HomeMy WebLinkAboutC2023-162 - 8/15/2023 - Approved MASTER LEASE-PURCHASE FINANCING AGREEMENT
BETWEEN
The City of Corpus Christi, as Less .e
And
Lessor
THIS MASTER LEASE-PURCHASE FINANCING AGREEMENT (the
Agreement), is by and between (Lessor) cm' the City of Corpus Christi, a political
subdivision of the State of Texas as lessee (City), whose address is 1201 Leopard,
Corpus Christi, Nueces County, Texas 78401.
WITNESSETH:
WHEREAS, the City is authorized by law to acquire such items of
personal property as are needed to carry out its governmental functions, and to
acquire such personal property by entering into a lease with the option to
purchase; and
WHEREAS, the City has determined that it is necessary for it to acquire
under this Agreement certain items of personal property described herein as the
Property; and
WHEREAS, Lessor is willing to lease certain Property to the City
pursuant to this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein City and Lessor hereto recite and agree as follows:
ARTICLE 1. DEFINITIONS AND EXHIBITS
Section 1.1 Definitions. The terms defined in this Section, for all
purposes of the Agreement, have the following meanings:
Additional Terms: Consecutive terms, each of a one-year fiscal
period, for which a Lease with respect to a Property Group remains in effect unless
terminated by City. Each Additional Term commences at the end of the Original
Term or the preceding Additional Term and continues for a period within which all
of the Lease Payments specified in Exhibit B will be paid as provided in Section
5.1.
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SCANNED
Agreement: The Master Lease-Purchase Financing Agreement and
all Exhibits hereto.
Business Day: Each day on which the City is open for business.
Contractor: Each manufacturer or vendor from whom the City has
ordered or contracted for the manufacture, delivery and/or installation of the
Property.
Contract Administrator: The City's designated representative for
administering this Agreement is Director of Finance or designee.
Event of Taxability: A determination that the interest portion of Lease
Payments is included for federal income tax purposes in the gross income of Lessor
due to City's action or failure to take action, including the breach of covenants
set forth herein. An Event of Taxability occurs upon the earlies of: (1) the
happening of any event which may cause such Event of Taxability, or (2) Lessor's
payment to the applicable taxing authority of the tax increase resulting from such
Event of Taxability, or (3) the adjustment of Lessor's tax return to reflect such Event
of Taxability, or (4) the date as of which the interest portion of the Lease Payments
is determined by the Internal Revenue Service to be includable in the gross
income of Lessor for federal income tax purposes.
Fiscal Year: The 12-month fiscal period of the City which commences
annually on October 1 and ends on the following September 30.
Independent Counsel: An attorney duly admitted to the practice of
law before the highest court of Texas.
Interest: The portion of any Lease Payment designated as and
comprising interest as shown in any Exhibit B hereto.
Lease: With respect to each Property Group, this Agreement and the
Schedule relating thereto, shall constitute a separate contract relating to such
Property Group.
Lease Payment: The payment of Principal and Interest due from the
City to Lessor on each Payment Date as shown on each Exhibit B.
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Lease Term: With respect to any Property Group, the Original Term
and all Additional Terms during which the related Lease is in effect as specified in
Section 4.4.
Net Proceeds: Any insurance proceeds or condemnation award,
paid with respect to any Property, remaining after payment therefrom of all
expenses incurred in the collection thereof.
Non-appropriation Event: The failure of the City Council of the City to
appropriate money for any Fiscal Year sufficient for the continued performance
of a Lease by the City with respect to the related Property Group, which may be
evidenced by a budget ordinance or resolution which prohibits the City from
using any monies to pay the Lease Payments due under such Lease with respect
to such Property Group for a designated Fiscal Year.
Original Term: The period from the date of execution of an Exhibit A
with respect to a Property Group until the end of the then-current Fiscal Year.
Payment Date: The date upon which any Lease Payment is due and
payable as provided in any Exhibit B.
Permitted Encumbrances: As of any particular time: (i) liens for taxes
and assessments not then delinquent, or which the City may, pursuant to the
provisions of Section 7.3 hereof, permit to remain unpaid, (ii) this Agreement and
amendments hereto, (iii) Lessor's interest in the Property, or (iv) any mechanic's,
laborer's, material men's, supplier's or vendor's lien or right not filled or perfected
in the manner prescribed by law, other than any lien arising through a Contractor
or which the City may, pursuant to Article 8, hereof, permit to remain unpaid.
Principal: The portion of any Lease Payment designated as principal
in any Exhibit B hereto.
Property: Individually or collectively as the context requires, the
personal property designated by the City, which is described in one or more
Exhibit A as now or hereafter constituted. The City may lease-purchase all
equipment it determines necessary to provide essential services, which includes
computer hardware and software.
Property Group: The Property listed on any Exhibit A comprising a
single purchase of a group of items, equipment or associated products.
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Purchase Option Price: With respect to a Property Group listed on
any single Exhibit A, the amount designated and set forth opposite each Payment
Date in the Exhibit B relating to such Property Group.
Schedule: A schedule consisting of separate, but like-numbered
pages of Exhibits A and B which have been completed with respect to a Property
Group and executed by Lessor and City.
Specifications: The procurement specifications and/or purchase
order pursuant to which the City has ordered any Property from a Contractor.
Section 1.2. Exhibits. The following Exhibits are attached to and by
reference made a part of this Agreement.
Exhibit A: Property Group Description. Each Lease will have
consecutively numbered Exhibit A forms. Each Exhibit A will describe the Property
Group for its Lease, including serial numbers when available, on consecutively
numbered pages. A sample Exhibit A is attached and incorporated.
Exhibit B: Lease Payment Schedule. Each Lease will have
consecutively numbered Exhibit B forms. Each Exhibit B will contain the date and
amount of each Lease Payment due for the corresponding Exhibit A Property
Group, the amount of each Lease Payment allocating Principal and Interest, the
price at which City may exercise its Article 10 option to purchase Lessor's interest
in each Property Group, and the due date of each Lease Payment.
Exhibit C: Certificate of Acceptance. A Certificate of Acceptance
signed by the Contract Administrator indicating that the Property Group
described therein has been delivered and installed in accordance with the
Specifications, and has been accepted by the City, the date on which Lease
Payments shown in the page of Exhibit B relating thereto commences, and that
certain other requirements have been met by the City. A sample Exhibit C is
attached and incorporated.
Exhibit D: Opinion of Counsel. A form of opinion of counsel to the City
as to the organization, nature, and powers of the City; the validity, execution, and
delivery of this Agreement and various related documents; the absence of
litigation; and related matters. A sample Exhibit D is attached and incorporated.
Exhibit E: Requisition Report. City shall furnish Lessor a Requisition
Report prior to issuing a procurement for any Property Group unless the item is on
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Exhibit F, Approved Property List. The parties agree that no Requisition Report shall
be required for Property listed on the Approved Property List. Each Requisition
Report will include the proposed Property Group, an estimated price for each
piece of Property, the budgeted amount for each piece of Property, the desired
number of Lease Payments, and any other information that City's Contract
Administrator and an authorized agent of Lessor mutually agree to add to the
Requisition Report. A sample Requisition Report is attached as Exhibit E.
Exhibit F: Approved Property List. City will furnish Lessor an Approved
Property List listing all Property budgeted for lease-purchase in the beginning of
every fiscal year. Lessor approves the lease-purchase of all Property listed on the
Approved Property List by bidding on and signing this contract. City will furnish
Lessor's Agent a new Approved Property List by October 151" annually, which will
list all Property budgeted for lease-purchase during subsequent fiscal years.
Exhibit F will contain the following funding conditions: The initial Approved
Property List is attached as Exhibit F and incorporated by reference. Each Exhibit
F will contain the following representations made by City:
(a) No material adverse change has occurred in the Code.
(b)No material adverse change has occurred in the financial condition of
City.
(c) All representations and warranties of City in the Agreement remain true,
accurate and complete.
(d)No event of default has occurred and is continuing under the
Agreement.
Section 1.3. Additional Documents. The following additional
documents shall be provided by City to Lessor, in form reasonable satisfactory to
Lessor, prior to any funding under this Agreement: Lease Schedule; Auto-debit
Form; Certificate of Incumbency; Proceeds Disbursement Authorization; and
resolutions of City authorizing the transactions hereunder.
ARTICLE 2. REPRESENTATION, CONVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of the City.
The City represents, covenants, and warrants as follows:
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(a)The City is a municipal corporation and political subdivision of Texas, duly
organized and existing under the Constitution and laws of the State.
(b)The City is authorized under the Constitution and laws of Texas to enter
into this Agreement and the transactions contemplated hereby, and to
perform all of its obligations hereunder.
(c)The City Manager, or designee, has been duly authorized to execute
and deliver this Agreement by the official action of the City's governing
body, the City Council.
(d) In authorizing and executing this Agreement, the City has complied
and/or will comply with all public bidding laws applicable to this
Agreement and the acquisition of the Property by the City.
(e)The City will not pledge, mortgage or assign this Agreement, or its duties
and obligations hereunder to any other person, firm or corporation,
except as provided under the terms of this Agreement.
(f) The City will use the Property during the Lease Term only to perform
essential governmental functions devoted exclusively to public uses.
(g) Upon the request and direction of Lessor, the City will take all affirmative
actions legally within its power necessary to ensure that the interest
portion of the Lease Payments does not become included in the gross
income of the recipient for federal income tax purposes under the
Internal Revenue Code of 1986 (the Code) and Treasury Regulations
promulgated thereunder (the Regulations).
(h) Within five Business Days of final acceptance of each Property Group by
the Contract Administrator, after delivery and installation of that
Property Group, the City will provide to Lessor a completed and
executed copy of Exhibit C, Certificate of Acceptance, corresponding
to that Property Group, together with completed and executed copies
of the related Exhibits A and B.
(i) Upon the execution of this Agreement, the City will provide the Lessor an
opinion of its legal counsel in substantially the form of Exhibit D.
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(j) Upon the request and direction of Lessor, the City will submit to the
Secretary of the Treasury an information reporting statement at the time
and in the form required by the Code and Regulations.
(k) The City shall take appropriate official action by its governing body to
approve the acquisition and financing of any Property Group under the
terms and conditions of this Agreement.
(I) The execution, delivery, and performance by the City of its obligations
under this Agreement will not result in a breach or violation of, nor
constitute a default under, any agreement, lease or other instrument to
which the City is a party or by which the City's properties may be bound
or affected.
Section 2.2. Representation, Covenants and Warranties of Lessor.
Lessor represents, covenants and warrants as follows:
(a) Lessor is a national banking association formed under the laws of the
United States and authorized to transact business in the state of Texas;
has power to enter into this Agreement; is possessed of full power to own
and hold personal property and to lease the same; engages in the
leasing of personal property such as the Property in the ordinary course
of business; and has duly authorized the execution and delivery of this
Agreement and all addenda thereto.
(b)Neither the execution and delivery of this Agreement, nor the fulfillment
of or compliance with the terms and conditions thereof, nor the
consummation of the transactions contemplated thereby, conflicts with
or results in a breach of the terms, conditions or provisions of any
restriction, agreement or instrument to which Lessor is now a party or by
which Lessor is bound, constitutes a default under any of the foregoing,
or results in the creation or imposition of any lien, charge or
encumbrance whatsoever upon any of the property or assets of Lessor,
or upon the Property, except Permitted Encumbrances.
(c) Lessor must not issue Certificates of Participation and Lessor agrees that
City shall not be required to provide any disclosure information under
Securities & Exchange Commission Rule 15(c)2-12.
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ARTICLE 3. LEASE OF PROPERTY
Section 3.1. Acquisition of Property. During this Agreement when City
desires to lease a Property Group from Lessor, the Contract Administrator shall
complete an Exhibit E, which includes the Property Group, an estimated price for
each piece of Property, the budgeted amount for the Property Group and the
desired number of Lease Payments for the Property Group.
For any property not on the annually approved Exhibit F, Lessor must
advise the Contract Administrator in writing whether Lessor will lease the Property
Group to City within three business days after receipt of a completed Exhibit E.
City will initiate the procurement process to purchase the Property
Group. Upon receipt of bids and award by City Council of a contract to
purchase, City shall notify Lessor in writing of the Property Group cost and
estimated delivery period and Lessor shall execute an Exhibit A, numbered with
the assigned Lease Number, and forward it to the Contract Administrator.
If City so desires, or if Lessor chooses not to lease a Property Group to
City or chooses not to lease for the number of Lease Payments the City requested,
City may lease the Property Group from anyone else it chooses.
Section 3.2. Property Delivery; Documentation. Upon Lessor's written
approval of an Exhibit E, Lessor shall provide City with an assigned Lease Number
and the Contract Administrator will prepare working file copies of Exhibits A and
B, and forward a copy of each to Lessor's designated representative. After
delivery of a Property Group to City, City staff shall inspect the Property Group for
compliance with Specifications. Within three business days after the Contract
Administrator receives staff's written acceptance of the Property Group, the City
will complete the previously furnished Exhibits A and B and will provide Lessor a
completed and executed Exhibit C (Certificate of Acceptance).
Lessor must pay a Contractor, or reimburse City for any payment it
made to a Contractor, for a Property Group on the same day that the Lease
Payment Schedule Exhibit B begins, which must be within five business days after
receipt and Lessor's approval of all documents from the City and upon
determination by Lessor that the following funding conditions have been met. The
Contract Administrator must provide Lessor, in a form satisfactory to Lessor, the
following:
(a) An Exhibit A and Exhibit B executed by City and Lessor;
(b) An Exhibit C executed by City;
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(c) A motion, or other evidence, showing official action taken by the City
Council to authorize acquisition of the Property Group on the terms
provided in Exhibit A;
(d) Contractor invoice(s) and/or bill(s) of sale relating to the Property
Group, and if the invoices have been paid by City, evidence of
payment thereof, and if applicable, evidence of official intent to
reimburse such payment as required by the Regulations;
(e) As applicable, financing statements executed by City as debtor
and/or the original certificate of title or manufacturer's certificate of
origin and title application if any of the Property Group is subject to
certificate of title laws;
(f) A completed and executed Form 8038-G or -GC or evidence of filing
thereof with the Secretary of the Treasury; and
(g) Any other documents or items reasonably required by Lessor.
Simultaneously with the delivery of the Property Group, Lessor shall
cooperate with the City and the City shall take all actions necessary to
vest legal title to the Property Group in the City, and to perfect a
security interest therein in favor of Lessor or a person, firm or corporation
designated by Lessor.
Within five business days of Lessor's receipt and approval of the
documents listed above in (a)-(g) in form and substance satisfactory to Lessor,
Lessor shall make full payment to Contractor(s) of all funds applicable to the
accepted Property Groups by either wire transfer or overnight delivery of a check
at the direction of the Contract Administrator. If the escrow agreement described
in Section 3.6 is utilized, Lessor will consent to a disbursement from the escrow
account for payment of all funds applicable to the accepted Property Group
upon Lessor's receipt of the documents listed in (a)-(g) above in form and
substance satisfactory to Lessor.
Section 3.3. Lease. Lessor hereby leases all Property made subject to
this Agreement to the City, and the City hereby leases such Property from Lessor,
upon the terms and conditions set forth in the Lease and this Agreement.
Section 3.4. Possession and Eniovment. Lessor hereby covenants to
provide the City, during the Term of this Agreement, with the quiet use and
enjoyment of the Property, and the City will, during the Term of this Agreement,
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peaceably and quietly have, hold and enjoy the Property, without suit, trouble or
hindrance from Lessor, except as expressly set forth in this Agreement. Lessor will,
at the request of the City and at the City's cost, join in any legal action in which
the City asserts its right to such possession and enjoyment to the extent Lessor
lawfully may do so.
Section 3.5. Lessor's Access to Property. The City agrees that Lessor
may, at all reasonable times, examine and inspect the Property. The City further
agrees that Lessor will have such rights of access to the Property as may be
reasonably necessary to cause the proper maintenance of the Property in the
event of failure by the City to perform its obligations hereunder.
Section 3.6. Alternative Procedure; Escrow Agreement.
Notwithstanding the provisions of Section 3.2, upon agreement by Lessor and City
as to any Property Group to be acquired and leased by City under this
Agreement, Lessor and City may enter into an escrow agreement in form and
substance, and with an escrow agent, mutually satisfactory to the parties. If Lessor
wishes to enter into an escrow agreement for any Property Group and the parties
cannot agree on acceptable terms for the escrow agreement, or the Lessor
refuses to provide an escrow account, the City may acquire the Property Group
using other funding, outside of this Agreement.
ARTICLE 4. TERM OF MASTER LEASE-PURCHASE AGREEMENT AND LEASES
Section 4.1. Agreement Term. This Agreement will be in effect
commencing upon the issuance of a notice to proceed for a period of five years;
provided that any Lease for a Property Group will remain in effect for a Term
commencing upon its date of execution and ending as provided in Section 4.4.
Lessor has no obligation to fund future Property Group acquisitions if the City
terminates a Lease or defaults, or if such property is not on the annually approved
Exhibit F.
Section 4.2. Non-Appropriation Termination of Lease by the City. The
Lease, with respect to a particular Property Group, will be in effect for the Original
Term and for each of the Additional Terms shown in Exhibit B, unless terminated
prior thereto by City as provided in this Section. Immediately upon a Non-
Appropriation Event, City shall give written notice to Lessor to terminate such
Lease and in such event, the Lease with respect to the related Property Group will
terminate at the end of such Original Term or Additional Term then in effect as of
the date of the City's written notice of termination. The City may effect such
termination by giving Lessor such written notice and by paying to Lessor any Lease
Payments and other amounts due under such Lease which have not been paid
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at or the end of the then-current Original Term or Additional Term. In the
event of termination of a Lease, the City will comply with the instructions of
Lessor pursuant to Section 12.3.
Section 4.3. Effect of Lease Termination. Upon termination of a Lease
due to a Non-Appropriation Event with respect to the related Property Group, the
City will not be responsible for the payment of any additional Lease Payments
coming due with respect to succeeding Fiscal Years. If, however, the City has not
delivered possession and conveyed to Lessor or released its interest in the Property
Group within ten days after the date of termination, the termination will
nevertheless be effective, but the City will be responsible for the payment of
damages equal to the amount of the Lease Payments thereafter coming due
under the page of Exhibit B attributable to the number of days after such ten-day
period during which the City fails to take such actions and for any other loss
suffered by Lessor as a result of the City's failure to take such actions as required.
Section 4.4. Termination of Lease Term. The Term of each Lease will
terminate upon the occurrence of the first of the following events:
(a) The termination thereof by the City with respect to the related
Property Group due to a Non-Appropriation Event in accordance with
Section 4.2;
(b) The exercise by the City of its option to purchase Lessor's interest in the
related Property Group and payment of all sums related thereto
pursuant to Article 10;
(c) A default by the City with respect to the related Property Group and
Lessor's election to terminate the Lease with respect to such Property
Group pursuant to Article 12; or
(d) The payment by the City of all Lease Payments and all other amounts
authorized or required to be paid by the City hereunder with respect
to the related Property Group.
Section 4.5. Termination of Agreement. Either Lessor or City may
terminate this Agreement as to any further financings hereunder after the
expiration of the initial five-year term. Notwithstanding the termination, the
Agreement will remain in full force and effect with respect to Leases outstanding
as of the date of such termination, and such Leases may terminate only as
provided in Section 4.4 herein.
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ARTICLE 5. LEASE PAYMENTS
Section 5.1. Lease Payments. City agrees to pay Lease Payments
during this Agreement in the amounts specified in each Exhibit B. Lessor shall
invoice City monthly with each invoice stating the Property Group Lease
number (A-_) and Lease Payment for each Property Group for which
payment is invoiced. Using a format agreed to by the Contract Administrator
and Lessor's authorized representative, City shall make monthly payments on
the first business day of each month; however, the Contract Administrator
reserves the right to change the payment date for future Leases on 90 days'
advance notice to Lessor. All Lease Payments must be paid to Lessor at its
offices at the address specified in the first paragraph of this Agreement, or to
such other person(s) or entity(ies) to which Lessor has assigned such Lease
Payments as specified in Article 11, at such place as such assignee may
designate by written notice to the Contract Administrator. The City shall pay
the Lease Payments exclusively from monies legally available therefor, in
lawful money of the United States of America. Interest, with respect to the
Lease Payments for any Property Group, accrues from the date of Lessor's
payment to Contractor or, if the escrow agreement described in Section 3.6
is utilized, from the date of Lessor's deposit of funds with the escrow agent.
Section 5.2. Current Expense. The obligations of the City under this
Agreement, including its obligation to pay the Lease Payments due with
respect to the Property, in any Fiscal Year for which this Agreement is in effect,
constitutes a current expense of the City for such Fiscal Year and does not
constitute an indebtedness of the City within the meaning of the constitution
and laws of Texas. Nothing herein constitutes a pledge by the City of any
taxes or other monies, other than monies currently appropriated from time to
time by or for the benefit of the City in the annual budget of the City and
the proceeds or Net Proceeds of the Property, to the payment of any Lease
Payment or other amount coming due hereunder.
Section 5.3. Jnterest Component. A portion of each Lease Payment is
paid as and represents the payment of Interest. Exhibit B sets forth the Interest
component of each Lease Payment. The interest rate shall not exceed the
then maximum rate allowed for similar governmental obligations pursuant to
Chapter 1204 of the Texas Government Code, as amended, or such other
applicable laws in effect as of the date of the Schedule.
Lessor agrees that the interest component for each Property Group be
established as follows:
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Amortization Period Applicable Interest Rate
12 Months 61 .48 basis points over the (1 Yr. SOFR Swap x 79%)
18 Months 42.78 basis points over the (1 Yr. SOFR Swap x 79%)
24 Months 52.48 basis points over the (1 Yr. SOFR Swap x 79%)
30 Months 40.88 basis points over the (1 Yr. SOFR Swap x 79%)
36 Months 64.53 basis points over the (2 Yr. SOFR Swap x 79%)
42 Months 54.53 basis points over the (2 Yr. SOFR Swap x 79%)
48 Months 47.03 basis points over the (2 Yr. SOFR Swap x 79%)
60 Months 68.55 basis points over the (3 Yr. SOFR Swap x 79%)
72 Months 64.05 basis points over the (3 Yr. SOFR Swap x 79%)
84 Months 87.33 basis points over the (4 Yr. SOFR Swap x 79%)
120 Months 104.03 basis points over the (5 Yr. SOFR Swap x 79%)
The interest rate will be calculated on the basis of a 360-day year.
Section 5.4. Lease Payments to be Unconditional. The obligation of the
City to make Lease Payments or any other payments required hereunder
during a Lease Term is absolute and unconditional in all events, subject to
non-appropriation. Notwithstanding any dispute between the City and Lessor
or any other person, the City shall make all Lease Payments when due and
shall not withhold any Lease Payment pending final resolution of such dispute
nor shall the City assert any right of set-off or counterclaim against its
obligation to make such Lease Payments required under this Agreement or
any Lease. The City's obligation to make Lease Payments during any Lease
Term shall not be abated through accident or unforeseen circumstances.
However, nothing herein may be construed to release Lessor from the
performance of its obligations hereunder; and if Lessor fails to perform any
such obligation, the City may institute such legal action against Lessor as the
City may deem necessary to compel the performance of such obligations or
to recover damages therefor.
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Section 5.5. No Prepayment Penalty. So long as no default then exists
under this Agreement, the City reserves the right to pre-pay any Property
Group in full without paying any pre-payment penalty by giving Lessor at least
20 days prior written notice (the "Notice Period"). If the City elects to pre-pay
under a Lease, City shall pay to Lessor on the Payment Date following the
Notice Period (the "Prepayment Date") the total of the following: (a) all
accrued Lease Payments interest, taxes, late charges and other amounts
then due and payable under the Lease with respect to the Property Group;
plus (b) the remaining principal balance payable by City under the Lease as
of said Prepayment Date. The City may not exercise its prepayment rights
under this section during the first 12 months of the applicable Lease Term.
Section 5.6. No Other Fees. Other than as specifically provided in this
Agreement, the City will pay Lessor no other fees than the Interest and
Principal as set out herein.
ARTICLE 6. ACTIONS ARISING OUT OF PROPERTY USE:
DAMAGE OR DESTRUCTION OF PROPERTY; INSURANCE
Section 6.1. To the extent permitted by Texas law, the City agrees to
indemnify, protect, save and keep harmless Lessor from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions, costs, and
expenses (including reasonable attorneys' fees) of whatsoever kind or nature,
imposed on, incurred by, or asserted against Lessor that in any way relate to
or arise out of the possession, use, operation, condition or storage of any
Property by the City, unless caused by Lessor or its agents. The City shall not
be required to pay any federal, state, or local income, inheritance, estate,
succession, transfer, gift, franchise, gross receipts, profit, excess profit, capital
stock, corporate or other similar tax payable by Lessor, its successors or assigns.
The City's obligations under this section shall survive any expiration or earlier
termination of any Lease.
Section 6.2. Damage to or Destruction of Property. If after delivery of any
Property to the City, such Property is lost. stolen, destroyed, or damaged beyond
repair (a "Loss"), the City shall, as soon as practicable after such event, either:
(a)Replace the same at the City's sole cost and expense with Property of
equal or greater value to the Property immediately prior to the time of
the Loss occurrence, such replacement equipment to be subject to
Lessor's reasonable approval, whereupon the replacement will be
substituted in the Lease by appropriate endorsement; or
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(b)Pay, on the Payment Date following the Loss, an amount equal to all
Lease Payments and any other amounts relating to such Property Group
then due or past due (including the Lease Payment relating thereto due
on the Payment Date on which the option is to be exercised) and the
applicable Purchase Option Price of the Property as set forth on Exhibit
B (collectively, the "Loss Amount").
The City shall notify Lessor of which course of action it will take within 15 days
after the Loss occurrence and shall complete the action within six months of the
Loss occurrence, provided, if City is not in default hereunder and has not
terminated any Lease under Section 4.2, Lessor may agree to an extension of the
time for performance under clause (a) if the City provides evidence that the
replacement Property has been ordered.
If the City fails or refuses to notify Lessor within the required period, Lessor
may declare the Loss Amount applicable to the Property immediately due and
payable by the City. The Net Proceeds of all insurance payable with respect
to the Property will be used to discharge the City's obligation under this Section.
On payment of the Loss Amount and Net Proceeds, if any, the Lease will no
longer apply to the Property, and the City thereupon becomes entitled to the
Property AS IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS
FOR THE USE CONTEMPLATED BY THE CITY, except that the Property must not be
subject to any lien or encumbrance created by or arising through Lessor.
Section 6.3. Insurance. Lessor understands the City is a governmental entity
with certain protections under Texas law. The City will provide a self-insured letter
to the Lessor within a reasonable time of any request for such letter. Lessor agrees
that the City may self-insure against risk of casualty loss of or physical damage to
the Property; provided, that upon written notice from Lessor to the City, the City
agrees to secure and maintain commercial insurance against risk of casualty loss
of or physical damage to the Property as otherwise required by the Lease if, a
default has occurred and is continuing under this Agreement. Lessor furthermore
agrees that City may maintain insurance against risk of casualty loss of or physical
damage to the Property through the Texas Municipal League Risk Pool.
ARTICLE 7. OTHER OBLIGATIONS OF THE CITY
Section 7.1. Use Permits. The City shall obtain all permits and licenses
necessary for the installation, operation, possession and use of the Property. The
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City shall comply with all state and federal laws applicable to the installation, use,
possession and operation of the Property, and if compliance with any such state
and federal law requires changes or additions to be made to the Property, such
changes or additions shall be made by the City at its expense. City agrees that if
City is required to deliver any item of Property to Lessor or Lessor's agent, the
Property shall be free of all substances which are regulated by or form a basis for
liability under any environmental law. City shall comply with all license and
copyright requirements of any software used in connection with the Property.
Section 7.2. Maintenance of Property by the City. The City shall maintain,
preserve and keep the Property in good repair, working order and condition, and
shall make all repairs and replacements necessary to keep the Property in such
condition.
Section 7.3. Taxes, Other Governmental Charges and Utility Charges. Except
as expressly limited by this Section, the City shall pay all charges of any kind which
are at any time lawfully assessed or levied against the City with respect to the
Property, the Lease Payments or any part thereof, which become due during the
Term of each Lease. The Property which is the subject of this Agreement is owned
and held only for public purposes and devoted exclusively to the use and benefit
of the public and, as such, is exempt from ad valorem property tax. If Lessor
receives any notice of taxes due with respect to the Property, it shall not pay such
taxes but will promptly forward such notice to the Contract Administrator. The City
will also pay when due all gas, water, steam, electricity, heat, power, telephone
and other charges lawfully assessed or levied against the City incurred in the
operation, maintenance, use, occupancy and upkeep of the Property, and all
special assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a lien on the Property; provided that
with respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the City shall be obligated to
pay only such installments as are required to be paid during the Term of the Lease
as and when the same become due.
The City may, at its own expense and in its own 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, utility or other charges so contested to
remain unpaid during the period of such contest and any appeal therefrom unless
Lessor shall notify the City that, in the opinion of Independent Counsel, the basis for
which must be expressly detailed in the opinion, by nonpayment of any such items
the interest of Lessor in the Property will be materially endangered or the Property
or any part thereof will be subject to loss or forfeiture, in which event the City shall
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promptly pay such taxes, assessments, utility or other charges or provide Lessor with
full security against any loss which may result from nonpayment, in a form
satisfactory to Lessor.
The Property acquired pursuant to this Agreement is under the sole
possession and exclusive use of the City as part of the City's governmental
services in furtherance of its public purpose. The City does not make any
representation, implied or otherwise, regarding the exemption or taxability of the
Property for purposes of ad valorem and personal property taxation. All UCC
statements, financing statements, or instruments filed of record to reflect Lessor's
Interest in the Property must state that:
All property made subject of this UCC filing are owned by and
under the sole and exclusive use of the City of Corpus Christi, a
political subdivision of the State of Texas, and are used as part of
the City's governmental services in furtherance of its public
purpose. The City asserts all exemptions provided for political
subdivisions of the State of Texas as authorized under the
Constitution and laws of the State of Texas against the assessment,
levy or charges for ad valorem taxation, personal property
taxation or any other charges.
Upon the occurrence of an Event of Taxability, the interest portion of
any Lease Payment shall be at the Taxable Rate retroactive to the date of
occurrence of the Event of Taxability, and City shall pay such additional
amount as will result in Lessor receiving the interest portion of the Taxable Rate
identified in the Payment Schedule.
Section 7.4. Advances. If the City fails to perform any of its obligations
under this Article, Lessor may, but is not obligated to, take such action as may
be necessary to cure such failure, including the advancement of money, and
the City is obligated to repay all such advances on demand, with interest at
the rate of the existing loan or the maximum rate permitted by law, whichever
is less, from the date of the advance to the date of repayment.
ARTICLE 8. TITLE
Section 8.1. Title. During the Term of each Lease, and so long as the City
is not in default under Article 12, legal title to the Property and any and all
repairs, replacements, substitutions and modification to the Property will be in
the City. Upon termination of a Lease under Section 4.2, or after default of
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the City, full and unencumbered legal title to such Property Group passes to
Lessor, if so required in writing by Lessor, and the City shall have no further
interest therein. In either of such events, the City shall execute and deliver to
Lessor such documents as Lessor may reasonably request to evidence the
passage of legal title to such Property Group to Lessor and the termination of
the City's interest therein, and upon request by Lessor, City will deliver
possession of the Property Group to Lessor in accordance with Section 12.3.
Upon termination of a Lease, with respect to any Property Group through
exercise of the City's option to purchase pursuant to Article 10 or through
payment by the City of all Lease Payments and other amounts relating
thereto, Lessor's security and all other interest in such Property Group
terminates, and Lessor shall execute and deliver to the City such documents
as the Contract Administrator may reasonable request to evidence the
termination of Lessor's security or other interest in such Property Group. In the
event of a default or termination of a Lease, legal title to the Property passes
to the Lessor only if the Lessor so requests.
Section 8.2. Security Interest. Lessor has and retains a security interest,
under the Uniform Commercial Code, in the Property, the proceeds thereof and
all repairs, replacements substitutions and modifications thereto or thereof
made pursuant to Section 8.5, in order to secure the City's payment of all Lease
Payments due during the Term of each Lease and the performance of all other
obligations herein to be performed by the City. In the event such Property is a
motor vehicle, City shall cause the state of registration to note Lessor's security
interest on its records and the Certificate of Title for the vehicle, noting such
address for Lessor as lienholder on the Certificate of Title: JPMORGAN CHASE
BANK, N.A., P.O Box 901098 Fort Worth, Texas 76101. ELT#13499465000. The City,
acting through its Contract Administrator, will join with Lessor in executing such
financing statements or other documents and will perform such acts as Lessor
may request to establish and maintain a valid security interest in the Property.
All UCC statements must indicate that title to a Property Group is in the City and
exempt from ad valorem taxation as public property used for a public purpose
under the constitution and laws of the State of Texas and contain the bold
language of the indented paragraph in Section 7.3. If requested by Lessor, the
City will conspicuously mark the Property with lettering, labels, or tags as are
reasonably approved by the City Manager and maintain such markings during
the Term of a Lease, so as clearly to disclose Lessor's security interest in the
Property. If Lessor requires the Certificate of Title to note Lessor's security interest
in a Property, upon payment in full by City of all Lease Payments and other
related amounts, Lessor must give City a written release of Lessor's security
interest so that the Certificate of Title may be reissued in the name of City without
any security interest.
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Section 8.3. Liens. During the Term of a Lease, the City shall 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 Property, other than the
respective rights of Lessor and the City as herein provided and Permitted
Encumbrances. All Property is exempt from local ad valorem taxation as property
owned by a political subdivision and used for public purposes. Lessor shall not pay
or incur any charge, assessment, or tax on any Property Group for which the City
can claim an exemption from such charges as property used by a political
subdivision of the State of Texas for public purposes as provided by the
constitution and laws of the State of Texas. Except as expressly provided in
Section 7.3 and this Article, the City shall promptly, at its own expense, take such
action as may be necessary to discharge or remove any such mortgage,
pledge, lien, charge, encumbrance or claim if the some arise at any time.
Section 8.4. installation of the City's Property. The City may at any time
in its sole discretion and at its own expense, install other items of equipment
in or upon the Property, which items must be identified by tags or other
symbols affixed thereto as property of the City. All such items so identified
remain the sole property of the City, in which Lessor has no interest, and may
be modified or removed by the City provided that the City must repair and
restore any damage to the Property resulting from the installation,
modification, or removal of any such items. Nothing in this Agreement
prevents the City from purchasing items to be installed pursuant to this Section
under a conditional sale or lease with option to purchase contract, or subject
to a vendor's lien or security agreement, as security for the unpaid portion of
the purchase price thereof, provided that no such lien or security interest
attaches to any part of the Property.
Section 8.5. Modification of Property. The City shall, at its own
expense, have the right to make repairs, replacements, substitutions and
modifications to all or any of the parts of the Property. All such work and
any port or component used or installed to make a repair or as a
replacement, substitution or modification, will thereafter comprise part of
the Property and be subject to the provisions of this Agreement. Such work
must not in any way damage the Property or cause it to be used for
purposes other than those authorized under the provisions of state and
federal law or contemplated by this Agreement; and the Property, upon
completion of any such work must be of a value which is not less than the
value of the Property immediately prior to the commencement of such
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work. Any property for which a replacement or substitution is made
pursuant to this Section may be disposed of by the City in such manner and
on such terms as are determined by the City.
The City will not permit any mechanic's or other lien to be established or
remain against the Property for labor or materials furnished in connection with
any repair, replacement, substitution or modification mode by the City
pursuant to this Section. If any such lien is established, and the City shall first
notify Lessor of the City's intention to do so. the City may in good faith contest
any lien filed or established against the 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 unless Lessor shall notify the
City that, in the opinion of Independent Counsel, the basis for which must be
expressly detailed in the opinion, by non-payment of any such item the
interest of Lessor in the Property will be materially endangered or the Property,
or any part thereof, will be subject to loss or forfeiture. In such event, the City
will promptly pay and cause to be satisfied and discharged all such unpaid
items or provide Lessor with full security against any such loss or forfeiture, in
form satisfactory to Lessor. Lessor will cooperate fully with the City in any such
contest, upon the request and at the expense of the City.
Section 8.6. Personal Property. The Property is and at all times remains
personal property notwithstanding that the Property or any port thereof may
be or hereafter become in any manner affixed or attached to or embedded
in or permanently rested upon real property or any building.
Section 8.6. Use of Property. City shall furnish and permit only duly licensed,
trained, safe and qualified drivers to operate any such unit of Property that is a
motor vehicle, and such drivers shall be agents of City and shall not be agents of
Lessor.
ARTICLE 9. WARRANTIES
Section 9.1. Selection of Property. The Property and the Contractor
have been selected by the City, and Lessor will have no responsibility in
connection with the selection of the Property, its suitability for the use
intended by the City, the acceptance by the Contractor of the order
submitted, or any delay or failure by the Contractor to manufacture, deliver
or install the Property for use by the City. Upon acceptance of the Property,
the City will odd the serial number of the Property to Exhibit A.
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Section 9.2. Installation and Maintenance of Property. Lessor shall have
no obligation to install, erect, test. inspect, service or maintain the Property
under any circumstances, but such actions are the obligation of the City or
the Contractor.
Section 9.3. Contractors' Warranties. Lessor hereby assigns to the City for
and during the Term of the Lease, all of its interest in all Contractors' warranties
and guarantees, express or implied, issued on or applicable to the Property.
and Lessor hereby authorizes the City to obtain the customary services
furnished in connection with such warranties and guarantees at the City's
expense.
Section 9.4. Patent Infringement. Lessor hereby assigns to the City for and
during the Term of the Lease all of its interest in patent indemnity protection
provided by any Contractor with respect to the Property. Such assignment of
patent indemnity protection by Lessor to the City constitutes the entire liability of
Lessor for any patent infringement by Property furnished pursuant to this
Agreement.
Section 9.5.Disclaimer of Warranties. THE PROPERTY IS DELIVERED AS IS, AND
LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO
THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF THE PROPERTY, OR ANY
OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY.
ARTICLE 10. OPTION TO PURCHASE
Section 10.1. When Available, The City has the option to purchase Lessor's
interest in any Property Group on any Payment Date relating thereto for the then
applicable Purchase Option Price set forth in the page of Exhibit B relating
thereto, but only if the City is not in default under this Agreement. and only in the
manner provided in this Article.
Section 10.2. Exercise of Option, The City will give notice to Lessor of its
intention to exercise its option with respect to any Property Group not less than 20
days prior to the Payment Date on which the option is to be exercised and will
deposit with Lessor on the date of exercise an amount equal to all Lease
Payments and any other amounts relating to such Property Group then due or
past due (including the Lease Payment relating thereto due on the Payment Date
on which the option is to be exercised) and the applicable Purchase Option Price
set forth in the page of the respective Exhibit B relating thereto. The closing will be
on the Payment Date on which the option is to be exercised. The City may not
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exercise its prepayment rights under this section during the first 12 months of
the applicable Lease Term.
Section 10.3. Release of Lessor's Interest. Upon execution of the purchase
option with respect to any Property Group by the City, Lessor will convey or
release to the City, all of its right, title and interest in and to the Property Group by
delivering to the Contract Administrator such documents as the City Attorney
deems necessary for this purpose.
ARTICLE 11. ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment of Lessor. All of Lessor's right, title and/or interest in and
to any Property Group, the Lease Payments and other amounts relating thereto due
hereunder, and the right to exercise all rights under this Agreement relating to such
Property Group may be assigned and reassigned in whole or in part to one or more
assignees or subassignees by Lessor at any time, only with the prior written consent
of the City Manager, unless the Lessor continues to bill and service the Lease. No
such assignment will be effective as against the City unless and until the assignor
has filed with the City a copy of written notice thereof identifying the assignee.
The City will pay all Lease Payments due hereunder relating to such Property
Groups to or at the direction of Lessor or the assigned named in the most recent
assignment or notice of assignment with respect to such Property Group filed with
the Contract Administrator. During the Agreement Term, both Lessor and City will
keep a complete and accurate record of all such assignments. In the event
Lessor assigns participants in its right. title. and/or interest in and to any Property
Group, the Lease Payments and other amounts due with respect thereto, and
the rights granted under this Agreement relating thereto, such participants will be
considered to be Lessor with respect to their participated shares thereof. Lessor
may assign its rights under a Lease to an affiliate without notice to the City
provided the Lessor continues to bill and collect Lease Payments and the Lessor
agrees to keep a record of the assignments for purposes of Section 149(a) of the
Internal Revenue Code.
Section 11.2 Assignment by the City, Neither this Agreement nor the City's
interest in the Property may be assigned by the City without the written consent
of Lessor.
Section 11.3. Restriction on Mortgage or Sale of Property by the City.
Except as provided in Section 11.2, the City will not mortgage, sell, assign.
transfer or convey the Property or any portion thereof during the Term of this
Agreement, or permanently remove the same from its boundaries, without the
written consent of Lessor provided that the City may designate the location of
the Property outside the City boundaries in the Certificate of Acceptance.
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ARTICLE 12. EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The following will be "events of
default" under this Agreement with respect to any Property Group and the
terms "events of default" and "default" mean, whenever they are used in this
Agreement, with respect to any Property Group, any one or more of the
following events:
(a) Failure by the City to pay a Lease Payment or other payment
required to be paid under any Lease with respect to any Property
Group at the time specified herein and the continuation of said
failure for a period of ten days after notice given by Lessor in
accordance with Section 13.1 that the payment referred to in such
notice has not been received.
(b) The City fails to perform any of its obligations under Section 6.3, 8.2,
or 11.2.
(c) Any statement by the City in the Agreement or in any writing
delivered by the City pursuant thereto proves at any time to have
been false, misleading or erroneous in any material respect as of
the time when made.
(d) Failure by the City to observe and perform any covenant, condition
or agreement on its part to be observed or performed with respect
to any Property Group, other than as referred to in Clause (i) of this
Section, for a period of 30 days after written notice specifying such
failure. Such notice to the City by the Lessor must request that the
default be remedied, unless Lessor agrees in writing to an extension
of such time prior to its expiration; provided, however, if the failure
stated in the notice cannot be corrected within the applicable
period, Lessor will not unreasonably withhold its consent to an
extension of such time if corrective action is instituted by the City
within the applicable period and diligently pursued until the default
is corrected.
(e) The filing by the City of a voluntary petition in bankruptcy, or failure
by the City promptly to lift any execution, garnishment or
attachment of such consequence as would impair the ability of the
City to carry on its governmental function or adjudication of the
City as a bankrupt, or assignment by the City for the benefit of
creditors, or the approval by a court of competent jurisdiction of
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a petition applicable to the City in any proceedings instituted
under the provisions of the United States Bankruptcy Code, as
amended, or under any similar acts which may hereafter be
enacted.
The provisions of this Section 12.1 and Section 12.2 are subject to the
following limitation: if by reason of force majeure the City is unable in whole
or in part to carry out its obligations under any Lease with respect to any
Property Group, other than its obligation to pay lease Payments with respect
thereto which must be paid when due notwithstanding the provisions of this
paragraph, the City will not be deemed in default during the continuance
of such inability. The term "force majeure" as used herein means, without
limitation, the following: acts of God, strikes, lockouts or other labor
disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America or the State or their respective
departments, agencies or officials, or any civil or military authority;
insurrections; riots; earthquakes; fires; hurricanes; floods; explosions or other
similar causes not reasonably within the control of the City and not resulting
from its negligence. The City agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing the City from carrying
out its obligations under this Agreement; provided that the settlement of
strikes, lockouts and other labor disturbances are entirely within the
discretion of the City Manager and the City Manager is not required to
make settlement of strikes, lockouts, and other labor disturbances by
acceding to the demands of the opposing party or parties when such
course is in the judgment of the City Manager unfavorable to the City.
Section 12.2. Remedies on Default. Whenever any event of default
referred to in Section 12.1 hereof has happened and is continuing with
respect to any Property Group, Lessor may, at its option and without any
further demand or notice, take one or any combination of the following
remedial steps:
(a) Lessor may terminate the Lease with respect to such Property Group
and declare all Lease Payments due thereunder with respect to such
Property Group during the Fiscal Year in effect.
(b) Lessor may terminate the Lease with respect to such Property Group;
and require City to promptly return the Property Group to Lessor in the
manner set forth herein (and City agrees that it shall so return the
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Property), or Lessor may, at its option, repossess the Property Group;
Lessor may enter upon the City's premises where the Property Group is
kept and take possession of the Property Group without demand or
notice, without any court order or other process of law and without
liability for any damage occasioned by such repossession.
(c) If Lessor terminates the Lease with respect to a Property Group and
takes possession of such Property contained therein, Lessor, within
60 days thereafter, must use its best efforts to sell such Property or
any portion thereof in a commercially reasonable manner at public or
private sale in accordance with applicable state laws. Lessor must
apply the proceeds of such sale to pay the following items in the
following order:
(1)all costs incurred in securing possession of the Property Group; (2)
all expenses incurred in completing the sale; (3) the balance of any
Lease Payments with respect to such Property Group owed by the
City during the Fiscal Year then in effect; and (4) the applicable
Purchase Option Price with respect to the Property Group due at
the end of the Fiscal Year. Any sale proceeds remaining after
disbursement pursuant to Clauses (1), (2), (3), and
(4) must be paid to the City.
(d) To the extent allowed by applicable law, Lessor may enforce any and
all rights to payment by mandamus.
Section 12.3. Return of Property. Upon the expiration or termination by the
City of a Lease with respect to any Property Group prior to the payment of all
Lease Payments in accordance with the related Exhibit B, the City must
transfer title to the Property Group to Lessor if Lessor so instructs in writing and
return such Property Group to Lessor in the condition, repair, appearance and
working order required in Section 7.2, in the following manner as may be
specified by Lessor:
(a) By delivering the Property Group at the City's cost and expense to
such place within Texas as Lessor specifies; or
(b) by loading such portions of the Property Group as are considered
movable at the City's cost and expense, on board such carrier as
Lessor specifies and shipping the same, insurance freight prepaid,
to the place within Texas specified by Lessor. If the City refuses to
return the Property Group in the manner designated, the Lease
shall remain in full force including, without limitation, the obligations
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to pay Lease Payment and to insure the Property, or Lessor may
repossess the Property Group and charge to the City the costs of
such repossession or pursue any remedy described in Section 12.2.
Once Lessor repossesses the Property Group, the Lease shall
terminate, and the City shall have no obligation to make Lease
Payments.
Section 12.4. No Remedy Exclusive. No remedy conferred upon or
reserved to Lessor by this Article is intended to be exclusive and every such
remedy is cumulative and in addition to every other remedy given under this
Agreement or under applicable law. No delay or omission to exercise any
right or power accruing upon any default impair any such right or power or
may be construed as a waiver thereof but any such right and power may be
exercised from time to time and as often as may be deemed expedient by
Lessor or its assignee.
Section 12.5. Agreement to Pay Attorneys' Fees and Expenses. In the
event either party to this Agreement defaults under any of the provisions
hereof and the non-defaulting party employs attorneys and/or incurs other
expenses for the collection of monies or for the enforcement or performance
or observance of any obligation or agreement on the part of the defaulting
party herein contained, the parties agree that attorneys' fees and expenses
will be paid as authorized by law.
Section 12.6. Late Charge. Whenever any event of default referred
to in Section 12.1, Clause (a) hereof has happened and is continuing with
respect to any Property Group, Lessor has the right, at its option and without
any further demand or notice, to require a late payment charge for each
thirty (30) day period or part thereof during which such event of default occurs
equal to existing interest rate of the delinquent amount not to exceed the
maximum authorized by law and the City will be obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor; provided,
however, that this Section 12.6 will not be applicable if or to the extent that
the application thereof would affect the validity of this Agreement.
ARTICLE 13. ADMINISTRATIVE PROVISIONS
Section 13.1. Notices. All notices, certificates, legal opinions or other
communications hereunder will be sufficiently given and will be deemed given
when delivered or deposited in the United States mail, in certified form with
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postage fully prepaid, to the addresses specified in this Agreement; provided
that Lessor and the City, by notice given hereunder, may designate different
addresses to which subsequent notices, certificates, legal opinions or other
communications will be sent. Unless otherwise changed by written notice, all
notices required under this Agreement must be directed to the following
address:
CITY: LESSOR:
City Treasurer 1 1 11 Polaris Parkway
Corpus Christi City Hall Suite 1 A- OH 1 - 1085
1201 Leopard Street Columbus, Ohio 43240-2050
4th Floor Attn: GHHN Operations Manager
Corpus Christi, TX 78401
Phone (361 ) 826-3651
Fax (361) 826-3601 cefi.escrow.disbursement.request@jpmchase.com
Daily communications between Contract Administrator and Lessor will
be primarily documented by written notices sent by electronic mail (email). For
daily, routine communications, email notice is adequate. For formal notice
required by any Article or Section of this Agreement, email notice, if any, must
be followed by United States certified mail notice.
Section 13.2. Financial Information. During the Term of this Agreement,
the Contract Administrator annually will provide Lessor with current financial
statements, budgets, proof of appropriation of the ensuing Fiscal Year and
such other financial information relating to the ability of the City to continue this
Agreement as may be reasonably requested by Lessor or its assignee within 30
days of written request therefor.
Section 13.3. Binding Effect. This Agreement inures to the benefit of and
will be binding upon Lessor and the City and their respective successors and
assigns. This Agreement must not be construed to confer any rights, duties, or
interest on any party not a successor in interest or assignee of Lessor or the City
nor may any such party rely on this Agreement as evidence of any duty, right
or obligation of Lessor or the City unless both the Lessor and the City, or their
successors and assigns, acknowledge such duty, right or obligation in writing,
directly addressed to such third party.
Section 13.4. Usury. It is the intention of the parties hereto to comply with
any applicable usuary laws; accordingly, it is agreed that, notwithstanding any
provisions to the contrary herein or in any Exhibit A, in no event does this
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Agreement or any Lease hereunder require the payment or permit the
collection of Interest or fees in excess of the maximum amount permitted by
applicable law. Any such excess interest or fees must first be applied to reduce
Principal, and when no Principal remains, refunded to City. In determining
whether the Interest paid or payable exceeds the highest lawful rate, the total
amount of Interest must be spread through the applicable Lease Term so that
the Interest is uniform through such term.
Section 13.5. Amendments. Changes and Modifications. This Agreement
may be amended or any of its terms modified only by written agreement in a
document executed and delivered by authorized representatives of both the
Lessor and the City.
Section 13.6. Captions. The captions or headings in this Agreement
are for convenience only and in no way define, limit, or describe the scope
or intent of any provisions, articles, sections, or clauses of this Agreement.
Section 13.7. Further Assurances and Corrective Instruments, Lessor
and the City agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may reasonably be required
for correcting any inadequate or incorrect description of the Property hereby
leased or intended so to be, or for otherwise carrying out the expressed intention
of this Agreement. The Contract Administrator is hereby authorized by the City
Manager to execute such addenda as attached hereto as Exhibits for each
Property Group and such other instruments, including, but not limited to: UCC
statements, Bills of Sale, etc., that are necessary to carry out the responsibilities,
duties and obligations required of the City in accordance with the terms and
conditions of this Agreement.
Section 13.8. Execution in Counterparts. This Agreement and each
Schedule may be simultaneously executed in several counterparts, each of
which constitute an original and all of which constitute but one and the same
instrument. If more than one counterpart of a Schedule is executed by City
and Lessor, then only one may be marked "Lessor's Original" by Lessor. A
security interest in any Schedule may be created through transfer and
possession only if the sole original of said Schedule if there is only one original;
or the counterpart marked "Lessor's Original" if there are multiple counterparts
of said Schedule.
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(b) Definitions. For the purposes of this Section, the following terms shall have
the following meanings: "Anti-Corruption Laws" means all laws, rules, and
regulations of any jurisdiction applicable to the City from time to time
concerning or relating to bribery or corruption. "Person" means any
individual, corporation, partnership, limited liability company, joint
venture, joint stock association, association, bank, business trust, trust,
unincorporated organization, any foreign governmental authority, the
United States of America, any state of the United States and any political
subdivision of any of the foregoing or any other form of entity. "Sanctions"
means economic or financial sanctions or trade embargoes imposed,
administered, or enforced from time to time by the U S. government,
including those administered by the Office of Foreign Assets Control of
the U.S. Department of the Treasury or the U.S. Department of State.
"Sanctioned Country" means, at any time, a country or territory which is
the subject or target of any Sanctions. "Sanctioned Person" means, at
any time (1 ) any Person listed in any Sanctions-related list of designated
Persons maintained by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, (2) any
Person operating, organized or resident in a Sanctioned Country, or
(3)any Person controlled by any such Person.
Section 13.15. Verification Regarding Israel. In accordance with
Chapter 2270, Texas Government Code, the City may not enter into a
contract with a company for goods or services unless the contract contains a
written verification from the company that it: (a) does not boycott Israel; and
(b) will not boycott Israel during the term of the contract. Pursuant to Section
2270.002, Texas Government Code, the Lessor hereby represents that it does
not boycott Israel and, subject to or as otherwise required by applicable
federal law, including without limitation, 50 U.S.C. Section 4607, the Lessor
agrees not to boycott Israel during the term of this Agreement. "Boycott
Israel" which shall have the meaning given such term in Section 2270.002,
Texas Government Code.
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed in its
corporate name by its duly authorized officer; and the City has caused this
Agreement to be executed in its name by its City Manager, or designee.
Page 30 of 39
City of Corpus Christi Approved as to form:E?'- 423
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hfri/t4( ,q4,; edi73A-1-- S 102-3/d 05 dry/I!/ I 0
Asst-nt City At orney or
Director of Finance Date Fo y Attorney
L OR: JPMOR N CHASE :i, K, NA.
Xu �N,t A ) 7, Li)(--
Printed Name: Cr �. AY1rl _ ��_
Title: Authorized O fiver J
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ATTEST: 21La.„......w.w.,,,,avag.
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RE CC UEF�TA IT mom .____ „„
CITY SECRETARY
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Page 31 of 39
Exhibit A
PROPERTY DESCRIPTION
The following Property comprises a Property Group which is subject to the terms
and conditions of that certain Master Lease-Purchase Agreement entered into by
and between the City of Corpus Christi and
(Lessor) dated the day of
Quantity Description Serial Number
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS, AND SUBSTITUTIONS THERETO.
All Property made subject of this Agreement is owned by and under the sole
and exclusive use of the City of Corpus Christi, a political subdivision of the State
of Texas, and is used as part of the City's governmental services in furtherance of
its public purpose. The City asserts all exemptions provided for political
subdivisions of the State of Texas as authorized under the Constitution and laws of
the State of Texas against the assessment, levy or charges for ad valorem taxation,
personal property taxation or any other charges.
LESSOR
By:
Name:
Title:
Date:
CITY OF CORPUS CHRISTI
Name Date
Director of Finance
Page 32 of 39
Exhibit B
SCHEDULE OF LEASE PAYMENTS RELATING TO PROPERTY
The following schedule of Lease Payments constitutes the applicable payments
for the Property Group described in Exhibit A attached to that certain Master
Lease-Purchase Agreement entered by and between the City of Corpus Christi
and (Lessor) dated the day of
Due Payment Total Principal Interest Purchase
Date Number Payment Component Component Option
Price
All Property made subject of this Agreement is owned by and under the sole
and exclusive use of the City of Corpus Christi, a political subdivision of the State
of Texas, and is used as part of the City's governmental services in furtherance of
its public purpose. The City asserts all exemptions provided for political
subdivisions of the State of Texas as authorized under the Constitution and laws of
the State of Texas against the assessment, levy, or charges for ad valorem taxation
personal property taxation or any other charges.
LESSOR: CITY OF CORPUS CHRISTI
By:
Name: Name
Title: Director of Finance
Date: Date:
Page 33 of 39
Exhibit C
CERTIFICATE OF ACCEPTANCE
I, the undersigned, hereby certify that I am the duly qualified and acting
Director of Finance of the City of Corpus Christi (the City), and with respect to the
Master Lease-Purchase Agreement dated , _, (the Agreement), by
and between Lessor and the City that:
1. The Property listed on Exhibit A (the Property Group) has been delivered and
installed in accordance with the City's Specifications (as that term is defined in
the Agreement) and has been fully tested and finally accepted by the City. The
serial vehicle identification number(s) of the Property Group is/are listed on
Exhibit A.
2. The Lease Payments provided for on the page of Exhibit B relating to such
Property Group (the Lease Payments) shall commence monthly beginning
, and be due and payable on the first business day of each
month thereafter.
3. The City has appropriated and/or taken other lawful actions necessary to
provide monies sufficient to pay all Lease Payments required to be paid under
the Lease during the current fiscal year of City, and such monies will be applied
in payment of all such Lease Payments due and payable during such current
fiscal year.
4. During the Lease Term (as defined in the Agreement) the Property Group will be
used by the City to perform essential governmental functions devoted exclusively
to public use. Such functions are:
5. The City has not terminated any Lease under Section 4.2 of the Agreement and
no event of default has occurred thereunder.
6. There is no litigation, action, suit or proceeding pending before any court,
administrative agency, arbitrator, or governmental body, that challenges the
organization or existence of the City; the authority of the City or its officers or its
employees to enter into the Lease; the proper authorization, approval, and
execution of the Lease and other documents contemplated thereby; the
appropriation of monies, or any other action taken by the City to provide monies,
sufficient to make Lease Payments coming due under the Lease in the City's
current fiscal year; or the ability of the City otherwise to perform its obligations
under the Lease and the transaction contemplated thereby.
Page 34 of 39
LESSOR: CITY OF CORPUS CHRISTI
By:
Name: Name
Title: Director of Finance
Date: Date:
Page 35 of 39
Exhibit D
OPINION OF COUNSEL
Re: Master Lease-Purchase Agreement dated as of the day of
by and between the City of Corpus Christi ("City") and
("Lessor").
Dear Sir or Madam:
I have acted as counsel to the City with respect to the Master Lease-Purchase
Agreement described above and all exhibits, addenda and other agreements
thereto (collectively, the "Agreement") and various related matters, and in this
capacity have reviewed a duplicate original or certified copy of the Agreement and
the Exhibits attached thereto. Based upon the examination of these and such other
documents as I deem relevant, it is my opinion that:
1. The City is a municipal corporation and political subdivision of the State of
Texas, duly organized, existing, and operating under the Constitution and
laws of the State of Texas.
2. The City is authorized and has power under applicable law to enter into the
Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3. The Agreement has been duly authorized, approved, executed and
delivered by and on behalf of the City, and is a valid and binding contract
of the City enforceable in accordance with its terms, except to the extent
limited by state and federal laws affecting remedies and by bankruptcy,
reorganization or other laws of general application relating to or affecting
the enforcement of creditor's rights.
4. The authorization, approval and execution of the Agreement and all other
proceedings of the City relating to the transactions contemplated thereby
have been performed in accordance with all applicable open meeting,
public bidding and all other laws, rules and regulations of the State of Texas.
5. The execution of the Agreement and the appropriation of monies to pay
the Lease Payments coming due thereunder do not result in the violation of
any constitutional, statutory or other limitation relating to the manner, form
or amount of indebtedness which may be incurred by the City.
6. There is no litigation, action, suit or proceeding pending before any court,
Page 36 of 39
administrative agency, arbitrator or governmental body, that challenges
the organization or existence of the City; the authority of the City or its
officers or its employees to enter into the Agreement; the proper
authorization, approval and/or execution of the Agreement, Exhibits
thereto and other documents contemplated thereby; the appropriation of
monies to make Lease Payments under each Lease for the current fiscal
year of the City; or the ability of the City otherwise to perform its obligations
under the Agreement and the transactions contemplated thereby.
7. The Agreement was duly and validly adopted by official action of the
governing body of the City of Corpus Christi on this the day of
, and such official action has not been amended
or repealed and remains in full force and effect.
8. Lessor and any of its assigns may rely on this opinion.
Dated: By:_
City Attorney
City of Corpus Christi
Page 37 of 39
EXHIBIT E
Standard Form Lease Line of Credit
Lease Line of Credit No.
LEASE LINE OF CREDIT REQUISITION AND RECEIVING REPORT
City of Corpus Christi
P.O. Box 9277
Corpus Christi, Texas 78469-9277
CITY CONTACT:
CONTACT TELEPHONE: (361) 826-3651 FAX: (361) 826-3601
BUDGETED EQUIPMENT COST:
FINANCING TERM: 36 mo , 42 mo , 48 mo
60 mo , 84 mo 120 mo , Other (specify)
TOTAL APPROXIMATE COST: $
IS THE FIRST YEAR PAYMENT APPROPRIATED:
Yes No (explain)
PHONE NO:
DATE:
ACTIVITY NAME:
ACCOUNT/FUND/ORG:
DEPARTMENT CONTACT:
DEPARTMENT APPROVAL:
Acknowledged by Lessor:
Signature
Name:
Page 38 of 39
EQUIPMENT: Complete One Form Per Line Item and Attach Specification.
Describe equipment (non-technical description) including quantity to be ordered.
ESSENTIAL USE:
❑ Check if the proposed equipment is replacement. State the age of the
equipment being replaced, why the proposed equipment is needed and its
estimated useful life.
❑ Check if the proposed equipment is additional. State why the equipment is
needed and the estimated useful life.
Page 39 of 39
OPINION OF COUNSEL
Re: Master Lease-Purchase Financing Agreement dated as of the 15th day of August,
2023, by and between the City of Corpus Christi ("City") and JPMorgan Chase Bank,
N.A. ("Lessor").
Dear Sir or Madam:
I have acted as counsel to the City with respect to the Master Lease-Purchase
Agreement described above and all exhibits, addenda and other agreements thereto
(collectively, the "Agreement") and various related matters, and, in this capacity,
have reviewed a duplicate original or certified copy of the Agreement and the Exhibits
attached thereto. Based upon the examination of these and such other documents
as I deem relevant, it is my opinion that:
1. The City is a municipal corporation and political subdivision of the State of
Texas, duly organized, existing, and operating under the Constitution and
laws of the State of Texas.
2. The City is authorized and has power under applicable law to enter into the
Agreement, and to carry out its obligations thereunder and the transactions
contemplated thereby.
3. The Agreement has been duly authorized, approved, executed and
delivered by and on behalf of the City, and is a valid and binding contract of
the City enforceable in accordance with its terms, except to the extent
limited by state and federal laws affecting remedies and by bankruptcy,
reorganization or other laws of general application relating to or affecting
the enforcement of creditor's rights.
4. The authorization, approval and execution of the Agreement and all other
,y proceedings of the City relating to the transactions contemplated thereby
have been performed in accordance with all applicable open meeting,
public bidding and all other laws, rules and regulations of the State of Texas.
5. The execution of the Agreement and the appropriation of monies to pay the
Lease Payments coming due thereunder do not result in the violation of any
constitutional, statutory or other limitation relating to the manner, form or
amount of indebtedness which may be incurred by the City. There is no
litigation, action, suit or proceeding pending before any court,
administrative agency, arbitrator or governmental body, that challenges the
organization or existence of the City; the authority of the City or its officers or
its employees to enter into the Agreement; the proper authorization,
approval and/or execution of the Agreement, Exhibits thereto and other
documents contemplated thereby; the appropriation of monies to make
Lease Payments under each Lease for the current fiscal year of the City; or
the ability of the City otherwise to perform its obligations under the Agreement
and the transactions contemplated thereby.
6. The Agreement was duly and validly adopted by official action of the
governing body of the City of Corpus Christi on this the 15th day of August,
2023, and such official action has not been amended or repealed and
remains in full force and effect.
7. Lessor and any of its assigns may rely on this opinion.
g/Qc -/c,23
Dated: By: _ ,+ 4/ / `, �
Citydorney
City • Corpus Christi