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HomeMy WebLinkAbout09041RESOLUTION NO. 9041 A RESOLUTION APPROVING A MUNICIPAL LEASE AND OPTION AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND MINNEQUA BANK RELATING TO THE ACQUISITION OF POLICE EMERGENCY VEHICLES AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME WHEREAS, the City Council has determined that a true and real need exists for the acquisition of the police emergency vehicles (the "Equipment ") described in the Municipal Lease And Option Agreement presented to this meeting, and WHEREAS, the financing of the acquisition and lease purchase of the Equipment was authorized by Ordinance No. 6544, and WHEREAS, the City has taken the steps necessary, including any legal bidding requirements, under applicable law and Charter provisions to arrange for the acquisition of such Equipment. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Municipal Lease And Option Agreement between Pueblo, a Municipal Corporation and Minnequa Bank dated as of June 28, 2000 (the "Agreement ") presented at this meeting and all terms and provisions thereof are deemed to be in the best interest of the City for the acquisition of the Equipment and are hereby approved. The President of the City Council is authorized to execute and deliver the Agreement in the name of the City and any related documents necessary to the consummation of the transactions contemplated by the Agreement, and the City Clerk is directed to affix the seal of the City to the Agreement and attest same. SECTION 2 The City Council hereby represents that the reasonable anticipated amount of qualified tax- exempt obligations which have been and will be issued by the City will not exceed $10,000,000 in calendar year 2000. Accordingly, the City hereby designates the Agreement as a qualified tax- exempt obligation for the purposes of Section 265(b)(3) of the Internal Revenue Code. SECTION 3 The obligation of the City to make Rental Payments under the Agreement is subject to annual renewal and annual appropriation by the City Council. No provision of this Resolution or the Agreement or the acquisition of the Equipment shall be construed or interpreted as creating or constituting or giving rise to a general obligation or other indebtedness or a multiple - fiscal year direct or indirect debt or other financial obligation of the City within the meaning of any constitutional, charter or statutory debt limitation, nor a mandatory charge or payment obligation against the City beyond a fiscal year for which City has appropriated funds to make any such payment obligation. SECTION 4 The City Council hereby determines that the Rental Payments due under the Agreement do not exceed a reasonable amount so as to place the City under an economic compulsion not to terminate the Agreement or to exercise its option to purchase the Equipment pursuant to the Agreement. ATTEST: City rk INTRODUCED: June 26, 2000 By Al Guru 1 e Councilperson APP VED: President of the City Council -2- DATE: June 28, 2000 MUNICIPAL LEASE AND OPTION AGREEMENT LESSOR: Minnequa Bank 401 W. Northern Avenue Pueblo, CO 81004 LESSEE: City of Pueblo One City Hall Place Pueblo, CO 81002 This Municipal Lease and Option Agreement (the "Agreement ") entered into between Minnequa Bank ( "Lessor "), and City of Pueblo ( "Lessee "), a body corporate and politic duly organized and existing under the laws of the State of Colorado ( "State "); WITNESSETH: WHEREAS, Lessor desires to lease the Equipment, as hereinafter defined, to Lessee, and Lessee desires to lease the Equipment from Lessor, subject to the terms and conditions of and for the purposes set forth in this Agreement; and WHEREAS, Lessee is authorized under the laws of the State to enter into this Agreement for the purposes set forth herein: NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows: ARTICLE I COVENANTS OF LESSEE Section 1.01. Covenants of Lessee. Lessee represents, covenants and warrants, for the benefit of Lessor and its assignees, as follows: (a) Lessee is a public body, corporate and politic, duly organized and existing under the Constitution and of the laws of the State. (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 laws of the State to enter into this Agreement and the transaction contemplated hereby and to perform all of its obligations hereunder. (d) Lessee has been duly authorized to execute and deliver this Agreement under the terms and provisions of the resolution of its governing body, attached hereto as Exhibit A or by other appropriate official approval, and further represents, covenants and warrants that all requirement have been met and procedures have occurred, in order to ensure the enforceability of the Agreement, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement and the acquisition by Lessee of the Equipment thereunder. Lessee shall cause to be executed an opinion of its counsel substantially in the form attached hereto as Exhibit B. (e) During the term of this Agreement, the Equipment will be used by Lessee only for the purpose of performing one or more governmental or proprietary functions of 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 Lessee as outlined in Exhibit C attached hereto. (f) During the period this Agreement is in force, Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the ensuing fiscal year and such other financial information relating to the ability of Lessee to continue this Agreement as may be reasonably requested by Lessor or its assignee. (g) The duration of the Agreement, including all optional renewal terms, does not exceed the weighted average useful life of the Equipment. (h) The Equipment is, and during the period this Agreement is in force will remain, personal property and, when subjected to use by Lessee under this Agreement, will not be or become fixtures. ARTICLE II DEFINITIONS Section 2.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Agreement shall have the respective meanings specified below. "Acceptance Certificate" means a certificate in substantially the form attached hereto as Exhibit F and which shall be delivered by Lessee to Lessor upon receipt and acceptance of the Equipment. "Agreement" means this Municipal Lease and Option Agreement with its Exhibits, which Exhibits are attached hereto and incorporated herein by reference. "Code" means the Internal Revenue Code of 1986, as amended, and to the extent applicable, the regulations and rulings issued thereunder. "Commencement Date" is the date when the term of this Agreement begins and Lessee's obligation to pay rent accrues, which date shall be the date first above written. EQNBQESC2 /95.PRI "Equipment" means the property described in Exhibit D and which is the subject of this Agreement. "Lease Term" means the Original Term and any Renewal Terms as to which the Lessee may exercise its option to renew this Agreement, as further provided under article IV of this Agreement. "Purchase Price" means the amount set forth and so titled in Exhibit E hereto which Lessee may pay to Lessor to purchase the Equipment as provided under Section 11.01. "Rental Payments" means the basic rental payments payable by Lessee pursuant to Exhibit E of this Agreement. "Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer. ARTICLE III LEASE OF EQUIPMENT Section 3.01. Lease of Equipment. Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor, the Equipment, in accordance with the provisions of this Agreement, to have and to hold for the Lease Term. Notwithstanding the commencement date of the term of this lease with respect to any item of Equipment, Lessee agrees that all risk of loss of the Equipment shall be on the Lessee from and after shipment of the Equipment to Lessee by the Seller thereof, F.O.B. Seller's point of shipment. ARTICLE IV LEASE TERM Section 4.01. Lease Term. The Lease Term shall commence on the Commencement Date. The Original Term shall terminate December 31, 2000. The Lease Term may be continued, solely at the option of the Lessee, for the first renewal term and for additional Renewal Terms thereafter, each of one year duration, except the final Renewal Term, if the lessee has continued to renew this Agreement, shall terminate on February 1, 2003, or, if all Rental Payments for such Renewal Term have not been paid by the Lessee, on such later date as all such Rental Payments are paid by Lessee. If the Lessee shall determine, for any reason, not to renew this Agreement, the Lessee shall give written notice to such effect to Lessor not less than thirty (30) days prior to the end of the Original Term or the then current Renewal Term, provided, however, that a failure to give such notice shall not constitute an event of default, nor prevent the Lessee from declining to renew this Agreement, nor result in any liability on the part of the Lessee. The option of the Lessee to renew or not to renew this Agreement shall be conclusively determined by whether or not the City Council of Lessee has, on or before December 31, immediately preceding the commencement of any Renewal Term, budgeted and appropriated, specifically with respect to this agreement, moneys sufficient to pay all Rental Payments for the ensuing Renewal Term all as provided in section 6.05 of this Agreement. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original term. Section 4.02 Termination of Lease Term. The Lease Term will terminate upon the first to occur of (a) the expiration of the Original Term or any Renewal Term during which there occurs an Event of Nonappropriation; (b) the exercise by Lessee of the option to purchase the Equipment under Articles VI or XI; (c) Lessor's election to terminate this Agreement upon a default under Article XIII; or (d) the payment by the Lessee or all sums required to be paid by Lessee hereunder. Termination of this Agreement shall temninate all unaccrued obligations of Lessee under this Agreement and shall terminate the rights of the Lessee to the possession of the Equipment (except to the extent of any purchaser under Articles VI or XI). ARTICLE V ENJOYMENT OF EQUIPMENT Section 5.01. Quiet Enjoyment Lessor hereby agrees not to interfere with Lessee's quiet use and enjoyment of the Equipment so long as Lessee is not in default hereunder. Section 5.02. Use of the Equipment Lessee will not install, use, operate or maintain the Equipment improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Agreement. Section 5.03. Right of Inspection During the Lease Term, the Lessor and its officers, employees and agents shall have the right at all reasonable times during business hours to enter into and upon the property of the Lessee for the purpose of inspecting the Equipment. Section 5.04. Disclaimer of Warranties LESSOR MAKES NO WARRANTY NOR REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR ANY OTHER WARRANTY WITH RESPECT THERETO AND, AS TO THE LESSOR, THE LESSEE LEASES THE EQUIPMENT "AS IS." In no event shall the Lessor be liable for any loss or damage, including incidental, indirect, special or consequential damage, in connection with or arising out of this Agreement or the existence, furnishing, functioning or the Lessee's use of any items or products or services provided for in this Agreement. Section 5.05. Vendors Warranties Lessee may assert claims and rights that the Lessor may have against any Vendor of any portion of the Equipment. EQNBQESC2/9 PRl ARTICLE VI RENTAL PAYMENTS Section 6.01. Rental Payments to Constitute a Current Expense of Lessee The obligation of Lessee to pay Rental Payments hereunder is a current expense of Lessee and not a debt of Lessee in contravention of any applicable limitations or requirements, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or monies of Lessee. Lessor acknowledges that the obligations of the Lessee under this Agreement are payable solely from the Rental Payments due hereunder and shall not constitute nor given rise to a general obligation or multiple - fiscal year direct or indirect debt or other financial obligation whatsoever of the Lessee within the meaning of any constitutional or statutory provision or limitation or a mandatory charge or requirement against the Lessee in any ensuing fiscal year of the Lessee beyond the current fiscal year and lessor acknowledges that the Lessee may elect not to renew this Agreement by failure to budget and appropriate funds sufficient to meet its next fiscal year's Rental Payments, and that the act of budgeting and appropriating funds are legislative acts and, as such, are solely with the discretion of the governing body of the Lessee. Section 6.02. Interest and Principal Components A portion of each Rental Payment is paid as interest, and the balance of each Rental Payment is paid as principal. Exhibit E hereto sets forth the interest component and the principal component of each Rental Payment during the Lease Term. Section 6.03. Rental Payments to be Unconditional The obligations of Lessee to make Rental Payments, and to perform and observe the covenants and agreements contained herein, shall be absolute and unconditional in all events, except as expressly provided under this Agreement, including the occurrence of an Event of Nonappropriation, notwithstanding any dispute between Lessee and Lessor, any Vendor or any other person. Lessee shall not assert any right of set -off or counterclaim against its obligation to make payments under this Agreement. All Rental Payments shall be paid without notice or demand and without abatement or deduction of any amount whatsoever. Section 6.04. Continuation of Lease Term by Lessee Lessee intends to do all things lawfully within its power to obtain and maintain funds from which the Rental Payments may be made provided, however, that this statement of intention shall not negate or diminish in any way the right of the governing body of the Lessee to determine to terminate this Lease by not appropriating the Rental Payments due hereunder in any fiscal year of the Lessee as set forth in Section 6.05 hereof. Section 6.05. Nonappropriation If sufficient funds are not appropriated for Rental Payments due in any fiscal year, an Event of Nonappropriation shall be deemed to have occurred. Lessee shall promptly deliver notice thereof to the Lessor. Except as other wise provided in Section 4.01 hereof, the exercise of the Lessee's annual option to terminate this Lease shall be conclusively determined by whether or not the governing body of the Lessee has, on or before the last day of each fiscal year of the Lessee, duly enacted an appropriation resolution for the ensuing fiscal year of the Lessee which includes (i) by specific line item reference sufficient amounts authorized and directed to be used to pay all the Rental Payments due hereunder. The officer of the Lessee at any time charged with the responsibility of formulating budget proposals is hereby directed to include in the annual budget proposals submitted to the governing body of the Lessee, items for all payments required under this Agreement for the ensuing fiscal year of the Lessee, until such time (if any) as the Lessee's governing body may determine to terminate this Agreement; it being the intention of the governing body that any decision not to renew this Agreement shall be made solely by the governing body and not by any other official of the Lessee. Upon the occurrence of an Event of Nonappropriation, the Lessee agrees that the Lessor may reclaim possession of the Equipment. Lessee agrees peaceably to deliver the Equipment and title thereto to Lessor at a reasonable location specified by Lessor, all at Lessee's expense. ARTICLE VII TITLE TO EQUIPMENT; SECURITY INTEREST Section 7.01. Title to the Equipment During the term of this Agreement, title to the Equipment shall vest in Lessee, subject to Lessor's rights upon an Event of Default or an Event of Nonappropriation. Section 7.02. Security Interest As security for its obligations hereunder Lessee grants to Lessor a security interest constituting a first lien on the Equipment and on all additions, attachments, accessions and substitutions thereto, and on any proceeds therefrom. Lessor shall be shown as holding a first lien on the title to each separate piece of Equipment and Lessor shall have the right to file such UCC Statements as Lessor deems it to be in Lessor's best interest, all with cooperation of lessee. Section 7.03. Liens and Encumbrances to Title Lessee shall promptly discharge any liens placed on the Equipment other than those created by Lessor. EQNBQESC2/95 PRI ARTICLE VIII MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES Section 8.01. Maintenance of Equipment by Lessee Lessee will, at Lessee's own cost and expense, maintain, preserve and keep the Equipment in good repair, working order and condition. Lessor, not being the manufacturer of the Equipment nor manufacturer's agent, makes no warranty or representation of any kind. Additionally, Lessor shall have no obligation to install, erect, test, adjust, or service the equipment, and Lessee shall look solely to the manufacturer and/or the Seller of said Equipment for any claims related to the Equipment. Lessee agrees at its own cost and expense: a. To pay all transportation and shipping charges and other expenses incurred in connection with the shipment of the Equipment by the Seller to Lessee; b. To pay all charges and expenses in connection with the operation of each item of Equipment; c. To comply with all governmental laws, ordinances, regulations, requirements, and rules with respect to the use, maintenance, and operation of said Equipment; and d. To make all repairs and replacements required to be made to maintain the Equipment in good repair, condition, and working order and furnish all parts, replacements, mechanisms, devices, and servicing required thereof, so that the value, condition, and operating efficiency thereof will at all times be maintained and preserved, reasonable wear and tear accepted. All such repairs, parts, mechanisms, devices, and replacements shall immediately, without further act, become the property of Lessor and part of the Equipment. It is the intent of the parties that at the expiration of this agreement, if the Equipment is returned to Lessor, it be returned to Lessor in good repair, condition, and working order. Section 8.02. Taxes, Other Governmental Charges and Utility Charges In the event that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form (except for income taxes of Lessor), government charges or utility charges and expenses, Lessee will pay all such taxes and charges as they come due. Section 8.03. Provisions Regarding Insurance At its own expense Lessee shall cause casualty, public liability and property damage insurance to be carried and maintained (and evidenced by certificates delivered to Lessor throughout the Lease Term) in the amounts and for the coverages set forth on Exhibit G, provided that the amount of casualty and property damage insurance shall not be less than the then applicable Purchase Price. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. Section 8.04. Advances In the event Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Equipment in good repair and operating condition, Lessor may (but shall be under no obligation) purchase the required policies of insurance and pay the premiums on the same or may make such repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefor by Lessor shall be repaid to Lessor, together with interest thereon at the rate specified hereafter. Section 8.05. Modifications Without the prior written consent of the Lessor, the Lessee shall not make any material alterations, modifications or attachments to the Equipment. ARTICLE IX DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS Section 9.01. Damage, Destruction and Condemnation If (a) the Equipment or any portion thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or (b) title to, or the temporary use of the Equipment or any part thereof is taken under the exercise of the power of eminent domain, Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award to be applied either to the prompt repair, restoration, modification or replacement of the Equipment or, at Lessee's option, to the payment in full of the Purchase Price. Any balance of the Net Proceeds remaining after such work or purchase has been completed shall be paid to Lessee. For purposes of Article VIII, Section 8.03, and this Article IX, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award after deducting all expenses (including attorney's fees) incurred in the collection of such claims or award. Section 9.02. Insufficiency of Net Proceeds Provided that an Event of Nonappropriation has not occurred, if the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or replacement, Lessee shall either (a) complete the work and pay any cost in excess of the amount of Net Proceeds, or (b) Lessee shall pay to Lessor the Purchase Price. The amount of the Net Proceeds in excess of the then applicable Purchase Price, if any, may be retained by Lessee. ARTICLE X TAX COVENANT Section 10.01. Tax Covenant. It is the intention of the Lessee and the Lessor that the interest portion of the Rental Payments received by the Lessor shall not be includable in gross income for federal income tax purposes. Lessee covenants that it will take any and all reasonable action necessary to maintain the interest portion of the Rental Payments as not includable in gross income for federal income tax purposes, and that it will not intentionally perform any act or enter into any agreement or use or permit the use of the Equipment or any portion thereof in a manner that shall have t! effect of including the interest portion of the Rental Payments in gross income for federal income tax purposes, including (without limitation) leasing all or any portion of the Equipment or contracting to a third party for the use or operation of all or any portion of the Equipment if entering into such lease or contract would have such effect. EQNBQESC2 /95 PRI ARTICLE XI OPTION TO PURCHASE Section 11.01. Purchase Rights Lessee shall be entitled to purchase the Equipment: (a) Upon payment in full of all Rental Payments in accordance with Exhibit E hereof and all other amounts due hereunder; or (b) Provided there is no Event of Default hereunder and upon written notice delivered at least 30 days in advance, Lessee may purchase the Equipment on any rental payment date by paying to Lessor the Rental Payment then due, together with the Purchase Price set forth in Exhibit E along with all other amounts then due hereunder. Section 11.02. Conveyance of the Equipment. Upon the purchase of the Equipment as provided in Section 11.0 1, the Lessor shall execute a bill of sale and other necessary documents, including releases of UCC -1 financing statements, assigning, transferring and conveying good and marketable title to the Equipment, as the Equipment then exists. ARTICLE XII ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING Section 12.01. Assignment or Sale by Lessor (a) This Agreement, and the obligations of Lessee to make payments hereunder, may be sold, assigned or otherwise disposed of in whole or in part to one or more successors, grantors, holders, assignees or subassignees by Lessor. Upon any sale, disposition, assignment or reassignment, Lessee shall be provided with a notice of said assignment. During the term of this Agreement, Lessee shall each keep a complete and accurate register of all such assignments in form necessary to comply with Section 149(a) of the Code. (b) Lessee agrees to make all payments to the assignee designated in the assignment, notwithstanding any claim, defense, setoff or counterclaim whatsoever (except arising from Lessor's breach of this Agreement) that Lessee may from time to time have against Lessor or Vendor. Lessee agrees to execute all documents, including notices of assignment and chattel mortgages or financing statements, which may be reasonably requested by Lessor or assignee to protect its interests in the Equipment and in this Agreement. (c) Lessee hereby agrees that Lessor may sell or offer to sell this Agreement (i) through a certificate of participation program, whereby two or more interests are created in the Agreement, the Equipment or the Rental Payments; or (ii) with other similar instruments, agreements and obligations through a pool, trust, limited partnership, or other entity. Section 12.02. No Sale, Assignment or Subleasing by Lessee This Agreement and the interest of Lessee in the Equipment may not be sold, assigned or encumbered by Lessee without the prior written consent of Lessor. Section 12.03. Release and Indemnification Covenants To the extent permitted by the laws and Constitution of the State, Lessee shall protect, hold harmless and indemnify Lessor from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof except those resulting from Lessor's intentional or negligent acts and expenses in connection therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the entering into this Agreement, the ownership of any item of the Equipment, the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Equipment or any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person. The indemnification arising under this paragraph shall survive the termination of this Agreement. Indemnification to any tort shall be limited to the extent and in the amounts provided for by Colorado Law. ARTICLE XIII EVENTS OF DEFAULT AND REMEDIES Section 13.01. Events of Default The following constitute "Events of Default" under this Agreement: (a) failure by the Lessee to pay any Rental Payment or other payment required to be paid hereunder when due; or (b) failure by the Lessee to maintain insurance on the Equipment in accordance with Article VIII Section 8.03 hereof, or (c) failure by the Lessee to observe and perform any other covenant, condition or agreement on its part to be observed or performed for a period of 30 days after written notice is given to the Lessee by the Lessor, specifying such failure and requesting that it be remedied; provided, however, that if the failure stated in such notice cannot be corrected within such 30 -day period, the Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected: or (d) initiation by the Lessee of a proceeding under any federal or state bankruptcy or insolvency law seeking relief under such laws concerning its indebtedness. The foregoing provisions of this Section are subject to the provisions of Article VI, Section 6.05, hereof. Section 13.02. Remedies On Default Whenever any Event of Default shall have occurred and be continuing, the Lessor shall have the right, at its sole option without any further demand or notice, to take any one or any combination of the following remedial steps: (a) Terminate this Agreement and retake possession of the Equipment wherever situated, and sell or lease, sublease or make other disposition of the Equipment for use over a term in a commercially reasonable manner, all for the account of Lessor; provided that Lessee shall remain directly liable for the amount actually appropriated for the purchase or rental of the Equipment and unpaid by Lessee during the current fiscal year. Lessor shall apply the sale proceeds in the following manner: FIRSTLY, to pay all proper and reasonable costs and expenses associated with the recovery, repair, storage and sale of the Equipment. including reasonable attomeys' fees and expenses; EQNBQESC2 /9iPRI SECONDLY, to pay the Lessor (i) the amount of all unpaid Rental Payments, if any, which are then due and owing, together with interest and late charges thereon, (ii) the then applicable Purchase Price (taking into account the payment of past due Rental Payments as aforesaid), plus a pro rata allocation of interest, at the rate utilized to establish the interest component for the Rental Payment next due, from the next preceding due date of a Rental Payment until the date of payment by the buyer, and (iii) any other amounts due hereunder; THIRDLY, to pay the remainder of the sale proceeds, purchase moneys or other amounts paid by a buyer of the Equipment, to the Lessee. (b) proceed by appropriate court action to enforce performance by the Lessee of the applicable covenants of this Agreement or to recover for the breach thereof, or (c) Use or retake such portion of the Equipment as the Lessor, in its sole discretion, may decide. All of the Lessee's right, title and interest in any Equipment the possession of which is retaken by the Lessor upon the occurrence of an Event of Default or Event of Nonappropriation shall terminate immediately upon such repossession. Section 13.03. Return of Equipment Upon an Event of Default, Lessee agrees to allow Lessor to recover the Equipment at Lessee's sole cost and expense, in accordance with Article VI, Section 6.05. Section 13.04. No Remedy Exclusive No remedy herein conferred upon or reserved to the Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. Section 13.05. Late Charge; Interest on Late Payment Any Rental Payment not paid on the due date thereof shall bear a late charge equal to two percent (2 %) of the amount of the past due Rental Payment, but in no event less than $100.00. Any unpaid Rental Payment or other amount payable by Lessee to the Lessor hereunder, shall bear interest at the lesser of (a) the rate payable on the principal portion of the Purchase Price, plus five full percentage points per annum, or (b) the maximum rate allowed by law. Section 13.06. Force Maieure If by reason of force maieure Lessee is unable in whole or in part to carry out its agreement on its part herein contained, other than the obligations on the part of Lessee contained in Article VI and Article VIII Section 8.03 hereof, Lessee shall not be deemed in default during the continuance of such inability. The term "force majeure" as used herein shall mean, without limitation, the following: acts of God, strikes, lockouts or other industrial disturbances; act of public enemies, orders or restraints of any kind of the government of the United States of America or the State or any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods; or explosions. ARTICLE XIV MISCELLANEOUS Section 14.01. Notices All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, to the parties at the addresses set forth on the first page hereof. Section 14.02. Binding Effect This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. Section 14.03. Severability In the event any provision of this Agreement, other than the requirement of the Lessee to pay Rental Payments in Accordance with Article VI and the requirement that the obligation of the Lessee to pay Rental Payments is subject to the limitations of Section 6.05 hereof and the requirement of the Lessor to provide quiet enjoyment of the Equipment, shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof. Section 14.04. Amendments All amendments hereto must be in writing. Section 14.05. Execution in Counterparts This Agreement may be executed in several counterparts. Section 14.06. Applicable Law This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. Section 14.07. Captions. The captions or heading in the Agreement are for convenience only and no way define, limit or describe the scope or intent of any provisions or sections of this Agreement. Section 14.08. Entire Agreement. This Agreement constitutes the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of this Agreement shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein regarding this Agreement or the Equipment leased hereunder. Any terms and conditions of any purchase order or other document (with the exception of Supplements) submitted by Lessee in connection with this Agreement which are in addition to or inconsistent with the terms and conditions of this Agreement will not be binding on Lessor and will not apply to this Agreement. Lessee by the signature below of its authorized representative acknowledges that it has read this Agreement, understands it and agrees to be bound by its terms and conditions. Section 14.09 Notwithstanding any other provision in this Agreement to the contrary, nothing in this Agreement shall be construed to obligate Lessor to any obligations in excess of those that would be found in any commercial loan transaction where Lessor was acting as a lender instead as a Lessor. Additionally, Lessee shall execute and deliver to Lessor , upon Lessor's request, such instruments and assurances as Lessor deems necessary or advisable for the confirmation or performance of this Agreement and Lessor's rights hereunder and to enable Lessor to fulfill of its statutory and regulatory obligations. EQNBQESC2/95.PR1 ARTICLE XV DEFEASANCE Section 15.01. Defeasance The Lessee's obligation to pay the Purchase Price will be deemed to be paid and the Lessee's obligations under this Agreement will be discharged and satisfied upon the deposit by the Lessee with the Lessor of (a) moneys sufficient to pay the Purchase Price or (b) obligations which are directly insured or guaranteed by the United States or, with the prior written consent of the Lessor, any other obligations in which any sinking fund for bonds issued by the Lessee may legally be invested, the principal of and interest on which when due will provide sufficient moneys for such payment. IN WITNESS WHEREOF, Lessor has executed this Agreement in its corporate name, attested by its duly authorized officers, and Lessee has caused this Agreement to be executed in its corporate name, attested by its duly authorized officers. All of the above occurred as of the date first written on the heading hereof. LESSOR: / Minnequa Bank Attest: By: By: Title. Title: Attest: LESSEE: By: By: Title: Ci Clerk Title: Vice ident City o //� 11tj President of the City Council EQNBQESC2/9iPRI EXHIBIT C CERTIFICATE OF LESSEE I, Gina Dutcher am a duly authorized representative and acting Secretary or Clerk of the named Lessee under that certain Municipal Lease and Option Agreement dated June 28, 2000 with Minnequa Bank as Lessor (the "Agreement ") hereby certify as follows and in accordance with the requirements of the Agreement. Capitalized terms used herein have the same meaning as in the Agreement: A. INCUMBENCY OF OFFICERS AND SIGNATURES: I have custody of the records of Lessee and the following officers of the Lessee are duly elected or appointed and hold the office or title set forth opposite each individual's name, and the signatures opposite their names are true and correct, and where required, have been filed with the appropriate officials of the State, and each such individual has the authority to enter into the Agreement on behalf of1he Lessee: Name Title /Office / S' ture Corinne Koehler President of the City Counci // l t B. ESSENTIAL USE: The Equipment will be used by the Lessee for the following governmental purpose of Police 2. The Equipment is essential for the functioning of the Lessee and is immediately needed by the Lessee. Such need is neither temporary nor expected to diminish during the Lease Term. The Equipment is expected to be used by the Lessee for a period in excess of the Lease Term. C. CERTIFICATE OF APPROPRIATIONS: 1. Monies for all rental payments to be made under the Lease for the fiscal year ending DVF e7c-4% bR. 31 2000 are available from unexhausted and unencumbered appropriations and /or funds within Lessee's budget for such fiscal year; and that appropriations and /or funds have been designated for the payment of those rental payments that may come due under the Agreement in such fiscal year. D. SECTION 265(b)(3) MATTERS: 1. Lessee (a) maintains a register or list of Exempt Government Obligations, (b) files when required Form 8038G or Form 8038 GC, and a therefore can certify that the total Exempt government Obligations issued to date in the current calendar year, including the Agreement, is less than $10,000,000 and hereby designates the Agreement as a Qualified Tax Exempt Obligation pursuant to Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. This Certificate is based upon facts, circumstances, estimates and expectations of the Lessee as of the date on which the Agreement was executed, and to the best of my knowledge and belief, as of this date, such facts, circumstances and estimates are true and correct and such expectations are reasonable. IN WITNESS WHEREOF, I have executed and delivered this certificate as of the 28 day of Ju ne 20 City Pueblo Secret Clerk EQNBQESC2/95.PRI EXHIBIT D DESCRIPTION OF THE EQUIPMENT EQUIPMENT: EQUIPMENT LOCATION: 1 Central Main Street Pueblo, Colorado 81003 City of P t(v B y � 'V Title: President of the City Council Date: June 28, 2000 EQNBQESC2 /95 PRl EXHIBIT E -CITY OF PUEBLO LEASE AGREEMENT MINNEQUA BANK MUNICIPAL LEASE AND OPTION AGREEMENT Compound Period ........: Annual Nominal Annual Rate...: 5.660 % Effective Annual Rate..: 5.660 % Periodic Rate ...............: 5.660 % Daily Rate ...................: 0.01551 % CASH FLOW DATA Event Start Date Amount Number Period End Date 1 Loan 6/28/2000 1,107,000.00 1 3 Payment 2/01/2001 402,658.50 3 Annual 2/01/2003 AMORTIZATION SCHEDULE - Normal Amortization Date Payment Interest Principal Balance Loan 2000 Totals 6/28/2000 0.00 0.00 0.00 1,107,000.00 2001 Totals 1 2/01/2001 402,658.50 37,422.06 365,236.44 741,763.56 2002 Totals 2 2/02/2002 402,658.50 2003 Totals 3 2/02/2003 402,658.51 Grand Totals 1,207,975.51 41,983.82 360,674.68 381,088.88 21,569.63 381,088.88 0.00 100,975.51 1,107,000.00 EXHIBIT F ACCEPTANCE CERTIFICATE To Lessor: Minnequa Bank 401 W. Northern Avenue Pueblo, CO 81004 In accordance with the terms of the Municipal Lease and Option Agreement dated June 28, 2000 (the "Lease ") between Minnequa Bank ( "Lessor "), and the City of Pueblo ( "Lessee "), Lessee hereby certifies and represents to, and agrees with, Lessor as follows: 1. The Equipment, as such term is defined in the Lease, has been delivered and installed at the Equipment Location specified in Exhibit D - Description of the Equipment to the Lease and accepted on the date indicated below. 2. Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes. 3. No Event of Default, as such term is defined in the Lease, and no event which with notice or lapse of time, or both, would become an Event of Default, has occurred and is continuing at the date hereof. Lessee: City eblo B } Title: Presid of the City Council Date: June 28, 2000 EQNQQESC2 /95. PRI EXHIBIT G INSURANCE COVERAGE REQUIREMENTS TO: Minnequa Bank 401 W. Northern Avenue Pueblo, CO 81004 FROM: City of Pueblo One City Hall Place Pueblo, CO 81002 SUBJECT: INSURANCE COVERAGE REQUIREMENTS 1. In accordance with Article VIII, Section 8.03 of the Agreement, we have instructed the insurance agent named below (please fill in name, address and telephone number) Ralph Williams SCA Insurance Steel City Agenci 14 W. 4 th Street Pueblo, CO 81004 719 - 544 -2533 to issue: a. All Risk Physical Damage Insurance on the leased equipment evidenced by a Certificate of Insurance and Long Form Loss Payable Clause naming Minnequa Bank and Trust as loss payee. Coverage Required: Full Replacement Value b. Public Liability Insurance evidence by a Certificate of Insurance naming Minnequa Bank and Trust and /or its assigns as an Additional Insured. Minimum Coverage Required: $500,000.00 per person $500,000.00 aggregate bodily injury liability $100,000.00 property damage liability OR (check one) X 2. Pursuant to Article VIII, Section 8.03 of the Agreement, we are self - insured for all risk, physical damage, and public liability and will provide proof of such self - insurance in letter form together with a copy of the statute authorizing this form of insurance. 3. Proof of insurance coverage will be provided prior to the time that the equipment is delivered to us. City of Pueb By: Title: President of the City Council Dated: June 28. 20 EQNBQESC2/95.PR1