2016-007 - Municipal Lease Agreement with Liberty National Bank for fire truckRESOLUTION 2016 -007
A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH RESPECT TO THE
ACQUISITION, PURCHASE, FINANCING AND LEASING OF A FIRE TRUCK;
AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS
REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING THE TAKING
OF ALL OTHER ACTIONS NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION.
WHEREAS, the City of Paris, Texas (the "Lessee'), a body politic and corporate duly
organized and existing as a political subdivision, municipal corporation or similar public
entity of the State of Texas, is authorized by the laws of the State of Texas to purchase,
acquire and lease personal property for the benefit of the Lessee and its inhabitants and to
enter into contracts with respect thereto; and
WHEREAS, the Lessee desires to purchase, acquire and lease certain equipment with
a cost not to exceed $1,000,000 constituting personal property necessary for the Lessee to
perform essential governmental functions (the "Equipment"); and
WHEREAS, in order to acquire such equipment, the Lessee proposes to enter into that
certain Municipal Lease Agreement (the "Agreement') with Liberty National Bank (or one
of its affiliates)(the "Lessor3, the form of which has been presented to the governing body
of the Lessee at this meeting; and
WHEREAS, the governing body of the Lessee deems it for the benefit of the Lessee
and for the efficient and effective administration thereof to enter into the Agreement and
the documentation relating to the financing of the Equipment for the purchase, acquisition
and leasing of the equipment to be therein described on the terms and conditions therein
provided;
NOW, THEREFORE, BE IT AND IT IS HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PARIS, TEXAS AS FOLLOWS:
Section 1. Approval of Documents. The form, terms and provisions of the
Agreement are hereby approved in substantially the forms presented at this meeting, with
such insertions, omissions and changes as shall be approved by the Mayor of the Lessee or
other members of the governing body of the Lessee executing the same, the execution of
such documents being conclusive evidence of such approval; and the Mayor of the Lessee is
hereby authorized and directed to execute, and the City Clerk of the Lessee is hereby
authorized and directed to attest and countersign, the Agreement and any related Exhibits
attached thereto and to deliver the Agreement (including such Exhibits) to the respective
parties thereto, and the Mayor and City Clerk of the Lessee are hereby authorized to affix
the seal of the Lessee to such documents.
Section 2. Other Actions Authorized. The officers and employees of the Lessee
shall take all action necessary or reasonably required by the parties to the Agreement to
carry out, give effect to and consummate the transactions contemplated thereby (including
the execution and delivery of Acceptance Certificates and any tax certificate, tax return or
other agreement, as contemplated in the Agreement) and to take all action necessary in
conformity therewith, including, without limitation, the execution and delivery of any
closing and other documents required to be delivered in connection with the Agreement.
Section 3. No General Liability. Nothing contained in this Resolution, the
Agreement nor any other instrument shall be construed with respect to the Lessee as
incurring a pecuniary liability or charge upon the general credit of the 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 Lessee or any charge upon its general credit or against its
taxing power, except to the extent that the amounts payable under the Agreement are
special limited obligations of the Lessee as provided in the Agreement.
Section 4. Appointment of Authorized Lessee Representatives. The Mayor and the
City Manager of the Lessee are each hereby designated to act as authorized representatives
of the Lessee for purposes of the Agreement until such time as the governing body of the
Lessee shall designate any other or different authorized representative for purposes of the
Agreement.
Section 5. Severability. If any section, paragraph, clause or provision of this
Resolution shall for any reason be held to be invalid or unenforceable, the invalidity or
unenforceability of such section, paragraph, clause or provision shall not affect any of the
remaining provisions of this Resolution.
Section 6. 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 7. Effective Date. This Resolution shall be effective immediately upon its
approval and adoption.
Section 8. Designation as Qualified Tax - Exempt Obligations. The Lessee hereby
designates the Agreement as a "qualified tax - exempt obligation" as defined in section
265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "). In furtherance
of such designation, the Lessee represents, covenants and warrants the following: (a) that
during the current calendar year the Lessee (including any subordinate entities) has not
designated nor will designate tax - exempt obligations, which when aggregated with the
Agreement, will result in more than $10,000,000 of "qualified tax - exempt obligations"
being issued; (b) that the Lessee reasonably anticipates that the amount of tax - exempt
obligations issued during the current calendar year by the Lessee (or any subordinate
entities) will not exceed $10,000,000; and, (c) that the Lessee will take such action or
refrain from such action as necessary, and as more particularly set forth in Article II of the
Agreement, in order that the Agreement will not be considered a "private activity bond"
within the meaning of section 141 of the Code.
PASSED AND APPROVED this 25th day of January, 2016.
ATTEST:
ni
Q
nice Ellis, City Clerk
APPROVED AS TO FORM:
4epD ie H. Harris, Interim City Attorney
MUNICIPAL LEASE AGREEMENT
THIS LEASE made this 28th day of January, 2016, by and between Liberty National Bank
and The City of Paris. Texas ( "Lessor'), and ( "Lessee ").
1. LEASE. Lessor hereby leases to Lessee and Lessee hereby leases from Lessor all
machinery, equipment and other property (collectively the "Equipment" and individually an "Item of
Equipment ") described in (a) the schedule executed by the parties concurrently herewith and made a
part hereof ( "Schedule 1 "), and (b) any schedule or schedules hereinafter executed by the parties
hereto and made a part hereof (collectively the "Schedules" and individually a "Schedule ").
2. TERM, TERMINATION AND NON - APPROPRIATION.
(a) The initial term of the Lease with respect to each item of Equipment shall
commence on the date which is set out on the Schedule for that item of Equipment (the
"Commencement Date" and shall terminate on the last day of Lessee's current fiscal year (the "Initial
Term "). The Lease term will be automatically renewed at the end of the Initial Term and any
subsequent fiscal year for an additional one year period (each, a "Renewal Term "), unless it is
terminated as the result of non - appropriation of funds by Lessee, pursuant to Section 2(c) hereof.
The terms and conditions during any Renewal Term shall be the same as the terms and conditions
during the Initial Term, except that the rental payments shall be as provided in the Schedule. The
Initial Term and the subsequent Renewal Terms set forth in the Schedule for each Item of Equipment
constitute the Lease Term (the "Lease Term ").
(b) The Lease Term will terminate upon the earliest of any of the following events:
(i) The expiration of the Initial Term or any Renewal Term of this Lease
and the nonrenewal of this Lease in the event of non - appropriation of
funds pursuant to Section 2(c) hereof.
(ii) A default by Lessee and Lessor's election to terminate the Lease under
Section 18 hereof, or
The payment by Lessee of all rent required to be paid by Lessee
hereunder for the Equipment.
(c) In the event sufficient funds shall not be appropriated for the payment of the
rent required to be paid in the next occurring Renewal Term, then this agreement shall be
deemed terminated at the end of the Initial Term or the then current Renewal Term, and
Lessee shall not be obligated to make payment of the rent provided for in the Schedule of this Lease
beyond such Initial Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such
termination of Lease at least thirty (30) days prior to the end of such Initial Term or Renewal Term, but
failure to give such notice shall not extend the term beyond such Initial Term or Renewal Term.
(d) Lessee intends, subject to the provisions of Section 2(c) hereof, to continue
the Lease Term through the Initial Term and all Renewal Terms and to pay the rent during the Initial
Term and each of the Renewal Terms, provided that lawful appropriations therefore can be obtained.
Lessee further intends to do all things lawfully within its power to obtain and maintain funds from which
the rent payments may be made, including making provision for such rent payments to the extent
necessary in each fiscal year budget or appropriate request submitted and adopted in
accordance with the applicable provisions of state law, to have such portion of the budget
approved and to exhaust all available reviews and appeals in event such a portion of the budget is not
approved.
RENT.
(a) The rent for each item of Equipment shall be that amount designated in the
applicable Schedule and shall be payable to Lessor in advance in amounts and atthe time and place
as set forth in the Schedule, or to such other person, or at such other place as Lessor may from time
totimedesignate in writing.
(b) Lessor and Lessee understand that and intend that the obligation of the
Lessee to pay rent hereunder shall constitute a current expense of Lessee and shall not in any way be
construed to be a debt of Lessee in contravention of any applicable constitutional or statutory
limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything
contained herein constitute a pledge of the general tax revenues, funds or monies of Lessee.
(c) Lessee shall pay rent, exclusively from legally available funds, in lawful
money of the United States of America to Lessor, or in the event of assignment by Lessor, to its
assignee, in the amounts and on the dates set forth in the Schedule hereto. The payment of rent
shall be in consideration for Lessee's use of the Equipment during the applicable year in which
such payments are due.
(d) A portion of each payment of rent is paid as, and represents payment of,
interest, and the balance of each payment of rent is paid as, and represents payment of, principal.
The applicable Schedule for each item of Equipment sets forth the interest component and principal
component of each payment of rent during the Lease Term.
(e) Lessee shall have the right to prepay, in part or in whole, the rent due
under the Lease, on any date hereafter at a price equal to the principal component hereof
outstanding as of such date, plus accrued interest to the date fixed for prepayment, without
penalty or premium.
4. NET LEASE; OBLIGATION TO PAY RENT UNCONDITIONAL This is a net lease.
All rent and other sums payable by Lessee shall be paid promptly when due without notice or demand
of any character. Except as provided in Section 2(c) hereof, Lessee's obligation for the
payment of rent hereunder is and shall be absolute and unconditional and shall not be subject to any
reduction, offset, counter - claim, abatement, suspension, deferment or diminution for any reason
whatsoever, including without limitation any destruction or damage to the Equipment any limitation
of or interference with the use or possession of the Equipment or any component thereof (including any
such limitation or interference arising out of any defect in Lessor's title to the Equipment),
condemnation or requisition of the Equipment or any component thereof, or any other occurrence or
circumstance (whether similar or dissimilar to those enumerated) which prevents the Lessee from using,
possessing or enjoying the Equipment, any breach by Lessor of the terms and conditions of the Lease
shall not abate, alter, suspend, or modify Lessees' independent duty to pay rent and other charges.
Lesseewaives (a) any and all existing and future claims and offsets against rent or other payments due
to Lessor under this Lease, (b) all rights now or hereafter conferred by statute or otherwise to terminate
or surrender this Lease or the Equipment or any component of the Equipment, and (c) any abatement,
suspension, deferment, diminution or reduction of any rent or other sums payable hereunder on account of
any such occurrence.
5. LESSEES' INSPECTION: CONCLUSIVE PRESUMPTIONS. Lessee shall inspect each
item of Equipment within three (3) business days after receipt thereof. Unless Lessee within such period
of time gives written notice to Lessor specifying any defect in or other proper objection to the Equipment,
Lessee agrees that it shall be conclusively presumed, as between Lessor and Lessee, that (a) Lessee
has received and has fully inspected the Equipment, (b) Lessee has acknowledged that the
Equipment is in good condition and repair, and (c) Lessee is satisfied with and has accepted the
Equipment in such good condition and repair and as satisfactory in all respects for the purposes of
this Lease.
If Lessor so requests Lessee shall furnish Lessor a written statement (1) setting forth the
matters stated in clauses "(a)," "(b)," and "(c)," and (2) approving the contract or invoice for such
Equipment, and (3) requesting Lessorto pay Vendor the purchase price thereof.
6. USES AND LOCATION.
(a) Lessee shall use the Equipment in a careful and proper manner, only in the
normal and ordinary course of Lessee's business, and Lessee shall comply with, and shall use the
Equipment in accordance with, (1) any and all state, federal, and local laws, rules, regulations,
statutes and ordinances applicable to Lessor and /or Lessee relating to the use, possession,
operation, licensing, registration, maintenance or inspection of the Equipment, (2) inspection policies
in effect with respect to the Equipment, (3) warranties of any and all vendors and manufacturers with
respect to the Equipment or any component thereof, and (4) operating instructions furnished by any
and all manufacturers, vendors and other suppliers of the Equipment.
(b) Lessor shall have the right to inspect the Equipment and observe its use
during normal business hours and any other reasonable time and, to the extent permitted by law,
enter into and upon the premises where the Equipment may be located for such purpose. Lessee
shall maintain possession of each Item of Equipment at, and shall not remove any item of Equipment
from, its location as shown on the Schedule for that item of Equipment without Lessor's prior written
consent. Lessee shall give Lessor immediate notice of any attachment or other judicial process
affecting any item of Equipment and title to such item, whenever requested by Lessor, shall advise
Lessor of the exact location of each Item of Equipment.
TITLE; SECURITY INTEREST
(a) Upon Lessee's acceptance of any Equipment under this Agreement, title to
the equipment shall vest in Lessee, subject to Lessor's security interest therein and all of Lessor's
other rights under this Agreement.
(b) As collateral security for the Secured Obligations Lessee hereby grants to
Lessor a first priority security interest in any and all of the Equipment. Lessee agrees to execute and
deliver to Lessor all necessary documents to evidence and perfect such security interest, including
without limitation, Uniform Commercial Code (UCC) financing statements and any amendments
thereto.
(c) "Secured Obligations" means Lessee's obligations to pay all rent payments
and all other amounts due and payable under the Municipal Lease Agreement.
8. MARKINGS. If at any time during the term hereof, Lessor supplies Lessee with
labels, plates or other marking, stating that the Equipment is owned by Lessor, Lessee shall affix
such marking to and keep them on a permanent and prominent place on the Equipment. Lessee
shall not allow the name of any person, association or corporation to be placed on any Item of
Equipment as a designation that might be interpreted as a claim of ownership, provided that Lessee
may cause any Item of Equipment to be lettered with Lessee's corporate name and /or corporate
symbol if applicable, as an appropriate and convenient way to identify Lessee's interest, underthis
Lease.
9. MAINTENANCE AND REPAIRS. Lessee, at its own cost and expense, shall (a)
maintain and keep the Equipment and all components thereof in good repair, condition and
working order and in good condition as to appearance and mechanical performance, ordinary
wear and tear from authorized use excepted, (b) make all reasonable and necessary repairs, (c)
purchase replacements for and replace worn or defective components of the Equipment, so as to
keep the Equipment in good mechanical and working order, and (d) cause the Equipment and
all components thereof to meet the applicable standards of any applicable governmental
agency with jurisdiction over Lessor, Lessee or the Equipment whether or not such requirements,
by their terms, are normally imposed upon Lessee. Lessee shall pay for any and all replacement
parts and components required by this section, and all such replacement parts and components
shall be free and clear of all liens and encumbrances. Title to all such replacement parts and
components shall immediately pass to Lessor upon installation thereof.
10. ALTERATIONS. Without the prior written consent of Lessor, Lessee shall not
make any alterations, additions or improvements to the Equipment, except that Lessee shall make
any and all alterations and additions to the Equipment that are required by any governmental authority
having relevant jurisdiction, if such alterations or additions are required to comply with health, safety
or environmental standards. All additions and improvements of whatsoever kind or nature made to
the Equipment shall belong to and become the property of Lessor upon the expiration, or earlier
termination of this Lease.
11. NO WARRANTIES BY LESSOR. LESSEE HAS SELECTED BOTH (A) THE
EQUIPMENT AND (B) THE PERSON OR ENTITY FROM WHOM LESSOR IS TO ACQUIRE THE
EQUIPMENT OR THE RIGHT TO POSSESSION AND USE OF THE EQUIPMENT (THE
"VENDOR "). LESSOR MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN OR THE
CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY OR ITS FITNESS FOR ANY
PARTICULAR PURPOSE, AND, AS TO LESSOR, LESSEE LEASES THE EQUIPMENT "AS -IS ".
LESSOR HAS ONLY THE TITLE TO THE EQUIPMENT THAT WAS CONVEYED TO LESSOR BY
LESSOR'S PREDECESSOR IN TITLE, AND THAT TITLE IS FREE FROM LIENS AND
ENCUMBRANCES THAT AROSE FROM AN ACT OR OMISSION OF LESSOR OTHER THAN A
CLAIM OF ANY PERSON OR ENTITY BY WAY OF INFRINGEMENT OR THE LIKE. LESSOR
MAKES NO OTHER WARRANTY WITH RESPECT TO TITLE TO THE EQUIPMENT. IF ANY
ITEM OF EQUIPMENT IS NOT PROPERLY INSTALLED, DOES NOT OPERATE AS
REPRESENTED OR WARRANTED BY THE VENDOR AND /OR THE MANUFACTURER, OR IS
UNSATISFACTORY FOR ANY REASON, LESSEE SHALL MAKE ANY CLAIM ON ACCOUNT
THEREOF SOLELY AGAINST SUCH VENDOR AND /OR MANUFACTURER AND SHALL,
NEVERTHELESS, PAY LESSOR ALL RENTS PAYABLE UNDER THIS LEASE. LESSOR
HEREBY AGREES TO- ASSIGN TO LESSEE, SOLELY FOR THE PURPOSE OF MAKING AND
PROSECUTING ANY SUCH CLAIM, ALL OF THE RIGHTS WHICH LESSOR HAS AGAINST
SUCH VENDOR AND /OR THE MANUFACTURER FOR BREACH OF WARRANTY OR OTHER
REPRESENTATION REPRESENTING THE EQUIPMENT. LESSEE'S OBLIGATION TO PAY
RENTALS UNDER THIS LEASE IS IRREVOCABLE, ABSOLUTE, UNCONDITIONAL, AND
INDEPENDENT OF LESSOR'S OBLIGATIONS UNDER THIS LEASE, AND SHALL NOT BE
SUBJECT TO ANY REDUCTION, OFFSET OR COUNTERCLAIM. LESSOR SHALL NOT BE
LIABLE FOR ANY DIRECT OR CONSEQUENTIAL DAMAGES INCURRED BY LESSEE AS A
RESULT OF ANY BREACH OF WARRANTY OR REPRESENTATION WITH RESPECT TO THE
EQUIPMENT AND LESSOR SHALL NOT BE LIABLE TO LESSEE FOR LOSS OF USE OF
THE EQUIPMENT, OR FOR ANY INTERRUPTION IN LESSEE'S BUSINESS OCCASIONED BY
LESSEE'S INABILITY TO USE THE EQUIPMENT, FOR ANY REASON WHATSOEVER. THE
PROVISIONS OF THIS PARAGRAPH ARE INTENDED TO BE A COMPLETE EXCLUSION AND
NEGATION OF ANY EXPRESS OR IMPLIED WARRANTIES BY LESSOR WITH RESPECT TO THE
EQUIPMENT, WHETHER ARISING UNDER THE UNIFORM COMMERCIAL CODE OR UNDER
ANY OTHER LAW NOW OR HEREAFTER IN EFFECT, OR OTHERWISE EXCEPT THE
LIMITED WARRANTY OF THE LESSOR WITH RESPECT TO THE TITLE TO THE
EQUIPMENT, SET FORTH ABOVE.
12. INSURANCE. Lessee shall provide, maintain and pay (a) insurance against the loss
or theft of or damage to the Equipment, for the amount of the Casualty Payment from time to time,
naming Lessor as a loss -payee or mortgagee, and (b) public liability and property damage
insurance, naming Lessor as an additional insured. All such insurance shall be in form and amount
and with companies satisfactory to Lessor. Lessee shall deliver the policies of insurance or duplicates
thereof or a certificate of insurance to Lessor. All insurance which Lessee is required by this Lease
to maintain shall provide that any loss thereunder shall be payable notwithstanding any action,
inaction, breach of warranty or condition, breach of declarations, misrepresentation or negligence
of Lessee, its employees or agents. Each such policy shall contain an agreement by the insurer that,
notwithstanding lapse of any policy for any reason, or right of cancellation by the insurer or any
cancellation by Lessee, such policy shall continue in full force for the benefit of Lessor, for at least
thirty (30) days after written notice thereof to Lessor, and no alteration in any such policy shall be
made except upon thirty (30) days written notice of such proposed alteration to Lessor and written
approval by Lessor. If Lessee fails to acquire any policy of insurance required to be maintained
pursuant to this paragraph, or fails to renew or replace any such policy at least twenty (20) days prior
to the expiration thereof, or fails to keep any such policy in full force and effect, Lessor shall have
the option (but not the obligation) to pay the premiums on any such policy of insurance or to take out
new insurance in an amount, type, coverage and terms reasonably satisfactory to Lessor. Any
amounts paid therefor by Lessor shall be immediately due and payable to Lessor by Lessee upon
demand by Lessor. No exercise by Lessor of such options shall in any way affect the provisions of
this Lease, including, but not limited to, the provision that failure by Lessee to maintain the
prescribed insurance shall constitute an Event of Default (as that term is defined in Section 17
below). Lessee hereby assigns to Lessor all sums which become payable under any insurance
covering the Equipment, directs any insurer to pay all such proceeds to Lessor, and authorizes the
Lessor to act as Lessee's attorney -in -fact to make claim for, receive payment of and execute and
endorse all documents, checks or drafts for, loss or damage under any such insurance policy. The
proceeds of such insurance, at the option of the Lessor, shall be applied (a) toward the
replacement, restoration or repair of the Equipment or (b) toward payment of the obligations of
Lessee hereunder.
13. CASUALTY. For the purposes of this Lease, "Casualty Occurrence" shall mean any of
the following events:
(a) The Equipment or any Item of Equipment no longer operates in the manner
and for the purposes originally contemplated, for any reason, and it is not made to so operate by
repairs or installation of replacement parts in accordance with Paragraph 10 of this Lease within 60
days from the time it ceased to operate.
(b) Any Item of Equipment is requisitioned, condemned or taken over by any
governmental authority under the power of eminent domain or otherwise for a definite period which
exceeds the then remaining Lease Term, or for any indefinite period of time.
(c) Any Item of Equipment suffers damage which, in the good faith judgment of
the Lessor would require the expenditure of an amount equal to or greater than fifty percent of Lessor's
cost of that item of Equipment (as shown on the Schedule for that Item) to repair or restore it to its
condition and operating capacity immediately prior to suffering such damage.
(d) Any Item of Equipment is lost, stolen or commandeered.
14. CASUALTY PAYMENT. If any Item of Equipment shall suffer a Casualty
Occurrence, Lessee shall promptly and fully inform Lessor with respect thereto. Lessee shall pay to
Lessor, on the first date that any installment of rentfor that Item of Equipment becomes due afterthe
giving of such notice, an amount (a "Casualty Payment ") equal to the sum of (a) the Stipulated Loss
Value (defined below) calculated as provided in this Section 14, for that Item of Equipment, computed
as of the date the Casualty Payment is due, plus (b) all installments of rent then due in connection
with that item as of the date of such Casualty Payment, plus (c) any and all of the other payments
due to Lessor under this Lease as of the date of such Casualty Payment with respect to that Item.
Upon tender of the Casualty Payment, this Lease shall terminate with respect to the Item of
Equipment for which the Casualty Payment was made, and Lessee and /or Lessee's insurer shall
become entitled to such Item of Equipment, for salvage purposes, in such item's then condition and
location, AS- IS- WHERE -IS, WITHOUT ANY WARRANTY OF MERCHANTABILITY OR OF
FITNESS FOR ANY PARTICULAR PURPOSE; OR ANY OTHER WARRANTY, EXPRESS OR
IMPLIED. For purposes of this Section 14, "Stipulated Loss Value" shall be determined through the
following three steps: First step — the "Affected Equipment Percentage" shall be determined by
dividing (1)the total cost to the Lessor to acquire the Equipment suffering the Casualty Occurrence
b (2) the Lessor's Cost of all Equipment. Second step -- the "Unrecovered Investment" shall be
determined by adding the Lessor's assumed residual value for all of the Equipment plus the principal
remaining for all of the Equipment as shown on the applicable Schedule. Third step — the "Stipulated
Loss Value" shall be the amount determined by multiplying the Affected Equipment Percentage times
the Lessor's Unrecovered Investment, and then adding to that amount any and all taxes arising out
of or in connection with the Casualty Occurrence and /or the transfer of the Item of Equipment for
salvage purposes. LESSOR'S DETERMINATION OF THE STIPULATED LOSS VALUE AND
THE RESULTING CASUALTY PAYMENT SHALL BE CONDUCTED N A COMMEFCIALLY REASONABLE
MANNER, AND, ASSUMING SUCH REASONABLENESS, SHALL BE BINDING AND CONCLUSIVE UPON
LESSEE.
15. TAXES AND GENERAL COVENANTS.
(a) This Lease is a lease to a governmental agency pursuant to
sections271.001 et seq. of Texas Local Government Code, and, as such, the Equipment is currently
exempt from all taxation by the State of Texas and any of its political subdivisions.
(b) To the extent required by law, Lessee shall prepare and file all personal
property tax returns and shall pay when due any and all sales, use, property and excise taxes, license
and registration fees, ad valorem taxes and assessments, charges and other duties of any nature
whatsoever (except for taxes based on Lessor's net income), however designated, now or
hereinafter imposed by any governmental entity, whether based upon the rent or the Equipment or the
purchase, delivery, ownership, leasing, use, possession or return thereof. If Lessee shall fail to pay
any such taxes, fees, assessments, charges or other duties when due, Lessor may, but is not
obligated to, pay such amounts. Lessee shall promptly reimburse Lessor for any and all such amounts
paid by Lessor, and the failure of Lessee to reimburse Lessor promptly shall constitute an Event of
Default hereunder.
(c) Lessee shall keep the Equipment free and clear of all levies, liens and
encumbrances.
(d) Within fifteen (15) days of availability, and in any event within one hundred
eighty (180) days after the end of each fiscal year, Lessee shall furnish to Lessor a balance sheet of
Lessee and the related statement of changes in net assets and schedule of revenues, expenditures and
changes in fund balance, showing sources and uses of income for such fiscal year, all in reasonable
detail and stating in comparative form the figures as of the end of the fiscal year and for the previous
corresponding period. If requested by Lessor, such financial statements shall be audited, or
certified by an independent certified public accountant satisfactory to Lessor, accompanied by an
opinion (inform and substance satisfactory to Lessor) of such public accountant, and must be signed
by an appropriately authorized official of Lessee.
16. REPRESENTATIONS AND WARRANTIES OF THE LESSEE. The Lessee represents
and warrants as follows:
(a) Lessee is a public body, corporate and politic, duly organized and existing
under the constitution and the laws of the State of Texas.
(b) Lessee will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a body corporate and politic.
(c) Lessee is authorized under the constitution and laws of the State of Texas to
enter into this Lease and the transactions described herein, and to perform all of its obligations
hereunder.
(d) Lessee has been duly authorized to execute and deliver this Lease under the
terms and provisions of the resolution of its governing body, by appropriate official approval, and
further represents, covenants and warrants that all requirements have been met and procedures have
occurred in order to insure the enforceability of this Lease, and Lessee has complied with such public
bidding requirements as may be applicable to this Lease and the acquisition by Lessee of the
equipment hereunder. Lessee shall cause to be executed and delivered to Lessor the incumbency
Certificate, substantially in the form attached hereto as Exhibit "A" and an opinion of counsel
substantially in the form attached hereto as Exhibit "B ".
(e) During the term of this Lease, the Equipment will be used by Lessee only for
the purpose of performing one or more governmental or proprietary functions of the Lessee consistent
with the permissible scope of Lessee's authority and will not be used in a trade or business of any
person or entity other than the Lessee.
(f) The Equipment will have a useful life in the hands of the Lessee that is
substantially in excess of the Initial Term and all Renewal Terms.
(g) The Lease has been duly authorized, executed and delivered by the Lessee
and is a legal, valid and binding obligation of the Lessee, enforceable against the Lessee in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, principles of
governmental immunity of political subdivisions and other similar laws and principles of equity, as well
as the exercise of judicial discretion, relating to or affecting the enforcement of creditors' rights.
(h) The Lessee's execution and delivery of this Lease and the performance of its
obligations hereunder will not be inconsistent with the Lessee's enabling legislation, do not and will not
contravene any law, governmental rule or regulation, judgment or order applicable to the Lessee, and
do not and will not contravene any provisions of, or constitute a default under, any indenture,
mortgage, contract or other instrument to which the Lessee is a party or by which it is bound.
(i) Neither the consent of or approval of, nor the giving of notice to, registration
with or taking of any action with respect of or by, any federal, state or local governmental agency or
instrumentalities required with respect to the Lessee's execution, delivery and performance of this
Lease.
(j) Lessee shall execute and deliver to Lessor, if applicable, the rider for
$10,000,000 Small Issuer, substantially in the form attached hereto as Exhibit "C ".
(k) Lessee shall cause the Form 8038 -G to be timely filed with the Internal
Revenue Service. An example of Form 8038 -G, and the instructions therefor, are attached hereto as
Exhibit "D ".
(1) Lessee shall execute and deliver to Lessor the Acceptance Certificate,
substantially in the form attached hereto as Exhibit "E ", for all Items of Equipment subject to the
Lease.
(m) The Lessee covenants to take any action necessary to assure, or to refrain from
any action which would adversely affect, the treatment of Lessee's obligations to make rent payments
pursuant to this Lease as obligations described in section 103 of the Internal Revenue Code of 1986, as
amended (the "Code "), the interest component of which (the "Tax- Exempt Interest Component ") is not
includable in the "gross income" of the holder for purposes of federal income taxation. In furtherance
thereof, the Lessee covenants as follows:
(1) to take any action to assure that no more than ten percent (10 %) of the proceeds of this Lease or
the property financed herewith (less amounts deposited to a reserve fund, if any) are used for
any "private business use," as defined in section 141(b)(6) of the Code or, if more than ten
percent (10 %) of such proceeds or such property financed therewith are so used, such amounts,
whether or not received by the Lessee, with respect to such private business use, do not, under
the terms of this Lease or any underlying arrangement, directly or indirectly, secure or provide for
the payment of more than ten percent (10 %) of the rent payments due hereunder, in
contravention of section 141(b)(2) of the Code;
(2) to take any action to assure that in the event that the "private business use" described in
subsection (1) hereof exceeds five percent (5 %) of the proceeds of this Lease or the property
financed herewith (less amounts deposited into a reserve fund, if any) then the amount in excess
of five percent (5 %) is used for a "private business use" which is "related" and not
"disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use;
(3) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five
percent (5 %) of the proceeds of this Lease (less amounts deposited into a reserve fund, if any) is
directly or indirectly used to finance loans to persons, other than state or local governmental
units, in contravention of section 141(c) of the Code;
(4) to refrain from taking any action which would otherwise result in the Lessee's obligations under
this Lease being treated as "private activity bonds" within the meaning of section 141(b) of the
Code;
(5) to refrain from taking any action that would result in this Lease being "federally guaranteed" within
the meaning of section 149(b) of the Code;
(6) to refrain from using any portion of the proceeds of this Lease, directly or indirectly, to acquire or
to replace funds which were used, directly or indirectly, to acquire investment property (as
defined in section 148(b)(2) of the Code), which produces a materially higher yield over the term
of this Lease, other than investment property acquired with:
(A) proceeds of the Lease invested for a reasonable temporary period of 3 years or less,
(B) amounts invested in a bona fide debt service fund, within the meaning of section 1.148 -
1(b) of the rules and regulations of the United States Department of the Treasury
( "Treasury Regulations "), and
(C) amounts deposited in any reasonably required reserve or replacement fund to the extent
such amounts do not exceed ten percent (10 %) of the proceeds of this Lease;
(7) to otherwise restrict the use of the proceeds of this Lease or amounts treated as proceeds of this
Lease, as may be necessary, so that this Lease does not otherwise contravene the requirements
of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of
the Code (relating to advance refundings);
(8) the Lessee shall pay to the United States of America at least once during each five -year period
(beginning on the Commencement Date for this Lease), and no later than the fifth anniversary of
such Commencement Date, an amount that is at least equal to ninety percent (90 %) of the
"Excess Earnings," within the meaning of section 148(f) of the Code and the Lessee shall pay to
the United States of America, not later than 60 days after the final payment made under this
Lease, one hundred percent (100 %) of the amount then required to be paid as a result of Excess
Earnings under section 148(f) of the Code; and
(9) to maintain such records as will enable the Lessee and the Lessor to fulfill their respective
responsibilities under this subsection (m) and section 148 of the Code and to retain such records
for at least three years following the final payment made under this Lease.
In order to facilitate compliance with the above subsections (m)(8) and (m)(9), to the extent any
of the proceeds of this Lease remain unspent five years following the Commencement Date, a
"Rebate Fund" shall be established with the Lessee's depository banking institution for the sole
benefit of the United States of America, and such fund shall not be subject to the claim of any
other person, including without limitation the Lessee or the Lessor. The Rebate Fund is
established for the additional purpose of compliance with section 148 of the Code.
The Lessor and the Lessee understand that the term "proceeds" includes "disposition proceeds"
as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds
(if any) and proceeds of the refunded bonds expended prior to the Commencement Date. It is
the understanding of the Lessee and the Lessor that the covenants contained herein are
intended to assure compliance with the Code and any Treasury Regulations promulgated
pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify
or expand provisions of the Code, as applicable to this Lease, the Lessee and the Lessor will not
be required to comply with any covenant contained herein to the extent that such failure to
comply, in the opinion of nationally recognized bond counsel, will not adversely affect the
exemption from federal income taxation of the Tax - Exempt Interest Component of the rent
payments under section 103 of the Code. In the event that regulations or rulings are hereafter
promulgated that impose additional requirements that are applicable to this Lease, the Lessee
and the Lessor agree to comply with the additional requirements to the extent necessary, in the
opinion of nationally recognized bond counsel, to preserve the exemption from federal income
taxation of the Tax - Exempt Interest Component of the rent payments under section 103 of the
Code. In furtherance of such intention, the Lessee and the Lessor hereby authorize and direct
the Mayor or City Manager of the Lessee to execute any documents, certificates or reports
required by the Code and to make such elections, on behalf of the Lessee, which may be
permitted by the Code, as are consistent with the purpose for the execution and delivery of this
Lease.
(n) The Lessor and the Lessee covenant to account for the expenditure of sale proceeds and
investment earnings to be used for the property on their books and records by allocating proceeds to
expenditures within 18 months of the later of the date that (a) the expenditure is made, or (b) the property
is acquired. The foregoing notwithstanding, the Lessee shall not expend sale proceeds or investment
earnings thereon more than 60 days after the earlier of (a) the fifth anniversary of the Commencement
Date, or (b) the date the final payment is made under this Lease, unless the Lessee obtains an opinion of
nationally- recognized bond counsel that such expenditure will not adversely affect the status, for federal
income tax purposes, of the Tax - Exempt Interest Component of any rent payment hereunder. For
purposes hereof, the Lessor and the Lessee shall not be obligated to comply with this covenant if they
obtain an opinion that such failure to comply will not adversely affect the excludability for federal income
tax purposes from gross income of the Tax - Exempt Interest Component of any rent payment.
(o) The Lessee covenants that the property constituting the Equipment will not be sold or otherwise
disposed of in a transaction resulting in the receipt by the Lessee of cash or other compensation, unless
any action taken in connection with such disposition will not adversely affect the tax - exempt status of the
Tax - Exempt Interest Component of any rent payment. For purpose of the foregoing, the Lessee may rely
on an opinion of nationally- recognized bond counsel that the action taken in connection with such sale or
other disposition will not adversely affect the tax - exempt status of the Tax - Exempt Interest Component of
any rent payment. For purposes of the foregoing, the portion of the Equipment comprising personal
property that is disposed of in the ordinary course shall not be treated as a transaction resulting in the
receipt of cash or other compensation. For purposes hereof, the Lessee shall not be obligated to comply
with this covenant if it obtains an opinion that such failure to comply will not adversely affect the
excludability for federal income tax purposes from gross income of the Tax - Exempt Interest Component
of any rent payment.
17. EVENT OF DEFAULT. The occurrence of any of the following events (each of them,
an "Event of Default ") shall constitute a default under this Lease:
(a) Failure of Lessee to pay any installment of rent or any other sum required
by this Lease to be paid by Lessee within ten (10) consecutive calendar days after such payment
first became due and Lessor is not required to give notice of default for its failure to receive rent.
(b) Failure of Lessee to observe, perform or comply with any term, obligation,
covenant or condition contained in this Lease or any Schedule (other than an obligation referred to in
subparagraph (a) above) and the expiration of the applicable cure period, if any, with respect to that
failure.
(c) Any attempted sale or encumbrance or any unpermitted sublease by Lessee of
the Equipment or any Item of Equipment, or any unpermitted assignment by Lessee of this Lease.
(d) The Equipment or any Item of Equipment shall become an accession of goods
not subject to this Lease.
(e) Failure of Lessee to contest a levy, seizure, attachment, lien or encumbrance
known to Lessee and asserted against the Equipment or any Item of Equipment.
(f) Failure to maintain any insurance required under Section 12 of this Lease.
(g) Lessee ceases to do business as a going concern.
(h) Lessee shall (i) be generally not paying its debts as they become due, (ii)
admit Lessee's inability to pay Lessee's debts generally as they become due, (iii) be insolvent,
either in that Lessee's liabilities exceed Lessee's assets or in that Lessee is unable to pay Lessee's
debts as they become due, (iv) make a general assignment for the benefit of creditors, (v) file a
petition in bankruptcy, or admit (by answer, default or otherwise) the material allegations of any
petition in bankruptcy filed against it under the federal bankruptcy Laws (as in effect on the date of
this Lease or as they may be amended from time to time), or under any other law for the relief of
debtors or for the discharge, arrangement or compromise of debtors' debts, or (vi) consent to the
appointment of a receiver, liquidator, assignee, custodian, trustee, sequester or other official with
similar powers over Lessee or a substantial part of its assets.
(i) the dissolution, liquidation and /or termination of the Lessee.
(j) A petition shall be filed against Lessee in proceedings under the federal
bankruptcy laws (as in effect at the date of the Lease, or as they be amended from time to time), or
under any other laws for the relief of debtors or for the discharge, arrangement or compromise of
debtors' debts, or any order shall be rendered by any court of competent jurisdiction appointing a
receiver, trustee, or liquidator of Lessee or of all or part of Lessee's assets, and such petition or order is
not dismissed or stayed as to Lessor within sixty (60) consecutive calendar days after entry thereof.
(k) Lessee's wrongful rejection or revocation of acceptance of the Equipment or an
item thereof.
(1) Lessee's repudiation of any term or provision of this Lease.
(m) Any Equipment should become the subject matter of litigation which, in
Lessor's opinion, might result in substantial impairment or loss of Lessor's rights under this Lease or
with respect to such Equipment.
(n) Any other default provided by law.
The foregoing provisions of this Section 17 are subject to the provisions of Section 2(c)
hereof, with respect to non - appropriation.
18. REMEDIES.
(a) Whenever any Event of Default referred to in Section 17 hereof shall have
happened and be continuing, Lessee agrees to return the Equipment to Lessor and Lessor shall
have the right and sole option without any further demand or notice, to take either one or more of the
following remedial steps:
(1) Declare the entire amount of all rent under the Lease (including, by
way of illustration and not by way of limitation, installments of rent which would otherwise become
due after the Event of Default) and any and all other amounts set forth in any Schedule hereto, if
any, remaining to be paid or coming due within the Initial Term of the then - current Renewal Term to
be due and payable immediately.
(2) Terminate this Lease as to any or all Items of Equipment, whereupon
all rights of Lessee to the use of that Equipment shall absolutely cease and terminate, but Lessee
shall remain liable for all of Lessee's obligations remaining to be paid or coming due within the Initial
Term or the then - current Renewal Term. Any such termination shall occur only by written notice by
Lessor to Lessee. Any such termination shall not impair Lessor's right to exercise the other remedies
set out herein.
(3) Take possession of the Equipment immediately and wherever
found, and for this purpose Lessee, to the extent permitted by law, consents to Lessor's entry upon
any premises of Lessee without any liability for such entry.
(4) Require Lessee, at Lessee's own expense, promptly to assemble
any or all of the Equipment and deliver such Equipment to Lessor in accordance with this Lease.
(5) Sell the Equipment or any portion or Item thereof, with or without
taking possession of it, at public auction or private sale, at such time and upon such terms as
Lessor may determine, free and clear of any and all rights of Lessee; provided, however, that in
conducting any such sale Lessor shall act in a commercially reasonable manner.
(6) Lease the Equipment or any portion or Item thereof, with or without
taking possession of it, for such period and rental, to such persons or entities, and upon such other
terms and conditions, as Lessor may elect; provided, however, that in conducting any such lease
Lessor shall act ina commercially reasonable manner.
(7) Recover from Lessee any and all expenses paid or incurred by or on
behalf of Lessor in the pursuit and enforcement of Lessor's rights under this Lease, including, without
limitation, Lessor's attorney's fees, legal expenses, Lessor's own administrative costs and any other
costs incurred in connection with the repossession, holding, repair and subsequent sale, lease or
other disposition of the Equipment, or any portion or Item thereof.
(8) Proceed by appropriate action to enforce the Lessee's obligations
under this Lease and to recover damages for Lessee's breach of this Lease, including, without
limitation, any and all losses and damages that Lessor may have suffered or may suffer as a result of
the Event of Default, provided that losses and damages for lost rent shall not exceed the amount of
rent due for the Initial Term or the then - current Renewal Term in which the Event of Default occurs.
(9) Withhold delivery of any Equipment not already delivered to Lessee.
(10) Stop delivery to Lessee of any Equipment held by any bailer.
(11) Pursue any other remedy at law or inequity.
2D. LESSOR'S EXPENSES. Lessee shall pay Lessor all costs and expenses, including,
but not limited to, attorney's fees and court costs, incurred by Lessor in exercising any of its rights
or remedies hereunder or enforcing any of the terms, conditions, or provisions hereof.
21. ASSIGNMENT.
(a) WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, LESSEE SHALL
NOT (1) ASSIGN, TRANSFER, PLEDGE OR HYPOTHECATE THIS LEASE, THE EQUIPMENT
OR ANY ITEMS THEREOF, OR ANY INTEREST THEREIN, OR (2) SUBLET OR LEND THE
EQUIPMENT OR ANY ITEMS THEREOF, OR PERMIT THE EQUIPMENT OR ANY ITEMS
THEREOF TO BE USED BY ANYONE OTHER THAN LESSEE OR LESSEE'S EMPLOYEES.
Consent to any one of the foregoing acts applies only in the given instance and is not a consent to any
subsequent like acts by Lessee or any other person or entity.
(b) If Lessor enters upon Lessee's premises to remove any of the Equipment,
Lessee expressly waives any right Lessee may have against Lessor for trespass or for any
damage which may be occasioned by Lessor's removal of any of the Equipment from Lessee's
premises, and shall hold Lessor harmless against any other party's claim of damage.
(c) Lessee's interest herein may not be assigned or transferred by operation of
law.
(d) Lessor may assign this Lease or mortgage the Equipment or both in
whole or in part, without notice to Lessee. If Lessee is given notice of such assignment, Lessee
shall (if Lessor requests) acknowledge receipt thereof in writing. Each such assignee or mortgagee
shall have all of the rights, BUT NONE OF THE OBLIGATIONS, of Lessor under this Lease. Lessee
shall not assert against any assignee and /or mortgages any defense, counterclaim or offset that
the Lessee may have against Lessor. Lessee agrees that it shall not assert against an assignee
and /or mortgagee any defense, counterclaim or offset that Lessee may have against Lessor.
Lessee agrees and understands that the waiver of defenses provision contained in the preceding
sentence imposes upon Lessee all the risks that might be associated with any failure by Lessor to
perform all obligations that it might have under this Lease, and obligates Lessee to pay to the
assignee all rent and other sums due under this Lease irrevocably, absolutely, unconditionally
and in all events, despite any occurrence which might cause this Lease to be terminated (either as
a matter of law or otherwise) or prevent Lessee from enjoying the use of any item of Equipment or
all of the Equipment, or reduce its value or utility to Lessee. Notwithstanding any such
assignments, Lessor agrees the Lessee may quietly enjoy use of the Equipment subject to, and so
long as Lessee complies with, all of the terms and conditions of this Lease. Subject to the
foregoing, this lease inures to the benefit of and is binding upon the heirs, legatees, personal
representatives, successors and assigns of the parties hereto.
22. PERSONAL PROPERTY. The Equipment is, and at all times shall be and remain,
personal property notwithstanding that the Equipment or any item thereof may now be, or hereafter
become, in any manner affixed or attached to, or imbedded in, or permanently resting upon, real
property or any improvement thereon, or attached in any manner to what is permanent as by means
of cement, plaster, nails, bolts, screws or otherwise and notwithstanding the provisions of any
lease, mortgage or other instrument affecting any such real property. At Lessee's sole cost and
expense, Lessee shall take all actions that may be necessary or desirable to cause the Equipment
and each component thereof to retain is character as personal property.
23. LATE CHARGES. Except as permitted by Section 2(c) hereof, if Lessor fails to
receive any installment of rent or any other sum to be paid by Lessee to Lessor within ten (10)
days after the due date thereof, Lessee shall pay Lessor a late charge equal to (a) 5% of such
installment as service charge, and (b) interest on such unpaid installment or other amount at an
annual rate equal to the lesser of 3.00% per annum or the maximum contract rate- fixed by law,
computed from the date the installment first came due until it is paid in full. It is Lessee's obligation
underthis Lease to ensure delivery to Lessor of all payments, rent, and otherwise, due hereunder.
24. NON - WAIVER. No covenant or condition of this Lease can be waived except by
the written consent of Lessor. Forbearance or indulgence by Lessor in any regards whatsoever
shall not constitute a waiver of the covenant or condition to be performed by Lessee. to which
such forbearance or indulgences may apply, and until complete performance by Lessee of
such covenant or condition, Lessor shall be entitled to invoke any remedy available to Lessor under
this Lease or by law or inequity despite said forbearance or indulgence.
25. ENTIRE AGREEMENT. This instrument, the Schedules and any annexes or
supplements hereto which refer to this Lease and state that they become part hereof constitute the
complete and exclusive statement of Lessor's and Lessee's agreement concerning the subject
matter hereof, and shall not be amended, altered or changed except by written agreement signed by
the parties.
26. NOTICES. Services of all notices under this Lease shall be sufficient if given
personally or mailed to the party involved at its respective address set forth at the foot hereof, or
at such address as such party may provide in writing from time to time. Any such notice mailed to
such address shall be effective only when deposited in the United States mail, duly addressed and
with first -class postage prepaid in a manner which provides evidence of receipt (e.g. certified mail
with return receipt, fax with transmission report, hand - delivered with receipt).
27. GENDER; NUMBER. Whenever the context of this Lease requires, the masculine
gender includes the feminine or neuter, and the singular number includes the plural; and whenever
the word "Lessor" is used herein, it shall include all assignees of Lessor. If there is more than one
Lessee named in this lease, the liability of each shall be joi nt and several.
28. TITLES. The titles to the paragraphs of this Lease are solely for the convenience of the
parties, and are not an aid in the interpretation of the instrument.
29. TIME. Time is of the essence of this Lease and each and all of its provisions.
30. GOVERNING LAW. The validity, construction and performance of this Lease shall be
governed by the laws (including, without limitation, the conflict of the laws rules) of the State of
Texas.
31. CONSENT TO JURISDICTION. Lessee acknowledges that Lessor's principal
place of business is in Lamar County, Texas. Lessee hereby consents and agrees that the
Lamar County, Texas, District Court shall have jurisdiction over any legal action with respect to
this Lease, any and all Schedules, Annexes, if any, the Equipment and any and all disputes with
respect thereto. To the extent permitted by law, Lessee agrees that Lessee shall not
file any action, or initiate any proceeding, in any other state, federal or other court of law or equity
with respect to those matters; and if Lessee should file such claim or initiate such proceeding in
violation of Lessee's agreement in this Section, Lessee agrees that Lessor may cause that
action or proceeding to be dismissed.
32. INCORPORATION BY REFERENCE. All Schedules, annexes or other attachments to
this Lease are incorporated into this Lease as if set out in full at the first place in this Lease that
references is made thereto.
33. FURTHER ASSURANCES. At Lessor's request, from time to time, Lessee shall sign
financing assignments or other documents or instruments necessary to make public filings reflecting
Lessor's ownership of and interest in the Equipment, and Lessee authorizes Lessor to make any such
filings that Lessor may deem appropriate, provided that Lessor acts in a commercially reasonable
manner. Such filings and this provision are precautionary only and do not evidence any intention that
this Lease create a security interest. In addition to the foregoing, Lessee shall provide to Lessor any
confirmation and/or reaffirmation of the representations and warranties contained in this Leasefrom any
legal counselor certified pu bl ic accountant acceptable to Lessor as Lessor may req u ire.
34. DOCUMENTATION FEE. Lessee agrees to pay Lessor $50.00 to offset Lessor's lease
documentation processing costs at the time of the execution of this Lease.
35. ACKNOWLEDGMENT. Lessee acknowledges that it has received a copy of this
Lease and all Schedules and Annexes thereto, as fully executed by the parties thereto. Lessee
acknowledges that it (a) has READ THIS LEASE, SCHEDULES AND ANNEXES OR HAS
CAUSED SUCH DOCUMENTS TO BE EXAMINED BY LESSEE'S REPRESENTATIVES OR
ADVISORS; (b) is thoroughly familiar with the transactions described in this Lease, Schedules
and Annexes; and (c) together with Lessee's representatives or advisors, if any, has had the
opportunity to ask such questions to representatives of Lessor, and receive answers thereto,
concerning the terms and conditions of the transactions described in this Lease, Schedules and
Annexes as Lessee deems necessary in connection with Lessee's decision to enter into this
Lease.
36. SEVERABILITY. If any provision of this Lease shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions because it conflicts with any provision or provisions of any
constitution, statute, rule of public policy, or any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions of this Agreement invalid, inoperative or
unenforceable to any extent whatever.
IN WITNESS WHEREOF, theparties hereto have executed these presents the day and yearfirst
written above.
LESSOR:
By:
Title:
LESSEE:
By:
Title:
Address: P.O. Box 919, Paris, Texas 75461 Address: 135 1st SE, Paris, Texas 75460
ESSENTIAL USE LETTER
Gentlemen:
Reference is made to that certain Equipment Lease /Purchase Agreement, dated as of
January 28 2016 ( the "Agreement'), between Liberty National Bank,
as Lessor and the undersigned, as Lessee. The Equipment, as such term is defined in the Agreement can
generally be described as follows:
SEE ATTACHED LIST
This confirms and affirms that the Equipment is essential to the governmental functions of lessee.
Further, Lessee has an immediate need for, and expects to make immediate use of, substantially all the
Equipment, which need is not temporary or expected to diminish in the foreseeable future. The
Equipment will be used by Lessee for the purpose of performing one or more of Lessee's governmental
functions consistent with the permissible scope of lessee's authority and not in any trade of business
carried on by any person other than Lessee. Specifically the Equipment was selected by lessee to be
used as follows:
Firetruck
LESSEE: City of Paris, TX
By:
Date:
Lan
Der ten, Texas 76207
GDPI P115891
Emesvmwu EAroup TXOOT MVD No. AIIS890
BIN 274389590
'1trotecting the 5authavest
November 10.201S
Larry Wright, Chief
Paris Fete Department .
1444 N Main St.
Paris TX 75450
RM Proposal for 75' Aluminum Aerial
Siddons•Ma►Nn Emergency Group. LLC Is pleased to provide the following proposal to Paris Fete Department Unit will comply
with all specifications attached and made a part of this proposal. Total price Includes delivery FOB Ports Fire Department and
training on operation and use of the apparatus.
Description Amount
EPIKM408492 75' Darr CF Aluminum Aerial
Pierce, Dash CF, Aedial. NA Ladder - 75, DD13 500hp, 500 gal. PUC 1.500
Price guaranteed for 30 days. Delivery within 11.5.12.5 months of order date. Vehicle Price S 955,469.00
Fun Prepay Discount 48,540.00). Total amount due with order. Prepay Discount IS 48,540.00)
Equipment $64.00.00
Bond $ 2,756 .00
SUB TOTAL ; 973,685,00
BuyBoard 399-12 S 1.500.00
TOTAL ; 975,185.00
Taxes. Tax is not Included in this proposal. In the event that the purchasing organization Is not exempt from sakes tax or any
other applicable taxes and/or the proposed apparatus does not quality for exempt status, it Is the duty of the purchasing
organization to pay any and all taxes due. Balance of sale price is due upon acceptance of the apparatus at the factory.
Leto Fee. A late fee 01.033% of the sale price will be charged per day for overdue payments beginning ten (10) days after the
payment Is due for the first 30 days. The late fee Increases to .044% per day until the payment is received In the event a
prepayment Is received after the due date, the discount will be reduced by the some percentages above Increasing the cost of
ON apparatus.
Cancellation, In the event this proposal Is accepted and a purchase order is Issued then cancelled or terminated by Customer
before completion, Siddons -Martin Emergency Group may charge a cancellation fee. The following charge schedule based on
costs Incurred may be applied:
(A)10% of the Purchase Price after order Is accepted and entered by Manufacturer,
18) 20% of the Purchase Price after completion of the approval drawings:
(C) 30% of the Purchase Price upon any material requisition.
The cancellation fee wilt increase accordingly as costs are Incurred as the order progresses through engineering and Into
manufacturing. Slddons•Martin Emergency Group endeavors to mitigate any such casts Umgh the sale of such product to
another purchaser, however, the customer shall remain gable for the deference between the purchase price and, a applicable,
the sale price obtained by Siddons- Maftin Emergency Group upon sale of the product to another purchaser, plus any costs
Incurred by Siddons.Martin to conduct such sale.
Acceptance. In an effort to ensure the above stated terms and conditions are understood and adhered to, Siddons -Martin
Emergency Group. LLC requires an authorized individual from the purchasing organization sign and date this proposal and
Include R with any purchase order. Upon signing of this proposal, the terms and conditions stated herein will be considered
binding and accepted by the Customer. The terms and acceptance of this proposal will be governed by the lews of the state of
TX. No additional terms or conditions will be binding upon SlddonsMartin Emergency Group, LLC urdess agreed to In writing
end signed by a duly authorized officer of SiddomirMartin Emergency Group. I.I.C.
Popara130JUM IB 18. 10,2015
:7
Sincerely.
Travis Walden
Siddons•Nartin Emergency Group, LLC
G
the authorized representative 'of Paris fire Department, agree to purchase the
Pr d aad agree to the terms of this proposal and the specifications attached hereto.
Ofeture b ate
Proposal3010MI 212 11.10 -Of9
EXHIBIT A
INCUMBENCY CERTIFICATE
I do, hereby certify that I am the duly elected or appointed and acting City Clerk of the City of
Paris, Texas, a political subdivision duly organized and existing under the laws of the State of Texas, that
I have custody of the records of such entity, and that, as of the date hereof, the individuals named
below are the duly elected or appointed officers of such entity holding the offices set forth opposite
their respective names. I further certify that (i) the signatures set opposite their respective name and
title are their true and authentic signatures and (fi) such officers have the authority on behalf of such
entity to enter into that certain Municipal Lease agreement dated January 28 16 .
Between such entity and Liberty National Bank.
NAME TITLE SIGNATURE
IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such entity
hereto this day of . 20
Signature:
Name Printed
Title
follows:
SCHEDULE 1
DESCRIPTION OF EQUIPMENT AND
SCHEDULE OF RENT PAYMENTS
The Equipment which is the subject of the attached Municipal Lease Agreement is as
See, Proposal dated November 10, 2015 from Siddons -Martin Emergency Group to Paris
Fire Department attached.
together with all additions, accessions and replacements thereto.
2. The Commencement Date of the Lease with respect to the Equipment is: January 28,
2016. The Initial Term of the Lease ends on December 28, 2016. The last Renewal Term of the Lease
ends on December 28, 2025.
Lessee hereby certifies that the description of the personal property set forth above constitutes an
accurate description of the "Equipment ", as defined in the foregoing Municipal Lease Agreement.
CITY OF PARIS
LESSEE:
By:
Title:
Date:
LOCATION OF THE EQUIPMENT:
PARIS, TEXAS
SCHEDULE OF RENT PAYMENTS
See, Schedule of Payments dated January 28, 2016 from Liberty National Bank attached.
DATE - 1/04/16
LOAN
SCHEDULE
PAGE I
Prepared fore CITY OF PRAIS LEASE
Principal ............
975,185,000.00
Interest babe........
Actual /365
Interest rate........
3.0000%
Payment freq. i code.
12 M
Advance date.........
1/28/2016
Payment day of month.
00
First payment date...
12/28/2016
Add. lot period int..
.00
Maturity date........
12/28/2026
Balloon term.........
000 M
Escrow payment.......
.00
Curtailment Amount...
.00
PAYMENT PAYMENT
ESCROW
ACCRUED
PRINCIPAL
PRINCIPAL
PRINCIPAL
DATE AMOUNT
PAYMENT
INTEREST
PAYMENT CURTAILMENT
BALANCE
1 12/26/2016105,150,076.40
.00
850,729.16
104,299,347.24
.00
870,885,652.76
• * *••• 2016 TOTALS
.00
850,729.15
104,299,347.24
.00
*• * * +•* * * * **
2 12/28/2017105,150,076.40
40
126,321.38
105,023,755.02
.DO
765,861,897.74
*•• *•• 2017 TOTALS
.00
126,321.38
105,023,755.02
.00
•• ** ... .....
3 12/28/2018105,150,076.40
.00
975,638.66
104,174,437.74
.00
661,687,460.D0
•• *••• 2018 TOTALS
.00
975,638.66
104,174,437.74
.00
* * *•••.. -*
4 12/2B/2019105,150,076.40
.00
850,435.22
104,299,641.18
.00
557,387,818.62
* * *• *• 2019 TOTALS
.00
850,435.22
104,299,641.18
.00
* ... * +'••••.
5 12/28/2020105,150,076.40
.00
767,287.97
104,382,788.43
.00
453,005,030.39
.... ** 2020 TOTALS
.00
767,287,97
104,362,788.43
.00
* * + * ....... '
6 12/28/2021105,150,076.40
.00
590,021.60
104,560,054.60
.00
348,444,975.79
••'• +• 2021 TOTALS
.00
590,021.80
104,560,054.60
.00
+ * + *• * *••••*
7 12/20/2022105,150,076.40
.00
453,249.97
104,696,826.43
.00
243,748,149.36
•••••• 2022 TOTALS
.00
453,249.97
104,696,626.43
.00
*•...•.. *...
8 12/28/2023105,150,076.40
.00
312,375.01
104,837,701.39
.00
138,910,447.97
•..... 2023 TOTALS
.00
312,375.01
104,837,701.39
.00
*• * * ..... *•*
9 12/28/2024105,150,076.40
.00
178,691.04
104,971,385.36
.00
33,939,062.61
••+*•• 2024 TOTALS
.00
178,691.04
104,971,385.36
.00
..... * + * * *•*
10 12/28/2025 33,957,224.82
.00
18,162.21
33,939,062.61
.00
.00
*••••• 2025 TOTALS
.00
18,162.21
33,939,062.61
.00
••••• + *• +• +*
•..... LIFE TO DATE
.OD
5,122,912.42
975,185,000.00
.00
•••••• +•• *••
nsrm ,P- "'e°°''"`c -. —.nn Via' � � 4a`�•.
i�s1°iri • �f�YSt�uuto 9 � - '
January 29, 2016
Mr. Carl Cecil
Liberty National Bank
305 Lamar Ave.
Paris, Texas 75460
Re: Lessee's Counsel Opinion
Gentlemen:
As Interim City Attorney of the City of Paris, Texas ( "Lessee "), I have examined a duly
executed original of the Municipal Lease Agreement dated as of January 28, 2016 (the
"Agreement "), between Lessee and Liberty National Bank ( "Lessor ") and the
proceedings taken by Lessee to authorize and execute the Agreement. Based upon
such examination of law and fact as I have deemed necessary or appropriate for
purposes of the opinions set forth below, I am of the opinion that:
1. Lessee is a "qualified small issuer" for the 2016 calendar year within the meaning
of Section 265(b)(C)(3) the Internal Revenue Code of 1986, as amended (the
"Code ").
2. The interest component of the rental payments as set forth in the Schedule of
Payments executed pursuant to the Agreement is exempt from Federal income
tax under Section 103 of the Code, and from franchise and ad valorem taxes of
the State of Texas.
3. The Agreement has been duly authorized, executed and delivered by Lessee
pursuant to all necessary constitutional, statutory and governing body approvals.
4. The Agreement is a legal, valid and binding obligation of Lessee, enforceable
against Lessee in accordance with its terms, subject to principles of
governmental immunity, bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws now or hereafter enacted relating to creditors'
rights generally or by principles of equity which permit the exercise of judicial
discretion.
P.O. BOX 9037 • PARIS, TEXAS 75461 -9037 • (903) 785 -7511 • FAX (903) 785 -8519
MISM II
5. Any applicable public bidding requirements have been met.
6. All requirements of Texas law, including all counties, municipalities, villages,
political subdivisions, etc. thereof with respect to this Lease have been complied
with respect to the Lease.
7. There are no pending actions or proceedings to which Lessee is a party, and
there are no other pending or threatened actions or proceedings of which Lessee
has knowledge, before any public body, court, arbitrator or administrative
agency, which either individually or in the aggregate, would materially adversely
affect the transaction described in the Agreement or the ability of Lessee to
perform its obligations under the Agreement, or question the validity of the
Agreement. Further, Lessee is not in default under any material obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement which, either individually or
in the aggregate, would have the same such effect.
8. The Equipment leased pursuant to the Agreement constitutes personal property
and when subjected to use by Lessee will not be or become fixtures under
applicable law.
9. The Lease has been designated by the Lessee as a "qualified tax exempt
obligation" under Section 265(b)(3)(B) of the Code.
This opinion is for the sole benefit of, and may be relied upon only by you and any
permitted assignee or sub - assignee of Lessor, under the Agreement.
yours,
Steph nie H. Harris
INTERIM CITY ATTORNEY
EXHIBIT C
RIDER NO.1
($10,000,000 Small Issuer)
Attached to and made a part of that certain Municipal Lease Agreement (the "Agreement") dated as of
January 28 2016 by and between Liberty National Bank as Lessor and the
City of Paris, Texas as Lessee.
1. Lessee has not issued, and reasonably anticipates that it and Its subordinate entities will not
issue, tax exempt obligations (including the Agreement) in the amount of more than
$10,000,000 during the current calendar year, that it has designated the Agreement as a
"qualified tax - exempt obligation" within the meaning of Section 265(b)(3)(B) of the Internal
Revenue Code of 1986, as amended ( "Code "); and agrees that it and its subordinate entities will
not designate more than $10,000,000 of their obligations as "qualified tax - exempt obligations"
during the current year.
The parties assume and intend that the Agreement will qualify as a "qualified tax - exempt
obligation" within the meaning of Section 265(b)(3)(B) of the Code. In the event that Lessor
either (i) received notice from the Internal Revenue Service; or (ii) reasonably determines, based
on an opinion of independent tax counsel selected by Lessor and approved by Lessee, which
approval Lessee shall not reasonably withhold, that the otherwise applicable exception set forth
In Section 265(b)(3) of the Code is not available, then Lessee shall pay to Lessor within thirty (30)
days after receiving notice from Lessor of such event the amount which with respect to rental
payments previously paid, will restore the after -tax yield on the transaction evidenced by the
Agreement to that which is would have been had such exception been available, and pay as an
additional rent on succeeding rent payment due dates such amount as will maintain such after -
tax yield.
3. The obligations of Lessee herein under which accrue during the term of the Agreement shall
survive termination of the Agreement.
4. The parties agree that this Rider is an integral part of the Agreement.
LESSEE: LESSOR:
By: By:
Title: Title: C*f
EXHIBIT D
[Form 8036(G) and Instructions
,.,,,8038-G information Return for Tax-Exempt Governmental Obligations
(Rev. September 2011) ► Under Internal Revenue Code section 149(9) OMB No. 1646,0720
Department of the Treasury ► See separate btstructisns.
Intsmal Rwanue Service Caution: N do lases price is under $100,01M, use Form 8038 -GC
t1111321011 Rene rtinn Authority If Amended Refurn_ check here ► F-1
1 Issuers name
2 bmwe empbyer identlfleatlon number (EIN)
Paris. Texas (City of)
7fr6000635
38 Name of person (other Tun Issuer) with wham the M may communlcate about this retum (see Instructions)
3b Telephone number of other person shovm on 3a
None
NIA
4 Number and street (m' P.O. box If mal is ra delvered to street address)
RoomMuite
6 Repoli number rw fRS Use 04M
136 First Street SE
13 MM
5 01y. town. or post oake, state. and ZIP code
7 Date of Issue
Paris, Texas 75460
01128!2016
s Name of Issue
0 CUSIP number
Lease Agreemant dated January 26, 2016 1by and between Ubarty National Bank and the Issuer
None
109 Name and We of officer or other employee of the Issuer whom the IRS may cd for more Information (see
1101; Telephons number of offkm or other
Ir,atrtretlons)
employee shown an 108
Gene Anderson, Director of finance
(903) 7849241
ffMWM Tvee of issue tenter the Issue nricel. See the Instructions and attach schedule.
11 Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12 Health and hospital . . . . . . . . . . . . . . . . . . . . . . . . . .
13 Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14 Public safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15 Environment (Including sewage bonds) . . . . . . . . . . . . . . . . . . . .
18 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17 Willtles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18 Other. Describe ►
19 9 obligations are TANS or RANs, check only box 19a . . . . . . . . . . . . . ► Cl
if obligations are BANs, check only box 19b . . . . . . . . . . . . . . . . ► ❑
20 9 obligations are in the form of a lease or Installment sale, check box . . . . . . . . ► (Z)
(y Flrmt maturity date (b) Issue price (c) Stated redemption (d) Weighted (e) v+ew
Price at mabrity everepe maturity
12/2812025 975,185 N/Al 9.91 Years 1 3.0
Uses of Proceeds of Bond Issue fincludina underwriters' discount) NIA
22
Proceeds used for accrued Interest . . . . . . . . . . . . .
. . . . . . . .
22
23
Issue price of entire Issue (enter amount from line 21, column (b)) . .
. . . .
24 Proceeds used for bond issuance costs (Including underwriters' discount) . .
24
25
Proceeds used for credit enhancement . . . . . . . . . . . .
25
28
Proceeds allocated to reasonably required reserve or replacement fund .
28
ISO
27
Proceeds used to currently refund prior issues . . . . . . . . .
27
28
Proceeds used to advance refund prior issues . . . . . . . . .
28
29
30
Total (add lines 24 through 28) . . . . . . . . . . . . . . .
Nonrefunding proceeds of the Issue (subtract line 29 from line 23 and enter amount here) . .
31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► vex
32 Enter the remaining weighted average maturity of the bonds to be advance refunded . . . . ► years
33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) . . . . . . ►
34 Enter the date(s) the refunded bonds were issued ► �o/vvrn
For Paperwork Reduction Act Notice, see separate Instructlons. CeL No. 63773S Fors, 8038 -0 ptsv. 9-2o/ 1)
Paris, Texas (City oq EIN: 75.6000635
Form 8038 -G (Rev. 9 -2011) Page 2
35
Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35
-o•
36a
Enter the amount of gross proceeds Invested or to be Invested in a guaranteed investment contract
(GIC) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a
•0-
b
Enter the final maturity date of the GIC 10,
c
Enter the name of the GIC provider 10,
37
Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans
to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37
0•
38a
if this issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the following information:
b
Enter the date of the master pool obligation ►
c
Enter the EIN of the issuer of the master pool obligation Po-
d
Enter the name of the issuer of the master pool obligation ►
39
If the issuer has designated the issue under section 265(b)(3)(B)(i)(111) (small issuer exception), check box
► ❑
40
If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . . . . . .
. ► ❑
41a
If the issuer has identified a hedge, check here ► ❑ and enter the following information:
b
Name of hedge provider ►
c
Type of hedge Po-
d
Term of hedge ►
42
If the issuer has superintegrated the hedge, check box . . . . . . . . . . . . . . . . . . . .
. ► ❑
43
11 the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated
according to the requirements under the Code and Regulations (see Instructions), check box . . . . . . .
. ► 0
44
If the issuer has established written procedures to monitor the requirements of section 148, check box . . . .
. ► ❑i
45a
If some portion of the proceeds was used to reimburse expenditures, check here ► ❑ and enter the amount
of reimbursement . . . . . . . . . ►
b
Enter the date the official intent was adopted ►
Under penalties of perjury. I declare that I have examined this return and accompanying schedules and statements, and to the best of my kmwfedge
Signature and belief. they are true, correct, and complete. I further declare that 1 consent to the IRS's disclosure of the issuer's return Information, as necessary to
and process tt4 return. to th r t at I have authorized above.
Consent /1 _ a, � y.�--� 01128/2016 Gone Anderson, Director of Finance
' Signature of Issuer's authorized representative Date Type or print name and title
Paid PrInVType preparer's name Preparer's t Date FChock[] fi �� Preparer Stefano Taverns 01!2812016 r- employed p01067358
Use Only Firm's name ► McCall, Parkhurst $ Horton I Firm's EIN ► 75- 0799392
Firm's address ► 717 N. Harwood, Suite 900, Dallas, TX 75201 1 Phone no. 214.754.9200
Form 8038 -0 (Rev. 9 -2011)
EXHIBIT E
ACCEPTANCE CERTIFICATE
No.1
(Non- Escrow Funded)
THIS ACCEPTANCE CERTIFICATE is issued pursuant to the certain Municipal Lease Agreement dated
„2G -(the "Agreement') between ( "Lessor ") and the below-identified
Lessee ('Lessee "). All terms notdefined herein shall have their meanings described intheAgreement.
1. The undersigned, as Lessee under the Agreement, acknowledges delivery and receipt in good condition and fully in
compliance with theAgreement, and hereby accepts, all of the Equipment described on the attached Description of Equipment
this day of 20'
2. A present need exists for the Equipment which need is not temporary or expected to diminish in the near future. The
Equipment is essential to and will be used by Lessee onlyfor the purpose of performing one or more governmental functions of
Lessee consistent with the permissible scope of Lessee's authority.
3. Lessee confirms that it will make all rental payments set forth on the Schedule of Payments attached hereto as required by
and inaccordance with Section 3 of the Agreement.
4. Lessee confirms that sufficientfunds have been orwill be appropriated to make all payments of rent due in subsequent years,
subject to the provisions of Secicn2(c) of the Agreement.
5. The Equipment is covered by insurance in the types and amounts required by the Agreement and is located at the location
set forth inthe attached description of Equipment.
6. No event of default, as such term is defined in the Agreement, and no event which with the giving of notice of lapse of time,
or both, would become an event of default, has occurred and iscontinuing on the date hereof.
7. Lessee hereby authorized and directs Lessor to fund the acquisition cost of the Equipment by paying the Vendor(s) the invoice
price(s) as set forth on the attached Description of Equipment, and certifies that upon such payment, Lessorwill have fully and
satisfactorily performed all of its covenants and obligations under theAgreement with respectto the Equipment.
LESSEE:
By:
Title:
Date: