|
(3) REPRESENTATIONS AND COVENANTS OF LESSEE. Lessee represents, covenants and warrants to Lessor as follows:(a)
<br />Lessee is a state or political subdivision thereof within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended,
<br />(the "Code") and will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as such. (b)
<br />Lessee is authorized under the Constitution and laws of the state of CA to enter into this Agreement and the transactions contemplated
<br />hereby and to perform all of its obligations hereunder. (c) Lessee's name as indicated in the opening paragraph and on the signature page of
<br />this Agreement is its true, correct, and complete legal name. (d) As evidenced by an attachment hereto, the execution and delivery of this
<br />Agreement by or on behalf of Lessee has been duly authorized by all necessary action of the governing body of Lessee, and Lessee has
<br />obtained such other approvals and consents as are necessary to consummate this Agreement. Lessee further represents, covenants and
<br />warrants that all requirements have been met, and procedures have occurred, necessary to ensure the enforceability of this Agreement
<br />against Lessee, and that Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the
<br />acquisition of the Equipment by Lessee hereunder. (e) Lessee shall cause to be executed and attached hereto an incumbency certificate and
<br />an opinion of its counsel in fonn and substance satisfactory to Lessor. (f) Lessee has determined that a present need exists for the
<br />Equipment which need is not temporary or expected to diminish in the near future. The Equipment is essential to and will be used by
<br />Lessee only for the purpose of performing one or more governmental functions of Lessee consistent with the permissible scope of Lessee's
<br />authority and will not be used in a trade or business of any person or entity. Lessee shall cause to be executed and attached hereto an
<br />Essential Use of Equipment Letter in form and substance satisfactory to Lessor. (g) Within one hundred fifty (150) days of the end of each
<br />fiscal year of Lessee during the term hereof, Lessee shall provide Lessor with a copy of its audited financial statements for such fiscal year.
<br />Additionally, Lessee shall provide Lessor with budgets, proof of appropriation for the ensuing fiscal year and such other financial
<br />information relating to the ability of Lessee to continue this Agreement as may reasonably be requested by Lessor. (h) The Equipment is,
<br />and shall remain during the period this Agreement is in force, personal property and when subject to use by Lessee under this Agreement
<br />will not be or become fixtures. (i) Lessee acknowledges that Lessor is acting only as a financing source with respect to the Equipment,
<br />which has been selected by Lessee. (j) Lessee will promptly and duly execute and deliver to Lessor such further documents, instruments
<br />and assurances and take such further action as Lessor may from time to time reasonably request in order to carry out the intent and purpose
<br />of this Agreement and to establish and protect the rights and remedies created or intended to be created in favor of Lessor hereunder.
<br />(4) TITLE TO EQUIPMENT; SECURITY INTEREST. (a) Title to the Equipment. During the term of this Agreement, title to the
<br />Equipment shall vest in Lessee, subject to the rights of Lessor under this Agreement. In the event of a default as set forth in Section 13
<br />hereof or nonappropriation as set forth in Section 1(e) hereof, title shall immediately vest in Lessor. (b) Security Interest. To secure the
<br />prompt payment and performance as and when due of all of Lessee's obligations under this Agreement, Lessee hereby grants to Lessor a
<br />first priority security interest in the Equipment, all replacements, substitutions, accessions and proceeds (cash and non -cash), including the
<br />proceeds of all insurance policies, thereof. Lessee agrees that with respect to the Equipment Lessor shall have all of the rights and
<br />remedies of a secured party under the Uniform Commercial Code as in effect in CA. Lessee may not dispose of any item of the Equipment
<br />without the prior written consent of Lessor, notwithstanding the fact that proceeds constitute a part of the Equipment.
<br />(5) USE AND MAINTENANCE. (a) Use. Lessee shall use the Equipment solely for the purpose of performing one or more
<br />governmental functions of Lessee and in a careful, proper and lawful manner consistent with the requirements of all applicable insurance
<br />policies relating to the Equipment. Lessee will not change the location of any items of the Equipment as specified in the applicable
<br />Certificate of Acceptance without the prior written consent of Lessor, which consent shall not be unreasonably withheld. Lessee shall not
<br />attach or incorporate the Equipment to or in any other item of equipment in such a manner that the Equipment becomes or may be deemed
<br />to have become an accession to or a part of such other item of equipment. (b) Maintenance. Lessee, at its own expense, will keep and
<br />maintain, or cause to be kept and maintained, the Equipment in as good operating condition as when delivered to Lessee hereunder,
<br />ordinary wear and tear resulting from proper use thereof alone excepted, and will provide all maintenance and service and make all repairs
<br />reasonably necessary for such purpose. All replacement parts and accessions shall be free and clear of all liens, encumbrances or rights of
<br />others and have a value and utility at least equal to the parts or accessions replaced. Lessee shall not make any material alterations to the
<br />Equipment without the prior written consent of Lessor, which consent shall not be unreasonably withheld. All additions to the Equipment
<br />which are essential to its operation, or which cannot be detached without materially interfering with such operation or adversely affecting
<br />the Equipment's value and utility, shall immediately be deemed incorporated in the Equipment and subject to the terms of this Agreement
<br />as if originally leased hereunder, and subject to the security interest of Lessor. Upon reasonable advance notice, Lessor shall have the right
<br />to inspect the Equipment and all maintenance records with respect thereto, if any, at any reasonable time during normal business hours.
<br />Additional Provisions for Vehicles. As to any Equipment leased hereunder that constitutes motor vehicles ("Vehicles"), you further
<br />covenant and agree as follows:
<br />(a) You shall, at your own expense, obtain in our name all registration plates and other plates, permits inspections or licenses
<br />required to be obtained in connection with the Vehicles, or related to their operation and use except for the initial registration plates which we
<br />obtain at your expense. We shall issue to you, for such purpose, appropriate limited powers of attorney or such other authority as may be
<br />necessary. You shall not, without our prior written consent, permit any Vehicle to be located in a state other than the state in which such
<br />Vehicle is then titled for any continuous period of time that would subject such Vehicle to the titling or registration laws of such other state.
<br />
|