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Home My WebLink About12067 RESOLUTION NO 12067 A RESOLUTION APPROVING A LEASE /PURCHASE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HSE LEASING LLC FOR WALKING STICK GOLF COURSE IRRIGATION SYSTEM, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE COUNCIL, AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND AUTHORIZING ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS RESOLUTION WHEREAS, Pueblo, a Municipal Corporation ( the "City ") is a Colorado home rule city organized and existing under and by virtue of Article XX of the Colorado Constitution, and is authorized thereby to purchase and lease personal property for its municipal purposes including recreation for the benefit of City and its inhabitants and to enter into contracts with respect thereto, and WHEREAS, City desires to purchase, acquire and lease certain irrigation equipment and system and related components (hereinafter, the "System ") for use at its Walking Stick Municipal Golf Course, and WHEREAS, in order to acquire the System, City proposes to enter into a Lease /Purchase Agreement with HSE Leasing LLC (the "Lessor ") and ancillary documents and exhibits, in substantially the form as attached hereto (the "Lease /Purchase Agreement "), and WHEREAS, The City has determined that the leasing of the System is for a valid public recreation purpose, and WHEREAS, the City has reviewed the form of the Lease /Purchase Agreement and has found the terms and conditions thereof acceptable to the Lessee, and WHEREAS, either there are no legal bidding requirements under applicable law to arrange for the leasing of the System under the Lease /Purchase Agreement, or the City of Pueblo has taken the steps necessary to comply with the same with respect to the Lease /Purchase Agreement. BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The form, terms and provisions of the Lease /Purchase Agreement and its attachments and Exhibits, are hereby approved in substantially the form attached hereto with such insertions, omissions and changes as shall be approved by the President of City Council and the City Attorney, the execution of such documents being conclusive evidence of such approval, and the President of the City Council is hereby authorized and directed to execute the Lease /Purchase Agreement and any related Exhibits attached thereto and to deliver the Agreement, and the City Clerk is authorized and directed to attest same and affix the seal of the City thereto SECTION 2. The City Manager is authorized and directed to take all action necessary or reasonably required by the parties to the Lease Purchase Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of any necessary acceptance certificates, payment requests, assignment of contracts and bonds for the System or other certifications required or contemplated by the Lease /Purchase 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 and such Equipment Schedule and Addendum SECTION 3. The Lease/ Purchase Agreement and all lease and other payments thereunder are expressly made subject to sufficient appropriations being made therefore in each fiscal year after 2011 Nothing contained in this Resolution, the Lease /Purchase Agreement, and attachments and Exhibits thereto and any other instrument executed in connection therewith, shall be construed with respect to the City as incurring a pecuniary liability or charge upon the general credit of the City or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease /Purchase Agreement or attachments or Exhibits thereto or any other instrument or document executed in connection therewith impose any pecuniary liability upon the City or any charge upon its general credit or against its taxing power, except to the extent that the rental payments payable under the Lease /Purchase Agreement are special limited obligations of the Lessee as provided in such Lease Nothing in the Lease /Purchase Agreement or such attachments and Exhibits is intended, nor shall it be construed, to create any multiple - fiscal year direct or indirect debt or other financial obligation whatsoever of the City SECTION 4. The City Manager and Director of Finance of the City are each hereby designated to act as authorized representatives of the City for purposes of the Lease /Purchase Agreement and such attachments and Exhibits and until such time as the City Council shall designate any other or different authorized representative for purposes of the Lease /Purchase Agreement, such attachments and Exhibits SECTION 5. This Resolution shall be effective immediately upon passage and approval 00 INTRODUCED January 24, 2011 . i BY Larry Atencio ° d II U IL PERSON rz APPROVED L,., /l 1 . :_ PRES IE f OF CITY COUNCIL ATTESTED B 11111 &u, j ITY CLERK Background Paper for Proposed RESOLUTION DATE: JANUARY 24, 2011 AGENDA ITEM # M-8 DEPARTMENT: PARKS AND RECREATION CREIGHTON WRIGHT, DIRECTOR PLANNING AND COMMUNITY DEVELOPMENT JERRY M. PACHECO, DIRECTOR TITLE A RESOLUTION APPROVING A LEASE/PURCHASE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HSE LEASING, LLC FOR WALKING STICK GOLF COURSE IRRIGATION SYSTEM, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE COUNCIL, AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND AUTHORIZING ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS RESOLUTION ISSUE Should the City Council approve a Lease/Purchase Agreement between the City of Pueblo and HSE Leasing, LLC for the Walking Stick Golf Course Irrigation System? RECOMMENDATION Approval of the Resolution. BACKGROUND On December 2, 2010 the City received two (2) proposals from financial institutions vying to provide funding for the Walking Stick Golf Course Irrigation Replacement project (RFP No. 10-098). A selection committee, which was made up of Sam Azad, and Dave Lewis, reviewed the proposals and selected HSE Leasing, LLC (Leasource Financial Services, Inc. for Colorado Business Bank) as the company to provide lease- purchase financing for the replacement irrigation system for Walking Stick Golf Course. FINANCIAL IMPACT Funds in the amount not to exceed $1,700,000 will be provided through the lease/purchase agreement to the City of Pueblo. The total cost of the lease/purchase is agreement is $2,297,745.72 based on an annual percentage rate of 4.97%. The City will pay $191,478.81 per year in lease payments that will be paid out of the golf courses’ annual operating budget beginning January 24, 2011. Payment of the annual lease payments is expressly contingent upon the availability of annual appropriation therefore by the City Council. In the event of non-appropriation of funds in any given year, it shall not constitute a default under the lease purchase and the City will not be responsible for payment of further lease payments under the lease/purchase agreement. However, in such event, the irrigation system will be surrendered to the leasing company. $1,700,000 Pueblo, a Municipal Corporation Lease Purchase Agreement 1 Lease /Purchase Agreement of the City of Pueblo 2 Exhibit A. Calculation of Interest Component 3 Exhibit B Descnption of Leased Property 4 Exhibit C Resolution of Governing Body 5 Exhibit D Opinion of Lessee' s Counsel 6 Exhibit E. Security Documents 7 Exhibit F Delivery and Acceptance Certificate 8 Form 8038 -G 9 Notice of Assignment LEASE /PURCHASE AGREEMENT Dated as of January 31 2011 by and between HSE Leasing LLC as Lessor and Pueblo, a Municipal Corporation, as Lessee TABLE OF CONTENTS ARTICLE I ARTICLE VIII DEFINITIONS AND EXHIBITS PREPAYMENT OF LEASE PAYMENTS IN PART SECTION 1 1 Definitions and Rules of Construction 1 SECTION 8.1 Extraordinary Prepayment From Net Proceeds 1 SECTION 1.2 Exhibits 2 SECTION 8.2 Option to Purchase Leased Property 15 ARTICLE II ARTICLE IX REPRESENTATIONS COVENANTS AND WARRANTIES NIISCELLANEOUS SECTION 2.1 Representations, Covenants and Warranties of the Lessee 2 SECTION 9 1 Notices. 15 SECTION 2.2 Representations, Covenants and Warranties of HSE. 8 SECTION 9 2 System of Registration. 16 SECTION 9 4 Binding Effect. 16 SECTION 9.5 Amendments 16 ARTICLE III SECTION 9.6 Section Headings 16 SECTION 9 7 Severability 16 AGREEMENT TO LEASE, TERM OF SECTION 9.8 Entire Agreement 16 SECTION 9 9 Execution in Counterparts 17 LEASE, LEASE PAYMENTS SECTION 9 10 Arbitration 17 SECTION 9 I 1 Applicable Law 17 SECTION 3 1 Lease 8 SECTION 3.2 Term 8 Schedule of Lease Payments. .Exhibit A SECTION 3 3 Termination 8 Legal Description of the Leased Property Exhibit B SECTION 3 4 Lease Payments 9 Resolution of Governing Body Exhibit C SECTION 3.5 Possession of Leased Property Upon Termination 9 Opinion of Lessee s Counsel Exhibit D SECTION 3.6 No Withholding 9 Security Documents .Exhibit E SECTION 3 7 Lease Payments to Constitute a Current Obligation of the Delivery and Acceptance Certificate. .Exhibit F Lessee 9 SECTION 3.8 Net Lease 9 SECTION 3.9 Offset 10 ARTICLE IV INSURANCE SECTION 4 1 insurance 10 SECTION 4.2 Damage to or Destruction of the Leased Property 10 ARTICLE V COVENANTS SECTION 5 1 Use of the Leased Property 11 SECTION 5.2 interest in the Leased Property and this Lease 11 SECTION 5 3 Maintenance, Utilities, Taxes and Assessments 11 SECTION 5 4 Modification of the Leased Property 12 SECTION 5 5 Permits 12 SECTION 5.6 HSE's Right to Perform for Lessee 12 SECTION 5 7 HSE's Disclaimer of Warranties 13 SECTION 5.8 Indemnification 13 SECTION 5.9 Inclusion for Consideration as Budget Itein. 13 SECTION 5 10 Annual Financial Information 13 ARTICLE VI ASSIGNMENT AND SUBLEASING SECTION 6.1 Assignment by FISE 13 SECTION 62 Assignment and Subleasing by the Lessee 13 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES SECTION 7 1 Events of Default Defined. 14 SECTION 7.2 Remedies on Default 14 SECTION 7 3 No Remedy Exclusive 14 SECTION 7 4 Agreement to Pay Attorneys Fees and Expenses. 15 SECTION 7.5 Waiver of Certain Damages 15 LEASE /PURCHASE AGREEMENT THIS LEASE /PURCHASE AGREEMENT, dated as of January 31, 2011 by and between HSE Leasing, LLC, a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, as lessor ( "HSE" or "Lessor "), and Pueblo a Municipal Corporation (the "Lessee "), a home rule city of the State of Colorado (the "State ") duly organized and existing under the Constitution and laws of the State, as lessee; WiTNESSETH WHEREAS, HSE desires to finance the acquisition of the equipment and /or other personal property described as the "Leased Property" in Exhibit B (the "Leased Property") by entering into this Lease /Purchase Agreement with the Lessor (the "Lease"). and WHEREAS, HSE agrees to lease the Leased Property to the Lessee upon the terms and conditions set forth in this Lease, with rental to be paid by the Lessee equal to the Lease Payments hereunder; and WHEREAS, it is the intent of the parties that the original term of this Lease, and any subsequent renewal terms, shall not exceed 12 months, and that the payment obligation of the Lessee shall not constitute a general obligation under State law; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Lease do exist, have happened and have been performed in regular and due time form and manner as required by law and the parties hereto are now duly authorized to execute and enter into this Lease; NOW THEREFORE, in consideration of the above premises and of the mutual covenants hereinafter contained and for other good and valuable consideration, the parties hereto agree as follows ARTICLE I DEFINITIONS AND EXHIBITS SECTION 1 1 Definitions and Rules of Construction. Unless the context otherwise requires, the capitalized terms used herein shall, for all purposes of this Lease, have the meanings specified in the definitions below Unless the context otherwise indicates, words importing the singular number shall include the plural number and vice versa. The terms "hereby ", "hereof' "hereto ", "herein , "hereunder" and any similar terms, as used in this Lease, refer to this Lease as a whole. "Advance" shall have the meaning set forth in Section 2 1(I)(i)(D) hereof "HSE" shall have the meaning set forth in the Preamble hereof "Business Day" means any day except a Saturday, Sunday or other day on which banks in Denver, Colorado or the State are authorized to close "Code" means the Internal Revenue Code of 1986 as amended. "Commencement Date" means the date this Lease is executed by HSE and the Lessee "Event of Nonappropriation" shall have the meaning set forth in Section 3.2 hereof "Governing Body" means the governing body of the Lessee "Lease Payments" means the rental payments described in Exhibit A hereto "Lease Payment Date" shall have the meaning set forth in Section 3 4(a) hereof "Leased Property" shall have the meaning set forth in the Whereas clauses hereof "Lessee" shall have the meaning set forth in the Preamble hereof "Net Proceeds" means insurance or eminent domain proceeds received with respect to the Leased Property less expenses incurred in connection with the collection of such proceeds "Obligation Instrument" shall have the meaning set forth in Section 2 1(c) hereof "Original Term shall have the meaning set forth in Section 3.2 hereof "Permitted Encumbrances" means, as of any particular time (1) liens for taxes and assessments, if any, not then delinquent, or which the Lessee may, pursuant to provisions of Section 5.3 hereof, permit to remain unpaid, (ii) this Lease, (iii) any contested right or claim of any mechanic, laborer materialman, supplier or vendor filed or perfected in the manner prescribed by law to the extent permitted under Section 5 4(b) hereof; (iv) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the execution date of this Lease and which the Lessee hereby certifies will not materially impair the use of the Leased Property by the Lessee; and (v) other rights, reservations, covenants, conditions or restrictions established following the date of execution of this Lease and to which HSE and the Lessee consent in writing. "Rebate Exemption" shall have the meaning set forth in Section 2 1(1)(11)(A) hereof "Regulations" shall have the meaning set forth in Section 2 1(I)(i) hereof "Renewal Term" shall have the meaning set forth in Section 3.2 hereof "Scheduled Term" shall have the meaning set forth in Section 3.2 hereof "State" shall have the meaning set forth in the Preamble hereof 'Term or `Term of this Lease" means the Original Term and all Renewal Terms provided for in this Lease under Section 3.2 until this Lease is terminated as provided in Section 3.3 hereof SECTION 1.2 Exhibits. Exhibits A, B, C D, E and F attached to this Lease are by this reference made a part of this Lease. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES SECTION 2 1 Representations, Covenants and Warranties of the Lessee The Lessee represents, covenants and warrants to HSE as follows. (a) Due Organization and Existence The Lessee is a home rule city and political subdivision of the State duly organized and existing under the Constitution and laws of the State (b) Authorization, Enforceability The Constitution and laws of the State authorize the Lessee to enter into this Lease and to enter into the transactions contemplated by and to carry out its obligations under, this Lease. The Lessee has duly authorized, executed and delivered this Lease in accordance with the Constitution and laws of the State This Lease constitutes the legal, valid and binding special obligation of the Lessee enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles affecting the rights of creditors generally, and subject further to lawful appropriations therefore being made in fiscal years subsequent to 2011 (c) No Conflicts or Default; Other Liens or Encumbrances Neither the execution and delivery of this Lease nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation of the transactions contemplated hereby (i) conflicts with or results in a breach of the terms, conditions, provisions, or restrictions of any existing law, or court or administrative decree, order, or regulation, or agreement or instrument to which the Lessee is now a party or by which the Lessee is bound, including without limitation any agreement or instrument pertaining to any bond, note, lease, certificate of participation, debt instrument, or any other obligation of the Lessee (any such bond, note, lease, certificate of participation, debt instrument, and other obligation being referred to herein as an "Obligation Instrument "), (ii) constitutes a default under any of the foregoing, or (iii) results in the creation or imposition of any pledge, lien, charge or encumbrance whatsoever upon any of the property or assets of the Lessee, or upon the Leased Property except for Permitted Encumbrances. By way of example, and not to be construed as a limitation on the representations set forth in the immediately preceding paragraph (A) no portion of the Leased Property is pledged to secure any Obligation Instrument; and (B) the interests of the Lessor in the Leased Property hereunder do not violate the terms, conditions or provisions of any restriction or revenue pledge in any agreement or instrument pertaining to any Obligation Instrument. If any Obligation Instrument existing on the date of execution of this Lease creates any pledge, lien, charge or encumbrance on any revenues, property or assets associated with the Leased Property that is higher in priority to HSE's interests therein under this Lease, HSE hereby subordinates its interests therein, but only to the extent required pursuant to such existing Obligation Instrument. (d) Compliance with Open Meeting Requirements The Governing Body has complied with all applicable open public meeting and notice laws and requirements with respect to the meeting at which the Lessee's execution of this Lease was authorized (e) Compliance with Bidding Requirements. Either there are no procurement or public bidding laws of the State applicable to the acquisition and leasing of the Leased Property pursuant to this Lease, or the Governing Body and the Lessee have complied with all such procurement and public bidding laws as may be applicable hereto (f) No Adverse Litigation To Lessee's actual knowledge, there are no legal or governmental proceedings or litigation pending, or to the best knowledge of the Lessee threatened or contemplated (or any basis therefor) wherein an unfavorable decision, ruling, or finding might adversely affect the transaction contemplated in or the validity of this Lease 3 (g) Opinion of Lessee s Counsel The letter attached to this Lease as Exhibit D is a true opinion of Lessee's counsel (h) Governmental Use of Leased Property During the Term of this Lease, the Leased Property will be used solely by the Lessee, and only for the purpose of performing one or more governmental or proprietary functions of the Lessee consistent with the permissible scope of the Lessee's authority, and the Leased Property will not be subject to any direct or indirect private business use (i) Other Representations and Covenants The representations, covenants, warranties, and obligations set forth in this Article are in addition to and are not intended to limit any other representations, covenants, warranties, and obligations set forth in this Lease (j) No Nonappropriations. The Lessee has never non- appropriated or defaulted under any of its payment or performance obligations or covenants, either under any municipal lease of the same general nature as this Lease, or under any of its bonds, notes, or other obligations of indebtedness for which its revenues or general credit are pledged (k) No Legal Violation The Leased Property is not, and at all times during the Term of this Lease will not be in violation of any federal, state or local law, statute, ordinance or regulation. (1) General Tax and Arbitrage Representations and Covenants. (i) The certifications and representations made by the Lessee in this Lease are intended, among other purposes, to be a certificate permitted in Section 1 148 -2(b) of the Treasury Regulations promulgated pursuant to Section 148 of the Code (the "Regulations "), to establish the reasonable expectations of the Lessee at the time of the execution of this Lease made on the basis of the facts, estimates and circumstances in existence on the date hereof The Lessee further certifies and covenants as follows. (A) The Lessee has not been notified of any disqualification or proposed disqualification of it by the Commissioner of the Internal Revenue Service as an issuer which may certify bond issues. (B) To the best knowledge and belief of the Lessee, there are no facts, estimates or circumstances that would materially change the conclusions, certifications or representations set forth in this Lease, and the expectations herein set forth are reasonable (C) The Scheduled Term of this Lease does not exceed the useful life of the Leased Property and the weighted average term of this Lease does not exceed the weighted average useful life of the Leased Property (D) Each advance of funds by VISE to finance Leased Property under this Lease (each an "Advance ") will occur only when and to the extent that the Lessee has reasonably determined and identified the nature, need, and cost of each item of Leased Property pertaining to such Advance (E) No use will be made of the proceeds of this Lease or any such Advance, or any funds or accounts of the Lessee which may be deemed to be proceeds of this Lease or any such Advance, which use, if it had been reasonably 4 expected on the date of the execution of this Lease or of any such Advance, would have caused this Lease or any such Advance to be classified as an "arbitrage bond" within the meaning of Section 148 of the Code (F) The Lessee will at all times comply with the rebate requirements of Section 148(f) of the Code as they pertain to this Lease, to the extent applicable (G) In order to preserve the status of this Lease and the Advances as other than "private activity bonds" as described in Sections 103(b)(1) and 141 of the Code, as long as this Lease and any such Advances are outstanding and unpaid. (I) none of the proceeds from this Lease or the Advances or any facilities or assets financed therewith shall be used for any "private business use" as that tern is used in Section 141(b) of the Code and defined in Section 141(b)(6) of the Code, (II) the Lessee will not allow any such "private business use" to be made of the proceeds of this Lease or the Advances or any facilities or assets financed therewith, and (III) none of the Advances or Lease Payments due hereunder shall be secured in whole or in part, directly or indirectly, by any interest in any property used in any such "private business use" or by payments in respect of such property, and shall not be derived from payments in respect of such property (H) The Lessee will not take any action, or omit to take any action, which action or omission would cause the interest component of the Lease Payments to be ineligible for the exclusion from gross income as provided in Section 103 of the Code. (I) The Lessee is a "governmental unit" within the meaning of Section 141(b)(6) of the Code (J) The obligations of the Lessee under this Lease are not federally guaranteed within the meaning of Section 149(b) of the Code (K) This Lease and the Advances to be made pursuant hereto will not reimburse the Lessee for any expenditures incurred prior to the date of this Lease and do not constitute a "refunding issue" as defined in Section 1 150 -1(d) of the Regulations, and no part of the proceeds of this Lease or any such Advances will be used to pay or discharge any obligations of the Lessee the interest on which is or purports to be excludable from gross income under the Code or any predecessor provision of law (L) In compliance with Section 149(e) of the Code relating to information reporting, the Lessee will file or cause to be filed with the internal Revenue Service Center Ogden, UT 84201, within fifteen (15) days from the execution of this Lease, IRS Form 8038 -G or 8038 -GC, as appropriate, reflecting the total aggregate amount of Advances that can be made pursuant to this Lease 5 (M) None of the proceeds of this Lease or the Advances to be made hereunder will be used directly or indirectly to replace funds of the Lessee used directly or indirectly to acquire obligations at a yield materially higher than the yield on this Lease or otherwise invested in any manner No portion of the Advances will be made for the purpose of investing such portion at a materially higher yield than the yield on this Lease (N) Inasmuch as Advances will be made under this Lease only when and to the extent the Lessee reasonably determines, identifies and experiences the need therefor, and will remain outstanding and unpaid only until such time as the Lessee has moneys available to repay the same, the Lessee reasonably expects that (I) the Advances will not be made sooner than necessary (II) no proceeds from the Advances will be invested at a yield higher than the yield on this Lease, and (III) the Advances and this Lease will not remain outstanding and unpaid longer than necessary (0) The Lessee will either (i) spend all of the moneys advanced pursuant to this Lease immediately upon receipt thereof, without investment, on the portion of the Leased Property that is to be financed thereby; or (ii) invest such moneys at the highest yield allowable and practicable under the circumstances until they are to be spent on the portion of the Leased Property that is to be financed thereby, and track, keep records of, and pay to the United States of America, all rebatable arbitrage pertaining thereto, at the times, in the amounts, in the manner, and to the extent required under Section 148(f) of the Code and the Treasury Regulations promulgated in connection therewith At least five percent (5 %) of the total amount of moneys that are expected to be advanced pursuant to this Lease are reasonably expected to have been expended on the Leased Property within six (6) months from the date of this Lease All moneys to be advanced pursuant to this Lease are reasonably expected to have been expended on the Leased Property no later than the earlier of (I) the date twelve (12) months from the date such moneys are advanced, and (II) the date three (3) years from the date of this Lease (P) This Lease and the Advances to be made hereunder are not and will not be part of a transaction or series of transactions that attempts to circumvent the provisions of Section 148 of the Code and the regulations promulgated in connection therewith (I) enabling the Lessee to exploit the difference between tax - exempt and taxable interest rates to gain a material financial advantage, and (II) overburdening the tax - exempt bond market, as those terms are used in Section 1 148- 10(a)(2) of the Regulations. (Q) To the best of the knowledge, information and belief of the Lessee, the above expectations are reasonable On the basis of the foregoing, it is not expected that the proceeds of this Lease and the Advances to be made hereunder will be used in a manner that would cause this Lease or such Advances to be "arbitrage bonds" under Section 148 of the Code and the regulations promulgated thereunder, and to the best of the knowledge, information and belief of the Lessee, there are no other facts, estimates or circumstances that would materially change the foregoing conclusions (ii) Arbitrage Rebate Under Section 148(f) of the Code With respect to the arbitrage rebate requirements of Section 148(f) of the Code, either (check applicable box) 6 (A) Lessee Qualifies for Small Issuer Exemption from Arbitrage Rebate The Lessee hereby certifies and represents that it qualifies for the exception contained in Section 148(f)(4)(D) of the Code from the requirement to rebate arbitrage earnings from investment of proceeds of the Advances made under this Lease (the "Rebate Exemption ") as follows (1) The Lessee has general taxing powers (2) Neither this Lease, any Advances to be made hereunder, nor any portion thereof are private activity bonds as defined in Section 141 of the Code ( "Private Activity Bonds "). (3) Ninety -five percent (95 %) or more of the net proceeds of the Advances to be made hereunder are to be used for local government activities of the Lessee (or of a governmental unit, the jurisdiction of which is entirely within the jurisdiction of the Lessee) (4) Neither the Lessee nor any aggregated issuer has issued or is reasonably expected to issue any tax - exempt obligations other than Private Activity Bonds (as those terms are used in Section 148(f)(4)(D) of the Code) during the current calendar year, including the Advances to be made hereunder, which in the aggregate would exceed $5,000,000 in face amount, or $15,000 000 in face amount for such portions, if any, of any tax - exempt obligations of the Lessee and any aggregated issuer as are attributable to construction of public school facilities within the meaning of Section 148(f)(4)(D)(vii) of the Code For purposes of this Section, "aggregated issuer" means any entity which (a) issues obligations on behalf of the Lessee, (b) derives its issuing authority from the Lessee, or (c) is subject to substantial control by the Lessee The Lessee hereby certifies and represents that it has not created, does not intend to create and does not expect to benefit from any entity formed or availed of to avoid the purposes of Section 148(f)(4)(D)(i)(IV) of the Code Accordingly, the Lessee will qualify for the Rebate Exemption granted to governmental units issuing less than $5,000,000 under Section 148(f)(4)(D) of the Code ($15,000,000 for the financing of public school facilities construction as described above), and the Lessee shall be treated as meeting the requirements of Paragraphs (2) and (3) of Section 148(f) of the Code relating to the required rebate of arbitrage earnings to the United States with respect to this Lease and the Advances to be made hereunder - or - X (B) Lessee Will Keep Records of and Will Rebate Arbitrage. The Lessee does not qualify for the small issuer Rebate Exemption described above, and the Lessee hereby certifies and covenants that it will account for, keep the appropriate records of, and pay to the United States, the rebate amount, if any earned from the investment of gross proceeds of this Lease and the Advances to 7 be made hereunder, at the times, in the amounts, and in the manner prescribed in Section 148(0 of the Code and the applicable Regulations promulgated with respect thereto (m) [This Lease - Purchase Agreement is not a bank - qualified transaction ] SECTION 2.2 Representations, Covenants and Warranties of HSE. HSE is duly organized, existing and in good standing under and by virtue of the laws of the state of Delaware, has the power to enter into this Lease, is possessed of full power to own and hold real and personal property and to lease and sell the same, and has duly authorized the execution and delivery of this Lease. This Lease, constitutes the legal, valid and binding obligation of HSE, enforceable in accordance with its terms, except to the extent limited by applicable bankruptcy, insolvency reorganization, moratorium or similar laws or equitable principles affecting the rights of creditors generally ARTICLE i11 AGREEMENT TO LEASE, TERM OF LEASE, LEASE PAYMENTS SECTION 3 1 Lease HSE hereby leases the Leased Property to the Lessee, and the Lessee hereby leases the Leased Property from HSE, upon the terms and conditions set forth herein Concurrently with its execution of this Lease, the Lessee shall deliver to HSE fully completed documents substantially in the forms attached hereto as Exhibits B C DE and F hereto SECTION 3.2 Term. The Term of this Lease shall commence on the date of execution of this Lease, including delivery to HSE by the Lessee of fully completed documents in the forms set forth in Exhibits B, C, D and E attached hereto, and continue until the end of the fiscal year of Lessee in effect at the Commencement Date (the "Original Term ") Thereafter, this Lease will be extended for [term] successive additional periods of one year coextensive with Lessee's fiscal year, except for the last such period which may be less than a full fiscal year, (each, a "Renewal Term ") subject to an Event of Nonappropriation as described herein below in this Section 3.2 and in Section 3.3(a), with the final Renewal Term ending on [maturity date], unless this Lease is terminated as hereinafter provided The Original Term together with all scheduled Renewal Terms shall be referred to herein as the "Scheduled Term" irrespective of whether this Lease is terminated for any reason prior to the scheduled commencement or termination of any Renewal Term as provided herein If Lessee does not budget and appropriate funds for the payment of Lease Payments due for any Renewal Term in the adopted budget of the Lessee for the applicable fiscal year (an "Event of Nonappropriation "), this Lease will terminate upon the expiration of the Original or Renewal Term then in effect and Lessee shall notify HSE of such termination at least ten (10) days prior to the expiration of the Original or Renewal Term then in effect. SECTION 3.3 Termination. This Lease will terminate upon the earliest of any of the following events. (a) upon the expiration of the Original Term or any Renewal Term of this Lease following an Event of Nonappropriation (b) the exercise by Lessee of any option to purchase granted in this Lease by which Lessee purchases all of the Leased Property; 8 (c) a default by Lessee and HSE's election to terminate this Lease under Article VII herein, or (d) the expiration of the Scheduled Term of this Lease, the Lessee having made payment of all Lease Payments accrued to such date SECTION 3 4 Lease Payments. (a) Time and Amount. During the Term of this Lease and so long as this Lease has not terminated pursuant to Section 3.3, the Lessee agrees to pay to HSE, its successors and assigns, as annual rental for the use and possession of the Leased Property, the Lease Payments (denominated into components of principal and interest) in the amounts specified in Exhibit A, to be due and payable in arrears on each payment date identified in Exhibit A (or if such day is not a Business Day, the next succeeding Business Day) specified in Exhibit A (the "Lease Payment Date ") (b) Rate on Overdue Payments. In the event the Lessee should fail to make any of the Lease Payments required in this Section, the Lease Payment in default shall continue as an obligation of the Lessee until the amount in default shall have been fully paid, and the Lessee agrees to pay the same with interest thereon, to the extent permitted by law, from the date such amount was originally payable at the rate equal to the original interest rate payable with respect to such Lease Payments. (c) Additional Payments. Any additional payments required to be made by the Lessee hereunder, including but not limited to Sections 4 1, 5.3, and 7 4 of this Lease, shall constitute additional rental for the Leased Property SECTION 3 5 Possession of Leased Property Upon Termination Upon termination of this Lease pursuant to Sections 3.3(a) or 3.3(c), the Lessee shall transfer the Leased Property to the HSE in such manner as may be specified by HSE, and HSE shall have the right to take possession of the Leased Property by virtue of HSE s ownership interest as lessor of the Leased Property, and the Lessee at HSE's direction shall ship the Leased Property to the destination designated by HSE by loading the Leased Property at the Lessee s cost and expense, on board such carrier as the HSE shall specify SECTION 3 6 No Withholding. Notwithstanding any dispute between HSE and the Lessee, including a dispute as to the failure of any portion of the Leased Property in use by or possession of the Lessee to perform the task for which it is leased, the Lessee shall make all Lease Payments when due and shall not withhold any Lease Payments pending the final resolution of such dispute. SECTION 3 7 Lease Payments to Constitute a Current Obligation of the Lessee. Notwithstanding any other provision of this Lease, the Lessee and HSE acknowledge and agree that the obligation of the Lessee to pay Lease Payments hereunder during the Original Term constitutes a current special obligation of the Lessee payable exclusively from current and legally available funds and shall not in any way be construed to be an indebtedness of the Lessee within the meaning of any constitutional or statutory limitation or requirement applicable to the Lessee concerning the creation of indebtedness. The Lessee has not hereby pledged the general tax revenues or credit of the Lessee to the payment of the Lease Payments, or the interest thereon, nor shall this Lease obligate the Lessee to apply money of the Lessee to the payment of Lease Payments beyond the then current Original Tenn or Renewal Term, as the case may be, or any interest thereon SECTION 3 8 Net Lease. This Lease shall be deemed and construed to be a "net- net -net lease" and the Lessee hereby agrees that the Lease Payments shall be an absolute net return to HSE, free and clear of any expenses, charges or set -offs whatsoever except as expressly provided herein. 9 SECTION 3 9 Offset. Lease Payments or other sums payable by Lessee pursuant to this Lease shall not be subject to set -off, deduction, counterclaim or abatement and Lessee shall not be entitled to any credit against such Lease Payments or other sums for any reason whatsoever, including, but not limited to (i) any accident or unforeseen circumstances, (ii) any damage or destruction of the Leased Property or any part thereof; (iii) any restriction or interference with Lessee's use of the Leased Property, (iv) any defects, breakdowns, malfunctions, or unsuitability of the Leased Property or any part thereof; or (v) any dispute between the Lessee and HSE, any vendor or manufacturer of any part of the Leased Property, or any other person ARTICLE IV INSURANCE SECTION 4 1 Insurance. Lessee, at HSE's option, will either self insure, or at Lessee's cost, will cause casualty insurance, commercial general liability insurance, and property damage insurance to be carried and maintained on the Leased Property, with all such coverages to be in such amounts sufficient to cover the value of the Leased Property at the commencement of this Lease (as determined by the purchase price paid for the Leased Property), and to be in such forms, to cover such risks, and with such insurers, as are customary for public entities such as the Lessee A combination of self - insurance, a pooling arrangement and policies of insurance may be utilized. If Lessee elects the pooling arrangement, Lessee may cover the Leased Property by means of participation in the Colorado Intergovernmental Risk Sharing Agency ( "CIRSA ") with coverage through CIRSA on the Leased Property for direct physical loss or damage covered by or resulting from a "covered cause of Toss ", in an amount not less than the full replacement cost of Leased Property, and which will be described in a letter delivered to Lessor in a form acceptable to Lessor; such coverage may provide for a deductible or retention to be paid by Lessee in an amount not to exceed $25,000 00 If policies of insurance are obtained, Lessee will cause HSE to be the named insured on such policies as its interest under this Lease may appear Subject to Section 4.2, insurance proceeds from insurance policies or budgeted amounts from self - insurance as relating to casualty and property damage losses will, to the extent permitted by law, be payable to HSE in an amount equal to the then outstanding principal and accrued interest components of the Lease Payments at the time of such damage or destruction as provided by Section 8 1 Lessee will deliver to HSE the policies or evidences of coverage satisfactory to HSE, if any, together with receipts for the initial premiums before the Leased Property is delivered to Lessee. Renewal policies, if any together with receipts showing payment of the applicable premiums will be delivered to HSE at least thirty (30) days before termination of the policies being renewed. By endorsement upon the policy or by independent instrument furnished to HSE, such insurer will agree that it will give HSE at least thirty (30) days' written notice prior to cancellation or alteration of the policy Lessee will carry workmen's compensation insurance covering all employees working on, in, or about the Leased Property, and will require any other person or entity working on, in, or about the Leased Property to carry such coverage, and will furnish to HSE certificates evidencing such coverages throughout the Term of this Lease SECTION 4.2 Damage to or Destruction of the Leased Property If all or any part of the Leased Property is lost, stolen, destroyed, or damaged, Lessee will give HSE prompt notice of such event and will to the extent permitted by law, repair or replace the same at Lessee's cost. If such lost, stolen, destroyed or damaged Leased Property is equipment, it shall be repaired or replaced within thirty (30) days after such event. If such lost, stolen, destroyed or damaged Leased Property is other than equipment, it shall be repaired or replaced within one hundred eighty (180) days after such event. Any replaced Leased Property will be substituted in this Lease by appropriate endorsement. All insurance proceeds received by HSE under the policies required under Section 4 1 with respect to the Leased Property lost, stolen, destroyed, or damaged, will be paid to Lessee if the Leased Property is repaired or replaced by Lessee as required by this Section If Lessee fails or refuses to make the required repairs or replacement, such proceeds will be paid to 10 HSE to the extent of the then remaining portion of the Lease Payments to become due during the Scheduled Term of this Lease less that portion of such Lease Payments attributable to interest which will not then have accrued as provided in Section 8 1 No loss, theft, destruction, or damage to the Leased Property will impose any obligation on HSE under this Lease, and this Lease will continue in full force and effect regardless of such loss, theft, destruction, or damage Lessee assumes all risks and liabilities, whether or not covered by insurance, for loss, theft, destruction, or damage to the Leased Property and for injuries or deaths of persons and damage to property however arising, whether such injury or death be with respect to agents or employees of Lessee or of third parties, and whether such damage to property be to Lessee's property or to the property of others. ARTICLE V COVENANTS SECTION 5 1 Use of the Leased Property The Lessee represents and warrants that it has an immediate and essential need for the Leased Property to carry out and give effect to the public purposes of the Lessee, which need is not temporary or expected to diminish in the foreseeable future, and that it expects to make immediate use of all of the Leased Property The Lessee hereby covenants that it will install, use, operate, maintain, and service the Leased Property in accordance with all vendors' instructions and in such a manner as to preserve all warranties and guarantees with respect to the Leased Property The Lessor hereby assigns to the Lessee, without recourse, for the Term of this Lease, all manufacturer warranties and guaranties, express or implied, pertinent to the Leased Property, and the Lessor directs the Lessee to obtain the customary services furnished in connection with such warranties and guaranties at the Lessee's expense; provided, however, that the Lessee hereby agrees that it will reassign to the Lessor all such warranties and guaranties in the event of termination of this Lease pursuant to Sections 3.3(a) or 3.3(c) SECTION 5.2 Interest in the Leased Property and this Lease Upon expiration of the Term as provided in Section 3.3(b) or 3.3(d) hereof, all right, title and interest of the HSE in and to all of the Leased Property shall be transferred to and vest in the Lessee, without the necessity of any additional document of transfer SECTION 5.3 Maintenance, Utilities, Taxes and Assessments. (a) Maintenance; Repair and Replacement. Throughout the Term of this Lease, as part of the consideration for the rental of the Leased Property, all repair and maintenance of the Leased Property shall be the responsibility of the Lessee, and the Lessee shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Leased Property excepting ordinary wear and tear, and the Lessee hereby covenants and agrees that it will comply with all vendors' and manufacturers' maintenance and warranty requirements pertaining to the Leased Property In exchange for the Lease Payments herein provided, the HSE agrees to provide only the Leased Property, as herembefore more specifically set forth. (b) Tax and Assessments, Utility Charges. The Lessee shall also pay or cause to be paid all taxes and assessments, including but not limited to utility charges, of any type or nature charged to the Lessee or levied, assessed or charged against any portion of the Leased Property or the respective interests or estates therein, provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Lessee 11 shall be obligated to pay only such installments as are required to be paid during the Term of this Lease as and when the same become due (c) Contests. The Lessee may at its expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom, provided that prior to such nonpayment it shall furnish the HSE with the opinion of an independent counsel acceptable to the HSE to the effect that, by nonpayment of any such items, the interest of the HSE in such portion of the Leased Property will not be materially endangered and that the Leased Property will not be subject to loss or forfeiture. Otherwise, the Lessee shall promptly pay such taxes, assessments or charges or make provisions for the payment thereof in form satisfactory to the HSE. SECTION 5 4 Modification of the Leased Property (a) Additions, Modifications and Improvements. The Lessee shall, at its own expense, have the right to make additions, modifications, and improvements to any portion of the Leased Property if such improvements are necessary or beneficial for the use of such portion of the Leased Property All such additions, modifications and improvements shall thereafter comprise part of the Leased Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way damage any portion of the Leased Property or cause it to be used for purposes other than those authorized under the provisions of State and federal law or in any way which would impair the exclusion from gross income for federal income tax purposes of the interest components of the Lease Payments, and the Leased Property upon completion of any additions, modifications and improvements made pursuant to this Section, shall be of a value which is not substantially less than the value of the Leased Property immediately prior to the making of such additions, modifications and improvements. (b) No Liens. Except for Permitted Encumbrances, the Lessee will not permit (i) any liens or encumbrances to be established or remain against the Leased Property or (ii) any mechanic's or other lien to be established or remain against the Leased Property for labor or materials furnished in connection with any additions, modifications or improvements made by the Lessee pursuant to this Section, provided that if any such mechanic s lien is established and the Lessee shall first notify or cause to be notified HSE of the Lessee's intention to do so, the Lessee may in good faith contest any lien filed or established against the Leased Property and in such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom and shall provide HSE with full security against any loss or forfeiture which might arise from the nonpayment of any such item, in form satisfactory to HSE. HSE will cooperate fully in any such contest. SECTION 5 5 Permits. The Lessee will provide all permits and licenses necessary for the ownership, possession, operation, and use of the Leased Property and will comply with all laws, rules, regulations, and ordinances applicable to such ownership, possession, operation, and use If compliance with any law, rule, regulation, ordinance, permit, or license requires changes or additions to be made to the Leased Property, such changes or additions will be made by the Lessee at its own expense SECTION 5 6 HSE's Right to Perform for Lessee If the Lessee fails to make any payment or to satisfy any representation, covenant, warranty, or obligation contained herein or imposed hereby the HSE may (but need not) make such payment or satisfy such representation, covenant, warranty or obligation, and the amount of such payment and the expense of any such action incurred by HSE, as the case may be, will be deemed to be additional rent payable by the Lessee on HSE's demand 12 SECTION 5 7 HSE's Disclaimer of Warranties. HSE has played no part in the selection of the Leased Property, the Lessee having selected the Leased Property independently from HSE HSE, at the Lessee s request, has acquired or arranged for the acquisition of the Leased Property and shall lease the same to the Lessee as herein provided, HSE's only role being the facilitation of the financing of the Leased Property for the Lessee HSE MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, QUALITY DURABILITY, SUITABILITY, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE LESSEE OF THE LEASED PROPERTY, OR ANY PORTION THEREOF THE LESSEE ACKNOWLEDGES THAT HSE IS NOT A MANUFACTURER OR VENDOR OF ALL OR ANY PORTION OF THE LEASED PROPERTY AND THAT, AS BETWEEN LESSOR AND LESSEE, THE LESSEE IS LEASING THE LEASED PROPERTY AS IS In no event shall HSE be liable for incidental direct, indirect, special or consequential damages, in connection with or arising out of this Lease, for the existence, furnishing, functioning or Lessee's use and possession of the Leased Property SECTION 5 8 Indemnification. To the extent permitted by applicable law, the Lessee hereby agrees to indemnify and hold harmless HSE, its directors, officers, shareholders, employees, agents, and successors from and against any loss, claim, damage, expense, and liability resulting from or attributable to the acquisition, construction, or use of the Leased Property Notwithstanding the foregoing, HSE shall not be indemnified for any liability resulting from the gross negligence or willful misconduct of HSE SECTION 5 9 Inclusion for Consideration as Budget Item. During the Term of this Lease, the Lessee covenants and agrees that its City Manager shall propose in the budget he prepares, in accordance with Lessee's Charter and applicable law, as an item for expenditure during the Lessee's Governing Body's annual budget considerations, of an amount necessary to pay Lease Payments for the Leased Property during the next succeeding Renewal Term. Nothing herein shall be construed to direct or require that Lessee take or direct that any legislative act be done, or that the Governing Body of Lessee improperly or unlawfully delegate any of its legislative authority Non - appropriation of an amount necessary to pay Lease Payments for the Leased Property for any Renewal Term shall not be deemed an Event of Default. SECTION 5 10 Annual Financial Information During the Term of this Lease, the Lessee covenants and agrees to provide HSE as soon as practicable when they are available (i) a copy of the Lessee's final annual budget for each fiscal year; (ii) a copy of the Lessee's most recent financial statements, and (iii) any other financial reports HSE may request from time to time. ARTICLE VI ASSIGNMENT AND SUBLEASING SECTION 6 1 Assignment by HSE. The parties hereto agree that all rights HSE hereunder may be assigned, transferred or otherwise disposed of, either in whole or in part, including without limitation transfer to a trustee pursuant to a trust arrangement under which the trustee issues certificates of participation evidencing undivided interests in this Lease and /or the rights to receive Lease Payments hereunder, provided that notice of any such assignment, transfer or other disposition is given to Lessee SECTION 6.2 Assignment and Subleasing by the Lessee. The Lessee may not assign this Lease or sublease all or any portion of the Leased Property unless both of the following shall have occurred (i) HSE shall have consented to such assignment or sublease and (ii) HSE shall have received assurance acceptable to HSE that such assignment or sublease (A) is authorized under applicable state law (B) will not adversely affect the validity of this Lease, and (C) will not adversely affect the exclusion from gross income for federal income tax purposes of the interest components of the Lease Payments. 13 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES SECTION 7 1 Events of Default Defined. The following shall be "events of default" under this Lease and the terms "events of default" and "default" shall mean, whenever they are used in this Lease, any one or more of the following events. (a) Payment Default. Failure by the Lessee to pay any Lease Payment required to be paid hereunder by the corresponding Lease Payment Date. (b) Covenant Default. Failure by the Lessee to observe and perform any warranty, covenant, condition or agreement on its part to be observed or performed herein or otherwise with respect hereto other than as referred to in clause (a) of this Section, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the Lessee by HSE, provided, however, if the failure stated in the notice cannot be corrected within the applicable period, HSE shall not unreasonably withhold their 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. (c) Bankruptcy or Insolvency_ The filing by the Lessee of a case in bankruptcy, or the subjection of any right or interest of the Lessee under this Lease to any execution, garnishment or attachment, or adjudication of the Lessee as a bankrupt, or assignment by the Lessee for the benefit of creditors, or the entry by the Lessee into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Lessee in any proceedings instituted under the provisions of the federal bankruptcy code, as amended, or under any similar act which may hereafter be enacted. The foregoing provisions of this Section 7 1 are subject to the provisions of Section 3.2 hereof with respect to nonappropr►ation SECTION 7.2 Remedies on Default. Whenever any event of default referred to in Section 7 1 hereof shall have happened and be continuing, HSE shall have the right, at its sole option without any further demand or notice to take one or any combination of the following remedial steps. (a) take possession of the Leased Property by virtue of HSE's ownership interest as lessor of the Leased Property; (b) hold the Lessee liable for the difference between (i) the rents and other amounts payable by Lessee hereunder to the end of the then current Original Term or Renewal Term, as appropriate, and (ii) the rent paid by a lessee of the Leased Property pursuant to such lease; and (c) take whatever action at law or in equity may appear necessary or desirable to enforce its right hereunder SECTION 7.3 No Remedy Exclusive. No remedy conferred herein upon or reserved to HSE is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle HSE to exercise any remedy reserved to it in this 14 Article it shall not be necessary to give any notice, other than such notice as may be required in this Article or by law SECTION 7 4 Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Lease should default under any of the provisions hereof and the nondefaultmg party should employ attorneys or incur other expenses for the collection of moneys or the enforcement of performance or observance of any obligation or agreement on the part of the defaulting party contained herein, the defaulting party agrees that it will pay on demand to the nondefaulting party the reasonable fees of such attorneys and such other expenses so incurred by the nondefaulting party SECTION 7.5 Waiver of Certain Damages. With respect to all of the remedies provided for in this Article VII, the Lessee hereby waives any damages occasioned by HSE's repossession of the Leased Property upon an event of default. ARTICLE ViiI PREPAYMENT OF LEASE PAYMENTS IN PART SECTION 8 1 Extraordinary Prepayment From Net Proceeds. To the extent, if any, required pursuant to Section 4 1 the Lessee shall be obligated to purchase the Leased Property by prepaying the Lease Payments in whole or in part on any date, from and to the extent of any Net Proceeds or other moneys pursuant to Article IV hereof The Lessee and HSE hereby agree that in the case of such prepayment of the Lease Payments in part, such Net Proceeds or other moneys shall be credited toward the Lessee's obligations hereunder pro rata among Lease Payments so that following prepayment, the remaining annual Lease Payments will be proportional to the initial annual Lease Payments. SECTION 8.2 Option to Purchase Leased Property Subject to the terms and conditions of this Section, HSE hereby grants an option to the Lessee to purchase all or a portion of the Leased Property by paying on any date a price equal to the portion of the outstanding principal component of the Lease Payments that is allocable to such portion of the Leased Property that is being so purchased, without premium, plus the accrued interest component of such portion of the Lease Payments to such payment date To exercise this option, the Lessee must deliver to HSE written notice specifying the date on which the Leased Property is to be purchased (the "Closing Date "), which notice must be delivered to HSE at least thirty (30) days prior to the Closing Date specified therein The Lessee may purchase the Leased Property pursuant to the option granted in this Section only if the Lessee has made all Lease Payments when due (or has remedied any defaults in the payment of Lease Payments, in accordance with the provisions of this Lease) and all other warranties, representations, covenants, and obligations of the Lessee under this Lease have been satisfied (or all breaches thereof have been waived by HSE in writing) Upon the expiration of the Scheduled Term of this Lease and provided that all conditions of the immediately preceding paragraph have been satisfied (except those pertaining to notice), the Lessee shall be deemed to have purchased the Leased Property (without the need for payment of additional moneys) and shall be vested with all rights and title to the Leased Property ARTICLE IX MISCELLANEOUS SECTION 9 1 Notices. Unless otherwise specifically provided herein, all notices shall be in writing addressed to the respective party as set forth below (or to such other address as the party to whom 15 such notice is intended shall have previously designated by written notice to the serving party), and may be personally served, telecopied, or sent by overnight courier service or United States mail If to HSE If to the Lessee HSE Leasing, LLC Pueblo, a Municipal Corporation 1616 17 Street, Suite 467 150 Central Main Street Denver CO 80202 Pueblo, CO 81003 Attention Barbara L. Winkler Attention Mr Sam Azad, Director of Finance Such notices shall be deemed to have been given (a) if delivered in person, when delivered, (b) if delivered by overnight courier, two Business Days after delivery to such courier properly addressed, or (c) if by United States mail, four Business Days after depositing in the United States mail, postage prepaid and properly addressed SECTION 9.2 System of Registration. The Lessee shall be the Registrar for this Lease and the rights to payments hereunder HSE shall be the initial Registered Owner of rights to receive payments hereunder If HSE transfers its rights to receive payments hereunder, the Registrar shall note on this Lease the name and address of the transferee SECTION 9.3 Instruments of Further Assurance To the extent, if any, that HSE's interest in the Leased Property as Lessor under this Lease is deemed to be a security interest in the Leased Property then the Lessee shall be deemed to have granted, and in such event the Lessee does hereby grant, a security interest in the Leased Property to HSE, which security interest includes proceeds, and this Lease shall constitute a security agreement under applicable law Concurrently with the execution of this Lease, the Lessee has executed, delivered, and filed and /or recorded all financing statements, UCC forms, mortgages, deeds of trust, notices, filings, and /or other instruments, in form required for filing and /or recording thereof, as are required under applicable law to fully perfect such security interest of HSE in the Leased Property (collectively "Security Documents ") Attached hereto as Exhibit E are copies of all such Security Documents. The Lessee will do, execute, acknowledge, deliver and record, or cause to be done, executed, acknowledged, delivered and recorded, such additional acts. notices, filings and instruments as HSE may require in its sole discretion to evidence, reflect and perfect the title, ownership, leasehold interest, security interest and /or other interest of HSE in and to any part or all of the Leased Property, promptly upon the request of HSE SECTION 9 4 Binding Effect. This Lease shall inure to the benefit of and shall be binding upon HSE and the Lessee and their respective successors and assigns. SECTION 9.5 Amendments. This Lease may be amended or modified only upon the written agreement of both HSE and the Lessee SECTION 9 6 Section Headings. Section headings are for reference only and shall not be used to interpret this Lease SECTION 9 7 Severability In the event any provision of this Lease shall be held invalid or unenforceable by a court of competent jurisdiction, to the extent permitted by law such holding shall not invalidate or render unenforceable any other provision hereof SECTION 9 8 Entire Agreement. This Lease and the attached Exhibits constitute the entire agreement between HSE and the Lessee and supersedes any prior agreement between HSE and the Lessee with respect to the Leased Property, except as is set forth in an Addendum, if any, which is made a part of this Lease and which is signed by both HSE and the Lessee 16 SECTION 9 9 Execution in Counterparts. This Lease may be executed in any number of counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 9 10 Arbitration To the extent permitted by law, any dispute, controversy or claim arising out of or based upon the terms of this Lease or the transactions contemplated hereby shall be settled exclusively and finally by binding arbitration Upon written demand for arbitration by any party hereto, the parties to the dispute shall confer and attempt in good faith to agree upon one arbitrator If the parties have not agreed upon an arbitrator within thirty (30) days after receipt of such written demand, each party to the dispute shall appoint one arbitrator and those two arbitrators shall agree upon a third arbitrator Any arbitrator or arbitrators appointed as provided in this section shall be selected from panels maintained by, and the binding arbitration shall be conducted in accordance with the commercial arbitration rules of, the American Arbitration Association (or any successor organization), and such arbitration shall be binding upon the parties. The arbitrator or arbitrators shall have no power to add or detract from the agreements of the parties and may not make any ruling or award that does not conform to the terms and conditions of this Lease The arbitrator or arbitrators shall have no authority to award punitive damages or any other damages not measured by the prevailing party's actual damages Judgment upon an arbitration award may be entered in any court having Jurisdiction The prevailing party in the arbitration proceedings shall be awarded reasonable attorney fees and expert witness costs and expenses. SECTION 9 11 Applicable Law This Agreement shall be governed by and construed in accordance with the laws of the State. 17 IN WITNESS WHEREOF, HSE has caused this Lease to be executed in its name by its duly authorized officer, and the Lessee has caused this Lease to be executed in its name by its duly authorized officer, as of the date first above written HSE Leasing, LLC, as Lessor B Authorized Officer Pueblo, a Municipal Corporation, as Lessee M4 B President of City Council Title [SEALJAttest: Atht ait P0;1109 9 City Clerk 1 8 EXHIBIT A FIXED RATE LEASE PAYMENT DEBT SERVICE SCHEDULE* 1 Interest. Interest components payable on the principal amount outstanding have been computed at the rate of 4 97 percent (4 97 %) per annum calculated based on actual number of days elapsed during a 360 day year 2. Payment Dates and Amounts. Commencement Date 31- Jan -11 Pmt Payment Principal Total Interest Principal Purchase # Date Balance Payment Portion Portion Price * 1 700 000 00 1 31- Jan -12 1,593 011 19 191 478 81 84 490 00 106 988 81 1 628 769 77 2 31- Jan -13 1 480 705 04 191 478 81 79 172 66 112 306 15 1 511 399 98 3 31- Jan -14 1 362,817.27 191 478 81 73 591 04 117 887 77 1 388 689 87 4 31- Jan -15 1,239,070 48 191 478 81 67 732 02 123 746 79 1 260 396 45 5 31- Jan -16 1 109 173 47 191 478 81 61 581 80 129 897 01 1 126 265 68 6 31- Jan -17 972,820 58 191 478 81 55 125 92 136 352 89 986 031 96 7 31- Jan -18 829 690 95 191 478 81 48 349 18 143 129 63 839 417 60 8 31- Jan -19 679,447 78 191 478 81 41,235 64 150,243 17 686 132 29 9 31- Jan -20 521 737 52 191 478 81 33 768 55 157 710 26 525 872 50 10 31- Jan -21 356 189 06 191 478 81 25 930 35 165 548 46 358 320 89 11 31- Jan -22 182 412 85 191 478 81 17 702.60 173 776.21 183 145 68 12 31- Jan -23 0 00 191 478 81 9 065 92 182 412 85 0 00 TOTALS 2 297 745 72 597 745 68 1 700 000 00 Interest Rate 4 97% Pueblo, a Municipal Corporation BY iN TITLE ) 641k f rvs• awl' 0 tic► DATE ,5gi,vQr1 0 2 * Purchase Price after the lease payment has been paid Al 1 EXHIBIT B DESCRIPTION OF THE LEASED PROPERTY Includes the irrigation system at the City of Pueblo's Walking Stick Golf Course facility B -1 EXHIBIT C See attached Resolution C -1 Gina Dutcher MMC - *^, Daryl Payne, CMC City Clerk , , Municipal Records Coordinator Lori Bravo -Neff Becky Dierksen Deputy City Clerk Senior Clerk Typist 200 S. Main Street 1 1 i1 ll' i 1 ` < I'' Pueblo, Colorado 81003 / www.pueblo us (719) 553 -2669 (719) 553 -2697 (FAX) ix�u OFFICE OF THE CITY CLERK OFFICE OF THE CITY CLERK TO WHOM IT MAY CONCERN I, Gina Dutcher, City Clerk of the City of Pueblo, Colorado, do hereby certify that the attached is a true and correct copy of Resolution No 12067 passed and approved by the City Council of Pueblo, Colorado on January 24, 2011 and that I am entrusted with the safekeeping of the original IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City of Pueblo, Colorado, this 25 day of January 2011 (SEAL) o ,�a , 4 04 ' Gin Dutcher, MMC `'• ��' / � City Clerk limosocoll RESOLUTION NO 12067 A RESOLUTION APPROVING A LEASE /PURCHASE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HSE LEASING LLC FOR WALKING STICK GOLF COURSE IRRIGATION SYSTEM, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE COUNCIL, AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND AUTHORIZING ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS RESOLUTION WHEREAS, Pueblo, a Municipal Corporation ( the "City ") is a Colorado home rule city organized and existing under and by virtue of Article XX of the Colorado Constitution, and is authorized thereby to purchase and lease personal property for its municipal purposes including recreation for the benefit of City and its inhabitants and to enter into contracts with respect thereto, and WHEREAS, City desires to purchase, acquire and lease certain irrigation equipment and system and related components (hereinafter, the "System ") for use at its Walking Stick Municipal Golf Course, and WHEREAS, in order to acquire the System, City proposes to enter into a Lease /Purchase Agreement with HSE Leasing LLC (the "Lessor ") and ancillary documents and exhibits, in substantially the form as attached hereto (the "Lease /Purchase Agreement "), and WHEREAS, The City has determined that the leasing of the System is for a valid public recreation purpose, and WHEREAS, the City has reviewed the form of the Lease /Purchase Agreement and has found the terms and conditions thereof acceptable to the Lessee, and WHEREAS, either there are no legal bidding requirements under applicable law to arrange for the leasing of the System under the Lease /Purchase Agreement, or the City of Pueblo has taken the steps necessary to comply with the same with respect to the Lease /Purchase Agreement. BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The form, terms and provisions of the Lease /Purchase Agreement and its attachments and Exhibits, are hereby approved in substantially the form attached hereto with such insertions, omissions and changes as shall be approved by the President of City Council and the City Attorney, the execution of such documents being conclusive evidence of such approval, and the President of the City Council is hereby authorized and directed to execute the Lease /Purchase Agreement and any related Exhibits attached thereto and to deliver the Agreement, and the City Clerk is authorized and directed to attest same and affix the seal of the City thereto SECTION 2. The City Manager is authorized and directed to take all action necessary or reasonably required by the parties to the Lease Purchase Agreement to carry out, give effect to and consummate the transactions contemplated thereby (including the execution and delivery of any necessary acceptance certificates, payment requests, assignment of contracts and bonds for the System or other certifications required or contemplated by the Lease /Purchase 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 and such Equipment Schedule and Addendum SECTION 3. The Lease/ Purchase Agreement and all lease and other payments thereunder are expressly made subject to sufficient appropriations being made therefore in each fiscal year after 2011 Nothing contained in this Resolution, the Lease /Purchase Agreement, and attachments and Exhibits thereto and any other instrument executed in connection therewith, shall be construed with respect to the City as incurring a pecuniary liability or charge upon the general credit of the City or against its taxing power, nor shall the breach of any agreement contained in this Resolution, the Lease /Purchase Agreement or attachments or Exhibits thereto or any other instrument or document executed in connection therewith impose any pecuniary liability upon the City or any charge upon its general credit or against its taxing power, except to the extent that the rental payments payable under the Lease /Purchase Agreement are special limited obligations of the Lessee as provided in such Lease Nothing in the Lease /Purchase Agreement or such attachments and Exhibits is intended, nor shall it be construed, to create any multiple - fiscal year direct or indirect debt or other financial obligation whatsoever of the City SECTION 4. The City Manager and Director of Finance of the City are each hereby designated to act as authorized representatives of the City for purposes of the Lease /Purchase Agreement and such attachments and Exhibits and until such time as the City Council shall designate any other or different authorized representative for purposes of the Lease /Purchase Agreement, such attachments and Exhibits SECTION 5. This Resolution shall be effective immediately upon passage and approval ,15151o. 0040 t INTRODUCED January 24, 2011 BY Larry Atencio 3 19 IL PERSON • o � ,"a APPROVED I/ .�.�. 00 C 3": FY '�ao . r •,%. PRES iE" OF CITY COUNCIL ATTESTED B �J�•w'�. _ _ _ __�� j ITY CLERK Jerry M Pacheco ,u( 4, 11 , , ( 200 South Main Street City Manager Pueblo, CO 81003 Jenny M. Eickelman t' 1,11lt11 I Phone (719) 553 -2655 Assistant City Manager r; r�� ' Fax (719) 553 -2698 1870 fa.. `t 0 11E Office of the City Manager MEMORANDUM TO Lori Bravo -Neff, Deputy City Cler FROM. Jerry M. Pacheco, City Manag DATE. January 26, 2011 SUBJECT Appointment During Absence of City Clerk Pursuant to my authority under Article 4 of the Charter of the City of Pueblo, during the absence of City Clerk Gina Dutcher from January 26, 2011 through January 28, 2011, you are hereby appointed Acting City Clerk with the same power to execute and attest instruments as the City Clerk. Gina Dutcher MMC Daryl Payne, CMC City Clerk f � k l � . Q ,1 6 V JIB Municipal Records Coordinator Lori Bravo -Neff Becky Dierksen Deputy City Clerk '- Senior Clerk Typist P Y Y ;, -� 200 S. Main Street ( 1l 1 111li'il1 d � n rri 1 � Pueblo, Colorado 81003 � ,ti <<< „� 01f ATL , - ,;, -,. / www pueblo. us (719) 553 -2669 719 553 -2697 FAX ,, ” ^ ` ( ) (FAX) ;18711 i i�ii�;` OFFICE OF THE CITY CLERK TO WHOM IT MAY CONCERN I, Lori Bravo -Neff, Acting City Clerk of the City of Pueblo, Colorado, do hereby certify that the attached is a true and correct copy of the minutes of the Regular City Council Meeting held on January 24, 2011 and that I am entrusted with the safekeeping of the original IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Seal of the City of Pueblo, Colorado, this 28 day of January, 2011 4 .4. 1 , -,,,. ,,.\% ' � °' L ri Bravo N -eff Acting City Clerk '"... 4o f rll I! ut.ou ,oii n n f ' 0 / 18711 ri a ..� '11111, REGULAR CITY COUNCIL MEETING CITY COUNCIL CHAMBERS - INTERIM CITY HALL 301 W "B" Street MONDAY, JANUARY 24, 2011 - 7 00 P M MINUTES A. CALL TO ORDER President Ray Aguilera B. INVOCATION Councilman Larry Atencio C PLEDGE OF ALLEGIANCE D ROLL CALL Council Members Present: Ray Aguilera, Lawrence Atencio, Leroy Garcia, Chris Kaufman, Steve Nawrocki, Vera Ortegon and Judy Weaver Administrative Staff Members Present: City Manager Jerry Pacheco, Assistant City Manager Jenny Eickelman, City Attorney Thomas Florczak, City Clerk Gina Dutcher and Department Directors Lori Pinz, Jim Billings, Earl Wilkinson, Creighton Wright, Chris Riley, Sam Azad and Gene Michael. E. PUBLIC FORUM Alvin Rivera expressed comments in support of increasing funding of the El Centro organization He explained this organization offers vital services to needy and low- income families Ted Freeman stated he also supports the El Centro Recreation Center and urged Council to increase the funding for this organization F SPECIAL RECOGNITIONS Councilman Steve Nawrocki announced that Brian Popp, Senior PC Network Technician, Department of Information Technology was selected as the Employee of the Month for January 2011 Mr Popp continually performs above and beyond the call of duty for the I T Department and he steps up to cover 24 hour call -outs at a moment's notice He was also praised for the work he performed on the Police Department CAD System and for his dedication and perseverance Brian was presented with a Certificate of Outstanding Performance, a $75 00 cash award and will also receive an additional personal holiday from the City of Pueblo Councilman Atencio presented Certificates of Recognition to the 2011 Class of Fire Explorers Post #343 Those who completed the 10 -month training program were Austin Day, Jenna Edwards, Andrew Ercul, Missy Finch, Desmond Hernandez, Jesus Hinojos, Scott Lindenmuth, Christina Marroquin, Jeremiah Martin, Dustin McCracken, Jorge Medina, Jordan Montano, Mariah Olivas, Orlando Olonia - Olivas, Andrew Percival, Zach Percival, Becca Ponce, Justin Porter, Isreal Rodriguez and Charity Villegas REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE TWO F SPECIAL RECOGNITIONS (Continued) Councilwoman Weaver read and presented a joint City /County proclamation declaring January 31 — February 4, 2011 as "Burn Awareness Week" honoring the Al Kaly Shriners Hospital for Children The Al Kaly Shriners in attendance were Ronald Crawford, Wayne McKey, Mery Terrill, J D Potter, Tracy Howard, Gary Sears, Vern Wolf, Frank Caffey, Brian Bate, William Sheard, Ken Keniston and Howard McGann Councilman Garcia read and presented a joint City /County proclamation declaring February 13, 2011 as "College Goal Sunday In Pueblo Day" Those present to receive the proclamation were Patty Erjavec, PCC President and Rosina Chaparro, College Goal Sunday Colorado State Coordinator Councilman Aguilera introduced the newly appointed members to the Pueblo Human Relations Commission (Maria Fox and Allison Ernst) and the Housing Authority of the City of Pueblo (Joe Mahoney) Council members thanked them for their dedication and service to the City G COUNCIL MEMBER COMMENTARY Council members expressed comments in regard to various community - related issues including events and meetings that were attended throughout the past week. H REVIEW OF AGENDA The Agenda was reviewed page by page by members of the Council AMENDMENTS TO AND APPROVAL OF THE AGENDA Mrs Weaver seconded by Mr Garcia moved to approve the agenda as distributed Roll CaII -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously J READING AND APPROVAL OF MINUTES Mr Kaufman, seconded by Mrs. Weaver moved to dispense with the reading and approve the Minutes of the Regular Meeting dated Monday, January 10, 2011, as distributed Roll Call -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously K. CONSENT AGENDA City Clerk Gina Dutcher read the consent agenda into the record L. COMMUNICATIONS No Communication items were submitted. REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE THREE CONSENT AGENDA M RESOLUTIONS M -1 RESOLUTION NO 12060 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $1,579,069 TO AMERICAN LANDSCAPE, INC , AND SETTING FORTH $120,931 FOR CONTINGENCIES AND ADDITIONAL WORK FOR PROJECT NO 10 -088 WALKING STICK GOLF COURSE IRRIGATION REPLACEMENT, AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M -2 RESOLUTION NO 12061 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $387,061.50 TO LANGSTON CONCRETE, INC AND SETTING FORTH $127,403 FOR CONTINGENCIES AND ADDITIONAL WORK FOR PROJECT NO 10 -091 (AL0601) ARKANSAS RIVER TRAIL PHASE 2 & 3 AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M -3 RESOLUTION NO 12062 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $57,408.10 TO PARKER EXCAVATING, INC , FOR SANITARY SEWER POINT REPAIR IN THE 2600 BLOCK OF GLADIOLA STREET, AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M-4 RESOLUTION NO 12063 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $89,000 TO DIAZ CONSTRUCTION GROUP LLC FOR THE NATURE CENTER LIFTSTATION REHABILITATION PROJECT AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M -5 RESOLUTION NO 12064 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $21,231.05 TO CEDAR RIDGE LANDSCAPE, INC , AND SETTING FORTH $4,200.00 FOR CONTINGENCIES AND ADDITIONAL WORK FOR PROJECT NO 11 -003 (CD0917 & CD0919) CONCRETE SIDEWALK REPAIR & CONSTRUCTION (CDBG) AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M -6 RESOLUTION NO 12065 AWARDING A CONSTRUCTION CONTRACT IN THE AMOUNT OF $16,649.28 TO PARKER EXCAVATING, INC FOR SANITARY SEWER POINT REPAIR IN THE 3100 BLOCK OF DENVER BOULEVARD, AND AUTHORIZING THE PURCHASING AGENT TO EXECUTE THE SAME M -7 RESOLUTION NO 12066 APPROVING A MASTER LEASE AGREEMENT BETWEEN THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, AND SUNTRUST LEASING CORPORATION, APPROVING AN EQUIPMENT SCHEDULE WITH RESPECT THERETO, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE CITY COUNCIL, AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND AUTHORIZING ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS RESOLUTION REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE FOUR CONSENT AGENDA M. RESOLUTIONS (Continued) M -8 RESOLUTION NO 12067 APPROVING A LEASE /PURCHASE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND HSE LEASING, LLC FOR WALKING STICK GOLF COURSE IRRIGATION SYSTEM, AUTHORIZING EXECUTION THEREOF BY THE PRESIDENT OF THE COUNCIL, AND AUTHORIZING THE EXECUTION AND DELIVERY OF ALL OTHER DOCUMENTS REQUIRED THEREWITH BY THE CITY MANAGER, AND AUTHORIZING ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS RESOLUTION M -9 RESOLUTION NO 12068 APPROVING AN AMENDMENT TO AN AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND THE NATURE AND RAPTOR CENTER OF PUEBLO, INC , FOR MAINTENANCE OF THE ONSITE SANITARY SEWER SYSTEM M -10 RESOLUTION NO 12069 AUTHORIZING PARTICIPATION IN THE COLORADO DEPARTMENT OF PUBLIC HEALTH AND ENVIRONMENT WATER QUALITY HEARINGS AND WORKGROUP PROCESSES THROUGH 2011 M -11 RESOLUTION NO 12070 APPROVING THE NATURAL HAZARD MITIGATION PLAN FOR PUEBLO COUNTY, COLORADO (2010) M -12 RESOLUTION NO 12071 APPROVING AN AGREEMENT FOR PROFESSIONAL ARCHITECTURAL SERVICES BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND SEMPLE BROWN DESIGN, P C., IN CONNECTION WITH THE PUEBLO MEMORIAL HALL AUDITORIUM RENOVATION PROJECT AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME M -13 RESOLUTION NO 12072 AUTHORIZING THE CITY OF PUEBLO, A MUNICIPAL CORPORATION, TO APPLY FOR A U S DEPARTMENT OF JUSTICE, "JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM" GRANT, AND AUTHORIZING THE PRESIDENT OF CITY COUNCIL TO EXECUTE SAME M -14 RESOLUTION NO 12073 APPROVING THE DEVELOPMENT PLAN REVIEW FOR THE LOCATION OF PLAYGROUND EQUIPMENT WITHIN THE NEIGHBORHOOD PARK IN UNIVERSITY PARK M -15 RESOLUTION NO 12074 APPROVING MODIFICATION AGREEMENT NO 4 BETWEEN THE CITY OF PUEBLO, PUEBLO SPRINGS RANCH, LLC AND PUEBLO SPRINGS RANCH II, LLC RELATING TO MODIFICATION OF THE TERM "TRIGGERING EVENT" SET FORTH IN THE WARRANTY DEED AND RIGHT OF REVERSION DATED OCTOBER 22, 2007 AND MODIFIED ON DECEMBER 31, 2007, DECEMBER 22, 2008 AND FURTHER MODIFIED ON JANUARY 11, 2010 REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE FIVE CONSENT AGENDA N ORDINANCES — FIRST PRESENTATION N -1 AN ORDINANCE AUTHORIZING THE ACCEPTANCE OF $20,000 FROM THE FEDERAL EMERGENCY MANAGEMENT AGENCY (FEMA) FOR REIMBURSABLE EXPENSES REGARDING AN ENVIRONMENTAL ASSESSMENT FOR THE PROPOSED FIRE STATION NO 4 SITE AND BUDGETING, APPROPRIATING & TRANSFERRING THE ADDITIONAL AMOUNT OF $20,000 TO CAPITAL PROJECT ARPW01 — FIRE STATION NO 4 THEREFORE Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE N -2 AN ORDINANCE AMENDING THE FISCAL YEAR 2011 STAFFING ORDINANCE REVISING POSITIONS WITHIN THE FIRE DEPARTMENT, HONOR FARM PROPERTIES ENTERPRISE, PUBLIC WORKS DEPARTMENT AND PARKS & RECREATION DEPARTMENT Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE N -3 AN ORDINANCE AMENDING SECTION 6 -5 -16 OF CHAPTER 5 OF TITLE VI OF THE PUEBLO MUNICIPAL CODE RELATING TO THE CLASSIFICATION AND PAY PLAN (2011) FOR THE FIRE DEPARTMENT, PARKS AND RECREATION DEPARTMENT AND THE HONOR FARM PROPERTIES ENTERPRISE Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE N-4 AN ORDINANCE AMENDING VARIOUS SECTIONS OF CHAPTER 4 OF TITLE XIV OF THE PUEBLO MUNICIPAL CODE RELATING TO SALES AND USE TAX COLLECTION AND ENFORCEMENT PROCEDURES AND PROVIDING PENALTIES FOR VIOLATIONS THEREOF Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE N -5 AN ORDINANCE AMENDING CHAPTER 4 OF TITLE XI OF THE PUEBLO MUNICIPAL CODE RELATING TO ANIMAL VACCINATIONS AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE N -6 AN ORDINANCE AMENDING SECTION 17-4 -7 OF CHAPTER 4 OF TITLE XVII OF THE PUEBLO MUNICIPAL CODE RELATING TO AN EXCEPTION TO LANDSCAPE REQUIREMENTS FOR CERTAIN STRUCTURES AND PROVIDING PENALTIES FOR VIOLATION THEREOF Public Hearing was set for Monday, February 14, 2011 and Notice of Hearing was ordered published BY TITLE REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE SIX REGULAR AGENDA O Consent Agenda Roll Call and Vote Mr Atencio seconded by Mr Garcia moved to Approve All Resolutions Set Forth in the Consent Agenda, Pass the Ordinances of the Consent Agenda on First Presentation, Set the Public Hearings for the Ordinances on First Presentation for Monday, February 14, 2011 and Order the Ordinances of the Consent Agenda to be Published BY TITLE. Roll CaII -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously P REGULAR AGENDA Q. RESOLUTIONS Q -1 RESOLUTION NO 12075 APPROVING THE AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, FRE COMPOSITES USA, INC , AND PUEBLO DEVELOPMENT FOUNDATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT, APPROVING A CONTRACT TO BUY AND SELL REAL ESTATE AND A LEASE IN CONNECTION WITH SAME, AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AGREEMENT, CONTRACT AND LEASE, AND TRANSFERRING $1,025,300 FROM THE 1992 -2011 SALES AND USE TAX CAPITAL IMPROVEMENT PROJECTS FUND THEREFORE A staff report and review of the agreement was given by City Attorney Thomas Florczak. Also present to provide a brief overview of the project was Dan Centa, President of PEDCO and Rod Morris, General Manager of the Pueblo Plant. Mrs. Weaver, seconded by Mr Nawrocki, moved to approve the Resolution Roll CaII -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously Q -2 RESOLUTION NO 12076 APPOINTING A MEMBER TO THE URBAN RENEWAL AUTHORITY OF THE CITY OF PUEBLO A vote was taken by an undisclosed ballot and tallied by City Manager Jerry Pacheco Mr Atencio seconded by Mr Nawrocki moved to approve the Resolution and insert the name of Sean Tapia for the five -year term expiring February 1, 2016 Roll Cali -- Ayes. Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE SEVEN REGULAR AGENDA Q. RESOLUTIONS (Continued) Q -3 RESOLUTION NO 12077 APPOINTING COUNCIL MEMBERS TO THE PLANNING AND ZONING COMMISSION, THE PUEBLO REGIONAL BUILDING COMMISSION, THE COMMITTEE ON DISPOSITION OF FORFEITED PROPERTY, THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO, THE PUEBLO MEMORIAL AIRPORT ADVISORY COMMITTEE, AND THE STREETSCAPE ADVISORY COMMITTEE AND APPOINTING DIRECTORS TO THE PUEBLO ECONOMIC DEVELOPMENT CORPORATION BOARD OF DIRECTORS, THE HARP AUTHORITY BOARD OF DIRECTORS AND THE PUEBLO DEVELOPMENT FOUNDATION BOARD OF DIRECTORS Mrs Weaver seconded by Mr Garcia moved to approve the Resolution inserting the following names for one year terms expiring January 31, 2012 Vera Ortegon- Planning and Zoning Commission, Leroy Garcia - Pueblo Regional Building Commission, Ray Aguilera- Committee Disposition of Forfeited Property; Chris Kaufman and Larry Atencio -Urban Renewal Authority of Pueblo, Colorado, Larry Atencio and Judy Weaver - Pueblo Memorial Airport Advisory Committee, Steve Nawrocki and Larry Atencio -PEDCO Board of Directors, Leroy Garcia -HARP Authority Board of Directors, Steve Nawrocki - Pueblo Development Foundation, Judy Weaver - Streetscape Advisory Committee and Steve Nawrocki and Judy Weaver- Library District Appointment Committee Roll CaII -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously R. ORDINANCES — FINAL PRESENTATION R -1 ORDINANCE NO 8304 ESTABLISHING THE WALKING STICK GOLF COURSE IRRIGATION REPLACEMENT CAPITAL IMPROVEMENT PROJECT NO WS1101, AND BUDGETING AND APPROPRIATING $1,700,000 IN FUNDS FOR SAID PROJECT - was presented for Final Presentation A staff report and detailed review of the Ordinance was given by Scott Hobson, ACM Community Investment. Mr Hobson stated it is anticipated the project will begin the week of February 21, 2011 with an anticipated completion date of middle- to late August 2011 PUBLIC HEARING Ted Freeman was sworn in Mr Freeman spoke against the ordinance and voiced his concerns with the cost of the project. Seeing no additional speakers, President Aguilera declared the Hearing closed Mr Nawrocki seconded by Mr Kaufman moved to approve the Ordinance on Final Presentation Roll Call -- Ayes. Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously REGULAR CITY COUNCIL MEETING JANUARY 24, 2011 PAGE EIGHT REGULAR AGENDA R. ORDINANCES — FINAL PRESENTATION (Continued) R -2 ORDINANCE NO 8305 APPROVING A DESIGN AND CONSTRUCTION AGREEMENT BETWEEN THE CITY OF PUEBLO AND THE URBAN RENEWAL AUTHORITY OF PUEBLO, COLORADO FOR REMODELING AND RESTORING HISTORIC MEMORIAL HALL AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME - was presented for Final Presentation A staff report and detailed review of the Ordinance was given by Mr Florczak PUBLIC HEARING Seeing no one wishing to speak, President Aguilera declared the Hearing closed Mrs Weaver seconded by Mr Atencio moved to approve the Ordinance on Final Presentation Roll CaII -- Ayes Aguilera, Atencio, Garcia, Kaufman, Nawrocki, Ortegon and Weaver Motion carried unanimously ADJOURN - 8 10 P M President Aguilera declared the meeting adjourned Respectfully submitted, Gina Dutcher, MMC City Clerk EXHIBIT D see revised opinion D -1 m , II II l ii _ice r er?:. ( �I �IYfI��I� Ii �� r l� l •.; in 0 owt'a o °art a/ N71P•din I r.. 21110.. CITY OF PUEBLO 503 N MAIN STREET SUITE 203 TELEPHONE (71 9)562 3899 PUEBLO COLORADO B1003 DEPARTMENT OF LAW FAX NO (71 9)544 1007 EXHIBIT D Opinion of Lessee's Counsel January 31, 2011 HSE Leasing, LLC 1616 17 Street, Suite 467 Denver, CO 80202 Gentlemen. As counsel for Pueblo, a Municipal Corporation ( "Lessee "), I have examined a duplicate original or certified copy of the Lease Purchase Agreement (the "Lease ") dated this 31st day of January, 2011, between the Lessee and HSE Leasing, LLC ( "HSE "), and records of the proceedings taken by Lessee to authorize and execute the Lease (the "Proceedings ") Based upon such examination as I have deemed necessary or appropriate and representations made to me by responsible employees of Lessee, I am of the opinion that 1 Lessee is a body corporate and politic, legally existing under the Constitution and laws of the State of Colorado (the "State ") 2 The Lease and the Proceedings have been duly adopted, authorized, executed, and delivered by Lessee 3 The Lease is a legal, valid and binding obligation of Lessee, enforceable against Lessee in accordance with its terms except as limited by the state and federal laws affecting remedies and by bankruptcy, insolvency, reorganization, or other laws of general application affecting the enforcement of creditor's rights generally, and by general equitable principals, and subject further to lawful appropriations being made in fiscal years of Lessee subsequent to 2011 4 Either there are no usury laws of the State applicable to the Lease, or the Lease is in accordance with and does not violate all such usury laws as may be applicable 5 Based upon representations made to me by responsible employees of Lessee, the governing body of Lessee has complied with all applicable open public meeting and notice laws and requirements with respect to the meeting at which the Proceedings were adopted and the Lessee's execution of the Lease was authorized, and the acquisition and leasing of the Leased Property from HSE under the Lease will comply with all procurement and public bidding laws as may be applicable 6 There are no legal or governmental proceedings or litigation pending of which the City has actual notice or, to the best of my knowledge, threatened or contemplated wherein an unfavorable decision, ruling or finding might adversely affect the transactions contemplated in or the validity of the Lease 7 The adoption, execution and /or delivery of the Lease and the Proceedings, and the compliance by the Lessee with their provisions, will not conflict with or constitute a breach of or default under any court decree or order or any agreement, indenture, lease or other instrument or any existing law or administrative regulation, decree or order to which the Lessee is subject or by which the Lessee is or may be bound. This opinion may be relied upon by the addressee hereof and its successors and assignees of interests in the Lease, but only to matters specifically set forth herein. Very truly yours, 740 Thomas J Florczak City Attorney EXHIBIT E SECURITY DOCUMENTS [Attach Security Documents here] E- I EXHIBIT F DELIVERY AND ACCEPTANCE CERTIFICATE To HSE Leasing, LLC Reference is made to the Lease /Purchase Agreement between the undersigned ( "Lessee "), and HSE Leasing, LLC (the "HSE "), dated January 31, 2011, (the "Lease ") and to that part of the Leased Property described therein which comprises personal property (collectively, the "Equipment ") In connection therewith we are pleased to confirm to you the following: 1 All of the Equipment has been delivered to and received by the undersigned, all installation or other work necessary prior to the use thereof has been completed, said Equipment has been examined and /or tested and is in good operating order and condition and is in all respects satisfactory to the undersigned and as represented, and that said Equipment has been accepted by the undersigned and complies with all terms of the Lease Consequently, you are hereby authorized to pay for the Equipment in accordance with the terms of any purchase orders for the same 2 In the future, in the event the Equipment fails to perform as expected or represented we will continue to honor the Lease in all respects and continue to make our rental and other payments thereunder in the normal course of business and we will look solely to the vendor, distributor or manufacturer for recourse 3 We acknowledge that HSE is neither the vendor nor manufacturer or distributor of the Equipment and has no control, knowledge or familiarity with the condition, capacity functioning or other characteristics of the Equipment. 4 The serial number for each item of Equipment which is set forth on Exhibit "B to the Lease is correct. This certificate shall not be considered to alter, construe, or amend the terms of the Lease. Lessee Pueblo, a Municipal Corporation e , By' .. '1161 - � .., Ray Aguilera, 'resi'rnt of the City Council Date F -1 ® Information Return for Tax - Exempt Governmental Obligations Form ® Under Internal Revenue Code section 149(e) OMB No 1545 - 0720 (Rev May 2010) to See separate instructions. Department of the Treasury Caution: If the issue price is under $100,000 use Form 8038 -GC. Internal Revenue Service Part I Reporting Authority if Amended Return, check here Id ❑ 1 Issuer's name 2 Issuer's employer identification number (EIN) Pueblo, Colorado, A Municipal Corporation 84 6000615 3 Number and street (or P.O box if mail is not delivered to street address) Room/suite 4 Report number (For IRS Use Only) 150 Central Main Street 3 5 City town, or post office, state, and ZIP code 8 Date of issue Pueblo, Colorado 81003 January 31, 2011 7 Name of issue 8 CUSIP number Lease /Purchase Agreement (Walking Stick Golf Course Irrigation Project) None 9 Name and title of officer of the issuer or other person whom the IRS may call for more information 10 Telephone number of officer or other person Sam Azad, Director of Finance ( 719 ) 553 -2655 Part,llr Type of Issue enter the issue •rice See instructions and attach schedule 11 Education 11 12 Health and hospital 12 13 Transportation 13 14 Public safety , 14 15 Environment (including sewage bonds) 15 16 Housing 16 17 Utilities 17 18 Other Describe > Recreation 18 1,700,000 19 If obligations are TANs or RANs, check only box 19a ® ❑ , If obligations are BANs, check only box 19b ® LI 20 If obligations are in the form of a lease or installment sale, check box ® ❑ i ::Partilll Description of Obligations. Complete for the entire issue for which this form is being filed (a) Final maturity date (b) Issue price (c) Stated redemption (d) Weighted (e) Yield price at maturity average maturity 21 01 -24 -23 $ 1,700,000 $ 1,700,000 7.075 years 4.9097 % Part'IV Uses of Proceeds of Bond Issue (including underwriters' discount) 22 Proceeds used for accrued interest 22 0 23 Issue price of entire issue (enter amount from line 21, column (b)) 23 1,700,000 24 Proceeds used for bond issuance costs (including underwriters discount) 24 2,000 25 Proceeds used for credit enhancement 25 0 26 Proceeds allocated to reasonably required reserve or replacement fund 26 0 27 Proceeds used to currently refund prior issues 27 0 28 Proceeds used to advance refund prior issues , 28 0 29 Total (add lines 24 through 28) 29 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . 30 1,698,000 'iPart V,# Deseri s tion of Refunded Bonds Com • lete this • art onl for refundin s bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded I► _____ N/A years 32 Enter the remaining weighted average maturity of the bonds to be advance refunded I► N/A years 33 Enter the last date on which the refunded bonds will be called (MM /DD/YYYY) ® N/A _ 34 Enter the date(s) the refunded bonds were issued M (MM /DDIYYYY) N/A For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat No. 63773S Form 8038 -G (Rev 5 -2010) Form 8038 -G (Rev 5 -2010) Page 2 =Prt VI` Miscellaneous _ 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) 35 0 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) 36a 0 Enter the final maturity date of the GIC I> N/A 37 Pooled financings: a Proceeds of this issue that are to be used to make loans to other governmental units 37a 0 b If this Issue is a loan made from the proceeds of another tax - exempt issue, check box ► ❑ and enter the name of the issuer tew and the date of the issue ► 38 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box ► ❑ 39 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ® ❑ 40 If the issuer has identified a hedge, check box ► ❑ Under penalties of perjury I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge Signature and belief, they are true, corr t, a d complete. I further declare that I consent to the IRS's disclosure of the issuer's retum information, as necessary and to process this return, to pars , that I have authorized above. Consent � �� . ) - , 1 Director of Finance Signature of issuer's authorized representative Date Type or print name and title Preparer's Date Check if � Preparer's SSN or PTIN Paid signature 1 �! self-employed P01065610 Preparer's �� P 1=1 Use On) Firm's name (or Peck, Shaffer & Williams LLP EIN 31 , 0577039 Y add address, a ZIPc de 1801 Broadway, Suite 1700, Denver, CO 80202 Phone no. ( 303) 296-3996 Form 8038-G (Rev 5 -2010) HutchinsonShockeyErley &Co 1616 17th Street, Suite 467 Denver Colorado 80202 P 303 785.8983 F 303.628 5492 www hsemuni com -- — January 31, 2011 Mr Sam Azad Director of Finance City of Pueblo 150 Central Main Street Pueblo, CO 81003 NOTICE OF ASSIGNMENT Re: Lease/Purchase Agreement, dated January 31, 2011 by and between Pueblo, a Municipal Corporation and HSE Leasing, LLC Please be advised that HSE Leasing, LLC has assigned all its right, title and interest in, to and under the above - referenced agreement, the project purchased thereunder and the right to receive Payments to Colorado Business Bank ( "Assignee "). All payments due under the Agreement, beginning with the January 31, 2012 payment, should be made to the Assignee at the following address. Colorado Business Bank CoBiz Financial P 0 Box 8779 Denver CO 80201 -8779 Please acknowledge the Assignment and your agreement to make payments due under the Agreement to the Assignee by the signature of a duly authorized officer in the space provided on the bottom of this letter Sincerely Hutchinson, Shockey Erely & Co. Barbara L. Winkler Vice President blw ACKNOWLEDGED AND ACCEPTED Pueblo, a•unicip., Corporation By • i MILL ..Al Ray At filer... Title: President of the City Council