Staff ReportPREPARED BY: MATT MORLEY
DIRECTOR OF PARKS AND PUBLIC WORKS
Reviewed by: Assistant Town Manager Town Attorney Finance
S:\COUNCIL REPORTS\2016\06-21-16\Electric Vehicles\Staff Report - Electric Vehicles FINAL.docx 6/16/2016 10:23 AM MM
MEETING DATE: 06/21/16
ITEM NO: 9
COUNCIL AGENDA REPORT
DATE: JUNE 13, 2016
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A SUMMARY VEHICLE
QUOTATION TO EXTEND THE COMMERCIAL MOTOR VEHICLE MASTER
LEASE AGREEMENT WITH MIKE ALBERT, LTD. IN AN AMOUNT NOT TO
EXCEED $16,600 FOR A 24-MONTH LEASE EXTENSION FOR FOUR ELECTRIC
VEHICLES, FOR A TOTAL LEASE AMOUNT NOT TO EXCEED $51,240
RECOMMENDATION:
Authorize the Town Manager to execute a Summary Vehicle Quotation (Attachment 1) to extend the
Commercial Motor Vehicle Master Lease Agreement (Attachment 2) with Mike Albert, Ltd. in an
amount not to exceed $16,600 for a 24-month lease extension for four electric vehicles (EVs), for a total
lease amount not to exceed $51,240.
BACKGROUND:
On June 27, 2013, a press conference was held at San Jose City Hall with Mitsubishi Motors and
representatives from the City of San Jose and other Bay Area leaders to announce the deployment of 50
Mitsubishi all-electric vehicles to four Bay Area local government fleets (San Jose, Los Gatos, Campbell
and Mill Valley) representing the largest single municipal fleet deployment of light-duty EVs in the
nation to date.
The vehicles were secured under individual lease agreements with participating agencies through Mike
Albert, Ltd., a multi-partner collaboration with Mitsubishi Motors of North America. The concept of
leasing program was to remove the upfront cost barrier of traditional vehicle procurement. The Town of
Los Gatos participated in the initiative by adding five electric vehicles to the fleet as a measure to lower
the Town’s overall carbon footprint in alignment with the Town’s Sustainability Plan.
PAGE 2
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A SUMMARY VEHICLE
QUOTATION TO EXTEND THE COMMERCIAL MOTOR VEHICLE MASTER
LEASE AGREEMENT WITH MIKE ALBERT, LTD. IN AN AMOUNT NOT TO
EXCEED $16,600 FOR A 24-MONTH LEASE EXTENSION FOR FOUR ELECTRIC
VEHICLES, FOR A TOTAL LEASE AMOUNT NOT TO EXCEED $51,240
JUNE 13, 2016
BACKGROUND (cont’d):
In addition to the EVs being 40 percent less expensive to operate than gasoline vehicles, they are
projected to reduce greenhouse gas emissions over a three year period by a total of 20,000 pounds of
carbon dioxide.
Funding for the project was supported by rebates from the Metropolitan Transportation Commission
(MTC), along with rebates for EVs from the federal government. A Lease Agreement was executed in
April of 2013 to lease the five electric vehicles for a 36-month period, effective May 2013, and the
Town has paid approximately $34,640 over the term of the agreement.
DISCUSSION:
As part of the Town’s Operating Budget, staff reviews annual usage of vehicles and equipment assets to
determine which assets should be replaced by evaluating predetermined age and/or mileage criteria. The
five electric vehicles were assigned to Civic Center, Police, and Public Works Operations as pool
vehicles.
The Lease Agreement expired April 30, 2016 and staff reviewed mileage of all five vehicles and
determined the one vehicle assigned to the Civic Center was underutilized traveling less than 3,000 per
year. A reduced monthly rate has been negotiated for the four remaining vehicles for an additional 24-
month period, effective May 1, 2016 through April 30, 2018. The cost per vehicle is $173 per month
totaling $691 per month for four vehicles, for a total amount of $16,600 for the 24-month term of the
lease.
CONCLUSION:
Staff recommends that the Town Council authorize the Town Manager to execute a Summary Vehicle
Quotation to extend the Commercial Motor Vehicle Master Lease Agreement with Mike Albert, Ltd. in
an amount not to exceed $16,600 for a 24-month lease extension for four electric vehicles (EVs), for a
total lease amount not to exceed $51,240.
COORDINATION:
This report has been coordinated with the Town Attorney and the Police Department.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
PAGE 3
MAYOR AND TOWN COUNCIL
SUBJECT: AUTHORIZE THE TOWN MANAGER TO EXECUTE A SUMMARY VEHICLE
QUOTATION TO EXTEND THE COMMERCIAL MOTOR VEHICLE MASTER
LEASE AGREEMENT WITH MIKE ALBERT, LTD. IN AN AMOUNT NOT TO
EXCEED $16,600 FOR A 24-MONTH LEASE EXTENSION FOR FOUR ELECTRIC
VEHICLES, FOR A TOTAL LEASE AMOUNT NOT TO EXCEED $51,240
JUNE 13, 2016
FISCAL IMPACT:
Funds for the services for FY 2016/17 have been adopted in the FY 2016/17 Parks and Public Works
Operating Budget and Police Department Operating Budget. Execution of any options to continue the
service in subsequent years will be contingent upon staff evaluation of the quality of the services
provided, as well as the Town Council’s appropriation of funding.
Attachments:
1. Summary Vehicle Quotation to extend the Commercial Motor Vehicle Master Lease Agreement
2. Commercial Motor Vehicle Master Lease Agreement
Mike Albert, Ltd °ESL_,_, --____-
CtEAutomobileandTruckLeasingandRentalNationwiden-
COMMERCIAL MOTOR VEHICLE MASTER LEASE AGREEMENT
CLOSED -END)
This MASTER VEHICLE LEASE AGREEMENT #105638 (as amended, modified or supplemented from time to time,
this "Agreement ") made as of January 16, 2013 (the "Effective Date "), between Mike Albert, Ltd, a Delaware statutory trust (the
Lessor "), with offices at 10340 Evendale Drive, Cincinnati, Ohio 45241, and the undersigned (the "Lessee "). If more than one
party executes this Agreement as Lessee, each shall bejointly and severally liable hereunder.
1. LEASE TERMS
A. Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor certain motor vehicles for use in its
business (together with its equipment, parts, replacements, additions, accessories, repairs and accessions,
each, a "Vehicle" and all such motor vehicles subject to this Agreement, the "Vehicles ") in accordance with
the terms and conditions of this Agreement. Lessor and Lessee expressly understand and agree that this
Agreement is a lease only and that Lessee acquires no right, title or interest in or to any Vehicle except as a
Lessee. Lessee agrees that it shall, at its expense, protect and defend the title of Lessor in the Vehicles
against creditors of or claiming through Lessee. This Agreement is both a true lease and a statutory "finance
lease" (as defined in Ohio Revised Code, Title XIII Commercial Transactions, Section 1310.01). If, despite
the intention of the parties that this Agreement be a lease, a judicial determination is made that the
transactions contemplated hereunder constitute a loan by Lessor to Lessee, then Lessee shall be deemed to
have granted (and Lessee hereby grants) Lessor a security interest in the Vehicles and all proceeds,
accessions, documents, instruments, accounts, chattel paper, equipment and general intangibles related
thereto to secure all obligations of Lessee to Lessor under this Agreement. Lessee hereby authorizes Lessor
to file, at the expense of the Lessee, any financing or continuation statements related to the foregoing. Lessee
shall place such tags or registration on any Vehicle leased hereunder as Lessor may request which indicates
the ownership interest of the Lessor in such Vehicle, and Lessee acknowledges and agrees that Lessor will be
listed as owner and /or lienholder on the certificate of title for each Vehicle.
B. From time to time, Lessee may request that Lessor provide a written proposal in the form attached as Exhibit
I hereto (a "Vehicle Quotation" or "YQ") with respect to a proposed new Vehicle or group of Vehicles to be
leased hereunder. Each VQ shall specify, to the extent applicable, the lease term, programs, financing and
servicing procedures and characteristics, year, make and model, equipment, accessories and other details with
respect to such Vehicle(s). Lessee shall order Vehicles for lease by placing a Valid Order with respect to
each Vehicle (as defined in Section 10.I. below) (each, a "Vehicle Lease Order" or WILD" ) on a Vehicle
lease order form in a form approved by Lessor; provided, that such VLO shall become noncancelable as of
the date Lessor has placed a noncancelable order with a manufacturer or dealer with respect to such Vehicle;
provided further, that if Lessee fails to use an approved lease order form, Lessee is responsible for any and all
errors or omissions caused by the failure to use a form approved by Lessor. If Lessee cancels a VLO after
such VLO becomes noncancelable in accordance with the foregoing sentence, then Lessee shall reimburse
Lessor for any loss incurred by Lessor as a result of such cancellation (including all costs and expenses) and
shall pay Lessor's then current cancellation fee with respect to such cancellation. Each VLO will incorporate
explicitly or by reference) the information set forth in the related VQ and will also specify the order date,
requested delivery date, color choice, driver information and location in which the applicable Vehicle will be
garaged. Lessor may, in its sole discretion, elect to accept or reject any VLO or all VLOs. In the event that
Lessor elects to reject any VLO delivered by Lessee, Lessor will use reasonable efforts to notify Lessee of
such rejection.
C. Notwithstanding anything in this Agreement to the contrary, Lessor shall not be required to deliver to Lessee
any Vehicle related to a VLO accepted by Lessor (and Lessor shall not be in breach of this Agreement for not
delivering such Vehicle) unless all of the following conditions shall be satisfied (as determined in the
reasonable discretion of Lessor): (1) no material adverse change in the financial condition of Lessee shall
have occurred; (2) no suits or proceedings shall have been filed or instituted (or, to the knowledge of Lessee,
threatened) against or affecting Lessee which, if adversely determined, would have a material adverse effect
on the business or financial condition of Lessee; (3) Lessee shall have provided Lessor with all writings or
documentation that Lessor deems necessary or desirable to assist Lessor in evaluating Lessee's
Lessee Initials 444 Lessor Initials
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creditworthiness or to otherwise accomplish the purpose of this Agreement; (4) no party executing this
Agreement as Lessee shall have denied or revoked its obligations hereunder; and (5) no event shall have
occurred or be continuing which, with notice or lapse of time or both, would constitute an "event of default"
by Lessee under this Agreement or under any other agreement between Lessee and Lessor or its affiliate.
D. By placing a VLO, Lessee creates an obligation to accept delivery of the Vehicle(s) described therein at the
location specified in such VLO, and Lessee hereby agrees to accept the related Vehicle(s) for lease. At the
request of Lessee, delivery of a Vehicle may be to a location other than the location specified in the
applicable VLO; provided, that Lessee shall pay the additional costs related to delivery to such alternate
location. Upon delivery of each Vehicle, Lessor shall provide to Lessee a schedule in the form attached as
Exhibit 3 hereto (each, a "Schedule A ") identifying the Vehicle, setting forth the monthly rental payments
with respect thereto, the in- service date and other appropriate information related to the lease. Upon delivery
of a Vehicle to or at the direction of the Lessee and upon the request of the Lessor, the Lessee (or its
designee, including any designated driver) shall execute and deliver a "receipt of delivery" in a form provided
by Lessor. (However, Lessor is not required to obtain an executed "receipt of delivery" indicating acceptance
of such Vehicle in order to establish delivery and acceptance of a Vehicle). By accepting delivery of a
Vehicle, Lessee acknowledges that such Vehicle is in good repair and satisfactory condition, and that
Lessee accepts such Vehicle in the condition received.
E. Each VLO and related Schedule A together shall be deemed to be a separate lease agreement with respect to
the Vehicle described therein and each VLO and related Schedule A shall be deemed to incorporate by
reference the terms of this Agreement and the related VQ. The invalidity, fulfillment, waiver, termination or
other disposition of any rights or obligations of either Lessee or Lessor (or both) in connection with any VLO
and related Schedule A shall not affect the rights or obligations of Lessee or Lessor arising under any other
VLO and related Schedule A except to the extent set forth in Section 7, Any Schedule A delivered by Lessor
to Lessee shall be binding upon Lessor and Lessee from the earlier of acceptance of the Vehicle by Lessee or
the date the Schedule A was received by Lessee, subject to Lessee's and Lessor's rights to correct any errors
therein.
Except as set forth in the next sentence, Lessor is not responsible for any delay in the delivery of any Vehicle
to Lessee and Lessee has no right to revoke a VLO or attempt to terminate this Agreement or any Schedule A
because of any such delay. Notwithstanding the foregoing, if Lessor is grossly negligent and such negligence
causes a material delay in the delivery of any Vehicle to Lessee, then Lessee may revoke the VLO related to
such Vehicle (it being agreed that Lessee may not revoke the VLO related to any other Vehicle or terminate
this Agreement or any Schedule A because of any such delay). By accepting delivery of a Vehicle, Lessee
acknowledges that such Vehicle was delivered to Lessee in accordance with this Agreement. If Lessee has
delivered a VLO but refuses to accept the related Vehicle for delivery, then Lessee shall reimburse Lessor for
any loss incurred by Lessor as a result of Lessee's failure to accept delivery of such Vehicle (including all
costs and expenses) and shall pay Lessor's then current cancellation fee with respect to such failure to accept
delivery.
G. The lease term for each Vehicle will be specified in the applicable Schedule A. Lessee's minimum
noncancelable lease term for each Vehicle (including any damaged Vehicle deemed a total loss or any lost or
stolen Vehicle) shall be calculated in accordance with clause iv of Section 7.C. Lessee may request an
extension of the lease term and Lessor may grant such request in its sole discretion upon the terms and
conditions specified by the Lessor. The terms and conditions of this Agreement shall continue in full force
and effect and shall be binding upon the Lessee until the later of (a) the surrender of all Vehicles to Lessor or
its designee and (b) the fulfillment by Lessee of all of its obligations under this Agreement.
H. Lessee represents, warrants, and covenants to Lessor on the date hereof and as of the date of each Schedule A
that (1) Lessee has full power and authority to execute, deliver and perform as Lessee the terns and
provisions of this Agreement in compliance with all applicable laws, judgments and orders binding upon
Lessee or its properties and (2) there are no pending or threatened investigations, actions or proceedings
before any court or administrative agency which, if adversely determined, would materially affect the rights
of the Lessor under this Agreement or with respect to the Vehicles.
2. RENTAL CHARGES; PAYMENT TERMS
A. Lessee agrees to pay to Lessor at its office in Cincinnati, Ohio (or other designated location as provided in
writing), the monthly rental for the use and operation of each Vehicle leased hereunder at the monthly rent
specified on Schedule A for such Vehicle, together with all additional charges provided for in this
Agreement. ALL RENT AND ADDITIONAL CHARGES SHALL BE PAID WHEN DUE WITHOUT
ABATEMENT, OFFSET OR COUNTERCLAIM ARISING OUT OF ANY CIRCUMSTANCES
WHATSOEVER.
Page 2 e lessee Initials 01.1 Lessor Initials
B. The monthly rental payment for a leased Vehicle is based on the cost of such Vehicle and interest rates in
effect at the time the Vehicle is placed in service, as described in more detail on the VQ. Rental payment
obligations shall begin on the first day of the calendar month following delivery. Rental payments are due
monthly in advance. Lessee agrees that, from the time of delivery of the Vehicle to Lessee to the time when
such rental charges are payable, Lessee will pay interim rental promptly when invoiced by Lessor in an
amount equal to the monthly rental charge pro -rated on a daily basis based on the actual number of days in
the month. Rental payment obligations end on the last day of the month prior to the surrender date. Lessee
agrees to pay interim rent for the month of surrender until the date of surrender in an amount equal to the
monthly rental charge pro -rated on a daily basis based on the actual number of days in the month. For the
avoidance of doubt, a Vehicle shall be deemed to be delivered for purposes of calculating rent and the
commencement of the lease term hereunder on the earlier to occur of (a) the day on which such Vehicle is
delivered to Lessee's driver, employee or agent at the location listed on the VLO (or at a location which may
be otherwise mutually agreed upon) or (b) forty-eight (48) hours after the time Lessor or its delivering agent
notifies Lessee, its agent or its designee (including the driver designated in the related VLO) that such
Vehicle is available for delivery,
C. Notwithstanding Section 2.B. above, if Lessee surrenders a Vehicle to Lessor prior to the end of the lease
term for such Vehicle and in return accepts delivery of a replacement Vehicle prior to the scheduled start date
of the lease term for such Vehicle, then monthly rent for such replacement Vehicle during the Replacement
Vehicle Transition Period shall be based on the monthly rent for the surrendered Vehicle rather than the
monthly rent specified on the VLO for such replacement Vehicle. On and after the scheduled start date of the
lease term for the replacement Vehicle, monthly rent shall be based on the cost of such Vehicle and interest
rates in effect at the time the Vehicle is placed in service, as described in more detail on the related VQ and
as specified on the related Schedule A. As used in this section, the "Replacement Vehicle Transition Period"
shall mean the period of time beginning on the date that Lessee accepts delivery of the replacement Vehicle
and shall end on the scheduled start date of the lease term for such Vehicle.
D. Notwithstanding Sections 2.B. and 2.C. above, if any Vehicle shall be incomplete when delivered to Lessor
by reason of special modifications to be made at Lessee's request and it shall be necessary for Lessor to
advance funds for payment for such incomplete Vehicle prior to delivery to Lessee, Lessee agrees to pay to
Lessor, at the time of delivery of the complete unit, the cost of financing such payment from the time of
payment until delivery. The method for calculating the cost of such interim financing shall be specified by
Lessor separately in writing; provided, that if the Lessor has not specified such method, then the cost of
interim financing shall equal, for any calendar month or portion thereof, the product of (i) the capitalized cost
of the Vehicle, (ii) the rate per annum identified as the "prime rate" in The Wall Street Journal as of the first
business day of such calendar month plus 1.00% and (iii) the number of days in such calendar month or
portion thereof divided by 360.
E. Payments received more than ten (10) days late shall accrue interest at a rate equal to the lesser of one and
one -half percent (I'ii %) per month and the maximum legally permissible amount on the outstanding balance.
It is the intent of Lessor that it not receive any amount in excess of that amount which may be legally paid,
and any excess charges will be credited or refunded to Lessee at the Lessee's option.
F. Lessee agrees to carefully review each invoice or other statement provided by Lessor. If Lessee identifies a
billing or other error, Lessee will advise Lessor promptly in writing and in such event, Lessor's sole liability
and Lessee's exclusive remedy shall be appropriate adjustment to Lessee's account. No deductions are
permitted from invoices without the approval of Lessor.
G. In the event of a security deposit with respect to a Vehicle leased hereunder, the amount will be shown on the
related Schedule A. Such deposit shall be per Vehicle as security for the Lessee's full performance of all the
terns and conditions of this Agreement with respect to each Vehicle. Lessor shall have the right to apply the
security deposit to Lessee's account if Lessee has not fully performed all of the terms and conditions of this
Agreement or any other prior or then existing Agreement between Lessee and Lessor, but in no event in the
case of a default shall this be construed as the measure of liquidated damages. Lessor shall not be subject to
any restrictions or limitations with respect to its use of any security deposit nor shall Lessor be obligated to
pay any interest on any security deposit other than to the extent required by law.
H. Lessee's responsibility for payment of all charges due under the terms of this Agreement shall continue and
there shall be no abatement of such charges during the tune a Vehicle is stolen, converted, destroyed,
damaged by accident or otherwise, or during the time required for any repair, adjustment or servicing of such
Vehicle. Lessee agrees to immediately reimburse Lessor for any and all costs, losses or damages resulting
from confiscation of any Vehicle or damages resulting from impoundment, attachment or confiscation of any
Vehicle.
Page 3 OA Lessee Initials Lessor Initials
I. The termination of this Agreement either by the expiration thereof or for any other reasons shall not relieve
Lessee of its obligation to pay to Lessor any rental or other charges then due or to become due under the
terms of this Agreement.
J. Lessee may elect, at its option and with the prior approval of Lessor (which may be granted or withheld in the
sole discretion of Lessor), to finance License Costs, Recap Costs and /or Sales Tax (each, a "Specified Cost"
and collectively, "Specified Costs ") for any Vehicle leased under this Agreement. As used in this
Agreement:
1. "License Costs" means, with respect to any leased Vehicle, all fees and costs related to obtaining
the initial license plate for such Vehicle, including without limitation all fees, expenses,
assessments or charges imposed by any city, county, state or federal government other than sales,
personal use or property taxes.
ii. "Recap Costs" means, with respect to any leased Vehicle, any of the following: (1) any Early
Termination Charge related to such Vehicle; (2) any excess mileage charges or abnormal wear and
tear charges assessed with respect to such Vehicle, (3) any costs and expenses due Lessor in
connection with damages to such Vehicle; or (4) any other amounts due Lessor in connection with
or related to such Vehicle.
iii. "Sales Tax" means, with respect to any leased Vehicle, all sales, personal use or property taxes
imposed by any city, county, state or federal government in connection with the acquisition and/or
leasing of such Vehicle.
K. If Lessee has elected to finance Specified Costs for any Vehicle, then Lessee shall identify in writing which
Vehicle currently leased under this Agreement will be related to such Specified Costs (such Vehicle, the
Identified Vehicle ") in the related VLO or any amendment thereto. Lessee shall pay such Specified Costs in
equal monthly installments over the initial Lease Term for the Identified Vehicle and shall pay interest at the
rate specified by Lessor on the outstanding amount of Specified Costs financed by Lessor. The foregoing
monthly installments and interest on the outstanding Specified Costs shall be due and payable on each
monthly rental payment date under this Agreement. Late payments of any installment of Specified Costs or
interest thereon shall accrue interest at the rate set forth in Section 2.E.
L. In the event that any lease under the Agreement is terminated prior to the anticipated lease end date, then
Lessee shall immediately pay Lessor (1) all Specified Costs unpaid as of the date of such termination and (2)
all accrued and unpaid interest thereon.
3. SERVICE
A. This Agreement is a "net lease ". Lessee covenants that it will pay all costs, expenses, fees, charges, fines,
penalties and taxes (other than federal, state, or local taxes levied on the net income of Lessor) assessed or
incurred at any time in connection with (but not limited to) each Vehicle's titling, registration, emissions
testing, governmental inspections, delivery, purchase, sale, rental or modification, or arising from the
operation or use of the Vehicle during its lease term (including, without limitation, any costs, expenses, fees,
charges, fines, penalties and taxes arising from or related to any violations of any statute, law, ordinance, rule
or regulation or arising from or relating to any change in the jurisdiction in which the Vehicle is garaged). If
Lessee alleges that it is not liable for any tax, then at the request of Lessor, Lessee shall deliver to Lessor
certificates of exemption acceptable to Lessor with respect to such tax issued by the appropriate taxing
authority. Lessee agrees to perform and pay for, or cause to be paid for, all Vehicle service and maintenance
it being understood that such service and maintenance may be covered by a manufacturer's warranty).
Furthermore, Lessee will comply with the conditions set forth in the manufacturer's written instructions in the
owner's manual, warranty instructions, service instructions or maintenance provisions required and /or
recommended. All repairs to the Vehicle shall be completed with parts and finishes at least comparable in
quality to the parts and finishes being repaired or replaced, and title to all replacement parts and finishes shall
vest in Lessor. Lessee agrees to take at its own expense all actions required by law with respect to the
operation, registration or maintenance of each Vehicle, including without limitation, installing any
accessories or equipment and performing any emissions tests or other inspections with respect to any Vehicle
leased hereunder. If Lessor pays any of the foregoing amounts under this paragraph (including any operating
or maintenance expenses paid by Lessor in order to obtain the release of a Vehicle from any lien or claim),
Lessee shall promptly reimburse Lessor and pay Lessor's then current administrative charge.
Page 4 OK; e.ee Initials KKP-, Lessor Initials
B. Lessee agrees to keep or cause to be kept, and agrees to make available at Lessor's place of business upon
three (3) business days' notice by Lessor any and all necessary records relating to the use of the Vehicle
and /or pertaining to aforesaid fees, taxes, assessments and charges.
C. Equipment not included on the VQ and /or VLO and all Lessee requested equipment shall be installed at
Lessee's expense and with Lessor's and Lessee's prior approval (which, in the case of Lessor, shall not be
unreasonably withheld) and if such equipment is removed prior to the time the Vehicle is returned to Lessor,
Lessee shall pay the cost of all repairs required to restore the Vehicle to its original condition (ordinary wear
and tear excepted).
D. Federal law (and, in certain cases, State law) requires that Lessee as lessee disclose, and Lessee shall
disclose, the mileage of each Vehicle to Lessor in connection with the transfer of ownership of each Vehicle.
Failure to complete an odometer disclosure statement or making a false statement may result in fines and /or
imprisonment. Lessee hereby agrees to sign such disclosure statements as may be required by Lessor to
properly evidence the mileage on the odometer of each returned Vehicle, and Lessee hereby authorizes its
drivers, agents and employees to sign said disclosure statement on Lessee's behalf. Lessee (including its
drivers, agents and employees) shall not tamper with or permit the tampering, repair, replacement or
adjustment of the odometer of any Vehicle to reflect an odometer reading different than the mileage the
Vehicle has actually been driven, and Lessee agrees to indemnify and hold harmless Lessor from and against
any and all actions, claims, suits, damages, costs and expenses, including reasonable attorneys' fees, caused
by or arising from a violation by Lessee, its drivers, agents or employees, or any one directed by them, of the
odometer tampering or disclosure laws of any city, county, state, country, jurisdiction, including without
limitation the United States Federal Law, Title IV- Odometer Requirements of Public Law 92 -513, as
amended from time to time. Should any Vehicle's odometer require service (including replacement), Lessee
shall notify Lessor in writing before having such service performed_
USE OF VEHICLE
A. Lessee represents and warrants that each Vehicle leased to it pursuant to the terms of this Agreement will be
used by such Lessee primarily for commercial use in the United States, Canada and Puerto Rico.
Notwithstanding the foregoing, a Vehicle (1) may not be used in Canada or Puerto Rico unless (i) this
Agreement would be a contract enforceable in the United States with respect to the lease of any such Vehicle
used in Canada or Puerto Rico, respectively, and (il) such use is permitted by (and covered by) the insurance
required to be maintained under Sections 5.A, and 5.13, and (2) may be used for incidental use in Mexico so
long as (i) such use is permitted by (and covered by) the insurance required to be maintained under Sections
5.A. and 5.B., (ii) such Vehicle would not be garaged in Mexico and (iii) no titling or registration of such
Vehicle under any Mexican law would be required as a result of such use. For the avoidance of doubt, it is
understood that all amounts to be paid by Lessee under this Agreement shall be paid in U.S. dollars in the
United States.
B. Use of any Vehicle leased hereunder is restricted to Lessee's drivers, agents and employees and their
designees in primary pursuit of Lessee's business. Minors are not permitted to operate any Vehicle leased
hereunder. No driver of any Vehicle shall have authority to act for or on behalf of Lessor, or be deemed to be
the agent or employee of Lessor, except to the extent (and only for the limited purposes) explicitly authorized
in writing by Lessor. Lessee shall not allow any person to operate any Vehicle leased herein unless such
person holds a valid driver's license permitting said person to legally operate such Vehicle.
C. Each Vehicle shall be used only for lawful purposes and shall be operated in accordance with applicable
federal, state and local law governing Vehicle use, operation, maintenance or alteration. Lessee shall not use
any Vehicle negligently or in any way that is prohibited by any insurance policy covering such Vehicle and
shall not permit any Vehicle to become subject to any lien, charge, encumbrance or forfeiture. Lessee shall
immediately notify Lessor if any Vehicle becomes subject to any lien, charge, encumbrance or forfeiture in
violation of the foregoing, or if any Vehicle becomes subject to or involved in any judicial process.
D. Lessee shall not, without prior approval of Lessor (which shall not be unreasonably withheld) place
advertising signs, lettering, insignia, or other devices in or upon any Vehicle, paint any Vehicle or change,
modify or remove the equipment of any Vehicle. If Lessee takes any of the foregoing actions with respect to
any Vehicle, Lessee shall repaint, repair or refurbish such Vehicle as shall be necessary to restore such
Vehicle to its original condition (ordinary wear and test excepted).
E. In the event of unauthorized use of any Vehicle, Lessee assumes sole responsibility and shall indemnify and
hold Lessor harmless from any and all expenses, claims, liability and costs of every nature associated with
Page 5 !/ see Initials KAJ-i Lessor Initials
such use (except for expenses, claims, liabilities or costs caused by the gross negligence or willful
misconduct of the Lessor).
Lessee shall immediately notify Lessor in writing of any change of place of permanent garaging of any
Vehicle. Unless Lessee advises Lessor otherwise in writing, the place of initial permanent garaging of each
Vehicle shall be the address of Lessee's driver noted on the V LO relating to such Vehicle.
G. Vehicles leased hereunder may not be used for any illegal purpose. No Vehicle leased hereunder may be
used for transporting hazardous substances or for hire for transporting persons unless explicitly
authorized in writing by Lessor. Any damage of any nature arising from the use of a Vehicle shall be the
sole expense of Lessee, regardless whether Lessor permitted such use. Lessor authorizes Vehicles leased
hereunder to be used for towing so long as such Vehicles are equipped with appropriate towing equipment to
safely and legally handle items to be towed and that installation and use of such towing equipment will not
void the manufacturer's warranty.
I.NSUR4NCE AND INDEMNIFICATION
A. During the term of this Agreement and in connection with the use and operation of any Vehicle leased
hereunder, Lessee at its sole cost and expense shall provide and maintain standard automobile liability
insurance, which complies with applicable law and which coverage shall be primary and which shall not
include any self - insured retention or deductible in excess of $3,000.00, protecting Lessor against any and all
liability, with minimum limits equal to the greater of (1) the minimum limits required by law; and (2)
5500,000.00 per person per occurrence with respect to bodily injury, $500,000.00 for all persons per
occurrence with respect to bodily injury and $100,000.00 for damage to property per occurrence.
B. During the term of this Agreement and in connection with the use and operation of any Vehicle leased
hereunder, Lessee at its sole cost and expense shall provide full collision and comprehensive automobile
physical damage insurance on each leased Vehicle which complies with applicable law with deductibles in
amounts satisfactory to Lessor, covering loss from fire, theft, windstorm and other comprehensive hazards as
well as collision protection. Notwithstanding Section 5.A. above, Lessor reserves the tight to adjust coverage
requirements prior to delivery of the Vehicle.
C. Other Requirements.
For the avoidance of doubt, it is understood that the insurance described in Sections 5.A. and 5.B.
shall cover a Vehicle from the time of delivery to Lessee as determined in accordance with Section
2.B. until the time of surrender of such Vehicle to Lessor. Lessee must provide Lessor with
acceptable evidence of insurance for such coverages as referred to above concurrently with the
placement of a VLO and prior to delivery of any Vehicle, which evidence of insurance shall name
Lessor as an additional insured and loss payee. In support of the forgoing, Lessee hereby
irrevocably grants to Lessor Lessee's limited power of attorney to make claims for, receive
payments of and execute and endorse all documents, checks or drafts received in payment for loss
or damage under any insurance policy required by Sections 5.A. and 5.B. Any notice of
cancellation, expiration or material change in said insurance coverage to be provided hereunder
shall be given to Lessor in writing at least thirty (30) days in advance of such event. All insurance
policies must provide that no action, inaction or misrepresentation by Lessee or anyone other than
Lessor shall affect Lessor's right to recovery thereunder. At the request of Lessor, Lessee shall
deliver a full and complete copy of all insurance policies maintained in accordance with this
Section 5. Lessor shall be under no duty to examine such policies or any other evidence of
insurance nor to advise Lessee if the insurance coverage fails to comply with the requirements of
Section 5 of this Agreement.
ii. Lessee shall cooperate fully with Lessor or any insurer providing insurance hereunder in the
investigation, prosecution or defense of all accidents, claims, and suits arising out of or in
connection with the use or operation of any Vehicle. Without limiting the foregoing, Lessee shall
promptly notify Lessor of any such investigation, prosecution or defense and shall forward to
Lessor a copy of every demand, notice, summons or other process or correspondence received in
connection therewith.
iii. As between Lessee and Lessor, Lessee shall bear all risk of loss, damage or destruction to each
Vehicle leased hereunder (which may exceed the actual cash value of such Vehicle) and all
liability, costs, claims or expenses (including any expenses of Lessor in connection with making
claims under any insurance policy) arising in connection with such Vehicle, however caused,
Page 6 0Y.see Initials am Lessor initials
including without limitation, collision, fire, theft, flood, confiscation, destruction or conversion,
abandonment or unauthorized sale or concealment by agents or employees of Lessee, or any other
cause or combination of causes which may occur, from the time of delivery until surrender of such
Vehicle to Lessor. The existence of liability insurance or collision or comprehensive insurance
obtained by Lessee as required by this Section 5 shall not limit Lessee's liability to Lessor
hereunder (it being understood that Lessor shall not be entitled to receive any double recovery
hereunder).
iv. Lessee shall immediately notify Lessor by telephone of any accident or incident potentially giving
rise to any damage or liability claim involving any Vehicle and confirm such notice in writing
within three (3) business days of the accident or incident. Further, in connection with any accident
or incident potentially giving rise to any damage or liability claim involving any Vehicle, Lessee
1) shall permit Lessor to inspect such Vehicle, (2) shall notify Lessor and the appropriate
insurance carrier(s) of all claims and demands in connection therewith, (3) shall cause its drivers,
agents and employees to cooperate fully with Lessor and any insurance carrier(s) in the
investigation, defense and prosecution of any claims or suits arising from the operation or use of
such Vehicle and (4) shall forward to Lessor a copy of every demand, notice, summons or other
process or communication received in connection with such claim.
D. If Lessee fails to provide and maintain insurance coverages as required by this Section 5, or fails to furnish
Lessor with required evidence of such insurance coverage, Lessee shall be in default of this Agreement.
Lessor may, at its option, immediately terminate Lessee's rights under this Agreement or obtain such required
insurance on behalf of Lessee and Lessee agrees to reimburse Lessor for the premium for any such acquired
insurance. It is understood that any insurance acquired by Lessor may not name Lessee as an insured or loss
payee and may be more expensive than insurance that Lessee could obtain independently.
E. Indemnification.
Lessee agrees to indemnify, defend and hold harmless Lessor, its affiliates, agents, successors and
assigns from all costs, losses, claims, expenses, damages, suits, or liabilities, including reasonable
attorneys' fees and expenses relating to the enforcement of Lessor's rights under this Agreement, of
whatever kind and nature, unless prohibited by applicable law, arising out of or in connection with
the breach by Lessee of this Agreement, an event of default under this Agreement or the use
whether authorized or unauthorized), misuse, condition, repair, storage, return or operation
including, but not limited to, latent and other defects, whether or not discovered by Lessee) of any
Vehicle (collectively, "Indemnified Losses "), except to the extent attributable to the gross
negligence or willful misconduct of Lessor_
ii. Lessor shall not be liable for the loss of or damage to any property or goods left in or upon any
Vehicle. Lessee agrees to indemnify Lessor for any damages or liability resulting from Lessee's
property or goods or any property or goods in Lessee's care or custody while said goods are in or
upon such Vehicle, which property or goods are not included in the related VLO and/or Schedule
A.
iii. The indemnity set forth in this paragraph E is absolute and unconditional and includes Indemnified
Losses arising from, without limitation, negligence, strict liability, breach of contract (including
claims by Lessor against Lessee), vicarious liability, defects in manufacture or maintenance and
breach of warranty, but does not extend to claims or liability arising from the gross negligence or
willful misconduct of Lessor, and shall continue in full force and effect regardless of where, how or
by whom any Vehicle is operated, and notwithstanding any insurance coverage or other indemnity
obtained by or in favor of Lessee or Lessor. This indemnity shall survive the termination of this
Agreement.
F. If any Vehicle shall be lost, destroyed or stolen, then (subject to the provisions of clause iv of Section 7.C.
with respect to the minimum noncancelable lease term) Lessee shall not be responsible for the rental
payments after acceptable settlement is received by Lessor from Lessee and /or Lessee's insurance provider
although Lessee will remain responsible for any excess mileage charge or previously unrepaired damage
applicable to such Vehicle.
G. LESSOR SHALL NOT BE LIABLE TO LESSEE, ITS EMPLOYEES, AGENTS OR TO ANY PERSON,
FIRM OR CORPORATION, FOR BUSINESS LOSS OR ANY LOSS OR INTERRUPTION OF OR
DAMAGE TO BUSINESS OR PROFITS, OR FOR OTHER DAMAGES OF ANY KIND OR NATURE
WHATSOEVER, INCLUDING (WITHOUT LIMITATION) ANY LOSS OR DAMAGE CAUSED BY
Pagel !/Lessee Initials 4kn- Lessor Initials
REASON OF THE THEFT, CONVERSION, DESTRUCTION, LOSS, REPAIRS, ADJUSTMENTS,
SERVICING, REPLACEMENT, OR ANY INTERRUPTION IN THE SERVICE OR AVAILABILITY
FOR ANY REASON OF ANY VEHICLE, WHETHER ORIGINAL OR SUBSTITUTED, PROVIDED
UNDER THIS .AGREEMENT.
6. RETURN OF VEHICLE
A. It is expressly understood and agreed that each Vehicle leased hereunder shall be returned to Lessor at the
end of the Vehicle lease term or any extension thereof, in a condition as good as when first received, ordinary
wear and tear excepted. "Ordinary wear and tear ", as used in this Agreement, shall include, without
limitation: minor paint chips not through to metal or on the trailing edge of doors and fenders, minor nicks or
scratches not having depth, normal wear of carpeting, mats and upholstery. Upon the return or repossession
of any Vehicle, Lessee shall be obligated to surrender possession of such Vehicle together with all license
plates, registration certificates, documents of title or similar documents, Lessor's maintenance instruments
and certification regarding the accurateness of the odometer reading of such Vehicle as required by Section 3
above.
B. The Lessee agrees that upon expiration, cancellation or termination of the lease with respect to any Vehicle,
Lessee shall return such Vehicle to Lessor at Lessee's expense to a place mutually agreed between the parties
hereto. Lessee will pay any and all reasonable and necessary expenses incurred by Lessor as a result of a
breach of this clause.
C. Lessee shall give Lessor at least thirty (30) days written notice prior to returning any Vehicle. Each Vehicle
shall be returned to the custody of Lessor no later than the end of the thirty (30) day notice period. Lessee's
obligation for monthly charges shall continue through the end of the thirty (30) day notice period or until the
end of the lease term for such Vehicle, whichever is later. If a Vehicle is kept in service past the initial lease
term and is not extended for a specific term, the terms of the original lease (as modified by any addenda)
shall continue on a month -to -month basis.
D. Lessee agrees to maintain all tires, including the spare tire, in safe driving condition. Upon termination for
any reason of a lease with respect to a Vehicle, there shall be a tire tread depth of at least 5/32 of one inch on
each of the five (5) tires. If there is not tread depth of 5/32 of one inch remaining or if any tire(s) have breaks
or cracks, Lessee agrees to pay Lessor the cost of satisfactory replacement tire(s).
E. If any Vehicle is not in satisfactory operating condition at the time such Vehicle is returned to Lessor, Lessee
agrees to pay Lessor the cost of putting such Vehicle in satisfactory operating condition (as determined in the
reasonablejudgment of Lessor).
F. A report prepared by Lessor or its agent or representative (a "Vehicle Condition Report ") will be used as the
basis for billing damage charges, if any, to the Lessee with respect to abnormal wear and tear. "Abnormal
wear and tear" includes, without limitation, the following: accident or related physical damage; advertising
signs, lettering or other devices or other modifications described in Section 4.D. above; scratches or
depressions through the color coat of paint requiting metal work; storm damage; any glass damage including
breaks, cracks, stone chips or scratches; any sand damage; holes or tears in the interior fabrics as well as any
unusual soiling or spotting; bum holes; holes in the dashboard, floor or elsewhere resulting from auxiliary
equipment installation; damage requiting straightening, refinishing or replacement; or the existence of
mismatched paint or tires. Notwithstanding such Vehicle Condition Report, Lessee may hire a nationally
recognized independent appraiser at Lessee's expense to determine the cost, if any, of restoring, repairing and
servicing the related Vehicle to place it in the return condition required by this Agreement. A copy of the
inspection report will be famished to the Lessee upon request. Such appraisal and /or Vehicle Condition
Report will be the basis for billing abnormal wear and tear charges to Lessee. Lessee agrees to pay any costs
indicated by Lessor upon receipt of the invoice for such, and such obligation by Lessee shall not be mitigated
even if Lessor elects to sell or re -lease the related Vehicle without actually restoring, repairing or servicing
the related Vehicle to place it in the applicable return condition.
G. Mileage shall be apportioned monthly from the date of delivery of the Vehicle. Lessee will pay Lessor in
addition to the monthly rental charges, a cents per mile charge as stated on the Schedule A for all mileage (as
disclosed on the Vehicle's odometer) in excess of the mileage allowed. Lessor will bill Lessee for the full
amount of the excess mileage at the termination of the Vehicle's lease. In the event that a Vehicle lease is not
formally extended but remains in service on a month -to -month basis beyond the initial lease term, Lessee
shall incur mileage charges with respect to the related Vehicle based on the stated monthly- apportioned
mileage. Lessee hereby agrees that the mileage indicated on the Vehicle's odometer shall be the basis for
such assessment.
Page 8 Y essee Inioals F+V? Lessor Initials
H. Lessor is not required to notify Lessee that the lease term for any Vehicle is about to expire. However,
Lessor shall have the right to demand the return of the Vehicle so specified on the lease end date and at any
time thereafter. Lessee agrees to comply with such demand.
DEFAULT OF LESSEE
A. The following shall constitute "events of default" under this Agreement: (1) Lessee shall be in default of the
payments required to be made by Lessee hereunder and such default continues unremedied for a period of
five (5) business days after written notice of such failure is delivered by Lessor to Lessee, or Lessee shall
breach any other material representation, warranty, covenant, term or condition of this Agreement or any
other agreement between Lessee and Lessor or any of its affiliates to be kept or performed by Lessee, (2)
Lessee shall file a petition in bankruptcy or shall make an assignment for the benefit of creditors, (3)
proceedings in bankruptcy shall be instituted against Lessee, (4) Lessee shall be adjudicated a bankrupt or if a
receiver shall be appointed for Lessee's property or business, (5) Lessee shall permit or suffer any material
distress, attachment, levy or execution against any or all of its property or on any Vehicle, (6) Lessee ceases
doing business or transfers a major part in value of its assets, (7) any financial or credit- related information
provided to Lessor or any of its affiliates by or on behalf of Lessee was materially incorrect or misleading
when provided to Lessor or such affiliate, and (8) an event shall have occurred which, in the reasonable
judgment of Lessor, is likely to result in a material adverse change in the business, assets, operations or
financial condition of Lessee.
B. If Lessee abandons, attempts to return or returns any Vehicle prior to the end of the minimum noncaneelable
lease term other than in connection with a damaged Vehicle deemed a total loss or a lost or stolen Vehicle,
Lessor may declare Lessee in default with respect to any Vehicle so abandoned or returned in which event
Lessee shall pay Lessor all amounts due with respect to such Vehicle and the lease terms related thereto. The
remedy set forth in this paragraph shall not limit Lessor from pursuing any further remedies it might have as
more clearly defined in Section 7.C. Notwithstanding the foregoing, a surrender of a Vehicle in return for
accepting delivery of a replacement Vehicle in accordance with Section 2.C. above shall not constitute a
default hereunder.
C. Remedies for Default by Lessee.
i. In the event of a default by Lessee as to one or more Vehicles leased under this Agreement or under
any other master lease agreement between Lessee and Lessor, Lessor has the option to retain
possession, repossess or terminate this Agreement as to all leased Vehicles as collateral security for
the payment of all amounts due and owing Lessor. Lessee authorizes Lessor to apply to the
payment of any sums due Lessor hereunder as rent or otherwise, any sum of money belonging to
Lessee, which may come into Lessor's possession.
ii. Lessee agrees that Lessor shall have the right, at its option, to set-off and apply any amounts due
Lessor against any of Lessee's funds held by Lessor and to charge any such amounts to other
Vehicles leased pursuant to this Agreement. If an event of default by Lessee as to one or more
Vehicles leased under this Agreement or under any other master lease agreement between Lessee
and Lessor has occurred and if Lessor deems it necessary for its protection, Lessor may repossess
all Vehicles wherever found or retain possession of Vehicles in possession of Lessor (and Lessee
hereby authorizes Lessor and its agents to conduct such repossession, including by entering any
premises where any Vehicle may be and removing such Vehicle therefrom). Repossession shall
not terminate Lessee's obligations under the terms of this Agreement and shall be without prejudice
to all other remedies available to Lessor for collection of all sums due from Lessee. Lessee shall
pay all costs associated with repossession.
in. Upon an event of default by Lessee, Lessor may (a) declare all sums owing hereunder and/or all
monthly rental payments immediately due and payable as liquidated damages and not as penalty,
b) terminate this Agreement by notice in writing to Lessee, and (e) proceed by any appropriate
legal or equitable action to enforce performance by Lessee of this Agreement, and to make
collection of all of said rentals and amounts of money due, and to recover damages, together with
costs of such proceedings, (including reasonable attorneys' fees and expenses). Upon termination
of this Agreement, all rights (but not all obligations) of Lessee to Vehicles and under this
Agreement shall cease.
iv. Lessee's minimum noncancetable lease term shall be twelve (12) months. In the event that any
lease under this Agreement is terminated prior to the anticipated lease end date, then Lessee shall
immediately pay Lessor (1) all payments due and unpaid as of the date of such termination, (2) all
Page 9 AZL.see Initials F-k "f Lessor Initials
monthly rental payments (including sales tax) remaining through the end of the minimum
noncancelable lease term, (3) the Early Termination Charge for such lease and (4) excess mileage
charges (calculated by pro - rating the mileage allowed to the date of termination) and abnormal
wear and tear charges in accordance with Section 6. The "Early Termination Charge" for any lease
is an amount equal to the lesser of (a) the product of (i) the amount of a monthly rental payment
including sales tax) and (ii) ten and (b) the product of (i) the sum of the remaining monthly rental
payments (including sales tax) scheduled to occur between the end of the minimum noncancelable
lease term and the end of the anticipated lease end date and (ii) fifty percent (50 %); provided,
however, that if any lease is terminated at a time when there are six or fewer monthly rental
payments remaining through the end of the anticipated lease end date, then the "Early Termination
Charge" for such lease is an amount equal to the lesser of (x) the sum of the remaining monthly
rental payments (including sales tax) and (y) the product of the amount of a monthly rental payment
including sales tax) and three. Lessee shall also, at the time of termination, pay Lessor for all
other sums due and payable under the terms and conditions of this Agreement. Payments made to
Lessor under the provisions of this paragraph shall not be in lieu of remaining obligations of
Lessee, including but not limited to other charges specified in Section 6.
V. The remedies provided to Lessor under this Section 7.C. and the other provisions of this Agreement
shall not be deemed to be exclusive, but shall be cumulative and shall be in addition to all other
remedies in Lessor's favor existing in law, in equity or in bankruptcy. No failure on the part of
Lessor to exercise, and no delay on the part of Lessor in exercising, any right or remedy hereunder
shall operate as a waiver thereof.
8. DISCLAIMER OF WARRANTY
A. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED BY THIS AGREEMENT, LESSOR MAKES NO
EXPRESS OR IMPLIED WARRANTY AS TO ANY MATTER WHATSOEVER, INCLUDING,
WITHOUT LIMITATION, THE CONDITION OF EQUIPMENT, ITS MERCHANTABILITY OR ITS
FITNESS FOR ANY PARTICULAR PURPOSE, AND LESSEE SPECIFICALLY WAIVES ALL RIGHTS
TO MAKE CLAIMS AGAINST LESSOR WITH RESPECT TO ANY OF THE FOREGOING. NO
DEFECT OR UNFITNESS OF THE EQUIPMENT SHALL RELIEVE LESSEE OF ITS OBLIGATION
FOR PAYMENT AND OTHER CHARGES TO LESSOR PROVIDED FOR HEREIN OR OF ANY
OTHER OBLIGATION UNDER THIS AGREEMENT. ANY WARRANTY COVERAGE PROVIDED TO
LESSOR FROM THE MANUFACTURER(S) OF THE VEHICLE LEASED UNDER THIS AGREEMENT
SHALL BE PASSED THROUGH TO THE LESSEE FOR THE TERM OF THE LEASE TO THE EXTENT
PERMITTED BY MANUFACTURER. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, LESSOR SHALL NOT BE LIABLE TO LESSEE, ITS CUSTOMERS OR THIRD
PARTIES FOR ANY DEFECTS, EITHER LATENT OR PATENT, IN ANY VEHICLE, OR FOR ANY
DIRECT, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE
DIRECTLY OR INDIRECTLY ARISING OUT OF THIS LEASE OR ANY VEHICLE, OR FOR ANY
DAMAGES BASED ON STRICT OR ABSOLUTE LIABILITY IN TORT OR NEGLIGENCE, OR FOR
LOSS OF ANY VEHICLE, OR FOR ANY INTERRUPTION IN LESSEE'S BUSINESS BY ITS
INABILITY TO USE ANY VEHICLE FOR ANY REASON WHATSOEVER. LESSOR MAKES NO
REPRESENTATION AS TO THE TREATMENT BY LESSEE OF THIS LEASE FOR FINANCIAL
STATEMENT OR TAX PURPOSES. LESSEE IS LEASING ALL VEHICLES FROM LESSOR ON AN
AS IS" BASIS. IN NO EVENT SHALL LESSOR BE LIABLE FOR SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHATSOEVER OR HOWSOEVER CAUSED.
B. It is understood and agreed by the parties hereto that no automobile dealer, employee or agent of any dealer
or employee or agent of Lessor has authority to make any representation or warranty to Lessee on Lessor's
behalf regarding the performance, merchantability or serviceability of any Vehicle, or to make any estimates
regarding the salvage value of any Vehicle, or any modification or amendment to any term of this Agreement
other than in accordance with Section 10.B.
9. ASSIGNMENT
A. Lessee shalt not assign, transfer, encumber or convey any interest in this Agreement or any interest in any
Vehicle leased hereunder without the prior written consent of Lessor (which consent will not be unreasonably
withheld). Any such consent shall not relieve the Lessee of its obligations and liabilities hereunder without
the express written consent of the Lessor (which consent shall be in the sole discretion of the Lessor). In no
event may Lessee sublet any interest in this Agreement or any interest in any Vehicle leased hereunder. Any
purported assignment, transfer, encumbrance or conveyance without Lessors prior written consent shall be
void. Any person (i) into which Lessee may be merged or consolidated, (ii) resulting from any merger or
consolidation to which Lessee shall be a party, (iii) that acquires by conveyance, transfer or lease
Page 10 Initials kkM Lessor Initials
substantially all of the assets of Lessee or (iv) succeeding to the business of Lessee, must (x) execute an
agreement of assumption to perform every obligation of Lessee under this Agreement and (y) provide
financial information reasonably requested by Lessor, in each case within ten (10) business days of such
event.
B. Subject to Section 9.C. below, Lessor may assign, and Lessee hereby consents to such assignment of, all or
any portion of the Vehicle(s) and /or any rights of the Lessor under this Agreement, including (without
limitation) all or any rentals due or to become due hereunder. Lessor may also grant a security interest in any
Vehicle leased hereunder or any of Lessor's rights under this Agreement. No assignment or execution of a
security interest by Lessor shall alter Lessee's primary responsibilities with respect to the Lease or relieve
Lessee from any liability hereunder. Lessee agrees that any such security interest and the lien thereof
heretofore and hereafter placed by Lessor shall be superior to this Agreement and that Lessee will not assert
against any assignee or secured party any claim, defense or set -off it may have against Lessor. Lessor also
shall have the right to transfer ownership of Vehicles now or hereafter covered by this Agreement. Lessee
shall recognize any such assignment. Lessor may designate other entities (each, a "Lessor Designee") to
lease Vehicles to Lessee on the terms set forth in this Agreement and the Addenda. Each Lessor Designee
will have the same rights as Lessor under this Agreement, and either Lessor or the Lessor Designee may
directly enforce such rights against Lessee. For any rights with respect to any Vehicle leased to Lessee by a
Lessor Designee, references in this Agreement to Lessor will be deemed to be references to the Lessor
Designee. Lessee agrees that Lessor or any Lessor Designee may appoint one or more agents to act on its
behalf and that such agents have the power and right to administer and enforce this Agreement. If Lessor
causes the certificate of title or other evidence of ownership of any Vehicle to be issued in the name of any
other entity as owner, Lessor shall be deemed to have designated the titled owner as the Lessor Designee with
respect to such Vehicle. Lessee agrees to cooperate with Lessor to comply with the requirements of any
applicable law in connection with the titling, registration and plating of any Vehicle following any
assignment of this Agreement by Lessor or any transfer of ownership by Lessor in any Vehicle to a third
party.
C. This Agreement shall be binding on the respective parties, their successors, legal representatives and assigns.
So long as Lessee is in compliance with the terms of the lease, Lessee will be entitled to continue quiet
enjoyment of Vehicles leased under this Agreement in the event that a third party assumes title to the
Vehicles or any other rights of Lessor hereunder.
10. GENERAL
A. This Agreement (including all related amendments, modifications and supplements) constitutes the entire
Agreement between the parties with respect to any Vehicle subject to a VLO with respect to a closed -end
lease placed by Lessee on or after the Effective Date. For the avoidance of doubt, no Vehicle ordered by
Lessee for lease or leased by Lessee from Lessor prior to the Effective Date shall be subject to the terms and
conditions of this Agreement unless Lessee and Lessor explicitly agree in writing that this Agreement shall
apply to such Vehicles, and in no event will a Vehicle ordered by Lessee for lease or leased by Lessee with
respect to an open -end lease be subject to the terms and conditions of this Agreement.
B. Any amendment, modification or supplement to this Agreement (other than any Schedule A) must be in
writing signed by Lessor and Lessee. Delivery of an executed counterpart of a signature page to any
amendment, modification or supplement to this Agreement (including without limitation, any VLO or VQ)
by facsimile or electronic delivery shall be as effective as delivery of a manually executed counterpart of
such amendment, modification or supplement. Each Schedule A shall be effective as a supplement to this
Agreement upon delivery of such Schedule A to the Lessee in accordance with Section I.D. above.
Notwithstanding the foregoing, any amendment, modification or supplement to this Agreement generated by
Lessor that revises specific terms and conditions applicable only to an identified Vehicle and related lease (or
an identified group of Vehicles and related leases) shall be effective as a modification to this Agreement with
respect to such identified Vehicle(s) and related lease(s) upon delivery to Lessor of such amendment,
modification or supplement executed by Lessee.
C. The titles of the various paragraphs in this Agreement are intended to facilitate reference to the Agreement
only and shall not be employed in construction of any provision of this Agreement. The terms contained in
this Agreement are applicable to the singular and plural forms of such terms and to the masculine, feminine
and neuter genders of such terms.
D. Neither the failure of Lessor to insist upon the performance of any temp or condition of this Agreement or to
exercise any right or privilege conferred by this Agreement nor the waiver by Lessor of any such term or
condition shall be construed as thereafter waiving any such term, condition, right or privilege. No waiver of
any provision of this Agreement shall be valid unless the same is in writing and signed by Lessor. No
Paget 1 ^" Lessee Initials 14141 Lessor Initials
waiver of any provision of this Agreement at such time will be deemed a waiver of such provision at any
other time.
E. This Agreement shall be interpreted and applied in accordance with the substantive law of the State of
Ohio without giving effect to its conflicts of laws rules. Lessee and Lessor agree that this Agreement is
an agreement deemed made in Ohio. Lessee and Lessor hereby submit to the non - exclusive
jurisdiction of the district court of the United States for the Southern District of Ohio and of any other
court of applicable jurisdiction located in Cincinnati, Ohio. To the extent permitted by law, both
parties to this Agreement hereby waive any and all right to any trial by jury in any action or
proceedings directly or indirectly hereunder, and whether arising in law or equity.
F. Any default notice to be given by either party herein to the other shall be in writing and shall be deemed
given when deposited in the United States mail, postage prepaid and sent by either Certified or Registered
Mail, to the other party at its address as the same appears herein or at an address of which such other party
may have notified the first party in writing. Notices not relating to the default by a party to this Agreement
may be given by either party herein to the other via facsimile, electronic mail or any other mutually agreeable
form of communication, provided that such notice shall be deemed to not have been delivered until the
sending party receives verbal or written confirmation from the other party that such notice has been received.
G. The creditworthiness of Lessee and any guarantor is a material condition to this Agreement. Lessee shall
provide Lessor with financial information reasonably requested by and satisfactory to Lessor during the term
of this Agreement. Nothing herein shall be construed to require Lessor to accept any VLO.
H. Should any part, term or provision of the contract be by the courts decided illegal or in conflict with any
applicable law, the validity of the remaining portions or provisions shall not be affected thereby.
I. A "Valid Order ", as used in this Agreement, will mean each of the following:
i. An order in writing for a Vehicle signed by a Permitted Signer in the form attached as Exhibit 2
hereto (or in any other form acceptable to Lessor in its sole discretion).
ii. An order submitted electronically through Lessors "Customer Access System" or similar internet
application.
iii. An order sent by a Permitted Signer to Lessor via electronic mail which includes the information
specified in Exhibit hereto.
J. A 'Permitted Signer ", as used in this Agreement, will mean each of the following:
i. Any officer or director of Lessee or an Authorized Affiliate.
ii. Any person identified on a list provided by Lessee or an Authorized Affiliate to Lessor, as such list
may be revised from time to time.
iii. If Lessor has not received a list of persons authorized to be "Permitted Signers" from the Lessee or
an Authorized Affiliate, then any person whom the Lessor reasonably believes is authorized to act
on behalf of Lessee or an Authorized Affiliate.
K. An "Authorized Affiliate ", as used in this Agreement, will mean any corporation, limited liability company,
partnership, trust or other person designated by Lessee in writing to Lessor as an "Authorized Affiliate" of
Lessee or otherwise designated as a person to whom Lessee has granted authority to submit a VLO in
connection with this Agreement, as reasonably determined by Lessor.
IN WI WHEREOF t e parie hereto have caused this Commercial Motor Vehicle Lease Agreement to be
executed this day of _ iY" }L , 2013—.
Remainder of Page Left Intentionally Blank]
Page 12
oe Lessee Initials 04A Lessor Initials
Lessee: Town of Los Gatos Lessor: Mike Albert, Ltd
By; By:
6 Y'e_ Lz2alb"IName: Name:
Title: T Iww' Title:
Witness: t, G,` %(, °f. (.tom_ Witness:
Address of Lessee: 110 E. Main St., Los Gatos, CA 95030
Tel: (408) 354 -6834
Fax: (408) 399 -5786
14 Y MVpd AS 7D Foer + / /
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7vLvn ifaw y
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