amendments and modifications to the Agreement
pursuant to Section 13.04.
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“Closing Date” has the meaning set forth in the Pole Agreement.
“Collateral” has the meaning provided in Section 6.02.
“Collection Fund” has the meaning set forth in the Paying Agent Agreement.
“Commencement Date” means the date when Lessee’s obligation to pay rent commences
hereunder, which shall be August 17, 2021.
“Contract Rate” means the rate identified as such in the Payment Schedule.
“Disposed Equipment Collateral Value” means an amount equal to the product obtained
by multiplying (A) the Prepayment Price shown on the Payment Schedule for the Rental
Payment Date next preceding the Partial Prepayment Date (or if the Partial Prepayment Date
occurs prior to the first Rental Payment Date for which the Prepayment Price is shown, then the
product obtained by multiplying the then aggregate unpaid principal component of Rental
Payments outstanding on the Partial Prepayment Date times 102%) times (B) a fraction (i) the
numerator of which equals the cost of the Equipment (including any costs of installation or other
related costs financed or refinanced under this Agreement) located in or on such property,
facilities and buildings subject to demolition, disposition, damage, destruction, casualty, title
defect or condemnation event, as the case may be, and (ii) the denominator of which equals the
total cost of the Equipment financed under this Agreement.
“Disposed Equipment Prepayment Amount” means, as of a Partial Prepayment Date, an
amount equal to the Disposed Equipment Collateral Value.
“Equipment” means (a) the equipment, fixtures and other goods and property (including
all goods as defined in Article 9 of the California Commercial Code) listed in the Equipment
Schedule and all replacements, repairs, restorations, modifications and improvements thereof or
thereto made pursuant to Article V or Section 8.01, (b) the Lessee-Owned Streetlights and (c) the
Additional Lessee-Owned Streetlights; provided that Equipment shall exclude any Retired
Streetlights. Whenever reference is made in this Agreement to Equipment, such reference shall
be deemed to include all such replacements, repairs, restorations, modifications and
improvements of or to such Equipment.
“Equipment Costs” means the total cost of the Equipment, including related costs such as
freight, installation and sales and other taxes, capitalizable costs, and costs of issuance incurred
in connection with the acquisition, installation and/or financing of the Equipment.
“Equipment Schedule” means the equipment schedule attached hereto as Exhibit A and
made a part hereof.
“Event of Default” means an Event of Default described in Section 12.01.
“Event of Non-appropriation” means the failure of Lessee’s governing body to
appropriate or otherwise make available funds to pay Rental Payments under this Agreement
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following the Original Term or then current Renewal Term sufficient for the continued
performance of this Agreement by Lessee.
“Implementation Agreement” means the Implementation Agreement dated as of
September 27, 2018 between WRCOG and Lessee relating to the acquisition and maintenance of
the Equipment, as the same may be amended by WRCOG and Lessee, with the prior written
consent of Lessor.
“Inoperable Component” has the meaning provided in Section 5.04.
“Lease Term” means the Scheduled Term upon its expiration or as terminated as
provided in Section 3.03.
“Lessee” means the entity referred to as Lessee in the first paragraph of this Agreement.
“Lessee-Owned Streetlights” means the streetlights and related fixtures owned by
Lessee, as identified in Exhibit A attached hereto, as may be amended with the prior written
consent of Lessor in its discretion, and located within the City of Lake Elsinore as of the
Commencement Date, (x) which have been acquired, constructed, furnished and installed with
amounts disbursed pursuant to the Original Agreement (and thereby constituting Equipment
hereunder) and/or (y) on, about and to which a portion of the Equipment has been acquired,
constructed, furnished and installed with amounts disbursed pursuant to the Original Agreement;
provided that “Lessee-Owned Streetlights” shall not include Retired Streetlights.
“Lessor” means (a) the entity referred to as Lessor in the first paragraph of this
Agreement and its successors or (b) any assignee or transferee of any right, title or interest of
Lessor in and to this Agreement, including the Equipment, the Rental Payments and other
amounts due hereunder, pursuant to Section 11.01, but does not include any entity solely by
reason of that entity retaining or assuming any obligation of Lessor to perform hereunder.
“Lien” means any lien (statutory or otherwise), security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, preference, priority or
other security or preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any jurisdiction).
“Light Pole License Agreement” means that certain No-Fee Light Pole License
Agreement for Wireless Attachment between Southern California Edison and Lessee dated as of
May 30, 2017, including amendments and supplements thereto relating to the issuance of
licenses thereunder to Southern California Edison in order for Southern California Edison to
attach certain wireless equipment (the “SCE Equipment”) to the Streetlights and Lessee’s poles
and facilities for the purpose of operating or managing the provision of electricity to the
Streetlights, all as further described therein. Nothing in this Agreement shall require Lessee to
maintain such Light Pole License Agreement beyond the term of such agreement.
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“Material Adverse Change” means any change in Lessee’s creditworthiness that could
reasonably be expected to have a material adverse effect on (a) the financial condition or
operations of Lessee, or (b) Lessee’s ability to perform its obligations under this Agreement.
“Material Adverse Effect” means any event or occurrence which could (a) adversely
affect the rights, interests, remedies or security of the Lessor under this Agreement or with
respect to the Collateral, (b) impair the ability of the Lessee to perform its obligations under this
Agreement, the WRCOG Agreements and/or any Vendor Agreement or (c) have an adverse
effect upon the legality, validity, binding effect or enforceability against the Lessee of this
Agreement, the WRCOG Agreements and/or any Vendor Agreement.
“Original Term” means the period from the Commencement Date until the end of the
fiscal year of Lessee in effect at such Commencement Date.
“Outstanding Balance” means the amount that is shown for each Rental Payment Date
under the column titled “Outstanding Balance” on the Payment Schedule.
“Partial Prepayment Date” means a business day selected by Lessee that is the earlier of
the next Rental Payment Date or 65 days after the casualty, title defect or condemnation event
(or such other date approved in writing by Lessor), and shall be the date that Lessee exercises its
right of partial prepayment following a partial casualty or condemnation event as provided in
Section 10.01(b)(2). Lessee shall provide Lessor with at least 60 days prior written notice of the
Partial Prepayment Date.
“Paying Agent Agreement” means the Amended and Restated Paying Agent Agreement
dated as of August 17, 2021 among Lessee, Lessor, WRCOG and Wilmington Trust, National
Association, as paying agent, with respect to the Collection Fund and the subaccounts therein
and which provides for the orderly distribution of payments under this Agreement and the
Implementation Agreement, as the same may be amended from time to time.
“Payment Schedule” means the payment schedule attached hereto as Exhibit B and made
a part hereof.
“Pole Agreement” means (i) that Purchase and Sale Agreement between Southern
California Edison and Lessee dated as of May 30, 2017, including amendments and supplements
thereto (including but not limited to any amendments or supplements effectuated in the final bill
of sale from Southern California Edison), relating to, among other things, the purchase of certain
Equipment from Southern California Edison and (ii) any such other agreements, as supplemented
and amended, pursuant to which licenses are issued thereunder to Lessee in order for Lessee or
its Vendor to attach certain Equipment to Pole Owner’s poles and facilities all as further
described therein.
“Pole Owner” means Southern California Edison, its successors or assigns, or any other
owner of the streetlights, brackets, photocells and poles to be acquired by Lessee.
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“Prepayment Price” means the amount provided under the column titled “Prepayment
Price” in the Payment Schedule minus the amount of any partial prepayment pursuant to Section
10.01(b) paid prior to the date of prepayment pursuant to Section 10.01(a).
“Principal Portion” means the amount that is shown for each Rental Payment Date
under the column titled “Principal Portion” on the Payment Schedule.
“Professional Services Agreement” means (a) the Amended and Restated Professional
Services Agreement dated as of March 27, 2018 between WRCOG and Siemens Industry Inc.,
Intelligent Traffic Systems (the “Consultant”) together with Appendix 4 attached thereto
executed by WRCOG, the Consultant and Lessee, as the same may be amended from time to
time and (b) any subsequent agreement entered into between WRCOG and a third party provider
and accepted and agreed to in writing by the Lessee for the services described therein, as the
same may be amended from time to time.
“Real Property” means real estate where the Equipment is and/or will be located.
“Real Property Issue” has the meaning provided in Section 2.01(t).
“Related Agreements” means this Agreement and each of the WRCOG Agreements.
“Renewal Terms” means the consecutive renewal terms of this Agreement, the first of
which commences immediately after the end of the Original Term and each having a duration
and term coextensive with each successive fiscal year of Lessee; provided that the final such
Renewal Term shall commence on the first day of the last such fiscal year and end on the first
business day after the last scheduled Rental Payment Date.
“Rental Payment Date” means each date on which Lessee is required to make a Rental
Payment under this Agreement as specified in the Payment Schedule.
“Rental Payment Subaccount” has the meaning set forth in the Paying Agent Agreement.
“Rental Payments” means the basic rental payments payable by Lessee on the Rental
Payment Dates and in the amounts as specified in the Payment Schedule, consisting of a
principal component and an interest component, and in all cases sufficient to repay such
principal component and interest thereon at the applicable Contract Rate.
“Replaced Equipment” has the meaning provided in Section 8.01.
“Replacement Equipment” has the meaning provided in Section 8.01.
“Retired Streetlights” means in the aggregate over the Lease Term, the up to 32
Streetlights that are permitted, pursuant to Section 5.04(c) hereof, to be retired and removed from
Equipment and not replaced.
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“Scheduled Term” means the Original Term and all Renewal Terms, with a final
Renewal Term ending on December 1, 2033.
“State” means the State of California.
“Streetlights” means all Additional Lessee-Owned Streetlights and all Lessee-Owned
Streetlights, in each case, subject to Lessor’s first priority Lien under this Agreement, but shall
exclude any Retired Streetlights.
“Vendor” means the manufacturer, installer, contractor, supplier or provider of the
Equipment or services (excluding Southern California Edison and WRCOG) with respect to the
Equipment or any other person as well as the agents or dealers of the manufacturer, installer,
contractor, supplier or provider with whom Lessee arranged Lessee’s acquisition, installation,
operation, maintenance and/or servicing of the Equipment.
“Vendor Agreement” means any contract entered into by Lessee and any Vendor, as
supplemented and amended, for the acquisition, installation, maintenance and/or servicing of the
Equipment, and shall include, without limitation, the WRCOG EPA and the Professional
Services Agreement.
“WRCOG” means Western Riverside Council of Governments, a joint powers authority
formed under Government Code sections 6500 et seq.
“WRCOG Agreements” means the Implementation Agreement, the Professional Services
Agreement, the WRCOG EPA, and the Paying Agent Agreement.
“WRCOG EPA” means the Equipment Purchase Agreement dated as of June 28, 2018
between WRCOG and California Electric Supply (the “Contractor”) together with Appendix 4
attached thereto executed by WRCOG, the Contractor and Lessee, as the same may be amended
from time to time.
ARTICLE II
Section 2.01. Representations, Warranties and Covenants of Lessee. For the benefit of
Lessor, Lessee represents and warrants as of the Commencement Date (and such other dates as
may be provided herein), and covenants at all times during the Lease Term as follows:
(a) Lessee is a city, duly organized and existing under the constitution and
laws of the State, with full power and authority to enter into this Agreement and the
Related Agreements and the transactions contemplated hereby and thereby and to
perform all of its obligations hereunder and thereunder.
(b) Lessee has duly authorized the execution and delivery of this Agreement
and the Related Agreements by proper action of its governing body at a meeting duly
called, regularly convened and attended throughout by the requisite quorum of the
members thereof, or by other appropriate official approval, and all requirements have
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been met and procedures have occurred in order to ensure the validity and enforceability
of this Agreement and the Related Agreements.
(c) No event or condition that constitutes, or with the giving of notice or the
lapse of time or both would constitute, an Event of Default exists at the date hereof. No
Event of Non-appropriation has occurred or is threatened with respect to this Agreement.
(d) Lessee will do or cause to be done all things , as legally permissible,
necessary to preserve and keep in full force and effect its existence as a city of the State.
(e) Lessee has complied with such procurement and public bidding
requirements as are applicable to this Agreement and the Related Agreements and the
acquisition and installation by Lessee of the Equipment, under federal, regional, state and
local law, statute, rule, ordinance, regulation, code, license, authorization, decision,
injunction, interpretation, order or decree of any court or other governmental authority.
(f) During the Lease Term, the Equipment will be used by Lessee only for the
purpose of performing essential governmental or proprietary functions of Lessee
consistent with the permissible scope of Lessee’s authority. Lessee does not intend to
sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental
Payment (including all Renewal Terms) scheduled to be paid hereunder.
(g) Lessee has kept, and throughout the Lease Term shall keep, its books and
records in accordance with generally accepted accounting principles and practices
consistently applied, and shall deliver to Lessor (i) annual audited financial statements
(including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund
balances for budget and actual, (3) statement of cash flows, and (4) footnotes, schedules
and attachments to the financial statements) within nine months of its fiscal year end,
(ii) such other financial statements and information as Lessor may reasonably request,
and (iii) upon Lessor’s request, its annual budget for any prior five fiscal years or current
fiscal year or for the following fiscal year when approved but not later than thirty (30)
days prior to the end of its current fiscal year. The financial statements described in
subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee’s independent
auditor. Credit information relating to Lessee may be disseminated among Lessor and
any of its affiliates and any of their respective successors and assigns. All financial
statements and other information delivered to Lessor by the Lessee is correct as of the
date thereof. Since June 30, 2020, no material adverse change has occurred in the
Lessee’s financial condition that would adversely affect the Lessee’s ability to perform its
obligations hereunder.
(h) Lessee has an essential need for the Equipment and expects to make
immediate use of the Equipment. Lessee’s need for the Equipment is not temporary and
Lessee does not expect the need for any item of the Equipment to diminish during the
Scheduled Term.
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(i) The payment of the Rental Payments or any portion thereof is not (under
the terms of this Agreement or any other Related Agreement) directly or indirectly
(x) secured by any interest in property used or to be used in any activity carried on by any
person other than a state or local governmental unit or payments in respect of such
property; or (y) on a present value basis, derived from payments (whether or not to
Lessee) in respect of property, or borrowed money, used or to be used in any activity
carried on by any person other than a state or local governmental unit, except where
failure to comply with such requirement would not result in a Material Adverse Effect or
a Material Adverse Change. The Equipment will not be used or operated, directly or
indirectly, in any activity carried on by any person other than a state or local
governmental unit if it would result in a Material Adverse Effect or a Material Adverse
Change. No portion of the Acquisition Amount will be used, directly or indirectly, to
make or finance loans to any person other than Lessee if it would result in a Material
Adverse Effect or a Material Adverse Change. Lessee has not entered into any
management or other service contract with respect to the use and operation of the
Equipment that would result in a Material Adverse Effect or a Material Adverse Change.
(j) There is no pending litigation, tax claim, other proceeding or dispute (of
which Lessee is aware, has notice or has been served), or to Lessee’s best knowledge,
threatened, litigation, tax claim, proceeding or dispute against Lessee that could
materially adversely affect Lessee’s financial condition or impairs its ability to perform
its obligations under this Agreement or any Related Agreement. There is no public vote
or referendum pending, proposed or concluded, the results of which could adversely
affect Lessee’s financial condition or impairs its ability to perform its obligations under
this Agreement or any Related Agreement. Lessee will, at its expense, maintain its legal
existence in good standing and do any further act and execute, acknowledge, deliver, file,
register and record any further documents Lessor may reasonably request in order to
protect Lessor’s first priority security interest in the Equipment, the Collection Fund and
the Rental Payment Subaccount, and Lessor’s rights and benefits under this Agreement
and the Related Agreements.
(k) With respect to the Real Property: (i) Lessee is the fee owner of the Real
Property and has good and marketable title thereto, and there exists no mortgage, pledge,
Lien, security interest, charge or other encumbrance of any nature whatsoever on or with
respect to such Real Property, (ii) the Equipment will be located on improvements within,
a right-of-way that is dedicated to public use for a period that is longer than the
Scheduled Term and/or (iii) to the extent neither (i) or nor (ii) is true with respect to any
portion of the Real Property (“Non-Lessee Real Property”), then Lessee has the right to
enter onto said Non-Lessee Real Property for the purposes of returning the Equipment to
Lessor and/or exercising remedies under this Agreement on behalf of Lessor, including,
without limitation (subject to the Light Pole License Agreement), the right to physically
detach and remove the Equipment from the Non-Lessee Real Property and return the
same to Lessor. Lessee is (or upon the acquisition of the Lessee-Owned Streetlight under
the Pole Agreement, will be) the fee of owner with free and clear title to all the Lessee-
Owned Streetlights on, about and to which a portion of the Equipment is or will be
located. Lessee has the right to install, operate, maintain and remove Equipment on, to
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and from the Lessee-Owned Streetlights for a period that is longer than the Scheduled
Term, and the right, upon Lessor’s request (subject to the Light Pole License Agreement),
to physically detach and remove the Equipment from the Lessee-Owned Streetlights and
return the same to Lessor. Lessee covenants and agrees that throughout the Lease Term
and prior to the payment of the last scheduled Rental Payment and the payment of all
other amounts due hereunder, Lessee shall not, to the extent it may legally agree to do so,
transfer title to or control over, or encumber the Real Property to another entity or devote
any portion of the Real Property to another entity. The Light Pole License Agreement
does not and shall in no way impair, adversely affect or prime Lessor’s first priority Lien
on any of the Equipment under this Agreement; provided, however, Lessor acknowledges
that the Light Pole License Agreement may require the substitution of certain existing
poles and/or provision of certain notices prior to the removal of the Equipment.
(l) The portion of the Equipment that is or will be subject to a Pole
Agreement is and will be located on within a right-of-way that is dedicated to public use
for a period that is longer than the Scheduled Term. Based solely on Southern Calif ornia
Edison’s representations in the Pole Agreement, Southern California Edison owns,
operates and maintains overhead electric distribution facilities, including distribution
poles on which the portion of the Equipment is to be installed, within the political
jurisdiction of Lessee. Any streetlights (other than Lessee-Owned Streetlights and
Additional Lessee-Owned Streetlights) on, about and to which any portion of the
Equipment is to be acquired, constructed, furnished and installed are all subject to the
applicable Pole Agreement, which is currently in full force and effect. Lessee has
obtained all necessary licenses, permits, approvals or other authorizations, if any, issued
by any applicable governmental authority and/or the Pole Owner in accordance with the
applicable Pole Agreement for the specific locations for the Equipment to be installed.
(m) (i) The portion of the Equipment that is installed on Lessee-Owned
Streetlights are and will be located on, or on improvements within, a right-of-way that is
dedicated to public use for a period that is longer than the Scheduled Term. Lessee is
entitled to the benefit and use of such right-of-way for the Lessee-Owned Streetlights and
has good and marketable title to the Lessee-Owned Streetlights on, about and to which a
portion of the Equipment is or will be located. Subject to the Light Pole License
Agreement, there exists no mortgage, pledge, Lien, security interest, charge or other
encumbrance of any nature whatsoever on or with respect to the Lessee-Owned
Streetlights, except under this Agreement. The number of Lessee-Owned Streetlights
subject to Lessor’s Lien under this Agreement is and shall be at least equal to 3,611 at all
times (unless any such Lessee-Owned Streetlights are permitted to be Retired Streetlights
pursuant to Section 5.04(c) hereof, in which case the number 3,611 may be reduced by
the number of such applicable Retired Streetlights).
(ii) Lessee is the fee owner with free and clear title to all the Additional
Lessee-Owned Streetlights. The Additional Lessee-Owned Streetlights are and will be
located on, or on improvements within, a right-of-way that is dedicated to public use for a
period that is longer than the Scheduled Term. Lessee is entitled to the benefit and use of
such right-of-way for the Additional Lessee-Owned Streetlights and has good and
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marketable title to the Additional Lessee-Owned Streetlights on, about and to which a
portion of the Equipment is or will be located. Subject to the Light Pole License
Agreement, there exists no mortgage, pledge, Lien, security interest, charge or other
encumbrance of any nature whatsoever on or with respect to the Additional Lessee-
Owned Streetlights, except under this Agreement. The number of Additional Lessee-
Owned Streetlights subject to Lessor’s first priority Lien under this Agreement is and
shall be at least equal to 300 at all times (unless any such Additional Lessee-Owned
Streetlights are permitted to be Retired Streetlights pursuant to Section 5.04(c) hereof, in
which case the number 300 may be reduced by the number of such applicable Retired
Streetlights). The insured value of each Additional Lessee-Owned Streetlight shall equal
or exceed the insured value of each Lessee-Owned Streetlight.
(iii) At all times, Lessee shall ensure that the number of Additional Lessee-
Owned Streetlights subject to Lessor’s first priority Lien under this Agreement shall
equal at least the greater of (i) 9% of the number of Lessee-Owned Streetlights, or
(ii) 300 Streetlights. The sum of (A) the aggregate number of Additional Lessee-Owned
Streetlights subject to Lessor’s first priority Lien under this Agreement plus (B) the
aggregate number of Lessee-Owned Streetlights subject to Lessor’s first priority Lien
under this Agreement, is and shall be at least equal to 3,911 at all times (the “Required
Collateral Amount”) unless any such Streetlights are permitted to be Retired Streetlights
pursuant to Section 5.04(c) hereof, in which case the number 3,911 may be reduced by
the number of such applicable Retired Streetlights.
(n) No lease, rental agreement, lease-purchase agreement, payment agreement
or contract for purchase to which Lessee has been a party at any time during the past ten
(10) years has been terminated by Lessee as a result of insufficient funds being
appropriated in any fiscal year. No event of default that Lessee did not cure during the
applicable cure period has existed or occurred under any debt, revenue bond or obligation
which Lessee has issued during the past ten (10) years.
(o) In connection with Lessor’s remedies to obtain possession pursuant to
Section 12.02 of the portion of the Equipment that is or will be subject to the Pole
Agreement, Lessee has the authority to enter upon the premises where items of such
Equipment are located for the purpose of disconnecting, de-installing and removing such
items of Equipment from such premises, subject to compliance with the applicable Pole
Agreement.
(p) Lessee represents to Lessor that that it has adopted a debt policy in
compliance with SB 1029 and Section 8855 of the Government Code of California et seq.
and covenants that it shall comply with Section 8855 of the Government Code of
California et seq. throughout the Lease Term.
(q) Lessee has complied with the requirements of California Government
Code Section 37350 and 37351 et seq. and all other applicable California law in
connection with this Agreement and the Equipment.
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(r) In connection with the Lessee’s compliance with any continuing
disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the
Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and
Exchange Act of 1934, as amended (the “Rule”), the Lessee may be required to file with
the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access
system, or its successor (“EMMA”), notice of its incurrence of its obligations under the
Related Agreements and notice of any accommodation, waiver, amendment, modification
of terms or other similar events reflecting financial difficulties in connection with the
Related Agreements, in each case including posting a full copy thereof or a description of
the material terms thereof (each such posting, an “EMMA Posting”). Except to the
extent required by applicable law, including the Rule, the Lessee shall not file or submit
or permit the filing or submission of any EMMA Posting that includes the following
unredacted confidential information about the Lessor or its affiliates in any portion of
such EMMA Posting: address and account information of the Lessor or its affiliates; and
e-mail addresses, telephone numbers, fax numbers, names and signatures of officers,
employees and signatories of the Lessor or its affiliates.
The Lessee acknowledges and agrees that the Lessor and its affiliates are not responsible
for the Lessee’s or any other entity’s (including, but not limited to, any
broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising
therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable
securities or other laws, including but not limited to those relating to the Rule.
(s) Lessee is in compliance with all Pole Agreements, Light Pole License
Agreements, each WRCOG Agreement and each Vendor Agreement. Lessee shall
deliver, or cause to be delivered, to Lessor such information as Lessor shall request
regarding WRCOG, the WRCOG Agreements, the Pole Agreement, the Light Pole
License Agreement and the Vendor Agreements to the extent Lessee is in possession of
such information.
(t) Upon an Event of Default or an Event of Non-appropriation, Lessee shall
at Lessor’s direction (subject to compliance with the Light Pole License Agreement)
enter onto the Real Property, including any Non-Lessee Real Property, and physically
detach and remove the Equipment and return the same to Lessor pursuant to Section 3.03
hereof.
(u) Except as set forth in the Light Pole License Agreement, to the best
knowledge of the Lessee, there exists no mortgage, pledge, Lien, security interest,
reverter, charge or other encumbrance of any nature whatsoever on or with respect to the
Real Property or the Streetlights that would adversely affect Lessor’s first priority Lien
on and security interest in, the Equipment. In the event any Lien, encumbrance, reverter,
restriction, asserted encumbrance, claim, dispute or other issue exists or arises with
respect to the Lessee’s legal title to or valid and marketable, beneficial use and enjoyment
of the Real Property or impairs or adversely impacts Lessor’s right, title or interest in the
Equipment or any of Lessor’s rights or remedies under this Agreement with respect to the
Equipment, (each of the foregoing referred to as a “Real Property Issue”), Lessee will
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take all steps necessary to promptly quiet, resolve and/or eliminate such Real Property
Issue to the satisfaction of Lessor and ensure that Lessee and Lessor have adequate access
to and use of (including beneficial use and enjoyment of) the Real Property for all
purposes of the Equipment contemplated herein and Lessee shall, to the extent it may
legally agree to do so, ensure that its fee interest in the Real Property and Lessor’s right,
title or interest in the Equipment and rights or remedies under this Agreement with
respect to the Equipment remain free and clear of Real Property Issues.
(v) Lessee has obtained all necessary licenses, permits, approvals or other
authorizations, if any, issued by any applicable governmental authority to acquire,
construct, furnish and install the Equipment as contemplated by this Agreement.
(w) Lessee represents and warrants that as of the Commencement Date the
Light Pole License Agreement encumbers and affects only 17 out of the 3,486
Streetlights. Lessee covenants and agrees that the Light Pole License Agreement is
limited to permitting Southern California Edison to attach its wireless communicating
device used solely in connection with Southern California Edison’s utility operations
together with associated ancillary equipment owned by Southern California Edison to
serve the purpose of managing Southern California Edison’s electrical grid and provision
of electricity for Lessee’s streetlights. Lessee covenants and agrees that the Light Pole
License Agreement will not at any time encumber or affect more than 5% of the
streetlights comprising the Equipment. To the extent the Light Pole License Agreement
at any time encumbers or affects more than 5% of the streetlights comprising the
Equipment, any and all restrictions on Lessor’s rights and remedies hereunder being
subject to the Light Pole License Agreement shall automatically and immediately be
limited to only 5% of the streetlights comprising the Equipment and the parties shall enter
into an amendment to this Agreement to reflect such limited impact of the Light Pole
License Agreement, provided that such limited impact shall apply even if the parties fail
to enter into such amendment.
(x) Lessee acknowledges and covenants that to the extent applicable to this
Agreement and/or any Related Agreement, Lessee is solely responsible for and shall
comply with the legal requirements under the California Government Code Chapter 11.5
§§ 8855-8859 et seq., as amended (the “CDIAC Act”). Without limiting the generality of
the foregoing, at the times and in the manner required by the CDIAC Act and the
California Debt and Investment Advisory Commission (“CDIAC”), Lessee shall be
solely responsible for (i) preparing, submitting and filing the report of the proposed debt
issuance relating to this Agreement by the method required by CDIAC, (ii) preparing,
submitting and filing the report of final sale (and accompanying documents) relating to
this Agreement by the method required by CDIAC, (iii) submitting an annual report
relating to the report of final sale for this Agreement by the method required by CDIAC,
and (iv) paying all fees charged by CDIAC or the CDIAC Act relating to this Agreement,
including, but not limited to the fee in an amount equal to one-fortieth of one percent of
the Acquisition Amount, but not to exceed five thousand dollars ($5,000) relating to this
Agreement.
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(y) To the extent applicable, as determined by Lessee in its sole discretion,
Lessee has complied with the requirements of California Government Code Section
5852.1 et seq. in connection with this Agreement and the Equipment.
(z) Lessee represents, warrants and covenants, that (i) all of the Equipment
has been delivered, installed, is operating in a manner consistent with the intended use
and has been inspected and finally accepted for all purposes by Lessee and title thereto
has transferred to Lessee and any security interest of Southern California Edison or any
Vendor therein has been released; (ii) Lessee has conducted such inspection and testing
of the Equipment as it deems necessary and appropriate in order to determine the
Equipment’s capability and functionality in order to accept such Equipment and hereby
acknowledges that it previously accepted all of the Equipment for all purposes; and (iii)
Lessee currently maintains the insurance coverage required by Section 7.02 hereof.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement,
Lessor agrees to provide the Acquisition Amount to acquire the Equipment. Lessor hereby
demises, leases, and transfers to Lessee, and Lessee hereby acquires, rents and leases from
Lessor, the Equipment. The Lease Term may be continued, solely at the option of Lessee, at the
end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the
maximum Lease Term as set forth in the Payment Schedule. At the end of the Original Term
and at the end of each Renewal Term until the maximum Lease Term has been completed,
Lessee shall be deemed to have exercised its option to continue this Agreement for the next
Renewal Term unless Lessee shall have terminated this Agreement pursuant to Section 3.03 or
Section 10.01. The terms and conditions during any Renewal Term shall be the same as the
terms and conditions during the Original Term, except that the Rental Payments shall be as
provided in the Payment Schedule.
Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03, to
continue the Lease Term through the Original Term and all Renewal Terms and to pay the Rental
Payments due hereunder in each fiscal year that such Rental Payments are due. Lessee affirms
that sufficient funds are legally available to pay all Rental Payments when due during the current
fiscal year at the time of the execution of this Agreement, and Lessee reasonably believes that an
amount sufficient to make all Rental Payments during the entire Scheduled Term can be obtained
from legally available funds of Lessee at the time of execution of this Agreement. Lessee further
intends to do all things lawfully within its power to obtain and maintain funds sufficient and
available to discharge its obligation to make Rental Payments due hereunder, including making
provision for such payments to the extent necessary in each budget or appropriation request
submitted and adopted in accordance with applicable provisions of law. Notwithstanding the
foregoing, the decision whether or not to budget and appropriate funds or to extend the Lease
Term for any Renewal Term is within the sole discretion of the governing body of Lessee.
Section 3.03. Nonappropriation. Lessee is obligated only to pay such Rental Payments as
may lawfully be made during Lessee’s then current fiscal year from funds budgeted and
appropriated for that purpose. Should Lessee fail to budget, appropriate or otherwise make
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available funds to pay Rental Payments following the then current Original Term or Renewal
Term, this Agreement shall be deemed terminated at the end of the then current Original Term or
Renewal Term. Lessee agrees to deliver notice to Lessor of such termination promptly after any
decision to non-appropriate is made, but failure to give such notice shall not extend the
Scheduled Term beyond such Original Term or then current Renewal Term. If this Agreement is
terminated in accordance with this Section, Lessee agrees to cease use of the Equipment and,
subject to the Light Pole License Agreement, peaceably remove and deliver to Lessor at Lessee’s
sole expense the Equipment at the location(s) in the State of California to be specified by Lessor;
provided, that Lessee shall pay month-to-month rent at the Contract Rate for each month or part
thereof that Lessee fails to return the Equipment pursuant to this Section 3.03.
Section 3.04. Conditions to Lessor’s Performance. (a) As a prerequisite to the
performance by Lessor of any of its obligations under this Agreement, Lessee shall deliver to
Lessor, in form and substance satisfactory to Lessor, the following:
(i) Reserved;
(ii) A certified copy of a resolution, ordinance or other official action of
Lessee’s governing body, substantially in the form attached hereto as Exhibit C-1,
authorizing the execution and delivery of this Agreement and the Paying Agent
Agreement and performance by Lessee of its obligations under this Agreement and the
Paying Agent Agreement;
(iii) A Certificate completed and executed by the Clerk or Secretary or other
comparable officer of Lessee, substantially in the form attached hereto as Exhibit C-2,
completed to the satisfaction of Lessor;
(iv) An opinion of (i) the city attorney of the Lessee, and (ii) special counsel to
Lessee, which in the aggregate opine on the matters set forth in the form attached hereto
as Exhibit D and which are otherwise satisfactory to Lessor;
(v) Evidence of insurance as required by Section 7.02 hereof;
(vi) All documents, including financing statements, affidavits, notices and
similar instruments, in form satisfactory to Lessor, which Lessor deems necessary or
appropriate at that time pursuant to Section 6.02, including, without limitation a UCC-3
amendment to the financing statement filed with respect to the Original Agreement and
any new UCC-1 financing statements required with respect to this Agreement;
(vii) A Certificate completed and executed by an officer of the Lessee
certifying that (A) the Lessee is the fee owner of the real estate on which the Equipment
is and will be located and has good and marketable title thereto, and there exists no
mortgage, pledge, Lien, security interest, charge or other encumbrance of any nature
whatsoever on or with respect to such real estate, (B) the Equipment will be located on
improvements within a right-of-way that is dedicated to public use for a period that is
longer than the Scheduled Term of this Agreement and/or (C) except as expressly
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disclosed in writing to the Lessor prior to the Commencement Date and consented to in
writing by the Lessor, no person or entity other than Lessee has an interest in the real
estate on which the Equipment is and will be located;
(viii) Wire instructions for payments to be made to WRCOG, Vendors and
Form W-9 from WRCOG and each such Vendor;
(ix) Reserved;
(x) Invoices (and proofs of payment of such invoices, if Lessee seeks
reimbursement) and bills of sale as required by Section 5.01(b);
(xi) Fully executed copies of the Pole Agreement, the Light Pole License
Agreement, each WRCOG Agreement and each Vendor Agreement;
(xii) Reserved;
(xiii) To the extent applicable to this Agreement as provided by the CDIAC Act,
evidence that Lessee has prepared, submitted and filed the report of the proposed debt
issuance relating to this Agreement by the method required by CDIAC and the CDIAC
Act; and
(xiv) Such other items reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this
Section 3.04, the performance by Lessor of any of its obligations under this Agreement shall be
subject to: (i) no Material Adverse Change shall have occurred since the date of this Agreement,
(ii) no Event of Default or Event of Non-appropriation shall have occurred and then be
continuing and (iii) no event or condition has occurred which, with notice, the passage of time or
any combination of the foregoing would constitute an Event of Default or Event of
Non-appropriation under this Agreement.
(c) Subject to satisfaction of the foregoing, Lessor will pay the Acquisition Amount to
refund the Original Agreement.
ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03, Lessee shall promptly pay
Rental Payments, in lawful money of the United States of America, to Lessor on the Rental
Payment Dates and in such amounts as provided in the Payment Schedule. Interest on the
Acquisition Amount shall begin to accrue as of the Commencement Date. If any Rental Payment
or other amount payable hereunder is not paid within ten (10) days of its due date, Lessee shall
pay an administrative late charge of five percent (5%) of the amount not timely paid or the
maximum amount permitted by law, whichever is less. Rental Payments consist of principal and
interest components as more fully detailed on the Payment Schedule, the interest on which
begins to accrue as of the Commencement Date.
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Section 4.02. Interest and Principal Components. A portion of each Rental Payment is
paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as,
and represents payment of, principal as more fully detailed on the Payment Schedule.
Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and
Lessee understand and intend that the obligation of Lessee to pay Rental Payments shall
constitute a current expense of Lessee payable solely from its general fund or other funds that are
legally available for that purpose and shall not in any way be construed to be a debt of Lessee in
contravention of any applicable constitutional or statutory limitation or requirement concerning
the creation of indebtedness by Lessee, nor shall anything contained herein co nstitute a pledge of
the general tax revenues, funds or moneys of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03,
the obligations of Lessee to make Rental Payments and to perform and observe the other
covenants and agreements contained in this Agreement shall be absolute and unconditional in all
events without abatement, diminution, deduction, set-off or defense, for any reason, including
without limitation any failure of the Equipment, any defects, malfuncti ons, breakdowns or
infirmities in the Equipment or any accident, condemnation or unforeseen circumstances, any
disputes with the Lessor, WRCOG or any Vendor of any Equipment, or disputes under any
WRCOG Agreement, or failure of WRCOG or any Vendor to deliver any Equipment or
otherwise perform any of its obligations for whatever reason under any Vendor Agreement or
WRCOG Agreement, including dissolution, bankruptcy, insolvency, reorganization or any
similar event with respect to WRCOG or any Vendor.
Section 4.05. Reserved.
ARTICLE V
Section 5.01. Delivery, Installation and Acceptance of Equipment. Lessee has acquired
and installed all Equipment at the locations specified in the Equipment Schedule and had paid
any and all delivery and installation costs and other Equipment Costs in connection therewith.
Lessee has conducted such inspection and testing of the Equipment as it deems necessary and
appropriate in order to determine the Equipment’s capability and functionality and has accepted
such Equipment.
Section 5.02. Quiet Enjoyment of Equipment. So long as Lessee is not in default
hereunder, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere
with Lessee’s quiet use and enjoyment of the Equipment during the Lease Term.
Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be
moved or relocated from the location specified for it in the Equipment Schedule without Lessor’s
prior written consent, which consent shall not be unreasonably withheld; provided that so long as
Lessor has at all times a first priority Lien and security interest on the Required Collateral
Amount of Streetlights, Lessee may temporarily or permanently move or relocate up to the
greater of (x) 9.0% of the number of Lessee-Owned Streetlights or (y) 300 Streetlights, from
time to time in order to address Lessee’s governmental purposes; provided further, that (i) Lessor
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shall retain at all times its first priority security interest on such moved or relocated Streetlights,
(ii) Lessee shall make and confirm all the representations, warranties and covenants set forth in
Section 2.01(k) to Lessor with respect to such movement or relocation, and (iii) Lessee shall
confirm in writing to Lessor that such movement and relocation does not result in any change in
the Collateral or Equipment description, identifiers or ID number, and in the event such
movement or relocation does result in a change in the Collateral or Equipment description,
identifiers or ID number, Lessee shall pay all of Lessor’s reasonable costs and expenses
(including reasonable legal fees) in connection with the execution and delivery of an amendment
and preparation and filing of amendments to financing statements (personal property and fixture
filings) and other documents which Lessor deems necessary or appropriate to establish and
maintain Lessor’s security interest in the Collateral or Equipment in connection with such
movement or relocation. No such consent will be required for repair and/or replacement of
Equipment in accordance with Section 5.04 hereof if such Equipment is repaired or replaced and
returned to the same original location. Lessor shall have the right at all reasonable times during
regular business hours to enter into and upon the property where the Equipment is located for the
purpose of inspecting the Equipment; provided that, unless an Event of Default or an Event of
Non-appropriation (or event which with the passage of time or the giving of notice or both would
constitute an Event of Default or an Event of Non-appropriation) has occurred, such inspection
may be subject to Lessee’s encroachment proceedings to the extent applicable for safety
purposes. In the event of extreme weather-related events in which public safety is in jeopardy,
the Lessee shall provide Lessor with notice as soon as practicable of such event and any known
potential or actual impact to the Equipment, and the Lessor shall operate in good faith in taking
such public safety concerns into consideration in exercising its rights and remedies under this
Agreement. If in Lessee’s reasonable determination any portion of the Equipment poses an
imminent danger to public safety (i.e. immediate serious risk of death or serious physical harm),
without prior consent of the Lessor the Lessee may temporarily remove or relocate the
Equipment solely to prevent immediate serious risk of death or serious physical harm to the
public; provided that (x) the Lessee shall provide Lessor with notice as soon as practicable of
such event and any known potential or actual impact to the Equipment, and (y) once the
immediate serious risk of death or serious physical harm the public has reasonably abated Lessee
shall promptly fully restore, replace, repair and maintain the Equipment pursuant to Section 5.04
hereof and as otherwise required under this Agreement.
Section 5.04. Use and Maintenance of the Equipment; Retired Streetlights. (a) Lessee,
and its agents, delegees and designees, shall not install, use, operate or maintain the Equipment
(or cause the Equipment to be installed, used, operated or maintained) in violation of any
applicable law or in a manner contrary to that contemplated hereby. Lessee shall provide all
permits and licenses, if any, necessary for the installation and operation of the Equipment. In
addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings
of any legislative, executive, administrative, or judicial body, including, without limitation , all
anti-money laundering laws and regulations; provided that Lessee may contest in good faith the
validity or application of any such law, regulation or ruling in any reasonable manner that does
not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its
interest or rights hereunder.
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(b) Lessee agrees that it shall, either directly or through WRCOG, as provided in the
Implementation Agreement, (1) use, operate, protect, maintain, preserve, and keep the
Equipment in good repair, condition, appearance and operating order, in the same condition as
when received, ordinary wear and tear excepted; (2) use, operate, protect and maintain the
Equipment (i) consistent with prudent industry practice (but in no event less than the extent to
which Lessee maintains other similar equipment in the prudent management of its assets and
properties) and (ii) in compliance with California Public Utilities Commission Order 165
(“Order 165”) and all applicable insurance policies, laws, ordinances, rules, regulations and
manufacturer’s recommended maintenance and repair procedures, to the extent such procedures
are not in conflict with Order 165 to the extent Order 165 is in effect; (3) proceed promptly, at its
expense, to protect its rights and exercise its remedies under any warranty then in effect with
respect to the Equipment (although all such remedies shall be exercised by Lessee, the order of
exercising remedies may be prioritized in the most efficient manner); and (4) replace or rebuild
any component of the Equipment that becomes permanently unfit for normal use or inoperable
during the Lease Term (herein, the “Inoperable Component”) in order to keep the Equipment as
a whole in good repair and working order during the Lease Term. Lessee shall promptly notify
Lessor in writing if at any time Equipment acquired (individually or in the aggregate) with five
percent (5%) or more of the original Acquisition Amount (the “Noticed Equipment”) is
reasonably expected within forty-five (45) days to be or become an Inoperable Component(s);
provided if Lessee becomes aware that any Noticed Equipment is or will become an Inoperable
Component in a shorter time period, Lessee shall notify Lessor in writing within five (5) business
days of such receipt of knowledge. Lessee shall promptly replace or rebuild, or cause to be
replaced or rebuilt, the Inoperable Component with a similar component of comparable or
improved make and model that has at least the equivalent value and utility of the Inoperable
Component, a remaining useful life of no less than the remaining Scheduled Term and such
replacement or rebuilt component shall be in good operating condition. Lessor shall have no
responsibility to maintain, repair or make improvements or additions to the Equipment. When
and if available, Lessee agrees to pay any costs necessary for the manufacturer to re-certify the
Equipment as eligible for manufacturer’s maintenance upon the return of the Equipment to
Lessor as provided for in Section 3.03 or 12.02(b), unless it is more cost effective for Lessee to
replace the Equipment in accordance with Section 8.01.
(c) Notwithstanding anything herein to the contrary, so long as no Event of Default
(or event which with the passage of time or the giving of notice or both would constitute an
Event of Default) has occurred thereunder and no Event of Non-appropriation has occurred or is
threatened, Lessee may retire and exclude from the Equipment up to 32 Streetlights in the
aggregate over the course of the Lease Term without prepayment or penalty or obligation to
replace such Streetlights, provided that Lessee shall (i) provide Lessor with at least 30 days prior
written notice substantially in the form of Exhibit O attached hereto, (ii) re-make and confirm all
the representations, warranties and covenants set forth in this Agreement for the benefit of
Lessor and (iii) confirm in writing to Lessor, (1) the number of Streetlights being retired at that
time, (2) the cumulative number of Retired Streetlights under this Agreement taking into account
the Streetlights then being retired, (3) the number of Streetlights that will remain subject to this
Agreement, (4) the number of Lessee-Owned Streetlights that will remain subject to this
Agreement and (5) the number of Additional Lessee-Owned Streetlights that will remain subject
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to this Agreement and provide such other information or confirmations with respect to the
Retired Streetlights, the Equipment and the Collateral as Lessor may request.
(d) Lessee shall not alter any item of Equipment or install any accessory, equipment
or device on an item of Equipment if that would impair any applicable warranty, the originally
intended function or the value of that Equipment. All repairs, parts, accessories, equipment and
devices furnished, affixed to or installed on any Equipment owned by Lessee, excluding
temporary replacements, shall thereupon become subject to the security interest of Lessor,
subject to the Light Pole License Agreement.
Section 5.05. Obligations Under Pole Agreement. Lessee hereby covenants and agrees
to perform, or cause to be performed, its duties and obligations under each Pole Agreement
strictly in accordance with the terms and provisions of each such Pole Agreement, for the
purpose of maintaining the benefits thereunder for the installation, operation and maintenance of
the portion of the Equipment subject to thereto during the Lease Term, including without
limitation the timely removal of such Equipment if and when required by the applicable Pole
Agreement in order to prevent such Equipment from becoming subject to any Lien or security
interest in favor of Pole Owner. Lessee shall maintain in full force and effect during the Lease
Term each applicable Pole Agreement until such time as full and marketable title in the
streetlights, poles, related fixtures has passed to and vested in Lessee. Lessee shall not abandon
any such Equipment or exercise its option, if any, to terminate the term of any Pole Agreement
so long as any amount remains unpaid under this Agreement.
ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term, and so long as Lessee is not
in default under Article XII hereof, all right, title and interest in and to each item of the
Equipment shall be vested in Lessee immediately upon its acceptance of each item of
Equipment, subject to the terms and conditions hereof. Subject to the Light Pole License
Agreement, Lessee shall at all times protect and defend, at its own cost and expense, its title in
and to the Equipment and Lessor’s first priority security interest constituting a first Lien on the
Collateral from and against all claims, Liens and legal processes of its creditors, and keep all
Equipment free and clear of all such claims, Liens and processes. Upon the occurrence of an
Event of Default or upon termination of this Agreement pursuant to Section 3.03, full and
unencumbered legal title to the Equipment shall, at Lessor’s option, pass to Lessor, and Lessee
shall have no further interest therein. In addition, upon the occurrence of such an Event of
Default or such termination, Lessee shall execute and deliver to Lessor such documents as
Lessor may request to evidence the passage of such legal title to Lessor and the termination of
Lessee’s interest therein, and upon request by Lessor (subject to the Light Pole License
Agreement) shall deliver possession of the Equipment to Lessor in accordance with Section 3.03
or Section 12.02, as applicable. Upon payment of all amounts due and owing hereunder by
Lessee pursuant to Section 10.01 (including upon payment of all Rental payments and other
amounts payable under this Agreement), Lessor’s security interest or other interest in the
Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as
Lessee may request to evidence the termination of Lessor’s security interest in the Equipment
(including applicable UCC-3 termination statements).
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Section 6.02. Security Interest. As additional security for the payment and performance
of all of Lessee’s obligations hereunder, Lessee hereby grants to Lessor a first priority security
interest constituting a first Lien (subject to the Light Pole License Agreement) on (a) the
Equipment together with all replacements, repairs, restorations, modifications and improvements
thereof or thereto and all accessories, equipment, parts and appurtenances appertaining or
attached to any of the Equipment, and all substitutions, renewals, or replacements of and
additions, improvements, accessions and accumulations to any and all of such Equipment,
together with all the rents, issues, income, profits, proceeds and avails therefrom, (b) the
Collection Fund and the Rental Payment Subaccount and moneys and investments held from
time to time therein (but not the Administrative Fee Subaccount, the Annual Maintenance
Subaccount or the Re-lamping Reserve Subaccount, each as defined in the Paying Agent
Agreement), (c) all accounts, chattel paper, deposit accounts, documents, instruments, general
intangibles and investment property (including any securities accounts and security entitlements
relating thereto) evidenced by or arising out of or otherwise relating to the foregoing collateral
described in clauses (a) and (b) above, as such terms are defined in Article 9 of the California
Commercial Code and (d) any and all proceeds of any of the foregoing (collectively, the
“Collateral”). Lessee authorizes Lessor to file (and Lessee agrees to execute, if applicable) such
notices of assignment, chattel mortgages, financing statements and other documents, in form
satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain
Lessor’s security interest in the Equipment and the proceeds thereof, including, without
limitation, such financing statements with respect to personal property and fixtures under
Article 9 of the California Commercial Code and treating such Article 9 as applicable to entities
such as Lessee.
Section 6.03. Personal Property, No Encumbrances. Lessee agrees that, to the extent
permitted by State law, the Equipment is deemed to be and will remain personal property, and
will not be deemed to be affixed to or a part of the real es tate on which it may be situated,
notwithstanding that the Equipment or any part thereof may be or hereafter become in any
manner physically affixed or attached to real estate or any building thereon. Other than the Light
Pole License Agreement (if and to the extent applicable) and encumbrances existing on the
Commencement Date that are consented to in writing by the Lessor and identified on Exhibit N
hereto, Lessee shall not create, incur, assume or permit to exist any mortgage, pledge, Lien,
security interest, charge or other encumbrance of any nature whatsoever on any of the real estate
where the Equipment is or will be located or enter into any agreement to sell or assign or enter
into any sale/leaseback arrangement of such real estate (each an “Encumbering Instrument”)
without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished
with a waiver of interest in the Equipment acceptable to Lessor or its assigns in its discretion
from any party taking an interest in any such real estate prior to such interest taking effect (which
may be in the form of an acknowledgement in the Encumbering Instrument of Lessor’s purchase
money first priority security interest and rights in the Equipment and a carve-out of the
Equipment from the Lien of the Encumbering Instrument), such consent shall not be
unreasonably withheld and Lessor’s response shall be provided within ten (10) business days of
the request for such consent.
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ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee
shall keep the Equipment free of all levies, Liens, and encumbrances except those created by this
Agreement and in particular, Lessee shall not create, incur, assume, permit or suffer to exist Lien
or encumbrance with respect to the Equipment that impairs Lessee’s use of the Equipment or has
an adverse effect on Lessor’s rights, interests, security or remedies in and to the Equipment or
under this Agreement. Lessee shall promptly, at its own expense, take such action as may be
necessary to duly discharge or remove any such Lien or encumbrance, if the same shall arise at
any time; provided that Lessee may in good faith contest any such Lien or encumbrance, if it
provides reasonable security to Lessor against any loss or forfeiture upon Lessor’s request.
Except as expressly limited by this Section, Lessee shall promptly pay (a) all utilities, sales and
other taxes, special assessments and other charges of any kind that are at any time lawfully
assessed or levied against or with respect to the Equipment, the Rental Payments or any part of
either thereof, or which become due during the Lease Term, whether assessed against Lessee or
Lessor; and (b) the fee charged by the California Debt and Investment Advisory Commission
with respect to this Agreement pursuant to Section 8856 (or any successor provision) of the
California Government Code. Lessee shall also pay all utility and other charges incurred in the
operation, use and maintenance of the Equipment. Lessee shall pay such taxes, assessments or
charges as the same may become due; provided that, with respect to any such utilities, taxes,
assessments or charges that may lawfully be paid in installments over a period of years, Lessee
shall be obligated to pay only such installments as accrue during the Lease Term ; provided,
further, Lessee may, at Lessee’s expense and in its name, in good faith contest any such taxes,
assessments, or other charges in good faith by appropriate proceedings which prevent
enforcement of the matter under contest and as to which adequate reserves have been established
in accordance with generally accepted accounting principles, and, in the event thereof such taxes,
assessments, or other charges so contested and reserved may remain unpaid during the period of
such contest and any appeal therefrom. Lessee shall not be required to pay any federal, state or
local income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit,
excess profit, capital stock, corporate, or similar tax payable by Lessor, its successors or assigns,
unless such tax is made in lieu of or as a substitute for any tax, assessment or charge which is the
obligation of Lessee under this Section. During the Lease Term, Lessor will not claim ownership
of the Equipment for the purposes of any tax credits, benefits or deductions with respect to the
Equipment.
Section 7.02. Insurance. Lessee shall during the Lease Term maintain or cause to be
maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the
Equipment against loss or damage by fire and all other risks covered by the standard extended
coverage endorsement then in use in the State, and any other risks reasonably required by Lessor,
in an amount at least equal to the greater of (i) the then applicable Prepayment Price of the
Equipment or (ii) the replacement cost of the Equipment; (b) liability insurance naming Lessor
and its assigns as additional insured that protects Lessor from liability with limits of at least
$5,000,000 per occurrence for bodily injury and property damage coverage (such liability
insurance coverage may be in a combination of primary general liability a nd/or excess liability
umbrella coverage), and in all events in form and amount satisfactory to Lessor; and (c) worker’s
compensation coverage as required by the laws of the State; provided that, with Lessor’s prior
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written consent, Lessee may self-insure against the risks described in clauses (a) and/or (b). In
the event Lessee is permitted, at Lessor’s sole discretion, to self -insure as provided in this
Section 7.02, Lessee shall provide to Lessor a self-insurance letter in substantially the form
attached hereto as Exhibit F. Lessee shall furnish to Lessor evidence of such insurance or
self-insurance coverage throughout the Lease Term. Lessee shall not cancel or modify such
insurance or self-insurance coverage in any way that would affect the interests of Lessor without
first giving written notice thereof to Lessor at least thirty (30) days in advance of such
cancellation or modification.
Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee
hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any
persons or property arising from the Equipment from any cause whatsoever, and no such loss of
or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to
make the Rental Payments or to perform any other obligation under this Agreement. Whether or
not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the
fullest extent permitted by applicable law, but only from legally available funds for any and all
liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor,
regardless of the cause thereof and all expenses incurred in connection therewith (including,
without limitation, counsel fees and expenses, and penalties connected therewith imposed on
interest received) arising out of or as a result of (a) entering into of this Agreement or any of the
transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation,
condition, purchase, delivery, acceptance, rejection, storage or return of any item of the
Equipment, (c) any accident in connection with the operation, use, condition, possession, storage
or return of any item of the Equipment resulting in damage to property or injury to or death to
any person, and/or (d) the breach of any covenant of Lessee under or in connection with this
Agreement or any material misrepresentation provided by Lessee under or in connection with
this Agreement. The provisions of this Section 7.03 shall continue in full force and effect
notwithstanding the full payment of all obligations under this Agreement or the termination of
the Lease Term for any reason.
Section 7.04. Lessee to Pursue Remedies Against Contractors and Sub-Contractors and
Their Sureties. In the event of a material default of WRCOG or any Vendor under any WRCOG
Agreement or Vendor Agreement in connection with the acquisition, construction, maintenance
and/or servicing of the Equipment or in the event of a material breach of warranty with respect to
any material workmanship or performance guaranty with respect to the Equipment, Lessee will
promptly proceed to exhaust its remedies against WRCOG or the Vendor in default, as
applicable (although all such remedies shall be exercised by Lessee, the order of exercising
remedies may be prioritized in the most efficient manner). Lessee shall advise Lessor of the
steps it intends to take in connection with any such default. Any amounts received by Lessee in
respect of damages, refunds and adjustments or otherwise in connection with the foregoing
(“Vendor Proceeds”) shall be paid to Lessor and applied against Lessee’s obligations hereunder
pursuant to the prepayment provisions in Section 10.01(b), unless otherwise approved in writing
by Lessor.
Section 7.05. Advances. In the event Lessee shall fail to keep the Equipment in good
repair and working order or shall fail to maintain any insurance required by Section 7.02, Lessor
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may, but shall be under no obligation to, maintain and repair the Equipment or obtain and
maintain any such insurance coverages, as the case may be, and pay the cost thereof. All
amounts so advanced by Lessor shall constitute additional rent for the then current Original Term
or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor
with interest thereon from the date advanced until paid at a rate equal to the Contract Rate plus
5% per annum or the maximum amount permitted by law, whichever is less; provided, however,
Lessor shall provide notice to Lessee of any such event.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the
Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is
damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any
part thereof shall be taken under the exercise or threat of the power of eminent domain by any
governmental body or by any person, firm or corporation acting pursuant to governmental
authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or
condemnation award or sale under threat of condemnation to be applied to the prompt
replacement, repair, restoration, modification or improvement of the Equipment or such part
thereof and any balance of the Net Proceeds remaining after such work has been completed shall
be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations hereunder in
accordance with Section 10.01(b).
If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”)
pursuant to this Section, the replacement equipment (the “Replacement Equipment”) shall be
new or of a similar quality, type, utility and condition at least as good as the Replaced Equipment
and shall be of equal or greater value than the Replaced Equipment. Subject to the Light Pole
License Agreement, if applicable, Lessee shall grant to Lessor a first priority security interest in
any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that
each item of Replacement Equipment is free and clear of all claims, Liens, security interests and
encumbrances, excepting only those Liens created by or through Lessor, and the Light Pole
License Agreement, if applicable, and shall provide to Lessor any and all documents as Lessor
may reasonably request in connection with the replacement, including, but not limited to,
documentation in form and substance satisfactory to Lessor evidencing Lessor’s security interest
in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any
Replacement Equipment acquired pursuant to this paragraph shall constitute “Equipment” for
purposes of this Agreement. Lessee shall complete the aforementioned documentation relating
to the Replacement Equipment (such as documentation evidencing Lessee’s title to the
Replacement Equipment free and clear of all claims, Liens, security interests and encumbrances
subject only to Lessor’s security interest in the Replacement Equipment), on or before the next
Rental Payment Date after the occurrence of a casualty event, or be required to exercise its
option to prepay the obligations hereunder with respect to the damaged Equipment in accordance
with Section 10.01(b).
For purposes of this Article VIII, the term “Net Proceeds” shall mean the amount
remaining from the gross proceeds of any insurance claim or condemnation award or sale under
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threat of condemnation after deducting all expenses, including attorneys’ fees, incurred in the
collection thereof.
Section 8.02. Insufficiency of Net Proceeds. (a) If the Net Proceeds are insufficient to
pay in full the cost of any repair, restoration, modification or improvement referred to in Section
8.01, Lessee shall, to the extent permitted by law and in any event solely from legally available
funds, either (i) complete such replacement, repair, restoration, modification or improvement and
pay any costs thereof in excess of the amount of the Net Proceeds, or (ii) pay or cause to be paid
to Lessor the amount of the then applicable Prepayment Price, and, upon such payment, the
Lease Term shall terminate and Lessor’s security interest in the Equipment shall terminate as
provided in Section 6.01 hereof.
(b) If (x) at least 10% and no more than 50% of the Equipment under this Agreement
is destroyed, or is damaged by fire or other casualty or title to, or th e temporary use of, at least
10% and no more than 50% of the Equipment under this Agreement shall be taken under the
exercise or threat of the power of eminent domain by any governmental body or by any person,
firm or corporation acting pursuant to governmental authority, and (y) the Net Proceeds are
insufficient to pay in full the cost of any replacement, repair, restoration, modification or
improvement referred to in Section 8.01, then, no more than once during the Lease Term, in lieu
of paying the full applicable Prepayment Price as described in Section 8.02(a)(ii) above, Lessee
shall have the option of partially prepaying the related Rental Payments pursuant to Section
10.01(b)(2) hereof from legally available funds.
(c) The amount of the Net Proceeds, if any, remaining after completing such repair,
restoration, modification or improvement or after prepaying Rental Payments in full and
purchasing such Equipment shall be retained by Lessee. If Lessee shall make any payments
pursuant to this Section 8.02 to complete such replacement, repair, restoration, modification or
improvement, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall
Lessee be entitled to any diminution of the amounts payable under Article IV.
ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation,
either express or implied, as to the value, design, condition, merchantability or fitness for
particular purpose or fitness for use of any of the Equipment, or any other warranty or
representation, express or implied, with respect thereto and, as to Lessor, Lessee’s acquisition of
the Equipment shall be on an “as is” basis. In no event shall Lessor be liable for any incidental,
indirect, special or consequential damage in connection with or arising out of this Agreement, the
Equipment or the existence, furnishing, functioning or Lessee’s use of any item, product or
service provided for in this Agreement.
Section 9.02. Amendments of Transaction Documents; Warranties. (a) Lessee covenants
that it shall not amend, modify, rescind, waive or alter the Paying Agent Agreement without the
prior written consent of Lessor.
(b) Reserved.
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(c) Lessee covenants that without the prior written consent of the Lessor it shall not
amend, modify, rescind, waive or alter (or permit the assignment or transfer of) any Pole
Agreement, any Light Pole License Agreement, the Implementation Agreement, the Professional
Services Agreement, the WRCOG EPA or any Vendor Agreement if doing so could result in a
Material Adverse Change or a Material Adverse Effect.
(d) Lessee covenants to provide Lessor with at least fifteen (15) business days’ prior
written notice of any proposed amendment, modification, rescission, waiver, assignment, transfer
or alteration (each a “Change”) of any Pole Agreement, any Light Pole License Agreement, the
Implementation Agreement, the Professional Services Agreement, the WRCOG EPA and/or any
Vendor Agreement, in each case that the Change will not result in a Material Adverse Change or
a Material Adverse Effect.
(e) Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the
Lease Term, so long as no Event of Non-appropriation has occurred and Lessee shall not be in
default under this Agreement, to assert from time to time whatever claims and rights (including
without limitation warranties) relating to the Equipment that Lessor may have against Southern
California Edison under the Pole Agreement or WRCOG under the WRCOG Agreements or
Vendor under the Vendor Agreements. Lessee’s sole remedy for the breach of such warranty,
indemnification or representation shall be against Southern California Edison under the Pole
Agreement, if applicable, WRCOG and the applicable Vendor of the Equipment, and not against
Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of
Lessor hereunder, including the right to receive full and timely Rental Payments and other
payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no
representations or warranties whatsoever as to the existence or the availability of such warr anties
relating to any Equipment.
ARTICLE X
Section 10.01. Prepayment Option. In addition to the prepayment provided by
Section 4.05 hereof, Lessee shall have the option to prepay (or satisfy, pursuant to (c) below) its
obligations hereunder at the following times and upon the following terms:
(a) Optional Prepayment. From and after the date specified (if any) in the
Payment Schedule (the “Prepayment Option Commencement Date”), on the Rental
Payment Dates specified in the Payment Schedule, upon not less than thirty (30) days’
prior written notice, and upon payment in full of the sum of (i) the Rental Payments then
due and all other amounts then owing hereunder plus (ii) the then applicable Prepayment
Price, which shall include a prepayment premium on the unpaid Outstanding Balance as
set forth in the Payment Schedule plus (iii) all other amounts then owing hereunder; or
(b) Casualty, Condemnation or Vendor Proceeds Prepayment. (1) In the
event of substantial damage to or destruction, title defect or condemnation of all or a
majority of the Equipment (i.e. more than 50% of the Equipment) or in the event Lessee
receives Vendor Proceeds in an amount at least equal to the outstanding Principal Portion
of Rental Payments, on the day specified in Lessee’s notice to Lessor of its exercise of
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the prepayment option (which shall be the earlier of the next applicable Rental Payment
Date or sixty (60) calendar days after the casualty, title defect or condemnation event or
receipt of such Vendor Proceeds) upon payment in full to Lessor (A) in the event such
prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then
due plus (ii) the then applicable Prepayment Price, which shall include a prepayment
premium on the unpaid Outstanding Balance as set forth in the Payment Schedule plus
(iii) all other amounts then owing hereunder or (B) in the event such prepayment occurs
on a date other than a Rental Payment Date, the sum of (i) of the applicable Prepayment
Price shown on the Payment Schedule for the Rental Payment Date immediately
preceding the prepayment date (or if such prepayment date occurs prior to the first Rental
Payment Date, the earliest Prepayment Price shown on the Payment Schedule), which
shall include a prepayment premium on the unpaid Outstanding Balance as set forth in
the Payment Schedule plus (ii) accrued interest at the Contract Rate on the Outstanding
Balance as of the Rental Payment Date immediately preceding the applicable prepayment
date from such Rental Payment Date (or if such prepayment date occurs prior to the first
Rental Payment Date, the Commencement Date) to such prepayment date plus (iii) all
other amounts then owing hereunder; or
(2) If (A)(x) at least 10% and no more than 50% of the Equipment is
destroyed, or is damaged by fire or other casualty or title to, or the temporary use
of at least 10% and no more than 50% of the Equipment shall be taken under the
exercise or threat of the power of eminent domain by any governmental body or
by any person, firm or corporation acting pursuant to governmental authority, and
(y) the Net Proceeds are insufficient to pay in full the cost of any replacement,
repair, restoration, modification or improvement referred to in Section 8.01, or
(B) Lessee receives any Vendor Proceeds in an amount less than the outstanding
Principal Portion of Rental Payments, then, no more than once during the Lease
Term, in lieu of paying the full applicable Prepayment Price for the Equipment as
described in Section 10.01(b)(1) above, Lessee shall have the option of partially
prepaying the Rental Payments by paying or causing to be paid to Lessor on the
Partial Prepayment Date the principal portion of Rental Payments that are then
unpaid under this Agreement in the amount equal to the Disposed Equipment
Prepayment Amount plus accrued interest on such amount from the Rental
Payment Date next preceding the applicable Partial Prepayment Date to such date
plus all other amounts then due and owing by Lessee under this Agreement . If a
Partial Prepayment Date is also a Rental Payment Date, Lessee shall also pay any
Rental Payment due as of such date and all other amounts then due and owing by
Lessee hereunder. Upon Lessor’s receipt of the Disposed Equipment Prepayment
Amount on the applicable Partial Prepa yment Date plus all other amounts then
due and owing by Lessee under this Section 10.01(b)(2), Lessor shall adjust the
Rental Payments to be paid by Lessee from and after the applicable Partial
Prepayment Date to reflect credit for payment of the Disposed Equipment
Prepayment Amount as directed by Lessor either in the inverse order of the
applicable Rental Payment Dates or on a pro rata basis (after giving effect to the
application of such partial prepayment to remaining Rental Payments on an
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inverse or pro rata basis) for the remainder of the Scheduled Term will satisfy the
proviso set forth above in this Section 10.01(b)(2); or
(c) Payment in Full. Upon the expiration of the Lease Term, upon payment in
full of all Rental Payments then due and all other amounts then owing hereunder to
Lessor.
After (i) payment of the applicable Prepayment Price and all other amounts then owing
hereunder in accordance with Section 10.01(a) or (b) of this Agreement or (ii) upon the
expiration of the Lease Term, payment in full of all Rental Payments then due and all other
amounts then owing hereunder in accordance with Section 10.01(c) of this Agreement, Lessor’s
security interests in and to the Equipment (or portion thereof so prepaid) will be terminated and
Lessee will own such Equipment (or portion thereof so prepaid) free and clear of Lessor’s
security interest in such Equipment.
ARTICLE XI
Section 11.01. Assignment by Lessor. Lessor is entering into this Agreement for its own
account without a present intention to sell, or transfer, however (a) Lessor’s right, title and
interest in and to this Agreement, the Rental Payments and any other amounts payable by Lessee
hereunder, its security interest in the Collateral (collectively, the “Assigned Rights”) may be
assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or
sub-assignees, without the necessity of obtaining the consent of Lessee; provided, that any such
assignment, transfer or conveyance (i) shall be made only to investors each of whom Lessor
reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1)
promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as
defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities
Act of 1933, as amended, and in either case is purchasing the Assigned Rights (or any interest
therein) for its own account with no present intention to resell or distribute such Assigned Rights
(or interest therein), subject to each investor’s right at any time to dispose of the Assigned Rights
(or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than
35 owners of the Assigned Rights or the creation of any interest in the Assigned Rights in an
aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to
make Rental Payments to more than one hereinafter defined Lease Servicer at a time (or if the
Paying Agent Agreement is in effect, to anyone other than the Paying Agent under the Paying
Agent Agreement), to send notices or otherwise to deal with respect to matters arising hereunder
with or to more than one Lease Servicer (as such term is defined below), and any trust
agreement, participation agreement or custodial agreement under which multiple ownership
interests in the Assigned Rights are created shall provide the method by which the owners of
such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or
other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease
Servicer”) to act on their behalf with respect to the Assigned Rights, including with respect to
the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an
Event of Default or an Event of Non-appropriation under this Agreement. Lessor shall endeavor
to provide written notice of any such assignment or reassignment at least three (3) business days
prior to such assignment or reassignment, but in any event Lessor shall provide Lessee with such
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notice prior to any such assignment or reassignment (and such notice shall disclose the name and
address of each such assignee and the Lease Servicer, if any). Lessor and Lessee hereby
acknowledge and agree that the restrictions and limitations on transfer as provided in this Section
11.01 shall apply to the first and subsequent assignees and sub -assignees of any of the Assigned
Rights (or any interest therein). To the extent applicable, Lessor shall comply with Sections
5950-5955 of the California Government Code and any other applicable law in assigning the
Assigned Rights, and Lessee shall not be responsible for Lessor’s non-compliance with
applicable law in connection with an assignment.
(b) Subject to Section 11.01(a), unless to an affiliate controlling, controlled by or under
common control with Lessor, no assignment, transfer or conveyance permitted by this
Section 11.01 shall be effective as against Lessee until Lessee shall have received a written
notice of assignment that discloses the name and address of each such assignee, identifies the
new sole Lease Servicer, if applicable, and an investment letter in substantially the form attached
as Exhibit L attached hereto (the “Investor Letter”) from such assignee; provided, that if such
assignment is made to a bank or trust company as trustee or paying agent for owners of
certificates of participation, participation interests, trust certificates or partnership interests with
respect to the Rental Payments payable under this Agreement, it shall thereafter be sufficient that
Lessee receives notice of the name and address of the bank, trust company or other entity that
acts as the Lease Servicer and no Investor Letter is required; provided further that any such
assignment, transfer or conveyance shall occur only on a private placement basis (and not
pursuant to any “public offering”). Notices of assignment provided pursuant to this
Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements
imposed by Section 11.01(a) hereof. Lessee shall retain all such notices as a register of all
assignees and shall make all payments to the assignee or assignees or Lease Servicer last
designated in such register. Lessee shall not have the right to and shall not assert against any
assignee any claim, counterclaim or other right Lessee may have against Lessor, Southern
California Edison, WRCOG or any Vendor. Assignments in part may include without limitation
assignment of all of Lessor’s security interest in and to the Equipment and all rights in, to and
under this Agreement related to such Equipment.
(c) If Lessor notifies Lessee of its intent to assign this Agreement, Lessee agrees that it
shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially
in the form of Exhibit H attached hereto within five (5) business days after its receipt of such
request.
Section 11.02. Assignment and Subleasing by Lessee. None of Lessee’s right, title, and
interest in, to and under this Agreement or any portion of the Equipment may be assigned,
encumbered or subleased by Lessee for any reason, and any purported assignment,
encumbrance or sublease without Lessor’s prior written consent shall be null and vo id.
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ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an
“Event of Default” under this Agreement:
(a) Failure by Lessee to (i) pay any Rental Payment or other payment required
to be paid under this Agreement within ten (10) days after the date when due as specified
herein, (ii) maintain insurance as required herein, or (iii) observe and perform any
covenant, condition or agreement on its part to be observed or performed under Section
2.01(k), 2.01(m), 2.01(r), 2.01(u), 2.01(w), 5.03, 6.01 or 6.02 hereof;
(b) Failure by Lessee to observe and perform any covenant, condition or
agreement contained in this Agreement on its part to be observed or performed, other
than as referred to in subparagraph (a) above, for a period of thirty (30) days after written
notice specifying such failure and requesting that it be remedied is given to Lessee by
Lessor, unless Lessor shall agree in writing to an extension of such time prior to its
expiration; provided that, if the failure stated in the notice cannot be corrected within the
applicable period, Lessor will not unreasonably withhold its consent to an extension of
such time if corrective action is instituted by Lessee within the applicable period and
diligently pursued until the default is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant
to this Agreement or its execution, delivery or performance shall prove to have been
false, incorrect, misleading, or breached in any material respect on the date when made;
(d) Any default occurs under any other agreement for borrowing money, lease
financing of property or otherwise receiving credit under which Lessee is an obligor, if
such default (i) arises under any other agreement for borrowing money, lease financing of
property or provision of credit provided by Lessor or any affiliate of Lessor, or (ii) arises
under any obligation for governmental funds (other than enterprise revenues specifically
and solely pledged to the repayment of other obligations) under which there is
outstanding, owing or committed an aggregated amount in excess of $1,000,000 in each
case under which the Lessee is an obligor, and such default remains uncured following
the applicable cure period, if any, and either (1) arises from a failure to pay any amounts
due with respect to such agreement for borrowing money, lease financing of property or
provision of credit and/or (2) causes or permits amounts to become immediately due and
payable in full as a result of such default. In event of a default under this 12.01(d), prior
to exercising any remedies under Section 12.02 of this Agreement, the Lessor shall enter
into good faith negotiations with Lessee to ensure the continued payment of Rental
Payments and performance of Lessee’s obligations under this Agreement;
(e) Lessee shall (i) apply for, or consent to, the appointment of a receiver,
trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of
Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as
they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an
order for relief entered against it under applicable federal bankruptcy law, or (v) file a
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voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an
arrangement with creditors or taking advantage of any insolvency law or any answer
admitting the material allegations of a petition filed against Lessee in any bankruptcy,
reorganization, moratorium, liquidation, readjustment or insolvency proceeding;
(f) An order, judgment or decree shall be entered by any court of competent
jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator
for Lessee or of all or a substantial part of the assets of Lessee, in each case without its
application, approval or consent, and such order, judgment or decree shall continue
unstayed and in effect for any period of thirty (30) consecutive days;
(g) Any Pole Agreement shall be terminated (whether by Lessee, the Pole
Owner or otherwise) for any reason whatsoever prior to such time as full and marketable
title in the Equipment purchased thereunder has passed to and vested in Lessee; or
(h) Any license granted pursuant to any Pole Agreement and relating to any
Equipment shall be canceled, terminated, suspended, revoked or otherwise not in full
force and effect at any time during the Lease Term.
Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall
have the right, at its sole option without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments
payable by Lessee and other amounts payable by Lessee hereunder to the end of the then
current Original Term or Renewal Term to be immediately due and payable;
(b) With or without terminating the Lease Term, but subject to the Light Pole
License Agreement, Lessor may enter the premises where the Equipment is located and
retake possession of such Equipment or require Lessee at Lessee’s expense to promptly
return any or all of such Equipment to the possession of Lessor at such place within the
State of California as Lessor shall specify, and sell or lease such Equipment or, for the
account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely
from legally available funds, for the difference between (i) the Rental Payments payable
by Lessee and other amounts hereunder that are payable by Lessee to the end of the then
current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of
any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising
its remedies hereunder, including without limitation all expenses of taking possession,
storing, reconditioning and selling or leasing such Equipment, any costs related to
removal of equipment owned by Southern California Edison or other equipment, and all
brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of
Section 3.03 and provided, that to the extent that such net proceeds (after payment of
costs) exceed the sum of the remaining Rental Payments and any other amounts due to
Lessor hereunder, Lessor shall promptly pay the amount of such excess to Lessee. The
exercise of any such remedies respecting any such Event of Default shall not relieve
Lessee of any other liabilities hereunder or with respect to the Equipment;
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(c) Reserved; and/or
(d) Lessor may take whatever action at law or in equity may appear necessary
or desirable to enforce its rights under this Agreement or as a secured party in any or all
of the Equipment.
Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to
Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given hereunder now or hereafter existing at law or in equity. No
delay or omission to exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor
to exercise any remedy reserved to it in this Article XII it shall not be necessary to give any
notice other than such notice as may be required in this Article XII.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this
Agreement shall be sufficiently given and shall be deemed given when delivered or mailed by
registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile
transmission (with electronic confirmation) to the parties hereto at the addresses immediately
after the signatures to this Agreement (or at such other address as either party hereto shall
designate in writing to the other for notices to such party) and to any assignee at its address as it
appears on the registration books maintained by Lessee.
Section 13.02. Binding Effect. This Agreement shall inure to the benefit of and shall be
binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.03. Severability. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate
or render unenforceable any other provision hereof.
Section 13.04. Amendments, Changes and Modifications. This Agreement may only be
amended by Lessor and Lessee in writing.
Section 13.05. Execution in Counterparts. This Agreement may be simultaneously
executed in several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument; provided, that only Counterpart No. 1 of this
Agreement shall constitute chattel paper for purposes of the applicable Uniform Commercial
Code.
Section 13.06. Applicable Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State. The parties hereto consent to jurisdiction in
the State of California and venue in any state or Federal court located in the County of Riverside,
California.
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Section 13.07. Captions. The captions or headings in this Agreement are for convenience
only and in no way define, limit or describe the scope or intent of any provisions or sections of
this Agreement.
Section 13.08. Entire Agreement. The parties agree that this Agreement constitutes the
final and entire agreement between the parties superseding all conflicting terms or provisions of
any prior proposals, term sheets, solicitation documents, requests for proposals, award notices,
approval letters or any other agreements or understandings between the parties.
Section 13.09. Benefits Limited to Parties. Nothing in this Agreement, expressed or
implied, is intended to give to any person or entity other than Lessee, Lessor (and permitted
assigns and Lease Servicer, if any) any right, remedy or claim und er or by reason of this
Agreement.
Section 13.10. Amendment and Restatement. (a) This Agreement shall become effective
on the Commencement Date and shall supersede, amend and restate all provisions of the Original
Agreement as of such date. From and after the Commencement Date, all references made to the
Original Agreement in any instrument or document shall, without more, be deemed to refer to
this Agreement. Without limiting the foregoing, the parties to this Agreement hereby
acknowledge and agree that the “Agreement” referred to in the Original Agreement shall from
and after the date hereof be deemed a reference to this Agreement.
(b) This Agreement supersedes the Original Agreement, insofar as it constitutes
the entire agreement between the parties concerning the subject matter of this Agreement, but
does not constitute a novation of the Original Agreement or any of the obligations under the
Original Agreement. Without in any way limiting the terms of the Original Agreement, the
Lessee confirms that the existing Liens provided for hereunder continue the Liens granted
pursuant to the Original Agreement.
Section 13.11. No Advisory or Fiduciary Relationship. In connection with all aspects of
each transaction contemplated by this Agreement (including in connection with any amendment,
waiver or other modification hereof or of any other related document), the Lessee acknowledges
and agrees that: (a) (i) the transactions regarding this Agreement provided by the Lessor and any
affiliate thereof are arm’s-length commercial transactions between the Lessee, on the one hand,
and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal,
accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the
Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of
the transactions contemplated by this Agreement and by the other related documents;
(b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor
any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated
by this Agreement except those obligations expressly set forth herein and in the other related
documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its
affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent
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permitted by law, the Lessee, hereby waives and releases any claims that it may have against the
Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary
duty in connection with any aspect of any transactions contemplated by this Agreement.
Section 13.12. Electronic Signatures. The Related Agreements may be executed and
delivered by facsimile signature or other electronic or digital means (including, without
limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the
same force and effect as an original signature, it being the express intent of the parties to create a
valid and legally enforceable contract between them. The exchange and delivery of the Related
Agreements and the related signature pages via facsimile or as an attachment to electronic mail
(including in PDF) shall constitute effective execution and delivery by the parties and may be
used by the parties for all purposes. Notwithstanding the foregoing, at the request of either party,
the parties hereto agree to exchange inked original replacement signature pages as soon
thereafter as reasonably practicable.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
[Signature Page of Equipment Lease/Purchase Agreement]
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in
their names by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
Banc of America Leasing & Capital, LLC City of Lake Elsinore, California
11333 McCormick Road
Hunt Valley II 130 South Main Street
M/C MD5-032-07-05 Lake Elsinore, CA 92530
Hunt Valley, MD 21031 Attention: Jason Simpson
Attention: Contract Administration Phone: (951) 674-3124 (ext. 362)
Fax No.: (443) 541-3057 E-mail: jsimpson@Lake-Elsinore.org
By: _______________________________ By: ____________________________________
Name: _________________________ Name: ______________________________
Title: __________________________ Title: _______________________________
(Seal)
Attest:
By: ____________________________________
Name: ______________________________
Title: _______________________________
Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that this Agreement constitutes chattel paper (as defined in the applicable Uniform
Commercial Code), no security interest or ownership herein may be created through the transfer
or possession of any Counterpart other than Counterpart No. 1.
LIST OF EXHIBITS
Exhibit A — Equipment Schedule
Exhibit B — Payment Schedule
Exhibit C-1 — Form of Authorizing Resolution
Exhibit C-2 — Form of Incumbency and Authorization Certificate
Exhibit D — Form of Opinion of Counsel
Exhibit E — Reserved
Exhibit F — Form of Self-Insurance Certificate
Exhibit G — Description of Additional Lessee-Owned Streetlights
Exhibit H — Form of Notice and Acknowledgement of Assignment
Exhibit I — Reserved
Exhibit J — Reserved
Exhibit K — Reserved
Exhibit L — Form of Investor Letter
Exhibit M — Reserved
Exhibit N — Permitted Encumbrances on Real Property
Exhibit O — Form of Notice of Retired Streetlights
A-1
EXHIBIT A
EQUIPMENT SCHEDULE
The Equipment includes: (i) any and all of the equipment and other property (A) now
existing or hereafter acquired or installed with proceeds of the Agreement including, but not
limited to, street light poles (as further described below under the heading Streetlight ID
Information and in Exhibit G hereto), street lighting conversion equipment, and energy
conservation equipment (including all machinery, equipment, items, parts, materials and all other
property) to be acquired and installed thereon or with respect thereto, and (B) all machinery,
equipment, items, parts, materials and all other property now existing or hereafter acquired and
installed pursuant to that certain (a) Appendix 4 to the WRCOG EPA, (b) Appendix 4 to the
Professional Services Agreement, and (c) the Implementation Agreement (whether such goods
constitute inventory, equipment or fixtures under, and as such terms are defined in, Article 9 of
the California Commercial Code) and related improvements and equipment, and all
replacements, repairs, restorations, modification and improvements thereof, together with all
attachments, additions, accessions, parts, repairs, improvements, replacements and substitutions
thereof; (ii) any property acquired in substitution, renewal, repair or replacement for or as
additions, improvements, accessions and accumulations to any of the property described in
clause (i); and (iii) any accessories, parts and appurtenances appertaining or attached to any of
such property or from time to time incorporated therein or installed thereon.
The Equipment includes, but is not limited to, 3,911 streetlight poles, the LED lamps
installed therein and the other related items therein or attached thereto (as described above).
Such streetlight poles include (i) the 300 streetlight poles as listed on Exhibit G hereto, the LED
lamps installed therein and the other related items therein or attached thereto, and (ii) the 3,611
street light poles, the LED lamps installed therein and the other related items therein or attached
thereto (as described above), identified by the streetlight ID numbers and other identifying
information set forth below:
B-1
EXHIBIT B
PAYMENT SCHEDULE
RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PREPAYMENT
PRICE
(including
prepayment
premium, if
applicable)
12/1/21 $ 162,362.59 $29,901.18 $132,461.41 $3,239,007.05 $3,303,787.19
6/1/22 162,362.59 49,718.76 112,643.83 3,126,363.22 3,188,890.48
12/1/22 162,362.59 47,989.68 114,372.91 3,011,990.31 3,072,230.12
6/1/23 162,362.59 46,234.05 116,128.54 2,895,861.77 2,953,779.01
12/1/23 162,362.59 44,451.48 117,911.11 2,777,950.66 2,833,509.67
6/1/24 162,362.59 42,641.54 119,721.05 2,658,229.61 2,711,394.20
12/1/24 162,362.59 40,803.82 121,558.77 2,536,670.84 2,587,404.26
6/1/25 162,362.59 38,937.90 123,424.69 2,413,246.15 2,461,511.07
12/1/25 162,362.59 37,043.33 125,319.26 2,287,926.89 2,333,685.43
6/1/26 162,362.59 35,119.68 127,242.91 2,160,683.98 2,203,897.66
12/1/26 162,362.59 33,166.50 129,196.09 2,031,487.89 2,072,117.65
6/1/27 162,362.59 31,183.34 131,179.25 1,900,308.64 1,938,314.81
12/1/27 162,362.59 29,169.74 133,192.85 1,767,115.79 1,802,458.11
6/1/28 162,362.59 27,125.23 135,237.36 1,631,878.43 1,664,516.00
12/1/28 162,362.59 25,049.33 137,313.26 1,494,565.17 1,524,456.47
6/1/29 162,362.59 22,941.58 139,421.01 1,355,144.16 1,382,247.04
12/1/29 162,362.59 20,801.46 141,561.13 1,213,583.03 1,237,854.69
6/1/30 162,362.59 18,628.50 143,734.09 1,069,848.94 1,091,245.92
12/1/30 162,362.59 16,422.18 145,940.41 923,908.53 942,386.70
6/1/31 162,362.59 14,182.00 148,180.59 775,727.94 791,242.50
12/1/31 162,362.59 11,907.42 150,455.17 625,272.77 637,778.23
6/1/32 162,362.59 9,597.94 152,764.65 472,508.12 481,958.28
12/1/32 162,362.59 7,253.00 155,109.59 317,398.53 323,746.50
6/1/33 162,362.59 4,872.07 157,490.52 159,908.01 163,106.17
12/1/33 162,362.60 2,454.59 159,908.01 0.00 0.00
TOTAL $4,059,064.76 $687,596.30 $3,371,468.46
Contract Rate. The Contract Rate is 3.07% per annum.
Prepayment Option Commencement Date. For purposes of Section 10.01 of the
Agreement, the Prepayment Option Commencement Date is August 17, 2021.
[Signature Page to Payment Schedule]
LESSOR: LESSEE:
BANC OF AMERICA LEASING & CAPITAL, LLC CITY OF LAKE ELSINORE, CALIFORNIA
By: _______________________________ By: ____________________________________
Name: _________________________ Name: ______________________________
Title: __________________________ Title: _______________________________
C-1-1
EXHIBIT C-1
FORM OF AUTHORIZING RESOLUTION
RESOLUTION NO. _________
AUTHORIZING THE EXECUTION AND DELIVERY OF (1)
AMENDED AND RESTATED EQUIPMENT
LEASE/PURCHASE AGREEMENT WITH BANC OF
AMERICA LEASING & CAPITAL, LLC; (2) AMENDED AND
RESTATED PAYING AGENT AGREEMENT WITH BANC OF
AMERICA LEASING & CAPITAL, LLC, WESTERN
RIVERSIDE COUNCIL OF GOVERNMENTS AND
WILMINGTON TRUST, NATIONAL ASSOCIATION; AND
AUTHORIZING CERTAIN ACTIONS IN CONNECTION
THEREWITH
WHEREAS, the City of Lake Elsinore, California (the “City”) is a municipal corporation
duly organized and existing under and pursuant to the Constitution and laws of the State of
California; and
WHEREAS, the City desired to finance certain improvements (the “Improvements”)
consisting of the acquisition of certain street lights and the installation of certain energy savings
equipment thereto as described in that certain Purchase and Sale Agreement dated May 30, 2017
(as amended and supplemented, the “Purchase Agreement”) by and between the City and
Southern California Edison, a California corporation; and
WHEREAS, the City desired to provide for financing of the acquisition and installation
of the Improvements by previously entering into an equipment lease/purchase agreement; and
WHEREAS, Banc of America Leasing & Capital, LLC (“Banc of America”) has
proposed a cost-effective lease purchase financing arrangement for refinancing the cost of the
acquisition and installation of the Improvements, as set forth under the Amended and Restated
Equipment Lease/Purchase Agreement (the “Agreement”) between Banc of America and the
City, the form of which has been presented to the City and is on file with the City Clerk; and
WHEREAS, the City desires to provide for such refinancing in the approximate amount
of $_________; and
WHEREAS, the City has determined that this lease financing arrangement is the most
economical means for providing the Improvements to the City; and
WHEREAS, as a condition of the Agreement, the City must properly maintain, repair and
replace such streetlights (the “Services”) during the term of the Lease Agreement; and
C-1-2
WHEREAS, the City believes that it can achieve economies of scale for such Services if
the City authorizes Western Riverside Council of Governments (“WRCOG”) to administer the
Services on behalf of the City and other member agencies of WRCOG; and
WHEREAS, to allow WRCOG to administer the Services, the City previously entered
into an Implementation Agreement (the “Implementation Agreement”) with WRCOG; and
WHEREAS, the City desires to enter into the Amended and Restated Paying Agent
Agreement (the “Paying Agent Agreement”) with Banc of America and Wilmington Trust,
National Association, and WRCOG pursuant to which funds deposited in accordance with the
Agreement and Implementation Agreement will be held and disbursed, the form of which has
been presented to the City and is on file with the City Clerk.
NOW, THEREFORE, it is resolved by the City Council of the City of Lake Elsinore,
California, as follows:
SECTION 1. CEQA. Based upon its review of the entire record before the City
Council, the City Council in its role as a CEQA responsible agency hereby finds and determines
that the proposed Agreement, as part of the _________ [DESCRIBE PROJECT], is
categorically exempt from environmental review under CEQA pursuant to State CEQA
Guidelines §§ 15301, 15302, 15303 and 15061(b)(3).
The Class 1 exemption specifically exempts from further CEQA review the operation,
repair, maintenance, and minor repair of existing public or private structures, involving
negligible or no expansion of use beyond that existing at the time of the lead agency’s
determination. The lease financing arrangement will provide Improvements that require the
maintenance on existing streetlights and does not involve an expansion of the floor area of the
structures. The replacement of the bulbs to high-efficiency bulbs is a minor alteration. It does
not change the use of the street lights, and is more beneficial in terms of reduced energy use and
improved public safety. The Class 2 exemption specifically exempts from further CEQA review
the replacement or reconstruction of existing structures and facilities where the new structure
will be located on the same site as the structure replaced and will have substantially the same
purpose and capacity as the structure replaced. The Improvements will have the same purpose as
the existing streetlights and the new LED bulbs will not exceed the capacity of the existing
bulbs. The Class 3 exemption specifically exempts from further CEQA review the construction
and location of limited numbers of new, small facilities or structures; installation of small new
equipment and facilities in small structures; and the conversion of existing small structures from
one use to another where only minor modifications are made to the exterior of the structure. The
Improvements include the installation of new LED bulbs in existing small structures and general
maintenance in accordance with the Class 3 exemption.
None of the exceptions to the use of the Class 1, 2 or 3 categorical exemptions identified
in State CEQA Guidelines section 15300.2 apply. The Improvements include the retrofitting of
light poles within the City’s jurisdiction, but none are located in a particularly sensitive
environment and therefore there would not be impacts on an environmental resource of
hazardous or critical concern. The Improvements will not result in a cumulative impact from
successive projects of the same type in the same place, over time, as they entail the upgrade of
C-1-3
bulbs on all currently owned SCE fixtures within the City’s jurisdiction. There are no unusual
circumstances surrounding the Improvements that result in a reasonable possibility of a
significant effect on the environment, as there are no sensitive resources on the existing pole sites
and the Improvements do not involve structural modifications. The replacement of bulbs and
maintenance of existing structures will not damage scenic resources, including trees, historic
buildings, rock outcroppings, or similar resources. The Improvements will not take place on
any hazardous waste sites or cause a substantial adverse change in the significance of a historical
resource as the existing poles are not considered historical resources. Thus, the categorical
exemptions apply, and no further environmental review is required.
The Improvements to be provided as part of the lease financing arrangement are also
exempt from CEQA pursuant to State CEQA Guidelines Section 15061(b)(3), which exempts a
Project if “the activity is covered by the general rule that CEQA applies only to projects which
have the potential for causing a significant effect on the environment. Where it can be seen with
certainty that there is no possibility that the activity in question may have a significant effect on
the environment, the activity is not subject to CEQA.” The execution of the Agreement
regarding the Improvements project involves replacing existing light bulbs in City’s jurisdictions
with LED technology bulbs. The Improvements do not involve an expansion of use or the bulbs’
capacity. Accordingly, there is no possibility that obtaining financing for the replacement of
bulbs will have a significant effect on the environment.
SECTION 2. Authorization and Approval of Agreement and Paying Agent Agreement.
The City Council hereby approves and authorizes the City to enter into (a) the Agreement in a
principal amount which shall not exceed $__________ in the form attached hereto as Exhibit A
and incorporated hereby by reference, together with any changes therein or additions thereto
which are deemed advisable by the City Manager, and (b) the Paying Agent Agreement in the
form attached hereto as Exhibit B and incorporated hereby by reference, together with any
changes therein or additions thereto which are deemed advisable by the City Manager. The City
Manager is authorized and directed to take all steps and actions which are necessary to
accomplish execution of the Agreement and Paying Agent Agreement pursuant to the
authorization given by and the conditions specified in this resolution. The City Manager, or his
designee, is authorized to execute the Agreement and the Paying Agent Agreement for and on
behalf of the City.
SECTION 3. Attestations. The City Clerk or other appropriate City officer is hereby
authorized and directed to attest the signature of the City Manager or of such oth er person or
persons as may have been designated by the City Manager, and to affix and attest the seal of the
City, as may be required or appropriate in connection with the execution and delivery of the
Agreement and the Paying Agent Agreement.
SECTION 4. Other Actions. The City Manager and his designees are each hereby
authorized and directed, jointly and severally, to take any and all actions and to execute and
deliver any and all agreements, documents and certificates which they may deem necessary or
advisable in order to carry out, give effect to and comply with the terms of this Resolution, the
Agreement and the Paying Agent Agreement. Such actions are hereby ratified, confirmed and
approved.
C-1-4
SECTION 5. General Liability. Nothing contained in this Resolution, the Agreement
nor any other instrument shall be construed with respect to the City, as Lessee, as incurring a
pecuniary liability or charge upon the general credit of the City, as Lessee, or against its taxing
power, nor shall the breach of any agreement contained in this Resolution, the Agreement or any
other instrument or document executed in connection therewith impose any pecuniary liability
upon the City, as Lessee, or any charge upon its general credit or against its taxing power, except
to the extent that the Rental Payments payable under the Agreement are limited obligations of
the City, as Lessee, subject to annual appropriation by its governing body, as provided in the
Agreement
SECTION 6. Appointment of Authorized Lessee Representatives. The City Manager
and her or his designees (the “Authorized Representatives”) are each hereby designated to act as
authorized representatives of the City, as Lessee, for purposes of the Agreement until such time
as the governing body of the City, as Lessee, shall designate any other or different authorized
representative for purposes of the Agreement.
SECTION 7. Severability. If any section, paragraph, clause or provision of this
Resolution shall for any reason be held to be invalid or unenforceable, the i nvalidity or
unenforceability of such section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Resolution.
SECTION 8. Repealer. All bylaws, orders and resolutions or parts thereof, inconsistent
herewith, are hereby repealed to the extent only of such inconsistency. This repealer shall not be
construed as reviving any bylaw, order, resolution or ordinance or part thereof.
SECTION 9. Location and Custodian of Records. The documents and materials
associated with the action that constitute the record of proceedings on which these findings are
based are located at [insert address and name].
SECTION 10. CEQA Notice of Exemption. The City Council hereby directs staff to
prepare and file a Notice of Exemption with the Riverside County Clerk within five (5) working
days of the approval of the proposed project.
SECTION 11. Effect. This Resolution shall take effect immediately upon its passage.
PASSED AND ADOPTED this ___ day of __________, 2018, by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
C-1-5
Approved:
___________________, Mayor
Attest:
___________________, City Clerk
C-2-1
EXHIBIT C-2
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Lake
Elsinore, California (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting
officials of Lessee (the “Officials”) in the capacity set forth opposite their respective
names below and the original or facsimile signatures below are true and correct as of the
date hereof;
B. The Resolution of Lessee’s City Council, No. _______,
dated __________, authorized the Officials, on behalf of Lessee, to negotiate, execute
and deliver the Amended and Restated Equipment Lease/Purchase Agreement dated as of
August 17, 2021 by and between Lessee and Banc of America Leasing & Capital, LLC
(“Lessor”), the Amended and Restated Paying Agent Agreement dated as of August 17,
2021 by and among Lessee, Western Riverside Council of Governments (“WRCOG”),
Lessor and Wilmington Trust, National Association and all documents related thereto and
delivered in connection therewith (collectively, the “Agreements”).
NAME OF OFFICIAL TITLE SIGNATURE
__________________ _________________ _____________________
__________________ _________________ _____________________
__________________ _________________ _____________________
Dated: August 17, 2021 By: ____________________________________
Name: Susan M. Domen
Title: City Clerk
(The signer of this Certificate cannot be listed above as authorized to execute the Agreements.)
D-1
EXHIBIT D
FORM OF OPINION OF COUNSEL TO LESSEE
(to be typed on letterhead of counsel)
[Closing Date]
Banc of America Leasing & Capital, LLC
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Amended and Restated Equipment Lease/Purchase Agreement, dated as of
August 17, 2021, between Banc of America Leasing & Capital, LLC, as
Lessor, and the City of Lake Elsinore, California, as Lessee
Ladies and Gentlemen:
As legal counsel to the City of Lake Elsinore, California (“Lessee”), I have examined
(a) an executed counterpart of a certain Amended and Restated Equipment Lease/Purchase
Agreement, dated as of August 17, 2021 and Exhibits thereto by and between Banc of America
Leasing & Capital, LLC (together with its successors, assigns and transferees, and as more
particularly defined in the Agreement, “Lessor”) and Lessee (the “Agreement”), which, among
other things, provides for the lease of certain property (the “Equipment”), a certain Amended
and Restated Paying Agent Agreement dated as of August 17, 2021 (the “Paying Agent
Agreement”) by and among Lessee, Western Riverside Council of Governments (“WRCOG”),
Lessor and Wilmington Trust, National Association, as paying agent and all documents related
thereto and delivered in connection therewith, (b) an executed counterpart of the ordinances or
resolutions of Lessee with respect to authorization of the transaction contemplated by the
Agreement and documents related thereto and (c) such other opinions, documents and matters of
law as I have deemed necessary in connection with the following opinions. The Agre ement, the
Paying Agent Agreement and the other WRCOG Agreements (as defined in the Agreement) are
referred to collectively as the “Transaction Documents.”
The opinions expressed herein are based on an analysis of existing statutes, regulations,
rulings and court decisions and cover certain matters not directly addressed by such authorities.
Such opinions may be affected by actions taken or omitted or events occurring after the date
hereof. We have not undertaken to determine, or to inform any person, wh ether any such actions
or events are taken or do occur. We express no opinion with respect to any indemnification,
contribution, lien priority or choice of law provisions contained in the foregoing documents.
D-2
In our examination, we have assumed, without independent investigation, the authenticity
of all documents submitted to us as originals, of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter documents and the accuracy
of the statements and representations contained in such documents. In addition, we have assumed
the authority of and due execution by each of the parties to the documents other than the Lessee.
As used in this opinion, the phrase "to our current actual knowledge" means knowledge
as we have obtained from (i) the incumbency and signature certificate of the Lessee, (ii) the
representations and warranties contained in each closing certificate of the Lessee, and (iii)
knowledge of facts or other information currently known to law yers in our firm who have
performed legal services for the Lessee.
Based on the foregoing, I am of the following opinions:
1. Lessee is a city, duly organized and existing under the laws of the State.
2. Lessee has the requisite power and authority to lease and acquire the
Equipment and to execute and deliver the Transaction Documents and to perform its
obligations under the Transaction Documents.
3. The Transaction Documents have been duly authorized, approved,
executed and delivered by and on behalf of Lessee and the Transaction Documents
constitute legal, valid and binding obligations of Lessee enforceable in accordance with
their respective terms.
4. The authorization, approval, execution and delivery of the Transaction
Documents and all other proceedings of Lessee relating to the transactions contemplated
thereby have been performed in accordance with all open meeting laws, public bidding
laws and all other applicable state or federal laws.
5. To our current actual knowledge there is no proceeding pending or
threatened in any court or before any governmental authority or arbitration board or
tribunal that, if adversely determined against the Lessee, would adversely affect the
transactions contemplated by the Transaction Documents or the security interest of
Lessor or its assigns, as the case may be, in the Equipment or other collateral thereunder.
All capitalized terms herein shall have the same meanings as in the Transaction
Documents unless otherwise provided herein. Lessor and its successors, assigns and
transferees are entitled to rely on this opinion.
Sincerely,
E-1
EXHIBIT E
RESERVED
F-1
EXHIBIT F
FORM OF SELF INSURANCE CERTIFICATE
Banc of America Leasing & Capital, LLC
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Amended and Restated Equipment Lease/Purchase Agreement, dated as of
August 17, 2021 (the “Agreement”) between Banc of America Leasing &
Capital, LLC, as Lessor, and the City of Lake Elsinore, California, as
Lessee
In connection with the above-referenced Agreement, the City of Lake Elsinore,
California (the “Lessee”), the Lessee warrants and represents to Banc of America Leasing &
Capital, LLC the following information. The terms capitalized herein but not defined herein
shall have the meanings assigned to them in the Agreement.
1. The Lessee is self-insured for damage or destruction to the Equipment. The dollar
amount limit for property damage to the Equipment under such self-insurance program is
$____________. [The Lessee maintains an umbrella insurance policy for claims in excess of
Lessee’s self-insurance limits for property damage to the Equipment which policy has a dollar
limit for property damage to the Equipment under such policy of $____________.]
2. The Lessee is self-insured for liability for injury or death of any person or damage
or loss of property arising out of or relating to the condition or operation of the Equipment. The
dollar limit for such liability claims under the Lessee’s self-insurance program is
$____________. [The Lessee maintains an umbrella insurance policy for claims in excess of
Lessee’s self-insurance limits for liability which policy has a dollar limit for liabilities for i njury
and death to persons as well as damage or loss of property arising out of or relating to the
condition or operation of the Equipment in the amount of $____________.
[3]. The Lessee maintains a self-insurance fund. Monies in the self-insurance fund
[are/are not] subject to annual appropriation. The total amount maintained in the self-insurance
fund to cover Lessee’s self-insurance liabilities is $____________. [Amounts paid from the
Lessee’s self-insurance fund are subject to a dollar per claim of $____________.]
[3]. The Lessee does not maintain a self-insurance fund. The Lessee obtains funds to
pay claims for which it has self-insured from the following sources: ______________________.
Amounts payable for claims from the such sources are limited as follows: _________________.
F-2
4. Attached hereto are copies of certificates of insurance with respect to policies
maintained by Lessee.
LESSEE:
City of Lake Elsinore, California
By: ____________________________________
Name: ______________________________
Title: _______________________________
G-1
EXHIBIT G
ADDITIONAL LESSEE-OWNED STREETLIGHTS
The Additional Lessee-Owned Streetlights (all of which constitute Equipment) includes, but is
not limited to, the following 300 street light poles, the LED lamps installed therein and the other
related items therein or attached thereto (as described in Exhibit A), identified by the streetlight
ID numbers and other identifying information set forth below:
H-1
EXHIBIT H
FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
DATED ____________
Banc of America Leasing & Capital, LLC (“Assignor”) hereby gives notice that it has
assigned and sold to _______________________ (“Assignee”) all of Assignor’s right, title and
interest in, to and under the Amended and Restated Equipment Lease/Purchase Agreement (the
“Agreement”) dated as of August 17, 2021, between Assignor and the City of Lake Elsinore,
California (“Lessee”), together with all exhibits, schedules, addenda and attachments related
thereto, and all certifications and other documents delivered in connection therewith, the Rental
Payments and other amounts due under the Agreement, all of Assignor’s right, title and interest
in the Equipment (as defined in the Agreement) and all of Assignor’s right, title and interest in,
to and under the the Amended and Restated Paying Agent Agreement dated as of August 17,
2021 by and among Lessee, Western Riverside Council of Governments, Lessor and Wilmington
Trust, National Association, as paying agent, together with the Collection Fund and the Rental
Payment Subaccount and moneys and investments held from time to time therein (but not the
Administrative Fee Subaccount, the Annual Maintenance Subaccount or the Re-lamping Reserve
Subaccount therein, each as defined therein) (collectively, the “Assigned Property”). Each
capitalized term used but not defined herein has the meaning set forth in the Agreement.
1. For purposes of Section 11.01 of the Agreement, Lessee hereby acknowledges the
effect of the assignment of the Assigned Property and absolutely and unconditionally agrees to
deliver to Assignor, as Lease Servicer for Assignee, all Rental Payments and other amounts
coming due under the Agreement in accordance with the terms thereof on and after the date of
this Acknowledgment. The Investor Letter is attached hereto. It is hereby acknowledged that
Lessee has never reviewed the agreement or any other instrument pursuant to which the
assignment was made (the “Assignment Agreement”), assumes that such Assignment Agreement
is valid and binding as between the Assignor and the Assignee, and relies on the representation
(which is made hereby) that such assignment has been done in compliance with all applicable
law.
2. Lessee and Assignor hereby agree that: (i) Assignee shall have all the rights of
Lessor under the Agreement and all related documents, including, but not limited to, the rights to
issue or receive all notices and reports, to give all consents or agreements to modifications
thereto, to receive title to the Equipment in accordance with the terms of the Agreement, to
declare a default and to exercise all rights and remedies thereunder in connection with the
occurrence of an Event of Default or an Event of Non-appropriation in accordance with the
Agreement; and (ii) except as provided in Section 3.03 of the Agreement, the obligations of
Lessee to make Rental Payments and to perform and observe the other covenants and agreements
contained in the Agreement shall be absolute and unconditional in all events without abatement,
diminution, deduction, set-off or defense.
H-2
3. Lessee agrees that, as of the date of this Notice and Acknowledgment of
Assignment (this “Acknowledgement”), the following information about the Agreement is true,
accurate and complete:
Number of Rental Payments Remaining – _______________
Amount of Each Rental Payment – $_______________
Total Amount of Rents Remaining – $_______________
Frequency of Rental Payments – _______________
Next Rental Payment Due – _______________
4. The Agreement remains in full force and effect, has not been amended, no Event of
Default (or event which with the passage of time or the giving of notice or both would constitute
an Event of Default) has occurred thereunder and no Event of Non-appropriation has occurred or
is threatened with respect thereto.
5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of
the Agreement and confirms that the assignment to Assignee has been made in accordance with
the provisions of that Section.
6. Any inquiries of Lessee related to all Rental Payments and other amounts coming
due pursuant to the Agreement on and after the date of this Acknowledgment should be remitted
to Assignor, as Lease Servicer for Assignee, at the following address (or such other address as
provided to Lessee in writing from time to time by Assignor):
Banc of America Public Capital Corp
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
7. Except as stated above in Section 6 hereof, any inquiries and/or notices of the
Lessee related to the Agreement should be directed to Assignee at the address listed below:
______________________________
______________________________
______________________________
Attention: ______________________
H-3
ACKNOWLEDGED AND AGREED:
LESSEE: CITY OF LAKE ELSINORE, CALIFORNIA
By: _________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR:
BANC OF AMERICA LEASING & CAPITAL, LLC
By: _________________________________
Name: ___________________________
Title: ____________________________
I-1
EXHIBIT I
RESERVED
J-1
EXHIBIT J
RESERVED
K-1
EXHIBIT K
RESERVED
L-1
EXHIBIT L
FORM OF INVESTOR LETTER
I, ____________, ____________, of ____________ (the “Purchaser”) do hereby certify
for and on behalf of the Purchaser as follows with respect to that certain $____________
Amended and Restated Equipment Lease/Purchase Agreement, dated as of August 17, 2021 (the
“Agreement”) between Banc of America Leasing & Capital, LLC, as Lessor, and the City of
Lake Elsinore, California, as Lessee:
1. The Purchaser is a Qualified Institutional Buyer as defined in Rule 144A
promulgated under the Securities Act of 1933, as amended or an “accredited investor” as defined
in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended. The
Purchaser has such knowledge and experience in financial and business matters in general, and
in transactions such as the financial arrangements contemplated by the Agreement in particular,
that it is capable of evaluating and has evaluated the merits and risks of entering into the
financial arrangements contemplated by the Agreement and the Purchaser understands the risks
of its purchase of the Agreement.
2. The Purchaser has conducted its own investigation of the financial condition of
the Lessee, the purpose for which the Agreement is being entered into and of the security for
payment of the Rental Payments due under the Agreement, and has obtained such information
regarding the Agreement and the Lessee and its operations, financial condition and financial
prospects as the Purchaser deems necessary to make an informed investment decision with
respect to is purchase of the Agreement.
3. The Purchaser is purchasing the Agreement for its own account and without a
present intention to sell any portion thereof to any other person, provided that the Purchaser
retains the right at any time to dispose of the Agreement or any interest therein as it may
determine to be in its best interests and that any subsequent resale shall be made only in
accordance with the Agreement and applicable securities laws.
4. The Purchaser acknowledges and agrees that the obligation of the Lessee to pay
Rental Payments under the Agreement shall constitute a current expense of the Lessee and shall not
in any way be construed to be a debt of the Lessee in contravention of any applicable
constitutional or statutory limitations or requirements concerning the creation of indebtedness by
the Lessee, nor shall anything contained in the Agreement constitute a pledge of the full faith and
credit or taxing power of the Lessee.
5. Each of the Lessee, WRCOG, the Lessee’s and WRCOG’s financial advisor and
placement agent has sought and shall seek and obtain financial, legal (including securities law),
tax, accounting and other advice (including as it relates to structure, timing, terms and similar
matters and compliance with legal requirements applicable to such parties) with respect to the
Agreement from its own financial, legal, tax and other advisors (and not from the Purchaser or its
affiliates) to the extent that the Lessee, WRCOG, the Lessee’s and WRCOG’s financial advisor
[or the placement agent] desires, should or needs to obtain such advice. The Purchaser expresses
L-2
no view regarding the legal sufficiency of its representations for purposes of compliance with
any legal requirements applicable to the Lessee, WRCOG, the Lessee’s and WRCOG’s financial
advisor or the placement agent or any other party, or the correctness of any legal interpretation
made by counsel or counsels to any such entity or any other party with respect to such matters.
The Purchaser is not responsible for any the Lessee, WRCOG, the Lessee’s and WRCOG’s
financial advisor or the placement agent or any other party’s compliance or noncompliance with
any applicable law.
DATED this _______ day of __________, 20__.
[PURCHASER/ASSIGNEE]
By: ____________________________________
Name: ______________________________
Title: _______________________________
M-1
EXHIBIT M
RESERVED
N-1
EXHIBIT N
PERMITTED ENCUMBRANCES ON REAL PROPERTY
NONE
O-1
EXHIBIT O
FORM OF NOTICE OF RETIRED STREETLIGHTS
Banc of America Leasing & Capital, LLC
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Amended and Restated Equipment Lease/Purchase Agreement, dated as of
August 17, 2021 (as amended, the “Agreement”) between Banc of
America Leasing & Capital, LLC, as Lessor, and the City of Lake
Elsinore, California, as Lessee
In connection with the above-referenced Agreement, the City of Lake Elsinore,
California (the “Lessee”), the Lessee notifies, warrants and represents to Banc of America
Leasing & Capital, LLC the following information. The terms capitalized herein but not defined
herein shall have the meanings assigned to them in the Agreement.
(i) Pursuant to Section 5.04(c) of the Agreement, on _________, 20__1 (the
“Retirement Date”) Lessee intends to retire ____ number of Streetlights and exclude
them from Equipment and the Agreement.
(ii) No Event of Default (or event which with the passage of time or the giving
of notice or both would constitute an Event of Default) has occurred thereunder and no
Event of Non-appropriation has occurred or is threatened with respect to the Agreement.
All representations, warranties and covenants set forth in the Agreement are hereby
reaffirmed for the benefit of Lessor and remain true and correct.
(iii) Subject to the satisfaction of the requirements in Section 5.04(c) of the
Agreement, Lessee may retire and exclude from the Equipment up to ____ Streetlights in
the aggregate over the course of the Lease Term without prepayment or penalty or
obligation to replace such Streetlights.
(iv) The cumulative number of Retired Streetlights under the Agreement,
including the Streetlights proposed to be retired in (i) above, will be ____ on the
Retirement Date, which is less than or equal to the maximum amount of Streetlights
permitted to be required under the Agreement (and described in (iii) above).
1 This should be a date that is at least 30 days following the date of this Notice.
O-2
(v) After the proposed retirement of the Streetlights on the Retirement Date,
the number of Streetlights that will remain subject to the Agreement will equal _____,
consisting of ____ Lessee-Owned Streetlights and _____ Additional Lessee-Owned
Streetlights.
Please let us know if Lessor requires any other information or confirmations with respect
to the Retired Streetlights, the Equipment and the Collateral.
LESSEE:
City of Lake Elsinore, California
By: ____________________________________
Name: ______________________________
Title: _______________________________
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Amended and
Restated Equipment Lease/Purchase Agreement with Banc of America Leasing & Capital, LLC
(the “Agreement”), in accordance with California Government Code Section 5852.1. Such good
faith estimates have been provided to the City by Urban Futures, Inc. as municipal advisor to the
City (the “Municipal Advisor”), each with respect to the Agreement.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s
financing plan and current market conditions, its good faith estimate of the aggregate principal
amount of the Agreement is $3,371,468.46 (the “Estimated Principal Amount”).
True Interest Cost of the Agreement. The Municipal Advisor has informed the City that,
assuming the Estimated Principal Amount, and based on the interest rate provided by Banc of
America Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith
estimate of the true interest cost of the Agreement, which means the rate necessary to discount the
amounts payable on the respective principal and interest payment dates to the purchase price
received for the Agreement, is 3.07%.
Finance Charge of the Agreement. The Municipal Advisor has informed the City that,
assuming the Estimated Principal Amount, and based on the interest rate provided by Banc of
America Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith
estimate of the finance charge for the Agreement, which means the sum of all fees and charges
paid to third parties (or costs associated with the Agreement), is $40,000.00.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that,
assuming the Estimated Principal Amount, and based on the interest rate provided by Banc of
America Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith
estimate of the amount of proceeds expected to be received by the City, less the finance charge of
the Agreement, as estimated above, and any reserve fund funded with proceeds of the Agreement,
is $3,331,468.46.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming
the Estimated Principal Amount, and based on the interest rate provided by Banc of America
Leasing & Capital, LLC, at the time of preparation of such estimate, its good faith estimate of the
total payment amount, which means the sum total of all payments the City will make to pay debt
service on the Agreement, plus the finance charge for the Agreement, as described above, not paid
with the proceeds of the Agreement, calculated to the final maturity of the Agreement, is
$4,059,064.76.
The foregoing estimates constitute good faith estimates onl y. The actual principal amount
of the Agreement, the true interest cost thereof, the finance charges thereof, the amount of proceeds
received therefrom and total payment amount with respect thereto may differ from such good faith
estimates due to (a) the actual closing date being different than the date assumed for purposes of
such estimates, (b) the actual original principal amount being different from the Estimated
Principal Amount, (c) the actual debt service payments on the Agreement being different than the
debt service payments assumed for purposes of such estimates, (d) the actual interest rate being
different than the interest rate estimated for purposes of such estimates, (e) other market
conditions, or (f) alterations in the City’s financing plan, or a combination of such factors. The
actual closing date of the Agreement and the actual principal amount will be determined by the
City based on the timing of the need for proceeds and other factors. Market interest rates are
affected by economic and other factors beyond the control of the City.
@BCL@501151C2
2267060
AMENDED AND RESTATED PAYING AGENT AGREEMENT
This AMENDED AND RESTATED PAYING AGENT AGREEMENT, dated as of August 17, 2021
(herein, as amended, modified or supplemented from time to time, this “Agreement”), among the
CITY OF LAKE ELSINORE, a city existing under the laws of the State of California (the “Lessee”),
BANC OF AMERICA LEASING & CAPITAL, LLC, a Delaware limited liability company (together
with its permitted successors and assigns, the “Lessor”), the WESTERN RIVERSIDE COUNCIL OF
GOVERNMENTS, a joint powers authority formed under Government Code sections 6500 et seq.
(“WRCOG”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, a a national banking
association (the “Paying Agent”).
RECITALS
WHEREAS, the Lessee and the Lessor are parties to that certain Amended and Restated
Equipment Lease/Purchase Agreement, dated as of August 17, 2021 (as amended, modified,
supplemented and renewed from time to time, together with all exhibits, schedules, annexes and
other attachments thereto, the “Lease”) pursuant to which the Lessor will refinance acquisition,
installation and retrofitting of certain Equipment to be leased by Lessee, subject to the terms and
conditions thereof and make Rental Payments to the Lessor subject to the terms of the Lease.
Terms defined in the Lease or the Implementation Agreement, as applicable, are used in this
Agreement as therein defined, unless otherwise defined herein.
WHEREAS, the Lessee, Lessor, WRCOG and the Paying Agent entered into that certain
Paying Agent Agreement dated as of November 1, 2018 (the “Original Agreement”), and wish
to amend and restate the Original Agreement as set forth herein.
WHEREAS, the Lessee is a party to that certain Implementation Agreement dated as of
September 27, 2018 (as amended, modified, supplemented and renewed from time to time,
together with all exhibits, schedules, annexes and other attachments thereto, the “Implementation
Agreement” together with the Lease and this Agreement, referred to herein collectively as the
“Related Agreements”) with WRCOG pursuant to which WRCOG will provide certain services
to Lessee with respect to the retrofitting and regular maintenance, and repair services of the
Equipment.
WHEREAS, in order to facilitate the orderly distribution of payments under the Lease and
the Implementation Agreement, the Lessee, the Lessor and WRCOG have agreed that the Lessee
will make such payments to the Paying Agent to be distributed as provided herein.
WHEREAS, the Lessee, the Lessor and WRCOG have agreed to appoint the Paying Agent
to perform the duties and obligations specified herein, and the Paying Agent agrees to accept
such appointment, all on the terms and conditions hereinafter set forth; and
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
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ARTICLE I
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 1.1. Appointment of Paying Agent. The parties hereto hereby appoint Paying
Agent to serve as Paying Agent hereunder. The Paying Agent hereby accepts such appointment
and, upon receipt of any funds or Payments (defined below) from the Lessee in accordance with
this Article I, agrees to hold and disburse the Payments in accordance with this Agreement.
Section 1.2. Establishment of Collection Fund. The Paying Agent shall maintain, at the
corporate trust office of the Paying Agent, a separate segregated account entitled “City of Lake
Elsinore/Equipment Lease/Purchase Agreement, Account No. 132321-000” (the “Collection
Fund”), to be held by the Paying Agent for the benefit of the Lessor and the Lessee. The Paying
Agent shall maintain and establish the following separately segregated subaccounts within the
Collection Fund:
(a) the Rental Payment Subaccount;
(b) the Paying Agent Fee Subaccount;
(c) the Administrative Fee Subaccount;
(d) the Annual Maintenance Subaccount; and
(e) the Re-lamping Reserve Subaccount.
The Paying Agent will deposit all Rental Payments, fees, costs or expenses due and owing to the
Paying Agent under the Amended and Restated Paying Agent Agreement, administrative fees
due and payable to WRCOG under the Implementation Agreement, payments owing with respect
to Services provided by WRCOG under the Implementation Agreement, re-lamping reserve
amounts, administrative fees and any other amounts received by it in connection with the Lease,
the Implementation Agreement and this Agreement, together with any past due amounts of any
of the foregoing (collectively, the “Payments”) into the Collection Fund for distribution only in
accordance with Sections 1.3 and 1.8 hereof. All such Payments shall be promptly delivered by
the Lessee to the Paying Agent for deposit hereunder in the Collection Fund. Paying Agent shall
transfer all such Payments to the applicable subaccount within two business days after such
deposit. Lessee shall be the owner of the Collection Fund and all subaccounts therein at all
times, subject to the first priority perfected lien and security interest in the Collection Fund and
the Rental Payment Subaccount therein in favor of the Lessor; provided that Lessor shall not
have a security interest in the Administrative Fee Subaccount, the Annual Maintenance
Subaccount or the Re-lamping Reserve Subaccount; provided further that the parties hereto agree
that no amounts shall be disbursed from the Collection Fund to any subaccount other than the
Rental Payment Subaccount if at any time (x) Lessor exercises control over the Rental Payment
Subaccount pursuant to Section 1.8 hereof, (y) Paying Agent receives notice that there is a
deficiency in amounts required to be deposited to the Rental Payment Subaccount and/or (z)
Paying Agent receives notice that an Event of Default or Event of Non -appropriation has
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occurred. Neither Lessee nor Paying Agent shall create, incur, assume or permit to exist any
assignment, lien, encumbrance or other security interest on the Collection Fund or the Rental
Payment Subaccount except for the first priority perfected lien and security interest in the
Collection Fund and the Rental Payment Subaccount therein in favor of the Lessor. Neither
Lessee nor Paying Agent has any notice of any other assignment, encumbrance, lien or security
interest in respect of the Collection Fund or any subaccount thereof which is currently
outstanding, and neither Lessee nor the Paying Agent will consent to any other assignment,
encumbrance, lien or security interest in respect of the Collection Fund or the Rental Payment
Subaccount without the prior written consent of the Lessor. The Lessor shall have exclusive
control over transfers, withdrawals, and other dispositions of funds from the Collection Fund and
the Rental Payment Subaccount (but not the Administrative Fee Subaccount, the Annual
Maintenance Subaccount or the Re-lamping Reserve Subaccount) pursuant to the terms and
conditions of the Lease and the Related Agreements. Other than disbursements expressly
permitted pursuant to the terms of this Agreement, neither Lessee nor WRCOG may withdraw
any Collateral (as hereinafter defined) from the Collection Fund (except for subaccounts other
than the Rental Payment Subaccount) or the Rental Payment Subaccount without the prior
written consent of Lessor. All amounts received in the Collection Fund and each subaccount
therein shall be held by the Paying Agent in a segregated separate account for the purposes set
forth herein, in accordance with the payment order established in Section 1.3, and will not be
commingled with any other funds or accounts held by the Paying Agent. All amounts received
in the Collection Fund and the Rental Payment Subaccount (but not the Administrative Fee
Subaccount, the Annual Maintenance Subaccount or the Re-lamping Reserve Subaccount) shall
be held by the Paying Agent in trust for the benefit Lessor. All amounts received by Paying
Agent as provided in this Agreement will be held un-invested with no liability of the Paying
Agent for any interest thereon; provided that at the written direction of the Lessee, amounts in
the Administrative Fee Subaccount, the Annual Maintenance Subaccount or the Re-lamping
Reserve Subaccount may be invested from time to time.
Section 1.3. Payments. Lessee shall transmit the amount due for each Payment no later
than the due date as set forth in the Related Agreements. Provided that no Event of Default,
Event of Non-appropriation and/or event or condition that constitutes, or with the giving of
notice or the lapse of time or both would constitute, an Event of Default or an Ev ent of
Non-appropriation (each of the foregoing, a “Termination Event”) shall have occurred, within
two business days following the receipt by the Paying Agent of any Payment, the Paying Agent
shall deposit such Payments and all funds in the Collection Fund into the following subaccounts
in the Collection Fund in the following order and priority:
(a) First, all Payments and all money in the Collection Fund shall be
deposited into the Rental Payment Subaccount to the exclusion of all the other
subaccounts until there exists in the Rental Payment Subaccount funds sufficient to pay
all Rental Payments then past due and owing plus an amount sufficient to pay all Rental
Payments then due and owing plus an amount sufficient pay the sum of the Rental
Payment Interest Portion plus the Rental Payment Principal Portion coming due on the
next succeeding Payment Date as reflected on Annex I hereto, plus any past due amounts
and interest thereon, fees, costs, expenses and any other amounts due to Lessor under the
Lease or any Related Agreement. If money in the Collection Fund on a Payment Date is
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sufficient to pay all amounts described in the preceding sentence that are then due and
payable, the Paying Agent shall disburse funds in the Rental Payment Subaccount to the
Lessor as and when due to Lessor pursuant to Annex I hereto, the Lease and the Related
Agreement. If money in the Collection Fund on a Payment Date is not sufficient to pay
all amounts described in the second preceding sentence that are then due and payable, the
Paying Agent shall disburse funds in the Rental Payment Subaccount to Lessor to pay
such amounts as directed by Lessor.
(b) Second, after all amounts required by the preceding subparagraph (a) have
been deposited in full, available money in the Collection Fund shall next be deposited
into the Paying Agent Fee Subaccount in an amount sufficient to pay any fees, costs or
expenses due and owing to the Paying Agent under this Agreement including in
accordance with the column titled “Paying Agent Fee Subaccount” on Annex I attached
hereto, together with any past due amounts due to the Paying Agent hereunder. The
Paying Agent shall disburse funds in the Paying Agent Fee Subaccount to the Paying
Agent as and when due.
(c) Third, after all amounts required by the preceding subparagraphs (a) and
(b) have been deposited in full, available money in the Collection Fund shall next be
deposited into the Administrative Fee Subaccount in an amount sufficient to pay the
amount of the administrative fees due and payable to WRCOG on the next succeeding
Payment Date in accordance with the column titled “Administrative Fee Subaccount” on
Annex I attached hereto, together with any past due administrative fee amounts owing to
WRCOG. The Paying Agent shall disburse funds in the Administrative Fee Subaccount
to WRCOG as and when due.
(d) Fourth, after all amounts required by the preceding subparagraphs (a)
through (c) have been deposited in full, available money in the Collection Fund shall next
be deposited into the Annual Maintenance Subaccount in an amount equal to the amount
set forth in the column titled “Annual Maintenance Subaccount” on Annex I attached
hereto for the next succeeding payment date identified on Annex I, to pay amounts owi ng
with respect to Services performed as described in the Implementation Agreement, plus
any amounts due and unpaid with respect to Services performed pursuant to the
Implementation Agreement. The Paying Agent shall disburse funds in the Annual
Maintenance Subaccount to WRCOG or its subcontractors, if any, as and when due
pursuant to invoices submitted by WRCOG.
(e) Fifth, after all amounts required by the preceding subparagraphs (a)
through (d) have been deposited in full, available money in the Collection Fund shall next
be deposited into the Re-lamping Reserve Subaccount, if required, in an amount equal to
the amount set forth in the column titled “Re-lamping Reserve Subaccount” on Annex I
attached hereto for the next succeeding payment date identified on Annex I, to pay
amounts owing with respect to Re-lamping Services as described in the Implementation
Agreement, plus any amounts due and unpaid with respect to Re-lamping Services
performed pursuant to the Implementation Agreement. The Paying Agent shall disburse
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funds in the Re-lamping Reserve Subaccount to WRCOG or its subcontractors, if any, as
and when due pursuant to invoices submitted by WRCOG.
(f) Sixth, after all amounts required by the preceding subparagraphs (a)
through (e) have been deposited in full, available money in the Collection Fund shall be
disbursed to Lessee.
Notwithstanding anything herein to the contrary, if at any time the amount of Payments
received or held by the Paying Agent in the Collection Fund is less than the amount required to
be deposited and disbursed pursuant to subparagraphs (a) through (e) above (the difference
between the amounts required to be deposited pursuant to subparagraphs (a) through (e) and
amounts in the Collection Fund, a “Shortfall Amount”), then Paying Agent shall deposit and
disburse all Payments and amounts in the Collection Fund solely as required by subparagraph (a)
until all amounts under subparagraph (a) are satisfied in full before disbursing any funds
pursuant to subparagraphs (b) through (f), in such order of priority until all amounts in the
Collection Fund are deposited and disbursed in full. Paying Agent shall notify Lessor, Lessee
and WRCOG in writing upon its actual knowledge of any Shortfall Amount. To the extent
Lessee, Lessor or WRCOG has actual knowledge that any Shortfall Amount will occur prior to
any payment due date, the party with such knowledge sh all give each other party hereto notice as
soon as reasonably practicable, including, if actually known to the Lessee, Lessor or WRCOG,
the amount of such expected Shortfall Amount and the date the Lessee, Lessor or WRCOG
anticipates such Shortfall Amount will occur. No amounts shall be disbursed from the
Collection Fund to any subaccount other than the Rental Payment Subaccount without the prior
written consent of the Lessor if at any time (x) Lessor exercises control over the Rental Payment
Subaccount pursuant to Section 1.8 hereof, (y) Paying Agent receives notice that there is a
deficiency in amounts required to be deposited to the Rental Payment Subaccount and/or (z)
Paying Agent receives notice that an Event of Default or Event of Non -appropriation has
occurred.
Section 1.4. Termination Payments. Upon the occurrence of a Termination Event,
Lessee, Lessor or WRCOG shall advise and provide written notice thereof to the Paying Agent
and each other party. Upon its knowledge of a Termination Event, Lessor shall provide written
instructions to the Paying Agent as to disbursements of all amounts in the Collection Fund, and
upon receipt of any Payment, the Paying Agent shall, within one business day following the
receipt by Paying Agent of any Payment, make such disbursement from the available funds in
the Collection Fund (a) first, to Lessor, the amount of Rental Payments due in accordance with
the Lease and/or Annex I hereto, together with any past due amounts and interest thereon, fees,
costs, expenses and all other amounts due under the Lease or any Related Agreement, and (b)
thereafter in accordance with Section 1.3 hereof.
Section 1.5. Prepayment of Rental Payments. In connection with any prepayment of
Rental Payments required by the Lease or any other Related Agreement, Lessee shall pay such
amounts directly to the Paying Agent and Paying Agent shall, within one business day following
the receipt by Paying Agent of such amounts, make such disbursement from the available funds
in the Collection Fund (a) first, to Lessor the amount of Rental Payments in accordance with the
Lease and/or Annex I hereto, together with all past due amounts and interest thereon, fees, costs,
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expenses and all other amounts due under the Lease or any Related Agreement, (b) next, to
Lessor the amount of Rental Payments and prepayment price due in accordance with the Lease
pursuant to a written instruction signed by Lessee and approved by Lessor, together with any
premium relating thereto and past due amounts and interest thereon, fees, costs, expenses and all
other amounts due under the Lease or any Related Agreement and (c) thereafter, without
duplication, in accordance with clauses (a) through (f) of Section 1.3 hereof.
Section 1.6. Reports to be provided by Paying Agent. On or before the 10th day of each
calendar quarter, or upon request from Lessee, Lessor or WRCOG, the Paying Agent shall send
to Lessee, Lessor and WRCOG, in accordance with the notice provisions hereof, a quarterly
account statement, showing the amount and payor of each payment received, the total amount
received, and the date, amount and payee of each disbursement from the Collection Fund and
each subaccount therein. The Paying Agent shall provide to Lessee, Lessor and WRCOG
promptly upon receipt copies of any communication between it and the other parties.
Section 1.7. Invoices; Transfer of Funds. (a) Lessor shall provide Lessee with invoices
with respect to amounts to be disbursed from the Rental Payment Subaccount. At least fifteen
(15) business days before each applicable payment date, WRCOG shall provide Lessee with
invoices with respect to amounts to be disbursed from the Paying Agent Fee Subaccount, the
Administrative Fee Subaccount, the Annual Maintenance Subaccount and the Re-lamping
Reserve Subaccount. Prior to each Payment Date identified on Annex I attached hereto, Lessee
shall provide the Paying Agent with all invoices (including the invoice provided by Lessor
pursuant to the preceding sentence), to the extent received by Lessee, with respect to amounts to
be disbursed from the Rental Payment Subaccount, the Paying Agent Fee Subaccount, the
Administrative Fee Subaccount, the Annual Maintenance Subaccount and the Re-lamping
Reserve Subaccount.
(b) All amounts payable or deliverable by a party to any other party hereunder shall be
delivered by federal wire transfer of immediately available funds pursuant to the wire
instructions set forth in Exhibit A attached hereto (or to such account at such bank as the party to
whom such funds are delivered shall have designated by an authorized individual to the Paying
Agent in writing at least one business day prior to such wire transfer).
Section 1.8. Control of Collection Fund and Subaccounts. In order to perfect Lessor’s
security interest by means of control in (i) the Collection Fund and the Rental Payment
Subaccount established hereunder (but not the Administrative Fee Subaccount, the Annual
Maintenance Subaccount or the Re-lamping Reserve Subaccount), (ii) all securities entitlements,
investment property and other financial assets now or hereafter credited to the Collection Fund
and the Rental Payment Subaccount (but not the Administrative Fee Subaccount, the Annual
Maintenance Subaccount or the Re-lamping Reserve Subaccount), (iii) all of Lessee’s and
WRCOG’s rights in respect of the Collection Fund and the Rental Payment Subaccount, such
securities entitlements, investment property and other financial assets therein, and (iv) all
products, proceeds and revenues of and from any of the foregoing personal property
(collectively, the “Collateral”), Lessor, Lessee, WRCOG and Paying Agent further agree as
follows:
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(a) All terms used in this Section 1.8 which are defined in the Commercial Code of
the State of California (“Commercial Code”) but are not otherwise defined herein shall have the
meanings assigned to such terms in the Commercial Code, as in effect on the date of this
Agreement. The Lessor, Lessee, WRCOG and Paying Agent acknowledge and agree that the
Collateral and all proceeds thereof are being held by Paying Agent for disbursement or return as
set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the
Collateral, and all proceeds thereof, and all investments made with any amounts in the
Collateral. If the Collateral, or any part thereof, is converted to investments as set forth in this
Agreement, such investments shall be made in the name of Paying Agent and the Paying Agent
hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have
possession of such investments for the purpose of perfecting its security interest.
(b) Paying Agent will comply with all entitlement orders originated by Lessor with
respect to the Collateral, or any portion of the Collateral, without further consent by Lessee.
(c) Provided that account investments shall be held in the name of the Paying Agent,
Paying Agent hereby represents and warrants (a) that the records of Paying Agent show that
Lessee is the sole owner of the Collateral, (b) that Paying Agent has not been served with any
notice of levy or received any notice of any security interest in or other claim to the Collateral, or
any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (c) that
Paying Agent is not presently obligated to accept any entitlement order from any person with
respect to the Collateral, except for entitlement orders that Paying Agent is obligated to accept
from Lessor under this Agreement and entitlement orders that Paying Agent, subject to the
provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Paying Agent will not enter into any
agreement by which Paying Agent agrees to comply with any entitlement order of any person
other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any
portion or all of the Collateral. Paying Agent shall promptly notify Lessor if any person requests
Paying Agent to enter into any such agreement or otherwise asserts or seeks to assert a lien,
encumbrance or adverse claim against any portion or all of the Collateral.
(e) Paying Agent acknowledges that Lessor reserves the right, by delivery of written
notice to Paying Agent, to prohibit Lessee from effecting any withdrawals (including
withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges
of any Collateral held in the Collection Fund and the Rental Payment Subaccount. Further,
Paying Agent hereby agrees to comply with any and all written instructions delivered by Lessor
to Paying Agent (once it has had a reasonable opportunity to comply therewith) regarding the
Collection Fund and the Rental Payment Subaccount established hereunder (but not the
Administrative Fee Subaccount, the Annual Maintenance Subaccount or the Re-laming Reserve
Subaccount except to the extent funds are deposited therein in error or in violation of the terms
of this Agreement) and has no obligation to, and will not, investigate the reason for any action
taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of
Lessor’s claims against or agreements with Lessee, the existence of any defaults under such
agreements, or any other matter. Lessor shall provide Lessee and WRCOG a copy of any such
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written instructions that it provides to Paying Agent at the same time it provides such
instructions to the Paying Agent.
(f) Lessee and WRCOG hereby irrevocably authorize Paying Agent to comply with
all instructions and entitlement orders delivered by Lessor to Paying Agent with respect to the
Collection Fund and the Rental Payment Subaccount established hereunder (but not the
Administrative Fee Subaccount, the Annual Maintenance Subaccount or the Re-lamping Reserve
Subaccount except to the extent funds are deposited therein in error or in violation of the terms
of this Agreement). Lessor shall provide Lessee and WRCOG a copy of any such instructions
and entitlement orders that it provides to Paying Agent at the same time it provides such
instructions to the Paying Agent.
(g) Paying Agent will not attempt to assert control, and does not claim and will not
accept any security or other interest in, any part of the Collateral, and Paying Agent will not
exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise
charge or deduct from the Collateral any amount whatsoever.
(h) Paying Agent and Lessee hereby agree that any property held in the Collection
Fund and the Rental Payment Subaccount shall be treated as a financial asset under such section
of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code,
notwithstanding any contrary provision of any other agreement to which Paying Agent may be a
party.
Section 1.9. Duties and Responsibilities. (a) The Paying Agent is acting solely as an
agent for the Lessee, Lessor and WRCOG hereunder and owes no duties, fiduciary or otherwise,
to any other Person by reason of this Agreement, except as otherwise may be provided under this
Agreement.
(b) The Paying Agent undertakes to exercise such powers and perform such duties and
obligations as are set forth in this Agreement. The Paying Agent shall have no other powers,
duties, or obligations and none shall be implied or inferred from this Agreement or any other
agreement, instrument or document entered into in connection therewith. Without limiting the
generality of the foregoing, the Paying Agent shall be under no obligation with respect to the
application of any moneys distributed hereunder to the Lessee, Lessor and WRCOG or any other
person except as expressly provided herein. Under no circumstances will the Paying Agent be
responsible or liable for the failure of any other party to perform in accordance with this
Agreement.
(c) In the absence of bad faith, the Paying Agent shall be entitled to request and to rely
upon any note, notice, resolution, request, consent, direction, certificate, officer’s certificate,
affidavit, letter, telegram, teletype, message, email, facsimile, statement, order or other
correspondence or document reasonably believed by the Paying Agent to be genuine and correct
and to have been signed or sent by the proper person or persons, without further inquiry into the
person’s or persons’ authority.
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(d) The Paying Agent is not a party to, is not bound by, has no duties or obligations
under or interest in, shall not be bound to ascertain or inquire as to the performance or
observance of, and shall neither be responsible for or chargeable with knowledge of, the Lease or
any other Related Agreement or any other agreement, instrument or document entered into in
connection therewith (except for this Agreement) (each, a “Transaction Document”) or any of
the terms, conditions, covenants or agreements contained in any Transaction Document, or as to
the existence of a default or potential default thereunder, whether or not an original or a copy of
such Transaction Document has been provided to the Paying Agent, and the Paying Agent shall
have no duty to know or to inquire as to the performance or nonperformance of any provision of
any Transaction Document. All references in this Agreement to the Lease, any other Related
Agreement or any other Transaction Document are solely for the reference and convenience of
the parties.
(e) The Paying Agent shall not be responsible for the correctness of the recitals and
statements made in this Agreement or in any of the exhibits schedules, annexes and other
attachments.
(f) The Paying Agent shall not be required to recalculate, certify, or verify any
numerical information unless expressly required under this Agreement. Furthermore, the Paying
Agent’s receipt of reports or other information provided or otherwise publicly available does not
constitute actual or constructive knowledge or notice unless Paying Agent has an obligation to
review its contents under this Agreement.
(g) In the absence of negligence or misconduct in the receipt, handling and
disbursement of funds actually received by it in accordance with the terms hereof on its part, the
Paying Agent shall not be liable for any action taken, suffered or omitted by it in the
performance of its duties under this Agreement. The Paying Agent shall not be liable for any
error of judgment made in good faith unless and to the extent it is negligent in ascertaining the
pertinent facts.
(h) The Paying Agent shall not be liable for any special, indirect, or consequential
damages or losses of any kind whatsoever (including, without limitation, lost profits) including if
the Paying Agent has been advised of the possibility of such damages or losses and regardless of
the form of action.
(i) The provisions of this Section 1.9 shall survive the termination for any reason of
this Agreement, any modification to this Agreement, or the resignation or removal of the Paying
Agent.
Section 1.10. Compensation and Expenses. (a) Lessee shall pay to the Paying Agent an
administration fee equal to $500.00, payable on or about the date of this Agreement and on each
annual anniversary thereof.
(b) To the extent permitted by law and with legally available funds, Lessee shall
indemnify, defend and hold the Paying Agent and its trustees, offi cers, employees, agents and
affiliates (collectively with the Paying Agent, the “Indemnitees”) harmless from and against
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every loss, liability or expense, including without limitation, damages, fines, suits, actions,
demands, costs, out-of-pocket expenses, and reasonable legal fees and expenses (collectively,
“Losses”), that may be imposed on, incurred by, or asserted against, any Indemnitee for or in
respect of its (1) execution and delivery of this Agreement, (2) compliance or attempted
compliance with or reliance upon any instruction or other written direction upon which the
Paying Agent is authorized to rely pursuant to the terms of this Agreement and (3) performance
under this Agreement, except to the extent that the Loss shall have been finally adjudicated by a
court of competent jurisdiction to have directly resulted from such Indemnitee’s gross negligence
or willful misconduct, or ordinary negligence in the receipt, handling and disbursement of funds
actually received by it in accordance with the terms hereof. The provisions of this
Section 1.10(b) shall survive the termination for any reason of this Agreement, any modification
to this Agreement, or the resignation or removal of the Paying Agent.
(c) Unless determined in a court of competent jurisdiction that it engaged in willful
misconduct or acted in bad faith, any action or non-action asserted by Paying Agent to have been
taken by it on the advice of reasonably selected outside counsel shall be presumed not to have
constituted gross negligence, willful misconduct or bad faith. Paying Agent shall not be liable
for any mistake of fact or error in judgment unless such mistake of fact or error in judgment is
determined by a court of competent jurisdiction to have been made in bad faith.
(d) The Paying Agent may perform any of the duties or exercise any of the powers
provided for in this Agreement either directly or through its agents, representatives, attorneys,
paying agents and/or nominees, and the Paying Agent shall not be responsible for any
misconduct or negligence on the part of any such agent, representative, attorney, paying agent or
nominee appointed by it unless determined in a court of competent jurisdiction that Paying Agent
engaged in willful misconduct or acted in bad faith.
(e) The Paying Agent shall not (x) risk or advance its own funds or otherwise incur any
financial liability or potential financial liability, or (y) be required to take any action or to refrain
from taking any action, in either case in the performance of any of its obligations or duties or in
the exercise of any of its rights or powers under this Agreement, whether on its own motion or at
the request of parties hereto or any other person unless (A) in the case of clause (x), such action
shall be acceptable to the Paying Agent, the Lessee and the Lessor in their respective sole and
absolute discretion and (B), in the case of clause (x) and clause (y), the Paying Agent shall first
have been furnished security and indemnity satisfactory to it against any loss, liabili ty, cost,
damage or expense it may incur, including but not limited to its reasonable attorneys ’ fees and
expenses, in connection therewith.
Section 1.11. Resignation and Removal of the Paying Agent; Merger. (a) Lessee and
Lessor, together, shall have the right to terminate this Agreement or remove WRCOG and/or the
Paying Agent and/or to appoint a successor paying agent to serve as Paying Agent under this
Agreement upon thirty days’ (or such shorter period as is practicable under the circumstances, as
determined by Lessee and Lessor in their sole discretion) advance written notice to WRCOG and
the Paying Agent. The Paying Agent or any successor may at any time resign by giving mailed
notice to Lessee, Lessor and WRCOG of its intention to resign and of the proposed date of
resignation, which shall be a date not less than 30 days after such notice is deposited in the
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United States mail with postage fully prepaid, unless an earlier resignation date and the
appointment of a successor shall have been or are approved by Lessee and Lessor, together. If
Lessee and Lessor, together, have not appointed a successor within 30 days of receipt of the
Paying Agent’s notice of resignation, Paying Agent shall (x) remit to the Lessor all funds in the
Rental Payment Subaccount and disburse to Lessor all Payments and all money in the Collection
Fund until Lessor receives funds sufficient to pay all Rental Payments then past due and
owing plus an amount sufficient to pay all Rental Payments then due and owing plus an amount
sufficient pay the sum of the Rental Payment Interest Portion plus the Rental Payment Principal
Portion coming due on the next succeeding Payment Date as reflected on Annex I
hereto, plus any past due amounts and interest thereon, fees, costs, expenses and an y other
amounts due to Lessor under the Lease or any Related Agreement and (y) after all amounts
described in the preceding clause (x) have been paid in full, remit to Lessee all amounts in the
remainder of the subaccounts maintained hereunder, which Lessee shall disburse solely as
required by Section 1.3(a) until all amounts under Section 1.3(a) are satisfied in full before
disbursing any funds pursuant to subparagraphs (b) through (f) of Section 1.3, in such order of
priority until all amounts are disbursed in full. Except as otherwise specifically provided herein,
the Paying Agent may not delegate, transfer or assign any of the rights, duties, powers or
remedies granted to the Paying Agent hereunder without the prior written consent of both
Lessor and Lessee. Upon its resignation or removal hereunder and delivery of funds as set forth
above, the Paying Agent shall be discharged of and from any and all obligations hereunder
arising after resignation or removal and delivery of funds. Following such resignation or
removal and delivery of funds, the Lessee, Lessor and WRCOG agree that if a successor paying
agent has not been appointed and approved by Lessee and Lessor, then Lessor shall hold such
funds as “paying agent” and perform the duties of paying agent in accordance with a separate
written agreement among Lessee, Lessor and WRCOG (if WRCOG is then a party to this
Agreement), until such time as Lessee and Lessor agree upon a successor paying agent to serve
under a paying agent agreement acceptable to the parties.
(b) Any corporation into which the Paying Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation to which the
Paying Agent is a party, or any state or national bank or trust compan y in any manner succeeding
to all or substantially all of the corporate trust business of the Paying Agent, shall automatically
succeed to all of the rights and obligations of the Paying Agent hereunder without further action
on the part of any of the parties hereto. Any such successor Paying Agent shall give written
notice, within 30 days of such merger, consolidation, or other event to the Lessee, Lessor and
WRCOG.
ARTICLE II
MISCELLANEOUS
Section 2.1. Notices. Any and all notices, requests, demands and other communications
given under or in connection with this Agreement shall be effective if in writing and either hand
delivered or mailed by registered or certified mail postage prepaid, or overnight delivery service,
to the addresses as set forth in Exhibit A attached hereto or to such other addresses as are
specified in writing to the other parties hereto.
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Section 2.2. No Waivers. No failure or delay in exercising any right hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights and remedies of the parties
under this Agreement shall be cumulative and not exclusive of any rights or remedies provided
by law.
Section 2.3. Amendments, etc. No amendment, modification, consent or waiver of any
provision of this Agreement (including, but not limited to Annex I attached hereto), and no
consent to any departure by the parties therefrom, shall be effective unless the same shall be in
writing and signed by an officer of the Paying Agent, the Lessee, the Lessor and WRCOG, and
then shall be effective only in the specific instance and for the specific purpose for which given.
Any request for an amendment to Annex I attached hereto b y WRCOG shall be submitted to
Lessor and Lessee for approval and following their approval shall be submitted to Paying Agent
for review and approval and shall also be signed by WRCOG.
Section 2.4. Severability. If any provision contained in this Agreement is held to be
illegal, invalid or unenforceable under present or future laws, such provision shall be fully
severable, and the remaining provisions thereof shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its severance therefrom.
Section 2.5. Successors and Assigns. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective successors and assigns. If
Lessor shall assign or transfer its interest in the Lease and this Agreement, Lessor shall provide
Paying Agent with notice in the form of Exhibit B hereto (or such other form as may be approved
by the Lessor and the Paying Agent) and the Paying Agent shall promptly execute and deliver to
Lessor said Notice to and Acknowledgement by Paying Agent of Assignment within five (5)
business days after its receipt of such Notice.
Section 2.6. Headings. The headings of articles and sections hereof are inserted for
convenience only and shall in no way define or limit the scope or intent of any provision of this
Agreement.
Section 2.7. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California. The parties hereto consent to jurisdiction in
the State of California and venue in any state or Federal court located in the County of Riverside,
California.
Section 2.8. Counterparts; Effectiveness. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be deemed an
original, with the same effect as if the signatures thereto and hereto were upon the same
instrument, and in making proof of this Agreement it shall not be necessary to produce or
account for more than one such counterpart. This Agreement may be authenticated by manual
signature, facsimile or electronic means, all of which shall be equally valid.
Section 2.9. USA PATRIOT ACT. The parties acknowledge that in order to help the
United States government fight the funding of terrorism and money laundering activities,
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pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the
USA PATRIOT ACT), all financial institutions are required to obtain, verify, record and update
information that identifies each person establishing a relationship or opening an account. The
parties to this Agreement agree that they will provide to the Paying Agent such inform ation as it
may request, from time to time, in order for the Paying Agent to satisfy the requirements of the
USA PATRIOT Act, including but not limited to the name, physical address, tax identification
number and other information that will allow it to identify the individual or entity who is
establishing the relationship or opening the account and may also ask for formation documents
such as articles of incorporation or other identifying documents to be provided.
Section 2.10. Waiver of Trial by Jury; Judicial Reference. EACH PARTY HEREBY WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LITIGATION IN ANY COURT
WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
OTHER TRANSACTION DOCUMENTS OR THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION
OR ENFORCEMENT HEREOF OR THEREOF. EACH PARTY AGREES THAT THIS SECTION 2.10 IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND EACH OF THE OTHER TRANSACTION
DOCUMENTS AND ACKNOWLEDGES THAT THE OTHER PARTIES WOULD NOT HAVE ENTERED INTO
THIS AGREEMENT AND CONSUMMATED THE TRANSACTIONS CONTEMPLATED HEREBY IF THIS
SECTION 2.10 WERE NOT PART OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS.
IF ANY ACTION OR PROCEEDING IS FILED IN A COURT OF THE STATE OF CALIFORNIA BY OR AGAINST
ANY PARTY HERETO IN CONNECTION WITH ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY OTHER RELATED AGREEMENT, (A) THE COURT SHALL, AND IS HEREBY
DIRECTED TO, MAKE A GENERAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL
PROCEDURE SECTION 638 TO A REFEREE (WHO SHALL BE A SINGLE ACTIVE OR RETIRED JUDGE) TO
HEAR AND DETERMINE ALL OF THE ISSUES IN SUCH ACTION OR PROCEEDING (WHETHER OF FACT OR
OF LAW) AND TO REPORT A STATEMENT OF DECISION, PROVIDED THAT AT THE OPTION OF ANY
PARTY TO SUCH PROCEEDING, ANY SUCH ISSUES PERTAINING TO A “PROVISIONAL REMEDY” AS
DEFINED IN CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1281.8 SHALL BE HEARD AND
DETERMINED BY THE COURT, AND (B) THE LESSEE SHALL BE SOLELY RESPONSIBLE TO PAY ALL FEES
AND EXPENSES OF ANY REFEREE APPOINTED IN SUCH ACTION OR PROCEEDING FROM LEGALLY
AVAILABLE FUNDS.
Section 2.11. Tax Withholding and Reporting. For certain payments made pursuant to
this Agreement, the Paying Agent may be required to make a “reportable payment” or
“withholdable payment” and in such cases the Paying Agent shall have the duty to act as a payor
or withholding agent, respectively, that is responsible for any tax withholding and reporting
required under Chapters 3, 4, and 61 of the United States Internal Revenue Code of 1986, as
amended (the “Code”). The Paying Agent shall have the sole right to make the determination as
to which payments are “reportable payments” or “withholdable payments.” All parties to this
Agreement shall provide an executed IRS Form W-9 or appropriate IRS Form W-8 (or, in each
case, any successor form) to the Paying Agent prior to closing, and shall promptly update any
such form to the extent such form becomes obsolete or inaccurate in any respect. The Paying
Agent shall have the right to request from any party to this Agreement, or any other Person
entitled to payment hereunder, any additional forms, documentation or other information as may
be reasonably necessary for the Paying Agent to satisfy its reporting and withholding obligations
under the Code. To the extent any such forms to be delivered under this Section 2.11 are not
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provided prior to or by the time the related payment is required to be made or are determined by
the Paying Agent to be incomplete and/or inaccurate in any respect, the Paying Agent shall be
entitled to withhold on any such payments hereunder to the extent withholding is required under
Chapters 3, 4, or 61 of the Code, and shall have no obligation to gross up any such payment.
Section 2.12. Disagreements. If any conflict, disagreement or dispute arises between,
among, or involving any of the parties hereto concerning the disbursement of funds hereunder, or
if the Paying Agent is in doubt as to the action to be taken or omitted with respect to the
disbursement of funds, the Paying Agent may, at its option, retain in its possession Payments
(and, in connection therewith, may file an interpleader action in any court of competent
jurisdiction), until the Paying Agent (i) receives a final, non-appealable order of a court of
competent jurisdiction or a final, non-appealable arbitration decision directing delivery of such
Payments, or (ii) receives a written agreement executed by each of the parties involved in such
disagreement or dispute directing delivery of the Payments, in which event the Paying Agent
shall be authorized to disburse such Payments and Termination Amount in accordance with such
agreement. The Paying Agent shall be entitled to recover from the Lessee, the Lessor and
WRCOG all reasonable attorneys’ fees, expenses and other costs incurred in connection
therewith. The Paying Agent shall be entitled to act on any such agreement or court order
without further question, inquiry or consent.
Section 2.13. Attachment of Payments; Compliance with Legal Orders. If any Payments
shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be
stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or
entered by any court order affecting any of the Payments, the Paying Agent is hereby expressly
authorized, in its sole discretion, to respond as it deems appropriate or to comply with all writs,
orders or decrees so entered or issued, or which it is advised by legal counsel of its own choosing
is binding upon it, whether with or without jurisdiction. If the Paying Agent obeys or complies
with any such writ, order or decree, it shall not be liable to any of the other parties hereto or to
any other person or entity if, by reason of such compliance notwithstanding, such writ, order or
decree is subsequently reversed, modified, annulled, set aside or vacated. Notwithstanding the
foregoing, unless otherwise expressly prohibited by the applicable attachment, garnishment, levy
or order, judgment or decree under this Section (each, an “Order”), Paying Agent shall give the
other parties to this Agreement prompt notice of its receipt of the order, and (except to the extent
reasonably required to assure Paying Agent’s ability to comply with the Order within the
required time if it remains in effect) not comply with the Order until the applicable party has had
an opportunity to challenge it.
Section 2.14. Force Majeure. The Paying Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations (a “Force Majeure Delay”) under this
Agreement arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation acts of God; earthquakes; fire; flood; wars; acts
of terrorism; civil or military disturbances; sabotage; epidemic; riots; interruptions, loss or
malfunctions of utilities, computer (hardware or software) or communications services;
accidents; labor disputes; or acts of civil or military authority or governmental action, it being
understood that the Paying Agent shall use commercially reasonable efforts which are consistent
with accepted practices in the banking industry to resume performance as soon as reasonably
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practicable under the circumstances. In the event of a Force Majeure Delay, the Paying Agent
shall notify Lessee, Lessor and WRCOG in writing within five business days after (i) the
occurrence of such Force Majeure Delay, (ii) the Paying Agent’s actual knowledge of the
impending Force Majeure Delay, or (iii) the Paying Agent’s knowledge of sufficient facts under
which a reasonable person would conclude such Force Majeure Delay will occur.
Section 2.15. Amendment and Restatement. This Agreement shall become effective on
the Commencement Date and shall supersede, amend and restate all provisions of the Original
Agreement as of such date. From and after the Commencement Date, all references made to the
Original Agreement in any instrument or document shall, without more, be deemed to refer to
this Agreement. Without limiting the foregoing, the parties to this Agreement hereby
acknowledge and agree that the “Agreement” referred to in the Original Agreement shall from
and after the date hereof be deemed to refer to this Agreement.
[SIGNATURE PAGE FOLLOWS]
[Signature Page to Amended and Restated Paying Agent Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
by their respective authorized officers as of the date first above written.
PAYING AGENT:
WILMINGTON TRUST, NATIONAL ASSOCIATION
By: ____________________________________
Name:
Title:
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Attn: David McGuire
LESSEE:
CITY OF LAKE ELSINORE, CALIFORNIA
By: ____________________________________
Name:
Title:
130 South Main Street
Lake Elsinore, CA 92530
Attn: Jason Simpson
Phone: (951) 674-3124 (ext. 362)
E-mail: jsimpson@Lake-Elsinore.org
[Signature Page to Amended and Restated Paying Agent Agreement]
LESSOR:
BANC OF AMERICA LEASING & CAPITAL, LLC
By: ____________________________________
Name:
Title:
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Facsimile: (443) 556-6977
Attn: Contract Administration
WRCOG:
WESTERN RIVERSIDE COUNCIL OF
GOVERNMENTS
By: ____________________________________
Name:
Title:
3390 University Avenue, Suite 450
Riverside, CA 92501-3315
Attn: Tyler Masters
Phone: (951) 405-6732
ANNEX I
EXHIBIT A
NOTICE & WIRE
INSTRUCTIONS
If to the Lessor:
Address for Notices:
Banc of America Leasing & Capital, LLC
11333 McCormick Road, Hunt Valley II, M/C MD5-032-07-05,
Hunt Valley, Maryland 21031
Attention: Terri Preston
Telephone: (443) 541-3642
Facsimile: (804) 553-8124
Email: terri.preston@baml.com
Payment Account:
Bank Name: Bank of America
ABA/Routing #: 026009593
Beneficiary Name: Banc of America Leasing & Capital, LLC
Account #:12334-01992
Ref: City of Lake Elsinore
If to WRCOG:
Address for Notices:
Western Riverside Council of Governments
Western Riverside Council of Governments
3390 University Avenue, Suite 450
Riverside, CA 92501-3315
Telephone: (951) 405-6732
Attention: Tyler Masters
Reference: WRCOG Regional Streetlight Program – City of Lake Elsinore
Payment Office:
Receiving Bank: Citizen’s Business Bank
Routing/ABA #: 122234149
Account #: 245123353
Bank Address: 301 E. Vanderbilt Way
San Bernardino, CA 92408
Reference: «LesseeName»
Attention: WRCOG Operating Account
A-2
If to the Lessee:
Address for Notices:
City of Lake Elsinore
130 South Main Street
Lake Elsinore, CA 92530
Telephone: (951) 674-3124 (ext. 362)
E-mail: jsimpson@Lake-Elsinore.org
Attention: Jason Simpson
Reference: City of Lake Elsinore Lease Purchase
Payment Office:
Receiving Bank: MUFG Union Bank
Routing/ABA #: 122000496
Account #: 2740026839
Bank Address: 1980 Saturn St., Monterey Park, CA 91755
Reference: City of Lake Elsinore
Attention: Government Services Division
If to the Paying Agent:
Address for Notices:
Wilmington Trust, National Association
650 Town Center Drive, Suite 800
Costa Mesa, CA 92626
Telephone: (714) 384-4179
Facsimile: (714) 384-4151
Attention: David McGuire
Reference: City of Lake Elsinore
EXHIBIT B
FORM OF NOTICE TO AND ACKNOWLEDGEMENT BY PAYING AGENT OF ASSIGNMENT
[_________], 20__
Wilmington Trust, National Association (the “Paying Agent”)
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Attn: Aimee Tabor
Phone: (714) 384-4177
Fax: (714) 384-4151
Email: atabor2@WilmingtonTrust.com
Reference is hereby made to that certain [DESCRIBE ASSIGNMENT DOCUMENTS],
dated as of [_______], by and between [BANC OF AMERICA LEASING & CAPITAL, LLC]
(“Assignor”), and [________] (“Assignee”).
1. Assignor hereby gives the Paying Agent notice and the Paying Agent hereby
acknowledges receipt of notice, that effective as of [_________, 20__] (the “Effective Date”),
pursuant to Section 11.01 of the hereinafter defined ELPA, Assignor has assigned to Assignee,
whose offices are at [_________________], all rights, title, interests, obligations and liabilities of
Assignor accruing on or after the Effective Date in, under and to: (i) the Amended and Restated
Equipment Lease/Purchase Agreement dated as of August 17, 2021 (the “ELPA”), between
Assignor, as lessor (the “Lessor”), and the City of Lake Elsinore, California, as lessee (the
“Lessee”), including the right to receive any and all sums payable pursuant to, or recoverable in
connection with, such ELPA, including, but not limited to: (A) all “Rental Payments” (as such
term is defined in such ELPA) payable on or after the date of execution hereof, (B) all monies
due or to become due under such ELPA; and (C) all monies payable or recoverable following a
default by Lessee; (ii) that certain Amended and Restated Paying Agent Agreement dated as of
August 17, 2021 (the “Paying Agent Agreement”), among Lessee, Lessor, the Western Riverside
Council of Governments, and the Paying Agent; and (iii) all of Assignor’s other rights and
remedies under the documents described in clauses (i) and (ii) above; and that Assignee has
accepted and has assumed the Assignor’s rights, title, interests, obligations and liabilities with
respect thereto.
2. The Paying Agent hereby acknowledge the assignment and assumption described
above and agree that, from and after the Effective Date, the Assignee shall be t he “Lessor” under
the ELPA and the Paying Agent Agreement and shall be entitled to exercise all rights and
remedies of the Lessor under the ELPA and the Paying Agent Agreement.
B-4
3. All payments to be made to the Assignee, as Lessor, shall be disbursed to the
following account of the Assignee:
If by Wire:
Account Name:
Account Number:
ABA Number:
Bank Address:
If by ACH:
Account Name:
Account Number:
ABA Number:
Bank Address:
[Signature pages follow]
[Signature Page to Notice to and Acknowledgement by Paying Agent of Assignment]
[BANC OF AMERICA LEASING & CAPITAL,
LLC], as Assignor
By: ____________________________________
Name: _______________________________
Title: ________________________________
Accepted and agreed to on __________, 20__.
WILMINGTON TRUST, NATIONAL ASSOCIATION
By: ____________________________________
Name: ______________________________
Title: _______________________________