HomeMy WebLinkAboutC2018-371 - 7/24/2018 - Approved MASTER LEASE-PURCHASE FINANCING AGREEMENT
BETWEEN
The City of Corpus Christi, as Lessee
and
JPMORGAN CHASE BANK, N.A., as Lessor
THIS MASTER LEASE-PURCHASE FINANCING AGREEMENT (the Agreement), is
by and between JPMorgan Chase Bank, N.A., a National Banking Association
formed under the laws of the United States, possessing a Certificate of Authority
under Charter No. 8 from the United States Comptroller of Currency, as lessor
(Lessor) whose address is 1111 Polaris Parkway, Suite A3 (OH-1085), Columbus,
OH 43240, and 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
this 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 .
C.2018-371
7/24/18
M2018-117
JP Morgan Chase Bank NA Page 1 of 35
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 the Director of Financial Services 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 earliest 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.
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.
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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 filed 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.
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.
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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 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 15th annually,
which will list all Property budgeted for lease-purchase during subsequent fiscal
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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 reasonably 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, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of the City. The
City represents, covenants, and warrants as follows:
(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.
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(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.
(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
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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.
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).
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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 three business days of receipt 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;
(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 three business days of Lessor's receipt 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 within three
business days of 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.
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Section 3.4. Possession and Enjoyment. 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,
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 two
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. The City and the Lessor may extend this Agreement for up to three
additional one-year terms. Each additional agreement period will commence
by issuance of an amendment by the City unless the City or Lessor notifies the
other party in writing at least 90 days prior to the end of the then-current term,
that it wishes not to renew the Agreement or wishes to modify the terms of this
Agreement. 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
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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 at or before 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 two-year term or after the expiration of any annual
extension term by giving at least 90 days' advance written notice to the other in
the manner set out in Section 13.1 herein. Notwithstanding the termination, the
Agreement will remain in full force and effect with respect to Leases outstanding
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as of the date of such termination, and such Leases may terminate only as
provided in Section 4.4 herein.
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. Interest 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:
Amortization Period Applicable Interest Rate
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12 months 181 .2 basis points over/under the (1 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
18 months 158.2 basis points over/under the (1 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
24 months 150.1 basis points over/under the (1 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
30 months 145.7 basis points over/under the (1 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
36 months 137.1 basis points over/under the (2 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
42 months 138.5 basis points over/under the (2 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
48 months 141 .4 basis points over/under the (2 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
60 months 140.8 basis points over/under the (3 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
72 months 146.9 basis points over/under the (3 Yr.
SWAP x 62.42%) rate from the ICE
-- Index.
84 months 148.3 basis points over/under the (4 Yr.
SWAP x 62.42%) rate from the
Index.
120 months 165.1 basis points over/under the (5 Yr.
SWAP x 62.42%) rate from the ICE
__ Index.
The interest rate will be calculated on the basis of a 360-day year.
Page 12 of 35
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.
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.
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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
(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
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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
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
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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 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 modifications to the Property will be in
the City. Upon termination of a Lease under Section 4.2, or after default of 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
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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 reasonably
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., 1111 Polaris Parkway, Suite 3A, Columbus, Ohio 43240-2050. 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.
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
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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 same 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 part 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 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 made 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
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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 part 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 add the serial number
of the Property to Exhibit A.
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.
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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 exercise its option under this Article 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
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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.
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:
(i) 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.
(ii) The City fails to perform any of its obligations under Section
6.3, 8.2, or 11 .2.
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(iii) 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.
(iv) 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.
(v) 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 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.
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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:
(i) 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.
(ii) 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
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.
(iii) 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:
(a) all costs incurred in securing possession of the Property Group; (b) all
expenses incurred in completing the sale; (c) the balance of any Lease
Payments with respect to such Property Group owed by the City during
the Fiscal Year then in effect; and (d) 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 (a),
(b), (c), and (d) must be paid to the City.
(iv) 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:
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(i) by delivering the Property Group at the City's cost and expense
to such place within Texas as Lessor specifies; or
(ii) 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 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 (i) 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
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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
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
addresses:
CITY: LESSOR:
City Treasurer 1 1 1 1 Polaris Parkway
Corpus Christi City Hall Suite 3A - OH 1-1085
1201 Leopard Street Columbus, Ohio 43240-2050
4th Floor Attn: GHHN Operations Manager
Corpus Christi, TX 78401
Phone (361 ) 826-3604 Phone: 800-876-2601
Fax (361 ) 826-3601 Email: cefi.escrow.disbursement.request@jpmchase.com
Daily communications between Contract Administrator and Lessor will be
primarily documented by written notices sent by electronic mail (e-mail). For
daily, routine communications e-mail notice is adequate. For formal notice
required by any Article or Section of this Agreement, e-mail 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 usury laws; accordingly, it is agreed that, notwithstanding any
provisions to the contrary herein or in any Exhibit A, in no event does this
Agreement or any Lease hereunder require the payment or permit the
collection of Interest or fees in excess of the maximum amount permitted by
Page 25 of 35
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
of: 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.
Section 13.9. Applicable Law. This Agreement must be governed by and
construed in accordance with the laws of Texas.
Section 13.10. Entire Agreement. This Agreement, and all addenda and
exhibits, as may hereafter be executed, constitute the entire agreement
between the parties and supersede all previous negotiations, commitments and
contracts, whether written or oral, and may not be contradicted or varied by
Page 26 of 35
evidence of prior, contemporaneous or subsequent oral agreements or
discussions of the Parties hereto.
Section 13.11. Severability. In the event any provision of this Agreement is
held invalid or unenforceable by any court of competent jurisdiction, such
holding does not invalidate or render unenforceable any other provision hereof.
To the extent any term herein creates a pecuniary obligation which constitutes
a "debt" not payable under current revenues under Sections 5 and 7 of Article II
of the Texas Constitution, such provision will be applied only to the extent
performance or assumption of such obligation by the City is enforceable and
valid under the constitution and laws of Texas.
Section 13.12. Jury Waiver. All Parties to this Agreement waive all rights to
trial by jury in any action, proceeding or counterclaim brought by any party
against any other party on any matter whatsoever arising out of, in connection
with, or in any way related to this Agreement and any Lease.
Section 13.13. No Waiver. Nothing in this Agreement is intended, nor may it
be deemed, to waive any governmental, official, or other immunity or defense
of any of the Parties or their officers, employees, representatives, and agents as
a result of the execution of this Agreement and the performance of the
covenants contained in this Agreement.
Section 13.14. Anti-Corruption and Sanctions Representations.
(i) Use of Proceeds. The City shall not use, or permit any proceeds of the
Agreement to be used, directly or indirectly, by the City or its respective
directors, officers, employees and agents: (1 ) in furtherance of an offer,
payment, promise to pay, or authorization of the payment or giving of money,
or anything else of value, to any Person in violation of any Anti-Corruption Laws;
(2) for the purpose of funding, financing or facilitating any activity, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country; or
(3) in any manner that would result in the violation of any Sanctions applicable
to any Party hereto.
(ii) 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
Page 27 of 35
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, (a)
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, (b) any Person operating, organized or resident in
a Sanctioned Country or (c) 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: (1 ) does not boycott Israel; and (2) 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.
CITY OF CORPUS CHRISTI
Constance Sanchez Date
Director of Financial Services
LESSOR: JPMORGAN CHASE BANK, N.A. ATTEST: `e-LC-M--0/`-'4A-
R :ECCA
HUERTA
Date: 06/15/2018 CITY SECRETARY
By:
Printed Name: Mary C. Heubach
Title: Authorized Officer
A'proved as to form:_/d
if/
1�2� �� l 11
• AUIMu►ut.. Assistant City Attorney
sr mom 2 8 For City Attorney
Page 28 of 35
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 , 20
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
Constance Sanchez Date
Director of Financial Services
Page 29 of 35
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
, 20 .
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: Constance Sanchez
Title: Director of Financial Services
Date: Date:
Page 30 of 35
Exhibit C
CERTIFICATE OF ACCEPTANCE
I, the undersigned, hereby certify that I am the duly qualified and acting Director
of Financial Services 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.
LESSOR: CITY OF CORPUS CHRISTI
By:
Name: Constance Sanchez
Title: Director of Financial Services
Date: Date:
Page 31 of 35
Exhibit D
OPINION OF COUNSEL
Re: Master Lease-Purchase Agreement dated as of the ZL-l".1/4 day of
Zoi5C, 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 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, administrative agency, arbitrator or governmental body, that challenges
Page 32 of 35
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 z-tfi' day of "x...11 Z,AQ-,
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: (Dim it- By: L4iteed
y City Attorney
City of Corpus Christi
Page 33 of 35
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:
(Please Print/Type)
Page 34 of 35
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 35 of 35