HomeMy WebLinkAboutPINNACLE PUBLIC FINANCE - CONTRACT - RFP - 7197 LEASE PURCHASE FINANCING 2011STANDARD MASTER LEASE AGREEMENT
THIS STANDARD MASTER LEASE AGREEMENT ("Agreement") between PINNACLE PUBLIC
FINANCE, Inc. ("Lessor") and THE CITY OF FORT COLLINS, COLORADO, municipal
corporation ("Lessee") dated February 15, 2011, is as follows:
ARTICLE I -- LEASE OF EQUIPMENT
1.1 Agreement to Lease
Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the equipment (the
"Equipment") as more fully described in each Schedule of Equipment (Exhibit A), which together
with a Payment Schedule (Exhibit B) shall constitute a "Schedule", subject to the terms and
conditions of and for the purposes set forth in each Lease. Each Schedule and the terms and
provisions of this Agreement (which includes all exhibits hereto, together with any amendments
and modifications pursuant thereto) which are incorporated by reference into such Schedule
shall constitute a separate and independent lease and installment purchase of the Equipment
therein described and are referred to herein as a "Lease". Lessor, after having received all
required documentation, shall, no later than two business days thereafter, unless otherwise
directed by Lessee, deposit into Escrow the amount listed as the Total Lease Financing on the
applicable Exhibit A, to be used by Lessee for the acquisition of the Equipment according to the
terms of the Escrow Agreement attached as Exhibit D.
Nothing herein shall be construed to obligate the Lessor to enter into any Lease not currently in
existence, and Lessor shall approve each proposed Lease in its sole discretion. Such approval
shall not be unreasonably withheld.
Further, nothing herein shall be construed to obligate Lessee to enter into any lease not
currently in existence. Lessor acknowledges and agrees that Lessee may enter into a lease -
purchase arrangement at any time with any other party, and such agreement shall have no
bearing on this Agreement.
1.2 Title
During the term of each Lease, title to the Equipment will be in Lessor subject to the transfer to
Lessee upon Lessee's purchase of the Equipment as provided herein. Upon the termination of
the Lease for any reason other than Lessee's purchase of the Equipment, title to any Equipment
not purchased by Lessee at the time of termination shall remain in Lessor. Lessor at all times
will have access to the Equipment for the purpose of inspection, alteration and repair. Lessor
and Lessee agree that Lessee shall be listed as owner on vehicle titles and shall be treated as
the owner for all purposes and it will not be necessary for Lessor to be listed as lienholder on
vehicle titles. If Lessee does not maintain a credit rating of "A" or better, all leases for vehicles
initiated during the time Lessee credit rating is not an "A" or better will list Lessor as lienholder.
Upon the payment of all rent payable pursuant to Section 4.1 for the original term and all
renewal terms, or exercise of the option to purchase as specified herein, Lessor shall
immediately transfer title to any Equipment so purchased to Lessee, and Lessor's interest in
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10.2 Repairs
Lessee, at its own cost will service, repair, and maintain the Equipment so as to keep the
Equipment in as good condition, repair, appearance, and working order as when delivered to
and accepted by Lessee under the Lease, ordinary wear and tear excepted. At its own cost,
Lessee will replace any and all parts and devices which may from time to time become worn
out, lost, stolen, destroyed, damaged beyond repair, or rendered unfit for use or any reason
whatsoever. All such replacement parts, mechanisms, and devices will be free and clear of all
liens, encumbrances, and rights of others, and immediately will become a part of the Equipment
and will be covered by the Lease.
10.3 Alterations
Lessee may install such miscellaneous equipment as may be necessary for use of the
Equipment for its intended purposes so long as either
(a) the installation of such equipment does not alter the function or manner of
operation of the Equipment, or
(b) Lessee, upon termination of the Lease, restores the Equipment to its
function and manner of operation prior to the installation of such
miscellaneous equipment.
Subject to the obligations described above, Lessee may remove such miscellaneous equipment
upon termination of the Lease, if the removal of such miscellaneous equipment will not damage
the Equipment. Without the prior written consent of Lessor, Lessee will not make any other
alterations, changes, modifications, additions, or improvements to the Equipment as described
in Section 10.2. Modifications, additions, and improvements made to the Equipment, other than
miscellaneous equipment installed as set forth above, immediately will become a part of the
Equipment and will be covered by the Lease to the same extent as the Equipment originally
covered by the Lease. No such alterations, changes, modifications, additions and
improvements may impair or reduce the value of the Equipment.
10.4 Liens
Lessee and Lessor will not directly or indirectly create, incur, assume, or suffer to exist any
mortgage, pledge, lien, charge, encumbrance, or claim on or with respect to the Equipment or
any interest in the Equipment. Lessee and Lessor, promptly and at its own expense, will take
such action as may be necessary to duly discharge any mortgage, pledge, lien, charge,
encumbrance, or claim caused by Lessee or Lessor, respectively, if the same rises at any.
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ARTICLE XI -- INDEMNIFICATION, INSURANCE, AND DAMAGE
TO OR DESTRUCTION OF THE EQUIPMENT
11.1 Indemnification
Lessor assumes no liability for any damages of any nature which in any way relate to or rise out
of delivery, lease, possession, use, operation, condition, sale or other disposition of the
Equipment. To the extent permitted by law, Lessee hereby assumes and agrees to indemnify,
protect, save and keep harmless Lessor, its agents and employees from the against any and all
losses, damages, injuries, claims, demands and expenses, including legal expenses, of
whatsoever kind and nature, arising on account of the negligent act or omission of the Lessee,
its officers, employees or agents in:
(1) the ordering, acquisition, delivery, installation or rejection of the
Equipment;
(2) the possession, maintenance, use, condition (including, without limitation,
latent and other defects whether or not discoverable by Lessor or Lessee,
any claim in tort, including actions for strict liability, and any claim for
patent, trademark or copyright infringement) or operation of any item of
the Equipment (by whomsoever used or operated); or
(3) the loss, damage, destruction, removal, return, surrender, sale or other
disposition of the Equipment, or any item thereof.
It is understood and agreed, however, that Lessor shall give Lessee prompt notice of any claim
or liability hereby indemnified against and that Lessee shall be entitled to control the defense
thereof, so long as Lessee is not in default hereunder.
11.2 Liability and Property Insurance
Lessee will self -insure any Schedule for Equipment valued at $50,000 or less. Lessee, at its
own expense, will provide commercial property insurance and liability insurance for any
Schedule for Equipment valued at more than $50,000. Equipment will be insured in an amount
sufficient to cover the actual cash value at the commencement of the Lease (as determined by
the purchase price paid by Lessee for the equipment) Lessee will provide Lessor with proof of
insurance upon request.
11.3 Damage to or Destruction of the Equipment
If all or any part of the Equipment is lost, stolen, destroyed, or damaged, Lessee will give Lessor
prompt notice of such event and will repair or replace the same with equipment of equal or
greater value at Lessee's cost within sixty (60) days after such event, and any replaced
Equipment will be substituted in the Lease by appropriate endorsement. If Lessee fails or
refuses to make the required repair or replacement, Lessee will buy out the individual piece of
Equipment not repaired or replaced, at the next payment date (as set forth in Exhibit B.) No
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loss, theft, destruction, or damage to the Equipment will impose any obligation on Lessor under
the Lease, and the Lease will continue in full force and effect regardless of such loss, theft,
destruction, or damage. Lessor does not assume any risk and/or liability for loss, theft,
destruction, or damage to the Equipment 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 is to Lessee's property or to
the property of others.
ARTICLE XII -- MISCELLANEOUS
12.1 Assignment and Sublease by Lessee
Lessee may not assign, transfer, pledge, or encumber this Agreement or any Lease or any
portion of the Equipment (or any interest in a Lease or the Equipment) or sublet the Equipment,
without the prior written consent of Lessor which consent shall not be unreasonably withheld.
Lessee agrees that Lessor may impose on the Equipment such plates or other means of
identification as are necessary to indicate that the Equipment is subject to a Lease and the
restrictions set forth in this Section.
12.2 Assignment and Sublease by Lessor
Lessor may freely assign, transfer, pledge, or encumber any Lease or any interest in a Lease.
Immediately after receiving notice of such assignment or transfer, Lessee will then make all
payments directly to the assignee or transferee (as its interests may appear) and, within thirty
(30) days of such assignment or transfer, Lessee will acknowledge the same to the assignee or
transferee. Any payments made in accordance with such assignment or transfer will relieve
Lessee of all liability to Lessor for such payments. No such assignment shall be effective
against Lessee unless and until Lessee shall receive written notice thereof from Lessor.
12.3 Lessor's Right to Perform for Lessee
If Lessee fails to make any payment or fails to satisfy any representation, covenant, warranty, or
obligation, Lessor may (but need not) make such payment or satisfy such representation,
covenant, warranty, or obligation, and the amount of such payment and any expenses incurred
by Lessor, if the case may be, will be deemed to be, additional rent payable by Lessee on
Lessor's demand.
12.4 Addresses
All notices and payments under this Lease will be mailed or delivered,
a) if to Lessee, City of Fort Collins, at 215 N Mason, 2n° Floor, P.O. Box 580, Fort
Collins, Colorado 80522; and
b) if to Lessor, Pinnacle Public Finance, 8377 E. Hartford Drive, Suite 115,
Scottsdale, AZ 85255, until either Lessee or Lessor gives written notice to the
other specifying a different address.
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12.5 Manner of Payment
All payments by Lessee will be made by check or by other manner acceptable to Lessor.
12.6 Nonwaiver
No breach by Lessee in the satisfaction of any representation, covenant, warranty, or obligation
may be waived except by the written consent of Lessor, and any such waiver will not operate as
a waiver of any subsequent breach.
12.7 Severance Clause
Any provision in Agreement or in a Lease which is prohibited by law will be treated as if it never
were a part of this Agreement or such Lease, and the validity of the remaining terms of this
Agreement and the Lease will be unaffected.
12.8 Entire Agreement; Addendum
This Agreement, each Lease and the Exhibits thereto constitute the entire agreement between
Lessor and Lessee and supersede any prior agreement between Lessor and Lessee with
respect to the Equipment, except as is set forth in any Addendum which is made a part of such
Lease and which is signed by Lessor and Lessee.
12.9 Amendments
This Agreement and any Lease may be amended only by a written document signed by Lessor
and Lessee.
12.10 Inurement
Subject to the restrictions in Section 12.1, this Agreement and each Lease are binding upon and
inure to the benefit of Lessor and Lessee, their respective successors and assigns.
12.11 Governing Law
This Agreement and each Lease shall be governed by the laws of the State of Colorado.
12.12 Headings
Headings used in this Agreement are for convenience of reference only and the interpretation of
this Agreement will be governed by the text only.
12.13 Transmittal Fees
Transmittal of all documentation required for payment will be sent in an electronic format
acceptable to all parties from the Lessee to the Lessor and from the Lessor to the Escrow
Agent. Expedited overnight mail service may be substituted at the Lessor's expense.
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EXECUTED this ��{� day, of Feb�ua , 2011
PINNACLE PUBLIC FINANCE, Inc.
By
vrr
Cathy Jimenez, SVP, Operati s `• FtiC ��`'` '
CAI '•oeoeo �^ rYi� 'x r1.
AT
a / i
° '� a /^ 1''•y°w�� �' i '
e
(Corporate Seal)
OPT
A.
c�• 'Nil
LST: 1'� THE CITY OF FORT COLLINS, COLORADO
L ee•n.,L n e By:V�/ems
Wanda Krajicek, City le Jams B'. O'Neill ll, CPPO
Director of Purchasing and Risk Management
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Schedule of Equipment No.
Exhibit A - Sample
RE: STANDARD MASTER LEASE AGREEMENT entered into as of 11
("Agreement'), between Pinnacle Public Finance ("Lessor") and the City of Fort Collins,
Colorado ("Lessee"). All terms used and not otherwise defined herein have the meanings
ascribed to them in the Agreement.
The following items of Equipment are hereby included under this Schedule to the Agreement:
e
No
Department
Qty.
Description
Total Cost
Term
s
(Y )
2
5
3
5
4
5
5
5
6
5
7
5
I Total 5-year Financing I $
Total Lease Financing $
Lessee hereby represents, warrants and covenants that its representations, warranties and
covenants set forth in the Agreement are true and correct as though made on the
Commencement Date of Payments under this Schedule. The terms and provisions of the
Agreement (other than to the extent that they relate solely to other Schedules or
Equipment listed on other Schedules) are hereby incorporated into this Schedule by
reference and made a part hereof.
Lessee: the City of Fort Collins, Colorado Lessor: Pinnacle Public Finance, Inc.
M
Name
Date:
15
By —
Name
Title
Date:
EXHIBIT B: Payment Schedule (Sample)
Interest rate %
Term years.
Quarterly payments, in arrears
Pmt
No.
Due Date
Payment
Amount
Interest
Portion
Principal
Portion
Principal
Balance
1
2
3
4
5
Amortization schedule supplied by Lessor must include the above information at a minimum,
plus a signature block for Lessee.
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EXHIBIT C: Certificate of Acceptance and Concurrence (Samples)
FAX DOCUMENT
Certificate of Acceptance and
Request for Payment
Date:
Dear
The undersigned hereby certifies that he is duly qualified to act on behalf of the City of Fort
Collins, State of Colorado, with respect to Schedule of Equipment No. _ dated
_ to the Standard Master Lease Agreement dated < enter date >, by and
between the City of Fort Collins, Lessee, and Pinnacle Public Finance, Lessor, and certifies that
the following equipment has been delivered to and accepted by Lessee:
Line # Qty Description Serial # Invoice #
Enclosed is a copy of the purchase order # and invoice for the above items.
Please review the documents, sign the concurrence and fax them to our escrow agent, First
National Bank of Fort Collins for payment. Thank you for your assistance. Should you have
further questions, please contact Jim Hume at 970-221-6776.
Sincerely;
James B. O'Neill II, CPPO, FNIGP
Director of Purchasing and Risk Management
Enclosures
cc: Becky Sullivan, Accounting
file
`A
Fax Document
Concurrence Form
Date
Ms. Cathy Schott
First National Wealth Management
P.O. Box 2010
Fort Collins, CO. 80522
Re: Lease Purchase
Dear Ms. Schott:
In accordance with the terms of the escrow agreement between Pinnacle Public Finance and
the City of Fort Collins dated < enter date >, (escrow account # ), you are hereby authorized to
disburse funds for:
A copy of the acceptance certificate is attached. Please make remittance in the amount of $
payable to:
Thank you for your assistance.
Sincerely;
Concurrence:
By:
Title:
James B. O'Neill II, CPPO, FNIGP
Director of Purchasing & Risk Management
Date:
cc: Becky Sullivan, Accounting
file
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EXHIBIT D (sample)
ESCROW AGREEMENT AND INSTRUCTIONS
Schedule of Equipment No.
THIS AGREEMENT is made this by and between Pinnacle Public Finance,
as Lessor, and the City of Fort Collins, Colorado, as Lessee, hereinafter called the "Principals",
and the First National Wealth Management, a division of First National Bank of Omaha, P.O.
Box 2010, Fort Collins, Colorado 80522, hereinafter called "Escrow Agent'.
The subject matter shown in Schedule A hereof has been delivered to Escrow Agent by
Principals, or with the consent of Principals, and is to be held by Escrow Agent subject to the
Special Instructions shown in Schedule B hereof, and the General Provisions hereof.
SCHEDULE A - SUBJECT MATTER*
An executed copy of Schedule of Equipment No. _ dated , _ to
the Standard Master Lease Agreement (collectively the "Lease") between the
Principals executed as the same date as these Escrow Instructions. All
exhibits to the Lease, except Exhibit C (Certificate of Acceptance) are attached.
Executed copies of Exhibit C will be furnished to Escrow Agent prior to
disbursement of funds.
Funds in the amount of $ , to be deposited with the Escrow Agent as
directed by the Lessee ("Escrow Account'), but not later than
*Documents will be described as 'originals" unless they are copies. If not described, they will
be presumed to be copies. If subject matter is listed which is not delivered, all copies of the
Escrow Agreement and documents will be held a reasonable time (not exceeding thirty (30)
calendar days) pending delivery and a receipt will be given only for documents received. If all
documents are not received within a reasonable time, the documents will be returned to parties.
Only subject matter received at the time of execution will be listed above.
SCHEDULE B - SPECIAL INSTRUCTIONS*
- Escrow Agent will invest funds held in the Escrow Account at the direction of Lessee
in a Money Market Fund or such other fund as agreed to by Lessee.
Escrow Agent will promptly deposit all earnings from such investments to the Escrow
Fund created hereunder.
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such Equipment shall terminate.
1.3 Lease Not A Pledge of City's Revenues
Nothing contained in a Lease shall constitute a pledge of the general tax revenues, funds or
monies of Lessee except amounts appropriated for the purpose of making Lease payments
during the current fiscal year.
ARTICLE II -- DEFINITIONS
The following terms will have the meanings indicated below unless the context clearly requires
otherwise:
2.1 "Agreement Term" or "term of this Agreement" means the period from the date of
execution and delivery of this Agreement until terminated as provided herein.
2.2 "Commencement Date' for each Lease means the date interest commences to accrue
under such Lease which shall be the earlier of (i) the date on which the Equipment listed in such
Lease is accepted by Lessee in the manner described in Section 9.4; or (ii) the date on which
sufficient monies to purchase the Equipment listed in such Lease are deposited for that purpose
with an escrow agent.
2.3 "Equipment" means all or any of the property described in Exhibit A which Lessor is
leasing to Lessee.
2.4 "Funds" means funds of Lessee legally available and which have been properly
appropriated.
2.5 "Governing Body" means the City Council or any successor governing body of Lessee.
2.6 "Lease Term" or "term of a Lease" means the period commencing on the
Commencement Date of each Lease and continuing as provided in the applicable Exhibit B,
unless sooner terminated as provided for in Section 3.3 or 3.4 hereof.
2.7 "Lessee" means the City of Fort Collins, Colorado, a body corporate and politic existing
under the Laws of the State of Colorado which is leasing the Equipment from Lessor.
2.8 "Lessor" means Pinnacle Public Finance, which is leasing the Equipment to Lessee, and
includes Lessor's assigns.
2.9 "Vendor" means the manufacturers of the Equipment (or the manufacturers' agent or
dealer) from whom Lessee purchased or is purchasing the Equipment.
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Funds deposited with the Escrow Agent shall be used to pay for the cost of
acquisition of items of equipment listed on Exhibit A to the Lease. Escrow Agent
shall make payment for each piece of leased equipment only upon receipt of both an
executed copy of the appropriate Exhibit C of Lease and a letter of disbursement
authorization signed by both Principals (Lessor and Lessee).
Provide to Lessor and Lessee on a monthly basis, for the term of this Escrow
Agreement, reports indicating the following:
- Amount of disbursements for the purchase of investments.
- Amount of disbursements for the payment of invoices.
- Amount of principal and interest received from investments.
- An inventory of outstanding investments.
*(Any notice which Escrow Agent is required to give must be specifically set out in these Special
Instructions.)
GENERAL PROVISIONS
The Escrow Agent shall have no duty to determine the performance or nonperformance of
any provision of any agreement between the other parties hereto, and the original, or a
copy, of any such agreement deposited with the Escrow Agent shall not bind said agent in
any manner. The Escrow Agent assumes no responsibility for the validity or sufficiency of
any documents or papers or payments deposited or called for hereunder except as may
be expressly and specifically set forth in these instructions in clear and unambiguous
language.
2. This Agreement may be supplemented, altered, amended, modified or revoked by writing
only, signed by all of the parties hereto, and approved by the Escrow Agent, upon
payment of all fees, costs and expenses incident thereto.
3. No assignment, transfer, conveyance or hypothecation of any right, title or interest in and
to the subject matter of this Escrow shall be binding upon the Escrow Agent unless written
notice thereof shall be served upon the Escrow Agent and all fees, costs and expenses
incident thereto shall have been paid and then only upon the Escrow Agent's assent
thereto in writing.
4. Any notice required or desired to be given by the Escrow Agent to any party to this Escrow
may be given by mailing the same addressed to such party at the address noted herein, or
the most recent address of such party shown on the records of the Escrow Agent, or
believed by Escrow Agent to be proper, and notice so mailed shall be as effectual as
though served upon such party in person at the time of depositing such notice in the mail.
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5. The Escrow Agent may receive any payment or performance called for hereunder after the
due date thereof unless subsequent to the due date of such payment or performance and
prior to the receipt thereof the Escrow Agent shall have been instructed in writing by the
proper parties to refuse any such payment.
6. The Escrow Agent shall not be personally liable for any act it may do or omit to do
hereunder as such agent, while acting in good faith and in the exercise of its own best
judgment, and any act done or omitted by it pursuant to the advice of its own attorneys
shall be conclusive evidence of such good faith. The Escrow Agent shall have the right at
any time to consult with counsel upon any question arising hereunder and shall incur no
liability for any delay reasonably required to obtain the advice of counsel.
7. The Escrow Agent is hereby expressly authorized to disregard any and all notices or
warnings given by any of the parties hereto, or by any other person, firm or corporation,
excepting only orders or process of court, and is hereby expressly authorized to comply
with and obey any and all process, orders, judgments or decrees of any court, and in case
the Escrow Agent obeys or complies with any such process, order, judgment or decree of
any court it shall not be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such process, order,
judgment or decree by subsequently reversed, modified, annulled, set aside or vacated, or
found to have been issued or entered without jurisdiction.
8. In consideration of the acceptance of this escrow by the Escrow Agent, the Lessee
agrees, to pay the Escrow Agent its charges and fees hereunder, if any, and to indemnify
and hold it harmless as to any liability by it incurred to any other person, firm or
corporation by reason of its having accepted the same, or in connection herewith, and
under such circumstance, or in the event of a dispute, whether or not resulting in litigation,
between the parties hereto, or between the parties hereto and the Escrow Agent, to
reimburse the Escrow Agent for all its expenses, including, among other things, court
costs and reasonable attorneys' fees incurred in connection therewith. Escrow fees or
charges, as distinguished from other expenses hereunder, shall be as set forth in
paragraph 16, and are intended as compensation for the Escrow Agent's ordinary services
as contemplated by these Instructions. In the event the conditions of this escrow are not
promptly fulfilled or any dispute arises hereunder, or if for any other reason, the Escrow
Agent renders services not provided for in these Instructions, Lessee agrees to pay
reasonable compensation for such extraordinary services. In the event of any action to
recover the Escrow Agent's fees, expenses or charges, the Escrow Agent shall be entitled
to reasonable attorneys' fees and costs incurred with respect to any such action. No
provision in any attached special instructions shall alter Lessee's liability to the Escrow
Agent for such fees, charges and expenses. The Principals shall not be liable for gross
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negligence or intentional acts of the Escrow Agent.
9. The Escrow Agent shall be under no duty or obligation to ascertain the identity, authority
or rights of the parties (or their agents) executing or delivering or purporting to execute or
deliver these instructions or any documents or papers or payments deposited or called for
hereunder.
10. The Escrow Agent shall not be liable for the outlawing of any rights under any Statute of
Limitations or by reason of laches in respect to the Instructions or any documents or
papers deposited.
11. In the event of any dispute between the parties hereto as to the facts of default or
execution, the validity or meaning of these instructions or any other fact or matter relating
to the transaction between the parties, the Escrow Agent is instructed as follows:
(a)That it shall be under no obligation to act, except under process or order of
court, or until it has been adequately indemnified to its full satisfaction, and
shall sustain no liability for its failure to act pending such process or court or
indemnification:
(b)That it may in its sole and absolute discretion deposit the property described
herein or so much hereof as remains in its hands with the then Clerk, or acting
Clerk, of the District Court of the County of Larimer, State of Colorado, and
interplead the parties hereto, and upon depositing such property and filing its
complaint in interpleader it shall be relieved of all liability under the terms
hereof as to the property so deposited and shall be entitled to recover in such
interpleader action, from the other parties hereto, its reasonable attorney fees
and related costs and expenses incurred in commencing such action and
furthermore, the parties hereto for themselves, their heirs, legal
representatives, successors and assigns do hereby submit themselves to the
jurisdiction of said court and do hereby appoint the then Clerk, or acting Clerk,
of said court as their Agent for the Service of all process in connection with
such proceedings. The institution of any such interpleader action shall not
impair the rights of Escrow Agent under paragraph numbered 8, above.
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12. This Escrow will expire on or before If the deposits hereunder are not
withdrawn or this Escrow terminated before that date Escrow Agent may mail the Subject
Matter as follows, for use only for payment of principal or interest under the lease or for the
purchase of equipment for Lessee's own use, and upon such mailing, the Escrow Agent
shall be relieved from further responsibility or liability.
CITY OF FORT COLLINS
Revenue Division
P.O. Box 580
Fort Collins. Colorado 80522
13. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns.
14. The Escrow Agent may resign by giving notice in writing to all parties of its intent to resign.
The resignation shall become effective no sooner than sixty (60) days from the date of
mailing of the notice. The notice will be sent certified mail with return receipt requested to
the addresses set forth in paragraph 18 below unless these addresses have been
changed. The Principals shall advise the Escrow Agent in writing of the name of the new
Escrow Agent. If the Principals cannot agree as to the new Escrow Agent, or fail to advise
the Escrow Agent within the time set forth, the Escrow Agent may treat this as a dispute
and proceed under paragraph 11 above. If the new Escrow Agent is designated, then
upon delivery of all documents to the new Escrow Agent, the Escrow Agent is relieved of
all further responsibility or liability.
15. Other provisions:
(a) This agreement shall be construed and governed in accordance with the laws of the
State of Colorado.
(b) Any provisions of this Agreement found to be prohibited by law shall be ineffective only
to the extent of such prohibition, and shall not invalidate the remainder of this
Agreement.
(c) This Agreement (and, with respect to Lessor and Lessee, together with the Lease)
constitutes the entire agreement of the parties relating to the subject matter hereof.
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16. The fees to be paid Escrow Agent shall be paid by the Principals as follows:
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No fees will be charged by Escrow Agent for
maintenance of this Escrow Agreement.
Lessee and Lessor agree that Lessor shall have a security interest in the Escrow
Account, and such security interest is hereby granted by the Lessee to secure payment
of all sums due to the Lessor under the Lease. For such purpose, the Escrow Agent
hereby agrees to act as agent for the Lessor in connection with the perfection of such
security interest and agrees to note, or cause to be noted, on all books and records
relating to the Escrow Account, the Lessor's interest therein.
18. IN WITNESS WHEREOF,
first above written.
Principals:
the parties hereto have executed this Agreement as of the date
By: I
Cathy Jimenez, SVP, Operations
Pinnacle Public Finance (Lessor)
8377 E. Hartford Drive, Suite 115
Scottsdale, Arizona 85255
By:
James B. O'Neill II, CPPO, FNIGP
City of Fort Collins, CO (Lessee)
PO Box 580
Fort Collins, CO 80522
Escrow Agent:
First National Wealth Management
a division of First National Bank of Omaha
PO Box 2010, Fort Collins, CO 80522
By:
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ARTICLE III -- LEASE TERM
3.1 Commencement
The term of this Agreement commences upon the execution hereof and continues unless
terminated as provided elsewhere herein.
3.2 Intentionally Omitted
3.3 Non -appropriation of Funds
Lessee reasonably believes that it will have a need for the Equipment for the duration of the
Lease Term provided under a Lease and that funds will be available and appropriated to make
all payments for the Lease Term provided under the Lease, however, the availability of funds in
future fiscal years is dependent upon appropriation of funds by Lessee's City Council, which
appropriation is entirely discretionary.
Lessee will seek funding each year as part of its Budget process. If funds intended for the
continued leasing of the Equipment for any ensuing fiscal period are not appropriated for such
purpose, Lessee may terminate the Lease for which funds were not appropriated at the end of
the fiscal period then in effect for such Lease without penalty.
Lessee will notify Lessor at least thirty (30) days prior to the expiration of the fiscal period if
funds are not available for the payments required under a Lease by reason of nonappropriation
of funds as set forth above. Upon termination of such Lease for non -appropriation, if Lessee
has not exercised the Option to Purchase, Lessor shall be entitled to take possession of the
Equipment. Lessee shall prepare the equipment for pickup by Lessor within a reasonable
period of time following termination.
Lessor and Lessee understand and intend that the obligation of Lessee to pay rentals under the
Lease shall constitute only a current expense of Lessee and shall not constitute or give rise to a
general obligation or other indebtedness of Lessee within the meaning of any constitutional or
statutory provision or limitation, nor a mandatory charge or requirement against Lessee in any
ensuing fiscal year beyond the then current fiscal year.
3.4 Termination
Any Lease will terminate upon the earliest of any of the following events:
(a) A nonappropriation of funds as provided in Section 3.3;
(b) The exercise by Lessee of any option to purchase granted in the Lease
by which Lessee purchases all of the Equipment subject to such Lease;
(c) A default by Lessee and an election by Lessor to terminate such Lease
under Article VIII; or
(d) Upon payment of all payments required to be made by Lessee under the Lease.
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ARTICLE IV -- RENT
4.1 Amount
Lessee will pay Lessor rental payments for the lease of the Equipment on the dates and in the
amounts set forth in the applicable Exhibit B. Lessee shall have no power to make such rent
payments from any source other than the Funds.
4.2 Portion of Rent Attributable to Interest
The portion of each rent payment which is paid as and is representative of interest is set forth in
the applicable Exhibit B. The Net Effective Interest Rate for each Lease shall be shown on each
Exhibit B.
4.3 Tax Representations
Lessee understands that Lessor intends to exclude the interest component of the rental
payments from Federal gross income pursuant to the Internal Revenue Code of 1986, as
amended (the "Code"). Lessee covenants and agrees on the date hereof and as of the
Commencement Date of each Lease that it will, for each Lease:
(i) use a book entry system to register the owner of each Lease so as to
meet the applicable requirements of Section 149(a)(3) of the Internal
Revenue Code of 1986, as amended;
(ii) timely file a Form 8038-G (or, if the invoice price of the Equipment is less
than $100,000, a Form 8038-GC) with the Internal Revenue Service in
accordance with Section 149(e) of the Code;
(iii) not permit the Equipment to be directly or indirectly used for a private
business use within the meaning of Section 141 of the Code; and
(iv) rebate an amount equal to excess earnings on the Escrow fund to the
Federal Government if required by and in accordance with Section 148 (f)
of the Code, and make the annual determinations and maintain the
records required by the regulations applicable thereto;
(v) ensure that the monies deposited by Lessor in Escrow are not invested in
such manner so as to result in the Lease being treated as an "Arbitrage
bond or Federally guaranteed bond" within the meaning of Section 148(a)
or Section 149(b) of the Code respectively; and
(vi) comply with all applicable provisions of Section 103 of the Code.
Lessee acknowledges and agrees that in the event Lessor is to reimburse Lessee under
any Lease for Equipment which was acquired prior to the commencement of such
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Lease, Lessee shall comply with all Internal Revenue Code and Treasury Regulations
regarding reimbursements.
4.4. No Right to Withhold
Notwithstanding any dispute between Lessor and Lessee, or Vendor and Lessee, Lessee will
make all payments of rent when due, without withholding any portion of such rent, pending final
resolution of such dispute by mutual agreement between Lessor and Lessee or by a court of
competent jurisdiction.
ARTICLE V -- OPTION TO PURCHASE EQUIPMENT
5.1 Option to Purchase Price
Lessee may purchase the Equipment from Lessor, after payment of the rental payment then
due, at a price determined by the Principal Balance remaining on Exhibit B, Payment Schedule.
Individual pieces of Equipment may be purchased from Lessor, after payment of the rental
payment then due, at a price determined by the principal balance remaining on the individual
item's amortization schedule, as produced by City personnel. Price will be agreeable to both
parties. In addition, when purchasing individual items, the City agrees to pay a re -amortization
fee of $250.
5.2 Manner of Exercise of Option
To exercise the option granted in Section 5.1, Lessee must deliver to Lessor written notice of
such election, specifying the date of which Equipment is to be purchased, at least thirty (30)
days prior to the purchase date specified in such notice.
5.3 Conditions of Exercise to Option
Lessee may purchase the Equipment pursuant to the option granted by Section 5.1 only if
Lessee has made all rent payments when due (or has remedied any defaults in the payment of
rent, in accordance with the provisions of the Lease) and if all other representations, covenants,
warranties, and obligations of Lessee under the Lease have been satisfied (or all breaches of
the same have been waived by Lessor in writing).
ARTICLE VI -- REPRESENTATIONS, COVENANTS, AND WARRANTIES OF LESSEE
Lessee represents, covenants, and warrants on the date hereof and as of the Commencement
Date of each Lease as follows:
6.1 Status of Lessee
Lessee is a Municipal Corporation duly organized and existing under the constitution and the
laws of the State of Colorado.
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6.2 Authorization to Execute Lease
Lessee is authorized by the Constitution and laws of the State of Colorado to enter into the
transactions contemplated by this Agreement and each Lease, including all exhibits hereto and
thereto, and to effect all of the Lessee's obligations under each Lease and all exhibits. The City
Council of Lessee has duly authorized the execution and delivery of this Agreement and each
Lease and all exhibits hereto and thereto. This Agreement and each Lease and all exhibits
hereto and thereto constitutes the valid and binding obligation of the Lessee enforceable in
accordance with its terms.
6.3 Satisfaction of Procedures and Funding Requirements
All procedures, including any legal bidding requirements, have been met by Lessee prior to the
execution of this Agreement and each Lease, and all rent and other payment obligations will be
paid only out of the Funds.
6.4 Preservation of Warranties and Guarantees
Lessee will use and service the Equipment in accordance with the Vendor's instructions and in
such a manner as to preserve all warranties and guarantees with respect to the Equipment.
6.5 Representations, Covenants, Warranties, and Obligations to be Cumulative
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 Agreement or in any Lease.
6.6 Opinion of Lessee's Counsel
The Lessee will provide an opinion of its counsel with respect to the status of the Lessee, the
notice . of any pending legal proceedings threatening the enforceability of a lease, the
compliance with bidding requirements, the enforceability of this Agreement or any Lease and
related matters.
ARTICLE VII -- REPRESENTATIONS, COVENANTS AND WARRANTIES OF LESSOR
7.1 Enjoyment
During the term of each Lease, Lessor will provide Lessee with quiet use and enjoyment of the
Equipment, without suit, or hindrance from Lessor, except upon default by Lessee as to such
Lease, as set forth in Section 8.1 herein.
7.2 Disclaimer of Warranties and Status of Lessor, Etc
Lessee has selected the Equipment and desires to lease the Equipment for use in the
performance of its governmental functions. Lessor will not be liable for specific performance or
for damages if the supplier or manufacturer of the Equipment for any reason fails to fill, or
delays in filling, the order for the Equipment (or similar Equipment) and does not inspect the
Equipment prior to delivery to Lessee. For the purposes of each Lease and of any purchase of
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the Equipment affected under any Lease, Lessor expressly disclaims any warranty with respect
to the condition, quality, durability, suitability, or merchantability of the Equipment in any respect,
and any other representation, warranty, or covenant, express or implied. Lessor will not be
liable to Lessee for any liability, loss, or damage caused or alleged to be caused directly or
indirectly, by any inadequacy, deficiency, or defect in the Equipment, or by use of the
Equipment, whatsoever. Lessor assigns to Lessee, without recourse, for the term of each
Lease, all manufacturer warranties and guarantees, express or implied, pertinent to the
Equipment, and Lessor authorizes Lessee to obtain the customary services furnished in
connection with such guarantees and warranties at Lessee's expense, subject to Lessee's
obligation to reassign to Lessor all such warranties and guarantees upon Lessor's repossession
of the Equipment.
7.3 Authorization to Execute Lease. This Agreement and each Lease and all exhibits
hereto and thereto constitutes the valid and binding obligation of the Lessee enforceable in
accordance with its terms.
ARTICLE VIII -- DEFAULT
8.1 Events of Lessee Default
Lessee will be in default under a Lease upon the happening of any one or more of the following
events:
(a) Lessee fails to make any rent payment or other payment (including,
without limitation, insurance premiums, taxes, utilities, fines, and fees)
when due; or
(b) Lessee fails to satisfy promptly any representation, covenant, warranty, or
other obligation under the Lease; or
(c) Lessee comes within the jurisdiction of any court as debtor under any
bankruptcy, reorganization, or similar law, whether or not such law is in
existence on the date such Lease commences.
8.2 Remedies on Default
To the maximum extent permitted by law, upon any event of default, Lessor may in its sole
discretion pursue any one or more of the following remedies (which will be exercisable
cumulatively and concurrently or separately), provided notice of default is given by Lessor to
Lessee by certified mail and Lessee shall have at least thirty (30) days after receipt of such
notice within which to cure any such default specified in Section 8.1:
(a) Terminate such Lease, repossess the Equipment subject to the Lease
under default, and lease (free and clear of any interest of Lessee in the
Equipment) all or any portion of the Equipment to such other persons as
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Lessor may elect, applying the proceeds of any such lease (after
deducting Lessor's cost of repossessing, repairing, storing, moving, and
leasing the Equipment, including attorney's fees) against any rent unpaid
for the remainder of the Original and any Renewal Terms and any other
amounts owed to Lessor under such Lease at the time of Lessor's
election under this paragraph.
(b) Terminate such Lease, repossess the Equipment subject to the Lease
under default, and sell (free and clear of any interest of Lessee in the
Equipment) all or any portion of the Equipment at any public or private
sale without demand or notice of intention to sell, applying the proceeds
of such sale (after deducting the costs of repossessing, repairing, storing,
moving, and selling the Equipment, including attorneys' fees) against any
rent unpaid for the remainder of the Original and any Renewal Terms and
any other amounts owed to Lessor under such Lease at the time of
Lessor's election under this paragraph:
(c) Avail itself of any other remedy at law or equity.
A Default as to any one Lease shall in no way affect or impair Lessee's rights or
obligations as to any other Lease then in effect.
8.3 Default by Lessor
In the event Lessor should fail to perform in any material respect its obligations under this
Agreement, Lessor may be declared in default of this Agreement. To the maximum extent
permitted by law upon any event of default, the Lessee may, in its sole discretion, pursue any of
the following remedies provided notice of default is given by Lessee to Lessor by certified mail
and provided further that Lessor shall have at least thirty (30) days time after receipt of such
notice within which to cure any such default.
(a) Terminate this Agreement and seek actual damages; or
(b) Avail itself of any other remedy at law or equity.
A Default by Lessor shall in no way affect or impair Lessee's rights or obligations as to
any lease then in effect.
8.4 Interest on Unpaid Rent
In addition to all of the remedies in Section 8.2, Lessee will be liable to the maximum extent
permitted by law for interest on any unpaid rent or other payment under a Lease at the rate of
eight per cent per annum.
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8.5 Attorneys' Fees
In the event either party to this Lease should incur attorneys' fees for litigation in order to
enforce this Agreement or any Lease or to protect its rights hereunder, then, in that event, the
prevailing party in any such litigation shall be entitled to reasonable attorneys' fees and
expenses.
ARTICLE IX -- NET LEASE
9.1 Interpretation
Each Lease for all purposes will be treated as a net lease.
9.2 Taxes and Fees
Lessee agrees to pay all license, sales, use, personal property, and other taxes and fees,
together with any penalties, fines, and interest on such taxes and fees imposed or levied with
respect to the Equipment and the ownership, delivery, lease, possession, use, operation, sale,
and other disposition of the Equipment, and upon the rental or earnings arising from any such
disposition, except any Federal or State income taxes payable by Lessor on such rental or
earnings. Lessee may in good faith and by appropriate proceedings contest any such taxes and
fees so long as such proceedings do not involve any danger of sale, forfeiture, or loss of the
Equipment or of any interest in the Equipment.
9.3 Permits
Lessee will provide all permits and licenses necessary for the installation, operation, and use of
the Equipment. Lessee will comply with all laws, rules, regulations, and ordinances applicable
to the installation, use, possession, and operation of the Equipment. If compliance with any
law, rule, regulation, ordinance, permit, or license requires changes or additions to be made to
the Equipment, such changes or additions will be made by Lessee at its own expense.
9.4 Certificate of Acceptance/Inspection by Lessee
Lessee agrees to furnish a Certificate of Acceptance in a form similar to attached Exhibit C
when requesting disbursement of funds from the Escrow Account. After execution and delivery
by Lessee of the Certificate of Acceptance, it shall be conclusively presumed that Lessee is
satisfied with and has accepted the Equipment as being in good condition and repair.
ARTICLE X -- USE, REPAIRS, ALTERATIONS, AND LIENS
10.1 Use
Lessee will not install, use, operate, or maintain the Equipment improperly, carelessly, in
violation of any applicable law, or in a manner contrary to that contemplated by the Lease.
Lessee agrees that the Equipment is and at all times will remain personal property
notwithstanding that the Equipment or any part of the Equipment may now or hereafter become
affixed in any manner to real property or to any building on real property.
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