HomeMy WebLinkAboutC01-193 Municipal Lease and option agreement with First Bankers Corp.CL L1
MUNICIPAL LEASE AND OPTION AGREEMENT
LESSOR: First Bankers Corporation �//i ' � ?
P.O. Box 781165 Jf ` C C 1 t �t.
Indianapolis, IN 46268
(877) 888 -1776 AL ta—t
LESSEE: Eagle, County of
PO Box 359
0885 East Chamers Avenue
Eagle, CO 81631
LEASE No.: EAG- 060101 -005
This Municipal Lease and Option Agreement (the "Agreement ") entered into between First Bankers Corporation
( "Lessor ") and Eagle, County of ( "Lessee "), a body corporate and politic duly organized and existing under the laws of the State
of Colorado ( "State ");
WITNESSETH:
WHEREAS, Lessor desires to lease the Equipment, as hereinafter defined, to Lessee, and Lessee desires to lease the Equipment from Lessor, subject to the terms and
conditions of and for the purposes set forth in this Agreement; and
WHEREAS, Lessee is authorized under the law to enter into this Agreement for the purposes set forth herein;
NOW, THEREFORE, for and in consideration of the premises hereinafter contained, the parties hereby agree as follows:
ARTICLE I. COVENANTS OF LESSEE
Lessee represents, covenants and warrants, for the benefit of Lessor and its assignees, as follows:
(a) Lessee is a public body, corporate and politic, duly organized and existing under the Constitution and laws of the State.
(b) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a body corporate and politic.
(c) Lessee is authorized under the Constitution and laws of the State to enter into this Agreement and the transaction contemplated hereby, and to perform all of
its obligations hereunder.
(d) Lessee has been duly authorized to execute and deliver this Agreement under the terms and provisions of the resolution of its governing body, attached
hereto as Exhibit A, or by other appropriate official approval, and further represents, covenants and warrants that all requirements have been met, and procedures have
occurred in order to ensure the enforceability of this Agreement, and Lessee has complied with such public bidding requirements as may be applicable to this Agreement
and the acquisition by Lessee of the Equipment hereunder. Lessee shall cause to be executed an opinion of its counsel substantially in the form attached hereto as Exhibit 13.
(e) During the term of this Agreement, the Equipment will be used by Lessee only for the purpose of performing one or more governmental or proprietary
functions of Lessee consistent with the permissible scope of Lessee's authority and will not be used in a trade or business of any person or entity other than the Lessee.
(f) During the period this Agreement is in force, Lessee will annually provide Lessor with current financial statements, budgets, proof of appropriation for the
ensuing fiscal year and such other financial information relating to the ability of Lessee to continue this Agreement as may be reasonably requested by Lessor or its
assignee.
(g) The Equipment will have a useful life in the hands of the Lessee that is substantially in excess of the Original Term and all Renewal Terms.
(h) The Equipment is, and during the period this Agreement is in force will remain, personal property and when subjected to use by the Lessee under this
Agreement, will not be or become fixtures.
(i) The Equipment is essential to the function of the Lessee and the services provided to its citizens, and will be used throughout the period that this Agreement
is in force for the purpose of performing one or more governmental or proprietary functions with the permissible scope of its authority.
0) During the term of this Agreement, Lessee will not dispose of or sell any part of the Equipment.
(k) Lessee has not terminated a lease, rental agreement, installment purchase contract, or any other type of such agreement in the past five (5) years as a result of
insufficient funds being appropriated for payments due under such an agreement.
ARTICLE II. DEFINITIONS
The following terms will have the meanings indicated below unless the context clearly requires otherwise:
"Agreement" means this Municipal Lease and Option Agreement, including the Exhibits attached hereto, as the same may be supplemented or amended from time to time in
accordance with the terms hereof.
"Commencement Date" is the date when the terms of this Agreement begins and Lessee's obligation to pay rent accrues, which date shall be the date as indicated on the
Commencement Certificate attached hereto as Exhibit F.
"Equipment" means the property described in Exhibit C and which is the subject of this Agreement.
"Lease Term" means the Original Term and all Renewal Terms provided for in this Agreement under Section 3.01.
"Lessee" means the entity which is described in the first paragraph of this Agreement and which is leasing the Equipment from Lessor under the provisions of this
Agreement.
"Lessor" means (i) the entity which is described in the first paragraph of this agreement and is leasing the equipment to the Lessee hereunder, (ii) any surviving, resulting or
transferee corporation; and (iii) except where the context requires otherwise, any assignee(s) of Lessor.
Original Term" means the period from the Commencement Date until the end of the fiscal year of Lessee in effect at the Commencement Date.
"Purchase Price" means the amount identified as the Early Termination/Purchase Option existing as of any date after payment of all Rental Payments (defined below) due
through such date as set forth in Exhibit E hereto.
"Renewal Terms" means the automatic renewal terms of this Agreement as provided for in Article III of this Agreement, each having a duration of one year and a term co-
extensive with the Lessee's fiscal year except the last of such automatic renewal terms which shall end on the due date of the last Rental Payment set forth in Exhibit E
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Lease Number: EAG- 060101 -005
to this Agreement.
"Rental Payments" means the basic rental payments payable by Lessee pursuant to the provisions of this Agreement during the Lease Term, payable in consideration of the
right of Lessee to use the Equipment during the then current portion of the Lease Term. Rental Payments shall be payable by Lessee to the Lessor or its assignee in the
amounts and at the times during the Lease Term, as set forth in Exhibit E of this Agreement.
"Vendor" means the manufacturer of the Equipment as well as the agents or dealers of the manufacturer from whom Lessor purchased or is purchasing the Equipment.
ARTICLE III. LEASE TERM
Section 3.01. Lease of Equipment. Lessor hereby demises, leases and lets to Lessee, and Lessee rents, leases and hires from Lessor, the Equipment, in accordance with
the provisions of this Agreement, to have and to hold for the Lease Term. Lessor hereby covenants to provide Lessee during the Lease Term with quiet use and enjoyment
of the Equipment, and Lessee shall during the Lease Term peaceably and quietly have and hold and enjoy the Equipment, without suit, trouble or hindrance from Lessor,
except as expressly set forth in this Agreement. Lessor shall have the right at all reasonable times during business hours to enter into and upon the property of Lessee for the
purpose of inspecting the Equipment.
Section 3.02. Commencement of Lease Term. The Original Term of this Agreement shall commence on the Commencement Date as indicated in Exhibit F and shall
terminate the last day of Lessee's current fiscal year. The Lease Term will be automatically renewed at the end of the Original Term or any Renewal Term for an additional
one year, unless it is terminated as the result of a non - appropriation pursuant to Section 4.06. The terms and conditions during any Renewal Term shall be the same as the
terms and conditions during the Original Term, except that the Rental Payments shall be as provided in Exhibit E of this Agreement. Upon completion of the payments as
enumerated in Exhibit E, as shown or as amended, all renewal terms shall cease.
Section 3.03. Termination of Lease Term. The Lease Term will terminate upon the earliest of any of the following events:
(a) The expiration of the Original Tenn or any Renewal Tenn of this Agreement and the nonrenewal of this
Agreement in the event of non - appropriation of funds pursuant to Section 4.06;
(b) The exercise of Lessee of the option to purchase the Equipment granted under the provisions of Articles V or VII of this Agreement;
(c) A default by Lessee and Lessor's election to terminate this Agreement under Article X; or
(d) The payment by Lessee of all Rental Payments authorized or required to be paid by Lessee hereunder.
Section 3.04. Return of Equipment on Termination. Upon expiration or earlier termination of the Original Term or any Renewal Term under any provision of this
Agreement at a time when Lessee does not exercise its option to purchase the Equipment granted under the provisions of Articles V or VII of this Agreement, Lessee shall
deliver the Equipment to Lessor in the same condition as existed at the Commencement Date, ordinary wear and tear expected, packaged or otherwise prepared in a manner
suitable by shipment by truck or rail common carrier at a location specified by Lessor.
ARTICLE IV. RENTAL PAYMENTS
Section 4.01. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental
Payments hereunder shall constitute a current expense of Lessee and shall not in any way be construed to be a debt of Lessee in contravention of any applicable
constitutional or statutory limitations or requirements concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the
general tax revenues, funds or monies of Lessee.
Section 4.02. Payment of Rental Payments. Lessee shall pay Rental Payments, exclusively from legally available funds, in lawful money of the United States of
America to Lessor or, in the event of assignment by Lessor, to its assignee, in the amounts and on the dates set forth y Exhibit E hereto. Rental Payments shall be in
consideration for Lessee's use of the Equipment during the applicable year in which such payments are due. The Lease Payments will be payable without notice or demand
at the office of the Lessor (or such other place as Lessor or its assignee may from time to time designate in writing). If any installment of Rental or other sum payable
hereunder or under any Schedule is not paid when due, Lessee shall pay to Lessor accred interest on such delinquent amount from the date due thereof until paid at the
greater of the implicit rate of the Lease or the maximum rate allowed by law. Such accrued interest shall be due and payable upon with payment the delinquent amount, if
the accrued interest is not tendered at that time it shall be added to the principal balance of the Lease. Lessee agrees that the Lessor is to adjust the final payment of Exhibit
E adding to it all interest accrued from any and all delinquencies.
Section 4.03. Interest and Principal Components. A portion of each Lease Rental Payment is paid as, and represents payment of, interest, and the balance of each Rental
Payment is paid as, and represents payment of, principal. Exhibit E hereto sets forth the interest component and the principal component of each Rental Payment during the
Lease Term.
Section 4.04. Rental Payments to be Unconditional. The obligations of Lessee to make payment of the Rental Payments required under this Article IV and other sections
hereof; and to perform and observe the covenants and agreements contained herein, shall be absolute and unconditional in all events, except as expressly provided under this
Agreement. Notwithstanding any dispute between Lessee and Lessor, any Vendor or any other dispute between Lessee and Lessor, any Vendor or any other person, Lessee
shall make all payments of Rental Payments when due and shall not withhold any Rental Payments pending final resolution of such dispute, nor shall Lessee assert any right
of set-off or counterclaim against its obligation to make such payments required under this Agreement. Lessee's obligation to make Rental Payments during the Original
Term or the then current Renewal Term shall not be abated through accident or unforeseen circumstances.
Section 4.05. Continuation of Lease Term by Lessee. Lessee intends, subject to the provisions of Section 4.06, to continue the Lease Term through the Original Term
and all of the Renewal Terms and to pay the Rental Payments hereunder. Lessee reasonably believes that legally available funds of an amount sufficient to make all Rental
Payments during the Original Term and each of the Renewal Terris can be obtained. Lessee further intends to do all things lawfully within its power to obtain and maintain
funds from which the Rental Payments may be made, including making provision for such payments to the extent necessary in each biannual or annual budget submitted and
adopted in accordance with applicable provisions of state law, to have such portion of the budget approved, and to exhaust all available reviews and appeals in the event
such portion of the budget is not approved.
Section 4.06. Termination by Non - appropriation. In the event sufficient funds shall not be appropriated for the payment of the Rental Payments required to be paid in
the next occurring Renewal Term, and if Lessee has no funds legally available for Rental Payments from other sources; then Lessee may terminate this Agreement at the end
of the then current Original Term or Renewal Term, and Lessee shall not be obligated to make payment of the Rental Payments provided for in this Agreement beyond the
then current Original or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination at least 60 days prior to the end of the then current Original or Renewal
Tenn. If Lessee acquires or agrees to acquire for the first time either the use of or ownership of equipment similar to the Equipment, or contract for services similar to those
provided by the equipment subject to this Agreement at any time during the period beginning with the date notice is required above and ending one year after the expiration
of the Original Term or Renewal Term during which such notice was due, to the extent allowed by law the Lessor shall be entitled to recover damages from Lessee, as the
equivalent of a loss of a bargain and not as a penalty, in an amount equal to the loss of expected net revenues it would have received if this Agreement had been renewed for
all periods through the end of the final anticipated Renewal Term as set forth on Exhibit E. Lessee and Lessor hereby agree that Lessee's damages under such circumstances
would be difficult or impossible to predict with any accuracy and therefore hereby agree that Lessee shall pay to Lessor, on a day which is sixty (60) days after the last day
Lessee used the Equipment, an amount (together with interest thereon at a rate of 18% per annum or the highest rate permitted by law for Lessee to pay, whichever is less)
which is equal to the amount by which the sum of all Rentals which Lessee would have paid to Lessor during the remaining Renewal Terms as set forth in Exhibit E exceeds
the actual, net cash sale price Lessor receives from a commercially reasonable sale of the Equipment conducted within said sixty (60) day period.
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The actual, net cash sale price resulting from such sale shall be computed after the deduction of all reasonable expenses of retaking, holding, preparing for sale, selling and
the like including reasonable attorney's fees and legal expenses incurred by Lessor. The Lessor shall use its best efforts and shall take all reasonable action to maximize the
actual net cash sale price resulting from such sale.
ARTICLE V. TITLE TO EQUIPMENT; SECURITY INTEREST; OPTION TO PURCHASE
Section 5.01. Title to the Equipment. During the term of this Agreement, title to the Equipment and any and all additions, repairs, replacements or modifications shall
vest in Lessee, subject to the rights of Lessor under this Agreement. In the event of default as set forth in Section 10.02 or nonappropriation as set forth in Section 4.06, title
to Equipment shall immediately vest in Lessor, and Lessee agrees to surrender possession of the Equipment to Lessor as provided in Section 3.04 hereof. Lessee and Lessor
intend for federal income tax purposes under the Internal Revenue Code of 1986, as amended, that this Agreement constitutes a financing lease or an installment sale
contract rather than a true lease.
Section 5.02. Security Interest. To secure the payment of all Lessee's obligations under this Agreement, Lessee grants to Lessor a security interest constituting a first lien
on the Equipment and on all additions, attachments, accessions, that are considered to be an integral part of the equipment, and substitutions thereto, and on any proceeds
therefrom. Lessee agrees to execute such additional documents, including financing statements, affidavits, notices and similar instruments, in form satisfactory to Lessor,
which Lessor deems necessary or appropriate to establish and maintain its security interest, and upon assignment, the security interest of any assignee of Lessor, in the
Equipment; Lessee hereby agrees and does hereby appoint Lessor or its agents its true and lawful attorney -in -fact to prepare, execute and sign any financing statement
necessary to protect Lessor's interest in the Equipment subject hereto, and to sign the name of Lessee with the same force and effect as if signed by Lessee, and to file same
at the proper location or locations. Lessee further agrees, if Lessor so requests, to execute any instrument or financing statement necessary to protect Lessor's interest in the
Equipment.
Section 5.03. Option to Purchase. Lessor's security interest in the Equipment will be terminated, Lessor will sign any instrument or document to effect the termination of
its interest, and this Agreement shall terminate:
(a) at the end of the Lease Term (including Renewal Terns), upon payment in full of Rental Payments due
hereunder; or
(b) at the end of the Original Term or any Renewal Tern, upon payment by Lessee of the then applicable
Purchase Price plus accrued interest and charges; or
(c) if the Lease Term is terminated pursuant to Article VII of this Agreement, in the event of total damage,
destruction or condemnation of the Equipment; or
(d) at any time when Lessee is not on such date in default under this Agreement, upon payment of the then
applicable Purchase Price plus accrued interest and charges to Lessor.
ARTICLE VI. MAINTENANCE; MODIFICATION; TAXES; INSURANCE AND OTHER CHARGES
Section 6.01. Maintenance of Equipment by Lessee. Lessee agrees that at all times during the Lease Term Lessee will, at Lessee's own cost and expense, maintain,
preserve and keep the Equipment in good repair, working order and condition, and that Lessee will from time to time make or cause to be made all necessary and proper
repairs, replacements and renewals. Lessor shall have no responsibility in any of these matters, or for the making of improvements or additions to the Equipment.
Section 6.02. Taxes, Other Governmental Charges and Utility Charges. The parties to this Agreement contemplate that the Equipment will be used for a governmental
or proprietary purpose of Lessee and, therefore, that the Equipment will be exempt from all taxes presently assessed and levied with respect to personal property. In the
event that the use, possession or acquisition of the Equipment is found to be subject to taxation in any form (except for income taxes of Lessor), Lessee will pay during the
Lease Term, as the same respectively come due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or
with respect to the Equipment and any equipment or other property acquired by Lessee in substitution for, as a renewal or replacement of, or a modification, improvement or
addition to the Equipment, as well as all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Equipment; provided that, with respect to any governmental charges that may lawfully be paid in installments over a period of years, Lessee
shall be obligated to pay only such installments as have accrued during the time this Agreement is in effect.
Section 6.03. Provisions Regarding Insurance. At its own expense Lessee shall cause casualty, public liability and property damage insurance to be carried and
maintained, or shall demonstrate to the satisfaction of Lessor that adequate self - insurance is provided with respect to the Equipment, sufficient to protect the Full Insurable
Value (as that term is hereinafter defined) of the Equipment, and to protect Lessor from liability in all events. All insurance proceeds from casualty losses shall be payable as
hereinafter provided in this Agreement. Lessee shall furnish to Lessor certificates evidencing such coverage throughout the Lease Term. Alternatively, Lessee may insure
the Equipment under a blanket insurance policy or policies which cover not only the Equipment but other properties. If Lessee shall insure similar properties by self -
insurance, Lessee will insure the Equipment by means of an adequate insurance fund. The term "Full Insurable Value" as used herein shall mean the full replacement value
of the Equipment.
Any insurance policy pursuant to this Section 6.03 shall be so written or endorsed as to make losses, if any, payable to Lessee and Lessor as their respective interests may
appear. The Net Proceeds (as defined in Section 7.01) of the insurance required in this Section 6.03 shall be applied as provided in Article VII hereof. Each insurance policy
provided for in this Section 6.03 shall contain a provision to the effect that the insurance' company shall not cancel the policy or modify it materially and adversely to the
interest of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation.
Section 6.04. Advances. In the event Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Equipment in good repair
and operating condition, Lessor may (but shall be under no obligation to) purchase the required policies of insurance and pay the premiums on the same or may make such
repairs or replacements as are necessary and provide for payment thereof; and all amounts so advanced therefore by Lessor shall become additional
rent for the then current Original Term or Renewal Term, which amounts, together with interest thereon at the maximum interest rate permitted by law, Lessee agrees to pay.
ARTICLE VII. DAMAGE, DESTRUCTION AND CONDEMNATION: USE OF NET PROCEEDS
Section 7.01. Damage, Destruction and Condemnation. Unless Lessee shall have exercised its option to purchase the Equipment by making payment of the Purchase
Price as provided herein, if prior to the termination of the Lease Term (a) the Equipment or any portion thereof is destroyed (in whole or in part, or is damaged by fire or
other casualty or (b) title to, or the temporary use of the Equipment or any part thereof or the estate of Lessee or Lessor in the Equipment or any part thereof shall be taken
under the exercise of the power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, Lessee and Lessor
will cause the Net Proceeds of any insurance claim or condemnation award to be applied to the prompt repair, restoration, modification or improvement of the Equipment.
Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee.
For purposes of Section 6.03 and this Article VII, the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim or
condemnation award after deducting all expenses (including attorney's fees) incurred in the collection of such claims or award.
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Section 7.02. Insufficiency of Net Proceeds.- If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to
in Section 7.01 hereof; Lessee shall either (a) complete the work and pay any cost in excess of the amount of Net Proceeds, and Lessee agrees that if by reason of any such
insufficiency of the Net Proceeds, Lessee shall make any payments pursuant to the provisions of this Section 7.02, Lessee shall not be entitled to any reimbursement
therefore from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV hereof, or (b) if Lessee is not in default hereunder, Lessee shall
pay to Lessor the amount of the then applicable Purchase Price, and, upon such payment, the Lease Term shall terminate and Lessor's security interest in the Equipment
shall terminate as provided in Section 5.02 of this Agreement. The amount of the Net Proceeds in excess of the then applicable Purchase Price, if any, may be retained by
Lessee.
ARTICLE VIII. DISCLAIMER OF WARRANTIES; VENDOR'S WARRANTIES; USE OF THE EQUIPMENT
Section 8.01. Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE,
DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR FITNESS FOR USE OF THE EQUIPMENT, OR WARRANTY
WITH RESPECT THERETO. In no event shall Lessor be liable for an incidental, indirect, special or consequential damage in connection with or arising out of this
Agreement or the existence, furnishing, functioning or Lessee's use of any item or products or services provided for in this Agreement.
Section 8.02. Vendor's Warranties. Lessor hereby irrevocably appoints Lessee its agent and attomey -in -fact during the Lease Tern, so long as Lessee shall not be in
default hereunder, to assert from time to time whatever claims and rights, including warranties of the Equipment, which Lessor may have against the Vendor of the
Equipment. Lessee's sole remedy for the breach of such warranty, indemnification or representation shall be against the Vendor of the Equipment, and not against Lessor,
nor shall such matter have any effect whatsoever on the rights and obligations of Lessor with respect to this Agreement, including the right to receive full and timely
payments hereunder. Lessee expressly acknowledges that Lessor makes, and has made, no representation or warranties whatsoever as to the existence or availability of such
warranties of the Vendor of the Equipment.
Section 8.03. Use of the Equipment. Lessee will not install, use, operate or maintain the Equipment improperly, carelessly; in violation of any applicable law or in a
manner contrary to that contemplated by this Agreement. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation ofthe Equipment.
In addition, Lessee agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of each item of the Equipment) with all
laws of the jurisdictions in which its operations involving any item of Equipment may extend and any legislative, executive, administrative or judicial body exercising any
power or jurisdiction over the items of the Equipment; provided, however, that Lessee may contest in good faith the validity or application of any such law or rule in any
reasonable manner which does not in the opinion of Lessor, adversely affect the estate of Lessor in and to any of the items of the Equipment or its interest or rights under
this Agreement.
Section 8.04. Essential Nature of the Equipment. The Lessee confirms and affirms that the Equipment is essential to the function of the Lessee and the services provided
to its citizens, that there is an immediate need for the Equipment which is not temporary or expected to diminish in the foreseeable future, and that the Lessee will use
substantially all the Equipment for the purpose of performing one or more governmental or proprietary functions consistent with the permissible scope of its authority.
ARTICLE IX. ASSIGNMENT, SUBLEASING, INDEMNIFICATION, MORTGAGING AND SELLING
Section 9.01. Assignment by Lessor. This Agreement, and the obligations of Lessee to make payments hereunder, may be assigned and reassigned in whole or in part to
one or more assignees or subassignees by Lessor at any time subsequent to its execution, without the necessity of obtaining the consent of Lessee; provided, however, that
no such assignment or reassignment shall be effective unless and until (i) Lessee shall have received notice of the assignment or reassignment disclosing the name and
address of the assignee or subassignee, and (ii) in the event that such assignment is made to a bank or trust company as trustee for holders of certificates representing interest
in this Agreement, such bank or trust company agrees to maintain, or cause to be maintained, a book -entry system by which a record of the names and addresses of such
holders as of any particular time is kept and agrees, upon request of Lessee, to furnish such information to Lessee. Upon receipt of notice of assignment, Lessee agrees to
reflect in a book entry the assignee designated in such notice of assignment, and to make all payments to the assignee designated in the notice of assignment,
notwithstanding any claim, defense, set-off or counterclaim whatsoever (whether arising from a breach of this Agreement or otherwise) that Lessee may from time to time
have against Lessor, or the assignee. Lessee agrees to execute all documents, including notices of assignment and;hattel mortgages or financing statements which may be
reasonably requested by Lessor or its assignee to protect their interests in the Equipment and in this Agreement.
Section 9.02. No Sale, Assignment or Subleasing by Lessee. This Agreement and the interest of Lessee in the Equipment may not be sold, assigned or encumbered by
Lessee without the prior written consent of Lessor.
Section 9.03. Release and Indemnification Covenants. To the extent permitted by the laws and Constitution of the State, Lessee shall protect, hold harmless and
indemnify Lessor from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of cause thereof, and expenses in connection
therewith, including, without limitation, counsel fees and expenses, penalties and interest arising out of or as the result of the entering into of this Agreement, the ownership
of any item of the Equipment, the ordering, acquisition, use, operation, condition, purchase, delivery, rejection, storage or return of any item of the Equipment or any
accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death of
any person. The indemnification arising under this paragraph shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement
or the termination of the Lease Term for any reason. Lessee agrees not to withhold or abate any portion of the payments requireoursuant to this Agreement by reason of
any defects, malfunctions, breakdowns or infirmities of the Equipment.
Section 9.04. Certification and Authorization. Lessee represents, covenants and warrants that it is a state, or a political subdivision thereof, or that Lessee's obligation
under this Lease constitutes an obligation issued on behalf of a state or political subdivision thereof; such that any interest derived under this Lease will qualify for
exemption from Federal income taxes under Section 103 of the Internal. Revenue Code. Lessee further warrants that this Lease represents a valid deferred payment
obligation for the amount herein set forth and that Lessee, having the legal capacity to enter into the same, is not in contravention of any statute, rule, regulation, ordinance,
administrative ruling or other governmental provision of any kind applicable to the Lessee. In the event that a question arises as to Lessee's qualification as apolitical
subdivision, Lessee agrees to execute a power -of- attomey authorizing Lessor to make application to the Internal Revenue Service for a letter ruling with respect to the issue,
the expenses of which the Lessee hereby agrees to pay. Lessee agrees that (i) it will do or cause to be done all things necessary to preserve and keep the Lease in full force
and effect; (ii) it has complied with all bidding requirements where necessary and by due notification presented this Lease for approval and adoption as a valid obligation on
its part; and (iii) it has sufficient appropriations or other funds available to pay all amounts due hereunder for the current fiscal period; (iv) during the term of this Lease, the
Equipment will be used by Lessee only for the purpose of performing one or more governmental or proprietary functions of Lessee consistent with the permissible scope of
Lessee's authority and will not be used in a trade or business of any person or entity other than the Lessee; (v) Lessee will take no action that will cause the interest portion
of any Lease Payment to become includable in gross income of the recipient for purposes of federal income taxation under the Internal Revenue Code of 1986, and Lessee
will take, and will cause its officers, employees and agents to take, all affirmative action legally within its power to prevent such interest from being includable in gross
income for purposes of federal income taxation under the Code. Lessee acknowledges that Lessor's yield with respect to this Agreement is dependent upon the full amount
of each Lease Rental Payment being excluded from Lessor's income pursuant to the United States Internal Revenue Code of 1986 (the "Code "). Accordingly, if at any time,
as a result of a determination that Lessee has breached a representation or covenant contained herein, or as a result of any change in the Code, any payment of either the
interest component or the principal component of any Lease Rental Payment is, in the opinion of counsel for the Lessor, subject to or
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affected by any income, preference, excess profits, minimum or other federal tax, Lessee shall pay, as additional interest, an amount which is necessary to provide to Lessor
the same net income as Lessor would have received but for such event. Lessor's calculations of interest shall be binding upon Lessee in the absence of manifest error.
Section 9.05. Certificate as to Arbitrage The Agreement was issued by the Lessee under and pursuant to law to finance the acquisition of certain equipment described
herein. The Lessee is entitled to receive said equipment in consideration for its obligation to make Rental Payments under this Agreement. The Equipment will be used in
furtherance of the public purposes of the Lessee. The Lessee has not covenanted not to sell or otherwise dispose of the equipment during the term of this Agreement. The
Lessee will not receive any monies, funds, or other "proceeds" as a result of the Agreement. The Lessee expects to make payments under this Agreement from its general
funds on the basis of annual appropriations in amounts equal to the required payments hereunder. The remaining general funds of the Lessee are not reasonably expected to
be used to make such payments and no other monies are pledged to the payment of Rental Payments or other payments under this Agreement, or are reasonably expected to
be used to pay principal and interest hereunder. No reserve fund has been established to make such payments. The Lessee has not received notice that its Arbitrage
Certificate may not be relied upon with respect to its issues nor has it been advised that any adverse action by the Commissioner of Internal Revenue is contemplated. On
the basis of the facts and expectations set forth above, the obligations of the Lessee hereunder will not constitute an "Arbitrage Bond" under Section 1.48 of the Internal
Revenue Code of 1986, as amended.
ARTICLE X. EVENTS OF DEFAULT AND REMEDIES
Section 10.01. Events of Default Defined. The following shall be "events of default" under this Agreement and the terns "event of default" and "default" shall mean,
whenever they are used in this Agreement, any one or more of the following events:
(a) Failure by Lessee to pay any Rental Payment or other payment required to be paid hereunder at the time specified herein; and
(b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in Section
10.01 (a), for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied as given to Lessee by Lessor, unless Lessor shall
agree 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 Lessee within the applicable period and diligently pursued
until the default is corrected.
The foregoing provisions of this Section 10.01 are subject to (i) the provisions of Section 4.06 hereof with respect to non - appropriation; and (ii) if by reason oforce
majeure Lessee is unable in whole or in part to 'carry out any agreement on its part herein contained, other than the obligations on the part of Lessee contained in Article IV
hereof, Lessee shall not be deemed in default during the continuance of such inability. The term "force majeure" as used herein shalt mean, without limitation, the following:
acts of God, strikes, lockouts or other employee relations disturbances; acts of public enemies, orders or restraints of any kind of the government of the United States of
America or the state wherein Lessee is located or any of their departments, agencies or officials, or any civil or military authority; insurrections; riots; landslides;
earthquakes; fires; storms; droughts; floods; or explosions.
Section 10.02. Remedies of Default. Whenever any event of default referred to in Section 10.01 hereof shall have happened and be continuing with respect to the
Equipment, Lessor shall have the right, at its option and without any further demand or notice, to take one or any combination of the following remedial steps:
(i) Lessor, with or without terminating this Lease with respect to such Equipment, may declare all Rental Payments due or to become due with respect to such Equipment
during the fiscal year in effect when the default occurs to be immediately due and payable by Lessee, whereupon such Rental Payments shall be immediately due and
payable.
(ii) Lessor, with or without terminating this Lease with respect to such Equipment, may repossess the Equipment by giving written notice to deliver such Equipment to
Lessor, whereupon Lessee shall do so in the manner provided in Section 10.03 or in the event Lessee fails to do so within ten (10) days after receipt of such notice, Lessor
may enter upon Lessee's premises where the Equipment is kept and take possession of the Equipment and charge Lessee for costs incurred in repossessing the Equipment,
including reasonable attorney's fees. Lessee hereby expressly waives any damages occasioned by such repossession. If the Equipment or any portion of it has been destroyed
or damaged beyond repair, Lessee shall pay the applicable Purchase Option Price of the Equipment, as set forth in Exhibit B (less credit for Net Proceeds), to Lessor.
Notwithstanding the fact that Lessor has taken possession of the Equipment, Lessee shall continue to be responsible for the Rental Payments due with respect thereto during
the Fiscal Year then in effect. If this Lease has not been terminated with respect to such Equipment, Lessor shall return the Equipment to Lessee at Lessee's expense when
the event of default is cured.
(iii) If Lessor terminates this Lease with respect to such Equipment and takes possession of such Equipment contained therein, Lessor shall within thirty (30) days thereafter
use its best efforts to sell such Equipment or any portion thereof in a commercially reasonable manner at public or private sale in accordance with applicable State laws.
Lessor shall apply the proceeds of such sale to pay the following items in the following order. (a) all costs incurred in securing possession of the Equipment; (b) all
expenses incurred in completing the sale; (c) the applicable Purchase Option Price; (d) the balance of any Rental Payments with respect to such Equipment owed by Lessee
during the Fiscal Year then in effect. Any sale proceeds remaining after the requirements of Clauses (a), (b), (c) and (d) have been met may be retained by Lessor.
(iv) If the proceeds of sale of such Equipment are not sufficient to pay the balance of any Rental Payments with respect thereto owed by Lessee during the fiscal year then in
effect, Lessor may take any other remedy available at law or in equity to require Lessee to perform any of its obligations hereunder.
Section 10.03. Return of Equipment. Upon the expiration or termination of this Lease with respect to the Equipment prior to the payment of all Rental Payments or the
payments of the early termination/purchase option price in accordance with Exhibit E, Lessee, at its sole expense, shall return such Equipment to Lessor in the condition,
repair, appearance and working order required in Section 6.01 to the place and in the manner as may be specified by Lessor. If Lessee refuses to return the Equipment in the
manner designated, Lessor may repossess the Equipment and charge to Lessee the costs of such repossession or pursue any remedy described in Section 10.02.
Section 10.04 No Remedy Exclusive. No remedy conferred upon or reserved toLessor by this Article is intended to be exclusive and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this lease. No delay or omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver thereof but any such right and power may be exercised from time to time and as often as may be deemed
expedient by Lessor or its assignee.
ARTICLE XI. MISCELLANEOUS
Section 11.01. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by
registered mail, postage prepaid, to the parties at their respective places of business.
Section 11.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns. The
terms of this Agreement shall not be waived, altered, modified, supplemented or amended in any manner whatsoever except by written instrument signed by the Lessor and
the Lessee; nor shall any such amendment that affects the rights of Lessor's assignee be effective without such assignee's consent. In the event any provision of this
Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 11.03. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State.
Section 11.04. Entire Agreement This Agreement constitutes the entire agreement between Lessor and Lessee. No waiver, consent, modification or change of terms of
this Agreement shall bind either party unless in writing signed by both parties, and then such waiver, consent, modification or change shall be effective only in the
specific instance and for the specific purpose given. There are no understandings, agreements, representations or warranties, express or implied, not specified herein
regarding this Agreement or the Equipment leased hereunder.
Any terms and conditions of any purchase order or other document (with the exception of supplements) submitted by Lessee in connection with this Agreement which are in
addition to or inconsistent with the terms and conditions of this Agreement will not be binding on Lessor and will not apply to this AgreemenL Lessee by the signature
below of its authorized representative acknowledges that it has read this Agreement, understands it, and agrees to be bound by its terms and conditions. This Agreement may
be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument
FBC Muni — ver4 — 0401 Page 5
Lease Number: EAG- 060101 -005
C,
ARTICLE XII. CERTIFICATION OF "QUALIFIED TAX- EXEMPT OBLIGATION" BY LESSEE
Lessee certifies that it reasonably anticipates that it and all of its subordinate entities will not issue more than $10,000,000 of "qualified tax - exempt obligations"
(as that term is defined in Section 265 (b) (3) (B) of the Internal Revenue Code of 1986 (the "Code ") during the calendar year in which the Lease is executed.
Lessee hereby designates its obligations under the Lease as a "qualified tax - exempt obligation" in accordance with SECTION 265 (b) (3) (B) of the Code so that it
is eligible for the exception contained in Section 265 (b) (3) (B) of the Code and further certifies for the purpose of the overall limitation of Section 265 (b) (3) (D)
of the Code that it and its subordinate entities have not as of this date issued more than $10,000,000 of obligations which it has designated for these purposes.
IN WITNESS WHEREOF, Lessor has executed this Agreement in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers,
and Lessee has caused this Agreement to be executed in its corporate name with its corporate seal hereunto affixed and attested by its duly authorized officers. All of the
above occurred as of the date first written below; this Agreement shall be binding on Lessee beginning on the date it is accepted and executed by Lessor.
LESSOR: First Bankers Corporation
By
Title
Date
LESSEE: Eagle, County o
By
FBC Muni — ver4 — 0401 Page 6
Lessee: Eagle, County of
Date of Agreement: June 1, 2001
EXHIBIT A
RESOLUTION OF GOVERNING BODY
At a duly called meeting of the governing body of Lessee (as defined in the Agreement) held on the_ day of
the following resolution was introduced and adopted.
WHEREAS the governing body of Lessee has determined that a true and very real need exists for the acquisition of the
Equipment described in the Municipal Lease and Option Agreement presented at this meeting; and
WHEREAS the necessary funds for the leasing of the Equipment have been provided for the coming year and are expected to be
available in the future.
WHEREAS, the governing body of Lessee has taken the necessary steps, including any legal bidding requirements, under
applicable law to arrange for the acquisition of such equipment.
BE IT RESOLVED, by the governing body of Lessee that the terms of said Municipal Lease and Option Agreement for the
acquisition of such Equipment are in the best interests of lessee, and the governing body hereby affirms and confirms that:
(a) the Equipment is essential to the function of the Lessee and the services provided to our citizens, that we have an immediate
need for the Equipment which is not temporary or expected to diminish in the foreseeable future; that we will use substantially all the
Equipment for the purpose of performing one or more of our governmental or proprietary functions consistent with the permissible scope
of our authority.
(b) the governing body of Lessee designates the following persons to execute and deliver, and to witness or attest, respectively,
the First Bankers Corporation Municipal Lease and Option Agreement and any related documents necessary to the consummation of the
transactions contemplated by the Municipal Lease and Option Agreement.
(Print Name of Person to Sign Lease )
(Specimen Signature of Person to Sign Lease )
(Print Title ofPerson to Sign
The undersigned further certifies that the above resolution has not been repealed or amended and remains in full force and effect and
further certifies that the above and foregoing Municipal Lease and Option Agreement is the same as presented at said meeting of the
governing body of Lessee.
Signature of Secretary or Clerk
Print name of Secretary or Clerk
Date
