2011-109ORDINANCE NO. 2011-109
AN ORDINANCE AWARDING A CONTRACT TO INX, INC. FOR THE LEASE PURCHASE
OF HARDWARE, SOFTWARE, AND PROFESSIONAL SERVICES TO ESTABLISH A
DISASTER RECOVERY DATA CENTER FOR THE CITY OF DENTON AS AWARDED BY
THE STATE OF TEXAS DEPARTMENT OF INFORMATION RESOURCES (DIR-SDD-
621/DIR-SDD-1418/DIR-SDD-1386); PROVIDING FOR THE EXPENDITURE OF FUNDS
THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 4759-LEASE PURCHASE OF
HARDWARE, SOFTWARE AND PROFESSIONAL SERVICES FOR DISASTER RECOVERY
DATA CENTER FROM INX, INC. IN THE AMOUNT OF $696,185.54, WITH TOTAL
FINANCE PAYMENTS OF $711,546.01).
WHEREAS, pursuant to Resolution 92-019, the State Purchasing Building and Procurement
Commission has solicited, received and tabulated competitive bids for the purchase of necessary
materials, equipment, supplies or services in accordance with the procedures of state law on behalf of
the City of Denton; and
WHEREAS, the City Manager or a designated employee has reviewed and recommended that
the herein described materials, equipment, supplies or services can be purchased by the City through
the Building and Procurement Commission programs at less cost than the City would expend if
bidding these items individually; and
WHEREAS, the City Council has provided in the City Budget for the appropriation of funds
to be used for the purchase of the materials, equipment, supplies or services approved and accepted
herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The numbered items in the following numbered purchase order for materials,
equipment, supplies, or services, shown in File 4759 listed hereon, and on file in the office of the
Purchasing Agent, are hereby approved:
FILE
NUMER VENDOR AMOUNT
4759 INX, Inc. $696,185.54
SECTION 2. By the acceptance and approval of the above numbered items set forth in the
File, the City accepts the offer of the persons submitting the bids to the Building and Procurement
Commission for such items and agrees to purchase the materials, equipment, supplies or services in
accordance with the terms, conditions, specifications, standards, quantities and for the specified sums
contained in the bid documents and related documents filed with the Building and Procurement
Commission, and the purchase orders issued by the City.
SECTION 3. Should the City and persons submitting approved and accepted items set forth
in the File wish to enter into a formal written agreement as a result of the City's ratification of bids
awarded by the Building and Procurement Commission, the City Manager or his designated
representative is hereby authorized to execute the written contract; provided that the written contract
is in accordance with the terms, conditions, specifications and standards contained in the Proposal
submitted to the Building and Procurement Commission, quantities and specified sums contained in
the City's purchase orders, and related documents herein approved and accepted.
SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council
hereby authorizes the expenditure of funds therefor in the amount and in accordance with the
approved bids.
SECTION 5. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the N day of , 2011.
MARK A. B'H9ROU(KIS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
CT
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
4-ORD 47
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C S O
Key Government Finance, Inc.
1000 South McCaslin Boulevard
Superior, CO 80027-9456
July 11, 2011
City of Denton
Kevin Gunn
215 E. McKinney
Denton, TX 76201
Dear Mr. Gunn:
Enclosed, please find two (2) sets of financing documents for your review and execution. (If these documents were
emailed to you, please print out two (2) sets.) Execute both sets and return all of the originals to my attention. The original
sets of the executed documents are required prior to funding your transaction. To expedite the return of these
documents, please overnight them to me using Key Government Finance's FedEx account # 129905042, and send
to:
KEY GOVERNMENT FINANCE. INC. ATTN: ISAAC HUDSON
1000 S. MCCASLIN BLVD. SUPERIOR. CO 80027.
All fully executed documents must be returned no later than July 26, 2011; otherwise, the transaction
may be subject to re-pricing.
Only the person with Signing Authority should execute the documents. For verification of original
documents, please execute in blue ink. Upon closing, Key Government Finance will return a fully executed original set
for your files.
Please refer to the enclosed Document Checklist when preparing the documents.
Executed documents required for funding are:
1. Tax-Exempt Lease/Purchase Agreement
2. Addendum to Tax-Exempt Lease/Purchase Agreement
3. Property Schedule
4. Property Description and Payment Schedule (Exhibit 1)
5. Lessee's Certificate (Exhibit 2) and a copy of the Board minutes or resolutions authorizing this
new lease.
6. Payment of Proceeds Instructions (Exhibit 3)
7. Acceptance Certificate (Exhibit 4)
8. Bank Qualification Certificate (Exhibit 5)
9. Certificate of Insurance - Required prior to funding.
10. Notification of Tax Treatment with Tax Exemption Certificate or Letter - Required for annual state tax audits.
11. 8038-G IRS form with Report Number filled in - Original required to be submitted to the IRS at funding, which we will
submit on your behalf.
12. Invoicing Instructions - Required in order to ensure that invoices are directed to the proper area in your organization.
13. Escrow Agreement
Please contact me at 720-304-1288with any questions or concerns you may have.
Sincerely,
Isaac Hudson , Account Manager
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DOCUMENTATION CHECKLIST
❑ Tax-Exempt Lease/Purchase Agreement-Schedule 1*
❑ Addendum to Tax-Exempt Lease/Purchase Agreement*
❑ Property Schedule 1*
❑ Property Description and Payment Schedule -Exhibit 1
❑ Lessee's Certificate - Exhibit 2. Please fill in the date of the meeting of the governing body, referenced in section 1.
We require a copy of those minutes or board resolutions for our files.
❑ Payment of Proceeds Instructions - Exhibit 3. This is the Vendor payment information.
❑ Acceptance Certificate - Exhibit 4. The date of Acceptance will need to be filled in with the date the equipment
is installed and accepted.
❑ Bank Qualification Certificate -Exhibit 5 (One of the boxes must be checked)
❑ Request for Certificate of Insurance - Please fill out the form and fax it to your insurance company.
The Insurance Certificate is required prior to funding.
❑ Notification of Tax Treatment - Please provide your State of Sales/Use Tax Exemption Certificate
❑ Invoicing Instructions - The information you provide enables us to invoice you correctly.
❑ Escrow Agreement
Please keep copies of Exhibit A (Form of Requisition of Costs of Property) and Schedule 1 (Disbursement
Schedule). When you are ready to disburse funds from Escrow, you will need to sign and fill in both Exhibit A and
Schedule 1. Along with those 2 forms, we will need copies of invoices. Exhibit 5 (Acceptance Certificate) will need
to be filled out when the project is complete and it is your final payment request.
❑ 1St Payment
*The items above marked with an asterisk require a signature in the presence of a witness/attestor. The attesting of the
signature does not require a notary, but the signature of a person present at the time the document is signed.
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Tax-Exempt Lease/Purchase Agreement
BETWEEN:
Key Government Finance, Inc. (the "Lessor")
1000 South McCaslin Blvd.
Superior, CO 80027
AND:
City of Denton (the "Lessee")
215 E. McKinney
Denton, TX 76201
Attention: Kevin Gunn
Telephone: 940-349-8595
DATED:
7/1/2011
ARTICLE I
1.01 Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
"Agent" means any agent for the Registered Owners, if any, to which all or a portion of Lessor's right, title and interest in, to and under the Property Schedule
and the Property under the Property Schedule may be assigned for the benefit of the Registered Owners of Lease Participation Certificates in the Property
Schedule.
"Agreement" means this Tax-Exempt Lease/Purchase Agreement, including all exhibits and schedules attached hereto.
"Commencement Date" is the date when the term of the Property Schedule and Lessee's obligation to pay rent thereunder commences, which date shall be set
forth in the Property Schedule.
"Event of Nonappropriation" is defined in Section 6.06.
"Event of Default" is defined in Section 13.01.
"Lease Participation Certificates" means certificates evidencing a right to receive a share of Rental Payments payable under the Property Schedule and
Purchase Price Payments payable under the Property Schedule and any other rights set forth herein with respect to the Property under said Property Schedule.
"Lease Term" means, with respect to the Property Schedule, the Original Term and all Renewal Terms. The Lease Term for the Property Schedule executed
hereunder shall be set forth in the Property Schedule, as provided in Section 4.02.
"Lessee" means the entity identified as such in the first paragraph hereof, and its permitted successors and assigns.
"Lessor" means the entity identified as such in the first paragraph hereof, and its successors and assigns.
"Original Term" means, with respect to the Property Schedule, the period from the Commencement Date until the end of the budget year of Lessee in effect at
the Commencement Date.
"Property" means, collectively, the property leased/purchased pursuant to this Agreement and Property Schedule and all replacements, repairs, restorations,
modifications and improvements thereof or thereto made pursuant to Section 8.01 or Article IX.
"Property Schedule" means the Property Schedule in the form attached hereto for Property Schedule 1.
"Purchase Price" means the amount that Lessee may, in its discretion, pay to Lessor to purchase the Property under the Property Schedule, as provided in
Section 11.01 and as set forth in the Property Schedule.
"Registered Owners" means the registered owners of Lease Participation Certificates in the Property Schedule as shown on the registration books maintained
by the Agent.
"Renewal Terms" means the renewal terms of the Property Schedule, each having a duration of one year and a term coextensive with Lessee's budget year.
"Rental Payments" means the rental payments payable by Lessee under Article VI of this Agreement and the Property Schedule, as set forth in the Property
Schedule.
"Rental Payments Dates" means the rental payments dates for the Rental Payments as set forth in the Property Schedule.
"State" means the state in which Lessee is situated.
"Vendor" means the manufacturer or contractor of the Property as well as the agents or dealers of the manufacturer or contractor from whom Lessor or Lessee
purchased or is purchasing all or any portion of the Property.
ARTICLE II
2.01 Property Schedule. Upon the occurrence of an Event of Default or an Event of Nonappropriation with respect to the Property Schedule, Lessor shall
have the rights and remedies specified herein with respect to the Property financed and the Rental Payments payable under the Property Schedule.
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ARTICLE III
3.01 Covenants of Lessee. As of the Commencement Date for the Property Schedule executed and delivered hereunder, Lessee shall be deemed to
represent, covenant and warrant for the benefit of Lessor, any Agent, and any Registered Owners, as follows:
(a) Lessee is a public body corporate and politic duly organized and existing under the constitution and laws of the State with full power and
authority to enter into this Agreement and the Property Schedule and the transactions contemplated thereby and to perform all of its obligations
thereunder.
(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.
To the extent Lessee should merge with another entity under the laws of the State, Lessee agrees that as a condition to such merger it will
require that the remaining or resulting entity shall be assigned Lessee's rights and shall assume Lessee's obligations hereunder.
(c) Lessee has been duly authorized to execute and deliver this Agreement and the Property Schedule by proper action by its governing body, or by
other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and
enforceability of this Agreement and the Property Schedule, and Lessee has complied with such public bidding requirements as may be
applicable to this Agreement and the Property Schedule and the acquisition by Lessee of the Property thereunder.
(d) During the Lease Term for the Property Schedule, the Property thereunder will perform and will be used by Lessee only for the purpose of
performing essential governmental uses and public functions within the permissible scope of Lessee's authority.
(e) Lessee will provide Lessor with current financial statements, budgets and proof of appropriation for the ensuing budget year and other financial
information relating to the ability of Lessee to continue this Agreement and the Property Schedule in such form and containing such information
as may be requested by Lessor.
(f) Lessee will comply with all applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), including Sections 103 and
148 thereof, and the regulations of the Treasury Department thereunder, from time to time proposed or in effect, in order to maintain the
excludability from gross income for federal income tax purposes of the interest component of Rental Payments under the Property Schedule and
will not use or permit the use of the Property in such a manner as to cause the Property Schedule to be a "private activity bond" under Section
141(a) of the Code. Lessee covenants and agrees that it will use the proceeds of the Property Schedule as soon as practicable and with all
reasonable dispatch for the purpose for which the Property Schedule has been entered into, and that no part of the proceeds of the Property
Schedule shall be invested in any securities, obligations or other investments except for the temporary period pending such use nor used, at any
time, directly or indirectly, in a manner which, if such use had been reasonably anticipated on the date of issuance of the Agreement, would have
caused any portion of the Property Schedule to be or become "arbitrage bonds" within the meaning of Section 103(b)(2) or Section 148 of the
Code and the regulations of the Treasury Department thereunder proposed or in effect at the time of such use and applicable to obligations
issued on the date of issuance of the Property Schedule.
(g) The execution, delivery and performance of this Agreement and the Property Schedule and compliance with the provisions hereof and thereof by
Lessee does not conflict with or result in a violation or breach or constitute a default under, any resolution, bond, agreement, indenture,
mortgage, note, lease or other instrument to which Lessee is a party or by which it is bound by any law or any rule, regulation, order or decree of
any court, governmental agency or body having jurisdiction over Lessee or any of its activities or properties resulting in the creation or imposition
of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any property or assets of Lessee or to which it is
subject.
(h) Lessee's exact legal name is as set forth on the first page of this Agreement. Lessee will not change its legal name in any respect without giving
thirty (30) days prior notice to Lessor.
ARTICLE IV
4.01 Lease of Property. On the Commencement Date of the Property Schedule executed hereunder, Lessor will be deemed to demise, lease and let to
Lessee, and Lessee will be deemed to rent, lease and hire from Lessor, the Property described in the Property Schedule, in accordance with this Agreement and
the Property Schedule, for the Lease Term set forth in the Property Schedule.
4.02 Lease Term. The term of the Property Schedule shall commence on the Commencement Date set forth therein and shall terminate upon payment of
the final Rental Payment set forth in the Property Schedule and the exercise of the Purchase Option described in Section 11.01, unless terminated sooner
pursuant to this Agreement or the Property Schedule.
4.03 Delivery, Installation and Acceptance of Property. Lessee shall order the Property, shall cause the Property to be delivered and installed at the
locations specified in the Property Schedule and shall pay all taxes, delivery costs and installation costs, if any, in connection therewith. To the extent funds are
deposited under the escrow agreement or trust agreement for the acquisition of the Property, such funds shall be disbursed as provided therein. When the
Property described in the Property Schedule is delivered, installed and accepted as to Lessee's specifications, Lessee shall immediately accept the Property and
evidence said acceptance by executing and delivering to Lessor the Acceptance Certificate substantially in the form attached to the Property Schedule.
ARTICLE V
5.01 Eniovment of Property. Lessee shall during the Lease Term peaceably and quietly have, hold and enjoy the Property, without suit, trouble or
hindrance from Lessor, except as expressly set forth in this Agreement. No Registered Owner shall interfere with such quiet use and enjoyment during the Lease
Term so long as Lessee is not in default under the Property Schedule.
5.02 Location; Inspection. The Property will be initially located or based at the location specified in the Property Schedule. 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 Property.
ARTICLE VI
6.01 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, statutory or charter limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein
constitute a pledge of the faith and credit or taxing power of Lessee. Upon the appropriation of Rental Payments for a fiscal year, the Rental Payments for said
fiscal year, and only the Rental Payments for said current fiscal year, shall be a binding obligation of Lessee; provided that such obligation shall not include a
pledge of the taxing power of Lessee.
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6.02 Payment of Rental Payments. Lessee shall promptly pay Rental Payments under the Property Schedule, exclusively from legally available funds, in
lawful money of the United States of America, to Lessor in such amounts and on such dates as described in the Property Schedule, at Lessor's address set forth
on the first page of this Agreement, unless Lessor instructs Lessee otherwise. Lessee shall pay Lessor a charge on any delinquent Rental Payments under the
Property Schedule in an amount sufficient to cover all additional costs and expenses incurred by Lessor and Agent from such delinquent Rental Payment. In
addition, Lessee shall pay a late charge of five cents per dollar or the highest amount permitted by applicable law, whichever is lower, on all delinquent Rental
Payments.
6.03 Interest Component. A portion of each Rental Payment due under the Property Schedule is paid as, and represents payment of, interest, and the
Property Schedule hereunder shall set forth the interest component (or method of computation thereof) of the Rental Payment thereunder during the Lease
Term.
6.04 Rental Payments to be Unconditional. SUBJECT TO SECTION 6.06, THE OBLIGATIONS OF LESSEE TO PAY THE RENTAL PAYMENTS DUE
UNDER THE PROPERTY SCHEDULE AND TO PERFORM AND OBSERVE THE OTHER COVENANTS AND AGREEMENTS CONTAINED HEREIN SHALL
BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WITHOUT ABATEMENT, DIMINUTION, DEDUCTION, SET-OFF OR DEFENSE, FOR ANY REASON,
INCLUDING WITHOUT LIMITATION, ANY DEFECTS, MALFUNCTIONS, BREAKDOWNS OR INFIRMITIES IN THE PROPERTY OR ANY ACCIDENT,
CONDEMNATION OR UNFORESEEN CIRCUMSTANCES. THIS PROVISION SHALL NOT LIMIT LESSEE'S RIGHTS OR ACTIONS AGAINST ANY VENDOR
AS PROVIDED IN SECTION 10.02.
6.05 Continuation of Lease by Lessee. Lessee intends to continue the Property Schedule entered into pursuant to this Agreement and to pay the Rental
Payments thereunder. Lessee reasonably believes that legally available funds in an amount sufficient to make all Rental Payments during the term of the
Property Schedule can be obtained. Lessee agrees that its staff will provide, during the budgeting process for each budget year to the governing body of Lessee,
notification of any Rental Payments due under the Property Schedule during the following budget year. Notwithstanding this covenant, if Lessee fails to
appropriate the Rental Payments for the Property Schedule pursuant to Section 6.06, the Property Schedule shall terminate. Although Lessee has made this
covenant, in the event that it fails to provide such notice, no remedy is provided and Lessee shall not be liable for any damages for its failure to so comply.
6.06 Non-Appropriation. If sufficient funds are not appropriated to make Rental Payments required under the Property Schedule, the Property Schedule
shall terminate and Lessee shall not be obligated to make Rental Payments under the Property Schedule beyond the then current fiscal year for which funds
have been appropriated. Upon the occurrence of such nonappropriation (an "Event of Nonappropriation") Lessee shall, no later than the end of the fiscal year for
which Rental Payments have been appropriated, deliver possession of the Property under the Property Schedule to Lessor. If Lessee fails to deliver possession
of the Property to Lessor upon termination of the Property Schedule by reason of an Event of Nonappropriation, the termination shall nevertheless be effective
but Lessee shall be responsible for the payment of damages in an amount equal to the portion of Rental Payments thereafter coming due that is attributable to
the number of days after the termination during which the Lessee fails to deliver possession and for any other loss suffered by Lessor as a result of Lessee's
failure to deliver possession as required. In addition, Lessor may, by written instructions to the Agent or to any other escrow agent who is holding proceeds of the
Property Schedule, instruct the Agent or such escrow agent to release all such proceeds and any earnings thereon to Lessor, such sums to be credited to
Lessee's obligations under the Property Schedule and this Agreement. Lessee shall notify Lessor in writing within seven (7) days after the failure of the Lessee
to appropriate funds sufficient for the payment of the Rental Payments, but failure to provide such notice shall not operate to extend the Lease Term or result in
any liability to Lessee. Non-appropriation shall not constitute a beach of the Agreement.
6.07 Defeasance of Rental Payments. Lessee may at any time irrevocably deposit in escrow with a defeasance escrow agent for the purpose of paying
all of the principal component and interest component accruing under the Property Schedule, a sum of cash and non-callable securities consisting of direct
obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America or any agency or
instrumentality thereof, in such aggregate amount, bearing interest at such rates and maturing on such dates as shall be required to provide funds sufficient for
this purpose. Upon such defeasance, all right, title and interest of Lessor in the Property under the Property Schedule shall terminate. Lessee shall cause such
investment to comply with the requirements of federal tax law so that the exclusion from gross income of the interest component of Rental Payments on the
Property Schedule is not adversely affected.
ARTICLE VII
7.01 Title to the Property. Upon acceptance of the Property by Lessee and unless otherwise required by the laws of the State, title to the Property shall
vest in Lessee, subject to Lessor's interests under the Property Schedule and this Agreement.
7.02 Personal Property. The Property is and will remain personal property and will not be deemed to be affixed to or a part of the real estate on which it
may be situated, notwithstanding that the Property or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or
any building thereon. If requested by Lessor, Lessee will, at Lessee's expense, furnish a waiver of any interest in the Property from any party having an interest
in any such real estate or building.
7.03 Security Interest. To secure the performance of all of Lessee's obligations under this Agreement, including without limitation the Property Schedule
now existing, Lessee grants to Lessor, for the benefit of Lessor and its successors and assigns, a security interest constituting a first lien on Lessee's interest in
all of the Property, whether now owned or hereafter acquired, all additions, attachments, alterations and accessions to the Property, all substitutions and
replacements for the Property, and on any proceeds of any of the foregoing, including insurance proceeds. Lessee shall execute any additional documents,
including financing statements, affidavits, notices and similar instruments, in form and substance satisfactory to Lessor, which Lessor deems necessary or
appropriate to establish, maintain and perfect a security interest in the Property in favor of Lessor and its successors and assigns. Lessee hereby authorizes
Lessor to file all financing statements which Lessor deems necessary or appropriate to establish, maintain and perfect such security interest.
7.04 Substitution. Lessee may substitute for all or any portion of the Property under the Property Schedule personal property of approximately equal or
greater market value and with an equal or greater useful life. In the event of any such substitution, Lessee shall deliver to Lessor a certification that the personal
property proposed to be substituted has approximately equal or greater market value and an equal or greater useful life as the portion of the Property being
substituted for. Lessee shall be responsible for all costs and expenses for any such substitution. Lessee shall cause all financing statements, fixture filings,
certificates of title, affidavits, notices and similar instruments, to be made or filed in a timely manner to secure and perfect the security interest of Lessor in the
substituted property.
ARTICLE VIII
8.01 Maintenance of Property by Lessee. Lessee shall keep and maintain the Property in good condition and working order and in compliance with the
manufacturer's specifications, shall use, operate and maintain the Property in conformity with all laws and regulations concerning the Property's ownership,
possession, use and maintenance, and shall keep the Property free and clear of all liens and claims, other than those created by this Agreement. Lessee shall
have sole responsibility to maintain and repair the Property.
8.02 Liens Taxes Other Governmental Charges and Utility Charges. Lessee shall keep the Property free of all levies, liens and encumbrances,
except for the interest of Lessor under this Agreement. The parties to this Agreement contemplate that the Property will be used for a governmental or
proprietary purpose of Lessee and, therefore, that the Property will be exempt from all property taxes. The Rental Payments payable by Lessee under this
Agreement and the Property Schedule hereunder have been established to reflect the savings resulting from this exemption from taxation. Lessee will take such
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actions necessary under applicable law to obtain said exemption. Nevertheless, if the use, possession or acquisition of the Property is determined to be subject
to taxation or later becomes subject to such taxes, Lessee shall pay when due all taxes and governmental charges lawfully assessed or levied against or with
respect to the Property. Lessee shall pay all gas, water, steam, electricity, heat, power, telephone, utility and other charges incurred in the operation,
maintenance, use, occupancy and upkeep of the Property. Lessee shall pay such taxes or charges as the same may become due; provided that, with respect to
any such taxes or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue
during the then current fiscal year of the Lease Term for such Property.
8.03 Insurance. At its own expense, Lessee shall maintain (a) casualty insurance insuring the Property against loss or damage by fire and all other risks
covered by the standard extended coverage endorsement then in use in the State and any other risks reasonably required by Lessor in an amount equal to at
least the outstanding principal component of Rental Payments, and (b) liability insurance that protects Lessor from liability in all events in an amount reasonably
acceptable to Lessor, and (c) worker's compensation insurance covering all employees working on, in, near or about the Property; provided that Lessee may
self-insure against all such risks. All insurance proceeds from casualty losses shall be payable as hereinafter provided in this Agreement. All such insurance
shall be with insurers that are authorized to issue such insurance in the State. All such liability insurance shall name Lessor as an additional insured. All such
casualty insurance shall contain a provision making any losses payable to Lessor and Lessee as their respective interests may appear. All such insurance shall
contain a provision to the effect that such insurance shall not be canceled or modified without first giving written notice thereof to Lessor and Lessee at least
thirty (30) days in advance of such cancellation or modification. Lessee shall furnish to Lessor, on or before the Commencement Date for the Property Schedule,
and thereafter at Lessor's request, certificates evidencing such coverage, or, if Lessee self-insures, a written description of its self-insurance program together
with a certification from Lessee's risk manager or insurance agent or consultant to the effect that Lessee's self-insurance program provides adequate coverage
against the risks listed above.
8.04 Advances. In the event Lessee shall fail to either maintain the insurance required by this Agreement or keep the Property in good repair and working
order, Lessor may, but shall be under no obligation to, purchase the required insurance and pay the cost of the premiums thereof or maintain and repair the
Property and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the Lease Term for the Property Schedule for which the
Property is under and shall be due and payable on the next Rental Payment Date and Lessee covenants and agrees to pay such amounts so advanced by
Lessor with interest thereon from the date such amounts are advanced until paid at the rate of 12% per annum or the maximum amount permitted by law,
whichever is less.
ARTICLE IX
9.01 Damage or Destruction. If (a) the Property under the Property Schedule 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 Property under the Property Schedule or any part thereof shall be taken under the exercise or threat
of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, Lessor and Lessee
will cause the Net Proceeds (as hereinafter defined) of any insurance claim, condemnation award or sale under threat of condemnation to be applied to the
prompt replacement, repair, restoration, modification or improvement of the Property, unless Lessee shall have exercised its right to defease the Property
Schedule as provided herein, or unless Lessee shall have exercised its option to purchase Lessor's interest in the Property if the Property Schedule so provides.
Any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee. For purposes of Section 14.02(b) and this Article IX,
the term "Net Proceeds" shall mean the amount remaining from the gross proceeds of any insurance claim, condemnation award or sale under threat of
condemnation after deducting all expenses, Including attorneys' fees, incurred in the collection thereof.
9.02 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 9.01, Lessee shall (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of
the amount of the Net Proceeds and, if Lessee shall make any payments pursuant to this Section, Lessee shall not be entitled to any reimbursement therefor
from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Section 6.02, or (b) defease the Property Schedule pursuant to Section
6.07, or (c) exercise its option to purchase Lessor's interest in the Property pursuant to the optional purchase provisions of the Property Schedule, if any. The
amount of the Net Proceeds, if any, remaining after completing such repair, restoration, modification or improvement or after such defeasance or purchase may
be retained by Lessee.
ARTICLE X
10.01 Disclaimer of Warranties. LESSOR MAKES NO (AND SHALL NOT BE DEEMED TO HAVE MADE ANY) WARRANTIES, EXPRESS OR IMPLIED,
AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE DESIGN, OPERATION OR CONDITION OF, OR THE QUALITY OF THE
MATERIAL, EQUIPMENT OR WORKMANSHIP IN, THE PROPERTY, ITS MERCHANTABILITY OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE
STATE OF TITLE THERETO OR ANY COMPONENT THEREOF, THE ABSENCE OF LATENT OR OTHER DEFECTS (WHETHER OR NOT DISCOVERABLE),
AND LESSOR HEREBY DISCLAIMS THE SAME; IT BEING UNDERSTOOD THAT THE PROPERTY IS LEASED TO LESSEE "AS IS" ON THE DATE OF THIS
AGREEMENT OR THE DATE OF DELIVERY, WHICHEVER IS LATER, AND ALL SUCH RISKS, IF ANY, ARE TO BE BORNE BY LESSEE. Lessee
acknowledges that it has made (or will make) the selection of the Property from the Vendor based on its own judgment and expressly disclaims any reliance
upon any statements or representations made by Lessor. Lessee understands and agrees that (a) neither the Vendor nor any sales representative or other
agent of Vendor, is (i) an agent of Lessor, or (ii) authorized to make or alter any term or condition of this Agreement, and (b) no such waiver or alteration shall
vary the terms of this Agreement unless expressly set forth herein. In no event shall Lessor be liable for any incidental, indirect, special or consequential
damage in connection with or arising out of this Agreement, the Property Schedule, or the existence, furnishing, functioning or use of any item, product or
service provided for in this Agreement or the Property Schedule.
10.02 Vendor's Warranties. Lessor hereby irrevocably assigns to Lessee all rights that Lessor may have to assert from time to time whatever claims and
rights (including without limitation warranties) related to the Property against the Vendor. Lessee's sole remedy for the breach of such warranty, indemnification
or representation shall be against the Vendor of the Property, 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 representations or warranties whatsoever as to the existence or the availability of such warranties of the Vendor of the
Property.
10.03 Use of the Property. Lessee will not install, use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a
manner contrary to that contemplated by this Agreement and the Property Schedule. Lessee shall provide all permits and licenses, if any, necessary for the
installation and operation of the Property. In addition, Lessee agrees to comply in all respects with all laws of the jurisdiction in which its operations involving any
item of Property may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the items of the Property;
provided that Lessee may contest in good faith the validity or application of any such law or rule in any reasonable manner that does not, in the opinion of
Lessor, adversely affect the interest of Lessor in and to the Property or its interest or rights under this Agreement. Lessee shall promptly notify Lessor in writing
of any pending or threatened investigation, inquiry, claim or action by any governmental authority which could adversely affect this Agreement, the Property
Schedule or the Property thereunder.
10.04 Modifications. Subject to the provisions of this Section, Lessee shall have the right, at its own expense, to make alterations, additions, modifications
or improvements to the Property. All such alterations, additions, modifications and improvements shall thereafter comprise part of the Property and shall be
subject to the provisions of this Agreement. Such alterations, additions, modifications and improvements shall not in any way damage the Property, substantially
alter its nature or cause it to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, on completion of
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any alterations, additions, modifications or improvements made pursuant to this Section, shall be of a value which is equal to or greater than the value of the
Property immediately prior to the making of such alterations, additions, modifications and improvements. Lessee shall, at its own expense, make such
alterations, additions, modifications and improvements to the Property as may be required from time to time by applicable law or by any governmental authority.
ARTICLE XI
11.01 Option to Purchase. Lessee shall have the option to purchase Lessor's entire interest in all of the Property subject to the Property Schedule and to
terminate any restrictions herein on the Property under the Property Schedule on the last day of the Lease Term for the Property Schedule, if the Property
Schedule is still in effect on such day, upon payment in full of the Rental Payments due thereunder plus payment of One (1) Dollar to Lessor. Lessee shall give
written notice to Lessor of its intent to purchase Lessor's interest in the Property at least sixty (60) days prior to the last day of the Lease Term for the Property
Schedule. Upon exercise of the purchase option as set forth in this Section 11.01 and payment of the purchase price under the Property Schedule, and
performance by Lessee of all other terms, conditions and provisions hereof, Lessor shall deliver to Lessee all such documents and instruments as Lessee may
reasonably require to evidence the transfer, without warranty by or recourse to Lessor, of all of Lessor's right, title and interest in and to the Property subject to
the Property Schedule to Lessee.
11.02 Option to Prepay. Lessee shall have the option to prepay the Rental Payments due under the Property Schedule, but only if the Property Schedule
so provides, and on the terms set forth in the Property Schedule.
ARTICLE XII
12.01 Assignment by Lessor. Lessor's right, title and interest in, to and under the Property Schedule and the Property under the Property Schedule may
be assigned and reassigned in whole or in part to one or more assignees or subassignees by Lessor and, to the extent of their interest, by any Registered
Owner, without the necessity of obtaining the consent of Lessee; provided that (i) any assignment, other than an assignment to or by a Registered Owner, shall
not be effective until Lessee has received written notice, signed by the assignor, of the name, address and tax identification number of the assignee, and (ii) any
assignment to or by a Registered Owner shall not be effective until it is registered on the registration books kept by the Agent. Lessee shall retain all such
notices as a register of all assignees (other than Registered Owners) and shall make all payments to the assignee or assignees designated in such register or, in
the case of Registered Owners, to the Agent. In the event that Lessor's interest in the Property Schedule and the Property thereunder is assigned to the Agent,
Lease Participation Certificates in the Property Schedule may be executed and delivered by the Agent to Registered Owners. Lessee agrees to execute all
documents, including notices of assignment and chattel mortgages or financing statements that may be reasonably requested by Lessor or any assignee to
protect its interests in this Agreement and the Property Schedule.
12.02 Property Schedules Separate Financings. This section is DELETED.
12.03 Assignment and Subleasing by Lessee. NONE OF LESSEE'S RIGHT, TITLE AND INTEREST IN, TO AND UNDER THIS AGREEMENT AND IN
THE PROPERTY MAY BE ASSIGNED, SUBLEASED OR ENCUMBERED BY LESSEE FOR ANY REASON, WITHOUT THE PRIOR WRITTEN CONSENT OF
LESSOR.
12.04 Release and Indemnification Covenants. To the extent permitted by law, and only to the extent permitted by the laws of the State of Texas, Lessee
and Lessor shall indemnify, protect and hold harmless the other party for liability arising from any and all claims, injury, loss, cost or damage to person or
property occasioned by the activities of its own agents or employees in the performance of its respective responsibilities under this Agreement; which
obligations, under this Section 12.04, shall remain valid and binding notwithstanding termination of the Agreement. This paragraph is intended to define the
liabilities between the Lessee and Lessor and is not intended to modify, in any way, the parties' liabilities as may otherwise be governed by law.
ARTICLE XIII
13.01 Events of Default Defined. Any of the following shall constitute an "Event of Default" under the Property Schedule:
(a) Failure by Lessee to pay any Rental Payment under the Property Schedule or other payment required to be paid with respect thereto at the time
specified therein;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed with respect to the
Property Schedule, other than as referred to in subparagraph (a) above, for a period of thirty (30) days after written notice specifying such failure
and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its
expiration; provided that, 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;
(c) Any statement, representation or warranty made by Lessee in or pursuant to the Property Schedule or its execution, delivery or performance
shall prove to have been false, incorrect, misleading or breached in any material respect on the date when made;
(d) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of
the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general
assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable federal bankruptcy law, or (v) file a
voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any
insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, reorganization or insolvency
proceeding; or
(e) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee,
custodian or liquidator of Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent,
and such order, judgment or decree shall continue unstayed and in effect for any period of 60 consecutive days.
The foregoing provisions of Section 13.01 are subject to the following limitation: if by reason of force maieure Lessee is unable in whole or in part to
perform its agreements under this Agreement and the Property Schedule (other than the obligations on the part of Lessee contained in Article VI hereof) Lessee
shall not be in default during the continuance of such inability. The term "force maieure" as used herein shall mean the following: acts of God; strikes, lockouts or
other industrial disturbances; acts of public enemies; orders or restraints of any kind of the government of the United States or of the State or any of their
departments, agencies or officials, or any civil or military authority; insurrections, riots, landslides, earthquakes, fires, storms, droughts, floods, explosions,
breakage or accident to machinery, transmission pipes or canals; or any other cause or event not reasonably within the control of Lessee.
13.02 Remedies on Default. Whenever any Event of Default exists with respect to the Property Schedule, Lessor shall have the right, at its sole option
without any further demand or notice, to take one or any combination of the following remedial steps:
(a) Without terminating the Property Schedule, and by written notice to Lessee, Lessor may declare all Rental Payments and other amounts payable
by Lessee thereunder to the end of the then-current budget year of Lessee to be due, including without limitation delinquent Rental Payments
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under the Property Schedule from prior budget years, and such amounts shall thereafter bear interest at the rate of 12% per annum or the
maximum rate permitted by applicable law, whichever is less;
(b) Lessor may terminate the Property Schedule, may enter the premises where the Property subject to the Property Schedule is located and retake
possession of the Property, or require Lessee, at Lessee's expense, to promptly return any or all of the Property to the possession of Lessor at
such place within the United States as Lessor shall specify, and Lessor may thereafter dispose of the Property in accordance with Article 9 of the
Uniform Commercial Code in effect in the State; provided, however, that any proceeds from the disposition of the property in excess of the sum
required to (i) defease the Property Schedule pursuant to Section 6.07, (ii) pay any other amounts then due under the Property Schedule, and
(iii) pay Lessor's costs and expenses associated with the disposition of the Property (including attorneys fees), shall be paid to Lessee or such
other creditor of Lessee as may be entitled thereto, and further provided that no deficiency shall be allowed against Lessee;
(c) By written notice to the Agent, if any, Lessor may instruct the Agent to apply all sums held by the Agent in any accounts relating to the Property
Schedule under the applicable escrow or trust agreement as provided in the applicable escrow or trust agreement.
(d) By written notice to any escrow agent (other than the Agent) who is holding proceeds of the Property Schedule, Lessor may instruct such escrow
agent to release all such proceeds and any earnings thereon to Lessor, such sums to be credited to payment of Lessee's obligations under the
Property Schedule;
(e) Lessor may take any action, at law or in equity, that is permitted by applicable law and that may appear necessary or desirable to enforce or to
protect any of its rights under the Property Schedule and this Agreement.
13.03 No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor 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 now or hereafter existing at law or in equity. No delay or omission to exercise
any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may
be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article it shall
not be necessary to give any notice, other than such notice as may be required in this Article.
13.04 Costs and Attorney Fees. In the event suit or action is instituted to enforce any of the terms of this Agreement, the prevailing party shall be entitled
to recover from the other party such sum as the court may adjudge reasonable as attorneys' fees at trial or on appeal of such suit or action or in any bankruptcy
proceeding, in addition to all other sums provided by law. If no party can be considered the prevailing party, the judge will have the discretion to equitable
apportion the costs and expenses.
ARTICLE XIV
14.01 Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed
by certified mail, postage prepaid, to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either
party hereto shall designate in writing to the other for notices to such party), to any assignee (other than a Registered Owner) at its address as it appears on the
registration books maintained by Lessee and to any Registered Owner at its address as it appears on the registration books maintained by the Agent.
14.02 Certification as to Arbitrage. Unless a separate Certificate as to Arbitrage is delivered on the Commencement Date, Lessee shall be deemed to
make the following representations and covenants as of the Commencement Date for the Property Schedule:
(a) The estimated total costs, including taxes, freight, installation, cost of issuance, of the Property under the Property Schedule will not be less than
the total principal amount of the Rental Payments.
(b) The Property under the Property Schedule has been ordered or is expected to be ordered within six months and the Property is expected to be
delivered and installed, and the Vendor fully paid, within one year from the Commencement Date. Lessee will pursue the completion of the
Property and the expenditure of the net proceeds of the Property Schedule with due diligence.
(c) Lessee has not created or established, and does not expect to create or establish, any sinking fund or other similar fund (i) that is reasonably
expected to be used to pay the Rental Payments under the Property Schedule, or (ii) that may be used solely to prevent a default in the payment
of the Rental Payments under the Property Schedule.
(d) The Property under the Property Schedule has not been and is not expected to be sold or otherwise disposed of by Lessee, either in whole or in
major part, prior to the last maturity of the Rental Payments under the Property Schedule.
(e) There are no other obligations of Lessee which (i) are being sold within 15 days of the Commencement Date of the Property Schedule; (ii) are
being sold pursuant to the same plan of financing as the Property Schedule; and (iii) are expected to be paid from substantially the same source
of funds.
(f) The officer or official who has executed the Property Schedule on Lessee's behalf is familiar with Lessee's expectations regarding the use and
expenditure of the proceeds of the Property Schedule. To the best of Lessee's knowledge, information and belief, the facts and estimates set
forth herein are accurate and the expectations of Lessee set forth herein are reasonable.
14.03 Further Assurances. Lessee agrees to execute such other and further documents, including, without limitation, confirmatory financing statements,
continuation statements, certificates of title and the like, and to take all such action as may be necessary or appropriate, from time to time, in the reasonable
opinion of Lessor, to perfect, confirm, establish, reestablish, continue, or complete the interests of Lessor in this Agreement and the Property Schedule, to
consummate the transactions contemplated hereby and thereby, and to carry out the purposes and intentions of this Agreement and the Property Schedule.
14.04 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and
assigns.
14.05 Severabilitv. 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.
14.06 Waiver of Jury Trials. Lessee and Lessor hereby irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this Agreement or the actions of Lessor or Lessee in the negotiation, administration, performance or
enforcement hereof.
14.07 Amendments. Changes and Modifications. This Agreement may be amended in writing by Lessor and Lessee to the extent the amendment or
modification does not apply to this Property Schedule at the time of such amendment or modification. The consent of the applicable assignee or Agent, if any,
shall be required to any amendment or modification before such amendment or modification shall be applicable to this Property Schedule.
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14.08 Execution in Counterparts. This Agreement and the Property Schedule hereunder may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
14.09 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. Venue shall be in Denton
County, Texas.
14.10 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 or sections of this Agreement.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Agreement to be executed in their names by their duly authorized representatives as
of the date first above written.
Lessor: Ke
y Governme t Finance, Inc.
By:
Name:
MYRA K rAMIT
Title:
CONTRACTS MANAGER
Lessee: City of De
B :
Name:
Title:
Attest BV:
Name:
Title:
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF DENTONN, TEXAS
BY: 422~
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Addendum to Tax-Exempt Lease/Purchase Agreement
Texas Counties, Municipalities, Hospital Districts, Fire Districts and School Districts
THIS ADDENDUM, which is entered into as of 7/1/2011, between Key Government Finance, Inc. ("Lessor")
and City of Denton ("Lessee"), is intended to modify and supplement the Tax-Exempt Lease/Purchase Agreement between
Lessor and Lessee of even date herewith (the "Master Agreement'). Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Master Agreement.
Notwithstanding anything to the contrary set forth in the Master Agreement, the Master Agreement is
amended as follows:
Section 6.05 is deleted in its entirety.
If Lessee is a school district, in addition to the representations, warranties, and covenants contained in the
Master Agreement, Lessee represents and warrants that the requirements of Education Code sections 44.031 and 44.033, if
applicable, have been complied with.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Addendum to be executed in their names by their duly
authorized representatives as of the date first above written.
Lessor: Key Government Finance, Inc.
1,4
B:
Name:
Title: CONTRACTS MANAGER
Lessee: City of Denton
B :
Name:
Title:
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF DENTON, TEXAS
BY:
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Property Schedule
Tax-Exempt Lease/Purchase Agreement
This Property Schedule is entered into as of the Commencement Date set forth below, pursuant to that certain Tax-Exempt
Lease/Purchase Agreement (the "Master Agreement"), dated as of 7/112011, between Key Government Finance, Inc., and City of
Denton.
1. Interpretation. The terms and conditions of the Master Agreement are incorporated herein by reference as if fully set forth herein.
Reference is made to the Master Agreement for all representations, covenants and warranties made by Lessee in the execution of this
Property Schedule, unless specifically set forth herein. In the event of a conflict between the provisions of the Master Agreement and
the provisions of this Property Schedule, the provisions of this Property Schedule shall control. All capitalized terms not otherwise
defined herein shall have the meanings provided in the Master Agreement.
2. Commencement Date. The Commencement Date for this Property Schedule is 7/1/2011.
3. Property Description and Payment Schedule. The Property subject to this Property Schedule is described in Exhibit A hereto. Lessee
shall not remove such property from the locations set forth therein without giving prior written notice to Lessor. The Rental Payment
Schedule for this Property Schedule is set forth in Exhibit 1.
4. Lessee's Certificate. The Lessee's Certificate is attached as Exhibit 2
5. Proceeds. Lessor shall disburse the proceeds of this Property Schedule in accordance with the instructions attached hereto as Exhibit
3
6. Acceptance Certificate. The form of Acceptance Certificate is attached as Exhibit 4
7. Additional Purchase Option Provisions. In addition to the Purchase Option provisions set forth in the Master Agreement, Rental
Payments payable under this Property Schedule shall be subject to prepayment as follows: See termination amount in Exhibit 1
(Payment Schedule), subject to per diem adjustment.
8. Bank Qualification and Arbitrage Rebate. Attached as Exhibit 5
9. Expiration. Lessor, at its sole determination, may choose not to accept this Property Schedule if the fully executed, original
Agreement (including this Property Schedule and all ancillary documents) are not received by Lessor at its place of business by
7/26/2011.
IN WITNESS WHEREOF, Lessor and Lessee have caused this Property Schedule to be executed in their names by their duly authorized
representatives as of the Commencement Date above.
Lessor: Key Government Finance, Inc.
By:
Name: MYRA AKSA
Title: CONTR
Lessee: City of Denton
B : ~I
Name:
Title: C. L7
6f
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF DENTON, TEXAS
BY:
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EXHIBIT 1
Property Description and Payment Schedule
Re: Property Schedule to Tax-Exempt Lease/Purchase Agreement between Key Government Finance, Inc. and City
of Denton.
The Property is as follows: The Property as more fully described in Exhibit A incorporated herein by reference and
attached hereto.
EQUIPMENT LOCATION: 215 E. McKinney, Denton, TX 76205
USE: Networking - This use is essential to the proper, efficient and economic functioning of Lessee or to the services that
Lessee provides; and Lessee has immediate need for and expects to make immediate use of substantially all of the
Property, which need is not temporary or expected to diminish in the foreseeable future.
Rental Payment Schedule
If the Due Dates are not defined in this Rental Payment Schedule, they shall be defined as the first day of each monthly
period of this Rental Payment Schedule commencing with the Acceptance Date.
Total Principal Amount $696,185.54
The financing table below is net of the special financing promotion payment from Cisco Systems, Inc. in the amount of
$5,006.20. This payment will be made by Cisco to Lessor.
Payment No.
Due Date
Payment
Made by
Cisco
Payment
Made by
Lessee
Principal
Interest
Termination
1
7/1/2011
5,006.20
118,591.00
123,597.20
0.00
589,765.99
2
11/1/2011
237,182.00
231,219.63
5,962.37
351,609.77
3
11/1/2012
237,182.00
226,406.54
10,775.46
118,411.03
4
11/1/2013
118,591.00
114,962.17
3,628.83
0.00
Lessee: City of Denton
B /
Name: L (14ed
Title:
APPROVED AS TO FORM:
CITY ATTORNEY
CITY OF DENTON, TEXAS _
BY:
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EXHIBIT A
Property Description
Nexus 7000
UCS Expansion Primary Site
EMC VPLEX
VBLOCK
DS-SFP-FC8G-LW
Professional Services
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EXHIBIT 2
Lessee's Certificate
Re: Property Schedule to Tax--Exempt Lease/Purchase Agreement between Key Government Finance, Inc. and City
of Denton.
The undersigned, being the duly elected, qualified and acting of the City of Denton ("Lessee") do
hereby certify, as of 7/112011, as follows: ) q
1. Lessee did, at a meeting of the governing body of the Lessee held on by resolution
or ordinance duly enacted, in accordance with all requirements of law, approve and authorize the execution and delivery of
the above-referenced Property Schedule (the "Property Schedule") and the Tax-Exempt Lease/Purchase Agreement (the
"Master Agreement") by the following named representative of Lessee, to wit:
NAMEOF EXECUTING OFFICIAL
(Official who signed the documents.)
TITLE
OF EXECUTING OFFICIAL
SIGNATURE
F EX L
/11
J
c ,
And/ 'Or
2. The above-named representative of the Lessee held at the time of such authorization and holds at the
present time the office set forth above.
3. The meeting(s) of the governing body of the Lessee at which the Master Agreement and the Property
Schedule were approved and authorized to be executed was duly called, regularly convened and attended throughout by
the requisite quorum of the members thereof, and the enactment approving the Master Agreement and the Property
Schedule and authorizing the execution thereof has not been altered or rescinded. All meetings of the governing body of
Lessee relating to the authorization and delivery of Master Agreement and the Property Schedule have been: (a) held
within the geographic boundaries of the Lessee; (b) open to the public, allowing all people to attend; (c) conducted in
accordance with internal procedures of the governing body; and (d) conducted in accordance with the charter of the
Lessee, if any, and the laws of the State.
4. No event or condition that constitutes, or with the giving of notice or the lapse of time or both would
constitute, an Event of Default or an Event of Nonappropriation (as such terms are defined in the Master Agreement)
exists at the date hereof with respect to this Property Schedule under the Master Agreement.
5. The acquisition of all of the Property under the Property Schedule has been duly authorized by the
governing body of Lessee.
6. Lessee has, in accordance with the requirements of law, fully budgeted and appropriated sufficient funds
for the current budget year to make the Rental Payments scheduled to come due during the current budget year under the
Property Schedule and to meet its other obligations for the current budget year and such funds have not been expended
for other purposes.
7. As of the date hereof, no litigation is pending, (or, to my knowledge, threatened) against Lessee in any
court (a) seeking to restrain or enjoin the delivery of the Master Agreement or the Property Schedule or of other
agreements similar to the Master Agreement; (b) questioning the authority of Lessee to execute the Master Agreement or
the Property Schedule, or the validity of the Master Agreement or the Property Schedule, or the payment of principal of or
interest on, the Property Schedule; (c) questioning the constitutionality of any statute, or the validity of any proceedings,
authorizing the execution of the Master Agreement and the Property Schedule; or (d) affecting the provisions made for the
payment of or security for the Master Agreement and the Property Schedule.
City of Dent
Attest By: , Wr
Title: t',
SOMEONE OTHER HAN THE EXECUTING O IAL S SHOWN ABOVE MUST SIGN HERE,
V
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EXHIBIT 3
Payment of Proceeds Instructions
Key Government Finance, Inc.
1000 South McCaslin Blvd.
Superior, CO 80027
Re: Property Schedule (the "Property Schedule") to Tax-Exempt Lease/Purchase Agreement between Key
Government Finance, Inc. ("Lessor") and City of Denton ("Lessee").
Ladies and Gentlemen:
The undersigned, an Authorized Representative of the Lessee hereby requests and authorizes Lessor to disburse the net
proceeds of the Property Schedule as follows:
Name of Payee: Key Bank N.A.
By check
City of Denton
By:
By wire transfer X
Name: e-D°Tgi C-
Title:
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EXHIBIT 4
Acceptance Certificate
Key Government Finance, Inc.
1000 South McCaslin Blvd.
Superior, CO 80027
Re: Property Schedule to Tax-Exempt Lease/Purchase Agreement between Key Government Finance, Inc. and City
of Denton
Ladies and Gentlemen:
In accordance with the above-referenced Tax-Exempt Lease/Purchase Agreement (the "Master Agreement"), the
undersigned ("Lessee") hereby certifies and represents to, and agrees with, Key Government Finance, Inc. ("Lessor"), as
follows:
(1) The Property, as such terms are defined in the above-referenced Property Schedule, has been acquired,
made, delivered, installed and accepted on the date indicated below.
(2) Lessee has conducted such inspection and/or testing of the Property as it deems necessary and appropriate
and hereby acknowledges that it accepts the Property for all purposes.
(3) No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of
Default or an Event of Nonappropriation (as such terms are defined in the Master Agreement) exists at the
date hereof.
Date: / Z,
City enton
as Lessee
By:
Narr
Title
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EXHIBIT 5
Bank Qualification Certificate
Key Government Finance, Inc.
1000 South McCaslin Blvd.
Superior, CO 80027
Re: Master Tax-Exempt Lease/Purchase Agreement between Key Government Finance, Inc. and City of Denton
Bank Qualified Tax-Exempt Obligation
❑ (Check box for Bank Qualified designation)
Lessee hereby designates this Property Schedule as a "qualified tax-exempt obligation" as defined in Section
265(b)(3)(B) of the Code. Lessee reasonably anticipates issuing tax-exempt obligations (excluding private activity bonds other
than qualified 501(c)(3) bonds and including all tax-exempt obligations of subordinate entities of the Lessee) during the
calendar year in which the Commencement Date of this Property Schedule falls, in an amount not exceeding $10,000,000.00.
Non-Bank Qualified Tax-Exempt Obligation
(Check box for Non-Bank Qualified designation)
` Lessee reasonably anticipates issuing more than $10,000,000.00 in tax-exempt obligations in the calendar year of the
Commencement Date as defined in the Property Schedule.
"Note: ONE of the boxes above MUST be checked.
Lessee: City of Denton
By: 11
Name: ®~z e-
Title:
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
"Please fill out this form and fax it to your insurance company"
Request for Certificate of Insurance
TO:
Insurance Carrier: (Name)
(Address)
(Address)
(Contact Name)
(Contact Phone)
(Contact Fax) _
FROM:
Customer/Lessee: City of Denton
215 E. McKinney
Denton, TX 76201
Contact Name: Director of Technology Kevin Gunn
Contact Phone: 940-349-8595
Contact Fax: 940-349-8533
City of Denton is in the process of financing Networking equipment with Key Government Finance, Inc.
City of Denton requests that Key Government Finance, Inc. be listed as "Key Government Finance, Inc., their
successors and assigns" and that it be named ADDITIONAL INSURED as to liability coverage and LOSS
PAYEE as to property coverage. A copy of said certificate should be forwarded to Key Government Finance,
Inc. as described below.
NOTE: Coverage is to include:
(1) insurance against all risks of physical loss or damage to the Equipment;
(2) commercial general liability insurance (including blanket contractual liability coverage and products
liability coverage) for personal and bodily injury and property damage of not less than $1,000,000; and
(3) if applicable, automobile liability coverage of not less than $3,000,000.
Key Government Finance, Inc. is to receive 30 days prior written notice of cancellation or material change in
coverage. Qualifying language such as "endeavor to provide"; "but failure to do so shall impose no
obligation or liability of any kind upon the insurer, its agents or representative" or the like will NOT be
accepted and will delay funding.
❑ 1. Please FAX this completed information to:
Key Government Finance, Inc.
Isaac Hudson , Account Manager
Phone Number: 720-304-1288
Fax Number: 866-840-3016
❑ 2. Please MAIL a Certificate of Insurance to:
Key Government Finance, Inc.
Isaac Hudson
1000 S. McCaslin Boulevard
Superior, CO 80027
❑ 3. Please CONTACT the Account Manager:
✓ When faxing this Certificate.
✓ If this cannot be completed today.
✓ If you have any questions.
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
Notification of Tax Treatment
Key Government Finance, Inc. is required to collect and remit sales/use tax in the taxing jurisdiction where your equipment
will be located. In the event we do not receive a valid sales tax exemption certificate prior to the date your lease
commences, you will be charged sales/use tax.
Personal property tax returns will be filed as required by local law. In the event that any tax abatements or special
exemptions are available on the equipment you will be leasing from us, please notify us as soon as possible and forward
the related documentation to us. This will ensure that your leased equipment will be reported correctly.
Please indicate below if you feel that your lease is subject to tax or whether a valid exemption exists.
I agree that my lease is subject to sales/use tax.
X I am exempt from sales/use tax and I have attached a completed exemption certificate to Key
Government Finance, Inc.
I have previously provided a completed exemption certificate to Key Government Finance, Inc. which is
valid for this transaction.
am exempt from state tax but subject to local tax. I have attached a completed exemption certificate.
have a valid abatement or property tax exemption (documentation attached).
If applicable to the tax rates in your state, are you outside the city limits or in an unincorporated area?
Additional comments:
Lessee: City
of Denton
By:
~
-
Name:
~c, fz L
Title: L/14
c ,
1 LY
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
LESSEE INVOICE INSTRUCTIONS
(The information you provide enables us to invoice you correctly.)
City of Denton
BILL TO ADDRESS:
BILLING CONTACT:
First, M.I. and Last Name:
Title:
Phone Number:
Fax Number:
PURCHASE ORDER NUMBER:
Invoices require purchase order numbers: YES NO
Purchase Order Number:
FEDERAL TAX ID NUMBER:
EQUIPMENT LOCATION (If different from Billing Address):
ADDITIONAL INFORMATION NEEDED ON INVOICE:
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
Escrow Disbursement Instructions for Tax-Exempt financing
In reference to your equipment financing, we will be depositing the financing proceeds directly into an escrow
account. This account will provide you with the ability to disburse funds incrementally (either directly to vendors
or to reimburse yourself) based on equipment invoices (any $ size and frequency). You will control the
disbursement of funds by completing the attached documents.
Escrow Disbursements - The following are the steps that you will need to take when making disbursements
of proceeds from your escrow account:
1. Complete and sign Exhibit A "FORM OF REQUISITION OF COSTS OF PROPERTY". This needs to be
on your letterhead.
2. Complete and sign - Schedule 1 "DISBURSEMENT SCHEDULE" complete with payment information.
3. Attach - Invoice(s) from the Vendor(s).
4. Mail a completed and signed copy of the Exhibit A, Schedule 1 and the Vendor invoices to my attention
at the address listed below.
• Note: If the disbursement from the escrow is for the reimbursement of funds already expended,
you must attach proof of payment (front and back of cancelled checks).
"PLEASE NOTE THAT WE MUST RECEIVE THE ORIGINAL DOCUMENTS"
Once you are ready to do the final disbursement out of the Escrow account:
Final Disbursement - Include the signed and dated original of the Exhibit 4 "ACCEPTANCE
CERTIFICATE" (this document was part of your original document package), along with the Exhibit A
"FORM OF REQUISITION OF COSTS OF PROPERTY" and the rest of the attachments needed.
Additionally, please include a letter stating that this is the final disbursement and that you wish to close the
Escrow account.
If there is any money remaining in the Escrow account, after the final disbursement to the Vendor(s), the
balance will be applied to your next payment.
If you have any questions regarding this information, please give me a call.
Thank you.
Isaac Hudson
Key Government Finance
1000 S. McCaslin Blvd.
Superior CO 80027
720-304-1419
866-840-3016 Fax
KEYCORP CONFIDENTIAL - This is counterpart# of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement"), dated as of 7/l/2011and entered into among Key
Government Finance, Inc. ("Lessor"), City of Denton ("Lessee") and KeyBank National Association (the "Escrow Agent").
RECITALS:
A. Lessor and Lessee are parties to a Tax-Exempt Lease/Purchase Agreement, dated as of 7/l/201 land
the Property Schedule thereunder (the "Lease") whereunder Lessee is acquiring from Lessor certain personal property more
particularly described therein (the "Property").
B. Lessor and Lessee intend to cause or have caused certain funds to be deposited with Escrow Agent to
pay for costs of the Property, and Escrow Agent has agreed to disburse said funds in accordance with the terms and conditions
of this Agreement.
C. Each of the parties has authority to enter into this Agreement and has taken all actions necessary to
authorize the execution of this Agreement by the officers whose signatures are affixed hereto.
NOW, THEREFORE, the parties agree as follows:
1, Appointment of Escrow Agent. Lessor, Lessee and Escrow Agent agree that Escrow Agent shall act as
sole Escrow Agent under the Lease and this Escrow Agreement, in accordance with the terms and conditions set forth in this
Escrow Agreement. The Escrow Agent, in its capacity as escrow agent hereunder, shall not be deemed to be a party to the
Lease, and this Escrow Agreement shall be deemed to constitute the entire agreement regarding the Acquisition Fund (as
hereinafter defined) among Lessor, Lessee and Escrow Agent.
2. Acquisition Fund. There is hereby established in the custody of Escrow Agent a special trust fund
designated as the "City of Denton Acquisition Fund" (the "Acquisition Fund") to be held and administered by Escrow Agent in
trust for Lessee in accordance with this Escrow Agreement, subject to Lessor's rights under Section 3 hereof. It is anticipated
that the funds in the Acquisition Fund and earnings thereon shall be sufficient to pay the cost of acquisition of the Property. In
the event such sums are insufficient, Lessee shall be responsible for the timely payment of any deficiency.
The moneys and investments held by Escrow Agent under this Agreement are irrevocably held in trust for the
benefit of Lessee and Lessor, and such moneys, together with any income or interest earned thereon, shall be expended only as
provided in this Agreement, and shall not be subject to levy or attachment or lien by or for the benefit of any creditor of Lessee
(other than Lessor) or Lessor. Lessor, Lessee and Escrow Agent intend that the Acquisition Fund constitute an escrow account
in which Lessee has no legal or equitable right, title or interest until satisfaction in full of all conditions contained herein and in
the Lease for the disbursement of funds by Escrow Agent therefrom. However, if the parties' intention that Lessee shall have no
legal or equitable right, title or interest until all conditions for disbursement are satisfied in full is not respected in any legal
proceeding, the parties hereto intend that Lessor have a security interest in such account, and such security interest is hereby
granted to Lessor by Lessee, to secure payment of all sums due to Lessor under the Lease. For such purpose, Escrow Agent
hereby agrees to act as agent for Lessor in connection with the perfection of such security interest and agrees to note, or cause
to be noted, on all books and records relating to such accounts, Lessor's interest therein.
2.A. Deposit in Acquisition Fund. There shall be deposited in the Acquisition Fund the sum of $696,185.54.
Escrow Agent shall maintain accounting records sufficient to permit calculation of the income on investments and interest
earned on deposit of amounts held in the Acquisition Fund, and such income and interest shall become part of the Acquisition
Fund and may be expended as provided herein.
2.B. Disbursements from Acquisition Fund. Escrow Agent shall make payments from the Acquisition Fund
to pay costs of the Property upon receipt of requisitions from Lessee, signed by an authorized individual substantially in the form
attached hereto as Exhibit A, which is incorporated by reference herein. In the event Escrow Agent is directed or requested by
Lessee to hold or deposit any retained funds or to accept a retainage bond (in lieu of funds) as may be required by law or the
terms of the acquisition contract to which Lessee is a party, Escrow Agent shall act in accordance with Lessee's instructions,
and such retained funds (or performance bond) and any interest thereon shall be paid as provided in instructions to Escrow
Agent from Lessee. The final requisition shall include the final acceptance certificate required in the Lease, which shall be
executed by the Lessee and delivered to the Escrow Agent. Where requisitions involve titled motor vehicles, the requisition shall
also include:
(i) Manufacturer's Certificate of Origin.
(ii) Motor vehicle paperwork appropriate to state of registration, noting Key Government Finance, Inc. as lien
holder.
(iii) Insurance certificate naming Key Government Finance, Inc., its successors and assigns as sole loss payee and
additional insured for the specified equipment.
3. Termination of Escrow.
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(a) Acquisition of Property. Upon the final acceptance of the Property by Lessee, as evidenced by
execution by Lessee of a final acceptance certification pursuant to the Lease and delivered to Escrow Agent, and the payment
of all costs related thereto (i) any retainage shall be disbursed as directed by Lessee, and (ii) any amounts remaining in the
Acquisition Fund (including the earnings from investments thereof) shall be transferred to Lessee and be applied toward
reimbursement of Lessee for funds advanced for the Property. To the extent that additional moneys in excess of those needed
to reimburse Lessee for the acquisition of the Property exist in the Acquisition Fund, such amounts shall be paid to Lessor and
applied first to the next payment due on the Lease and then applied to prepayment of the principal component of installment
payments and Lessor shall recalculate the lease payment schedule for the remaining term such that the remaining lease
payments shall be level. Upon disbursement of all sums in the Acquisition Fund, this Escrow Agreement shall terminate,
provided that the indemnifications by Lessee shall survive the termination of this Escrow Agreement.
(b) Eighteen Months. This Escrow Agreement shall terminate eighteen (18) months from the date of
this Escrow Agreement. It may, however, be extended by mutual consent of the Lessee and Lessor in writing to the Escrow
Agent either in advance of the termination or retroactively. Any money remaining in the Acquisition Fund at the time of
termination under this subsection (b) shall be transferred to Lessor and shall be applied first to the next payment due under the
Lease, and then, if there are amounts remaining, applied to the prepayment of the Lease being applied to principal and Lessor
shall recalculate the lease payment schedule for the remaining term such that the remaining lease payments shall be level.
Lessee shall be deemed to have accepted all Property paid for from the Acquisition Fund at the time of termination under this
subsection (b). Upon disbursement of all sums in the Acquisition Fund, this Escrow Agreement shall terminate, provided that the
indemnifications by Lessee shall survive the termination of this Escrow Agreement.
(c) Event of Default; Nona ppropriation. Upon receipt of written notice from Lessor of an event of
default by Lessee under the Lease or an event of nonappropriation, if provided for under the Lease, Escrow Agent shall disburse
the funds in the Acquisition Fund to Lessor for application in accordance with the Lease. Upon such payments from the
Acquisition Fund, this Escrow Agreement shall terminate, provided that the indemnifications by Lessee shall survive the
termination of this Escrow Agreement.
4. Investment of Acquisition Fund; Arbitrage Rebate.
(a) Investment of Acquisition Fund. Monies held by Escrow Agent hereunder shall be invested and
reinvested by Escrow Agent upon written instructions from Lessee in an investment which is a permitted investment for Lessee
under the laws of the state in which Lessee is organized. Escrow Agent shall have no responsibility for advising Lessee or
Lessor as to the permissibility of any investment of monies in the Acquisition Fund. If Escrow Agent does not receive a written
direction from Lessee as to the investment or reinvestment of monies in the Acquisition Fund, Escrow Agent may hold such
monies uninvested until such direction is received. Escrow Agent shall have no responsibility for any losses suffered from any
investment of monies on deposit in the Acquisition Fund authorized by Lessee.
(b) Arbitrage Rebate. Lessee hereby represents, covenants and warrants that pursuant to Treasury
Regulations Section 1.148-7(d), the gross proceeds of the Lease will be expended for the governmental purposes for which the
Lease was entered into, as follows: at least 15% within six months after the Commencement Date, such date being the date of
deposit of funds into the Acquisition Account under Section 2.A., hereof, at least 60% within 12 months after the
Commencement Date, and 100% within 18 months after the Commencement Date. If Lessee is unable to comply with Section
1.148-7(d) of the Treasury Regulations, Lessee shall, at its sole expense and cost, compute rebatable arbitrage on the Lease
and pay rebatable arbitrage to the United States at least once every five years, and within 60 days after payment of the final
rental or installment payment due under the Lease.
5. Amendment and Modification. This Escrow Agreement may not be amended, modified, altered,
supplemented or waived except by a written instrument executed by Lessor, Lessee and Escrow Agent.
6. Regarding the Escrow Agent.
(a) Duties of Escrow Agent. Escrow Agent undertakes to perform only such duties as are
specifically set forth in this Escrow Agreement. Escrow Agent shall be under no implied obligation or subject to any implied
liability hereunder. Escrow Agent shall incur no liability whatsoever except for its gross negligence or willful misconduct so long
as it is acting in good faith. Escrow Agent shall not be required to take notice of any of the provisions of the Lease or any
document or instrument executed in connection therewith, except as expressly set forth in this Escrow Agreement. The
permissive right of the Escrow Agent to do things enumerated in this Escrow Agreement shall not be construed as a duty.
(b) Escrow Agent Reliance. Escrow Agent may act in reliance upon any writing or instrument or
signature which it, in good faith, believes to be genuine, may assume the validity and accuracy of any statement or assertion
contained in such a writing or instrument, and may assume that any person purporting to give any writing, notice, advice or
instructions in connection with the provisions hereof has been duly authorized to do so. Escrow Agent shall not be liable in any
manner for the sufficiency or correctness as to form, manner and execution, or validity of any instrument deposited with it, nor as
to the identity, authority or right of any person executing the same; and its duties hereunder shall be limited to those specifically
provided herein.
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M Counsel and Fees; Reliance upon Counsel. If Escrow Agent believes it to be reasonably
necessary to consult with counsel concerning any of its duties in connection herewith, or in case the Escrow Agent becomes
involved in litigation on account of acting hereunder, then, in either case, its cost, expenses and reasonable attorneys fees shall
be paid by Lessee, Escrow Agent's right to receive its attorneys' fees and expenses shall survive the termination of this Escrow
Agreement. If Escrow Agent consults with counsel, Escrow Agent may act, in good faith, in reliance upon the advice of counsel
concerning its duties in connection herewith or in acting hereunder.
(d) No Obligation to Take Legal Action. Escrow Agent shall not be under any obligation to take
any legal action in connection with this Escrow Agreement or for its enforcement, or to appear, prosecute or defend any action
or legal proceeding which, in its opinion, would or might involve it in any costs, expense, loss or liability, or to otherwise expend
or risk its own funds or incur any financial liability in the performance of this Escrow Agreement, unless and as often required by
it, it shall be furnished with security and indemnity satisfactory against all such costs, expenses, losses or liabilities. If any
controversy arises between the parties hereto or with any third person, the Escrow Agent shall not be required to resolve the
same or to take any action to do so (other than to use its best efforts to give notice of such controversy to Lessor and Lessee)
but may, at its discretion, institute such interpleader or other proceedings as it deems proper.
(e) Quarterly Statement. Escrow Agent shall issue a quarterly accounting statement showing
receipts to and disbursements from the Acquisition Fund. Such statement shall be mailed to Lessor and Lessee.
(f) Resignation and Termination. Escrow Agent may, upon providing thirty days written notice,
resign its position as Escrow Agent and terminate its liabilities and obligations hereunder. In the event Escrow Agent is not
notified within thirty days of a successor Escrow Agent, Escrow Agent shall be entitled to transfer all funds to a court of
competent jurisdiction with a request to have a successor appointed, at the expense of Lessee. Upon filing such action and
delivering such assets, Escrow Agent's obligations and responsibilities shall cease. Lessor and Lessee may jointly terminate
Escrow Agent and appoint a successor Escrow Agent by providing 15 days written notice to Escrow Agent.
7. Indemnification. To the extent permitted by law, Lessee hereby assumes liability for, and hereby
agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep
harmless the Escrow Agent and its respective successors, assigns, agents, employees and servants, from and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including
reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by or asserted
against, Escrow Agent at any time (whether or not also indemnified against the same by Lessee or any other person under any
other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and
performance of this Escrow Agreement, the establishment hereunder of the Acquisition Fund, the acceptance of the funds and
securities deposited therein, the purchase of any securities to be purchased pursuant thereto, the retention of such securities or
the proceeds thereof, and any payment, transfer or other application of moneys or securities by Escrow Agent in accordance
with the provisions of this Escrow Agreement; provided, however, that Lessee shall not be required to indemnify, protect, save or
keep harmless Escrow Agent against Escrow Agent's own gross negligence or willful misconduct or gross negligence or willful
misconduct of Escrow Agent's respective successors, assigns, agents and employees or the material breach by Escrow Agent
of the terms of this Escrow Agreement. The indemnities contained in this Section shall survive the termination of this Agreement.
8. Notices. Any notices permitted or required under this Escrow Agreement shall be made in writing and
shall be deemed given upon the date of personal delivery or 48 hours after deposit in the United States mail, certified or
registered, postage fully prepaid, return receipt requested, addressed to the addresses set forth on the signature page of this
Escrow Agreement. The party to whom notices or copies of notices are to be sent shall have the right at any time and from time
to time to change its address for notice or person to receive notice by giving notice in the manner specified in this paragraph.
9. Escrow Agent's Fee. Escrow Agent shall be paid no fee for setting up the escrow. In the event that
Escrow Agent is made a party to litigation with respect to the Acquisition Fund, or brings an action in interpleader, or Escrow
Agent is required to render any service not provided for in this Escrow Agreement, or there is any assignment of interests in this
escrow or any modification hereof, Escrow Agent shall be entitled to reasonable compensation for such extraordinary services
and reimbursement by Lessee for all fees, costs, liability and expenses, including attorney fees. Lessee also agrees to pay any
investment fees or other charges of Escrow Agent, such as wire transfer charges and disbursement charges and agrees such
fees and charges may be deducted by and paid to the Escrow Agent from funds in or to be deposited in the Acquisition
investment earnings to be deposited in the Acquisition Fund.
10. Counterparts. This Escrow Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same instrument. This Escrow Agreement is to be
executed by the parties hereto in sufficient numbers so that an Escrow Agreement bearing each party's original signature can be
held by the Escrow Agent.
11. Waiver. Any waiver by any party of any breach of any term or condition of this Escrow Agreement shall
not operate as a waiver of any other breach of such term or condition or any other term or condition, nor shall any failure to
enforce such provision hereof operate as a waiver of such provision or of any other provision hereof, nor constitute nor be
deemed a waiver or release of any other party for anything arising out of, connected with, or based on this Escrow Agreement.
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
12. Exhibits. All exhibits, schedules and lists attached to this Escrow Agreement or delivered pursuant to
this Escrow Agreement shall be deemed a part of this Escrow Agreement and incorporated herein, where applicable, as if fully
set forth herein.
located.
13. Applicable Law. This Escrow Agreement shall be governed by the laws of the state in which Lessee is
14. Successors and Assigns. This Escrow Agreement shall be binding on and shall inure to the benefit of
the parties and their respective successors and assigns. Any corporation or association into which the Escrow Agent may
merge, or to which Escrow Agent may sell or transfer its banking business, shall automatically be and become successor
Escrow Agent hereunder and vested with all powers as was its predecessor without the execution or filing of any instruments or
further act, deed or conveyance on the part of the parties hereto.
15. Severability. In the event any provision of this Escrow 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.
IN WITNESS WHEREOF, Lessor, Lessee and Escrow Agent have caused this Escrow Agreement to be
executed by their duly authorized representatives, all as of the date first above written.
Key Government Finance, Ind.
Authorized Office
Title MYRA AKSAMIT
CON i RACTS MANAGER
Address: 1000 S. McCaslin Blvd.
Superior, CO 80027
KEYBANK NATIONAL ASSOCIATION
By
Authorized Officer
Address: 127 Public Square
Cleveland OH 44114
City of Denton
By
A horized Officer
Title ~T)~ ,
Address: 215 E. McKinney
Denton, TX 76201
KEYCORP CONFIDENTIAL -This is counterpart# of manually executed counterparts. Only counterpart # 1 constitutes chattel paper
[Please type on your letterheadl
EXHIBIT A
FORM OF REQUISITION
COSTS OF PROPERTY
C/O Key Government Finance, Inc.
1000 South McCaslin Blvd.
Superior, CO 80027
Attn: Isaac Hudson
720-304-1288
On Behalf of:
KeyBank National Association
127 Public Square
Cleveland OH 44114
Amount Requested
Total Disbursements to Date: $
Requisition No.:
1. The undersigned, an officer or official of Lessee, hereby requests and authorizes KeyBank National Association, as
Escrow Agent under the Escrow Agreement dated as of 7/1/2011, among City of Denton (the "Lessee"), Key Government Finance, Inc.
(the "Lessor") and Escrow Agent, to pay to or upon the order of the Lessee the amount specified above for the payment or
reimbursement of costs of Property described in Schedule 1 attached.
2. The Lessee hereby certifies that:
(a) each obligation mentioned in Schedule 1 has been properly incurred, is a proper charge against the
Acquisition Fund and has not been the basis of any previous disbursement;
(b) no part of the disbursement requested hereby will be used to pay for materials not yet incorporated into the
Property or for services not yet performed in connection therewith;
(c) insurance requirements of the Lease have been complied with and such coverage is in force;
(d) as of the date of this Requisition no event of default or event of nonappropriation, if any, as such terms are
defined in the Lease between Lessor and Lessee has occurred and is continuing and no event which with notice or lapse of time, or
both, has occurred and is continuing which would constitute such event of default or event of nonappropriation; and
(e) the Property acquired with this disbursement is functionally complete and operationally independent and is
hereby accepted. If this is the final requisition, the final acceptance certification required in the Lease is attached hereto.
All capitalized terms herein shall have the meanings assigned to them in the Escrow Agreement
4. The list of equipment, set forth in the equipment/property description to the Lease, shall be deemed amended upon
payment of this requisition to include the property set forth in Schedule 1 hereto and any property paid with funds of this requisition.
City of Denton
By:
Name:
Title:
Date:
Approved by Lessor, or in the event Lessor's right, title and interest in the Lease has been assigned, by the current assignee of Lessor's right, title and
interest in the Lease Agreement:
Key Government Finance, Inc.
By:
Name:
Title:
Date:
[Lessee to attach final acceptance certification if final disbursement request.]
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SCHEDULE 1
DISBURSEMENT SCHEDULE
1
To Requisition No. for the Acquisition Fund:
Amount: $
Payee:
By check By wire transfer
If by check, Payee's address:
2
If by wire transfer, instructions as follows:
Pa to:
Bank Name:
Bank Address:
Bank City, State, Zip:
Bank Phone:
For Account of:
Account No.:
ABA No.:
Amount: $
By check By wire transfer.
If by check, Payee's address:
If by wire transfer, instructions as follows:
i-a to:
Bank Name:
Bank Address:
Bank City, State, Zip:
Bank Phone:
For Account of:
Account No.:
ABA No.:
City of Denton
By:
Name:
Title:
Date:
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INVOICE
4-:r
Key Government Finance, Inc.
1000 S. McCaslin Blvd.
Superior CO 80027
Bill to:
Invoice No.
DentonCity-02
Denton, City of
Invoice Date:
7/11/11
Kevin Gunn
Lease No.
TBD
215 E McKinney St
Purchase Order No.
Denton, TX 76205
Contract No.
CSA No.
ACT No.
Reference:
Qty
Item
Description
Total
1
Lease Payment
Payment due Upon Return of Executed
$118,591.00
Documents
Tax
Balance Due $118,591.00
Please remit funds to:
REMITTANCE INFORMATION
Key Government Finance, Inc.
Date:
Attn: Isaac Hudson
Amount Due:
1000 S. McCaslin Blvd.
Amount
Superior, CO 80027
Enclosed:
Contact Phone: 720-304-1288
Please remember to:
1) Make checks payable to Key Government Finance, Inc.
2) Return a copy of this invoice with your payment.
3) Keep a copy of this invoice for your records.
4) Direct all inquiries to the contact listed above.
Comments:
KEYCORP CONFIDENTIAL - This is counterpart # of manually executed counterparts. Only counterpart # 1 constitutes chattel paper